Overview of Goldman Sachs Cautionary Note on Forward-Looking - - PowerPoint PPT Presentation

Overview of Goldman Sachs

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Cautionary Note on Forward-Looking Statements

Today’s presentation may include forward-looking statements. These statements represent the Firm’s belief regarding future events that, by their nature, are uncertain and outside of the Firm’s control. The Firm’s actual results and financial condition may differ, possibly materially, from what is indicated in those forward- looking statements. For a discussion of some of the risks and factors that could affect the Firm’s future results, please see the description of “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended 30 November 2007. You should also read the information on the calculation of non-GAAP financial measures that is posted on the Investor Relations portion of our website: www.gs.com. The statements in the presentation are current only as of its date.

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Introduction to Goldman Sachs

A leading global investment bank with broad and diverse businesses

• Investment Banking
• Sales and Trading
• Principal Investing
• Asset Management and Securities Services

Focused strategy to grow our core businesses Straightforward financial goal

• Return on tangible common equity > 20% over the cycle

People, culture and reputation are the keys to our long-term success

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Goldman Sachs Financial Performance

Net Revenues ($mm) Net Earnings ($mm) & ROTCE(1) (%)

(1) Return on Tangible Common Equity

16,023 20,951 25,238 37,665 45,987 23,800

$0 $10,000 $20,000 $30,000 $40,000 $50,000 2003 2004 2005 2006 2007 2008 YTD

4,443 3,005 4,553 5,626 9,537 11,599

16.3% 26.7% 19.9% 25.2% 39.8% 38.2%

$0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 2003 2004 2005 2006 2007 2008 YTD Net Earnings ROTCE

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Long Term Growth

Net Revenues 1985 to 2007 ($ in billions)

(1) Compound Annual Growth Rate; Source: International Monetary Fund

1985 to 2007 Global GDP CAGR(1): 7% GS Net Revs CAGR: 17%

1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

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2008 YTD Highlights

Total: $23.8bn

Highlights Net Revenue Composition(1)

(1) Net Revenue composition excludes Principal Investments for 2008 YTD (2) League Table Source: Thomson Reuters. Rankings are global; on a calendar-year basis - January 1, 2008 through August 29, 2008

Net Revenues $23.8bn Net Earnings $4.4bn Diluted EPS $9.62 Pre-tax Margin 24.9% ROCE 14.2% ROTCE 16.3% Announced M&A(2) #1

Investment Banking 17% FICC 30% Equities 27% Asset Mgmt 15% Securities Services 11%

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Investment Banking

GS Leadership and Net Revenues ($mm)

Underwriting Financial Advisory

League Table Source: Thomson Reuters. Rankings are global; on a calendar-year basis - January 1, 2008 through August 29, 2008. Represents Announced M&A

2003 2004 2005 2006 2007 2008 YTD M&A Ranking #1 #1 #1 #1 #1 #1

1,202 2,580 4,222 2,082 1,637 1,766 3,049 3,333 2,069 2,711 3,374 3,671 5,629 7,555 1,905 1,737 1,509 4,151

$0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 $8,000

2003 2004 2005 2006 2007 2008 YTD

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Fixed Income, Currency & Commodities

Credit Products Interest Rate Products Mortgages Currencies Commodities Net Revenues ($mm) Diverse Business

7,116 16,165 14,262 8,940 7,723 5,607

$0 $1,500 $3,000 $4,500 $6,000 $7,500 $9,000 $10,500 $12,000 $13,500 $15,000 $16,500 $18,000 2003 2004 2005 2006 2007 2008 YTD

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Equities

Customer Franchise Business Principal Strategies Specialist Activities Insurance Activities Net Revenues ($mm) Diverse Business

6,563 11,304 8,483 5,650 4,673 4,281

$0 $1,500 $3,000 $4,500 $6,000 $7,500 $9,000 $10,500 $12,000 2003 2004 2005 2006 2007 2008 YTD

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Principal Investments

SMFG

Total: $24.2bn

Net Revenues ($mm) 3Q 2008 Carrying Value

(1) Includes Other Corporate and Real Estate gains and losses, and Overrides; starting in 1Q08 this also includes Sumitomo Mitsui Financial Group; as of February 2008, we had hedged all

• f the common stock underlying our investment in SMFG

(2) Includes economic interests of $4.51bn as of August 2008 assumed by investment funds managed by Goldman Sachs

