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Total Equity
12 Months Ended
Dec. 31, 2017
Total Equity  
Total Equity

15. Total Equity

Morgan Stanley Shareholders’ Equity

Common Stock

Rollforward of Common Stock Outstanding
in millions20172016
Shares outstanding at beginning of period1,8521,920
Treasury stock purchases1(92)(133)
Other22865
Shares outstanding at end of period1,7881,852

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 millions20172016
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 millions201720162015
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 dataShares OutstandingCarrying Value
AtLiquidationAtAt
December 31,PreferenceDecember 31,December 31,
2017per Share20172016
Series
A44,000$25,000$1,100$1,100
C1519,8821,000408408
E34,50025,000862862
F34,00025,000850850
G20,00025,000500500
H52,00025,0001,3001,300
I40,00025,0001,0001,000
J60,00025,0001,5001,500
K40,00025,0001,000
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
SeriesIssuance DatePreferred Stock Issuance DescriptionRedemption Price per Share1Redeemable on or after DateDividend per Share2
A3July 200644,000,000 Depositary Shares, each representing a 1/1,000th of a share of Floating Rate Non-Cumulative Preferred Stock, $0.01 par value$25,000July 15, 2011$255.56
C3, 4October 13, 200810% Perpetual Non-Cumulative Non-Voting Preferred Stock1,100October 15, 201125.00
E5September 30, 201334,500,000 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 value25,000October 15, 2023445.31
F5December 10, 201334,000,000 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 25,000January 15, 2024429.69
G5April 29, 201420,000,000 Depositary Shares, each representing a 1/1,000th interest in a share of perpetual 6.625% Non-Cumulative Preferred Stock, $0.01 par value 25,000July 15, 2019414.06
H5, 6April 29, 20141,300,000 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 25,000July 15, 2019681.25
I5September 18, 201440,000,000 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 25,000October 15, 2024398.44
J5, 7 March 19, 20151,500,000 Depositary Shares, each representing a 1/25th interest in a share of perpetual Fixed-to-Floating Rate Non-Cumulative Preferred Stock, $0.01 par value25,000July 15, 2020693.75
K5, 8January 201740,000,000 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 value25,000April 15, 2027365.63

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 millionsForeign Currency Translation AdjustmentsAFS SecuritiesPensions, Postretirement and OtherDVATotal
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 period21941(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 millionsPre-tax Gain (Loss)Income Tax Benefit (Provision)After-tax Gain (Loss)Non-controlling InterestsNet
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)$$(118)
Reclassified to
earnings12(1)11
Net OCI$(191)$74$(117)$$(117)
Change in net DVA
OCI activity$(922)$325$(597)$(28)$(569)
Reclassified to
earnings112(3)99
Net OCI$(910)$322$(588)$(28)$(560)

20162
$ in millionsPre-tax Gain (Loss)Income Tax Benefit (Provision)After-tax Gain (Loss)Non-controlling InterestsNet
Foreign currency translation adjustments
OCI activity$(24)$9$(15)$12$(27)
Reclassified to
earnings444
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 millionsPre-tax Gain (Loss)Income Tax Benefit (Provision)After-tax Gain (Loss)Non-controlling InterestsNet
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$$132
Reclassified to
earnings19(3)66
Net OCI$211$(73)$138$$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
AtAt
December 31,December 31,
$ in millions20172016
Associated with net investments in subsidiaries
with a non-U.S. dollar functional currency$(1,434)$(2,018)
Hedges, net of tax6671,032
Total$(767)$(986)
Carrying value of net investments in
non-U.S. dollar functional currency
subsidiaries subject to hedges$10,139$8,856