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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 15, 1998
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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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Item 5. Other Events
(a) Copy of Registrant's press release which, among other things,
reported financial results for the three months and six months
period ended June 30, 1998.
Item 7. Financial Statements, Pro Forma Financial Information And Exhibits
(c) Exhibits
99(a) Copy of Registrant's press release which, among other
things, reported results for the three months and six
months period ended June 30, 1998.
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SIGNATURE
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 hereunto duly authorized.
PAINE WEBBER GROUP INC.
(REGISTRANT)
By /s/ Regina Dolan
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Name: Regina Dolan
Title: Senior Vice President and
Chief Financial Officer
DATE: July 16, 1998
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EXHIBIT INDEX
Item No. Description
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99(a) Copy of Registrant's press release
which, among other things, reported
results for three months and six months
period ending June 30, 1998
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Exhibit 99(a)
PaineWebber Letterhead
N E W S R E L E A S E
PAINEWEBBER REPORTS RECORD QUARTERLY EARNINGS
- NET INCOME RISES 39 PERCENT, TO $129.5 MILLION -
- EARNINGS PER SHARE AT 82 CENTS -
NEW YORK, July 13, 1998 - Paine Webber Group Inc. reported today the
strongest quarterly earnings and revenues in the firm's 118-year history. Net
income for the period ended June 30, 1998, was a record $129.5 million, or 82
cents per diluted share, an increase of 39 percent from $93.1 million, or 58
cents per diluted share, for the second quarter of 1997. Net revenues for the
second quarter of 1998 were $1.16 billion, an increase of 19 percent from
$975.9 million in the corresponding period a year ago.
Return on common equity for the quarter was 23.7 percent, consistent with
the average return on equity of 22.0 percent during the last 12 quarters. As of
June 30, 1998, the firm had total capital of $6.56 billion, an all-time high.
Records established in the second quarter (with comparisons to a year ago)
include:
- - Assets under control - $329.3 billion, up 22 percent from $269.7 billion;
- - Wrap-fee assets - $26.5 billion, up 47 percent from $18.0 billion;
- - Assets under management - $54.7 billion, up 21 percent from $45.1 billion;
- - Recurring fee income - $886 million annualized, up 39 percent from $637
million.
Results reflected strong performance from all key business areas,
including:
- - Assets per investment executive reached $53.3 million, reflecting the success
of the firm's asset gathering strategy;
- - Mitchell Hutchins continued its strong investment performance. Our funds
ranked in the 34th percentile of the Lipper rankings on an asset-weighted
basis year-to-date, and 82 percent of our fund assets are in the top 50
percent of the Lipper rankings;
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Paine Webber Group Inc.
Page 2
- - The Municipal Securities Group achieved a record in underwriting volume
in the second quarter, and ranked No. 3 in the industry in senior managed
negotiated underwritings for the first half of 1998;
- - Investment banking revenues reflect the strong levels of merger and
acquisition activity, and included a $400 million initial public offering
for the PaineWebber Equity Trust REIT Series 1 and the completion of the
$2.1 billion Patriot American Hospitality/Interstate merger;
- - The ratio of recurring fee income, combined with net margin interest, to
fixed expenses reached 94 percent.
"We are pleased with our continued record performance, which we believe is
the result of our strategy of gathering the assets of individual investors and
providing them with the best investment advice in the industry," said Donald B.
Marron, PaineWebber's chairman and chief executive officer. "Our results reflect
the strength of our distribution franchise coupled with product origination.
This performance, combined with the higher productivity of our investment
executives and effective cost control, continues to enhance the quality of our
earnings and opportunities for growth."
Paine Webber Group Inc., together with its subsidiaries, serves the
investment and capital needs of a worldwide client base. The firm employs 17,045
people in 300 offices. As of June 30, 1998, the book value per share was $15.38.
-Two tables to follow-
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PAINE WEBBER GROUP, INC.
