EX-99.1 2 d826637dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

 

LOGO

 

 

Full Year and

 

Fourth Quarter 2019

 

Earnings Results

 

    Media Relations: Jake Siewert  212-902-5400

    Investor Relations: Heather Kennedy  Miner 212-902-0300    

 

  

 

The Goldman Sachs Group, Inc.              

200 West Street | New York, NY 10282              

 

  


Full Year and Fourth Quarter 2019 Earnings Results

Goldman Sachs Reports Earnings Per Common Share of $21.03 for 2019

Fourth Quarter Earnings Per Common Share was $4.69

 

 

 

“Strong performance in the fourth quarter helped us to deliver solid results for the year, while continuing to invest in new businesses. We aim to drive higher returns in the future, and look forward to sharing our strategic goals and financial targets at Investor Day later this month.”

 

 

- David M. Solomon, Chairman and Chief Executive Officer     

 

 

 

Financial Summary

 

 

 

     

   

     

 

 

Net Revenues

 

 

 

Net Earnings

 

 

 

EPS

 

 

2019                 $36.55 billion

 

4Q19                 $9.96 billion

 

 

 

2019                   $8.47 billion

 

4Q19                 $1.92 billion

 

 

 

2019                           $21.03

 

4Q19                            $4.69

 

       

 

ROE1

 

   

 

ROTE1

 

   

 

Book Value Per Share

 

 

2019                               10.0%

 

4Q19                                 8.7%

 

   

 

2019                               10.6%

 

4Q19                                 9.2%

 

   

 

2019                          $218.52

 

2019 Growth                 5.4%

 

       

NEW YORK, January 15, 2020 – The Goldman Sachs Group, Inc.  (NYSE: GS)  today reported net revenues of $36.55 billion and net earnings of $8.47 billion for the year ended December 31, 2019. Net revenues were $9.96 billion and net earnings were $1.92 billion for the fourth quarter of 2019.

Diluted earnings per common share (EPS) was $21.03 for the year ended December 31, 2019 compared with $25.27 for the year ended December 31, 2018, and was $4.69 for the fourth quarter of 2019 compared with $6.04 for the fourth quarter of 2018 and $4.79 for the third quarter of 2019.

Return on average common shareholders’ equity (ROE)1 was 10.0% for 2019 and annualized ROE was 8.7% for the fourth quarter of 2019.  Return on average tangible common shareholders’ equity (ROTE)1 was 10.6% for 2019 and annualized ROTE was 9.2% for the fourth quarter of 2019.

During 2019, the firm recorded net provisions for litigation and regulatory proceedings of $1.24 billion, which reduced diluted EPS by $3.16 and reduced ROE by 1.5 percentage points and ROTE by 1.6 percentage points.

1      

 


Goldman Sachs Reports

Full Year and Fourth Quarter 2019 Earnings Results

 

 

Annual Highlights

 

 

 

 

Net revenues were $36.55 billion, which included fourth quarter net revenues of $9.96 billion, the second highest fourth quarter net revenues and the highest since 2007.

 

 

 

 

The firm ranked #1 in worldwide announced and completed mergers and acquisitions for the year2. The firm also ranked #1 in worldwide equity and equity-related offerings and common stock offerings for the year2.

 

 

 

 

Investment Banking generated net revenues of $7.60 billion, its second highest annual net revenues.

 

 

 

 

FICC financing net revenues increased for the fifth consecutive year to a record $1.38 billion.

 

 

 

 

Firmwide assets under supervision3,4 increased $317 billion5 during the year to a record $1.86 trillion, including net inflows of $108 billion in long-term assets under supervision.

 

 

 

 

Consumer & Wealth Management generated record net revenues of $5.20 billion, including record Management and other fees in Wealth management and significant growth in Consumer banking net revenues.

 

 

 

 

During 2019, the firm returned $6.88 billion of capital to common shareholders, including $5.34 billion of share repurchases and $1.54 billion of common stock dividends.

 

 

 

Full Year Net Revenue Mix by Segment6

 

LOGO

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Goldman Sachs Reports

Full Year and Fourth Quarter 2019 Earnings Results

 

 

Net Revenues

 

    

 

Full Year

   

Net revenues were $36.55 billion for 2019, essentially unchanged compared with 2018, reflecting lower net revenues in Investment Banking, offset by slightly higher net revenues in Global Markets.

 

  

 

 

2019 Net Revenues

 

   

 

$36.55 billion

 

 

Fourth Quarter

   

Net revenues were $9.96 billion for the fourth quarter of 2019, 23% higher than the fourth quarter of 2018 and 20% higher than the third quarter of 2019. The increase compared with the fourth quarter of 2018 primarily reflected significantly higher net revenues in Asset Management and Global Markets.

   

 

4Q19 Net Revenues

 

   

 

$9.96 billion

 

   

 

 

 

 

 

  Investment Banking  

 

 

 

 

 

Full Year

   

Net revenues in Investment Banking were $7.60 billion for 2019, 7% lower compared with a strong 2018, reflecting lower net revenues in Underwriting and Financial advisory, partially offset by higher net revenues in Corporate lending.

 

The decrease in Underwriting net revenues was due to lower net revenues in Debt underwriting, driven by lower net revenues from investment-grade and leveraged finance activity, and in Equity underwriting, reflecting a decline in industry-wide initial public offerings. The decrease in Financial advisory net revenues reflected a decrease in industry-wide completed mergers and acquisitions transactions.

   

 

2019 Investment Banking

 

   

 

$7.60 billion

 

 

  

 

Financial Advisory

 

$3.20 billion  

   

Underwriting

 

$3.60 billion  

   

Corporate Lending

 

 

$801 million  

 

     
     
     

 

The firm’s investment banking transaction backlog3 was essentially unchanged compared with the end of 2018.

     

 

Fourth Quarter

     

Net revenues in Investment Banking were $2.06 billion for the fourth quarter of 2019, 6% lower than the fourth quarter of 2018 and 12% higher than the third quarter of 2019. The decrease compared with the fourth quarter of 2018 reflected significantly lower net revenues in Financial advisory and lower net revenues in Corporate lending, partially offset by significantly higher net revenues in Underwriting.

 

The decrease in Financial advisory net revenues, compared with a strong prior year period, reflected a significant decrease in industry-wide completed mergers and acquisitions volumes. The increase in Underwriting net revenues was due to significantly higher net revenues in Debt underwriting, driven by asset-backed activity, and higher net revenues in Equity underwriting, reflecting an increase in industry-wide transactions.

