- Net Revenues of $8.9 Billion and
Earnings per Diluted Share of $0.81
- Strong Performance across Sales
& Trading
- Investment Banking Ranked #1 in
Global IPOs; #2 in Global Announced, Global Completed M&A and
Global Equity1
- Wealth Management Revenues of $3.9
Billion and Pre-Tax Margin of 23%2,3
Morgan Stanley (NYSE: MS) today reported net revenues of $8.9
billion for the third quarter ended September 30, 2016 compared
with $7.8 billion a year ago.4 For the current quarter, net income
applicable to Morgan Stanley was $1.6 billion, or $0.81 per diluted
share,5 compared with income of $1.0 billion, or $0.48 per diluted
share,5 for the same period a year ago.4
The prior year quarter included DVA revenues of $435 million.
Excluding DVA in the prior year quarter, net revenues were $7.3
billion and income applicable to Morgan Stanley was $740 million,
or $0.34 per diluted share.6
Compensation expense of $4.1 billion increased from $3.4 billion
a year ago primarily driven by higher revenues. Non-compensation
expenses of $2.4 billion decreased from $2.9 billion a year ago
reflecting lower litigation costs and continued execution of the
Firm’s expense management initiatives.
The annualized return on average common equity was 8.7 percent
in the current quarter.7
Business Overview
- Institutional Securities net revenues
were $4.6 billion reflecting strong performance across our sales
and trading franchise, continued strength in M&A advisory and
subdued underwriting.
- Wealth Management net revenues were
$3.9 billion and pre-tax margin was 23%.3 Fee-based asset flows for
the quarter were $13.5 billion.
- Investment Management reported net
revenues of $552 million with assets under management or
supervision of $417 billion.
James P. Gorman, Chairman and Chief Executive Officer, said,
“This quarter we saw record revenues in Wealth Management and a
strong performance in our Sales and Trading business. While the
environment was more challenging for our equity underwriting and
asset management businesses, our expense initiatives remain on
track. Overall the results reflect steady progress against our long
term strategic goals.”
Summary of Institutional Securities Results (dollars in
millions) As Reported
Excluding DVA 8 Net Pre-Tax Net Pre-Tax Revenues
Income Revenues Income 3Q 2016 (a) $4,553 $1,383 * *
2Q 2016 (a) $4,578 $1,506 * *
3Q 2015
$3,904 $688 $3,469 $253 a) Effective January 1, 2016, the
Firm early adopted the provision of new accounting guidance that
requires changes in DVA to be presented in other comprehensive
income as opposed to net revenues. Results for 2015 were not
restated pursuant to this guidance, and as such, 3Q 2015 is the
only period where net revenues and pre-tax income are adjusted for
the impact of DVA.4
INSTITUTIONAL SECURITIES
Institutional Securities reported pre-tax income from continuing
operations of $1.4 billion compared with pre-tax income of $688
million a year ago, or $253 million excluding DVA.4,8 Net revenues
for the current quarter were $4.6 billion compared with $3.9
billion a year ago, or $3.5 billion excluding DVA.4,8 The following
discussion for sales and trading excludes DVA from the prior year
period.
- Advisory revenues of $504 million
decreased from $557 million a year ago on lower levels of completed
M&A activity. Equity underwriting revenues of $236 million
decreased from $250 million in the prior year quarter on lower fees
due to a shift in product mix. Fixed income underwriting revenues
of $364 million decreased from $374 million in the prior year
quarter primarily on lower loan fees.
- Equity sales and trading net revenues
of $1.9 billion increased from $1.8 billion a year ago reflecting
higher results in derivatives and cash equities.4,9
- Fixed Income sales and trading net
revenues of $1.5 billion increased from $583 million a year ago
driven principally by our credit and rates businesses on improved
market conditions compared with the prior year period.4,9,10
- Other sales and trading net losses of
$192 million compared with losses of $65 million a year ago
primarily reflecting lower revenues associated with corporate loan
hedging activity.
- Investment revenues of $36 million
decreased from $113 million a year ago driven by lower gains on
business related investments and investments associated with the
Firm’s compensation plans.
- Other revenues were $243 million
reflecting gains associated with held for sale corporate loans
compared with negative revenues of $112 million in the prior year
period related to mark-to-market losses on loans and
commitments.
- Compensation expenses of $1.7 billion
increased from $1.3 billion a year ago on higher revenues.
Non-compensation expenses of $1.5 billion for the current quarter
decreased from $1.9 billion a year ago primarily reflecting lower
litigation costs and broad-based expense discipline.
