Morgan Stanley Reports Fourth Quarter and Full Year 2012:

Fri Jan 18, 2013 7:15am EST

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* Fourth Quarter Net Revenues of $7.0 Billion Included the Negative Impact of
$511 Million fromthe Tightening of Morgan Stanley`s Debt-Related Credit Spreads
(DVA);1 Income from Continuing Operations of $0.28 per Diluted Share
* Excluding DVA, Fourth Quarter Net Revenues were $7.5 Billion and Income from
Continuing Operations was $0.45 per Diluted Share2, 
        3
* Fourth Quarter Global Wealth Management Pre-Tax Margin of 17%, Highest Since
the Inception of the Joint Venture; Investment Banking Ranked #1 in Global IPOs
and #2 in Global Announced M&A and Global Equity;4 Solid Results in Equity Sales
and Trading
* Full Year Net Revenues of $26.1 Billion Included the Negative Impact of $4.4
Billion from DVA; Loss from Continuing Operations of $0.03 per Diluted Share;
Excluding DVA, Net Revenues were $30.5 Billion and Income from Continuing
Operations was $1.59 per Diluted Share2, 3

NEW YORK--(Business Wire)--
Morgan Stanley (NYSE: MS) today reported net revenues of $7.0 billion for the
fourth quarter ended December 31, 2012 compared with $5.7 billion a year ago.
For the current quarter, income from continuing operations applicable to Morgan
Stanley was $573 million, or $0.28 per diluted share,5 which included a net tax
benefit of approximately $155 million,6 or $0.08 per diluted share, compared
with a loss of $222 million, or a loss of $0.13 per diluted share,5 for the same
period a year ago. The prior year fourth quarter included a pre-tax loss of
approximately $1.7 billion, or a loss of $0.58 per diluted share, related to the
comprehensive settlement with MBIA Insurance Corporation (MBIA). 

Results for the current quarter included negative revenue of $511 million
compared with positive revenue of $216 million a year ago related to changes in
Morgan Stanley`s debt-related credit spreads and other credit factors (Debt
Valuation Adjustment, DVA).1

Excluding DVA, net revenues for the current quarter were $7.5 billion compared
with $5.5 billion a year ago and income from continuing operations applicable to
Morgan Stanley was $894 million, or $0.45 per diluted share, compared with a
loss of $349 million, or $0.20 loss per diluted share a year ago.3, 5, 7

Compensation expense of $3.6 billion in the current quarter declined from $3.8
billion a year ago. Non-compensation expenses of $2.5 billion increased from
$2.3 billion a year ago. 

For the current quarter, net income applicable to Morgan Stanley, including
discontinued operations, was $0.25 per diluted share, compared with a net loss
of $0.15 per diluted share in the fourth quarter of 2011. Discontinued
operations in the current quarter includes a provision of approximately $115
million related to a settlement with the Federal Reserve Board concerning the
independent foreclosure review related to Saxon.8

                                                                                                                                 
 Summary of Firm Results                                                                                                         
 (dollars in millions)                                                                                                           
                                                                                                                                 
                         As Reported                                          Excluding DVA (2), (3)                             
                         Net                      MS Earnings                 Net                            MS Earnings         
                         Revenues                 Cont. Ops. (1)              Revenues                       Cont. Ops. (1)      
    4Q 2012              $6,966                   $547                        $7,477                         $867                
    3Q 2012              $5,280                   $(1,032)                    $7,542                         $534                
    4Q 2011              $5,675                   $(247)                      $5,459                         $(374)              
                                                                                                                                 


(1) Represents income (loss) from continuing operations applicable to Morgan
Stanley common shareholders less preferred dividends. 

(2) Net revenues for 4Q 2012, 3Q 2012 and 4Q 2011 exclude positive (negative)
revenue from DVA of $(511) million, $(2,262) million and $216 million,
respectively. 

(3) Earnings / (loss) from continuing operations applicable to Morgan Stanley
common shareholders for 4Q 2012, 3Q 2012 and 4Q 2011 excludes after-tax DVA
impact of $(321) million, $(1,568) million and $127 million, respectively, and
includes a related allocation of earnings to Participating Restricted Stock
Units of $1 million, $2 million and $0 million, respectively. 

Fourth Quarter Business Overview

* Global Wealth Management Group net revenues were $3.5 billion and pre-tax
margin was 17%.9 Average annualized revenue per global representative was
$824,000, highest since the inception of the Joint Venture. 
* Institutional Securities net revenues excluding DVA were $3.5 billion
reflecting strong performance in Investment Banking, solid results in Equity
sales and trading and a decline in Fixed Income & Commodities sales and trading.

* Asset Management reported net revenues of $599 million with assets under
management or supervision of $338 billion.

James P. Gorman, Chairman and Chief Executive Officer, said,"After a year of
significant challenges, Morgan Stanley has reached a pivot point. We
demonstrated meaningful progress in our Wealth Management Joint Venture,
reaching the highest pre-tax margin since the inception of the JV. We charted a
path to acquire the remainder of the JV. We are ahead of our risk weighted asset
reduction targets for Fixed Income and Commodities, while continuing to focus on
our strengths within business and strategic linkages across the Firm and
investing for the evolving regulatory environment. We continued to demonstrate
leadership in Investment Banking and Equity sales and trading. Our Firm is now
poised to reach the returns of which it is capable on behalf of our
shareholders." 

FOURTH QUARTER RESULTS

                                                                                                                                   
 Summary of Institutional Securities Results                                                                                       
 (dollars in millions)                                                                                                             
                                                                                                                                   
                                   As Reported                                            Excluding DVA (1)                        
                                   Net                      Pre-Tax                       Net                         Pre-Tax      
                                   Revenues                 Income                        Revenues                    Income       
      4Q 2012                      $2,951                   $57                           $3,462                      $568         
      3Q 2012                      $1,367                   $(1,920)                      $3,629                      $342         
      4Q 2011                      $2,068                   $(772)                        $1,852                      $(988)       
                                                                                                                                   


(1) Net revenues and pre-tax income for 4Q 2012, 3Q 2012 and 4Q 2011 exclude
positive (negative) revenue from DVA of $(511) million, $(2,262) million and
$216 million, respectively. 

INSTITUTIONAL SECURITIES

Institutional Securities reported a pre-tax gain from continuing operations of
$57 million compared with a pre-tax loss of $772 million in the fourth quarter
of last year. Net revenues for the current quarter were $3.0 billion compared
with $2.1 billion, inclusive of MBIA, a year ago. DVA resulted in negative
revenue of $511 million in the current quarter compared with positive revenue of
$216 million a year ago. Excluding DVA, net revenues for the current quarter
were $3.5 billion compared with $1.9 billion a year ago. The following
discussion for sales and trading excludes DVA.

