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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) April 13, 1999
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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
On April 13, 1999, the Registrant released financial information with
respect to the three month period ending March 31, 1999. A copy
of the press release containing such financial information is included
herein as Exhibit 99.1 to this Report.
Item 7. Financial Statements, Pro Forma Financial Information And Exhibits
(c) Exhibits
99.1 Copy of Registrant's press release which, among other
things, reported results for the three month
period ending March 31, 1999.
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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: May 13, 1999
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EXHIBIT INDEX
Item No. Description
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99.1 Copy of Registrant's press release
which, among other things, reported
results for the three month period
ending March 31, 1999
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PAINE WEBBER GROUP REPORTS ALL-TIME RECORD
QUARTERLY EARNINGS
-- NET INCOME RISES TO $160.6 MILLION, A 33 PERCENT INCREASE FROM Q1 1998 --
-- EARNINGS PER SHARE AT $1.01 --
NEW YORK, April 13, 1999 - Paine Webber Group Inc. reported today the
strongest quarterly earnings and revenues in the firm's 119-year history. Net
income for the period ended March 31, 1999, was $160.6 million, or $1.01 per
diluted share, an increase of 33 percent from $120.7 million, or $0.77 per
diluted share, for the first quarter of 1998. Net revenues for the first quarter
of 1999 were $1.3 billion, an increase of 17.9 percent from $1.11 billion in the
corresponding period a year ago.
Return on common equity for the quarter was 24.6 percent, compared with
23.5 percent for the year-ago period. As of March 31, 1999, the firm had total
capital of $7.54 billion, an all-time high.
"We are pleased to report another quarter of record earnings, which
reflect the strong momentum built by the firm across all businesses," said
Donald B. Marron, PaineWebber's chairman and chief executive officer. "A key
element of our strategy is the integration of technology with quality investment
advice and services to enhance the gathering of assets of traditional affluent
clients and cultivate a new generation of investors. We continue to accelerate
the development and implementation of strategic initiatives to aggressively
drive the firm's growth in new directions."
Among the records in the quarter are the following, with percentage
increases from the first quarter of 1998 in parentheses:
- Net revenues of $1.3 billion (18 percent increase)
- Commission income of $478.9 million (17 percent increase)
- Asset management revenues of $206.1 million (30 percent
increase)
- Principal transaction revenues of $314.2 million (13 percent
increase)
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Paine Webber Group Inc.
Page 2
- Assets under control of $367.1 billion (14 percent increase)
- Assets under management of $63.0 billion (17 percent increase)
- Wrap fee assets of $34.4 billion (39 percent increase)
- Recurring fee income, annualized, of $1.05 billion (25 percent
increase)
- Ratio of recurring fees and net margin interest to fixed
expenses at 95 percent
- Number of financial advisors at 7,033
The following measurements, which are also records, reflect the
continued financial strengthening of the firm:
- Shareholders' equity at $2.6 billion
- Total capital at $7.54 billion
- Book value at $17.77
Among the operational highlights are the following:
- Net new client assets flowing into the firm averaged $155
million per day, a 50.4 percent increase from the first
quarter of 1998.
- The Municipal Securities Group achieved the No. 1 industry
ranking in negotiated senior underwritings for the second
consecutive quarter.
- Strong performance by our institutional businesses, led by a
record quarter in Global Fixed Income, contributed
significantly to the firm's overall results.
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Paine Webber Group Inc.
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ONLINE INITIATIVES
A key element of the firm's strategy is the integration of online
technology with traditional broker services to deliver investment advice to
PaineWebber's current clients and attract a new generation of investors. Among
the current initiatives:
- The firm is accelerating enhancements to its client online
service, the PaineWebber EDGE, which is used by 85,685
households, representing almost $74 billion in assets. Since
the EDGE was introduced in the first quarter of 1997, EDGE
assets have grown at a compounded annual growth rate of 187
percent. Online trading will be available through the EDGE in
the third quarter of 1999. These enhancements support Internet
execution and account administration, portfolio management and
monitoring, asset consolidation, online client/financial
advisor interactivity, and client/financial advisor service
customization.
- PaineWebber will complete the rollout of ConsultWorks, the
firm's new financial advisor workstation, in the second
quarter. The online capabilities of the ConsultWorks platform
allow our financial advisors to deliver customized information
and recommendations to clients faster and more efficiently 24
hours a day.
- PaineWebber signed an agreement to acquire a 25 percent equity
stake in Kingland Companies, a leading developer of
Internet-based solutions for the financial services industry.
PaineWebber partnered with Kingland to introduce CSC
Connection, a browser-based account tool designed to provide
correspondent clients with customized market data and other
broker applications.