Morgan Stanley’s average trading Value-at-Risk (VaR) measured at
the 95% confidence level was $42 million compared with $46 million
from the second quarter of 2016 and $53 million in the third
quarter of the prior year.11
Summary of Wealth Management
Results (dollars in millions) Net Pre-Tax
Revenues Income 3Q 2016 $3,881 $901 2Q 2016 $3,811 $859 3Q 2015
$3,640 $824
WEALTH MANAGEMENT
Wealth Management reported pre-tax income from continuing
operations of $901 million compared with $824 million in the third
quarter of last year. The quarter’s pre-tax margin was 23%.3 Net
revenues for the current quarter were $3.9 billion compared with
$3.6 billion a year ago.
- Asset management fee revenues of $2.1
billion decreased from $2.2 billion a year ago reflecting lower
average fee rates on fee-based accounts.
- Transactional revenues12 of $791
million increased from $652 million a year ago. Results for the
current period reflect gains on investments associated with certain
employee deferred compensation plans compared with losses in the
prior year period.
- Net interest income of $885 million
increased from $751 million a year ago principally driven by higher
deposit and loan balances. Wealth Management client liabilities
were $70 billion at quarter end, an increase of $9 billion compared
with the prior year quarter.13
- Compensation expense for the current
quarter of $2.2 billion increased from $2.0 billion a year ago
primarily due to an increase in the fair value of deferred
compensation plan referenced investments. Non-compensation expenses
of $777 million decreased from $792 million a year ago primarily on
lower professional services costs.
Total client assets were $2.1 trillion and client assets in
fee-based accounts were $855 billion at quarter end. Fee-based
asset flows for the quarter were $13.5 billion.
Wealth Management representatives of 15,856 produced average
annualized revenue per representative of $977,000 in the current
quarter.
Summary of Investment Management
Results (dollars in millions) Net Pre-Tax
Revenues Income 3Q 2016 $552 $97 2Q 2016 $583 $118 3Q 2015 $274
$(38)
INVESTMENT MANAGEMENT
Investment Management reported pre-tax income from continuing
operations of $97 million compared with a pre-tax loss of $38
million in the third quarter of last year.
- Net revenues of $552 million increased
from $274 million in the prior year. Results for the prior year
quarter included the reversal of previously accrued carried
interest associated with the Asia private equity business. Asset
management fees were essentially unchanged from a year ago.
- Compensation expense for the current
quarter of $237 million increased from $95 million a year ago.
Results reflect an increase in the fair value of deferred
compensation plan referenced investments in the current quarter,
compared with declines in deferred compensation associated with
carried interest in the period a year ago. Non-compensation
expenses of $218 million were relatively unchanged from a year
ago.
CAPITAL
As of September 30, 2016, the Firm’s Common Equity Tier 1 and
Tier 1 risk-based capital ratios under Advanced Approach
transitional provisions were approximately 16.9% and 18.9%,
respectively.14
As of September 30, 2016, the Firm estimates its pro forma fully
phased-in Common Equity Tier 1 risk-based capital ratio under the
Advanced Approach and pro forma fully phased-in Supplementary
Leverage Ratio to be approximately 15.9% and 6.2%,
respectively.14,15,16
At September 30, 2016, book value and tangible book value per
common share were $37.11 and $32.13,17 respectively, based on
approximately 1.9 billion shares outstanding.
OTHER MATTERS
The effective tax rate from continuing operations for the
current quarter was 31.5%.
During the quarter ended September 30, 2016, the Firm
repurchased approximately $1.25 billion of its common stock or
approximately 41 million shares.
The Board of Directors declared a $0.20 quarterly dividend per
share, payable on November 15, 2016 to common shareholders of
record on October 31, 2016.
During the quarter ended September 30, 2016, the Firm redeemed
all of its issued and outstanding Trust Preferred securities.
Morgan Stanley is a leading global financial services firm
providing a wide range of investment banking, securities, wealth
management and investment management services. With offices in more
than 43 countries, the Firm’s employees serve clients worldwide
including corporations, governments, institutions and individuals.
For further information about Morgan Stanley, please visit
www.morganstanley.com.
A financial summary follows. Financial, statistical and
business-related information, as well as information regarding
business and segment trends, is included in the Financial
Supplement. Both the earnings release and the Financial Supplement
are available online in the Investor Relations section at
www.morganstanley.com.
