Media Relations: Jeanmarie McFadden 212-761-2433

Investor Relations: Celeste Mellet Brown 212-761-3896

Morgan Stanley Reports First Quarter 2011:•

Net Revenues of $7.6 Billion, Including Loss of $655 Million in Japanese Securities
Joint Venture•

Income from Continuing Operations of $0.50 per Diluted Share, Including Gain of$0.30 from a Discrete Tax Item and Loss of $0.26 in Japanese Securities Joint
Venture•Strong Performance in Equity Sales and Trading, Solid Results in Fixed Income,Positive Net Flows in Global Wealth Management and Asset Management, andRobust M&A Activity

NEW YORK, April 21, 2011 – Morgan Stanley (NYSE: MS) today reported income of $966 million, or $0.50
per diluted share,1 from continuing operations applicable to Morgan Stanley for the first quarter ended March
31, 2011 compared with income of $1.8 billion, or $1.03 per diluted share, for the same period a year ago. Net
revenues were $7.6 billion for the current quarter compared with $9.1 billion a year ago. Results for the current
quarter included a pre-tax loss of $655 million (after-tax loss of $425 million or $0.26 per diluted share) arisingfrom 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, Mitsubishi UFJ Financial Group, Inc. (MUFG).
The current quarter also included a net tax benefit of $447 million, or $0.30 per diluted share, from theremeasurement of a deferred tax asset and the reversal of a related valuation allowance that are both associatedwith the sale of Revel Entertainment Group, LLC (Revel).2
Compensation expenses of $4.3 billion decreased from $4.4 billion a year ago. The Firm’s current quarter
compensation to net revenue ratio was adversely affected by the aforementioned MUMSS loss, which reduced net
revenues by $655 million. This ratio for the current quarter was 57% (or 52% excluding the MUMSS loss)
compared with 49% a year ago.3 Non-compensation expenses were $2.4 billion compared with $2.1 billion a year
ago reflecting higher levels of business activity and increased legal and technology-related expenses.
For the current quarter, net income applicable to Morgan Stanley, including discontinued operations, was $0.50
per diluted share, compared with net income of $0.99 per diluted share in the first quarter of 2010.

Business Highlights•

Sales and trading net revenues were $3.0 billion and included negative revenue of $189 million related toMorgan Stanley’s debt-related credit spreads (DVA)4, 5 in the current quarter. Equity sales and trading
reported net revenues of $1.7 billion, the highest reported quarter since 2008, reflecting higher levels of client
activity. Fixed income and commodities sales and trading results improved significantly from the fourth
quarter of 2010.

•

Investment Banking revenues were $1.0 billion and reflected an increase in both advisory and underwriting
activity from a year ago. The Firm ranked #1 in global announced and completed M&A and #3 in global
Equity.61•Global Wealth Management Group delivered net revenues of $3.4 billion, with client assets of $1.7 trillionand 17,800 global representatives. Net new assets for the quarter were $11.4 billion.

•

Asset Management reported net revenues of $626 million and positive net flows of $1.4 billion. During thequarter, Morgan Stanley also completed the restructuring of its ownership of FrontPoint Partners LLC(FrontPoint).

James P. Gorman, President and Chief Executive Officer, said, "We continued to strengthen our client franchiseand delivered solid results across many of our businesses. Our premier investment banking franchise remains aclear industry leader – maintaining our #1 ranking in global M&A in a robust deal market. We also made gains in
key areas of focus – with our best results in equities since the financial crisis; significant improvement in fixedincome and commodities from last quarter; and positive flows across wealth management and asset management.
While the loss at our joint venture with MUFG is disappointing, we remain strongly committed to the Japanesemarket and our strategic partners at MUFG. Further, this loss does not impact the progress we are making inpursuing our own strategic priorities. I am confident that Morgan Stanley is well-positioned to seize theopportunities presented by today’s market environment and deliver long-term value to our clients, shareholders
and employees."

Summary of Business Segment Results($ millions)
Institutional Securities

Global Wealth Management Group

Asset Management

Net
Revenues (1)Pre-Tax
IncomeNet
Revenues

Pre-Tax
IncomeNet
Revenues

Pre-Tax
Income1Q 2011$3,592$397$3,437

$348

$626

$127

4Q 2010$3,618$437$3,353

$390

$858

$356

1Q 2010$5,338$2,065$3,105

$278

$653

$174

(1)

Net revenues for 1Q 2011, 4Q 2010 and 1Q 2010 include positive (negative) revenue from DVA of ($189) million, ($945) million and$54 million, respectively.

