a5568797ex992.htm

	Quarter Ended																								Percentage Change From:						Twelve Months Ended
	Feb 28, 2006			May 31, 2006			Aug 31, 2006			Nov 30, 2006			Feb 28, 2007			May 31, 2007			Aug 31, 2007			Nov 30, 2007			4Q07 vs. 4Q06			4Q07 vs. 3Q07			Nov 30, 2006			Nov 30, 2007			Percentage Change
Net revenues
Institutional Securities	$	5,436		$	5,305		$	4,894		$	5,475		$	7,162		$	7,429		$	4,983		$	(3,425	)		(163	%)		(169	%)	$	21,110		$	16,149			(24	%)
Global Wealth Management Group		1,289			1,400			1,371			1,452			1,511			1,642			1,683			1,789			23	%		6	%		5,512			6,625			20	%
Asset Management		737			898			845			973			1,368			1,509			1,364			1,252			29	%		(8	%)		3,453			5,493			59	%
Intersegment Eliminations		(49	)		(90	)		(46	)		(51	)		(47	)		(56	)		(72	)		(66	)		(29	%)		8	%		(236	)		(241	)		(2	%)
Consolidated net revenues	$	7,413		$	7,513		$	7,064		$	7,849		$	9,994		$	10,524		$	7,958		$	(450	)		(106	%)		(106	%)	$	29,839		$	28,026			(6	%)

Income/(loss) before taxes ⁽¹⁾
Institutional Securities	$	1,707		$	1,899		$	1,915		$	2,200		$	2,845		$	2,950		$	1,501		$	(6,479	)		*			*		$	7,721		$	817			(89	%)
Global Wealth Management Group		20			158			161			169			226			264			287			378			124	%		32	%		508			1,155			127	%
Asset Management		166			262			155			268			379			303			491			294			10	%		(40	%)		851			1,467			72	%
Intersegment Eliminations		17			(18	)		13			11			6			7			(14	)		3			(73	%)		121	%		23			2			(91	%)
Consolidated income / (loss) before taxes	$	1,910		$	2,301		$	2,244		$	2,648		$	3,456		$	3,524		$	2,265		$	(5,804	)		*			*		$	9,103		$	3,441			(62	%)


Earnings per basic share: ⁽²⁾
Income from continuing operations	$	1.26		$	1.46		$	1.57		$	1.97		$	2.28		$	2.35		$	1.45		$	(3.61	)		*			*		$	6.25		$	2.49			(60	%)
Discontinued operations ⁽³⁾	$	0.28		$	0.36		$	0.26		$	0.22		$	0.35		$	0.22		$	0.07		$	-			*			*		$	1.13		$	0.64			(43	%)
Earnings per basic share	$	1.54		$	1.82		$	1.83		$	2.19		$	2.63		$	2.57		$	1.52		$	(3.61	)		*			*		$	7.38		$	3.13			(58	%)

Earnings per diluted share: ⁽²⁾
Income from continuing operations	$	1.21		$	1.40		$	1.50		$	1.87		$	2.17		$	2.24		$	1.38		$	(3.61	)		*			*		$	5.99		$	2.37			(60	%)
Discontinued operations ⁽³⁾	$	0.27		$	0.35		$	0.25		$	0.21		$	0.34		$	0.21		$	0.06		$	-			*			*		$	1.08		$	0.61			(44	%)
Earnings per diluted share	$	1.48		$	1.75		$	1.75		$	2.08		$	2.51		$	2.45		$	1.44		$	(3.61	)		*			*		$	7.07		$	2.98			(58	%)

Average common shares outstanding⁽²⁾
Basic		1,020,041,181			1,013,241,715			1,010,468,365			997,892,310			1,009,186,993			996,544,761			1,002,330,181			999,553,568									1,010,254,255			1,001,878,651
Diluted		1,061,764,798			1,054,733,745			1,055,664,392			1,052,831,345			1,057,912,545			1,045,643,087			1,057,495,875			999,553,568									1,054,796,062			1,054,240,169
Period end common shares outstanding		1,070,407,513			1,071,786,172			1,058,664,567			1,048,877,006			1,061,644,077			1,051,690,047			1,062,450,986			1,056,289,659									1,048,877,006			1,056,289,659

Return on average common equity from continuing operations		20.9	%		22.8	%		23.3	%		27.8	%		30.9	%		29.4	%		17.2	%		*									23.8	%		7.8	%
Return on average common equity		21.3	%		23.7	%		22.7	%		26.0	%		29.9	%		27.4	%		17.1	%		*									23.5	%		8.9	%

(1)	Represents consolidated income / (loss) from continuing operations before gain / (loss) from unconsolidated investees, taxes and gain / (loss) from discontinued operations.
(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.
	2007 is also affected by the loss reported for the quarter ended November 30, 2007. As a result of this loss, basic and diluted shares outstanding are equal for this period.
(3)	All periods have been restated to include the results of Discover Financial Services in discontinued operations.
Note:	Certain reclassifications have been made to prior period amounts to conform to the current presentation.
	Refer to Legal Notice page 16.

	Quarter Ended																								Percentage Change From:						Twelve Months Ended
	Feb 28, 2006			May 31, 2006			Aug 31, 2006			Nov 30, 2006			Feb 28, 2007			May 31, 2007			Aug 31, 2007			Nov 30, 2007			4Q07 vs. 4Q06			4Q07 vs. 3Q07			Nov 30, 2006			Nov 30, 2007			Percentage Change

Investment banking	$	982		$	1,132		$	1,138		$	1,503		$	1,227		$	1,913		$	1,659		$	1,569			4	%		(5	%)	$	4,755		$	6,368			34	%
Principal transactions:
Trading		3,086			3,559			2,843			2,317			4,158			4,838			1,381			(7,171	)		*			*			11,805			3,206			(73	%)
Investments		300			629			300			578			880			1,004			558			820			42	%		47	%		1,807			3,262			81	%
Commissions		920			994			880			976			1,005			1,123			1,264			1,290			32	%		2	%		3,770			4,682			24	%
Asset management, distribution and admin. fees		1,268			1,321			1,312			1,337			1,479			1,596			1,701			1,743			30	%		2	%		5,238			6,519			24	%
Interest and dividends		9,958			9,504			12,021			11,293			14,171			15,400			14,405			16,107			43	%		12	%		42,776			60,083			40	%
Other		130			118			119			218			272			321			262			353			62	%		35	%		585			1,208			106	%
Total revenues		16,644			17,257			18,613			18,222			23,192			26,195			21,230			14,711			(19	%)		(31	%)		70,736			85,328			21	%
Interest expense		9,231			9,744			11,549			10,373			13,198			15,671			13,272			15,161			46	%		14	%		40,897			57,302			40	%
Net revenues		7,413			7,513			7,064			7,849			9,994			10,524			7,958			(450	)		(106	%)		(106	%)		29,839			28,026			(6	%)

Compensation and benefits		4,010			3,587			3,085			3,304			4,775			4,994			3,596			3,187			(4	%)		(11	%)		13,986			16,552			18	%
Occupancy and equipment		210			215			233			254			260			279			279			312			23	%		12	%		912			1,130			24	%
Brokerage, clearing and exchange fees		292			340			339			334			361			366			459			470			41	%		2	%		1,305			1,656			27	%
Information processing and communications		259			272			274			284			277			286			302			328			15	%		9	%		1,089			1,193			10	%
Marketing and business development		120			155			147			221			153			199			190			271			23	%		43	%		643			813			26	%
Professional services		372			450			459			608			419			510			507			676			11	%		33	%		1,889			2,112			12	%
Other		240			193			283			196			293			366			360			110			(44	%)		(69	%)		912			1,129			24	%
Total non-compensation expenses		1,493			1,625			1,735			1,897			1,763			2,006			2,097			2,167			14	%		3	%		6,750			8,033			19	%

