EX-12.02 4 d50014_ex12-02.txt COMPUTATION OF RATIOS Exhibit 12.02
HSBC USA Inc. Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Dividends (in millions, except ratios) ------------------------------------------------------------------------------------------------------------ Year Ended December 31, 2001 2000* 1999 1998 1997 ------------------------------------------------------------------------------------------------------------ Excluding interest on deposits Income before cumulative effect of accounting change $ 354 $ 569 $ 464 $ 527 $ 471 Applicable income tax expense 226 339 308 238 193 Less undistributed equity earnings 9 8 4 2 2 Fixed charges: Interest on: Borrowed funds 337 445 130 204 197 Long-term debt 328 420 112 96 112 One third of rents, net of income from subleases 18 22 15 14 14 ------------------------------------------------------------------------------------------------------------ Total fixed charges 683 887 257 314 323 Earnings before taxes and cumulative effect of accounting change based on income and fixed charges $1,254 $1,787 $1,025 $1,077 $ 985 ------------------------------------------------------------------------------------------------------------ Total fixed charges $ 683 $ 887 $ 257 $ 314 $ 323 Preferred dividends 25 28 -- -- 1 Ratio of pretax income to income before cumulative effect of accounting change 1.64 1.60 1.66 1.45 1.41 ------------------------------------------------------------------------------------------------------------ Total preferred stock dividend factor 41 44 -- -- 2 Fixed charges, including preferred stock dividend factor $ 724 $ 931 $ 257 $ 314 $ 325 ------------------------------------------------------------------------------------------------------------ Ratio of earnings to combined fixed charges and preferred dividends 1.73 1.92 3.99 3.43 3.03 ------------------------------------------------------------------------------------------------------------ Including interest on deposits Total fixed charges, including preferred stock dividend factor (as above) $ 724 $ 931 $ 257 $ 314 $ 325 Add: Interest on deposits 1,857 2,334 853 867 679 ------------------------------------------------------------------------------------------------------------ Fixed charges, including preferred stock dividend factor and interest on deposits $2,581 $3,265 $1,110 $1,181 $1,004 ------------------------------------------------------------------------------------------------------------ Earnings before taxes and cumulative effect of accounting change based on income and fixed charges (as above) $1,254 $1,787 $1,025 $1,077 $ 985 Add: Interest on deposits 1,857 2,334 853 867 679 ------------------------------------------------------------------------------------------------------------ Total $3,111 $4,121 $1,878 $1,944 $1,664 ------------------------------------------------------------------------------------------------------------ Ratio of earnings to combined fixed charges and preferred dividends 1.21 1.26 1.69 1.65 1.66 ------------------------------------------------------------------------------------------------------------
* Restated to exclude an investment in an entity transferred to HSBC North America Inc. during 2001. 104