Goldman Sachs Reports Earnings Per Common Share of $15.46 for 2013

  Goldman Sachs Reports Earnings Per Common Share of $15.46 for 2013               Fourth Quarter Earnings Per Common Share Were $4.60  Business Wire  NEW YORK -- January 16, 2014  The Goldman Sachs Group, Inc. (NYSE: GS) today reported net revenues of $34.21billion and net earnings of $8.04billion for the year ended December31,2013. Diluted earnings per common share were $15.46 compared with $14.13 for the year ended December31,2012. Return on average common shareholders’ equity (ROE)^(1) was 11.0% for 2013.  Fourth quarter net revenues were $8.78billion and net earnings were $2.33billion. Diluted earnings per common share were $4.60 compared with $5.60 for the fourth quarter of 2012 and $2.88 for the third quarter of 2013. Annualized ROE^(1) was 12.7% for the fourth quarter of 2013.                                Annual Highlights    *Goldman Sachs continued its leadership in investment banking, ranking     first in worldwide announced and completed mergers and acquisitions for     the year.^(2) The firm also ranked first in worldwide equity and     equity-related offerings, common stock offerings and initial public     offerings for the year.^(2)   *Investment Banking produced net revenues of $6.00billion, which is the     second highest annual performance. Underwriting produced record net     revenues of $4.03billion, including record net revenues in debt     underwriting.   *Assets under supervision^(3) increased 8% from a year ago to a record     $1.04trillion. Net inflows in long-term assets under supervision^(3) of     $41billion^(4) during 2013 were the highest since 2007. Investment     Management generated net revenues of $5.46billion, which is the second     highest annual performance.   *Book value per common share increased approximately 5% to $152.48 and     tangible book value per common share^(5) increased approximately 7% to     $143.11 compared with the end of 2012.   *During 2013, the firm repurchased 39.3million shares of its common stock     for a total cost of $6.17billion, while maintaining strong capital     levels. The firm’s Tier1 capital ratio^(6) was 16.7%^(7) and the firm’s     Tier1 common ratio^(6) was 14.6%^(7) as of December31,2013, in each     case under BaselI and also reflecting the revised market risk regulatory     capital requirements which became effective on January1,2013.   *The firm continues to manage its liquidity conservatively. The firm’s     global core excess liquidity^(8) was $184billion^(7) as of     December31,2013.                                  _____________  “Our work in advancing our client franchise and in ensuring continued cost discipline has allowed us to provide solid returns even in a somewhat challenging environment,” said Lloyd C. Blankfein, Chairman and Chief Executive Officer. “We believe that we are well positioned to generate solid returns as the economy continues to heal and provide considerable upside for our shareholders as conditions materially improve.”                                   Net Revenues  Investment Banking  Full Year Net revenues in Investment Banking were $6.00billion for 2013, 22% higher than 2012. Net revenues in Financial Advisory were $1.98billion, essentially unchanged compared with 2012. Net revenues in Underwriting were $4.03billion, 36% higher than 2012, due to strong net revenues in both equity and debt underwriting. Net revenues in equity underwriting were significantly higher compared with 2012, reflecting an increase in client activity, particularly in initial public offerings. Net revenues in debt underwriting were significantly higher compared with 2012, principally due to leveraged finance activity.  Fourth Quarter Net revenues in Investment Banking were $1.72billion for the fourth quarter of 2013, 22% higher than the fourth quarter of 2012 and 47% higher than the third quarter of 2013. Net revenues in Financial Advisory were $585million, 15% higher than the fourth quarter of 2012. Net revenues in Underwriting were $1.13billion, 26% higher than the fourth quarter of 2012, due to strong net revenues in equity underwriting. Net revenues in equity underwriting were more than double the amount in the fourth quarter of 2012, reflecting an increase in client activity, particularly in initial public offerings. Net revenues in debt underwriting were lower compared with a strong fourth quarter of 2012, primarily reflecting lower net revenues from investment-grade activity.  The firm’s investment banking transaction backlog increased compared with the end of the third quarter of 2013 and increased significantly compared with the end of 2012.^(9)  Institutional Client Services  Full Year Net revenues in Institutional Client Services were $15.72billion for 2013, 13% lower than 2012.  Net revenues in Fixed Income, Currency and Commodities Client Execution were $8.65billion for 2013, 13% lower than 2012, reflecting significantly lower net revenues in interest rate products compared with a solid 2012, and significantly lower net revenues in mortgages compared with a strong 2012. In addition, net revenues in currencies were slightly lower, while net revenues in credit products and commodities were essentially unchanged compared with 2012. Fixed Income, Currency and Commodities Client Execution operated in a generally challenging environment during much of 2013, as macroeconomic concerns and uncertainty led to challenging market-making conditions and generally lower levels of activity.  Net revenues in Equities were $7.07billion for 2013, 14% lower compared with 2012, due to the sale of the firm’s Americas reinsurance business^(10) in 2013 and the sale of the firm’s hedge fund administration business in 2012. Net revenues in equities client execution (excluding net revenues from the firm’s Americas reinsurance business) were higher compared with 2012, including significantly higher net revenues in cash products, partially offset by significantly lower net revenues in derivatives. Commissions and fees were slightly higher compared with 2012. Securities services net revenues were significantly lower compared with 2012, primarily due to the sale of the firm’s hedge fund administration business in 2012. During 2013, Equities operated in an environment characterized by a significant increase in global equity prices, particularly in Japan and the U.S., and generally lower volatility levels.  