Total non-interest expenses		5,503			5,212			4,820			5,201			6,538			7,000			5,693			5,354			3	%		(6	%)		20,736			24,585			19	%

Income / (loss) from continuing operations before gain / (loss) from unconsolidated investees and taxes		1,910			2,301			2,244			2,648			3,456			3,524			2,265			(5,804	)		*			*			9,103			3,441			(62	%)
Gain / (loss) from unconsolidated investees		(19	)		24			20			(65	)		(26	)		(20	)		(19	)		18			128	%		195	%		(40	)		(47	)		(18	%)
Provision / (benefit) for income taxes		603			848			676			601			1,116			1,141			772			(2,198	)		*			*			2,728			831			(70	%)
Income / (loss) from continuing operations		1,288			1,477			1,588			1,982			2,314			2,363			1,474			(3,588	)		*			*			6,335			2,563			(60	%)
Discontinued operations ⁽¹⁾
Gain / (loss) from discontinued operations		453			583			399			231			564			349			111			0			*			*			1,666			1,024			(39	%)
Income Tax Provision /(benefit)		167			219			136			7			206			130			42			0			*			*			529			378			(29	%)
Gain / (loss) from discontinued operations		286			364			263			224			358			219			69			0			*			*			1,137			646			(43	%)
Net income / (loss)	$	1,574		$	1,841		$	1,851		$	2,206		$	2,672		$	2,582		$	1,543		$	(3,588	)		*			*		$	7,472		$	3,209			(57	%)
Preferred stock dividend requirements	$	-		$	-		$	-		$	19		$	17		$	17		$	17		$	17			(11	%)		--		$	19		$	68			*
Earnings / (loss) applicable to common shareholders	$	1,574		$	1,841		$	1,851		$	2,187		$	2,655		$	2,565		$	1,526		$	(3,605	)		*			*		$	7,453		$	3,141			(58	%)


Return on average common equity from continuing operations		20.9	%		22.8	%		23.3	%		27.8	%		30.9	%		29.4	%		17.2	%		*									23.8	%		7.8	%
Return on average common equity		21.3	%		23.7	%		22.7	%		26.0	%		29.9	%		27.4	%		17.1	%		*									23.5	%		8.9	%
Pre-tax profit margin⁽²⁾		26	%		31	%		32	%		34	%		35	%		34	%		29	%		*									31	%		12	%
Compensation and benefits as a % of net revenues		54	%		48	%		44	%		42	%		48	%		48	%		45	%		*									47	%		59	%

	Quarter Ended																	Percentage Change From:						Twelve Months Ended
	Feb 28, 2006		May 31, 2006		Aug 31, 2006		Nov 30, 2006		Feb 28, 2007 (2)		May 31, 2007		Aug 31, 2007		Nov 30, 2007			4Q07 vs. 4Q06			4Q07 vs. 3Q07			Nov 30, 2006		Nov 30, 2007		Percentage Change
Morgan Stanley
Regional revenue (millions) ^{(1) (3)}
Americas	$	4,680	$	4,702	$	4,527	$	4,894	$	6,072	$	6,049	$	4,121	$	(4,092	)		(184	%)		(199	%)	$	18,803	$	12,150		(35	%)
EMEA (Europe, Middle East, Africa)		1,895		2,061		1,826		1,980		2,702		2,970		2,405		1,931			(2	%)		(20	%)		7,762		10,008		29	%
Asia		838		750		711		975		1,220		1,505		1,432		1,771			75	%		19	%		3,274		5,868		79	%
Consolidated net revenues	$	7,413	$	7,513	$	7,064	$	7,849	$	9,994	$	10,524	$	7,958	$	(450	)		(106	%)		(106	%)	$	29,839	$	28,026		(6	%)

Total assets (millions)	$	959,950	$	1,027,419	$	1,029,354	$	1,121,192	$	1,182,061	$	1,199,993	$	1,185,131	$	1,051,678			(6	%)		(11	%)
Adjusted assets (millions) ⁽⁴⁾	$	516,883	$	533,488	$	543,544	$	638,158	$	653,875	$	704,421	$	688,966	$	564,439			(12	%)		(18	%)
Period end common shares outstanding (millions)		1,070.4		1,071.8		1,058.7		1,048.9		1,061.6		1,051.7		1,062.5		1,056.3			1	%		(1	%)
Book value per common share ⁽⁵⁾	$	28.12	$	29.97	$	31.24	$	32.67	$	34.71	$	36.52	$	32.14	$	28.56			(13	%)		(11	%)
Common equity	$	30,103	$	32,118	$	33,072	$	34,264	$	36,854	$	38,411	$	34,150	$	30,169			(12	%)		(12	%)
Shareholders' equity (millions)⁽⁶⁾	$	33,886	$	35,902	$	37,956	$	40,248	$	42,839	$	44,385	$	40,125	$	36,145			(10	%)		(10	%)
Total capital (millions) ⁽⁷⁾	$	134,366	$	145,849	$	149,956	$	162,134	$	177,270	$	187,250	$	187,480	$	193,669			19	%		3	%
Worldwide employees⁽¹⁾		40,188		40,088		41,416		43,124		44,797		45,845		47,713		48,256			12	%		1	%

Average Daily 95%/ One-Day Value-at-Risk ("VaR") ⁽⁸⁾
Primary Market Risk Category ($ millions, pre-tax)
Interest rate and credit spread	$	35	$	39	$	33	$	34	$	39	$	40	$	52	$	53
Equity price	$	25	$	29	$	26	$	32	$	45	$	44	$	43	$	41
Foreign exchange rate	$	9	$	9	$	7	$	12	$	15	$	16	$	17	$	25
Commodity price	$	31	$	28	$	33	$	30	$	40	$	34	$	38	$	35

Trading VaR	$	58	$	63	$	56	$	61	$	90	$	81	$	87	$	89
Non - trading VaR	$	20	$	26	$	24	$	18	$	14	$	17	$	20	$	36
Aggregate trading and non - trading VaR	$	65	$	70	$	66	$	67	$	92	$	87	$	91	$	98

(1)	Restated to exclude Discover Financial Services.
(2)	Effective December 1, 2006, the Company elected early adoption of SFAS No. 157, "Fair Value Measurements", and SFAS No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities - Including an amendment of FASB Statement No. 115." As a result of the adoption of SFAS No. 157 and SFAS No. 159, the Company recorded an after-tax cumulative effect adjustment of $186 million as an increase to the opening balance of retained earnings as of December 1, 2006.
(3)	Reflects the regional view of the Company's consolidated net revenues, on a managed basis, based on the following methodology:
	Institutional Securities: investment banking - client location, equity capital markets - client location, debt capital markets - revenue recording location, sales & trading - trading desk location
	Global Wealth Management: financial advisor location
	Asset Management: client location except for the merchant banking investing businesses which is based on asset location
(4)	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 14 for further information.
(5)	The Company's spin-off of Discover Financial Services on June 30, 2007 reduced book value per common share by approximately $5.79.
(6)	Includes common equity, preferred equity and junior subordinated debt issued to capital trusts.
(7)	Includes common equity, preferred equity, junior subordinated debt issued to capital trusts, capital units and the non-current portion of long-term debt.
(8)	95%/One-Day 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 Company's trading positions if the portfolio were held constant for a one day period. 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 2006.
Note:	Certain reclassifications have been made to prior period amounts to conform to the current presentation.
	Refer to Legal Notice page 16.

