����������������� ��������

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Goldman SachsFinancial Services ConferenceNovember 5, 1997

Philip PurcellChairman and CEO

MORGAN STANLEY, DEAN WITTER, DISCOVER & CO.

Strong Financial Targets

� Average ROE of 18 to 20% over Economic Cycle

� Average Earnings Growth of 15%

4

NOTICE: This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on informationgenerally available to the public and does not contain any material, nonpublic information. The presentation has been prepared solely for informationpurposes, is not a solicitation of an offer to buy or sell any security or instrument and has not been updated since it was originally presented on May 14, 2001.

Note: (1) Income before cumulative effect of accounting changeSource: SEC filings

CAGR 28.8%

����������� ��!�� ����������

1,980

2,586

3,276

4,791

1,544

5,456

1,075

1996 1997 1998 1999 2000 1Q2001(1)

5

NOTICE: This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on informationgenerally available to the public and does not contain any material, nonpublic information. The presentation has been prepared solely for informationpurposes, is not a solicitation of an offer to buy or sell any security or instrument and has not been updated since it was originally presented on May 14, 2001.

��������"���#�����$��

Source: SEC filings

20.0%22.0% 22.7%

32.6%30.9%

22.5%

1996 1997 1998 1999 2000 1Q2001

6

NOTICE: This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on informationgenerally available to the public and does not contain any material, nonpublic information. The presentation has been prepared solely for informationpurposes, is not a solicitation of an offer to buy or sell any security or instrument and has not been updated since it was originally presented on May 14, 2001.

���%� ���&&��!�'�&����������(��)�(��*�+

Global AssetManagement Industry

Global Credit CardIndustry

Global SecuritiesIndustry

n M&A Volume

n Equity UW

n Margin Debt

62%

42%

30%

n AUM(2)

n Mix shift to fixedincome caused by:

– NASDAQ

6%

49%

n Bankruptcy 19%

– S&P 12%

Notes: (1) Calendar quarter(2) Includes money market funds. 1Q01 data is through Feb. 28

Sources: Thomson Financial; ICI; NYSE; Visa USA Weekly Statistics from U.S. Courts; Commodity Systems, Inc.

7

NOTICE: This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on informationgenerally available to the public and does not contain any material, nonpublic information. The presentation has been prepared solely for informationpurposes, is not a solicitation of an offer to buy or sell any security or instrument and has not been updated since it was originally presented on May 14, 2001.

! ���,��-��""����

� Cutting non-comp expense

� Headcount reduced

� Stabilizing margins at historically favorable levels

8

NOTICE: This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on informationgenerally available to the public and does not contain any material, nonpublic information. The presentation has been prepared solely for informationpurposes, is not a solicitation of an offer to buy or sell any security or instrument and has not been updated since it was originally presented on May 14, 2001.

83218 326

813

1980 1985 1990 1995 2000Note: (1) Includes Regional Stock Exchanges only through November 2000Source: Securities Industry Association

����������������&�%��'��-�.��� /,��-��� #��'�������.��� �"��� 0���� /��/(��'�/��������12�2��3���-&�������� ���

5-Year10-Year15-Year20-Year

29.8%24.8%19.1%19.6%

CAGR

2,993

(1)

9

NOTICE: This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on informationgenerally available to the public and does not contain any material, nonpublic information. The presentation has been prepared solely for informationpurposes, is not a solicitation of an offer to buy or sell any security or instrument and has not been updated since it was originally presented on May 14, 2001.

$235$382

$837

$3,263

1985 1990 1995 2000

������������-�&���/4��&�����&���#���/�����'����&����������

Source: Thomson Financial Services

5-Year10-Year15-Year

31.3%23.9%19.2%

CAGR

10

NOTICE: This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on informationgenerally available to the public and does not contain any material, nonpublic information. The presentation has been prepared solely for informationpurposes, is not a solicitation of an offer to buy or sell any security or instrument and has not been updated since it was originally presented on May 14, 2001.

$12 $23 $32

$176

$460

1980 1985 1990 1995 2000

����������������&%��������#����4�����1�'�������-&����������

Source: Thomson Financial Services; worldwide public and Rule 144A equity offerings

5-Year10-Year15-Year20-Year

21.2%30.5%22.1%20.0%

CAGR

11

NOTICE: This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on informationgenerally available to the public and does not contain any material, nonpublic information. The presentation has been prepared solely for informationpurposes, is not a solicitation of an offer to buy or sell any security or instrument and has not been updated since it was originally presented on May 14, 2001.

