Morgan Stanley Reports Fourth Quarter and Full Year 2018•

Fourth Quarter Net Revenues of $8.5 Billion1
and Earnings per Diluted Share of $0.80

James P. Gorman, Chairman and Chief Executive Officer,•

Record Full Year Net Revenues of $40.1 Billion1
and Net Income of $8.7 Billion; Earnings per
Diluted Share of $4.73•

Full Year ROE of 11.8% and ROTCE of 13.5%2,3

said, “In 2018 we achieved record revenues and earnings,
and growth across each of our business segments – despitea challenging fourth quarter. We delivered higher annual
returns, producing an ROE of 11.8% and ROTCE of 13.5%,
as we continued to invest in our businesses. While theglobal environment remains uncertain, our franchise is strong
and we are well positioned to pursue growth opportunities
and serve our clients.”

Financial Overview3
NEW YORK, January 17, 2019 – Morgan Stanley (NYSE: MS) today reported net revenues of $8.5 billion1 for the
fourth quarter ended December 31, 2018 compared with $9.5 billion a year ago. For the current quarter, net income
applicable to Morgan Stanley was $1.5 billion, or $0.80 per diluted share,4 compared with net income of $643 million,
or $0.26 per diluted share,4,5 for the same period a year ago. In the current quarter, the Firm recorded an intermittent
net discrete tax benefit of $111 million, or $0.07 per diluted share, primarily associated with new information pertaining
to the resolution of multi-jurisdiction tax examinations. The prior year fourth quarter included an intermittent net
discrete tax provision of $1.0 billion, or a loss of $0.58 per diluted share, primarily related to the enactment of the Tax
Cuts and Jobs Act.5
Compensation expense of $3.8 billion decreased from $4.3 billion a year ago on lower net revenues, partially offset bya reduction in the portion of discretionary incentive compensation subject to deferral (“compensation deferral
modification”). Non-compensation expenses of $2.9 billion increased from $2.8 billion a year ago.1
The annualized return on average common equity was 7.7% and the annualized return on average tangible common
equity was 8.8% in the current quarter.2

Fourth Quarter Business Overview

Fourth Quarter Summary of Segment Results(dollars in millions)• Firm net revenues were negatively impacted by the volatile
global market environment.
Net Revenues

1

Pre-Tax Income

6

4Q 2018 4Q 2017 4Q 2018 4Q 2017
Institutional Securities$3,839$4,523$780$1,235

Wealth Management$4,144$4,407$1,010$1,150

$684

$637

$74

$80

$8,548$9,500$1,857$2,471

Investment Management
Firm• Institutional Securities net revenues reflect strong results ininvestment banking with particular strength in M&A advisoryand solid results in equity sales and trading. Lower
performance in fixed income sales and trading reflects themarket volatility.
• Wealth Management net revenues were $4.1 billion with apre-tax margin of 24.4%.7 Results reflect the difficult
environment, seasonality and certain compensation-related
items.
• Investment Management net revenues were $684 million
with AUM8 of $463 billion.

Media Relations: Michele Davis 212-761-9621

Investor Relations: Sharon Yeshaya 212-761-1632

Institutional Securities

Institutional Securities reported pre-tax income from continuing operations of $780 million compared with $1.2
billion a year ago. Net revenues for the current quarter were $3.8 billion compared with $4.5 billion a year
ago.1

•

•

Investment Banking revenues of $1.4 billion were essentially unchanged from a year ago:

Advisory revenues of $734 million increased from $522 million a year ago on higher levels ofcompleted M&A activity across all regions.



Equity underwriting revenues of $323 million decreased from $416 million a year ago reflecting lower
revenues primarily on IPOs.



Fixed income underwriting revenues of $360 million decreased from $499 million a year ago driven bylower bond and loan issuances.

Sales and Trading net revenues of $2.5 billion decreased from $2.7 billion a year ago:

Equity sales and trading net revenues of $1.9 billion were essentially unchanged from a year ago
reflecting higher revenues in the financing business, partially offset by lower results in execution
services.

