a5635006.htm

0001157523-08-002338.txt : 20080319 0001157523-08-002338.hdr.sgml : 20080319 20080319073031 ACCESSION NUMBER: 0001157523-08-002338 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20080319 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20080319 DATE AS OF CHANGE: 20080319 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MORGAN STANLEY CENTRAL INDEX KEY: 0000895421 STANDARD INDUSTRIAL CLASSIFICATION: SECURITY BROKERS, DEALERS & FLOTATION COMPANIES [6211] IRS NUMBER: 363145972 STATE OF INCORPORATION: DE FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-11758 FILM NUMBER: 08697990 BUSINESS ADDRESS: STREET 1: 1585 BROADWAY CITY: NEW YORK STATE: NY ZIP: 10036 BUSINESS PHONE: 212-761-4000 MAIL ADDRESS: STREET 1: 1585 BROADWAY CITY: NEW YORK STATE: NY ZIP: 10036 FORMER COMPANY: FORMER CONFORMED NAME: MORGAN STANLEY DEAN WITTER & CO DATE OF NAME CHANGE: 19980326 FORMER COMPANY: FORMER CONFORMED NAME: DEAN WITTER DISCOVER & CO DATE OF NAME CHANGE: 19960315 8-K 1 a5635006.htm MORGAN STANLEY 8-K a5635006.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): March 19, 2008

Morgan Stanley

(Exact name of Registrant as specified in its charter)

Delaware		1-11758		36-3145972
(State or other jurisdiction of incorporation)		(Commission File Number)		(I.R.S. Employer Identification No.)

1585 Broadway, New York, New York 10036

(Address of principal executive offices, including zip code)

Registrant's telephone number, including area code: (212) 761-4000

(Former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

[ ]	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ]	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ]	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ]	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition

On March 19, 2008, Morgan Stanley (the "Registrant") released financial information with respect to its fiscal quarter ended February 29, 2008. A copy of the press release containing this information is annexed as Exhibit 99.1 to this Report and by this reference incorporated herein and made a part hereof. In addition, a copy of the Registrant's Financial Data Supplement for its fiscal quarter ended February 29, 2008 is annexed as Exhibit 99.2 to this Report and by this reference incorporated herein and made a part hereof.

The information furnished under Item 2.02 of this Report, including Exhibit 99.1 and Exhibit 99.2, shall be deemed to be "filed" for purposes of the Securities Exchange Act of 1934, as amended.

Item 9.01. Financial Statements and Exhibits

99.1

Press release of the Registrant dated March 19, 2008 containing financial information for the first quarter ended February 29, 2008.

99.2

Quarterly Financial Data Supplement of the Registrant for the first quarter ended February 29, 2008.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.


	MORGAN STANLEY (Registrant)
	By:	/s/ Paul C. Wirth
	Paul C. Wirth
	Controller and Principal Accounting Officer



Dated: March 19, 2008

EX-99.1 3 a5635006ex99-1.htm EXHIBIT 99.1 a5635006ex99-1.htm

Contact:	Media Relations	Investor Relations
	Jeanmarie McFadden	William Pike
	212-762-6901	212-761-0008

Morgan Stanley Reports First Quarter Results

Net Revenues of $8.3 Billion

Quarterly EPS of $1.45 and Annualized ROE of 20%

Strong Trading Results with Record Revenues in Equities

NEW YORK, March 19, 2008 – Morgan Stanley (NYSE: MS) today reported income from continuing operations for the first quarter ended February 29, 2008 of $1,551 million, or $1.45 per diluted share, compared with $2,314 million, or $2.17 per diluted share, in the first quarter of last year. Net revenues were $8.3 billion, 17 percent below last year’s first quarter. Non-interest expenses of $6.1 billion, including severance expense of approximately $161 million related to staff reductions, decreased 7 percent from a year ago.(1) The annualized return on average common equity from continuing operations was 19.7 percent in the current quarter, compared with 30.9 percent in the prior year.

Net income for the quarter was $1,551 million, or $1.45 per diluted share, compared with net income of $2,672 million, or $2.51 per diluted share, in the first quarter of 2007. Net income for the first quarter of 2007 includes the results of Discover Financial Services and Quilter Holdings Ltd which are reported in discontinued operations. The annualized return on average common equity was 19.7 percent, compared with 29.9 percent a year ago.

Business Highlights

·	Institutional Securities revenues were $6.2 billion, the third highest quarter ever.

·	Equity sales and trading revenues were a record $3.3 billion, up 51 percent from last year’s first quarter, reflecting record results in both derivatives and prime brokerage.

Fixed income sales and trading revenues were $2.9 billion, the second highest quarter ever. These results reflect record revenues in interest rate, credit & currency products and the second highest quarter ever for commodities, partly offset by mortgage proprietary trading net writedowns of approximately $1.2 billion.

·	Other sales and trading included net losses of approximately $1.1 billion due primarily to the marking to market of loans as well as closed and pipeline commitments.

·	Investment banking delivered solid revenues of $980 million, including advisory revenues of $444 million, up 19 percent from last year’s first quarter.

·	Global Wealth Management achieved net revenues of $1.6 billion, up 6 percent from the first quarter of last year and a pre-tax margin of 16 percent. This business generated net new assets of $11 billion, the second highest on record and our eighth consecutive quarter of client inflows.

Asset Management faced challenging market conditions with losses in real estate and incurred further losses related to securities issued by structured investment vehicles resulting in a pre-tax loss of $161 million. The division continued to expand its product offerings with the launch of 15 new products in the first quarter including nine in alternatives, four in equities and two in fixed income.

·	The Firm’s international businesses achieved record revenues of $4.5 billion, up 15 percent from last year, on strong results across Europe and the emerging markets.

The Firm also announced today that the Morgan Stanley Board of Directors had approved the appointment of Ken deRegt as the Firm's new Chief Risk Officer. In this role, he will continue as a member of the Firm’s Management Committee and report to Chief Executive Officer John Mack. Mr. deRegt joined the Firm in February as a member of the Office of the Chairman to oversee the Firm’s risk function.

John J. Mack, Chairman and CEO, said, “Despite turbulent markets, Morgan Stanley achieved strong performance across many of our businesses this quarter – delivering a Firmwide ROE of 20 percent - and continued taking important steps to position the Firm for growth as we move forward in 2008. We achieved strong results across our equities and fixed income sales and trading businesses this quarter, as we effectively capitalized on market opportunities and aggressively managed our positions. We also delivered another solid quarter in investment banking and wealth management. While many of our businesses are facing challenging market conditions that we expect to continue in the months ahead, we are satisfied with how Morgan Stanley navigated the ongoing market turbulence. Our people remain intensely focused on continuing to serve our clients, building out our global franchise and executing our growth plans in order to create long-term value for Morgan Stanley’s shareholders.”

INSTITUTIONAL SECURITIES

Institutional Securities posted pre-tax income(2) of $2,117 million, compared with $2,845 million in the first quarter of 2007. Net revenues were $6.2 billion compared with net revenues of $7.2 billion a year ago. The quarter’s pre-tax margin was 34 percent, compared with 40 percent in last year’s first quarter. The quarter’s return on average common equity was 24 percent compared with 38 percent a year ago.

