8-K

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): April 19, 2012

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 April 19, 2012, Morgan Stanley (the "Registrant") released financial information with respect to its quarter ended March 31, 2012. 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 quarter ended March 31, 2012 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 April 19, 2012, containing financial information for the quarter ended March 31, 2012.

99.2 Financial Data Supplement of the Registrant for the quarter ended March 31, 2012.

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

Deputy Chief Financial Officer and Controller

Dated: April 19, 2012

EX-99.1

Exhibit 99.1

Media Relations:  Jeanmarie McFadden   212-761-2433 Investor Relations:  Celeste Mellet Brown   212-761-3896

Morgan Stanley Reports First Quarter 2012:

● Net Revenues of $6.9 Billion Included the Negative Impact of $2.0 Billion from the Tightening of Morgan Stanley’s Debt-Related Credit Spreads (DVA);1 Loss from Continuing Operations of $0.05 per Diluted Share

● Excluding DVA, Net Revenues were $8.9 Billion and Income from Continuing Operations was $0.71 per Diluted Share2, 3

● Broad Based Strength Across Products and Geographic Regions in Fixed Income & Commodities and Equity Sales and Trading; Ranked #1 in Global IPOs, #2 in Global Announced and Completed M&A; Global Fee Based Asset Flows of $8.7 Billion in Global Wealth Management; Solid Results in Asset Management

NEW YORK, April 19, 2012 – Morgan Stanley (NYSE: MS) today reported net revenues of $6.9 billion for the first quarter ended March 31, 2012 compared with $7.6 billion a year ago.  For the current quarter, the loss from continuing operations applicable to Morgan Stanley was $78 million, or a loss of $0.05 per diluted share4 compared with income of $984 million, or $0.51 per diluted share, for the same period a year ago.

Results for the quarter included negative revenue of $2.0 billion compared with negative revenue of $189 million a year ago related to changes in Morgan Stanley’s debt-related credit spreads and other credit factors (Debt Valuation Adjustment, DVA).1

Excluding DVA, net revenues for the current quarter were $8.9 billion compared with $7.8 billion a year ago and income from continuing operations applicable to Morgan Stanley was $1.4 billion, or $0.71 per diluted share, compared with $1.1 billion, or $0.59 a year ago.2, 5

Compensation expense was $4.4 billion, which included severance expense of $138 million related to staff reductions,6 compared with $4.3 billion a year ago.  Non-compensation expenses of $2.3 billion decreased from $2.4 billion a year ago.

For the current quarter, the net loss applicable to Morgan Stanley, including discontinued operations, was $0.06 per diluted share, compared with net income of $0.50 per diluted share in the first quarter of 2011.7

1

Summary of Firm Results (dollars in millions)
	As Reported		Excluding DVA (2), (3)
	Net	MS Earnings	Net	MS Earnings
	Revenues	Cont.Ops (1)	Revenues	Cont.Ops (1)
1Q 2012	$6,935	($103)	$8,913	$1,344
4Q 2011	$5,678	($254)	$5,462	($381)
1Q 2011	$7,574	$752	$7,763	$866

(1) Represents earnings / (loss) from continuing operations applicable to Morgan Stanley common shareholders.

(2) Net revenues for 1Q 2012, 4Q 2011 and 1Q 2011 exclude positive (negative) revenue from DVA of ($1,978) million, $216 million and ($189) million, respectively.

(3) Earnings / (loss) from continuing operations applicable to Morgan Stanley common shareholders for 1Q 2012, 4Q 2011 and 1Q 2011 excludes after-tax DVA impact of ($1,454) million, $127 million and ($116) million, respectively and includes a related allocation of earnings to Participating Restricted Stock Units of $7 million and $2 million for 1Q 2012 and 1Q 2011, respectively.

Business Highlights

● Sales and trading net revenues were $2.2 billion, or $4.1 billion excluding DVA.8  Fixed Income and Commodities sales and trading net revenues reflected balanced strength across businesses and regions with solid levels of customer activity and an improved credit environment.  Equity sales and trading net revenues reflected strong performance despite challenging markets.

● Investment Banking revenues were $851 million.  The Firm ranked #1 in global IPOs and #2 in global announced and completed M&A.9

● Global Wealth Management Group delivered net revenues of $3.4 billion, with global fee based asset flows of $8.7 billion.

● Asset Management reported net revenues of $533 million and assets under management or supervision of $304 billion.

James P. Gorman, Chairman and Chief Executive Officer, said, "This quarter is further evidence that Morgan Stanley has rebounded from the financial crisis of 2008 and is in a significantly stronger position.  Revenues of $8.9 billion, excluding the impact of DVA, were higher on both a year-over-year and a quarter-over-quarter basis.  Of particular note was the strength in sales and trading, which showed broad-based gains across products and regions.  In addition, our global alliance with MUFG continues to strengthen, with improving operating performance in our securities joint venture in Japan and continued loan growth in the U.S.  On the near horizon, we are intensely focused on completing the transition of Morgan Stanley Smith Barney to the new, state-of-the-art technology platform this summer, as well as maintaining a conservative capital and liquidity profile as we navigate global markets."

2

Summary of Institutional Securities Results (dollars in millions)
	As Reported		Excluding DVA (1)
	Net	Pre-Tax	Net	Pre-Tax
	Revenues	Income	Revenues	Income
1Q 2012	$3,023	($312)	$5,001	$1,666
4Q 2011	$2,071	($778)	$1,855	($994)
1Q 2011	$3,568	$432	$3,757	$621

(1) Net revenues for 1Q 2012, 4Q 2011 and 1Q 2011 exclude positive (negative) revenue from DVA of ($1,978) million, $216 million and ($189) million, respectively.

INSTITUTIONAL SECURITIES

Institutional Securities reported a pre-tax loss from continuing operations of $312 million compared with pre-tax income of $432 million in the first quarter of last year.  Net revenues for the current quarter were $3.0 billion compared with $3.6 billion a year ago.  DVA resulted in negative revenue of $2.0 billion in the current quarter compared with negative revenue of $189 million a year ago.  Excluding DVA, net revenues for the current quarter were $5.0 billion compared with $3.8 billion a year ago.  Due to the impact of DVA in the comparative periods, the following discussion for sales and trading excludes DVA.

● Advisory and equity underwriting revenues declined from a year ago on lower levels of market activity.  Fixed income underwriting revenues increased from a year ago reflecting growth in investment grade, high yield bond and loan fees.

● Fixed income and commodities sales and trading net revenues of $2.6 billion increased 34% from a year ago, reflecting increased contributions from most products, with particular strength in interest rates, commodities and corporate credit.8

● Equity sales and trading net revenues of $1.8 billion increased 6% from the prior year reflecting solid performance across all regions with notable growth in electronic and retail volumes.8

● Other sales and trading net losses were $286 million compared with losses of $460 million in the prior year.  Results for the current quarter primarily reflected losses on economic hedges related to the Firm’s long-term debt and costs related to the amount of liquidity held.

● Other revenues were $58 million compared with negative revenues of $602 million in the first quarter of last year.  Results for the prior year quarter included a loss of $655 million arising from the Firm’s 40% stake in a Japanese securities joint venture (Mitsubishi UFJ Morgan Stanley Securities Co., Ltd. or MUMSS) controlled and managed by our partner, Mitsubishi UFJ Financial Group, Inc.

● Compensation expense for the current quarter6 was $2.1 billion.  The reported compensation to net revenue ratio was 70%; excluding DVA, this ratio was 42%.10  Non-compensation expenses of $1.2 billion were essentially unchanged from a year ago.

● Morgan Stanley’s average trading Value-at-Risk measured at the 95% confidence level was $84 million compared with $123 million in the fourth quarter of 2011.

3

Summary of Global Wealth Management Group Results (dollars in millions)
	Net	Pre-Tax
	Revenues	Income
1Q 2012	$3,414	$387
4Q 2011	$3,219	$238
1Q 2011	$3,404	$344

GLOBAL WEALTH MANAGEMENT GROUP

Global Wealth Management Group reported pre-tax income from continuing operations of $387 million compared with $344 million in the first quarter of last year.  The quarter’s pre-tax margin was 11%.11  Income after the noncontrolling interest allocation to Citigroup Inc. and before taxes was $313 million.12

● Net revenues of $3.4 billion were essentially unchanged from a year ago as higher asset management and net interest revenues were mostly offset by lower commissions.

● Compensation expense for the current quarter6 was $2.1 billion with a compensation to net revenue ratio of 62%.  Non-compensation expenses were $922 million compared with $951 million a year ago.

● Total client assets were $1.7 trillion at quarter end.  Client assets in fee-based accounts were $531 billion, or 30% of total client assets.  Global fee based asset flows for the quarter were $8.7 billion.

● The 17,193 global representatives at quarter end achieved average annualized revenue per global representative of $787,000.  Total client assets per global representative were $101 million.

Summary of Asset Management Results (dollars in millions)
	Net	Pre-Tax
	Revenues	Income
1Q 2012	$533	$128
4Q 2011	$424	$78
1Q 2011	$622	$125

ASSET MANAGEMENT

Asset Management reported pre-tax income from continuing operations of $128 million compared with $125 million in last year’s first quarter.13  The quarter’s pre-tax margin was 24%.11  Income after the noncontrolling interest allocation and before taxes was $63 million.

● Net revenues were $533 million compared with $622 million a year ago primarily reflecting lower gains on principal investments in the Merchant Banking business.14

● Compensation expense for the current quarter6 was $218 million with a compensation to net revenue ratio of 41%.  Non-compensation expenses of $187 million decreased from $244 million a year ago.

