a50963144.htm

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 17, 2014

(Exact name of Registrant as specified

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

1585 Broadway, New York, New York 10036

(Address of principal executive offices, including zip code)

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

(Former address, if changed since last report)

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

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

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

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

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

Item 2.02.

Results of Operations and Financial Condition

On October 17, 2014, Morgan Stanley (the "Registrant") released financial information with respect to its quarter ended September 30, 2014. A copy of the press release containing this information is annexed as Exhibit 99.1 to this Report and by this reference incorporated herein and made a part hereof. In addition, a copy of the Registrant's Financial Data Supplement for its quarter ended September 30, 2014 is annexed as Exhibit 99.2 to this Report and by this reference incorporated herein and made a part hereof.

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

Item 9.01.

Financial Statements and Exhibits

	99.1	Press release of the Registrant, dated October 17, 2014, containing financial information for the quarter ended September 30, 2014.


	99.2	Financial Data Supplement of the Registrant for the quarter ended September 30, 2014.

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

	MORGAN STANLEY
	(Registrant)
	By: /s/ Paul C. Wirth
	Paul C. Wirth
	Deputy Chief Financial Officer

Dated: October 17, 2014


Media Relations: Michele Davis 212-761-9621	Investor Relations: Celeste Mellet Brown 212-761-3896

Morgan Stanley Reports Third Quarter 2014:

●	Net Revenues of $8.9 Billion and Earnings per Diluted Share from Continuing Operations of $0.84

●	Excluding DVA,1 Net Revenues were $8.7 Billion and Earnings per Diluted Share from Continuing Operations of $0.772,3

●	Strong Performance in Wealth Management with Pre-Tax Margin of 22%4; Record Revenue per Financial Advisor

●	Investment Banking Ranked #1 in Global IPOs and #2 in Global Announced M&A5; Continued Strength in Equity Sales & Trading

NEW YORK, October 17, 2014 – Morgan Stanley (NYSE: MS) today reported net revenues of $8.9 billion for the third quarter ended September 30, 2014 compared with $8.0 billion a year ago. For the current quarter, income from continuing operations applicable to Morgan Stanley was $1.7 billion, or $0.84 per diluted share,6 compared with income of $889 million, or $0.44 per diluted share6, for the same period a year ago. The current quarter included a net discrete tax benefit of $237 million or $0.12 per diluted share.7

Results for the current quarter included positive revenues related to the change in the fair value of certain of the Firm’s long-term and short-term borrowings resulting from the fluctuation in the Firm’s credit spreads and other credit factors (Debt Valuation Adjustment, DVA) of $215 million, compared with negative revenues of $171 million a year ago.

Excluding DVA, net revenues for the current quarter were $8.7 billion compared with $8.1 billion a year ago.8 Income from continuing operations applicable to Morgan Stanley was $1.6 billion, or $0.77 per diluted share, compared with income of $1.0 billion, or $0.50 per diluted share, a year ago. 2,3,8

Compensation expense of $4.2 billion increased from $4.0 billion a year ago primarily driven by higher revenues. Non-compensation expenses of $2.4 billion decreased from $2.6 billion a year ago primarily reflecting lower litigation costs.

For the current quarter, net income applicable to Morgan Stanley, including discontinued operations, was $1.7 billion or $0.84 per diluted share,6 compared with net income of $906 million or $0.45 per diluted share in the third quarter of 2013.6

Summary of Firm Results (dollars in millions)
	As Reported		Excluding DVA8
	Net	MS Income	Net	MS Income
	Revenues	Cont. Ops.	Revenues	Cont. Ops.
3Q 2014	$8,907	$1,718	$8,692	$1,581
2Q 2014	$8,608	$1,900	$8,521	$1,839
3Q 2013	$7,950	$889	$8,121	$1,010

Business Overview

●	Institutional Securities net revenues excluding DVA were $4.3 billion9 reflecting continued strength in Investment Banking and Equity sales and trading and improved results in Fixed Income and Commodities sales and trading.

●	Wealth Management net revenues were $3.8 billion and pre-tax margin was 22%.4 Fee based asset flows for the quarter were $6.5 billion, with total client assets above $2.0 trillion at quarter end.

●	Investment Management reported net revenues of $655 million with assets under management or supervision of $398 billion.

James P. Gorman, Chairman and Chief Executive Officer, said, “Morgan Stanley has delivered another quarter of earnings growth and strong performance based on consistent execution for our clients. We are well positioned to create superior returns for our shareholders, particularly as the U.S. economy continues to strengthen.”

Summary of Institutional Securities Results (dollars in millions)
	As Reported		Excluding DVA9
	Net	Pre-Tax	Net	Pre-Tax
	Revenues	Income	Revenues	Income
3Q 2014	$4,516	$1,225	$4,301	$1,010
2Q 2014	$4,248	$961	$4,161	$874
3Q 2013	$3,704	$396	$3,875	$567

INSTITUTIONAL SECURITIES

Institutional Securities reported pre-tax income from continuing operations of $1.2 billion compared with $396 million in the third quarter of last year. The quarter’s pre-tax margin was 27% (excluding DVA, 23%).4,9 Income after the noncontrolling interest allocation and before taxes was $1.2 billion.10 Net revenues for the current quarter were $4.5 billion compared with $3.7 billion a year ago. DVA resulted in positive revenues of $215 million in the current quarter compared with negative revenues of $171 million a year ago. Excluding DVA, net revenues for the current quarter of $4.3 billion compared with $3.9 billion a year ago.9 The following discussion for sales and trading excludes DVA.

●

Advisory revenues of $392 million increased from $275 million a year ago on higher levels of completed M&A activity. Equity underwriting revenues of $464 million increased from $236 million a year ago reflecting higher IPO volumes. Fixed income underwriting revenues of $484 million were relatively unchanged from the prior year quarter, continuing to reflect a favorable debt underwriting environment.

●	Equity sales and trading net revenues of $1.8 billion increased from $1.7 billion a year ago reflecting strong performance in prime brokerage, partly offset by lower revenues in derivatives.11

●	Fixed Income & Commodities sales and trading net revenues of $997 million increased from $835 million a year ago.11 Results reflected higher revenues in foreign exchange and securitized products, partly offset by lower results in commodities and credit products.

●

Other sales and trading net losses of $84 million compared with a net loss of $158 million a year ago reflecting lower costs related to the Firm’s long-term debt and higher corporate lending and commitment revenues, partly offset by losses related to investments in the Firm’s deferred compensation plans.

●	Investment revenues were $39 million compared with $337 million in the third quarter of last year. Results for the prior year period reflected a gain resulting from the disposition of an investment in an insurance broker.

●	Other revenues of $225 million increased from $159 million a year ago reflecting gains related to the sale of TransMontaigne Inc. and a retail property space, partly offset by lower results in our Japanese joint venture Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.12

●	Compensation expense of $1.8 billion increased from $1.6 billion a year ago on higher revenues. Non-compensation expenses of $1.5 billion for the current quarter decreased from $1.7 billion a year ago driven primarily by lower litigation costs.

●	Morgan Stanley’s average trading Value-at-Risk (VaR) measured at the 95% confidence level was $42 million compared with $48 million in the second quarter of 2014 and $52 million in the third quarter of the prior year.13

Summary of Wealth Management Results (dollars in millions)

	Net	Pre-Tax
	Revenues	Income
3Q 2014	$3,785	$836
2Q 2014	$3,715	$767
3Q 2013	$3,481	$668

WEALTH MANAGEMENT

Wealth Management reported pre-tax income from continuing operations of $836 million compared with $668 million in the third quarter of last year. The quarter’s pre-tax margin was 22%.4 Net revenues for the current quarter were $3.8 billion compared with $3.5 billion a year ago.

●	Asset management fee revenues of $2.2 billion increased from $1.9 billion a year ago primarily reflecting market appreciation and positive flows.

●	Transactional revenues 14 of $912 million decreased from $1.0 billion a year ago reflecting losses related to investments in the Firm’s deferred compensation plans and lower fixed income activity, partly offset by an increase in closed-end fund and other new issue activity.

●	Other revenues of $112 million increased from $75 million a year ago principally driven by a gain related to the sale of a retail property space.12

●	Net interest income of $601 million increased from $493 million a year ago on higher deposits and loan balances.

●

Compensation expense for the current quarter of $2.2 billion increased from $2.0 billion a year ago on higher net revenues, partly offset by a decrease in the fair value of deferred compensation plan referenced investments. Non-compensation expenses of $767 million decreased from $796 million a year ago primarily due to operating efficiencies resulting from the prior year’s completion of the joint venture acquisition as well as continued expense discipline.

●	Total client assets exceeded $2.0 trillion at quarter end. Client assets in fee based accounts of $768 billion increased 18% compared with the prior year quarter. Fee based asset flows for the quarter were $6.5 billion.

●

Wealth Management representatives of 16,162 decreased from 16,517 compared with the prior year quarter. Average annualized revenue per representative of $932,000 and total client assets per representative of $124 million, both records, increased 10% and 13%, respectively, compared with the prior year quarter.

Summary of Investment Management Results (dollars in millions)

	Net	Pre-Tax
	Revenues	Income
3Q 2014	$655	$188
2Q 2014	$692	$205
3Q 2013	$828	$300

INVESTMENT MANAGEMENT

Investment Management reported pre-tax income from continuing operations of $188 million compared with pre-tax income of $300 million in the third quarter of last year.15 The quarter’s pre-tax margin was 29%.4 Income after the noncontrolling interest allocation and before taxes was $170 million.

●

Net revenues of $655 million decreased from $828 million in the prior year. Results reflect lower investment gains and carried interest in the Merchant Banking and Real Estate Investing businesses, partly offset by higher results in Traditional Asset Management.16,17 The current quarter also reflects lower revenues in the Real Estate Investing business driven by the deconsolidation of certain legal entities associated with a real estate fund sponsored by the Firm.

●

Compensation expense for the current quarter of $253 million decreased from $332 million a year ago, principally due to a decrease in the fair value of deferred compensation plan referenced investments. Non-compensation expenses of $214 million increased from $196 million a year ago driven by higher legal costs and brokerage and clearing expenses.

●	Assets under management or supervision at September 30, 2014 of $398 billion increased from $360 billion a year ago primarily due to market appreciation and positive flows. The business recorded net flows of $7.6 billion in the current quarter.

CAPITAL

As of September 30, 2014, the Firm’s Common Equity Tier 1 risk-based capital ratio was approximately 14.3% and its Tier 1 risk-based capital ratio was approximately 16.1%. The Firm is subject to a “capital floor” such that these regulatory capital ratios currently reflect the U.S. Basel III Advanced Approaches (“Advanced Approach”) transitional rules, which represent the lower of the Firm’s capital ratios calculated under the Advanced Approach and U.S. Basel I and Basel 2.5 capital rules, taking into consideration applicable transitional provisions under U.S. Basel III.18

At September 30, 2014, book value and tangible book value per common share were $34.17 and $29.25,19 respectively, based on approximately 2.0 billion shares outstanding.

OTHER MATTERS

The effective tax rate from continuing operations for the current quarter was 21.0%. The quarter included a discrete net tax benefit of approximately $237 million primarily associated with the repatriation of non-U.S. earnings at a cost lower than originally estimated.

During the quarter ended September 30, 2014, the Firm repurchased approximately $195 million of its common stock or approximately 5.9 million shares.

The Firm declared a $0.10 quarterly dividend per common share, payable on November 14, 2014 to common shareholders of record on October 31, 2014.

