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x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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98-0080034
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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85 Broad Street, New York, NY
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10004
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Name of each exchange on which registered
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Class A non-voting common stock
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New York Stock Exchange
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Large accelerated filer
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o
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Accelerated filer
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x
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Non-accelerated filer
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o
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(Do not check if a smaller reporting company)
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Smaller reporting company
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o
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Emerging growth company
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o
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Item
Number
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Page
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1
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1A.
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1B.
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2
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3
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4
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5
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6
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7
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7A.
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8
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9
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9A.
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9B.
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10
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11
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12
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13
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14
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15
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•
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sales methods and supervision;
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•
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trading practices among broker-dealers;
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•
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emerging standards concerning fees and charges imposed on clients for fee-based programs;
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•
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use and safekeeping of customers' funds and securities;
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•
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anti-money laundering and the USA Patriot Act (the "Patriot Act") compliance;
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•
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capital structure of securities firms;
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•
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trade and regulatory reporting;
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•
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cybersecurity;
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•
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pricing of services;
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•
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compliance with DOL rules and regulations for retirement accounts;
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•
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compliance with lending practices (Regulation T);
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•
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record keeping; and
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•
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the conduct of directors, officers and employees.
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•
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censure;
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•
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fine;
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•
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civil penalties, including treble damages in the case of insider trading violations;
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•
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the issuance of cease-and-desist orders;
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•
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the deregistration or suspension of our broker-dealer activities;
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•
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the suspension or disqualification of our officers or employees; or
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•
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other adverse consequences.
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•
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The Company's investment banking revenue, in the form of underwriting, placement and financial advisory fees, is directly related to the volume and value of transactions as well as the Company's role in these transactions. In an environment of uncertain or unfavorable market or economic conditions such as we have observed in recent years, the volume and size of capital-raising transactions and acquisitions and dispositions typically decrease, thereby reducing the demand for the Company's investment banking services and increasing price competition among financial services companies seeking such engagements. The completion of anticipated investment banking transactions in the Company's pipeline is uncertain and beyond its control, and its investment banking revenue is typically earned upon the successful completion of a transaction. In most cases, the Company receives little or no payment for investment banking engagements that do not result in the successful completion of a transaction. For example, a client's acquisition transaction may be delayed or terminated because of a failure to agree upon final terms with the counterparty, failure to obtain necessary regulatory consents or board or stockholder approvals, failure to secure necessary financing, adverse market conditions or unexpected financial or other problems in the client's or counterparty's business. If the parties fail to complete a transaction on which the Company is advising or an offering in which it is participating, the Company will earn little or no revenue from the transaction but may incur expenses including but not limited to legal fees. The Company may perform services subject to an engagement agreement and the client may refuse to pay fees due under such agreement, requiring the Company to re-negotiate fees or commence legal action for collection of such earned fees. Accordingly, the Company's business is highly dependent on market conditions, the decisions and actions of its clients and interested third parties. The number of engagements the Company has at any given time is subject to change and may not necessarily result in future revenues.
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•
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A portion of the Company's revenues are derived from fees generated from its asset management business segment. Asset management fees often are primarily comprised of base management and performance (or incentive) fees. Management fees are primarily based on assets under management. Assets under management balances are impacted by net inflow/outflow of client assets and changes in market values. Poor investment performance by the Company's funds and portfolio managers could result in a loss of managed accounts and could result in reputational damage that might make it more difficult to attract new investors and thus further impact the Company's business and financial condition. If the Company experiences losses of managed accounts, fee revenue will decline. In addition, in periods of declining market values, the values under management may ultimately decline, which would negatively impact fee revenues.
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•
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In the past decade, passively managed index funds have seen greater investor interest, and this trend has become more dramatic in recent years. A continued lessening of investor interest in active investing and continued increase in passive investing may lead to a decline in the revenue the Company generates from commissions on the execution of trading transactions and, in respect of its market-making activities, a reduction in the value of its trading positions and commissions and spreads.
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•
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Financial markets are susceptible to severe events such as dislocations which may lead to reduced liquidity. Under these extreme conditions, the Company's risk management strategies may not be as effective as they might otherwise be under normal market conditions.
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•
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Liquidity is essential to the Company's businesses. The Company's liquidity could be negatively affected by an inability to obtain funding on a regular basis either in the short term market through bank borrowing or in the long term market through senior and subordinated borrowings. Such illiquidity could arise through a lowering of the Company's credit rating or through market disruptions unrelated to the Company. The availability of unsecured financing is largely dependent on our credit rating which is largely determined by factors such as the level and quality of our earnings, capital adequacy, risk management, asset quality and business mix. As noted above, the Company has purchased, and will continue to purchase, auction rate securities from its clients which will reduce liquidity available to the Company for other purposes. The failure to secure the liquidity necessary for the Company to operate and grow could have a material adverse effect on the Company's financial condition and results of operations. See "Management's Discussion and Analysis of Financial Condition and Results of Operations
—
Liquidity and Capital Resources" in Item 7.
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•
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Changes in interest rates (especially if such changes are rapid), high interest rates or uncertainty regarding the future direction of interest rates, may create a less favorable environment for certain of the Company's businesses, particularly its fixed income business, resulting in reduced business volume and reduced revenue.
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•
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The reduction of interest rates substantially reduced the interest profits available to the Company through its margin lending and also reduced profit contributions from cash sweep products such as the FDIC-insured Bank Deposit program. If interest rates remain at low levels, despite the recent moves upward by the Federal Reserve, the Company's profitability will be negatively impacted.
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•
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The Company expects to continue to commit its own capital to engage in proprietary trading, investing and similar activities, and uncertain or unfavorable market or economic conditions may reduce the value of its positions, resulting in reduced revenue.
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•
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trading counterparties;
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•
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customers;
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•
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clearing agents;
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•
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exchanges;
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•
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clearing houses; and
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•
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other financial intermediaries as well as issuers whose securities we hold.
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•
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holding securities of third parties;
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•
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executing securities trades that fail to settle at the required time due to non-delivery by the counterparty or systems failure by clearing agents, exchanges, clearing houses or other financial intermediaries; and
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•
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extending credit to clients through bridge or margin loans or other arrangements.
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•
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employees binding the Company to transactions that exceed authorized limits or present unacceptable risks to the Company (rogue trading);
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•
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employee theft and improper use of Company or client property;
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•
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employees conspiring with third parties to defraud the Company;
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•
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employees hiding unauthorized or unsuccessful activities from the Company, including outside business activities that are undisclosed and may result in liability to the Company;
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•
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employees steering or soliciting their clients into investments which have not been sponsored by the Company and without the proper diligence;
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•
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the improper use of confidential information; or
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•
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employee conduct outside of acceptable norms including harassment.
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•
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remediation costs, such as liability for stolen assets or information, repairs of system damage, and incentives to customers or business partners in an effort to maintain relationships after an attack;
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•
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increased cybersecurity protection costs, which may include the costs of making organizational changes, deploying additional personnel and protection technologies, training employees, and engaging third party experts and consultants;
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•
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lost revenues resulting from the unauthorized use of proprietary information or the failure to retain or attract customers following an attack;
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•
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litigation and legal risks, including regulatory actions by state and federal regulators; and
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•
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loss of reputation
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•
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actual or anticipated variations in quarterly results of operations;
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•
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operating and stock price performance of other companies that investors deem comparable to the Company;
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•
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news reports relating to trends, concerns and other issues in the financial services industry;
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•
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perceptions in the marketplace regarding the Company and/or its competitors;
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•
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new technology used, or services offered, by competitors;
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•
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regulatory issues involving the Company or its competitors;
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•
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significant acquisitions or business combinations, strategic partnerships, joint ventures or capital commitments by or involving the Company or its competitors;
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•
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a downturn in the overall economy or the equity markets in particular;
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•
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failure to effectively integrate acquisitions or realize anticipated benefits from acquisitions; and
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•
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the occurrence of any of the other events described in these Risk Factors.
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NYSE
|
||||||
Class A Stock
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High
|
|
Low
|
|||||
2017
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1
st
Quarter
|
$
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19.60
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|
|
$
|
15.90
|
|
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2
nd
Quarter
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18.25
|
|
|
15.10
|
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||
|
3
rd
Quarter
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17.70
|
|
|
15.40
|
|
||
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4
th
Quarter
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29.00
|
|
|
17.35
|
|
||
2016
|
1
st
Quarter
|
16.98
|
|
|
13.58
|
|
||
|
2
nd
Quarter
|
16.66
|
|
|
13.63
|
|
||
|
3
rd
Quarter
|
16.49
|
|
|
13.74
|
|
||
|
4
th
Quarter
|
19.65
|
|
|
13.65
|
|
|
Number of Shares
|
|
Number of Stockholders of Record
|
||
Class A Stock
|
13,141,103
|
|
|
83
|
|
Class B Stock
|
99,665
|
|
|
40
|
|
Type
|
Declaration Date
|
|
Record Date
|
|
Payment Date
|
|
Amount
Per Share
|
||
Quarterly
|
February 1, 2018
|
|
February 12, 2018
|
|
February 26, 2018
|
|
$
|
0.11
|
|
Quarterly
|
October 27, 2017
|
|
November 10, 2017
|
|
November 24, 2017
|
|
0.11
|
|
|
Quarterly
|
July 28, 2017
|
|
August 11, 2017
|
|
August 25, 2017
|
|
0.11
|
|
|
Quarterly
|
April 28, 2017
|
|
May 12, 2017
|
|
May 26, 2017
|
|
0.11
|
|
|
Quarterly
|
January 27, 2017
|
|
February 10, 2017
|
|
February 24, 2017
|
|
0.11
|
|
|
Quarterly
|
October 28, 2016
|
|
November 11, 2016
|
|
November 25, 2016
|
|
0.11
|
|
|
Quarterly
|
July 29, 2016
|
|
August 12, 2016
|
|
August 26, 2016
|
|
0.11
|
|
|
Quarterly
|
April 29, 2016
|
|
May 13, 2016
|
|
May 27, 2016
|
|
0.11
|
|
|
Quarterly
|
January 29, 2016
|
|
February 12, 2016
|
|
February 26, 2016
|
|
0.11
|
|
As of December 31,
|
2012
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
||||||
Oppenheimer Class A Stock
|
100
|
|
|
146
|
|
|
137
|
|
|
103
|
|
|
110
|
|
|
158
|
|
S&P 500
|
100
|
|
|
130
|
|
|
144
|
|
|
143
|
|
|
157
|
|
|
187
|
|
S&P 500 / Diversified Financials
|
100
|
|
|
139
|
|
|
161
|
|
|
144
|
|
|
171
|
|
|
211
|
|
(1)
|
The Class A Stock and Class B Stock are combined because they are of equal rank for purposes of dividends and in the event of a distribution of assets upon liquidation, dissolution or winding up.
|
Level 1:
|
Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets;
|
Level 2:
|
Inputs other than quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly; and
|
Level 3:
|
Unobservable inputs that are significant to the overall fair value measurement.
|
Expressed in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
2017
|
|
2016
|
|
2015
|
|||||||||||||||
|
Amount
|
|
Percentage
|
|
Amount
|
|
Percentage
|
|
Amount
|
|
Percentage
|
|||||||||
Commissions
|
$
|
336,620
|
|
|
37
|
%
|
|
$
|
377,317
|
|
|
44
|
%
|
|
$
|
417,559
|
|
|
47
|
%
|
Advisory fees
|
320,746
|
|
|
35
|
%
|
|
269,119
|
|
|
31
|
%
|
|
280,247
|
|
|
31
|
%
|
|||
Investment banking
|
78,215
|
|
|
8
|
%
|
|
81,011
|
|
|
10
|
%
|
|
102,540
|
|
|
11
|
%
|
|||
Interest
|
48,498
|
|
|
5
|
%
|
|
47,649
|
|
|
6
|
%
|
|
49,032
|
|
|
5
|
%
|
|||
Principal transactions, net
|
23,273
|
|
|
3
|
%
|
|
20,481
|
|
|
2
|
%
|
|
15,180
|
|
|
2
|
%
|
|||
Other
|
112,986
|
|
|
12
|
%
|
|
62,202
|
|
|
7
|
%
|
|
33,243
|
|
|
4
|
%
|
|||
Total revenue
|
$
|
920,338
|
|
|
100
|
%
|
|
$
|
857,779
|
|
|
100
|
%
|
|
$
|
897,801
|
|
|
100
|
%
|
•
|
Retail commissions were $203.2 million for the year ended December 31, 2017, a decrease of 8.0% from the year ended December 31, 2016.
|
•
|
Advisory fee revenue on traditional and alternative managed products was $232.2 million for the year ended December 31, 2017, an increase of 28.3% from the year ended December 31, 2016. The increase in advisory fees was due to the increase in the value of AUM, a change in the allocation of advisory fees between the Private Client and Asset Management segments, effective January 1, 2017, which resulted in an increase of $22.2 million in revenue, and an increase in incentive fees generated from hedge funds.
|
•
|
Fees earned on client cash deposits in the FDIC-insured bank deposit program were $76.7 million for the year ended December 31, 2017 versus $36.4 million for the year ended December 31, 2016. The increase was due primarily to higher short-term interest rates during the year ended December 31, 2017.
|
•
|
Advisory fee revenue on traditional and alternative managed products was $88.3 million for the year ended December 31, 2017, relatively flat compared with the year ended December 31, 2016 due to the increase in the value of AUM and incentive fees generated from the hedge funds offset by the change in the allocation of advisory fees between the Private Client and Asset Management segments, effective January 1, 2017, which resulted in a decrease of $22.2 million in revenue in the Asset Management segment.
|
•
|
AUM increased 14.1% to
$28.3 billion
at December 31, 2017, compared with
$24.8 billion
at December 31, 2016, which is the basis for advisory fee billings for the first quarter of 2018. The increase in AUM was comprised of asset appreciation of
$2.5 billion
and net contribution of assets of $1.0 billion.
|
(1)
|
Traditional investments include third party advisory programs, Oppenheimer financial adviser managed and advisory programs, and Oppenheimer Asset Management taxable and tax-exempt portfolio management strategies.
|
(2)
|
Institutional fixed income provides solutions to institutional investors including: Taft-Hartley Funds, Public Pension Funds, Corporate Pension Funds, and Foundations and Endowments.
|
(3)
|
Hedge funds represent single manager hedge fund strategies in areas including hedged equity, technology and financial services, and multi-manager and multi-strategy fund of funds.
|
(4)
|
Private equity funds represent private equity fund of funds including portfolios focused on natural resources and related assets.
|
(5)
|
Portfolio enhancement program sells uncovered, far out-of-money puts and calls on the $&P 500 Index. The program is market neutral and uncorrelated to the index.
|
•
|
Institutional equities commissions decreased 11.3% to $95.0 million for the year ended December 31, 2017 compared with the year ended December 31, 2016 due to lower volatility and trading volumes in the equity markets.
|
•
|
Advisory fees earned from investment banking activities decreased 28.0% to $29.5 million for the year ended December 31, 2017 compared with the year ended December 31, 2016 due to a decrease in mergers and acquisitions activity during the year ended December 31, 2017.
|
•
|
Equities underwriting fees increased 98.5% to $27.0 million for the year ended December 31, 2017 compared with the year ended December 31, 2016 due to increased capital raising activity during the year ended December 31, 2017.
|
•
|
Revenue from Taxable Fixed Income decreased 24.9% to $53.1 million for the year ended December 31, 2017 compared with the year ended December 31, 2016 due to low volatility and client activity leading to a reduction in commission and debt capital markets revenues.
|
•
|
Public Finance and Municipal Trading revenue increased 20.3% to $20.7 million for the year ended December 31, 2017 compared with the year ended December 31, 2016.
|
(Expressed in thousands)
|
|
|
|
||||
|
For the Year Ended December 31,
|
||||||
|
2017
|
|
2016
|
||||
Cash used in operating activities
|
$
|
(16,136
|
)
|
|
$
|
(66,865
|
)
|
Cash (used in) provided by investing activities
|
(3,867
|
)
|
|
39,717
|
|
||
Cash provided by financing activities
|
3,244
|
|
|
28,697
|
|
||
Net (decrease) increase in cash and cash equivalents
|
$
|
(16,759
|
)
|
|
$
|
1,549
|
|
(1)
|
Principal amount represents the par value of the ARS and is included in securities owned on the consolidated balance sheet at
December 31, 2017
. The valuation adjustment amount is included as a reduction to securities owned on the consolidated balance sheet at
December 31, 2017
.
