Goldman Sachs 2013 Annual Report Download - page 197

Notes to Consolidated Financial Statements
Note 21.
Earnings Per Common Share
Basic earnings per common share (EPS) is calculated by
dividing net earnings applicable to common shareholders
by the weighted average number of common shares
outstanding. Common shares outstanding includes
common stock and RSUs for which no future service is
required as a condition to the delivery of the underlying
common stock. Diluted EPS includes the determinants of
basic EPS and, in addition, reflects the dilutive effect of the
common stock deliverable for stock warrants and options
and for RSUs for which future service is required as a
condition to the delivery of the underlying common stock.
The table below presents the computations of basic and
diluted EPS.
Year Ended December
in millions, except per share amounts 2013 2012 2011
Numerator for basic and diluted
EPS — net earnings applicable
to common shareholders $7,726 $7,292 $2,510
Denominator for basic EPS —
weighted average number of
common shares 471.3 496.2 524.6
Effect of dilutive securities:
RSUs 7.2 11.3 14.6
Stock options and warrants 21.1 8.6 17.7
Dilutive potential common shares 28.3 19.9 32.3
Denominator for diluted EPS —
weighted average number of
common shares and dilutive
potential common shares 499.6 516.1 556.9
Basic EPS $16.34 $14.63 $ 4.71
Diluted EPS 15.46 14.13 4.51
In the table above, unvested share-based payment awards
that have non-forfeitable rights to dividends or dividend
equivalents are treated as a separate class of securities in
calculating EPS. The impact of applying this methodology
was a reduction in basic EPS of $0.05 for 2013 and $0.07
for both 2012 and 2011.
The diluted EPS computations in the table above do not
include antidilutive RSUs and common shares underlying
antidilutive stock options and warrants of 6.0 million for
2013, 52.4 million for 2012 and 9.2 million for 2011.
Note 22.
Transactions with Affiliated Funds
The firm has formed numerous nonconsolidated investment
funds with third-party investors. As the firm generally acts
as the investment manager for these funds, it is entitled to
receive management fees and, in certain cases, advisory fees
or incentive fees from these funds. Additionally, the firm
invests alongside the third-party investors in certain funds.
The tables below present fees earned from affiliated funds,
fees receivable from affiliated funds and the aggregate
carrying value of the firm’s interests in affiliated funds.
Year Ended December
in millions 2013 2012 2011
Fees earned from affiliated funds $2,897 $ 2,935 $ 2,789
As of December
in millions 2013 2012
Fees receivable from funds $ 817 $ 704
Aggregate carrying value of
interests in funds 13,124 14,725
As of December 2013 and December 2012, the firm had
outstanding guarantees to its funds of $147 million and
outstanding loans and guarantees to its funds of
$582 million, respectively. The amount as of
December 2013 primarily relates to a guarantee that the
firm has voluntarily provided in connection with a
financing agreement with a third-party lender executed by
one of the firm’s real estate funds that is not covered by the
Volcker Rule. The amount of the guarantee could be
increased up to a maximum of $300 million. The amount as
of December 2012 was collateralized by certain fund assets
and primarily related to certain real estate funds for which
the firm voluntarily provided financial support to alleviate
liquidity constraints during the financial crisis and to enable
them to fund certain investment opportunities. As of
December 2013 and December 2012, the firm had no
outstanding commitments to extend credit or other
guarantees to its funds.
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