INSTITUTIONAL SECURITIESInstitutional Securities reported pre-tax income from continuing operations of $397 million compared with pretax income from continuing operations of $2.1 billion in the first quarter of last year. Net revenues for the current
quarter were $3.6 billion, inclusive of the MUMSS loss of $655 million, compared with $5.3 billion a year ago.
DVA resulted in negative revenue of $189 million in the current quarter compared with positive revenue of $54
million a year ago.5 The quarter’s pre-tax margin was 11%.7•

Advisory revenues of $385 million increased 18% from a year ago and reflected higher levels of completed
activity.

•

Underwriting revenues of $623 million increased 11% from last year’s first quarter on higher levels of market
activity. Equity underwriting revenues increased 8% from the prior year to $285 million. Fixed income
underwriting revenues increased 14% to $338 million from last year’s first quarter primarily due to higher
loan syndication fees.

•

Fixed income and commodities sales and trading net revenues were $1.8 billion compared with net revenuesof $2.7 billion in last year’s first quarter.8 DVA resulted in negative revenue of $159 million in the current
quarter compared with positive revenue of $2 million a year ago.5 The decrease in net revenues from lastyear’s strong first quarter primarily reflected lower results in credit products, partly offset by higher net

2

revenues in interest rates. Commodities results were higher than the prior year quarter.
•

Equity sales and trading net revenues were $1.7 billion compared with net revenues of $1.4 billion in lastyear’s first quarter.5 Net revenues increased from a year ago primarily reflecting higher results in thederivatives and cash businesses driven by increased levels of both client activity and market volatility.

•

Other sales and trading net losses were $458 million compared with net losses of $1 million in the firstquarter of last year.5 Results for the current quarter included losses on economic hedges related to the Firm’s
long-term debt, and funding costs related to higher levels of liquidity held by the Firm’s U.S. subsidiarybanks.

•

Investment gains were $143 million compared with gains of $174 million in the first quarter of last year.

•

Other revenues were negative $573 million for the quarter compared with positive revenues of $142 million ayear ago. Results for the current quarter reflected the MUMSS loss noted above.

•

Compensation expenses of $2.0 billion decreased from $2.2 billion a year ago and primarily reflected lower
net revenues. The compensation to net revenue ratio for the current quarter was 54% compared with 41% a
year ago (this ratio was adversely affected by the MUMSS loss and DVA which reduced net revenues in thecurrent period). Non-compensation expenses of $1.2 billion increased 13% from a year ago, resulting fromhigher levels of business activity and increased legal and technology-related expenses.

•

Morgan Stanley’s average trading Value-at-Risk measured at the 95% confidence level was $121 million
compared with $132 million in the fourth quarter of 2010.

GLOBAL WEALTH MANAGEMENT GROUP
Global Wealth Management Group reported pre-tax income from continuing operations of $348 million
compared with pre-tax income from continuing operations of $278 million in the first quarter of last year. The
quarter’s pre-tax margin was 10%.7 Income after the non-controlling interest allocation to Citigroup Inc. andbefore taxes was $274 million.9•

Net revenues were $3.4 billion compared with $3.1 billion a year ago and primarily reflected higher
commissions and asset management revenues.

•

Compensation expenses of $2.1 billion increased 8% from a year ago. The compensation to net revenue ratio
for the current quarter was 62% compared with 64% a year ago. Non-compensation expenses of $964 million
increased from $855 million a year ago.

•

Total client assets were $1.7 trillion at quarter-end. Client assets in fee-based accounts were $501 billion andrepresented 29% of total client assets. Net new assets for the quarter were $11.4 billion and net new flows in
fee-based accounts were $17.8 billion.

•

The 17,800 global representatives at quarter-end achieved average annualized revenue per global
representative of $767,000 and total client assets per global representative of $97 million.

ASSET MANAGEMENT
Asset Management reported pre-tax income from continuing operations of $127 million compared with a pre-tax
income from continuing operations of $174 million in last year’s first quarter. Results for the current quarter
included gains of $42 million compared with gains of $119 million in the prior year related to principal
investments held by certain consolidated real estate funds.10 The quarter’s pre-tax margin was 20%.7 Income
after the non-controlling interest allocation and before taxes was $100 million.

