What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-02-27 compared with 2024-03-01 · 136 added, 198 removed, 275 unchanged (55% of the section changed)

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As of December 31, 2024, we provided our services from 88 offices in 25 states located throughout the United States, offices in Puerto Rico, Tel Aviv, Israel, Hong Kong, China, London, England, St.

Helier, Isle of Jersey, Portugal and Geneva, Switzerland.

Helier, Isle of Jersey and Geneva, Switzerland.

The Company provides investment advisory services through OAM and Oppenheimer Investment Management LLC ("OIM") and Oppenheimer's financial advisor directed programs.

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CAUA includes AUM and the other assets for which the firm provides services.

We also provide trust services and products through Oppenheimer Trust Company of Delaware and discount brokerage services through Freedom Investments, Inc.

Through OPY Credit Corp., we conduct secondary trading activities related to the purchase and sale of loans, primarily on a riskless principal basis.

We also provide trust services and products through Oppenheimer Trust Company of Delaware Inc.

and discount brokerage services through Freedom Investments, Inc.

Through OPY Credit Corp., we conduct secondary trading activities related to the purchase and sale of loans and trade claims, primarily on a riskless principal basis.

At December 31, 2024, the Company employed 3,018 employees (2,977 full-time and 41 part-time), of whom 931 were financial advisors.

We are focused on growing our private client and asset management businesses through strategic additions of experienced financial advisors in our existing branch system and employment of experienced money management personnel in our asset management business as well as deploying our capital for expansion through targeted acquisitions.

We are focused on growing our wealth management business through strategic additions of experienced financial advisors in our existing branch system and employment of experienced money management personnel in our asset management business as well as deploying our capital for expansion through targeted acquisitions.

We are increasingly creating and investing in private market opportunities on our own behalf and on behalf of qualified clients.

We are also focused on opportunities in our capital markets businesses where we can employ experienced personnel and/or small units that will improve our ability to attract institutional clients in both equities and fixed income without significantly raising our risk profile.

We are continuously reviewing ways in which we can increase security around our data and our platform as the risks of cybercrime increase.

We are also focused on opportunities in our capital market businesses, including integrating new technology platforms to expand the suite of services offered to our clients and onboarding experienced personnel and/or small units that will improve our ability to attract institutional clients in both equities and fixed income without significantly raising our risk profile.

In investment banking, we are committed to growing our footprint by adding experienced bankers within our existing industry practices as well as new industry practices where we believe we can be successful.

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The Company's long-term growth plan is to continue to expand existing offices by hiring experienced professionals as well as expand through the purchase of operating branch offices from other broker-dealers or the opening of new branch offices in attractive locations, and to continue to grow and develop the existing trading, investment banking, investment advisory and other divisions.

We recognize employee work habits have changed in a post-pandemic world.

As a result, we are continuously reviewing our physical footprint on lease renewals, and in many cases reducing office size and configuration.

We are committed to continuing to improve our capabilities to ensure compliance with industry regulations, support client service and expand our wealth management and capital markets capabilities.

We recognize the importance of compliance with applicable regulatory requirements and are committed to performing rigorous and ongoing assessments of our compliance and risk management effort, and investing in people and programs, while providing a platform with first class investment programs and services.

The Company is also reviewing its full service business model to determine the opportunities available to build or acquire closely related businesses in areas where others have shown some success.

We recognize the importance of

compliance with applicable regulatory requirements and are committed to performing rigorous and ongoing assessments of our compliance and risk management effort, and investing in people and programs, while providing a platform with first class investment programs and services.

The Company also reviews its full service business model to determine the opportunities available to build or acquire closely related businesses in areas where others have shown some success.

Equally important is the search for viable acquisition candidates.

Our long-term intention is to pursue growth by acquisition where we can find a comfortable match in terms of corporate goals and personnel at a price that would provide our shareholders with incremental value.

Our long-term intention is to pursue growth by acquisition where we can find a comfortable match in terms of corporate goals and personnel at a price that would provide our stockholders with incremental value.

We review potential acquisition opportunities from time to time with the aim of fulfilling the Company's strategic goals, while evaluating and managing our existing businesses.

In addition, the Company may from time to time make minority private investments out of excess capital in allied or unrelated businesses with the goal of either syndicating the investment to eligible clients or retaining ownership because we believe them to be an attractive investment.

In addition, the Company may from time to time make an acquisition of 100% of a business or make minority private investments out of excess capital in allied or unrelated businesses with the goal of either syndicating the investment to eligible clients or retaining ownership because we believe them to be an attractive investment.

Impact of Change in Short-term Interest Rates

After increasing rates by 425 basis points in 2022, the Federal Reserve (the “FED”) slowed both the pace and magnitude of rate increases in 2023.

To prevent overtightening in the midst of conflicting economic data and stress within the regional banking sector at the outset of the year, the FED proceeded cautiously and enacted four federal funds rate increases – 25 basis points each – between its February and July meetings.

The FED paused on further tightening actions for the remainder of 2023, largely due to improved inflationary readings, resulting in the target federal funds rate remaining at 5.25% to 5.50% as of December 31, 2023.

The FED’s forecast currently projects three rate decreases during 2024, though this is subject to change.

Increases in the federal funds rate will be favorable to the Company’s interest-based revenues though any future federal funds rate decreases may result in reductions to these revenues.

While increases in interest rates will increase fees the Company earns from FDIC insured deposits of clients through a program offered by the Company, such increases may be offset to an extent if the cash sweep balances continue to decrease as clients seek higher-yielding investments.

These rate increases will also increase the rates the Company charges on margin balances which have a positive impact on our earnings.

2023 Israel-Hamas War

After decreasing the federal funds rate for the first time in nearly 14 months with a 50 bps reduction in September of 2024, the Federal Reserve (the “FED”) enacted two separate 0.25% rate cuts in the fourth quarter of 2024, lowering the target fed funds range to 4.25% - 4.50% – a full percent below its recent peak.

Projections of the federal funds rate released by the FED after its December meeting indicate that they expect two additional rate cuts in 2025, which is reduced from previous forecasts and reflective of the FED’s stated intention of proceeding with a cautious approach dependent on inflation and employment data.

