EX-99.2 3 a53881916_ex992.htm EXHIBIT 99.2
Exhibit 99.2

Fourth Quarter 2023 Earnings Results
  
   
   
Quarterly Financial Supplement
Page
   
Consolidated Financial Summary
1
Consolidated Financial Metrics, Ratios and Statistical Data
2
Consolidated and U.S. Bank Supplemental Financial Information
3
Consolidated Average Common Equity and Regulatory Capital Information
4
Institutional Securities Income Statement Information, Financial Metrics and Ratios
5
Wealth Management Income Statement Information, Financial Metrics and Ratios
6
Wealth Management Financial Information and Statistical Data
7
Investment Management Income Statement Information, Financial Metrics and Ratios
8
Investment Management Financial Information and Statistical Data
9
Consolidated Loans and Lending Commitments
10
Consolidated Loans and Lending Commitments Allowance for Credit Losses
11
Definition of U.S. GAAP to Non-GAAP Measures
12
Definitions of Performance Metrics and Terms
13 - 14
Supplemental Quantitative Details and Calculations
15 - 16
Legal Notice
17

Consolidated Financial Summary
                                                
(unaudited, dollars in millions)
                                                
                                                 
   
Quarter Ended
    
Percentage Change From:
    
Twelve Months Ended
    
Percentage
  
   
Dec 31, 2023
    
Sep 30, 2023
    
Dec 31, 2022
    
Sep 30, 2023
    
Dec 31, 2022
    
Dec 31, 2023
    
Dec 31, 2022
    
Change
  
Net revenues
                                                
Institutional Securities
  
$
4,940
    
$
5,669
    
$
4,800
      
(13
%)
    
3
%
  
$
23,060
    
$
24,393
      
(5
%)
Wealth Management
    
6,645
      
6,404
      
6,626
      
4
%
    
--
      
26,268
      
24,417
      
8
%
Investment Management
    
1,464
      
1,336
      
1,461
      
10
%
    
--
      
5,370
      
5,375
      
--
  
Intersegment Eliminations
    
(153
)
    
(136
)
    
(138
)
    
(13
%)
    
(11
%)
    
(555
)
    
(517
)
    
(7
%)
Net revenues (1)
  
$
12,896
    
$
13,273
    
$
12,749
      
(3
%)
    
1
%
  
$
54,143
    
$
53,668
      
1
%
                                                                 
Provision for credit losses
  
$
3
    
$
134
    
$
87
      
(98
%)
    
(97
%)
  
$
532
    
$
280
      
90
%
                                                                 
Non-interest expenses
                                                                
Institutional Securities
  
$
4,510
    
$
4,377
    
$
3,991
      
3
%
    
13
%
  
$
18,183
    
$
17,467
      
4
%
Wealth Management
    
5,236
      
4,654
      
4,760
      
13
%
    
10
%
    
19,607
      
17,765
      
10
%
Investment Management
    
1,199
      
1,095
      
1,247
      
9
%
    
(4
%)
    
4,528
      
4,568
      
(1
%)
Intersegment Eliminations
    
(148
)
    
(132
)
    
(130
)
    
(12
%)
    
(14
%)
    
(520
)
    
(501
)
    
(4
%)
Non-interest expenses (1)(2)
  
$
10,797
    
$
9,994
    
$
9,868
      
8
%
    
9
%
  
$
41,798
    
$
39,299
      
6
%
                                                                 
Income before provision for income taxes
                                                                
Institutional Securities
  
$
408
    
$
1,199
    
$
748
      
(66
%)
    
(45
%)
  
$
4,476
    
$
6,715
      
(33
%)
Wealth Management
    
1,428
      
1,709
      
1,840
      
(16
%)
    
(22
%)
    
6,530
      
6,583
      
(1
%)
Investment Management
    
265
      
241
      
214
      
10
%
    
24
%
    
842
      
807
      
4
%
Intersegment Eliminations
    
(5
)
    
(4
)
    
(8
)
    
(25
%)
    
38
%
    
(35
)
    
(16
)
    
(119
%)
Income before provision for income taxes
  
$
2,096
    
$
3,145
    
$
2,794
      
(33
%)
    
(25
%)
  
$
11,813
    
$
14,089
      
(16
%)
                                                                 
Net Income applicable to Morgan Stanley
                                                               
Institutional Securities
  
$
304
    
$
912
    
$
656
      
(67
%)
    
(54
%)
  
$
3,453
    
$
5,242
      
(34
%)
Wealth Management
    
1,018
      
1,320
      
1,424
      
(23
%)
    
(29
%)
    
5,022
      
5,139
      
(2
%)
Investment Management
    
199
      
179
      
162
      
11
%
    
23
%
    
639
      
660
      
(3
%)
Intersegment Eliminations
    
(4
)
    
(3
)
    
(6
)
    
(33
%)
    
33
%
    
(27
)
    
(12
)
    
(125
%)
Net Income applicable to Morgan Stanley
  
$
1,517
    
$
2,408
    
$
2,236
      
(37
%)
    
(32
%)
  
$
9,087
    
$
11,029
      
(18
%)
Earnings applicable to Morgan Stanley common shareholders
  
$
1,383
    
$
2,262
    
$
2,113
      
(39
%)
    
(35
%)
  
$
8,530
    
$
10,540
      
(19
%)

   

Notes:
-
Firm net revenues excluding mark-to-market gains and losses on deferred cash-based compensation plans (DCP) were: 4Q23: $12,527 million, 3Q23: $13,475 million, 4Q22: $12,555 million, 4Q23 YTD: $53,709 million, 4Q22 YTD: $54,866 million.
-
Firm compensation expenses excluding DCP were: 4Q23: $5,597 million, 3Q23: $5,992 million, 4Q22: $5,426 million, 4Q23 YTD: $23,890 million, 4Q22 YTD: $23,769 million.
-
The End Notes are an integral part of this presentation.  See pages 12 - 17 for Definition of U.S. GAAP to Non-GAAP Measures, Definition of Performance Metrics and Terms, Supplemental Quantitative Details and Calculations, and Legal Notice.