The net loss attributable to the impact of changes in the firm's own credit spreads on borrowings for which the fair value option was elected was $296million ($220million and $76million related to Fixed Income, Currency and Commodities Client Execution and equities client execution, respectively) for 2013, compared with a net loss of $714million ($433million and $281million related to Fixed Income, Currency and Commodities Client Execution and equities client execution, respectively) for 2012.  Fourth Quarter Net revenues in Institutional Client Services were $3.41billion for the fourth quarter of 2013, 22% lower than the fourth quarter of 2012 and 19% higher than the third quarter of 2013.  Net revenues in Fixed Income, Currency and Commodities Client Execution were $1.72billion, 15% lower than the fourth quarter of 2012, reflecting significantly lower net revenues in mortgages and, to a lesser extent, interest rate products, currencies and commodities. Net revenues in credit products, which include a gain on the sale of the firm’s European insurance business, were higher compared with the fourth quarter of 2012. During the fourth quarter of 2013, Fixed Income, Currency and Commodities Client Execution operated in an environment characterized by tighter credit spreads and improved market-making conditions in certain businesses, compared with the third quarter of 2013. However, economic uncertainty persisted and levels of activity generally remained low.  Net revenues in Equities were $1.68billion, 27% lower than the fourth quarter of 2012, due to the sale of the firm’s Americas reinsurance business^(10) in 2013 and the sale of the firm’s hedge fund administration business in 2012. Net revenues in equities client execution (excluding net revenues from the firm’s Americas reinsurance business) were significantly higher compared with the same prior year period, including significantly higher net revenues in cash products, partially offset by lower net revenues in derivatives. Commissions and fees were slightly higher compared with the fourth quarter of 2012. Securities services net revenues were significantly lower compared with the fourth quarter of 2012, due to a gain of $494million on the sale of the firm’s hedge fund administration business in 2012. During the quarter, Equities operated in an environment generally characterized by an increase in global equity prices, while volatility levels remained low.  The net loss attributable to the impact of changes in the firm's own credit spreads on borrowings for which the fair value option was elected was $206million ($163million and $43million related to Fixed Income, Currency and Commodities Client Execution and equities client execution, respectively) for the fourth quarter of 2013, compared with a net loss of $126million ($79million and $47million related to Fixed Income, Currency and Commodities Client Execution and equities client execution, respectively) for the fourth quarter of 2012.  Investing & Lending  Full Year Net revenues in Investing & Lending were $7.02billion for 2013, 19% higher than 2012. Results for 2013 included net gains of $3.93billion from investments in equities, primarily in private equities, driven by company-specific events and strong corporate performance. In addition, Investing & Lending net revenues included net gains and net interest income of $1.95billion from debt securities and loans, and other net revenues of $1.14billion related to the firm’s consolidated investments.  Fourth Quarter Net revenues in Investing & Lending were $2.06billion for the fourth quarter of 2013, 4% higher than the fourth quarter of 2012 and 40% higher than the third quarter of 2013. Results for the fourth quarter of 2013 included net gains of $1.40billion from investments in equities, primarily reflecting company-specific events, including initial public offerings, and net gains in public equities. In addition, Investing & Lending net revenues included net gains and net interest income of $423million from debt securities and loans, and other net revenues of $234million related to the firm’s consolidated investments.  Investment Management  Full Year Net revenues in Investment Management were $5.46billion for 2013, 5% higher than 2012, reflecting higher management and other fees, primarily due to higher average assets under supervision. During the year, total assets under supervision^(3) increased $77billion to $1.04trillion. Long-term assets under supervision^(3) increased $81billion, including net inflows of $41billion^(4), reflecting inflows in fixed income and equity assets, partially offset by outflows in alternative investment assets. Net market appreciation of $40billion during the year was primarily in equity assets. Liquidity products^(3) decreased $4billion.  Fourth Quarter Net revenues in Investment Management were $1.60billion for the fourth quarter of 2013, 5% higher than the fourth quarter of 2012 and 31% higher than the third quarter of 2013. The increase in net revenues compared with the fourth quarter of 2012 reflected higher management and other fees, primarily due to higher average assets under supervision. During the quarter, total assets under supervision^(3) increased $51billion to $1.04trillion. Long-term assets under supervision^(3) increased $33billion, including net inflows of $13billion, reflecting inflows in fixed income and equity assets, partially offset by outflows in alternative investment assets. Net market appreciation of $20billion during the quarter was primarily in equity assets. In addition, liquidity products^(3) increased $18billion.                                     Expenses  Operating expenses were $22.47 billion for 2013, 2% lower than 2012.  Compensation and Benefits  Compensation and benefits expenses (including salaries, discretionary compensation, amortization of equity awards and other items such as benefits) were $12.61billion for 2013, 3% lower than 2012. The ratio of compensation and benefits to net revenues for 2013 was 36.9% compared with 37.9% for 2012. Total staff^(11) increased 2% compared with the end of 2012.  