EX-12 2 c04610exv12.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
                   
    Three months ended
    March 31,
     
    2006   2005
 
    (dollars are in
    millions)
Net income
   $ 888     $ 626  
Income tax expense
     511       341  
             
Income before income tax expense
     1,399       967  
             
Fixed charges:
                
 
Interest expense
     1,623       1,062  
 
Interest portion of rentals(1)
     16       15  
             
Total fixed charges
     1,639       1,077  
             
Total earnings as defined
   $ 3,038     $ 2,044  
             
Ratio of earnings to fixed charges
     1.85       1.90  
Preferred stock dividends(2)
     14       28  
Ratio of earnings to combined fixed charges and preferred stock dividends
     1.84       1.85  
 
(1)  Represents one-third of rentals, which approximates the portion representing interest.
 
(2)  Preferred stock dividends are grossed up to their pretax equivalents.