Morgan Stanley 2014 Annual Report Download - page 267

MORGAN STANLEY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Other Regulated Subsidiaries. Certain other U.S. and non-U.S. subsidiaries are subject to various securities,
commodities and banking regulations, and capital adequacy requirements promulgated by the regulatory and
exchange authorities of the countries in which they operate. These subsidiaries have consistently operated with
capital in excess of their local capital adequacy requirements.
Morgan Stanley Derivative Products Inc. (“MSDP”), a derivative products subsidiary rated A3 by Moody’s and
AA- by S&P, maintains certain operating restrictions that have been reviewed by Moody’s and S&P. MSDP is
operated such that creditors of the Company should not expect to have any claims on the assets of MSDP, unless
and until the obligations to its own creditors are satisfied in full. Creditors of MSDP should not expect to have
any claims on the assets of the Company or any of its affiliates, other than the respective assets of MSDP.
The regulatory capital requirements referred to above, and certain covenants contained in various agreements
governing indebtedness of the Company, may restrict the Company’s ability to withdraw capital from its
subsidiaries. At December 31, 2014 and December 31, 2013, approximately $31.8 billion and $21.9 billion,
respectively, of net assets of consolidated subsidiaries may be restricted as to the payment of cash dividends and
advances to the parent company.
15. Total Equity
Morgan Stanley Shareholders’ Equity.
Common Stock. Changes in shares of common stock outstanding for 2014 and 2013 were as follows (share
data in millions):
2014 2013
Shares outstanding at beginning of period ........................................... 1,945 1,974
Treasury stock purchases(1) ...................................................... (46) (27)
Other(2) ...................................................................... 52 (2)
Shares outstanding at end of period ................................................ 1,951 1,945
(1) Treasury stock purchases include repurchases of common stock for employee tax withholding.
(2) Other includes net shares issued to and forfeited from Employee stock trusts and issued for RSU conversions.
Treasury Shares. At December 31, 2014, the Company had approximately $0.3 billion remaining under its
current share repurchase program. The share repurchase program is for capital management purposes and
considers, among other things, business segment capital needs as well as equity-based compensation and benefit
plan requirements. Share repurchases under the Company’s existing authorized program will be exercised from
time to time at prices the Company deems appropriate subject to various factors, including the Company’s capital
position and market conditions. The share repurchases may be effected through open market purchases or
privately negotiated transactions, including through Rule 10b5-1 plans, and may be suspended at any time. Share
repurchases by the Company are subject to regulatory approval (see “Market for Registrant’s Common Equity,
Related Stockholder Matters and Issuer Purchases of Equity Securities” in Part II, Item 5).
In March 2014, the Company received no objection from the Federal Reserve to the Company’s 2014 capital
plan, which included a share repurchase of up to $1 billion of the Company’s outstanding common stock
beginning in the second quarter of 2014 through the end of the first quarter of 2015 as well as an increase in the
Company’s quarterly common stock dividend to $0.10 per share from $0.05 per share, beginning with the
dividend declared on April 17, 2014. The cash dividends declared on the Company’s outstanding preferred stock
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