·	Advisory revenues were $444 million, a 19 percent increase from last year’s first quarter, compared with a decrease of 35 percent in industrywide completed M&A activity.(3)

Underwriting revenues of $536 million decreased 19 percent from last year’s first quarter. Equity underwriting revenues were $261 million, a 13 percent decrease from the prior year’s first quarter, compared with a 23 percent decrease in industrywide activity. Fixed income underwriting revenues decreased 23 percent to $275 million over the same period, compared with a 39 percent decrease in industrywide activity.(3)

Fixed income sales and trading net revenues were $2.9 billion, 15 percent below the record $3.4 billion in the first quarter of 2007 as record revenues in our Interest Rate, Credit & Currency (IRCC) business were partly offset by the mortgage proprietary trading net writedowns noted above. Within IRCC, interest rate products and credit trading generated higher revenues from strong customer flow and higher levels of volatility, and emerging markets generated record results. Credit trading also benefited from favorable positioning as credit spreads widened during the quarter. Commodities results, benefiting from strong customer flow, were higher than a year ago as higher trading revenues in agricultural products and oil liquids were partly offset by lower revenues in electricity and natural gas. Fixed income sales and trading also benefited by approximately $527 million from the widening of Morgan Stanley’s credit spreads on certain long-term debt.

Record equity sales and trading net revenues were $3.3 billion, an increase of 51 percent from last year’s first quarter. Strong trading results in a volatile market coupled with increased customer flow contributed to record results in derivatives and higher revenues in cash equities. Prime brokerage also generated record net revenues for the quarter. Equity sales and trading benefited by approximately $321 million from the widening of Morgan Stanley’s credit spreads on certain long-term debt.

·	Other sales and trading losses of approximately $1.1 billion reflected writedowns on loans and commitments largely related to acquisition financing to non-investment grade companies and the writedown of securities in the Firm’s subsidiary banks.(4)

·	Investment losses were $141 million compared to gains of $350 million in the first quarter of last year, reflecting losses on investments in real estate funds and our employee deferred compensation and co-investment plans.

The Company’s average trading VaR measured at the 95 percent confidence level was $97 million compared with $90 million in the first quarter of 2007 and $89 million in the fourth quarter of 2007. Total aggregate average trading and non-trading VaR was $103 million compared with $92 million in the first quarter of 2007 and $98 million in the fourth quarter of 2007. At quarter-end, the Company’s trading VaR was $100 million, and the aggregate trading and non-trading VaR was $107 million.

Non-interest expenses were $4.1 billion, a decrease of 5 percent from the first quarter of last year. Compensation costs, including the severance costs noted above, decreased from last year’s first quarter reflecting lower revenues. Non-compensation expenses increased from a year ago primarily resulting from higher levels of business activity.

For the first two months of calendar 2008, the Company ranked second in global announced M&A with a 23 percent market share, fourth in global completed M&A with a 28 percent market share, eighth in global IPOs with a 4 percent market share, tenth in global equity and equity-related issuances with a 4 percent market share and fifth in global debt issuance with a 5 percent market share.(5)

GLOBAL WEALTH MANAGEMENT GROUP

Global Wealth Management Group's pre-tax income for the first quarter was $254 million, a 12 percent increase from $226 million in the first quarter of last year. The quarter's pre-tax margin was 16 percent compared with 15 percent in last year's first quarter. The quarter's return on average common equity was 42 percent compared with 32 percent a year ago.

Net revenues of $1.6 billion were up 6 percent from a year ago reflecting higher net interest revenue from growth in the bank deposit sweep program and stronger transactional revenues. Lower asset management revenues reflect the discontinuance of certain fee-based brokerage programs in the fourth quarter of 2007 and a change in the classification of sub-advisory fees relating to certain customer agreements, partly offset by growth in other fee-based products.(6)

Non-interest expenses were $1.4 billion, up 5 percent from a year ago. Compensation costs, including the severance costs noted above, increased from a year ago, primarily reflecting higher revenues. Non-compensation expenses declined from a year ago, as higher levels of business activity were more than offset by a change in the classification of certain sub-advisory fees noted above.

·	Total client assets were $722 billion, a 5 percent increase from last year’s first quarter. Client assets in fee-based accounts were $185 billion, an 8 percent decrease from a year ago and represent 26 percent of total assets.

·	The 8,456 global representatives at quarter-end achieved average annualized revenue per global representative of $761,000 and total client assets per global representative of $85 million.

ASSET MANAGEMENT

Asset Management posted a pre-tax loss of $161 million compared with pre-tax income of $379 million in last year’s first quarter.

Net revenues decreased 60 percent to $543 million as our real estate business posted losses on principal investments compared to strong gains posted in the first quarter of last year. Lower trading results reflect losses of approximately $187 million related to securities issued by structured investment vehicles. These decreases were partly offset by higher management and administration fees primarily resulting from an increase in assets under management.

Non-interest expenses decreased 29 percent to $704 million from a year ago. Compensation costs, including the severance costs noted above, declined on lower revenues including losses associated with the employee deferred compensation and co-investment plans. Non-compensation expenses increased from a year ago reflecting higher levels of business activity.

·	Asset Management recorded net customer inflows of $6.6 billion for the quarter, primarily from institutional money markets, the sixth consecutive quarter of net customer inflows.

·	Assets under management or supervision at February 29, 2008 were $577 billion, up $56 billion, or 11 percent, from a year ago, driven by increases in the alternative and institutional money market asset classes. These increases primarily resulted from net customer inflows.

·	The percent of the Company's long-term fund assets performing in the top half of the Lipper rankings was 48 percent over one year, 54 percent over three years, 66 percent over five years and 75 percent over 10 years.

OTHER MATTERS

The quarter’s effective tax rate from continuing operations was 30.0 percent, down from 32.5 percent a year ago. The decrease in the rate primarily reflects a change in the geographic mix of earnings, partly offset by an increase in the rate due to lower domestic tax credits.

On January 28, 2008, the Company announced that it had reached an agreement to sell Morgan Stanley Wealth Management S.V., S.A.U. (“MSWM”), its Spanish onshore mass affluent wealth management business. The transaction is expected to close during the second quarter of fiscal 2008 subject to customary closing conditions, including regulatory approvals. The results of MSWM are included within the Global Wealth Management Group business segment.

As of February 29, 2008, the Company has not repurchased any shares of its common stock this fiscal year.

The Company announced that its Board of Directors declared a $0.27 quarterly dividend per common share. The dividend is payable on April 30, 2008, to common shareholders of record on April 11, 2008. The Company also announced that its Board of Directors declared a quarterly dividend of $313.29 per share of Series A Floating Rate Non-Cumulative Preferred Stock (represented by depositary shares, each representing 1/1,000th interest in a share of preferred stock and each having a dividend of $0.31329) to be paid on April 15, 2008 to preferred shareholders of record on March 31, 2008.

Total capital as of February 29, 2008 was $198.2 billion, including $43.9 billion of common shareholders' equity, preferred equity and junior subordinated debt issued to capital trusts. Book value per common share was $29.11, based on 1.1 billion shares outstanding.

Morgan Stanley is a leading global financial services firm providing a wide range of investment banking, securities, investment management and wealth management services. The Firm's employees serve clients worldwide including corporations, governments, institutions and individuals from more than 600 offices in 33 countries. For further information about Morgan Stanley, please visit www.morganstanley.com.

A financial summary follows. Financial, statistical and business-related information, as well as information regarding business and segment trends, is included in the Financial Supplement. Both the earnings release and the Financial Supplement are available online in the Investor Relations section at www.morganstanley.com.

# # #

(See Attached Schedules)

The information above contains forward-looking statements. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on which they are made and which reflect management's current estimates, projections, expectations or beliefs and which are subject to risks and uncertainties that may cause actual results to differ materially. For a discussion of additional risks and uncertainties that may affect the future results of the Company, please see "Forward-Looking Statements" immediately preceding Part I, Item 1, "Competition" and "Regulation" in Part I, Item 1, "Risk Factors" in Part I, Item 1A, "Legal Proceedings" in Part I, Item 3, "Management’s Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 and "Quantitative and Qualitative Disclosures about Market Risk" in Part II, Item 7A of the Company's Annual Report on Form 10-K for the fiscal year ended November 30, 2007 and other items throughout the Form 10-K and the Company's 2008 Current Reports on Form 8-K.