$44

$135

$117

$495

$240

$1,065

$1,249

$2,812

$3,961

1980 1985 1990 1995 2000

����������12�2�/&&������- ���������5��'�/&&�&����������

Source: Investment Company Institute, Open-End Funds Only

CAGR

5-Year10-Year15-Year

20-Year

Total

19.9%20.7%19.3%

21.8%

Equity

26.0% 32.4%26.5%

25.2%

Equity

$6,967

12

NOTICE: This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on informationgenerally available to the public and does not contain any material, nonpublic information. The presentation has been prepared solely for informationpurposes, is not a solicitation of an offer to buy or sell any security or instrument and has not been updated since it was originally presented on May 14, 2001.

53

147

288

492

1984 1989 1994 1999

����������12�2���'������'&%�����$�,�#�&����������

CAGR

5-Year 11.3%

10-Year 12.9%

15-Year 16.0%

Source: Faulkner & Gray’s Card Industry Directory

13

NOTICE: This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on informationgenerally available to the public and does not contain any material, nonpublic information. The presentation has been prepared solely for informationpurposes, is not a solicitation of an offer to buy or sell any security or instrument and has not been updated since it was originally presented on May 14, 2001.

140

293

582

1,096

1984 1989 1994 1999

����������12�2���'������'&%���������-�.��� ����������

CAGR

5-Year 13.5%

10-Year 14.1%

15-Year 14.7%

Source: Faulkner & Gray’s Card Industry Directory

14

NOTICE: This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on informationgenerally available to the public and does not contain any material, nonpublic information. The presentation has been prepared solely for informationpurposes, is not a solicitation of an offer to buy or sell any security or instrument and has not been updated since it was originally presented on May 14, 2001.

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Convergence� Consolidation of players to

meet competitive imperativeof global size and scale

Globalization

� Worldwide deregulation ofmarkets and financialsystems lead to globalizationof capital flows

Technology� Rapid change shapes the

platform and drives thespeed by which globalizationoccurs

15

NOTICE: This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on informationgenerally available to the public and does not contain any material, nonpublic information. The presentation has been prepared solely for informationpurposes, is not a solicitation of an offer to buy or sell any security or instrument and has not been updated since it was originally presented on May 14, 2001.

���,�-��66��7���&��

Banks BrokersInvestment

Banks Insurers

(Merrill Lynch Merrill Lynch) Merrill Lynch

Dean Witter Morgan Stanley Morgan Stanley

DLJFirst BostonCredit Suisse CSFB

TravelersSmith Barney Salomon BrosSchroders

Citibank Citigroup

Goldman Goldman

AIG AIG

JP Morgan Chase

Chase

JP Morgan

Manufacturers Hanover

Chemical

Deutsche BankBankers Trust

Deutsche Bank

PaineWebber WarburgUBS UBS WarburgO’Connor Dillon ReadSwiss Bank

16

NOTICE: This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on informationgenerally available to the public and does not contain any material, nonpublic information. The presentation has been prepared solely for informationpurposes, is not a solicitation of an offer to buy or sell any security or instrument and has not been updated since it was originally presented on May 14, 2001.

��-�&���/4��&�����&����8����������'��'�/�����'���/

0

10

20

30

40

50

1997 1998 1999 2000 1Q2001

(%)

MWD

JPMGSCSFBSSBLEH

MER

Note: (1) Calendar quarterSource: Thomson Financial Services

MWDGS

MERSSB

LEHCSFB

JPM

(1)

17

NOTICE: This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on informationgenerally available to the public and does not contain any material, nonpublic information. The presentation has been prepared solely for informationpurposes, is not a solicitation of an offer to buy or sell any security or instrument and has not been updated since it was originally presented on May 14, 2001.

�4�����1�'�������-����8����������'��'��4����

0

5

10

15

20

25

1997 1998 1999 2000 1Q2001

(%) MWDGS

MERSSB

LEHCSFB

Note: (1) Calendar quarterSource: Thomson Financial Services

MWD

GS

MER

CSFB

LEH

SSB

(1)

18

NOTICE: This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on informationgenerally available to the public and does not contain any material, nonpublic information. The presentation has been prepared solely for informationpurposes, is not a solicitation of an offer to buy or sell any security or instrument and has not been updated since it was originally presented on May 14, 2001.

�#��1�'�������-����8������ �����/ �����!�,&� ������'

0

5

10

15

20

25

1997 1998 1999 2000 1Q2001

(%)

Note: (1) Calendar quarterSource: Thomson Financial Services

MWD

GS

MER

CSFB

LEH

SSB

(1)

MWDGS

MERSSB

LEHCSFB

19

NOTICE: This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on informationgenerally available to the public and does not contain any material, nonpublic information. The presentation has been prepared solely for informationpurposes, is not a solicitation of an offer to buy or sell any security or instrument and has not been updated since it was originally presented on May 14, 2001.