Paine Webber Group Inc., together with its subsidiaries, serves the
investment and capital needs of a worldwide client base. The firm employs 18,051
people in 305 offices.
THIS NEWS RELEASE AND MORE INFORMATION ABOUT PAINE WEBBER GROUP INC.
CAN BE FOUND ON OUR CORPORATE SITE ON THE WORLD WIDE WEB,
WWW.PAINEWEBBER.COM.
-- Two tables to follow -
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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 March 31,
1999 1998
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<S> <C> <C>
REVENUES
Commissions $ 478,873 $ 408,124
Principal Transactions 314,208 276,963
Asset Management 206,051 158,736
Investment Banking 125,953 124,969
Interest 757,160 802,378
Other 41,065 33,940
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TOTAL REVENUES 1,923,310 1,805,110
Interest Expense 608,419 690,133
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NET REVENUES 1,314,891 1,114,977
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NON-INTEREST EXPENSES
Compensation and Benefits 768,714 650,575
Office & Equipment 81,452 72,540
Communications 42,203 37,756
Business Development 23,867 22,079
Brokerage, Clearing & Exchange Fees 24,390 25,496
Professional Services 30,452 33,592
Other Expenses 78,794 74,744
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TOTAL NON-INTEREST EXPENSES 1,049,872 916,782
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INCOME BEFORE INCOME TAXES & MINORITY INTEREST 265,019 198,195
Provision for Income Taxes 96,359 69,399
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INCOME BEFORE MINORITY INTEREST 168,660 128,796
Minority Interest 8,061 8,061
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NET INCOME $ 160,599 $ 120,735
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NET INCOME APPLICABLE TO COMMON SHARES $ 154,650 $ 114,823
EARNINGS PER SHARE
BASIC $ 1.06 $ 0.82
DILUTED $ 1.01 $ 0.77
WEIGHTED AVERAGE COMMON SHARES
BASIC 145,599,000 139,286,000
DILUTED 153,729,000 149,493,000
</TABLE>
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PAINE WEBBER GROUP INC.
Quarterly Statistical Supplement - Operating Results [unaudited]
<TABLE>
<CAPTION>
1Q 99 4Q 98 3Q 98 2Q 98 1Q 98
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<S> <C> <C> <C> <C> <C>
ROE Common 24.6% 16.3% 14.0% 23.7% 23.5%
Income Before Taxes & Minority Interest
as a Percentage of Net Revenue 20.2% 15.2% 13.4% 18.2% 17.8%
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E.P.S. [Diluted] $ 1.01 $ 0.63 $ 0.51 $ 0.82 $ 0.77
Diluted Shares [Millions] 153.7 150.9 151.4 151.2 149.5
Dividends Paid Per Common Share $ 0.11 $ 0.11 $ 0.11 $ 0.11 $ 0.11
Book Value Per Common Share $ 17.77 $ 16.76 $ 15.86 $ 15.38 $ 14.46
Common Shares Outstanding [Millions] 145.8 145.5 142.8 140.6 139.3
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Total Capital [$Billions] $ 7.54 $ 7.28 $ 6.64 $ 6.56 $ 6.14
Total Shareholders' Equity [$Billions] $ 2.59 $ 2.44 $ 2.26 $ 2.16 $ 2.02
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Assets Under Control [$Billions] $ 367.1 $ 351.7 $ 313.2 $ 329.3 $ 322.6
Assets Under Management [$Billions] $ 63.0 $ 58.5 $ 54.1 $ 54.7 $ 54.0
Money Market Funds 34.7 31.4 29.9 28.6 29.0
Long Term Mutual Funds 14.2 13.8 12.5 13.2 12.4
Institutional and Other 14.1 13.3 11.7 12.9 12.6
Wrap Fee Assets [$Billions] $ 34.4 $ 30.6 $ 24.7 $ 26.5 $ 24.8
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Client Assets on "The Edge" [$Billions] * $ 73.8 $ 60.1 $ 44.8 $ 36.9 $ 32.3
Households on "The Edge" * 86,000 71,000 59,000 51,000 43,000
RMA Accounts ** 530,900 501,900 475,200 457,300 440,300
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Recurring Fees (YTD Annualized) $ 1,047 $ 921 $ 908 $ 886 $ 836
[$Millions]
Recurring Fees (Incl. Margin Interest) -
As a % of Fixed Costs 95% 91% 93% 94% 86%
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Employees 18,051 17,767 17,424 17,045 16,828
Financial Advisors 7,033 6,951 6,739 6,551 6,401
Sales Offices 305 303 299 300 299
</TABLE>
* Paine Webber's client on-line service
** Paine Webber's central asset account
