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Goldman Sachs 2011 Annual Report
A key alliance
A timely turnaround
A thriving community
A global opportunity
What does it take
to make things happen?
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Insight, experience and
strategic advice, when
they’re needed most.
The Goldman Sachs Business Principles
Our clients’ interests always come first. We stress teamwork in everything we do.
Our experience shows that if we serve our clients well, While individual creativity is always encouraged,
our own success will follow. we have found that team effort often produces the
best results. We have no room for those who put their
Our assets are our people, capital and reputation. personal interests ahead of the interests of the firm
and its clients.
If any of these is ever diminished, the last is the most
difficult to restore. We are dedicated to complying fully
with the letter and spirit of the laws, rules and ethical The dedication of our people to the firm and the
principles that govern us. Our continued success intense effort they give their jobs are greater than
depends upon unswerving adherence to this standard. one finds in most other organizations.
We think that this is an important part of our success.
Our goal is to provide superior returns to
our shareholders. We consider our size an asset that we try hard
Profitability is critical to achieving superior returns, to preserve.
building our capital, and attracting and keeping our best We want to be big enough to undertake the largest
people. Significant employee stock ownership aligns the project that any of our clients could contemplate, yet
interests of our employees and our shareholders. small enough to maintain the loyalty, the intimacy
and the esprit de corps that we all treasure and that
We take great pride in the professional quality contribute greatly to our success.
of our work.
We have an uncompromising determination to achieve We constantly strive to anticipate the rapidly
excellence in everything we undertake. Though we changing needs of our clients and to develop
may be involved in a wide variety and heavy volume of new services to meet those needs.
activity, we would, if it came to a choice, rather be best We know that the world of finance will not stand still
than biggest. and that complacency can lead to extinction.
We stress creativity and imagination in We regularly receive confidential information

everything we do. as part of our normal client relationships.
While recognizing that the old way may still be the best To breach a confidence or to use confidential
way, we constantly strive to find a better solution to information improperly or carelessly would
a client’s problems. We pride ourselves on having be unthinkable.
pioneered many of the practices and techniques that
have become standard in the industry. Our business is highly competitive, and
we aggressively seek to expand our client
We make an unusual effort to identify and recruit relationships.
the very best person for every job. However, we must always be fair competitors and
Although our activities are measured in billions of dollars, must never denigrate other firms.
we select our people one by one. In a service business,
we know that without the best people, we cannot be the Integrity and honesty are at the heart
best firm. of our business.
We expect our people to maintain high ethical
We offer our people the opportunity to move ahead standards in everything they do, both in their work
more rapidly than is possible at most other places. for the firm and in their personal lives.
Advancement depends on merit and we have yet to
find the limits to the responsibility our best people are
able to assume. For us to be successful, our men and
women must reflect the diversity of the communities
and cultures in which we operate. That means we
must attract, retain and motivate people from many
backgrounds and perspectives. Being diverse is not
optional; it is what we must be.
Without raising capital, how
can a promising company expect
to fuel essential innovation?
Without managing risk, how can
a business run smoothly, or an
investor confidently look ahead?
The answer is, they can’t.
And that’s where we come in.
Across the globe, our job is to

help our clients succeed at critical
moments. And their success benefits
all of society, not in the abstract,
but in the very real world.
Fellow Shareholders: franchise. We finished 2011 with one of our best
performances as a public company across the global
league tables, ranked first in worldwide announced
mergers and acquisitions (M&A), equity and equity-
We began 2011 encouraged by an increase in client related offerings, common stock offerings and IPOs.
activity, greater CEO confidence, and early signs that
Given the strength of our client franchise across
economies were on the mend, but soon after experienced
global capital markets, when economies and markets
new measures of macro uncertainty that ultimately
improve — and we see some encouraging signs of
hindered a broad-based recovery.
this — we are confident Goldman Sachs will be well-
Challenges facing the Euro area advanced from a positioned to provide further value to our clients and
regional consideration to a global issue, leading to shareholders. As we help our clients manage through
concerns about the potential for sovereign defaults, this period, we will continue to focus on their evolving
contagion and growing skepticism about the willingness needs while prudently managing risk, shareholder capital
of policymakers to address the situation. Not surprisingly, and expenses to generate attractive returns.
the operating environment led our clients across a
In this year’s letter, we would like to discuss how we
variety of businesses to be materially more risk averse.
are approaching the current operating environment as
The firm’s perspective on managing its risk exposures
well as review — through the lens of priorities articulated
mirrored the sentiment of the broader market, and
by our clients — the long-term growth opportunities
consequently, our risk exposures remained low in 2011.
for Goldman Sachs. We spent more than one-half of our
Ultimately, the confluence of macro-economic concerns,
time last year away from the office meeting with clients
heightened market volatility, lower corporate activity
around the world. Through these ongoing discussions,
and decreased risk appetite among our institutional
we gain a better understanding of emerging trends,
clients translated into a fundamentally lower level
the challenges and goals our clients are focused on and
of revenue opportunities over the course of the year,
the role we can play to help them. Taken individually
hampering our returns.
and as a whole, these interactions are fundamental to
For 2011, the firm produced net revenues of our client-driven strategy.
$28.81 billion with net earnings of $4.44 billion.
We will also share with you the significant progress we
Diluted earnings per common share were $4.51 and
have made in implementing the recommendations of our
our return on average common shareholders’ equity
Business Standards Committee, and talk about the people
was 3.7 percent for the year. Excluding the impact
of Goldman Sachs, the contribution they make every day
of a $1.64 billion preferred dividend associated with
on behalf of our clients, and the critical role they play
our redemption of the firm’s preferred stock issued
in our future success. Finally, we will update you on our
to Berkshire Hathaway, diluted earnings per common
corporate engagement initiatives designed to help drive
share were $7.46 and our return on average common
job creation and growth.
shareholders’ equity was 5.9 percent. Throughout the
year, we continued to manage our liquidity and capital
conservatively. At year-end, the firm’s Global Core The Operating Environment in 2011
Excess liquidity was $172 billion, and our Tier 1 capital While each downturn has its unique characteristics,
and common ratios under Basel 1 were 13.8 percent our industry has operated through a number of economic
and 12.1 percent, respectively. contractions over the past decade or so. In each instance,
we saw more precipitous declines in U.S. growth
While our results suffered as a consequence of global
expectations than what we experienced more recently.
conditions and dampened activity levels, we are pleased
Nevertheless, last year’s weak economic conditions initiated
to report that the firm retained its industry-leading
a pullback in our clients’ strategic objectives and financing
positions across our global investment banking client
demands, a slowdown in market-making activities and
depressed asset values across the investing spectrum.
2 Goldman Sachs 2011 Annual Report

that we are being strategic in managing the firm’s
financial resources for our investors. If client demand
for risk capital remains muted and opportunities to invest
and generate attractive returns are scarce, we may elect
to reduce capital intensive portions of our balance sheet
and return excess capital to shareholders through
repurchases or dividends.
Since the beginning of 2010, we have repurchased

more than $10 billion of common stock or approximately
16 percent of our common equity relative to 2009
Gary D. Cohn Lloyd C. Blankfein year-end levels. We have also bought back the equivalent
President and Chairman and
Chief Operating Officer Chief Executive Officer
of close to 80 percent of the share count issued during
the height of the crisis, while growing our book value
per common share by a compounded annual growth
From a historical perspective, the reduction in our rate in excess of 9 percent since the end of 2007. At the
investment banking volumes during 2011 was, in many same time, we have increased our common equity by
respects, in line with the drop we experienced following nearly 70 percent over this period while maintaining
the Internet bubble during 2001. M&A declined as capital ratios near the top of our industry.
CEOs worried about execution risk, and debt and equity
underwriting slowed due to higher volatility across Controlling Costs
markets. Lower asset prices and weakness in credit In addition, we have targeted approximately $1.4 billion
indices resulted in a negative impact on our Investing of annual run-rate expense savings in order to function
& Lending business. It is important to note, however, more efficiently, and believe we can further benefit from
that losses in our asset portfolio were due to our mark-to- greater operational leverage in terms of infrastructure,
market discipline and are largely unrealized; the ultimate technology and people in a number of key markets
assessment of our investing and lending activities must be and businesses. As we gain a better understanding of
over a period of years, rather than a narrow snapshot. where to deploy capital and resources and at what level,
we will make the necessary adjustments to achieve
Risk, Discipline and Returns stronger returns.
As we do in all market conditions, our approach amidst
It is important to note that, as for many of our clients
uncertainty has been to manage our risk levels prudently.
and financial institutions to varying degrees, the costs
Our adjusted leverage ratio at the end of 2011 was down
of conforming to new regulations have been significant.
approximately 50 percent from the end of 2007. We have
At the end of 2011, the firm’s regulatory-related
further strengthened our liquidity position relative to
headcount had nearly doubled from pre-financial crisis
pre-crisis levels. Our average Global Core Excess (highly
levels across a variety of functions. Our regulatory-related
liquid securities and cash instruments) is at near record
expenses have also nearly doubled during this period.
levels, up more than twofold from four years ago,
comprising close to 28 percent of our average adjusted In the shorter term, the heightened regulatory focus
assets. We have also made a concerted effort to reduce will continue to demand considerable effort and expense;
our level 3 (illiquid) assets which, since the end of 2007, however, over time, we expect this trajectory to even out
are down 30 percent and represented approximately as infrastructure, systems and processes are rationalized
5 percent of our 2011 year-end balance sheet. and we and our regulators have gained greater clarity
around final requirements. Ultimately, we hope to see the
Of course, as underlying conditions change, we will
pendulum come to rest at a point that better reconciles
recalibrate our capital and liquidity profile to be in an
effective oversight with the need to continue driving
optimal position to serve our clients, and to ensure
Goldman Sachs 2011 Annual Report 3

Letter to Shareholders
towards investment and growth. We will address U.S. Treasuries and other areas. Our commitment of
other aspects of regulatory reform — particularly as people and resources to growth markets also represents
they relate to our clients — later in the letter. our response to long-term secular demands.
Lastly, our focus on cost discipline includes adhering It may be too early to conclude to what degree the
to our pay for performance philosophy. In 2011, net current industry slowdown is secular versus more broadly
revenues were down 26 percent and compensation and cyclical. In any scenario, our strategy remains informed
benefits expenses for our people were down 21 percent, and driven by the insights and demands of our clients
with discretionary compensation down significantly more around the world. And, what we’ve heard consistently
than net revenues. Over the past few years, we have also is that as they respond to the long-term trends of
reduced compensation and benefits to net revenue ratios, globalization and technology, as well as macro-economic
with our average ratio over the past three years of and demographic changes, what we do for them is not
approximately 39 percent being materially lower than only still relevant — but critical.
our average ratio of approximately 45 percent from
Every day our clients seek advice and financing; they
2005 through 2007.
look to us to take the other side of a transaction to help
hedge their risk; they need an asset manager to invest on
Our Client-Driven Strategy their behalf and a co-investor ready to deploy capital
More than three years since the onset of the financial towards promising growth opportunities. In short, clients
crisis, many institutions remain focused on working look to us for these core client services both through
through its aftermath and managing risk in all its periods of transition and at any stage of the economic
forms — whether related to liquidity, credit, market or cycle. Time and again in 2011, we saw sentiment shift
regulation. Lower revenues and more subdued growth rapidly, confirming that our strategy must always be
forecasts are causing some to question whether the rooted in the fundamental needs of our clients and in our
industry is undergoing secular change, or more ability to act quickly and effectively in their service.
specifically, whether the model of providing advice,
financing, market making, asset management and Investing in Long-Term Trends
co-investing will continue to be relevant in the
Comprehensive Advice and Risk Management
future landscape.
A more global market has also yielded a more
Based on what we hear from our clients and the work we multi-faceted, and potentially more risky, business
do on their behalf, put succinctly — we believe the core environment; this, in turn, has put demands on the
model remains more viable and important than ever. quality and breadth of services that companies,
institutions and governments require in order to operate
Among the forces affecting our industry, some are
with greater scale. For example, a client may need to
certainly cyclical — such as economic growth, corporate
hedge its exposure to currency fluctuations, navigate
activity and risk appetite — and some are secular, such
integration issues across borders, or manage the volatility
as those related to market structure, the influence of
of commodity prices. To address these types of needs,
the growth markets, technological advancements, or the
our ability to partner our Investment Banking franchise
regulatory landscape. Secular change requires that
with our Institutional Client Services businesses enables
over time we evolve and position ourselves in ways that
clients to benefit from seamless advice and transfer risk
continue to add value for our clients; for example, many
directly to the firm to manage. Importantly, it allows
services we provided over the telephone to our equity
our clients to get back to focusing on their underlying
clients ten years ago are today both priced and executed
businesses and strategic objectives.
automatically, promoting a more liquid and efficient
marketplace for investors. Similar structural In a similar vein, a growing practice among companies
developments have occurred in foreign exchange, is to outsource the non-core or sub-scale parts of their
business. In particular, we have seen an increase in
the outsourcing of insurance asset management globally,

which has been accelerated by new capital regimes, In the year ahead, cross-border M&A activity is poised
greater demand as a result of the financial crisis and to continue and grow: in Europe, due to outbound
a sustained low interest rate environment, making it activity from institutions looking to diversify; in China
more difficult to generate returns. Since 2004, industry- as clients look for greater access to natural resources and
wide growth in outsourced general account assets has end markets; and in Japan where companies are seeking
more than doubled from $500 billion to more than external growth prospects with currency exchange rates
$1 trillion. Goldman Sachs is making a substantial close to post-war highs. Emerging markets M&A activity is
investment in this area, having grown these assets by also likely to regain momentum, led by inbound activity
approximately $40 billion since 2008, representing into Brazil, which has the most open foreign investment
an over 20 percent compounded annual growth rate. policy among the BRICs, and by enterprises in developing
countries seeking brands and sales and marketing
Global Opportunity Set expertise which they lack in their home markets.
While it is impossible to say how long economies will We also see market share expansion opportunities.
remain under pressure, when more consistent growth The recent retrenchment by some financial institutions,
does return, our revenues tend to grow at a multiple of especially in Europe, has the potential to change the
that growth. This drives our efforts to operate in more competitive landscape. European peers have announced
places — or put another way, to chase GDP growth. plans to lower headcount, shed risk-weighted assets and
Between 2005 and 2010, international revenues exit certain businesses altogether. Such deleveraging may
for Dow Jones companies grew by 35 percent while lead to reduced lending capacity, higher new issuances,
domestic revenue grew by just 15 percent. FTSE 50 and greater secondary trading, creating opportunities
companies have seen a similar trend as international for Goldman Sachs to intermediate asset sales to our
revenue grew by 36 percent compared to a 4 percent investing clients.
decrease in domestic revenue over the same period.
This also holds true in cross-border M&A, with Clients and Regulatory Reform
aggregate volumes up 56 percent from 2007 relative As mentioned, the potential impact of regulation has
to the four years prior. Since 2010, cross-border deals been an important theme over the past few years and
represent nearly 40 percent of overall M&A volumes. certainly in 2011. We are working constructively with
regulators around the world to contribute to effective and
Consistent with these themes, we see opportunities
realistic implementation of new legislation and regulations,
across a number of regions and businesses driven by
and remain focused on what reforms may mean for our
client demand. As companies have become more global
industry, for our firm, and, most importantly, for our
and growth economies have benefited from greater
clients. In many of our conversations, clients have
wealth creation, market capitalization has also increased.
expressed concern about the impact their businesses
China’s market capitalization has tripled as a percentage
may experience, including new margin requirements,
of world market capitalization from 2002 through 2010,
potentially less market liquidity, wider spreads and less
with the U.S. contribution shrinking to 65 percent of its
available, more expensive inventory.
2002 levels. Net revenues from our Asia business have
more than doubled in 2011 compared with 2002. These and other factors will affect not only how
clients serve their customers but also their technological
More than ever, our clients seek “local” expertise and
infrastructure, legal documentation and compliance
advice. In response, over the past six years we have
areas. It is critical for us to understand the issues
hired more than 1,350 professionals into countries such
confronting our clients and to adapt our services
as Brazil, Russia, India, China and Korea. Around the
accordingly to better meet their needs. When rules
world we now serve 4,000 more Investment Banking
begin to take final shape, we will increasingly allocate
clients and approximately 3,000 more counterparties
resources to developing trading tools and clearing and
within our Institutional Client Services businesses
settlement systems that will help our clients address
over the same period.
these new realities.

More broadly, we recognize that translating the statutory time, not a minimal time, and have judgments made
language into workable outcomes is challenging, and by people who are trying to determine an appropriately
appreciate the effort made by all parties to strike the effective manner in which to dispose of the position; if
balance between flexibility and specificity. This is especially restricted from doing this, market makers will provide
important with respect to the Volcker Rule — which less liquidity and at worse prices. For the bond issuer,
restricts banking entities’ proprietary trading activities this raises its cost of capital, and for the pension fund,
and certain interests in, and relationships with, hedge this erodes savings, raises costs for employers and reduces
funds and private equity funds. As the process moves pension security for the fund’s participants.
forward, it is critical that rulemaking proceed in
Liquid capital markets are the jewel of America’s
a way that is not counterproductive to the ability of
financial and economic system, the benefits of which
companies and investors to continue to use the capital
are felt by every industry and by all investors. Reduced
markets to accomplish their business objectives.
liquidity and other inadvertent byproducts of the proposed
We believe it is critical that the final version of the rule pose obstacles to the free flow of capital and efficient
Volcker Rule reflects a meaningful evolution from the allocation of resources throughout the global economy.
one currently under proposal. This includes drawing This is capital that could otherwise go to investment and
an essential distinction between prohibited proprietary job creation, or be returned to shareholders.
trading and the vitally important — and statutorily
While the consequences of an overly restrictive application
protected — market-making related, underwriting
of the Volcker Rule are formidable, we are optimistic
and hedging activities.
that the intended results can be achieved in a way that
Getting these issues right has serious, real-world will ultimately be better for all constituencies, including
consequences for our clients and other market investors and companies around the world looking to
participants who rely on the vital financial intermediation access capital, expand and grow. To this end, we are
and capital-raising services that financial institutions recommending constructive changes to the proposed
such as Goldman Sachs provide. For example, if the rule that would provide a much stronger foundation as
constraints of the proposed rule define our ability to market participants and regulators move forward.
hedge in a way that makes it prohibitively expensive,
or so narrowly that effectively prohibits it in some cases, Implementation of Business Standards
our clients will be forced to hold more risk on their own Committee Recommendations
books. This will increase the volatility of their earnings
In January 2011, we released the Report of the
and hurt their share prices, which in turn will raise their
Business Standards Committee (BSC), which was the
cost of capital, reduce their capacity to invest, lower
culmination of an extensive eight-month review across
their returns to shareholders and diminish their appeal
every major business, region and activity of the firm.
as strategic partners.
A significant amount of time and resources last year were
The proposed restrictions on market making could also devoted to implementing the report’s 39 recommendations.
have wide-ranging adverse effects. For example, a company Over 400 of our people were directly involved, and many
wishing to issue bonds to finance expansion plans, or a more indirectly, as the BSC recommendations are integrated
pension fund looking to sell a stake in its portfolio to fund into the day-to-day operations of the firm. To monitor
near-term obligations, may turn to Goldman Sachs to and supervise the implementation process, we created an
underwrite or execute the transaction. In either case, we oversight group comprising senior leaders across the firm.
would typically engage in market-making related activities, Employee participation in implementation has spanned
and in doing so, may hold some of the assets on our books. every level, division and region, demonstrating the
Because market makers are willing to buy from and commitment and openness within our organization to
sell to clients in different market conditions, we need to improving and strengthening Goldman Sachs.
know that we can carry this inventory for the optimal

better communication with clients about our specific
responsibilities in a given transaction type or business
activity. To date, over 8,000 of our people have taken
part in training focused on the different roles and
responsibilities we assume in working with our clients.
A central theme of the training is the need to be clear to
ourselves and to our clients about the capacity in which
we are acting and the responsibilities we have assumed.
Chairman’s Forum
Last year, we launched the third iteration of the
Chairman’s Forum, a global initiative for managing
directors designed to emphasize the importance of —
To date, our efforts have served to catalyze a renewed and our commitment to — reputational excellence and
focus on client service and client communication; on individual accountability. Structured to incorporate
strengthening our controls, processes and committee key BSC recommendations, each of the 23 three-hour
governance; on greater personal accountability and sessions featured an interactive case study presenting
reputational risk management; and on reinforcing complex and multi-faceted scenarios for intensive
attributes of our culture and values. Importantly, we discussion. This deep commitment of time by our senior
established the Firmwide Client and Business Standards leadership reinforces the priority we place on weighing
Committee, which is composed of many of the firm’s reputational risk when making difficult business decisions,
most senior leaders, and puts clients at the heart of our thinking broadly about individual responsibilities and
approach to governance. This includes applying an escalating issues as appropriate. Our reputation is built
elevated standard of professional judgment to all aspects upon our service to clients, our performance and the
of our business activities and in everything we do. As integrity of our people, each of whom carries with them
nearly every facet of the recommendations has a training responsibility for protecting the firm’s reputation in the
component, we are implementing over 30 new BSC judgments, actions and communications they undertake.
training programs, and embedding BSC-related content
into over 90 existing training programs. Ongoing Evaluation
As formal implementation of the BSC winds down, this
In particular, the BSC emphasized the importance of is not the end of this process, but in many respects it is the
articulating clearly both to our people and to our clients beginning. Because the focus of this effort is rooted more
the nature of the roles we are asked to undertake across in the judgment of our people than a formal rule set for
our various businesses, whether acting as advisor, decision making, we will also look to multiple sources of
fiduciary, market maker or underwriter. As part of the feedback — our clients, our people, regulators and other
BSC, we retained an independent consultant to conduct key stakeholders — to ensure that our commitment to
non-attributable, in-depth, in-person discussions with improvement is a living, breathing and dynamic process.
senior management of a number of clients worldwide.
Among the feedback we received was their desire for us
to communicate more clearly the roles and responsibilities
Our People
we undertake depending on the nature of the transaction Notwithstanding the forces of technology and
and the objectives of the client. globalization, ours is ultimately a human business,
conducted person to person. A client relationship is only
To this end, we implemented the Role-Specific Client
as strong as the Goldman Sachs professionals managing
Responsibilities framework, which does not capture every
that relationship. The most important thing we can
possible client interaction, but is designed to facilitate
do to enhance the value of our client franchise is to

continue to retain our people and to hire the most Corporate Engagement
talented individuals from around the world. We benefit
Since 2008, Goldman Sachs has committed in excess
from committed, seasoned leadership across the firm’s
of $1.4 billion to philanthropic initiatives, including
businesses and divisions, with an average tenure of over
10,000 Women, 10,000 Small Businesses and Goldman
20 years for members of our Management Committee.
Sachs Gives, representing one of the largest contributions
At the same time, almost 300,000 people applied for
ever made by a corporation. Our efforts include working
full-time positions at Goldman Sachs for 2010 and 2011.
hand-in-hand with a global network of more than
We hired less than 4 percent of that population, and
100 academic and non-profit partners, as well as local
though most had multiple offers, nearly nine out of ten
and national leaders. A record 26,500 of our people,
people offered a job with us accepted. Once they arrive
their friends and family participated in our global
at Goldman Sachs, we do everything we can to ensure
volunteer initiative Community TeamWorks last year,
they have productive and stimulating careers.
which celebrated its fifteenth season. In particular,
We go to great lengths to engage our people, listen to we were pleased to receive the Committee Encouraging
what’s on their minds, and where necessary, implement Corporate Philanthropy’s 2011 Chairman’s Award for
changes to ensure we remain an attractive and dynamic 10,000 Women, which speaks to the power of partnership
place to work. This past year, we conducted our People between business, government and the non-profit sector.
Survey, a biennial effort to solicit thoughts and opinions
on how to maintain a strong culture and rewarding 10,000 Women
environment. The 2011 survey garnered more than Having recently celebrated the program’s fourth
22,000 comments and suggestions, reflecting strong anniversary, 10,000 Women has reached 5,500 women
participation from across all levels and offices. Among across 42 countries, including Rwanda, Nigeria, Brazil
the findings, our people indicated they remain excited and China. In March, we were honored to join U.S.
to work at the firm and continue to value our culture Secretary of State Hillary Clinton and First Lady
of teamwork, and also pointed out areas where we Michelle Obama to announce a new public-private
can do better. These suggestions and other data will partnership to expand the effort, and through Goldman
continue to drive our key people initiatives, just as they Sachs Foundation’s 10,000 Women Department of State
have since we first polled our people in 2001. Women’s Entrepreneurship Partnership, we have already
reached women in ten additional countries. In December,
We are especially pleased that Goldman Sachs was
we were also pleased to partner with the Government of
named one of Fortune magazine’s “100 Best Companies
Denmark to provide 10,000 Women alumnae in Tanzania
to Work For” on its most recent list, a distinction we
with affordable sources of capital. Most importantly,
have earned each year since the list’s inception 15 years
these women are applying what they learn to multiply
ago. We are one of only 13 companies to do so. In
the program’s impact: within 18 months of graduating,
addition, the firm placed fourth in the most recent
80 percent have increased their revenues, 66 percent
The Sunday Times “Best Companies to Work For”
have added new jobs and 90 percent are mentoring other
survey in the “Best Big Companies” category and was
women and girls in their communities.
the highest-placed financial services company for the
third consecutive year. Our commitment to diversity
was also recognized when Working Mother named us 10,000 Small Businesses
to its “100 Best Companies for Working Mothers” and Goldman Sachs continues to work with community
when the Human Rights Campaign Foundation awarded colleges, Community Development Financial Institutions
us the “Innovation Award for Workplace Equality” and non-profit organizations to provide small businesses
and included us on its “Best Place to Work for LGBT with the education, business services and capital they
Equality” list. need to grow and create jobs. Through 10,000 Small
Businesses, we have forged partnerships with more than
40 organizations, across six cities in the U.S. — New York,
Los Angeles, Long Beach, New Orleans, Houston and

Chicago — and four cities in the U.K. — London, Leeds, to our clients for entrusting us to work with them to
Manchester and Birmingham. Participating businesses achieve their most critical goals and objectives. Their
range from metal fabrication shops to cafés, and from demands will continue to drive our long-term strategy
first-generation enterprises to long-standing family-owned and we will remain acutely attuned to understanding
companies. As we see with our 10,000 Women scholars, and responding to their needs.
these small business owners are translating the knowledge
It is difficult to predict with any accuracy which
they garner from the program into immediate growth in
businesses will outperform in the months and years to
their local communities.
come. However, looking ahead, while the trajectory of
corporate activity in 2012 will depend largely on the
Goldman Sachs Gives
return of macro-economic stability, management teams
The tradition of individual philanthropy remains a core
and boards are showing renewed interest in engaging in
tenet of our culture. In recent years, firm compensation
strategic discussions, suggesting pent-up demand for
was reduced by nearly $900 million to support Goldman
new opportunities. When you consider that activity
Sachs Gives, a donor-advised fund which allows partners
relative to overall market capitalization is near historical
at Goldman Sachs to recommend donations to qualified
lows, financing costs are attractive and cash reserves are
nonprofits globally. Through the program, the firm has
flush, the potential is promising. At the same time, the
distributed nearly 7,000 grants to organizations that seek
complexities in executing for clients in this environment
to build and stabilize communities, honor service and
presents opportunities for Goldman Sachs. We believe
veterans, increase educational opportunities, and create
our people and teams possess the experience and
jobs and economic growth.
innovative insights to help our clients succeed.
Since 2010, Goldman Sachs Gives has provided
We are optimistic that the set of opportunities will
approximately $70 million in need-based financial aid
expand with resuming growth, and feel confident that
to students at more than 100 colleges and universities
when the economy turns — and it will — the firm is
across the globe. In advance of the 2012 Olympic Games,
poised to perform strongly as economies and markets
Goldman Sachs Gives also launched a sports initiative
develop and prosper. As we move forward, we will
with two leading charities — Greenhouse and Right To
continue to make the decisions and investments we
Play — to improve the lives of at-risk youth in the U.K.
believe are necessary to attract and retain the best people,
and Middle East through access to athletic coaching.
meet the needs of our clients, control costs, manage
Goldman Sachs Gives continues to support nonprofits
our risks and produce over-the-cycle returns to create
working to reintegrate wounded veterans into the civilian
long-term value for our shareholders.
workforce, and is donating $20 million over five years
as a catalyst for new partnerships pertaining to veteran
job placement and readiness, as well as support and
counseling for family members.
Lloyd C. Blankfein
Looking Ahead Chairman and Chief Executive Officer
As we continue to navigate the cross currents of
change, we are faced with the challenge of remaining
highly adaptive while also anchored in the traditions,
tenets and values that have formed the foundation for
our success. These recent years have tested the firm Gary D. Cohn
like few other times in our history, but over this period, President and Chief Operating Officer
we have worked every day to demonstrate Goldman
Sachs’ resiliency, resolve and commitment to our
bedrock principles. Most importantly, we are thankful

10
Raising Capital
Goldman Sachs 2011 Annual Report

For Prada, the time had come to capitalize on
the power of
a global brand
In 2010, Prada, one of the world’s most recognizable

fashion brands, knew it was time to go public, and
that the place to do it was Hong Kong. The reason
for choosing Hong Kong was simple: Asia, with its
fast-growing economies, had become Prada’s biggest
growth market. By 2010, Asia had rivaled Europe
and had outpaced North America, accounting for
43 percent of Prada’s annual sales.
With Goldman Sachs’ London investment banking team working with the family-owned
company, Prada began preparing to go public in 2007. Postponed by the global financial
crisis, the IPO was moving forward again in 2011, with Goldman Sachs as lead underwriter.
As the IPO approached, work on the complex transaction stretched across continents and
disciplines. While our London team worked with the company on capital markets strategy,
our Hong Kong investment banking team took responsibility for deal execution. In marketing
the offering worldwide, Goldman Sachs helped Prada present its story to more than 250
leading investors. The IPO raised $2.5 billion. It was the largest consumer goods IPO ever
in Hong Kong, and the largest IPO to date of any global luxury brand.
The offering enabled Prada to reduce its debt while funding future growth across China
and the rest of Asia. By 2015, China alone is estimated to comprise 20 percent of the world’s
luxury goods market. Prada is now positioned to make the most of this opportunity, and
reinforce its image as one of the world’s most recognizable fashion brands.

Raising Capital
As lead underwriter, Goldman Sachs

plays a critical role in executing an issuer
Anatomy client’s IPO, including:
of an IPO
Explaining the IPO process.
Organizing a syndicate of banks to manage
the offering and coordinating diligence on the issuer.
Helping determine the size and composition of the

For private companies, “going public” offering and the most appropriate listing venue.
is a landmark event. An IPO serves Assisting the marketing of the offering to

global institutional, high-net-worth and retail investors
several purposes: raising capital to in a coordinated “road show” hosted by management.
fund growth and acquisitions, enabling
Building a “book of demand.”
founders and investors to realize the
value of the company they have built, Underwriting the shares at a price agreed
between the syndicate and the issuer client.
and enhancing management’s ability to
Allocating shares to participating investors,
attract, retain and incentivize employees in consultation with the issuer client.
through equity ownership. Providing liquidity in the secondary market.
#1 Globally in IPOs WorldReginfo - 68db5da4-5599-464b-812e-5e82b25d0a53

Focus on... 2011 Goldman Sachs IPO Deal
a year of
Volume, by Domicile of Issuer
In 2011, Goldman Source: Thomson Reuters
offerings
despite volatile Sachs led the world
markets in IPO activity, with Asia and
Americas
42%
a majority of offerings Europe

58%
coming from Asia

and Europe.
Goldman Sachs
London Prada Deal Team
left to right: Amedeo Cesco,
Paolo Zannoni, Denni Manzatto,
Eoghainn Calder, Antonino Mattarella,
Antonio Gatti, Matthew Westerman,
Anna Skoglund, Francesco Papa,
Giuseppe Pipitone
Goldman Sachs
Hong Kong Prada Deal Team
left to right: Christy Kwan, Steven
Barg, City Chan, Lisa Feng, Linda Fu,
Charlotte Yeow, Sindy Wan, William
Smiley, Gloria Check, Phyllis Luk
A Global Network Potential Investors In 2011, Goldman WorldReginfo - 68db5da4-5599-464b-812e-5e82b25d0a53

of Leading Investors:
Attendance at Road Shows
by Geographic Location Sachs led 54 IPOs
Prada 2011 IPO across 12 countries,
totaling
$46.6B
During the road show, Asia
26%
we reached a global base U.S.
of institutional investors, 45%
enabling Prada to raise Europe

$2.5 billion in its record- 29%
breaking IPO. Source: Thomson Reuters

Making Connections
For Skype, when the future

offered two paths, it was time
to prepare
for both
In 2011, Skype, the Internet software company,
faced a crucial decision. A strong and rapidly growing
business, with more than 120 million monthly users,
Skype had become one of the most recognizable
brands on the Web. It had been acquired in November
2009 by an investment group led by Silver Lake
and, after a year of focus on operations, product
development, new monetization initiatives and
strategic partnerships to further accelerate growth,
was ready to go public.
With the help of Goldman Sachs, Skype was actively preparing for its IPO; at
the same time, however, its brand and platform had attracted significant strategic
interest and within weeks of the planned IPO, Microsoft made an offer. As a leader
in technology mergers and acquisitions as well as capital markets, Goldman Sachs
pivoted quickly from leading the IPO to advising on the sale. The transaction — at
$8.5 billion — was one of the largest ever Internet sales — and benefited all parties
involved. For Silver Lake and its investment partners, it was the realization of one of
the most successful private equity investments in history. For Microsoft, it delivered
Skype’s full range of mobile and desktop communications capabilities and a large
and loyal community of users. For Skype, it was a major step toward achieving its
vision of making the world a more connected place.

Goldman Sachs San Francisco Skype Deal Team
left to right: Sam Britton, George Lee, Nick Giovanni
Focus on...
leadership in technology
investment banking
For Goldman Sachs’ technology investment
banking team, 2011 was a busy year, as
we advised and helped to execute many of
the year’s most notable transactions.
#1 in Technology M&A
Source: Thomson Reuters
15 IPOs
including
Technology Yandex
Zynga
Groupon
Bankrate
Fusion-io
Jive Software
Cornerstone OnDemand
$35B
Raised as active
book runner
for technology
equity and debt
transactions over

Providing Sound Advice

For Drogasil, the moment was right to
leverage a
combination
of strengths
Fueled by an expanding middle class and a rapid

rise in disposable income, Brazil had become the
largest pharmaceutical market in all of Latin
America. Although still fragmented, this market
had begun to coalesce around larger competitors.
In this environment, it was important for Drogasil,
Brazil’s third-largest pharmaceutical retailer, to
position itself for growth.
As it started assessing the best path forward, the company engaged Goldman
Sachs as its financial advisor. We helped Drogasil on its merger with Droga Raia,
the nation’s fourth-largest retail pharmaceutical chain at the time. While both
companies originated in São Paulo, they had grown in different directions, with
Raia expanding to Rio de Janeiro and the South, and Drogasil focusing its expansion
towards the Southeast and Midwest of Brazil. Together, these areas comprise
over 78 percent of the nation’s retail pharmacy market. A merger between the
companies would create a true national leader.
With its local knowledge and wealth of experience in mergers and acquisitions,
the investment banking team from Goldman Sachs São Paulo helped forge a
merger of equals. The new enterprise, Raia Drogasil S.A., became Brazil’s leading
retail pharmacy, with nearly 800 stores, 18,000 employees and a territory extending
across nine states.

Goldman Sachs
São Paulo Drogasil
Deal Team
left to right:
Flavio Aidar,
Fernanda Schahin,
Marco Vianna,
Cristiano Camargo
Focus on...
the promise Goldman Sachs Brazil: From foothold to full-service
footprint in the heart of Latin America
of growth
markets 1995 2006 2007 2008 2009 2011
Established Received a Launched Launched Launched Approximately
a presence local foreign Goldman Asset Private Wealth 240
in Brazil, exchange Sachs do Management Management professionals
focusing license Brasil Banco and were based in
on M&A Múltiplo granted São Paulo
S.A. our equities
broker-dealer
license

Providing Sound Advice
A Team Grows
in São Paulo
Brazil, South America’s largest economy, represents an area of tremendous
potential. Solid economic growth, the development of capital markets, the strong
interest of international investors and local companies seeking to expand globally
make it crucially important for Goldman Sachs. Because of this, Goldman
Sachs has established a growing presence in Brazil, which enables us to provide
clients — both onshore and offshore — with the products and services they
need to achieve their objectives.
Goldman Sachs first established a presence in Brazil in 1995, focusing initially
on establishing our mergers and acquisitions advisory business. Since then,
we have made a series of significant commitments to building a strong presence
in Brazil and to being a full-service provider, following Investment Banking
with Equities and Fixed Income, Currency and Commodities market making,
Investment Management and Global Investment Research capabilities. We received
a local foreign exchange license in 2006, and officially launched Goldman Sachs
do Brasil Banco Múltiplo S.A. in 2007. In 2008, we launched Asset Management
and were granted our equities broker-dealer license. In 2009, we launched Private
Wealth Management. Today, Goldman Sachs has approximately 240 professionals
supporting our businesses based in São Paulo and nearly 600 professionals
around the world focused more broadly on Latin America.
Our São Paulo office is a diversified provider of products
and services, giving clients access to local expertise and
the global reach of Goldman Sachs, including:
Investment Banking and Capital Markets
Market Making in Equities, Fixed Income,

Currencies and Commodities
Investment Management for Institutions

and High-Net-Worth Individuals
Investment Research

Promoting Economic Stability
Martin Weber
Gabriele Geist
For governments, now was the time to
Lars Humble strengthen

ties to
capital
markets
Edward Markham

Providing governments, Among major transactions last year, one of the clear standouts
was a €4 billion, 15-year benchmark offering executed for the
development banks and European Union (EU). As a lead manager, we were able to
other public institutions with draw upon resources from across the firm — from syndication,
origination and market making — to achieve success at a critical
ready access to critical funds moment. The offering enabled EU officials, under the European
through capital markets has Financial Stabilisation Mechanism, to finance crucial loans to the
governments of Ireland and Portugal. The transaction did more
never been more important for than raise long-dated funding for the EU’s stabilization program.
global economic recovery. In At a difficult moment in the sovereign debt crisis, it confirmed
investor support for European sovereign credit as a whole.
2011, amid market volatility,
Throughout 2011, roughly one-third of the capital we raised to
it was also a challenging support our European clients was for governments or public sector
task, making our role as a institutions. Goldman Sachs helped underwrite over 70 transactions
leading advisor and dealer in for these public sector entities, including strategic benchmark
offerings for the World Bank, the European Investment Bank,
government securities all the the United Kingdom, KfW (the German government’s development
more essential. bank), and the Republics of Poland and Slovenia. In 2011,
Goldman Sachs was a primary dealer in government securities
for 13 European countries. Our sovereign debt franchise
continues to expand into new markets.
Maud Casin

Managing Investments
Goldman Sachs Team

left to right: David Granson, Kate El-Hillow,
Scott McDermott, Jeffrey Goldenberg, David Fox

An innovative approach to meeting the needs of
an important
client segment
Foundations, endowments and other nonprofits are
facing a challenging investment climate regardless of their
level of assets. The economy has hampered donations,
volatility has made returns uncertain and demands on their
resources have remained or even grown. This complexity has
stretched the capacity of small to mid-sized organizations
and led the Investment Management business to create an
Institutional Client Solutions platform specifically designed
for them. Our client teams can provide ongoing market
insights and expertise along with client-specific solutions —
from advice on individual asset class or strategy mandates
to fully outsourced investment management.
Drawing upon resources and expertise from across Investment Management, clients can
get a level of advice and an investment experience that have traditionally been available
only to the largest foundations and endowments. Our disciplined investment process begins
with a clear understanding of the client’s objectives and spending constraints. Within their
investment portfolios, clients can take advantage of our open architecture platform, which
includes investment options from a rigorously evaluated group of external managers as
well as from Goldman Sachs Asset Management.
While we advise some clients who manage their portfolios internally, others choose our
comprehensive portfolio outsourcing solution. This can include strategic analysis, institutional
risk management and tactical asset allocation strategies. By using an outsourcing solution,
investment committees can focus on policy-level decisions that help further the organization’s
mission. We are now working with over 250 organizations across the U.S. and are expanding
this service to additional countries.

A Year of
Continued Support
Goldman Sachs is committed to driving economic growth. In 2011,
we made significant progress in corporate engagement — expanding our
support of education and small business, extending our global network
of academic and non-profit partners and encouraging our people to
give and participate in volunteer programs that have an impact on the
communities in which we work and live.
For 10,000 Women and 10,000 Small Businesses,

it was a time for continued partnership and progress
10,000 Women scholar Rasha, 10,000 Small Businesses scholar Angelica,
Cairo, Egypt New Orleans, Louisiana
Throughout the year, we worked closely with colleges impact of the program on communities, revealing that,
and non-profit institutions to expand 10,000 Women within 18 months of graduation, 80 percent of scholars
and 10,000 Small Businesses, signature programs of reported increased revenues, 66 percent added new jobs
Goldman Sachs and the Goldman Sachs Foundation. and 90 percent were mentoring other women.
Through the end of 2011, the 10,000 Women initiative In 2011, we also accelerated the growth of 10,000
has helped 5,500 women across 42 countries grow their Small Businesses, a sister program that collaborates
small businesses through a combination of business with colleges and community organizations to provide
management education, business support services and links entrepreneurs in the U.S. and U.K. with the tools they
to capital. New partnerships included joining with the U.S. need to grow and create jobs. Through this initiative,
State Department to extend the program to new countries we’re now working with more than 40 organizations
and working with the government of Denmark to provide across 10 cities, in the two countries. In 2011, we
10,000 Women scholars in Tanzania affordable access expanded the program to Chicago in the U.S. and
to capital. By year’s end, data collected showed the rising London and Birmingham in the U.K.

Goldman Sachs Gives:
Increasing Opportunities
is raising awareness and increasing education about breast

cancer in cooperation with several organizations focused
on women’s health. In the U.K., partners led a large-scale
effort in advance of the 2012 London Olympics to support
two organizations that use sports to teach life skills to
underprivileged children: Right To Play and Greenhouse.
In line with the Veterans pillar, GS Gives continues
granting towards its $20 million commitment to support
returning, wounded veterans with workforce training
and placement, and support for military families.
Reinforcing Goldman Sachs’ long-standing commitment

to working with academic institutions and providing
access to education for students from underserved
communities, we have seen that Increasing Educational
Goldman Sachs Gives

supports Right To Play
In 2007, we launched a donor-advised fund, Goldman
Sachs Gives (GS Gives), from which we and our partners
recommend grants to non-profit organizations globally. Goldman Sachs Scholars
left to right: Pilar, Chioma, Ross,
In the last two years, nearly 7,000 grants totaling Rutgers University, New Jersey
$425 million have supported organizations located in
24 countries, focused on the fund’s four strategic pillars:
Opportunities has garnered significant support from
Increasing Educational Opportunities; Building and
our firm’s partnership. Since early 2010, GS Gives has
Stabilizing Communities; Honoring Service and Veterans;
directed approximately $70 million to more than 100
and Increasing Economic Growth.
colleges and universities globally, ranging from Temple and
In each of these thematic areas, Goldman Sachs partners Rutgers Universities in the U.S., to Huaqiao University
have come together to drive coordinated gifts in a way in China and the University of Western Australia for
that leverages and increases the impact of the firm’s need-based scholarships for high-performing students.
philanthropy. Partners from Europe, the Middle East, Additional grants have targeted primary and secondary
Africa, Asia and the U.S. made joint recommendations education, diverse educational organizations and after-
to support the World Food Programme’s efforts to aid the school programs in low-income neighborhoods, and
East Africa Famine. In Asia, a regional GS Gives effort cultural programs for students around the world.

Our Business
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.
We report our activities in the following four business segments:
Investment Banking Institutional Client Services
We provide a broad range of investment We facilitate client transactions and

banking services to a diverse group make markets in fixed income, equity,
of corporations, financial institutions, currency and commodity products,
investment funds and governments. primarily with institutional clients such
Services include advisory assignments as corporates, financial institutions,
with respect to mergers and acquisitions, investment funds and governments.
divestitures, corporate defense activities, We also make markets and clear client
risk management, restructurings and transactions on major stock, options
spin-offs, and debt and equity underwriting and futures exchanges worldwide and
of public offerings and private placements, provide financing, securities lending
as well as derivative transactions directly and prime brokerage services to
related to these activities. institutional clients.
Institutional Client Services

Investment Banking Institutional Client Services
Net Revenues (in millions) Net Revenues (in millions)
35000
31500
$32,719
$4,984
$4,810
28000
$4,355
24500
21000
$21,796
17500
$17,280
14000
10500
7000
3500
0
2009 2010 2011 2009 2010 2011

Investing & Lending Investment Management
We invest in and originate loans to We provide investment management

provide financing to clients. These services and offer investment products
investments and loans are typically (primarily through separately managed
longer-term in nature. We make accounts and commingled vehicles, such
investments, directly and indirectly as mutual funds and private investment
through funds that we manage, in funds) across all major asset classes to
debt securities, loans, public and a diverse set of institutional and individual
private equity securities, real estate, clients. We also offer wealth advisory
consolidated investment entities services, including portfolio management
and power generation facilities. and financial counseling, and brokerage
and other transaction services to high-
net-worth individuals and families.
Net Revenues (in millions) Net Revenues (in millions)
5500
5000
$7,541
$5,034
$5,014
4500
$4,607
4000
3500
3000
2500
2000
$2,863
1500
$2,142
1000
500
0
2009 2010 2011 2009 2010 2011

Financial Highlights
As of or for the Year Ended December

$ and share amounts in millions, except per share amounts
2011 2010 2009
Operating Results
Net revenues $ 28,811 $ 39,161 $
45,173
Pre-tax earnings 6,169 12,892 19,829
Net earnings 4,442 8,354 13,385
Net earnings applicable to common shareholders 2,510 7,713 12,192
Return on average common shareholders’ equity 3.7% 11.5% 22.5%
Common Share Data
Diluted earnings per common share $ 4.51 $ 13.18 $ 22.13
Average diluted common shares outstanding 556.9 585.3 550.9
Dividends declared per common share $ 1.40 $ 1.40 $ 1.05
Book value per common share 130.31 128.72 117.48
Tangible book value per common share 1 119.72 118.63 108.42
Ending stock price 90.43 168.16 168.84
Financial Condition and Selected Ratios
Total assets $ 923,225 $ 911,332 $ 848,942
Unsecured long-term borrowings 173,545 174,399 185,085
Total shareholders’ equity 70,379 77,356 70,714
Leverage ratio 2 13.1x 11.8x 12.0x
Adjusted leverage ratio 2 8.6x 7.6x 7.8x
Tier 1 capital ratio 3 13.8% 16.0% 15.0%
Tier 1 common ratio 3 12.1% 13.3% 12.2%
Selected Data
Total staff 33,300 35,700 32,500
Assets under management (in billions) $ 828 $ 840 $ 871
1. Tangible book value per common share is computed by dividing tangible common shareholders’ equity (total shareholders’ equity less preferred stock, goodwill
and identifiable intangible assets) by the number of common shares outstanding, including restricted stock units granted to employees with no future service
requirements. See “Financial Information — Management’s Discussion and Analysis — Equity Capital — Other Capital Metrics” for further information about our
tangible common shareholders’ equity and tangible book value per common share, which are both non-GAAP measures.
2. T he leverage ratio equals total assets divided by total shareholders’ equity. The adjusted leverage ratio equals adjusted assets divided by total shareholders’ equity.
See “Financial Information — Management’s Discussion and Analysis — Balance Sheet and Funding Sources — Balance Sheet Analysis and Metrics” for further
information about our adjusted assets and adjusted leverage ratio, which are both non-GAAP measures.
3. T he Tier 1 capital ratio and the Tier 1 common ratio are computed using risk-weighted assets (RWAs) calculated in accordance with the Federal Reserve Board’s
capital adequacy regulations (which are based on Basel 1). The Tier 1 common ratio equals Tier 1 common capital divided by RWAs. See “Financial Information —
Management’s Discussion and Analysis — Equity Capital” for further information about our Tier 1 common ratio, which is a non-GAAP measure, and our Tier 1
capital ratio.

Financial Information — Table of Contents
Management’s Discussion and Analysis Notes to Consolidated Financial Statements

Introduction 30 Note 1 — Description of Business 105
Executive Overview 31 Note 2 — Basis of Presentation 105
Business Environment 34 Note 3 — Significant Accounting Policies 106
Critical Accounting Policies 36 Note 4 — Financial Instruments Owned, at Fair
Use of Estimates 40 Value and Financial Instruments Sold, But Not Yet
Results of Operations 41 Purchased, at Fair Value 110
Balance Sheet and Funding Sources 58 Note 5 — Fair Value Measurements 111
Equity Capital 65 Note 6 — Cash Instruments 113
Off-Balance-Sheet Arrangements and Note 7 — Derivatives and Hedging Activities 120
Contractual Obligations 70 Note 8 — Fair Value Option 133
Overview and Structure of Risk Management 73 Note 9 — Collateralized Agreements and Financings 141
Liquidity Risk Management 77 Note 10 — Securitization Activities 144
Market Risk Management 84 Note 11 — Variable Interest Entities 147
Credit Risk Management 89 Note 12 — Other Assets 152
Operational Risk Management 95 Note 13 — Goodwill and Identifiable Intangible
Recent Accounting Developments 96 Assets 153
Certain Risk Factors That May Affect Our Businesses 96 Note 14 — Deposits 156
Note 15 — Short-Term Borrowings 156
Note 16 — Long-Term Borrowings 157
Management’s Report on Internal Control
Note 17 — Other Liabilities and Accrued Expenses 160
over Financial Reporting 98
Note 18 — Commitments, Contingencies and
Guarantees 161
Report of Independent Registered Note 19 — Shareholders’ Equity 167
Public Accounting Firm 99 Note 20 — Regulation and Capital Adequacy 170
Note 21 — Earnings Per Common Share 174
Consolidated Financial Statements Note 22 — Transactions with Affiliated Funds 175
Consolidated Statements of Earnings 100 Note 23 — Interest Income and Interest Expense 176
Consolidated Statements of Financial Condition 101 Note 24 — Income Taxes 177
Consolidated Statements of Changes Note 25 — Business Segments 180
in Shareholders’ Equity 102 Note 26 — Credit Concentrations 184
Consolidated Statements of Cash Flows 103 Note 27 — Legal Proceedings 185
Consolidated Statements of Comprehensive Income 104 Note 28 — Employee Benefit Plans 198
Note 29 — Employee Incentive Plans 199
Note 30 — Parent Company 202
Supplemental Financial Information

Quarterly Results 203
Common Stock Price Range 204
Common Stock Price Performance 204
Selected Financial Data 205
Statistical Disclosures 206

Management’s Discussion and Analysis
Introduction
The Goldman Sachs Group, Inc. (Group Inc.) is a leading In this discussion and analysis of our financial condition
global investment banking, securities and investment and results of operations, we have included information
management firm that provides a wide range of financial that may constitute “forward-looking statements” within
services to a substantial and diversified client base that the meaning of the safe harbor provisions of the U.S. Private
includes corporations, financial institutions, governments Securities Litigation Reform Act of 1995. Forward-looking
and high-net-worth individuals. Founded in 1869, the firm statements are not historical facts, but instead represent
is headquartered in New York and maintains offices in all only our beliefs regarding future events, many of which, by
major financial centers around the world. their nature, are inherently uncertain and outside our
control. This information includes statements other than
We report our activities in four business segments: Investment
historical information or statements of current condition
Banking, Institutional Client Services, Investing & Lending and
and may relate to our future plans and objectives and
Investment Management. See “Results of Operations” below
results, among other things, and may also include
for further information about our business segments.
statements about the objectives and effectiveness of our risk
When we use the terms “Goldman Sachs,” “the firm,” management and liquidity policies, statements about trends
“we,” “us” and “our,” we mean Group Inc., a Delaware in or growth opportunities for our businesses, statements
corporation, and its consolidated subsidiaries. about our future status, activities or reporting under U.S. or
non-U.S. banking and financial regulation, and statements
References herein to our Annual Report on Form 10-K are
about our investment banking transaction backlog. By
to our Annual Report on Form 10-K for the year ended
identifying these statements for you in this manner, we are
December 31, 2011. All references to 2011, 2010 and 2009
alerting you to the possibility that our actual results and
refer to our years ended, or the dates, as the context
financial condition may differ, possibly materially, from the
requires, December 31, 2011, December 31, 2010 and
anticipated results and financial condition indicated in
December 31, 2009, respectively. Any reference to a future
these forward-looking statements. Important factors that
year refers to a year ending on December 31 of that year.
could cause our actual results and financial condition to
Certain reclassifications have been made to previously
differ from those indicated in these forward-looking
reported amounts to conform to the current presentation.
statements include, among others, those discussed below
under “Certain Risk Factors That May Affect Our
Businesses” as well as “Risk Factors” in Part I, Item 1A of
our Annual Report on Form 10-K and “Cautionary
Statement Pursuant to the U.S. Private Securities Litigation
Reform Act of 1995” in Part I, Item 1 of our Annual Report
on Form 10-K.

Executive Overview
The firm generated net earnings of $4.44 billion for 2011, Investment Banking
compared with $8.35 billion and $13.39 billion for 2010 The decrease in Investment Banking primarily reflected
and 2009, respectively. Our diluted earnings per common lower net revenues in our Underwriting business. Net
share were $4.51 for the year ended December 2011, revenues in equity underwriting were significantly lower
compared with $13.18 1 for the year ended December 2010 than 2010, principally due to a decline in industry-wide
and $22.13 for the year ended December 2009. Return on activity. Net revenues in debt underwriting were essentially
average common shareholders’ equity (ROE) 2 was 3.7% unchanged compared with 2010. Net revenues in Financial
for 2011, compared with 11.5% 1 for 2010 and 22.5% for Advisory decreased slightly compared with 2010.
2009. During 2011, we redeemed the 50,000 shares of our
10% Cumulative Perpetual Preferred Stock, Series G (Series
The decrease in Institutional Client Services compared with
G Preferred Stock) held by Berkshire Hathaway Inc. and
2010 reflected significantly lower net revenues in Fixed
certain of its subsidiaries (collectively, Berkshire
Income, Currency and Commodities Client Execution.
Hathaway). Excluding the impact of the $1.64 billion
Although activity levels in Fixed Income, Currency and
preferred dividend related to this redemption, diluted
Commodities Client Execution during 2011 were generally
earnings per common share were $7.46 3 and ROE was
consistent with 2010 levels, and results were solid during
5.9% 3 for 2011.
the first quarter of 2011, the environment during the
Book value per common share was $130.31 and tangible remainder of 2011 was characterized by broad market
book value per common share 4 was $119.72 as of concerns and uncertainty, resulting in volatile markets and
December 2011, both approximately 1% higher compared significantly wider credit spreads, which contributed to
with the end of 2010. During the year, the firm repurchased difficult market-making conditions and led to reductions in
47.0 million shares of its common stock for a total cost of risk by us and our clients. As a result of these conditions,
$6.04 billion. Our Tier 1 capital ratio under Basel 1 was net revenues across the franchise were lower, including
13.8% and our Tier 1 common ratio under Basel 1 5 was significant declines in mortgages and credit products,
12.1% as of December 2011. compared with 2010.
2011 versus 2010. The firm generated net revenues of Net revenues in Equities were slightly higher compared
$28.81 billion for 2011. These results reflected significantly with 2010. During 2011, average volatility levels increased
lower net revenues in Investing & Lending and Institutional and equity prices in Europe and Asia declined significantly,
Client Services, as well as lower net revenues in Investment particularly during the third quarter. The increase in net
Banking, compared with 2010. Net revenues in Investment revenues reflected higher commissions and fees, primarily
Management were essentially unchanged compared with due to higher transaction volumes, particularly during the
2010. third quarter of 2011. In addition, net revenues in securities
services increased compared with 2010, reflecting the
An overview of net revenues for each of our business
impact of higher average customer balances. Equities client
segments is provided below.
execution net revenues were lower than 2010, primarily
reflecting significantly lower net revenues in shares.
1. Excluding the impact of the $465 million related to the U.K. bank payroll tax, the $550 million related to the SEC settlement and the $305 million impairment of our
New York Stock Exchange (NYSE) Designated Market Maker (DMM) rights, diluted earnings per common share were $15.22 and ROE was 13.1% for 2010. We
believe that presenting our 2010 results excluding the impact of these items is meaningful because it increases the comparability of period-to-period results. Diluted
earnings per common share and ROE excluding these items are non-GAAP measures and may not be comparable to similar non-GAAP measures used by other
companies. See “Results of Operations — Financial Overview” below for further information about our calculation of diluted earnings per common share and ROE
excluding the impact of these items.
2. See “Results of Operations — Financial Overview” below for further information about our calculation of ROE.
3. We believe that presenting our 2011 results excluding the impact of the $1.64 billion preferred dividend related to the redemption of our Series G Preferred Stock
(calculated as the difference between the carrying value and the redemption value of the preferred stock) is meaningful because it increases the comparability of
period-to-period results. Diluted earnings per common share and ROE excluding this item are non-GAAP measures and may not be comparable to similar non-GAAP
measures used by other companies. See “Results of Operations — Financial Overview” below for further information about our calculation of diluted earnings per
common share and ROE excluding the impact of this dividend.
4. Tangible book value per common share is a non-GAAP measure and may not be comparable to similar non-GAAP measures used by other companies. See “Equity
Capital — Other Capital Metrics” below for further information about our calculation of tangible book value per common share.
5. Tier 1 common ratio is a non-GAAP measure and may not be comparable to similar non-GAAP measures used by other companies. See “Equity Capital —
Consolidated Regulatory Capital Ratios” below for further information about our Tier 1 common ratio.

