<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
X EXCHANGE ACT OF 1934.
- - --------
For the quarterly period ended January 31, 1995
----------------
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934.
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For the transition period from __________ to _________
Commission file number: 1-9597
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OPPENHEIMER CAPITAL, L.P.
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(Exact name of registrant as specified in its charter)
DELAWARE 13-3412614
- - ------------------------------- ------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
OPPENHEIMER TOWER
WORLD FINANCIAL CENTER, NEW YORK, NEW YORK 10281
- - ------------------------------------------ ------------------
(Address of principal executive office) (Zip Code)
(212) 667-7000
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(Registrant's telephone number including area code)
NOT APPLICABLE
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(Former name, address and fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
------ ------
APPLICABLE ONLY TO CORPORATE ISSUERS:
The issuer is a Limited Partnership. There were 15,136,837 Units of
limited partnership interest outstanding at March 10, 1995.
<PAGE>
OPPENHEIMER CAPITAL, L.P.
INDEX
PAGE
PART I - FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS
OPPENHEIMER CAPITAL, L.P.
STATEMENTS OF FINANCIAL CONDITION 3
OPPENHEIMER CAPITAL, L.P.
STATEMENTS OF INCOME 4
OPPENHEIMER CAPITAL, L.P.
STATEMENTS OF CASH FLOWS 5
OPPENHEIMER CAPITAL, L.P.
NOTES TO THE FINANCIAL STATEMENTS 6
OPPENHEIMER CAPITAL
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION 8
OPPENHEIMER CAPITAL
CONSOLIDATED STATEMENTS OF INCOME 9
OPPENHEIMER CAPITAL
CONSOLIDATED STATEMENTS OF CASH FLOWS 10
OPPENHEIMER CAPITAL
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 11
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 12
PART II - OTHER INFORMATION 16
SIGNATURES 17
- 2 -
<PAGE>
OPPENHEIMER CAPITAL, L.P.
STATEMENTS OF FINANCIAL CONDITION
(IN THOUSANDS)
<TABLE>
<CAPTION>
ASSETS
JANUARY 31, 1995 APRIL 30, 1994
---------------- --------------
<S> <C> <C>
Cash and short-term investments $ 134 $ 75
Investment in Oppenheimer Capital 11,504 8,342
Distribution receivable (Note 3) 6,800 9,900
10% Note due 2012 from Oppenheimer Equities, Inc. 32,193 32,193
Interest receivable 547 538
Other assets 21 -
Goodwill, net 45,112 47,068
------------ ------------
TOTAL ASSETS $ 96,311 $ 98,116
============ ============
<CAPTION>
LIABILITIES AND PARTNERS' CAPITAL
<S> <C> <C>
Distribution payable to partners $ 7,645 $ 10,319
------------ ------------
TOTAL LIABILITIES 7,645 10,319
------------ ------------
General partner's capital 900 892
Limited partners' capital 87,766 86,905
------------ ------------
TOTAL PARTNERS' CAPITAL 88,666 87,797
------------ ------------
TOTAL LIABILITIES AND
PARTNERS' CAPITAL $ 96,311 $ 98,116
============ ============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS.
- 3 -
<PAGE>
OPPENHEIMER CAPITAL, L.P.
STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT FOR PER UNIT AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
JANUARY 31, JANUARY 31,
----------------------------------- -----------------------------------
1995 1994 1995 1994
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
REVENUES
Equity in earnings of Oppenheimer Capital $ 7,278 $8,244 $ 23,522 $24,192
Interest 815 813 2,441 2,439
--------- --------- --------- ---------
TOTAL REVENUES 8,093 9,057 25,963 26,631
--------- --------- --------- ---------
EXPENSES
Amortization of goodwill 652 652 1,956 1,956
Other expenses (Note 4) 218 375 939 1,140
--------- --------- --------- ---------
TOTAL EXPENSES 870 1,027 2,895 3,096
--------- --------- --------- ---------
NET INCOME $ 7,223 $ 8,030 $ 23,068 $ 23,535
========= ========= ========= =========
NET INCOME PER UNIT (NOTE 5) $ .47 $ .53 $ 1.51 $ 1.55
========= ========= ========= =========
DISTRIBUTIONS DECLARED PER UNIT $ .50 $ .50 $ 1.50 $ 1.4625
========= ========= ========= =========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS.