Morgan Stanley is a leading global financial services firm providing a wide range of investment banking, securities, investment management and wealth management services. With offices in more than 43 countries, the Firm’s employees serve clients worldwide including corporations, governments, institutions and individuals. For further information about Morgan Stanley, please visit www.morganstanley.com.

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

# # #

(See Attached Schedules)

This earnings release contains forward-looking statements. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on which they are made and which reflect management's current estimates, projections, expectations or beliefs and which are subject to risks and uncertainties that may cause actual results to differ materially. For a discussion of additional risks and uncertainties that may affect the future results of the Company, please see “Forward-Looking Statements” immediately preceding Part I, Item 1, “Competition” and “Supervision and Regulation” in Part I, Item 1, “Risk Factors” in Part I, Item 1A, “Legal Proceedings” in Part I, Item 3, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 and “Quantitative and Qualitative Disclosures about Market Risk” in Part II, Item 7A in the Company's Annual Report on Form 10-K for the year ended December 31, 2013 and other items throughout the Form 10-K, the Company’s Quarterly Reports on Form 10-Q and the Company’s Current Reports on Form 8-K, including any amendments thereto.

1 Represents the change in the fair value of certain of the Firm’s long-term and short-term borrowings resulting from the fluctuation in the Firm’s credit spreads and other credit factors (Debt Valuation Adjustment, DVA).

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

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

	3Q 2014	3Q 2013
Earnings (loss) per diluted share from cont. ops. – Non-GAAP	$0.77	$0.50
DVA impact	$0.07	($0.06)
Earnings (loss) per diluted share from cont. ops. – GAAP	$0.84	$0.44

Average diluted shares – Non-GAAP	1,971	1,965
DVA impact	0	0
Average diluted shares – GAAP	1,971	1,965

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

5 Source: Thomson Reuters – for the period of January 1, 2014 to September 30, 2014 as of October 1, 2014.

6 Includes preferred dividends and other adjustments related to the calculation of earnings per share for the third quarter of 2014 and 2013 of approximately $64 million and $26 million, respectively. Refer to page 3 of Morgan Stanley’s Financial Supplement accompanying this release for the calculation of earnings per share.

7 The impact to earnings per diluted share from continuing operations is calculated by dividing the net discrete tax benefit by the average number of diluted shares outstanding.

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

	3Q 2014	2Q 2014	3Q 2013
Firm net revenues – Non-GAAP	$8,692	$8,521	$8,121
DVA impact	$215	$87	$(171)
Firm net revenues – GAAP	$8,907	$8,608	$7,950

Income (loss) applicable to MS – Non-GAAP	$1,581	$1,839	$1,010
DVA after-tax impact	$137	$61	$(121)
Income (loss) applicable to MS – GAAP	$1,718	$1,900	$889

9 Institutional Securities net revenues and pre-tax income (loss), excluding DVA, are non-GAAP financial measures that the Firm considers useful for investors to allow for better comparability of period-to-period operating performance. The reconciliation of net revenues and pre-tax income (loss) from a non-GAAP to GAAP basis is as follows (amounts are presented in millions):

	3Q 2014	2Q 2014	3Q 2013
Net revenues – Non-GAAP	$4,301	$4,161	$3,875
DVA impact	$215	$87	$(171)
Net revenues – GAAP	$4,516	$4,248	$3,704

Pre-tax income (loss) – Non-GAAP	$1,010	$874	$567
DVA impact	$215	$87	$(171)
Pre-tax income (loss) – GAAP	$1,225	$961	$396

10 Noncontrolling interests reported in the Institutional Securities business segment includes the allocation to Mitsubishi UFJ Financial Group, Inc. of Morgan Stanley MUFG Securities Co., Ltd., which the Firm consolidates.

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

	3Q 2014	3Q 2013
Sales & Trading – Non-GAAP	$2,697	$2,387
DVA impact	$215	$(171)
Sales & Trading – GAAP	$2,912	$2,216

FIC Sales & Trading – Non-GAAP	$997	$835
DVA impact	$132	$(141)
FIC Sales & Trading – GAAP	$1,129	$694

Equity Sales & Trading – Non-GAAP	$1,784	$1,710
DVA impact	$83	$(30)
Equity Sales & Trading – GAAP	$1,867	$1,680

12 The third quarter ended September 30, 2014 included a pre-tax gain of $141 million associated with the sale of a retail property space, which was reflected in other revenues in each of the business segments’ results as follows: Institutional Securities: $84 million, Wealth Management: $40 million and Investment Management: $17 million.

13 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 Morgan Stanley’s Annual Report on Form 10-K for the year ended December 31, 2013. Refer to page 7 of Morgan Stanley’s Financial Supplement accompanying this release for the VaR disclosure.

14 Transactional revenues include investment banking, trading, and commissions and fee revenues.

15 Results for the third quarter of 2014 and 2013 included pre-tax income of $17 million and $65 million, respectively, related to investments held by certain consolidated real estate funds. The limited partnership interests in these funds are reported in net income (loss) applicable to nonredeemable noncontrolling interests on page 10 of Morgan Stanley’s Financial Supplement accompanying this release.

16 Net revenues for the current quarter included gains of $17 million compared with gains of $67 million in the prior year third quarter related to investments held by certain consolidated real estate funds.

17 Carried interest represents an additional allocation of fund income to the Firm, as general partner upon exceeding cumulative fund performance thresholds.

18 As an Advanced Approach banking organization, the Firm is required to compute risk-based capital ratios using both (i) standardized approaches for calculating credit risk weighted assets (“RWAs”) and market risk RWAs (the “Standardized Approach”); and (ii) an advanced internal ratings-based approach for calculating credit risk RWAs, an advanced measurement approach for calculating operational risk RWAs, and an advanced approach for market risk RWAs calculated under Basel III (the “Advanced Approach”). To implement a provision of the Dodd-Frank Act, U.S. Basel III subjects Advanced Approach banking organizations which have been approved by their regulators to exit the parallel run, such as the Firm, to a permanent “capital floor”. In calendar year 2014, the capital floor results in the Firm’s capital ratios being the lower of the capital ratios computed under the Advanced Approach or the U.S. Basel I-based rules as supplemented by the existing market risk rules known as “Basel 2.5”. For the current quarter, the Firm's capital floor is represented by the Advanced Approach. Beginning on January 1, 2015, the capital floor will result in the Firm’s capital ratios being the lower of the capital ratios computed under the Advanced Approach or the Standardized Approach under U.S. Basel III. These computations are preliminary estimates as of October 17, 2014 (the date of this release) and could be subject to revision in Morgan Stanley’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2014. The methods for calculating the Firm’s risk-based capital ratios will change through 2022 as aspects of the U.S. Basel III final rule are phased in. The Firm’s capital takes into consideration regulatory capital requirements as well as capital required for organic growth, acquisitions and other business needs.

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

MORGAN STANLEY
Quarterly Financial Summary
(unaudited, dollars in millions, except for per share data)



	Quarter Ended									Percentage Change From:						Nine Months Ended						Percentage
	Sept 30, 2014			June 30, 2014			Sept 30, 2013			June 30, 2014			Sept 30, 2013			Sept 30, 2014			Sept 30, 2013			Change
Net revenues
Institutional Securities	$	4,516		$	4,248		$	3,704			6	%		22	%	$	13,391		$	12,161			10	%
Wealth Management		3,785			3,715			3,481			2	%		9	%		11,122			10,482			6	%
Investment Management		655			692			828			(5	%)		(21	%)		2,087			2,146			(3	%)
Intersegment Eliminations		(49	)		(47	)		(63	)		(4	%)		22	%		(138	)		(156	)		12	%
Consolidated net revenues	$	8,907		$	8,608		$	7,950			3	%		12	%	$	26,462		$	24,633			7	%

Income (loss) from continuing operations before tax
Institutional Securities	$	1,225		$	961		$	396			27	%		*		$	3,557		$	2,194			62	%
Wealth Management		836			767			668			9	%		25	%		2,294			1,920			19	%
Investment Management		188			205			300			(8	%)		(37	%)		656			647			1	%
Intersegment Eliminations		0			0			0			--			--			0			0			--
Consolidated income (loss) from continuing operations before tax	$	2,249		$	1,933		$	1,364			16	%		65	%	$	6,507		$	4,761			37	%

Income (loss) applicable to Morgan Stanley
Institutional Securities	$	1,098		$	1,294		$	324			(15	%)		*		$	3,317		$	1,549			114	%
Wealth Management		501			471			430			6	%		17	%		1,395			1,012			38	%
Investment Management		119			135			135			(12	%)		(12	%)		372			320			16	%
Intersegment Eliminations		0			0			0			--			--			0			0			--
Consolidated income (loss) applicable to Morgan Stanley	$	1,718		$	1,900		$	889			(10	%)		93	%	$	5,084		$	2,881			76	%

Earnings (loss) applicable to Morgan Stanley common shareholders	$	1,649		$	1,820		$	880			(9	%)		87	%	$	4,918		$	2,619			88	%

Earnings per basic share:
Income from continuing operations	$	0.86		$	0.94		$	0.45			(9	%)		91	%	$	2.54		$	1.39			83	%
Discontinued operations	$	-		$	-		$	0.01			--			*		$	0.01		$	(0.02	)		*
Earnings per basic share	$	0.86		$	0.94		$	0.46			(9	%)		87	%	$	2.55		$	1.37			86	%

Earnings per diluted share:
Income from continuing operations	$	0.84		$	0.92		$	0.44			(9	%)		91	%	$	2.48		$	1.36			82	%
Discontinued operations	$	-		$	-		$	0.01			--			*		$	0.02		$	(0.02	)		*
Earnings per diluted share	$	0.84		$	0.92		$	0.45			(9	%)		87	%	$	2.50		$	1.34			87	%

Financial Metrics:

Return on average common equity from continuing operations		10.0	%		11.3	%		5.6	%								10.1	%		5.8	%
Return on average common equity		10.0	%		11.3	%		5.7	%								10.2	%		5.7	%

Return on average common equity from continuing operations excluding DVA		9.0	%		10.7	%		6.3	%								9.4	%		6.1	%
Return on average common equity excluding DVA		9.0	%		10.7	%		6.4	%								9.4	%		6.0	%

Common Equity Tier 1 capital ratio Advanced (Transitional)		14.3	%		13.9	%		12.6	%
Tier 1 capital ratio Advanced (Transitional)		16.1	%		15.4	%		15.3	%

Book value per common share	$	34.17		$	33.46		$	32.13
Tangible book value per common share	$	29.25		$	28.51		$	26.96

Notes:	- Results for the quarters ended September 30, 2014, June 30, 2014 and September 30, 2013, include positive (negative) revenue of $215 million, $87 million and $(171) million, respectively, related to the change in the fair value of certain of the Firm's long-term and short-term borrowings resulting from the fluctuation in the Firm's credit spreads and other credit factors (Debt Valuation Adjustment, DVA). The nine months ended September 30, 2014 and September 30, 2013, include positive (negative) revenue of $428 million and $(313) million, respectively, related to the movement in DVA.
	- The return on average common equity metrics, return on average common equity excluding DVA metrics, and tangible book value per common share are non-GAAP measures that the Firm considers to be useful measures to assess operating performance and capital adequacy.
	- In the quarter ended June 30, 2014, the Firm began using the U.S. Basel III Advanced Approaches (Advanced Approach) to calculate its regulatory capital requirements. Prior periods have not been recast to reflect the new requirements.
	- Common Equity Tier 1 capital ratio Advanced (Transitional) and the Tier 1 capital ratio Advanced (Transitional) equals Common Equity Tier 1 capital divided by risk-weighted assets (RWAs) and Tier 1 capital divided by RWAs, respectively.
	- Book value per common share equals common equity divided by period end common shares outstanding.
	- Tangible book value per common share equals tangible common equity divided by period end common shares outstanding.
	- See page 4 and related End Notes of the Financial Supplement for additional information related to the calculation of the financial metrics.