|
(2)
|
Principal amount represents the present value of the ARS par value that the Company is committed to purchase at a future date. This principal amount is presented as an off-balance sheet item. The valuation adjustment is included in accounts payable and other liabilities on the consolidated balance sheet at
December 31, 2017
.
|
(3)
|
Specific ARS to be purchased under ARS Purchase Commitments are unknown until the beneficial owner selects the individual ARS to be purchased.
|
(4)
|
Commitments to purchase under settlements with the Regulators at
December 31, 2017
. Eligible Investors for future buybacks under the settlements with the Regulators held approximately
$25.3 million
of ARS as of
December 31, 2017
.
|
(5)
|
Commitments to purchase under various legal settlements and awards with clients through 2020.
|
(Expressed in thousands)
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
Less than 1
Year
|
|
|
|
|
|
More than 5
Years
|
||||||||||
|
Total
|
|
|
1-3 Years
|
|
3-5 Years
|
|
||||||||||||
Operating Lease Obligations
(1)
|
$
|
250,069
|
|
|
$
|
43,727
|
|
|
$
|
69,562
|
|
|
$
|
49,051
|
|
|
$
|
87,729
|
|
Committed Capital
(1)
|
1,400
|
|
|
1,400
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Senior Secured Notes
(2)(3)
|
267,838
|
|
|
19,988
|
|
|
27,000
|
|
|
220,850
|
|
|
—
|
|
|||||
ARS Purchase Commitments
(1)
|
10,992
|
|
|
4,160
|
|
|
6,832
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
530,299
|
|
|
$
|
69,275
|
|
|
$
|
103,394
|
|
|
$
|
269,901
|
|
|
$
|
87,729
|
|
(1)
|
See note 15 to the consolidated financial statements appearing in Item 8 for additional information.
|
(2)
|
See note 10 to the consolidated financial statements appearing in Item 8 for additional information.
|
(3)
|
Includes interest payable of $67.8 million through maturity.
|
(Expressed in thousands)
|
|
|
|
||||
|
VAR at December 31,
|
||||||
|
2017
|
|
2016
|
||||
Equity price risk
|
$
|
554
|
|
|
$
|
410
|
|
Interest rate risk
|
1,112
|
|
|
1,705
|
|
||
Commodity price risk
|
62
|
|
|
90
|
|
||
Diversification benefit
|
(1,226
|
)
|
|
(1,243
|
)
|
||
Total
|
$
|
502
|
|
|
$
|
962
|
|
(Expressed in thousands, except number of shares and per share amounts)
|
2017
|
|
2016
|
||||
ASSETS
|
|
|
|
||||
Cash and cash equivalents
|
$
|
48,154
|
|
|
$
|
64,913
|
|
Deposits with clearing organizations
|
42,222
|
|
|
38,185
|
|
||
Receivable from brokers, dealers and clearing organizations
|
187,115
|
|
|
214,934
|
|
||
Receivable from customers, net of allowance for credit losses of $769 ($794 in 2016)
|
848,226
|
|
|
847,386
|
|
||
Income tax receivable
|
2,939
|
|
|
5,816
|
|
||
Securities purchased under agreements to resell
|
658
|
|
|
24,006
|
|
||
Securities owned, including amounts pledged of $655,683 ($438,385 in 2016), at fair value
|
926,597
|
|
|
707,108
|
|
||
Notes receivable, net of accumulated amortization and allowance for uncollectibles of $24,705 and $7,975, respectively ($24,826 and $6,784, respectively, in 2016)
|
40,520
|
|
|
30,099
|
|
||
Furniture, equipment and leasehold improvements, net of accumulated depreciation of $82,826 ($84,073 in 2016)
|
27,187
|
|
|
27,233
|
|
||
Intangible assets
|
31,700
|
|
|
31,700
|
|
||
Goodwill
|
137,889
|
|
|
137,889
|
|
||
Other assets
|
145,310
|
|
|
107,661
|
|
||
Total assets
|
$
|
2,438,517
|
|
|
$
|
2,236,930
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
||||
Liabilities
|
|
|
|
||||
Drafts payable
|
$
|
42,412
|
|
|
$
|
39,228
|
|
Bank call loans
|
118,300
|
|
|
145,800
|
|
||
Payable to brokers, dealers and clearing organizations
|
211,483
|
|
|
221,389
|
|
||
Payable to customers
|
385,907
|
|
|
449,946
|
|
||
Securities sold under agreements to repurchase
|
586,478
|
|
|
378,084
|
|
||
Securities sold but not yet purchased, at fair value
|
94,486
|
|
|
85,050
|
|
||
Accrued compensation
|
173,116
|
|
|
145,053
|
|
||
Accounts payable and other liabilities
|
92,495
|
|
|
96,557
|
|
||
Senior secured notes, net of debt issuance costs of $1,163 ($648 in 2016)
|
198,837
|
|
|
149,352
|
|
||
Deferred tax liabilities, net of deferred tax assets of $47,597 ($59,062 in 2016)
|
11,092
|
|
|
13,137
|
|
||
Total liabilities
|
1,914,606
|
|
|
1,723,596
|
|
||
Commitments and contingencies (note 15)
|
|
|
|
||||
Stockholders' equity
|
|
|
|
||||
Share capital
|
|
|
|
||||
Class A non-voting common stock, par value $0.001 per share, 50,000,000 shares authorized, 13,139,203 and 13,261,095 shares issued and outstanding as of December 31, 2017 and 2016, respectively
|
58,359
|
|
|
59,228
|
|
||
Class B voting common stock, par value $0.001 per share, 99,665 shares authorized, issued and outstanding
|
133
|
|
|
133
|
|
||
|
58,492
|
|
|
59,361
|
|
||
Contributed capital
|
36,546
|
|
|
41,765
|
|
||
Retained earnings
|
426,930
|
|
|
410,258
|
|
||
Accumulated other comprehensive income (loss)
|
1,582
|
|
|
(681
|
)
|
||
Total Oppenheimer Holdings Inc. stockholders' equity
|
523,550
|
|
|
510,703
|
|
||
Noncontrolling interest
|
361
|
|
|
2,631
|
|
||
Total stockholders' equity
|
523,911
|
|
|
513,334
|
|
||
Total liabilities and stockholders' equity
|
$
|
2,438,517
|
|
|
$
|
2,236,930
|
|
(Expressed in thousands, except number of shares and per share amounts)
|
2017
|
|
2016
|
|
2015
|
||||||
REVENUE
|
|
|
|
|
|
||||||
Commissions
|
$
|
336,620
|
|
|
$
|
377,317
|
|
|
$
|
417,559
|
|
Advisory fees
|
320,746
|
|
|
269,119
|
|
|
280,247
|
|
|||
Investment banking
|
78,215
|
|
|
81,011
|
|
|
102,540
|
|
|||
Interest
|
48,498
|
|
|
47,649
|
|
|
49,032
|
|
|||
Principal transactions, net
|
23,273
|
|
|
20,481
|
|
|
15,180
|
|
|||
Other
|
112,986
|
|
|
62,202
|
|
|
33,243
|
|
|||
Total revenue
|
920,338
|
|
|
857,779
|
|
|
897,801
|
|
|||
EXPENSES
|
|
|
|
|
|
||||||
Compensation and related expenses
|
602,138
|
|
|
584,710
|
|
|
610,820
|
|
|||
Communications and technology
|
71,978
|
|
|
70,390
|
|
|
66,549
|
|
|||
Occupancy and equipment costs
|
61,164
|
|
|
60,791
|
|
|
62,842
|
|
|||
Clearing and exchange fees
|
23,545
|
|
|
25,126
|
|
|
26,022
|
|
|||
Interest
|
28,354
|
|
|
19,437
|
|
|
16,329
|
|
|||
Other
|
113,423
|
|
|
119,217
|
|
|
117,667
|
|
|||
Total expenses
|
900,602
|
|
|
879,671
|
|
|
900,229
|
|
|||
Income (Loss) before income taxes from continuing operations
|
19,736
|
|
|
(21,892
|
)
|
|
(2,428
|
)
|
|||
Income taxes
|
(2,134
|
)
|
|
(12,262
|
)
|
|
406
|
|
|||
Net income (loss) from continuing operations
|
21,870
|
|
|
(9,630
|
)
|
|
(2,834
|
)
|
|||
|
|
|
|
|
|
||||||
Discontinued operations
|
|
|
|
|
|
||||||
Income from discontinued operations
|
2,071
|
|
|
17,339
|
|
|
9,139
|
|
|||
Income taxes
|
941
|
|
|
7,218
|
|
|
3,407
|
|
|||
Net income from discontinued operations
|
1,130
|
|
|
10,121
|
|
|
5,732
|
|
|||
|
|
|
|
|
|
||||||
Net income
|
23,000
|
|
|
491
|
|
|
2,898
|
|
|||
Less net income attributable to noncontrolling interest, net of tax
|
184
|
|
|
1,652
|
|
|
936
|
|
|||
Net income (loss) attributable to Oppenheimer Holdings Inc.
|
$
|
22,816
|
|
|
$
|
(1,161
|
)
|
|
$
|
1,962
|
|
|
|
|
|
|
|
||||||
Basic net income (loss) per share attributable to Oppenheimer Holdings Inc.
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
1.65
|
|
|
$
|
(0.72
|
)
|
|
$
|
(0.21
|
)
|
Discontinued operations
|
0.07
|
|
|
0.63
|
|
|
0.35
|
|
|||
Net income (loss) per share
|
$
|
1.72
|
|
|
$
|
(0.09
|
)
|
|
$
|
0.14
|
|
|
|
|
|
|
|
||||||
Diluted net income (loss) per share attributable to Oppenheimer Holdings Inc.
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
1.60
|
|
|
$
|
(0.72
|
)
|
|
$
|
(0.21
|
)
|
Discontinued operations
|
0.07
|
|
|
0.63
|
|
|
0.35
|
|
|||
Net income (loss) per share
|
$
|
1.67
|
|
|
$
|
(0.09
|
)
|
|
$
|
0.14
|
|
|
|
|
|
|
|
||||||
Dividends declared per share
|
$
|
0.44
|
|
|
$
|
0.44
|
|
|
$
|
0.44
|
|
|
|
|
|
|
|
||||||
Weighted average shares
|
|
|
|
|
|
||||||
Basic
|
13,246,423
|
|
|
13,368,768
|
|
|
13,640,610
|
|
|||
Diluted
|
13,673,361
|
|
|
13,368,768
|
|
|
13,640,610
|
|
(Expressed in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
Net income
|
$
|
23,000
|
|
|
$
|
491
|
|
|
$
|
2,898
|
|
Other comprehensive income, net of tax
(1)
|
|
|
|
|
|
||||||
Currency translation adjustment
|
2,263
|
|
|
220
|
|
|
17
|
|
|||
Comprehensive income
|
25,263
|
|
|
711
|
|
|
2,915
|
|
|||
Net income attributable to noncontrolling interest, net of tax
|
184
|
|
|
1,652
|
|
|
936
|
|
|||
Comprehensive income (loss) attributable to Oppenheimer Holdings Inc.
|
$
|
25,079
|
|
|
$
|
(941
|
)
|
|
$
|
1,979
|
|
(1)
|
No other comprehensive income is attributable to noncontrolling interests.
|
(Expressed in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
Share capital
|
|
|
|
|
|
||||||
Balance at beginning of year
|
$
|
59,361
|
|
|
$
|
57,520
|
|
|
$
|
62,397
|
|
Issuance of Class A non-voting common stock
|
6,595
|
|
|
5,776
|
|
|
3,373
|
|
|||
Repurchase of Class A non-voting common stock for cancellation
|
(7,464
|
)
|
|
(3,935
|
)
|
|
(8,250
|
)
|
|||
Balance at end of year
|
58,492
|
|
|
59,361
|
|
|
57,520
|
|
|||
Contributed capital
|
|
|
|
|
|
||||||
Balance at beginning of year
|
41,765
|
|
|
44,438
|
|
|
45,118
|
|
|||
Tax deficiency from share-based awards
|
—
|
|
|
(740
|
)
|
|
(277
|
)
|
|||
Share-based expense
|
5,583
|
|
|
5,184
|
|
|
4,653
|
|
|||
Vested employee share plan awards
|
(11,227
|
)
|
|
(7,117
|
)
|
|
(5,056
|
)
|
|||
Cumulative-effect adjustment from adoption of new accounting update of employee share-based accounting
|
425
|
|
|
—
|
|
|
—
|
|
|||
Balance at end of year
|
36,546
|
|
|
41,765
|
|
|
44,438
|
|
|||
Retained earnings
|
|
|
|
|
|
||||||
Balance at beginning of year
|
410,258
|
|
|
417,001
|
|
|
421,047
|
|
|||
Net income (loss) attributable to Oppenheimer Holdings Inc.
