Morgan Stanley Third Quarter 2022 Earnings Results
Morgan Stanley Reports Net Revenues of $13.0 Billion, EPS of $1.47 and ROTCE of 14.6%
NEW YORK, October 14, 2022 – Morgan Stanley (NYSE: MS) today reported net revenues of $13.0 billion for thethird quarter ended September 30, 2022 compared with $14.8 billion a year ago. Net income applicable to Morgan
Stanley was $2.6 billion, or $1.47 per diluted share,1 compared with net income of $3.7 billion, or $1.98 per diluted
share,1 for the same period a year ago.
James P. Gorman, Chairman and Chief Executive Officer, said, “Firm performance was resilient and balanced in an
uncertain and difficult environment, delivering a 15% return on tangible common equity. Wealth Management added
an additional $65 billion in net new assets and produced a pre-tax margin of 28%, excluding integration-related
expenses, demonstrating scale and stability despite declining asset values. While Investment Banking and Investment
Management were impacted by the market environment, Fixed Income and Equity navigated challenging markets
well. We continue to maintain our strong capital position while repurchasing $2.6 billion of shares and distributing ahealthy dividend.”

Financial Summary2,3Highlights

Firm ($ millions, except per share data)

3Q 2022

3Q 2021

Net revenues$12,986$14,753

Provision for credit losses

$35

$24

Compensation expense$5,614$5,920Non-compensation expenses
Pre-tax income8$3,949$3,935$3,388$4,874

Net income app. to MS$2,632$3,707

Expense efficiency ratio6

74%

67%

Earnings per diluted share

$1.47

$1.98

Book value per share$54.46$54.56

Tangible book value per share$39.93$40.47Return on equity

10.7%

14.5%

14.6%

19.6%

Net revenues$5,817$7,495Investment Banking$1,277$2,849Equity$2,459$2,876

Fixed Income$2,181$1,6404

Return on tangible equity
Institutional Securities

Wealth Management
Net revenues$6,120$5,9359Fee-based client assets ($ billions)$1,628$1,752

10

Fee-based asset flows ($ billions)

$16.7

$70.6

Net new assets ($ billions)$64.8$134.5Loans ($ billions)$145.7$121.2

Investment Management
Net revenues
11

AUM ($ billions)12Long-term net flows ($ billions)$1,168$1,453$1,279$1,522$(1.9)$(2.3)Media Relations: Wesley McDade 212-761-2430• The Firm reported net revenues of $13.0 billion,
demonstrating our resilient business model against a volatile
market backdrop.
• The Firm delivered ROTCE of 14.6%, or 15.2% excluding theimpact of integration-related expenses.4,5• The Firm’s expense efficiency ratio year-to-date was 72%, or
71% excluding the impact of integration-related expenses.5,6• Standardized Common Equity Tier 1 was 14.8%.
• Institutional Securities net revenues of $5.8 billion reflect
strong performance in Fixed Income and solid results in
Equity, while the uncertain macroeconomic environment
continued to drive limited activity in Investment Banking.

• Wealth Management delivered a pre-tax margin of 26.9% or
28.4% excluding integration-related expenses.5,7 Results
reflect higher net interest income on higher interest rates.
The business added $65 billion in net new assets, bringing
total net new assets year-to-date to $260 billion.

• Investment Management delivered net revenues of $1.2
billion on AUM of $1.3 trillion in a challenging market
environment.

Investor Relations: Leslie Bazos 212-761-5352

Institutional Securities
Institutional Securities reported net revenues for the current quarter of $5.8 billion compared with $7.5 billion a year
ago. Pre-tax income was $1.6 billion compared with $3.0 billion a year ago.8

Investment Banking revenues down 55% from a year ago:($ millions)

3Q 2022

3Q 2021• Advisory revenues decreased from a year ago driven bylower levels of completed M&A transactions.

Net Revenues$5,817$7,495• Equity underwriting revenues decreased significantly from ayear ago reflecting the substantial decline in global equity
volumes.

Investment Banking$1,277$2,849Advisory$693$1,272• Fixed income underwriting revenues decreased from a year
ago as macroeconomic conditions contributed to lower
issuances.

Equity underwriting$218$1,010

Fixed income underwriting

$366

$567

Equity$2,459$2,876

Fixed Income$2,181$1,640Other$(100)

$130

$24

$24

Total Expenses$4,167$4,498Compensation$1,948$2,248Non-compensation$2,219$2,250Equity net revenues down 14% from a year ago:
• Equity net revenues decreased across businesses from ayear ago, driven by declines in equity markets and lower
client activity compared with elevated levels in the prior year
quarter.

