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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 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 July 13, 1999, the Registrant released financial information with
respect to the three and six month periods ending June 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 six month
periods ending June 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: July 16, 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 six month
periods ending June 30, 1999
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Exhibit 99.1
[PAINE WEBBER LOGO]
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N E W S R E L E A S E
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FOR IMMEDIATE RELEASE
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PAINE WEBBER GROUP REPORTS ALL-TIME RECORD
QUARTERLY EARNINGS
- --Net income rises to $163.5 million, a 26 percent increase from Q2 1998--
--Earnings per share at $1.02--
NEW YORK, July 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 June 30, 1999, was $163.5 million, or $1.02 per
diluted share, an increase of 26 percent from $129.5 million, or $0.82 per
diluted share, for the second quarter of 1998. Net revenues for the second
quarter of 1999 were $1.35 billion, an increase of 16 percent from $1.16
billion in the corresponding period a year ago.
Return on common equity for the quarter was 23.8 percent, compared with
23.7 percent for the year-ago period. As of June 30, 1999, the firm had total
capital of $8.23 billion, an all-time high.
"We are pleased to report another quarter of record earnings, which
reflect continued strong momentum across all individual and institutional
businesses," said Donald B. Marron, PaineWebber's chairman and chief executive
officer. "Significant progress was also made in the development and
implementation of the firm's online strategy. Our goal is to provide affluent
clients as well as emerging investors with an increasingly comprehensive menu
of services aimed at enhancing their investment experience at PaineWebber."
Among the records in the quarter are the following, with percentage
increases from the second quarter of 1998 in parentheses:
- - Net revenues of $1.35 billion (16 percent increase)
- - Commission income of $488.9 million (22 percent increase)
- - Asset management revenues of $224.5 million (23 percent increase)
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Paine Webber Group Inc.
Page 2
- - Assets under control of $384.2 billion (17 percent increase)
- - Wrap fee assets of $37.9 billion (43 percent increase)
- - Recurring fee income, annualized, of $1.09 billion (23 percent increase)
- - Ratio of recurring fees and net margin interest to fixed expenses at 98
percent
- - Number of financial advisors at 7,118
The following measurements, which are also records, reflect the
continued financial strengthening of the firm:
- - Shareholders' equity at $2.7 billion
- - Total capital at $8.23 billion
- - Book value at $18.58
Among the operational highlights are the following:
- - The Municipal Securities Group achieved the No. 1 industry ranking in
negotiated senior underwritings, the third consecutive quarter of top
industry performance.
- - Strong performance by the firm's institutional businesses, led by Global
Fixed Income, contributed significantly to the overall results.
- - The firm's newly formed Japanese joint venture, Yasuda Paine Webber Mutual
Fund Company raised $200 million in the start up of the Falcon Fund, the
largest new bond fund in the Japanese market thus far in 1999.
Online and Technology Initiatives
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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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- - The firm has released versions 3.0 of the PaineWebber EDGE, its online
client service, adding enhanced download capabilities, new graphs and a bold
clear look. Online investing will be available through the EDGE in the third
quarter of 1999.
- - During the second quarter of 1999, use of PaineWebber EDGE reached 102,000
client households, representing almost $90 billion in assets. EDGE
assets have grown at a compounded annual growth rate of 150 percent since
the EDGE was introduced in the first quarter of 1997, specifically:
1999
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Jan Feb Mar Apr. May Jun.
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EDGE Client Assets ($b) 64.7 68.5 73.8 80.5 84.1 89.4
EDGE Households ($000s) 76 80 86 94 98 102
Assets per EDGE households ($000s) 853 853 861 857 850 872
- - PaineWebber has completed the rollout of ConsultWorks, the firm's new
financial advisor workstation. ConsultWorks enables financial advisors to
access and navigate a broad range of applications including performance
management, client account inquiry, portfolio management, proprietary
research, Internet access, e-mail and financial planning tools. The online
capabilities of the ConsultWorks platform will allow financial advisors to
deliver customized information and recommendations to clients faster and
more efficiently 24 hours a day.
- - In July of 1999, Painewebber will launch its InfoNet system, a browser
based content server for the Private Client Group. InfoNet will provide
financial advisors easy access to an electronic catalogue of sales and
marketing documents, processing guides, online forms and client prospecting
materials all in a presentation format that can be downloaded and
customized.
- - A new state-of-the-art trading floor for Global Equities was completed in
the second quarter and is now in full operation.
