EX-12 2 c09546exv12.htm STATEMENT OF COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES exv12
 

HSBC Finance Corporation
 
EXHIBIT 12
 
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND TO
COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
 
                 
    Nine months ended
 		 
    September 30,  
    2006     2005  
   
    (dollars are in millions)  
 
Net income
  $ 2,007     $ 1,379  
Income tax expense
    1,167       695  
                 
Income before income tax expense
    3,174       2,074  
                 
Fixed charges:
               
Interest expense
    5,318       3,405  
Interest portion of rentals(1)
    44       45  
                 
Total fixed charges
    5,362       3,450  
                 
Total earnings as defined
  $ 8,536     $ 5,524  
                 
Ratio of earnings to fixed charges
    1.59       1.60  
Preferred stock dividends(2)
    43       93  
Ratio of earnings to combined fixed charges and preferred stock dividends
    1.58       1.56  
 
 
(1) Represents one-third of rentals, which approximates the portion representing interest.
 
(2) Preferred stock dividends are grossed up to their pretax equivalents.