Media Relations: Michele Davis 212-761-9621

Investor Relations: Kathleen McCabe 212-761-4469

Morgan Stanley Reports First Quarter 2015:


Net Revenues of $9.9 Billion and Earnings per Diluted Share from Continuing
Operations of $1.18

Excluding DVA,1 Net Revenues were $9.8 Billion and Earnings per Diluted Sharefrom Continuing Operations of $1.142,3,4



Strong Performance in Equity Sales & Trading and Improved Results in Fixed
Income & Commodities; Investment Banking Achieved Top 3 Rankings in Global
IPOs, Global Equity and Global Announced M&A5



Wealth Management Pre-Tax Margin of 22%;6 Record Client Assets and Revenue
Per Financial AdvisorROE from Continuing Operations of 14.2%, or 10.1% Excluding DVA and DiscreteTax Benefit2,7



Quarterly Dividend Increased 50% to $0.15 per ShareNEW YORK, April 20, 2015 – Morgan Stanley (NYSE: MS) today reported net revenues of $9.9 billion for the
first quarter ended March 31, 2015 compared with $9.0 billion a year ago. For the current quarter, income fromcontinuing operations applicable to Morgan Stanley was $2.4 billion, or $1.18 per diluted share,8 compared8
with income of $1.5 billion, or $0.74 per diluted share, for the same period a year ago. Results for the current
quarter included a net discrete tax benefit of $564 million or $0.29 per diluted share primarily associated withthe repatriation of non-U.S. earnings at a lower cost than originally estimated.9
14

Excluding DVA, net revenues for the current quarter were $9.8 billion compared with $8.9 billion a year ago. ,Income from continuing operations applicable to Morgan Stanley was $2.3 billion, or $1.14 per diluted share,
34
compared with income of $1.4 billion, or $0.70 per diluted share, a year ago. ,Compensation expense of $4.5 billion increased from $4.3 billion a year ago primarily driven by higher revenues.
Non-compensation expenses of $2.5 billion increased from $2.3 billion a year ago reflecting higher legal costs
and volume driven expenses.
For the current quarter, net income applicable to Morgan Stanley, including discontinued operations, was $2.4
8billion or $1.18 per diluted share, compared with net income of $1.5 billion or $0.74 per diluted share in the first8
quarter of 2014.
The annualized return on average common equity from continuing operations was 14.2% in the current quarter,7
or 10.1% excluding DVA and the net discrete tax benefit.

1Summary of Firm Results(dollars in millions)

1Q 2015
4Q 2014
1Q 2014a)(a)

As Reported
Net
MS IncomeRevenues
Cont. Ops.

Excluding DVA4Net
MS IncomeRevenues
Cont. Ops.

$9,907$2,399$9,782$2,319$7,764$(1,622)$7,541$(1,767)$8,996$1,506$8,870$1,431Results for the fourth quarter of 2014 included several significant items: legal expenses of $3.1 billion associated with legacy
residential mortgage matters; a net discrete tax benefit of approximately $1.4 billion related to the restructuring of a legal entity;compensation expense adjustments of approximately $1.1 billion related to changes in discretionary incentive compensation
deferrals; and a reduction to net revenues of $468 million related to initial implementation of funding valuation adjustments(FVA).

Business Overview
Institutional Securities net revenues excluding DVA were $5.3 billion.10 Revenues for the quarter reflect
strong performance in Equity sales and trading across products and regions, improved performance in
Fixed Income and Commodities sales and trading on higher levels of client activity and solid results in
Investment Banking.



Wealth Management net revenues were $3.8 billion. The pre-tax margin was 22%. Fee based asset flows
for the quarter were $13.3 billion, with total client assets of $2.0 trillion at quarter end.



Investment Management reported net revenues of $669 million with assets under management or
supervision of $406 billion.