3

•

Net revenues of $626 million declined from $653 million a year ago as higher results in the Traditional AssetManagement business were offset by lower gains on principal investments in the Real Estate Investing
business.11•

Compensation expenses of $255 million declined from $275 million a year ago. The compensation to net
revenue ratio for the quarter was 41% compared with 42% a year ago. Non-compensation expenses of $244
million increased 20% from a year ago.

•

Assets under management or supervision at March 31, 2011 of $284 billion increased from $262 billion ayear ago. The increase reflected market appreciation and net customer inflows primarily in Morgan Stanley’sliquidity funds. In addition, the business recorded positive net flows of $1.4 billion in the current quartercompared with net outflows of $6.8 billion in the first quarter of the prior year.

CAPITAL
Morgan Stanley’s Tier 1 capital ratio, under Basel I, was approximately 16.7% and Tier 1 common ratio wasapproximately 11.8%.7, 12 The annualized return on average common equity from continuing operations was
6.2% in the current quarter.
As of March 31, 2011, Morgan Stanley had not repurchased any shares of its common stock as part of its capitalmanagement share repurchase program.
Pursuant to the Shareholder Agreement between MUFG and Morgan Stanley, MUFG is responsible for ensuringthat MUMSS remains adequately capitalized, and Morgan Stanley is not obligated to contribute additional capital
to MUMSS. As a result of the losses incurred by MUMSS, MUFG announced that it is intending to contribute in
April approximately $370 million of capital to MUMSS. The MUFG capital injection will improve the capitalbase and restore the capital adequacy ratio of MUMSS, and will partially mitigate, to the extent of approximately$145 million, the reduction in Morgan Stanley’s book value that results from the MUMSS losses.
At March 31, 2011, book value per common share was $31.45, based on 1.5 billion shares outstanding.

OTHER MATTERS
Excluding the discrete tax gain related to Revel and the effect of the MUMSS loss, the effective tax rate fromcontinuing operations for the current quarter was 27.6%.13
Morgan Stanley announced that its Board of Directors declared a $0.05 quarterly dividend per common share.
The dividend is payable on May 13, 2011 to common shareholders of record on April 29, 2011.
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 clientsworldwide including corporations, governments, institutions and individuals from more than 1,300 offices in 42
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 andthe Financial Supplement are available online in the Investor Relations section at www.morganstanley.com.

###

4

(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 whichreflect management's current estimates, projections, expectations or beliefs and which are subject to risks anduncertainties that may cause actual results to differ materially. For a discussion of additional risks anduncertainties 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 andAnalysis of Financial Condition and Results of Operations" in Part II, Item 7 and "Quantitative andQualitative Disclosures about Market Risk" in Part II, Item 7A of the Company's Annual Report on Form 10K for the year ended December 31, 2010 and other items throughout the Form 10-K and the Company’s
Current Reports on Form 8-K.

5

1Includes preferred dividends and other adjustments, related to the calculation of earnings per share, of approximately $232
million for the quarter ended March 31, 2011 and $365 million for the quarter ended March 31, 2010. Refer to page 3 ofMorgan Stanley’s Financial Supplement accompanying this release for the calculation of earnings per share.

2

The income tax benefit associated with this deferred tax asset and related valuation allowance was originally recognized inincome from discontinued operations in 2010 in connection with the recognition of a $1.2 billion loss due to write-downs andrelated costs following the Firm's commitment to a plan to dispose of Revel. Morgan Stanley recorded the valuation
allowance because the Firm did not believe it was more likely than not that it would have sufficient future net capital gain torealize the benefit of the expected capital loss to be recognized upon the disposal of Revel. During the quarter ended March
31, 2011, the disposal of Revel was restructured as a tax-free like kind exchange and the disposal was completed. The
restructured transaction changed the character of the future taxable loss to ordinary. Morgan Stanley reversed the valuation
allowance because the Firm believes it is more likely than not that it will have sufficient future ordinary taxable income torecognize the recorded deferred tax asset. In accordance with the applicable accounting literature, this reversal of apreviously established valuation allowance due to a change in circumstances was recognized in income from continuing
operations.

