8-K 1 d8k.htm FORM 8-K Form 8-K

 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): October 28, 2004

 

 

Morgan Stanley

(Exact name of registrant as specified in its charter)

 

 

Delaware   1-11758   36-3145972

(State or other jurisdiction of

incorporation)

   (Commission File Number)  

(IRS Employer

Identification No.)

 

1585 Broadway, New York, New York   10036
(Address of principal executive offices)   (Zip Code)

 

(Registrant’s telephone number, including area code) (212) 761-4000

 

Not Applicable

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Item 8.01. Other Events

 

Morgan Stanley (the “Company”) is filing this Current Report on Form 8-K to update the historical financial statements included in the Company’s Annual Report on Form 10-K/A for the fiscal year ended November 30, 2003 (the “2003 Form 10-K/A”) and Quarterly Reports on Form 10-Q/A for the periods ended February 29, 2004 and May 31, 2004 for discontinued operations that have resulted from the classification of certain aircraft in its aircraft leasing portfolio to “held for sale” in accordance with Statement of Financial Accounting Standards No.144, “Accounting for the Impairment or Disposal of Long-Lived Assets (“SFAS 144”). In the third quarter of fiscal 2004, the Company entered into an agreement with a third party for the sale of certain aircraft in its portfolio. In accordance with SFAS 144, revenues and expenses associated with the aircraft designated as “held for sale” have been classified as discontinued operations in the Company’s Quarterly Report on Form 10-Q for the period ended August 31, 2004.

 

Under requirements of the Securities and Exchange Commission (the “SEC”), the same classification as discontinued operations required by SFAS 144 is also required for previously issued financial statements for each of the three years presented in the Company’s 2003 Form 10-K/A and the Quarterly Reports on Form 10-Q/A for the periods ended February 29, 2004 and May 31, 2004, if those financial statements are incorporated by reference in subsequent filings with the SEC made under the Securities Act of 1933, as amended, even though those financial statements relate to periods prior to the sale agreement for the aircraft. This reclassification has no effect on the Company’s reported net income for any reporting period.

 

The net (loss) gain from discontinued operations that has been recast from continuing operations was as follows (dollars in millions):

 

Fiscal 2003

  

Fiscal 2002

  

Fiscal 2001

  

Fiscal 2000

  

Fiscal 1999

$(22)

   $(11)   $4   $2   $0

 

The historical financial information in Exhibits 99.1, 99.2, 99.3 and 99.4 has been revised and updated from its previous presentation solely to reflect the reclassification described above for the following periods:

 

  • fiscal years ended November 30, 2003, 2002, 2001, 2000 and 1999

 

  • three months ended February 29, 2004, February 28, 2003, May 31, 2004 and May 31, 2003

 

  • six months ended May 31, 2004 and May 31, 2003

 

There is no requirement to update or modify any other disclosures included in the 2003 Form 10-K/A and the Quarterly Reports on Form 10-Q/A for the periods ended February 29, 2004 and May 31, 2004.

 

1

Item 9.01. Financial Statements and Exhibits

 

15 Letter of awareness from Deloitte & Touche LLP, dated October 27, 2004, concerning unaudited interim financial information.

 

23.1 Consent of Deloitte & Touche LLP

 

23.2 Consent of BK Associates, Inc.

 

23.3 Consent of Morten Beyer & Agnew, Inc.

 

23.4 Consent of Airclaims Limited.

 

99.1 Consolidated Financial Statements and notes thereto recast for discontinued operations for the fiscal years ended November 30, 2003, 2002, and 2001 (which replaces and supersedes Part II, Item 8 of the 2003 Form 10-K/A filed with the SEC on October 15, 2004).

 

99.2 Condensed Consolidated Financial Statements and notes thereto recast for discontinued operations for the three months ended February 28, 2003 and February 29, 2004 (which replaces and supersedes Part I, Item 1 of the Quarterly Report on Form 10-Q/A for the quarter ended February 29, 2004 filed with the SEC on October 15, 2004).

 

99.3 Condensed Consolidated Financial Statements and notes thereto recast for discontinued operations for the three and six months ended May 31, 2003 and May 31, 2004 (which replaces and supersedes Part I, Item 1 of the Quarterly Report on Form 10-Q/A for the quarter ended May 31, 2004 filed with the SEC on October 15, 2004).

 

99.4 Selected Financial Data recast for discontinued operations for the fiscal years November 30, 2003, 2002, 2001, 2000 and 1999 (which replaces and supersedes Part II, Item 6 of the 2003 Form 10-K/A filed with the SEC on October 15, 2004).

