21. 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, Wealth Management and Investment 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 revenues and expenses from transactions with other operating segments being treated 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 Wealth Management business segment related to the bank deposit program.
Selected financial information for the Company's segments is presented below:
| 2013 | Institutional Securities | Wealth Management | Investment Management | Intersegment Eliminations | Total | |||||||||||
| (dollars in millions) | ||||||||||||||||
| Total non-interest revenues | $ | 16,544 | $ | 12,334 | $ | 2,994 | $ | (233) | $ | 31,639 | ||||||
| Interest income | 3,572 | 2,100 | 9 | (472) | 5,209 | |||||||||||
| Interest expense | 4,673 | 220 | 15 | (477) | 4,431 | |||||||||||
| Net interest | (1,101) | 1,880 | (6) | 5 | 778 | |||||||||||
| Net revenues | $ | 15,443 | $ | 14,214 | $ | 2,988 | $ | (228) | $ | 32,417 | ||||||
| Income from continuing operations before income taxes | $ | 869 | $ | 2,629 | $ | 984 | $ | — | $ | 4,482 | ||||||
| Provision for income taxes | (393) | 920 | 299 | — | 826 | |||||||||||
| Income from continuing operations | 1,262 | 1,709 | 685 | — | 3,656 | |||||||||||
| Discontinued operations(1): | ||||||||||||||||
| Gain (loss) from discontinued operations | (81) | (1) | 9 | 1 | (72) | |||||||||||
| Provision for (benefit from) income taxes | (29) | — | — | — | (29) | |||||||||||
| Net gain (loss) on discontinued operations | (52) | (1) | 9 | 1 | (43) | |||||||||||
| Net income | 1,210 | 1,708 | 694 | 1 | 3,613 | |||||||||||
| Net income applicable to redeemable noncontrolling | ||||||||||||||||
| interests | 1 | 221 | — | — | 222 | |||||||||||
| Net income applicable to nonredeemable noncontrolling | ||||||||||||||||
| interests | 277 | — | 182 | — | 459 | |||||||||||
| Net income applicable to Morgan Stanley | $ | 932 | $ | 1,487 | $ | 512 | $ | 1 | $ | 2,932 | ||||||
| 2012 | Institutional Securities(3) | Wealth Management (3) | Investment Management | Intersegment Eliminations | Total | |||||||||||
| (dollars in millions) | ||||||||||||||||
| Total non-interest revenues | $ | 12,772 | $ | 11,467 | $ | 2,243 | $ | (175) | $ | 26,307 | ||||||
| Interest income | 4,224 | 1,886 | 10 | (428) | 5,692 | |||||||||||
| Interest expense | 5,971 | 319 | 34 | (427) | 5,897 | |||||||||||
| Net interest | (1,747) | 1,567 | (24) | (1) | (205) | |||||||||||
| Net revenues | $ | 11,025 | $ | 13,034 | $ | 2,219 | $ | (176) | $ | 26,102 | ||||||
| Income (loss) from continuing operations before income | ||||||||||||||||
| taxes | $ | (1,688) | $ | 1,622 | $ | 590 | $ | (4) | $ | 520 | ||||||
| Provision for (benefit from) income taxes(2) | (1,061) | 557 | 267 | — | (237) | |||||||||||
| Income (loss) from continuing operations | (627) | 1,065 | 323 | (4) | 757 | |||||||||||
| Discontinued operations(1): | ||||||||||||||||
| Gain (loss) from discontinued operations | (158) | 94 | 13 | 3 | (48) | |||||||||||
| Provision for (benefit from) income taxes | (36) | 26 | 4 | (1) | (7) | |||||||||||
| Net gain (loss) on discontinued operations | (122) | 68 | 9 | 4 | (41) | |||||||||||
| Net income (loss) | (749) | 1,133 | 332 | — | 716 | |||||||||||
| Net income applicable to redeemable noncontrolling | ||||||||||||||||
| interests | 4 | 120 | — | — | 124 | |||||||||||
| Net income applicable to nonredeemable noncontrolling | ||||||||||||||||
| interests | 170 | 167 | 187 | — | 524 | |||||||||||
| Net income (loss) applicable to Morgan Stanley | $ | (923) | $ | 846 | $ | 145 | $ | — | $ | 68 | ||||||
| 2011 | Institutional Securities(3) | Wealth Management(3) | Investment Management | Intersegment Eliminations | Total | |||||||||||
| (dollars in millions) | ||||||||||||||||