3

The Firm’s compensation to net revenue ratio, excluding the MUMSS loss, is a non-GAAP financial measure that the Firm
considers a useful measure for the Firm and investors to assess operating performance. The 52% ratio is computed ascompensation and benefits costs divided by net revenues, less the MUMSS loss of $655 million.

4

Represents the change in the fair value of certain of Morgan Stanley’s long-term and short-term borrowings resulting fromfluctuations in its credit spreads (commonly referred to as “DVA”).
5

Due to DVA, sales and trading net revenue for the quarter ended March 31, 2011 included negative revenue of $189 million(fixed income: $159 million; equity: $30 million) and sales and trading net revenue for the quarter ended March 31, 2010
included positive revenue of $54 million (fixed income: $2 million; equity: $48 million; other: $4 million).
6

Source: Thomson Reuters – for the period of January 1, 2011 to March 31, 2011 as of April 4, 2011.

7

Pre-tax margin and Tier 1 common ratios are non-GAAP financial measures that the Firm considers to be useful measuresthat the Firm and investors use to assess operating performance and capital adequacy. Pre-tax margin represents income(loss) from continuing operations before taxes, divided by net revenues. The Tier 1 common ratio equals Tier 1 capital (seenote 12) less qualifying perpetual preferred stock and qualifying restricted core capital elements, such as qualifying trust
preferred securities and qualifying non-controlling interests, adjusted for the portion of goodwill and non-servicing intangible
assets associated with Morgan Stanley Smith Barney (MSSB) non-controlling interests divided by risk-weighted assets.

8

Effective for the quarter ended March 31, 2011, the Institutional Securities “fixed income” business has been renamed the“fixed income and commodities” business. The “interest rates credit and currency” (IRCC) business has been renamed the“fixed income” business. These name changes did not affect current or previously reported results for these businesses.
9

Morgan Stanley owns 51% of MSSB, which is consolidated. The results related to the 49% interest retained by Citigroup
Inc. are reported in net income (loss) applicable to non-controlling interests on page 9 of Morgan Stanley’s Financial
Supplement accompanying this release.
10

Results for the first quarter of 2011 and 2010 included pre-tax income of $28 million and $116 million, respectively,
related to principal investments held by certain consolidated real estate funds. The limited partnership interests in thesefunds are reported in net income (loss) applicable to non-controlling interests on page 11 of Morgan Stanley’s Financial
Supplement accompanying this release.
11

Beginning this quarter, the Asset Management business segment was organized into three businesses, including Traditional
Asset Management, Real Estate Investing and Merchant Banking. Traditional Asset Management includes Long-Only,
Liquidity and Alternative Investment Partners fund of funds businesses. Real Estate Investing was previously reported as

6

part of Merchant Banking. Merchant Banking includes Private Equity and Infrastructure businesses and hedge fundinvestments. The Firm’s equity investment in FrontPoint, subsequent to the restructuring of that business, on March 1, 2011,is included in Merchant Banking. The results of FrontPoint for all periods prior to the restructuring are also included in
Merchant Banking.
12

The Firm calculates its Tier 1 capital ratio and risk-weighted assets in accordance with the capital adequacy standards forfinancial holding companies adopted by the Federal Reserve Board. These standards are based upon a framework describedin the International Convergence of Capital Measurement and Capital Standards, July 1988, as amended, also referred to as
Basel I. These computations are preliminary estimates as of April 21, 2011 (the date of this release) and could be subject torevision in Morgan Stanley’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2011. On March 31, 2011, theFederal Reserve implemented a limit on the amount of the restricted core capital elements (trust preferred securities andcertain non-controlling interests) to 15% of the sum of all core capital elements, including restricted core capital elements,
net of goodwill less any associated deferred tax liability. This restriction resulted in approximately $3.9 billion of restricted
capital being reclassed from Tier 1 capital to Tier 2 capital for March 31, 2011.
13

Reflects the Firm’s effective tax rate from continuing operations exclusive of the discrete tax benefit of $447 million
related to Revel and a tax benefit of $230 million related to the MUMSS loss.

