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Previous: SUNAMERICA SERIES TRUST, 497, 2000-09-21 |
Next: MORGAN STANLEY DEAN WITTER & CO, 8-K, EX-99.1, 2000-09-21 |
<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): September 21, 2000
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 September 21, 2000, Morgan Stanley Dean Witter & Co. (the "Registrant")
released financial information with respect to the quarter ended August 31,
2000. 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 September 21, 2000
containing financial information for the third quarter
ended August 31, 2000.
<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: September 21, 2000
<PAGE>
MORGAN STANLEY DEAN WITTER & CO.
Financial Summary
(unaudited, dollars in millions)
<TABLE>
<CAPTION>
Percentage
Quarter Ended Change From: Nine Months Ended
------------------------------------- --------------- -----------------------
Aug 31, Aug 31, May 31, Aug 31, May 31, Aug 31, Aug 31, Percentage
2000 1999 2000 1999 2000 2000 1999 Change
-------- --------- -------- ------ ------- ------- ------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net revenues
Securities $ 4,602 $ 3,849 $ 5,450 20% (16%) $ 15,974 $ 12,187 31%
Asset Management 639 545 629 17% 2% 1,868 1,567 19%
Credit Services 1,053 935 989 13% 6% 2,931 2,559 15%
-------- --------- --------- ---------- --------
Consolidated net revenues $ 6,294 $ 5,329 $ 7,068 18% (11%) $ 20,773 $ 16,313 27%
======== ========= ========= =========== ========
Net income
Securities $ 825 $ 645 $ 1,090 28% (24%) $ 3,159 $ 2,286 38%
Asset Management 199 123 156 62% 28% 513 335 53%
Credit Services 222 202 212 10% 5% 576 537 7%
-------- --------- --------- ----------- --------
Consolidated net income $ 1,246 $ 970 $ 1,458 28% (15%) $ 4,248 $ 3,158 35%
======== ========= ========= =========== ========
Preferred stock dividend
requirements $ 9 $ 11 $ 9 (18%) -- $ 27 $ 33 (18%)
======== ========= ========= =========== ========
Earnings applicable to
common shares $ 1,237 $ 959 $ 1,449 29% (15%) $ 4,221 $ 3,125 35%
======== ========= ========= =========== ========
Earnings per common share
Basic $ 1.14 $ 0.87 $ 1.32 31% (14%) $ 3.87 $ 2.82 37%
Diluted $ 1.09 $ 0.83 $ 1.26 31% (13%) $ 3.70 $ 2.68 38%
Average common shares outstanding
Basic 1,088,218,669 1,100,113,462 1,098,245,490 1,090,967,941 1,106,725,932
Diluted 1,137,304,026 1,161,401,646 1,145,401,309 1,141,272,402 1,169,434,812
Period end common shares
outstanding 1,121,597,725 1,118,488,498 1,124,979,347 1,121,597,725 1,118,488,498
Return on common equity 27.6% 25.9% 33.0% 32.2% 28.9%
</TABLE>
----------------------------------------------------
Note: Certain reclassifications have been made to prior period amounts to
conform to the current presentation.
F - 1
<PAGE>
MORGAN STANLEY DEAN WITTER & CO.
