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HSBC Finance Corporation
EXHIBIT 12
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND TO
COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
| Nine months ended | ||||||||
| September 30, | ||||||||
| 2006 | 2005 | |||||||
| (dollars are in millions) | ||||||||
| Net income | $ | 2,007 | $ | 1,379 | ||||
| Income tax expense | 1,167 | 695 | ||||||
| Income before income tax expense | 3,174 | 2,074 | ||||||
| Fixed charges: | ||||||||
| Interest expense | 5,318 | 3,405 | ||||||
Interest portion of rentals(1) | 44 | 45 | ||||||
| Total fixed charges | 5,362 | 3,450 | ||||||
| Total earnings as defined | $ | 8,536 | $ | 5,524 | ||||
| Ratio of earnings to fixed charges | 1.59 | 1.60 | ||||||
Preferred stock dividends(2) | 43 | 93 | ||||||
| Ratio of earnings to combined fixed charges and preferred stock dividends | 1.58 | 1.56 | ||||||
| (1) | Represents one-third of rentals, which approximates the portion representing interest. | |
| (2) | Preferred stock dividends are grossed up to their pretax equivalents. |