Morgan Stanley First Quarter 2022 Earnings Results
Morgan Stanley Reports Net Revenues of $14.8 Billion, EPS of $2.02 and ROTCE of 19.8%
NEW YORK, April 14, 2022 – Morgan Stanley (NYSE: MS) today reported net revenues of $14.8 billion for the firstquarter ended March 31, 2022 compared with $15.7 billion a year ago. Net income applicable to Morgan Stanley was$3.7 billion, or $2.02 per diluted share,1 compared with net income of $4.1 billion, or $2.19 per diluted share,1 for thesame period a year ago.
James P. Gorman, Chairman and Chief Executive Officer, said, “The Firm delivered a strong ROTCE of 20% in theface of market volatility and economic uncertainty, demonstrating the resilience of our global diversified business.
Institutional Securities navigated volatility on behalf of clients extraordinarily well, Wealth Management’s margin
proved resilient and the business added $142 billion net new assets in the quarter, and Investment Management
benefited from its diversification. The quarter’s results affirm our sustainable business model is well positioned todrive growth over the long term.”

Financial Summary2,3Highlights

Firm ($ millions, except per share data)

1Q 2022

1Q 2021

Net revenues$14,801$15,719

Provision for credit losses

$57

$(98)

Compensation expense$6,274$6,798Non-compensation expenses
Pre-tax income10$3,882$3,675$4,588$5,344

Net income app. to MS$3,666$4,12069%

67%

Earnings per diluted share

$2.02

$2.19

Book value per share$54.18$52.71

Tangible book value per share$39.91$38.97Return on equity

14.7%

16.9%

Return on tangible equity5

19.8%

21.1%

Expense efficiency ratio

7

Institutional Securities
Net revenues$7,657$8,577

Investment Banking$1,634$2,613Equity$3,174$2,875

Fixed Income$2,923$2,966$5,935$5,959$1,873$1,574

$97.2

$37.2

Net new assets ($ billions)$142.0$104.9Loans ($ billions)$136.7$104.9$1,335$1,314$1,447$1,419$(14.4)$16.3

Wealth Management
Net revenues
Fee-based client assets ($ billions)11
12

Fee-based asset flows ($ billions)
9

Investment Management
Net revenues
AUM ($ billions)13
14

Long-term net flows ($ billions)Media Relations: Wesley McDade 212-761-2430• The Firm delivered its second highest quarterly net
revenues4 of $14.8 billion on continued strong performanceand contributions across our businesses.
• The Firm delivered ROTCE of 19.8%5,6 in a volatile anduncertain market environment.
• The Firm maintained expense discipline and delivered anefficiency ratio of 69%6,7 while continuing to invest in ourbusinesses.
• Common Equity Tier 1 capital standardized ratio was 14.5%.

• Institutional Securities net revenues of $7.7 billion reflect
strong performance in Equity and Fixed Income on continued
strong client engagement in volatile markets and in Advisoryon higher completed M&A transactions.

• Wealth Management delivered a pre-tax margin of 26.5% or
27.8% excluding integration-related expenses.6,8 Results
reflect higher asset management fees and continued growthin bank lending. The business added net new assets of $142
billion, including an asset acquisition.9• Investment Management results reflect incremental feebased asset management revenues and higher average
AUM as a result of the acquisition of Eaton Vance.

Investor Relations: Leslie Bazos 212-761-5352

Institutional Securities
Institutional Securities reported net revenues for the current quarter of $7.7 billion compared with $8.6 billion a year
ago. Pre-tax income was $2.8 billion compared with $3.4 billion a year ago.10
Investment Banking revenues down 37% from a year ago:
• Advisory revenues nearly doubled from a year ago driven byhigher levels of completed M&A transactions.
• Equity underwriting revenues significantly decreased from ayear ago on lower issuances in line with market volumes inan uncertain market environment.
• Fixed income underwriting revenues decreased from a year
ago as macroeconomic conditions contributed to lower bondissuances.

($ millions)

1Q 2022

1Q 2021

Net Revenues$7,657$8,577

Investment Banking$1,634$2,613Advisory

$944

$480

Equity underwriting$258$1,502

Fixed income underwriting

$432

$631

Equity$3,174$2,875

Fixed Income$2,923$2,966

Other

$(74)

$123

Provision for credit losses

$44

$(93)

Total Expenses$4,826$5,299Compensation$2,604$3,114Non-compensation$2,222$2,185Equity net revenues up 10% from a year ago:
• Equity net revenues increased from a year ago reflecting
strong performance across businesses and geographies,
particularly in EMEA, as a result of continued client
engagement and the absence of a single client credit event a
year ago.
Fixed Income net revenues essentially unchanged from ayear ago:• Fixed Income net revenues were in line with a strong quartera year ago reflecting higher revenues in commodities andforeign exchange which benefitted from elevated levels ofclient activity and market volatility in the current quarter,
offset by lower revenues in credit products.
Other:• Other revenues decreased from a year ago driven by markto-market losses on investments associated with certain
employee deferred compensation plans and corporate loans
held for sale, net of related hedges.
Provision for credit losses:• Provision for credit losses increased from a year ago due to portfolio growth and the prior year quarter reflecting a
release in the allowance for credit losses.
Total Expenses:• Compensation expense decreased from a year ago primarily driven by reduced discretionary compensation on
lower revenues and a decline related to certain deferred compensation plans linked to investment performance.

