Investor Presentaiton
Morgan Stanley EXTRADE
End Notes
These notes refer to the financial metrics and/or defined term presented on Slide 4
1.
Balance Sheet Light, as it relates to the Morgan Stanley Wealth Management segment, refers to a lower Risk Weighted Assets ('RWAs') intensity.
Durable Sources of Revenues, as it relates to the Morgan Stanley, represent revenues associated with fee-based pricing arrangements, financing and lending that are
generally less susceptible to significant fluctuation as a result of market volatility when compared to other Firm revenues, and are comprised of: Asset Management revenues in
the Wealth and Investment Management segments; revenues from Financing and Secured Lending activities in the Institutional Securities and Wealth Management segments;
and revenues from Investment Banking Advisory services.
These notes refer to the financial metrics and/or defined term presented on Slide 5
1.
Pre-Tax Margin represents Pre-Tax Profit divided by Net revenues.
Pre-Tax Profit represents Income from continuing operations before income taxes. Pre-Tax Profit for 2010 excludes the negative impact of DVA of approximately $873 million.
DVA represents the change in fair value resulting from fluctuations in our debt credit spreads and other credit factors related to borrowings and other liabilities carried under the
fair value option. The full amount of the Net revenues DVA adjustment was recorded in the Institutional Securities segment. Pre-Tax Profit, excluding DVA is a non-GAAP
financial measure that the Firm considers useful for analysts, investors and other stakeholders to assess operating performance.
E*TRADE's Pre-Tax Margin and Pre-Tax Profit based on E*TRADE's Annual Report on Form 10-K for the year ended December 31, 2019 ('E*TRADE's 2019 Form 10-K').
Pro Forma Pre-Tax Margin and Pro Forma Pre-Tax Profit by Segment does not include estimated cost and funding synergies and post-closing restructuring / integration costs
associated with the transaction and does not factor in any potential attrition of assets or revenues post closing due to limited anticipated disruption to the existing business
models.
These notes refer to the financial metrics and/or defined term presented on Slide 6 and unless otherwise indicated were extracted from E*TRADE's 2019 Form 10-K
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Retail Client Assets of $362 billion at December 31, 2019 represent the market value of retail customer assets held by E*TRADE including security holdings and customer cash
and deposits, exclusive of advisor services accounts based on E*TRADE's Current Report on Form 8-K, dated January 23, 2020 ('E*TRADE's January 2020 Form 8-K').
Client Accounts represent retail services accounts, defined as those with a minimum balance of $25 or a trade within the prior six months. End of period (at December 31,
2019) retail accounts were 5.2 million.
$39 billion of On-Balance Sheet Deposits at December 31, 2019 consist of: brokerage sweep deposits of $27.9 billion; bank sweep deposits of $6.4 billion; and savings,
checking, and other banking assets of $4.3 billion. Beginning November 2019, bank sweep deposits include E*TRADE's Premium Savings Accounts participating in a sweep
deposit account program. $18 billion of Off-Balance Sheet Deposits at December 31, 2019 represent brokerage sweep deposits of $16.9 billion and bank sweep deposits of
$0.8 billion held at unaffiliated financial institutions.
Corporate Services Assets are inclusive of vested equity holdings, vested options holdings, and unvested holdings and totaled $296 billion as of December 31, 2019. End of
period (at December 31, 2019) corporate services accounts of ~1.9 million represent those holding any type of vested or unvested securities from E*TRADE's corporate services
client company or with a trade in the prior six months.
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