UBS Warburg Global Financial Services Conference Stephen Crawford Chief Financial Officer April 24, 2002

1 This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to the public and does not contain any material, non-public information. The presentation has been prepared solely for informational purposes and is neither an offer to sell nor the solicitation of an offer to buy any security or instrument and has not been updated since it was originally presented on April 24, Sales and Trading Sales and Trading Net Revenues ($MM, % Total) % of Firm Revenues 27% 31%34%37%39% CAGR: 20%

2 This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to the public and does not contain any material, non-public information. The presentation has been prepared solely for informational purposes and is neither an offer to sell nor the solicitation of an offer to buy any security or instrument and has not been updated since it was originally presented on April 24, Diversification Sales and Trading Net Revenues ($MM, % Total) EquityFixed Income

3 This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to the public and does not contain any material, non-public information. The presentation has been prepared solely for informational purposes and is neither an offer to sell nor the solicitation of an offer to buy any security or instrument and has not been updated since it was originally presented on April 24, Balance Sheet (1) $MMs Note:(1) As February 28, 2002 Total Assets Cash and cash equivalents Financing transactions, including: Reverse repos and securities borrowed Financial instruments, including: Cash products ($118,770) Derivative products ($31,814) Receivables, net of allowances: Other assets, primarily includes: Aircraft, cash collateral, goodwill, office facilities etc. Asset Class $491,651 74, , ,846 47,885 16,400 Balance $MMs 15% 40% 32% 10% 3% % of Total

4 This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to the public and does not contain any material, non-public information. The presentation has been prepared solely for informational purposes and is neither an offer to sell nor the solicitation of an offer to buy any security or instrument and has not been updated since it was originally presented on April 24, Financial Instruments – Cash (1)  Bank Loans: $4.9Bn  Private Equity: $900MM (2)  High Yield: $1.6Bn Loans and Commitments Investment Grade Non-Investment Grade 75% 25% Note:(1) As of February 28, 2002 (2) Of which only $250 MM is in inventory Selected Financial Instruments Total: $10.2Bn

5 This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to the public and does not contain any material, non-public information. The presentation has been prepared solely for informational purposes and is neither an offer to sell nor the solicitation of an offer to buy any security or instrument and has not been updated since it was originally presented on April 24, Financial Instruments – Derivatives (1) Maturity Profile by Counterparty Rating ($MMs) Counterparty Rating by Product ($MMs) AAA AAA BBB NIG Note:(1) As February 28, 2002

6 This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to the public and does not contain any material, non-public information. The presentation has been prepared solely for informational purposes and is neither an offer to sell nor the solicitation of an offer to buy any security or instrument and has not been updated since it was originally presented on April 24, Product Lifecycle Time Margins Volume Credit Derivatives 2002 Interest Rate Swaps 2002

7 This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to the public and does not contain any material, non-public information. The presentation has been prepared solely for informational purposes and is neither an offer to sell nor the solicitation of an offer to buy any security or instrument and has not been updated since it was originally presented on April 24, Revenue Drivers  Trading Volumes  Volatility  Primary Activity  Market Direction

8 This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to the public and does not contain any material, non-public information. The presentation has been prepared solely for informational purposes and is neither an offer to sell nor the solicitation of an offer to buy any security or instrument and has not been updated since it was originally presented on April 24, Business Model Increase Flow Lowers Risk Strengthens Client Relationships

9 This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to the public and does not contain any material, non-public information. The presentation has been prepared solely for informational purposes and is neither an offer to sell nor the solicitation of an offer to buy any security or instrument and has not been updated since it was originally presented on April 24, Consolidation and Fragmentation 2001 Mutual Funds 2001 Passive Funds Top 15 Complexes (Cumulative Share %)(%) 2001 Separately Managed Accounts (Cumulative Share %) Fidelity Vanguard Cap Research Putnam Funds Franklin Templeton Morgan Stanley Janus TIAA-CREF MFS Oppenheimer AIM American Express T. Rowe Price American Century PIMCO All Others 2001 Hedge Funds (%) BHTSSGAVanguardDeutscheMellonOther BrandesRittenhouseAlliance1838 Advisors LazardOther Top 20Next 20Next 60Next 535 Source for above charts: Morgan Stanley/Freeman Securities Research

10 This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to the public and does not contain any material, non-public information. The presentation has been prepared solely for informational purposes and is neither an offer to sell nor the solicitation of an offer to buy any security or instrument and has not been updated since it was originally presented on April 24, Client Service Model  Three customer segments  Mutual funds  Hedge funds  Asset owners  Different value chains  Best execution  Enhanced services  Advice  Capital  One prerequisite: Scale operations

11 This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to the public and does not contain any material, non-public information. The presentation has been prepared solely for informational purposes and is neither an offer to sell nor the solicitation of an offer to buy any security or instrument and has not been updated since it was originally presented on April 24, Execution Applied OTC market making technology and strategy to options business Making markets in 40,000 instruments, representing 435 names – from standing start in August 1999 Largely automated operations – handful of traders OTC Market Making Automated Options Market Making Total Number of Stocks

