Morgan Stanley 8K Results of Operations and Financial Condition | MS 20 Jan 11

Exhibit 99.2

MORGAN STANLEY

Financial Supplement - 4Q 2010

Table of Contents

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



	Quarter Ended									Percentage Change From:					Twelve Months Ended						Percentage
	Dec 31, 2010			Sept 30, 2010			Dec 31, 2009			Sept 30, 2010			Dec 31, 2009		Dec 31, 2010			Dec 31, 2009			Change
Net revenues
Institutional Securities	$	3,618		$	2,895		$	3,231			25	%	12	%	$	16,366		$	12,853		27	%
Global Wealth Management Group		3,353			3,104			3,139			8	%	7	%		12,636			9,390		35	%
Asset Management		858			802			510			7	%	68	%		2,723			1,337		104	%
Intersegment Eliminations		(22	)		(21	)		(44	)		(5	%)	50	%		(103	)		(146	)	29	%
Consolidated net revenues	$	7,807		$	6,780		$	6,836			15	%	14	%	$	31,622		$	23,434		35	%

Income (loss) from continuing operations before tax
Institutional Securities	$	437		$	241		$	461			81	%	(5	%)	$	4,338		$	1,088		*
Global Wealth Management Group		390			281			231			39	%	69	%		1,156			559		107	%
Asset Management		356			279			(37	)		28		*			723			(653	)	*
Intersegment Eliminations		0			0			(2	)		--		*			(15	)		(11	)	(36	%)
Consolidated income (loss) from continuing operations before tax	$	1,183		$	801		$	653			48	%	81	%	$	6,202		$	983		*

Income (loss) applicable to Morgan Stanley
Institutional Securities	$	533		$	99		$	418			*		28	%	$	3,747		$	1,393		169	%
Global Wealth Management Group		166			144			29			15	%	*			519			283		83	%
Asset Management		168			71			16			137	%	*			210			(388	)	*
Intersegment Eliminations		0			0			(3	)		--		*			(12	)		(8	)	(50	%)
Consolidated income (loss) applicable to Morgan Stanley	$	867		$	314		$	460			176	%	88	%	$	4,464		$	1,280		*

Notes:	-	Results include Morgan Stanley Smith Barney (MSSB) effective from May 31, 2009.
	-	Results for the quarters ended Dec 31, 2010, Sept 30, 2010 and Dec 31, 2009 include positive (negative) revenue of $(0.9) billion, $(0.7) billion and $(0.6) billion, respectively, related to the movement in Morgan Stanley's credit spreads on certain long-term debt. The twelve months ended Dec. 31, 2010 and Dec. 31, 2009 include positive (negative) revenue of $(0.9) billion and $(5.5) billion, respectively, related to the movement in Morgan Stanley's credit spreads on certain long-term debt.
	-	Income (loss) applicable to Morgan Stanley represents consolidated income (loss) from continuing operations applicable to Morgan Stanley before gain (loss) from discontinued operations.
	-	Refer to Legal Notice on page 18.

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


	Quarter Ended									Percentage Change From:				Twelve Months Ended						Percentage
	Dec 31, 2010			Sept 30, 2010			Dec 31, 2009			Sept 30, 2010		Dec 31, 2009		Dec 31, 2010			Dec 31, 2009			Change
Revenues:
Investment banking	$	1,761		$	1,221		$	1,673		44	%	5	%	$	5,122		$	5,020		2	%
Principal transactions:
Trading		854			1,441			1,173		(41	%)	(27	%)		9,406			7,722		22	%
Investments		688			820			146		(16	%)	*			1,825			(1,034	)	*
Commissions		1,311			1,068			1,247		23	%	5	%		4,947			4,233		17	%
Asset management, distribution and admin. fees		2,080			1,940			1,974		7	%	5	%		7,957			5,884		35	%
Other		861			187			62		*		*			1,501			837		79	%
Total non-interest revenues		7,555			6,677			6,275		13	%	20	%		30,758			22,662		36	%

Interest income		1,944			1,851			1,754		5	%	11	%		7,278			7,477		(3	%)
Interest expense		1,692			1,748			1,193		(3	%)	42	%		6,414			6,705		(4	%)
Net interest		252			103			561		145	%	(55	%)		864			772		12	%
Net revenues		7,807			6,780			6,836		15	%	14	%		31,622			23,434		35	%

Non-interest expenses:
Compensation and benefits		4,061			3,685			3,760		10	%	8	%		16,048			14,434		11	%

Non-compensation expenses:
Occupancy and equipment		380			399			416		(5	%)	(9	%)		1,570			1,542		2	%
Brokerage, clearing and exchange fees		380			332			390		14	%	(3	%)		1,431			1,190		20	%
Information processing and communications		442			412			421		7	%	5	%		1,665			1,372		21	%
Marketing and business development		161			134			153		20	%	5	%		582			501		16	%
Professional services		560			460			531		22	%	5	%		1,911			1,597		20	%
Other		640			557			512		15	%	25	%		2,213			1,815		22	%
Total non-compensation expenses		2,563			2,294			2,423		12	%	6	%		9,372			8,017		17	%

Total non-interest expenses		6,624			5,979			6,183		11	%	7	%		25,420			22,451		13	%

Income (loss) from continuing operations before taxes		1,183			801			653		48	%	81	%		6,202			983		*
Income tax provision / (benefit) from continuing operations		86			(23	)		40		*		115	%		739			(341	)	*
Income (loss) from continuing operations		1,097			824			613		33	%	79	%		5,463			1,324		*
Gain (loss) from discontinued operations after tax		(31	)		(183	)		157		83	%	*			239			82		191	%
Net income (loss)	$	1,066		$	641		$	770		66	%	38	%	$	5,702		$	1,406		*
Net income (loss) applicable to non-controlling interests		230			510			153		(55	%)	50	%		999			60		*
Net income (loss) applicable to Morgan Stanley		836			131			617		*		35	%		4,703			1,346		*
Preferred stock dividend / Other	$	236		$	222		$	241		6	%	(2	%)	$	1,109		$	2,253		(51	%)
Earnings (loss) applicable to Morgan Stanley common shareholders	$	600		$	(91	)	$	376		*		60	%	$	3,594		$	(907	)	*

Amounts applicable to Morgan Stanley:
Income (loss) from continuing operations		867			314			460		176	%	88	%		4,464			1,280		*
Gain (loss) from discontinued operations after tax		(31	)		(183	)		157		83	%	*			239			66		*
Net income (loss) applicable to Morgan Stanley	$	836		$	131		$	617		*		35	%	$	4,703		$	1,346		*