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


	Quarter Ended									Percentage Change From:						Nine Months Ended						Percentage
	Sept 30, 2014			June 30, 2014			Sept 30, 2013			June 30, 2014			Sept 30, 2013			Sept 30, 2014			Sept 30, 2013			Change
Revenues:
Investment banking	$	1,551		$	1,633		$	1,160			(5	%)		34	%	$	4,492		$	3,687			22	%
Trading		2,448			2,516			2,259			(3	%)		8	%		7,926			7,847			1	%
Investments		138			227			728			(39	%)		(81	%)		724			1,254			(42	%)
Commissions and fees		1,124			1,138			1,079			(1	%)		4	%		3,478			3,463			--
Asset management, distribution and admin. fees		2,716			2,621			2,389			4	%		14	%		7,886			7,139			10	%
Other		373			206			225			81	%		66	%		824			747			10	%
Total non-interest revenues		8,350			8,341			7,840			--			7	%		25,330			24,137			5	%

Interest income		1,384			1,250			1,261			11	%		10	%		3,977			3,873			3	%
Interest expense		827			983			1,151			(16	%)		(28	%)		2,845			3,377			(16	%)
Net interest		557			267			110			109	%		*			1,132			496			128	%
Net revenues		8,907			8,608			7,950			3	%		12	%		26,462			24,633			7	%

Non-interest expenses:
Compensation and benefits		4,215			4,200			3,965			--			6	%		12,720			12,282			4	%

Non-compensation expenses:
Occupancy and equipment		349			359			372			(3	%)		(6	%)		1,067			1,123			(5	%)
Brokerage, clearing and exchange fees		437			458			416			(5	%)		5	%		1,338			1,300			3	%
Information processing and communications		396			411			404			(4	%)		(2	%)		1,231			1,322			(7	%)
Marketing and business development		160			165			151			(3	%)		6	%		472			448			5	%
Professional services		522			532			447			(2	%)		17	%		1,506			1,345			12	%
Other		579			550			831			5	%		(30	%)		1,621			2,052			(21	%)
Total non-compensation expenses		2,443			2,475			2,621			(1	%)		(7	%)		7,235			7,590			(5	%)

Total non-interest expenses		6,658			6,675			6,586			--			1	%		19,955			19,872			--

Income (loss) from continuing operations before taxes		2,249			1,933			1,364			16	%		65	%		6,507			4,761			37	%
Income tax provision / (benefit) from continuing operations		472			15			363			*			30	%		1,267			1,288			(2	%)
Income (loss) from continuing operations		1,777			1,918			1,001			(7	%)		78	%		5,240			3,473			51	%
Gain (loss) from discontinued operations after tax		(5	)		(1	)		17			*			*			33			(33	)		*
Net income (loss)	$	1,772		$	1,917		$	1,018			(8	%)		74	%	$	5,273		$	3,440			53	%
Net income applicable to redeemable noncontrolling interests		0			0			0			--			--			0			222			*
Net income applicable to nonredeemable noncontrolling interests		59			18			112			*			(47	%)		156			370			(58	%)
Net income (loss) applicable to Morgan Stanley		1,713			1,899			906			(10	%)		89	%		5,117			2,848			80	%
Preferred stock dividend / Other		64			79			26			(19	%)		146	%		199			229			(13	%)
Earnings (loss) applicable to Morgan Stanley common shareholders	$	1,649		$	1,820		$	880			(9	%)		87	%	$	4,918		$	2,619			88	%

Amounts applicable to Morgan Stanley:
Income (loss) from continuing operations		1,718			1,900			889			(10	%)		93	%		5,084			2,881			76	%
Gain (loss) from discontinued operations after tax		(5	)		(1	)		17			*			*			33			(33	)		*
Net income (loss) applicable to Morgan Stanley	$	1,713		$	1,899		$	906			(10	%)		89	%	$	5,117		$	2,848			80	%

Pre-tax profit margin		25	%		23	%		17	%								25	%		19	%
Compensation and benefits as a % of net revenues		47	%		49	%		50	%								48	%		50	%
Non-compensation expenses as a % of net revenues		27	%		29	%		33	%								27	%		31	%
Effective tax rate from continuing operations		21.0	%		0.8	%		26.6	%								19.5	%		27.1	%

Notes:	- Pre-tax profit margin and return on average common equity are non-GAAP financial measures that the Firm considers to be a useful measure to assess operating performance.
	- Other revenues for the quarter ended September 30, 2014 included a gain of $141 million related to the sale of a retail property space (allocated to the business segments as follows: Institutional Securities: $84 million, Wealth Management: $40 million and Investment Management: $17 million), and a gain related to the sale of TransMontaigne Inc. reported in the Institutional Securities business segment.
	- In the quarter ended September 30, 2014, income tax provision / (benefit) from continuing operations included a net discrete tax benefit of $237 million (reported in the Institutional Securities business segment) primarily associated with the repatriation of non-U.S. earnings at a cost lower than originally estimated.
	- In the quarter ended June 30, 2014, income tax provision / (benefit) from continuing operations included a net discrete tax benefit of $609 million (primarily reported in the Institutional Securities business segment) principally related to the remeasurement of reserves and related interest due to new information regarding the status of a multi-year tax authority examination.
	- The quarter ended September 30, 2013 included a discrete net tax benefit of $73 million attributable to tax planning strategies to optimize foreign tax credit utilization in anticipation of the repatriation of earnings from certain non-U.S. subsidiaries.

MORGAN STANLEY
Quarterly Earnings Per Share
(unaudited, dollars in millions, except for per share data)


	Quarter Ended								Percentage Change From:						Nine Months Ended					Percentage
	Sept 30, 2014			June 30, 2014			Sept 30, 2013		June 30, 2014			Sept 30, 2013			Sept 30, 2014		Sept 30, 2013			Change


Income (loss) from continuing operations	$	1,777		$	1,918		$	1,001		(7	%)		78	%	$	5,240	$	3,473			51	%
Net income applicable to redeemable noncontrolling interests		0			0			0		--			--			0		222			*
Net income applicable to nonredeemable noncontrolling interests		59			18			112		*			(47	%)		156		370			(58	%)
Net income (loss) from continuing operations applicable to noncontrolling interests		59			18			112		*			(47	%)		156		592			(74	%)

Income (loss) from continuing operations applicable to Morgan Stanley		1,718			1,900			889		(10	%)		93	%		5,084		2,881			76	%
Less: Preferred Dividends		62			76			24		(18	%)		158	%		192		72			167	%
Less: Morgan Stanley Smith Barney Joint Venture Redemption Adjustment		-			-			-		--			--			-		151			*
Income (loss) from continuing operations applicable to Morgan Stanley, prior to allocation of income to Participating Restricted Stock Units		1,656			1,824			865		(9	%)		91	%		4,892		2,658			84	%

Basic EPS Adjustments:
Less: Allocation of earnings to Participating Restricted Stock Units		2			3			2		(33	%)		--			7		6			17	%
Earnings (loss) from continuing operations applicable to Morgan Stanley common shareholders	$	1,654		$	1,821		$	863		(9	%)		92	%	$	4,885	$	2,652			84	%

Gain (loss) from discontinued operations after tax		(5	)		(1	)		17		*			*			33		(33	)		*
Less: Gain (loss) from discontinued operations after tax applicable to noncontrolling interests		0			0			0		--			--			0		0			--
Gain (loss) from discontinued operations after tax applicable to Morgan Stanley		(5	)		(1	)		17		*			*			33		(33	)		*
Less: Allocation of earnings to Participating Restricted Stock Units		0			0			0		--			--			0		0			--
Earnings (loss) from discontinued operations applicable to Morgan Stanley common shareholders		(5	)		(1	)		17		*			*			33		(33	)		*

Earnings (loss) applicable to Morgan Stanley common shareholders	$	1,649		$	1,820		$	880		(9	%)		87	%	$	4,918	$	2,619			88	%

Average basic common shares outstanding (millions)		1,923			1,928			1,909		--			1	%		1,925		1,906			1	%

Earnings per basic share:
Income from continuing operations	$	0.86		$	0.94		$	0.45		(9	%)		91	%	$	2.54	$	1.39			83	%
Discontinued operations	$	-		$	-		$	0.01		--			*		$	0.01	$	(0.02	)		*
Earnings per basic share	$	0.86		$	0.94		$	0.46		(9	%)		87	%	$	2.55	$	1.37			86	%

Earnings (loss) from continuing operations applicable to Morgan Stanley common shareholders	$	1,654		$	1,821		$	863		(9	%)		92	%	$	4,885	$	2,652			84	%

Earnings (loss) from discontinued operations applicable to Morgan Stanley common shareholders	$	(5	)	$	(1	)	$	17		*			*		$	33	$	(33	)		*

Earnings (loss) applicable to Morgan Stanley common shareholders	$	1,649		$	1,820		$	880		(9	%)		87	%	$	4,918	$	2,619			88	%

Average diluted common shares outstanding and common stock equivalents (millions)		1,971			1,969			1,965		--			--			1,970		1,952			1	%

Earnings per diluted share:
Income from continuing operations	$	0.84		$	0.92		$	0.44		(9	%)		91	%	$	2.48	$	1.36			82	%
Discontinued operations	$	-		$	-		$	0.01		--			*		$	0.02	$	(0.02	)		*
Earnings per diluted share	$	0.84		$	0.92		$	0.45		(9	%)		87	%	$	2.50	$	1.34			87	%

Notes:

- The Firm calculates earnings per share using the two-class method as described under the accounting guidance for earnings per share. For further discussion of the Firm's earnings per share calculations, see page 13 of the Financial Supplement and Note 15 to the consolidated financial statements in the Firm's Quarterly Report on Form 10-Q for the quarter ended June 30, 2014.