|
22,816
|
|
|
(1,161
|
)
|
|
1,962
|
|
|||
Dividends paid ($0.44 per share)
|
(5,836
|
)
|
|
(5,887
|
)
|
|
(6,008
|
)
|
|||
Dividends received from noncontrolling interest
|
6
|
|
|
305
|
|
|
—
|
|
|||
Cumulative-effect adjustment from adoption of new accounting update of employee share-based accounting
|
(314
|
)
|
|
—
|
|
|
—
|
|
|||
Balance at end of year
|
426,930
|
|
|
410,258
|
|
|
417,001
|
|
|||
Accumulated other comprehensive income (loss)
|
|
|
|
|
|
||||||
Balance at beginning of year
|
(681
|
)
|
|
(901
|
)
|
|
(918
|
)
|
|||
Currency translation adjustment
|
2,263
|
|
|
220
|
|
|
17
|
|
|||
Balance at end of year
|
1,582
|
|
|
(681
|
)
|
|
(901
|
)
|
|||
Total Oppenheimer Holdings Inc. stockholders' equity
|
523,550
|
|
|
510,703
|
|
|
518,058
|
|
|||
Noncontrolling interest
|
|
|
|
|
|
||||||
Balance at beginning of year
|
2,631
|
|
|
7,024
|
|
|
6,088
|
|
|||
Net income attributable to noncontrolling interest, net of tax
|
184
|
|
|
1,652
|
|
|
936
|
|
|||
Dividends paid to noncontrolling interest
|
(2,448
|
)
|
|
(5,740
|
)
|
|
—
|
|
|||
Dividends paid to parent
|
(6
|
)
|
|
(305
|
)
|
|
—
|
|
|||
Balance at end of year
|
361
|
|
|
2,631
|
|
|
7,024
|
|
|||
Total stockholders' equity
|
$
|
523,911
|
|
|
$
|
513,334
|
|
|
$
|
525,082
|
|
(Expressed in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
Cash flows from operating activities
|
|
|
|
|
|
||||||
Net income for the year
|
$
|
23,000
|
|
|
$
|
491
|
|
|
$
|
2,898
|
|
Adjustments to reconcile net income to net cash used in operating activities
|
|
|
|
|
|
||||||
Non-cash items included in net income:
|
|
|
|
|
|
||||||
Depreciation and amortization of furniture, equipment and leasehold improvements
|
5,657
|
|
|
6,788
|
|
|
7,188
|
|
|||
Deferred income taxes
|
(2,045
|
)
|
|
(2,941
|
)
|
|
4,538
|
|
|||
Amortization of notes receivable
|
11,791
|
|
|
12,960
|
|
|
12,708
|
|
|||
Amortization of debt issuance costs
|
353
|
|
|
484
|
|
|
485
|
|
|||
Write-off of debt issuance costs
|
430
|
|
|
—
|
|
|
—
|
|
|||
Amortization of mortgage servicing rights
|
—
|
|
|
1,286
|
|
|
727
|
|
|||
(Reversal of) provision for credit losses
|
(25
|
)
|
|
(1,751
|
)
|
|
118
|
|
|||
Share-based compensation
|
12,573
|
|
|
6,203
|
|
|
2,860
|
|
|||
Tax deficiency from share-based awards
|
—
|
|
|
(740
|
)
|
|
(277
|
)
|
|||
Gain on sale of assets
|
—
|
|
|
(16,475
|
)
|
|
—
|
|
|||
Decrease (increase) in operating assets:
|
|
|
|
|
|
||||||
Cash and securities segregated for regulatory and other purposes
|
—
|
|
|
—
|
|
|
18,594
|
|
|||
Deposits with clearing organizations
|
(4,037
|
)
|
|
11,305
|
|
|
(12,980
|
)
|
|||
Receivable from brokers, dealers and clearing organizations
|
27,819
|
|
|
145,882
|
|
|
(46,438
|
)
|
|||
Receivable from customers
|
(815
|
)
|
|
(5,280
|
)
|
|
23,716
|
|
|||
Income tax receivable
|
2,877
|
|
|
5,104
|
|
|
(6,697
|
)
|
|||
Securities purchased under agreements to resell
|
23,348
|
|
|
182,493
|
|
|
45,107
|
|
|||
Securities owned
|
(219,489
|
)
|
|
24,725
|
|
|
107,762
|
|
|||
Notes receivable
|
(22,212
|
)
|
|
(10,210
|
)
|
|
(10,625
|
)
|
|||
Loans held for sale
|
—
|
|
|
60,234
|
|
|
(40,991
|
)
|
|||
Mortgage servicing rights
|
—
|
|
|
(1,300
|
)
|
|
1,245
|
|
|||
Other assets
|
(37,130
|
)
|
|
2,368
|
|
|
35
|
|
|||
Increase (decrease) in operating liabilities:
|
|
|
|
|
|
||||||
Drafts payable
|
3,184
|
|
|
(8,783
|
)
|
|
12,638
|
|
|||
Payable to brokers, dealers and clearing organizations
|
(9,906
|
)
|
|
56,843
|
|
|
(92,615
|
)
|
|||
Payable to customers
|
(64,039
|
)
|
|
(144,887
|
)
|
|
(57,423
|
)
|
|||
Securities sold under agreements to repurchase
|
208,394
|
|
|
(273,361
|
)
|
|
(35,995
|
)
|
|||
Securities sold but not yet purchased
|
9,436
|
|
|
(41,443
|
)
|
|
33,983
|
|
|||
Accrued compensation
|
21,184
|
|
|
(6,864
|
)
|
|
(12,443
|
)
|
|||
Accounts payable and other liabilities
|
(6,484
|
)
|
|
(69,996
|
)
|
|
22,469
|
|
|||
Cash used in operating activities
|
(16,136
|
)
|
|
(66,865
|
)
|
|
(19,413
|
)
|
|||
Cash flows from investing activities
|
|
|
|
|
|
||||||
Purchase of furniture, equipment and leasehold improvements
|
(5,611
|
)
|
|
(5,731
|
)
|
|
(5,889
|
)
|
|||
Proceeds from sale of assets
|
—
|
|
|
45,448
|
|
|
—
|
|
|||
Proceeds from the settlement of Company-owned life insurance
|
1,744
|
|
|
—
|
|
|
—
|
|
|||
Cash (used in) provided by investing activities
|
(3,867
|
)
|
|
39,717
|
|
|
(5,889
|
)
|
|||
Cash flows from financing activities
|
|
|
|
|
|
||||||
Cash dividends paid on Class A non-voting and Class B voting common stock
|
(5,836
|
)
|
|
(5,887
|
)
|
|
(6,008
|
)
|
|||
Cash dividends paid to noncontrolling interest
|
(2,448
|
)
|
|
(5,740
|
)
|
|
—
|
|
|||
Issuance of Class A non-voting common stock
|
26
|
|
|
—
|
|
|
—
|
|
|||
Repurchase of Class A non-voting common stock for cancellation
|
(7,464
|
)
|
|
(3,935
|
)
|
|
(8,250
|
)
|
|||
Payments for employee taxes withheld related to vested share-based awards
|
(2,237
|
)
|
|
(1,341
|
)
|
|
(1,683
|
)
|
|||
Issuance of senior secured notes
|
200,000
|
|
|
—
|
|
|
—
|
|
|||
Redemption of senior secured notes
|
(150,000
|
)
|
|
—
|
|
|
—
|
|
|||
Debt issuance costs
|
(1,297
|
)
|
|
—
|
|
|
—
|
|
|||
(Decrease) increase in bank call loans, net
|
(27,500
|
)
|
|
45,600
|
|
|
40,800
|
|
|||
Cash provided by financing activities
|
3,244
|
|
|
28,697
|
|
|
24,859
|
|
|||
Net (decrease) increase in cash and cash equivalents
|
(16,759
|
)
|
|
1,549
|
|
|
(443
|
)
|
|||
Cash and cash equivalents, beginning of year
|
64,913
|
|
|
63,364
|
|
|
63,807
|
|
|||
Cash and cash equivalents, end of year
|
$
|
48,154
|
|
|
$
|
64,913
|
|
|
$
|
63,364
|
|
Schedule of non-cash financing activities
|
|
|
|
|
|
||||||
Employee share plan issuance
|
$
|
6,569
|
|
|
$
|
5,776
|
|
|
$
|
3,373
|
|
Supplemental disclosure of cash flow information
|
|
|
|
|
|
||||||
Cash paid during the year for interest
|
$
|
23,899
|
|
|
$
|
19,705
|
|
|
$
|
17,273
|
|
Cash (received) paid during the year for income taxes, net
|
$
|
(2,378
|
)
|
|
$
|
(5,009
|
)
|
|
$
|
6,088
|
|
OPPENHEIMER HOLDINGS INC.
Notes to Consolidated Financial Statements
|
Level 1:
|
Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets;
|
Level 2:
|
Inputs other than quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly; and
|
Level 3:
|
Unobservable inputs that are significant to the overall fair value measurement.
|
OPPENHEIMER HOLDINGS INC.
Notes to Consolidated Financial Statements
|
OPPENHEIMER HOLDINGS INC.
Notes to Consolidated Financial Statements
|
OPPENHEIMER HOLDINGS INC.
Notes to Consolidated Financial Statements
|
OPPENHEIMER HOLDINGS INC.
Notes to Consolidated Financial Statements
|
OPPENHEIMER HOLDINGS INC.
Notes to Consolidated Financial Statements
|
OPPENHEIMER HOLDINGS INC.
Notes to Consolidated Financial Statements
|
OPPENHEIMER HOLDINGS INC.
Notes to Consolidated Financial Statements
|
(1)
|
Other revenue for the year ended
December 31, 2017
was primarily due to an earn-out from the sale of OMHHF's pipeline business in 2016.
|
(Expressed in thousands)
|
|
|
|
|
|
||||||
|
For the Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Cash provided by (used in) operating activities
|
$
|
5,721
|
|
|
$
|
(14,097
|
)
|
|
$
|
3,322
|
|
Cash provided by investing activities
|
—
|
|
|
45,448
|
|
|
—
|
|
|||
Cash used in financing activities
(1) (2)
|
(20,035
|
)
|
|
(35,421
|
)
|
|
(249
|
)
|
|||
Net (decrease) increase in cash and cash equivalents
|
$
|
(14,314
|
)
|
|
$
|
(4,070
|
)
|
|
$
|
3,073
|
|
(1)
|
Includes cash dividends paid to OMHHF's parent (E.A. Viner International Co.) and noncontrolling interest of
$12.6 million
and
$2.4 million
, respectively, for the year ended
December 31, 2017
(
$29.4 million
and
$5.7 million
, respectively, for the year ended
December 31, 2016
.)
|
(2)
|
Includes
$5.0 million
paid to OMHHF's parent due to redemption of the parent's outstanding preferred stock for the year ended December 31, 2017.
|
OPPENHEIMER HOLDINGS INC.
Notes to Consolidated Financial Statements
|
OPPENHEIMER HOLDINGS INC.
Notes to Consolidated Financial Statements
|
OPPENHEIMER HOLDINGS INC.
Notes to Consolidated Financial Statements
|
(1)
|
Principal amount represents the par value of the ARS and is included in securities owned on the consolidated balance sheet as of
December 31, 2017
. The valuation adjustment amount is included as a reduction to securities owned on the consolidated balance sheet as of
December 31, 2017
.
|
(2)
|
Derived by applying a multiple to the spread between
110%
to
150%
to the U.S. Treasury rate of
2.09%
.
|
(3)
|
Based on current yields for ARS positions owned.
|
(4)
|
Derived by applying a multiple to the spread of
175%
to the U.S. Treasury rate of
2.15%
.
|
(5)
|
Derived by applying the sum of the spread of
1.20%
to the U.S. Treasury rate of
2.33%
.
|
(6)
|
Principal amount represents the present value of the ARS par value that the Company is committed to purchase at a future date. This principal amount is presented as an off-balance sheet item. The valuation adjustment amount is included in accounts payable and other liabilities on the consolidated balance sheet as of
December 31, 2017
.
|
(7)
|
ARS issuer announced redemption at par to take place during the first quarter of 2018. Included in Level 2 of the fair value hierarchy.
|
(8)
|
ARS issuer announced tender offer at
95%
of par. Included in Level 2 of the fair value hierarchy.
|
OPPENHEIMER HOLDINGS INC.
Notes to Consolidated Financial Statements
|
•
|
The impact of a
25
basis point increase in the discount rate at
December 31, 2017
would result in a decrease in the fair value of
$430,000
(does not consider a corresponding reduction in duration as discussed above).
|
•
|
The impact of a
50
basis point increase in the discount rate at
December 31, 2017
would result in a decrease in the fair value of
$856,000
(does not consider a corresponding reduction in duration as discussed above).
|
(1)
|
Includes investments in hedge funds and hedge fund of funds that pursue long/short, event-driven, and activist strategies. Each hedge fund has various restrictions regarding redemption; no investment is locked-up for a period greater than one year.
|
(2)
|
Includes private equity funds and private equity fund of funds with a focus on diversified portfolios, real estate and global natural resources. Due to the illiquid nature of these funds, investors are not permitted to make withdrawals without the consent of the general partner. The lock-up period of the private equity funds can extend to
10
years.
|
OPPENHEIMER HOLDINGS INC.
Notes to Consolidated Financial Statements
|
(Expressed in thousands)
|
|
|
|
|
|
|
|
||||||||
|
Fair Value Measurements as of December 31, 2017
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
$
|
10,490
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10,490
|
|
Deposits with clearing organizations
|
34,293
|
|
|
—
|
|
|
—
|
|
|
34,293
|
|
||||
Securities owned:
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities
|
640,337
|
|
|
—
|
|
|
—
|
|
|
640,337
|
|
||||
U.S. Agency securities
|
3,011
|
|
|
6,894
|
|
|
—
|
|
|
9,905
|
|
||||
Sovereign obligations
|
—
|
|
|
608
|
|
|
—
|
|
|
608
|
|
||||
Corporate debt and other obligations
|
—
|
|
|
12,538
|
|
|
—
|
|
|
12,538
|
|
||||
Mortgage and other asset-backed securities
|
—
|
|
|
4,037
|
|
|
—
|
|
|
4,037
|
|
||||
Municipal obligations
|
—
|
|
|
89,618
|
|
|
35
|
|
|
89,653
|
|
||||
Convertible bonds
|
—
|
|
|
23,216
|
|
|
—
|
|
|
23,216
|
|
||||
Corporate equities
|
34,067
|
|
|
—
|
|
|
—
|
|
|
34,067
|
|
||||
Money markets
|
383
|
|
|
—
|
|
|
—
|
|
|
383
|
|
||||
Auction rate securities
|
—
|
|
|
24,455
|
|
|
87,398
|
|
|
111,853
|
|
||||
Securities owned, at fair value
|
677,798
|
|
|
161,366
|
|
|
87,433
|
|
|
926,597
|
|
||||
Investments
(1)
|
—
|
|
|
—
|
|
|
169
|
|
|
169
|
|
||||
Derivative contracts:
|
|
|
|
|
|
|
|
||||||||
TBAs
|
—
|
|
|
716
|
|
|
—
|
|
|
716
|
|
||||
Total
|
$
|
722,581
|
|
|
$
|
162,082
|
|
|
$
|
87,602
|
|
|
$
|
972,265
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Securities sold but not yet purchased:
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities
|
$
|
53,425
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
53,425
|
|
U.S. Agency securities
|
—
|
|
|
13
|
|
|
—
|
|
|
13
|
|
||||
Sovereign obligations
|
—
|
|
|
1,179
|
|
|
—
|
|
|
1,179
|
|
||||
Corporate debt and other obligations
|
—
|
|
|
4,357
|
|
|
—
|
|
|
4,357
|
|
||||
Mortgage and other asset-backed securities
|
—
|
|
|
10
|
|
|
—
|
|
|
10
|
|
||||
Convertible bonds
|
—
|
|
|
10,109
|
|
|
—
|
|
|
10,109
|
|
||||
Corporate equities
|
25,393
|
|
|
—
|
|
|
—
|
|
|
25,393
|
|
||||
Securities sold but not yet purchased, at fair value
|
78,818
|
|
|
15,668
|
|
|
—
|
|
|
94,486
|
|
||||
Derivative contracts:
|
|
|
|
|
|
|
|
||||||||
Futures
|
766
|
|
|
—
|
|
|
—
|
|
|
766
|
|
||||
TBAs
|
—
|
|
|
614
|
|
|
—
|
|
|
614
|
|
||||
ARS purchase commitments
|
—
|
|
|
—
|
|
|
8
|
|
|
8
|
|
||||
Derivative contracts, total
|
766
|
|
|
614
|
|
|
8
|
|
|
1,388
|
|
||||
Total
|
$
|
79,584
|
|
|
$
|
16,282
|
|
|
$
|
8
|
|
|
$
|
95,874
|
|
(Expressed in thousands)
|
|
|
|
|
|
|
|
||||||||
|
Fair Value Measurements as of December 31, 2016
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
$
|
16,242
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
16,242
|
|
Deposits with clearing organizations
|
26,437
|
|
|
—
|
|
|
—
|
|
|
26,437
|
|
||||
Securities owned:
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities
(1)
|
418,888
|
|
|
—
|
|
|
—
|
|
|
418,888
|
|
||||
U.S. Agency securities
|
5,878
|
|
|
32,391
|
|
|
—
|
|
|
38,269
|
|
||||
Sovereign obligations
|
—
|
|
|
1,894
|
|
|
—
|
|
|
1,894
|
|
||||
Corporate debt and other obligations
|
—
|
|
|
17,074
|
|
|
—
|
|
|
17,074
|
|
||||
Mortgage and other asset-backed securities
|
—
|
|
|
5,024
|
|
|
—
|
|
|
5,024
|
|
||||
Municipal obligations
|
—
|
|
|
56,706
|
|
|
44
|
|
|
56,750
|
|
||||
Convertible bonds
|
—
|
|
|
56,480
|
|
|
—
|
|
|
56,480
|
|
||||
Corporate equities
|
31,174
|
|
|
—
|
|
|
—
|
|
|
31,174
|
|
||||
Money markets
|
189
|
|
|
—
|
|
|
—
|
|
|
189
|
|
||||
Auction rate securities
|
—
|
|
|
—
|
|
|
84,926
|
|
|
84,926
|
|
||||
Securities owned, at fair value
|
456,129
|
|
|
169,569
|
|
|
84,970
|
|
|
710,668
|
|
||||
Investments
(2)
|
—
|
|
|
—
|
|
|
158
|
|
|
158
|
|
||||
Securities purchased under agreements to resell
(3)
|
—
|
|
|
24,006
|
|
|
—
|
|
|
24,006
|
|
||||
Derivative contracts:
|
|
|
|
|
|
|
|
|
|
|
|
||||
TBAs
|
—
|
|
|
814
|
|
|
—
|
|
|
814
|
|
||||
ARS purchase commitments
|
—
|
|
|
—
|
|
|
849
|
|
|
849
|
|
||||
Derivative contracts, total
|
—
|
|
|
814
|
|
|
849
|
|
|
1,663
|
|
||||
Total
|
$
|
498,808
|
|
|
$
|
194,389
|
|
|
$
|
85,977
|
|
|
$
|
779,174
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Securities sold but not yet purchased:
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities
|
$
|
28,662
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
28,662
|
|
U.S. Agency securities
|
—
|
|
|
12
|
|
|
—
|
|
|
12
|
|
||||
Corporate debt and other obligations
|
—
|
|
|
2,536
|
|
|
—
|
|
|
2,536
|
|
||||
Mortgage and other asset-backed securities
|
—
|
|
|
31
|
|
|
—
|
|
|
31
|
|
||||
Municipal obligations
|
—
|
|
|
516
|
|
|
—
|
|
|
516
|
|
||||
Convertible bonds
|
—
|
|
|
11,604
|
|
|
—
|
|
|
11,604
|
|
||||
Corporate equities
|
41,689
|
|
|
—
|
|
|
—
|
|
|
41,689
|
|
||||
Securities sold but not yet purchased, at fair value
|
70,351
|
|
|
14,699
|
|
|
—
|
|
|
85,050
|
|
||||
Derivative contracts:
|
|
|
|
|
|
|
|
||||||||
Futures
|
166
|
|
|
—
|
|
|
—
|
|
|
166
|
|
||||
Foreign exchange forward contracts
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
TBAs
|
—
|
|
|
1,212
|
|
|
—
|
|
|
1,212
|
|
||||
ARS purchase commitments
|
—
|
|
|
—
|
|
|
645
|
|
|
645
|
|
||||
Derivative contracts, total
|
167
|
|
|
1,212
|
|
|
645
|
|
|
2,024
|
|
||||
Total
|
$
|
70,518
|
|
|
$
|
15,911
|
|
|
$
|
645
|
|
|
$
|
87,074
|
|
(1)
|
$3.6 million
is included in other assets on the consolidated balance sheet.
|
(2)
|
Included in other assets on the consolidated balance sheet.
|
(3)
|
Included in securities purchased under agreements to resell on the consolidated balance sheet where the Company has elected fair value option treatment.
|
OPPENHEIMER HOLDINGS INC.
