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Exhibit 99.1
PaineWebber
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N E W S R E L E A S E
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XXXXX XXXXXX GROUP REPORTS RECORD RESULTS FOR 1998
-- 1998 EARNINGS PER SHARE OF $2.72; NET INCOME RISES TO $433.6 MILLION --
-- THIRD CONSECUTIVE YEAR OF RECORD EARNINGS FOR FIRM --
NEW YORK, January 19, 1999 -- Xxxxx Xxxxxx Group Inc. announced today
record financial results for fiscal 1998. Net income was $433.6 million, or
$2.72 per diluted share, for the year ended December 31, 1998, compared with net
income of $415.4 million, or $2.56 per diluted share for fiscal 1997. Revenues,
including net interest, for 1998 were $4.4 billion, an increase of 7 percent
from $4.1 billion the previous year.
For the fourth quarter ended December 31, 1998, net income was $100.4
million, or $0.63 per diluted share, compared with $108.7 million, or $0.68 per
diluted share, in the corresponding period a year ago. Revenues, including net
interest, were $1.10 billion, compared with $1.07 billion in the fourth quarter
of 1997. Return on common equity was 16.3 percent for the quarter, compared with
22.3 percent for the year-ago period.
"We are pleased to report the third consecutive year of record earnings for
PaineWebber," said Xxxxxx X. Xxxxxx, PaineWebber's chairman and chief executive
officer. "Our 1998 revenues, the highest in the firm's 119-year history, reflect
strength across all business lines and include record results in commissions,
asset management and investment banking. These results were achieved despite a
downturn in world markets during the third quarter, and reflect the firm's
commitment to a consistent business strategy, domestic focus and conservative
risk profile.
"As we prepare for the new century, we are confident that our determination
to offer the best quality advice to investors, together with our strong brand
name, will be increasingly valuable in a crowded marketplace," Xx. Xxxxxx said.
"At the same time, we will focus on developing businesses with the highest
potential for growth to drive continued performance success and strong returns
for our shareholders."
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Xxxxx Xxxxxx Group Inc.
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Among the highlights:
- Assets under control, a key measure of the firm's asset gathering strategy,
reached $352 billion, a record, and an increase of 18 percent from $297
billion a year ago. Assets under control have grown at an annual compound
rate of 20.4 percent for the last five years.
- Assets under management reached $58.5 billion, a record, and an increase of
nearly 20 percent from 1997. Sales of mutual funds by Xxxxxxxx Xxxxxxxx,
the firm's asset management subsidiary, reached the highest levels in five
years, increasing by 71 percent from 1997.
- Wrap fee assets, a main component of the strategy of developing fee-based
assets, were $30.6 billion, a record, and an increase of 43 percent from a
year ago.
- Recurring fee income, a reflection of the quality of the firm's revenue
stream, reached an all-time high of $921 million, an increase of 32 percent
from 1997.
- In December Xxxxx Xxxxxx announced a joint venture with the Yasuda Mutual
Life Insurance Company to develop, sponsor and manage mutual funds in
Japan.
- At year-end, the firm employed 6,951 investment executives, an all-time
high, and an increase of 11 percent from a year ago.
- The Municipal Securities Group achieved the No. 1 industry ranking for the
fourth quarter in negotiated senior underwritings, and was No. 2 for the
full year 1998.
- The firm's overall financial strength improved significantly in 1998 from a
year ago, with record levels in the following: book value per common share
of $16.76, an increase of 21.4 percent; total capital of $7.28 billion, an
increase of 23.2%; and total shareholders' equity of $2.44 billion,
an increase of 26.4 percent.
Xxxxx Xxxxxx Group Inc., together with its subsidiaries, serves the
investment and capital needs of a worldwide client base. The firm employs 17,767
people in 303 offices.
THIS NEWS RELEASE AND MORE INFORMATION ABOUT XXXXX XXXXXX GROUP INC. CAN BE
FOUND ON OUR CORPORATE SITE ON THE WORLD WIDE WEB, xxx.xxxxxxxxxxx.xxx.
- Two tables to follow -
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XXXXX XXXXXX GROUP INC.
