SEC Comment Letter for MORGAN STANLEY (MS, MS-PA, MS-PE, MS-PF, MS-PI, MS-PK, MS-PL, MS-PO, MS-PP, MS-PQ) (CIK 0000895421) (MS) — Apr 10, 2007
MORGAN STANLEY (MS, MS-PA, MS-PE, MS-PF, MS-PI, MS-PK, MS-PL, MS-PO, MS-PP, MS-PQ) (CIK 0000895421)
Date: April 10, 2007 · CIK: 0000895421 · Accession: 0000000000-07-017641
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 001-11758
Letter
June 6, 2006 By U.S. Mail and facsimile to (212) 404-9707. David H. Sidwell Executive Vice President and Chief Financial Officer Morgan Stanley 1585 Broadway New York, NY 10036
Re: Morgan Stanley Form 10-K for the Fiscal Year Ended November 30, 2005 File No. 001-11758
Dear Mr. Sidwell:
We have reviewed your filing and have the following comments. Where indicated, we think you should revise your doc ument in response to these comments in future filings. If you disagree, we will consider your explanation as to why our comments are inapplicable or a revision is unnecessary. Please be as detailed as necessary in your explanation. In our comment, we may ask you to provide us with supplemental information so we may better understand your disclosure. After reviewing this information, we may or may not raise additional comments.
Please understand that the purpose of our re view process is to assist you in your compliance with the applicable disclosure requirements and to enhance the overall disclosure in your filing. We look forward to working with you in these respects. We welcome any questions you may have about our comments or any other aspect of our review. Feel free to call us at the telephone numbers listed at the end of this letter.
Consolidated Financial Statements
Consolidated Statements of Income, page 109
1. We note that you do not separately present your costs and expenses applicable to services on your Statements of Income. We also not e that you report revenues inclusive of interest and dividend income, interest e xpense and the provision for loan losses and that you do not separa tely present operating and non-operating income and expenses. Please tell us:
David H. Sidwell Morgan Stanley June 6, 2006 Page 2
• Whether you track costs related to each of your separately presented revenue line items;
• Your basis for characterizing interest and dividend income, interest expense and provision for loan losses as “Revenues”; and
• Your basis for not separately presenting operating and non-operating income and expenses.
Refer to Rule 5-01 and 5-03 of Regulation S-X.
Consolidated Statements of Cash Flows, page 111
2. We note that you have classified cash flows from sales of consumer loans as investing cash flows. Please tell us how you considered the guidance in paragraph 9 of SFAS 102 in determini ng the appropriate classification of cash flows related to the origination and sale of loans held for sale.
Note 2. Summary of Significant Accounting Policies
Revenue Recognition – Merchant, Card member and Other Fees, page 114
3. Please tell us the basis for recording Me rchant, Cardmember and Other Fees net of the cost of your cardmember reward programs. Refer to EITF 99-19.
Financial Instruments Used for Trading and Investment, page 115
4. We note your supplemental response da ted February 1, 2006 regarding your application of the AICPA Broker Dealer Guide and your fair value accounting policy. In light of the EITF deliberati ons on this matter we will defer further consideration of this issue at this time. We may have comments at a future date.
Financial Instruments Used for Asset and Liability Management, page 116
5. Given your use of derivative instrument s for both trading and investment purposes, as well as asset and liability mana gement, please revise future filings to clearly disclose the specific de rivative instrument(s) used in each of your hedging strategies and the methods used to both prospectively and retrospectively assess hedge effectiveness. Provide the following information in your disclosures:
• Identify each type of asset or liability for which you employ hedging strategies;
David H. Sidwell Morgan Stanley June 6, 2006 Page 3 • Identify the financial instruments, including the types of derivatives, which you use to manage each of these risks;
• Disclose the hedging classification fo r each derivative instrument; and
• Clearly describe the specific methods used to both prospectively and retrospectively assess hedge e ffectiveness and measure hedge ineffectiveness and disclose how often these tests are performed.
* * * * *
Please respond to these comments within 10 business days or tell us when you will provide us with a response. Please furnish a cover letter that keys your response to our comments, indicates your inte nt to include the requested revisions in future filings and provides any requested supplemental info rmation. Please understand that we may have additional comments after review ing your responses to our comments.
We urge all persons who are responsible for the accuracy and adequacy of the disclosure in the filing review ed by the staff to be certain that they have provided all information investors require for an info rmed decision. Since the company and its management are in possession of all facts re lating to a company’s disclosure, they are responsible for the accuracy and adequacy of the disclosures they have made.
In connection with responding to our comments, please provide, in writing, a statement from the company acknowledging that:
the company is responsible for the adequacy and accuracy of the disclosure in the filing;
staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and
the company may not assert staff comme nts as a defense in any proceeding initiated by the Commission or any person under the federal secu rities laws of the United States.
In addition, please be advise d that the Division of Enfo rcement has access to all information you provide to the staff of the Divi sion of Corporation Fi nance in our review of your filing or in response to our comments on your filing.
