Media Relations: Jeanmarie McFadden 212-761-2433

Investor Relations: Celeste Mellet Brown 212-761-3896

Morgan Stanley Reports Third Quarter 2011:


Net Revenues of $9.9 Billion; Income from Continuing Operations of $1.14 per
Diluted Share

Results Included Revenues of $3.4 Billion, or $1.12 per Diluted Share, from the
Widening of Morgan Stanley’s Debt-Related Credit SpreadsStrong Performance in Equity Sales & Trading, Interest Rates and Commodities;
Ranked #1 in Global Completed M&A; Net New Assets of $15.5 Billion in Global
Wealth Management

NEW YORK, October 19, 2011 – Morgan Stanley (NYSE: MS) today reported income of $2.2 billion, or $1.14
per diluted share,1 from continuing operations applicable to Morgan Stanley for the third quarter ended
September 30, 2011 compared with income of $314 million, or $0.05 per diluted share, for the same period ayear ago. Net revenues were $9.9 billion for the current quarter compared with $6.8 billion a year ago. Results
for the current quarter included positive revenue of $3.4 billion, or $1.12 per diluted share, compared withnegative revenue of $731 million a year ago related to changes in Morgan Stanley’s debt-related credit spreads
and other credit factors (Debt Valuation Adjustment, DVA).2, 3
The Firm’s compensation expense for the current quarter was $3.7 billion with a compensation to net revenue
ratio of 37%. This ratio was affected by DVA which increased net revenues in the current period. Noncompensation expenses of $2.5 billion reflected higher levels of business activity and costs associated with the
U.K. bank levy.
For the current quarter, net income applicable to Morgan Stanley, including discontinued operations, was $1.15
per diluted share, compared with a net loss of $0.07 per diluted share in the third quarter of 2010.4

Business Highlights


Investment Banking revenues were $864 million. The Firm ranked #1 in global completed M&A and #2 inglobal announced M&A, global IPOs and global Equity.5

Sales and trading net revenues were $5.4 billion and included positive revenue of $3.4 billion related to
DVA.3 Equity sales and trading net revenues reflected strength in derivatives. Fixed Income andCommodities sales and trading net revenues included strong results in interest rate products and commodities.



Global Wealth Management Group delivered net revenues of $3.3 billion, with net new assets for the quarterof $15.5 billion, a record since the inception of the Morgan Stanley Smith Barney joint venture (MSSB), andnet flows in fee-based accounts of $10.1 billion. The quarter’s pre-tax margin improved to 11% from 9% a
year ago.6



Asset Management reported net revenues of $215 million and assets under management or supervision of$268 billion. Asset Management also has continued to deliver solid investment performance with over 76%

1

of its long-term strategies outperforming their respective benchmark on a 3, 5 and 10-year basis (as of August2011).
Morgan Stanley successfully completed its inaugural offering of JPY 46.5 billion (approximately $600
million) Uridashi bonds leveraging the strength of our partnership with Mitsubishi UFJ Financial Group, Inc.
(MUFG).

James P. Gorman, President and Chief Executive Officer, said, "Morgan Stanley effectively navigated turbulent
markets while consolidating our market share gains with Institutional clients and demonstrating resilience acrossthe Global Wealth Management business as evidenced by record net new assets flows since the formation of
MSSB. The Firm delivered progress across many of our key initiatives, increasing client penetration in equity
derivatives and interest rate products as well as achieving a significant milestone in the integration of MSSB with
the initial roll out of our new technology platform. With our robust liquidity, diverse funding, strong capital andunique strategic partnership with MUFG, Morgan Stanley is well positioned to deliver for clients in the longterm.”

Summary of Business Segment Results(dollars in millions)
Institutional Securities

Global Wealth Management
Group

Asset Management

Net
Revenues (1)Pre-Tax
IncomeNet
Revenues

Pre-Tax
IncomeNet
Revenues

Pre-Tax
Income3Q 2011$6,448$3,433$3,260$362$215($117)

2Q 2011$5,189$1,457$3,476

$322

$645

$165

3Q 2010$2,895$241$3,104

$281

$802

$279

(1)

Net revenues for 3Q 2011, 2Q 2011 and 3Q 2010 include positive (negative) revenue from DVA of $3.4 billion, $244 million and($731) million, respectively.

