EX-99.2 3 a51589641ex99_2.htm EXHIBIT 99.2
Exhibit 99.2

   
Quarterly Financial Supplement - 2Q 2017
  
     
     
     
     
     
   
Page #
     
 
Consolidated Financial Summary 
1
 
Consolidated Income Statement Information 
2
 
Consolidated Financial Information and Statistical Data 
3
 
Consolidated Return on Average Common Equity and Regulatory Capital Information
4
 
Consolidated Loans and Lending Commitments 
5
 
Institutional Securities Income Statement Information 
6
 
Institutional Securities Financial Information and Statistical Data 
7
 
Wealth Management Income Statement Information 
8
 
Wealth Management Financial Information and Statistical Data 
9
 
Investment Management Income Statement Information 
10
 
Investment Management Financial Information and Statistical Data 
11
 
U.S. Bank Supplemental Financial Information 
12
 
End Notes 
13
 
Definition of U.S. GAAP to Non-GAAP Measures and Performance Metrics 
14 - 15
 
Legal Notice 
16
 
 
 
 
                                             
Consolidated Financial Summary
                                            
(unaudited, dollars in millions, except for per share data)
                                            
                                                 
                                                 
   
Quarter Ended
    
Percentage Change From:
    
Six Months Ended
    
Percentage
  
   
June 30, 2017
    
Mar 31, 2017
    
June 30, 2016
    
Mar 31, 2017
    
June 30, 2016
    
June 30, 2017
    
June 30, 2016
    
Change
  
Net revenues
                                                
Institutional Securities
  
$
4,762
    
$
5,152
    
$
4,578
      
(8
%)
    
4
%
  
$
9,914
    
$
8,292
      
20
%
Wealth Management
    
4,151
      
4,058
      
3,811
      
2
%
    
9
%
    
8,209
      
7,479
      
10
%
Investment Management
    
665
      
609
      
583
      
9
%
    
14
%
    
1,274
      
1,060
      
20
%
Intersegment Eliminations
    
(75
)
    
(74
)
    
(63
)
    
(1
%)
    
(19
%)
    
(149
)
    
(130
)
    
(15
%)
Net revenues
  
$
9,503
    
$
9,745
    
$
8,909
      
(2
%)
    
7
%
  
$
19,248
    
$
16,701
      
15
%
                                                                 
Income (loss) from continuing operations before tax
                                                  
Institutional Securities
  
$
1,443
    
$
1,730
    
$
1,506
      
(17
%)
    
(4
%)
  
$
3,173
    
$
2,414
      
31
%
Wealth Management
    
1,057
      
973
      
859
      
9
%
    
23
%
    
2,030
      
1,645
      
23
%
Investment Management
    
142
      
103
      
118
      
38
%
    
20
%
    
245
      
162
      
51
%
Intersegment Eliminations
    
0
      
2
      
0
      
*
      
--
      
2
      
0
      
*
  
Income (loss) from continuing operations before tax
  
$
2,642
    
$
2,808
    
$
2,483
      
(6
%)
    
6
%
  
$
5,450
    
$
4,221
      
29
%
                                                                 
Net Income (loss) applicable to Morgan Stanley
                                                         
Institutional Securities
  
$
992
    
$
1,214
    
$
988
      
(18
%)
    
--
    
$
2,206
    
$
1,579
      
40
%
Wealth Management
    
665
      
647
      
516
      
3
%
    
29
%
    
1,312
      
1,009
      
30
%
Investment Management
    
100
      
67
      
78
      
49
%
    
28
%
    
167
      
128
      
30
%
Intersegment Eliminations
    
0
      
2
      
0
      
*
      
--
      
2
      
0
      
*
  
Net Income (loss) applicable to Morgan Stanley
  
$
1,757
    
$
1,930
    
$
1,582
      
(9
%)
    
11
%
  
$
3,687
    
$
2,716
      
36
%
Earnings (loss) applicable to Morgan Stanley common shareholders
  
$
1,587
    
$
1,840
    
$
1,425
      
(14
%)
    
11
%
  
$
3,427
    
$
2,481
      
38
%
                                                                 
Financial Metrics:
                                                                
                                                                 
Earnings per basic share
  
$
0.89
    
$
1.02
    
$
0.76
      
(13
%)
    
17
%
  
$
1.91
    
$
1.32
      
45
%
Earnings per diluted share
  
$
0.87
    
$
1.00
    
$
0.75
      
(13
%)
    
16
%
  
$
1.87
    
$
1.30
      
44
%
                                                                 
Return on average common equity
    
9.1
%
    
10.7
%
    
8.3
%
                    
9.9
%
    
7.2
%
        
Return on average common equity excluding DVA
    
9.0
%
    
10.6
%
    
8.3
%
                    
9.8
%
    
7.2
%
        
                                                                 
Book value per common share
  
$
38.22
    
$
37.48
    
$
36.29
                    
$
38.22
    
$
36.29
          
Tangible book value per common share
  
$
33.24
    
$
32.49
    
$
31.39
                    
$
33.24
    
$
31.39
          
                                                                 
 
Notes:
- Refer to End Notes, U.S. GAAP to Non-GAAP Measures, Definition of Performance Metrics and Legal Notice on pages 13 - 16. 
 
1
 
                                             
Consolidated Income Statement Information
                                            
(unaudited, dollars in millions)
                                                
                                                 
   
Quarter Ended
    
Percentage Change From:
    
Six Months Ended
    
Percentage
  
   
June 30, 2017
    
Mar 31, 2017
    
June 30, 2016
    
Mar 31, 2017
    
June 30, 2016
    
June 30, 2017
    
June 30, 2016
    
Change
  
Revenues:
                                                
Investment banking
  
$
1,530
    
$
1,545
    
$
1,224
      
(1
%)
    
25
%
  
$
3,075
    
$
2,331
      
32
%
Trading
    
2,931
      
3,235
      
2,746
      
(9
%)
    
7
%
    
6,166
      
4,811
      
28
%
Investments
    
163
      
165
      
126
      
(1
%)
    
29
%
    
328
      
92
      
*
  
Commissions and fees
    
1,027
      
1,033
      
1,020
      
(1
%)
    
1
%
    
2,060
      
2,075
      
(1
%)
Asset management, distribution and admin. fees
    
2,902
      
2,767
      
2,637
      
5
%
    
10
%
    
5,669
      
5,257
      
8
%
Other
    
199
      
229
      
243
      
(13
%)
    
(18
%)
    
428
      
323
      
33
%
Total non-interest revenues
    
8,752
      
8,974
      
7,996
      
(2
%)
    