* Advisory revenues were $454 million compared with $406 million a year ago
reflecting higher levels of market activity. Equity underwriting revenues were
$237 million compared with $189 million a year ago reflecting higher market
volume. Fixed income underwriting revenues were $534 million, our highest
reported quarter, compared with $288 million a year ago. 
* Fixed Income & Commodities sales and trading net revenues were $811 million
compared with losses of $493 million a year ago. Fixed Income, after considering
the impact of MBIA, reflected a decline in rates, partly offset by relative
improvement in credit products. Commodities results declined meaningfully in a
challenging market.10
* Equity sales and trading net revenues of $1.3 billion were essentially
unchanged from the prior year quarter, although stronger performances were noted
in the derivatives and prime brokerage businesses.10
* Compensation expense for the current quarter was $1.5 billion compared with
$1.6 billion in the prior year quarter. Non-compensation expenses of $1.4
billion increased from $1.3 billion a year ago. 
* Morgan Stanley`s average trading Value-at-Risk (VaR) measured at the 95%
confidence level was $78 million compared with $63 million in the third quarter
of 2012 and $105 million in the fourth quarter of the prior year.11

                                                         
 Summary of Global Wealth Management Group Results       
 (dollars in millions)                                   
                                                         
                      Net                Pre-Tax         
                      Revenues           Income (1)      
    4Q 2012           $3,461             $581            
    3Q 2012           $3,336             $239            
    4Q 2011           $3,219             $238            
                                                         


(1) 3Q 2012 pre-tax income includes $193 million of non-recurring costs
associated with the Morgan Stanley Wealth Management (MSWM) integration and
purchase of an additional 14% stake in the Joint Venture. 

GLOBAL WEALTH MANAGEMENT GROUP

Global Wealth Management Group reported pre-tax income from continuing
operations of $581 million compared with $238 million in the fourth quarter of
last year. The quarter`s pre-tax margin was 17%.9 Net revenues for the current
quarter were $3.5 billion compared with $3.2 billion a year ago. Income after
the noncontrolling interest allocation to Citigroup Inc. (Citi) and before taxes
was $474 million.12

* Asset management fee revenues of $1.9 billion increased 16% from last year`s
fourth quarter primarily reflecting an increase in fee based assets and positive
flows. 
* Transactional revenues13 of $1.1 billion decreased 3% from a year ago
reflecting reduced commissions and fees and a decrease in principal trading
revenues driven by lower gains from investments associated with the Firm`s
deferred compensation and co-investment plans, offset by higher investment
banking revenues. 
* Compensation expense for the current quarter was $2.0 billion compared with
$2.1 billion a year ago. Non-compensation expenses were $901 million compared
with $922 million a year ago. 
* Total client assets were $1.8 trillion at quarter end. Client assets in fee
based accounts were $573 billion, or 32% of total client assets. Global fee
based asset flows for the quarter were $3.7 billion. 
* Global representatives of 16,780 were relatively unchanged from the prior
quarter. Average annualized revenue per global representative of $824,000 and
total client assets per global representative of $106 million increased 13% and
14%, respectively, compared with the prior year quarter.

                                                      
 Summary of Asset Management Results                  
 (dollars in millions)                                
                                                      
                      Net                Pre-Tax      
                      Revenues           Income       
    4Q 2012           $599               $221         
    3Q 2012           $631               $198         
    4Q 2011           $424               $78          
                                                      


ASSET MANAGEMENT

Asset Management reported pre-tax income from continuing operations of $221
million compared with pre-tax income of $78 million in last year`s fourth
quarter.14 The quarter`s pre-tax margin was 37%.9 Income after the
noncontrolling interest allocation and before taxes was $172 million.

* Net revenues of $599 million increased from $424 million in last year`s fourth
quarter primarily reflecting higher results in the Traditional Asset Management
business and gains on principal investments in the Merchant Banking and Real
Estate Investing businesses.15
* Compensation expense for the current quarter was $168 million compared with
$183 million a year ago. Non-compensation expenses of $210 million increased
from $163 million a year ago on higher brokerage and clearing expenses. 
* Assets under management or supervision at December 31, 2012 of $338 billion
increased 18% from the prior year. The increase primarily reflected positive net
customer flows in Morgan Stanley`s liquidity funds and market appreciation.

FULL YEAR RESULTS

Full year net revenues were $26.1 billion compared with $32.2 billion a year
ago. Income from continuing operations applicable to Morgan Stanley for the
current year was $48 million, or a loss of $0.03 per diluted share,5 compared
with income of $4.2 billion, or $1.26 per diluted share,5 a year ago. Results
for the current year included a net tax benefit of approximately $73 million or
$0.04 per diluted share.6 The Firm`s prior year earnings reflected the impact of
several key actions executed in connection with strategic and other matters.16

Results for the year included negative revenue of $4.4 billion compared with
positive revenue of $3.7 billion a year ago related to DVA. Excluding DVA, net
revenues for the current year were $30.5 billion compared with $28.6 billion in
2011 and income from continuing operations applicable to Morgan Stanley was $3.2
billion, or $1.59 per diluted share, compared with income of $1.9 billion, or a
loss of $0.08 per diluted share a year ago.3,5,7

The Firm`s compensation expense of $15.6 billion for the current year decreased
from $16.3 billion a year ago. Non-compensation expenses of $10.0 billion
increased from $9.8 billion a year ago. 

For the current year, the net loss applicable to Morgan Stanley, including
discontinued operations, was $0.06 per diluted share, compared with net income
of $1.23 per diluted share a year ago.8

                                                                                                                              
 Summary of Firm Results                                                                                                      
 (dollars in millions)                                                                                                        
                                                                                                                              
                      As Reported                                          Excluding DVA (2), (3)                             
                      Net                      MS Earnings                 Net                            MS Earnings         
                      Revenues                 Cont. Ops. (1)              Revenues                       Cont. Ops. (1)      
    FY 2012           $26,112                  $(50)                       $30,514                        $3,055              
    FY 2011           $32,236                  $2,117                      $28,555                        $(136)              
                                                                                                                              


(1) Represents income (loss) from continuing operations applicable to Morgan
Stanley common shareholders less preferred dividends and a one-time negative
adjustment of $1.7 billion in FY 2011 related to the conversion of the Firm`s
Series B Preferred Stock held by Mitsubishi UFJ Financial Group, Inc. (MUFG)
into common stock. 

(2) Net revenues for FY 2012 and FY 2011 exclude positive (negative) revenue
from DVA of $(4,402) million and $3,681 million, respectively. 