Non-Compensation Expenses  Full Year Non-compensation expenses were $9.86billion for 2013, 2% lower than 2012. The decrease compared with 2012 included a decline in insurance reserves, reflecting the sale of the firm’s Americas reinsurance business, and a decrease in depreciation and amortization expenses, primarily reflecting lower impairments and lower operating expenses related to consolidated investments. These decreases were partially offset by an increase in other expenses, due to higher net provisions for litigation and regulatory proceedings, and higher brokerage, clearing, exchange and distribution fees. Net provisions for litigation and regulatory proceedings for 2013 were $962million compared with $448million for 2012.  Fourth Quarter Non-compensation expenses were $3.04billion for the fourth quarter of 2013, 3% higher than the fourth quarter of 2012 and 40% higher than the third quarter of 2013. The increase compared with the fourth quarter of 2012 included an increase in other expenses, due to higher net provisions for litigation and regulatory proceedings, partially offset by lower operating expenses related to consolidated investments. This increase was partially offset by a decline in insurance reserves, reflecting the sale of the firm’s Americas reinsurance business.  Net provisions for litigation and regulatory proceedings for the fourth quarter of 2013 were $561million (primarily comprised of net provisions for mortgage-related matters) compared with $260million for the fourth quarter of 2012 (including the settlement with the Federal Reserve Board regarding the independent foreclosure review). The fourth quarter of 2013 also included $196 million of impairment charges, principally related to consolidated investments, and a $155million charitable contribution to Goldman Sachs Gives. Compensation was reduced to fund this charitable contribution to Goldman Sachs Gives.  Provision for Taxes  The effective income tax rate for 2013 was 31.5%, up from 30.3% for the first nine months of 2013, reflecting a decrease in the impact of permanent benefits. The rate decreased from 33.3% for 2012 to 31.5% for 2013, primarily due to a determination that certain non-U.S. earnings will be permanently reinvested abroad.                                     Capital  As of December31,2013, total capital was $239.44billion, consisting of $78.47billion in total shareholders’ equity (common shareholders’ equity of $71.27billion and preferred stock of $7.20billion) and $160.97billion in unsecured long-term borrowings. In October2013, Berkshire Hathaway Inc. and certain of its subsidiaries exercised in full the warrant to purchase shares of the firm’s common stock, which required net share settlement and resulted in a reduction of approximately 3% to both book value per common share and tangible book value per common share. Including the impact of the warrant exercise, book value per common share increased approximately 5% to $152.48 and tangible book value per common share^(5) increased approximately 7% to $143.11 compared with the end of 2012, while both decreased approximately 1% compared with the end of the third quarter of 2013. Book value per common share and tangible book value per common share are based on common shares outstanding, including restricted stock units granted to employees with no future service requirements, of 467.4million as of December31,2013.  During the year, the firm repurchased 39.3million shares of its common stock at an average cost per share of $157.11, for a total cost of $6.17billion, including 8.5million shares during the fourth quarter at an average cost per share of $164.90, for a total cost of $1.40billion. The remaining share authorization under the firm’s existing repurchase program is 57.2million shares.^(12)  Under the regulatory capital requirements applicable to bank holding companies in 2013, the firm’s Tier1 capital ratio^(6) was 16.7%^(7) and the firm’s Tier1 common ratio^(6) was 14.6%^(7) as of December31,2013, up from 16.3% and 14.2%, respectively, as of September30,2013 (in each case under BaselI and also reflecting the revised market risk regulatory capital requirements which became effective on January1,2013).                    Other Balance Sheet and Liquidity Metrics    *The firm’s global core excess liquidity (GCE)^(8) was $184billion^(7)     as of December31,2013 and averaged $183billion^(7) for the fourth     quarter of 2013, compared with an average of $187billion for the third     quarter of 2013. GCE averaged $183billion^(7) for 2013, compared with an     average of $172billion for 2012.   *Total assets ^ were $912billion^(7) as of December31,2013, compared     with $923billion as of September30,2013 and $939billion as of     December31,2012.   *Level3 assets ^ were $40billion^(7) as of December31,2013, compared     with $42billion as of September30,2013 and $47billion as of     December31,2012, and represented 4.4% of total assets.                                    Dividends  The Board of Directors of The Goldman Sachs Group, Inc. declared a dividend of $0.55 per common share to be paid on March28,2014 to common shareholders of record on February28,2014. The firm also declared dividends of $234.38, $387.50, $250.00, $250.00, $371.88 and $343.75 per share of SeriesA Preferred Stock, SeriesB Preferred Stock, SeriesC Preferred Stock, SeriesD Preferred Stock, SeriesI Preferred Stock and SeriesJ Preferred Stock, respectively (represented by depositary shares, each representing a 1/1,000th interest in a share of preferred stock), to be paid on February10,2014 to preferred shareholders of record on January26,2014. In addition, the firm declared dividends of $1,011.11 per each share of SeriesE Preferred Stock and SeriesF Preferred Stock, to be paid on March3,2014 to preferred shareholders of record on February16,2014.                                  _____________  The Goldman Sachs Group, Inc. is a leading global investment banking, securities and investment management firm that provides a wide range of financial services to a substantial and diversified client base that includes corporations, financial institutions, governments and high-net-worth individuals. Founded in 1869, the firm is headquartered in New York and maintains offices in all major financial centers around the world.  Cautionary Note Regarding Forward-Looking Statements  This press release contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are not historical facts, but instead represent only the firm’s beliefs regarding future events, many of which, by their nature, are inherently uncertain and outside of the firm’s control. It is possible that the firm’s actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements. For a discussion of some of the risks and important factors that could affect the firm’s future results and financial condition, see “Risk Factors” in PartI, Item1A of the firm’s Annual Report on Form10-K for the year ended December31,2012.  