9
%
    
17,726
      
14,889
      
19
%
                                                                 
Interest income
    
2,106
      
1,965
      
1,667
      
7
%
    
26
%
    
4,071
      
3,414
      
19
%
Interest expense
    
1,355
      
1,194
      
754
      
13
%
    
80
%
    
2,549
      
1,602
      
59
%
Net interest
    
751
      
771
      
913
      
(3
%)
    
(18
%)
    
1,522
      
1,812
      
(16
%)
Net revenues
    
9,503
      
9,745
      
8,909
      
(2
%)
    
7
%
    
19,248
      
16,701
      
15
%
Non-interest expenses:
                                                                
Compensation and benefits
    
4,252
      
4,466
      
4,015
      
(5
%)
    
6
%
    
8,718
      
7,698
      
13
%
                                                                 
Non-compensation expenses:
                                                                
Occupancy and equipment
    
333
      
327
      
329
      
2
%
    
1
%
    
660
      
658
      
--
  
Brokerage, clearing and exchange fees
    
525
      
509
      
484
      
3
%
    
8
%
    
1,034
      
949
      
9
%
Information processing and communications
    
433
      
428
      
429
      
1
%
    
1
%
    
861
      
871
      
(1
%)
Marketing and business development
    
155
      
136
      
154
      
14
%
    
1
%
    
291
      
288
      
1
%
Professional services
    
561
      
527
      
547
      
6
%
    
3
%
    
1,088
      
1,061
      
3
%
Other
    
602
      
544
      
468
      
11
%
    
29
%
    
1,146
      
955
      
20
%
Total non-compensation expenses 
    
2,609
      
2,471
      
2,411
      
6
%
    
8
%
    
5,080
      
4,782
      
6
%
                                                                 
Total non-interest expenses
    
6,861
      
6,937
      
6,426
      
(1
%)
    
7
%
    
13,798
      
12,480
      
11
%
                                                                 
Income (loss) from continuing operations before taxes
    
2,642
      
2,808
      
2,483
      
(6
%)
    
6
%
    
5,450
      
4,221
      
29
%
Income tax provision / (benefit) from continuing operations (1)
    
846
      
815
      
833
      
4
%
    
2
%
    
1,661
      
1,411
      
18
%
Income (loss) from continuing operations
    
1,796
      
1,993
      
1,650
      
(10
%)
    
9
%
    
3,789
      
2,810
      
35
%
Gain (loss) from discontinued operations after tax
    
(5
)
    
(22
)
    
(4
)
    
77
%
    
(25
%)
    
(27
)
    
(7
)
    
*
  
Net income (loss)
  
$
1,791
    
$
1,971
    
$
1,646
      
(9
%)
    
9
%
  
$
3,762
    
$
2,803
      
34
%
Net income applicable to nonredeemable noncontrolling interests
    
34
      
41
      
64
      
(17
%)
    
(47
%)
    
75
      
87
      
(14
%)
Net income (loss) applicable to Morgan Stanley
    
1,757
      
1,930
      
1,582
      
(9
%)
    
11
%
    
3,687
      
2,716
      
36
%
Preferred stock dividend / Other
    
170
      
90
      
157
      
89
%
    
8
%
    
260
      
235
      
11
%
Earnings (loss) applicable to Morgan Stanley common shareholders
  
$
1,587
    
$
1,840
    
$
1,425
      
(14
%)
    
11
%
  
$
3,427
    
$
2,481
      
38
%
                                                                 
Pre-tax profit margin
    
28
%
    
29
%
    
28
%
                    
28
%
    
25
%
        
Compensation and benefits as a % of net revenues
    
45
%
    
46
%
    
45
%
                    
45
%
    
46
%
        
Non-compensation expenses as a % of net revenues
    
27
%
    
25
%
    
27
%
                    
26
%
    
29
%
        
Effective tax rate from continuing operations (1)
    
32.0
%
    
29.0
%
    
33.5
%
                    
30.5
%
    
33.4
%
        
                                                                 
 
Notes:   
- Refer to End Notes, U.S. GAAP to Non-GAAP Measures, Definition of Performance Metrics and Legal Notice on pages 13 - 16. 
 
2
 
                                       
Consolidated Financial Information and Statistical Data
                                      
(unaudited, dollars in millions)
                                                
                                                 
   
Quarter Ended
    
Percentage Change From:
    
Six Months Ended
    
Percentage
  
   
June 30, 2017
    
Mar 31, 2017
    
June 30, 2016
    
Mar 31, 2017
    
June 30, 2016
    
June 30, 2017
    
June 30, 2016
    
Change
  
                                                 
Regional revenues
                                                
Americas
  
$
6,746
    
$
7,088
    
$
6,538
      
(5
%)
    
3
%
  
$
13,834
    
$
12,290
      
13
%
EMEA (Europe, Middle East, Africa)
    
1,606
      
1,489
      
1,312
      
8
%
    
22
%
    
3,095
      
2,441
      
27
%
Asia
    
1,151
      
1,168
      
1,059
      
(1
%)
    
9
%
    
2,319
      
1,970
      
18
%
Consolidated net revenues
  
$
9,503
    
$
9,745
    
$
8,909
      
(2
%)
    
7
%
  
$
19,248
    
$
16,701
      
15
%
                                                                 
Firm Expense Efficiency Ratio
    
72
%
    
71
%
    
72
%
                                        
                                                                 
Balance sheet
                                                                
Deposits
  
$
144,913
    
$
152,109
    
$
152,693
      
(5
%)
    
(5
%)
                        
Total Assets
  
$
841,016
    
$
832,391
    
$
828,873
      
1
%
    
1
%
                        
Global liquidity reserve
  
$
188,296
    
$
197,647
    
$
207,455
      
(5
%)
    
(9
%)
                        
Long-term debt outstanding
  
$
184,112
    
$
172,688
    
$
163,492
      
7
%
    
13
%
                        
Maturities of long-term debt outstanding (next 12 months)
  
$
28,823
    
$
23,239
    
$
24,244
      
24
%
    
19
%
                        
                                                                 
Common equity
  
$
70,306
    
$
69,404
    
$
69,596
      
1
%
    
1
%
                        
Less: Goodwill and intangible assets
    
(9,156
)
    
(9,229
)
    
(9,411
)
    
(1
%)
    
(3
%)
                        
Tangible common equity
  
$
61,150
    
$
60,175
    
$
60,185
      
2
%
    
2
%
                        
                                                                 
Preferred equity
  
$
8,520
    
$
8,520
    
$
7,520
      
--
      
13
%
                        
Junior subordinated debt issued to capital trusts (1)
  
$
-
    
$
-
    
$
2,853
      
--
      
*
                          
                                                                 
                                                                 
Period end common shares outstanding (millions)
    
1,840
      
1,852
      
1,918
      
(1
%)
    
(4
%)
                        
Average common shares outstanding (millions)
                                                          
Basic
    
1,791
      
1,801
      
1,866
      
(1
%)
    
(4
%)
    
1,796
      
1,875
      
(4
%)
Diluted
    
1,830
      
1,842
      
1,899
      
(1
%)
    
(4
%)
    
1,836
      
1,907
      
(4
%)
                                                                 
Worldwide employees
    
56,187
      
55,607
      
54,529
      
1
%
    
3
%
                        
                                                                 
 
Notes:
 - Refer to End Notes, U.S. GAAP to Non-GAAP Measures, Definition of Performance Metrics and Legal Notice on pages 13 - 16. 
 