1
Consolidated Financial Metrics, Ratios and Statistical Data
                                            
(unaudited)
                                                
                                                 
   
Quarter Ended
    
Percentage Change From:
    
Twelve Months Ended
    
Percentage
  
   
Dec 31, 2023
    
Sep 30, 2023
    
Dec 31, 2022
    
Sep 30, 2023
    
Dec 31, 2022
    
Dec 31, 2023
    
Dec 31, 2022
    
Change
  
                                                 
Financial Metrics:
                                                
                                                 
Earnings per basic share
  
$
0.86
    
$
1.39
    
$
1.28
      
(38
%)
    
(33
%)
  
$
5.24
    
$
6.23
      
(16
%)
Earnings per diluted share
  
$
0.85
    
$
1.38
    
$
1.26
      
(38
%)
    
(33
%)
  
$
5.18
    
$
6.15
      
(16
%)
                                                                 
Return on average common equity
    
6.2
%
    
10.0
%
    
9.2
%
                    
9.4
%
    
11.2
%
        
Return on average tangible common equity
    
8.4
%
    
13.5
%
    
12.6
%
                    
12.8
%
    
15.3
%
        
                                                                 
Book value per common share
  
$
55.50
    
$
55.08
    
$
54.55
                    
$
55.50
    
$
54.55
          
Tangible book value per common share
  
$
40.89
    
$
40.53
    
$
40.06
                    
$
40.89
    
$
40.06
          
                                                                 
Financial Ratios:
                                                                
                                                                 
Pre-tax profit margin
    
16
%
    
24
%
    
22
%
                    
22
%
    
26
%
        
Compensation and benefits as a % of net revenues
    
46
%
    
45
%
    
44
%
                    
45
%
    
43
%
        
Non-compensation expenses as a % of net revenues
    
38
%
    
31
%
    
33
%
                    
32
%
    
30
%
        
Firm expense efficiency ratio (1)
    
84
%
    
75
%
    
77
%
                    
77
%
    
73
%
        
Effective tax rate (2)
    
26.5
%
    
22.6
%
    
18.9
%
                    
21.9
%
    
20.7
%
        
                                                                 
Statistical Data:
                                                                
                                                                 
Period end common shares outstanding (millions)
    
1,627
      
1,642
      
1,675
      
(1
%)
    
(3
%)
                        
Average common shares outstanding (millions)
                                                                
Basic
    
1,606
      
1,624
      
1,652
      
(1
%)
    
(3
%)
    
1,628
      
1,691
      
(4
%)
Diluted
    
1,627
      
1,643
      
1,679
      
(1
%)
    
(3
%)
    
1,646
      
1,713
      
(4
%)
                                                                 
Worldwide employees
    
80,006
      
80,710
      
82,427
      
(1
%)
    
(3
%)
                        

   

The End Notes are an integral part of this presentation.  See pages 12 - 17 for Definition of U.S. GAAP to Non-GAAP Measures, Definition of Performance Metrics and Terms, Supplemental Quantitative Details and Calculations, and Legal Notice.

2
Consolidated and U.S. Bank Supplemental Financial Information
  
(unaudited, dollars in millions)
  
                                                 
   
Quarter Ended
    
Percentage Change From:
    
Twelve Months Ended
    
Percentage
  
   
Dec 31, 2023
    
Sep 30, 2023
    
Dec 31, 2022
    
Sep 30, 2023
    
Dec 31, 2022
    
Dec 31, 2023
    
Dec 31, 2022
    
Change
  
                                                 
Consolidated Balance sheet
                                                
                                                 
Total assets
  
$
1,193,693
    
$
1,169,013
    
$
1,180,231
      
2
%
    
1
%
  

   

   

 
Loans (1)
  
$
226,828
    
$
224,957
    
$
222,182
      
1
%
    
2
%
                        
Deposits
  
$
351,804
    
$
345,458
    
$
356,646
      
2
%
    
(1
%)
                        
Long-term debt outstanding
  
$
260,544
    
$
242,843
    
$
233,867
      
7
%
    
11
%
                        
Maturities of long-term debt outstanding (next 12 months)
  
$
20,151
    
$
21,514
    
$
18,910
      
(6
%)
    
7
%
                        
                                                                 
Average liquidity resources
  
$
314,504
    
$
307,367
    
$
312,250
      
2
%
    
1
%
                        
                                                                 
Common equity
  
$
90,288
    
$
90,461
    
$
91,391
      
--
      
(1
%)
                        
Less: Goodwill and intangible assets
    
(23,761
)
    
(23,900
)
    
(24,268
)
    
(1
%)
    
(2
%)
                        
Tangible common equity
  
$
66,527
    
$
66,561
    
$
67,123
      
--
      
(1
%)
                        
                                                                 
Preferred equity
  
$
8,750
    
$
8,750
    
$
8,750
      
--
      
--
                          
                                                                 
U.S. Bank Supplemental Financial Information
                                                                
Total assets
  
$
396,111
    
$
388,098
    
$
390,963
      
2
%
    
1
%
                        
Loans
  
$
212,207
    
$
209,135
    
$
206,344
      
1
%
    
3
%
                        
Investment securities portfolio (2)
  
$
118,008
    
$
114,780
    
$
123,254
      
3
%
    
(4
%)
                        
Deposits
  
$
346,103
    
$
339,927
    
$
350,553
      
2
%
    
(1
%)
                        
                                                                 
Regional revenues
                                                                
Americas
  
$
10,198
    
$
10,268
    
$
9,897
      
(1
%)
    
3
%
  
$
41,651
    
$
40,117
      
4
%
EMEA (Europe, Middle East, Africa)
    
1,342
      
1,479
      
1,430
      
(9
%)
    
(6
%)
    
6,058
      
6,811
      
(11
%)
Asia
    
1,356
      
1,526
      
1,422
      
(11
%)
    
(5
%)
    
6,434
      
6,740
      
(5
%)
Consolidated net revenues
  
$
12,896
    
$
13,273
    
$
12,749
      
(3
%)
    
1
%
  
$
54,143
    
$
53,668
      
1
%

   

The End Notes are an integral part of this presentation.  See pages 12 - 17 for Definition of U.S. GAAP to Non-GAAP Measures, Definition of Performance Metrics and Terms, Supplemental Quantitative Details and Calculations, and Legal Notice.

3
Consolidated Average Common Equity and Regulatory Capital Information
                                
(unaudited, dollars in billions)
                                                
                                                 
   
Quarter Ended
    
Percentage Change From:
    
Twelve Months Ended
    
Percentage
  
   
Dec 31, 2023
    
Sep 30, 2023
    
Dec 31, 2022
    
Sep 30, 2023
    
Dec 31, 2022
    
Dec 31, 2023
    
Dec 31, 2022
    
Change
  
                                                 
Average Common Equity
                                                
Institutional Securities
  
$
45.6
    
$
45.6
    
$
48.8
      
--
      
(7
%)
  
$
45.6
    
$
48.8
      
(7
%)
Wealth Management
    
28.8
      
28.8
      
31.0
      
--
      
(7
%)
    
28.8
      
31.0
      
(7
%)
Investment Management
    
10.4
      
10.4
      
10.6
      
--
      
(2
%)
    
10.4
      
10.6
      
(2
%)
Parent Company
    
5.1
      
6.0
      
1.1
      
(15
%)
    
*
      
6.0
      
3.5
      
71
%
Firm
  
$
89.9
    
$
90.8
    
$
91.5
      
(1
%)
    
(2
%)
  