Certain of the information regarding the firm’s capital ratios, risk-weighted assets, total assets, level3 assets and global core excess liquidity consist of preliminary estimates. These estimates are forward-looking statements and are subject to change, possibly materially, as the firm completes its financial statements.  Statements about the firm’s investment banking transaction backlog also may constitute forward-looking statements. Such statements are subject to the risk that the terms of these transactions may be modified or that they may not be completed at all; therefore, the net revenues, if any, that the firm actually earns from these transactions may differ, possibly materially, from those currently expected. Important factors that could result in a modification of the terms of a transaction or a transaction not being completed include, in the case of underwriting transactions, a decline or continued weakness in general economic conditions, outbreak of hostilities, volatility in the securities markets generally or an adverse development with respect to the issuer of the securities and, in the case of financial advisory transactions, a decline in the securities markets, an inability to obtain adequate financing, an adverse development with respect to a party to the transaction or a failure to obtain a required regulatory approval. For a discussion of other important factors that could adversely affect the firm’s investment banking transactions, see “Risk Factors” in PartI, Item1A of the firm’s Annual Report on Form10-K for the year ended December31,2012.  Conference Call  A conference call to discuss the firm’s results, outlook and related matters will be held at 9:30am(ET). The call will be open to the public. Members of the public who would like to listen to the conference call should dial 1-888-281-7154 (U.S. domestic) or 1-706-679-5627 (international). The number should be dialed at least 10 minutes prior to the start of the conference call. The conference call will also be accessible as an audio webcast through the Investor Relations section of the firm’s web site, www.gs.com/shareholders. There is no charge to access the call. For those unable to listen to the live broadcast, a replay will be available on the firm’s web site or by dialing 1-855-859-2056 (U.S. domestic) or 1-404-537-3406 (international) passcode number 20446309, beginning approximately two hours after the event. Please direct any questions regarding obtaining access to the conference call to Goldman Sachs Investor Relations, via e-mail, at gs-investor-relations@gs.com.                 THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES                             SEGMENT NET REVENUES                                  (UNAUDITED)                                 $ in millions                          Year Ended                                % Change                                                                    From                          December 31,    December 31,       December                                                                    31,                          2013                 2012                 2012 Investment Banking Financial Advisory       $   1,978            $   1,975            -         %                                                                               Equity underwriting          1,659                987              68 Debt underwriting           2,367              1,964           21      Total Underwriting           4,026                2,951            36                                                                 Total Investment            6,004              4,926           22      Banking                                                                               Institutional Client Services Fixed Income, Currency and Commodities Client       8,651                9,914            (13    ) Execution                                                                               Equities client              2,594                3,171            (18    ) execution^(10) Commissions and fees         3,103                3,053            2 Securities services         1,373              1,986     ^(13) (31    ) Total Equities               7,070                8,210            (14    )                                                                 Total Institutional         15,721             18,124          (13    ) Client Services                                                                               Investing & Lending Equity securities            3,930                2,800            40 Debt securities and          1,947                1,850            5 loans Other                        1,141                1,241            (8     )                                                                 Total Investing &           7,018              5,891           19      Lending                                                                               Investment Management Management and other         4,386                4,105            7 fees Incentive fees               662                  701              (6     ) Transaction revenues         415                  416              -                                                                 Total Investment            5,463              5,222           5       Management                                                                 Total net revenues       $   34,206          $   34,163          -                                                                                                     THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES                             SEGMENT NET REVENUES                                  (UNAUDITED)                                 $ in millions                   Three Months Ended                              % Change From                   December    September    December       September    December                   31,            30,             31,            30,           31,                   2013            2013            2012            2013          2012 Investment Banking Financial         $ 585           $ 423           $ 508           38        %   15        % Advisory                                                                                            Equity              622             276             304           125           105 underwriting Debt               511           467           593          9            (14   ) underwriting Total               1,133           743             897           52            26 Underwriting                                                                          Total Investment         1,718         1,166         1,405        47           22     Banking                                                                                            Institutional Client Services Fixed Income, Currency and Commodities         1,724           1,247           2,038         38            (15   ) Client Execution                                                                                            Equities client     598             549             764           9             (22   ) execution^(10) Commissions and     747             727             722           3             3 fees Securities         337           340           818    ^(13) (1     )      (59   ) services Total Equities      1,682           1,616           2,304         4             (27   )                                                                          Total Institutional      3,406         2,863         4,342        19           (22   ) Client Services                                                                                            Investing & Lending Equity              1,403           938             1,123         50            25 securities Debt securities     423             300             485           41            (13   ) and loans Other               234             237             365           (1     )      (36   )                                                                          Total Investing    2,060         1,475         1,973        40           4      & Lending                                                                                            Investment Management Management and      1,143           1,085           1,067         5             7 other fees Incentive fees      333             71              344           N.M.          (3    ) Transaction         122             62              105           97            16 revenues                                                                          Total Investment         1,598         1,218         1,516        31           5      Management                                                                          Total net         $ 8,782        $ 6,722        $ 9,236        31           (5    ) revenues                                                                                                            THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES                      CONSOLIDATED STATEMENTS OF EARNINGS                                  (UNAUDITED)                     In millions, except per share amounts                           Year Ended                         % Change                                                                    From                                 December      December        December                                 31,              31,             31,                                 2013              2012             2012 Revenues Investment                      $  6,004          $ 4,941          22        % banking Investment                         5,194            4,968          5 management Commissions and                    3,255            3,161          3 fees Market making                      9,368            11,348   ^(13) (17    ) Other principal                   6,993          5,865         19      transactions Total non-interest                       30,814           30,283         2 revenues                                                                               Interest income                    10,060           11,381         (12    ) Interest expense                  6,668          7,501         (11    ) Net interest                      3,392          3,880         (13    ) income                                                                               Net revenues, including net                     34,206         34,163        -       interest income                                                                               Operating expenses Compensation and                   12,613           12,944         (3     ) benefits                                                                               Brokerage, clearing,                          2,341            2,208          6 exchange and distribution fees Market                             541              509            6 development Communications                     776              782            (1     ) and technology Depreciation and                   1,322            1,738          (24    ) amortization Occupancy                          839              875            (4     ) Professional fees                  930              867            7 Insurance                          176              598            (71    ) reserves Other expenses                    2,931          2,435         20      Total non-compensation                   9,856            10,012         (2     ) expenses                                                                 Total operating                   22,469         22,956        (2     ) expenses                                                                               Pre-tax earnings                   11,737           11,207         5 Provision for                     3,697          3,732         (1     ) taxes Net earnings                       8,040            7,475          8                                                                               Preferred stock                   314            183           72      dividends Net earnings applicable to                   $  7,726         $ 7,292         6       common shareholders                                                                                                                                                             Earnings per common share Basic^(14)                     $  16.34          $ 14.63          12        % Diluted                            15.46            14.13          9                                                                               