Notes to Consolidated Financial Statements
|
(1)
|
Represents auction rate preferred securities, municipal auction rate securities and student loan auction rate securities that failed in the auction rate market.
|
(2)
|
Represents the difference in principal and fair value for auction rate securities purchase commitments outstanding at the end of the period.
|
(3)
|
Included in principal transactions in the consolidated statement of operations, except for gains from investments which are included in other income in the consolidated statement of operations.
|
(4)
|
Unrealized gains (losses) are attributable to assets or liabilities that are still held at the reporting date.
|
(Expressed in thousands)
|
|||||||||||||||||||||||
|
Level 3 Assets and Liabilities
|
||||||||||||||||||||||
|
For the Year Ended December 31, 2016
|
||||||||||||||||||||||
|
Beginning
Balance
|
|
Total Realized
and Unrealized
Gains
(4)(5)
|
|
Purchases
and Issuances
|
|
Sales and Settlements
|
|
Transfers
In (Out)
|
|
Ending
Balance
|
||||||||||||
|
|
|
|
|
|
||||||||||||||||||
|
|
|
|
|
|
||||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Municipal obligations
|
$
|
81
|
|
|
$
|
25
|
|
|
$
|
—
|
|
|
$
|
(62
|
)
|
|
$
|
—
|
|
|
$
|
44
|
|
Auction rate securities
(1)(6)(7)
|
86,802
|
|
|
1,974
|
|
|
13,775
|
|
|
(17,625
|
)
|
|
—
|
|
|
84,926
|
|
||||||
Interest rate lock commitments
(2)
|
9,161
|
|
|
4,345
|
|
|
—
|
|
|
(13,506
|
)
|
|
—
|
|
|
—
|
|
||||||
Investments
|
157
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
158
|
|
||||||
ARS purchase commitments
(3)
|
—
|
|
|
849
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
849
|
|
||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate lock commitments
(2)
|
923
|
|
|
923
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
ARS purchase commitments
(3)
|
1,369
|
|
|
724
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
645
|
|
(1)
|
Represents auction rate preferred securities, municipal auction rate securities and student loan auction rate securities that failed in the auction rate market.
|
(2)
|
Interest rate lock commitment assets and liabilities are recorded upon the commitment to originate a loan with a borrower and sell the loan to an investor. The commitment assets and liabilities are recognized at fair value, which reflects the fair value of the contractual loan origination-related fees and sale premiums, net of co-broker fees, and the estimated fair value of the expected net future cash flows associated with the servicing of the loan.
|
(3)
|
Represents the difference in principal and fair value for auction rate securities purchase commitments outstanding at the end of the period.
|
(4)
|
Included in principal transactions in the consolidated statement of operations, except for gains from investments which are included in other income in the consolidated statement of operations.
|
(5)
|
Unrealized gains are attributable to assets or liabilities that are still held at the reporting date.
|
(6)
|
Purchases and issuances in connection with ARS purchase commitments represent instances in which the Company purchased ARS securities from clients during the period pursuant to regulatory and legal settlements and awards that satisfy the outstanding commitment to purchase obligation. This also includes instances where the ARS issuer has redeemed ARS where the Company had an outstanding purchase commitment prior to the Company purchasing those ARS.
|
(7)
|
Sales and settlements for the ARS purchase commitments represent additional purchase commitments made during the period for regulatory and legal ARS settlements and awards.
|
OPPENHEIMER HOLDINGS INC.
Notes to Consolidated Financial Statements
|
(Expressed in thousands)
|
|
|
Fair Value Measurement: Assets
|
||||||||||||||||
|
Carrying Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||
Cash
|
$
|
37,664
|
|
|
$
|
37,664
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
37,664
|
|
Cash segregated for regulatory and other purposes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Deposits with clearing organization
|
7,929
|
|
|
7,929
|
|
|
—
|
|
|
—
|
|
|
7,929
|
|
|||||
Receivable from brokers, dealers and clearing organizations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Securities borrowed
|
132,368
|
|
|
—
|
|
|
132,368
|
|
|
—
|
|
|
132,368
|
|
|||||
Receivables from brokers
|
19,298
|
|
|
—
|
|
|
19,298
|
|
|
—
|
|
|
19,298
|
|
|||||
Securities failed to deliver
|
9,442
|
|
|
—
|
|
|
9,442
|
|
|
—
|
|
|
9,442
|
|
|||||
Clearing organizations
|
24,361
|
|
|
—
|
|
|
24,361
|
|
|
—
|
|
|
24,361
|
|
|||||
Other
|
930
|
|
|
—
|
|
|
930
|
|
|
—
|
|
|
930
|
|
|||||
|
186,399
|
|
|
—
|
|
|
186,399
|
|
|
—
|
|
|
186,399
|
|
|||||
Receivable from customers
|
848,226
|
|
|
—
|
|
|
848,226
|
|
|
—
|
|
|
848,226
|
|
|||||
Securities purchased under agreements to resell
|
658
|
|
|
|
|
|
658
|
|
|
—
|
|
|
658
|
|
|||||
Notes receivable, net
|
40,520
|
|
|
|
|
|
40,520
|
|
|
—
|
|
|
40,520
|
|
|||||
Investments
(1)
|
65,404
|
|
|
—
|
|
|
65,404
|
|
|
—
|
|
|
65,404
|
|
(1)
|
Included in other assets on the consolidated balance sheet.
|
(Expressed in thousands)
|
|
|
Fair Value Measurement: Liabilities
|
||||||||||||||||
|
Carrying Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||
Drafts payable
|
$
|
42,412
|
|
|
$
|
42,412
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
42,412
|
|
Bank call loans
|
118,300
|
|
|
—
|
|
|
118,300
|
|
|
—
|
|
|
118,300
|
|
|||||
Payables to brokers, dealers and clearing organizations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Securities loaned
|
180,270
|
|
|
—
|
|
|
180,270
|
|
|
—
|
|
|
180,270
|
|
|||||
Payable to brokers
|
1,567
|
|
|
—
|
|
|
1,567
|
|
|
—
|
|
|
1,567
|
|
|||||
Securities failed to receive
|
17,559
|
|
|
—
|
|
|
17,559
|
|
|
—
|
|
|
17,559
|
|
|||||
Other
|
10,707
|
|
|
—
|
|
|
10,707
|
|
|
—
|
|
|
10,707
|
|
|||||
|
210,103
|
|
|
—
|
|
|
210,103
|
|
|
—
|
|
|
210,103
|
|
|||||
Payables to customers
|
385,907
|
|
|
—
|
|
|
385,907
|
|
|
—
|
|
|
385,907
|
|
|||||
Securities sold under agreements to repurchase
|
586,478
|
|
|
—
|
|
|
586,478
|
|
|
—
|
|
|
586,478
|
|
|||||
Senior secured notes
|
200,000
|
|
|
—
|
|
|
206,380
|
|
|
—
|
|
|
206,380
|
|
(Expressed in thousands)
|
|
|
Fair Value Measurement: Assets
|
||||||||||||||||
|
Carrying Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||
Cash
|
$
|
48,671
|
|
|
$
|
48,671
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
48,671
|
|
Deposits with clearing organization
|
11,748
|
|
|
11,748
|
|
|
—
|
|
|
—
|
|
|
11,748
|
|
|||||
Receivable from brokers, dealers and clearing organizations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Securities borrowed
|
154,090
|
|
|
—
|
|
|
154,090
|
|
|
—
|
|
|
154,090
|
|
|||||
Receivables from brokers
|
25,768
|
|
|
—
|
|
|
25,768
|
|
|
—
|
|
|
25,768
|
|
|||||
Securities failed to deliver
|
6,172
|
|
|
—
|
|
|
6,172
|
|
|
—
|
|
|
6,172
|
|
|||||
Clearing organizations
|
26,081
|
|
|
—
|
|
|
26,081
|
|
|
—
|
|
|
26,081
|
|
|||||
Other
|
2,823
|
|
|
—
|
|
|
2,823
|
|
|
—
|
|
|
2,823
|
|
|||||
|
214,934
|
|
|
—
|
|
|
214,934
|
|
|
—
|
|
|
214,934
|
|
|||||
Receivable from customers
|
847,386
|
|
|
—
|
|
|
847,386
|
|
|
—
|
|
|
847,386
|
|
|||||
Notes receivable, net
|
30,099
|
|
|
|
|
30,099
|
|
|
|
|
30,099
|
|
|||||||
Investments
(1)
|
56,300
|
|
|
—
|
|
|
56,300
|
|
|
—
|
|
|
56,300
|
|
(1)
|
Included in other assets on the consolidated balance sheet.
|
(Expressed in thousands)
|
|
|
Fair Value Measurement: Liabilities
|
||||||||||||||||
|
Carrying Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||
Drafts payable
|
$
|
39,228
|
|
|
$
|
39,228
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
39,228
|
|
Bank call loans
|
145,800
|
|
|
—
|
|
|
145,800
|
|
|
—
|
|
|
145,800
|
|
|||||
Payables to brokers, dealers and clearing organizations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Securities loaned
|
179,875
|
|
|
—
|
|
|
179,875
|
|
|
—
|
|
|
179,875
|
|
|||||
Payable to brokers
|
610
|
|
|
—
|
|
|
610
|
|
|
—
|
|
|
610
|
|
|||||
Securities failed to receive
|
11,523
|
|
|
—
|
|
|
11,523
|
|
|
—
|
|
|
11,523
|
|
|||||
Other
|
29,381
|
|
|
—
|
|
|
29,381
|
|
|
—
|
|
|
29,381
|
|
|||||
|
221,389
|
|
|
—
|
|
|
221,389
|
|
|
—
|
|
|
221,389
|
|
|||||
Payables to customers
|
449,946
|
|
|
—
|
|
|
449,946
|
|
|
—
|
|
|
449,946
|
|
|||||
Securities sold under agreements to repurchase
|
378,084
|
|
|
—
|
|
|
378,084
|
|
|
—
|
|
|
378,084
|
|
|||||
Senior secured notes
|
150,000
|
|
|
—
|
|
|
151,782
|
|
|
—
|
|
|
151,782
|
|
OPPENHEIMER HOLDINGS INC.
Notes to Consolidated Financial Statements
|
(1)
|
See "Derivative Instruments and Hedging Activities" above for a description of derivative financial instruments.
|
(2)
|
Represents TBA purchase and sale contracts related to the legacy OMHHF business.
|
(Expressed in thousands)
|
|
|
|
|
|
||||
|
Fair Value of Derivative Instruments as of December 31, 2016
|
||||||||
|
Description
|
|
Notional
|
|
Fair Value
|
||||
Assets:
|
|
|
|
|
|
||||
Derivatives not designated as hedging instruments
(1)
|
|
|
|
|
|
||||
Other contracts
|
TBAs
|
|
$
|
169,500
|
|
|
$
|
332
|
|
|
Other TBAs
(2)
|
|
121,573
|
|
|
482
|
|
||
|
ARS purchase commitments
|
|
6,654
|
|
|
849
|
|
||
|
|
|
$
|
297,727
|
|
|
$
|
1,663
|
|
Liabilities:
|
|
|
|
|
|
||||
Derivatives not designated as hedging instruments
(1)
|
|
|
|
|
|
||||
Commodity contracts
|
Futures
|
|
$
|
4,059,000
|
|
|
$
|
166
|
|
Other contracts
|
Foreign exchange forward contracts
|
|
200
|
|
|
1
|
|
||
|
TBAs
|
|
169,500
|
|
|
289
|
|
||
|
Other TBAs
(2)
|
|
121,573
|
|
|
923
|
|
||
|
Forward start repurchase agreements
|
|
382,000
|
|
|
—
|
|
||
|
ARS purchase commitments
|
|
24,358
|
|
|
645
|
|
||
|
|
|
$
|
4,756,631
|
|
|
$
|
2,024
|
|
(1)
|
See "Derivative Instruments and Hedging Activities" above for a description of derivative financial instruments.
|
(2)
|
Represents TBA purchase and sale contracts related to the legacy OMHHF business.
|
(Expressed in thousands)
|
|
|
|
|
|
||
|
The Effect of Derivative Instruments in the Statement of Operations
|
||||||
|
For the Year Ended December 31, 2017
|
||||||
|
|
|
Recognized in Income on Derivatives
(pre-tax)
|
||||
Types
|
Description
|
|
Location
|
|
Net Gain (Loss)
|
||
Commodity contracts
|
Futures
|
|
Principal transactions revenue
|
|
$
|
987
|
|
Other contracts
|
Foreign exchange forward contracts
|
|
Other revenue
|
|
12
|
|
|
|
TBAs
|
|
Principal transactions revenue
|
|
(167
|
)
|
|
|
Other TBAs
|
|
Other revenue
|
|
(338
|
)
|
|
|
ARS purchase commitments
|
|
Principal transactions revenue
|
|
(212
|
)
|
|
|
|
|
|
|
$
|
282
|
|
|
|
|
|
|
|
||
(Expressed in thousands)
|
|
|
|
|
|
||
|
The Effect of Derivative Instruments in the Statement of Operations
|
||||||
|
For the Year Ended December 31, 2016
|
||||||
|
|
|
Recognized in Income on Derivatives
(pre-tax)
|
||||
Types
|
Description
|
|
Location
|
|
Net Gain (Loss)
|
||
Commodity contracts
|
Futures
|
|
Principal transactions revenue
|
|
$
|
(702
|
)
|
Other contracts
|
Foreign exchange forward contracts
|
|
Other revenue
|
|
13
|
|
|
|
TBAs
|
|
Principal transactions revenue
|
|
43
|
|
|
|
Other TBAs
|
|
Other revenue
|
|
(7,726
|
)
|
|
|
Interest rate lock commitments
|
|
Other revenue
|
|
5,268
|
|
|
|
ARS purchase commitments
|
|
Principal transactions revenue
|
|
1,573
|
|
|
|
|
|
|
|
$
|
(1,531
|
)
|
OPPENHEIMER HOLDINGS INC.
