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, | 2012 | 2011 | ||||||
| (dollars are in millions) | ||||||||
Loss from continuing operations | $ | (2,209 | ) | $ | (1,728 | ) | ||
Income tax | 1,325 | 1,161 | ||||||
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Loss from continuing operations before income tax | (3,534 | ) | (2,889 | ) | ||||
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Fixed charges: | ||||||||
Interest expense | 1,382 | 1,830 | ||||||
Interest portion of rentals(1) | 6 | 7 | ||||||
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Total fixed charges | 1,388 | 1,837 | ||||||
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Total earnings (loss) from continuing operations as defined | $ | (2,146 | ) | $ | (1,052 | ) | ||
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Ratio of earnings to fixed charges | (1.55 | ) | (.57 | ) | ||||
Preferred stock dividends(2) | $ | 142 | $ | 148 | ||||
Ratio of earnings (loss) to combined fixed charges and preferred stock dividends | (1.40 | ) | (.53 | ) | ||||
| (1) | Represents one-third of rentals, which approximates the portion representing interest. |
| (2) | Preferred stock dividends are grossed up to their pretax equivalents. |