Media Relations: Michele Davis 212-761-9621

Investor Relations: Sharon Yeshaya 212-761-1632

Morgan Stanley Reports Second Quarter 2016:


Net Revenues of $8.9 Billion and Earnings per Diluted Share of $0.75

Strong Performance in Sales & Trading; Investment Banking Ranked #2 in Global
Announced and Completed M&A, Global Equity and Global IPOs1



Wealth Management Pre-Tax Margin of 22.5%2,3Quarterly Dividend Increased 33% to $0.20 per Share; Announced Share Repurchase of up
to $3.5 Billion through 2Q174

NEW YORK, July 20, 2016 – Morgan Stanley (NYSE: MS) today reported net revenues of $8.9 billion for thesecond quarter ended June 30, 2016 compared with $9.7 billion a year ago.5 For the current quarter, net income
applicable to Morgan Stanley was $1.6 billion, or $0.75 per diluted share,6 compared with income of $1.8 billion,5
or $0.85 per diluted share,6 for the same period a year ago.
The prior year quarter included DVA revenue of $182 million. Excluding DVA in the prior year quarter, net
income applicable to Morgan Stanley was $1.7 billion, or $0.79 per diluted share.7
Compensation expense of $4.0 billion decreased from $4.4 billion a year ago partially driven by lower revenues.
Non-compensation expenses of $2.4 billion decreased from $2.6 billion a year ago. Results reflect execution of the
Firm’s disciplined expense management strategy.
The annualized return on average common equity was 8.3 percent in the current quarter.8

Business Overview
Institutional Securities net revenues were $4.6 billion reflecting continued strength in Equity sales and trading
and solid performance in Fixed Income sales and trading, partly offset by lower underwriting results.



Wealth Management net revenues were $3.8 billion and pre-tax margin was 22.5%. Fee based asset flows forthe quarter were $12.0 billion.



Investment Management reported net revenues of $583 million with assets under management or supervisionof $406 billion.

3

James P. Gorman, Chairman and Chief Executive Officer, said, “Our results this quarter reflect solid performance inan improved but still fragile environment. In the midst of market uncertainty, we maintained our leadership positions
across our core franchises and continued our focus on prudent risk management and judicious expense control. We
remain committed to executing for our clients and delivering on our strategic priorities for our shareholders.”

1Summary of Institutional Securities Results(dollars in millions)

Net
Revenue

Income2Q 2016 (a)$4,578

1Q 2016 (a)$3,714(a)$5,172

2Q 2015a)Excluding DVA 9Net
Pre-Tax

As Reported
Pre-Tax

Revenue

Income$1,506$4,578$1,506$908$3,714$908$1,622$4,990$1,440Effective January 1, 2016, the Firm early adopted the provision of new accounting guidance that requires changes
in DVA to be presented in other comprehensive income as opposed to net revenues. Results for 2015 were notrestated pursuant to this guidance, and as such, 2Q 2015 is the only period where net revenues and pre-tax income5
are adjusted for the impact of DVA.

INSTITUTIONAL SECURITIESInstitutional Securities reported pre-tax income from continuing operations of $1.5 billion compared with pre-tax
income of $1.6 billion a year ago, or $1.4 billion excluding DVA.5,9 Net revenues for the current quarter were $4.6
billion compared with $5.2 billion a year ago, or $5.0 billion excluding DVA.5,9 The following discussion for sales
and trading excludes DVA from the prior year period.
Advisory revenues of $497 million increased from $423 million a year ago on higher levels of completed M&A.
Equity underwriting revenues of $266 million decreased from $489 million in the prior year quarter reflecting
significantly lower market volumes. Fixed income underwriting revenues of $345 million decreased from $528
million in the prior year quarter primarily reflecting lower bond and loan fees.

Equity sales and trading net revenues of $2.1 billion decreased from $2.3 billion a year ago reflecting reduced
volumes and levels of activity in Asia, partially offset by better performance in Europe and the U.S.5,10

Fixed Income & Commodities sales and trading net revenues of $1.3 billion were consistent with the prior year
period, despite the sale of the Oil Merchanting business in the fourth quarter of 2015.5,10

Investment revenues of $76 million increased from $16 million a year ago driven by mark-to-market gains on
business related investments.

Other revenues of $138 million decreased from $212 million a year ago reflecting mark-to-market losses on held
for sale loans and lower results in our Japanese joint venture Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.



