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Supplemental Guarantor Consolidated Financial Statements
9 Months Ended
Sep. 30, 2019
Condensed Financial Information Disclosure [Abstract]  
Supplemental Guarantor Consolidated Financial Statements
Condensed consolidating financial information
On June 23, 2017, the Parent issued in a private offering $200.0 million aggregate principal amount of the Notes. The Company used a portion of the net proceeds from the offering of the Unregistered Notes to redeem in full its Old Notes. See note 10 for further details.
The Notes are jointly and severally and fully and unconditionally guaranteed on a senior basis by E.A. Viner International Co. and Viner Finance Inc. (together, the "Guarantors"), unless released as described below. Each of the Guarantors is 100% owned by the Parent. The indenture for the Notes contains covenants with restrictions which are discussed in note 10. The following condensed consolidating financial information presents the financial position, results of operations and cash flows of the Parent, the Guarantor subsidiaries, the Non-Guarantor subsidiaries and elimination entries necessary to consolidate the Company.
Each Guarantor will be automatically and unconditionally released and discharged upon: the sale, exchange or transfer of the capital stock of a Guarantor and the Guarantor ceasing to be a direct or indirect subsidiary of the Parent if such sale does not constitute an asset sale under the indenture for the Notes or does not constitute an asset sale effected in compliance with the asset sale and merger covenants of the indenture for the Notes; a Guarantor being dissolved or liquidated; a Guarantor being designated unrestricted in compliance with the applicable provisions of the Notes; or the exercise by the Parent of its legal defeasance option or covenant defeasance option or the discharge of the Parent's obligations under the indenture for the Notes in accordance with the terms of such indenture.

OPPENHEIMER HOLDINGS INC.
CONDENSED CONSOLIDATING BALANCE SHEET
AS OF SEPTEMBER 30, 2019
(Expressed in thousands)
Parent
 
Guarantor
subsidiaries
 
Non-guarantor
subsidiaries
 
Eliminations
 
Consolidated
ASSETS
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
4,785

 
$
534

 
$
20,874

 
$

 
$
26,193

Deposits with clearing organizations

 

 
73,730

 

 
73,730

Receivable from brokers, dealers and clearing organizations

 

 
157,734

 

 
157,734

Receivable from customers, net of allowance for credit losses of $941

 

 
754,927

 

 
754,927

Income tax receivable
49,333

 
15,488

 

 
(62,488
)
 
2,333

Securities owned, including amounts pledged of $359,151 at fair value

 
1,327

 
651,867

 

 
653,194

Notes receivable, net of accumulated amortization and allowance for uncollectibles of $35,373 and $3,886, respectively

 

 
43,920

 

 
43,920

Furniture, equipment and leasehold improvements, net of accumulated depreciation of $92,690

 
23,097

 
8,988

 

 
32,085

Right-of-use lease assets, net of accumulated amortization of $19,141

 
158,793

 
6,106

 

 
164,899

Subordinated loan receivable

 
112,558

 

 
(112,558
)
 

Intangible assets

 
400

 
31,700

 

 
32,100

Goodwill

 

 
137,889

 

 
137,889

Other assets
154

 
12,612

 
122,649

 
(10,931
)
 
124,484

Deferred tax assets
103

 
7,020

 
11,963

 
(19,086
)
 

Investment in subsidiaries
692,030

 
761,924

 
24,628

 
(1,478,582
)
 

Intercompany receivables

 
46,325

 
14,092

 
(60,417
)
 

Total assets
$
746,405

 
$
1,140,078

 
$
2,061,067

 
$
(1,744,062
)
 
$
2,203,488

LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
Drafts payable
$

 
$

 
$
17,794

 
$

 
$
17,794

Bank call loans

 

 

 

 

Payable to brokers, dealers and clearing organizations

 

 
364,595

 

 
364,595

Payable to customers

 

 
313,056

 

 
313,056

Securities sold under agreements to repurchase

 

 
253,720

 

 
253,720

Securities sold but not yet purchased, at fair value

 

 
121,880

 

 
121,880

Accrued compensation

 

 
149,862

 

 
149,862

Income tax payable

 
40

 
62,489

 
(62,529
)
 

