Morgan Stanley 8K Reports Second Quarter 2017 | MS 19 Jul 17

Exhibit 99.2


Quarterly Financial Supplement - 2Q 2017





		Page #

	Consolidated Financial Summary	1
	Consolidated Income Statement Information	2
	Consolidated Financial Information and Statistical Data	3
	Consolidated Return on Average Common Equity and Regulatory Capital Information	4
	Consolidated Loans and Lending Commitments	5
	Institutional Securities Income Statement Information	6
	Institutional Securities Financial Information and Statistical Data	7
	Wealth Management Income Statement Information	8
	Wealth Management Financial Information and Statistical Data	9
	Investment Management Income Statement Information	10
	Investment Management Financial Information and Statistical Data	11
	U.S. Bank Supplemental Financial Information	12
	End Notes	13
	Definition of U.S. GAAP to Non-GAAP Measures and Performance Metrics	14 - 15
	Legal Notice	16


Consolidated Financial Summary
(unaudited, dollars in millions, except for per share data)


	Quarter Ended									Percentage Change From:						Six Months Ended						Percentage
	June 30, 2017			Mar 31, 2017			June 30, 2016			Mar 31, 2017			June 30, 2016			June 30, 2017			June 30, 2016			Change
Net revenues
Institutional Securities	$	4,762		$	5,152		$	4,578			(8	%)		4	%	$	9,914		$	8,292			20	%
Wealth Management		4,151			4,058			3,811			2	%		9	%		8,209			7,479			10	%
Investment Management		665			609			583			9	%		14	%		1,274			1,060			20	%
Intersegment Eliminations		(75	)		(74	)		(63	)		(1	%)		(19	%)		(149	)		(130	)		(15	%)
Net revenues	$	9,503		$	9,745		$	8,909			(2	%)		7	%	$	19,248		$	16,701			15	%

Income (loss) from continuing operations before tax
Institutional Securities	$	1,443		$	1,730		$	1,506			(17	%)		(4	%)	$	3,173		$	2,414			31	%
Wealth Management		1,057			973			859			9	%		23	%		2,030			1,645			23	%
Investment Management		142			103			118			38	%		20	%		245			162			51	%
Intersegment Eliminations		0			2			0			*			--			2			0			*
Income (loss) from continuing operations before tax	$	2,642		$	2,808		$	2,483			(6	%)		6	%	$	5,450		$	4,221			29	%

Net Income (loss) applicable to Morgan Stanley
Institutional Securities	$	992		$	1,214		$	988			(18	%)		--		$	2,206		$	1,579			40	%
Wealth Management		665			647			516			3	%		29	%		1,312			1,009			30	%
Investment Management		100			67			78			49	%		28	%		167			128			30	%
Intersegment Eliminations		0			2			0			*			--			2			0			*
Net Income (loss) applicable to Morgan Stanley	$	1,757		$	1,930		$	1,582			(9	%)		11	%	$	3,687		$	2,716			36	%
Earnings (loss) applicable to Morgan Stanley common shareholders	$	1,587		$	1,840		$	1,425			(14	%)		11	%	$	3,427		$	2,481			38	%

Financial Metrics:

Earnings per basic share	$	0.89		$	1.02		$	0.76			(13	%)		17	%	$	1.91		$	1.32			45	%
Earnings per diluted share	$	0.87		$	1.00		$	0.75			(13	%)		16	%	$	1.87		$	1.30			44	%

Return on average common equity		9.1	%		10.7	%		8.3	%								9.9	%		7.2	%
Return on average common equity excluding DVA		9.0	%		10.6	%		8.3	%								9.8	%		7.2	%

Book value per common share	$	38.22		$	37.48		$	36.29								$	38.22		$	36.29
Tangible book value per common share	$	33.24		$	32.49		$	31.39								$	33.24		$	31.39

Notes:

- Refer to End Notes, U.S. GAAP to Non-GAAP Measures, Definition of Performance Metrics and Legal Notice on pages 13 - 16.


Consolidated Income Statement Information
(unaudited, dollars in millions)

	Quarter Ended									Percentage Change From:						Six Months Ended						Percentage
	June 30, 2017			Mar 31, 2017			June 30, 2016			Mar 31, 2017			June 30, 2016			June 30, 2017			June 30, 2016			Change
Revenues:
Investment banking	$	1,530		$	1,545		$	1,224			(1	%)		25	%	$	3,075		$	2,331			32	%
Trading		2,931			3,235			2,746			(9	%)		7	%		6,166			4,811			28	%
Investments		163			165			126			(1	%)		29	%		328			92			*
Commissions and fees		1,027			1,033			1,020			(1	%)		1	%		2,060			2,075			(1	%)
Asset management, distribution and admin. fees		2,902			2,767			2,637			5	%		10	%		5,669			5,257			8	%
Other		199			229			243			(13	%)		(18	%)		428			323			33	%
Total non-interest revenues		8,752			8,974			7,996			(2	%)		9	%		17,726			14,889			19	%

Interest income		2,106			1,965			1,667			7	%		26	%		4,071			3,414			19	%
Interest expense		1,355			1,194			754			13	%		80	%		2,549			1,602			59	%
Net interest		751			771			913			(3	%)		(18	%)		1,522			1,812			(16	%)
Net revenues		9,503			9,745			8,909			(2	%)		7	%		19,248			16,701			15	%
Non-interest expenses:
Compensation and benefits		4,252			4,466			4,015			(5	%)		6	%		8,718			7,698			13	%

