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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 30, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-10000
First Union Corporation
(Exact name of registrant as specified in its charter)
North Carolina 56-0898180
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
First Union Corporation
One First Union Center
Charlotte, North Carolina 28288-0013
(Address of principal executive offices)
(Zip Code)
(704) 374-6565
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes No
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
956,642,299 shares of Common Stock, par value $3.33 1/3 per share, were
outstanding as of July 31, 1999.
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First Union Corporation (the "Corporation" or "FUNC") may from time to
time make written or oral "forward-looking statements", including statements
contained in the Corporation's filings with the Securities and Exchange
Commission (including this Quarterly Report on Form 10-Q and the Exhibits
hereto and thereto), in its reports to stockholders and in other communications
by the Corporation, which are made in good faith by the Corporation pursuant to
the "safe harbor" provisions of the Private Securities Litigation Reform Act of
1995.
These forward-looking statements include, among others, statements with
respect to the Corporation's beliefs, plans, objectives, goals, guidelines,
expectations, anticipations, estimates and intentions that are subject to
significant risks and uncertainties and are subject to change based on various
factors (many of which are beyond the Corporation's control). The words "may",
"could", "should", "would", "believe", "anticipate", "estimate", "expect",
"intend", "plan" and similar expressions are intended to identify
forward-looking statements. The following factors, among others, could cause
the Corporation's financial performance to differ materially from that
expressed in such forward-looking statements: the strength of the United States
economy in general and the strength of the local economies in which the
Corporation conducts operations; the effects of, and changes in, trade,
monetary and fiscal policies and laws, including interest rate policies of the
Board of Governors of the Federal Reserve System; inflation, interest rate,
market and monetary fluctuations; the timely development of competitive new
products and services of the Corporation and the acceptance of these products
and services by new and existing customers; the willingness of customers to
substitute competitors' products and services for the Corporation's products
and services and vice versa; the impact of changes in financial services' laws
and regulations (including laws concerning taxes, banking, securities and
insurance); technological changes; the effect of acquisitions, including,
without limitation, the failure to achieve the expected revenue growth and/or
expense savings from such acquisitions; the growth and profitability of the
Corporation's noninterest or fee income being less than expected; unanticipated
regulatory or judicial proceedings; changes in consumer spending and saving
habits; and the success of the Corporation at managing the risks involved in
the foregoing.
The Corporation cautions that the foregoing list of important factors is
not exclusive. The Corporation does not undertake to update any forward-looking
statement, whether written or oral, that may be made from time to time by or on
behalf of the Corporation.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
The following unaudited consolidated financial statements of the
Corporation within Item 1 include, in the opinion of management, all
adjustments (consisting only of normal recurring adjustments) necessary for
fair presentation of such consolidated financial statements for the periods
indicated.
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FIRST UNION CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED STATEMENTS OF INCOME
CONSOLIDATED STATEMENTS OF CASH FLOWS
The Consolidated Balance Sheets of the Corporation and subsidiaries at
June 30, 1999, June 30, 1998, and December 31, 1998, respectively, set forth on
page T-29 of the Corporation's Second Quarter Financial Supplement for the six
months ended June 30, 1999 (the "Financial Supplement"), are incorporated
herein by reference.
The Consolidated Statements of Income of the Corporation and subsidiaries
for the three and six months ended June 30, 1999 and 1998, set forth on pages
T-30 and T-31 of the Financial Supplement, are incorporated herein by
reference.
The Consolidated Statements of Cash Flows of the Corporation and
subsidiaries for the six months ended June 30, 1999 and 1998, set forth on page
T-32 of the Financial Supplement, are incorporated herein by reference.
A copy of the Financial Supplement is being filed as Exhibit (19) to this
Report.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Management's Discussion and Analysis of Financial Condition and Results of
Operations appears on pages 2 through 21 and T-1 through T-32 of the Financial
Supplement and is incorporated herein by reference.