Accounts payable and other liabilities
2,584

 
90

 
51,500

 
(10,940
)
 
43,234

Lease liabilities

 
202,121

 
6,625

 
2

 
208,748

Senior secured notes, net of debt issuance cost of $533
149,467

 

 

 

 
149,467

Subordinated indebtedness

 

 
112,558

 
(112,558
)
 

Deferred tax liabilities

 

 
33,546

 
(19,041
)
 
14,505

Intercompany payables
27,727

 

 

 
(27,727
)
 

Total liabilities
179,778

 
202,251

 
1,487,625

 
(232,793
)
 
1,636,861

Stockholders' equity
 
 
 
 
 
 
 
 
 
Total stockholders' equity
566,627

 
937,827

 
573,442

 
(1,511,269
)
 
566,627

Total liabilities and stockholders' equity
$
746,405

 
$
1,140,078

 
$
2,061,067

 
$
(1,744,062
)
 
$
2,203,488


OPPENHEIMER HOLDINGS INC.
CONDENSED CONSOLIDATING BALANCE SHEET
AS OF DECEMBER 31, 2018
(Expressed in thousands)
Parent
 
Guarantor
subsidiaries
 
Non-guarantor
subsidiaries
 
Eliminations
 
Consolidated
ASSETS
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
53,525

 
$
3,826

 
$
33,324

 
$

 
$
90,675

Deposits with clearing organizations

 

 
67,678

 

 
67,678

Receivable from brokers, dealers and clearing organizations

 

 
166,493

 

 
166,493

Receivable from customers, net of allowance for credit losses of $886

 

 
720,777

 

 
720,777

Income tax receivable
45,733

 
23,491

 
(702
)
 
(67,508
)
 
1,014

Securities purchased under agreements to resell

 

 
290

 

 
290

Securities owned, including amounts pledged of $517,951 at fair value

 
1,358

 
836,226

 

 
837,584

Notes receivable, net of accumulated amortization and allowance for uncollectibles of $25,109 and $6,800, respectively

 

 
44,058

 

 
44,058

Furniture, equipment and leasehold improvements, net of accumulated depreciation of $89,182

 
20,722

 
8,266

 

 
28,988

Subordinated loan receivable

 
112,558

 

 
(112,558
)
 

Intangible assets

 
400

 
31,700

 

 
32,100

Goodwill

 

 
137,889

 

 
137,889

Other assets
135

 
2,581

 
110,052

 

 
112,768

Deferred tax assets
1

 
455

 
18,494

 
(18,950
)
 

Investment in subsidiaries
661,837

 
546,704

 

 
(1,208,541
)
 

Intercompany receivables
(14,211
)
 
46,840

 
(6,299
)
 
(26,330
)
 

Total assets
$
747,020


$
758,935

 
$
2,168,246

 
$
(1,433,887
)
 
$
2,240,314

LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
Drafts payable
$

 
$

 
$
16,348

 
$

 
$
16,348

Bank call loans

 

 
15,000

 

 
15,000

Payable to brokers, dealers and clearing organizations

 

 
289,207

 

 
289,207

Payable to customers

 

 
336,616

 

 
336,616

Securities sold under agreements to repurchase

 

 
484,218

 

 
484,218

Securities sold but not yet purchased, at fair value

 

 
85,446

 

 
85,446

Accrued compensation

 

 
167,348

 

 
167,348

Accounts payable and other liabilities
163

 
31,653

 
55,823

 
(9
)
 
87,630

Income tax payable
2,440

 
22,189

 
42,878

 
(67,507
)
 

Senior secured notes, net of debt issuance cost of $904
199,096

 

 

 

 
199,096

Subordinated indebtedness

 

 
112,558

 
(112,558
)
 

Deferred tax liabilities

 

 
33,029

 
(18,946
)
 
14,083

Intercompany payables

 
26,334

 

 
(26,334
)
 

Total liabilities
201,699

 
80,176

 
1,638,471

 
(225,354
)
 
1,694,992

Stockholders' equity
 
 
 
 
 
 
 
 
 
Total stockholders' equity
545,322

 
678,759

 
529,774

 
(1,208,533
)
 
545,322

Total liabilities and stockholders' equity
$
747,021

 
$
758,935

 
$
2,168,245

 
$
(1,433,887
)
 