 

The firm’s investment banking transaction backlog3 increased compared with the end of the third quarter of 2019.

   

 

4Q19 Investment Banking

 

   

 

$2.06 billion

 

   

Financial Advisory

 

$855 million  

   

Underwriting

 

$977 million  

   

Corporate Lending

 

 

$232 million  

 

     
     
     
     
     
     
     
     
     

3      

 


Goldman Sachs Reports

Full Year and Fourth Quarter 2019 Earnings Results

 

 

      

 

  Global Markets  

 

      

 

Full Year

     

Net revenues in Global Markets were $14.78 billion for 2019, 2% higher than 2018.

 

Net revenues in Fixed Income, Currency and Commodities (FICC) were $7.39 billion, 6% higher than 2018, due to slightly higher net revenues in FICC intermediation, reflecting significantly higher net revenues in commodities and mortgages and higher net revenues in interest rate products, partially offset by significantly lower net revenues in currencies and lower net revenues in credit products. In addition, net revenues in FICC financing were higher, reflecting higher net revenues in structured credit financing.

 

Net revenues in Equities were $7.39 billion, essentially unchanged compared with 2018. Net revenues in Equities intermediation were lower, reflecting lower net revenues in derivatives, partially offset by higher net revenues in cash products. This decrease was offset by higher net revenues in Equities financing, reflecting improved spreads.

   

 

2019 Global Markets

 

   

 

$14.78 billion

 

   

 

FICC Intermediation

 

$6.01 billion  

   

FICC Financing

 

$1.38 billion  

   

FICC

 

$7.39 billion  

       
   

Equities

  Intermediation

 

$4.37 billion  

   

Equities Financing

 

$3.02 billion  

   

Equities

 

$7.39 billion  

 

     
 

  

   
     
     
     

Fourth Quarter

     

Net revenues in Global Markets were $3.48 billion for the fourth quarter of 2019, 33% higher than the fourth quarter of 2018 and 2% lower than the third quarter of 2019.

 

Net revenues in FICC were $1.77 billion, 63% higher compared with a weak fourth quarter of 2018, primarily due to significantly higher net revenues in FICC intermediation, reflecting higher net revenues across most major businesses, including significant increases in interest rate products, commodities and mortgages. In addition, net revenues in FICC financing were higher.

 

Net revenues in Equities were $1.71 billion, 12% higher than the fourth quarter of 2018, due to higher net revenues in Equities financing, reflecting improved spreads and higher average customer balances, and in Equities intermediation, reflecting significantly higher net revenues in cash products.

   

 

4Q19 Global Markets

 

   

 

$3.48 billion

 

   

 

FICC Intermediation

 

$1.38 billion  

   

FICC Financing

 

$387 million  

   

FICC

 

$1.77 billion  

       
   

Equities

  Intermediation

 

$979 million  

   

Equities Financing

 

$732 million  

   

Equities

 

$1.71 billion  

 

     
     
     
      

 

  Asset Management  

 

      

 

Full Year

     

Net revenues in Asset Management were $8.97 billion for 2019, essentially unchanged compared with 2018, reflecting higher net revenues in Equity investments, offset by significantly lower Incentive fees and lower net revenues in Lending. Management and other fees were essentially unchanged.

 

The increase in Equity investments net revenues reflected significantly higher net gains from investments in public equities, partially offset by slightly lower net gains from investments in private equities. The decrease in Lending net revenues primarily reflected lower net gains from investments in debt instruments. Management and other fees reflected the impact of higher average assets under supervision, offset by a lower average effective fee due to shifts in the mix of client assets and strategies.

   

 

2019 Asset Management

 

   

 

$8.97 billion

 

   

 

Management and   Other Fees

 

$ 2.60 billion  

   

Incentive Fees

 

$130 million  

   

Equity Investments

 

$4.77 billion  

   

Lending

 

 

$1.47 billion  

 

     
     
     
     
     

4      

 


Goldman Sachs Reports

Full Year and Fourth Quarter 2019 Earnings Results

 

 

      

 

  Asset Management  

 

      

 

Fourth Quarter

 

  

 

Net revenues in Asset Management were $3.00 billion for the fourth quarter of 2019, 52% higher than the fourth quarter of 2018 and 85% higher than the third quarter of 2019. The increase compared with the fourth quarter of 2018 reflected significantly higher net revenues in Equity investments and Lending, as well as higher Management and other fees, partially offset by lower Incentive fees.

 

The increase in Equity investments net revenues reflected significant net gains in public equities compared with net losses in the prior year period and significantly higher net gains in private equities. The increase in Lending net revenues primarily reflected higher net gains from investments in debt instruments. The increase in Management and other fees reflected the impact of higher average assets under supervision, partially offset by a lower average effective fee due to shifts in the mix of client assets and strategies.

   

 

4Q19 Asset Management

 

   

 

$3.00 billion

 

   

Management and   Other Fees

  $ 666  million  
   

Incentive Fees

  $  45 million  
   

Equity Investments

  $1.87 billion  
   

Lending

 

 

$427 million  

 

     
     
     
     
     

 

      

 

  Consumer & Wealth Management  

 

      

 

Full Year

 

  

 

Net revenues in Consumer & Wealth Management were $5.20 billion for 2019, essentially unchanged compared with 2018.

 

Net revenues in Wealth management were $4.34 billion, 5% lower than 2018, reflecting significantly lower Incentive fees and slightly lower net revenues in Private banking and lending. These decreases were partially offset by higher Management and other fees (including the impact of United Capital7), reflecting higher average assets under supervision.

 

Net revenues in Consumer banking were $864 million, 41% higher than 2018, driven by higher net interest income, primarily reflecting an increase in deposit balances.

   

 

2019 Consumer &

Wealth Management

 

   

 

$5.20 billion

 

   

 

Wealth Management

  $ 4.34  billion  
   

Consumer Banking

 

 

$864 million  

 

     
     
     
     
     

 

Fourth Quarter

     

Net revenues in Consumer & Wealth Management were $1.41 billion for the fourth quarter of 2019, 8% higher than the fourth quarter of 2018 and 7% higher than the third quarter of 2019.

 

Net revenues in Wealth management were $1.18 billion, 6% higher than the fourth quarter of 2018, due to higher Management and other fees (including the impact of United Capital7), reflecting higher average assets under supervision. This increase was partially offset by lower Incentive fees, while net revenues in Private banking and lending were essentially unchanged.

