<PAGE>
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): December 20, 1999
Morgan Stanley Dean Witter & Co.
--------------------------------------
(Exact name of Registrant as specified
in its charter)
Delaware 1-11758 36-3145972
-------------------------------------------------------------------------
(state or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
1585 Broadway, New York, New York 10036
------------------------------------------------
(Address of principal executive offices)(Zip Code)
Registrant's telephone number, including area code: (212) 761-4000
--------------
-------------------------------------------------------------------------
(Former address, if changed since last report.)
<PAGE>
Item 5. Other Events
- ---------------------
On December 20, 1999, Morgan Stanley Dean Witter & Co. (the
"Registrant") released financial information with respect to the quarter ended
November 30, 1999. A copy of the press release containing such financial
information is annexed as Exhibit 99.1 to this Report and by this reference
incorporated herein and made a part hereof.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
- --------------------------------------------------------------------------
99.1 Press release of the Registrant dated December 20, 1999
containing financial information for the fourth quarter
ended November 30, 1999.
<PAGE>
SIGNATURE
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, thereto duly authorized.
MORGAN STANLEY DEAN WITTER & CO.
--------------------------------
(Registrant)
By: /s/ Ronald T. Carman
--------------------------------
Ronald T. Carman
Assistant Secretary
Dated: December 20, 1999
<PAGE>
MORGAN STANLEY DEAN WITTER & CO.
Financial Summary
(unaudited, dollars in millions)
<TABLE>
<CAPTION>
Quarter Ended Percentage Change From: Twelve Months Ended
------------------------------ ----------------------- -------------------
Nov 30, Nov 30, Aug 31, Nov 30, Aug 31, Nov 30, Nov 30, Percentage
1999 1998 1999 1998 1999 1999 1998 Change
-------- -------- --------- --------- --------- -------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net revenues
Securities $ 4,139 $ 2,641 $ 3,851 57% 7% $ 16,327 $ 11,491 42%
Asset Management 556 515 557 8% -- 2,160 1,811 19%
Credit Services 963 813 935 18% 3% 3,522 3,142 12%
-------- -------- --------- -------- ---------
Consolidated net revenues $ 5,658 $ 3,969 $ 5,343 43% 6% $ 22,009 $ 16,444 34%
======== ======== ========= ======== =========
Net income
Securities $ 1,390 $ 685 $ 644 103% 116% $ 3,674 $ 2,242 64%
Asset Management 118 277 124 (57%) (5%) 455 430 6%
Credit Services 125 262 202 (52%) (38%) 662 721 (8%)
-------- -------- --------- -------- ---------
Income before cumulative effect of a
change in accounting 1,633 1,224 970 33% 68% 4,791 3,393 41%
Cumulative effect of a change in
accounting (1) 0 0 0 -- -- 0 (117) *
-------- -------- --------- -------- ---------
Consolidated net income $ 1,633 $ 1,224 $ 970 33% 68% $ 4,791 $ 3,276 46%
======== ======== ========= ======== =========
Preferred stock dividend requirements $ 11 $ 12 $ 11 (8%) -- $ 44 $ 55 (20%)
======== ======== ========= ======== =========
Earnings applicable to common shares $ 1,622 $ 1,212 $ 959 34% 69% $ 4,747 $ 3,221 47%
======== ======== ========= ======== =========
Operating results (2)
Securities $ 1,390 $ 685 $ 644 103% 116% $ 3,674 $ 2,242 64%
Asset Management 118 95 124 24% (5%) 455 248 83%
Credit Services 125 99 202 26% (38%) 662 558 19%
-------- -------- --------- -------- ---------
Operating results $ 1,633 $ 879 $ 970 86% 68% $ 4,791 $ 3,048 57%
======== ======== ========= ======== =========
</TABLE>
(1) Represents the effects of an accounting change adopted in the fourth
quarter of fiscal 1998 (effective December 1, 1997) with respect to the
accounting for offering costs paid by investment advisors of closed end
funds where such costs are not specifically reimbursed through separate
advisory contracts.
(2) Excludes the effects of the net gain on sale of businesses and the
cumulative effect of a change in accounting.
Note: The accompanying information includes the operating results of the
Private Equity business of Morgan Stanley Dean Witter & Co. within
Securities financial results. Previously, the Company had included
Private Equity's results within Asset Management. The data of prior
periods has been restated to reflect this change.
F-1
<PAGE>
MORGAN STANLEY DEAN WITTER & CO.