$
90.8
    
$
93.9
      
(3
%)
                                                                 
                                                                 
                                                                 
Regulatory Capital
                                                                
                                                                 
Common Equity Tier 1 capital
  
$
69.4
    
$
69.1
    
$
68.7
      
--
      
1
%
                        
Tier 1 capital
  
$
78.2
    
$
77.9
    
$
77.2
      
--
      
1
%
                        
                                                                 
Standardized Approach
                                                                
Risk-weighted assets
  
$
457.3
    
$
443.8
    
$
447.8
      
3
%
    
2
%
                        
Common Equity Tier 1 capital ratio
    
15.2
%
    
15.6
%
    
15.3
%
                                        
Tier 1 capital ratio
    
17.1
%
    
17.6
%
    
17.2
%
                                        
                                                                 
Advanced Approach
                                                                
Risk-weighted assets
  
$
450.4
    
$
429.1
    
$
438.8
      
5
%
    
3
%
                        
Common Equity Tier 1 capital ratio
    
15.4
%
    
16.1
%
    
15.6
%
                                        
Tier 1 capital ratio
    
17.4
%
    
18.2
%
    
17.6
%
                                        
                                                                 
Leverage-based capital
                                                                
Tier 1 leverage ratio
    
6.7
%
    
6.8
%
    
6.7
%
                                        
Supplementary Leverage Ratio
    
5.5
%
    
5.5
%
    
5.5
%
                                        

   

The End Notes are an integral part of this presentation.  See pages 12 - 17 for Definition of U.S. GAAP to Non-GAAP Measures, Definition of Performance Metrics and Terms, Supplemental Quantitative Details and Calculations, and Legal Notice.

4
Institutional Securities
                                                
Income Statement Information, Financial Metrics and Ratios
                                            
(unaudited, dollars in millions)
                                                
                                                 
   
Quarter Ended
    
Percentage Change From:
    
Twelve Months Ended
    
Percentage
  
   
Dec 31, 2023
    
Sep 30, 2023
    
Dec 31, 2022
    
Sep 30, 2023
    
Dec 31, 2022
    
Dec 31, 2023
    
Dec 31, 2022
    
Change
  
Revenues:
                                                
                                                 
Advisory
  
$
702
    
$
449
    
$
711
      
56
%
    
(1
%)
  
$
2,244
    
$
2,946
      
(24
%)
Equity
    
225
      
237
      
227
      
(5
%)
    
(1
%)
    
889
      
851
      
4
%
Fixed income
    
391
      
252
      
314
      
55
%
    
25
%
    
1,445
      
1,438
      
--
  
Underwriting
    
616
      
489
      
541
      
26
%
    
14
%
    
2,334
      
2,289
      
2
%
Investment banking
    
1,318
      
938
      
1,252
      
41
%
    
5
%
    
4,578
      
5,235
      
(13
%)
                                                                 
Equity
    
2,202
      
2,507
      
2,176
      
(12
%)
    
1
%
    
9,986
      
10,769
      
(7
%)
Fixed income
    
1,434
      
1,947
      
1,418
      
(26
%)
    
1
%
    
7,673
      
9,022
      
(15
%)
Other
    
(14
)
    
277
      
(46
)
    
*
      
70
%
    
823
      
(633
)
    
*
  
                                                                 
Net revenues
    
4,940
      
5,669
      
4,800
      
(13
%)
    
3
%
    
23,060
      
24,393
      
(5
%)
 
                                                                
Provision for credit losses
    
22
      
93
      
61
      
(76
%)
    
(64
%)
    
401
      
211
      
90
%
                                                                 
Compensation and benefits
    
1,732
      
2,057
      
1,644
      
(16
%)
    
5
%
    
8,369
      
8,246
      
1
%
Non-compensation expenses
    
2,778
      
2,320
      
2,347
      
20
%
    
18
%
    
9,814
      
9,221
      
6
%
Total non-interest expenses
    
4,510
      
4,377
      
3,991
      
3
%
    
13
%
    
18,183
      
17,467
      
4
%
                                                                 
Income before provision for income taxes
    
408
      
1,199
      
748
      
(66
%)
    
(45
%)
    
4,476
      
6,715
      
(33
%)
Net income applicable to Morgan Stanley
  
$
304
    
$
912
    
$
656
      
(67
%)
    
(54
%)
  
$
3,453
    
$
5,242
      
(34
%)
                                                                 
Pre-tax profit margin
    
8
%
    
21
%
    
16
%
                    
19
%
    
28
%
        
Compensation and benefits as a % of net revenues
    
35
%
    
36
%
    
34
%
                    
36
%
    
34
%
        
Non-compensation expenses as a % of net revenues
    
56
%
    
41
%
    
49
%
                    
43
%
    
38
%
        
                                                                 
Return on Average Common Equity
    
2
%
    
7
%
    
5
%
                    
7
%
    
10
%
        
Return on Average Tangible Common Equity (1)
    
2
%
    
7
%
    
5
%
                    
7
%
    
10
%
        
                                                                 
Trading VaR (Average Daily 95% / One-Day VaR)
  
$
46
    
$
48
    
$
64
                                          

   

The End Notes are an integral part of this presentation.  See pages 12 - 17 for Definition of U.S. GAAP to Non-GAAP Measures, Definition of Performance Metrics and Terms, Supplemental Quantitative Details and Calculations, and Legal Notice.

5
Wealth Management
                                                
Income Statement Information, Financial Metrics and Ratios
                    
(unaudited, dollars in millions)
                                                
                                                 
                                                 
   
Quarter Ended
    
Percentage Change From:
    
Twelve Months Ended
    
Percentage
  
   
Dec 31, 2023
    
Sep 30, 2023
    
Dec 31, 2022
    
Sep 30, 2023
    
Dec 31, 2022
    
Dec 31, 2023
    
Dec 31, 2022
    
Change
  
Revenues:
                                                
Asset management
  
$
3,556
    
$
3,629
    
$
3,347
      
(2
%)
    
6
%
  
$
14,019
    
$
13,872
      
1
%
Transactional
    
1,088
      
678
      
931
      
60
%
    
17
%
    
3,556
      
2,473
      
44
%
Net interest income
    
1,852
      
1,952
      
2,138
      
(5
%)
    
(13
%)
    
8,118
      
7,429
      
9
%
Other
    
149
      
145
      
210
      
3
%
    
(29
%)
    
575
      
643
      
(11
%)
Net revenues (1)
    
6,645
      
6,404
      
6,626
      
4
%
    
--
      
26,268
      
24,417
      
8
%
                                                                 
Provision for credit losses
    
(19
)
    
41
      
26
      
*
      
*
      
131
      
69
      
90
%
                                                                 
Compensation and benefits (1)
    
