Morgan Stanley Fourth Quarter and Full Year 2020 Earnings Results
Morgan Stanley Reports Fourth Quarter Net Revenues of $13.6 Billion, EPS of $1.81 and ROTCE of
17.7%; Record Full Year Net Revenues of $48.2 Billion, EPS of $6.46 and ROTCE of 15.2%
NEW YORK, January 20, 2021 – Morgan Stanley (NYSE: MS) today reported net revenues of $13.6 billion for the fourth
quarter ended December 31, 2020 compared with $10.9 billion a year ago. Net income applicable to Morgan Stanley was$3.4 billion, or $1.81 per diluted share, 1 compared with $2.2 billion, or $1.30 per diluted share,1 for the same period a year
ago. The comparisons of current year results to prior periods were impacted by the acquisition of E*TRADE Financial
Corporation (“E*TRADE”), completed on October 2, 2020, reported in the Wealth Management segment.
Full year net revenues were a record $48.2 billion compared with $41.4 billion a year ago. Net income applicable toMorgan Stanley for the current year was $11.0 billion, or $6.46 per diluted share, 1 compared with $9.0 billion, or $5.19 per
diluted share,1 a year ago.
James P. Gorman, Chairman and Chief Executive Officer, said, “The Firm produced a very strong quarter and record
full-year results, with excellent performance across all three businesses and geographies. I am extremely proud of how
our employees came together to support each other and our communities and deliver for our clients in an incrediblychallenging year. Our unique business model continues to serve us well as we further execute on our long-term strategy
with the acquisitions of E*TRADE and Eaton Vance. We enter 2021 with significant momentum, and I am very confident
in our competitive position and our opportunities for continued growth.”

Financial Summary2,3
Firm ($MM, except per share data)

Highlights
4Q 2020

4Q 2019

FY 2020

FY 2019

Net revenues$13,640$10,857$48,198$41,419

Compensation expense$5,450$5,228$20,854$18,837

Non-compensation expenses
Pre-tax income8$3,760$2,896$12,926$11,281$4,430$2,733$14,418$11,301

Net income app. to MS$3,385$2,239$10,996$9,042

Expense efficiency ratio

6

68%

75%

70%

73%

Earnings per diluted share

$1.81

$1.30

$6.46

$5.19

Book value per share$51.13$45.82$51.13$45.82

Tangible book value per share$41.95$40.01$41.95$40.01Return on equity

14.7%

11.3%

13.1%

11.7%

Return on tangible equity4

17.7%

13.0%

15.2%

13.4%

Institutional Securities
Net revenues$7,004$5,054

Investment Banking$2,302$1,576$7,204$5,734

Sales & Trading$4,220$3,194$18,792$13,695$5,681$4,582$19,055$17,737

Fee-based client assets ($Bn)9$1,472$1,267$1,472$1,267

10

Fee-based asset flows ($Bn)

$24.1

$24.9

$77.4

$64.9

Net new assets ($Bn)11

$66.1

$27.1

$175.4$97.8

Loans ($Bn)

$98.1

$80.1

$98.1

$80.1

$25,948$20,386

Wealth Management
Net revenues

Investment Management
Net revenues$1,100$1,356$3,734$3,763

AUM ($Bn)12

$781

$552

$781

$552

$8.5

$6.7

$41.0

$15.4

13

Long-term net flows ($Bn)

Media Relations: Wesley McDade 212-761-2430• The Firm’s full year results reflect both record
net revenues of $48 billion up 16% year overyear and net income of $11 billion up 22%.
• The Firm delivered full year ROTCE of 15.2% or
15.4% excluding the impact of integrationrelated expenses.4,5• The full year Firm expense efficiency ratio was
70% excluding the impact of integration-related
expenses.5,6• Common Equity Tier 1 capital standardized ratioof 17.4%.
• Institutional Securities delivered record full year
net revenues of $25.9 billion. Fourth quarter net
revenues were up 39% driven by continued
strong client engagement in a constructive
market environment.
• Wealth Management delivered a full year pretax margin of 23.0% (24.2% excluding $231
million of integration-related expenses).7 Fourth
quarter results reflect growth in client assets,
increases in bank deposits and lending as well
as strong transactional activity.
• Strong Investment Management results reflect
record asset management fees in both thequarter and full year driven by record AUM of$781 billion and record long-term net flows of$41 billion.

Investor Relations: Sharon Yeshaya 212-761-1632

Fourth Quarter Results
Institutional Securities
Institutional Securities reported net revenues for the current quarter of $7.0 billion compared with $5.1 billion a year
ago. Pre-tax income was $3.2 billion compared with $1.1 billion a year ago. 8
Investment Banking revenues up 46% from a year ago:
• Advisory revenues increased from a year ago driven byhigher M&A completed transactions.
• Equity underwriting revenues increased from a year ago
driven by higher revenues on IPOs, blocks and follow-on
offerings.
• Fixed income underwriting revenues decreased from a year
ago as lower volumes contributed to a decline in bondrevenues, partially offset by higher event driven activity.

4Q 2020

4Q 2019

Net Revenues$7,004$5,054

Investment Banking$2,302$1,576$827$654$1,000

$422

$475

$500

Sales and Trading$4,220$3,194Equity$2,498$1,920

Fixed Income$1,664$1,273

Other

$58

$1

Investments and Other

$482

$284

Investments

$68

$68

Other

$414

$216

($ millions)

Advisory
Equity underwriting
Fixed income underwriting

Sales and Trading net revenues up 32% from a year ago:
• Equity sales and trading net revenues increased from a year
ago reflecting strong performance across products andgeographies driven by increased client activity, withparticular strength in derivatives.
• Fixed Income sales and trading net revenues increased froma year ago reflecting strong performance across businesses,
benefitting from strong client engagement and market
volatility, with notable strength in foreign exchange andcredit products.
• Other sales and trading net revenues increased from a year
ago reflecting gains on investments associated with certain
employee deferred compensation plans.
Investments and Other:

Total Expenses$3,844$3,929• Other revenues increased from a year ago primarily driven
by a reduction in the provision for credit losses on loans held
for investment, mark-to-market gains on loans held for sale
related to corporate lending activity and gains on the sale ofa commodities related intangible asset.

Compensation$1,575$2,057

Non-compensation$2,269$1,872

Total Expenses:• Compensation expense decreased from a year ago driven
by lower discretionary compensation, partially offset byincreases in the fair value of deferred compensation planreferenced investments.
• Non-compensation expenses increased from a year ago
driven by higher volume related expenses, higher litigation
expense, and an increase in the provision for credit losses
on unfunded lending commitments.

2

Wealth Management
Wealth Management reported net revenues for the current quarter of $5.7 billion compared with $4.6 billion a year ago.
Pre-tax income of $1.1 billion8 in the current quarter resulted in a pre-tax margin of 18.8%7 or 22.9% excluding theimpact of integration-related expenses.5 The comparisons of current year results to prior periods were impacted by theacquisition of E*TRADE.
Net revenues up 24% from a year ago:
• Asset management revenues increased from a year ago
reflecting higher asset levels driven by market appreciationand strong fee-based flows.
• Transactional revenues14 increased 37% excluding the impact
of mark-to-market gains on investments associated withcertain employee deferred compensation plans. Results
reflect strong client activity in both the advisor-led and selfdirected channels.
• Net interest income (NII) increased from a year ago driven byincremental NII as a result of the E*TRADE acquisition as wellas higher deposits and bank lending, partially offset by the
impact of lower average rates.
Total Expenses:• Compensation expense increased from a year ago driven byincremental compensation as a result of the E*TRADE
acquisition and integration-related expenses,5 increases in thefair value of deferred compensation plan referenced
investments, and higher compensable revenues.

4Q 2020

4Q 2019

Net Revenues$5,681$4,582

Asset management$2,975$2,655

Transactional14$1,340$829

Net interest$1,207$1,033$159$65

Total Expenses$4,611$3,419Compensation$3,345$2,590Non-compensation$1,266$829($ millions)

Other• Non-compensation expense increased from a year ago
primarily driven by incremental operating and other expenses
as a result of the E*TRADE acquisition and integration-related
expenses.5

Investment Management
Investment Management reported net revenues of $1.1 billion compared with $1.4 billion a year ago. Pre-tax income
was $196 million compared with $447 million a year ago.8
Net revenues down 19% from a year ago:
• Asset management revenues increased from a year ago
driven by record AUM, reflecting strong investment
performance and positive net flows.
• Investments revenues decreased from a year ago due tosignificant gains reflected in the prior year quarter related to
an investment’s initial public offering within an Asia private
equity fund.

4Q 2020

4Q 2019$1,100$1,356

Asset management

$869

$736

Investments

$256

$670

Other

$(25)

$(50)

Total Expenses

$904

$909

Compensation

$530

$581

Non-compensation

$374

$328

($ millions)

Net Revenues

Total Expenses:• Compensation expense decreased from a year ago principally
due to lower carried interest in the quarter.
• Non-compensation expenses increased from a year ago
driven by higher brokerage and clearing expense.

3Full Year Results
Institutional Securities
Institutional Securities reported net revenues of $25.9 billion compared with $20.4 billion a year ago. Pre-tax income
was $9.2 billion compared with $5.5 billion in the prior year.8
Investment Banking revenues up 26% from a year ago:($ millions)

FY 2020

FY 2019

Net Revenues$25,948$20,386

Investment Banking$7,204$5,734• Fixed income underwriting revenues increased from a year
ago on higher investment and non-investment grade bondissuances driven by elevated volumes as clients accessed
capital markets, partially offset by lower investment gradeloan issuances.

Advisory$2,008$2,116Equity underwriting$3,092$1,708Fixed income underwriting$2,104$1,910

Sales and Trading net revenues up 37% from a year ago:

Sales and Trading$18,792$13,695

Equity$9,801$8,056

Fixed Income$8,824$5,546

Other

$167

$93

Investments and Other

$(48)

$957

Investments

$166

$325

Other

$(214)$632

Total Expenses$16,797$14,896

Compensation$8,342$7,433

Non-compensation$8,455$7,463• Advisory revenues decreased from a year ago due to fewer
large completed M&A transactions.
• Equity underwriting revenues increased 81% from a year ago
driven by growth in blocks, IPOs and follow-on offerings asclients continued to access capital markets.

• Equity sales and trading net revenues increased 22% from ayear ago reflecting strong performance across products andgeographies driven by increased client activity.
• Fixed Income sales and trading net revenues increased 59%
from a year ago reflecting strong performance acrossbusinesses benefitting from strong client engagement andmarket volatility, with notable strength in foreign exchange
and credit products.
• Other sales and trading net revenues increased from a year
ago primarily driven by gains on economic hedges associatedwith corporate lending activity, partially offset by lower rates
on liquidity investments.
Investments and Other:• Revenues decreased from a year ago reflecting lower markto-market gains on investments.
• Other revenues decreased from a year ago due to mark-tomarket losses on corporate loans held for sale and anincrease in the provision for credit losses on loans held forinvestment.
Total Expenses:• Compensation expense increased from a year ago driven byhigher discretionary compensation expense as a result ofhigher revenues.
• Non-compensation expenses increased from a year ago
driven by higher volume related expenses and an increase in
the provision for credit losses on unfunded lending commitments.

4

Wealth Management
Wealth Management reported net revenues of $19.1 billion compared with $17.7 billion a year ago. Pre-tax income of$4.4 billion resulted in a pre-tax margin of 23.0%7,8 or 24.2% excluding the impact of integration-related expenses.5
Net revenues up 7% from a year ago:
• Asset management revenues increased from a year ago on
higher asset levels driven by market appreciation and record
fee-based flows.
• Transactional revenues14 increased from a year ago primarily
driven by an increase in commissions on higher client activity,
gains on investments associated with certain employee
deferred compensation plans, and incremental revenues in
the fourth quarter as a result of the E*TRADE acquisition.
• Net interest income decreased from a year ago primarily
driven by the impact of lower interest rates, partially offset byincreases due to higher deposits and bank lending as well as
incremental NII as a result of the E*TRADE acquisition.
Total Expenses:($ millions)

FY 2020

FY 2019

Net Revenues$19,055$17,737

Asset management$10,955$10,199

Transactional14$3,694$2,969Net interest$4,022$4,222$384$347

Total Expenses$14,668$12,905

Compensation$10,970$9,774Non-compensation$3,698$3,131Other• Compensation expense increased from a year ago primarily
driven by higher compensable revenues, incremental
compensation as a result of the E*TRADE acquisition andintegration-related expenses,5 as well as increases in the fairvalue of deferred compensation plan referenced investments.
• Non-compensation expenses increased from a year ago
primarily driven by incremental operating and other expenses
as a result of the E*TRADE acquisition, integration-related
expenses,5 and a regulatory charge, partially offset by lower
marketing and business development expenses.

Investment Management
Investment Management net revenues were essentially unchanged from a year ago. Pre-tax income was $870 million
compared with $985 million in the prior year.8
Net revenues:• Asset management revenues increased from a year ago
driven by record AUM, reflecting strong investment
performance and positive net flows.

FY 2020

FY 2019

Net Revenues$3,734$3,763

Asset management$3,013$2,629($ millions)• Investments revenues decreased from a year ago driven bylower accrued carried interest.

Investments$808$1,213

Total Expenses:

Other

$(87)

$(79)

• Compensation expense decreased from a year ago
principally due to a decrease in carried interest.

Total Expenses$2,864$2,778Compensation$1,542$1,630Non-compensation$1,322$1,148• Non-compensation expenses increased from a year ago
driven by higher brokerage and clearing costs.

5Other Matters• The Firm’s Board of Directors authorized therepurchase of outstanding common stock of up to$10 billion in 2021.

4Q 2020 4Q 2019 FY 2020 FY 2019
Common Stock Repurchases• The Board of Directors declared a $0.35 quarterly
dividend per share, payable on February 12, 2021
to common shareholders of record on January 29,
2021.

Repurchases ($MM)

NA$1,500$1,347$5,360

Number of Shares (MM)

NA

31

29

121

Average Price

NA$48.49$46.01$44.23• The Firm’s provision for credit losses on loans andlending commitments was $5 million for the fourth
quarter of 2020, compared with $57 million for the
fourth quarter of 2019 and $111 million for thethird quarter of 2020. The allowance for credit
losses on loans and lending commitments was$1.2 billion as of December 31, 2020, a decreaseof approximately $29 million from September 30,
2020 and an increase of approximately $641
million from December 31, 2019.

Period End Shares (MM)

1,810

1,594

1,810

1,594

Tax Rate

23.0%

15.7%

22.5%

18.3%

CET1 capital16

17.4%

16.4%

Tier 1 capital16

19.4%

18.6%

CET1 capital16

17.7%

16.9%

Tier 1 capital16

19.8%

19.2%

Tier 1 leverage17

8.4%

8.3%

SLR18

7.4%

6.4%

Capital15Standardized Approach

Advanced Approach

Leverage-based capital

6

Morgan Stanley is a leading global financial services firm providing a wide range of investment banking, securities, wealthmanagement and investment management services. With offices in more than 41 countries, the Firm’s employees serve clientsworldwide 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 andsegment 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 may include certain non-GAAP financial measures. The definitionof such measures or reconciliation of such metrics to the comparable U.S. GAAP figures are included in this earnings release andthe Financial Supplement, both of which are available on www.morganstanley.com.
This earnings release contains “forward-looking statements” within the meaning of the federal securities laws, including Section 27Aof the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In this context,
forward-looking statements often address expected future business and financial performance and financial condition, and often
contain words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “see,” “will,” “would,” “target,” similar expressions, andvariations or negatives of these words. Forward-looking statements by their nature address matters that are, to different degrees,
uncertain, such as statements about the consummation of the proposed transaction and the anticipated benefits thereof. All suchforward-looking statements are subject to risks, uncertainties and assumptions that could cause actual results to differ materiallyfrom those expressed in such forward-looking statements. Important risk factors that may cause such a difference include, but are
not limited to, (i) the completion of the proposed transaction on anticipated terms and timing, including obtaining required regulatory
approvals, anticipated tax treatment, unforeseen liabilities, future capital expenditures, revenues, expenses, earnings, synergies,
economic performance, indebtedness, financial condition, losses, future prospects, business and management strategies for the
management, expansion and growth of the combined company’s operations and other conditions to the completion of theacquisition, including the possibility that any of the anticipated benefits of the proposed transaction will not be realized or will not berealized within the expected time period, (ii) the ability of Morgan Stanley and Eaton Vance to integrate the business successfully
and to achieve anticipated synergies, risks and costs, (iii) potential litigation relating to the proposed transaction that could beinstituted against Morgan Stanley, Eaton Vance or their respective directors, (iv) the risk that disruptions from the proposedtransaction will harm Morgan Stanley’s and Eaton Vance’s business, including current plans and operations, (v) the ability of Morgan
Stanley or Eaton Vance to retain and hire key personnel, (vi) potential adverse reactions or changes to business relationships
resulting from the announcement or completion of the acquisition, (vii) continued availability of capital and financing and rating
agency actions, (viii) legislative, regulatory and economic developments, (ix) potential business uncertainty, including changes toexisting business relationships, during the pendency of the acquisition that could affect Morgan Stanley’s and/or Eaton Vance’s
financial performance, (x) certain restrictions during the pendency of the acquisition that may impact Morgan Stanley’s or Eaton
Vance’s ability to pursue certain business opportunities or strategic transactions, (xi) unpredictability and severity of catastrophic
events, including, but not limited to, acts of terrorism or outbreak of war or hostilities, as well as Morgan Stanley’s or Eaton Vance’s
management’s response to any of the aforementioned factors, (xii) dilution caused by Morgan Stanley’s issuance of additional
shares of its common stock in connection with the proposed transaction, (xiii) the possibility that the transaction may be more
expensive to complete than anticipated, including as a result of unexpected factors or events, (xiv) those risks described in Item 1Aof Morgan Stanley’s most recently filed Annual Report on Form 10-K and subsequent reports on Forms 10-Q and 8-K, (xv) thoserisks described in Item 1A of Eaton Vance’s most recently filed Annual Report on Form 10-K and any subsequent reports on Forms
10-Q and 8-K and (xvi) those risks that are described in the registration statement on Form S-4 available from the sources indicatedabove. These risks, as well as other risks associated with the proposed acquisition, are more fully discussed in the registration
statement on Form S-4, as amended, filed with the SEC in connection with the proposed acquisition. While the list of factors
presented here is, and the list of factors presented in the registration statement on Form S-4 will be, considered representative, nosuch list should be considered to be a complete statement of all potential risks and uncertainties. Unlisted factors may present
significant additional obstacles to the realization of forward-looking statements. Consequences of material differences in results ascompared with those anticipated in the forward-looking statements could include, among other things, business disruption,
operational problems, financial loss, legal liability to third parties and similar risks, any of which could have a material adverse effecton Morgan Stanley’s or Eaton Vance’s consolidated financial condition, results of operations, credit rating or liquidity. Neither
Morgan Stanley nor Eaton Vance assumes any obligation to publicly provide revisions or updates to any forward-looking
statements, whether as a result of new information, future developments or otherwise, should circumstances change, except asotherwise required by securities and other applicable laws.

7

1 Includes preferred dividends related to the calculation of earnings per share for the fourth quarter of 2020 and 2019 ofapproximately $119 million and $154 million, respectively. Includes preferred dividends related to the calculation of
earnings per share for the years ended 2020 and 2019 of approximately $496 million and $530 million, 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 futurefinancial performance, financial position, or cash flows that is subject to adjustments that effectively exclude, or include
amounts from the most directly comparable measure calculated and presented in accordance with U.S. GAAP. NonGAAP financial measures disclosed by Morgan Stanley are provided as additional information to analysts, investors
and other stakeholders in order to provide them with greater transparency about, or an alternative method forassessing 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 byother companies. Whenever we refer to a non-GAAP financial measure, we will also generally define it or present themost directly comparable financial measure calculated and presented in accordance with U.S. GAAP, along with areconciliation 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, investors, analysts and other stakeholders by providing furthertransparency about, or an additional means of assessing, our financial condition and operating results.
4 Return on average tangible common equity and return on average tangible common equity excluding integration-

related expenses are non-GAAP financial measures that the Firm considers useful for analysts, investors and otherstakeholders to allow comparability of period-to-period operating performance and capital adequacy. The calculationof return on average tangible common equity represents full year net income or annualized net income applicable forthe quarter applicable to Morgan Stanley less preferred dividends as a percentage 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.
5 The Firm’s fourth quarter results include $231 million of integration-related expenses on a pre-tax basis ($189 million

after-tax) as a result of the E*TRADE acquisition. Total non-interest expenses include $151 million in compensation
expense and $80 million in non-compensation expense.
6 The Firm expense efficiency ratio of 70.1% represents total non-interest expenses as a percentage of net revenues.

The Firm expense efficiency ratio excluding integration-related expenses of 69.6% represents total non-interest
expenses adjusted for integration-related expenses as a percentage of net revenues. The Firm expense efficiency ratio
excluding integration-related expenses is a non-GAAP financial measure that the Firm considers useful for analysts,
investors and other stakeholders to allow comparability of period-to-period operating performance.
7 Pre-tax margin represents income before taxes divided by net revenues.

Wealth Management pre-tax margin
excluding the integration-related 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 other stakeholders to allow comparability of periodto-period operating performance.
8 Pre-tax income represents income before taxes.
9 Wealth Management fee-based client assets represent the amount of assets in client accounts where the basis of

payment for services is a fee calculated on those assets.
10 Wealth Management fee-based asset flows include net new fee-based assets, net account transfers, dividends,

8interest, and client fees and exclude institutional cash management related activity.
11 Wealth Management net new assets represents client inflows (including dividend and interest) less client outflows(excluding activity from business combinations/divestitures and impact of fees and commissions).
12 AUM is defined as assets under management or supervision.
13 Long-term net flows include the Equity, Fixed Income and Alternative/Other asset classes and exclude the Liquidity

asset class.
14 Transactional revenues include investment banking, trading, and commissions and fee revenues. Transactional

revenues excluding the impact of mark-to-market gains on investments associated with employee deferred cash-based
compensation plans 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.
15 Capital ratios are estimates as of the press release date, January 20, 2021.
16 CET1 capital is defined as Common Equity Tier 1 capital.

The Firm’s risk-based capital ratios are computed undereach 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 andoperational 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" in the Firm’s Form
10-Q for the period ended September 30, 2020 and in the Firm's 2019 Form 10‐K.
17 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.
18 SLR is defined as supplementary leverage ratio.

The Firm’s SLR utilizes a Tier 1 capital numerator of approximately$88.1 billion and $73.4 billion, and supplementary leverage exposure denominator of approximately $1.19 trillion and$1.16 trillion, for the fourth quarter of 2020 and 2019, respectively. Based on a Federal Reserve interim final rule ineffect until March 31, 2021, our SLR and supplementary leverage exposure as of December 31, 2020 reflect theexclusion of U.S. Treasury securities and deposits at Federal Reserve Banks. The exclusion of these assets had theeffect of increasing our SLR by 0.8% as of December 31, 2020.

9

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, 2020

Quarter Ended
Sep 30, 2020

Dec 31, 2019

$

$

$

Interest income
Interest expense
Net interest
Net revenues

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

$

$

2,435
3,161
327
1,352
3,926
568
11,769

1,826
3,092
346
1,037
3,664
206
10,171

Percentage Change From:
Sep 30, 2020
Dec 31, 2019

1,696
2,314
739
984
3,451
240
9,424

33%
2%
(5%)
30%
7%
176%
16%

44%
37%
(56%)
37%
14%
137%
25%

Twelve Months Ended
Dec 31, 2020 Dec 31, 2019$

7,674
13,992986
4,851
14,272
110
41,885$Percentage
Change6,163
11,095
1,540
3,919
13,083925
36,725

25%
26%
(36%)
24%
9%
(88%)
14%

2,245
374
1,871
13,640

2,056
570
1,486
11,657

3,952
2,519
1,433
10,857

9%
(34%)
26%
17%

(43%)
(85%)
31%
26%

10,162
3,849
6,313
48,19817,09812,404
4,694
41,419

(41%)
(69%)
34%
16%

5,450

5,086

5,228

7%

4%

20,854

18,837

11%

776
697
679
456
161
991
3,760

697
616
542
373
78
778
3,084

633
567
555
375
200
566
2,896

11%
13%
25%
22%
106%
27%
22%

23%
23%
22%
22%
(20%)
75%
30%

2,929
2,465
2,205
1,559
434
3,334
12,926

2,493
2,194
2,137
1,428
660
2,369
11,281

17%
12%
3%
9%
(34%)
41%
15%

9,210

8,170

8,124

13%

13%

33,78030,118

12%

4,430
1,018
3,412
27
3,385
119
3,266

3,487
736
2,751
34
2,717
120
2,597

2,733
428
2,305
66
2,239
154
2,085

27%
38%
24%
(21%)
25%
(1%)
26%

62%
138%
48%
(59%)
51%
(23%)
57%

14,418
3,239
11,179183
10,996496
10,50011,301
2,064
9,237
195
9,042
530
8,512

28%
57%
21%
(6%)
22%
(6%)
23%

$

$

$

$

$

$

$

$

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.

10

Consolidated Financial Metrics, Ratios and Statistical Data
(unaudited)
Dec 31, 2020

Quarter Ended
Sep 30, 2020 Dec 31, 2019

$
$

$
$

Percentage Change From:
Sep 30, 2020 Dec 31, 2019

Twelve Months Ended
Dec 31, 2020 Dec 31, 2019

Percentage
ChangeFinancial 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 integration-related expenses
Adjusted earnings per diluted share
Adjusted return on average common equity
Adjusted return on average tangible common equity

1.84
1.81
14.7%
17.7%

1.68
1.66

$
$

13.2%
15.0%

1.33
1.30

10%
9%

38%
39%

$
$

11.3%
13.0%

$
$

51.13
41.95

$
$

50.67
44.81

$
$

45.82
40.01

$

1.92
15.6%
18.7%

$

1.66
13.2%
15.0%

$

1.30
11.3%
13.0%

6.55
6.46

$
$

13.1%
15.2%

16%

48%

5.26
5.19

25%
24%

11.7%
13.4%

$
$

51.13
41.95

$
$

45.82
40.01

$

6.58
13.3%
15.4%

$

5.19
11.7%
13.4%

27%

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

32%
40%
28%
68%
66%
23.0%

30%
44%
26%
70%
70%
21.1%

25%
48%
27%
75%
75%
15.7%

30%
43%
27%
70%
70%
22.5%

27%
45%
27%
73%
73%
18.3%

1,603
1,624

1,617
1,640

Statistical Data:
Period end common shares outstanding (millions)Average common shares outstanding (millions)
Basic
Diluted

1,810

1,576

1,594

15%

14%

1,774
1,802

1,542
1,566

1,573
1,602

15%
15%

13%
12%

Worldwide employees

68,09763,05160,4318%

13%

Notes:- The Firm’s fourth quarter results include $231 million of integration-related expenses on a pre-tax basis ($189 million after-tax) as a result of the E*TRADE acquisition. Total non-interest expenses include $151 million
in compensation expense and $80 million in non-compensation expense.
- 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.

11

(1%)
(1%)