Recent employment figures reflect a stronger economy than earlier projected and may impact future interest rate decisions.

Plans announced by the incoming administration including actions on tariffs and immigration status of undocumented persons may tend to weaken economic activity and could also impact future interest rate decisions.

Potential decreases to the federal funds rate may impact our interest-based revenues.

While decreases in interest rates will lower fees the Company earns from FDIC-insured deposits of clients through a program offered by the Company, such decreases may be offset to a degree if the cash sweep balances increase as clients find fewer higher-yielding alternatives to deploy these balances.

Future rate decreases will also reduce the rates the Company charges on customer margin loans and earns on other interest-sensitive assets, which will have a negative impact on our earnings.

Israel-Hamas War and Conflict with Hezbollah and Iran

On October 7, 2023, Hamas initiated an unprovoked invasion of Israel from the Gaza Strip, resulting in thousands of casualties.

Israel formally declared war on Hamas in response to the attack and initiated several military operations in an effort to clear militants from the area.

The war has triggered a humanitarian crisis, with hundreds of thousands displaced from their homes and many without food, water or electricity.

There remains a risk that the conflict could expand into a wider regional war, which could have an adverse impact on the worldwide economy, financial markets and thus on our business.

At this time, the conflict has not yet had a material impact on our business operations in Israel or elsewhere.

“Dutch Auction” Tender Offer

On July 6, 2023, the Company completed its “Dutch Auction” tender offer.

A total of 437,183 shares of the Company's Class A Stock, par value $0.001 per share were properly tendered at a purchase price of $40.00 per share for an aggregate cost of approximately $17.49 million.

The purpose of the tender offer, among others, was to assure that sufficient liquidity existed for our stockholders that might have been required to sell shares of Class A Stock when they were removed from the Russell 2000 and 3000 indices at the end of June 2023.

The war has now finished its second year and has seen a significant escalation in a longstanding conflict between Israel and Hezbollah, the Lebanese-based militant group.

The conflict was further intensified in 2024 by the direct entry of Iran, which launched a missile attack on Israel.

Despite a recently announced ceasefire, there remains a risk that these conflicts could expand into a wider regional war which could have an adverse impact on the worldwide economy, financial markets and thus on our business.

At this time, these conflicts have not yet had a material impact on our business operations in Israel or elsewhere.

EXECUTIVE SUMMARY

The Company generated profitable results for the full year 2023 despite mixed macroeconomic conditions and significantly higher legal and regulatory costs.

The costs of a particular legal matter (which we now believe is mostly behind us from a financial point of view) and, the impact of a non-recurring accrual related to an SEC industry-wide focus on ‘off-channel communications’ was approximately $70 million for the year.

But for these, the Company would have produced a stronger return despite the ongoing drought in Investment Banking activity.

The year began with markets anticipating either a mild recession or a "soft landing" with nominal growth and high but declining inflation driven by a FED committed to interest rate increases.

The economic outlook gradually improved as inflation receded, unemployment held steady and the FED signaled potential rate cuts in 2024.

The financial markets improved along with the economic outlook, as what began as a narrow rally focused on generative A.I.

stocks eventually broadened into an “everything rally” by the year’s end, with most major indices ending the year at or near their all-time highs in spite of continued geopolitical tensions in Ukraine and Gaza.

Throughout these evolving market conditions, our diversified businesses registered a year-over-year increase in total revenues.

Higher short-term interest rates propelled record high full-year bank deposit sweep and margin interest income in our Wealth Management business as well as large increases in fixed income sales and trading revenues in our Capital Markets segment.

The rising markets and addition of new client assets also drove improvements in the valuation of client assets under management throughout the year, though asset-based advisory fees did not fully recover to 2022 levels.

Investment banking revenues continue to be adversely impacted by reduced corporate transactions and a moribund IPO environment.

The Company ended the year with a strong balance sheet and record high book value per share levels.

Additionally, the Class A share count is significantly reduced from the prior year due to share repurchases during the year.

T he firm registered strong results of operations for the year ended 2024 on the back of record high revenue generated by our diverse businesses.

Our reported results were negatively impacted (with full year expense totaling $32.6 million pre-tax) by the increase in our stock price in 2024 and its conversion to expense in certain liability awards previously made to employees, making the recent recognition of our stock by investors, a mixed blessing.

Our results were buoyed by an equities market that had a strong increase in popular averages, as lower interest rates and a strong domestic economy powered the S&P 500 to 57 new record closes and its best consecutive years in over two decades.

Equity markets were led by significant increases in the performance of the “Magnificent Seven,” propelled by the expectation of the impact of A.I.

on the economy in future years.

Most economic indicators currently suggest that the economy is well on its way to achieving a “soft landing” as we move further into 2025.

The continued rise of the markets drove the outstanding results shown in our Wealth Management business.

Asset-based advisory fees, in particular, grew significantly from the prior year in large part due to AUM reaching a fourth-consecutive all-time high at year-end.

Retail trading volumes also remained elevated throughout the year, boosting transaction-based commissions.

However, these positive drivers were offset to a degree by both lower interest-sensitive sweep income owing to

lower average sweep balances, as well as higher share-based compensation expenses associated with stock appreciation rights granted to financial advisors.

In the fourth quarter of 2024 alone, we recognized $20.5 million of expense related to these stock appreciation rights due to the significant increase in share price of our Class A non-voting common stock.

In comparison, we recognized a relatively modest expense of $4.3 million in the fourth quarter of 2023.

In our Capital Markets businesses, we saw our 2024 investment banking results benefit from a somewhat improved market environment which drove higher new issuance and transaction activity levels when compared to the prior year.

Though our revenues increased in 2024, we believe that capital markets conditions (and related transaction volumes) have yet to reach their full potential and expect that our business will stand to benefit when they do.

Our institutional trading business also performed quite well in 2024, with higher sales and trading revenues attributed to greater volumes and increased market share.

Overall, we are extremely pleased with the accomplishments that we achieved in 2024.

We ended the year with record revenues, AUM, stockholders’ equity and book value per share levels, and a significantly de-levered balance sheet after completing the redemption of our senior secured notes earlier in the fourth quarter of 2024.

We remain optimistic about our future and look forward to continuing to serve our clients.