● Assets under management or supervision at March 31, 2012 of $304 billion increased from $276 billion a year ago.  The increase primarily reflected net customer inflows in Morgan Stanley’s liquidity funds.

4

CAPITAL

Morgan Stanley’s Tier 1 capital ratio, under Basel I, was approximately 16.8% and Tier 1 common ratio was approximately 13.2% at March 31, 2012.15

At March 31, 2012, book value and tangible book value per common share were $30.74 and $27.37,16 respectively, based on approximately 2.0 billion shares outstanding.

The annualized return on average common equity from continuing operations, excluding DVA, for the current quarter was 9.2%.17

OTHER MATTERS

The effective tax rate from continuing operations for the current quarter was 26.5% compared with 27.8% in the prior year first quarter.18

The Firm declared a $0.05 quarterly dividend per common share.  The dividend is payable on May 15, 2012 to common shareholders of record on April 30, 2012.

During the current quarter, the Firm announced that it reached an agreement to sell Quilter Holdings Ltd., its stand-alone UK mass-affluent business.  This transaction, and the first phase of the previously announced disposition of Saxon, closed on April 2, 2012.

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 1,300 offices in 43 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 "Supervision and Regulation" in Part I, Item 1, "Risk Factors" in Part I, Item 1A, "Legal Proceedings" in Part I, Item 3, "Management’s Discussion and Analysis 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, each of the Company's Annual Report on Form 10-­K for the year ended December 31, 2011 and other items throughout the Form 10-K, and the Company’s Current Reports on Form 8-K, including any amendments thereto.

5

1 Represents the change in the fair value of certain of Morgan Stanley’s long-term and short-term borrowings resulting from fluctuations in its credit spreads and other credit factors (commonly referred to as “DVA”).

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

	1Q12		1Q11
Income (loss) per diluted share applicable to MS – Non-GAAP	$0.71		$0.59
DVA impact - 1Q12 DVA of ($1,978), net of tax benefit of $524	$(0.76	)	$(0.08	)
Income (loss) per diluted share applicable to MS – GAAP	$(0.05	)	$0.51
Average diluted shares – Non-GAAP	1,903		1,472
DVA impact	(26	)	0
Average diluted shares – GAAP	1,877		1,472

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

4 Includes preferred dividends and other adjustments related to the calculation of earnings per share of approximately $25 million for the quarter ended March 31, 2012 and $232 million for the quarter ended March 31, 2011.  Refer to page 3 of Morgan Stanley’s Financial Supplement accompanying this release for the calculation of earnings per share.

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

	1Q12		4Q11		1Q11
Income (loss) applicable to MS – Non-GAAP	$1,376		$(356	)	$1,100
DVA impact - 1Q12 DVA of ($1,978), net of tax benefit of $524	$(1,454	)	$127		$(116	)
Income (loss) applicable to MS – GAAP	$(78	)	$(229	)	$984

 

6 The severance expense is associated with the Firm’s reduction in force in January 2012 and is recorded in the business segments’ results as follows: Institutional Securities: $108 million, Global Wealth Management: $25 million and Asset Management: $5 million.

6

 

7 Discontinued operations for the current quarter primarily reflected an after tax loss related to Saxon (reported in the Institutional Securities business segment) and the operating results of Quilter Holdings Ltd. (reported in the Global Wealth Management business segment).

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

	1Q12		1Q11
Sales & Trading – Non-GAAP	$4,141		$3,208
DVA impact	$(1,978	)	$(189	)
Sales & Trading – GAAP	$2,163		$3,019
FIC Sales & Trading – Non-GAAP	$2,594		$1,936
DVA impact	$(1,597	)	$(159	)
FIC Sales & Trading – GAAP	$997		$1,777
Equity Sales & Trading – Non-GAAP	$1,833		$1,732
DVA impact	$(381	)	$(30	)
Equity Sales & Trading – GAAP	$1,452		$1,702

 

9 Source: Thomson Reuters – for the period of January 1, 2012 to March 31, 2012 as of April 3, 2012.

10 The compensation to net revenue ratio is calculated as compensation expense of $2,108 million divided by net revenue of $3,023 million.  Excluding DVA, the denominator is increased by $1,978 million.  The compensation to net revenue ratio excluding DVA is a non-GAAP financial measure that the Firm considers to be a useful measure that the Firm and investors use to assess operating performance.

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

12 Morgan Stanley owns 51% of the Morgan Stanley Smith Barney joint venture (MSSB), which is consolidated.  The results related to the 49% interest retained by Citigroup Inc. are reported in net income (loss) applicable to noncontrolling interests on page 9 of Morgan Stanley’s Financial Supplement accompanying this release.

13 Results for the first quarter of 2012 and 2011 included pre-tax income of $65 million and $28 million, respectively, related to principal investments held by certain consolidated real estate funds.  The limited partnership interests in these funds are reported in net income (loss) applicable to noncontrolling interests on page 11 of Morgan Stanley’s Financial Supplement accompanying this release.

14 Results for the current quarter included gains of $67 million compared with gains of $42 million in the prior year quarter related to principal investments held by certain consolidated real estate funds.

15 The Firm calculates its Tier 1 capital ratio and risk-weighted assets in accordance with the capital adequacy standards for financial holding companies adopted by the Federal Reserve Board.  These standards are based upon a framework described in the International Convergence of Capital Measurement and Capital Standards, July 1988, as amended, also referred to as Basel I.  In accordance with the Federal Reserve Board’s definition, Tier 1 common capital is defined as Tier 1 capital less non-common elements in Tier 1 capital, including perpetual preferred stock and related surplus, minority interest in subsidiaries, trust preferred securities and mandatory convertible preferred securities.  These computations are preliminary estimates as of April 19, 2012 (the date of this release) and could be subject to revision in Morgan Stanley’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2012.

7

 

16 Tangible common equity and tangible book value per common share are non-GAAP financial measures that the Firm considers to be useful measures of capital adequacy.  Tangible common equity equals common equity less goodwill and intangible assets net of allowable mortgage servicing rights deduction and including only the Firm’s share of MSSB’s goodwill and intangible assets.  Tangible book value per common share equals tangible common equity divided by period end common shares outstanding.

17 The return on average common equity is calculated as annualized earnings applicable to Morgan Stanley common shareholders from continuing operations, prior to the allocation of income to Participating Restricted Stock Units, divided by average common equity.  The return on average common equity excluding DVA is a non-GAAP financial measure that the Firm considers to be a useful measure that the Firm and investors use to assess operating performance.  The reconciliation of income (loss) from continuing operations applicable to Morgan Stanley common shareholders and average common equity from a non-GAAP to GAAP basis are as follows (amounts are presented in millions):

	1Q12
Income (loss) applicable to MS common shareholders – Non-GAAP	$1,352
DVA impact	$(1,454	)
Income (loss) applicable to MS common shareholders – GAAP	$(102	)
Average common equity – Non-GAAP	$59,033
Inception to date, net of tax DVA impact	$1,452
Average common equity – GAAP	$60,485

18 For the quarter ended March 31, 2011, the Firm’s effective tax rate from continuing operations of 27.8% excluded discrete tax gains of approximately $700 million associated with the sale of Revel Entertainment Group, LLC and the MUMSS loss noted above.

8

MORGAN STANLEY
Quarterly Financial Summary
(unaudited, dollars in millions)
	Quarter Ended									Percentage Change From:
	Mar 31, 2012			Dec 31, 2011			Mar 31, 2011			Dec 31, 2011			Mar 31, 2011
Net revenues
Institutional Securities	$	3,023		$	2,071		$	3,568			46	%		(15	%)
Global Wealth Management Group		3,414			3,219			3,404			6	%		--
Asset Management		533			424			622			26	%		(14	%)
Intersegment Eliminations		(35	)		(36	)		(20	)		3	%		(75	%)
Consolidated net revenues	$	6,935		$	5,678		$	7,574			22	%		(8	%)
Income (loss) from continuing operations before tax
Institutional Securities	$	(312	)	$	(778	)	$	432			60	%		*
Global Wealth Management Group		387			238			344			63	%		13	%
Asset Management		128			78			125			64	%		2	%
Intersegment Eliminations		0			0			0			--			--
Consolidated income (loss) from continuing operations before tax	$	203		$	(462	)	$	901			*			(77	%)
Income (loss) applicable to Morgan Stanley
Institutional Securities	$	(296	)	$	(366	)	$	734			19	%		*
Global Wealth Management Group		193			131			182			47	%		6	%
Asset Management		25			6			68			*			(63	%)
Intersegment Eliminations		0			0			0			--			--
Consolidated income (loss) applicable to Morgan Stanley	$	(78	)	$	(229	)	$	984			66	%		*
Earnings (loss) applicable to Morgan Stanley common shareholders	$	(119	)	$	(275	)	$	736			57	%		*
Earnings per basic share:
Income from continuing operations	$	(0.05	)	$	(0.14	)	$	0.52			64	%		*
Discontinued operations	$	(0.01	)	$	(0.01	)	$	(0.01	)		--			--
Earnings per basic share	$	(0.06	)	$	(0.15	)	$	0.51			60	%		*
Earnings per diluted share:
Income from continuing operations	$	(0.05	)	$	(0.14	)	$	0.51			64	%		*
Discontinued operations	$	(0.01	)	$	(0.01	)	$	(0.01	)		--			--
Earnings per diluted share	$	(0.06	)	$	(0.15	)	$	0.50			60	%		*
Financial Metrics:
Return on average common equity
from continuing operations		*			*			6.3	%
Return on average common equity		*			*			6.2	%
Tier 1 common capital ratio		13.2	%		12.7	%		8.9	%
Tier 1 capital ratio		16.8	%		16.3	%		14.4	%
Book value per common share	$	30.74		$	31.42		$	31.45
Tangible book value per common share	$	27.37		$	27.95		$	26.97

Notes:	-	Results for the quarters ended March 31, 2012, December 31, 2011 and March 31, 2011 include positive (negative) revenue of $(1,978) million, $216 million and $(189) million, respectively, related to the movement in Morgan Stanley's credit spreads and other credit factors on certain long-term and short-term debt.
	-	Income (loss) applicable to Morgan Stanley represents consolidated income (loss) from continuing operations applicable to Morgan Stanley before gain (loss) from discontinued operations.
	-	The return on average common equity and tangible book value per common share are non-GAAP measures that the Firm considers to be a useful measure that the Firm and investors use to assess operating performance and capital adequacy.
	-	Tier 1 common capital ratio equals Tier 1 common equity divided by Risk Weighted Assets (RWA).
	-	Tier 1 capital ratio equals Tier 1 capital divided by RWA. See page 4 of the financial supplement for additional information related to this calculation.
	-	Book value per common share equals common equity divided by period end common shares outstanding.
	-	Tangible book value per common share equals tangible common equity divided by period end common shares outstanding.
	-	See page 4 of the financial supplement for additional information related to the calculation of the financial metrics.

