v2.4.0.6
Segment and Geographic Information
 6 Months Ended
Jun. 30, 2012
Segment Reporting [Abstract]  
Segment And Geographic Information

18.       Segment and Geographic Information.

Segment Information.

The Company structures its segments primarily based upon the nature of the financial products and services provided to customers and the Company's management organization. The Company provides a wide range of financial products and services to its customers in each of its business segments: Institutional Securities, Global Wealth Management Group and Asset Management. For further discussion of the Company's business segments, see Note 1.

Revenues and expenses directly associated with each respective segment are included in determining its operating results. Other revenues and expenses that are not directly attributable to a particular segment are allocated based upon the Company's allocation methodologies, generally based on each segment's respective net revenues, non-interest expenses or other relevant measures.

As a result of treating certain intersegment transactions as transactions with external parties, the Company includes an Intersegment Eliminations category to reconcile the business segment results to the Company's consolidated results. Intersegment eliminations also reflect the effect of fees paid by the Institutional Securities business segment to the Global Wealth Management Group business segment related to the bank deposit program.

Selected financial information for the Company's segments is presented below:

Three Months Ended June 30, 2012 Institutional Securities Global  Wealth Management Group Asset Management Intersegment Eliminations Total
                 
       (dollars in millions)
Total non-interest revenues$ 3,777$ 2,914$ 465$ (42)$ 7,114
Net interest  (543)  391  (9)  —  (161)
Net revenues(1)$ 3,234$ 3,305$ 456$ (42)$ 6,953
Income (loss) from continuing operations          
 before income taxes$ 508$ 393$ 43$ (4)$ 940
Provision for income taxes  72  148  6  —  226
Income (loss) from continuing operations  436  245  37  (4)  714
                 
Discontinued operations(2):          
 Gain (loss) from discontinued operations  (46)  91  —  4  49
 Provision for (benefit from) income taxes  (17)  30  —  —  13
  Net gain (loss) on discontinued operations  (29)  61  —  4  36
Net income  407  306  37  —  750
Net income applicable to noncontrolling          
 interests  55  81  23  —  159
Net income applicable to Morgan Stanley$ 352$ 225$ 14$ —$ 591

Three Months Ended June 30, 2011 Institutional Securities Global Wealth Management Group Asset Management Intersegment Eliminations Total
                 
       (dollars in millions)
Total non-interest revenues$ 5,563$ 3,094$ 646$ (28)$ 9,275
Net interest   (404)  346  (10)  —  (68)
Net revenues(1)$ 5,159$ 3,440$ 636$ (28)$ 9,207
Income from continuing operations before income          
 taxes$ 1,485$ 317$ 168$ —$ 1,970
Provision for income taxes   347  137  54  —  538
Income from continuing operations  1,138  180  114  —  1,432
                 
Discontinued operations(2):          
 Gain (loss) from discontinued operations   (30)  6  1  1  (22)
 Provision for income taxes   —  2  1  1  4
  Net gain (loss) on discontinued operations  (30)  4  —  —  (26)
Net income  1,108  184  114  —  1,406
Net income applicable to noncontrolling interests  117  4  92  —  213
Net income applicable to Morgan Stanley$ 991$ 180$ 22$ —$ 1,193

Six Months Ended June 30, 2012 Institutional Securities Global Wealth Management Group Asset Management Intersegment Eliminations Total
                 
       (dollars in millions)
Total non-interest revenues$ 7,261$ 5,918$ 1,006$ (77)$ 14,108
Net interest   (1,004)  801  (17)  —  (220)
Net revenues(1)$ 6,257$ 6,719$ 989$ (77)$ 13,888
Income (loss) from continuing operations before income          
 taxes$ 196$ 780$ 171$ (4)$ 1,143
Provision for (benefit from) income taxes   (33)  269  44  —  280
Income (loss) from continuing operations  229  511  127  (4)  863
                 
Discontinued operations(2):          
 Gain (loss) from discontinued operations   (22)  93  1  4  76
 Provision for income taxes   24  31  —  —  55
  Net gain (loss) on discontinued operations  (46)  62  1  4  21
Net income  183  573  128  —  884
Net income applicable to noncontrolling interests  144  155  88  —  387
Net income applicable to Morgan Stanley$ 39$ 418$ 40$ —$ 497

