1
Exhibit 99.1
PaineWebber
-------------------------------------------------------------------------------
N E W S R E L E A S E
-------------------------------------------------------------------------------
XXXXX XXXXXX GROUP REPORTS QUARTERLY EARNINGS
NEW YORK, October 13, 1998 -- Xxxxx Xxxxxx Group Inc. reported today net
income of $82.9 million, or $0.51 per diluted share, for the quarter ended
September 30, 1998, compared with $112.8 million, or $0.70 per diluted share,
for the third quarter of 1997. Net revenues for the third quarter of 1998 were
$1.031 billion, compared with $1.082 billion in the corresponding period a year
ago, a decline of 4.7 percent.
For the nine months ended September 30, 1998, net income was $333.1
million, a record, compared with $306.7 million in the corresponding period in
1997. Net revenues for the first nine months of 1998 were $3.309 billion, also
a record, and an increase of 8.7 percent from the year-ago period.
Commissions and asset management revenues for the quarter reached record
levels. Commissions totaled $410.8 million, an increase of 6.1 percent from the
third quarter of 1997, and asset management revenues were $184.7 million, an
increase of 30.3 percent from the corresponding period a year ago. As of
September 30, 1998, the firm had total capital of $6.64 billion, up from $5.73
billion a year ago.
Recurring fee income, an indicator of the stability and quality of the
firm's revenue stream, reached $908 million for the first nine months of 1998,
annualized, an increase of 36.5 percent from the corresponding period in 1997.
The ratio of recurring fee income, combined with net margin interest, to fixed
expenses reached 93 percent, up from 80 percent a year ago.
"We are pleased with our results, which reflect the soundness of the
firm's domestic focus and asset-gathering strategy during the recent period of
volatility in the global financial markets," said Xxxxxx X. Xxxxxx,
PaineWebber's chairman and chief executive officer. "The value of our
distribution network and strong client relationships were significant
contributing factors to our performance during the quarter and our record
nine-month results. We are confident that PaineWebber will continue to benefit
from the long-term demographic and economic trends in the United States,
providing clients with quality research and tailored advice, while maintaining
a conservative risk profile."
2
Xxxxx Xxxxxx Group Inc.
October 13, 1998
Page 2
Xxxxx Xxxxxx Group Inc., together with its subsidiaries, serves the
investment and capital needs of a worldwide client base. The firm employs
17,424 people in 299 offices. As of September 30, 1998, the book value per
share was $15.86.
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--
3
XXXXX XXXXXX GROUP INC.
QUARTERLY STATISTICAL SUPPLEMENT - OPERATING RESULTS [UNAUDITED]
3Q 98 2Q 98 1Q 98 4Q 97 3Q 97
------------------------------------------------------------------------------------------------------------------------
XXX Common 14.0% 23.7% 23.5% 22.3% 24.3%
Income Before Taxes & Minority Interest
as a Percentage of Net Revenue 13.4% 18.2% 17.8% 16.4% 16.8%
------------------------------------------------------------------------------------------------------------------------
E.P.S. [Diluted] $0.51 $0.82 $0.77 $0.68 $0.70
Diluted Shares [Millions] 151.4 151.2 149.5 150.9 152.1
Dividends Paid Per Common Share $0.11 $0.11 $0.11 $0.11 $0.10
Book Value Per Common Share $15.86 $15.38 $14.46 $13.80 $13.28
Common Shares Outstanding [Millions] 142.8 140.6 139.3 139.9 132.3
------------------------------------------------------------------------------------------------------------------------
Total Capital [$Billions] $6.64 $6.56 $6.14 $5.91 $5.73
Total Shareholders' Equity [$Billions] $2.26 $2.16 $2.02 $1.93 $1.86
------------------------------------------------------------------------------------------------------------------------
Assets Under Control [$Billions] $313.2 $329.3 $322.6 $297.1 $288.6
Assets Under Management [$Billions] $54.1 $54.7 $54.0 $48.9 $48.1
Money Market Funds 29.9 28.6 29.0 25.9 25.6
Long Term Mutual Funds 12.5 13.2 12.4 11.3 11.1
Institutional and Other 11.7 12.9 12.6 11.7 11.4
Wrap Fee Assets [$Billions] $24.7 $26.5 $24.8 $21.4 $20.5
------------------------------------------------------------------------------------------------------------------------
Recurring Fees (YTD Annualized) $908 $886 $836 $700 $665
[$Millions]
Recurring Fees (Incl. Margin Interest) -
As a % of Fixed Costs 93% 94% 86% 84% 80%
------------------------------------------------------------------------------------------------------------------------
Employees 17,424 17,045 16,828 16,627 16,437
Investment Executives 6,739 6,551 6,401 6,249 6,140
Sales Offices 299 300 299 299 299
------------------------------------------------------------------------------------------------------------------------
4
XXXXX XXXXXX GROUP INC.
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)
(UNAUDITED)
Quarter Ended September 30, Nine Months Ended September 30,
1998 1997 1998 1997
------------ ------------ ------------ ------------
REVENUES
Commissions $ 410,832 $ 387,210 $ 1,221,050 $ 1,104,507
Principal Transactions 148,453 289,276 669,562 801,037
Asset Management 184,691 141,707 525,555 388,002
Investment Banking 119,629 128,414 421,285 337,126
Interest 909,168 785,564 2,572,253 2,176,655
Other 36,375 32,285 104,836 104,589
------------ ------------ ------------ ------------
TOTAL REVENUES 1,809,148 1,764,456 5,514,541 4,911,916
Interest Expense 777,672 682,513 2,205,920 1,869,199
------------ ------------ ------------ ------------
NET REVENUES 1,031,476 1,081,943 3,308,621 3,042,717
------------ ------------ ------------ ------------
NON-INTEREST EXPENSES
Compensation and Benefits 616,927 640,113 1,949,590 1,788,361
Office & Equipment 76,170 69,341 223,572 206,165
Communications 38,791 38,083 113,687 114,052
Business Development 27,568 22,174 75,937 58,984
Brokerage, Clearing & Exchange Fees 24,270 22,068 71,847 66,130
Professional Services 30,581 35,107 94,563 91,923
Other Expenses 78,570 73,485 230,632 219,299
------------ ------------ ------------ ------------
TOTAL NON-INTEREST EXPENSES 892,877 900,371 2,759,828 2,544,914
------------ ------------ ------------ ------------
INCOME BEFORE INCOME TAXES & MINORITY INTEREST 138,599 181,572 548,793 497,803
Provision for Income Taxes 47,646 60,729 191,482 170,091
------------ ------------ ------------ ------------
INCOME BEFORE MINORITY INTEREST 90,953 120,843 357,311 327,712
Minority Interest 8,061 8,061 24,183 20,971
------------ ------------ ------------ ------------
NET INCOME $ 82,892 $ 112,782 $ 333,128 $ 306,741
============ ============ ============ ============
NET INCOME APPLICABLE TO COMMON SHARES $ 76,980 $ 105,404 $ 315,393 $ 284,606
EARNINGS PER SHARE
BASIC $ 0.54 $ 0.78 $ 2.25 $ 2.09
DILUTED $ 0.51 $ 0.70 $ 2.10 $ 1.88
WEIGHTED AVERAGE COMMON SHARES
BASIC 141,323,000 134,302,000 140,154,000 136,423,000
DILUTED 151,357,000 152,098,000 150,538,000 154,183,000
