Financial Statements of HSBC USA Inc. (Parent)

Condensed parent company financial statements follow:



Balance Sheet At December 31,	2019		2018
	(in millions)
Assets:
Interest bearing deposits with banks	$	—	$	2
Securities held-to-maturity (fair value of $2 million at both December 31, 2019 and 2018, respectively)	2		2
Receivables and balances due from subsidiaries	14,044		15,593
Receivables from other HSBC affiliates	2,335		2,510
Investment in subsidiaries:
Banking	21,753		23,765
Other	12		1
Other assets	204		179
Total assets	$	38,350	$	42,052
Liabilities:
Interest, taxes and other liabilities	$	137	$	127
Payables due to subsidiaries	3		12
Payables due to other HSBC affiliates	35		12
Short-term borrowings	2,476		2,532
Long-term debt⁽¹⁾	14,595		16,017
Long-term debt due to other HSBC affiliates⁽¹⁾	2,848		2,846
Total liabilities	20,094		21,546
Total equity	18,256		20,506
Total liabilities and equity	$	38,350	$	42,052


⁽¹⁾	Contractual scheduled maturities for the debt over the next five years are as follows: 2020 – $6.0 billion; 2021 – $2.5 billion; 2022 – $2.2 billion; 2023 – $1.1 billion; 2024 – $1.5 billion; and thereafter – $4.1 billion.



Statement of Income (Loss) Year Ended December 31,	2019			2018			2017
	(in millions)
Income:
Dividends from banking subsidiaries	$	138		$	137		$	136
Interest from subsidiaries	350			367			309
Interest from other HSBC affiliates	91			55			37
Other interest income	—			—			5
Other income (loss) from subsidiaries	2			(2		)	(1		)
Other income (loss) from other HSBC Affiliates	1,645			(829		)	1,093
Other income (loss)	(1,690		)	792			(772		)
Total income	536			520			807
Expenses:
Interest to other HSBC Affiliates	140			62			40
Other interest expense	549			574			541
Other expenses with subsidiaries	12			8			15
Other expenses	5			2			3
Total expenses	706			646			599
Income (loss) before taxes and equity in undistributed income (loss) of subsidiaries	(170		)	(126		)	208
Income tax expense (benefit)	(78		)	(66		)	18
Income (loss) before equity in undistributed income (loss) of subsidiaries	(92		)	(60		)	190
Equity in undistributed income (loss) of subsidiaries	205			380			(369		)
Net income (loss)	$	113		$	320		$	(179	)



Statement of Comprehensive Income (Loss) Year Ended December 31,	2019			2018			2017
	(in millions)
Net income (loss)	$	113		$	320		$	(179	)
Net change in unrealized gains (losses), net of tax:
Investment securities	403			(220		)	211
Fair value option liabilities attributable to our own credit spread	(310		)	324			(193		)
Derivatives designated as cash flow hedges	8			40			(7		)
Pension and post-retirement benefit plans	(14		)	8			2
Total other comprehensive income	87			152			13
Comprehensive income (loss)	$	200		$	472		$	(166	)



Statement of Cash Flows Year Ended December 31,	2019			2018			2017
	(in millions)
Cash flows from operating activities:
Net income (loss)	$	113		$	320		$	(179	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization	5			8			12
Net change in other assets and liabilities	1,463			(1,277		)	481
Undistributed (income) loss of subsidiaries	(205		)	(380		)	369
Other, net	4			16			5
Cash provided by (used in) operating activities	1,380			(1,313		)	688
Cash flows from investing activities:
Sales and maturities of securities	—			—			1
Net change in investments in and receivables due from subsidiaries	3,929			(1,045		)	2,843
Net change in receivables from other HSBC affiliates	183			4,211			(2,882		)
Other, net	1			10			403
Cash provided by investing activities	4,113			3,176			365
Cash flows from financing activities:
Net change in payables to other HSBC affiliates	4			(19		)	(2		)
Net change in short-term borrowings	(56		)	1,378			(97		)
Issuance of long-term debt	2,931			5,571			4,826
Repayment of long-term debt	(5,897		)	(8,722		)	(5,684		)
Return of capital to parent	(2,400		)	—			—
Other increases (decreases) in capital surplus	—			6			(18		)
Dividends paid	(77		)	(76		)	(77		)
Cash used in financing activities	(5,495		)	(1,862		)	(1,052		)
Net change in cash and due from banks and interest bearing deposits with banks	(2		)	1			1
Cash and due from banks and interest bearing deposits with banks at beginning of year	2			1			—
Cash and due from banks and interest bearing deposits with banks at end of year	$	—		$	2		$	1
Cash paid for:
Interest	$	662		$	649		$	584

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 25, "Retained Earnings and Regulatory Capital Requirements," for further discussion.