Non-compensation expenses:
Occupancy and equipment		333			327			329			2	%		1	%		660			658			--
Brokerage, clearing and exchange fees		525			509			484			3	%		8	%		1,034			949			9	%
Information processing and communications		433			428			429			1	%		1	%		861			871			(1	%)
Marketing and business development		155			136			154			14	%		1	%		291			288			1	%
Professional services		561			527			547			6	%		3	%		1,088			1,061			3	%
Other		602			544			468			11	%		29	%		1,146			955			20	%
Total non-compensation expenses		2,609			2,471			2,411			6	%		8	%		5,080			4,782			6	%

Total non-interest expenses		6,861			6,937			6,426			(1	%)		7	%		13,798			12,480			11	%

Income (loss) from continuing operations before taxes		2,642			2,808			2,483			(6	%)		6	%		5,450			4,221			29	%
Income tax provision / (benefit) from continuing operations ⁽¹⁾		846			815			833			4	%		2	%		1,661			1,411			18	%
Income (loss) from continuing operations		1,796			1,993			1,650			(10	%)		9	%		3,789			2,810			35	%
Gain (loss) from discontinued operations after tax		(5	)		(22	)		(4	)		77	%		(25	%)		(27	)		(7	)		*
Net income (loss)	$	1,791		$	1,971		$	1,646			(9	%)		9	%	$	3,762		$	2,803			34	%
Net income applicable to nonredeemable noncontrolling interests		34			41			64			(17	%)		(47	%)		75			87			(14	%)
Net income (loss) applicable to Morgan Stanley		1,757			1,930			1,582			(9	%)		11	%		3,687			2,716			36	%
Preferred stock dividend / Other		170			90			157			89	%		8	%		260			235			11	%
Earnings (loss) applicable to Morgan Stanley common shareholders	$	1,587		$	1,840		$	1,425			(14	%)		11	%	$	3,427		$	2,481			38	%

Pre-tax profit margin		28	%		29	%		28	%								28	%		25	%
Compensation and benefits as a % of net revenues		45	%		46	%		45	%								45	%		46	%
Non-compensation expenses as a % of net revenues		27	%		25	%		27	%								26	%		29	%
Effective tax rate from continuing operations ⁽¹⁾		32.0	%		29.0	%		33.5	%								30.5	%		33.4	%

Notes:

- Refer to End Notes, U.S. GAAP to Non-GAAP Measures, Definition of Performance Metrics and Legal Notice on pages 13 - 16.


Consolidated Financial Information and Statistical Data
(unaudited, dollars in millions)

	Quarter Ended									Percentage Change From:						Six Months Ended				Percentage
	June 30, 2017			Mar 31, 2017			June 30, 2016			Mar 31, 2017			June 30, 2016			June 30, 2017		June 30, 2016		Change

Regional revenues
Americas	$	6,746		$	7,088		$	6,538			(5	%)		3	%	$	13,834	$	12,290		13	%
EMEA (Europe, Middle East, Africa)		1,606			1,489			1,312			8	%		22	%		3,095		2,441		27	%
Asia		1,151			1,168			1,059			(1	%)		9	%		2,319		1,970		18	%
Consolidated net revenues	$	9,503		$	9,745		$	8,909			(2	%)		7	%	$	19,248	$	16,701		15	%

Firm Expense Efficiency Ratio		72	%		71	%		72	%

Balance sheet
Deposits	$	144,913		$	152,109		$	152,693			(5	%)		(5	%)
Total Assets	$	841,016		$	832,391		$	828,873			1	%		1	%
Global liquidity reserve	$	188,296		$	197,647		$	207,455			(5	%)		(9	%)
Long-term debt outstanding	$	184,112		$	172,688		$	163,492			7	%		13	%
Maturities of long-term debt outstanding (next 12 months)	$	28,823		$	23,239		$	24,244			24	%		19	%

Common equity	$	70,306		$	69,404		$	69,596			1	%		1	%
Less: Goodwill and intangible assets		(9,156	)		(9,229	)		(9,411	)		(1	%)		(3	%)
Tangible common equity	$	61,150		$	60,175		$	60,185			2	%		2	%

Preferred equity	$	8,520		$	8,520		$	7,520			--			13	%
Junior subordinated debt issued to capital trusts ⁽¹⁾	$	-		$	-		$	2,853			--			*


Period end common shares outstanding (millions)		1,840			1,852			1,918			(1	%)		(4	%)
Average common shares outstanding (millions)
Basic		1,791			1,801			1,866			(1	%)		(4	%)		1,796		1,875		(4	%)
Diluted		1,830			1,842			1,899			(1	%)		(4	%)		1,836		1,907		(4	%)

Worldwide employees		56,187			55,607			54,529			1	%		3	%

Notes:

- Refer to End Notes, U.S. GAAP to Non-GAAP Measures, Definition of Performance Metrics and Legal Notice on pages 13 - 16.