Compensation expenses of $1.6 billion decreased from $1.9 billion a year ago on lower revenues and continued
expense discipline. Non-compensation expenses of $1.4 billion for the current quarter decreased from $1.7
billion a year ago primarily reflecting lower volume driven expenses and broad based expense discipline.

Morgan Stanley’s average trading Value-at-Risk (VaR) measured at the 95% confidence level was $46 million forthe current quarter, unchanged from the first quarter of 2016 and compared with $54 million in the second quarter ofthe prior year.112

Summary of Wealth Management Results(dollars in millions)
Net
Revenues

Pre-Tax
Income2Q 2016$3,811$859

1Q 2016$3,668$786

2Q 2015$3,875$885

WEALTH MANAGEMENT
Wealth Management reported pre-tax income from continuing operations of $859 million compared with $885
million in the second quarter of last year. The quarter’s pre-tax margin was 22.5%.3 Net revenues for the current
quarter were $3.8 billion compared with $3.9 billion a year ago.


Asset management fee revenues of $2.1 billion decreased from $2.2 billion a year ago reflecting lower averagefee rates related to fee-based accounts and lower market levels, partially offset by positive flows.

Transactional revenues12 of $798 million decreased from $872 million a year ago primarily reflecting lower
commission revenues and lower levels of new issue activity.



Net interest income of $829 million increased from $737 million a year ago on higher deposit and loan balances.
Wealth Management client liabilities were $69 billion at quarter end, an increase of $11 billion compared withthe prior year quarter.13

Compensation expense of $2.2 billion and non-compensation expenses of $800 million for the current quarter
were relatively unchanged from a year ago.



Total client assets were $2.0 trillion and client assets in fee based accounts were $820 billion at quarter end. Fee
based asset flows for the quarter were $12.0 billion.



Wealth Management representatives of 15,909 produced average annualized revenue per representative of$959,000 in the current quarter.

3

Summary of Investment Management Results(dollars in millions)
Net
Revenues

Pre-Tax
Income2Q 2016

$583

$118

1Q 2016$477$44

2Q 2015

$751

$220

INVESTMENT MANAGEMENT
Investment Management reported pre-tax income from continuing operations of $118 million compared with pre-tax
income of $220 million in the second quarter of last year.
Net revenues of $583 million decreased from $751 million in the prior year primarily reflecting lower investment
gains and carried interest in infrastructure and private equity investments. Asset management fees wererelatively unchanged from a year ago.

Compensation expense for the current quarter of $238 million decreased from $308 million a year ago,
principally due to a decrease in deferred compensation associated with carried interest. Non-compensation
expenses of $227 million were relatively unchanged from a year ago.



Assets under management or supervision at June 30, 2016 were $406 billion. The business recorded net outflows
of $1.7 billion in the current quarter.

CAPITAL
As of June 30, 2016, the Firm’s Common Equity Tier 1 and Tier 1 risk-based capital ratios under U.S. Basel III
Advanced Approach transitional provisions were approximately 16.9% and 18.8%, respectively.14
As of June 30, 2016, the Firm estimates its pro forma fully phased-in Common Equity Tier 1 risk-based capital ratio(under U.S. Basel III Advanced Approach) and pro forma fully phased-in Supplementary Leverage Ratio to beapproximately 15.8% and 6.1%, respectively.14,15,16
At June 30, 2016, book value and tangible book value per common share were $36.29 and $31.39,17 respectively,
based on approximately 1.9 billion shares outstanding.

OTHER MATTERS
The effective tax rate from continuing operations for the current quarter was 33.5%.
During the quarter ended June 30, 2016, the Firm repurchased approximately $625 million of its common stock orapproximately 23 million shares. The Firm announced a share repurchase of up to $3.5 billion of common stock
beginning in the third quarter of 2016 through the end of second quarter of 2017.4
The Board of Directors declared a $0.20 quarterly dividend per share, payable on August 15, 2016 to commonshareholders of record on July 29, 2016.4
In addition, the Firm announced on July 19, 2016 the redemption of all its issued and outstanding Trust Preferred4

securities.
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 more than 43 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.

###(See Attached Schedules)

NOTICE:The information provided herein may include certain non-GAAP financial measures. The definition of suchmeasures or reconciliation of such metrics 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 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 which reflect
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 Firm, please see “Forward-Looking Statements”
immediately preceding Part I, Item 1, “Competition” and “Supervision and Regulation” in Part I, Item 1, “Risk
Factors” in Part I, Item 1A, “Legal Proceedings” in Part I, Item 3, “Management’s Discussion and Analysis ofFinancial Condition and Results of Operations” in Part II, Item 7 and “Quantitative and Qualitative Disclosuresabout Market Risk” in Part II, Item 7A in the Firm’s Annual Report on Form 10-K for the year ended December
31, 2015 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

1

Source: Thomson Reuters – for the period of January 1, 2016 to June 30, 2016 as of July 1, 2016.

