Morgan Stanley 8K Reports Record Fourth Quarter and Record Full Year Results From Continuing Operations | MS 19 Dec 06

Exhibit 99.2


MORGAN STANLEY
Financial Supplement - 4Q 2006
Table of Contents

	Page #

	1	…………….	Quarterly Financial Summary
	2	…………….	Quarterly Consolidated Income Statement Information
	3-4	…………….	Quarterly Consolidated Financial Information and Statistical Data
	5	…………….	Quarterly Institutional Securities Income Statement Information
	6-7	…………….	Quarterly Institutional Securities Financial Information and Statistical Data
	8	…………….	Quarterly Global Wealth Management Group Income Statement Information
	9	…………….	Quarterly Global Wealth Management Group Financial Information and Statistical Data
	10	…………….	Quarterly Asset Management Income Statement Information
	11	…………….	Quarterly Asset Management Financial Information and Statistical Data
	12	…………….	Quarterly Consolidated Assets Under Management or Supervision
	13	…………….	Quarterly Discover Income Statement Information
	14	…………….	Quarterly Discover Income Statement Information (Managed Loan Basis)
	15	…………….	Quarterly Discover Financial Information and Statistical Data
	16	…………….	Quarterly Intersegment Eliminations Income Statement Information
	17	…………….	Quarterly Inst'l. Securities, Global Wealth Management Group and Asset Mgmt. Combined Income Statement Information
	18	…………….	Quarterly Discover Financial Information (Managed Loan Basis)
	19	…………….	Quarterly Discover Reconciliation of General Purpose Credit Card Loan Data (Current Year)
	20	…………….	Quarterly Discover Reconciliation of General Purpose Credit Card Loan Data (Prior Year)
	21	…………….	YTD Discover Reconciliation of General Credit Card Loan Data
	22	…………….	Quarterly Discover Reconciliation of Managed Income Statement Data
	23	…………….	Quarterly Reconciliation of Adjusted Assets
	24	…………….	Illustration of Standard Equity Award Amortization
	25	…………….	Legal Notice

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

	Quarter Ended																								Percentage Change From:						Twelve Months Ended						Percentage
	Feb 28, 2005			May 31, 2005			Aug 31, 2005			Nov 30, 2005			Feb 28, 2006 ⁽¹⁾			May 31, 2006⁽¹⁾			Aug 31, 2006			Nov 30, 2006			4Q06 vs. 4Q05			4Q06 vs. 3Q06			Nov 30, 2005			Nov 30, 2006 ⁽¹⁾			Change
Net revenues
Institutional Securities	$	4,015		$	3,340		$	4,164		$	4,154		$	5,473		$	5,545		$	4,989		$	5,555			34	%		11	%	$	15,673		$	21,562			38	%
Global Wealth Management Group		1,238			1,228			1,255			1,298			1,284			1,402			1,371			1,448			12	%		6	%		5,019			5,505			10	%
Asset Management		696			642			679			890			695			723			634			718			(19	%)		13	%		2,907			2,770			(5	%)
Discover		959			888			911			694			1,089			1,191			1,047			963			39	%		(8	%)		3,452			4,290			24	%
Intersegment Eliminations		(70	)		(67	)		(62	)		(74	)		(59	)		(98	)		(53	)		(59	)		20	%		(11	%)		(273	)		(269	)		1	%
Consolidated net revenues	$	6,838		$	6,031		$	6,947		$	6,962		$	8,482		$	8,763		$	7,988		$	8,625			24	%		8	%	$	26,778		$	33,858			26	%

Income before taxes ⁽²⁾
Institutional Securities	$	1,077		$	813		$	1,288		$	1,576		$	1,775		$	2,087		$	2,001		$	2,297			46	%		15	%	$	4,754		$	8,160			72	%
Global Wealth Management Group		353			118			30			84			23			157			158			171			104	%		8	%		585			509			(13	%)
Asset Management		287			175			162			383			172			224			125			190			(50	%)		52	%		1,007			711			(29	%)
Discover		354			263			239			65			479			541			368			199			*			(46	%)		921			1,587			72	%
Intersegment Eliminations		24			25			23			22			19			(13	)		15			12			(45	%)		(20	%)		94			33			(65	%)
Consolidated income before taxes	$	2,095		$	1,394		$	1,742		$	2,130		$	2,468		$	2,996		$	2,667		$	2,869			35	%		8	%	$	7,361		$	11,000			49	%


Earnings per basic share: ⁽³⁾
Income from continuing operations	$	1.26		$	0.88		$	1.12		$	1.69		$	1.57		$	1.81		$	1.83		$	2.19			30	%		20	%	$	4.94		$	7.40			50	%
Discontinued operations	$	-		$	-		$	(0.98	)	$	0.70		$	(0.03	)	$	0.01		$	-		$	-			*			-		$	(0.29	)	$	(0.02	)		93	%
Cumulative effect of accounting change⁽⁴⁾	$	0.05		$	-		$	-		$	-		$	-		$	-		$	-		$	-			-			-		$	0.05		$	-			*
Earnings per basic share	$	1.31		$	0.88		$	0.14		$	2.39		$	1.54		$	1.82		$	1.83		$	2.19			(8	%)		20	%	$	4.70		$	7.38			57	%

Earnings per diluted share: ⁽³⁾
Income from continuing operations	$	1.24		$	0.86		$	1.09		$	1.64		$	1.51		$	1.74		$	1.75		$	2.08			27	%		19	%	$	4.81		$	7.09			47	%
Discontinued operations	$	-		$	-		$	(0.96	)	$	0.68		$	(0.03	)	$	0.01		$	-		$	-			*			-		$	(0.29	)	$	(0.02	)		93	%
Cumulative effect of accounting change⁽⁴⁾	$	0.05		$	-		$	-		$	-		$	-		$	-		$	-		$	-			-			-		$	0.05		$	-			*
Earnings per diluted share	$	1.29		$	0.86		$	0.13		$	2.32		$	1.48		$	1.75		$	1.75		$	2.08			(10	%)		19	%	$	4.57		$	7.07			55	%

Average common shares outstanding
Basic		1,069,097,162			1,053,812,487			1,045,874,085			1,031,343,423			1,020,041,181			1,013,241,715			1,010,468,365			997,892,310									1,049,896,047			1,010,254,255
Diluted		1,090,166,326			1,079,811,172			1,072,033,275			1,063,147,962			1,061,764,798			1,054,733,745			1,055,664,392			1,052,831,345									1,079,936,315			1,054,796,062
Period end common shares outstanding		1,103,263,369			1,086,652,691			1,082,727,000			1,057,677,994			1,070,407,513			1,071,786,172			1,058,664,567			1,048,877,006									1,057,677,994			1,048,877,006

Return on average common equity
from continuing operations		20.0	%		13.8	%		17.1	%		24.9	%		21.8	%		23.6	%		22.7	%		26.0	%								19.0	%		23.6	%
Return on average common equity		19.7	%		13.1	%		2.0	%		34.6	%		21.3	%		23.7	%		22.7	%		26.0	%								17.3	%		23.5	%

(1)	During the third quarter of fiscal 2006, the Company elected early application of Staff Accounting Bulletin 108 that was released by the U.S. Securities and Exchange Commission. For a further discussion of these adjustments, see note 18 “Staff Accounting Bulletin No. 108” in the Company’s Form 10-Q for the quarterly period ended August 31, 2006.
(2)	Represents consolidated income from continuing operations before losses from unconsolidated investees, taxes, gain/(loss) from discontinued operations and cumulative effect of accounting change.
(3)	Summation of the quarters' earnings per common share may not equal the annual amounts due to the averaging effect of the number of shares and share equivalents throughout the year.
(4)	Represents the effects of the adoption of SFAS 123R in the first quarter of fiscal 2005.
	Note: Certain reclassifications have been made to prior period amounts to conform to the current presentation. Refer to Legal Notice page 25.

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

	Quarter Ended																								Percentage Change From:						Twelve Months Ended						Percentage
	Feb 28, 2005			May 31, 2005			Aug 31, 2005			Nov 30, 2005			Feb 28, 2006 ⁽¹⁾			May 31, 2006 ⁽¹⁾			Aug 31, 2006			Nov 30, 2006			4Q06 vs. 4Q05			4Q06 vs. 3Q06			Nov 30, 2005			Nov 30, 2006 ⁽¹⁾			Change

Investment banking	$	821		$	814		$	992		$	1,216		$	982		$	1,132		$	1,138		$	1,503			24	%		32	%	$	3,843		$	4,755			24	%
Principal transactions:
Trading		1,846			1,794			2,150			1,575			3,080			3,565			2,824			2,269			44	%		(20	%)		7,365			11,738			59	%
Investments		153			226			103			499			314			690			202			463			(7	%)		129	%		981			1,669			70	%
Commissions		824			824			804			911			929			1,005			888			988			8	%		11	%		3,363			3,810			13	%
Fees:
Asset management, distribution and
admin.		1,204			1,246			1,249			1,259			1,279			1,333			1,326			1,350			7	%		2	%		4,958			5,288			7	%
Merchant, cardmember and other		308			318			357			340			289			277			312			289			(15	%)		(7	%)		1,323			1,167			(12	%)
Servicing and securitization income		494			423			398			294			596			651			565			526			79	%		(7	%)		1,609			2,338			45	%
Interest and dividends		5,843			6,035			6,998			9,299			10,549			10,114			12,670			11,883			28	%		(6	%)		28,175			45,216			60	%
Other		105			121			106			132			115			123			130			202			53	%		55	%		464			570			23	%
Total revenues		11,598			11,801			13,157			15,525			18,133			18,890			20,055			19,473			25	%		(3	%)		52,081			76,551			47	%
Interest expense		4,625			5,561			5,986			8,253			9,496			9,997			11,835			10,609			29	%		(10	%)		24,425			41,937			72	%
Provision for consumer loan losses		135			209			224			310			155			130			232			239			(23	%)		3	%		878			756			(14	%)
Net revenues		6,838			6,031			6,947			6,962			8,482			8,763			7,988			8,625			24	%		8	%		26,778			33,858			26	%

Compensation and benefits		2,854			2,622			3,165			2,672			4,161			3,723			3,149			3,354			26	%		7	%		11,313			14,387			27	%
Occupancy and equipment		332			232			239			243			232			237			255			276			14	%		8	%		1,046			1,000			(4	%)
Brokerage, clearing and exchange fees		260			276			267			267			292			340			339			335			25	%		(1	%)		1,070			1,306			22	%
Information processing and
communications		342			349			349			365			347			365			371			386			6	%		4	%		1,405			1,469			5	%
Marketing and business development		257			298			276			331			238			298			292			419			27	%		43	%		1,162			1,247			7	%
Professional services		379			438			505			581			434			538			549			726			25	%		32	%		1,903			2,247			18	%
Other		570			422			404			373			310			266			366			260			(30	%)		(29	%)		1,769			1,202			(32	%)
September 11th related insurance
recoveries, net		(251	)		0			0			0			0			0			0			0			-			-			(251	)		0			*
Total non-interest expenses		4,743			4,637			5,205			4,832			6,014			5,767			5,321			5,756			19	%		8	%		19,417			22,858			18	%