Consolidated Income Statement Information
(unaudited, dollars in millions)
<TABLE>
<CAPTION>
Percentage
Quarter Ended Change From: Nine Months Ended
------------------------------ ----------------- -------------------
Aug 31, Aug 31, May 31, Aug 31, May 31, Aug 31, Aug 31, Percentage
2000 1999 2000 1999 2000 2000 1999 Change
--------- --------- -------- -------- ------- ------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investment banking $ 1,172 $ 1,207 $ 1,370 (3%) (14%) $ 3,877 $ 3,185 22%
Principal transactions:
Trading 1,630 1,143 2,501 43% (35%) 6,408 4,692 37%
Investments 68 78 (236) (13%) 129% 263 493 (47%)
Commissions 831 681 972 22% (15%) 2,787 2,033 37%
Fees:
Asset management, distribution and
administration 1,092 857 1,075 27% 2% 3,133 2,450 28%
Merchant and cardmember 447 392 447 14% -- 1,337 1,090 23%
Servicing 424 313 349 35% 21% 1,060 876 21%
Interest and dividends 5,897 3,899 5,123 51% 15% 15,769 11,070 42%
Other 150 56 91 168% 65% 335 174 93%
---------- --------- ---------- ---------- ----------
Total revenues 11,711 8,626 11,692 36% -- 34,969 26,063 34%
Interest expense 5,242 3,184 4,420 65% 19% 13,594 9,341 46%
Provision for consumer loan losses 175 113 204 55% (14%) 602 409 47%
---------- --------- ---------- ---------- ----------
Net revenues 6,294 5,329 7,068 18% (11%) 20,773 16,313 27%
---------- --------- ---------- ---------- ----------
Compensation and benefits 2,656 2,302 3,097 15% (14%) 9,161 7,078 29%
Occupancy and equipment 202 166 174 22% 16% 551 465 18%
Brokerage, clearing and exchange fees 132 128 130 3% 2% 383 369 4%
Information processing and communications 392 325 381 21% 3% 1,119 949 18%
Marketing and business development 507 408 502 24% 1% 1,480 1,184 25%
Professional services 275 214 217 29% 27% 675 567 19%
Other 255 223 272 14% (6%) 802 608 32%
---------- --------- ---------- ---------- ----------
Total non-interest expenses 4,419 3,766 4,773 17% (7%) 14,171 11,220 26%
---------- --------- ---------- ---------- ----------
Gain on sale of business 35 0 0 * * 35 0 *
---------- --------- ---------- ---------- ----------
Income before income taxes 1,910 1,563 2,295 22% (17%) 6,637 5,093 30%
Income tax expense 664 593 837 12% (21%) 2,389 1,935 23%
---------- --------- ---------- ---------- ----------
Net income $ 1,246 $ 970 $ 1,458 28% (15%) $ 4,248 $ 3,158 35%
========== ========= ========== ========== ==========
Preferred stock dividend requirements $ 9 $ 11 $ 9 (18%) -- $ 27 $ 33 (18%)
========== ========= ========== ========== ==========
Earnings applicable to common shares $ 1,237 $ 959 $ 1,449 29% (15%) $ 4,221 $ 3,125 35%
========== ========= ========== ========== ==========
Compensation and benefits as a % of net revenues 42% 43% 44% 44% 43%
</TABLE>
--------------------------------------------------
Note: Certain reclassifications have been made to prior period amounts to
conform to the current presentation.
F - 2
<PAGE>
MORGAN STANLEY DEAN WITTER & CO.
Securities Income Statement Information
(unaudited, dollars in millions)
<TABLE>
<CAPTION>
Percentage
Quarter Ended Change From: Nine Months Ended
------------------------------ ----------------- -------------------
Aug 31, Aug 31, May 31, Aug 31, May 31, Aug 31, Aug 31, Percentage
2000 1999 2000 1999 2000 2000 1999 Change
--------- --------- -------- -------- ------- ------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investment banking $ 1,145 $ 1,187 $ 1,337 (4%) (14%) $ 3,773 $ 3,115 21%
Principal transactions:
Trading 1,630 1,143 2,501 43% (35%) 6,408 4,692 37%
Investments 55 79 (242) (30%) 123% 236 485 (51%)
Commissions 828 679 968 22% (14%) 2,775 2,031 37%
Asset management, distribution and
administration fees 512 341 505 50% 1% 1,453 1,000 45%
Interest and dividends 5,206 3,341 4,354 56% 20% 13,563 9,400 44%
Other 150 56 91 168% 65% 335 174 93%
--------- ---------- --------- --------- ---------
Total revenues 9,526 6,826 9,514 40% -- 28,543 20,897 37%
Interest expense 4,924 2,977 4,064 65% 21% 12,569 8,710 44%
--------- ---------- --------- --------- ---------
Net revenues 4,602 3,849 5,450 20% (16%) 15,974 12,187 31%
--------- ---------- --------- --------- ---------
Compensation and benefits 2,305 2,005 2,764 15% (17%) 8,136 6,225 31%
Occupancy and equipment 163 126 137 29% 19% 440 354 24%
Brokerage, clearing and exchange fees 109 98 110 11% (1%) 321 279 15%
Information processing and communications 245 180 244 36% -- 703 536 31%
Marketing and business development 176 124 184 42% (4%) 517 374 38%
Professional services 223 155 166 44% 34% 525 396 33%
Other 147 140 158 5% (7%) 479 363 32%
--------- ---------- --------- --------- ---------
Total non-interest expenses 3,368 2,828 3,763 19% (10%) 11,121 8,527 30%
--------- ---------- --------- --------- ---------
Income before income taxes 1,234 1,021 1,687 21% (27%) 4,853 3,660 33%
Income tax expense 409 376 597 9% (31%) 1,694 1,374 23%
--------- ---------- --------- --------- ---------
Net income $ 825 $ 645 $ 1,090 28% (24%) $ 3,159 $ 2,286 38%
========= ========== ========= ========= =========
Compensation and benefits as a % of net revenues 50% 52% 51% 51% 51%
Non-compensation expenses as a % of net revenues 23% 21% 18% 19% 19%
Profit margin (1) 18% 17% 20% 20% 19%
</TABLE>
----------------------------------------------
(1) Net income as a % of net revenues.