3,640
      
3,352
      
3,343
      
9
%
    
9
%
    
13,972
      
12,534
      
11
%
Non-compensation expenses
    
1,596
      
1,302
      
1,417
      
23
%
    
13
%
    
5,635
      
5,231
      
8
%
Total non-interest expenses
    
5,236
      
4,654
      
4,760
      
13
%
    
10
%
    
19,607
      
17,765
      
10
%
                                                                 
Income before provision for income taxes
    
1,428
      
1,709
      
1,840
      
(16
%)
    
(22
%)
    
6,530
      
6,583
      
(1
%)
Net income applicable to Morgan Stanley
  
$
1,018
    
$
1,320
    
$
1,424
      
(23
%)
    
(29
%)
  
$
5,022
    
$
5,139
      
(2
%)
                                                                 
Pre-tax profit margin
    
21
%
    
27
%
    
28
%
                    
25
%
    
27
%
        
Compensation and benefits as a % of net revenues
    
55
%
    
52
%
    
50
%
                    
53
%
    
51
%
        
Non-compensation expenses as a % of net revenues
    
24
%
    
20
%
    
21
%
                    
21
%
    
21
%
        
                                                                 
Return on Average Common Equity
    
14
%
    
18
%
    
18
%
                    
17
%
    
16
%
        
Return on Average Tangible Common Equity (2)
    
27
%
    
35
%
    
34
%
                    
33
%
    
31
%
        

                 

Notes:
-
Wealth Management net revenues excluding DCP were: 4Q23: $6,403 million, 3Q23: $6,547 million, 4Q22: $6,520 million, 4Q23 YTD: $25,986 million, 4Q22 YTD: $25,275 million.
-
Wealth Management compensation expenses excluding DCP were: 4Q23: $3,406 million, 3Q23: $3,400 million, 4Q22: $3,228 million, 4Q23 YTD: $13,560 million, 4Q22 YTD: $13,064 million.
-
The End Notes are an integral part of this presentation.  See pages 12 - 17 for Definition of U.S. GAAP to Non-GAAP Measures, Definition of Performance Metrics and Terms, Supplemental Quantitative Details and Calculations, and Legal Notice.

6
Wealth Management
                              
Financial Information and Statistical Data
                              
(unaudited, dollars in billions)
                              
                               
   
Quarter Ended
    
Percentage Change From:
  
   
Dec 31, 2023
    
Sep 30, 2023
    
Dec 31, 2022
    
Sep 30, 2023
    
Dec 31, 2022
  
                               
Wealth Management Metrics
                              
                               
Total client assets
  
$
5,129
    
$
4,798
    
$
4,187
      
7
%
    
22
%
Net new assets
  
$
47.5
    
$
35.7
    
$
51.6
      
33
%
    
(8
%)
U.S. Bank loans
  
$
146.5
    
$
145.8
    
$
146.1
      
--
      
--
  
Margin and other lending (1)
  
$
21.4
    
$
23.1
    
$
22.0
      
(7
%)
    
(3
%)
Deposits (2)
  
$
346
    
$
340
    
$
351
      
2
%
    
(1
%)
Annualized weighted average cost of deposits
                                        
Period end
    
2.92
%
    
2.86
%
    
1.59
%
                
Period average
    
2.86
%
    
2.69
%
    
1.32
%
                
                                         
Advisor-led channel
                                        
                                         
Advisor-led client assets
  
$
3,979
    
$
3,755
    
$
3,392
      
6
%
    
17
%
                                         
Fee-based client assets
  
$
1,983
    
$
1,857
    
$
1,678
      
7
%
    
18
%
Fee-based asset flows
  
$
41.6
    
$
22.5
    
$
20.4
      
85
%
    
104
%
Fee-based assets as a % of advisor-led client assets
    
50
%
    
49
%
    
49
%
                
                                         
Self-directed channel
                                        
                                         
Self-directed client assets
  
$
1,150
    
$
1,043
    
$
795
      
10
%
    
45
%
Daily average revenue trades (000's)
    
705
      
735
      
755
      
(4
%)
    
(7
%)
Self-directed households (millions)
    
8.1
      
8.1
      
8.0
      
--
      
1
%
                                         
Workplace channel
                                        
                                         
Stock plan unvested assets
  
$
416
    
$
377
    
$
302
      
10
%
    
38
%
Number of stock plan participants (millions)
    
6.6
      
6.6
      
6.3
      
--
      
5
%

   

The End Notes are an integral part of this presentation.  See pages 12 - 17 for Definition of U.S. GAAP to Non-GAAP Measures, Definition of Performance Metrics and Terms, Supplemental Quantitative Details and Calculations, and Legal Notice.

7
Investment Management
                                                
Income Statement Information, Financial Metrics and Ratios
                    
(unaudited, dollars in millions)
                                                
                                                 
   
Quarter Ended
    
Percentage Change From:
    
Twelve Months Ended
    
Percentage
  
   
Dec 31, 2023
    
Sep 30, 2023
    
Dec 31, 2022
    
Sep 30, 2023
    
Dec 31, 2022
    
Dec 31, 2023
    
Dec 31, 2022
    
Change
  
Revenues:
                                                
Asset management and related fees
  
$
1,403
    
$
1,312
    
$
1,371
      
7
%
    
2
%
  
$
5,231
    
$
5,332
      
(2
%)
Performance-based income and other
    
61
      
24
      
90
      
154
%
    
(32
%)
    
139
      
43
      
*
  
Net revenues
    
1,464
      
1,336
      
1,461
      
10
%
    
--
      
5,370
      
5,375
      
--
  
                                                                 
Compensation and benefits
    
579
      
526
      
628
      
10
%
    
(8
%)
    
2,217
      
2,273
      
(2
%)
Non-compensation expenses
    
620
      
569
      
619
      
9
%
    
--
      
2,311
      
2,295
      
1
%
Total non-interest expenses
    
1,199
      
1,095
      
1,247
      
9
%
    
(4
%)
    
4,528
      
4,568
      
(1
%)
                                                                 
Income before provision for income taxes
    
265
      
241
      
214
      
10
%
    
24
%
    
842
      
807
      
4
%
Net income applicable to Morgan Stanley
  
$
199
    
$
179
    
$
162
      
11
%
    
23
%
  
$
639
    
$
660
      
(3
%)
                                                                 
Pre-tax profit margin
    
18
%
    
18
%
    
15
%
                    
16
%
    
15
%
        
Compensation and benefits as a % of net revenues
    
40
%
    
39
%
    
43
%
                    
41
%
    
42
%
        
Non-compensation expenses as a % of net revenues
    
42
%
    
43
%
    
42
%
                    
43
%
    
43
%
        
                                                                 
Return on Average Common Equity
    
8
%
    
7
%
    
6
%
                    
6
%
    
6
%
        
Return on Average Tangible Common Equity (1)
    
110
%
    
98
%
    
85
%
                    
88
%
    
86
%
        

   

The End Notes are an integral part of this presentation.  See pages 12 - 17 for Definition of U.S. GAAP to Non-GAAP Measures, Definition of Performance Metrics and Terms, Supplemental Quantitative Details and Calculations, and Legal Notice.