Average common shares outstanding Basic                              471.3            496.2          (5     ) Diluted                            499.6            516.1          (3     )                                                                                               THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES                      CONSOLIDATED STATEMENTS OF EARNINGS                                  (UNAUDITED)             In millions, except per share amounts and total staff                    Three Months Ended                                 % Change From                    December     September     December        September    December                    31,             30,              31,             30,           31,                    2013             2013             2012             2013          2012 Revenues Investment         $ 1,718          $ 1,166          $ 1,407          47        %   22        % banking Investment           1,524            1,153            1,450          32            5 management Commissions and      788              765              754            3             5 fees Market making        1,875            1,364            2,696    ^(13) 37            (30    ) Other principal     2,076          1,434          1,956         45           6       transactions Total non-interest         7,981            5,882            8,263          36            (3     ) revenues                                                                                                Interest income      2,391            2,398            2,864          -             (17    ) Interest expense    1,590          1,558          1,891         2            (16    ) Net interest        801            840            973           (5    )       (18    ) income                                                                                                Net revenues, including net       8,782          6,722          9,236         31           (5     ) interest income                                                                                                Operating expenses Compensation and     2,189            2,382            1,976          (8    )       11 benefits                                                                                                Brokerage, clearing, exchange and         594              573              550            4             8 distribution fees Market               143              117              140            22            2 development Communications       204              202              194            1             5 and technology Depreciation and     474              280              500            69            (5     ) amortization Occupancy            206              205              232            -             (11    ) Professional         255              211              215            21            19 fees Insurance            -                -                167            -             (100   ) reserves Other expenses      1,165          585            949           99           23      Total non-compensation     3,041            2,173            2,947          40            3 expenses                                                                               Total operating     5,230          4,555          4,923         15           6       expenses                                                                                                Pre-tax earnings     3,552            2,167            4,313          64            (18    ) Provision for       1,220          650            1,421         88           (14    ) taxes Net earnings         2,332            1,517            2,892          54            (19    )                                                                                                Preferred stock     84             88             59            (5    )       42      dividends Net earnings applicable to      $ 2,248         $ 1,429         $ 2,833         57           (21    ) common shareholders                                                                                                                                                                                               Earnings per common share Basic^(14)        $ 4.80           $ 3.07           $ 5.87           56        %   (18    )  % Diluted              4.60             2.88             5.60           60            (18    )                                                                                                Average common shares outstanding Basic                467.1            463.4            481.5          1             (3     ) Diluted              488.7            496.4            505.6          (2    )       (3     )                                                                                                Selected Data Total staff at       32,900           32,600           32,400         1             2 period-end^(11)                                                                                                                THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES                            SELECTED FINANCIAL DATA                                  (UNAUDITED)  Average Daily VaR ^(15) $ in millions                                                                                              Three Months Ended                              Year Ended                   December       September       December       December        December                   31,            30,             31,            31,             31,                   2013            2013            2012            2013             2012 Risk Categories Interest rates    $ 62            $  68           $  67           $ 63             $  78 Equity prices       37               30              31             32                26 Currency rates      15               17              11             17                14 Commodity           18               17              20             19                22 prices Diversification    (51   )         (48  )         (53  )        (51   )          (54  ) effect^(15) Total             $ 81           $  84          $  76          $ 80            $  86                                                                                                                                                                                                