1 The severance expense was allocated to the business segments as follows: Institutional Securities, $130 million; Global Wealth Management, $19 million; and Asset Management, $12 million.

2 Represents income/(loss) from continuing operations before gains/(losses) from unconsolidated investees and taxes.

3 Source: Thomson Financial – for the periods: December 1, 2006 to February 28, 2007 and December 1, 2007 to February 29, 2008.

4 Includes Morgan Stanley Bank (Utah) and Morgan Stanley Trust FSB.

5 Source: Thomson Financial – for the period January 1, 2008 to February 29, 2008.

6 Beginning in 1Q08, certain sub-advisory fees are reported as a reduction to asset management, distribution and admin fees, reflecting changes to certain customer agreements. In prior periods, these fees were reported as non-compensation expenses.

MORGAN STANLEY
Quarterly Financial Summary
(unaudited, dollars in millions)



		Quarter Ended									Percentage Change From:
		Feb 29, 2008			Feb 28, 2007			Nov 30, 2007			Feb 28, 2007			Nov 30, 2007
Net revenues
	Institutional Securities	$	6,213		$	7,162		$	(3,425	)		(13	%)		*
	Global Wealth Management Group		1,606			1,511			1,789			6	%		(10	%)
	Asset Management		543			1,368			1,252			(60	%)		(57	%)
	Intersegment Eliminations		(40	)		(47	)		(66	)		15	%		39	%
	Consolidated net revenues	$	8,322		$	9,994		$	(450	)		(17	%)		*

Income / (loss) before taxes (1)
	Institutional Securities	$	2,117		$	2,845		$	(6,479	)		(26	%)		133	%
	Global Wealth Management Group		254			226			378			12	%		(33	%)
	Asset Management		(161	)		379			294			(142	%)		(155	%)
	Intersegment Eliminations		4			6			3			(33	%)		33	%
	Consolidated income / (loss) before taxes	$	2,214		$	3,456		$	(5,804	)		(36	%)		138	%
Earnings / (loss) applicable to common shareholders		$	1,534		$	2,655		$	(3,605	)		(42	%)		143	%

Earnings per basic share:
	Income from continuing operations	$	1.50		$	2.28		$	(3.61	)		(34	%)		142	%
	Discontinued operations (2)	$	-		$	0.35		$	-			*			--
Earnings per basic share		$	1.50		$	2.63		$	(3.61	)		(43	%)		142	%

Earnings per diluted share:
	Income from continuing operations	$	1.45		$	2.17		$	(3.61	)		(33	%)		140	%
	Discontinued operations (2)	$	-		$	0.34		$	-			*			--
Earnings per diluted share		$	1.45		$	2.51		$	(3.61	)		(42	%)		140	%

Average common shares outstanding
	Basic		1,020,802,234			1,009,186,993			999,553,568
	Diluted		1,057,867,487			1,057,912,545			999,553,568
Period end common shares outstanding			1,105,301,550			1,061,644,077			1,056,289,659

Return on average common equity
	from continuing operations		19.7	%		30.9	%		*
Return on average common equity			19.7	%		29.9	%		*


(1)	Represents consolidated income / (loss) from continuing operations before gain / (loss) from unconsolidated investees, taxes and gain / (loss)
	from discontinued operations.
(2)	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.

8

MORGAN STANLEY
Quarterly Consolidated Income Statement Information
(unaudited, dollars in millions)


		Quarter Ended									Percentage Change From:
		Feb 29, 2008			Feb 28, 2007			Nov 30, 2007			Feb 28, 2007			Nov 30, 2007

Investment banking		$	1,109		$	1,227		$	1,569			(10	%)		(29	%)
Principal transactions:
	Trading		3,390			4,158			(7,171	)		(18	%)		147	%
	Investments		(346	)		880			820			(139	%)		(142	%)
Commissions			1,199			1,005			1,290			19	%		(7	%)
Asset management, distribution and admin. fees			1,550			1,479			1,743			5	%		(11	%)
Interest and dividends			13,965			14,171			16,107			(1	%)		(13	%)
Other			317			272			353			17	%		(10	%)
	Total revenues		21,184			23,192			14,711			(9	%)		44	%
Interest expense			12,862			13,198			15,161			(3	%)		(15	%)
	Net revenues		8,322			9,994			(450	)		(17	%)		*

Compensation and benefits			4,071			4,775			3,187			(15	%)		28	%

Occupancy and equipment			286			260			312			10	%		(8	%)
Brokerage, clearing and exchange fees			444			361			470			23	%		(6	%)
Information processing and communications			305			277			328			10	%		(7	%)
Marketing and business development			183			153			271			20	%		(32	%)
Professional services			379			419			676			(10	%)		(44	%)
Other			440			293			110			50	%		*
Total non-compensation expenses			2,037			1,763			2,167			16	%		(6	%)

	Total non-interest expenses		6,108			6,538			5,354			(7	%)		14	%

Income / (loss) from continuing operations before gain / (loss)
	from unconsolidated investees and taxes		2,214			3,456			(5,804	)		(36	%)		138	%
Gain / (loss) from unconsolidated investees			2			(26	)		18			108	%		(89	%)
Provision / (benefit) for income taxes			665			1,116			(2,198	)		(40	%)		130	%
Income / (loss) from continuing operations			1,551			2,314			(3,588	)		(33	%)		143	%
Discontinued operations (1)
	Gain / (loss) from discontinued operations		0			564			0			*			--
	Income tax provision / (benefit)		0			206			0			*			--
	Gain / (loss) from discontinued operations		0			358			0			*			--
Net income / (loss)		$	1,551		$	2,672		$	(3,588	)		(42	%)		143	%
Preferred stock dividend requirements		$	17		$	17		$	17			--			--
Earnings / (loss) applicable to common shareholders		$	1,534		$	2,655		$	(3,605	)		(42	%)		143	%

Return on average common equity
	from continuing operations		19.7	%		30.9	%		*
Return on average common equity			19.7	%		29.9	%		*
Pre-tax profit margin (2)			27	%		35	%		*
Compensation and benefits as a % of net revenues			49	%		48	%		*
Non-Compensation expenses as a % of net revenues			25	%		18	%		*
Effective Tax Rate			30.0	%		32.5	%		*


(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 % of net revenues.
Note:	Certain reclassifications have been made to prior period amounts to conform to the current presentation.