Financial Summary
(unaudited)
<TABLE>
<CAPTION>
Percentage
Quarter Ended Change From: Twelve Months Ended
---------------------------------------- ----------------- ----------------------
Nov 30, Nov 30, Aug 31, Nov 30, Aug 31, Nov 30, Nov 30, Percentage
1999 1998 1999 1998 1999 1999 1998 Change
------------ ------------ ------------ ------- ------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Basic earnings per common share
Income before cumulative
effect of a change in
accounting $ 3.00 $ 2.16 $ 1.74 39% 72% $ 8.65 $ 5.80 49%
Cumulative effect of
a change in accounting $ 0.00 $ 0.00 $ 0.00 -- -- $ 0.00 $ (0.20) *
Net income $ 3.00 $ 2.16 $ 1.74 39% 72% $ 8.65 $ 5.60 54%
Diluted earnings per common share
Income before cumulative
effect of a change in
accounting $ 2.84 $ 2.07 $ 1.65 37% 72% $ 8.20 $ 5.52 49%
Cumulative effect of a
change in accounting $ 0.00 $ 0.00 $ 0.00 -- -- $ 0.00 $ (0.19) *
Net income $ 2.84 $ 2.07 $ 1.65 37% 72% $ 8.20 $ 5.33 54%
Operating results(1) $ 2.84 $ 1.49 $ 1.65 91% 72% $ 8.20 $ 4.95 66%
Average common shares outstanding
Basic 539,761,422 560,108,890 550,056,731 548,394,860 575,822,725
Diluted 571,043,123 585,533,337 580,700,823 579,750,335 606,294,065
Period end common shares
outstanding 552,315,049 565,670,808 559,244,249 552,315,049 565,670,808
Return on common equity 43.1% 37.5% 25.9% 32.6% 24.5%
Return on common equity (1) 43.1% 27.0% 25.9% 32.6% 22.7%
</TABLE>
____________________________________
(1) Excludes the effects of the net gain on sale of businesses and the
cumulative effect of a change in accounting.
F-2
<PAGE>
MORGAN STANLEY DEAN WITTER & CO.
Consolidated Income Statement Information
(unaudited, dollars in millions)
<TABLE>
<CAPTION>
Percentage
Quarter Ended Change From: Twelve Months Ended
------------------------------- ------------------- --------------------
Nov 30, Nov 30, Aug 31, Nov 30, Aug 31, Nov 30, Nov 30, Percentage
1999 1998 1999 1998 1999 1999 1998 Change
--------- ---------- ---------- --------- --------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investment banking $ 1,338 $ 733 $ 1,207 83% 11% $ 4,523 $ 3,340 35%
Principal transactions:
Trading 1,195 796 1,178 50% 1% 5,982 3,283 82%
Investments 232 90 78 158% 197% 725 89 715%
Commissions 786 579 709 36% 11% 2,921 2,323 26%
Fees:
Asset management, distribution and
administration 830 726 825 14% 1% 3,170 2,889 10%
Merchant and cardmember 402 377 392 7% 3% 1,492 1,647 (9%)
Servicing 318 270 313 18% 2% 1,194 928 29%
Interest and dividends 3,741 4,007 4,961 (7%) (25%) 15,871 16,436 (3%)
Other 41 42 39 (2%) 5% 166 196 (15%)
--------- -------- -------- -------- -------
Total revenues 8,883 7,620 9,702 17% (8%) 36,044 31,131 16%
Interest expense 3,105 3,438 4,246 (10%) (27%) 13,506 13,514 --
Provision for consumer loan losses 120 213 113 (44%) 6% 529 1,173 (55%)
--------- -------- -------- -------- -------
Net revenues 5,658 3,969 5,343 43% 6% 22,009 16,444 34%
--------- -------- -------- -------- -------
Compensation and benefits 1,320 1,222 2,302 8% (43%) 8,398 6,636 27%
Occupancy and equipment 178 152 166 17% 7% 643 583 10%
Brokerage, clearing and exchange fees 116 136 128 (15%) (9%) 485 552 (12%)
Information processing and communications 376 307 325 22% 16% 1,325 1,140 16%
Marketing and business development 495 477 408 4% 21% 1,679 1,411 19%
Professional services 269 217 214 24% 26% 836 677 23%
Other 269 197 237 37% 14% 915 745 23%
--------- -------- -------- -------- -------
Total non-interest expenses 3,023 2,708 3,780 12% (20%) 14,281 11,744 22%
--------- -------- -------- -------- -------
Gain on sale of businesses 0 685 0 * -- 0 685 *
--------- -------- -------- -------- -------
Income before income taxes and cumulative
effect of a change in accounting 2,635 1,946 1,563 35% 69% 7,728 5,385 44%
Income tax expense 1,002 722 593 39% 69% 2,937 1,992 47%
--------- -------- -------- -------- -------
Income before cumulative effect of a
change in accounting 1,633 1,224 970 33% 68% 4,791 3,393 41%
Cumulative effect of a change in accounting (1) 0 0 0 -- -- 0 (117) *
--------- -------- -------- -------- -------
Net income $ 1,633 $ 1,224 $ 970 33% 68% $ 4,791 $ 3,276 46%
========= ======== ======== ======== =======