3
 
                     
Consolidated Return on Average Common Equity and Regulatory Capital Information
                    
(unaudited)
                              
                               
   
Quarter Ended
    
Six Months Ended
  
   
June 30, 2017
    
Mar 31, 2017
    
June 30, 2016
    
June 30, 2017
    
June 30, 2016
  
Average Common Equity (billions)
                              
Institutional Securities
  
$
40.2
    
$
40.2
    
$
43.2
    
$
40.2
    
$
43.2
  
Wealth Management
    
17.2
      
17.2
      
15.3
      
17.2
      
15.3
  
Investment Management
    
2.4
      
2.4
      
2.8
      
2.4
      
2.8
  
Parent
    
10.1
      
9.2
      
7.7
      
9.7
      
7.3
  
Firm
  
$
69.9
    
$
69.0
    
$
69.0
    
$
69.5
    
$
68.6
  
                                         
Return on average Common Equity
                                        
Institutional Securities
    
9
%
    
11
%
    
8
%
    
10
%
    
6
%
Wealth Management
    
15
%
    
15
%
    
13
%
    
15
%
    
13
%
Investment Management
    
16
%
    
11
%
    
11
%
    
14
%
    
9
%
Firm
    
9
%
    
11
%
    
8
%
    
10
%
    
7
%
                                         
                                         
Regulatory Capital (millions)
                                        
                                         
Common Equity Tier 1 capital (Transitional)
  
$
61,459
    
$
60,414
    
$
59,796
                  
Tier 1 capital (Transitional)
  
$
70,178
    
$
69,136
    
$
66,782
                  
                                         
Standardized Approach (Transitional)
                                        
Risk-weighted assets
  
$
369,672
    
$
345,131
    
$
342,504
                  
Common Equity Tier 1 capital ratio
    
16.6
%
    
17.5
%
    
17.5
%
                
Tier 1 capital ratio
    
19.0
%
    
20.0
%
    
19.5
%
                
Tier 1 leverage ratio
    
8.5
%
    
8.5
%
    
8.3
%
                
                                         
Advanced Approach (Transitional)
                                        
Risk-weighted assets
  
$
370,514
    
$
347,472
    
$
355,982
                  
Common Equity Tier 1 capital ratio
    
16.6
%
    
17.4
%
    
16.8
%
                
Tier 1 capital ratio
    
18.9
%
    
19.9
%
    
18.8
%
                
Supplementary Leverage Ratio
    
6.5
%
    
6.5
%
    
6.3
%
                
                                         
Pro-forma Fully Phased-in
                                        
Pro-forma Common Equity Tier 1 capital ratio (Standardized Approach)
    
16.0
%
    
16.7
%
    
16.3
%
                
Pro-forma Common Equity Tier 1 capital ratio (Advanced Approach)
    
15.9
%
    
16.6
%
    
15.7
%
                
Pro-forma Supplementary Leverage Ratio (Advanced Approach)
    
6.4
%
    
6.4
%
    
6.1
%
                
                                         
 
Notes:
  
- Refer to End Notes, U.S. GAAP to Non-GAAP Measures, Definition of Performance Metrics and Legal Notice on pages 13 - 16.
  
 
4
 
                               
Consolidated Loans and Lending Commitments
                              
(unaudited, dollars in billions)
                              
                               
                               
   
Quarter Ended
    
Percentage Change From:
  
   
June 30, 2017
    
Mar 31, 2017
    
June 30, 2016
    
Mar 31, 2017
    
June 30, 2016
  
                               
Institutional Securities
                              
                               
Corporate loans (1)
  
$
12.5
    
$
14.3
    
$
19.9
      
(13
%)
    
(37
%)
                                         
Corporate lending commitments (2)
    
82.1
      
83.7
      
83.8
      
(2
%)
    
(2
%)
                                         
Corporate Loans and Lending Commitments (3)
    
94.6
      
98.0
      
103.7
      
(3
%)
    
(9
%)
                                         
Other loans
    
29.3
      
28.3
      
28.3
      
4
%
    
4
%
                                         
Other lending commitments
    
6.7
      
5.0
      
4.2
      
34
%
    
60
%
                                         
Other Loans and Lending Commitments (4)
    
36.0
      
33.3
      
32.5
      
8
%
    
11
%
                                         
Institutional Securities Loans and Lending Commitments (5)
  
$
130.6
    
$
131.3
    
$
136.2
      
(1
%)
    
(4
%)
                                         
                                         
Wealth Management
                                        
                                         
Loans
    
65.1
      
61.6
      
54.3
      
6
%
    
20
%
                                         
Lending commitments
    
9.1
      
8.7
      
7.0
      
5
%
    
30
%
                                         
Wealth Management Loans and Lending Commitments (6)
  
$
74.2
    
$
70.3
    
$
61.3
      
6
%
    
21
%
                                         
Consolidated Loans and Lending Commitments (7)
  
$
204.8
    
$
201.6
    
$
197.5
      
2
%
    
4
%
                                         
 
Notes:
- Refer to End Notes, U.S. GAAP to Non-GAAP Measures, Definition of Performance Metrics and Legal Notice on pages 13 - 16. 
 