������-����8�������(��*�+�,&��(��

Worldwide Equity UW

Worldwide IPO UW

Global Announced M&A

(19%)

(49%)

(37%)

Industry

Note: (1) Calendar quarterSource: Thomson Financial Services

MWD

Rank

1

1

11Q01

20

NOTICE: This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on informationgenerally available to the public and does not contain any material, nonpublic information. The presentation has been prepared solely for informationpurposes, is not a solicitation of an offer to buy or sell any security or instrument and has not been updated since it was originally presented on May 14, 2001.

13.3%

11.0%

4.5%

1.5% 1.0%

CSFB MWD GS SSB MER

34.5%

26.4%

19.1%

15.0% 14.3%

JPM MWD SSB LEH MER

���#�������-�����8�������(�����

European EquityEuropean Announced M&A

Note: (1) Calendar quarterSource: Thomson Financial Services

21

NOTICE: This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on informationgenerally available to the public and does not contain any material, nonpublic information. The presentation has been prepared solely for informationpurposes, is not a solicitation of an offer to buy or sell any security or instrument and has not been updated since it was originally presented on May 14, 2001.

$275

$170

$106

$45

Visa Mastercard Amex Discover

Source: Discover, Company ReportsNote: Discover data based on fiscal quarters (December - May); all others based on calendar quarters (January - June)

��'������'�%���&������.��� �9���������������

45.7% 28.2% 17.7% 7.4%MarketShare

22

NOTICE: This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on informationgenerally available to the public and does not contain any material, nonpublic information. The presentation has been prepared solely for informationpurposes, is not a solicitation of an offer to buy or sell any security or instrument and has not been updated since it was originally presented on May 14, 2001.

40.3%

21.5% 21.5%

8.9%

Discover Amex Mastercard Visa

��'������'%���&������.��� �:�����-

Note: Transaction volume percent change from 1H 1999 to 1H 2000. Discover data based on fiscal quarters(December - May); all others based on calendar quarters (January - June)

23

NOTICE: This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on informationgenerally available to the public and does not contain any material, nonpublic information. The presentation has been prepared solely for informationpurposes, is not a solicitation of an offer to buy or sell any security or instrument and has not been updated since it was originally presented on May 14, 2001.

5��������/',�&������8�������������66;�7�����

Source: Company Earnings Releases/SIA Yearbook

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

1996 1997 1998 1999 2000

MWDMER

CPRU

PWJAGE

(# FAs)

24

NOTICE: This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on informationgenerally available to the public and does not contain any material, nonpublic information. The presentation has been prepared solely for informationpurposes, is not a solicitation of an offer to buy or sell any security or instrument and has not been updated since it was originally presented on May 14, 2001.

Note: (1) Excludes commissions and asset management, distribution and administration feesSource: Annual reports

1997 1998 1999 2000

13%

26%

7%

18%

19%

14%

17%

25%

8%4%

26%

17%

10%

22%

4%

17%

27%

16%

14%

19%

3%12%

33%

15%

Fixed Income Trading

Foreign Exchange

Underwriting

Commodities

Advisory Fee

Equity Trading

������&�$,��&*�+

3%3%

4%4%

Net Interest +Other

25

NOTICE: This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on informationgenerally available to the public and does not contain any material, nonpublic information. The presentation has been prepared solely for informationpurposes, is not a solicitation of an offer to buy or sell any security or instrument and has not been updated since it was originally presented on May 14, 2001.

$�&8�����- �� ��$,������.�$�$����*�+

0.810.68 0.64

0.47

0.0

0.2

0.4

0.6

0.8

1.0

MER MWD C GS JPM

1998:

2000:

Notes: (1) Average daily trading Net Revenue divided by year end VaR using a 99% confidence interval to estimate potential trading losses over a one day period; excludes commissions(2) JPMChase pro forma(3) Merrill 2000 net interest estimated based on 1999 proportions

Source: Company 10Ks with Morgan Stanley estimates

0.380.28 0.22 0.15 0.1

0.0

0.2

0.4

0.6

0.8

1.0

MWD MER JPM GS C

(3)

(2)

0.85

26

NOTICE: This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on informationgenerally available to the public and does not contain any material, nonpublic information. The presentation has been prepared solely for informationpurposes, is not a solicitation of an offer to buy or sell any security or instrument and has not been updated since it was originally presented on May 14, 2001.

$�����������&<�������/&&�&!�'3'*�+

0.0

50.0

100.0

150.0

200.0

250.0

300.0

350.0

400.0

1Q1997

2Q1997

3Q1997

4Q1997

1Q1998

2Q1998

3Q1998

4Q1998

1Q1999

2Q1999

3Q1999

4Q1999

1Q2000

2Q2000

3Q2000

4Q2000

1Q2001

157.1

161.4

162.0

249.0

Client AssetsS&P 500

DJIANASDAQ Composite

Note: (1) Market indices as of calendar quarter end; Morgan Stanley assets as of fiscal quarter endSource: Internal Morgan Stanley database & Bloomberg

27

NOTICE: This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on informationgenerally available to the public and does not contain any material, nonpublic information. The presentation has been prepared solely for informationpurposes, is not a solicitation of an offer to buy or sell any security or instrument and has not been updated since it was originally presented on May 14, 2001.