9

EX-99.2 4 a5635006ex99-2.htm EXHIBIT 99.2 a5635006ex99-2.htm

MORGAN STANLEY
Quarterly Financial Summary
(unaudited, dollars in millions)



		Quarter Ended															Percentage Change From:
		Feb 28, 2007			May 31, 2007			Aug 31, 2007			Nov 30, 2007			Feb 29, 2008			1Q08 vs. 1Q07			1Q08 vs. 4Q07
Net revenues
	Institutional Securities	$	7,162		$	7,429		$	4,983		$	(3,425	)	$	6,213			(13	%)		*
	Global Wealth Management Group		1,511			1,642			1,683			1,789			1,606			6	%		(10	%)
	Asset Management		1,368			1,509			1,364			1,252			543			(60	%)		(57	%)
	Intersegment Eliminations		(47	)		(56	)		(72	)		(66	)		(40	)		15	%		39	%
	Consolidated net revenues	$	9,994		$	10,524		$	7,958		$	(450	)	$	8,322			(17	%)		*

Income / (loss) before taxes (1)
	Institutional Securities	$	2,845		$	2,950		$	1,501		$	(6,479	)	$	2,117			(26	%)		133	%
	Global Wealth Management Group		226			264			287			378			254			12	%		(33	%)
	Asset Management		379			303			491			294			(161	)		(142	%)		(155	%)
	Intersegment Eliminations		6			7			(14	)		3			4			(33	%)		33	%
	Consolidated income / (loss) before taxes	$	3,456		$	3,524		$	2,265		$	(5,804	)	$	2,214			(36	%)		138	%
Earnings / (loss) applicable to common shareholders		$	2,655		$	2,565		$	1,526		$	(3,605	)	$	1,534			(42	%)		143	%

Earnings per basic share:
	Income from continuing operations	$	2.28		$	2.35		$	1.45		$	(3.61	)	$	1.50			(34	%)		142	%
	Discontinued operations (2)	$	0.35		$	0.22		$	0.07		$	-		$	-			*			--
Earnings per basic share		$	2.63		$	2.57		$	1.52		$	(3.61	)	$	1.50			(43	%)		142	%

Earnings per diluted share:
	Income from continuing operations	$	2.17		$	2.24		$	1.38		$	(3.61	)	$	1.45			(33	%)		140	%
	Discontinued operations (2)	$	0.34		$	0.21		$	0.06		$	-		$	-			*			--
Earnings per diluted share		$	2.51		$	2.45		$	1.44		$	(3.61	)	$	1.45			(42	%)		140	%

Average common shares outstanding
	Basic		1,009,186,993			996,544,761			1,002,330,181			999,553,568			1,020,802,234
	Diluted		1,057,912,545			1,045,643,087			1,057,495,875			999,553,568			1,057,867,487
Period end common shares outstanding			1,061,644,077			1,051,690,047			1,062,450,986			1,056,289,659			1,105,301,550

Return on average common equity
	from continuing operations		30.9	%		29.4	%		17.2	%		*			19.7	%
Return on average common equity			29.9	%		27.4	%		17.1	%		*			19.7	%

(1)	Represents consolidated income / (loss) from continuing operations before gain / (loss) from unconsolidated investees, taxes and gain / (loss) from discontinued operations.
(2)	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.

MORGAN STANLEY

Quarterly Consolidated Income Statement Information

(unaudited, dollars in millions)

	Quarter Ended															Percentage Change From:
	Feb 28, 2007			May 31, 2007			Aug 31, 2007			Nov 30, 2007			Feb 29, 2008			1Q08 vs. 1Q07			1Q08 vs. 4Q07

Investment banking	$	1,227		$	1,913		$	1,659		$	1,569		$	1,109			(10	%)		(29	%)
Principal transactions:
Trading		4,158			4,838			1,381			(7,171	)		3,390			(18	%)		147	%
Investments		880			1,004			558			820			(346	)		(139	%)		(142	%)
Commissions		1,005			1,123			1,264			1,290			1,199			19	%		(7	%)
Asset management, distribution and admin. fees		1,479			1,596			1,701			1,743			1,550			5	%		(11	%)
Interest and dividends		14,171			15,400			14,405			16,107			13,965			(1	%)		(13	%)
Other		272			321			262			353			317			17	%		(10	%)
Total revenues		23,192			26,195			21,230			14,711			21,184			(9	%)		44	%
Interest expense		13,198			15,671			13,272			15,161			12,862			(3	%)		(15	%)
Net revenues		9,994			10,524			7,958			(450	)		8,322			(17	%)		*

Compensation and benefits		4,775			4,994			3,596			3,187			4,071			(15	%)		28	%

Occupancy and equipment		260			279			279			312			286			10	%		(8	%)
Brokerage, clearing and exchange fees		361			366			459			470			444			23	%		(6	%)
Information processing and communications		277			286			302			328			305			10	%		(7	%)
Marketing and business development		153			199			190			271			183			20	%		(32	%)
Professional services		419			510			507			676			379			(10	%)		(44	%)
Other		293			366			360			110			440			50	%		*
Total non-compensation expenses		1,763			2,006			2,097			2,167			2,037			16	%		(6	%)

Total non-interest expenses		6,538			7,000			5,693			5,354			6,108			(7	%)		14	%

Income / (loss) from continuing operations before gain / (loss)
from unconsolidated investees and taxes		3,456			3,524			2,265			(5,804	)		2,214			(36	%)		138	%
Gain / (loss) from unconsolidated investees		(26	)		(20	)		(19	)		18			2			108	%		(89	%)
Provision / (benefit) for income taxes		1,116			1,141			772			(2,198	)		665			(40	%)		130	%
Income / (loss) from continuing operations		2,314			2,363			1,474			(3,588	)		1,551			(33	%)		143	%
Discontinued operations (1)
Gain / (loss) from discontinued operations		564			349			111			0			0			*			--
Income tax provision / (benefit)		206			130			42			0			0			*			--
Gain / (loss) from discontinued operations		358			219			69			0			0			*			--
Net income / (loss)	$	2,672		$	2,582		$	1,543		$	(3,588	)	$	1,551			(42	%)		143	%
Preferred stock dividend requirements	$	17		$	17		$	17		$	17		$	17			--			--
Earnings / (loss) applicable to common shareholders	$	2,655		$	2,565		$	1,526		$	(3,605	)	$	1,534			(42	%)		143	%

Return on average common equity
from continuing operations		30.9	%		29.4	%		17.2	%		*			19.7	%
Return on average common equity		29.9	%		27.4	%		17.1	%		*			19.7	%
Pre-tax profit margin (2)		35	%		34	%		29	%		*			27	%
Compensation and benefits as a % of net revenues		48	%		48	%		45	%		*			49	%
Non-Compensation expenses as a % of net revenues		18	%		19	%		26	%		*			25	%
Effective Tax Rate		32.5	%		32.6	%		34.4	%		*			30.0	%

(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 % 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.

MORGAN STANLEY

Quarterly Consolidated Financial Information and Statistical Data

(unaudited)

	Quarter Ended															Percentage Change From:
	Feb 28, 2007			May 31, 2007			Aug 31, 2007			Nov 30, 2007			Feb 29, 2008			1Q08 vs. 1Q07			1Q08 vs. 4Q07
Morgan Stanley
Regional revenue (millions) (1) (2)
Americas	$	6,072		$	6,049		$	4,121		$	(4,092	)	$	3,823			(37	%)		193	%
EMEA (Europe, Middle East, Africa)		2,702			2,970			2,405			1,931			3,267			21	%		69	%
Asia		1,220			1,505			1,432			1,711			1,232			1	%		(28	%)
Consolidated net revenues	$	9,994		$	10,524		$	7,958		$	(450	)	$	8,322			(17	%)		*

Total assets (millions)	$	1,182,061		$	1,199,993		$	1,185,131		$	1,045,409		$	1,090,896			(8	%)		4	%
Adjusted assets (millions) (3)	$	653,875		$	704,421		$	688,966		$	565,585		$	636,892			(3	%)		13	%
Tangible shareholders' equity (millions)	$	38,577		$	40,253		$	36,674		$	32,074		$	39,840			3	%		24	%
Leverage Ratio (4)		30.6	x		29.8	x		32.3	x		32.6	x		27.4	x
Adjusted Leverage Ratio (5)		16.9	x		17.5	x		18.8	x		17.6	x		16.0	x
Shareholders' equity (millions) (6)	$	42,839		$	44,385		$	40,125		$	36,145		$	43,901			2	%		21	%
Common equity (millions)	$	36,854		$	38,411		$	34,150		$	30,169		$	32,180			(13	%)		7	%
Period end common shares outstanding (millions)		1,061.6			1,051.7			1,062.5			1,056.3			1,105.3			4	%		5	%
Book value per comon share (7)	$	34.71		$	36.52		$	32.14		$	28.56		$	29.11			(16	%)		2	%
Total capital (millions) (8)	$	177,270		$	187,250		$	187,480		$	191,085		$	198,210			12	%		4	%
Worldwide employees (1)		44,797			45,845			47,713			48,256			47,050			5	%		(2	%)