Investing & Lending Investment Banking

Net revenues in Investing & Lending were $2.14 billion and The decrease in Investment Banking reflected lower net
$7.54 billion for 2011 and 2010, respectively. Results for revenues in our Underwriting business, partially offset by
2011 included a loss of $517 million from our investment higher net revenues in Financial Advisory. The decline in
in the ordinary shares of Industrial and Commercial Bank Underwriting reflected lower net revenues in equity
of China Limited (ICBC) and net gains of $1.12 billion underwriting, principally due to a decline in client activity
from other investments in equities, primarily in private in comparison to 2009, which included significant capital-
equity positions, partially offset by losses from public raising activity by financial institution clients. Net revenues
equities. In addition, Investing & Lending included net in debt underwriting were essentially unchanged compared
revenues of $96 million from debt securities and loans. This with 2009. The increase in Financial Advisory primarily
amount includes approximately $1 billion of unrealized reflected an increase in client activity.
losses related to relationship lending activities, including the
effect of hedges, offset by net interest income and net gains
The decrease in Institutional Client Services reflected
from other debt securities and loans. Results for 2011 also
significantly lower net revenues in Fixed Income, Currency
included other net revenues of $1.44 billion, principally
and Commodities Client Execution and, to a lesser extent,
related to our consolidated entities held for investment
Equities. During 2010, Fixed Income, Currency and
purposes.
Commodities Client Execution operated in a challenging
Investment Management environment characterized by lower client activity levels,
Net revenues in Investment Management were essentially which reflected broad market concerns including European
unchanged compared with 2010, primarily due to higher sovereign debt risk and uncertainty over regulatory reform,
management and other fees, reflecting favorable changes in as well as tighter bid/offer spreads. The decrease in net
the mix of assets under management, offset by lower revenues compared with a particularly strong 2009
incentive fees. During the year, assets under management primarily reflected significantly lower results in interest rate
decreased $12 billion to $828 billion, reflecting net products, credit products, commodities and, to a lesser
outflows of $17 billion, partially offset by net market extent, currencies. These decreases were partially offset by
appreciation of $5 billion. Net outflows primarily reflected higher net revenues in mortgages, as 2009 included
outflows in fixed income and equity assets, partially offset approximately $1 billion of losses related to commercial
by inflows in money market assets. mortgage loans.
2010 versus 2009. The firm generated net revenues of The decline in Equities compared with 2009 primarily
$39.16 billion for 2010, despite a challenging operating reflected significantly lower net revenues in equities client
environment. These results reflected significantly lower net execution, principally due to significantly lower results in
revenues in Institutional Client Services and slightly lower derivatives and shares. Commissions and fees were also
net revenues in Investment Banking compared with 2009. lower than 2009, primarily reflecting lower client activity
These decreases were partially offset by significantly higher levels. In addition, securities services net revenues were
net revenues in Investing & Lending and higher net significantly lower compared with 2009, primarily
revenues in Investment Management. reflecting tighter securities lending spreads, principally
due to the impact of changes in the composition of
An overview of net revenues for each of our business
customer balances, partially offset by the impact of higher
segments is provided below.
average customer balances. During 2010, although equity
markets were volatile during the first half of the year,
equity prices generally improved and volatility levels
declined in the second half of the year.


Net revenues in Investing & Lending were $7.54 billion and The increase in Investment Management primarily reflected
$2.86 billion for 2010 and 2009, respectively. During higher incentive fees across our alternative investment
2010, an increase in global equity markets and tighter products. Management and other fees also increased,
credit spreads provided a favorable backdrop for our reflecting favorable changes in the mix of assets under
Investing & Lending business. Results in Investing & management, as well as the impact of appreciation in the
Lending for 2010 included a gain of $747 million from our value of client assets. During 2010, assets under
investment in the ordinary shares of ICBC, a net gain of management decreased 4% to $840 billion, primarily
$2.69 billion from other investments in equities, a net gain reflecting outflows in money market assets, consistent with
of $2.60 billion from debt securities and loans and other net industry trends.
revenues of $1.51 billion, principally related to our
Our business, by its nature, does not produce predictable
consolidated entities held for investment purposes.
earnings. Our results in any given period can be materially
affected by conditions in global financial markets,
economic conditions generally and other factors. For a
further discussion of the factors that may affect our future
operating results, see “Certain Risk Factors That May
Affect Our Businesses” below, as well as “Risk Factors” in
Part I, Item 1A of our Annual Report on Form 10-K.

Business Environment
Global economic growth generally moderated in 2011, as elevated in some economies. During 2011, the U.S. Federal
real gross domestic product (GDP) grew in most major Reserve, the Bank of England and the Bank of Japan left
economies and emerging markets, but at a slower pace than interest rates unchanged, while the European Central Bank
in 2010. Certain unfavorable market conditions that increased and then reduced its interest rate during the year,
emerged in 2010 continued during the year, including ending the year unchanged compared with 2010. In
concerns about European sovereign debt risk and uncertainty addition, the People’s Bank of China increased its one-year
regarding financial regulatory reform. Additional concerns benchmark lending rate during the year. The price of crude
that emerged during the first half of the year that affected our oil increased during 2011. The U.S. dollar strengthened
businesses included political unrest in the Middle East, the against the Euro and was essentially unchanged against the
earthquake and tsunami in Japan and inflation in emerging British pound, while it weakened against the Japanese yen.
markets. During the second half of the year, concerns about
United States
European sovereign debt risk and its impact on the European
In the United States, real GDP increased by 1.7% in 2011,
banking system intensified, while concerns about U.S.
compared with an increase of 3.0% in 2010. Growth
growth and the uncertainty regarding the U.S. federal debt
moderated, primarily reflecting a decline in government
ceiling emerged, contributing to higher volatility levels,
spending and reduced growth in exports, although business
significantly lower global equity prices and significantly
investment and consumer expenditure increased. Business
wider corporate credit spreads. This prompted the U.S.
and consumer confidence declined during most of the year,
Federal Reserve and the European Central Bank to announce
primarily reflecting increased global economic concerns
easing measures in order to stimulate economic growth in the
and uncertainties. In addition, residential investment
U.S. and to alleviate concerns about Europe. Industry-wide
remained weak and measures of core inflation increased
completed and announced mergers and acquisitions volumes
during the year from low levels. Growth in industrial
increased compared with 2010, but declined during the
production decreased, primarily reflecting the impact of
second half of the year. Industry-wide equity and equity-
supply-chain disruptions associated with Japan earlier in
related offerings and industry-wide debt offerings both
the year. The unemployment rate declined slightly during
decreased compared with 2010, including significant declines
the year, although it remained high. The U.S. Federal
during the second half of the year. For a further discussion of
Reserve maintained its federal funds rate at a target range of
how market conditions affect our businesses, see “Certain
zero to 0.25% during the year. In addition, the U.S. Federal
Risk Factors That May Affect Our Businesses” below as well
Reserve concluded quantitative easing measures that
as “Risk Factors” in Part I, Item 1A of our Annual Report on
included the purchase of significant amounts of U.S.
Form 10-K.
Treasury debt and announced further easing measures by
Global extending the duration of the U.S. Treasury debt it holds.
During 2011, real GDP growth declined in most major The yield on the 10-year U.S. Treasury note fell by 141
economies and emerging markets. The slowdown in basis points during 2011 to 1.89%. In equity markets, the
economic growth primarily reflected slower growth in Dow Jones Industrial Average increased by 6%, while the
domestic demand compared with 2010, while international NASDAQ Composite Index decreased by 2% and the S&P
trade continued to grow strongly during 2011. 500 Index ended the year essentially unchanged.
Unemployment levels declined slightly compared with
2010, although the rate of unemployment remained

Europe Asia
Real GDP in the Euro area economies increased by an In Japan, real GDP decreased by 0.9% in 2011, compared with
estimated 1.6% in 2011, compared with an increase of an increase of 4.4% in 2010. Net exports and business
1.8% in 2010. Growth moderated slightly, primarily investment declined during the year due to the economic impact
reflecting reduced growth in consumer expenditure and of the earthquake and tsunami in the first quarter. Measures of
exports, although fixed investment increased. Surveys of inflation remained negative during 2011. The Bank of Japan
business and consumer confidence deteriorated over the maintained its target overnight call rate at a range of zero to
course of the year. Measures of core inflation increased 0.10% and the yield on 10-year Japanese government bonds fell
during the year from low levels. Concerns about fiscal by 14 basis points to 0.99%. The Japanese yen appreciated by
challenges in several Euro area economies intensified during 5% against the U.S. dollar. The Nikkei 225 Index decreased by
the year, weighing on economic growth in these economies 17% during the year. In China, real GDP increased by 9.2% in
and on risk appetite more broadly. In addition, concerns 2011 compared with an increase of 10.4% in 2010. Growth
about European sovereign debt risk contributed to higher moderated, primarily reflecting a slowdown in net exports and
market volatility and funding pressures. The European fixed investment growth, although consumer spending
Central Bank and governments in the Euro area took a increased. Measures of inflation increased significantly during
range of policy measures to address these issues. The 2011, reflecting the impact of higher food and energy prices, but
European Central Bank increased its main refinancing decreased towards the end of the year. The People’s Bank of
operations rate by 25 basis points during both the second China raised its one-year benchmark lending rate by 75 basis
and third quarters, but reversed these increases during the points to 6.56% and increased the reserve requirement ratio by
fourth quarter, such that the rate ended the year at 1.00%, 250 basis points during the year. In addition, the Chinese yuan
unchanged compared with the end of 2010. In the United appreciated by 4% against the U.S. dollar and the Shanghai
Composite Index decreased by 22% during 2011. In India, real
Kingdom, real GDP increased by 0.8% for 2011, compared
GDP increased by an estimated 6.9% in 2011 compared with
with an increase of 2.1% in 2010. The Bank of England
an increase of 8.5% in 2010. Growth moderated, primarily
maintained its official bank rate at 0.50% during the year.
reflecting a slowdown in consumer expenditure and fixed
Long-term government bond yields generally declined
investment growth. The rate of wholesale inflation remained at
during the year, although long-term government bond
elevated levels, but decreased during the year. The Indian rupee
yields in certain Euro area economies increased
depreciated by 19% against the U.S. dollar. Equity markets in
significantly. In addition, spreads between German bond
Hong Kong and India declined significantly and equity markets
yields and those of most Euro area economies widened in South Korea ended the year lower.
during the year. The Euro depreciated by 3% and the
British pound was essentially unchanged against the U.S. Other Markets
dollar. The Euro Stoxx 50 Index and the CAC 40 Index In Brazil, real GDP increased by an estimated 3.0% in 2011,
both declined by 17%, while the DAX Index and the FTSE compared with an increase of 7.5% in 2010. Growth
100 Index decreased by 15% and 6%, respectively, moderated, primarily reflecting a slowdown in investment
compared with the end of 2010. and consumer expenditure growth. The Brazilian real
weakened against the U.S. dollar. Brazilian equity prices
ended the year significantly lower compared with the end of
2010. In Russia, real GDP increased by an estimated 4.2% in
2011, compared with an increase of 4.0% in 2010. Growth
was driven by an increase in domestic demand, particularly
during the second half of the year. The Russian ruble
weakened against the U.S. dollar and Russian equity prices
ended the year significantly lower compared with the end of
2010.

Critical Accounting Policies

Fair Value
Fair Value Hierarchy. Financial instruments owned, at fair Instruments categorized within level 3 of the fair value
value and Financial instruments sold, but not yet hierarchy, which represent approximately 5% of the firm’s
purchased, at fair value (i.e., inventory), as well as certain total assets, require one or more significant inputs that are
other financial assets and financial liabilities, are reflected not observable. Absent evidence to the contrary,
in our consolidated statements of financial condition at fair instruments classified within level 3 of the fair value
value (i.e., marked-to-market), with related gains or losses hierarchy are initially valued at transaction price, which is
generally recognized in our consolidated statements of considered to be the best initial estimate of fair value.
earnings. The use of fair value to measure financial Subsequent to the transaction date, we use other
instruments is fundamental to our risk management methodologies to determine fair value, which vary based on
practices and is our most critical accounting policy. the type of instrument. Estimating the fair value of level 3
financial instruments requires judgments to be made. These
The fair value of a financial instrument is the amount that judgments include:
would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market ‰ determining the appropriate valuation methodology and/
participants at the measurement date. In determining fair or model for each type of level 3 financial instrument;
value, the hierarchy under U.S. generally accepted ‰ determining model inputs based on an evaluation of all
accounting principles (U.S. GAAP) gives (i) the highest relevant empirical market data, including prices
priority to unadjusted quoted prices in active markets for evidenced by market transactions, interest rates, credit
identical, unrestricted assets or liabilities (level 1 inputs), spreads, volatilities and correlations; and
(ii) the next priority to inputs other than level 1 inputs that
are observable, either directly or indirectly (level 2 inputs), ‰ determining appropriate valuation adjustments related
to illiquidity or counterparty credit quality.
and (iii) the lowest priority to inputs that cannot be
observed in market activity (level 3 inputs). Assets and Regardless of the methodology, valuation inputs and
liabilities are classified in their entirety based on the lowest assumptions are only changed when corroborated by
level of input that is significant to their fair value substantive evidence.
measurement.
Controls Over Valuation of Financial Instruments.
The fair values for substantially all of our financial assets Market makers and investment professionals in our
and financial liabilities are based on observable prices and revenue-producing units are responsible for pricing our
inputs and are classified in levels 1 and 2 of the hierarchy. financial instruments. Our control infrastructure is
Certain level 2 and level 3 financial assets and financial independent of the revenue-producing units and is
liabilities may require appropriate valuation adjustments fundamental to ensuring that all of our financial
that a market participant would require to arrive at fair instruments are appropriately valued at market-clearing
value for factors such as counterparty and the firm’s credit levels. In the event that there is a difference of opinion in
quality, funding risk, transfer restrictions, liquidity and bid/ situations where estimating the fair value of financial
offer spreads. Valuation adjustments are generally based on instruments requires judgment (e.g., calibration to market
market evidence. comparables or trade comparison, as described below), the
final valuation decision is made by senior managers in
control and support functions that are independent of the
revenue-producing units (independent control and support
functions). This independent price verification is critical to
ensuring that our financial instruments are properly valued.

Price Verification. The objective of price verification is to Review of Net Revenues. Independent control and
have an informed and independent opinion with regard to support functions ensure adherence to our pricing policy
the valuation of financial instruments under review. through a combination of daily procedures, including the
Instruments that have one or more significant inputs which explanation and attribution of net revenues based on the
cannot be corroborated by external market data are underlying factors. Through this process we independently
classified within level 3 of the fair value hierarchy. Price validate net revenues, identify and resolve potential fair
verification strategies utilized by our independent control value or trade booking issues on a timely basis and ensure
and support functions include: that risks are being properly categorized and quantified.
‰ Trade Comparison. Analysis of trade data (both Review of Valuation Models. Quantitative professionals
internal and external where available) is used to within our Market Risk Management department (Market
determine the most relevant pricing inputs and Risk Management) perform an independent model
valuations. approval process. This process incorporates a review of a
diverse set of model and trade parameters across a broad
‰ External Price Comparison. Valuations and prices are
range of values (including extreme and/or improbable
compared to pricing data obtained from third parties
conditions) in order to critically evaluate:
(e.g., broker or dealers, MarkIt, Bloomberg, IDC,
TRACE). Data obtained from various sources is ‰ the model’s suitability for valuation and risk management
compared to ensure consistency and validity. When of a particular instrument type;
broker or dealer quotations or third-party pricing
‰ the model’s accuracy in reflecting the characteristics of
vendors are used for valuation or price verification,
the related product and its significant risks;
greater priority is generally given to executable
quotations. ‰ the suitability and properties of the numerical algorithms
incorporated in the model;
‰ Calibration to Market Comparables. Market-based
transactions are used to corroborate the valuation of ‰ the model’s consistency with models for similar products;
positions with similar characteristics, risks and and
components.
‰ the model’s sensitivity to input parameters and
‰ Relative Value Analyses. Market-based transactions assumptions.
are analyzed to determine the similarity, measured in
New or changed models are reviewed and approved.
terms of risk, liquidity and return, of one instrument
Models are evaluated and re-approved annually to assess
relative to another or, for a given instrument, of one
the impact of any changes in the product or market and any
maturity relative to another.
market developments in pricing theories.
‰ Collateral Analyses. Margin disputes on derivatives are
examined and investigated to determine the impact, if
any, on our valuations.
‰ Execution of Trades. Where appropriate, trading desks
are instructed to execute trades in order to provide
evidence of market-clearing levels.
‰ Backtesting. Valuations are corroborated by comparison
to values realized upon sales.
See Notes 5 through 8 to the consolidated financial
statements for further information about fair value
measurements.

Level 3 Financial Assets at Fair Value. The table below See Notes 5 through 8 to the consolidated financial
presents financial assets measured at fair value and the statements for further information about changes in level 3
amount of such assets that are classified within level 3 of the financial assets and fair value measurements.
fair value hierarchy.
Total level 3 financial assets were $47.94 billion and
$45.38 billion as of December 2011 and December 2010,
respectively.
As of December 2011 As of December 2010
Total at Level 3 Total at Level 3
in millions Fair Value Total Fair Value Total
Commercial paper, certificates of deposit, time deposits
and other money market instruments $ 13,440 $ — $ 11,262 $ —
U.S. government and federal agency obligations 87,040 — 84,928 —
Non-U.S. government obligations 49,205 148 40,675 —
Mortgage and other asset-backed loans and securities:
Loans and securities backed by commercial real estate 6,699 3,346 7,510 3,976
Loans and securities backed by residential real estate 7,592 1,709 9,532 2,501
Bank loans and bridge loans 19,745 11,285 18,039 9,905
Corporate debt securities 22,131 2,480 24,719 2,737
State and municipal obligations 3,089 599 2,792 754
Other debt obligations 4,362 1,451 3,232 1,274
Equities and convertible debentures 65,113 13,667 67,833 11,060
Commodities 5,762 — 13,138 —
Total cash instruments 284,178 34,685 283,660 32,207
Derivatives 80,028 11,900 73,293 12,772
Financial instruments owned, at fair value 364,206 46,585 356,953 44,979
Securities segregated for regulatory and other purposes 42,014 — 36,182 —
Securities purchased under agreements to resell 187,789 557 188,355 100
Securities borrowed 47,621 — 48,822 —
Receivables from customers and counterparties 9,682 795 7,202 298
Total $651,312 $47,937 $637,514 $45,377

Goodwill and Identifiable Intangible Assets

Goodwill. Goodwill is the cost of acquired companies in If the current economic market conditions persist and if
excess of the fair value of net assets, including identifiable there is a prolonged period of weakness in the business
intangible assets, at the acquisition date. Goodwill is environment and financial markets, our earnings may be
assessed annually for impairment, or more frequently if adversely affected, which could result in an impairment of
events occur or circumstances change that indicate an goodwill in the future. In addition, significant changes to
impairment may exist, by first assessing qualitative factors other critical inputs of the goodwill impairment test (e.g.,
to determine whether it is more likely than not that the fair cost of equity) could cause the estimated fair value of our
value of a reporting unit is less than its carrying amount. If reporting units to decline, which could result in an
the results of the qualitative assessment are not conclusive, impairment of goodwill in the future.
a quantitative goodwill impairment test is performed by
See Note 3 to the consolidated financial statements for
comparing the estimated fair value of each reporting unit
information about amendments to the accounting guidance
with its estimated net book value. We derive the fair value
for goodwill impairment testing and Note 13 to the
based on valuation techniques we believe market
consolidated financial statements for the carrying value of
participants would use (i.e., observable price-to-earnings
our goodwill.
multiples and price-to-book multiples). We derive the net
book value by estimating the amount of shareholders’ Identifiable Intangible Assets. We amortize our identifiable
equity required to support the activities of each reporting intangible assets (i) over their estimated lives, (ii) based on
unit. Estimating the fair value of our reporting units economic usage or (iii) in proportion to estimated gross profits
requires management to make judgments. Critical inputs or premium revenues. Identifiable intangible assets are tested
include (i) projected earnings, (ii) estimated long-term for impairment whenever events or changes in circumstances
growth rates and (iii) cost of equity. suggest that an asset’s or asset group’s carrying value may not
be fully recoverable.
During the second half of 2011, consistent with the decline
in stock prices in the broader financial services sector, our An impairment loss, generally calculated as the difference
stock price declined and throughout most of this period, between the estimated fair value and the carrying value of
our market capitalization was below book value. an asset or asset group, is recognized if the sum of the
Accordingly, we performed a quantitative impairment test estimated undiscounted cash flows relating to the asset or
during the fourth quarter of 2011 and determined that asset group is less than the corresponding carrying value.
goodwill was not impaired. The estimated fair value of our See Note 13 to the consolidated financial statements for
reporting units in which we hold substantially all of our the carrying value and estimated remaining lives of our
goodwill significantly exceeded the estimated carrying identifiable intangible assets by major asset class and
values. We believe that it is appropriate to consider market impairments of our identifiable intangible assets.
capitalization, among other factors, as an indicator of fair
A prolonged period of market weakness could adversely
value over a reasonable period of time.
impact our businesses and impair the value of our
identifiable intangible assets. In addition, certain events
could indicate a potential impairment of our identifiable
intangible assets, including (i) decreases in revenues from
commodity-related customer contracts and relationships,
(ii) decreases in cash receipts from television broadcast
royalties, (iii) an adverse action or assessment by a regulator
or (iv) adverse actual experience on the contracts in our
variable annuity and life insurance business. Management
judgment is required to evaluate whether indications of
potential impairment have occurred, and to test intangibles
for impairment if required.

Use of Estimates
The use of generally accepted accounting principles requires Codification 740. See Note 24 to the consolidated financial
management to make certain estimates and assumptions. In statements for further information about accounting for
addition to the estimates we make in connection with fair income taxes.
value measurements, and the accounting for goodwill and
Significant judgment is required in making these estimates
identifiable intangible assets, the use of estimates and
and our final liabilities may ultimately be materially
assumptions is also important in determining provisions for
different. Our total estimated liability in respect of litigation
losses that may arise from litigation, regulatory proceedings
and regulatory proceedings is determined on a case-by-case
and tax audits.
basis and represents an estimate of probable losses after
We estimate and provide for potential losses that may arise considering, among other factors, the progress of each case
out of litigation and regulatory proceedings to the extent or proceeding, our experience and the experience of others
that such losses are probable and can be reasonably in similar cases or proceedings, and the opinions and views
estimated. In accounting for income taxes, we estimate and of legal counsel. See Notes 18 and 27 to the consolidated
provide for potential liabilities that may arise out of tax financial statements for information on certain judicial,
audits to the extent that uncertain tax positions fail to meet regulatory and legal proceedings.
the recognition standard under FASB Accounting Standards

Results of Operations
The composition of our net revenues has varied over time as Factors” in Part I, Item 1A of our Annual Report on Form
financial markets and the scope of our operations have 10-K for a further discussion of the impact of economic and
changed. The composition of net revenues can also vary market conditions on our results of operations.
over the shorter term due to fluctuations in U.S. and global
Financial Overview
economic and market conditions. See “Certain Risk Factors
The table below presents an overview of our financial
That May Affect Our Businesses” below and “Risk
results.
Year Ended December

$ in millions, except per share amounts 2011 2010 2009
Net revenues $28,811 $39,161 $45,173
Pre-tax earnings 6,169 12,892 19,829
Net earnings 4,442 8,354 13,385
Net earnings applicable to common shareholders 2,510 7,713 12,192
Diluted earnings per common share 4.51 13.18 22.13
Return on average common shareholders’ equity 1 3.7% 11.5% 22.5%
Diluted earnings per common share, excluding the impact of the Series G Preferred Stock dividend 2 $ 7.46 N/A N/A
Return on average common shareholders’ equity, excluding the impact of the Series G Preferred Stock
dividend 2 5.9% N/A N/A
Diluted earnings per common share, excluding the impact of the U.K. bank payroll tax, the SEC
settlement and the NYSE DMM rights impairment 3 N/A $ 15.22 N/A
Return on average common shareholders’ equity, excluding the impact of the U.K. bank payroll tax, the
SEC settlement and the NYSE DMM rights impairment 3 N/A 13.1% N/A
1. ROE is computed by dividing net earnings applicable to common shareholders by average monthly common shareholders’ equity. The table below presents our
average common shareholders’ equity.
Average for the

Year Ended December
in millions 2011 2010 2009
Total shareholders’ equity $72,708 $74,257 $ 65,527
Preferred stock (3,990) (6,957) (11,363)
Common shareholders’ equity $68,718 $67,300 $ 54,164
2. We believe that presenting our results excluding the impact of the $1.64 billion Series G Preferred Stock dividend is meaningful, as it increases the comparability of
period-to-period results. Diluted earnings per common share and ROE excluding this item are non-GAAP measures and may not be comparable to similar non-GAAP
measures used by other companies. The tables below present the calculation of net earnings applicable to common shareholders, diluted earnings per common
share and average common shareholders’ equity excluding the impact of this dividend.
Year Ended
in millions, except per share amount December 2011
Net earnings applicable to common shareholders $2,510
Impact of the Series G Preferred Stock dividend 1,643
Net earnings applicable to common shareholders, excluding the impact of the Series G Preferred Stock dividend 4,153
Divided by: average diluted common shares outstanding 556.9
Diluted earnings per common share, excluding the impact of the Series G Preferred Stock dividend $ 7.46
Average for the

Year Ended
in millions December 2011
Total shareholders’ equity $72,708
Preferred stock (3,990)
Common shareholders’ equity 68,718
Impact of the Series G Preferred Stock dividend 1,264
Common shareholders’ equity, excluding the impact of the Series G Preferred Stock dividend $69,982

3. We believe that presenting our results excluding the impact of the U.K. bank payroll tax, the SEC settlement and the NYSE DMM rights impairment is meaningful, as
it increases the comparability of period-to-period results. Diluted earnings per common share and ROE excluding these items are non-GAAP measures and may not
be comparable to similar non-GAAP measures used by other companies. The tables below present the calculation of net earnings applicable to common
shareholders, diluted earnings per common share and average common shareholders’ equity excluding the impact of these items.
Year Ended
in millions, except per share amounts December 2010
Net earnings applicable to common shareholders $7,713
Impact of the U.K. bank payroll tax 465
Pre-tax impact of the SEC settlement 550
Tax impact of the SEC settlement (6)
Pre-tax impact of the NYSE DMM rights impairment 305
Tax impact of the NYSE DMM rights impairment (118)
Net earnings applicable to common shareholders, excluding the impact of the U.K. bank payroll tax,
the SEC settlement and the NYSE DMM rights impairment 8,909
Divided by: average diluted common shares outstanding 585.3
Diluted earnings per common share, excluding the impact of the U.K. bank payroll tax, the SEC settlement
and the NYSE DMM rights impairment $15.22
Average for the

Year Ended
in millions December 2010
Total shareholders’ equity $74,257
Preferred stock (6,957)
Common shareholders’ equity 67,300
Impact of the U.K. bank payroll tax 359
Impact of the SEC settlement 293
Impact of the NYSE DMM rights impairment 14
Common shareholders’ equity, excluding the impact of the U.K. bank payroll tax, the SEC settlement
and the NYSE DMM rights impairment $67,966

Net Revenues 2011 versus 2010. Investment banking revenues on the

2011 versus 2010. Net revenues were $28.81 billion for consolidated statement of earnings were $4.36 billion for
2011, 26% lower than 2010, reflecting significantly lower 2011, 9% lower than 2010, primarily reflecting lower
net revenues in Investing & Lending and Institutional revenues in our underwriting business. Revenues in equity
Client Services, as well as lower net revenues in Investment underwriting were significantly lower than 2010, principally
Banking. Net revenues in Investment Management were due to a decline in industry-wide activity. Revenues in debt
essentially unchanged compared with 2010. underwriting were essentially unchanged compared with
2010. Revenues in financial advisory decreased slightly
2010 versus 2009. Net revenues were $39.16 billion for
compared with 2010.
2010, 13% lower than 2009, reflecting significantly lower
net revenues in Institutional Client Services and slightly 2010 versus 2009. Investment banking revenues on the
lower net revenues in Investment Banking. These decreases consolidated statement of earnings were $4.81 billion for
were partially offset by significantly higher net revenues in 2010, 3% lower than 2009, reflecting lower revenues in our
Investing & Lending and higher net revenues in Investment underwriting business, partially offset by higher revenues in
Management. financial advisory. The decline in underwriting reflected
Net Interest Income lower revenues in equity underwriting, principally due to a
2011 versus 2010. Net interest income was $5.19 billion decline in client activity in comparison to 2009, which
for 2011, 6% lower than 2010. The decrease compared included significant capital-raising activity by financial
with 2010 was primarily due to higher interest expense institution clients. Revenues in debt underwriting were
related to our long-term borrowings and higher dividend essentially unchanged compared with 2009. Revenues in
expense related to financial instruments sold, but not yet financial advisory increased compared with 2009, primarily
purchased, partially offset by an increase in interest income reflecting an increase in client activity.
from higher yielding collateralized agreements. Investment management
2010 versus 2009. Net interest income was $5.50 billion During the first half of 2011, investment management
for 2010, 26% lower than 2009. The decrease compared revenues reflected an operating environment generally
with 2009 was primarily due to lower average fixed income characterized by improved asset prices and a shift in
assets, most notably U.S. federal agency obligations, higher investor assets away from money markets in favor of asset
interest expense related to our long-term borrowings and classes with potentially higher risk and returns. However,
tighter securities lending spreads. during the second half of 2011, asset prices declined,
particularly in equities, in part driven by increased
Non-interest Revenues uncertainty regarding the global economic outlook.
Investment banking Declining asset prices and economic uncertainty
Investment banking revenues reflected an operating contributed to investors shifting assets away from asset
environment generally characterized by significant declines
classes with potentially higher risk and returns to asset
in industry-wide underwriting and mergers and acquisitions
classes with lower risk and returns. If asset prices continue
activity levels during the second half of 2011. These
to decline or investors continue to favor lower risk asset
declines reflected increased concerns regarding the
classes or withdraw their assets, investment management
weakened state of global economies, including heightened
revenues would likely continue to be negatively impacted.
European sovereign debt risk, which contributed to a
significant widening in credit spreads, a sharp increase in 2011 versus 2010. Investment management revenues on
volatility levels and a significant decline in global equity the consolidated statement of earnings were $4.69 billion
markets during the second half of 2011. If these concerns for 2011, essentially unchanged compared with 2010,
continue or if equity markets decline further, resulting in primarily due to higher management and other fees,
lower levels of client activity, revenues in investment reflecting favorable changes in the mix of assets under
banking would likely continue to be negatively impacted. management, offset by lower incentive fees.

2010 versus 2009. Investment management revenues on the 2011 versus 2010. Market-making revenues on the
consolidated statement of earnings were $4.67 billion for consolidated statement of earnings were $9.29 billion for
2010, 10% higher than 2009, primarily reflecting higher 2011, 32% lower than 2010. Although activity levels during
incentive fees across our alternative investment products. 2011 were generally consistent with 2010 levels, and results
Management and other fees also increased, reflecting were solid during the first quarter of 2011, the environment
favorable changes in the mix of assets under management, as during the remainder of 2011 was characterized by broad
well as the impact of appreciation in the value of client assets. market concerns and uncertainty, resulting in volatile
markets and significantly wider credit spreads, which
Commissions and fees
contributed to difficult market-making conditions and led to
Broad market concerns and uncertainties that emerged
reductions in risk by us and our clients. As a result of these
during 2010, including concerns about European sovereign
conditions, revenues across most of our major market-
debt risk and the weakened state of global economies,
making activities were lower during 2011 compared with
heightened during 2011. These concerns and uncertainties
2010.
resulted in an increase in average volatility levels and
significantly lower equity prices in Europe and Asia, 2010 versus 2009. Market-making revenues on the
particularly during the third quarter of 2011. The macro consolidated statement of earnings were $13.68 billion for
challenges during the year resulted in volatile markets, 2010, 38% lower than 2009. During 2010, market-making
which contributed to higher transaction volumes and fees. revenues were negatively impacted by lower client activity
If these concerns and uncertainties continue, but were to levels, which reflected broad market concerns including
result in lower transaction volumes, commissions and fees European sovereign debt risk and uncertainty over
would likely be negatively impacted. regulatory reform, as well as tighter bid/offer spreads. The
decrease in revenues compared with a particularly strong
2011 versus 2010. Commissions and fees on the
2009 primarily reflected lower results across most of our
consolidated statement of earnings were $3.77 billion for
major market-making activities. These decreases were
2011, 6% higher than 2010, reflecting higher transaction
partially offset by higher revenues in mortgages, as 2009
volumes, particularly during the third quarter of 2011.
included significant losses related to commercial mortgage
2010 versus 2009. Commissions and fees on the consolidated loans.
statement of earnings were $3.57 billion for 2010, 7% lower
Other principal transactions
than 2009, primarily reflecting lower client activity levels.
During 2011, other principal transactions results reflected
Market making an operating environment characterized by a significant
During 2011, market-making revenues were negatively decline in equity markets in Europe and Asia, and
impacted by increased concerns regarding the weakened state unfavorable credit markets that were negatively impacted
of global economies, including heightened European by increased concerns regarding the weakened state of
sovereign debt risk, and its impact on the European banking global economies, including heightened European sovereign
system and global financial institutions. These conditions debt risk. If equity markets decline further and credit
also impacted expectations for economic prospects in the spreads widen further, other principal transactions
U.S. and were reflected in equity and debt markets more revenues would likely continue to be negatively impacted.
broadly. In addition, the downgrade in credit ratings of the
U.S. government and federal agencies and many financial
institutions during the second half of 2011 contributed to
further uncertainty in the markets. These concerns, as well as
other broad market concerns, such as uncertainty over
financial regulatory reform, continued to have a negative
impact on market-making revenues during 2011. If these
concerns continue, and market-making conditions remain
challenging, market-making revenues would likely continue
to be negatively impacted.

2011 versus 2010. Other principal transactions revenues Operating Expenses

on the consolidated statements of earnings were Our operating expenses are primarily influenced by
$1.51 billion and $6.93 billion for 2011 and 2010, compensation, headcount and levels of business activity.
respectively. Results for 2011 included a loss from our Compensation and benefits includes salaries, discretionary
investment in the ordinary shares of ICBC and net gains compensation, amortization of equity awards and other
from other investments in equities, primarily in private items such as benefits. Discretionary compensation is
equity positions, partially offset by losses from public significantly impacted by, among other factors, the level of
equities. In addition, revenues in other principal net revenues, prevailing labor markets, business mix, the
transactions included net losses from debt securities and structure of our share-based compensation programs and
loans, primarily reflecting approximately $1 billion of the external environment.
unrealized losses related to relationship lending activities,
In the context of more difficult economic and financial
including the effect of hedges, partially offset by net gains
conditions, the firm launched an initiative during the
from other debt securities and loans. Results for 2011 also
second quarter of 2011 to identify areas where we can
included revenues related to our consolidated entities held
operate more efficiently and reduce our operating
for investment purposes.
expenses. We targeted approximately $1.4 billion in annual
2010 versus 2009. Other principal transactions revenues run rate compensation and non-compensation reductions
on the consolidated statements of earnings were and will continue to monitor our expense run rate closely
$6.93 billion and $2.62 billion for 2010 and 2009, and make further adjustments as needed.
respectively. During 2010, an increase in global equity
markets and tighter credit spreads provided a favorable
backdrop for other principal transactions revenues. Results
for 2010 included a gain from our investment in the
ordinary shares of ICBC, net gains from other investments
in equities, net gains from debt securities and loans and
revenues related to our consolidated entities held for
investment purposes. Results for 2009 included a gain from
our investment in the ordinary shares of ICBC, net gains
from debt securities and loans, and revenues related to our
consolidated entities held for investment purposes, partially
offset by net losses from other investments in equities.
During 2009, continued weakness in commercial real estate
markets negatively impacted our results.

The table below presents our operating expenses and total staff.
Year Ended December

$ in millions 2011 2010 2009
Compensation and benefits $12,223 $15,376 $16,193
U.K. bank payroll tax — 465 —
Brokerage, clearing, exchange and distribution fees 2,463 2,281 2,298
Market development 640 530 342
Communications and technology 828 758 709
Depreciation and amortization 1,865 1,889 1,734
Occupancy 1,030 1,086 950
Professional fees 992 927 678
Insurance reserves 1 529 398 334
Other expenses 2,072 2,559 2,106
Total non-compensation expenses 10,419 10,428 9,151
Total operating expenses $22,642 $26,269 $25,344
Total staff at period-end 2 33,300 35,700 32,500
Total staff at period-end including consolidated entities held for investment purposes 3 34,700 38,700 36,200
1. Revenues related to our insurance activities are included in “Market making” on the consolidated statements of earnings.
2. Includes employees, consultants and temporary staff.
3. Compensation and benefits and non-compensation expenses related to consolidated entities held for investment purposes are included in their respective line items
in the consolidated statements of earnings. Consolidated entities held for investment purposes are entities that are held strictly for capital appreciation, have a
defined exit strategy and are engaged in activities that are not closely related to our principal businesses.
2011 versus 2010. Operating expenses were $22.64 billion U.K. bank payroll tax) for 2010. Operating expenses for
for 2011, 14% lower than 2010. Compensation and 2010 included $465 million related to the U.K. bank
benefits expenses were $12.22 billion for 2011, a 21% payroll tax. Total staff decreased 7% during 2011. Total
decline compared with $15.38 billion for 2010. The ratio of staff including consolidated entities held for investment
compensation to net revenues for 2011 was 42.4%, purposes decreased 10% during 2011.
compared with 39.3% 1 (which excludes the impact of the
1. We believe that presenting our ratio of compensation and benefits to net revenues excluding the impact of the $465 million U.K. bank payroll tax is meaningful, as
excluding it increases the comparability of period-to-period results. The ratio of compensation and benefits to net revenues excluding the impact of this item is a
non-GAAP measure and may not be comparable to similar non-GAAP measures used by other companies. The table below presents the calculation of the ratio of
compensation and benefits to net revenues including and excluding the impact of this item.
Year Ended
$ in millions December 2010
Compensation and benefits (which excludes the impact of the $465 million U.K. bank payroll tax) $15,376
Ratio of compensation and benefits to net revenues 39.3%
Compensation and benefits, including the impact of the $465 million U.K. bank payroll tax $15,841
Ratio of compensation and benefits to net revenues, including the impact of the $465 million U.K. bank payroll tax 40.5%

Non-compensation expenses were $10.42 billion for During 2010, the United Kingdom enacted legislation that
2011, essentially unchanged compared with 2010. imposed a non-deductible 50% tax on certain financial
Non-compensation expenses for 2011 included higher institutions in respect of discretionary bonuses in excess of
brokerage, clearing, exchange and distribution fees, £25,000 awarded under arrangements made between
increased reserves related to our insurance business and December 9, 2009 and April 5, 2010 to “relevant banking
higher market development expenses compared with employees.” Our operating expenses for 2010 included
2010. These increases were offset by lower other $465 million related to this tax.
expenses during 2011. The decrease in other expenses
Non-compensation expenses were $10.43 billion for 2010,
primarily reflected lower net provisions for litigation and
14% higher than 2009. This increase was primarily
regulatory proceedings (2010 included $550 million
attributable to the impact of net provisions for litigation
related to a settlement with the SEC). In addition,
and regulatory proceedings of $682 million (including $550
non-compensation expenses during 2011 included
million related to a settlement with the SEC), and an
impairment charges of approximately $440 million,
impairment of our NYSE DMM rights of $305 million,
primarily related to consolidated investments and Litton
each during 2010. The remainder of the increase compared
Loan Servicing LP. Charitable contributions were $163
with 2009 generally reflected higher professional fees,
million during 2011, primarily including $78 million to
market development expenses and occupancy expenses.
Goldman Sachs Gives, our donor-advised fund, and $25
These increases were partially offset by the impact of
million to The Goldman Sachs Foundation.
significantly higher real estate impairment charges during
Compensation was reduced to fund the charitable
2009 related to our consolidated entities held for
contribution to Goldman Sachs Gives. The $78 million
investment purposes, as well as higher charitable
contribution is in addition to prior year contributions
contributions during 2009. The real estate impairment
made to Goldman Sachs Gives. The firm asks its
charges, which were measured based on discounted cash
participating managing directors to make
flow analyses, are included in our Investing & Lending
recommendations regarding potential charitable
segment and reflected weakness in the commercial real
recipients for this contribution.
estate markets. Charitable contributions were
2010 versus 2009. Operating expenses were $26.27 billion approximately $420 million during 2010, primarily
for 2010, 4% higher than 2009. Compensation and including $25 million to The Goldman Sachs Foundation
benefits expenses were $15.38 billion for 2010, a 5% and $320 million to Goldman Sachs Gives, our donor-
decline compared with $16.19 billion for 2009, due to advised fund. Compensation was reduced to fund the
lower net revenues. The ratio of compensation and benefits charitable contribution to Goldman Sachs Gives.
to net revenues for 2010 was 39.3% (which excludes the
impact of the $465 million U.K. bank payroll tax),
compared with 35.8% for 2009. Total staff increased 10%
during 2010. Total staff including consolidated entities held
for investment purposes increased 7% during 2010.

Provision for Taxes

The effective income tax rate for 2011 was 28.0%, down The effective income tax rate for 2010 of 32.7% 1 was
from 35.2% for 2010. Excluding the impact of the essentially unchanged from the effective income tax rate for
$465 million U.K. bank payroll tax and the $550 million 2009 of 32.5%.
SEC settlement, substantially all of which was
In December 2010, the rules related to the deferral of U.S.
non-deductible, the effective income tax rate for 2010 was
tax on certain non-repatriated active financing income were
32.7% 1. The decrease from 32.7% to 28.0% was primarily
extended retroactively to January 1, 2010 through
due to an increase in permanent benefits as a percentage of
December 31, 2011. If these rules are not extended, the
earnings and the earnings mix.
expiration may materially increase our effective income tax
rate beginning in 2013.
1. We believe that presenting our effective income tax rate for 2010 excluding the impact of the U.K. bank payroll tax and the SEC settlement, substantially all of which
was non-deductible, is meaningful as excluding these items increases the comparability of period-to-period results. The effective income tax rate excluding the
impact of these items is a non-GAAP measure and may not be comparable to similar non-GAAP measures used by other companies. The table below presents the
calculation of the effective income tax rate excluding the impact of these amounts.
Year Ended December 2010
Pre-tax Provision Effective income
$ in millions earnings for taxes tax rate
As reported $12,892 $4,538 35.2%
Add back:
Impact of the U.K. bank payroll tax 465 —
Impact of the SEC settlement 550 6
As adjusted $13,907 $4,544 32.7%

Segment Operating Results

The table below presents the net revenues, operating expenses and pre-tax earnings of our segments.
Year Ended December

in millions 2011 2010 2009
Investment Banking Net revenues $ 4,355 $ 4,810 $ 4,984
Operating expenses 2,962 3,511 3,482
Pre-tax earnings $ 1,393 $ 1,299 $ 1,502
Institutional Client Services Net revenues $17,280 $21,796 $32,719
Pre-tax earnings $ 4,583 $ 7,505 $19,028
Investing & Lending Net revenues $ 2,142 $ 7,541 $ 2,863
Pre-tax earnings/(loss) $ (531) $ 4,180 $ (660)
Investment Management Net revenues $ 5,034 $ 5,014 $ 4,607
Pre-tax earnings $ 1,016 $ 963 $ 934
Total Net revenues $28,811 $39,161 $45,173
Pre-tax earnings $ 6,169 $12,892 $19,829
Operating expenses in the table above include the following Net revenues in our segments include allocations of interest
expenses that have not been allocated to our segments: income and interest expense to specific securities,
commodities and other positions in relation to the cash
‰ net provisions for a number of litigation and regulatory
generated by, or funding requirements of, such underlying
proceedings of $175 million, $682 million and $104 million
positions. See Note 25 to the consolidated financial
for the years ended December 2011, December 2010 and
statements for further information about our business
December 2009, respectively;
segments.
‰ charitable contributions of $103 million, $345 million
The cost drivers of Goldman Sachs taken as a whole —
and $810 million for the years ended
compensation, headcount and levels of business activity —
December 2011, December 2010 and December 2009,
are broadly similar in each of our business segments.
respectively; and
Compensation and benefits expenses within our segments
‰ real estate-related exit costs of $14 million, $28 million reflect, among other factors, the overall performance of
and $61 million for the years ended Goldman Sachs as well as the performance of individual
December 2011, December 2010 and December 2009, businesses. Consequently, pre-tax margins in one segment
respectively. of our business may be significantly affected by the
performance of our other business segments. A discussion
of segment operating results follows.

Investment Banking
Our Investment Banking segment is comprised of: 2011 versus 2010. Net revenues in Investment Banking
were $4.36 billion for 2011, 9% lower than 2010.
Financial Advisory. Includes advisory assignments with
respect to mergers and acquisitions, divestitures, corporate Net revenues in Financial Advisory were $1.99 billion, 4%
defense activities, risk management, restructurings and lower than 2010. Net revenues in our Underwriting business
spin-offs, and derivative transactions directly related to were $2.37 billion, 14% lower than 2010, reflecting
these client advisory assignments. significantly lower net revenues in equity underwriting,
principally due to a decline in industry-wide activity. Net
Underwriting. Includes public offerings and private
revenues in debt underwriting were essentially unchanged
placements of a wide range of securities, loans and other
compared with 2010.
financial instruments, and derivative transactions directly
related to these client underwriting activities. Investment Banking operated in an environment generally
characterized by significant declines in industry-wide
The table below presents the operating results of our
underwriting and mergers and acquisitions activity levels during
Investment Banking segment.
the second half of 2011. These declines reflected increased
Year Ended December
concerns regarding the weakened state of global economies,
in millions 2011 2010 2009 including heightened European sovereign debt risk, which
Financial Advisory $1,987 $2,062 $1,897 contributed to a significant widening in credit spreads, a sharp
Equity underwriting 1,085 1,462 1,797 increase in volatility levels and a significant decline in global
Debt underwriting 1,283 1,286 1,290 equity markets during the second half of 2011. If these concerns
Total Underwriting 2,368 2,748 3,087 continue or if equity markets decline further, resulting in lower
Total net revenues 4,355 4,810 4,984 levels of client activity, net revenues in Investment Banking
Operating expenses 2,962 3,511 3,482 would likely continue to be negatively impacted.
Pre-tax earnings $1,393 $1,299 $1,502
Our investment banking transaction backlog increased
The table below presents our financial advisory and compared with the end of 2010. The increase compared
underwriting transaction volumes. 1 with the end of 2010 was due to an increase in potential
equity underwriting transactions, primarily reflecting an
Year Ended December increase in client mandates to underwrite initial public
in billions 2011 2010 2009 offerings. Estimated net revenues from potential debt
Announced mergers and acquisitions $638 $494 $543 underwriting transactions decreased slightly compared with
Completed mergers and acquisitions 635 436 593 the end of 2010. Estimated net revenues from potential
Equity and equity-related offerings 2 55 67 84
advisory transactions were essentially unchanged compared
Debt offerings 3 203 234 256
with the end of 2010.
1. Source: Thomson Reuters. Announced and completed mergers and
acquisitions volumes are based on full credit to each of the advisors in a
transaction. Equity and equity-related offerings and debt offerings are based
on full credit for single book managers and equal credit for joint book
managers. Transaction volumes may not be indicative of net revenues in a
given period. In addition, transaction volumes for prior periods may vary from
amounts previously reported due to the subsequent withdrawal or a change
in the value of a transaction.
2. Includes Rule 144A and public common stock offerings, convertible offerings
and rights offerings.
3. Includes non-convertible preferred stock, mortgage-backed securities, asset-
backed securities and taxable municipal debt. Includes publicly registered
and Rule 144A issues. Excludes leveraged loans.

Our investment banking transaction backlog represents an Our investment banking transaction backlog decreased
estimate of our future net revenues from investment compared with the end of 2009. The decrease compared
banking transactions where we believe that future revenue with the end of 2009 reflected a decline in estimated net
realization is more likely than not. We believe changes in revenues from potential debt and equity underwriting
our investment banking transaction backlog may be a transactions, primarily related to client mandates to
useful indicator of client activity levels which, over the long underwrite leveraged finance transactions and common
term, impact our net revenues. However, the timeframe for stock offerings. This decrease was partially offset by an
completion and corresponding revenue recognition of increase in estimated net revenues from potential advisory
transactions in our backlog varies based on the nature of transactions.
the assignment, as certain transactions may remain in our
Operating expenses were $3.51 billion for 2010, essentially
backlog for longer periods of time and others may enter and
unchanged from 2009. Pre-tax earnings were $1.30 billion
leave within the same reporting period. In addition, our
in 2010, 14% lower than 2009.
transaction backlog is subject to certain limitations, such as
assumptions about the likelihood that individual client Institutional Client Services
transactions will occur in the future. Transactions may be Our Institutional Client Services segment is comprised of:
cancelled or modified, and transactions not included in the
Fixed Income, Currency and Commodities Client
estimate may also occur.
Execution. Includes client execution activities related to
Operating expenses were $2.96 billion for 2011, 16% making markets in interest rate products, credit products,
lower than 2010, due to decreased compensation and mortgages, currencies and commodities.
benefits expenses, primarily resulting from lower net
We generate market-making revenues in these activities, in
revenues. Pre-tax earnings were $1.39 billion in 2011, 7%
three ways:
higher than 2010.
‰ In large, highly liquid markets (such as markets for U.S.
2010 versus 2009. Net revenues in Investment Banking
Treasury bills, large capitalization S&P 500 stocks or
were $4.81 billion for 2010, 3% lower than 2009.
certain mortgage pass-through certificates), we execute a
Net revenues in Financial Advisory were $2.06 billion, 9% high volume of transactions for our clients for modest
higher than 2009, primarily reflecting an increase in client spreads and fees.
activity. Net revenues in our Underwriting business were
‰ In less liquid markets (such as mid-cap corporate bonds,
$2.75 billion, 11% lower than 2009, reflecting lower net
growth market currencies and certain non-agency
revenues in equity underwriting, principally due to a decline
mortgage-backed securities), we execute transactions for
in client activity in comparison to 2009, which included
our clients for spreads and fees that are generally
significant capital-raising activity by financial institution
somewhat larger.
clients. Net revenues in debt underwriting were essentially
unchanged compared with 2009. ‰ We also structure and execute transactions involving
customized or tailor-made products that address our
During 2010, Investment Banking operated in an
clients’ risk exposures, investment objectives or other
environment generally characterized by a continuation of
complex needs (such as a jet fuel hedge for an airline).
low levels of industry-wide mergers and acquisitions
activity, reflecting heightened uncertainty regarding the Given the focus on the mortgage market, our mortgage
global economic outlook. Although certain additional activities are further described below.
unfavorable market conditions emerged in the first half of Our activities in mortgages include commercial mortgage-
2010, including lower equity prices and wider corporate related securities, loans and derivatives, residential
credit spreads, interest rates remained low throughout the mortgage-related securities, loans and derivatives
year and underwriting activity improved during the second (including U.S. government agency-issued collateralized
half of the year as global equity prices recovered and mortgage obligations, other prime, subprime and Alt-A
corporate credit spreads narrowed. securities and loans), and other asset-backed securities,
loans and derivatives.

We buy, hold and sell long and short mortgage positions, Net revenues in Equities were $8.26 billion for 2011, 2%
primarily for market making for our clients. Our inventory higher than 2010. During 2011, average volatility levels
therefore changes based on client demands and is generally increased and equity prices in Europe and Asia declined
held for short-term periods. significantly, particularly during the third quarter. The
increase in net revenues reflected higher commissions and
See Notes 18 and 27 to the consolidated financial statements
fees, primarily due to higher transaction volumes,
for information about exposure to mortgage repurchase
particularly during the third quarter of 2011. In addition,
requests, mortgage rescissions and mortgage-related
net revenues in securities services increased compared with
litigation.
2010, reflecting the impact of higher average customer
Equities. Includes client execution activities related to balances. Equities client execution net revenues were lower
making markets in equity products, as well as commissions than 2010, primarily reflecting significantly lower net
and fees from executing and clearing institutional client revenues in shares.
transactions on major stock, options and futures exchanges
The net gain attributable to the impact of changes in our
worldwide. Equities also includes our securities services
own credit spreads on borrowings for which the fair value
business, which provides financing, securities lending and
option was elected was $596 million and $198 million for
other prime brokerage services to institutional clients,
2011 and 2010, respectively.
including hedge funds, mutual funds, pension funds and
foundations, and generates revenues primarily in the form Institutional Client Services operated in an environment
of interest rate spreads or fees, and revenues related to our generally characterized by increased concerns regarding the
insurance activities. weakened state of global economies, including heightened
European sovereign debt risk, and its impact on the
European banking system and global financial institutions.
Institutional Client Services segment.
These conditions also impacted expectations for economic
prospects in the U.S. and were reflected in equity and debt
Year Ended December
in millions 2011 2010 2009
markets more broadly. In addition, the downgrade in credit
ratings of the U.S. government and federal agencies and
Fixed Income, Currency and
Commodities Client Execution $ 9,018 $13,707 $21,883 many financial institutions during the second half of 2011
Equities client execution 3,031 3,231 5,237 contributed to further uncertainty in the markets. These
Commissions and fees 3,633 3,426 3,680 concerns, as well as other broad market concerns, such as
Securities services 1,598 1,432 1,919 uncertainty over financial regulatory reform, continued to
Total Equities 8,262 8,089 10,836 have a negative impact on our net revenues during 2011. If
Total net revenues 17,280 21,796 32,719 these concerns continue, and market-making conditions
Operating expenses 12,697 14,291 13,691 remain challenging, net revenues in Fixed Income, Currency
Pre-tax earnings $ 4,583 $ 7,505 $19,028
and Commodities Client Execution and Equities would
likely continue to be negatively impacted.
2011 versus 2010. Net revenues in Institutional Client
Services were $17.28 billion for 2011, 21% lower than Operating expenses were $12.70 billion for 2011, 11%
2010. lower than 2010, due to decreased compensation and
benefits expenses, primarily resulting from lower net
Net revenues in Fixed Income, Currency and Commodities revenues, the impact of the U.K. bank payroll tax during
Client Execution were $9.02 billion for 2011, 34% lower 2010, as well as an impairment of our NYSE DMM rights
than 2010. Although activity levels during 2011 were of $305 million during 2010. These decreases were partially
generally consistent with 2010 levels, and results were solid offset by higher brokerage, clearing, exchange and
during the first quarter of 2011, the environment during the distribution fees, principally reflecting higher transaction
remainder of 2011 was characterized by broad market volumes in Equities. Pre-tax earnings were $4.58 billion in
concerns and uncertainty, resulting in volatile markets and 2011, 39% lower than 2010.
significantly wider credit spreads, which contributed to
difficult market-making conditions and led to reductions in
risk by us and our clients. As a result of these conditions,
net revenues across the franchise were lower, including
significant declines in mortgages and credit products,
compared with 2010.