8
Investment Management
                                                
Financial Information and Statistical Data
                                      
(unaudited, dollars in billions)
                                                
                                                 
   
Quarter Ended
    
Percentage Change From:
    
Twelve Months Ended
    
Percentage
  
   
Dec 31, 2023
    
Sep 30, 2023
    
Dec 31, 2022
    
Sep 30, 2023
    
Dec 31, 2022
    
Dec 31, 2023
    
Dec 31, 2022
    
Change
  
                                                 
                                                 
Assets under management or supervision (AUM)
                                                
                                                 
Net flows by asset class
                                                
Equity
  
$
(6.5
)
  
$
(5.5
)
  
$
(6.1
)
    
(18
%)
    
(7
%)
  
$
(19.4
)
  
$
(24.9
)
    
22
%
Fixed Income
    
(0.2
)
    
(2.1
)
    
(3.8
)
    
90
%
    
95
%
    
(9.3
)
    
(15.3
)
    
39
%
Alternatives and Solutions
    
(0.4
)
    
0.8
      
3.9
      
*
      
*
      
13.5
      
14.4
      
(6
%)
Long-Term Net Flows
    
(7.1
)
    
(6.8
)
    
(6.0
)
    
(4
%)
    
(18
%)
    
(15.2
)
    
(25.8
)
    
41
%
                                                                 
Liquidity and Overlay Services
    
(6.6
)
    
5.7
      
(18.5
)
    
*
      
64
%
    
22.7
      
(47.8
)
    
*
  
                                                                 
Total Net Flows
  
$
(13.7
)
  
$
(1.1
)
  
$
(24.5
)
    
*
      
44
%
  
$
7.5
    
$
(73.6
)
    
*
  
                                                                 
Assets under management or supervision by asset class
                                                          
Equity
  
$
295
    
$
272
    
$
259
      
8
%
    
14
%
                        
Fixed Income
    
171
      
163
      
173
      
5
%
    
(1
%)
                        
Alternatives and Solutions
    
508
      
472
      
431
      
8
%
    
18
%
                        
Long-Term Assets Under Management or Supervision
  
$
974
    
$
907
    
$
863
      
7
%
    
13
%
                        
                                                                 
Liquidity and Overlay Services
    
485
      
481
      
442
      
1
%
    
10
%
                        
                                                                 
Total Assets Under Management or Supervision
  
$
1,459
    
$
1,388
    
$
1,305
      
5
%
    
12
%
                        

   

The End Notes are an integral part of this presentation.  See pages 12 - 17 for Definition of U.S. GAAP to Non-GAAP Measures, Definition of Performance Metrics and Terms, Supplemental Quantitative Details and Calculations, and Legal Notice.

9
Consolidated Loans and Lending Commitments
                              
(unaudited, dollars in billions)
                              
                               
   
Quarter Ended
    
Percentage Change From:
  
   
Dec 31, 2023
    
Sep 30, 2023
    
Dec 31, 2022
    
Sep 30, 2023
    
Dec 31, 2022
  
                               
Institutional Securities
                              
                               
Loans:
                              
Corporate
  
$
18.4
    
$
18.0
    
$
17.0
      
2
%
    
8
%
Secured lending facilities
    
42.5
      
41.8
      
38.6
      
2
%
    
10
%
Commercial and residential real estate
    
11.7
      
11.4
      
11.7
      
3
%
    
--
  
Securities-based lending and other
    
7.2
      
7.4
      
8.5
      
(3
%)
    
(15
%)
                                         
Total Loans
    
79.8
      
78.6
      
75.8
      
2
%
    
5
%
                                         
Lending Commitments
    
130.4
      
128.7
      
119.7
      
1
%
    
9
%
                                         
Institutional Securities Loans and Lending Commitments
  
$
210.2
    
$
207.3
    
$
195.5
      
1
%
    
8
%
                                         
                                         
Wealth Management
                                        
                                         
Loans:
                                        
Securities-based lending and other
  
$
86.2
    
$
87.0
    
$
91.7
      
(1
%)
    
(6
%)
Residential real estate
    
60.3
      
58.9
      
54.4
      
2
%
    
11
%
                                         
Total Loans
    
146.5
      
145.9
      
146.1
      
--
      
--
  
                                         
Lending Commitments
    
19.6
      
19.1
      
17.3
      
3
%
    
13
%
                                         
Wealth Management Loans and Lending Commitments
  
$
166.1
    
$
165.0
    
$
163.4
      
1
%
    
2
%
                                         
Consolidated Loans and Lending Commitments (1)
  
$
376.3
    
$
372.3
    
$
358.9
      
1
%
    
5
%

   

The End Notes are an integral part of this presentation.  See pages 12 - 17 for Definition of U.S. GAAP to Non-GAAP Measures, Definition of Performance Metrics and Terms, Supplemental Quantitative Details and Calculations, and Legal Notice.

10
Consolidated Loans and Lending Commitments
                        
Allowance for Credit Losses (ACL) as of December 31, 2023
                        
(unaudited, dollars in millions)
                        
                         
                         
   
Loans and Lending Commitments
    
ACL (1)
    
ACL %
    
Q4 Provision
  
   
(Gross)
                    
Loans:
                        
Held For Investment (HFI)
                        
                         
Corporate
  
$
6,758
    
$
241
      
3.6
%
  
$
(7
)
Secured lending facilities
    
39,498
      
153
      
0.4
%
    
(3
)
Commercial and residential real estate
    
8,678
      
463
      
5.3
%
    
52
  
Other
    
2,818
      
17
      
0.6
%
    
-
  
Institutional Securities - HFI
  
$
57,752
    
$
874
      
1.5
%
  
$
42
  
                                 
Wealth Management - HFI
    
146,798
      
295
      
0.2
%
    
(16
)
                                 
Held For Investment
  
$
204,550
    
$
1,169
      
0.6
%
  
$
26
  
                                 
Held For Sale
    
15,255
                          
                                 
Fair Value
    
7,733
                          
                                 
Total Loans
    
227,538
      
1,169
              
26
  
                                 
Lending Commitments
    
149,973
      
551
      
0.4
%
    
(23
)
                                 
Consolidated Loans and Lending Commitments
  
$
377,511
    
$
1,720
            
$
3
  

   

The End Notes are an integral part of this presentation.  See pages 12 - 17 for Definition of U.S. GAAP to Non-GAAP Measures, Definition of Performance Metrics and Terms, Supplemental Quantitative Details and Calculations, and Legal Notice.

