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The Goldman Sachs Group, Inc. (GS) today reported net revenues of
$8.35 billion and net earnings of $1.51 billion for the third quarter
ended September 30, 2012. Diluted earnings per common share were $2.85
compared with a diluted loss per common share of $0.84 for the third
quarter of 2011 and diluted earnings per common share of $1.78 for the
second quarter of 2012. Annualized return on average common
shareholders’ equity (ROE) (1) was 8.6% for the third
quarter of 2012 and 8.8% for the first nine months of 2012.
Highlights
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Goldman Sachs continued its leadership in investment banking, ranking
first in worldwide announced and completed mergers and acquisitions
for the year-to-date. (2)
--
The firm ranked first in worldwide equity and equity-related offerings
and common stock offerings for the year-to-date. (2)
--
Book value per common share and tangible book value per common share (3)
both increased approximately 3% during the quarter to $140.58 and
$129.69, respectively.
--
The firm continues to manage its liquidity and capital conservatively.
The firm’s global core excess liquidity (4) was $170
billion (5) as of September 30, 2012. In addition, the
firm’s Tier 1 capital ratio under Basel 1 (6) was
15.0% (5) and the firm’s Tier 1 common ratio under
Basel 1 (7) was 13.1% (5) as of
September 30, 2012.
_____________
"This quarter’s performance was generally solid in the context of a
still challenging economic environment," said Lloyd C. Blankfein,
Chairman and Chief Executive Officer. "We continue to be disciplined in
managing our operations and capital, while effectively serving our
clients’ needs. The focus on these priorities will serve our
shareholders and the firm well over the longer term."
Net Revenues
Investment Banking
Net revenues in Investment Banking were $1.16 billion, 49% higher than
the third quarter of 2011 and 3% lower than the second quarter of 2012.
Net revenues in Financial Advisory were $509 million, slightly lower
compared with the third quarter of 2011. Net revenues in the firm’s
Underwriting business were $655 million, more than double the amount in
the third quarter of 2011, which had particularly low volumes. This
increase primarily reflected significantly higher net revenues in debt
underwriting, principally due to higher net revenues from leveraged
finance activity. Net revenues in equity underwriting were higher
compared with the third quarter of 2011, primarily reflecting an
increase in client activity. The firm’s investment banking transaction
backlog declined slightly compared with the end of the second quarter of
2012. (8)
Institutional Client Services
Net revenues in Institutional Client Services were $4.18 billion, 3%
higher than the third quarter of 2011 and 8% higher than the second
quarter of 2012.
Net revenues in Fixed Income, Currency and Commodities Client Execution
were $2.22 billion, 28% higher than the third quarter of 2011. This
increase reflected significantly higher net revenues in mortgages and
higher net revenues in credit products, currencies and interest rate
products, partially offset by significantly lower net revenues in
commodities. During the third quarter of 2012, Fixed Income, Currency
and Commodities Client Execution operated in an environment generally
characterized by tighter credit spreads, as certain central banks took
steps to ease monetary policy; however, broad market concerns persisted
and levels of activity generally remained low.
Net revenues in Equities were $1.96 billion, 16% lower than the third
quarter of 2011, primarily due to significantly lower commissions and
fees, reflecting lower market volumes, and lower net revenues in
equities client execution. In addition, net revenues in securities
services were slightly lower compared with the third quarter of 2011,
primarily reflecting the impact of lower average customer balances.
During the quarter, Equities operated in an environment generally
characterized by an increase in global equity prices and 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 $370 million ($225 million and $145 million related to Fixed Income,
Currency and Commodities Client Execution and equities client execution,
respectively) for the third quarter of 2012, compared with a net gain of
$450 million ($308 million and $142 million related to Fixed Income,
Currency and Commodities Client Execution and equities client execution,
respectively) for the third quarter of 2011.
Investing & Lending
Net revenues in Investing & Lending were $1.80 billion for the third
quarter of 2012. Investing & Lending net revenues were positively
impacted by tighter credit spreads and an increase in global equity
prices. Results for the third quarter of 2012 included a gain of $99
million from the firm’s investment in the ordinary shares of Industrial
and Commercial Bank of China Limited (ICBC), net gains of $824 million
from other investments in equities, primarily in private equities, net
gains and net interest income of $558 million from debt securities and
loans, and other net revenues of $323 million, principally related to
the firm’s consolidated investment entities.
Investment Management
Net revenues in Investment Management were $1.20 billion, 2% lower than
the third quarter of 2011 and 10% lower than the second quarter of 2012.
