EX-12 8 tv486719_ex12.htm EXHIBIT 12

 

Exhibit 12

 

HSBC USA INC.

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND EARNINGS TO COMBINED
FIXED CHARGES AND PREFERRED STOCK DIVIDENDS

 

   Year Ended December 31, 
   2017   2016   2015   2014   2013 
   (dollars are in millions) 
Ratios excluding interest on deposits:                         
Net income (loss)  $(179)  $129   $330   $354   $(338)
Income tax expense (benefit)   1,228    89    230    (56)   156 
Fixed charges:                         
Interest on:                         
Short-term borrowings   124    79    46    36    27 
Long-term debt   998    864    709    650    661 
Others(2)   25    15    16    (88)   66 
One third of rents, net of income from subleases   31    27    28    31    33 
Total fixed charges, excluding interest on deposits   1,178    985    799    629    787 
Earnings before taxes and fixed charges, excluding interest on deposits  $2,227   $1,203   $1,359   $927   $605 
Ratio of earnings to fixed charges, excluding interest on deposits   1.89    1.22    1.70    1.47    .77 
Preferred stock dividends(1)  $123   $107   $104   $120   $125 
Fixed charges, including preferred stock dividends  $1,301   $1,092   $903   $749   $912 
Ratio of earnings to fixed charges, including preferred stock dividends   1.71    1.10    1.50    1.24    .66 
                          
Ratios including interest on deposits:                         
Total fixed charges, excluding interest on deposits  $1,178   $985   $799   $629   $787 
Add: Interest on deposits   703    468    260    145    184 
Total fixed charges, including interest on deposits   1,881    1,453    1,059    774    971 
Earnings before taxes and fixed charges, excluding interest on deposits   2,227    1,203    1,359    927    605 
Add: Interest on deposits   703    468    260    145    184 
Earnings before taxes and fixed charges, including interest on deposits  $2,930   $1,671   $1,619   $1,072   $789 
Ratio of earnings to fixed charges, including interest on deposits   1.56    1.15    1.53    1.39    .81 
Fixed charges, including preferred stock dividends  $1,301    1,092   $903    749    912 
Add: Interest on deposits   703    468    260    145    184 
Fixed charges, including interest on deposits and the preferred stock dividend factor  $2,004    1,560   $1,163    894    1,096 
Ratio of earnings to fixed charges, including interest on deposits and preferred stock dividends   1.46    1.07    1.39    1.20    .72 

 

 

 

(1)Preferred stock dividends are grossed up to their pretax equivalents.

 

(2)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.