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Total Equity
 6 Months Ended
Jun. 30, 2011
Total Equity  
Total Equity
13. Total Equity.

Common Equity Offerings.    During the quarters and six months ended June 30, 2011 and 2010, the Company did not purchase any of its common stock as part of its share repurchase program. At June 30, 2011, the Company had approximately $1.6 billion remaining under its current share repurchase authorization. Share repurchases by the Company are subject to regulatory approval.

MUFG Stock Conversion.

As previously disclosed, on April 21, 2011, MUFG and the Company announced that they had entered into an agreement to convert MUFG's outstanding Series B Preferred Stock in the Company into the Company's common stock. On June 30, 2011 the Company and MUFG completed the conversion, whereby MUFG exchanged the Series B Preferred Stock with a face value of $7.8 billion (carrying value $8.1 billion) and a 10% dividend for 385,464,097 shares of the Company's common stock, including approximately 75 million shares resulting from the adjustment to the conversion ratio pursuant to the transaction agreement. As a result of the adjustment to the conversion ratio, the Company incurred a one-time, non-cash negative adjustment of approximately $1.7 billion in its calculation of basic and diluted earnings per share during the quarter and six months ended June 30, 2011. As a result of the conversion, MUFG did not receive the previously declared dividend that would otherwise have been payable on July 15, 2011 in respect of the Series B Preferred Stock.

Noncontrolling Interest.

Changes in the Company's Ownership Interest in Subsidiaries.

The following table presents the effect on the Company's shareholders' equity from changes in ownership of subsidiaries resulting from transactions with noncontrolling interests.

 

     Six Months Ended June 30,  
         2011              2010      
     (dollars in millions)  

Net income applicable to Morgan Stanley

    $ 2,161       $ 3,736   

Transfers from the noncontrolling interests:

      

Increase in paid-in capital in connection with the MUFG transaction

      —           717   
  

 

 

     

 

 

  

Net transfers from noncontrolling interests

      —           717   
  

 

 

     

 

 

  

Change from net income applicable to Morgan Stanley and transfers from noncontrolling interests

    $ 2,161       $ 4,453   
  

 

 

     

 

 

  

 

In connection with the transaction between the Company and MUFG to form a joint venture in Japan, the Company recorded an after-tax gain of $717 million from the sale of a noncontrolling interest in its Japanese institutional securities business. This gain was recorded in Paid-in capital in the Company's condensed consolidated statements of financial condition at June 30, 2010 and changes in total equity for the six months ended June 30, 2010. See "Other Matters—Japanese Securities Joint Venture" in Part I, Item 2 herein for further information.