 

Net revenues in Consumer banking were $228 million, 23% higher than the fourth quarter of 2018, driven by higher net interest income, primarily reflecting an increase in deposit balances.

   

 

4Q19 Consumer &

Wealth Management

 

   

 

$1.41 billion

 

   

Wealth Management

  $ 1.18  billion  
   

Consumer Banking

 

 

$228 million  

 

     
     
     
     
     
     
     

 

5      

 


Goldman Sachs Reports

Full Year and Fourth Quarter 2019 Earnings Results

 

 

Provision for Credit Losses

 

 

Full Year

   

Provision for credit losses was $1.07 billion for 2019, 58% higher than 2018, primarily reflecting higher impairments and higher provisions related to consumer loans.

 

 

 

 

2019 Provision for Credit Losses

 

 

 

$1.07 billion

 

 

Fourth Quarter

 

Provision for credit losses was $336 million for the fourth quarter of 2019, 51% higher than the fourth quarter of 2018 and 15% higher than the third quarter of 2019. The increase compared with the fourth quarter of 2018 primarily reflected higher impairments.

 

 

4Q19 Provision for Credit Losses

 

 

 

$336 million

 

 
   

 

Operating Expenses

 

 

Full Year

   

Operating expenses were $24.90 billion for 2019, 6% higher than 2018. The firm’s efficiency ratio3 for 2019 was 68.1%, compared with 64.1% for 2018.

 

The increase in operating expenses compared with 2018 primarily reflected significantly higher net provisions for litigation and regulatory proceedings and higher expenses for consolidated investments and technology (increases primarily in depreciation and amortization, communications and technology, occupancy and other expenses). In addition, 2019 included higher expenses related to the firm’s credit card and transaction banking activities (increases were primarily in professional fees and other expenses) and also included the impact of United Capital7. Compensation and benefits expenses were essentially unchanged compared with 2018.

 

Net provisions for litigation and regulatory proceedings for 2019 were $1.24 billion compared with $844 million for 2018.

 

Headcount increased 5% during 2019, reflecting an increase in the firm’s technology professionals and the impact of United Capital7.

     

 

2019 Operating Expenses

 

   

 

$24.90 billion

 

   
     

 

2019 Efficiency Ratio

 

 

 

68.1%

 

 
 
 
   
   
   
   

 

Fourth Quarter

   

Operating expenses were $7.30 billion for the fourth quarter of 2019, 42% higher than the fourth quarter of 2018 and 30% higher than the third quarter of 2019.

 

The increase in operating expenses compared with the fourth quarter of 2018 primarily reflected significantly higher compensation and benefits expenses and net provisions for litigation and regulatory proceedings. In addition, expenses related to consolidated investments and technology were higher (increases were primarily in occupancy and depreciation and amortization expenses). The fourth quarter of 2019 also included higher expenses related to the firm’s credit card and transaction banking activities (increases were primarily in professional fees and other expenses) and also included the impact of United Capital7.

 

Net provisions for litigation and regulatory proceedings for the fourth quarter of 2019 were $1.09 billion compared with $516 million for the fourth quarter of 2018.

 

The fourth quarter of 2019 included a $140 million charitable contribution to Goldman Sachs Gives.

   

 

4Q19 Operating Expenses

 

   

 

$7.30 billion

 

   
   
   
   
   
   
   
   
   
   
   
   

6      

 


Goldman Sachs Reports

Full Year and Fourth Quarter 2019 Earnings Results

 

 

Provision for Taxes

 

 

The effective income tax rate for 2019 was 20.0%, down from 20.7% for the first nine months of 2019 due to the impact of regulatory guidance released in the fourth quarter related to the international provisions of the Tax Cuts and Jobs Act (Tax Legislation), partially offset by the impact of provisions for non-deductible litigation. The 2019 effective income tax rate increased from 16.2% for full year 2018, as 2018 included a $487 million income tax benefit related to the finalization of the enactment impact of Tax Legislation.

     

 

2019 Effective Tax Rate

 

   

 

20.0%

 

   
   
   
   
   

 

 

Other Matters

 

 

 On January 14, 2020, the Board of Directors of The Goldman Sachs Group, Inc. declared a dividend of $1.25 per common share to be paid on March 30, 2020 to common shareholders of record on March 2, 2020.

 

 During the year, the firm returned $6.88 billion of capital to common shareholders, including $5.34 billion of share repurchases (25.8 million shares at an average cost of $206.56) and $1.54 billion of common stock dividends. This included $2.62 billion of capital returned to common shareholders during the fourth quarter, including $2.16 billion of share repurchases (10.2 million shares at an average cost of $212.67) and $453 million of common stock dividends.3

 

 Global core liquid assets3 averaged $234 billion4 for 2019, compared with an average of $233 billion for 2018. Global core liquid assets averaged $237 billion4 for the fourth quarter of 2019, compared with an average of $238 billion for the third quarter of 2019.

     

 

Declared Quarterly

Dividend Per Common Share

 

 

 

$1.25

 

 
 

 

Common Share Repurchases

 

 

 

25.8 million shares

for $5.34 billion in 2019

 

   
   

 

Average GCLA

 

   

 

$234 billion for 2019

 

   

 

7      

 


Goldman Sachs Reports

Full Year and Fourth Quarter 2019 Earnings Results

 

 

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 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 information about some of the risks and important factors that could affect the firm’s future results and financial condition, see “Risk Factors” in Part I, Item 1A of the firm’s Annual Report on Form 10-K for the year ended December 31, 2018.

Information regarding the firm’s assets under supervision, capital ratios, risk-weighted assets, supplementary leverage ratio, balance sheet data, global core liquid assets and VaR consists 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 transactions may be modified or not completed at all and associated net revenues may not be realized or may be materially less than those currently expected. Important factors that could have such a result include, for underwriting transactions, a decline or weakness in general economic conditions, an outbreak of hostilities, volatility in the securities markets or an adverse development with respect to the issuer of the securities and, for 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 information about other important factors that could adversely affect the firm’s investment banking transactions, see “Risk Factors” in Part I, Item 1A of the firm’s Annual Report on Form 10-K for the year ended December 31, 2018.

 

          

 

  Conference Call  

 

            

A conference call to discuss the firm’s financial results, outlook and related matters will be held at 9:30 am (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 (in the U.S.) or 1-706-679-5627 (outside the U.S.). 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 website, www.goldmansachs.com/investor-relations. 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 website  or by dialing  1-855-859-2056 (in the U.S.)  or  1-404-537-

3406 (outside the U.S.) passcode number 64774224 beginning approximately three 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.

