<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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 18, 2000
PAINE WEBBER GROUP INC.
(Exact Name of Registrant as specified in its charter)
DELAWARE NO. 1-7367 NO. 13-2760086
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
1285 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10019
(Address of principal (Zip code)
executive offices)
Registrant's telephone number, including area code: (212) 713-2000
<PAGE> 2
Item 5. Other Events.
On April 18, 2000, the Registrant released financial information with
respect to the three month period ending March 31, 2000. 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, 2000.
<PAGE> 3
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 thereunto duly authorized.
PAINE WEBBER GROUP INC.
By: /s/ Jerome T. Fadden
---------------------------------
Name: Jerome T. Fadden
Title: Senior Vice President and
Chief Financial Officer
Dated: April 25, 2000
<PAGE> 4
EXHIBIT INDEX
ITEM NO. DESCRIPTION
99.1 Copy of Registrant's press release which, among other things,
reported results for the three month period ending March 31, 2000.
<PAGE> 1
Exhibit 99.1
PAINE WEBBER GROUP REPORTS ALL-TIME RECORD
QUARTERLY EARNINGS
-- EARNINGS PER SHARE AT $1.16, A 15 PERCENT INCREASE FROM Q1 1999--
-- NET INCOME RISES TO $176.3 MILLION --
NEW YORK, April 18, 2000 - Paine Webber Group Inc. reported today the
strongest quarterly earnings and revenues in the firm's 120-year history. Net
income for the period ended March 31, 2000, was $176.3 million, or $1.16 per
diluted share, an increase of 10 percent from $160.6 million, or $1.01 per
diluted share, for the first quarter of 1999. Net revenues for the first quarter
of 2000 were $1.6 billion, an increase of 21.5 percent from $1.3 billion in the
corresponding period a year ago.
Return on common equity for the quarter was 23.8 percent. As of March
31, 2000, the firm had total capital of $8.48 billion.
"We are pleased to report an all-time record quarter of earnings
reflecting the accelerating momentum across the firm's businesses, particularly
those focused on the affluent investor," said Donald B. Marron, PaineWebber's
chairman and chief executive officer. "Key elements of our retail strategy are
to increase distribution and accelerate the gathering of client assets, which
has resulted in a 46 percent increase in net new assets flowing into the firm in
the first quarter versus one year ago. We expect this trend to continue fueled
by the firm's investments in technology to enhance online capabilities and the
growth of productive financial advisors."
Among the records in the quarter are the following, with percentage
increases from the first quarter of 1999 in parentheses:
- - Net revenues of $1.6 billion (21.5 percent increase)
- - Commission income of $676.2 million (41.2 percent increase)
- - Asset management revenues of $278.3 million (35.1 percent increase)
- - Client assets of $452.4 billion (23 percent increase)
<PAGE> 2
Paine Webber Group Inc.
Page 2
- - Assets under management of $73.4 billion (16.5 percent increase)
- - Wrap fee assets of $53.9 billion (57 percent increase)
- - Recurring fee income, annualized, of $1.372 billion (31 percent increase)
- - Ratio of recurring fees and net margin interest to fixed expenses at 109
percent
- - Number of financial advisors at 7,608
The following measurements, which are also records, reflect the continued
financial strengthening of the firm:
- - Shareholders' equity at $3.04 billion
- - Book value per common share at $20.95
Among the operational highlights are the following:
- - Net new client assets flowing into the firm totaled $13.8 billion or an
average of $219.5 million per day, as compared to $9.5 billion or $155.5
million per day in the first quarter of 1999.
- - InsightOne, the firm's asset-based fee account product featuring a host of
online services, including unlimited online trading, reached $12.6 billion
in client assets, an increase of $4.2 billion or 50.2 percent from year-end
1999.
- - PaineWebber EDGE, the firm's Internet-based client services portal,
continued to attract assets growing by 18 percent in the first quarter. At
the end of the first quarter 208,300 client households subscribed to the
EDGE, representing more than $165 billion in assets, specifically:
<TABLE>
<CAPTION>
3/31/00 12/31/99 3/31/99 1Q00/1Q99
------- -------- ------- ---------
<S> <C> <C> <C> <C>
EDGE Households (000s) 208 176 86 +142%
EDGE Client Assets ($b) 165 140 74 +124%
</TABLE>
- - The Municipal Securities Group achieved the No. 2 industry ranking in
negotiated senior underwritings.
<PAGE> 3
Paine Webber Group Inc.
Page 3
STRATEGIC INTERNATIONAL AND E-FINANCE INVESTMENTS
A key element of the firm's growth strategy is the expansion of client
markets and the investment in technology-based companies whose products or
services will enhance the business solutions we bring to institutional and
individual clients. Among the investments made in the quarter:
- - Long Term Credit Bank of Japan - First Japanese bank owned by consortium of
foreign institutions provides PaineWebber with access to a large client base
of affluent Japanese investors as well as asset securitization
opportunities.
- - enba plc - First European online banking company offering securities
trading, commercial banking and ancillary services, currently operating in
UK and Germany. PaineWebber will offer retail investor products to the enba
client base.
- - MuniGroup.com - Offers PaineWebber clients the ability to trade municipal
bonds online and access multiple inventories.