(3) Earnings / (loss) from continuing operations applicable to Morgan Stanley
common shareholders for FY 2012 and FY 2011 excludes after-tax DVA impact of
$(3,118) million and $2,275 million, respectively, and includes a related
allocation of earnings to Participating Restricted Stock Units of $13 million
and $(22) million, respectively.

                                                                                                                                                                                             
 Summary of Segments Results                                                                                                                                                                 
 (dollars in millions)                                                                                                                                                                       
                                                                                                                                                                                             
                                    As Reported                                                                      Excluding DVA (1)                                                       
                                                                                                                                                                                             
                                    Net Revenues                          Pre-Tax Income                             Net Revenues                          Pre-Tax Income                    
                                                                                                                                                                                             
                                    FY 2012              FY 2011          FY 2012               FY 2011              FY 2012              FY 2011          FY 2012              FY 2011      
                                                                                                                                                                                             
 Institutional Securities           $10,553              $17,175          $(1,671)              $4,591               $14,955              $13,494          $2,731               $910         
                                                                                                                                                                                             
 Global Wealth Management           $13,516              $13,289          $1,600                $1,255               $13,516              $13,289          $1,600               $1,255       
                                                                                                                                                                                             
 Asset Management                   $2,219               $1,887           $590                  $253                 $2,219               $1,887           $590                 $253         
                                                                                                                                                                                             


(1) Institutional Securities net revenues and pre-tax income for FY 2012 and FY
2011 exclude positive (negative) revenue from DVA of $(4,402) million and $3,681
million, respectively. 

INSTITUTIONAL SECURITIES

Institutional Securities reported a pre-tax loss from continuing operations of
$1.7 billion compared with pre-tax income of $4.6 billion in 2011. Net revenues
for the current year were $10.6 billion compared with $17.2 billion, inclusive
of MBIA, a year ago. DVA resulted in negative revenue of $4.4 billion in the
current year compared with positive revenue of $3.7 billion a year ago.
Excluding DVA, net revenues for the current year were $15.0 billion compared
with $13.5 billion a year ago. Compensation expense was $6.7 billion compared
with $7.2 billion a year ago. Non-compensation expenses of $5.6 billion
increased from $5.4 billion a year ago primarily due to increased litigation
costs. 

GLOBAL WEALTH MANAGEMENT GROUP

Global Wealth Management Group reported pre-tax income from continuing
operations of $1.6 billion compared with $1.3 billion a year ago. Net revenues
for the current year were $13.5 billion compared with $13.3 billion a year ago.
The year`s pre-tax margin was 12%.9 Income after the noncontrolling interest
allocation to Citi and before taxes was $1.3 billion.12 Compensation expense was
$8.1 billion compared with $8.3 billion a year ago. Non-compensation expenses of
$3.8 billion increased from $3.7 billion a year ago reflecting non-recurring
costs of approximately $176 million primarily associated with the MSWM
integration. 

ASSET MANAGEMENT

Asset Management reported pre-tax income from continuing operations of $590
million compared with $253 million a year ago.14 The year`s reported pre-tax
margin was 27%.9 Income after the noncontrolling interest allocation and before
taxes was $403 million. Net revenues of $2.2 billion increased from $1.9 billion
a year ago primarily reflecting higher results in the Traditional Asset
Management business and gains on principal investments in the Merchant Banking
and Real Estate Investing businesses.15 Compensation expense of $841 million and
non-compensation expenses of $788 million were essentially unchanged from a year
ago. 

CAPITAL

Morgan Stanley`s Tier 1 capital ratio under Basel I was approximately 17.9% and
Tier 1 common ratio was approximately 14.7% at December 31, 2012.17

At December 31, 2012, book value and tangible book value per common share were
$30.65 and $26.81,18 respectively, based on approximately 2.0 billion shares
outstanding. 

OTHER MATTERS

The effective tax rate from continuing operations for the current quarter was
11.1%. The current quarter includes a net tax benefit of approximately $155
million consisting of a discrete benefit from remeasurement of reserves and an
out of period tax provision to adjust previously recorded deferred tax assets.6

The Firm declared a $0.05 quarterly dividend per common share. The dividend is
payable on February 15, 2013 to common shareholders of record on February 5,
2013. 

Morgan Stanley is a leading global financial services firm providing a wide
range of investment banking, securities, investment management and wealth
management services. The Firm`s employees serve clients worldwide including
corporations, governments, institutions and individuals from more than 1,200
offices in 43 countries. For further information about Morgan Stanley, please
visit www.morganstanley.com. 

A financial summary follows. Financial, statistical and business-related
information, as well as information regarding business and segment trends, is
included in the Financial Supplement. Both the earnings release and the
Financial Supplement are available online in the Investor Relations section at
www.morganstanley.com. 

# # # 

(See Attached Schedules) 

The information above contains forward-looking statements. Readers are cautioned
not to place undue reliance on forward-looking statements, which speak only as
of the date on which they are made and which reflect management's current
estimates, projections, expectations or beliefs and which are subject to risks
and uncertainties that may cause actual results to differ materially. For a
discussion of additional risks and uncertainties that may affect the future
results of the Company, please see "Forward-Looking Statements" immediately
preceding Part I, Item 1, "Competition" and "Supervision and Regulation" in Part
I, Item 1, "Risk Factors" in Part I, Item 1A, "Legal Proceedings" in Part I,
Item 3, "Management`s Discussion and Analysis of Financial Condition and Results
of Operations" in Part II, Item 7 and "Quantitative and Qualitative Disclosures
about Market Risk" in Part II, Item 7A, each of the Company's Annual Report on
Form 10-K for the year ended December 31, 2011 and other items throughout the
Form 10-K, the Company`s Quarterly Reports on Form 10-Q, including "Risk
Factors" in Part II, Item 1A therein, and the Company`s Current Reports on Form
8-K, including any amendments thereto. 

1 Represents the change in the fair value of certain of Morgan Stanley`s
long-term and short-term borrowings resulting from fluctuations in its credit
spreads and other credit factors (commonly referred to as "DVA"). 

2 From time to time, Morgan Stanley may disclose certain "non-GAAP financial
measures" in the course of its earnings releases, earnings conference calls,
financial presentations and otherwise. For these purposes, "GAAP" refers to
generally accepted accounting principles in the United States. The Securities
and Exchange Commission (SEC) defines a "non-GAAP financial measure" as a
numerical measure of historical or future financial performance, financial
positions, or cash flows that is subject to adjustments that effectively
exclude, or include amounts from the most directly comparable measure calculated
and presented in accordance with GAAP. Non-GAAP financial measures disclosed by
Morgan Stanley are provided as additional information to investors in order to
provide them with greater transparency about, or an alternative method for
assessing our financial condition and operating results. These measures are not
in accordance with, or a substitute for, GAAP, and may be different from or
inconsistent with non-GAAP financial measures used by other companies. Whenever
we refer to a non-GAAP financial measure, we will also generally present the
most directly comparable financial measure calculated and presented in
accordance with GAAP, along with a reconciliation of the differences between the
non-GAAP financial measure we reference with such comparable GAAP financial
measure. 