	Quarter Ended																										Twelve Months Ended
	Feb 28, 2007 (1)						May 31, 2007						Aug 31, 2007						Nov 30, 2007								Nov 30, 2007 (1) (2)
	Average tier 1 equity (billions) (3)		Average common equity (billions) (3)		Return on average common equity		Average tier 1 equity (billions) (3)		Average common equity (billions) (3)		Return on average common equity		Average tier 1 equity (billions) (3)		Average common equity (billions) (3)		Return on average common equity		Average tier 1 equity (billions) (3)			Average common equity (billions) (3)			Return on average common equity		Average tier 1 equity (billions) (3)		Average common equity (billions) (3)		Return on average common equity
Institutional Securities	$	21.0	$	20.0		38%	$	23.7	$	22.8		35%	$	25.7	$	25.1		16%	$	28.0		$	27.7			*	$	24.6	$	23.9		4%

Global Wealth Management Group		1.5		1.7		32%		1.5		1.6		40%		1.6		1.7		39%		1.6			1.7			52%		1.5		1.7		41%

Asset Management		2.3		3.0		31%		2.7		3.4		23%		2.8		3.6		35%		3.1			3.9			18%		2.7		3.5		26%

Unallocated capital		5.1		5.1				4.2		4.2				3.5		3.5				(0.4	)		(0.4	)				2.9		2.9

Total - continuing operations		29.9		29.8		31%		32.1		32.0		29%		33.6		33.9		17%		32.3			32.9			*		31.7		32.0		8%

Discontinued operations		4.6		5.7				4.5		5.4				1.6		1.9				0.0			0.0					2.7		3.2

Firm	$	34.5	$	35.5		30%	$	36.6	$	37.4		27%	$	35.2	$	35.8		17%	$	32.3		$	32.9			*	$	34.4	$	35.2		9%


	Quarter Ended																										Twelve Months Ended
	Feb 28, 2006						May 31, 2006						Aug 31, 2006						Nov 30, 2006								Nov 30, 2006
			Average common equity (billions)		Return on average common equity				Average common equity (billions)		Return on average common equity				Average common equity (billions)		Return on average common equity					Average common equity (billions)			Return on average common equity				Average common equity (billions) (3)		Return on average common equity
Institutional Securities			$	16.0		29%			$	17.9		27%			$	18.6		30%				$	19.4			35%			$	18.0		30%

Global Wealth Management Group				3.3		1%				3.1		14%				2.8		15%					2.8			17%				3.0		11%

Asset Management				2.2		18%				2.3		28%				2.5		15%					2.7			23%				2.4		21%

Unallocated capital				3.1						2.6						3.4							3.4							3.1

Total - continuing operations				24.6		21%				25.9		23%				27.3		23%					28.3			28%				26.5		24%

Discontinued operations				4.9						5.2						5.3							5.4							5.2

Firm			$	29.5		21%			$	31.1		24%			$	32.6		23%				$	33.7			26%			$	31.7		23%

(1)	For the quarter ended Feb 28, 2007, the Company had reassessed the amount of capital required to support the market risks and credit risks in its Global Wealth Management business.
(2)	At November 30, 2007, the Company had available Tier 1 equity of $29.4 billion and internally estimated Economic Capital needs of $33.5 billion, resulting in unallocated capital of negative $4.1 billion.
(3)	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. Beginning in 1Q07, economic capital is met by regulatory Tier 1 equity (including common shareholders' equity, certain preferred stock, eligible hybrid capital instruments and deductions of goodwill and certain intangibles and deferred tax assets), subject to regulatory limits. This enhancement to the Company's equity capital model and related disclosures have been made on a prospective basis.
Note:	Certain reclassifications have been made to prior period amounts to conform to the current presentation. Additionally, the average equity related to Discover Financial Services and Quilter Holdings Limited have been reclassed to discontinued operations in all periods.
	Refer to Legal Notice page 16.

	Quarter Ended																								Percentage Change From:						Twelve Months Ended
	Feb 28, 2006			May 31, 2006			Aug 31, 2006			Nov 30, 2006			Feb 28, 2007 (1)			May 31, 2007 (1)			Aug 31, 2007 (1)			Nov 30, 2007 (1)			4Q07 vs. 4Q06			4Q07 vs. 3Q07			Nov 30, 2006			Nov 30, 2007 (1)			Percentage Change

Investment banking	$	892		$	1,035		$	992		$	1,309		$	1,032		$	1,704		$	1,439		$	1,363			4	%		(5	%)	$	4,228		$	5,538			31	%
Principal transactions:
Trading		2,963			3,442			2,728			2,193			4,029			4,705			1,236			(7,230	)		*			*			11,326			2,740			(76	%)
Investments		243			389			114			335			350			396			217			496			48	%		129	%		1,081			1,459			35	%
Commissions		610			693			630			673			691			766			911			894			33	%		(2	%)		2,606			3,262			25	%
Asset management, distribution and admin. fees		8			29			19			17			25			25			24			29			71	%		21	%		73			103			41	%
Interest and dividends		9,822			9,338			11,852			11,094			14,021			15,193			14,141			15,776			42	%		12	%		42,106			59,131			40	%
Other		95			83			92			174			205			266			222			290			67	%		31	%		444			983			121	%
Total revenues		14,633			15,009			16,427			15,795			20,353			23,055			18,190			11,618			(26	%)		(36	%)		61,864			73,216			18	%
Interest expense		9,197			9,704			11,533			10,320			13,191			15,626			13,207			15,043			46	%		14	%		40,754			57,067			40	%
Net revenues		5,436			5,305			4,894			5,475			7,162			7,429			4,983			(3,425	)		(163	%)		(169	%)		21,110			16,149			(24	%)


Total non-interest expenses		3,729			3,406			2,979			3,275			4,317			4,479			3,482			3,054			(7	%)		(12	%)		13,389			15,332			15	%

Income / (loss) from continuing operations before gain / (loss) from unconsolidated investees and taxes		1,707			1,899			1,915			2,200			2,845			2,950			1,501			(6,479	)		*			*			7,721			817			(89	%)
Gain / (loss) from unconsolidated investees		(19	)		24			20			(65	)		(26	)		(20	)		(19	)		18			128	%		195	%		(40	)		(47	)		(18	%)
Income / (loss) before taxes		1,688			1,923			1,935			2,135			2,819			2,930			1,482			(6,461	)		*			*			7,681			770			(90	%)
Provision / (benefit) for income taxes		522			700			556			434			878			932			483			(2,463	)		*			*			2,212			(170	)		(108	%)
Income / (loss) from continuing operations ⁽²⁾	$	1,166		$	1,223		$	1,379		$	1,701		$	1,941		$	1,998		$	999		$	(3,998	)		*			*		$	5,469		$	940			(83	%)

Return on average common equity ⁽³⁾		29	%		27	%		30	%		35	%		38	%		35	%		16	%		*									30	%		4	%
Pre-tax profit margin ⁽⁴⁾		31	%		36	%		39	%		40	%		40	%		40	%		30	%		*									37	%		5	%

	Quarter Ended																								Percentage Change From:						Twelve Months Ended
	Feb 28, 2006			May 31, 2006			Aug 31, 2006			Nov 30, 2006			Feb 28, 2007			May 31, 2007			Aug 31, 2007			Nov 30, 2007			4Q07 vs. 4Q06			4Q07 vs. 3Q07			Nov 30, 2006			Nov 30, 2007			Percentage Change

Investment Banking
Advisory revenue	$	344		$	365		$	444		$	600		$	373		$	725		$	664		$	779			30	%		17	%	$	1,753		$	2,541			45	%
Underwriting revenue
Equity		197			371			237			254			300			493			429			348			37	%		(19	%)		1,059			1,570			48	%
Fixed income		351			299			311			455			359			486			346			236			(48	%)		(32	%)		1,416			1,427			1	%
Total underwriting revenue	$	548		$	670		$	548		$	709		$	659		$	979		$	775		$	584			(18	%)		(25	%)	$	2,475		$	2,997			21	%

