Morgan Stanley 2014 Annual Report Download - page 271

MORGAN STANLEY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
functional currency subsidiaries. Increases or decreases in the value of the Company’s net foreign investments
generally are tax deferred for U.S. purposes, but the related hedge gains and losses are taxable currently. The
Company attempts to protect its net book value from the effects of fluctuations in currency exchange rates on its
net investments in non-U.S. dollar subsidiaries by selling the appropriate non-U.S. dollar currency in the forward
market. Under some circumstances, however, the Company may elect not to hedge its net investments in certain
foreign operations due to market conditions, including the availability of various currency contracts at acceptable
costs. Information at December 31, 2014 and December 31, 2013 relating to the effects on cumulative foreign
currency translation adjustments resulting from translation of foreign currency financial statements and from
gains and losses from hedges of the Company’s net investments in non-U.S. dollar functional currency
subsidiaries is summarized below:
At
December 31,
2014
At
December 31,
2013
(dollars in millions)
Net investments in non-U.S. dollar functional currency subsidiaries subject to
hedges ............................................................ $9,110 $11,708
Cumulative foreign currency translation adjustments resulting from net investments
in subsidiaries with a non-U.S. dollar functional currency .................... $(1,262) $ (259)
Cumulative foreign currency translation adjustments resulting from realized or
unrealized losses on hedges, net of tax ................................... 599 (7)
Total cumulative foreign currency translation adjustments, net of tax ............. $ (663) $ (266)
Nonredeemable Noncontrolling Interests.
Nonredeemable noncontrolling interests were $1,204 million and $3,109 million at December 31, 2014 and
December 31, 2013, respectively. The reduction in nonredeemable noncontrolling interests at December 31, 2014
primarily reflects a decrease of $1.6 billion related to the deconsolidation in the second quarter of 2014 of certain
legal entities associated with a real estate fund sponsored by the Company and distributions of $166 million
related to MSMS and $350 million related to TransMontaigne Inc., which was sold on July 1, 2014.
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