2

The Firm prepares its Consolidated Financial Statements using accounting principles generally accepted in the United States(“U.S. GAAP” or “GAAP”). From time to time, Morgan Stanley may disclose certain “non-GAAP financial measures” in thecourse of its earnings releases, earnings conference calls, financial presentations and otherwise. The Securities and Exchange
Commission (SEC) defines a “non-GAAP financial measure” as a numerical measure of historical or future financial
performance, financial positions, or cash flows that is subject to adjustments that effectively exclude, or include amounts fromthe 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 investors and analysts in order to provide them withgreater transparency about, or an alternative method for assessing, our financial condition, operating results, or prospective
regulatory capital requirements. 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, we will also generally define it or present the most directly comparable financial measure calculated and presented inaccordance with U.S. GAAP, along with a reconciliation of the differences between the non-GAAP financial measure we
reference and such comparable GAAP financial measure.
3

Pre-tax margin is a non-GAAP financial measure that the Firm considers useful for investors and analysts to assess operating
performance. Pre-tax margin represents income (loss) from continuing operations before taxes divided by net revenues, two U.S.
GAAP reported amounts without adjustment.
4

On June 29, 2016, the Firm announced that it received no objection from the Board of Governors of the Federal Reserve
System (“Federal Reserve Board”) to the Firm’s 2016 capital plan (“Capital Plan”). The Capital Plan includes the repurchase of
up to $3.5 billion of outstanding common stock for the four quarters beginning in the third quarter of 2016 through the end of thesecond quarter of 2017, an increase from $2.5 billion for the comparable four quarter period in the 2015 Capital Plan, as well as
an increase in the Firm’s quarterly common stock dividend to $0.20 per share from the current $0.15 per share, beginning withthe common stock dividend declared in the third quarter of 2016. The Federal Reserve Board also asked the Firm to submit anadditional capital plan by December 29, 2016 addressing weaknesses identified in the Firm’s capital planning process. Sharerepurchases under the Firm’s existing program authorized by the Board of Directors will be exercised from time to time throughJune 30, 2017, at prices the Firm deems appropriate subject to various factors, including the Firm’s capital position and market
conditions.

5

Effective January 1, 2016, the Firm early adopted the provision of new accounting guidance that requires unrealized gains andlosses from Morgan Stanley’s debt-related credit spreads and other credit factors (Debt Valuation Adjustments, or DVA) to bepresented in Other comprehensive income as opposed to net revenues and net income. Results for 2015 are not restated pursuant
to that guidance.
6

Includes preferred dividends and other adjustments related to the calculation of earnings per share for the second quarter of2016 and 2015 of approximately $157 million and $142 million, respectively. Refer to page 13 of Morgan Stanley’s Financial
Supplement accompanying this release for the calculation of earnings per share.

6

7

Excluding DVA from net income applicable to Morgan Stanley and earnings (loss) per diluted share amounts are non-GAAP
financial measures that the Firm considers useful for investors and analysts to allow better comparability of period-to-period
operating performance. The reconciliation of net income (loss) applicable to Morgan Stanley, earnings (loss) per diluted share
applicable to Morgan Stanley common shareholders from a GAAP to non-GAAP basis is as follows (Net income (loss)
reconciliation and average diluted shares are presented in millions):

Net income (loss) applicable to MS - GAAP
DVA impact
Net income (loss) applicable to MS - Non-GAAP

2Q 2015$1,807$119$1,688

Earnings (loss) per diluted share - GAAP
DVA impact
Earnings (loss) per diluted share - Non-GAAP

$0.85
$0.06
$0.79

Average diluted shares - GAAP

1,960

8

Annualized return on average common equity (ROE) is a non-GAAP financial measure that the Firm considers useful forinvestors and analysts to allow better comparability of period-to-period operating performance. The calculation of ROE uses net
income applicable to Morgan Stanley less preferred dividends as a percentage of average common equity.
9

