Exhibit 99.2

MORGAN STANLEY

Quarterly Financial Summary

(unaudited, dollars in millions)

	Quarter Ended																		Percentage Change From:				Six Months Ended						Percentage
		Feb 28, 2005			May 31, 2005			Aug 31, 2005			Nov 30, 2005			Feb 28, 2006			May 31, 2006		2Q06 vs. 2Q05		2Q06 vs. 1Q06			May 31, 2005			May 31, 2006		Change
Net revenues
Institutional Securities	$	4,015		$	3,340		$	4,164		$	4,154		$	5,474		$	5,726			71%		5%	$	7,355		$	11,200			52%
Global Wealth Management Group		1,238			1,228			1,255			1,298			1,284			1,402			14%		9%		2,466			2,686			9%
Asset Management		696			642			679			890			695			723			13%		4%		1,338			1,418			6%
Discover		959			888			911			694			1,089			1,191			34%		9%		1,847			2,280			23%
Intersegment Eliminations		(70	)		(67	)		(62	)		(74	)		(59	)		(98)			(46%)		(66%)		(137	)		(157)			(15%)
Consolidated net revenues	$	6,838		$	6,031		$	6,947		$	6,962		$	8,483		$	8,944			48%		5%	$	12,869		$	17,427			35%

Income before taxes ⁽¹⁾
Institutional Securities	$	1,077		$	813		$	1,288		$	1,576		$	1,754		$	2,267			179%		29%	$	1,890		$	4,021			113%
Global Wealth Management Group		353			118			30			84			23			157			33%		*		471			180			(62%)
Asset Management		287			175			162			383			172			224			28%		30%		462			396			(14%)
Discover		354			263			239			65			479			541			106%		13%		617			1,020			65%
Intersegment Eliminations		24			25			23			22			19			(13)			(152%)		(168%)		49			6			(88%)
Consolidated income before taxes	$	2,095		$	1,394		$	1,742		$	2,130		$	2,447		$	3,176			128%		30%	$	3,489		$	5,623			61%

Earnings per basic share: ⁽²⁾
Income from continuing operations	$	1.26		$	0.88		$	1.12		$	1.69		$	1.56		$	1.92			118%		23%	$	2.15		$	3.48			62%
Discontinued operations	$	-		$	-		$	(0.98	)	$	0.70		$	(0.03	)	$	0.01			*		133%	$	-		$	(0.02)			*
Cumulative effect of accounting change⁽³⁾	$	0.05		$	-		$	-		$	-		$	-		$	-			--		--	$	0.05		$	-			*
Earnings per basic share	$	1.31		$	0.88		$	0.14		$	2.39		$	1.53		$	1.93			119%		26%	$	2.20		$	3.46			57%

Earnings per diluted share: ⁽²⁾
Income from continuing operations	$	1.24		$	0.86		$	1.09		$	1.64		$	1.50		$	1.85			115%		23%	$	2.10		$	3.35			60%
Discontinued operations	$	-		$	-		$	(0.96	)	$	0.68		$	(0.03	)	$	0.01			*		133%	$	-		$	(0.02)			*
Cumulative effect of accounting change⁽³⁾	$	0.05		$	-		$	-		$	-		$	-		$	-			--		--	$	0.05		$	-			*
Earnings per diluted share	$	1.29		$	0.86		$	0.13		$	2.32		$	1.47		$	1.86			116%		27%	$	2.15		$	3.33			55%

Average common shares outstanding
Basic		1,069,097,162			1,053,812,487			1,045,874,085			1,031,343,423			1,020,041,181			1,013,241,715							1,061,632,036			1,016,756,096
Diluted		1,090,166,326			1,079,811,172			1,072,033,275			1,063,147,962			1,061,764,798			1,054,733,745							1,084,988,764			1,056,493,761
Period end common shares outstanding		1,103,263,369			1,086,652,691			1,082,727,000			1,057,677,994			1,070,407,513			1,071,786,172							1,086,652,691			1,071,786,172

Return on average common equity
from continuing operations		20.0	%		13.8	%		17.1	%		24.9	%		21.6	%		25.0	%						16.9	%		23.3	%
Return on average common equity		19.7	%		13.1	%		2.0	%		34.6	%		21.1	%		25.1	%						16.4	%		23.1	%

(1)

Represents consolidated income from continuing operations before losses from unconsolidated investees, taxes,

gain/(loss) from discontinued operations and cumulative effect of accounting change.

(2)

Summation of the quarters' earnings per common share may not equal the annual amounts due to the averaging effect of the number of shares and share

equivalents throughout the year.

(3)

Represents the effects of the adoption of SFAS 123R in the first quarter of fiscal 2005.

Note:

Certain reclassifications have been made to prior period amounts to conform to the current presentation.

Refer to Legal Notice page 26.

	Quarter Ended																		Percentage Change From:				Six Months Ended						Percentage
	Feb 28, 2005			May 31, 2005			Aug 31, 2005			Nov 30, 2005			Feb 28, 2006			May 31, 2006			2Q06 vs. 2Q05		2Q06 vs. 1Q06		May 31, 2005			May 31, 2006			Change

Investment banking	$	821		$	814		$	992		$	1,216		$	982		$	1,132			39%		15%	$	1,635		$	2,114			29%
Principal transactions:
Trading		1,846			1,794			2,150			1,575			3,067			3,735			108%		22%		3,640			6,802			87%
Investments		153			226			103			499			314			690			*		120%		379			1,004			165%
Commissions		824			824			804			911			929			1,005			22%		8%		1,648			1,934			17%
Fees:
Asset management, distribution and admin.		1,204			1,246			1,249			1,259			1,279			1,333			7%		4%		2,450			2,612			7%
Merchant, cardmember and other		308			318			357			340			289			277			(13%)		(4%)		626			566			(10%)
Servicing and securitization income		494			423			398			294			596			651			54%		9%		917			1,247			36%
Interest and dividends		5,843			6,035			6,998			9,299			10,549			10,114			68%		(4%)		11,878			20,663			74%
Other		105			121			106			132			114			125			3%		10%		226			239			6%
Total revenues		11,598			11,801			13,157			15,525			18,119			19,062			62%		5%		23,399			37,181			59%
Interest expense		4,625			5,561			5,986			8,253			9,481			9,988			80%		5%		10,186			19,469			91%
Provision for consumer loan losses		135			209			224			310			155			130			(38%)		(16%)		344			285			(17%)
Net revenues		6,838			6,031			6,947			6,962			8,483			8,944			48%		5%		12,869			17,427			35%

Compensation and benefits		2,854			2,622			3,165			2,672			4,183			3,723			42%		(11%)		5,476			7,906			44%
Occupancy and equipment		332			232			239			243			232			237			2%		2%		564			469			(17%)
Brokerage, clearing and exchange fees		260			276			267			267			292			340			23%		16%		536			632			18%
Information processing and communications		342			349			349			365			347			365			5%		5%		691			712			3%
Marketing and business development		257			298			276			331			238			298			--		25%		555			536			(3%)
Professional services		379			438			505			581			434			538			23%		24%		817			972			19%
Other		570			422			404			373			310			267			(37%)		(14%)		992			577			(42%)
September 11th related insurance recoveries, net		(251	)		0			0			0			0			0			--		--		(251	)		0			*
Total non-interest expenses		4,743			4,637			5,205			4,832			6,036			5,768			24%		(4%)		9,380			11,804			26%

Income from continuing operations before losses
from unconsolidated investees, taxes
and cumulative effect of accounting change		2,095			1,394			1,742			2,130			2,447			3,176			128%		30%		3,489			5,623			61%
Losses from unconsolidated investees		73			67			105			66			69			103			54%		49%		140			172			23%
Provision for income taxes		673			396			471			318			784			1,124			184%		43%		1,069			1,908			78%
Income from continuing operations		1,349			931			1,166			1,746			1,594			1,949			109%		22%		2,280			3,543			55%
Discontinued operations
Gain/(loss) from discontinued operations		7			(5	)		(1,700	)		1,212			(55	)		14			*		125%		2			(42)			*
Income tax benefit/(provision)		(3	)		2			678			(493	)		22			(6)			*		(127%)		(1	)		17			*
Gain/(loss) from discontinued operations		4			(3	)		(1,022	)		719			(33	)		8			*		124%		1			(25)			*
Cumulative effect of accounting change⁽¹⁾		49			0			0			0			0			0			--		--		49			0			*
Net income	$	1,402		$	928		$	144		$	2,465		$	1,561		$	1,957			111%		25%	$	2,330		$	3,518			51%

Return on average common equity
from continuing operations		20.0	%		13.8	%		17.1	%		24.9	%		21.6	%		25.0	%						16.9	%		23.3	%
Return on average common equity		19.7	%		13.1	%		2.0	%		34.6	%		21.1	%		25.1	%						16.4	%		23.1	%
Compensation and benefits as a % of net revenues		42	%		44	%		46	%		38	%		49	%		42	%						43	%		45	%

(1)

Represents the effects of the adoption of SFAS 123R in the first quarter of fiscal 2005.