 

2

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

MORGAN STANLEY

(Registrant)

By:

  

/s/ DAVID S. MOSER

   

David S. Moser,

Principal Accounting Officer

 

Date: October 28, 2004

 

3



EXHIBIT 15

 

To the Board of Directors and Shareholders of Morgan Stanley:

 

We have made a review, in accordance with standards of the Public Company Accounting Oversight Board (United States), of the unaudited interim financial information of Morgan Stanley and subsidiaries for the periods ended February 29, 2004 and February 28, 2003, as indicated in our report dated April 6, 2004 (October 13, 2004, as to the effects of the restatement discussed in Note 18, October 27, 2004 as to the effects of discontinued operations discussed in Note 19); because we did not perform an audit, we expressed no opinion on that information.

 

Additionally, we have made a review, in accordance with standards of the Public Company Accounting Oversight Board (United States), of the unaudited interim financial information of Morgan Stanley and subsidiaries for the periods ended May 31, 2004 and 2003, as indicated in our report dated July 12, 2004 (October 13, 2004, as to the effects of the restatement discussed in Note 18, October 27, 2004 as to the effects of discontinued operations discussed in Note 19); because we did not perform an audit, we expressed no opinion on that information.

 

We are aware that our reports referred to above, which are included in this Current Report on Form 8-K are incorporated by reference in the following Registration Statements:

 

Filed on Form S-3:

Registration Statement No. 33-57202

Registration Statement No. 33-60734

Registration Statement No. 33-89748

Registration Statement No. 33-92172

Registration Statement No. 333-07947

Registration Statement No. 333-27881

Registration Statement No. 333-27893

Registration Statement No. 333-27919

Registration Statement No. 333-46403

Registration Statement No. 333-46935

Registration Statement No. 333-76111

Registration Statement No. 333-75289

Registration Statement No. 333-34392

Registration Statement No. 333-47576

Registration Statement No. 333-83616

Registration Statement No. 333-106789

Registration Statement No. 333-117752

 

Filed on Form S-4:

Registration Statement No. 333-25003

 

Filed on Form S-8:

Registration Statement No. 33-63024

Registration Statement No. 33-63026

Registration Statement No. 33-78038

Registration Statement No. 33-79516

Registration Statement No. 33-82240

Registration Statement No. 33-82242

Registration Statement No. 33-82244

Registration Statement No. 333-04212

Registration Statement No. 333-25003

Registration Statement No. 333-28141

Registration Statement No. 333-28263

Registration Statement No. 333-62869

Registration Statement No. 333-78081

Registration Statement No. 333-95303

Registration Statement No. 333-55972

Registration Statement No. 333-85148

Registration Statement No. 333-85150

Registration Statement No. 333-108223

 

We also are aware that the aforementioned reports, pursuant to Rule 436(c) under the Securities Act of 1933, are not considered a part of the Registration Statements prepared or certified by an accountant or a report prepared or certified by an accountant within the meaning of Sections 7 and 11 of that Act.

 

/s/ DELOITTE & TOUCHE LLP

 

New York, New York

October 27, 2004



EXHIBIT 23.1

 

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

We consent to the incorporation by reference in the following Registration Statements of Morgan Stanley of our report dated February 23, 2004 (October 27, 2004 as to the effects of discontinued operations discussed in Note 26) (which report expresses an unqualified opinion and contains an explanatory paragraph relating to the adoption of Statement of Financial Accounting Standards (“SFAS”) No. 123, “Accounting for Stock-Based Compensation,” as amended by SFAS No. 148, “Accounting for Stock-Based Compensation—Transition and Disclosure, an amendment of FASB Statement No. 123,” in 2003), included in this Current Report on Form 8-K of Morgan Stanley.

 

Filed on Form S-3:

Registration Statement No. 33-57202

Registration Statement No. 33-60734

Registration Statement No. 33-89748

Registration Statement No. 33-92172

Registration Statement No. 333-07947

Registration Statement No. 333-27881

Registration Statement No. 333-27893

Registration Statement No. 333-27919

Registration Statement No. 333-46403

Registration Statement No. 333-46935

Registration Statement No. 333-76111

Registration Statement No. 333-75289

Registration Statement No. 333-34392

Registration Statement No. 333-47576

Registration Statement No. 333-83616

Registration Statement No. 333-106789

Registration Statement No. 333-117752

 

Filed on Form S-4:

Registration Statement No. 333-25003

 

Filed on Form S-8:

Registration Statement No. 33-63024

Registration Statement No. 33-63026

Registration Statement No. 33-78038

Registration Statement No. 33-79516

Registration Statement No. 33-82240

Registration Statement No. 33-82242

Registration Statement No. 33-82244

Registration Statement No. 333-04212

Registration Statement No. 333-25003

Registration Statement No. 333-28141

Registration Statement No. 333-28263

Registration Statement No. 333-62869

Registration Statement No. 333-78081

Registration Statement No. 333-95303

Registration Statement No. 333-55972

Registration Statement No. 333-85148

Registration Statement No. 333-85150

Registration Statement No. 333-108223

 

/s/ DELOITTE & TOUCHE LLP

 

New York, New York

October 27, 2004



Exhibit 23.2

 

CONSENT OF BK ASSOCIATES, INC.