Provision for credit losses

Fixed Income net revenues up 33% from a year ago:
• Fixed Income net revenues increased from a year ago
reflecting strength in macro products on high client
engagement and volatility in the markets.

Other:• Other revenues decreased from a year ago driven by mark-to-market losses on corporate loans held for sale, net ofhedges compared to gains in the prior year quarter and higher mark-to-market losses on investments associatedwith certain employee deferred compensation plans.

Total Expenses:• Compensation expense decreased from a year ago primarily due to lower revenues.

2

Wealth Management
Wealth Management reported net revenues of $6.1 billion compared with $5.9 billion a year ago. Pre-tax income was$1.6 billion compared with $1.5 billion a year ago.8 Pre-tax margin was 26.9% in the current quarter, or 28.4%
excluding the impact of integration-related expenses.5,7($ millions)

3Q 2022

3Q 2021

Net Revenues$6,120$5,935

Asset management$3,389$3,628$616$832$2,004$1,348

Other

$111

$127

Provision for credit losses

$11

$0

Net revenues increased 3% from a year ago:
• Asset management revenues decreased 7% reflecting
lower asset levels due to declines in the markets, partially
offset by positive fee-based flows.

Transactional13• Transactional revenues13 decreased 18% excluding theimpact of mark-to-market losses on investments
associated with certain employee deferred compensationplans. The decrease was driven by lower client activity
amid uncertainty in the markets.

Net interest income• Net interest income increased 49% from a year ago on
higher interest rates.

Total Expenses$4,460$4,405Compensation$3,171$3,159Non-compensation$1,289$1,246

Total Expenses:• Compensation expense was relatively unchanged, as the impact of higher headcount was offset by lower
compensable revenues and a decline related to certain deferred compensation plans linked to investment
performance.
• Non-compensation expenses increased from a year ago primarily driven by investments in technology, as well as
higher marketing and business development costs.

Investment Management
Investment Management reported net revenues of $1.2 billion compared with $1.5 billion a year ago. Pre-tax income
was $116 million compared with $370 million a year ago.8
Net revenues down 20% from a year ago:($ millions)

3Q 2022

3Q 2021• Asset management and related fees decreased from ayear ago primarily on lower asset levels due to thedecline in the equity markets.

Net Revenues$1,168$1,453

Asset management and related fees

$1,269$1,470• Performance-based income and other revenues
decreased from a year ago, primarily due to thereversal of accrued carried interest in certain of ourprivate funds.

Performance-based income and other$(101)$(17)

Total Expenses$1,052$1,083Compensation

$495

$513

Non-compensation

$557

$570

Total Expenses:• Compensation expense decreased from a year ago on lower asset management revenues.

3Other Matters• The Firm repurchased $2.6 billion of its outstanding common
stock during the quarter as part of its Share Repurchase
Program.
• The Board of Directors declared a $0.775 quarterly dividend
per share payable on November 15, 2022 to commonshareholders of record on October 31, 2022.
• The Standardized Common Equity Tier 1 capital ratio was
14.8%, 150 basis points above the updated standardized
approach CET1 requirement that began on October 1, 2022.
• The effective tax rate for the quarter was 21.4%, down fromthe prior year quarter primarily driven by the realization ofcertain tax benefits.

3Q 2022

3Q 2021

CET1 capital15

14.8%

16.0%

Tier 1 capital15

16.6%

17.6%

CET1 capital15

15.2%

17.2%

Tier 1 capital15

17.1%

18.9%

Tier 1 leverage16

6.6%

7.3%

SLR17

5.4%

5.7%

$2,555$3,55730

36

Average Price$85.79$99.44

Period End Shares (millions)

1,694

1,799

Tax Rate

21.4%

23.6%

Capital14Standardized Approach

Advanced Approach

Leverage-based capital

Common Stock Repurchases
Repurchases ($ millions)
Number of Shares (millions)4Morgan Stanley is a leading global financial services firm providing a wide range of investment banking, securities,
wealth management and investment management services. With offices in 41 countries, the Firm’s employees serve
clients worldwide including corporations, governments, institutions and individuals. 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.