Note:

Certain reclassifications have been made to prior period amounts to conform to the current presentation.

Refer to Legal Notice page 26.

	Quarter Ended												Percentage Change From:
	Feb 28, 2005		May 31, 2005		Aug 31, 2005		Nov 30, 2005		Feb 28, 2006		May 31, 2006		2Q06 vs. 2Q05		2Q06 vs. 1Q06
Morgan Stanley
Total assets (millions)	$	802,210	$	818,711	$	837,391	$	898,523	$	959,613	$	1,027,317		25%		7%
Adjusted assets (millions) ⁽¹⁾	$	447,221	$	440,283	$	458,190	$	481,869	$	528,136	$	548,859		25%		4%
Period end common shares outstanding (millions)		1,103.3		1,086.7		1,082.7		1,057.7		1,070.4		1,071.8		(1%)		--
Book value per common share	$	25.83	$	26.07	$	26.07	$	27.59	$	28.14	$	30.09		15%		7%
Shareholders' equity (millions)⁽²⁾	$	31,328	$	31,224	$	31,107	$	31,946	$	33,775	$	35,728		14%		6%
Total capital (millions) ⁽³⁾	$	122,230	$	113,324	$	118,415	$	125,891	$	134,255	$	145,675		29%		9%
Worldwide employees		53,718		54,142		53,760		53,218		53,870		53,163		(2%)		(1%)


Average Daily 99%/One-Day Value-at-Risk ("VaR") ⁽⁴⁾
Primary Market Risk Category ($ millions, pre-tax)
Interest rate and credit spread	$	66	$	62	$	51	$	53	$	53	$	66
Equity price	$	41	$	31	$	33	$	34	$	36	$	43
Foreign exchange rate	$	12	$	12	$	12	$	12	$	14	$	12
Commodity price	$	34	$	35	$	38	$	46	$	49	$	44

Trading VaR	$	96	$	87	$	78	$	81	$	84	$	96
Non - trading VaR	$	28	$	21	$	24	$	29	$	33	$	38
Aggregate trading and non - trading VaR	$	105	$	99	$	87	$	92	$	94	$	106

(1)

Adjusted assets exclude certain self-funded assets considered to have minimal market, credit and/or liquidity risk that are generally attributable to matched book and

securities lending businesses as measured by aggregate resale agreements and securities borrowed less non-derivative short positions. See page 24 for further information.

(2)

Includes common equity and junior subordinated debt issued to capital trusts.

(3)

Includes common equity, junior subordinated debt issued to capital trusts, capital units and the non-current portion of long-term debt.

(4)

99%/One-Day VaR represents the loss amount that one would not expect to exceed, on average, more than one time every one hundred trading days in the Company's

trading positions if the portfolio were held constant for a one day period. The Company's VaR incorporates substantially all financial instruments generating market risk

that are managed by the Company's trading businesses. For a further discussion of the calculation of VaR and the limitations of the Company's VaR methodology, see

Part II, Item 7A "Quantitative and Qualitative Disclosures about Market Risk" in the Company's Form 10-K for fiscal 2005.

Note:

Certain reclassifications have been made to prior period amounts to conform to the current presentation.

Refer to Legal Notice page 26.

	Quarter Ended																				Six Months Ended
	Feb 28, 2006					May 31, 2006															May 31, 2006
	Average common equity (billions) (1)		Return on average common equity			Average common equity (billions) (1)		Return on average common equity													Average common equity (billions) (1)		Return on average common equity
Institutional Securities	$	16.2		29	%	$	18.1		30	%											$	17.1	$	30	%
Global Wealth Management Group		3.5		2	%		3.3		13	%												3.4		7	%
Asset Management		2.0		21	%		2.1		26	%											2.0		24		%
Securities Business		21.7		24	%		23.5		28	%											22.5			26	%
Discover		4.6		26	%		5.0		27	%												4.8		27	%
Capital surplus (unallocated)		3.3					2.7														3.1
Total - continuing operations		29.6		22	%		31.2		25	%												30.4		23	%
Discontinued operations		0.0					0.0														0.0
Firm	$	29.6		21	%	$	31.2		25	%											30.4		23		%

	Quarter Ended																				Six Months Ended
	Feb 28, 2005					May 31, 2005					Aug 31, 2005					Nov 30, 2005					May 31, 2005
	Average common equity (billions) (1)		Return on average common equity			Average common equity (billions) (1)		Return on average common equity			Average common equity (billions) (1)		Return on average common equity			Average common equity (billions) (1)		Return on average common equity			Average common equity (billions) (1)		Return on average common equity
Institutional Securities	$	13.8		21	%	$	14.3		16	%	$	14.6		24	%	$	15.6		35	%	$	14.1		18	%
Global Wealth Management Group		3.8		23	%		3.6		8	%		3.5		2	%		3.7		9	%		3.7		15	%
Asset Management		1.8		41	%		1.7		25	%		1.7		24	%		1.7		55	%	1.7		33		%
Securities Business		19.4		23	%		19.6		16	%		19.8		21	%		21.0		32	%	19.5			19	%
Discover		4.3		20	%		4.2		16	%		4.6		13	%		4.6		4	%		4.3		18	%
Capital surplus (unallocated)		3.2					3.1					3.0					2.5				3.1
Total - continuing operations		26.9		20	%		26.9		14	%		27.4		17	%		28.1		25	%		26.9		17	%
Discontinued operations		1.5					1.5					1.2					0.4				1.5
Firm	$	28.4		20	%	$	28.4		13	%	$	28.6		2	%	$	28.5		35	%	$	28.4	16		%

(1)

The Company uses an economic capital model to determine the amount of equity capital needed to support the risk of its business activities and to ensure that the Company remains

adequately capitalized. Economic capital is defined as the amount of capital needed to run the business through the business cycle and satisfy the requirements of regulators, rating

agencies and the market. The Company's methodology is based on a going concern approach that assigns economic capital to each segment based on regulatory capital usage

plus additional capital for stress losses, goodwill and principal investment risk. The economic capital model and allocation methodology may be enhanced over time in response

to changes in the business and regulatory environment.

Note:

Certain reclassifications have been made to prior period amounts to conform to the current presentation.

Refer to Legal Notice page 26.

	May 31, 2006
			Global Wealth
	Institutional Securities		Management Group		Asset Management		Discover		Total

Business facilitation:
Private equity funds	$	26	$	-	$	200	$	-	$	226
Real estate funds		378		-		-		-		378
Asset management seed capital		-		-		446		-		446
Industry utilities ⁽¹⁾		545		7		-		-		552
Other		186		38		12		10		246
Total business facilitation		1,135		45		658		10		1,848

Principal investments⁽²⁾		1,225		-		-		-		1,225

Total investments	$	2,360	$	45	$	658	$	10	$	3,073

	Feb 28, 2006
			Global Wealth
	Institutional Securities		Management Group		Asset Management		Discover		Total

Business facilitation:
Private equity funds	$	15	$	-	$	156	$	-	$	171
Real estate funds		366		-		-		-		366
Asset management seed capital		-		-		340		-		340
Industry utilities ⁽¹⁾		587		-		-		-		587
Other		262		35		13		8		318
Total business facilitation		1,230		35		509		8		1,782

Principal investments⁽²⁾		1,347		-		-		-		1,347

Total investments	$	2,577	$	35	$	509	$	8	$	3,129

Note:	The above tables include investments made by the Company that represent business facilitation or principal investing activities. Business facilitation investments are strategic investments undertaken by the Company to facilitate core business activities. Principal investing activities are capital commitments provided to private companies, generally, for proprietary purposes to maximize total returns to the Company.
(1)	Any investment made to participate in an industry consortium or an industry service with the intention to support core business activities and advance business growth.
(2)	Investment, dividend and net interest revenues associated with principal investments are $239 million and $34 million for the quarters ended May 31, 2006 and February 28, 2006, respectively.
Note:	Certain reclassifications have been made to prior period amounts to conform to the current presentation.
Refer to Legal Notice page 26.