9

MORGAN STANLEY
Quarterly Consolidated Income Statement Information
(unaudited, dollars in millions)
	Quarter Ended									Percentage Change From:
	Mar 31, 2012			Dec 31, 2011			Mar 31, 2011			Dec 31, 2011			Mar 31, 2011
Revenues:
Investment banking	$	1,063		$	1,051		$	1,214			1	%		(12	%)
Principal transactions:
Trading		2,407			968			2,977			149	%		(19	%)
Investments		85			140			329			(39	%)		(74	%)
Commissions and fees		1,177			1,149			1,439			2	%		(18	%)
Asset management, distribution and admin. fees		2,152			2,004			2,083			7	%		3	%
Other		110			98			(474	)		12	%		*
Total non-interest revenues		6,994			5,410			7,568			29	%		(8	%)
Interest income		1,542			1,685			1,859			(8	%)		(17	%)
Interest expense		1,601			1,417			1,853			13	%		(14	%)
Net interest		(59	)		268			6			*			*
Net revenues		6,935			5,678			7,574			22	%		(8	%)
Non-interest expenses:
Compensation and benefits		4,431			3,793			4,285			17	%		3	%
Non-compensation expenses:
Occupancy and equipment		392			383			397			2	%		(1	%)
Brokerage, clearing and exchange fees		403			379			401			6	%		--
Information processing and communications		459			471			440			(3	%)		4	%
Marketing and business development		146			160			142			(9	%)		3	%
Professional services		412			487			403			(15	%)		2	%
Other		489			467			605			5	%		(19	%)
Total non-compensation expenses		2,301			2,347			2,388			(2	%)		(4	%)
Total non-interest expenses		6,732			6,140			6,673			10	%		1	%
Income (loss) from continuing operations before taxes		203			(462	)		901			*			(77	%)
Income tax provision / (benefit) from continuing operations		54			(297	)		(244	)		*			*
Income (loss) from continuing operations		149			(165	)		1,145			*			(87	%)
Gain (loss) from discontinued operations after tax		(15	)		(19	)		(15	)		21	%		--
Net income (loss)	$	134		$	(184	)	$	1,130			*			(88	%)
Net income (loss) applicable to noncontrolling interests		228			66			162			*			41	%
Net income (loss) applicable to Morgan Stanley		(94	)		(250	)		968			62	%		*
Preferred stock dividend / Other		25			25			232			--			(89	%)
Earnings (loss) applicable to Morgan Stanley common shareholders	$	(119	)	$	(275	)	$	736			57	%		*
Amounts applicable to Morgan Stanley:
Income (loss) from continuing operations		(78	)		(229	)		984			66	%		*
Gain (loss) from discontinued operations after tax		(16	)		(21	)		(16	)		24	%		--
Net income (loss) applicable to Morgan Stanley	$	(94	)	$	(250	)	$	968			62	%		*
Pre-tax profit margin		3	%		*			12	%
Compensation and benefits as a % of net revenues		64	%		67	%		57	%
Non-compensation expenses as a % of net revenues		33	%		41	%		32	%
Effective tax rate from continuing operations		26.5	%		*			*

Notes:	-	Pre-tax profit margin is a non-GAAP financial measure that the Firm considers to be a useful measure that the Firm and investors use to assess operating performance.  Percentages represent income from continuing operations before income taxes as a percentage of net revenues.
	-	For the quarter ended March 31, 2012, discontinued operations primarily reflected an after-tax loss related to the first phase of the previously announced disposition of Saxon (reported in the Institutional Securities business segment) and the operating results of Quilter Holdings Ltd., (Quilter) (reported in the Global Wealth Management business segment).
	-	The quarter ended December 31, 2011, Principal Transactions - Trading included a loss of $1,742 million related to the MBIA settlement (MBIA).
	-	Other revenues for the quarter ended March 31, 2011, included a loss of approximately $655 million related to the 40% stake in a Japanese securities joint venture, Mitsubishi UFJ Morgan Stanley Securities Co., Ltd. ("MUMSS") controlled and managed by our partner, Mitsubishi UFJ Financial Group Inc.
	-	The quarter ended March 31, 2011 included a discrete net tax benefit of $447 million from the remeasurement of a deferred tax asset and the reversal of a related valuation allowance that are both associated with the sale of Revel Entertainment Group, LLC (Revel). Excluding this discrete tax gain and tax benefit of $230 million related to the MUMSS loss, the effective tax rate for the quarter was 27.8%.
	-	Preferred stock dividend / other includes allocation of earnings to Participating Restricted Stock Units (RSUs).

10 

MORGAN STANLEY
Quarterly Earnings Per Share
(unaudited, dollars in millions, except for per share data)
	Quarter Ended									Percentage Change From:
	Mar 31, 2012			Dec 31, 2011			Mar 31, 2011			Dec 31, 2011			Mar 31, 2011
Income (loss) from continuing operations	$	149		$	(165	)	$	1,145			*			(87	%)
Net income (loss) from continuing operations applicable to noncontrolling interest		227			64			161			*			41	%
Income from continuing operations applicable to Morgan Stanley		(78	)		(229	)		984			66	%		*
Less: Preferred Dividends		(24	)		(24	)		(220	)		--			89	%
Less: MUFG preferred stock conversion		-			-			-			--			--
Income from continuing operations applicable to Morgan Stanley, prior to allocation of income to Participating Restricted Stock Units		(102	)		(253	)		764			60	%		*
Basic EPS Adjustments:
Less: Allocation of earnings to Participating Restricted Stock Units		(1	)		(1	)		(12	)		--			92	%
Earnings (loss) from continuing operations applicable to Morgan Stanley common shareholders	$	(103	)	$	(254	)	$	752			59	%		*
Gain (loss) from discontinued operations after tax		(15	)		(19	)		(15	)		21	%		--
Gain (loss) from discontinued operations after tax applicable to noncontrolling interests		(1	)		(2	)		(1	)		50	%		--
Gain (loss) from discontinued operations after tax applicable to Morgan Stanley		(16	)		(21	)		(16	)		24	%		--
Less: Allocation of earnings to Participating Restricted Stock Units		0			0			0			--			--
Earnings (loss) from discontinued operations applicable to Morgan Stanley common shareholders		(16	)		(21	)		(16	)		24	%		--
Earnings (loss) applicable to Morgan Stanley common shareholders	$	(119	)	$	(275	)	$	736			57	%		*
Average basic common shares outstanding (millions)		1,877			1,850			1,456			1	%		29	%
Earnings per basic share:
Income from continuing operations	$	(0.05	)	$	(0.14	)	$	0.52			64	%		*
Discontinued operations	$	(0.01	)	$	(0.01	)	$	(0.01	)		--			--
Earnings per basic share	$	(0.06	)	$	(0.15	)	$	0.51			60	%		*
Earnings (loss) from continuing operations applicable to Morgan Stanley common shareholders	$	(103	)	$	(254	)	$	752			59	%		*
Diluted EPS Adjustments:
Earnings (loss) from continuing operations applicable to Morgan Stanley common shareholders	$	(103	)	$	(254	)	$	752			59	%		*
Earnings (loss) from discontinued operations applicable to Morgan Stanley common shareholders		(16	)		(21	)		(16	)		24	%		--
Earnings (loss) applicable to common shareholders plus assumed conversions	$	(119	)	$	(275	)	$	736			57	%		*
Average diluted common shares outstanding and common stock equivalents (millions)		1,877			1,850			1,472			1	%		28	%
Earnings per diluted share:
Income from continuing operations	$	(0.05	)	$	(0.14	)	$	0.51			64	%		*
Discontinued operations	$	(0.01	)	$	(0.01	)	$	(0.01	)		--			--
Earnings per diluted share	$	(0.06	)	$	(0.15	)	$	0.50			60	%		*

Notes:  -  The Firm calculates earnings per share using the two-class method as described under the accounting guidance for earnings per share.  For further discussion of the Firm's earnings per share calculations, see page 14 of the financial supplement and Note 2 to the consolidated financial statements in the Firm's Annual Report on Form 10-K for the year ended December 31, 2011.

