Morgan Stanley 2014 Annual Report Download - page 126

The Company’s future cash payments associated with certain of its obligations at December 31, 2014 are
summarized below:
Payments Due in:
At December 31, 2014 2015 2016-2017 2018-2019 Thereafter Total
(dollars in millions)
Long-term borrowings(1) ......................... $20,740 $44,643 $35,250 $52,139 $152,772
Other secured financings(1) ....................... 3,341 5,586 980 439 10,346
Contractual interest payments(2) ................... 5,384 8,615 5,759 21,025 40,783
Time deposits(3) ................................ 1,386 — — — 1,386
Operating leases—premises(4) ..................... 599 1,159 847 2,588 5,193
Operating leases—equipment(4) ................... 204 200 145 61 610
Purchase obligations(5) .......................... 546 615 244 70 1,475
Total(6) ................................... $32,200 $60,818 $43,225 $76,322 $212,565
(1) See Note 11 to the Company’s consolidated financial statements in Item 8. Amounts presented for Other secured financings are
financings with original maturities greater than one year.
(2) Amounts represent estimated future contractual interest payments related to unsecured long-term borrowings based on applicable interest
rates at December 31, 2014. Amounts include stated coupon rates, if any, on structured or index-linked notes.
(3) Amounts represent contractual principal and interest payments related to time deposits primarily held at the Company’s U.S. Subsidiary
Banks.
(4) See Note 13 to the Company’s consolidated financial statements in Item 8.
(5) Purchase obligations for goods and services include payments for, among other things, consulting, outsourcing, computer and
telecommunications maintenance agreements, and certain transmission, transportation and storage contracts related to the commodities
business. Purchase obligations at December 31, 2014 reflect the minimum contractual obligation under legally enforceable contracts with
contract terms that are both fixed and determinable. These amounts exclude obligations for goods and services that already have been
incurred and are reflected on the Company’s consolidated statement of financial condition.
(6) Amounts exclude unrecognized tax benefits, as the timing and amount of future cash payments are not determinable at this time (see
Note 20 to the Company’s consolidated financial statements in Item 8 for further information).
Effects of Inflation and Changes in Foreign Exchange Rates.
To the extent that an increased inflation outlook results in rising interest rates or has negative impacts on the
valuation of financial instruments that exceed the impact on the value of the Company’s liabilities, it may
adversely affect the Company’s financial position and profitability. Rising inflation may also result in increases
in the Company’s non-interest expenses that may not be readily recoverable in higher prices of services offered.
A significant portion of the Company’s business is conducted in currencies other than the U.S. dollar, and
changes in foreign exchange rates relative to the U.S. dollar, therefore, can affect the value of non-U.S. dollar net
assets, revenues and expenses. Potential exposures as a result of these fluctuations in currencies are closely
monitored, and, where cost-justified, strategies are adopted that are designed to reduce the impact of these
fluctuations on the Company’s financial performance. These strategies may include the financing of non-U.S.
dollar assets with direct or swap-based borrowings in the same currency and the use of currency forward
contracts or the spot market in various hedging transactions related to net assets, revenues, expenses or cash
flows.
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