	Quarter Ended																		Percentage Change From:				Six Months Ended						Percentage
	Feb 28, 2005			May 31, 2005			Aug 31, 2005			Nov 30, 2005			Feb 28, 2006			May 31, 2006			2Q06 vs. 2Q05		2Q06 vs. 1Q06		May 31, 2005			May 31, 2006			Change

Investment banking	$	742		$	735		$	898		$	1,102		$	903		$	1,055			44%		17%	$	1,477		$	1,958			33%
Principal transactions:
Trading		1,727			1,684			2,035			1,460			2,945			3,617			115%		23%		3,411			6,562			92%
Investments		91			226			69			270			284			595			163%		110%		317			879			177%
Commissions		503			538			501			618			610			694			29%		14%		1,041			1,304			25%
Asset management, distribution and admin. fees		34			39			46			33			44			73			87%		66%		73			117			60%
Interest and dividends		5,275			5,379			6,263			8,538			9,791			9,318			73%		(5%)		10,654			19,109			79%
Other		66			78			69			88			78			85			9%		9%		144			163			13%
Total revenues		8,438			8,679			9,881			12,109			14,655			15,437			78%		5%		17,117			30,092			76%
Interest expense		4,423			5,339			5,717			7,955			9,181			9,711			82%		6%		9,762			18,892			94%
Net revenues		4,015			3,340			4,164			4,154			5,474			5,726			71%		5%		7,355			11,200			52%

Total non-interest expenses		2,938			2,527			2,876			2,578			3,720			3,459			37%		(7%)		5,465			7,179			31%

Income from continuing operations before losses
from unconsolidated investees, taxes,
and cumulative effect of accounting change		1,077			813			1,288			1,576			1,754			2,267			179%		29%		1,890			4,021			113%
Losses from unconsolidated investees		73			67			105			66			68			103			54%		51%		140			171			22%
Income before taxes		1,004			746			1,183			1,510			1,686			2,164			190%		28%		1,750			3,850			120%
Provision for income taxes		284			172			305			148			523			786			*		50%		456			1,309			187%
Income from continuing operations ⁽¹⁾	$	720		$	574		$	878		$	1,362		$	1,163		$	1,378			140%		18%	$	1,294		$	2,541			96%

Return on average common equity ⁽²⁾		21	%		16	%		24	%		35	%		29	%		30	%						18	%		30	%
Pre-tax profit margin ⁽³⁾		27	%		24	%		31	%		38	%		32	%		40	%						26	%		36	%

	Quarter Ended																		Percentage Change From:				Six Months Ended						Percentage
	Feb 28, 2005			May 31, 2005			Aug 31, 2005			Nov 30, 2005			Feb 28, 2006			May 31, 2006			2Q06 vs. 2Q05		2Q06 vs. 1Q06		May 31, 2005			May 31, 2006			Change

Investment Banking
Advisory revenue	$	254		$	357		$	388		$	479		$	355		$	385			8%		8%	$	611		$	740		21%
Underwriting revenue
Equity		202			145			200			358			197			371			156%		88%		347			568		64%
Fixed income		286			233			310			265			351			299			28%		(15%)		519			650		25%
Total underwriting revenue	$	488		$	378		$	510		$	623		$	548		$	670			77%		22%	$	866		$	1,218		41%

Total investment banking revenue	$	742		$	735		$	898		$	1,102		$	903		$	1,055			44%		17%	$	1,477		$	1,958		33%

Sales and Trading
Sales and trading net revenue ⁽¹⁾
Equity		1,214			1,119			1,280			1,191			1,654			1,724			54%		4%		2,333			3,378		45%
Fixed income		1,998			1,211			1,964			1,609			2,724			2,366			95%		(13%)		3,209			5,090		59%
Total sales and trading net revenue	$	3,212		$	2,330		$	3,244		$	2,800		$	4,378		$	4,090			76%		(7%)	$	5,542		$	8,468		53%

		Fiscal View																						Calendar View
		Quarter Ended (2)																						Five Months Ended (2)
	Feb 28, 2005			May 31, 2005			Aug 31, 2005			Nov 30, 2005			Feb 28, 2006			May 31, 2006							May 31, 2005			May 31, 2006

Mergers and acquisitions announced transactions
Morgan Stanley global market volume (billions)	$	175.1		$	200.9		$	111.6		$	123.3		$	331.9		$	199.9						$	324.7		$	350.7
Market share		26.8	%		34.0	%		20.6	%		17.6	%		40.3	%		20.0	%						33.3	%		23.6	%
Rank		3			1			3			6			3			4							1			5

Mergers and acquisitions completed transactions
Morgan Stanley global market volume (billions)	$	41.5		$	95.5		$	154.8		$	179.9		$	163.5		$	174.4						$	124.2		$	284.2
Market share		11.8	%		25.4	%		23.0	%		30.7	%		27.0	%		31.7	%						20.5	%		30.0	%
Rank		7			2			5			2			2			2							4			2

Global equity and related issues
Morgan Stanley global market volume (billions)	$	14.7		$	5.7		$	9.0		$	15.5		$	10.8		$	18.8						$	15.5		$	23.7
Market share		11.8	%		6.3	%		6.2	%		10.3	%		7.5	%		9.7	%						9.4	%		8.7	%
Rank		1			6			5			1			4			2							4			3

Global IPO's
Morgan Stanley global market volume (billions)	$	3.5		$	2.1		$	3.2		$	5.4		$	2.7		$	7.5						$	4.8		$	8.9
Market Share		10.4	%		8.6	%		6.6	%		9.9	%		6.7	%		11.7	%						10.9	%		10.3	%
Rank		1			2			4			2			5			2							1			2

Global debt
Morgan Stanley global market volume (billions)	$	82.9		$	84.1		$	91.2		$	81.7		$	94.0		$	99.0						$	154.3		$	173.0
Market share		6.1	%		5.8	%		6.1	%		5.1	%		5.8	%		6.2	%						6.1	%		6.4	%
Rank		4			5			5			7			5			5							4			5

	Quarter Ended																		Percentage Change From:
	Feb 28, 2005			May 31, 2005			Aug 31, 2005			Nov 30, 2005			Feb 28, 2006			May 31, 2006			2Q06 vs. 2Q05		2Q06 vs. 1Q06
Loans
Investment grade	$	1.5		$	1.8		$	3.0		$	5.0		$	5.6		$	6.2			*		11%
Non-investment grade		1.0			1.9			2.8			2.3			2.9			2.9			53%		--
Total loans	$	2.5		$	3.7		$	5.8		$	7.3		$	8.5		$	9.1			146%		7%

Commitments
Investment grade	$	18.7		$	21.1		$	27.6		$	23.9		$	29.2		$	27.1			28%		(7%)
Non-investment grade		2.0			5.6			3.0			13.1			5.3			8.2			46%		55%
Total commitments	$	20.7		$	26.7		$	30.6		$	37.0		$	34.5		$	35.3			32%		2%

Loans plus commitments
Investment grade	$	20.2		$	22.9		$	30.6		$	28.9		$	34.8		$	33.3			45%		(4%)
Non-investment grade	$	3.0		$	7.5		$	5.8		$	15.4		$	8.2		$	11.1			48%		35%
% investment grade		87	%		75	%		84	%		65	%		81	%		75	%
% non-investment grade		13	%		25	%		16	%		35	%		19	%		25	%

Total loans and commitments	$	23.2		$	30.4		$	36.4		$	44.3		$	43.0		$	44.4			46%		3%
Hedges ⁽¹⁾	$	13.1		$	14.3		$	16.1		$	17.8		$	17.7		$	23.8			66%		34%
Total loans and commitments net of hedges	$	10.1		$	16.1		$	20.3		$	26.5		$	25.3		$	20.6			28%		(19%)

	Quarter Ended																		Percentage Change From:				Six Months Ended						Percentage
	Feb 28, 2005			May 31, 2005			Aug 31, 2005			Nov 30, 2005			Feb 28, 2006			May 31, 2006			2Q06 vs. 2Q05		2Q06 vs. 1Q06		May 31, 2005			May 31, 2006			Change
Investment banking	$	71		$	68		$	81		$	100		$	67		$	95			40%		42%	$	139		$	162			17%
Principal transactions:
Trading		120			111			116			117			124			121			9%		(2%)		231			245			6%
Investments		(2	)		(2	)		1			2			0			26			*		*		(4	)		26			*
Commissions		329			295			306			298			319			312			6%		(2%)		624			631			1%
Asset management, distribution and admin fees		607			632			629			649			649			674			7%		4%		1,239			1,323			7%
Interest and dividends		135			149			174			204			206			246			65%		19%		284			452			59%
Other		38			45			38			46			36			44			(2%)		22%		83			80			(4%)
Total revenues		1,298			1,298			1,345			1,416			1,401			1,518			17%		8%		2,596			2,919			12%
Interest expense		60			70			90			118			117			116			66%		(1%)		130			233			79%
Net revenues		1,238			1,228			1,255			1,298			1,284			1,402			14%		9%		2,466			2,686			9%

Total non-interest expenses		885			1,110			1,225			1,214			1,261			1,245			12%		(1%)		1,995			2,506			26%
Income before taxes		353			118			30			84			23			157			33%		*		471			180			(62%)
Provision for income taxes		139			48			11			(1	)		9			51			6%		*		187			60			(68%)
Income from continuing operations ⁽¹⁾	$	214		$	70		$	19		$	85		$	14		$	106			51%		*	$	284		$	120			(58%)

Return on average common equity ⁽²⁾		23	%		8	%		2	%		9	%		2	%		13	%						15	%		7	%
Pre-tax profit margin ⁽³⁾		29	%		10	%		2	%		7	%		2	%		11	%						19	%		7	%