11

EX-99.2

Exhibit 99.2

MORGAN STANLEY

Financial Supplement - 1Q 2012

Table of Contents

Page #
1	…………….	Quarterly Financial Summary
2	…………….	Quarterly Consolidated Income Statement Information
3	…………….	Quarterly Earnings Per Share Summary
4 - 5	…………….	Quarterly Consolidated Financial Information and Statistical Data
6	…………….	Quarterly Institutional Securities Income Statement Information
7 - 8	…………….	Quarterly Institutional Securities Financial Information and Statistical Data
9	…………….	Quarterly Global Wealth Management Group Income Statement Information
10	…………….	Quarterly Global Wealth Management Group Financial Information and Statistical Data
11	…………….	Quarterly Asset Management Income Statement Information
12	…………….	Quarterly Asset Management Financial Information and Statistical Data
13	…………….	Country Risk Exposure - European Peripherals and France Appendix I
14	…………….	Earnings Per Share Appendix II
15 - 16	…………….	End Notes
17	…………….	Legal Notice

MORGAN STANLEY

Quarterly Financial Summary

(unaudited, dollars in millions)

	Quarter Ended									Percentage Change From:
	Mar 31, 2012			Dec 31, 2011			Mar 31, 2011			Dec 31, 2011			Mar 31, 2011
Net revenues
Institutional Securities	$	3,023		$	2,071		$	3,568			46	%		(15	%)
Global Wealth Management Group		3,414			3,219			3,404			6	%		--
Asset Management		533			424			622			26	%		(14	%)
Intersegment Eliminations		(35	)		(36	)		(20	)		3	%		(75	%)
Consolidated net revenues	$	6,935		$	5,678		$	7,574			22	%		(8	%)
Income (loss) from continuing operations before tax
Institutional Securities	$	(312	)	$	(778	)	$	432			60	%		*
Global Wealth Management Group		387			238			344			63	%		13	%
Asset Management		128			78			125			64	%		2	%
Intersegment Eliminations		0			0			0			--			--
Consolidated income (loss) from continuing operations before tax	$	203		$	(462	)	$	901			*			(77	%)
Income (loss) applicable to Morgan Stanley
Institutional Securities	$	(296	)	$	(366	)	$	734			19	%		*
Global Wealth Management Group		193			131			182			47	%		6	%
Asset Management		25			6			68			*			(63	%)
Intersegment Eliminations		0			0			0			--			--
Consolidated income (loss) applicable to Morgan Stanley	$	(78	)	$	(229	)	$	984			66	%		*
Financial Metrics:
Return on average common equity
from continuing operations		*			*			6.3	%
Return on average common equity		*			*			6.2	%
Tier 1 common capital ratio		13.2	%		12.7	%		8.9	%
Tier 1 capital ratio		16.8	%		16.3	%		14.4	%
Book value per common share	$	30.74		$	31.42		$	31.45
Tangible book value per common share	$	27.37		$	27.95		$	26.97

Notes:	-	Results for the quarters ended March 31, 2012, December 31, 2011 and March 31, 2011 include positive (negative) revenue of $(1,978) million, $216 million and $(189) million, respectively, related to the movement in Morgan Stanley's credit spreads and other credit factors on certain long-term and short-term debt.
	-	Income (loss) applicable to Morgan Stanley represents consolidated income (loss) from continuing operations applicable to Morgan Stanley before gain (loss) from discontinued operations.
	-	The return on average common equity and tangible book value per common share are non-GAAP measures that the Firm considers to be a useful measure that the Firm and investors use to assess operating performance and capital adequacy.
	-	Tier 1 common capital ratio equals Tier 1 common equity divided by Risk Weighted Assets (RWA).
	-	Tier 1 capital ratio equals Tier 1 capital divided by RWA. See page 4 of the financial supplement for additional information related to this calculation.
	-	Book value per common share equals common equity divided by period end common shares outstanding.
	-	Tangible book value per common share equals tangible common equity divided by period end common shares outstanding.
	-	See page 4 of the financial supplement for additional information related to the calculation of the financial metrics.
	-	Refer to Legal Notice on page 17.

1

MORGAN STANLEY

Quarterly Consolidated Income Statement Information

(unaudited, dollars in millions)

	Quarter Ended									Percentage Change From:
	Mar 31, 2012			Dec 31, 2011			Mar 31, 2011			Dec 31, 2011			Mar 31, 2011
Revenues:
Investment banking	$	1,063		$	1,051		$	1,214			1	%		(12	%)
Principal transactions:
Trading		2,407			968			2,977			149	%		(19	%)
Investments		85			140			329			(39	%)		(74	%)
Commissions and fees		1,177			1,149			1,439			2	%		(18	%)
Asset management, distribution and admin. fees		2,152			2,004			2,083			7	%		3	%
Other		110			98			(474	)		12	%		*
Total non-interest revenues		6,994			5,410			7,568			29	%		(8	%)
Interest income		1,542			1,685			1,859			(8	%)		(17	%)
Interest expense		1,601			1,417			1,853			13	%		(14	%)
Net interest		(59	)		268			6			*			*
Net revenues		6,935			5,678			7,574			22	%		(8	%)
Non-interest expenses:
Compensation and benefits		4,431			3,793			4,285			17	%		3	%
Non-compensation expenses:
Occupancy and equipment		392			383			397			2	%		(1	%)
Brokerage, clearing and exchange fees		403			379			401			6	%		--
Information processing and communications		459			471			440			(3	%)		4	%
Marketing and business development		146			160			142			(9	%)		3	%
Professional services		412			487			403			(15	%)		2	%
Other		489			467			605			5	%		(19	%)
Total non-compensation expenses		2,301			2,347			2,388			(2	%)		(4	%)
Total non-interest expenses		6,732			6,140			6,673			10	%		1	%
Income (loss) from continuing operations before taxes		203			(462	)		901			*			(77	%)
Income tax provision / (benefit) from continuing operations		54			(297	)		(244	)		*			*
Income (loss) from continuing operations		149			(165	)		1,145			*			(87	%)
Gain (loss) from discontinued operations after tax		(15	)		(19	)		(15	)		21	%		--
Net income (loss)	$	134		$	(184	)	$	1,130			*			(88	%)
Net income (loss) applicable to noncontrolling interests		228			66			162			*			41	%
Net income (loss) applicable to Morgan Stanley		(94	)		(250	)		968			62	%		*
Preferred stock dividend / Other		25			25			232			--			(89	%)
Earnings (loss) applicable to Morgan Stanley common shareholders	$	(119	)	$	(275	)	$	736			57	%		*
Amounts applicable to Morgan Stanley:
Income (loss) from continuing operations		(78	)		(229	)		984			66	%		*
Gain (loss) from discontinued operations after tax		(16	)		(21	)		(16	)		24	%		--
Net income (loss) applicable to Morgan Stanley	$	(94	)	$	(250	)	$	968			62	%		*
Pre-tax profit margin		3	%		*			12	%
Compensation and benefits as a % of net revenues		64	%		67	%		57	%
Non-compensation expenses as a % of net revenues		33	%		41	%		32	%
Effective tax rate from continuing operations		26.5	%		*			*

Notes:	-	Pre-tax profit margin is a non-GAAP financial measure that the Firm considers to be a useful measure that the Firm and investors use to assess operating performance.  Percentages represent income from continuing operations before income taxes as a percentage of net revenues.
	-	For the quarter ended March 31, 2012, discontinued operations primarily reflected an after-tax loss related to the first phase of the previously announced disposition of Saxon (reported in the Institutional Securities business segment) and the operating results of Quilter Holdings Ltd., (Quilter) (reported in the Global Wealth Management business segment).
	-	The quarter ended December 31, 2011, Principal Transactions - Trading included a loss of $1,742 million related to the MBIA settlement (MBIA).
	-	Other revenues for the quarter ended March 31, 2011, included a loss of approximately $655 million related to the 40% stake in a Japanese securities joint venture, Mitsubishi UFJ Morgan Stanley Securities Co., Ltd. ("MUMSS") controlled and managed by our partner, Mitsubishi UFJ Financial Group Inc.
	-	The quarter ended March 31, 2011 included a discrete net tax benefit of $447 million from the remeasurement of a deferred tax asset and the reversal of a related valuation allowance that are both associated with the sale of Revel Entertainment Group, LLC (Revel). Excluding this discrete tax gain and tax benefit of $230 million related to the MUMSS loss, the effective tax rate for the quarter was 27.8%.
	-	Preferred stock dividend / other includes allocation of earnings to Participating Restricted Stock Units (RSUs).
	-	Refer to Legal Notice on page 17.

