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Segment Information
 12 Months Ended
Dec. 31, 2013
Segment Reporting [Abstract]  
Segment Information

20. Segment information

The Company has determined its reportable segments based on the Company’s method of internal reporting, which disaggregates its retail business by branch and its proprietary and investment banking businesses by product. The Company evaluates the performance of its segments and allocates resources to them based upon profitability.

Due to the recent growth in the Company’s commercial loan origination and servicing business operated out of OMHHF, the Company has presented separately the results of this business in a reportable segment titled “Commercial Mortgage Banking.” This reportable segment engages in business activities in which it earns revenues and incurs expenses that are distinct from the Company’s other reportable segments, its operating results are reviewed by the Company’s Chief Executive Officer who makes decisions about resources to be allocated to this business, and separate financial information is available for the legal entity from which it operates. The Commercial Mortgage Banking reportable segment not only meets these qualitative criteria but, as a result of its recent growth, also meets one of the quantitative thresholds for segment reporting. Previously reported segment information has been revised to reflect this new reportable segment.

The Company’s reportable segments are:

Private Client - includes commissions and a proportionate amount of fee income earned on AUM, net interest earnings on client margin loans and cash balances, fees from money market funds, net contributions from stock loan activities and financing activities, and direct expenses associated with this segment;

 

Asset Management - includes a proportionate amount of fee income earned on AUM from investment management services of Oppenheimer Asset Management Inc. Oppenheimer’s asset management divisions employ various programs to professionally manage client assets either in individual accounts or in funds, and includes direct expenses associated with this segment;

Capital Markets - includes investment banking, institutional equities sales, trading, and research, taxable fixed income sales, trading, and research, public finance and municipal trading, as well as the Company’s operations in the United Kingdom, Hong Kong and Israel, and direct expenses associated with this segment; and

Commercial Mortgage Banking - includes loan origination and servicing fees from the Company’s subsidiary, OMHHF. The Company has added this business segment due to the significant growth and profitability of this line of business over the last several quarters. In prior periods, this business had been part of the Capital Markets business segment.

The Company does not allocate costs associated with certain infrastructure support groups that are centrally managed for its reportable segments. These areas include, but are not limited to, legal, compliance, operations, accounting, and internal audit. Costs associated with these groups are separately reported in a Corporate/Other category and include, for example, compensation and benefits, rent expense, information technology, legal and professional.

The table below presents information about the reported revenue and net income (loss) before taxes of the Company for the years ended December 31, 2013, 2012 and 2011. Asset information by reportable segment is not reported, since the Company does not produce such information for internal use by the chief operating decision maker.

 

(Expressed in thousands)                   
     Year Ended December 31,  
     2013     2012     2011  

Revenue

       

Private client division *

    $ 600,071      $ 550,797      $ 541,365   

Asset management *

      102,214        84,160        71,052   

Capital markets

      281,377        283,139        322,147   

Commercial mortgage banking

      34,144        35,682        28,923   

Corporate/Other

      1,908        (1,166 )      (4,495 ) 
  

 

 

    

 

 

    

 

 

  

Total

    $ 1,019,714      $ 952,612      $ 958,992   
  

 

 

    

 

 

    

 

 

  

Income (loss) before income taxes

       

Private client division *

    $ 65,924      $ 53,487      $ 59,070   

Asset management *

      40,951        25,436        20,759   

Capital markets

      6,968        (15,324 )      12,996   

Commercial mortgage banking

      11,413        15,267        11,428   

Corporate/Other

      (81,347 )      (79,393 )      (86,405 ) 
  

 

 

    

 

 

    

 

 

  

Total

    $ 43,909      $ (527 )    $ 17,848   
  

 

 

    

 

 

    

 

 

  

 

* Asset management fees are allocated 22.5% to the Asset Management and 77.5% to the Private Client Divisions.

 

Revenue, classified by the major geographic areas in which it was earned for the years ended December 31, 2013, 2012 and 2011 was as follows:

 

(Expressed in thousands)                     
     Year Ended December,  
     2013      2012      2011  

United States

    $ 974,260       $ 908,870       $ 909,661   

Europe/Middle East

      36,516         34,913         36,363   

Asia

      4,949         1,131         3,797   

South America

      3,989         7,698         9,171   
  

 

 

     

 

 

     

 

 

  

Total

    $ 1,019,714       $ 952,612       $ 958,992