Morgan Stanley 2014 Annual Report Download - page 254

MORGAN STANLEY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Lending Commitments. Primary lending commitments are those that are originated by the Company, whereas
secondary lending commitments are purchased from third parties in the market. The commitments include
lending commitments that are made to investment grade and non-investment grade companies in connection with
corporate lending and other business activities.
Commitments for Secured Lending Transactions. Secured lending commitments are extended by the Company
to companies and are secured by real estate or other physical assets of the borrower. Loans made under these
arrangements typically are at variable rates and generally provide for over-collateralization based upon the
creditworthiness of the borrower.
Forward Starting Reverse Repurchase Agreements. The Company has entered into forward starting securities
purchased under agreements to resell (agreements that have a trade date at or prior to December 31, 2014 and
settle subsequent to period-end) that are primarily secured by collateral from U.S. government agency securities
and other sovereign government obligations.
Commercial and Residential Mortgage-Related Commitments. The Company enters into forward purchase
contracts involving residential mortgage loans, residential mortgage lending commitments to individuals and
residential home equity lines of credit. In addition, the Company enters into commitments to originate
commercial and residential mortgage loans.
Underwriting Commitments. The Company provides underwriting commitments in connection with its capital
raising sources to a diverse group of corporate and other institutional clients.
Other Lending Commitments. Other commitments generally include commercial lending commitments to small
businesses and commitments related to securities-based lending activities in connection with the Company’s
Wealth Management business segment.
The Company sponsors several non-consolidated investment funds for third-party investors where the Company
typically acts as general partner of, and investment advisor to, these funds and typically commits to invest a
minority of the capital of such funds, with subscribing third-party investors contributing the majority. The
Company’s employees, including its senior officers, as well as the Company’s Directors, may participate on the
same terms and conditions as other investors in certain of these funds that the Company forms primarily for
client investment, except that the Company may waive or lower applicable fees and charges for its
employees. The Company has contractual capital commitments, guarantees, lending facilities and counterparty
arrangements with respect to these investment funds.
Premises and Equipment. The Company has non-cancelable operating leases covering premises and equipment
(excluding commodity operating leases, shown separately). At December 31, 2014, future minimum rental
commitments under such leases (net of subleases, principally on office rentals) were as follows:
Year Ended
Operating
Premises Leases
(dollars in millions)
2015 .............................................................. $ 599
2016 .............................................................. 601
2017 .............................................................. 558
2018 .............................................................. 465
2019 .............................................................. 382
Thereafter .......................................................... 2,588
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