Total investment banking revenue	$	892		$	1,035		$	992		$	1,309		$	1,032		$	1,704		$	1,439		$	1,363			4	%		(5	%)	$	4,228		$	5,538			31	%

Sales & Trading ⁽¹⁾
Equity	$	1,656		$	1,669		$	1,520		$	1,436		$	2,209		$	2,216		$	1,761		$	2,472			72	%		40	%	$	6,281		$	8,658			38	%
Fixed income		2,651			2,131			2,257			2,252			3,430			2,896			2,197			(7,873	)		*			*			9,291			650			(93	%)
Other		(109	)		(31	)		(100	)		(48	)		(89	)		(74	)		(877	)		(202	)		*			77	%		(288	)		(1,242	)		*
Total sales & trading net revenue	$	4,198		$	3,769		$	3,677		$	3,640		$	5,550		$	5,038		$	3,081		$	(5,603	)		*			*		$	15,284		$	8,066			(47	%)


	Fiscal View																														Calendar View
	Quarter Ended (2)																														Eleven Months Ended (2)
		Feb 28, 2006			May 31, 2006			Aug 31, 2006			Nov 30, 2006			Feb 28, 2007			May 31, 2007			Aug 31, 2007			Nov 30, 2007									Nov 30, 2006			Nov 30, 2007

Mergers and acquisitions announced transactions
Morgan Stanley global market volume (billions)	$	336.2		$	180.3		$	169.6		$	349.6		$	330.9		$	494.3		$	281.9		$	302.6								$	869.5		$	1,306.8
Market share		44.7	%		20.9	%		23.5	%		35.1	%		36.2	%		36.2	%		24.2	%		36.4	%								28.9	%		33.3	%
Rank		2			3			4			1			2			1			2			4									2			2

Mergers and acquisitions completed transactions
Morgan Stanley global market volume (billions)	$	177.7		$	182.4		$	175.4		$	230.1		$	187.3		$	352.5		$	235.4		$	483.2								$	659.9		$	1,224.2
Market share		26.9	%		28.8	%		25.6	%		30.3	%		21.1	%		39.4	%		25.7	%		49.1	%								27.8	%		37.0	%
Rank		3			2			5			1			4			1			2			2									2			1

Global equity and related issues
Morgan Stanley global market volume (billions)	$	10.8		$	19.2		$	10.4		$	14.9		$	13.9		$	20.2		$	18.3		$	14.8								$	49.3		$	59.3
Market share		7.4	%		9.3	%		8.4	%		6.5	%		7.5	%		8.4	%		8.1	%		6.6	%								7.7	%		7.4	%
Rank		4			2			4			6			4			3			4			5									4			5

Global IPO's
Morgan Stanley global market volume (billions)	$	2.7		$	7.6		$	5.2		$	6.1		$	4.1		$	6.4		$	6.4		$	6.8								$	20.3		$	21.3
Market Share		6.6	%		11.0	%		11.0	%		6.1	%		7.6	%		7.9	%		8.1	%		7.0	%								8.5	%		7.6	%
Rank		6			3			1			6			3			4			3			5									2			3

Global debt
Morgan Stanley global market volume (billions)	$	96.1		$	102.3		$	89.2		$	111.6		$	99.8		$	131.5		$	83.2		$	64.4								$	379.1		$	348.2
Market share		5.9	%		5.9	%		5.6	%		5.3	%		5.5	%		6.1	%		4.9	%		5.3	%								5.7	%		5.5	%
Rank		5			5			7			7			5			5			8			5									5			5

	Quarter Ended																								Percentage Change From:
	Feb 28, 2006			May 31, 2006			Aug 31, 2006			Nov 30, 2006			Feb 28, 2007			May 31, 2007			Aug 31, 2007			Nov 30, 2007			4Q07 vs. 4Q06			4Q07 vs. 3Q07

Corporate funded loans
Investment grade	$	5.6		$	6.2		$	7.4		$	6.4		$	6.2		$	13.7		$	11.1		$	12.5			95	%		13	%
Non-investment grade		2.9			2.9			5.4			3.4			3.9			4.9			7.5			10.0			194	%		33	%
Total corporate funded loans	$	8.5		$	9.1		$	12.8		$	9.8		$	10.1		$	18.6		$	18.6		$	22.5			130	%		21	%

Corporate lending commitments
Investment grade	$	30.2		$	28.2		$	30.4		$	35.0		$	31.5		$	42.1		$	50.4		$	50.2			43	%		--
Non-investment grade		6.3			9.0			19.1			18.5			25.5			32.4			35.7			20.0			8	%		(44	%)
Total corporate lending commitments	$	36.5		$	37.2		$	49.5		$	53.5		$	57.0		$	74.5		$	86.1		$	70.2			31	%		(18	%)

Corporate funded loans plus lending commitments
Investment grade	$	35.8		$	34.4		$	37.8		$	41.4		$	37.7		$	55.8		$	61.5		$	62.7			51	%		2	%
Non-investment grade	$	9.2		$	11.9		$	24.5		$	21.9		$	29.4		$	37.3		$	43.2		$	30.0			37	%		(31	%)
% investment grade		80	%		74	%		61	%		65	%		56	%		60	%		59	%		68	%
% non-investment grade		20	%		26	%		39	%		35	%		44	%		40	%		41	%		32	%

Total corporate funded loans and lending commitments	$	45.0		$	46.3		$	62.3		$	63.3		$	67.1		$	93.1		$	104.7		$	92.7			46	%		(11	%)
Hedges ⁽¹⁾	$	17.7		$	23.8		$	24.3		$	26.5		$	29.9		$	34.2		$	37.5		$	37.6			42	%		--
Total corporate funded loans and lending commitments net of hedges	$	27.3		$	22.5		$	38.0		$	36.8		$	37.2		$	58.9		$	67.2		$	55.1			50	%		(18	%)

	Quarter Ended																								Percentage Change From:						Twelve Months Ended
	Feb 28, 2006			May 31, 2006			Aug 31, 2006			Nov 30, 2006			Feb 28, 2007			May 31, 2007			Aug 31, 2007			Nov 30, 2007			4Q07 vs. 4Q06			4Q07 vs. 3Q07			Nov 30, 2006			Nov 30, 2007			Percentage Change
Investment banking	$	67		$	95		$	120		$	146		$	166		$	164		$	166		$	129			(12	%)		(22	%)	$	428		$	625			46	%
Principal transactions:
Trading		125			120			117			125			129			133			145			191			53	%		32	%		487			598			23	%
Investments		1			27			16			13			(2	)		20			3			8			(38	%)		167	%		57			29			(49	%)
Commissions		310			302			252			304			315			357			353			408			34	%		16	%		1,168			1,433			23	%
Asset management, distribution and admin fees		667			691			704			695			729			769			788			781			12	%		(1	%)		2,757			3,067			11	%
Interest and dividends		203			243			265			293			274			298			321			328			12	%		2	%		1,004			1,221			22	%
Other		31			36			26			37			38			40			33			52			41	%		58	%		130			163			25	%
Total revenues		1,404			1,514			1,500			1,613			1,649			1,781			1,809			1,897			18	%		5	%		6,031			7,136			18	%
Interest expense		115			114			129			161			138			139			126			108			(33	%)		(14	%)		519			511			(2	%)
Net revenues		1,289			1,400			1,371			1,452			1,511			1,642			1,683			1,789			23	%		6	%		5,512			6,625			20	%