6

James P. Gorman, Chairman and Chief Executive Officer, said, “This was our strongest quarter in many years
with improved performance across most areas of the firm. It reflects our ongoing strategy to build platforms for
growth while maintaining a prudent risk profile and disciplined expense management.”2

Summary of Institutional Securities Results(dollars in millions)

1Q 2015
4Q 2014
1Q 2014a)(a)

As Reported
Net
Pre-Tax
Revenues
IncomeExcluding DVA10Net
Pre-Tax
Revenues
Income$5,458$1,813$5,333$1,688$3,430$(3,661)$3,207$(3,884)$4,677$1,416$4,551$1,290Results for the fourth quarter of 2014 included several significant items: legal expenses of $3.1 billion associated with legacy
residential mortgage matters; compensation expense adjustments of approximately $900 million related to changes indiscretionary incentive compensation deferrals; and a reduction to net revenues of $468 million related to initial implementationof funding valuation adjustments (FVA).

INSTITUTIONAL SECURITIESInstitutional Securities reported pre-tax income from continuing operations of $1.8 billion compared with pre-tax
income of $1.4 billion in the first quarter of last year. Net revenues for the current quarter were $5.5 billion
compared with $4.7 billion a year ago. Excluding DVA, net revenues for the current quarter of $5.3 billion
1 10
compared with $4.6 billion a year ago. , The following discussion for sales and trading excludes DVA.


Advisory revenues of $471 million increased from $336 million a year ago on increased M&A activity.
Equity underwriting revenues of $307 million decreased from $315 million a year ago on fewer IPOs. Fixed
income underwriting revenues of $395 million decreased from $485 million in the prior year quarter
primarily driven by lower loan volumes.



Equity sales and trading net revenues of $2.3 billion increased from $1.7 billion a year ago reflecting strong
performance across products and regions on higher levels of client activity.11



Fixed Income & Commodities sales and trading net revenues of $1.9 billion increased from $1.7 billion ayear ago. Results for the current quarter reflect strength in commodities and higher revenues in rates andforeign exchange, partly offset by lower results in credit products.11



Other sales and trading net losses of $213 million compared with losses of $244 million a year ago primarilyreflecting lower costs related to the Firm’s long-term debt.



Other revenues of $90 million compared with $191 million a year ago. Revenues for the prior year period
reflected a gain resulting from the disposition of CanTerm.12

Compensation expense of $2.0 billion increased from $1.9 billion a year ago on higher revenues. Noncompensation expenses of $1.6 billion for the current quarter increased from $1.4 billion a year ago reflecting
higher legal costs and volume driven expenses.

Morgan Stanley’s average trading Value-at-Risk (VaR) measured at the 95% confidence level was $47
million for the current quarter, unchanged from the fourth quarter of 2014 and compared with $50 million in
the first quarter of the prior year.13

3

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

Pre-Tax
Income1Q 2015$3,834$855

4Q 2014$3,804$736

1Q 2014$3,609$686

WEALTH MANAGEMENT
Wealth Management reported pre-tax income from continuing operations of $855 million compared with $686
6
million in the first quarter of last year. The quarter’s pre-tax margin was 22%. Net revenues for the current
quarter were $3.8 billion compared with $3.6 billion a year ago.


Asset management fee revenues of $2.1 billion increased from $2.0 billion a year ago reflecting positive fee
based asset flows and market appreciation.

Transactional revenues14 of $950 million decreased from $996 million a year ago primarily reflecting lower
trading revenues and a decrease in commissions and fees.



Net interest income of $689 million increased from $538 million a year ago on higher deposit and loanbalances.

Compensation expense of $2.2 billion and non-compensation expenses of $754 million for the current quarter
were relatively unchanged from a year ago.



Total client assets were $2.0 trillion at quarter end. Client assets in fee based accounts of $803 billion
increased 11% compared with the prior year quarter. Fee based asset flows for the quarter were $13.3 billion.



Wealth Management representatives of 15,915 produced average annualized revenue per representative of$959,000 in the current quarter.