7

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

Mar 31, 2011
Net revenues
Institutional Securities
Global Wealth Management Group
Asset Management
Intersegment Eliminations
Consolidated net revenues
Income (loss) from continuing operations before tax
Institutional Securities
Global Wealth Management Group
Asset Management
Intersegment Eliminations
Consolidated income (loss) from continuing operations before tax

$

3,592
3,437
626
(20)
7,635

$

$

$

397
348
127
0
872

$

$

$

714
183
69
0
966

Earnings (loss) applicable to Morgan Stanley common shareholders$

Earnings per basic share:
Income from continuing operations
Discontinued operations
Earnings per basic share
Earnings per diluted share:
Income from continuing operations
Discontinued operations
Earnings per diluted share

Income (loss) applicable to Morgan Stanley
Institutional Securities
Global Wealth Management Group
Asset Management
Intersegment Eliminations
Consolidated income (loss) applicable to Morgan Stanley$

Quarter Ended
Dec 31, 2010
3,618
3,353
858
(22)
7,807

Mar 31, 2010$$

Percentage Change From:
Dec 31, 2010
Mar 31, 2010

5,338
3,105
653
(24)
9,072

(1%)
3%
(27%)
9%
(2%)

(33%)
11%
(4%)
17%
(16%)

2,065
278
174
(2)
2,515

(9%)
(11%)
(64%)
-(26%)

(81%)
25%
(27%)
*
(65%)

34%
10%
(59%)
-11%

(59%)
85%
*
*
(48%)

437
390
356
0
1,183

$

$

$

533
166
168
0
867

$

1,731
99
15
(1)
1,844

736

$

600

$

1,411

23%

(48%)

$
$
$

0.50
0.01
0.51

$
$
$

0.44
(0.02)
0.42

$
$
$

1.12
(0.05)
1.07

14%
*
21%

(55%)
*
(52%)

$
$
$

0.50
0.50

$
$
$

0.43
(0.02)
0.41

$
$
$

1.03
(0.04)
0.99

16%
*
22%

(51%)
*
(49%)

$

$

$

$

Notes: - Results for the quarters ended March 31, 2011, December 31, 2010 and March 31, 2010 include positive (negative) revenue of $(189) million, $(945) million and $54 million, respectively,
related to the movement in Morgan Stanley's credit spreads on certain long-term and short-term debt.
- Income (loss) applicable to Morgan Stanley represents consolidated income (loss) from continuing operations applicable to Morgan Stanley before gain (loss) from discontinued operations.
8

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

Revenues:
Investment banking
Principal transactions:
Trading
Investments
Commissions
Asset management, distribution and admin. fees
Other
Total non-interest revenues

Mar 31, 2011

Quarter Ended
Dec 31, 2010

Mar 31, 2010

$

$

$

1,214

15%

3,758
369
1,260
1,963
294
8,704

*
(52%)
11%
1%
*
1%

(21%)
(11%)
15%
7%
*
(12%)

1,854
1,853
1
7,635

1,944
1,692
252
7,807

1,736
1,368
368
9,072

(5%)
10%
(100%)(2%)

7%35%(100%)
(16%)

4,333

4,061

4,416

7%

(2%)

402
405
445
147
428
603
2,430

380
380
442
161
560
640
2,563

390
348
395
134
395
479
2,141

6%
7%
1%
(9%)
(24%)
(6%)
(5%)

3%
16%
13%
10%
8%
26%
13%

6,763

6,624

6,557

2%

3%

$
$

872
(256)
1,128
2
1,130
162
968
232
736

$
$

1,183
86
1,097
(31)
1,066
230
836
236
600

$
$

2,515
436
2,079
(68)
2,011
235
1,776
365
1,411

(26%)
*
3%
*
6%
(30%)
16%
(2%)
23%

(65%)
*
(46%)
*
(44%)
(31%)
(45%)
(36%)
(48%)

$

966
2
968

$

867
(31)
836

$

1,844
(68)
1,776

11%
*
16%

(48%)
*
(45%)

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
Total non-interest expenses$

Pre-tax profit margin
Compensation and benefits as a % of net revenues
Non-compensation expenses as a % of net revenues
Effective tax rate from continuing operations

Notes:

(31%)

854
688
1,311
2,080
861
7,555

Non-interest expenses:
Compensation and benefits

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

1,060

2,977
329
1,449
2,109
(444)
7,634

Interest income
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
Net income (loss)
Net income (loss) applicable to non-controlling interests
Net income (loss) applicable to Morgan Stanley
Preferred stock dividend / Other
Earnings (loss) applicable to Morgan Stanley common shareholders

