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 Six Months Ended Fiscal Year
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May 31, May 31, May 31, May 31,
2002 2001 2002 2001 2001 2000 1999 1998 1997
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Ratio of Earnings to Fixed Charges
Earnings:
Income before income taxes (1) $ 1,247 $ 1,472 $ 2,594 $ 3,172 $ 5,734 $ 8,554 $ 7,756 $ 5,405 $ 4,274
Add: Fixed charges, net 2,888 6,454 5,868 12,674 20,891 18,306 12,598 13,544 10,898
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Income before income taxes and
fixed charges, net $ 4,135 $ 7,926 $ 8,462 $15,846 $26,625 $26,860 $20,354 $18,949 $15,172
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Fixed Charges:
Total interest expense $ 2,844 $ 6,410 $ 5,780 $12,586 $20,755 $18,155 $12,487 $13,444 $10,806
Interest factor in rents 44 48 87 95 162 154 111 100 92
Dividends on preferred
securities subject to
mandatory redemption 22 7 44 14 50 28 28 20 -
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Total fixed charges $ 2,910 $ 6,465 $ 5,911 $12,695 $20,967 $18,337 $12,626 $13,564 $10,898
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Ratio of earnings to fixed charges 1.4 1.2 1.4 1.2 1.3 1.5 1.6 1.4 1.4
Ratio of Earnings to Fixed Charges and
Preferred Stock Dividends
Earnings:
Income before income taxes (1) $ 1,247 $ 1,472 $ 2,594 $ 3,172 $ 5,734 $ 8,554 $ 7,756 $ 5,405 $ 4,274
Add: Fixed charges, net 2,888 6,454 5,868 12,674 20,891 18,306 12,598 13,544 10,898
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Income before income taxes and
fixed charges, net $ 4,135 $ 7,926 $ 8,462 $15,846 $26,625 $26,860 $20,354 $18,949 $15,172
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Fixed Charges:
Total interest expense $ 2,844 $ 6,410 $ 5,780 $12,586 $20,755 $18,155 $12,487 $13,444 $10,806
Interest factor in rents 44 48 87 95 162 154 111 100 92
Dividends on preferred securities
subject to mandatory redemption 22 7 44 14 50 28 28 20 -
Preferred stock dividends - 14 - 28 50 56 72 87 110
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Total fixed charges and
preferred stock dividends $ 2,910 $ 6,479 $ 5,911 $12,723 $21,017 $18,393 $12,698 $13,651 $11,008
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Ratio of earnings to fixed charges
and preferred stock dividends 1.4 1.2 1.4 1.2 1.3 1.5 1.6 1.4 1.4
(1) 2001 income before income taxes does not include an extraordinary item or
cumulative effect of accounting change. 1998 income before income taxes
does not include a cumulative effect of accounting change.
"Earnings" consist of income before 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.