Corporate and Real Estate(1) ICBC(2)

Real Estate 16% ICBC 29% Corporate 55% 293 1475 527 566 1,332 2,228 2,817 3,391 1,353 753 561 273 (129) 771 937 495 185 3,757

• 260

($600) ($200) $200 $600 $1,000 $1,400 $1,800 $2,200 $2,600 $3,000 $3,400 $3,800 2003 2004 2005 2006 2007 2008 YTD

• 445

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Asset Management

Assets Under Management ($bn) Net Revenues ($mm)

Fixed Income and Currency Money Markets Equity Alternative Investments

154 198 256 268 101 118 206 262 104 133 167 215 255 179 110 145 151 154 373 452 532 676 868 112 134 89 89 95 68 863

$0 $100 $200 $300 $400 $500 $600 $700 $800 $900 2003 2004 2005 2006 2007 2008 YTD

3,607 4,490 4,294 2,956 2,553 1,853

$0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 $4,500 2003 2004 2005 2006 2007 2008 YTD

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Securities Services

Net Revenues ($mm) Market Leading Franchise Growth driven by:

• Hedge fund formation
• Asset inflows and growth
• Leading market share

Significant recurring fee revenue

2,623 2,716 2,180 1,793 1,296 1,005

$0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 $1,800 $2,000 $2,200 $2,400 $2,600 $2,800 $3,000 2003 2004 2005 2006 2007 2008 YTD

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Equity Capital Base ($bn)

Significant equity base sized relative to regulatory capital requirements, other external benchmarks, subsidiary capital requirements and our overall risk profile Effective April 1, 2005, GS Group became a CSE and is now subject to consolidated supervision by the SEC and a minimum capital requirement Issued Trust Preferred, Perpetual Preferred and Automatic Preferred Enhanced Capital Securities to optimize our capital base

Hybrids(1) Perpetual Preferred Common Equity

(1) Includes trust preferred and automatic preferred enhanced capital securities

21.6 25.1 26.3 32.7 39.7

1.8 3.1 3.1 3.1 2.8 2.8 2.8 5.0 5.0

42.5

$0 $5 $10 $15 $20 $25 $30 $35 $40 $45 $50 2003 2004 2005 2006 2007 2008 YTD

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Conservative Funding Profile

Unsecured Short-term Borrowings = $64.7bn Unsecured Long-term Borrowings = $176.4bn

F1+ A-1+ P-1 Ratings Fitch S&P Moody’s R-1 (middle) DBRS AA- AA- Aa3 Ratings Fitch S&P Moody’s AA (low) DBRS

Weighted Average Years to Maturity: Approximately 8 years

Global Bonds - USD 32% Global Bonds - Other 17% Samurai Bonds 2% U.S. MTNs 13% Euro MTNs 21% Subordinated Debt 8% Hybrids 3% Other 4%

Current LTD 42% Hybrid Debt 29% Prom Notes 13% Other 14% CP 2%

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Conservative and Comprehensive Liquidity Risk Management Framework

Pre-Funded Excess Liquidity Asset-Liability Management

• Asset Quality and Balance Sheet Composition
• Total Capital Surplus
• Conservative Spacing of Debt Maturities
• Focus on Diversification and Depth of Funding

Prudent Intercompany Funding Policies Continuing Liquidity Stress Testing and Crisis Planning

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Pre-Funded Excess Liquidity

Pre-Funded Potential Outflows Disruptions to unsecured and secured financing flows Collateral outflows Draws on unfunded commitments Other upcoming cash outflows Global Core Excess

USD 90.5 EUR/GBP 4.6 JPY 7.2 Total 102.3 Currency Average Loan Value ($bn)

Note: Data for the quarter ended August 29, 2008

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Market and Credit Risk Tools

Credit Risk Fundamental Credit Analysis at Sovereign, Industry, and Company Levels Current Exposure Expected Exposure Stress Tests Use of Netting, Triggers, and Collateral Market Risk Value at Risk (VaR) Stress Tests, including but not limited to:

• Credit Spread Widening
• Equity Crash
• Emerging Markets

Idiosyncratic Risk of Loss Single Name Limits Asset Liquidity Considerations Focus on Crowded Trades

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Credit Summary

Leading firm providing advisory and underwriting services Diversified trading operations with sound risk management policies Significant growth in, and more stable revenue streams from, asset management and securities services Well capitalized with excess liquidity Focus on risk management