MORGAN STANLEY DEAN WITTER
ANNOUNCES RECORD QUARTERLY OPERATING RESULTS OF
$1.15 BILLION; EARNINGS PER SHARE UP 42%

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NEW YORK, June 24, 1999 -- Morgan Stanley Dean Witter & Co. (NYSE: MWD) today reported record operating results of $1,151 million for the quarter ended May 31, 1999 -- a 35 percent increase from $852 million in last year’s second quarter. Diluted earnings per share were $1.95 -- up 42 percent from $1.37 a year ago.

Second quarter net revenues (total revenues less interest expense and the provision for loan losses) increased to a record $5.7 billion -- 23 percent higher than a year ago. The annualized return on average common equity for the second quarter was 31.4 percent.

Philip J. Purcell, Chairman, and John J. Mack, President, said in a joint statement, "We had another terrific quarter. Operating results were up 35 percent, and were almost twice as high as they were at the time of our merger -- two years ago. Our Company is clearly reaping the benefits of the breadth and depth of our franchises, both in the U.S. and in markets around the globe. The period has been an active one for both our individual and institutional customers. Our securities business continued its record breaking pace, and we were pleased by the robust transaction volume and the significant improvement in the credit quality of our credit card portfolio."

Operating results rose to $2,188 million for the first six months of fiscal 1999, 42 percent higher than $1,543 million a year ago.1 Six-month diluted earnings per share were $3.71, up 50 percent from last year’s $2.47. Six-month net revenues rose 27 percent to $11.0 billion. The annualized six-month return on average common equity was 30.5 percent.

1All amounts for the six month period ended May 31, 1998 exclude a $117 million charge resulting from an accounting change. See Page F-1 of Financial Summary, Note 1.
SECURITIES

Securities net income increased to a record $829 million, up 54 percent from the second quarter of 1998.2 This increase reflects outstanding performances across all of the Company’s securities businesses.

2Securities includes the results of Discover Brokerage Direct which were previously reported in Credit Services.
3Source: Securities Data Corp. - January 1 to May 31, 1999. Back to Top
ASSET MANAGEMENT

Asset Management posted second quarter net income of $111 million -- down 23 percent from a year ago. The decline was due to lower investment gains for the Company’s Private Equity Group.

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CREDIT SERVICES

Credit Services net income increased by 23 percent to $211 million, compared to $171 million a year ago -- primarily reflecting the continued improvement in credit quality.

The Company repurchased approximately 11 million shares of its common stock since fiscal year end. The Company also announced that its Board of Directors declared a $.24 quarterly dividend per common share. The dividend is payable on July 30, 1999 to common shareholders of record on July 16, 1999.

Total capital at May 31, 1999 was $40.0 billion, including $15.7 billion of common and preferred shareholders’ equity and preferred securities issued by subsidiaries. Book value per common share was $26.00, based on period end shares outstanding of 566,786,999.

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 456 securities branch offices throughout the United States.

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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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MORGAN STANLEY DEAN WITTER & CO.
Financial Summary
(unaudited, dollars in millions)
 
 
  Quarter Ended
   Percentage Change From:
   Six Months Ended
   Percentage
  May 31, 1999
   May 31, 1998
   Feb 28, 1999
   May 31, 1998
   Feb 28, 1999
   May 31, 1999
   May 31, 1998
   Change
 
Net revenues  
  Securities   $4,216   $3,142   $3,887   34%   8%   $8,103   $5,917   37%
  Asset Management   569   674   712   (16%)   (20%)   1,281   1,251   2%
  Credit Services   872
  783
  752
  11%   16%   1,624
  1,466
  11%
  Consolidated net revenues   $5,657
  $4,599
  $5,351
  23%   6%   $11,008
  $8,634
  27%
 
Net income  
  Securities   $829   $537   $766   54%   8%   $1,595   $1,019   57%
  Asset Management   111   144   147   (23%)   (24%)   258   249   4%
  Credit Services   211
  171
  124
  23%   70%   335
  275
  22%
  Income before cumulative effect of a change in accounting   1,151   852   1,037   35%   11%   2,188   1,543   42%
  Cumulative effect of a change in accounting (1)   0
  0
  0
  --   --   0
  (117)
   *
  Consolidated net income   $1,151
  $852
  $1,037
  35%   11%   $2,188
  $1,426
  53%
  Preferred stock dividend requirements   $10
  $14
  $11
  (29%)   (9%)   $21
  $29
  (28%)
  Earnings applicable to common shares   $1,141
  $838
  $1,026
  36%   11%   $2,167
  $1,397
  55%
 
(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.
 