Preferred stock dividend requirements $ 11 $ 12 $ 11 (8%) -- $ 44 $ 55 (20%)
========= ======== ======== ======== =======
Earnings applicable to common shares $ 1,622 $ 1,212 $ 959 34% 69% $ 4,747 $ 3,221 47%
========= ======== ======== ======== =======
Operating results(2) $ 1,633 $ 879 $ 970 86% 68% $ 4,791 $ 3,048 57%
========= ======== ======== ======== =======
Compensation and benefits as a %
of net revenues 23% 31% 43% 38% 40%
</TABLE>
________________________________________________
(1) Represents the effects of an accounting change adopted in the fourth
quarter of fiscal 1998 (effective December 1, 1997) with respect to the
accounting for offering costs paid by investment advisors of closed end
funds where such costs are not specifically reimbursed through separate
advisory contracts.
(2) Excludes the effects of the net gain on sale of businesses and the
cumulative effect of a change in accounting.
F-3
<PAGE>
MORGAN STANLEY DEAN WITTER & CO.
Securities and Asset Management Income Statement Information
(unaudited, dollars in millions)
<TABLE>
<CAPTION>
Quarter Ended Percentage Change From: Twelve Months Ended
--------------------------------- ----------------------- ---------------------
Nov 30, Nov 30, Aug 31, Nov 30, Aug 31, Nov 30, Nov 30, Percentage
1999 1998 1999 1998 1999 1999 1998 Change
----------- ---------- -------- ------------ ---------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investment banking $ 1,338 $ 733 $ 1,207 83% 11% $ 4,523 $ 3,340 35%
Principal transactions:
Trading 1,195 796 1,178 50% 1% 5,982 3,283 82%
Investments 232 90 78 158% 197% 725 89 715%
Commissions 786 579 709 36% 11% 2,921 2,323 26%
Asset management,
distribution
and administration fees 830 726 825 14% 1% 3,170 2,889 10%
Interest and dividends 3,119 3,410 4,415 (9%) (29%) 13,625 13,707 (1%)
Other 41 41 39 -- 5% 166 191 (13%)
----------- ---------- -------- --------- ----------
Total revenues 7,541 6,375 8,451 18% (11%) 31,112 25,822 20%
Interest expense 2,846 3,219 4,043 (12%) (30%) 12,625 12,520 1%
----------- ---------- -------- --------- ----------
Net revenues 4,695 3,156 4,408 49% 7% 18,487 13,302 39%
----------- ---------- -------- --------- ----------
Compensation and benefits 1,169 1,096 2,170 7% (46%) 7,873 6,087 29%
Occupancy and equipment 164 136 150 21% 9% 589 516 14%
Brokerage, clearing and
exchange fees 116 136 128 (15%) (9%) 485 552 (12%)
Information processing and
communications 248 189 202 31% 23% 848 678 25%
Marketing and business
development 167 162 155 3% 8% 638 539 18%
Professional services 230 192 184 20% 25% 715 580 23%
Other 204 143 189 43% 8% 708 538 32%
----------- ---------- -------- --------- ----------
Total non-interest
expenses 2,298 2,054 3,178 12% (28%) 11,856 9,490 25%
----------- ---------- -------- --------- ----------
Gain on sale of businesses 0 323 0 * -- 0 323 *
----------- ---------- -------- --------- ----------
Income before income taxes
and cumulative
effect of a change
in accounting 2,397 1,425 1,230 68% 95% 6,631 4,135 60%
Income tax expense 889 463 462 92% 92% 2,502 1,463 71%
----------- ---------- -------- --------- ----------
Income before cumulative
effect of a
change in accounting 1,508 962 768 57% 96% 4,129 2,672 55%
Cumulative effect of a
change in accounting (1) 0 0 0 -- -- 0 (117) *
----------- ---------- -------- --------- ----------
Net income $ 1,508 $ 962 $ 768 57% 96% $ 4,129 $ 2,555 62%
=========== ========== ======== ========= ==========
Operating results as (2) $ 1 ,508 $ 780 $ 768 93% 96% $ 4,129 $ 2,490 66%
=========== ========== ======== ========= ==========
Compensation and benefits
as a % of net revenues 25% 35% 49% 43% 46%
Non-compensation expenses
as a % of net revenues 24% 30% 23% 22% 26%
Profit margin (3) 32% 30% 17% 22% 19%
Operating profit margin (4) 32% 25% 17% 22% 19%
</TABLE>
- ----------------------------------------------------
(1) Represents the effects of an accounting change adopted in the fourth
quarter of fiscal 1998 (effective December 1, 1997) with respect to the
accounting for offering costs paid by investment advisors of closed end
funds where such costs are not specifically reimbursed through separate
advisory contracts.
