Morgan Stanley 2010 Annual Report Download - page 160

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,
2009
(dollars in millions)
Securities received as collateral ............ 12,778 855 23 — 13,656
Intangible assets(3) ...................... — — 137 — 137
Liabilities
Deposits ............................... $ — $ 4,943 $ 24 $ — $ 4,967
Commercial paper and other short-term
borrowings .......................... — 791 — — 791
Financial instruments sold, not yet purchased:
U.S. government and agency securities:
U.S. Treasury securities .......... 17,907 1 — — 17,908
U.S. agency securities ............ 2,573 22 — — 2,595
Total U.S. government and
agency securities .......... 20,480 23 — — 20,503
Other sovereign government
obligations ....................... 16,747 1,497 — — 18,244
Corporate and other debt:
State and municipal securities ...... — 9 — — 9
Commercial mortgage-backed
securities .................... — 8 — — 8
Asset-backed securities ........... — 63 4 — 67
Corporate bonds ................ — 5,812 29 — 5,841
Collateralized debt obligations ..... — — 3 — 3
Unfunded lending commitments .... — 732 252 — 984
Other debt ..................... — 483 431 — 914
Total corporate and other
debt .................... — 7,107 719 — 7,826
Corporate equities(1) ................. 18,125 4,472 4 — 22,601
Derivative and other contracts:
Interest rate contracts ............ 3,255 595,416 795 — 599,466
Credit contracts ................. — 112,136 13,098 — 125,234
Foreign exchange contracts ........ 7 51,266 201 — 51,474
Equity contracts ................. 2,295 45,583 1,320 — 49,198
Commodity contracts ............ 7,343 55,038 1,334 — 63,715
Other ......................... — 411 711 — 1,122
Netting(2) ..................... (9,517) (791,993) (11,256) (39,234) (852,000)
Total derivative and other
contracts ................ 3,383 67,857 6,203 (39,234) 38,209
Total financial instruments sold, not
yet purchased ................. 58,735 80,956 6,926 (39,234) 107,383
Obligation to return securities received as
collateral ............................ 12,778 855 23 — 13,656
Other secured financings .................. — 6,570 1,532 — 8,102
Long-term borrowings ................... — 30,745 6,865 — 37,610
(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) Amount represents MSRs accounted for at fair value. See Note 7 for further information on MSRs.
The following tables present additional information about Level 3 assets and liabilities measured at fair value on
a recurring basis for 2010, 2009, fiscal 2008 and the one month ended December 31, 2008. Level 3 instruments
may be hedged with instruments classified in Level 1 and Level 2. As a result, the realized and unrealized gains
154