Total non-interest expenses		1,269			1,242			1,210			1,283			1,285			1,378			1,396			1,411			10	%		1	%		5,004			5,470			9	%
Income before taxes		20			158			161			169			226			264			287			378			124	%		32	%		508			1,155			127	%
Provision for income taxes		8			52			54			53			87			102			119			151			185	%		27	%		167			459			175	%
Income from continuing operations	$	12		$	106		$	107		$	116		$	139		$	162		$	168		$	227			96	%		35	%	$	341		$	696			104	%

Return on average common equity ⁽¹⁾		1	%		14	%		15	%		17	%		32	%		40	%		39	%		52	%								11	%		41	%
Pre-tax profit margin ⁽²⁾		2	%		11	%		12	%		12	%		15	%		16	%		17	%		21	%								9	%		17	%

	Quarter Ended																								Percentage Change From:
	Feb 28, 2006			May 31, 2006			Aug 31, 2006			Nov 30, 2006			Feb 28, 2007			May 31, 2007			Aug 31, 2007			Nov 30, 2007			4Q07 vs. 4Q06			4Q07 vs. 3Q07

Global representatives		8,913			8,091			7,982			7,944			7,993			8,137			8,341			8,429			6	%		1	%

Annualized revenue per global representative (thousands)⁽¹⁾	$	562		$	659		$	682		$	729		$	758		$	814		$	817		$	853			17	%		4	%

Assets by client segment (billions)
$10m or more		166			170			176			199			210			223			228			247			24	%		8	%
$1m - $10m		220			220			229			243			248			268			265			275			13	%		4	%
Subtotal -> $1m		386			390			405			442			458			491			493			522			18	%		6	%
$100k -$1m		177			180			180			177			174			180			182			179			1	%		(2	%)
< $100k		32			29			28			27			26			24			24			23			(15	%)		(4	%)
Client assets excluding corporate / other		595			599			613			646			658			695			699			724			12	%		4	%
Corporate / other		29			30			29			30			32			33			35			34			13	%		(3	%)
Total client assets (billions)	$	624		$	629		$	642		$	676		$	690		$	728		$	734		$	758			12	%		3	%

% of assets by client segment > $1m ⁽²⁾		65	%		65	%		66	%		68	%		70	%		71	%		71	%		72	%

Fee-based client account assets (billions) ⁽³⁾	$	173		$	180		$	183		$	195		$	202		$	210		$	211		$	201			3	%		(5	%)

Fee-based assets as a % of client assets		28	%		29	%		29	%		29	%		29	%		29	%		29	%		27	%

Bank deposit program (millions)	$	7,319		$	9,114		$	9,839		$	13,301		$	16,364		$	18,226		$	19,409		$	26,160			97	%		35	%

Client assets per global representative (millions)⁽⁴⁾	$	70		$	78		$	80		$	85		$	86		$	89		$	88		$	90			6	%		2	%

Domestic retail net new assets (billions) ⁽⁵⁾	$	-		$	2.4		$	5.4		$	0.7		$	6.7		$	8.7		$	14.6		$	10.0			*			(32	%)

Domestic retail locations		484			473			460			453			451			453			455			451			--			(1	%)

	Quarter Ended																								Percentage Change From:						Twelve Months Ended
	Feb 28, 2006			May 31, 2006			Aug 31, 2006			Nov 30, 2006			Feb 28, 2007 (1)			May 31, 2007 (1)			Aug 31, 2007 (1)			Nov 30, 2007 (1)			4Q07 vs. 4Q06			4Q07 vs. 3Q07			Nov 30, 2006			Nov 30, 2007 (1)			Percentage Change
Investment banking	$	23		$	35		$	26		$	54		$	31		$	61		$	92		$	80			48	%		(13	%)	$	138		$	264			91	%
Principal transactions:
Trading⁽²⁾		0			0			0			0			0			0			0			(129	)		*			*			0			(129	)		*
Investments		56			213			170			230			532			588			338			316			37	%		(7	%)		669			1,774			165	%
Commissions		7			7			5			6			6			6			6			5			(17	%)		(17	%)		25			23			(8	%)
Asset management, distribution and admin fees		644			636			629			665			768			844			926			986			48	%		6	%		2,574			3,524			37	%
Interest and dividends		6			10			21			11			14			29			14			17			55	%		21	%		48			74			54	%
Other		6			5			5			10			34			18			10			13			30	%		30	%		26			75			188	%
Total revenues		742			906			856			976			1,385			1,546			1,386			1,288			32	%		(7	%)		3,480			5,605			61	%
Interest expense		5			8			11			3			17			37			22			36			*			64	%		27			112			*
Net revenues		737			898			845			973			1,368			1,509			1,364			1,252			29	%		(8	%)		3,453			5,493			59	%


Total non-interest expenses		571			636			690			705			989			1,206			873			958			36	%		10	%		2,602			4,026			55	%
Income before taxes		166			262			155			268			379			303			491			294			10	%		(40	%)		851			1,467			72	%
Provision for income taxes		66			103			61			110			149			105			174			113			3	%		(35	%)		340			541			59	%
Income from continuing operations	$	100		$	159		$	94		$	158		$	230		$	198		$	317		$	181			15	%		(43	%)	$	511		$	926			81	%

Return on average common equity ⁽³⁾		18	%		28	%		15	%		23	%		31	%		23	%		35	%		18	%								21	%		26	%
Pre-tax profit margin ⁽⁴⁾		23	%		29	%		18	%		28	%		28	%		20	%		36	%		24	%								25	%		27	%

(1)	Principal transactions investments revenue reflects net gain/(loss) on investments marked at fair value including real estate funds, private equity funds and seed capital investments. The related investment asset balance for the quarters ended Feb 28, 2007, May 31, 2007, Aug 31, 2007 and Nov 30, 2007 are $2.9 billion, $3.9 billion, $4.6 billion and $4.5 billion, respectively.
(2)	Trading results for the quarter and twelve months ended November 30, 2007 include losses related to securities issued by structured investment vehicles held by Asset Management.
(3)	Refer to page 4 for the allocation of average common equity.
(4)	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 16.

	Quarter Ended																								Percentage Change From:						Twelve Months Ended
	Feb 28, 2006			May 31, 2006			Aug 31, 2006			Nov 30, 2006			Feb 28, 2007			May 31, 2007			Aug 31, 2007			Nov 30, 2007			4Q07 vs. 4Q06			4Q07 vs. 3Q07			Nov 30, 2006			Nov 30, 2007			Percentage Change
Assets under management or supervision

Net flows by distribution channel
Americas Retail Morgan Stanley Brand		(3.1	)	$	(2.1	)	$	(2.2	)	$	(1.9	)	$	(2.0	)	$	0.1		$	(0.8	)	$	(1.6	)		16	%		(100	%)	$	(9.3	)	$	(4.3	)		54	%
Americas Retail Van Kampen Brand		(0.7	)		(0.4	)		(0.8	)		(0.1	)		0.0			0.0			1.1			(1.4	)		*			*			(2.0	)		(0.3	)		85	%
Americas Intermediary		1.7			4.0			1.5			1.0			1.0			1.8			1.2			0.4			(60	%)		(67	%)		8.2			4.4			(46	%)
U.S. Institutional		(4.7	)		(4.7	)		(2.7	)		(1.0	)		0.1			1.3			0.3			0.8			180	%		167	%		(13.1	)		2.5			119	%
Non- U.S.		1.2			2.5			0.3			2.5			4.7			4.1			6.1			7.4			196	%		21	%		6.5			22.3			*
Net flows excluding money markets		(5.6	)	$	(0.7	)	$	(3.9	)	$	0.5		$	3.8		$	7.3		$	7.9		$	5.6			*			(29	%)	$	(9.7	)	$	24.6			*
Money Market Net Flows
Institutional		4.0			(1.4	)		2.8			7.7			2.5			3.5			12.4			(2.9	)		(138	%)		(123	%)		13.1			15.5			18	%
Retail		(5.7	)		(3.0	)		(0.7	)		(3.3	)		(1.8	)		(1.5	)		0.5			(2.3	)		30	%		*			(12.7	)		(5.1	)		60	%
Total money market net flows		(1.7	)	$	(4.4	)	$	2.1		$	4.4		$	0.7		$	2.0		$	12.9		$	(5.2	)		*			(140	%)	$	0.4		$	10.4			*
Total net flows	$	(7.3	)	$	(5.1	)	$	(1.8	)	$	4.9		$	4.5		$	9.3		$	20.8		$	0.4			(92	%)		(98	%)	$	(9.3	)	$	35.0			*


