EX-7.4 6 dex74.htm COMPUTATION OF RATIO OF EARINGS TO FIXED CHARGES BASED ON US GAAP Computation of Ratio of Earings to Fixed Charges based on US GAAP

Exhibit 7.4

 

MTR Corporation Limited

 

Computation of

Ratio of Earnings to Fixed Charges

Based on US GAAP

(Expressed in millions of HK$)

 

     As of December 31

 
     1999

   2000

    2001

   2002

    2003

 

Net income in accordance with US GAAP

   2,449    3,418     4,468    3,261     1,369  
    
  

 
  

 

Adjustments:

                            

Income tax under HK GAAP

   —      —       —      634     748  

US GAAP adjustments related to taxes:

                            

Deferred tax accounting

   49    574     724    128     15  

Tax effect of adjustments

   72    (9 )   160    (35 )   (637 )
    
  

 
  

 

Income before tax in accordance with US GAAP

   2,570    3,983     5,352    3,988     1,495  
    
  

 
  

 

Fixed charges:

                            

Interest expenses

   1,680    1,942     1,870    1,748     1,636  

Amortization of debt discount or deferred debt costs

   32    46     53    23     24  

Representative portion of interest in operating lease expenses(1)

   13    6     5    4     4  
    
  

 
  

 

Total fixed charges (B)

   1,725    1,994     1,928    1,775     1,664  
    
  

 
  

 

Less: fixed charges capitalized

   383    797     1,029    621     104  
    
  

 
  

 

     1,342    1,197     899    1,154     1,560  
    
  

 
  

 

Earnings before taxes and fixed charges (A)

   3,912    5,180     6,251    5,142     3,055  
    
  

 
  

 

Ratio of Earnings to Fixed Charges (A)/(B)

   2.27    2.60     3.24    2.90     1.84  
    
  

 
  

 


(1)   The balance represented one third of operating lease expenses of the Group.