(2) Excludes the effects of the net gain on sale of businesses and the
cumulative effect of a change in accounting.
(3) Net income as a % of net revenues.
(4) Operating results as a % of net revenues.
F-4
<PAGE>
MORGAN STANLEY DEAN WITTER & CO.
Credit Services Income Statement Information
(unaudited, dollars in millions)
<TABLE>
<CAPTION>
Percentage
Quarter Ended Change From: Twelve Months Ended
------------------------------- --------------------- -------------------
Nov 30, Nov 30, Aug 31, Nov 30, Aug 31, Nov 30, Nov 30, Percentage
1999 1998 1999 1998 1999 1999 1998 Change
------ ------- -------- -------- -------- ------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Fees:
Merchant and cardmember $ 402 $ 377 $ 392 7% 3% $ 1,492 $ 1,647 (9%)
Servicing 318 270 313 18% 2% 1,194 928 29%
Other 0 1 0 * -- 0 5 *
------ ------- -------- ------- --------
Total non-interest revenues 720 648 705 11% 2% 2,686 2,580 4%
Interest revenue 622 597 546 4% 14% 2,246 2,729 (18%)
Interest expense 259 219 203 18% 28% 881 994 (11%)
------ ------- -------- ------- --------
Net interest income 363 378 343 (4%) 6% 1,365 1,735 (21%)
Provision for consumer loan losses 120 213 113 (44%) 6% 529 1,173 (55%)
------ ------- -------- ------- --------
Net credit income 243 165 230 47% 6% 836 562 49%
------ ------- -------- ------- --------
Net revenues 963 813 935 18% 3% 3,522 3,142 12%
------ ------- -------- ------- --------
Compensation and benefits 151 126 132 20% 14% 525 549 (4%)
Occupancy and equipment 14 16 16 (13%) (13%) 54 67 (19%)
Information processing and
communications 128 118 123 8% 4% 477 462 3%
Marketing and business
development 328 315 253 4% 30% 1,041 872 19%
Professional services 39 25 30 56% 30% 121 97 25%
Other 65 54 48 20% 35% 207 207 --
------ ------- -------- ------- --------
Total non-interest expenses 725 654 602 11% 20% 2,425 2,254 8%
------ ------- -------- ------- --------
Gain on sale of businesses 0 362 0 * -- 0 362 *
------ ------- -------- ------- --------
Income before income taxes 238 521 333 (54%) (29%) 1,097 1,250 (12%)
Income tax expense 113 259 131 (56%) (14%) 435 529 (18%)
------ ------- -------- ------- --------
Net income $ 125 $ 262 $ 202 (52%) (38%) $ 662 $ 721 (8%)
====== ======= ======= ======= ========
Operating results (1) $ 125 $ 99 $ 202 26% (38%) $ 662 $ 558 19%
====== ======= ======= ======= ========
Compensation and benefits
as a % of net revenues 16% 15% 14% 15% 17%
Non-compensation expenses
as a % of net revenues 60% 65% 50% 54% 54%
Profit margin (2) 13% 32% 22% 19% 23%
Operating profit margin (3) 13% 12% 22% 19% 18%
</TABLE>
______________________________________
(1) Excludes the effects of the net gain on sale of businesses.
(2) Net income as a % of net revenues.
(3) Operating results as a % of net revenues.
F-5
<PAGE>
MORGAN STANLEY DEAN WITTER & CO.