RESULTS OF OPERATIONS

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Fiscal 2024 compared to Fiscal 2023

• Commission revenue was $409.7 million for the year ended December 31, 2024, an increase of 17.3% compared with $349.2 million for the year ended December 31, 2023 due to higher overall client activity.

• Advisory fees were $483.4 million for the year ended December 31, 2024, an increase of 16.3% compared with $415.7 million for the year ended December 31, 2023 due to higher management fees from advisory programs attributable to record billable AUM levels.

• Investment banking revenue was $176.4 million for the year ended December 31, 2024, an increase of 50.0% compared with $117.7 million for the year ended December 31, 2023 due to higher transaction and new issuance volumes.

• Bank deposit sweep income was $138.8 million for the year ended December 31, 2024, a decrease of 19.7% compared with $172.8 million for the year ended December 31, 2023 due to lower cash sweep balances and lower short-term interest rates.

• Interest revenue was $135.5 million for the year ended December 31, 2024, an increase of 29.6% compared with $104.6 million for the year ended December 31, 2023 primarily due to higher average margin loan balances and security inventories.

• Principal transactions revenue was $54.7 million for the year ended December 31, 2024, a decrease of 16.3% compared with $65.3 million for the year ended December 31, 2023 primarily due to lower realized and unrealized gains from government securities trading activities.

• Other revenue was $33.9 million for the year ended December 31, 2024, an increase of 44.1% compared to $23.5 million for the year ended December 31, 2023 primarily due to higher death benefit proceeds.

• Compensation and related expenses totaled $936.8 million during the year ended December 31, 2024, an increase of 19.7% compared with the year ended December 31, 2023 primarily due to higher salary expense, production-related expenses, incentive compensation costs and elevated expenses associated with Oppenheimer stock appreciation rights (“OARs”), which were adversely impacted by the significant increase in the OPY Class A Share price.

Compensation and related expenses as a percentage of revenue was 65.4% for the year ended December 31, 2024 compared with 62.7% for the year ended December 31, 2023.

• Non-compensation expenses were $389.9 million during the year ended December 31, 2024, a decrease of 7.1% compared with $419.7 million during the year ended December 31, 2023 largely due to the absence of significant legal and regulatory costs, partially offset by an increase in interest expense.

• The effective income tax rate for the year ended December 31, 2024 was 32.6% compared with 35.3% for the year ended December 31, 2023 primarily due to the absence of the non-deductible $13.0 million regulatory settlement, which was recorded in 2023.

Fiscal 2023 compared to Fiscal 2022

• Commission revenue was $349.2 million for the year ended December 31, 2023, a decrease of 5.7% compared with $370.4 million for the year ended December 31, 2022 due to decreased client activity in listed securities, OTC products and options, partially offset by higher commission income on annuities.

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• Principal transactions revenue was $65.3 million for the year ended December 31, 2023, an increase of 210.7% compared with $21.0 million for the year ended December 31, 2022 primarily due to higher fixed income trading volumes.

• Other revenue was $23.5 million for the year ended December 31, 2023, a significant increase compared to $1.1 million for the year ended December 31, 2022 primarily due to increases in the cash surrender value of Company-owned life insurance during 2023, which fluctuates based on changes in fair value of the policies' underlying investments.

• Other revenue was $23.5 million for the year ended December 31, 2023, a significant increase compared to $1.1 million for the year ended December 31, 2022 primarily due to increases in the cash surrender value of Corporate-owned life insurance during 2023, which fluctuates based on changes in fair value of the policies' underlying investments.

• Compensation and related expenses totaled $782.4 million during the year ended December 31, 2023, an increase of 5.6% compared with the year ended December 31, 2022 primarily due to higher base salary and deferred compensation costs.

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• The effective income tax rate for the year ended December 31, 2023 was 35.3% compared with 29.5% for the year ended December 31, 2022 primarily due to the impact of a non-deductible regulatory settlement totaling $13.0 million.

Fiscal 2022 compared to Fiscal 2021

• Commission revenue was $370.4 million for the year ended December 31, 2022, a decrease of 7.8% compared with $401.6 million for the year ended December 31, 2021 due to decreased client activity in mutual funds, listed securities, OTC products and annuities, partially offset by higher commission income on municipal bonds.

• Advisory fees were $425.6 million for the year ended December 31, 2022, a decrease of 5.7% compared with $451.2 million for the year ended December 31, 2021 due to the reduced valuations of assets under management.

• Investment banking revenue was $127.5 million for the year ended December 31, 2022, a decrease of 70.7% compared with $435.9 million for the year ended December 31, 2021 driven by an industry-wide decrease in M&A transactions, and significantly lower levels of capital issuances in the equity markets, particularly in the healthcare and technology sectors.

• Bank deposit sweep income was $104.6 million for the year ended December 31, 2022, an increase of 572.1% compared with $15.6 million for the year ended December 31, 2021 due to significantly higher short-term interest rates.

• Interest revenue was $60.7 million for the year ended December 31, 2022, an increase of 66.4% compared with $36.5 million in 2021 due to higher average margin balances and higher short-term interest rates.

• Principal transactions revenue was $21.0 million for the year ended December 31, 2022, a decrease of 12.3% compared with $24.0 million for the year ended December 31, 2021 driven by lower income from investment grade, high yield, Emerging Markets, and municipal bonds partially offset by higher income from U.S.

government securities.

• Other revenue was $1.1 million for the year ended December 31, 2022, a decrease of 96.2% compared to $29.3 million for the year ended December 31, 2021 primarily due to a decrease in the cash surrender value of Company-owned life insurance during 2022, which fluctuates based on changes in fair value of the policies' underlying investments.

• Compensation and related expenses totaled $740.8 million during the year ended December 31, 2022, a decrease of 16.5% compared with the year ended December 31, 2021 due to decreased incentive compensation costs.

Compensation and related expenses as a percentage of revenue was 66.7% for the year ended December 31, 2022 compared with 63.6% for the year ended December 31, 2021.

• Non-compensation expenses were $324.6 million during the year ended December 31, 2022, an increase of 14.9% compared with $282.6 million during the year ended December 31, 2021 due to higher legal costs recorded during third quarter of 2022 which related to an adverse arbitration decision.