Fixed Income sales and trading net revenues of $564 million decreased from $808 million a year ago
reflecting lower results in credit and rates products due to unfavorable market making conditions that
resulted from significant credit spread widening and volatile rate movements, partially offset byincreases in commodities revenues.

Other sales and trading net losses of $6 million compared with net losses of $43 million a year ago
were positively impacted by corporate loan hedging activity and lower net funding costs, partially offset
by losses related to investments associated with certain employee deferred compensation plans.

•

Investment revenues were negative $52 million compared with positive revenues of $213 million a year
ago. The loss in the current quarter is principally due to market deterioration of a publicly tradedinvestment subject to sale restrictions, while the results in the prior year quarter reflect an increase in thevalue of business-related investments.

•

Other revenues were negative $13 million compared with positive revenues of $188 million a year ago
reflecting losses associated with corporate lending activity in the current quarter.

•

Compensation expense of $1.2 billion decreased from $1.6 billion a year ago on lower revenues, partially
offset by the compensation deferral modification. Non-compensation expenses of $1.9 billion increased
from $1.7 billion a year ago on higher volume driven expenses and professional services costs, partly
offset by lower litigation cost.1

Morgan Stanley’s average trading Value-at-Risk (VaR) measured at the 95% confidence level was $49 million
compared with $42 million from the third quarter of 2018 and $38 million in the fourth quarter of the prior year.92

Wealth Management

Wealth Management reported pre-tax income from continuing operations of $1.0 billion compared with $1.2
billion a year ago. The quarter’s pre-tax margin was 24.4%.7 Net revenues for the current quarter were $4.1
billion compared with $4.4 billion a year ago principally driven by losses related to investments associated withcertain employee deferred compensation plans.
•

Asset management revenues of $2.6 billion increased from $2.5 billion a year ago reflecting higher asset
levels and positive flows.

•

Transactional revenues10 of $422 million decreased from $790 million a year ago primarily due to thedeferred compensation plan investment losses referred to above, as well as lower investment banking andfixed income revenues.

•

Net interest income of $1.1 billion increased 2% compared with a year ago primarily driven by growth inlending. Wealth Management client liabilities11 were $83 billion at quarter end compared with $80 billion ayear ago.

•

Compensation expense for the current quarter of $2.3 billion decreased from $2.4 billion a year ago
primarily driven by a decrease in the fair value of deferred compensation plan referenced investments,
partially offset by the compensation deferred modification. Non-compensation expenses of $848 million
were essentially unchanged from a year ago.

Total client assets were $2.3 trillion and client assets in fee-based accounts were $1.0 trillion at the end of thequarter. Fee-based asset flows for the quarter were a positive $16.2 billion.
Wealth Management representatives of 15,694 produced average annualized revenue per representative of$1.1 million in the current quarter.12

Investment Management

Investment Management reported pre-tax income from continuing operations of $74 million compared with $80
million a year ago. Net revenues of $684 million increased from $637 million a year ago.1•

Asset management revenues of $628 million increased from $572 million a year ago principally driven by
the timing of performance fees recognition compared with a year ago.13•

Investment revenues of $82 million decreased from $112 million a year ago due to mark downs ofinvestments and lower carried interest in certain alternative/other products.

•

Other revenues were negative $40 million compared with negative revenues of $46 million in the prior year
period. Results in the current and prior year quarters include an impairment of Investment Management’s
non-controlling interest in a third party asset manager.

•

Compensation expense for the current quarter of $322 million increased from $303 million a year ago
primarily due to an increase associated with carried interest, higher revenues and the compensation
deferral modification. Non-compensation expenses of $288 million increased from $254 million a year ago
on higher brokerage and clearing expenses.1•

Total assets under management or supervision at December 31, 2018 were $463 billion compared with
$482 billion a year ago.