F - 3
<PAGE>
MORGAN STANLEY DEAN WITTER & CO.
Asset Management Income Statement Information
(unaudited, dollars in millions)
<TABLE>
<CAPTION>
Percentage
Quarter Ended Change From: Nine Months Ended
------------------------------ ----------------- -------------------
Aug 31, Aug 31, May 31, Aug 31, May 31, Aug 31, Aug 31, Percentage
2000 1999 2000 1999 2000 2000 1999 Change
--------- --------- -------- -------- ------- ------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investment banking $ 27 $ 20 $ 33 35% (18%) $ 104 $ 70 49%
Principal transactions:
Investments 13 (1) 6 * 117% 27 8 238%
Commissions 3 2 4 50% (25%) 12 2 *
Asset management, distribution and
administration fees 580 516 570 12% 2% 1,680 1,450 16%
Interest and dividends 18 12 19 50% (5%) 50 46 9%
------- -------- -------- --------- ---------
Total revenues 641 549 632 17% 1% 1,873 1,576 19%
Interest expense 2 4 3 (50%) (33%) 5 9 (44%)
------- -------- -------- --------- ---------
Net revenues 639 545 629 17% 2% 1,868 1,567 19%
------- -------- -------- --------- ---------
Compensation and benefits 187 165 198 13% (6%) 571 479 19%
Occupancy and equipment 23 24 22 (4%) 5% 66 71 (7%)
Brokerage, clearing and exchange fees 23 30 20 (23%) 15% 62 90 (31%)
Information processing and communications 19 22 19 (14%) -- 56 64 (13%)
Marketing and business development 38 31 38 23% -- 112 97 15%
Professional services 22 29 24 (24%) (8%) 67 89 (25%)
Other 33 35 45 (6%) (27%) 109 103 6%
------- -------- -------- --------- ---------
Total non-interest expenses 345 336 366 3% (6%) 1,043 993 5%
------- -------- -------- --------- ---------
Gain on sale of business 35 0 0 * * 35 0 *
------- -------- -------- --------- ---------
Income before income taxes 329 209 263 57% 25% 860 574 50%
Income tax expense 130 86 107 51% 21% 347 239 45%
------- -------- -------- --------- ---------
Net income $ 199 $ 123 $ 156 62% 28% $ 513 $ 335 53%
======= ======== ======== ========= =========
Compensation and benefits as a % of net revenues 29% 30% 31% 31% 31%
Non-compensation expenses as a % of net revenues 25% 31% 27% 25% 33%
Profit margin (1) 31% 23% 25% 27% 21%
</TABLE>
----------------------------------------------
(1) Net income 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: Nine Months Ended
---------------------------- ------------- -----------------
Aug 31, Aug 31, May 31, Aug 31, May 31, Aug 31, Aug 31, Percentage
2000 1999 2000 1999 2000 2000 1999 Change
------ ------ ------- ------ ------- ------ ------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Fees:
Merchant and cardmember $ 447 $ 392 $ 447 14% -- $ 1,337 $ 1,090 23%
Servicing 424 313 349 35% 21% 1,060 876 21%
--------- ---------- -------- --------- --------
Total non-interest revenues 871 705 796 24% 9% 2,397 1,966 22%
Interest revenue 673 546 750 23% (10%) 2,156 1,624 33%
Interest expense 316 203 353 56% (10%) 1,020 622 64%
--------- ---------- -------- --------- --------
Net interest income 357 343 397 4% (10%) 1,136 1,002 13%
Provision for consumer loan losses 175 113 204 55% (14%) 602 409 47%
--------- ---------- -------- --------- --------
Net credit income 182 230 193 (21%) (6%) 534 593 (10%)
--------- ---------- -------- --------- --------
Net revenues 1,053 935 989 13% 6% 2,931 2,559 15%
--------- ---------- -------- --------- --------
Compensation and benefits 164 132 135 24% 21% 454 374 21%
Occupancy and equipment 16 16 15 -- 7% 45 40 13%
