Morgan Stanley 2009 Annual Report Download - page 49

Real Estate Investments. The Company recorded losses in the following business segments related to real
estate investments. These amounts exclude investments that benefit certain deferred compensation and employee
co-investment plans.
2009
Fiscal
2008
One Month
Ended
December 31,
2008
(dollars in billions)
Institutional Securities(1) ............................................... $(0.8) $(1.2) $(0.1)
Asset Management:
Continuing operations(2) ........................................... (0.5) (0.6) —
Discontinued operations(3) ......................................... (0.6) (0.5) —
Total Asset Management ....................................... (1.1) (1.1) —
Total ................................................... $(1.9) $(2.3) $(0.1)
(1) Losses related to net realized and unrealized losses from the Company’s limited partnership investments in real estate funds and are
reflected in Principal transactions net investment revenues in the consolidated statements of income.
(2) Losses related to net realized and unrealized losses from real estate investments in the Company’s merchant banking business and are
reflected in Principal transactions net investment revenues in the consolidated statements of income. In fiscal 2008, losses included
writedowns on its investment in Crescent of approximately $250 million prior to the Company consolidating its assets and liabilities.
These writedowns are reflected in Principal transactions—investments in the consolidated statements of income.
(3) Amounts related to Crescent.
See “Other Matters—Real Estate” herein for further information.
Corporate Lending.The Company recorded the following amounts primarily associated with loans and lending
commitments carried at fair value within the Institutional Securities business segment:
2009(1)
Fiscal
2008(1)
One Month
Ended
December 31,
2008(1)
(dollars in billions)
Gains (losses) on loans and lending commitments ......................... $4.0 $(6.3) $(0.5)
(Losses) gains on hedges ............................................. (3.2) 3.0 (0.1)
Total gains (losses) .............................................. $0.8 $(3.3) $(0.6)
(1) Amounts include realized and unrealized gains (losses).
Mortgage-Related Trading. The Company recognized mortgage-related trading losses relating to commercial
mortgage-backed securities, commercial whole loan positions, U.S. subprime mortgage proprietary trading
exposures and non-subprime residential mortgages of $0.6 billion, $2.6 billion and $0.1 billion in 2009, fiscal
2008 and the one month ended December 31, 2008, respectively.
Sale of Bankruptcy Claims.In 2009, the Company recorded a gain of $319 million related to the sale of
undivided participating interests in a portion of the Company’s claims against a derivative counterparty that filed
for bankruptcy protection. For further information, see “Other Matters—Sale of Bankruptcy Claims” herein.
Monoline Insurers. Monoline insurers (“Monolines”) provide credit enhancement to capital markets
transactions. 2009 included losses of $231 million related to Monoline credit exposures as compared with losses
of $1.7 billion in fiscal 2008 and losses of $203 million in the one month ended December 31, 2008. The current
credit environment continued to affect the capacity of such financial guarantors. The Company’s direct exposure
to Monolines is limited to bonds that are insured by Monolines and to derivative contracts with a Monoline as
counterparty (principally MBIA Inc.). The Company’s exposure to Monolines as of December 31, 2009 consisted
primarily of asset-backed securities bonds of approximately $458 million in the portfolio of the Company’s
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