	Quarter Ended																		Percentage Change From:
	Feb 28, 2005			May 31, 2005			Aug 31, 2005			Nov 30, 2005			Feb 28, 2006			May 31, 2006			2Q06 vs. 2Q05		2Q06 vs. 1Q06

Global representatives		10,471			10,438			9,311			9,526			9,000			8,179			(22%)		(9%)

Annualized revenue per global
representative (thousands)⁽¹⁾	$	462		$	470		$	508		$	551		$	554		$	653			39%		18%

Assets by client segment (billions)
$10m or more		148			148			153			157			167			172			16%		3%
$1m - $10m		211			211			215			218			224			225			7%		--
Subtotal - >$1m		359			359			368			375			391			397			11%		2%
$100k - $1m		193			190			188			181			181			183			(4%)		1%
< $100k		38			36			34			32			32			29			(19%)		(9%)
Client assets excluding corporate/other		590			585			590			588			604			609			4%		1%
Corporate / other		28			28			29			29			29			30			7%		3%
Total client assets (billions)	$	618		$	613		$	619		$	617		$	633		$	639			4%		1%

Fee-based client account assets (billions) ⁽²⁾	$	166		$	165		$	170		$	173		$	182		$	190			15%		4%
Fee-based assets as a % of client assets		27	%		27	%		27	%		28	%		29	%		30	%

Bank deposit program (millions)	$	496		$	446		$	449		$	1,689		$	7,319		$	9,114			*		25%

Client assets per global
representative (millions)⁽³⁾	$	59		$	59		$	66		$	65		$	70		$	78			32%		11%

Domestic retail net new assets (billions) ⁽⁴⁾	$	3.7		$	3.8		$	(2.1	)	$	(8.1	)	$	-		$	2.4			(37%)		*

Domestic retail locations		524			526			517			485			484			473			(10%)		(2%)

	Quarter Ended																		Percentage Change From:				Six Months Ended						Percentage
	Feb 28, 2005			May 31, 2005			Aug 31, 2005			Nov 30, 2005			Feb 28, 2006			May 31, 2006			2Q06 vs. 2Q05		2Q06 vs. 1Q06		May 31, 2005			May 31, 2006			Change
Investment banking	$	11		$	11		$	13		$	15		$	12		$	15			36%		25%	$	22		$	27			23%
Principal transactions:
Investments		64			2			33			227			30			69			*		130%		66			99			50%
Commissions		7			7			9			6			7			7			--		--		14			14			--
Asset management, distribution and admin fees		605			615			612			628			639			621			1%		(3%)		1,220			1,260			3%
Interest and dividends		3			3			4			13			5			10			*		100%		6			15			150%
Other		8			6			11			5			6			6			--		--		14			12			(14%)
Total revenues		698			644			682			894			699			728			13%		4%		1,342			1,427			6%
Interest expense		2			2			3			4			4			5			150%		25%		4			9			125%
Net revenues		696			642			679			890			695			723			13%		4%		1,338			1,418			6%

Total non-interest expenses		409			467			517			507			523			499			7%		(5%)		876			1,022			17%
Income before taxes		287			175			162			383			172			224			28%		30%		462			396			(14%)
Provision for income taxes		107			68			57			146			67			89			31%		33%		175			156			(11%)
Income from continuing operations ⁽¹⁾	$	180		$	107		$	105		$	237		$	105		$	135			26%		29%	$	287		$	240			(16%)

Return on average common equity ⁽²⁾		41	%		25	%		24	%		55	%		21	%		26	%						33	%		24	%
Pre-tax profit margin ⁽³⁾		41	%		27	%		24	%		43	%		25	%		31	%						35	%		28	%

	Quarter Ended																		Percentage Change From:				Six Months Ended						Percentage
	Feb 28, 2005			May 31, 2005			Aug 31, 2005			Nov 30, 2005			Feb 28, 2006			May 31, 2006			2Q06 vs. 2Q05		2Q06 vs. 1Q06		May 31, 2005			May 31, 2006			Change
Assets under management or supervision

Net flows
Retail	$	(0.7	)	$	(0.9	)	$	(1.0	)	$	(2.5	)	$	(3.1	)	$	(2.5	)		(178%)		19%	$	(1.6	)	$	(5.6	)		*
Institutional		(7.3	)		(3.0	)		(1.4	)		2.3			(2.1	)		1.3			143%		162%		(10.3	)		(0.8	)		92%
Net flows excluding money markets		(8.0	)		(3.9	)		(2.4	)		(0.2	)		(5.2	)		(1.2	)		69%		77%		(11.9	)		(6.4	)		46%
Money Markets		0.9			(3.2	)		2.2			(3.9	)		(1.7	)		(4.4	)		(38%)		(159%)		(2.3	)		(6.1	)		(165%)

Assets under management or supervision by distribution channel
Retail	$	201		$	199		$	201		$	199		$	195		$	190			(5%)		(3%)
Institutional		226			217			227			232			247			250			15%		1%
Total assets under management or supervision	$	427		$	416		$	428		$	431		$	442		$	440			6%		--

Assets under management or supervision by asset class
Equity	$	207		$	205		$	212		$	218		$	230		$	226			10%		(2%)
Fixed income		97			92			92			91			90			91			(1%)		1%
Money market		83			80			83			79			78			75			(6%)		(4%)
Alternatives		19			18			18			19			18			20			11%		11%
Real estate		10			10			11			12			14			15			50%		7%
Total assets under management		416			405			416			419			430			427			5%		(1%)
Unit investment trust		11			11			12			12			12			13			18%		8%
Total assets under management or supervision	$	427		$	416		$	428		$	431		$	442		$	440			6%		--

	Quarter Ended												Percentage Change From:
	Feb 28, 2005		May 31, 2005		Aug 31, 2005		Nov 30, 2005		Feb 28, 2006		May 31, 2006		2Q06 vs. 2Q05		2Q06 vs. 1Q06

Consolidated assets under management or supervision by distribution channel
Retail	$	321	$	319	$	327	$	331	$	337	$	331		4%		(2%)
Institutional		255		246		260		268		285		294		20%		3%
Total assets under management or supervision ⁽¹⁾	$	576	$	565	$	587	$	599	$	622	$	625		11%		--

Consolidated assets under management or supervision by asset class
Equity	$	267	$	265	$	276	$	285	$	301	$	303		14%		1%
Fixed income		111		106		107		108		108		109		3%		1%
Money market		87		84		87		83		83		80		(5%)		(4%)
Alternatives		19		18		18		19		18		20		11%		11%
Real estate		32		33		38		41		45		52		58%		16%
Total assets under management		516		506		526		536		555		564		11%		2%
Unit investment trust		11		11		12		12		12		13		18%		8%
Other ⁽²⁾		49		48		49		51		55		48		--		(13%)
Total assets under management or supervision ⁽¹⁾	$	576	$	565	$	587	$	599	$	622	$	625		11%		--

	Quarter Ended																		Percentage Change From:				Six Months Ended						Percentage
	Feb 28, 2005			May 31, 2005			Aug 31, 2005			Nov 30, 2005			Feb 28, 2006			May 31, 2006			2Q06 vs. 2Q05		2Q06 vs. 1Q06		May 31, 2005			May 31, 2006			Change

Merchant, cardmember and other fees	$	308		$	318		$	357		$	340		$	289		$	277			(13%)		(4%)	$	626		$	566			(10%)
Servicing and securitization income		494			423			398			294			596			651			54%		9%		917			1,247			36%
Other		2			2			(1	)		2			4			5			150%		25%		4			9			125%
Total non-interest revenues		804			743			754			636			889			933			26%		5%		1,547			1,822			18%

Interest revenue		458			536			593			587			586			608			13%		4%		994			1,194			20%
Interest expense		168			182			212			219			231			220			21%		(5%)		350			451			29%
Net interest income		290			354			381			368			355			388			10%		9%		644			743			15%

Provision for consumer loan losses		135			209			224			310			155			130			(38%)		(16%)		344			285			(17%)
Net credit income		155			145			157			58			200			258			78%		29%		300			458			53%

Net revenues		959			888			911			694			1,089			1,191			34%		9%		1,847			2,280			23%

Total non-interest expenses		605			625			672			629			610			650			4%		7%		1,230			1,260			2%

Income before losses from unconsolidated
investees and taxes		354			263			239			65			479			541			106%		13%		617			1,020			65%
Losses from unconsolidated investees		0			0			0			0			1			0			--		*		0			1			*
Income before taxes		354			263			239			65			478			541			106%		13%		617			1,019			65%
Provision for income taxes		134			99			89			18			178			203			105%		14%		233			381			64%
Income from continuing operations ⁽¹⁾	$	220		$	164		$	150		$	47		$	300		$	338			106%		13%	$	384		$	638			66%

Return on average common equity ⁽²⁾		20	%		16	%		13	%		4	%		26	%		27	%						18	%		27	%
Pre-tax profit margin ⁽³⁾		37	%		30	%		26	%		9	%		44	%		45	%						33	%		45	%

