Morgan Stanley 2009 Annual Report Download - page 238

(2) Amounts primarily relate to securities financing transactions, which include repurchase and resale agreements, securities borrowed and
loaned transactions, customer receivables/payables and segregated customer cash. The Company considers its principal trading,
investment banking, commissions, and interest and dividend income, along with the associated interest expense as one integrated activity
for each of the Company’s separate businesses and is therefore unable to further breakout Interest and dividends and Interest expense
(see Note 1 to the consolidated financial statements).
Rate/Volume Analysis
The following table sets forth an analysis of the effect on net interest income of volume and rate changes for
2009 versus fiscal 2008.
2009 versus Fiscal 2008
Increase (decrease) due to change in:
Volume Rate Net change
(in millions)
Interest earning assets
Financial instruments owned ........................... $ (2,320) $ (2,486) $ (4,806)
Receivables from other loans ........................... (365) (190) (555)
Other interest earning assets ........................... (7,510) (19,106) (26,616)
Change in interest income ................................ $(10,195) $(21,782) $(31,977)
Interest bearing liabilities
Commercial paper and other short-term borrowings ......... $ (558) $ (54) $ (612)
Interest bearing deposits ............................... 544 (502) 42
Long-term debt ...................................... (363) (2,532) (2,895)
Other interest bearing liabilities ......................... (10,903) (15,232) (26,135)
Change in interest expense ............................... $(11,280) $(18,320) $(29,600)
Change in net interest income ............................. $ 1,085 $ (3,462) $ (2,377)
Deposits
Average Deposits(1)
2009 Fiscal 2008 Fiscal 2007
One Month Ended
December 31, 2008
Average
Amount(1)
Average
Rate
Average
Amount(1)
Average
Rate
Average
Amount(1)
Average
Rate
Average
Amount(1)
Average
Rate
(in millions) (%) (in millions) (%) (in millions) (%) (in millions) (%)
Interest bearing deposits(2):
Savings deposits ...... $52,397 0.9% $33,756 2.0% $17,732 3.8% $38,911 0.8%
Time deposits ........ 8,883 3.7% 1,555 4.0% 4,280 4.9% 8,308 3.9%
Total ........... $61,280 1.3% $35,311 2.1% $22,012 4.0% $47,219 1.3%
(1) Average balances are calculated based upon weekly balances for 2009 and month-end balances for fiscal 2008, fiscal 2007, and the one
month ended December 31, 2008.
(2) Deposits are primarily located in U.S. offices.
Ratios
2009 Fiscal 2008 Fiscal 2007
One Month Ended
December 31, 2008
Net income to average assets ........................... 0.2% 0.2% 0.3% N/M
Return on common equity(1) ........................... N/M 4.5% 8.4% N/M
Return on total equity(2) ............................... 2.8% 4.6% 8.8% N/M
Dividend payout ratio(3) .............................. N/M 77.7% 37.2% N/M
Total average common equity to average assets ............ 4.6% 3.3% 2.9% 4.6%
Total average equity to average assets .................... 6.5% 3.7% 3.0% 7.5%
N/M—Not meaningful
(1) Based on net income applicable to common shareholders as a percentage of average common equity.
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