Pre-tax profit margin		15	%		12	%		10	%						20	%		4	%
Compensation and benefits as a % of net revenues		52	%		54	%		55	%						51	%		62	%
Non-compensation expenses as a % of net revenues		33	%		34	%		35	%						30	%		34	%

Effective tax rate from continuing operations		7.3	%		*			6.1	%						11.9	%		*

Notes:	-	Results include MSSB effective from May 31, 2009.
	-	Pre-tax profit margin is a non-GAAP financial measure that the Firm considers to be a useful measure that the Firm and investors use to assess operating performance. Percentages represent income from continuing operations before income taxes as a percentage of net revenues.
	-	For the quarter ended December 31, 2010, discontinued operations primarily included charges related to the Firm's investment in Revel Entertainment Group, LLC (Revel). For the twelve months ended December 31, 2010, discontinued operations primarily included a gain of $775 million related to a legal settlement with Discover Financial Services and a net gain of approximately $570 million related to the sale and charges related to the Firm's investment in the retail asset management business, including Van Kampen, partly offset by a loss of $1.2 billion related to a reduction in the carrying value of the Firm's investment in Revel and other related costs, including operati ng expenses.
	-	The quarter ended December 31, 2010 included a discrete tax gain of approximately $95 million associated with the repatriation of non-U.S. earnings at a cost lower than originally estimated. Excluding this discrete tax gain, the effective tax rate for the quarter would have been 15.3%. The full year ended December 31, 2010 included discrete tax gains of approximately $1.0 billion. Excluding these gains, the effective tax rate for the full year would have been 28.0%.
	-	Preferred stock dividend / Other includes allocation of earnings to Participating Restricted Stock Units (RSUs) and China Investment Corporation (CIC) equity units.
	-	Refer to Legal Notice on page 18.

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


	Quarter Ended									Twelve Months Ended
	Dec 31, 2010			Sept 30, 2010			Dec 31, 2009			Dec 31, 2010			Dec 31, 2009


Income (loss) from continuing operations		1,097			824			613			5,463			1,324
Net income (loss) from continuing operations applicable to non-controlling interest		230			510			153			999			44
Income from continuing operations applicable to Morgan Stanley		867			314			460			4,464			1,280
Less: Preferred Dividends		(221	)		(220	)		(221	)		(881	)		(2,243	)
Income from continuing operations applicable to Morgan Stanley, prior to allocation of income to CIC Equity Units and Participating Restricted Stock Units		646			94			239			3,583			(963	)

Basic EPS Adjustments:
Less: Allocation of undistributed earnings to CIC Equity Units		0			0			0			(101	)		0
Less: Allocation of earnings to Participating Restricted Stock Units		(16	)		(3	)		(11	)		(108	)		(10	)
Earnings (loss) from continuing operations applicable to Morgan Stanley common shareholders	$	630		$	91		$	228		$	3,374		$	(973	)

Gain (loss) from discontinued operations after tax		(31	)		(183	)		157			239			82
Gain (loss) from discontinued operations after tax applicable to non-controlling interests		0			0			0			0			(16	)
Gain (loss) from discontinued operations after tax applicable to Morgan Stanley		(31	)		(183	)		157			239			66
Less: Allocation of undistributed earnings to CIC Equity Units		0			0			(2	)		(12	)		0
Less: Allocation of earnings to Participating Restricted Stock Units		1			1			(7	)		(7	)		0
Earnings (loss) from discontinued operations applicable to Morgan Stanley common shareholders		(30	)		(182	)		148			220			66

Earnings (loss) applicable to Morgan Stanley common shareholders	$	600		$	(91	)	$	376		$	3,594		$	(907	)

Average basic common shares outstanding (millions)		1,437			1,377			1,297			1,362			1,185

Earnings per basic share:
Income from continuing operations	$	0.44		$	0.07		$	0.18		$	2.48		$	(0.82	)
Discontinued operations	$	(0.02	)	$	(0.14	)	$	0.11		$	0.16		$	0.05
Earnings per basic share	$	0.42		$	(0.07	)	$	0.29		$	2.64		$	(0.77	)

Earnings (loss) from continuing operations applicable to Morgan Stanley common shareholders	$	630		$	91		$	228		$	3,374		$	(973	)

Diluted EPS Adjustments:
Income impact of assumed conversions:
Preferred stock dividends (Series B - Mitsubishi)		0			0			0			0			0
Assumed conversion of CIC (1)		0			(16	)		0			75			0
Earnings (loss) from continuing operations applicable to Morgan Stanley common shareholders	$	630		$	75		$	228		$	3,449		$	(973	)

Earnings (loss) from discontinued operations applicable to Morgan Stanley common shareholders		(30	)		(182	)		148			220			66
Assumed conversion of CIC (1)		0			0			0			41			0
Earnings (loss) from discontinued operations applicable to Morgan Stanley common shareholders		(30	)		(182	)		148			261			66

Earnings (loss) applicable to common shareholders plus assumed conversions	$	600		$	(107	)	$	376		$	3,710		$	(907	)

Average diluted common shares outstanding and common stock equivalents (millions) (1)		1,448			1,443			1,297			1,411			1,185

Earnings per diluted share:
Income from continuing operations	$	0.43		$	0.05		$	0.18		$	2.44		$	(0.82	)
Discontinued operations	$	(0.02	)	$	(0.12	)	$	0.11		$	0.19		$	0.05
Earnings per diluted share	$	0.41		$	(0.07	)	$	0.29		$	2.63		$	(0.77	)

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 Note 2 to the consolidated financial statements in the Firm's Annual Report on Form 10-K for the year ended December 31, 2009.
	-	Refer to End Notes on pages 15-17 and Legal Notice on page 18.