2

MORGAN STANLEY

Quarterly Earnings Per Share

(unaudited, dollars in millions, except for per share data)

	Quarter Ended									Percentage Change From:
	Mar 31, 2012			Dec 31, 2011			Mar 31, 2011			Dec 31, 2011			Mar 31, 2011
Income (loss) from continuing operations	$	149		$	(165	)	$	1,145			*			(87	%)
Net income (loss) from continuing operations applicable to noncontrolling interest		227			64			161			*			41	%
Income from continuing operations applicable to Morgan Stanley		(78	)		(229	)		984			66	%		*
Less: Preferred Dividends		(24	)		(24	)		(220	)		--			89	%
Less: MUFG preferred stock conversion		-			-			-			--			--
Income from continuing operations applicable to Morgan Stanley, prior to allocation of income to Participating Restricted Stock Units		(102	)		(253	)		764			60	%		*
Basic EPS Adjustments:
Less: Allocation of earnings to Participating Restricted Stock Units		(1	)		(1	)		(12	)		--			92	%
Earnings (loss) from continuing operations applicable to Morgan Stanley common shareholders	$	(103	)	$	(254	)	$	752			59	%		*
Gain (loss) from discontinued operations after tax		(15	)		(19	)		(15	)		21	%		--
Gain (loss) from discontinued operations after tax applicable to noncontrolling interests		(1	)		(2	)		(1	)		50	%		--
Gain (loss) from discontinued operations after tax applicable to Morgan Stanley		(16	)		(21	)		(16	)		24	%		--
Less: Allocation of earnings to Participating Restricted Stock Units		0			0			0			--			--
Earnings (loss) from discontinued operations applicable to Morgan Stanley common shareholders		(16	)		(21	)		(16	)		24	%		--
Earnings (loss) applicable to Morgan Stanley common shareholders	$	(119	)	$	(275	)	$	736			57	%		*
Average basic common shares outstanding (millions)		1,877			1,850			1,456			1	%		29	%
Earnings per basic share:
Income from continuing operations	$	(0.05	)	$	(0.14	)	$	0.52			64	%		*
Discontinued operations	$	(0.01	)	$	(0.01	)	$	(0.01	)		--			--
Earnings per basic share	$	(0.06	)	$	(0.15	)	$	0.51			60	%		*
Earnings (loss) from continuing operations applicable to Morgan Stanley common shareholders	$	(103	)	$	(254	)	$	752			59	%		*
Diluted EPS Adjustments:
Earnings (loss) from continuing operations applicable to Morgan Stanley common shareholders	$	(103	)	$	(254	)	$	752			59	%		*
Earnings (loss) from discontinued operations applicable to Morgan Stanley common shareholders		(16	)		(21	)		(16	)		24	%		--
Earnings (loss) applicable to common shareholders plus assumed conversions	$	(119	)	$	(275	)	$	736			57	%		*
Average diluted common shares outstanding and common stock equivalents (millions)		1,877			1,850			1,472			1	%		28	%
Earnings per diluted share:
Income from continuing operations	$	(0.05	)	$	(0.14	)	$	0.51			64	%		*
Discontinued operations	$	(0.01	)	$	(0.01	)	$	(0.01	)		--			--
Earnings per diluted share	$	(0.06	)	$	(0.15	)	$	0.50			60	%		*

Notes:	-	The Firm calculates earnings per share using the two-class method as described under the accounting guidance for earnings per share.  For further discussion of the Firm's earnings per share calculations, see page 14 of the financial supplement and Note 2 to the consolidated financial statements in the Firm's Annual Report on Form 10-K for the year ended December 31, 2011.
	-	Refer to Legal Notice on page 17.

3

MORGAN STANLEY

Quarterly Consolidated Financial Information and Statistical Data

(unaudited)

	Quarter Ended									Percentage Change From:
	Mar 31, 2012			Dec 31, 2011			Mar 31, 2011			Dec 31, 2011			Mar 31, 2011
Regional revenues (1)
Americas	$	4,790		$	3,722		$	5,466			29	%		(12	%)
EMEA (Europe, Middle East, Africa)		1,154			1,234			1,667			(6	%)		(31	%)
Asia		991			722			441			37	%		125	%
Consolidated net revenues	$	6,935		$	5,678		$	7,574			22	%		(8	%)
Worldwide employees		59,569			61,899			62,494			(4	%)		(5	%)
Firmwide deposits		66,441			65,662			63,495			1	%		5	%
Total assets	$	781,030		$	749,898		$	836,185			4	%		(7	%)
Risk weighted assets (2)	$	318,900		$	314,055		$	345,491			2	%		(8	%)
Common equity		60,816			60,541			48,589			--			25	%
Preferred equity		1,508			1,508			9,597			--			(84	%)
Morgan Stanley shareholders' equity		62,324			62,049			58,186			--			7	%
Junior subordinated debt issued to capital trusts		4,838			4,853			4,845			--			--
Less: Goodwill and intangible assets (3)		(6,660	)		(6,691	)		(6,916	)		--			4	%
Tangible Morgan Stanley shareholders' equity	$	60,502		$	60,211		$	56,115			--			8	%
Tangible common equity	$	54,156		$	53,850		$	41,673			1	%		30	%
Leverage ratio		12.9	x		12.5	x		14.9	x
Tier 1 common capital (4)	$	42,150		$	39,785		$	30,889			6	%		36	%
Tier 1 capital (5)	$	53,526		$	51,114		$	49,619			5	%		8	%
Tier 1 common capital ratio		13.2	%		12.7	%		8.9	%
Tier 1 capital ratio		16.8	%		16.3	%		14.4	%
Tier 1 leverage ratio		7.0	%		6.6	%		6.1	%
Period end common shares outstanding (000's)		1,978,338			1,926,986			1,545,064			3	%		28	%
Book value per common share	$	30.74		$	31.42		$	31.45
Tangible book value per common share	$	27.37		$	27.95		$	26.97

Notes:	-	All data presented in millions except number of employees, ratios and book values.
	-	Goodwill and intangible assets exclude noncontrolling interests and reflect the Firm's share of Morgan Stanley Smith Barney (MSSB) goodwill and intangible assets.
	-	Tangible common equity equals common equity less goodwill and intangible assets net of allowable mortgage servicing rights deduction.
	-	Leverage ratio equals total assets divided by tangible Morgan Stanley shareholders' equity.
	-	Tier 1 leverage ratio equals Tier 1 capital divided by adjusted average total assets (which reflects adjustments for disallowed goodwill, certain intangible assets, deferred tax assets and financial and non-financial equity investments.)
	-	Refer to End Notes on pages 15-16 and Legal Notice on page 17.

4

MORGAN STANLEY

Quarterly Consolidated Financial Information and Statistical Data

(unaudited, dollars in billions)

		Quarter Ended								Percentage Change From:
		Mar 31, 2012			Dec 31, 2011			Mar 31, 2011		Dec 31, 2011		Mar 31, 2011
Average Tier 1 Common Capital (1)
Institutional Securities	$	22.1		$	24.4		$	26.0		(9	%)	(15	%)
Global Wealth Management Group		3.6			3.3			3.2		9	%	13	%
Asset Management		1.3			1.3			1.4		--		(7	%)
Parent capital		13.9			11.6			0.1		20	%	*
Total - continuing operations		40.9			40.6			30.7		1	%	33	%
Discontinued operations		0.0			0.0			0.0		--		--
Firm	$	40.9		$	40.6		$	30.7		1	%	33	%
Average Common Equity (1)
Institutional Securities	$	29.5		$	31.3		$	33.2		(6	%)	(11	%)
Global Wealth Management Group		13.3			13.0			13.1		2	%	2	%
Asset Management		2.5			2.5			2.6		--		(4	%)
Parent capital		15.2			13.8			(0.8	)	10	%	*
Total - continuing operations		60.5			60.6			48.1		--		26	%
Discontinued operations		0.0			0.0			0.0		--		--
Firm	$	60.5		$	60.6		$	48.1		--		26	%
Return on average Tier 1 common capital
Institutional Securities		*			*			8	%
Global Wealth Management Group		21	%		16	%		20	%
Asset Management		7	%		2	%		16	%
Total - continuing operations		*			*			10	%
Firm		*			*			10	%
Return on average common equity
Institutional Securities		*			*			7	%
Global Wealth Management Group		6	%		4	%		5	%
Asset Management		4	%		1	%		9	%
Total - continuing operations		*			*			6	%
Firm		*			*			6	%

Notes:	-	Beginning in the quarter ended March 31, 2012, Firm and segment required Capital is met by Tier 1 common capital. Prior to the current quarter, the Firm's required Capital was met by regulatory Tier 1 capital or Tier 1 common equity. Segment capital for prior quarters has been recast under this framework. Tier 1 common capital is defined as Tier 1 capital less non-common elements in Tier 1 capital, including perpetual preferred stock and related surplus, minority interest in subsidiaries, trust preferred securities and mandatory convertible preferred securities.
	-	The return on average common equity and average Tier 1 common capital are non-GAAP measures that the Firm considers to be useful measures that the Firm and investors use to assess operating performance.
	-	Refer to End Notes on pages 15-16 and Legal Notice on page 17.

5

 MORGAN STANLEY

 Quarterly Institutional Securities Income Statement Information

 (unaudited, dollars in millions)

	Quarter Ended									Percentage Change From:
	Mar 31, 2012			Dec 31, 2011			Mar 31, 2011			Dec 31, 2011			Mar 31, 2011
Revenues:
Investment banking	$	851		$	883		$	1,008			(4	%)		(16	%)
Principal transactions:
Trading		2,044			663			2,647			*			(23	%)
Investments		(49	)		65			143			*			*
Commissions and fees		548			523			669			5	%		(18	%)
Asset management, distribution and admin. fees		32			29			30			10	%		7	%
Other		58			43			(602	)		35	%		*
Total non-interest revenues		3,484			2,206			3,895			58	%		(11	%)
Interest income		1,145			1,301			1,486			(12	%)		(23	%)
Interest expense		1,606			1,436			1,813			12	%		(11	%)
Net interest		(461	)		(135	)		(327	)		*			(41	%)
Net revenues		3,023			2,071			3,568			46	%		(15	%)
Compensation and benefits		2,108			1,551			1,923			36	%		10	%
Non-compensation expenses		1,227			1,298			1,213			(5	%)		1	%
Total non-interest expenses		3,335			2,849			3,136			17	%		6	%
Income (loss) from continuing operations before taxes		(312	)		(778	)		432			60	%		*
Income tax provision / (benefit) from continuing operations		(105	)		(418	)		(363	)		75	%		71	%
Income (loss) from continuing operations		(207	)		(360	)		795			43	%		*
Gain (loss) from discontinued operations after tax		(17	)		(28	)		(23	)		39	%		26	%
Net income (loss)		(224	)		(388	)		772			42	%		*
Net income (loss) applicable to noncontrolling interests		89			6			61			*			46	%
Net income (loss) applicable to Morgan Stanley	$	(313	)	$	(394	)	$	711			21	%		*
Amounts applicable to Morgan Stanley:
Income (loss) from continuing operations		(296	)		(366	)		734			19	%		*
Gain (loss) from discontinued operations after tax		(17	)		(28	)		(23	)		39	%		26	%
Net income (loss) applicable to Morgan Stanley	$	(313	)	$	(394	)	$	711			21	%		*
Return on average common equity
from continuing operations		*			*			7	%
Pre-tax profit margin		*			*			12	%
Compensation and benefits as a % of net revenues		70	%		75	%		54	%

