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Morgan Stanley Reports Second Quarter Results
Net Revenues of $5.4 Billion Reflect a Reduction of $2.3 Billion Due to Continued
Improvement in Morgan Stanley’s Debt-Related Credit Spreads
Net Loss from Continuing Operations Applicable to Morgan Stanley of $1.37 per
Diluted Share Includes Negative Adjustments of $1.32 from Improvement in Morgan
Stanley’s Debt-Related Credit Spreads and $0.74 from Repurchase of TARP Capital
Delivered Strong Results in Investment Grade and Distressed Debt Trading andInvestment Banking, Where Morgan Stanley Ranked #1 in Global Announced M&A;
Achieved Solid Performance in Global Wealth Management
Made Important Progress on Strategic Initiatives to Drive Growth, Including Closing on
the Joint Venture with Smith Barney and Expanding Strategic Alliance with MUFG
Raised $6.9 Billion Through Common Stock Offerings, Further Bolstering the Firm’s
Common Equity Position

NEW YORK, July 22, 2009 – Morgan Stanley (NYSE: MS) today reported a loss from continuing
operations applicable to Morgan Stanley for the second quarter ended June 30, 2009 of $159 million,
or $1.37 per diluted share (reflective of preferred dividends and other adjustments),1 compared withincome from continuing operations applicable to Morgan Stanley of $689 million, or $0.61 per diluted
share, a year ago. Net revenues for the quarter were $5.4 billion, compared with $6.1 billion in lastyear’s second quarter. Non-interest expenses were $6.0 billion, compared with $5.2 billion a year ago.
Compensation expenses were $3.9 billion, compared with $3.1 billion a year ago. Non-compensation
expenses increased slightly from a year ago. Comparisons of current quarter results to prior periods
are impacted by the results of the Morgan Stanley Smith Barney joint venture (MSSB), which closed
on May 31, 2009.

Morgan Stanley’s results for the three months ended June 30, 2009 reflect a number of significant
items, including, among others:•

Negative revenue of $2.3 billion, or $1.32 per diluted share, related to the continued tightening of
Morgan Stanley’s credit spreads on certain of its long-term debt (MS debt-related credit spreads).2•

A negative adjustment of $0.74 per diluted share for the accelerated amortization of $850 million
related to the issuance discount on the Company’s Series D Preferred Stock resulting from therepurchase of capital issued under the Capital Purchase Program (TARP).

For the first six months of 2009, loss from continuing operations applicable to Morgan Stanley was$345 million, or $2.00 per diluted share, compared with income from continuing operations applicableto Morgan Stanley of $2,084 million, or $1.85 per diluted share, a year ago. Net revenues decreased
40 percent to $8.4 billion and non-interest expenses decreased 10 percent to $9.9 billion.

Net income for the quarter was $33 million, compared with $1,159 million in the second quarter of2008. Net income applicable to Morgan Stanley for the quarter was $149 million, or a loss of $1.10
per diluted share, compared with net income applicable to Morgan Stanley of $1,143 million, or $1.02
per diluted share, in the second quarter of 2008. Net loss for the first six months of 2009 was $157
million, compared with net income of $2,591 million a year ago.3 For the first six months of 2009, net
loss applicable to Morgan Stanley was $28 million, or $1.71 per diluted share, compared with net
income applicable to Morgan Stanley of $2,556 million, or $2.28 per diluted share a year ago.

Business Highlights•

Investment banking delivered strong results with underwriting revenues up 19 percent from lastyear’s second quarter. Morgan Stanley ranked #1 in global announced M&A.4•

Fixed income sales and trading net revenues of $1.0 billion reflect a loss of $1.3 billion related tothe tightening of MS debt-related credit spreads which was partly offset by strong results ininvestment grade and distressed debt trading.

•

Equity sales and trading net revenues of $0.7 billion reflect a loss of $0.8 billion related to thetightening of MS debt-related credit spreads. Results also reflect lower net revenues inderivatives and the cash businesses, including prime brokerage.

•

Morgan Stanley closed on its joint venture, MSSB, during the quarter – creating a new global
leader in wealth management with 18,444 global representatives and $1,420 billion in client
assets.