Notes to Consolidated Financial Statements
|
As of December 31, 2017
|
|||||||||||||||||||||||
(Expressed in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
Gross Amounts Not Offset
on the Balance Sheet
|
|
|
||||||||||||||
|
Gross
Amounts of
Recognized
Assets
|
|
Gross
Amounts
Offset on the
Balance Sheet
|
|
Net Amounts
of Assets
Presented on
the Balance
Sheet
|
|
Financial
Instruments
|
|
Cash
Collateral
Received
|
|
Net Amount
|
||||||||||||
Reverse repurchase agreements
|
$
|
200,712
|
|
|
$
|
(200,054
|
)
|
|
$
|
658
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
658
|
|
Securities borrowed
(1)
|
132,368
|
|
|
—
|
|
|
132,368
|
|
|
(128,575
|
)
|
|
—
|
|
|
3,793
|
|
||||||
Total
|
$
|
333,080
|
|
|
$
|
(200,054
|
)
|
|
$
|
133,026
|
|
|
$
|
(128,575
|
)
|
|
$
|
—
|
|
|
$
|
4,451
|
|
(1)
|
Included in receivable from brokers, dealers and clearing organizations on the consolidated balance sheet.
|
|
|
|
|
|
|
|
Gross Amounts Not Offset
on the Balance Sheet
|
|
|
||||||||||||||
|
Gross
Amounts of
Recognized
Liabilities
|
|
Gross
Amounts
Offset on the Balance Sheet
|
|
Net Amounts
of Liabilities
Presented on
the Balance
Sheet
|
|
Financial
Instruments
|
|
Cash
Collateral
Pledged
|
|
Net Amount
|
||||||||||||
Repurchase agreements
|
$
|
786,532
|
|
|
$
|
(200,054
|
)
|
|
$
|
586,478
|
|
|
$
|
(585,289
|
)
|
|
$
|
—
|
|
|
$
|
1,189
|
|
Securities loaned
(2)
|
180,270
|
|
|
—
|
|
|
180,270
|
|
|
(170,176
|
)
|
|
—
|
|
|
10,094
|
|
||||||
Total
|
$
|
966,802
|
|
|
$
|
(200,054
|
)
|
|
$
|
766,748
|
|
|
$
|
(755,465
|
)
|
|
$
|
—
|
|
|
$
|
11,283
|
|
(2)
|
Included in payable to brokers, dealers and clearing organizations on the consolidated balance sheet.
|
As of December 31, 2016
|
|||||||||||||||||||||||
(Expressed in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
Gross Amounts Not Offset
on the Balance Sheet |
|
|
||||||||||||||
|
Gross
Amounts of Recognized Assets |
|
Gross
Amounts Offset on the Balance Sheet |
|
Net Amounts
of Assets Presented on the Balance Sheet |
|
Financial
Instruments |
|
Cash
Collateral Received |
|
Net Amount
|
||||||||||||
Reverse repurchase agreements
|
$
|
24,006
|
|
|
$
|
—
|
|
|
$
|
24,006
|
|
|
$
|
(23,972
|
)
|
|
$
|
—
|
|
|
$
|
34
|
|
Securities borrowed
(1)
|
154,090
|
|
|
—
|
|
|
154,090
|
|
|
(150,510
|
)
|
|
—
|
|
|
3,580
|
|
||||||
Total
|
$
|
178,096
|
|
|
$
|
—
|
|
|
$
|
178,096
|
|
|
$
|
(174,482
|
)
|
|
$
|
—
|
|
|
$
|
3,614
|
|
(1)
|
Included in receivable from brokers, dealers and clearing organizations on the consolidated balance sheet.
|
|
|
|
|
|
|
|
Gross Amounts Not Offset
on the Balance Sheet
|
|
|
||||||||||||||
|
Gross
Amounts of
Recognized
Liabilities
|
|
Gross
Amounts
Offset on the Balance Sheet
|
|
Net Amounts
of Liabilities
Presented on
the Balance
Sheet
|
|
Financial
Instruments
|
|
Cash
Collateral
Pledged
|
|
Net Amount
|
||||||||||||
Repurchase agreements
|
$
|
378,084
|
|
|
$
|
—
|
|
|
$
|
378,084
|
|
|
$
|
(376,273
|
)
|
|
$
|
—
|
|
|
$
|
1,811
|
|
Securities loaned
(2)
|
179,875
|
|
|
—
|
|
|
179,875
|
|
|
(171,991
|
)
|
|
—
|
|
|
7,884
|
|
||||||
Total
|
$
|
557,959
|
|
|
$
|
—
|
|
|
$
|
557,959
|
|
|
$
|
(548,264
|
)
|
|
$
|
—
|
|
|
$
|
9,695
|
|
(2)
|
Included in payable to brokers, dealers and clearing organizations on the consolidated balance sheet.
|
OPPENHEIMER HOLDINGS INC.
Notes to Consolidated Financial Statements
|
OPPENHEIMER HOLDINGS INC.
Notes to Consolidated Financial Statements
|
(1)
|
Represents the total assets of the VIEs and does not represent the Company's interests in the VIEs.
|
(2)
|
Represents the Company's interests in the VIEs and is included in other assets on the consolidated balance sheet.
|
(Expressed in thousands)
|
|
|
|
|
|
|
|
|
|
||||||||||
|
As of December 31, 2016
|
||||||||||||||||||
|
Total
VIE Assets (1) |
|
Carrying Value of the
Company's Variable Interest |
|
Capital
Commitments |
|
Maximum
Exposure to Loss in Non-consolidated VIEs |
||||||||||||
|
Assets
(2)
|
|
Liabilities
|
|
|||||||||||||||
Hedge funds
|
$
|
296,807
|
|
|
$
|
706
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
706
|
|
Private equity funds
|
26,300
|
|
|
15
|
|
|
—
|
|
|
2
|
|
|
17
|
|
|||||
Total
|
$
|
323,107
|
|
|
$
|
721
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
723
|
|
(1)
|
Represents the total assets of the VIEs and does not represent the Company's interests in the VIEs.
|
(2)
|
Represents the Company's interests in the VIEs and is included in other assets on the consolidated balance sheet.
|
(Expressed in thousands)
|
|
|
|
|
|
|
||||
Issued
|
|
Maturity Date
|
|
December 31, 2017
|
|
December 31, 2016
|
||||
6.75% Senior Secured Notes
|
|
7/1/2022
|
|
$
|
200,000
|
|
|
$
|
—
|
|
8.75% Senior Secured Notes
|
|
4/15/2018
|
|
—
|
|
|
150,000
|
|
||
Unamortized Debt Issuance Cost
|
|
|
|
(1,163
|
)
|
|
(648
|
)
|
||
|
|
|
|
$
|
198,837
|
|
|
$
|
149,352
|
|
•
|
it is less than
$20 million
in any fiscal year; or
|
•
|
it, when combined with all other Restricted Payments (as defined in the indenture governing the Notes) that rely upon this exception, does not exceed
$10 million
.
|
OPPENHEIMER HOLDINGS INC.
Notes to Consolidated Financial Statements
|
OPPENHEIMER HOLDINGS INC.
Notes to Consolidated Financial Statements
|
|
2017
|
|
2016
|
||
Class A Stock outstanding, beginning of year
|
13,261,095
|
|
|
13,238,486
|
|
Issued pursuant to shared-based compensation plans (note 14)
|
328,458
|
|
|
283,471
|
|
Repurchased and canceled pursuant to the stock buy-back
|
(450,350
|
)
|
|
(260,862
|
)
|
Class A Stock outstanding, end of year
|
13,139,203
|
|
|
13,261,095
|
|
OPPENHEIMER HOLDINGS INC.
Notes to Consolidated Financial Statements
|
(Expressed in thousands, except number of shares and per share amounts)
|
|
|
|
|
|
||||||
|
For the Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Basic weighted average number of shares outstanding
|
13,246,423
|
|
|
13,368,768
|
|
|
13,640,610
|
|
|||
Net dilutive effect of share-based awards, treasury method
(1)
|
426,938
|
|
|
—
|
|
|
—
|
|
|||
Diluted weighted average number of shares outstanding
|
13,673,361
|
|
|
13,368,768
|
|
|
13,640,610
|
|
|||
|
|
|
|
|
|
||||||
Net income (loss) from continuing operations
|
$
|
21,870
|
|
|
$
|
(9,630
|
)
|
|
$
|
(2,834
|
)
|
Net income from discontinued operations
|
1,130
|
|
|
10,121
|
|
|
5,732
|
|
|||
Net income
|
23,000
|
|
|
491
|
|
|
2,898
|
|
|||
Net income attributable to noncontrolling interest, net of tax
|
184
|
|
|
1,652
|
|
|
936
|
|
|||
Net income (loss) attributable to Oppenheimer Holdings Inc.
|
$
|
22,816
|
|
|
$
|
(1,161
|
)
|
|
$
|
1,962
|
|
|
|
|
|
|
|
||||||
Basic net income (loss) per share attributable to Oppenheimer Holdings Inc.
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
1.65
|
|
|
$
|
(0.72
|
)
|
|
$
|
(0.21
|
)
|
Discontinued operations
(2)
|
0.07
|
|
|
0.63
|
|
|
0.35
|
|
|||
Net income (loss) per share
|
$
|
1.72
|
|
|
$
|
(0.09
|
)
|
|
$
|
0.14
|
|
|
|
|
|
|
|
||||||
Diluted net income (loss) per share attributable to Oppenheimer Holdings Inc.
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
1.60
|
|
|
$
|
(0.72
|
)
|
|
$
|
(0.21
|
)
|
Discontinued operations
(2)
|
0.07
|
|
|
0.63
|
|
|
0.35
|
|
|||
Net income (loss) per share
|
$
|
1.67
|
|
|
$
|
(0.09
|
)
|
|
$
|
0.14
|
|
(1)
|
For the year ended
December 31, 2017
, the diluted earnings per share computation does not include the anti-dilutive effect of
10,592
shares of Class A Stock granted under share-based compensation arrangements (
1,237,134
and
1,269,585
shares for the years ended December 31,
2016
and
2015
, respectively).
|
(2)
|
Represents net income from discontinued operations less net income attributable to noncontrolling interest, net of tax divided by weighted average number of shares outstanding.
|
(Expressed in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
For the Years Ended December 31,
|
|||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|||||||||||||||
|
Amount
|
|
Percentage
|
|
Amount
|
|
Percentage
|
|
Amount
|
|
Percentage
|
|||||||||
U.S. federal statutory income tax rate
|
$
|
6,907
|
|
|
35.0
|
%
|
|
$
|
(7,662
|
)
|
|
35.0
|
%
|
|
$
|
(851
|
)
|
|
35.0
|
%
|
U.S. state and local income taxes, net of U.S. federal income tax benefits
|
1,430
|
|
|
7.2
|
%
|
|
(1,075
|
)
|
|
4.9
|
%
|
|
(69
|
)
|
|
2.8
|
%
|
|||
Unrecognized tax benefit
|
(9
|
)
|
|
—
|
%
|
|
(603
|
)
|
|
2.8
|
%
|
|
589
|
|
|
-24.3
|
%
|
|||
Valuation allowance
|
89
|
|
|
0.5
|
%
|
|
1,208
|
|
|
-5.5
|
%
|
|
—
|
|
|
—
|
%
|
|||
Non-taxable income
|
(1,055
|
)
|
|
-5.3
|
%
|
|
(1,267
|
)
|
|
5.8
|
%
|
|
(696
|
)
|
|
28.7
|
%
|
|||
Provision to return adjustments
|
(1,277
|
)
|
|
-6.5
|
%
|
|
(4,167
|
)
|
|
19.0
|
%
|
|
442
|
|
|
-18.2
|
%
|
|||
Impact of the TCJA
|
(9,013
|
)
|
|
-45.7
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|||
Change in state and foreign tax rates
|
(353
|
)
|
|
-1.8
|
%
|
|
264
|
|
|
-1.2
|
%
|
|
305
|
|
|
-12.5
|
%
|
|||
Foreign tax rate differentials
|
974
|
|
|
4.9
|
%
|
|
143
|
|
|
-0.7
|
%
|
|
145
|
|
|
-6.0
|
%
|
|||
Excess tax benefits from share-based awards
|
(493
|
)
|
|
-2.5
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|||
Other non-deductible expenses
|
666
|
|
|
3.4
|
%
|
|
897
|
|
|
-4.1
|
%
|
|
541
|
|
|
-22.2
|
%
|
|||
Total income taxes
|
$
|
(2,134
|
)
|
|
-10.8
|
%
|
|
$
|
(12,262
|
)
|
|
56.0
|
%
|
|
$
|
406
|
|
|
-16.7
|
%
|
OPPENHEIMER HOLDINGS INC.
Notes to Consolidated Financial Statements
|
OPPENHEIMER HOLDINGS INC.
Notes to Consolidated Financial Statements
|
OPPENHEIMER HOLDINGS INC.
Notes to Consolidated Financial Statements
|
OPPENHEIMER HOLDINGS INC.
Notes to Consolidated Financial Statements
|
|
Number of Class
A Shares
Subject to
Restricted Stock Awards
|
|
Weighted
Average Fair
Value
|
|
Remaining
Contractual
Life
|
||||
Nonvested at beginning of year
|
1,223,533
|
|
|
$
|
17.11
|
|
|
2.1 Years
|
|
Granted
|
464,100
|
|
|
17.01
|
|
|
1.9 Years
|
|
|
Vested
|
(548,062
|
)
|
|
18.59
|
|
|
—
|
|
|
Forfeited
|
(72,275
|
)
|
|
16.50
|
|
|
—
|
|
|
Nonvested at end of year
|
1,067,296
|
|
|
$
|
16.34
|
|
|
2.2 Years
|
|
OPPENHEIMER HOLDINGS INC.
Notes to Consolidated Financial Statements
|
Grant Date
|
|
Number of
OARs
Outstanding
|
|
Strike Price
|
|
Remaining
Contractual
Life
|
|
Fair Value as of December 31, 2017
|
|||||
January 14, 2013
|
|
311,780
|
|
|
$
|
15.94
|
|
|
13 Days
|
|
$
|
10.86
|
|
January 14, 2014
|
|
391,730
|
|
|
23.48
|
|
|
1 Year
|
|
4.75
|
|
||
January 9, 2015
|
|
444,660
|
|
|
21.94
|
|
|
2 Years
|
|
7.09
|
|
||
January 6, 2016
|
|
439,120
|
|
|
15.89
|
|
|
3 Years
|
|
11.77
|
|
||
January 6, 2017
|
|
421,660
|
|
|
18.90
|
|
|
4 Years
|
|
10.35
|
|
||
|
|
2,008,950
|
|
|
|
|
|
|
|
||||
Total weighted average values
|
|
|
|
$
|
19.35
|
|
|
2.2 Years
|
|
$
|
8.93
|
|
|
|
Grant Date
|
||||||||||||||||||
|
|
January 14, 2013
|
|
January 14, 2014
|
|
January 9, 2015
|
|
January 6, 2016
|
|
January 6, 2017
|
||||||||||
Expected term
(1)
|
|
13 Days
|
|
|
1 Year
|
|
|
2 Years
|
|
|
3 Years
|
|
|
4 Years
|
|
|||||
Expected volatility factor
(2)
|
|
20.683
|
%
|
|
27.995
|
%
|
|
32.249
|
%
|
|
35.174
|
%
|
|
34.439
|
%
|
|||||
Risk-free interest rate
(3)
|
|
0.613
|
%
|
|
1.738
|
%
|
|
1.887
|
%
|
|
1.971
|
%
|
|
2.089
|
%
|
|||||
Actual dividends
(4)
|
|
$
|
0.44
|
|
|
$
|
0.44
|
|
|
$
|
0.44
|
|
|
$
|
0.44
|
|
|
$
|
0.44
|
|
(1)
|
The expected term was determined based on the remaining life of the actual awards.
|
(2)
|
The volatility factor was measured using the weighted average of historical daily price changes of the Company's Class A Stock over a historical period commensurate to the expected term of the awards.
|
(3)
|
The risk-free interest rate was based on periods equal to the expected term of the awards based on the U.S. Treasury yield curve in effect at
December 31, 2017
.
|
(4)
|
Actual dividends were used to compute the expected annual dividend yield.
|
OPPENHEIMER HOLDINGS INC.
Notes to Consolidated Financial Statements
|
OPPENHEIMER HOLDINGS INC.
Notes to Consolidated Financial Statements
|
OPPENHEIMER HOLDINGS INC.
Notes to Consolidated Financial Statements
|
OPPENHEIMER HOLDINGS INC.
Notes to Consolidated Financial Statements
|
16.
|
Regulatory requirements
|
•
|
Common Equity Tier 1 ratio
27.27%
(required
4.5%
);
|
•
|
Tier 1 Capital ratio
27.27%
(required
6.0%
); and
|
•
|
Total Capital ratio
28.79%
(required
8.0%
).
|
OPPENHEIMER HOLDINGS INC.