# # #
(See Attached Schedules)
NOTICE:
The information provided herein may include certain non-GAAP
financial measures. The definition of such measures or
reconciliation of such metrics to the comparable U.S. GAAP figures
are included in this earnings release and the Financial Supplement,
both of which are available on www.morganstanley.com.
This earnings release contains forward-looking statements.
Readers are cautioned not to place undue reliance on
forward-looking statements, which speak only as of the date on
which they are made and which reflect management’s current
estimates, projections, expectations or beliefs and which are
subject to risks and uncertainties that may cause actual results to
differ materially. For a discussion of additional risks and
uncertainties that may affect the future results of the Firm,
please see “Forward-Looking Statements” immediately preceding Part
I, Item 1, “Competition” and “Supervision and Regulation” in Part
I, Item 1, “Risk Factors” in Part I, Item 1A, “Legal Proceedings”
in Part I, Item 3, “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” in Part II, Item 7
and “Quantitative and Qualitative Disclosures about Market Risk” in
Part II, Item 7A in the Firm’s Annual Report on Form 10-K for the
year ended December 31, 2015 and other items throughout the Form
10-K, the Firm’s Quarterly Reports on Form 10-Q and the Firm’s
Current Reports on Form 8-K, including any amendments thereto.
1 Source: Thomson Reuters – for the period of January 1, 2016 to
September 30, 2016 as of October 3, 2016.
2 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.
3 Pre-tax margin is a non-GAAP financial measure that the Firm
considers useful for investors and analysts to assess operating
performance. Pre-tax margin represents income (loss) from
continuing operations before taxes divided by net revenues, two
U.S. GAAP reported amounts, without adjustment.
4 Effective January 1, 2016, the Firm early adopted the
provision of new accounting guidance that requires unrealized gains
and losses from Morgan Stanley’s debt-related credit spreads and
other credit factors (Debt Valuation Adjustments, or DVA) to be
presented in Other comprehensive income as opposed to net revenues
and net income. Results for 2015 are not restated pursuant to that
guidance.
5 Includes preferred dividends and other adjustments related to
the calculation of earnings per share of $79 million for the third
quarter of 2016 and 2015. Refer to page 13 of Morgan Stanley’s
Financial Supplement accompanying this release for the calculation
of earnings per share.
6 Excluding DVA from net revenues, net income applicable to
Morgan Stanley and earnings (loss) per diluted share amounts are
non-GAAP financial measures that the Firm considers useful for
investors and analysts to allow better comparability of
period-to-period operating performance. The reconciliation of net
revenues, net income (loss) applicable to Morgan Stanley and
earnings (loss) per diluted share applicable to Morgan Stanley
common shareholders from a U.S. GAAP to non-GAAP basis is as
follows (Net revenues, net income (loss) reconciliation and average
diluted shares are presented in millions – also see footnote
4):
3Q 2015 Net revenues - U.S. GAAP $7,767 DVA
impact $435 Net revenues - Non-GAAP $7,332 Net income (loss)
applicable to MS - U.S. GAAP $1,018 DVA impact $278 Net income
(loss) applicable to MS - Non-GAAP $740 Earnings (loss) per
diluted share - U.S. GAAP $0.48 DVA impact $0.14 Earnings (loss)
per diluted share - Non-GAAP $0.34 Average diluted shares -
U.S. GAAP 1,949
7 Annualized return on average common equity (ROE) is a non-GAAP
financial measure that the Firm considers useful for investors and
analysts to allow better comparability of period-to-period
operating performance. The calculation of ROE uses annualized net
income applicable to Morgan Stanley less preferred dividends as a
percentage of average common equity.
8 Institutional Securities net revenues and pre-tax income
(loss), excluding DVA, is a non-GAAP financial measure that the
Firm considers useful for investors and analysts to allow for
better comparability of period-to-period operating performance. The
reconciliation of net revenues and pre-tax income (loss) from a
U.S. GAAP to non-GAAP basis is as follows (amounts are presented in
millions - also see footnote 4):
3Q 2015 Net revenues - U.S. GAAP $3,904 DVA
impact $435 Net revenues - Non-GAAP $3,469 Pre-tax income
(loss) - U.S. GAAP $688 DVA impact $435 Pre-tax income (loss) -
Non-GAAP $253
9 Sales and trading net revenues, including Fixed Income and
Equity sales and trading net revenues excluding DVA are non-GAAP
financial measures that the Firm considers useful for investors and
analysts to allow better comparability of period-to-period
operating performance. The reconciliation of sales and trading,
including Fixed Income and Equity sales and trading net revenues
from a U.S. GAAP to non-GAAP basis is as follows (amounts are
presented in millions – also see footnote 4):
3Q 2015 Sales & Trading - U.S. GAAP $2,722
DVA impact $435 Sales & Trading - Non-GAAP $2,287 Fixed
Income Sales & Trading - U.S. GAAP $918 DVA impact $335 Fixed
Income Sales & Trading - Non-GAAP $583 Equity Sales
& Trading - U.S. GAAP $1,869 DVA impact $100 Equity Sales &
Trading - Non-GAAP $1,769
10 Effective for the quarter ended September 30, 2016, the
Institutional Securities “Fixed Income & Commodities” business
has been renamed the “Fixed Income” business.