•Asset Management results reflect losses in the Merchant Banking business, primarily driven byreal estate, which were partly offset by profitable results in the Core business.52•Firm results reflect net losses on investments in real estate of $0.7 billion, amidst the industrywide decline in this market.6•

Morgan Stanley and Mitsubishi UFJ Financial Group, Inc. (MUFG) announced a series of
initiatives to further strengthen their strategic alliance, including the formation of a loan
marketing joint venture for the Americas and a referral agreement for commodities transactions
outside Japan.

John J. Mack, Chairman and CEO, said, "Morgan Stanley delivered improved performance across
many of our businesses this quarter – including in investment banking, where we were the #1 adviser
in global announced M&A, and saw strong gains in both equity and debt underwriting. We also
saw improvements from the prior quarter in prime brokerage, cash equities as well as in investment
grade and distressed debt trading; and we had solid results in wealth management. But we are notsatisfied with our performance in other key areas of fixed income trading and in asset
management, and we are taking steps to deliver better results in those businesses. These initiatives
include hiring to add key trading and investment management talent, expanding our client flowbusiness, increasing capital commitments in a disciplined way and rationalizing costs in targeted areas.

“This quarter we also saw continued improvement in our credit default spreads and were among thefirst banks to repurchase TARP capital – which are significant positive developments for the Firm, butnonetheless had a negative impact on our results. Morgan Stanley would have been solidly profitable
this quarter if not for these two positive developments. As we look to realize the full benefits of thestrategic initiatives we have been pursuing, we remain intensely focused on continuing to deliver
innovative solutions to our clients and long-term value to our shareholders.”

INSTITUTIONAL SECURITIESInstitutional Securities posted a pre-tax loss of $307 million, compared with pre-tax income of $844
million in the second quarter of last year. Net revenues were $3.0 billion, compared with $3.9 billion
a year ago.
•

Advisory revenues were $268 million, a decrease of 29 percent from last year’s second quarter,
reflecting lower levels of market activity.

•

Underwriting revenues of $855 million increased 19 percent from last year’s second quarter.
Equity underwriting revenues were $455 million, a decrease of 1 percent from a year ago. Fixed
income underwriting revenues increased 56 percent to $400 million from last year’s second
quarter reflecting higher levels of market activity.

3•

Fixed income sales and trading net revenues of $973 million increased 44 percent from a year
ago. Results for the quarter reflect losses of $1.3 billion from MS debt-related credit spreads
compared with losses of $0.1 billion in the prior year. These losses were more than offset byhigher revenues in interest rate, credit & currency products. Commodities results for the quarter
were also higher than a year ago.

•

Equity sales and trading net revenues were $681 million, compared with net revenues of $2,228
million in last year’s second quarter. Results for the quarter reflect losses of $0.8 billion from MS
debt-related credit spreads compared with losses of $0.2 billion in the prior year. In addition, net
revenues in derivatives and the cash businesses, including prime brokerage, declined primarily
from lower levels of client activity.

•

Other sales and trading net revenues reflect net mark-to-market gains of $0.6 billion on loans andlending commitments, largely related to acquisition financing to non-investment grade companies,
which were offset by losses of $0.2 billion related to the tightening of MS debt-related credit
spreads and losses of $0.4 billion in other hedging activities.2•

Investment losses were $0.2 billion compared with $0.1 billion in the second quarter of last year,
primarily reflecting losses on investments in real estate of $0.3 billion.

•

The Company’s average trading VaR measured at the 95 percent confidence level was $113
million compared with $100 million in the second quarter of 2008 and $115 million in the firstquarter of 2009. Average aggregate trading and non-trading VaR was $154 million, comparedwith $116 million in the second quarter of 2008 and $142 million in the first quarter of 2009.
Average aggregate trading and non-trading VaR increased from last quarter primarily reflecting
increased lending exposure and counterparty risk. At quarter-end, the Company’s trading VaR
was $114 million, compared with $107 million in the first quarter of 2009, and the aggregate
trading and non-trading VaR was $173 million, compared with $136 million in the prior quarter.

•

Non-interest expenses were $3.3 billion, an increase of 8 percent from the second quarter of lastyear. Compensation expenses were $2.1 billion, compared with $1.7 billion a year ago, reflecting
the Company’s current assessment of its full year compensation requirements and competitivemarket pressures. Non-compensation expenses of $1.2 billion decreased 16 percent from a year
ago, resulting from lower levels of business activity and the Company's initiatives to reduce costs.

