Cautionary Note on Forward-Looking Statements Today s s presentation may include forward-looking statements. These statements represent the Firm s s belief regarding future events that, by their nature, are uncertain and outside of the FirmF irm s control. The Firm s s actual results and financial condition may differ, possibly materially, from what is indicated in those forward ward- looking statements. For a discussion of some of the risks and factors that could affect the Firm s s future results and financial condition, please see the description of Risk Factors in our current annual report on Form 10-K K for our fiscal year ended December 2008. 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, February 10, 2010.
Goldman Sachs Presentation to Credit Suisse Financial Services Conference David Viniar Chief Financial Officer February 10, 2010
2009 Key Highlights Net Revenues Net Earnings $45.2bn $13.4bn EPS $22.13 Return on Equity 22.5% 2009 BVPS Change +23% 2007-2009 2009 Average Asset Management 12% Securities Services 7% Investment Banking 15% Mortgages 3% Commodities 24% Equities Commissions 12% Equities Trading 15% FICC 38% Credit 19% Interest Rate Products 35% Currencies 19% Principal Investments 1%
2009 Key Highlights BVPS Performance $117.48 $90.43 $95.84 $72.62 $32.18 $36.33 $38.69 $43.60 $50.77 $57.02 $20.94 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008¹ 2009 ¹ As of December 2008
Outperformance Over the Cycle ROTE Outperformance vs. Peer¹ Average 56.3% 31.9% 27.0% 1.6% 3.8% 4.3% 3.5% 12.7% (0.9)% (1.9)% (2.9)% 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Resource Allocation Strategy Technology Capital Markets and Securities Division Global Expansion ¹ Peer set includes MS, JPM, C, BAC, and BSC and MER where applicable
Proven Resource Allocation Strategy People 32,500 total staff 65 offices worldwide Balance Sheet $850bn in total assets Inventory limits Carry charges Risk VaR Limits Scenario / Stress test limits Market / Credit / Operational Risk
Trading Asset Allocation 1 Macro Assets Micro Assets Equities and Convertibles 78% 10% 6% 3% 30% 21% 29% (8)% (8)% (15)% (2)% (28)% 1Q09 2Q09 3Q09 4Q09 1Q09 2Q09 3Q09 4Q09 1Q09 2Q09 3Q09 4Q09 ¹ Comparison represents sequential change in cash assets. Macro Assets include commercial paper, certificates of deposit, time deposits and other money market instruments, government and U.S. federal agency obligations and physical commodities; Micro Assets include mortgages and other asset-backed loans and securities, bank loans and bridge loans and corporate debt securities and other debt obligations; Equities and Convertibles excludes principal investments
The Role of Technology at GS Sales & Trading Risk / Position Management Exchanges Transaction Processing / Confirmations / Clearing & Settlement Listed Derivatives Securities Loans Repo/ Stock Loan OTC Derivatives Clearing Agents Books & Records General Ledger Sub-Ledger Market/ Credit Risk Regulators
Investing in Capacity Electronic Trading 100 Transaction Counts (mm) Capacity as Multiple of Peak Volume 7.0x 80 6.0x 5.0x 60 4.0x 40 3.0x 20 2.0x 1.0x 0 Sep-07 Feb-08 Jul-08 Dec-08 May-09 0.0x Sep-07 Feb-08 Jul-08 Dec-08 May-09
Core FICC and Equities Performance¹ GS has demonstrated through-the the-cycle revenue growth with a 25% CAGR since 2003 2003 2004 2005 2006 2007 2008 2009 FICC Equities ¹ Core FICC and Equities excludes publicly disclosed losses on leveraged loans and residential and commercial real estate and is net of CVA gains/losses from the impact of our credit spreads on certain long-term debt; in addition proprietary investing businesses are excluded. Equities includes Securities Services revenues.
Diverse Securities Division Clients $ billions Average Top 10 Asset Manager AUMs¹ Long-term Mutual Funds² +100% $ 1,000 $6,200 +24% $7,700 $ 500 2004 2009 U.S. Corporate Assets³ 2004 2009 Hedge Funds⁴ $19,200 +26% $24,200 $973 +64% $1,600 2004 2009 2004 2009 Sources: ¹ McKinsey.com; ² ISI and GS Estimates; ³ Compustat; ⁴ GS Estimates
Franchise Synergy Investment Banking Securities Division Advisory FX Commodities Equity Underwriting Equity Trading Debt Underwriting FX Interest Rates
Diversity of Our FICC and Equities Franchise Developed Markets High Growth Markets Currencies Rates Commodities Credit Mortgages Securities Services Equities Derivatives Equities Cash Electronic Dominant Overweight Equal weight Underweight
Increasing Importance of Growth Markets Macroeconomic Trends Real GDP 1 Δ = $21tr Δ = $9tr CAGR: CAGR: 7.6% 7.6% $39 CAGR: 1.9% $39 $48 $18 Growth Markets 2009E 2020E Developed Markets % of Global Equity Market Capitalization 2 Growth Markets Developed Markets Current 34% 66% In ~20 Years 51 49 Source: GS Research Estimates 1 Factors in currency appreciation 2 Current as of December 2009, projected as of December 2028
Global Expansion Latin America Investment Banking Securities Trading Asset Management and Private Wealth Management Russia Investment Banking Securities Trading Private Wealth Management 1 Principalling Middle East Investment Banking Asset Management and Private Wealth Management India Investment Banking Securities Trading Principalling 1 Korea Investment Banking Securities Trading Principalling 1 Asset Management China Investment Banking Securities Trading Principalling 1 Private Wealth Management 1 Denotes offshore capabilities
Case Study on Brazil Equity Landmark Deals M&A Landmark Deals $4.3bn $3.7bn $4.3bn sale to R$870 mm sale to IPO IPO $532mm IPO $1.2bn IPO 1.2bn acquisition of Brazil Bus & Truck Business of $18bn merger with Licenses Brazil bank license FX license Equities Broker Dealer Asset Management license Awards Best Sovereign Issuer: Brazil GS was joint-lead underwriter on US$1bn landmark Brazil 10-year issuance in January 2009 as well as on the subsequent reopening of the bond for $500mm in December Best Cross-Border M&A Deal: CSN sale of Namisa GS was the exclusive advisor to CSN in its sale of a 40% stake in Namisa to an Asia-based consortium Best Private Equity Deal: Advent International-Cetip GS was the exclusive advisor to Advent on Latin America s largest private equity deal in 2009
GS Stock Performance 400% GS S&P 500 S&P Financials Index 350% 300% 250% 200% 127.0% 150% 100% 50% (18.1)% (44.8)% 0% May-99 Feb-01 Dec-02 Sep-04 Jul-06 Apr-08 Jan-10
Goldman Sachs Presentation to Credit Suisse Financial Services Conference David Viniar Chief Financial Officer February 10, 2010