Assets Under Supervision ^ (3) $ in billions                                                                                                                 As of                                           % Change From                   December       September       December       September        December                   31,            30,             31,            30,              31,                   2013            2013            2012            2013             2012                                                                                               Assets under      $ 919           $  878          $  854            5       %         8      % management Other client       123            113           111          9               11    assets Assets under supervision       $ 1,042        $  991         $  965          5               8     (AUS)                                                                                               Asset Class Alternative       $ 142           $  144          $  151            (1    ) %         (6   ) % investments Equity              208              190             153            9                 36 Fixed income       446            429           411          4               9     Long-term           796              763             715            4                 11 AUS^(3)                                                                                               Liquidity          246            228           250          8               (2   ) products^(3) Total AUS         $ 1,042        $  991         $  965          5               8                                                                                                                                                                                                                   Three Months Ended                              Year Ended                   December       September       December       December        December                   31,            30,             31,            31,             31,                   2013            2013            2012            2013             2012                                                                                               Balance, beginning of      $ 991           $  955          $  951          $ 965            $  895 period                                                                                               Net inflows / (outflows) Alternative         (4    )          -               (3   )         (13   )           1 investments Equity              4                4               (6   )         13                (17  ) Fixed income       13             12            2            41              34    Long-term AUS net inflows /       13               16              (7   ) ^(16)   41      ^(4)      18     ^(16) (outflows)                                                                                               Liquidity          18             1             15           (4    )          3     products Total AUS net inflows /           31               17              8              37                21 (outflows)                                                                                               Net market appreciation /      20               19              6              40                49 (depreciation)                                                                                 Balance, end of   $ 1,042        $  991         $  965         $ 1,042         $  965   period                                                                                                                                  Footnotes        ROE is computed by dividing net earnings (or annualized net earnings for (1)  annualized ROE) applicable to common shareholders by average monthly       common shareholders’ equity. The table below presents the firm’s average       common shareholders’ equity:                                               Average for the                                                                                              Three                                                                             Year Ended    Months                                                                                              Ended           Unaudited, in                           December      December           millions                                                          31, 2013         31, 2013           Total           shareholders’                                                     $ 77,353         $ 77,737           equity           Preferred                                (6,892 )     (7,200 )           stock           Common           shareholders’                           $ 70,461     $ 70,537            equity                                                                                                         (2)  Thomson Reuters – January 1, 2013 through December 31, 2013.              Assets under supervision (AUS) include assets under management and other       client assets. Assets under management include client assets where the       firm earns a fee for managing assets on a discretionary basis. Other (3)   client assets include client assets invested with third-party managers,       private bank deposits and advisory relationships where the firm earns a       fee for advisory and other services, but does not have investment       discretion. Long-term AUS represents AUS excluding liquidity products.       Liquidity products represents money markets and bank deposit assets.              In April 2013, the firm completed the sale of a majority stake in its       Americas reinsurance business and no longer consolidates this business. (4)   Long-term AUS flows for the year ended December31,2013 include       $10billion in assets managed by the firm related to this business which       were previously excluded from AUS as they were assets of a consolidated       subsidiary.              Tangible common shareholders' equity equals total shareholders' equity       less preferred stock, goodwill and identifiable intangible assets.       