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Goldman Sachs Reports

Full Year and Fourth Quarter 2019 Earnings Results

 

The Goldman Sachs Group, Inc. and Subsidiaries

Segment Net Revenues (unaudited)

$ in millions

 

     
     YEAR ENDED         % CHANGE FROM                                              
     
    

DECEMBER 31,

2019

   

DECEMBER 31,

2018

          

DECEMBER 31,

2018

     

 

INVESTMENT BANKING

 

                           

 

Financial advisory

    $          3,197         $         3,444           (7) %     
               

Equity underwriting

    1,482         1,628           (9)         

 

Debt underwriting

 

 

   

 

2,119  

 

 

 

   

 

2,358  

 

 

 

     

 

(10)     

 

 

 

 

 

Underwriting

    3,601         3,986           (10)         
               

Corporate lending

   

 

801  

 

 

 

   

 

748  

 

 

 

     

 

7      

 

 

 

 

 

Net revenues

 

   

 

7,599  

 

 

 

   

 

8,178  

 

 

 

     

 

(7)     

 

 

 

 
               

 

GLOBAL MARKETS

 

                           

FICC intermediation

    6,009         5,737           5          

FICC financing

   

 

1,379  

 

 

 

   

 

1,248  

 

 

 

     

 

10      

 

 

 

 

 

FICC

 

    7,388         6,985           6          
               

Equities intermediation

    4,374         4,681           (7)         

 

Equities financing

 

   

 

3,017  

 

 

 

   

 

2,772  

 

 

 

     

 

9      

 

 

 

 

Equities

    7,391         7,453           (1)       

 

Net revenues

 

   

 

14,779  

 

 

 

   

 

14,438  

 

 

 

     

 

2      

 

 

 

 
               

 

ASSET MANAGEMENT

 

                           

 

Management and other fees

    2,600         2,612           –          

 

Incentive fees

    130         384           (66)         

 

Equity investments

    4,765         4,207           13          

 

Lending

 

   

 

1,470  

 

 

 

   

 

1,632  

 

 

 

     

 

(10)     

 

 

 

 

 

Net revenues

 

   

 

8,965  

 

 

 

   

 

8,835  

 

 

 

     

 

1      

 

 

 

 
               

 

CONSUMER & WEALTH MANAGEMENT

 

                           

 

Management and other fees

    3,475         3,282           6          

 

Incentive fees

    81         446           (82)         

 

Private banking and lending

 

   

 

783  

 

 

 

   

 

826  

 

 

 

     

 

(5)     

 

 

 

 

 

Wealth management

    4,339         4,554           (5)         
               

Consumer banking

   

 

864  

 

 

 

   

 

611  

 

 

 

     

 

41      

 

 

 

 

 

Net revenues

 

   

 

5,203  

 

 

 

   

 

5,165  

 

 

 

     

 

1      

 

 

 

 
               

 

Total net revenues

 

   

 

$        36,546  

 

 

 

   

 

$       36,616  

 

 

 

     

 

–      

 

 

 

 

 

Geographic Net Revenues (unaudited)3

$ in millions

 

 

 

       
   
     YEAR ENDED                
   
    

DECEMBER 31,

2019

   

DECEMBER 31,

2018

               

Americas

    $        22,148         $       22,339          

 

EMEA

    9,745         9,244          

 

Asia

 

   

 

4,653  

 

 

 

   

 

5,033  

 

 

 

     

 

Total net revenues

 

   

 

$        36,546  

 

 

 

   

 

$       36,616  

 

 

 

     
             

Americas

    60%       61%        

 

EMEA

    27%       25%        

 

Asia

 

   

 

13%

 

 

 

   

 

14%

 

 

 

     

 

Total

 

   

 

100%

 

 

 

   

 

100%

 

 

 

     

 

9


Goldman Sachs Reports

Full Year and Fourth Quarter 2019 Earnings Results

 

The Goldman Sachs Group, Inc. and Subsidiaries

Segment Net Revenues (unaudited)

$ in millions

 

     
     THREE MONTHS ENDED            % CHANGE FROM  
       
     DECEMBER 31,
2019
    SEPTEMBER 30,
2019
    DECEMBER 31,
2018
            

SEPTEMBER 30,

2019

    DECEMBER 31,
2018
 

 

INVESTMENT BANKING

 

                                         

 

Financial advisory

    $               855         $               697         $            1,198           23  %        (29) %   
                 

Equity underwriting

    378         366         307           3             23        

 

Debt underwriting

 

   

 

599  

 

 

 

   

 

524  

 

 

 

   

 

437  

 

 

 

     

 

14      

 

 

 

   

 

37      

 

 

 

 

Underwriting

    977         890         744           10             31        
                 

Corporate lending

 

   

 

232  

 

 

 

   

 

254  

 

 

 

   

 

251  

 

 

 

     

 

(9)     

 

 

 

   

 

(8)     

 

 

 

 

Net revenues

 

   

 

2,064  

 

 

 

   

 

1,841  

 

 

 

   

 

2,193  

 

 

 

     

 

12      

 

 

 

   

 

(6)     

 

 

 

                 

 

GLOBAL MARKETS

 

                                         

 

FICC intermediation

    1,382         1,315         757           5             83        

FICC financing

 

   

 

387  

 

 

 

   

 

364  

 

 

 

   

 

330  

 

 

 

     

 

6      

 

 

 

   

 

17      

 

 

 

 

FICC

    1,769         1,679         1,087           5             63        
                 

Equities intermediation

    979         1,080         897           (9)            9        

 

Equities financing

 

   

 

732  

 

 

 

   

 

784  

 

 

 

   

 

625  

 

 

 

     

 

(7)     

 

 

 

   

 

17      

 

 

 

 

Equities

 

   

 

1,711  

 

 

 

   

 

1,864  

 

 

 

   

 

1,522  

 

 

 

     

 

(8)     

 

 

 

   

 

12      

 

 

 

 

Net revenues

 

   

 

3,480  

 

 

 

   

 

3,543  

 

 

 

   

 

2,609  

 

 

 

     

 

(2)     

 

 

 

   

 

33      

 

 

 

                 

 

ASSET MANAGEMENT

 

                                         

 

Management and other fees

    666         660         629           1             6        

 

Incentive fees

    45         24         67           88             (33)       

 

Equity investments

    1,865         596         951           N.M.            96        

 

