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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): January 7, 1997
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 (1) summarizing the financial results of Morgan Stanley Group
Inc. (the "Company") for the three-month periods ended November 30,
1996 and 1995, for the twelve-month period ended November 30, 1996 and
for the ten-month and twelve-month (annualized) periods ended November
30, 1995, (2) announcing the declaration by the Company's Board of
Directors of an increase in the regular quarterly cash dividend to 20
cents per common share and (3) announcing the authorization by the
Company's Board of Directors of the purchase, subject to market and
other conditions, of an additional $400 million of the Company's Common
Stock.
ITEM 7(c). EXHIBITS
99. Press release dated January 7, 1997 (1) summarizing the financial
results of the Company for the three-month periods ended November 30,
1996 and 1995, for the twelve-month period ended November 30, 1996 and
for the ten-month and twelve-month (annualized) periods ended November
30, 1995, (2) announcing the declaration by the Company's Board of
Directors of an increase in the regular quarterly cash dividend to 20
cents per common share and (3) announcing the authorization by the
Company's Board of Directors of the purchase, subject to market and
other conditions, of an additional $400 million of the Company's Common
Stock.
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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/ Patricia A. Kurtz
-----------------------------------
Patricia A. Kurtz
Assistant Secretary
Date: January 7, 1997
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Index to Exhibits
Exhibit No. Description
- ----------- -----------
99. Press release dated January 7, 1997 (1) summarizing the
financial results of the Company for the three-month
periods ended November 30, 1996 and 1995, for the
twelve-month period ended November 30, 1996 and for the
ten-month and twelve-month (annualized) periods ended
November 30, 1995, (2) announcing the declaration by the
Company's Board of Directors of an increase in the regular
quarterly cash dividend to 20 cents per common share and
(3) announcing the authorization by the Company's Board of
Directors of the purchase, subject to market and other
conditions, of an additional $400 million of the Company's
Common Stock.
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EXHIBIT 99
MORGAN STANLEY
NEWS
FOR IMMEDIATE RELEASE
Contact: Investor Relations
Eileen Wallace John Andrews
212/762-7368 212/762-8131
Media Relations
Jeanmarie McFadden
212/761-4059
MORGAN STANLEY GROUP INC. ANNOUNCES RECORD EARNINGS IN FISCAL YEAR 1996
NEW YORK, January 7, 1997 -- Morgan Stanley Group Inc. (NYSE:MS) today announced
a 43% increase in annual net income to a record $1,029 million for the fiscal
year ended November 30, 1996.(1) Fiscal year 1996 earnings were $6.27 per common
share on a primary basis, and $5.96 per common share on a fully-diluted basis.
Net revenues (gross revenues less interest expense) for the fiscal year were
$5,776 million.
These results compare to annualized net income of $720 million, primary earnings
per share of $4.18, fully-diluted earnings per share of $4.00, and net revenues
of $4,348 million for the fiscal period ended November 30, 1995. The Company's
previous record net income was $786 million in fiscal year 1993.
Net income for the fourth quarter ended November 30, 1996 of $236 million was
26% higher than the equivalent quarter of fiscal 1995 and 8% above the third
quarter of fiscal 1996. Earnings for the fourth quarter of fiscal 1996 were
$1.43 per common share on a primary basis and $1.36 on a fully-diluted basis.
Net revenues for the quarter were $1,512 million.
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(1) Fiscal 1995 was a ten-month period resulting from the change in Morgan
Stanley's fiscal year-end from January 31 to November 30. The results reported
for this period have been annualized to facilitate more meaningful comparisons
with Fiscal 1996 full-year operating results.
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2
All of the Company's three main businesses - investment banking, sales &
trading, and asset management - reported record revenues for fiscal 1996.
Investment banking revenues of $572 million in the fourth quarter surpassed the
previous quarterly record of $542 million set in the second quarter of fiscal
1996. Investment banking revenues for fiscal 1996 of $1,944 million were 34%
higher than annualized fiscal 1995, the prior record year for investment
banking. The Company's strong franchise in investment banking was evident in its
participation in some of the year's largest underwriting transactions and its
retention of the number-one ranking in global mergers and acquisitions for a
second year in a row.(2)
Sales & trading revenues (combined trading, commissions and net interest) in the
fourth quarter of $729 million were 37% higher than the equivalent quarter of
1995. Fiscal 1996 sales & trading revenues of $3,156 million were 32% higher
than annualized fiscal 1995. Sales & trading revenues benefited throughout the
year from the low inflationary environment in key global financial markets.
These favorable economic conditions led to many markets reaching new highs in
1996 and prompted an increase in customer demand for the full range of the
Company's global sales & trading services.