David H. Sidwell Morgan Stanley June 6, 2006 Page 4 You may contact Rebekah M oore, Staff Accountant, at (202) 551-3463 or me at (202) 551-3426 if you have questions.
Sincerely,
Angela Connell
Senior Accountant
Show Raw Text
Mail Stop 4561 June 6, 2006 By U.S. Mail and facsimile to (212) 404-9707. David H. Sidwell Executive Vice President and Chief Financial Officer Morgan Stanley 1585 Broadway New York, NY 10036 Re: Morgan Stanley Form 10-K for the Fiscal Year Ended November 30, 2005 File No. 001-11758 Dear Mr. Sidwell: We have reviewed your filing and have the following comments. Where indicated, we think you should revise your doc ument in response to these comments in future filings. If you disagree, we will consider your explanation as to why our comments are inapplicable or a revision is unnecessary. Please be as detailed as necessary in your explanation. In our comment, we may ask you to provide us with supplemental information so we may better understand your disclosure. After reviewing this information, we may or may not raise additional comments. Please understand that the purpose of our re view process is to assist you in your compliance with the applicable disclosure requirements and to enhance the overall disclosure in your filing. We look forward to working with you in these respects. We welcome any questions you may have about our comments or any other aspect of our review. Feel free to call us at the telephone numbers listed at the end of this letter. Consolidated Financial Statements Consolidated Statements of Income, page 109 1. We note that you do not separately present your costs and expenses applicable to services on your Statements of Income. We also not e that you report revenues inclusive of interest and dividend income, interest e xpense and the provision for loan losses and that you do not separa tely present operating and non-operating income and expenses. Please tell us: David H. Sidwell Morgan Stanley June 6, 2006 Page 2 • Whether you track costs related to each of your separately presented revenue line items; • Your basis for characterizing interest and dividend income, interest expense and provision for loan losses as “Revenues”; and • Your basis for not separately presenting operating and non-operating income and expenses. Refer to Rule 5-01 and 5-03 of Regulation S-X. Consolidated Statements of Cash Flows, page 111 2. We note that you have classified cash flows from sales of consumer loans as investing cash flows. Please tell us how you considered the guidance in paragraph 9 of SFAS 102 in determini ng the appropriate classification of cash flows related to the origination and sale of loans held for sale. Note 2. Summary of Significant Accounting Policies Revenue Recognition – Merchant, Card member and Other Fees, page 114 3. Please tell us the basis for recording Me rchant, Cardmember and Other Fees net of the cost of your cardmember reward programs. Refer to EITF 99-19. Financial Instruments Used for Trading and Investment, page 115 4. We note your supplemental response da ted February 1, 2006 regarding your application of the AICPA Broker Dealer Guide and your fair value accounting policy. In light of the EITF deliberati ons on this matter we will defer further consideration of this issue at this time. We may have comments at a future date. Financial Instruments Used for Asset and Liability Management, page 116 5. Given your use of derivative instrument s for both trading and investment purposes, as well as asset and liability mana gement, please revise future filings to clearly disclose the specific de rivative instrument(s) used in each of your hedging strategies and the methods used to both prospectively and retrospectively assess hedge effectiveness. Provide the following information in your disclosures: • Identify each type of asset or liability for which you employ hedging strategies; David H. Sidwell Morgan Stanley June 6, 2006 Page 3 • Identify the financial instruments, including the types of derivatives, which you use to manage each of these risks; • Disclose the hedging classification fo r each derivative instrument; and • Clearly describe the specific methods used to both prospectively and retrospectively assess hedge e ffectiveness and measure hedge ineffectiveness and disclose how often these tests are performed. * * * * * Please respond to these comments within 10 business days or tell us when you will provide us with a response. Please furnish a cover letter that keys your response to our comments, indicates your inte nt to include the requested revisions in future filings and provides any requested supplemental info rmation. Please understand that we may have additional comments after review ing your responses to our comments. We urge all persons who are responsible for the accuracy and adequacy of the disclosure in the filing review ed by the staff to be certain that they have provided all information investors require for an info rmed decision. Since the company and its management are in possession of all facts re lating to a company’s disclosure, they are responsible for the accuracy and adequacy of the disclosures they have made. In connection with responding to our comments, please provide, in writing, a statement from the company acknowledging that: the company is responsible for the adequacy and accuracy of the disclosure in the filing; staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and the company may not assert staff comme nts as a defense in any proceeding initiated by the Commission or any person under the federal secu rities laws of the United States. In addition, please be advise d that the Division of Enfo rcement has access to all information you provide to the staff of the Divi sion of Corporation Fi nance in our review of your filing or in response to our comments on your filing. David H. Sidwell Morgan Stanley June 6, 2006 Page 4 You may contact Rebekah M oore, Staff Accountant, at (202) 551-3463 or me at (202) 551-3426 if you have questions. Sincerely, Angela Connell Senior Accountant