3 Income (loss) per diluted share amounts, excluding DVA, are non-GAAP financial
measures that the Firm considers useful for investors to allow better
comparability of period to period operating performance. Such exclusions are
provided to differentiate revenues associated with Morgan Stanley borrowings,
regardless of whether the impact is either positive, or negative, that result
solely from fluctuations in credit spreads and other credit factors. The
reconciliation of income (loss) per diluted share from continuing operations
applicable to Morgan Stanley common shareholders and average diluted shares from
a non-GAAP to GAAP basis is as follows (shares and DVA are presented in
millions):

                                                                                                                    
                                                                    4Q 2012      4Q 2011      FY 2012      FY 2011  
 Income (loss) per diluted share applicable to MS - Non-GAAP        $0.45        $(0.20)      $1.59        $(0.08)  
 DVA impact                                                         $(0.17)      $0.07        $(1.62)      $1.34    
 Income (loss) per diluted share applicable to MS - GAAP            $0.28        $(0.13)      $(0.03)      $1.26    
                                                                                                                    
 Average diluted shares - Non-GAAP                                  1,937        1,850        1,919        1,655    
 DVA impact                                                         0            0            (33)         20       
 Average diluted shares - GAAP                                      1,937        1,850        1,886        1,675    
                                                                                                                    


4 Source: Thomson Reuters - for the period of January 1, 2012 to December 31,
2012 as of January 3, 2013. 

5 Includes preferred dividends and other adjustments related to the calculation
of earnings per share for the fourth quarter of 2012 and 2011 of approximately
$26 million and $25 million, respectively. Includes preferred dividends and
other adjustments related to the calculation of earnings per share for the year
ended 2012 and 2011 of approximately $98 million and $2.0 billion, respectively.
Refer to page 3 of Morgan Stanley`s Financial Supplement accompanying this
release for the calculation of earnings per share. 

6 For the quarter ended December 31, 2012, the Firm recognized, in income from
continuing operations, a net tax benefit of approximately $155 million. This
included a discrete benefit of approximately $299 million related to the
remeasurement of reserves due to either the expiration of the applicable statute
of limitations, or new information regarding the status of certain Internal
Revenue Service examinations. The Firm also recognized, in the quarter ended
December 31, 2012, an out of period net tax provision of approximately $144
million, principally in the Asset Management business segment, primarily related
to the overstatement of deferred tax assets associated with partnership
investments in prior periods. For the full year ended December 31, 2012, the
Firm recognized, in income from continuing operations, the discrete tax benefit
noted above and an out of period net tax provision of approximately $226 million
to adjust previously recorded deferred tax assets. The Firm has evaluated the
effects of the understatement of the income tax provision both qualitatively and
quantitatively and concluded that it did not have a material impact on any prior
annual or quarterly consolidated results. A comprehensive review of the Firm`s
deferred tax accounts continues, and as such, the net tax provisions noted above
could be subject to revision. 

7 Income (loss) applicable to Morgan Stanley, excluding DVA, is a non-GAAP
financial measure that the Firm considers useful for investors to allow for
better comparability of period-to-period operating performance. The
reconciliation of income (loss) from continuing operations applicable to Morgan
Stanley from a non-GAAP to GAAP basis is as follows (amounts are presented in
millions):

                                                                                                                 
                                                  4Q 2012      3Q 2012       4Q 2011      FY 2012       FY 2011  
 Income (loss) applicable to MS - Non-GAAP        $894         $560          $(349)       $3,166        $1,886   
 DVA after-tax impact                             $(321)       $(1,568)      $127         $(3,118)      $2,275   
 Income (loss) applicable to MS - GAAP            $573         $(1,008)      $(222)       $48           $4,161   
                                                                                                                 


8 Discontinued operations for the current year primarily reflected an after-tax
gain and other operating income related to Quilter Holdings Ltd. (reported in
the Global Wealth Management business segment), and an after-tax loss and
operating results related to Saxon (reported in the Institutional Securities
business segment), which includes the fourth quarter provision of approximately
$115 million related to a settlement with the Federal Reserve Board concerning
the independent foreclosure review related to Saxon. The independent foreclosure
review was one of the requirements imposed by the April 2, 2012 Consent Order
that the Firm entered into with the Federal Reserve Board. The other
requirements of the Consent Order are not impacted by the settlement and the
settlement does not include civil money penalties which may be imposed by the
Federal Reserve Board. 

9 Pre-tax margin is a non-GAAP financial measure that the Firm considers useful
for investors to assess operating performance. Pre-tax margin represents income
(loss) from continuing operations before taxes, divided by net revenues. 

10 Sales and trading net revenues, including Fixed Income & Commodities (FIC)
and Equity sales and trading net revenues excluding DVA, are non-GAAP financial
measures that the Firm considers useful for investors to allow better
comparability of period-to-period operating performance. The reconciliation of
sales and trading, including FIC and Equity sales and trading net revenues from
a non-GAAP to GAAP basis is as follows (amounts are presented in millions):

                                                                                           
                                          4Q 2012      4Q 2011      FY 2012       FY 2011  
 Sales & Trading - Non-GAAP               $2,047       $867         $10,612       $9,268   
 DVA impact                               $(511)       $216         $(4,402)      $3,681   
 Sales & Trading - GAAP                   $1,536       $1,083       $6,210        $12,949  
                                                                                           
 FIC Sales & Trading - Non-GAAP           $811         $(493)       $5,631        $4,444   
 DVA impact                               $(330)       $239         $(3,273)      $3,062   
 FIC Sales & Trading - GAAP               $481         $(254)       $2,358        $7,506   
                                                                                           
 Equity Sales & Trading - Non-GAAP        $1,271       $1,277       $5,477        $6,151   
 DVA impact                               $(181)       $(23)        $(1,130)      $619     
 Equity Sales & Trading - GAAP            $1,090       $1,254       $4,347        $6,770   
                                                                                           


11 VaR represents the loss amount that one would not expect to exceed, on
average, more than five times every one hundred trading days in the Firm's
trading positions if the portfolio were held constant for a one-day period.
Further discussion of the calculation of VaR and the limitations of the Firm's
VaR methodology will be disclosed in Part II, Item 7A "Quantitative and
Qualitative Disclosures about Market Risk" included in Morgan Stanley`s Annual
Report on Form 10-K for the year ended December 31, 2012. Refer to page 8 of
Morgan Stanley`s Financial Supplement accompanying this release for the VaR
disclosure. 

