Total Equity |
Morgan Stanley Shareholders’ Equity Common Stock Rollforward of Common Stock Outstanding | | | | | | | in millions | | 2017 | | 2016 | Shares outstanding at beginning of period | | 1,852 | | 1,920 | Treasury stock purchases1 | | (92) | | (133) | Other2 | | 28 | | 65 | Shares outstanding at end of period | | 1,788 | | 1,852 |
1. The Firm’s Board has authorized the repurchase of the Firm’s outstanding stock under a share repurchase program (“Share Repurchase Program”). In addition to the Firm’s Share Repurchase Program, Treasury stock purchases include repurchases of common stock for employee tax withholding. 2. Other includes net shares issued to and forfeited from Employee stock trusts and issued for RSU conversions. Dividends and Share Repurchases | | | | | | | | | $ in millions | | | | 2017 | | 2016 | Repurchases of common stock | $ | 3,750 | $ | 3,500 |
The Firm’s 2017 Capital Plan (“Capital Plan”) includes the share repurchase of up to $5.0 billion of outstanding common stock for the period beginning July 1, 2017 through June 30, 2018, an increase from $3.5 billion in the 2016 Capital Plan. Additionally, the Capital Plan includes quarterly common stock dividends of up to $0.25 per share. Pursuant to the Share Repurchase Program, the Firm considers, among other things, business segment capital needs, as well as stock-based compensation and benefit plan requirements. Share repurchases under the program will be exercised from time to time at prices the Firm deems appropriate subject to various factors, including the Firm’s capital position and market conditions. The share repurchases may be effected through open market purchases or privately negotiated transactions, including through Rule 10b5-1 plans, and may be suspended at any time. Share repurchases by the Firm are subject to regulatory approval. Employee Stock Trusts The Firm has established Employee stock trusts to provide common stock voting rights to certain employees who hold outstanding RSUs. The assets of the Employee stock trusts are consolidated with those of the Firm, and the value of the stock held in the Employee stock trusts is classified in Morgan Stanley shareholders’ equity and generally accounted for in a manner similar to treasury stock. Preferred Stock | | | | | | | | | $ in millions | 2017 | 2016 | 2015 | Dividends declared | $ | 523 | $ | 468 | $ | 452 |
The Firm is authorized to issue 30 million shares of preferred stock. The preferred stock has a preference over the common stock upon liquidation. The Firm’s preferred stock qualifies as Tier 1 capital in accordance with regulatory capital requirements (see Note 14). Preferred Stock Outstanding | | | | | | | | | | | | | | | $ in millions, except per share data | | Shares Outstanding | | | Carrying Value | | At | Liquidation | At | At | | December 31, | Preference | December 31, | December 31, | | 2017 | per Share | 2017 | 2016 | Series | | | | | | | A | | 44,000 | $ | 25,000 | $ | 1,100 | $ | 1,100 | C1 | | 519,882 | | 1,000 | | 408 | | 408 | E | | 34,500 | | 25,000 | | 862 | | 862 | F | | 34,000 | | 25,000 | | 850 | | 850 | G | | 20,000 | | 25,000 | | 500 | | 500 | H | | 52,000 | | 25,000 | | 1,300 | | 1,300 | I | | 40,000 | | 25,000 | | 1,000 | | 1,000 | J | | 60,000 | | 25,000 | | 1,500 | | 1,500 | K | | 40,000 | | 25,000 | | 1,000 | | — | Total | $ | 8,520 | $ | 7,520 |
1. Series C is composed of the issuance of 1,160,791 shares of Series C Preferred Stock to MUFG for an aggregate purchase price of $911 million, less the redemption of 640,909 shares of Series C Preferred Stock of $503 million, which were converted to common shares of approximately $705 million. Preferred Stock Issuance Description | Series | | Issuance Date | | Preferred Stock Issuance Description | | Redemption Price per Share1 | | Redeemable on or after Date | | Dividend per Share2 | A3 | | July 2006 | | 44,000,000 Depositary Shares, each representing a 1/1,000th of a share of Floating Rate Non-Cumulative Preferred Stock, $0.01 par value | $ | 25,000 | | July 15, 2011 | $ | 255.56 | C3, 4 | | October 13, 2008 | | 10% Perpetual Non-Cumulative Non-Voting Preferred Stock | | 1,100 | | October 15, 2011 | | 25.00 | E5 | | September 30, 2013 | | 34,500,000 Depositary Shares, each representing a 1/1,000th interest in a share of perpetual