EX-12 2 c16951exv12.htm STATEMENT OF COMPUTATION 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
 
                 
Six months ended June 30,   2007     2006  
   
    (dollars are in millions)  
 
Net income
  $ 604     $ 1,456  
Income tax expense
    345       840  
                 
Income before income tax expense
    949       2,296  
                 
Fixed charges:
               
Interest expense
    4,099       3,385  
Interest portion of rentals(1)
    29       29  
                 
Total fixed charges
    4,128       3,414  
                 
Total earnings as defined
  $ 5,077     $ 5,710  
                 
Ratio of earnings to fixed charges
    1.23       1.67  
Preferred stock dividends(2)
    29       29  
Ratio of earnings to combined fixed charges and preferred stock dividends
    1.22       1.66  
 
 
(1)  Represents one-third of rentals, which approximates the portion representing interest.
 
(2)  Preferred stock dividends are grossed up to their pretax equivalents.