Media Relations: Michele Davis 212-761-9621

Investor Relations: Sharon Yeshaya 212-761-1632

Morgan Stanley Reports Third Quarter 2016:


Net Revenues of $8.9 Billion and Earnings per Diluted Share of $0.81

Strong Performance across Sales & Trading

Investment Banking Ranked #1 in Global IPOs; #2 in Global Announced, Global Completed
M&A and Global Equity1



Wealth Management Revenues of $3.9 Billion and Pre-Tax Margin of 23%2,3

NEW YORK, October 19, 2016 – Morgan Stanley (NYSE: MS) today reported net revenues of $8.9 billion for the4third quarter ended September 30, 2016 compared with $7.8 billion a year ago. For the current quarter, net
5
income applicable to Morgan Stanley was $1.6 billion, or $0.81 per diluted share, compared with income of $1.0
54billion, or $0.48 per diluted share, for the same period a year ago.
The prior year quarter included DVA revenues of $435 million. Excluding DVA in the prior year quarter, net
6revenues were $7.3 billion and income applicable to Morgan Stanley was $740 million, or $0.34 per diluted share.
Compensation expense of $4.1 billion increased from $3.4 billion a year ago primarily driven by higher revenues.
Non-compensation expenses of $2.4 billion decreased from $2.9 billion a year ago reflecting lower litigation costs
and continued execution of the Firm’s expense management initiatives.
7

The annualized return on average common equity was 8.7 percent in the current quarter.

Business Overview
Institutional Securities net revenues were $4.6 billion reflecting strong performance across our sales andtrading franchise, continued strength in M&A advisory and subdued underwriting.



Wealth Management net revenues were $3.9 billion and pre-tax margin was 23%. Fee-based asset flows forthe quarter were $13.5 billion.



Investment Management reported net revenues of $552 million with assets under management or supervisionof $417 billion.

3

James P. Gorman, Chairman and Chief Executive Officer, said, “This quarter we saw record revenues in WealthManagement and a strong performance in our Sales and Trading business. While the environment was morechallenging for our equity underwriting and asset management businesses, our expense initiatives remain on
track. Overall the results reflect steady progress against our long term strategic goals.”1Summary of Institutional Securities Results(dollars in millions)

Net

a)

Excluding DVA 8Net
Pre-Tax

As Reported
Pre-Tax

Revenues

IncomeRevenues

Income3Q 2016(a)$4,553$1,383**

2Q 2016(a)$4,578$1,506**

3Q 2015(*)$3,904$688$3,469$253

Effective 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, 3Q 2015 is the only period where net revenues and pre-tax income4
are adjusted for the impact of DVA.

INSTITUTIONAL SECURITIESInstitutional Securities reported pre-tax income from continuing operations of $1.4 billion compared with pre-tax
4,8income of $688 million a year ago, or $253 million excluding DVA. Net revenues for the current quarter were4,8
$4.6 billion compared with $3.9 billion a year ago, or $3.5 billion excluding DVA. The following discussion forsales and trading excludes DVA from the prior year period.
Advisory revenues of $504 million decreased from $557 million a year ago on lower levels of completed M&A
activity. Equity underwriting revenues of $236 million decreased from $250 million in the prior year quarter onlower fees due to a shift in product mix. Fixed income underwriting revenues of $364 million decreased from$374 million in the prior year quarter primarily on lower loan fees.

Equity sales and trading net revenues of $1.9 billion increased from $1.8 billion a year ago reflecting higher
4,9
results in derivatives and cash equities.



Fixed Income sales and trading net revenues of $1.5 billion increased from $583 million a year ago driven
principally by our credit and rates businesses on improved market conditions compared with the prior year
4,9,10period.



Other sales and trading net losses of $192 million compared with losses of $65 million a year ago primarilyreflecting lower revenues associated with corporate loan hedging activity.



Investment revenues of $36 million decreased from $113 million a year ago driven by lower gains on business
related investments and investments associated with the Firm’s compensation plans.



Other revenues were $243 million reflecting gains associated with held for sale corporate loans compared withnegative revenues of $112 million in the prior year period related to mark-to-market losses on loans andcommitments.

Compensation expenses of $1.7 billion increased from $1.3 billion a year ago on higher revenues. Noncompensation expenses of $1.5 billion for the current quarter decreased from $1.9 billion a year ago primarilyreflecting lower litigation costs and broad-based expense discipline.