Average Daily 95%/One-Day Value-at-Risk ("VaR") (9)
Primary Market Risk Category ($ millions, pre-tax)
Interest rate and credit spread	$	39		$	40		$	52		$	53		$	59
Equity price	$	45		$	44		$	43		$	41		$	37
Foreign exchange rate	$	15		$	16		$	17		$	25		$	30
Commodity price	$	40		$	34		$	38		$	35		$	38

Trading VaR	$	90		$	81		$	87		$	89		$	97
Non - trading VaR	$	14		$	17		$	20		$	36		$	37
Aggregate trading and non - trading VaR	$	92		$	87		$	91		$	98		$	103

(1)	Restated to exclude Discover Financial Services.
(2)	Reflects the regional view of the Company’s consolidated net revenues, on a managed basis, based on the following methodology:
	Institutional Securities: invesment banking - client location, equity capital markets - client location, debt capital markets - revenue recording location, sales & trading desk location
	Global Wealth Management: financial advisor location
	Asset Management: client location except for the merchant banking business which is based on asset location.
(3)	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.
(4)	Leverage ratio equals total assets divided by tangible shareholders' equity.
(5)	Adjusted leverage ratio equals adjusted total assets divided by tangible shareholders' equity.
(6)	Includes common equity, preferred equity and junior subordinated debt issued to capital trusts.
(7)	Book value per common share equals common equity divided by period end common shares outstanding. The Company's spin-off of Discover Financial Services on June 30, 2007 reduced book value per common share by approximately $5.79.
(8)	Includes common equity, preferred equity, junior subordinated debt issued to capital trusts, capital units and the non-current portion of long-term debt.
(9)	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 2007.
Note:	Certain reclassifications have been made to prior period amounts to conform to the current presentation.
	Refer to Legal Notice page 16.

MORGAN STANLEY

Quarterly Consolidated Financial Information and Statistical Data

(unaudited)

	Quarter Ended
	Feb 29, 2008
	Average tier 1 equity (billions) (1)		Average common equity (billions) (1)		Return on average common equity
Institutional Securities	$	27.5	$	24.4		24%

Global Wealth Management Group		1.6		1.5		42%

Asset Management		3.2		3.8		*

Unallocated capital		1.5		1.5

Total - continuing operations		33.8		31.2		20%

Discontinued operations		0.0		0.0

Firm	$	33.8	$	31.2		20%


	Quarter Ended
	Feb 28, 2007						May 31, 2007						Aug 31, 2007						Nov 30, 2007
	Average tier 1 equity (billions) (1)		Average common equity (billions) (1)		Return on average common equity		Average tier 1 equity (billions) (1)		Average common equity (billions) (1)		Return on average common equity		Average tier 1 equity (billions) (1)		Average common equity (billions) (1)		Return on average common equity		Average tier 1 equity (billions) (1)			Average common equity (billions) (1)			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			*

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

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

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

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

Discontinued operations		4.6		5.7				4.5		5.4				1.6		1.9				0.0			0.0

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

(1)	The Company’s economic capital framework estimates the amount of equity capital required to support the businesses over a wide range of market environments while simultaneously
	satisfying regulatory, rating agency and investor requirements. Economic capital is assigned to each segment based on regulatory capital usage plus additional capital for stress losses.
	Economic capital requirements are met by regulatory Tier 1 equity (including common shareholders' equity, certain preferred stock, eligible hybrid capital instruments and deductions of
	certain goodwill, intangible assets and net deferred tax assets), subject to regulatory limits. The framework will evolve over time in response to changes in the business and regulatory
	environment and to incorporate improvements in modeling techniques.
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.

MORGAN STANLEY

Quarterly Institutional Securities Income Statement Information

(unaudited, dollars in millions)

	Quarter Ended															Percentage Change From:
	Feb 28, 2007 (1)			May 31, 2007 (1)			Aug 31, 2007 (1)			Nov 30, 2007 (1)			Feb 29, 2008 (1)			1Q08 vs. 1Q07			1Q08 vs. 4Q07

Investment banking	$	1,032		$	1,704		$	1,439		$	1,363		$	980			(5	%)		(28	%)
Principal transactions:
Trading		4,029			4,705			1,236			(7,230	)		3,394			(16	%)		147	%
Investments		350			396			217			496			(141	)		(140	%)		(128	%)
Commissions		691			766			911			894			840			22	%		(6	%)
Asset management, distribution and admin. fees		25			25			24			29			31			24	%		7	%
Interest and dividends		14,021			15,193			14,141			15,776			13,660			(3	%)		(13	%)
Other		205			266			222			290			209			2	%		(28	%)
Total revenues		20,353			23,055			18,190			11,618			18,973			(7	%)		63	%
Interest expense		13,191			15,626			13,207			15,043			12,760			(3	%)		(15	%)
Net revenues		7,162			7,429			4,983			(3,425	)		6,213			(13	%)		*

Total non-interest expenses		4,317			4,479			3,482			3,054			4,096			(5	%)		34	%

Income / (loss) from continuing operations before gain /
(loss) from unconsolidated investees and taxes		2,845			2,950			1,501			(6,479	)		2,117			(26	%)		133	%
Gain / (loss) from unconsolidated investees		(26	)		(20	)		(19	)		18			2			108	%		(89	%)
Income / (loss) before taxes		2,819			2,930			1,482			(6,461	)		2,119			(25	%)		133	%
Provision / (benefit) for income taxes		878			932			483			(2,463	)		627			(29	%)		125	%
Income / (loss) from continuing operations (2)	$	1,941		$	1,998		$	999		$	(3,998	)	$	1,492			(23	%)		137	%

Return on average common equity (3)		38	%		35	%		16	%		*			24	%
Pre-tax profit margin (4)		40	%		40	%		30	%		*			34	%

(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, Nov 30, 2007 and Feb 29, 2008 are $4.4 billion, $5.9 billion, $8.2 billion, $9.7 billion, and $10.3 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.

MORGAN STANLEY

Quarterly Financial Information and Statistical Data

Institutional Securities

(unaudited, dollars in millions)

	Quarter Ended															Percentage Change From:
	Feb 28, 2007			May 31, 2007			Aug 31, 2007			Nov 30, 2007			Feb 29, 2008			1Q08 vs. 1Q07			1Q08 vs. 4Q07

Investment Banking
Advisory revenue	$	373		$	725		$	664		$	779		$	444			19	%		(43	%)
Underwriting revenue
Equity		300			493			429			348			261			(13	%)		(25	%)
Fixed Income		359			486			346			236			275			(23	%)		17	%)
Total underwriting revenue	$	659		$	979		$	775		$	584		$	536			(19	%)		(8	%)

Total investment banking revenue	$	1,032		$	1,704		$	1,439		$	1,363		$	980			(5	%)		(28	%)

Sales & Trading (1)
Equity	$	2,209		$	2,216		$	1,761		$	2,472		$	3,329			51	%		35	%
Fixed income		3,430			2,896			2,197			(7,873	)		2,907			(15	%)		137	%
Other		(89	)		(74	)		(877	)		(202	)		(1,102	)		*			*
Total sales & trading net revenue	$	5,550		$	5,038		$	3,081		$	(5,603	)	$	5,134			(7	%)		192	%