- 4 -
<PAGE>
OPPENHEIMER CAPITAL, L.P.
STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
JANUARY 31,
---------- ----------
1995 1994
---------- ----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 23,068 $ 23,535
Adjustments to reconcile net income to net cash provided
by operating activities:
Distributions received in excess of (less than) equity in
earnings of Oppenheimer Capital 672 (1,307)
Amortization of goodwill 1,956 1,956
(Increase) in interest receivable (9) (9)
(Increase) decrease in other assets (21) 116
Increase in accrued expenses and other liabilities - 46
---------- ----------
Net cash provided by operating activities 25,666 24,337
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital contributions to Oppenheimer Capital (86) (68)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Distributions to partners:
General partner (256) (243)
Limited partners (25,351) (24,066)
Issuance of limited partnership units on exercise of
restricted options 86 68
---------- ----------
Net cash (used in) financing activities (25,521) (24,241)
---------- ----------
Net increases in cash and short term investments 59 28
Cash and short term investments at beginning of period 75 78
---------- ----------
Cash and short term investments at end of period $ 134 $ 106
========== ==========
Supplemental disclosure of cash flow information:
New York City unincorporated business taxes paid $ 960 $ 978
========== ==========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS.
- 5 -
<PAGE>
OPPENHEIMER CAPITAL, L.P.
NOTES TO THE FINANCIAL STATEMENTS
1. ORGANIZATION:
Oppenheimer Capital, L.P. ("the Partnership") holds a 67.14% general
partnership interest in Oppenheimer Capital (the "Operating Partnership"), a
general partnership. The Partnership (through the Operating Partnership)
engages in the investment management business. The limited partners and
Oppenheimer Financial Corp., the Partnership's general partner (the "General
Partner"), hold a 99% interest and 1% interest, respectively, in the
Partnership.
The financial statements of the Partnership should be read in
conjunction with the consolidated financial statements of the
Operating Partnership.
The Operating Partnership is part of an affiliated group of companies
operating in the financial services industry.
2. BASIS OF PRESENTATION:
The interim financial information in this report has not been audited.
The financial statements should be read in conjunction with the financial
statements included in the Partnership's 1994 Annual Report. In the opinion of
management, all adjustments (which include only normal recurring adjustments)
necessary to present fairly the financial position and results of operations
for all periods presented have been made. The results of operations for any
interim period are not necessarily indicative of the operating results for a
full year.
3. DISTRIBUTION RECEIVABLE:
On January 31, 1995, the Operating Partnership declared distributions to
its partners, of which $6,800,000 was paid to the Partnership on February 28,
1995.
4. OTHER EXPENSES:
Other expenses consist of New York City unincorporated business tax
("UBT") at a rate of 4% of taxable income. Prior to January 1, 1995, New York
City UBT was calculated based on the equity in earnings of the Operating
Partnership plus interest income. However, based on a new tax law which became
effective on January 1, 1995, the Operating Partnership pays the New York City
UBT on the Partnership's pro rata share of the Operating Partnership's taxable
income, and the Partnership receives a credit for its share of any New York City
UBT paid by the Operating Partnership. (See Oppenheimer Capital Notes to the
Consolidated Financial Statements - Note 3)
- 6 -
<PAGE>
OPPENHEIMER CAPITAL, L.P.