11
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 analysts, investors and other stakeholders 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 Annual Report on Form 10-K for the year ended December 31, 2022 (2022 Form 10-K).
   
(b)
The following are considered non-GAAP financial measures that the Firm considers useful for analysts, investors and other stakeholders to allow comparability of operating performance and capital adequacy. These measures are calculated as follows:
 
-
The return on average tangible common equity represents annualized earnings applicable to Morgan Stanley common shareholders as a percentage of average tangible common equity.
 
-
Segment return on average common equity and return on average tangible common equity represent full year net income or annualized net income for the quarter applicable to Morgan Stanley for each segment, less preferred dividend segment allocation, divided by average common equity and average tangible common equity for each respective segment.  The segment adjustments to common equity to derive segment average tangible common equity are generally set at the beginning of the year, and will remain fixed throughout the year until the next annual reset unless a significant business change occurs (e.g., acquisition or disposition).
 
-
Tangible common equity represents common equity less goodwill and intangible assets net of certain mortgage servicing rights deduction.
 
-
Tangible book value per common share represents tangible common equity divided by period end common shares outstanding.
 
-
Net revenues excluding DCP represents net revenues adjusted for the impact of mark-to-market gains/losses on economic hedges associated with certain employee deferred cash-based compensation plans.
  -
Compensation expense excluding DCP represents compensation adjusted for the impact related to certain deferred cash-based compensation plans linked to investment performance.

12
Definitions of Performance Metrics and Terms
   
Our earnings releases, earnings conference calls, financial presentations and other communications may also include certain metrics which we believe to be useful to us, analysts, investors and other stakeholders by providing further transparency about, or an additional means of assessing, our financial condition and operating results.
   
Page 1:
(a)
Provision for credit losses represents the provision for credit losses on loans held for investment and unfunded lending commitments.
(b)
Net income applicable to Morgan Stanley represents net income, less net income applicable to nonredeemable noncontrolling interests.
(c)
Earnings applicable to Morgan Stanley common shareholders represents net income applicable to Morgan Stanley, less preferred dividends.
   
Page 2:
(a)
The return on average common equity represents annualized earnings applicable to Morgan Stanley common shareholders as a percentage of average common equity.
(b)
Book value per common share represents common equity divided by period end common shares outstanding.
(c)
Tangible book value per common share represents tangible common equity divided by period end common shares outstanding.
(d)
Pre-tax profit margin percentages represent income before provision for income taxes as percentages of net revenues.
(e)
The Firm expense efficiency ratio represents total non‐interest expenses as a percentage of net revenues.
   
Page 3:
(a)
Liquidity Resources, which are primarily held within the Parent Company and its major operating subsidiaries, are comprised of high quality liquid assets (HQLA) and cash deposits with banks ("Liquidity Resources"). The total amount of Liquidity Resources is actively managed by us considering the following components: unsecured debt maturity profile; balance sheet size and composition; funding needs in a stressed environment, inclusive of contingent cash outflows; legal entity, regional and segment liquidity requirements; regulatory requirements; and collateral requirements. Average Liquidity Resources represents the average daily balance for the three months ended December 31, 2023, September 30, 2023 and December 31, 2022.
(b)
The Firm's goodwill and intangible balances utilized in the calculation of tangible common equity are net of certain mortgage servicing rights deduction.
(c)
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, as well as deposits from the Parent Company and affiliates.
(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 23 to the consolidated financial statements included in the Firm's 2022 Form 10-K.
   
Page 4:
(a)
The Firm's attribution of average common equity to the business segments is based on the Required Capital Framework, an internal capital adequacy measure. This framework is a risk-based and leverage-based 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 Required Capital Framework is based on the Firm's regulatory capital requirements. 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 Company common equity. The amount of capital allocated to the business segments is generally set at the beginning of the year, and will remain fixed throughout the year until the next annual reset unless a significant business change occurs (e.g., acquisition or disposition). The Firm continues to evaluate its Required Capital Framework with respect to the impact of evolving regulatory requirements, as appropriate. For further discussion of the framework, refer to "Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources – Regulatory Requirements" in the Firm’s 2022 Form 10‐K.
(b)
The Firm's risk‐based capital ratios are computed under each of the (i) standardized approaches for calculating credit risk and market risk risk‐weighted assets (RWAs) (the “Standardized Approach”) and (ii) applicable advanced approaches for calculating credit risk, market risk and operational risk RWAs (the “Advanced Approach”). For information on the calculation of regulatory capital and ratios, and associated regulatory requirements, please refer to "Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources – Regulatory Requirements" in the Firm’s 2022 Form 10‐K.
(c)
Supplementary leverage ratio represents Tier 1 capital divided by the total supplementary leverage exposure.
   
Page 5:
(a)
Institutional Securities Equity and Fixed income net revenues include trading, net interest income (interest income less interest expense), asset management, commissions and fees, investments and other revenues which are directly attributable to those businesses.
(b)
Pre-tax profit margin percentages represent income before provision for income taxes as percentages of net revenues.
(c)
VaR represents the unrealized loss in portfolio value 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 "Quantitative and Qualitative Disclosures about Risk" included in the Firm's 2022 Form 10-K.
   
Page 6:
(a)
Transactional revenues for the Wealth Management segment includes investment banking, trading, and commissions and fee revenues.
(b)
Net interest income represents interest income less interest expense.
(c)
Other revenues for the Wealth Management segment includes investments and other revenues.
(d)
Pre-tax profit margin percentages represent income before provision for income taxes as percentages of net revenues.

13
Definitions of Performance Metrics and Terms

Our earnings releases, earnings conference calls, financial presentations and other communications may also include certain metrics which we believe to be useful to us, analysts, investors and other stakeholders by providing further transparency about, or an additional means of assessing, our financial condition and operating results.