12 During the quarter ended September 30, 2012, Morgan Stanley completed the
purchase of an additional 14% stake in the Joint Venture from Citi, increasing
the Firm`s interest from 51% to 65%. Prior to September 17, 2012, Citi`s results
related to its 49% interest were reported in net income (loss) applicable to
nonredeemable noncontrolling interests on page 10 of Morgan Stanley`s Financial
Supplement accompanying this release. Due to the terms of the revised agreement
with Citi, subsequent to the purchase of the additional 14% stake, Citi`s
results related to the 35% interest are reported in net income (loss) applicable
to redeemable noncontrolling interests on page 10 of Morgan Stanley`s Financial
Supplement accompanying this release. 

13 Transactional revenues include investment banking, principal transactions -
trading and commissions and fee revenues. 

14 Results for the fourth quarter of 2012 and 2011 included pre-tax income of
$49 million and $44 million, respectively, related to principal investments held
by certain consolidated real estate funds. Results for the full year ended 2012
and 2011 included pre-tax income of $185 million and $145 million, respectively,
related to principal investments held by certain consolidated real estate funds.
The limited partnership interests in these funds are reported in net income
(loss) applicable to noncontrolling interests on page 12 of Morgan Stanley`s
Financial Supplement accompanying this release. 

15 Results for the current quarter included gains of $50 million compared with
gains of $45 million in the prior year quarter related to principal investments
held by certain consolidated real estate funds. Results for the current year
included gains of $192 million compared with gains of $169 million in the prior
year related to principal investments held by certain consolidated real estate
funds. 

16 Morgan Stanley executed several key strategic actions in 2011 which affected
earnings including the conversion of the Firm`s Series B Preferred Stock held by
MUFG into common stock which resulted in a negative adjustment to earnings per
share of approximately $1.7 billion, a pre-tax loss of approximately $1.7
billion related to MBIA and the restructuring of the sale of Revel Entertainment
Group, LLC (Revel) which resulted in a discrete net tax benefit of $447 million.
Also impacting the Firm`s 2011 earnings was a pre-tax loss of approximately $783
million arising from the Firm`s 40% stake in a Japanese securities joint venture
(Mitsubishi UFJ Morgan Stanley Securities Co., Ltd. or MUMSS) controlled and
managed by our partner, MUFG. 

17 The Firm calculates its Tier 1 capital ratio and risk-weighted assets in
accordance with the capital adequacy standards for financial holding companies
adopted by the Federal Reserve Board. These standards are based upon a framework
described in the International Convergence of Capital Measurement and Capital
Standards, July 1988, as amended, also referred to as Basel I. In accordance
with the Federal Reserve Board`s definition, Tier 1 common capital is defined as
Tier 1 capital less non-common elements in Tier 1 capital, including perpetual
preferred stock and related surplus, minority interest in subsidiaries, trust
preferred securities and mandatory convertible preferred securities. These
computations are preliminary estimates as of January 18, 2013 (the date of this
release) and could be subject to revision in Morgan Stanley`s Annual Report on
Form 10-K for the year ended December 31, 2012. 

18 Tangible common equity and tangible book value per common share are non-GAAP
financial measures that the Firm considers to be useful measures of capital
adequacy. Tangible common equity equals common equity less goodwill and
intangible assets net of allowable mortgage servicing rights deduction and
includes only the Firm`s share of the Joint Venture`s goodwill and intangible
assets. Tangible book value per common share equals tangible common equity
divided by period end common shares outstanding.

 MORGAN STANLEY                                                                                                                                                                                                                                                                  
 Quarterly Financial Summary                                                                                                                                                                                                                                                     
 (unaudited, dollars in millions)                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                 
                                                                         Quarter Ended                                                                 Percentage Change From:                          Twelve Months Ended                                    Percentage        
                                                                         Dec 31, 2012             Sept 30, 2012             Dec 31, 2011               Sept 30, 2012            Dec 31, 2011            Dec 31, 2012               Dec 31, 2011                Change            
 Net revenues                                                                                                                                                                                                                                                                    
 Institutional Securities                                                $      2,951             $      1,367              $      2,068               116      %               43       %              $      10,553              $      17,175               (39     %)        
 Global Wealth Management Group                                                 3,461                    3,336                     3,219               4        %               8        %                     13,516                     13,289               2       %         
 Asset Management                                                               599                      631                       424                 (5       %)              41       %                     2,219                      1,887                18      %         
 Intersegment Eliminations                                                      (45    )                 (54     )                 (36    )            17       %               (25      %)                    (176    )                  (115    )            (53     %)        
 Consolidated net revenues                                               $      6,966             $      5,280              $      5,675               32       %               23       %              $      26,112              $      32,236               (19     %)        
                                                                                                                                                                                                                                                                                 
 Income (loss) from continuing operations before tax                                                                                                                                                                                                                             
 Institutional Securities                                                $      57                $      (1,920  )          $      (772   )            *                        *                       $      (1,671  )           $      4,591                *                 
 Global Wealth Management Group                                                 581                      239                       238                 143      %               144      %                     1,600                      1,255                27      %         
 Asset Management                                                               221                      198                       78                  12       %               183      %                     590                        253                  133     %         
 Intersegment Eliminations                                                      0                        0                         0                   --                       --                             (4      )                  0                    *                 
 Consolidated income (loss) from continuing operations before tax        $      859               $      (1,483  )          $      (456   )            *                        *                       $      515                 $      6,099                (92     %)        
                                                                                                                                                                                                                                                                                 
 Income (loss) applicable to Morgan Stanley                                                                                                                                                                                                                                      
 Institutional Securities                                                $      353               $      (1,269  )          $      (359   )            *                        *                       $      (833    )           $      3,468                *                 
 Global Wealth Management Group                                                 277                      157                       131                 76       %               111      %                     799                        658                  21      %         
 Asset Management                                                               (57    )                 104                       6                   *                        *                              86                         35                   146     %         
 Intersegment Eliminations                                                      0                        0                         0                   --                       --                             (4      )                  0                    *                 
 Consolidated income (loss) applicable to Morgan Stanley                 $      573               $      (1,008  )          $      (222   )            *                        *                       $      48                  $      4,161                (99     %)        
 Earnings (loss) applicable to Morgan Stanley common shareholders        $      481               $      (1,047  )          $      (275   )            *                        *                       $      (117    )           $      2,067                *                 
                                                                                                                                                                                                                                                                                 