/&&������- ��/&&�&�1�'������- ��*=>�+

Sources: 2000 Annual Report, 1Q 2001 Earnings Release

338

412

472500 492

1997 1998 1999 2000 1Q2001

28

NOTICE: This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on informationgenerally available to the public and does not contain any material, nonpublic information. The presentation has been prepared solely for informationpurposes, is not a solicitation of an offer to buy or sell any security or instrument and has not been updated since it was originally presented on May 14, 2001.

Notes: (1) Includes gain on sale of businesses(2) Income before cumulative effect of accounting change

Source: SEC filings

CAGR 15.4%

��'�����,��>�&��&& ��!�� ����������

473

721662

140

726

142

1997 1998 1999 2000 1Q2001(1) (2)

29

NOTICE: This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on informationgenerally available to the public and does not contain any material, nonpublic information. The presentation has been prepared solely for informationpurposes, is not a solicitation of an offer to buy or sell any security or instrument and has not been updated since it was originally presented on May 14, 2001.

13.2 13.5

16.418.7 19.2

1997 1998 1999 2000 1Q2001

5������������-���� ����4�������������66?7�(��*=�>������&+

Source: Internal reporting database

EOP CAGR: 9.8%

30

NOTICE: This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on informationgenerally available to the public and does not contain any material, nonpublic information. The presentation has been prepared solely for informationpurposes, is not a solicitation of an offer to buy or sell any security or instrument and has not been updated since it was originally presented on May 14, 2001.

5������������-����������$����'�� �����,*=��������&+

Sources: Morgan Stanley Annual and Quarterly Reports, 1997-2000

540

3,444

2,949

4,465 11,398

1997 1998 1999 2000 1997-2000

DividendsPurchases of Common Stock

2,434

8,964

31

NOTICE: This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on informationgenerally available to the public and does not contain any material, nonpublic information. The presentation has been prepared solely for informationpurposes, is not a solicitation of an offer to buy or sell any security or instrument and has not been updated since it was originally presented on May 14, 2001.

5������������-��/,��-�/������$�����-����������,&2��� ������&�666�7��(��

Sources: Annual Reports, Earnings Press Releases

28.7%27.5%

24.7%23.1% 22.5%

0%

5%

10%

15%

20%

25%

30%

35%

MWD GS AXP Citi MER

32

NOTICE: This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on informationgenerally available to the public and does not contain any material, nonpublic information. The presentation has been prepared solely for informationpurposes, is not a solicitation of an offer to buy or sell any security or instrument and has not been updated since it was originally presented on May 14, 2001.

JP Morgan Chase(1)

Salomon Smith Barney(2)

���#��������-&����'��'��,��������"������-�����-���(����������)%�3�������-&�"���%������-����(�����&

Sources: Company press releases, 10Qs.

Morgan Stanley(3)

Bear Stearns

Lehman Brothers

Goldman Sachs(4)

Merrill Lynch

296

117

78

58

41

39

31

Notes: (1) Excludes Merger and Restructuring Costs of $1,302MM in 4Q00(2) Trailing 8 quarters only. Prior 4 quarters restated not available(3) Includes Securities and Asset Management segments only(4) Excludes SLK charge $290MM, net in 4Q00; amount taken from press release excluding non-recurring expenses associated with the Firm’s

conversion to corporate form in 2Q99

33

NOTICE: This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on informationgenerally available to the public and does not contain any material, nonpublic information. The presentation has been prepared solely for informationpurposes, is not a solicitation of an offer to buy or sell any security or instrument and has not been updated since it was originally presented on May 14, 2001.

.�&���

Connecting people, ideas and capital,we will be the world’s first choicefor achieving financial aspirations

34

NOTICE: This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on informationgenerally available to the public and does not contain any material, nonpublic information. The presentation has been prepared solely for informationpurposes, is not a solicitation of an offer to buy or sell any security or instrument and has not been updated since it was originally presented on May 14, 2001.

��������������

� Segmenting client base

� Developing client P&L models

� Aligning client satisfaction with internal reward system

� Unifying retail platform

35

NOTICE: This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on informationgenerally available to the public and does not contain any material, nonpublic information. The presentation has been prepared solely for informationpurposes, is not a solicitation of an offer to buy or sell any security or instrument and has not been updated since it was originally presented on May 14, 2001.

��&����-����-�&&

� Client satisfaction

� Higher market share

� Revenue growth

� Industry leading margins and ROE

� Lower volatility of earnings relative to peers