INSTITUTIONAL SECURITIESInstitutional Securities reported pre-tax income from continuing operations of $3.4 billion compared with $241
million in the third quarter of last year. Net revenues for the current quarter were $6.4 billion compared with $2.9
billion a year ago. DVA resulted in positive revenue of $3.4 billion in the current quarter compared with negative
revenue of $731 million a year ago.3 The quarter’s pre-tax margin was 53%.6 Due to the impact of DVA in thecomparative periods, the following discussion for sales and trading focuses on current period results.
Advisory revenues of $413 million increased 11% from a year ago reflecting higher levels of completed
activity.



Underwriting revenues of $451 million declined 29% from last year’s third quarter on lower levels of market
activity. Equity underwriting revenues of $239 million declined 8% from a year ago. Fixed income
underwriting revenues of $212 million declined 44% from last year’s third quarter primarily reflecting lower
high yield and investment grade bond issuance volumes.



Fixed Income and Commodities sales and trading net revenues were $3.9 billion and included positive
revenue of $2.8 billion related to DVA.3 Net revenues for the current quarter reflected market volatility andhigh levels of client activity in interest rate and currency products as well as commodities, partly offset bylosses in credit products due to the stressed credit environment.

2

Equity sales and trading net revenues were $2.0 billion and included positive revenue of $620 million related
to DVA.3 Results in the cash and derivatives businesses reflected high levels of client activity and market
volumes.



Other sales and trading net losses of $443 million, primarily reflected writedowns associated with corporate
lending activity.

Compensation expense for the current quarter was $1.6 billion with compensation to net revenue ratio of
24%. This ratio was affected by DVA which increased net revenues in the current period. Noncompensation expenses of $1.5 billion increased from $1.2 billion a year ago primarily reflecting higher
levels of business activity and costs associated with the U.K. bank levy.

Morgan Stanley’s average trading Value-at-Risk measured at the 95% confidence level was $130 million
compared with $145 million in the second quarter of 2011 and $142 million in the third quarter of the prioryear.

GLOBAL WEALTH MANAGEMENT GROUP
Global Wealth Management Group reported pre-tax income from continuing operations of $362 million
compared with $281 million in the third quarter of last year. The quarter’s pre-tax margin was 11%.6 Income
after the non controlling interest allocation to Citigroup Inc. and before taxes was $310 million.7


Net revenues of $3.3 billion increased from $3.1 billion a year ago primarily reflecting higher asset
management revenues and commissions partly offset by net losses from investments associated with the
Firm’s deferred compensation and co-investment plans.



The compensation to net revenue ratio for the current quarter was 61% with compensation expense of $2.0
billion. Non-compensation expenses were $896 million compared with $913 million a year ago.



Total client assets were $1.6 trillion at quarter-end. Client assets in fee-based accounts were $465 billion andrepresented 30% of total client assets. Net new assets for the quarter were $15.5 billion and net new flows in
fee-based accounts were $10.1 billion.



The 17,291 global representatives at quarter-end achieved average annualized revenue per global
representative of $747,000 and total client assets per global representative of $90 million.

ASSET MANAGEMENT
Asset Management reported a pre-tax loss from continuing operations of $117 million compared with pre-tax
income from continuing operations of $279 million in last year’s third quarter.8Net revenues of $215 million decreased from $802 million a year ago as solid results in the Traditional AssetManagement business were meaningfully offset by losses on principal investments in the Merchant Banking
and Real Estate Investing business compared with gains in the prior year quarter.9The compensation to net revenue ratio for the current quarter was 62% with compensation expense of $133
million. Non-compensation expenses of $199 million decreased from $238 million a year ago.



Assets under management or supervision at September 30, 2011 of $268 billion increased from $266 billion ayear ago. The increase primarily reflected net customer inflows in Morgan Stanley’s liquidity funds, partly
offset by lower market levels. The business recorded net outflows of $5.8 billion in the current quartercompared with net inflows of $2.9 billion in the third quarter of last year.

3

CAPITAL
Morgan Stanley’s Tier 1 capital ratio, under Basel I, was approximately 15.1% and Tier 1 common ratio wasapproximately 13.1% at September 30, 2011.6, 10 The annualized return on average common equity fromcontinuing operations was 14.5% in the current quarter.
At September 30, 2011, it is expected that Risk Weighted Assets (RWAs) that are utilized in the Company’s
calculations of its regulatory capital ratios under Basel I (i.e., Total capital, Tier 1 capital and Tier 1 common)
will increase by an approximate net $44 billion from the $305 billion reported at June 30, 2011. Previously,
Morgan Stanley applied a capital treatment for OTC derivatives collateral that reduced the Company’s overall
RWAs based on regulatory reporting guidance received from the Federal Reserve. In October 2011, theCompany was advised by the Federal Reserve that, based on their further review concerning the application ofpre-existing regulatory policy, the Company should adjust its capital treatment for OTC derivatives collateral. In
all circumstances, the Company’s calculations have been done consistent with Federal Reserve guidance. Neither
the original capital treatment, nor the revision, carry through to Basel III, and as such, the Company’s previously
provided estimates of its Tier 1 common ratio under Basel III, currently and by the end of 2012, are not impacted.
At September 30, 2011, book value and tangible book value per common share were $31.29 and $27.79,11
respectively, based on approximately 1.9 billion shares outstanding.