Consolidated Return on Average Common Equity and Regulatory Capital Information
(unaudited)

	Quarter Ended									Six Months Ended
	June 30, 2017			Mar 31, 2017			June 30, 2016			June 30, 2017			June 30, 2016
Average Common Equity (billions)
Institutional Securities	$	40.2		$	40.2		$	43.2		$	40.2		$	43.2
Wealth Management		17.2			17.2			15.3			17.2			15.3
Investment Management		2.4			2.4			2.8			2.4			2.8
Parent		10.1			9.2			7.7			9.7			7.3
Firm	$	69.9		$	69.0		$	69.0		$	69.5		$	68.6

Return on average Common Equity
Institutional Securities		9	%		11	%		8	%		10	%		6	%
Wealth Management		15	%		15	%		13	%		15	%		13	%
Investment Management		16	%		11	%		11	%		14	%		9	%
Firm		9	%		11	%		8	%		10	%		7	%


Regulatory Capital (millions)

Common Equity Tier 1 capital (Transitional)	$	61,459		$	60,414		$	59,796
Tier 1 capital (Transitional)	$	70,178		$	69,136		$	66,782

Standardized Approach (Transitional)
Risk-weighted assets	$	369,672		$	345,131		$	342,504
Common Equity Tier 1 capital ratio		16.6	%		17.5	%		17.5	%
Tier 1 capital ratio		19.0	%		20.0	%		19.5	%
Tier 1 leverage ratio		8.5	%		8.5	%		8.3	%

Advanced Approach (Transitional)
Risk-weighted assets	$	370,514		$	347,472		$	355,982
Common Equity Tier 1 capital ratio		16.6	%		17.4	%		16.8	%
Tier 1 capital ratio		18.9	%		19.9	%		18.8	%
Supplementary Leverage Ratio		6.5	%		6.5	%		6.3	%

Pro-forma Fully Phased-in
Pro-forma Common Equity Tier 1 capital ratio (Standardized Approach)		16.0	%		16.7	%		16.3	%
Pro-forma Common Equity Tier 1 capital ratio (Advanced Approach)		15.9	%		16.6	%		15.7	%
Pro-forma Supplementary Leverage Ratio (Advanced Approach)		6.4	%		6.4	%		6.1	%

Notes:

- Refer to End Notes, U.S. GAAP to Non-GAAP Measures, Definition of Performance Metrics and Legal Notice on pages 13 - 16.


Consolidated Loans and Lending Commitments
(unaudited, dollars in billions)


	Quarter Ended						Percentage Change From:
	June 30, 2017		Mar 31, 2017		June 30, 2016		Mar 31, 2017			June 30, 2016

Institutional Securities

Corporate loans ⁽¹⁾	$	12.5	$	14.3	$	19.9		(13	%)		(37	%)

Corporate lending commitments ⁽²⁾		82.1		83.7		83.8		(2	%)		(2	%)

Corporate Loans and Lending Commitments ⁽³⁾		94.6		98.0		103.7		(3	%)		(9	%)

Other loans		29.3		28.3		28.3		4	%		4	%

Other lending commitments		6.7		5.0		4.2		34	%		60	%

Other Loans and Lending Commitments ⁽⁴⁾		36.0		33.3		32.5		8	%		11	%

Institutional Securities Loans and Lending Commitments ⁽⁵⁾	$	130.6	$	131.3	$	136.2		(1	%)		(4	%)


Wealth Management

Loans		65.1		61.6		54.3		6	%		20	%

Lending commitments		9.1		8.7		7.0		5	%		30	%

Wealth Management Loans and Lending Commitments ⁽⁶⁾	$	74.2	$	70.3	$	61.3		6	%		21	%

Consolidated Loans and Lending Commitments ⁽⁷⁾	$	204.8	$	201.6	$	197.5		2	%		4	%

Notes:

- Refer to End Notes, U.S. GAAP to Non-GAAP Measures, Definition of Performance Metrics and Legal Notice on pages 13 - 16.


Institutional Securities
Income Statement Information
(unaudited, dollars in millions)
	Quarter Ended									Percentage Change From:						Six Months Ended						Percentage
	June 30, 2017			Mar 31, 2017			June 30, 2016⁽¹⁾			Mar 31, 2017			June 30, 2016			June 30, 2017			June 30, 2016⁽¹⁾			Change
Revenues:
Investment banking	$	1,413		$	1,417		$	1,108			--			28	%	$	2,830		$	2,098			35	%
Trading		2,725			3,012			2,498			(10	%)		9	%		5,737			4,389			31	%
Investments		37			66			76			(44	%)		(51	%)		103			108			(5	%)
Commissions and fees		630			620			607			2	%		4	%		1,250			1,262			(1	%)
Asset management, distribution and admin. fees		89			91			69			(2	%)		29	%		180			142			27	%
Other		126			173			138			(27	%)		(9	%)		299			142			111	%
Total non-interest revenues		5,020			5,379			4,496			(7	%)		12	%		10,399			8,141			28	%

Interest income		1,243			1,124			966			11	%		29	%		2,367			2,019			17	%
Interest expense		1,501			1,351			884			11	%		70	%		2,852			1,868			53	%
Net interest		(258	)		(227	)		82			(14	%)		*			(485	)		151			*
Net revenues		4,762			5,152			4,578			(8	%)		4	%		9,914			8,292			20	%