GLOBAL WEALTH MANAGEMENT GROUP
Global Wealth Management Group posted a pre-tax loss of $71 million, compared with pre-tax
income of $272 million in the second quarter of last year. The current quarter includes one month ofoperating results for MSSB, which closed on May 31, 2009. The Company owns 51 percent of4

MSSB, which is fully consolidated. The results related to the 49 percent interest retained by Citigroup
Inc. (Citigroup) are reported in the net income / (loss) applicable to non-controlling interests on page 8of the Company’s financial supplement that accompanies this release. Global Wealth Management
Group recorded a net profit of $47 million after the non-controlling interest allocation to Citigroup andbefore taxes.
•

Net revenues were $1.9 billion, up 13 percent from a year ago as higher revenues related to MSSB
were partly offset by the impact of weaker market conditions.

•Non-interest expenses of $2.0 billion increased 40 percent from a year ago. The increaseprimarily reflected the operating results of MSSB and $245 million in integration costs, which
include a one-time expense of $124 million for replacement deferred compensation awards. The
cost of these replacement awards is fully allocated to Citigroup.7 Compensation expenses were$1.4 billion, which includes the cost of the replacement awards noted above, compared with $1.0
billion from a year ago. Non-compensation expenses were $0.6 billion, compared with $0.4
billion a year ago. The increase reflected the operating results and integration costs related to
MSSB as well as a charge of $25 million related to the FDIC special assessment on deposits
announced in May.

•

Total client assets were $1,420 billion at quarter-end. Client assets in fee-based accounts were$325 billion and represent 23 percent of total client assets.

•

The 18,444 global representatives at quarter-end achieved average annualized revenue per global
representative of $671,000 and total client assets per global representative of $77 million.

ASSET MANAGEMENT
Asset Management posted a pre-tax loss of $239 million, compared with a pre-tax loss of $232 million
in last year’s second quarter, as losses in the Merchant Banking business were partly offset byprofitable results in the Core business.5 Net revenues were $575 million, compared with $582 million
a year ago.
•

Net revenues in the Core business were $638 million, up from $610 million in the prior year.5
The increase in revenues was driven by gains of $128 million related to the disposition of theremaining securities issued by structured investment vehicles held on our balance sheet, comparedwith losses of $77 million a year ago, and higher principal investments revenues. These gains
were partly offset by lower management and administrative fees, primarily resulting from lower
assets under management.

•

Net revenues in the Merchant Banking business were negative $63 million, compared withnegative $28 million in last year’s second quarter. The decrease reflects higher losses in principal

5

trading related to a mark-to-market loss on a lending facility to a real estate fund sponsored by
Morgan Stanley and losses on other real estate investment related hedging activity. These losses
were partly offset by gains in principal investments in the private equity business and lower
principal investment losses in the real estate business. The current quarter includes operating
revenues associated with the Crescent real estate subsidiary.8•

Non-interest expenses were $0.8 billion, unchanged from a year ago. Compensation expenses of$0.4 billion decreased 8 percent from a year ago. Non-compensation expenses of $0.4 billion
increased 9 percent from a year ago, primarily reflecting operating costs associated with theCrescent real estate subsidiary.8•

Assets under management or supervision at June 30, 2009 were $361 billion, compared with $579
billion a year ago. The decline reflects net customer outflows of $121.5 billion since the second
quarter of last year, primarily in the Company’s money market and long-term fixed income funds.

OTHER MATTERS
The effective tax rate from continuing operations for the quarter was 53.8 percent, up from 21.7
percent a year ago. The increase in the rate primarily reflected the change in the geographic mix ofearnings and the anticipated use of domestic tax credits on a full year basis.

As of June 30, 2009, the Company’s Tier 1 capital ratio, under Basel I, is approximately 15.8 percent.

The Company announced that its Board of Directors declared a $0.05 quarterly dividend per commonshare. The dividend is payable on August 14, 2009 to common shareholders of record on July 31,
2009.

Total capital as of June 30, 2009 was $213.2 billion, including $57.3 billion of common equity,
preferred equity and junior subordinated debt issued to capital trusts. During the quarter, theCompany raised $6.9 billion in common equity and $5.5 billion in non-FDIC guaranteed senior debt,
and repurchased the $10 billion of capital issued under TARP. In addition to the impact of the TARP
capital repurchase on earnings per share, earnings per share for the three and six months ended June30, 2009 includes a negative adjustment of $202 million, or $0.17 per diluted share related to thepartial exchange of the Series C Preferred Stock issued to MUFG for common stock.