OTHER MATTERS
The effective tax rate from continuing operations for the current quarter was 38.3% compared with 19.1% in theprior year third quarter.12 The increase in the tax rate from the prior year primarily reflected the change in thegeographic mix of earnings.
Morgan Stanley’s Board of Directors declared a $0.05 quarterly dividend per common share. The dividend ispayable on November 15, 2011 to common shareholders of record on October 31, 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.

###(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"

4

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, the Company’s
Quarterly Reports on Form 10-Q, including “Risk Factors” in Part II, Item 1A therein, and the Company’s
Current Reports on Form 8-K, including any amendments thereto.

5

1Includes preferred dividends and other adjustments related to the calculation of earnings per share of approximately $46
million for the quarter ended September 30, 2011 and $222 million for the quarter ended September 30, 2010. Refer to page
3 of Morgan Stanley’s Financial Supplement accompanying this release for the calculation of earnings per share.
2

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 and other credit factors (commonly referred to as “DVA”).

3

Due to DVA, sales and trading net revenue for the quarter ended September 30, 2011 included positive revenue of $3.4
billion (fixed income: $2.8 billion; equity: $0.6 billion) and sales and trading net revenue for the quarter ended September 30,
2010 included negative revenue of $731 million (fixed income: $464 million; equity: $196 million; other: $71 million).
4

Discontinued operations for the current quarter primarily reflected additional tax benefits associated with the sale of theretail asset management business to Invesco Ltd.

5

Source: Thomson Reuters – for the period of January 1, 2011 to September 30, 2011 as of October 3, 2011.

6

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 10) 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 MSSB non controlling interests divided by risk-weighted assets.
7

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.
8

Results for the third quarter of 2011 and 2010 included a pre-tax loss of $17 million and pre-tax income of $195 million,
respectively, related to principal investments held by certain consolidated real estate funds. The limited partnership interestsin these funds are reported in net income (loss) applicable to non controlling interests on page 11 of Morgan Stanley’s
Financial Supplement accompanying this release.
9

Results for the current quarter included losses of $13 million compared with gains of $203 million in the prior year quarter
related to principal investments held by certain consolidated real estate funds.
10

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. The definition of Tier 1 common equity may evolve in the future as regulatory rules may be implemented based on a
final proposal regarding non controlling interest as initially presented by the Basel Committee. These computations are
preliminary estimates as of October 19, 2011 (the date of this release) and could be subject to revision in Morgan Stanley’s
Quarterly Report on Form 10-Q for the quarter ended September 30, 2011.

11

Tangible common equity and Tangible book value per common share are non-GAAP financial measures that the Company
considers to be useful measures of capital adequacy. Tangible common equity equals common equity less goodwill andintangible assets net of allowable mortgage servicing rights deduction and including only the Company’s share of MSSB’s
goodwill and intangible assets. Tangible book value per common share equals tangible common equity divided by periodend common shares outstanding.

12

The quarter ended September 30, 2010 included a tax gain of $176 million associated with the repatriation of non-U.S.
earnings at a cost lower than originally estimated. Excluding the discrete tax gain, the effective tax rate for the quarter would
have been 19.1%.

6

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

Sept 30, 2011
Net revenues
Institutional Securities
Global Wealth Management Group
Asset Management
Intersegment Eliminations
Consolidated net revenues

6,448
3,260
215
(31)
9,892

$

3,433
362
(117)
0
3,678

$

$

$

2,064
169
(59)
0
2,174

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) from continuing operations before tax
Institutional Securities
Global Wealth Management Group
Asset Management
Intersegment Eliminations
Consolidated income (loss) from continuing operations before tax
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
June 30, 2011