Income from continuing operations before
losses from unconsolidated investees, and
cumulative effect and cumulative effect of																										��
accounting change		2,095			1,394			1,742			2,130			2,468			2,996			2,667			2,869			35	%		8	%		7,361			11,000			49	%
Losses from unconsolidated investees		73			67			105			66			69			103			2			54			(18	%)		*			311			228			(27	%)
Provision for income taxes		673			396			471			318			792			1,060			814			609			92	%		(25	%)		1,858			3,275			76	%
Income from continuing operations		1,349			931			1,166			1,746			1,607			1,833			1,851			2,206			26	%		19	%		5,192			7,497			44	%
Discontinued operations
Gain/(loss) from discontinued
operations		7			(5	)		(1,700	)		1,212			(55	)		14			0			0			*			-			(486	)		(42	)		91	%
Income tax benefit/(provision)		(3	)		2			678			(493	)		22			(6	)		0			0			*			-			184			17			(91	%)
Gain/(loss) from discontinued
operations		4			(3	)		(1,022	)		719			(33	)		8			0			0			*			-			(302	)		(25	)		92	%
Cumulative effect of accounting change⁽²⁾		49			0			0			0			0			0			0			0			-			-			49			0			*
Net income	$	1,402		$	928		$	144		$	2,465		$	1,574		$	1,841		$	1,851		$	2,206			(11	%)		19	%	$	4,939		$	7,472			51	%
Preferred stock dividend requirements	$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	19			*			*		$	-		$	19			*
Earnings applicable to common
shareholders	$	1,402		$	928		$	144		$	2,465		$	1,574		$	1,841		$	1,851		$	2,187			(11	%)		18	%	$	4,939		$	7,453			51	%
Return on average common equity
from continuing operations		20.0	%		13.8	%		17.1	%		24.9	%		21.8	%		23.6	%		22.7	%		26.0	%								19.0	%		23.6	%
Return on average common equity		19.7	%		13.1	%		2.0	%		34.6	%		21.3	%		23.7	%		22.7	%		26.0	%								17.3	%		23.5	%
Pre-tax profit margin⁽³⁾		31	%		23	%		25	%		31	%		29	%		34	%		33	%		33	%								28	%		33	%
Compensation and benefits as a % of
net revenues		42	%		44	%		46	%		38	%		49	%		43	%		39	%		39	%								42	%		43	%

(1)	During the third quarter of fiscal 2006, the Company elected early application of Staff Accounting Bulletin 108 that was released by the U.S. Securities and Exchange Commission. For a further discussion of these adjustments, see note 18 “Staff Accounting Bulletin No. 108” in the Company’s Form 10-Q for the quarterly period ended August 31, 2006.
(2)	Represents the effects of the adoption of SFAS 123R in the first quarter of fiscal 2005.
(3)	Income before taxes, excluding losses from unconsolidated investees, as a % of net revenues.
	Note: Certain reclassifications have been made to prior period amounts to conform to the current presentation. Refer to Legal Notice page 25.

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

	Quarter Ended																Percentage Change From:
	Feb 28, 2005		May 31, 2005		Aug 31, 2005		Nov 30, 2005		Feb 28, 2006⁽¹⁾		May 31, 2006 ⁽¹⁾		Aug 31, 2006		Nov 30, 2006		4Q06 vs. 4Q05			4Q06 vs. 3Q06
Morgan Stanley
Total assets (millions)	$	802,210	$	818,711	$	837,391	$	898,523	$	959,625	$	1,027,054	$	1,028,872	$	1,123,901		25	%		9	%
Adjusted assets (millions) ⁽²⁾	$	447,221	$	440,283	$	458,190	$	481,869	$	528,148	$	548,596	$	556,754	$	654,664		36	%		18	%
Period end common shares outstanding (millions)		1,103.3		1,086.7		1,082.7		1,057.7		1,070.4		1,071.8		1,058.7		1,048.9		(1	%)		(1	%)
Book value per common share	$	25.83	$	26.07	$	26.07	$	27.59	$	28.12	$	29.97	$	31.24	$	32.67		18	%		5	%
Shareholders' equity (millions)⁽³⁾	$	31,328	$	31,224	$	31,107	$	31,946	$	33,886	$	35,902	$	37,956	$	40,248		26	%		6	%
Total capital (millions) ⁽⁴⁾	$	122,230	$	113,324	$	118,415	$	125,891	$	134,366	$	145,849	$	149,956	$	162,134		29	%		8	%
Worldwide employees		53,718		54,142		53,760		53,218		53,870		53,163		54,349		55,310		4	%		2	%


Average Daily 95%/One-Day Value-at-Risk ("VaR") ⁽⁵⁾
Primary Market Risk Category ($ millions, pre-tax)
Interest rate and credit spread	$	42	$	41	$	31	$	33	$	35	$	39	$	33	$	34
Equity price	$	29	$	22	$	24	$	23	$	25	$	29	$	26	$	32
Foreign exchange rate	$	8	$	8	$	8	$	8	$	9	$	9	$	7	$	12
Commodity price	$	23	$	24	$	25	$	31	$	31	$	28	$	33	$	30

Trading VaR	$	66	$	59	$	52	$	52	$	58	$	63	$	56	$	61
Non - trading VaR	$	16	$	12	$	14	$	18	$	20	$	26	$	24	$	18
Aggregate trading and non - trading VaR	$	76	$	67	$	58	$	60	$	65	$	70	$	66	$	67

(1)

During the third quarter of fiscal 2006, the Company elected early application of Staff Accounting Bulletin 108 that was released by the U.S. Securities and Exchange Commission. For a further discussion of these adjustments, see note 18 “Staff Accounting Bulletin No. 108” in the Company’s Form 10-Q for the quarterly period ended August 31, 2006.

(2)

Adjusted assets exclude certain self-funded assets considered to have minimal market, credit and/or liquidity risk that are generally attributable to matched book and securities lending businesses as measured by aggregate resale agreements and securities borrowed less non-derivative short positions. See page 23 for further information.

(3)

Includes common equity, preferred equity and junior subordinated debt issued to capital trusts.

(4)

Includes common equity, preferred equity, junior subordinated debt issued to capital trusts, capital units and the non-current portion of long-term debt.

(5)

95%/One-Day VaR represents the loss amount that one would not expect to exceed, on average, more than five times every one hundred trading days in the Company's trading positions if the portfolio were held constant for a one day period. For a further discussion of the calculation of VaR and the limitations of the Company's VaR methodology, see Part II, Item 7A "Quantitative and Qualitative Disclosures about Market Risk" in the Company's Form 10-K for fiscal 2005.

Note: Certain reclassifications have been made to prior period amounts to conform to the current presentation. Refer to Legal Notice page 25.

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

	Quarter Ended																				Twelve Months Ended
	Feb 28, 2006 ⁽¹⁾					May 31, 2006 ⁽¹⁾					Aug 31, 2006					Nov 30, 2006					Nov 30, 2006 ⁽¹⁾
	Average common equity (billions) (2)		Return on average common equity			Average common equity (billions) (2)		Return on average common equity			Average common equity (billions) (2)		Return on average common equity			Average common equity (billions) (2)		Return on average common equity			Average common equity (billions) (2)		Return on average common equity
Institutional Securities	$	16.2		29	%	$	18.1		28	%	$	18.8		30	%	$	19.6		36	%	$	18.2		31	%

Global Wealth Management Group		3.5		2	%		3.3		13	%		3.0		14	%		3.0		16	%		3.2		11	%

Asset Management		2.0		21	%		2.1		26	%		2.3		13	%		2.5		18	%		2.2		19	%

Securities Business		21.7		24	%		23.5		26	%		24.1		27	%		25.1		32	%		23.6		27	%

Discover		4.6		26	%		5.0		27	%		5.1		19	%		5.1		15	%		4.9		22	%

Capital surplus (unallocated)		3.2					2.6					3.4					3.5					3.2

Total - continuing operations		29.5		22	%		31.1		24	%		32.6		23	%		33.7		26	%		31.7		24	%

Discontinued operations		0.0					0.0					0.0					0.0					0.0

Firm	$	29.5		21	%	$	31.1		24	%	$	32.6		23	%	$	33.7		26	%	$	31.7		23	%

	Quarter Ended																				Twelve Months Ended
	Feb 28, 2005					May 31, 2005					Aug 31, 2005					Nov 30, 2005					Nov 30, 2005
	Average common equity (billions) (2)		Return on average common equity			Average common equity (billions) (2)		Return on average common equity			Average common equity (billions) (2)		Return on average common equity			Average common equity (billions) (2)		Return on average common equity			Average common equity (billions) (2)		Return on average common equity
Institutional Securities	$	13.8		21	%	$	14.3		16	%	$	14.6		24	%	$	15.6		35	%	$	14.6		24	%

Global Wealth Management Group		3.8		23	%		3.6		8	%		3.5		2	%		3.7		9	%		3.7		11	%

Asset Management		1.8		41	%		1.7		25	%		1.7		24	%		1.7		55	%		1.7		36	%

Securities Business		19.4		23	%		19.6		16	%		19.8		20	%		21.0		32	%		20.0		23	%

Discover		4.3		20	%		4.2		16	%		4.6		13	%		4.6		4	%		4.4		13	%

Capital surplus (unallocated)		3.2					3.1					2.9					2.5					2.9

Total - continuing operations		26.9		20	%		26.9		14	%		27.3		17	%		28.1		25	%		27.3		19	%

Discontinued operations		1.5					1.5					1.3					0.4					1.2

Firm	$	28.4		20	%	$	28.4		13	%	$	28.6		2	%	$	28.5		35	%	$	28.5		17	%

(1)

(2)

The Company uses an economic capital model to determine the amount of equity capital needed to support the risk of its business activities and to ensure that the Company remains adequately capitalized. Economic capital is defined as the amount of capital needed to run the business through the business cycle and satisfy the requirements of regulators, rating agencies and the market. The Company's methodology is based on a going concern approach that assigns economic capital to each segment based on regulatory capital usage plus additional capital for stress losses, goodwill and principal investment risk. The economic capital model and allocation methodology may be enhanced over time in response to changes in the business and regulatory environment.

Note:

Certain reclassifications have been made to prior period amounts to conform to the current presentation. Refer to Legal Notice page 25.