MORGAN STANLEY
Financial Supplement - 3Q 2014
Table of Contents
Page #

1	…………….	Quarterly Financial Summary
2	…………….	Quarterly Consolidated Income Statement Information
3	…………….	Quarterly Earnings Per Share Summary
4 - 5	…………….	Quarterly Consolidated Financial Information and Statistical Data
6	…………….	Quarterly Institutional Securities Income Statement Information
7	…………….	Quarterly Institutional Securities Financial Information and Statistical Data
8	…………….	Quarterly Wealth Management Income Statement Information
9	…………….	Quarterly Wealth Management Financial Information and Statistical Data
10	…………….	Quarterly Investment Management Income Statement Information
11	…………….	Quarterly Investment Management Financial Information and Statistical Data
12	…………….	Quarterly Firm Loans and Lending Commitments Financial Information
13	…………….	Earnings Per Share Appendix I
14 - 16	…………….	End Notes
17	…………….	Legal Notice

				MORGAN STANLEY
				Quarterly Financial Summary (1)
				(unaudited, dollars in millions)


	Quarter Ended									Percentage Change From:						Nine Months Ended						Percentage
	Sept 30, 2014			June 30, 2014			Sept 30, 2013			June 30, 2014			Sept 30, 2013			Sept 30, 2014			Sept 30, 2013			Change
Net revenues
Institutional Securities	$	4,516		$	4,248		$	3,704			6	%		22	%	$	13,391		$	12,161			10	%
Wealth Management		3,785			3,715			3,481			2	%		9	%		11,122			10,482			6	%
Investment Management		655			692			828			(5	%)		(21	%)		2,087			2,146			(3	%)
Intersegment Eliminations		(49	)		(47	)		(63	)		(4	%)		22	%		(138	)		(156	)		12	%
Consolidated net revenues	$	8,907		$	8,608		$	7,950			3	%		12	%	$	26,462		$	24,633			7	%

Income (loss) from continuing operations before tax
Institutional Securities	$	1,225		$	961		$	396			27	%		*		$	3,557		$	2,194			62	%
Wealth Management		836			767			668			9	%		25	%		2,294			1,920			19	%
Investment Management		188			205			300			(8	%)		(37	%)		656			647			1	%
Intersegment Eliminations		0			0			0			--			--			0			0			--
Consolidated income (loss) from continuing operations before tax	$	2,249		$	1,933		$	1,364			16	%		65	%	$	6,507		$	4,761			37	%

Income (loss) applicable to Morgan Stanley
Institutional Securities	$	1,098		$	1,294		$	324			(15	%)		*		$	3,317		$	1,549			114	%
Wealth Management		501			471			430			6	%		17	%		1,395			1,012			38	%
Investment Management		119			135			135			(12	%)		(12	%)		372			320			16	%
Intersegment Eliminations		0			0			0			--			--			0			0			--
Consolidated income (loss) applicable to Morgan Stanley	$	1,718		$	1,900		$	889			(10	%)		93	%	$	5,084		$	2,881			76	%


Financial Metrics:

Return on average common equity from continuing operations (2)		10.0	%		11.3	%		5.6	%								10.1	%		5.8	%
Return on average common equity (2)		10.0	%		11.3	%		5.7	%								10.2	%		5.7	%

Return on average common equity from continuing operations excluding DVA (2)		9.0	%		10.7	%		6.3	%								9.4	%		6.1	%
Return on average common equity excluding DVA (2)		9.0	%		10.7	%		6.4	%								9.4	%		6.0	%

Common Equity Tier 1 capital ratio Advanced (Transitional) (3)		14.3	%		13.9	%		12.6	%
Tier 1 capital ratio Advanced (Transitional) (3)		16.1	%		15.4	%		15.3	%

Book value per common share (4)	$	34.17		$	33.46		$	32.13
Tangible book value per common share (5)	$	29.25		$	28.51		$	26.96

Notes:	-	Results for the quarters ended September 30, 2014, June 30, 2014 and September 30, 2013, include positive (negative) revenue of $215 million, $87 million and $(171) million, respectively, related to the change in the fair value of certain of the Firm's long-term and short-term borrowings resulting from the fluctuation in the Firm's credit spreads and other credit factors (Debt Valuation Adjustment, DVA). The nine months ended September 30, 2014 and September 30, 2013, include positive (negative) revenue of $428 million and $(313) million, respectively, related to the movement in DVA.
	-	The return on average common equity metrics, return on average common equity excluding DVA metrics, and tangible book value per common share are non-GAAP measures that the Firm considers to be useful measures to assess
		operating performance and capital adequacy.
	-	In the quarter ended June 30, 2014, the Firm began using the U.S. Basel III Advanced Approaches (Advanced Approach) to calculate its regulatory capital requirements. Prior periods have not been recast to reflect the new requirements.
	-	See page 4 of the Financial Supplement and End Notes for additional information related to the calculation of the financial metrics.
	-	Refer to End Notes on pages 14-16 and Legal Notice on page 17.

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


	Quarter Ended									Percentage Change From:						Nine Months Ended						Percentage
	Sept 30, 2014			June 30, 2014			Sept 30, 2013			June 30, 2014			Sept 30, 2013			Sept 30, 2014			Sept 30, 2013			Change
Revenues:
Investment banking	$	1,551		$	1,633		$	1,160			(5	%)		34	%	$	4,492		$	3,687			22	%
Trading		2,448			2,516			2,259			(3	%)		8	%		7,926			7,847			1	%
Investments		138			227			728			(39	%)		(81	%)		724			1,254			(42	%)
Commissions and fees		1,124			1,138			1,079			(1	%)		4	%		3,478			3,463			--
Asset management, distribution and admin. fees		2,716			2,621			2,389			4	%		14	%		7,886			7,139			10	%
Other		373			206			225			81	%		66	%		824			747			10	%
Total non-interest revenues		8,350			8,341			7,840			--			7	%		25,330			24,137			5	%

Interest income		1,384			1,250			1,261			11	%		10	%		3,977			3,873			3	%
Interest expense		827			983			1,151			(16	%)		(28	%)		2,845			3,377			(16	%)
Net interest		557			267			110			109	%		*			1,132			496			128	%
Net revenues		8,907			8,608			7,950			3	%		12	%		26,462			24,633			7	%
Non-interest expenses:
Compensation and benefits		4,215			4,200			3,965			--			6	%		12,720			12,282			4	%

Non-compensation expenses:
Occupancy and equipment		349			359			372			(3	%)		(6	%)		1,067			1,123			(5	%)
Brokerage, clearing and exchange fees		437			458			416			(5	%)		5	%		1,338			1,300			3	%
Information processing and communications		396			411			404			(4	%)		(2	%)		1,231			1,322			(7	%)
Marketing and business development		160			165			151			(3	%)		6	%		472			448			5	%
Professional services		522			532			447			(2	%)		17	%		1,506			1,345			12	%
Other		579			550			831			5	%		(30	%)		1,621			2,052			(21	%)
Total non-compensation expenses		2,443			2,475			2,621			(1	%)		(7	%)		7,235			7,590			(5	%)

Total non-interest expenses		6,658			6,675			6,586			--			1	%		19,955			19,872			--

Income (loss) from continuing operations before taxes		2,249			1,933			1,364			16	%		65	%		6,507			4,761			37	%
Income tax provision / (benefit) from continuing operations		472			15			363			*			30	%		1,267			1,288			(2	%)
Income (loss) from continuing operations		1,777			1,918			1,001			(7	%)		78	%		5,240			3,473			51	%
Gain (loss) from discontinued operations after tax		(5	)		(1	)		17			*			*			33			(33	)		*
Net income (loss)	$	1,772		$	1,917		$	1,018			(8	%)		74	%	$	5,273		$	3,440			53	%
Net income applicable to redeemable noncontrolling interests (1)		0			0			0			--			--			0			222			*
Net income applicable to nonredeemable noncontrolling interests		59			18			112			*			(47	%)		156			370			(58	%)
Net income (loss) applicable to Morgan Stanley		1,713			1,899			906			(10	%)		89	%		5,117			2,848			80	%
Preferred stock dividend / Other (2)		64			79			26			(19	%)		146	%		199			229			(13	%)
Earnings (loss) applicable to Morgan Stanley common shareholders	$	1,649		$	1,820		$	880			(9	%)		87	%	$	4,918		$	2,619			88	%

Amounts applicable to Morgan Stanley:
Income (loss) from continuing operations		1,718			1,900			889			(10	%)		93	%		5,084			2,881			76	%
Gain (loss) from discontinued operations after tax		(5	)		(1	)		17			*			*			33			(33	)		*
Net income (loss) applicable to Morgan Stanley	$	1,713		$	1,899		$	906			(10	%)		89	%	$	5,117		$	2,848			80	%

Pre-tax profit margin (3)		25	%		23	%		17	%								25	%		19	%
Compensation and benefits as a % of net revenues		47	%		49	%		50	%								48	%		50	%
Non-compensation expenses as a % of net revenues		27	%		29	%		33	%								27	%		31	%
Effective tax rate from continuing operations		21.0	%		0.8	%		26.6	%								19.5	%		27.1	%

Notes:	-	Pre-tax profit margin and return on average common equity are non-GAAP financial measures that the Firm considers to be a useful measure to assess operating performance.
	-	Other revenues for the quarter ended September 30, 2014 included a gain of $141 million related to the sale of a retail property space (allocated to the business segments as follows: Institutional Securities:$ 84 million,
		Wealth Management: $40 million and Investment Management: $17 million), and a gain related to the sale of TransMontaigne Inc. reported in the Institutional Securities business segment.
	-	In the quarter ended September 30, 2014, income tax provision / (benefit) from continuing operations included a net discrete tax benefit of $237 million (reported in the Institutional Securities business segment)
		primarily associated with the repatriation of non-U.S. earnings at a cost lower than originally estimated.
	-	In the quarter ended June 30, 2014, income tax provision / (benefit) from continuing operations included a net discrete tax benefit of $609 million (primarily reported in the Institutional Securities business segment)
		principally related to the remeasurement of reserves and related interest due to new information regarding the status of a multi-year tax authority examination.
	-	The quarter ended September 30, 2013 included a discrete net tax benefit of $73 million attributable to tax planning strategies to optimize foreign tax credit utilization in anticipation of the repatriation of earnings
		from certain non-U.S. subsidiaries.
	-	Refer to End Notes on pages 14-16 and Legal Notice on page 17.

	MORGAN STANLEY
	Quarterly Earnings Per Share
	(unaudited, dollars in millions, except for per share data)


	Quarter Ended								Percentage Change From:						Nine Months Ended					Percentage
	Sept 30, 2014			June 30, 2014			Sept 30, 2013		June 30, 2014			Sept 30, 2013			Sept 30, 2014		Sept 30, 2013			Change


Income (loss) from continuing operations	$	1,777		$	1,918		$	1,001		(7	%)		78	%	$	5,240	$	3,473			51	%

Net income applicable to redeemable noncontrolling interests		0			0			0		--			--			0		222			*
Net income applicable to nonredeemable noncontrolling interests		59			18			112		*			(47	%)		156		370			(58	%)
Net income (loss) from continuing operations applicable to noncontrolling interests		59			18			112		*			(47	%)		156		592			(74	%)

Income (loss) from continuing operations applicable to Morgan Stanley		1,718			1,900			889		(10	%)		93	%		5,084		2,881			76	%
Less: Preferred Dividends		62			76			24		(18	%)		158	%		192		72			167	%
Less: Morgan Stanley Smith Barney Joint Venture Redemption Adjustment		-			-			-		--			--			-		151			*
Income (loss) from continuing operations applicable to Morgan Stanley, prior to allocation of income to Participating Restricted Stock Units		1,656			1,824			865		(9	%)		91	%		4,892		2,658			84	%

Basic EPS Adjustments:
Less: Allocation of earnings to Participating Restricted Stock Units		2			3			2		(33	%)		--			7		6			17	%
Earnings (loss) from continuing operations applicable to Morgan Stanley common shareholders	$	1,654		$	1,821		$	863		(9	%)		92	%	$	4,885	$	2,652			84	%

Gain (loss) from discontinued operations after tax		(5	)		(1	)		17		*			*			33		(33	)		*
Less: Gain (loss) from discontinued operations after tax applicable to noncontrolling interests		0			0			0		--			--			0		0			--
Gain (loss) from discontinued operations after tax applicable to Morgan Stanley		(5	)		(1	)		17		*			*			33		(33	)		*
Less: Allocation of earnings to Participating Restricted Stock Units		0			0			0		--			--			0		0			--
Earnings (loss) from discontinued operations applicable to Morgan Stanley common shareholders		(5	)		(1	)		17		*			*			33		(33	)		*

Earnings (loss) applicable to Morgan Stanley common shareholders	$	1,649		$	1,820		$	880		(9	%)		87	%	$	4,918	$	2,619			88	%

