EX-12 3 d71182_ex12.htm COMPUTATION RATIO OF EARNINGS

Exhibit 12

HSBC USA Inc.
Computation of Ratio of Earnings to Fixed Charges and
Earnings to Combined Fixed Charges and Preferred Stock Dividends
(in millions, except ratios)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31

 

2006

 

2005

 

2004

 

2003

 

2002

 

 

Ratios excluding interest on deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

1,036

 

$

976

 

$

1,258

 

$

941

 

$

855

 

Income tax expense

 

 

530

 

 

566

 

 

718

 

 

570

 

 

510

 

Less: Undistributed equity earnings

 

 

34

 

 

73

 

 

21

 

 

6

 

 

7

 

Fixed charges:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest on:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Borrowed funds

 

 

300

 

 

276

 

 

132

 

 

91

 

 

232

 

Long-term debt

 

 

1,457

 

 

1,019

 

 

380

 

 

206

 

 

225

 

One third of rents, net of income from subleases

 

 

25

 

 

19

 

 

19

 

 

17

 

 

17

 

 

 

 

 

 

 

 

Total fixed charges, excluding interest on deposits

 

 

1,782

 

 

1,314

 

 

531

 

 

314

 

 

474

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings before taxes and fixed charges, net of undistributed equity earnings

 

$

3,314

 

$

2,783

 

$

2,486

 

$

1,819

 

$

1,832

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ratio of earnings to fixed charges

 

 

1.86

 

 

2.12

 

 

4.68

 

 

5.79

 

 

3.86

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total preferred stock dividend factor (1)

 

$

133

 

$

71

 

$

36

 

$

36

 

$

37

 

 

 

 

 

 

 

 

Fixed charges, including the preferred stock dividend factor

 

$

1,915

 

$

1,385

 

$

567

 

$

350

 

$

511

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ratio of earnings to combined fixed charges and preferred stock dividends

 

 

1.73

 

 

2.01

 

 

4.38

 

 

5.20

 

 

3.59

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ratios including interest on deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total fixed charges, excluding interest on deposits

 

$

1,782

 

$

1,314

 

$

531

 

$

314

 

$

474

 

Add: Interest on deposits

 

 

3,113

 

 

1,771

 

 

825

 

 

666

 

 

974

 

 

 

 

 

 

 

 

Total fixed charges, including interest on deposits

 

$

4,895

 

$

3,085

 

$

1,356

 

$

980

 

$

1,448

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings before taxes and fixed charges, net of undistributed equity earnings

 

$

3,314

 

$

2,783

 

$

2,486

 

$

1,819

 

$

1,832

 

Add: Interest on deposits

 

 

3,113

 

 

1,771

 

 

825

 

 

666

 

 

974

 

 

 

 

 

 

 

 

Total

 

$

6,427

 

$

4,554

 

$

3,311

 

$

2,485

 

$

2,806

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ratio of earnings to fixed charges

 

 

1.31

 

 

1.48

 

 

2.44

 

 

2.54

 

 

1.94

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed charges, including the preferred stock dividend factor

 

$

1,915

 

$

1,385

 

$

567

 

$

350

 

$

511

 

Add: Interest on deposits

 

 

3,113

 

 

1,771

 

 

825

 

 

666

 

 

974

 

 

 

 

 

 

 

 

Fixed charges, including the preferred stock dividend factor and interest on deposits

 

$

5,028

 

$

3,156

 

$

1,392

 

$

1,016

 

$

1,485

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ratio of earnings to combined fixed charges and preferred stock dividends

 

 

1.28

 

 

1.44

 

 

2.38

 

 

2.45

 

 

1.89

 

 

 

 

 

 

 

 

 

 

(1)

Preferred stock dividends grossed up to their pretax equivalents.

207