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Exhibit 99.1
Contact: Investor Relations Media Relations
John Beneke Raymond O'Rourke
212-762-7282 212-761-4262
MORGAN STANLEY DEAN WITTER ANNOUNCES
SECOND QUARTER NET INCOME OF $1.5 BILLION;
NET REVENUES OF $7.1 BILLION;
EARNINGS PER SHARE UP 30%
ADDITIONAL $1.5 BILLION STOCK BUYBACK AUTHORIZED
NEW YORK, June 22, 2000 -- Morgan Stanley Dean Witter & Co. (NYSE: MWD) today
reported net income of $1,458 million for the quarter ended May 31, 2000 -- a 27
percent increase from $1,151 million in last year's second quarter. Diluted
earnings per share were $1.26 -- up 30 percent from $0.97 a year ago.
Second quarter net revenues (total revenues less interest expense and the
provision for loan losses) increased to $7.1 billion -- 25 percent higher than
last year. The annualized return on average common equity for the quarter was
33.0 percent.
Philip J. Purcell, Chairman, and John J. Mack, President, said in a joint
statement, "We had another great quarter -- they've all been good since the
merger. Our net income for the first six months of this year is more than $3.0
billion, which is significantly more than we made for the full year in 1997.
Every business continued to do well even in choppy financial markets. We are
also pleased with the recent upgrade in our credit rating by S&P, which
reflects our pre-eminent position in global financial services."
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In the first six months of fiscal 2000, net income was $3,002 million, 37
percent higher than $2,188 million a year ago. Six-month diluted earnings per
share were $2.60, up 41 percent from last year's $1.85 and net revenues rose 32
percent to $14.5 billion over the same period. The annualized return on average
common equity was 34.7 percent for the first six months of the year.
SECURITIES
The Company's Securities business posted net income of $1,090 million, a 31
percent increase from last year's second quarter. The increase reflects record
revenues for its private client group and near record revenues for the Company's
institutional securities business.
o Institutional securities' results were driven by record revenues in equities
and an outstanding performance in investment banking, despite a slowing in
underwriting activity late in the quarter. Institutional securities also
continued to benefit from its strong global presence.
o Equities' record results reflected strong revenues in both derivative and
cash products. Both areas benefited from increased volumes and volatility in
most major markets worldwide. Fixed income's results were flat versus the
second quarter of 1999, as record revenues in commodities, driven by gains in
energy-related products, were partially offset by a decline in global high
yield trading.
o Investment banking's outstanding quarter was driven by near record revenues
and volume in global M&A advisory activity. For the first five months of
calendar 2000, the Company ranked first in announced global M&A; first in
North America and second worldwide in equity and equity-related
underwritings; and second in worldwide investment grade debt underwriting./1/
o The private client group's (PCG) record quarterly performance was largely the
result of increased sales of listed and over-the-counter equities and higher
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/1/ Source: Thomson Financial Securities Data - Jan 1 to May 31, 2000.
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revenues from the distribution of asset management products. PCG's sales of
asset management products remained strong during the quarter.
o PCG client assets in fee based accounts increased 73 percent from last year's
second quarter -- to total $128 billion. Total client assets of $660 billion
were $141 billion higher than a year ago.
o The number of PCG's global financial advisors rose to a record 13,513 -- an
increase of 441 for the quarter and 1,475 over the last twelve months.
o The private equity group reported negative net revenues of $197 million for
the second quarter compared with a gain of $29 million a year ago. These
results reflected lower securities prices in the telecommunications and
internet sectors, including our positions in Allegiance Telecom
and InterNAP.
ASSET MANAGEMENT
Asset Management's quarterly net income was $156 million, up 49 percent from
$105 million in the second quarter of 1999. The increase primarily reflects
growth in the Company's assets under management as well as a shift in asset mix
to a greater percentage of equity products.
o The Company's assets under management increased $40 billion, or 10 percent,
over last year to $445 billion.
o Retail assets were $37 billion ahead of a year ago but declined by $14
billion during the quarter -- to stand at $278 billion. Institutional assets
were up $3 billion compared to a year ago and $4 billion for the quarter--to
stand at $167 billion. The overall quarter-to-quarter decline resulted from
lower market values, even though both businesses had positive net sales for
the quarter.
o In March, the Company announced the formation of Morgan Stanley Dean Witter
Alternative Investment Partners. The new venture combines the distribution
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capabilities of MSDW with the experience of a team of investment managers
formerly with Weyerhaeuser Co. It will offer institutions and high net worth
individuals diversified portfolios of alternative investment products,
including private equity, real estate and venture capital.
o Unit Investment Trust sales rose to $4.5 billion, 32 percent above the level
of sales in the second quarter of last year.
CREDIT SERVICES
Credit Services net income was a record $212 million as a result of higher
consumer loan balances, strong transaction volume and improved credit quality.
o Managed consumer loans rose to a record $43.7 billion, an increase of $10.9
billion, or 33 percent, from a year ago.
o Merchant and cardmember fees increased 20 percent from a year ago to $591
million. Transaction volume increased 34 percent to $21.9 billion, driven by
higher sales volume and balance transfers.
o The consumer loan net charge-off rate declined to 4.21 percent, its lowest
level in almost five years and 134 basis points below last year's second
quarter 5.55 percent. The over-30-day delinquency rate was 5.11 percent,
compared to 5.94 percent a year ago.
o The yield on consumer loans declined 70 basis points from last year's
second quarter but increased 34 basis points from this year's first
quarter. The increase in yield reflects a pricing increase implemented during
the second quarter.
o Marketing and business development expenses increased 31 percent from last
year's second quarter, reflecting continued investment in growth initiatives
and an increase in cardmember rewards due to higher sales volume.
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The Company has repurchased approximately 27 million shares of its common stock
since the end of fiscal 1999. The Company's Board of Directors also took the
following actions:
o Authorized the repurchase, subject to market conditions and certain other
factors, of an additional $1.5 billion of the Company's common stock for
capital management purposes.
o Declared a $.20 quarterly dividend per common share. The dividend is payable
on July 28, 2000 to common shareholders of record on July 7, 2000.
Standard & Poor's recently upgraded the Company's credit ratings to AA- for
senior long term debt and to A-1+ for commercial paper.
Total capital at May 31, 2000 was $47.0 billion, including $18.5 billion of
common and preferred stockholders' equity and preferred securities issued by
subsidiaries. Book value per common share was $15.66, based on quarter-end
shares outstanding of 1.1 billion.
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 506 securities branch offices throughout the
United States.
Access this press release on-line @www.msdw.com
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(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 1999 Annual Report to Shareholders
and the Company's Quarterly Report on Form 10-Q for fiscal 2000.
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