11 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 Annual
Report on Form 10-K for the year ended December 31, 2015 (2015 Form
10-K). Refer to page 6 of Morgan Stanley’s Financial Supplement
accompanying this release for the VaR disclosure.
12 Transactional revenues include investment banking, trading,
and commissions and fee revenues.
13 Wealth Management client liabilities reflect U.S. Bank
lending and broker dealer margin activity.
14 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 risk-weighted
assets (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 September 30, 2016, 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 2015 10-K and Part I, Item 2
“Liquidity and Capital Resources – Regulatory Requirements” in the
Firm’s 10-Q for the quarter ended June 30, 2016.
15 The pro forma fully phased-in Common Equity Tier 1 risk-based
capital ratio and pro forma fully phased-in Supplementary Leverage
Ratio are non-GAAP financial measures that the Firm considers to be
useful measures for investors and analysts to evaluate compliance
with new regulatory capital requirements that have not yet become
effective.
16 The Firm is required to disclose information related to its
supplementary leverage ratio, which through to the end of 2017 will
include the effects of transitional provisions. The supplementary
leverage ratio will become effective as a capital standard on
January 1, 2018. Specifically, beginning on January 1, 2018, the
Firm must maintain a Tier 1 supplementary leverage capital buffer
of at least 2% in addition to the 3% minimum supplementary leverage
ratio (for a total of at least 5%), in order to avoid limitations
on capital distributions, including dividends and stock
repurchases, and discretionary bonus payments to executive
officers. The Firm’s pro forma Supplementary Leverage Ratio
estimate utilizes a fully phased-in Tier 1 capital numerator of
approximately $66.0 billion and a fully phased-in supplementary
leverage exposure denominator of approximately $1.07 trillion. The
Firm’s estimates are subject to risks and uncertainties that may
cause actual results to differ materially from estimates based on
these regulations. Further, these expectations should not be taken
as projections of what the Firm’s supplementary leverage ratios or
earnings, assets or exposures will actually be at future dates. See
“Risk Factors” in Part I, Item 1A in the 2015 Form 10-K for a
discussion of risks and uncertainties that may affect the future
results of the Firm.
17 Tangible common equity and tangible book value per common
share are non-GAAP financial measures that the Firm considers to be
useful measures of capital adequacy for investors and analysts.
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.
Morgan Stanley
Consolidated Financial Summary (unaudited, dollars in
millions, except for per share data)
Quarter Ended Percentage Change From: Nine Months
Ended Percentage Sept 30, 2016 June 30,
2016 Sept 30, 2015 June 30, 2016 Sept 30,
2015 Sept 30, 2016 Sept 30, 2015 Change
Net revenues Institutional Securities $ 4,553 $ 4,578 $
3,904 (1 %) 17 % $ 12,845 $ 14,534 (12 %) Wealth Management 3,881
3,811 3,640 2 % 7 % 11,360 11,349 -- Investment Management 552 583
274 (5 %) 101 % 1,612 1,694 (5 %) Intersegment Eliminations
(77 ) (63 ) (51 ) (22 %) (51 %) (207 )
(160 ) (29 %) Net revenues $ 8,909 $ 8,909 $ 7,767
-- 15 % $ 25,610 $ 27,417 (7 %)
Income (loss) from continuing operations before tax
Institutional Securities $ 1,383 $ 1,506 $ 688 (8 %) 101 % $ 3,797
$ 4,123 (8 %) Wealth Management 901 859 824 5 % 9 % 2,546 2,564 (1
%) Investment Management 97 118
(38 ) (18 %) * 259 369 (30 %) Income
(loss) from continuing operations before tax $ 2,381 $ 2,483
$ 1,474 (4 %) 62 % $ 6,602 $ 7,056 (6
%)
Net Income (loss) applicable to Morgan Stanley
Institutional Securities $ 966 $ 988 $ 518 (2 %) 86 % $ 2,545 $
3,355 (24 %) Wealth Management 564 516 509 9 % 11 % 1,573 1,605 (2
%) Investment Management 67 78
(9 ) (14 %) * 195 259 (25 %) Net Income
(loss) applicable to Morgan Stanley $ 1,597 $ 1,582 $
1,018 1 % 57 % $ 4,313 $ 5,219 (17 %)
Earnings (loss) applicable to Morgan