Note: The accompanying information includes the operating results of Discover Brokerage Direct, the Company's provider of electronic brokerage services, within Securities financial results. Previously, the Company had included Discover Brokerage Direct's results within its Credit Services segment. The segment data of prior periods has been restated to reflect this change.
F - 1  

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MORGAN STANLEY DEAN WITTER & CO.
Financial Summary
(unaudited)
 
  Quarter Ended
 Percentage Change From:
 Six Months Ended
 Percentage
  May 31, 1999
 May 31, 1998
 Feb 28, 1999
 May 31, 1998
 Feb 28, 1999
 May 31, 1999
 May 31, 1998
 Change
Basic earnings per common share
  Income before cumulative effect of a
       change in accounting $ 2.06 $ 1.44 $ 1.85 43% 11% $ 3.91 $ 2.59 51%
  Cumulative effect of a change in accounting $ 0.00 $ 0.00 $ 0.00 -- -- $ 0.00 $ (0.20) *
  Net income $ 2.06 $ 1.44 $ 1.85 43% 11% $ 3.91 $ 2.39 64%
 
Diluted earnings per common share
  Income before cumulative effect of a
       change in accounting $ 1.95 $ 1.37 $ 1.76 42% 11% $ 3.71 $ 2.47 50%
  Cumulative effect of a change in accounting $ 0.00 $ 0.00 $ 0.00 -- -- $ 0.00 $ (0.19) *
  Net income $ 1.95 $ 1.37 $ 1.76 42% 11% $ 3.71 $ 2.28 63%
 
Average common shares outstanding  
  Basic 554,146,582 581,326,618 553,935,578     553,788,197 583,502,306  
  Diluted 586,655,685 612,625,354 584,593,156     585,508,185 614,179,415  
Period end common shares outstanding 566,786,999 587,672,561 570,589,670     566,786,999 587,672,561  
 
Return on common equity 31.4% 25.2% 29.5%     30.5% 21.0%  
 
Return on common equity (1) N/A N/A N/A     N/A 22.6%  
 
(1) Excludes the cumulative effect of a change in accounting in the quarter ended February 28, 1998.
 
F - 2

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MORGAN STANLEY DEAN WITTER & CO.
Consolidated Income Statement Information
(unaudited, dollars in millions)
 
  Quarter Ended
   Percentage Change From:
   Six Months Ended
   Percentage
  May 31, 1999
   May 31, 1998
   Feb 28, 1999
   May 31, 1998
   Feb 28, 1999
   May 31, 1999
   May 31, 1998
   Change
 
Investment banking   $1,022   $988   $957   3%   7%   $1,979   $1,788   11%
Principal transactions:
  Trading   1,926   1,091   1,691   77%   14%   3,617   1,994   81%
  Investments   150   101   265   49%   (43%)   415   173   140%
Commissions   789   611   665   29%   19%   1,454   1,158   26%
Fees:
  Asset management, distribution and administration   765   741   714   3%   7%   1,479   1,417   4%
  Merchant and cardmember   357   404   341   (12%)   5%   698   832   (16%)
  Servicing   310   232   253   34%   23%   563   403   40%
Interest and dividends   3,689   4,213   3,480   (12%)   6%   7,169   8,146   (12%)
Other   46
  47
  39
  (2%)   18%   85
  102
  (17%)
  Total revenues   9,054   8,428   8,405   7%   8%   17,459   16,013   9%
Interest expense   3,278   3,554   2,877   (8%)   14%   6,155   6,699   (8%)
Provision for consumer loan losses   119
  275
  177
  (57%)   (33%)   296
  680
  (56%)
  Net revenues   5,657
  4,599
  5,351
  23%   6%   11,008
  8,634
  27%
 