Page 7:
(a)
Client assets represent those for which Wealth Management is providing services including financial advisor-led brokerage, custody, administrative and investment advisory services; self-directed brokerage services; financial and wealth planning services; workplace services, including stock plan administration, and retirement plan services.
(b)
Net new assets represent client inflows, including dividends and interest, and asset acquisitions, less client outflows, and exclude activity from business combinations/divestitures and the impact of fees and commissions.
(c)
Margin and other lending represents margin lending arrangements, which allow customers to borrow against the value of qualifying securities and other lending which includes non‐purpose securities-based lending on non‐bank entities.
(d)
Deposits reflect liabilities sourced from Wealth Management clients and other sources of funding on the U.S. Bank Subsidiaries. Deposits include sweep deposit programs, savings and other, and time deposits.
(e)
Annualized weighted average cost of deposits represents the total annualized weighted average cost of the various deposit products, excluding the effect of related hedging derivatives. The period end cost of deposits is based upon balances and rates as of December 31, 2023, September 30, 2023 and December 31, 2022. The period average is based on daily balances and rates for the period.
(f)
Advisor-led client assets represent client assets in accounts that have a Wealth Management representative assigned.
(g)
Fee‐based client assets represent the amount of assets in client accounts where the basis of payment for services is a fee calculated on those assets.
(h)
Fee-based asset flows include net new fee-based assets (including asset acquisitions), net account transfers, dividends, interest and client fees, and exclude institutional cash management related activity. For a description of the Inflows and Outflows included in Fee-based asset flows, see Fee-based client assets in the 2022 Form 10-K.
(i)
Self-directed client assets represent active accounts which are not advisor led. Active accounts are defined as having at least $25 in assets.
(j)
Daily average revenue trades (DARTs) represent the total self-directed trades in a period divided by the number of trading days during that period.
(k)
Self-directed households represent the total number of households that include at least one account with self-directed client assets. Individual households or participants that are engaged in one or more of our Wealth Management channels are included in each of the respective channel counts.
(l)
The workplace channel assets includes equity compensation solutions for companies, their executives and employees. Stock plan unvested assets represent the market value of public company securities at the end of the period.
(m)
Stock plan participants represent total accounts with vested and/or unvested stock plan assets in the workplace channel. Individuals with accounts in multiple plans are counted as participants in each plan.
   
Page 8:
(a)
Asset management and related fees represents management and administrative fees, distribution fees, and performance-based fees, not in the form of carried interest. Asset management and related fees represents Asset management as reported on the Firm’s consolidated income statement.
(b)
Performance-based income and other includes performance-based fees in the form of carried interest, gains and losses from investments, gains and losses from hedges on seed capital and certain employee deferred compensation plans, net interest, and other revenues. Performance-based income and other represents investments, investment banking, trading, net interest and other revenues as reported on the Firm’s consolidated income statement.
(c)
Pre-tax profit margin percentages represent income before provision for income taxes as percentages of net revenues.
   
Page 9:
(a)
Investment Management Alternatives and Solutions asset class includes products in Fund of Funds, Real Estate, Private Equity and Credit strategies, Multi‐Asset portfolios, as well as Custom Separate Account portfolios.
(b)
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.
(c)
Overlay Services represents investment strategies that use passive exposure instruments to obtain, offset, or substitute specific portfolio exposures beyond those provided by the underlying holdings of the fund.
(d)
Total assets under management or supervision excludes shares of minority stake assets which represent the Investment Management business segment’s proportional share of assets managed by third-party asset managers in which we hold investments accounted for under the equity method.
   
Page 10 and 11:
(a)
Corporate loans include relationship and event-driven loans and typically consist of revolving lines of credit, term loans and bridge loans.
(b)
Secured lending facilities include loans provided to clients, which are primarily secured by loans, which are, in turn, collateralized by various assets including residential real estate, commercial real estate, corporate and financial assets.
(c)
Securities-based lending and other includes financing extended to sales and trading customers and corporate loans purchased in the secondary market.
(d)
Institutional Securities Lending Commitments principally include Corporate lending activity.

14
Supplemental Quantitative Details and Calculations
 
Page 1:
(1)
The following sets forth the net revenue impact of mark-to-market gains and losses on investments associated with DCP and compensation expense impact related to DCP:

     
4Q23
      
3Q23
      
4Q22
    
4Q23 YTD
    
4Q22 YTD
  
Net revenues
  
$
12,896
    
$
13,273
    
$
12,749
    
$
54,143
    
$
53,668
  
Adjustment for mark-to-market on DCP
    
(369
)
    
202
      
(194
)
    
(434
)
    
1,198
  
Adjusted Net revenues - non-GAAP
  
$
12,527
    
$
13,475
    
$
12,555
    
$
53,709
    
$
54,866
  
                                         
Compensation expense
  
$
5,951
    
$
5,935
    
$
5,615
    
$
24,558
    
$
23,053
  
Adjustment for mark-to-market on DCP
    
(354
)
    
57
      
(189
)
    
(668
)
    
716
  
Adjusted Compensation expense - non-GAAP
  
$
5,597
    
$
5,992
    
$
5,426
    
$
23,890
    
$
23,769
  

-
   Compensation expense for deferred cash-based compensation awards is calculated based on the notional value of the award granted, adjusted for changes in the fair value of the referenced investments that employees select. Compensation expense is recognized over the vesting period relevant to each separately vesting portion of deferred awards.
-
  The Firm invests directly, as a principal, in financial instruments and other investments to economically hedge certain of its obligations under these deferred cash-based compensation plans. Changes in the fair value of such investments, net of financing costs, are recorded in Net revenues, and included in Transactional revenues in the Wealth Management business segment. Although changes in compensation expense resulting from changes in the fair value of the referenced investments will generally be offset by changes in the fair value of investments recognized in net revenues, there is typically a timing difference between the immediate recognition of gains and losses on the Firm’s investments and the deferred recognition of the related compensation expense over the vesting period.  While this timing difference may not be material to Income before provision for income taxes for the Firm in any individual period, it may impact the Wealth Management business segment reported ratios and operating metrics in certain periods due to potentially significant impacts to net revenues and compensation expenses.

(2)
The Firm non-interest expenses by category are as follows:

      4Q23       3Q23       4Q22     4Q23 YTD     4Q22 YTD  
Compensation and benefits (a)
  
$
5,951
    
$
5,935
    
$
5,615
    
$
24,558
    
$
23,053
  
                                         
Non-compensation expenses:
                                        
Brokerage, clearing and exchange fees
    
865
      
855
      
851
      
3,476
      
3,458
  
Information processing and communications
    
987
      
947
      
933
      
3,775
      
3,493
  
Professional services
    
822
      
759
      
853
      
3,058
      
3,070
  
Occupancy and equipment
    
528
      
456
      
443
      
1,895
      
1,729
  
Marketing and business development
    
224
      
191
      
295
      
898
      
905
  
Other (b)(c)
    
1,420
      
851
      
878
      
4,138
      
3,591
  
Total non-compensation expenses
    
4,846
      
4,059
      
4,253
      
17,240
      
16,246
  
Total non-interest expenses
  
$
10,797
    
$
9,994
    
$
9,868
    
$
41,798
    
$
39,299
  


(a)
The Firm recorded severance costs of $353 million and $133 million, respectively, for the twelve months ended December 31, 2023 and 2022, associated with employee actions. The severance costs were reported in the business segments' results as follows: Institutional Securities: 4Q23 YTD: $220 million and 4Q22 YTD: $88 million; Wealth Management: 4Q23 YTD: $105 million and 4Q22 YTD: $30 million; Investment Management: 4Q23 YTD: $28 million and 4Q22 YTD: $15 million

(b)
For the quarter and twelve months ended December 31, 2023, Firm results included a one-time FDIC Special Assessment of $286 million and was reported in the business segments' results as follows: Institutional Securities: 4Q23 and 4Q23 YTD: $121 million; Wealth Management: 4Q23 and 4Q23 YTD: $165 million
  (c)
For the quarter and twelve months ended December 31, 2023, Firm results included a litigation reserve of $249 million related to a specific legal matter, reported in the Institutional Securities business segment.