Compensation and benefits		1,667			1,870			1,625			(11	%)		3	%		3,537			3,007			18	%
Non-compensation expenses		1,652			1,552			1,447			6	%		14	%		3,204			2,871			12	%
Total non-interest expenses		3,319			3,422			3,072			(3	%)		8	%		6,741			5,878			15	%


Income (loss) from continuing operations before taxes		1,443			1,730			1,506			(17	%)		(4	%)		3,173			2,414			31	%
Income tax provision / (benefit) from continuing operations		413			459			453			(10	%)		(9	%)		872			728			20	%
Income (loss) from continuing operations		1,030			1,271			1,053			(19	%)		(2	%)		2,301			1,686			36	%
Gain (loss) from discontinued operations after tax		(5	)		(22	)		(4	)		77	%		(25	%)		(27	)		(7	)		*
Net income (loss)		1,025			1,249			1,049			(18	%)		(2	%)		2,274			1,679			35	%
Net income applicable to nonredeemable noncontrolling interests		33			35			61			(6	%)		(46	%)		68			100			(32	%)
Net income (loss) applicable to Morgan Stanley	$	992		$	1,214		$	988			(18	%)		--		$	2,206		$	1,579			40	%


Pre-tax profit margin		30	%		34	%		33	%								32	%		29	%
Compensation and benefits as a % of net revenues		35	%		36	%		35	%								36	%		36	%

Notes:

- Refer to End Notes, U.S. GAAP to Non-GAAP Measures, Definition of Performance Metrics and Legal Notice on pages 13 - 16.


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

	Quarter Ended									Percentage Change From:						Six Months Ended						Percentage
	June 30, 2017			Mar 31, 2017			June 30, 2016			Mar 31, 2017			June 30, 2016			June 30, 2017			June 30, 2016			Change
Investment Banking
Advisory revenues	$	504		$	496		$	497			2	%		1	%	$	1,000		$	1,088			(8	%)
Underwriting revenues
Equity		405			390			266			4	%		52	%		795			426			87	%
Fixed income		504			531			345			(5	%)		46	%		1,035			584			77	%
Total underwriting revenues		909			921			611			(1	%)		49	%		1,830			1,010			81	%

Total investment banking revenues	$	1,413		$	1,417		$	1,108			--			28	%	$	2,830		$	2,098			35	%

Sales & Trading
Equity	$	2,155		$	2,016		$	2,145			7	%		--		$	4,171		$	4,201			(1	%)
Fixed Income		1,239			1,714			1,297			(28	%)		(4	%)		2,953			2,170			36	%
Other		(208	)		(234	)		(186	)		11	%		(12	%)		(442	)		(427	)		(4	%)

Total sales & trading net revenues	$	3,186		$	3,496		$	3,256			(9	%)		(2	%)	$	6,682		$	5,944			12	%

Investments & Other
Investments	$	37		$	66		$	76			(44	%)		(51	%)	$	103		$	108			(5	%)
Other		126			173			138			(27	%)		(9	%)		299			142			111	%
Total investments & other revenues	$	163		$	239		$	214			(32	%)		(24	%)	$	402		$	250			61	%

Institutional Securities net revenues	$	4,762		$	5,152		$	4,578			(8	%)		4	%	$	9,914		$	8,292			20	%


Average Daily 95% / One-Day Value-at-Risk ("VaR")
Primary Market Risk Category ($ millions, pre-tax)
Interest rate and credit spread	$	35		$	30		$	32
Equity price	$	18		$	15		$	17
Foreign exchange rate	$	11		$	11		$	7
Commodity price	$	9		$	8		$	10

Aggregation of Primary Risk Categories	$	46		$	39		$	38

Credit Portfolio VaR	$	12		$	15		$	20

Trading VaR	$	51		$	44		$	46

Notes:

- Refer to End Notes, U.S. GAAP to Non-GAAP Measures, Definition of Performance Metrics and Legal Notice on pages 13 - 16.


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


	Quarter Ended									Percentage Change From:						Six Months Ended						Percentage
	June 30, 2017			Mar 31, 2017			June 30, 2016⁽¹⁾			Mar 31, 2017			June 30, 2016			June 30, 2017			June 30, 2016⁽¹⁾			Change
Revenues:
Investment banking	$	135		$	145		$	123			(7	%)		10	%	$	280		$	244			15	%
Trading		207			238			252			(13	%)		(18	%)		445			446			--
Investments		1			1			0			--			*			2			(2	)		*
Commissions and fees		424			440			423			(4	%)		--			864			835			3	%
Asset management, distribution and admin. fees		2,302			2,184			2,082			5	%		11	%		4,486			4,136			8	%
Other		73			56			102			30	%		(28	%)		129			160			(19	%)
Total non-interest revenues		3,142			3,064			2,982			3	%		5	%		6,206			5,819			7	%

Interest income		1,114			1,079			920			3	%		21	%		2,193			1,834			20	%
Interest expense		105			85			91			24	%		15	%		190			174			9	%
Net interest		1,009			994			829			2	%		22	%		2,003			1,660			21	%
Net revenues		4,151			4,058			3,811			2	%		9	%		8,209			7,479			10	%

Compensation and benefits		2,297			2,317			2,152			(1	%)		7	%		4,614			4,240			9	%
Non-compensation expenses		797			768			800			4	%		--			1,565			1,594			(2	%)
Total non-interest expenses		3,094			3,085			2,952			--			5	%		6,179			5,834			6	%

