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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): February 28, 1995
MORGAN STANLEY GROUP INC.
(Exact name of registrant as specified in its charter)
Delaware 1-9085 13-2838811
(State or other (Commission File (I.R.S. Employer
jurisdiction of Number) Identification
incorporation or Number)
organization)
1251 Avenue of the Americas, New York, New York 10020
(Address of principal executive offices including zip code)
Registrant's telephone number, including area code: (212) 703-4000
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<PAGE>
Item 5. Other Events
Attached and incorporated herein by reference as Exhibit 99 is a
press release summarizing the financial results of Morgan Stanley
Group Inc. (the "Company") for the three-month and twelve-month
periods ended January 31, 1995 and 1994 and announcing the
declaration by the Company's Board of Directors of an increase in
the regular quarterly cash dividend to 32 cents per common share.
The Company also announced the authorization by its Board of
Directors of the purchase, subject to market and other conditions,
of an additional $150 million of the Company's Common Stock.
Item 7(c). Exhibits
99. Press release dated February 28, 1995 summarizing the financial
results of the Company for the three-month and twelve-month
periods ended January 31, 1995 and 1994 and announcing the
declaration by the Company's Board of Directors of an increase in
the regular quarterly cash dividend to 32 cents per common share;
the authorization by its Board of Directors of the purchase,
subject to market and other conditions, of an additional $150
million of the Company's Common Stock and a change in the fiscal
year-end to November 30 from January 31.
Item 8. Change in Fiscal Year
On February 28, 1995 the Company's Board of Directors determined
to change the Company's fiscal year-end to November 30 from
January 31. The Company will file a report covering the transition
period on a Form 10-Q for the quarter ending May 31, 1995.
<PAGE>
SIGNATURES
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.
MORGAN STANLEY GROUP INC.
Registrant
/s/Patricia A. Kurtz
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Patricia A. Kurtz
Assistant Secretary
Date: February 28, 1995
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Index to Exhibits
Sequentially
Exhibit No. Description Numbered Pages
- --------------- ---------------------------- ----------------
99. Press release dated February
28, 1995 summarizing the
financial results of the
Company for the three-month
and twelve-month periods
ended January 31, 1995 and
1994 and announcing the
declaration by the Company's
Board of Directors of an
increase in the regular
quarterly cash dividend to
32 cents per common share;
the authorization by its
Board of Directors of the
purchase, subject to market
and other conditions, of an
additional $150 million of
the Company's Common Stock
and a change in the fiscal
year-end to November 30 from
January 31.
<PAGE>
Contact: Charles B. Hintz,
Investor Relations 212/703-7178
Tracey K. Gordon, Media Relations
212/703-7618
For Immediate Release
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MORGAN STANLEY ANNOUNCES 1994 FULL YEAR
AND FOURTH QUARTER RESULTS
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Board Increases Share Buyback Authority; Increases Dividend
---------------------------------------
Fiscal Year-End Changed To November 30 From January 31
NEW YORK, February 28, 1995 -- Morgan Stanley Group Inc.
(NYSE: MS) today announced that net earnings for the fourth
quarter of 1994, before a pre-tax charge taken primarily in
connection with its move to new corporate headquarters, were $78
million, or 80 cents per common share on a primary basis and 77
cents per share on a fully diluted basis. After the charge, net
income was $39 million for the quarter, resulting in earnings per
common share of 29 cents on a primary and fully diluted basis.
Comparable 1993 fourth quarter results were net income of $181
million, or primary and fully diluted income per common share of
$2.18 and $2.08, respectively. Net revenues for the fourth
quarter of 1994 were $790 million, with comparable 1993 fourth
quarter net revenues of $925 million. The pre-tax charge of
approximately $59 million ($39 million after tax) is in
connection with Morgan Stanley's pending move to its new
corporate headquarters in New York City and to new office space
in Tokyo. The charge specifically covers the Company's
termination of certain leased office space and the write-off of
remaining leasehold improvements in both cities.
The Company also said pre-charge net earnings for the fiscal
year ended January 31, 1995 were $434 million, or $4.68 per
common share on a primary basis and $4.50 per share on a fully
diluted basis, compared to $786 million, or $9.59 per share on a
primary basis and $9.16 per share on a fully diluted basis for
the year ended January 31, 1994. After the charge, net income for
the fiscal year ended January 31, 1995 was $395 million, or $4.18
per common share on a primary basis and $4.03 on a fully diluted
basis. Net revenues (gross revenues less interest expense) for
fiscal 1994 were $3,501 million vs. 1993 net revenues of $4,156
million.
The Company said that following three years of substantial
growth, 1994 proved to be a difficult year for the financial
services industry. Rising interest rates throughout the year and
inflation concerns contributed to an industry-wide decline in
client activity, particularly in debt underwriting and trading in
fixed income products. Investment banking revenues decreased
during 1994, reflecting reduced debt underwriting revenue. This
decline was partially offset by a pickup in merger and
acquisition activity. Sales and trading revenues (combined
trading,commissions and net interest) decreased, principally
reflecting lower global fixed income volume given the difficult
operating environment. Merchant banking realized investment
gains during the year primarily from the third quarter sale of
Agricultural Minerals and Chemicals Inc. Asset management and
global custody and clearing revenues increased, reflecting
continued growth in customer assets under management and
administration.