Notes to Consolidated Financial Statements
|
(Expressed in thousands)
|
|
|
|
|
|
||||||
|
For the Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Revenue
|
|
|
|
|
|
||||||
Private client
(1)
|
$
|
592,753
|
|
|
$
|
504,192
|
|
|
$
|
521,526
|
|
Asset management
(1)
|
89,896
|
|
|
92,852
|
|
|
97,121
|
|
|||
Capital markets
|
231,632
|
|
|
254,933
|
|
|
279,589
|
|
|||
Corporate/Other
|
6,057
|
|
|
5,802
|
|
|
(435
|
)
|
|||
Total
|
$
|
920,338
|
|
|
$
|
857,779
|
|
|
$
|
897,801
|
|
Income (loss) before income taxes
|
|
|
|
|
|
||||||
Private client
(1)
|
$
|
128,840
|
|
|
$
|
66,072
|
|
|
$
|
59,016
|
|
Asset management
(1)
|
26,685
|
|
|
31,412
|
|
|
33,133
|
|
|||
Capital markets
|
(39,978
|
)
|
|
(17,713
|
)
|
|
5,167
|
|
|||
Corporate/Other
|
(95,811
|
)
|
|
(101,663
|
)
|
|
(99,744
|
)
|
|||
Total
|
$
|
19,736
|
|
|
$
|
(21,892
|
)
|
|
$
|
(2,428
|
)
|
(1)
|
Clients investing in the OAM advisory program are charged fees based on the value of assets under management. Advisory fees were allocated
22.5%
to the Asset Management and
77.5%
to the Private Client segments. Starting January 1, 2017, the Company determined it was appropriate to change the allocation to
10.0%
to the Asset Management and
90.0%
to the Private Client segments due to changes in the mix of the business over time and costs associated with it.
|
(Expressed in thousands, except per share amounts)
|
|
|
|
|
|
|
||||||||||||||
|
|
Fiscal Quarters
|
|
|
||||||||||||||||
For the Year Ended December 31, 2017
|
|
Fourth
|
|
Third
|
|
Second
|
|
First
|
|
Year
|
||||||||||
Revenue
|
|
$
|
264,973
|
|
|
$
|
226,220
|
|
|
$
|
215,884
|
|
|
$
|
213,261
|
|
|
$
|
920,338
|
|
Expenses
|
|
248,403
|
|
|
214,392
|
|
|
217,521
|
|
|
220,286
|
|
|
900,602
|
|
|||||
Income (Loss) before income taxes from continuing operations
|
|
16,570
|
|
|
11,828
|
|
|
(1,637
|
)
|
|
(7,025
|
)
|
|
19,736
|
|
|||||
Income taxes
|
|
(4,598
|
)
|
|
4,425
|
|
|
(274
|
)
|
|
(1,687
|
)
|
|
(2,134
|
)
|
|||||
Net income (loss) from continuing operations
|
|
21,168
|
|
|
7,403
|
|
|
(1,363
|
)
|
|
(5,338
|
)
|
|
21,870
|
|
|||||
Net income from discontinued operations
|
|
29
|
|
|
461
|
|
|
53
|
|
|
587
|
|
|
1,130
|
|
|||||
Net income (loss)
|
|
21,197
|
|
|
7,864
|
|
|
(1,310
|
)
|
|
(4,751
|
)
|
|
23,000
|
|
|||||
Less net income attributable to noncontrolling interest, net of tax
|
|
4
|
|
|
75
|
|
|
9
|
|
|
96
|
|
|
184
|
|
|||||
Net income (loss) attributable to Oppenheimer Holdings Inc.
|
|
$
|
21,193
|
|
|
$
|
7,789
|
|
|
$
|
(1,319
|
)
|
|
$
|
(4,847
|
)
|
|
$
|
22,816
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic net income (loss) per share attributable to Oppenheimer Holdings Inc.
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations
|
|
$
|
1.61
|
|
|
$
|
0.56
|
|
|
$
|
(0.10
|
)
|
|
$
|
(0.40
|
)
|
|
$
|
1.65
|
|
Discontinued operations
|
|
—
|
|
|
0.03
|
|
|
—
|
|
|
0.04
|
|
|
0.07
|
|
|||||
Net income (loss) per share
|
|
$
|
1.61
|
|
|
$
|
0.59
|
|
|
$
|
(0.10
|
)
|
|
$
|
(0.36
|
)
|
|
$
|
1.72
|
|
Diluted net income (loss) per share attributable to Oppenheimer Holdings Inc.
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations
|
|
$
|
1.54
|
|
|
$
|
0.54
|
|
|
$
|
(0.10
|
)
|
|
$
|
(0.40
|
)
|
|
$
|
1.60
|
|
Discontinued operations
|
|
—
|
|
|
0.03
|
|
|
—
|
|
|
0.04
|
|
|
0.07
|
|
|||||
Net income (loss) per share
|
|
$
|
1.54
|
|
|
$
|
0.57
|
|
|
$
|
(0.10
|
)
|
|
$
|
(0.36
|
)
|
|
$
|
1.67
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Dividends per share
|
|
$
|
0.11
|
|
|
$
|
0.11
|
|
|
$
|
0.11
|
|
|
$
|
0.11
|
|
|
$
|
0.44
|
|
Market price of Class A Stock
(1)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
High
|
|
$
|
29.00
|
|
|
$
|
17.70
|
|
|
$
|
18.25
|
|
|
$
|
19.60
|
|
|
$
|
29.00
|
|
Low
|
|
$
|
17.35
|
|
|
$
|
15.40
|
|
|
$
|
15.10
|
|
|
$
|
15.90
|
|
|
$
|
15.10
|
|
(1)
|
The price quotations above were obtained from the New York Stock Exchange website.
|
(Expressed in thousands, except per share amounts)
|
|
|
|
|
|
|
||||||||||||||
|
|
Fiscal Quarters
|
|
|
||||||||||||||||
For the Year Ended December 31, 2016
|
|
Fourth
|
|
Third
|
|
Second
|
|
First
|
|
Year
|
||||||||||
Revenue
|
|
$
|
218,945
|
|
|
$
|
211,804
|
|
|
$
|
212,074
|
|
|
$
|
214,956
|
|
|
$
|
857,779
|
|
Expenses
|
|
226,441
|
|
|
213,614
|
|
|
217,320
|
|
|
222,296
|
|
|
879,671
|
|
|||||
Loss before income taxes from continuing operations
|
|
(7,496
|
)
|
|
(1,810
|
)
|
|
(5,246
|
)
|
|
(7,340
|
)
|
|
(21,892
|
)
|
|||||
Income taxes
|
|
(5,072
|
)
|
|
(751
|
)
|
|
(2,391
|
)
|
|
(4,048
|
)
|
|
(12,262
|
)
|
|||||
Net loss from continuing operations
|
|
(2,424
|
)
|
|
(1,059
|
)
|
|
(2,855
|
)
|
|
(3,292
|
)
|
|
(9,630
|
)
|
|||||
Net income (loss) from discontinued operations
|
|
759
|
|
|
413
|
|
|
9,566
|
|
|
(617
|
)
|
|
10,121
|
|
|||||
Net income (loss)
|
|
(1,665
|
)
|
|
(646
|
)
|
|
6,711
|
|
|
(3,909
|
)
|
|
491
|
|
|||||
Less net income (loss) attributable to noncontrolling interest, net of tax
|
|
125
|
|
|
66
|
|
|
1,523
|
|
|
(62
|
)
|
|
1,652
|
|
|||||
Net income (loss) attributable to Oppenheimer Holdings Inc.
|
|
$
|
(1,790
|
)
|
|
$
|
(712
|
)
|
|
$
|
5,188
|
|
|
$
|
(3,847
|
)
|
|
$
|
(1,161
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic net income (loss) per share attributable to Oppenheimer Holdings Inc.
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations
|
|
$
|
(0.28
|
)
|
|
$
|
(0.08
|
)
|
|
$
|
(0.21
|
)
|
|
$
|
(0.25
|
)
|
|
$
|
(0.72
|
)
|
Discontinued operations
|
|
0.05
|
|
|
0.03
|
|
|
0.60
|
|
|
(0.04
|
)
|
|
0.63
|
|
|||||
Net income (loss) per share
|
|
$
|
(0.23
|
)
|
|
$
|
(0.05
|
)
|
|
$
|
0.39
|
|
|
$
|
(0.29
|
)
|
|
$
|
(0.09
|
)
|
Diluted net income (loss) per share attributable to Oppenheimer Holdings Inc.
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations
|
|
$
|
(0.28
|
)
|
|
$
|
(0.08
|
)
|
|
$
|
(0.21
|
)
|
|
$
|
(0.25
|
)
|
|
$
|
(0.72
|
)
|
Discontinued operations
|
|
0.05
|
|
|
0.03
|
|
|
0.60
|
|
|
(0.04
|
)
|
|
0.63
|
|
|||||
Net income (loss) per share
|
|
$
|
(0.23
|
)
|
|
$
|
(0.05
|
)
|
|
$
|
0.39
|
|
|
$
|
(0.29
|
)
|
|
$
|
(0.09
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Dividends per share
|
|
$
|
0.11
|
|
|
$
|
0.11
|
|
|
$
|
0.11
|
|
|
$
|
0.11
|
|
|
$
|
0.44
|
|
Market price of Class A Stock
(1)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
High
|
|
$
|
19.65
|
|
|
$
|
16.49
|
|
|
$
|
16.66
|
|
|
$
|
16.98
|
|
|
$
|
19.65
|
|
Low
|
|
$
|
13.65
|
|
|
$
|
13.74
|
|
|
$
|
13.63
|
|
|
$
|
13.58
|
|
|
$
|
13.58
|
|
(1)
|
The price quotations above were obtained from the New York Stock Exchange website.
|
OPPENHEIMER HOLDINGS INC.
Notes to Consolidated Financial Statements
|
(Expressed in thousands)
|
Parent
|
|
Guarantor
subsidiaries
|
|
Non-guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
7,442
|
|
|
$
|
3,716
|
|
|
$
|
36,996
|
|
|
$
|
—
|
|
|
$
|
48,154
|
|
Deposits with clearing organizations
|
—
|
|
|
—
|
|
|
42,222
|
|
|
—
|
|
|
42,222
|
|
|||||
Receivable from brokers, dealers and clearing organizations
|
—
|
|
|
—
|
|
|
187,115
|
|
|
—
|
|
|
187,115
|
|
|||||
Receivable from customers, net of allowance for credit losses of $769
|
—
|
|
|
—
|
|
|
848,226
|
|
|
—
|
|
|
848,226
|
|
|||||
Income tax receivable
|
45,998
|
|
|
26,025
|
|
|
—
|
|
|
(69,084
|
)
|
|
2,939
|
|
|||||
Securities purchased under agreements to resell
|
—
|
|
|
—
|
|
|
658
|
|
|
—
|
|
|
658
|
|
|||||
Securities owned, including amounts pledged of $655,683, at fair value
|
—
|
|
|
1,386
|
|
|
925,211
|
|
|
—
|
|
|
926,597
|
|
|||||
Notes receivable, net of accumulated amortization and allowance for uncollectibles of $24,705 and $7,975, respectively
|
—
|
|
|
—
|
|
|
40,520
|
|
|
—
|
|
|
40,520
|
|
|||||
Furniture, equipment and leasehold improvements, net of accumulated depreciation of $82,826
|
—
|
|
|
20,221
|
|
|
6,966
|
|
|
—
|
|
|
27,187
|
|
|||||
Subordinated loan receivable
|
—
|
|
|
112,558
|
|
|
—
|
|
|
(112,558
|
)
|
|
—
|
|
|||||
Intangible assets
|
—
|
|
|
—
|
|
|
31,700
|
|
|
—
|
|
|
31,700
|
|
|||||
Goodwill
|
—
|
|
|
—
|
|
|
137,889
|
|
|
—
|
|
|
137,889
|
|
|||||
Other assets
|
133
|
|
|
2,573
|
|
|
142,604
|
|
|
—
|
|
|
145,310
|
|
|||||
Deferred tax assets
|
3,502
|
|
|
—
|
|
|
18,463
|
|
|
(21,965
|
)
|
|
—
|
|
|||||
Investment in subsidiaries
|
622,824
|
|
|
507,747
|
|
|
—
|
|
|
(1,130,571
|
)
|
|
—
|
|
|||||
Intercompany receivables
|
52,149
|
|
|
83,437
|
|
|
—
|
|
|
(135,586
|
)
|
|
—
|
|
|||||
Total assets
|
$
|
732,048
|
|
|
$
|
757,663
|
|
|
$
|
2,418,570
|
|
|
$
|
(1,469,764
|
)
|
|
$
|
2,438,517
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Drafts payable
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
42,412
|
|
|
$
|
—
|
|
|
$
|
42,412
|
|
Bank call loans
|
—
|
|
|
—
|
|
|
118,300
|
|
|
—
|
|
|
118,300
|
|
|||||
Payable to brokers, dealers and clearing organizations
|
—
|
|
|
—
|
|
|
211,483
|
|
|
—
|
|
|
211,483
|
|
|||||
Payable to customers
|
—
|
|
|
—
|
|
|
385,907
|
|
|
—
|
|
|
385,907
|
|
|||||
Securities sold under agreements to repurchase
|
—
|
|
|
—
|
|
|
586,478
|
|
|
—
|
|
|
586,478
|
|
|||||
Securities sold but not yet purchased, at fair value
|
—
|
|
|
—
|
|
|
94,486
|
|
|
—
|
|
|
94,486
|
|
|||||
Accrued compensation
|
—
|
|
|
—
|
|
|
173,116
|
|
|
—
|
|
|
173,116
|
|
|||||
Accounts payable and other liabilities
|
7,221
|
|
|
33,994
|
|
|
51,280
|
|
|
—
|
|
|
92,495
|
|
|||||
Income tax payable
|
2,440
|
|
|
22,189
|
|
|
44,455
|
|
|
(69,084
|
)
|
|
—
|
|
|||||
Senior secured notes, net of debt issuance cost of $1,163
|
198,837
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
198,837
|
|
|||||
Subordinated indebtedness
|
—
|
|
|
—
|
|
|
112,558
|
|
|
(112,558
|
)
|
|
—
|
|
|||||
Deferred tax liabilities
|
—
|
|
|
17
|
|
|
33,040
|
|
|
(21,965
|
)
|
|
11,092
|
|
|||||
Intercompany payables
|
—
|
|
|
62,163
|
|
|
73,423
|
|
|
(135,586
|
)
|
|
—
|
|
|||||
Total liabilities
|
208,498
|
|
|
118,363
|
|
|
1,926,938
|
|
|
(339,193
|
)
|
|
1,914,606
|
|
|||||
Stockholders' equity
|
|
|
|
|
|
|
|
|
|
||||||||||
Stockholders' equity attributable to Oppenheimer Holdings Inc.