Income (loss) from continuing operations before taxes		1,057			973			859			9	%		23	%		2,030			1,645			23	%
Income tax provision / (benefit) from continuing operations		392			326			343			20	%		14	%		718			636			13	%
Income (loss) from continuing operations		665			647			516			3	%		29	%		1,312			1,009			30	%
Gain (loss) from discontinued operations after tax		0			0			0			--			--			0			0			--
Net income (loss)		665			647			516			3	%		29	%		1,312			1,009			30	%
Net income applicable to nonredeemable noncontrolling interests		-			-			-			--			--			-			-			--
Net income (loss) applicable to Morgan Stanley	$	665		$	647		$	516			3	%		29	%	$	1,312		$	1,009			30	%

Pre-tax profit margin		25	%		24	%		23	%								25	%		22	%
Compensation and benefits as a % of net revenues		55	%		57	%		56	%								56	%		57	%

Notes:

- Refer to End Notes, U.S. GAAP to Non-GAAP Measures, Definition of Performance Metrics and Legal Notice on pages 13 - 16.


Wealth Management
Financial Information and Statistical Data
(unaudited)



	Quarter Ended									Percentage Change From:
	June 30, 2017			Mar 31, 2017			June 30, 2016			Mar 31, 2017			June 30, 2016


Bank deposit program (billions)	$	139		$	149		$	150			(7	%)		(7	%)

Wealth Management Metrics

Wealth Management representatives		15,777			15,777			15,909			--			(1	%)

Annualized revenue per representative (000's)	$	1,052		$	1,029		$	959			2	%		10	%

Client assets (billions)	$	2,239		$	2,187		$	2,034			2	%		10	%
Client assets per representative (millions)	$	142		$	139		$	128			2	%		11	%
Client liabilities (billions)	$	77		$	74		$	69			4	%		12	%

Fee-based asset flows (billions)	$	19.9		$	18.8		$	12.0			6	%		66	%
Fee-based client account assets (billions)	$	962		$	927		$	820			4	%		17	%
Fee-based assets as a % of client assets		43	%		42	%		40	%

Retail locations		601			599			609			--			(1	%)

Notes:

- Refer to End Notes, U.S. GAAP to Non-GAAP Measures, Definition of Performance Metrics and Legal Notice on pages 13 - 16.


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


	Quarter Ended									Percentage Change From:						Six Months Ended						Percentage
	June 30, 2017			Mar 31, 2017			June 30, 2016			Mar 31, 2017			June 30, 2016			June 30, 2017			June 30, 2016			Change
Revenues:
Investment banking	$	-		$	-		$	-			--			--		$	-		$	1			*
Trading		(3	)		(11	)		5			73	%		*			(14	)		(5	)		(180	%)
Investments⁽¹⁾		125			98			50			28	%		150	%		223			(14	)		*
Commissions and fees		0			0			0			--			--			0			3			*
Asset management, distribution and admin. fees		539			517			517			4	%		4	%		1,056			1,043			1	%
Other		4			4			9			--			(56	%)		8			31			(74	%)
Total non-interest revenues		665			608			581			9	%		14	%		1,273			1,059			20	%

Interest income		1			1			3			--			(67	%)		2			4			(50	%)
Interest expense		1			0			1			*			--			1			3			(67	%)
Net interest		0			1			2			*			*			1			1			--
Net revenues		665			609			583			9	%		14	%		1,274			1,060			20	%

Compensation and benefits		288			279			238			3	%		21	%		567			451			26	%
Non-compensation expenses		235			227			227			4	%		4	%		462			447			3	%
Total non-interest expenses		523			506			465			3	%		12	%		1,029			898			15	%

Income (loss) from continuing operations before taxes		142			103			118			38	%		20	%		245			162			51	%
Income tax provision / (benefit) from continuing operations		41			30			37			37	%		11	%		71			47			51	%
Income (loss) from continuing operations		101			73			81			38	%		25	%		174			115			51	%
Gain (loss) from discontinued operations after tax		0			0			0			--			--			0			0			--
Net income (loss)		101			73			81			38	%		25	%		174			115			51	%
Net income applicable to nonredeemable noncontrolling interests		1			6			3			(83	%)		(67	%)		7			(13	)		*
Net income (loss) applicable to Morgan Stanley	$	100		$	67		$	78			49	%		28	%	$	167		$	128			30	%

Pre-tax profit margin		21	%		17	%		20	%								19	%		15	%
Compensation and benefits as a % of net revenues		43	%		46	%		41	%								45	%		43	%

Notes:

- Refer to End Notes, U.S. GAAP to Non-GAAP Measures, Definition of Performance Metrics and Legal Notice on pages 13 - 16.