Tangible book value per common share is computed by dividing tangible       common shareholders’ equity by the number of common shares outstanding,       including restricted stock units granted to employees with no future       service requirements. Management believes that tangible common (5)   shareholders’ equity and tangible book value per common share are       meaningful because they are measures that the firm and investors use to       assess capital adequacy. Tangible common shareholders’ equity and       tangible book value per common share are non-GAAP measures and may not       be comparable to similar non-GAAP measures used by other companies. The       table below presents the reconciliation of total shareholders' equity to       tangible common shareholders' equity:                                                          As of           Unaudited, in                                      December           millions                                                                                31, 2013           Total           shareholders’                                                                           $ 78,467           equity           Preferred                                           (7,200 )           stock           Common           shareholders’                                                                             71,267           equity           Goodwill and           identifiable                                        (4,376 )           intangible           assets           Tangible           common                                             $ 66,891            shareholders’           equity                                                                                                              The Tier1 capital ratio equals Tier1 capital divided by risk-weighted        assets (RWAs). The Tier1 common ratio equals Tier1 common capital        divided by RWAs. As of December31,2013, Tier1 capital was        $72.47billion and Tier1 common capital was $63.25billion (Tier1        capital less $9.22billion of perpetual non-cumulative preferred stock,        junior subordinated debt issued to trusts and other adjustments). The        firm’s RWAs under the Board of Governors of the Federal Reserve        System’s risk-based capital requirements were approximately        $433billion as of December31,2013, under BaselI and also reflecting (6)   the revised market risk regulatory capital requirements which became        effective on January1,2013. Management believes that the Tier1        common ratio is meaningful because it is one of the measures that the        firm, its regulators and investors use to assess capital adequacy. The        Tier1 common ratio is a non-GAAP measure and may not be comparable to        similar non-GAAP measures used by other companies. For a further        discussion of the firm's capital ratios, see “Equity Capital” in        PartI, Item2 “Management's Discussion and Analysis of Financial        Condition and Results of Operations” in the firm's Quarterly Report on        Form10-Q for the period ended September30,2013.         (7)    Represents a preliminary estimate and may be revised in the firm’s        Annual Report on Form10-K for the year ended December31,2013.                The firm’s global core excess represents a pool of excess liquidity        consisting of unencumbered, highly liquid securities and cash. For a        further discussion of the firm's global core excess liquidity pool, see (8)    “Liquidity Risk Management” in PartI, Item2 “Management's Discussion        and Analysis of Financial Condition and Results of Operations” in the        firm's Quarterly Report on Form10-Q for the period ended        September30,2013.                The firm’s investment banking transaction backlog represents an (9)    estimate of the firm’s future net revenues from investment banking        transactions where management believes that future revenue realization        is more likely than not.                In April2013, the firm completed the sale of a majority stake in its        Americas reinsurance business and no longer consolidates this business. (10)   Net revenues related to the Americas reinsurance business were        $317million and $1.08billion for the years ended December31,2013        and December31,2012, respectively, and $317million for the three        months ended December31,2012.         (11)   Includes employees, consultants and temporary staff.                The remaining authorization represents the shares that may be        repurchased under the repurchase program approved by the Board of        Directors. As disclosed in Note19. Shareholders’ Equity in PartI, (12)   Item1 “Financial Statements” in the firm's Quarterly Report on        Form10-Q for the period ended September30,2013, share repurchases        require approval by the Board of Governors of the Federal Reserve        System.         (13)   Includes a gain of $494million on the sale of the firm’s hedge fund        administration business.                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 earnings per common share. The impact of (14)   applying this methodology was a reduction in basic earnings per common        share of $0.05 and $0.07 for the years ended December31,2013 and        December31,2012, respectively, and $0.01 for each of the three months        ended December31,2013, September30,2013 and December31,2012.                VaR is the potential loss in value of the firm’s inventory positions        due to adverse market movements over a one-day time horizon with a 95%        confidence level. Diversification effect represents the difference        between total VaR and the sum of the VaRs for the four risk categories. (15)   For a further discussion of VaR and the diversification effect, see        “Market Risk Management” in PartI, Item2 “Management's Discussion and        Analysis of Financial Condition and Results of Operations” in the        firm's Quarterly Report on Form10-Q for the period ended        September30,2013.                Includes $34 billion of fixed income asset inflows in connection with        the firm’s acquisition of Dwight Asset Management Company LLC for the (16)   year ended December31,2012. Includes $5billion of fixed income and        equity asset outflows related to the firm’s liquidation of Goldman        Sachs Asset Management Korea Co., Ltd. for both the three months and        the year ended December31,2012.          Contact:  The Goldman Sachs Group, Inc. Media Relations: Jake Siewert, 212-902-5400  Investor Relations: Dane E. Holmes, 212-902-0300