• The effective income tax rate for the year ended December 31, 2022 was 29.5% compared with 29.2% for the year ended December 31, 2021.

BUSINESS SEGMENTS

The table below presents information about the reported revenue and pre-tax income (loss) of the Company's reportable business segments for the three months and years ended December 31, 2024 and 2023.

Effective in the fourth quarter of 2024, the Company combined the former Private Client and Asset Management business segments to form the Wealth Management segment.

Our Capital Markets and Corporate/Other segments were not impacted by these changes.

To provide historical information on a basis consistent with the revised segment presentation, the Company recast prior period segment results.

(Expressed in thousands)

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2024 2023 % Change 2024 2023 % Change

Private Client $ 203,834 $ 201,748 1.0 $ 801,754 $ 675,680 18.7

Asset Management 21,446 22,940 (6.5) 88,433 99,242 (10.9)

Wealth Management 253,515 225,279 12.5 972,052 890,185 9.2

Capital Markets 119,325 81,457 46.5 447,579 345,897 29.4

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Pre-Tax Income (Loss)

Private Client 53,945 49,331 9.4 194,444 142,250 36.7

Asset Management 6,125 9,837 (37.7) 24,091 35,753 (32.6)

Wealth Management 53,708 60,070 (10.6) 265,739 218,533 21.6

Capital Markets (4,975) (18,179) (72.6) (39,596) (62,961) (37.1)

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Total $ 17,067 $ 17,832 (4.3) $ 105,757 $ 46,770 126.1

* Percentage not meaningful

Private Client

Private Client reported revenue of $801.8 million for the year ended December 31, 2023, 18.7% higher compared with the prior year.

Wealth Management

Wealth Management reported revenue of $972.1 million for the year ended December 31, 2024, 9.2% higher compared with the prior year.

Pre-tax income was $265.7 million, an increase of 21.6% from the prior year.

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AUA (billions) $ 129.5 $ 118.2 9.6

AUM (billions) $ 49.4 $ 43.9 12.5

Cash Sweep Balances (billions) $ 3.0 $ 3.4 (11.8)

Financial Advisor Headcount 931 931 —

• Retail commissions decreased slightly from the prior year due to lower overall client activity, though transaction volumes improved later in the year.

• Advisory fees decreased 2.2% from the prior year due to lower billable AUM during the year.

• Bank deposit sweep income for the full year was a record high and increased $68.2 million or 65.3% from the prior year due to higher short-term interest rates, partially offset by lower cash sweep balances.

• Interest revenue increased 64.1% from the prior year due to record full year margin interest income attributable to higher short-term interest rates.

• Other revenue increased significantly compared with the prior year primarily due to increases in the cash surrender value of Company-owned life insurance policies, which fluctuates based on changes in fair value of the policies' underlying investments.

• Compensation expenses increased 5.7% from the prior year primarily due to higher deferred compensation costs.

• Non-compensation expenses increased 33.6% from the prior year primarily due to the impact of significant legal costs.

Asset Management

Asset Management reported revenue of $88.4 million for the year ended December 31, 2023, 10.9% lower compared with the prior year.

Pre-tax income was $24.1 million, a decrease of 32.6% compared with the prior year.

(Expressed in thousands, unless otherwise indicated)

For the Years Ended December 31,

2023 2022 % Change

Revenue $ 88,433 $ 99,242 (10.9)

Advisory fee revenue 96,259 99,224 (3.0)

Other (7,826) 18 *

Total Expenses $ 64,342 $ 63,489 1.3

Compensation 24,846 24,261 2.4

Non-compensation 39,496 39,228 0.7

Pre-Tax Income $ 24,091 $ 35,753 (32.6)

Compensation Ratio 28.1 % 24.4 % 15.2

Non-compensation Ratio 44.7 % 39.5 % 13.2

Pre-Tax Margin 27.2 % 36.0 % (24.4)

AUM (billions) $ 43.9 $ 36.8 19.3

* Percentage not meaningful

• Advisory fee revenue decreased 3.0% from the prior year primarily due to lower management fees from advisory programs attributable to reduced billable AUM levels and lower incentive fees from alternative investments during the year.

• Other revenue decreased $7.8 million from a year ago primarily due to a decrease in the fair value of positions held in private equity investments.

• AUM were $43.9 billion at December 31, 2023, which is the basis for advisory fee billings for January 2024.

• The increase in AUM from December 31, 2022 to December 31, 2023 was comprised of higher asset values of $6.0 billion on existing client holdings and a net contribution of assets of $1.1 billion.

• Compensation expenses and non-compensation expenses were relatively flat when compared to the prior year.

• Retail commissions increased significantly from the prior year due to higher overall client activity.

• Advisory fees increased 16.4% from the prior year due to higher billable AUM during the year.

• Bank deposit sweep income for the full year decreased $34.0 million or 19.7% from the prior year due to lower short-term interest rates and lower cash sweep balances.

• Interest revenue increased 4.2% from the prior year due to higher average margin loan balances.

• Other revenue increased 30.6% compared with the prior year primarily due to higher death benefit proceeds and allocated syndicate fess.

• AUM were $49.4 billion, a new record at December 31, 2024, which is the basis for advisory fee billings for January 2025.

• The increase in AUM from December 31, 2023 to December 31, 2024 was comprised of higher asset values of $6.4 billion on existing client holdings, offset by net distributions of $0.9 billion

• Compensation expenses increased 21.3% from the prior year primarily due to greater production-related expenses and elevated costs associated with share appreciation rights.

• Non-compensation expenses decreased 22.4% from the prior year primarily due to significantly lower legal and regulatory costs.

The following table provides a breakdown of the change in assets under management for the year ended December 31, 2024:

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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) The portfolio enhancement program sells uncovered, far out-of-money puts and calls on the S&P 500 Index.

(3) Hedge funds represent investments in strategies including long/short equity, global macro, event driven, merger arbitrage, multi-strategy and credit.

They may be single manager or fund of funds.

(4) Private equity funds include portfolios focused on technology, infrastructure, real estate, natural resources and specific co- investment opportunities.

(5) The portfolio enhancement program sells uncovered, far out-of-the-money puts and calls on the S&P 500 Index.