5
 
                                                 
Institutional Securities
                                                
Income Statement Information
                                                
(unaudited, dollars in millions)
                                                
   
Quarter Ended
    
Percentage Change From:
    
Six Months Ended
    
Percentage
  
   
June 30, 2017
    
Mar 31, 2017
    
June 30, 2016(1)
    
Mar 31, 2017
  
June 30, 2016
    
June 30, 2017
    
June 30, 2016(1)
    
Change
  
Revenues:
                                                
Investment banking
  
$
1,413
    
$
1,417
    
$
1,108
      
--
      
28
%
  
$
2,830
    
$
2,098
      
35
%
Trading
    
2,725
      
3,012
      
2,498
      
(10
%)
    
9
%
    
5,737
      
4,389
      
31
%
Investments
    
37
      
66
      
76
      
(44
%)
    
(51
%)
    
103
      
108
      
(5
%)
Commissions and fees
    
630
      
620
      
607
      
2
%
    
4
%
    
1,250
      
1,262
      
(1
%)
Asset management, distribution and admin. fees
    
89
      
91
      
69
      
(2
%)
    
29
%
    
180
      
142
      
27
%
Other
    
126
      
173
      
138
      
(27
%)
    
(9
%)
    
299
      
142
      
111
%
Total non-interest revenues
    
5,020
      
5,379
      
4,496
      
(7
%)
    
12
%
    
10,399
      
8,141
      
28
%
                                                                 
Interest income
    
1,243
      
1,124
      
966
      
11
%
    
29
%
    
2,367
      
2,019
      
17
%
Interest expense
    
1,501
      
1,351
      
884
      
11
%
    
70
%
    
2,852
      
1,868
      
53
%
Net interest
    
(258
)
    
(227
)
    
82
      
(14
%)
    
*
      
(485
)
    
151
      
*
  
Net revenues
    
4,762
      
5,152
      
4,578
      
(8
%)
    
4
%
    
9,914
      
8,292
      
20
%
                                                                 
Compensation and benefits
    
1,667
      
1,870
      
1,625
      
(11
%)
    
3
%
    
3,537
      
3,007
      
18
%
Non-compensation expenses
    
1,652
      
1,552
      
1,447
      
6
%
    
14
%
    
3,204
      
2,871
      
12
%
Total non-interest expenses
    
3,319
      
3,422
      
3,072
      
(3
%)
    
8
%
    
6,741
      
5,878
      
15
%
                                                                 
                                                                 
Income (loss) from continuing operations before taxes
    
1,443
      
1,730
      
1,506
      
(17
%)
    
(4
%)
    
3,173
      
2,414
      
31
%
Income tax provision / (benefit) from continuing operations
    
413
      
459
      
453
      
(10
%)
    
(9
%)
    
872
      
728
      
20
%
Income (loss) from continuing operations
    
1,030
      
1,271
      
1,053
      
(19
%)
    
(2
%)
    
2,301
      
1,686
      
36
%
Gain (loss) from discontinued operations after tax
   
(5
)
    
(22
)
    
(4
)
    
77
%
    
(25
%)
    
(27
)
    
(7
)
    
*
  
Net income (loss)
    
1,025
      
1,249
      
1,049
      
(18
%)
    
(2
%)
    
2,274
      
1,679
      
35
%
Net income applicable to nonredeemable noncontrolling interests
    
33
      
35
      
61
      
(6
%)
    
(46
%)
    
68
      
100
      
(32
%)
Net income (loss) applicable to Morgan Stanley
  
$
992
    
$
1,214
    
$
988
      
(18
%)
    
--
    
$
2,206
    
$
1,579
      
40
%
                                                                 
                                                                 
Pre-tax profit margin
    
30
%
    
34
%
    
33
%
                    
32
%
    
29
%
        
Compensation and benefits as a % of net revenues
    
35
%
    
36
%
    
35
%
                    
36
%
    
36
%
        
                                                                 
 
Notes:
- Refer to End Notes, U.S. GAAP to Non-GAAP Measures, Definition of Performance Metrics and Legal Notice on pages 13 - 16. 
 
6
 
                                                 
Institutional Securities
                                                
Financial Information and Statistical Data
                                
(unaudited, dollars in millions)
                                            
                                                 
   
Quarter Ended
    
Percentage Change From:
    
Six Months Ended
    
Percentage
  
   
June 30, 2017
    
Mar 31, 2017
    
June 30, 2016
    
Mar 31, 2017
    
June 30, 2016
    
June 30, 2017
    
June 30, 2016
    
Change
  
Investment Banking
                                                
Advisory revenues
  
$
504
    
$
496
    
$
497
      
2
%
    
1
%
  
$
1,000
    
$
1,088
      
(8
%)
Underwriting revenues
                                                                
Equity
    
405
      
390
      
266
      
4
%
    
52
%
    
795
      
426
      
87
%
Fixed income
    
504
      
531
      
345
      
(5
%)
    
46
%
    
1,035
      
584
      
77
%
Total underwriting revenues
    
909
      
921
      
611
      
(1
%)
    
49
%
    
1,830
      
1,010
      
81
%
                                                                 
Total investment banking revenues
  
$
1,413
    
$
1,417
    
$
1,108
      
--
      
28
%
  
$
2,830
    
$
2,098
      
35
%
                                                                 
Sales & Trading
                                                                
Equity
  
$
2,155
    
$
2,016
    
$
2,145
      
7
%
    
--
    
$
4,171
    
$
4,201
      
(1
%)
Fixed Income
    
1,239
      
1,714
      
1,297
      
(28
%)
    
(4
%)
    
2,953
      
2,170
      
36
%
Other
    
(208
)
    
(234
)
    
(186
)
    
11
%
    
(12
%)
    
(442
)
    
(427
)
    
(4
%)
                                                                 
Total sales & trading net revenues
  
$
3,186
    
$
3,496
    
$
3,256
      
(9
%)
    
(2
%)
  
$
6,682
    
$
5,944
      
12
%
                                                                 
Investments & Other
                                                                
Investments
  
$
37
    
$
66
    
$
76
      
(44
%)
    
(51
%)
  
$
103
    
$
108
      
(5
%)
Other
    
126
      
173
      
138
      
(27
%)
    
(9
%)
    
299
      
142
      
111
%
Total investments & other revenues
  
$
163
    
$
239
    
$
214
      
(32
%)
    
(24
%)
  
$
402
    
$
250
      
61
%
                                                                 
Institutional Securities net revenues
  
$
4,762
    
$
5,152
    
$
4,578
      
(8
%)
    
4
%
  
$
9,914
    
$
8,292
      
20
%
                                                                 
                                                                 
Average Daily 95% / One-Day Value-at-Risk ("VaR")
                                                  
Primary Market Risk Category ($ millions, pre-tax)
                                                  
Interest rate and credit spread
  
$
35
    
$
30
    
$
32
                                          
Equity price
  
$
18
    
$
15
    
$
17
                                          
Foreign exchange rate
  
$
11
    
$
11
    
$
7
                                          
Commodity price
  
$
9
    
$
8
    
$
10
                                          
                                                                 
Aggregation of Primary Risk Categories
  
$
46
    
$
39
    
$
38
                                          
                                                                 
Credit Portfolio VaR
  
$
12
    
$
15
    
$
20
                                          
                                                                 
Trading VaR
  
$
51
    
$
44
    
$
46
                                          
                                                                 
 
Notes:
- Refer to End Notes, U.S. GAAP to Non-GAAP Measures, Definition of Performance Metrics and Legal Notice on pages 13 - 16. 
 
