Morgan Stanley

1999 was an extraordinary year for Morgan Stanley Dean Witter, our clients and our shareholders. The commitment and exceptional performance of our 55,000 employees around the globe led to increases in market share in several key businesses. We ended the year in the strongest position in our history, and we are poised for further growth in the new millennium.

Let's begin with our financial results:

We earned $4.8 billion in 1999, an increase of $1.5 billion, or 46 percent over 1998. Diluted earnings per share was $4.10 -- up 54 percent from $2.67 in 1998.
Return on equity was 32.6 percent -- well above our goal of an average of 18 percent to 20 percent over the course of the business cycle.
On December 31, 1999, our stock closed up 101 percent from a year earlier. Since our merger on May 31, 1997, our stock price has risen by 244 percent compared with 73 percent for the S&P 500.
In December, the Board of Directors declared a two-for-one common stock split for common shareholders of record as of January 12, 2000. The Board also increased the quarterly cash dividend per common share by 67 percent to $0.20.

What was the story behind these extraordinary results? You can begin with an excellent year for most financial markets, especially compared with the turbulence experienced in the latter half of 1998. But the story goes deeper than that and has to do with the remarkable transformation that is occurring in the world of business generally and with our customers. We are witnessing an intensification of the trends we discussed a year ago -- particularly the rapid technological change that is creating new companies, driving consolidation and globalization, and bringing about the restructuring of entire industries and economies.

In this "new economy," customers are gaining power, transaction costs are being driven down, and more open and transparent markets and increased competition put a premium on products and services that are the best of breed. We know that such a new economy is emerging. And we believe that Morgan Stanley Dean Witter (Morgan Stanley), with its tradition of putting customer interests first, its financial strength and its ability to provide customers with access to efficient markets, stands at the fulcrum of change.