Lending

 

   

 

427  

 

 

 

   

 

341  

 

 

 

   

 

327  

 

 

 

     

 

25      

 

 

 

   

 

31      

 

 

 

 

Net revenues

 

   

 

3,003  

 

 

 

   

 

1,621  

 

 

 

   

 

1,974  

 

 

 

     

 

85      

 

 

 

   

 

52      

 

 

 

                 

 

CONSUMER & WEALTH MANAGEMENT

 

                                         

 

Management and other fees

    967         881         830           10             17        

 

Incentive fees

    19         21         86           (10)            (78)       

 

Private banking and lending

 

   

 

194  

 

 

 

   

 

199  

 

 

 

   

 

202  

 

 

 

     

 

(3)     

 

 

 

   

 

(4)     

 

 

 

 

Wealth management

    1,180         1,101         1,118           7             6        
                 

Consumer banking

 

   

 

228  

 

 

 

   

 

217  

 

 

 

   

 

186  

 

 

 

     

 

5      

 

 

 

   

 

23      

 

 

 

 

Net revenues

 

   

 

1,408  

 

 

 

   

 

1,318  

 

 

 

   

 

1,304  

 

 

 

     

 

7      

 

 

 

   

 

8      

 

 

 

                 

 

Total net revenues

 

   

 

$            9,955  

 

 

 

   

 

$            8,323  

 

 

 

   

 

$            8,080  

 

 

 

     

 

20      

 

 

 

   

 

23      

 

 

 

 

Geographic Net Revenues (unaudited) 3

 

         

$ in millions

 

           
   
     THREE MONTHS ENDED                       
   
     DECEMBER 31,
2019
   

SEPTEMBER 30,

2019

    DECEMBER 31,
2018
                   

 

Americas

    $            6,310         $            4,941         $            5,178          

 

EMEA

    2,268         2,329         1,766          

 

Asia

 

   

 

1,377  

 

 

 

   

 

1,053  

 

 

 

   

 

1,136  

 

 

 

     

 

Total net revenues

 

   

 

$            9,955  

 

 

 

   

 

$            8,323  

 

 

 

   

 

$            8,080  

 

 

 

     
               

Americas

    63%       59%       64%        

 

EMEA

    23%       28%       22%        

 

Asia

 

   

 

14%

 

 

 

   

 

13%

 

 

 

   

 

14%

 

 

 

     

 

Total

 

   

 

100%

 

 

 

   

 

100%

 

 

 

   

 

100%

 

 

 

     

 

10


Goldman Sachs Reports

Full Year and Fourth Quarter 2019 Earnings Results

 

The Goldman Sachs Group, Inc. and Subsidiaries

Consolidated Statements of Earnings (unaudited)

In millions, except per share amounts

 

     
     YEAR ENDED          % CHANGE FROM            
     
     DECEMBER 31,
2019
      DECEMBER 31,  
  2018  
           DECEMBER 31,
2018
                                                       

 

REVENUES

 

                             

 

Investment banking

    $          6,798       $            7,430           (9) %      

 

Investment management

    6,189       6,590           (6)          

 

Commissions and fees

    2,988       3,199           (7)          

 

Market making

    10,157       9,724           4           

 

Other principal transactions

 

   

 

6,052

 

 

 

   

 

5,906  

 

 

 

     

 

2     

 

 

 

   

 

Total non-interest revenues

 

   

 

32,184

 

 

 

   

 

32,849  

 

 

 

     

 

(2)    

 

 

 

   
                 

Interest income

    21,738       19,679           10           

 

Interest expense

 

   

 

17,376

 

 

 

   

 

15,912  

 

 

 

     

 

9     

 

 

 

   

 

Net interest income

 

   

 

4,362

 

 

 

   

 

3,767  

 

 

 

     

 

16     

 

 

 

   
                 

 

Total net revenues

 

   

 

36,546

 

 

 

   

 

36,616  

 

 

 

     

 

–     

 

 

 

   
                 

 

Provision for credit losses

 

   

 

1,065

 

 

 

   

 

674  

 

 

 

     

 

58     

 

 

 

   
                 

 

OPERATING EXPENSES

 

                             

 

Compensation and benefits

    12,353       12,328           –           

 

Brokerage, clearing, exchange and distribution fees

    3,252       3,200           2           

 

Market development

    739       740           –           

 

Communications and technology

    1,167       1,023           14           

 

Depreciation and amortization

    1,704       1,328           28           

 

Occupancy

    1,029       809           27           

 

Professional fees

    1,316       1,214           8           

 

Other expenses

 

   

 

3,338

 

 

 

   

 

2,819  

 

 

 

     

 

18     

 

 

 

   

 

Total operating expenses

 

   

 

24,898

 

 

 

   

 

23,461  

 

 

 

     

 

6     

 

 

 

   
                 

Pre-tax earnings

    10,583       12,481           (15)          

 

Provision for taxes

 

   

 

2,117

 

 

 

   

 

2,022  

 

 

 

     

 

5     

 

 

 

   

 

Net earnings

 

   

 

8,466

 

 

 

   

 

10,459  

 

 

 

     

 

(19)    

 

 

 

   

 

Preferred stock dividends

 

   

 

569

 

 

 

   

 

599  

 

 

 

     

 

(5)    

 

 

 

   

 

Net earnings applicable to common shareholders

 

   

 

$          7,897

 

 

 

   

 

$            9,860  

 

 

 

     

 

(20)    

 

 

 

   
                 

 

EARNINGS PER COMMON SHARE

 

                             

 

Basic3

    $          21.18       $            25.53           (17) %      

 

Diluted

    $          21.03       $            25.27           (17)          
                 

 

AVERAGE COMMON SHARES

 

                             

 

Basic

    371.6       385.4           (4)          

 

Diluted

 

   

 

375.5

 

 

 

   

 

390.2  

 

 

 

     

 

(4)    

 

 

 

   

 

11


Goldman Sachs Reports

Full Year and Fourth Quarter 2019 Earnings Results

 

The Goldman Sachs Group, Inc. and Subsidiaries

Consolidated Statements of Earnings (unaudited)

In millions, except per share amounts and headcount

 

     
     THREE MONTHS ENDED         % CHANGE FROM  
       
    

 DECEMBER 31, 

2019

     SEPTEMBER 30, 
2019
     DECEMBER 31, 
2018
            SEPTEMBER 30, 
2019
     DECEMBER 31, 
2018
 

 

REVENUES

 

                                         

 

