Morgan Stanley 2015 Annual Report Download - page 60

Item 8). In 2014, Other revenues also included gains realized on certain assets sold (see Note 1 to the consolidated
financial statements in Item 8).
Non-interest Expenses.
Non-interest expenses of $16,929 million in 2014 increased 16% from the prior year primarily due to higher legal expenses
and higher compensation expenses.
• Compensation and benefits expenses increased primarily due to the 2014 compensation actions and an increase in
base salaries and fixed allowances partially offset by a decrease in the fair value of deferred compensation plan
referenced investments (see also “Supplemental Financial Information and Disclosures—Discretionary Incentive
Compensation” herein).
• Non-compensation expenses increased primarily due to higher legal expenses related to certain legacy residential
mortgage-backed securities and credit crisis-related matters (see “Supplemental Financial Information and
Disclosures—Legal” herein and “Contingencies—Legal” in Note 12 to the consolidated financial statements in
Item 8).
Income Tax Items.
In 2014, the Company recognized in Provision for (benefit from) income taxes net discrete tax benefits of $839 million. This
included net discrete tax benefits of: $612 million principally associated with remeasurement of reserves and related interest
due to new information regarding the status of a multi-year tax authority examination, and $237 million primarily associated
with the repatriation of non-U.S. earnings at a cost lower than originally estimated. In addition, the Company’s Provision for
(benefit from) income taxes for the business segment was impacted by approximately $900 million of tax provision as a
result of non-deductible expenses related to litigation and regulatory matters.
In 2013, the Company recognized in Provision for (benefit from) income taxes net discrete tax benefits of $407 million. This
included net discrete tax benefits of: $161 million related to the remeasurement of reserves and related interest associated
with new information regarding the status of a multi-year tax authority examination; $92 million related to the establishment
of a previously unrecognized deferred tax asset from a legal entity reorganization; $73 million that is attributable to tax
planning strategies to optimize foreign tax credit utilization as a result of the anticipated repatriation of earnings from certain
non-U.S. subsidiaries; and $81 million due to the retroactive effective date of the American Taxpayer Relief Act of 2012 (the
“Relief Act”). For a further discussion of the Relief Act, see “Supplemental Financial Information and Disclosures—Income
Tax Matters” herein.
Dispositions.
On July 1, 2014, the Company completed the sale of its ownership stake in TransMontaigne Inc., a U.S.-based oil storage,
marketing and transportation company, as well as related physical inventory and the assumption of its obligations under
certain terminal storage contracts, to NGL Energy Partners LP. The gain on sale of $112 million is recorded in Other
revenues.
On March 27, 2014, the Company completed the sale of Canterm Canadian Terminals Inc., a public storage terminal operator
for refined products with two distribution terminals in Canada. The gain on sale was approximately $45 million and is
recorded in Other revenues.
Other Items.
Japanese Securities Joint Venture.
The Company holds a 40% voting interest and Mitsubishi UFJ Financial Group, Inc. (“MUFG”) holds a 60% voting interest
in MUMSS.
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