Institutional Securities net revenues and pre-tax income (loss), excluding DVA, is a non-GAAP financial measure that the Firm
considers useful for investors and analysts to allow for better comparability of period-to-period operating performance. The
reconciliation of net revenues and pre-tax income (loss) from a GAAP to non-GAAP basis is as follows (amounts are presented
in millions - also see footnote 5):

Net revenues - GAAP
DVA impact
Net revenues - Non-GAAP
Pre-tax income (loss) - GAAP
DVA impact
Pre-tax income (loss) - Non-GAAP

7

2Q 2016$4,578n/a$4,578

1Q 2016$3,714n/a$3,714

2Q 2015$5,172$182$4,990$1,506n/a$1,506

$908
n/a
$908

$1,622$182$1,440

10

Sales and trading net revenues, including Fixed Income & Commodities (FIC) and Equity sales and trading net revenues
excluding DVA are non-GAAP financial measures that the Firm considers useful for investors and analysts to allow better
comparability of period-to-period operating performance. The reconciliation of sales and trading, including FIC and Equity sales
and trading net revenues from a GAAP to non-GAAP basis is as follows (amounts are presented in millions – also see footnote
5):

2Q 2016$3,256n/a$3,256

2Q 2015$3,504$182$3,322FIC Sales & Trading - GAAP
DVA impact
FIC Sales & Trading - Non-GAAP$1,297n/a$1,297$1,377$110$1,267

Equity Sales & Trading - GAAP
DVA impact
Equity Sales & Trading - Non-GAAP$2,145n/a$2,145$2,342$72$2,270

Sales & Trading - GAAP
DVA impact
Sales & Trading - Non-GAAP11

VaR represents the loss amount that one would not expect to exceed, on average, more than five times every one hundred
trading days in the Firm’s trading positions if the portfolio were held constant for a one-day period. Further discussion of thecalculation of VaR and the limitations of the Firm’s VaR methodology is disclosed in Part II, Item 7A “Quantitative andQualitative Disclosures about Market Risk” included in the 2015 Form 10-K. Refer to page 6 of Morgan Stanley’s Financial
Supplement accompanying this release for the VaR disclosure.
12

Transactional revenues include investment banking, trading, and commissions and fee revenues.

13

Wealth Management client liabilities reflect U.S. Bank lending and broker dealer margin activity.

14

The Firm’s binding risk-based capital ratios for regulatory purposes under U.S. Basel III are the lower of the capital ratios
computed under the (i) standardized approaches for calculating credit risk risk-weighted assets (RWAs) and market risk RWAs
(the “Standardized Approach”); and (ii) applicable advanced approaches for calculating credit risk, market risk and operationalrisk RWAs (the “Advanced Approach”). At June 30, 2016, the binding ratio is based on the Advanced Approach transitionalrules. For information on the calculation of regulatory capital and ratios for prior periods, please refer to Part II, Item 7“Liquidity and Capital Resources - Regulatory Requirements” in the Firm’s 2015 10-K and Part I, Item 2 “Liquidity and Capital
Resources – Regulatory Requirements” in the Firm’s 10-Q for the quarter ended March 31, 2016.
15

The pro forma fully phased-in Common Equity Tier 1 risk-based capital ratio (Common Equity Tier 1) and pro forma fully
phased-in Supplementary Leverage Ratio (SLR) are non-GAAP financial measures that the Firm considers to be useful measures
for investors and analysts to evaluate compliance with new regulatory capital requirements that have not yet become effective.

16

U.S. Basel III requires the Firm to disclose information related to its supplementary leverage ratio beginning on January 1,
2015, which through to the end of 2017 will include the effects of transitional provisions. The supplementary leverage ratio will
become effective as a capital standard on January 1, 2018. Specifically, beginning on January 1, 2018, the Firm must maintain a
Tier 1 supplementary leverage capital buffer of at least 2% in addition to the 3% minimum supplementary leverage ratio (for a
total of at least 5%), in order to avoid limitations on capital distributions, including dividends and stock repurchases, anddiscretionary bonus payments to executive officers. The Firm’s pro forma Supplementary Leverage Ratio estimate utilizes a fully
phased-in U.S. Basel III Tier 1 capital numerator and a denominator of approximately $1.07 trillion. The Firm’s estimates are
subject to risks and uncertainties that may cause actual results to differ materially from estimates based on these regulations.
Further, these expectations should not be taken as projections of what the Firm’s supplementary leverage ratios or earnings,

8

assets or exposures will actually be at future dates. See “Risk Factors” in Part I, Item 1A in the 2015 Form 10-K for a discussionof risks and uncertainties that may affect the future results of the Firm.
17

Tangible common equity and tangible book value per common share are non-GAAP financial measures that the Firm
considers to be useful measures of capital adequacy for investors and analysts. Tangible common equity equals common equity
less goodwill and intangible assets net of allowable mortgage servicing rights deduction. Tangible book value per common shareequals tangible common equity divided by period end common shares outstanding.