12 This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to the public and does not contain any material, non-public information. The presentation has been prepared solely for informational purposes and is neither an offer to sell nor the solicitation of an offer to buy any security or instrument and has not been updated since it was originally presented on April 24, Services and Advice  Analytics  Financing  Settlement  Securities lending  Dedicated trading  Tax and regulatory advice  Technology

13 This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to the public and does not contain any material, non-public information. The presentation has been prepared solely for informational purposes and is neither an offer to sell nor the solicitation of an offer to buy any security or instrument and has not been updated since it was originally presented on April 24, Research Japan II First Teams 2002 Chemicals Construction Metals Software/Business Autos & Auto Parts Insurance Telecommunications Equipment Equity Strategy Global II First Teams 2001 Top Ranked Analysts by Institutional Investor Morgan Stanley Proprietary Research Ratings System Ratings as of 3/18/2002: O or Over = Overweight E or Equal = Equal-weight U or Under = Underweight Pre- 3/18/2002 Ratings: SB = Strong Buy O = Outperform N = Neutral U = Underperform Currently 22% of stocks are ranked Underweight by MWD Analysts North America II First Teams 2001 Medical Supplies & Devices Cable Publishing & Information Services Radio & TV Broadcasting Enterprise Software Internet Infrastructure Services Specialty Chemicals Data Networking Autos & Auto Parts Brokers & Asset Managers Insurance/Nonlife Europe II First Teams 2002 Autos & Auto Parts Luxury Goods Telecommunications Equipment Tobacco Convertibles Economics/Developed Markets Equity Strategy/Developed Markets

14 This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to the public and does not contain any material, non-public information. The presentation has been prepared solely for informational purposes and is neither an offer to sell nor the solicitation of an offer to buy any security or instrument and has not been updated since it was originally presented on April 24, Scale Morgan Stanley Institutional Securities Trading Volume and Cost per Trade (Indexed) Gross Volumes Operations Expenses Cost per Trade

15 This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to the public and does not contain any material, non-public information. The presentation has been prepared solely for informational purposes and is neither an offer to sell nor the solicitation of an offer to buy any security or instrument and has not been updated since it was originally presented on April 24, Risk Efficiency Firm Risk Efficiency and VaR Ratio($MM) Ex-ante Risk Efficiency (1) Ex-post Risk Efficiency (2) Firm Avg. VaR Note:(1) Ex-ante Risk Efficiency is calculated as Average P&L / Average VaR (2) Ex-post Risk Efficiency is calculated as Average P&L / Standard Deviation (P&L)

16 This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to the public and does not contain any material, non-public information. The presentation has been prepared solely for informational purposes and is neither an offer to sell nor the solicitation of an offer to buy any security or instrument and has not been updated since it was originally presented on April 24, Source: FIBV European Opportunity: Equities Equity Capital Markets Penetration, U.S. Equity Capital Markets Penetration, Europe Market Capitalization/GDP (%) Turnover Velocity of Domestic Shares, U.S. (1) (%) Market Capitalization/GDP (%) Turnover Velocity of Domestic Shares, Europe (2) (%) Notes:(1)Based on blended turnover velocity of NYSE and Nasdaq. Turnover velocity defined as Total Trading Volume/Exchange Market Capitalization, calculated using monthly figures. (2)Based on blended turnover of LSE, Deutsche Börse, Euronext Paris, and Milan. Turnover velocity declined as Total Trading Volume/Exchange Market Capitalization, calculated using monthly figures. From , Euronext data is for Euronext Paris only; 2001 data consolidates other Euronext exchanges (Brussels, Amsterdam). Consequently, 2001 weighted-average turnover velocity gives greater weight to Euronext than in previous years. Source: FIBV, Bureau of Economic AnalysisSource: FIBV, Bureau of Economic Analysis, Eurostat Yearbook 2001 Source: FIBV

17 This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to the public and does not contain any material, non-public information. The presentation has been prepared solely for informational purposes and is neither an offer to sell nor the solicitation of an offer to buy any security or instrument and has not been updated since it was originally presented on April 24, European Opportunity: Fixed Income Percent of Private Non-financial Debt Outstanding in U.S. (%) Bank LoansBonds Main Financial Liabilities of Euro-Area Non-Financial Corporations (€Bn) Source: Federal Reserve Board Bank LoansBonds Source: ECB Monthly Bulletin, March 2002 Note:(1)Data reflects expanded Euro-Area (addition of Greece) from 1Q01 onward. 2,707 2,769 2,826 2,861 2,9342,929 3,0283,055 3,159 3,263 3,379 3,502 3,618 3,773 3,867 3,920 4Q97 – 3Q01 CAGR: 10.4% 13.8% 9.9% (1)

18 This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to the public and does not contain any material, non-public information. The presentation has been prepared solely for informational purposes and is neither an offer to sell nor the solicitation of an offer to buy any security or instrument and has not been updated since it was originally presented on April 24, Relative Returns Annual ROE Comparison (Indexed to MWD) MWD LEH GS MER JPM C Source: Company filings and Morgan Stanley Research