NOTICE:The information provided herein and in the financial supplement, including information provided on the Firm’s earnings
conference calls, may include certain non-GAAP financial measures. The definition of such measures or reconciliationof such measures to the comparable U.S. GAAP figures are included in this earnings release and the financial
supplement, both of which are available on www.morganstanley.com.
This earnings release may contain forward-looking statements, including the attainment of certain financial and othertargets, objectives and goals. Readers are cautioned not to place undue reliance on forward-looking statements, which
speak only as of the date on which they are made, which reflect management’s current estimates, projections,
expectations, assumptions, interpretations or beliefs and which are subject to risks and uncertainties that may cause
actual results to differ materially. For a discussion of risks and uncertainties that may affect the future results of theFirm, please see “Forward-Looking Statements” preceding Part I, Item 1, “Competition” and “Supervision andRegulation” 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 andQualitative Disclosures about Risk” in Part II, Item 7A in the Firm’s Annual Report on Form 10-K for the year ended
December 31, 2021 and other items throughout the Form 10-K, the Firm’s Quarterly Reports on Form 10-Q and the
Firm’s Current Reports on Form 8-K, including any amendments thereto.

5

1Includes preferred dividends related to the calculation of earnings per share of $138 million and $123 million for the third quarter of 2022
and 2021, respectively.
2

The Firm prepares its Consolidated Financial Statements using accounting principles generally accepted in the United States (U.S.
GAAP). 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. The Securities and Exchange Commission defines a “non-GAAP financial
measure” as a numerical measure of historical or future financial performance, financial position, or cash flows that is subject to adjustmentsthat effectively exclude, or include amounts from the most directly comparable measure calculated and presented in accordance with U.S.
GAAP. Non-GAAP financial measures disclosed by Morgan Stanley are provided as additional information to analysts, investors and otherstakeholders in order to provide them with greater transparency about, or an alternative method for assessing our financial condition,
operating results, or capital adequacy. These measures are not in accordance with, or a substitute for U.S. 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, wewill also generally define it or present the most directly comparable financial measure calculated and presented in accordance with U.S.
GAAP, along with a reconciliation of the differences between the non-GAAP financial measure we reference and such comparable U.S.
GAAP financial measure.
3

Our earnings releases, earnings conference calls, financial presentations and other communications may also include certain metrics
which we believe to be useful to us, analysts, investors, and other stakeholders by providing further transparency about, or an additional
means of assessing, our financial condition and operating results.
4

Return on average tangible common equity and return on average tangible common equity excluding integration-related expenses are
non-GAAP financial measures that the Firm considers useful for analysts, investors and other stakeholders to allow comparability of periodto-period operating performance and capital adequacy. The calculation of return on average tangible common equity represents full year or
annualized net income applicable to Morgan Stanley less preferred dividends as a percentage of average tangible common equity.
Tangible common equity, also a non-GAAP financial measure, represents common equity less goodwill and intangible assets net ofallowable mortgage servicing rights deduction. The calculation of return on average tangible common equity excluding integration-related
expenses is adjusted in both the numerator and the denominator to exclude the integration-related expenses associated with theacquisitions of E*TRADE and Eaton Vance.
The Firm’s and business segment’s third quarter results for 2022 and 2021 include integration-related expenses as a result of the
E*TRADE and Eaton Vance acquisitions reported in the Wealth Management segment and Investment Management segment, respectively.
The amounts are presented as follows (in millions):
5

3Q 2022

3Q 2021

Firm
Compensation
Non-compensation
Total non-interest expenses
Total non-interest expenses (after-tax)

$ 10
113
$ 123
$ 94

$ 19
126
$ 145
$ 111

Wealth Management
Compensation
Non-compensation
Total non-interest expenses
Total non-interest expenses (after-tax)

$3
89
$ 92
$ 70

$9
104
$ 113
$ 87

Investment Management
Compensation
Non-compensation
Total non-interest expenses
Total non-interest expenses (after-tax)

$7
24
$ 31
$ 24

$ 10
22
$ 32
$ 24

6

The Firm expense efficiency ratio represents total non-interest expenses as a percentage of net revenues. The Firm expense efficiency
ratio excluding integration-related expenses is a non-GAAP financial measure that the Firm considers useful for analysts, investors andother stakeholders to allow comparability of period-to-period operating performance.
7

Pre-tax margin represents income before taxes divided by net revenues. Wealth Management pre-tax margin excluding the integrationrelated expenses represents income before taxes less those expenses divided by net revenues. Wealth Management pre-tax margin
excluding integration-related expenses is a non-GAAP financial measure that the Firm considers useful for analysts, investors and otherstakeholders to allow comparability of period-to-period operating performance.