2010 versus 2009. Net revenues in Institutional Client European sovereign debt risk and uncertainty regarding
Services were $21.80 billion for 2010, 33% lower than financial regulatory reform, sharply higher equity volatility
2009. levels, lower global equity prices and wider corporate credit
spreads. During the second half of 2010, some of these
Net revenues in Fixed Income, Currency and Commodities
conditions reversed as equity volatility levels decreased,
Client Execution were $13.71 billion for 2010, 37% lower
global equity prices recovered, corporate credit spreads
than a particularly strong 2009. During 2010, Fixed
narrowed and commercial real estate asset prices began to
Income, Currency and Commodities Client Execution
improve. However, lower client activity levels, reflecting
operated in a challenging environment characterized by
broad market concerns, including European sovereign debt
lower client activity levels, which reflected broad market
risk and uncertainty over regulatory reform, continued to
concerns including European sovereign debt risk and
negatively impact our results. In addition, bid/offer spreads
uncertainty over regulatory reform, as well as tighter bid/
remained tight relative to 2009, as financial markets
offer spreads. The decrease in net revenues compared with
continued to stabilize, the availability of funding improved
2009 primarily reflected significantly lower results in
and volatility levels in both corporate credit spreads and
interest rate products, credit products, commodities and, to
commodity prices declined.
a lesser extent, currencies. These decreases were partially
offset by higher net revenues in mortgages, as 2009 Operating expenses were $14.29 billion for 2010, 4%
included approximately $1 billion of losses related to higher than 2009, due to the impact of the U.K. bank
commercial mortgage loans. payroll tax, as well as an impairment of our NYSE DMM
rights of $305 million. These increases were partially offset
Net revenues in Equities were $8.09 billion for 2010, 25%
by lower compensation and benefits expenses, resulting
lower than 2009, primarily reflecting significantly lower net
from lower levels of discretionary compensation. Pre-tax
revenues in equities client execution, principally due to
earnings were $7.51 billion in 2010, 61% lower than 2009.
significantly lower results in derivatives and shares.
Commissions and fees were also lower than 2009, primarily Investing & Lending
reflecting lower client activity levels. In addition, securities Investing & Lending includes our investing activities and the
services net revenues were significantly lower compared origination of loans to provide financing to clients. These
with 2009, primarily reflecting tighter securities lending investments and loans are typically longer-term in nature.
spreads, principally due to the impact of changes in the We make investments, directly and indirectly through funds
composition of customer balances, partially offset by the that we manage, in debt securities, loans, public and private
impact of higher average customer balances. During 2010, equity securities, real estate, consolidated investment entities
although equity markets were volatile during the first half and power generation facilities.
of the year, equity prices generally improved and volatility The table below presents the operating results of our Investing &
levels declined in the second half of the year. Lending segment.
The net gain/(loss) attributable to the impact of changes in our
own credit spreads on borrowings for which the fair value Year Ended December
in millions 2011 2010 2009
option was elected was $198 million and $(1.10) billion for
2010 and 2009, respectively. ICBC $ (517) $ 747 $1,582
Equity securities (excluding ICBC) 1,120 2,692 (596)
Results in Institutional Client Services for 2010 were Debt securities and loans 96 2,597 1,045
negatively impacted by a general decrease in client activity Other 1 1,443 1,505 832
levels from very strong levels seen in 2009. Certain Total net revenues 2,142 7,541 2,863
unfavorable conditions emerged during the second quarter Operating expenses 2,673 3,361 3,523
of 2010 that made the environment more challenging for Pre-tax earnings/(loss) $ (531) $4,180 $ (660)
our businesses, resulting in lower client activity levels. 1. Primarily includes net revenues related to our consolidated entities held for
These conditions included broad market concerns, such as investment purposes.

2011 versus 2010. Net revenues in Investing & Lending Results for 2009 included a gain of $1.58 billion from our
were $2.14 billion and $7.54 billion for 2011 and 2010, investment in the ordinary shares of ICBC, a net gain of
respectively. During 2011, Investing & Lending results $1.05 billion from debt securities and loans, and other net
reflected an operating environment characterized by a revenues of $832 million, principally related to our
significant decline in equity markets in Europe and Asia, consolidated entities held for investment purposes, partially
and unfavorable credit markets that were negatively offset by a net loss of $596 million from other investments in
impacted by increased concerns regarding the weakened equities. During 2009, continued weakness in commercial
state of global economies, including heightened European real estate markets negatively impacted our results.
sovereign debt risk. Results for 2011 included a loss of
$517 million from our investment in the ordinary shares of Operating expenses were $3.36 billion for 2010, 5% lower
ICBC and net gains of $1.12 billion from other investments than 2009, due to the impact of significantly higher real estate
in equities, primarily in private equity positions, partially impairment charges during 2009 related to consolidated
offset by losses from public equities. In addition, entities held for investment purposes, as well as decreased
Investing & Lending included net revenues of $96 million compensation and benefits expenses, resulting from lower
from debt securities and loans. This amount includes levels of discretionary compensation. Pre-tax earnings were
approximately $1 billion of unrealized losses related to $4.18 billion in 2010, compared with a pre-tax loss of
relationship lending activities, including the effect of $660 million for 2009.
hedges, offset by net interest income and net gains from Investment Management
other debt securities and loans. Results for 2011 also Investment Management provides investment management
included other net revenues of $1.44 billion, principally services and offers investment products (primarily through
separately managed accounts and commingled vehicles, such
purposes. If equity markets decline further and credit
as mutual funds and private investment funds) across all major
spreads widen further, net revenues in Investing & Lending
asset classes to a diverse set of institutional and individual
would likely continue to be negatively impacted.
clients. Investment Management also offers wealth advisory
Operating expenses were $2.67 billion for 2011, 20% lower services, including portfolio management and financial
than 2010, due to decreased compensation and benefits counseling, and brokerage and other transaction services to
expenses, primarily resulting from lower net revenues. This high-net-worth individuals and families.
decrease was partially offset by the impact of impairment
Assets under management typically generate fees as a
charges related to consolidated investments during 2011.
percentage of net asset value, which vary by asset class and
Pre-tax loss was $531 million in 2011, compared with
are affected by investment performance as well as asset
pre-tax earnings of $4.18 billion in 2010.
inflows and redemptions. In certain circumstances, we are
2010 versus 2009. Net revenues in Investing & Lending also entitled to receive incentive fees based on a percentage
were $7.54 billion and $2.86 billion for 2010 and 2009, of a fund’s return or when the return exceeds a specified
respectively. Results for 2010 included a gain of benchmark or other performance targets. Incentive fees are
$747 million from our investment in the ordinary shares of recognized when all material contingencies are resolved.
ICBC, a net gain of $2.69 billion from other investments in
equities, a net gain of $2.60 billion from debt securities and
loans and other net revenues of $1.51 billion, principally
purposes. The net gain from other investments in equities
was primarily driven by an increase in global equity
markets, which resulted in appreciation of both our public
and private equity positions and provided favorable
conditions for initial public offerings. The net gains and net
interest from debt securities and loans primarily reflected
the impact of tighter credit spreads and favorable credit
markets during the year, which provided favorable
conditions for borrowers to refinance.

Year Ended December 31,

in billions 2011 2010 2009
Investment Management segment.
Balance, beginning of year $840 $871 $798
Net inflows/(outflows)
Year Ended December Alternative investments (5) (1) (5)
in millions 2011 2010 2009 Equity (9) (21) (2)
Management and other fees $4,188 $3,956 $3,860 Fixed income (15) 7 26
Incentive fees 323 527 180 Total non-money market net inflows/
Transaction revenues 523 531 567 (outflows) (29) (15) 19
Total net revenues 5,034 5,014 4,607 Money markets 12 (56) (22)
Operating expenses 4,018 4,051 3,673 Total net inflows/(outflows) (17) 1 (71) (3)
Pre-tax earnings $1,016 $ 963 $ 934 Net market appreciation/(depreciation) 5 40 76
Balance, end of year $828 $840 $871
Assets under management include only client assets where we
1. Includes $6 billion of asset inflows in connection with our acquisitions of
earn a fee for managing assets on a discretionary basis. This Goldman Sachs Australia Pty Ltd (GS Australia), formerly Goldman Sachs &
includes net assets in our mutual funds, hedge funds and Partners Australia Group Holdings Pty Ltd, and Benchmark Asset
private equity funds (including real estate funds), and Management Company Private Limited.
separately managed accounts for institutional and individual 2011 versus 2010. Net revenues in Investment
investors. Assets under management do not include the self- Management were $5.03 billion for 2011, essentially
directed assets of our clients, including brokerage accounts, or unchanged compared with 2010, primarily due to higher
interest-bearing deposits held through our bank depository management and other fees, reflecting favorable changes in
institution subsidiaries. the mix of assets under management, offset by lower
The tables below present our assets under management by incentive fees. During the year, assets under management
asset class and a summary of the changes in our assets under decreased $12 billion to $828 billion, reflecting net
management. outflows of $17 billion, partially offset by net market
appreciation of $5 billion. Net outflows primarily reflected
As of December 31, outflows in fixed income and equity assets, partially offset
in billions 2011 2010 2009 by inflows in money market assets.
Alternative investments 1 $142 $148 $146 During the first half of 2011, Investment Management
Equity 126 144 146
operated in an environment generally characterized by
Fixed income 340 340 315
improved asset prices and a shift in investor assets away
Total non-money market assets 608 632 607
Money markets 220 208 264
from money markets in favor of asset classes with
Total assets under management $828 $840 $871 potentially higher risk and returns. However, during the
second half of 2011, asset prices declined, particularly in
1. Primarily includes hedge funds, private equity, real estate, currencies,
equities, in part driven by increased uncertainty regarding
commodities and asset allocation strategies.
the global economic outlook. Declining asset prices and
economic uncertainty contributed to investors shifting
assets away from asset classes with potentially higher risk
and returns to asset classes with lower risk and returns. If
asset prices continue to decline or investors continue to
favor lower risk asset classes or withdraw their assets, net
revenues in Investment Management would likely continue
to be negatively impacted.
Operating expenses were $4.02 billion for 2011, essentially
unchanged compared with 2010. Pre-tax earnings were
$1.02 billion in 2011, 6% higher than 2010.

2010 versus 2009. Net revenues in Investment Management Regulatory Developments

were $5.01 billion for 2010, 9% higher than 2009, primarily The U.S. Dodd-Frank Wall Street Reform and Consumer
reflecting higher incentive fees across our alternative Protection Act (Dodd-Frank Act), enacted in July 2010,
investment products. Management and other fees also significantly altered the financial regulatory regime within
increased, reflecting favorable changes in the mix of assets which we operate. The implications of the Dodd-Frank Act
under management, as well as the impact of appreciation in for our businesses will depend to a large extent on the rules
the value of client assets. During 2010, assets under
that will be adopted by the Board of Governors of the
management decreased 4% to $840 billion, primarily
Federal Reserve System (Federal Reserve Board), the
reflecting outflows in money market assets, consistent with
industry trends. Federal Deposit Insurance Corporation (FDIC), the SEC,
the U.S. Commodity Futures Trading Commission (CFTC)
During 2010, Investment Management operated in an and other agencies to implement the legislation, as well as
environment generally characterized by a continuation of the development of market practices and structures under
industry trends that emerged during 2009, as financial markets the regime established by the legislation and the
began to stabilize, asset prices improved and investors began to implementing rules. Similar reforms are being considered
shift assets away from money markets in favor of asset classes by other regulators and policy makers worldwide and these
with potentially higher risk and returns. This trend resulted in reforms may affect our businesses. We expect that the
favorable changes in the mix of assets under management, as principal areas of impact from regulatory reform for us will
well as appreciation in the value of client assets. be:
Operating expenses were $4.05 billion for 2010, 10% ‰ the Dodd-Frank prohibition on “proprietary trading”
higher than 2009, primarily reflecting increased staff levels and the limitation on the sponsorship of, and investment
and the impact of growth initiatives. Pre-tax earnings were in, hedge funds and private equity funds by banking
$963 million in 2010, 3% higher than 2009. entities, including bank holding companies, referred to
Geographic Data as the “Volcker Rule”;
See Note 25 to the consolidated financial statements for a ‰ increased regulation of and restrictions on over-the-counter
summary of our total net revenues, pre-tax earnings and net (OTC) derivatives markets and transactions; and
earnings by geographic region.
‰ increased regulatory capital requirements.

In October 2011, the proposed rules to implement the As required by the Dodd-Frank Act, the Federal Reserve Board
Volcker Rule were issued and included an extensive request and FDIC have jointly issued a rule requiring each bank
for comments on the proposal. The proposed rules are holding company with over $50 billion in assets and each
highly complex and many aspects of the Volcker Rule designated systemically important financial institution to
remain unclear. The full impact of the rule will depend provide to regulators an annual plan for its rapid and orderly
upon the detailed scope of the prohibitions, permitted resolution in the event of material financial distress or failure
activities, exceptions and exclusions, and the full impact on (resolution plan). Our resolution plan must, among other
the firm will not be known with certainty until the rules are things, ensure that Goldman Sachs Bank USA (GS Bank USA)
finalized. is adequately protected from risks arising from our other
entities. The regulators’ joint rule sets specific standards for the
While many aspects of the Volcker Rule remain unclear, we
resolution plans, including requiring a detailed resolution
evaluated the prohibition on “proprietary trading” and
strategy and analyses of the company’s material entities,
determined that businesses that engage in “bright line”
organizational structure, interconnections and
proprietary trading are most likely to be prohibited. In
interdependencies, and management information systems,
2011 and 2010, we liquidated substantially all of our
among other elements. We have commenced work on our first
Principal Strategies and global macro proprietary trading
resolution plan, which we must submit to the regulators by
positions.
July 1, 2012. GS Bank USA is also required by the FDIC to
In addition, we evaluated the limitations on sponsorship of, submit a plan for its rapid and orderly resolution in the event
and investments in, hedge funds and private equity funds. of material financial distress or failure by July 1, 2012.
The firm earns management fees and incentive fees for
In September 2011, the SEC proposed rules to implement the
investment management services from private equity and
Dodd-Frank Act’s prohibition against securitization
hedge funds, which are included in our Investment
participants’ engaging in any transaction that would involve or
Management segment. The firm also makes investments in
result in any material conflict of interest with an investor in a
funds and the gains and losses from such investments are
securitization transaction. The proposed rules would except
included in our Investing & Lending segment; these gains
bona fide market-making activities and risk-mitigating
and losses will be impacted by the Volcker Rule. The Volcker
hedging activities in connection with securitization activities
Rule limitation on investments in hedge funds and private
from the general prohibition.
equity funds requires the firm to reduce its investment in each
private equity and hedge fund to 3% or less of net asset In December 2011, the Federal Reserve Board proposed
value, and to reduce the firm’s aggregate investment in all regulations designed to strengthen the regulation and
such funds to 3% or less of the firm’s Tier 1 capital. Over the supervision of large bank holding companies and systemically
period from 1999 through 2011, the firm’s aggregate net important nonbank financial firms. These proposals address
revenues from its investments in hedge funds and private risk-based capital and leverage requirements, liquidity
equity funds were not material to the firm’s aggregate total requirements, stress tests, single counterparty limits and early
net revenues over the same period. We continue to manage remediation requirements that are designed to address
our existing private equity funds taking into account the financial weakness at an early stage. Although many of the
transition periods under the Volcker Rule. With respect to proposals mirror initiatives to which bank holding companies
our hedge funds, we currently plan to comply with the are already subject, their full impact on the firm will not be
Volcker Rule by redeeming certain of our interests in the known with certainty until the rules are finalized.
funds. We currently expect to redeem up to approximately
10% of certain hedge funds’ total redeemable units per
quarter over ten consecutive quarters, beginning March 2012
and ending June 2014. In addition, we have limited the firm’s
initial investment to 3% for certain new funds.

In addition, the U.S. federal bank regulatory agencies issued In order to ensure appropriate risk management, we seek to
revised proposals to modify their market risk regulatory maintain a liquid balance sheet and have processes in place to
capital requirements for banking organizations in the United dynamically manage our assets and liabilities which include:
States that have significant trading activities. The ‰ quarterly planning;
modifications are designed to address the adjustments to the
market risk framework that were announced by the Basel ‰ business-specific limits;
Committee in June 2010 (Basel 2.5), as well as the ‰ monitoring of key metrics; and
prohibition on the use of credit ratings, as required by the
Dodd-Frank Act. We expect the federal banking agencies to ‰ scenario analyses.
propose further modifications to their capital adequacy Quarterly Planning. We prepare a quarterly balance sheet
regulations to address both Basel 3 and other aspects of the plan that combines our projected total assets and composition
Dodd-Frank Act, including requirements for global of assets with our expected funding sources and capital levels
systemically important banks. Once implemented, it is likely for the upcoming quarter. The objectives of this quarterly
that these changes will result in increased capital planning process are:
requirements, although their full impact will not be known
until the U.S. federal bank regulatory agencies publish their ‰ to develop our near-term balance sheet projections, taking
final rules. into account the general state of the financial markets and
expected client-driven and firm-driven activity levels;
The Dodd-Frank Act also establishes a Bureau of Consumer
Financial Protection having broad authority to regulate ‰ to ensure that our projected assets are supported by an
adequate amount and tenor of funding and that our
providers of credit, payment and other consumer financial
projected capital and liquidity metrics are within
products and services, and this Bureau has oversight over
management guidelines; and
certain of our products and services.
‰ to allow business risk managers and managers from our
See “Business—Regulation” in Part I, Item 1 of our
independent control and support functions to objectively
Annual Report on Form 10-K for more information.
evaluate balance sheet limit requests from business
managers in the context of the firm’s overall balance sheet
constraints. These constraints include the firm’s liability
Balance Sheet and Funding Sources profile and equity capital levels, maturities and plans for
Balance Sheet Management new debt and equity issuances, share repurchases, deposit
One of our most important risk management disciplines is trends and secured funding transactions.
our ability to manage the size and composition of our To prepare our quarterly balance sheet plan, business risk
balance sheet. While our asset base changes due to client managers and managers from our independent control and
activity, market fluctuations and business opportunities, the support functions meet with business managers to review
size and composition of our balance sheet reflect (i) our current and prior period metrics and discuss expectations
overall risk tolerance, (ii) our ability to access stable funding for the upcoming quarter. The specific metrics reviewed
sources and (iii) the amount of equity capital we hold.
include asset and liability size and composition, aged
Although our balance sheet fluctuates on a day-to-day inventory, limit utilization, risk and performance measures,
basis, our total assets and adjusted assets at quarterly and and capital usage.
year-end dates are generally not materially different from
Our consolidated quarterly plan, including our balance
those occurring within our reporting periods.
sheet plans by business, funding and capital projections,
and projected capital and liquidity metrics, is reviewed by
the Finance Committee. See “Overview and Structure of
Risk Management.”

Business-Specific Limits. The Finance Committee sets Balance Sheet Allocation

asset and liability limits for each business and aged In addition to preparing our consolidated statement of
inventory limits for certain financial instruments as a financial condition in accordance with U.S. GAAP, we
disincentive to hold inventory over longer periods of time. prepare a balance sheet that generally allocates assets to our
These limits are set at levels which are close to actual businesses, which is a non-GAAP presentation and may not
operating levels in order to ensure prompt escalation and be comparable to similar non-GAAP presentations used by
discussion among business managers and managers in our other companies. We believe that presenting our assets on
independent control and support functions on a routine this basis is meaningful because it is consistent with the way
basis. The Finance Committee reviews and approves management views and manages risks associated with the
balance sheet limits on a quarterly basis and may also firm’s assets and better enables investors to assess the
approve changes in limits on an ad hoc basis in response to liquidity of the firm’s assets. The table below presents a
changing business needs or market conditions. summary of this balance sheet allocation.
Monitoring of Key Metrics. We monitor key balance
As of December
sheet metrics daily both by business and on a consolidated in millions 2011 2010
basis, including asset and liability size and composition,
Excess liquidity (Global Core Excess) $171,581 $174,776
aged inventory, limit utilization, risk measures and capital Other cash 7,888 7,565
usage. We allocate assets to businesses and review and Excess liquidity and cash 179,469 182,341
analyze movements resulting from new business activity as Secured client financing 283,707 279,291
well as market fluctuations. Inventory 273,640 260,406
Secured financing agreements 71,103 70,921
Scenario Analyses. We conduct scenario analyses to Receivables 35,769 32,396
determine how we would manage the size and composition Institutional Client Services 380,512 363,723
of our balance sheet and maintain appropriate funding, ICBC 4,713 7,589
liquidity and capital positions in a variety of situations: Equity (excluding ICBC) 23,041 22,972
Debt 23,311 24,066
‰ These scenarios cover short-term and long-term time Receivables and other 5,320 3,291
horizons using various macro-economic and firm-specific Investing & Lending 56,385 57,918
assumptions. We use these analyses to assist us in Total inventory and related assets 436,897 421,641
developing longer-term funding plans, including the level Other assets 23,152 28,059
of unsecured debt issuances, the size of our secured Total assets $923,225 $911,332
funding program and the amount and composition of our
equity capital. We also consider any potential future
constraints, such as limits on our ability to grow our asset
base in the absence of appropriate funding.
‰ Through our Internal Capital Adequacy Assessment
Process (ICAAP) and our resolution and recovery
planning, we further analyze how we would manage our
balance sheet through the duration of a severe crisis and
we develop plans to access funding, generate liquidity,
and/or redeploy equity capital, as appropriate.

The following is a description of the captions in the table Institutional Client Services. In Institutional Client Services,
above. we maintain inventory positions to facilitate market-making in
fixed income, equity, currency and commodity products.
Excess Liquidity and Cash. We maintain substantial
Additionally, as part of client market-making activities, we
excess liquidity to meet a broad range of potential cash
enter into resale or securities borrowing arrangements to
outflows and collateral needs in the event of a stressed
obtain securities which we can use to cover transactions in
environment. See “Liquidity Risk Management” below for
which we or our clients have sold securities that have not yet
details on the composition and sizing of our excess liquidity
been purchased. The receivables in Institutional Client Services
pool or “Global Core Excess” (GCE). In addition to our
primarily relate to securities transactions.
excess liquidity, we maintain other operating cash balances,
primarily for use in specific currencies, entities, or Investing & Lending. In Investing & Lending, we make
jurisdictions where we do not have immediate access to investments and originate loans to provide financing to clients.
parent company liquidity. These investments and loans are typically longer-term in
nature. We make investments, directly and indirectly through
Secured Client Financing. We provide collateralized
funds that we manage, in debt securities, loans, public and
financing for client positions, including margin loans secured
private equity securities, real estate and other investments.
by client collateral, securities borrowed, and resale agreements
primarily collateralized by government obligations. As a result Other Assets. Other assets are generally less liquid, non-financial
of client activities, we are required to segregate cash and assets, including property, leasehold improvements and
securities to satisfy regulatory requirements. Our secured client equipment, goodwill and identifiable intangible assets, income
financing arrangements, which are generally short-term, are tax-related receivables, equity-method investments and
accounted for at fair value or at amounts that approximate fair miscellaneous receivables.
value, and include daily margin requirements to mitigate
counterparty credit risk.

The tables below present the reconciliation of this balance business segment disclosed in Note 25 to the consolidated
sheet allocation to our U.S. GAAP balance sheet. In the financial statements because total assets disclosed in
tables below, total assets for Institutional Client Services Note 25 include allocations of our excess liquidity and cash,
and Investing & Lending represent the inventory and secured client financing and other assets.
related assets. These amounts differ from total assets by
As of December 2011
Excess Secured Institutional
Liquidity Client Client Investing & Other Total
in millions and Cash 1 Financing Services Lending Assets Assets
Cash and cash equivalents $ 56,008 $ — $ — $ — $ — $ 56,008
Cash and securities segregated for regulatory and other
purposes — 64,264 — — — 64,264
Securities purchased under agreements to resell and federal
funds sold 70,220 98,445 18,671 453 — 187,789
Securities borrowed 14,919 85,990 52,432 — — 153,341
Receivables from brokers, dealers and clearing organizations — 3,252 10,612 340 — 14,204
Receivables from customers and counterparties — 31,756 25,157 3,348 — 60,261
Financial instruments owned, at fair value 38,322 — 273,640 52,244 — 364,206
Other assets — — — — 23,152 23,152
Total assets $179,469 $283,707 $380,512 $56,385 $23,152 $923,225
As of December 2010
Excess Secured Institutional
Liquidity Client Client Investing & Other Total
in millions and Cash 1 Financing Services Lending Assets Assets
Cash and cash equivalents $ 39,788 $ — $ — $ — $ — $ 39,788
Cash and securities segregated for regulatory and other
purposes — 53,731 — — — 53,731
Securities purchased under agreements to resell and federal
funds sold 62,854 102,537 22,866 98 — 188,355
Securities borrowed 37,938 80,313 48,055 — — 166,306
Receivables from brokers, dealers and clearing organizations — 3,702 6,698 37 — 10,437
Receivables from customers and counterparties — 39,008 25,698 2,997 — 67,703
Financial instruments owned, at fair value 41,761 — 260,406 54,786 — 356,953
Other assets — — — — 28,059 28,059
Total assets $182,341 $279,291 $363,723 $57,918 $28,059 $911,332
1. Includes unencumbered cash, U.S. government and federal agency obligations (including highly liquid U.S. federal agency mortgage-backed obligations), and
German, French, Japanese and United Kingdom government obligations.

Less Liquid Inventory Composition Balance Sheet Analysis and Metrics

We seek to maintain a liquid balance sheet comprised of As of December 2011, total assets on our consolidated
assets that can be readily sold or funded on a secured basis. statement of financial condition were $923.23 billion, an
However, we do hold certain financial instruments that increase of $11.89 billion from December 2010. This
may be more difficult to sell, or fund on a secured basis, increase was primarily due to (i) an increase in cash and
especially during times of market stress. We focus on cash equivalents of $16.22 billion, primarily due to
funding these assets with liabilities that have longer-term increases in interest-bearing deposits with banks, (ii) an
contractual maturities to reduce the need to refinance in increase in cash and securities segregated for regulatory and
periods of market stress. The table below presents our other purposes of $10.53 billion, primarily due to an
aggregate holdings in these categories of financial increase in reserve balances held by broker-dealer
instruments. subsidiaries related to client activity, and (iii) an increase in
financial instruments owned, at fair value of $7.25 billion,
As of December primarily due to increases in non-U.S. government
in millions 2011 2010 obligations and derivatives, partially offset by a decrease in
Bank loans and bridge loans 1 $19,745 $18,039 commodities. These increases were partially offset by
Private equity investments and restricted decreases in (i) collateralized agreements of $13.53 billion,
public equity securities 2 15,463 14,923 primarily due to decreases in client and firm activity, and
Mortgage and other asset-backed loans (ii) receivables from customers and counterparties of
and securities 14,291 17,042
$7.44 billion, primarily due to decreases in client activity in
High-yield and other debt obligations 11,118 11,553
secured client financing.
ICBC ordinary shares 3 4,713 7,589
Emerging market debt securities 4,624 3,931 As of December 2011, total liabilities on our consolidated
Emerging market equity securities 3,922 5,784 statement of financial condition were $852.85 billion, an
Other investments in funds 4 3,394 3,212 increase of $18.87 billion from December 2010. This
1. Includes funded commitments and inventory held in connection with our
increase was primarily due to (i) an increase in deposits of
origination, investing and market-making activities. $7.54 billion, primarily due to increases in client activity
2. Includes interests in funds that we manage. Such amounts exclude assets and (ii) an increase in payables to customers and
for which the firm does not bear economic exposure of $2.38 billion and counterparties of $7.36 billion, primarily due to increases
$1.68 billion as of December 2011 and December 2010, respectively,
including assets related to consolidated investment funds and consolidated
in client activity.
variable interest entities (VIEs).
As of December 2011, our total securities sold under
3. Includes interests of $2.60 billion and $4.73 billion as of December 2011 and
December 2010, respectively, held by investment funds managed by
agreements to repurchase, accounted for as collateralized
Goldman Sachs. The decrease was primarily related to the sale of a portion financings, were $164.50 billion, which was 7% higher and
of the ordinary shares of ICBC held by investment funds managed by 3% higher than the daily average amount of repurchase
Goldman Sachs.
agreements during the quarter ended and year ended
4. Includes interests in other investment funds that we manage. See “Results
of Operations — Regulatory Developments” for information about our plans
December 2011, respectively. As of December 2011, the
to redeem certain of our interests in hedge funds to comply with the Volcker increase in our repurchase agreements relative to the daily
Rule. average during the quarter and year was primarily due to
See Notes 4 through 6 to the consolidated financial increases in client activity at the end of the year. As of
statements for further information about the financial December 2010, our total securities sold under agreements
instruments we hold. to repurchase, accounted for as collateralized financings,
were $162.35 billion, which was 2% higher and 10%
higher than the daily average amount of repurchase
agreements during the quarter ended and year ended
December 2010, respectively. As of December 2010, the
increase in our repurchase agreements relative to the daily
average during the quarter and year was due to an increase
in client activity at the end of the year and an increase in
firm financing activities. The level of our repurchase
agreements fluctuates between and within periods,
primarily due to providing clients with access to highly
liquid collateral, such as U.S. government, federal agency
and investment-grade sovereign obligations through
collateralized financing activities.

The table below presents information on our assets, Adjusted leverage ratio. The adjusted leverage ratio
unsecured long-term borrowings, shareholders’ equity and equals adjusted assets divided by total shareholders’ equity.
leverage ratios. We believe that the adjusted leverage ratio is a more
meaningful measure of our capital adequacy than the
As of December leverage ratio because it excludes certain low-risk
$ in millions 2011 2010 collateralized assets that are generally supported with little
Total assets $923,225 $911,332 or no capital. The adjusted leverage ratio is a non-GAAP
Adjusted assets $604,391 $588,927 measure and may not be comparable to similar non-GAAP
Unsecured long-term borrowings $173,545 $174,399 measures used by other companies.
Total shareholders’ equity $ 70,379 $ 77,356
Our adjusted leverage ratio increased to 8.6x as of
Leverage ratio 13.1x 11.8x
Adjusted leverage ratio 8.6x 7.6x
December 2011 from 7.6x as of December 2010 as our
Debt to equity ratio 2.5x 2.3x adjusted assets increased and our total shareholders’ equity
decreased, primarily reflecting the redemption of the firm’s
Adjusted assets. Adjusted assets equals total assets less Series G Preferred Stock and the repurchase of 47.0 million
(i) low-risk collateralized assets generally associated with shares of our common stock.
our secured client financing transactions, federal funds sold
Debt to equity ratio. The debt to equity ratio equals unsecured
and excess liquidity (which includes financial instruments
long-term borrowings divided by total shareholders’ equity.
sold, but not yet purchased, at fair value, less derivative
liabilities) and (ii) cash and securities we segregate for Funding Sources
regulatory and other purposes. Adjusted assets is a Our primary sources of funding are secured financings,
non-GAAP measure and may not be comparable to similar unsecured long-term and short-term borrowings, and
non-GAAP measures used by other companies. deposits. We seek to maintain broad and diversified
funding sources globally.
The table below presents the reconciliation of total assets to
adjusted assets. We raise funding through a number of different products,
including:
As of December
‰ collateralized financings, such as repurchase agreements,
in millions 2011 2010
securities loaned and other secured financings;
Total assets $ 923,225 $ 911,332
Deduct: Securities borrowed (153,341) (166,306) ‰ long-term unsecured debt through syndicated U.S.
Securities purchased under registered offerings, U.S. registered and 144A medium-
agreements to resell and term note programs, offshore medium-term note
federal funds sold (187,789) (188,355)
offerings and other debt offerings;
Add: Financial instruments sold, but
not yet purchased, at fair value 145,013 140,717 ‰ demand and savings deposits through cash sweep
Less derivative liabilities (58,453) (54,730) programs and time deposits through internal and third-
Subtotal (254,570) (268,674) party broker networks; and
Deduct: Cash and securities segregated
for regulatory and other ‰ short-term unsecured debt through U.S. and non-U.S.
purposes (64,264) (53,731) commercial paper and promissory note issuances and
Adjusted assets $ 604,391 $ 588,927 other methods.
Leverage ratio. The leverage ratio equals total assets
divided by total shareholders’ equity and measures the
proportion of equity and debt the firm is using to finance
assets. This ratio is different from the Tier 1 leverage ratio
included in “Equity Capital — Consolidated Regulatory
Capital Ratios” below, and further described in Note 20 to
the consolidated financial statements.

We generally distribute our funding products through our our GCE for refinancing risk associated with our secured
own sales force to a large, diverse creditor base in a variety funding transactions. We seek longer terms for secured
of markets in the Americas, Europe and Asia. We believe funding collateralized by lower-quality assets because these
that our relationships with our creditors are critical to our funding transactions may pose greater refinancing risk.
liquidity. Our creditors include banks, governments,
The weighted average maturity of our secured funding,
securities lenders, pension funds, insurance companies,
excluding funding collateralized by highly liquid securities
mutual funds and individuals. We have imposed various
eligible for inclusion in our GCE, exceeded 100 days as of
internal guidelines to monitor creditor concentration across
December 2011.
our funding programs.
A majority of our secured funding for securities not eligible
Secured Funding. We fund a significant amount of our
for inclusion in the GCE is executed through term
inventory on a secured basis. Secured funding is less
repurchase agreements and securities lending contracts. We
sensitive to changes in our credit quality than unsecured
also raise financing through other types of collateralized
funding due to the nature of the collateral we post to our
financings, such as secured loans and notes.
lenders. However, because the terms or availability of
secured funding, particularly short-dated funding, can
Unsecured Long-Term Borrowings. We issue unsecured
deteriorate rapidly in a difficult environment, we generally
long-term borrowings as a source of funding for inventory
do not rely on short-dated secured funding unless it is
and other assets and to finance a portion of our GCE. We
collateralized with highly liquid securities such as
issue in different tenors, currencies, and products to
government obligations.
maximize the diversification of our investor base. The table
Substantially all of our other secured funding is executed below presents our quarterly unsecured long-term
for tenors of one month or greater. Additionally, we borrowings maturity profile through 2017 as of
monitor counterparty concentration and hold a portion of December 2011.
Unsecured Long-Term Borrowings Maturity Profile

$ in millions
15,000
14,000
13,000
12,000
11,000
10,000
9,000
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
13
13
14
14
15
15
16
16
17
17
13
14
15
16
17
13
14
15
16
17
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
ar
ar
ar
ar
ar
n
p
p
ec
ec
ec
ec
ec
Ju
Ju
Ju
Ju
Ju
Se
Se
Se
Se
Se
M
M
D
Quarters Ended

The weighted average maturity of our unsecured long-term Equity Capital

borrowings as of December 2011 was approximately eight
Capital adequacy is of critical importance to us. Our
years. To mitigate refinancing risk, we seek to limit the
principal objective is to be conservatively capitalized in
principal amount of debt maturing on any one day or
terms of the amount and composition of our equity base.
during any week or year. We enter into interest rate swaps
Accordingly, we have in place a comprehensive capital
to convert a substantial portion of our long-term
management policy that serves as a guide to determine the
borrowings into floating-rate obligations in order to
amount and composition of equity capital we maintain.
manage our exposure to interest rates. See Note 16 to the
consolidated financial statements for further information The level and composition of our equity capital are
about our unsecured long-term borrowings. determined by multiple factors including our consolidated
regulatory capital requirements and ICAAP, and may also
Temporary Liquidity Guarantee Program (TLGP). As of
be influenced by other factors such as rating agency
December 2011, we had $8.53 billion of senior unsecured short-
guidelines, subsidiary capital requirements, the business
term debt outstanding guaranteed by the FDIC under the
environment, conditions in the financial markets and
TLGP, all of which will mature on or prior to June 15, 2012.
assessments of potential future losses due to adverse
We have not issued long-term debt under the TLGP since
changes in our business and market environments. In
March 2009 and the program has expired for new issuances.
addition, we maintain a capital plan which projects sources
Deposits. As of December 2011, our bank depository and uses of capital given a range of business environments,
institution subsidiaries had $46.11 billion in customer and a contingency capital plan which provides a framework
deposits, including $13.27 billion of certificates of deposit for analyzing and responding to an actual or perceived
and other time deposits with a weighted average maturity capital shortfall.
of three years, and $32.84 billion of other deposits,
Effective December 2011, as part of the Federal Reserve
substantially all of which were from cash sweep programs.
Board’s annual Comprehensive Capital Analysis and
We utilize deposits to finance lending activities in our bank
Review, U.S. bank holding companies with total
subsidiaries and to support potential outflows, such as
consolidated assets of $50 billion or greater, are required to
draws on unfunded commitments.
submit annual capital plans for review by the Federal
Unsecured Short-Term Borrowings. A significant Reserve Board. The capital plans should demonstrate the
portion of our short-term borrowings were originally long- ability of a bank holding company to maintain its capital
term debt that is scheduled to mature within one year of the ratios above minimum regulatory capital requirements and
reporting date. We use short-term borrowings to finance above a Tier 1 common ratio of 5% on a pro forma basis
liquid assets and for other cash management purposes. We under expected and stressed scenarios. The purpose of the
primarily issue commercial paper, promissory notes, and Federal Reserve Board’s review is to ensure that these
other hybrid instruments. institutions have robust, forward-looking capital planning
processes that account for their unique risks and that
As of December 2011, our unsecured short-term
permit continued operations during times of economic and
borrowings, including the current portion of unsecured
financial stress. As part of the capital plan review, the
long-term borrowings, were $49.04 billion. See Note 15 to
Federal Reserve Board evaluates an institution’s plan to
the consolidated financial statements for further
make capital distributions, such as increasing dividend
information about our unsecured short-term borrowings.
payments or repurchasing or redeeming stock, across a
GS Bank USA has access to funding through the Federal range of macro-economic and firm-specific assumptions.
Reserve Bank discount window. While we do not rely on The Federal Reserve Board began the annual capital plan
this funding in our liquidity planning and stress testing, reviews in early 2012.
we maintain policies and procedures necessary to access
this funding and test discount window borrowing Our consolidated regulatory capital requirements are
procedures. determined by the Federal Reserve Board, as described
below. Our ICAAP incorporates an internal risk-based
capital assessment designed to identify and measure
material risks associated with our business activities,
including market risk, credit risk and operational risk, in a
manner that is closely aligned with our risk management
practices. Our internal risk-based capital assessment is
supplemented with the results of stress tests.

As of December 2011, our total shareholders’ equity was Consolidated Regulatory Capital Ratios
$70.38 billion (consisting of common shareholders’ equity The table below presents information about our
of $67.28 billion and preferred stock of $3.10 billion). As regulatory capital ratios.
of December 2010, our total shareholders’ equity was
$77.36 billion (consisting of common shareholders’ equity As of December
of $70.40 billion and preferred stock of $6.96 billion). In $ in millions 2011 2010
addition, our $5.00 billion of junior subordinated debt Common shareholders’ equity $ 67,279 $ 70,399
issued to trusts qualifies as equity capital for regulatory and Less: Goodwill (3,802) (3,495)
certain rating agency purposes. See “— Consolidated Less: Disallowable intangible assets (1,666) (2,027)
Less: Other deductions 1 (6,649) (5,601)
Regulatory Capital Ratios” below for information
Tier 1 Common Capital 55,162 59,276
regarding the impact of regulatory developments.
Preferred stock 3,100 6,957
Consolidated Regulatory Capital Junior subordinated debt issued to trusts 5,000 5,000
The Federal Reserve Board is the primary regulator of Tier 1 Capital 63,262 71,233
Group Inc., a bank holding company and a financial Qualifying subordinated debt 2 13,828 13,880
holding company under the U.S. Bank Holding Company Other adjustments 53 (220)
Act of 1956. As a bank holding company, we are subject to Tier 2 Capital 13,881 13,660
consolidated regulatory capital requirements that are Total Capital $ 77,143 $ 84,893
computed in accordance with the Federal Reserve Risk-Weighted Assets 3 $457,027 $444,290
Board’s capital adequacy regulations currently applicable to Tier 1 Capital Ratio 13.8% 16.0%
bank holding companies (which are based on the ‘Basel 1’ Total Capital Ratio 16.9% 19.1%
Tier 1 Leverage Ratio 3 7.0% 8.0%
Capital Accord of the Basel Committee on Banking
Tier 1 Common Ratio 4 12.1% 13.3%
Supervision (Basel Committee)). These capital requirements
are expressed as capital ratios that compare measures of 1. Principally includes equity investments in non-financial companies and the
cumulative change in the fair value of our unsecured borrowings attributable
capital to risk-weighted assets (RWAs). See Note 20 to the
to the impact of changes in our own credit spreads, disallowed deferred tax
consolidated financial statements for additional assets, and investments in certain nonconsolidated entities.
information regarding the firm’s RWAs. The firm’s capital 2. Substantially all of our subordinated debt qualifies as Tier 2 capital for Basel 1
levels are also subject to qualitative judgments by its purposes.
regulators about components, risk weightings and other 3. See Note 20 to the consolidated financial statements for additional
factors. information about the firm’s RWAs and Tier 1 leverage ratio.
4. The Tier 1 common ratio equals Tier 1 common capital divided by RWAs. We
Federal Reserve Board regulations require bank holding believe that the Tier 1 common ratio is meaningful because it is one of the
companies to maintain a minimum Tier 1 capital ratio of 4% measures that we and investors use to assess capital adequacy and, while not
currently a formal regulatory capital ratio, this measure is of increasing importance
and a minimum total capital ratio of 8%. The required to regulators. The Tier 1 common ratio is a non-GAAP measure and may not be
minimum Tier 1 capital ratio and total capital ratio in order comparable to similar non-GAAP measures used by other companies.
to be considered a “well-capitalized” bank holding company
Our Tier 1 capital ratio decreased to 13.8% as of
under the Federal Reserve Board guidelines are 6% and
December 2011 from 16.0% as of December 2010.
10%, respectively. Bank holding companies may be expected
Our Tier 1 leverage ratio decreased to 7.0% as of
to maintain ratios well above the minimum levels, depending
December 2011 from 8.0% as of December 2010. These
on their particular condition, risk profile and growth plans.
decreases reflected a reduction in our Tier 1 capital
The minimum Tier 1 leverage ratio is 3% for bank holding
primarily due to the impact of the redemption of the firm’s
companies that have received the highest supervisory rating
Series G Preferred Stock and the repurchase of 47.0 million
under Federal Reserve Board guidelines or that have
shares of our common stock, partially offset by net
implemented the Federal Reserve Board’s risk-based capital
earnings.
measure for market risk. Other bank holding companies
must have a minimum Tier 1 leverage ratio of 4%.

We are currently working to implement the requirements The Basel Committee has published its final provisions for
set out in the Federal Reserve Board’s Risk-Based Capital assessing the global systemic importance of banking
Standards: Advanced Capital Adequacy Framework — institutions and the range of additional Tier 1 common
Basel 2, as applicable to us as a bank holding company equity that should be maintained by banking institutions
(Basel 2), which are based on the advanced approaches deemed to be globally systemically important. The
under the Revised Framework for the International additional capital for these institutions would initially
Convergence of Capital Measurement and Capital range from 1% to 2.5% of Tier 1 common equity and could
Standards issued by the Basel Committee. U.S. banking be as much as 3.5% for a bank that increases its systemic
regulators have incorporated the Basel 2 framework into footprint (e.g., by increasing total assets). The firm was one
the existing risk-based capital requirements by requiring of 29 institutions identified by the Financial Stability Board
that internationally active banking organizations, such as (established at the direction of the leaders of the Group of
us, adopt Basel 2, once approved to do so by regulators. 20) as globally systemically important under the Basel
As required by the Dodd-Frank Act, U.S. banking Committee’s methodology. Therefore, depending upon the
regulators have adopted a rule that requires large banking manner and timing of the U.S. banking regulators’
organizations, upon adoption of Basel 2, to continue to implementation of the Basel Committee’s methodology, we
calculate risk-based capital ratios under both Basel 1 and expect that the minimum Tier 1 common ratio requirement
Basel 2. For each of the Tier 1 and Total capital ratios, the applicable to us will include this additional capital
lower of the Basel 1 and Basel 2 ratios calculated will be assessment. The final determination of whether an
used to determine whether the bank meets its minimum institution is classified as globally systemically important
risk-based capital requirements. and the calculation of the required additional capital
amount is expected to be disclosed by the Basel Committee
The U.S. federal bank regulatory agencies have issued
no later than November 2014 based on data through the
revised proposals to modify their market risk regulatory
end of 2013.
capital requirements for banking organizations in the
United States that have significant trading activities. These The Dodd-Frank Act will subject us at a firmwide level to
modifications are designed to address the adjustments to the same leverage and risk-based capital requirements that
Basel 2.5, as well as the prohibition on the use of credit apply to depository institutions and directs banking
ratings, as required by the Dodd-Frank Act. Once regulators to impose additional capital requirements as
implemented, it is likely that these changes will result in disclosed above. The Federal Reserve Board is expected to
increased capital requirements for market risk. adopt the new leverage and risk-based capital regulations in
2012. As a consequence of these changes, Tier 1 capital
Additionally, the guidelines issued by the Basel Committee
treatment for our junior subordinated debt issued to trusts
in December 2010 (Basel 3) revise the definition of Tier 1
will be phased out over a three-year period beginning on
capital, introduce Tier 1 common equity as a regulatory
January 1, 2013. The interaction among the Dodd-Frank
metric, set new minimum capital ratios (including a new
Act, the Basel Committee’s proposed changes and other
“capital conservation buffer,” which must be composed
proposed or announced changes from other governmental
exclusively of Tier 1 common equity and will be in addition
entities and regulators adds further uncertainty to our
to the minimum capital ratios), introduce a Tier 1 leverage
future capital requirements.
ratio within international guidelines for the first time, and
make substantial revisions to the computation of RWAs for
credit exposures. Implementation of the new requirements
is expected to take place over the next several years.
Although the U.S. federal banking agencies have now issued
proposed rules that are intended to implement certain
aspects of the Basel 2.5 guidelines, they have not yet
addressed all aspects of those guidelines or the Basel 3
changes.

See “Business — Regulation” in Part I, Item 1 of our Annual The level and composition of our equity capital are among
Report on Form 10-K and Note 20 to the consolidated the many factors considered in determining our credit
financial statements for additional information about our ratings. Each agency has its own definition of eligible
regulatory capital ratios and the related regulatory capital and methodology for evaluating capital adequacy,
requirements. and assessments are generally based on a combination of
factors rather than a single calculation. See “Liquidity Risk
Internal Capital Adequacy Assessment Process
Management — Credit Ratings” for further information
We perform an ICAAP with the objective of ensuring that
about credit ratings of Group Inc., GS&Co., GSI and GS
the firm is appropriately capitalized relative to the risks in
Bank USA.
our business.
Subsidiary Capital Requirements
As part of our ICAAP, we perform an internal risk-based
Many of our subsidiaries, including GS Bank USA and our
capital assessment. This assessment incorporates market
broker-dealer subsidiaries, are subject to separate
risk, credit risk and operational risk. Market risk is
regulation and capital requirements in jurisdictions
calculated by using Value-at-Risk (VaR) calculations
throughout the world. For purposes of assessing the
supplemented by risk-based add-ons which include risks
adequacy of its capital, GS Bank USA has established an
related to rare events (tail risks). Credit risk utilizes
ICAAP which is similar to that used by Group Inc. GS Bank
assumptions about our counterparties’ probability of
USA’s capital levels and prompt corrective action
default, the size of our losses in the event of a default and
classification are subject to qualitative judgments by its
the maturity of our counterparties’ contractual obligations
regulators about components, risk weightings and other
to us. Operational risk is calculated based on scenarios
factors.
incorporating multiple types of operational failures.
Backtesting is used to gauge the effectiveness of models at We expect that the capital requirements of several of our
capturing and measuring relevant risks. subsidiaries will be impacted in the future by the various
developments arising from the Basel Committee, the Dodd-
We evaluate capital adequacy based on the result of our
Frank Act, and other governmental entities and regulators.
internal risk-based capital assessment, supplemented with
the results of stress tests which measure the firm’s See Note 20 to the consolidated financial statements for
performance under various market conditions. Our goal is information about GS Bank USA’s capital ratios under
to hold sufficient capital, under our internal risk-based Basel 1 as implemented by the Federal Reserve Board, and
capital framework, to ensure we remain adequately for further information about the capital requirements of
capitalized after experiencing a severe stress event. Our our other regulated subsidiaries and the potential impact
assessment of capital adequacy is viewed in tandem with of regulatory reform.
our assessment of liquidity adequacy and integrated into
Subsidiaries not subject to separate regulatory capital
the overall risk management structure, governance and
requirements may hold capital to satisfy local tax
policy framework of the firm.
guidelines, rating agency requirements (for entities with
We attribute capital usage to each of our businesses based assigned credit ratings) or internal policies, including
upon our internal risk-based capital and regulatory policies concerning the minimum amount of capital a
frameworks and manage the levels of usage based upon the subsidiary should hold based on its underlying level of risk.
balance sheet and risk limits established. In certain instances, Group Inc. may be limited in its ability
to access capital held at certain subsidiaries as a result of
Rating Agency Guidelines
regulatory, tax or other constraints. As of December 2011
The credit rating agencies assign credit ratings to the
and December 2010, Group Inc.’s equity investment in
obligations of Group Inc., which directly issues or
subsidiaries was $67.70 billion and $71.30 billion,
guarantees substantially all of the firm’s senior unsecured
respectively, compared with its total shareholders’ equity of
obligations. Goldman, Sachs & Co. (GS&Co.) and
$70.38 billion and $77.36 billion, respectively.
Goldman Sachs International (GSI) have been assigned
long- and short-term issuer ratings by certain credit rating
agencies. GS Bank USA has also been assigned long-term
issuer ratings as well as ratings on its long-term and short-
term bank deposits. In addition, credit rating agencies have
assigned ratings to debt obligations of certain other
subsidiaries of Group Inc.

Group Inc. has guaranteed the payment obligations of Preferred Stock. During 2011, we redeemed the 50,000
GS&Co., GS Bank USA, Goldman Sachs Bank (Europe) plc shares of our Series G Preferred Stock held by Berkshire
and Goldman Sachs Execution & Clearing, L.P. (GSEC) Hathaway for the stated redemption price of $5.50 billion
subject to certain exceptions. In November 2008, Group Inc. ($110,000 per share), plus accrued and unpaid dividends.
contributed subsidiaries into GS Bank USA, and Group Inc. In connection with this redemption, we recognized a
agreed to guarantee certain losses, including credit-related preferred dividend of $1.64 billion (calculated as the
losses, relating to assets held by the contributed entities. In difference between the carrying value and the redemption
connection with this guarantee, Group Inc. also agreed to value of the preferred stock), which is included in the
pledge to GS Bank USA certain collateral, including interests consolidated statement of earnings for 2011. Berkshire
in subsidiaries and other illiquid assets. Hathaway continues to hold a five-year warrant, issued in
October 2008, to purchase up to 43.5 million shares of
Our capital invested in non-U.S. subsidiaries is generally
common stock at an exercise price of $115.00 per share.
exposed to foreign exchange risk, substantially all of which
is managed through a combination of derivatives and Share Repurchase Program. We seek to use our share
non-U.S. denominated debt. repurchase program to help maintain the appropriate level
of common equity and to substantially offset increases in
Contingency Capital Plan
share count over time resulting from employee share-based
Our contingency capital plan provides a framework for
compensation. The repurchase program is effected
analyzing and responding to a perceived or actual capital
primarily through regular open-market purchases, the
deficiency, including, but not limited to, identification of
amounts and timing of which are determined primarily by
drivers of a capital deficiency, as well as mitigants and
our current and projected capital positions (i.e.,
potential actions. It outlines the appropriate
comparisons of our desired level and composition of capital
communication procedures to follow during a crisis period,
to our actual level and composition of capital) and the
including internal dissemination of information as well as
issuance of shares resulting from employee share-based
ensuring timely communication with external stakeholders.
compensation, but which may also be influenced by general
Equity Capital Management market conditions and the prevailing price and trading
Our objective is to maintain a sufficient level and optimal volumes of our common stock.
composition of equity capital. We principally manage our
As of December 2011, under the share repurchase
capital through issuances and repurchases of our common
program approved by the Board of Directors of Group
stock. We may also, from time to time, issue or repurchase
Inc. (Board), we can repurchase up to 63.5 million
our preferred stock, junior subordinated debt issued to
additional shares of common stock; however, any such
trusts and other subordinated debt or other forms of capital
repurchases are subject to the approval of the Federal
as business conditions warrant and subject to any
Reserve Board. See “Market for Registrant’s Common
regulatory approvals. We manage our capital requirements
Equity, Related Stockholder Matters and Issuer Purchases
principally by setting limits on balance sheet assets and/or
of Equity Securities” in Part II, Item 5 of our Annual
limits on risk, in each case both at the consolidated and
Report on Form 10-K and Note 19 to the consolidated
business levels. We attribute capital usage to each of our
financial statements for additional information on our
businesses based upon our internal risk-based capital and
repurchase program.
regulatory frameworks and manage the levels of usage
based upon the balance sheet and risk limits established. See Notes 16 and 19 to the consolidated financial
statements for further information about our preferred
stock, junior subordinated debt issued to trusts and other
subordinated debt.

Other Capital Metrics Off-Balance-Sheet Arrangements and

The table below presents information on our shareholders’ Contractual Obligations
equity and book value per common share.
Off-Balance-Sheet Arrangements
We have various types of off-balance-sheet arrangements
As of December
that we enter into in the ordinary course of business. Our
$ in millions, except per share amounts 2011 2010
involvement in these arrangements can take many different
Total shareholders’ equity $70,379 $77,356 forms, including:
Common shareholders’ equity 67,279 70,399
Tangible common shareholders’ equity 61,811 64,877 ‰ purchasing or retaining residual and other interests in
Book value per common share 130.31 128.72 special purpose entities such as mortgage-backed and
Tangible book value per common share 119.72 118.63 other asset-backed securitization vehicles;
Tangible common shareholders’ equity. Tangible ‰ holding senior and subordinated debt, interests in
common shareholders’ equity equals total shareholders’ limited and general partnerships, and preferred and
equity less preferred stock, goodwill and identifiable common stock in other nonconsolidated vehicles;
intangible assets. We believe that tangible common ‰ entering into interest rate, foreign currency, equity,
shareholders’ equity is meaningful because it is a measure commodity and credit derivatives, including total return
that we and investors use to assess capital adequacy. swaps;
Tangible common shareholders’ equity is a non-GAAP
measure and may not be comparable to similar non-GAAP ‰ entering into operating leases; and
measures used by other companies. ‰ providing guarantees, indemnifications, loan commitments,
The table below presents the reconciliation of total letters of credit and representations and warranties.
shareholders’ equity to tangible common shareholders’ We enter into these arrangements for a variety of business
equity. purposes, including securitizations. The securitization
vehicles that purchase mortgages, corporate bonds, and
As of December other types of financial assets are critical to the functioning of
in millions 2011 2010 several significant investor markets, including the mortgage-
Total shareholders’ equity $70,379 $77,356 backed and other asset-backed securities markets, since they
Deduct: Preferred stock (3,100) (6,957) offer investors access to specific cash flows and risks created
Common shareholders’ equity 67,279 70,399 through the securitization process.
Deduct: Goodwill and identifiable
intangible assets (5,468) (5,522) We also enter into these arrangements to underwrite client
Tangible common shareholders’ equity $61,811 $64,877 securitization transactions; provide secondary market
liquidity; make investments in performing and
Book value and tangible book value per common nonperforming debt, equity, real estate and other assets;
share. Book value and tangible book value per common provide investors with credit-linked and asset-repackaged
share are based on common shares outstanding, including notes; and receive or provide letters of credit to satisfy
restricted stock units granted to employees with no future margin requirements and to facilitate the clearance and
service requirements, of 516.3 million and 546.9 million as settlement process.
of December 2011 and December 2010, respectively. We
believe that tangible book value per common share
(tangible common shareholders’ equity divided by common
shares outstanding) is meaningful because it is a measure
that we and investors use to assess capital adequacy.
Tangible book value per common share is a non-GAAP
measure and may not be comparable to similar non-GAAP
measures used by other companies.