Asset management revenues of $180 million and $582 million for the fourth
quarter and full year of fiscal 1996 were up 90% and 56% over the equivalent
periods in annualized fiscal 1995, respectively. In fiscal 1996, the Company
completed its acquisition of Miller Anderson & Sherrerd, LLP in January, and Van
Kampen American Capital, Inc. on October 31. These acquisitions expanded assets
under management and broadened the Company's investment management business to
include both institutional and retail sectors. Total assets under management at
November 30, 1996 were $171 billion compared to $55 billion at the end of fiscal
1995.
"We have just completed a very successful year at Morgan Stanley," said Richard
B. Fisher, chairman, and John J. Mack, president, in a joint statement. "In
addition to producing record earnings, we made substantial strides in our
strategy of building the leading global financial services franchise. Besides
the very important additions of Miller Anderson & Sherrerd and Van Kampen
American Capital to our asset management
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(2) Source: Securities Data Corporation, announced worldwide transactions
through November 30, 1996
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3
business, and our recently announced agreement to purchase Barclays' global
custody business, we have also continued to expand our capabilities and global
presence in investment banking and sales & trading. We intend to continue
managing our business for the long-term and believe that our competitive
position in global financial services is strengthening."
The Company also announced the declaration of a 14% increase in the regular
quarterly dividend from 17.5 to 20 cents per common share. The dividend is
payable on February 6, 1997 to holders of record on January 20, 1997.
The board of directors also authorized the purchase, subject to market
conditions and certain other factors, of an additional $400 million of the
Company's common stock. In fiscal 1996, the Company repurchased a total of $507
million of its common stock, compared to $103 million of its common stock in
fiscal 1995. Common stock repurchases in December 1996 aggregated approximately
$21 million. Combined with the Company's currently unused stock repurchase
authorization of $235 million, the Company's total share repurchase authority is
approximately $635 million.
Total capital (stockholder's equity and long-term debt) at November 30, 1996 was
$18.9 billion, including $6.5 billion of common and preferred stockholders'
equity. Book value per common share grew 24% in fiscal 1996 to $35.03 based on
quarter-end shares and share-equivalents of 154,709,733.
Morgan Stanley Group Inc. is a global financial services company 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>
FISCAL FISCAL
THREE MONTHS ENDED TWELVE PERIOD ENDED PERIOD ENDED
------------------ MONTHS ENDED NOV 30 NOV 30
NOV 30 NOV 30 NOV 30 1995 1995
1996 1995 1996 (10 MONTHS) (ANNUALIZED) (3)
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Revenues:
Investment banking $ 572 $ 503 $ 1,944 $ 1,211 $ 1,453
Principal transactions:
Trading 514 218 2,210 1,122 1,346
Investments 26 39 86 102 122
Commissions 152 139 613 437 525
Interest and dividends 1,678 1,710 7,701 5,939 7,127
Asset management and administration 180 95 582 310 372
Other 5 -- 8 3 4
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Total revenues 3,127 2,704 13,144 9,124 10,949
Interest expense 1,615 1,536 7,368 5,501 6,601
------------ ------------ ------------ ------------ ------------
Net revenues 1,512 1,168 5,776 3,623 4,348
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Expenses excluding interest:
Compensation and benefits 763 607 2,863 1,795 2,154
Occupancy and equipment 101 85 362 276 331
Brokerage, clearing and exchange fees 75 61 274 211 253
Communications 41 32 146 108 130
Business development 54 32 170 110 132
Professional services 73 40 226 131 157
Other 44 35 163 109 131
------------ ------------ ------------ ------------ ------------
Total expenses excluding interest 1,151 892 4,204 2,740 3,288
------------ ------------ ------------ ------------ ------------
Income before income taxes 361 276 1,572 883 1,060
Provision for income taxes 125 89 543 283 340
------------ ------------ ------------ ------------ ------------
Net income $ 236 $ 187 $ 1,029 $ 600 $ 720
============ ============ ============ ============ ============
Earnings applicable to common shares (1) $ 218 $ 171 $ 963 $ 546 $ 655
============ ============ ============ ============ ============
Average common and common equivalent
shares outstanding (1) (2) 153,234,429 158,415,826 153,514,483 156,912,678 156,912,678
============ ============ ============ ============ ============
Primary earnings per share (2) $ 1.43 $ 1.08 $ 6.27 $ 3.48 $ 4.18
============ ============ ============ ============ ============
Fully diluted earnings per share (2) $ 1.36 $ 1.04 $ 5.96 $ 3.33 $ 4.00
============ ============ ============ ============ ============
</TABLE>
(1) For primary earnings per share.
(2) Share and per share amounts for 1995 have been retroactively adjusted to
give effect for the 2-for-1 common stock split which became effective in
January 1996.
(3) Fiscal 1995 was a ten-month period resulting from the change in Morgan
Stanley's fiscal year-end from January 31 to November 30. The information
presented for "Fiscal Period Ended November 30, 1995 Annualized" is
intended to facilitate a more meaningful comparison with the full year
operating results of Fiscal 1996.
