Supplemental Guarantor Consolidated Financial Statements

6 Months Ended

Jun. 30, 2020

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 11 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 11. 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 JUNE 30, 2020

(Expressed in thousands)	Parent			Guarantor subsidiaries			Non-guarantor subsidiaries			Eliminations			Consolidated
ASSETS
Cash and cash equivalents	$	267		$	185		$	50,785		$	—		$	51,237
Deposits with clearing organizations	—			—			90,536			—			90,536
Receivable from brokers, dealers and clearing organizations				—			315,947			—			315,947
Receivable from customers, net of allowance for credit losses of $493	—			—			860,140			—			860,140
Income tax receivable	44,125			15,371			(702		)	(57,005		)	1,789
Securities owned, including amounts pledged of $357,323 at fair value	—			1,422			500,607			—			502,029
Notes receivable, net of accumulated amortization and allowance for uncollectibles of $34,022 and $3,903, respectively	—			—			44,114			—			44,114
Furniture, equipment and leasehold improvements, net of accumulated depreciation of $98,885	—			21,761			8,657			—			30,418
Right-of-use lease assets, net of accumulated amortization of $37,597	—			155,192			5,166			—			160,358
Subordinated loan receivable	209			112,558			—			(112,767		)	—
Intangible assets	—			400			31,700			—			32,100
Goodwill	—			—			137,889			—			137,889
Other assets	179			1,368			136,216			(3		)	137,760
Deferred tax assets	—			(26		)	(2,414		)	2,440			—
Investment in subsidiaries	757,878			620,581			(4		)	(1,378,455		)	—
Intercompany receivables	(50,836		)	72,619			4,553			(26,336		)	—
Total assets	$	751,822		$	1,001,431		$	2,183,190		$	(1,572,126	)	$	2,364,317
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Drafts payable	$	—		$	—		$	37,374		$	—		$	37,374
Bank call loans	—			—			13,000			—			13,000
Payable to brokers, dealers and clearing organizations	—			—			216,111			—			216,111
Payable to customers	—			—			416,914			—			416,914
Securities sold under agreements to repurchase	—			—			154,155			—			154,155
Securities sold but not yet purchased, at fair value	—			—			356,589			—			356,589
Accrued compensation	—			—			146,988			—			146,988
Income tax payable	2,440			22,189			32,376			(57,005		)	—
Accounts payable and other liabilities	55			(10,305		)	53,449			20			43,219
Lease liabilities	—			196,604			5,424			—			202,028
Senior secured notes, net of debt issuance cost of $384	148,190			—			—			—			148,190
Subordinated indebtedness	—			—			112,558			(112,558		)	—
Deferred tax liabilities	—			(7,377		)	33,546			2,443			28,612
Intercompany payables	—			26,335			—			(26,335		)	—
Total liabilities	150,685			227,446			1,578,484			(193,435		)	1,763,180
Stockholders' equity
Total stockholders' equity	601,137			773,985			604,706			(1,378,691		)	601,137
Total liabilities and stockholders' equity	$	751,822		$	1,001,431		$	2,183,190		$	(1,572,126	)	$	2,364,317

OPPENHEIMER HOLDINGS INC.