As of June 30, 2009, the Company has not repurchased any shares of its common stock during thisyear as part of its capital management share repurchase program and book value per common share

69

was $27.21, based on 1.4 billion shares outstanding. As a result of the Company’s equity offerings,
period end and average common shares outstanding increased by approximately 276 million and 123
million shares, respectively.

Morgan Stanley is a leading global financial services firm providing a wide range of investmentbanking, securities, investment management and wealth management services. The Firm's employees
serve clients worldwide including corporations, governments, institutions and individuals from morethan 1,200 offices in 37 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 theearnings release and the Financial Supplement are available online in the Investor Relations section atwww.morganstanley.com.

###(See Attached Schedules)

The information above contains forward-looking statements including statements related toprojected cost savings. 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 torisks 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 of the Company's Annual Report on Form 10-K for the fiscal
year ended November 30, 2008 and other items throughout the Form 10-K and the Company's
Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

7

1

Includes a negative adjustment of $850 million related to the accelerated amortization of the issuance discounton the Company’s Series D Preferred Stock, a negative adjustment of $202 million related to the partial
exchange of the Company’s Series C Preferred Stock issued to MUFG for common stock and other preferred
dividends and related adjustments of $353 million. Collectively, these amounts reduced earnings per diluted
common share by approximately $1.22.
2

Improvement in Morgan Stanley’s debt-related credit spreads negatively impacted fixed income sales andtrading and equity sales and trading by $1.3 billion and $0.8 billion, respectively. For the quarter ended June 30,
2009, a negative adjustment of $0.2 billion was reported in other sales and trading within Institutional Securities,
reflecting the improvement in Morgan Stanley’s debt-related credit spreads on certain debt related to China
Investment Corporation’s investment in the Company in December 2007.
3

Net income for the first six months of 2009 and 2008 includes the operating results of MSCI Inc. and gains
related to its secondary offerings, as well as the operating results and gains / losses related to the disposition ofcertain properties previously owned by Crescent Real Estate Equities Limited Partnership, a real estatesubsidiary of the Company. This activity is reported in discontinued operations.

4

Source: Thomson Reuters – for the period of January 1, 2009 to June 30, 2009.

5

Includes traditional, hedge funds and fund of funds asset management.

6

For the quarter ended June 30, 2009, real estate losses are reported in the Institutional Securities ($0.3 billion)
and Asset Management (negative revenues of $0.2 billion and non-interest expenses of $0.2 billion) businesssegments.

7

The cost of the replacement deferred compensation awards was fully allocated to Citigroup and included in the
net income / (loss) applicable to non-controlling interests on page 8 of the Company’s financial supplement that
accompanies this release.
8

Beginning May 31, 2008, the assets and liabilities of the Crescent Real Estate Equities Limited Partnershipwere included in the Company’s consolidated results.

9

Effective March 31, 2009, the Company calculated its Tier 1 capital ratio in accordance with the capital
adequacy standards for bank holding companies adopted by the Federal Reserve Board. These standards are
based upon a framework described in the International Convergence of Capital Measurement, dated July 1988,
as amended, also referred to as “Basel I.” These computations are preliminary estimates as of July 22, 2009 (thedate of this release) and could be subject to revision in the Company’s Quarterly Report on Form 10-Q for thequarter ended June 30, 2009.

8

MORGAN STANLEY
Quarterly Financial Summary(unaudited, dollars in millions)

Quarter Ended
June 30, 2008

June 30, 2009 (1)Net revenues
Institutional Securities (2)$Global Wealth Management Group
Asset Management
Intersegment Eliminations
Consolidated net revenues

2,964
1,923
575
(51)
5,411

$

(126)
76
(108)
(1)
(159)

$

(1,256)

$
$
$

$
$
$

$

3,875
1,695
582
(41)
6,111

$

$

$

651
172
(135)
1
689

$

1,062

(1.37)
0.27(1.10)$$$(1.37)
0.27(1.10)$$$$

Percentage Change From:
June 30, 2008
Mar 31, 2009

Mar 31, 2009

Six Months Ended
June 30, 2009 (1)June 30, 2008

1,600
1,299
72
(25)
2,946

(24%)
13%
(1%)
(24%)
(11%)

