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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): October 2, 1996
MORGAN STANLEY GROUP INC.
(Exact name of registrant as specified in its charter)
Delaware 1-9085 13-2838811
(State or other jurisdiction of (Commission File (I.R.S. Employer
incorporation or organization) Number) Identification Number)
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 (a) summarizing the financial results of Morgan Stanley Group
Inc. (the "Company") for the three-month and nine-month periods ended
August 31, 1996 and 1995, (b) announcing the declaration by the
Company's Board of Directors of a quarterly cash dividend of 17.5 cents
per common share, and (c) announcing a transition in senior management
responsibilities.
.
ITEM 7(C). EXHIBITS
99. Press release dated October 2, 1996 (a) summarizing the financial
results of the Company for the three-month and nine-month periods ended
August 31, 1996 and 1995, (b) announcing the declaration by the
Company's Board of Directors of a quarterly cash dividend, and (c)
announcing a transition in senior management responsibilities.
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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.
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Registrant
/s/ Patricia A. Kurtz
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Patricia A. Kurtz
Assistant Secretary
Date: October 2, 1996
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Index to Exhibits
Exhibit No. Description
99. Press release dated October 2, 1996 (a) summarizing the
financial results of the Company for the three-month and
nine-month periods ended August 31, 1996 and 1995, (b)
announcing the declaration by the Company's Board of
Directors of a quarterly cash dividend, and (c) announcing a
transition in senior management responsibilities.
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EXHIBIT 99
[MORGAN STANLEY LETTERHEAD]
News
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Contact: Investor Relations For Immediate Release
Eileen Wallace
212/703-7368
Media Relations
Jeanmarie McFadden
212/761-4059
MORGAN STANLEY GROUP INC. ANNOUNCES THIRD QUARTER EARNINGS
Chairman Richard B. Fisher Announces that John J. Mack
Will Become Chief Executive Officer Effective June 1, 1997;
Fisher to Continue as Chairman; Mack will be President and Chief Executive
Officer
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NEW YORK, October 2, 1996 -- Morgan Stanley Group Inc. (NYSE:MS) today announced
net income for the third quarter ended August 31, 1996 of $219 million, or $1.32
per common share on a primary basis and $1.27 per share on a fully diluted
basis. Net revenues (total revenue less interest expense) for the third quarter
were $1,287 million.
Comparable results for the quarter ended August 31, 1995 were net income of $209
million, primary and fully diluted earnings per share of $1.23 and $1.17
respectively, and net revenues of $1,151 million.*
Morgan Stanley also announced that the Board has accepted the recommendation of
Richard B. Fisher, Chairman since 1991, that President John J. Mack assume the
additional title and responsibilities of Chief Executive Officer effective June
1, 1997. Fisher will continue as Chairman after that date, shifting his
principal focus to client and external matters.
"This is the expected next step in our succession plan," said Fisher. "The Board
and I are confident that, under John's leadership, Morgan Stanley will build on
its success as a pre-eminent global financial services firm. This step will
allow me to spend more time directly with clients and ensures an orderly
transition as John and the rest of the management team continue to focus their
efforts -- and the talents of the entire firm - on delivering the quality
service clients expect from Morgan Stanley."
*In January 1996, Morgan Stanley split its stock two-for-one in the form of a
100 percent stock dividend. Prior year per share amounts have been retroactively
adjusted to give effect for the split.
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NINE MONTHS
Net income for the nine months ended August 31, 1996 was $793 million, or $4.79
per share on a primary basis and $4.59 per share on a fully diluted basis. Net
revenues for the period were $4,264 million. Results for the comparable nine
months ended August 31, 1995 were net income of $422 million, earnings per share
of $2.41 on a primary basis and $2.29 on a fully diluted basis, and net revenues
of $2,955 million.
OPERATIONS
Following record-setting activity in the first half of fiscal 1996, less
favorable market conditions prevailed in the third quarter. Nevertheless, the
Firm's fiscal third quarter performance continued to reflect its diverse mix of
core business -- investment banking, sales and trading, and asset management --
which produced higher revenues than the comparable prior year quarter.