Credit Services Income Statement Information
(unaudited, dollars in millions)
(Managed loan basis)
<TABLE>
<CAPTION>
Percentage
Quarter Ended Change From: Twelve Months Ended
---------------------------- -------------------- ----------------------
Nov 30, Nov 30, Aug 31, Nov 30, Aug 31, Nov 30, Nov 30, Percentage
1999 1998 1999 1998 1999 1999 1998 Change
--------- ------- -------- --------- -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Fees:
Merchant and cardmember $ 536 $ 525 $ 541 2% (1%) $ 2,044 $ 2,152 (5%)
Servicing 0 0 0 -- -- 0 0 --
Other 0 1 0 * -- 0 5 *
--------- ------- -------- ---------- ----------
Total non-interest revenues 536 526 541 2% (1%) 2,044 2,157 (5%)
Interest revenue 1,288 1,284 1,250 -- 3% 4,940 5,326 (7%)
Interest expense 511 475 466 8% 10% 1,877 2,003 (6%)
--------- ------- -------- ---------- ----------
Net interest income 777 809 784 (4%) (1%) 3,063 3,323 (8%)
Provision for consumer loan losses 350 522 390 (33%) (10%) 1,585 2,338 (32%)
--------- ------- -------- ---------- ----------
Net credit income 427 287 394 49% 8% 1,478 985 50%
--------- ------- -------- ---------- ----------
Net revenues 963 813 935 18% 3% 3,522 3,142 12%
--------- ------- -------- ---------- ----------
Compensation and benefits 151 126 132 20% 14% 525 549 (4%)
Occupancy and equipment 14 16 16 (13%) (13%) 54 67 (19%)
Information processing and communications 128 118 123 8% 4% 477 462 3%
Marketing and business development 328 315 253 4% 30% 1,041 872 19%
Professional services 39 25 30 56% 30% 121 97 25%
Other 65 54 48 20% 35% 207 207 --
--------- ------- -------- ---------- ----------
Total non-interest expenses 725 654 602 11% 20% 2,425 2,254 8%
--------- ------- -------- ---------- ----------
Gain on sale of businesses 0 362 0 * -- 0 362 *
--------- ------- -------- ---------- ----------
Income before income taxes 238 521 333 (54%) (29%) 1,097 1,250 (12%)
Income tax expense 113 259 131 (56%) (14%) 435 529 (18%)
--------- ------- -------- ---------- ----------
Net income $ 125 $ 262 $ 202 (52%) (38%) $ 662 $ 721 (8%)
========= ======= ======== ========== ==========
Operating results (1) $ 125 $ 99 $ 202 26% (38%) $ 662 $ 558 19%
========= ======= ======== ========== ==========
Compensation and benefits as a % of net revenues 16% 15% 14% 15% 17%
Non-compensation expenses as a % of net revenues 60% 65% 50% 54% 54%
Profit margin (2) 13% 32% 22% 19% 23%
Operating profit margin (3) 13% 12% 22% 19% 18%
</TABLE>
_______________________________________________
(1) Excludes the effects of the net gain on sale of businesses.
(2) Net income as a % of net revenues.
(3) Operating results as a % of net revenues.
F-6
<PAGE>
MORGAN STANLEY DEAN WITTER & CO.
Financial Information and Statistical Data
(unaudited)
<TABLE>
<CAPTION>
Quarter Ended Percentage Change From:
--------------------------------------------- -------------------------
Nov 30, 1999 Nov 30, 1998 Aug 31, 1999 Nov 30, 1998 Aug 31, 1999
-------------- ------------- -------------- ------------ -------------
MSDW
<S> <C> <C> <C> <C> <C>
Period end common shares outstanding 552,315,049 565,670,808 559,244,249 (2%) (1%)
Book value per common share $ 29.69 $ 23.88 $ 26.53 24% 12%
Shareholders' equity (millions) (1) $ 17,414 $ 14,519 $ 15,845 20% 10%
Total capital (millions) (2) $ 39,699 $ 37,922 $ 38,740 5% 2%
SECURITIES ($ billions)
Private Client Group
Global financial advisors 12,674 11,238 12,309 13% 3%
Client assets $ 583 $ 443 $ 536 32% 9%
Institutional Securities (3)
Mergers and acquisitions announced transactions (4)
MSDW global market volume $ 1,073.4 $ 622.3 $ 588.2
Rank 2 3 2
Worldwide equity and related issues (4)
MSDW global market volume $ 53.4 $ 32.6 $ 34.2
Rank 2 3 2
ASSET MANAGEMENT ($ billions)
Assets under management and administration
Products offered primarily to individuals
Mutual funds
Equity $ 94 $ 75 $ 87 25% 8%
Fixed income 53 57 55 (7%) (4%)
Money markets 47 37 44 27% 7%
------------ ------------- --------------
Total mutual funds 194 169 186 15% 4%
ICS Assets 23 19 23 21% --
Other 41 31 38 32% 8%
------------ ------------- --------------
Sub-total Individual 258 219 247 18% 4%
------------ ------------- --------------
Products offered primarily to institutional clients
Mutual funds 39 33 36 18% 8%
Separate accounts, pooled vehicle and other 128 124 132 3% (3%)
arrangements
------------ ------------- --------------
Sub-total Institutional 167 157 168 6% (1%)
------------ ------------- --------------
Total assets under management and administration $ 425 $ 376 $ 415 13% 2%
============ ============= ==============
</TABLE>
_______________________________________________________________
(1) Includes preferred and common equity and preferred securities issued by
subsidiaries.
