Morgan Stanley · NYSE:MS
Morgan Stanley — Q1 2009 Earnings Presentation
12 slides from Morgan Stanley's earnings presentation, May 12, 2009
Slide 1: Morgan Stanley First Quarter 2009 Overview
Free Writing Prospectus Dated May 12, 2009 Registration Statement No. 333-156423 Filed Pursuant to Rule 433 Morgan Stanley First Quarter 2009 Overview May 2009
Slide 2: Notice
Notice The information provided herein may include certain non-GAAP financial measures. The reconciliation of such measures to the comparable GAAP figures are included in the Company’s Annual Report on Form 10-K for the fiscal year ended November 30, 2008, Quarterly Report on Form 10-Q and Current R
Slide 3: Index
Index • Consolidated Financial Results − Institutional Securities − Asset Management − Global Wealth Management • Reduction in Risk Positions • Firmwide Real Estate Investments • Reduction in Leverage • Strong Capital • Funding Diversification 3 This slide is part of a presentation by Morgan Stanley
Slide 4: Consolidated Financial Highlights
Consolidated Financial Highlights 1Q 2009 Revenue Drivers 1Q 2009 Highlights • Delivered strong results in Commodities, Interest Rates, Net Revenues ($Bn) 3.0 Credit Products & Investment Banking; solid performance in Global Wealth Management PBT ($Bn) (0.9) • Improvements in Morgan Stanley’s Debt-R
Slide 5: Institutional Securities
Institutional Securities Net Revenue 1Q 2009 Highlights ($MM) • Fixed Income delivered strong results in Commodities, Interest Rates and 12,969 Credit Products 2,178 • Investment Banking delivered strong results − Ranked # 1 in announced global M&A 3,485 • Equity derivatives delivered solid quarter
Slide 6: Asset Management
Asset Management Net Revenue 1Q 2009 Highlights ($MM) • Core Business which includes traditional funds, hedge funds and fund-of-funds asset management 1,249 returned to profitability 425 Notable Revenue Items • Merchant Banking – Principal Investments − Real Estate Losses – ($374 million) 2,822 − Pr
Slide 7: Global Wealth Management
Global Wealth Management Net Revenue 1Q 2009 Highlights ($MM) 6,887 • Solid Performance in 1Q 2009 − 9% PBT Margin 911 − 12% PBT margin (ex-joint venture 559 integration costs) 1,387 − 20% ROE • Bank Deposits program up 21% from 1,379 4Q 2008 to $47 billion − Total Firm-wide Deposits up 1,299 to $60
Slide 8: Reduction in Risk Positions
Reduction in Risk Positions Net Exposure (1) ($Bn) 19.6 17.5 10.9 7.3 4.0 4.0 4.2 1.1 ABS CDO / Other CMBS Leveraged Acquisition (3) Subprime Mortgage-Related Finance Pipeline 4Q 2007 (2) 1Q 2009 Source: Morgan Stanley Earnings Conference Call, SEC Filings (1) Net Exposure is defined as potential lo
Slide 9: Firmwide Real Estate Investments
Firmwide Real Estate Investments (2) Total Real Estate Investments $4.9bn Real Estate Bridge Financing Infrastructure Fund • Crescent and Other Consolidated Interests $0.1 gross investment assets subject to non-recourse Real Estate Funds $0.1 debt of $2.5 billion provided by third party lenders $1.0
Slide 10: Substantial Reduction in Leverage
Substantial Reduction in Leverage Total Assets ($Bn) 1,132 1,098 943 677 626 1Q 2008 2Q 2008 3Q 2008 4Q 2008 1Q 2009 Tangible Shareholders’ Equity ($Bn) (1) 41 42 48 56 56 Leverage Ratios (2) 27.7x 26.1x 19.8x 12.1x 11.2x Source: Morgan Stanley Earnings Conference Call, SEC Filings (1) Excludes non-
Slide 11: Strong Capital
Strong Capital Key Capital Ratios (Basel I) Tangible Common Equity / Tangible Assets (1) (%) 3.9 3.9 4.2 Tier 1 Capital ratio 16.7% 2.8 2.6 Tier 1 Leverage ratio (2) 7.1% (3) TCE to RWA 9.2% 1Q 2008 2Q 2008 3Q 2008 4Q 2008 1Q 2009 Source: Morgan Stanley Earnings Conference Call, SEC Filings (1) TCE
Slide 12: Funding Diversification
Funding Diversification Composition of Funding Liabilities and Equity Shareholders’ Equity CP and Other Short-Term CP and Other Short-Term Deposits Shareholders’ Borrowings Borrowings Equity 5% 6% 1% 5% 12% Deposits Long-Term 15% Long-Term 32% 47% Debt Debt 52% 25% Secured Secured Funding Funding 4Q