7
 
                                                 
Wealth Management
                                                
Income Statement Information
                                            
(unaudited, dollars in millions)
                                                
                                                 
                                                 
   
Quarter Ended
    
Percentage Change From:
    
Six Months Ended
    
Percentage
  
   
June 30, 2017
    
Mar 31, 2017
    
June 30, 2016(1)
    
Mar 31, 2017
  
June 30, 2016
    
June 30, 2017
    
June 30, 2016(1)
    
Change
  
Revenues:
                                                
Investment banking
  
$
135
    
$
145
    
$
123
      
(7
%)
    
10
%
  
$
280
    
$
244
      
15
%
Trading
    
207
      
238
      
252
      
(13
%)
    
(18
%)
    
445
      
446
      
--
  
Investments
    
1
      
1
      
0
      
--
      
*
      
2
      
(2
)
    
*
  
Commissions and fees
    
424
      
440
      
423
      
(4
%)
    
--
      
864
      
835
      
3
%
Asset management, distribution and admin. fees
    
2,302
      
2,184
      
2,082
      
5
%
    
11
%
    
4,486
      
4,136
      
8
%
Other
    
73
      
56
      
102
      
30
%
    
(28
%)
    
129
      
160
      
(19
%)
Total non-interest revenues
    
3,142
      
3,064
      
2,982
      
3
%
    
5
%
    
6,206
      
5,819
      
7
%
                                                                 
Interest income
    
1,114
      
1,079
      
920
      
3
%
    
21
%
    
2,193
      
1,834
      
20
%
Interest expense
    
105
      
85
      
91
      
24
%
    
15
%
    
190
      
174
      
9
%
Net interest
    
1,009
      
994
      
829
      
2
%
    
22
%
    
2,003
      
1,660
      
21
%
Net revenues
    
4,151
      
4,058
      
3,811
      
2
%
    
9
%
    
8,209
      
7,479
      
10
%
                                                                 
Compensation and benefits
    
2,297
      
2,317
      
2,152
      
(1
%)
    
7
%
    
4,614
      
4,240
      
9
%
Non-compensation expenses 
    
797
      
768
      
800
      
4
%
    
--
      
1,565
      
1,594
      
(2
%)
Total non-interest expenses
    
3,094
      
3,085
      
2,952
      
--
      
5
%
    
6,179
      
5,834
      
6
%
                                                                 
Income (loss) from continuing operations before taxes
    
1,057
      
973
      
859
      
9
%
    
23
%
    
2,030
      
1,645
      
23
%
Income tax provision / (benefit) from continuing operations
    
392
      
326
      
343
      
20
%
    
14
%
    
718
      
636
      
13
%
Income (loss) from continuing operations
    
665
      
647
      
516
      
3
%
    
29
%
    
1,312
      
1,009
      
30
%
Gain (loss) from discontinued operations after tax
    
0
      
0
      
0
      
--
      
--
      
0
      
0
      
--
  
Net income (loss)
    
665
      
647
      
516
      
3
%
    
29
%
    
1,312
      
1,009
      
30
%
Net income applicable to nonredeemable noncontrolling interests
    
-
      
-
      
-
      
--
      
--
      
-
      
-
      
--
  
Net income (loss) applicable to Morgan Stanley
  
$
665
    
$
647
    
$
516
      
3
%
    
29
%
  
$
1,312
    
$
1,009
      
30
%
                                                                 
Pre-tax profit margin
    
25
%
    
24
%
    
23
%
                    
25
%
    
22
%
        
Compensation and benefits as a % of net revenues
    
55
%
    
57
%
    
56
%
                    
56
%
    
57
%
        
                                                                 
 
Notes:    
 - Refer to End Notes, U.S. GAAP to Non-GAAP Measures, Definition of Performance Metrics and Legal Notice on pages 13 - 16. 
 
8
 
                               
Wealth Management
                              
Financial Information and Statistical Data
                    
(unaudited)
                              
                               
                               
                               
   
Quarter Ended
    
Percentage Change From:
  
   
June 30, 2017
    
Mar 31, 2017
    
June 30, 2016
    
Mar 31, 2017
    
June 30, 2016
  
                               
                               
Bank deposit program (billions)
  
$
139
    
$
149
    
$
150
      
(7
%)
    
(7
%)
                                         
Wealth Management Metrics
                                        
                                         
Wealth Management representatives
    
15,777
      
15,777
      
15,909
      
--
      
(1
%)
                                         
Annualized revenue per representative (000's)
  
$
1,052
    
$
1,029
    
$
959
      
2
%
    
10
%
                                         
Client assets (billions)
  
$
2,239
    
$
2,187
    
$
2,034
      
2
%
    
10
%
Client assets per representative (millions)
  
$
142
    
$
139
    
$
128
      
2
%
    
11
%
Client liabilities (billions)
  
$
77
    
$
74
    
$
69
      
4
%
    
12
%
                                         
Fee-based asset flows (billions)
  
$
19.9
    
$
18.8
    
$
12.0
      
6
%
    
66
%
Fee-based client account assets (billions)
  
$
962
    
$
927
    
$
820
      
4
%
    
17
%
Fee-based assets as a % of client assets
    
43
%
    
42
%
    
40
%
                
                                         
Retail locations
    
601
      
599
      
609
      
--
      
(1
%)
                                         
 
Notes:
- Refer to End Notes, U.S. GAAP to Non-GAAP Measures, Definition of Performance Metrics and Legal Notice on pages 13 - 16. 
 