		Fiscal View																				Calendar View
		Quarter Ended (2)																				Two Months Ended (2)
		Feb 28, 2007			May 31, 2007			Aug 31, 2007			Nov 30, 2007			Feb 29, 2008								Feb 28, 2007			Feb 29, 2008
Mergers and acquisitions announced transactions
Morgan Stanley global market volume (billions)	$	329.9		$	485.7		$	277.4		$	295.2		$	134.9								$	226.9		$	88.1
Market share		36.1	%		36.9	%		23.9	%		34.4	%		19.3	%								40.5	%		23.5	%
Rank		2			1			2			5			2									1			2

Mergers and acquisitions completed transactions
Morgan Stanley global market volume (billions)	$	209.2		$	359.8		$	248.5		$	497.0		$	151.6								$	153.6		$	103.4
Market share		23.0	%		39.3	%		26.1	%		45.3	%		25.5	%								30.0	%		27.6	%
Rank		3			1			2			2			4									2			4

Global equity and related issues
Morgan Stanley global market volume (billions)	$	13.9		$	20.2		$	18.3		$	14.9		$	7.8								$	6.0		$	2.6
Market share		7.5	%		8.4	%		8.2	%		6.3	%		5.5	%								5.6	%		3.9	%
Rank		4			3			4			6			5									8			10

Global IPO's
Morgan Stanley global market volume (billions)	$	4.1		$	6.4		$	6.5		$	6.9		$	3.0								$	1.8		$	0.5
Market Share		7.6	%		8.0	%		8.2	%		7.0	%		7.4	%								7.1	%		3.7	%
Rank		3			3			3			5			3									5			8

Global debt
Morgan Stanley global market volume (billions)	$	102.0		$	141.3		$	87.8		$	67.6		$	58.6								$	71.3		$	45.1
Market share		5.6	%		6.5	%		5.2	%		5.1	%		5.3	%								5.5	%		5.3	%
Rank		6			5			8			6			6									6			5

(1)	Includes principal transactions trading, commissions and net interest revenue.
	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 March 5, 2008.
Note:	Certain reclassifications have been made to prior period amounts to conform to the current presentation.
	Refer to Legal Notice page 16.

MORGAN STANLEY

Quarterly Financial Information and Statistical Data

Institutional Securities - Corporate Lending (1)

(unaudited, dollars in billions)

	Quarter Ended															Percentage Change From:
	Feb 28, 2007			May 31, 2007			Aug 31, 2007			Nov 30, 2007			Feb 29, 2008			1Q08 vs. 1Q07			1Q08 vs. 4Q07


Corporate funded loans
Investment grade	$	6.2		$	13.7		$	11.1		$	13.0		$	15.6			152	%		20	%
Non-investment grade		3.9			4.9			7.5			10.9			10.7			174	%		(2	%)
Total corporate funded loans	$	10.1		$	18.6		$	18.6		$	23.9		$	26.3			160	%		10	%

Corporate lending commitments
Investment grade	$	31.5		$	42.1		$	50.4		$	50.2		$	44.2			40	%		(12	%)
Non-investment grade		25.5			32.4			35.7			20.0			15.3			(40	%)		(24	%)
Total corporate lending commitments	$	57.0		$	74.5		$	86.1		$	70.2		$	59.5			4	%		(15	%)

Corporate funded loans plus lending commitments
Investment grade	$	37.7		$	55.8		$	61.5		$	63.2		$	59.8			59	%		(5	%)
Non-investment grade(2)	$	29.4		$	37.3		$	43.2		$	30.9		$	26.0			(12	%)		(16	%)
% investment grade		56	%		60	%		59	%		67	%		70	%
% non-investment grade		44	%		40	%		41	%		33	%		30	%

Total corporate funded loans and lending commitments	$	67.1		$	93.1		$	104.7		$	94.1		$	85.8			28	%		(9	%)
Hedges (3)	$	29.9		$	34.2		$	37.5		$	37.6		$	40.6			36	%		8	%
Total corporate funded loans and lending commitments net of hedges	$	37.2		$	58.9		$	67.2		$	56.5		$	45.2			22	%		(20	%)

(1)	In connection with certain of its Institutional Securities business activities, the Company provides loans or lending commitments to select clients related to its leveraged acquisition finance
	or relationship lending activities. For a further discussion of this activity, see the Company's Form 10-K for the fiscal year ended November 30, 2007.
(2)	For the quarters ended November 30, 2007, and February 29, 2008, the leveraged aquisition finance portfolio of pipeline commitments and closed deals was $19.6 billion and $15.9 billion, respectively.
(3)	Includes 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.

MORGAN STANLEY

Quarterly Global Wealth Management Group Income Statement Information

(unaudited, dollars in millions)

	Quarter Ended															Percentage Change From:
	Feb 28, 2007			May 31, 2007			Aug 31, 2007			Nov 30, 2007			Feb 29, 2008			1Q08 vs. 1Q07			1Q08 vs. 4Q07
Investment banking	$	166		$	164		$	166		$	129		$	104			(37	%)		(19	%)
Principal transactions:
Trading		129			133			145			191			177			37	%		(7	%)
Investments		(2	)		20			3			8			(4	)		(100	%)		(150	%)
Commissions		315			357			353			408			363			15	%		(11	%)
Asset management, distribution and admin fees		729			769			788			781			716			(2	%)		(8	%)
Interest and dividends		274			298			321			328			302			10	%		(8	%)
Other		38			40			33			52			39			3	%		(25	%)
Total revenues		1,649			1,781			1,809			1,897			1,697			3	%		(11	%)
Interest expense		138			139			126			108			91			(34	%)		(16	%)
Net revenues		1,511			1,642			1,683			1,789			1,606			6	%		(10	%)

Total non-interest expenses		1,285			1,378			1,396			1,411			1,352			5	%		(4	%)
Income before taxes		226			264			287			378			254			12	%		(33	%)
Provision for income taxes		87			102			119			151			95			9	%		(37	%)
Income from continuing operations	$	139		$	162		$	168		$	227		$	159			14	%		(30	%)

Return on average common equity (1)		32	%		40	%		39	%		52	%		42	%
Pre-tax profit margin (2)		15	%		16	%		17	%		21	%		16	%

(1)	Refer to page 4 for the allocation of average common equity.
(2)	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.

MORGAN STANLEY

Quarterly Financial Information and Statistical Data

Global Wealth Management Group

(unaudited)

	Quarter Ended															Percentage Change From:
	Feb 28, 2007			May 31, 2007			Aug 31, 2007			Nov 30, 2007			Feb 29, 2008			1Q08 vs. 1Q07			1Q08 vs. 4Q07


Global representatives		7,993			8,137			8,341			8,429			8,456			6	%		--

Annualized revenue per global
representative (thousands) (1)	$	758		$	814		$	817		$	853		$	761			--			(11	%)

Assets by client segment (billions)
$10m or more		210			223			228			247			229			9	%		(7	%)
$1m - $10m		248			268			265			275			262			6	%		(5	%)
Subtotal - > $1m		458			491			493			522			491			7	%		(6	%)
$100k - $1m		174			180			182			179			175			1	%		(2	%)
< $100k		26			24			24			23			23			(12	%)		--
Client assets excluding corporate / other		658			695			699			724			689			5	%		(5	%)
Corporate / other		32			33			35			34			33			3	%		(3	%)
Total client assets (billions)	$	690		$	728		$	734		$	758		$	722			5	%		(5	%)

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

Fee-based client account assets (billions) (3)	$	202		$	210		$	211		$	201		$	185			(8	%)		(8	%)
Fee-based assets as a % of client assets		29	%		29	%		29	%		27	%		26	%


Bank deposit program (millions)	$	16,364		$	18,226		$	19,409		$	26,160		$	33,365			104	%		28	%

Client assets per global
representative (millions) (4)	$	86		$	89		$	88		$	90		$	85			(1	%)		(6	%)

Domestic retail net new assets (billions) (5)	$	6.7		$	8.7		$	14.6		$	10.0		$	11.4			70	%		14	%

Domestic retail locations		451			453			455			451			447			(1	%)		(1	%)

(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.