Six Months Ended June 30, 2011 Institutional Securities Global Wealth Management Group Asset Management Intersegment Eliminations Total
                 
       (dollars in millions)
Total non-interest revenues$ 9,458$ 6,157$ 1,276$ (48)$ 16,843
Net interest   (731)  687  (18)  —  (62)
Net revenues(1)$ 8,727$ 6,844$ 1,258$ (48)$ 16,781
Income from continuing operations before income          
 taxes$ 1,917$ 661$ 293$ —$ 2,871
Provision for (benefit from) income taxes   (16)  226  84  —  294
Income from continuing operations  1,933  435  209  —  2,577
                 
Discontinued operations(2):          
 Gain (loss) from discontinued operations   (68)  9  8  —  (51)
 Provision for (benefit from) income taxes   (15)  3  2  —  (10)
  Net gain (loss) on discontinued operations  (53)  6  6  —  (41)
Net income  1,880  441  215  —  2,536
Net income applicable to noncontrolling interests  178  78  119  —  375
Net income applicable to Morgan Stanley$ 1,702$ 363$ 96$ —$ 2,161

 

(1) In certain management fee arrangements, the Company is entitled to receive performance-based fees (also referred to as incentive fees) when the return on assets under management exceeds certain benchmark returns or other performance targets. In such arrangements, performance fee revenue is accrued (or reversed) quarterly based on measuring account fund performance to date versus the performance benchmark stated in the investment management agreement. The amount of performance-based fee revenue at risk of reversing if fund performance falls below stated investment management agreement benchmarks was approximately $188 million at June 30, 2012 and approximately $179 million at December 31, 2011 (see Note 2 to the consolidated financial statements for the year ended December 31, 2011 included in the Form 10-K).

(2)       See Notes 1 and 20 for discussion of discontinued operations.

 

 

Net Interest Institutional Securities Global Wealth Management Group Asset Management Intersegment Eliminations Total
            
   (dollars in millions)
Three Months Ended June 30 2012          
Interest income $ 931$ 489$ 2$ (99)$ 1,323
Interest expense   1,474  98  11  (99)  1,484
 Net interest $ (543)$ 391$ (9)$ —$ (161)
            
Three Months Ended June 30 2011          
Interest income $ 1,579$ 464$ 3$ (85)$ 1,961
Interest expense   1,983  118  13  (85)  2,029
 Net interest $ (404)$ 346$ (10)$ —$ (68)
            
Six Months Ended June 30 2012          
Interest income $ 2,076$ 979$ 5$ (195)$ 2,865
Interest expense   3,080  178  22  (195)  3,085
 Net interest $ (1,004)$ 801$ (17)$ —$ (220)
            
Six Months Ended June 30 2011          
Interest income $ 3,065$ 917$ 7$ (169)$ 3,820
Interest expense   3,796  230  25  (169)  3,882
 Net interest $ (731)$ 687$ (18)$ —$ (62)
            
            

Total Assets(1) Institutional Securities Global Wealth Management Group Asset Management Total
         
  (dollars in millions)
At June 30, 2012$ 634,905$ 106,611$ 7,001$ 748,517
At December 31, 2011$ 641,456$ 101,427$ 7,015$ 749,898

 

(1)       Corporate assets have been fully allocated to the Company's business segments.

Geographic Information.

The Company operates in both U.S. and non-U.S. markets. The Company's non-U.S. business activities are principally conducted through European and Asian locations. The net revenues disclosed in the following table reflect the regional view of the Company's consolidated net revenues on a managed basis, based on the following methodology:

•       Institutional Securities: advisory and equity underwriting—client location, debt underwriting—revenue recording location, sales and trading—trading desk location.

•       Global Wealth Management Group: global representative coverage location.

•       Asset Management: client location, except for Merchant Banking and Real Estate Investing businesses, which are based on asset location.

   Three Months Ended Six Months Ended
   June 30, June 30,
Net Revenues 2012 2011 2012 2011
   (dollars in millions)
Americas $ 5,114$ 6,599$ 9,904$ 12,065
Europe, Middle East, and Africa   978  1,527  2,132  3,194
Asia   861  1,081  1,852  1,522
 Net revenues $ 6,953$ 9,207$ 13,888$ 16,781