Investment banking

    $            1,832         $              1,587         $              1,942           15  %        (6) %   

 

Investment management

    1,671         1,562         1,574           7             6        

 

Commissions and fees

    687         748         838           (8)            (18)       

 

Market making

    2,479         2,476         1,454           –             70        

 

Other principal transactions

 

   

 

2,221  

 

 

 

   

 

942  

 

 

 

   

 

1,281  

 

 

 

     

 

136      

 

 

 

   

 

73      

 

 

 

 

Total non-interest revenues

 

   

 

8,890  

 

 

 

   

 

7,315  

 

 

 

   

 

7,089  

 

 

 

     

 

22      

 

 

 

   

 

25      

 

 

 

                 

Interest income

    4,922         5,459         5,468           (10)            (10)       

 

Interest expense

 

   

 

3,857  

 

 

 

   

 

4,451  

 

 

 

   

 

4,477  

 

 

 

     

 

(13)     

 

 

 

    (14)       

 

Net interest income

 

   

 

1,065  

 

 

 

   

 

1,008  

 

 

 

   

 

991  

 

 

 

     

 

6      

 

 

 

 

 

 

 

 

7      

 

 

 

 

                 

 

Total net revenues

 

   

 

9,955  

 

 

 

   

 

8,323  

 

 

 

   

 

8,080  

 

 

 

     

 

20      

 

 

 

   

 

23      

 

 

 

                 

 

Provision for credit losses

 

   

 

336  

 

 

 

   

 

291  

 

 

 

   

 

222  

 

 

 

     

 

15      

 

 

 

   

 

51      

 

 

 

                 

 

OPERATING EXPENSES

 

                                         

 

Compensation and benefits

    3,046         2,731         1,857           12             64        

 

Brokerage, clearing, exchange and distribution fees

    814         853         830           (5)            (2)       

 

Market development

    200         169         208           18             (4)       

 

Communications and technology

    308         283         262           9             18        

 

Depreciation and amortization

    464         473         377           (2)            23        

 

Occupancy

    318         252         215           26             48        

 

Professional fees

    366         350         317           5             15        

 

Other expenses

 

   

 

1,782  

 

 

 

   

 

505  

 

 

 

   

 

1,084  

 

 

 

     

 

N.M.     

 

 

 

   

 

64      

 

 

 

 

Total operating expenses

 

   

 

7,298  

 

 

 

   

 

5,616  

 

 

 

   

 

5,150  

 

 

 

     

 

30      

 

 

 

   

 

42      

 

 

 

                 

Pre-tax earnings

    2,321         2,416         2,708           (4)            (14)       

 

Provision for taxes

 

   

 

404  

 

 

 

   

 

539  

 

 

 

   

 

170  

 

 

 

     

 

(25)     

 

 

 

   

 

138      

 

 

 

 

Net earnings

 

   

 

1,917  

 

 

 

   

 

1,877  

 

 

 

   

 

2,538  

 

 

 

     

 

2      

 

 

 

   

 

(24)     

 

 

 

Preferred stock dividends

 

   

 

193  

 

 

 

   

 

84  

 

 

 

   

 

216  

 

 

 

     

 

130      

 

 

 

   

 

(11)     

 

 

 

 

Net earnings applicable to common shareholders

 

   

 

$            1,724  

 

 

 

   

 

$              1,793  

 

 

 

   

 

$              2,322  

 

 

 

     

 

(4)     

 

 

 

   

 

(26)     

 

 

 

                 

 

EARNINGS PER COMMON SHARE

 

                                         

 

Basic3

    $              4.74         $                4.83         $                6.11           (2) %        (22) %   

 

Diluted

    $              4.69         $                4.79         $                6.04           (2)            (22)       
                 

 

AVERAGE COMMON SHARES

 

                                         

 

Basic

    362.4         370.0         379.5           (2)            (5)       

 

Diluted

    367.3         374.3         384.3           (2)            (4)       
                 

 

SELECTED DATA AT PERIOD-END

 

                                         

 

Common shareholders’ equity

    $          79,062         $            80,809         $            78,982           (2)            –        

 

Basic shares3

    361.8         369.3         380.9           (2)            (5)       

 

Book value per common share

    $          218.52         $            218.82         $            207.36           –             5        
                 

Headcount

 

   

 

38,300  

 

 

 

   

 

37,800  

 

 

 

   

 

36,600  

 

 

 

     

 

1      

 

 

 

   

 

5      

 

 

 

 

12


Goldman Sachs Reports

Full Year and Fourth Quarter 2019 Earnings Results

 

The Goldman Sachs Group, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets (unaudited)4,8

$ in billions

 

   
     AS OF                   
   
     DECEMBER 31,
2019
   

SEPTEMBER 30,

2019

    DECEMBER 31,
2018
                    

 

ASSETS

 

                             

 

Cash and cash equivalents

 

    $              133         $             94            $             131          

Collateralized agreements

 

    222         279            275          

Trading assets

 

    355         356            280          

Investments

 

    64         62            47          

Loans

 

    109         105            98          

Customer and other receivables

 

    75         77            72          

Other assets

   

 

35  

 

 

 

   

 

34     

 

 

 

   

 

29  

 

 

 

     

 

Total assets

 

   

 

$              993  

 

 

 

   

 

$         1,007     

 

 

 

   

 

$             932  

 

 

 

     
               

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

                             

 

Deposits

 

    $              190         $           183            $             158          

Collateralized financings

 

    152         140            112          

Trading liabilities

 

    109         116            109          

Customer and other payables

 

    175         188            180          

Unsecured short-term borrowings

 

    48         52            41          

Unsecured long-term borrowings

 

    207         217            224          

Other liabilities

   

 

22  

 

 

 

   

 

19     

 

 

 

   

 

18  

 

 

 

     

 

Total liabilities

 

   

 

903  

 

 

 

   

 

915     

 

 

 

   

 

842  

 

 

 

     

 

Shareholders’ equity

   

 

90  

 

 

 

   

 

92     

 

 

 

   

 

90  

 

 

 

     

 

Total liabilities and shareholders’ equity

 

   

 

$              993  

 

 

 

   

 

$         1,007     

 

 

 

   

 

$             932  

 

 

 

     

 

Capital Ratios and Supplementary Leverage Ratio (unaudited)3,4

$ in billions

 

 

 

     
   
     AS OF                   
   
     DECEMBER 31,
2019
   

SEPTEMBER 30,

2019

    DECEMBER 31,
2018
                    

Common equity tier 1 capital

    $             74.9         $          75.7            $             73.1          
               

 

