EXHIBIT 12
Morgan Stanley
Ratio of Earnings to Fixed Charges
and Ratio of Earnings to Fixed Charges and Preferred Stock Dividends
(dollars in millions)
| Three Months Ended | Fiscal Year | ||||||||||||||||||||
| February 29, 2004 | February 28, 2003(2) | 2003 | 2002 | 2001 | 2000 | 1999 | |||||||||||||||
Ratio of Earnings to Fixed Charges | |||||||||||||||||||||
Earnings: | |||||||||||||||||||||
Income before income taxes(1) | $ | 1,916 | $ | 1,611 | $ | 5,767 | $ | 4,720 | $ | 5,684 | $ | 8,554 | $ | 7,756 | |||||||
Add: Fixed charges, net | 3,532 | 2,729 | 12,966 | 12,136 | 20,891 | 18,306 | 12,598 | ||||||||||||||
Income before income taxes and fixed charges, net | $ | 5,448 | $ | 4,340 | $ | 18,733 | $ | 16,856 | $ | 26,575 | $ | 26,860 | $ | 20,354 | |||||||
Fixed Charges: | |||||||||||||||||||||
Total interest expense | $ | 3,489 | $ | 2,688 | $ | 12,809 | $ | 11,970 | $ | 20,755 | $ | 18,155 | $ | 12,487 | |||||||
Interest factor in rents | 43 | 41 | 156 | 165 | 162 | 154 | 111 | ||||||||||||||
Dividends on preferred securities subject to mandatory redemption | 45 | 22 | 154 | 87 | 50 | 28 | 28 | ||||||||||||||
Total fixed charges | $ | 3,577 | $ | 2,751 | $ | 13,119 | $ | 12,222 | $ | 20,967 | $ | 18,337 | $ | 12,626 | |||||||
Ratio of earnings to fixed charges | 1.5 | 1.6 | 1.4 | 1.4 | 1.3 | 1.5 | 1.6 | ||||||||||||||
Ratio of Earnings to Fixed Charges and Preferred Stock Dividends | |||||||||||||||||||||
Earnings: | |||||||||||||||||||||
Income before income taxes(1) | $ | 1,916 | $ | 1,611 | $ | 5,767 | $ | 4,720 | $ | 5,684 | $ | 8,554 | $ | 7,756 | |||||||
Add: Fixed charges, net | 3,532 | 2,729 | 12,966 | 12,136 | 20,891 | 18,306 | 12,598 | ||||||||||||||
Income before income taxes and fixed charges, net | $ | 5,448 | $ | 4,340 | $ | 18,733 | $ | 16,856 | $ | 26,575 | $ | 26,860 | $ | 20,354 | |||||||
Fixed Charges: | |||||||||||||||||||||
Total interest expense | $ | 3,489 | $ | 2,688 | $ | 12,809 | $ | 11,970 | $ | 20,755 | $ | 18,155 | $ | 12,487 | |||||||
Interest factor in rents | 43 | 41 | 156 | 165 | 162 | 154 | 111 | ||||||||||||||
Dividends on preferred securities subject to mandatory redemption | 45 | 22 | 154 | 87 | 50 | 28 | 28 | ||||||||||||||
Preferred stock dividends | — | — | — | — | 50 | 56 | 72 | ||||||||||||||
Total fixed charges and preferred stock dividends | $ | 3,577 | $ | 2,751 | $ | 13,119 | $ | 12,222 | $ | 21,017 | $ | 18,393 | $ | 12,698 | |||||||
Ratio of earnings to fixed charges and preferred stock dividends | 1.5 | 1.6 | 1.4 | 1.4 | 1.3 | 1.5 | 1.6 | ||||||||||||||
| (1) | Income before income taxes does not include losses from unconsolidated investees and dividends on preferred securities subject to mandatory redemption. Fiscal 2001 income before income taxes does not include a cumulative effect of accounting change. |
| (2) | Income before income taxes for the period ended February 28, 2003 has been restated. See Note 18 to the condensed consolidated financial statements. |
“Earnings” consist of income before losses from unconsolidated investees, income taxes and fixed charges, less dividends on preferred securities subject to mandatory redemption. “Fixed charges” consist of interest cost, including interest on deposits, dividends on preferred securities subject to mandatory redemption, and that portion of rent expense estimated to be representative of the interest factor. The preferred stock dividend amounts represent pre-tax earnings required to cover dividends on preferred stock.