- - Charitableway.com - Enables PaineWebber individual and corporate client
donors access via the EDGE to a Web-based portal that aggregates charity
information and tracks donations.
Paine Webber Group Inc., together with its subsidiaries, serves the
investment and capital needs of a worldwide client base. The firm employs 20,008
people in 318 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 --
<PAGE> 4
PAINE WEBBER GROUP INC.
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
For the Quarter Ended March 31,
2000 1999
------------ ------------
<S> <C> <C>
REVENUES
Commissions $ 676,172 $ 478,873
Principal Transactions 309,289 314,208
Asset Management 278,288 206,051
Investment Banking 122,180 125,953
Interest 981,547 757,160
Other 37,645 41,065
------------ ------------
TOTAL REVENUES 2,405,121 1,923,310
Interest Expense 808,016 608,419
------------ ------------
NET REVENUES 1,597,105 1,314,891
------------ ------------
NON-INTEREST EXPENSES
Compensation and Benefits 949,786 768,714
Office & Equipment 96,592 81,452
Communications 44,123 42,203
Business Development 38,901 23,867
Brokerage, Clearing & Exchange Fees 27,303 24,390
Professional Services 49,426 30,452
Other 100,755 78,794
------------ ------------
TOTAL NON-INTEREST EXPENSES 1,306,886 1,049,872
------------ ------------
INCOME BEFORE INCOME TAXES & MINORITY INTEREST 290,219 265,019
Provision for Income Taxes 105,809 96,359
------------ ------------
INCOME BEFORE MINORITY INTEREST 184,410 168,660
Minority Interest 8,061 8,061
------------ ------------
NET INCOME $ 176,349 $ 160,599
============ ============
NET INCOME APPLICABLE TO COMMON SHARES $ 176,349 $ 154,650
EARNINGS PER SHARE
BASIC $ 1.22 $ 1.06
DILUTED $ 1.16 $ 1.01
WEIGHTED AVERAGE COMMON SHARES
BASIC 145,019,000 145,599,000
DILUTED 152,336,000 153,729,000
</TABLE>
<PAGE> 5
PAINE WEBBER GROUP INC.
QUARTERLY STATISTICAL SUPPLEMENT - OPERATING RESULTS [UNAUDITED]
<TABLE>
<CAPTION>
1Q 00 4Q 99 3Q 99 2Q 99 1Q 99
<S> <C> <C> <C> <C> <C>
ROE Common (Annualized) 23.8% 22.9%* 19.2% 23.8% 24.6%
Income Before Taxes & Minority Interest
as a Percentage of Net Revenues 18.2% 19.7% 18.3% 20.0% 20.2%
- ---------------------------------------------------------------------------------------------------------------------
E.P.S. [Diluted] $ 1.16 $ 1.07* $ 0.86 $ 1.02 $ 1.01
Diluted Shares [Millions] 152.3 150.7 153.9 155.0 153.7
Dividends Paid Per Common Share $ 0.12 $ 0.11 $ 0.11 $ 0.11 $ 0.11
Book Value Per Common Share $ 20.95 $ 20.04 $ 19.36 $ 18.58 $ 17.77
Common Shares Outstanding [Millions] 145.1 145.6 145.2 145.4 145.8
- ---------------------------------------------------------------------------------------------------------------------
Total Capital [$Billions] $ 8.48 $ 8.53 $ 8.36 $ 8.23 $ 7.54
Total Shareholders' Equity [$Billions] $ 3.04 $ 2.92 $ 2.81 $ 2.70 $ 2.59
- ---------------------------------------------------------------------------------------------------------------------
Client Assets [$Billions] $ 452.4 $ 423.0 $ 377.2 $ 384.2 $ 367.1
Assets Under Management [$Billions] $ 73.4 $ 68.8 $ 59.5 $ 60.0 $ 63.0
Money Market Funds 39.0 34.5 33.5 33.2 34.7
Long Term Mutual Funds 17.1 17.4 14.2 14.7 14.2
Institutional and Other 17.3 16.9 11.8 12.1 14.1
Wrap Fee Assets [$Billions] $ 53.9 $ 47.0 $ 37.5 $ 37.9 $ 34.4
- ---------------------------------------------------------------------------------------------------------------------
Client Assets on "The Edge" [$Billions] ** $ 165.5 $ 140.2 $ 99.4 $ 89.4 $ 73.8
Households on "The Edge" ** 208,300 175,600 124,000 102,500 86,000
RMA Accounts *** 669,500 625,000 591,900 558,800 530,900
- ---------------------------------------------------------------------------------------------------------------------
Recurring Fees (YTD Annualized) $ 1,372 $ 1,148 $ 1,124 $ 1,091 $ 1,047
[$Millions]
Recurring Fees (Incl. Margin Interest) -
As a % of Fixed Costs 109% 102% 100% 98% 95%
- ---------------------------------------------------------------------------------------------------------------------
Employees 20,008 19,620 18,988 18,452 18,051
Financial Advisors 7,608 7,576 7,249 7,118 7,033
Sales Offices 318 315 309 307 305
</TABLE>
* Excludes the effect of the unamortized discount of $59.9 million charged to
equity resulting from the redemption of preferred stock
** Paine Webber's client on-line service
*** Paine Webber's central asset account