 Earnings per basic share:                                                                                                                                                                                                                                                       
 Income from continuing operations                                       $      0.29              $      (0.55   )          $      (0.13  )            *                        *                       $      (0.03   )           $      1.28                 *                 
 Discontinued operations                                                 $      (0.04  )          $      -                  $      (0.02  )            *                        (100     %)             $      (0.03   )           $      (0.03   )            --                
 Earnings per basic share                                                $      0.25              $      (0.55   )          $      (0.15  )            *                        *                       $      (0.06   )           $      1.25                 *                 
                                                                                                                                                                                                                                                                                 
 Earnings per diluted share:                                                                                                                                                                                                                                                     
 Income from continuing operations                                       $      0.28              $      (0.55   )          $      (0.13  )            *                        *                       $      (0.03   )           $      1.26                 *                 
 Discontinued operations                                                 $      (0.03  )          $      -                  $      (0.02  )            *                        (50      %)             $      (0.03   )           $      (0.03   )            --                
 Earnings per diluted share                                              $      0.25              $      (0.55   )          $      (0.15  )            *                        *                       $      (0.06   )           $      1.23                 *                 
                                                                                                                                                                                                                                                                                 
 Financial Metrics:                                                                                                                                                                                                                                                              
 Return on average common equity from continuing operations                                                                                                                                                                                                                      
                                                                                3.6    %          *                         *                                                                           *                                 3.9     %                              
 Return on average common equity                                                3.2    %          *                         *                                                                           *                                 3.8     %                              
                                                                                                                                                                                                                                                                                 
 Tier 1 common capital ratio                                                    14.7   %                 13.9    %                 12.6   %                                                                                                                                      
 Tier 1 capital ratio                                                           17.9   %                 16.9    %                 16.2   %                                                                                                                                      
                                                                                                                                                                                                                                                                                 
 Book value per common share                                             $      30.65             $      30.53              $      31.42                                                                                                                                         
 Tangible book value per common share                                    $      26.81             $      26.65              $      27.95                                                                                                                                         


 _____________________________________                                                                                
 Notes:    -    Results for the quarters ended December 31, 2012, September 30, 2012 and December 31, 2011, include   
                positive (negative) revenue of $(511) million, $(2,262) million and $216 million, respectively,       
                related to the movement in Morgan Stanley's credit spreads and other credit factors on certain long   
                -term and short-term debt (Debt Valuation Adjustment, DVA). The twelve months ended December 31, 2012 
                and December 31, 2011 include positive (negative) revenue of $(4,402) million and $3,681 million,     
                respectively, related to the movement in DVA.                                                         
                
                
           -    Income (loss) applicable to Morgan Stanley represents income (loss) from continuing operations,       
                adjusted for the portion of net income (loss) applicable to noncontrolling interests related to       
                continuing operations. For the quarters ended December 31, 2012, September 30, 2012 and December 31,  
                2011 net income (loss) applicable to noncontrolling interests include $3 million, $17 million, and $2 
                million respectively, reported as a gain in discontinued operations. The twelve months ended December 
                31, 2012 and December 31, 2011 net income (loss) applicable to noncontrolling interests include $29   
                million and $7 million respectively, reported as a gain in discontinued operations.                   
                
                
           -    Tier 1 common capital ratio equals Tier 1 common equity divided by Risk Weighted Assets (RWA).        
           -    Tier 1 capital ratio equals Tier 1 capital divided by RWA.                                            
           -    Book value per common share equals common equity divided by period end common shares outstanding.     
           -    Tangible book value per common share equals tangible common equity divided by period end common shares 
                outstanding.                                                                                          
           -    The return on average common equity and tangible book value per common share are non-GAAP measures    
                that the Firm considers to be a useful measure that the Firm and investors use to assess operating    
                performance and capital adequacy.                                                                     
           -    See page 4 of the financial supplement for additional information related to the calculation of the   
                financial metrics.                                                                                    
                                                                                                                      
                11                                                                                                    


                                                                                                                                                                                                                                                                                 
 MORGAN STANLEY                                                                                                                                                                                                                                                                  
 Quarterly Consolidated Income Statement Information                                                                                                                                                                                                                             
 (unaudited, dollars in millions)                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                 
                                                                                                                                                                                                                                                                                 
                                                                                 Quarter Ended                                                               Percentage Change From:                        Twelve Months Ended                                  Percentage      
                                                                                 Dec 31, 2012             Sept 30, 2012             Dec 31, 2011             Sept 30, 2012            Dec 31, 2011          Dec 31, 2012               Dec 31, 2011              Change          
 Revenues:                                                                                                                                                                                                                                                                       
 Investment banking                                                              $      1,439             $      1,152              $      1,051             25       %               37       %            $      4,758               $      4,991              (5      %)      
 Principal transactions:                                                                                                                                                                                                                                                         
 Trading                                                                                1,513                    607                       969               149      %               56       %                   6,991                      12,384             (44     %)      
 Investments                                                                            304                      290                       140               5        %               117      %                   742                        573                29      %       
 Commissions and fees                                                                   1,052                    988                       1,149             6        %               (8       %)                  4,257                      5,347              (20     %)      
 Asset management, distribution and admin. fees                                         2,331                    2,257                     2,004             3        %               16       %                   9,008                      8,410              7       %       
 Other                                                                                  152                      141                       92                8        %               65       %                   555                        175                *               
 Total non-interest revenues                                                            6,791                    5,435                     5,405             25       %               26       %                   26,311                     31,880             (17     %)      
                                                                                                                                                                                                                                                                                 
 Interest income                                                                        1,744                    1,379                     1,685             26       %               4        %                   5,988                      7,258              (17     %)      
 Interest expense                                                                       1,569                    1,534                     1,415             2        %               11       %                   6,187                      6,902              (10     %)      
 Net interest                                                                           175                      (155    )                 270               *                        (35      %)                  (199    )                  356                *               
 Net revenues                                                                           6,966                    5,280                     5,675             32       %               23       %                   26,112                     32,236             (19     %)      
 Non-interest expenses:                                                                                                                                                                                                                                                          
 Compensation and benefits                                                              3,633                    3,928                     3,792             (8       %)              (4       %)                  15,622                     16,333             (4      %)      
 Non-compensation expenses:                                                                                                                                                                                                                                                      
 Occupancy and equipment                                                                394                      386                       381               2        %               3        %                   1,546                      1,548              --              
 Brokerage, clearing and exchange fees                                                  369                      359                       379               3        %               (3       %)                  1,536                      1,633              (6      %)      
 Information processing and communications                                              474                      493                       471               (4       %)              1        %                   1,913                      1,811              6       %       
 Marketing and business development                                                     163                      138                       160               18       %               2        %                   602                        595                1       %       
 Professional services                                                                  558                      476                       487               17       %               15       %                   1,923                      1,794              7       %       
 Other                                                                                  516                      983                       461               (48      %)              12       %                   2,455                      2,423              1       %       
 Total non-compensation expenses                                                        2,474                    2,835                     2,339             (13      %)              6        %                   9,975                      9,804              2       %       
                                                                                                                                                                                                                                                                                 