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


	Quarter Ended									Percentage Change From:				Twelve Months Ended				Percentage
	Dec 31, 2010			Sept 30, 2010			Dec 31, 2009			Sept 30, 2010		Dec 31, 2009		Dec 31, 2010		Dec 31, 2009		Change
Morgan Stanley

Regional revenue (1)
Americas	$	5,024		$	4,777		$	5,654		5	%	(11	%)	$	21,674	$	18,909	15	%
EMEA (Europe, Middle East, Africa)		900			1,002			768		(10	%)	17	%		5,628		2,529	123	%
Asia		1,883			1,001			414		88	%	*			4,320		1,996	116	%
Consolidated net revenues	$	7,807		$	6,780		$	6,836		15	%	14	%	$	31,622	$	23,434	35	%

Worldwide employees		62,542			62,864			60,494		(1	%)	3	%
Total assets	$	807,698		$	841,372		$	771,462		(4	%)	5	%
Firmwide Deposits		63,812			61,202			62,215		4	%	3	%
Consolidated assets under management or supervision (billions):
Asset Management		279			273			266		2	%	5	%
Global Wealth Management		477			449			379		6	%	26	%
Total		756			722			645		5	%	17	%

Common equity		47,614			47,279			37,091		1	%	28	%
Preferred equity		9,597			9,597			9,597		--		--
Morgan Stanley shareholders' equity		57,211			56,876			46,688		1	%	23	%
Junior subordinated debt issued to capital trusts		4,817			4,822			10,594		--		(55	%)
Less: Goodwill and intangible assets (2)		(6,947	)		(7,091	)		(7,612	)	2	%	9	%
Tangible Morgan Stanley shareholders' equity	$	55,081		$	54,607		$	49,670		1	%	11	%
Tangible common equity	$	40,667		$	40,188		$	29,479		1	%	38	%

Leverage Ratio		14.7	x		15.4	x		15.5	x
Aggregate trading and non-trading Value-at-Risk (pre-tax) (3)	$	171		$	189		$	187

Return on average common equity
from continuing operations		5.4	%		0.9	%		2.6	%
Return on average common equity		5.2	%		*			4.3	%

Period end common shares outstanding (000's)		1,512,022			1,512,990			1,360,595		--		11	%

Book value per common share (4)	$	31.49		$	31.25		$	27.26		1	%	16	%
Tangible book value per common share	$	26.90		$	26.56		$	21.67		1	%	24	%

Notes:	-	All data presented in millions except ratios, book values and number of employees.
	-	Results include MSSB effective from May 31, 2009.
	-	The number of worldwide employees for all periods has been recast to exclude employees of the retail asset management business, including Van Kampen.
	-	Goodwill and intangible assets exclude non-controlling interests and reflect the Firm's share of MSSB's goodwill and intangible assets.
	-	Tangible common equity is a non-GAAP measure that the Firm considers to be a useful measure that the Firm and investors use to assess capital adequacy. Tangible common equity equals common equity less goodwill and intangible assets net of allowable mortgage servicing rights deduction.
	-	Leverage ratio is a non-GAAP measure that the Firm considers to be a useful measure that the Firm and investors use to assess capital adequacy. Leverage ratio equals total assets divided by tangible Morgan Stanley shareholders' equity.
	-	Book value per common share equals common equity divided by period end common shares outstanding.
	-	Tangible book value per common share is a non-GAAP measure that the Firm considers to be a useful measure that the Firm and investors use to assess capital adequacy. Tangible book value per common share equals tangible common equity divided by period end common shares outstanding.
	-	Tangible MS shareholders' equity is a non-GAAP measure that the Firm considers to be a useful measure that the Firm and investors use to assess capital adequacy.
	-	Refer to End Notes on pages 15-17 and Legal Notice on page 18.

MORGAN STANLEY

Quarterly Consolidated Financial Information and Statistical Data

(unaudited)

	Quarter Ended (Billions)
	Dec 31, 2010							Sept 30, 2010							June 30, 2010							Mar 31, 2010
	Average tier 1 capital (1)		Average common equity (1)		Return on average common equity			Average tier 1 capital (1)		Average common equity (1)		Return on average common equity			Average tier 1 capital (1)		Average common equity (1)		Return on average common equity			Average tier 1 capital (1)		Average common equity (1)		Return on average common equity
Institutional Securities	$	25.9	$	18.6		9	%	$	26.3	$	17.3		*		$	26.8	$	17.8		29	%	$	24.9	$	17.3		38	%
Global Wealth Management Group		2.9		6.8		9	%		2.5		6.6		8	%		3.0		6.8		6	%		3.0		6.9		5	%
Asset Management		2.0		2.2		29	%		2.0		2.2		12	%		1.6		2.0		*			1.9		2.2		2	%
Parent capital		22.3		19.8					22.8		18.0					20.0		13.0					18.7		11.2
Total - continuing operations		53.1		47.4		5	%		53.6		44.1		1	%		51.4		39.6		12	%		48.5		37.6		17	%
Discontinued operations		0.0		0.0					0.1		0.1					0.2		0.4					0.2		0.5
Firm	$	53.1	$	47.4		5	%	$	53.7	$	44.2		*		$	51.6	$	40.0		17	%	$	48.7	$	38.1		16	%


	Twelve Months Ended (Billions)
	Dec 31, 2010
	Average tier 1 capital (1)		Average common equity (1)		Return on average common equity
Institutional Securities	$	26.0	$	17.7		19	%
Global Wealth Management Group		2.9		6.8		7	%
Asset Management		1.9		2.1		9	%
Parent capital		20.7		15.5
Total - continuing operations		51.5		42.1		8	%
Discontinued operations		0.1		0.3
Firm	$	51.6	$	42.4		9	%

Notes:	-	Excluding the effect of the discrete tax benefits in the quarters ended December 31, 2010, June 30, 2010 and March 31, 2010, the return on average common equity for Institutional Securities would have been 7%, 22% and 30%, respectively.
	-	The Firm's estimation of 2010 quarterly segment capital is based on the Required Capital framework, an internal capital adequacy measure. Quarterly segment capital for 2009, however, has not been recast under this framework. As a result, the 2009 quarterly and full year business segment return on average common equity from continuing operations is not available.
	-	Refer to End Notes on pages 15-17 and Legal Notice on page 18.