Sept 30, 2010

5,189
3,476
645
(28)
9,282

$

1,457
322
165
0
1,944

$

$

$

990
180
19
0
1,189

2,153

$

$
$
$

1.15
0.01
1.16

$
$
$

1.14
0.01
1.15

$

$

$

$

Percentage Change From:
June 30, 2011
Sept 30, 2010

Nine Months Ended
Sept 30, 2011
Sept 30, 2010

2,895
3,104
802
(21)
6,780

24%
(6%)
(67%)
(11%)
7%

123%
5%
(73%)
(48%)
46%

$

241
281
279
0
801

136%
12%
*
-89%

*
29%
*
-*

$

108%
(6%)
*
-83%

*
17%
*
-*

$

$

99
144
71
0
314

(558)

$

(91)

*

$
$
$

(0.38)(0.38)$$$

0.07(0.14)(0.07)$$$(0.38)(0.38)$$$

0.05(0.12)(0.07)$$$$

15,22910,173
1,486(79)
26,809

$

5,287
1,032
175
0
6,494

$

$

$

3,768
532
29
0
4,329

*

$

*
*
*

*
*
*

*
*
*

*
*
*

12,748
9,283
1,865
(81)
23,815

19%
10%
(20%)
2%
13%

3,901
766
367
(15)
5,019

36%
35%
(52%)
*
29%

$

3,214
353
42
(12)
3,597

17%
51%
(31%)
*
20%

2,335

$

2,971

(21%)

$
$
$

1.45
0.02
1.47

$
$
$

2.04
0.18
2.22

(29%)
(89%)
(34%)

$
$
$

1.43
0.02
1.45

$
$
$

1.98
0.17
2.15

(28%)
(88%)
(33%)

$

$

Notes: - Results for the quarters ended September 30, 2011, June 30, 2011 and September 30, 2010 include positive (negative) revenue of $3,410 million, $244 million and $(731) million, respectively,
related to the movement in Morgan Stanley's credit spreads and other credit factors 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.
7

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

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

Sept 30, 2011

Quarter Ended
June 30, 2011

Sept 30, 2010

$

$

$

Notes:

(16%)

$

3,940

$

3,361

17%

42%
*
15%
(1%)
42%
4%

*
*
39%
13%
109%
46%

11,423
433
4,224
6,499
221
26,740

8,552
1,137
3,636
5,877
640
23,203

34%
(62%)
16%
11%
(65%)
15%

1,749
1,609
140
9,892

1,957
2,029
(72)
9,282

1,851
1,748
103
6,780

(11%)
(21%)
*
7%

(6%)
(8%)
36%
46%

5,560
5,491
69
26,809

5,334
4,722
612
23,815

4%
16%
(89%)
13%

3,685

4,675

3,685

(21%)

--

12,693

11,987

6%

386
447
460
145
462
629
2,529

401
416
448
154
494
750
2,663

399
332
412
134
460
557
2,294

(4%)
7%
3%
(6%)
(6%)
(16%)
(5%)

(3%)
35%
12%
8%
-13%
10%

1,189
1,268
1,353
446
1,384
1,982
7,622

1,190
1,051
1,223
421
1,351
1,573
6,809

-21%
11%
6%
2%
26%
12%

6,214

7,338

5,979

(15%)

4%

20,315

18,796

8%

$

3,678
1,410
2,268
25
2,293
94
2,199
46
2,153

$

1,944
542
1,402
4
1,406
213
1,193
1,751
(558)

$

801
(23)
824
(183)
641
510
131
222
(91)

89%
160%
62%
*
63%
(56%)
84%
(97%)
*

*
*
175%
*
*
(82%)
*
(79%)
*

$

6,494
1,696
4,798
31
4,829
469
4,360
2,025
2,335

$

5,019
653
4,366
270
4,636
769
3,867
896
2,971

29%
160%
10%
(89%)
4%
(39%)
13%
126%
(21%)

$

2,174
25
2,199

$

1,189
4
1,193

$

314
(183)
131

83%
*
84%

*
*
*

$

4,329
31
4,360

$

3,597
270
3,867

20%
(89%)
13%

Total non-interest expenses

Effective tax rate from continuing operations

(39%)

1,441
820
1,068
1,940
187
6,677

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

1,221

Percentage
Change

3,485
402
1,291
2,206
275
9,354

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

1,695

Nine Months Ended
Sept 30, 2011
Sept 30, 2010

4,961
(298)
1,484
2,184
390
9,752

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 noncontrolling interests
Net income (loss) applicable to Morgan Stanley
Preferred stock dividend / Other
Earnings (loss) applicable to Morgan Stanley common shareholders