(2) Includes preferred and common equity, preferred securities issued by
subsidiaries, capital units and non-current portion of long-term debt.
(3) Source: Securities Data Corp.
(4) Information is year to date and stated on a calendar year basis.
F-7
<PAGE>
MORGAN STANLEY DEAN WITTER & CO.
Financial Information and Statistical Data
(unaudited, dollars in millions)
<TABLE>
<CAPTION>
Percentage Twelve
Quarter Ended Change From: Months Ended
---------------------------- ----------------- ------------------
Nov 30, Nov 30, Aug 31, Nov 30, Aug 31, Nov 30, Nov 30, Percentage
1999 1998 1999 1998 1999 1999 1998 Change
------- ------- -------- ------- -------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CREDIT SERVICES
Owned consumer loans
Period end $ 20,998 $ 15,996 $ 16,557 31% 27% $ 20,998 $ 15,996 31%
Average $ 18,341 $ 16,822 $ 15,311 9% 20% $ 16,177 $ 18,557 (13%)
Managed consumer loans (1)
Period end $ 37,975 $ 32,502 $ 34,381 17% 10% $ 37,975 $ 32,502 17%
Average $ 35,608 $ 33,126 $ 33,379 7% 7% $ 33,534 $ 34,619 (3%)
Interest yield 14.15% 14.72% 14.30% (0.57 pp) (0.15 pp) 14.23% 14.86% (0.63 pp)
Interest spread 8.22% 8.72% 8.61% (0.50 pp) (0.39 pp) 8.49% 8.71% (0.22 pp)
Net charge-off rate 4.63% 6.94% 5.29% (2.31 pp) (0.66 pp) 5.42% 6.90% (1.48 pp)
Delinquency rate (over 30 days) 6.32% 6.53% 6.34% (0.21 pp) (0.02 pp) 6.32% 6.53% (0.21 pp)
Discover Financial Services transaction
volume (in billions) $ 70.6 $ 58.0 22%
General purpose credit card accounts
(in millions) 38.5 38.1 1%
General purpose credit card active
accounts (in millions) 22.1 21.5 3%
General purpose average receivables
per average active account (actual $) $ 1,581 $ 1,486 6%
Discover/NOVUS Network increase in merchant
locations (in thousands) 615 394 56%
</TABLE>
_______________________________________________________
(1) Includes owned and securitized consumer loans.
F-8
<PAGE>
Exhibit 99.1
Contact: Investor Relations Media Relations
John Beneke Jeanmarie McFadden
212-762-7282 212-762-7842
MORGAN STANLEY DEAN WITTER ANNOUNCES
RECORD QUARTERLY AND FULL YEAR NET INCOME;
2 FOR 1 STOCK SPLIT; DIVIDEND INCREASE OF 67%
1999 EARNINGS PER SHARE UP 66%
NEW YORK, December 20, 1999 -- Morgan Stanley Dean Witter & Co. (NYSE:MWD)
today reported record net income of $1,633 million for the quarter ended
November 30, 1999 -- an 86 percent increase from $879 million in last year's
fourth quarter./1/ Diluted earnings per share were $2.84 -- up 91 percent from
$1.49 a year ago.
Net income for the full fiscal year was a record $4,791 million, 57 percent
higher than $3,048 million a year ago. Diluted earnings per share were $8.20,
up 66 percent from last year's $4.95.
