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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) July 22, 1994
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PAINE WEBBER GROUP, INC.
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(Exact name of registrant as specified in its charter)
Delaware 1-7367 13-2760086
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
1285 Avenue of the Americas, New York, New York 10019
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 713-2000
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Not Applicable
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(Former name or address, if changed since last report)
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Paine Webber Group Inc.
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Item 5. Other Events
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(a) Copy of the Registrant's press release which, among
other things, reported results for the second quarter
of 1994.
SIGNATURE
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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.
PAINE WEBBER GROUP INC.
By: /s/ REGINA DOLAN
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Regina Dolan
Vice President and
Chief Financial Officer
Dated: July 28, 1994
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EXHIBIT INDEX
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(a) Copy of the Registrant's press release which, among other things, reported
results for the second quarter of 1994.
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PaineWebber
Contact:
Jerome B. Johnston Jeffrey Z. Taufield
PaineWebber Incorporated Kekst and Company
1200 Harbor Boulevard 437 Madison Avenue
Weehawken, NJ 07087 New York, NY 10022
201 902-6718 212 593-2655
News Release
FOR IMMEDIATE RELEASE
PAINEWEBBER REPORTS SECOND QUARTER RESULTS
-Net Earnings of $0.12 Per Share Before Non-Recurring Mutual Fund Charge-
-Fully Diluted Loss Per Share of $0.35-
NEW YORK, July 22, 1994 -- Paine Webber Group Inc. today reported results for
the second quarter of 1994.
For the quarter:
o Net earnings before a previously announced charge for the
Short-Term U.S. Government Income Fund were $9.1 million or $0.12 per
fully diluted share.
o Net loss, including the one-time charge, was $25.1 million or
$0.35 per fully diluted share, compared to net earnings of $59.3
million or $0.69 per fully diluted share a year ago.
o Net results in the quarter include a non-recurring after-tax
charge of approximately $34 million related to the Short-Term U.S.
Government Income Fund.
o Revenues, including net interest, decreased 15.7% to $579.0 million
from the prior year quarter of $686.5 million.
For the six-month period:
o Net earnings, excluding the one-time charge, were $64.8 million
or $0.83 on a fully diluted per share basis. Net earnings, including
the charge, were $30.6 million or $0.41 per fully diluted share versus
$130.2 million or $1.53 for the first six months of 1993.
o Revenues, including net interest, were $1,331.0 million, 4%
lower than the $1,383.2 million reported in the first six months of
1993.
more...
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Donald B. Marron, PaineWebber's chairman and chief executive officer,
said: "While this was a difficult quarter as our results were burdened by both
the non-recurring mutual fund charge and reduced activity amongst our
institutional and retail customers, we are pleased that virtually all our
businesses generated positive operating results. To meet the challenges of this
significantly changed environment, we have adjusted inventory levels,
implemented a program to reduce discretionary spending and continued our
strategic investments in recruiting producers and in technology."
Mr. Marron added, "In spite of the difficulty of this period, we
believe our key strategies continue to serve us well. We have a strong, liquid
balance sheet, a solid recurring fee base, and a diversified group of
businesses."
Discussing the details of the quarter, Mr. Marron noted the following:
o Retail Sales and Marketing's profitability and
success in gathering client assets continued
despite a 14% decrease in revenues from the first
quarter of 1994. Assets under control rose 8% from
a year ago to $138.5 billion as of June 30, 1994.
In addition, the number of investment executives
totaled 5,500 at the end of the quarter, 300 more
than last year.
o Institutional Sales and Trading's equity sales
revenues were strong though lower than last year.
Fixed income results were affected by the
difficult market environment, particularly in the
mortgage business.
o Investment Banking was profitable, although
revenues declined 39% from a year ago due to lower
levels of corporate and municipal offerings. In
the current quarter, the firm managed or co-
managed:
o 206 municipal offerings raising
$10.0 billion
o 21 equity offerings raising $2.6 billion
o 14 corporate debt offerings raising $2.3 billion
o PaineWebber's assets under management were $36.3
billion at the end of the quarter, a 3% decrease
from last year.
PaineWebber also announced today that it has made a firm bid, subject
to regulatory review, to purchase two structured floating rate securities from
the PaineWebber Short-Term U.S. Government Income Fund, a mutual fund managed
by its investment subsidiary, Mitchell Hutchins Asset Management Inc. This bid
to purchase these securities is for an aggregate price of approximately $180
million, their current value as reflected by the Fund.
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Although these securities are U.S. government agency or AAA-rated and have
attractive cash flows, due to the recent reduction in the size of the Fund,
these securities now constitute an increased percentage of total assets. This
transaction will permit the Fund to maintain an appropriate mix of investments
based on the Fund's investment objectives and current size.
PaineWebber and Mitchell Hutchins also announced that Pacific Investment
Management Company ("PIMCO") has agreed to act as a consultant to Mitchell
Hutchins in connection with the Fund's portfolio. Founded in 1971, PIMCO is one
of the largest specialty fixed income fund managers, with assets under
management exceeding $50 billion, including $23.5 billion in mortgage-backed
securities. Mitchell Hutchins will promptly seek board and shareholder approval
to retain PIMCO as sub-advisor to Mitchell Hutchins in managing the Fund.