 Total non-interest expenses                                                            6,107                    6,763                     6,131             (10      %)              --                           25,597                     26,137             (2      %)      
                                                                                                                                                                                                                                                                                 
 Income (loss) from continuing operations before taxes                                  859                      (1,483  )                 (456   )          *                        *                            515                        6,099              (92     %)      
 Income tax provision / (benefit) from continuing operations                            95                       (525    )                 (298   )          *                        *                            (152    )                  1,410              *               
 Income (loss) from continuing operations                                               764                      (958    )                 (158   )          *                        *                            667                        4,689              (86     %)      
 Gain (loss) from discontinued operations after tax                                     (63    )                 2                         (26    )          *                        (142     %)                  (38     )                  (44     )          14      %       
 Net income (loss)                                                               $      701               $      (956    )          $      (184   )          *                        *                     $      629                 $      4,645              (86     %)      
 Net income applicable to redeemable noncontrolling interests                           116                      8                         0                 *                        *                            124                        0                  *               
 Net income applicable to nonredeemable noncontrolling interests                        78                       59                        66                32       %               18       %                   524                        535                (2      %)      
 Net income (loss) applicable to Morgan Stanley                                         507                      (1,023  )                 (250   )          *                        *                            (19     )                  4,110              *               
 Preferred stock dividend / Other                                                       26                       24                        25                8        %               4        %                   98                         2,043              (95     %)      
 Earnings (loss) applicable to Morgan Stanley common shareholders                $      481               $      (1,047  )          $      (275   )          *                        *                     $      (117    )           $      2,067              *               
                                                                                                                                                                                                                                                                                 
 Amounts applicable to Morgan Stanley:                                                                                                                                                                                                                                           
 Income (loss) from continuing operations                                               573                      (1,008  )                 (222   )          *                        *                            48                         4,161              (99     %)      
 Gain (loss) from discontinued operations after tax                                     (66    )                 (15     )                 (28    )          *                        (136     %)                  (67     )                  (51     )          (31     %)      
 Net income (loss) applicable to Morgan Stanley                                  $      507               $      (1,023  )          $      (250   )          *                        *                     $      (19     )           $      4,110              *               
                                                                                                                                                                                                                                                                                 
 Pre-tax profit margin                                                                  12     %          *                         *                                                                              2       %                  19      %                          
 Compensation and benefits as a % of net revenues                                       52     %                 74      %                 67     %                                                                60      %                  51      %                          
 Non-compensation expenses as a % of net revenues                                       36     %                 54      %                 41     %                                                                38      %                  30      %                          
 Effective tax rate from continuing operations                                          11.1   %                 35.4    %                 65.4   %                                                         *                                 23.1    %                          


 _____________________________________                                                                                
 Notes:    -    Pre-tax profit margin is a non-GAAP financial measure that the Firm considers to be a useful measure  
                that the Firm and investors use to assess operating performance. Percentages represent income from    
                continuing operations before income taxes as a percentage of net revenues.                            
                
           -    The quarter and full year ended December 31, 2011, Principal Transactions - Trading included a loss of 
                $1,742 million related to the comprehensive settlement with MBIA Insurance Corporation (MBIA).        
           -    Other revenues for the full year ended December 31, 2011, included a loss of approximately $783       
                million related to the 40% stake in a Japanese securities joint venture, Mitsubishi UFJ Morgan Stanley 
                Securities Co., Ltd. ("MUMSS") controlled and managed by our partner, Mitsubishi UFJ Financial Group  
                Inc. (MUFG).                                                                                          
                
           -    In the quarter ended December 31, 2012, discontinued operations included the provision of $115 million 
                related to a settlement with the Federal Reserve Board concerning the independent foreclosure review  
                related to Saxon. For the full year ended December 31, 2012, discontinued operations primarily        
                reflected an after-tax gain and other operating income related to Quilter Holdings Ltd. (reported in  
                the Global Wealth Management business segment), and an after-tax loss and operating results related to 
                Saxon (reported in the Institutional Securities business segment), which includes the provision       
                related to a settlement with the Federal Reserve Board concerning Saxon.                              
                
           -    For the quarter ended December 31, 2012, the effective tax rate from continuing operations was 11.1%. 
                The current quarter includes a net tax benefit of approximately $155 million consisting of a discrete 
                benefit from remeasurement of reserves and an out of period tax provision to adjust previously        
                recorded deferred tax assets.                                                                         
                
           -    During the quarter ended September 30, 2012, Morgan Stanley completed the purchase of an additional   
                14% stake in Morgan Stanley Smith Barney (Joint Venture) from Citigroup Inc. (Citi), increasing the   
                Firm`s interest from 51% to 65%. Prior to September 17, 2012, Citi`s results related to its 49%       
                interest were reported in net income (loss) applicable to nonredeemable noncontrolling interests. Due 
                to the terms of the revised agreement with Citi, subsequent to the purchase of the additional 14%     
                stake, Citi`s results related to the 35% interest are reported in net income (loss) applicable to     
                redeemable noncontrolling interests.                                                                  
                
                
                
           -    The portion of net income attributable to noncontrolling interests for consolidated entities is       
                presented as either net income (loss) applicable to redeemable noncontrolling interests or net income 
                (loss) applicable to nonredeemable noncontrolling interests.                                          
                
           -    The full year ended December 31, 2011, preferred stock dividend/other included a one-time negative    
                adjustment of approximately $1.7 billion related to the conversion of Series B Non-Cumulative Non     
                -Voting Perpetual Convertible Preferred Stock held by MUFG, into Morgan Stanley common stock (MUFG    
                conversion).                                                                                          
                
           -    Preferred stock dividend / other includes allocation of earnings to Participating Restricted Stock    
                Units (RSUs).                                                                                         
                                                                                                                      