9Consolidated Financial Summary(unaudited, dollars in millions, except for per share data)

Net revenues
Institutional Securities
Wealth Management
Investment Management
Intersegment Eliminations
Net revenues
Income (loss) from continuing operations before tax
Institutional Securities
Wealth Management
Investment Management
Income (loss) from continuing operations before tax
Net Income (loss) applicable to Morgan Stanley
Institutional Securities
Wealth Management
Investment Management
Net Income (loss) applicable to Morgan Stanley
Earnings (loss) applicable to Morgan Stanley common shareholders

June 30, 2016

Quarter Ended
Mar 31, 2016 June 30, 2015

$

$

$

$

$

$

4,578
3,811
583
(63)
8,909

1,506
859
118
2,483

$

988
516
78
1,582

$

$
$

$

$

$

$

3,714
3,668
477
(67)
7,792

908
786
44
1,738

$

$

$

$

$

Percentage Change From:Six Months Ended
Mar 31, 2016 June 30, 2015 June 30, 2016 June 30, 2015

5,172
3,875
751
(55)
9,743

23%
4%
22%
6%
14%

(11%)
(2%)
(22%)
(15%)
(9%)

1,622
885
220
2,727

66%
9%
168%
43%

(7%)
(3%)
(46%)
(9%)

67%
5%
56%
40%

(9%)
(8%)
(51%)
(12%)

$

591
493
50
1,134

$

1,087
561
159
1,807

1,425

$

1,055

$

1,665

35%

0.75
0.75

$
$

0.55
0.55

$
$

0.85
0.79

36%
36%

$

$

$

$

$

8,292
7,479
1,060
(130)
16,701

2,414
1,645
162
4,221

$

$

$

$

$

Percentage
Change10,630
7,709
1,420
(109)
19,650

(22%)
(3%)
(25%)
(19%)
(15%)

3,435
1,740
407
5,582

(30%)
(5%)
(60%)
(24%)

(44%)
(8%)
(52%)
(35%)

$

1,579
1,009
128
2,716

$

2,837
1,096
268
4,201

(14%)

$

2,481

$

3,979

(38%)

(12%)
(5%)

$
$

1.30
1.30

$
$

2.03
1.93

(36%)
(33%)

Financial Metrics:
Earnings per diluted share
Earnings per diluted share excluding DVA
Return on average common equity
Return on average common equity excluding DVA

8.3%
8.3%

6.2%
6.2%

9.9%
9.1%

7.2%
7.2%

12.0%
11.3%

Notes: - Effective January 1, 2016, the Firm early adopted the provision of new accounting guidance that requires unrealized gains and losses from Morgan Stanley’s debt-related credit spreads
and other credit factors (Debt Valuation Adjustments, or DVA) to be presented in other comprehensive income as opposed to net revenues and net income. This change is reflected in
the consolidated results and the Institutional Securities segment for 2016. Results for 2015 were not restated pursuant to this guidance.
- Refer to End Notes, GAAP to Non-GAAP Measures and Definition of Performance Metrics on pages 14-16 from the Financial Supplement for additional information related to the calculationof the financial metrics.
10

Consolidated Income Statement Information(unaudited, dollars in millions)

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

June 30, 2016

Quarter Ended
Mar 31, 2016 June 30, 2015

$

$

1,224
2,746
126
1,020
2,637
243
7,996

1,107
2,065
(34)
1,055
2,620
80
6,893

$

Percentage Change From:Mar 31, 2016 June 30, 2015

1,614
2,973
261
1,158
2,742
297
9,045

11%
33%
*
(3%)
1%
*
16%

(24%)
(8%)
(52%)
(12%)
(4%)
(18%)
(12%)

Six Months Ended
June 30, 2016 June 30, 2015
$

2,331
4,811
92
2,075
5,257
323
14,889$Percentage
Change

2,971
6,623
527
2,344
5,423
468
18,356

(22%)
(27%)
(83%)
(11%)
(3%)
(31%)
(19%)

Interest income
Interest expense
Net interest
Net revenues

1,667
754
913
8,909

1,747
848
899
7,792

1,386
688
698
9,743

(5%)
(11%)
2%
14%

20%
10%
31%
(9%)