NOTES TO THE FINANCIAL STATEMENTS
(CONTINUED)
5. NET INCOME PER UNIT:
(IN THOUSANDS, EXCEPT FOR PER UNIT AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
JANUARY 31, JANUARY 31,
-------------------- ------------------
1995 1994 1995 1994
------- ------- -------- --------
<S> <C> <C> <C> <C>
Net Income $ 7,223 $ 8,030 $23,068 $23,535
Less 1% applicable to the General Partner 72 80 231 235
------- ------- ------- -------
Net income available to the Limited Partners $ 7,151 $ 7,950 $22,837 $23,300
------- ------- ------- -------
------- ------- ------- -------
Weighted average number of units outstanding 15,137 15,043 15,136 15,043
------- ------- ------- -------
------- ------- ------- -------
Net income per unit $ .47 $ .53 $ 1.51 $ 1.55
------- ------- ------- -------
------- ------- ------- -------
</TABLE>
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<PAGE>
OPPENHEIMER CAPITAL
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(IN THOUSANDS)
ASSETS
<TABLE>
<CAPTION>
JANUARY 31, 1995 APRIL 30, 1994
---------------- --------------
<S> <C> <C>
Cash and short-term investments $ 7,729 $ 3,702
Investment management fees receivable 31,429 28,660
Furniture, equipment and leasehold improvements
at cost, less accumulated depreciation and
amortization of $1,933 and $1,481 3,584 2,741
Intangible assets, less accumulated amortization
of $1,332 and $953 3,075 1,766
Other assets (Note 6) 8,623 6,165
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TOTAL ASSETS $ 54,440 $ 43,034
-------- --------
-------- --------
<CAPTION>
LIABILITIES, MINORITY INTEREST AND PARTNERS' CAPITAL
<S> <C> <C>
Accrued employee compensation and benefits $ 6,244 $ 6,687
Accrued expenses and other liabilities 6,247 4,734
Note payable 1,200 -
Loan payable to bank 11,993 2,736
Deferred investment management fees 1,466 1,623
Distribution payable to partners 10,028 14,777
-------- --------
TOTAL LIABILITIES 37,178 30,557
-------- --------
Minority interest 136 25
PARTNERS' CAPITAL 17,126 12,452
-------- --------
TOTAL LIABILITIES, MINORITY INTEREST
AND PARTNERS' CAPITAL $ 54,440 $ 43,034
-------- --------
-------- --------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS.
- 8 -
<PAGE>
OPPENHEIMER CAPITAL
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
JANUARY 31, JANUARY 31,
------------------- ---------------------
1995 1994 1995 1994
-------- ------- ------- -------
<S> <C> <C> <C> <C>
OPERATING REVENUES
Investment management fees $29,968 $28,588 $90,655 $82,974
Net distribution assistance and commission income 1,994 (122) 4,766 768
Interest and dividends 79 39 184 88
-------- ------- ------- -------
TOTAL OPERATING REVENUES 32,041 28,505 95,605 83,830
-------- ------- ------- -------
OPERATING EXPENSES
Compensation and benefits 13,954 11,033 40,966 32,577
Occupancy 1,526 1,343 4,793 4,071
General and administrative 2,890 1,570 6,917 4,749
Promotional 2,558 2,243 7,684 6,289
-------- ------- ------- -------
TOTAL OPERATING EXPENSES 20,928 16,189 60,360 47,686
-------- ------- ------- -------
OPERATING INCOME 11,113 12,316 35,245 36,144
Income taxes (Note 3) (233) - (823) -
INCOME BEFORE MINORITY INTEREST 10,880 12,316 34,422 36,144
Minority interest (60) (11) 3 (35)
-------- ------- ------- -------
NET INCOME $ 10,820 $12,305 $34,425 $36,109
-------- ------- ------- -------
-------- ------- ------- -------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS.