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

	Quarter Ended																								Percentage Change From:						Twelve Months Ended						Percentage
	Feb 28, 2005			May 31, 2005			Aug 31, 2005			Nov 30, 2005			Feb 28, 2006(1)			May 31, 2006(1)			Aug 31, 2006			Nov 30, 2006			4Q06 vs. 4Q05			4Q06 vs. 3Q06			Nov 30, 2005			Nov 30, 2006(1)			Change

Investment banking	$	742		$	735		$	898		$	1,102		$	903		$	1,055		$	1,009		$	1,351			23	%		34	%	$	3,477		$	4,318			24	%
Principal transactions:
Trading		1,727			1,684			2,035			1,460			2,958			3,447			2,713			2,154			48	%		(21	%)		6,906			11,272			63	%
Investments		91			226			69			270			284			595			188			410			52	%		118	%		656			1,477			125	%
Commissions		503			538			501			618			610			694			629			673			9	%		7	%		2,160			2,606			21	%
Asset management, distribution and admin. fees		34			39			46			33			44			73			72			70			112	%		(3	%)		152			259			70	%
Interest and dividends		5,275			5,379			6,263			8,538			9,791			9,318			11,826			11,044			29	%		(7	%)		25,455			41,979			65	%
Other		66			78			69			88			79			83			88			154			75	%		75	%		301			404			34	%
Total revenues		8,438			8,679			9,881			12,109			14,669			15,265			16,525			15,856			31	%		(4	%)		39,107			62,315			59	%
Interest expense		4,423			5,339			5,717			7,955			9,196			9,720			11,536			10,301			29	%		(11	%)		23,434			40,753			74	%
Net revenues		4,015			3,340			4,164			4,154			5,473			5,545			4,989			5,555			34	%		11	%		15,673			21,562			38	%

Total non-interest expenses		2,938			2,527			2,876			2,578			3,698			3,458			2,988			3,258			26	%		9	%		10,919			13,402			23	%

Income from continuing operations before losses
from unconsolidated investees, taxes, and
cumulative effect of accounting change		1,077			813			1,288			1,576			1,775			2,087			2,001			2,297			46	%		15	%		4,754			8,160			72	%
Losses from unconsolidated investees		73			67			105			66			68			103			1			53			(20	%)		*			311			225			(28	%)
Income before taxes		1,004			746			1,183			1,510			1,707			1,984			2,000			2,244			49	%		12	%		4,443			7,935			79	%
Provision for income taxes		284			171			306			148			531			722			580			475			*			(18	%)		909			2,308			154	%
Income from continuing operations ⁽²⁾	$	720		$	575		$	877		$	1,362		$	1,176		$	1,262		$	1,420		$	1,769			30	%		25	%	$	3,534		$	5,627			59	%

Return on average common equity ⁽³⁾		21	%		16	%		24	%		35	%		29	%		28	%		30	%		36	%								24	%		31	%
Pre-tax profit margin ⁽⁴⁾		27	%		24	%		31	%		38	%		32	%		38	%		40	%		41	%								30	%		38	%


(1) During the third quarter of fiscal 2006, the Company elected early application of Staff Accounting Bulletin 108 that was released by the U.S. Securities and Exchange Commission. For a further discussion of these adjustments, see note 18 “Staff Accounting Bulletin No. 108” in the Company’s Form 10-Q for the quarterly period ended August 31, 2006.
(2) Excludes (gain)/loss from discontinued operations and cumulative effect of accounting change.
(3) Refer to page 4 for the allocation of average common equity.
(4) Income before taxes, excluding losses from unconsolidated investees, as a % of net revenues.

Note: Certain reclassifications have been made to prior period amounts to conform to the current presentation. Refer to Legal Notice page 25.

MORGAN STANLEY

Quarterly Financial Information and Statistical Data

Institutional Securities

(unaudited, dollars in millions)

	Quarter Ended																Percentage Change From:						Twelve Months Ended				Percentage
	Feb 28, 2005		May 31, 2005		Aug 31, 2005		Nov 30, 2005		Feb 28, 2006		May 31, 2006		Aug 31, 2006		Nov 30, 2006		4Q06 vs. 4Q05			4Q06 vs. 3Q06			Nov 30, 2005		Nov 30, 2006		Change

Investment Banking
Advisory revenue	$	254	$	357	$	388	$	479	$	355	$	385	$	461	$	642		34	%		39	%	$	1,478	$	1,843		25	%
Underwriting revenue
Equity		202		145		200		358		197		371		237		254		(29	%)		7	%		905		1,059		17	%
Fixed income		286		233		310		265		351		299		311		455		72	%		46	%		1,094		1,416		29	%
Total underwriting revenue	$	488	$	378	$	510	$	623	$	548	$	670	$	548	$	709		14	%		29	%	$	1,999	$	2,475		24	%

Total investment banking revenue	$	742	$	735	$	898	$	1,102	$	903	$	1,055	$	1,009	$	1,351		23	%		34	%	$	3,477	$	4,318		24	%

Sales and Trading
Sales and trading net revenue ⁽¹⁾
Equity		1,214		1,119		1,280		1,191		1,654		1,724		1,509		1,433		20	%		(5	%)		4,804		6,320		32	%
Fixed income		1,998		1,211		1,964		1,609		2,724		2,366		2,221		2,266		41	%		2	%		6,782		9,577		41	%
Total sales and trading net revenue	$	3,212	$	2,330	$	3,244	$	2,800	$	4,378	$	4,090	$	3,730	$	3,699		32	%		(1	%)	$	11,586	$	15,897		37	%

	Fiscal View																								Calendar View
	Quarter Ended (2)																								Eleven Months Ended (2)
	Feb 28, 2005			May 31, 2005			Aug 31, 2005			Nov 30, 2005			Feb 28, 2006			May 31, 2006			Aug 31, 2006			Nov 30, 2006			Nov 30, 2005			Nov 30, 2006

Mergers and acquisitions announced transactions
Morgan Stanley global market volume (billions)	$	144.7		$	201.1		$	107.9		$	125.6		$	320.9		$	176.9		$	174.4		$	331.5		$	557.7		$	838.4
Market share		23.2	%		35.8	%		19.1	%		18.2	%		39.8	%		20.2	%		24.2	%		31.9	%		25.3	%		26.9	%
Rank		5			1			5			6			4			4			3			2			2			3

Mergers and acquisitions completed transactions
Morgan Stanley global market volume (billions)	$	41.4		$	94.9		$	155.2		$	170.7		$	173.7		$	181.5		$	170.1		$	221.5		$	449.4		$	680.5
Market share		12.6	%		25.6	%		21.8	%		29.3	%		27.5	%		29.9	%		26.6	%		34.1	%		24.0	%		29.6	%
Rank		4			2			5			2			2			2			4			1			4			2

Global equity and related issues
Morgan Stanley global market volume (billions)	$	14.7		$	5.7		$	9.0		$	15.5		$	10.8		$	19.1		$	10.5		$	14.7		$	39.9		$	49.1
Market share		11.8	%		6.2	%		6.2	%		10.2	%		7.5	%		9.5	%		8.6	%		7.0	%		8.7	%		8.0	%
Rank		1			6			5			1			4			2			3			6			3			3

Global IPO's
Morgan Stanley global market volume (billions)	$	3.5		$	2.1		$	3.2		$	5.4		$	2.7		$	7.5		$	5.2		$	5.8		$	13.4		$	20.1
Market Share		10.4	%		8.6	%		6.6	%		9.9	%		6.8	%		11.1	%		11.6	%		6.3	%		9.1	%		8.8	%
Rank		1			2			4			2			5			2			1			6			2			2

Global debt
Morgan Stanley global market volume (billions)	$	82.9		$	84.1		$	91.2		$	81.7		$	95.1		$	99.8		$	86.9		$	105.5		$	327.1		$	367.3
Market share		6.1	%		5.8	%		6.1	%		5.1	%		5.9	%		5.8	%		5.5	%		5.4	%		5.9	%		5.7	%
Rank		4			5			5			7			5			5			6			6			5			5

(1) Includes principal transactions trading, commissions and net interest revenue.

(2) Source: Thomson Financial, data as of December 6, 2006.

Note: Certain reclassifications have been made to prior period amounts to conform to the current presentation. Refer to Legal Notice page 25.

MORGAN STANLEY

Quarterly Financial Information and Statistical Data

Institutional Securities

(unaudited, dollars in billions)

	Quarter Ended																								Percentage Change From:
	Feb 28, 2005			May 31, 2005			Aug 31, 2005			Nov 30, 2005			Feb 28, 2006			May 31, 2006			Aug 31, 2006			Nov 30, 2006			4Q06 vs. 4Q05			4Q06 vs. 3Q06
Loans
Investment grade	$	1.5		$	1.8		$	3.0		$	5.0		$	5.6		$	6.2		$	7.4		$	6.4			28	%		(14	%)
Non-investment grade		1.0			1.9			2.8			2.3			2.9			2.9			5.4			3.4			48	%		(37	%)
Total loans	$	2.5		$	3.7		$	5.8		$	7.3		$	8.5		$	9.1		$	12.8		$	9.8			34	%		(23	%)

Commitments
Investment grade	$	18.7		$	21.1		$	27.6		$	23.9		$	29.2		$	27.1		$	26.2		$	32.2			35	%		23	%
Non-investment grade		2.0			5.6			3.0			13.1			5.3			8.2			18.4			17.0			30	%		(8	%)
Total commitments	$	20.7		$	26.7		$	30.6		$	37.0		$	34.5		$	35.3		$	44.6		$	49.2			33	%		10	%

Loans plus commitments
Investment grade	$	20.2		$	22.9		$	30.6		$	28.9		$	34.8		$	33.3		$	33.6		$	38.6			34	%		15	%
Non-investment grade	$	3.0		$	7.5		$	5.8		$	15.4		$	8.2		$	11.1		$	23.8		$	20.4			32	%		(14	%)
% investment grade		87	%		75	%		84	%		65	%		81	%		75	%		59	%		65	%
% non-investment grade		13	%		25	%		16	%		35	%		19	%		25	%		42	%		35	%

Total loans and commitments	$	23.2		$	30.4		$	36.4		$	44.3		$	43.0		$	44.4		$	57.4		$	59.0			33	%		3	%
Hedges ⁽¹⁾	$	13.1		$	14.3		$	16.1		$	17.8		$	17.7		$	23.8		$	24.3		$	26.5			49	%		9	%
Total loans and commitments net of hedges	$	10.1		$	16.1		$	20.3		$	26.5		$	25.3		$	20.6		$	33.1		$	32.5			23	%		(2	%)

(1)

Includes both internal and external hedges utilized by the lending business.

Note:

Certain reclassifications have been made to prior period amounts to conform to the current presentation.

Refer to Legal Notice page 25.

MORGAN STANLEY

Quarterly Global Wealth Management Group Income Statement Information

(unaudited, dollars in millions)

	Quarter Ended																								Percentage Change From:						Twelve Months Ended						Percentage
	Feb 28, 2005			May 31, 2005			Aug 31, 2005			Nov 30, 2005			Feb 28, 2006			May 31, 2006			Aug 31, 2006			Nov 30, 2006			4Q06 vs. 4Q05			4Q06 vs. 3Q06			Nov 30, 2005			Nov 30, 2006			Change
Investment banking	$	71		$	68		$	81		$	100		$	67		$	95		$	120		$	146			46	%		22	%	$	320		$	428			34	%
Principal transactions:
Trading		120			111			116			117			124			121			113			116			(1	%)		3	%		464			474			2	%
Investments		(2	)		(2	)		1			2			0			26			16			11			*			(31	%)		(1	)		53			*
Commissions		329			295			306			298			319			312			261			316			6	%		21	%		1,228			1,208			(2	%)
Asset management, distribution and admin fees		607			632			629			649			649			674			688			682			5	%		(1	%)		2,517			2,693			7	%
Interest and dividends		135			149			174			204			206			246			270			296			45	%		10	%		662			1,018			54	%
Other		38			45			38			46			36			44			33			42			(9	%)		27	%		167			155			(7	%)
Total revenues		1,298			1,298			1,345			1,416			1,401			1,518			1,501			1,609			14	%		7	%		5,357			6,029			13	%
Interest expense		60			70			90			118			117			116			130			161			36	%		24	%		338			524			55	%
Net revenues		1,238			1,228			1,255			1,298			1,284			1,402			1,371			1,448			12	%		6	%		5,019			5,505			10	%

Total non-interest expenses		885			1,110			1,225			1,214			1,261			1,245			1,213			1,277			5	%		5	%		4,434			4,996			13	%
Income before taxes		353			118			30			84			23			157			158			171			104	%		8	%		585			509			(13	%)
Provision for income taxes		139			48			11			(1	)		9			51			53			51			*			(4	%)		197			164			(17	%)
Income from continuing operations ⁽¹⁾	$	214		$	70		$	19		$	85		$	14		$	106		$	105		$	120			41	%		14	%	$	388		$	345			(11	%)

Return on average common equity ⁽²⁾		23	%		8	%		2	%		9	%		2	%		13	%		14	%		16	%								11	%		11	%

Pre-tax profit margin ⁽³⁾		29	%		10	%		2	%		7	%		2	%		11	%		12	%		12	%								12	%		9	%

(1)

Excludes cumulative effect of accounting change.

