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Financial Statements of HSBC USA Inc. (Parent)
12 Months Ended
Dec. 31, 2017
Condensed Financial Information of Parent Company Only Disclosure [Abstract]  
Financial Statements of HSBC USA Inc. (Parent)
Financial Statements of HSBC USA Inc. (Parent)
 
Condensed parent company financial statements follow:
Balance Sheet
At December 31,
2017
 
2016
 
(in millions)
Assets:
 
 
 
Interest bearing deposits with banks
$
1

 
$

Securities held-to-maturity (fair value of $3 million at both December 31, 2017 and 2016)
2

 
3

Receivables and balances due from subsidiaries
14,536

 
17,356

Receivables from other HSBC affiliates
6,722

 
3,863

Investment in subsidiaries:
 
 
 
Banking
23,316

 
23,626

Other
1

 
3

Other assets
148

 
267

Total assets
$
44,726

 
$
45,118

Liabilities:
 
 
 
Interest, taxes and other liabilities
$
137

 
$
106

Payables due to subsidiaries
3

 
1

Payables due to other HSBC affiliates
22

 
27

Short-term borrowings
1,154

 
1,251

Long-term debt(1)
22,474

 
22,542

Long-term debt due to other HSBC affiliates(1)
842

 
836

Total liabilities
24,632

 
24,763

Total equity
20,094

 
20,355

Total liabilities and equity
$
44,726

 
$
45,118

 
(1) 
Contractual scheduled maturities for the debt over the next five years are as follows: 2018 –$7.1 billion; 2019 – $4.0 billion; 2020 – $5.8 billion; 2021 – $1.6 billion; 2022 – $1.7 billion; and thereafter – $3.1 billion.


Statement of Income (Loss)
Year Ended December 31,
2017
 
2016
 
2015
 
(in millions)
Income:
 
 
 
 
 
Dividends from banking subsidiaries
$
136

 
$
136

 
$
104

Dividends from other subsidiaries

 
17

 
1

Interest from subsidiaries
309

 
268

 
97

Interest from other HSBC affiliates
37

 
115

 
121

Other interest income
5

 
2

 
14

Other securities gains, net

 
7

 
1

Other income (loss) from subsidiaries
(1
)
 
1

 
(2
)
Other income (loss) from other HSBC Affiliates
1,093

 
418

 
(79
)
Other income (loss)
(772
)
 
(321
)
 
121

Total income
807

 
643

 
378

Expenses:
 
 
 
 
 
Interest to subsidiaries

 

 
23

Interest to other HSBC Affiliates
40

 
43

 
28

Other interest expense
541

 
475

 
375

Other expenses with subsidiaries
15

 
27

 

Other expenses
3

 
3

 
6

Total expenses
599

 
548

 
432

Income (loss) before taxes and equity in undistributed income (loss) of subsidiaries
208

 
95

 
(54
)
Income tax expense (benefit)
18

 
(27
)
 
(76
)
Income (loss) before equity in undistributed income (loss) of subsidiaries
190

 
122

 
22

Equity in undistributed income (loss) of subsidiaries
(369
)
 
7

 
308

Net income (loss)
$
(179
)
 
$
129

 
$
330



Statement of Comprehensive Loss
Year Ended December 31,
2017
 
2016
 
2015
 
(in millions)
Net income (loss)
$
(179
)
 
$
129

 
$
330

Net change in unrealized gains (losses), net of tax:
 
 
 
 
 
Investment securities
211

 
(227
)
 
(392
)
Fair value option liabilities attributable to our own credit spread
(193
)
 

 

Derivatives designated as cash flow hedges
(7
)
 
13

 
(14
)
Pension and post-retirement benefit plans
2

 
3

 

Total other comprehensive income (loss)
13

 
(211
)
 
(406
)
Comprehensive loss
$
(166
)
 
$
(82
)
 
$
(76
)



Statement of Cash Flows
Year Ended December 31,
2017
 
2016
 
2015
 
(in millions)
Cash flows from operating activities:
 
 
 
 
 
Net income (loss)
$
(179
)
 
$
129

 
$
330

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
 
Depreciation and amortization
12

 
14

 
25

Net change in other assets and liabilities
485

 
274

 
517

Undistributed (income) loss of subsidiaries
369

 
(7
)
 
(308
)
Other, net
5

 
(4
)
 
(31
)
Cash provided by operating activities
692

 
406

 
533

Cash flows from investing activities:
 
 
 
 
 
Purchases of securities

 

 
(56
)
Sales and maturities of securities
1

 
254

 
298

Net change in investments in and receivables due from subsidiaries
2,843

 
(496
)
 
(4,489
)
Net change in receivables from other HSBC affiliates
(2,882
)
 
887

 
835

Other, net
403

 
(27
)
 
(38
)
Cash provided by (used in) investing activities
365

 
618

 
(3,450
)
Cash flows from financing activities:
 
 
 
 
 
Net change in payables to other HSBC affiliates
(2
)
 
19

 

Net change in short-term borrowings
(97
)
 
(727
)
 
(2,794
)
Issuance of long-term debt
4,826

 
3,587

 
11,946

Repayment of long-term debt
(5,689
)
 
(3,815
)
 
(9,870
)
Preferred stock issuance

 
1,265

 

Preferred stock redemption

 
(1,265
)
 
(300
)
Capital contribution from parent

 

 
4,000

Other increases (decreases) in capital surplus
(18
)
 
(21
)
 
(1
)
Dividends paid
(77
)
 
(67
)
 
(65
)
Cash provided by (used in) financing activities
(1,057
)
 
(1,024
)
 
2,916

Net change in cash and due from banks

 

 
(1
)
Cash and due from banks at beginning of year

 

 
1

Cash and due from banks at end of year
$

 
$

 
$

Cash paid for:
 
 
 
 
 
Interest
$
579

 
$
517

 
$
406


HSBC Bank USA is subject to legal restrictions on certain transactions with its non-bank affiliates in addition to the restrictions on the payment of dividends to us. See Note 23, "Retained Earnings and Regulatory Capital Requirements," for further discussion.