The program is market neutral and uncorrelated to the index.

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Pre-tax loss was $39.6 million compared with a pre-tax loss of $63.0 million for the prior year.

(Expressed in thousands )

(Expressed in thousands, except otherwise indicated )

For the Years Ended December 31,

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* Percentage not meaningful

• Advisory fees earned from investment banking activities decreased 17.7% compared with the prior year driven by an industry-wide slowdown in M&A transactions.

• Equities underwriting fees increased 37.9% compared with the prior year due to higher new issuance volumes and deal sizes, primarily during the third quarter.

• Fixed income underwriting fees were down 25.9% compared with the prior year primarily driven by less overall new issuance activity.

• Equities sales and trading decreased 9.1% compared with the prior year due to reduced volumes as a result of lower market volatility.

• Fixed income sales and trading increased 35.1% compared with the prior year driven by higher trading income attributable to higher volumes.

• Compensation expenses were slightly higher than the prior year due to opportunistic hires and inflationary pressures on wages as well as higher deferred compensation costs.

• Advisory fees earned from investment banking activities increased 54.0% compared with the prior year due to an increase in restructuring-related mandates and higher transaction volumes, particularly in the healthcare industry.

• Equities underwriting fees increased 36.2% compared with the prior year due to higher new issuance volumes.

• Fixed income underwriting fees were up 79.6% compared with the prior year primarily driven by an uptick in new issuance activity.

• Equities sales and trading increased 5.2% compared with the prior year due to higher trading volumes.

• Fixed income sales and trading increased 37.4% compared with the prior year driven by higher trading income attributable to higher volumes and increased market share

• Compensation expenses were higher than the prior year due to greater incentive compensation accruals and higher salary expenses associated with opportunistic hires.

• Non-compensation expenses were 17.2% higher compared with the prior year mainly due to an increase in interest expense in financing trading inventories.

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The significant accounting policies used in the preparation of the Company's consolidated financial statements are summarized in note 2 to those statements.

Certain of those policies are considered to be particularly

important to the presentation of the Company's financial results because they require management to make difficult, complex or subjective judgments, often as a result of matters that are inherently uncertain.

Certain of those policies are considered to be particularly important to the presentation of the Company's financial results because they require management to make difficult, complex or subjective judgments, often as a result of matters that are inherently uncertain.

The following is a discussion of these estimates:

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The valuation of financial instruments are classified in Level 3 of the fair value hierarchy and consists of valuation techniques that incorporate one or more significant unobservable inputs, and therefore requires the greatest amount of management judgment.

As of December 31, 2023, the Company had $2.7 million in financial instruments, comprised of auction rate securities, classified within Level 3 of the fair value hierarchy.

As of December 31, 2024, the Company had $5.3 million in financial instruments, comprised of auction rate securities and trade claims, classified within Level 3 of the fair value hierarchy.

See note 8 to the consolidated financial statements appearing in Item 8 for further information on the fair value definition, Level 1, Level 2 and Level 3 and related valuation techniques.

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We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements.

We record uncertain tax positions in accordance with ASC 740, "Income Taxes", on the basis of a two-step process whereby we determined whether it is more-likely-than-not that the tax positions will be sustained on the basis of the technical merits of the position and, for those tax positions that meet the more-likely-than-not recognition threshold, we will recognize the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority.

We record uncertain tax positions in accordance with ASC 740, "Income Taxes", on the basis of a two-step process whereby we determine whether it is more-likely-than-not that the tax positions will be sustained on the basis of the technical merits of the position and, for those tax positions that meet the more-likely-than-not recognition threshold, we will recognize the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority.

Assumption and judgement - We recognize deferred tax assets to the extent we believe these assets are more likely than not to be realized.

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New Accounting Pronouncements

The following Accounting Standards Update (“ASU”) issued by the Financial Accounting Standards Board ("FASB") has not yet been adopted by the Company:

ASU 2023-07 – Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures

In November 2023, the FASB issued this ASU to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

The revised guidance will require disclosure of significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”), the title and position of the CODM and how the CODM uses the reported measures of segment profit or loss in assessing segment performance, among other requirements.

While this ASU will have no impact on the Company’s financial position or results of operations, the Company is currently evaluating the impact of this ASU on its segment disclosures.

The following Accounting Standards Updates (“ASU”) issued by the Financial Accounting Standards Board ("FASB") have not yet been adopted by the Company:

ASU 2023-09 – Income Taxes (Topic 740):

Improvements to Income Tax Disclosures

The FASB issued this ASU in December of 2023 to enhance the transparency and decision usefulness of income tax disclosures.

The amendments require certain entities to enhance the annual reconciliation of its statutory income tax rate to its effective tax rate by mandating the disclosure of the impact associated with specific categories and requiring separate disclosure for reconciling items exceeding certain quantitative thresholds.

The amendments also require entities to annually disclose the amount of taxes paid (net of refunds received) disaggregated by federal, state and foreign taxes, with separate disclosure of individual jurisdictions exceeding 5% of total income taxes paid.

The new guidance, which becomes effective in 2025, will not have an impact on our financial position or results of operations since it only amends certain disclosures.

ASU 2024-03 – Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses

The FASB issued this ASU in November of 2024 which will require public business entities to disclose specified information about certain costs and expenses, including employee compensation, depreciation and intangible asset amortization at each interim and annual reporting period.

The new guidance, which becomes effective in 2027, will not have an impact on our financial position or results of operations since it only amends certain disclosures.

LIQUIDITY AND CAPITAL RESOURCES

Total assets increased by 17.7% from December 31, 2023 to December 31, 2024.

The Company satisfies its need for short-term financing from internally generated funds and collateralized and uncollateralized borrowings, consisting primarily of bank call loans, stock loans, and uncommitted lines of credit.

The Company satisfies its need for financing from internally generated funds and collateralized and uncollateralized borrowings, consisting primarily of bank call loans, stock loans, and uncommitted lines of credit.

We finance our trading in government securities through the use of securities sold under agreements to repurchase ("repurchase agreements").

We met our longer-term capital needs through the issuance of the 5.50% Senior Secured Notes due 2025 (see "Senior Secured Notes" below).