3

FULL YEAR RESULTS3
Full year net revenues were a record $40.1 billion compared with $37.9 billion a year ago.1 Net income
applicable to Morgan Stanley for the current year was $8.7 billion, or $4.73 per diluted share,4 compared with
net income of $6.1 billion, or $3.07 per diluted share,4,5 a year ago. The current year included an intermittent
net discrete tax benefit of $203 million, or $0.12 per diluted share, primarily associated with new information
pertaining to the resolution of multi-jurisdiction tax examinations. The prior year included an intermittent net
discrete tax provision of $968 million, or a loss of $0.53 per diluted share, primarily related to the enactment of
the Tax Cuts and Jobs Act.5
The Firm’s compensation expense of $17.6 billion for the current year increased from $17.2 billion a year ago.
Non-compensation expenses of $11.2 billion compared with $10.4 billion a year ago.1 The Firm’s expense
efficiency ratio for the full year was 72% compared with 73% a year ago.14
The return on average common equity was 11.8% and the return on average tangible common equity was
13.5% for the full year ended 2018.2

Full Year Summary of Segment Results

Full Year Business Overview(dollars in millions)

Net Revenues1

Pre-Tax Income6

FY 2018 FY 2017 FY 2018 FY 2017
Institutional Securities$20,582 $18,813$6,260$5,644

Wealth Management$17,242 $16,836$4,521$4,299Investment Management$2,746

$464

$456

Firm

$40,107 $37,945 $11,237 $10,403$2,586• Record net revenues in Investment Banking of $6.1
billion; Investment Banking Ranked #1 in Global
Completed M&A, Global IPOs and Global Equity.15• Record Wealth Management net revenues of $17.2
billion on strong management fees and increased net
interest income; Pre-tax margin of 26.2%7 reflecting
continued operating leverage.
• Investment Management reported strong asset
management fees and positive long-term net flows.

Institutional Securities
Institutional Securities reported pre-tax income from continuing operations of $6.3 billion compared with $5.6
billion a year ago. Net revenues for the current year were $20.6 billion compared with $18.8 billion a year
ago.1 Compensation expense of $7.0 billion increased from $6.6 billion a year ago. Non-compensation
expenses of $7.4 billion compared with $6.5 billion a year ago.1

Wealth Management
Wealth Management reported pre-tax income from continuing operations of $4.5 billion compared with $4.3
billion a year ago. Net revenues for the current year were a record $17.2 billion compared with $16.8 billion ayear ago. The current year’s pre-tax margin was 26.2% compared with 25.5% a year ago.7 Compensation
expense of $9.5 billion increased from $9.4 billion a year ago. Non-compensation expenses of $3.2 billion forthe current year were essentially unchanged from a year ago.

Investment Management
Investment Management reported pre-tax income from continuing operations of $464 million compared with$456 million a year ago. Net revenues for the current year were $2.7 billion compared with $2.6 billion a year
ago.1 Compensation expense of $1.2 billion was essentially unchanged from a year ago. Non-compensation
expenses of $1.1 billion compared with $949 million a year ago.1

4

Capital
As of December 31, 2018, the Firm’s Common Equity Tier 1 and Tier 1 risk-based capital ratios under the fully
phased-in Standardized Approach were approximately 16.8% and 19.1%, respectively; the fully phased-in
Supplementary Leverage Ratio was approximately 6.5%.16,17
At December 31, 2018, book value and tangible book value per common share were $42.2018 and $36.99,19
respectively, based on approximately 1.7 billion shares outstanding.

Other Matters
The effective tax rate from continuing operations for the quarter was 16.2% and the full year was 20.9%. The
current quarter and full year include intermittent net discrete tax benefits of $111 million and $203 million,
respectively, primarily associated with new information pertaining to the resolution of multi-jurisdiction tax
examinations.
During the quarter ended December 31, 2018, the Firm repurchased approximately $1.2 billion of its common
stock or approximately 27 million shares. During the year ended December 31, 2018, the Firm repurchased$4.9 billion of its common stock or approximately 97 million shares.
The Board of Directors declared a $0.30 quarterly dividend per share, payable on February 15, 2019 tocommon shareholders of record on January 31, 2019.

5

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 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 releaseand the Financial Supplement are available online in the Investor Relations section atwww.morganstanley.com.