- 9 -
<PAGE>
OPPENHEIMER CAPITAL
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
JANUARY 31,
---------------------
1995 1994
---------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 34,425 $ 36,109
Adjustments to reconcile net income to net cash provided by
operating activities:
Amortization of restricted unit compensation expense 960 622
Depreciation and amortization 831 661
Minority interest, net of distributions 111 35
(Increase) decrease in:
Investment management fees receivable (2,769) (2,263)
Other assets 365 (1,732)
Increase (decrease) in:
Accrued employee compensation and benefits (443) (3,833)
Accrued expenses and other liabilities 1,513 (210)
Note payable 1,200 --
Deferred investment management fees (157) 330
-------- --------
Net cash provided by operating activities 36,036 29,719
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of fixed assets (1,295) (936)
Intangible assets resulting from acquisitions (1,688) --
Proceeds from sales of mutual fund shares and other investments 752 1,183
Purchases of mutual fund shares and other investments (3,222) (2,088)
-------- --------
Net cash (used in) investing activities (5,453) (1,841)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from bank loans 9,257 6,178
Distributions to partners:
Oppenheimer Financial Corp. (11,704) (12,159)
Oppenheimer Capital, L.P. (24,195) (22,885)
Contributions by Oppenheimer Capital, L.P. 86 68
-------- --------
Net cash (used in) financing activities (26,556) (28,798)
-------- --------
Net increase (decrease) in cash and short term investments 4,027 (920)
Cash and short term investments at beginning of period 3,702 4,085
-------- --------
Cash and short term investments at end of period $ 7,729 $ 3,165
-------- --------
-------- --------
Supplemental disclosure of cash flow information:
Interest paid $ 491 $ 96
-------- --------
-------- --------
New York City unincorporated business taxes paid $ 625 $ -
-------- --------
-------- --------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS.
-10-
<PAGE>
OPPENHEIMER CAPITAL
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION:
Oppenheimer Capital (the "Operating Partnership"), a general partnership,
engages in the investment management business. Oppenheimer Capital, L.P. (the
"Partnership") holds a 67.14% general partnership interest in the Operating
Partnership and Oppenheimer Financial Corp. ("Opfin") holds the remaining
32.86% general partnership interest. The Operating Partnership is part of
an affiliated group of companies operating in the financial services industry.
2. BASIS OF PRESENTATION:
The interim financial information in this report has not been audited.
The financial statements should be read in conjunction with the financial
statements included in the Partnership's 1994 Annual Report. In the opinion of
management, all adjustments (which include only normal recurring adjustments)
necessary to present fairly the financial position and results of operations
for all periods presented have been made. The results of operations for any
interim period are not necessarily indicative of the operating results for a
full year.
3. INCOME TAXES:
The Operating Partnership was subject to New York City unincorporated
business tax ("UBT") of $233,000 and $823,000, respectively, for the three
months and nine months ended January 31, 1995. Prior to January 1, 1995,
payment of this tax by the Operating Partnership was based on Opfin's share of
distributable income and, thus, had no effect on the Partnership or its
limited partners. However, effective January 1, 1995, the New York City UBT
is paid by the Operating Partnership for both the Partnership and Opfin
based on their respective general partnership interests in the Operating
Partnership. The Partnership and Opfin receive a credit for their pro rata
shares of New York City UBT paid by the Operating Partnership. (See
Oppenheimer Capital, L.P. Notes to the Financial Statements- Note 4)
4. ACQUISITIONS OF BUSINESSES:
On May 1, 1994, the American Medical Association ("AMA") and the Operating
Partnership formed AMA Investment Advisers, L.P. to acquire the assets of AMA
Investment Advisers, Inc. and American Medical Investment Company, Inc. The
Operating Partnership and Opfin acquired a 79.1% and 1.0% partnership
interest, respectively, for a total purchase price of $1,960,000, including
a $1,200,000 promissory note issued in conjunction with the purchase,
allocated in accordance with their respective percentage interests. AMA
Investment Advisers, L.P. and its subsidiary offer investment services and
products tailored especially for members of the AMA and other health care
professionals and medical organizations.