Our financial interests in, and derivative transactions with, The table below presents where a discussion of our various
such nonconsolidated entities are accounted for at fair off-balance-sheet arrangements may be found in this
value, in the same manner as our other financial Annual Report. In addition, see Note 3 to the consolidated
instruments, except in cases where we apply the equity financial statements for a discussion of our consolidation
method of accounting. policies.
Type of Off-Balance-Sheet Arrangement Disclosure in Annual Report

Variable interests and other obligations, including See Note 11 to the consolidated financial statements.
contingent obligations, arising from variable interests in
nonconsolidated VIEs
Leases, letters of credit, and lending and other See below and Note 18 to the consolidated financial
commitments statements.
Guarantees See below and Note 18 to the consolidated financial
statements.
Derivatives See Notes 4, 5, 7 and 18 to the consolidated financial
statements.

Contractual Obligations
We have certain contractual obligations which require us to also include certain off-balance-sheet contractual
make future cash payments. These contractual obligations obligations such as purchase obligations, minimum rental
include our unsecured long-term borrowings, secured long- payments under noncancelable leases and commitments
term financings, time deposits, contractual interest and guarantees.
payments and insurance agreements, all of which are
The table below presents our contractual obligations,
included in our consolidated statement of financial
commitments and guarantees as of December 2011.
condition. Our obligations to make future cash payments
2017-
in millions 2012 2013-2014 2015-2016 Thereafter Total
Amounts related to on-balance-sheet obligations

Time deposits 1 $ — $ 4,558 $ 1,754 $ 2,120 $ 8,432
Secured long-term financings 2 — 5,479 1,020 1,680 8,179
Unsecured long-term borrowings 3 — 45,548 42,520 85,477 173,545
Contractual interest payments 4 6,892 12,603 9,617 33,784 62,896
Insurance liabilities 5 1,211 2,191 1,823 18,118 23,343
Subordinated liabilities issued by consolidated VIEs 47 36 — 1,007 1,090
Amounts related to off-balance-sheet arrangements
Commitments to extend credit 12,172 14,685 37,692 1,196 65,745
Contingent and forward starting resale and securities borrowing agreements 54,522 — — — 54,522
Forward starting repurchase and secured lending agreements 17,964 — — — 17,964
Letters of credit 1,145 58 145 5 1,353
Investment commitments 2,455 4,764 439 1,460 9,118
Other commitments 5,200 101 34 7 5,342
Minimum rental payments 440 805 638 1,380 3,263
Derivative guarantees 486,244 206,853 53,743 49,576 796,416
Securities lending indemnifications 27,798 — — — 27,798
Other financial guarantees 625 795 1,209 939 3,568
1. Excludes $4.83 billion of time deposits maturing within one year.

2. The aggregate contractual principal amount of secured long-term financings for which the fair value option was elected, primarily consisting of transfers of financial
assets accounted for as financings rather than sales and certain other nonrecourse financings, exceeded their related fair value by $239 million.
3. Includes $10.84 billion related to interest rate hedges on certain unsecured long-term borrowings. In addition, the aggregate contractual principal amount of
unsecured long-term borrowings (principal and non-principal protected) for which the fair value option was elected exceeded the related fair value by $693 million.
4. Represents estimated future interest payments related to unsecured long-term borrowings, secured long-term financings and time deposits based on applicable
interest rates as of December 2011. Includes stated coupons, if any, on structured notes.
5. Represents estimated undiscounted payments related to future benefits and unpaid claims arising from policies associated with our insurance activities, excluding
separate accounts and estimated recoveries under reinsurance contracts.

In the table above: incurred, is being held for potential growth or to replace
currently occupied space that we may exit in the future. We
‰ Obligations maturing within one year of our financial
regularly evaluate our current and future space capacity in
statement date or redeemable within one year of our
relation to current and projected staffing levels. For the year
financial statement date at the option of the holder are
ended December 2011, total occupancy expenses for space
excluded and are treated as short-term obligations.
held in excess of our current requirements were
‰ Obligations that are repayable prior to maturity at our $85 million, which includes costs related to the transition to
option are reflected at their contractual maturity dates our new headquarters in New York City. In addition, for
and obligations that are redeemable prior to maturity at the year ended December 2011, we incurred exit costs of
the option of the holders are reflected at the dates such $14 million related to our office space. We may incur exit
options become exercisable. costs in the future to the extent we (i) reduce our space
capacity or (ii) commit to, or occupy, new properties in the
‰ Amounts included in the table do not necessarily reflect
locations in which we operate and, consequently, dispose of
the actual future cash flow requirements for these
existing space that had been held for potential growth.
arrangements because commitments and guarantees
These exit costs may be material to our results of operations
represent notional amounts and may expire unused or
in a given period.
be reduced or cancelled at the counterparty’s request.
‰ Due to the uncertainty of the timing and amounts that
will ultimately be paid, our liability for unrecognized tax Overview and Structure of Risk
benefits has been excluded. See Note 24 to the Management
consolidated financial statements for further information
about our unrecognized tax benefits. Overview
We believe that effective risk management is of primary
See Notes 15 and 18 to the consolidated financial importance to the success of the firm. Accordingly, we
statements for further information about our short-term have comprehensive risk management processes through
borrowings, and commitments and guarantees. which we monitor, evaluate and manage the risks we
As of December 2011, our unsecured long-term borrowings assume in conducting our activities. These include
were $173.55 billion, with maturities extending to 2061, market, credit, liquidity, operational, legal, regulatory
and consisted principally of senior borrowings. See Note 16 and reputational risk exposures. Our risk management
to the consolidated financial statements for further framework is built around three core components:
information about our unsecured long-term borrowings. governance, processes and people.
As of December 2011, our future minimum rental Governance. Risk management governance starts with our
payments net of minimum sublease rentals under Board, which plays an important role in reviewing and
noncancelable leases were $3.26 billion. These lease approving risk management policies and practices, both
commitments, principally for office space, expire on directly and through its Risk Committee, which consists of all
various dates through 2069. Certain agreements are of our independent directors. The Board also receives periodic
subject to periodic escalation provisions for increases in updates on firmwide risks from our independent control and
real estate taxes and other charges. See Note 18 to the support functions. Next, at the most senior levels of the firm,
consolidated financial statements for further information our leaders are experienced risk managers, with a
about our leases. sophisticated and detailed understanding of the risks we take.
Our senior managers lead and participate in risk-oriented
Our occupancy expenses include costs associated with committees, as do the leaders of our independent control and
office space held in excess of our current requirements. This support functions — including those in internal audit,
excess space, the cost of which is charged to earnings as compliance, controllers, credit risk management, human
capital management, legal, market risk management,
operations, operational risk management, tax, technology and
treasury.

The firm’s governance structure provides the protocol and We also focus on the rigor and effectiveness of the firm’s
responsibility for decision-making on risk management risk systems. The goal of our risk management technology
issues and ensures implementation of those decisions. We is to get the right information to the right people at the right
make extensive use of risk-related committees that meet time, which requires systems that are comprehensive,
regularly and serve as an important means to facilitate and reliable and timely. We devote significant time and
foster ongoing discussions to identify, manage and mitigate resources to our risk management technology to ensure that
risks. it consistently provides us with complete, accurate and
timely information.
We maintain strong communication about risk and we have
a culture of collaboration in decision-making among the People. Even the best technology serves only as a tool for
revenue-producing units, independent control and support helping to make informed decisions in real time about the
functions, committees and senior management. While we risks we are taking. Ultimately, effective risk management
believe that the first line of defense in managing risk rests requires our people to interpret our risk data on an ongoing
with the managers in our revenue-producing units, we and timely basis and adjust risk positions accordingly. In
dedicate extensive resources to independent control and both our revenue-producing units and our independent
support functions in order to ensure a strong oversight control and support functions, the experience of our
structure and an appropriate segregation of duties. professionals, and their understanding of the nuances and
limitations of each risk measure, guide the firm in assessing
Processes. We maintain various processes and procedures
exposures and maintaining them within prudent levels.
that are critical components of our risk management. First
and foremost is our daily discipline of marking Structure
substantially all of the firm’s inventory to current market Ultimate oversight of risk is the responsibility of the firm’s
levels. Goldman Sachs carries its inventory at fair value, Board. The Board oversees risk both directly and through
with changes in valuation reflected immediately in our risk its Risk Committee. Within the firm, a series of committees
management systems and in net revenues. We do so because with specific risk management mandates have oversight or
we believe this discipline is one of the most effective tools decision-making responsibilities for risk management
for assessing and managing risk and that it provides activities. Committee membership generally consists of
transparent and realistic insight into our financial senior managers from both our revenue-producing units
exposures. and our independent control and support functions. We
have established procedures for these committees to ensure
We also apply a rigorous framework of limits to control
that appropriate information barriers are in place.
risk across multiple transactions, products, businesses and
Our primary risk committees, most of which also have
markets. This includes setting credit and market risk limits
additional sub-committees or working groups, are
at a variety of levels and monitoring these limits on a daily
described below. In addition to these committees, we have
basis. Limits are typically set at levels that will be
other risk-oriented committees which provide oversight for
periodically exceeded, rather than at levels which reflect
different businesses, activities, products, regions and legal
our maximum risk appetite. This fosters an ongoing
entities.
dialogue on risk among revenue-producing units,
independent control and support functions, committees and Membership of the firm’s risk committees is reviewed
senior management, as well as rapid escalation of risk- regularly and updated to reflect changes in the
related matters. See “Market Risk Management” and responsibilities of the committee members. Accordingly, the
“Credit Risk Management” for further information on our length of time that members serve on the respective
risk limits. committees varies as determined by the committee chairs
and based on the responsibilities of the members within the
Active management of our positions is another important
firm.
process. Proactive mitigation of our market and credit
exposures minimizes the risk that we will be required to In addition, independent control and support functions,
take outsized actions during periods of stress. which report to the chief financial officer, general counsel,
chief administrative officer, or in the case of Internal Audit,
to the Audit Committee of the Board, are responsible for
day-to-day oversight of risk, as discussed in greater detail in
the following sections.

The chart below presents an overview of our risk of our Board, our key risk-related committees and the
management governance structure, highlighting the oversight independence of our control and support functions.
Corporate Oversight
Board of Directors
Risk Committee
Senior Management Oversight

Chief Executive Officer
President
Chief Financial Officer
Committee Oversight
Management Committee Chief Risk Officer
Firmwide Client and Business Firmwide

Standards Committee Risk Committee
• Securities Division Risk Committee • Investment Management Division
• Firmwide New Activity Committee • Credit Policy Committee Risk Committee
• Firmwide Suitability Committee • Operational Risk Committee
• Finance Committee
• Firmwide Commitments Committee

• Firmwide Capital Committee
Independent Control and Support Functions Revenue-Producing Units

Internal Audit
• Compliance • Legal • Tax Business Managers
• Controllers • Market Risk Management • Technology Business Risk Managers
• Credit Risk Management • Operations • Treasury
• Human Capital Management • Operational Risk Management
Management Committee. The Management Committee Firmwide Client and Business Standards Committee.
oversees the global activities of the firm, including all of the The Firmwide Client and Business Standards Committee
firm’s independent control and support functions. It assesses and makes determinations regarding business
provides this oversight directly and through authority standards and practices, reputational risk management,
delegated to committees it has established. This committee client relationships and client service, is chaired by the
is comprised of the most senior leaders of the firm, and is firm’s president and chief operating officer, and reports to
chaired by the firm’s chief executive officer. The the Management Committee. This committee also has
Management Committee has established various responsibility for overseeing the implementation of the
committees with delegated authority and the chairperson of recommendations of the Business Standards Committee.
the Management Committee appoints the chairpersons of This committee has established the following two risk-
these committees. Most members of the Management related committees that report to it:
Committee are also members of other firmwide, divisional
and regional committees. The following are the committees
that are principally involved in firmwide risk management.

‰ Firmwide New Activity Committee. The Firmwide ‰ Credit Policy Committee. The Credit Policy
New Activity Committee is responsible for reviewing Committee establishes and reviews broad credit policies
new activities and establishing a process to identify and and parameters that are implemented by our Credit Risk
review previously approved activities that are significant Management department (Credit Risk Management).
and that have changed in complexity and/or structure or This committee is chaired by the firm’s chief credit
present different reputational and suitability concerns officer.
over time to consider whether these activities remain
‰ Operational Risk Committee. The Operational Risk
appropriate. This committee is co-chaired by the firm’s
Committee provides oversight of the ongoing
head of operations/chief operating officer for Europe,
development and implementation of our operational risk
Middle East and Africa and the chief administrative
policies, framework and methodologies, and monitors
officer of our Investment Management Division who are
the effectiveness of operational risk management. This
appointed by the Firmwide Client and Business
committee is chaired by a managing director in Credit
Standards Committee chairperson.
Risk Management.
‰ Firmwide Suitability Committee. The Firmwide
‰ Finance Committee. The Finance Committee has
Suitability Committee is responsible for setting standards
oversight of firmwide liquidity, the size and composition
and policies for product, transaction and client
of our balance sheet and capital base, and our credit
suitability and providing a forum for consistency across
ratings. This committee regularly reviews our liquidity,
divisions, regions and products on suitability
balance sheet, funding position and capitalization, and
assessments. This committee also reviews suitability
makes adjustments in light of current events, risks and
matters escalated from other firm committees. This
exposures, and regulatory requirements. This committee
committee is co-chaired by the firm’s international
is also responsible for reviewing and approving balance
general counsel and the co-head of our Investment
sheet limits and the size of our GCE. This committee is
Management Division who are appointed by the
co-chaired by the firm’s chief financial officer and the
Firmwide Client and Business Standards Committee.
firm’s global treasurer.
Firmwide Risk Committee. The Firmwide Risk
The following committees report jointly to the Firmwide
Committee is responsible for the ongoing monitoring and
Risk Committee and the Firmwide Client and Business
control of the firm’s global financial risks. Through both
Standards Committee.
direct and delegated authority, the Firmwide Risk
Committee approves firmwide, product, divisional and ‰ Firmwide Commitments Committee. The Firmwide
business-level limits for both market and credit risks, Commitments Committee reviews the firm’s underwriting
approves sovereign credit risk limits and reviews results of and distribution activities with respect to equity and equity-
stress tests and scenario analyses. This committee is related product offerings, and sets and maintains policies
co-chaired by the firm’s chief financial officer and a senior and procedures designed to ensure that legal, reputational,
managing director from the firm’s executive office, and regulatory and business standards are maintained on a
reports to the Management Committee. The following four global basis. In addition to reviewing specific transactions,
committees report to the Firmwide Risk Committee, which this committee periodically conducts general strategic
is responsible for appointing the chairperson of each of reviews of sectors and products and establishes policies in
these committees: connection with transaction practices. This committee is
co-chaired by the global co-head of our Financial
‰ Securities Division Risk Committee. The Securities
Institutions Group for Investment Banking and the head of
Division Risk Committee sets market risk limits, subject
Mergers & Acquisitions for Europe, Middle East, Africa
to overall firmwide risk limits, for our Fixed Income,
and Asia Pacific for Investment Banking who are appointed
Currency and Commodities Client Execution and
by the Firmwide Client and Business Standards Committee
Equities Client Execution businesses based on a number
chairperson.
of risk measures, including VaR, stress tests, scenario
analyses, and inventory levels. This committee is chaired
by the chief risk officer of our Securities Division.

‰ Firmwide Capital Committee. The Firmwide Capital Contingency Funding Plan. We maintain a contingency
Committee provides approval and oversight of debt- funding plan to provide a framework for analyzing and
related underwriting transactions, including related responding to a liquidity crisis situation or periods of market
commitments of the firm’s capital. This committee aims stress. This framework sets forth the plan of action to fund
to ensure that business and reputational standards for normal business activity in emergency and stress situations.
underwritings and capital commitments are maintained These principles are discussed in more detail below.
on a global basis. This committee is co-chaired by the
Excess Liquidity
firm’s global treasurer and the head of credit finance for
Our most important liquidity policy is to pre-fund our
Europe, Middle East and Africa who are appointed by
estimated potential cash needs during a liquidity crisis and
the Firmwide Risk Committee chairpersons.
hold this excess liquidity in the form of unencumbered,
Investment Management Division Risk Committee. The highly liquid securities and cash. We believe that the
Investment Management Division Risk Committee is securities held in our global core excess would be readily
responsible for the ongoing monitoring and control of global convertible to cash in a matter of days, through liquidation,
market, counterparty credit and liquidity risks associated with by entering into repurchase agreements or from maturities
the activities of our investment management businesses. The of reverse repurchase agreements, and that this cash would
head of Investment Management Division risk management is allow us to meet immediate obligations without needing to
the chair of this committee. The Investment Management sell other assets or depend on additional funding from
Division Risk Committee reports to the firm’s chief risk officer. credit-sensitive markets.
As of December 2011 and December 2010, the fair value of
the securities and certain overnight cash deposits included
Liquidity Risk Management
in our GCE totaled $171.58 billion and $174.78 billion,
Liquidity is of critical importance to financial institutions. respectively. Based on the results of our internal liquidity
Most of the recent failures of financial institutions have risk model, discussed below, as well as our consideration of
occurred in large part due to insufficient liquidity. other factors including but not limited to a qualitative
Accordingly, the firm has in place a comprehensive and assessment of the condition of the financial markets and the
conservative set of liquidity and funding policies to address firm, we believe our liquidity position as of December 2011
both firm-specific and broader industry or market liquidity was appropriate.
events. Our principal objective is to be able to fund the firm
The table below presents the fair value of the securities and
and to enable our core businesses to continue to generate
certain overnight cash deposits that are included in our
revenues, even under adverse circumstances.
GCE.
We manage liquidity risk according to the following
principles: Average for the
Year Ended December
Excess Liquidity. We maintain substantial excess liquidity in millions 2011 2010
to meet a broad range of potential cash outflows and
U.S. dollar-denominated $125,668 $130,072
collateral needs in a stressed environment. Non-U.S. dollar-denominated 40,291 37,942
Asset-Liability Management. We assess anticipated Total $165,959 $168,014
holding periods for our assets and their expected liquidity in
a stressed environment. We manage the maturities and
diversity of our funding across markets, products and
counterparties, and seek to maintain liabilities of appropriate
tenor relative to our asset base.

The U.S. dollar-denominated excess is composed of ‰ During a liquidity crisis, credit-sensitive funding,
(i) unencumbered U.S. government and federal agency including unsecured debt and some types of secured
obligations (including highly liquid U.S. federal agency financing agreements, may be unavailable, and the terms
mortgage-backed obligations), all of which are eligible as (e.g., interest rates, collateral provisions and tenor) or
collateral in Federal Reserve open market operations and availability of other types of secured financing may
(ii) certain overnight U.S. dollar cash deposits. The change.
non-U.S. dollar-denominated excess is composed of only
‰ As a result of our policy to pre-fund liquidity that we
unencumbered German, French, Japanese and United
estimate may be needed in a crisis, we hold more
Kingdom government obligations and certain overnight
unencumbered securities and have larger debt balances
cash deposits in highly liquid currencies. We strictly limit
than our businesses would otherwise require. We believe
our excess liquidity to this narrowly defined list of securities
that our liquidity is stronger with greater balances of
and cash because they are highly liquid, even in a difficult
highly liquid unencumbered securities, even though it
funding environment. We do not include other potential
increases our total assets and our funding costs.
sources of excess liquidity, such as lower-quality
unencumbered securities or committed credit facilities, in We believe that our GCE provides us with a resilient source
our GCE. of funds that would be available in advance of potential cash
and collateral outflows and gives us significant flexibility in
The table below presents the fair value of our GCE by asset
managing through a difficult funding environment.
class.
In order to determine the appropriate size of our GCE, we
Average for the use an internal liquidity model, referred to as the Modeled
Year Ended December Liquidity Outflow, which captures and quantifies the firm’s
in millions 2011 2010 liquidity risks. We also consider other factors including but
Overnight cash deposits $ 34,622 $ 25,040 not limited to a qualitative assessment of the condition of
Federal funds sold — 75 the financial markets and the firm.
U.S. government obligations 88,528 102,937
U.S. federal agency obligations, including We distribute our GCE across subsidiaries, asset types, and
highly liquid U.S. federal agency clearing agents to provide us with sufficient operating
mortgage-backed obligations 5,018 3,194 liquidity to ensure timely settlement in all major markets,
German, French, Japanese and United
even in a difficult funding environment.
Kingdom government obligations 37,791 36,768
Total $165,959 $168,014 We maintain our GCE to enable us to meet current and
potential liquidity requirements of our parent company,
The GCE is held at Group Inc. and our major broker-dealer Group Inc., and our major broker-dealer and bank
and bank subsidiaries, as presented in the table below. subsidiaries. The Modeled Liquidity Outflow incorporates
a consolidated requirement as well as a standalone
Average for the
Year Ended December
requirement for each of our major broker-dealer and bank
subsidiaries. Liquidity held directly in each of these
subsidiaries is intended for use only by that subsidiary to
Group Inc. $ 49,548 $ 53,757
Major broker-dealer subsidiaries 75,086 69,223
meet its liquidity requirements and is assumed not to be
Major bank subsidiaries 41,325 45,034 available to Group Inc. unless (i) legally provided for and
Total $165,959 $168,014 (ii) there are no additional regulatory, tax or other
restrictions. We hold a portion of our GCE directly at
Our GCE reflects the following principles: Group Inc. to support consolidated requirements not
accounted for in the major subsidiaries. In addition to the
‰ The first days or weeks of a liquidity crisis are the most
GCE, we maintain operating cash balances in several of our
critical to a company’s survival.
other operating entities, primarily for use in specific
‰ Focus must be maintained on all potential cash and currencies, entities, or jurisdictions where we do not have
collateral outflows, not just disruptions to financing immediate access to parent company liquidity.
flows. Our businesses are diverse, and our liquidity
needs are determined by many factors, including market
movements, collateral requirements and client
commitments, all of which can change dramatically in a
difficult funding environment.

In addition to our GCE, we have a significant amount of ‰ No diversification benefit across liquidity risks. We
other unencumbered cash and financial instruments, assume that liquidity risks are additive.
including other government obligations, high-grade money
‰ Maintenance of our normal business levels. We do not
market securities, corporate obligations, marginable
assume asset liquidation, other than the GCE.
equities, loans and cash deposits not included in our GCE.
The fair value of these assets averaged $83.32 billion and The Modeled Liquidity Outflow is calculated and reported
$72.98 billion for the years ended December 2011 and to senior management on a daily basis. We regularly refine
December 2010, respectively. We do not consider these our model to reflect changes in market or economic
assets liquid enough to be eligible for our GCE liquidity conditions and the firm’s business mix.
pool and therefore conservatively do not assume we will
The potential contractual and contingent cash and
generate liquidity from these assets in our Modeled
collateral outflows covered in our Modeled Liquidity
Liquidity Outflow.
Outflow include:
Modeled Liquidity Outflow. Our Modeled Liquidity
Unsecured Funding
Outflow is based on a scenario that includes both a market-
‰ Contractual: All upcoming maturities of unsecured long-
wide stress and a firm-specific stress, characterized by some
term debt, commercial paper, promissory notes and
or all of the following qualitative elements:
other unsecured funding products. We assume that we
‰ Global recession, default by a medium-sized sovereign, will be unable to issue new unsecured debt or rollover
low consumer and corporate confidence, and general any maturing debt.
financial instability.
‰ Contingent: Repurchases of our outstanding long-term
‰ Severely challenged market environment with material debt, commercial paper and hybrid financial instruments
declines in equity markets and widening of credit in the ordinary course of business as a market maker.
spreads.
Deposits
‰ Damaging follow-on impacts to financial institutions ‰ Contractual: All upcoming maturities of term deposits.
leading to the failure of a large bank. We assume that we will be unable to raise new term
deposits or rollover any maturing term deposits.
‰ A firm-specific crisis potentially triggered by material
losses, reputational damage, litigation, executive ‰ Contingent: Withdrawals of bank deposits that have no
departure, and/or a ratings downgrade. contractual maturity. The withdrawal assumptions
reflect, among other factors, the type of deposit, whether
The following are the critical modeling parameters of the
the deposit is insured or uninsured, and the firm’s
Modeled Liquidity Outflow:
relationship with the depositor.
‰ Liquidity needs over a 30-day scenario.
Secured Funding
‰ A two-notch downgrade of the firm’s long-term senior ‰ Contractual: A portion of upcoming contractual
unsecured credit ratings. maturities of secured funding due to either the inability
to refinance or the ability to refinance only at wider
‰ A combination of contractual outflows, such as
haircuts (i.e., on terms which require us to post
upcoming maturities of unsecured debt, and contingent
additional collateral). Our assumptions reflect, among
outflows (e.g., actions though not contractually
other factors, the quality of the underlying collateral and
required, we may deem necessary in a crisis). We assume
counterparty concentration.
that most contingent outflows will occur within the
initial days and weeks of a crisis. ‰ Contingent: A decline in value of financial assets pledged
as collateral for financing transactions, which would
‰ No issuance of equity or unsecured debt.
necessitate additional collateral postings under those
‰ No support from government funding facilities. transactions.
Although we have access to various central bank
funding programs, we do not assume reliance on them
as a source of funding in a liquidity crisis.

OTC Derivatives Our approach to asset-liability management includes:

‰ Contingent: Collateral postings to counterparties due to
‰ Conservatively managing the overall characteristics of our
adverse changes in the value of our OTC derivatives.
funding book, with a focus on maintaining long-term,
‰ Contingent: Other outflows of cash or collateral related diversified sources of funding in excess of our current
to OTC derivatives, including the impact of trade requirements. See “Balance Sheet and Funding Sources —
terminations, collateral substitutions, collateral disputes, Funding Sources” for additional details.
collateral calls or termination payments required by a
‰ Actively managing and monitoring our asset base, with
two-notch downgrade in our credit ratings, and
particular focus on the liquidity, holding period and our
collateral that has not been called by counterparties, but
ability to fund assets on a secured basis. This enables us
is available to them.
to determine the most appropriate funding products and
Exchange-Traded Derivatives tenors. Less liquid assets are more difficult to fund and
‰ Contingent: Variation margin postings required due to therefore require funding of longer tenor. See “Balance
adverse changes in the value of our outstanding Sheet and Funding Sources — Balance Sheet
exchange-traded derivatives. Management” for more detail on our balance sheet
management process.
‰ Contingent: An increase in initial margin and guaranty
fund requirements by derivative clearing houses. ‰ Raising secured and unsecured financing that has a
sufficiently longer term than the anticipated holding
Customer Cash and Securities
period of our assets. This reduces the risk that our
‰ Contingent: Liquidity outflows associated with our
liabilities will come due in advance of our ability to
prime brokerage business, including withdrawals of
generate liquidity from the sale of our assets. Because we
customer credit balances, and a reduction in customer
maintain a highly liquid balance sheet, the holding
short positions, which serve as a funding source for long
period of certain of our assets may be materially shorter
positions.
than their contractual maturity dates.
Unfunded Commitments
Our goal is to have sufficient total capital (unsecured long-
‰ Contingent: Draws on our unfunded commitments.
term borrowings plus total shareholders’ equity) so that we
Draw assumptions reflect, among other things, the type
can avoid reliance on asset sales (other than our GCE).
of commitment and counterparty.
However, we recognize that orderly asset sales may be
Other prudent or necessary in a severe or persistent liquidity crisis.
‰ Other upcoming large cash outflows, such as tax payments. The target amount of our total capital is based on an
internal funding model which incorporates the following
Asset-Liability Management
long-term financing requirements:
Our liquidity risk management policies are designed to
ensure we have a sufficient amount of financing, even when ‰ The portion of financial instruments owned, at fair
funding markets experience persistent stress. We seek to value, that are not funded on a secured basis.
maintain a long-dated and diversified funding profile,
‰ Goodwill and identifiable intangible assets, property,
taking into consideration the characteristics and liquidity
leasehold improvements and equipment, and other
profile of our assets.
illiquid assets.
‰ Derivative and other margin and collateral requirements.
‰ Anticipated draws on our unfunded loan commitments.
‰ Regulatory requirements to hold capital or other forms
of financing in excess of what we would otherwise hold
in regulated subsidiaries.

Subsidiary Funding Policies. The majority of our Contingency Funding Plan

unsecured funding is raised by Group Inc. which lends the The Goldman Sachs contingency funding plan sets out the
necessary funds to its subsidiaries, some of which are plan of action we would use to fund business activity in
regulated, to meet their asset financing, liquidity and capital crisis situations and periods of market stress. The
requirements. In addition, Group Inc. provides its regulated contingency funding plan outlines a list of potential risk
subsidiaries with the necessary capital to meet their factors, key reports and metrics that are reviewed on an
regulatory requirements. The benefits of this approach to ongoing basis to assist in assessing the severity of, and
subsidiary funding are enhanced control and greater managing through, a liquidity crisis and/or market
flexibility to meet the funding requirements of our dislocation. The contingency funding plan also describes in
subsidiaries. Funding is also raised at the subsidiary level detail the firm’s potential responses if our assessments
through a variety of products, including secured funding, indicate that the firm has entered a liquidity crisis, which
unsecured borrowings and deposits. include pre-funding for what we estimate will be our
potential cash and collateral needs as well as utilizing
Our intercompany funding policies assume that, unless
secondary sources of liquidity. Mitigants and action items
legally provided for, a subsidiary’s funds or securities are
to address specific risks which may arise are also described
not freely available to its parent company or other
and assigned to individuals responsible for execution.
subsidiaries. In particular, many of our subsidiaries are
subject to laws that authorize regulatory bodies to block or The contingency funding plan identifies key groups of
reduce the flow of funds from those subsidiaries to Group individuals to foster effective coordination, control and
Inc. Regulatory action of that kind could impede access to distribution of information, all of which are critical in the
funds that Group Inc. needs to make payments on its management of a crisis or period of market stress. The
obligations. Accordingly, we assume that the capital contingency funding plan also details the responsibilities of
provided to our regulated subsidiaries is not available to these groups and individuals, which include making and
Group Inc. or other subsidiaries and any other financing disseminating key decisions, coordinating all contingency
provided to our regulated subsidiaries is not available until activities throughout the duration of the crisis or period of
the maturity of such financing. market stress, implementing liquidity maintenance activities
and managing internal and external communication.
Group Inc. has provided substantial amounts of equity and
subordinated indebtedness, directly or indirectly, to its
regulated subsidiaries. For example, as of December 2011,
Group Inc. had $28.16 billion of equity and subordinated
indebtedness invested in GS&Co., its principal U.S.
registered broker-dealer; $28.43 billion invested in GSI, a
regulated U.K. broker-dealer; $2.67 billion invested in
GSEC, a U.S. registered broker-dealer; $4.28 billion invested
in Goldman Sachs Japan Co., Ltd., a regulated Japanese
broker-dealer; and $19.23 billion invested in GS Bank USA,
a regulated New York State-chartered bank. Group Inc. also
provided, directly or indirectly, $84.83 billion of
unsubordinated loans and $6.12 billion of collateral to these
entities, substantially all of which was to GS&Co. and GSI,
as of December 2011. In addition, as of December 2011,
Group Inc. had significant amounts of capital invested in and
loans to its other regulated subsidiaries.

Credit Ratings
The table below presents our unsecured credit ratings (excluding debt guaranteed by the FDIC under the TLGP) and outlook.
As of December 2011
Short-Term Long-Term Subordinated Trust Preferred Rating
Debt Debt Debt Preferred 1 Stock 2 Outlook
DBRS, Inc. R-1 (middle) A (high) A A BBB Stable 8
Fitch, Inc. 3, 4 F1 A A- BBB+ BBB+ Stable 9
Moody’s Investors Service 5 P-1 A1 A2 A3 Baa2 Negative 10
Standard & Poor’s Ratings Services 6, 7 A-2 A- BBB+ BB+ BB+ Negative 10
Rating and Investment Information, Inc. a-1+ AA- A+ N/A N/A Negative 11
1. Trust preferred securities issued by Goldman Sachs Capital I.

2. Includes Group Inc.’s non-cumulative preferred stock and the Normal Automatic Preferred Enhanced Capital Securities (APEX) issued by Goldman Sachs Capital II
and Goldman Sachs Capital III.
3. GS Bank USA has been assigned a rating of A+ for long-term bank deposits, F1 for short-term bank deposits and A as a long-term issuer.
4. GS&Co. has been assigned a rating of F1 as a short-term issuer and A as a long-term issuer.
5. GS Bank USA has been assigned a rating of Aa3 for long-term bank deposits, P-1 for short-term bank deposits and Aa3 as a long-term issuer.
6. GS&Co. has been assigned a rating of A-1 as a short-term issuer and A as a long-term issuer.
7. GSI has been assigned a rating of A-1 as a short-term issuer and A as a long-term issuer.
8. Applies to long-term and short-term ratings.
9. Applies to long-term issuer default ratings.
10. Applies to long-term ratings.
11. Applies to issuer rating.
During the fourth quarter of 2011, after revising its global We rely on the short-term and long-term debt capital
rating methodology for banks, Standard & Poor’s Ratings markets to fund a significant portion of our day-to-day
Services lowered Group Inc.’s ratings on long-term debt operations and the cost and availability of debt financing is
(from A to A-), short-term debt (from A-1 to A-2), influenced by our credit ratings. Credit ratings are also
subordinated debt (from A- to BBB+), trust preferred (from important when we are competing in certain markets, such
BBB- to BB+) and preferred stock (from BBB- to BB+), and as OTC derivatives, and when we seek to engage in longer-
retained its outlook of “negative.” In addition, as part of a term transactions. See “Certain Risk Factors That May
global review of financial institutions, Fitch, Inc. lowered Affect Our Businesses” below and “Risk Factors” in Part I,
Group Inc.’s ratings on long-term debt (from A+ to A), Item 1A of our Annual Report on Form 10-K for a
short-term debt (from F1+ to F1), subordinated debt (from discussion of the risks associated with a reduction in our
A to A-), trust preferred (from A- to BBB+) and preferred credit ratings.
stock (from A- to BBB+), and retained its outlook of
We believe our credit ratings are primarily based on the
“stable.”
credit rating agencies’ assessment of:
On February 10, 2012, Standard & Poor’s Ratings Services
‰ our liquidity, market, credit and operational risk
assigned GS Bank USA, a rating of A-1 as a short-term
management practices;
issuer and A as a long-term issuer.
‰ the level and variability of our earnings;
On February 15, 2012, Moody’s Investors Service placed
the long- and short-term debt ratings of Group Inc. under ‰ our capital base;
review for downgrade as part of a global review of financial
‰ our franchise, reputation and management;
institutions.
‰ our corporate governance; and
‰ the external operating environment, including the
assumed level of government support.

We allocate a portion of our GCE to ensure we would be Cash Flows

able to make the additional collateral or termination As a global financial institution, our cash flows are complex
payments that may be required in the event of a two-notch and bear little relation to our net earnings and net assets.
reduction in our long-term credit ratings, as well as Consequently, we believe that traditional cash flow analysis
collateral that has not been called by counterparties, but is is less meaningful in evaluating our liquidity position than
available to them. The table below presents the additional the excess liquidity and asset-liability management policies
collateral or termination payments that could have been described above. Cash flow analysis may, however, be
called at the reporting date by counterparties in the event of helpful in highlighting certain macro trends and strategic
a one-notch and two-notch downgrade in our credit initiatives in our businesses.
ratings.
Year Ended December 2011. Our cash and cash
equivalents increased by $16.22 billion to $56.01 billion at
As of December
the end of 2011. We generated $23.13 billion in net cash
from operating and investing activities. We used net cash of
Additional collateral or termination payments for a $6.91 billion for financing activities, primarily for
one-notch downgrade $1,303 $1,353
repurchases of our Series G Preferred Stock and common
Additional collateral or termination payments for a
two-notch downgrade 2,183 2,781 stock, partially offset by an increase in bank deposits.
Year Ended December 2010. Our cash and cash
The Basel Committee on Banking Supervision’s
equivalents increased by $1.50 billion to $39.79 billion at
international framework for liquidity risk measurement,
the end of 2010. We generated $7.84 billion in net cash
standards and monitoring calls for imposition of a liquidity
from financing activities primarily from net proceeds from
coverage ratio, designed to ensure that the banking entity
issuances of short-term secured financings. We used net
maintains an adequate level of unencumbered high-quality
cash of $6.34 billion for operating and investing activities,
liquid assets based on expected cash outflows under an
primarily to fund an increase in securities purchased under
acute liquidity stress scenario, and a net stable funding
agreements to resell and an increase in cash and securities
ratio, designed to promote more medium- and long-term
segregated for regulatory and other purposes, partially
funding of the assets and activities of banking entities over a
offset by cash generated from a decrease in securities
one-year time horizon. The liquidity coverage ratio is not
borrowed.
expected to be introduced as a requirement until
January 1, 2015, and the net stable funding ratio is not Year Ended December 2009. Our cash and cash
expected to be introduced as a requirement until equivalents increased by $24.49 billion to $38.29 billion at
January 1, 2018. While the principles behind the new the end of 2009. We generated $48.88 billion in net cash
framework are broadly consistent with our current liquidity from operating activities. We used net cash of
management framework, it is possible that the $24.39 billion for investing and financing activities,
implementation of these standards could impact our primarily for net repayments in unsecured and secured
liquidity and funding requirements and practices. short-term borrowings and the repurchases of Series H
Preferred Stock and the related common stock warrant
from the U.S. Treasury, partially offset by an increase in
bank deposits and the issuance of common stock.

Market Risk Management

Overview Managers in revenue-producing units are accountable for
Market risk is the risk of loss in the value of our inventory managing risk within prescribed limits. These managers
due to changes in market prices. We hold inventory have in-depth knowledge of their positions, of markets and
primarily for market making for our clients and for our the instruments available to hedge their exposures.
investing and lending activities. Our inventory therefore
Managers in revenue-producing units and Market Risk
changes based on client demands and our investment
Management discuss market information, positions and
opportunities. Our inventory is accounted for at fair value
estimated risk and loss scenarios on an ongoing basis.
and therefore fluctuates on a daily basis. Categories of
market risk include the following: Risk Measures
Market Risk Management produces risk measures and
‰ Interest rate risk: results from exposures to changes in
monitors them against market risk limits set by our firm’s
the level, slope and curvature of yield curves, the
risk committees. These measures reflect an extensive range
volatilities of interest rates, mortgage prepayment speeds
of scenarios and the results are aggregated at trading desk,
and credit spreads.
business and firmwide levels.
‰ Equity price risk: results from exposures to changes in
We use a variety of risk measures to estimate the size of
prices and volatilities of individual equities, baskets of
potential losses for both moderate and more extreme
equities and equity indices.
market moves over both short-term and long-term time
‰ Currency rate risk: results from exposures to changes in horizons. Risk measures used for shorter-term periods
spot prices, forward prices and volatilities of currency include VaR and sensitivity metrics. For longer-term
rates. horizons, our primary risk measures are stress tests. Our
risk reports detail key risks, drivers and changes for each
‰ Commodity price risk: results from exposures to changes
desk and business, and are distributed daily to senior
in spot prices, forward prices and volatilities of
management of both our revenue-producing units and our
commodities, such as electricity, natural gas, crude oil,
independent control and support functions.
petroleum products, and precious and base metals.
Systems
Market Risk Management Process
We have made a significant investment in technology to
We manage our market risk by diversifying exposures,
monitor market risk including:
controlling position sizes and establishing economic hedges
in related securities or derivatives. This includes: ‰ an independent calculation of VaR and stress measures;
‰ accurate and timely exposure information incorporating ‰ risk measures calculated at individual position levels;
multiple risk metrics;
‰ attribution of risk measures to individual risk factors of
‰ a dynamic limit setting framework; and each position;
‰ constant communication among revenue-producing ‰ the ability to report many different views of the risk
units, risk managers and senior management. measures (e.g., by desk, business, product type or legal
entity); and
Market Risk Management, which is independent of the
revenue-producing units and reports to the firm’s chief risk ‰ the ability to produce ad hoc analyses in a timely
officer, has primary responsibility for assessing, monitoring manner.
and managing market risk at the firm. We monitor and
control risks through strong firmwide oversight and
independent control and support functions across the firm’s
global businesses.

Value-at-Risk Stress Testing

VaR is the potential loss in value of inventory positions due We use stress testing to examine risks of specific portfolios
to adverse market movements over a defined time horizon as well as the potential impact of significant risk exposures
with a specified confidence level. We typically employ a across the firm. We use a variety of scenarios to calculate
one-day time horizon with a 95% confidence level. The the potential loss from a wide range of market moves on the
VaR model captures risks including interest rates, equity firm’s portfolios. These scenarios include the default of
prices, currency rates and commodity prices. As such, VaR single corporate or sovereign entities, the impact of a move
facilitates comparison across portfolios of different risk in a single risk factor across all positions (e.g., equity prices
characteristics. VaR also captures the diversification of or credit spreads) or a combination of two or more risk
aggregated risk at the firmwide level. factors.
We are aware of the inherent limitations to VaR and Unlike VaR measures, which have an implied probability
therefore use a variety of risk measures in our market risk because they are calculated at a specified confidence level,
management process. Inherent limitations to VaR include: there is generally no implied probability that our stress test
scenarios will occur. Instead, stress tests are used to model
‰ VaR does not estimate potential losses over longer time
both moderate and more extreme moves in underlying
horizons where moves may be extreme.
market factors. When estimating potential loss, we
‰ VaR does not take account of the relative liquidity of generally assume that our positions cannot be reduced or
different risk positions. hedged (although experience demonstrates that we are
generally able to do so).
‰ Previous moves in market risk factors may not produce
accurate predictions of all future market moves. Stress test scenarios are conducted on a regular basis as part
of the firm’s routine risk management process and on an ad
When calculating VaR, we use historical simulations with
hoc basis in response to market events or concerns. Stress
full valuation of approximately 70,000 market factors. The
testing is an important part of the firm’s risk management
historical data used in our VaR calculation is weighted to
process because it allows us to highlight potential loss
give greater importance to more recent observations and
concentrations, undertake risk/reward analysis, and assess
reflect current asset volatilities. This improves the accuracy
and mitigate our risk positions.
of our estimates of potential loss. As a result, even if our
inventory positions were unchanged, our VaR would Limits
increase with increasing market volatility and vice versa. We use risk limits at various levels in the firm (including
firmwide, product and business) to govern risk appetite by
Given its reliance on historical data, VaR is most effective in
controlling the size of our exposures to market risk. Limits
estimating risk exposures in markets in which there are no
are reviewed frequently and amended on a permanent or
sudden fundamental changes or shifts in market conditions.
temporary basis to reflect changing market conditions,
We evaluate the accuracy of our VaR model through daily business conditions or tolerance for risk.
backtesting (i.e., comparing daily trading net revenues to
The Firmwide Risk Committee sets market risk limits at
the VaR measure calculated as of the prior business day) at
firmwide and product levels and our Securities Division
the firmwide level and for each of our businesses and major
Risk Committee sets sub-limits for market-making and
regulated subsidiaries.
investing activities at a business level. The purpose of the
Our VaR measure does not include: firmwide limits is to assist senior management in
controlling the firm’s overall risk profile. Sub-limits set the
‰ positions that are best measured and monitored using
desired maximum amount of exposure that may be
sensitivity measures; and
managed by any particular business on a day-to-day basis
‰ the impact of changes in counterparty and our own without additional levels of senior management approval,
credit spreads on derivatives as well as changes in our effectively leaving day-to-day trading decisions to
own credit spreads on unsecured borrowings for which individual desk managers and traders. Accordingly,
the fair value option was elected. sub-limits are a management tool designed to ensure
appropriate escalation rather than to establish maximum
risk tolerance. Sub-limits also distribute risk among various
businesses in a manner that is consistent with their level of
activity and client demand, taking into account the relative
performance of each area.

Our market risk limits are monitored daily by Market Risk Year-End VaR and High and Low VaR
Management, which is responsible for identifying and
escalating, on a timely basis, instances where limits have Year Ended
As of December December 2011
been exceeded. The business-level limits that are set by the in millions
Securities Division Risk Committee are subject to the same Risk Categories 2011 2010 High Low
scrutiny and limit escalation policy as the firmwide limits. Interest rates $100 $ 78 $147 $69
Equity prices 31 51 119 14
When a risk limit has been exceeded (e.g., due to changes in Currency rates 14 27 31 10
market conditions, such as increased volatilities or changes in Commodity prices 23 25 53 20
correlations), it is reported to the appropriate risk committee Diversification effect 1 (69) (70)
and a discussion takes place with the relevant desk managers, Total $ 99 $111 $169 $82
after which either the risk position is reduced or the risk limit is 1. Equals the difference between total VaR and the sum of the VaRs for the
temporarily or permanently increased. four risk categories. This effect arises because the four market risk
categories are not perfectly correlated.
Metrics
Our daily VaR decreased to $99 million as of December 2011
We analyze VaR at the firmwide level and a variety of more
from $111 million as of December 2010, primarily reflecting
detailed levels, including by risk category, business, and
decreases in the equity prices and currency rates categories,
region. The tables below present average daily VaR and
principally due to reduced exposures. These decreases were
year-end VaR by risk category.
partially offset by an increase in the interest rates category,
Average Daily VaR primarily due to higher levels of volatility and wider credit
spreads.
Year Ended December
in millions
During the year ended December 2011, the firmwide VaR
Risk Categories 2011 2010 2009
risk limit was exceeded on one occasion. It was resolved by
Interest rates $ 94 $ 93 $176
a temporary increase in the firmwide VaR risk limit, which
Equity prices 33 68 66
was subsequently made permanent due to higher levels of
Currency rates 20 32 36
Commodity prices 32 33 36
volatility. The firmwide VaR risk limit had previously been
Diversification effect 1 (66) (92) (96) reduced on one occasion in 2011, reflecting lower risk
Total $113 $134 $218 utilization and the market environment.
1. Equals the difference between total VaR and the sum of the VaRs for the During the year ended December 2010, the firmwide VaR
four risk categories. This effect arises because the four market risk
categories are not perfectly correlated.
risk limit was exceeded on one occasion in order to
facilitate a client transaction and was resolved by a
Our average daily VaR decreased to $113 million in 2011 reduction in the risk position on the following day.
from $134 million in 2010, primarily reflecting decreases in Separately, during the year ended December 2010, the
the equity prices and currency rates categories, principally due firmwide VaR risk limit was reduced on one occasion
to reduced exposures. These decreases were partially offset by reflecting lower risk utilization.
a decrease in the diversification benefit across risk categories.
Our average daily VaR decreased to $134 million in 2010
from $218 million in 2009, principally due to a decrease in the
interest rates category which was primarily due to reduced
exposures, lower levels of volatility and tighter spreads.

The chart below reflects the VaR over the last four quarters.
Daily VaR
$ in millions
200
180
160
140
Daily Trading VaR
120
100
80
60
40
20
0
First Quarter Second Quarter Third Quarter Fourth Quarter
2011 2011 2011 2011
The chart below presents the frequency distribution inventory positions included in VaR for the year
of our daily trading net revenues for substantially all ended December 2011.
Daily Trading Net Revenues

$ in millions
80
60
54
Number of Days
43
40 38
34
29
21
20 18
7
4 4
0
<(100) (100)-(75) (75)-(50) (50)-(25) (25)-0 0-25 25-50 50-75 75-100 >100
Daily Trading Net Revenues
Daily trading net revenues are compared with VaR one-day VaR (i.e., a VaR exception) on three occasions
calculated as of the end of the prior business day. The firm during 2011 and on two occasions during 2010.
incurred trading losses on a single day in excess of our 95%

During periods in which the firm has significantly more The firm engages in insurance activities where we reinsure and
positive net revenue days than net revenue loss days, we purchase portfolios of insurance risk and pension liabilities.
expect to have fewer VaR exceptions because, under The risks associated with these activities include, but are not
normal conditions, our business model generally produces limited to: equity, interest rate, reinvestment and mortality
positive net revenues. In periods in which our franchise risk. The firm mitigates risks associated with insurance
revenues are adversely affected, we generally have more loss activities through the use of reinsurance and hedging. Certain
days, resulting in more VaR exceptions. In addition, VaR of the assets associated with the firm’s insurance activities are
backtesting is performed against total daily market-making included in VaR. In addition to the positions included in VaR
revenues, including bid/offer net revenues which are more we held $4.86 billion of securities accounted for as
likely than not to be positive by their nature. available-for-sale as of December 2011, substantially all of
which support the firm’s insurance subsidiaries. As of
Sensitivity Measures
December 2011, our available-for-sale securities primarily
Certain portfolios and individual positions are not included
consisted of $1.81 billion of corporate debt securities with an
in VaR because VaR is not the most appropriate risk
average yield of 5%, the majority of which will mature after
measure. The market risk of these positions is determined
five years, $1.42 billion of mortgage and other asset-backed
by estimating the potential reduction in net revenues of a
loans and securities with an average yield of 10%, the majority
10% decline in the underlying asset value.
of which will mature after ten years, and $662 million of U.S.
The table below presents market risk for positions that are government and federal agency obligations with an average
not included in VaR. These measures do not reflect yield of 3%, the majority of which will mature after ten years.
diversification benefits across asset categories and therefore As of December 2010, we held $3.67 billion of securities
have not been aggregated. accounted for as available-for-sale primarily consisting of
$1.69 billion of corporate debt securities with an average yield
Asset Categories 10% Sensitivity of 6%, the majority of which will mature after five years,
Amount as of December $670 million of mortgage and other asset-backed loans and
securities with an average yield of 11%, which will mature
ICBC 1 $ 212 $ 286 after ten years, and $637 million of U.S. government and
Equity (excluding ICBC) 2 2,458 2,529 federal agency obligations with an average yield of 4%, the
Debt 3 1,521 1,655
majority of which will mature after ten years.
1. Excludes third-party interests held by investment funds managed by
Goldman Sachs. In addition, as of December 2011 and December 2010, we
2. Relates to private and restricted public equity securities, including interests in
had commitments and held loans under the William Street
firm-sponsored funds that invest in corporate equities and real estate and credit extension program. As of December 2010, we also
interests in firm-sponsored hedge funds. held money market instruments under this program. See
3. Relates to corporate bank debt, loans backed by commercial and residential Note 18 to the consolidated financial statements for further
real estate, and other corporate debt, including acquired portfolios of
distressed loans and interests in our firm-sponsored funds that invest in
information about our William Street credit extension
corporate mezzanine and senior debt instruments. program.
VaR excludes the impact of changes in counterparty and Additionally, we make investments accounted for under the
our own credit spreads on derivatives as well as changes in equity method and we also make direct investments in real
our own credit spreads on unsecured borrowings for which estate, both of which are included in “Other assets” in the
the fair value option was elected. The estimated sensitivity consolidated statements of financial condition. Direct
to a one basis point increase in credit spreads (counterparty investments in real estate are accounted for at cost less
and our own) on derivatives was a $4 million gain as of accumulated depreciation. See Note 12 to the consolidated
December 2011. In addition, the estimated sensitivity to a financial statements for information on “Other assets.”
one basis point increase in our own credit spreads on
unsecured borrowings for which the fair value option was
elected was a $7 million gain (including hedges) as of
December 2011. However, the actual net impact of a
change in our own credit spreads is also affected by the
liquidity, duration and convexity (as the sensitivity is not
linear to changes in yields) of those unsecured borrowings
for which the fair value option was elected, as well as the
relative performance of any hedges undertaken.

Credit Risk Management

Overview ‰ use of credit risk mitigants, including collateral and
Credit risk represents the potential for loss due to the hedging; and
default or deterioration in credit quality of a counterparty
‰ communication and collaboration with other independent
(e.g., an OTC derivatives counterparty or a borrower) or an
control and support functions such as operations, legal
issuer of securities or other instruments we hold. Our
and compliance.
exposure to credit risk comes mostly from client
transactions in OTC derivatives and loans and lending As part of the risk assessment process, Credit Risk
commitments. Credit risk also comes from cash placed with Management performs credit reviews which include initial
banks, securities financing transactions (i.e., resale and and ongoing analyses of our counterparties. A credit review
repurchase agreements and securities borrowing and is an independent judgment about the capacity and
lending activities) and receivables from brokers, dealers, willingness of a counterparty to meet its financial
clearing organizations, customers and counterparties. obligations. For substantially all of our credit exposures,
the core of our process is an annual counterparty review. A
Credit Risk Management, which is independent of the
counterparty review is a written analysis of a counterparty’s
revenue-producing units and reports to the firm’s chief risk
business profile and financial strength resulting in an
officer, has primary responsibility for assessing, monitoring
internal credit rating which represents the probability of
and managing credit risk at the firm. The Credit Policy
default on financial obligations to the firm. The
Committee and the Firmwide Risk Committee establish and
determination of internal credit ratings incorporates
review credit policies and parameters. In addition, we hold
assumptions with respect to the counterparty’s future
other positions that give rise to credit risk (e.g., bonds held
business performance, the nature and outlook for the
in our inventory and secondary bank loans). These credit
counterparty’s industry, and the economic environment.
risks are captured as a component of market risk measures,
Senior personnel within Credit Risk Management, with
which are monitored and managed by Market Risk
expertise in specific industries, inspect and approve credit
Management, consistent with other inventory positions.
reviews and internal credit ratings.
Policies authorized by the Firmwide Risk Committee and
Our global credit risk management systems capture credit
the Credit Policy Committee prescribe the level of formal
exposure to individual counterparties and on an aggregate
approval required for the firm to assume credit exposure to
basis to counterparties and their subsidiaries (economic
a counterparty across all product areas, taking into account
groups). These systems also provide management with
any enforceable netting provisions, collateral or other credit
comprehensive information on our aggregate credit risk by
risk mitigants.
product, internal credit rating, industry, country and
Credit Risk Management Process region.
Effective management of credit risk requires accurate and
Risk Measures and Limits
timely information, a high level of communication and
We measure our credit risk based on the potential loss in an
knowledge of customers, countries, industries and
event of non-payment by a counterparty. For derivatives
products. Our process for managing credit risk includes:
and securities financing transactions, the primary measure
‰ approving transactions and setting and communicating is potential exposure, which is our estimate of the future
credit exposure limits; exposure that could arise over the life of a transaction based
on market movements within a specified confidence level.
‰ monitoring compliance with established credit exposure
Potential exposure takes into account netting and collateral
limits;
arrangements. For loans and lending commitments, the
‰ assessing the likelihood that a counterparty will default primary measure is a function of the notional amount of the
on its payment obligations; position. We also monitor credit risk in terms of current
exposure, which is the amount presently owed to the firm
‰ measuring the firm’s current and potential credit
after taking into account applicable netting and collateral.
exposure and losses resulting from counterparty default;
‰ reporting of credit exposures to senior management, the
Board and regulators;

We use credit limits at various levels (counterparty, For loans and lending commitments, we typically employ a
economic group, industry, country) to control the size of variety of potential risk mitigants, depending on the credit
our credit exposures. Limits for counterparties and quality of the borrower and other characteristics of the
economic groups are reviewed regularly and revised to transaction. Risk mitigants include: collateral provisions,
reflect changing appetites for a given counterparty or group guarantees, covenants, structural seniority of the bank loan
of counterparties. Limits for industries and countries are claims and, for certain lending commitments, provisions in
based on the firm’s risk tolerance and are designed to allow the legal documentation that allow the firm to adjust loan
for regular monitoring, review, escalation and management amounts, pricing, structure and other terms as market
of credit risk concentrations. conditions change. The type and structure of risk mitigants
employed can significantly influence the degree of credit
Stress Tests/Scenario Analysis
risk involved in a loan.
We use regular stress tests to calculate the credit exposures,
including potential concentrations that would result from When we do not have sufficient visibility into a counterparty’s
applying shocks to counterparty credit ratings or credit risk financial strength or when we believe a counterparty requires
factors (e.g., currency rates, interest rates, equity prices). These support from its parent company, we may obtain third-party
shocks include a wide range of moderate and more extreme guarantees of the counterparty’s obligations. We may also
market movements. Some of our stress tests include shocks to mitigate our credit risk using credit derivatives or participation
multiple risk factors, consistent with the occurrence of a severe agreements.
market or economic event (e.g., sovereign debt default). Unlike
Credit Exposures
potential exposure, which is calculated within a specified
The firm’s credit exposures are described further below.
confidence level, with a stress test there is generally no assumed
probability of these events occurring. Cash and Cash Equivalents. Cash and cash equivalents
include both interest-bearing and non-interest bearing
We run stress tests on a regular basis as part of our routine
deposits. To mitigate the risk of credit loss, we place
risk management processes and conduct tailored stress tests
substantially all of our deposits with highly rated banks and
on an ad hoc basis in response to market developments.
central banks.
Stress tests are regularly conducted jointly with the firm’s
market and liquidity risk functions. OTC Derivatives. Derivatives are reported on a
net-by-counterparty basis (i.e., the net payable or
Risk Mitigants
receivable for derivative assets and liabilities for a given
To reduce our credit exposures on derivatives and securities
counterparty) when a legal right of setoff exists under an
financing transactions, we may enter into netting
enforceable netting agreement.
agreements with counterparties that permit us to offset
receivables and payables with such counterparties. We may Derivatives are accounted for at fair value net of cash
also reduce credit risk with counterparties by entering into collateral received or posted under credit support
agreements that enable us to obtain collateral from them on agreements. As credit risk is an essential component of fair
an upfront or contingent basis and/or to terminate value, the firm includes a credit valuation adjustment
transactions if the counterparty’s credit rating falls below a (CVA) in the fair value of derivatives to reflect counterparty
specified level. credit risk, as described in Note 7 to the consolidated
financial statements. CVA is a function of the present value
of expected exposure, the probability of counterparty
default and the assumed recovery upon default.