85%
48%
*
(104%)
84%$(119%)(56%)
20%(200%)(123%)(180%)
4%74%(200%)
15%

$

$

158
73
(418)
1
(186)

$

(578)

*

(117%)

0.61
0.41
1.02

$
$
$

(0.58)
0.01(0.57)

*
(34%)
*

0.61
0.41
1.02

$
$
$

(0.58)
0.01(0.57)

*
(34%)
*

$

4,564
3,222
647
(76)
8,357

$

$

$

32
149
(526)
0
(345)

$

(1,834)(136%)
*
(93%)

$
$
$

(136%)
*
(93%)

$
$
$

$

Percentage
Change

8,827
4,028
1,156
(82)
13,929

(48%)
(20%)
(44%)
7%
(40%)

$

1,523
765
(207)
3
2,084

(98%)
(81%)
(154%)*(117%)$

2,374(177%)(2.00)
0.29(1.71)

$
$
$

1.86
0.43
2.29

*
(33%)
(175%)(2.00)
0.29(1.71)

$
$
$

1.85
0.43
2.28

*
(33%)
(175%)$(3)

Income / (loss) applicable to Morgan Stanley$
Institutional Securities
Global Wealth Management Group
Asset Management
Intersegment Eliminations
Consolidated income / (loss) applicable to Morgan Stanley$
Earnings / (loss) applicable to Morgan Stanley common shareholders (4) $Earnings per basic share: (5)Income from continuing operations
Discontinued operations (6)Earnings per basic share
Earnings per diluted share: (5)Income from continuing operations
Discontinued operations (6)Earnings per diluted share
Return on average common equityfrom continuing operations
Return on average common equity

(1)
(2)
(3)
(4)

(5)
(6)
Note:

*
*

8.3%
13.6%

*
*

Information includes the Morgan Stanley Smith Barney joint venture (MSSB) effective from May 31, 2009.
Results for the quarters ended Mar 31, 2008, June 30, 2008, Mar 31, 2009 and June 30, 2009 include positive / (negative) revenues of $1.8 billion, $(0.2) billion, $(1.5) billion
and $(2.1) billion, respectively, related to the movement in Morgan Stanley's credit spreads on certain long term debt.
Represents consolidated income / (loss) from continuing operations applicable to Morgan Stanley before gain / (loss) from discontinued operations.
During the quarter ended June 30, 2009, the Company repurchased its Series D Fixed Rate Cumulative Perpetual Preferred Stock resulting in a one-time reduction from
earnings applicable to Morgan Stanley's common shareholders for the accelerated amortization of the Preferred Stock issuance discount. The earnings per share calculation
for the quarter ended June 30, 2009 also includes a charge of $202 million related to the partial redemption of Series C Non-Cumulative Non-Voting Preferred Stock issued to
Mitsubishi UFJ Financial Group, Inc. (MUFG) in exchange for its purchase of the Company's common stock.
Summation of the quarters' earnings per common share may not equal the year-to-date amounts due to the averaging effect of the number of shares and share equivalents throughout the year.
Includes operating results and gains on secondary equity offerings related to MSCI Inc. (reported in Institutional Securities), and operating results and gains / losses related to the disposition ofcertain properties previously owned by Crescent Real Estate Equities Limited Partnership (Crescent), a real estate subsidiary of the Company (reported in Asset Management).
Certain reclassifications have been made to prior period amounts to conform to the current presentation.
9

*
*

12.8%
15.5%

MORGAN STANLEY
Quarterly Consolidated Income Statement Information(unaudited, dollars in millions)

Quarter Ended
June 30, 2008

June 30, 2009 (1)Revenues:
Investment banking
Principal transactions:
Trading
Investments
Commissions
Asset management, distribution and admin. fees
Other
Total non-interest revenues

$

(1)
(2)
(3)
(4)
Note:

886

(1%)

45%

$

2,167

$

2,259

(4%)

(6%)
63%
(13%)
(13%)
60%
(1%)

81%
91%
26%
30%
53%
111%

3,062
(1,387)
1,747
2,266
836
8,691

4,888
(824)
2,381
2,946
1,224
12,874

(37%)
(68%)
(27%)
(23%)
(32%)
(32%)