###(See Attached Schedules)

NOTICE:The information provided herein and in the financial supplement may include certain non-GAAP financial
measures. The definition of such measures 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 may contain forward-looking statements, including the attainment of certain financial andother targets, 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 anduncertainties that may cause actual results to differ materially. For a discussion of risks and uncertainties 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 of Financial Condition and
Results of Operations” in Part II, Item 7 and “Quantitative and Qualitative Disclosures about Market Risk” inPart II, Item 7A in the Firm’s Annual Report on Form 10-K for the year ended December 31, 2017 and otheritems 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.

61

Effective January 1, 2018, the Firm adopted new accounting guidance related to Revenue from Contracts
with Customers, which among other things, requires a gross presentation of certain costs that were previously
netted against net revenues. For the quarter ended December 31, 2018, this change in presentation resulted
in an increase to net revenues and non-compensation expenses of $70 million, of which $62 million wasreported in the Institutional Securities segment and $17 million in the Investment Management segment. In
addition, the Firm included an intersegment elimination of $(9) million related to intercompany activity. For theyear ended December 31, 2018, there was an increase to net revenues and non-compensation expenses of$350 million, of which $320 million was reported in the Institutional Securities segment and $78 million in theInvestment Management segment. The Firm included an intersegment elimination of $(48) million related tointercompany activity. This change in presentation did not have an impact on net income. Prior periods havenot been restated pursuant to this guidance.
2

Return on average common equity, return on average tangible common equity, annualized return on averagecommon equity, annualized return on average tangible common equity and tangible common equity are nonGAAP financial measures that the Firm considers useful for investors and analysts to allow better
comparability of period-to-period operating performance and capital adequacy. The calculation of return on
average common equity and return on average tangible common equity represents full year net income orannualized net income for the quarter applicable to Morgan Stanley less preferred dividends as a percentageof average common equity and average tangible common equity, respectively. Tangible common equity
represents common equity less goodwill and intangible assets net of allowable mortgage servicing rights
deduction.
3

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 andotherwise. The Securities and Exchange Commission defines a “non-GAAP financial measure” as a numericalmeasure of historical or future financial performance, financial positions, or cash flows that is subject toadjustments that effectively exclude, or include amounts from the most directly comparable measurecalculated 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 with greatertransparency about, or an alternative method for assessing our financial condition, operating results, orprospective 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 othercompanies. 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 in accordance with U.S. GAAP,
along with a reconciliation of the differences between the non-GAAP financial measure we reference and suchcomparable U.S. GAAP financial measure.

4

Includes preferred dividends related to the calculation of earnings per share of $170 million for the fourth
quarter of 2018 and 2017. Includes preferred dividends related to the calculation of earnings per share of $526
million and $523 million for the years ended 2018 and 2017, respectively.
5

The fourth quarter and full year of 2017 included an intermittent net discrete tax provision of $1.2 billion as aresult of the enactment of the Tax Cuts and Job Act, primarily from the remeasurement of certain net deferred
tax assets using the lower enacted corporate tax rate, partially offset by the intermittent net discrete tax
benefits of $168 million and $233 million for the fourth quarter and full year ended 2017, respectively.

6

Pre-tax income represents income (loss) from continuing operations before taxes.

77Pre-tax margin is a non-GAAP financial measure that the Firm considers useful for investors and analysts toassess operating performance. Pre-tax margin represents income (loss) from continuing operations before
taxes divided by net revenues.
8

AUM is defined as assets under management.

9

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 the calculation of VaR and the limitations of the Firm’s VaR methodology isdisclosed in Part II, Item 7A “Quantitative and Qualitative Disclosures about Market Risk” included in the
Annual Report on Form 10-K for the year ended December 31, 2017 (“2017 Form 10-K”). Refer to page 7 ofMorgan Stanley’s Financial Supplement accompanying this release for the VaR disclosure.