The tables below present the distribution of our exposure to enforceable netting agreements, and cash collateral received
OTC derivatives by tenor, based on expected duration for is netted under credit support agreements. Receivable and
mortgage-related credit derivatives and generally on payable balances with the same counterparty in the same
remaining contractual maturity for other derivatives, both tenor category are netted within such tenor category. The
before and after the effect of collateral and netting categories shown reflect our internally determined public
agreements. Receivable and payable balances for the same rating agency equivalents.
counterparty across tenor categories are netted under
As of December 2011
Exposure
in millions 0 - 12 1-5 5 Years Net of
Credit Rating Equivalent Months Years or Greater Total Netting Exposure Collateral
AAA/Aaa $ 727 $ 786 $ 2,297 $ 3,810 $ (729) $ 3,081 $ 2,770
AA/Aa2 4,661 10,198 28,094 42,953 (22,972) 19,981 12,954
A/A2 17,704 36,553 50,787 105,044 (73,873) 31,171 17,109
BBB/Baa2 7,376 14,222 25,612 47,210 (36,214) 10,996 6,895
BB/Ba2 or lower 2,896 4,497 6,597 13,990 (6,729) 7,261 4,527
Unrated 752 664 391 1,807 (149) 1,658 1,064
Total $34,116 $66,920 $113,778 $214,814 $(140,666) $74,148 $45,319
As of December 2010
Exposure
in millions 0 - 12 1-5 5 Years Net of
Credit Rating Equivalent Months Years or Greater Total Netting Exposure Collateral
AAA/Aaa $ 504 $ 728 $ 2,597 $ 3,829 $ (491) $ 3,338 $ 3,088
AA/Aa2 5,234 8,875 15,579 29,688 (18,167) 11,521 6,935
A/A2 13,556 38,522 49,568 101,646 (74,650) 26,996 16,839
BBB/Baa2 3,818 18,062 19,625 41,505 (27,832) 13,673 8,182
BB/Ba2 or lower 3,583 5,382 3,650 12,615 (4,553) 8,062 5,439
Unrated 709 1,081 332 2,122 (20) 2,102 1,539
Total $27,404 $72,650 $91,351 $191,405 $(125,713) $65,692 $42,022

Lending Activities. We manage the firm’s traditional Credit Exposures

credit origination activities, including funded loans, lending During the year ended December 2011, our credit
commitments and the William Street credit extension exposures increased, reflecting growth in lending activity
program, using the credit risk process, measures and limits and OTC derivatives, and increased cash balances. While
described above. Other lending positions, including credit spreads widened during the year ended
secondary trading positions, are risk-managed as a December 2011, the percentage of our credit exposure
component of market risk. arising from non-investment-grade counterparties (based
on our internally determined public rating agency
Other Credit Exposures. The firm is exposed to credit risk
equivalents) was essentially unchanged from
from its receivables from brokers, dealers and clearing
December 2010. Counterparty defaults and the associated
organizations and customers and counterparties. Receivables
credit losses have remained at low levels during the year
from brokers, dealers and clearing organizations are
ended December 2011 as compared with the same prior
primarily comprised of initial margin placed with clearing
year period.
organizations and receivables related to sales of securities
which have traded, but not yet settled. These receivables have The tables below present the firm’s credit exposures related
minimal credit risk due to the low probability of clearing to cash, OTC derivatives, and loans and lending
organization default and the short-term nature of receivables commitments associated with traditional credit origination
related to securities settlements. Receivables from customers activities broken down by industry, region and internal
and counterparties are generally comprised of collateralized credit rating.
receivables related to customer securities transactions and
have minimal credit risk due to both the value of the
collateral received and the short-term nature of these
receivables.

Credit Exposure by Industry
Loans and Lending

Cash OTC Derivatives Commitments 1
As of December As of December As of December
in millions 2011 2010 2011 2010 2011 2010
Asset Managers & Funds $ 64 $ — $10,582 $ 8,760 $ 1,290 $ 1,317
Banks, Brokers & Other Financial Institutions 12,535 11,020 25,041 23,255 3,591 3,485
Consumer Products, Non-Durables, and Retail 11 — 1,031 1,082 12,685 8,141
Government & Central Banks 43,389 28,766 16,642 11,705 1,828 1,370
Healthcare & Education — — 2,962 2,161 7,158 5,754
Insurance — 1 2,828 2,462 2,891 3,054
Natural Resources & Utilities — — 4,803 5,259 14,795 11,021
Real Estate — — 327 528 2,695 1,523
Technology, Media, Telecommunications & Services 2 1 2,124 1,694 12,646 7,690
Transportation — — 1,104 962 5,753 3,822
Other 7 — 6,704 7,824 5,759 6,007
Total 2 $56,008 $39,788 $74,148 $65,692 $71,091 $53,184
Credit Exposure by Region
Loans and Lending

in millions 2011 2010 2011 2010 2011 2010
Americas $48,543 $34,528 $36,591 $34,468 $52,755 $38,151
EMEA 3 1,800 810 29,549 23,396 16,989 14,451
Asia 5,665 4,450 8,008 7,828 1,347 582
Total 2 $56,008 $39,788 $74,148 $65,692 $71,091 $53,184
Credit Exposure by Credit Quality
Loans and Lending

in millions 2011 2010 2011 2010 2011 2010
Credit Rating Equivalent

AAA/Aaa $40,559 $27,851 $ 3,081 $ 3,338 $ 2,192 $ 1,783
AA/Aa2 7,463 4,547 19,981 11,521 7,026 5,273
A/A2 6,464 5,603 31,171 26,996 21,055 15,766
BBB/Baa2 195 1,007 10,996 13,673 22,937 17,544
BB/Ba2 or lower 1,209 764 7,261 8,062 17,820 12,774
Unrated 118 16 1,658 2,102 61 44
Total 2 $56,008 $39,788 $74,148 $65,692 $71,091 $53,184
1. Includes approximately $10 billion and $4 billion of loans as of December 2011 and December 2010, respectively, and approximately $61 billion and $49 billion of lending
commitments as of December 2011 and December 2010, respectively. Excludes approximately $10 billion and $14 billion of loans as of December 2011 and December 2010,
respectively, and lending commitments with a total notional value of approximately $5 billion and $3 billion as of December 2011 and December 2010, respectively, that are risk
managed as part of market risk using VaR and sensitivity measures.
2. The firm bears credit risk related to resale agreements and securities borrowed only to the extent that cash advanced to the counterparty exceeds the value of the
collateral received. The firm also has credit exposure on repurchase agreements and securities loaned to the extent that the value of securities pledged or delivered
to the counterparty for these transactions exceeds the amount of cash or collateral received. We had approximately $41 billion and $31 billion as of December 2011
and December 2010, respectively, in credit exposure related to securities financing transactions reflecting enforceable netting agreements.
3. EMEA (Europe, Middle East and Africa).

Selected Country Exposures

During 2011 and continuing into 2012, there have been addition, the table includes the market exposure of our long
concerns about European sovereign debt risk and its impact and short inventory in which the issuer or underlier is
on the European banking system and a number of located in these countries.
European member states have been experiencing significant
The country of risk is determined by the location of the
credit deterioration. The most pronounced market concerns
counterparty, issuer or underlier’s assets, where they generate
relate to Greece, Ireland, Italy, Portugal and Spain. The
revenue, the country in which they are headquartered, and/or
table below presents our credit exposure (both gross and
the government whose policies affect their ability to repay their
net of hedges) to all sovereigns, financial institutions and
obligations.
corporate counterparties or borrowers in these countries. In
As of December 2011
Credit Exposure Market Exposure
Total
Net Funded Unfunded Total Equities Total
OTC Gross Credit Credit Credit and Credit Market
in billions Loans Derivatives Other Funded Hedges Exposure Exposure Exposure Bonds Other Derivatives Exposure
Greece
Sovereign $ — $ — $ — $ — $ — $ — $ — $ — $0.33 $ — $(0.02) $0.31
Non-Sovereign 0.02 0.05 — 0.07 — 0.07 — 0.07 0.03 0.01 0.02 0.06
Total Greece 0.02 0.05 — 0.07 — 0.07 — 0.07 0.36 0.01 — 0.37
Ireland
Sovereign — — 0.25 0.25 — 0.25 — 0.25 0.41 — (0.35) 0.06
Non-Sovereign — 0.54 0.07 0.61 (0.01) 0.60 0.06 0.66 0.41 0.09 0.11 0.61
Total Ireland — 0.54 0.32 0.86 (0.01) 0.85 0.06 0.91 0.82 0.09 (0.24) 0.67
Italy
Sovereign — 1.67 — 1.67 (1.41) 0.26 — 0.26 0.21 — 0.20 0.41
Non-Sovereign 0.13 0.45 — 0.58 (0.02) 0.56 0.40 0.96 0.19 0.30 (0.90) (0.41)
Total Italy 0.13 2.12 — 2.25 (1.43) 0.82 0.40 1.22 0.40 0.30 (0.70) —
Portugal
Sovereign — 0.15 — 0.15 — 0.15 — 0.15 (0.10) — 0.02 (0.08)
Non-Sovereign — 0.06 — 0.06 — 0.06 — 0.06 0.23 0.01 (0.18) 0.06
Total Portugal — 0.21 — 0.21 — 0.21 — 0.21 0.13 0.01 (0.16) (0.02)
Spain
Sovereign — 0.09 — 0.09 — 0.09 — 0.09 0.15 — (0.55) (0.40)
Non-Sovereign 0.15 0.25 0.02 0.42 (0.14) 0.28 0.15 0.43 0.35 0.24 (0.63) (0.04)
Total Spain 0.15 0.34 0.02 0.51 (0.14) 0.37 0.15 0.52 0.50 0.24 (1.18) (0.44)
Subtotal $0.30 $3.26 1 $0.34 $3.90 1 $(1.58) $2.32 $0.61 $2.93 $2.21 $0.65 $(2.28) 2 $0.58
1. Includes the benefit of $6.5 billion of cash and U.S. Treasury securities collateral and excludes non-U.S. government and corporate securities collateral of
$341 million.
2. Includes written and purchased credit derivative notionals reduced by the fair values of such credit derivatives.
We economically hedge our exposure to written credit $147.3 billion and $142.4 billion, respectively. Including
derivatives by entering into offsetting purchased credit netting under legally enforceable netting agreements, within
derivatives with identical underlyings. Where possible, we each and across all of the countries above, the purchased
endeavor to match the tenor and credit default terms of and written credit derivative notionals for single-name
such hedges to that of our written credit derivatives. credit default swaps were $21.1 billion and $16.2 billion,
Substantially all purchased credit derivatives included respectively. These notionals are not representative of our
above are bought from investment-grade counterparties exposure because they exclude available netting under
domiciled outside of these countries and are collateralized legally enforceable netting agreements on other derivatives
with cash or U.S. Treasury securities. The gross purchased outside of these countries and collateral received or posted
and written credit derivative notionals across the above under credit support agreements.
countries for single-name credit default swaps were

For information about the nature of or payout under trigger department (Operational Risk Management) is a risk
events related to written and purchased credit protection management function independent of our revenue-producing
contracts see Note 7 to the consolidated financial units, reports to the firm’s chief risk officer, and is responsible
statements. for developing and implementing policies, methodologies and a
formalized framework for operational risk management with
We evaluate and monitor the effects of indirect exposure from
the goal of minimizing our exposure to operational risk.
these countries. See “Liquidity Risk Management — Modeled
Liquidity Outflow,” “Market Risk Management — Stress Operational Risk Management Process
Testing” and “Credit Risk Management — Stress Tests/ Managing operational risk requires timely and accurate
Scenario Analysis” for further discussion. information as well as a strong control culture. We seek to
manage our operational risk through:
On January 13, 2012, Standard & Poor’s Ratings Services
lowered the sovereign debt ratings on Italy from A to BBB+, ‰ the training, supervision and development of our people;
Portugal from BBB- to BB, and Spain from AA- to A. On
‰ the active participation of senior management in
January 27, 2012, Fitch, Inc. lowered the sovereign debt
identifying and mitigating key operational risks across the
ratings on Italy from A+ to A-, and Spain from AA- to A.
firm;
On February 13, 2012, Moody’s Investors Service lowered
the sovereign debt ratings on Italy from A2 to A3, Portugal ‰ independent control and support functions that monitor
from Ba2 to Ba3, and Spain from A1 to A3. On operational risk on a daily basis and have instituted
February 22, 2012, Fitch, Inc. lowered the sovereign debt extensive policies and procedures and implemented
ratings on Greece from CCC to C. These downgrades did controls designed to prevent the occurrence of operational
not have a material effect on our financial condition, results risk events;
of operations, liquidity or capital resources.
‰ proactive communication between our revenue-producing
units and our independent control and support functions;
and
Operational Risk Management
‰ a network of systems throughout the firm to facilitate
Overview the collection of data used to analyze and assess our
Operational risk is the risk of loss resulting from inadequate operational risk exposure.
or failed internal processes, people and systems or from
external events. Our exposure to operational risk arises from We combine top-down and bottom-up approaches to manage
routine processing errors as well as extraordinary incidents, and measure operational risk. From a top-down perspective,
such as major systems failures. Potential types of loss events the firm’s senior management assesses firmwide and business
related to internal and external operational risk include: level operational risk profiles. From a bottom-up perspective,
revenue-producing units and independent control and support
‰ clients, products and business practices; functions are responsible for risk management on a day-to-day
‰ execution, delivery and process management; basis, including identifying, mitigating, and escalating
operational risks to senior management.
‰ business disruption and system failures;
Our operational risk framework is in part designed to
‰ employment practices and workplace safety; comply with the operational risk measurement rules under
‰ damage to physical assets; Basel 2 and has evolved based on the changing needs of our
businesses and regulatory guidance. Our framework
‰ internal fraud; and includes the following practices:
‰ external fraud. ‰ Risk identification and reporting;
The firm maintains a comprehensive control framework ‰ Risk measurement; and
designed to provide a well-controlled environment to minimize
operational risks. The Firmwide Operational Risk Committee, ‰ Risk monitoring.
along with the support of regional or entity-specific working Internal Audit performs a review of our operational risk
groups or committees, provides oversight of the ongoing framework, including our key controls, processes and
development and implementation of our operational risk applications, on an annual basis to ensure the effectiveness
policies and framework. Our Operational Risk Management of our framework.

Risk Identification and Reporting The results from these scenario analyses are used to
The core of our operational risk management framework is monitor changes in operational risk and to determine
risk identification and reporting. We have a comprehensive business lines that may have heightened exposure to
data collection process, including firmwide policies and operational risk. These analyses ultimately are used to
procedures, for operational risk events. determine the appropriate level of operational risk capital
to hold.
We have established policies that require managers in our
revenue-producing units and our independent control and Risk Monitoring
support functions to escalate operational risk events. When We evaluate changes in the operational risk profile of the
operational risk events are identified, our policies require firm and its businesses, including changes in business mix
that the events be documented and analyzed to determine or jurisdictions in which the firm operates, by monitoring
whether changes are required in the firm’s systems and/or these factors at a firmwide, entity and business level. The
processes to further mitigate the risk of future events. firm has both detective and preventive internal controls,
which are designed to reduce the frequency and severity of
In addition, our firmwide systems capture internal
operational risk losses and the probability of operational
operational risk event data, key metrics such as transaction
risk events. We monitor the results of assessments and
volumes, and statistical information such as performance
independent internal audits of these internal controls.
trends. We use an internally-developed operational risk
management application to aggregate and organize this
information. Managers from both revenue-producing units
and independent control and support functions analyze the Recent Accounting Developments
information to evaluate operational risk exposures and See Note 3 to the consolidated financial statements for
identify businesses, activities or products with heightened information about Recent Accounting Developments.
levels of operational risk. We also provide operational risk
reports to senior management, risk committees and the
Board periodically. Certain Risk Factors That May Affect Our
Risk Measurement Businesses
We measure the firm’s operational risk exposure over a We face a variety of risks that are substantial and inherent
twelve-month time horizon using both statistical modeling in our businesses, including market, liquidity, credit,
and scenario analyses, which involve qualitative operational, legal, regulatory and reputational risks. For a
assessments of the potential frequency and extent of discussion of how management seeks to manage some of
potential operational risk losses, for each of the firm’s these risks, see “Overview and Structure of Risk
businesses. Operational risk measurement incorporates Management.” A summary of the more important factors
qualitative and quantitative assessments of factors that could affect our businesses follows. For a further
including: discussion of these and other important factors that could
‰ internal and external operational risk event data; affect our businesses, financial condition, results of
operations, cash flows and liquidity, see “Risk Factors” in
‰ assessments of the firm’s internal controls; Part I, Item 1A of our Annual Report on Form 10-K.
‰ evaluations of the complexity of the firm’s business ‰ Our businesses have been and may continue to be
activities; adversely affected by conditions in the global financial
‰ the degree of and potential for automation in the firm’s markets and economic conditions generally.
processes; ‰ Our businesses have been and may be adversely affected
‰ new product information; by declining asset values. This is particularly true for
those businesses in which we have net “long” positions,
‰ the legal and regulatory environment; receive fees based on the value of assets managed, or
‰ changes in the markets for the firm’s products and receive or post collateral.
services, including the diversity and sophistication of the ‰ Our businesses have been and may be adversely affected
firm’s customers and counterparties; and by disruptions in the credit markets, including reduced
‰ the liquidity of the capital markets and the reliability of access to credit and higher costs of obtaining credit.
the infrastructure that supports the capital markets.

‰ Our market-making activities have been and may be ‰ Our businesses may be adversely affected if we are
affected by changes in the levels of market volatility. unable to hire and retain qualified employees.
‰ Our investment banking, client execution and investment ‰ Our businesses and those of our clients are subject to
management businesses have been adversely affected and extensive and pervasive regulation around the world.
may continue to be adversely affected by market uncertainty
‰ We may be adversely affected by increased governmental
or lack of confidence among investors and CEOs due to
and regulatory scrutiny or negative publicity.
general declines in economic activity and other unfavorable
economic, geopolitical or market conditions. ‰ A failure in our operational systems or infrastructure, or
those of third parties, could impair our liquidity, disrupt
‰ Our investment management business may be affected
our businesses, result in the disclosure of confidential
by the poor investment performance of our investment
information, damage our reputation and cause losses.
products.
‰ Substantial legal liability or significant regulatory action
‰ We may incur losses as a result of ineffective risk
against us could have material adverse financial effects
management processes and strategies.
or cause us significant reputational harm, which in turn
‰ Our liquidity, profitability and businesses may be could seriously harm our business prospects.
adversely affected by an inability to access the debt
‰ The growth of electronic trading and the introduction of
capital markets or to sell assets or by a reduction in our
new trading technology may adversely affect our
credit ratings or by an increase in our credit spreads.
business and may increase competition.
‰ Conflicts of interest are increasing and a failure to
‰ Our commodities activities, particularly our power
appropriately identify and address conflicts of interest
generation interests and our physical commodities
could adversely affect our businesses.
activities, subject us to extensive regulation, potential
‰ Group Inc. is a holding company and is dependent for catastrophic events and environmental, reputational and
liquidity on payments from its subsidiaries, many of other risks that may expose us to significant liabilities
which are subject to restrictions. and costs.
‰ Our businesses, profitability and liquidity may be ‰ In conducting our businesses around the world, we are
adversely affected by deterioration in the credit quality subject to political, economic, legal, operational and
of, or defaults by, third parties who owe us money, other risks that are inherent in operating in many
securities or other assets or whose securities or countries.
obligations we hold.
‰ We may incur losses as a result of unforeseen or
‰ Concentration of risk increases the potential for catastrophic events, including the emergence of a
significant losses in our market-making, underwriting, pandemic, terrorist attacks or natural disasters.
investing and lending activities.
‰ The financial services industry is highly competitive.
‰ We face enhanced risks as new business initiatives lead
us to transact with a broader array of clients and
counterparties and expose us to new asset classes and
new markets.
‰ Derivative transactions and delayed settlements may
expose us to unexpected risk and potential losses.

Management’s Report on Internal Control over Financial Reporting
Management of The Goldman Sachs Group, Inc., together Our internal control over financial reporting includes
with its consolidated subsidiaries (the firm), is responsible policies and procedures that pertain to the maintenance of
for establishing and maintaining adequate internal control records that, in reasonable detail, accurately and fairly
over financial reporting. The firm’s internal control over reflect transactions and dispositions of assets; provide
financial reporting is a process designed under the reasonable assurances that transactions are recorded as
supervision of the firm’s principal executive and principal necessary to permit preparation of financial statements in
financial officers to provide reasonable assurance regarding accordance with U.S. generally accepted accounting
the reliability of financial reporting and the preparation of principles, and that receipts and expenditures are being
the firm’s financial statements for external reporting made only in accordance with authorizations of
purposes in accordance with U.S. generally accepted management and the directors of the firm; and provide
accounting principles. reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use or disposition of
As of December 31, 2011, management conducted an
the firm’s assets that could have a material effect on our
assessment of the firm’s internal control over financial
financial statements.
reporting based on the framework established in Internal
Control — Integrated Framework issued by the Committee The firm’s internal control over financial reporting as
of Sponsoring Organizations of the Treadway Commission of December 31, 2011 has been audited by
(COSO). Based on this assessment, management has PricewaterhouseCoopers LLP, an independent registered
determined that the firm’s internal control over financial public accounting firm, as stated in their report
reporting as of December 31, 2011 was effective. appearing on page 99, which expresses an unqualified
opinion on the effectiveness of the firm’s internal control
over financial reporting as of December 31, 2011.

Report of Independent Registered Public Accounting Firm
To the Board of Directors and the Shareholders of

The Goldman Sachs Group, Inc.:
In our opinion, the accompanying consolidated statements A company’s internal control over financial reporting is a
of financial condition and the related consolidated process designed to provide reasonable assurance regarding
statements of earnings, changes in shareholders’ equity, the reliability of financial reporting and the preparation of
cash flows and comprehensive income present fairly, in all financial statements for external purposes in accordance
material respects, the financial position of The Goldman with generally accepted accounting principles. A company’s
Sachs Group, Inc. and its subsidiaries (the Company) at internal control over financial reporting includes those
December 31, 2011 and 2010, and the results of its policies and procedures that (i) pertain to the maintenance
operations and its cash flows for each of the three years in of records that, in reasonable detail, accurately and fairly
the period ended December 31, 2011, in conformity with reflect the transactions and dispositions of the assets of the
accounting principles generally accepted in the United company; (ii) provide reasonable assurance that
States of America. Also in our opinion, the Company transactions are recorded as necessary to permit
maintained, in all material respects, effective internal preparation of financial statements in accordance with
control over financial reporting as of December 31, 2011, generally accepted accounting principles, and that receipts
based on criteria established in Internal Control — and expenditures of the company are being made only in
Integrated Framework issued by the Committee of accordance with authorizations of management and
Sponsoring Organizations of the Treadway Commission directors of the company; and (iii) provide reasonable
(COSO). The Company’s management is responsible for assurance regarding prevention or timely detection of
these financial statements, for maintaining effective internal unauthorized acquisition, use, or disposition of the
control over financial reporting and for its assessment of the company’s assets that could have a material effect on the
effectiveness of internal control over financial reporting, financial statements.
included in Management’s Report on Internal Control over
Because of its inherent limitations, internal control over
Financial Reporting appearing on page 98. Our
financial reporting may not prevent or detect
responsibility is to express opinions on these financial
misstatements. Also, projections of any evaluation of
statements and on the Company’s internal control over
effectiveness to future periods are subject to the risk that
financial reporting based on our audits. We conducted our
controls may become inadequate because of changes in
audits in accordance with the standards of the Public
conditions, or that the degree of compliance with the
Company Accounting Oversight Board (United States).
policies or procedures may deteriorate.
Those standards require that we plan and perform the
audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement and
whether effective internal control over financial reporting
was maintained in all material respects. Our audits of the
financial statements included examining, on a test basis, PricewaterhouseCoopers LLP
evidence supporting the amounts and disclosures in the New York, New York
financial statements, assessing the accounting principles February 28, 2012
used and significant estimates made by management, and
evaluating the overall financial statement presentation. Our
audit of internal control over financial reporting included
obtaining an understanding of internal control over
financial reporting, assessing the risk that a material
weakness exists, and testing and evaluating the design and
operating effectiveness of internal control based on the
assessed risk. Our audits also included performing such
other procedures as we considered necessary in the
circumstances. We believe that our audits provide a
reasonable basis for our opinions.

Consolidated Statements of Earnings
Year Ended December

in millions, except per share amounts 2011 2010 2009
Revenues
Investment banking $ 4,361 $ 4,810 $ 4,984
Investment management 4,691 4,669 4,233
Commissions and fees 3,773 3,569 3,840
Market making 9,287 13,678 22,088
Other principal transactions 1,507 6,932 2,621
Total non-interest revenues 23,619 33,658 37,766
Interest income 13,174 12,309 13,907

Interest expense 7,982 6,806 6,500
Net interest income 5,192 5,503 7,407
Net revenues, including net interest income 28,811 39,161 45,173
Operating expenses
Compensation and benefits 12,223 15,376 16,193
U.K. bank payroll tax — 465 —
Brokerage, clearing, exchange and distribution fees 2,463 2,281 2,298

Market development 640 530 342
Communications and technology 828 758 709
Occupancy 1,030 1,086 950
Professional fees 992 927 678
Insurance reserves 529 398 334
Other expenses 2,072 2,559 2,106
Total non-compensation expenses 10,419 10,428 9,151
Total operating expenses 22,642 26,269 25,344
Pre-tax earnings 6,169 12,892 19,829

Provision for taxes 1,727 4,538 6,444
Net earnings 4,442 8,354 13,385
Preferred stock dividends 1,932 641 1,193
Net earnings applicable to common shareholders $ 2,510 $ 7,713 $12,192
Earnings per common share

Basic $ 4.71 $ 14.15 $ 23.74
Diluted 4.51 13.18 22.13
Average common shares outstanding
Basic 524.6 542.0 512.3
Diluted 556.9 585.3 550.9
The accompanying notes are an integral part of these consolidated financial statements.

Consolidated Statements of Financial Condition
As of December
in millions, except share and per share amounts 2011 2010
Assets
Cash and cash equivalents $ 56,008 $ 39,788
Cash and securities segregated for regulatory and other purposes (includes $42,014 and $36,182 at fair value as of
December 2011 and December 2010, respectively) 64,264 53,731
Collateralized agreements:
Securities purchased under agreements to resell and federal funds sold (includes $187,789 and $188,355 at fair value as
of December 2011 and December 2010, respectively) 187,789 188,355
Securities borrowed (includes $47,621 and $48,822 at fair value as of December 2011 and December 2010,
respectively) 153,341 166,306
Receivables from brokers, dealers and clearing organizations 14,204 10,437
Receivables from customers and counterparties (includes $9,682 and $7,202 at fair value as of December 2011 and
December 2010, respectively) 60,261 67,703
Financial instruments owned, at fair value (includes $53,989 and $51,010 pledged as collateral as of December 2011 and
Other assets 23,152 28,059
Total assets $923,225 $911,332
Liabilities and shareholders’ equity

Deposits (includes $4,526 and $1,975 at fair value as of December 2011 and December 2010, respectively) $ 46,109 $ 38,569
Collateralized financings:
Securities sold under agreements to repurchase, at fair value 164,502 162,345
Securities loaned (includes $107 and $1,514 at fair value as of December 2011 and December 2010, respectively) 7,182 11,212
Other secured financings (includes $30,019 and $31,794 at fair value as of December 2011 and December 2010,
respectively) 37,364 38,377
Payables to brokers, dealers and clearing organizations 3,667 3,234
Payables to customers and counterparties 194,625 187,270
Financial instruments sold, but not yet purchased, at fair value 145,013 140,717
Unsecured short-term borrowings, including the current portion of unsecured long-term borrowings (includes $17,854 and
$22,116 at fair value as of December 2011 and December 2010, respectively) 49,038 47,842
Unsecured long-term borrowings (includes $17,162 and $18,171 at fair value as of December 2011 and
Other liabilities and accrued expenses (includes $9,486 and $2,972 at fair value as of December 2011 and
Total liabilities 852,846 833,976
Commitments, contingencies and guarantees

Shareholders’ equity
Preferred stock, par value $0.01 per share; aggregate liquidation preference of $3,100 and $8,100 as of December 2011
and December 2010, respectively 3,100 6,957
Common stock, par value $0.01 per share; 4,000,000,000 shares authorized, 795,555,310 and 770,949,268 shares issued
as of December 2011 and December 2010, respectively, and 485,467,565 and 507,530,772 shares outstanding as of
December 2011 and December 2010, respectively 8 8
Restricted stock units and employee stock options 5,681 7,706
Nonvoting common stock, par value $0.01 per share; 200,000,000 shares authorized, no shares issued and outstanding — —
Additional paid-in capital 45,553 42,103
Retained earnings 58,834 57,163
Accumulated other comprehensive loss (516) (286)
Stock held in treasury, at cost, par value $0.01 per share; 310,087,747 and 263,418,498 shares as of December 2011 and
December 2010, respectively (42,281) (36,295)
Total shareholders’ equity 70,379 77,356
Total liabilities and shareholders’ equity $923,225 $911,332

Consolidated Statements of Changes in Shareholders’ Equity
Year Ended December

in millions 2011 2010 2009
Preferred stock
Balance, beginning of year $ 6,957 $ 6,957 $ 16,483
Accretion — — 48
Repurchased (3,857) — (9,574)
Balance, end of year 3,100 6,957 6,957
Common stock
Balance, beginning of year 8 8 7
Issued — — 1
Balance, end of year 8 8 8
Restricted stock units and employee stock options
Balance, beginning of year 7,706 6,245 9,463
Issuance and amortization of restricted stock units and employee stock options 2,863 4,137 2,064
Delivery of common stock underlying restricted stock units (4,791) (2,521) (5,206)
Forfeiture of restricted stock units and employee stock options (93) (149) (73)
Exercise of employee stock options (4) (6) (3)
Additional paid-in capital
Issuance of common stock 103 — 5,750
Repurchase of common stock warrants — — (1,100)
Delivery of common stock underlying share-based awards 5,160 3,067 5,708
Cancellation of restricted stock units in satisfaction of withholding tax requirements (1,911) (972) (863)
Excess net tax benefit/(provision) related to share-based awards 138 239 (793)
Cash settlement of share-based compensation (40) (1) (2)
Retained earnings
Net earnings 4,442 8,354 13,385
Dividends and dividend equivalents declared on common stock and restricted stock units (769) (802) (588)
Dividends on preferred stock (2,002) (641) (1,076)
Preferred stock accretion — — (48)
Accumulated other comprehensive income/(loss)
Balance, beginning of year (286) (362) (372)
Currency translation adjustment, net of tax (55) (38) (70)
Pension and postretirement liability adjustments, net of tax (145) 88 (17)
Net unrealized gains/(losses) on available-for-sale securities, net of tax (30) 26 97
Balance, end of year (516) (286) (362)
Stock held in treasury, at cost
Balance, beginning of year (36,295) (32,156) (32,176)
Repurchased (6,051) (4,185) (2) 1
Reissued 65 46 22
Balance, end of year (42,281) (36,295) (32,156)
Total shareholders’ equity $ 70,379 $ 77,356 $ 70,714
1. Relates primarily to repurchases of common stock by a broker-dealer subsidiary to facilitate customer transactions in the ordinary course of business and shares
withheld to satisfy withholding tax requirements.

Consolidated Statements of Cash Flows
Year Ended December

in millions 2011 2010 2009
Cash flows from operating activities
Net earnings $ 4,442 $ 8,354 $ 13,385
Non-cash items included in net earnings
Deferred income taxes 726 1,339 (431)
Share-based compensation 2,849 4,035 2,009
Changes in operating assets and liabilities
Cash and securities segregated for regulatory and other purposes (10,532) (17,094) 76,531
Net receivables from brokers, dealers and clearing organizations (3,780) 201 6,265
Net payables to customers and counterparties 13,027 (5,437) (47,414)
Securities borrowed, net of securities loaned 8,940 19,638 7,033
Securities sold under agreements to repurchase, net of securities purchased under agreements to resell
and federal funds sold 122 (10,092) (146,807)
Financial instruments owned, at fair value 5,085 (9,231) 186,295
Financial instruments sold, but not yet purchased, at fair value 4,243 11,602 (57,010)
Other, net (5,346) (11,376) 7,076
Net cash provided by/(used for) operating activities 21,645 (6,157) 48,875
Cash flows from investing activities
Purchase of property, leasehold improvements and equipment (1,184) (1,227) (1,556)
Proceeds from sales of property, leasehold improvements and equipment 78 72 82
Business acquisitions, net of cash acquired (431) (804) (221)
Proceeds from sales of investments 2,645 1,371 303
Purchase of available-for-sale securities (2,752) (1,885) (2,722)
Proceeds from sales of available-for-sale securities 3,129 2,288 2,553
Net cash provided by/(used for) investing activities 1,485 (185) (1,561)
Cash flows from financing activities
Unsecured short-term borrowings, net (3,780) 1,196 (9,790)
Other secured financings (short-term), net (1,195) 12,689 (10,451)
Proceeds from issuance of other secured financings (long-term) 9,809 5,500 4,767
Repayment of other secured financings (long-term), including the current portion (8,878) (4,849) (6,667)
Proceeds from issuance of unsecured long-term borrowings 29,169 20,231 25,363
Repayment of unsecured long-term borrowings, including the current portion (29,187) (22,607) (29,018)
Derivative contracts with a financing element, net 1,602 1,222 2,168
Deposits, net 7,540 (849) 7,288
Preferred stock repurchased (3,857) — (9,574)
Common stock repurchased (6,048) (4,183) (2)
Dividends and dividend equivalents paid on common stock, preferred stock and restricted stock units (2,771) (1,443) (2,205)
Proceeds from issuance of common stock, including stock option exercises 368 581 6,260
Excess tax benefit related to share-based compensation 358 352 135
Cash settlement of share-based compensation (40) (1) (2)
Net cash provided by/(used for) financing activities (6,910) 7,839 (22,828)
Net increase in cash and cash equivalents 16,220 1,497 24,486
Cash and cash equivalents, beginning of year 39,788 38,291 13,805
Cash and cash equivalents, end of year $ 56,008 $ 39,788 $ 38,291
SUPPLEMENTAL DISCLOSURES:
Cash payments for interest, net of capitalized interest, were $8.05 billion, $6.74 billion and $7.32 billion for the years ended December 2011, December 2010 and
December 2009, respectively.
Cash payments for income taxes, net of refunds, were $1.78 billion, $4.48 billion and $4.78 billion for the years ended December 2011, December 2010 and
Non-cash activities:
During the year ended December 2011, the firm assumed $2.09 billion of debt and issued $103 million of common stock in connection with the acquisition of Goldman
Sachs Australia Pty Ltd (GS Australia), formerly Goldman Sachs & Partners Australia Group Holdings Pty Ltd. During the years ended December 2010 and
December 2009, the firm assumed $90 million and $16 million, respectively, of debt in connection with business acquisitions. In addition, in the first quarter of 2010,
the firm recorded an increase of approximately $3 billion in both assets (primarily financial instruments owned, at fair value) and liabilities (primarily unsecured short-
term borrowings and other liabilities) upon adoption of Accounting Standards Update (ASU) No. 2009-17, “Consolidations (Topic 810) — Improvements to Financial
Reporting by Enterprises Involved with Variable Interest Entities.”

Consolidated Statements of Comprehensive Income
Year Ended December

in millions 2011 2010 2009
Net earnings $4,442 $8,354 $13,385
Currency translation adjustment, net of tax (55) (38) (70)
Pension and postretirement liability adjustments, net of tax (145) 88 (17)
Net unrealized gains/(losses) on available-for-sale securities, net of tax (30) 26 97
Comprehensive income $4,212 $8,430 $13,395

Notes to Consolidated Financial Statements
Note 1. Investing & Lending

Description of Business The firm invests in and originates loans to provide
financing to clients. These investments and loans are
The Goldman Sachs Group, Inc. (Group Inc.), a Delaware typically longer-term in nature. The firm makes
corporation, together with its consolidated subsidiaries investments, directly and indirectly through funds that the
(collectively, the firm), is a leading global investment firm manages, in debt securities, loans, public and private
banking, securities and investment management firm that equity securities, real estate, consolidated investment
provides a wide range of financial services to a substantial entities and power generation facilities.
and diversified client base that includes corporations,
financial institutions, governments and high-net-worth Investment Management
individuals. Founded in 1869, the firm is headquartered in The firm provides investment management services and
New York and maintains offices in all major financial offers investment products (primarily through separately
centers around the world. managed accounts and commingled vehicles, such as
mutual funds and private investment funds) across all
The firm reports its activities in the following four business major asset classes to a diverse set of institutional and
segments: individual clients. The firm also offers wealth advisory
Investment Banking services, including portfolio management and financial
The firm provides a broad range of investment banking counseling, and brokerage and other transaction services to
services to a diverse group of corporations, financial high-net-worth individuals and families.
institutions, investment funds and governments. Services
include advisory assignments with respect to mergers and Note 2.
acquisitions, divestitures, corporate defense activities, risk
Basis of Presentation
management, restructurings and spin-offs, and debt and
equity underwriting of public offerings and private These consolidated financial statements are prepared in
placements, as well as derivative transactions directly accordance with accounting principles generally accepted in
related to these activities. the United States (U.S. GAAP) and include the accounts of
Group Inc. and all other entities in which the firm has a
controlling financial interest. Intercompany transactions
The firm facilitates client transactions and makes markets
and balances have been eliminated.
in fixed income, equity, currency and commodity products,
primarily with institutional clients such as corporates, All references to 2011, 2010 and 2009 refer to the firm’s
financial institutions, investment funds and governments. years ended, or the dates, as the context requires,
The firm also makes markets and clears client transactions December 31, 2011, December 31, 2010 and
on major stock, options and futures exchanges worldwide December 31, 2009, respectively. In connection with
and provides financing, securities lending and prime becoming a bank holding company in 2008, the firm was
brokerage services to institutional clients. required to change its fiscal year-end from November to
December. The beginning of the year ended December 2009
is December 27, 2008. Any reference to a future year refers
to a year ending on December 31 of that year. Certain
reclassifications have been made to previously reported
amounts to conform to the current presentation.

Note 3.
Significant Accounting Policies
The firm’s significant accounting policies include when and Consolidation
how to measure the fair value of assets and liabilities, The firm consolidates entities in which the firm has a
accounting for goodwill and identifiable intangible assets, and controlling financial interest. The firm determines whether
when to consolidate an entity. See Notes 5 through 8 for it has a controlling financial interest in an entity by first
policies on fair value measurements, Note 13 for policies on evaluating whether the entity is a voting interest entity or a
goodwill and identifiable intangible assets, and below and variable interest entity (VIE).
Note 11 for policies on consolidation accounting. All other
Voting Interest Entities. Voting interest entities are
significant accounting policies are either discussed below or
entities in which (i) the total equity investment at risk is
included in the following footnotes:
sufficient to enable the entity to finance its activities
Financial Instruments Owned, at Fair Value and independently and (ii) the equity holders have the power to
Financial Instruments Sold, But Not Yet Purchased, at
direct the activities of the entity that most significantly
Fair Value Note 4
impact its economic performance, the obligation to absorb
Fair Value Measurements Note 5 the losses of the entity and the right to receive the residual
Cash Instruments Note 6 returns of the entity. The usual condition for a controlling
Derivatives and Hedging Activities Note 7
financial interest in a voting interest entity is ownership of a
majority voting interest. If the firm has a majority voting
Fair Value Option Note 8 interest in a voting interest entity, the entity is consolidated.
Collateralized Agreements and Financings Note 9
Variable Interest Entities. A VIE is an entity that lacks
Securitization Activities Note 10 one or more of the characteristics of a voting interest entity.
Variable Interest Entities Note 11 The firm has a controlling financial interest in a VIE when
the firm has a variable interest or interests that provide it
Other Assets Note 12
with (i) the power to direct the activities of the VIE that
Goodwill and Identifiable Intangible Assets Note 13 most significantly impact the VIE’s economic performance
Deposits Note 14 and (ii) the obligation to absorb losses of the VIE or the
Short-Term Borrowings Note 15 right to receive benefits from the VIE that could potentially
be significant to the VIE. See Note 11 for further
Long-Term Borrowings Note 16
information about VIEs.
Other Liabilities and Accrued Expenses Note 17
Equity-Method Investments. When the firm does not
Commitments, Contingencies and Guarantees Note 18 have a controlling financial interest in an entity but can
Shareholders’ Equity Note 19 exert significant influence over the entity’s operating and
Regulation and Capital Adequacy Note 20
financial policies, the investment is accounted for either
(i) under the equity method of accounting or (ii) at fair value
Earnings Per Common Share Note 21
by electing the fair value option available under U.S. GAAP.
Transactions with Affiliated Funds Note 22 Significant influence generally exists when the firm owns
Interest Income and Interest Expense Note 23 20% to 50% of the entity’s common stock or in-substance
common stock.
Income Taxes Note 24
Business Segments Note 25
Credit Concentrations Note 26
Legal Proceedings Note 27
Employee Benefit Plans Note 28
Employee Incentive Plans Note 29
Parent Company Note 30

In general, the firm accounts for investments acquired transfer a liability in an orderly transaction between market
subsequent to November 24, 2006, when the fair value participants at the measurement date. Financial assets are
option became available, at fair value. In certain cases, the marked to bid prices and financial liabilities are marked to
firm applies the equity method of accounting to new offer prices. Fair value measurements do not include
investments that are strategic in nature or closely related to transaction costs. Fair value gains or losses are generally
the firm’s principal business activities, when the firm has a included in “Market making” for positions in Institutional
significant degree of involvement in the cash flows or Client Services and “Other principal transactions” for
operations of the investee or when cost-benefit positions in Investing & Lending. See Notes 5 through 8 for
considerations are less significant. See Note 12 for further further information about fair value measurements.
information about equity-method investments.
Investment Banking. Fees from financial advisory
Investment Funds. The firm has formed numerous assignments and underwriting revenues are recognized in
investment funds with third-party investors. These funds earnings when the services related to the underlying
are typically organized as limited partnerships or limited transaction are completed under the terms of the assignment.
liability companies for which the firm acts as general Expenses associated with such transactions are deferred until
partner or manager. Generally, the firm does not hold a the related revenue is recognized or the assignment is
majority of the economic interests in these funds. These otherwise concluded. Expenses associated with financial
funds are usually voting interest entities and generally are advisory assignments are recorded as non-compensation
not consolidated because third-party investors typically expenses, net of client reimbursements. Underwriting
have rights to terminate the funds or to remove the firm as revenues are presented net of related expenses.
general partner or manager. Investments in these funds are
Investment Management. The firm earns management
included in “Financial instruments owned, at fair value.”
fees and incentive fees for investment management services.
See Notes 6, 18 and 22 for further information about
Management fees are calculated as a percentage of net asset
investments in funds.
value, invested capital or commitments, and are recognized
Use of Estimates over the period that the related service is provided.
Preparation of these consolidated financial statements Incentive fees are calculated as a percentage of a fund’s or
requires management to make certain estimates and separately managed account’s return, or excess return
assumptions, the most important of which relate to fair value above a specified benchmark or other performance target.
measurements, accounting for goodwill and identifiable Incentive fees are generally based on investment
intangible assets, and the provision for losses that may arise performance over a 12-month period or over the life of a
from litigation, regulatory proceedings and tax audits. These fund. Fees that are based on performance over a 12-month
estimates and assumptions are based on the best available period are subject to adjustment prior to the end of the
information but actual results could be materially different. measurement period. For fees that are based on investment
performance over the life of the fund, future investment
Revenue Recognition
underperformance may require fees previously distributed
Financial Assets and Financial Liabilities at Fair Value.
to the firm to be returned to the fund. Incentive fees are
Financial instruments owned, at fair value and Financial
recognized only when all material contingencies have been
instruments sold, but not yet purchased, at fair value are
resolved. Management and incentive fee revenues are
recorded at fair value either under the fair value option or in
included in “Investment management” revenues.
accordance with other U.S. GAAP. In addition, the firm has
elected to account for certain of its other financial assets Commissions and Fees. The firm earns “Commissions
and financial liabilities at fair value by electing the fair value and fees” from executing and clearing client transactions on
option. The fair value of a financial instrument is the stock, options and futures markets. Commissions and fees
amount that would be received to sell an asset or paid to are recognized on the day the trade is executed.

Transfers of Assets Revenues from variable annuity and life insurance and
Transfers of assets are accounted for as sales when the firm reinsurance contracts not accounted for at fair value
has relinquished control over the assets transferred. For generally consist of fees assessed on contract holder account
transfers of assets accounted for as sales, any related gains balances for mortality charges, policy administration fees
or losses are recognized in net revenues. Assets or liabilities and surrender charges. These revenues are recognized in
that arise from the firm’s continuing involvement with earnings over the period that services are provided and are
transferred assets are measured at fair value. For transfers included in “Market making” revenues. Changes in
of assets that are not accounted for as sales, the assets reserves, including interest credited to policyholder account
remain in “Financial instruments owned, at fair value” and balances, are recognized in “Insurance reserves.”
the transfer is accounted for as a collateralized financing,
Premiums earned for underwriting property catastrophe
with the related interest expense recognized over the life of
reinsurance are recognized in earnings over the coverage
the transaction. See Note 9 for further information about
period, net of premiums ceded for the cost of reinsurance,
transfers of assets accounted for as collateralized financings
and are included in “Market making” revenues. Expenses
and Note 10 for further information about transfers of
for liabilities related to property catastrophe reinsurance
assets accounted for as sales.
claims, including estimates of losses that have been incurred
Receivables from Customers and Counterparties but not reported, are included in “Insurance reserves.”
Receivables from customers and counterparties generally
Foreign Currency Translation
relate to collateralized transactions. Such receivables are
Assets and liabilities denominated in non-U.S. currencies
primarily comprised of customer margin loans, transfers of
are translated at rates of exchange prevailing on the date of
assets accounted for as secured loans rather than purchases
the consolidated statements of financial condition and
and collateral posted in connection with certain derivative
revenues and expenses are translated at average rates of
transactions. Certain of the firm’s receivables from
exchange for the period. Foreign currency remeasurement
customers and counterparties are accounted for at fair
gains or losses on transactions in nonfunctional currencies
value under the fair value option, with changes in fair value
are recognized in earnings. Gains or losses on translation of
generally included in “Market making” revenues. See Note
the financial statements of a non-U.S. operation, when the
8 for further information about the fair values of these
functional currency is other than the U.S. dollar, are
receivables. Receivables from customers and counterparties
included, net of hedges and taxes, in the consolidated
not accounted for at fair value are accounted for at
statements of comprehensive income.
amortized cost net of estimated uncollectible amounts,
which generally approximates fair value. Interest on Cash and Cash Equivalents
receivables from customers and counterparties is The firm defines cash equivalents as highly liquid overnight
recognized over the life of the transaction and included in deposits held in the ordinary course of business. As of
“Interest income.” December 2011 and December 2010, “Cash and cash
equivalents” included $7.95 billion and $5.75 billion,
Insurance Activities
respectively, of cash and due from banks, and
Certain of the firm’s insurance and reinsurance contracts
$48.05 billion and $34.04 billion, respectively, of interest-
are accounted for at fair value under the fair value option,
bearing deposits with banks.
with changes in fair value included in “Market making”
revenues. See Note 8 for further information about the fair
values of these insurance and reinsurance contracts.

Recent Accounting Developments

Improving Disclosures about Fair Value Measurements Testing Goodwill for Impairment (ASC 350). In
(FASB Accounting Standards Codification (ASC) 820). In September 2011, the FASB issued ASU No. 2011-08,
January 2010, the FASB issued ASU No. 2010-06, “Fair Value “Intangibles — Goodwill and Other (Topic 350) — Testing
Measurements and Disclosures (Topic 820) — Improving Goodwill for Impairment.” ASU No. 2011-08 simplifies
Disclosures about Fair Value Measurements.” ASU how entities test goodwill for impairment by permitting an
No. 2010-06 provides amended disclosure requirements entity to first assess qualitative factors to determine
related to fair value measurements. Certain of these disclosure whether it is more likely than not that the fair value of a
requirements became effective for the firm beginning in the reporting unit is less than its carrying amount as a basis for
first quarter of 2010, while others became effective for the firm determining whether it is necessary to perform the
beginning in the first quarter of 2011. Since these amended quantitative, two-step goodwill impairment test. ASU
principles require only additional disclosures concerning fair No. 2011-08 is effective for annual and interim goodwill
value measurements, adoption did not affect the firm’s impairment tests performed for fiscal years beginning after
financial condition, results of operations or cash flows. December 15, 2011. Early adoption is permitted. The firm
adopted these amended principles in conjunction with its
Reconsideration of Effective Control for Repurchase
goodwill impairment test performed in the fourth quarter
Agreements (ASC 860). In April 2011, the FASB issued ASU
of 2011. The adoption of ASU No. 2011-08 did not affect
No. 2011-03, “Transfers and Servicing (Topic 860) —
the firm’s financial condition, results of operations or cash
Reconsideration of Effective Control for Repurchase
flows.
Agreements.” ASU No. 2011-03 changes the assessment of
effective control by removing (i) the criterion that requires the Derecognition of in Substance Real Estate (ASC 360). In
transferor to have the ability to repurchase or redeem financial December 2011, the FASB issued ASU No. 2011-10,
assets on substantially the agreed terms, even in the event of “Property, Plant, and Equipment (Topic 360) —
default by the transferee, and (ii) the collateral maintenance Derecognition of in Substance Real Estate — a Scope
implementation guidance related to that criterion. ASU Clarification.” ASU No. 2011-10 clarifies that in order to
No. 2011-03 is effective for periods beginning after deconsolidate a subsidiary (that is in substance real estate) as a
December 15, 2011. The adoption of ASU No. 2011-03 will result of a parent no longer controlling the subsidiary due to a
not affect the firm’s financial condition, results of operations default on the subsidiary’s nonrecourse debt, the parent also
or cash flows. must satisfy the sale criteria in ASC 360-20, “Property, Plant,
and Equipment — Real Estate Sales.” The ASU is effective for
Amendments to Achieve Common Fair Value
fiscal years beginning on or after June 15, 2012. The firm will
Measurement and Disclosure Requirements in U.S.
apply the provisions of the ASU to such events occurring on or
GAAP and IFRSs (ASC 820). In May 2011, the FASB
after January 1, 2013. Adoption is not expected to materially
issued ASU No. 2011-04, “Fair Value Measurements and
affect the firm’s financial condition, results of operations or
Disclosures (Topic 820) — Amendments to Achieve
cash flows.
Common Fair Value Measurement and Disclosure
Requirements in U.S. GAAP and IFRSs.” ASU No. 2011-04 Disclosures about Offsetting Assets and Liabilities
clarifies the application of existing fair value measurement (ASC 210). In December 2011, the FASB issued ASU
and disclosure requirements, changes certain principles No. 2011-11, “Balance Sheet (Topic 210) — Disclosures
related to measuring fair value, and requires additional about Offsetting Assets and Liabilities.” ASU
disclosures about fair value measurements. ASU No. 2011-11 will require disclosure of the effect or
No. 2011-04 is effective for periods beginning after potential effect of offsetting arrangements on the firm’s
December 15, 2011. Adoption of ASU No. 2011-04 will financial position as well as enhanced disclosure of the
not materially affect the firm’s financial condition, results rights of setoff associated with the firm’s recognized
of operations or cash flows. assets and recognized liabilities. ASU No. 2011-11 is
effective for annual reporting periods beginning on or
after January 1, 2013, and interim periods within those
annual periods. Since these amended principles require
only additional disclosures concerning offsetting and
related arrangements, adoption will not affect the firm’s
financial condition, results of operations or cash flows.

Note 4.
Financial Instruments Owned, at Fair Value
and Financial Instruments Sold, But Not
Yet Purchased, at Fair Value
Financial instruments owned, at fair value and financial financial instruments sold, but not yet purchased, at fair
instruments sold, but not yet purchased, at fair value are value. Financial instruments owned, at fair value included
accounted for at fair value either under the fair value option $4.86 billion and $3.67 billion as of December 2011 and
or in accordance with other U.S. GAAP. See Note 8 for December 2010, respectively, of securities accounted for as
further information about the fair value option. The table available-for-sale, substantially all of which are held in the
below presents the firm’s financial instruments owned, at firm’s insurance subsidiaries.
fair value, including those pledged as collateral, and

Financial Financial
Instruments Instruments
Financial Sold, But Financial Sold, But
Instruments Not Yet Instruments Not Yet
in millions Owned Purchased Owned Purchased
Commercial paper, certificates of deposit, time deposits and other
money market instruments $ 13,440 $ — $ 11,262 3 $ —
U.S. government and federal agency obligations 87,040 21,006 84,928 23,264
Non-U.S. government obligations 49,205 34,886 40,675 29,009
Loans and securities backed by commercial real estate 6,699 27 7,510 5
Loans and securities backed by residential real estate 7,592 3 9,532 6
Bank loans and bridge loans 19,745 2,756 2 18,039 1,487 2
Corporate debt securities 22,131 6,553 24,719 7,219
State and municipal obligations 3,089 3 2,792 —
Other debt obligations 4,362 — 3,232 —
Equities and convertible debentures 65,113 21,326 67,833 24,988
Commodities 5,762 — 13,138 9
Derivatives 1 80,028 58,453 73,293 54,730
Total $364,206 $145,013 $356,953 $140,717
1. Net of cash collateral received or posted under credit support agreements and reported on a net-by-counterparty basis when a legal right of setoff exists under an
enforceable netting agreement.
2. Includes the fair value of unfunded commitments to extend credit. The fair value of partially funded commitments is primarily included in “Financial instruments
owned, at fair value.”
3. Includes $4.06 billion as of December 2010 of money market instruments held by William Street Funding Corporation (Funding Corp.) to support the William Street
credit extension program. See Note 18 for further information about the William Street credit extension program.