$
2,240,314



OPPENHEIMER HOLDINGS INC.
CONDENSED CONSOLIDATING INCOME STATEMENT
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2019
(Expressed in thousands)
Parent
 
Guarantor
subsidiaries
 
Non-guarantor
subsidiaries
 
Eliminations
 
Consolidated
REVENUES
 
 
 
 
 
 
 
 
 
Commissions
$

 
$

 
$
78,627

 
$

 
$
78,627

Advisory fees

 

 
81,229

 
(342
)
 
80,887

Investment banking

 

 
21,798

 

 
21,798

Bank deposit sweep income

 

 
28,894

 

 
28,894

Interest
59

 
2,059

 
12,299

 
(2,073
)
 
12,344

Principal transactions, net

 
(34
)
 
7,586

 
54

 
7,606

Other
3

 

 
4,635

 
(1
)
 
4,637

Total revenue
62

 
2,025

 
235,068

 
(2,362
)
 
234,793

EXPENSES
 
 
 
 
 
 
 
 
 
Compensation and related expenses
273

 

 
151,012

 
(1
)
 
151,284

Communications and technology
39

 

 
20,833

 

 
20,872

Occupancy and equipment costs

 

 
16,010

 

 
16,010

Clearing and exchange fees

 
(54
)
 
5,469

 
54

 
5,469

Interest
3,038

 

 
10,566

 
(2,073
)
 
11,531

Other
2,087

 
4

 
21,382

 
(342
)
 
23,131

Total expenses
5,437

 
(50
)
 
225,272

 
(2,362
)
 
228,297

Income (loss) before income taxes
(5,375
)
 
2,075

 
9,796

 

 
6,496

Income taxes
(1,364
)
 
558

 
3,353

 

 
2,547

Net income (loss)
(4,011
)
 
1,517

 
6,443

 

 
3,949

 
 
 
 
 
 
 
 
 
 
Equity in earnings of subsidiaries
7,960

 
6,443

 

 
(14,403
)
 

Net income
3,949

 
7,960

 
6,443

 
(14,403
)
 
3,949

Other comprehensive income

 

 
533

 

 
533

Total comprehensive income
$
3,949

 
$
7,960

 
$
6,976

 
$
(14,403
)
 
$
4,482


OPPENHEIMER HOLDINGS INC.
CONDENSED CONSOLIDATING INCOME STATEMENT
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2018
(Expressed in thousands)
Parent
 
Guarantor
subsidiaries
 
Non-guarantor
subsidiaries
 
Eliminations
 
Consolidated
REVENUES
 
 
 
 
 
 
 
 
 
Commissions
$

 
$

 
$
79,678

 
$

 
$
79,678

Advisory fees

 

 
78,490

 
(336
)
 
78,154

Investment banking

 

 
28,328

 

 
28,328

Bank deposit sweep income

 

 
30,053

 

 
30,053

Interest
1

 
2,063

 
13,415

 
(2,076
)
 
13,403

Principal transactions, net

 

 
(19
)
 
3

 
(16
)
Other

 
154

 
8,213

 
(153
)
 
8,214

Total revenue
1

 
2,217

 
238,158

 
(2,562
)
 
237,814

EXPENSES
 
 
 
 
 
 
 
 
 
Compensation and related expenses
343

 

 
152,503

 

 
152,846

Communications and technology
35

 

 
18,567

 

 
18,602

Occupancy and equipment costs

 

 
15,259

 
(153
)
 
15,106

Clearing and exchange fees

 

 
5,378

 

 
5,378

Interest
3,375

 

 
11,616

 
(2,076
)
 
12,915

Other
218

 
270

 
25,658

 
(333
)
 
25,813

Total expenses
3,971

 
270

 
228,981

 
(2,562
)
 
230,660

Income (loss) before income taxes
(3,970
)
 
1,947

 
9,177

 

 
7,154

Income taxes
(976
)
 
479

 
2,580

 

 
2,083

Net income (loss)
(2,994
)
 
1,468

 
6,597

 

 
5,071

 
 
 
 
 
 
 
 
 
 
Equity in earnings of subsidiaries
8,065

 
6,597

 

 
(14,662
)
 