4

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

Pre-Tax
Income1Q 2015

$669

$187

4Q 2014

$588

$(6)

1Q 2014

$752

$268

INVESTMENT MANAGEMENT
Investment Management reported pre-tax income from continuing operations of $187 million compared with pretax income of $268 million in the first quarter of last year.15


Net revenues of $669 million decreased from $752 million in the prior year primarily reflecting lower gains
on investments in the Merchant Banking and Real Estate Investing business.16 The current quarter also
reflects lower revenues driven by the deconsolidation of certain legal entities during the quarter ended June30, 2014 associated with a real estate fund sponsored by the Firm.17

Compensation expense for the current quarter of $273 million decreased from $286 million a year ago, while
non-compensation expenses of $209 million increased from $198 million a year ago.



Assets under management or supervision at March 31, 2015 of $406 billion increased from $386 billion ayear ago primarily due to positive flows. The business recorded net inflows of $1.3 billion in the current
quarter.

CAPITALAt March 31, 2015, the Firm’s Common Equity Tier 1 risk-based capital ratio was approximately 13.1% and its
Tier 1 risk-based capital ratio was approximately 14.7%. The Firm is subject to a “capital floor” such that theseregulatory capital ratios currently reflect the lower of the ratios computed under the U.S. Basel III Advanced
Approach or the U.S. Basel III Standardized Approach, taking into consideration applicable transitional
provisions. At March 31, 2015, the capital floor is represented by the U.S. Basel III Advanced Approach.18
At March 31, 2015, book value and tangible book value per common share were $33.80 and $28.91,19
respectively, based on approximately 2.0 billion shares outstanding.

OTHER MATTERS
In the current quarter, the Firm recognized a net discrete tax benefit of $564 million primarily associated with therepatriation of non-U.S. earnings at a cost lower than originally estimated due to an internal restructuring tosimplify its legal entity organization in the U.K. The effective tax rate from continuing operations for the current
quarter was 13.6%, or 33.3% excluding the net discrete tax benefit.20
During the quarter ended March 31, 2015, the Firm repurchased approximately $250 million of its common stock
or approximately 7 million shares. The Firm announced a share repurchase of up to $3.1 billion of common stock5

beginning in the second quarter of 2015 through the end of second quarter 2016.
The Firm increased its quarterly dividend to $0.15 per share from $0.10 per share, payable on May 15, 2015 tocommon shareholders of record on April 30, 2015.
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, theFirm’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 andthe Financial Supplement are available online in the Investor Relations section at www.morganstanley.com.

###(See Attached Schedules)
This earnings release contains forward-looking statements. Readers are cautioned not to place undue relianceon 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 Company, 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 andAnalysis of Financial Condition and Results of Operations” in Part II, Item 7 and “Quantitative andQualitative Disclosures about Market Risk” in Part II, Item 7A in the Company's Annual Report on Form 10K for the year ended December 31, 2014 and other items throughout the Form 10-K and the Company’s
Current Reports on Form 8-K, including any amendments thereto.

6

1

Represents the change in the fair value of certain of the Firm’s long-term and short-term borrowings resulting from thefluctuation in the Firm’s credit spreads and other credit factors (Debt Valuation Adjustment, DVA).
2

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. For these purposes, “GAAP” refers to generally
accepted accounting principles in the United States. The Securities and Exchange Commission (SEC) defines a “non-GAAP
financial measure” as a numerical measure of historical or future financial performance, financial positions, or cash flowsthat is subject to adjustments that effectively exclude, or include amounts from the most directly comparable measurecalculated and presented in accordance with GAAP. Non-GAAP financial measures disclosed by Morgan Stanley areprovided as additional information to investors in order to provide them with greater transparency about, or an alternative
method for assessing, our financial condition and operating results. These measures are not in accordance with, or asubstitute for GAAP, and may be different from or inconsistent with non-GAAP financial measures used by other companies.
Whenever we refer to a non-GAAP financial measure, we will also generally present the most directly comparable financial
measure calculated and presented in accordance with GAAP, along with a reconciliation of the differences between the nonGAAP financial measure we reference and such comparable GAAP financial measure.
3

Earnings (loss) per diluted share amounts, excluding DVA, are non-GAAP financial measures that the Firm considers
useful for investors to allow better comparability of period-to-period operating performance. Such exclusions are provided todifferentiate revenues associated with Morgan Stanley borrowings, regardless of whether the impact is either positive, or
negative, that result solely from fluctuations in credit spreads and other credit factors. The reconciliation of earnings (loss)
per diluted share from continuing operations applicable to Morgan Stanley common shareholders and average diluted sharesfrom a non-GAAP to GAAP basis is as follows (number of shares, and DVA impact thereon, are presented in millions):