Change In Fiscal Year
- ---------------------
Morgan Stanley's Board also approved a change in its fiscal
year-end to November 30 from January 31. Accordingly, the
Company's 1995 fiscal year will cover the 10-month period ending
November 30, 1995 and its first quarter will cover the four-month
period ending May 31, 1995.
In 1992, Morgan Stanley adopted an off-cycle fiscal year-end
of January 31, with the objective of optimizing our ability to
help clients meet their end of quarter balance sheet needs, while
also facilitating the Company's year-end budgeting, compensation
and planning process. In the last two years, however, it has
become apparent that the decision to move the fiscal year-end to
January 31 complicated rather than simplified the year-end
administrative process. The new fiscal year-end will enhance the
Company's client service capabilities by shifting the year-end
compensation and promotion process to the period between
Thanksgiving and Christmas when there is relatively lower
financial markets' activity. Additionally, because this is still
an off-cycle fiscal year-end, Morgan Stanley will remain
positioned to optimize its ability to provide comprehensive
service to clients in meeting their seasonal business needs.
Increase in Regular Quarterly Dividend
- --------------------------------------
The Company also announced that its Board of Directors has
approved an increase of 2 cents in the regular quarterly dividend
to 32 cents per common share. The dividend is payable on March
24, 1995 to holders of record on March 13, 1995.
Buyback Authority Increased $150 Million
- ----------------------------------------
The Company also announced that its board of directors has
authorized the purchase, subject to market conditions and certain
other factors, of an additional $150 million of its common stock,
bringing the Company's total buyback authority to $316 million.
During the fourth quarter, Morgan Stanley repurchased
approximately 700,000 common shares at an aggregate cost of
approximately $43 million.
Total capital (stockholders' equity and long-term debt)at
January 31, 1995 was $12.1 billion, including $4.6 billion of
common and preferred stockholders' equity. Book value per common
share was $49.77 based on quarter-end shares and share-
equivalents of 77,087,547.
Commentary on Earnings, Board Actions
- -------------------------------------
Richard B. Fisher, chairman, and John J. Mack, president,
said in a joint statement: "The Firm's expansion in recent years
has been based on a disciplined strategy of globalization,
diversification and ongoing investment in resources to meet the
increasingly complex and global financial needs of our clients.
We have consistently pursued this long-term strategy through a
wide range of market conditions, including the current down
cycle.
While profitable in 1994, the Firm's financial performance
reflected difficult industry conditions, late-year turmoil in
emerging markets and our decision to continue investing
throughout the year to improve the Firm's relative competitive
position in key regions of the world.
We made great strides in 1994 in the realization of our
globalization strategy and accomplished many of our goals. We put
client service capabilities and technological resources in place
that will enable us to capitalize on future opportunities and
maintain our leadership position in the global financial
marketplace. We remain confident that current operating
conditions represent only an interruption in the positive
environment for our business, rather than a more sustained
cyclical downturn for the industry."
Morgan Stanley Group Inc. is a global financial services
firm with over 9,600 employees and offices in New York, London,
Tokyo, Hong Kong, Frankfurt and other financial centers.
###
February 28, 1995
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<TABLE>
<CAPTION>
Morgan Stanley Group Inc.
Consolidated Statement of Income (Unaudited)
(In millions, except share data)
THREE MONTHS ENDED TWELVE MONTHS ENDED
========================= =========================
JAN 31 JAN 31 JAN 31 JAN 31
1995 1994 1995 1994
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<S> <C> <C> <C> <C>
Revenues:
Investment banking $258 $245 $919 $1,238
Principal transactions:
Trading 249 286 1,104 1,459
Investments 24 37 139 158
Commissions 114 110 449 393
Interest and dividends 1,606 1,327 6,406 5,660
Asset management and administration 85 75 350 258
Other 1 1 9 10
----------- ----------- ----------- -----------
Total revenues 2,337 2,081 9,376 9,176
Interest expense 1,547 1,156 5,875 5,020
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Net revenues 790 925 3,501 4,156
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Expenses excluding interest:
Compensation and benefits 373 428 1,733 2,049
Occupancy and equipment 82 64 303 248
Brokerage, clearing and exchange fees 57 52 230 196
Communications 34 26 122 100
Business development 44 41 165 134
Professional services 43 34 164 120
Other 40 33 131 109
Relocation charge 59 0 59 0
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Total expenses excluding interest 732 678 2,907 2,956
Income before income taxes 58 247 594 1,200
Provision for income taxes 19 66 199 414
----------- ----------- ----------- -----------
Net income $39 $181 $395 $786
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Earnings applicable to common shares * $23 $165 $330 $731
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Average common and common equivalent
shares outstanding * 77,534,004 75,938,109 78,896,608 76,208,288
=========== =========== =========== ===========
Primary earnings per share $0.29 $2.18 $4.18 $9.59
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Fully diluted earnings per share $0.29 $2.08 $4.03 $9.16
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</TABLE>
* For primary earnings per share
Note: Summation of quarterly amounts may not equal year-to-date amounts due
to rounding.
