EXHIBIT 12
HSBC FINANCE CORPORATION
COMPUTATION OF RATIO OF EARNINGS (LOSS) TO FIXED CHARGES AND TO
COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
| Nine Months Ended September 30, | 2014 | 2013 | |||||
| (dollars are in millions) | |||||||
| Income from continuing operations | $ | 509 | $ | 771 | |||
| Income tax expense | 182 | 376 | |||||
| Income from continuing operations before income tax expense | 691 | 1,147 | |||||
| Fixed charges: | |||||||
| Interest expense | 804 | 1,060 | |||||
Interest portion of rentals(1) | 3 | 3 | |||||
| Total fixed charges | 807 | 1,063 | |||||
| Total earnings from continuing operations as defined | $ | 1,498 | $ | 2,210 | |||
| Ratio of earnings to fixed charges | 1.86 | 2.08 | |||||
Preferred stock dividends(2) | $ | 145 | $ | 145 | |||
| Ratio of earnings to combined fixed charges and preferred stock dividends | 1.57 | 1.83 | |||||
(1) | Represents one-third of rentals, which approximates the portion representing interest. |
(2) | Preferred stock dividends are grossed up to their pretax equivalents. |