| Total non-interest revenues(4) | $ | 18,723 | $ | 11,340 | $ | 1,928 | $ | (115) | $ | 31,876 | ||||||
| Interest income | 5,860 | 1,719 | 10 | (355) | 7,234 | |||||||||||
| Interest expense | 6,900 | 287 | 51 | (355) | 6,883 | |||||||||||
| Net interest | (1,040) | 1,432 | (41) | — | 351 | |||||||||||
| Net revenues | $ | 17,683 | $ | 12,772 | $ | 1,887 | $ | (115) | $ | 32,227 | ||||||
| Income from continuing operations before income taxes | $ | 4,550 | $ | 1,307 | $ | 253 | $ | — | $ | 6,110 | ||||||
| Provision for income taxes | 880 | 461 | 73 | — | 1,414 | |||||||||||
| Income from continuing operations | 3,670 | 846 | 180 | — | 4,696 | |||||||||||
| Discontinued operations(1): | ||||||||||||||||
| Gain (loss) from discontinued operations | (216) | 21 | 24 | 1 | (170) | |||||||||||
| Provision for (benefit from) income taxes | (110) | 7 | (17) | 1 | (119) | |||||||||||
| Net gain (loss) from discontinued operations | (106) | 14 | 41 | — | (51) | |||||||||||
| Net income | 3,564 | 860 | 221 | — | 4,645 | |||||||||||
| Net income applicable to nonredeemable noncontrolling | ||||||||||||||||
| interests | 220 | 170 | 145 | — | 535 | |||||||||||
| Net income applicable to Morgan Stanley | $ | 3,344 | $ | 690 | $ | 76 | $ | — | $ | 4,110 | ||||||
(1) See Note 1 for discussion of discontinued operations.
(2) Results for 2012 included an out-of-period net tax provision of $107 million, attributable to the Investment Management business segment, related to the overstatement of deferred tax assets associated with partnership investments in prior years and an out-of-period net tax provision of $50 million, attributable to the Institutional Securities business segment, related to the overstatement of deferred tax assets associated with repatriated earnings of a foreign subsidiary recorded in prior years (see Note 20).
(3) On January 1, 2013, the International Wealth Management business was transferred from the Wealth Management business segment to the Equity division within the Institutional Securities business segment. Accordingly, prior-period amounts have been recast to reflect the International Wealth Management business as part of the Institutional Securities business segment.
(4) In the fourth quarter of 2011, the Company recognized a pre-tax loss of approximately $108 million, in net revenues upon application of the OIS curve within the Institutional Securities business segment (see Note 4).
| Total Assets(1) | Institutional Securities(2) | Wealth Management(2) | Investment Management | Total | ||||
| (dollars in millions) | ||||||||
| At December 31, 2013 | $ | 668,596 | $ | 156,711 | $ | 7,395 | $ | 832,702 |
| At December 31, 2012 | $ | 648,049 | $ | 125,565 | $ | 7,346 | $ | 780,960 |
(1) Corporate assets have been fully allocated to the Company's business segments.
(2) Prior-period amounts have been recast to reflect the transfer of the International Wealth Management business from the Wealth Management business segment to the Institutional Securities business segment.
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 and managed 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.
• Wealth Management: wealth management representative coverage location.
• Investment Management: client location, except for Merchant Banking and Real Estate Investing businesses, which are based on asset location.
| Net Revenues | 2013 | 2012 | 2011 | ||||
| (dollars in millions) | |||||||
| Americas | $ | 23,282 | $ | 20,200 | $ | 22,306 | |
| EMEA | 4,542 | 3,078 | 6,619 | ||||
| Asia | 4,593 | 2,824 | 3,302 | ||||
| Net revenues | $ | 32,417 | $ | 26,102 | $ | 32,227 | |
| Total Assets | At December 31, 2013 | At December 31, 2012 | |||
| (dollars in millions) | |||||
| Americas | $ | 632,255 | $ | 587,993 | |
| EMEA | 123,008 | 122,152 | |||
| Asia | 77,439 | 70,815 | |||
| Total | $ | 832,702 | $ | 780,960 | |