	Quarter Ended																		Percentage Change From:				Six Months Ended						Percentage
	Feb 28, 2005			May 31, 2005			Aug 31, 2005			Nov 30, 2005			Feb 28, 2006			May 31, 2006			2Q06 vs. 2Q05		2Q06 vs. 1Q06		May 31, 2005			May 31, 2006			Change


Merchant, cardmember and other fees	$	481		$	484		$	532		$	520		$	519		$	541			12%		4%	$	965		$	1,060			10%
Servicing and securitization income		0			0			0			0			0			0			--		--		0			0			--
Other		34			(14	)		(19	)		(74	)		143			22			*		(85%)		20			165			*
Total non-interest revenues		515			470			513			446			662			563			20%		(15%)		985			1,225			24%

Interest revenue		1,383			1,426			1,463			1,432			1,475			1,576			11%		7%		2,809			3,051			9%
Interest expense		401			433			475			497			541			576			33%		6%		834			1,117			34%
Net interest income		982			993			988			935			934			1,000			1%		7%		1,975			1,934			(2%)

Provision for consumer loan losses		538			575			590			687			507			372			(35%)		(27%)		1,113			879			(21%)
Net credit income		444			418			398			248			427			628			50%		47%		862			1,055			22%

Net revenues		959			888			911			694			1,089			1,191			34%		9%		1,847			2,280			23%

Total non-interest expenses		605			625			672			629			610			650			4%		7%		1,230			1,260			2%

Income before losses from unconsolidated
investees and taxes		354			263			239			65			479			541			106%		13%		617			1,020			65%
Losses from unconsolidated investees		0			0			0			0			1			0			--		*		0			1			*
Income before taxes		354			263			239			65			478			541			106%		13%		617			1,019			65%
Provision for income taxes		134			99			89			18			178			203			105%		14%		233			381			64%
Income from continuing operations ⁽¹⁾	$	220		$	164		$	150		$	47		$	300		$	338			106%		13%	$	384		$	638			66%

Return on average common equity⁽²⁾		20	%		16	%		13	%		4	%		26	%		27	%						18	%		27	%
Pre-tax profit margin ⁽³⁾		37	%		30	%		26	%		9	%		44	%		45	%						33	%		45	%

	Quarter Ended																		Percentage Change From:				Six Months Ended						Percentage
	Feb 28, 2005			May 31, 2005			Aug 31, 2005			Nov 30, 2005			Feb 28, 2006			May 31, 2006			2Q06 vs. 2Q05		2Q06 vs. 1Q06		May 31, 2005			May 31, 2006			Change


Total owned credit card loans
Period end	$	18,908		$	19,385		$	20,570		$	22,496		$	19,924		$	21,764			12%		9%	$	19,385		$	21,764			12%
Average	$	19,210		$	18,753		$	19,835		$	21,934		$	21,976		$	19,664			5%		(11%)	$	18,979		$	20,808			10%

Total managed credit card loans ⁽¹⁾⁽²⁾
Period end	$	47,770		$	46,845		$	47,105		$	46,936		$	47,825		$	48,539			4%		1%	$	46,845		$	48,539			4%
Average	$	48,930		$	47,146		$	46,769		$	46,502		$	47,575		$	47,307			--		(1%)	$	48,028		$	47,439			(1%)
Interest yield		11.23	%		11.69	%		12.04	%		11.94	%		12.13	%		12.69	%		100 bp		56 bp		11.46	%		12.42	%		96 bp
Interest spread		7.79	%		7.96	%		7.95	%		7.55	%		7.44	%		7.78	%		(18 bp)		34 bp		7.87	%		7.61	%		(26 bp)
Transaction volume (billions)	$	25.9		$	25.4		$	26.7		$	26.1		$	26.8		$	28.5			12%		6%	$	51.3		$	55.4			8%
Net Sales		20.8			21.1			22.4			21.6			22.5			24.0			14%		7%		41.9			46.5			11%
Other transaction volume		5.1			4.3			4.3			4.5			4.3			4.5			5%		5%		9.4			8.9			(6%)
Accounts (millions)		45.9			45.9			45.6			45.5			46.1			45.9			--		--		45.9			45.9			--
Active accounts (millions)		19.5			19.3			19.2			19.2			19.6			19.6			2%		--		19.3			19.6			2%
Average receivables per avg. active account (actual $)	$	2,476		$	2,426		$	2,429		$	2,420		$	2,457		$	2,415			--		(2%)	$	2,451		$	2,436			(1%)
Trans volume per avg. active account (actual $)	$	1,311		$	1,306		$	1,387		$	1,360		$	1,385		$	1,457			12%		5%	$	2,618		$	2,842			9%
Net gain on securitization	$	32		$	(16	)	$	(18	)	$	(76	)	$	139		$	18			*		(87%)	$	16		$	156			*
Return on managed receivables ⁽³⁾		1.82	%		1.38	%		1.28	%		0.40	%		2.56	%		2.84	%		146 bp		28 bp		1.60	%		2.70	%		110 bp
Credit quality
Net charge-off rate		5.11	%		4.94	%		5.12	%		5.76	%		5.06	%		3.30	%		(164 bp)		(176 bp)		5.03	%		4.18	%		(85 bp)
Delinquency rate (over 30 days)		4.24	%		3.90	%		3.91	%		3.98	%		3.45	%		3.29	%		(61 bp)		(16 bp)		3.90	%		3.29	%		(61 bp)
Delinquency rate (over 90 days)		2.05	%		1.83	%		1.80	%		1.75	%		1.61	%		1.53	%		(30 bp)		(8 bp)		1.83	%		1.53	%		(30 bp)
Allowance for loan losses at period end	$	840		$	828		$	817		$	829		$	777		$	773			(7%)		(1%)	$	828		$	773			(7%)

International managed credit card loans ⁽²⁾
Period end	$	2,648		$	2,479		$	2,684		$	2,675		$	4,183		$	4,406			78%		5%	$	2,479		$	4,406			78%
Average	$	2,606		$	2,578		$	2,523		$	2,667		$	2,911		$	4,049			57%		39%	$	2,592		$	3,486			34%
Accounts (millions)		1.4			1.4			1.5			1.5			2.6			2.9			107%		12%		1.4			2.9			107%

Payment services (millions of transactions)
Discover network transaction volume		314			315			338			334			339			340			8%		--		629			680			8%
PULSE network transaction volume⁽⁴⁾		216			457			466			417			425			471			3%		11%		673			896			33%
Total network transaction volume		530			772			804			751			764			811			5%		6%		1,302			1,575			21%

	Quarter Ended																	Percentage Change From:				Six Months Ended					Percentage
	Feb 28, 2005			May 31, 2005			Aug 31, 2005			Nov 30, 2005			Feb 28, 2006			May 31, 2006		2Q06 vs. 2Q05		2Q06 vs. 1Q06		May 31, 2005			May 31, 2006		Change

Investment banking ⁽¹⁾	$	(3	)	$	0		$	0		$	(1	)	$	0		$	(33)		*		*	$	(3	)	$	(33)		*
Principal transactions:
Trading		(1	)		(1	)		(1	)		(2	)		(2	)		(3)		(200%)		(50%)		(2	)		(5)		(150%)
Investments		0			0			0			0			0			0		--		--		0			0		--
Commissions		(15	)		(16	)		(12	)		(11	)		(7	)		(8)		50%		(14%)		(31	)		(15)		52%
Asset management, distribution and admin. fees		(42	)		(40	)		(38	)		(51	)		(53	)		(35)		13%		34%		(82	)		(88)		(7%)
Interest and dividends		(28	)		(32	)		(36	)		(43	)		(39	)		(68)		(113%)		(74%)		(60	)		(107)		(78%)
Other		(9	)		(10	)		(11	)		(9	)		(10	)		(15)		(50%)		(50%)		(19	)		(25)		(32%)
Total revenues		(98	)		(99	)		(98	)		(117	)		(111	)		(162)		(64%)		(46%)		(197	)		(273)		(39%)
Interest expense		(28	)		(32	)		(36	)		(43	)		(52	)		(64)		(100%)		(23%)		(60	)		(116)		(93%)
Net revenues		(70	)		(67	)		(62	)		(74	)		(59	)		(98)		(46%)		(66%)		(137	)		(157)		(15%)

Total non-interest expenses		(94	)		(92	)		(85	)		(96	)		(78	)		(85)		8%		(9%)		(186	)		(163)		12%

Income before taxes		24			25			23			22			19			(13)		(152%)		(168%)		49			6		(88%)
Provision for income taxes		9			10			8			7			7			(5)		(150%)		(171%)		19			2		(89%)
Income from continuing operations ⁽²⁾	$	15		$	15		$	15		$	15		$	12		$	(8)		(153%)		(167%)	$	30		$	4		(87%)