On May 1, 1994, the Operating Partnership acquired Liberty Street Trust
Company from Oppenheimer Holdings, Inc., an affiliate, for its net book value
of $1,629,000 and renamed it Oppenheimer Capital Trust Company. This company
offers collectively managed portfolios of specialized asset classes.
5. PRIOR PERIOD FINANCIAL INFORMATION:
Certain prior period financial information has been reclassified to
conform with the current period presentation.
6. OTHER ASSETS:
Included in other assets is an investment in Orange County securities. On
December 7, 1994, in response to the bankruptcy filing by Orange County,
California, the Operating Partnership voluntarily purchased $2,000,000
principal amount of Orange County Tax and Revenue Anticipation Notes from a
mutual fund for which Quest For Value Advisors, an affiliated investment
advisor, acts as the sole investment advisor. This investment is being
recorded at the market value. On February 2, 1995 and February 8, 1995,
the Operating Partnership sold a total of $1,000,000 principal amount of
the Orange County Tax and Revenue Anticipation notes.
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<PAGE>
PART I, ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OPPENHEIMER CAPITAL, L.P.
GENERAL
The primary sources of income for Oppenheimer Capital, L.P. ( the
"Partnership") are its proportionate share of the net income of Oppenheimer
Capital (the "Operating Partnership") and interest income on a $32,193,000 par
value 10% note due 2012 from Oppenheimer Equities, Inc. ("Equities").
REVENUES AND EXPENSES
The Partnership recorded equity in earnings of the Operating
Partnership for the three months ended January 31, 1995 and January 31, 1994
of $7,278,000 and $8,244,000, respectively. For the nine months ended
January 31, 1995 and January 31, 1994, the Partnership recorded equity in
earnings of the Operating Partnership of $23,522,000 and $24,192,000,
respectively.
Other expenses consist of New York City unincorporated business tax
("UBT"). For the three months ended January 31, 1995 and January 31, 1994, New
York City UBT totaled $218,000 and $375,000, respectively, and for the nine
months ended January 31, 1995 and January 31, 1994, New York City UBT totaled
$939,000 and $1,140,000, respectively. The decline in New York City UBT is due
to a change in the tax law effective January 1, 1995 with respect to the
Operating Partnership which imposes New York City UBT on the total income of
the Operating Partnership and allows the Partnership to claim a credit for
its pro rata share of any New York City UBT paid by the Operating Partnership.
Net income for the three months ended January 31, 1995 and January 31,
1994 amounted to $7,223,000 and $8,030,000, respectively, or $.47 per unit and
$.53 per unit, respectively. Net income for the nine months ended January 31,
1995 and January 31, 1994 amounted to $23,068,000 and $23,535,000, respectively,
or $1.51 per unit and $1.55 per unit, respectively.
LIQUIDITY AND CAPITAL RESOURCES
The only business activity carried on by the Partnership is its
investment in the Operating Partnership. The Partnership receives quarterly
cash distributions from the Operating Partnership and interest income from
Equities. The Partnership distributes its available cash flow to its partners
on a quarterly basis, representing cash distributions from the Operating
Partnership plus interest income from the Equities note less New York City UBT.
Consequently, the Partnership does not require any additional liquidity or
capital resources.
The Partnership makes quarterly distributions in an amount equal to 99%
of available cash flow to the limited partners (the "Unitholders") and 1% to the
general partner, Oppenheimer Financial Corp. ("Opfin"). For the three and nine
months ended January 31, 1995, the Partnership declared distributions to
Unitholders of $.50 per unit and $1.50 per unit, respectively.
-12-
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
OPPENHEIMER CAPITAL
GENERAL
The Operating Partnership's results of operations include those of its
basic institutional investment management business and those of Quest For Value
Advisors ("Advisors"), Quest For Value Distributors ("Distributors"),
Oppenheimer Capital Futures Management, Oppenheimer Capital Limited, AMA
Investment Advisers, L.P., American Medical Investment Co., L.P. ("AMICO"),
Oppenheimer Capital Trust Company and Saratoga Capital Management.