Gains and Losses from Market Making and Other The best evidence of fair value is a quoted price in an active
Principal Transactions market. If listed prices or quotations are not available, fair
The table below presents, by major product type, the firm’s value is determined by reference to prices for similar
“Market making” and “Other principal transactions” instruments, quoted prices or recent transactions in less
revenues. These gains/(losses) are primarily related to the active markets, or internally developed models that
firm’s financial instruments owned, at fair value and primarily use as inputs market-based or independently
financial instruments sold, but not yet purchased, at fair sourced parameters, including, but not limited to, interest
value, including both derivative and non-derivative rates, volatilities, equity or debt prices, foreign exchange
financial instruments. These gains/(losses) exclude related rates, commodities prices, credit curves and funding rates.
interest income and interest expense. See Note 23 for
U.S. GAAP has a three-level fair value hierarchy for
further information about interest income and interest
disclosure of fair value measurements. The fair value
expense.
hierarchy prioritizes inputs to the valuation techniques used
The gains/(losses) in the table are not representative of the to measure fair value, giving the highest priority to level 1
manner in which the firm manages its business activities inputs and the lowest priority to level 3 inputs. A financial
because many of the firm’s market-making, client instrument’s level in the fair value hierarchy is based on the
facilitation, and investing and lending strategies utilize lowest level of input that is significant to its fair value
financial instruments across various product types. measurement.
Accordingly, gains or losses in one product type frequently
The fair value hierarchy is as follows:
offset gains or losses in other product types. For example,
most of the firm’s longer-term derivatives are sensitive to Level 1. Inputs are unadjusted quoted prices in active
changes in interest rates and may be economically hedged markets to which the firm had access at the measurement
with interest rate swaps. Similarly, a significant portion of date for identical, unrestricted assets or liabilities.
the firm’s cash instruments and derivatives has exposure to
Level 2. Inputs to valuation techniques are observable,
foreign currencies and may be economically hedged with either directly or indirectly.
foreign currency contracts.
Level 3. One or more inputs to valuation techniques are
Year Ended December significant and unobservable.
in millions 2011 2010 2009
The fair values for substantially all of our financial assets
Interest rates $ 1,557 $ (2,042) $ 6,540
and financial liabilities are based on observable prices and
Credit 2,715 8,679 6,691
inputs and are classified in levels 1 and 2 of the hierarchy.
Currencies 901 3,219 (817)
Certain level 2 and level 3 financial assets and financial
Equities 2,788 6,862 6,128
liabilities may require appropriate valuation adjustments
Commodities 1,588 1,567 4,591
that a market participant would require to arrive at fair
Other 1,245 2,325 1,576
Total $10,794 $20,610 $24,709
value for factors such as counterparty and the firm’s credit
quality, funding risk, transfer restrictions, liquidity and bid/
offer spreads. Valuation adjustments are generally based on
Note 5. market evidence. See Notes 6, 7 and 8 for further
information about valuation adjustments.
Fair Value Measurements
See Notes 6 and 7 for further information about fair value
The fair value of a financial instrument is the amount that
measurements of cash instruments and derivatives,
would be received to sell an asset or paid to transfer a
respectively, included in “Financial instruments owned, at
liability in an orderly transaction between market
fair value” and “Financial instruments sold, but not yet
participants at the measurement date. Financial assets are
purchased, at fair value,” and Note 8 for further
marked to bid prices and financial liabilities are marked to
information about other financial assets and financial
offer prices. Fair value measurements do not include
liabilities accounted for at fair value under the fair value
transaction costs.
option.

Financial assets and financial liabilities at fair value are summarized below.
As of December
$ in millions 2011 2010
Total level 1 financial assets $ 136,780 $ 137,687
Total level 2 financial assets 587,416 566,535
Total level 3 financial assets 47,937 45,377
Netting and collateral 1 (120,821) (112,085)
Total financial assets at fair value $ 651,312 $ 637,514
Total assets $ 923,225 $ 911,332
Total level 3 financial assets as a percentage of Total assets 5.2% 5.0%
Total level 3 financial assets as a percentage of Total financial assets at fair value 7.4% 7.1%
Total level 3 financial liabilities at fair value $ 25,498 $ 24,054
Total financial liabilities at fair value $ 388,669 $ 381,604
Total level 3 financial liabilities as a percentage of Total financial liabilities at fair value 6.6% 6.3%
1. Represents the impact on derivatives of cash collateral and counterparty netting across levels of the fair value hierarchy. Netting among positions classified in the
same level is included in that level.
The increase in level 3 financial assets during the year ended See Notes 6, 7 and 8 for further information about level 3
December 2011 primarily reflected an increase in private cash instruments, derivatives and other financial assets and
equity investments, principally due to purchases and net financial liabilities accounted for at fair value under the fair
transfers from level 2, partially offset by sales. Level 3 bank value option, respectively, including information about
loans and bridge loans also increased, primarily reflecting significant unrealized gains/(losses) and significant transfers
purchases, partially offset by sales, settlements and net in or out of level 3.
transfers to level 2.

Note 6.
Cash Instruments
Cash instruments include U.S. government and federal Level 2 Cash Instruments
agency obligations, non-U.S. government obligations, bank Level 2 cash instruments include commercial paper,
loans and bridge loans, corporate debt securities, equities certificates of deposit, time deposits, most government
and convertible debentures, and other non-derivative agency obligations, most corporate debt securities,
financial instruments owned and financial instruments sold, commodities, certain mortgage-backed loans and securities,
but not yet purchased. See below for the types of cash certain bank loans and bridge loans, restricted or less liquid
instruments included in each level of the fair value hierarchy publicly listed equities, most state and municipal
and the valuation techniques and significant inputs used to obligations and certain money market instruments and
determine their fair values. See Note 5 for an overview of lending commitments.
the firm’s fair value measurement policies.
Valuations of level 2 cash instruments can be verified to
Level 1 Cash Instruments quoted prices, recent trading activity for identical or similar
Level 1 cash instruments include U.S. government instruments, broker or dealer quotations or alternative
obligations and most non-U.S. government obligations, pricing sources with reasonable levels of price transparency.
actively traded listed equities and certain money market Consideration is given to the nature of the quotations (e.g.,
instruments. These instruments are valued using quoted indicative or firm) and the relationship of recent market
prices for identical unrestricted instruments in active activity to the prices provided from alternative pricing
markets. sources.
The firm defines active markets for equity instruments Valuation adjustments are typically made to level 2 cash
based on the average daily trading volume both in absolute instruments (i) if the cash instrument is subject to transfer
terms and relative to the market capitalization for the restrictions and/or (ii) for other premiums and liquidity
instrument. The firm defines active markets for debt discounts that a market participant would require to arrive
instruments based on both the average daily trading volume at fair value. Valuation adjustments are generally based on
and the number of days with trading activity. market evidence.
The fair value of a level 1 instrument is calculated as Level 3 Cash Instruments
quantity held multiplied by quoted market price. U.S. Level 3 cash instruments have one or more significant
GAAP prohibits valuation adjustments being applied to valuation inputs that are not observable. Absent evidence to
level 1 instruments even in situations where the firm holds a the contrary, level 3 cash instruments are initially valued at
large position and a sale could impact the quoted price. transaction price, which is considered to be the best initial
estimate of fair value. Subsequently, the firm uses other
methodologies to determine fair value, which vary based on
the type of instrument. Valuation inputs and assumptions
are changed when corroborated by substantive observable
evidence, including values realized on sales of level 3
financial assets.
The table below presents the valuation techniques and the
nature of significant inputs generally used to determine the
fair values of each class of level 3 cash instrument.

Level 3 Cash Instrument Valuation Techniques and Significant Inputs
Loans and securities backed by Valuation techniques vary by instrument, but are generally based on discounted cash flow techniques.
commercial real estate
Significant inputs for these valuations include:
‰ Collateralized by a single commercial
‰ Transaction prices in both the underlying collateral and instruments with the same or similar
real estate property or a portfolio of
underlying collateral
properties
‰ Current levels and changes in market indices such as the CMBX (an index that tracks the
‰ May include tranches of varying levels
performance of commercial mortgage bonds)
of subordination
‰ Market yields implied by transactions of similar or related assets
‰ Current performance of the underlying collateral
‰ Capitalization rates and multiples
‰ Amount and timing of future cash flows
Loans and securities backed by Valuation techniques vary by instrument, but are generally based on relative value analyses, discounted
residential real estate cash flow techniques or a combination thereof.
‰ Collateralized by portfolios of residential Significant inputs are determined based on relative value analyses, which incorporate comparisons to
real estate instruments with similar collateral and risk profiles, including relevant indices such as the ABX (an index
that tracks the performance of subprime residential mortgage bonds). Significant inputs include:
‰ May include tranches of varying levels
of subordination ‰ Home price projections, residential property liquidation timelines and related costs
‰ Underlying loan prepayment, default and cumulative loss expectations
‰ Transaction prices in both the underlying collateral and instruments with the same or similar
underlying collateral
Bank loans and bridge loans Valuation techniques vary by instrument, but are generally based on discounted cash flow techniques.
Corporate debt securities Significant inputs are generally determined based on relative value analyses, which incorporate
comparisons both to prices of credit default swaps that reference the same or similar underlying credit risk
State and municipal obligations and to other debt instruments for the same issuer for which observable prices or broker quotations are
Other debt obligations available. Significant inputs include:
‰ Amount and timing of expected future cash flows
‰ Current levels and trends of market indices such as CDX, LCDX and MCDX (indices that track the
performance of corporate credit, loans and municipal obligations, respectively)
‰ Current performance and recovery assumptions and, where the firm uses credit default swaps to value
the related cash instrument, the cost of borrowing the underlying reference obligation
Equities and convertible debentures Recent third-party investments or pending transactions are considered to be the best evidence for any
change in fair value. When these are not available, the following valuation methodologies are used, as
‰ Private equity investments appropriate and available:
‰ Transactions in similar instruments
‰ Discounted cash flow techniques
‰ Third-party appraisals
‰ Industry multiples and public comparables
Evidence includes recent or pending reorganizations (e.g., merger proposals, tender offers, debt
restructurings) and significant changes in financial metrics, such as:
‰ Current financial performance as compared to projected performance
‰ Capitalization rates and multiples

Fair Value of Cash Instruments by Level

The tables below present, by level within the fair value “Financial instruments owned, at fair value” and
hierarchy, cash instrument assets and liabilities, at fair “Financial instruments sold, but not yet purchased, at fair
value. Cash instrument assets and liabilities are included in value,” respectively.
Cash Instrument Assets at Fair Value as of December 2011

in millions Level 1 Level 2 Level 3 Total
money market instruments $ 3,255 $ 10,185 $ — $ 13,440
U.S. government and federal agency obligations 29,263 57,777 — 87,040
Non-U.S. government obligations 42,854 6,203 148 49,205
Mortgage and other asset-backed loans and securities 1:
Loans and securities backed by commercial real estate — 3,353 3,346 6,699
Loans and securities backed by residential real estate — 5,883 1,709 7,592
Bank loans and bridge loans — 8,460 11,285 19,745
Corporate debt securities 2 133 19,518 2,480 22,131
State and municipal obligations — 2,490 599 3,089
Other debt obligations 2 — 2,911 1,451 4,362
Equities and convertible debentures 39,955 3 11,491 4 13,667 5 65,113
Commodities — 5,762 — 5,762
Total $115,460 $134,033 $34,685 $284,178
Cash Instrument Liabilities at Fair Value as of December 2011

U.S. government and federal agency obligations $ 20,940 $ 66 $ — $ 21,006
Non-U.S. government obligations 34,339 547 — 34,886
Loans and securities backed by commercial real estate — 27 — 27
Loans and securities backed by residential real estate — 3 — 3
Bank loans and bridge loans — 1,891 865 2,756
Corporate debt securities 6 — 6,522 31 6,553
State and municipal obligations — 3 — 3
Equities and convertible debentures 20,069 3 1,248 4 9 21,326
Total $ 75,348 $ 10,307 $ 905 $ 86,560
1. Includes $213 million and $595 million of collateralized debt obligations (CDOs) backed by real estate in level 2 and level 3, respectively.
2. Includes $403 million and $1.19 billion of CDOs and collateralized loan obligations (CLOs) backed by corporate obligations in level 2 and level 3, respectively.
3. Consists of publicly listed equity securities.
4. Principally consists of restricted or less liquid publicly listed securities.
5. Includes $12.07 billion of private equity investments, $1.10 billion of real estate investments and $497 million of convertible debentures.
6. Includes $27 million of CDOs and CLOs backed by corporate obligations in level 3.

Cash Instrument Assets at Fair Value as of December 2010

money market instruments $ 4,344 $ 6,918 $ — $ 11,262
U.S. government and federal agency obligations 36,184 48,744 — 84,928
Non-U.S. government obligations 35,504 5,171 — 40,675
Mortgage and other asset-backed loans and securities 1:
Loans and securities backed by commercial real estate — 3,534 3,976 7,510
Loans and securities backed by residential real estate — 7,031 2,501 9,532
Bank loans and bridge loans — 8,134 9,905 18,039
Corporate debt securities 2 108 21,874 2,737 24,719
State and municipal obligations — 2,038 754 2,792
Other debt obligations — 1,958 1,274 3,232
Equities and convertible debentures 41,660 3 15,113 4 11,060 5 67,833
Commodities — 13,138 — 13,138
Total $117,800 $133,653 $32,207 $283,660
Cash Instrument Liabilities at Fair Value as of December 2010

U.S. government and federal agency obligations $ 23,191 $ 73 $ — $ 23,264
Non-U.S. government obligations 28,168 841 — 29,009
Loans and securities backed by commercial real estate — 5 — 5
Loans and securities backed by residential real estate — 6 — 6
Bank loans and bridge loans — 1,107 380 1,487
Corporate debt securities 6 26 7,133 60 7,219
Equities and convertible debentures 24,283 3 699 4 6 24,988
Commodities — 9 — 9
Total $ 75,668 $ 9,873 $ 446 $ 85,987
1. Includes $212 million and $565 million of CDOs backed by real estate in level 2 and level 3, respectively.
2. Includes $368 million and $1.07 billion of CDOs and CLOs backed by corporate obligations in level 2 and level 3, respectively.
3. Consists of publicly listed equity securities.
4. Substantially all consists of restricted or less liquid publicly listed securities.
5. Includes $10.03 billion of private equity investments, $874 million of real estate investments and $156 million of convertible debentures.
6. Includes $35 million of CDOs and CLOs backed by corporate obligations in level 3.

Level 3 Rollforward
If a cash instrument asset or liability was transferred to gains or losses attributable to level 1 or level 2 cash
level 3 during a reporting period, its entire gain or loss for instruments and/or level 1, level 2 or level 3 derivatives. As
the period is included in level 3. Transfers between levels a result, gains or losses included in the level 3 rollforward
are reported at the beginning of the reporting period in below do not necessarily represent the overall impact on the
which they occur. firm’s results of operations, liquidity or capital resources.
Level 3 cash instruments are frequently economically The tables below present changes in fair value for all cash
hedged with level 1 and level 2 cash instruments and/or instrument assets and liabilities categorized as level 3 as of
level 1, level 2 or level 3 derivatives. Accordingly, gains or the end of the year.
losses that are reported in level 3 can be partially offset by
Level 3 Cash Instrument Assets at Fair Value for the Year Ended December 2011
Net unrealized
gains/(losses) Net
Net relating to transfers
Balance, realized instruments in and/or Balance,
beginning gains/ still held at (out) of end of
in millions of year (losses) year-end Purchases 1 Sales Settlements level 3 year
Non-U.S. government obligations $ — $ 25 $ (63) $ 27 $ (123) $ (8) $ 290 $ 148
Mortgage and other asset-backed loans
and securities:
Loans and securities backed by
commercial real estate 3,976 222 80 1,099 (1,124) (831) (76) 3,346
Loans and securities backed by residential
real estate 2,501 253 (81) 768 (702) (456) (574) 1,709
Bank loans and bridge loans 9,905 540 (216) 6,725 (2,329) (1,554) (1,786) 11,285
Corporate debt securities 2,737 391 (132) 1,319 (1,137) (697) (1) 2,480
State and municipal obligations 754 12 (1) 448 (591) (13) (10) 599
Other debt obligations 1,274 124 (17) 560 (388) (212) 110 1,451
Equities and convertible debentures 11,060 240 338 2,731 (1,196) (855) 1,349 13,667
Total $32,207 $1,807 2 $ (92) 2 $13,677 $(7,590) $(4,626) $ (698) $34,685
Level 3 Cash Instrument Liabilities at Fair Value for the Year Ended December 2011
Net unrealized
(gains)/losses Net
beginning (gains)/ still held at (out) of end of
in millions of year losses year-end Purchases Sales Settlements level 3 year
Total $ 446 $ (27) $ 218 $ (491) $ 475 $ 272 $ 12 $ 905
1. Includes both originations and secondary market purchases.

2. The aggregate amounts include approximately $(202) million, $623 million and $1.29 billion reported in “Market making,” “Other principal transactions” and
“Interest income,” respectively.
The net unrealized loss on level 3 cash instrument assets and Significant transfers in or out of level 3 cash instrument
liabilities of $310 million for the year ended December 2011 assets during the year ended December 2011 included:
primarily consisted of losses on bank loans and bridge loans ‰ Bank loans and bridge loans: net transfer out of level 3
and corporate debt securities, primarily reflecting the impact of $1.79 billion, primarily due to transfers to level 2 of
of unfavorable credit markets and losses on relationship certain loans due to improved transparency of market
lending. These losses were partially offset by gains in private prices as a result of market transactions in these or
equity investments, where prices were generally corroborated similar loans, partially offset by transfers to level 3 of
through market transactions in similar financial instruments other loans primarily due to reduced transparency of
during the year. market prices as a result of less market activity in these
loans.

‰ Equities and convertible debentures: net transfer into ‰ Loans and securities backed by residential real estate: net
level 3 of $1.35 billion, primarily due to transfers to transfer out of level 3 of $574 million, principally due to
level 3 of certain private equity investments due to transfers to level 2 of certain loans due to improved
reduced transparency of market prices as a result of less transparency of market prices used to value these loans,
market activity in these financial instruments, partially as well as unobservable inputs no longer being
offset by transfers to level 2 of other private equity significant to the valuation of these loans.
investments due to improved transparency of market
There were no significant transfers in or out of level 3 cash
prices as a result of market transactions in these
instrument liabilities during the year ended
financial instruments.
December 2011.
Level 3 Cash Instrument Assets at Fair Value for the Year Ended December 2010
Net unrealized
gains/(losses) Net
Net relating to Net transfers
Balance, realized instruments purchases, in and/or Balance,
beginning gains/ still held at sales and (out) of end of
in millions of year (losses) year-end settlements level 3 year
Loans and securities backed by commercial real estate $ 5,794 $ 239 $ 108 $(1,335) $ (830) $ 3,976
Loans and securities backed by residential real estate 2,070 178 37 163 53 2,501
Bank loans and bridge loans 9,560 687 482 (735) (89) 9,905
Corporate debt securities 2,235 239 348 488 (573) 2,737
State and municipal obligations 1,114 1 (25) (393) 57 754
Other debt obligations 2,235 4 159 (263) (861) 1,274
Equities and convertible debentures 11,871 119 548 (847) (631) 11,060
Total $34,879 $1,467 1 $1,657 1 $(2,922) $(2,874) $32,207
Level 3 Cash Instrument Liabilities at Fair Value for the Year Ended December 2010
Net unrealized
(gains)/losses Net
Net relating to Net transfers
Balance, realized instruments purchases, in and/or Balance,
beginning (gains)/ still held at sales and (out) of end of
in millions of year losses year-end settlements level 3 year
Total $ 572 $ 5 $ (17) $ (97) $ (17) $ 446
1. The aggregate amounts include approximately $836 million, $1.03 billion and $1.26 billion reported in “Market making,” “Other principal transactions” and “Interest
income,” respectively.
The net unrealized gain on level 3 cash instrument assets and ‰ Corporate debt securities: net transfer out of level 3 of
liabilities of $1.67 billion for the year ended December 2010 $573 million, principally due to a reduction in financial
primarily consisted of unrealized gains on private equity instruments as a result of the consolidation of a VIE
investments, bank loans and bridge loans and corporate debt which holds intangible assets.
securities, where prices were generally corroborated through
‰ Other debt obligations: net transfer out of level 3 of
sales and partial sales of similar assets in these asset classes
$861 million, principally due to a reduction in financial
during the period.
instruments as a result of the consolidation of a VIE.
Significant transfers in or out of level 3 cash instrument The VIE holds real estate assets which are included in
assets during the year ended December 2010 included: “Other assets.”
‰ Loans and securities backed by commercial real estate: ‰ Equities and convertible debentures: net transfer out of
net transfer out of level 3 of $830 million, principally level 3 of $631 million, principally due to transfers to
due to transfers to level 2 of certain loans due to level 2 of certain private equity investments due to
improved transparency of market prices as a result of improved transparency of market prices as a result of
partial sales. partial sales and initial public offerings.

Investments in Funds That Calculate Net Asset

Value Per Share
Cash instruments at fair value include investments in funds liquidated and it is estimated that substantially all of the
that are valued based on the net asset value per share underlying assets of existing funds will be liquidated over
(NAV) of the investment fund. The firm uses NAV as its the next 10 years. The firm continues to manage its existing
measure of fair value for fund investments when (i) the fund private equity funds taking into account the transition
investment does not have a readily determinable fair value periods under the Volcker Rule of the U.S. Dodd-Frank
and (ii) the NAV of the investment fund is calculated in a Wall Street Reform and Consumer Protection Act (Dodd-
manner consistent with the measurement principles of Frank Act), although the rules have not yet been finalized.
investment company accounting, including measurement of
The firm’s investments in hedge funds are generally
the underlying investments at fair value.
redeemable on a quarterly basis with 91 days’ notice,
The firm’s investments in funds that calculate NAV subject to a maximum redemption level of 25% of the
primarily consist of investments in firm-sponsored funds firm’s initial investments at any quarter-end. The firm
where the firm co-invests with third-party investors. The currently plans to comply with the Volcker Rule by
private equity, private debt and real estate funds are redeeming certain of its interests in hedge funds.
primarily closed-end funds in which the firm’s investments
are not eligible for redemption. Distributions will be The table below presents the fair value of the firm’s
received from these funds as the underlying assets are investments in, and unfunded commitments to, funds that
calculate NAV.

Fair Value of Unfunded Fair Value of Unfunded
in millions Investments Commitments Investments Commitments
Private equity funds 1 $ 8,074 $3,514 $ 7,911 $ 4,816
Private debt funds 2 3,596 3,568 4,267 3,721
Hedge funds 3 3,165 — 3,169 —
Real estate and other funds 4 1,531 1,613 1,424 1,931
Total $16,366 $8,695 $16,771 $10,468
1. These funds primarily invest in a broad range of industries worldwide in a variety of situations, including leveraged buyouts, recapitalizations and growth
investments.
2. These funds generally invest in loans and other fixed income instruments and are focused on providing private high-yield capital for mid- to large-sized leveraged and
management buyout transactions, recapitalizations, financings, refinancings, acquisitions and restructurings for private equity firms, private family companies and
corporate issuers.
3. These funds are primarily multi-disciplinary hedge funds that employ a fundamental bottom-up investment approach across various asset classes and strategies
including long/short equity, credit, convertibles, risk arbitrage, special situations and capital structure arbitrage.
4. These funds invest globally, primarily in real estate companies, loan portfolios, debt recapitalizations and direct property.

Note 7.
Derivatives and Hedging Activities
Derivative Activities
Derivatives are instruments that derive their value from The firm enters into various types of derivatives, including:
underlying asset prices, indices, reference rates and other
‰ Futures and Forwards. Contracts that commit
inputs, or a combination of these factors. Derivatives may
counterparties to purchase or sell financial instruments,
be privately negotiated contracts, which are usually referred
commodities or currencies in the future.
to as over-the-counter (OTC) derivatives, or they may be
listed and traded on an exchange (exchange-traded). ‰ Swaps. Contracts that require counterparties to
exchange cash flows such as currency or interest
Market-Making. As a market maker, the firm enters into
payment streams. The amounts exchanged are based on
derivative transactions with clients and other market
the specific terms of the contract with reference to
participants to provide liquidity and to facilitate the transfer
specified rates, financial instruments, commodities,
and hedging of risk. In this capacity, the firm typically acts as
currencies or indices.
principal and is consequently required to commit capital to
provide execution. As a market maker, it is essential to ‰ Options. Contracts in which the option purchaser has
maintain an inventory of financial instruments sufficient to the right, but not the obligation, to purchase from or sell
meet expected client and market demands. to the option writer financial instruments, commodities
or currencies within a defined time period for a specified
Risk Management. The firm also enters into derivatives to
price.
actively manage risk exposures that arise from market-
making and investing and lending activities in derivative Derivatives are accounted for at fair value, net of cash
and cash instruments. The firm’s holdings and exposures collateral received or posted under credit support
are hedged, in many cases, on either a portfolio or risk- agreements. Derivatives are reported on a
specific basis, as opposed to an instrument-by-instrument net-by-counterparty basis (i.e., the net payable or receivable
basis. The offsetting impact of this economic hedging is for derivative assets and liabilities for a given counterparty)
reflected in the same business segment as the related when a legal right of setoff exists under an enforceable
revenues. In addition, the firm may enter into derivatives netting agreement. Derivative assets and liabilities are
designated as hedges under U.S. GAAP. These derivatives included in “Financial instruments owned, at fair value”
are used to manage foreign currency exposure on the net and “Financial instruments sold, but not yet purchased, at
investment in certain non-U.S. operations and to manage fair value,” respectively.
interest rate exposure in certain fixed-rate unsecured long-
Substantially all gains and losses on derivatives not
term and short-term borrowings, and certificates of deposit.
designated as hedges under ASC 815 are included in
“Market making” and “Other principal transactions.”

The table below presents the fair value of derivatives on a net-by-counterparty basis.

Derivative Derivative Derivative Derivative
in millions Assets Liabilities Assets Liabilities
Exchange-traded $ 5,880 $ 3,172 $ 7,601 $ 2,794
Over-the-counter 74,148 55,281 65,692 51,936
Total $80,028 $58,453 $73,293 $54,730
The table below presents the fair value and the number of netting of cash collateral received or posted under credit
derivative contracts by major product type on a gross basis. support agreements, and therefore are not representative of
Gross fair values in the table below exclude the effects of the firm’s exposure.
both netting under enforceable netting agreements and

Derivative Derivative Number of Derivative Derivative Number of
in millions, except number of contracts Assets Liabilities Contracts Assets Liabilities Contracts
Derivatives not accounted for as hedges
Interest rates $ 624,189 $ 582,608 287,351 $ 463,145 $ 422,514 272,279
Credit 150,816 130,659 362,407 127,153 104,407 367,779
Currencies 88,654 71,736 203,205 87,959 70,273 222,706
Commodities 35,966 38,050 93,755 36,689 41,666 70,890
Equities 64,135 51,928 332,273 65,815 51,948 289,059
Subtotal 963,760 874,981 1,278,991 780,761 690,808 1,222,713
Derivatives accounted for as hedges
Interest rates 21,981 13 1,125 23,396 33 997
Currencies 124 21 71 6 162 72
Subtotal 22,105 34 1,196 23,402 195 1,069
Gross fair value of derivatives $ 985,865 $ 875,015 1,280,187 $ 804,163 $ 691,003 1,223,782
Counterparty netting 1 (787,733) (787,733) (620,553) (620,553)

Cash collateral netting 2 (118,104) (28,829) (110,317) (15,720)
Fair value included in financial instruments owned $ 80,028 $ 73,293
Fair value included in financial instruments sold, but not
yet purchased $ 58,453 $ 54,730
1. Represents the netting of receivable balances with payable balances for the same counterparty under enforceable netting agreements.
2. Represents the netting of cash collateral received and posted on a counterparty basis under credit support agreements.

Valuation Techniques for Derivatives Interest Rate. In general, the prices and other inputs used
See Note 5 for an overview of the firm’s fair value to value interest rate derivatives are transparent, even for
measurement policies. long-dated contracts. Interest rate swaps and options
denominated in the currencies of leading industrialized
Level 1 Derivatives
nations are characterized by high trading volumes and tight
Exchange-traded derivatives fall within level 1 if they are
bid/offer spreads. Interest rate derivatives that reference
actively traded and are valued at their quoted market price.
indices, such as an inflation index, or the shape of the yield
Level 2 Derivatives curve (e.g., 10-year swap rate vs. 2-year swap rate), are
Level 2 derivatives include exchange-traded derivatives that more complex and are therefore less transparent, but the
are not actively traded and OTC derivatives for which all prices and other inputs are generally observable.
significant valuation inputs are corroborated by market
Credit. Price transparency for credit default swaps, including
evidence.
both single names and baskets of credits, varies by market
Level 2 exchange-traded derivatives are valued using and underlying reference entity or obligation. Credit default
models that calibrate to market-clearing levels of OTC swaps that reference indices, large corporates and major
derivatives. Inputs to the valuations of level 2 OTC sovereigns generally exhibit the most price transparency. For
derivatives can be verified to market-clearing transactions, credit default swaps with other underliers, price transparency
broker or dealer quotations or other alternative pricing varies based on credit rating, the cost of borrowing the
sources with reasonable levels of price transparency. underlying reference obligations, and the availability of the
Consideration is given to the nature of the quotations (e.g., underlying reference obligations for delivery upon the default
indicative or firm) and the relationship of recent market of the issuer. Credit default swaps that reference loans, asset-
activity to the prices provided from alternative pricing backed securities and emerging market debt instruments tend
sources. to be less transparent than those that reference corporate
Where models are used, the selection of a particular model bonds. In addition, more complex credit derivatives, such as
to value an OTC derivative depends on the contractual those sensitive to the correlation between two or more
terms of and specific risks inherent in the instrument, as underlying reference obligations, generally have less price
well as the availability of pricing information in the market. transparency.
Valuation models require a variety of inputs, including Currency. Prices for currency derivatives based on the
contractual terms, market prices, yield curves, credit curves, exchange rates of leading industrialized nations, including
measures of volatility, prepayment rates, loss severity rates
those with longer tenors, are generally transparent. The
and correlations of such inputs. For OTC derivatives that
primary difference between the transparency of developed
trade in liquid markets, model selection does not involve
and emerging market currency derivatives is that emerging
significant management judgment because outputs of
markets tend to be observable for contracts with shorter
models can be calibrated to market-clearing levels.
tenors.
Price transparency of OTC derivatives can generally be
Commodity. Commodity derivatives include transactions
characterized by product type.
referenced to energy (e.g., oil and natural gas), metals (e.g.,
precious and base) and soft commodities (e.g., agricultural).
Price transparency varies based on the underlying
commodity, delivery location, tenor and product quality
(e.g., diesel fuel compared to unleaded gasoline). In general,
price transparency for commodity derivatives is greater for
contracts with shorter tenors and contracts that are more
closely aligned with major and/or benchmark commodity
indices.

Equity. Price transparency for equity derivatives varies by ‰ For level 3 commodity derivatives, significant level 3
market and underlier. Options on indices and the common inputs include volatilities for options with strike prices
stock of corporates included in major equity indices exhibit that differ significantly from current market prices and
the most price transparency. Exchange-traded and OTC prices for certain products for which the product quality
equity derivatives generally have observable market prices, is not aligned with benchmark indices.
except for contracts with long tenors or reference prices
Subsequent to the initial valuation of a level 3 OTC
that differ significantly from current market prices. More
derivative, the firm updates the level 1 and level 2 inputs to
complex equity derivatives, such as those sensitive to the
reflect observable market changes and any resulting gains
correlation between two or more individual stocks,
and losses are recorded in level 3. Level 3 inputs are
generally have less price transparency.
changed when corroborated by evidence such as similar
Liquidity is essential to observability of all product types. If market transactions, third-party pricing services and/or
transaction volumes decline, previously transparent prices broker or dealer quotations or other empirical market data.
and other inputs may become unobservable. Conversely, In circumstances where the firm cannot verify the model
even highly structured products may at times have trading value by reference to market transactions, it is possible that
volumes large enough to provide observability of prices and a different valuation model could produce a materially
other inputs. different estimate of fair value.
Level 3 Derivatives Valuation Adjustments
Level 3 OTC derivatives are valued using models which Valuation adjustments are integral to determining the fair
utilize observable level 1 and/or level 2 inputs, as well as value of derivatives and are used to adjust the mid-market
unobservable level 3 inputs. valuations, produced by derivative pricing models, to the
appropriate exit price valuation. These adjustments
‰ For the majority of the firm’s interest rate and currency
incorporate bid/offer spreads, the cost of liquidity on
derivatives classified within level 3, the significant
illiquid positions, credit valuation adjustments (CVA) and
unobservable inputs are correlations of certain
funding valuation adjustments, which account for the credit
currencies and interest rates (e.g., the correlation of
and funding risk inherent in derivative portfolios. Market-
Japanese yen foreign exchange rates to U.S. dollar
based inputs are generally used when calibrating valuation
interest rates).
adjustments to market-clearing levels.
‰ For credit derivatives classified within level 3, significant
In addition, for derivatives that include significant
level 3 inputs include long-dated credit and funding
unobservable inputs, the firm makes model or exit price
spreads, as well as certain correlation inputs required to
adjustments to account for the valuation uncertainty
value credit and mortgage derivatives (e.g., the
present in the transaction.
likelihood of default of the underlying reference
obligations relative to one another).
‰ For level 3 equity derivatives, significant level 3 inputs
generally include equity volatility inputs for options that
are very long-dated and/or have strike prices that differ
significantly from current market prices. In addition, the
valuation of certain structured trades requires the use of
level 3 inputs for the correlation of the price
performance for two or more individual stocks.

Fair Value of Derivatives by Level

The tables below present the fair value of derivatives on a received or posted under credit support agreements both in
gross basis by level and major product type. Gross fair and across levels of the fair value hierarchy, and therefore
values in the tables below exclude the effects of both netting are not representative of the firm’s exposure.
under enforceable netting agreements and netting of cash
Derivative Assets at Fair Value as of December 2011
Cross-Level
in millions Level 1 Level 2 Level 3 Netting Total
Interest rates $33 $ 645,923 $ 214 $ — $ 646,170
Credit — 137,110 13,706 — 150,816
Currencies — 86,752 2,026 — 88,778
Commodities — 35,062 904 — 35,966
Equities 24 62,684 1,427 — 64,135
Gross fair value of derivative assets 57 967,531 18,277 — 985,865
Counterparty netting 1 — (778,639) (6,377) (2,717) 3 (787,733)
Subtotal $57 $ 188,892 $11,900 $(2,717) $ 198,132
Cash collateral netting 2 (118,104)
Fair value included in financial instruments owned $ 80,028
Derivative Liabilities at Fair Value as of December 2011

Cross-Level
Interest rates $ 24 $ 582,012 $ 585 $ — $ 582,621
Credit — 123,253 7,406 — 130,659
Currencies — 70,573 1,184 — 71,757
Commodities — 36,541 1,509 — 38,050
Equities 185 49,884 1,859 — 51,928
Gross fair value of derivative liabilities 209 862,263 12,543 — 875,015
Subtotal $209 $ 83,624 $ 6,166 $(2,717) $ 87,282
Fair value included in financial instruments sold,
but not yet purchased $ 58,453
3. Represents the netting of receivable balances with payable balances for the same counterparty across levels of the fair value hierarchy under enforceable netting
agreements.

Derivative Assets at Fair Value as of December 2010

Cross-Level
Interest rates $49 $ 486,037 $ 455 $ — $ 486,541
Credit — 115,519 11,634 — 127,153
Currencies — 86,158 1,807 — 87,965
Commodities — 34,511 2,178 — 36,689
Equities 44 64,267 1,504 — 65,815
Gross fair value of derivative assets 93 786,492 17,578 — 804,163
Subtotal $93 $ 172,513 $12,772 $(1,768) $ 183,610
Fair value included in financial instruments owned $ 73,293
Derivative Liabilities at Fair Value as of December 2010

Cross-Level
Interest rates $18 $ 422,267 $ 262 $ — $ 422,547
Credit — 99,813 4,594 — 104,407
Currencies — 69,726 709 — 70,435
Commodities — 39,709 1,957 — 41,666
Equities 27 49,427 2,494 — 51,948
Gross fair value of derivative liabilities 45 680,942 10,016 — 691,003
Subtotal $45 $ 66,963 $ 5,210 $(1,768) $ 70,450
Fair value included in financial instruments sold,
but not yet purchased $ 54,730
3. Represents the netting of receivable balances with payable balances for the same counterparty across levels of the fair value hierarchy under enforceable netting
agreements.

Level 3 Rollforward
If a derivative was transferred to level 3 during a reporting ‰ Gains or losses that have been reported in level 3
period, its entire gain or loss for the period is included in resulting from changes in level 1 or level 2 inputs are
level 3. Transfers between levels are reported at the frequently offset by gains or losses attributable to level 1
beginning of the reporting period in which they occur. or level 2 derivatives and/or level 1, level 2 and level 3
cash instruments. As a result, gains/(losses) included in
Gains and losses on level 3 derivatives should be considered
the level 3 rollforward below do not necessarily
in the context of the following:
represent the overall impact on the firm’s results of
‰ A derivative with level 1 and/or level 2 inputs is classified in operations, liquidity or capital resources.
level 3 in its entirety if it has at least one significant level 3
The tables below present changes in fair value for all
input.
derivatives categorized as level 3 as of the end of the year.
‰ If there is one significant level 3 input, the entire gain or
loss from adjusting only observable inputs (i.e., level 1
and level 2 inputs) is classified as level 3.
Level 3 Derivative Assets and Liabilities at Fair Value for the Year Ended December 2011
Net unrealized
Asset/ gains/(losses) Net Asset/
(liability) Net relating to transfers (liability)
balance, realized instruments in and/or balance,
in millions of year (losses) year-end Purchases Sales Settlements level 3 year
Interest rates — net $ 194 $ (38) $ (305) $ 23 $ (29) $ 84 $(300) $ (371)
Credit — net 7,040 46 2,525 348 (1,310) (1,713) (636) 6,300
Currencies — net 1,098 (26) (351) 29 (25) (54) 171 842
Commodities — net 220 (35) 259 125 (835) 150 (489) (605)
Equities — net (990) 184 151 382 (683) 159 365 (432)
Total derivatives — net $7,562 $131 1 $2,279 1, 2 $907 $(2,882) $(1,374) $(889) $5,734
1. The aggregate amounts include approximately $2.35 billion and $62 million reported in “Market making” and “Other principal transactions,” respectively.
2. Principally resulted from changes in level 2 inputs.
The net unrealized gain on level 3 derivatives of derivative liabilities due to reduced transparency of the
$2.28 billion for the year ended December 2011 was correlation inputs used to value these derivatives. The
primarily attributable to the impact of changes in interest impact of these transfers was partially offset by transfers
rates and exchange rates underlying certain credit into level 3 of certain credit and mortgage derivative
derivatives. Unrealized gains on level 3 derivatives were assets, primarily due to reduced transparency of the
substantially offset by unrealized losses on derivatives correlation inputs used to value these derivatives.
classified within level 2 which economically hedge
‰ Commodities — net: net transfer out of level 3 of
derivatives classified within level 3.
$489 million, primarily reflecting transfers to level 2,
Significant transfers in or out of level 3 derivatives during due to increased transparency of market prices used to
the year ended December 2011 included: value certain commodity derivative assets as a result of
market activity in similar instruments, and unobservable
‰ Credit — net: net transfer out of level 3 of $636 million,
inputs becoming less significant to the valuation of other
primarily reflecting transfers to level 2 of certain credit
commodity derivative assets. In addition, certain
derivative assets principally due to unobservable inputs
commodity derivative liabilities were transferred into
no longer being significant to the valuation of these
level 3 due to reduced transparency of volatility inputs
derivatives, and transfers into level 3 of certain credit
used to value these derivatives.

Level 3 Derivative Assets and Liabilities at Fair Value for the Year Ended December 2010
Net unrealized
Asset/ gains/(losses) Asset/
(liability) Net relating to Net Net (liability)
balance, realized instruments purchases, transfers in balance,
beginning gains/ still held at sales and and/or (out) end of
in millions of year (losses) year-end settlements of level 3 year
Interest rates — net $ (71) $ (79) $ 156 $ (118) $ 306 $ 194
Credit — net 6,366 8 4,393 (2,663) (1,064) 7,040
Currencies — net 215 (83) 317 110 539 1,098
Commodities — net (90) 48 312 33 (83) 220
Equities — net (1,224) (38) 6 43 223 (990)
Total derivatives — net $ 5,196 $(144) 1 $5,184 1, 2 $(2,595) $ (79) $7,562
1. The aggregate amounts include approximately $4.99 billion and $55 million reported in “Market making” and “Other principal transactions,” respectively.
2. Principally resulted from changes in level 2 inputs.
The net unrealized gain on level 3 derivatives of Impact of Credit Spreads on Derivatives
$5.18 billion for the year ended December 2010 was On an ongoing basis, the firm realizes gains or losses
primarily attributable to lower interest rates underlying relating to changes in credit risk through the unwind of
certain credit derivatives. These unrealized gains were derivative contracts and changes in credit mitigants.
substantially offset by unrealized losses on currency,
The net gain attributable to the impact of changes in credit
interest rate and credit derivatives categorized in level 2,
exposure and credit spreads (counterparty and the firm’s) on
which economically hedge level 3 derivatives.
derivatives was $573 million, $68 million and $572 million
Significant transfers in or out of level 3 derivatives during for the years ended December 2011, December 2010 and
the year ended December 2010 included: December 2009, respectively.
‰ Interest rates — net and Currencies — net: net transfer Bifurcated Embedded Derivatives
into level 3 of $306 million and $539 million, The table below presents derivatives, primarily equity and
respectively, principally due to reduced transparency of interest rate products, that have been bifurcated from their
the correlation inputs used to value these financial related borrowings. These derivatives are recorded at fair
instruments. value and included in “Unsecured short-term borrowings”
and “Unsecured long-term borrowings.” See Note 8 for
‰ Credit — net: net transfer out of level 3 of $1.06 billion,
further information.
principally due to improved transparency of correlation
inputs used to value certain mortgage derivatives.
As of December
in millions, except number of contracts 2011 2010
Fair value of assets $422 $383
Fair value of liabilities 304 267
Net $118 $116
Number of contracts 333 338

OTC Derivatives
The tables below present the fair values of OTC derivative derivatives and generally on remaining contractual
assets and liabilities by tenor and by product type. Tenor is maturity for other derivatives.
based on expected duration for mortgage-related credit
in millions OTC Derivatives as of December 2011

Assets 0 - 12 1-5 5 Years or
Product Type Months Years Greater Total
Interest rates $10,931 $32,194 $ 82,480 $ 125,605
Credit 3,054 15,468 13,687 32,209
Currencies 11,253 11,592 16,023 38,868
Commodities 5,286 5,931 147 11,364
Equities 6,663 7,768 7,468 21,899
Netting across product types 1 (3,071) (6,033) (6,027) (15,131)
Subtotal $34,116 $66,920 $113,778 214,814
Cross maturity netting 2 (22,562)
Total $ 74,148
Liabilities 0 - 12 1-5 5 Years or

Interest rates $ 5,787 $18,607 $ 37,739 $ 62,133
Credit 1,200 6,957 3,894 12,051
Currencies 9,826 5,514 6,502 21,842
Commodities 6,322 5,174 2,727 14,223
Equities 3,290 4,018 4,246 11,554
Subtotal $23,354 $34,237 $ 49,081 106,672
Total $ 55,281
1. Represents the netting of receivable balances with payable balances for the same counterparty across product types within a tenor category under enforceable
netting agreements. Receivable and payable balances with the same counterparty in the same product type and tenor category are netted within such product type
and tenor category.
2. Represents the netting of receivable balances with payable balances for the same counterparty across tenor categories under enforceable netting agreements.

in millions OTC Derivatives as of December 2010

Assets 0 - 12 1-5 5 Years or
Interest rates $ 7,137 $34,384 $60,750 $ 102,271
Credit 2,777 16,145 13,525 32,447
Currencies 9,968 10,696 14,868 35,532
Commodities 5,664 5,996 248 11,908
Equities 4,795 10,942 7,037 22,774
Subtotal $27,404 $72,650 $91,351 $ 191,405
Total $ 65,692
Liabilities 0 - 12 1-5 5 Years or

Interest rates $ 4,470 $14,072 $19,760 $ 38,302
Credit 1,024 4,862 3,816 9,702
Currencies 8,036 5,219 4,986 18,241
Commodities 7,279 7,838 2,528 17,645
Equities 3,962 4,977 3,750 12,689
Subtotal $21,834 $31,455 $29,763 $ 83,052
Total $ 51,936
1. Represents the netting of receivable balances with payable balances for the same counterparty across product types within a tenor category under enforceable
netting agreements. Receivable and payable balances with the same counterparty in the same product type and tenor category are netted within such product type
and tenor category.
2. Represents the netting of receivable balances with payable balances for the same counterparty across tenor categories under enforceable netting agreements.

Derivatives with Credit-Related Contingent Features Credit Default Swaps. Single-name credit default swaps
Certain of the firm’s derivatives have been transacted under protect the buyer against the loss of principal on one or
bilateral agreements with counterparties who may require more bonds, loans or mortgages (reference obligations) in
the firm to post collateral or terminate the transactions the event the issuer (reference entity) of the reference
based on changes in the firm’s credit ratings. The table obligations suffers a credit event. The buyer of protection
below presents the aggregate fair value of net derivative pays an initial or periodic premium to the seller and receives
liabilities under such agreements (excluding application of protection for the period of the contract. If there is no credit
collateral posted to reduce these liabilities), the related event, as defined in the contract, the seller of protection
aggregate fair value of the assets posted as collateral, and makes no payments to the buyer of protection. However, if
the additional collateral or termination payments that a credit event occurs, the seller of protection is required to
could have been called at the reporting date by make a payment to the buyer of protection, which is
counterparties in the event of a one-notch and two-notch calculated in accordance with the terms of the contract.
downgrade in the firm’s credit ratings.
Credit Indices, Baskets and Tranches. Credit derivatives
may reference a basket of single-name credit default swaps
As of December
or a broad-based index. If a credit event occurs in one of the
underlying reference obligations, the protection seller pays
Net derivative liabilities under bilateral
agreements $35,066 $23,843 the protection buyer. The payment is typically a pro-rata
Collateral posted 29,002 16,640 portion of the transaction’s total notional amount based on
Additional collateral or termination payments for the underlying defaulted reference obligation. In certain
a one-notch downgrade 1,303 1,353 transactions, the credit risk of a basket or index is separated
Additional collateral or termination payments for into various portions (tranches), each having different levels
a two-notch downgrade 2,183 2,781
of subordination. The most junior tranches cover initial
Credit Derivatives defaults and once losses exceed the notional amount of
The firm enters into a broad array of credit derivatives in these junior tranches, any excess loss is covered by the next
locations around the world to facilitate client transactions most senior tranche in the capital structure.
and to manage the credit risk associated with market- Total Return Swaps. A total return swap transfers the
making and investing and lending activities. Credit risks relating to economic performance of a reference
derivatives are actively managed based on the firm’s net risk obligation from the protection buyer to the protection
position. seller. Typically, the protection buyer receives from the
Credit derivatives are individually negotiated contracts and protection seller a floating rate of interest and protection
can have various settlement and payment conventions. against any reduction in fair value of the reference
Credit events include failure to pay, bankruptcy, obligation, and in return the protection seller receives the
acceleration of indebtedness, restructuring, repudiation and cash flows associated with the reference obligation, plus
dissolution of the reference entity. any increase in the fair value of the reference obligation.

Credit Options. In a credit option, the option writer As of December 2011, written and purchased credit
assumes the obligation to purchase or sell a reference derivatives had total gross notional amounts of
obligation at a specified price or credit spread. The option $1.96 trillion and $2.08 trillion, respectively, for total net
purchaser buys the right, but not the obligation, to sell the notional purchased protection of $116.93 billion. As of
reference obligation to, or purchase it from, the option December 2010, written and purchased credit derivatives
writer. The payments on credit options depend either on a had total gross notional amounts of $2.05 trillion and
particular credit spread or the price of the reference $2.19 trillion, respectively, for total net notional purchased
obligation. protection of $140.63 billion.
The firm economically hedges its exposure to written credit The table below presents certain information about credit
derivatives primarily by entering into offsetting purchased derivatives. In the table below:
credit derivatives with identical underlyings. Substantially
‰ fair values exclude the effects of both netting under
all of the firm’s purchased credit derivative transactions are
enforceable netting agreements and netting of cash
with financial institutions and are subject to stringent
received or posted under credit support agreements, and
collateral thresholds. In addition, upon the occurrence of a
therefore are not representative of the firm’s exposure;
specified trigger event, the firm may take possession of the
reference obligations underlying a particular written credit ‰ tenor is based on expected duration for mortgage-related
derivative, and consequently may, upon liquidation of the credit derivatives and on remaining contractual maturity
reference obligations, recover amounts on the underlying for other credit derivatives; and
reference obligations in the event of default.
‰ the credit spread on the underlying, together with the
tenor of the contract, are indicators of payment/
performance risk. The firm is less likely to pay or
otherwise be required to perform where the credit
spread and the tenor are lower.
Maximum Payout/Notional
Maximum Payout/Notional Amount Amount of Purchased Fair Value of
of Written Credit Derivatives by Tenor Credit Derivatives Written Credit Derivatives
Offsetting Other
5 Years Purchased Purchased Net
0 - 12 1-5 or Credit Credit Asset/
$ in millions Months Years Greater Total Derivatives 1 Derivatives 2 Asset Liability (Liability)
As of December 2011
Credit spread on underlying
(basis points)
0-250 $282,851 $ 794,193 $141,688 $1,218,732 $1,122,296 $180,316 $17,572 $ 16,907 $ 665
251-500 42,682 269,687 69,864 382,233 345,942 47,739 4,517 20,810 (16,293)
501-1,000 29,377 140,389 21,819 191,585 181,003 23,176 138 15,398 (15,260)
Greater than 1,000 30,244 114,103 22,995 167,342 147,614 28,734 512 57,201 (56,689)
Total $385,154 $1,318,372 $256,366 $1,959,892 $1,796,855 $279,965 $22,739 $110,316 $(87,577)
As of December 2010
Credit spread on underlying
(basis points)
0-250 $235,798 $1,094,308 $288,851 $1,618,957 $1,511,113 $232,506 $32,071 $ 14,780 $ 17,291
251-500 14,412 144,448 52,072 210,932 183,613 36,713 7,368 7,739 (371)
501-1,000 6,384 89,212 33,553 129,149 110,019 18,686 2,571 11,256 (8,685)
Greater than 1,000 11,721 63,982 12,022 87,725 70,945 23,795 483 33,670 (33,187)
Total $268,315 $1,391,950 $386,498 $2,046,763 $1,875,690 $311,700 $42,493 $ 67,445 $(24,952)
1. Offsetting purchased credit derivatives represent the notional amount of purchased credit derivatives to the extent they economically hedge written credit
derivatives with identical underlyings.
2. This purchased protection represents the notional amount of purchased credit derivatives in excess of the notional amount included in “Offsetting Purchased Credit
Derivatives.”

Hedge Accounting The dollar-offset method compared the change in the fair
The firm applies hedge accounting for (i) certain interest value of the hedging instrument to the change in the fair
rate swaps used to manage the interest rate exposure of value of the hedged item, excluding the effect of the passage
certain fixed-rate unsecured long-term and short-term of time. The prospective dollar-offset assessment used
borrowings and certain fixed-rate certificates of deposit and scenario analyses to test hedge effectiveness through
(ii) certain foreign currency forward contracts and foreign simulations of numerous parallel and slope shifts of the
currency-denominated debt used to manage foreign relevant yield curve. Parallel shifts changed the interest rate
currency exposures on the firm’s net investment in certain of all maturities by identical amounts. Slope shifts changed
non-U.S. operations. the curvature of the yield curve. For both the prospective
assessment, in response to each of the simulated yield curve
To qualify for hedge accounting, the derivative hedge must
shifts, and the retrospective assessment, a hedging
be highly effective at reducing the risk from the exposure
relationship was considered effective if the fair value of the
being hedged. Additionally, the firm must formally
hedging instrument and the hedged item changed inversely
document the hedging relationship at inception and test the
within a range of 80% to 125%.
hedging relationship at least on a quarterly basis to ensure
the derivative hedge continues to be highly effective over the For qualifying fair value hedges, gains or losses on
life of the hedging relationship. derivatives are included in “Interest expense.” The change
in fair value of the hedged item attributable to the risk being
Interest Rate Hedges
hedged is reported as an adjustment to its carrying value
The firm designates certain interest rate swaps as fair value
and is subsequently amortized into interest expense over its
hedges. These interest rate swaps hedge changes in fair
remaining life. Gains or losses resulting from hedge
value attributable to the relevant benchmark interest rate
ineffectiveness are included in “Interest expense.” When a
(e.g., London Interbank Offered Rate (LIBOR)), effectively
derivative is no longer designated as a hedge, any remaining
converting a substantial portion of fixed-rate obligations
difference between the carrying value and par value of the
into floating-rate obligations.
hedged item is amortized to interest expense over the
The firm applies the “long-haul method” in assessing the remaining life of the hedged item using the effective interest
effectiveness of its fair value hedging relationships in method. See Note 23 for further information about interest
achieving offsetting changes in the fair values of the hedging income and interest expense.
instrument and the risk being hedged (i.e., interest rate
For the years ended December 2011, December 2010 and
risk).
December 2009, the gain/(loss) recognized on interest rate
During the three months ended March 2010, the firm derivatives accounted for as hedges was $4.68 billion,
changed its method of prospectively and retrospectively $1.62 billion and $(10.07) billion, respectively, and the
assessing the effectiveness of all of its fair value hedging related gain/(loss) recognized on the hedged borrowings
relationships from a dollar-offset method, which is a and bank deposits was $(6.30) billion, $(3.45) billion and
non-statistical method, to regression analysis, which is a $9.95 billion, respectively. The hedge ineffectiveness
statistical method. recognized on these derivatives for the years ended
December 2011 and December 2010 was a loss of
An interest rate swap is considered highly effective in
$1.62 billion and $1.84 billion, respectively, and was not
offsetting changes in fair value attributable to changes in
material for the year ended December 2009. These losses
the hedged risk when the regression analysis results in a
consisted primarily of the amortization of prepaid credit
coefficient of determination of 80% or greater and a slope
spreads. The gain/(loss) excluded from the assessment of
between 80% and 125%.
hedge effectiveness was not material for the years ended
December 2011 and December 2010, and was a loss of
$1.23 billion for the year ended December 2009.

Net Investment Hedges Note 8.