Paine Webber Group Inc., together with its subsidiaries PaineWebber
Incorporated and PaineWebber International, serves the international investment
and capital needs of a worldwide client base. The firm employs approximately
14,700 people in 283 offices worldwide. Total capital was $3.5 billion at June
30, 1994 and book value per share was $16.56. PaineWebber's total equity was
$1.2 billion.
- Two Tables Follow -
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PAINE WEBBER GROUP INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
Quarter Ended June 30, Six Months Ended June 30,
1994 1993 1994 1993
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<S> <C> <C> <C> <C>
REVENUES
Commissions $240,729 $239,980 $521,385 $482,111
Interest 385,069 328,111 783,106 617,595
Principal Transactions 91,687 181,910 275,561 384,505
Investment Banking 59,140 96,597 156,734 198,286
Asset Management 89,589 77,419 180,972 150,755
Other 36,135 30,919 67,039 52,385
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TOTAL REVENUES 902,349 954,936 1,984,797 1,885,637
Interest Expense 323,383 268,473 653,754 502,424
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NET REVENUES 578,966 686,463 1,331,043 1,383,213
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NON-INTEREST EXPENSES
Compensation and Benefits 344,729 388,568 776,443 783,878
Office & Equipment 56,399 50,685 111,825 102,232
Communications 33,023 31,017 65,021 60,541
Business Development 21,544 23,000 43,551 41,698
Professional Services 22,471 15,846 40,801 29,158
Brokerage, Clearing, &
Exchange Fees 20,488 20,347 42,466 39,302
Other Expenses 122,070 59,785 199,947 112,986
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TOTAL NON-INTEREST EXPENSES 620,724 589,248 1,280,054 1,169,795
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EARNINGS (LOSS) BEFORE INCOME
TAXES (41,758) 97,215 50,989 213,418
PROVISION (BENEFIT) FOR INCOME
TAXES (16,703) 37,914 20,396 83,233
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NET EARNINGS (LOSS) ($25,055) $59,301 $30,593 $130,185
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PREFERRED STOCK DIVIDENDS $0 $533 $0 $1,066
EARNINGS (LOSS) APPLICABLE TO
COMMON SHARES ($25,055) $58,768 $30,593 $129,119
EARNINGS (LOSS) PER SHARE
PRIMARY * ($0.35) $0.74 $0.41 $1.62
FULLY DILUTED * ($0.35) $0.69 $0.41 $1.53
WEIGHTED AVERAGE COMMON SHARES
PRIMARY * 70,729,000 79,776,000 79,197,000 79,591,000
FULLY DILUTED * 70,729,000 86,484,000 80,603,000 86,535,000
</TABLE>
* Retroactively adjusted to reflect a three-for-two common stock split in the
form of a 50% stock dividend effective March 10, 1994 to stockholders of
record on February 17, 1994.
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PAINE WEBBER GROUP INC.
QUARTERLY STATISTICAL SUPPLEMENT [UNAUDITED]
<TABLE>
<CAPTION>
2Q94 1Q94 4Q93 3Q93 2Q93
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<S> <C> <C> <C> <C> <C>
ROE Common (8.2%) 18.1% 19.7% 21.0% 22.5%
Pre-Tax Margin (7.2%) 12.3% 12.6% 13.5% 14.2%
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E.P.S. [fully diluted] ($0.35) $0.70 $0.72 $0.72 $0.69
Fully Diluted Shares [Millions] 70.7 81.3 79.3 84.7 86.5
Dividends Paid Per Common Share $0.12 $0.12 $0.10 $0.10 $0.10
Book Value Per Common Share $16.56 $16.96 $16.29 $15.54 $15.59
Common Shares Outstanding [Millions] 76.1 76.7 77.0 73.9 73.7
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Total Capital [$Billion] $3.53 $3.51 $3.13 $2.79 $2.86
Total Shareholders Equity [$Billions] $1.21 $1.25 $1.20 $1.15 $1.20
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Assets Under Control [$Billions] $138.5 $136.9 $139.1 $133.9 $127.8
Assets Under Management [$Billions] $36.3 $37.4 $38.9 $38.9 $37.6
Money Market Funds 13.5 13.6 12.8 13.0 12.9
Long Term Mutual Funds 10.6 12.0 12.7 11.8 10.5
Institutional and Other 12.2 11.8 13.4 14.1 14.2
Wrap Fee Assets [$Billions] $6.3 $6.0 $5.8 $5.4 $4.9
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Recurring Fees (YTD Annualized) $443 $446 $392 $378 $367
[$Millions]
Recurring Fees/Fixed Expenses 51% 54% 54% 50% 49%
[Percent]
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Employees 14,700 14,650 14,400 14,200 13,900
Investment Executives 5,500 5,475 5,380 5,300 5,200
Sales Offices 283 282 281 272 275
</TABLE>
7/21/94