Fourth quarter net revenues increased to $5.7 billion -- 43 percent higher than
last year's fourth quarter. The annualized return on average common equity for
the fourth quarter was 43.1 percent. Full year net revenues rose 34 percent to a
record $22.0 billion and the return on average common equity was 32.6 percent.
Philip J. Purcell, Chairman, and John J. Mack, President, said in a joint
statement, "It was a great quarter and a great year. Our firm has created a
powerful engine for growth. In institutional securities, we more than doubled
net income in the fourth quarter, set new records across the board for the year,
and continued to build market share. Our Private
- --------------------
/1/ All amounts for the three and twelve-month periods ended November 30, 1998
exclude a net after-tax gain of $345 million from the sales of businesses and a
$117 million after-tax charge resulting from an accounting change. See Page F-1
of Financial Summary, Notes 1 and 2.
1
<PAGE>
Client Group is growing in the U.S. and expanding overseas, and this quarter we
launched ichoice/sm/, an innovative client-centered service platform for
individual investors. We've increased assets under management. The resurgence in
our credit card business also continued in the fourth quarter, with significant
growth in transaction volume, receivables and new accounts. We look forward to
further growth in the new millennium."
The Company also announced that its Board of Directors took the following
actions today:
. Declared a 2 for 1 common stock split effected in the form of a 100 percent
stock dividend, payable January 26, 2000 to common shareholders of record as
of January 12, 2000.
. Declared a quarterly cash dividend of $.40 per common share on a pre-split
basis -- a 67 percent increase from $.24 per common share in the previous
quarter. The dividend is payable January 20, 2000 to common shareholders of
record as of January 12, 2000.
. Authorized the repurchase, subject to market conditions and certain other
factors, of an additional $1 billion of the Company's common stock for
capital management purposes.
FOURTH QUARTER
SECURITIES
Securities net income increased to $1,390 million, up 103 percent from a year
ago./2/ The increase was driven by a more than doubling in institutional
securities earnings, and strong quarterly results for both the private client
group and private equity.
. Institutional securities fourth quarter results included record investment
banking revenues and a strong quarter for equities. The Company's European
and Asian businesses made significant contributions to the quarter's results.
. Investment banking's outstanding performance was driven by record revenues
from both its mergers and acquisitions and equity underwriting businesses.
The division benefited from a high volume of merger activity across a number
of industries as well as a high level of equity issuance, particularly in the
technology, media and telecommunications sectors.
- --------------------
/2/ Securities includes the results of private equity which were previously
reported in Asset Management.
2
<PAGE>
. Institutional sales and trading also had an excellent quarter. Equities
achieved record commission revenues driven by the highest trading volumes of
the year in U.S. equity markets. Fixed income achieved improved results
despite persisting concerns over the possibility of higher inflation and a
decrease in customer activity early in the quarter.
. The private equity group recognized near-record investment gains of $171
million compared to $54 million a year ago. This year's fourth quarter
results stem largely from gains on an investment in Equant, a global data
communications company, and on certain investments in private equity's
venture capital portfolio.
. The private client group achieved excellent quarterly revenues, driven
primarily by high volumes in listed and over-the-counter equities markets,
strong sales of new issues, and higher revenues from the distribution of
asset management products.
. The number of global financial advisors in the Company's private client group
rose by 365 in the quarter to a record 12,674. Client assets increased by $47
billion to stand at a record $583 billion at fiscal year end.
. In late October, the Company launched ichoice/sm/, its innovative client-
centered service platform that gives investors the option of trading online,
trading through a full-service account, or paying a single fee based on
account assets. In conjunction with the ichoice/sm/ initiative, Discover
Brokerage Direct was renamed Morgan Stanley Dean Witter Online.
ASSET MANAGEMENT
Asset Management posted quarterly net income of $118 million, a 24 percent
increase from a year ago (excluding fourth quarter 1998's net gain from the sale
of its global custody business). The increase reflects the continued growth in
assets under management and administration.
. Assets under management and administration increased by $10 billion during
the fourth quarter to stand at $425 billion at fiscal year end.
. Retail assets increased $11 billion during the quarter and $39 billion during
the year to a total of $258 billion. Institutional assets decreased $1
billion during the quarter but were up $10 billion from a year ago to stand
at $167 billion.
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. As of November 30, 1999, Morningstar gave overall ratings of four or five to
51 funds offered by the Company (out of a total of 134 of the Company's funds
that received ratings). The Company now has the second highest number of
funds receiving Morningstar's two highest ratings.
