Morgan Stanley 2010 Annual Report Download - page 158

MORGAN STANLEY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
Significant
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Counterparty
and Cash
Collateral
Netting
Balance at
December 31,
2010
(dollars in millions)
Commercial paper and other short-term
borrowings ........................ — 1,797 2 — 1,799
Financial instruments sold, not yet
purchased:
U.S. government and agency securities:
U.S. Treasury securities ........ 25,225 — — — 25,225
U.S. agency securities .......... 2,656 67 — — 2,723
Total U.S. government and
agency securities ........ 27,881 67 — — 27,948
Other sovereign government
obligations .................... 19,708 2,542 — — 22,250
Corporate and other debt:
State and municipal securities . . . — 11 — — 11
Asset-backed securities ......... — 12 — — 12
Corporate bonds .............. — 9,100 44 — 9,144
Collateralized debt obligations . . . — 2 — — 2
Unfunded lending
commitments .............. — 464 263 — 727
Other debt ................... — 828 194 — 1,022
Total corporate and other
debt .................. — 10,417 501 — 10,918
Corporate equities(1) .............. 19,696 127 15 — 19,838
Derivative and other contracts:
Interest rate contracts .......... 3,883 591,378 542 — 595,803
Credit contracts ............... — 87,904 7,722 — 95,626
Foreign exchange contracts ..... 2 64,301 385 — 64,688
Equity contracts .............. 2,098 42,242 1,820 — 46,160
Commodity contracts .......... 5,871 58,885 972 — 65,728
Other ....................... — 520 1,048 — 1,568
Netting(2) ................... (8,551) (761,939) (7,168) (44,113) (821,771)
Total derivative and other
contracts .............. 3,303 83,291 5,321 (44,113) 47,802
Total financial instruments sold,
not yet purchased ........... 70,588 96,444 5,837 (44,113) 128,756
Obligation to return securities received as
collateral .......................... 20,272 890 1 — 21,163
Securities sold under agreements to
repurchase ......................... — 498 351 — 849
Other secured financings ............... — 7,474 1,016 — 8,490
Long-term borrowings ................. — 41,393 1,316 — 42,709
(1) The Company holds or sells short for trading purposes equity securities issued by entities in diverse industries and of varying size.
(2) For positions with the same counterparty that cross over the levels of the fair value hierarchy, both counterparty netting and cash
collateral netting are included in the column titled “Counterparty and Cash Collateral Netting.” For contracts with the same counterparty,
counterparty netting among positions classified within the same level is included within that level. For further information on derivative
instruments and hedging activities, see Note 12.
(3) In June 2010, the Company voluntarily contributed $25 million to certain other investments in funds that it manages in connection with
upcoming rule changes regarding net asset value disclosures for money market funds. Based on current liquidity and fund performance,
the Company does not expect to provide additional voluntary support to non-consolidated funds that it manages.
(4) Amount represents mortgage servicing rights (“MSR”) accounted for at fair value. See Note 7 for further information on MSRs.
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