	Quarter Ended																		Percentage Change From:				Six Months Ended						Percentage
	Feb 28, 2005			May 31, 2005			Aug 31, 2005			Nov 30, 2005			Feb 28, 2006			May 31, 2006			2Q06 vs. 2Q05		2Q06 vs. 1Q06		May 31, 2005			May 31, 2006			Change

Investment banking	$	824		$	814		$	992		$	1,216		$	982		$	1,165			43%		19%	$	1,638		$	2,147			31%
Principal transactions:
Trading		1,847			1,795			2,151			1,577			3,069			3,738			108%		22%		3,642			6,807			87%
Investments		153			226			103			499			314			690			*		120%		379			1,004			165%
Commissions		824			824			804			911			929			1,005			22%		8%		1,648			1,934			17%
Asset management, distribution and administration fees		1,204			1,246			1,249			1,259			1,279			1,333			7%		4%		2,450			2,612			7%
Interest and dividends		5,405			5,521			6,429			8,738			9,991			9,537			73%		(5%)		10,926			19,528			79%
Other		103			119			107			130			110			120			1%		9%		222			230			4%
Total revenues		10,360			10,545			11,835			14,330			16,674			17,588			67%		5%		20,905			34,262			64%
Interest expense		4,477			5,401			5,798			8,060			9,278			9,799			81%		6%		9,878			19,077			93%
Net revenues		5,883			5,144			6,037			6,270			7,396			7,789			51%		5%		11,027			15,185			38%

Compensation and benefits		2,639			2,413			2,923			2,473			3,939			3,499			45%		(11%)		5,052			7,438			47%
Occupancy and equipment		308			209			217			220			209			216			3%		3%		517			425			(18%)
Brokerage, clearing and exchange fees		260			276			267			267			292			340			23%		16%		536			632			18%
Information processing and communications		260			265			263			269			259			272			3%		5%		525			531			1%
Marketing and business development		112			143			143			177			119			156			9%		31%		255			275			8%
Professional services		315			365			425			507			370			449			23%		21%		680			819			20%
Other		499			342			296			292			240			192			(44%)		(20%)		841			432			(49%)
September 11th related insurance recoveries, net		(251	)		0			0			0			0			0			--		--		(251	)		0			*
Total non-interest expenses		4,142			4,013			4,534			4,205			5,428			5,124			28%		(6%)		8,155			10,552			29%

Income from continuing operations before losses
from unconsolidated investees, taxes
and cumulative effect of accounting change		1,741			1,131			1,503			2,065			1,968			2,665			136%		35%		2,872			4,633			61%
Losses from unconsolidated investees		73			67			105			66			68			103			54%		51%		140			171			22%
Income before taxes		1,668			1,064			1,398			1,999			1,900			2,562			141%		35%		2,732			4,462			63%
Provision for income taxes		539			298			381			300			606			921			*		52%		837			1,527			82%
Income from continuing operations ⁽²⁾	$	1,129		$	766		$	1,017		$	1,699		$	1,294		$	1,641			114%		27%	$	1,895		$	2,935			55%

Return on average common equity ⁽³⁾		23	%		16	%		21	%		32	%		24	%		28	%						19	%		26	%
Compensation and benefits as a % of net revenues		45	%		47	%		48	%		39	%		53	%		45	%						46	%		49	%
Non-compensation expenses as a % of net revenues		26	%		31	%		27	%		28	%		20	%		21	%						28	%		21	%

Pre-tax profit margin ⁽⁴⁾		30	%		22	%		25	%		33	%		27	%		34	%						26	%		31	%


Number of employees ⁽⁵⁾		39,641			40,267			40,226			39,723			40,188			40,088			--		--

	Quarter Ended																		Percentage Change From:				Six Months Ended						Percentage
	Feb 28, 2005			May 31, 2005			Aug 31, 2005			Nov 30, 2005			Feb 28, 2006			May 31, 2006			2Q06 vs. 2Q05		2Q06 vs. 1Q06		May 31, 2005			May 31, 2006			Change


Merchant, cardmember and other fees	$	481		$	484		$	532		$	520		$	519		$	541			12%		4%	$	965		$	1,060			10%
Servicing and securitization income		0			0			0			0			0			0			--		--		0			0			--
Other		34			(14	)		(19	)		(74	)		143			22			*		(85%)		20			165			*
Total non-interest revenues		515			470			513			446			662			563			20%		(15%)		985			1,225			24%

Interest revenue		1,383			1,426			1,463			1,432			1,475			1,576			11%		7%		2,809			3,051			9%
Interest expense		401			433			475			497			541			576			33%		6%		834			1,117			34%
Net interest income		982			993			988			935			934			1,000			1%		7%		1,975			1,934			(2%)

Provision for consumer loan losses		538			575			590			687			507			372			(35%)		(27%)		1,113			879			(21%)
Net credit income		444			418			398			248			427			628			50%		47%		862			1,055			22%

Net revenues		959			888			911			694			1,089			1,191			34%		9%		1,847			2,280			23%

Compensation and benefits		215			209			242			199			244			224			7%		(8%)		424			468			10%
Occupancy and equipment		24			23			22			23			23			21			(9%)		(9%)		47			44			(6%)
Information processing and communications		83			85			87			98			90			96			13%		7%		168			186			11%
Marketing and business development		145			155			133			154			119			142			(8%)		19%		300			261			(13%)
Professional services		67			73			80			74			64			92			26%		44%		140			156			11%
Other		71			80			108			81			70			75			(6%)		7%		151			145			(4%)
Total non-interest expenses		605			625			672			629			610			650			4%		7%		1,230			1,260			2%

Income before losses from unconsolidated
investees and taxes		354			263			239			65			479			541			106%		13%		617			1,020			65%
Losses from unconsolidated investees		0			0			0			0			1			0			--		*		0			1			*
Income before taxes		354			263			239			65			478			541			106%		13%		617			1,019			65%
Provision for income taxes		134			99			89			18			178			203			105%		14%		233			381			64%
Income from continuing operations ⁽¹⁾	$	220		$	164		$	150		$	47		$	300		$	338			106%		13%	$	384		$	638			66%

Return on average common equity ⁽²⁾		20	%		16	%		13	%		4	%		26	%		27	%						18	%		27	%
Compensation and benefits as a % of net revenues		22	%		24	%		27	%		29	%		22	%		19	%						23	%		21	%
Non-compensation expenses as a % of net revenues		41	%		47	%		47	%		62	%		34	%		36	%						44	%		35	%
Pre-tax profit margin ⁽³⁾		37	%		30	%		26	%		9	%		44	%		45	%						33	%		45	%

Number of employees		14,077			13,875			13,534			13,495			13,683			13,075			(6%)		(4%)

MORGAN STANLEY

The following (pages 20 - 23) present a reconciliation for certain information disclosed on pages 14, 15, 16 and 19.

The data is presented on both a "managed" loan basis and as reported under generally accepted accounting principles ("owned" loan basis).
Managed loan data assume that the Company's securitized loan receivables have not been sold and presents the results of securitized loan
receivables in the same manner as the Company's owned loans. The Company operates its Discover business and analyzes its financial
performance on a managed basis. Accordingly, underwriting and servicing standards are comparable for both owned and securitized loans.
The Company believes that managed loan information is useful to investors because it provides information regarding the quality of loan
origination and credit performance of the entire managed portfolio and allows investors to understand the related credit risks inherent in owned
loans and retained interests in securitizations. In addition, investors often request information on a managed basis, which provides a more
meaningful comparison to industry competitors.

MORGAN STANLEY

Quarterly Discover Reconciliation of General Purpose Credit Card Loan Data ⁽¹⁾

(unaudited, dollars in millions)

	Quarter Ended May 31, 2006
																	Delinquency Rate
General Purpose Credit Card Loans:	Period End		Average		Return on Receivables			Interest Yield			Interest Spread			Net Charge-offs			30 Days			90 Days
Owned	$	21,764	$	19,664		6.83	%		11.01	%		6.41	%		3.02	%		2.97	%		1.38	%
Securitized		26,775		27,643		4.86	%		13.89	%		8.76	%		3.50	%		3.56	%		1.65	%
Managed	$	48,539	$	47,307		2.84	%		12.69	%		7.78	%		3.30	%		3.29	%		1.53	%

	Quarter Ended Feb 28, 2006
																	Delinquency Rate
General Purpose Credit Card Loans:	Period End		Average		Return on Receivables				Interest Yield			Interest Spread			Net Charge-offs			30 Days			90 Days
Owned	$	19,924	$	21,976		5.54	%		9.87	%		5.41	%		4.54	%		2.97	%		1.36	%
Securitized		27,901		25,599		4.75	%		14.08	%		9.20	%		5.51	%		3.79	%		1.79	%
Managed	$	47,825	$	47,575		2.56	%		12.13	%		7.44	%		5.06	%		3.45	%		1.61	%