1,031

Percentage Change From:
June 30, 2011
Sept 30, 2010

$

$

$

$

$

37%
37%
26%

21%
50%
29%

12%
54%
34%

24%
47%
28%

21%
50%
29%

38.3%

27.9%

*

26.1%

13.0%

- Pre-tax profit margin is a non-GAAP financial measure that the Firm considers to be a useful measure that the Firm and investors use to assess operating performance. Percentages represent
income from continuing operations before income taxes as a percentage of net revenues.
- The quarter ended June 30, 2011, preferred stock dividend/other included a one-time negative adjustment of approximately $1.7 billion related to the conversion of Series B Non-Cumulative
Non-Voting Perpetual Convertible Preferred Stock held by Mitsubishi UFJ Financial Group, Inc. (MUFG), into Morgan Stanley common stock.
- The quarter ended September 30, 2010 included a tax gain of $176 million associated with the repatriation of non-U.S. earnings at a cost lower than originally estimated. Excluding the discrete
tax gain, the effective tax rate for the quarter would have been 19.1%.
- Preferred stock dividend / Other includes allocation of earnings to Participating Restricted Stock Units and China Investment Corporation equity units.

8

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

Quarter Ended
Sept 30, 2011

Income (loss) from continuing operations
Net income (loss) from continuing operations applicable to noncontrolling interest
Income from continuing operations applicable to Morgan Stanley
Less: Preferred Dividends
Less: MUFG preferred stock conversion
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

$

2,268
94
2,174
(24)
-

$

Gain (loss) from discontinued operations after tax
Gain (loss) from discontinued operations after tax applicable to noncontrolling 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

$

1,402
213
1,189
(24)
(1,726)$

June 30, 2011

Sept 30, 2010

824
510
314
(220)
-

62%
(56%)
83%
-*

175%
(82%)
*
89%
--

Nine Months Ended
Sept 30, 2011$

Percentage

Sept 30, 2010

4,798
469
4,329
(268)
(1,726)$

Change

4,366
769
3,597
(660)
-

10%
(39%)
20%
59%
*

(561)

94

*

*

2,335

2,937

(20%)

0
(22)
2,128

0
(1)
(562)

0
(3)
91

-*
*

-*
*

0
(31)
2,304

(118)
(92)
2,727

*
66%
(16%)

(183)
0
(183)
0
1
(182)

*
-*
--*

*
-*
-*
*

270
0
270
(18)
(8)
244

(89%)
-(89%)
*
*
(87%)

(91)

*

*

2,971

(21%)

1,377

26%

34%

1,337

19%

2,153

Average basic common shares outstanding (millions)

Sept 30, 2010

2,150

$

25
0
25
0
0
25
$

Percentage Change From:

June 30, 2011

$

4
0
4
0
0
4
$

1,848

(558)

$

1,464

$

$

31
0
31
0
0
31
$

2,335

$

1,590

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

$
$
$

1.15
0.01
1.16

$
$
$

(0.38)(0.38)$$$

0.07(0.14)(0.07)

*
*
*

*
*
*

$
$
$

1.45
0.02
1.47

$
$
$

2.04
0.18
2.22

(29%)
(89%)
(34%)

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

$

2,128

$

(562)

$

91

*

*

$

2,304

$

2,727

(16%)

0
(16)

---

-*

588
75

*
*

75

*

*

3,390

(32%)

(182)
0

*
--

*
--

244
41

(87%)
*

3,675

(36%)

1,710

(6%)

1.98
0.17
2.15

(28%)
(88%)
(33%)

Diluted EPS Adjustments:
Income impact of assumed conversions:
Preferred stock dividends (Series B - Mitsubishi)
Assumed conversion of CIC
Earnings (loss) from continuing operations applicable to Morgan Stanley common shareholders

0
0
$

2,128

Earnings (loss) from discontinued operations applicable to Morgan Stanley common shareholders
Assumed conversion of CIC
Earnings (loss) applicable to common shareholders plus assumed conversions

$

25
0
$

2,153

Average diluted common shares outstanding and common stock equivalents (millions)
Earnings per diluted share:
Income from continuing operations
Discontinued operations
Earnings per diluted share

0
0

1.14
0.01
1.15

$

4
0
$

1,869

$
$
$

(562)

(558)

$

1,464

$
$
$

(0.38)(0.38)

$
$
$

(107)

*

*

1,443

28%

30%

0.05
(0.12)(0.07)

*
*
*

*
*
*

0
0
$

2,304
31
0

$

2,335

$

1,608

$
$
$

1.43
0.02
1.45

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 14 of the financial supplement
and Note 2 to the consolidated financial statements in the Firm's Annual Report on Form 10-K for the year ended December 31, 2010.

9

$

$
$
$