Morgan Stanley 2014 Annual Report Download - page 59

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of
Operations.
Introduction.
Morgan Stanley, a financial holding company, is a global financial services firm that maintains significant
market positions in each of its business segments—Institutional Securities, Wealth Management and Investment
Management. Unless the context otherwise requires, the terms “Morgan Stanley” or the “Company” mean
Morgan Stanley (the “Parent”) together with its consolidated subsidiaries.
A brief summary of the activities of each of the Company’s business segments is as follows:
Institutional Securities provides financial advisory and capital-raising services, including: advice on mergers
and acquisitions, restructurings, real estate and project finance; corporate lending; sales, trading, financing
and market-making activities in equity and fixed income securities and related products, including foreign
exchange and commodities; and investment activities.
Wealth Management provides brokerage and investment advisory services to individual investors and small-
to-medium sized businesses and institutions covering various investment alternatives; financial and wealth
planning services; annuity and other insurance products; credit and other lending products; cash
management services; and retirement services; and engages in fixed income trading, which primarily
facilitates clients’ trading or investments in such securities.
Investment Management provides a broad array of investment strategies that span the risk/return spectrum
across geographies, asset classes, and public and private markets to a diverse group of clients across the
institutional and intermediary channels as well as high net worth clients.
The results of operations in the past have been, and in the future may continue to be, materially affected by many
factors, including: the effect of economic and political conditions and geopolitical events; the effect of market
conditions, particularly in the global equity, fixed income, currency, credit and commodities markets, including
corporate and mortgage (commercial and residential) lending and commercial real estate markets and energy
markets; the impact of current, pending and future legislation (including the Dodd-Frank Wall Street Reform and
Consumer Protection Act (the “Dodd-Frank Act”)), regulation (including capital, leverage and liquidity
requirements), policies (including fiscal and monetary), and legal and regulatory actions in the United States of
America (“U.S.”) and worldwide; the level and volatility of equity, fixed income and commodity prices
(including oil prices), interest rates, currency values and other market indices; the availability and cost of both
credit and capital as well as the credit ratings assigned to the Company’s unsecured short-term and long-term
debt; investor, consumer and business sentiment and confidence in the financial markets; the performance of the
Company’s acquisitions, divestitures, joint ventures, strategic alliances or other strategic arrangements; the
Company’s reputation and the general perception of the financial services industry; inflation, natural disasters,
pandemics and acts of war or terrorism; the actions and initiatives of current and potential competitors as well as
governments, regulators and self-regulatory organizations; the effectiveness of the Company’s risk management
policies; technological changes and risks and cybersecurity risks (including cyber attacks and business continuity
risks); or a combination of these or other factors. In addition, legislative, legal and regulatory developments
related to the Company’s businesses are likely to increase costs, thereby affecting results of operations. These
factors also may have an adverse impact on the Company’s ability to achieve its strategic objectives. For a
further discussion of these and other important factors that could affect the Company’s business, see “Business—
Competition” and “Business—Supervision and Regulation” in Part I, Item 1, “Risk Factors” in Part I, Item 1A
and “Liquidity and Capital Resources—Regulatory Requirements” herein.
The discussion of the Company’s results of operations below may contain forward-looking statements. These
statements, which reflect management’s beliefs and expectations, are subject to risks and uncertainties that may cause
actual results to differ materially. For a discussion of the risks and uncertainties that may affect the Company’s future
results, see “Forward-Looking Statements” immediately preceding Part I, Item 1, “Business—Competition” and
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