Assets under management or supervision by distribution channel
Americas Retail Morgan Stanley Brand	$	65		$	63		$	61		$	63		$	62		$	67		$	63		$	64			2	%		2	%
Americas Retail Van Kampen Brand		90			89			90			94			96			102			99			99			5	%		--
Americas Intermediary		47			51			55			58			61			67			66			68			17	%		3	%
U.S. Institutional		98			96			95			100			110			119			122			128			28	%		5	%
Non- U.S.		77			80			84			93			102			111			118			132			42	%		12	%
Total long term assets under management or supervision		377			379			385			408			431			466			468			491			20	%		5	%
Institutional money markets/liquidity		37			37			40			49			52			57			70			68			39	%		(3	%)
Retail money markets		41			38			38			35			33			32			33			31			(11	%)		(6	%)
Total Money Markets		78			75			78			84			85			89			103			99			18	%		(4	%)
Total assets under management or supervision	$	455		$	454		$	463		$	492		$	516		$	555		$	571		$	590			20	%		3	%
Share of minority interest assets ⁽¹⁾		0			0			0			4			5			5			6			7			75	%		17	%
Total	$	455		$	454		$	463		$	496		$	521		$	560		$	577		$	597			20	%		3	%


Assets under management or supervision by asset class
Equity	$	230		$	226		$	226		$	239		$	245		$	265		$	254		$	265			11	%		4	%
Fixed income		90			91			93			94			94			98			98			102			9	%		4	%
Money market		78			75			78			84			85			89			103			99			18	%		(4	%)
Alternatives ⁽²⁾		45			49			53			61			77			87			101			109			79	%		8	%
Subtotal		443			441			450			478			501			539			556			575			20	%		3	%
Unit trusts		12			13			13			14			15			16			15			15			7	%		--
Total assets under management or supervision	$	455		$	454		$	463		$	492		$	516		$	555		$	571		$	590			20	%		3	%
Share of minority interest assets ⁽¹⁾		0			0			0			4			5			5			6			7			75	%		17	%
Total	$	455		$	454		$	463		$	496		$	521		$	560		$	577		$	597			20	%		3	%

	Quarter Ended																Percentage Change From:
	Feb 28, 2006		May 31, 2006		Aug 31, 2006		Nov 30, 2006		Feb 28, 2007		May 31, 2007		Aug 31, 2007		Nov 30, 2007		4Q07 vs. 4Q06			4Q07 vs. 3Q07

Assets under management or supervision by distribution channel
Americas Retail Morgan Stanley Brand	$	65	$	63	$	61	$	63	$	62	$	67	$	63	$	64		2	%		2	%
Americas Retail Van Kampen Brand		90		89		90		94		96		102		99		99		5	%		--
Americas Intermediary		47		51		55		58		61		67		66		68		17	%		3	%
U.S. Institutional		98		96		95		100		110		119		122		128		28	%		5	%
Non - U.S.		77		80		84		93		102		111		118		132		42	%		12	%
Total long term assets under management or supervision		377		379		385		408		431		466		468		491		20	%		5	%
Institutional money markets/liquidity		37		37		40		49		52		57		70		68		39	%		(3	%)
Retail money markets		41		38		38		35		33		32		33		31		(11	%)		(6	%)
Total Money Markets		78		75		78		84		85		89		103		99		18	%		(4	%)
Sub-total assets under management or supervision		455		454		463		492		516		555		571		590		20	%		3	%

Global Wealth Management Group		129		127		142		153		153		157		162		185		21	%		14	%
Total assets under management or supervision	$	584	$	581	$	605	$	645	$	669	$	712	$	733	$	775		20	%		6	%
Share of minority interest assets ⁽¹⁾		0		0		0		4		5		5		6		7		75	%		17	%
Total	$	584	$	581	$	605	$	649	$	674	$	717	$	739	$	782		20	%		6	%

Consolidated assets under management or supervision by asset class
Equity	$	288	$	288	$	289	$	307	$	317	$	344	$	333	$	356		16	%		7	%
Fixed income		105		106		109		111		111		116		118		127		14	%		7	%
Money market		82		79		83		89		90		94		109		108		21	%		(1	%)
Alternatives ⁽²⁾		45		49		53		61		77		87		101		109		79	%		8	%
Subtotal		520		522		534		568		595		641		661		699		23	%		6	%
Unit trusts		12		13		13		14		15		16		15		15		7	%		--
Other ⁽³⁾		52		46		58		63		59		55		57		61		(3	%)		7	%
Total assets under management or supervision	$	584	$	581	$	605	$	645	$	669	$	712	$	733	$	775		20	%		6	%
Share of minority interest assets ⁽¹⁾		0		0		0		4		5		5		6		7		75	%		17	%
Total	$	584	$	581	$	605	$	649	$	674	$	717	$	739	$	782		20	%		6	%

	Quarter Ended																								Percentage Change From:						Twelve Months Ended
	Feb 28, 2006			May 31, 2006			Aug 31, 2006			Nov 30, 2006			Feb 28, 2007			May 31, 2007			Aug 31, 2007			Nov 30, 2007			4Q07 vs. 4Q06			4Q07 vs. 3Q07			Nov 30, 2006			Nov 30, 2007			Percentage Change

Investment banking ⁽¹⁾	$	0		$	(33	)	$	0		$	(6	)	$	(2	)	$	(16	)	$	(38	)	$	(3	)		50	%		92	%	$	(39	)	$	(59	)		(51	%)
Principal transactions:
Trading		(2	)		(3	)		(2	)		(1	)		0			0			0			(3	)		(200	%)		*			(8	)		(3	)		63	%
Investments		0			0			0			0			0			0			0			0			--			--			0			0			--
Commissions		(7	)		(8	)		(7	)		(7	)		(7	)		(6	)		(6	)		(17	)		(143	%)		(183	%)		(29	)		(36	)		(24	%)
Asset management, distribution and admin. fees		(51	)		(35	)		(40	)		(40	)		(43	)		(42	)		(37	)		(53	)		(33	%)		(43	%)		(166	)		(175	)		(5	%)
Interest and dividends		(73	)		(87	)		(117	)		(105	)		(138	)		(120	)		(71	)		(14	)		87	%		80	%		(382	)		(343	)		10	%
Other		(2	)		(6	)		(4	)		(3	)		(5	)		(3	)		(3	)		(2	)		33	%		33	%		(15	)		(13	)		13	%
Total revenues		(135	)		(172	)		(170	)		(162	)		(195	)		(187	)		(155	)		(92	)		43	%		41	%		(639	)		(629	)		2	%
Interest expense		(86	)		(82	)		(124	)		(111	)		(148	)		(131	)		(83	)		(26	)		77	%		69	%		(403	)		(388	)		4	%
Net revenues		(49	)		(90	)		(46	)		(51	)		(47	)		(56	)		(72	)		(66	)		(29	%)		8	%		(236	)		(241	)		(2	%)

