Financial Statements of HSBC USA Inc. (Parent)

12 Months Ended

Dec. 31, 2011

Financial Statements of HSBC USA Inc. (Parent) [Abstract]

Financial Statements of HSBC USA Inc. (Parent)

31. Financial Statements of HSBC USA Inc. (Parent)

Condensed parent company financial statements follow.

Balance Sheet At December 31,	2011		2010
	(in millions)
Assets:
Cash and due from banks	$	-	$	-
Interest bearing deposits with banks		900		-
Trading assets		869		794
Securities available-for-sale		273		259
Securities held-to-maturity (fair value $40 million and $51 million)		19		39
Loans		433		43
Receivables from subsidiaries		11,584		9,476
Receivables from other HSBC affiliates		532		1,149
Investment in subsidiaries at amount of their net assets:
Banking		19,591		17,682
Other		67		205
Goodwill		589		589
Other assets		507		404
Total assets	$	35,364	$	30,640
Liabilities:
Interest, taxes and other liabilities	$	318	$	255
Payables due to subsidiaries		1,813		1,051
Payables due to other HSBC affiliates		605		265
Short-term borrowings		4,836		3,027
Long-term debt (1)		4,417		7,438
Long-term debt due to subsidiary and other HSBC affiliates (1)		4,873		1,871
Total liabilities		16,862		13,907
Shareholders’ equity		18,502		16,733
Total liabilities and shareholders’ equity	$	35,364	$	30,640

⁽¹⁾  Contractual scheduled maturities for the debt over the next five years are as follows: 2012 – $1.8 billion; 2013 – $1.5 million; 2014 – $1.3 million; 2015 – $1.2 billion; 2016 – $1.2 million; and thereafter – $2.2 billion.

Statement of Income (Loss) Year Ended December 31,	2011			2010			2009
	(in millions)
Income:
Dividends from banking subsidiaries	$	1		$	5		$	7
Dividends from other subsidiaries		2			2			2
Interest from subsidiaries		67			74			70
Interest from other HSBC affiliates		17			20			46
Other interest income		19			22			27
Securities transactions		-			1			2
Other income from subsidiaries		(131	)		(89	)		(20	)
Other income from other HSBC Affiliates		(18	)		217			173
Other income		312			(30	)		(189	)
Total income		269			222			118
Expenses:
Interest to subsidiaries		70			70			70
Interest to other HSBC Affiliates		48			19			9
Other Interest Expense		224			216			241
Provision for credit losses		(1	)		-			-
Other expenses with subsidiaries		-			-			9
Other expenses with Other HSBC Affiliates		12			4			4
Other expenses		2			3			4
Total expenses		355			312			337
Loss before taxes and equity in undistributed income of subsidiaries		(86	)		(90	)		(219	)
Income tax benefit		62			47			96
Loss before equity in undistributed income of subsidiaries		(24	)		(43	)		(123	)
Equity in undistributed income (loss) of subsidiaries		1,042			1,607			(19	)
Net income (loss)	$	1,018		$	1,564		$	(142	)

Statement of Cash Flows Year Ended December 31,	2011			2010			2009
	(in millions)
Cash flows from operating activities:
Net income	$	1,018		$	1,564		$	(142	)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and deferred taxes		149			141			152
Net change in other accrued accounts		765			708			297
Net change in fair value of non-trading derivatives		(240	)		(176	)		130
Undistributed loss (gain) of subsidiaries		(1,042	)		(1,607	)		19
Other, net		(73	)		(291	)		359
Net cash provided by operating activities		577			339			815
Cash flows from investing activities:
Net change in interest bearing deposits with banks		(900	)		64			1
Purchases of securities		-			-			(9,948	)
Sales and maturities of securities		21			107			9,912
Net change in loans		(390	)		295			(190	)
Net change in investments in and advances to subsidiaries		(1,134	)		(1,833	)		(1,428	)
Other, net		-			105			(14	)
Net cash used in investing activities		(2,403	)		(1,262	)		(1,667	)
Cash flows from financing activities:
Net change in short-term borrowings		1,809			67			(996	)
Issuance of long-term debt, net of issuance costs		5,511			2,357			3,457
Repayment of long-term debt		(5,450	)		(1,417	)		(3,637	)
Dividends paid		(73	)		(74	)		(73	)
Additions (reductions) of capital surplus		29			(10	)		(66	)
Preferred stock issuance, net of redemptions		-			-			-
Capital contribution from HNAI		-			-			2,167
Net cash provided by financing activities		1,826			923			852
Net change in cash and due from banks		-			-			-
Cash and due from banks at beginning of year		-			-			-
Cash and due from banks at end of year	$	-		$	-		$	-
Cash paid for:
Interest	$	338		$	295		$	352

HSBC Bank USA is subject to legal restrictions on certain transactions with its nonbank affiliates in addition to the restrictions on the payment of dividends to us. See Note 26, “Retained Earnings and Regulatory Capital Requirements,” for further discussion.