Fixed-to-Floating Rate Non-Cumulative Preferred Stock, $0.01 par value | | 25,000 | | October 15, 2023 | | 445.31 | F5 | | December 10, 2013 | | 34,000,000 Depositary Shares, each representing a 1/1,000th interest in a share of perpetual Fixed-to-Floating Rate Non-Cumulative Preferred Stock, $0.01 par value | | 25,000 | | January 15, 2024 | | 429.69 | G5 | | April 29, 2014 | | 20,000,000 Depositary Shares, each representing a 1/1,000th interest in a share of perpetual 6.625% Non-Cumulative Preferred Stock, $0.01 par value | | 25,000 | | July 15, 2019 | | 414.06 | H5, 6 | | April 29, 2014 | | 1,300,000 Depositary Shares, each representing a 1/25th interest in a share of perpetual Fixed-to-Floating Rate Non-Cumulative Preferred Stock, $0.01 par value | | 25,000 | | July 15, 2019 | | 681.25 | I5 | | September 18, 2014 | | 40,000,000 Depositary Shares, each representing a 1/1,000th interest in a share of perpetual Fixed-to-Floating Rate Non-Cumulative Preferred Stock, $0.01 par value | | 25,000 | | October 15, 2024 | | 398.44 | J5, 7 | | March 19, 2015 | | 1,500,000 Depositary Shares, each representing a 1/25th interest in a share of perpetual Fixed-to-Floating Rate Non-Cumulative Preferred Stock, $0.01 par value | | 25,000 | | July 15, 2020 | | 693.75 | K5, 8 | | January 2017 | | 40,000,000 Depositary Shares, each representing a 1/1,000th interest in a share of Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series K, $0.01 par value | | 25,000 | | April 15, 2027 | | 365.63 |
1. The redemption price per share for Series A, E, F, G, I and K is equivalent to $25.00 per Depositary Share. The redemption price per share for Series H and J is equivalent to $1,000 per Depositary Share. 2. Quarterly dividends (unless noted otherwise). 3. The preferred stock is redeemable at the Firm’s option, in whole or in part, on or after the redemption date. 4. Dividends on the Series C preferred stock are payable, on a non-cumulative basis, as and if declared by the Board, in cash, at the rate of 10% per annum of the liquidation preference of $1,000 per share. 5. The preferred stock is redeemable at the Firm’s option (i) in whole or in part, from time to time, on any dividend payment date on or after the redemption date or (ii) in whole but not in part at any time within 90 days following a regulatory capital treatment event (as described in the terms of that series). 6. Dividend on Series H preferred stock is payable semiannually until July 15, 2019 and quarterly thereafter. 7. Dividend on Series J preferred stock is payable semiannually until July 15, 2020 and quarterly thereafter. In addition to the redemption price per share, the redemption price includes any declared and unpaid dividends up to, but excluding, the date fixed for redemption, without accumulation of any undeclared dividends. 8. The Series K Preferred Stock offering (net of related issuance costs) in January 2017 resulted in proceeds of approximately $994 million. Comprehensive Income (Loss) | | Accumulated Comprehensive Income (Loss)1 | | | | | | | | | | | | | | | $ in millions | Foreign Currency Translation Adjustments | AFS Securities | Pensions, Postretirement and Other | DVA | Total | December 31, 2014 | $ | (663) | $ | (73) | $ | (512) | $ | — | $ | (1,248) | OCI during the period | | (300) | | (246) | | 138 | | — | | (408) | December 31, 2015 | | (963) | | (319) | | (374) | | — | | (1,656) | Cumulative adjustment for | | | | | | | | | | accounting change | | | | | | | | | | related to DVA2 | | — | | — | | — | | (312) | | (312) | OCI during the period | | (23) | | (269) | | (100) | | (283) | | (675) | December 31, 2016 | | (986) | | (588) | | (474) | | (595) | | (2,643) | OCI during the period | | 219 | | 41 | | (117) | | (560) | | (417) | December 31, 2017 | $ | (767) | $ | (547) | $ | (591) | $ | (1,155) | $ | (3,060) |
- Amounts net of tax and noncontrolling interests.
- In accordance with the early adoption of a provision of the accounting update Recognition and Measurement of Financial Assets and Financial Liabilities, a cumulative catch-up adjustment was recorded as of January 1, 2016 to move the cumulative unrealized DVA amount, net of noncontrolling interests and tax, related to outstanding liabilities under the fair value option election from Retained earnings into AOCI.
