Goldman Sachs 2015 Annual Report Download - page 82

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
Balance Sheet Analysis and Metrics
As of December 2015, total assets on our consolidated
statements of financial condition were $861.40 billion, an
increase of $5.55 billion from December 2014, reflecting
increases in cash and cash equivalents of $17.51 billion,
loans receivable of $16.47 billion and securities borrowed
of $11.38 billion, partially offset by decreases in financial
instruments owned, at fair value of $18.31 billion, and
receivables from customers and counterparties of
$17.38 billion. During 2015, cash and cash equivalents
increased primarily due to an increase in GCLA, loans
receivable increased, reflecting lending activity, and
securities borrowed increased due to firm-related activity.
Financial instruments owned, at fair value decreased
primarily reflecting the impact of movements in interest
rate and currency markets on derivative valuations and the
impact of lower market-making activity related to non-U.S.
government and agency obligations and corporate debt
securities, partially offset by the impact of higher market-
making activity related to equities and convertible
debentures. Receivables from customers and counterparties
decreased primarily due to lower client activity.
As of December 2015, total liabilities on our consolidated
statements of financial condition were $774.67 billion, an
increase of $1.62 billion from December 2014, reflecting
increases in deposits of $14.64 billion and unsecured long-
term borrowings of $8.12 billion, partially offset by a
decrease in financial instruments sold, but not yet
purchased, at fair value of $16.84 billion. During 2015,
deposits increased primarily in Goldman Sachs Bank USA
(GS Bank USA) and unsecured long-term borrowings
increased due to net new issuances. Financial instruments
sold, but not yet purchased, at fair value decreased
primarily reflecting the impact of movements in interest
rate and currency markets on derivative valuations.
As of December 2015, our total securities sold under
agreements to repurchase, accounted for as collateralized
financings, were $86.07 billion, which was 3% higher than
the daily average amount of repurchase agreements during
both the quarter ended and year ended December 2015.
The increase in our repurchase agreements relative to the
daily average during 2015 resulted from an increase in firm
financing and client activity at the end of the year.
As of December 2014, our total securities sold under
agreements to repurchase, accounted for as collateralized
financings, were $88.22 billion, which was 3% lower and
26% lower than the daily average amount of repurchase
agreements during the quarter ended and year ended
December 2014, respectively. The decrease in our
repurchase agreements relative to the daily average during
2014 resulted from a decrease in client and firm financing
activity during the second half of the year, including a
reduction in our matched book, primarily resulting from a
firmwide initiative to reduce activities with lower returns.
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 about our assets,
unsecured long-term borrowings, shareholders’ equity and
leverage ratios.
As of December
$ in millions 2015 2014
Total assets $861,395 $855,842
Unsecured long-term borrowings $175,422 $167,302
Total shareholders’ equity $ 86,728 $ 82,797
Leverage ratio 9.9x 10.3x
Debt to equity ratio 2.0x 2.0x
In the table above:
‰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
Note 20 to the consolidated financial statements.
‰The debt to equity ratio equals unsecured long-term
borrowings divided by total shareholders’ equity.
The table below presents information about our
shareholders’ equity and book value per common share,
including the reconciliation of total shareholders’ equity to
tangible common shareholders’ equity.
As of December
$ in millions, except per share amounts 2015 2014
Total shareholders’ equity $ 86,728 $ 82,797
Less: Preferred stock (11,200) (9,200)
Common shareholders’ equity 75,528 73,597
Less: Goodwill and identifiable intangible assets (4,148) (4,160)
Tangible common shareholders’ equity $ 71,380 $ 69,437
Book value per common share $ 171.03 $ 163.01
Tangible book value per common share 161.64 153.79
70 Goldman Sachs 2015 Form 10-K