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF DECEMBER 31, 2019

(Expressed in thousands)	Parent		Guarantor subsidiaries		Non-guarantor subsidiaries		Eliminations			Consolidated
ASSETS
Cash and cash equivalents	$	4,811	$	2,179	$	72,560	$	—		$	79,550
Deposits with clearing organizations	—		—		48,415		—			48,415
Receivable from brokers, dealers and clearing organizations	—		—		158,231		5,062			163,293
Receivable from customers, net of allowance for credit losses of $451	—		—		796,934		—			796,934
Income tax receivable	42,556		16,469		—		(53,855		)	5,170
Securities owned, including amounts pledged of $357,120 at fair value	—		1,352		798,367		—			799,719
Notes receivable, net of accumulated amortization and allowance for uncollectibles of $38,355 and $3,673, respectively	—		—		43,670		—			43,670
Furniture, equipment and leasehold improvements, net of accumulated depreciation of $94,773	—		22,537		8,840		—			31,377
Subordinated loan receivable	209		112,558		—		(112,767		)	—
Right-of-use lease assets, net of accumulated amortization of $25,186	—		153,780		6,517		—			160,297
Intangible assets	—		400		31,700		—			32,100
Goodwill	—		—		137,889		—			137,889
Other assets	154		11,798		164,821		(10,432		)	166,341
Deferred tax assets	4		7,048		2,449		(9,501		)	—
Investment in subsidiaries	697,093		763,990		24,656		(1,485,739		)	—
Intercompany receivables	2,875		67,923		—		(70,798		)	—
Total assets	$	747,702	$	1,160,034	$	2,295,049	$	(1,738,030	)	$	2,464,755
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Payable to brokers, dealers and clearing organizations	$	—	$	—	$	520,975	$	—		$	520,975
Payable to customers	—		—		334,735		—			334,735
Securities sold under agreements to repurchase	—		—		287,265		—			287,265
Securities sold but not yet purchased, at fair value	—		—		100,571		—			100,571
Accrued compensation	—		—		207,358		—			207,358
Accounts payable and other liabilities	5,166		75		50,049		(10,565		)	44,725
Lease liabilities	—		196,234		6,906		—			203,140
Income tax payable	—		40		703		(743		)	—
Senior secured notes, net of debt issuance cost of $485	149,515		—		—		—			149,515
Subordinated indebtedness	—		—		112,558		(112,558		)	—
Deferred tax liabilities	—		—		33,546		(9,797		)	23,749
Intercompany payables	299		—		—		(299		)	—
Total liabilities	154,980		196,349		1,654,666		(133,962		)	1,872,033
Stockholders' equity
Total stockholders' equity	592,722		963,685		640,383		(1,604,068		)	592,722
Total liabilities and stockholders' equity	$	747,702	$	1,160,034	$	2,295,049	$	(1,738,030	)	$	2,464,755

OPPENHEIMER HOLDINGS INC.

CONDENSED CONSOLIDATING INCOME STATEMENT

FOR THE THREE MONTHS ENDED JUNE 30, 2020

(Expressed in thousands)	Parent			Guarantor subsidiaries		Non-guarantor subsidiaries		Eliminations			Consolidated
REVENUES
Commissions	$	—		$	—	$	101,636	$	—		$	101,636
Advisory fees	—			—		76,330		(349		)	75,981
Investment banking	—			—		46,186		—			46,186
Bank deposit sweep income	—			—		7,122		—			7,122
Interest	1			2,058		6,240		(2,079		)	6,220
Principal transactions, net	—			65		11,999		—			12,064
Other	9			—		15,512		—			15,521
Total revenue	10			2,123		265,025		(2,428		)	264,730
EXPENSES
Compensation and related expenses	306			—		179,288		—			179,594
Communications and technology	43			—		21,281		—			21,324
Occupancy and equipment costs	—			—		15,334		—			15,334
Clearing and exchange fees	—			—		6,191		—			6,191
Interest	2,506			—		2,462		(2,078		)	2,890
Other	219			3		16,261		(350		)	16,133
Total expenses	3,074			3		240,817		(2,428		)	241,466
Pre-tax income (loss)	(3,064		)	2,120		24,208		—			23,264
Income taxes	(826		)	546		5,895		—			5,615
Net income (loss)	(2,238		)	1,574		18,313		—			17,649
Equity in earnings of subsidiaries	19,887			18,313		—		(38,200		)	—
Net income	17,649			19,887		18,313		(38,200		)	17,649
Other comprehensive income	—			—		480		—			480
Total comprehensive income	$	17,649		$	19,887	$	18,793	$	(38,200	)	$	18,129

OPPENHEIMER HOLDINGS INC.