	Quarter Ended Nov 30, 2005
																	Delinquency Rate
General Purpose Credit Card Loans:	Period End		Average		Return on Receivables			Interest Yield			Interest Spread			Net Charge-offs			30 Days			90 Days
Owned	$	22,496	$	21,934		0.86	%		9.89	%		5.53	%		5.35	%		3.69	%		1.62	%
Securitized		24,440		24,568		0.77	%		13.77	%		9.36	%		6.13	%		4.24	%		1.87	%
Managed	$	46,936	$	46,502		0.40	%		11.94	%		7.55	%		5.76	%		3.98	%		1.75	%

	Quarter Ended Aug 31, 2005
																	Delinquency Rate
General Purpose Credit Card Loans:	Period End		Average		Return on Receivables			Interest Yield			Interest Spread			Net Charge-offs			30 Days			90 Days
Owned	$	20,570	$	19,835		3.01	%		10.96	%		6.63	%		4.69	%		3.62	%		1.67	%
Securitized		26,535		26,934		2.21	%		12.83	%		8.93	%		5.43	%		4.13	%		1.90	%
Managed	$	47,105	$	46,769		1.28	%		12.04	%		7.95	%		5.12	%		3.91	%		1.80	%

	Quarter Ended May 31, 2005
																	Delinquency Rate
General Purpose Credit Card Loans:	Period End		Average		Return on Receivables			Interest Yield			Interest Spread			Net Charge-offs			30 Days			90 Days
Owned	$	19,385	$	18,753		3.48	%		10.56	%		6.47	%		4.62	%		3.48	%		1.64	%
Securitized		27,460		28,393		2.30	%		12.43	%		8.92	%		5.15	%		4.19	%		1.97	%
Managed	$	46,845	$	47,146		1.38	%		11.69	%		7.96	%		4.94	%		3.90	%		1.83	%

	Quarter Ended Feb 28, 2005
																	Delinquency Rate
General Purpose Credit Card Loans:	Period End		Average		Return on Receivables			Interest Yield			Interest Spread			Net Charge-offs			30 Days			90 Days
Owned	$	18,908	$	19,210		4.64	%		9.07	%		5.15	%		4.62	%		3.75	%		1.81	%
Securitized		28,862		29,720		3.00	%		12.63	%		9.47	%		5.43	%		4.55	%		2.20	%
Managed	$	47,770	$	48,930		1.82	%		11.23	%		7.79	%		5.11	%		4.24	%		2.05	%

	Six Months Ended May 31, 2006
																	Delinquency Rate
General Purpose Credit Card Loans:	Period End		Average		Return on Receivables			Interest Yield			Interest Spread			Net Charge-offs			30 Days			90 Days
Owned	$	21,764	$	20,808		6.15	%		10.41	%		5.89	%		3.82	%		2.97	%		1.38	%
Securitized		26,775		26,631		4.80	%		13.98	%		8.97	%		4.46	%		3.56	%		1.65	%
Managed	$	48,539	$	47,439		2.70	%		12.42	%		7.61	%		4.18	%		3.29	%		1.53	%


	Six Months Ended May 31, 2005
																	Delinquency Rate
General Purpose Credit Card Loans:	Period End		Average		Return on Receivables			Interest Yield			Interest Spread			Net Charge-offs			30 Days			90 Days
Owned	$	19,385	$	18,979		4.06	%		9.81	%		5.80	%		4.62	%		3.48	%		1.64	%
Securitized		27,460		29,049		2.65	%		12.53	%		9.20	%		5.30	%		4.19	%		1.97	%
Managed	$	46,845	$	48,028		1.60	%		11.46	%		7.87	%		5.03	%		3.90	%		1.83	%

	Quarter Ended																	Six Months Ended
	Feb 28, 2005			May 31, 2005			Aug 31, 2005			Nov 30, 2005			Feb 28, 2006			May 31, 2006		May 31, 2005			May 31, 2006

Merchant, cardmember and other fees:
Owned	$	308		$	318		$	357		$	340		$	289		$	277	$	626		$	566
Securitization adjustment		173			166			175			180			230			264		339			494
Managed	$	481		$	484		$	532		$	520		$	519		$	541	$	965		$	1,060

Servicing and securitizations income:
Owned	$	494		$	423		$	398		$	294		$	596		$	651	$	917		$	1,247
Securitization adjustment		(494	)		(423	)		(398	)		(294	)		(596	)		(651)		(917	)		(1,247)
Managed	$	-		$	-		$	-		$	-		$	-		$	-	$	-		$	-

Other:
Owned	$	2		$	2		$	(1	)	$	2		$	4		$	5	$	4		$	9
Securitization adjustment		32			(16	)		(18	)		(76	)		139			17		16			156
Managed	$	34		$	(14	)	$	(19	)	$	(74	)	$	143		$	22	$	20		$	165

Interest revenue:
Owned	$	458		$	536		$	593		$	587		$	586		$	608	$	994		$	1,194
Securitization adjustment		925			890			870			845			889			968		1,815			1,857
Managed	$	1,383		$	1,426		$	1,463		$	1,432		$	1,475		$	1,576	$	2,809		$	3,051

Interest expense:
Owned	$	168		$	182		$	212		$	219		$	231		$	220	$	350		$	451
Securitization adjustment		233			251			263			278			310			356		484			666
Managed	$	401		$	433		$	475		$	497		$	541		$	576	$	834		$	1,117

Provision for consumer loan losses:
Owned	$	135		$	209		$	224		$	310		$	155		$	130	$	344		$	285
Securitization adjustment		403			366			366			377			352			242		769			594
Managed	$	538		$	575		$	590		$	687		$	507		$	372	$	1,113		$	879

MORGAN STANLEY

The following (page 24) presents a reconciliation for adjusted assets.

Balance sheet leverage ratios are one indicator of capital adequacy when viewed in the context of a company's

overall liquidity and capital policies. The Company views the adjusted leverage ratio as a more relevant measure of

financial risk when comparing financial services firms and evaluating leverage trends. Adjusted assets exclude

certain self-funded assets considered to have minimal market, credit and/or liquidity risk that are generally

attributable to matched book and securities lending businesses as measured by aggregate resale agreements

and securities borrowed less non-derivative short positions. In addition, the adjusted leverage ratio reflects

the deduction from shareholders' equity of the amount of equity used to support goodwill and intangible assets,

as the Company does not view this amount of equity as available to support its risk capital needs.

MORGAN STANLEY

Quarterly Reconciliation of Adjusted Assets

(unaudited, dollars in millions, except ratios)

		Quarter Ended
		Feb 28, 2005			May 31, 2005			Aug 31, 2005			Nov 30, 2005			Feb 28, 2006			May 31, 2006

Total assets		$	802,210		$	818,711		$	837,391		$	898,523		$	959,613		$	1,027,317

Less:	Securities purchased under agreements to resell		(143,462	)		(145,579	)		(143,642	)		(174,330	)		(176,260	)		(190,289)
	Securities borrowed		(207,985	)		(228,454	)		(227,098	)		(244,241	)		(252,896	)		(274,581)
Add:	Financial instruments sold, not yet purchased		119,913			131,901			137,443			147,000			149,561			159,822
Less:	Derivative contracts sold, not yet purchased		(37,389	₎		(39,835	₎		(48,395	₎		(44,952	₎		(42,928	₎		(48,747	₎
	Subtotal		533,287			536,744			555,699			582,000			637,090			673,522
Less:	Segregated customer cash and securities balances		(26,461	)		(36,539	)		(30,912	)		(30,540	)		(27,156	)		(31,685)
	Assets recorded under certain provisions of SFAS No. 140 and FIN 46		(57,042	)		(57,394	)		(64,066	)		(67,091	)		(78,925	)		(90,046)
	Goodwill and intangible assets		(2,563	)		(2,528	)		(2,531	)		(2,500	)		(2,873	)		(2,932)

Adjusted assets		$	447,221		$	440,283		$	458,190		$	481,869		$	528,136		$	548,859

Shareholders' equity		$	28,495		$	28,330		$	28,226		$	29,182		$	30,123		$	32,255
Junior subordinated debt issued to capital trusts ⁽¹⁾			2,833			2,894			2,881			2,764			3,652			3,473
			31,328			31,224			31,107			31,946			33,775			35,728
Less: Goodwill and intangible assets			(2,563	)		(2,528	)		(2,531	)		(2,500	)		(2,873	)		(2,932)
Tangible shareholders' equity		$	28,765		$	28,696		$	28,576		$	29,446		$	30,902		$	32,796

Leverage ratio⁽²⁾			27.9x			28.5x			29.3x			30.5x			31.1x			31.3x

Adjusted leverage ratio ⁽³⁾			15.5x			15.3x			16.0x			16.4x			17.1x			16.7x

(1)	The Company views the junior subordinated debt issued to capital trusts as a component of its equity capital base given the inherent characteristics of the securities. These characteristics include the long dated nature (final maturity at issuance of thirty years extendable at the Company's option by a further nineteen years), the Company's ability to defer coupon interest for up to 20 consecutive quarters, and the subordinated nature of the obligations in the capital structure. The Company also receives rating agency equity credit for these securities.
(2)	Leverage ratio equals total assets divided by tangible shareholders' equity.
(3)	Adjusted leverage ratio equals adjusted total assets divided by tangible shareholders' equity.
Note:	Certain reclassifications have been made to prior period amounts to conform to the current presentation.
	Refer to Legal Notice page 26.