Oppenheimer has arrangements with banks for borrowings on a fully-collateralized basis.

The amount of Oppenheimer's bank borrowings fluctuates in response to changes in the level of the Company's securities inventories and customer margin debt, changes in notes receivable from employees, investment in furniture, equipment and leasehold improvements, changes in stock loan balances and financing through repurchase agreements.

At December 31, 2023 and December 31, 2022, the Company had no such borrowings outstanding.

Oppenheimer has uncommitted arrangements with banks for borrowings on a fully-collateralized basis.

repurchase agreements.

At December 31, 2024, the Company had a $252.1 million outstanding bank loan balance.

The Company also has some availability of short-term bank financing on an unsecured basis.

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The regulatory capital requirements for Oppenheimer Europe Ltd.

and Oppenheimer Investments Asia Limited were $5.4 million and $384,120,

respectively, at December 31, 2023.

and Oppenheimer Investments Asia Limited were $6.1 million and $386,200, respectively, at December 31, 2024.

The liquid assets at Oppenheimer Europe Ltd.

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Senior Secured Notes

On September 22, 2020, in a private offering, we issued $125.0 million aggregate principal amount of 5.50% Senior Secured Notes due 2025 (the "Unregistered Notes") under an Indenture at an issue price of 100% of the principal amount.

Interest on the Unregistered Notes is payable semi-annually on April 1st and October 1st.

We used the net proceeds from the offering of the Unregistered Notes, along with cash on hand, to redeem in full our 6.75% Senior Secured Notes due July 1, 2022 in the principal amount of $150.0 million (the Company held $1.4 million in treasury for a net outstanding amount of $148.6 million), and pay all related fees and expenses related thereto.

On November 23, 2020, we completed an exchange offer in which we exchanged 99.8% of our Unregistered Notes for a like principal amount of notes with identical terms except that such new notes have been registered under the Securities Act of 1933, as amended (the "Notes").

We did not receive any proceeds in the exchange offer.

During the fourth quarter of 2022, the Company repurchased and subsequently cancelled $10.95 million of the Notes, recognizing a small extinguishment gain.

As of December 31, 2022, $114.05 million aggregate principal amount of the Notes remain outstanding.

During the first quarter of 2023, the Company repurchased and cancelled $1.0 million aggregate principal amount of its Notes in the open market.

As of December 31, 2023, the Company repurchased and cancelled $1.0 million aggregate principal amount of its Notes in the open market.

As of December 31, 2023, $113.05 million aggregate principal amount of the Notes remain outstanding.

See note 13 to the consolidated financial statements appearing in Item 1 for further discussion.

The Notes are jointly and severally and fully and unconditionally guaranteed on a senior secured basis by E.A.

On September 19, 2024, the Company issued a notice of redemption to the holders of its 5.50% Senior Secured Notes due in 2025 (the “Notes”) stating that it intended to redeem all of the $113.05 million aggregate principal amount of the Notes outstanding on October 10, 2024.

The redemption price was equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest.

All of the Notes were redeemed on October 10, 2024 and none remain outstanding.

The Notes were jointly and severally and fully and unconditionally guaranteed on a senior secured 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 13.

The guarantees are senior secured obligations of each Guarantor.

The guarantees rank:

• effectively senior in right of payment to all unsecured and unsubordinated obligations of such Guarantor, to the extent of the value of the collateral owned by such Guarantor (and, to the extent of any unsecured remainder after payment of the value of the collateral, rank equally in right of payment with such unsecured and unsubordinated indebtedness of such Guarantor);

• senior in right of payment to any subordinated debt of such Guarantor (The Notes are secured on a first-priority basis by the collateral, subject to certain exceptions and permitted liens, and it is intended that pari passu lien indebtedness, if any, will be secured on an equal and ratable basis).

Each subsidiary guarantee is limited so that it does not constitute a fraudulent conveyance under applicable law, which may reduce the subsidiary’s obligation under the guarantee.

There are no externally imposed restrictions on transfers of assets between the Company and its subsidiaries.

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.

The following tables present the selected financial information for the twelve months ended December 31, 2023 for the Parent and Subsidiary Guarantors.

(together, the "Subsidiary Guarantors").

The following tables present the required selected financial information as of December 31, 2024 and for the twelve months ended December 31, 2024 for the Parent and Subsidiary Guarantors related to the previously outstanding Notes.

(Expressed in thousands) As of

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Total Revenue $ 10,558

Pre-Tax Loss 114

Pre-Tax Income 1,174

Net Income 2,319

S&P’s Corporate Family rating and the rating on the Notes is a 'BB-' with a stable outlook.

Moody’s Corporate Family rating and the rating on the Notes is a “Ba3” with a stable outlook.

Subsequent to our redemption of the Notes on October 10, 2024, at the Company's request, both S&P and Moody's withdrew their ratings.

Immediately prior to the redemption of the Notes, S&P’s Corporate Family rating and rating on the Notes was a 'BB-' with a stable outlook while Moody’s Corporate Family rating and rating on the Notes was a “Ba3” with a stable outlook.

For the most part, the Company's assets consist of cash and cash equivalents and assets that it can readily convert into cash.

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Our collateral maintenance policies and procedures are designed to limit our exposure to credit risk.

Securities owned, with the exception of the auction rate securities, are mainly comprised of actively trading, readily marketable securities.

We advanced $21.5 million in forgivable notes (which are inherently illiquid) to employees for the year ended December 31, 2023 ($19.8 million for the year ended December 31, 2022) as upfront or backend inducements to commence or continue employment as the case may be.

Securities owned, with the exception of the auction rate securities and trade claims, are mainly comprised of actively trading, readily marketable securities.

We issued $25.4 million in forgivable notes (which are inherently illiquid) to employees for the year ended December 31, 2024 ($21.5 million for the year ended December 31, 2023) as upfront or backend inducements to commence or continue employment as the case may be.

The amount of funds allocated to such inducements will vary with hiring activity.

We satisfy our need for short-term liquidity from internally generated funds, collateralized and uncollateralized bank borrowings, stock loans and repurchase agreements and warehouse facilities.

Bank borrowings are, in most cases, collateralized by firm and customer securities.