MORGAN STANLEY

Quarterly Asset Management Income Statement Information

(unaudited, dollars in millions)

	Quarter Ended															Percentage Change From:
	Feb 28, 2007 (1)			May 31, 2007 (1)			Aug 31, 2007 (1)			Nov 30, 2007 (1)			Feb 29, 2008 (1)			1Q08 vs. 1Q07		1Q08 vs. 4Q07
Investment banking	$	31		$	61		$	92		$	80		$	26			(16%)		(68%)
Principal transactions:
Trading (2)		0			0			0			(129	)		(179	)		*		(39%)
Investments		532			588			338			316			(201	)		(138%)		(164%)
Commissions		6			6			6			5			4			(33%)		(20%)
Asset management, distribution and admin fees		768			844			926			986			845			10%		(14%)
Interest and dividends		14			29			14			17			15			7%		(12%)
Other		34			18			10			13			71			109%		*
Total revenues		1,385			1,546			1,386			1,288			581			(58%)		(55%)
Interest expense		17			37			22			36			38			124%		6%
Net revenues		1,368			1,509			1,364			1,252			543			(60%)		(57%)

Total non-interest expenses		989			1,206			873			958			704			(29%)		(27%)
Income / (loss) before taxes		379			303			491			294			(161	)		(142%)		(155%)
Provision / (benefit) for income taxes		149			105			174			113			(58	)		(139%)		(151%)
Income / (loss) from continuing operations	$	230		$	198		$	317		$	181		$	(103	)		(145%)		(157%)

Return on average common equity (3)		31	%		23	%		35	%		18	%		*
Pre-tax profit margin (4)		28	%		20	%		36	%		24	%		*

(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, Nov 30, 2007 and Feb 29, 2008 are $2.9 billion,
	$3.9 billion, $4.6 billion, $4.5 billion and $4.4 billion, respectively.
(2)	Trading results for the quarters ended November 30, 2007 and February 29, 2008 include losses related to securities issued by structured investment vehicles.
(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.

MORGAN STANLEY

Quarterly Financial Information and Statistical Data

Asset Management

(unaudited, dollars in billions)

	Quarter Ended															Percentage Change From:
	Feb 28, 2007			May 31, 2007			Aug 31, 2007			Nov 30, 2007			Feb 29, 2008			1Q08 vs. 1Q07			1Q08 vs. 4Q07

Assets under management or supervision

Net flows by distribution channel
Americas Retail Morgan Stanley Brand	$	(2.0	)	$	0.1		$	(0.8	)	$	(1.6	)	$	(1.7	)		15	%		(6	%)
Americas Retail Van Kampen Brand		0.0			0.0			1.1			(1.4	)		(2.8	)		*			(100	%)
Americas Intermediary		1.0			1.8			1.2			0.4			0.7			(30	%)		75	%
U.S. Institutional		0.1			1.3			0.3			0.8			0.6			*			(25	%)
Non - U. S.		4.7			4.1			6.1			7.4			0.4			(91	%)		(95	%)
Net flows excluding money markets	$	3.8		$	7.3		$	7.9		$	5.6		$	(2.8	)		(174	%)		(150	%)
Money Market Net Flows
Institutional		2.5			3.5			12.4			(2.9	)		7.8			*			*
Retail		(1.8	)		(1.5	)		0.5			(2.3	)		1.6			189	%		170	%
Total money market net flows	$	0.7		$	2.0		$	12.9		$	(5.2	)	$	9.4			*			*
Total net flows	$	4.5		$	9.3		$	20.8		$	0.4		$	6.6			47	%		*


Assets under management or supervision by distribution channel
Americas Retail Morgan Stanley Brand	$	62		$	67		$	63		$	64		$	58			(6	%)		(9	%)
Americas Retail Van Kampen Brand		96			102			99			99			88			(8	%)		(11	%)
Americas Intermediary		61			67			66			68			64			5	%		(6	%)
U.S. Institutional		110			119			122			128			123			12	%		(4	%)
Non - U..S.		102			111			118			132			128			25	%		(3	%)
Total long term assets under management or supervision		431			466			468			491			461			7	%		(6	%)
Institutional money markets/liquidity		52			57			70			68			76			46	%		12	%
Retail money markets		33			32			33			31			33			--			6	%
Total Money Markets		85			89			103			99			109			28	%		10	%
Total assets under management or supervision	$	516		$	555		$	571		$	590		$	570			10	%		(3	%)
Share of minority interest assets (1)		5			5			6			7			7			40	%		--
Total	$	521		$	560		$	577		$	597		$	577			11	%		(3	%)


Assets under management or supervision by asset class
Equity	$	245		$	265		$	254		$	265		$	235			(4	%)		(11	%)
Fixed income		94			98			98			102			101			7	%		(1	%)
Money market		85			89			103			99			109			28	%		10	%
Alternatives (2)		77			87			101			109			111			44	%		2	%
Subtotal		501			539			556			575			556			11	%		(3	%)
Unit trusts		15			16			15			15			14			(7	%)		(7	%)
Total assets under management or supervision	$	516		$	555		$	571		$	590		$	570			10	%		(3	%)
Share of minority interest assets (1)		5			5			6			7			7			40	%		--
Total	$	521		$	560		$	577		$	597		$	577			11	%		(3	%)

(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.

MORGAN STANLEY

Quarterly Financial Information and Statistical Data

Consolidated Assets Under Management or Supervision

(unaudited, dollars in billions)

	Quarter Ended										Percentage Change From:
	Feb 28, 2007		May 31, 2007		Aug 31, 2007		Nov 30, 2007		Feb 29, 2008		1Q08 vs. 1Q07			1Q08 vs. 4Q07



Assets under management or supervision by distribution channel
Americas Retail Morgan Stanley Brand	$	62	$	67	$	63	$	64	$	58		(6	%)		(9	%)
Americas Retail Van Kampen Brand		96		102		99		99		88		(8	%)		(11	%)
Americas Intermediary		61		67		66		68		64		5	%		(6	%)
U.S. Institutional		110		119		122		128		123		12	%		(4	%)
Non - U.S.		102		111		118		132		128		25	%		(3	%)
Total long term assets under management or supervision		431		466		468		491		461		7	%		(6	%)
Institutional money markets/liquidity		52		57		70		68		76		46	%		12	%
Retail money markets		33		32		33		31		33		--			6	%
Total Money Markets		85		89		103		99		109		28	%		10	%
Sub-total assets under management or supervision		516		555		571		590		570		10	%		(3	%)

Global Wealth Management Group		153		157		162		185		172		12	%		(7	%)
Total assets under management or supervision	$	669	$	712	$	733	$	775	$	742		11	%		(4	%)
Share of minority interest assets (1)		5		5		6		7		7		40	%		--
Total	$	674	$	717	$	739	$	782	$	749		11	%		(4	%)


Consolidated assets under management or supervision by asset class
Equity	$	317	$	344	$	333	$	355	$	317		--			(11	%)
Fixed income		111		116		118		127		124		12	%		(2	%)
Money market		90		94		109		108		117		30	%		8	%
Alternatives (2)		77		87		101		109		111		44	%		2	%
Subtotal		595		641		661		699		669		12	%		(4	%)
Unit trusts		15		16		15		15		14		(7	%)		(7	%)
Other (3)		59		55		57		61		59		--			(3	%)
Total assets under management or supervision	$	669	$	712	$	733	$	775	$	742		11	%		(4	%)
Share of minority interest assets (1)		5		5		6		7		7		40	%		--
Total	$	674	$	717	$	739	$	782	$	749		11	%		(4	%)

(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.