CONDENSED CONSOLIDATING INCOME STATEMENT

FOR THE THREE MONTHS ENDED JUNE 30, 2019

(Expressed in thousands)	Parent			Guarantor subsidiaries		Non-guarantor subsidiaries		Eliminations			Consolidated
REVENUES
Commissions	$	—		$	—	$	80,896	$	—		$	80,896
Advisory fees	—			—		81,067		(360		)	80,707
Investment banking	—			—		32,006		—			32,006
Bank deposit sweep income	—			—		31,830		—			31,830
Interest	91			2,060		13,473		(2,074		)	13,550
Principal transactions, net	—			40		3,005		—			3,045
Other	—			1		8,899		1			8,901
Total revenue	91			2,101		251,176		(2,433		)	250,935
EXPENSES
Compensation and related expenses	380			—		155,402		1			155,783
Communications and technology	52			—		20,447		—			20,499
Occupancy and equipment costs	—			—		15,573		—			15,573
Clearing and exchange fees	—			—		5,678		—			5,678
Interest	3,375			—		11,890		(2,073		)	13,192
Other	234			122		22,824		(361		)	22,819
Total expenses	4,041			122		231,814		(2,433		)	233,544
Pre-tax income (loss)	(3,950		)	1,979		19,362		—			17,391
Income taxes	(995		)	510		5,501		—			5,016
Net income (loss)	(2,955		)	1,469		13,861		—			12,375
Equity in earnings of subsidiaries	15,330			13,861		—		(29,191		)	—
Net income	12,375			15,330		13,861		(29,191		)	12,375
Other comprehensive income	—			—		361		—			361
Total comprehensive income	$	12,375		$	15,330	$	14,222	$	(29,191	)	$	12,736

OPPENHEIMER HOLDINGS INC.

CONDENSED CONSOLIDATING INCOME STATEMENT

FOR THE SIX MONTHS ENDED JUNE 30, 2020

(Expressed in thousands)	Parent			Guarantor subsidiaries		Non-guarantor subsidiaries			Eliminations			Consolidated
REVENUES
Commissions	$	—		$	—	$	204,885		$	—		$	204,885
Advisory fees	—			—		162,848			(703		)	162,145
Investment banking	—			—		71,914			—			71,914
Bank deposit sweep income	—			—		25,948			—			25,948
Interest	2			4,116		17,138			(4,146		)	17,110
Principal transactions, net	—			49		11,147			—			11,196
Other	95			—		6,211			(4		)	6,302
Total revenue	97			4,165		500,091			(4,853		)	499,500
EXPENSES
Compensation and related expenses	620			—		336,650			—			337,270
Communications and technology	83			—		41,132			—			41,215
Occupancy and equipment costs	—			—		31,412			—			31,412
Clearing and exchange fees	—			—		11,850			—			11,850
Interest	5,036			—		8,550			(4,146		)	9,440
Other	452			5		35,076			(707		)	34,826
Total expenses	6,191			5		464,670			(4,853		)	466,013
Pre-tax income (loss)	(6,094		)	4,160		35,421			—			33,487
Income taxes	(1,566		)	1,095		8,491			—			8,020
Net income (loss)	(4,528		)	3,065		26,930			—			25,467
Equity in earnings of subsidiaries	29,995			26,930		—			(56,925		)	—
Net income	25,467			29,995		26,930			(56,925		)	25,467
Other comprehensive income	—			—		(57		)	—			(57		)
Total comprehensive income	$	25,467		$	29,995	$	26,873		$	(56,925	)	$	25,410

OPPENHEIMER HOLDINGS INC.