Average basic common shares outstanding (millions)		1,923			1,928			1,909		--			1	%		1,925		1,906			1	%

Earnings per basic share:
Income from continuing operations	$	0.86		$	0.94		$	0.45		(9	%)		91	%	$	2.54	$	1.39			83	%
Discontinued operations	$	-		$	-		$	0.01		--			*		$	0.01	$	(0.02	)		*
Earnings per basic share	$	0.86		$	0.94		$	0.46		(9	%)		87	%	$	2.55	$	1.37			86	%

Earnings (loss) from continuing operations applicable to Morgan Stanley common shareholders	$	1,654		$	1,821		$	863		(9	%)		92	%	$	4,885	$	2,652			84	%

Earnings (loss) from discontinued operations applicable to Morgan Stanley common shareholders		(5	)		(1	)		17		*			*			33		(33	)		*

Earnings (loss) applicable to Morgan Stanley common shareholders	$	1,649		$	1,820		$	880		(9	%)		87	%	$	4,918	$	2,619			88	%

Average diluted common shares outstanding and common stock equivalents (millions)		1,971			1,969			1,965		--			--			1,970		1,952			1	%

Earnings per diluted share:
Income from continuing operations	$	0.84		$	0.92		$	0.44		(9	%)		91	%	$	2.48	$	1.36			82	%
Discontinued operations	$	-		$	-		$	0.01		--			*		$	0.02	$	(0.02	)		*
Earnings per diluted share	$	0.84		$	0.92		$	0.45		(9	%)		87	%	$	2.50	$	1.34			87	%


Notes:	-	The Firm calculates earnings per share using the two-class method as described under the accounting guidance for earnings per share. For further discussion of the Firm's earnings per share calculations, see page 13 of the Financial Supplement and Note 15 to the consolidated financial statements in the Firm's Quarterly Report on Form 10-Q for the quarter ended June 30, 2014.
	-	Refer to Legal Notice on page 17.

MORGAN STANLEY
Quarterly Consolidated Financial Information and Statistical Data
(unaudited)


	Quarter Ended									Percentage Change From:						Nine Months Ended				Percentage
	Sept 30, 2014			June 30, 2014			Sept 30, 2013			June 30, 2014			Sept 30, 2013			Sept 30, 2014		Sept 30, 2013		Change


Regional revenues (1)
Americas	$	6,308		$	6,132		$	5,684			3	%		11	%	$	18,973	$	17,681		7	%
EMEA (Europe, Middle East, Africa)		1,271			1,498			1,148			(15	%)		11	%		4,191		3,346		25	%
Asia		1,328			978			1,118			36	%		19	%		3,298		3,606		(9	%)
Consolidated net revenues	$	8,907		$	8,608		$	7,950			3	%		12	%	$	26,462	$	24,633		7	%

Worldwide employees		55,977			56,142			56,101			--			--

Firmwide:
Deposits	$	124,382		$	117,695		$	104,807			6	%		19	%
Assets	$	813,935		$	826,568		$	832,223			(2	%)		(2	%)
U.S. bank assets (2)	$	139,230		$	132,078		$	120,965			5	%		15	%
Risk-weighted assets (3)	$	414,771		$	418,054		$	386,215			(1	%)		7	%
Global liquidity reserve (billions) (4)	$	190		$	192		$	198			(1	%)		(4	%)
Long-term debt outstanding	$	152,357		$	149,483		$	157,805			2	%		(3	%)
Maturities of long-term debt outstanding (next 12 months)	$	17,613		$	16,594		$	24,232			6	%		(27	%)

Common equity		66,918			65,735			62,758			2	%		7	%
Preferred equity		6,020			5,020			2,370			20	%		154	%
Morgan Stanley shareholders' equity		72,938			70,755			65,128			3	%		12	%
Junior subordinated debt issued to capital trusts		4,870			4,876			4,812			--			1	%
Less: Goodwill and intangible assets (5)		(9,637	)		(9,731	)		(10,098	)		1	%		5	%
Tangible Morgan Stanley shareholders' equity	$	68,171		$	65,900		$	59,842			3	%		14	%
Tangible common equity (6)	$	57,281		$	56,004		$	52,660			2	%		9	%


Common Equity Tier 1 capital Advanced (Transitional) (3)	$	59,450		$	58,144		$	48,696			2	%		22	%
Tier 1 capital Advanced (Transitional) (3)	$	66,716		$	64,533		$	58,903			3	%		13	%

Common Equity Tier 1 capital ratio Advanced (Transitional) (3)		14.3	%		13.9	%		12.6	%
Tier 1 capital ratio Advanced (Transitional) (3)		16.1	%		15.4	%		15.3	%
Tier 1 leverage ratio Advanced (Transitional) (7)		8.2	%		7.8	%		7.3	%

Period end common shares outstanding (000's)		1,958,386			1,964,503			1,953,351			--			--

Book value per common share	$	34.17		$	33.46		$	32.13
Tangible book value per common share	$	29.25		$	28.51		$	26.96


Notes:	-	All data presented in millions except number of employees, liquidity, ratios and book values.
	-	In the quarter ended June 30, 2014, the Firm began using the U.S. Basel III Advanced Approaches (Advanced Approach) to calculate its regulatory capital requirements.
		Prior periods have not been recast to reflect the new requirements.
	-	Refer to End Notes on pages 14-16 and Legal Notice on page 17.

MORGAN STANLEY
Quarterly Consolidated Financial Information and Statistical Data
(unaudited, dollars in billions)



	Quarter Ended									Percentage Change From:						Nine Months Ended						Percentage
	Sept 30, 2014			June 30, 2014			Sept 30, 2013			June 30, 2014			Sept 30, 2013			Sept 30, 2014			Sept 30, 2013			Change
Average Common Equity Tier 1 capital (1)
Institutional Securities	$	31.9		$	32.5		$	32.0			(2	%)		--		$	31.3		$	33.1			(5	%)
Wealth Management		5.2			5.5			4.4			(5	%)		18	%		5.3			4.2			26	%
Investment Management		2.2			2.1			1.7			5	%		29	%		1.9			1.7			12	%
Parent capital		19.4			16.8			10.2			15	%		90	%		18.5			8.0			131	%
Total - continuing operations		58.7			56.9			48.3			3	%		22	%		57.0			47.0			21	%
Discontinued operations		0.0			0.0			0.0			--			--			0.0			0.0			--
Firm	$	58.7		$	56.9		$	48.3			3	%		22	%	$	57.0		$	47.0			21	%

Average Common Equity
Institutional Securities	$	32.7		$	33.3		$	37.0			(2	%)		(12	%)	$	32.1		$	38.5			(17	%)
Wealth Management		11.2			11.5			13.1			(3	%)		(15	%)		11.3			13.3			(15	%)
Investment Management		3.1			3.1			2.8			--			11	%		2.9			2.8			4	%
Parent capital		19.2			16.7			9.2			15	%		109	%		18.4			6.9			167	%
Total - continuing operations		66.2			64.6			62.1			2	%		7	%		64.7			61.5			5	%
Discontinued operations		0.0			0.0			0.0			--			--			0.0			0.0			--
Firm	$	66.2		$	64.6		$	62.1			2	%		7	%	$	64.7		$	61.5			5	%


Return on average Common Equity Tier 1 capital
Institutional Securities		13	%		15	%		4	%								14	%		6	%
Wealth Management		37	%		32	%		39	%								33	%		27	%
Investment Management		22	%		26	%		32	%								26	%		25	%
Total - continuing operations		11	%		13	%		7	%								11	%		8	%
Firm		11	%		13	%		7	%								12	%		7	%

Return on average Common Equity
Institutional Securities		13	%		15	%		3	%								13	%		5	%
Wealth Management		17	%		15	%		13	%								16	%		9	%
Investment Management		15	%		18	%		19	%								17	%		15	%
Total - continuing operations		10	%		11	%		6	%								10	%		6	%
Firm		10	%		11	%		6	%								10	%		6	%

Notes:	-	In the quarter ended June 30, 2014, the Firm began using the U.S. Basel III Advanced Approaches (Advanced Approach) to calculate its regulatory capital requirements. Prior periods have not been recast to reflect the new requirements.
	-	The return on average common equity and average Common Equity Tier 1 capital are non-GAAP measures that the Firm considers to be useful measures to assess operating performance.
	-	For nine months ended September 30, 2013, the Firm and Wealth Management business segment included a negative adjustment of approximately $151 million (net of tax) related to the purchase of the remaining 35%
		interest in the Morgan Stanley Smith Barney Joint Venture. This adjustment was included in the numerator for the purposes of calculating the return on average Common Equity and average Common Equity Tier 1 capital.
		Excluding this negative adjustment, these calculations would have been as follows:
		Return on average Common Equity Tier 1 capital:
		September 30, 2013 YTD: Firm: 8%, Wealth Management: 32%
		Return on average Common Equity:
		September 30, 2013 YTD: Firm: 6%, Wealth Management: 10%
	-	Refer to End Notes on pages 14-16 and Legal Notice on page 17.

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

	Quarter Ended									Percentage Change From:						Nine Months Ended						Percentage
	Sept 30, 2014			June 30, 2014			Sept 30, 2013			June 30, 2014			Sept 30, 2013			Sept 30, 2014			Sept 30, 2013			Change
Revenues:
Investment banking	$	1,340		$	1,432		$	992			(6	%)		35	%	$	3,908		$	3,015			30	%
Trading		2,262			2,257			1,959			--			15	%		7,226			6,971			4	%
Investments		39			62			337			(37	%)		(88	%)		210			530			(60	%)
Commissions and fees		629			629			571			--			10	%		1,936			1,829			6	%
Asset management, distribution and admin. fees		66			66			72			--			(8	%)		213			207			3	%
Other		225			108			159			108	%		42	%		474			462			3	%
Total non-interest revenues		4,561			4,554			4,090			--			12	%		13,967			13,014			7	%

Interest income		859			758			847			13	%		1	%		2,498			2,692			(7	%)
Interest expense		904			1,064			1,233			(15	%)		(27	%)		3,074			3,545			(13	%)
Net interest		(45	)		(306	)		(386	)		85	%		88	%		(576	)		(853	)		32	%
Net revenues		4,516			4,248			3,704			6	%		22	%		13,391			12,161			10	%

Compensation and benefits		1,780			1,723			1,616			3	%		10	%		5,354			5,270			2	%
Non-compensation expenses		1,511			1,564			1,692			(3	%)		(11	%)		4,480			4,697			(5	%)
Total non-interest expenses		3,291			3,287			3,308			--			(1	%)		9,834			9,967			(1	%)


Income (loss) from continuing operations before taxes		1,225			961			396			27	%		*			3,557			2,194			62	%
Income tax provision / (benefit) from continuing operations		86			(344	)		24			*			*			163			410			(60	%)
Income (loss) from continuing operations		1,139			1,305			372			(13	%)		*			3,394			1,784			90	%
Gain (loss) from discontinued operations after tax		(6	)		(4	)		(3	)		(50	%)		(100	%)		28			(42	)		*
Net income (loss)		1,133			1,301			369			(13	%)		*			3,422			1,742			96	%
Net income applicable to redeemable noncontrolling interests		-			-			-			--			--			-			1			*
Net income applicable to nonredeemable noncontrolling interests (1)		41			11			48			*			(15	%)		77			234			(67	%)
Net income (loss) applicable to Morgan Stanley	$	1,092		$	1,290		$	321			(15	%)		*		$	3,345		$	1,507			122	%