MORGAN STANLEY

Quarterly Institutional Securities Income Statement Information

(unaudited, dollars in millions)

	Quarter Ended									Percentage Change From:				Twelve Months Ended						Percentage
	Dec 31, 2010			Sept 30, 2010			Dec 31, 2009			Sept 30, 2010		Dec 31, 2009		Dec 31, 2010			Dec 31, 2009			Change
Revenues:
Investment banking	$	1,515		$	1,008		$	1,480		50	%	2	%	$	4,295		$	4,455		(4	%)
Principal transactions:
Trading		530			1,090			826		(51	%)	(36	%)		8,154			6,591		24	%
Investments		316			387			69		(18	%)	*			809			(864	)	*
Commissions		573			504			543		14	%	6	%		2,274			2,152		6	%
Asset management, distribution and admin. fees		24			15			24		60	%	--			104			98		6	%
Other		733			70			(27	)	*		*			996			545		83	%
Total non-interest revenues		3,691			3,074			2,915		20	%	27	%		16,632			12,977		28	%

Interest income		1,584			1,538			1,462		3	%	8	%		5,877			6,373		(8	%)
Interest expense		1,657			1,717			1,146		(3	%)	45	%		6,143			6,497		(5	%)
Net interest		(73	)		(179	)		316		59	%	*			(266	)		(124	)	(115	%)
Net revenues		3,618			2,895			3,231		25	%	12	%		16,366			12,853		27	%

Compensation and benefits		1,785			1,490			1,484		20	%	20	%		7,081			7,212		(2	%)
Non-compensation expenses		1,396			1,164			1,286		20	%	9	%		4,947			4,553		9	%
Total non-interest expenses		3,181			2,654			2,770		20	%	15	%		12,028			11,765		2	%


Income (loss) from continuing operations before taxes		437			241			461		81	%	(5	%)		4,338			1,088		*
Income tax provision / (benefit) from continuing operations		(118	)		(131	)		36		10	%	*			301			(301	)	*
Income (loss) from continuing operations		555			372			425		49	%	31	%		4,037			1,389		191	%
Gain (loss) from discontinued operations after tax		(36	)		(202	)		(80	)	82	%	55	%		(1,201	)		167		*
Net income (loss)		519			170			345		*		50	%		2,836			1,556		82	%
Net income (loss) applicable to non-controlling interests		22			273			7		(92	%)	*			290			12		*
Net income (loss) applicable to Morgan Stanley	$	497		$	(103	)	$	338		*		47	%	$	2,546		$	1,544		65	%

Amounts applicable to Morgan Stanley:
Income (loss) from continuing operations		533			99			418		*		28	%		3,747			1,393		169	%
Gain (loss) from discontinued operations after tax		(36	)		(202	)		(80	)	82	%	55	%		(1,201	)		151		*
Net income (loss) applicable to Morgan Stanley	$	497		$	(103	)	$	338		*		47	%	$	2,546		$	1,544		65	%

Return on average common equity
from continuing operations		9	%		*			N/A							19	%		N/A
Pre-tax profit margin		12	%		8	%		14	%						27	%		9	%
Compensation and benefits as a % of net revenues		49	%		52	%		46	%						43	%		56	%

Notes:	-	Pre-tax profit margin is a non-GAAP financial measure that the Firm considers to be a useful measure that the Firm and investors use to assess operating performance. Percentages represent income from continuing operations before income taxes as a percentage of net revenues.
	-	For the quarter ended December 31, 2010, discontinued operations primarily included the charges related to the Firm's investment in Revel. For the twelve months ended December 31, 2010, discontinued operations primarily included a loss of $1.2 billion related to a reduction in the carrying value of the Firm's investment in Revel and other related costs, including operating expenses.
	-	The Firm's estimation of 2010 quarterly segment capital is based on the Required Capital framework, an internal capital adequacy measure. Quarterly segment capital for 2009, however, has not been recast under this framework. As a result, the 2009 quarterly and full year business segment return on average common equity from continuing operations is not available.
	-	Refer to Legal Notice on page 18.

MORGAN STANLEY

Quarterly Financial Information and Statistical Data

Institutional Securities

(unaudited, dollars in millions)

	Quarter Ended									Percentage Change From:				Twelve Months Ended						Percentage
	Dec 31, 2010			Sept 30, 2010			Dec 31, 2009			Sept 30, 2010		Dec 31, 2009		Dec 31, 2010			Dec 31, 2009			Change

Investment Banking
Advisory revenue	$	484		$	371		$	530		30	%	(9	%)	$	1,470		$	1,488		(1	%)
Underwriting revenue
Equity		661			260			627		154	%	5	%		1,454			1,695		(14	%)
Fixed income		370			377			323		(2	%)	15	%		1,371			1,272		8	%
Total underwriting revenue	$	1,031		$	637		$	950		62	%	9	%	$	2,825		$	2,967		(5	%)

Total investment banking revenue	$	1,515		$	1,008		$	1,480		50	%	2	%	$	4,295		$	4,455		(4	%)

Sales & Trading
Equity	$	1,081		$	925		$	774		17	%	40	%	$	4,840		$	3,690		31	%
Fixed income		(29	)		847			663		*		*			5,867			4,854		21	%
Other		2			(342	)		272		*		(99	%)		(441	)		173		*
Total sales & trading net revenue	$	1,054		$	1,430		$	1,709		(26	%)	(38	%)	$	10,266		$	8,717		18	%

Investments & Other
Investments	$	316		$	387		$	69		(18	%)	*		$	809		$	(864	)	*
Other		733			70			(27	)	*		*			996			545		83	%
Total investments & other revenue	$	1,049		$	457		$	42		130	%	*		$	1,805		$	(319	)	*

Total Institutional Securities net revenues	$	3,618		$	2,895		$	3,231		25	%	12	%	$	16,366		$	12,853		27	%

Average Daily 95% / One-Day Value-at-Risk ("VaR") (1)
Primary Market Risk Category ($ millions, pre-tax)
Interest rate and credit spread	$	120		$	137		$	136
Equity price	$	31		$	28		$	25
Foreign exchange rate	$	22		$	18		$	28
Commodity price	$	26		$	32		$	23

Trading VaR	$	132		$	142		$	152

Note:	-	Other revenue for the quarter ended December 31, 2010 includes a gain of $668 million on the sale of the Firm's investment in China International Capital Corporation Limited (CICC).
	-	Refer to End Notes on pages 15-17 and Legal Notice on page 18.