The decrease in net revenues compared with the third quarter of 2011
reflected lower transaction revenues and slightly lower management and
other fees, partially offset by higher incentive fees. During the
quarter, assets under management increased $20 billion to $856 billion,
reflecting net market appreciation.
Expenses
Operating expenses were $6.05 billion, 40% higher than the third quarter
of 2011 and 16% higher than the second quarter of 2012.
Compensation and Benefits
The accrual for compensation and benefits expenses (including salaries,
estimated year-end discretionary compensation, amortization of equity
awards and other items such as benefits) for the third quarter of 2012
was $3.68 billion, which was higher than the third quarter of 2011, due
to higher net revenues. The ratio of compensation and benefits to net
revenues for the first nine months of 2012 was 44.0%, consistent with
the first nine months of 2011.
Non-Compensation Expenses
Non-compensation expenses were $2.38 billion, 13% lower than the third
quarter of 2011 and 4% higher than the second quarter of 2012. The
decrease compared with the third quarter of 2011 primarily reflected
lower brokerage, clearing, exchange and distribution fees which
principally reflected lower transaction volumes in Equities, lower
expenses related to the U.K. bank levy (approximately $100 million
related to the enactment of the U.K. bank levy was included in other
expenses in the third quarter of 2011) and the impact of expense
reduction initiatives. The third quarter of 2012 included net provisions
for litigation and regulatory proceedings of $62 million.
Provision for Taxes
The effective income tax rate for the first nine months of 2012 was
33.5%, up slightly from 33.2% for the first half of 2012.
Capital
As of September 30, 2012, total capital was $241.57 billion, consisting
of $73.69 billion in total shareholders’ equity (common shareholders’
equity of $68.34 billion and preferred stock of $5.35 billion) and
$167.88 billion in unsecured long-term borrowings. Book value per common
share was $140.58 and tangible book value per common share (3)
was $129.69, both approximately 3% higher compared with the end of the
second quarter of 2012. Book value 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
486.1 million at period end.
On September 4, 2012, The Goldman Sachs Group, Inc. (Group Inc.) issued
5,000.1 shares of Perpetual Non-Cumulative Preferred Stock, Series F
(Series F Preferred Stock), for aggregate proceeds of $500 million.
During the quarter, the firm repurchased 11.8 million shares of its
common stock at an average cost per share of $106.17, for a total cost
of $1.25 billion. The remaining share authorization under the firm’s
existing repurchase program is 34.2 million shares. (9)
Under the regulatory capital guidelines currently applicable to bank
holding companies (Basel 1), the firm’s Tier 1 capital ratio (6)
was 15.0% (5) and the firm’s Tier 1 common ratio (7)
was 13.1% (5) as of September 30, 2012, both
unchanged compared with June 30, 2012.
Other Balance Sheet and Liquidity Metrics
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The firm’s global core excess liquidity (4) was
$170 billion (5) as of September 30, 2012 and
averaged $175 billion (5) for the third quarter
of 2012, compared with an average of $174 billion for the second
quarter of 2012.
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Total assetswere $949 billion (5) as
of September 30, 2012, unchanged compared with June 30, 2012.
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Level 3 assetswere $48 billion (5)
as of September 30, 2012, compared with $47 billion as of
June 30, 2012 and represented 5.0% of total assets.
Dividends
The Board of Directors of Group Inc. increased the firm’s quarterly
dividend to $0.50 per common share from $0.46 per common share. The
dividend will be paid on December 28, 2012 to common shareholders of
record on November 30, 2012. The firm declared dividends of $247.40,
$387.50, $263.89 and $263.89 per share of Series A Preferred Stock,
Series B Preferred Stock, Series C Preferred Stock and Series D
Preferred Stock, respectively (represented by depositary shares, each
representing a 1/1,000th interest in a share of preferred stock), to be
paid on November 13, 2012 to preferred shareholders of record on
October 29, 2012. In addition, the firm declared a dividend of $1,000.00
per share of Series E Preferred Stock and $1,000.00 per share of
Series F Preferred Stock to be paid on December 3, 2012 to preferred
shareholders of record on November 18, 2012.
______________
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 Part I, Item 1A
of the firm’s Annual Report on Form 10-K for the year ended
December 31, 2011.
Certain of the information regarding the firm’s capital ratios,
risk-weighted assets, total assets, level 3 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 Part I,
Item 1A of the firm’s Annual Report on Form 10-K for the year ended
December 31, 2011.