Paine Webber Group Inc., together with its subsidiaries, serves the
investment and capital needs of a worldwide client base. The firm employs
18,452 people in 307 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 June 30, Six Months Ended June 30,
1999 1998 1999 1998
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<S> <C> <C> <C> <C>
REVENUES
Commissions $488,878 $402,094 $967,751 $810,218
Principal Transactions 279,846 244,146 594,054 521,109
Asset Management 224,487 182,128 430,538 340,864
Investment Banking 160,133 176,687 286,086 301,656
Interest 770,271 860,707 1,527,431 1,663,085
Other 47,363 34,521 88,428 68,461
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TOTAL REVENUES 1,970,978 1,900,283 3,894,288 3,705,393
Interest Expense 623,071 738,115 1,231,490 1,428,248
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NET REVENUES 1,347,907 1,162,168 2,662,798 2,277,145
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NON-INTEREST EXPENSES
Compensation and Benefits 780,078 682,088 1,548,792 1,332,663
Office & Equipment 89,330 74,862 170,782 147,402
Communications 42,645 37,140 84,848 74,896
Business Development 28,534 26,290 52,401 48,369
Brokerage, Clearing & Exchange Fees 23,487 22,081 47,877 47,577
Professional Services 32,397 30,390 62,849 63,982
Other Expenses 81,769 77,318 160,563 152,062
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TOTAL NON-INTEREST EXPENSES 1,078,240 950,169 2,128,112 1,866,951
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INCOME BEFORE INCOME TAXES & MINORITY INTEREST 269,667 211,999 534,686 410,194
Provision for Income Taxes 98,102 74,437 194,461 143,836
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INCOME BEFORE MINORITY INTEREST 171,565 137,562 340,225 266,358
Minority Interest 8,061 8,061 16,122 16,122
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NET INCOME $163,504 $129,501 $324,103 $250,236
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NET INCOME APPLICABLE TO COMMON SHARES $157,555 $123,589 $312,205 $238,413
EARNINGS PER SHARE
BASIC $1.08 $0.88 $2.14 $1.71
DILUTED $1.02 $0.82 $2.02 $1.59
WEIGHTED AVERAGE COMMON SHARES
BASIC 145,743,000 140,033,000 145,632,000 139,610,000
DILUTED 154,960,000 151,162,000 154,306,000 150,178,000
</TABLE>
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<TABLE>
<CAPTION>
PAINE WEBBER GROUP INC.
QUARTERLY STATISTICAL SUPPLEMENT - OPERATING RESULTS [UNAUDITED]
<S> <C> <C> <C> <C> <C>
2Q 99 1Q 99 4Q 98 3Q 98 2Q 98
ROE Common (Annualized) 23.8% 24.6% 16.3% 14.0% 23.7%
Income Before Taxes & Minority Interest
as a Percentage of Net Revenues 20.0% 20.2% 15.2% 13.4% 18.2%
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E.P.S. [Diluted] $1.02 $1.01 $0.63 $0.51 $0.82
Diluted Shares [Millions] 155.0 153.7 150.9 151.4 151.2
Dividends Paid Per Common Share $0.11 $0.11 $0.11 $0.11 $0.11
Book Value Per Common Share $18.58 $17.77 $16.76 $15.86 $15.38
Common Shares Outstanding [Millions] 145.4 145.8 145.5 142.8 140.6
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Total Capital [$Billions] $8.23 $7.54 $7.28 $6.64 $6.56
Total Shareholders' Equity [$Billions] $2.70 $2.59 $2.44 $2.26 $2.16
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Assets Under Control [$Billions] $384.2 $367.1 $351.7 $313.2 $329.3
Assets Under Management [$Billions] $60.0 $63.0 $58.5 $54.1 $54.7
Money Market Funds 33.2 34.7 31.4 29.9 28.6
Long Term Mutual Funds 14.7 14.2 13.8 12.5 13.2
Institutional and Other 12.1 14.1 13.3 11.7 12.9
Wrap Fee Assets [$Billions] $37.9 $34.4 $30.6 $24.7 $26.5
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Client Assets on "The Edge" [$Billions] $89.4 $73.8 $60.1 $44.8 $36.9
*
Households on "The Edge"* 102,500 86,000 71,000 59,000 51,000
RMA Accounts ** 558,800 530,900 501,900 475,200 457,300
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Recurring Fees (YTD Annualized) $1,091 $1,047 $921 $908 $886
[$Millions]
Recurring Fees (Incl. Margin Interest) -
As a % of Fixed Costs 98% 95% 91% 93% 94%
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Employees 18,452 18,051 17,767 17,424 17,045
Financial Advisors 7,118 7,033 6,951 6,739 6,551
Sales Offices 307 305 303 299 300
</TABLE>
* Paine Webber's client on-line service
** Paine Webber's central asset account
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