Morgan Stanley 2015 Annual Report Download - page 159

MORGAN STANLEY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Beginning
Balance at
December 31,
2012
Total
Realized
and
Unrealized
Gains
(Losses)(1)
Purchases
(2) Sales Issuances Settlements Net Transfers
Ending
Balance at
December 31,
2013
Unrealized
Gains (Losses)
for Level 3
Assets/
Liabilities
Outstanding at
December 31,
2013
(dollars in millions)
Assets at Fair Value
Trading assets:
Other sovereign government obligations .....$ 6 $ (18) $ 41 $ (7) $ — $ — $ 5 $ 27 $ (18)
Corporate and other debt:
Residential mortgage-backed securities . . . 45 25 54 (51) — — (26) 47 (6)
Commercial mortgage-backed securities . . 232 13 57 (187) — (7) — 108 4
Asset-backed securities ................ 109 — 6 (12) — — — 103 —
Corporate bonds ...................... 660 (20) 324 (371) — (19) (52) 522 (55)
Collateralized debt and loan obligations . . . 1,951 363 742 (960) — (626) (2) 1,468 131
Loans and lending commitments ......... 4,694 (130) 3,744 (448) — (3,096) 365 5,129 (199)
Other debt .......................... 45 (1) 20 (36) — — (1) 27 (2)
Total corporate and other debt ........ 7,736 250 4,947 (2,065) — (3,748) 284 7,404 (127)
Corporate equities ....................... 288 (63) 113 (127) — — (21) 190 (72)
Net derivative and other contracts(3):
Interest rate contracts .................. (82) 28 6 — (34) 135 60 113 36
Credit contracts ...................... 1,822 (1,674) 266 — (703) (295) 437 (147) (1,723)
Foreign exchange contracts ............. (359) 130 — — — 281 16 68 124
Equity contracts ...................... (1,144) 463 170 (74) (318) (11) 83 (831) 61
Commodity contracts .................. 709 200 41 — (36) (29) (5) 880 174
Other .............................. (7) (6) — — — 9 — (4) (7)
Total net derivative and other
contracts ...................... 939 (859) 483 (74) (1,091) 90 591 79 (1,335)
Investments: ...........................
Principal investments .................. 2,833 110 111 (445) — — (449) 2,160 3
Other .............................. 486 76 13 (36) — — (1) 538 77
Intangible assets ........................ 7 9 — — — (8) — 8 3
Liabilities at Fair Value
Short-term borrowings ......................$ 19 $ — $ — $ — $ — $ (1) $ (17) $ 1 $ —
Trading liabilities:
Corporate and other debt:
Residential mortgage-backed securities . . . 4 4 — — — — — — 4
Corporate bonds ...................... 177 28 (64) 43 — — (106) 22 28
Lending commitments ................. 46 44 — — — — — 2 44
Other debt .......................... 49 2 — 5 — (6) 2 48 2
Total corporate and other debt ........ 276 78 (64) 48 — (6) (104) 72 78
Corporate equities ....................... 5 1 (26) 29 — — 1 8 3
Securities sold under agreements to repurchase . . . 151 (3) — — — — — 154 (3)
Other secured financings ..................... 406 11 — — 19 (136) — 278 4
Long-term borrowings ...................... 2,789 (162) — — 877 (606) (1,335) 1,887 (138)
(1) Total realized and unrealized gains (losses) are primarily included in Trading revenues in the consolidated statements of income except for Trading assets—
Investments, which is included in Investments revenues.
(2) Loan originations are included in purchases.
(3) Net derivative and other contracts represent Trading assets—Derivative and other contracts, net of Trading liabilities—Derivative and other contracts. For
further information on derivative instruments and hedging activities, see Note 4.
(4) Net liability Level 3 derivative equity contracts increased by $785 million to correct the fair value level assigned to these contracts at December 31, 2014. The
total amount of derivative equity contracts remained unchanged at December 31, 2014.
(5) During 2014, the Company incurred a charge of approximately $468 million related to the implementation of FVA, which was recognized in Trading revenues.
For further information on the implementation of FVA, see Note 2.
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