Net income
5,071

 
8,065

 
6,597

 
(14,662
)
 
5,071

Other comprehensive income

 

 
99

 

 
99

Total comprehensive income
$
5,071


$
8,065


$
6,696


$
(14,662
)

$
5,170



OPPENHEIMER HOLDINGS INC.
CONDENSED CONSOLIDATING INCOME STATEMENT
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2019
(Expressed in thousands)
Parent
 
Guarantor
subsidiaries
 
Non-guarantor
subsidiaries
 
Eliminations
 
Consolidated
REVENUES
 
 
 
 
 
 
 
 
 
Commissions
$

 
$

 
$
238,932

 
$

 
$
238,932

Advisory fees

 

 
236,278

 
(1,037
)
 
235,241

Investment banking

 

 
81,847

 

 
81,847

Bank deposit sweep income

 

 
94,692

 

 
94,692

Interest
234

 
6,181

 
38,426

 
(6,220
)
 
38,621

Principal transactions, net

 
121

 
21,980

 
(12
)
 
22,089

Other
3

 
2

 
26,070

 
1

 
26,076

Total revenue
237

 
6,304

 
738,225

 
(7,268
)
 
737,498

EXPENSES
 
 
 
 
 
 
 
 
 
Compensation and related expenses
1,098

 

 
466,330

 
(6
)
 
467,422

Communications and technology
130

 

 
61,327

 

 
61,457

Occupancy and equipment costs

 
(1
)
 
46,855

 
2

 
46,856

Clearing and exchange fees

 

 
16,479

 

 
16,479

Interest
9,788

 

 
34,141

 
(6,220
)
 
37,709

Other
2,637

 
248

 
65,795

 
(1,044
)
 
67,636

Total expenses
13,653

 
247

 
690,927

 
(7,268
)
 
697,559

Income (loss) before income taxes
(13,416
)

6,057


47,298




39,939

Income taxes
(3,702
)
 
1,994

 
14,129

 

 
12,421

Net income (loss)
(9,714
)
 
4,063

 
33,169

 

 
27,518

 
 
 
 
 
 
 
 
 
 
Equity in earnings of subsidiaries
37,232

 
33,169

 

 
(70,401
)
 

Net income
27,518

 
37,232

 
33,169

 
(70,401
)
 
27,518

Other comprehensive income

 

 
1,457

 

 
1,457

Total comprehensive income
$
27,518


$
37,232


$
34,626


$
(70,401
)

$
28,975


OPPENHEIMER HOLDINGS INC.
CONDENSED CONSOLIDATING INCOME STATEMENT
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2018
(Expressed in thousands)
Parent
 
Guarantor
subsidiaries
 
Non-guarantor
subsidiaries
 
Eliminations
 
Consolidated
REVENUES
 
 
 
 
 
 
 
 
 
Commissions
$

 
$

 
$
245,935

 
$

 
$
245,935

Advisory fees

 

 
233,953

 
(981
)
 
232,972

Investment banking

 

 
84,442

 

 
84,442

Bank deposit sweep income

 

 
84,203

 

 
84,203

Interest
4

 
6,183

 
38,732

 
(6,233
)
 
38,686

Principal transactions, net

 

 
9,149

 
(39
)
 
9,110

Other

 
345

 
19,549

 
(342
)
 
19,552

Total revenue
4

 
6,528

 
715,963

 
(7,595
)
 
714,900

EXPENSES
 
 
 
 
 
 
 
 
 
Compensation and related expenses
1,191

 

 
456,630

 

 
457,821

Communications and technology
123

 

 
55,164

 

 
55,287

Occupancy and equipment costs

 

 
45,777

 
(342
)
 
45,435

Clearing and exchange fees

 

 
17,254

 

 
17,254

Interest
10,125

 

 
28,895

 
(6,233
)
 
32,787

Other
883

 
1,372

 
75,789

 
(1,020
)
 
77,024

Total expenses
12,322

 
1,372

 
679,509

 
(7,595
)
 
685,608

Income (loss) before income taxes
(12,318
)
 
5,156

 
36,454

 

 
29,292

Income taxes
(3,081
)
 
1,112

 
10,630

 

 
8,661

Net income (loss)
(9,237
)
 
