Morgan Stanley 2010 Annual Report Download - page 186

MORGAN STANLEY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Net gains at the time of securitization were not material in 2010, fiscal 2008 and in the one month ended
December 31, 2008. Net gains at the time of securitization were $104 million in 2009.
During 2010, 2009 and fiscal 2008, the Company received proceeds from new securitization transactions of
$25.6 billion, $8.6 billion and $7.1 billion, respectively. The Company did not receive any proceeds from new
securitization transactions during the one month ended December 31, 2008. During 2010, 2009, fiscal 2008 and
the one month ended December 31, 2008, the Company received proceeds from cash flows from retained
interests in securitization transactions of $7.1 billion, $2.1 billion, $3.1 billion and $153 million, respectively.
The Company provides representations and warranties that certain assets transferred in securitization transactions
conform to specific guidelines (see Note 13).
Failed Sales.
In order to be treated as a sale of assets for accounting purposes, a transaction must meet all of the criteria
stipulated in the accounting guidance for the transfer of financial assets. If the transfer fails to meet these criteria,
that transfer is treated as a failed sale. In such case, the Company continues to recognize the assets in Financial
instruments owned, and the Company recognizes the associated liabilities in Other secured financings in the
consolidated statements of financial condition.
The assets transferred to many unconsolidated VIEs in transactions accounted for as failed sales cannot be
removed unilaterally by the Company and are not generally available to the Company. The related liabilities
issued by many unconsolidated VIEs are non-recourse to the Company. In certain other failed sale transactions,
the Company has the unilateral right to remove assets or provide additional recourse through derivatives such as
total return swaps, guarantees or other forms of involvement.
The following tables present information about transfers of assets treated by the Company as secured financings:
At December 31, 2010
Commercial
Mortgage
Loans
Credit-
Linked
Notes
Equity-
Linked
Transactions Other
(dollars in millions)
Assets
Carrying value ............................................ $128 $784 $1,618 $ 62
Other secured financings
Carrying value ............................................ $124 $781 $1,583 $ 61
At December 31, 2009
Residential
Mortgage
Loans
Commercial
Mortgage
Loans
Credit-
Linked
Notes Other
(dollars in millions)
Assets
Carrying value ............................................ $151 $291 $1,012 $1,294
Other secured financings
Carrying value ............................................ $138 $269 $ 978 $1,294
Mortgage Servicing Activities.
Mortgage Servicing Rights. The Company may retain servicing rights to certain mortgage loans that are sold
through its securitization activities. These transactions create an asset referred to as MSRs, which totaled
180