Information processing and communications 128 123 118 4% 8% 360 349 3%
Marketing and business development 293 253 280 16% 5% 851 713 19%
Professional services 30 30 27 -- 11% 83 82 1%
Other 75 48 69 56% 9% 214 142 51%
--------- ---------- -------- --------- --------
Total non-interest expenses 706 602 644 17% 10% 2,007 1,700 18%
--------- ---------- -------- --------- --------
Income before income taxes 347 333 345 4% 1% 924 859 8%
Income tax expense 125 131 133 (5%) (6%) 348 322 8%
--------- ---------- -------- --------- --------
Net income $ 222 $ 202 $ 212 10% 5% $ 576 $ 537 7%
========= ========== ======== ========= ========
Compensation and benefits
as a % of net revenues 16% 14% 14% 15% 15%
Non-compensation expenses 53% 52%
as a % of net revenues 51% 50% 51% 20% 21%
Profit margin (1) 21% 22% 21%
</TABLE>
----------------------------------------------
(1) Net income 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 Nine Months
Quarter Ended Change From: Ended
-------------------------------------- -------------- --------------
Aug 31, Aug 31, May 31, Aug 31, May 31, Aug 31, Aug 31, Percentage
2000 1999 2000 1999 2000 2000 1999 Change
-------- -------- ---------- ----- ----- ------- ------ ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Fees:
Merchant and cardmember $ 634 $ 541 $ 591 17% 7% $ 1,810 $1,508 20%
Servicing 0 0 0 -- -- 0 0 --
---------- --------- --------- -------- -------
Total non-interest revenues 634 541 591 17% 7% 1,810 1,508 20%
Interest revenue 1,617 1,250 1,558 29% 4% 4,615 3,652 26%
Interest expense 728 466 688 56% 6% 2,062 1,366 51%
---------- --------- --------- -------- -------
Net interest income 889 784 870 13% 2% 2,553 2,286 12%
Provision for consumer loan losses 470 390 472 21% -- 1,432 1,235 16%
---------- --------- --------- -------- -------
Net credit income 419 394 398 6% 5% 1,121 1,051 7%
---------- --------- --------- -------- -------
Net revenues 1,053 935 989 13% 6% 2,931 2,559 15%
---------- --------- --------- -------- -------
Compensation and benefits 164 132 135 24% 21% 454 374 21%
Occupancy and equipment 16 16 15 -- 7% 45 40 13%
Information processing and communications 128 123 118 4% 8% 360 349 3%
Marketing and business development 293 253 280 16% 5% 851 713 19%
Professional services 30 30 27 -- 11% 83 82 1%
Other 75 48 69 56% 9% 214 142 51%
---------- --------- --------- -------- -------
Total non-interest expenses 706 602 644 17% 10% 2,007 1,700 18%
---------- --------- --------- -------- -------
Income before income taxes 347 333 345 4% 1% 924 859 8%
Income tax expense 125 131 133 (5%) (6%) 348 322 8%
---------- --------- --------- -------- -------
Net income $ 222 $ 202 $ 212 10% 5% $ 576 $ 537 7%
========== ========= ========= ======== =======
Compensation and benefits as a % of net revenues 16% 14% 14% 15% 15%
Non-compensation expenses as a % of net revenues 51% 50% 51% 53% 52%
Profit margin (1) 21% 22% 21% 20% 21%
</TABLE>
------------------------------------------------
(1) Net income 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:
---------------------------------------------- --------------------------
Aug 31, 2000 Aug 31, 1999 May 31, 2000 Aug 31, 1999 May 31, 2000
--------------- --------------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
MSDW
Total assets (millions) $ 404,000 $ 341,000 $ 418,000 18% (3%)
Period end common shares outstanding 1,121,597,725 1,118,488,498 1,124,979,347 -- --
