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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): March 27, 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 months ended February 28, 1997 and
February 29, 1996, (2) announcing the declaration by the Company's
Board of Directors of a quarterly cash dividend of 20 cents per common
share and (3) announcing the formal recision by the Board of Directors
of the Company's existing stock repurchase authorization.
Item 7(c). Exhibits
99. Press release dated March 27, 1997 (1) summarizing the financial
results of the Company for the three months ended February 28, 1997 and
February 29, 1996, (2) announcing the declaration by the Company's
Board of Directors of a quarterly cash dividend of 20 cents per common
share and (3) announcing the formal recision by the Board of Directors
of the Company's existing stock repurchase authorization.
.
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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
Ralph L. Pellecchio
Assistant Secretary
Date: March 27, 1997
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Index to Exhibits
Exhibit No. Description
99 Press release dated March 27, 1997 (1)
summarizing the financial results of the Company
for the three months ended February 28, 1997 and
February 29, 1996, (2) announcing the
declaration by the Company's Board of Directors
of a quarterly cash dividend of 20 cents per
common share and (3) announcing the formal
recision by the Board of Directors of the
Company's existing stock repurchase authorization.
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Exhibit 99
FOR IMMEDIATE RELEASE
Contact: Investor Relations
Eileen Wallace John Andrews
212-762-7368 212-762-8131
Media Relations John Diat
Jeanmarie McFadden 212-761-6403
212-761-4059
MORGAN STANLEY GROUP INC. ANNOUNCES RECORD QUARTERLY EARNINGS
NEW YORK, March 27, 1997 -- Morgan Stanley Group Inc. (NYSE:MS) today announced
record net income of $316 million, or $1.88 per common share on a primary basis
and $1.80 per common share on a fully diluted basis, for the first quarter ended
February 28, 1997. Net income for the quarter was 16% above the $273 million, or
$1.64 per share on a primary basis and $1.57 per share on a fully diluted basis,
earned in the first quarter of fiscal 1996.
Net revenues (total revenues less interest expense) for the first quarter
of fiscal 1997 were a record $1,794 million compared with $1,449 million earned
in the first quarter of fiscal 1996. The after-tax return on equity for the
first quarter of fiscal 1997 was 21.8%.
Earnings for the first quarter excluding the amortization of goodwill associated
with the Company's acquisitions during fiscal 1996 of Miller Anderson &
Sherrerd, LLP and Van Kampen American Capital, Inc. were $1.93 per share on a
primary basis, and $1.85 on a fully diluted basis. The after-tax return on
equity excluding the amortization of goodwill was 22.4%.
The Company's two businesses, securities and asset management, both posted
strong revenues in the quarter.
Within the Company's securities business, investment banking revenues of $442
million were 11% higher than the first quarter of fiscal 1996 as a result
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of continued strong activity in mergers and acquisitions and underwriting
transactions, particularly in investment grade debt. Sales and trading revenues
(combined trading, commissions and net interest) of $1,018 million for the first
quarter were up 9% over the strong first quarter of fiscal 1996. The low
inflationary environment, heightened levels of market volatility, and increased
investor trading activity contributed to record revenues in the Company's fixed
income and foreign exchange businesses, and near-record revenues in equity and
commodities trading.
Asset management revenues of $278 million were 128% above those earned in the
first quarter of 1996. First quarter results reflect growth in assets under
management and administration and the first full quarter of revenues from Van
Kampen American Capital, Inc. which the Company acquired on October 31, 1996.
The Company now has approximately $328 billion of assets under management and
administration. Of this, approximately $176 billion was under management or
supervision by the Company's asset management business, and approximately $152
billion was under administration by the Company's global custody business.
Richard B. Fisher, chairman, and John J. Mack, president, said in a joint
statement:
"We believe the Firm's strong quarterly results reflect not only the
favorable operating environment, but also the strength and breadth of
Morgan Stanley's businesses and global franchise. We were particularly
pleased with the record achievements in fixed income, foreign exchange
and asset management as well as the very strong performance in
equities, commodities and investment banking. This past quarter has
been historic for Morgan Stanley, not only because of our record
earnings, but also because of our announced agreement to merge with
Dean Witter Discover."
The Company also announced the declaration by its board of directors of a
quarterly dividend of 20 cents per common share. The dividend is payable on
April 25, 1997 to holders of record on April 4, 1997.
During the quarter, the Company repurchased $62 million of its common stock. The
Company ceased open market repurchases of its common stock upon announcement of
the merger agreement with Dean Witter, Discover &
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Co. on February 5, 1997. At the time of the merger announcement, the Company's
unused stock repurchase authorization was approximately $593 million. In light
of the merger announcement, the Company's board of directors has now formally
rescinded this stock repurchase authorization.
Total capital (stockholder's equity and long-term debt) at February 28, 1997 was
$21.3 billion, including $6.5 billion of common and preferred stockholders'
equity. Book value per common share was $34.76,
based on quarter-end shares and share-equivalents of 160,254,883.
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>
<S> <C>
THREE MONTHS
ENDED
---------------------------------------------
FEB 28 FEB 29
1997 1996
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Revenues:
Investment banking $442 $399
Principal transactions:
Trading 751 704
Investments 56 (7)
Commissions 182 154
Interest and dividends 2,367 1,933
Asset management and administration 278 122
Other - 3
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Total revenues 4,076 3,308
Interest expense 2,282 1,859
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Net revenues 1,794 1,449
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Expenses excluding interest:
Compensation and benefits 879 705
Occupancy and equipment 100 86
Brokerage, clearing and exchange fees 84 66
Communications 40 33
Business development 59 37
Professional services 60 42
Other 62 40
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Total expenses excluding interest 1,284 1,009
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Income before income taxes 510 440
Provision for income taxes 194 167
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Net income $316 $273
==================== =====================
Earnings applicable to common shares (1) $297 $257
==================== =====================
Average common and common equivalent
shares outstanding (1) 158,307,567 156,549,243
==================== =====================
Primary earnings per share $1.88 $1.64
==================== =====================
Fully diluted earnings per share $1.80 $1.57
==================== =====================
(1) For primary earnings per share.
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