The value of assets under management decreased to $29.1 billion at
January 31, 1995 from $29.7 billion at January 31, 1994. Institutional and
private account assets under management decreased to $23.5 billion from $24.7
billion. This decrease was primarily due to the loss of two option management
accounts with assets of $1.1 billion. Mutual fund assets under management
increased 12.3% to $5.6 billion from $5.0 billion for the same period.
REVENUES
Total operating revenues increased 12.4% for the three months ended January
31, 1995 to $32,041,000 from $28,505,000 for the three months ended January 31,
1994 and increased 14.0% for the nine months ended January 31, 1995 to
$95,605,000 from $83,830,000 for the nine months ended January 31, 1994. Total
operating revenues include investment management fees, net distribution
assistance and commission income, and interest and dividends.
Investment management fees increased 4.8% for the three months ended
January 31, 1995 to $29,968,000 from $28,588,000 for the three months ended
January 31, 1994 although average assets under management for the three months
ended January 31, 1995 decreased 1.3% to $28.8 billion from $29.1 billion for
the three months ended January 31, 1994. Investment management fees increased
9.3% for the nine months ended January 31, 1995 to $90,655,000 from $82,974,000
for the nine months ended January 31, 1994 as average assets under management
for the nine months ended January 31, 1995 increased 3.2% to $29.2 billion from
$28.3 billion for the nine months ended January 31, 1994. The primary reason
for the increases in investment management fees is higher fee realizations
resulting from a shift in the asset mix toward higher effective fee rate
businesses, including mutual funds and wrap fee accounts. Investment management
fees also increased as a result of performance fees earned during the nine
months ended January 31, 1995 whereas no performance fees were earned in the
prior year period.
Net distribution assistance and commission income increased significantly
to $1,994,000 for the three months ended January 31, 1995 and to $4,766,000 for
the nine months ended January 31, 1995. These increases reflected higher CD
commission income as a result of increased demand for funds by banks.
Commission income also increased during the three months and nine months ended
January 31, 1995 as a result of commission income derived from new businesses
and services offered.
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<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
OPPENHEIMER CAPITAL (Continued)
EXPENSES
Total expenses increased 29.3% for the three months ended January 31, 1995
to $20,928,000 from $16,189,000 for the three months ended January 31, 1994 and
increased 26.6% for the nine months ended January 31, 1995 to $60,360,000 from
$47,686,000 for the nine months ended January 31, 1994. The increase in
expenses reflected the expansion of the Operating Partnership's business,
including new products and services, during the current fiscal year. New
business added during the year included: AMA Investment Advisers, L.P., AMICO,
Oppenheimer Capital Trust Company, and Saratoga Capital Management. In order to
service an expanding institutional account business we added to our client
service staff. To strengthen our efforts in obtaining new institutional
business we added additional marketing and support staff. In addition, we
continued to add to our international division as we added portfolio managers,
researchers, and support staff. As a result of the expansion outlined above,
we added to staff support services such as Information Systems, Legal,
Accounting, and Human Resources.
The major category of expense of the Operating Partnership is employee
compensation and benefits. Compensation and benefits expense increased 26.5%
for the three months ended January 31, 1995 to $13,954,000 from $11,033,000 for
the three months ended January 31, 1994 and increased 25.8% for the nine months
ended January 31, 1995 to $40,966,000 from $32,577,000 for the nine months ended
January 31, 1994. Compensation and benefits expense increased due to additions
to staff in the new businesses entered into during the current fiscal year, the
expanding mutual fund distribution system, and the core investment management
business. In addition, compensation and benefits increased as a result of
higher incentive compensation accruals due to increased new business.
Occupancy expenses increased 13.6% for the three months ended January 31,
1995 to $1,526,000 from $1,343,000 for the three months ended January 31, 1994
and increased 17.7% for the nine months ended January 31, 1995 to $4,793,000
from $4,071,000 for the nine months ended January 31, 1994. This increase was
primarily due to the leasing of additional space to house the Operating
Partnership's expanding business, as well as the new businesses entered into
during the current fiscal year.