Stanley common shareholders
$
1,518
$
1,425
$
939
7
%
62
%
$
3,999
$
4,918
(19
%)
Financial Metrics: Earnings per diluted share
$ 0.81 $ 0.75 $ 0.48 8 % 69 % $ 2.11 $ 2.51 (16 %) Earnings per
diluted share excluding DVA $ 0.81 $ 0.75 $ 0.34 8 % 138 % $ 2.11 $
2.27 (7 %) Return on average common equity 8.7 % 8.3 % 5.6 %
7.7 % 9.8 % Return on average common equity excluding DVA 8.7 % 8.3
% 3.9 % 7.7 % 8.8 %
_________________________________________
Notes:
-
Effective January 1, 2016, the Firm early
adopted the provision of new accounting guidance that requires
unrealized gains and losses from Morgan Stanley’s debt-related
credit spreads and other credit factors (Debt Valuation
Adjustments, or DVA) to be presented in other comprehensive income
as opposed to net revenues and net income. This change is reflected
in the consolidated results and the Institutional Securities
segment for 2016. Results for 2015 were not restated pursuant to
this guidance.
-
Refer to End Notes, U.S. GAAP to Non-GAAP
Measures and Definition of Performance Metrics on pages 14 - 16
from the Financial Supplement for additional information related to
the calculation of the financial metrics.
9
Morgan Stanley
Consolidated Income Statement Information (unaudited,
dollars in millions)
Quarter Ended
Percentage Change From: Nine Months Ended
Percentage Sept 30, 2016 June 30, 2016 Sept
30, 2015 June 30, 2016 Sept 30, 2015 Sept 30,
2016 Sept 30, 2015 Change Revenues: Investment
banking $ 1,225 $ 1,224 $ 1,313 -- (7 %) $ 3,556 $ 4,284 (17 %)
Trading 2,609 2,746 2,026 (5 %) 29 % 7,420 8,649 (14 %) Investments
87 126 (119 ) (31 %) * 179 408 (56 %) Commissions and fees 991
1,020 1,115 (3 %) (11 %) 3,066 3,459 (11 %) Asset management,
distribution and admin. fees 2,686 2,637 2,732 2 % (2 %) 7,943
8,155 (3 %) Other 308 243 (62 )
27 % * 631 406 55 % Total non-interest
revenues 7,906 7,996 7,005 (1 %) 13 % 22,795 25,361 (10 %)
Interest income 1,734 1,667 1,451 4 % 20 % 5,148 4,321 19 %
Interest expense 731 754 689
(3 %) 6 % 2,333 2,265 3 % Net
interest 1,003 913 762 10
% 32 % 2,815 2,056 37 % Net revenues
8,909 8,909 7,767 -- 15 %
25,610 27,417 (7 %) Non-interest
expenses: Compensation and benefits 4,097 4,015 3,437 2 % 19 %
11,795 12,366 (5 %) Non-compensation expenses: Occupancy and
equipment 339 329 341 3 % (1 %) 997 1,034 (4 %) Brokerage, clearing
and exchange fees 491 484 485 1 % 1 % 1,440 1,435 -- Information
processing and communications 456 429 447 6 % 2 % 1,327 1,300 2 %
Marketing and business development 130 154 158 (16 %) (18 %) 418
487 (14 %) Professional services 489 547 576 (11 %) (15 %) 1,550
1,660 (7 %) Other 526 468 849
12 % (38 %) 1,481 2,079 (29 %)
Total non-compensation expenses 2,431 2,411 2,856 1 % (15 %) 7,213
7,995 (10 %) Total non-interest
expenses 6,528 6,426 6,293
2 % 4 % 19,008 20,361 (7 %)
Income (loss) from continuing operations before taxes 2,381
2,483 1,474 (4 %) 62 % 6,602 7,056 (6 %) Income tax provision /
(benefit) from continuing operations 749 833
423 (10 %) 77 % 2,160
1,704 27 % Income (loss) from continuing operations
1,632 1,650 1,051 (1 %) 55 %
4,442 5,352 (17 %) Gain (loss) from
discontinued operations after tax 8 (4 )
(2 ) * * 1 (9 ) * Net income (loss) $
1,640 $ 1,646 $ 1,049 -- 56 % $ 4,443 $ 5,343 (17 %) Net income
applicable to nonredeemable noncontrolling interests 43
64 31 (33 %) 39 % 130
124 5 % Net income (loss) applicable to Morgan
Stanley 1,597 1,582 1,018
1 % 57 % 4,313 5,219 (17 %) Preferred
stock dividend / Other 79 157 79
(50 %) -- 314 301 4 % Earnings
(loss) applicable to Morgan Stanley common shareholders $ 1,518
$ 1,425 $ 939 7 % 62 % $ 3,999 $ 4,918
(19 %) Pre-tax profit margin 27 % 28 % 19 % 26 % 26 %
Compensation and benefits as a % of net revenues 46 % 45 % 44 % 46
% 45 % Non-compensation expenses as a % of net revenues 27 % 27 %
37 % 28 % 29 % Effective tax rate from continuing operations 31.5 %
33.5 % 28.7 % 32.7 % 24.1 %
_________________________________________
Notes:
-
Refer to End Notes, U.S. GAAP to Non-GAAP
Measures and Definition of Performance Metrics on pages 14 - 16
from the Financial Supplement for additional information.