(2)

Refer to page 4 for the allocation of average common equity.

(3)

Income before taxes as a % of net revenues.

Note:

Certain reclassifications have been made to prior period amounts to conform to the current presentation.

Refer to Legal Notice page 25.

MORGAN STANLEY

Quarterly Financial Information and Statistical Data

Global Wealth Management Group

(unaudited)

	Quarter Ended																								Percentage Change From:
	Feb 28, 2005			May 31, 2005			Aug 31, 2005			Nov 30, 2005			Feb 28, 2006			May 31, 2006			Aug 31, 2006			Nov 30, 2006			4Q06 vs. 4Q05			4Q06 vs. 3Q06

Global representatives		10,471			10,438			9,311			9,526			9,000			8,179			8,069			8.030			(16	%)		-

Annualized revenue per global
representative (thousands)⁽¹⁾	$	462		$	470		$	508		$	551		$	554		$	653		$	675		$	720			31	%		7	%

Assets by client segment (billions)
$10m or more		148			148			153			157			167			172			178			202			29	%		13	%
$1m - $10m		211			211			215			218			224			225			234			248			14	%		6	%
Subtotal - > $1m		359			359			368			375			391			397			412			450			20	%		9	%
$100k - $1m		193			190			188			181			181			183			183			179			(1	%)		(2	%)
< $100k		38			36			34			32			32			29			28			26			(19	%)		(7	%)
Client assets excluding corporate/other		590			585			590			588			604			609			623			655			11	%		5	%
Corporate / other		28			28			29			29			29			30			29			31			7	%		7	%
Total client assets (billions)	$	618		$	613		$	619		$	617		$	633		$	639		$	652		$	686			11	%		5	%

Fee-based client account assets (billions) ⁽²⁾	$	166		$	165		$	170		$	173		$	182		$	190		$	193		$	206			19	%		7	%
Fee-based assets as a % of client assets		27	%		27	%		27	%		28	%		29	%		30	%		30	%		30	%

Bank deposit program (millions)	$	496		$	446		$	449		$	1,689		$	7,319		$	9,114		$	9,839		$	13,301			*			35	%

Client assets per global
representative (millions)⁽³⁾	$	59		$	59		$	66		$	65		$	70		$	78		$	81		$	85			31	%		5	%

Domestic retail net new assets (billions) ⁽⁴⁾	$	3.7		$	3.8		$	(2.1	)	$	(8.1	)	$	-		$	2.4		$	5.4		$	0.7			109	%		(87	%)

Domestic retail locations		524			526			517			485			484			473			460			453			(7	%)		(2	%)

(1)

Annualized revenue divided by average global representative headcount.

(2)

Represents the amount of assets in client accounts where the basis of payment for services is a fee calculated on those assets.

(3)

Total client assets divided by period end global representative headcount.

(4)

Represents net new assets in the U.S. broad-based branch system.

Note:

Certain reclassifications have been made to prior period amounts to conform to the current presentation.

Refer to Legal Notice page 25.

MORGAN STANLEY

Quarterly Asset Management Income Statement Information

(unaudited, dollars in millions)

	Quarter Ended																								Percentage Change From:						Twelve Months Ended						Percentage
	Feb 28, 2005			May 31, 2005			Aug 31, 2005			Nov 30, 2005			Feb 28, 2006			May 31, 2006			Aug 31, 2006			Nov 30, 2006			4Q06 vs. 4Q05			4Q06 vs. 3Q06			Nov 30, 2005			Nov 30, 2006			Change
Investment banking	$	11		$	11		$	13		$	15		$	12		$	15		$	9		$	12			(20	%)		33	%	$	50		$	48			(4	%)
Principal transactions:
Investments		64			2			33			227			30			69			(2	)		42			(81	%)		*			326			139			(57	%)
Commissions		7			7			9			6			7			7			5			6			-			20	%		29			25			(14	%)
Asset management, distribution and admin fees		605			615			612			628			639			621			606			638			2	%		5	%		2,460			2,504			2	%
Interest and dividends		3			3			4			13			5			10			19			11			(15	%)		(42	%)		23			45			96	%
Other		8			6			11			5			6			6			6			5			-			(17	%)		30			23			(23	%)
Total revenues		698			644			682			894			699			728			643			714			(20	%)		11	%		2,918			2,784			(5	%)
Interest expense		2			2			3			4			4			5			9			(4	)		(200	%)		(144	%)		11			14			27	%
Net revenues		696			642			679			890			695			723			634			718			(19	%)		13	%		2,907			2,770			(5	%)

Total non-interest expenses		409			467			517			507			523			499			509			528			4	%		4	%		1,900			2,059			8	%
Income before taxes		287			175			162			383			172			224			125			190			(50	%)		52	%		1,007			711			(29	%)
Provision for income taxes		107			68			57			146			67			89			50			79			(46	%)		58	%		378			285			(25	%)
Income from continuing operations ⁽¹⁾	$	180		$	107		$	105		$	237		$	105		$	135		$	75		$	111			(53	%)		48	%	$	629		$	426			(32	%)

Return on average common equity ⁽²⁾		41	%		25	%		24	%		55	%		21	%		26	%		13	%		18	%								36	%		19	%
Pre-tax profit margin ⁽³⁾		41	%		27	%		24	%		43	%		25	%		31	%		20	%		27	%								35	%		26	%

(1)

Excludes cumulative effect of accounting change.

(2)

Refer to page 4 for the allocation of average common equity.

(3)

Income before taxes as a % of net revenues.

Note:

Certain reclassifications have been made to prior period amounts to conform to the current presentation.

Refer to Legal Notice page 25.

MORGAN STANLEY

Quarterly Financial Information and Statistical Data

Asset Management

(unaudited, dollars in billions)

	Quarter Ended																								Percentage Change From:						Twelve Months Ended						Percentage
	Feb 28, 2005			May 31, 2005			Aug 31, 2005			Nov 30, 2005			Feb 28, 2006			May 31, 2006			Aug 31, 2006			Nov 30, 2006			4Q06 vs. 4Q05			4Q06 vs. 3Q06			Nov 30, 2005			Nov 30, 2006			Change
Assets under management or supervision

Net flows by distribution channel
Americas Retail Morgan Stanley Brand		(3.0	)		(2.2	)		(2.6	)		(2.9	)		(3.0	)		(2.2	)		(2.2	)		(2.4	)		17	%		(9	%)		(10.7	)		(9.8	)		8	%
Americas Retail Van Kampen Brand		1.1			0.6			0.7			0.7			(0.7	)		(0.4	)		(0.8	)		(0.1	)		(114	%)		88	%		3.1			(2.0	)		(165	%)
Americas Intermediary		(3.9	)		0.2			1.6			0.4			1.7			4.0			1.5			1.3			*			(13	%)		(1.7	)		8.5			*
U.S. Institutional		(4.1	)		(4.1	)		(2.0	)		(2.2	)		(4.3	)		(4.6	)		(2.3	)		(2.3	)		(5	%)		-			(12.4	)		(13.5	)		(9	%)
Non- U.S.		1.9			1.6			(0.1	)		3.8			1.1			2.0			0.2			1.7			(55	%)		*			7.2			5.0			(31	%)
Net flows excluding money markets		(8.0	)		(3.9	)		(2.4	)		(0.2	)		(5.2	)		(1.2	)		(3.6	)		(1.8	)		*			50	%		(14.5	)		(11.8	)		19	%
Money Market Net Flows
Institutional		1.7			(0.9	)		2.9			(1.2	)		4.0			(1.4	)		2.8			7.7			*			175	%		2.5			13.1			*
Retail		(0.8	)		(2.3	)		(0.7	)		(2.7	)		(5.7	)		(3.0	)		(0.7	)		(3.3	)		(22	%)		*			(6.5	)		(12.7	)		(95	%)
Total money market net flows		0.9			(3.2	)		2.2			(3.9	)		(1.7	)		(4.4	)		2.1			4.4			*			110	%		(4.0	)		0.4			110	%


Assets under management or supervision by distribution channel
Americas Retail Morgan Stanley Brand	$	68		$	65		$	64		$	62		$	60		$	58		$	56		$	57			(8	%)		2	%
Americas Retail Van Kampen Brand		81			83			86			88			90			89			90			94			7	%		4	%
Americas Intermediary		44			43			46			48			51			55			59			63			31	%		7	%
U.S. Institutional		92			86			87			87			88			86			85			88			1	%		4	%
Non- U.S.		59			59			62			67			75			77			80			88			31	%		10	%
Total long term assets under management or supervision		344			336			345			352			364			365			370			390			11	%		5	%
Institutional money markets/liquidity		32			31			34			33			37			37			40			49			48	%		23	%
Retail money markets		51			49			49			46			41			38			38			35			(24	%)		(8	%)
Total Money Markets		83			80			83			79			78			75			78			84			6	%		8	%
Total assets under management or supervision	$	427		$	416		$	428		$	431		$	442		$	440		$	448		$	474			10	%		6	%
Share of minority interest assets⁽¹⁾		0			0			0			0			0			0			0			4			*			*
Total	$	427		$	416		$	428		$	431		$	442		$	440		$	448		$	478			11	%		7	%

Assets under management or supervision by asset class
Equity	$	207		$	205		$	212		$	218		$	230		$	226		$	226		$	239			10	%		6	%
Fixed income		97			92			92			91			90			91			93			94			3	%		1	%
Money market		83			80			83			79			78			75			78			84			6	%		8	%
Alternatives		19			18			18			19			18			20			20			21			11	%		5	%
Real estate		10			10			11			12			14			15			18			22			83	%		22	%
Total assets under management		416			405			416			419			430			427			435			460			10	%		6	%
Unit trusts		11			11			12			12			12			13			13			14			17	%		8	%
Total assets under management or supervision	$	427		$	416		$	428		$	431		$	442		$	440		$	448		$	474			10	%		6	%
Share of minority interest assets ⁽¹⁾		0			0			0			0			0			0			0			4			*			*
Total	$	427		$	416		$	428		$	431		$	442		$	440		$	448		$	478			11	%		7	%

(1) Represents Asset Management's share of minority interest assets.

Note: Certain reclassifications have been made to prior period amounts to conform to the current presentation.

Refer to Legal Notice page 25.