Conference Call
A conference call to discuss the firm’s 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 (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 89062398, 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
Three Months Ended % Change From
--------------------------------------------------- ---------------------------
September 30, June 30, September 30, June 30, September 30,
2012 2012 2011 2012 2011
------------- ----------------- ----------------- ---------- --------------
Investment Banking
Financial Advisory $ 509 $ 469 $ 523 9 % (3 ) %
Equity underwriting 189 239 90 (21 ) 110
Debt underwriting 466 495 168 (6 ) 177
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Total Underwriting 655 734 258 (11 ) 154
Total Investment Banking 1,164 1,203 781 (3 ) 49
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Institutional Client Services
Fixed Income, Currency and Commodities Client Execution 2,224 2,194 1,731 1 28
Equities client execution 847 510 903 66 (6 )
Commissions and fees 721 776 1,019 (7 ) (29 )
Securities services 392 409 409 (4 ) (4 )
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Total Equities 1,960 1,695 2,331 16 (16 )
Total Institutional Client Services 4,184 3,889 4,062 8 3
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Investing & Lending
ICBC 99 (194 ) (1,045 ) N.M. N.M.
Equity securities (excluding ICBC) 824 (112 ) (1,004 ) N.M. N.M.
Debt securities and loans 558 222 (907 ) 151 N.M.
Other 323 287 477 13 (32 )
Total Investing & Lending 1,804 203 (2,479 ) N.M. N.M.
------ ------ ------ ---- ---- ------
Investment Management
Management and other fees 1,016 1,019 1,044 - (3 )
Incentive fees 82 217 45 (62 ) 82
Transaction revenues 101 96 134 5 (25 )
Total Investment Management 1,199 1,332 1,223 (10 ) (2 )
------ ------ ------ ---- ---- ------ ------
Total net revenues $ 8,351 $ 6,627 $ 3,587 26 133
==== ====== ==== ====== ==== ====== ==== ======
Nine Months Ended % Change From
-------------------------------- -----------------
September 30, September 30, September 30,
2012 2011 2011
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Investment Banking
Financial Advisory $ 1,467 $ 1,517 (3 ) %
Equity underwriting 683 894 (24 )
Debt underwriting 1,371 1,087 26
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Total Underwriting 2,054 1,981 4
Total Investment Banking 3,521 3,498 1
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Institutional Client Services
Fixed Income, Currency and Commodities Client Execution 7,876 7,655 3
Equities client execution 2,407 2,505 (4 )
Commissions and fees 2,331 2,851 (18 )
Securities services 1,168 1,213 (4 )
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Total Equities 5,906 6,569 (10 )
Total Institutional Client Services 13,782 14,224 (3 )
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Investing & Lending
ICBC 74 (905 ) N.M.
Equity securities (excluding ICBC) 1,603 736 118
Debt securities and loans 1,365 317 N.M.
Other 876 1,122 (22 )
Total Investing & Lending 3,918 1,270 N.M.
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Investment Management
Management and other fees 3,038 3,172 (4 )
Incentive fees 357 182 96
Transaction revenues 311 416 (25 )
Total Investment Management 3,706 3,770 (2 )
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Total net revenues $ 24,927 $ 22,762 10
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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
--------------------------------------------- ---------------------------
September 30, June 30, September 30, June 30, September 30,
2012 2012 2011 2012 2011
------------- ----------- ----------------- ---------- --------------
Revenues
Investment banking $ 1,168 $ 1,206 $ 781 (3 ) % 50 %
Investment management 1,147 1,266 1,133 (9 ) 1
Commissions and fees 748 799 1,056 (6 ) (29 )
Market making 2,650 2,097 1,800 26 47
Other principal transactions 1,802 169 (2,539 ) N.M. N.M.
------ ------ ------ ---- ---- ------
Total non-interest revenues 7,515 5,537 2,231 36 N.M.
Interest income 2,629 3,055 3,354 (14 ) (22 )
Interest expense 1,793 1,965 1,998 (9 ) (10 )
------ ------ ------ ---- ---- ------ ------
Net interest income 836 1,090 1,356 (23 ) (38 )
------ ------ ------ ---- ---- ------ ------
Net revenues, including net interest income 8,351 6,627 3,587 26 133
------ ------ ------ ---- ------
Operating expenses
Compensation and benefits 3,675 2,915 1,578 26 133
Brokerage, clearing, exchange and distribution fees 547 544 668 1 (18 )
Market development 123 129 140 (5 ) (12 )
Communications and technology 190 202 209 (6 ) (9 )
Depreciation and amortization 396 409 389 (3 ) 2
Occupancy 217 214 262 1 (17 )
Professional fees 205 213 253 (4 ) (19 )
Insurance reserves 153 121 197 26 (22 )
Other expenses 547 465 621 18 (12 )
------ ------ ------ ---- ------ ------
Total non-compensation expenses 2,378 2,297 2,739 4 (13 )
Total operating expenses 6,053 5,212 4,317 16 40
------ ------ ------ ---- ------
Pre-tax earnings / (loss) 2,298 1,415 (730 ) 62 N.M.