 

We hereby consent to the reference to us appearing in: (i) Note 18 to Morgan Stanley’s consolidated financial statements and notes thereto recast for discontinued operations for the fiscal years ended November 30, 2003, 2002 and 2001 included as exhibit 99.1 in the Current Report on Form 8-K of Morgan Stanley to which this consent is attached (the “Current Report”), (ii) Note 16 to Morgan Stanley’s condensed consolidated financial statements and notes thereto recast for discontinued operations for the three months ended February 28, 2003 and February 29, 2004, included as exhibit 99.2 in the Current Report, and (iii) Note 16 to Morgan Stanley’s condensed consolidated financial statements and notes thereto recast for discontinued operations for the three and six months ended May 31, 2003 and May 31, 2004, included as exhibit 99.3 in the Current Report and to the incorporation by reference of those references in the following Registration Statements of Morgan Stanley:

 

Filed on Form S-3:

 

Registration Statement No. 33-57202

Registration Statement No. 33-60734

Registration Statement No. 33-89748

Registration Statement No. 33-92172

Registration Statement No. 333-07947

Registration Statement No. 333-27881

Registration Statement No. 333-27893

Registration Statement No. 333-27919

Registration Statement No. 333-46403

Registration Statement No. 333-46935

Registration Statement No. 333-76111

Registration Statement No. 333-75289

Registration Statement No. 333-34392

Registration Statement No. 333-47576

Registration Statement No. 333-83616

Registration Statement No. 333-106789

Registration Statement No. 333-117752

 

Filed on Form S-4:

 

Registration Statement No. 333-25003

 

Filed on Form S-8:

 

Registration Statement No. 33-63024

Registration Statement No. 33-63026

Registration Statement No. 33-78038

Registration Statement No. 33-79516

Registration Statement No. 33-82240

Registration Statement No. 33-82242

Registration Statement No. 33-82244

Registration Statement No. 333-04212

Registration Statement No. 333-25003

Registration Statement No. 333-28141

Registration Statement No. 333-28263

Registration Statement No. 333-62869

Registration Statement No. 333-78081

Registration Statement No. 333-95303

Registration Statement No. 333-85148

Registration Statement No. 333-85150

Registration Statement No. 333-108223

 

BK ASSOCIATES, INC.

By:

   LOGO

Name:

Title:

  

John F. Keitz

President

 

October 28, 2004

 

2



Exhibit 23.3

 

CONSENT OF MORTEN BEYER & AGNEW, INC

 

We hereby consent to the reference to us appearing in: (i) Note 18 to Morgan Stanley’s consolidated financial statements and notes thereto recast for discontinued operations for the fiscal years ended November 30, 2003, 2002 and 2001 included as exhibit 99.1 in the Current Report on Form 8-K of Morgan Stanley to which this consent is attached (the “Current Report”), (ii) Note 16 to Morgan Stanley’s condensed consolidated financial statements and notes thereto recast for discontinued operations for the three months ended February 28, 2003 and February 29, 2004, included as exhibit 99.2 in the Current Report, and (iii) Note 16 to Morgan Stanley’s condensed consolidated financial statements and notes thereto recast for discontinued operations for the three and six months ended May 31, 2003 and May 31, 2004, included as exhibit 99.3 in the Current Report and to the incorporation by reference of those references in the following Registration Statements of Morgan Stanley:

 

Filed on Form S-3:

 

Registration Statement No. 33-57202

Registration Statement No. 33-60734

Registration Statement No. 33-89748

Registration Statement No. 33-92172

Registration Statement No. 333-07947

Registration Statement No. 333-27881

Registration Statement No. 333-27893

Registration Statement No. 333-27919

Registration Statement No. 333-46403

Registration Statement No. 333-46935

Registration Statement No. 333-76111

Registration Statement No. 333-75289

Registration Statement No. 333-34392

Registration Statement No. 333-47576

Registration Statement No. 333-83616

Registration Statement No. 333-106789

Registration Statement No. 333-117752

 