Notes:	-	Pre-tax profit margin is a non-GAAP financial measure that the Firm considers to be a useful measure that the Firm and investors use to assess operating performance. Percentages represent income from continuing operations before income taxes as a percentage of net revenues.
	-	For the quarter ended March 31, 2012, discontinued operations included an after-tax loss related to the first phase of the previously announced disposition of Saxon.
	-	For the quarter ended December 31, 2011, Principal Transactions - Trading included a loss of $1,742 million related to MBIA.
	-	Other revenues for the quarter ended March 31, 2011 included a loss of approximately $655 million related to MUMSS.
	-	The quarter ended March 31, 2011 included a discrete net tax benefit of $447 million from the remeasurement of a deferred tax asset and the reversal of a related valuation allowance that are both associated with the sale of Revel and the tax benefit of $230 related to the MUMSS loss.
	-	Refer to Legal Notice on page 17.

6

MORGAN STANLEY

Quarterly Financial Information and Statistical Data

Institutional Securities

(unaudited, dollars in millions)

	Quarter Ended									Percentage Change From:
	Mar 31, 2012			Dec 31, 2011			Mar 31, 2011			Dec 31, 2011			Mar 31, 2011
Investment Banking
Advisory revenues	$	313		$	406		$	385			(23	%)		(19	%)
Underwriting revenues
Equity		172			189			285			(9	%)		(40	%)
Fixed income		366			288			338			27	%		8	%
Total underwriting revenues		538			477			623			13	%		(14	%)
Total investment banking revenues	$	851		$	883		$	1,008			(4	%)		(16	%)
Sales & Trading
Equity	$	1,452		$	1,254		$	1,702			16	%		(15	%)
Fixed Income and Commodities		997			(257	)		1,777			*			(44	%)
Other		(286	)		83			(460	)		*			38	%
Total sales & trading net revenues	$	2,163		$	1,080		$	3,019			100	%		(28	%)
Investments & Other
Investments	$	(49	)	$	65		$	143			*			*
Other		58			43			(602	)		35	%		*
Total investments & other revenues	$	9		$	108		$	(459	)		(92	%)		*
Total Institutional Securities net revenues	$	3,023		$	2,071		$	3,568			46	%		(15	%)
Average Daily 95% / One-Day Value-at-Risk ("VaR") (1)
Primary Market Risk Category ($ millions, pre-tax)
Interest rate and credit spread	$	57		$	57		$	96
Equity price	$	33		$	29		$	28
Foreign exchange rate	$	16		$	12		$	17
Commodity price	$	31		$	28		$	33
Aggregation of Primary Risk Categories	$	72		$	66		$	116
Credit Portfolio VaR	$	40		$	103		$	82
Trading VaR	$	84		$	123		$	121

Notes:	-	For the periods noted below, sales and trading net revenues included positive (negative) revenue related to DVA as follows:
		March 31, 2012: Total: $(1,978) million; Fixed Income & Commodities: $(1,597) million; Equity: $(381) million
		December 31, 2011: Total: $216 million; Fixed Income & Commodities: $239 million; Equity: $(23) million
		March 31, 2011: Total: $(189) million; Fixed Income & Commodities: $(159) million; Equity: $(30) million
	-	For the quarter ended Decemer 31, 2011, Fixed Income and Commodities sales and trading net revenues included a loss of $1,742 million related to MBIA.
	-	Other revenues for the quarter ended March 31, 2011 included a loss of $655 million related to MUMSS.
	-	Refer to End Notes on pages 15-16 and Legal Notice on page 17.

7

MORGAN STANLEY

  Quarterly Financial Information and Statistical Data

  Institutional Securities - Corporate Loans and Commitments

  (unaudited, dollars in billions)

	Quarter Ended									Percentage Change From:
	Mar 31, 2012			Dec 31, 2011			Mar 31, 2011			Dec 31, 2011			Mar 31, 2011
Loans and commitments at fair value
Corporate funded loans:
Investment grade	$	6.4		$	6.6		$	5.3			(3	%)		21	%
Non-investment grade		6.8			7.3			6.5			(7	%)		5	%
Total corporate funded loans	$	13.2		$	13.9		$	11.8			(5	%)		12	%
Corporate lending commitments:
Investment grade	$	41.5		$	45.2		$	48.7			(8	%)		(15	%)
Non-investment grade		12.2			14.1			14.8			(13	%)		(18	%)
Total corporate lending commitments	$	53.7		$	59.3		$	63.5			(9	%)		(15	%)
Corporate funded loans plus lending commitments:
Investment grade	$	47.9		$	51.8		$	54.0			(8	%)		(11	%)
Non-investment grade		19.0			21.4			21.3			(11	%)		(11	%)
Total loans and commitments at fair value	$	66.9		$	73.2		$	75.3			(9	%)		(11	%)
% investment grade		72	%		71	%		72	%		1	%		--
% non-investment grade		28	%		29	%		28	%		(3	%)		--
Held for investment (HFI) portfolio	$	18.1		$	9.7		$	1.0			87	%		*
Held for sale (HFS) portfolio	$	0.5		$	-		$	-			*			*
Hedges	$	33.8		$	35.8		$	23.9			(6	%)		41	%

Notes:	-	In connection with certain of its Institutional Securities business activities, the Firm provides loans or lending commitments to select clients related to its event driven or relationship lending activities. For a further discussion of this activity, see the Firm's Annual Report on Form 10-K for the year ended December 31, 2011.
	-	On March 31, 2012, December 31, 2011 and March 31, 2011, the "event-driven" lending portfolio of pipeline commitments and closed deals to non-investment grade borrowers were $3.8 billion, $3.8 billion and $3.7 billion, respectively.
	-	On March 31, 2012, December 31, 2011 and March 31, 2011, the HFI portfolio allowance for loan losses for funded loans of $15 million, $6 million and $0.3 million, respectively.
	-	On March 31, 2012, December 31, 2011 and March 31, 2011, the HFI portfolio allowance for credit losses for loan commitments of $12 million, $17 million and $0 million, respectively.
	-	Held for sale portfolio reflects loans and commitments carried at the lower of cost or fair market value.
	-	The hedge balance reflects the notional amount utilized by the corporate lending business.
	-	Refer to Legal Notice on page 17.

8

MORGAN STANLEY

Quarterly Global Wealth Management Group Income Statement Information

(unaudited, dollars in millions)

	Quarter Ended									Percentage Change From:
	Mar 31, 2012			Dec 31, 2011			Mar 31, 2011			Dec 31, 2011			Mar 31, 2011
Revenues:
Investment banking	$	205		$	165		$	204			24	%		--
Principal transactions:
Trading		371			313			333			19	%		11	%
Investments		2			(2	)		4			*			(50	%)
Commissions and fees		630			626			770			1	%		(18	%)
Asset management, distribution and admin. fees		1,739			1,622			1,662			7	%		5	%
Other		57			78			90			(27	%)		(37	%)
Total non-interest revenues		3,004			2,802			3,063			7	%		(2	%)
Interest income		490			480			453			2	%		8	%
Interest expense		80			63			112			27	%		(29	%)
Net interest		410			417			341			(2	%)		20	%
Net revenues		3,414			3,219			3,404			6	%		--
Compensation and benefits		2,105			2,059			2,109			2	%		--
Non-compensation expenses		922			922			951			--			(3	%)
Total non-interest expenses		3,027			2,981			3,060			2	%		(1	%)
Income (loss) from continuing operations before taxes		387			238			344			63	%		13	%
Income tax provision / (benefit) from continuing operations		121			93			89			30	%		36	%
Income (loss) from continuing operations		266			145			255			83	%		4	%
Gain (loss) from discontinued operations after tax		1			4			2			(75	%)		(50	%)
Net income (loss)		267			149			257			79	%		4	%
Net income (loss) applicable to noncontrolling interests		74			16			74			*			--
Net income (loss) applicable to Morgan Stanley	$	193		$	133		$	183			45	%		5	%
Amounts applicable to Morgan Stanley:
Income (loss) from continuing operations		193			131			182			47	%		6	%
Gain (loss) from discontinued operations after tax		0			2			1			*			*
Net income (loss) applicable to Morgan Stanley	$	193		$	133		$	183			45	%		5	%
Return on average common equity
from continuing operations		6	%		4	%		5	%
Pre-tax profit margin		11	%		7	%		10	%
Compensation and benefits as a % of net revenues		62	%		64	%		62	%

Notes:	-	The tax provision / (benefit) for all periods includes the Firm's interest in MSSB.
	-	For the quarter ended March 31, 2012, discontinued operations included the operating results for Quilter.
	-	Net income (loss) applicable to noncontrolling interests reflects the 49% allocation of MSSB's pre-tax results to Citigroup.
	-	Pre-tax profit margin is a non-GAAP financial measure that the Firm considers to be a useful measure that the Firm and investors use to assess operating performance. Percentages represent income from continuing operations before income taxes as a percentage of net revenues.
	-	Refer to Legal Notice on page 17.

