EX-12 2 exhibit1212311610-k.htm EXHIBIT 12 Exhibit


EXHIBIT 12
HSBC USA INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
 
 
Year Ended December 31,
  
2016
 
2015
 
2014
 
2013
 
2012
 
(dollars are in millions)
Ratios excluding interest on deposits:
 
 
 
 
 
 
 
 
 
Income from continuing operations
$
129

 
$
330

 
$
354

 
$
(338
)
 
$
(1,248
)
Income tax expense (benefit)
89

 
230

 
(56
)
 
156

 
422

Fixed charges:
 
 
 
 
 
 
 
 
 
Interest on:
 
 
 
 
 
 
 
 
 
Short-term borrowings
79

 
46

 
36

 
27

 
28

Long-term debt
864

 
709

 
650

 
661

 
671

Others(1)
15

 
16

 
(88
)
 
66

 
33

One third of rents, net of income from subleases
27

 
28

 
31

 
33

 
31

Total fixed charges, excluding interest on deposits
985

 
799

 
629

 
787

 
763

Earnings from continuing operations before taxes and fixed charges, excluding interest on deposits
$
1,203

 
$
1,359

 
$
927

 
$
605

 
$
(63
)
Ratio of earnings to fixed charges, excluding interest on deposits
1.22

 
1.70

 
1.47

 
.77

 
(.08
)
 
 
 
 
 
 
 
 
 
 
Ratios including interest on deposits:
 
 
 
 
 
 
 
 
 
Total fixed charges, excluding interest on deposits
$
985

 
$
799

 
$
629

 
$
787

 
$
763

Add: Interest on deposits
468

 
260

 
145

 
184

 
316

Total fixed charges, including interest on deposits
1,453

 
1,059

 
774

 
971

 
1,079

Earnings from continuing operations before taxes and fixed charges, excluding interest on deposits
1,203

 
1,359

 
927

 
605

 
(63
)
Add: Interest on deposits
468

 
260

 
145

 
184

 
316

Earnings from continuing operations before taxes and fixed charges, including interest on deposits
$
1,671

 
$
1,619

 
$
1,072

 
$
789

 
$
253

Ratio of earnings to fixed charges, including interest on deposits
1.15

 
1.53

 
1.39

 
.81

 
.23

 
(1) 
During 2014,we concluded certain state and local tax audits resulting in the settlement of significant uncertain tax positions covering a number of years. As a result, we released tax reserves previously maintained in relation to the periods and issues under review. In addition, we released our accrued interest associated with the tax reserves released which resulted in a $120 million benefit to interest expense in 2014.