Morgan Stanley’s average trading Value-at-Risk (VaR) measured at the 95% confidence level was $42 million
11
compared with $46 million from the second quarter of 2016 and $53 million in the third quarter of the prior year.

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

Pre-Tax
Income3Q 2016$3,881$901

2Q 2016$3,811$859

3Q 2015$3,640$824

WEALTH MANAGEMENT
Wealth Management reported pre-tax income from continuing operations of $901 million compared with $824
3
million in the third quarter of last year. The quarter’s pre-tax margin was 23%. Net revenues for the current quarter
were $3.9 billion compared with $3.6 billion a year ago.


Asset management fee revenues of $2.1 billion decreased from $2.2 billion a year ago reflecting lower averagefee rates on fee-based accounts.

Transactional revenues of $791 million increased from $652 million a year ago. Results for the current period
reflect gains on investments associated with certain employee deferred compensation plans compared with losses
in the prior year period.



Net interest income of $885 million increased from $751 million a year ago principally driven by higher deposit
and loan balances. Wealth Management client liabilities were $70 billion at quarter end, an increase of $9 billion
13
compared with the prior year quarter.

Compensation expense for the current quarter of $2.2 billion increased from $2.0 billion a year ago primarily due
to an increase in the fair value of deferred compensation plan referenced investments. Non-compensation
expenses of $777 million decreased from $792 million a year ago primarily on lower professional services costs.

12

Total client assets were $2.1 trillion and client assets in fee-based accounts were $855 billion at quarter end. Feebased asset flows for the quarter were $13.5 billion.
Wealth Management representatives of 15,856 produced average annualized revenue per representative of $977,000
in the current quarter.

3

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

Pre-Tax
Income3Q 2016$552$97

2Q 2016

$583

$118

3Q 2015

$274

$(38)

INVESTMENT MANAGEMENT
Investment Management reported pre-tax income from continuing operations of $97 million compared with a pre-tax
loss of $38 million in the third quarter of last year.
Net revenues of $552 million increased from $274 million in the prior year. Results for the prior year quarter
included the reversal of previously accrued carried interest associated with the Asia private equity business.
Asset management fees were essentially unchanged from a year ago.

Compensation expense for the current quarter of $237 million increased from $95 million a year ago. Results
reflect an increase in the fair value of deferred compensation plan referenced investments in the current quarter,
compared with declines in deferred compensation associated with carried interest in the period a year ago. Noncompensation expenses of $218 million were relatively unchanged from a year ago.

CAPITAL
As of September 30, 2016, the Firm’s Common Equity Tier 1 and Tier 1 risk-based capital ratios under Advanced
14
Approach transitional provisions were approximately 16.9% and 18.9%, respectively.
As of September 30, 2016, the Firm estimates its pro forma fully phased-in Common Equity Tier 1 risk-based capitalratio under the Advanced Approach and pro forma fully phased-in Supplementary Leverage Ratio to be
14,15,16
approximately 15.9% and 6.2%, respectively.
17

At September 30, 2016, book value and tangible book value per common share were $37.11 and $32.13,
respectively, based on approximately 1.9 billion shares outstanding.

OTHER MATTERS
The effective tax rate from continuing operations for the current quarter was 31.5%.
During the quarter ended September 30, 2016, the Firm repurchased approximately $1.25 billion of its common stock
or approximately 41 million shares.
The Board of Directors declared a $0.20 quarterly dividend per share, payable on November 15, 2016 to commonshareholders of record on October 31, 2016.
During the quarter ended September 30, 2016, the Firm redeemed all of its issued and outstanding Trust Preferred
securities.

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 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 September 30, 2016 as of October 3, 2016.

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 future financial performance, financial
positions, or cash flows that is subject to adjustments that effectively exclude, or include amounts from the most directlycomparable 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 with greatertransparency 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 orinconsistent 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 U.S. 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

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.
5

Includes preferred dividends and other adjustments related to the calculation of earnings per share of $79 million for the third
quarter of 2016 and 2015. Refer to page 13 of Morgan Stanley’s Financial Supplement accompanying this release for the
calculation of earnings per share.
6

Excluding DVA from net revenues, 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 periodto-period operating performance. The reconciliation of net revenues, net income (loss) applicable to Morgan Stanley andearnings (loss) per diluted share applicable to Morgan Stanley common shareholders from a U.S. GAAP to non-GAAP basis is
as follows (Net revenues, net income (loss) reconciliation and average diluted shares are presented in millions – also see footnote
4):
3Q 2015$7,767$435$7,332