9

MORGAN STANLEY 

Quarterly Financial Information and Statistical Data 

Global Wealth Management Group 

(unaudited)

	Quarter Ended									Percentage Change From:
	Mar 31, 2012			Dec 31, 2011			Mar 31, 2011			Dec 31, 2011			Mar 31, 2011
Global representatives		17,193			17,512			18,124			(2	%)		(5	%)
Annualized revenue per global
representative (000's)	$	787		$	732		$	747			8	%		5	%
Assets by client segment (billions)
$10m or more		588			508			544			16	%		8	%
$1m - $10m		735			704			728			4	%		1	%
Subtotal - > $1m		1,323			1,212			1,272			9	%		4	%
$100k - $1m		381			383			395			(1	%)		(4	%)
< $100k		40			42			39			(5	%)		3	%
Total client assets (billions)	$	1,744		$	1,637		$	1,706			7	%		2	%
% of assets by client segment > $1m		76	%		74	%		75	%
Fee-based client account assets (billions)	$	531		$	485		$	490			9	%		8	%
Fee-based assets as a % of client assets		30	%		30	%		29	%
Bank deposit program (millions)	$	111,981		$	110,561		$	111,502			1	%		--
Client assets per global
representative (millions)	$	101		$	93		$	94			9	%		7	%
Global fee based asset flows (billions)	$	8.7		$	4.8		$	17.5			81	%		(50	%)
Global retail locations		743			753			820			(1	%)		(9	%)

Notes:	-	Annualized revenue per global representative is defined as annualized revenue divided by average global representative headcount.
	-	Fee-based client account assets represent the amount of assets in client accounts where the basis of payment for services is a fee calculated on those assets.
	-	For the quarters ended March 31, 2012, December 31, 2011 and March 31, 2011, approximately $57 billion, $56 billion and $54 billion, respectively, of the assets in the bank deposit program are attributable to Morgan Stanley.
	-	Global fee-based asset flows represent the net asset flows, excluding interest and dividends, in client accounts where the basis of payment for services is a fee calculated on those assets.
	-	Client assets per global representative represents total client assets divided by period end global representative headcount.
	-	Refer to Legal Notice on page 17.

10

MORGAN STANLEY

Quarterly Asset Management Income Statement Information

(unaudited, dollars in millions)

	Quarter Ended									Percentage Change From:
	Mar 31, 2012			Dec 31, 2011			Mar 31, 2011			Dec 31, 2011			Mar 31, 2011
Revenues:
Investment banking	$	7		$	3		$	2			133	%		*
Principal transactions:
Trading		(6	)		(7	)		(1	)		14	%		*
Investments (1)		132			77			182			71	%		(27	%)
Commissions and fees		0			0			0			--			--
Asset management, distribution and admin. fees		411			379			405			8	%		1	%
Other		(3	)		(14	)		42			79	%		*
Total non-interest revenues		541			438			630			24	%		(14	%)
Interest income		3			0			4			*			(25	%)
Interest expense		11			14			12			(21	%)		(8	%)
Net interest		(8	)		(14	)		(8	)		43	%		--
Net revenues		533			424			622			26	%		(14	%)
Compensation and benefits		218			183			253			19	%		(14	%)
Non-compensation expenses		187			163			244			15	%		(23	%)
Total non-interest expenses		405			346			497			17	%		(19	%)
Income (loss) from continuing operations before taxes		128			78			125			64	%		2	%
Income tax provision / (benefit) from continuing operations		38			28			30			36	%		27	%
Income (loss) from continuing operations		90			50			95			80	%		(5	%)
Gain (loss) from discontinued operations after tax		1			5			6			(80	%)		(83	%)
Net income (loss)		91			55			101			65	%		(10	%)
Net income (loss) applicable to noncontrolling interests (1)		65			44			27			48	%		141	%
Net income (loss) applicable to Morgan Stanley	$	26		$	11		$	74			136	%		(65	%)
Amounts applicable to Morgan Stanley:
Income (loss) from continuing operations		25			6			68			*			(63	%)
Gain (loss) from discontinued operations after tax		1			5			6			(80	%)		(83	%)
Net income (loss) applicable to Morgan Stanley	$	26		$	11		$	74			136	%		(65	%)
Return on average common equity
from continuing operations		4	%		1	%		9	%
Pre-tax profit margin		24	%		18	%		20	%
Compensation and benefits as a % of net revenues		41	%		43	%		41	%

Notes:	-	For the quarter ended December 31, 2011, discontinued operations primarily reflected a reduction in the carrying amount of certain guarantees related to Crescent Real Estate Equities Limited Partnership.
	-	Pre-tax profit margin is a non-GAAP financial measure that the Firm considers to be a useful measure that the Firm and investors use to assess operating performance. Percentages represent income from continuing operations before income taxes as a percentage of net revenues.
	-	Refer to End Notes on pages 15-16 and Legal Notice on page 17.

11

MORGAN STANLEY

Quarterly Financial Information and Statistical Data

Asset Management

(unaudited, dollars in billions)

	Quarter Ended									Percentage Change From:
	Mar 31, 2012			Dec 31, 2011			Mar 31, 2011			Dec 31, 2011			Mar 31, 2011
Net Revenues
Traditional Asset Management	$	342		$	290		$	326			18	%		5	%
Real Estate Investing (1)		146			111			113			32	%		29	%
Merchant Banking		45			23			183			96	%		(75	%)
Total Asset Management	$	533		$	424		$	622			26	%		(14	%)
Assets under management or supervision
Net flows by asset class (2)
Traditional Asset Management
Equity	$	(0.9	)	$	1.0		$	2.0			*			*
Fixed Income		(0.7	)		(1.5	)		(0.6	)		53	%		(17	%)
Liquidity		1.2			6.7			1.6			(82	%)		(25	%)
Alternatives		(0.1	)		7.8			(0.1	)		*			--
Total Traditional Asset Management		(0.5	)		14.0			2.9			*			*
Real Estate Investing		0.7			0.3			0.2			133	%		*
Merchant Banking		0.0			0.2			(1.7	)		*			*
Total net flows	$	0.2		$	14.5		$	1.4			(99	%)		(86	%)
Assets under management or supervision by asset class (3)
Traditional Asset Management
Equity	$	117		$	104		$	116			13	%		1	%
Fixed Income		58			57			61			2	%		(5	%)
Liquidity		75			74			55			1	%		36	%
Alternatives		26			25			18			4	%		44	%
Total Traditional Asset Management		276			260			250			6	%		10	%
Real Estate Investing		19			18			17			6	%		12	%
Merchant Banking		9			9			9			--			--
Total Assets Under Management or Supervision	$	304		$	287		$	276			6	%		10	%
Share of minority stake assets		6			6			8			--			(25	%)

Notes:	-	The alternatives asset class includes a range of investment products such as funds of hedge funds, funds of private equity funds and funds of real estate funds.
	-	The share of minority stake assets represents Asset Management's proportional share of assets managed by entities in which it owns a minority stake.
	-	Refer to End Notes on pages 15-16 and Legal Notice on page 17.

12

This page represents an addendum to the 1Q 2012 Financial Supplement, Appendix I

MORGAN STANLEY
Country Risk Exposure (1) - European Peripherals and France
Three Months Ended March 31, 2012
(unaudited, dollars in millions)
				Net								Exposure
	Net			Counterparty		Funded		Unfunded		CDS		Before
	Inventory (2)			Exposure (3)		Lending		Commitments		Adjustment (4)		Hedges			Hedges (5)			Net Exposure
Greece
Sovereigns	$	18		$	17	$	-	$	-	$	-	$	35		$	-		$	35
Non-sovereigns		40			6		78		-		-		124			(64	)		60
Sub-total		58			23		78		-		-		159			(64	)		95
Ireland
Sovereigns		33			3		-		-		4		40			(2	)		38
Non-sovereigns		130			23		68		8		17		246			(20	)		226
Sub-total		163			26		68		8		21		286			(22	)		264
Italy
Sovereigns		(829	)		521		-		-		470		162			(338	)		(176	)
Non-sovereigns		267			551		336		387		186		1,727			(678	)		1,049
Sub-total		(562	)		1,072		336		387		656		1,889			(1,016	)		873
Spain
Sovereigns		(653	)		5		-		-		509		(139	)		(16	)		(155	)
Non-sovereigns		160			459		68		833		240		1,760			(290	)		1,470
Sub-total		(493	)		464		68		833		749		1,621			(306	)		1,315
Portugal
Sovereigns		(416	)		132		-		-		24		(260	)		(100	)		(360	)
Non-sovereigns		76			52		132		-		55		315			(92	)		223
Sub-total		(340	)		184		132		-		79		55			(192	)		(137	)
Total Euro Peripherals (6)
Sovereigns		(1,847	)		678		-		-		1,007		(162	)		(456	)		(618	)
Non-sovereigns		673			1,091		682		1,228		498		4,172			(1,144	)		3,028
Sub-total		(1,174	)		1,769		682		1,228		1,505		4,010			(1,600	)		2,410
France (6)
Sovereigns		555			252		-		-		13		820			(278	)		542
Non-sovereigns		(2	)		2,728		457		1,577		410		5,170			(1,571	)		3,599
Sub-total	$	553		$	2,980	$	457	$	1,577	$	423	$	5,990		$	(1,849	)	$	4,141

(1)	Country risk exposure is measured in accordance with the Firm’s internal risk management standards and includes obligations from sovereign and non-sovereigns, which includes governments, corporations, clearinghouses and financial institutions.
(2)	Net inventory representing exposure to both long and short single name positions (i.e., bonds and equities at fair value and CDS based on notional amount assuming zero recovery adjusted for any fair value receivable or payable).
(3)	Net counterparty exposure (i.e., repurchase transactions, securities lending and OTC derivatives) taking into consideration legally enforceable master netting agreements and collateral.
(4)	CDS adjustment represents credit protection purchased from European peripheral banks on European peripheral sovereign and financial institution risk, or French banks on French sovereign and financial institution risk. Based on the CDS notional amount assuming zero recovery adjusted for any fair value receivable or payable.
(5)	Represents CDS hedges on net counterparty exposure and funded lending. Based on the CDS notional amount assuming zero recovery adjusted for any fair value receivable or payable.
(6)	In addition, at March 31, 2012, the Firm had European Peripherals and French exposure for overnight deposits with banks of approximately $222 million and $23 million, respectively.
	- Refer to Legal Notice on page 17.

