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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) October 12, 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 October 12, 1999, the Registrant released financial information with
respect to the three and nine month periods ending September 30, 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 and nine month
periods ending September 30, 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: October 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 and nine month
periods ending September 30, 1999
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[PAINE WEBBER LETTERHEAD]
EXHIBIT 99.1
PAINE WEBBER GROUP REPORTS
THIRD QUARTERS EARNINGS RESULTS
- NET INCOME RISES TO $138.2 MILLION, A 66.7 PERCENT INCREASE FROM Q3 1998 -
- EARNINGS PER SHARE AT $0.86 -
NEW YORK, October 12, 1999 - Paine Webber Group Inc. reported today
quarterly earnings for the third quarter of 1999. Net income for the period
ended September 30, 1999, was $138.2 million, or $0.86 per diluted share, an
increase of 66.7 percent from $82.9 million, or $0.51 per diluted share, for
the third quarter of 1998. Net revenues for the third quarter of 1999 were
$1.237 billion, an increase of 19.9 percent from $1.031 billion in the
corresponding period a year ago.
Return on common equity for the quarter was 19.2 percent, compared with
14.0 percent for the year-ago period. As of September 30, 1999, the firm had
total capital of $8.36 billion, an all-time high.
"We are pleased to report another quarter of strong earnings, with
results for the first nine months of 1999 exceeding the full twelve months
results of the previous record year," said Donald B. Marron, PaineWebber's
chairman and chief executive officer. "Particularly encouraging was the progress
made in the enhancement of our technology-based services that together with the
high-quality advice we offer affluent clients, provide PaineWebber with clear
differentiation. This strategy, coupled with the growth of our distribution
force, should continue to fuel significant asset growth and increased revenues
in the years ahead."
Among the highlights in the quarter are the following, with percentage
increases from the third quarter of 1998 in parentheses:
- - Recurring fee income, annualized, of $1.124 billion, a record (24 percent
increase)
- - Ratio of recurring fees and net margin interest to fixed expenses at 100
percent, a record
- - Asset management revenues of $235.7 million, a record (28 percent
increase)
- - Number of financial advisors at 7,249
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Paine Webber Group Inc.
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The following measurements, all of which are records, reflect the continued
financial strengthening of the firm:
- - Shareholders' equity at $2.81 billion
- - Total capital at $8.36 billion
- - Book value at $19.36
Among the operating highlights are the following:
- - PaineWebber has introduced PaineWebber InsightOne, an asset-based fee
account that offers clients a pricing alternative and a conduit to all of
the firm's technology and services, including unlimited online trading.
This combination of a personal financial advisor with a robust suite of
online services is intended to appeal to affluent investors, and is a
continuation of the firm's strategy to accelerate asset gathering.
InsightOne requires minimum assets of $100,000 at a minimum fee of $1,500
per year.
- - Mitchell Hutchins Asset Management, the firm's investment management
subsidiary, introduced a new mutual fund, the PaineWebber Strategy Fund,
based on the firm's Highlighted Stocks list.
- - During the third quarter of 1999, use of PaineWebber EDGE reached 124,000
client households, representing almost $100 billion in assets. EDGE assets
have grown at a compounded annual growth rate of 167 percent since the EDGE
was introduced in the first quarter of 1997, specifically:
1999
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Jun Jul Aug Sept
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EDGE Client Assets ($b) 89.4 93.7 97.9 99.4
EDGE Households (000s) 102 110 114 124
Assets per EDGE Household ($000s) 872 849 856 802
ONLINE AND TECHNOLOGY INITIATIVES
The firm continues to enhance the relationships between its financial
advisors and its clients, and provide more choices to a new generation of
investors, through online technology. Among the current accomplishments and
initiatives:
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Paine Webber Group Inc.
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- - Consistent with the firm's focus on the highest level of service for fee-
based accounts, PaineWebber EDGE, the online client service, introduced the
Managed Accounts Online Center which provides advanced, online performance
reporting for managed account clients. This service, unique among
full-service brokers, will allow clients to monitor portfolio performance
for multiple managed accounts across monthly, quarterly, six-month and
year-to-date time periods, and review asset allocations and profiles and
market reports of individual money managers.
- - Customization of PaineWebber EDGE information by individual clients is
another important feature. Clients can now select from a variety of market
data to customize home screens and content, easily accessing their
investment portfolios, various market indexes, and personal stock
selections, with valuations supplied on a real time basis.
Paine Webber Group Inc., together with its subsidiaries, serves the
investment and capital needs of a worldwide client base. The firm employs 18,988
people in 309 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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<TABLE>
<CAPTION>
PAINE WEBBER GROUP INC.