MORGAN STANLEY

Quarterly Financial Information and Statistical Data

Institutional Securities - Corporate Lending

(unaudited, dollars in billions)

	Quarter Ended									Percentage Change From:
	Dec 31, 2010			Sept 30, 2010			Dec 31, 2009			Sept 30, 2010		Dec 31, 2009


Corporate funded loans
Investment grade	$	3.9		$	4.6		$	6.5		(15	%)	(40	%)
Non-investment grade		6.8			6.8			9.6		--		(29	%)
Total corporate funded loans	$	10.7		$	11.4		$	16.1		(6	%)	(34	%)

Corporate lending commitments
Investment grade	$	44.5		$	47.7		$	40.7		(7	%)	9	%
Non-investment grade		13.9			12.6			7.2		10	%	93	%
Total corporate lending commitments	$	58.4		$	60.3		$	47.9		(3	%)	22	%

Corporate funded loans plus lending commitments
Investment grade	$	48.4		$	52.3		$	47.2		(7	%)	3	%
Non-investment grade	$	20.7		$	19.4		$	16.8		7	%	23	%

% investment grade		70	%		73	%		74	%
% non-investment grade		30	%		27	%		26	%

Total corporate funded loans and lending commitments	$	69.1		$	71.7		$	64.0		(4	%)	8	%
Hedges	$	21.0		$	21.3		$	25.8		(1	%)	(19	%)

Notes:	-	In connection with certain of its Institutional Securities business activities, the Firm provides loans or lending commitments to select clients related to its leveraged acquisition finance or relationship lending activities. For a further discussion of this activity, see the Firm's Annual Report on Form 10-K for the year ended December 31, 2009.
	-	For the quarters ended Dec 31, 2010, Sept 30, 2010 and Dec 31, 2009, the leveraged acquisition finance portfolio of pipeline commitments and closed deals to non-investment grade borrowers were $4.9 billion, $4.0 billion and $3.7 billion, respectively.
	-	The hedge balance reflects the notional amount utilized by the lending business.
	-	Refer to Legal Notice on page 18.

MORGAN STANLEY

Quarterly Global Wealth Management Group Income Statement Information

(unaudited, dollars in millions)

	Quarter Ended									Percentage Change From:				Twelve Months Ended						Percentage
	Dec 31, 2010			Sept 30, 2010			Dec 31, 2009			Sept 30, 2010		Dec 31, 2009		Dec 31, 2010			Dec 31, 2009			Change
Revenues:
Investment banking	$	242		$	211		$	202		15	%	20	%	$	827		$	596		39	%
Principal transactions:
Trading		329			386			313		(15	%)	5	%		1,306			1,208		8	%
Investments		8			5			6		60	%	33	%		19			3		*
Commissions		738			564			707		31	%	4	%		2,676			2,090		28	%
Asset management, distribution and admin. fees		1,620			1,529			1,682		6	%	(4	%)		6,349			4,583		39	%
Other		75			107			83		(30	%)	(10	%)		337			249		35	%
Total non-interest revenues		3,012			2,802			2,993		7	%	1	%		11,514			8,729		32	%

Interest income		457			404			296		13	%	54	%		1,587			1,114		42	%
Interest expense		116			102			150		14	%	(23	%)		465			453		3	%
Net interest		341			302			146		13	%	134	%		1,122			661		70	%
Net revenues		3,353			3,104			3,139		8	%	7	%		12,636			9,390		35	%

Compensation and benefits		1,995			1,910			1,965		4	%	2	%		7,843			6,114		28	%
Non-compensation expenses		968			913			943		6	%	3	%		3,637			2,717		34	%
Total non-interest expenses		2,963			2,823			2,908		5	%	2	%		11,480			8,831		30	%

Income (loss) from continuing operations before taxes		390			281			231		39	%	69	%		1,156			559		107	%
Income tax provision / (benefit) from continuing operations		118			93			69		27	%	71	%		336			178		89	%
Income (loss) from continuing operations		272			188			162		45	%	68	%		820			381		115	%
Gain (loss) from discontinued operations after tax		0			0			0		--		--			0			0		--
Net income (loss)		272			188			162		45	%	68	%		820			381		115	%
Net income (loss) applicable to non-controlling interests		106			44			133		141	%	(20	%)		301			98		*
Net income (loss) applicable to Morgan Stanley	$	166		$	144		$	29		15	%	*		$	519		$	283		83	%

Amounts applicable to Morgan Stanley:
Income (loss) from continuing operations		166			144			29		15	%	*			519			283		83	%
Gain (loss) from discontinued operations after tax		0			0			0		--		--			0			0		--
Net income (loss) applicable to Morgan Stanley	$	166		$	144		$	29		15	%	*		$	519		$	283		83	%

Return on average common equity
from continuing operations		9	%		8	%		N/A							7	%		N/A
Pre-tax profit margin		12	%		9	%		7	%						9	%		6	%
Compensation and benefits as a % of net revenues		59	%		62	%		63	%						62	%		65	%

Notes:	-	Results include MSSB effective from May 31, 2009.
	-	The tax provision / (benefit) for all periods includes the Firm's interest in MSSB.
	-	Net income (loss) applicable to non-controlling interests reflects the 49% allocation of MSSB's pre-tax results to Citigroup.
	-	Pre-tax profit margin is a non-GAAP financial measure that the Firm considers to be a useful measure that the Firm and investors use to assess operating performance. Percentages represent income from continuing operations before income taxes as a percentage of net revenues.
	-	The Firm's estimation of 2010 quarterly segment capital is based on the Required Capital framework, an internal capital adequacy measure. Quarterly segment capital for 2009, however, has not been recast under this framework. As a result, the 2009 quarterly and full year business segment return on average common equity from continuing operations is not available.
	-	Refer to Legal Notice on page 18.

MORGAN STANLEY

Quarterly Financial Information and Statistical Data

Global Wealth Management Group

(unaudited)

		Quarter Ended									Percentage Change From:
		Dec 31, 2010			Sept 30, 2010			Dec 31, 2009			Sept 30, 2010		Dec 31, 2009


Global representatives			18,043			18,119			18,135		--		(1	%)

Annualized revenue per global
	representative (000's)	$	742		$	686		$	692		8	%	7	%

Assets by client segment (billions)
	$10m or more		522			485			453		8	%	15	%
	$1m - $10m		707			678			637		4	%	11	%
Subtotal - > $1m			1,229			1,163			1,090		6	%	13	%
	$100k - $1m		399			397			418		1	%	(5	%)
	< $100k		41			43			52		(5	%)	(21	%)
Total client assets (billions)		$	1,669		$	1,603		$	1,560		4	%	7	%

% of assets by client segment > $1m			74	%		73	%		70	%

Fee-based client account assets (billions)		$	470		$	437		$	379		8	%	24	%
Fee-based assets as a % of client assets			28	%		27	%		24	%


Bank deposit program (millions)		$	113,325		$	108,701		$	112,490		4	%	1	%

Client assets per global
	representative (millions)	$	93		$	88		$	86		6	%	8	%

Global retail net new assets (billions)
	Domestic	$	11.5		$	2.4		$	(6.8	)	*		*
	International	$	2.6		$	2.6			N/A		--		*
Total retail net new assets (1)		$	14.1		$	5.0		$	(6.8	)	181	%	*

Global fee based asset flows (billions)		$	12.5		$	4.8		$	5.1		160	%	145	%

Global retail locations (1)			851			867			895		(2	%)	(5	%)

Notes:	-	Results include MSSB effective from May 31, 2009.
	-	Annualized revenue per global representative is defined as annualized revenue divided by average global representative headcount.
	-	Fee-based client account assets represents the amount of assets in client accounts where the basis of payment for services is a fee calculated on those assets.
	-	For the quarters ended Dec 31, 2010, Sept 30, 2010 and Dec 31, 2009, approximately $55 billion, $52 billion, and $54 billion, respectively, of the assets in the bank deposit program are attributable to Morgan Stanley.
	-	Global fee-based asset flows represents the net asset flows, excluding interest and dividends, in client accounts where the basis of payment for services is a fee calculated on those assets.
	-	Client assets per global representative represents total client assets divided by period end global representative headcount.
	-	Refer to End Notes on pages 15-17 and Legal Notice on page 18.