Investment Management
Financial Information and Statistical Data
(unaudited)


	Quarter Ended									Percentage Change From:						Six Months Ended						Percentage
	June 30, 2017			Mar 31, 2017			June 30, 2016			Mar 31, 2017			June 30, 2016			June 30, 2017			June 30, 2016			Change

Assets under management or supervision (billions)

Net flows by asset class ⁽¹⁾
Equity	$	0.4		$	-		$	(1.4	)		*			*		$	0.4		$	(2.1	)		*
Fixed Income		2.0			-			(1.2	)		*			*			2.0			(2.0	)		*
Liquidity		(0.2	)		(10.0	)		2.4			98	%		*			(10.2	)		-			*
Alternative / Other products		0.3			1.8			(1.5	)		(83	%)		*			2.1			(1.2	)		*

Total net flows	$	2.5		$	(8.2	)	$	(1.7	)		*			*		$	(5.7	)	$	(5.3	)		(8	%)

Assets under management or supervision by asset class ⁽²⁾
Equity	$	94		$	87		$	81			8	%		16	%
Fixed Income		66			62			61			6	%		8	%
Liquidity		154			153			149			1	%		3	%
Alternative / Other products		121			119			115			2	%		5	%

Total Assets Under Management or Supervision	$	435		$	421		$	406			3	%		7	%
Share of minority stake assets	$	8		$	7		$	8			14	%		--

Notes:

- Refer to End Notes, U.S. GAAP to Non-GAAP Measures, Definition of Performance Metrics and Legal Notice on pages 13 - 16.


U.S. Bank Supplemental Financial Information
(unaudited, dollars in billions)




	Quarter Ended						Percentage Change From:
	June 30, 2017		Mar 31, 2017		June 30, 2016		Mar 31, 2017			June 30, 2016


U.S. Bank assets	$	175.4	$	179.4	$	175.1		(2	%)		--

U.S. Bank investment securities portfolio ⁽¹⁾	$	53.6	$	62.6	$	64.6		(14	%)		(17	%)


Wealth Management U.S. Bank Data
Securities-based lending and other loans	$	39.4	$	36.6	$	31.4		8	%		25	%
Residential real estate loans		25.7		25.0		22.7		3	%		13	%
Total Securities-based and residential loans	$	65.1	$	61.6	$	54.1		6	%		20	%


Institutional Securities U.S. Bank Data
Corporate Lending	$	6.1	$	6.1	$	8.9		--			(31	%)
Other Lending:
Corporate loans		13.9		13.1		12.3		6	%		13	%
Wholesale real estate and other loans		10.7		10.3		8.9		4	%		20	%
Total other loans	$	24.6	$	23.4	$	21.2		5	%		16	%
Total corporate and other loans	$	30.7	$	29.5	$	30.1		4	%		2	%

Notes:

- Refer to End Notes, U.S. GAAP to Non-GAAP Measures, Definition of Performance Metrics and Legal Notice on pages 13 - 16.


End Notes

Page 2:
(1)	Effective January 1, 2017, the Firm adopted new accounting guidance related to employee share-based payments, the transition impact of which was not significant. In 2017, the income tax consequences related to share-based payments are required to be recognized in Provision for income taxes in the consolidated income statement instead of additional paid-in capital. The impact of the income tax consequences may be either a benefit or a provision. Conversion of employee share-based awards to Firm shares will primarily occur in the first quarter of each year. The impact of recognizing excess tax benefits upon conversion of awards in the first quarter 2017 was a discrete tax benefit of $112 million to Provision for income taxes. Results for 2016 have not been restated pursuant to the guidance.

Page 3:
(1)	During the quarter ended September 30, 2016, Morgan Stanley redeemed all of its issued and outstanding Capital Securities pursuant to the optional redemption provisions provided in the respective governing documents.

Page 5:
(1)	For the quarters ended June 30, 2017, March 31, 2017, and June 30, 2016, the percentage of Institutional Securities corporate loans by credit rating was as follows:
	- % investment grade: 31%, 31% and 30%
	- % non-investment grade: 69%, 69% and 70%
(2)	For the quarters ended June 30, 2017, March 31, 2017, and June 30, 2016, the percentage of Institutional Securities corporate lending commitments by credit rating was as follows:
	- % investment grade: 69%, 70% and 76%
	- % non-investment grade: 31%, 30% and 24%
(3)	At June 30, 2017, March 31, 2017, and June 30, 2016, the "event-driven" portfolio of loans and lending commitments to non-investment grade borrowers were $11.6 billion, $13.9 billion and $13.0 billion, respectively.
(4)	The Institutional Securities business segment engages in other lending activity. These activities include commercial and residential mortgage lending, asset-backed lending, corporate loans purchased in the secondary market, financing extended to equities and commodities customers, and loans to municipalities.
(5)	For the quarters ended June 30, 2017, March 31, 2017, and June 30, 2016, Institutional Securities recorded a provision for credit losses of $5 million, $21 million and $17 million, respectively, related to loans. For the quarters ended June 30, 2017, March 31, 2017, and June 30, 2016, a provision (release) for credit losses of $(8) million, $3 million and $(13) million was recorded, respectively, related to lending commitments.
(6)	For the quarters ended June 30, 2017, March 31, 2017, and June 30, 2016, Wealth Management recorded a provision (release) for credit losses of $3 million, $1 million and $(1) million, respectively, related to loans. For the quarter ended June 30, 2017, a provision for credit losses of $1 million was recorded related to lending commitments. For the quarters ended March 31, 2017 and June 30, 2016, there was no material provision recorded related to lending commitments.
(7)	For the quarters ended June 30, 2017, March 31, 2017, and June 30, 2016, Investment Management reflected a loan balance of $26 million, $24 million and $5 million, respectively, which are not included in the Consolidated Loans and Lending Commitments balance.