9
 
                                                 
Investment Management
                                                
Income Statement Information
                                            
(unaudited, dollars in millions)
                                                
                                                 
                                                 
   
Quarter Ended
    
Percentage Change From:
    
Six Months Ended
    
Percentage
  
   
June 30, 2017
    
Mar 31, 2017
    
June 30, 2016
    
Mar 31, 2017
    
June 30, 2016
    
June 30, 2017
    
June 30, 2016
    
Change
  
Revenues:
                                                
Investment banking
  
$
-
    
$
-
    
$
-
      
--
      
--
    
$
-
    
$
1
      
*
  
Trading
    
(3
)
    
(11
)
    
5
      
73
%
    
*
      
(14
)
    
(5
)
    
(180
%)
Investments (1)
    
125
      
98
      
50
      
28
%
    
150
%
    
223
      
(14
)
    
*
  
Commissions and fees
    
0
      
0
      
0
      
--
      
--
      
0
      
3
      
*
  
Asset management, distribution and admin. fees
    
539
      
517
      
517
      
4
%
    
4
%
    
1,056
      
1,043
      
1
%
Other
    
4
      
4
      
9
      
--
      
(56
%)
    
8
      
31
      
(74
%)
Total non-interest revenues
    
665
      
608
      
581
      
9
%
    
14
%
    
1,273
      
1,059
      
20
%
                                                                 
Interest income
    
1
      
1
      
3
      
--
      
(67
%)
    
2
      
4
      
(50
%)
Interest expense
    
1
      
0
      
1
      
*
      
--
      
1
      
3
      
(67
%)
Net interest
    
0
      
1
      
2
      
*
      
*
      
1
      
1
      
--
  
Net revenues
    
665
      
609
      
583
      
9
%
    
14
%
    
1,274
      
1,060
      
20
%
                                                                 
Compensation and benefits
    
288
      
279
      
238
      
3
%
    
21
%
    
567
      
451
      
26
%
Non-compensation expenses 
    
235
      
227
      
227
      
4
%
    
4
%
    
462
      
447
      
3
%
Total non-interest expenses
    
523
      
506
      
465
      
3
%
    
12
%
    
1,029
      
898
      
15
%
                                                                 
Income (loss) from continuing operations before taxes
    
142
      
103
      
118
      
38
%
    
20
%
    
245
      
162
      
51
%
Income tax provision / (benefit) from continuing operations
    
41
      
30
      
37
      
37
%
    
11
%
    
71
      
47
      
51
%
Income (loss) from continuing operations
    
101
      
73
      
81
      
38
%
    
25
%
    
174
      
115
      
51
%
Gain (loss) from discontinued operations after tax
    
0
      
0
      
0
      
--
      
--
      
0
      
0
      
--
  
Net income (loss)
    
101
      
73
      
81
      
38
%
    
25
%
    
174
      
115
      
51
%
Net income applicable to nonredeemable noncontrolling interests
    
1
      
6
      
3
      
(83
%)
    
(67
%)
    
7
      
(13
)
    
*
  
Net income (loss) applicable to Morgan Stanley
  
$
100
    
$
67
    
$
78
      
49
%
    
28
%
  
$
167
    
$
128
      
30
%
                                                                 
Pre-tax profit margin
    
21
%
    
17
%
    
20
%
                    
19
%
    
15
%
        
Compensation and benefits as a % of net revenues
    
43
%
    
46
%
    
41
%
                    
45
%
    
43
%
        
                                                                 
 
Notes:     
 - Refer to End Notes, U.S. GAAP to Non-GAAP Measures, Definition of Performance Metrics and Legal Notice on pages 13 - 16. 
 
10
 
                                                 
Investment Management
                                                
Financial Information and Statistical Data
                                            
(unaudited)
                                                
                                                 
                                                 
   
Quarter Ended
    
Percentage Change From:
    
Six Months Ended
    
Percentage
  
   
June 30, 2017
    
Mar 31, 2017
    
June 30, 2016
    
Mar 31, 2017
    
June 30, 2016
    
June 30, 2017
    
June 30, 2016
    
Change
  
                                                 
Assets under management or supervision (billions)
                                            
                                                 
Net flows by asset class (1)
                                                
Equity
  
$
0.4
    
$
-
    
$
(1.4
)
    
*
      
*
    
$
0.4
    
$
(2.1
)
    
*
  
Fixed Income
    
2.0
      
-
      
(1.2
)
    
*
      
*
      
2.0
      
(2.0
)
    
*
  
Liquidity
    
(0.2
)
    
(10.0
)
    
2.4
      
98
%
    
*
      
(10.2
)
    
-
      
*
  
Alternative / Other products
    
0.3
      
1.8
      
(1.5
)
    
(83
%)
    
*
      
2.1
      
(1.2
)
    
*
  
                                                                 
Total net flows
  
$
2.5
    
$
(8.2
)
  
$
(1.7
)
    
*
      
*
    
$
(5.7
)
  
$
(5.3
)
    
(8
%)
                                                                 
Assets under management or supervision by asset class (2)
                                                          
Equity
  
$
94
    
$
87
    
$
81
      
8
%
    
16
%
                        
Fixed Income
    
66
      
62
      
61
      
6
%
    
8
%
                        
Liquidity
    
154
      
153
      
149
      
1
%
    
3
%
                        
Alternative / Other products
    
121
      
119
      
115
      
2
%
    
5
%
                        
                                                                 
Total Assets Under Management or Supervision
  
$
435
    
$
421
    
$
406
      
3
%
    
7
%
                        
Share of minority stake assets
  
$
8
    
$
7
    
$
8
      
14
%
    
--
                          
                                                                 
 
Notes:         
 - Refer to End Notes, U.S. GAAP to Non-GAAP Measures, Definition of Performance Metrics and Legal Notice on pages 13 - 16. 
 
11
 
                           
U.S. Bank Supplemental Financial Information
                          
(unaudited, dollars in billions)
                              
                               
                               
                               
                               
   
Quarter Ended
    
Percentage Change From:
  
   
June 30, 2017
    
Mar 31, 2017
    
June 30, 2016
    
Mar 31, 2017
    
June 30, 2016
  
                               
                               
U.S. Bank assets
  
$
175.4
    
$
179.4
    
$
175.1
      
(2
%)
    
--
  
                                         
U.S. Bank investment securities portfolio (1)
  
$
53.6
    
$
62.6
    
$
64.6
      
(14
%)
    
(17
%)
                                         
                                         
Wealth Management U.S. Bank Data
                                        
Securities-based lending and other loans
  
$
39.4
    
$
36.6
    
$
31.4
      
8
%
    
25
%
Residential real estate loans
    
25.7
      
25.0
      
22.7
      
3
%
    
13
%
Total Securities-based and residential loans
  
$
65.1
    
$
61.6
    
$
54.1
      
6
%
    
20
%
                                         
                                         
Institutional Securities U.S. Bank Data
                                        
Corporate Lending
  
$
6.1
    
$
6.1
    
$
8.9
      
--
      
(31
%)
Other Lending:
                                        
Corporate loans
    
13.9
      
13.1
      
12.3
      
6
%
    
13
%
Wholesale real estate and other loans
    
10.7
      
10.3
      
8.9
      
4
%
    
20
%
Total other loans
  
$
24.6
    
$
23.4
    
$
21.2
      
5
%
    
16
%
Total corporate and other loans
  
$
30.7
    
$
29.5
    
$
30.1
      
4
%
    
2
%
                                         
 
Notes: 
 - Refer to End Notes, U.S. GAAP to Non-GAAP Measures, Definition of Performance Metrics and Legal Notice on pages 13 - 16. 
 