A copy of the Financial Supplement is being filed as Exhibit (19) to this
Report.
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Part II. OTHER INFORMATION
Item 1. Legal Proceedings
The Corporation and certain subsidiaries have been named as defendants in
various legal actions arising from their normal business activities and as
specifically described below, in which damages in various amounts are claimed.
Although the amount of any ultimate liability with respect to such matter
cannot be determined, in the opinion of management, any such liability will not
have a material impact on the Corporation's consolidated financial condition.
A number of purported class actions were filed in June through August 1999
against the Corporation in the United States District Courts for the Western
District of North Carolina and for the Eastern District of Pennsylvania. These
actions name the Corporation and certain of its executive officers as
defendants and are purported to be on behalf of persons who purchased shares of
the Corporation's common stock from August 14, 1998 through May 24, 1999. These
complaints allege various violations of federal securities law, including
violations of Section 10(b) of the Securities Exchange Act of 1934, and that
the defendants made materially misleading statements and/or material
omissions which artificially inflated prices for the Corporation's common
stock. Plaintiffs seek a judgment awarding damages and other relief. The
Corporation believes the allegations contained in these actions are without
merit and will vigorously defend them.
Item 2. Changes in Securities and Use of Proceeds.
In the first quarter of 1999, in connection with its stock repurchase
program, the Corporation sold 14 million shares of its common stock at a price
of $50.00 per share to an investment banking firm. In connection therewith, the
Corporation agreed to repurchase the 14 million shares or otherwise settle the
contract, at the Corporation's option, at $50.00 per share subject to
adjustment for interest costs, later in 1999. The offer and sale of the shares
of common stock by the Corporation were exempt from registration under the
Securities Act of 1933, as amended, pursuant to Section 4(2) thereof because
such offer and sale did not involve a public offering.
Item 4. Submission of Matters to a Vote of Security Holders.
Information relating to certain proposals voted on at the annual meeting
of the stockholders of the Corporation held on April 20, 1999, is set forth
under Item 4 of the Corporation's 1999 First Quarter Report on Form 10-Q and
incorporated herein by reference.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
Exhibit No. Description
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(4) Instruments defining the rights of security holders, including indentures.*
(12) Computations of Consolidated Ratios of Earnings to Fixed Charges.
(19) The Corporation's Second Quarter 1999 Financial Supplement.
(27) The Corporation's Financial Data Schedule.**
(99) Business segments for the quarters ended March 31, 1999, December 31, 1998, September 30,
1998, and March 31, 1998.
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* The Corporation agrees to furnish to the Commission upon request, copies of
the instruments, including indentures, defining the rights of the holders
of the long-term debt of the Corporation and its consolidated subsidiaries.
** Filing by Electronic Data Gathering, Analysis and Retrieval System only.
(b) Reports on Form 8-K.
During the quarter ended June 30, 1999, a Current Report on Form 8-K,
dated May 25, 1999, was filed with the Commission by the Corporation.
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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 hereunto duly authorized.
FIRST UNION CORPORATION
Date: August 13, 1999
By /s/ James H. Hatch
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James H. Hatch
Senior Vice President and Corporate
Controller
(Principal Accounting Officer)
EXHIBIT INDEX
Exhibit No. Description
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(4) Instruments defining the rights of security holders, including indentures.*
(12) Computations of Consolidated Ratios of Earnings to Fixed Charges.
(19) The Corporation's Second Quarter 1999 Financial Supplement.
(27) The Corporation's Financial Data Schedule.**
Business segments for the quarters ended March 31, 1999, December 31, 1998, September 30,
(99) 1998, and March 31, 1998.
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* The Corporation agrees to furnish to the Commission upon request, copies of
the instruments, including indentures, defining the rights of the holders
of the long-term debt of the Corporation and its consolidated subsidiaries.
** Filing by Electronic Data Gathering, Analysis and Retrieval System only.