Provision / (benefit) for taxes 786 453 (337 ) 74 N.M.
------ ------ ------ ---- ---- ------
Net earnings / (loss) 1,512 962 (393 ) 57 N.M.
Preferred stock dividends 54 35 35 54 54
------ ------ ------ ---- ------
Net earnings / (loss) applicable to common shareholders $ 1,458 $ 927 $ (428 ) 57 N.M.
==== ====== == ====== ==== ====== ==== ==== ======
Earnings / (loss) per common share(10)
Basic $ 2.95 $ 1.83 $ (0.84 ) 61 % N.M. %
Diluted 2.85 1.78 (0.84 ) 60 N.M.
Average common shares outstanding
Basic 491.2 501.5 518.2 (2 ) (5 )
Diluted 510.9 520.3 518.2 (2 ) (1 )
Selected Data
Total staff at period-end (11) 32,600 32,300 34,200 1 (5 )
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES CONSOLIDATED
STATEMENTS OF EARNINGS (UNAUDITED) In millions,
except per share amounts
Nine Months Ended % Change From
---------------------------- --------------
September 30, September 30, September 30,
2012 2011 2011
------------- ------------- --------------
Revenues
Investment banking $ 3,534 $ 3,498 1 %
Investment management 3,518 3,495 1
Commissions and fees 2,407 2,969 (19 )
Market making 8,652 7,998 8
Other principal transactions 3,909 675 N.M.
------ ------ ------
Total non-interest revenues 22,020 18,635 18
Interest income 8,517 10,142 (16 )
Interest expense 5,610 6,015 (7 )
------ ------ ------ ------
Net interest income 2,907 4,127 (30 )
------ ------ ------ ------
Net revenues, including net interest income 24,927 22,762 10
------ ------ ------
Operating expenses
Compensation and benefits 10,968 10,015 10
Brokerage, clearing, exchange and distribution fees 1,658 1,903 (13 )
Market development 369 502 (26 )
Communications and technology 588 617 (5 )
Depreciation and amortization 1,238 1,351 (8 )
Occupancy 643 781 (18 )
Professional fees 652 749 (13 )
Insurance reserves 431 402 7
Other expenses 1,486 1,520 (2 )
------ ------ ------ ------
Total non-compensation expenses 7,065 7,825 (10 )
Total operating expenses 18,033 17,840 1
------ ------ ------
Pre-tax earnings 6,894 4,922 40
Provision for taxes 2,311 1,493 55
------ ------ ------
Net earnings 4,583 3,429 34
Preferred stock dividends 124 1,897 (93 )
------ ------ ------ ------
Net earnings applicable to common shareholders $ 4,459 $ 1,532 191
==== ====== ==== ====== ======
Earnings per common share
Basic (10) $ 8.85 $ 2.84 N.M. %
Diluted 8.57 2.70 N.M.