General and administrative expenses increased 84.1% for the three months
ended January 31, 1995 to $2,890,000 from $1,570,000 for the three months ended
January 31, 1994. For the nine months ended January 31, 1995, general and
administrative expenses increased 45.7% to $6,917,000 from $4,749,000 for the
nine months ended January 31, 1994. For both the three and nine months ended
January 31, 1995, general and administrative expenses increased as a result of
costs incurred in connection with the start up and development of new
businesses, and increased activities in our traditional businesses. This
increase was primarily due to higher professional services, computer, and
communication costs. In addition, general and administrative expenses increased
due to higher interest expense as a result of higher average borrowing and
increased interest rates.
Promotional expenses increased 14.0% for the three months ended January 31,
1995 to $2,558,000 from $2,243,000 for the three months ended January 31, 1994
and increased 22.2% for the nine months ended January 31, 1995 to $7,684,000
from $6,289,000 for the nine months ended January 31, 1994. Promotional
expenses increased due to higher travel, entertainment, and promotional costs in
the mutual fund and institutional and private account businesses as well as the
new businesses entered into during the current fiscal year.
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<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
OPPENHEIMER CAPITAL (Continued)
OPERATING INCOME
Operating income for the three months ended January 31, 1995 decreased 9.8%
to $11,113,000 from $12,316,000 for the three months ended January 31, 1994 and
decreased 2.5% for the nine months ended January 31, 1995 to $35,245,000 from
$36,144,000 for the nine months ended January 31, 1994. Operating income
decreased as a result of an increase in operating revenues offset by a larger
increase in the operating expenses described above.
INCOME TAXES
The Operating Partnership is not subject to Federal, state, or local income
taxes, which are the obligations of the individual partners. The Operating
Partnership, however, was subject to New York City UBT of $233,000 and $823,000,
respectively, for the three months and nine months ended January 31, 1995.
Prior to January 1, 1995, payment of this tax by the Operating Partnership was
based on Opfin's share of the Operating Partnership's distributable income and
therefore had no effect on the distributions paid to the Partnership. However,
effective January 1, 1995, the distributions to the Partnership and Opfin will
be reduced by the pro rata amount of the New York City UBT applicable to the
partners. The Partnership and Opfin will receive a credit for its pro rata
share of any New York City UBT paid by the Operating Partnership.
LIQUIDITY AND CAPITAL RESOURCES
The Operating Partnership currently borrows funds from a commercial bank to
support increased management fees receivable, to expand its facilities, to
accommodate the growth of its business and to finance acquisitions. The
Operating Partnership has entered into an agreement with a commercial bank to
sell the right to receive 12b-1 and contingent deferred sales fees from the sale
of Class "B"shares of the Quest For Value Family of Funds. In return, the bank
funds the commissions paid to brokers associated with the sales of Class "B"
shares.
The Operating Partnership has established a $15 million credit facility
with a commercial bank to meet operating and financing needs.
The Operating Partnership intends to distribute on a quarterly basis
substantially all its net income to the Partnership and to Opfin. The Operating
Partnership may distribute to the Partnership and to Opfin excess cash after
taking into account the Operating Partnership's financial condition, results of
operations, cash requirements and general economic conditions. On January 31,
1995, the Operating Partnership declared a distribution to its partners of
$10,028,000, payable on February 28, 1995.
The Operating Partnership has two broker-dealer subpartnerships,
Distributors and AMICO, both of which are subject to the rules and regulations
of the Securities and Exchange Commission, which require the maintenance of
minimum net capital. For the nine months ended January 31, 1995, these broker-
dealer subpartnerships met these minimum net capital requirements.
-15-
<PAGE>
PART II. OTHER INFORMATION
Not Applicable
-16-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
OPPENHEIMER CAPITAL, L.P.