Page 2:
(1)
(a)
For the quarter and twelve months ended December 31, 2023, Firm results included pre-tax integration-related expenses of $49 million and $293 million, respectively. For the quarter and twelve months ended December 31, 2022, Firm results included pre-tax integration-related expenses of $120 million and $470 million, respectively. The pre-tax integration-related expenses were reported in the business segments' results as follows: Wealth Management: 4Q23: $30 million, 4Q23 YTD: $201 million, 4Q22: $94 million, 4Q22 YTD: $357 million; Investment Management: 4Q23: $19 million, 4Q23 YTD: $92 million, 4Q22: $26 million, 4Q22 YTD: $113 million
 
(b)
For the quarter and twelve months ended December 31, 2023, Firm results included a one-time FDIC Special Assessment of $286 million and was reported in the business segments' results as follows: Institutional Securities: 4Q23 and 4Q23 YTD: $121 million; Wealth Management: 4Q23 and 4Q23 YTD: $165 million
 
(c)
For the quarter and twelve months ended December 31, 2023, Firm results included a litigation reserve of $249 million related to a specific legal matter, reported in the Institutional Securities business segment.
(2)
  The effective tax rate for the current quarter and full year reflect the non-deductability of certain items.

Page 3:
(1)
Includes loans held for investment (net of allowance), loans held for sale and also includes loans at fair value which are included in Trading assets on the balance sheet.
(2)
As of December 31, 2023, September 30, 2023 and December 31, 2022, the U.S. Bank investment securities portfolio included held to maturity investment securities of $51.4 billion, $54.0 billion and $56.4 billion, respectively.

Page 5:
(1)
Institutional Securities average tangible common equity represents average common equity adjusted to exclude goodwill and intangible assets net of allowable mortgage servicing rights deduction. The adjustments are as follows: 4Q23: $471mm; 3Q23: $471mm; 4Q22: $576mm; 4Q23 YTD: $471mm; 4Q22 YTD: $576mm

15
Supplemental Quantitative Details and Calculations

Page 6:
(1)
The following sets forth the net revenue impact of mark-to-market gains and losses on investments associated with DCP and compensation expense impact related to DCP:

     
4Q23
      
3Q23
      
4Q22
    
4Q23 YTD
    
4Q22 YTD
  
Net revenues
  
$
6,645
    
$
6,404
    
$
6,626
    
$
26,268
    
$
24,417
  
Adjustment for mark-to-market on DCP
    
(242
)
    
143
      
(106
)
    
(282
)
    
858
  
Adjusted Net revenues - non-GAAP
  
$
6,403
    
$
6,547
    
$
6,520
    
$
25,986
    
$
25,275
  
                                         
Compensation expense
  
$
3,640
    
$
3,352
    
$
3,343
    
$
13,972
    
$
12,534
  
Adjustment for mark-to-market on DCP
    
(234
)
    
48
      
(115
)
    
(412
)
    
530
  
Adjusted Compensation expense - non-GAAP
  
$
3,406
    
$
3,400
    
$
3,228
    
$
13,560
    
$
13,064
  

(2)
Wealth Management average tangible common equity represents average common equity adjusted to exclude goodwill and intangible assets net of allowable mortgage servicing rights deduction. The adjustments are as follows: 4Q23: $14,075mm; 3Q23: $14,075mm; 4Q22: $14,746mm; 4Q23 YTD: $14,075mm; 4Q22 YTD: $14,746mm

Page 7:
(1)
Wealth Management other lending included $2 billion of non-purpose securities based lending on non-bank entities in each period ended December 31, 2023, September 30, 2023 and December 31, 2022.
(2)
For the quarters ended December 31, 2023, September 30, 2023 and December 31, 2022, Wealth Management deposits of $346 billion, $340 billion and $351 billion, respectively, exclude off-balance sheet deposits of $6 billion held by third parties outside of Morgan Stanley as of December 31, 2022 and none as of December 31, 2023 and September 30, 2023. Total deposits details are as follows:

     
4Q23
      
3Q23
      
4Q22
  
Brokerage sweep deposits
  
$
145
    
$
143
    
$
198
  
Other deposits
    
201
      
197
      
153
  
Total balance sheet deposits
    
346
      
340
      
351
  
Off-balance sheet deposits
    
-
      
-
      
6
  
Total deposits
  
$
346
    
$
340
    
$
357
  


Page 8:
(1)
Investment Management average tangible common equity represents average common equity adjusted to exclude goodwill and intangible assets net of allowable mortgage servicing rights deduction. The adjustments are as follows: 4Q23: $9,687mm; 3Q23: $9,687mm; 4Q22: $9,815mm; 4Q23 YTD: $9,687mm; 4Q22 YTD: $9,815mm

Page 10:
(1)
For the quarters ended December 31, 2023, September 30, 2023 and December 31, 2022, Investment Management reflected loan balances of $459 million, $431 million and $222 million, respectively.

Page 11:
(1)
For the quarter ended December 31, 2023, the Allowance Rollforward for Loans and Lending Commitments is as follows:

   
Institutional
Securities
    
Wealth
Management
    
Total
  
Loans
                  
                   
Allowance for Credit Losses (ACL)
                  
Beginning Balance - September 30, 2023
  
$
845
    
$
312
    
$
1,157
  
Net Charge Offs
    
(24
)
    
(1
)
    
(25
)
Provision
    
42
      
(16
)
    
26
  
Other
    
11
      
-
      
11
  
Ending Balance - December 31, 2023
  
$
874
    
$
295
    
$
1,169
  
                         
                         
Lending Commitments
                        
                         
Allowance for Credit Losses (ACL)
                        
Beginning Balance - September 30, 2023
  
$
547
    
$
22
    
$
569
  
Net Charge Offs
    
-
      
-
      
-
  
Provision
    
(20
)
    
(3
)
    
(23
)
Other
    
6
      
(1
)
    
5
  
Ending Balance - December 31, 2023
  
$
533
    
$
18
    
$
551
  
                         
                         
Loans and Lending Commitments
                        
                         
Allowance for Credit Losses (ACL)
                        
Beginning Balance - September 30, 2023
  
$
1,392
    
$
334
    
$
1,726
  
Net Charge Offs
    
(24
)
    
(1
)
    
(25
)
Provision
    
22
      
(19
)
    
3
  
Other
    
17
      
(1
)
    
16
  
Ending Balance - December 31, 2023
  
$
1,407
    
$
313
    
$
1,720
  

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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 fourth quarter earnings press release issued January 16, 2024.









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