Investor Presentaiton
Morgan Stanley EXTRADE
End Notes
These notes refer to the financial metrics and/or defined term presented on Slide 15
1.
Total Cost and Funding Synergies are Morgan Stanley estimates. Estimated cost synergies are phased in over three years, and estimated funding synergies are phased in
over two years, from the closing date of the transaction.
These notes refer to the financial metrics and/or defined term presented on Slide 16
1.
Cost and Funding Synergies and Post-closing Restructuring / Integration Costs are Morgan Stanley estimates. Estimated cost synergies are phased in over three years,
estimated funding synergies are phased in over two years, and post-closing restructuring / integration costs are phased in over three years, from the closing date of the
transaction.
These notes refer to the financial metrics and/or defined term presented on Slide 17
1.
2.
3.
Financial Advisory Client Assets and Client Relationships and Client Accounts on a Pro Forma basis are as of December 31, 2019. Morgan Stanley client relationships
may include more than one retail client account. E*TRADE Retail Client Accounts and Retail Client Assets are based on E*TRADE's 2019 Form 10-K and January 2020 8-K,
respectively.
Pro Forma Stock Plan Participants are defined as accounts of the corporate plans serviced with vested and unvested awards. Shareworks by Morgan Stanley stock plan
participants of ~2.7 million are as of December 31, 2019. E*TRADE's ~1.9 million accounts 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 are as of December 31, 2019 based on E*TRADE's 2019 Form 10-K.
Pro forma Stock Plan Balances consist of vested and unvested awards. Shareworks by Morgan Stanley balances of -$280 billion are as of December 31, 2019. E*TRADE'S
corporate services assets are inclusive of vested equity holdings, vested options holdings, and unvested holdings totaling $296 billion are as of December 31, 2019 based on
E*TRADE's 2019 Form 10-K.
Pro Forma Revenues are equal to the combined full-year 2019 revenues of Morgan Stanley Wealth Management, of $17.7 billion, and E*TRADE, of $2.9 billion based on
E*TRADE's 2019 Form 10-K.
Pre-Tax Margin represents Pre-Tax Profit divided by Net revenues. Pre-Tax Profit represents Income from continuing operations before income taxes. E*TRADE's Pre-Tax
Margin and Pre-Tax Profit based on E*TRADE's 2019 Form 10-K. Pro Forma Pre-Tax Margin 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.
EPS and CET1 Accretion are Morgan Stanley estimates. Estimated funding synergies are phased in over two years, and estimated cost synergies are phased in over three
years, from the closing date of the transaction
The calculation of ROTCE uses pro forma net income applicable to Morgan Stanley less preferred dividends as a percentage of pro forma average tangible common equity
('TCE'). Tangible Book Value per Common Share ('TBVPS') equals pro forma TCE divided by period end common shares outstanding, as adjusted for the transaction. Pro
forma ROTCE and Tangible Book Value per Share are non-GAAP financial measures that the Firm considers useful for analysts, investors and other stakeholders to assess
operating performance.
These notes refer to the financial metrics and/or defined term presented on Slide 18
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.
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