Morgan Stanley 2014 Annual Report Download - page 219

MORGAN STANLEY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
liabilities. At December 31, 2014 and December 31, 2013, managed real estate partnerships reflected
nonredeemable noncontrolling interests in the Company’s consolidated financial statements of $240 million and
$1,771 million, respectively. The Company also had additional maximum exposure to losses of approximately
$105 million and $101 million at December 31, 2014 and December 31, 2013, respectively. This additional
exposure relates primarily to certain derivatives (e.g., instead of purchasing senior securities, the Company has
sold credit protection to synthetic CDOs through credit derivatives that are typically related to the most senior
tranche of the CDO) and commitments, guarantees and other forms of involvement.
The following tables present information about certain non-consolidated VIEs in which the Company had
variable interests at December 31, 2014 and December 31, 2013. The tables include all VIEs in which the
Company has determined that its maximum exposure to loss is greater than specific thresholds or meets certain
other criteria. Most of the VIEs included in the tables below are sponsored by unrelated parties; the Company’s
involvement generally is the result of the Company’s secondary market-making activities and securities held in
its AFS securities portfolio (see Note 5):
At December 31, 2014
Mortgage- and
Asset-Backed
Securitizations
Collateralized
Debt
Obligations
Municipal
Tender
Option
Bonds
Other
Structured
Financings Other
(dollars in millions)
VIE assets that the Company does not consolidate
(unpaid principal balance)(1) .................. $174,548 $26,567 $3,449 $2,040 $19,237
Maximum exposure to loss:
Debt and equity interests(2) ................. $ 15,028 $ 3,062 $ 13 $1,158 $ 3,884
Derivative and other contracts ............... 15 2 2,212 — 164
Commitments, guarantees and other .......... 1,054 432 — 617 429
Total maximum exposure to loss ......... $ 16,097 $ 3,496 $2,225 $1,775 $ 4,477
Carrying value of exposure to loss—Assets:
Debt and equity interests(2) ................. $ 15,028 $ 3,062 $ 13 $ 741 $ 3,884
Derivative and other contracts ............... 15 2 4 — 74
Total carrying value of exposure to loss—
Assets ............................ $ 15,043 $ 3,064 $ 17 $ 741 $ 3,958
Carrying value of exposure to loss—Liabilities:
Derivative and other contracts ............... $ — $ — $ — $ — $ 57
Commitments, guarantees and other .......... — — — 5 —
Total carrying value of exposure to loss—
Liabilities ......................... $ — $ — $ — $ 5 $ 57
(1) Mortgage- and asset-backed securitizations include VIE assets as follows: $30.8 billion of residential mortgages; $71.9 billion of
commercial mortgages; $20.6 billion of U.S. agency collateralized mortgage obligations; and $51.2 billion of other consumer or
commercial loans.
(2) Mortgage- and asset-backed securitizations include VIE debt and equity interests as follows: $1.9 billion of residential mortgages; $2.4
billion of commercial mortgages; $4.0 billion of U.S. agency collateralized mortgage obligations; and $6.8 billion of other consumer or
commercial loans.
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