MORGAN STANLEY

Quarterly Financial Information and Statistical Data

Consolidated Assets Under Management or Supervision

(unaudited, dollars in billions)

	Quarter Ended																Percentage Change From:
	Feb 28, 2005		May 31, 2005		Aug 31, 2005		Nov 30, 2005		Feb 28, 2006		May 31, 2006		Aug 31, 2006		Nov 30, 2006		4Q06 vs. 4Q05			4Q06 vs. 3Q06
Assets under management or supervision by distribution channel
Americas Retail Morgan Stanley Brand	$	68	$	65	$	64	$	62	$	60	$	58	$	56	$	57		(8	%)		2	%
Americas Retail Van Kampen Brand		81		83		86		88		90		89		90		94		7	%		4	%
Americas Intermediary		44		43		46		48		51		55		59		63		31	%		7	%
U.S. Institutional		92		86		87		87		88		86		85		88		1	%		4	%
Non - U.S.		59		59		62		67		75		77		80		88		31	%		10	%
Total long term assets under management or supervision		344		336		345		352		364		365		370		390		11	%		5	%
Institutional money markets/liquidity		32		31		34		33		37		37		40		49		48	%		23	%
Retail money markets		51		49		49		46		41		38		38		35		(24	%)		(8	%)
Total Money Markets		83		80		83		79		78		75		78		84		6	%		8	%
Sub-total assets under management or supervision		427		416		428		431		442		440		448		474		10	%		6	%

Global wealth management group		127		126		132		139		149		148		161		173		24	%		7	%
Institutional securities		22		23		27		29		31		37		38		42		45	%		11	%
Total assets under management or supervision	$	576	$	565	$	587	$	599	$	622	$	625	$	647	$	689		15	%		6	%

Share of minority interest assets ⁽¹⁾			0			0			0			0			0			0			0			4			*			*
Total		$	576		$	565		$	587		$	599		$	622		$	625		$	647		$	693			16	%		7	%

Consolidated assets under management or supervision by asset class
Equity	$	267	$	265	$	276	$	285	$	301	$	303	$	306	$	325	14	%	6	%
Fixed income		111		106		107		108		108		109		111		113	5	%	2	%
Money market		87		84		87		83		83		80		83		89	7	%	7	%
Alternatives		19		18		18		19		18		20		20		21	11	%	5	%
Real estate		32		33		38		41		45		52		56		64	56	%	14	%
Subtotal		516		506		526		536		555		564		576		612	14	%	6	%
Unit trusts		11		11		12		12		12		13		13		14	17	%	8	%
Other ⁽²⁾		49		48		49		51		55		48		58		63	24	%	9	%
Total assets under management or supervision	$	576	$	565	$	587	$	599	$	622	$	625	$	647	$	689	15	%	6	%
Share of minority interest assets ⁽¹⁾		0		0		0		0		0		0		0		4	*		*
Total	$	576	$	565	$	587	$	599	$	622	$	625	$	647	$	693	16	%	7	%

(1)

Represents Asset Management's share of minority interest assets.

(2)

Includes assets under management or supervision associated with the Global Wealth Management Group.

Note:

Certain reclassifications have been made to prior period amounts to conform to the current presentation.

Refer to Legal Notice page 25.

MORGAN STANLEY

Quarterly Discover Income Statement Information

(unaudited, dollars in millions)



	Quarter Ended																								Percentage Change From:						Twelve Months Ended						Percentage
	Feb 28, 2005			May 31, 2005			Aug 31, 2005			Nov 30, 2005			Feb 28, 2006			May 31, 2006			Aug 31, 2006			Nov 30, 2006			4Q06 vs. 4Q05			4Q06 vs. 3Q06			Nov 30, 2005			Nov 30, 2006			Change

Merchant, cardmember and other fees	$	308		$	318		$	357		$	340		$	289		$	277		$	312		$	289			(15	%)		(7	%)	$	1,323		$	1,167			(12	%)
Servicing and securitization income		494			423			398			294			596			651			565			526			79	%		(7	%)		1,609			2,338			45	%
Other		2			2			(1	)		2			4			5			13			13			*			-			5			35			*
Total non-interest revenues		804			743			754			636			889			933			890			828			30	%		(7	%)		2,937			3,540			21	%

Interest revenue		458			536			593			587			586			608			642			622			6	%		(3	%)		2,174			2,458			13	%
Interest expense		168			182			212			219			231			220			253			248			13	%		(2	%)		781			952			22	%
Net interest income		290			354			381			368			355			388			389			374			2	%		(4	%)		1,393			1,506			8	%

Provision for consumer loan losses		135			209			224			310			155			130			232			239			(23	%)		3	%		878			756			(14	%)
Net credit income		155			145			157			58			200			258			157			135			133	%		(14	%)		515			750			46	%

Net revenues		959			888			911			694			1,089			1,191			1,047			963			39	%		(8	%)		3,452			4,290			24	%

Total non-interest expenses		605			625			672			629			610			650			679			764			21	%		13	%		2,531			2,703			7	%

Income before losses from
unconsolidated investees and taxes		354			263			239			65			479			541			368			199			*			(46	%)		921			1,587			72	%
Losses from unconsolidated investees		0			0			0			0			1			0			1			1			*			-			0			3			*
Income before taxes		354			263			239			65			478			541			367			198			*			(46	%)		921			1,584			72	%
Provision for income taxes		134			99			89			18			178			203			125			-			*			*			340			506			49	%
Income from continuing operations ⁽¹⁾	$	220		$	164		$	150		$	47		$	300		$	338		$	242		$	198			*			(18	%)	$	581		$	1,078			86	%

Return on average common equity ⁽²⁾		20	%		16	%		13	%		4	%		26	%		27	%		19	%		15	%								13	%		22	%
Pre-tax profit margin ⁽³⁾		37	%		30	%		26	%		9	%		44	%		45	%		35	%		21	%								27	%		37	%

(1)	Excludes cumulative effect of accounting change.
(2)	Refer to page 4 for the allocation of average common equity.
(3)	Income before taxes, excluding losses from unconsolidated investees, as a % of net revenues.
Note:	Certain reclassifications have been made to prior period amounts to conform to the current presentation.
	Refer to Legal Notice page 25.

MORGAN STANLEY

Quarterly Discover Income Statement Information

(Managed loan basis)

(unaudited, dollars in millions)

	Quarter Ended																								Percentage Change From:						Twelve Months Ended						Percentage
	Feb 28, 2005			May 31, 2005			Aug 31, 2005			Nov 30, 2005			Feb 28, 2006			May 31, 2006			Aug 31, 2006			Nov 30, 2006			4Q06 vs. 4Q05			4Q06 vs. 3Q06			Nov 30, 2005			Nov 30, 2006			Change

Merchant, cardmember and other fees	$	481		$	484		$	532		$	520		$	519		$	541		$	579		$	542			4	%		(6	%)	$	2,017		$	2,181			8	%
Servicing and securitization income		0			0			0			0			0			0			0			0			-			-			0			0			-
Other		34			(14	)		(19	)		(74	)		143			22			11			18			124	%		64	%		(73	)		194			*
Total non-interest revenues		515			470			513			446			662			563			590			560			26	%		(5	%)		1,944			2,375			22	%

Interest revenue		1,383			1,426			1,463			1,432			1,475			1,576			1,572			1,544			8	%		(2	%)		5,704			6,167			8	%
Interest expense		401			433			475			497			541			576			619			614			24	%		(1	%)		1,806			2,350			30	%
Net interest income		982			993			988			935			934			1,000			953			930			(1	%)		(2	%)		3,898			3,817			(2	%)

Provision for consumer loan losses		538			575			590			687			507			372			496			527			(23	%)		6	%		2,390			1,902			(20	%)
Net credit income		444			418			398			248			427			628			457			403			63	%		(12	%)		1,508			1,915			27	%

Net revenues		959			888			911			694			1,089			1,191			1,047			963			39	%		(8	%)		3,452			4,290			24	%

Total non-interest expenses		605			625			672			629			610			650			679			764			21	%		13	%		2,531			2.703			7	%

Income before losses from
consolidated investees and taxes		354			263			239			65			479			541			368			199			*			(46	%)		921			1,587			72	%
Losses/(gains) from unconsolidated investees		0			0			0			0			1			0			1			1			*			-			0			3			*
Income before taxes		354			263			239			65			478			541			367			198			*			(46	%)		921			1,584			72	%
Provision for income taxes		134			99			89			18			178			203			125			-			*			*			340			506			49	%
Income from continuing operations ⁽¹⁾	$	220		$	164		$	150		$	47		$	300		$	338		$	242		$	198			*			(18	%)	$	581		$	1,078			86	%

Return on average common equity⁽²⁾		20	%		16	%		13	%		4	%		26	%		27	%		19	%		15	%								13	%		22	%
Pre-tax profit margin ⁽³⁾		37	%		30	%		26	%		9	%		44	%		45	%		35	%		21	%								27	%		37	%

(1)

Excludes cumulative effect of accounting change.

(2)

Refer to page 4 for the allocation of average common equity.

(3)

Income before taxes, excluding losses from unconsolidated investees, as a % of net revenues.

Note:

Certain reclassifications have been made to prior period amounts to conform to the current presentation.

Refer to Legal Notice page 25.

MORGAN STANLEY

Quarterly Financial Information and Statistical Data

Discover

(unaudited, dollars in millions)

	Quarter Ended																								Percentage Change From:						Twelve Months Ended						Percentage
	Feb 28, 2005			May 31, 2005			Aug 31, 2005			Nov 30, 2005			Feb 28, 2006			May 31, 2006			Aug 31, 2006			Nov 30, 2006			4Q06 vs. 4Q05			4Q06 vs. 3Q06			Nov 30, 2005			Nov 30, 2006			Change

Total owned credit card loans ⁽¹⁾
Period end	$	18,908		$	19,385		$	20,570		$	22,496		$	19,924		$	21,764		$	22,922		$	23,588			5	%		3	%	$	22,496		$	23,588			5	%
Average	$	19,210		$	18,753		$	19,835		$	21,934		$	21,976		$	19,664		$	22,424		$	22,539			3	%		1	%	$	19,932		$	21,647			9	%

Total managed credit card loans ⁽¹⁾⁽²⁾
Period end	$	47,770		$	46,845		$	47,105		$	46,936		$	47,825		$	48,539		$	49,585		$	50,291			7	%		1	%	$	46,936		$	50,291			7	%
Average	$	48,930		$	47,146		$	46,769		$	46,502		$	47,575		$	47,307		$	48,763		$	49,181			6	%		1	%	$	47,330		$	48,207			2	%
Interest yield		11.23	%		11.69	%		12.04	%		11.94	%		12.13	%		12.69	%		12.38	%		12.23	%		29	bp		(15	bp)		11.72	%		12.36	%		64	bp
Interest spread		7.79	%		7.96	%		7.95	%		7.55	%		7.44	%		7.78	%		7.07	%		6.86	%		(69	bp)		(21	bp)		7.81	%		7.29	%		(52	bp)
Transaction volume (billions)	$	25.9		$	25.4		$	26.7		$	26.1		$	26.8		$	28.5		$	30.2		$	29.1			11	%		(4	%)	$	104.1		$	114.7			10	%
Net Sales		20.8			21.1			22.4			21.6			22.5			24.0			25.7			24.5			13	%		(5	%)		86.0			96.6			12	%
Other transaction volume		5.1			4.3			4.3			4.5			4.3			4.5			4.5			4.6			2	%		2	%		18.1			18.1			-
Accounts (millions)		45.9			45.9			45.6			45.5			46.1			45.9			45.6			45.3			-			(1	%)		45.5			45.3			-
Active accounts (millions)		19.5			19.3			19.2			19.2			19.6			19.6			19.7			19.8			3	%		1	%		19.2			19.8			3	%
Average receivables per avg.
active account (actual $)	$	2,476		$	2,426		$	2,429		$	2,420		$	2,457		$	2,415		$	2,484		$	2,500			3	%		1	%	$	2,438		$	2,464			1	%
Trans volume per avg. active
account (actual $)	$	1,311		$	1,306		$	1,387		$	1,360		$	1,385		$	1,457		$	1,538		$	1,481			9	%		(4	%)	$	5,363		$	5,862			9	%
Net gain on securitization	$	32		$	(16	)	$	(18	)	$	(76	)	$	139		$	17		$	(2	)	$	5			107	%		*		$	(78	)	$	159			*
Return on managed receivables ⁽³⁾		1.82	%		1.38	%		1.28	%		0.40	%		2.56	%		2.84	%		1.96	%		1.62	%		122	bp		(34	bp)		1.23	%		2.24	%		101	bp
Credit quality
Net charge-off rate		5.11	%		4.94	%		5.12	%		5.76	%		5.06	%		3.30	%		3.81	%		4.15	%		(161	bp)		34	bp		5.23	%		4.08	%		(115	bp)
Delinquency rate (over 30 days)		4.24	%		3.90	%		3.91	%		3.98	%		3.45	%		3.29	%		3.41	%		3.51	%		(47	bp)		10	bp		3.98	%		3.51	%		(47	bp)
Delinquency rate (over 90 days)		2.05	%		1.83	%		1.80	%		1.75	%		1.61	%		1.53	%		1.59	%		1.65	%		(10	bp)		6	bp		1.75	%		1.65	%		(10	bp)
Allowance for loan losses at period end	$	840		$	828		$	817		$	829		$	777		$	773		$	808		$	828			-			2	%	$	829		$	828			-