Filed on Form S-4:

 

Registration Statement No. 333-25003

 

Filed on Form S-8:

 

Registration Statement No. 33-63024

Registration Statement No. 33-63026

Registration Statement No. 33-78038

Registration Statement No. 33-79516

Registration Statement No. 33-82240

Registration Statement No. 33-82242

Registration Statement No. 33-82244

Registration Statement No. 333-04212

Registration Statement No. 333-25003

Registration Statement No. 333-28141

Registration Statement No. 333-28263

Registration Statement No. 333-62869

Registration Statement No. 333-78081

Registration Statement No. 333-95303

Registration Statement No. 333-85148

Registration Statement No. 333-85150

Registration Statement No. 333-108223

 

MORTEN BEYER & AGNEW, INC

By:

   LOGO

Name:

  

Bryson P. Monteleone

Title:

  

Vice President-Operations, CFO

October 28, 2004

 



Exhibit 23.4

 

LOGO   LOGO

 

CONSENT OF AIRCLAIMS LIMITED

 

We hereby consent to the reference to us appearing in: (i) Note 18 to Morgan Stanley’s consolidated financial statements and notes thereto recast for discontinued operations for the fiscal years ended November 30, 2003, 2002 and 2001 included as exhibit 99.1 in the Current Report on Form 8-K of Morgan Stanley to which this consent is attached (the “Current Report”), (ii) Note 16 to Morgan Stanley’s condensed consolidated financial statements and notes thereto recast for discontinued operations for the three months ended February 28, 2003 and February 29, 2004, included as exhibit 99.2 in the Current Report, and (iii) Note 16 to Morgan Stanley’s condensed consolidated financial statements and notes thereto recast for discontinued operations for the three and six months ended May 31, 2003 and May 31, 2004, included as exhibit 99.3 in the Current Report and to the incorporation by reference of those references in the following Registration Statements of Morgan Stanley:

 

Filed on Form S-3:

 

Registration Statement No. 33-57202

Registration Statement No. 33-60734

Registration Statement No. 33-89748

Registration Statement No. 33-92172

Registration Statement No. 333-07947

Registration Statement No. 333-27881

Registration Statement No. 333-27893

Registration Statement No. 333-27919

Registration Statement No. 333-46403

Registration Statement No. 333-46935

Registration Statement No. 333-76111

Registration Statement No. 333-75289

Registration Statement No. 333-34392

Registration Statement No. 333-47576

Registration Statement No. 333-83616

Registration Statement No. 333-106789

Registration Statement No. 333-117752

 

Filed on Form S-4:

 

Registration Statement No. 333-25003

 

Filed on Form S-8:

 

Registration Statement No. 33-63024

Registration Statement No. 33-63026

Registration Statement No. 33-78038

Registration Statement No. 33-79516

Registration Statement No. 33-82240

Registration Statement No. 33-82242

Registration Statement No. 33-82244

Registration Statement No. 333-04212

Registration Statement No. 333-25003

Registration Statement No. 333-28141

Registration Statement No. 333-28263

Registration Statement No. 333-62869

Registration Statement No. 333-78081

Registration Statement No. 333-95303

Registration Statement No. 333-85148

Registration Statement No. 333-85150

Registration Statement No. 333-108223

 

LOGO    Airclaims Limited
   Cardinal Point, Newall Road, Heathrow Airport, London TW6 2AS
   Telephone (44) 020 8897 1066 Facsimile (44) 20 8897 0300 Telex 934679 http://www.airclaims.com
   Registered Head Office as above. Registered in England No. 710284. VAT Reg. No. GB 224 1906 87

 

LOGO

 

AIRCLAIMS LIMITED

By:

   LOGO

Name:

  

Edward Pieniazek

Title:

   Director, Consultancy & Information Services

October 28, 2004

 



EXHIBIT 99.1.

 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Board of Directors and Shareholders of

Morgan Stanley:

 

We have audited the accompanying consolidated statements of financial condition of Morgan Stanley and subsidiaries (the “Company”) as of fiscal years ended November 30, 2003 and 2002, and the related consolidated statements of income, comprehensive income, cash flows and changes in shareholders’ equity for each of the three fiscal years in the period ended November 30, 2003. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

 

We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

 

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of Morgan Stanley and subsidiaries at fiscal years ended November 30, 2003 and 2002, and the consolidated results of their operations and their cash flows for each of the three fiscal years in the period ended November 30, 2003, in conformity with accounting principles generally accepted in the United States of America.