12
 
 
End Notes
   
Page 2:
(1)
Effective January 1, 2017, the Firm adopted new accounting guidance related to employee share-based payments, the transition impact of which was not significant.  In 2017, the income tax consequences related to share-based payments are required to be recognized in Provision for income taxes in the consolidated income statement instead of additional paid-in capital. The impact of the income tax consequences may be either a benefit or a provision.  Conversion of employee share-based awards to Firm shares will primarily occur in the first quarter of each year.  The impact of recognizing excess tax benefits upon conversion of awards in the first quarter 2017 was a discrete tax benefit of $112 million to Provision for income taxes.  Results for 2016 have not been restated pursuant to the guidance.
   
Page 3:
(1)
During the quarter ended September 30, 2016, Morgan Stanley redeemed all of its issued and outstanding Capital Securities pursuant to the optional redemption provisions provided in the respective governing documents.
   
Page 5:
(1)
For the quarters ended June 30, 2017, March 31, 2017, and June 30, 2016, the percentage of Institutional Securities corporate loans by credit rating was as follows:
 
- % investment grade: 31%, 31% and 30%
 
- % non-investment grade: 69%, 69% and 70%
(2)
For the quarters ended June 30, 2017, March 31, 2017, and June 30, 2016, the percentage of Institutional Securities corporate lending commitments by credit rating was as follows:
 
- % investment grade: 69%, 70% and 76%
 
- % non-investment grade: 31%, 30% and 24%
(3)
At June 30, 2017, March 31, 2017, and June 30, 2016, the "event-driven" portfolio of loans and lending commitments to non-investment grade borrowers were $11.6 billion, $13.9 billion and $13.0 billion, respectively.
(4)
The Institutional Securities business segment engages in other lending activity.  These activities include commercial and residential mortgage lending, asset-backed lending, corporate loans purchased in the secondary market, financing extended to equities and commodities customers, and loans to municipalities.
(5)
For the quarters ended June 30, 2017, March 31, 2017, and June 30, 2016, Institutional Securities recorded a provision for credit losses of $5 million, $21 million and $17 million, respectively, related to loans. For the quarters ended June 30, 2017, March 31, 2017, and June 30, 2016, a provision (release) for credit losses of $(8) million, $3 million and $(13) million was recorded, respectively, related to lending commitments.   
(6)
For the quarters ended June 30, 2017, March 31, 2017, and June 30, 2016, Wealth Management recorded a provision (release) for credit losses of $3 million, $1 million and $(1) million, respectively, related to loans. For the quarter ended June 30, 2017, a provision for credit losses of $1 million was recorded related to lending commitments.  For the quarters ended March 31, 2017 and June 30, 2016, there was no material provision recorded related to lending commitments.
(7)
For the quarters ended June 30, 2017, March 31, 2017, and June 30, 2016, Investment Management reflected a loan balance of $26 million, $24 million and $5 million, respectively, which are not included in the Consolidated Loans and Lending Commitments balance.
   
Page 6:
(1)
Effective July 1, 2016, the Wealth Management and Institutional Securities segments entered into an agreement whereby Institutional Securities assumed management of Wealth Management's fixed income client-driven trading activities and related employees in an effort to build synergies across the businesses and more efficiently risk manage the Firm's trading activities. Institutional Securities now pays a fee to Wealth Management based on distribution activity.  Periods prior to July 1, 2016 have not been recasted.
   
Page 8:
(1)
Effective July 1, 2016, the Wealth Management and Institutional Securities segments entered into an agreement whereby Institutional Securities assumed management of Wealth Management's fixed income client-driven trading activities and related employees in an effort to build synergies across the businesses and more efficiently risk manage the Firm's trading activities. Institutional Securities now pays a fee to Wealth Management based on distribution activity.  Periods prior to July 1, 2016 have not been recasted.
   
Page 10:
(1)
The quarters ended June 30, 2017, March 31, 2017, and June 30, 2016 include investment gains or losses for certain funds included in the Firm's consolidated financial statements for which the limited partnership interests in these gains or losses were reported in net income (loss) applicable to noncontrolling interests.
   
Page 11:
(1)
Net Flows by region for the quarters ended June 30, 2017, March 31, 2017 and June 30, 2016 were:
 
North America: $(3.2) billion, $(16.6) billion and $(1.7) billion
 
International: $5.7 billion, $8.4 billion and $0 billion
(2)
Assets under management or supervision by region for the quarters ended June 30, 2017, March 31, 2017 and June 30, 2016 were:
 
North America: $260 billion, $259 billion and $264 billion
 
International: $175 billion, $162 billion and $142 billion
   
Page 12:
(1)
For the quarters ended June 30, 2017, March 31, 2017 and June 30, 2016, the U.S. Bank investment securities portfolio included held to maturity investment securities of $15.3 billion, $14.1 billion and $10.4 billion, respectively.
 
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Definition of U.S. GAAP to Non-GAAP Measures
     
(a)
 The Firm prepares its Consolidated Financial Statements using accounting principles generally accepted in the United States (U.S. GAAP).  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.  The Securities and Exchange Commission 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 U.S. GAAP.  Non-GAAP financial measures disclosed by Morgan Stanley are provided as additional information to investors and analysts in order to provide them with greater transparency about, or an alternative method for assessing, our financial condition, operating results, or prospective regulatory capital requirements.  These measures are not in accordance with, or a substitute for U.S. 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 define it or present the most directly comparable financial measure calculated and presented in accordance with U.S. GAAP, along with a reconciliation of the differences between the non-GAAP financial measure we reference and such comparable U.S. GAAP financial measure.  In addition to the following notes, please also refer to the Firm's second quarter earnings release footnotes for such definitions and reconciliations.
(b)
The following are considered non-GAAP financial measures: return on average common equity metrics, return on average common equity excluding DVA metrics, tangible common equity, tangible book value per common share, pre-tax profit margin and firm expense efficiency ratio.  These measures are calculated as follows:
  -  The return on average common equity equals annualized net income for the quarter or full year net income applicable to Morgan Stanley less preferred dividends as a percentage of average common equity. The return on average common equity excluding DVA is adjusted for DVA in the denominator. 
  -  Tangible common equity equals common equity less goodwill and intangible assets net of allowable mortgage servicing rights deduction. 
  -  Tangible book value per common share equals tangible common equity divided by period end common shares outstanding. 
  -  Pre-tax profit margin percentages represent income from continuing operations before income taxes as percentages of net revenues. 
  - 
The Firm Expense Efficiency Ratio represents total non-interest expenses as a percentage of net revenues.
(c)
 The fully phased-in Common Equity Tier 1 risk-based capital ratios and fully phased-in Supplementary Leverage Ratio are pro-forma estimates which represent non-GAAP financial measures that the Firm considers to be useful measures for evaluating compliance with new regulatory capital requirements that have not yet become effective.  Supplementary leverage ratio equals fully phased-in Tier 1 capital divided by the fully phased-in total supplementary leverage exposure.  For information on the calculation of regulatory capital and ratios for prior periods, please refer to Part II, Item 7 "Liquidity and Capital Resources—Regulatory Requirements" in the Firm's Annual Report on Form 10-K for the year ended December 31, 2016 and Part I, Item 2 "Liquidity and Capital Resources—Regulatory Requirements" in the Firm's 10-Q for the quarter ended March 31, 2017.
 