Amounts applicable to Morgan Stanley:
Income (loss) from continuing operations		1,098			1,294			324			(15	%)		*			3,317			1,549			114	%
Gain (loss) from discontinued operations after tax		(6	)		(4	)		(3	)		(50	%)		(100	%)		28			(42	)		*
Net income (loss) applicable to Morgan Stanley	$	1,092		$	1,290		$	321			(15	%)		*		$	3,345		$	1,507			122	%

Return on average common equity from continuing operations		13	%		15	%		3	%								13	%		5	%
Pre-tax profit margin (2)		27	%		23	%		11	%								27	%		18	%
Compensation and benefits as a % of net revenues		39	%		41	%		44	%								40	%		43	%


Notes:	-	Pre-tax profit margin and return on average common equity are non-GAAP financial measures that the Firm considers to be a useful measure to assess operating performance.
	-	Other revenues for the quarter ended September 30, 2014, included a gain related to the sale of TransMontaigne Inc. and the Institutional Securities portion of a gain related to the sale of a retail property space.
	-	In the quarter ended September 30, 2014, income tax provision / (benefit) from continuing operations included a net discrete tax benefit of $237 million primarily associated with the repatriation of
		non-U.S. earnings at a cost lower than originally estimated.
	-	In the quarter ended June 30, 2014, income tax provision / (benefit) from continuing operations included a net discrete tax benefit of $612 million principally related to the remeasurement of reserves and
		related interest due to new information regarding the status of a multi-year tax authority examination.
	-	The quarter ended September 30, 2013 included a discrete net tax benefit of $73 million attributable to tax planning strategies to optimize foreign tax credit utilization in anticipation of the repatriation of earnings
		from certain non-U.S. subsidiaries.
	-	Refer to End Notes on pages 14-16 and Legal Notice on page 17.

MORGAN STANLEY
Quarterly Financial Information and Statistical Data
Institutional Securities
(unaudited, dollars in millions)



	Quarter Ended									Percentage Change From:						Nine Months Ended						Percentage
	Sept 30, 2014			June 30, 2014			Sept 30, 2013			June 30, 2014			Sept 30, 2013			Sept 30, 2014			Sept 30, 2013			Change

Investment Banking
Advisory revenues	$	392		$	418		$	275			(6	%)		43	%	$	1,146		$	859			33	%
Underwriting revenues
Equity		464			489			236			(5	%)		97	%		1,268			846			50	%
Fixed income		484			525			481			(8	%)		1	%		1,494			1,310			14	%
Total underwriting revenues		948			1,014			717			(7	%)		32	%		2,762			2,156			28	%

Total investment banking revenues	$	1,340		$	1,432		$	992			(6	%)		35	%	$	3,908		$	3,015			30	%

Sales & Trading (1)
Equity	$	1,867		$	1,826		$	1,680			2	%		11	%	$	5,448		$	5,109			7	%
Fixed Income & Commodities		1,129			1,061			694			6	%		63	%		3,920			3,185			23	%
Other		(84	)		(241	)		(158	)		65	%		47	%		(569	)		(140	)		*
Total sales & trading net revenues	$	2,912		$	2,646		$	2,216			10	%		31	%	$	8,799		$	8,154			8	%

Investments & Other
Investments	$	39		$	62		$	337			(37	%)		(88	%)	$	210		$	530			(60	%)
Other		225			108			159			108	%		42	%		474			462			3	%
Total investments & other revenues	$	264		$	170		$	496			55	%		(47	%)	$	684		$	992			(31	%)

Total Institutional Securities net revenues	$	4,516		$	4,248		$	3,704			6	%		22	%	$	13,391		$	12,161			10	%


Institutional Securities U.S. Bank Data (billions) (2)
Total corporate funded loans	$	9.4		$	9.7		$	9.3			(3	%)		1	%
Total other funded loans (3)	$	12.6		$	10.8		$	3.1			17	%		*


Average Daily 95% / One-Day Value-at-Risk ("VaR") (4)
Primary Market Risk Category ($ millions, pre-tax)
Interest rate and credit spread	$	28		$	31		$	37
Equity price	$	16		$	18		$	18
Foreign exchange rate	$	9		$	9		$	13
Commodity price	$	15		$	19		$	20

Aggregation of Primary Risk Categories	$	38		$	43		$	46

Credit Portfolio VaR	$	10		$	11		$	15

Trading VaR	$	42		$	48		$	52


Notes:	-	See page 15 of the Financial Supplement for additional details on DVA amounts reported in the Institutional Securities business.
	-	Refer to End Notes on pages 14-16 and Legal Notice on page 17.

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


	Quarter Ended									Percentage Change From:						Nine Months Ended						Percentage
	Sept 30, 2014			June 30, 2014			Sept 30, 2013			June 30, 2014			Sept 30, 2013			Sept 30, 2014			Sept 30, 2013			Change
Revenues:
Investment banking	$	224		$	213		$	185			5	%		21	%	$	618		$	717			(14	%)
Trading		185			267			317			(31	%)		(42	%)		727			838			(13	%)
Investments		2			2			4			--			(50	%)		8			9			(11	%)
Commissions and fees		503			511			507			(2	%)		(1	%)		1,554			1,633			(5	%)
Asset management, distribution and admin. fees		2,158			2,064			1,900			5	%		14	%		6,243			5,654			10	%
Other		112			80			75			40	%		49	%		254			279			(9	%)
Total non-interest revenues		3,184			3,137			2,988			1	%		7	%		9,404			9,130			3	%

Interest income		649			616			532			5	%		22	%		1,846			1,531			21	%
Interest expense		48			38			39			26	%		23	%		128			179			(28	%)
Net interest		601			578			493			4	%		22	%		1,718			1,352			27	%
Net revenues		3,785			3,715			3,481			2	%		9	%		11,122			10,482			6	%

Compensation and benefits		2,182			2,186			2,017			--			8	%		6,537			6,124			7	%
Non-compensation expenses		767			762			796			1	%		(4	%)		2,291			2,438			(6	%)
Total non-interest expenses		2,949			2,948			2,813			--			5	%		8,828			8,562			3	%

Income (loss) from continuing operations before taxes		836			767			668			9	%		25	%		2,294			1,920			19	%
Income tax provision / (benefit) from continuing operations		335			296			238			13	%		41	%		899			687			31	%
Income (loss) from continuing operations		501			471			430			6	%		17	%		1,395			1,233			13	%
Gain (loss) from discontinued operations after tax		0			0			0			--			--			0			(1	)		*
Net income (loss)		501			471			430			6	%		17	%		1,395			1,232			13	%
Net income applicable to redeemable noncontrolling interests (1)		0			0			0			--			--			-			221			*
Net income applicable to nonredeemable noncontrolling interests		0			0			0			--			--			-			0			--
Net income (loss) applicable to Morgan Stanley	$	501		$	471		$	430			6	%		17	%	$	1,395		$	1,011			38	%

Amounts applicable to Morgan Stanley:
Income (loss) from continuing operations		501			471			430			6	%		17	%		1,395			1,012			38	%
Gain (loss) from discontinued operations after tax		0			0			0			--			--			0			(1	)		*
Net income (loss) applicable to Morgan Stanley	$	501		$	471		$	430			6	%		17	%	$	1,395		$	1,011			38	%

Return on average common equity from continuing operations		17	%		15	%		13	%								16	%		9	%
Pre-tax profit margin (2)		22	%		21	%		19	%								21	%		18	%
Compensation and benefits as a % of net revenues		58	%		59	%		58	%								59	%		58	%


Notes:	-	Pre-tax profit margin and return on average common equity are non-GAAP financial measures that the Firm considers to be a useful measure to assess operating performance.
	-	For the nine months ended September 30, 2013, the return on average common equity included a negative adjustment related to the purchase of the remaining 35% interest in the Morgan Stanley Smith
		Barney Joint Venture. This adjustment was included in the numerator for the purposes of calculating the return on average common equity. Excluding this negative adjustment, the return on average
		Common Equity would have been 10% for the nine months ended September 30, 2013.
	-	Refer to End Notes on pages 14-16 and Legal Notice on page 17.

MORGAN STANLEY
Quarterly Financial Information and Statistical Data
Wealth Management
(unaudited)



	Quarter Ended									Percentage Change From:
	Sept 30, 2014			June 30, 2014			Sept 30, 2013			June 30, 2014			Sept 30, 2013


Wealth Management representatives		16,162			16,316			16,517			(1	%)		(2	%)

Annualized revenue per representative (000's) (1)	$	932		$	908		$	848			3	%		10	%

Client assets (billions)	$	2,003		$	2,002		$	1,825			--			10	%
Client liabilities (billions)	$	48		$	45		$	36			7	%		33	%

Fee-based client account assets (billions) (2)	$	768		$	762		$	652			1	%		18	%
Fee-based assets as a % of client assets		38	%		38	%		36	%


Bank deposit program (millions)	$	129,450		$	127,433		$	129,537			2	%		--

Client assets per representative (millions) (3)	$	124		$	123		$	110			1	%		13	%

Fee based asset flows (billions)	$	6.5		$	12.5		$	15.0			(48	%)		(57	%)

Retail locations		631			636			650			(1	%)		(3	%)

Wealth Management U.S. Bank Data (billions) (4)
Securities-based lending and other loans	$	20.3		$	18.4		$	13.7			10	%		48	%
Residential real estate loans	$	14.3		$	12.7		$	8.9			13	%		61	%
Available for Sale Securities Portfolio	$	52.5		$	56.5		$	46.9			(7	%)		12	%

Notes:	-	Client liabilities reflect lending on Morgan Stanley Bank, N.A. and Morgan Stanley Private Bank, National Association and broker dealer margin activity.
	-	For the quarters ended September 30, 2014, June 30, 2014 and September 30, 2013, approximately $116 billion, $109 billion and $94 billion, respectively,
		of the assets in the bank deposit program are attributable to Morgan Stanley.
	-	Refer to End Notes on pages 14-16 and Legal Notice on page 17.