Total non-compensation expenses		(80	)		(83	)		(69	)		(71	)		(60	)		(68	)		(68	)		(72	)		(1	%)		(6	%)		(303	)		(268	)		12	%

Total non-interest expenses		(66	)		(72	)		(59	)		(62	)		(53	)		(63	)		(58	)		(69	)		(11	%)		(19	%)		(259	)		(243	)		6	%

Income before taxes		17			(18	)		13			11			6			7			(14	)		3			(73	%)		121	%		23			2			(91	%)
Provision for income taxes		7			(7	)		5			4			2			2			(4	)		1			(75	%)		125	%		9			1			(89	%)
Income from continuing operations	$	10		$	(11	)	$	8		$	7		$	4		$	5		$	(10	)	$	2			(71	%)		120	%	$	14		$	1			(93	%)

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. The Company has adopted a definition of adjusted assets that excludes certain self-funded assets considered to have minimal market, credit and / or liquidity risk. These low-risk assets generally are attributable to the Company’s matched book and securities lending businesses. Adjusted assets are calculated by reducing gross assets by aggregate resale agreements and securities borrowed less non-derivative short positions and assets recorded under certain provisions of SFAS No. 140 and FASB Interpretation No. 46 (revised December 2003), “Consolidation of Variable Interest Entities” (“FIN 46R”). Gross assets are also reduced by the full amount of cash and securities deposited with clearing organizations or segregated under federal and other regulations or requirements. 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). In addition, the Company views junior subordinated debt issued to capital trusts as a component of its capital base given the inherent characteristics of the securities. These characteristics include the long-dated nature (e.g., some have final maturity at issuance of 30 years extendible at the Company’s option by a further 19 years, others have a 60-year final maturity at issuance), 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.

MORGAN STANLEY

Quarterly Reconciliation of Adjusted Assets

(unaudited, dollars in millions, except ratios)

		Quarter Ended
		Feb 28, 2006			May 31, 2006			Aug 31, 2006			Nov 30, 2006			Feb 28, 2007			May 31, 2007			Aug 31, 2007			Nov 30, 2007

Total assets		$	959,950		$	1,027,419		$	1,029,354		$	1,121,192		$	1,182,061		$	1,199,993		$	1,185,131		$	1,051,678

Less:	Securities purchased under agreements to resell		(176,706	)		(190,835	)		(172,170	)		(175,787	)		(193,162	)		(144,051	)		(176,910	)		(128,686	)
	Securities borrowed		(252,896	)		(274,581	)		(283,024	)		(299,631	)		(277,093	)		(252,213	)		(257,032	)		(245,596	)
Add:	Financial instruments sold, not yet purchased		149,561			159,822			152,979			183,119			157,807			166,549			176,097			134,341
Less:	Derivative contracts sold, not yet purchased		(42,928	)		(48,747	)		(47,017	)		(57,491	)		(51,574	)		(58,919	)		(62,088	)		(71,604	)
	Subtotal		636,981			673,078			680,122			771,402			818,039			911,359			865,198			740,133
Less:	Cash and securities deposited with clearing organizations or segregated under federal and other regulations or requirements ⁽¹⁾		(38,300	)		(46,612	)		(43,986	)		(29,565	)		(35,739	)		(47,114	)		(43,229	)		(61,608	)
	Assets recorded under certain provisions of SFAS No.140 and FIN 46		(78,925	)		(90,046	)		(89,649	)		(100,236	)		(124,163	)		(155,692	)		(129,552	)		(110,001	)
	Goodwill and intangible assets		(2,873	)		(2,932	)		(2,943	)		(3,443	)		(4,262	)		(4,132	)		(3,451	)		(4,085	)

Adjusted assets		$	516,883		$	533,488		$	543,544		$	638,158		$	653,875		$	704,421		$	688,966		$	564,439

Common equity		$	30,103		$	32,118		$	33,072		$	34,264		$	36,854		$	38,411		$	34,150		$	30,169
Preferred equity			0			0			1,100			1,100			1,100			1,100			1,100			1,100
Shareholders' equity			30,103			32,118			34,172			35,364			37,954			39,511			35,250			31,269
Junior subordinated debt issued to capital trusts ⁽²⁾			3,783			3,784			3,784			4,884			4,885			4,874			4,875			4,876
	Subtotal		33,886			35,902			37,956			40,248			42,839			44,385			40,125			36,145
Less: Goodwill and intangible assets			(2,873	)		(2,932	)		(2,943	)		(3,443	)		(4,262	)		(4,132	)		(3,451	)		(4,085	)
Tangible shareholders' equity		$	31,013		$	32,970		$	35,013		$	36,805		$	38,577		$	40,253		$	36,674		$	32,060

Leverage ratio⁽³⁾			31.0x			31.2x			29.4x			30.5x			30.6x			29.8x			32.3x			32.8x

Adjusted leverage ratio ⁽⁴⁾			16.7x			16.2x			15.5x			17.3x			16.9x			17.5x			18.8x			17.6x

(1)	In the second quarter of fiscal 2007, the adjusted assets calculation was revised in order to reduce gross assets by the full amount of cash and securities deposited with clearing organizations or segregated under federal and other regulations or requirements. All prior periods have been restated to conform to the current presentation.
(2)	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 (some have final maturity at issuance of thirty years extendible at the Company's option by a further nineteen years, others have a sixty year final maturity at issuance), 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.
(3)	Leverage ratio equals total assets divided by tangible shareholders' equity.
(4)	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 16.

										Profit / (Loss)						Profit / (Loss)						Profit / (Loss)
	Statement of Financial Condition									Three Months Ended			Nine Months Ended			Two Months Ended			Eleven Months Ended			One Month Ended			Three Months Ended			Twelve Months Ended			Net Exposure (1)
	8/31/2007			10/31/2007			11/30/2007			8/31/2007						10/31/2007						11/30/2007									8/31/2007			10/31/2007			11/30/2007

Super Senior Exposure
High- Grade	$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-
Mezzanine		(1.8	)		(5.2	)		(8.7	)		(1.9	)		(2.2	)		(3.4	)		(5.6	)		(3.7	)		(7.1	)		(9.3	)		11.4			8.3			3.9
CDO-Squared		-			-			(0.1	)		-			-			-			-			(0.1	)		(0.1	)		(0.1	)		-			0.1			0.1
Total ABS CDO Super Senior Exposure	$	(1.8	)	$	(5.2	)	$	(8.8	)	$	(1.9	)	$	(2.2	)	$	(3.4	)	$	(5.6	)	$	(3.8	)	$	(7.2	)	$	(9.4	)	$	11.4		$	8.4		$	4.0

Other Retained and Warehouse Exposure
ABS CDO CDS	$	1.1		$	1.7		$	2.7		$	0.8		$	1.0		$	0.5		$	1.5		$	0.8		$	1.3		$	2.3		$	(2.9	)	$	(3.1	)	$	(1.5	)
ABS CDO Bonds		1.6			1.7			1.1			(0.4	)		(0.3	)		-			(0.3	)		(0.5	)		(0.5	)		(0.8	)		1.6			1.7			1.1
CDO Warehouse		-			-			-			-			-			-			-			-			-			-			-			-			-
Total Other Retained and Warehouse Exposure		2.7			3.4			3.8			0.4			0.7			0.5			1.2			0.3			0.8			1.5			(1.3	)		(1.4	)		(0.4	)
Subtotal ABS CDO Related Exposure ⁽²⁾	$	0.9		$	(1.8	)	$	(5.0	)	$	(1.5	)	$	(1.5	)	$	(2.9	)	$	(4.4	)	$	(3.5	)	$	(6.4	)	$	(7.9	)	$	10.1		$	7.0		$	3.6