10

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

11

Wealth Management client liabilities reflect U.S. Bank Subsidiaries’ lending and broker-dealer margin
activity. U.S. Bank refers to the Firm's U.S. Bank operating subsidiaries Morgan Stanley Bank, N.A. andMorgan Stanley Private Bank, National Association.
12

The average annualized revenue per Wealth Management representative metric represents annualized net
revenues divided by average representative headcount.
13

In accordance with the accounting update, Revenue from Contracts with Customers, effective prospectively
beginning in 2018, the timing of recognition of certain performance fees, not in the form of carried interest, isgenerally expected to be deferred within a fiscal year until the fees are no longer probable of being reversed.
Accordingly, a greater portion of such performance fees revenues were recognized in the first and fourth
quarter of calendar year 2018 based on current fee arrangements.
14

The Firm Expense Efficiency Ratio represents total non-interest expenses as a percentage of net revenues.

15

Source: Thomson Reuters – for the period of January 1, 2018 to December 31, 2018 as of January 4, 2019.

16

The Firm’s risk-based capital ratios for purposes of determining regulatory compliance are the lower of thecapital ratios computed under the (i) standardized approaches for calculating credit risk and market risk riskweighted assets (“RWAs”) (the “Standardized Approach”); and (ii) applicable advanced approaches forcalculating credit risk, market risk and operational risk RWAs (the “Advanced Approach”). At December 31,
2018, the Firm’s ratios are based on the Standardized Approach fully phased-in rules. Regulatory compliance
was determined based on capital ratios calculated under transitional rules until December 31, 2017. 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 2017 Form 10-K.
17

The Supplementary Leverage Ratio became effective as a capital standard on January 1, 2018. As such,
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, and discretionary bonus payments to executive
officers. The Firm’s Supplementary Leverage Ratio utilizes a fully phased-in Tier 1 capital numerator of
approximately $70.6 billion and a fully phased-in supplementary leverage exposure denominator of
approximately $1.09 trillion.

18

Book value per common share represents common equity divided by period end common shares
outstanding.

8

19Tangible book value per common share is a non-GAAP financial measure that the Firm considers to be auseful measure of capital adequacy for investors and analysts. Tangible book value per common sharerepresents 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
Intersegment Eliminations
Income (loss) from continuing operations before tax
Net Income (loss) applicable to Morgan Stanley
Institutional Securities
Wealth Management
Investment Management
Intersegment Eliminations
Net Income (loss) applicable to Morgan Stanley
Earnings (loss) applicable to Morgan Stanley common shareholders

Dec 31, 2018

Quarter Ended
Sep 30, 2018 Dec 31, 2017

$

3,839
4,144
684
(119)
8,548

$

780
1,010
74
(7)
1,857

$

$

$

702
769
65
(5)
1,531

$

$
$

$

$

$

$

4,929
4,399
653
(109)
9,872

$

1,556
1,194
102
(1)
2,851

$

$

$

1,120
913
80
(1)
2,112

1,361

$

0.81
0.80

$
$

$

$

Percentage Change From:
Sep 30, 2018 Dec 31, 2017

Twelve Months Ended
Dec 31, 2018 Dec 31, 2017

4,523
4,407
637
(67)
9,500

(22%)
(6%)
5%
(9%)
(13%)

(15%)
(6%)
7%
(78%)
(10%)

1,235
1,150
80
6
2,471

(50%)
(15%)
(27%)
*
(35%)

(37%)
(12%)
(8%)
*
(25%)

$

(37%)
(16%)
(19%)
*
(28%)

97%
144%
*
*
138%

$

$

357
315
(35)
6
643

2,019

$

473

(33%)

1.19
1.17

$
$

0.27
0.26

(32%)
(32%)

$

$

$

$

20,582
17,242
2,746(463)
40,107$$

Percentage
Change18,813
16,8362,586(290)
37,945

9%
2%
6%
(60%)
6%

5,644
4,299
456
4
10,403

11%
5%
2%
*
8%

39%
49%
53%
*
43%

6,260
4,521
464
(8)
11,237

$

$

$

4,906
3,472
376
(6)
8,748

$

3,536
2,325
246
4
6,111

188%

$

8,222

$

5,588

47%

200%
*

$
$

4.81
4.73

$
$

3.14
3.07

53%
54%

$

$

Financial Metrics:
Earnings per basic share
Earnings per diluted share
Return on average common equity
Return on average tangible common equity
Book value per common share
Tangible book value per common share
Excluding intermittent net discrete tax provision / benefit
Adjusted earnings per diluted share
Adjusted return on average common equity
Adjusted return on average tangible common equity