Net revenues - U.S. GAAP
DVA impact
Net revenues - Non-GAAP
Net income (loss) applicable to MS - U.S. GAAP
DVA impact
Net income (loss) applicable to MS - Non-GAAP$1,018$278$740

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

$0.48
$0.14
$0.34

Average diluted shares - U.S. GAAP

1,949

6

7

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
annualized net income applicable to Morgan Stanley less preferred dividends as a percentage of average common equity.
8

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 U.S. GAAP to non-GAAP basis is as follows (amounts arepresented in millions - also see footnote 4):

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

3Q 2015$3,904$435$3,469
$688
$435
$253

9

Sales and trading net revenues, including Fixed Income and Equity sales and trading net revenues excluding DVA are nonGAAP financial measures that the Firm considers useful for investors and analysts to allow better comparability of period-toperiod operating performance. The reconciliation of sales and trading, including Fixed Income and Equity sales and trading net
revenues from a U.S. GAAP to non-GAAP basis is as follows (amounts are presented in millions – also see footnote 4):

3Q 2015$2,722$435$2,287

Sales & Trading - U.S. GAAP
DVA impact
Sales & Trading - Non-GAAP
Fixed Income Sales & Trading - U.S. GAAP
DVA impact
Fixed Income Sales & Trading - Non-GAAP
Equity Sales & Trading - U.S. GAAP
DVA impact
Equity Sales & Trading - Non-GAAP

$918
$335
$583
$1,869$100$1,76910Effective for the quarter ended September 30, 2016, the Institutional Securities “Fixed Income & Commodities” business has
been renamed the “Fixed Income” business.

11

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 Annual Report on Form 10-K for the year ended December 31, 2015
(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.

7

14

The Firm’s binding risk-based capital ratios for regulatory purposes 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 operational risk RWAs (the“Advanced Approach”). At September 30, 2016, the binding ratio is based on the Advanced Approach transitional rules. For
information on the calculation of regulatory capital and ratios for prior periods, please refer to Part II, Item 7 “Liquidity andCapital 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 June 30, 2016.
15

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

16

The Firm is required to disclose information related to its supplementary leverage ratio, 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, and discretionary bonus payments to executive
officers. The Firm’s pro forma Supplementary Leverage Ratio estimate utilizes a fully phased-in Tier 1 capital numerator of
approximately $66.0 billion and a fully phased-in supplementary leverage exposure 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 basedon these regulations. Further, these expectations should not be taken as projections of what the Firm’s supplementary leverage
ratios or earnings, assets or exposures will actually be at future dates. See “Risk Factors” in Part I, Item 1A in the 2015 Form 10K for a discussion of 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.

8

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

Quarter Ended
Percentage Change From:
Sept 30, 2016 June 30, 2016 Sept 30, 2015 June 30, 2016 Sept 30, 2015

Nine Months Ended
Sept 30, 2016 Sept 30, 2015

$

$

$

$

$

$

4,553
3,881
552
(77)
8,909

1,383
901
97
2,381

$

966
564
67
1,597

$

$
$

$

$

$

$

$

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

1,506
859
118
2,483

$

$

$

$

$

3,904
3,640
274
(51)
7,767

(1%)
2%
(5%)
(22%)
--

17%
7%
101%
(51%)
15%

688
824
(38)
1,474

(8%)
5%
(18%)
(4%)

101%
9%
*
62%

(2%)
9%
(14%)
1%

86%
11%
*
57%

$

988
516
78
1,582

$

518
509
(9)
1,018

1,518

$

1,425

$

939

7%

0.81
0.81

$
$

0.75
0.75

$
$

0.48
0.34

8%
8%

$

$

$

$

12,845
11,3601,612(207)
25,610

3,797
2,546
259
6,602

$

$

$

$

$

Percentage
Change14,534
11,3491,694(160)
27,417

(12%)
-(5%)
(29%)
(7%)

4,123
2,564
369
7,056

(8%)
(1%)
(30%)
(6%)

(24%)
(2%)
(25%)
(17%)

$

2,545
1,573
195
4,313

$

3,355
1,605
259
5,219

62%

$

3,999

$

4,918

(19%)

69%
138%

$
$

2.11
2.11

$
$

2.51
2.27

(16%)
(7%)

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

8.7%
8.7%

8.3%
8.3%

5.6%
3.9%

7.7%
7.7%

9.8%
8.8%

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, U.S. GAAP to Non-GAAP Measures and Definition of Performance Metrics on pages 14 - 16 from the Financial Supplement for additional information related to thecalculation of the financial metrics.
9