International managed credit card loans ⁽²⁾
Period end	$	2,648		$	2,479		$	2,684		$	2,675		$	4,183		$	4,406		$	4,522		$	4,644			74	%		3	%	$	2,675		$	4,644			74	%
Average	$	2,606		$	2,578		$	2,523		$	2,667		$	2,911		$	4,049		$	4,361		$	4,419			66	%		1	%	$	2,593		$	3,939			52	%
Accounts (millions)		1.4			1.4			1.5			1.5			2.6			2.9			2.9			3.0			100	%		3	%		1.5			3.0			100	%

Payment services (millions of transactions)
Discover network transaction volume		314			315			338			334			339			340			362			358			7	%		(1	%)		1,301			1,399			8	%
PULSE network transaction volume⁽⁴⁾		216			457			466			417			425			471			473			488			17	%		3	%		1,556			1,857			19	%
Total network transaction volume		530			772			804			751			764			811			835			846			13	%		1	%		2,857			3,256			14	%

(1)

Includes domestic and international consumer credit card businesses.

(2)

Includes owned and securitized credit card loans.

(3)

Annualized net income divided by average managed receivables.

(4)

Reflects volume subsequent to date of acquisition.

Note:

Certain reclassifications have been made to prior period amounts to conform to the current presentation.

Refer to Legal Notice page 25.

MORGAN STANLEY

Quarterly Intersegment Eliminations Income Statement Information

(unaudited, dollars in millions)

	Quarter Ended																								Percentage Change From:						Twelve Months Ended						Percentage
	Feb 28, 2005			May 31, 2005			Aug 31, 2005			Nov 30, 2005			Feb 28, 2006			May 31, 2006			Aug 31, 2006			Nov 30, 2006			4Q06 vs. 4Q05			4Q06 vs. 3Q06			Nov 30, 2005			Nov 30, 2006			Change

Investment banking ⁽¹⁾	$	(3	)	$	0		$	0		$	(1	)	$	0		$	(33	)	$	0		$	(6	)		*			*		$	(4	)	$	(39	)		*
Principal transactions:
Trading		(1	)		(1	)		(1	)		(2	)		(2	)		(3	)		(2	)		(1	)		50	%		50	%		(5	)		(8	)		(60	%)
Investments		0			0			0			0			0			0			0			0			-			-			0			0			-
Commissions		(15	)		(16	)		(12	)		(11	)		(7	)		(8	)		(7	)		(7	)		36	%		-			(54	)		(29	)		46	%
Asset management, distribution and admin. fees		(42	)		(40	)		(38	)		(51	)		(53	)		(35	)		(40	)		(40	)		22	%		-			(171	)		(168	)		2	%
Interest and dividends		(28	)		(32	)		(36	)		(43	)		(39	)		(68	)		(87	)		(90	)		(109	%)		(3	%)		(139	)		(284	)		(104	%)
Other		(9	)		(10	)		(11	)		(9	)		(10	)		(15	)		(10	)		(12	)		(33	%)		(20	%)		(39	)		(47	)		(21	%)
Total revenues		(98	)		(99	)		(98	)		(117	)		(111	)		(162	)		(146	)		(156	)		(33	%)		(7	%)		(412	)		(575	)		(40	%)
Interest expense		(28	)		(32	)		(36	)		(43	)		(52	)		(64	)		(93	)		(97	)		(126	%)		(4	%)		(139	)		(306	)		(120	%)
Net revenues		(70	)		(67	)		(62	)		(74	)		(59	)		(98	)		(53	)		(59	)		20	%		(11	%)		(273	)		(269	)		1	%

Total non-interest expenses		(94	)		(92	)		(85	)		(96	)		(78	)		(85	)		(68	)		(71	)		26	%		(4	%)		(367	)		(302	)		18	%

Income before taxes		24			25			23			22			19			(13	)		15			12			(45	%)		(20	%)		94			33			(65	%)
Provision for income taxes		9			10			8			7			7			(5	)		6			4			(43	%)		(33	%)		34			12			(65	%)
Income from continuing operations ⁽²⁾	$	15		$	15		$	15		$	15		$	12		$	(8	)	$	9		$	8			(47	%)		(11	%)	$	60		$	21			(65	%)

(1)

Included in the May 31, 2006 amount is $30m related to the sale of the Company's aircraft leasing business.

(2)

Excludes cumulative effect of accounting change.

Note:

Certain reclassifications have been made to prior period amounts to conform to the current presentation.

Refer to Legal Notice page 25.

MORGAN STANLEY

The following (page 17) presents more detailed financial information regarding the results of operations for the combined

Institutional Securities, Global Wealth Management Group and Asset Management businesses. Morgan Stanley believes that a

combined presentation is informative due to certain synergies among these businesses, as well as to facilitate comparisons of

the Company’s results with those of other companies in the financial services industry that have securities and asset

management businesses. Morgan Stanley also provides this type of presentation on a managed basis for its Discover business

(page 18) in order to provide helpful comparison to other credit card issuers.

MORGAN STANLEY

Quarterly Institutional Securities, Global Wealth Management Group and Asset Management⁽¹⁾

Combined Income Statement Information

(unaudited, dollars in millions)

	Quarter Ended																								Percentage Change From:						Twelve Months Ended						Percentage
	Feb 28, 2005			May 31, 2005			Aug 31, 2005			Nov 30, 2005			Feb 28, 2006 ⁽²⁾			May 31, 2006 ⁽²⁾			Aug 31, 2006			Nov 30, 2006			4Q06 vs. 4Q05			4Q06 vs. 3Q06			Nov 30, 2005			Nov 30, 2006⁽¹⁾			Change

Investment banking	$	824		$	814		$	992		$	1,216		$	982		$	1,165		$	1,138		$	1,503			24	%		32	%	$	3,846		$	4,788			24	%
Principal transactions:
Trading		1,847			1,795			2,151			1,577			3,082			3,568			2,826			2,270			44	%		(20	%)		7,370			11,746			59	%
Investments		153			226			103			499			314			690			202			463			(7	%)		129	%		981			1,669			70	%
Commissions		824			824			804			911			929			1,005			888			988			8	%		11	%		3,363			3,810			13	%
Asset management, distribution and administration fees		1,204			1,246			1,249			1,259			1,279			1,333			1,327			1,351			7	%		2	%		4,958			5,290			7	%
Interest and dividends		5,405			5,521			6,429			8,738			9,991			9,537			12,071			11,307			29	%		(6	%)		26,093			42,906			64	%
Other		103			119			107			130			111			118			117			189			45	%		62	%		459			535			17	%
Total revenues		10,360			10,545			11,835			14,330			16,688			17,416			18,568			18,071			26	%		(3	%)		47,070			70,744			50	%
Interest expense		4,477			5,401			5,798			8,060			9,293			9,808			11,625			10,408			29	%		(10	%)		23,736			41,135			73	%
Net revenues		5,883			5,144			6,037			6,270			7,395			7,608			6,943			7,663			22	%		10	%		23,334			29,609			27	%

Compensation and benefits		2,639			2,413			2,923			2,473			3,917			3,499			2,914			3,135			27	%		8	%		10,448			13,465			29	%
Occupancy and equipment		308			209			217			220			209			216			232			252			15	%		9	%		954			909			(5	%)
Brokerage, clearing and exchange fees		260			276			267			267			292			340			339			335			25	%		(1	%)		1,070			1,306			22	%
Information processing and communications		260			265			263			269			259			272			275			284			6	%		3	%		1,057			1,090			3	%
Marketing and business development		112			143			143			177			119			156			147			221			25	%		50	%		575			643			12	%
Professional services		315			365			425			507			370			449			456			607			20	%		33	%		1,612			1,882			17	%
Other		499			342			296			292			240			191			281			159			(46	%)		(43	%)		1,429			871			(39	%)
September 11th related insurance recoveries, net		(251	)		0			0			0			0			0			0			0			-			-			(251	)		0			*
Total non-interest expenses		4,142			4,013			4,534			4,205			5,406			5,123			4,644			4,993			19	%		8	%		16,894			20,166			19	%

Income from continuing operations before losses
from unconsolidated investees, taxes
and cumulative effect of accounting change		1,741			1,131			1,503			2,065			1,989			2,485			2,299			2,670			29	%		16	%		6,440			9,443			47	%
Losses from unconsolidated investees		73			67			105			66			68			103			1			53			(20	%)		*			311			225			(28	%)
Income before taxes		1,668			1,064			1,398			1,999			1,921			2,382			2,298			2,617			31	%		14	%		6,129			9,218			50	%
Provision for income taxes		539			297			382			300			614			857			689			609			103	%		(12	%)		1,518			2,769			82	%
Income from continuing operations ⁽³⁾	$	1,129		$	767		$	1,016		$	1,699		$	1,307		$	1,525		$	1,609		$	2,008			18	%		25	%	$	4,611		$	6,449			40	%

Return on average common equity ⁽⁴⁾		23	%		16	%		20	%		32	%		24	%		26	%		27	%		32	%								23	%		27	%
Compensation and benefits as a % of net revenues		45	%		47	%		48	%		39	%		53	%		46	%		42	%		41	%								45	%		46	%
Non-compensation expenses as a % of net revenues		26	%		31	%		27	%		28	%		20	%		21	%		25	%		24	%								28	%		23	%

Pre-tax profit margin ⁽⁵⁾		30	%		22	%		25	%		33	%		27	%		33	%		33	%		35	%								28	%		32	%


Number of employees ⁽⁶⁾		39,641			40,267			40,226			39,723			40,188			40,088			41,416			42,124			6	%		2	%

(1)	Includes the elimination of intersegment activity between Institutional Securities, Global Wealth Management Group and Asset Management.
(2)	During the third quarter of fiscal 2006, the Company elected early application of Staff Accounting Bulletin 108 that was released by the U.S. Securities and Exchange Commission. For a further discussion of these adjustments, see note 18 “Staff Accounting Bulletin No. 108” in the Company’s Form 10-Q for the quarterly period ended August 31, 2006.
(3)	Excludes gain/(loss) from discontinued operations and cumulative effect of accounting change.
(4)	Refer to page 4 for the allocation of average common equity.
(5)	Income before taxes, excluding losses from unconsolidated investees, as a % of net revenues.
(6)	Includes Institutional Securities, Global Wealth Management Group, Asset Management and Infrastructure / Company areas.
Note:	Certain reclassifications have been made to prior period amounts to conform to the current presentation.
	Refer to Legal Notice page 25.