7.7%
8.8%

11.5%
13.2%

2.7%
3.1%

$
$

42.20
36.99

$
$

40.67
35.50

$
$

38.52
33.46

$

0.73
7.1%
8.1%

$

1.17
11.5%
13.2%

$

0.84
8.6%
9.8%

11.8%
13.5%

(38%)

(13%)

8.0%
9.2%

$
$

42.20
36.99

$
$

38.52
33.46

$

4.61
11.5%
13.2%

$

3.60
9.4%
10.8%

28%

Notes: ‐ Refer to End Notes, Definition of U.S. GAAP to Non‐GAAP Measures and Definition of Performance Metrics on pages 13 ‐ 16 from the Financial Supplement for additional information related to thecalculation of the financial metrics.
10

Consolidated Income Statement Information(unaudited, dollars in millions)

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

Dec 31, 2018

Quarter Ended
Sep 30, 2018 Dec 31, 2017

$

$

1,488
1,736
28
1,046
3,266
(5)
7,559

1,567
2,752
136
932
3,251
298
8,936

$

Percentage Change From:
Sep 30, 2018 Dec 31, 2017

1,548
2,246
325
1,064
3,102
220
8,505

(5%)
(37%)
(79%)
12%
‐‐
*
(15%)

(4%)
(23%)
(91%)
(2%)
5%
*
(11%)

Twelve Months Ended
Dec 31, 2018 Dec 31, 2017$

6,482
11,551437
4,190
12,898743
36,301$

Percentage
Change6,003
11,116820
4,061
11,797848
34,645

8%
4%
(47%)
3%
9%
(12%)
5%

Interest income
Interest expense
Net interest
Net revenues

4,111
3,122
989
8,548

3,627
2,691
936
9,872

2,586
1,591
995
9,500

13%
16%
6%
(13%)

59%
96%
(1%)
(10%)

13,892
10,086
3,806
40,107

8,997
5,697
3,300
37,945

54%
77%
15%
6%

Non‐interest expenses:
Compensation and benefits

3,787

4,310

4,279

(12%)

(11%)

17,632

17,1663%

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

358
598
529
220
605
594
2,904

351
559
513
152
570
566
2,711

339
537
471
190
547
666
2,750

2%
7%
3%
45%
6%
5%
7%

6%
11%
12%
16%
11%
(11%)
6%

1,391
2,393
2,016
691
2,265
2,482
11,238

1,329
2,093
1,791
609
2,169
2,385
10,376

5%
14%
13%
13%
4%
4%
8%

6,691

7,021

7,029

(5%)

(5%)

28,87027,542

5%

1,857
300
1,557
1
1,558
27
1,531
170
1,361

2,851
696
2,155
(1)
2,154
42
2,112
93
2,019

2,471
1,810
661
2
663
20
643
170
473

(35%)
(57%)
(28%)
*
(28%)
(36%)
(28%)
83%
(33%)

(25%)
(83%)
136%
(50%)
135%
35%
138%
‐‐
188%

11,237
2,350
8,887
(4)
8,883
135
8,748
526
8,222

10,403
4,168
6,235
(19)
6,216
105
6,111
523
5,588

8%
(44%)
43%
79%
43%
29%
43%
1%
47%

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
Firm expense efficiency ratio
Effective tax rate from continuing operations

$

$

$

$

$

$

$

$

$

$

22%
44%
34%
78%

29%
44%
27%
71%

26%
45%
29%
74%

28%
44%
28%
72%

27%
45%
27%
73%

16.2%

24.4%

73.2%

20.9%

40.1%

Notes: ‐ Refer to End Notes, Definition of U.S. GAAP to Non‐GAAP Measures and Definition of Performance Metrics on pages 13 ‐ 16 from the Financial Supplement for additional information.
11