MORGAN STANLEY

Quarterly Asset Management Income Statement Information

(unaudited, dollars in millions)

	Quarter Ended									Percentage Change From:						Twelve Months Ended						Percentage
	Dec 31, 2010			Sept 30, 2010			Dec 31, 2009			Sept 30, 2010			Dec 31, 2009			Dec 31, 2010			Dec 31, 2009			Change
Revenues:
Investment banking	$	11		$	2		$	2			*			*		$	20		$	10			100	%
Principal transactions:
Trading		(4	)		(34	)		41			88	%		*			(49	)		(68	)		28	%
Investments (1)		364			427			71			(15	%)		*			996			(173	)		*
Commissions		0			0			0			--			--			0			0			--
Asset management, distribution and admin. fees		456			415			411			10	%		11	%		1,668			1,605			4	%
Other		46			12			8			*			*			164			46			*
Total non-interest revenues		873			822			533			6	%		64	%		2,799			1,420			97	%

Interest income		4			9			1			(56	%)		*			22			17			29	%
Interest expense		19			29			24			(34	%)		(21	%)		98			100			(2	%)
Net interest		(15	)		(20	)		(23	)		25	%		35	%		(76	)		(83	)		8	%
Net revenues		858			802			510			7	%		68	%		2,723			1,337			104	%

Compensation and benefits		281			285			310			(1	%)		(9	%)		1,123			1,104			2	%
Non-compensation expenses		221			238			237			(7	%)		(7	%)		877			886			(1	%)
Total non-interest expenses		502			523			547			(4	%)		(8	%)		2,000			1,990			1	%

Income (loss) from continuing operations before taxes		356			279			(37	)		28	%		*			723			(653	)		*
Income tax provision / (benefit) from continuing operations		86			15			(66	)		*			*			105			(215	)		*
Income (loss) from continuing operations		270			264			29			2	%		*			618			(438	)		*
Gain (loss) from discontinued operations after tax		5			19			229			(74	%)		(98	%)		659			(99	)		*
Net income (loss)		275			283			258			(3	%)		7	%		1,277			(537	)		*
Net income (loss) applicable to non-controlling interests (1)		102			193			13			(47	%)		*			408			(50	)		*
Net income (loss) applicable to Morgan Stanley	$	173		$	90		$	245			92	%		(29	%)	$	869		$	(487	)		*

Amounts applicable to Morgan Stanley:
Income (loss) from continuing operations		168			71			16			137	%		*			210			(388	)		*
Gain (loss) from discontinued operations after tax		5			19			229			(74	%)		(98	%)		659			(99	)		*
Net income (loss) applicable to Morgan Stanley	$	173		$	90		$	245			92	%		(29	%)	$	869		$	(487	)		*

Return on average common equity
from continuing operations		29	%		12	%		N/A									9	%		N/A
Pre-tax profit margin		41	%		35	%		*									27	%		*
Compensation and benefits as a % of net revenues		33	%		36	%		61	%								41	%		83	%

Notes:	-	For the twelve months ended December 31, 2010, the gain (loss) from discontinued operations primarily included the operating results and gain on sale of substantially all of the retail asset management business, including Van Kampen.
	-	Pre-tax profit margin is a non-GAAP financial measure that the Firm considers to be a useful measure that the Firm and investors use to assess operating performance. Percentages represent income from continuing operations before income taxes as a percentage of net revenues.
	-	The Firm's estimation of 2010 quarterly segment capital is based on the Required Capital framework, an internal capital adequacy measure. Quarterly segment capital for 2009, however, has not been recast under this framework. As a result, the 2009 quarterly and full year business segment return on average common equity from continuing operations is not available.
	-	Refer to End Notes on pages 15-17 and Legal Notice on page 18.

MORGAN STANLEY

Quarterly Financial Information and Statistical Data

Asset Management

(unaudited, dollars in billions)

	Quarter Ended									Percentage Change From:				Twelve Months Ended						Percentage
	Dec 31, 2010			Sept 30, 2010			Dec 31, 2009			Sept 30, 2010		Dec 31, 2009		Dec 31, 2010			Dec 31, 2009			Change
Assets under management or supervision

Net flows by asset class
Core Asset Management
Equity	$	(0.1	)	$	0.9		$	(0.7	)	*		86	%	$	(1.3	)	$	(7.7	)	83	%
Fixed income - Long Term		(0.6	)		(0.3	)		1.4		(100	%)	*			0.6			(6.5	)	*
Money Market		1.3			1.5			7.3		(13	%)	(82	%)		(5.5	)		(21.6	)	75	%
Alternatives		(1.0	)		(0.5	)		1.3		(100	%)	*			(1.7	)		(3.5	)	51	%
Total Core Asset Management		(0.4	)		1.6			9.3		*		*			(7.9	)		(39.3	)	80	%

Merchant Banking
Private Equity		0.0			0.1			0.8		*		*			0.5			0.4		25	%
Infrastructure		0.0			0.0			0.0		--		--			0.0			0.0		--
Real Estate		(0.2	)		1.2			0.2		*		*			1.7			(2.2	)	*
Total Merchant Banking		(0.2	)		1.3			1.0		*		*			2.2			(1.8	)	*
Total net flows	$	(0.6	)	$	2.9		$	10.3		*		*		$	(5.7	)	$	(41.1	)	86	%

Assets under management or supervision by asset class
Core Asset Management
Equity	$	92		$	86		$	81		7	%	14	%
Fixed income - Long Term		59			61			54		(3	%)	9	%
Money Market		53			52			59		2	%	(10	%)
Alternatives		43			43			42		--		2	%
Total Core Asset Management		247			242			236		2	%	5	%

