Goldman Sachs 2009 Annual Report Download - page 50

Financial Overview
The following table sets forth an overview of our  nancial results:
Financial Overview
Year Ended One Month Ended
December November November December
($ inmillions, exceptper share amounts) 2009 2008 2007 2008
Net revenues $45,173 $22,222 $45,987 $ 183
Pre-tax earnings/(loss) 19,829 2,336 17,604 (1,258)
Net earnings/(loss) 13,385 2,322 11,599 (780)
Net earnings/(loss) applicable to common shareholders 12,192 2,041 11,407 (1,028)
Diluted earnings/(loss)per common share 22.13 4.47 24.73 (2.15)
Return on average common shareholders’ equity
(1) 22.5% 4.9% 32.7% N.M.
(1) ROE is computed by dividing net earnings applicable to common shareholders by average monthly common shareholders’ equity. The following table sets forth
our average common shareholders’ equity:
Average for the
Year Ended One Month Ended
December November November December
(inmillions) 2009 2008 2007 2008
Total shareholders’ equity $ 65,527 $47,167 $37,959 $ 63,712
Preferred stock (11,363) (5,157) (3,100) (16,477)
Common shareholders’ equity $ 54,164 $42,010 $34,859 $ 47,235
and commercial mortgage loans and securities. The increase
in Principal Investments re ected gains on corporate principal
investments and our investment in the ordinary shares of
ICBC compared with net losses in 2008. In 2009, results in
Principal Investments included a gain of $1.58billion related
to our investment in the ordinary shares of ICBC, a gain of
$1.31billion from corporate principal investments and a
loss of $1.76billion from real estate principal investments.
Net revenues in Equities for 2009 re ected strong results in
the client franchise businesses. However, results in the client
franchise businesses were lower than a strong 2008 and
included signi cantly lower commissions. Results in principal
strategies were positive compared with losses in 2008. During
2009, Equities operated in an environment characterized by a
signi cant increase in global equity prices, favorable market
opportunities and a signi cant decline in volatility levels.
Net revenues in Asset Management and Securities Services
decreased signi cantly compared with 2008, re ecting
signi cantly lower net revenues in Securities Services, as well
as lower net revenues in Asset Management. The decrease
in Securities Services primarily re ected the impact of lower
customer balances, re ecting lower hedge fund industry assets
and reduced leverage. The decrease in Asset Management
NET REVENUES
2009 versus 2008. Our net revenues were $45.17billion in
2009, more than double the amount in 2008, re ecting
signi cantly higher net revenues in Trading and Principal
Investments. The increase in Trading and Principal
Investments re ected a very strong performance in FICC
and signi cantly improved results in Principal Investments,
as well as higher net revenues in Equities. During 2009,
FICC operated in an environment characterized by strong
client-driven activity, particularly in more liquid products.
In addition, asset values generally improved and corporate
credit spreads tightened signi cantly for most of the year.
Net revenues in FICC were signi cantly higher compared
with 2008, re ecting particularly strong performances in
credit products, mortgages and interest rate products, which
were each signi cantly higher than 2008. Net revenues in
commodities were also particularly strong and were slightly
higher than 2008, while net revenues in currencies were
strong, but lower than a particularly strong 2008. During
2009, mortgages included a loss of approximately $1.5billion
(excluding hedges) on commercial mortgage loans. Results
in 2008 were negatively impacted by asset writedowns
across non-investment-grade credit origination activities,
corporate debt, private and public equities, and residential
Goldman Sachs 2009 Annual Report
48
Management’s Discussion and Analysis