Compensation and benefits   2,413   2,017   2,363   20%   2%   4,776   3,805   26%
Occupancy and equipment   153   143   146   7%   5%   299   283   6%
Brokerage, clearing and exchange fees   127   135   114   (6%)   11%   241   256   (6%)
Information processing and communications   315   275   309   15%   2%   624   542   15%
Marketing and business development   381   286   395   33%   (4%)   776   580   34%
Professional services   191   156   162   22%   18%   353   284   24%
Other   219
  190
  190
  15%   15%   409
  355
  15%
  Total non-interest expenses   3,799
  3,202
  3,679
  19%   3%   7,478
  6,105
  22%
Income before income taxes and cumulative
  effect of a change in accounting		   1,858   1,397   1,672   33%   11%   3,530   2,529   40%
Income tax expense   707
  545
  635
  30%   11%   1,342
  986
  36%
Income before cumulative effect of a
  change in accounting		   1,151   852   1,037   35%   11%   2,188   1,543   42%
Cumulative effect of a change in accounting (1)   0
  0
  0
  --   --   0
  (117)
   *
Net income   $1,151
  $852
  $1,037
  35%   11%   $2,188
  $1,426
  53%
Preferred stock dividend requirements   $10
  $14
  $11
  (29%)   (9%)   $21
  $29
  (28%)
Earnings applicable to common shares   $1,141
  $838
  $1,026
  36%   11%   $2,167
  $1,397
  55%
 
(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.
 
F - 3

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MORGAN STANLEY DEAN WITTER & CO.
Securities and Asset Management Income Statement Information
(unaudited, dollars in millions)
  Quarter Ended
 Percentage Change From:
 Six Months Ended
 Percentage
  May 31, 1999
 May 31, 1998
 Feb 28, 1999
 May 31, 1998
 Feb 28, 1999
 May 31, 1999
 May 31, 1998
 Change
Investment banking $ 1,022 $ 988 $ 957 3% 7% $ 1,979 $ 1,788 11%
Principal transactions:
  Trading 1,926 1,091 1,691 77% 14% 3,617 1,994 81%
  Investments 150 101 265 49% (43%) 415 173 140%
Commissions 789 611 665 29% 19% 1,454 1,158 26%
Asset management, distribution and administration fees 765 741 714 3% 7% 1,479 1,417 4%
Interest and dividends 3,167 3,542 2,924 (11%) 8% 6,091 6,694 (9%)
Other 46
 45
 39
 2% 18% 85
 99
 (14%)
  Total revenues 7,865 7,119 7,255 10% 8% 15,120 13,323 13%
Interest expense 3,080
 3,303
 2,656
 (7%) 16% 5,736
 6,155
 (7%)
  Net revenues 4,785
 3,816
 4,599
 25% 4% 9,384
 7,168
 31%
 
Compensation and benefits 2,290 1,873 2,244 22% 2% 4,534 3,523 29%
Occupancy and equipment 141 127 134 11% 5% 275 250 10%
Brokerage, clearing and exchange fees 127 135 114 (6%) 11% 241 256 (6%)
Information processing and communications 206 164 192 26% 7% 398 314 27%
Marketing and business development 167 126 149 33% 12% 316 242 31%
Professional services 160 132 141 21% 13% 301 237 27%
Other 167
 132
 148
 27% 13% 315
 255
 24%
  Total non-interest expenses 3,258
 2,689
 3,122
 21% 4% 6,380
 5,077
 26%
Income before income taxes and cumulative  
  effect of a change in accounting 1,527 1,127 1,477 35% 3% 3,004 2,091 44%
Income tax expense 587
 446
 564
 32% 4% 1,151
 823
 40%
Income before cumulative effect of a  
  change in accounting 940 681 913 38% 3% 1,853 1,268 46%
Cumulative effect of a change in accounting (1) 0
 0
 0
 -- -- 0
 (117)
 *
Net income $ 940
 $ 681
 $ 913
 38% 3% $ 1,853
 $ 1,151
 61%
 
Compensation and benefits as a % of net revenues 48% 49% 49%     48% 49%  
Non-compensation expenses as a % of net revenues 20% 21% 19%     20% 22%  
Profit margin (2) 20% 18% 20%     20% 16%  
 
(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) Net income as a % of net revenues.
F - 4

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MORGAN STANLEY DEAN WITTER & CO.
Credit Services Income Statement Information
(unaudited, dollars in millions)
 
