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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): July 2, 1996
MORGAN STANLEY GROUP INC.
(Exact name of registrant as specified in its charter)
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Delaware 1-9085 13-2838811
(State or other jurisdiction of (Commission File (I.R.S. Employer
incorporation or organization) Number) Identification Number)
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1585 Broadway, New York, New York 10036
(Address of principal executive offices including zip code)
Registrant's telephone number, including area code: (212) 761-4000
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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 six-month periods ended May
31, 1996 and May 31, 1995, and announcing the declaration by the
Company's Board of Directors of a quarterly cash dividend of 17.5
cents per common share.
ITEM 7(c). EXHIBITS
99. Press release dated July 2, 1996 summarizing the financial results of
the Company for the three-month and six-month periods ended May 31,
1996 and May 31, 1995, and announcing the declaration by the Company's
Board of Directors of a quarterly cash dividend.
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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/Ralph L. Pellecchio
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Ralph L. Pellecchio
Assistant Secretary
Date: July 2, 1996
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Index to Exhibits
Exhibit No. Description
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99. Press release dated July 2, 1996 summarizing the
financial results of the Company for the
three-month and six-month periods ended May 31,
1996 and May 31, 1995, and announcing the
declaration by the Company's Board of Directors
of a quarterly cash dividend.
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EXHIBIT 99
FOR IMMEDIATE RELEASE
Contact: Eileen Wallace, Investor Relations
212/703-7368
Jeanmarie McFadden, Media Relations
212/761-4059
MORGAN STANLEY GROUP INC. ANNOUNCES SECOND QUARTER EARNINGS
NEW YORK, July 2, 1996 -- Morgan Stanley Group Inc. (NYSE:MS) today announced
net income of $301 million, or $1.83 per common share on a primary basis, for
the second quarter ended May 31, 1996. Net income was 81% higher than the $166
million, or $0.95 per common share on a primary basis, earned in the quarter
ended May 31, 1995(1). Net revenues (total revenues less interest expense)
for the second quarter were $1,528 million, up 51% over the comparable
quarter in 1995. Fully diluted earnings per share were $1.75 and $0.91 for
the quarters ended May 31, 1996 and 1995, respectively.
Net income for the six months ended May 31, 1996 was $574 million, or $3.48
per share on a primary basis, and $3.32 on a fully diluted basis. Net
revenues for the period were $2,977 million. Comparable results for the six
months ended May 31, 1995 were net revenues of $1,804, net income of $213
million, primary earnings per share of $1.17 and fully diluted earnings per
share of $1.11.
Investment banking achieved record quarterly revenues of $542 million,
surpassing the previous record of $503 million earned in the quarter ended
November 30, 1995. The Firm's strong franchise in mergers and acquisitions
and underwriting enabled the Firm to maintain its number-one ranking in
announced mergers and acquisitions and in worldwide equity and equity-related
new issues(2). Equity underwriting was especially strong with
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(1)In January 1996, Morgan Stanley split its stock two-for-one in the form
of a 100 percent stock dividend. Past per share amounts have been adjusted
for the effect of the split.
(2)Source: Securities Data Corporation, data from January 1, 1996 through
May 31, 1996.
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the Firm managing some of the quarter's largest transactions, including Lucent
Technologies ($3 billion), Scania ($2.7 billion), and Gucci ($1.3 billion).
Sales and trading results were higher than in the comparable quarter in 1995,
although down slightly from the record levels in the first quarter of 1996.
Equity revenues grew in the quarter as a result of high levels of trading
activity, especially in the US markets, and strong demand for equity products.
Fixed income results were down from record first quarter levels as lower market
volatility and lighter customer trading volume affected key markets around the
world.
Asset management revenues were up sharply over the comparable quarter in 1995
reflecting in part the merger of Miller Anderson & Sherrerd, LLP and Morgan
Stanley Asset Management in January, 1996. Total assets under management at
the end of the second quarter were approximately $100 billion. The Firm
recently announced an agreement to acquire Van Kampen American Capital, Inc., a
predominately retail asset manager with $57 billion in assets under management
or supervision, in a further step to expand its presence in this business. The
acquisition is expected to close by November 30, 1996.
Richard B. Fisher, chairman, and John J. Mack, president, said in a joint
statement:
"We are obviously pleased with the continued strong performance of the
Firm. We believe our competitive position has never been better. Our
commitment to building the leading global financial services franchise
is increasingly evident in the global scale and diverse mix of our
businesses.
We believe that our recently announced agreement to acquire Van Kampen
American Capital will further enhance our competitive position. Van
Kampen American Capital will, for the first time, provide us with a
strong platform to enter the US retail asset management market. This
rapidly growing segment of asset management is one in which we have
not had a significant presence. We believe the combination of Morgan
Stanley Asset Management's and Miller Anderson's institutional asset
management capabilities
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with Van Kampen American Capital's retail business will greatly
enhance our presence in global asset management."
The Firm also announced the declaration by its board of directors of a
quarterly dividend of 17.5 cents per common share. The dividend is payable on
July 31, 1996 to holders of record on July 15, 1996.
During the quarter, the Firm repurchased $115 million of its common stock
bringing the total amount of stock repurchased through May 31, 1996 to $465
million. The Firm repurchased $103 million of its common stock in fiscal 1995.
The Firm's remaining repurchase authorization is approximately $298 million.
Total capital (stockholder's equity and long-term debt) at May 31, 1996 was
$16.6 billion, including $5.3 billion of common and preferred stockholders'
equity. Book value per common share was $29.73, based on quarter-end shares
and share-equivalents of 154,281,136.
Morgan Stanley Group Inc. is a global financial services firm with offices in
New York, London, Tokyo and other principal financial centers around the world.
--Table Follows--
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Morgan Stanley Group Inc.
Consolidated Statement of Income (Unaudited)
(In millions, except share data)
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THREE MONTHS ENDED SIX MONTHS ENDED
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MAY 31 MAY 31 MAY 31 MAY 31
1996 1995 1996 1995
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Revenues:
Investment banking $542 $273 $941 $516
Principal transactions:
Trading 565 438 1,269 637
Investments 38 (6) 31 13
Commissions 159 131 313 242
Interest and dividends 1,946 1,742 3,879 3,602
Asset management and administration 143 88 265 179
Other - 1 3 3
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Total revenues 3,393 2,667 6,701 5,192
Interest expense 1,865 1,656 3,724 3,388
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Net revenues 1,528 1,011 2,977 1,804
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Expenses excluding interest:
Compensation and benefits 750 475 1,455 841
Occupancy and equipment 86 80 172 163
Brokerage, clearing and exchange fees 68 66 134 121
Communications 34 34 67 68
Business development 42 34 79 77
Professional services 53 40 95 84
Other 39 31 79 68
Relocation charge - - - 59
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Total expenses excluding interest 1,072 760 2,081 1,481
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Income before income taxes 456 251 896 323
Provision for income taxes 155 85 322 110
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Net income $301 $166 $574 $213
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Earnings applicable to common shares (1) $284 $150 $541 $181
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Average common and common equivalent
shares outstanding (1) (2) 155,143,633 157,595,614 155,652,016 155,513,120
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Primary earnings per share (2) $1.83 $0.95 $3.48 $1.17
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Fully diluted earnings per share (2) $1.75 $0.91 $3.32 $1.11
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(1) For primary earnings per share.
(2) 1995 share and per share amounts have been retroactively adjusted to
give effect for the 2-for-1 common stock split which became effective
in January 1996.