3,414
1,602
1,812
16,701

2,870
1,576
1,294
19,650

19%
2%
40%
(15%)

Non-interest expenses:
Compensation and benefits

4,015

3,683

4,405

9%

(9%)

7,698

8,929

(14%)

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

329
484
429
154
547
468
2,411

329
465
442
134
514
487
2,371

351
487
438
179
598
558
2,611

-4%
(3%)
15%
6%
(4%)
2%

(6%)
(1%)
(2%)
(14%)
(9%)
(16%)
(8%)

658
949
871
288
1,061
955
4,782

693
950
853
329
1,084
1,230
5,139

(5%)
-2%
(12%)
(2%)
(22%)
(7%)

6,426

6,054

7,016

6%

(8%)

12,48014,068

(11%)

2,483
833
1,650
(4)
1,646
64
1,582
157
1,425

1,738
578
1,160
(3)
1,157
23
1,134
79
1,055

2,727
894
1,833
(2)
1,831
24
1,807
142
1,665

43%
44%
42%
(33%)
42%
178%
40%
99%
35%

(9%)
(7%)
(10%)
(100%)
(10%)
167%
(12%)
11%
(14%)

4,221
1,411
2,810
(7)
2,803
87
2,716
235
2,481

5,582
1,281
4,301
(7)
4,294
93
4,201
222
3,979

(24%)
10%
(35%)
-(35%)
(6%)
(35%)
6%
(38%)

Total non-interest expenses
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 applicable to nonredeemable noncontrolling interests
Net income (loss) applicable to Morgan Stanley
Preferred stock dividend / Other
Earnings (loss) applicable to Morgan Stanley common shareholders
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

$

$

$

$

$

$

$

$

$

$

28%
45%
27%

22%
47%
30%

28%
45%
27%

25%
46%
29%

28%
45%
26%

33.5%

33.3%

32.8%

33.4%

22.9%

Notes: - Refer to End Notes, GAAP to Non-GAAP Measures and Definition of Performance Metrics on pages 14-16 from the Financial Supplement for additional information.
11

Earnings Per Share Summary(unaudited, dollars in millions, except for per share data)

Income (loss) from continuing operations
Net income applicable to nonredeemable noncontrolling interests
Income (loss) from continuing operations applicable to Morgan Stanley
Less: Preferred Dividends and allocation of earnings to Participating Restricted Stock Units
Income (loss) from continuing operations applicable to Morgan Stanley

June 30, 2016

Quarter Ended
Mar 31, 2016 June 30, 2015$$

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

(4)
0
0
(4)
$

Average basic common shares outstanding (millions)
Earnings per basic share:
Income from continuing operations
Discontinued operations
Earnings per basic share

1,425

$
$
$

0.77
(0.01)
0.76

$

0.75
0.75

$

1,055

$

1,883
$
$
$

1,899
$
$
$

1,160
23
1,137
79
1,058
(3)
0
0
(3)

1,866

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

1,650
64
1,586
157
1,429

0.56
0.56

$
$
$

1,915
$
$
$

0.55
0.55

$
$
$

Percentage Change From:Mar 31, 2016 June 30, 2015

1,833
24
1,809
142
1,667

42%
178%
39%
99%
35%

(10%)
167%
(12%)
11%
(14%)

(2)
0
0
(2)

(33%)
--(33%)(100%)--(100%)

1,665

35%

(14%)

1,919

(1%)

(3%)

0.87
0.87

38%
*
36%

(11%)
*
(13%)

1,960

(1%)

(3%)

0.85
0.85

36%
-36%

(12%)
-(12%)

Notes: - Refer to End Notes, GAAP to Non-GAAP Measures and Definition of Performance Metrics on pages 14-16 from the Financial Supplement for additional information.
12

Six Months Ended
June 30, 2016 June 30, 2015

$

2,810
87
2,723
235
2,488

$

(7)
0
0
(7)
$

2,481

(7)
0
0
(7)
$

1,875
$
$
$

1.33
(0.01)
1.32

$
$
$

1,907
$
$
$

1.30
1.30

4,301
93
4,208
222
3,986

$
$
$

Percentage
Change

(35%)
(6%)
(35%)
6%
(38%)
-----

3,979

(38%)

1,922

(2%)

2.07
2.07

(36%)
*
(36%)

1,962

(3%)

2.03
2.03

(36%)
-(36%)