STANDARDIZED CAPITAL RULES

 

                             

 

Risk-weighted assets

    $              564         $           557            $             548          

 

Common equity tier 1 capital ratio

    13.3%       13.6%          13.3%        
               

 

ADVANCED CAPITAL RULES

 

                             

 

 

Risk-weighted assets

 

    $              545         $           566            $             558          

Common equity tier 1 capital ratio

    13.7%      

 

13.4% 9

 

 

 

   

 

13.1%

 

 

 

     
               

 

SUPPLEMENTARY LEVERAGE RATIO

 

                             

 

 

Supplementary leverage ratio

 

   

 

6.2%

 

 

 

   

 

6.2%   

 

 

 

   

 

6.2%

 

 

 

     

 

Average Daily VaR (unaudited)3,4

 

         

$ in millions

 

           
     
     THREE MONTHS ENDED          YEAR ENDED  
       
     DECEMBER 31,
2019
   

SEPTEMBER 30,

2019

    DECEMBER 31,
2018
       

DECEMBER 31,

2019

    DECEMBER 31,
2018
 

 

RISK CATEGORIES

 

                                         

Interest rates

    $                49         $             49            $               40           $                  46         $                  46    

 

Equity prices

 

    24         28            28           27         31    

Currency rates

    11         12            19           11         14    

 

Commodity prices

    12         12            12           12         11    

 

Diversification effect

   

 

(38) 

 

 

 

   

 

(43)    

 

 

 

   

 

(50) 

 

 

 

     

 

(40) 

 

 

 

   

 

(42) 

 

 

 

 

Total

 

   

 

$                58  

 

 

 

   

 

$             58     

 

 

 

 

 

 

 

 

$               49  

 

 

 

 

   

 

 

 

 

$                  56  

 

 

 

 

    $                  60    

 

13


Goldman Sachs Reports

Full Year and Fourth Quarter 2019 Earnings Results

 

The Goldman Sachs Group, Inc. and Subsidiaries

Assets Under Supervision (unaudited)3,4

$ in billions

 

   
     AS OF                     
   
     DECEMBER 31,
2019
   

SEPTEMBER 30,

2019

    DECEMBER 31,
2018
                 

 

SEGMENT

 

                             

 

Asset Management

    $           1,298        $           1,232        $          1,087         

 

Consumer & Wealth Management

 

   

 

561 

 

 

 

   

 

530 

 

 

 

   

 

455 

 

 

 

     

 

Total AUS

 

   

 

$           1,859 

 

 

 

   

 

$           1,762 

 

 

 

   

 

$          1,542 

 

 

 

     
               

 

ASSET CLASS

 

                             

Alternative investments

    $              185        $              182        $             167         

 

Equity

    423        392        301         

 

Fixed income

 

   

 

789 

 

 

 

   

 

784 

 

 

 

   

 

677 

 

 

 

     

 

Total long-term AUS

 

   

 

1,397 

 

 

 

   

 

1,358 

 

 

 

   

 

1,145 

 

 

 

     

 

Liquidity products

 

   

 

462 

 

 

 

   

 

404 

 

 

 

   

 

397 

 

 

 

     

 

Total AUS

 

   

 

$           1,859 

 

 

 

   

 

$           1,762 

 

 

 

   

 

$          1,542 

 

 

 

     
           
     
     THREE MONTHS ENDED          YEAR ENDED  
       
     DECEMBER 31,
2019
   

SEPTEMBER 30,

2019

    DECEMBER 31,
2018
          

DECEMBER 31,

2019

    DECEMBER 31,
2018
 

 

 

ASSET MANAGEMENT

                                         

 

Beginning balance

    $           1,232        $           1,171        $          1,067          $          1,087        $          1,036   

 

Net inflows / (outflows):

               

 

Alternative investments

    (1)       (1)       –                 

 

Equity

          26        (3)         34         

 

Fixed income

   

 

(4)

 

 

 

   

 

11 

 

 

 

   

 

 

 

 

     

 

35 

 

 

 

   

 

14 

 

 

 

 

 

Total long-term AUS net inflows / (outflows)

   

 

(4)

 

 

 

   

 

36 

 

 

 

   

 

 

 

 

     

 

71 

 

 

 

   

 

26 

 

 

 

 

Liquidity products

 

   

 

50 

 

 

 

   

 

12 

 

 

 

   

 

39 

 

 

 

     

 

52 

 

 

 

   

 

51 

 

 

 

 

Total AUS net inflows / (outflows)

 

   

 

46 

 

 

 

   

 

48 

 

5  

 

   

 

44 

 

 

 

     

 

123 

 

5 

 

   

 

77 

 

 

 

 

Net market appreciation / (depreciation)

   

 

20 

 

 

 

   

 

13 

 

 

 

   

 

(24)

 

 

 

     

 

88 

 

 

 

   

 

(26)

 

 

 

 

 

Ending balance

 

   

 

$           1,298 

 

 

 

   

 

$           1,232 

 

 

 

   

 

$          1,087 

 

 

 

     

 

$          1,298 

 

 

 

   

 

$          1,087 

 

 

 

                 

 

 

CONSUMER & WEALTH MANAGEMENT

                                         

 

Beginning balance

    $              530        $              489        $             483          $             455        $             458   

 

Net inflows / (outflows):

               

 

Alternative investments

                (4)               (5)  

 

Equity

    –        15                11         

 

Fixed income

   

 

 

 

 

   

 

 

 

 

   

 

– 

 

 

 

     

 

17 

 

 

 

   

 

 

 

 

 

 

Total long-term AUS net inflows / (outflows)

 

   

 

 

 

 

   

 

33 

 

 

 

   

 

(2)

 

 

 

     

 

37 

 

 

 

   

 

11 

 

 

 

 

Liquidity products

   

 

 

 

 

   

 

 

 

 

   

 

– 

 

 

 

     

 

13 

 

 

 

   

 

 

 

 

 

 

Total AUS net inflows / (outflows)

 

   

 

14 

 

 

 

   

 

38 

 

5  

 

   

 

(2)

 

 

 

     

 

50 

 

5 

 

   

 

12 

 

 

 

 

Net market appreciation / (depreciation)

   

 

17 

 

 

 

   

 

 

 

 

   

 

(26)

 

 

 

     

 

56 

 

 

 

   

 

(15)

 

 

 

 

 

Ending balance

 

   

 

$               561 

 