13

This page represents an addendum to the 1Q 2012 Financial Supplement, Appendix II

MORGAN STANLEY
Earnings Per Share Calculation Under Two-Class Method
Three Months Ended March 31, 2012
(unaudited, in millions, except for per share data)
	Allocation of net income from continuing operations
	(A)	(B)	(C)	(D)	(E)	(F)		(G)
						(D)+(E)		(F)/(A)
	Weighted Average # of Shares	% Allocation (2)	Net income from continuing operations applicable to Morgan Stanley (3)	Distributed Earnings (4)	Undistributed Earnings (5)	Total Earnings Allocated		Basic EPS (8)
Basic Common Shares	1,877	99%		$94	($197)	($103)	(6)	($0.05)
Participating Restricted Stock Units (1)	11	1%		$1	$0	$1	(7)	N/A
	1,888	100%	($102)	$95	($197)	($102)
	Allocation of gain (loss) from discontinued operations
	(A)	(B)	(C)	(D)	(E)	(F)		(G)
						(D)+(E)		(F)/(A)
	Weighted Average # of Shares	% Allocation (2)	Gain (loss) from Discontinued Operations Applicable to Common Shareholders, after Tax (3)	Distributed Earnings (4)	Undistributed Earnings (5)	Total Earnings Allocated		Basic EPS (8)
Basic Common Shares	1,877	99%		$0	($16)	($16)	(6)	($0.01)
Participating Restricted Stock Units (1)	11	1%		$0	$0	$0	(7)	N/A
	1,888	100%	($16)	$0	($16)	($16)
	Allocation of net income applicable to common shareholders
	(A)	(B)	(C)	(D)	(E)	(F)		(G)
						(D)+(E)		(F)/(A)
	Weighted Average # of Shares	% Allocation (2)	Net income applicable to Morgan Stanley (3)	Distributed Earnings (4)	Undistributed Earnings (5)	Total Earnings Allocated		Basic EPS (8)
Basic Common Shares	1,877	99%		$94	($213)	($119)	(6)	($0.06)
Participating Restricted Stock Units (1)	11	1%		$1	$0	$1	(7)	N/A
	1,888	100%	($118)	$95	($213)	($118)

Note: - Refer to End Notes on pages 15-16 and Legal Notice on page 17.

14

MORGAN STANLEY

End Notes

Page 4:
(1)	Reflects the regional view of the Firm'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 business which is based on asset location.
(2)	Risk weighted assets (RWA) are calculated in accordance with the regulatory capital requirements of the Federal Reserve. RWAs reflect both on
	and off-balance sheet risk of the Firm. Market RWAs reflect capital charges attributable to the risk of loss resulting from adverse changes
	in market prices and other factors. Credit RWAs reflect capital charges attributable to the risk of loss arising from a borrower or counterparty
	failing to meet its financial obligations.
(3)	Goodwill and intangible balances net of allowable mortgage servicing rights deduction for quarters ended March 31, 2012, December 31, 2011
	and March 31, 2011 of $89 million, $120 million and $130 million, respectively.
(4)	In accordance with the Federal Reserve Board's formalized definition as of December 30, 2011, Tier 1 common capital is defined as Tier 1
	capital less non-common elements in Tier 1 capital, including perpetual preferred stock and related surplus, minority interest in subsidiaries, trust
	preferred securities and mandatory convertible preferred securities. Prior periods have been recast to conform to this definition. This computation
	is a preliminary estimate as of April 19, 2012 (the date of this release) and could be subject to revision in Morgan Stanley's Quarterly Report on
	Form 10-Q for the quarter ended March 31, 2012.
(5)	Tier 1 capital consists predominately of common shareholders' equity as well as qualifying preferred stock and qualifying restricted core capital
	elements (trust preferred securities and noncontrolling interests) less goodwill, non-servicing intangible assets (excluding allowable mortgage
	servicing rights), net deferred tax assets (recoverable in excess of one year), an after-tax debt valuation adjustment and certain other deductions,
	including equity investments. This computation is a preliminary estimate as of April 19, 2012 (the date of this release) and could be subject to
	revision in Morgan Stanley’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2012.
Page 5:
(1)	The Firm’s capital estimation is based on the Required Capital framework, an internal capital adequacy measure which considers a risk-based
	going concern capital after absorbing potential losses from extreme stress events at a point in time. Beginning in the quarter ended March 31,
	2012, the Firm's Required Capital is met by Tier 1 common capital.  Tier 1 common capital and common equity attribution to business segment is
	based on capital usage calculated by the framework.  The difference between the Firm's Tier 1 common capital and aggregate Required Capital is
	the Firm's Parent capital. The Firm generally holds parent capital for prospective regulatory requirements, including Basel III, organic growth,
	acquisitions and other capital needs.  The Required Capital framework will continue to evolve over time in response to changes in the business
	and regulatory environment and to incorporate enhancements in modeling techniques.
Page 7:
(1)	Represents the loss amount that one would not expect to exceed, on average, more than five times every one hundred trading days in
	the Firm's trading positions if the portfolio were held constant for a one-day period.  Trading VaR for all primary market risk categories
	has been recast for all periods to exclude Credit Portfolio VaR which includes mark-to-market relationship lending exposures and associated
	hedges as well as counterparty credit risk valuation adjustments including its related hedges. Credit Portfolio VaR is disclosed as a separate
	category.  The Firm considers this new allocation method to be a more transparent view of the Firm's traded market risk.  For further
	discussion of the calculation of VaR and the limitations of the Firm's VaR methodology, see Part II, Item 7A "Quantitative and Qualitative
	Disclosures about Market Risk" included in the Firm's 10-K for the year ended December 31, 2011.
Page 11:
(1)	The quarters ended March 31, 2012, December 31, 2011 and March 31, 2011 include investment gains (losses) for certain funds
	included in the Firm's consolidated financial statements.  The limited partnership interests in these gains were reported in net income (loss)
	applicable to noncontrolling interests.
Page 12:
(1)	Real Estate Investing revenues include gains or losses related to principal investments held by certain consolidated real estate funds.
	These gains or losses are offset in the net income (loss) applicable to noncontrolling interest. The investment gains (losses) for the
	quarters ended March 31, 2012, December 31, 2011 and March 31, 2011 are $67 million, $45 million and $42 million, respectively.

15

MORGAN STANLEY

End Notes

(2)	Net Flows by region [inflow / (outflow)] for the quarters ended March 31, 2012, December 31, 2011 and March 31, 2011 are:
	North America: $(2.5) billion, $8.6 billion and $0.1 billion
	International: $2.7 billion, $5.9 billion and $1.3 billion
(3)	Assets under management or supervision by region for the quarters ended March 31, 2012, December 31, 2011 and
	March 31, 2011 are:
	North America: $195 billion, $187 billion and $176 billion
	International: $109 billion, $100 billion and $100 billion

Page 14:
(1)	Unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid)
	are participating securities and are included in the computation of EPS pursuant to the two-class method.  Restricted Stock Units ("RSUs")
	that pay dividend equivalents subject to vesting are not deemed participating securities and are included in diluted shares outstanding
	(if dilutive) under the treasury stock method.
(2)	The percentage of weighted basic common shares and participating RSUs to the total weighted average of basic common shares
	and participating RSUs.
(3)	Represents net income from continuing operations, gain (loss) from discontinued operations (after tax), and net income applicable
	to Morgan Stanley for the quarter ended March 31, 2012 prior to allocations to participating RSUs.
(4)	Distributed earnings represent the dividends declared on common shares and participating RSUs for the quarter ended March 31, 2012.
	The amount of dividends declared is based upon the number of common shares outstanding as of the dividend record date. During
	the quarter ended March 31, 2012, a $0.05 dividend was declared on common shares outstanding and participating RSUs.
(5)	The two-class method assumes all of the earnings for the reporting period are distributed and allocates to the participating RSUs
	what they would be entitled to based on their contractual rights and obligations of the participating security.
(6)	Total income applicable to common shareholders to be allocated to the common shares in calculating basic and diluted EPS for
	common shares.
(7)	Total income applicable to common shareholders to be allocated to the participating RSUs reflected as a deduction to the numerator in
	determining basic and diluted EPS for common shares.
(8)	Basic and diluted EPS data are required to be presented only for classes of common stock, as described under the accounting guidance
	for earnings per share.

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 Firm's first quarter earnings press release issued April 19, 2012.

17