Page 6:
(1)	Effective July 1, 2016, the Wealth Management and Institutional Securities segments entered into an agreement whereby Institutional Securities assumed management of Wealth Management's fixed income client-driven trading activities and related employees in an effort to build synergies across the businesses and more efficiently risk manage the Firm's trading activities. Institutional Securities now pays a fee to Wealth Management based on distribution activity. Periods prior to July 1, 2016 have not been recasted.

Page 8:
(1)	Effective July 1, 2016, the Wealth Management and Institutional Securities segments entered into an agreement whereby Institutional Securities assumed management of Wealth Management's fixed income client-driven trading activities and related employees in an effort to build synergies across the businesses and more efficiently risk manage the Firm's trading activities. Institutional Securities now pays a fee to Wealth Management based on distribution activity. Periods prior to July 1, 2016 have not been recasted.

Page 10:
(1)	The quarters ended June 30, 2017, March 31, 2017, and June 30, 2016 include investment gains or losses for certain funds included in the Firm's consolidated financial statements for which the limited partnership interests in these gains or losses were reported in net income (loss) applicable to noncontrolling interests.

Page 11:
(1)	Net Flows by region for the quarters ended June 30, 2017, March 31, 2017 and June 30, 2016 were:
	North America: $(3.2) billion, $(16.6) billion and $(1.7) billion
	International: $5.7 billion, $8.4 billion and $0 billion
(2)	Assets under management or supervision by region for the quarters ended June 30, 2017, March 31, 2017 and June 30, 2016 were:
	North America: $260 billion, $259 billion and $264 billion
	International: $175 billion, $162 billion and $142 billion

Page 12:
(1)	For the quarters ended June 30, 2017, March 31, 2017 and June 30, 2016, the U.S. Bank investment securities portfolio included held to maturity investment securities of $15.3 billion, $14.1 billion and $10.4 billion, respectively.


Definition of U.S. GAAP to Non-GAAP Measures

(a)	The Firm prepares its Consolidated Financial Statements using accounting principles generally accepted in the United States (U.S. GAAP). From time to time, Morgan Stanley may disclose certain "non-GAAP financial measures" in the course of its earnings releases, earnings conference calls, financial presentations and otherwise. The Securities and Exchange Commission defines a "non-GAAP financial measure" as a numerical measure of historical or future financial performance, financial positions, or cash flows that is subject to adjustments that effectively exclude, or include amounts from the most directly comparable measure calculated and presented in accordance with U.S. GAAP. Non-GAAP financial measures disclosed by Morgan Stanley are provided as additional information to investors and analysts in order to provide them with greater transparency about, or an alternative method for assessing, our financial condition, operating results, or prospective regulatory capital requirements. These measures are not in accordance with, or a substitute for U.S. GAAP, and may be different from or inconsistent with non-GAAP financial measures used by other companies. Whenever we refer to a non-GAAP financial measure, we will also generally define it or present the most directly comparable financial measure calculated and presented in accordance with U.S. GAAP, along with a reconciliation of the differences between the non-GAAP financial measure we reference and such comparable U.S. GAAP financial measure. In addition to the following notes, please also refer to the Firm's second quarter earnings release footnotes for such definitions and reconciliations.
(b)	The following are considered non-GAAP financial measures: return on average common equity metrics, return on average common equity excluding DVA metrics, tangible common equity, tangible book value per common share, pre-tax profit margin and firm expense efficiency ratio. These measures are calculated as follows:
	-	The return on average common equity equals annualized net income for the quarter or full year net income applicable to Morgan Stanley less preferred dividends as a percentage of average common equity. The return on average common equity excluding DVA is adjusted for DVA in the denominator.
	-	Tangible common equity equals common equity less goodwill and intangible assets net of allowable mortgage servicing rights deduction.
	-	Tangible book value per common share equals tangible common equity divided by period end common shares outstanding.
	-	Pre-tax profit margin percentages represent income from continuing operations before income taxes as percentages of net revenues.
	-	The Firm Expense Efficiency Ratio represents total non-interest expenses as a percentage of net revenues.
(c)	The fully phased-in Common Equity Tier 1 risk-based capital ratios and fully phased-in Supplementary Leverage Ratio are pro-forma estimates which represent non-GAAP financial measures that the Firm considers to be useful measures for evaluating compliance with new regulatory capital requirements that have not yet become effective. Supplementary leverage ratio equals fully phased-in Tier 1 capital divided by the fully phased-in total supplementary leverage exposure. For information on the calculation of regulatory capital and ratios for prior periods, please refer to Part II, Item 7 "Liquidity and Capital Resources—Regulatory Requirements" in the Firm's Annual Report on Form 10-K for the year ended December 31, 2016 and Part I, Item 2 "Liquidity and Capital Resources—Regulatory Requirements" in the Firm's 10-Q for the quarter ended March 31, 2017.