We satisfy our need for liquidity from internally generated funds, collateralized and uncollateralized bank borrowings, stock loans and repurchase agreements and warehouse facilities.

Bank borrowings are uncommitted in nature and, in most cases, collateralized by firm and customer securities.

We obtain short-term borrowings primarily through bank call loans.

Bank call loans are generally payable on demand and bear interest at various rates.

At December 31, 2023, bank call loans were zero (zero at December 31, 2022).

At December 31, 2024, bank call loans were $252.1 million (zero at December 31, 2023).

The average daily bank loan outstanding for the year ended December 31, 2024 was $167.7 million ($49.4 million for the year ended December 31, 2023).

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The availability of such additional external financing may depend on market factors outside our control.

We have Company-owned life insurance policies which are utilized to fund certain non-qualified deferred compensation plans.

We have Corporate-owned life insurance policies which are utilized to fund certain non-qualified deferred compensation plans.

Certain policies which could provide additional liquidity if needed had a cash surrender value of $98.8 million as of December 31, 2024.

We regularly review our sources of liquidity and financing and conduct internal stress analysis to determine the impact on the Company of events that could remove sources of liquidity or financing and to plan actions the Company could take in the case of such an eventuality.

Our reviews have resulted in plans that we believe would result in a reduction of assets through liquidation that would significantly reduce the Company's need for external financing.

Our primary long-term cash requirements include $113.1 million principal outstanding as of December 31, 2023 under our Notes (due in 2025) and $183.3 million of operating lease obligations.

The total cash requirement for interest expense related to the Notes and operating lease obligations is estimated to be approximately $18.7 million for the 2024 year.

Our reviews have resulted in a contingency funding plan that we believe would result in a reduction of assets through liquidation that would significantly reduce the Company's need for external financing.

Our primary long-term cash requirements include $173.3 million of operating lease obligations.

The total cash requirement for operating lease obligations is estimated to be approximately $11.8 million for the 2025 year.

(Expressed in thousands)

For the Years Ended December 31,

Cash provided by/(used in) operating activities $ (18,810) $ 64,492

Cash used in operating activities $ (108,168) $ (18,810)

Cash used in investing activities (3,839) (15,561)

Cash used in financing activities (74,761) (253,912)

Net decrease in cash and cash equivalents and restricted cash $ (109,132) $ (203,557)

Cash provided by (used in) financing activities 116,322 (74,761)

Net increase (decrease) in cash and cash equivalents and restricted cash $ 4,315 $ (109,132)

Management believes that funds from operations, combined with our capital base and available credit facilities, are sufficient for our liquidity needs in the foreseeable future.

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(“NSCC”) as well as more stringent collateral arrangements with our bank lenders.

Recent reductions in the settlement cycle to one day are believed to have reduced such requirements.

All such requirements have been met in the ordinary course with available collateral.

REGULATORY MATTERS AND DEVELOPMENTS

Regulation Best Interest (U.S.)

On June 5, 2019, the SEC adopted Regulation Best Interest (“Reg BI”) as Rule 15l-1 under the Exchange Act.

Reg BI imposes a federal standard of conduct on registered broker-dealers and their associated persons when dealing with retail clients and requires that a broker-dealer and its representatives act in the best interest of clients and not place its own interests ahead of the customer’s interests.

Reg BI does not define the term “best interest” but instead sets forth four distinct obligations, disclosure, care, conflict of interest and compliance that a broker-dealer must satisfy in each transaction.

Compliance with Reg BI became effective on June 30, 2020.

In addition to adopting Reg BI, the SEC adopted rules (i) requiring broker-dealers and investment advisers to provide a written relationship summary to each client, and (ii) clarifying certain interpretations under the Advisers Act including but not limited to when a broker-dealer's activity is considered “solely incidental” to its broker-dealer business and is, therefore, not considered investment advisory activity (collectively, the “Reg BI Rules”).

Reg BI requires enhanced documentation for recommendations of securities transactions to broker-dealer retail clients as well as the cessation of certain practices and limitations on certain kinds of transactions previously conducted in the normal course of business.

The new rules and processes related thereto may limit revenue and have increased, and most likely will continue to increase costs, including, but not limited to, compliance costs associated with new or enhanced technology as well as increased litigation costs.

The Company made significant structural, technological and operational changes to our business practices to comply with the requirements of the Reg BI Rules and it is likely that additional changes may be necessary to continue to comply as more experience with the Reg BI Rules is gained.

Regulators have commenced reviews of the industry’s compliance with the requirements of Reg BI, including that of the Company.

See “Business – Regulation – Fiduciary Standard – Rulemaking by the U.S.

Department of Labor and SEC” in Part I, Item 1.

On December 18, 2020, the DOL published its final prohibited transaction exemption (“PTE”) addressing investment advice fiduciaries to ERISA plans and IRAs.

Similar to the proposal the DOL released in June of 2020 the PTE takes a principles-based (rather than a prescriptive) approach to resolving conflicts that arise under ERISA when an investment advice fiduciary, its affiliate or a related party is paid certain types of compensation (such as commissions, trailing fees or revenue-sharing) or engages in certain principal transactions.

The PTE should provide a new and more flexible approach to ERISA compliance for certain types of transactions, which financial institutions may choose to utilize in place of other existing exemptions.

Like the proposal (but in contrast to the precursor rule the DOL finalized in April 2016 that the U.S.

Court of Appeals for the Fifth Circuit later vacated in June 2018), the PTE does not materially change the scope of fiduciary activities under ERISA, with the exception of including certain rollover-related advice as fiduciary advice.

The effective date for compliance with the PTE was February 1, 2022.

The Company believes many of the steps taken by the Company to achieve compliance with the Reg BI Rules will enable the Company to comply with the PTE.

The Company implemented certain additional processes beyond the actions taken to comply with the Reg BI Rules in order to ensure full compliance with the PTE.

Regulatory Environment

See the discussion of the regulatory environment in which we operate and the impact on our operations of certain rules and regulations in Item 1 “Business - Regulation” herein for additional information.

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See “Business – Regulatory - Regulatory Capital Requirements” in Part I, Item 1 and note 19 of the Notes to Consolidated Financial Statements in Item 8 for further information on regulatory capital requirements.