  Quarter Ended
   Percentage Change From:
   Six Months Ended
   Percentage
  May 31, 1999
   May 31, 1998
   Feb 28, 1999
   May 31, 1998
   Feb 28, 1999
   May 31, 1999
   May 31, 1998
   Change
 
Fees:
  Merchant and cardmember   $357   $404   $341   (12%)   5%   $698   $832   (16%)
  Servicing   310   232   253   34%   23%   563   403   40%
Other   0
  2
  0
  *   --   0
  3
  *
  Total non-interest revenues   667   638   594   5%   12%   1,261   1,238   2%
 
Interest revenue   522   671   556   (22%)   (6%)   1,078   1,452   (26%)
Interest expense   198
  251
  221
  (21%)   (10%)   419
  544
  (23%)
  Net interest income   324   420   335   (23%)   (3%)   659   908   (27%)
 
Provision for consumer loan losses   119
  275
  177
  (57%)   (33%)   296
  680
  (56%)
  Net credit income   205
  145
  158
  41%   30%   363
  228
  59%
 
  Net revenues   872
  783
  752
  11%   16%   1,624
  1,466
  11%
 
Compensation and benefits   123   144   119   (15%)   3%   242   282   (14%)
Occupancy and equipment   12   16   12   (25%)   --   24   33   (27%)
Information processing and communications   109   111   117   (2%)   (7%)   226   228   (1%)
Marketing and business development   214   160   246   34%   (13%)   460   338   36%
Professional services   31   24   21   29%   48%   52   47   11%
Other   52
  58
  42
  (10%)   24%   94
  100
  (6%)
  Total non-interest expenses   541
  513
  557
  5%   (3%)   1,098
  1,028
  7%
Income before income taxes   331   270   195   23%   70%   526   438   20%
Income tax expense   120
  99
  71
  21%   69%   191
  163
  17%
Net income   $211
  $171
  $124
  23%   70%   $335
  $275
  22%
 
Compensation and benefits as a % of net revenues   14%   18%   16%   15%   19%
Non-compensation expenses as a % of net revenues   48%   47%   58%   53%   51%
Profit margin (1)   24%   22%   16%   21%   19%
 
(1) Net income as a % of net revenues.
F - 5

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MORGAN STANLEY DEAN WITTER & CO.
Credit Services Income Statement Information
(unaudited, dollars in millions)
(Managed loan basis)
 
  Quarter Ended
 Percentage Change From:
 Six Months Ended
 Percentage
  May 31, 1999
 May 31, 1998
 Feb 28, 1999
 May 31, 1998
 Feb 28, 1999
 May 31, 1999
 May 31, 1998
 Change
 
Fees:  
  Merchant and cardmember $ 494 $ 519 $ 473 (5%) 4% $ 967 $ 1,052 (8%)
  Servicing 0 0 0 -- -- 0 0 --
Other 0
 2
 0
 * -- 0
 3
 *
  Total non-interest revenues 494 521 473 (5%) 4% 967 1,055 (8%)
 
Interest revenue 1,221 1,319 1,181 (7%) 3% 2,402 2,679 (10%)
Interest expense 449
 502
 451
 (11%) -- 900
 1,029
 (13%)
  Net interest income 772 817 730 (6%) 6% 1,502 1,650 (9%)
 
Provision for consumer loan losses 394
 555
 451
 (29%) (13%) 845
 1,239
 (32%)
  Net credit income 378
 262
 279
 44% 35% 657
 411
 60%
  Net revenues 872
 783
 752
 11% 16% 1,624
 1,466
 11%
 
Compensation and benefits 123 144 119 (15%) 3% 242 282 (14%)
Occupancy and equipment 12 16 12 (25%) -- 24 33 (27%)
Information processing and communications 109 111 117 (2%) (7%) 226 228 (1%)
Marketing and business development 214 160 246 34% (13%) 460 338 36%
Professional services 31 24 21 29% 48% 52 47 11%
Other 52
 58
 42
 (10%) 24% 94
 100
 (6%)
  Total non-interest expenses 541
 513
 557
 5% (3%) 1,098
 1,028
 7%
Income before income taxes 331 270 195 23% 70% 526 438 20%
Income tax expense 120
 99
 71
 21% 69% 191
 163
 17%
Net income $ 211
 $ 171
 $ 124
 23% 70% $ 335
 $ 275
 22%
 