1,761

Percentage Change From:
Dec 31, 2010
Mar 31, 2010

$

$

11%
57%
32%

15%
52%
33%

28%
49%
24%

*

7.3%

17.3%

- 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.
- Other revenue for the quarter ended March 31, 2011 included a loss of $655 million related to the Firm's 40% stake in a securities joint venture, Mitsubishi
UFJ Morgan Stanley Securities Co., Ltd., controlled and managed by our partner Mitsubishi UFJ Financial Group, Inc.
- Other revenue for the quarter ended December 31, 2010 included a gain of $668 million on the sale of the Firm's investment in China International Capital
Corporation Limited.
- The quarter ended March 31, 2011 included a discrete net tax benefit of $447 million from the remeasurement of a deferred tax asset and the reversal of a
related valuation allowance that are both associated with the sale of Revel Entertainment Group, LLC. Excluding this discrete tax gain and tax benefit of$230 million related to the MUMSS loss, the effective tax rate for the quarter was 27.6%.
- The quarters ended December 31, 2010 and March 31, 2010 included a discrete tax gain of approximately $95 million and $382 million, respectively. Excludingthese tax gains, the effective tax rates for the quarters would have been 15.3% and 32.5%, respectively.
- Preferred stock dividend / Other includes allocation of earnings to Participating Restricted Stock Units and China Investment Corporation equity units.
9

MORGAN STANLEY
Quarterly Earnings Per Share(unaudited, in millions, except for per share data)

Quarter Ended
Mar 31, 2011

Income (loss) from continuing operations
Net income (loss) from continuing operations applicable to non-controlling interest
Income from continuing operations applicable to Morgan Stanley
Less: Preferred Dividends
Income from continuing operations applicable to Morgan Stanley, prior to allocation of income to CIC Equity
Units and Participating Restricted Stock Units
Basic EPS Adjustments:
Less: Allocation of undistributed earnings to CIC Equity Units
Less: Allocation of earnings to Participating Restricted Stock Units
Earnings (loss) from continuing operations applicable to Morgan Stanley common shareholders$

Gain (loss) from discontinued operations after tax
Gain (loss) from discontinued operations after tax applicable to non-controlling interests
Gain (loss) from discontinued operations after tax applicable to Morgan Stanley
Less: Allocation of undistributed earnings to CIC Equity Units
Less: Allocation of earnings to Participating Restricted Stock Units
Earnings (loss) from discontinued operations applicable to Morgan Stanley common shareholders
Earnings (loss) applicable to Morgan Stanley common shareholders

Dec 31, 2010

1,128
162
966
(220)

1,097
230
867
(221)

2,079
235
1,844
(220)

746

646

1,624

0
(12)
734

0
(16)
630

(99)
(54)
1,471

$

2
0
2
0
0
2
$

Average basic common shares outstanding (millions)

Mar 31, 2010

736

$

(31)
0
(31)
0
1
(30)
$

1,456

600

(68)
0
(68)
6
2
(60)
$

1,437

1,411
1,315

Earnings per basic share:
Income from continuing operations
Discontinued operations
Earnings per basic share

$
$
$

0.50
0.01
0.51

$
$
$

0.44
(0.02)
0.42

$
$
$

1.12
(0.05)
1.07

Earnings (loss) from continuing operations applicable to Morgan Stanley common shareholders

$

734

$

630

$

1,471

$

734

$

630

$

1,667

Diluted EPS Adjustments:
Income impact of assumed conversions:
Preferred stock dividends (Series B - Mitsubishi)

0

Earnings (loss) from continuing operations applicable to Morgan Stanley common shareholders
Earnings (loss) from discontinued operations applicable to Morgan Stanley common shareholders
Earnings (loss) applicable to common shareholders plus assumed conversions

0

2$

Average diluted common shares outstanding and common stock equivalents (millions)

736

(30)
$

1,472

Earnings per diluted share:
Income from continuing operations
Discontinued operations
Earnings per diluted share

$
$
$

0.50
0.50

196

600

(60)
$

1,448

$
$
$

0.43
(0.02)
0.41

1,607
1,626

$
$
$

1.03
(0.04)
0.99

Note: - 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 page 13 of Morgan Stanley's Financial Supplement accompanying this release.

10