QUARTERLY STATISTICAL SUPPLEMENT - OPERATING RESULTS [UNAUDITED]
<S> <C> <C> <C> <C> <C>
3Q 99 2Q 99 1Q 99 4Q 98 3Q 98
ROE Common (Annualized) 19.2% 23.8% 24.6% 16.3% 14.0%
Income Before Taxes & Minority Interest
as a Percentage of Net Revenues 18.3% 20.0% 20.2% 15.2% 13.4%
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E.P.S. [Diluted] $0.86 $1.02 $1.01 $0.63 $0.51
Diluted Shares [Millions] 153.9 155.0 153.7 150.9 151.4
Dividends Paid Per Common Share $0.11 $0.11 $0.11 $0.11 $0.11
Book Value Per Common Share $19.36 $18.58 $17.77 $16.76 $15.86
Common Shares Outstanding [Millions] 145.2 145.4 145.8 145.5 142.8
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Total Capital [$Billions] $8.36 $8.23 $7.54 $7.28 $6.64
Total Shareholders' Equity [$Billions] $2.81 $2.70 $2.59 $2.44 $2.26
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Assets Under Control [$Billions] $377.2 $384.2 $367.1 $351.7 $313.2
Assets Under Management [$Billions] $59.5 $60.0 $63.0 $58.5 $54.1
Money Market Funds 33.5 33.2 34.7 31.4 29.9
Long Term Mutual Funds 14.2 14.7 14.2 13.8 12.5
Institutional and Other 11.8 12.1 14.1 13.3 11.7
Wrap Fee Assets [$Billions] $37.5 $37.9 $34.4 $30.6 $24.7
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Client Assets on "The Edge" [$Billions]* $99.4 $89.4 $73.8 $60.1 $44.8
Households on "The Edge"* 124,000 102,500 86,000 71,000 59,000
RMA Accounts** 591,900 558,800 530,900 501,900 475,200
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Recurring Fees (YTD Annualized) $1,124 $1,091 $1,047 $921 $908
[$Millions]
Recurring Fees (Incl. Margin Interest) -
As a % of Fixed Costs 100% 98% 95% 91% 93%
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Employees 18,988 18,452 18,051 17,767 17,424
Financial Advisors 7,249 7,118 7,033 6,951 6,739
Sales Offices 309 307 305 303 299
</TABLE>
* Paine Webber's client on-line service
** Paine Webber's central asset account
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<TABLE>
<CAPTION>
PAINE WEBBER GROUP INC.
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)
(UNAUDITED)
Quarter Ended September 30, Nine Months Ended September 30,
1999 1998 1999 1998
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<S> <C> <C> <C> <C>
REVENUES
Commissions $ 451,341 $ 410,832 $ 1,419,092 $ 1,221,050
Principal Transactions 235,914 148,453 829,968 669,562
Asset Management 235,712 184,691 666,250 525,555
Investment Banking 134,235 119,629 420,321 421,285
Interest 762,205 909,168 2,289,636 2,572,253
Other 40,785 36,375 129,213 104,836
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TOTAL REVENUES 1,860,192 1,809,148 5,754,480 5,514,541
Interest Expense 623,025 777,672 1,854,515 2,205,920
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NET REVENUES 1,237,167 1,031,476 3,899,965 3,308,621
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NON-INTEREST EXPENSES
Compensation and Benefits 711,783 616,927 2,260,575 1,949,590
Office & Equipment 89,159 76,170 259,941 223,572
Communications 42,331 38,791 127,179 113,687
Business Development 30,861 27,568 83,262 75,937
Brokerage, Clearing & Exchange Fees 23,391 24,270 71,268 71,847
Professional Services 33,469 30,581 96,318 94,563
Other Expenses 80,188 78,570 240,751 230,632
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TOTAL NON-INTEREST EXPENSES 1,011,182 892,877 3,139,294 2,759,828
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INCOME BEFORE INCOME TAXES & MINORITY INTEREST 225,985 138,599 760,671 548,793
Provision for Income Taxes 79,722 47,646 274,183 191,482
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INCOME BEFORE MINORITY INTEREST 146,263 90,953 486,488 357,311
Minority Interest 8,061 8,061 24,183 24,183
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NET INCOME $ 138,202 $ 82,892 $ 462,305 $ 333,128
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NET INCOME APPLICABLE TO COMMON SHARES $ 132,253 $ 76,980 $ 444,458 $ 315,393
EARNINGS PER SHARE
BASIC $ 0.91 $ 0.54 $ 3.05 $ 2.25
DILUTED $ 0.86 $ 0.51 $ 2.88 $ 2.10
WEIGHTED AVERAGE COMMON SHARES
BASIC 145,634,000 141,323,000 145,583,000 140,154,000
DILUTED 153,858,000 151,357,000 154,107,000 150,538,000
</TABLE>