1,393
1,881
(488)
5,411

9,196
9,063
133
6,111

2,524
2,370
154
2,946

(85%)
(79%)
*
(11%)

(45%)
(21%)
*
84%

3,917
4,251
(334)
8,357

21,906
20,851
1,055
13,929(82%)(80%)(132%)
(40%)

3,875

3,108

2,036

25%

90%

5,911

6,911

(14%)

376
290
317
127
405
640
2,155

325
421
300
196
487
388
2,117

339
269
286
117
322
485
1,818

16%
(31%)
6%
(35%)
(17%)
65%
2%

11%
8%
11%
9%
26%
32%
19%

715
559
603
244
727
1,125
3,973

614
891
605
391
852
776
4,129

16%
(37%)
-(38%)
(15%)
45%
(4%)

6,030

5,225

3,854

15%

56%

9,884

11,040

(10%)

$

(619)
(333)
(286)
319
33
(116)
149
(1,256)

$

886
192
694
465
1,159
16
1,143
1,062

$

(908)
(704)
(204)
14
(190)
(13)
(177)
(578)

(170%)*(141%)
(31%)
(97%)
*
(87%)
*

32%
53%
(40%)
*
117%
*
184%
(117%)$(1,527)(1,037)
(490)
333
(157)
(129)
(28)
(1,834)

$

2,889
785
2,104
487
2,591
35
2,556
2,374

(153%)*(123%)(32%)(106%)*(101%)(177%)

$

(159)
308
149

$

689
454
1,143

$

(186)
9
(177)

(123%)
(32%)
(87%)

15%
*
184%

$

(345)
317
(28)

$

2,084
472
2,556

(117%)(33%)(101%)

Total non-interest expenses

Effective tax rate from continuing operations (4)$Percentage
Change

1,091(1,272)
772
984
331
2,792

Non-compensation expenses:
Occupancy and equipment
Brokerage, clearing and exchange fees
Information processing and communications
Marketing and business development
Professional services
Other
Total non-compensation expenses

Pre-tax profit margin
Compensation and benefits as a % of net revenues
Non-compensation expenses as a % of net revenues

1,288

Six Months Ended
June 30, 2009 (1) June 30, 2008

2,094
(308)
1,116
1,473
315
5,978

Non-interest expenses:
Compensation and benefits

Amounts applicable to Morgan Stanley:
Income / (loss) from continuing operations
Gain / (loss) from discontinued operations after tax (2)Net income / (loss) applicable to Morgan Stanley$

Percentage Change From:
June 30, 2008
Mar 31, 2009

1,971
(115)
975
1,282
505
5,899

Interest and dividends
Interest expense
Net interest
Net revenues

Income / (loss) from continuing operations before taxes
Income tax provision / (benefit) from continuing operations
Income / (loss) from continuing operations
Gain / (loss) from discontinued operations after tax (2)Net income / (loss)
Net income / (loss) applicable to non-controlling interests (3)Net income / (loss) applicable to Morgan Stanley
Earnings / (loss) applicable to Morgan Stanley common shareholders

1,281

Mar 31, 2009

$

$

$

$

$

*
72%
40%

15%
51%
35%

*
69%
62%

*
71%
48%

21%
50%
30%

53.8%

21.7%

77.5%

67.9%

27.2%

Information includes MSSB effective from May 31, 2009.
Includes operating results and gains on secondary equity offerings related to MSCI Inc. (reported in Institutional Securities), and operating results and gains / losses related to the disposition ofcertain properties previously owned by Crescent, a real estate subsidiary of the Company (reported in Asset Management).
Effective January 1, 2009, the Company adopted SFAS No. 160, "Non-controlling Interests in Consolidated Financial Statements" which requires retrospective application to prior periods.
The quarter ended June 30, 2009 includes the impact of MSSB which is 51% owned by the Company and 49% owned by Citigroup Inc.
The effective tax rate for the quarter ended Mar 31, 2009 includes an additional tax benefit resulting from the anticipated repatriation of non-U.S. earnings at lower than previously estimated tax rates.
Excluding this benefit, the effective tax rate is 41.1%.
Certain reclassifications have been made to prior period amounts to conform to the current presentation.

10