CREDIT SERVICES
Credit Services net income increased by 26 percent to $125 million, compared to
$99 million (excluding the net gain on sales of its interest in SPS and certain
BRAVO receivables) in last year's fourth quarter. The increase in net income
was driven by the continued improvement in credit quality and record quarterly
transaction volume.
. The consumer loan net charge-off rate fell to 4.63 percent from 6.94 percent
a year ago. The over-30-day delinquency rate declined to 6.32 percent
compared to 6.53 percent a year ago.
. Transaction volume surged 37 percent to a record $20.5 billion, driven by
increased balance transfers and higher sales volume.
. Total managed consumer loans rose to a record $38.0 billion -- $5.5 billion
higher than a year ago.
. The Discover/NOVUS Network enrolled 233,000 new merchant locations during
the quarter -- a 140 percent increase over the fourth quarter enrollment a
year ago.
FULL YEAR
SECURITIES
The Company's securities business posted record net income of $3,674 million in
fiscal 1999, a 64 percent increase from fiscal 1998. Net revenues were up 42
percent to $16.3 billion, reflecting record performances in institutional
securities, the private client group and private equity.
In institutional securities, the Company achieved record results in investment
banking, equities, fixed income and commodities. For the first eleven months of
calendar year 1999, the Company continued to hold a leadership position in
announced global merger and acquisition transactions, with our transaction
dollar volume surging 72 percent to above the $1 trillion level. In addition,
the Company improved its market share and ranks second in both
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worldwide equity and equity related underwriting and worldwide investment grade
debt underwriting./3/ In equity research, the Company ranked second on a
weighted average basis in the 1999 Institutional Investor Research All-America
Poll. The Company had an outstanding year in Europe, driven by high levels of
mergers and acquisition activity and related financings as well as rapid
development of a corporate debt market.
Private equity recognized full-year investment gains of $433 million, up 27
percent from $340 million in 1998. This year's record gains were largely the
result of positions in Equant and Allegiance Telecom as well as the success of
venture capital activities.
The private client group's number of global financial advisors increased by a
record 1,436 to total 12,674. It also achieved a record net increase of 592,000
domestic client accounts to total approximately 4.5 million. Client assets
increased $140 billion to stand at $583 billion at fiscal year end.
ASSET MANAGEMENT
The Company's asset management business reported net income of $455 million, up
83 percent from last year (excluding the net gain on last year's sale of its
global custody business). For the year, the Company continued to grow its
assets under management and administration. At fiscal year end, these assets
stood at $425 billion, an increase of $49 billion from a year ago.
CREDIT SERVICES
Credit Services net income was a record $662 million, a 19 percent increase from
fiscal 1998 (excluding the net gain from last year's sales of businesses). Net
revenues rose $380 million, or 12 percent, to more than $3.5 billion. The
consumer loan net charge-off rate fell to 5.42 percent for the year from 6.90
percent a year ago. Managed loans rose 17 percent to a record $38.0 billion and
transaction volume for the year was a record of $70.6 billion. Discover enrolled
a record 615,000 merchant locations during the year and added more than 5.4
million new card accounts, the largest yearly increase since 1987. During the
year, Discover launched its new premium credit card, Discover Platinum, and
expanded
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/3/ Source: Securities Data Corp. - January 1 to November 30, 1999.
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internationally with the introduction of its Morgan Stanley Dean Witter credit
card in the United Kingdom.
Total capital at November 30, 1999 was $39.7 billion, including $17.4 billion of
common and preferred shareholders' equity and preferred securities issued by
subsidiaries. Book value per common share was $29.69, based on period end
shares outstanding of 552,315,049.
The Company repurchased approximately 25 million shares of its common stock
during the 1999 fiscal year.
Morgan Stanley Dean Witter & Co. is a global financial services firm and a
market leader in securities, asset management and credit services. The Company
has offices in New York, London, Tokyo, Hong Kong, and other principal financial
centers around the world and has 475 securities branch offices throughout the
United States.
Access this press release on-line @www.msdw.com
# # #
(See Attached Schedules)
This release may contain forward-looking statements. These statements, which
reflect management's beliefs and expectations, are subject to risks and
uncertainties that may cause actual results to differ materially. For a
discussion of the risks and uncertainties that may affect the Company's future
results, please see "Management's Discussion and Analysis of Financial Condition
and Results of Operations" in the Company's 1998 Annual Report to Shareholders
and the Company's Quarterly Reports on Form 10-Q for fiscal 1999.
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