BY: OPPENHEIMER FINANCIAL CORP.,
ITS GENERAL PARTNER
Date: March 10, 1995 By: /s/Joseph M. La Motta
----------------------------------------
Joseph M. La Motta
Executive Vice President and Director
of Oppenheimer Financial Corp.;
President and Chief Executive Officer
of Oppenheimer Capital
By: /s/Sheldon M. Siegel
----------------------------------------
Sheldon M. Siegel
Managing Director and Chief Financial
Officer of Oppenheimer Capital
-17-
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
STATEMENTS OF FINANCIAL CONDITION AND STATEMENTS OF INCOME FOUND ON PAGES 3 AND
4 OF THE PARTNERSHIP'S FORM 10-Q FOR THE YEAR-TO-DATE, AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000814562
<NAME> OPPENHEIMER CAPITAL, L.P.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> APR-30-1995
<PERIOD-START> MAY-01-1994
<PERIOD-END> JAN-31-1995
<CASH> 134
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 19,006<F1>
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 96,311<F2>
<CURRENT-LIABILITIES> 7,645
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 88,666<F3>
<TOTAL-LIABILITY-AND-EQUITY> 96,311
<SALES> 0
<TOTAL-REVENUES> 25,963
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,895
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 23,068
<INCOME-TAX> 0
<INCOME-CONTINUING> 23,068
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 23,068
<EPS-PRIMARY> 1.51
<EPS-DILUTED> 1.51
<FN>
<F1>CURRENT ASSETS IS COMPRISED OF CASH ($134), INVESTMENT IN OPPENHEIMER CAPITAL
($11,504), DISTRIBUTION RECEIVABLE ($6,800), INTEREST RECEIVABLE ($547), AND
OTHER ASSETS ($21)
<F2>TOTAL ASSETS INCLUDES CURRENT ASSETS PLUS A NON-TRADE NOTE RECEIVABLE ($32,193)
AND GOODWILL ($45,112)
<F3>OTHER SHAREHOLDERS EQUITY IS COMPRISED OF GENERAL PARTNER'S CAPITAL ($900) AND
LIMITED PARTNERS' CAPITAL ($87,766)
</FN>
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
STATEMENTS OF FINANCIAL CONDITION AND STATEMENTS OF INCOME FOUND ON PAGES 8 AND
9 OF THE PARTNERSHIP'S FORM 10-Q FOR THE YEAR-TO-DATE, AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000814562
<NAME> OPPENHEIMER CAPITAL
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> APR-30-1995
<PERIOD-START> MAY-01-1994
<PERIOD-END> JAN-31-1995
<CASH> 7,729
<SECURITIES> 0
<RECEIVABLES> 31,429
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 39,158
<PP&E> 5,517
<DEPRECIATION> 1,933
<TOTAL-ASSETS> 54,440
<CURRENT-LIABILITIES> 23,985
<BONDS> 13,193<F1>
<COMMON> 0
0
0
<OTHER-SE> 17,262<F2>
<TOTAL-LIABILITY-AND-EQUITY> 54,440
<SALES> 0
<TOTAL-REVENUES> 95,605
<CGS> 0
<TOTAL-COSTS> 59,814
<OTHER-EXPENSES> (3)<F4>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 546
<INCOME-PRETAX> 35,245
<INCOME-TAX> 823<F3>
<INCOME-CONTINUING> 34,425
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 34,425
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1>BONDS CONSIST OF A LOAN PAYABLE ($11,993) AND A NOTE PAYABLE ($1,200)
<F2>OTHER SHAREHOLDERS EQUITY IS COMPRISED OF PARTNERS' CAPITAL ($17,126) AND
MINORITY INTEREST ($136)
<F3>INCOME TAX AMOUNT REPRESENTS NEW YORK CITY UNINCORPORATED BUSINESS TAXES
<F4>OTHER EXPENSES REPRESENTS MINORITY INTEREST AMOUNT
</FN>
</TABLE>
