Goldman Sachs 2013 Annual Report Download - page 63

Management’s Discussion and Analysis
Balance Sheet Analysis and Metrics
As of December 2013, total assets on our consolidated
statements of financial condition were $911.51 billion, a
decrease of $27.05 billion from December 2012. This
decrease was primarily due to a decrease in financial
instruments owned, at fair value of $67.89 billion,
primarily due to decreases in U.S. government and federal
agency obligations, non-U.S. government and agency
obligations, derivatives and commodities, and a decrease in
other assets of $17.11 billion, primarily due to the sale of a
majority stake in our Americas reinsurance business in
April 2013. These decreases were partially offset by an
increase in collateralized agreements of $48.07 billion, due
to firm and client activity.
As of December 2013, total liabilities on our consolidated
statements of financial condition were $833.04 billion, a
decrease of $29.80 billion from December 2012. This
decrease was primarily due to a decrease in other liabilities
and accrued expenses of $26.35 billion, primarily due to
the sale of a majority stake in both our Americas
reinsurance business in April 2013 and our European
insurance business in December 2013, and a decrease in
collateralized financings of $9.24 billion, primarily due to
firm financing activities. This decrease was partially offset
by an increase in payables to customers and counterparties
of $10.21 billion.
As of December 2013, our total securities sold under
agreements to repurchase, accounted for as collateralized
financings, were $164.78 billion, which was 5% higher and
4% higher than the daily average amount of repurchase
agreements during the quarter ended and year ended
December 2013, respectively. The increase in our
repurchase agreements relative to the daily average during
2013 was primarily due to an increase in client activity at
the end of the period. As of December 2012, our total
securities sold under agreements to repurchase, accounted
for as collateralized financings, were $171.81 billion, which
was essentially unchanged and 3% higher than the daily
average amount of repurchase agreements during the
quarter ended and year ended December 2012, respectively.
The increase in our repurchase agreements relative to the
daily average during 2012 was primarily due to an increase
in firm financing activities at the end of the period. The level
of our repurchase agreements fluctuates between and
within periods, primarily due to providing clients with
access to highly liquid collateral, such as U.S. government
and federal agency, and investment-grade sovereign
obligations through collateralized financing activities.
The table below presents information on our assets,
unsecured long-term borrowings, shareholders’ equity and
leverage ratios.
As of December
$ in millions 2013 2012
Total assets $911,507 $938,555
Unsecured long-term borrowings $160,965 $167,305
Total shareholders’ equity $ 78,467 $ 75,716
Leverage ratio 11.6x 12.4x
Debt to equity ratio 2.1x 2.2x
Leverage ratio. The leverage ratio equals total assets
divided by total shareholders’ equity and measures the
proportion of equity and debt the firm is using to finance
assets. This ratio is different from the Tier 1 leverage ratio
included in “Equity Capital — Consolidated Regulatory
Capital Ratios” below, and further described in Note 20 to
the consolidated financial statements.
Debt to equity ratio. The debt to equity ratio equals
unsecured long-term borrowings divided by total
shareholders’ equity.
Goldman Sachs 2013 Annual Report 61