Goldman Sachs 2013 Annual Report Download - page 44

Management’s Discussion and Analysis
Results of Operations
The composition of our net revenues has varied over time as
financial markets and the scope of our operations have
changed. The composition of net revenues can also vary
over the shorter term due to fluctuations in U.S. and global
economic and market conditions. See “Certain Risk Factors
That May Affect Our Businesses” below and “Risk
Factors” in Part I, Item 1A of the 2013 Form 10-K for a
further discussion of the impact of economic and market
conditions on our results of operations.
Financial Overview
The table below presents an overview of our financial results.
Year Ended December
$ in millions, except per share amounts 2013 2012 2011
Net revenues $34,206 $34,163 $28,811
Pre-tax earnings 11,737 11,207 6,169
Net earnings 8,040 7,475 4,442
Net earnings applicable to common shareholders 7,726 7,292 2,510
Diluted earnings per common share 15.46 14.13 4.51 2
Return on average common shareholders’ equity 111.0% 10.7% 3.7% 2
1. ROE is computed by dividing net earnings applicable to common shareholders by average monthly common shareholders’ equity. The table below presents our
average common shareholders’ equity.
Average for the
Year Ended December
in millions 2013 2012 2011
Total shareholders’ equity $77,353 $72,530 $72,708
Preferred stock (6,892) (4,392) (3,990)
Common shareholders’ equity $70,461 $68,138 $68,718
2. Excluding the impact of the preferred dividend of $1.64 billion in the first quarter of 2011 (calculated as the difference between the carrying value and the
redemption value of the preferred stock), related to the redemption of our 10% Cumulative Perpetual Preferred Stock, Series G (Series G Preferred Stock) held by
Berkshire Hathaway, diluted earnings per common share were $7.46 and ROE was 5.9% for 2011. We believe that presenting our results for 2011 excluding this
dividend is meaningful, as it increases the comparability of period-to-period results. Diluted earnings per common share and ROE excluding this dividend are non-
GAAP measures and may not be comparable to similar non-GAAP measures used by other companies. The tables below present the calculation of net earnings
applicable to common shareholders, diluted earnings per common share and average common shareholders’ equity excluding the impact of this dividend.
in millions, except per share amount
Year Ended
December 2011
Net earnings applicable to common shareholders $ 2,510
Impact of the Series G Preferred Stock dividend 1,643
Net earnings applicable to common shareholders, excluding the impact of the Series G Preferred Stock dividend 4,153
Divided by: average diluted common shares outstanding 556.9
Diluted earnings per common share, excluding the impact of the Series G Preferred Stock dividend $ 7.46
in millions
Average for the
Year Ended
December 2011
Total shareholders’ equity $72,708
Preferred stock (3,990)
Common shareholders’ equity 68,718
Impact of the Series G Preferred Stock dividend 1,264
Common shareholders’ equity, excluding the impact of the Series G Preferred Stock dividend $69,982
42 Goldman Sachs 2013 Annual Report