Period Changes in OCI Components | | | | | | | | | | | | | 2017 | $ in millions | | Pre-tax Gain (Loss) | | Income Tax Benefit (Provision) | | After-tax Gain (Loss) | | Non-controlling Interests | | Net | Foreign currency translation adjustments | OCI activity | $ | 64 | $ | 187 | $ | 251 | $ | 32 | $ | 219 | Reclassified to | | | | | | | | | | earnings | | — | | — | | — | | — | | — | Net OCI | $ | 64 | $ | 187 | $ | 251 | $ | 32 | $ | 219 | | | | | | | | | | | | Change in net unrealized gains (losses) on AFS securities | OCI activity | $ | 100 | $ | (36) | $ | 64 | $ | — | $ | 64 | Reclassified to | | | | | | | | | | earnings1 | | (35) | | 12 | | (23) | | — | | (23) | Net OCI | $ | 65 | $ | (24) | $ | 41 | $ | — | $ | 41 | | | | | | | | | | | | Pension, postretirement and other | OCI activity | $ | (193) | $ | 75 | $ | (118) | $ | — | $ | (118) | Reclassified to | | | | | | | | | | earnings1 | | 2 | | (1) | | 1 | | — | | 1 | Net OCI | $ | (191) | $ | 74 | $ | (117) | $ | — | $ | (117) | | | | | | | | | | | | Change in net DVA | OCI activity | $ | (922) | $ | 325 | $ | (597) | $ | (28) | $ | (569) | Reclassified to | | | | | | | | | | earnings1 | | 12 | | (3) | | 9 | | — | | 9 | Net OCI | $ | (910) | $ | 322 | $ | (588) | $ | (28) | $ | (560) |
| 20162 | $ in millions | | Pre-tax Gain (Loss) | | Income Tax Benefit (Provision) | | After-tax Gain (Loss) | | Non-controlling Interests | | Net | Foreign currency translation adjustments | OCI activity | $ | (24) | $ | 9 | $ | (15) | $ | 12 | $ | (27) | Reclassified to | | | | | | | | | | earnings | | 4 | | — | | 4 | | — | | 4 | Net OCI | $ | (20) | $ | 9 | $ | (11) | $ | 12 | $ | (23) | | | | | | | | | | | | Change in net unrealized gains (losses) on AFS securities | OCI activity | $ | (313) | $ | 116 | $ | (197) | $ | — | $ | (197) | Reclassified to | | | | | | | | | | earnings1 | | (113) | | 41 | | (72) | | — | | (72) | Net OCI | $ | (426) | $ | 157 | $ | (269) | $ | — | $ | (269) | | | | | | | | | | | | Pension, postretirement and other | OCI activity | $ | (162) | $ | 64 | $ | (98) | $ | — | $ | (98) | Reclassified to | | | | | | | | | | earnings1 | | (3) | | 1 | | (2) | | — | | (2) | Net OCI | $ | (165) | $ | 65 | $ | (100) | $ | — | $ | (100) | | | | | | | | | | | | Change in net DVA | OCI activity | $ | (429) | $ | 153 | $ | (276) | $ | (13) | $ | (263) | Reclassified to | | | | | | | | | | earnings1 | | (31) | | 11 | | (20) | | — | | (20) | Net OCI | $ | (460) | $ | 164 | $ | (296) | $ | (13) | $ | (283) |
| 2015 | $ in millions | | Pre-tax Gain (Loss) | | Income Tax Benefit (Provision) | | After-tax Gain (Loss) | | Non-controlling Interests | | Net | Foreign currency translation adjustments | OCI activity | $ | (119) | $ | (185) | $ | (304) | $ | (4) | $ | (300) | Reclassified to | | | | | | | | | | earnings | | — | | — | | — | | — | | — | Net OCI | $ | (119) | $ | (185) | $ | (304) | $ | (4) | $ | (300) | Change in net unrealized gains (losses) on AFS securities | OCI activity | $ | (305) | $ | 112 | $ | (193) | $ | — | $ | (193) | Reclassified to | | | | | | | | | | earnings1 | | (84) | | 31 | | (53) | | — | | (53) | Net OCI | $ | (389) | $ | 143 | $ | (246) | $ | — | $ | (246) | Pension, postretirement and other | OCI activity | $ | 202 | $ | (70) | $ | 132 | $ | — | $ | 132 | Reclassified to | | | | | | | | | | earnings1 | | 9 | | (3) | | 6 | | — | | 6 | Net OCI | $ | 211 | $ | (73) | $ | 138 | $ | — | $ | 138 |
- Amounts reclassified to earnings related to: realized gains and losses from sales of AFS securities are classified within Other revenues in the income statements; Pension, postretirement and other are classified within Compensation and benefits expenses in the income statements; and realization of DVA are classified within Trading revenues in the income statements.
- Exclusive of 2016 cumulative adjustment for accounting change related to DVA.
Cumulative Foreign Currency Translation Adjustments Cumulative foreign currency translation adjustments include gains or losses resulting from translating foreign currency financial statements from their respective functional currencies to U.S. dollars, net of hedge gains or losses and related tax effects. The Firm uses foreign currency contracts to manage the currency exposure relating to its net investments in non-U.S. dollar functional currency subsidiaries. The Firm may elect not to hedge its net investments in certain foreign operations due to market conditions or other reasons, including the availability of various currency contracts at acceptable costs. Information at December 31, 2017 and December 31, 2016 relating to the effects on cumulative foreign currency translation adjustments that resulted from the translation of foreign currency financial statements and from gains and losses from hedges of the Firm’s net investments in non-U.S. dollar functional currency subsidiaries is summarized in the following table. Cumulative Foreign Currency Translation Adjustments | | | | At | At | | | December 31, | December 31, | $ in millions | 2017 | 2016 | Associated with net investments in subsidiaries | | | | with a non-U.S. dollar functional currency | $ | (1,434) | $ | (2,018) | Hedges, net of tax | | 667 | | 1,032 | Total | $ | (767) | $ | (986) | Carrying value of net investments in | | | | | | non-U.S. dollar functional currency | | | | | subsidiaries subject to hedges | $ | 10,139 | $ | 8,856 |
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