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

Sept 30, 2016

Quarter Ended
June 30, 2016 Sept 30, 2015

$

$

1,225
2,609
87
991
2,686
308
7,906

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

$

Percentage Change From:
June 30, 2016 Sept 30, 2015

1,313
2,026
(119)
1,115
2,732
(62)
7,005

-(5%)
(31%)
(3%)
2%
27%
(1%)

(7%)
29%
*
(11%)
(2%)
*
13%

Nine Months Ended
Sept 30, 2016 Sept 30, 2015
$

3,556
7,420
179
3,066
7,943
631
22,795$Percentage
Change

4,284
8,649
408
3,459
8,155
406
25,361

(17%)
(14%)
(56%)
(11%)
(3%)
55%
(10%)

Interest income
Interest expense
Net interest
Net revenues

1,734
731
1,003
8,909

1,667
754
913
8,909

1,451
689
762
7,767

4%
(3%)
10%
--

20%
6%
32%
15%

5,148
2,333
2,815
25,610

4,321
2,265
2,056
27,417

19%
3%
37%
(7%)

Non-interest expenses:
Compensation and benefits

4,097

4,015

3,437

2%

19%

11,795

12,366(5%)

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

339
491
456
130
489
526
2,431

329
484
429
154
547
468
2,411

341
485
447
158
576
849
2,856

3%
1%
6%
(16%)
(11%)
12%
1%

(1%)
1%
2%
(18%)
(15%)
(38%)
(15%)

997
1,440
1,327
418
1,550
1,481
7,213

1,034
1,435
1,300
487
1,660
2,079
7,995

(4%)
-2%
(14%)
(7%)
(29%)
(10%)

6,528

6,426

6,293

2%

4%

19,00820,361

(7%)

2,381
749
1,632
8
1,640
43
1,597
79
1,518

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

1,474
423
1,051
(2)
1,049
31
1,018
79
939

(4%)
(10%)
(1%)
*
-(33%)
1%
(50%)
7%

62%
77%
55%
*
56%
39%
57%
-62%

6,602
2,160
4,442
1
4,443
130
4,313
314
3,999

7,056
1,704
5,352
(9)
5,343
124
5,219
301
4,918

(6%)
27%
(17%)
*
(17%)
5%
(17%)
4%
(19%)

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

$

$

$

$

$

$

$

$

$

$

27%
46%
27%

28%
45%
27%

19%
44%
37%

26%
46%
28%

26%
45%
29%

31.5%

33.5%

28.7%

32.7%

24.1%

Notes: - Refer to End Notes, U.S. GAAP to Non-GAAP Measures and Definition of Performance Metrics on pages 14 - 16 from the Financial Supplement for additional information.
10

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

Quarter Ended
Percentage Change From:
Sept 30, 2016 June 30, 2016 Sept 30, 2015 June 30, 2016 Sept 30, 2015

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$

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

$

1,518

$
$
$

0.82
0.01
0.83

$

0.80
0.01
0.81

$

1,425

$

1,866
$
$
$

1,879
$
$
$

1,650
64
1,586
157
1,429
(4)
0
0
(4)

1,838

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

$

8
0
0
8

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

1,632
43
1,589
79
1,510

0.77
(0.01)
0.76

$
$
$

1,899
$
$
$

0.75
0.75

$
$
$

1,051
31
1,020
79
941

(1%)
(33%)
-(50%)
6%

55%
39%
56%
-60%

(2)
0
0
(2)

*
--*

*
--*

939

7%

62%

1,904

(2%)

(3%)

0.49
0.49

6%
*
9%

67%
*
69%

1,949

(1%)

(4%)

0.48
0.48

7%
*
8%

67%
*
69%

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

Nine Months Ended
Sept 30, 2016 Sept 30, 2015

$

4,442
130
4,312
314
3,998

$

1
0
0
1
$

3,999

(9)
0
0
(9)
$

1,863
$
$
$

2.15
2.15

$
$
$

1,898
$
$
$

2.11
2.11

5,352
124
5,228
301
4,927

$
$
$

Percentage
Change

(17%)
5%
(18%)
4%
(19%)
*
--*

4,918

(19%)

1,916

(3%)

2.57
2.57

(16%)
-(16%)

1,958

(3%)

2.52
(0.01)
2.51

(16%)
*
(16%)