Earnings (loss) per diluted share from cont. ops. - Non-GAAP
DVA Impact
Earnings (loss) per diluted share from cont. ops. - GAAP

1Q 2015
$1.14
$0.04
$1.18

1Q 2014
$0.70
$0.04
$0.74

Average diluted shares - Non-GAAP
DVA Impact
Average diluted shares - GAAP

1,963
0
1,963

1,969
0
1,969

4

Net revenues and income (loss) from continuing operations applicable to Morgan Stanley, excluding DVA, are non-GAAP
financial measures that the Firm considers useful for investors to allow for better comparability of period-to-period operating
performance. The reconciliation of net revenues and income (loss) from continuing operations applicable to Morgan Stanleyfrom a non-GAAP to GAAP basis is as follows (amounts are presented in millions):

Firm net revenues - Non-GAAP
DVA impact
Firm net revenues - GAAP
Income (loss) applicable to MS - Non-GAAP
DVA impact
Income (loss) applicable to MS - GAAP5

1Q 2015$9,782$125$9,907

4Q 2014$7,541$223$7,764

1Q 2014$8,870$126$8,996$2,319$80$2,399$(1,767)$145$(1,622)$1,431$75$1,506

Source: Thomson Reuters – for the period of January 1, 2015 to March 31, 2015 as of April 1, 2015.

7

6

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

Annualized return on average common equity from continuing operations (ROE) and ROE, excluding DVA and net
discrete tax benefit, are non-GAAP financial measures that the Firm considers useful for investors to allow better
comparability of period-to-period operating performance. The calculation of ROE uses income from continuing operations
applicable to Morgan Stanley less preferred dividends as a percentage of average common equity. To determine the ROE,
excluding DVA and net discrete tax benefit, both the numerator and denominator were adjusted to exclude those items. The
reconciliation of ROE from continuing operations to ROE from continuing operations, excluding DVA and net discrete tax
benefit is as follows:

1Q 2015
ROE from cont. ops. excluding DVA and discrete tax benefit
DVA impact
Discrete Tax Benefit
ROE from cont. ops.

10.1%
0.7%
3.4%
14.2%

8

Includes preferred dividends and other adjustments related to the calculation of earnings per share for the first quarter of2015 and 2014 of approximately $80 million and $56 million, respectively. Refer to page 3 of Morgan Stanley’s Financial
Supplement accompanying this release for the calculation of earnings per share.
9

The impact to earnings per diluted share from continuing operations is calculated by dividing the net discrete tax benefit by
the average number of shares outstanding.
10

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

Net revenues - Non-GAAP
DVA impact
Net revenues - GAAP
Pre-tax income (loss) - Non-GAAP
DVA impact
Pre-tax income (loss) - GAAP8

1Q 2015$5,333$125$5,458

4Q 2014$3,207$223$3,430

1Q 2014$4,551$126$4,677$1,688$125$1,813$(3,884)$223$(3,661)$1,290$126$1,416

11

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

1Q 2015$3,958$125$4,083

1Q 2014$3,115$126$3,241FIC Sales & Trading - Non-GAAP
DVA Impact
FIC Sales & Trading - GAAP

$1,903$100$2,003$1,654$76$1,730Equity Sales & Trading - Non-GAAP
DVA Impact
Equity Sales & Trading - GAAP

$2,268$25$2,293$1,705$50$1,755

Sales & Trading - Non-GAAP
DVA Impact
Sales & Trading - GAAP

12“CanTerm” refers to CanTerm Canadian Terminals Inc.