CONDENSED CONSOLIDATING INCOME STATEMENT

FOR THE SIX MONTHS ENDED JUNE 30, 2019

(Expressed in thousands)	Parent			Guarantor subsidiaries		Non-guarantor subsidiaries		Eliminations			Consolidated
REVENUES
Commissions	$	—		$	—	$	160,305	$	—		$	160,305
Advisory fees	—			—		155,049		(695		)	154,354
Investment banking	—			—		60,049		—			60,049
Bank deposit sweep income	—			—		65,798		—			65,798
Interest	175			4,122		26,127		(4,147		)	26,277
Principal transactions, net	—			101		14,394		(12		)	14,483
Other	—			2		21,436		1			21,439
Total revenue	175			4,225		503,158		(4,853		)	502,705
EXPENSES
Compensation and related expenses	825			—		315,318		(5		)	316,138
Communications and technology	91			—		40,494		—			40,585
Occupancy and equipment costs	—			—		30,846		—			30,846
Clearing and exchange fees	—			—		11,010		—			11,010
Interest	6,750			—		23,575		(4,147		)	26,178
Other	550			244		44,412		(701		)	44,505
Total expenses	8,216			244		465,655		(4,853		)	469,262
Pre-tax income (loss)	(8,041		)	3,981		37,503		—			33,443
Income taxes	(2,338		)	1,436		10,776		—			9,874
Net income (loss)	(5,703		)	2,545		26,727		—			23,569
Equity in earnings of subsidiaries	29,272			26,726		—		(55,998		)	—
Net income	23,569			29,271		26,727		(55,998		)	23,569
Other comprehensive income	—			—		924		—			924
Total comprehensive income	$	23,569		$	29,271	$	27,651	$	(55,998	)	$	24,493

OPPENHEIMER HOLDINGS INC.

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2020

(Expressed in thousands)	Parent			Guarantor subsidiaries			Non-guarantor subsidiaries			Eliminations		Consolidated
Cash flows from operating activities:
Cash provided by (used in) operating activities	$	17,695		$	(1,994	)	$	(31,614	)	$	—	$	(15,913	)
Cash flows from investing activities:
Purchase of furniture, equipment and leasehold improvements	—			—			(3,161		)	—		(3,161		)
Cash used in investing activities	—			—			(3,161		)	—		(3,161		)
Cash flows from financing activities:
Cash dividends paid on Class A non-voting and Class B voting common stock	(3,089		)	—			—			—		(3,089		)
Repurchase of Class A non-voting common stock for cancellation	(12,266		)	—			—			—		(12,266		)
Repurchase of senior secured notes	(1,426		)	—			—			—		(1,426		)
Payments for employee taxes withheld related to vested share-based awards	(5,458		)	—			—			—		(5,458		)
Increase in bank call loans, net	—			—			13,000			—		13,000
Cash provided by (used in) financing activities	(22,239		)	—			13,000			—		(9,239		)
Net decrease in cash and cash equivalents	(4,544		)	(1,994		)	(21,775		)	—		(28,313		)
Cash and cash equivalents, beginning of the period	4,811			2,179			72,560			—		79,550
Cash and cash equivalents, end of the period	$	267		$	185		$	50,785		$	—	$	51,237

OPPENHEIMER HOLDINGS INC.

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2019

(Expressed in thousands)	Parent			Guarantor subsidiaries			Non-guarantor subsidiaries			Eliminations		Consolidated
Cash flows from operating activities:
Cash used in operating activities	$	(5,060	)	$	(3,351	)	$	(29,580	)	$	—	$	(37,991	)
Cash flows from investing activities:
Purchase of furniture, equipment and leasehold improvements	—			—			(6,941		)	—		(6,941		)
Cash used in investing activities	—			—			(6,246		)	—		(6,246		)
Cash flows from financing activities:
Cash dividends paid on Class A non-voting and Class B voting common stock	(2,865		)	—			—			—		(2,865		)
Issuance of Class A non-voting common stock	(6,352		)	—			—			—		(6,352		)
Payments for employee taxes withheld related to vested share-based awards	(1,014		)	—			—			—		(1,014		)
Decrease in bank call loans, net	—			—			35,100			—		35,100
Cash provided by (used in) financing activities	(10,231		)	—			35,100			—		24,869
Net decrease in cash and cash equivalents	(15,291		)	(3,351		)	(726		)	—		(19,368		)
Cash and cash equivalents, beginning of the period	53,526			3,826			33,323			—		90,675
Cash and cash equivalents, end of the period	$	38,235		$	475		$	32,597		$	—	$	71,307