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


	Quarter Ended									Percentage Change From:						Nine Months Ended						Percentage
	Sept 30, 2014			June 30, 2014			Sept 30, 2013			June 30, 2014			Sept 30, 2013			Sept 30, 2014			Sept 30, 2013			Change
Revenues:
Investment banking	$	-		$	1		$	1			*			*		$	5		$	7			(29	%)
Trading		4			(6	)		(21	)		*			*			(22	)		26			*
Investments (1)		97			163			387			(40	%)		(75	%)		506			715			(29	%)
Commissions and fees		0			0			0			--			--			0			0			--
Asset management, distribution and admin. fees		519			518			450			--			15	%		1,510			1,378			10	%
Other		37			24			11			54	%		*			103			25			*
Total non-interest revenues		657			700			828			(6	%)		(21	%)		2,102			2,151			(2	%)

Interest income		0			1			2			*			*			2			7			(71	%)
Interest expense		2			9			2			(78	%)		--			17			12			42	%
Net interest		(2	)		(8	)		0			75	%		*			(15	)		(5	)		(200	%)
Net revenues		655			692			828			(5	%)		(21	%)		2,087			2,146			(3	%)

Compensation and benefits		253			291			332			(13	%)		(24	%)		829			888			(7	%)
Non-compensation expenses		214			196			196			9	%		9	%		602			611			(1	%)
Total non-interest expenses		467			487			528			(4	%)		(12	%)		1,431			1,499			(5	%)

Income (loss) from continuing operations before taxes		188			205			300			(8	%)		(37	%)		656			647			1	%
Income tax provision / (benefit) from continuing operations		51			63			101			(19	%)		(50	%)		205			191			7	%
Income (loss) from continuing operations		137			142			199			(4	%)		(31	%)		451			456			(1	%)
Gain (loss) from discontinued operations after tax		1			3			8			(67	%)		(88	%)		5			9			(44	%)
Net income (loss)		138			145			207			(5	%)		(33	%)		456			465			(2	%)
Net income applicable to redeemable noncontrolling interests		0			0			0			--			--			-			-			--
Net income applicable to nonredeemable noncontrolling interests (1)		18			7			64			157	%		(72	%)		79			136			(42	%)
Net income (loss) applicable to Morgan Stanley	$	120		$	138		$	143			(13	%)		(16	%)	$	377		$	329			15	%

Amounts applicable to Morgan Stanley:
Income (loss) from continuing operations		119			135			135			(12	%)		(12	%)		372			320			16	%
Gain (loss) from discontinued operations after tax		1			3			8			(67	%)		(88	%)		5			9			(44	%)
Net income (loss) applicable to Morgan Stanley	$	120		$	138		$	143			(13	%)		(16	%)	$	377		$	329			15	%

Return on average common equity from continuing operations		15	%		18	%		19	%								17	%		15	%
Pre-tax profit margin (2)		29	%		30	%		36	%								31	%		30	%
Compensation and benefits as a % of net revenues		39	%		42	%		40	%								40	%		41	%


Notes:	-	Pre-tax profit margin and return on average common equity are non-GAAP financial measures that the Firm considers to be a useful measure to assess operating performance.
	-	Refer to End Notes on pages 14-16 and Legal Notice on page 17.

MORGAN STANLEY
Quarterly Financial Information and Statistical Data
Investment Management
(unaudited)

	Quarter Ended									Percentage Change From:						Nine Months Ended						Percentage
	Sept 30, 2014			June 30, 2014			Sept 30, 2013			June 30, 2014			Sept 30, 2013			Sept 30, 2014			Sept 30, 2013			Change

Net Revenues (millions)
Traditional Asset Management	$	456		$	436		$	369			5	%		24	%	$	1,329		$	1,189			12	%
Merchant Banking		86			145			226			(41	%)		(62	%)		403			427			(6	%)
Real Estate Investing (1)		113			111			233			2	%		(52	%)		355			530			(33	%)
Total Investment Management	$	655		$	692		$	828			(5	%)		(21	%)	$	2,087		$	2,146			(3	%)

Assets under management or supervision (billions)

Net flows by asset class (2)
Traditional Asset Management
Equity	$	(2.9	)	$	1.1		$	-			*			*		$	1.0		$	-			*
Fixed Income		4.5			0.0			(2.5	)		*			*			3.8			(2.5	)		*
Liquidity		4.9			6.9			3.9			(29	%)		26	%		14.1			10.1			40	%
Alternatives		0.3			0.8			0.5			(63	%)		(40	%)		2.9			1.5			93	%
Total Traditional Asset Management		6.8			8.8			1.9			(23	%)		*			21.8			9.1			140	%

Real Estate Investing		0.3			(2.2	)		(0.3	)		*			*			(2.1	)		(1.0	)		(110	%)
Merchant Banking		0.5			1.0			0.2			(50	%)		150	%		1.5			1.0			50	%
Total net flows	$	7.6		$	7.6		$	1.8			--			*		$	21.2		$	9.1			133	%

Assets under management or supervision by asset class (3)
Traditional Asset Management
Equity	$	143		$	150		$	133			(5	%)		8	%
Fixed Income		65			62			58			5	%		12	%
Liquidity		126			121			110			4	%		15	%
Alternatives		35			35			30			--			17	%
Total Traditional Asset Management		369			368			331			--			11	%

Real Estate Investing		20			20			20			--			--
Merchant Banking		9			8			9			13	%		--
Total Assets Under Management or Supervision	$	398		$	396		$	360			1	%		11	%
Share of minority stake assets		7			7			6			--			17	%

Notes:	-	The alternatives asset class includes a range of investment products such as funds of hedge funds, funds of private equity funds and funds of real estate funds.
	-	The share of minority stake assets represents Investment Management's proportional share of assets managed by entities in which it owns a minority stake.
	-	Refer to End Notes on pages 14-16 and Legal Notice on page 17.

MORGAN STANLEY
Quarterly Financial Information
Loans and Lending Commitments
(unaudited, dollars in billions)


	Quarter Ended						Percentage Change From:
	Sept 30, 2014		June 30, 2014		Sept 30, 2013		June 30, 2014			Sept 30, 2013

Institutional Securities
Corporate Funded Loans
Loans held for investment, net of allowance	$	8.2	$	9.3	$	7.2		(12	%)		14	%
Loans held for sale		5.9		5.3		4.5		11	%		31	%
Loans held at fair value (1)		0.7		1.2		3.9		(42	%)		(82	%)
Total corporate funded loans	$	14.8	$	15.8	$	15.6		(6	%)		(5	%)

Corporate Lending Commitments
Loans held for investment	$	62.2	$	67.1	$	55.7		(7	%)		12	%
Loans held for sale		16.3		19.9		11.0		(18	%)		48	%
Loans held at fair value (2)		4.1		5.5		13.1		(25	%)		(69	%)
Total corporate lending commitments	$	82.6	$	92.5	$	79.8		(11	%)		4	%

Corporate Loans and Lending Commitments (3)	$	97.4	$	108.3	$	95.4		(10	%)		2	%

Other Funded Loans
Loans held for investment, net of allowance	$	8.7	$	8.2	$	3.1		6	%		181	%
Loans held for sale		0.7		1.2		0.1		(42	%)		*
Loans held at fair value		13.3		12.5		9.6		6	%		39	%
Total other funded loans	$	22.7	$	21.9	$	12.8		4	%		77	%

Other Lending Commitments
Loans held for investment	$	1.8	$	1.8	$	0.9		--			100	%
Loans held for sale		0.1		0.2		0.0		(50	%)		*
Loans held at fair value		2.0		2.3		1.6		(13	%)		25	%
Total other lending commitments	$	3.9	$	4.3	$	2.5		(9	%)		56	%

Total Other Loans and Lending Commitments (4)	$	26.6	$	26.2	$	15.3		2	%		74	%

Institutional Securities Loans and Lending Commitments (5)	$	124.0	$	134.5	$	110.7		(8	%)		12	%


Wealth Management

Funded Loans
Loans held for investment, net of allowance	$	34.6	$	31.2	$	22.6		11	%		53	%
Loans held for sale		0.1		0.1		0.1		--			--
Total funded loans	$	34.7	$	31.3	$	22.7		11	%		53	%

Lending Commitments
Loans held for investment	$	4.6	$	4.2	$	3.9		10	%		18	%
Loans held for sale		0.0		0.0		0.1		--			*
Total lending commitments	$	4.6	$	4.2	$	4.0		10	%		15	%

Wealth Management Loans and Lending Commitments (6)	$	39.3	$	35.5	$	26.7		11	%		47	%

Firm Loans and Lending Commitments	$	163.3	$	170.0	$	137.4		(4	%)		19	%

Note: - Refer to End Notes on pages 14-16 and Legal Notice on page 17.

This page represents an addendum to the 3Q 2014 Financial Supplement, Appendix I

MORGAN STANLEY
Earnings Per Share Calculation Under Two-Class Method
Three Months Ended September 30, 2014
(unaudited, in millions, except for per share data)




	Allocation of net income from continuing operations
	(A)	(B)	(C)	(D)	(E)	(F)		(G)
						(D)+(E)		(F)/(A)
	Weighted Average # of Shares	% Allocation (2)	Net income from continuing operations applicable to Morgan Stanley (3)	Distributed Earnings (4)	Undistributed Earnings (5)	Total Earnings Allocated		Basic EPS (8)
Basic Common Shares	1,923	100%		$192	$1,460	$1,652	(6)	$0.86
Participating Restricted Stock Units (1)	3	0%		$0	$2	$2	(7)	N/A
	1,926	100%	$1,654	$192	$1,462	$1,654


	Allocation of gain (loss) from discontinued operations
	(A)	(B)	(C)	(D)	(E)	(F)		(G)
						(D)+(E)		(F)/(A)
	Weighted Average # of Shares	% Allocation (2)	Gain (loss) from Discontinued Operations Applicable to Common Shareholders, after Tax (3)	Distributed Earnings (4)	Undistributed Earnings (5)	Total Earnings Allocated		Basic EPS (8)
Basic Common Shares	1,923	100%		$0	$(5)	$(5)	(6)	$0.00
Participating Restricted Stock Units (1)	3	0%		$0	$0	$0	(7)	N/A
	1,926	100%	$(5)	$0	$(5)	$(5)


	Allocation of net income applicable to common shareholders
	(A)	(B)	(C)	(D)	(E)	(F)		(G)
						(D)+(E)		(F)/(A)
	Weighted Average # of Shares	% Allocation (2)	Net income applicable to Morgan Stanley (3)	Distributed Earnings (4)	Undistributed Earnings (5)	Total Earnings Allocated		Basic EPS (8)
Basic Common Shares	1,923	100%		$192	$1,455	$1,647	(6)	$0.86
Participating Restricted Stock Units (1)	3	0%		$0	$2	$2	(7)	N/A
	1,926	100%	$1,649	$192	$1,457	$1,649

Note:

Refer to End Notes on pages 14-16 and Legal Notice on page 17.

	MORGAN STANLEY
	End Notes

Page 1:
(1)	From time to time, Morgan Stanley may disclose certain “non-GAAP financial measures” in the course of its earnings releases, earnings conference calls, financial presentations and otherwise. For these purposes, “GAAP” refers to generally accepted accounting principles in the United States. The Securities and Exchange Commission (SEC) defines a “non-GAAP financial measure” as a numerical measure of historical or future financial performance, financial positions, or cash flows that is subject to adjustments that effectively exclude, or include amounts from the most directly comparable measure calculated and presented in accordance with GAAP. Non-GAAP financial measures disclosed by Morgan Stanley are provided as additional information to investors in order to provide them with greater transparency about, or an alternative method for assessing, our financial condition and operating results. These measures are not in accordance with, or a substitute for GAAP, and may be different from or inconsistent with non-GAAP financial measures used by other companies. Whenever we refer to a non-GAAP financial measure, we will also generally present the most directly comparable financial measure calculated and presented in accordance with GAAP, along with a reconciliation of the differences between the non-GAAP financial measure we reference and such comparable GAAP financial measure.
(2)	The return on average common equity and the return on average common equity from continuing operations equal income applicable to Morgan Stanley in each case less preferred dividends as a percentage of average common equity. The return on average common equity and the return on average common equity from continuing operations excluding DVA are adjusted for DVA in each case in the numerator and denominator.
(3)	As an Advanced Approach banking organization, the Firm is required to compute risk-based capital ratios using both (i) standardized approaches for calculating credit risk weighted assets (“RWAs”) and market risk RWAs (the “Standardized Approach”); and (ii) an advanced internal ratings-based approach for calculating credit risk RWAs, an advanced measurement approach for calculating operational risk RWAs, and an advanced approach for market risk RWAs calculated under Basel III (the “Advanced Approach”). To implement a provision of the Dodd-Frank Act, U.S. Basel III subjects Advanced Approach banking organizations which have been approved by their regulators to exit the parallel run, such as the Firm, to a permanent “capital floor”. In calendar year 2014, the capital floor results in the Firm's capital ratios being the lower of the capital ratios computed under the Advanced Approach or the U.S. Basel I-based rules as supplemented by the existing market risk rules known as “Basel 2.5”. For the current quarter, the Firm's capital floor is represented by the Advanced Approach. Beginning on January 1, 2015, the capital floor will result in the Firm's ratios being the lower of the capital ratios computed under the Advanced Approach or the Standardized Approach under U.S. Basel III. These computations are preliminary estimates as of October 17, 2014 (the date of this release) and could be subject to revision in Morgan Stanley’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2014. The methods for calculating the Firm’s risk-based capital ratios will change through 2022 as aspects of the U.S. Basel III final rule are phased in. For information on the calculation of regulatory capital and ratios for prior periods, please refer to Part 2, Item 7 "Regulatory Requirements" in Morgan Stanley's Annual Report on Form 10-K for the year ended December 31, 2013 and Part 1, Item 2 "Regulatory Requirements" in Morgan Stanley's Quarterly Report on Form 10-Q for the quarter ended June 30, 2014.
(4)	Book value per common share equals common equity divided by period end common shares outstanding.
(5)	Tangible book value per common share equals tangible common equity divided by period end common shares outstanding.