Merchant Banking
Private Equity		5			5			4		--		25	%
Infrastructure		4			4			4		--		--
Real Estate		16			15			15		7	%	7	%
Total Merchant Banking		25			24			23		4	%	9	%
Total Assets Under Management or Supervision	$	272		$	266		$	259		2	%	5	%
Share of minority stake assets		7			7			7		--		--
Total	$	279		$	273		$	266		2	%	5	%

Notes:	-	Data excludes substantially all of the retail asset management business, including Van Kampen.
	-	Alternatives include a range of alternative investment products such as hedge funds, funds of hedge funds and funds of private equity funds.
	-	Net Flows by region [inflow / (outflow)] for the quarters ended Dec 31, 2010, Sept 30, 2010 and Dec 31, 2009 are:
		U.S.: $(1.8) billion, $(0.5) billion and $6.7 billion
		Non-U.S.: $1.2 billion, $3.4 billion and $3.6 billion
	-	Assets under management or supervision by region for the quarters ended Dec 31, 2010, Sept 30, 2010 and Dec 31, 2009 are:
		U.S.: $178 billion, $174 billion and $176 billion
		Non-U.S.: $94 billion, $92 billion and $83 billion
	-	The share of minority stake assets represents Asset Management's proportional share of assets managed by entities in which it owns a minority stake.
	-	Refer to Legal Notice on page 18.

This page represents an addendum to the 4Q 2010 Financial Supplement, Appendix I

MORGAN STANLEY

Earnings Per Share Calculation Under Two-Class Method

Three Months Ended Dec 31, 2010

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

	Allocation of net income from continuing operations
	(A)	(B)	(C)	(D)	(E)	(F)	(H)
						(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	1,437	97%		$72	$558	$630(6)	$0.44
Participating Restricted Stock Units (1)	39	3%		$2	$14	$16(7)	N/A
	1,476	100%	$646	$74	$572	$646


	Allocation of gain (loss) from discontinued operations
	(A)	(B)	(C)	(D)	(E)	(F)	(H)
						(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	1,437	97%		$0	($30)	($30)(6)	($0.02)
Participating Restricted Stock Units (1)	39	3%		$0	($1)	($1)(7)	N/A
	1,476	100%	($31)	$0	($31)	($31)


	Allocation of net income applicable to common shareholders
	(A)	(B)	(C)	(D)	(E)	(F)	(H)
						(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	1,437	97%		$72	$528	$600(6)	$0.42
Participating Restricted Stock Units (1)	39	3%		$2	$13	$15(7)	N/A
	1,476	100%	$615	$74	$541	$615

Note:

Refer to End Notes on pages 15-17 and Legal Notice on page 18.

This page represents an addendum to the 4Q 2010 Financial Supplement, Appendix II

MORGAN STANLEY

Earnings Per Share Calculation Under Two-Class Method

Twelve Months Ended Dec 31, 2010

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

	Allocation of net income from continuing operations
	(A)	(B)	(C)	(D)	(E)	(F)	(G)	(H)
							(D)+(E)+(F)	(G)/(A)
	Weighted Average # of Shares	% Allocation (3)	Net income from continuing operations applicable to Morgan Stanley (4)	Distributed Earnings (5)	Undistributed Earnings Not in Excess of Reference Dividend (6)	Undistributed Earnings in Excess of Reference Dividend (6)	Total Earnings Allocated	Basic EPS (10)
Basic Common Shares	1,362	92%		$270	$1,201	$1,903	$3,374(7)	$2.48
Participating Restricted Stock Units (1)	43	3%		$9	$38	$61	$108(8)	N/A
CIC Equity Units (2)	72	5%		$0	$0	$101	$101(9)	N/A
	1,477	100%	$3,583	$279	$1,239	$2,065	$3,583


	Allocation of gain (loss) from discontinued operations
	(A)	(B)	(C)	(D)	(E)	(F)	(G)	(H)
							(D)+(E)+(F)	(G)/(A)
	Weighted Average # of Shares	% Allocation (3)	Gain (loss) from Discontinued Operations Applicable to Common Shareholders, after Tax (4)	Distributed Earnings (5)	Undistributed Earnings Not in Excess of Reference Dividend (6)	Undistributed Earnings in Excess of Reference Dividend (6)	Total Earnings Allocated	Basic EPS (10)
Basic Common Shares	1,362	92%		$0	$0	$220	$220(7)	$0.16
Participating Restricted Stock Units (1)	43	3%		$0	$0	$7	$7(8)	N/A
CIC Equity Units (2)	72	5%		$0	$0	$12	$12(9)	N/A
	1,477	100%	$239	$0	$0	$239	$239


	Allocation of net income available to common shareholders
	(A)	(B)	(C)	(D)	(E)	(F)	(G)	(H)
							(D)+(E)+(F)	(G)/(A)
	Weighted Average # of Shares	% Allocation (3)	Net income applicable to Morgan Stanley (4)	Distributed Earnings (5)	Undistributed Earnings Not in Excess of Reference Dividend (6)	Undistributed Earnings in Excess of Reference Dividend (6)	Total Earnings Allocated	Basic EPS (10)
Basic Common Shares	1,362	92%		$270	$1,201	$2,123	$3,594(7)	$2.64
Participating Restricted Stock Units (1)	43	3%		$9	$38	$68	$115(8)	N/A
CIC Equity Units (2)	72	5%		$0	$0	$113	$113(9)	N/A
	1,477	100%	$3,822	$279	$1,239	$2,304	$3,822

Note:

Refer to End Notes on pages 15-17 and Legal Notice on page 18.

MORGAN STANLEY

End Notes

Page 3:
(1)	On August 17, 2010, approximately 116 million shares were issued to CIC in settlement of the CIC Equity Units. The shares issued in settlement of the CIC Equity Units are included in basic and diluted shares outstanding for the quarter ended December 31, 2010. Prior to the quarter ended June 30, 2010, Morgan Stanley included the CIC Equity Units in diluted EPS using the more dilutive of the two-class method or treasury stock method. Beginning in the quarter ended June 30, 2010 and through the issuance date, Morgan Stanley included the CIC Equity Units in diluted EPS on a weighted average basis using the more dilutive of the two-class method or the if-converted method.