10
Morgan Stanley
Earnings Per Share Summary
(unaudited, dollars in millions, except for per share data)
Quarter Ended Percentage Change From: Nine
Months Ended Percentage Sept 30, 2016 June 30,
2016 Sept 30, 2015 June 30, 2016 Sept 30,
2015 Sept 30, 2016 Sept 30, 2015 Change
Income (loss) from continuing operations $
1,632 $ 1,650 $ 1,051 (1 %) 55 % $ 4,442 $ 5,352 (17 %) Net income
applicable to nonredeemable noncontrolling interests 43
64 31 (33 %) 39 % 130 124
5 %
Income (loss) from continuing operations applicable
to Morgan Stanley 1,589 1,586 1,020 -- 56 % 4,312 5,228 (18 %)
Less: Preferred Dividends and allocation of earnings to
Participating Restricted Stock Units 79 157
79 (50 %) -- 314 301 4 %
Income (loss) from continuing operations applicable to Morgan
Stanley 1,510 1,429 941 6 % 60 % 3,998 4,927 (19 %) Gain
(loss) from discontinued operations after tax 8 (4 ) (2 ) * * 1 (9
) * Less: Gain (loss) from discontinued operations after tax
applicable to noncontrolling interests 0 0 0 -- -- 0 0 -- Less:
Allocation of earnings to Participating Restricted Stock Units
0 0 0 -- -- 0 0
--
Earnings (loss) from discontinued operations
applicable to Morgan Stanley common shareholders 8
(4 ) (2 ) * *
1 (9
) *
Earnings (loss) applicable to Morgan Stanley
common shareholders $ 1,518 $ 1,425
$ 939 7 % 62 %
$ 3,999 $
4,918 (19 %) Average basic common shares outstanding
(millions) 1,838 1,866 1,904 (2 %) (3 %) 1,863 1,916 (3 %)
Earnings
per basic share: Income from continuing operations
$
0.82 $ 0.77 $ 0.49 6 % 67 %
$ 2.15 $ 2.57 (16 %) Discontinued
operations
$ 0.01 $ (0.01 )
$ - * *
$ - $ - --
Earnings per basic share
$ 0.83
$ 0.76 $ 0.49
9 % 69 %
$ 2.15 $
2.57 (16 %) Average diluted common
shares outstanding and common stock equivalents (millions) 1,879
1,899 1,949 (1 %) (4 %) 1,898 1,958 (3 %)
Earnings per diluted
share: Income from continuing operations
$ 0.80
$ 0.75 $ 0.48 7 % 67 %
$
2.11 $ 2.52 (16 %) Discontinued operations
$ 0.01 $ - $ - * *
$ - $ (0.01 ) * Earnings per
diluted share
$ 0.81 $
0.75 $ 0.48 8 %
69 %
$ 2.11 $ 2.51
(16 %)
_________________________________________
Notes:
-
Refer to End Notes, U.S. GAAP to Non-GAAP
Measures and Definition of Performance Metrics on pages 14 - 16
from the Financial Supplement for additional information.
11
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Morgan StanleyMedia Relations:Michele Davis,
212-761-9621orInvestor Relations:Sharon Yeshaya, 212-761-1632
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