68

Pre-tax income represents income before provision for income taxes.

9

Wealth Management fee-based client assets represent the amount of assets in client accounts where the basis of payment for services isa fee calculated on those assets.
10

Wealth Management fee-based asset flows include net new fee-based assets (including asset acquisitions), net account transfers,
dividends, interest, and client fees, and exclude institutional cash management related activity.
11

AUM is defined as assets under management or supervision.

12Long-term net flows include the Equity, Fixed Income and Alternative and Solutions asset classes and excludes the Liquidity and Overlay
Services asset class.
13

Transactional revenues include investment banking, trading, and commissions and fee revenues. Transactional revenues excluding theimpact of mark-to-market gains/losses on investments associated with certain employee deferred compensation plans is a non-GAAP
financial measure that the Firm considers useful for analysts, investors and other stakeholders to allow better comparability of period-toperiod operating performance and capital adequacy.
14

Capital ratios are estimates as of the press release date, October 14, 2022.

CET1 capital is defined as Common Equity Tier 1 capital. The Firm’s risk-based capital ratios are computed under each of the (i)standardized approaches for calculating credit risk and market risk risk‐weighted assets (RWAs) (the “Standardized Approach”) and (ii)applicable advanced approaches for calculating credit risk, market risk and operational risk RWAs (the “Advanced Approach”). For
information on the calculation of regulatory capital and ratios, and associated regulatory requirements, please refer to "Management’s
Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources – Regulatory Requirements" inthe Firm’s Annual Report on Form 10-K for the year ended December 31, 2021 (2021 Form 10-K).
15

The Tier 1 leverage ratio is a leverage-based capital requirement that measures the Firm’s leverage. Tier 1 leverage ratio utilizes Tier 1
capital as the numerator and average adjusted assets as the denominator.
16

The Firm’s supplementary leverage ratio (SLR) utilizes a Tier 1 capital numerator of approximately $76.4 billion and $83.4 billion, andsupplementary leverage exposure denominator of approximately $1.41 trillion and $1.46 trillion, for the third quarter of 2022 and 2021,
respectively.
17

7

Consolidated Income Statement Information(unaudited, dollars in millions)

Revenues:
Investment banking
Trading
Investments
Commissions and fees
Asset management
Other
Total non‐interest revenues

Sep 30, 2022

Quarter Ended
Jun 30, 2022 Sep 30, 2021$$

Interest income
Interest expense
Net interest
Net revenues
Provision for credit losses
Non‐interest expenses:
Compensation and benefits
Non‐compensation expenses:
Brokerage, clearing and exchange fees
Information processing and communications
Professional services
Occupancy and equipment
Marketing and business development
Other
Total non‐compensation expenses
Total non‐interest expenses
Income before provision for income taxes
Provision for income taxes
Net income
Net income applicable to nonredeemable noncontrolling interests
Net income applicable to Morgan Stanley
Preferred stock dividend
Earnings applicable to Morgan Stanley common shareholders

$

$

1,373
3,331
(168)
1,133
4,744
63
10,476

1,150
3,597
23
1,220
4,912
(52)
10,850$Percentage Change From:Jun 30, 2022 Sep 30, 2021

3,013
2,861
45
1,280
5,201
290
12,690

19%
(7%)
*
(7%)
(3%)
*
(3%)

(54%)
16%
*
(11%)
(9%)
(78%)
(17%)

Nine Months Ended
Sep 30, 2022 Sep 30, 2021$

4,281
10,911(70)
3,769
14,775245
33,911$

Percentage
Change8,413
10,416744
4,214
14,572916
39,275

(49%)
5%
*
(11%)
1%
(73%)
(14%)
77%
*
18%
(10%)

6,101
3,591
2,510
12,986

3,612
1,330
2,282
13,132

2,351
288
2,063
14,753

69%
170%
10%
(1%)

160%
*
22%
(12%)

12,363
5,355
7,008
40,919

7,000
1,044
5,956
45,231

35

101

24

(65%)

46%

193

(1)

5,614

5,550

5,920

1%

(5%)

17,43819,141

(9%)

