Morgan Stanley 2015 Annual Report Download - page 204

MORGAN STANLEY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
counterparties. The Company is contingently liable for these letters of credit and other financial guarantees, which are
primarily used to provide collateral for securities and commodities borrowed and to satisfy various margin requirements in
lieu of depositing cash or securities with these counterparties.
Investment Activities. The Company enters into commitments associated with its real estate, private equity and principal
investment activities, which include alternative products.
Lending Commitments. Lending commitments represent the notional amount of legally binding obligations to provide
funding to clients for different types of loan transactions. For syndications led by the Company, the lending commitments
accepted by the borrower but not yet closed are net of the amounts agreed to by counterparties that will participate in the
syndication. For syndications that the Company participates in and does not lead, lending commitments accepted by the
borrower but not yet closed include only the amount that the Company expects it will be allocated from the lead, syndicate
bank. Due to the nature of the Company’s obligations under the commitments, these amounts include certain commitments
participated to third parties. See Note 7 for further information.
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, 2015 and settle subsequent to
period-end) that are primarily secured by collateral from U.S. government agency securities and other sovereign government
obligations.
The Company sponsors several non-consolidated investment funds for third-party investors where it 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, 2015, future minimum rental commitments under such
leases (net of subleases, principally on office rentals) were as follows:
Operating Premises Leases.
At December 31,
2015
(dollars in millions)
2016 ................................................................................ $ 612
2017 ................................................................................ 642
2018 ................................................................................ 570
2019 ................................................................................ 485
2020 ................................................................................ 438
Thereafter ............................................................................ 3,127
The total of minimum rental income to be received in the future under non-cancelable operating subleases at December 31,
2015 was $26 million.
Occupancy lease agreements, in addition to base rentals, generally provide for rent and operating expense escalations
resulting from increased assessments for real estate taxes and other charges. Total rent expense, net of sublease rental
income, was $705 million, $715 million and $742 million for the years ended December 31, 2015, 2014 and 2013,
respectively.
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