MORGAN STANLEY

Quarterly Discover Income Statement Information

(Managed loan basis)

(unaudited, dollars in millions)

	Quarter Ended																								Percentage Change From:						Twelve Months Ended						Percentage
	Feb 28, 2005			May 31, 2005			Aug 31, 2005			Nov 30, 2005			Feb 28, 2006			May 31, 2006			Aug 31, 2006			Nov 30, 2006			4Q06 vs. 4Q05			4Q06 vs. 3Q06			Nov 30, 2005			Nov 30, 2006			Change

Merchant, cardmember and other fees	$	481		$	484		$	532		$	520		$	519		$	541		$	579		$	542			4	%		(6	%)	$	2,017		$	2,181			8	%
Servicing and securitization income		0			0			0			0			0			0			0			0			-			-			0			0			-
Other		34			(14	)		(19	)		(74	)		143			22			11			18			124	%		64	%		(73	)		194			*
Total non-interest revenues		515			470			513			446			662			563			590			560			26	%		(5	%)		1,944			2,375			22	%

Interest revenue		1,383			1,426			1,463			1,432			1,475			1,576			1,572			1,544			8	%		(2	%)		5,704			6,167			8	%
Interest expense		401			433			475			497			541			576			619			614			24	%		(1	%)		1,806			2,350			30	%
Net interest income		982			993			988			935			934			1,000			953			930			(1	%)		(2	%)		3,898			3,817			(2	%)

Provision for consumer loan losses		538			575			590			687			507			372			496			527			(23	%)		6	%		2,390			1,902	��		(20	%)
Net credit income		444			418			398			248			427			628			457			403			63	%		(12	%)		1,508			1,915			27	%

Net revenues		959			888			911			694			1,089			1,191			1,047			963			39	%		(8	%)		3,452			4,290			24	%

Compensation and benefits		215			209			242			199			244			224			235			219			10	%		(7	%)		865			922			7	%
Occupancy and equipment		24			23			22			23			23			21			23			24			4	%		4	%		92			91			(1	%)
Information processing and communications		83			85			87			98			90			96			98			103			5	%		5	%		353			387			10	%
Marketing and business development		145			155			133			154			119			142			145			198			29	%		37	%		587			604			3	%
Professional services		67			73			80			74			64			92			93			119			61	%		28	%		294			368			25	%
Other		71			80			108			81			70			75			85			101			25	%		19	%		340			331			(3	%)
Total non-interest expenses		605			625			672			629			610			650			679			764			21	%		13	%		2,531			2,703			7	%

Income before losses from
unconsolidated investees and taxes		354			263			239			65			479			541			368			199			*			(46	%)		921			1,587			72	%
Losses from unconsolidated investees		0			0			0			0			1			0			1			1			*			-			0			3			*
Income before taxes		354			263			239			65			478			541			367			198			*			(46	%)		921			1,584			72	%
Provision for income taxes		134			99			89			18			178			203			125			0			*			*			340			506			49	%
Income from continuing operations ⁽¹⁾	$	220		$	164		$	150		$	47		$	300		$	338		$	242		$	198			*			(18	%)	$	581		$	1,078			86	%

Return on average common equity ⁽²⁾		20	%		16	%		13	%		4	%		26	%		27	%		19	%		15	%								13	%		22	%
Compensation and benefits as a % of net revenues		22	%		24	%		27	%		29	%		22	%		19	%		22	%		23	%								25	%		22	%
Non-compensation expenses as a % of net revenues		41	%		47	%		47	%		62	%		34	%		36	%		42	%		57	%								48	%		42	%
Pre-tax profit margin ⁽³⁾		37	%		30	%		26	%		9	%		44	%		45	%		35	%		21	%								27	%		37	%

Number of employees		14,077			13,875			13,534			13,495			13,683			13,075			12,933			13,186			(2	%)		2	%

(1)

Excludes cumulative effect of accounting change.

(2)

Refer to page 4 for the allocation of average common equity.

(3)

Income before taxes, excluding losses from unconsolidated investees, as a % of net revenues.

Note:

Certain reclassifications have been made to prior period amounts to conform to the current presentation.

Refer to Legal Notice page 25.

MORGAN STANLEY

The following (pages 19 - 22) present a reconciliation for certain information disclosed on pages 13, 14, 15 and 18.

The data is presented on both a "managed" loan basis and as reported under generally accepted accounting principles ("owned" loan basis).

Managed loan data assume that the Company's securitized loan receivables have not been sold and presents the results of securitized loan

receivables in the same manner as the Company's owned loans. The Company operates its Discover business and analyzes its financial

performance on a managed basis. Accordingly, underwriting and servicing standards are comparable for both owned and securitized loans.

The Company believes that managed loan information is useful to investors because it provides information regarding the quality of loan

origination and credit performance of the entire managed portfolio and allows investors to understand the related credit risks inherent in owned

loans and retained interests in securitizations. In addition, investors often request information on a managed basis, which provides a more

meaningful comparison to industry competitors.

MORGAN STANLEY

Quarterly Discover Reconciliation of General Purpose Credit Card Loan Data ⁽¹⁾

(unaudited, dollars in millions)

	Quarter Ended Nov 30, 2006
																	Delinquency Rate
General Purpose Credit Card Loans:	Period End		Average		Return on Receivables			Interest Yield			Interest Spread			Net Charge-offs			30 Days			90 Days
Owned	$	23,588	$	22,539		3.53	%		10.28	%		5.18	%		3.95	%		3.22	%		1.53	%
Securitized		26,703		26,642		2.99	%		13.88	%		8.32	%		4.32	%		3.76	%		1.75	%
Managed	$	50,291	$	49,181		1.62	%		12.23	%		6.86	%		4.15	%		3.51	%		1.65	%

	Quarter Ended Aug 31, 2006
																	Delinquency Rate
General Purpose Credit Card Loans:	Period End		Average		Return on Receivables			Interest Yield			Interest Spread			Net Charge-offs			30 Days			90 Days
Owned	$	22,922	$	22,424		4.27	%		10.45	%		5.40	%		3.57	%		3.17	%		1.48	%
Securitized		26,663		26,339		3.64	%		14.02	%		8.52	%		4.01	%		3.62	%		1.68	%
Managed	$	49,585	$	48,763		1.96	%		12.38	%		7.07	%		3.81	%		3.41	%		1.59	%

	Quarter Ended May 31, 2006
																	Delinquency Rate
General Purpose Credit Card Loans:	Period End		Average		Return on Receivables			Interest Yield			Interest Spread			Net Charge-offs			30 Days			90 Days
Owned	$	21,764	$	19,664		6.83	%		11.01	%		6.41	%		3.02	%		2.97	%		1.38	%
Securitized		26,775		27,643		4.86	%		13.89	%		8.76	%		3.50	%		3.56	%		1.65	%
Managed	$	48,539	$	47,307		2.84	%		12.69	%		7.78	%		3.30	%		3.29	%		1.53	%

	Quarter Ended Feb 28, 2006
																	Delinquency Rate
General Purpose Credit Card Loans:	Period End		Average		Return on Receivables			Interest Yield			Interest Spread			Net Charge-offs			30 Days			90 Days
Owned	$	19,924	$	21,976		5.54	%		9.87	%		5.41	%		4.54	%		2.97	%		1.36	%
Securitized		27,901		25,599		4.75	%		14.08	%		9.20	%		5.51	%		3.79	%		1.79	%
Managed	$	47,825	$	47,575		2.56	%		12.13	%		7.44	%		5.06	%		3.45	%		1.61	%

(1)

The table provides a reconciliation of certain managed and owned basis statistical data (period-end and average loan balances,

return on receivables, interest yield, interest spread, net charge-off rates, and 30- and 90-day delinquency rates) for the periods indicated.

Note:

Certain reclassifications have been made to prior period amounts to conform to the current presentation.

Refer to Legal Notice page 25.

MORGAN STANLEY

Quarterly Discover Reconciliation of General Purpose Credit Card Loan Data ⁽¹⁾

(unaudited, dollars in millions)

	Quarter Ended Nov 30, 2005
																	Delinquency Rate
General Purpose Credit Card Loans:	Period End		Average		Return on Receivables			Interest Yield			Interest Spread			Net Charge-offs			30 Days			90 Days
Owned	$	22,496	$	21,934		0.86	%		9.89	%		5.53	%		5.35	%		3.69	%		1.62	%
Securitized		24,440		24,568		0.77	%		13.77	%		9.36	%		6.13	%		4.24	%		1.87	%
Managed	$	46,936	$	46,502		0.40	%		11.94	%		7.55	%		5.76	%		3.98	%		1.75	%

	Quarter Ended Aug 31, 2005
																	Delinquency Rate
General Purpose Credit Card Loans:	Period End		Average		Return on Receivables			Interest Yield			Interest Spread			Net Charge-offs			30 Days			90 Days
Owned	$	20,570	$	19,835		3.01	%		10.96	%		6.63	%		4.69	%		3.62	%		1.67	%
Securitized		26,535		26,934		2.21	%		12.83	%		8.93	%		5.43	%		4.13	%		1.90	%
Managed	$	47,105	$	46,769		1.28	%		12.04	%		7.95	%		5.12	%		3.91	%		1.80	%

	Quarter Ended May 31, 2005
																	Delinquency Rate
General Purpose Credit Card Loans:	Period End		Average		Return on Receivables			Interest Yield			Interest Spread			Net Charge-offs			30 Days			90 Days
Owned	$	19,385	$	18,753		3.48	%		10.56	%		6.47	%		4.62	%		3.48	%		1.64	%
Securitized		27,460		28,393		2.30	%		12.43	%		8.92	%		5.15	%		4.19	%		1.97	%
Managed	$	46,845	$	47,146		1.38	%		11.69	%		7.96	%		4.94	%		3.90	%		1.83	%

	Quarter Ended Feb 28, 2005
																	Delinquency Rate
General Purpose Credit Card Loans:	Period End		Average		Return on Receivables			Interest Yield			Interest Spread			Net Charge-offs			30 Days			90 Days
Owned	$	18,908	$	19,210		4.64	%		9.07	%		5.15	%		4.62	%		3.75	%		1.81	%
Securitized		28,862		29,720		3.00	%		12.63	%		9.47	%		5.43	%		4.55	%		2.20	%
Managed	$	47,770	$	48,930		1.82	%		11.23	%		7.79	%		5.11	%		4.24	%		2.05	%

(1)

The tables provide a reconciliation of certain managed and owned basis statistical data (period-end and average loan balances,

return on receivables, interest yield, interest spread, net charge-off rates, and 30- and 90-day delinquency rates) for the periods indicated.

Note:

Certain reclassifications have been made to prior period amounts to conform to the current presentation.

Refer to Legal Notice page 25.

MORGAN STANLEY

Year to Date Discover Reconciliation of General Purpose Credit Card Loan Data⁽¹⁾

(unaudited, dollars in millions)

	Twelve Months Ended Nov 30, 2006
																	Delinquency Rate
General Purpose Credit Card Loans:	Period End		Average		Return on Receivables			Interest Yield			Interest Spread			Net Charge-offs			30 Days			90 Days
Owned	$	23,588	$	21,647		4.98	%		10.39	%		5.59	%		3.79	%		3.22	%		1.53	%
Securitized		26,703		26,560		4.06	%		13.96	%		8.69	%		4.31	%		3.76	%		1.75	%
Managed	$	50,291	$	48,207		2.24	%		12.36	%		7.29	%		4.08	%		3.51	%		1.65	%

	Twelve Months Ended Nov 30, 2005
																	Delinquency Rate
General Purpose Credit Card Loans:	Period End		Average		Return on Receivables			Interest Yield			Interest Spread			Net Charge-offs			30 Days			90 Days
Owned	$	22,496	$	19,932		2.92	%		10.12	%		5.94	%		4.84	%		3.69	%		1.62	%
Securitized		24,440		27,398		2.12	%		12.88	%		9.16	%		5.52	%		4.24	%		1.87	%
Managed	$	46,936	$	47,330		1.23	%		11.72	%		7.81	%		5.23	%		3.98	%		1.75	%

(1)

The tables provide a reconciliation of certain managed and owned basis statistical data (period-end and average loan balances,

return on receivables, interest yield, interest spread, net charge-off rates, and 30- and 90-day delinquency rates) for the periods indicated.

