Exhibit 99.1
Contact: Media Relations Investor Relations
Jim Badenhausen William Pike
212-761-4472 212-761-0008
Morgan Stanley For Immediate Release
Morgan Stanley Announces Sale of Aircraft Leasing Business to Terra Firma
NEW YORK, January 30, 2006 - Morgan Stanley (NYSE:MS) today announced that it
has entered into a definitive agreement to sell AWAS, its aircraft leasing
business, to Terra Firma for $2.5 billion in cash plus the assumption of
liabilities. The sale is subject to customary regulatory approvals and closing
conditions and is expected to close in the first half of 2006. Morgan Stanley
announced in August 2005 its intention to exit the non-core aircraft leasing
business and invest the sale proceeds in its core businesses.
John J. Mack, Chairman and CEO of Morgan Stanley said, "We are pleased with the
successful outcome of the sale process we announced in August. AWAS is a strong
business with superb management, but it does not fit our strategy. We continue
to believe selling the business is in the best long-term interests of Morgan
Stanley's shareholders. We plan to invest the sale proceeds in our core
businesses consistent with our goal of delivering a higher ROE for the Company
and its shareholders."
In the third quarter of 2005, Morgan Stanley recorded a charge of approximately
$1.0 billion after-tax to write down the value of AWAS to its then estimated
fair value. Based on the terms of the agreement, Morgan Stanley is revising its
estimate of AWAS fair value, and consistent with applicable accounting
standards, will reduce the previously mentioned charge by an amount that
approximates $500-550 million after-tax. The resulting revision in estimate
will be reflected in the Company's fourth quarter 2005 and full year 2005
results from discontinued operations and net income in the Company's annual
report on Form 10-K.
Income from continuing operations for the fourth quarter 2005 and full year
2005 of $1.7 billion and $5.2 billion, respectively and full year 2005 earnings
per share from continuing operations will be unaffected by this adjustment.
About AWAS
Headquartered in Seattle and with offices in New York, Miami, London, Singapore
and Sydney, AWAS is one of the world's leading aircraft leasing companies,
trading in the very competitive and highly specialized market of aviation
operating leases. AWAS currently owns 155 modern Stage-3 type jet aircraft and
has airline customers in 45 countries around the world. AWAS is managed by a
team of experienced aviation industry professionals. Additional information
about AWAS can be found by visiting its website at www.awas.com.
About Morgan Stanley
Morgan Stanley is a global financial services firm and a market leader in
securities, investment management and credit services. With more than 600
offices in 28 countries, Morgan Stanley connects people, ideas, and capital to
help clients achieve their financial aspirations.
About Terra Firma
Terra Firma is a European private equity group with offices in London and
Frankfurt. Its most recent acquisitions include: in the UK, East Surrey
Holdings which is the major gas supplier in Northern Ireland, Waste Recycling
Group, the landfill and power operations of Shanks Group, and Odeon Cinemas;
and in Europe, UCI Cinemas, Viterra, the German housing company, and Tank &
Rast, the motorway service operator. This acquisition is being funded by a
mixture of equity and debt underwritten by JP Morgan who also acted as
financial adviser to Terra Firma on the transaction.
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