2

Wealth Management
Wealth Management reported net revenues of $5.9 billion and pre-tax income of $1.6 billion10 in the current quarter, inline with a year ago, resulting in a reported pre-tax margin of 26.5% or 27.8% excluding the impact of integrationrelated expenses.6,8
Net revenues essentially unchanged from a year ago:($ millions)

1Q 2022

1Q 2021• Asset management revenues increased 14% reflecting
higher asset levels driven by positive fee-based flows andmarket appreciation from a year ago.

Net Revenues$5,935$5,959Asset management$3,626$3,191$635$1,228$1,540$1,385

Other

$134

$155

Provision for credit losses

$13

$(5)

• Transactional revenues15 decreased 20% excluding theimpact of mark-to-market losses on investments
associated with certain employee deferred compensationplans. Results reflect a decrease in client activity fromsignificantly elevated levels a year ago.

Transactional15
Net interest income• Net interest income increased from a year ago on
continued bank lending growth.

Total Expenses$4,349$4,364

Total Expenses:

Compensation$3,125$3,170Non-compensation$1,224$1,194• Compensation expense decreased driven by a decline
related to certain deferred compensation plans linked toinvestment performance, partially offset by higher
compensable revenues.

• Non-compensation expenses increased from a year ago primarily driven by higher professional services expenses
and investments in technology, partially offset by lower brokerage and clearing costs.

Investment Management
Investment Management reported net revenues of $1.3 billion and pre-tax income was $228 million compared with
$370 million a year ago.10 The comparisons of current year results to prior periods were impacted by the acquisition of
Eaton Vance completed on March 1, 2021.
Net revenues essentially unchanged from a year ago:($ millions)

1Q 2022

1Q 2021• Asset management and related fees increased from ayear ago driven by incremental revenues as a result of
the timing of the Eaton Vance acquisition. AUM were
impacted by market volatility and outflows in thecurrent period.

Net Revenues$1,335$1,314

Asset management and related fees

$1,388$1,103

Performance-based income and other

$(53)

$211

Total Expenses$1,107$944

Compensation

$545

$514

Non-compensation

$562

$430

• Performance-based income and other revenues
decreased from a year ago reflecting lower revenues
from carried interest and mark downs on investments
due to a decline in global asset prices and mark-tomarket losses on investments associated with certain
employee deferred compensation plans.
Total Expenses:•

Compensation expense increased from a year ago primarily driven by the Eaton Vance acquisition,6 partially offset
by a decline related to certain deferred compensation plans linked to investment performance and lower
compensation associated with carried interest.

• Non-compensation expenses increased from a year ago primarily driven by incremental expenses as a result of theEaton Vance acquisition.63

Other Matters• The Firm repurchased $2.9 billion of its outstanding common
stock during the quarter as part of its Share Repurchase
Program.
• The Board of Directors declared a $0.70 quarterly dividend
per share, payable on May 13, 2022 to common shareholdersof record on April 29, 2022.
• Common Equity Tier 1 capital standardized ratio was 14.5%,
down from a year ago, largely reflecting higher RWAs, thechange in Other comprehensive income (loss) and the Firm’s
capital actions.
• The effective tax rate for the quarter was 19.0%,20 whichreflected a higher benefit associated with employee sharebased payments from a year ago.

1Q 2022

1Q 2021

CET1 capital17

14.5%

16.7%

Tier 1 capital17

16.0%

18.5%

CET1 capital17

15.9%

17.4%

Tier 1 capital17

17.6%

19.2%

Tier 1 leverage18

6.8%

7.5%

SLR19

5.5%

6.7%

$2,872$2,13530

28

Average Price$95.20$77.47

Period End Shares (millions)

1,756

1,869

Tax Rate20

19.0%

22.0%

16

CapitalStandardized 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 $124 million and $138 million for the first 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

Firm net revenues represent the second highest record for a reported quarterly period after excluding the impact of debt valuation
adjustments (DVA), which was previously reflected in net revenues in prior periods, and reflecting the current reporting structure of the Firm.
Net revenues, excluding the impact of DVA, was a non-GAAP financial measure in those prior periods that was reconciled to thecomparable GAAP financial measure in the respective quarterly reports filed on Form 10-Q.
5Return on average tangible common equity is a non-GAAP financial measures that the Firm considers useful for analysts, investors andother stakeholders to allow comparability of period-to-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 apercentage of average tangible common equity. Tangible common equity, also a non-GAAP financial measure, represents common equity
less goodwill and intangible assets net of allowable mortgage servicing rights deduction.