Compensation and benefits as a % of net revenues 14% 18% 16%     15% 19%  
Non-compensation expenses as a % of net revenues 48% 47% 58%     53% 51%  
Profit margin (1) 24% 22% 16%     21% 19%  
 
(1) Net income as a % of net revenues.
F - 6

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MORGAN STANLEY DEAN WITTER & CO.
Financial Information and Statistical Data
(unaudited)
  Quarter Ended
 Percentage Change From:
  May 31, 1999
 May 31, 1998
 Feb 28, 1999
 May 31, 1998
 Feb 28, 1999
Morgan Stanley  
 
Period end common shares outstanding 566,786,999 587,672,561 570,589,670 (4%) (1%)
Book value per common share $ 26.00 $ 21.95 $ 24.93 18% 4%
Shareholder's equity (millions) (1) $ 15,749 $ 14,106 $ 15,237 12% 3%
Total capital (millions) (2) $ 40,007 $ 36,604 $ 39,388 9% 2%
 
SECURITIES ($ billions)  
 
Private Client Group  
  Financial advisors 11,764 10,650 11,453 10% 3%
  Client assets $ 510 $ 425 $ 470 20% 8%
 
Institutional Securities (3)  
  Mergers and acquisitions announced transactions (4)  
       Morgan Stanley global market volume $ 308.3 $ 195.9 $ 109.7    
       Rank 3 4 2    
  Worldwide equity and related issues (4)  
       Morgan Stanley global market volume $ 21.9 $ 15.0 $ 10.5    
       Rank 1 1 1    
 
ASSET MANAGEMENT ($ billions)  
 
Assets under management and administration  
Products offered primarily to individuals  
  Mutual funds  
       Equity $ 84 $ 73 $ 77 15% 9%
       Fixed income 56 52 56 8% --
       Money markets 42
 33
 41
 27% 2%
       Total mutual funds 182 158 174 15% 5%
 
  ICS Assets 21 17 20 24% 5%
  Other 35
 31
 33
 13% 6%
 
  Sub-total Individual 238
 206
 227
 16% 5%
 
Products offered primarily to institutional clients  
  Mutual funds 33 34 34 (3%) (3%)
  Separate accounts, pooled vehicle and other arrangements 131
 134
 124
 (2%) 6%
 
  Sub-total Institutional 164
 168
 158
 (2%) 4%
 
Total assets under management and administration $ 402
 $ 374
 $ 385
 7% 4%
 
(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

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MORGAN STANLEY DEAN WITTER & CO.
Financial Information and Statistical Data
(unaudited, dollars in millions)
 
  Quarter Ended
 Percentage Change From:
 Six Months Ended
 Percentage
  May 31, 1999
 May 31, 1998
 Feb 28, 1999
 May 31, 1998
 Feb 28, 1999
 May 31, 1999
 May 31, 1998
 Change
Credit Services  
 
Owned consumer loans  
  Period end $ 14,588 $ 17,913 $ 15,529 (19%) (6%) $ 14,588 $ 17,913 (19%)
  Average $ 14,664 $ 18,293 $ 16,420 (20%) (11%) $ 15,533 $ 20,003 (22%)
 
Managed consumer loans (1)  
  Period end $ 32,805 $ 34,091 $ 32,134 (4%) 2% $ 32,805 $ 34,091 (4%)
  Average $ 32,258 $ 34,479 $ 32,900 (6%) (2%) $ 32,575 $ 35,641 (9%)
  Interest yield 14.39% 14.79% 14.06% (0.40 pp) 0.33 pp 14.23% 14.76% (0.53 pp)
  Interest spread 8.81% 8.64% 8.41% 0.17 pp 0.40 pp 8.61% 8.55% 0.06 pp
  Net charge-off rate 5.55% 6.58% 6.28% (1.03 pp) (0.73 pp) 5.91% 7.05% (1.14 pp)
  Delinquency rate (over 30 days) 5.94% 7.07% 7.08% (1.13 pp) (1.14 pp) 5.94% 7.07% (1.13 pp)
 
General purpose credit card accounts (in millions) 37 38 37     37 38  
Discover/NOVUS Network increase in merchant locations (in thousands) 138 101 100     238 191  
 
(1) Includes owned and securitized consumer loans.
F - 8

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