Page 4:
(1)	Reflects the regional view of the Firm's consolidated net revenues, on a managed basis, based on the following methodology: Institutional Securities: investment banking - client location, equity capital markets - client location, debt capital markets - revenue recording location, sales & trading - trading desk location. Global Wealth Management: financial advisor location. Asset Management: client location except for the merchant banking business which is based on asset location. All periods exclude net revenues related to sub stantially all of the retail asset management business, including Van Kampen.
(2)	Goodwill and intangible balances net of allowable mortgage servicing rights deduction for quarters ended Dec 31, 2010, Sept 30, 2010 and Dec 31, 2009 of $141 million, $125 million and $123 million, respectively.
(3)	Represents average daily 95% / one-day value-at-risk ("VaR"). Includes non-trading VaR for the quarters ended Dec 31, 2010, Sept 30, 2010 and Dec 31, 2009 of $95 million, $103 million and $72 million, respectively. Counterparty portfolio VaR which reflects adjustments, net of hedges, related to counterparty credit risk and other market risks is included in trading VaR for all periods. See page 7 for total trading VaR. For further discussion of the calculation of VaR and the limitations of the Firm's VaR methodology, see Part II, Item 7A "Quantitative and Qualitative Disclosures about Market Risk" in the Firm's Annual Report on Form 10-K for the year ended December 31, 2009.
(4)	For the quarter ended September 30, 2010, book value per share included a benefit of $1.40 due to the mandatory conversion of $5.6 billion of CIC equity units into 116 million shares of common stock in August 2010.

Page 5:
(1)	The Firm’s capital management approach includes an estimation of an amount of capital the Firm and its businesses require over a wide range of market environments. Beginning with the quarter ended June 30, 2010, the Firm's capital estimation is based on the Required Capital framework, an internal capital adequacy measure. Tier 1 capital and common equity are designated to segments based on the capital usage calculated by the Required Capital framework which considers a combination of a base amount of capital and a n amount of economic capital reserved to absorb extreme stress events. The Firm defines parent capital as capital not specifically designated to a particular business segment. The Firm generally holds parent capital for prospective regulatory requirements, organic growth, acquisitions and other capital needs. The Firm's Required Capital is met by regulatory Tier 1 capital. The framework will evolve over time in response to changes in the business and regulatory environment and to incorporate enhancements in modeling techniques.

Page 7:
(1)	Represents the loss amount that one would not expect to exceed, on average, more than five times every one hundred trading days in the Firm's trading positions if the portfolio were held constant for a one-day period. Trading VaR for all periods includes counterparty portfolio VaR which reflects adjustments, net of hedges, related to counterparty credit risk and other market risks. For further discussion of the calculation of VaR and the limitations of the Firm's VaR methodology, see Part II, Item 7A "Quantitative and Qualitative Disclosures about Market Risk" in the Firm's Annual Report on Form 10-K for the year ended December 31, 2009.

MORGAN STANLEY

End Notes

Page 10:
(1)	Beginning in 2010, the retail net new assets and retail locations metrics have been expanded to include the non-U.S. businesses. The quarter ended Dec 31, 2010 includes $2.6 billion of net new money inflows and 29 retail locations, respectively related to non-U.S. businesses. The quarter ended Sept 30, 2010 includes $2.6 billion of net new money inflows and 29 retail locations, respectively related to non-U.S. businesses. Certain legacy Smith Barney middle market activities, which are primarily institutional client focused, are required under the MSSB joint venture agreement to be transitioned from Citigroup to Morgan Stanley. As this transition progresses, commencing with the quarter ended June 30, 2010, these legacy activities have been excluded from the retail net new assets metrics. The quarter ended December 31, 2009 has been recast to exclude $2.1 billion of these legacy net new money inflows.

Page 11:
(1)	The quarter and twelve months ended Dec 31, 2010 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 non-controlling interests.

Page 13:
(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, respectively, for the quarter ended Dec 31, 2010 prior to allocations to participating RSUs and CIC Equity Units.
(4)	Distributed earnings represent the dividends declared on common shares and participating RSUs, respectively, for the quarter ended Dec 31, 2010. The amount of dividends declared is based upon the number of common shares outstanding as of the dividend record date. During the quarter ended Dec 31, 2010, a $0.05 dividend was declared on common shares outstanding and participating RSUs.
(5)	The two-class method assumes all of the earnings for the reporting period are distributed and allocates to the participating RSUs what they would be entitled to based on the 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

End Notes

Page 14:
(1)	Unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and are included in the computation of EPS pursuant to the two-class method. Restricted Stock Units ("RSUs") that pay dividend equivalents subject to vesting are not deemed participating securities and are included in diluted shares outstanding (if dilutive) under the treasury stock method.
(2)	For further information on the CIC Equity Units, see Note 13 to the consolidated financial statements in the Firm's Annual Report on Form 10-K for the year ended December 31, 2009.
(3)	The percentage of weighted basic common shares, participating RSUs and weighted CIC Equity Units to the total weighted average of basic common shares, participating RSUs and CIC Equity Units.
(4)	Represents net income from continuing operations, gain (loss) from discontinued operations (after tax), and net income applicable to Morgan Stanley, respectively, for the year ended Dec 31, 2010 prior to allocations to participating RSUs and CIC Equity Units.
(5)	Distributed earnings represent the dividends declared on common shares and participating RSUs, respectively, for the year ended Dec 31, 2010. Under the terms of the securities purchase agreement for the sale of Equity Units to CIC, if a quarterly dividend is declared above $0.27 (the "reference dividend"), the CIC Equity Units participate via an increase in the number of shares the Firm will be required to deliver upon settlement of the contract. No cash dividends were paid to the CIC Equity Units prior to settlement of the contract. Therefore, no distributed earnings were allocated to the CIC Equity Units in the calculation of earnings per share under the two-class method.
(6)	The two-class method assumes all of the earnings for the reporting period are distributed and allocates to the participating RSUs and CIC Equity Units what they would be entitled to based on the contractual rights and obligations of the participating security. With respect to the CIC Equity Units, the amount allocated is representative of the value of the increase in the number of shares that the Firm would be required to deliver upon settlement of the contract. No actual cash dividends will be paid to the CIC Equity Units. Assumi ng the reference dividend of $0.27 per quarter has been paid to the basic common shareholders, CIC Equity Units would receive a pro-rata allocation of the remaining undistributed earnings.
(7)	Total income applicable to common shareholders to be allocated to the common shares in calculating basic and diluted EPS for common shares.
(8)	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.
(9)	Total income applicable to common shareholders to be allocated to the CIC Equity Units reflected as a deduction to the numerator in determining basic EPS for common shares.
(10)	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 fourth quarter earnings press release issued January 20, 2011.

Morgan Stanley (MS) 8-KResults of Operations and Financial Condition