U.S. Subprime Mortgage Related Exposure
Loans	$	2.9		$	1.5		$	0.6		$	-		$	(0.1	)	$	-		$	(0.1	)	$	(0.1	)	$	(0.1	)	$	(0.2	)	$	2.9		$	1.5		$	0.6
Total Rate of Return Swaps		0.1			-			-			-			0.1			-			0.1			-			-			0.1			(0.7	)		-			-
ABS Bonds		4.2			3.0			2.7			(0.7	)		(0.9	)		(1.9	)		(2.8	)		(1.0	)		(2.9	)		(3.8	)		4.0			3.0			2.7
ABS CDS		4.2			6.6			7.8			2.3			3.4			1.1			4.5			0.5			1.6			5.0			(5.9	)		(5.5	)		(5.1	)
Subtotal U.S. Subprime Mortgage Related Exposure⁽³⁾	$	11.4		$	11.1		$	11.1		$	1.6		$	2.5		$	(0.8	)	$	1.7		$	(0.6	)	$	(1.4	)	$	1.1		$	0.3		$	(1.0	)	$	(1.8	)
Total ABS CDO / Subprime Exposure⁽⁴⁾	$	12.3		$	9.3		$	6.1		$	0.1		$	1.0		$	(3.7	)	$	(2.7	)	$	(4.1	)	$	(7.8	)	$	(6.8	)	$	10.4		$	6.0		$	1.8

(1)	Net Exposure is defined as potential loss to the Firm in an event of 100% default, assuming zero recovery, over a period of time. The value of these positions remains subject to mark-to-market volatility. Positive amounts indicate potential loss (long position) in a default scenario. Negative amounts indicate potential gain (short position) in a default scenario.
(2)	In determining the fair value of the Firm’s ABS CDO super senior related exposures – which represent the most senior tranches of the capital structure of subprime ABS CDOs – Morgan Stanley took into consideration observable transactions and data for relevant benchmark instruments in synthetic subprime markets. The deterioration of these inputs have led to significant declines in the estimates of fair value. These declines reflect increase in implied losses across this portfolio. These implied loss levels are consistent with the losses in the range between 13% - 20% implied by the ABX indices. These cumulative loss levels, at a severity rate of 50%, imply defaults in the range of 43% - 50% for 2005 and 2006 outstanding mortgages.
(3)	In calculating the fair value of the Firm’s U.S. subprime mortgage related exposures – including loans, total rate-of-return swaps, ABS bonds (including subprime residuals) and ABS CDS – Morgan Stanley took into consideration observable transactions, the continued deterioration in market data, as evidenced by the sharp decline in the ABX indices, and other market developments, including updated cumulative loss data.
(4)	Statement of financial condition is presented on a net basis, which is a non-GAAP measure. These balances are presented on a gross basis in the Company's statement of financial condition.

	At November 30, 2007, the investment portfolios of Morgan Stanley Bank (Utah) and Morgan Stanley Trust FSB (collectively, the "Subsidiary Banks") include certain subprime-related securities. The securities in the Subsidiary Banks' portfolios are part of the Company's overall Treasury liquidity management portfolio. Such portfolios do not contain any subprime whole loans, subprime residuals or CDOs. The market value of the Subsidiary Banks' subprime-related securities, all of which are AAA-rated residential mortgage-backed securities, was $5.5 at November 30, 2007. Of that total, $4.3 are comprised of ABS bonds collateralized by first lien subprime mortgages of which $1.1 are further enhanced by FHLMC and AAA-rated monoline insurers. The remaining $1.2 of ABS bonds are collateralized by 2nd lien subprime mortgages and are enhanced by financial guarantees from AAA-rated monoline insurers. An 'other than temporary' impairment charge of $0.4 was reflected in net loss for the three months ended November 30, 2007. At November 30, 2007, the securities in the Subsidiary Banks' portfolio were redesignated as trading securities; prior to that date these securities were classified as 'available for sale' in accordance with SFAS 115, Accounting for Certain Investments in Debt and Equity Securities.

Note:	Refer to Legal Notice page 16.

MORGAN STANLEY
Financial Supplement - 4Q 2007
Table of Contents
	Page #

	1	…………….	Quarterly Financial Summary
	2	…………….	Quarterly Consolidated Income Statement Information
	3-4	…………….	Quarterly Consolidated Financial Information and Statistical Data
	5	…………….	Quarterly Institutional Securities Income Statement Information
	6-7	…………….	Quarterly Institutional Securities Financial Information and Statistical Data
	8	…………….	Quarterly Global Wealth Management Group Income Statement Information
	9	…………….	Quarterly Global Wealth Management Group Financial Information and Statistical Data
	10	…………….	Quarterly Asset Management Income Statement Information
	11	…………….	Quarterly Asset Management Financial Information and Statistical Data
	12	…………….	Quarterly Consolidated Assets Under Management or Supervision
	13	…………….	Quarterly Intersegment Eliminations Income Statement Information
	14	…………….	Quarterly Reconciliation of Adjusted Assets
	15	…………….	Institutional Securities Subprime Analysis
	16	…………….	Legal Notice

(1)	All periods have been restated to include the results of Discover Financial Services in discontinued operations.
(2)	Income / (loss) before taxes, excluding gain / (loss) from unconsolidated investees, as a % or net revenues.
Note:	Certain reclassifications have been made to prior period amounts to conform to the current presentation.
	Refer to Legal Notice page 16.

(1)	Principal transactions investments revenue reflects net gain / (loss) on investments marked at fair value. The related investment asset balance for the quarters ended Feb 28, 2007, May 31, 2007, Aug 31, 2007 and Nov 30, 2007 are $4.4 billion, $5.9 billion, $8.2 billion and $9.7 billion, respectively.
(2)	Excludes gain / (loss) from discontinued operations.
(3)	Refer to page 4 for the allocation of average common equity.
(4)	Income / (loss) before taxes, excluding gain / (loss) 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 16.

(1)	Includes principal transactions trading, commissions and net interest revenue. Equity and Fixed income sales and trading net revenue have been restated to include certain funding costs not previously allocated to those businesses. Other sales and trading net revenue primarily includes net losses from mark - to - market loans and closed and pipeline commitments, results related to Investment Banking and other activities.
(2)	Source: Thomson Financial, data as of December 5, 2007.
Note:	Certain reclassifications have been made to prior period amounts to conform to the current presentation.
	Refer to Legal Notice page 16.

(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 16.

(1)	Annualized revenue divided by average global representative headcount.
(2)	Excludes corporate / other assets.
(3)	Represents the amount of assets in client accounts where the basis of payment for services is a fee calculated on those assets.
(4)	Total client assets divided by period end global representative headcount.
(5)	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 16.

(1)	Amount represents Asset Management's proportional share of assets managed by entities in which it owns a minority interest.
(2)	Includes a range of alternative investment products such as real estate funds, hedge funds, private equity funds, funds of hedge funds and funds of private equity funds.
Note:	Certain reclassifications have been made to prior period amounts to conform to the current presentation.
	Refer to Legal Notice page 16.

(1)	Amount represents Asset Management's proportional share of assets managed by entities in which it owns a minority interest.
(2)	Includes a range of alternative investment products such as real estate funds, hedge funds, private equity funds, funds of hedge funds and funds of private equity funds.
(3)	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 16.

(1)	Included in the May 31, 2006 amount is $30 million related to the sale of the Company's aircraft leasing business.
	Included in the August 31, 2007 amount is $25 million related to the spin-off of Discover Financial Services.
Note:	Certain reclassifications have been made to prior period amounts to conform to the current presentation.
	Refer to Legal Notice page 16.