QUARTERLY STATISTICAL SUPPLEMENT - OPERATING RESULTS [UNAUDITED]
<TABLE>
<CAPTION>
2Q 98 1Q 98 4Q 97 3Q 97 2Q 97
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<S> <C> <C> <C> <C> <C>
ROE Common 23.7% 23.5% 22.3% 24.3% 20.1%
Income Before Taxes & Minority Interest
as a Percentage of Net Revenue 18.2% 17.8% 16.4% 16.8% 15.5%
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E.P.S. [Diluted] $0.82 $0.77 $0.68 $0.70 $0.58
Diluted Shares [Millions] 151.2 149.5 150.9 152.1 151.7
Dividends Paid Per Common Share $0.11 $0.11 $0.11 $0.10 $0.10
Book Value Per Common Share $15.38 $14.46 $13.80 $13.28 $13.03
Common Shares Outstanding [Millions] 140.6 139.3 139.9 132.3 137.2
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Total Capital [$Billions] $6.56 $6.14 $5.91 $5.73 $5.49
Total Shareholders' Equity [$Billions] $2.16 $2.02 $1.93 $1.86 $1.84
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Assets Under Control [$Billions] $329.3 $322.6 $297.1 $288.6 $269.7
Assets Under Management [$Billions] $54.7 $54.0 $48.9 $48.1 $45.1
Money Market Funds 28.6 29.0 25.9 25.6 24.2
Long Term Mutual Funds 13.2 12.4 11.3 11.1 10.2
Institutional and Other 12.9 12.6 11.7 11.4 10.7
Wrap Fee Assets [$Billions] $26.5 $24.8 $21.4 $20.5 $18.0
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Recurring Fees (YTD Annualized) $886 $836 $700 $665 $637
[$Millions]
Recurring Fees (Incl. Margin Interest) -
As a % of Fixed Costs 94% 86% 84% 80% 74%
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Employees 17,045 16,828 16,627 16,437 16,105
Investment Executives 6,551 6,401 6,249 6,140 6,076
Sales Offices 300 299 299 299 298
</TABLE>
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PAINE WEBBER GROUP INC.
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
Quarter Ended June 30, Six Months Ended June 30,
1998 1997 1998 1997
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<S> <C> <C> <C> <C>
REVENUES
Commissions $ 402,094 $ 346,911 $ 810,218 $ 717,297
Principal Transactions 244,146 255,225 521,109 511,761
Asset Management 182,128 125,327 340,864 246,295
Investment Banking 176,687 110,938 301,656 208,712
Interest 860,707 747,138 1.663,085 1,391,091
Other 34,521 34,230 68,461 72,304
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TOTAL REVENUES 1,900,283 1,619,769 3,705,393 3,147,460
Interest Expense 738,115 643,829 1,428,248 1,186,686
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NET REVENUES 1,162,168 975,940 2,277,145 1,960,774
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NON-INTEREST EXPENSES
Compensation and Benefits 682,088 574,231 1,332,663 1,148,248
Office & Equipment 74,862 68,757 147,402 136,824
Communications 37,140 37,762 74,896 75,969
Business Development 26,290 18,190 48,369 36,810
Brokerage, Cleaning & Exchange Fees 22,081 21,507 47,577 44,062
Professional Services 30,390 29,276 63,982 56,816
Other Expenses 77,318 74,890 152,062 145,814
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TOTAL NON-INTEREST EXPENSES 950,169 824,613 1,866,951 1,644,543
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INCOME BEFORE INCOME TAXES & MINORITY INTEREST 211,999 151,327 410,194 316,231
Provision for Income Taxes 74,437 50,142 143,836 109,362
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INCOME BEFORE MINORITY INTEREST 137,562 101,185 266,358 206,869
Minority Interest 8,061 8,061 16,122 12,910
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NET INCOME $ 129,501 $ 93,124 $ 250,236 $ 193,959
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NET INCOME APPLICABLE TO COMMON SHARES $ 123,589 $ 85,746 $ 238,413 $ 179,202
EARNINGS PER SHARE
BASIC $0.88 $0.66 $1.71 $1.38
DILUTED $0.82 $0.58 $1.59 $1.20
WEIGHTED AVERAGE COMMON SHARES
BASIC 140,033,000 129,875,000 139,610,000 130,161,000
DILUTED 151,162,000 151,696,000 150,178,000 152,154,000
</TABLE>