|
523,550
|
|
|
639,300
|
|
|
491,271
|
|
|
(1,130,571
|
)
|
|
523,550
|
|
|||||
Noncontrolling interest
|
—
|
|
|
—
|
|
|
361
|
|
|
—
|
|
|
361
|
|
|||||
Total stockholders' equity
|
523,550
|
|
|
639,300
|
|
|
491,632
|
|
|
(1,130,571
|
)
|
|
523,911
|
|
|||||
Total liabilities and stockholders' equity
|
$
|
732,048
|
|
|
$
|
757,663
|
|
|
$
|
2,418,570
|
|
|
$
|
(1,469,764
|
)
|
|
$
|
2,438,517
|
|
(Expressed in thousands)
|
Parent
|
|
Guarantor
subsidiaries
|
|
Non-guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
229
|
|
|
$
|
10,284
|
|
|
$
|
54,400
|
|
|
$
|
—
|
|
|
$
|
64,913
|
|
Deposits with clearing organizations
|
—
|
|
|
—
|
|
|
38,185
|
|
|
—
|
|
|
38,185
|
|
|||||
Receivable from brokers, dealers and clearing organizations
|
—
|
|
|
—
|
|
|
214,934
|
|
|
—
|
|
|
214,934
|
|
|||||
Receivable from customers, net of allowance for credit losses of $794
|
—
|
|
|
—
|
|
|
847,386
|
|
|
—
|
|
|
847,386
|
|
|||||
Income tax receivable
|
41,996
|
|
|
28,289
|
|
|
—
|
|
|
(64,469
|
)
|
|
5,816
|
|
|||||
Securities purchased under agreements to resell
|
—
|
|
|
—
|
|
|
24,006
|
|
|
—
|
|
|
24,006
|
|
|||||
Securities owned, including amounts pledged of $438,385, at fair value
|
—
|
|
|
23,227
|
|
|
683,881
|
|
|
—
|
|
|
707,108
|
|
|||||
Notes receivable, net of accumulated amortization and allowance for uncollectibles of $24,826 and $6,784, respectively
|
—
|
|
|
—
|
|
|
30,099
|
|
|
—
|
|
|
30,099
|
|
|||||
Furniture, equipment and leasehold improvements, net of accumulated depreciation of $84,073
|
—
|
|
|
21,963
|
|
|
5,270
|
|
|
—
|
|
|
27,233
|
|
|||||
Subordinated loan receivable
|
—
|
|
|
112,558
|
|
|
—
|
|
|
(112,558
|
)
|
|
—
|
|
|||||
Intangible assets
|
—
|
|
|
—
|
|
|
31,700
|
|
|
—
|
|
|
31,700
|
|
|||||
Goodwill
|
—
|
|
|
—
|
|
|
137,889
|
|
|
—
|
|
|
137,889
|
|
|||||
Other assets
|
71
|
|
|
2,598
|
|
|
104,992
|
|
|
—
|
|
|
107,661
|
|
|||||
Deferred tax assets
|
394
|
|
|
309
|
|
|
37,961
|
|
|
(38,664
|
)
|
|
—
|
|
|||||
Investment in subsidiaries
|
584,767
|
|
|
483,623
|
|
|
—
|
|
|
(1,068,390
|
)
|
|
—
|
|
|||||
Intercompany receivables
|
37,906
|
|
|
37,914
|
|
|
—
|
|
|
(75,820
|
)
|
|
—
|
|
|||||
Total assets
|
$
|
665,363
|
|
|
$
|
720,765
|
|
|
$
|
2,210,703
|
|
|
$
|
(1,359,901
|
)
|
|
$
|
2,236,930
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Drafts payable
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
39,228
|
|
|
$
|
—
|
|
|
$
|
39,228
|
|
Bank call loans
|
—
|
|
|
—
|
|
|
145,800
|
|
|
—
|
|
|
145,800
|
|
|||||
Payable to brokers, dealers and clearing organizations
|
—
|
|
|
—
|
|
|
221,389
|
|
|
—
|
|
|
221,389
|
|
|||||
Payable to customers
|
—
|
|
|
—
|
|
|
449,946
|
|
|
—
|
|
|
449,946
|
|
|||||
Securities sold under agreements to repurchase
|
—
|
|
|
—
|
|
|
378,084
|
|
|
—
|
|
|
378,084
|
|
|||||
Securities sold but not yet purchased, at fair value
|
—
|
|
|
—
|
|
|
85,050
|
|
|
—
|
|
|
85,050
|
|
|||||
Accrued compensation
|
—
|
|
|
—
|
|
|
145,053
|
|
|
—
|
|
|
145,053
|
|
|||||
Accounts payable and other liabilities
|
2,868
|
|
|
34,920
|
|
|
58,769
|
|
|
—
|
|
|
96,557
|
|
|||||
Income tax payable
|
2,440
|
|
|
22,189
|
|
|
39,840
|
|
|
(64,469
|
)
|
|
—
|
|
|||||
Senior secured notes, net of debt issuance costs of $648
|
149,352
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
149,352
|
|
|||||
Subordinated indebtedness
|
—
|
|
|
—
|
|
|
112,558
|
|
|
(112,558
|
)
|
|
—
|
|
|||||
Deferred tax liabilities
|
—
|
|
|
7
|
|
|
51,794
|
|
|
(38,664
|
)
|
|
13,137
|
|
|||||
Intercompany payables
|
—
|
|
|
62,205
|
|
|
13,615
|
|
|
(75,820
|
)
|
|
—
|
|
|||||
Total liabilities
|
154,660
|
|
|
119,321
|
|
|
1,741,126
|
|
|
(291,511
|
)
|
|
1,723,596
|
|
|||||
Stockholders' equity
|
|
|
|
|
|
|
|
|
|
||||||||||
Stockholders' equity attributable to Oppenheimer Holdings Inc.
|
510,703
|
|
|
601,444
|
|
|
466,946
|
|
|
(1,068,390
|
)
|
|
510,703
|
|
|||||
Noncontrolling interest
|
—
|
|
|
—
|
|
|
2,631
|
|
|
—
|
|
|
2,631
|
|
|||||
Total stockholders' equity
|
510,703
|
|
|
601,444
|
|
|
469,577
|
|
|
(1,068,390
|
)
|
|
513,334
|
|
|||||
Total liabilities and stockholders' equity
|
$
|
665,363
|
|
|
$
|
720,765
|
|
|
$
|
2,210,703
|
|
|
$
|
(1,359,901
|
)
|
|
$
|
2,236,930
|
|
(Expressed in thousands)
|
Parent
|
|
Guarantor
subsidiaries
|
|
Non-guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
REVENUES
|
|
|
|
|
|
|
|
|
|
||||||||||
Commissions
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
336,620
|
|
|
$
|
—
|
|
|
$
|
336,620
|
|
Advisory fees
|
—
|
|
|
1,752
|
|
|
323,114
|
|
|
(4,120
|
)
|
|
320,746
|
|
|||||
Investment banking
|
—
|
|
|
—
|
|
|
81,215
|
|
|
(3,000
|
)
|
|
78,215
|
|
|||||
Interest
|
—
|
|
|
9,589
|
|
|
48,548
|
|
|
(9,639
|
)
|
|
48,498
|
|
|||||
Principal transactions, net
|
—
|
|
|
17
|
|
|
23,256
|
|
|
—
|
|
|
23,273
|
|
|||||
Other
|
22
|
|
|
361
|
|
|
112,962
|
|
|
(359
|
)
|
|
112,986
|
|
|||||
Total revenue
|
22
|
|
|
11,719
|
|
|
925,715
|
|
|
(17,118
|
)
|
|
920,338
|
|
|||||
EXPENSES
|
|
|
|
|
|
|
|
|
|
||||||||||
Compensation and related expenses
|
1,237
|
|
|
—
|
|
|
600,901
|
|
|
—
|
|
|
602,138
|
|
|||||
Communications and technology
|
160
|
|
|
—
|
|
|
71,818
|
|
|
—
|
|
|
71,978
|
|
|||||
Occupancy and equipment costs
|
—
|
|
|
—
|
|
|
61,523
|
|
|
(359
|
)
|
|
61,164
|
|
|||||
Clearing and exchange fees
|
—
|
|
|
—
|
|
|
23,545
|
|
|
—
|
|
|
23,545
|
|
|||||
Interest
|
13,740
|
|
|
—
|
|
|
24,253
|
|
|
(9,639
|
)
|
|
28,354
|
|
|||||
Other
|
4,969
|
|
|
1,382
|
|
|
114,192
|
|
|
(7,120
|
)
|
|
113,423
|
|
|||||
Total expenses
|
20,106
|
|
|
1,382
|
|
|
896,232
|
|
|
(17,118
|
)
|
|
900,602
|
|
|||||
Income (loss) before income taxes
|
(20,084
|
)
|
|
10,337
|
|
|
29,483
|
|
|
—
|
|
|
19,736
|
|
|||||
Income taxes
|
(7,110
|
)
|
|
(12,655
|
)
|
|
17,631
|
|
|
—
|
|
|
(2,134
|
)
|
|||||
Net income (loss) from continuing operations
|
(12,974
|
)
|
|
22,992
|
|
|
11,852
|
|
|
—
|
|
|
21,870
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Discontinued operations
|
|
|
|
|
|
|
|
|
|
||||||||||
Income from discontinued operations
|
—
|
|
|
—
|
|
|
2,071
|
|
|
—
|
|
|
2,071
|
|
|||||
Income taxes
|
—
|
|
|
—
|
|
|
941
|
|
|
—
|
|
|
941
|
|
|||||
Net income from discontinued operations
|
—
|
|
|
—
|
|
|
1,130
|
|
|
—
|
|
|
1,130
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity in earnings of subsidiaries
|
35,790
|
|
|
12,798
|
|
|
—
|
|
|
(48,588
|
)
|
|
—
|
|
|||||
Net income
|
22,816
|
|
|
35,790
|
|
|
12,982
|
|
|
(48,588
|
)
|
|
23,000
|
|
|||||
Less net income attributable to noncontrolling interest, net of tax
|
—
|
|
|
—
|
|
|
184
|
|
|
—
|
|
|
184
|
|
|||||
Net income attributable to Oppenheimer Holdings Inc.
|
22,816
|
|
|
35,790
|
|
|
12,798
|
|
|
(48,588
|
)
|
|
22,816
|
|
|||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
2,263
|
|
|
—
|
|
|
2,263
|
|
|||||
Total comprehensive income
|
$
|
22,816
|
|
|
$
|
35,790
|
|
|
$
|
15,061
|
|
|
$
|
(48,588
|
)
|
|
$
|
25,079
|
|
(Expressed in thousands)
|
Parent
|
|
Guarantor
subsidiaries |
|
Non-guarantor
Subsidiaries |
|
Eliminations
|
|
Consolidated
|
||||||||||
REVENUES
|
|
|
|
|
|
|
|
|
|
||||||||||
Commissions
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
377,317
|
|
|
$
|
—
|
|
|
$
|
377,317
|
|
Advisory fees
|
—
|
|
|
1,571
|
|
|
271,763
|
|
|
(4,215
|
)
|
|
269,119
|
|
|||||
Investment banking
|
—
|
|
|
—
|
|
|
81,011
|
|
|
—
|
|
|
81,011
|
|
|||||
Interest
|
—
|
|
|
10,242
|
|
|
47,804
|
|
|
(10,397
|
)
|
|
47,649
|
|
|||||
Principal transactions, net
|
—
|
|
|
16
|
|
|
20,465
|
|
|
—
|
|
|
20,481
|
|
|||||
Other
|
—
|
|
|
326
|
|
|
62,201
|
|
|
(325
|
)
|
|
62,202
|
|
|||||
Total revenue
|
—
|
|
|
12,155
|
|
|
860,561
|
|
|
(14,937
|
)
|
|
857,779
|
|
|||||
EXPENSES
|
|
|
|
|
|
|
|
|
|
||||||||||
Compensation and related expenses
|
1,241
|
|
|
—
|
|
|
583,469
|
|
|
—
|
|
|
584,710
|
|
|||||
Communications and technology
|
124
|
|
|
—
|
|
|
70,266
|
|
|
—
|
|
|
70,390
|
|
|||||
Occupancy and equipment costs
|
—
|
|
|
—
|
|
|
61,116
|
|
|
(325
|
)
|
|
60,791
|
|
|||||
Clearing and exchange fees
|
—
|
|
|
—
|
|
|
25,126
|
|
|
—
|
|
|
25,126
|
|
|||||
Interest
|
13,125
|
|
|
—
|
|
|
16,709
|
|
|
(10,397
|
)
|
|
19,437
|
|
|||||
Other
|
1,887
|
|
|
1,284
|
|
|
120,261
|
|
|
(4,215
|
)
|
|
119,217
|
|
|||||
Total expenses
|
16,377
|
|
|
1,284
|
|
|
876,947
|
|
|
(14,937
|
)
|
|
879,671
|
|
|||||
Income (loss) before income taxes
|
(16,377
|
)
|
|
10,871
|
|
|
(16,386
|
)
|
|
—
|
|
|
(21,892
|
)
|
|||||
Income taxes
|
(8,296
|
)
|
|
3,325
|
|
|
(7,291
|
)
|
|
—
|
|
|
(12,262
|
)
|
|||||
Net income (loss) from continuing operations
|
(8,081
|
)
|
|
7,546
|
|
|
(9,095
|
)
|
|
—
|
|
|
(9,630
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Discontinued operations
|
|
|
|
|
|
|
|
|
|
||||||||||
Income from discontinued operations
|
—
|
|
|
—
|
|
|
17,339
|
|
|
—
|
|
|
17,339
|
|
|||||
Income taxes
|
—
|
|
|
—
|
|
|
7,218
|
|
|
—
|
|
|
7,218
|
|
|||||
Net income from discontinued operations
|
—
|
|
|
—
|
|
|
10,121
|
|
|
—
|
|
|
10,121
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity in earnings of subsidiaries
|
6,920
|
|
|
(626
|
)
|
|
—
|
|
|
(6,294
|
)
|
|
—
|
|
|||||
Net income (loss)
|
(1,161
|
)
|
|
6,920
|
|
|
1,026
|
|
|
(6,294
|
)
|
|
491
|
|
|||||
Less net income attributable to noncontrolling interest, net of tax
|
—
|
|
|
—
|
|
|
1,652
|
|
|
—
|
|
|
1,652
|
|
|||||
Net income (loss) attributable to Oppenheimer Holdings Inc.
|
(1,161
|
)
|
|
6,920
|
|
|
(626
|
)
|
|
(6,294
|
)
|
|
(1,161
|
)
|
|||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
220
|
|
|
—
|
|
|
220
|
|
|||||
Total comprehensive income (loss)
|
$
|
(1,161
|
)
|
|
$
|
6,920
|
|
|
$
|
(406
|
)
|
|
$
|
(6,294
|
)
|
|
$
|
(941
|
)
|
(Expressed in thousands)
|
Parent
|
|
Guarantor
subsidiaries |
|
Non-guarantor
Subsidiaries |
|
Eliminations
|
|
Consolidated
|
||||||||||
REVENUES
|
|
|
|
|
|
|
|
|
|
||||||||||
Commissions
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
417,559
|
|
|
$
|
—
|
|
|
$
|
417,559
|
|
Advisory fees
|
—
|
|
|
1,296
|
|
|
282,633
|
|
|
(3,682
|
)
|
|
280,247
|
|
|||||
Investment banking
|
—
|
|
|
—
|
|
|
102,540
|
|
|
—
|
|
|
102,540
|
|
|||||
Interest
|
—
|
|
|
10,237
|
|
|
49,056
|
|
|
(10,261
|
)
|
|
49,032
|
|
|||||
Principal transactions, net
|
—
|
|
|
—
|
|
|
15,244
|
|
|
(64
|
)
|
|
15,180
|
|
|||||
Other
|
—
|
|
|
370
|
|
|
33,173
|
|
|
(300
|
)
|
|
33,243
|
|
|||||
Total revenue
|
—
|
|
|
11,903
|
|
|
900,205
|
|
|
(14,307
|
)
|
|
897,801
|
|
|||||
EXPENSES
|
|
|
|
|
|
|
|
|
|
||||||||||
Compensation and related expenses
|
1,185
|
|
|
—
|
|
|
609,635
|
|
|
—
|
|
|
610,820
|
|
|||||
Communications and technology
|
142
|
|
|
—
|
|
|
66,407
|
|
|
—
|
|
|
66,549
|
|
|||||
Occupancy and equipment costs
|
—
|
|
|
—
|
|
|
63,142
|
|
|
(300
|
)
|
|
62,842
|
|
|||||
Clearing and exchange fees
|
—
|
|
|
—
|
|
|
26,022
|
|
|
—
|
|
|
26,022
|
|
|||||
Interest
|
13,125
|
|
|
—
|
|
|
13,465
|
|
|
(10,261
|
)
|
|
16,329
|
|
|||||
Other
|
1,663
|
|
|
892
|
|
|
118,858
|
|
|
(3,746
|
)
|
|
117,667
|
|
|||||
Total expenses
|
16,115
|
|
|
892
|
|
|
897,529
|
|
|
(14,307
|
)
|
|
900,229
|
|
|||||
Income (loss) before income taxes
|
(16,115
|
)
|
|
11,011
|
|
|
2,676
|
|
|
—
|
|
|
(2,428
|
)
|
|||||
Income taxes
|
(6,030
|
)
|
|
5,553
|
|
|
883
|
|
|
—
|
|
|
406
|
|
|||||
Net income (loss) from continuing operations
|
(10,085
|
)
|
|
5,458
|
|
|
1,793
|
|
|
—
|
|
|
(2,834
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Discontinued operations
|
|
|
|
|
|
|
|
|
|
||||||||||
Income from discontinued operations
|
—
|
|
|
—
|
|
|
9,139
|
|
|
—
|
|
|
9,139
|
|
|||||
Income taxes
|
—
|
|
|
—
|
|
|
3,407
|
|
|
—
|
|
|
3,407
|
|
|||||
Net income from discontinued operations
|
—
|
|
|
—
|
|
|
5,732
|
|
|
—
|
|
|
5,732
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity in earnings of subsidiaries
|
12,047
|
|
|
6,589
|
|
|
—
|
|
|
(18,636
|
)
|
|
—
|
|
|||||
Net income
|
1,962
|
|
|
12,047
|
|
|
7,525
|
|
|
(18,636
|
)
|
|
2,898
|
|
|||||
Less net income attributable to noncontrolling interest, net of tax
|
—
|
|
|
—
|
|
|
936
|
|
|
—
|
|
|
936
|
|
|||||
Net income attributable to Oppenheimer Holdings Inc.