Page 2:
(1)	On June 28, 2013, the Firm completed the purchase of the remaining 35% interest in the Morgan Stanley Smith Barney Joint Venture from Citi, increasing the Firm's interest from 65% to 100%.
(2)	Preferred stock dividend / other includes allocation of earnings to Participating Restricted Stock Units (RSUs). For the nine months ended September 30, 2013, the Firm recorded a negative adjustment of approximately $151 million related to the purchase of the remaining interest in the Morgan Stanley Smith Barney Joint Venture. This adjustment negatively impacted the calculation of basic and fully diluted earnings per share.
(3)	Pre-tax profit margin percentages represent income from continuing operations before income taxes as a percentage of net revenues.

Page 4:
(1)	Reflects the regional view of 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, 2013.
(2)	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.
(3)	As an Advanced Approach banking organization, the Firm is required to compute risk-based capital ratios using both (i) standardized approaches for calculating credit risk weighted assets (“RWAs”) and market risk RWAs under U.S. Basel III (the “Standardized Approach”); and (ii) an advanced internal ratings-based approach for calculating credit risk RWAs, an advanced measurement approach for calculating operational risk RWAs, and an advanced approach for market risk RWAs calculated under Basel III (the “Advanced Approach”). To implement a provision of the Dodd-Frank Act, U.S. Basel III subjects Advanced Approach banking organizations which have been approved by their regulators to exit the parallel run, such as the Firm, to a permanent “capital floor”. In calendar year 2014, the capital floor results in the Firm's capital ratios being computed as the lower of the risk based capital requirements under the Advanced Approach or the U.S. Basel I-based rules as supplemented by the existing market risk rules known as “Basel 2.5”. For the current quarter, the Firm's capital floor is represented by the Advanced Approach. Beginning on January 1, 2015, the capital floor will result in the Firm's ratios being the lower of the capital ratios computed under the Advanced Approach or the Standardized Approach. These computations are preliminary estimates as of October 17, 2014 (the date of this release) and could be subject to revision in Morgan Stanley’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2014. The methods for calculating the Firm’s risk-based capital ratios will change through 2022 as aspects of the U.S. Basel III final rule are phased in. For information on the calculation of regulatory capital and ratios for prior periods, please refer to Part 2, Item 7 "Regulatory Requirements" in Morgan Stanley's Annual Report on Form 10-K for the year ended December 31, 2013 and Part 1, Item 2 "Regulatory Requirements" in Morgan Stanley's Quarterly Report on Form 10-Q for the quarter ended June 30, 2014.
(4)	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.
(5)	The Firm's goodwill and intangible balances are net of allowable mortgage servicing rights deduction.
(6)	Tangible common equity equals common equity less goodwill and intangible assets net of allowable mortgage servicing rights deduction.
(7)	Beginning in the first quarter of 2014, Tier 1 leverage ratio equals Tier 1 capital divided by adjusted average total assets (which reflects adjustments for disallowed goodwill, transitional intangible assets, certain deferred tax assets, certain financial equity investments, and other adjustments). For more information on the calculation of the Tier 1 leverage ratio for prior periods, please refer to Part 1, Item 2 "Regulatory Requirements" in Morgan Stanley's Quarterly Report on Form 10-Q for the quarter ended June 30, 2014.

Page 5:
(1)	The Firm’s capital estimation and attribution to the business segments are based on the Required Capital framework, an internal capital adequacy measure which considers risk, leverage, potential losses from extreme stress events, and diversification under a going concern capital concept at a point in time. The framework also takes into consideration regulatory capital requirements as well as capital required for organic growth, acquisitions and other business needs. For further discussion of the framework, refer to Part 1, Item 2 "Regulatory Requirements" in Morgan Stanley's Quarterly Report on Form 10-Q for the quarter ended June 30, 2014.

MORGAN STANLEY

End Notes


Page 6:
(1)	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.
(2)	Pre-tax profit margin percentages represent income from continuing operations before income taxes as a percentage of net revenues.

Page 7:
(1)	For the periods noted below, sales and trading net revenues included positive (negative) revenue related to DVA as follows:
	September 30, 2014: Total QTD: $215 million; Fixed Income & Commodities: $132 million; Equity: $83 million
	June 30, 2014: Total QTD: $87 million; Fixed Income & Commodities: $50 million; Equity: $37 million
	September 30, 2013: Total QTD: $(171) million; Fixed Income & Commodities: $(141) million; Equity: $(30) million
	September 30, 2014: Total YTD: $428 million; Fixed Income & Commodities: $258 million; Equity: $170 million
	September 30, 2013: Total YTD: $(313) million; Fixed Income & Commodities: $(318) million; Equity: $5 million
(2)	Institutional Securities U.S. Bank refers to the Firm’s U.S. bank operating subsidiary Morgan Stanley Bank, N.A.
(3)	In addition to primary corporate lending activity, the Institutional Securities business segment engages in other lending activity. These loans include corporate loans purchased in the secondary market, commercial mortgage loans, asset-backed loans and financing extended to equities customers.
(4)	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 2013 Form 10-K.


Page 8:
(1)	On June 28, 2013, the Firm completed the purchase of the remaining 35% interest in the Morgan Stanley Smith Barney Joint Venture from Citi, increasing the Firm’s interest from 65% to 100%. For the nine months ended September 30, 2013, Citi’s results related to its 35% interest were reported in net income (loss) applicable to redeemable noncontrolling interests.
(2)	Pre-tax profit margin percentages represent income from continuing operations before income taxes as a percentage of net revenues.

Page 9:
(1)	Annualized revenue per representative is defined as annualized revenue divided by average representative headcount.
(2)	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.
(3)	Client assets per representative represents total client assets divided by period end representative headcount.
(4)	Wealth Management 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.

Page 10:
(1)	The quarters ended September 30, 2014, June 30, 2014 and September 30, 2013 include investment gains (losses) for certain funds included in the Firm's consolidated financial statements. The limited partnership interests in these gains were reported in net income (loss) applicable to noncontrolling interests. Beginning in the quarter ended June 30, 2014, net revenues reflect the deconsolidation of certain legal entities associated with a real estate fund sponsored by the Firm.
(2)	Pre-tax profit margin percentages represent income from continuing operations before income taxes as a percentage of net revenues.

Page 11:
(1)	Real Estate Investing revenues include gains or losses related to investments held by certain consolidated real estate funds. These gains or losses are offset in net income (loss) applicable to noncontrolling interest. The investment gains (losses) for the quarters ended September 30, 2014, June 30, 2014 and September 30, 2013 are $17 million, $6 million and $67 million, respectively. Beginning in the quarter ended June 30, 2014, net revenues reflect the deconsolidation of certain legal entities associated with a real estate fund sponsored by the Firm.
(2)	Net Flows by region [inflow / (outflow)] for the quarters ended September 30, 2014, June 30, 2014 and September 30, 2013 were:
	North America: $2.0 billion, $3.1 billion and $3.8 billion
	International: $5.6 billion, $4.5 billion and $(2.0) billion
(3)	Assets under management or supervision by region for the quarters ended September 30, 2014, June 30, 2014 and September 30, 2013 were:
	North America: $243 billion, $243 billion and $230 billion
	International: $155 billion, $153 billion and $130 billion

Page 12:
(1)	For the quarters ended September 30, 2014, June 30, 2014, and September 30, 2013 the percentage of Institutional Securities corporate funded loans held at fair value by credit rating was as follows:
	- % investment grade: 11%, 35% and 53%
	- % non-investment grade: 89%, 65% and 47%
(2)	For the quarters ended September 30, 2014, June 30, 2014, and September 30, 2013 the percentage of Institutional Securities corporate lending commitments held at fair value by credit rating was as follows:
	- % investment grade: 67%, 71% and 76%
	- % non-investment grade: 33%, 29% and 24%
(3)	On September 30, 2014, June 30, 2014, and September 30, 2013, the "event-driven" portfolio of pipeline commitments and closed deals to non-investment grade borrowers were $10.7 billion, $12.2 billion and $7.6 billion, respectively.
(4)	In addition to primary corporate lending activity, the Institutional Securities business segment engages in other lending activity. These loans include corporate loans purchased in the secondary market, commercial and residential mortgage loans, asset-backed loans and financing extended to equities and commodities customers.
(5)	For the quarters ended September 30, 2014, June 30, 2014, and September 30, 2013, Institutional Securities recorded a provision for credit losses (release) of $1.2 million, $13.1 million and $40.5 million, respectively, related to funded loans and $(15.7) million, $11.1 million and $12.0 million related to unfunded commitments, respectively.
(6)	For the quarters ended September 30, 2014, June 30, 2014, and September 30, 2013, Wealth Management recorded a provision for credit losses of $1.0 million, $1.2 million and $0.6 million, respectively, related to funded loans and there was no material provision recorded related to the unfunded commitments for each of the quarterly periods presented.

MORGAN STANLEY

End Notes


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(1)	Unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and are included in the computation of EPS pursuant to the two-class method. Restricted Stock Units ("RSUs") that pay dividend equivalents subject to vesting are not deemed participating securities and are included in diluted shares outstanding (if dilutive) under the treasury stock method.
(2)	The percentage of weighted basic common shares and participating RSUs to the total weighted average of basic common shares and participating RSUs.
(3)	Represents net income from continuing operations, gain (loss) from discontinued operations (after-tax), and net income applicable to Morgan Stanley for the quarter ended September 30, 2014 prior to allocations to participating RSUs.
(4)	Distributed earnings represent the dividends paid for the quarter ended September 30, 2014. The amount of dividends paid is based upon the number of common shares and participating RSUs outstanding as of the dividend record date.
(5)	The two-class method assumes all of the earnings for the reporting period are distributed and allocated to the participating RSUs what they would be entitled to based on their contractual rights and obligations of the participating security.
(6)	Total income applicable to common shareholders to be allocated to the common shares in calculating basic and diluted EPS for common shares.
(7)	Total income applicable to common shareholders to be allocated to the participating RSUs reflected as a deduction to the numerator in determining basic and diluted EPS for common shares.
(8)	Basic and diluted EPS data are required to be presented only for classes of common stock, as described under the accounting guidance for earnings per share.

MORGAN STANLEY

Legal Notice

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

The information should be read in conjunction with the Firm's third quarter earnings press release issued October 17, 2014.