Cautionary Note Cautionary Note on Forward on Forward- -Looking Statements Looking Statements Today’s presentation may include forward Today’s presentation may include forward- -looking statements. looking statements. These statements represent the Firm’s belief regarding future These statements represent the Firm’s belief regarding future events that, by their nature, are uncertain and outside of the Firm’s events that, by their nature, are uncertain and outside of the Firm’s control. The Firm’s actual results and financial condition may control. The Firm’s actual results and financial condition may differ, possibly materially, from what is indicated in those forward- differ, possibly materially, from what is indicated in those forward differ, possibly materially, from what is indicated in those forward differ, possibly materially, from what is indicated in those forward looking statements. For a discussion of some of the risks and looking statements. For a discussion of some of the risks and factors that could affect the Firm’s future results and financial factors that could affect the Firm’s future results and financial condition, please see the description of “Risk Factors” in our condition, please see the description of “Risk Factors” in our current annual report on Form 10-K for our fiscal year ended current annual report on Form 10 t t l l t t F F 10 10 K f K for our fiscal year ended K f fi fi l l d d d d December 2009. December 2009. You should also read the information on the calculation of non You should also read the information on the calculation of non- - GAAP financial measures and the impact of Basel III that is posted GAAP financial measures and the impact of Basel III that is posted on the Investor Relations portion of our website: www.gs.com. on the Investor Relations portion of our website: www.gs.com. The statements in the presentation are current only as of its date, The statements in the presentation are current only as of its date, p p y y , , November 16, 2010. November 16, 2010.
Goldman Sachs Presentation to Goldman Sachs Presentation to Bank of America Merrill Lynch Bank of America Merrill Lynch Banking and Financial Services Banking and Financial Services Conference Conference Lloyd C. Blankfein Lloyd C. Blankfein Chairman & CEO Chairman & CEO November 16, 2010 November 16, 2010 1
Long Long- -Term Trends Term Trends Increased Regulation Increased Regulation g Importance of Technology Importance of Technology Macroeconomic and Demographic Trends Macroeconomic and Demographic Trends Rise of Growth Markets Rise of Growth Markets Strategic Investment and Nimble Resource Allocation Are Key Strategic Investment and Nimble Resource Allocation Are Key g g y y 2
Regulation Regulation Capital & Liquidity Requirements Capital & Liquidity Requirements Capital & Liquidity Requirements Capital & Liquidity Requirements R Safety & Soundness Safety & Soundness Clearing Clearing E Resolution Authority Resolution Authority G U L SEFs / Exchanges SEFs / Exchanges Greater Transparency Greater Transparency A T I I O Proprietary Trading Proprietary Trading N Activity Restrictions Activity Restrictions Fund Investments Fund Investments Fund Investments Fund Investments 3
Regulation Regulation Conservative Financial Position Conservative Financial Position Basel I Tier 1 Common Ratio Basel I Tier 1 Common Ratio ¹ Average Global Average Global Core Excess ($ Core Excess ($bn bn) ) ² Current Projected Basel III Ratio: 8% 184% Increase 184% Increase 2012 Projected Basel III Ratio: 11% 12 2% 12 4% 12 5% 13.0% 12.2% 12.4% 12.5% $173 $171 $167 $163 $162 $163 11.6% $164 10.9% 8.5% $113 $111 $113 $111 $88 $61 1Q09 1Q09 2Q09 2Q09 3Q09 3Q09 4Q09 4Q09 1Q10 1Q10 2Q10 2Q10 3Q10 3Q10 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 ¹ 2012 projected ratio includes contractual roll- ¹ 2012 projected ratio includes contractual roll -off of our correlation portfolio, expected duration of our mortgage securitiza off of our correlation portfolio, expected duration of our mortgage securitization tion book, and 2.5 years of forward earnings at 2010 consensus estimates book, and 2.5 years of forward earnings at 2010 consensus estimates 4 ² 1Q08 and 2Q08 Global Core Excess excludes balances held at GS Bank ² 1Q08 and 2Q08 Global Core Excess excludes balances held at GS Bank
Technology Technology Global Technology Headcount ¹ Global Technology Headcount ¹ Technology Headcount CAGR: 12% Technology Headcount CAGR: 12% Firmwide Firmwide Headcount CAGR: 7% Headcount CAGR: 7% 2003 2004 2005 2006 2007 2008 2009 1 1 Total technology staff excluding Consolidated Investment Entities Total technology staff excluding Consolidated Investment Entities 5
Technology Technology FICC and Equities Scaled FICC and Equities Scaled Global Average Daily Volume¹ Global Average Daily Volume¹ High High- -Touch Touch Low- Low -Touch Touch 2003 2004 2005 2006 2007 2008 2009 2003 2004 2005 2006 2007 2008 2009 Increased transparency drives growth across high and low touch platforms Increased transparency drives growth across high and low touch platforms Ability to leverage best in class technology as markets evolve Abilit t Abilit t Ability to leverage best in class technology as markets evolve l l b b t i t i l l t t h h l l k t k t l l 6 ¹ Scaled for comparative purposes
Macro and Demographic Trends¹ Macro and Demographic Trends¹ GDP GDP — Growth market GDP expected to Growth market GDP expected to increase 8% annually vs. 2% in increase 8% annually vs. 2% in Developed Markets over the next 10yrs Developed Markets over the next 10yrs Urbanization Urbanization — Additional 640mm in India may Additional 640mm in India may Macro Macro urbanize by 2050 (vs. 100mm in US) urbanize by 2050 (vs. 100mm in US) Themes Themes Growing Market Capitalization Growing Market Capitalization — Almost as many companies with >$1bn Almost as many companies with >$1bn market cap in China than in the US and market cap in China than in the US and p Europe combined Europe combined Rising Individual Wealth Rising Individual Wealth — Global middle class may increase by Global middle class may increase by Global middle class may increase by Global middle class may increase by 2bn people by 2030, with 1bn of the 2bn people by 2030, with 1bn of the increase in India increase in India 7 1 1 Source: GS research Source: GS research
Rise of Growth Markets Where We Are Today Firmwide Revenues: 2006 Firmwide Revenues: 2006 – 1H10 Firmwide Revenues: 2006 Firmwide Revenues: 2006 1H10 1H10 1H10 Latin America 9% EMEA 16% Growth Growth Markets Developed 12% Markets Asia 88% 75% 8
Rise of Growth Markets Rise of Growth Markets Drivers of Our Businesses Drivers of Our Businesses GS Opportunity by Business GS Opportunity by Business Asset Asset Sec. Sec. Advisory Advisory Underwriting Underwriting Management Management FICC FICC Equities Equities Services Services GDP Growth GDP Growth Fiscal Stability Fiscal Stability R DRIVER DRIVER Capital Markets Capital Markets Development Development Rising Individual Rising Individual Wealth Wealth Large and Growing Large and Growing g g g g Pools of Capital Pools of Capital 9
Rise of Growth Markets Rise of Growth Markets Headcount by Region¹ Headcount by Region¹ 2003 2004 2005 2006 2007 2008 2009 YTD China Growth Asia² India Middle East Latin America ¹ Core and contingent employees ¹ Core and contingent employees ² ² Comprised of Indonesia, Malaysia, Korea, Singapore, Taiwan, and Thailand Comprised of Indonesia, Malaysia, Korea, Singapore, Taiwan, and Thailand 10
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