|
1,962
|
|
|
12,047
|
|
|
6,589
|
|
|
(18,636
|
)
|
|
1,962
|
|
|||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
17
|
|
|
—
|
|
|
17
|
|
|||||
Total comprehensive income
|
$
|
1,962
|
|
|
$
|
12,047
|
|
|
$
|
6,606
|
|
|
$
|
(18,636
|
)
|
|
$
|
1,979
|
|
(Expressed in thousands)
|
Parent
|
|
Guarantor
subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash provided by (used in) operating activities
|
$
|
(25,979
|
)
|
|
$
|
(6,568
|
)
|
|
$
|
16,411
|
|
|
$
|
—
|
|
|
$
|
(16,136
|
)
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchase of furniture, equipment and leasehold improvements
|
—
|
|
|
—
|
|
|
(5,611
|
)
|
|
—
|
|
|
(5,611
|
)
|
|||||
Proceeds from the settlement of Company-owned life insurance
|
—
|
|
|
—
|
|
|
1,744
|
|
|
—
|
|
|
1,744
|
|
|||||
Cash used in investing activities
|
—
|
|
|
—
|
|
|
(3,867
|
)
|
|
—
|
|
|
(3,867
|
)
|
|||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash dividends paid on Class A non-voting and Class B voting common stock
|
(5,836
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,836
|
)
|
|||||
Cash dividends paid to noncontrolling interest
|
—
|
|
|
—
|
|
|
(2,448
|
)
|
|
—
|
|
|
(2,448
|
)
|
|||||
Issuance of Class A non-voting common stock
|
26
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
26
|
|
|||||
Repurchase of Class A non-voting common stock for cancellation
|
(7,464
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,464
|
)
|
|||||
Payments of employee taxes withheld related to vested share-based awards
|
(2,237
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,237
|
)
|
|||||
Issuance of senior secured notes
|
200,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
200,000
|
|
|||||
Redemption of senior secured notes
|
(150,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(150,000
|
)
|
|||||
Debt issuance costs
|
(1,297
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,297
|
)
|
|||||
Decrease in bank call loans, net
|
—
|
|
|
—
|
|
|
(27,500
|
)
|
|
—
|
|
|
(27,500
|
)
|
|||||
Cash provided by (used in) in financing activities
|
33,192
|
|
|
—
|
|
|
(29,948
|
)
|
|
—
|
|
|
3,244
|
|
|||||
Net increase (decrease) in cash and cash equivalents
|
7,213
|
|
|
(6,568
|
)
|
|
(17,404
|
)
|
|
—
|
|
|
(16,759
|
)
|
|||||
Cash and cash equivalents, beginning of the year
|
229
|
|
|
10,284
|
|
|
54,400
|
|
|
—
|
|
|
64,913
|
|
|||||
Cash and cash equivalents, end of the year
|
$
|
7,442
|
|
|
$
|
3,716
|
|
|
$
|
36,996
|
|
|
$
|
—
|
|
|
$
|
48,154
|
|
(Expressed in thousands)
|
Parent
|
|
Guarantor
subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash provided by (used in) operating activities
|
$
|
10,485
|
|
|
$
|
7,698
|
|
|
$
|
(85,048
|
)
|
|
$
|
—
|
|
|
$
|
(66,865
|
)
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchase of furniture, equipment and leasehold improvements
|
—
|
|
|
—
|
|
|
(5,731
|
)
|
|
—
|
|
|
(5,731
|
)
|
|||||
Proceeds from sale of assets
|
—
|
|
|
—
|
|
|
45,448
|
|
|
—
|
|
|
45,448
|
|
|||||
Cash provided by investing activities
|
—
|
|
|
—
|
|
|
39,717
|
|
|
—
|
|
|
39,717
|
|
|||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash dividends paid on Class A non-voting and Class B voting common stock
|
(5,887
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,887
|
)
|
|||||
Cash dividends paid to noncontrolling interest
|
—
|
|
|
—
|
|
|
(5,740
|
)
|
|
—
|
|
|
(5,740
|
)
|
|||||
Repurchase of Class A non-voting common stock for cancellation
|
(3,935
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,935
|
)
|
|||||
Payments of employee taxes withheld related to vested share-based awards
|
(1,341
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,341
|
)
|
|||||
Increase in bank call loans, net
|
—
|
|
|
—
|
|
|
45,600
|
|
|
—
|
|
|
45,600
|
|
|||||
Cash provided by (used in) financing activities
|
(11,163
|
)
|
|
—
|
|
|
39,860
|
|
|
—
|
|
|
28,697
|
|
|||||
Net increase (decrease) in cash and cash equivalents
|
(678
|
)
|
|
7,698
|
|
|
(5,471
|
)
|
|
—
|
|
|
1,549
|
|
|||||
Cash and cash equivalents, beginning of the year
|
907
|
|
|
2,586
|
|
|
59,871
|
|
|
—
|
|
|
63,364
|
|
|||||
Cash and cash equivalents, end of the year
|
$
|
229
|
|
|
$
|
10,284
|
|
|
$
|
54,400
|
|
|
$
|
—
|
|
|
$
|
64,913
|
|
(Expressed in thousands)
|
Parent
|
|
Guarantor
subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash provided by (used in) operating activities
|
$
|
16,409
|
|
|
$
|
1,029
|
|
|
$
|
(36,851
|
)
|
|
$
|
—
|
|
|
$
|
(19,413
|
)
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchase of furniture, equipment and leasehold improvements
|
—
|
|
|
—
|
|
|
(5,889
|
)
|
|
—
|
|
|
(5,889
|
)
|
|||||
Cash used in investing activities
|
—
|
|
|
—
|
|
|
(5,889
|
)
|
|
—
|
|
|
(5,889
|
)
|
|||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash dividends paid on Class A non-voting and Class B voting common stock
|
(6,008
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,008
|
)
|
|||||
Repurchase of Class A non-voting common stock for cancellation
|
(8,250
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,250
|
)
|
|||||
Payments of employee taxes withheld related to vested share-based awards
|
(1,683
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,683
|
)
|
|||||
Redemption of senior secured notes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Decrease in bank call loans, net
|
—
|
|
|
—
|
|
|
40,800
|
|
|
—
|
|
|
40,800
|
|
|||||
Cash provided by (used in) financing activities
|
(15,941
|
)
|
|
—
|
|
|
40,800
|
|
|
—
|
|
|
24,859
|
|
|||||
Net increase (decrease) in cash and cash equivalents
|
468
|
|
|
1,029
|
|
|
(1,940
|
)
|
|
—
|
|
|
(443
|
)
|
|||||
Cash and cash equivalents, beginning of the year
|
439
|
|
|
1,557
|
|
|
61,811
|
|
|
—
|
|
|
63,807
|
|
|||||
Cash and cash equivalents, end of the year
|
$
|
907
|
|
|
$
|
2,586
|
|
|
$
|
59,871
|
|
|
$
|
—
|
|
|
$
|
63,364
|
|
(a)
|
(i) Financial Statements
|
(b)
|
Exhibits
|
(c)
|
Financial Statement Schedules excluded from the annual report to stockholders
|
Number
|
|
Description
|
Page
|
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
101
|
|
Interactive data files pursuant to Rule 405 of Regulation S-T: (i) the Consolidated Balance Sheets as of December 31, 2017 and December 31, 2016, (ii) the Consolidated Statements of Operations for the three years ended December 31, 2017, 2016 and 2015, (iii) the Consolidated Statements of Comprehensive Income (Loss) for the three years ended December 31, 2017, 2016 and 2015, (iv) the Consolidated Statements of Changes in Stockholders' Equity for the three years ended December 31, 2017, 2016 and 2015, (v) the Consolidated Statements of Cash Flows for the three years ended December 31, 2017, 2016 and 2015, and (vi) the notes to the Consolidated Financial Statements.*
|
|
*
|
This information is furnished and not filed for purposes of Sections 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934.
|
OPPENHEIMER HOLDINGS INC.
|
|
BY: /s/ Jeffrey J. Alfano
|
Jeffrey J. Alfano, Chief Financial Officer
|
(on behalf of the Registrant)
|
Signature
|
|
Title
|
|
Date
|
|
|
|
||
/s/ J.J. Alfano
|
|
Chief Financial Officer (Principal Financial and Accounting Officer)
|
|
March 2, 2018
|
J.J. Alfano
|
|
|
|
|
|
|
|
||
/s/ E. Behrens
|
|
Director
|
|
March 2, 2018
|
E. Behrens
|
|
|
|
|
|
|
|
||
/s/ T. Dwyer
|
|
Director
|
|
March 2, 2018
|
T. Dwyer
|
|
|
|
|
|
|
|
|
|
/s/ W. Ehrhardt
|
|
Director
|
|
March 2, 2018
|
W. Ehrhardt
|
|
|
|
|
|
|
|
||
/s/ P. Friedman
|
|
Director
|
|
March 2, 2018
|
P. Friedman
|
|
|
|
|
|
|
|
||
/s/ M.A.M. Keehner
|
|
Director
|
|
March 2, 2018
|
M.A.M. Keehner
|
|
|
|
|
|
|
|
||
/s/ A.G.Lowenthal
|
|
Chairman, Chief Executive Officer (Principal Executive Officer), Director
|
|
March 2, 2018
|
A.G. Lowenthal
|
|
|
|
|
|
|
|
||
/s/ R.S. Lowenthal
|
|
Director
|
|
March 2, 2018
|
R.S. Lowenthal
|
|
|
|
|
|
|
|
||
/s/ A.W. Oughtred
|
|
Director
|
|
March 2, 2018
|
A.W. Oughtred
|
|
|
|
|
|
|
|
||
/s/ E.K. Roberts
|
|
Director
|
|
March 2, 2018
|
E.K. Roberts
|
|
|
|
|
OPPENHEIMER HOLDINGS INC.
|
BY: /s/ J.J. Alfano
|
J.J. Alfano, Chief Financial Officer
|
Name and Title
|
|
/s/ A.G. Lowenthal
|
Albert G. Lowenthal
|
|
•
|
Revenues;
|
•
|
Consolidated after-tax profit or pre-tax profit, including, without limitation, as attributable to continuing and/or other operations;
|
•
|
Profit margin or operating margin (whether net or gross) or one of the components thereof (to the extent recognized as a distinct component thereof under generally accepted accounting principles ("GAAP"));
|
•
|
Strategic business criteria, consisting of one or more objectives based on meeting specified market penetration or market share, geographic business expansion, customer satisfaction, employee satisfaction, and goals relating to divestitures, joint ventures and similar transactions;
|
•
|
The increase in the Market Value of a share of Class A Stock from the date the Committee establishes the performance goal (or, if later, January 1 of the Performance Year) to December 31 of the Performance Year;
|
•
|
The growth in the value of an investment in Class A Stock assuming the reinvestment of dividends, dividend growth or market capitalization;
|
•
|
Earnings per share or earnings per share from continuing operations;
|
•
|
Return on capital employed, return on invested capital, or return on assets;
|
•
|
Operational cash flow or economic value added;
|
•
|
Enterprise value or value creation targets;
|
•
|
Specified objectives with regard to limiting the level of increase in all or a portion of, Holdings' bank debt or other long-term or short-term public or private debt or other similar financial obligations, or other capital structure improvements, which may be calculated net of cash balances and/or other offsets and adjustments as may be established by the Committee;
|
•
|
A transaction that results in the sale of stock or assets of Holdings;
|
•
|
Earnings before interest, taxes plus amortization and depreciation;
|
•
|
Reduction in expenses or cost savings;
|
•
|
Any financial metric set forth herein or in the Holdings' financial statements as a percentage of another financial metric;
|
•
|
any combination of the above factors.
|
(i)
|
restructurings, discontinued operations, extraordinary items or events, and other unusual or non-recurring charges;
|
(ii)
|
an event either not directly related to the operations of the Holdings or not within the reasonable control of Holdings' management; or
|
(iii)
|
a change in tax law or accounting standards required by generally accepted accounting principles.
|
(i)
|
designate additional business criteria on which the performance criteria may be based; or
|
(Expressed in thousands)
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
||||||||||
Income (Loss) Before Income Taxes
|
$
|
43,909
|
|
|
$
|
25,736
|
|
|
$
|
6,711
|
|
|
$
|
(21,892
|
)
|
|
$
|
19,736
|
|
Add Fixed Charges:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest Expense
(2)
|
26,142
|
|
|
17,801
|
|
|
17,323
|
|
|
19,437
|
|
|
28,354
|
|
|||||
Amortization of Debt Issuance Costs
|
639
|
|
|
1,118
|
|
|
485
|
|
|
484
|
|
|
783
|
|
|||||
Appropriate Portion of Rentals Representative of the Interest Factor
(3)
|
15,454
|
|
|
15,208
|
|
|
15,308
|
|
|
14,807
|
|
|
15,200
|
|
|||||
Total Fixed Charges
|
$
|
42,235
|
|
|
$
|
34,127
|
|
|
$
|
33,116
|
|
|
$
|
34,728
|
|
|
$
|
44,337
|
|
Earnings
|
$
|
86,144
|
|
|
$
|
59,863
|
|
|
$
|
39,827
|
|
|
$
|
12,836
|
|
|
$
|
64,073
|
|
Ratio of Earnings to Fixed Charges
(4)
|
2.0
|
|
|
1.8
|
|
|
1.2
|
|
|
—
|
|
|
1.4
|
|
(1)
|
The ratio of earnings to fixed charges is computed by dividing earnings, which is the sum of profit (loss) before income taxes and fixed charges, by fixed charges. Fixed charges represent interest expense, amortization of debt issuance costs, and an appropriate portion of rentals representative of the interest factor.
|
(2)
|
In addition to interest expense on long-term debt, also includes interest expenses on short-term borrowings including bank call loans, securities lending, and repurchase agreements which generally have a corresponding asset that generates interest income that substantially offsets or exceeds the aforementioned interest expense.
|
(3)
|
The percent of rent included in the computation is a reasonable approximation of the interest factor.
|
(4)
|
Due to the Company's pre-tax losses in the year ended December 31, 2016, the ratio coverage was less than 1:1 in this periods. The Company would have needed to generate additional earnings of $21.9 million in 2016 to achieve a coverage of 1:1.
|
1.
|
I have reviewed this annual report on Form 10-K of Oppenheimer Holdings Inc.;
|
|
|
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
|
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
|
|
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
|
|
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;
|
|
|
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
|
|
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
|
|
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
|
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
|
|
|
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
|
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Albert G. Lowenthal
|
Name: Albert G. Lowenthal
|
Title: Chief Executive Officer
|
March 2, 2018
|
1.
|
I have reviewed this annual report on Form 10-K of Oppenheimer Holdings Inc.;
|
|
|
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
|
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
|
|
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
|
|
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;
|
|
|
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
|
|
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
|
|
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
|
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
|
|
|
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
|
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Jeffrey J. Alfano
|
Name: Jeffrey J. Alfano
|
Title: Chief Financial Officer
|
March 2, 2018
|