Book value per common share $ 16.19 $ 13.26 $ 15.66 22% 3%
Shareholders' equity (millions) (1) $ 19,054 $ 15,845 $ 18,510 20% 3%
Total capital (millions) (2) $ 50,311 $ 38,740 $ 46,954 30% 7%
SECURITIES ($ billions)
Private Client Group
Global financial advisors 13,789 12,309 13,513 12% 2%
Total client assets $ 778 $ 536 $ 669 45% 16%
Fee-based client account assets (3) $ 155 $ 92 $ 139 68% 12%
Institutional Securities (4)
Mergers and acquisitions
announced transactions (5)
MSDW global market volume $ 926.2 $ 588.2 $ 671.0
Rank 1 2 1
Worldwide equity and related issues (5)
MSDW global market volume $ 43.9 $ 34.2 $ 26.5
Rank 2 2 2
ASSET MANAGEMENT ($ billions)
Assets under management or supervision
Products offered primarily to individuals
Mutual funds
Equity $ 122 $ 87 $ 106 40% 15%
Fixed income 49 55 49 (11%) --
Money markets 55 44 52 25% 6%
-------------- -------------- --------------
Total mutual funds 226 186 207 22% 9%
ICS Assets 34 23 28 48% 21%
Separate accounts, unit trust
and other arrangements 94 69 85 36% 11%
--------------- --------------- ---------------
Sub-total Individual 354 278 320 27% 11%
--------------- --------------- ---------------
Products offered primarily to institutional clients
Mutual funds 38 30 35 27% 9%
Separate accounts, pooled vehicle and other
arrangements 156 150 155 4% 1%
--------------- --------------- ---------------
Sub-total Institutional 194 180 190 8% 2%
--------------- --------------- ---------------
Total assets under management or supervision $ 548 $ 458 $ 510 20% 7%
=============== =============== ===============
</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) Represents the amount of assets in client accounts where the basis of
payment for services is a fee calculated on those assets.
(4) Source: Thomson Financial Securities Data.
(5) 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 Nine Months
Quarter Ended Change From: Ended
---------------------------------- ------------- ---------------
Aug 31, Aug 31, May 31, Aug 31, May 31, Aug 31, Aug 31, Percentage
2000 1999 2000 1999 2000 2000 1999 Change
------- -------- -------- ----- ------ ------ ------ ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CREDIT SERVICES
Owned consumer loans
Period end $ 19,817 $ 16,557 $ 22,506 20% (12%) $ 19,817 $ 16,557 20%
Average $ 20,091 $ 15,311 $ 23,459 31% (14%) $ 22,244 $ 15,458 44%
Managed consumer loans (1)
Period end $ 44,841 $ 34,381 $ 43,701 30% 3% $ 44,841 $ 34,381 30%
Average $ 44,345 $ 33,379 $ 42,961 33% 3% $ 42,783 $ 32,845 30%
Interest yield 14.05% 14.30% 13.69% (25 bp) 36 bp 13.70% 14.25% (55 bp)
Interest spread 7.35% 8.61% 7.31% (126 bp) 4 bp 7.23% 8.61% (138 bp)
Net charge-off rate 4.18% 5.29% 4.21% (111 bp) (3 bp) 4.34% 5.70% (136 bp)
Delinquency rate (over 30 days) 5.47% 6.34% 5.11% (87 bp) 36 bp 5.47% 6.34% (87 bp)
Credit Card
Transaction volume (billions) $ 21.9 $ 18.3 $ 21.9 20% -- $ 67.3 $ 50.1 34%
Accounts (millions) 41.4 37.4 40.4 11% 2% 41.4 37.4 11%
Active accounts (millions) 23.1 21.3 23.1 9% -- 23.1 21.3 9%
Average receivables per average
active account (actual $) $ 1,924 $ 1,579 $ 1,868 22% 3% $ 1,870 $ 1,556 20%
Discover Business Services'
increase in merchant locations
(thousands) 134 130 174 3% (23%) 407 382 7%
</TABLE>
------------------------------------------------------------------
(1) Includes owned and securitized consumer loans.
F - 8
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