847
874
755
429
215
829
3,949

878
857
757
430
220
1,020
4,162

825
788
734
427
146
1,015
3,935

(4%)
2%
‐‐
‐‐
(2%)
(19%)
(5%)

3%
11%
3%
‐‐
47%
(18%)
‐‐

2,607
2,560
2,217
1,286
610
2,713
11,993

2,530
2,286
2,104
1,246
438
2,703
11,307

3%
12%
5%
3%
39%
‐‐
6%

9,563

9,712

9,855

(2%)

(3%)

29,43130,448

(3%)

3,388
726
2,662
30
2,632
138
2,494

3,319
783
2,536
41
2,495
104
2,391

4,874
1,150
3,724
17
3,707
123
3,584

2%
(7%)
5%
(27%)
5%
33%
4%

(30%)
(37%)
(29%)
76%
(29%)
12%
(30%)

11,295
2,382
8,913
120
8,793
366
8,427

14,784
3,380
11,40466
11,338364
10,974

(24%)
(30%)
(22%)
82%
(22%)
1%
(23%)

$

$

$

$

$

$

$

$

The End Notes are an integral part of this presentation. Refer to the Financial Supplement on pages 12 ‐ 17 for Definition of U.S. GAAP to Non‐GAAP Measures, Definitions of Performance Metrics and Terms,
Supplemental Quantitative Details and Calculations, and Legal Notice for additional information.

8*

Consolidated Financial Metrics, Ratios and Statistical Data
(unaudited)
Sep 30, 2022

Quarter Ended
Jun 30, 2022 Sep 30, 2021

$
$

$
$

Percentage Change From:Jun 30, 2022 Sep 30, 2021

Nine Months Ended
Sep 30, 2022 Sep 30, 2021

Percentage
ChangeFinancial Metrics:
Earnings per basic share
Earnings per diluted share
Return on average common equity
Return on average tangible common equity
Book value per common share
Tangible book value per common share
Excluding integration‐related expenses
Adjusted earnings per diluted share
Adjusted return on average common equity
Adjusted return on average tangible common equity

1.49
1.47

1.40
1.39

10.7%
14.6%

$
$

10.1%
13.8%

2.01
1.98

6%
6%

(26%)
(26%)

$
$

14.5%
19.6%

$
$

54.46
39.93

$
$

54.46
40.07

$
$

54.56
40.47

$

1.53
11.1%
15.2%

$

1.44
10.5%
14.3%

$

2.04
15.0%
20.2%

4.95
4.88

$
$

11.9%
16.1%

6%

(25%)

6.11
6.02

(19%)
(19%)

15.1%
19.7%

$
$

54.46
39.93

$
$

54.56
40.47

$

5.04
12.2%
16.6%

$

6.15
15.4%
20.2%

(18%)

Financial Ratios:
Pre‐tax profit margin
Compensation and benefits as a % of net revenues
Non‐compensation expenses as a % of net revenues
Firm expense efficiency ratio
Firm expense efficiency ratio excluding integration‐related expenses
Effective tax rate

26%
43%
30%
74%
73%
21.4%

25%
42%
32%
74%
73%
23.6%

33%
40%
27%
67%
66%
23.6%

Period end common shares outstanding (millions)Average common shares outstanding (millions)
Basic
Diluted

1,694

1,723

1,799

(2%)

(6%)

1,674
1,697

1,704
1,723

1,781
1,812

(2%)
(2%)

(6%)
(6%)

Worldwide employees

81,56778,38673,620

4%

11%

28%
43%
29%
72%
71%
21.1%

33%
42%
25%
67%
67%
22.9%

1,704
1,725

1,797
1,824

Statistical Data:

Notes:‐ For the quarters ended September 30, 2022, June 30, 2022 and September 30, 2021, Firm results include pre‐tax integration‐related expenses of $123 million, $120 million and $145 million ($94 million, $92 million and$111 million after‐tax) respectively, reported in the Wealth Management and Investment Management business segments. The nine months ended September 30, 2022 and 2021 results include pre‐tax integration‐related
expenses of $350 million and $310 million ($268 million and $238 million after‐tax), respectively.
‐ The End Notes are an integral part of this presentation. Refer to the Financial Supplement on pages 12 ‐ 17 for Definition of U.S. GAAP to Non‐GAAP Measures, Definitions of Performance Metrics and Terms, Supplemental
Quantitative Details and Calculations, and Legal Notice for additional information.

9

(5%)
(5%)