13

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 Morgan Stanley’s Annual Report on Form 10-K for the year ended
December 31, 2014. Refer to page 7 of Morgan Stanley’s Financial Supplement accompanying this release for the VaR
disclosure.
14

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

15

Results for the first quarter of 2015 and 2014 included pre-tax income of $14 million and $54 million, respectively, related
to investments held by certain consolidated real estate funds. The limited partnership interests in these funds are reported in
net income (loss) applicable to nonredeemable noncontrolling interests on page 10 of Morgan Stanley’s Financial
Supplement accompanying this release.
16

Net revenues for the current quarter included gains of $14 million compared with gains of $54 million in the prior year firstquarter related to investments held by certain consolidated real estate funds.

17

On April 1, 2014, the Firm deconsolidated approximately $2 billion in total assets related to a real estate fund sponsoredby the Firm.
18

As an Advanced Approach banking organization, the Firm is required to compute risk-based capital ratios using both (i)standardized approaches for calculating credit risk weighted assets (“RWAs”) and market risk RWAs (the “Standardized
Approach”); and (ii) an advanced internal ratings-based approach for calculating credit risk RWAs, an advanced
measurement approach for calculating operational risk RWAs, and an advanced approach for market risk RWAs calculated
under Basel III (the “Advanced Approach”). To implement a provision of the Dodd-Frank Act, U.S. Basel III subjects
Advanced Approach banking organizations which have been approved by their regulators to exit the parallel run, such as theFirm, to a permanent “capital floor”. In calendar year 2014, the capital floor resulted in the Firm’s capital ratios being thelower of the capital ratios computed under the Advanced Approach or the U.S. Basel I-based rules as supplemented by theexisting market risk rules known as “Basel 2.5”. Beginning on January 1, 2015, the capital floor is the lower of the capitalratios computed under the Advanced Approach or the Standardized Approach under U.S. Basel III, taking into consideration

9

applicable transitional provisions. For the current quarter, the Firm's capital floor is represented by the Advanced Approach.
These computations are preliminary estimates as of April 20, 2015 (the date of this release) and could be subject to revision
in Morgan Stanley’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2015. The methods for calculating the
Firm’s risk-based capital ratios will change through 2022 as aspects of the U.S. Basel III final rule are phased in. The Firm’s
capital takes into consideration regulatory capital requirements as well as capital required for organic growth, acquisitions
and other business needs.
19

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. Tangible common equity equals common equity less goodwill andintangible assets net of allowable mortgage servicing rights deduction. Tangible book value per common share equals
tangible common equity divided by period end common shares outstanding.

20

The effective tax rate from continuing operations, excluding net discrete tax benefit is a non-GAAP financial measure that
the Firm considers useful for investors to allow better comparability of period-to-period operating performance. The
reconciliation of effective tax rate from continuing operations from a non-GAAP to GAAP basis is as follows:

Effective Tax Rate - Non-GAAP

1Q 201533.3%

Discrete Tax Benefit(19.7%)

Effective Tax Rate - GAAP

13.6%

10

MORGAN STANLEY
Quarterly Financial Summary(unaudited, dollars in millions, except for per share data)

Mar 31, 2015
Net revenues
Institutional Securities
Wealth Management
Investment Management
Intersegment Eliminations
Consolidated net revenues
Income (loss) from continuing operations before tax
Institutional Securities
Wealth Management
Investment Management
Intersegment Eliminations
Consolidated income (loss) from continuing operations before tax
Income (loss) from continuing operations applicable to Morgan Stanley
Institutional Securities
Wealth Management
Investment Management
Intersegment Eliminations
Consolidated income (loss) from continuing operations applicable to Morgan Stanley

$

5,458
3,834
669
(54)
9,907

$

$

1,813
855
187
0
2,855

$

$

$

1,755
535
109
0
2,399

Earnings (loss) from applicable to Morgan Stanley common shareholders$

Earnings per basic share:
Income from continuing operations
Discontinued operations
Earnings per basic share
Earnings per diluted share:
Income from continuing operations
Discontinued operations
Earnings per diluted share

Quarter Ended
Dec 31, 2014
$

$

$

$

$

Mar 31, 2014

3,430
3,804
588
(58)
7,764

(3,661)736(6)
0(2,931)