The firm seeks to reduce the impact of fluctuations in Fair Value Option
foreign exchange rates on its net investment in certain
non-U.S. operations through the use of foreign currency Other Financial Assets and Financial Liabilities at
forward contracts and foreign currency-denominated debt. Fair Value
For foreign currency forward contracts designated as In addition to all cash and derivative instruments included
hedges, the effectiveness of the hedge is assessed based on in “Financial instruments owned, at fair value” and
the overall changes in the fair value of the forward contracts “Financial instruments sold, but not yet purchased, at fair
(i.e., based on changes in forward rates). For foreign value,” the firm has elected to account for certain of its
currency-denominated debt designated as a hedge, the other financial assets and financial liabilities at fair value
effectiveness of the hedge is assessed based on changes in under the fair value option.
spot rates. The primary reasons for electing the fair value option are
For qualifying net investment hedges, the gains or losses on to:
the hedging instruments, to the extent effective, are ‰ reflect economic events in earnings on a timely basis;
included in the consolidated statements of comprehensive
income. ‰ mitigate volatility in earnings from using different
measurement attributes (e.g., transfers of financial
The table below presents the gains/(losses) from net instruments owned accounted for as financings are
investment hedging. The gains/(losses) below are included recorded at fair value whereas the related secured
in “Currency translation adjustment, net of tax.” financing would be recorded on an accrual basis absent
electing the fair value option); and
Year Ended December
in millions 2011 2010 2009 ‰ address simplification and cost-benefit considerations
Currency hedges $ 160 $(261) $(495) (e.g., accounting for hybrid financial instruments at fair
Foreign currency-denominated debt (147) (498) 106 value in their entirety versus bifurcation of embedded
derivatives and hedge accounting for debt hosts).
The gain/(loss) related to ineffectiveness was not material for
the years ended December 2011, December 2010 and Hybrid financial instruments are instruments that contain
December 2009. The loss reclassified to earnings from bifurcatable embedded derivatives and do not require
accumulated other comprehensive income was $186 million settlement by physical delivery of non-financial assets (e.g.,
for the year ended December 2011 and was not material for physical commodities). If the firm elects to bifurcate the
the years ended December 2010 and December 2009. embedded derivative from the associated debt, the
derivative is accounted for at fair value and the host
As of December 2011 and December 2010, the firm had contract is accounted for at amortized cost, adjusted for the
designated $3.11 billion and $3.88 billion, respectively, of effective portion of any fair value hedges. If the firm does
foreign currency-denominated debt, included in not elect to bifurcate, the entire hybrid financial instrument
“Unsecured long-term borrowings” and “Unsecured short- is accounted for at fair value under the fair value option.
term borrowings,” as hedges of net investments in non-U.S.
subsidiaries. Other financial assets and financial liabilities accounted for
at fair value under the fair value option include:
‰ resale and repurchase agreements;
‰ securities borrowed and loaned within Fixed Income,
Currency and Commodities Client Execution;

‰ certain other secured financings, primarily transfers of Other Secured Financings. The significant inputs to the
assets accounted for as financings rather than sales and valuation of other secured financings at fair value are the
certain other nonrecourse financings, including debt amount and timing of expected future cash flows, interest
raised through the firm’s William Street credit extension rates, the fair value of the collateral delivered by the firm
program outstanding as of December 2010; (which is determined using the amount and timing of
expected future cash flows, market yields and recovery
‰ certain unsecured short-term borrowings, consisting of
assumptions), the frequency of additional collateral calls
all promissory notes and commercial paper and certain
and the credit spreads of the firm. See Note 9 for further
hybrid financial instruments;
information.
‰ certain unsecured long-term borrowings, including
Unsecured Short-term and Long-term Borrowings.
prepaid commodity transactions and certain hybrid
The significant inputs to the valuation of unsecured short-
financial instruments;
term and long-term borrowings at fair value are the amount
‰ certain receivables from customers and counterparties, and timing of expected future cash flows, interest rates, the
including certain margin loans and transfers of assets credit spreads of the firm, as well as commodity prices in
accounted for as secured loans rather than purchases; the case of prepaid commodity transactions and, for certain
hybrid financial instruments, equity prices, inflation rates
‰ certain insurance and reinsurance contract assets and
and index levels. See Notes 15 and 16 for further
liabilities and certain guarantees;
information.
‰ certain subordinated liabilities issued by consolidated
Receivables from Customers and Counterparties. The
VIEs; and
significant inputs to the valuation of certain receivables
‰ certain deposits issued by the firm’s bank subsidiaries. from customers and counterparties are commodity prices,
Deposits with no stated maturity are not eligible for a interest rates and the amount and timing of expected future
fair value option election. cash flows.
These financial assets and financial liabilities at fair value Insurance and Reinsurance Contracts. Insurance and
are generally valued based on discounted cash flow reinsurance contracts at fair value are included in
techniques, which incorporate inputs with reasonable levels “Receivables from customers and counterparties” and
of price transparency, and are generally classified as level 2 “Other liabilities and accrued expenses.” The insurance
because the inputs are observable. Valuation adjustments and reinsurance contracts for which the firm has elected the
may be made for liquidity and for counterparty and the fair value option are contracts that can be settled only in
firm’s credit quality. cash and that qualify for the fair value option because they
are recognized financial instruments. These contracts are
Significant inputs for each category of other financial
assets and financial liabilities at fair value are as follows: valued using market transactions and other market
evidence where possible, including market-based inputs to
Resale and Repurchase Agreements and Securities models, calibration to market-clearing transactions or other
Borrowed and Loaned. The significant inputs to the alternative pricing sources with reasonable levels of price
valuation of resale and repurchase agreements and transparency. Significant level 2 inputs typically include
securities borrowed and loaned are the amount and timing interest rates and inflation risk. Significant level 3 inputs
of expected future cash flows, interest rates and collateral typically include mortality or funding benefit assumptions.
funding spreads. See Note 9 for further information. When unobservable inputs to a valuation model are
significant to the fair value measurement of an instrument,
the instrument is classified in level 3.
Deposits. The significant inputs to the valuation of
deposits are interest rates.

Fair Value of Other Financial Assets and Financial

Liabilities by Level
The tables below present, by level within the fair value accounted for at fair value under the fair value option.
hierarchy, other financial assets and financial liabilities
Other Financial Assets at Fair Value as of December 2011
Securities segregated for regulatory and other purposes 1 $21,263 $ 20,751 $ — $ 42,014
Securities purchased under agreements to resell — 187,232 557 187,789
Securities borrowed — 47,621 — 47,621
Receivables from customers and counterparties — 8,887 795 9,682
Total $21,263 $264,491 $ 1,352 $287,106
Other Financial Liabilities at Fair Value as of December 2011

Deposits $ — $ 4,513 $ 13 $ 4,526
Securities sold under agreements to repurchase — 162,321 2,181 164,502
Securities loaned — 107 — 107
Other secured financings — 28,267 1,752 30,019
Unsecured short-term borrowings — 14,560 3,294 17,854
Unsecured long-term borrowings — 14,971 2,191 17,162
Other liabilities and accrued expenses — 490 8,996 9,486
Total $ — $225,229 $18,427 $243,656
1. Includes securities segregated for regulatory and other purposes accounted for at fair value under the fair value option, which consists of securities borrowed and
resale agreements. The table above also includes $21.26 billion of level 1 and $528 million of level 2 securities segregated for regulatory and other purposes
accounted for at fair value under other U.S. GAAP, principally consisting of U.S. Treasury securities, money market instruments and insurance separate account
assets.

Other Financial Assets at Fair Value as of December 2010

Securities segregated for regulatory and other purposes 1 $19,794 $ 16,388 $ — $ 36,182
Securities purchased under agreements to resell — 188,255 100 188,355
Securities borrowed — 48,822 — 48,822
Receivables from customers and counterparties — 6,904 298 7,202
Total $19,794 $260,369 $ 398 $280,561
Other Financial Liabilities at Fair Value as of December 2010

Deposits $ — $ 1,975 $ — $ 1,975
Securities sold under agreements to repurchase — 160,285 2,060 162,345
Securities loaned — 1,514 — 1,514
Other secured financings — 23,445 8,349 31,794
Unsecured short-term borrowings — 18,640 3,476 22,116
Unsecured long-term borrowings — 16,067 2,104 18,171
Other liabilities and accrued expenses — 563 2,409 2,972
Total $ — $222,489 $18,398 $240,887
1. Includes securities segregated for regulatory and other purposes accounted for at fair value under the fair value option, which consists of securities borrowed and
resale agreements. The table above also includes $19.79 billion of level 1 and $3.53 billion of level 2 securities segregated for regulatory and other purposes
accounted for at fair value under other U.S. GAAP, principally consisting of U.S. Treasury securities, money market instruments and insurance separate account
assets.

Level 3 Rollforward
If a financial asset or financial liability was transferred to Level 3 other financial assets and liabilities are frequently
level 3 during a reporting period, its entire gain or loss for economically hedged with cash instruments and derivatives.
the period is included in level 3. Transfers between levels Accordingly, gains or losses that are reported in level 3 can
are recognized at the beginning of the reporting period in be partially offset by gains or losses attributable to level 1, 2
which they occur. The tables below present changes in fair or 3 cash instruments or derivatives. As a result, gains or
value for other financial assets and financial liabilities losses included in the level 3 rollforward below do not
accounted for at fair value under the fair value option necessarily represent the overall impact on the firm’s results
categorized as level 3 as of the end of the year. of operations, liquidity or capital resources.
Level 3 Other Financial Assets at Fair Value for the Year Ended December 2011
Net unrealized
gains/(losses) Net
in millions of year (losses) year-end Purchases Sales Settlements level 3 year
Securities purchased under agreements to
resell $100 $2 $— $ 620 $— $(165) $— $ 557
Receivables from customers and
counterparties 298 — 54 468 — (25) — 795
Total $398 $2 $54 $1,088 $— $(190) $— $1,352
Level 3 Other Financial Liabilities at Fair Value for the Year Ended December 2011
Net unrealized
(gains)/losses Net
beginning (gains)/ still held at (out) of end of
in millions of year losses year-end Purchases Sales Issuances Settlements level 3 year
Deposits $ — $— $ — $ — $— $ 13 $ — $ — $ 13
Securities sold under agreements to
repurchase, at fair value 2,060 — — — — 299 (178) — 2,181
Other secured financings 8,349 8 3 — — 483 (4,062) (3,029) 1,752
Unsecured short-term borrowings 3,476 (15) (340) (5) — 815 (1,080) 443 3,294
Unsecured long-term borrowings 2,104 25 5 — — 441 (193) (191) 2,191
Other liabilities and accrued expenses 2,409 — 1,095 5,840 — — (348) — 8,996
Total $18,398 $ 18 $ 763 $5,835 $— $2,051 $(5,861) $(2,777) $18,427

The net unrealized loss on level 3 other financial assets and Significant transfers in or out of level 3 during the year
liabilities at fair value of $709 million for the year ended ended December 2011 included:
December 2011 primarily consisted of losses on other
‰ Other secured financings: net transfer out of level 3 of
liabilities and accrued expenses, primarily attributable to
$3.03 billion, principally due to transfers to level 2 of
the impact of a change in interest rates on certain insurance
certain borrowings as unobservable inputs were no
liabilities. These losses were partially offset by gains on
longer significant to the valuation of these borrowings as
unsecured short-term borrowings, primarily reflecting gains
they neared maturity.
on certain equity-linked notes, principally due to a decline
in global equity markets. ‰ Unsecured short-term borrowings: net transfer into
level 3 of $443 million, principally due to transfers to
level 3 of certain borrowings due to less transparency
of market prices as a result of less activity in these
financial instruments.
Level 3 Other Financial Assets at Fair Value for the Year Ended December 2010
Net unrealized
gains/(losses) Net
Net relating to Net transfers in
Balance, realized instruments purchases, and/or Balance,
beginning gains/ still held at sales and (out) of end of
in millions of year (losses) year-end settlements level 3 year
Securities purchased under agreements to resell $ — $ 3 $ — $ 97 $ — $ 100
Receivables from customers and counterparties — 22 (58) — 334 298
Total $ — $ 25 $ (58) $ 97 $ 334 $ 398
Level 3 Other Financial Liabilities at Fair Value for the Year Ended December 2010
Net unrealized Net
(gains)/losses purchases, Net
Net relating to sales, transfers in
Balance, realized instruments issuances and/or Balance,
beginning (gains)/ still held at and (out) of end of
in millions of year losses year-end settlements level 3 year
Securities sold under agreements to repurchase, at fair value $ 394 $ — $ — $1,666 $ — $ 2,060
Other secured financings 6,756 (1) 25 1,605 (36) 8,349
Unsecured short-term borrowings 2,310 91 35 (300) 1,340 3,476
Unsecured long-term borrowings 3,077 23 41 216 (1,253) 2,104
Other liabilities and accrued expenses 1,913 10 54 (155) 587 2,409
Total $ 14,450 $123 $ 155 $3,032 $ 638 $18,398
Significant transfers in or out of level 3 during the year ‰ Unsecured long-term borrowings: net transfer out of
ended December 2010, which were principally due to the level 3 of $1.25 billion, principally due to the
consolidation of certain VIEs upon adoption of ASU consolidation of certain VIEs, which caused the firm’s
No. 2009-17 as of January 1, 2010, included: borrowings from these VIEs to become intercompany
borrowings which were eliminated in consolidation.
‰ Unsecured short-term borrowings: net transfer into level 3
Substantially all of these borrowings were level 3.
of $1.34 billion, principally due to the consolidation of
certain VIEs. ‰ Other liabilities and accrued expenses: net transfer into
level 3 of $587 million, principally due to an increase in
subordinated liabilities issued by certain consolidated
VIEs.

Gains and Losses on Other Financial Assets and

Financial Liabilities at Fair Value
The “Fair Value Option” columns in the table below ‰ Gains and losses on secured financings related to
present the gains and losses recognized as a result of the transfers of assets accounted for as financings rather
firm electing to apply the fair value option to certain than sales. These gains and losses are offset by gains and
financial assets and financial liabilities. These gains and losses on the related instruments included in “Financial
losses are included in “Market making” and “Other instruments owned, at fair value” and “Receivables
principal transactions.” from customers and counterparties.”
The amounts in the table exclude contractual interest, ‰ Gains and losses on receivables from customers and
which is included in “Interest income” and “Interest counterparties related to transfers of assets accounted
expense,” for all instruments other than hybrid financial for as receivables rather than purchases. These gains and
instruments. See Note 23 for further information about losses are offset by gains and losses on the related
interest income and interest expense. The table also financial instruments included in “Other secured
excludes gains and losses related to financial instruments financings.”
owned, at fair value and financial instruments sold, but not
‰ Gains and losses on subordinated liabilities issued by
yet purchased, at fair value.
consolidated VIEs, which are included in “Other
Included in the “Other” columns in the table below are: liabilities and accrued expenses.” These gains and losses
are offset by gains and losses on the financial assets held
‰ Gains and losses on the embedded derivative component
by the consolidated VIEs.
of hybrid financial instruments included in unsecured
short-term borrowings and unsecured long-term
borrowings. These gains and losses would have been
recognized under other U.S. GAAP even if the firm had
not elected to account for the entire hybrid instrument at
fair value.
Gains/(Losses) on Other Financial Assets and Financial Liabilities at Fair Value

Year Ended December
2011 2010 2009
Fair Fair Fair
Value Value Value
in millions Option Other Option Other Option Other
Receivables from customers and counterparties 1 $ (11) $ 442 $(106) $ 558 $ 255 $ —
Other secured financings 123 (1,199) (35) (996) (822) 48
Unsecured short-term borrowings 144 2,005 33 (1,488) (182) (3,150)
Unsecured long-term borrowings 535 1,801 152 (1,321) (884) (4,150)
Other liabilities and accrued expenses 2 (994) 83 (88) 138 (214) —
Other 3 90 — (10) — 79 —
Total $(113) $ 3,132 $ (54) $(3,109) $(1,768) $(7,252)
1. Primarily consists of gains/(losses) on certain transfers accounted for as receivables rather than purchases and certain reinsurance contracts.
2. Primarily consists of gains/(losses) on certain insurance contracts.
3. Primarily consists of gains/(losses) on resale and repurchase agreements, securities borrowed and loaned and deposits.
Excluding the gains and losses on the instruments primarily represents gains and losses on “Financial
accounted for under the fair value option described above, instruments owned, at fair value” and “Financial
“Market making” and “Other principal transactions” instruments sold, but not yet purchased, at fair value.”

Loans and Lending Commitments Long-term Debt Instruments

The table below presents the difference between the The aggregate contractual principal amount of long-term
aggregate fair value and the aggregate contractual principal debt instruments (principal and non-principal protected)
amount for loans and long-term receivables for which the for which the fair value option was elected exceeded the
fair value option was elected. related fair value by $932 million and $701 million as of
December 2011 and December 2010, respectively. Of
As of December these amounts, $693 million and $349 million as of
in millions 2011 2010 December 2011 and December 2010, respectively, related
Aggregate contractual principal amount to unsecured long-term borrowings and the remainder
of performing loans and long-term related to long-term other secured financings.
receivables in excess of the
related fair value $ 3,826 $ 3,090 Impact of Credit Spreads on Loans and Lending
Aggregate contractual principal amount Commitments
of loans on nonaccrual status and/or more than The estimated net gain/(loss) attributable to changes in
90 days past due in excess instrument-specific credit spreads on loans and lending
of the related fair value 23,034 26,653
Total 1 $26,860 $29,743
commitments for which the fair value option was elected
was $(805) million, $1.85 billion and $1.65 billion for the
Aggregate fair value of loans on nonaccrual years ended December 2011, December 2010 and
status and/or more than 90 days past due $ 3,174 $ 3,994 December 2009, respectively. Changes in the fair value of
1. The aggregate contractual principal exceeds the related fair value primarily loans and lending commitments are primarily attributable
because the firm regularly purchases loans, such as distressed loans, at to changes in instrument-specific credit spreads.
values significantly below contractual principal amounts. Substantially all of the firm’s performing loans and lending
As of December 2011 and December 2010, the fair value of commitments are floating-rate.
unfunded lending commitments for which the fair value Impact of Credit Spreads on Borrowings
option was elected was a liability of $2.82 billion and The table below presents the net gains/(losses) attributable
$1.26 billion, respectively, and the related total contractual to the impact of changes in the firm’s own credit spreads on
amount of these lending commitments was $66.12 billion borrowings for which the fair value option was elected. The
and $51.20 billion, respectively. firm calculates the fair value of borrowings by discounting
future cash flows at a rate which incorporates the firm’s
credit spreads.
Year Ended December

in millions 2011 2010 2009
Net gains/(losses) including hedges $596 $198 $(1,103)
Net gains/(losses) excluding hedges 714 199 (1,116)

Note 9.
Collateralized Agreements and Financings
Collateralized agreements are securities purchased under Resale and Repurchase Agreements
agreements to resell (resale agreements or reverse A resale agreement is a transaction in which the firm
repurchase agreements) and securities borrowed. purchases financial instruments from a seller, typically in
Collateralized financings are securities sold under exchange for cash, and simultaneously enters into an
agreements to repurchase (repurchase agreements), agreement to resell the same or substantially the same
securities loaned and other secured financings. The firm financial instruments to the seller at a stated price plus
enters into these transactions in order to, among other accrued interest at a future date.
things, facilitate client activities, invest excess cash, acquire
A repurchase agreement is a transaction in which the firm
securities to cover short positions and finance certain firm
sells financial instruments to a buyer, typically in exchange
activities.
for cash, and simultaneously enters into an agreement to
Collateralized agreements and financings are presented on a repurchase the same or substantially the same financial
net-by-counterparty basis when a legal right of setoff exists. instruments from the buyer at a stated price plus accrued
Interest on collateralized agreements and collateralized interest at a future date.
financings is recognized over the life of the transaction and
The financial instruments purchased or sold in resale and
included in “Interest income” and “Interest expense,”
repurchase agreements typically include U.S. government
respectively. See Note 23 for further information about
and federal agency, and investment-grade sovereign
interest income and interest expense.
obligations.
The table below presents the carrying value of resale and
The firm receives financial instruments purchased under
repurchase agreements and securities borrowed and loaned
resale agreements, makes delivery of financial instruments
transactions.
sold under repurchase agreements, monitors the market
value of these financial instruments on a daily basis, and
As of December
delivers or obtains additional collateral due to changes in
the market value of the financial instruments, as
Securities purchased under agreements
to resell 1 $187,789 $188,355 appropriate. For resale agreements, the firm typically
Securities borrowed 2 153,341 166,306 requires delivery of collateral with a fair value
Securities sold under agreements approximately equal to the carrying value of the relevant
to repurchase 1 164,502 162,345 assets in the consolidated statements of financial condition.
Securities loaned 2 7,182 11,212
Even though repurchase and resale agreements involve the
1. Resale and repurchase agreements are carried at fair value under the fair legal transfer of ownership of financial instruments, they are
value option. See Note 8 for further information about the valuation
techniques and significant inputs used to determine fair value.
accounted for as financing arrangements because they
require the financial instruments to be repurchased or resold
2. As of December 2011 and December 2010, $47.62 billion and $48.82 billion
of securities borrowed and $107 million and $1.51 billion of securities loaned at the maturity of the agreement. However, “repos to
were at fair value, respectively. maturity” are accounted for as sales. A repo to maturity is a
transaction in which the firm transfers a security under an
agreement to repurchase the security where the maturity date
of the repurchase agreement matches the maturity date of the
underlying security. Therefore, the firm effectively no longer
has a repurchase obligation and has relinquished control
over the underlying security and, accordingly, accounts for
the transaction as a sale. The firm had no repos to maturity
outstanding as of December 2011 or December 2010.

Securities Borrowed and Loaned Transactions Other Secured Financings

In a securities borrowed transaction, the firm borrows In addition to repurchase agreements and securities lending
securities from a counterparty in exchange for cash. When transactions, the firm funds certain assets through the use of
the firm returns the securities, the counterparty returns the other secured financings and pledges financial instruments
cash. Interest is generally paid periodically over the life of and other assets as collateral in these transactions. These
the transaction. other secured financings consist of:
In a securities loaned transaction, the firm lends securities to a ‰ liabilities of consolidated VIEs;
counterparty typically in exchange for cash or securities, or a
‰ transfers of assets accounted for as financings rather than
letter of credit. When the counterparty returns the securities,
sales (primarily collateralized central bank financings,
the firm returns the cash or securities posted as collateral.
pledged commodities, bank loans and mortgage whole
Interest is generally paid periodically over the life of the
loans);
transaction.
‰ other structured financing arrangements; and
The firm receives securities borrowed, makes delivery of
securities loaned, monitors the market value of these ‰ debt raised through the firm’s William Street credit
securities on a daily basis, and delivers or obtains additional extension program outstanding as of December 2010.
collateral due to changes in the market value of the securities,
Other secured financings include arrangements that are
as appropriate. For securities borrowed transactions, the
nonrecourse. As of December 2011 and December 2010,
firm typically requires delivery of collateral with a fair value
nonrecourse other secured financings were $3.14 billion
approximately equal to the carrying value of the securities
and $8.42 billion, respectively.
borrowed transaction.
The firm has elected to apply the fair value option to the
Securities borrowed and loaned within Fixed Income,
following other secured financings because the use of fair
Currency and Commodities Client Execution are recorded
value eliminates non-economic volatility in earnings that
at fair value under the fair value option.
would arise from using different measurement attributes:
Securities borrowed and loaned within Securities Services
‰ transfers of assets accounted for as financings rather
are recorded based on the amount of cash collateral
than sales;
advanced or received plus accrued interest. As these
arrangements generally can be terminated on demand, they ‰ certain other nonrecourse financings; and
exhibit little, if any, sensitivity to changes in interest rates.
‰ debt raised through the firm’s William Street credit
As of December 2011 and December 2010, the firm had extension program outstanding as of December 2010.
$20.22 billion and $12.86 billion, respectively, of securities
See Note 8 for further information about other secured
received under resale agreements and securities borrowed
financings that are accounted for at fair value. Other
transactions that were segregated to satisfy certain regulatory
secured financings that are not recorded at fair value are
requirements. These securities are included in “Cash and
recorded based on the amount of cash received plus accrued
securities segregated for regulatory and other purposes.”
interest, which generally approximates fair value.

The table below presents information about other secured ‰ long-term secured financings that are repayable prior to
financings. In the table below: maturity at the option of the firm are reflected at their
contractual maturity dates; and
‰ short-term secured financings include financings maturing
within one year of the financial statement date and financings ‰ long-term secured financings that are redeemable prior
that are redeemable within one year of the financial statement to maturity at the option of the holders are reflected at
date at the option of the holder; the dates such options become exercisable.

U.S. Non-U.S. U.S. Non-U.S.
$ in millions Dollar Dollar Total Dollar Dollar Total
Other secured financings (short-term):
At fair value $18,519 $ 5,140 $23,659 $16,404 $ 3,684 $20,088
At amortized cost 155 5,371 5,526 99 4,342 4,441
Interest rates 1 3.85% 0.22% 2.96% 0.71%
Other secured financings (long-term):
At fair value 4,305 2,055 6,360 9,594 2,112 11,706
At amortized cost 1,024 795 1,819 1,565 577 2,142
Interest rates 1 1.88% 3.28% 2.14% 1.94%
Total 2 $24,003 $13,361 $37,364 $27,662 $10,715 $38,377
Amount of other secured financings collateralized by:
Financial instruments 3 $23,703 $12,169 $35,872 $27,014 $ 8,760 $35,774
Other assets 4 300 1,192 1,492 648 1,955 2,603
1. The weighted average interest rates exclude secured financings at fair value and include the effect of hedging activities. See Note 7 for further information about
hedging activities.
2. Includes $9.36 billion and $8.32 billion related to transfers of financial assets accounted for as financings rather than sales as of December 2011 and
December 2010, respectively. Such financings were collateralized by financial assets included in “Financial instruments owned, at fair value” of $9.51 billion and
$8.53 billion as of December 2011 and December 2010, respectively.
3. Includes $14.82 billion and $25.63 billion of other secured financings collateralized by financial instruments owned, at fair value and $21.06 billion and $10.14 billion
of other secured financings collateralized by financial instruments received as collateral and repledged as of December 2011 and December 2010, respectively.
4. Primarily real estate and cash.
The table below presents other secured financings by The aggregate contractual principal amount of other
maturity. secured financings (long-term) for which the fair value
option was elected exceeded the related fair value by
As of $239 million and $352 million as of December 2011 and
in millions December 2011 December 2010, respectively.
Other secured financings (short-term) $29,185
Other secured financings (long-term): Collateral Received and Pledged
2013 1,852 The firm receives financial instruments (e.g., U.S.
2014 3,627 government and federal agency, other sovereign and
2015 583 corporate obligations, as well as equities and convertible
2016 437 debentures) as collateral, primarily in connection with resale
2017 - thereafter 1,680 agreements, securities borrowed, derivative transactions and
Total other secured financings (long-term) 8,179
customer margin loans.
Total other secured financings $37,364

In many cases, the firm is permitted to deliver or repledge Note 10.

these financial instruments when entering into repurchase Securitization Activities
agreements and securities lending agreements, primarily in
connection with secured client financing activities. The firm The firm securitizes residential and commercial mortgages,
is also permitted to deliver or repledge these financial corporate bonds, loans and other types of financial assets
instruments in connection with other secured financings, by selling these assets to securitization vehicles (e.g., trusts,
collateralizing derivative transactions and meeting firm or corporate entities, and limited liability companies) and acts
customer settlement requirements. as underwriter of the beneficial interests that are sold to
investors. The firm’s residential mortgage securitizations
The table below presents financial instruments at fair value are substantially all in connection with government agency
received as collateral that were available to be delivered or securitizations.
repledged and were delivered or repledged by the firm.
Beneficial interests issued by securitization entities are debt
As of December or equity securities that give the investors rights to receive
in millions 2011 2010 all or portions of specified cash inflows to a securitization
Collateral available to be delivered vehicle and include senior and subordinated shares of
or repledged $622,926 $618,423 principal, interest and/or other cash inflows. The proceeds
Collateral that was delivered or repledged 454,604 447,882 from the sale of beneficial interests are used to pay the
transferor for the financial assets sold to the securitization
The firm also pledges certain financial instruments owned, vehicle or to purchase securities which serve as collateral.
at fair value in connection with repurchase agreements,
securities lending agreements and other secured financings, The firm accounts for a securitization as a sale when it has
and other assets (primarily real estate and cash) in relinquished control over the transferred assets. Prior to
connection with other secured financings to counterparties securitization, the firm accounts for assets pending transfer
who may or may not have the right to deliver or repledge at fair value and therefore does not typically recognize
them. The table below presents information about assets significant gains or losses upon the transfer of assets. Net
pledged by the firm. revenues from underwriting activities are recognized in
connection with the sales of the underlying beneficial
As of December interests to investors.
For transfers of assets that are not accounted for as sales,
Financial instruments owned, at fair value the assets remain in “Financial instruments owned, at fair
pledged to counterparties that:
Had the right to deliver or repledge $ 53,989 $ 51,010 value” and the transfer is accounted for as a collateralized
Did not have the right to deliver or financing, with the related interest expense recognized over
repledge 110,949 112,750 the life of the transaction. See Notes 9 and 23 for further
Other assets pledged to counterparties that: information about collateralized financings and interest
Did not have the right to deliver or expense, respectively.
repledge 3,444 4,482
The firm generally receives cash in exchange for the
transferred assets but may also have continuing
involvement with transferred assets, including ownership of
beneficial interests in securitized financial assets, primarily
in the form of senior or subordinated securities, and
servicing rights that the firm retains at the time of
securitization. The firm may also purchase senior or
subordinated securities issued by securitization vehicles
(which are typically VIEs) in connection with secondary
market-making activities.

The primary risks included in beneficial interests and other The table below presents the firm’s continuing involvement
interests from the firm’s continuing involvement with in nonconsolidated securitization entities to which the firm
securitization vehicles are the performance of the sold assets, as well as the total outstanding principal
underlying collateral, the position of the firm’s investment amount of transferred assets in which the firm has
in the capital structure of the securitization vehicle and the continuing involvement. In this table:
market yield for the security. These interests are accounted
‰ the outstanding principal amount is presented for the
for at fair value and are included in “Financial instruments
purpose of providing information about the size of the
owned, at fair value” and are generally classified in level 2
securitization entities in which the firm has continuing
of the fair value hierarchy. See Notes 5 through 8 for
involvement and is not representative of the firm’s risk
further information about fair value measurements.
of loss;
The table below presents the amount of financial assets
‰ for retained or purchased interests, the firm’s risk of loss
securitized and the cash flows received on retained interests
is limited to the fair value of these interests; and
in securitization entities in which the firm had continuing
involvement. ‰ purchased interests represent senior and subordinated
interests, purchased in connection with secondary
Year Ended December market-making activities, in securitization entities in
in millions 2011 2010 2009 which the firm also holds retained interests.
Residential mortgages $40,131 $47,803 $45,846
Commercial mortgages — 1,451 —
Other financial assets 269 12 691
Total $40,400 $49,266 $46,537
Cash flows on retained
interests $ 569 $ 517 $ 507

Outstanding Fair Value of Fair Value of Outstanding Fair Value of Fair Value of
Principal Retained Purchased Principal Retained Purchased
in millions Amount Interests Interests Amount Interests Interests
U.S. government agency-issued collateralized mortgage
obligations 1 $70,448 $5,038 $ — $60,352 $5,929 $ —
Other residential mortgage-backed 2 4,459 101 3 13,318 125 5
Commercial mortgage-backed 3 3,398 606 331 5,040 849 82
CDOs, CLOs and other 4 9,972 32 211 12,872 62 229
Total 5 $88,277 $5,777 $545 $91,582 $6,965 $316
1. Outstanding principal amount and fair value of retained interests primarily relate to securitizations during 2011 and 2010 as of December 2011, and securitizations
during 2010 and 2009 as of December 2010.
2. Outstanding principal amount and fair value of retained interests as of both December 2011 and December 2010 primarily relate to prime and Alt-A securitizations
during 2007 and 2006.
3. Outstanding principal amount as of both December 2011 and December 2010 primarily relate to securitizations during 2010, 2007 and 2006. Fair value of retained
interests as of both December 2011 and December 2010 primarily relate to securitizations during 2010.
4. Outstanding principal amount and fair value of retained interests as of both December 2011 and December 2010 primarily relate to CDO and CLO securitizations
during 2007 and 2006.
5. Outstanding principal amount and fair value of retained interests include $774 million and $0, respectively, as of December 2011, and $7.64 billion and $16 million,
respectively, as of December 2010, related to securitization entities in which the firm’s only continuing involvement is retained servicing which is not a variable
interest.

In addition to the interests in the table above, the firm had The table below presents the weighted average key
other continuing involvement in the form of derivative economic assumptions used in measuring the fair value of
transactions and guarantees with certain nonconsolidated retained interests and the sensitivity of this fair value to
VIEs. The carrying value of these derivatives and guarantees immediate adverse changes of 10% and 20% in those
was a net liability of $52 million and $98 million as of assumptions.
December 2011 and December 2010, respectively. The
notional amounts of these derivatives and guarantees are
included in maximum exposure to loss in the nonconsolidated
VIE tables in Note 11.
Type of Retained Interests Type of Retained Interests
$ in millions Mortgage-Backed Other 1 Mortgage-Backed Other 1
Fair value of retained interests $5,745 $ 32 $6,903 $ 62
Weighted average life (years) 7.1 4.7 7.4 4.2
Constant prepayment rate 2 14.1% N.M. 11.6% N.M.

Impact of 10% adverse change 2 $ (55) N.M. $ (62) N.M.
Impact of 20% adverse change 2 (108) N.M. (128) N.M.
Discount rate 3 5.4% N.M. 5.3% N.M.

Impact of 10% adverse change $ (125) N.M. $ (175) N.M.
Impact of 20% adverse change (240) N.M. (341) N.M.
1. Due to the nature and current fair value of certain of these retained interests, the weighted average assumptions for constant prepayment and discount rates and
the related sensitivity to adverse changes are not meaningful as of December 2011 and December 2010. The firm’s maximum exposure to adverse changes in the
value of these interests is the carrying value of $32 million and $62 million as of December 2011 and December 2010, respectively.
2. Constant prepayment rate is included only for positions for which constant prepayment rate is a key assumption in the determination of fair value.
3. The majority of mortgage-backed retained interests are U.S. government agency-issued collateralized mortgage obligations, for which there is no anticipated credit
loss. For the remainder of retained interests, the expected credit loss assumptions are reflected in the discount rate.
The preceding table does not give effect to the offsetting not usually linear. In addition, the impact of a change in a
benefit of other financial instruments that are held to particular assumption in the preceding table is calculated
mitigate risks inherent in these retained interests. Changes independently of changes in any other assumption. In
in fair value based on an adverse variation in assumptions practice, simultaneous changes in assumptions might
generally cannot be extrapolated because the relationship magnify or counteract the sensitivities disclosed above.
of the change in assumptions to the change in fair value is

Note 11.
Variable Interest Entities
VIEs generally finance the purchase of assets by issuing debt Real Estate, Credit-Related and Other Investing VIEs.
and equity securities that are either collateralized by or The firm purchases equity and debt securities issued by and
indexed to the assets held by the VIE. The debt and equity makes loans to VIEs that hold real estate, performing and
securities issued by a VIE may include tranches of varying nonperforming debt, distressed loans and equity securities.
levels of subordination. The firm’s involvement with VIEs
Other Asset-Backed VIEs. The firm structures VIEs that
includes securitization of financial assets, as described in
issue notes to clients and purchases and sells beneficial
Note 10, and investments in and loans to other types of
interests issued by other asset-backed VIEs in connection
VIEs, as described below. See Note 10 for additional
with market-making activities. In addition, the firm may
information about securitization activities, including the
enter into derivatives with certain other asset-backed VIEs,
definition of beneficial interests. See Note 3 for the firm’s
primarily total return swaps on the collateral assets held by
consolidation policies, including the definition of a VIE.
these VIEs under which the firm pays the VIE the return due
The firm is principally involved with VIEs through the to the note holders and receives the return on the collateral
following business activities: assets owned by the VIE. The firm generally can be
removed as the total return swap counterparty. The firm
Mortgage-Backed VIEs and Corporate CDO and CLO
generally enters into derivatives with other counterparties
VIEs. The firm sells residential and commercial mortgage
to mitigate its risk from derivatives with these VIEs. The
loans and securities to mortgage-backed VIEs and
firm typically does not sell assets to the other asset-backed
corporate bonds and loans to corporate CDO and CLO
VIEs it structures.
VIEs and may retain beneficial interests in the assets sold to
these VIEs. The firm purchases and sells beneficial interests Power-Related VIEs. The firm purchases debt and equity
issued by mortgage-backed and corporate CDO and CLO securities issued by and may provide guarantees to VIEs
VIEs in connection with market-making activities. In that hold power-related assets. The firm typically does not
addition, the firm may enter into derivatives with certain of sell assets to or enter into derivatives with these VIEs.
these VIEs, primarily interest rate swaps, which are
Investment Funds. The firm purchases equity securities
typically not variable interests. The firm generally enters
issued by and may provide guarantees to certain of the
into derivatives with other counterparties to mitigate its
investment funds it manages. The firm typically does not
risk from derivatives with these VIEs.
sell assets to or enter into derivatives with these VIEs.
Certain mortgage-backed and corporate CDO and CLO
Principal-Protected Note VIEs. The firm structures VIEs
VIEs, usually referred to as synthetic CDOs or credit-linked
that issue principal-protected notes to clients. These VIEs
note VIEs, synthetically create the exposure for the
own portfolios of assets, principally with exposure to hedge
beneficial interests they issue by entering into credit
funds. Substantially all of the principal protection on the
derivatives, rather than purchasing the underlying assets.
notes issued by these VIEs is provided by the asset portfolio
These credit derivatives may reference a single asset, an
rebalancing that is required under the terms of the notes.
index, or a portfolio/basket of assets or indices. See Note 7
The firm enters into total return swaps with these VIEs
for further information about credit derivatives. These VIEs
under which the firm pays the VIE the return due to the
use the funds from the sale of beneficial interests and the
principal-protected note holders and receives the return on
premiums received from credit derivative counterparties to
the assets owned by the VIE. The firm may enter into
purchase securities which serve to collateralize the
derivatives with other counterparties to mitigate the risk it
beneficial interest holders and/or the credit derivative
has from the derivatives it enters into with these VIEs. The
counterparty. These VIEs may enter into other derivatives,
firm also obtains funding through these VIEs.
primarily interest rate swaps, which are typically not
variable interests. The firm may be a counterparty to
derivatives with these VIEs and generally enters into
derivatives with other counterparties to mitigate its risk.

Municipal Bond Securitizations. The firm sold municipal The firm reassesses its initial evaluation of whether an
securities to VIEs that issued short-term qualifying entity is a VIE when certain reconsideration events occur.
tax-exempt securities. During 2011, the firm dissolved The firm reassesses its determination of whether it is the
these VIEs after having redeemed and/or purchased the primary beneficiary of a VIE on an ongoing basis based on
outstanding securities issued. current facts and circumstances.
VIE Consolidation Analysis Nonconsolidated VIEs
A variable interest in a VIE is an investment (e.g., debt or The firm’s exposure to the obligations of VIEs is generally
equity securities) or other interest (e.g., derivatives or loans limited to its interests in these entities. In certain instances, the
and lending commitments) in a VIE that will absorb firm provides guarantees, including derivative guarantees, to
portions of the VIE’s expected losses or receive portions of VIEs or holders of variable interests in VIEs.
the VIE’s expected residual returns.
The tables below present information about
The firm’s variable interests in VIEs include senior and nonconsolidated VIEs in which the firm holds variable
subordinated debt in residential and commercial mortgage- interests. Nonconsolidated VIEs are aggregated based on
backed and other asset-backed securitization entities, principal business activity. The nature of the firm’s
CDOs and CLOs; loans and lending commitments; limited variable interests can take different forms, as described
and general partnership interests; preferred and common in the rows under maximum exposure to loss. In the
equity; derivatives that may include foreign currency, tables below:
equity and/or credit risk; guarantees; and certain of the fees
‰ The maximum exposure to loss excludes the benefit of
the firm receives from investment funds. Certain interest
offsetting financial instruments that are held to mitigate
rate, foreign currency and credit derivatives the firm enters
the risks associated with these variable interests.
into with VIEs are not variable interests because they create
rather than absorb risk. ‰ For retained and purchased interests and loans and
investments, the maximum exposure to loss is the
The enterprise with a controlling financial interest in a VIE
carrying value of these interests.
is known as the primary beneficiary and consolidates the
VIE. The firm determines whether it is the primary ‰ For commitments and guarantees, and derivatives, the
beneficiary of a VIE by performing an analysis that maximum exposure to loss is the notional amount,
principally considers: which does not represent anticipated losses and also has
not been reduced by unrealized losses already recorded.
‰ which variable interest holder has the power to direct
As a result, the maximum exposure to loss exceeds
the activities of the VIE that most significantly impact
liabilities recorded for commitments and guarantees, and
the VIE’s economic performance;
derivatives provided to VIEs.
‰ which variable interest holder has the obligation to
The carrying values of the firm’s variable interests in
absorb losses or the right to receive benefits from the
nonconsolidated VIEs are included in the consolidated
VIE that could potentially be significant to the VIE;
statement of financial condition as follows:
‰ the VIE’s purpose and design, including the risks the VIE
‰ Substantially all assets held by the firm related to
was designed to create and pass through to its variable
mortgage-backed, corporate CDO and CLO and other
interest holders;
asset-backed VIEs and investment funds are included in
‰ the VIE’s capital structure; “Financial instruments owned, at fair value.”
Substantially all liabilities held by the firm related to
‰ the terms between the VIE and its variable interest
mortgage-backed, corporate CDO and CLO and other
holders and other parties involved with the VIE; and
asset-backed VIEs are included in “Financial instruments
‰ related-party relationships. sold, but not yet purchased, at fair value.”

‰ Assets and liabilities held by the firm related to real estate, ‰ Assets and liabilities held by the firm related to power-
credit-related and other investing VIEs are primarily included related VIEs are primarily included in “Other assets” and
in “Financial instruments owned, at fair value” and “Other liabilities and accrued expenses,” respectively.
“Payables to customers and counterparties,” “Financial
instruments sold, but not yet purchased, at fair value” and
“Other liabilities and accrued expenses,” respectively.
Nonconsolidated VIEs
As of December 2011
Real estate,
credit-
Corporate related and Other
Mortgage- CDOs and other asset- Power- Investment
in millions backed CLOs investing backed related funds Total
Assets in VIE $94,047 2 $20,340 $ 8,974 $4,593 $519 $2,208 $130,681
Carrying Value of the Firm’s Variable Interests
Assets 7,004 911 1,495 352 289 5 10,056
Liabilities — 63 3 24 2 — 92
Maximum Exposure to Loss in Nonconsolidated VIEs
Retained interests 5,745 32 — — — — 5,777
Purchased interests 962 368 — 333 — — 1,663
Commitments and guarantees 1 — 1 373 — 46 — 420
Derivatives 1 2,469 7,529 — 1,221 — — 11,219
Loans and investments 82 — 1,495 — 288 5 1,870
Total $ 9,258 2 $ 7,930 $ 1,868 $1,554 $334 $ 5 $ 20,949
Nonconsolidated VIEs
As of December 2010
Real estate,
credit-
Corporate related and Other
Mortgage- CDOs and other asset- Power- Investment
in millions backed CLOs investing backed related funds Total
Assets in VIE $88,755 2 $21,644 $12,568 $5,513 $552 $2,330 $131,362
Carrying Value of the Firm’s Variable Interests
Assets 8,076 909 1,063 266 239 5 10,558
Liabilities — 114 1 19 14 — 148
Maximum Exposure to Loss in Nonconsolidated VIEs
Retained interests 6,887 50 — 12 — — 6,949
Purchased interests 839 353 — 247 — — 1,439
Commitments and guarantees 1 — 1 125 — 69 — 195
Derivatives 1 3,128 7,593 — 1,105 — — 11,826
Loans and investments 104 — 1,063 — 239 5 1,411
Total $10,958 2 $ 7,997 $ 1,188 $1,364 $308 $ 5 $ 21,820
1. The aggregate amounts include $4.17 billion and $4.52 billion as of December 2011 and December 2010, respectively, related to guarantees and derivative
transactions with VIEs to which the firm transferred assets.
2. Assets in VIE and maximum exposure to loss include $6.15 billion and $2.62 billion, respectively, as of December 2011, and $6.14 billion and $3.25 billion,
respectively, as of December 2010, related to CDOs backed by mortgage obligations.

Consolidated VIEs
The tables below present the carrying amount and The tables below exclude VIEs in which the firm holds a
classification of assets and liabilities in consolidated VIEs, majority voting interest if (i) the VIE meets the definition of
excluding the benefit of offsetting financial instruments that a business and (ii) the VIE’s assets can be used for purposes
are held to mitigate the risks associated with the firm’s other than the settlement of its obligations.
variable interests. Consolidated VIEs are aggregated based
The liabilities of real estate, credit-related and other
on principal business activity and their assets and liabilities
investing VIEs and CDOs, mortgage-backed and other
are presented net of intercompany eliminations. The
asset-backed VIEs do not have recourse to the general credit
majority of the assets in principal-protected notes VIEs are
of the firm.
intercompany and are eliminated in consolidation.
Substantially all the assets in consolidated VIEs can only be
used to settle obligations of the VIE.
Consolidated VIEs
As of December 2011
Real estate, CDOs,
credit-related mortgage-backed Principal-
and other and other protected
in millions investing asset-backed notes Total
Assets
Cash and cash equivalents $ 660 $ 51 $ 1 $ 712
Cash and securities segregated for regulatory and other purposes 139 — — 139
Receivables from brokers, dealers and clearing organizations 4 — — 4
Receivables from customers and counterparties — 16 — 16
Financial instruments owned, at fair value 2,369 352 112 2,833
Other assets 1,552 437 — 1,989
Total $4,724 $856 $ 113 $5,693
Liabilities
Other secured financings $1,418 $298 $3,208 $4,924
Payables to customers and counterparties — 9 — 9
Financial instruments sold, but not yet purchased, at fair value — — 2 2
Unsecured short-term borrowings, including the current portion of
unsecured long-term borrowings 185 — 1,941 2,126
Unsecured long-term borrowings 4 — 269 273
Other liabilities and accrued expenses 2,046 40 — 2,086
Total $3,653 $347 $5,420 $9,420

Consolidated VIEs
As of December 2010
Real estate, CDOs,
credit-related Municipal mortgage-backed Principal-
and other bond and other protected
in millions investing securitizations asset-backed notes Total
Assets
Cash and cash equivalents $ 248 $ — $ 39 $ 52 $ 339
Cash and securities segregated for regulatory and other purposes 205 — — — 205
Receivables from brokers, dealers and clearing organizations 4 — — — 4
Receivables from customers and counterparties 1 — 27 — 28
Financial instruments owned, at fair value 2,531 547 550 648 4,276
Other assets 3,369 — 499 — 3,868
Total $6,358 $547 $1,115 $ 700 $ 8,720
Liabilities
Other secured financings $2,434 $630 $ 417 $3,224 $ 6,705
Payables to customers and counterparties — — 12 — 12
Financial instruments sold, but not yet purchased, at fair value — — 55 — 55
Unsecured short-term borrowings, including the current portion of
unsecured long-term borrowings 302 — — 2,359 2,661
Unsecured long-term borrowings 6 — — — 6
Other liabilities and accrued expenses 2,004 — 32 — 2,036
Total $4,746 $630 $ 516 $5,583 $11,475

Note 12.
Other Assets
Other assets are generally less liquid, non-financial Impairments
assets. The table below presents other assets by type. In the first quarter of 2011, the firm classified certain
assets as held for sale, primarily related to Litton Loan
As of December Servicing LP (Litton) and recognized impairment losses
in millions 2011 2010 of approximately $220 million, principally in the firm’s
Property, leasehold improvements and Institutional Client Services segment. These impairment
equipment 1 $ 8,697 $11,106 losses, which were included in “Depreciation and
Goodwill and identifiable intangible assets 2 5,468 5,522 amortization,” represent the excess of (i) the carrying
Income tax-related assets 3 5,017 6,239 value of these assets over (ii) their estimated fair value
Equity-method investments 4 664 1,445 less estimated cost to sell. These assets were sold in the
Miscellaneous receivables and other 3,306 3,747 third quarter of 2011. The firm received total
Total $23,152 $28,059 consideration that approximated the firm’s adjusted
1. Net of accumulated depreciation and amortization of $8.46 billion and carrying value for Litton. See Note 18 for further
$7.87 billion as of December 2011 and December 2010, respectively. information about the sale of Litton.
2. See Note 13 for further information about goodwill and identifiable intangible
assets. As a result of a decline in the market conditions in which
3. See Note 24 for further information about income taxes.
certain of the firm’s consolidated investments operate,
4. Excludes investments accounted for at fair value under the fair value option
during 2011 the firm tested certain commodity-related
where the firm would otherwise apply the equity method of accounting of intangible assets and property, leasehold improvements and
$4.17 billion and $3.77 billion as of December 2011 and December 2010, equipment associated with these investments for
respectively, which are included in “Financial instruments owned, at fair
value.” The firm has generally elected the fair value option for such
impairment in accordance with ASC 360. The carrying
investments acquired after the fair value option became available. value of these assets exceeded the projected undiscounted
cash flows over the estimated remaining useful lives of these
Property, Leasehold Improvements and Equipment
assets; as such, the firm determined the assets were
Property, leasehold improvements and equipment included
impaired and recorded an impairment loss of
$6.48 billion and $6.44 billion as of December 2011 and
approximately $220 million ($120 million related to
December 2010, respectively, related to property, leasehold
commodity-related intangible assets and $100 million
improvements and equipment that the firm uses in connection
related to property, leasehold improvements and
with its operations. The remainder is held by investment entities,
equipment), which was included in “Depreciation and
including VIEs, consolidated by the firm.
amortization” in the firm’s Investing & Lending segment.
Substantially all property and equipment are depreciated This impairment loss represented the excess of the carrying
on a straight-line basis over the useful life of the asset. value of these assets over their estimated fair value, which is
a level 3 measurement, using a combination of discounted
Leasehold improvements are amortized on a straight-line
cash flow analyses and relative value analyses, including the
basis over the useful life of the improvement or the term of
estimated cash flows expected to be received from the
the lease, whichever is shorter.
disposition of certain of these assets.
Certain costs of software developed or obtained for internal
use are capitalized and amortized on a straight-line basis
over the useful life of the software.
Property, leasehold improvements and equipment are tested
for impairment whenever events or changes in circumstances
suggest that an asset’s or asset group’s carrying value may
not be fully recoverable. The firm’s policy for impairment
testing of property, leasehold improvements and equipment
is the same as is used for identifiable intangible assets with
finite lives. See Note 13 for further information.

During the fourth quarter of 2010, as a result of continuing Goodwill

weak operating results in the firm’s NYSE DMM business, Goodwill is the cost of acquired companies in excess of the
the firm tested its NYSE DMM rights for impairment in fair value of net assets, including identifiable intangible
accordance with ASC 360. Because the carrying value of the assets, at the acquisition date.
firm’s NYSE DMM rights exceeded the projected
Goodwill is assessed annually for impairment or more
undiscounted cash flows over the estimated remaining
frequently if events occur or circumstances change that
useful life of the firm’s NYSE DMM rights, the firm
indicate an impairment may exist. Qualitative factors are
determined that the rights were impaired. The firm
assessed to determine whether it is more likely than not that
recorded an impairment loss of $305 million, which was
the fair value of a reporting unit is less than its carrying
included in “Depreciation and amortization” in the firm’s
amount. If results of the qualitative assessment are not
Institutional Client Services segment in the fourth quarter of
conclusive, a quantitative goodwill impairment test is
2010. This impairment loss represented the excess of the
performed. See Note 3 for information about amended
carrying value of the firm’s NYSE DMM rights over their
accounting principles for goodwill impairment testing.
estimated fair value. The firm estimated this fair value,
which is a level 3 measurement, using a relative value The quantitative goodwill impairment test consists of two
analysis which incorporated a comparison to another steps.
DMM portfolio that was transacted between third parties.
‰ The first step compares the estimated fair value of each
reporting unit with its estimated net book value
Note 13. (including goodwill and identified intangible assets). If
Goodwill and Identifiable Intangible Assets the reporting unit’s fair value exceeds its estimated net
book value, goodwill is not impaired.
The tables below present the carrying values of goodwill
and identifiable intangible assets, which are included in ‰ If the estimated fair value of a reporting unit is less than
“Other assets.” its estimated net book value, the second step of the
goodwill impairment test is performed to measure the
Goodwill
As of December amount of impairment loss, if any. An impairment loss is
in millions 2011 2010 equal to the excess of the carrying amount of goodwill
Investment Banking:
over its fair value.
Financial Advisory 1 $ 104 $ — Goodwill was tested for impairment, using a quantitative
Underwriting 1 186 125
test, during the fourth quarter of 2011 and goodwill was
Institutional Client Services:
not impaired.
Fixed Income, Currency and Commodities
Client Execution 2 284 159 To estimate the fair value of each reporting unit, both
Equities Client Execution 1 2,390 2,361
relative value and residual income valuation techniques are
Securities Services 117 117
used because the firm believes market participants would
Investing & Lending 147 172
Investment Management 574 561
use these techniques to value the firm’s reporting units.
Total $3,802 $3,495 Relative value techniques apply average observable
price-to-earnings multiples of comparable competitors to
Identifiable Intangible Assets certain reporting units’ net earnings. For other reporting
As of December units, fair value is estimated using price-to-book multiples
in millions 2011 2010 based on residual income techniques, which consider a
Investment Banking: reporting unit’s return on equity in excess of the firm’s cost
Financial Advisory $ 4 $ — of equity capital. The net book value of each reporting unit
Underwriting 1 —
reflects the estimated amount of shareholders’ equity
Institutional Client Services: required to support the activities of the reporting unit.
Fixed Income, Currency and Commodities
Client Execution 488 608
Equities Client Execution 677 718
Investing & Lending 369 579
Investment Management 127 122
Total $1,666 $2,027
1. The increase from December 2010 to December 2011 is related to the

acquisition of GS Australia.
2. The increase from December 2010 to December 2011 is related to the
acquisition of GS Australia, partially offset by the sale of Litton. See Note 12
for further information about the sale of Litton.

Identifiable Intangible Assets

The table below presents the gross carrying amount, identifiable intangible assets and their weighted average
accumulated amortization and net carrying amount of remaining lives.
As of December
Weighted Average
Remaining Lives
$ in millions 2011 (years) 2010
Customer lists Gross carrying amount $ 1,119 $ 1,104
Accumulated amortization (593) (529)
Net carrying amount $ 526 9 $ 575
Commodities-related intangibles 1 Gross carrying amount $ 595 $ 667

Broadcast royalties 2 Gross carrying amount $ 560 $ 560

Insurance-related intangibles 3 Gross carrying amount $ 292 $ 292

Other 4 Gross carrying amount $ 950 $ 953

Total Gross carrying amount $ 3,516 $ 3,576

Accumulated amortization (1,850) (1,549)
Net carrying amount $ 1,666 9 $ 2,027
1. Primarily includes commodity-related customer contracts and relationships, permits and access rights.
2. Represents television broadcast royalties held by a consolidated VIE.
3. Represents value of business acquired related to the firm’s insurance businesses.
4. Primarily includes the firm’s New York Stock Exchange (NYSE) Designated Market Maker (DMM) rights and exchange-traded fund lead market maker rights.
Substantially all of the firm’s identifiable intangible assets to estimated gross profits or premium revenues.
are considered to have finite lives and are amortized (i) over Amortization expense for identifiable intangible assets is
their estimated lives, (ii) based on economic usage for included in “Depreciation and amortization.”
certain commodity-related intangibles or (iii) in proportion

The tables below present amortization expense for If a recoverability test is necessary, the carrying value of an
identifiable intangible assets for the years ended asset or asset group is compared to the total of the
December 2011, December 2010 and December 2009, and undiscounted cash flows expected to be received over the
the estimated future amortization expense through 2016 remaining useful life and from the disposition of the asset or
for identifiable intangible assets as of December 2011. asset group.
Year Ended December ‰ If the total of the undiscounted cash flows exceeds the
in millions 2011 2010 2009
carrying value, the asset or asset group is not impaired.
Amortization expense $389 $520 $96 ‰ If the total of the undiscounted cash flows is less than
the carrying value, the asset or asset group is not fully
As of recoverable and an impairment loss is recognized as the
in millions December 2011 difference between the carrying amount of the asset or
Estimated future amortization expense: asset group and its estimated fair value.
2012 $258
2013 234 See Note 12 for information about impairments of our
2014 203 identifiable intangible assets.
2015 170
2016 167
Identifiable intangible assets are tested for recoverability

whenever events or changes in circumstances indicate that
an asset’s or asset group’s carrying value may not be
recoverable.

Note 14. Note 15.

