Morgan Stanley 2014 Annual Report Download - page 303

MORGAN STANLEY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
24. Quarterly Results (unaudited).
2014 Quarter 2013 Quarter
First Second(1) Third(2) Fourth(3) First Second Third Fourth(4)
(dollars in millions, except per share data)
Total non-interest revenues ......................... $8,688 $8,341 $8,350 $ 7,161 $7,990 $8,316 $7,846 $7,563
Net interest ..................................... 308 267 557 603 182 204 110 282
Net revenues .................................... 8,996 8,608 8,907 7,764 8,172 8,520 7,956 7,845
Total non-interest expenses ......................... 6,626 6,676 6,687 10,695 6,572 6,725 6,591 8,047
Income (loss) from continuing operations before income
taxes ........................................ 2,370 1,932 2,220 (2,931) 1,600 1,795 1,365 (202)
Provision for (benefit from) income taxes ............. 785 15 463 (1,353) 350 575 363 (386)
Income (loss) from continuing operations ............. 1,585 1,917 1,757 (1,578) 1,250 1,220 1,002 184
Discontinued operations(5):
Income (loss) from discontinued operations ........ (2) (1) (8) (8) (30) (42) 14 (14)
Provision for (benefit from) income taxes ......... (1) (1) (3) — (11) (13) (2) (3)
Net income (loss) from discontinued operations ........ (1) — (5) (8) (19) (29) 16 (11)
Net income (loss) ................................ 1,584 1,917 1,752 (1,586) 1,231 1,191 1,018 173
Net income applicable to redeemable noncontrolling
interests ...................................... — — — — 122 100 — —
Net income applicable to nonredeemable noncontrolling
interests ...................................... 79 18 59 44 147 111 112 89
Net income (loss) applicable to Morgan Stanley ........ $1,505 $1,899 $1,693 $ (1,630) $ 962 $ 980 $ 906 $ 84
Preferred stock dividends and other .................. 56 79 64 119 26 177 26 48
Earnings (loss) applicable to Morgan Stanley common
shareholders .................................. $1,449 $1,820 $1,629 $ (1,749) $ 936 $ 803 $ 880 $ 36
Earnings (loss) per basic common share(6):
Income (loss) from continuing operations ......... $ 0.75 $ 0.94 $ 0.85 $ (0.91) $ 0.50 $ 0.44 $ 0.45 $ 0.02
Net income (loss) from discontinued operations .... — — — — (0.01) (0.02) 0.01 —
Earnings (loss) per basic common share ....... $ 0.75 $ 0.94 $ 0.85 $ (0.91) $ 0.49 $ 0.42 $ 0.46 $ 0.02
Earnings (loss) per diluted common share(6):
Income (loss) from continuing operations ......... $ 0.74 $ 0.92 $ 0.83 $ (0.91) $ 0.49 $ 0.43 $ 0.44 $ 0.02
Net income (loss) from discontinued operations .... — — — — (0.01) (0.02) 0.01 —
Earnings (loss) per diluted common share ..... $ 0.74 $ 0.92 $ 0.83 $ (0.91) $ 0.48 $ 0.41 $ 0.45 $ 0.02
Dividends declared per common share(7) ............. $ 0.05 $ 0.10 $ 0.10 $ 0.10 $ 0.05 $ 0.05 $ 0.05 $ 0.05
Book value per common share ...................... $32.38 $33.46 $34.16 $ 33.25 $31.21 $31.48 $32.13 $32.24
(1) The second quarter of 2014 included a discrete net tax benefit of $609 million, principally associated with remeasurement of reserves and
related interest due to new information regarding the status of a multi-year tax authority examination (see Note 20).
(2) The third quarter of 2014 included a discrete net tax benefit of $237 million, primarily associated with the repatriation of non-U.S.
earnings at a cost lower than originally estimated (see Note 20). The third quarter of 2014 also included a gain on sale of a retail property
space of $141 million, which was included within Other revenues in the Company’s consolidated statement of income and a gain on sale
of its ownership stake in TransMontaigne Inc.
(3) The fourth quarter of 2014 included: an increase of legal reserves of approximately $3.1 billion (see Notes 13 and 25); a discrete net tax
benefit of $1,380 million recognized in Provision for (benefit from) income taxes primarily due to the release of a deferred tax liability as
a result of an internal Wealth Management business segment restructuring to simplify the Company’s legal entity organization, partially
offset by approximately $900 million of tax provision due to the impact of the non-deductible expenses related to litigation and
regulatory matters (see Note 20); compensation expense deferral adjustments of $1.1 billion (see Note 18); and a charge of
approximately $468 million related to the implementation of FVA (see Note 2), which was reflected as a reduction of the Company’s
Institutional Securities business segment Trading revenues.
(4) The fourth quarter of 2013 included a discrete tax benefit of $192 million, consisting of $100 million related to remeasurement of
reserves and related interest and $92 million related to the establishment of a previously unrecognized deferred tax asset associated with
the reorganization of certain non-U.S. legal entities (see Note 20). The fourth quarter of 2013 also included litigation expenses of
$1.4 billion related to settlements and reserve additions (see Note 13).
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