                12                                                                                                    


                                                                                                                                                                                                                                                                                                                                        
 MORGAN STANLEY                                                                                                                                                                                                                                                                                                                         
 Quarterly Earnings Per Share                                                                                                                                                                                                                                                                                                           
 (unaudited, dollars in millions, except for per share data)                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                            Quarter Ended                                                               Percentage Change From:                        Twelve Months Ended                              Percentage      
                                                                                                                                            Dec 31, 2012             Sept 30, 2012             Dec 31, 2011             Sept 30, 2012            Dec 31, 2011          Dec 31, 2012              Dec 31, 2011           Change          
                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                        
 Income (loss) from continuing operations                                                                                                   $      764               $      (958    )          $      (158   )          *                        *                     $      667                $      4,689           (86     %)      
 Net income applicable to redeemable noncontrolling interests                                                                                      116                      8                         0                 *                        *                            124                       0               *               
 Net income applicable to nonredeemable noncontrolling interests                                                                                   75                       42                        64                79       %               17       %                   495                       528             (6      %)      
 Net income (loss) from continuing operations applicable to noncontrolling interest                                                                191                      50                        64                *                        198      %                   619                       528             17      %       
 Income (loss) from continuing operations applicable to Morgan Stanley                                                                             573                      (1,008  )                 (222   )          *                        *                            48                        4,161           (99     %)      
 Less: Preferred Dividends                                                                                                                         24                       24                        24                --                       --                           96                        292             (67     %)      
 Less: MUFG preferred stock conversion                                                                                                             -                        -                         -                 --                       --                           -                         1,726           *               
 Income from continuing operations applicable to Morgan Stanley, prior to allocation of income to Participating Restricted Stock Units             549                      (1,032  )                 (246   )          *                        *                            (48    )                  2,143           *               
                                                                                                                                                                                                                                                                                                                                        
 Basic EPS Adjustments:                                                                                                                                                                                                                                                                                                                 
 Less: Allocation of earnings to Participating Restricted Stock Units                                                                              2                        0                         1                 *                        100      %                   2                         26              (92     %)      
 Earnings (loss) from continuing operations applicable to Morgan Stanley common shareholders                                                $      547               $      (1,032  )          $      (247   )          *                        *                     $      (50    )           $      2,117           *               
                                                                                                                                                                                                                                                                                                                                        
 Gain (loss) from discontinued operations after tax                                                                                                (63    )                 2                         (26    )          *                        (142     %)                  (38    )                  (44    )        14      %       
 Less: Gain (loss) from discontinued operations after tax applicable to noncontrolling interests                                                   3                        17                        2                 (82      %)              50       %                   29                        7               *               
 Gain (loss) from discontinued operations after tax applicable to Morgan Stanley                                                                   (66    )                 (15     )                 (28    )          *                        (136     %)                  (67    )                  (51    )        (31     %)      
 Less: Allocation of earnings to Participating Restricted Stock Units                                                                              0                        0                         0                 --                       --                           0                         (1     )        *               
 Earnings (loss) from discontinued operations applicable to Morgan Stanley common shareholders                                                     (66    )                 (15     )                 (28    )          *                        (136     %)                  (67    )                  (50    )        (34     %)      
                                                                                                                                                                                                                                                                                                                                        
 Earnings (loss) applicable to Morgan Stanley common shareholders                                                                           $      481               $      (1,047  )          $      (275   )          *                        *                     $      (117   )           $      2,067           *               
                                                                                                                                                                                                                                                                                                                                        
 Average basic common shares outstanding (millions)                                                                                                1,892                    1,889                     1,850             --                       2        %                   1,886                     1,655           14      %       
                                                                                                                                                                                                                                                                                                                                        
 Earnings per basic share:                                                                                                                                                                                                                                                                                                              
 Income from continuing operations                                                                                                          $      0.29              $      (0.55   )          $      (0.13  )          *                        *                     $      (0.03  )           $      1.28            *               
 Discontinued operations                                                                                                                    $      (0.04  )          $      -                  $      (0.02  )          *                        (100     %)           $      (0.03  )           $      (0.03  )        --              
 Earnings per basic share                                                                                                                   $      0.25              $      (0.55   )          $      (0.15  )          *                        *                     $      (0.06  )           $      1.25            *               
                                                                                                                                                                                                                                                                                                                                        
 Earnings (loss) from continuing operations applicable to Morgan Stanley common shareholders                                                $      547               $      (1,032  )          $      (247   )          *                        *                     $      (50    )           $      2,117           *               
                                                                                                                                                                                                                                                                                                                                        
 Diluted EPS Adjustments:                                                                                                                                                                                                                                                                                                               
 Earnings (loss) from continuing operations applicable to Morgan Stanley common shareholders                                                $      547               $      (1,032  )          $      (247   )          *                        *                     $      (50    )           $      2,117           *               
                                                                                                                                                                                                                                                                                                                                        
 Earnings (loss) from discontinued operations applicable to Morgan Stanley common shareholders                                                     (66    )                 (15     )                 (28    )          *                        (136     %)                  (67    )                  (50    )        (34     %)      
                                                                                                                                                                                                                                                                                                                                        
 Earnings (loss) applicable to Morgan Stanley common shareholders                                                                           $      481               $      (1,047  )          $      (275   )          *                        *                     $      (117   )           $      2,067           *               
                                                                                                                                                                                                                                                                                                                                        
 Average diluted common shares outstanding and common stock equivalents (millions)                                                                 1,937                    1,889                     1,850             3        %               5        %                   1,886                     1,675           13      %       
                                                                                                                                                                                                                                                                                                                                        
 Earnings per diluted share:                                                                                                                                                                                                                                                                                                            
 Income from continuing operations                                                                                                          $      0.28              $      (0.55   )          $      (0.13  )          *                        *                     $      (0.03  )           $      1.26            *               
 Discontinued operations                                                                                                                    $      (0.03  )          $      -                  $      (0.02  )          *                        (50      %)           $      (0.03  )           $      (0.03  )        --              
 Earnings per diluted share                                                                                                                 $      0.25              $      (0.55   )          $      (0.15  )          *                        *                     $      (0.06  )           $      1.23            *               


 _____________________________________                                                                                                                                                                                                                                                                                                                                                                         
 Notes:    -    The portion of net income attributable to noncontrolling interests for consolidated entities is presented as either net income (loss) applicable to redeemable noncontrolling interests or net income (loss) applicable to nonredeemable noncontrolling interests.                                                                                                                             
           -    The Firm calculates earnings per share using the two-class method as described under the accounting guidance for earnings per share. For further discussion of the Firm's earnings per share calculations, see pages 15 and 16 of the financial supplement and Note 2 to the consolidated financial statements in the Firm's Annual Report on Form 10-K for the year ended December 31, 2011.  
                
                                                                                                                                                                                                                                                                                                                                                                                                               
                13                                                                                                                                                                                                                                                                                                                                                                                             


Morgan Stanley
Media Relations:
Jeanmarie McFadden, 212-761-2433
or
Investor Relations:
Celeste Mellet Brown, 212-761-3896 

Copyright Business Wire 2013

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