MORGAN STANLEY

Quarterly Intersegment Eliminations Income Statement Information

(unaudited, dollars in millions)

	Quarter Ended															Percentage Change From:
	Feb 28, 2007			May 31, 2007			Aug 31, 2007			Nov 30, 2007			Feb 29, 2008			1Q08 vs. 1Q07			1Q08 vs. 4Q07

Investment banking (1)	$	(2	)	$	(16	)	$	(38	)	$	(3	)	$	(1	)		50	%		67	%
Principal transactions:
Trading		0			0			0			(3	)		(2	)		*			33	%
Investments		0			0			0			0			0			--			--
Commissions		(7	)		(6	)		(6	)		(17	)		(8	)		(14	%)		53	%
Asset management, distribution and admin. fees		(43	)		(42	)		(37	)		(53	)		(42	)		2	%		21	%
Interest and dividends		(138	)		(120	)		(71	)		(14	)		(12	)		91	%		14	%
Other		(5	)		(3	)		(3	)		(2	)		(2	)		60	%		--
Total revenues		(195	)		(187	)		(155	)		(92	)		(67	)		66	%		27	%
Interest expense		(148	)		(131	)		(83	)		(26	)		(27	)		82	%		(4	%)
Net revenues		(47	)		(56	)		(72	)		(66	)		(40	)		15	%		39	%

Total non-interest expenses		(53	)		(63	)		(58	)		(69	)		(44	)		17	%		36	%

Income before taxes		6			7			(14	)		3			4			(33	%)		33	%
Provision for income taxes		2			2			(4	)		1			1			(50	%)		--
Income from continuing operations	$	4		$	5		$	(10	)	$	2		$	3			(25	%)		50	%

(1)	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.

MORGAN STANLEY

The following (page 14) 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. 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, 2007			May 31, 2007			Aug 31, 2007			Nov 30, 2007			Feb 29, 2008

Total assets		$	1,182,061		$	1,199,993		$	1,185,131		$	1,045,409		$	1,090.896

Less:	Securities purchased under agreements to resell		(193,162	)		(144,051	)		(176,910	)		(126,887	)		(143,097	)
	Securities borrowed		(277,093	)		(252,213	)		(257,032	)		(239,994	)		(243,695	)
Add:	Financial instruments sold, not yet purchased		157,807			166,549			176,097			134,341			171,111
Less:	Derivative contracts sold, not yet purchased		(51,574	)		(58,919	)		(62,088	)		(71,604	)		(89,392	)
	Subtotal		818,039			911,359			865,198			741,265			785,823
Less:	Cash and securities deposited with clearing
	organizations or segregated under federal and
	other regulations or requirements (1)		(35,739	)		(47,114	)		(43,229	)		(61,608	)		(60,964	)
	Assets recorded under certain provisions of SFAS No.140 and FIN 46		(124,163	)		(155,692	)		(129,552	)		(110,001	)		(83,906	)
	Goodwill and intangible assets		(4,262	)		(4,132	)		(3,451	)		(4,071	)		(4,061	)

Adjusted assets		$	653,875		$	704,421		$	688,966		$	565,585		$	636,892

Common equity		$	36,854		$	38,411		$	34,150		$	30,169		$	32,180
Preferred equity			1,100			1,100			1,100			1,100			1,100
Shareholders' equity			37,954			39,511			35,250			31,269			33,280
Junior subordinated debt issued to capital trusts (2)(3)			4,885			4,874			4,875			4,876			10,621
	Subtotal		42,839			44,385			40,125			36,145			43,901
Less: Goodwill and intangible assets			(4,262	)		(4,132	)		(3,451	)		(4,071	)		(4,061	)
Tangible shareholders' equity		$	38,577		$	40,253		$	36,674		$	32,074		$	39,840

Leverage ratio (4)			30.6	x		29.8	x		32.3	x		32.6	x		27.4	x

Adjusted leverage ratio (5)			16.9	x		17.5	x		18.8	x		17.6	x		16.0	x

(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)	During the quarter ended February 29, 2008, the Company issued $5,579 million of junior subordinated debt securities related to China Investment Corporation’s investment
	in the Company in December 2007. For a further discussion of this investment, see the Company’s Form 10-K for fiscal 2007.
(4)	Leverage ratio equals total assets divided by tangible shareholders' equity.
(5)	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.

This page represents an addendum to the 1Q 2008 Financial Supplement.

MORGAN STANLEY

Institutional Securities - U.S. Subprime Analysis

(unaudited, dollars in billions)

							Profit / (Loss)
	Statement of Financial Condition						Twelve Months Ended			Three Months Ended			Net Exposure (1)
	11/30/2007			2/29/2008			11/30/2007			2/29/2008			11/30/2007			2/29/2008

Super Senior Exposure
High- Grade	$	-		$	-		$	-		$	-		$	-		$	-
Mezzanine		(8.7	)		(8.5	)		(9.3	)		(0.5	)		3.9			2.8
CDO-Squared		(0.1	)		-			(0.1	)		-			0.1			-
Total ABS CDO Super Senior Exposure	$	(8.8	)	$	(8.5	)	$	(9.4	)	$	(0.5	)	$	4.0		$	2.8

Other Retained and Warehouse Exposure
ABS CDO CDS	$	2.7		$	2.4		$	2.3		$	0.5		$	(1.5	)	$	(1.0	)
ABS CDO Bonds		1.1			0.8			(0.8	)		(0.2	)		1.1			0.8
CDO Warehouse		-			-			-			-			-			-
Total Other Retained and Warehouse Exposure		3.8			3.2			1.5			0.3			(0.4	)		(0.2	)
Subtotal ABS CDO Related Exposure (2)	$	(5.0	)	$	(5.3	)	$	(7.9	)	$	(0.2	)	$	3.6		$	2.6

U.S. Subprime Mortgage Related Exposure
Loans	$	0.6		$	0.5		$	(0.2	)	$	-		$	0.6		$	0.5
Total Rate of Return Swaps		-			-			0.1			-			-			0.1
ABS Bonds		2.7			1.9			(3.8	)		(0.4	)		2.7			1.9
ABS CDS		7.8			10.5			5.0			0.6			(5.1	)		(3.3	)
Subtotal U.S. Subprime Mortgage Related Exposure (3)	$	11.1		$	12.9		$	1.1		$	0.2		$	(1.8	)	$	(0.8	)
Total ABS CDO / Subprime Net Exposure (4)	$	6.1		$	7.6		$	(6.8	)	$	-		$	1.8		$	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 - 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 18% - 26% implied by the ABX indices. These cumulative loss levels, at a severity rate of 55%,
	imply defaults in the range of 52% - 61% 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. These balances are presented on a gross basis in the Company's statement of financial condition.

	On February 29, 2008, 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 $4.7 at February 29, 2008. For the quarter ended
	February 29, 2008, these securities were marked down $0.2 billion. An 'other than temporary' impairment charge of $0.4 billion was reflected in net loss for the year ended November 30, 2007. At November 30, 2007,
	the securities in the Subsidiary Banks' portfolio were classified 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

Legal Notice

This Financial Supplement contains financial, statistical and business-related information, as well as business and segment trends.

The information should be read in conjunction with the Company's first quarter earnings press release issued March 19, 2008.

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MORGAN STANLEY
Financial Supplement - 1Q 2008
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