$

$

$

$

$

Percentage Change From:
Dec 31, 2014
Mar 31, 2014

4,677
3,609
752
(42)
8,996

59%
1%
14%
7%
28%

17%
6%
(11%)
(29%)
10%

1,416
686
268
0
2,370

*
16%
*
-*

28%
25%
(30%)
-20%

*
(71%)
*
-*

82%
27%
(9%)
-59%

$

(3,432)
1,825
(15)
0
(1,622)

$

965
421
120
0
1,506

2,314

$

(1,749)

$

1,449

*

60%

$
$
$

1.21
(0.01)
1.20$$$(0.91)(0.91)

$
$
$

0.75
0.75

*
*
*

61%
*
60%

$
$
$

1.18
1.18

$
$
$

(0.91)(0.91)

$
$
$

0.74
0.74

*
-*

59%
-59%

Financial Metrics:
Return on average common equity from continuing operations
Return on average common equity

14.2%
14.1%

*
*

9.2%
9.2%

Return on average common equity from continuing operations excluding DVA
Return on average common equity excluding DVA

13.5%
13.5%

*
*

8.5%
8.5%

Common Equity Tier 1 capital ratio Advanced (Transitional)
Tier 1 capital ratio Advanced (Transitional)

13.1%
14.7%

12.6%
14.1%

14.1%
15.6%

Book value per common share
Tangible book value per common share

$
$

33.80
28.91

$
$

33.25
28.26

$
$

32.38
27.41

Notes: - Results for the quarters ended March 31, 2015, December 31, 2014 and March 31, 2014, include positive revenue of $125 million, $223 million and $126 million, respectively,
related to the change in the fair value of certain of the Firm's long-term and short-term borrowings resulting from the fluctuation in the Firm's credit spreads and othercredit factors (Debt Valuation Adjustment, DVA).
- Beginning in the first quarter of 2015, the Firm is subject to a “capital floor” such that the regulatory risk-based capital ratios reflect the lower of the ratios computed underthe Advanced Approach or the Standardized Approach under U.S. Basel III, taking into consideration applicable transitional provisions. At March 31, 2015, the capital
floor is represented by the U.S. Basel III Advanced Approach. Prior periods have not been recast to reflect the new requirements.
- The return on average common equity metrics, return on average common equity excluding DVA metrics, and tangible book value per common share are non-GAAP
measures that the Firm considers to be useful measures to assess operating performance and capital adequacy.
- Tangible book value per common share equals tangible common equity divided by period end common shares outstanding.
- See page 4 of the Financial Supplement and End Notes for additional information related to the calculation of the financial metrics.
11

MORGAN STANLEY
Quarterly 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

Mar 31, 2015

Quarter Ended
Dec 31, 2014

Mar 31, 2014

$

$

$

1,357
3,650
266
1,186
2,681
171
9,311

4%
23%
(26%)
(2%)
5%
(42%)
7%

1,343
1,035
308
8,996

3%
7%
(1%)
28%

10%
(14%)
94%
10%

4,524

5,104

4,306

(11%)

5%

342
463
415
150
486
672
2,528

364
468
404
186
611
3,558
5,591

361
443
424
147
453
492
2,320

(6%)
(1%)
3%
(19%)
(20%)
(81%)
(55%)

(5%)
5%
(2%)
2%
7%
37%
9%

7,052

10,695

6,626

(34%)

6%

$

2,855
387
2,468
(5)
2,463
69
2,394
80
2,314

$

(2,931)(1,353)(1,578)(8)(1,586)44(1,630)119(1,749)

$

2,370
785
1,585
(1)
1,584
79
1,505
56
1,449

*
*
*
38%
*
57%
*
(33%)
*

20%
(51%)
56%
*
55%
(13%)
59%
43%
60%

$

2,399
(5)
2,394

$

(1,622)(8)(1,630)

$

1,506
(1)
1,505

*
38%
*

59%
*
59%

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
Total non-interest expenses$

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

Notes:

(7%)
152%
138%
(4%)
-(23%)
30%

1,436
833
603
7,764

Non-interest expenses:
Compensation and benefits

Amounts applicable to Morgan Stanley:
Income (loss) from continuing operations
Gain (loss) from discontinued operations after tax
Net income (loss) applicable to Morgan Stanley