Average common shares outstanding
Basic 501.1 530.1 (5 )
Diluted 520.1 566.6 (8 )
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES SELECTED
FINANCIAL DATA (UNAUDITED)
Average Daily VaR (12)
$ in millions
Three Months Ended
--------------------------------------------
September 30, June 30, September 30,
2012 2012 2011
--------------- ---------- ---------------
Risk Categories
Interest rates $ 73 $ 83 $ 90
Equity prices 21 23 24
Currency rates 12 16 15
Commodity prices 22 20 25
Diversification effect (12) (47 ) (50 ) (52 )
---- ---- --- -- ---- ----
Total $ 81 $ 92 $ 102
==== ==== == === ==== ====
Assets Under Management (13)
$ in billions
As of % Change From
-------------------------------------------- ----------------------------
September 30, June 30, September 30, June 30, September 30,
2012 2012 2011 2012 2011
--------------- ---------- --------------- ---------- --------------
Asset Class
Alternative investments $ 136 $ 137 $ 144 (1 ) % (6 ) %
Equity 135 127 123 6 10
Fixed income 378 363 347 4 9
---- --- ---- ---- ------
Total non-money market assets 649 627 614 4 6
Money markets 207 209 207 (1 ) -
---- --- ---- ---- ---- ------
Total assets under management $ 856 $ 836 $ 821 2 4
==== ==== == === ==== ==== ==== ======
Three Months Ended
--------------------------------------------
September 30, June 30, September 30,
2012 2012 2011
--------------- ---------- ---------------
Balance, beginning of period $ 836 $ 824 $ 844
Net inflows / (outflows)
Alternative investments (3 ) (1 ) -
Equity (1 ) (2 ) -
Fixed income 5 12 (5 )
---- --- ---- ----
Total non-money market net inflows / (outflows) 1 9 (5 )
Money markets (2 ) 7 11
---- ---- --- ----
Total net inflows / (outflows)(14) (1 ) 16 6
Net market appreciation / (depreciation) 21 (4 ) (29 )
Balance, end of period $ 856 $ 836 $ 821
==== ==== == === ==== ====
Footnotes
(1) Annualized ROE is computed by dividing annualized net earnings
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 Months Ended Nine Months Ended
Unaudited, in millions September 30, 2012 September 30, 2012
------------------------------------------------------ ---------------- ---------------
Total shareholders’ equity $ 73,043 $ 71,750
Preferred stock (4,975 ) (3,850 )
------------------------------------------------------ ------ ---- ------ ---
Common shareholders’ equity $ 68,068 $ 67,900
====================================================== ====== ====== ==== ====== ====== ===
(2) Thomson Reuters - January 1, 2012 through September 30, 2012.
(3) 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 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 millions September 30, 2012
--------------------------------------------------------------- ----------------
Total shareholders’ equity $ 73,687
Preferred stock (5,350 )
--------------------------------------------------------------- ------ ----
Common shareholders’ equity 68,337
Goodwill and identifiable intangible assets (5,296 )
--------------------------------------------------------------- ------ ----
Tangible common shareholders’ equity $ 63,041
=============================================================== ====== ====== ====
(4) 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 "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 June30,2012.
(5) Represents a preliminary estimate as of the date of this earnings
release and may be revised in the firm’s Quarterly Report on
Form10-Q for the period ended September30,2012.
(6) The Tier1 capital ratio equals Tier1 capital divided by
risk-weighted assets. The firm’s risk-weighted assets under the
Board of Governors of the Federal Reserve System’s general
risk-based capital requirements (Basel1) were approximately
$435billion as of September30,2012. 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 June30,2012.
(7) The Tier1 common ratio equals Tier1 common capital divided by
risk-weighted assets. As of September30,2012, Tier1 common
capital was $57.13billion, consisting of Tier1 capital of
$65.23billion less preferred stock of $5.35billion and junior
subordinated debt issued to trusts of $2.75billion. Management
believes that the Tier1 common ratio is meaningful because it is
one of the measures that the firm 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 June30,2012.
(8) The firm’s investment banking transaction backlog represents an
estimate of the firm’s future net revenues from investment banking
transactions where management believes that future revenue
realization is more likely than not.
(9) The remaining share 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, Item1 "Financial Statements" in the firm’s Quarterly
Report on Form10-Q for the period ended June30,2012, share
repurchases require approval by the Board of Governors of the
Federal Reserve System.
(10) 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 applying this methodology was a reduction in
basic earnings per common share of $0.02 for both the three months
ended September30,2012 and June30,2012, and $0.05 for both the
nine months ended September30,2012 and September30,2011. In
addition, the impact of applying this methodology for the three
months ended September30,2011 was a loss per common share (basic
and diluted) of $0.01.
(11) Includes employees, consultants and temporary staff.
(12) 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 equals
the difference between total VaR and the sum of the VaRs for the
four risk categories. 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 June30,2012.
(13) Assets under management include client assets where the firm earns
a fee for managing assets on a discretionary basis.
(14) Three months ended June30,2012 includes $17billion of fixed
income asset inflows in connection with the firm’s acquisition of
Dwight Asset Management Company LLC. Three months ended
September30,2011 includes $6 billion of asset inflows across all
asset classes in connection with the firm’s acquisitions of
Goldman Sachs Australia Pty Ltd and Benchmark Asset Management
Company Private Limited.
SOURCE: The Goldman Sachs Group, Inc.
The Goldman Sachs Group, Inc.
Media Relations:
Jake Siewert, 212-902-5400Investor Relations:
Dane E. Holmes, 212-902-0300
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