This page represents an addendum to the 2Q 2006 Financial Supplement.

In accordance with SFAS 123R, fiscal 2005 compensation expense included the amortization of fiscal 2003 and fiscal 2004 awards but excluded amortization for fiscal 2005 year-end awards. Fiscal 2006 compensation expense includes the amortization related to fiscal 2003 awards, fiscal 2004 awards, fiscal 2005 awards granted to non-retirement-eligible employees, the full cost of equity awards granted to retirement-eligible employees during fiscal 2006 (including fiscal 2005 year-end awards granted in December 2005) and the full cost of fiscal 2006 year-end equity awards to be granted to retirement-eligible employees in December 2006.

Based on interpretative guidance related to SFAS 123R in the first quarter of 2006, the Company has changed its accounting policy for expensing the cost of year-end equity awards that will be granted to retirement-eligible employees. In fiscal 2006, the Company is accruing the estimated cost of these awards over the course of the current year rather than expensing the awards on the date of the grant.

Fiscal 2005 and fiscal 2006 year-end awards to non-retirement-eligible employees will be amortized over the period from the grant date to the earlier of the employee's retirement eligibility date or the vesting date specified in the award terms.

For a further discussion of the Company's previous accounting for stock-based compensation, see the Company's Form 10-K for the fiscal year ended November 30, 2005

	Illustration of Standard Equity Award Amortization to Non-Retirement-Eligible and Retirement-Eligible Employees

	Non-Retirement-Eligible Employees - Fiscal Year Ended
Year of Award	Nov 30, 2003			Nov 30, 2004			Nov 30, 2005			Nov 30, 2006			Nov 30, 2007			Nov 30, 2008			Nov 30, 2009			Cumulative Amort. By Grant

2003		28	%		28	%		28	%		15	%		1	%		0	%		0	%		100	%

2004					28	%		28	%		28	%		15	%		1	%		0	%		100	%

2005											39	%		39	%		20	%		2	%		100	%

2006														39	%		39	%		20	%		98	%

2007																	39	%		39	%		78	%

2008																				39	%		39	%




	Retirement-Eligible Employees - Fiscal Year Ended
Year of Award	Nov 30, 2003			Nov 30, 2004			Nov 30, 2005			Nov 30, 2006			Nov 30, 2007			Nov 30, 2008			Nov 30, 2009			Cumulative Amort. By Grant

2003		28	%		28	%		28	%		15	%		1	%		0	%		0	%		100	%

2004					28	%		28	%		28	%		15	%		1	%		0	%		100	%

2005											100	%		0	%		0	%		0	%		100	%

2006											100	%		0	%		0	%		0	%		100	%

2007														100	%		0	%		0	%		100	%

2008																	100	%		0	%		100	%

2009																				100	%		100	%

MORGAN STANLEY
Financial Supplement - 2Q 2006
Table of Contents

Page #

1	…………….	Quarterly Financial Summary
2	…………….	Quarterly Consolidated Income Statement Information
3-4	…………….	Quarterly Consolidated Financial Information and Statistical Data
5	…………….	Consolidated Investment Assets
6	…………….	Quarterly Institutional Securities Income Statement Information
7-8	…………….	Quarterly Institutional Securities Financial Information and Statistical Data
9	…………….	Quarterly Global Wealth Management Group Income Statement Information
10	…………….	Quarterly Global Wealth Management Group Financial Information and Statistical Data
11	…………….	Quarterly Asset Management Income Statement Information
12	…………….	Quarterly Asset Management Financial Information and Statistical Data
13	…………….	Quarterly Consolidated Assets Under Management or Supervision
14	…………….	Quarterly Discover Income Statement Information
15	…………….	Quarterly Discover Income Statement Information (Managed Loan Basis)
16	…………….	Quarterly Discover Financial Information and Statistical Data
17	…………….	Quarterly Intersegment Eliminations Income Statement Information
18	…………….	Quarterly Inst'l. Securities, Global Wealth Management Group and Asset Mgmt. Combined Income Statement Information
19	…………….	Quarterly Discover Financial Information (Managed Loan Basis)
20	…………….	Quarterly Discover Reconciliation of General Purpose Credit Card Loan Data (Current Year)
21	…………….	Quarterly Discover Reconciliation of General Purpose Credit Card Loan Data (Prior Year)
22	…………….	YTD Reconciliation of General Credit Card Loan Data
23	…………….	Quarterly Discover Reconciliation of Managed Income Statement Data
24	…………….	Quarterly Reconciliation of Adjusted Assets
25	…………….	Illustration of Standard Equity Award Amortization
26	…………….	Legal Notice

(1)	Excludes gain/(loss) from discontinued operations and cumulative effect of accounting change.
(2)	Refer to page 4 for the allocation of average common equity.
(3)	Income before taxes, excluding losses from unconsolidated investees, as a % of net revenues.
Note:	Certain reclassifications have been made to prior period amounts to conform to the current presentation.
	Refer to Legal Notice page 26.

(1)	Includes principal transactions trading, commissions and net interest revenue.
(2)	Source: Thomson Financial, data as of June 7, 2006.
Note:	Certain reclassifications have been made to prior period amounts to conform to the current presentation.
	Refer to Legal Notice page 26.

(1)	Includes both internal and external hedges utilized by the lending business.
Note:	Certain reclassifications have been made to prior period amounts to conform to the current presentation.
	Refer to Legal Notice page 26.

(1)	Excludes cumulative effect of accounting change.
(2)	Refer to page 4 for the allocation of average common equity.
(3)	Income before taxes as a % of net revenues.
Note:	Certain reclassifications have been made to prior period amounts to conform to the current presentation.
	Refer to Legal Notice page 26.

(1)	Annualized revenue divided by average global representative headcount.
(2)	Represents the amount of assets in client accounts where the basis of payment for services is a fee calculated on those assets.
(3)	Total client assets divided by period end global representative headcount.
(4)	Represents net new assets in the U.S. broad-based branch system.
Note:	Certain reclassifications have been made to prior period amounts to conform to the current presentation.
	Refer to Legal Notice page 26.

(1)	Revenues and expenses associated with customer assets of $148 billion, $126 billion and $149 billion as of May 31, 2006, May 31, 2005 and Feb 28, 2006, respectively, are included in the Company's Global Wealth Management Group segment, and $37 billion, $23 billion and $31 billion as of May 31, 2006, May 31, 2005 and Feb 28, 2006, respectively, are included in the Company's Institutional Securities segment.
(2)	Includes assets under management or supervision associated with the Global Wealth Management Group.
Note:	Certain reclassifications have been made to prior period amounts to conform to the current presentation.
	Refer to Legal Notice page 26.

(1)	Includes domestic and international credit card businesses.
(2)	Includes owned and securitized credit card loans.
(3)	Annualized net income divided by average managed receivables.
(4)	Reflects volume subsequent to date of acquisition.
Note:	Certain reclassifications have been made to prior period amounts to conform to the current presentation.
	Refer to Legal Notice page 26.

(1)	Included in the May 31, 2006 amount is $30m related to the sale of the Company's aircraft leasing business.
(2)	Excludes cumulative effect of accounting change.
Note:	Certain reclassifications have been made to prior period amounts to conform to the current presentation.
	Refer to Legal Notice page 26.

(1)	Includes the elimination of intersegment activity between Institutional Securities, Global Wealth Management Group and Asset Management.
(2)	Excludes gain/(loss) from discontinued operations and cumulative effect of accounting change.
(3)	Refer to page 4 for the allocation of average common equity.
(4)	Income before taxes, excluding losses from unconsolidated investees, as a % of net revenues.
(5)	Includes Institutional Securities, Global Wealth Management Group, Asset Management and Infrastructure / Company areas.
Note:	Certain reclassifications have been made to prior period amounts to conform to the current presentation.
	Refer to Legal Notice page 26.

(1)	The table provides a reconciliation of certain managed and owned basis statistical data (period-end and average loan balances,
	return on receivables, interest yield, interest spread, net charge-off rates, and 30- and 90-day delinquency rates) for the periods indicated.
Note:	Certain reclassifications have been made to prior period amounts to conform to the current presentation.
	Refer to Legal Notice page 26.

(1)	The tables provide a reconciliation of certain managed and owned basis statistical data (period-end and average loan balances,
	return on receivables, interest yield, interest spread, net charge-off rates, and 30- and 90-day delinquency rates) for the periods indicated.
Notes:	Certain reclassifications have been made to prior period amounts to conform to the current presentation.
	Refer to Legal Notice page 26.

Note:	The actual fiscal impact depends on several factors including, but not limited to, forfeitures, award terms and modifications.
	Refer to Legal Notice page 26.