Other Regulatory Matters

On November 18, 2022, Oppenheimer received an information request from the SEC requesting information related to the use of text messaging and similar forms of electronic communications by employees of Oppenheimer and whether those communications were properly retained by Oppenheimer as part of its records preservation requirements relating to the broker-dealer business activities of Oppenheimer.

Subsequently, Oppenheimer received a similar information request from the Commodity Futures Trading Commission (“CFTC”).

On January 4, 2024, Oppenheimer submitted an Offer of Settlement to the SEC.

On February 9, 2024, the SEC issued an order (the “Order”) pursuant to which Oppenheimer will pay a fine in an amount of $12 million and agree to certain undertakings.

In addition to the Order Oppenheimer received a waiver of certain

statutory disqualifications from the SEC.

On February 7, 2024, Oppenheimer submitted an Offer of Settlement to the CFTC pursuant to which Oppenheimer offered to pay a fine of $1 million and agree to certain undertakings.

On December 20, 2024, the SEC adopted rule amendments to SEC Rule 15c3-3 (the customer protection rule) to require certain broker-dealers, including those with average total credits (amounts owed to customers) equal to or greater than $500 million, to increase the frequency with which they perform computation of the net cash they owe customers and proprietary accounts of other broker-dealers ("PAB") from weekly to daily.

Impacted entities must perform the customer and PAB reserve computations daily beginning no later than December 31, 2025.

We anticipate that the new amendments will impact our principal broker dealer and may result in an increase in required staffing levels.

The Organization for Economic Co-operation and Development (“OECD”) issued the Global Anti-Base Erosion Model Rules (“Pillar II”), which among its provisions, requires companies to pay a minimum corporate tax rate of 15% in each jurisdiction in which they do business.

While we have foreign affiliates that operate within the scope of Pillar II, we do not believe that it will have a material impact on our consolidated results of operations or effective income tax rate.

FACTORS AFFECTING "FORWARD-LOOKING STATEMENTS"

From time to time, the Company may publish or make oral statements that constitute “forward-looking statements” under the Private Securities Litigation Reform Act of 1995 which provides a safe harbor for forward-looking statements.

These forward-looking statements may relate to such matters as anticipated financial performance, future revenues, earnings, liabilities or expenses, liquidity and cash flows, business prospects, strategic objectives, projected ventures, new products, anticipated market performance, and similar matters.

Words such as “believes,” “expects,” “anticipates,” “estimates,” “will,” “may,” “could,” “should” and “would” are intended to identify forward-looking statements.

Forward-looking statements are not guarantees and involve risks, uncertainties and assumptions.

These forward-looking statements may relate to such matters as anticipated financial performance, future revenues, earnings, liabilities or expenses, business prospects, projected ventures, new products, anticipated market performance, and similar matters.

The Company cautions readers that a variety of factors could cause the Company’s actual results to differ materially from the anticipated results or other expectations expressed in the Company’s forward-looking statements.

These risks and uncertainties, many of which are beyond the Company’s control, include, but are not limited to:

(x) the adoption and implementation of the SEC’s “Regulation Best Interest” and other regulations adopted in recent years, (xi) war, terrorist acts and nuclear confrontation as well as political unrest, including events relating to Russia’s invasion of Ukraine and Western sanctions and the Israel-Hamas war and related unrest in the Middle East, (xii) the Company’s ability to achieve its business plan, (xiii) the effects of the economy on the Company’s ability to find and maintain financing options and liquidity, (xiv) credit, operational, legal and regulatory risks, (xv) risks related to foreign operations, including those in the United Kingdom which may be affected by Britain’s January 2020 exit from the EU(“Brexit”) and economic uncertainty in the UK, EU, and elsewhere, (xvi) the effect of technological innovation on the financial services industry and securities business, (xvii) risks related to election results, Congressional gridlock, political and social unrest, government shutdowns and investigations, trade wars, changes in or uncertainty surrounding regulation, and the potential for default by the U.S.

the COVID-19 Pandemic’s impact on the U.S.

and global economies;

and federal, state and local governmental responses to the COVID-19 Pandemic.

There can be no assurance that the Company has correctly or completely identified and assessed all of the factors affecting the Company's business.

See “Risk Factors” in Part I, Item 1A.

(i) transaction volume in the securities markets, (ii) the volatility of the securities markets, (iii) fluctuations in interest rates, (iv) changes in regulatory requirements that could affect the cost and method of doing business, (v) general economic conditions, both domestic and international, including inflation, recession, and changes in consumer confidence and spending, (vi) competition from existing financial institutions, new entrants and other participants in the securities markets and financial services industry, (vii) potential cybersecurity threats and attacks, (viii) legal developments affecting the litigation experience of the securities industry and the Company, (ix) changes in foreign, federal and state tax laws that could affect the popularity of products sold by the Company or impose taxes on securities transactions, (x) the adoption and implementation of the SEC’s “Regulation Best Interest” and other regulations adopted in recent years, (xi) war, terrorist acts and nuclear confrontation as well as political unrest, including events relating to the Israel-Hamas war, the conflict with Hezbollah and Iran and related unrest in the Middle East and Russia's invasion of Ukraine and related Western sanctions, (xii) the Company’s ability to achieve its business plan, (xiii) the effects of the economy on the Company’s ability to find and maintain financing options and liquidity, (xiv) credit, operational, legal and regulatory risks, (xv) risks related to foreign operations, (xvi) the effect of technological innovation on the financial services industry and securities business including but not limed to risks associated with the use of artificial intelligence, (xvii) risks related to election results, Congressional gridlock, political and social unrest, government shutdowns and investigations, trade wars, bank failures, changes in or uncertainty surrounding regulation, and the potential for default by the U.S.

government on the nation's debt, (xviii) risks related to changes in capital requirements under international standards that may cause banks to back away from providing funding to the securities industry and (xix) economic, market, political and social impact of, and uncertainty relating to, any catastrophic events, including pandemics, epidemics or other outbreaks of disease, climate-related risks such as natural disasters and extreme weather events.

There can be no assurance that the Company has correctly or completely identified and assessed all of the factors affecting the Company's business See “Risk Factors” in Part I, Item 1A.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis