Morgan Stanley First Quarter 2023 Earnings Results
Morgan Stanley Reports Net Revenues of $14.5 Billion, EPS of $1.70 and ROTCE of 16.9%
NEW YORK, April 19, 2023 – Morgan Stanley (NYSE: MS) today reported net revenues of $14.5 billion for the firstquarter ended March 31, 2023 compared with $14.8 billion a year ago. Net income applicable to Morgan Stanley was$3.0 billion, or $1.70 per diluted share,1 compared with net income of $3.7 billion, or $2.02 per diluted share,1 for thesame period a year ago.
James P. Gorman, Chairman and Chief Executive Officer, said, “The Firm delivered strong results with a ROTCE of
17% in a very unusual environment, demonstrating the strength of our business model. The investments we havemade in our Wealth Management business continue to bear fruit as we added a robust $110 billion in net new assets
this quarter. Equity and Fixed Income revenues were strong, although Investment Banking activity continued to beconstrained. We maintained our strong capital levels and remain well positioned to provide long-term value to ourshareholders.”

Financial Summary2,3HighlightsFirm ($ millions, except per share data)

1Q 2023

Net revenues$14,517

1Q 2022$14,801

Provision for credit losses

$234

$57

Compensation expense$6,410$6,274Non-compensation expenses$4,113$3,882Pre-tax income8$3,760$4,588Net income app. to MS$2,980$3,666

72%

69%

Earnings per diluted share

$1.70

$2.02

Book value per share$55.13$54.18

Tangible book value per share$40.68$39.91Return on equity

12.4%

14.7%

16.9%

19.8%

Net revenues$6,797$7,657

Investment Banking$1,247$1,634Equity$2,729$3,174

Fixed Income$2,576$2,923$6,559$5,935$1,769$1,873

Expense efficiency ratio5
1

Return on tangible equity

4

Institutional Securities

Wealth Management
Net revenues
9

Fee-based client assets ($ billions)10

Fee-based asset flows ($ billions)

$22.4

$97.2

Net new assets ($ billions)6$109.6$142.0Loans ($ billions)$143.7$136.7

Investment Management
Net revenues$1,289$1,335

11

AUM ($ billions)$1,362$1,447Long-term net flows ($ billions)12$(2.4)$(14.4)

Media Relations: Wesley McDade 212-761-2430• The Firm reported net revenues of $14.5 billion and net
income of $3.0 billion as our businesses navigated a volatile
market environment.
• The Firm delivered ROTCE of 16.9%.4• The Firm expense efficiency ratio was 72%.5 Expenses forthe quarter include integration-related expenses of $77
million.
• Standardized Common Equity Tier 1 capital ratio was15.1%.15• Institutional Securities net revenues of $6.8 billion reflect
strong performance in Equity and Fixed Income despite aless favorable market environment compared to a year ago
and lower results in Investment Banking.

• Wealth Management attracted significant net new assets of$110 billion during the quarter.6 Net revenues were $6.6
billion, positively impacted by mark-to-market gains on
investments associated with certain employee deferredcompensation plans compared to losses a year ago. The
business delivered a pre-tax margin of 26.1%.7 Results
reflect higher net interest income versus prior year primarily
driven by higher interest rates, even as clients continue toredeploy sweep deposits. These results were partially offset
by an increase in expenses as well as higher provisions for
credit losses.
• Investment Management results reflect net revenues of $1.3
billion on AUM of $1.4 trillion amid declines in asset values
from a year ago.

Investor Relations: Leslie Bazos 212-761-5352

Institutional Securities
Institutional Securities reported net revenues for the current quarter of $6.8 billion compared with $7.7 billion a year
ago. Pre-tax income was $1.9 billion compared with $2.8 billion a year ago.8
Investment Banking revenues down 24% from a year ago:
• Advisory revenues decreased from a year ago driven byfewer completed M&A transactions.
• Equity underwriting revenues decreased from a year ago
primarily driven by lower IPO volumes.
• Fixed income underwriting revenues decreased from a year
ago primarily driven by lower non-investment grade loan
issuances.

Equity net revenues down 14% from a year ago:
• Equity net revenues declined compared to a strong prioryear quarter. The decrease was primarily due to lower
volumes and declines in global equity markets compared toa year ago.

Fixed Income net revenues down 12% from a year ago:
• Fixed Income net revenues decreased from a year ago due
to declines in commodities and foreign exchange as a resultof lower volatility and client activity. The declines werepartially offset by (1) higher revenues in rates supported byinterest rate volatility across geographies and (2) increased
credit products revenues supported by client engagement.

Other:($ millions)

1Q 2023

1Q 2022Net Revenues$6,797$7,657

Investment Banking$1,247$1,634Advisory

$638

$944

Equity underwriting

$202

$258

Fixed income underwriting

$407

$432

Equity$2,729$3,174

Fixed Income$2,576$2,923

Other$245$(74)

Provision for credit losses

$189

$44

Total Expenses$4,716$4,826Compensation$2,365$2,604Non-compensation$2,351$2,222• Other revenues increased primarily driven by higher
revenues on corporate lending activity, net of losses on loan
hedges, and mark-to-market gains on investments
associated with certain employee deferred compensationplans compared to losses in the prior year quarter.

Provision for credit losses:• Increases in provisions for credit losses were primarily related to commercial real estate and deterioration in themacroeconomic outlook from a year ago.

Total Expenses:• Compensation expenses decreased on lower revenues, partially offset by higher expenses related to stock-based
compensation plans and certain deferred compensation plans linked to investment performance.
• Non-compensation expenses increased from a year ago primarily driven by higher litigation and marketing andbusiness development costs.
2

Wealth Management
Wealth Management reported net revenues for the current quarter of $6.6 billion compared with $5.9 billion from a yearago. Pre-tax income of $1.7 billion8 in the current quarter resulted in a reported pre-tax margin of 26.1%.7
Net revenues increased 11% from a year ago:($ millions)

1Q 2023

1Q 2022• Asset management revenues decreased from a year ago
reflecting lower asset levels due to declines in the markets,partially offset by positive fee-based flows.

Net Revenues$6,559$5,935

Asset management$3,382$3,626$921$635$2,158$1,540

Other

$98

$134

Provision for credit losses

$45

$13

Total Expenses$4,802$4,349Compensation$3,477$3,125

Non-compensation$1,325$1,224• Transactional revenues13 decreased 12% excluding theimpact of mark-to-market gains on investments associatedwith certain employee deferred compensation plans. The
decrease was driven by fewer new issuance opportunities
and reduced activity levels compared to the beginning of2022.
• Net interest income increased from a year ago on higher
interest rates and bank lending growth, partially offset bylower brokerage sweep deposits as clients continue toredeploy balances.

Transactional13
Net interest income

Provision for credit losses:• Increases in provisions for credit losses were related to deterioration in the macroeconomic outlook from a year ago.
Total Expenses:• Compensation expense increased from a year ago driven by higher expenses related to certain deferredcompensation plans linked to investment performance.
• Non-compensation expenses increased from a year ago primarily driven by investments in technology, as well as
higher marketing and business development costs.

Investment Management
Investment Management reported net revenues of $1.3 billion, down 3% from a year ago. Pre-tax income was $166
million compared with $228 million a year ago.8
Net revenues decreased 3% from a year ago:($ millions)

1Q 2023

1Q 2022• Asset management and related fees decreased from ayear ago driven primarily by lower AUM due to thedecline in asset values and the cumulative effect ofoutflows.

Net Revenues$1,289$1,335

Asset management and related fees

$1,248$1,388Performance-based income and other$41$(53)

Total Expenses$1,123$1,107Compensation

$568

$545

Non-compensation

$555

$562

• Performance-based income and other revenues
increased from a year ago due to mark-to-market gains
on investments associated with certain employeedeferred compensation plans and higher marks on
public investments compared to losses in the prior year
quarter, partially offset by lower accrued carriedinterest.
Total Expenses:• Compensation expense increased from a year ago primarily driven by higher expenses related to certain deferredcompensation plans linked to investment performance partially offset by lower compensation associated with carriedinterest.
3

Other Matters• Standardized Common Equity Tier 1 capital ratio was 15.1%,
180 basis points above the aggregate standardized approach
CET1 requirement inclusive of buffers.
• The Firm repurchased $1.5 billion of its outstanding common
stock during the quarter as part of its Share Repurchase
Program.
• The Board of Directors declared a $0.775 quarterly dividend
per share, payable on May 15, 2023 to common shareholdersof record on May 1, 2023.
• The effective tax rate for the quarter was 19.3%, whichreflects a benefit associated with employee share-based
payments.18

1Q 2023

1Q 2022

CET1 capital15

15.1%

14.5%

15

17.0%

16.0%

CET1 capital15

15.6%

15.9%

Tier 1 capital15

17.5%

17.6%

6.7%

6.8%

5.5%

5.5%

$1,500$2,872

1630

Average Price$95.16$95.20Period End Shares (millions)

1,670

1,756

Effective Tax Rate18

19.3%

19.0%

14Capital

Standardized Approach

Tier 1 capital

Advanced Approach

Leverage-based capital
Tier 1 leverage16
17

SLR

Common Stock Repurchases
Repurchases ($ millions)
Number of Shares (millions)4Morgan Stanley is a leading global financial services firm providing a wide range of investment banking, securities,
wealth management and investment management services. With offices in 42 countries, the Firm’s employees serve
clients worldwide including corporations, governments, institutions and individuals. For further information about
Morgan Stanley, please visit www.morganstanley.com.
A financial summary follows. Financial, statistical and business-related information, as well as information regarding
business and segment trends, is included in the financial supplement. Both the earnings release and the financial
supplement are available online in the Investor Relations section at www.morganstanley.com.

NOTICE:The information provided herein and in the financial supplement, including information provided on the Firm’s earnings
conference calls, may include certain non-GAAP financial measures. The definition of such measures or reconciliationof such measures to the comparable U.S. GAAP figures are included in this earnings release and the financial
supplement, both of which are available on www.morganstanley.com.
This earnings release may contain forward-looking statements, including the attainment of certain financial and othertargets, objectives and goals. Readers are cautioned not to place undue reliance on forward-looking statements, which
speak only as of the date on which they are made, which reflect management’s current estimates, projections,expectations, assumptions, interpretations or beliefs and which are subject to risks and uncertainties that may cause
actual results to differ materially. For a discussion of risks and uncertainties that may affect the future results of theFirm, please see “Forward-Looking Statements” preceding Part I, Item 1, “Competition” and “Supervision andRegulation” in Part I, Item 1, “Risk Factors” in Part I, Item 1A, “Legal Proceedings” in Part I, Item 3, “Management’sDiscussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 and “Quantitative andQualitative Disclosures about Risk” in Part II, Item 7A in the Firm’s Annual Report on Form 10-K for the year ended
December 31, 2022 and other items throughout the Form 10-K, the Firm’s Quarterly Reports on Form 10-Q and theFirm’s Current Reports on Form 8-K, including any amendments thereto.

5

1Includes preferred dividends related to the calculation of earnings per share of $144 million and $124 million for the first quarter of 2023
and 2022, respectively.
2The 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 financialmeasure” as a numerical measure of historical or future financial performance, financial position, or cash flows that is subject to adjustmentsthat effectively exclude, or include amounts from the most directly comparable measure calculated and presented in accordance with U.S.
GAAP. Non-GAAP financial measures disclosed by Morgan Stanley are provided as additional information to analysts, investors and otherstakeholders in order to provide them with greater transparency about, or an alternative method for assessing our financial condition,
operating results, or capital adequacy. These measures are not in accordance with, or a substitute for U.S. GAAP, and may be different
from or inconsistent with non-GAAP financial measures used by other companies. Whenever we refer to a non-GAAP financial measure, wewill also generally define it or present the most directly comparable financial measure calculated and presented in accordance with U.S.
GAAP, along with a reconciliation of the differences between the non-GAAP financial measure we reference and such comparable U.S.
GAAP financial measure.
3

Our earnings releases, earnings conference calls, financial presentations and other communications may also include certain metrics
which we believe to be useful to us, analysts, investors, and other stakeholders by providing further transparency about, or an additional
means of assessing, our financial condition and operating results.
4Return on average tangible common equity is a non-GAAP financial measure that the Firm considers useful for analysts, investors andother stakeholders to allow comparability of period-to-period operating performance and capital adequacy. The calculation of return on
average tangible common equity represents full year or annualized net income applicable to Morgan Stanley less preferred dividends as apercentage of average tangible common equity. Tangible common equity, also a non-GAAP financial measure, represents common equity
less goodwill and intangible assets net of allowable mortgage servicing rights deduction.
5The Firm expense efficiency ratio represents total non-interest expenses as a percentage of net revenues. For the quarter ended March31, 2023, Firm results include pre-tax integration-related expenses of $77 million, of which $53 million is reported in the WealthManagement business segment and $24 million is reported in the Investment Management business segment.
6Wealth Management net new assets represent client inflows, including dividends and interest, and asset acquisitions, less client outflows,
and exclude activity from business combinations/divestitures and the impact of fees and commissions.
7Pre-tax margin represents income before provision for income taxes divided by net revenues.

8Pre-tax income represents income before provision for income taxes.

9

Wealth Management fee-based client assets represent the amount of assets in client accounts where the basis of payment for services isa fee calculated on those assets.
10

Wealth Management fee-based asset flows include net new fee-based assets (including asset acquisitions), net account transfers,dividends, interest, and client fees, and exclude institutional cash management-related activity.
11

AUM is defined as assets under management.

12Long-term net flows include the Equity, Fixed Income and Alternative and Solutions asset classes and excludes the Liquidity and Overlay
Services asset class.
13

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

14

Capital ratios are estimates as of the press release date, April 19, 2023.

CET1 capital is defined as Common Equity Tier 1 capital. The Firm’s risk-based capital ratios are computed under each of the (i)standardized approaches for calculating credit risk and market risk risk‐weighted assets (RWAs) (the “Standardized Approach”) and (ii)applicable advanced approaches for calculating credit risk, market risk and operational risk RWAs (the “Advanced Approach”). For
information on the calculation of regulatory capital and ratios, and associated regulatory requirements, please refer to "Management’sDiscussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources – Regulatory Requirements" inthe Firm’s Annual Report on Form 10-K for the year ended December 31, 2022 (2022 Form 10-K).
156

The Tier 1 leverage ratio is a leverage-based capital requirement that measures the Firm’s leverage. Tier 1 leverage ratio utilizes Tier 1capital as the numerator and average adjusted assets as the denominator.
16

The Firm’s supplementary leverage ratio (SLR) utilizes a Tier 1 capital numerator of approximately $77.9 billion and $80.1 billion, andsupplementary leverage exposure denominator of approximately $1.42 trillion and $1.47 trillion, for the first quarter of 2023 and 2022,
respectively.
1718The income tax consequences related to employee share-based payments are recognized in Provision for income taxes in theconsolidated income statement, and may be either a benefit or a provision. The impacts of recognizing excess tax benefits upon conversionof awards are $149 million and $205 million for the first quarter of 2023 and 2022, respectively.

7

Consolidated Income Statement Information(unaudited, dollars in millions)
Quarter Ended
Dec 31, 2022

Mar 31, 2023
Revenues:
Investment banking
Trading
Investments
Commissions and fees
Asset management
Other
Total non-interest revenues$1,330
4,477
145
1,239
4,72825212,171

Interest income
Interest expense
Net interest
Net revenues
Provision for credit losses
Non-interest expenses:
Compensation and benefits
Non-compensation expenses:
Brokerage, clearing and exchange fees
Information processing and communications
Professional services
Occupancy and equipment
Marketing and business development
Other
Total non-compensation expenses
Total non-interest expenses
Income before provision for income taxes
Provision for income taxes
Net income
Net income applicable to nonredeemable noncontrolling interests
Net income applicable to Morgan Stanley
Preferred stock dividend
Earnings applicable to Morgan Stanley common shareholders$$

$

1,318
3,017
85
1,169
4,803
38
10,430Mar 31, 2022$

Percentage Change From:
Dec 31, 2022
Mar 31, 2022

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

1%
48%
71%
6%
(2%)
*
17%

(24%)
12%
93%
(13%)
(8%)
8%
(3%)

10,3798,033
2,346
14,517

9,232
6,913
2,319
12,749

2,650
434
2,216
14,801

12%
16%
1%14%

*
*
6%
(2%)

234

87

57

169%

*

6,410

5,615

6,274

14%

2%

881
915
710
440
247
920
4,113

851
933
853
443
295
878
4,253

882
829
705
427
175
864
3,882

4%
(2%)
(17%)
(1%)
(16%)
5%
(3%)

-10%
1%
3%
41%
6%
6%

10,523

9,868

10,156

7%

4%

3,760
727
3,033
53
2,980
144
2,836

2,794
528
2,266
30
2,236
123
2,113

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

35%
38%
34%
77%
33%
17%
34%

(18%)
(17%)
(18%)
8%
(19%)
16%
(20%)

$

$

$

$

Notes:- Firm net revenues excluding mark-to-market gains and losses on deferred cash-based compensation plans (DCP) were: 1Q23: $14,364 million, 4Q22: $12,555 million, 1Q22: $15,242 million.
- Firm compensation expenses excluding DCP were: 1Q23: $6,217 million, 4Q22: $5,426 million, 1Q22: $6,562 million.
- The End Notes are an integral part of this presentation. Refer to pages 12 - 17 of the Financial Supplement for Definition of U.S. GAAP to Non-GAAP Measures, Definition of Performance Metrics and Terms, Supplemental
Quantitative Details and Calculations, and Legal Notice.

8

Consolidated Financial Metrics, Ratios and Statistical Data(unaudited)

Mar 31, 2023

Quarter Ended
Dec 31, 2022

Mar 31, 2022$$$$$$Percentage Change From:
Dec 31, 2022
Mar 31, 2022

Financial Metrics:
Earnings per basic share
Earnings per diluted share
Return on average common equity
Return on average tangible common equity

1.72
1.70
12.4%
16.9%

Book value per common share
Tangible book value per common share

$$

55.13
40.68

1.28
1.26
9.2%
12.6%

$
$

54.55
40.06

2.04
2.02

34%
35%

(16%)
(16%)

14.7%
19.8%
$
$

54.18
39.91

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
Effective tax rate

26%
44%
28%
72%
19.3%

22%
44%
33%
77%
18.9%

31%
42%
26%
69%
19.0%

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

1,670

1,675

1,756

--

(5%)

1,645
1,663

1,652
1,679

1,733
1,755

-(1%)

(5%)
(5%)

Worldwide employees

82,26682,42776,541--

7%

Statistical Data:

The End Notes are an integral part of this presentation. Refer to pages 12 - 17 of the Financial Supplement for Definition of U.S. GAAP to Non-GAAP Measures, Definition of Performance
Metrics and Terms, Supplemental Quantitative Details and Calculations, and Legal Notice.

9