1,308
2,962
359
1,216
2,549
294
8,688

1,484
888
596
9,907

Interest income
Interest expense
Net interest
Net revenues

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

1,456
1,451
112
1,235
2,684
223
7,161

Percentage Change From:
Dec 31, 2014
Mar 31, 2014

$

$

29%
46%
26%

*
66%
72%

26%
48%
26%

13.6%

46.2%

33.1%

- In the quarter ended March 31, 2015, income tax provision / (benefit) from continuing operations included a net discrete tax benefit of $564 million primarily
associated with the repatriation of non-U.S. earnings at a cost lower than originally estimated. In the quarter ended December 31, 2014, the income
tax provision / (benefit) from continuing operations included a net discrete tax benefit of approximately $1.4 billion primarily related to the completionof a legal entity restructuring, partially offset by the impact of a tax provision of approximately $900 million which resulted from the non-deductible
expenses related to litigation and regulatory matters.
- Pre-tax profit margin is a non-GAAP financial measure that the Firm considers to be a useful measure to assess operating performance.
- Preferred stock dividend / other includes allocation of earnings to Participating Restricted Stock Units (RSUs).

12

MORGAN STANLEY
Quarterly Earnings Per Share(unaudited, dollars in millions, except for per share data)

Quarter Ended
Mar 31, 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
Income (loss) from continuing operations applicable to Morgan Stanley, prior to allocation of income toParticipating Restricted Stock Units
Basic EPS Adjustments:
Less: Allocation of earnings to Participating Restricted Stock Units
Earnings (loss) from continuing operations applicable to Morgan Stanley common shareholders$

Gain (loss) from discontinued operations after tax
Less: Gain (loss) from discontinued operations after tax applicable to noncontrolling interests
Gain (loss) from discontinued operations after tax applicable to Morgan Stanley
Less: Allocation of earnings to Participating Restricted Stock Units
Earnings (loss) from discontinued operations applicable to Morgan Stanley common shareholders

2,468
69

$

$

Average basic common shares outstanding (millions)

Mar 31, 2014

(1,578)44$

Dec 31, 2014

Mar 31, 2014

1,585
79

*
57%

56%
(13%)

*

59%

(34%)

44%

*

60%

*
*

-60%

38%
-38%
-38%

*
-*
-*

1,449

*

60%

1,924

--

--

2,399
78

(1,622)
119

1,506
54

2,321

(1,741)

1,452

2
2,319

$

(5)
0
(5)
0
(5)

Earnings (loss) applicable to Morgan Stanley common shareholders

Percentage Change From:

Dec 31, 2014

2,314

0
(1,741)

$

(8)
0
(8)
0
(8)
$

1,924

(1,749)

2
1,450
(1)
0
(1)
0
(1)

$

1,920

Earnings per basic share:
Income from continuing operations
Discontinued operations
Earnings per basic share

$
$
$

1.21
(0.01)
1.20$$$(0.91)(0.91)

$
$
$

0.75
0.75

*
*
*

61%
*
60%

Earnings (loss) from continuing operations applicable to Morgan Stanley common shareholders

$

2,319

$

(1,741)

$

1,450

*

60%

38%

*

1,449

*

60%

1,969

2%

--

0.74
0.74

*
-*

59%
-59%

Earnings (loss) from discontinued operations applicable to Morgan Stanley common shareholders(5)

Earnings (loss) applicable to Morgan Stanley common shareholders$

Average diluted common shares outstanding and common stock equivalents (millions)

2,314

(8)
$

1,963

Earnings per diluted share:
Income from continuing operations
Discontinued operations
Earnings per diluted share

$
$
$

1.18
1.18

(1,749)

(1)
$

1,920

$
$
$

(0.91)(0.91)$$$

Notes: - The Firm calculates earnings per share using the two-class method as described under the accounting guidance for earnings per share. For further discussion of the Firm's earnings per share calculations,see page 13 of the Financial Supplement and Note 16 to the consolidated financial statements in the Firm's Annual Report on Form 10-K for the year ended December 31, 2014.

13