 

 

   

 

$               530 

 

 

 

   

 

$              455 

 

 

 

     

 

$              561 

 

 

 

   

 

$              455 

 

 

 

                 

 

 

FIRMWIDE

                                         

 

Beginning balance

    $           1,762        $           1,660        $          1,550          $          1,542        $          1,494   

 

Net inflows / (outflows):

               

 

Alternative investments

                (4)         11         

 

Equity

          41        (1)         45        13   

 

Fixed income

   

 

– 

 

 

 

   

 

20 

 

 

 

   

 

 

 

 

     

 

52 

 

 

 

   

 

23 

 

 

 

 

 

Total long-term AUS net inflows / (outflows)

 

   

 

 

 

 

   

 

69 

 

 

 

   

 

 

 

 

     

 

108 

 

 

 

   

 

37 

 

 

 

 

Liquidity products

   

 

58 

 

 

 

   

 

17 

 

 

 

   

 

39 

 

 

 

     

 

65 

 

 

 

   

 

52 

 

 

 

 

 

Total AUS net inflows / (outflows)

 

   

 

60 

 

 

 

   

 

86 

 

5  

 

   

 

42 

 

 

 

     

 

173 

 

5 

 

   

 

89 

 

 

 

 

Net market appreciation / (depreciation)

 

   

 

37 

 

 

 

   

 

16 

 

 

 

   

 

(50)

 

 

 

     

 

144 

 

 

 

   

 

(41)

 

 

 

 

Ending balance

 

   

 

$           1,859 

 

 

 

   

 

$           1,762 

 

 

 

   

 

$          1,542 

 

 

 

     

 

$          1,859 

 

 

 

   

 

$          1,542 

 

 

 

 

14


Goldman Sachs Reports

Full Year and Fourth Quarter 2019 Earnings Results

 

 

Footnotes

    

 

  1.

ROE is calculated by dividing net earnings (or annualized net earnings for annualized ROE) applicable to common shareholders by average monthly common shareholders’ equity. ROTE is calculated by dividing net earnings (or annualized net earnings for annualized ROTE) applicable to common shareholders by average monthly tangible common shareholders’ equity (tangible common shareholders’ equity is calculated as total shareholders’ equity less preferred stock, goodwill and identifiable intangible assets). Management believes that ROTE is meaningful because it measures the performance of businesses consistently, whether they were acquired or developed internally, and that tangible common shareholders’ equity is meaningful because it is a measure that the firm and investors use to assess capital adequacy. ROTE and tangible common shareholders’ equity are non-GAAP measures and may not be comparable to similar non-GAAP measures used by other companies.

 

The table below presents average equity and a reconciliation of average common shareholders’ equity to average tangible common shareholders’ equity:

 

   
     AVERAGE FOR THE        
   
Unaudited, $ in millions  

 THREE MONTHS ENDED 

DECEMBER 31, 2019

    YEAR  ENDED
 DECEMBER 31, 2019 
        

 

Total shareholders’ equity

 

   

 

$                    90,808 

 

 

 

   

 

$                90,297 

 

 

 

 

Preferred stock

 

   

 

(11,203)

 

 

 

   

 

(11,203)

 

 

 

 

 

Common shareholders’ equity

 

   

 

79,605 

 

 

 

   

 

79,094 

 

 

 

 

 

Goodwill and identifiable intangible assets

 

   

 

(4,862)

 

 

 

   

 

(4,464)

 

 

 

 

 

Tangible common shareholders’ equity

 

   

 

$                     74,743 

 

 

 

   

 

$                 74,630 

 

 

 

 

 

  2.

Dealogic – January 1, 2019 through December 31, 2019.

 

 

  3.

For information about the following items, see the referenced sections in Part I, Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the firm’s Quarterly Report on Form 10-Q for the period ended September 30, 2019: (i) investment banking transaction backlog – see “Results of Operations – Investment Banking” (ii) assets under supervision – see “Results of Operations – Investment Management” (iii) efficiency ratio – see “Results of Operations – Operating Expenses” (iv) share repurchase program – see “Equity Capital Management and Regulatory Capital – Equity Capital Management” (v) global core liquid assets – see “Risk Management – Liquidity Risk Management” (vi) basic shares – see “Balance Sheet and Funding Sources – Balance Sheet Analysis and Metrics” and (vii) VaR – see “Risk Management – Market Risk Management.”

 

For information about the following items, see the referenced sections in Part I, Item 1 “Financial Statements (Unaudited)” in the firm’s Quarterly Report on Form 10-Q for the period ended September 30, 2019: (i) risk-based capital ratios and supplementary leverage ratio – see Note 20 “Regulation and Capital Adequacy” (ii) geographic net revenues – see Note 25 “Business Segments” and (iii) unvested share-based awards that have non-forfeitable rights to dividends or dividend equivalents in calculating basic EPS – see Note 21 “Earnings Per Common Share.”

 

  4.

Represents a preliminary estimate for the fourth quarter of 2019 and may be revised in the firm’s Annual Report on Form 10-K for the year ended December 31, 2019.

 

 

  5.

Net inflows in assets under supervision for 2019 included $71 billion of total inflows (substantially all in equity and fixed income assets) in connection with the acquisitions of both Standard & Poor’s Investment Advisory Services (SPIAS) and United Capital Financial Partners, Inc. (United Capital) in the third quarter of 2019 ($58 billion) and Rocaton Investment Advisors (Rocaton) in the second quarter of 2019 ($13 billion). SPIAS and Rocaton were included in the Asset Management segment and United Capital was included in the Consumer & Wealth Management segment.

 

 

  6.

The firm made certain changes to the firm’s business segments, commencing with the fourth quarter of 2019. For more information about these changes, see the firm’s Form 8-K dated January 6, 2020.

 

 

  7.

United Capital was acquired by the firm in the third quarter of 2019.

 

 

  8.

Beginning in the fourth quarter of 2019, the firm changed the balance sheet presentation to better reflect the nature of the firm’s activities. The primary changes include the elimination of the Financial instruments owned line item, the introduction of new line items for Investments and Trading assets and the expansion of the Loans line item. Reclassifications have been made to previously reported amounts to conform to the current presentation.

 

 

  9.

Beginning in the fourth quarter of 2019, the firm made changes to the calculation of loss given default for certain wholesale exposures. As of September 30, 2019, the estimated impact of these changes would have been an increase in the firm’s Advanced common equity tier 1 capital ratio of approximately 1 percentage point.

 

15