Investment banking revenues of $431 million for the third quarter were the third
best in the Firm's history. Mergers and acquisitions activity remained robust
with Morgan Stanley retaining its number one ranking in announced transactions
worldwide through August 31, 1996. **
Sales and trading revenues for the third quarter were up from the comparable
1995 quarter. The slow summer months coupled with heightened inflation concerns
contributed to periods of lower volatility during the quarter and to lower
trading volumes than in the first two fiscal quarters of 1996.
Asset management and administration revenues for the third quarter of $137
million were up substantially over the comparable quarter in fiscal 1995. This
reflected the incremental revenues from Miller Anderson & Sherrerd, LLP which
Morgan Stanley acquired in January of this year.
The acquisition of Miller Anderson & Sherrerd, and the previously announced
agreement to acquire Van Kampen American Capital, Inc., are key steps in Morgan
Stanley's expansion of its asset management business. Total assets under
management by Morgan Stanley Asset Management and Miller Anderson & Sherrerd
have grown to approximately $102 billion. The Firm expects to close its
acquisition of Van Kampen American Capital in the fourth quarter of fiscal 1996,
subject to customary closing conditions. The Firm's asset management business,
including Van Kampen American Capital, has pro forma assets under management of
approximately $160 billion.
Richard B. Fisher, Chairman, and John J. Mack, President, said in a joint
statement:
"We are pleased by the Firm's strong performance during the quarter despite
lower levels of client activity in many of our key businesses. We believe the
Firm's performance reflects our ongoing efforts to build a balanced and
diversified mix of businesses and the strength of the Morgan Stanley global
franchise. That strength is the result of a 61-year tradition of providing
innovative financial solutions to our clients around the world. We are confident
that the Firm is positively positioned to capitalize on the increasing trends in
the financial services business."
**Source: Securities Data Corporation
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DIVIDEND
The company 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
November 1, 1996 to shareholders of record on October 14, 1996.
During the quarter, the Firm repurchased $42 million of its common stock, for a
total of $507 million in the first three quarters of fiscal 1996. This compares
to a total of $103 million in repurchased common stock for all of fiscal 1995.
The Firm's remaining repurchase authorization is approximately $258 million.
Total capital (stockholders' equity and long-term debt) at August 31, 1996 was
$17.2 billion, including $5.5 billion of common and preferred stockholders'
equity. Book value per common share was $30.78 based on quarter-end shares and
share-equivalents of 153,999,832.
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)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
------------------ -----------------
AUGUST 31 AUGUST 31 AUGUST 31 AUGUST 31
1996 1995 1996 1995
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<S> <C> <C> <C> <C>
REVENUES:
Investment banking $ 431 $ 355 $ 1,372 $ 871
Principal transactions:
Trading 427 352 1,696 989
Investments 29 69 60 82
Commissions 148 130 461 372
Interest and dividends 2,144 1,899 6,023 5,501
Asset management and administration 137 96 402 275
Other -- 1 3 4
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Total revenues 3,316 2,902 10,017 8,094
Interest expense 2,029 1,751 5,753 5,139
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NET REVENUES 1,287 1,151 4,264 2,955
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EXPENSES EXCLUDING INTEREST:
Compensation and benefits 645 575 2,100 1,416
Occupancy and equipment 89 84 261 247
Brokerage, clearing and exchange fees 65 64 199 185
Communications 38 31 105 99
Business development 37 30 116 107
Professional services 58 37 153 121
Other 40 32 119 100
Relocation charge -- -- -- 59
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Total expenses excluding interest 972 853 3,053 2,334
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Income before income taxes 315 298 1,211 621
Provision for income taxes 96 89 418 199
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NET INCOME $ 219 $ 209 $ 793 $ 422
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EARNINGS APPLICABLE TO COMMON SHARES (1) $ 204 $ 192 $ 745 $ 373
============ ============ ============ ============
Average common and common equivalent
shares outstanding (1) (2) 154,034,233 157,236,918 155,305,534 155,249,074
============ ============ ============ ============
Primary earnings per share (2) $ 1.32 $ 1.23 $ 4.79 $ 2.41
============ ============ ============ ============
FULLY DILUTED EARNINGS PER SHARE (2) $ 1.27 $ 1.17 $ 4.59 $ 2.29
============ ============ ============ ============
</TABLE>
(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.