6

The Firm’s and business segment’s first 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):

7

1Q 2022

1Q 2021

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

$ 10
97
$ 107
$ 82

$ 33
42
$ 75
$ 58

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

$1
74
$ 75
$ 57

$ 30
34
$ 64
$ 49

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

$9
23
$ 32
$ 25

$3
8
$ 11
$ 9

The Firm expense efficiency ratio represents total non-interest expenses as a percentage of net revenues.

8

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

9

Wealth Management net new assets represent client inflows, including dividends and interest, and asset acquisitions, less client outflows,
and exclude activity from business combinations/divestitures and the impact of fees and commissions. The current quarter ended March 31,
2022 includes $75 billion of fee-based assets acquired in an asset acquisition.

10

Pre-tax income represents income before taxes.

11
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.
12

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.

13

AUM is defined as assets under management.

14Long-term net flows include the Equity, Fixed Income and Alternative and Solutions asset classes and excludes the Liquidity and Overlay
Services asset class.

15

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.
16

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

17

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).
18

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.

19

The Firm’s supplementary leverage ratio (SLR) utilizes a Tier 1 capital numerator of approximately $80.2 billion and $84.1 billion, andsupplementary leverage exposure denominator of approximately $1.47 trillion and $1.26 trillion, for the first quarter of 2022 and 2021,
respectively. Based on a Federal Reserve interim final rule that was in effect until March 31, 2021, our SLR and supplementary leverage
exposure as of March 31, 2021 reflect the exclusion of U.S. Treasury securities and deposits at Federal Reserve Banks. The exclusion ofthese assets had the effect of increasing our SLR by 0.7% as of March 31, 2021.

20

The income tax consequences related to employee share-based payments are recognized in Provision for income taxes in the
consolidated income statement, and may be either a benefit or a provision. The impacts of recognizing excess tax benefits upon conversionof awards are $205 million and $82 million for the first quarter of 2022 and 2021, respectively.

7

Consolidated Income Statement Information(unaudited, dollars in millions)

Mar 31, 2022
Revenues:
Investment banking
Trading
Investments
Commissions and fees
Asset management
Other
Total non-interest revenues$

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

$

$

1,758
3,983
75
1,416
5,119
234
12,585

Quarter Ended
Dec 31, 2021
$

2,581
2,394
632
1,307
5,395
126
12,435

Mar 31, 2021$

Percentage Change From:
Dec 31, 2021
Mar 31, 2021

2,840
4,225
318
1,626
4,398
284
13,691

(32%)
66%
(88%)
8%
(5%)
86%
1%

(38%)
(6%)
(76%)
(13%)
16%
(18%)
(8%)

10%
35%
6%
2%

9%
6%
9%
(6%)

2,650
434
2,216
14,801

2,411
322
2,089
14,524

2,437
409
2,028
15,719

57

5

(98)

*

*

6,274

5,487

6,798

14%

(8%)

882
829
705
427
175
864
3,882

811
833
829
479
205
991
4,148

910
733
624
405
146
857
3,675

9%
-(15%)
(11%)
(15%)
(13%)
(6%)

(3%)
13%
13%
5%
20%
1%
6%

10,156

9,635

10,473

5%

(3%)

4,588
873
3,715
49
3,666
124
3,542

4,884
1,168
3,716
20
3,696
104
3,592

5,344
1,176
4,168
48
4,120
138
3,982

(6%)
(25%)
-145%
(1%)
19%
(1%)

(14%)
(26%)
(11%)
2%
(11%)
(10%)
(11%)

$

$

$

$

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)
Mar 31, 2022

Quarter Ended
Dec 31, 2021

Mar 31, 2021

$
$

$
$

$
$

Percentage Change From:
Dec 31, 2021
Mar 31, 2021

Financial Metrics:
Earnings per basic share
Earnings per diluted share

2.04
2.02

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

14.7%
19.8%

2.05
2.01
14.7%
19.8%

2.22
2.19

---

(8%)
(8%)

(1%)

(7%)

16.9%
21.1%

$
$

54.18
39.91

$
$

55.12
40.91

$
$

52.71
38.97

$

2.06
15.0%
20.3%

$

2.08
15.2%
20.4%

$

2.22
17.1%
21.4%

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

31%
42%
26%
69%
68%
19.0%

34%
38%
29%
66%
65%
23.9%

34%
43%
23%
67%
66%
22.0%

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

1,756

1,772

1,869

(1%)

(6%)

1,733
1,755

1,751
1,785

1,795
1,818

(1%)
(2%)

(3%)
(3%)

Worldwide employees

76,541

74,81470,975

2%

8%

Statistical Data:

Notes:- For the quarters ended March 31, 2022, December 31, 2021 and March 31, 2021, Firm results include pre-tax integration-related expenses of $107 million, $146 million and $75 million ($82 million,$114 million and $58 million after-tax) respectively, reported in the Wealth Management and Investment Management business segments.
- 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 andTerms, Supplemental Quantitative Details and Calculations, and Legal Notice for additional information.

9