Definition of Performance Metrics

(a)	The Firm calculates earnings per share using the two-class method as described under the accounting guidance for earnings per share. For further discussion of the Firm's earnings per share calculations, see Note 15 to the consolidated financial statements in the Firm's Quarterly Report on Form 10-Q for the quarter ended March 31, 2017.
(b)	Book value per common share equals common equity divided by period end common shares outstanding.
(c)	Preferred stock dividend / Other includes allocation of earnings to Participating Restricted Stock Units (RSUs).
(d)	Firmwide regional revenues reflect the Firm's consolidated net revenues on a managed basis. Further discussion regarding the geographic methodology for net revenues is disclosed in Note 21 to the consolidated financial statements included in the Firm's Annual Report on Form 10-K for the year ended December 31, 2016 (2016 Form 10-K).
(e)	The global liquidity reserve, which is held within the bank and non-bank operating subsidiaries, is comprised of highly liquid and diversified cash and cash equivalents and unencumbered securities. Eligible unencumbered securities include U.S. government securities, U.S. agency securities, U.S. agency mortgage-backed securities, non-U.S. government securities and other highly liquid investment grade securities.
(f)	The Firm's goodwill and intangible balances utilized in the calculation of tangible common equity are net of allowable mortgage servicing rights deduction.
(g)	The Firm's capital estimation and attribution to the business segments are based on the Required Capital framework, an internal capital adequacy measure. This framework is a risk-based and leverage use-of-capital measure, which is compared with the Firm's regulatory capital to ensure that the Firm maintains an amount of going concern capital after absorbing potential losses from stress events, where applicable, at a point in time. The Firm defines the difference between its total Average Common Equity and the sum of the Average Common Equity amounts allocated to its business segments as Parent equity. The common equity estimation and attribution to the business segments is based on the Firm's fully phased-in regulatory capital requirements, including supplementary leverage, and incorporates the Firm's internal stress tests. The amount of capital allocated to the business segments is set at the beginning of the year, and will remain fixed throughout the year until the next annual reset. The Required Capital framework is expected to evolve over time in response to changes in the business and regulatory environment and to incorporate enhancements in modeling techniques. For further discussion of the framework, refer to Part II, Item 7 "Liquidity and Capital Resources—Regulatory Requirements" in Firm's Annual Report on Form 10-K for the year ended December 31, 2016 and Part I, Item 2 "Liquidity and Capital Resources—Regulatory Requirements" in Firm's Quarterly Report on Form 10-Q for the quarter ended March 31, 2017.
(h)	The Firm's binding risk-based capital ratios for regulatory purposes are the lower of the capital ratios computed under the (i) standardized approaches for calculating credit risk RWAs and market risk RWAs (the "Standardized Approach"); and (ii) applicable advanced approaches for calculating credit risk, market risk and operational risk RWAs (the "Advanced Approach"). At June 30, 2017, the binding ratio is based on the Advanced Approach transitional rules. For information on the calculation of regulatory capital and ratios for prior periods, please refer to Part II, Item 7 "Liquidity and Capital Resources—Regulatory Requirements" in the Firm's 2016 Form 10-K and Part I, Item 2 "Liquidity and Capital Resources—Regulatory Requirements" in the Firm's 10-Q for the quarter ended March 31, 2017.
(i)	Institutional Securities net income applicable to noncontrolling interests primarily represents the allocation to Mitsubishi UFJ Financial Group, Inc. of Morgan Stanley MUFG Securities Co., Ltd., which the Firm consolidates.
(j)	Institutional Securities discontinued operations primarily includes after-tax losses related to Saxon, which became a discontinued operation in 2011.
(k)	VaR represents the loss amount that one would not expect to exceed, on average, more than five times every one hundred trading days in the Firm's trading positions if the portfolio were held constant for a one-day period. Further discussion of the calculation of VaR and the limitations of the Firm's VaR methodology, is disclosed in Part II, Item 7A "Quantitative and Qualitative Disclosures about Market Risk" included in the Firm's 2016 Form 10-K.
(l)	Annualized revenue per Wealth Management representative is defined as annualized revenue divided by average representative headcount.
(m)	Client assets per Wealth Management representative represents total client assets divided by period end representative headcount.
(n)	U.S. Bank refers to the Firm's U.S. Bank operating subsidiaries Morgan Stanley Bank, N.A. and Morgan Stanley Private Bank, National Association and excludes balances between Bank subsidiaries.
(o)	Wealth Management client liabilities reflect U.S. Bank lending and broker dealer margin activity.
(p)	Wealth Management fee-based client account assets represent the amount of assets in client accounts where the basis of payment for services is a fee calculated on those assets.
(q)	Wealth Management fee-based asset flows include net new fee-based assets, net account transfers, dividends, interest, and client fees and exclude institutional cash management related activity.
(r)	Investment Management Alternative/Other asset class includes products in Fund of Funds, Real Estate, Private Equity and Credit strategies, as well as Multi-Asset portfolios.
(s)	Investment Management net flows include new commitments, investments or reinvestments, net of client redemptions, returns of capital post-fund investment period and dividends not reinvested; and excludes the impact of the transition of funds from their commitment period to the invested capital period.
(t)	The share of minority stake assets represents Investment Management's proportional share of assets managed by entities in which it owns a minority stake.
(u)	The Institutional Securities U.S. Bank other lending data includes activities related to commercial and residential mortgage lending, asset-backed lending, corporate loans purchased in the secondary market, financing extended to equities and commodities customers, and loans to municipalities.

Legal Notice

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

The information should be read in conjunction with the Firm's second quarter earnings press release issued July 19, 2017.

Morgan Stanley (MS) 8-KMorgan Stanley Reports Second Quarter 2017