 

As discussed in Note 14, the Company adopted Statement of Financial Accounting Standards (“SFAS”) No. 123, “Accounting for Stock-Based Compensation,” as amended by SFAS No. 148, “Accounting for Stock-Based Compensation—Transition and Disclosure, an amendment of FASB Statement No. 123,” in 2003.

 

LOGO

 

New York, New York

February 23, 2004 (October 27, 2004 as to the effects of discontinued operations discussed in Note 26)

 

1

MORGAN STANLEY

 

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(dollars in millions, except share data)

 

    

November 30,

2003

   

November 30,

2002

Assets

              

Cash and cash equivalents

    $ 29,692    $ 29,212

Cash and securities deposited with clearing organizations or segregated under federal and other regulations (including securities at fair value of $18,957 in 2003 and $27,721 in 2002)

      28,526      38,411

Financial instruments owned (approximately $73 billion and $71 billion were pledged to various parties in 2003 and 2002, respectively):

              

U.S. government and agency securities

      24,133      32,474

Other sovereign government obligations

      21,592      27,694

Corporate and other debt

      80,594      55,254

Corporate equities

      29,984      21,996

Derivative contracts

      44,652      35,615

Physical commodities

      671      355

Securities purchased under agreements to resell

      78,205      76,910

Securities received as collateral

      27,278      12,200

Securities borrowed

      153,813      130,404

Receivables:

              

Consumer loans (net of allowances of $1,002 in 2003 and $928 in 2002)

      19,382      23,014

Customers, net

      37,321      22,262

Brokers, dealers and clearing organizations

      5,563      2,250

Fees, interest and other

      4,349      4,892

Office facilities, at cost (less accumulated depreciation of $2,506 in 2003 and $2,206 in 2002)

      2,433      2,270

Aircraft under operating leases (less accumulated depreciation of $984 in 2003 and $730 in 2002)

      4,407      4,849

Goodwill

      1,514      1,449

Other assets

      8,734      7,988
    
  

Total assets

    $ 602,843    $ 529,499
    
  

 

     2    LOGO

MORGAN STANLEY

 

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION—(Continued)

(dollars in millions, except share data)

 

    

November 30,

2003

    

November 30,

2002

  

Liabilities and Shareholders’ Equity

                 

Commercial paper and other short-term borrowings

    $ 28,386     $ 50,789  

Deposits

      12,839       13,757  

Financial instruments sold, not yet purchased:

                 

U.S. government and agency securities

      17,072       13,235  

Other sovereign government obligations

      17,505       11,679  

Corporate and other debt

      10,141       12,240  

Corporate equities

      25,615       18,320  

Derivative contracts

      36,242       28,985  

Physical commodities

      4,873       1,833  

Securities sold under agreements to repurchase

      147,618       136,463  

Obligation to return securities received as collateral

      27,278       12,200  

Securities loaned

      64,375       43,229  

Payables:

                 

Customers

      96,794       88,229  

Brokers, dealers and clearing organizations

      5,706       4,610  

Interest and dividends

      2,138       3,363  

Other liabilities and accrued expenses

      12,918       12,245  

Long-term borrowings

      65,600       55,161  
    
 
       575,100       506,338  
    
 

Capital Units

      66       66  
    
 

Preferred securities subject to mandatory redemption

      2,810       1,210  
    
 

Commitments and contingencies

                 

Shareholders’ equity:

                 

Common stock, $0.01 par value;

                 
                    Shares authorized: 3,500,000,000 in 2003 and 2002;
                    Shares issued: 1,211,699,552 in 2003 and 1,211,685,904 in 2002;
                    Shares outstanding: 1,084,696,446 in 2003 and 1,081,417,377 in 2002		      12       12  

Paid-in capital

      4,028       3,678  

Retained earnings

      28,038       25,250  

Employee stock trust

      3,008       3,003  

Accumulated other comprehensive income (loss)

      (156 )     (251 )
    
 

Subtotal

      34,930       31,692  

Note receivable related to ESOP

      (4 )     (13 )

Common stock held in treasury, at cost, $0.01 par value;

127,003,106 shares in 2003 and 130,268,527 shares in 2002

      (6,766 )     (7,176 )

Common stock issued to employee trust

      (2,420 )     (2,618 )

Unearned stock-based compensation

      (873 )     —    
    
 

Total shareholders’ equity

      24,867       21,885  
    
 

Total liabilities and shareholders’ equity

    $ 602,843     $ 529,499  
    
 

 

See Notes to Consolidated Financial Statements.

 

LOGO    3     

MORGAN STANLEY

 

CONSOLIDATED STATEMENTS OF INCOME

(dollars in millions, except share and per share data)

 

     Fiscal Year
  
     2003