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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
THIRD QUARTER NET INCOME OF $1.2 BILLION;
EARNINGS PER SHARE UP 31%
NEW YORK, September 21, 2000 -- Morgan Stanley Dean Witter & Co. (NYSE: MWD)
today reported net income of $1,246 million for the quarter ended August 31,
2000 -- a 28 percent increase from $970 million in last year's third quarter.
Diluted earnings per share were $1.09 -- up 31 percent from $0.83 a year ago and
the seventh consecutive quarter of 30 percent year-over-year increases.
Third quarter net revenues (total revenues less interest expense and the
provision for loan losses) increased to $6.3 billion -- 18 percent higher than
last year. The annualized return on average common equity for the quarter was
27.6 percent.
Philip J. Purcell, Chairman, and John J. Mack, President, said in a joint
statement, "We continued to produce oustanding results, with nine-month earnings
35 percent ahead of last year's record pace. Our third-quarter results reflect
significant breadth -- with record operating results in Discover Card and asset
management, and another outstanding quarter in the securities business."
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In the first nine months of fiscal 2000, net income was $4,248 million, 35
percent higher than $3,158 million a year ago. Nine-month diluted earnings per
share were $3.70, up 38 percent from last year's $2.68 and net revenues rose 27
percent to $20.8 billion over the same period. The annualized return on average
common equity was 32.2 percent for the first nine months of the year.
SECURITIES
The Company's Securities business posted net income of $825 million, a 28
percent increase over last year's third quarter. The increase was driven by
record third quarter revenues in both the Company's institutional securities
business and its private client group.
o Institutional securities third quarter results reflected strong
performances in equity trading and investment banking, and an increase in
fixed income revenues. Institutional securities also benefited from its
strong global franchise, particularly in the European and Asian markets.
o Equity's third quarter performance benefited from higher volumes and higher
volatility in most major markets worldwide compared to a year earlier.
Fixed income's results increased over last year's third quarter, as higher
revenues from both derivatives and government bond trading more than offset
declines in commodities and global high yield securities.
o Investment banking's results were driven by continued high levels of volume
in global M&A advisory activity and substantially higher revenues in equity
underwriting. For the first eight months of calendar 2000, MSDW ranked
first worldwide in announced global M & A; second worldwide in equity and
equity-related underwritings; and third in worldwide investment grade debt
underwriting./1/
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/1/ Source: Thomson Financial Securities Data - January 1 to August 31, 2000.
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o The private client group (PCG) achieved strong quarterly revenues, largely
due to increased commissions and higher revenues from fee-based products.
PCG's sales of asset management products rose substantially over the third
quarter of 1999.
o PCG's client assets in fee based accounts increased 68 percent from last
year's third quarter to total $155 billion. Total client assets of $778
billion were $242 billion, or 45 percent, higher than a year ago.
o The number of PCG's global financial advisors rose to a record 13,789 -- an
increase of 276 for the quarter and 1,480 over the last twelve months.
ASSET MANAGEMENT
Asset Management's net income of $199 million, driven by record operating
results, increased 62 percent from a year ago. The Company benefited from
continued growth in assets under management and a shift in asset mix to a
greater percentage of equity products.
o The Company's assets under management increased $90 billion, or 20 percent,
over last year to a record $548 billion.
o Retail assets increased $34 billion during the quarter and $76 billion from
a year ago -- to stand at $354 billion. Higher market values and positive
net sales drove the quarterly and year-to-year increases in retail assets.
Institutional assets were up $4 billion for the quarter and $14 billion
from a year ago -- to stand at $194 billion.
o The offering during the quarter of the Van Kampen Select Growth Fund was
the Company's second largest equity fund offering ever -- raising
approximately $850 million in initial assets.
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o Reflecting continued improvement in fund performance, the number of the
Company's funds rated four or five stars by Morningstar/2/ rose to 55 from
48 in last year's third quarter. The Company has the second highest number
of domestic funds receiving Morningstar's two highest ratings.
CREDIT SERVICES
Credit Services net income increased 10 percent over last year's third quarter
to a record $222 million -- reflecting record consumer loan balances, strong
transaction volume and continued improvement in credit quality.
o Managed consumer loans rose to $44.8 billion, an increase of $10.4 billion,
or 30 percent, from a year ago.
o Merchant and cardmember fees rose 17 percent from a year ago to $634
million. Transaction volume increased 20 percent to $21.9 billion, driven
by increased sales volume and higher balance transfers.
o The consumer loan net charge-off rate declined to 4.18 percent, 111 basis
points below last year's third quarter 5.29 percent, and its lowest level
in five years. The over-30-day delinquency rate was 5.47 percent compared
to 6.34 percent a year ago.
o Marketing and business development expenses increased 16 percent driven by
continued investment in growth initiatives and an increase in cardmember
rewards reflecting higher sales volume.
o Discover opened 1.3 million new cardmember accounts during the quarter, and
now has a record 41.4 million accounts. More than 10 percent of the new
accounts were opened via the Internet.
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/2/ As of July 31, 2000.
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The Company has repurchased approximately 33 million shares of its common stock
since the end of fiscal 1999. The Company also announced that its Board of
Directors declared a $0.20 quarterly dividend per common share. The dividend is
payable on October 27, 2000 to common shareholders of record on October 6, 2000.
Total capital at August 31, 2000 was $50.3 billion, including $19.0 billion of
common and preferred stockholders' equity and preferred securities issued by
subsidiaries. Book value per common share was $16.19, based on 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 518 securities branch offices throughout the
United States.
The analysts' conference call on Morgan Stanley Dean Witter's third quarter
earnings is scheduled for September 21, 11:00 am to noon EDT. Those who wish to
listen to the call may dial 800-818-9097 (domestic) or 785-749-3937
(international), or gain web access through www.msdw.com. The automated passcode
is 34567. A playback of the meeting will be available after 2 p.m. EDT through
October 5. The playback can be accessed at msdw.com or by telephone at
888-566-0176 (domestic) or 402-351-0786 (international).
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 1999 Annual Report to Shareholders
and the Company's Quarterly Reports on Form 10-Q for fiscal 2000.
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