4,044

 
25,824

 

 
20,631

 
 
 
 
 
 
 
 
 
 
Equity in earnings of subsidiaries
29,868

 
25,824

 

 
(55,692
)
 

Net income
20,631

 
29,868

 
25,824

 
(55,692
)
 
20,631

Other comprehensive loss

 

 
(880
)
 

 
(880
)
Total comprehensive income
$
20,631

 
$
29,868

 
$
24,944

 
$
(55,692
)
 
$
19,751




OPPENHEIMER HOLDINGS INC.
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2019
(Expressed in thousands)
Parent
 
Guarantor
subsidiaries
 
Non-guarantor
subsidiaries
 
Eliminations
 
Consolidated
Cash flows from operating activities:
 
 
 
 
 
 
 
 
 
Cash provided by (used in) operating activities
$
16,687

 
$
(3,292
)
 
$
9,502

 
$

 
$
22,897

Cash flows from investing activities:
 
 
 
 
 
 
 
 
 
Purchase of furniture, equipment and leasehold improvements

 

 
(8,672
)
 

 
(8,672
)
Proceeds from the settlement of Company-owned life insurance

 

 
1,720

 

 
1,720

Cash used in investing activities

 

 
(6,952
)
 

 
(6,952
)
Cash flows from financing activities:
 
 
 
 
 
 
 
 
 
Cash dividends paid on Class A non-voting and Class B voting common stock
(4,408
)
 

 

 

 
(4,408
)
Issuance of Class A non-voting common stock
83

 

 

 

 
83

Repurchase of Class A non-voting common stock
(8,400
)
 

 

 

 
(8,400
)
Redemption of senior secured notes

(50,000
)
 

 

 

 
(50,000
)
Debt redemption costs
(1,688
)
 

 

 

 
(1,688
)
Payments for employee taxes withheld related to vested share-based awards
(1,014
)
 

 

 

 
(1,014
)
Decrease in bank call loans, net

 

 
(15,000
)
 

 
(15,000
)
Cash used in financing activities
(65,427
)
 

 
(15,000
)
 

 
(80,427
)
Net increase (decrease) in cash and cash equivalents
(48,740
)
 
(3,292
)
 
(12,450
)
 

 
(64,482
)
Cash and cash equivalents, beginning of the period
53,525

 
3,826

 
33,324

 

 
90,675

Cash and cash equivalents, end of the period
$
4,785

 
$
534

 
$
20,874

 
$

 
$
26,193


OPPENHEIMER HOLDINGS INC.
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2018
(Expressed in thousands)
Parent
 
Guarantor
subsidiaries
 
Non-guarantor
subsidiaries
 
Eliminations
 
Consolidated
Cash flows from operating activities:
 
 
 
 
 
 
 
 
 
Cash provided by (used in) operating activities
$
(131
)
 
$
1,337

 
$
117,073

 
$

 
$
118,279

Cash flows from investing activities:
 
 
 
 
 
 
 
 

Purchase of furniture, equipment and leasehold improvements

 

 
(6,654
)
 

 
(6,654
)
Purchase of intangible assets

 
(400
)
 

 

 
(400
)
Proceeds from the settlement of Company-owned life insurance

 

 
284

 

 
284

Cash used in investing activities

 
(400
)
 
(6,370
)
 

 
(6,770
)
Cash flows from financing activities:

 

 

 

 

Cash dividends paid on Class A non-voting and Class B voting common stock
(4,373
)
 

 

 

 
(4,373
)
Issuance of Class A non-voting common stock
70

 

 

 

 
70

Payments for employee taxes withheld related to vested share-based awards
(2,529
)
 

 

 

 
(2,529
)
Decrease in bank call loans, net

 

 
(115,300
)
 

 
(115,300
)
Cash used in financing activities
(6,832
)
 

 
(115,300
)
 

 
(122,132
)
Net increase (decrease) in cash and cash equivalents
(6,963
)
 
937

 
(4,597
)
 

 
(10,623
)
Cash and cash equivalents, beginning of the period
7,442

 
3,716

 
36,996

 

 
48,154

Cash and cash equivalents, end of the period
$
479

 
$
4,653

 
$
32,399

 
$

 
$
37,531