Note:

Certain reclassifications have been made to prior period amounts to conform to the current presentation.

Refer to Legal Notice page 25.

MORGAN STANLEY

Quarterly Discover Reconciliation of Managed Income Statement Data ⁽¹⁾

(unaudited, dollars in millions)

	Quarter Ended																								Twelve Months Ended
	Feb 28, 2005			May 31, 2005			Aug 31, 2005			Nov 30, 2005			Feb 28, 2006			May 31, 2006			Aug 31, 2006			Nov 30, 2006			Nov 30, 2005			Nov 30, 2006

Merchant, cardmember and other fees:
Owned	$	308		$	318		$	357		$	340		$	289		$	277		$	312		$	289		$	1,323		$	1,167
Securitization adjustment		173			166			175			180			230			264			267			253			694			1,014
Managed	$	481		$	484		$	532		$	520		$	519		$	541		$	579		$	542		$	2,017		$	2,181

Servicing and securitizations income:
Owned	$	494		$	423		$	398		$	294		$	596		$	651		$	565		$	526		$	1,609		$	2,338
Securitization adjustment		(494	)		(423	)		(398	)		(294	)		(596	)		(651	)		(565	)		(526	)		(1,609	)		(2,338	)
Managed	$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-

Other:
Owned	$	2		$	2		$	(1	)	$	2		$	4		$	5		$	13		$	13		$	5		$	35
Securitization adjustment		32			(16	)		(18	)		(76	)		139			17			(2	)		5			(78	)		159
Managed	$	34		$	(14	)	$	(19	)	$	(74	)	$	143		$	22		$	11		$	18		$	(73	)	$	194

Interest revenue:
Owned	$	458		$	536		$	593		$	587		$	586		$	608		$	642		$	622		$	2,174		$	2,458
Securitization adjustment		925			890			870			845			889			968			930			922			3,530			3,709
Managed	$	1,383		$	1,426		$	1,463		$	1,432		$	1,475		$	1,576		$	1,572		$	1,544		$	5,704		$	6,167

Interest expense:
Owned	$	168		$	182		$	212		$	219		$	231		$	220		$	253		$	248		$	781		$	952
Securitization adjustment		233			251			263			278			310			356			366			366			1,025			1,398
Managed	$	401		$	433		$	475		$	497		$	541		$	576		$	619		$	614		$	1,806		$	2,350

Provision for consumer loan losses:
Owned	$	135		$	209		$	224		$	310		$	155		$	130		$	232		$	239		$	878		$	756
Securitization adjustment		403			366			366			377			352			242			264			288			1,512			1,146
Managed	$	538		$	575		$	590		$	687		$	507		$	372		$	496		$	527		$	2,390		$	1,902

(1)

The tables provide a reconciliation of certain managed and owned basis income statement data

(merchant, cardmember and other fees, servicing fees, other revenue, interest revenue, interest expense

and provision for consumer loan losses) for the periods indicated.

Note:

Certain reclassifications have been made to prior period amounts to conform to the current presentation.

Refer to Legal Notice page 25.

MORGAN STANLEY

The following (page 23) presents a reconciliation for adjusted assets.

Balance sheet leverage ratios are one indicator of capital adequacy when viewed in the context of a company's

overall liquidity and capital policies. The Company views the adjusted leverage ratio as a more relevant measure of

financial risk when comparing financial services firms and evaluating leverage trends. Adjusted assets exclude

certain self-funded assets considered to have minimal market, credit and/or liquidity risk that are generally

attributable to matched book and securities lending businesses as measured by aggregate resale agreements

and securities borrowed less non-derivative short positions. In addition, the adjusted leverage ratio reflects

the deduction from shareholders' equity of the amount of equity used to support goodwill and intangible assets,

as the Company does not view this amount of equity as available to support its risk capital needs.

MORGAN STANLEY

Quarterly Reconciliation of Adjusted Assets

(unaudited, dollars in millions, except ratios)

	Quarter Ended
	Feb 28, 2005			May 31, 2005			Aug 31, 2005			Nov 30, 2005			Feb 28, 2006(1)			May 31, 2006(1)			Aug 31, 2006			Nov 30, 2006

Total assets	$	802,210		$	818,711		$	837,391		$	898,523		$	959,625		$	1,027,054		$	1,028,872		$	1,123,901

Less: Securities purchased under agreements to resell		(143,462	)		(145,579	)		(143,642	)		(174,330	)		(176,260	)		(190,289	)		(171,547	)		(174,866	)
Securities borrowed		(207,985	)		(228,454	)		(227,098	)		(244,241	)		(252,896	)		(274,581	)		(283,024	)		(299,631	)
Add: Financial instruments sold, not yet purchased		119,913			131,901			137,443			147,000			149,561			159,822			152,979			183,119
Less: Derivative contracts sold, not yet purchased		(37,389	)		(39,835	)		(48,395	)		(44,952	)		(42,928	)		(48,747	)		(47,017	)		(57,491	)
Subtotal		533,287			536,744			555,699			582,000			637,102			673,259			680,263			775,032
Less: Segregated customer cash and securities balances		(26,461	)		(36,539	)		(30,912	)		(30,540	)		(27,156	)		(31,685	)		(30,917	)		(16,782	)
Assets recorded under certain provisions of SFAS No.140 and FIN 46		(57,042	)		(57,394	)		(64,066	)		(67,091	)		(78,925	)		(90,046	)		(89,649	)		(100,236	)
Goodwill and intangible assets		(2,563	)		(2,528	)		(2,531	)		(2,500	)		(2,873	)		(2,932	)		(2,943	)		(3,350	)

Adjusted assets	$	447,221		$	440,283		$	458,190		$	481,869		$	528,148		$	548,596		$	556,754		$	654,664

Common equity	$	28,495		$	28,330		$	28,226		$	29,182		$	30,103		$	32,118		$	33,072		$	34,264
Preferred equity		0			0			0			0			0			0			1,100			1,100
Shareholders' equity		28,495			28,330			28,226			29,182			30,103			32,118			34,172			35,364
Junior subordinated debt issued to capital trusts ⁽²⁾		2,833			2,894			2,881			2,764			3,783			3,784			3,784			4,884
Subtotal		31,328			31,224			31,107			31,946			33,886			35,902			37,956			40,248
Less: Goodwill and intangible assets		(2,563	)		(2,528	)		(2,531	)		(2,500	)		(2,873	)		(2,932	)		(2,943	)		(3,350	)
Tangible shareholders' equity	$	28,765		$	28,696		$	28,576		$	29,446		$	31,013		$	32,970		$	35,013		$	36,898

Leverage ratio⁽³⁾		27.9x			28.5x			29.3x			30.5x			30.9x			31.2x			29.4x			30.5x

Adjusted leverage ratio ⁽⁴⁾		15.5x			15.3x			16.0x			16.4x			17.0x			16.6x			15.9x			17.7x

(1)

(2)

The Company views the junior subordinated debt issued to capital trusts as a component of its equity capital base

given the inherent characteristics of the securities. These characteristics include the long dated nature (some have final maturity

at issuance of thirty years extendible at the Company's option by a further nineteen years, others have a 40 year final maturity at issuance),

the Company's ability to defer coupon interest for up to 20 consecutive quarters, and the subordinated nature of the obligations in the capital

structure. The Company also receives rating agency equity credit for these securities.

(3)

Leverage ratio equals total assets divided by tangible shareholders' equity.

(4)

Adjusted leverage ratio equals adjusted total assets divided by tangible shareholders' equity.

Note:

Certain reclassifications have been made to prior period amounts to conform to the current presentation.

Refer to Legal Notice page 25.

MORGAN STANLEY

This page represents an addendum to the 4Q 2006 Financial Supplement.

In accordance with SFAS 123R, fiscal 2005 compensation expense included the amortization of fiscal 2003 and fiscal 2004 awards but excluded amortization for fiscal 2005 year-end awards. Fiscal 2006

compensation expense includes the amortization related to fiscal 2003 awards, fiscal 2004 awards, fiscal 2005 awards granted to non-retirement-eligible employees, the full cost of equity awards granted

to retirement-eligible employees during fiscal 2006 (including fiscal 2005 year-end awards granted in December 2005) and the full cost of fiscal 2006 year-end equity awards to be granted to retirement-eligible

employees in December 2006.

Based on interpretative guidance related to SFAS 123R, in the first quarter of 2006 the Company has changed its accounting policy for expensing the cost of year-end equity awards that will be granted to

retirement-eligible employees. In fiscal 2006, the Company is accruing the estimated cost of these awards over the course of the current year rather than expensing the awards on the date of the grant.

Fiscal 2005 and fiscal 2006 year-end awards to non-retirement-eligible employees will be amortized over the period from the grant date to the earlier of the employee's retirement eligibility date or the vesting

date specified in the award terms.

For a further discussion of the Company's previous accounting for stock-based compensation, see the Company's Form 10-K for the fiscal year ended November 30, 2005. ;

Illustration of Standard Equity Award Amortization to Non-Retirement-Eligible and Retirement-Eligible Employees

	Non-Retirement-Eligible Employees - Fiscal Year Ended
Year of																						Cumulative Amort.
Award	Nov 30, 2003			Nov 30, 2004			Nov 30, 2005			Nov 30, 2006			Nov 30, 2007			Nov 30, 2008			Nov 30, 2009			By Grant

2003		28	%		28	%		28	%		15	%		1	%		0	%		0	%		100	%

2004					28	%		28	%		28	%		15	%		1	%		0	%		100	%

2005											40	%		40	%		18	%		2	%		100	%

2006														40	%		40	%		18	%		98	%

2007																	40	%		40	%		80	%

2008																				40	%		40	%

	Retirement-Eligible Employees - Fiscal Year Ended
Year of																						Cumulative Amort.
Award	Nov 30, 2003			Nov 30, 2004			Nov 30, 2005			Nov 30, 2006			Nov 30, 2007			Nov 30, 2008			Nov 30, 2009			By Grant

2003		28	%		28	%		28	%		15	%		1	%		0	%		0	%		100	%

2004					28	%		28	%		28	%		15	%		1	%		0	%		100	%

2005											100	%		0	%		0	%		0	%		100	%

2006											100	%		0	%		0	%		0	%		100	%

2007														100	%		0	%		0	%		100	%

2008																	100	%		0	%		100	%

2009																				100	%		100	%

Note: The actual fiscal impact depends on several factors including, but not limited to, forfeitures, award terms and modifications.

Refer to Legal Notice page 25.

MORGAN STANLEY

Legal Notice

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

The information should be read in conjunction with the Company's fourth quarter earnings press release issued December 19, 2006.

Morgan Stanley (MS) 8-KMorgan Stanley Reports Record Fourth Quarter and Record Full Year Results From Continuing Operations