QUARTERLY STATISTICAL SUPPLEMENT - OPERATING RESULTS [UNAUDITED]
4Q 98 3Q 98 2Q 98 1Q 98 4Q 97
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XXX Common 16.3% 14.0% 23.7% 23.5% 22.3%
Income Before Taxes & Minority Interest
as a Percentage of Net Revenue 15.2% 13.4% 18.2% 17.8% 16.4%
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E.P.S. [Diluted] $0.63 $0.51 $0.82 $0.77 $0.68
Diluted Shares [Millions] 150.9 151.4 151.2 149.5 150.9
Dividends Paid Per Common Share $0.11 $0.11 $0.11 $0.11 $0.11
Book Value Per Common Share $16.76 $15.86 $15.38 $14.46 $13.80
Common Shares Outstanding [Millions] 145.5 142.8 140.6 139.3 139.9
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Total Capital [$Billions] $7.28 $6.64 $6.56 $6.14 $5.91
Total Shareholders' Equity [$Billions] $2.44 $2.26 $2.16 $2.02 $1.93
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Assets Under Control [$Billions] $351.7 $313.2 $329.3 $322.6 $297.1
Assets Under Management [$Billions] $58.5 $54.1 $54.7 $54.0 $48.9
Money Market Funds 31.4 29.9 28.6 29.0 25.9
Long Term Mutual Funds 13.8 12.5 13.2 12.4 11.3
Institutional and Other 13.3 11.7 12.9 12.6 11.7
Wrap Fee Assets [$Billions] $30.6 $24.7 $26.5 $24.8 $21.4
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Recurring Fees (YTD Annualized) $921 $908 $886 $836 $700
[$Millions]
Recurring Fees (Incl. Margin Interest) -
As a % of Fixed Costs 91% 93% 94% 86% 84%
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Employees 17,767 17,424 17,045 16,828 16,627
Investment Executives 6,951 6,739 6,551 6,401 6,249
Sales Offices 303 299 300 299 299
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XXXXX XXXXXX GROUP INC.
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)
(UNAUDITED)
Quarter Ended December 31, Year Ended December 31,
1998 1997 1998 1997
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REVENUES
Commissions $ 420,233 $ 392,284 $ 1,641,283 $ 1,496,791
Principal Transactions 199,245 254,611 868,807 1,055,648
Asset Management 188,015 154,753 713,570 542,755
Investment Banking 109,687 122,875 530,972 460,001
Interest 780,455 786,469 3,352,708 2,963,124
Other 37,406 34,044 142,242 138,633
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TOTAL REVENUES 1,735,041 1,745,036 7,249,582 6,656,952
Interest Expense 638,548 675,351 2,844,468 2,544,550
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NET REVENUES 1,096,493 1,069,685 4,405,114 4,112,402
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NON-INTEREST EXPENSES
Compensation and Benefits 651,774 631,935 2,601,364 2,420,296
Office & Equipment 78,273 69,367 301,845 275,532
Communications 40,585 39,233 154,272 153,285
Business Development 27,350 23,115 103,287 82,099
Brokerage, Clearing & Exchange Fees 25,583 20,678 97,430 86,808
Professional Services 28,702 37,143 123,265 129,066
Other Expenses 78,012 72,910 308,644 292,209
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TOTAL NON-INTEREST EXPENSES 930,279 894,381 3,690,107 3,439,295
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INCOME BEFORE INCOME TAXES & MINORITY INTEREST 166,214 175,304 715,007 673,107
Provision for Income Taxes 57,726 58,535 249,208 228,626
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INCOME BEFORE MINORITY INTEREST 108,488 116,769 465,799 444,481
Minority Interest 8,061 8,061 32,244 29,032
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NET INCOME $ 100,427 $ 108,708 $ 433,555 $ 415,449
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NET INCOME APPLICABLE TO COMMON SHARES $ 94,515 $ 101,330 $ 409,908 $ 385,936
EARNINGS PER SHARE
BASIC $ 0.66 $ 0.75 $ 2.91 $ 2.84
DILUTED $ 0.63 $ 0.68 $ 2.72 $ 2.56
WEIGHTED AVERAGE COMMON SHARES
BASIC 143,074,000 134,559,000 140,864,000 135,943,000
DILUTED 150,920,000 150,925,000 150,611,000 153,348,000