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Definition of Performance Metrics
   
(a)
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 Note 15 to the consolidated financial statements in the Firm's Quarterly Report on Form 10-Q for the quarter ended March 31, 2017.
(b)
Book value per common share equals common equity divided by period end common shares outstanding.
(c)
Preferred stock dividend / Other includes allocation of earnings to Participating Restricted Stock Units (RSUs).
(d)
Firmwide regional revenues reflect the Firm's consolidated net revenues on a managed basis.  Further discussion regarding the geographic methodology for net revenues is disclosed in Note 21 to the consolidated financial statements included in the Firm's Annual Report on Form 10-K for the year ended December 31, 2016 (2016 Form 10-K).
(e)
The global liquidity reserve, which is held within the bank and non-bank operating subsidiaries, is comprised of highly liquid and diversified cash and cash equivalents and unencumbered securities. Eligible unencumbered securities include U.S. government securities, U.S. agency securities, U.S. agency mortgage-backed securities, non-U.S. government securities and other highly liquid investment grade securities.
(f)
The Firm's goodwill and intangible balances utilized in the calculation of tangible common equity are net of allowable mortgage servicing rights deduction.
(g)
The Firm's capital estimation and attribution to the business segments are based on the Required Capital framework, an internal capital adequacy measure. This framework is a risk-based and leverage use-of-capital measure, which is compared with the Firm's regulatory capital to ensure that the Firm maintains an amount of going concern capital after absorbing potential losses from stress events, where applicable, at a point in time.  The Firm defines the difference between its total Average Common Equity and the sum of the Average Common Equity amounts allocated to its business segments as Parent equity.  The common equity estimation and attribution to the business segments is based on the Firm's fully phased-in regulatory capital requirements, including supplementary leverage, and incorporates the Firm's internal stress tests.  The amount of capital allocated to the business segments is set at the beginning of the year, and will remain fixed throughout the year until the next annual reset.  The Required Capital framework is expected to evolve over time in response to changes in the business and regulatory environment and to incorporate enhancements in modeling techniques.  For further discussion of the framework, refer to Part II, Item 7 "Liquidity and Capital Resources—Regulatory Requirements" in Firm's Annual Report on Form 10-K for the year ended December 31, 2016 and Part I, Item 2 "Liquidity and Capital Resources—Regulatory Requirements" in Firm's Quarterly Report on Form 10-Q for the quarter ended March 31, 2017.
(h)
The Firm's binding risk-based capital ratios for regulatory purposes are the lower of the capital ratios computed under the (i) standardized approaches for calculating credit risk RWAs and market risk RWAs (the "Standardized Approach"); and (ii) applicable advanced approaches for calculating credit risk, market risk and operational risk RWAs (the "Advanced Approach").  At June 30, 2017, the binding ratio is based on the Advanced Approach transitional rules. For information on the calculation of regulatory capital and ratios for prior periods, please refer to Part II, Item 7 "Liquidity and Capital Resources—Regulatory Requirements" in the Firm's 2016 Form 10-K and Part I, Item 2 "Liquidity and Capital Resources—Regulatory Requirements" in the Firm's 10-Q for the quarter ended March 31, 2017.
(i)
Institutional Securities net income applicable to noncontrolling interests primarily represents the allocation to Mitsubishi UFJ Financial Group, Inc. of Morgan Stanley MUFG Securities Co., Ltd., which the Firm consolidates.
(j)
Institutional Securities discontinued operations primarily includes after-tax losses related to Saxon, which became a discontinued operation in 2011.
(k)
VaR represents the loss amount that one would not expect to exceed, on average, more than five times every one hundred trading days in the Firm's trading positions if the portfolio were held constant for a one-day period. Further discussion of the calculation of VaR and the limitations of the Firm's VaR methodology, is disclosed in Part II, Item 7A "Quantitative and Qualitative Disclosures about Market Risk" included in the Firm's 2016 Form 10-K.
(l)
Annualized revenue per Wealth Management representative is defined as annualized revenue divided by average representative headcount.
(m)
Client assets per Wealth Management representative represents total client assets divided by period end representative headcount.
(n)
U.S. Bank refers to the Firm's U.S. Bank operating subsidiaries Morgan Stanley Bank, N.A. and Morgan Stanley Private Bank, National Association and excludes balances between Bank subsidiaries.
(o)
Wealth Management client liabilities reflect U.S. Bank lending and broker dealer margin activity.
(p)
Wealth Management 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.
(q)
Wealth Management fee-based asset flows include net new fee-based assets, net account transfers, dividends, interest, and client fees and exclude institutional cash management related activity.
(r)
Investment Management Alternative/Other asset class includes products in Fund of Funds, Real Estate, Private Equity and Credit strategies, as well as Multi-Asset portfolios.
(s)
Investment Management net flows include new commitments, investments or reinvestments, net of client redemptions, returns of capital post-fund investment period and dividends not reinvested; and excludes the impact of the transition of funds from their commitment period to the invested capital period.
(t)
The share of minority stake assets represents Investment Management's proportional share of assets managed by entities in which it owns a minority stake.
(u)
The Institutional Securities U.S. Bank other lending data includes activities related to commercial and residential mortgage lending, asset-backed lending, corporate loans purchased in the secondary market, financing extended to equities and commodities customers, and loans to municipalities.
 
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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 second quarter earnings press release issued July 19, 2017.
 
 
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