Morgan Stanley 2015 Annual Report Download - page 247

MORGAN STANLEY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The Company periodically evaluates the likelihood of assessments in each taxing jurisdiction resulting from the expiration of
the applicable statute of limitations or new information regarding the status of current and subsequent years’ examinations.
As part of the Company’s periodic review, federal and state unrecognized tax benefits were released or remeasured. As a
result of this remeasurement, the income tax provision included net discrete tax benefits of $609 million and $161 million in
2014 and 2013, respectively. Additionally, due to new information regarding the status of the IRS field examinations referred
to above, the 2014 total amount of unrecognized tax benefits decreased by $2.0 billion.
It is reasonably possible that significant changes in the gross balance of unrecognized tax benefits may occur within the next
12 months related to certain tax authority examinations referred to above. At this time, however, it is not possible to
reasonably estimate the expected change to the total amount of unrecognized tax benefits and the impact on the Company’s
effective tax rate over the next 12 months.
Earliest Tax Year Subject to Examination in Major Tax Jurisdictions.
Jurisdiction Tax Year
U.S. ...................................................................................... 1999
New York State and New York City ............................................................ 2007
Hong Kong ................................................................................ 2009
U.K. ..................................................................................... 2010
Japan ..................................................................................... 2013
Income from Continuing Operations before Income Tax Expense (Benefit).
2015 2014 2013
(dollars in millions)
U.S. ................................................................... $ 5,360 $ 1,805 $ 1,738
Non-U.S.(1) ............................................................ 3,135 1,786 2,820
$ 8,495 $ 3,591 $ 4,558
(1) Non-U.S. income is defined as income generated from operations located outside the U.S.
21. Segment and Geographic Information.
Segment Information.
The Company structures its segments primarily based upon the nature of the financial products and services provided to
customers and its management organization. The Company provides a wide range of financial products and services to its
customers in each of the business segments: Institutional Securities, Wealth Management and Investment Management. For a
further discussion of the business segments, see Note 1.
Revenues and expenses directly associated with each respective business segment are included in determining its operating
results. Other revenues and expenses that are not directly attributable to a particular business segment are allocated based
upon the Company’s allocation methodologies, generally based on each business segment’s respective net revenues, non-
interest expenses or other relevant measures.
As a result of revenues and expenses from transactions with other operating segments being treated as transactions with
external parties, the Company includes an Intersegment Eliminations category to reconcile the business segment results to
the consolidated results.
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