Deposits Short-Term Borrowings
The tables below present deposits held in U.S. and non-U.S. Short-term borrowings were comprised of the following:
offices and the maturities of time deposits. Substantially all
U.S. deposits were held at Goldman Sachs Bank USA As of December
(GS Bank USA) and were interest-bearing and substantially in millions 2011 2010
all non-U.S. deposits were held at Goldman Sachs Bank Other secured financings (short-term) $29,185 $24,529
(Europe) plc (GS Bank Europe) and were interest-bearing. Unsecured short-term borrowings 49,038 47,842
Total $78,223 $72,371
As of December
See Note 9 for further information about other secured
financings.
U.S. offices $38,477 $32,353
Non-U.S. offices 7,632 6,216 Unsecured short-term borrowings include the portion of
Total $46,109 $38,569 unsecured long-term borrowings maturing within one year
of the financial statement date and unsecured long-term
As of December 2011 borrowings that are redeemable within one year of the
in millions U.S. Non-U.S. Total financial statement date at the option of the holder.
2012 $ 2,487 $2,347 $ 4,834 The firm accounts for promissory notes, commercial paper
2013 3,252 — 3,252 and certain hybrid financial instruments at fair value under
2014 1,306 — 1,306 the fair value option. See Note 8 for further information
2015 1,031 — 1,031 about unsecured short-term borrowings that are accounted
2016 723 — 723 for at fair value. Short-term borrowings that are not
2017 - thereafter 2,120 — 2,120
recorded at fair value are recorded based on the amount of
Total $10,919 1 $2,347 2 $13,266
cash received plus accrued interest, and such amounts
1. Includes $71 million greater than $100,000, of which $4 million matures approximate fair value due to the short-term nature of the
within three months, $2 million matures within three to six months, obligations.
$35 million matures within six to twelve months, and $30 million matures
after twelve months.
The table below presents unsecured short-term borrowings.
2. Substantially all were greater than $100,000.
As of December
Current portion of unsecured long-term
borrowings 1, 2 $28,836 $25,396
Hybrid financial instruments 11,526 13,223
Promissory notes 1,328 3,265
Commercial paper 1,491 1,306
Other short-term borrowings 5,857 4,652
Total $49,038 $47,842
Weighted average interest rate 3 1.89% 1.77%
1. Includes $8.53 billion and $10.43 billion as of December 2011 and

December 2010, respectively, issued by Group Inc. and guaranteed by the
Federal Deposit Insurance Corporation (FDIC) under the Temporary Liquidity
Guarantee Program (TLGP).
2. Includes $27.95 billion and $24.46 billion as of December 2011 and
December 2010, respectively, issued by Group Inc.
3. The weighted average interest rates for these borrowings include the effect
of hedging activities and exclude financial instruments accounted for at fair
value under the fair value option. See Note 7 for further information about
hedging activities.

Note 16.
Long-Term Borrowings
Long-term borrowings were comprised of the following:
As of December
Other secured financings (long-term) $ 8,179 $ 13,848
Unsecured long-term borrowings 173,545 174,399
Total $181,724 $188,247
See Note 9 for further information about other secured borrowings extending through 2061 and consisting
financings. The table below presents unsecured long-term principally of senior borrowings.

U.S. Non-U.S. U.S. Non-U.S.
in millions Dollar Dollar Total Dollar Dollar Total
Fixed-rate obligations 1
Group Inc. $ 82,396 $38,012 $120,408 $ 81,192 $35,353 $116,545
Subsidiaries 1,662 557 2,219 1,622 532 2,154
Floating-rate obligations 2
Group Inc. 19,936 25,878 45,814 23,700 27,374 51,074
Subsidiaries 3,500 1,604 5,104 3,616 1,010 4,626
Total 3 $107,494 $66,051 $173,545 $110,130 $64,269 $174,399
1. Interest rates on U.S. dollar-denominated debt ranged from 0.10% to 10.04% (with a weighted average rate of 5.62%) and 0.20% to 10.04% (with a weighted
average rate of 5.52%) as of December 2011 and December 2010, respectively. Interest rates on non-U.S. dollar-denominated debt ranged from 0.85% to 14.85%
(with a weighted average rate of 4.75%) and 0.85% to 14.85% (with a weighted average rate of 4.65%) as of December 2011 and December 2010, respectively.
2. Floating interest rates generally are based on LIBOR or the federal funds target rate. Equity-linked and indexed instruments are included in floating-rate obligations.
3. Includes $0 and $8.58 billion as of December 2011 and December 2010, respectively, guaranteed by the FDIC under the TLGP.

The table below presents unsecured long-term borrowings The aggregate contractual principal amount of unsecured long-
by maturity date. In the table below: term borrowings (principal and non-principal protected) for
which the fair value option was elected exceeded the related fair
‰ unsecured long-term borrowings maturing within one
value by $693 million and $349 million as of December 2011
year of the financial statement date and unsecured long-
and December 2010, respectively.
term borrowings that are redeemable within one year of
the financial statement date at the option of the holder The firm designates certain derivatives as fair value hedges
are included as unsecured short-term borrowings; to effectively convert a substantial portion of its fixed-rate
unsecured long-term borrowings which are not accounted
‰ unsecured long-term borrowings that are repayable prior
for at fair value into floating-rate obligations. Accordingly,
to maturity at the option of the firm are reflected at their
excluding the cumulative impact of changes in the firm’s
contractual maturity dates; and
credit spreads, the carrying value of unsecured long-term
‰ unsecured long-term borrowings that are redeemable borrowings approximated fair value as of December 2011
prior to maturity at the option of the holders are and December 2010. For unsecured long-term borrowings
reflected at the dates such options become exercisable. for which the firm did not elect the fair value option, the
cumulative impact due to changes in the firm’s own credit
As of December 2011 spreads would be a reduction in the carrying value of total
in millions Group Inc. Subsidiaries Total unsecured long-term borrowings of less than 4% as of both
2013 $ 25,024 $ 185 $ 25,209 December 2011 and December 2010. See Note 7 for further
2014 19,981 358 20,339 information about hedging activities.
2015 16,578 272 16,850
2016 25,507 163 25,670
The table below presents unsecured long-term borrowings,
2017 - thereafter 79,132 6,345 85,477 after giving effect to hedging activities that converted a
Total 1 $166,222 $7,323 $173,545 substantial portion of fixed-rate obligations to floating-rate
obligations.
1. Includes $10.84 billion related to interest rate hedges on certain unsecured
long-term borrowings, by year of maturity as follows: $542 million in 2013,
$882 million in 2014, $653 million in 2015, $1.19 billion in 2016 and $7.57 billion
in 2017 and thereafter.

in millions Group Inc. Subsidiaries Total Group Inc. Subsidiaries Total
Fixed-rate obligations
At fair value $ 10 $ 66 $ 76 $ 16 $ 6 $ 22
At amortized cost 1, 2 26,839 1,934 28,773 3,956 1,921 5,877
Floating-rate obligations
At fair value 12,903 4,183 17,086 13,428 4,720 18,148
At amortized cost 1, 2 126,470 1,140 127,610 150,219 133 150,352
Total $166,222 $7,323 $173,545 $167,619 $6,780 $174,399
1. The weighted average interest rates on the aggregate amounts were 2.59% (5.18% related to fixed-rate obligations and 2.03% related to floating-rate obligations)
and 1.90% (5.69% related to fixed-rate obligations and 1.74% related to floating-rate obligations) as of December 2011 and December 2010, respectively. These
rates exclude financial instruments accounted for at fair value under the fair value option.
2. During 2011, certain fair value hedges were de-designated resulting in a larger portion of fixed-rate debt carried at amortized cost.

Subordinated Borrowings
Unsecured long-term borrowings include subordinated debt December 2010, subordinated debt had maturities ranging
and junior subordinated debt. Junior subordinated debt is junior from 2017 to 2038 and 2012 to 2038, respectively. The table
in right of payment to other subordinated borrowings, which below presents subordinated borrowings.
are junior to senior borrowings. As of December 2011 and

Par Carrying Par Carrying
in millions Amount Amount Rate 1 Amount Amount Rate 1
Subordinated debt 2 $14,310 $17,362 4.39% 3 $14,345 $16,977 1.19%
Junior subordinated debt 5,085 6,533 2.43% 5,082 5,716 2.50%
Total subordinated borrowings $19,395 $23,895 3.87% $19,427 $22,693 1.54%
1. Weighted average interest rate after giving effect to fair value hedges used to convert these fixed-rate obligations into floating-rate obligations. See Note 7 for
further information about hedging activities. See below for information about interest rates on junior subordinated debt.
2. Par amount and carrying amount of subordinated debt issued by Group Inc. was $13.75 billion and $16.80 billion, respectively, as of December 2011, and
$13.81 billion and $16.44 billion, respectively, as of December 2010.
3. The increase in the weighted average interest rate as of December 2011 compared with December 2010 is primarily due to the de-designation of certain fair value
hedges resulting in a larger portion of subordinated debt carried as a fixed-rate obligation.
Junior Subordinated Debt

Junior Subordinated Debt Issued to APEX Trusts. In three-month LIBOR plus 0.57% and the debt matures on
2007, Group Inc. issued a total of $2.25 billion of September 1, 2043. In addition, the firm makes contract
remarketable junior subordinated debt to Goldman Sachs payments at a rate of 0.20% per annum on the stock
Capital II and Goldman Sachs Capital III (APEX Trusts), purchase contracts held by the APEX Trusts.
Delaware statutory trusts. The APEX Trusts issued
The firm has the right to defer payments on the junior
$2.25 billion of guaranteed perpetual Normal Automatic
subordinated debt and the stock purchase contracts, subject
Preferred Enhanced Capital Securities (APEX) to third
to limitations, and therefore cause payment on the APEX to
parties and a de minimis amount of common securities to
be deferred. During any such extension period, the firm will
Group Inc. Group Inc. also entered into contracts with the
not be permitted to, among other things, pay dividends on
APEX Trusts to sell $2.25 billion of Group Inc. perpetual
or make certain repurchases of its common or preferred
non-cumulative preferred stock (the stock purchase
stock.
contracts). See Note 19 for information about the preferred
stock that Group Inc. will issue in connection with the stock In connection with the APEX issuance, the firm covenanted
purchase contracts. in favor of certain of its debtholders, who were initially and
are currently the holders of Group Inc.’s 6.345% Junior
The APEX Trusts are wholly-owned finance subsidiaries of
Subordinated Debentures due February 15, 2034, that,
the firm for regulatory and legal purposes but are not
subject to certain exceptions, the firm would not redeem or
consolidated for accounting purposes.
purchase (i) Group Inc.’s junior subordinated debt issued to
The firm accounted for the stock purchase contracts as the APEX Trusts prior to the applicable stock purchase date
equity instruments and, accordingly, recorded the cost of or (ii) APEX or shares of Group Inc.’s perpetual
the stock purchase contracts as a reduction to additional Non-Cumulative Preferred Stock, Series E (Series E
paid-in capital. Preferred Stock) or perpetual Non-Cumulative Preferred
Stock, Series F (Series F Preferred Stock) prior to the date
The firm pays interest semi-annually on $1.75 billion of
that is ten years after the applicable stock purchase date,
junior subordinated debt issued to Goldman Sachs
unless the applicable redemption or purchase price does not
Capital II at a fixed annual rate of 5.59% and the debt
exceed a maximum amount determined by reference to the
matures on June 1, 2043. The firm pays interest quarterly
aggregate amount of net cash proceeds that the firm has
on $500 million of junior subordinated debt issued to
received from the sale of qualifying equity securities during
Goldman Sachs Capital III at a rate per annum equal to
the 180-day period preceding the redemption or purchase.

Junior Subordinated Debt Issued in Connection with The table below presents insurance-related liabilities by
Trust Preferred Securities. Group Inc. issued $2.84 billion of type.
junior subordinated debentures in 2004 to Goldman Sachs
Capital I (Trust), a Delaware statutory trust. The Trust issued As of December
$2.75 billion of guaranteed preferred beneficial interests to third in millions 2011 2010
parties and $85 million of common beneficial interests to Group Separate account liabilities $ 3,296 $ 4,024
Inc. and used the proceeds from the issuances to purchase the Liabilities for future benefits
junior subordinated debentures from Group Inc. The Trust is a and unpaid claims 1 14,213 6,308
wholly-owned finance subsidiary of the firm for regulatory and Contract holder account balances 835 801
legal purposes but is not consolidated for accounting purposes. Reserves for guaranteed minimum death
and income benefits 270 248
The firm pays interest semi-annually on the debentures at Total $18,614 $11,381
an annual rate of 6.345% and the debentures mature on 1. Substantially all of the increase from December 2010 to December 2011 is related
February 15, 2034. The coupon rate and the payment dates to acquisitions. In connection with these acquisitions, the firm acquired $7.50 billion
applicable to the beneficial interests are the same as the of assets (primarily financial instruments owned, at fair value, principally consisting
of corporate debt securities) and assumed $7.10 billion of liabilities.
interest rate and payment dates for the debentures. The firm
has the right, from time to time, to defer payment of interest Separate account liabilities are supported by separate
on the debentures, and therefore cause payment on the account assets, representing segregated contract holder
Trust’s preferred beneficial interests to be deferred, in each funds under variable annuity and life insurance contracts.
case up to ten consecutive semi-annual periods. During any Separate account assets are included in “Cash and securities
such extension period, the firm will not be permitted to, segregated for regulatory and other purposes.”
among other things, pay dividends on or make certain
Liabilities for future benefits and unpaid claims include liabilities
repurchases of its common stock. The Trust is not
arising from reinsurance provided by the firm to other insurers.
permitted to pay any distributions on the common
The firm had a receivable of $1.30 billion and $1.26 billion as of
beneficial interests held by Group Inc. unless all dividends
December 2011 and December 2010, respectively, related to such
payable on the preferred beneficial interests have been paid
reinsurance contracts, which is reported in “Receivables from
in full.
customers and counterparties.” In addition, the firm has ceded
risks to reinsurers related to certain of its liabilities for future
Note 17. benefits and unpaid claims and had a receivable of $648 million
Other Liabilities and Accrued Expenses and $839 million as of December 2011 and December 2010,
respectively, related to such reinsurance contracts, which is
The table below presents other liabilities and accrued reported in “Receivables from customers and counterparties.”
expenses by type. Contracts to cede risks to reinsurers do not relieve the firm of its
obligations to contract holders. Liabilities for future benefits and
As of December
unpaid claims include $8.75 billion and $2.05 billion carried at
in millions 2011 2010 fair value under the fair value option as of December 2011 and
Compensation and benefits $ 5,701 $ 9,089 December 2010, respectively.
Insurance-related liabilities 18,614 11,381
Noncontrolling interests 1 1,450 872 Reserves for guaranteed minimum death and income
Income tax-related liabilities 2 533 2,042 benefits represent a liability for the expected value of
Employee interests in consolidated funds 305 451 guaranteed benefits in excess of projected annuity account
Subordinated liabilities issued balances. These reserves are based on total payments
by consolidated VIEs 1,090 1,526 expected to be made less total fees expected to be assessed
Accrued expenses and other 4,108 4,650
over the life of the contract.
Total $31,801 $30,011
1. Includes $1.17 billion and $593 million related to consolidated investment

funds as of December 2011 and December 2010, respectively.
2. See Note 24 for further information about income taxes.

Note 18.
Commitments, Contingencies and Guarantees
Commitments
The table below presents the firm’s commitments.
Commitment Amount by Period Total Commitments

of Expiration as of December 2011 as of December
2013- 2015- 2017-
in millions 2012 2014 2016 Thereafter 2011 2010
Commitments to extend credit 1
Commercial lending:
Investment-grade $ 5,014 $ 4,266 $10,344 $ 45 $ 19,669 $ 12,330
Non-investment-grade 1,585 3,939 7,608 761 13,893 11,919
William Street credit extension program 5,515 6,291 19,740 390 31,936 27,383
Warehouse financing 58 189 — — 247 265
Total commitments to extend credit 12,172 14,685 37,692 1,196 65,745 51,897
Contingent and forward starting resale and securities borrowing
agreements 2 54,522 — — — 54,522 46,886
Forward starting repurchase and secured lending agreements 2 17,964 — — — 17,964 12,509
Underwriting commitments — — — — — 835
Letters of credit 3 1,145 58 145 5 1,353 2,210
Investment commitments 2,455 4,764 439 1,460 9,118 11,093
Other 5,200 101 34 7 5,342 4,396
Total commitments $93,458 $19,608 $38,310 $2,668 $154,044 $129,826
1. Commitments to extend credit are presented net of amounts syndicated to third parties.
2. These agreements generally settle within three business days.
3. Consists of commitments under letters of credit issued by various banks which the firm provides to counterparties in lieu of securities or cash to satisfy various
collateral and margin deposit requirements.
Commitments to Extend Credit

The firm’s commitments to extend credit are agreements to acquisition financing are often intended to be short-term in
lend with fixed termination dates and depend on the nature, as borrowers often seek to replace them with other
satisfaction of all contractual conditions to borrowing. The funding sources.
total commitment amount does not necessarily reflect
William Street Credit Extension Program. Substantially
actual future cash flows because the firm may syndicate all
all of the commitments provided under the William Street
or substantial portions of these commitments and
credit extension program are to investment-grade corporate
commitments can expire unused or be reduced or cancelled
borrowers. Commitments under the program are
at the counterparty’s request.
principally extended by GS Bank USA and its subsidiaries,
The firm generally accounts for commitments to extend including William Street Commitment Corporation
credit at fair value. Losses, if any, are generally recorded, (Commitment Corp.). Historically, commitments extended
net of any fees in “Other principal transactions.” by Commitment Corp. were supported, in part, by funding
raised by Funding Corp., another consolidated wholly-
Commercial Lending. The firm’s commercial lending
owned subsidiary of GS Bank USA. As of April 26, 2011,
commitments are generally extended in connection with
the funding raised by Funding Corp. had been repaid in its
contingent acquisition financing and other types of
entirety. The commitments extended by Commitment
corporate lending as well as commercial real estate
Corp. that had been supported by this funding are now
financing. Commitments that are extended for contingent
supported by funding from GS Bank USA.

The assets and liabilities of Commitment Corp. are legally Investment Commitments
separated from other assets and liabilities of the firm. The The firm’s investment commitments consist of
assets of Commitment Corp. will not be available to its commitments to invest in private equity, real estate and
shareholders until the claims of its creditors have been paid. other assets directly and through funds that the firm raises
In addition, no affiliate of Commitment Corp., except in and manages. These commitments include $1.62 billion
limited cases as expressly agreed in writing, is responsible and $1.97 billion as of December 2011 and
for any obligation of Commitment Corp. December 2010, respectively, related to real estate private
investments and $7.50 billion and $9.12 billion as of
Sumitomo Mitsui Financial Group, Inc. (SMFG) provides
December 2011 and December 2010, respectively, related
the firm with credit loss protection that is generally limited
to corporate and other private investments. Of these
to 95% of the first loss the firm realizes on approved loan
amounts, $8.38 billion and $10.10 billion as of
commitments, up to a maximum of approximately
December 2011 and December 2010, respectively, relate to
$950 million, with respect to most of the William Street
commitments to invest in funds managed by the firm, which
commitments. In addition, subject to the satisfaction of
will be funded at market value on the date of investment.
certain conditions, upon the firm’s request, SMFG will
provide protection for 70% of additional losses on such Leases
commitments, up to a maximum of $1.13 billion, of which The firm has contractual obligations under long-term
$300 million and $375 million of protection had been noncancelable lease agreements, principally for office
provided as of December 2011 and December 2010, space, expiring on various dates through 2069. Certain
respectively. The firm also uses other financial instruments agreements are subject to periodic escalation provisions for
to mitigate credit risks related to certain William Street increases in real estate taxes and other charges. The table
commitments not covered by SMFG. below presents future minimum rental payments, net of
minimum sublease rentals.
Warehouse Financing. The firm provides financing to
clients who warehouse financial assets. These arrangements
As of
are secured by the warehoused assets, primarily consisting in millions December 2011
of residential and commercial mortgages. 2012 $ 440
Contingent and Forward Starting Resale and 2013 420
2014 385
Securities Borrowing Agreements/Forward Starting
2015 337
Repurchase and Secured Lending Agreements
2016 301
The firm enters into resale and securities borrowing 2017 - thereafter 1,380
agreements and repurchase and secured lending agreements Total $3,263
that settle at a future date. The firm also enters into
commitments to provide contingent financing to its clients Rent charged to operating expense for the years ended
through resale agreements. The firm’s funding of these December 2011, December 2010 and December 2009 was
commitments depends on the satisfaction of all contractual $475 million, $508 million and $434 million, respectively.
conditions to the resale agreement and these commitments
Operating leases include office space held in excess of
can expire unused.
current requirements. Rent expense relating to space held
for growth is included in “Occupancy.” The firm records a
liability, based on the fair value of the remaining lease
rentals reduced by any potential or existing sublease
rentals, for leases where the firm has ceased using the space
and management has concluded that the firm will not
derive any future economic benefits. Costs to terminate a
lease before the end of its term are recognized and measured
at fair value on termination.

Contingencies
Legal Proceedings. See Note 27 for information about The loan level representations made in connection with
legal proceedings, including certain mortgage-related the sale or securitization of mortgage loans varied
matters. among transactions but were generally detailed
representations applicable to each loan in the portfolio
Certain Mortgage-Related Contingencies. There are
and addressed matters relating to the property, the
multiple areas of focus by regulators, governmental
borrower and the note. These representations generally
agencies and others within the mortgage market that may
included, but were not limited to, the following:
impact originators, issuers, servicers and investors. There
(i) certain attributes of the borrower’s financial status;
remains significant uncertainty surrounding the nature and
(ii) loan-to-value ratios, owner occupancy status and
extent of any potential exposure for participants in this
certain other characteristics of the property; (iii) the
market.
lien position; (iv) the fact that the loan was originated
‰ Representations and Warranties. The firm has not been a in compliance with law; and (v) completeness of the
significant originator of residential mortgage loans. The firm loan documentation.
did purchase loans originated by others and generally
To date, repurchase claims and actual repurchases of
received loan-level representations of the type described
residential mortgage loans based upon alleged breaches of
below from the originators. During the period 2005 through
representations have not been significant and have mainly
2008, the firm sold approximately $10 billion of loans to
involved government-sponsored enterprises. During the
government-sponsored enterprises and approximately
year ended December 2011, the firm repurchased loans
$11 billion of loans to other third parties. In addition, the
with an unpaid principal balance of less than $10 million.
firm transferred loans to trusts and other mortgage
During the year ended December 2010, the firm
securitization vehicles. As of December 2011 and
repurchased loans with an unpaid principal balance of
December 2010, the outstanding balance of the loans
less than $50 million. The loss related to the repurchase of
transferred to trusts and other mortgage securitization
these loans was not material for the years ended
vehicles during the period 2005 through 2008 was
December 2011 and December 2010.
approximately $42 billion and $49 billion, respectively. This
amount reflects paydowns and cumulative losses of Ultimately, the firm’s exposure to claims for repurchase
approximately $83 billion ($17 billion of which are of residential mortgage loans based on alleged breaches of
cumulative losses) as of December 2011 and approximately representations will depend on a number of factors
$76 billion ($14 billion of which are cumulative losses) as of including the following: (i) the extent to which these
December 2010. A small number of these Goldman Sachs- claims are actually made; (ii) the extent to which there are
issued securitizations with an outstanding principal balance underlying breaches of representations that give rise to
of $635 million and total paydowns and cumulative losses of valid claims for repurchase; (iii) in the case of loans
$1.42 billion ($465 million of which are cumulative losses) originated by others, the extent to which the firm could be
as of December 2011, and an outstanding principal balance held liable and, if it is, the firm’s ability to pursue and
of $739 million and total paydowns and cumulative losses of collect on any claims against the parties who made
$1.32 billion ($410 million of which are cumulative losses) representations to the firm; (iv) macro-economic factors,
as of December 2010, were structured with credit protection including developments in the residential real estate
obtained from monoline insurers. In connection with both market; and (v) legal and regulatory developments.
sales of loans and securitizations, the firm provided loan level
Based upon the large number of defaults in residential
representations of the type described below and/or assigned
mortgages, including those sold or securitized by the firm,
the loan level representations from the party from whom the
there is a potential for increasing claims for repurchases.
firm purchased the loans.
However, the firm is not in a position to make a
meaningful estimate of that exposure at this time.

‰ Foreclosure and Other Mortgage Loan Servicing Litton, requires that Group Inc. and GS Bank USA cease
Practices and Procedures. The firm had received a and desist such conduct, and requires that Group Inc. and
number of requests for information from regulators and GS Bank USA, and their boards of directors, take various
other agencies, including state attorneys general and affirmative steps. The Order requires (i) Group Inc. and
banking regulators, as part of an industry-wide focus on GS Bank USA to engage a third-party consultant to
the practices of lenders and servicers in connection with conduct a review of certain foreclosure actions or
foreclosure proceedings and other aspects of mortgage proceedings that occurred or were pending between
loan servicing practices and procedures. The requests January 1, 2009 and December 31, 2010; (ii) the
sought information about the foreclosure and servicing adoption of policies and procedures related to
protocols and activities of Litton, a residential mortgage management of third parties used to outsource residential
servicing subsidiary sold by the firm to a third-party mortgage servicing, loss mitigation or foreclosure; (iii) a
purchaser in the third quarter of 2011. The firm is “validation report” from an independent third-party
cooperating with the requests and these inquiries may consultant regarding compliance with the Order for the
result in the imposition of fines or other regulatory first year; and (iv) submission of quarterly progress
action. In the third quarter of 2010, prior to the firm’s reports as to compliance with the Order by the boards of
sale of Litton, Litton had temporarily suspended directors (or committees thereof) of Group Inc. and GS
evictions and foreclosure and real estate owned sales in a Bank USA.
number of states, including those with judicial
In addition, on September 1, 2011, GS Bank USA entered
foreclosure procedures. Litton resumed these activities
into an Agreement on Mortgage Servicing Practices with
beginning in the fourth quarter of 2010. In connection
the New York State Banking Department, Litton and the
with the sale of Litton, the firm agreed to provide certain
acquirer of Litton relating to the servicing of residential
representations and warranties, and specific indemnities
mortgage loans, and, in a related agreement with the
related to Litton’s servicing and foreclosure practices
New York State Banking Department, Group Inc. agreed
prior to the close of the sale. The liability associated
to forgive 25% of the unpaid principal balance on certain
with certain of these indemnities has been capped. For
delinquent first lien residential mortgage loans owned by
indemnities not subject to a cap, management is unable
Group Inc. or a subsidiary, totaling approximately
to develop an estimate of the maximum potential
$13 million in principal forgiveness.
amount of future payments because no amounts have
yet been specified or claimed. However, management Guaranteed Minimum Death and Income Benefits. In
does not believe, based on currently available connection with its insurance business, the firm is contingently
information, that any payments under these indemnities liable to provide guaranteed minimum death and income benefits
will have a material adverse effect on the firm’s financial to certain contract holders and has established a reserve related to
condition. $5.52 billion and $6.11 billion of contract holder account
balances as of December 2011 and December 2010, respectively,
On September 1, 2011, Group Inc. and GS Bank USA
for such benefits. The weighted average attained age of these
entered into a Consent Order (the Order) with the Board
contract holders was 69 years for both December 2011 and
of Governors of the Federal Reserve System (Federal
December 2010.
Reserve Board) relating to the servicing of residential
mortgage loans. The terms of the Order are substantially The net amount at risk, representing guaranteed minimum
similar and, in many respects, identical to the orders death and income benefits in excess of contract holder
entered into with the Federal Reserve Board by other account balances, was $1.51 billion and $1.60 billion as of
large U.S. financial institutions. The Order sets forth December 2011 and December 2010, respectively. See
various allegations of improper conduct in servicing by Note 17 for further information about insurance liabilities.

Guarantees
The firm enters into various derivatives that meet the clients to complete transactions and fund-related
definition of a guarantee under U.S. GAAP, including guarantees). These guarantees represent obligations to
written equity and commodity put options, written make payments to beneficiaries if the guaranteed party fails
currency contracts and interest rate caps, floors and to fulfill its obligation under a contractual arrangement
swaptions. Disclosures about derivatives are not required if with that beneficiary.
they may be cash settled and the firm has no basis to
The table below presents certain information about
conclude it is probable that the counterparties held the
derivatives that meet the definition of a guarantee and
underlying instruments at inception of the contract. The
certain other guarantees. The maximum payout in the table
firm has concluded that these conditions have been met for
below is based on the notional amount of the contract and
certain large, internationally active commercial and
therefore does not represent anticipated losses. See Note 7
investment bank counterparties and certain other
for further information about credit derivatives that meet
counterparties. Accordingly, the firm has not included such
the definition of a guarantee which are not included below.
contracts in the table below.
Because derivatives are accounted for at fair value, the
The firm, in its capacity as an agency lender, indemnifies
carrying value is considered the best indication of payment/
most of its securities lending customers against losses
performance risk for individual contracts. However, the
incurred in the event that borrowers do not return securities
carrying values below exclude the effect of a legal right of
and the collateral held is insufficient to cover the market
setoff that may exist under an enforceable netting
value of the securities borrowed.
agreement and the effect of netting of cash collateral posted
In the ordinary course of business, the firm provides other under credit support agreements.
financial guarantees of the obligations of third parties (e.g.,
standby letters of credit and other guarantees to enable
As of December 2011
Maximum Payout/Notional Amount by Period of Expiration
Carrying
Value of 2013- 2015- 2017-
in millions Net Liability 2012 2014 2016 Thereafter Total
Derivatives 1 $11,881 $486,244 $206,853 $53,743 $49,576 $796,416
Securities lending indemnifications 2 — 27,798 — — — 27,798
Other financial guarantees 3 205 625 795 1,209 939 3,568
1. These derivatives are risk managed together with derivatives that do not meet the definition of a guarantee, and therefore these amounts do not reflect the firm’s
overall risk related to its derivative activities. As of December 2010, the carrying value of the net liability related to derivative guarantees was $8.26 billion.
2. Collateral held by the lenders in connection with securities lending indemnifications was $28.58 billion as of December 2011. Because the contractual nature of
these arrangements requires the firm to obtain collateral with a market value that exceeds the value of the securities lent to the borrower, there is minimal
performance risk associated with these guarantees.
3. Other financial guarantees excludes certain commitments to issue standby letters of credit that are included in “Commitments to extend credit.” See table in
“Commitments” above for a summary of the firm’s commitments. As of December 2010, the carrying value of the net liability related to other financial guarantees
was $28 million.

Guarantees of Securities Issued by Trusts. The firm has brokerage firms. The firm’s obligations in respect of such
established trusts, including Goldman Sachs Capital I, II transactions are secured by the assets in the client’s account
and III, and other entities for the limited purpose of issuing as well as any proceeds received from the transactions
securities to third parties, lending the proceeds to the firm cleared and settled by the firm on behalf of the client. In
and entering into contractual arrangements with the firm connection with joint venture investments, the firm may
and third parties related to this purpose. The firm does not issue loan guarantees under which it may be liable in the
consolidate these entities. See Note 16 for further event of fraud, misappropriation, environmental liabilities
information about the transactions involving Goldman and certain other matters involving the borrower.
Sachs Capital I, II and III.
The firm is unable to develop an estimate of the maximum
The firm effectively provides for the full and unconditional payout under these guarantees and indemnifications.
guarantee of the securities issued by these entities. Timely However, management believes that it is unlikely the firm
payment by the firm of amounts due to these entities under will have to make any material payments under these
the borrowing, preferred stock and related contractual arrangements, and no material liabilities related to these
arrangements will be sufficient to cover payments due on guarantees and indemnifications have been recognized in
the securities issued by these entities. the consolidated statements of financial condition as of
Management believes that it is unlikely that any
circumstances will occur, such as nonperformance on the Other Representations, Warranties and Indemnifications.
part of paying agents or other service providers, that would The firm provides representations and warranties to
make it necessary for the firm to make payments related to counterparties in connection with a variety of commercial
these entities other than those required under the terms of transactions and occasionally indemnifies them against potential
the borrowing, preferred stock and related contractual losses caused by the breach of those representations and
arrangements and in connection with certain expenses warranties. The firm may also provide indemnifications
incurred by these entities. protecting against changes in or adverse application of certain
U.S. tax laws in connection with ordinary-course transactions
Indemnities and Guarantees of Service Providers. In
such as securities issuances, borrowings or derivatives.
the ordinary course of business, the firm indemnifies and
guarantees certain service providers, such as clearing and In addition, the firm may provide indemnifications to some
custody agents, trustees and administrators, against counterparties to protect them in the event additional taxes
specified potential losses in connection with their acting as are owed or payments are withheld, due either to a change
an agent of, or providing services to, the firm or its in or an adverse application of certain non-U.S. tax laws.
affiliates.
These indemnifications generally are standard contractual
The firm also indemnifies some clients against potential terms and are entered into in the ordinary course of
losses incurred in the event specified third-party service business. Generally, there are no stated or notional
providers, including sub-custodians and third-party amounts included in these indemnifications, and the
brokers, improperly execute transactions. In addition, the contingencies triggering the obligation to indemnify are not
firm is a member of payment, clearing and settlement expected to occur. The firm is unable to develop an estimate
networks as well as securities exchanges around the world of the maximum payout under these guarantees and
that may require the firm to meet the obligations of such indemnifications. However, management believes that it is
networks and exchanges in the event of member defaults. unlikely the firm will have to make any material payments
under these arrangements, and no material liabilities related
In connection with its prime brokerage and clearing
to these arrangements have been recognized in the
businesses, the firm agrees to clear and settle on behalf of its
consolidated statements of financial condition as of
clients the transactions entered into by them with other

Guarantees of Subsidiaries. Group Inc. fully and Note 19.

unconditionally guarantees the securities issued by GS Shareholders’ Equity
Finance Corp., a wholly-owned finance subsidiary of the
firm. Common Equity
Dividends declared per common share were $1.40 in 2011,
Group Inc. has guaranteed the payment obligations of $1.40 in 2010 and $1.05 in 2009. On January 17, 2012,
Goldman, Sachs & Co. (GS&Co.), GS Bank USA, GS Bank Group Inc. declared a dividend of $0.35 per common share
Europe and Goldman Sachs Execution & Clearing, L.P. to be paid on March 29, 2012 to common shareholders of
(GSEC), subject to certain exceptions. record on March 1, 2012.
In November 2008, the firm contributed subsidiaries into On July 1, 2011, the firm issued $103 million of common
GS Bank USA, and Group Inc. agreed to guarantee the stock (774,823 shares) in connection with the acquisition of
reimbursement of certain losses, including credit-related GS Australia.
losses, relating to assets held by the contributed entities. In
connection with this guarantee, Group Inc. also agreed to The firm’s share repurchase program is intended to help
pledge to GS Bank USA certain collateral, including maintain the appropriate level of common equity and to
interests in subsidiaries and other illiquid assets. substantially offset increases in share count over time
resulting from employee share-based compensation. The
In addition, Group Inc. guarantees many of the obligations of its repurchase program is effected primarily through regular
other consolidated subsidiaries on a transaction-by-transaction open-market purchases, the amounts and timing of which
basis, as negotiated with counterparties. Group Inc. is unable to are determined primarily by the firm’s current and
develop an estimate of the maximum payout under its subsidiary projected capital positions (i.e., comparisons of the firm’s
guarantees; however, because these guaranteed obligations are desired level and composition of capital to its actual level
also obligations of consolidated subsidiaries included in the table and composition of capital) and the issuance of shares
above, Group Inc.’s liabilities as guarantor are not separately resulting from employee share-based compensation, but
disclosed. which may also be influenced by general market conditions
Group Inc. has established a program for the issuance of securities and the prevailing price and trading volumes of the firm’s
by Goldman Sachs Secured Finance Limited insured by common stock. Any repurchase of the firm’s common stock
GS Secured Guaranty Company Limited (SGCL), a requires approval by the Federal Reserve Board.
wholly-owned subsidiary of Group Inc. that is a financial During 2011, 2010 and 2009, the firm repurchased
guaranty insurer organized under the laws of Bermuda. The funds 47.0 million, 25.3 million and 19,578 shares of its common
raised by SGCL are used to enter into repurchase transactions stock at an average cost per share of $128.33, $164.48 and
with GS&Co. and Goldman Sachs International (GSI). Group $80.83, for a total cost of $6.04 billion, $4.16 billion and
Inc. has fully and unconditionally guaranteed the securities issued $2 million, respectively, under the share repurchase
by Goldman Sachs Secured Finance Limited, as well as the program. In addition, pursuant to the terms of certain
obligations of GS&Co. and GSI under their respective repurchase share-based compensation plans, employees may remit
transactions. Group Inc. has not guaranteed the obligations of shares to the firm or the firm may cancel restricted stock
SGCL. The assets and liabilities of SGCL are legally separated units (RSUs) to satisfy minimum statutory employee tax
from other assets and liabilities of the firm. The assets of SGCL withholding requirements. Under these plans, during 2011,
will not be available to any holder of its capital stock until the 2010 and 2009, employees remitted 75,517 shares,
claims of creditors have been paid. 164,172 shares and 4,506 shares with a total value of
$12 million, $25 million and $342,153 and the firm
cancelled 12.0 million, 6.2 million and 11.2 million of
RSUs with a total value of $1.91 billion, $972 million and
$863 million, respectively.

Preferred Equity
The table below presents perpetual preferred stock issued and outstanding.
Redemption
Shares Shares Shares Earliest Value
Series Authorized Issued Outstanding Dividend Rate Redemption Date (in millions)
A 50,000 30,000 29,999 3 month LIBOR + 0.75%, April 25, 2010 $ 750
with floor of 3.75% per annum
B 50,000 32,000 32,000 6.20% per annum October 31, 2010 800
C 25,000 8,000 8,000 3 month LIBOR + 0.75%, October 31, 2010 200
D 60,000 54,000 53,999 3 month LIBOR + 0.67%, May 24, 2011 1,350
185,000 124,000 123,998 $3,100
Each share of non-cumulative Series A Preferred Stock, Series Dividends on Series E Preferred Stock, if declared, will be
B Preferred Stock, Series C Preferred Stock and Series D payable semi-annually at a fixed annual rate of 5.79% if the
Preferred Stock issued and outstanding has a par value of stock is issued prior to June 1, 2012 and quarterly
$0.01, has a liquidation preference of $25,000, is represented thereafter, at a rate per annum equal to the greater of
by 1,000 depositary shares and is redeemable at the firm’s (i) three-month LIBOR plus 0.77% and (ii) 4.00%.
option, subject to the approval of the Federal Reserve Board,
Dividends on Series F Preferred Stock, if declared, will be
at a redemption price equal to $25,000 plus declared and
payable quarterly at a rate per annum equal to three-month
unpaid dividends.
LIBOR plus 0.77% if the stock is issued prior to
All series of preferred stock are pari passu and have a September 1, 2012 and quarterly thereafter, at a rate per
preference over the firm’s common stock on liquidation. annum equal to the greater of (i) three-month LIBOR plus
Dividends on each series of preferred stock, if declared, are 0.77% and (ii) 4.00%.
payable quarterly in arrears. The firm’s ability to declare or
The preferred stock may be redeemed at the option of the
pay dividends on, or purchase, redeem or otherwise
firm on the stock purchase dates or any day thereafter,
acquire, its common stock is subject to certain restrictions
subject to approval from the Federal Reserve Board and
in the event that the firm fails to pay or set aside full
certain covenant restrictions governing the firm’s ability to
dividends on the preferred stock for the latest completed
redeem or purchase the preferred stock without issuing
dividend period.
common stock or other instruments with equity-like
In 2007, the Board of Directors of Group Inc. (Board) characteristics.
authorized 17,500.1 shares of Series E Preferred Stock, and
5,000.1 shares of Series F Preferred Stock, in connection
with the APEX Trusts. See Note 16 for further information
about the APEX Trusts.
Under the stock purchase contracts with the APEX Trusts,
Group Inc. will issue $2.25 billion of preferred stock, in the
aggregate, on the relevant stock purchase dates (on or
before June 1, 2013 and September 1, 2013 for Series E and
Series F Preferred Stock, respectively), comprised of one
share of Series E and Series F Preferred Stock to Goldman
Sachs Capital II and III, respectively, for each $100,000
principal amount of subordinated debt held by these trusts.
When issued, each share of Series E and Series F Preferred
Stock will have a par value of $0.01 and a liquidation
preference of $100,000 per share.

In June 2009, Group Inc. repurchased from the U.S. Treasury and certain of its subsidiaries (collectively, Berkshire
the 10.0 million shares of the Company’s Fixed Rate Hathaway) for the stated redemption price of $5.50 billion
Cumulative Perpetual Preferred Stock, Series H (Series H ($110,000 per share), plus accrued and unpaid dividends.
Preferred Stock), that were issued to the U.S. Treasury pursuant In connection with this redemption, the firm recognized a
to the U.S. Treasury’s TARP Capital Purchase Program. The preferred dividend of $1.64 billion (calculated as the
repurchase resulted in a preferred dividend of $426 million difference between the carrying value and the redemption
(calculated as the difference between the carrying value and value of the preferred stock), which is included in the
redemption value of the preferred stock), which is included in consolidated statement of earnings for 2011. Berkshire
the consolidated statement of earnings for 2009. The repurchase Hathaway continues to hold a five-year warrant, issued in
also resulted in the payment of $44 million of accrued dividends. October 2008, to purchase up to 43.5 million shares of
In connection with the issuance of the Series H Preferred Stock common stock at an exercise price of $115.00 per share.
in October 2008, the firm issued a 10-year warrant to the U.S.
On January 12, 2012, Group Inc. declared dividends of
Treasury to purchase up to 12.2 million shares of common
$239.58, $387.50, $255.56 and $255.56 per share of
stock at an exercise price of $122.90 per share. The firm
Series A Preferred Stock, Series B Preferred Stock, Series C
repurchased this warrant in full in July 2009 for $1.1 billion.
Preferred Stock and Series D Preferred Stock, respectively,
This amount was recorded as a reduction to additional paid-in
to be paid on February 10, 2012 to preferred shareholders
capital.
of record on January 26, 2012.
During 2011, the firm redeemed the 50,000 shares of the
The table below presents preferred dividends declared on
firm’s 10% Cumulative Perpetual Preferred Stock, Series G
preferred stock.
(Series G Preferred Stock) held by Berkshire Hathaway Inc.
Year Ended December

2011 2010 2009
per share in millions per share in millions per share in millions
Series A $ 950.51 $ 28 $ 950.51 $ 28 $ 710.94 $ 21
Series B 1,550.00 50 1,550.00 50 1,162.50 38
Series C 1,013.90 8 1,013.90 8 758.34 6
Series D 1,013.90 55 1,013.90 55 758.34 41
Series G 1 2,500.00 125 10,000.00 500 7,500.00 375
Series H 2 — — — — 12.50 125
Total $266 $641 $606
1. Amount for the year ended December 2011 excludes preferred dividends related to the redemption of the firm’s Series G Preferred Stock.
2. Amount for the year ended December 2009 excludes the preferred dividend related to the repurchase of the TARP Series H Preferred Stock, as well as accrued
dividends paid on repurchase of the Series H Preferred Stock.
Accumulated Other Comprehensive Income/(Loss)

The table below presents accumulated other comprehensive income/(loss) by type.
As of December
Currency translation adjustment, net of tax $(225) $(170)
Pension and postretirement liability adjustments, net of tax (374) (229)
Net unrealized gains on available-for-sale securities, net of tax 1 83 113
Total accumulated other comprehensive loss, net of tax $(516) $(286)
1. Substantially all consists of net unrealized gains on securities held by the firm’s insurance subsidiaries as of both December 2011 and December 2010.

Note 20.
Regulation and Capital Adequacy
The Federal Reserve Board is the primary regulator of and growth plans. The minimum Tier 1 leverage ratio is
Group Inc., a bank holding company and a financial 3% for bank holding companies that have received the
holding company under the U.S. Bank Holding Company highest supervisory rating under Federal Reserve Board
Act of 1956. As a bank holding company, the firm is subject guidelines or that have implemented the Federal Reserve
to consolidated regulatory capital requirements that are Board’s risk-based capital measure for market risk.
computed in accordance with the Federal Reserve Board’s Other bank holding companies must have a minimum
capital adequacy regulations currently applicable to bank Tier 1 leverage ratio of 4%.
holding companies (which are based on the ‘Basel 1’
The table below presents information regarding Group
Capital Accord of the Basel Committee on Banking
Inc.’s regulatory capital ratios.
Supervision (Basel Committee)). These capital requirements
are expressed as capital ratios that compare measures of
As of December
capital to risk-weighted assets (RWAs). The firm’s bank
depository institution subsidiaries, including GS Bank USA,
Tier 1 capital $ 63,262 $ 71,233
are subject to similar capital requirements.
Tier 2 capital $ 13,881 $ 13,660
Under the Federal Reserve Board’s capital adequacy Total capital $ 77,143 $ 84,893
requirements and the regulatory framework for prompt Risk-weighted assets $457,027 $444,290
corrective action that is applicable to GS Bank USA, the Tier 1 capital ratio 13.8% 16.0%
Total capital ratio 16.9% 19.1%
firm and its bank depository institution subsidiaries must
Tier 1 leverage ratio 7.0% 8.0%
meet specific capital requirements that involve quantitative
measures of assets, liabilities and certain off-balance-sheet RWAs under the Federal Reserve Board’s risk-based capital
items as calculated under regulatory reporting practices. guidelines are calculated based on the amount of market
The firm and its bank depository institution subsidiaries’ risk and credit risk. RWAs for market risk are determined
capital amounts, as well as GS Bank USA’s prompt by reference to the firm’s Value-at-Risk (VaR) models,
corrective action classification, are also subject to supplemented by other measures to capture risks not
qualitative judgments by the regulators about components, reflected in VaR models. Credit risk for on-balance sheet
risk weightings and other factors. assets is based on the balance sheet value. For off-balance
Many of the firm’s subsidiaries, including GS&Co. and the sheet exposures, including OTC derivatives and
firm’s other broker-dealer subsidiaries, are subject to commitments, a credit equivalent amount is calculated
separate regulation and capital requirements as described based on the notional amount of each trade. All such assets
below. and amounts are then assigned a risk weight depending on,
among other things, whether the counterparty is a
Group Inc. sovereign, bank or qualifying securities firm or other entity
Federal Reserve Board regulations require bank holding (or if collateral is held, depending on the nature of the
companies to maintain a minimum Tier 1 capital ratio of collateral).
4% and a minimum total capital ratio of 8%. The required
minimum Tier 1 capital ratio and total capital ratio in order Tier 1 leverage ratio is defined as Tier 1 capital under Basel
to be considered a “well-capitalized” bank holding 1 divided by average adjusted total assets (which includes
company under the Federal Reserve Board guidelines are adjustments for disallowed goodwill and intangible assets,
6% and 10%, respectively. Bank holding companies may and the carrying value of equity investments in
be expected to maintain ratios well above the minimum non-financial companies that are subject to deductions
levels, depending on their particular condition, risk profile from Tier 1 capital).

Regulatory Reform
The firm is currently working to implement the requirements The Basel Committee has published its final provisions for
set out in the Federal Reserve Board’s Risk-Based Capital assessing the global systemic importance of banking
Standards: Advanced Capital Adequacy Framework — institutions and the range of additional Tier 1 common
Basel 2, as applicable to Group Inc. as a bank holding equity that should be maintained by banking institutions
company (Basel 2), which are based on the advanced deemed to be globally systemically important. The additional
approaches under the Revised Framework for the capital for these institutions would initially range from 1% to
International Convergence of Capital Measurement and 2.5% of Tier 1 common equity and could be as much as
Capital Standards issued by the Basel Committee. U.S. 3.5% for a bank that increases its systemic footprint (e.g., by
banking regulators have incorporated the Basel 2 framework increasing total assets). The firm was one of 29 institutions
into the existing risk-based capital requirements by requiring identified by the Financial Stability Board (established at the
that internationally active banking organizations, such as direction of the leaders of the Group of 20) as globally
Group Inc., adopt Basel 2, once approved to do so by systemically important under the Basel Committee’s
regulators. As required by the Dodd-Frank Act, U.S. banking methodology. Therefore, depending upon the manner and
regulators have adopted a rule that requires large banking timing of the U.S. banking regulators’ implementation of the
organizations, upon adoption of Basel 2, to continue to Basel Committee’s methodology, the firm expects that the
calculate risk-based capital ratios under both Basel 1 and Basel minimum Tier 1 common ratio requirement applicable to the
2. For each of the Tier 1 and Total capital ratios, the lower of firm will include this additional capital assessment. The final
the Basel 1 and Basel 2 ratios calculated will be used to determination of whether an institution is classified as
determine whether the bank meets its minimum risk-based globally systemically important and the calculation of the
capital requirements. required additional capital amount is expected to be
disclosed by the Basel Committee no later than
In December 2011, the U.S. federal bank regulatory
November 2014 based on data through the end of 2013.
agencies issued revised proposals to modify their market
risk regulatory capital requirements for banking The Federal Reserve Board has proposed regulations
organizations in the United States that have significant designed to strengthen the regulation and supervision of large
trading activities. These modifications are designed to bank holding companies and systemically important
address the adjustments to the market risk framework that nonbank financial firms. These proposals address risk-based
were announced by the Basel Committee in June 2010 capital and leverage requirements, liquidity requirements,
(Basel 2.5), as well as the prohibition in the use of stress tests, single counterparty limits and early remediation
credit ratings, as required by the Dodd-Frank Act. Once requirements that are designed to address financial weakness
implemented, it is likely that these changes will result in at an early stage. Although many of the proposals mirror
increased capital requirements for market risk. initiatives to which bank holding companies are already
subject, their full impact on the firm will not be known with
Additionally, the guidelines issued by the Basel Committee
certainty until the rules are finalized.
in December 2010 (Basel 3) revise the definition of Tier 1
capital, introduce Tier 1 common equity as a regulatory The Dodd-Frank Act will subject the firm at a firmwide
metric, set new minimum capital ratios (including a new level to the same leverage and risk-based capital
“capital conservation buffer,” which must be composed requirements that apply to depository institutions and
exclusively of Tier 1 common equity and will be in addition directs banking regulators to impose additional capital
to the minimum capital ratios), introduce a Tier 1 leverage requirements as disclosed above. The Federal Reserve
ratio within international guidelines for the first time, and Board is expected to adopt the new leverage and risk-based
make substantial revisions to the computation of RWAs for capital regulations in 2012. As a consequence of these
credit exposures. Implementation of the new requirements changes, Tier 1 capital treatment for the firm’s junior
is expected to take place over the next several years. The subordinated debt issued to trusts will be phased out over a
federal banking agencies have not yet proposed rules to three-year period beginning on January 1, 2013. The
implement the Basel 3 guidelines in the United States. interaction among the Dodd-Frank Act, the Basel
Committee’s proposed changes and other proposed or
announced changes from other governmental entities and
regulators adds further uncertainty to the firm’s future
capital requirements and those of our subsidiaries.

A number of other governmental entities and regulators, The table below presents information regarding GS Bank
including the European Union (EU) and the U.K.’s USA’s regulatory capital ratios under Basel 1 as
Financial Services Authority (FSA), have also proposed or implemented by the Federal Reserve Board.
announced changes that will result in increased capital
requirements for financial institutions. As of December
As a consequence of these developments, the firm expects
Tier 1 capital $ 19,251 $18,604
minimum capital ratios required to be maintained under Tier 2 capital 61 5,004
Federal Reserve Board regulations will be increased and Total capital 19,257 23,608
changes in the prescribed calculation methodology are Risk-weighted assets 112,824 98,719
expected to result in higher RWAs and lower capital ratios Tier 1 capital ratio 17.1% 18.8%
than those currently computed. Total capital ratio 17.1% 1 23.9%
Tier 1 leverage ratio 18.5% 19.5%
The capital and liquidity requirements of several of the firm’s
subsidiaries will also be impacted in the future by the various 1. The decrease from December 2010 to December 2011 is primarily related to
GS Bank USA’s repayment of $5.00 billion of subordinated debt to Group Inc.
developments arising from the Basel Committee, the Dodd- and $1.00 billion dividend to Group Inc. during 2011.
Frank Act, and other governmental entities and regulators.
GS Bank USA is currently working to implement the Basel 2
Bank Subsidiaries framework, as implemented by the Federal Reserve Board.
GS Bank USA, an FDIC-insured, New York State-chartered Similar to the firm’s requirement as a bank holding
bank and a member of the Federal Reserve System, is company, GS Bank USA is required to adopt Basel 2, once
supervised and regulated by the Federal Reserve Board, the approved to do so by regulators. In addition, the capital
FDIC and the New York State Department of Financial requirements for GS Bank USA are expected to be impacted
Services (formerly the New York State Banking by changes to the Basel Committee’s capital guidelines, as
Department) and is subject to minimum capital outlined above. Furthermore, the firm expects that GS Bank
requirements (described below) that are calculated in a USA will be impacted by aspects of the Dodd-Frank Act,
manner similar to those applicable to bank holding including stress test and resolution plan requirements.
companies. GS Bank USA computes its capital ratios in
accordance with the regulatory capital guidelines currently The deposits of GS Bank USA are insured by the FDIC to
applicable to state member banks, which are based on the extent provided by law. The Federal Reserve Board
Basel 1 as implemented by the Federal Reserve Board, for requires depository institutions to maintain cash reserves
purposes of assessing the adequacy of its capital. Under the with a Federal Reserve Bank. The amount deposited by the
regulatory framework for prompt corrective action that is firm’s depository institution held at the Federal Reserve
applicable to GS Bank USA, in order to be considered a Bank was approximately $40.06 billion and $28.12 billion
“well-capitalized” depository institution, GS Bank USA as of December 2011 and December 2010, respectively,
must maintain a Tier 1 capital ratio of at least 6%, a total which exceeded required reserve amounts by $39.51 billion
capital ratio of at least 10% and a Tier 1 leverage ratio of at and $27.45 billion as of December 2011 and December
least 5%. GS Bank USA has agreed with the Federal Reserve 2010, respectively.
Board to minimum capital ratios in excess of these “well-
capitalized” levels. Accordingly, for a period of time, GS
Bank USA is expected to maintain a Tier 1 capital ratio of at
least 8%, a total capital ratio of at least 11% and a Tier 1
leverage ratio of at least 6%. As noted in the table below, GS
Bank USA was in compliance with these minimum capital
requirements as of December 2011 and December 2010.

Transactions between GS Bank USA and its subsidiaries Insurance Subsidiaries

and Group Inc. and its subsidiaries and affiliates (other The firm has U.S. insurance subsidiaries that are subject to
than, generally, subsidiaries of GS Bank USA) are regulated state insurance regulation and oversight in the states in
by the Federal Reserve Board. These regulations generally which they are domiciled and in the other states in which
limit the types and amounts of transactions (including loans they are licensed. In addition, certain of the firm’s insurance
to and borrowings from GS Bank USA) that may take place subsidiaries outside of the U.S. are regulated by the FSA and
and generally require those transactions to be on an arm’s- certain are regulated by the Bermuda Monetary Authority.
length basis. The firm’s insurance subsidiaries were in compliance with
all regulatory capital requirements as of December 2011
Goldman Sachs International Bank, a wholly-owned credit
and December 2010.
institution, regulated by the FSA, and GS Bank Europe, a
wholly-owned credit institution, regulated by the Central Other Non-U.S. Regulated Subsidiaries
Bank of Ireland, are both subject to minimum capital The firm’s principal non-U.S. regulated subsidiaries include
requirements. As of December 2011 and December 2010, GSI and Goldman Sachs Japan Co., Ltd. (GSJCL). GSI, the
Goldman Sachs International Bank and GS Bank Europe firm’s regulated U.K. broker-dealer, is subject to the capital
were in compliance with all regulatory capital requirements. requirements imposed by the FSA. GSJCL, the firm’s
regulated Japanese broker-dealer, is subject to the capital
Broker-Dealer Subsidiaries
requirements imposed by Japan’s Financial Services Agency.
The firm’s U.S. regulated broker-dealer subsidiaries include
As of December 2011 and December 2010, GSI and GSJCL
GS&Co. and GSEC. GS&Co. and GSEC are registered U.S.
were in compliance with their local capital adequacy
broker-dealers and futures commission merchants, and are
requirements. Certain other non-U.S. subsidiaries of the firm
subject to regulatory capital requirements, including those
are also subject to capital adequacy requirements
imposed by the SEC, the U.S. Commodity Futures Trading
promulgated by authorities of the countries in which they
Commission (CFTC), Chicago Mercantile Exchange, the
operate. As of December 2011 and December 2010, these
Financial Industry Regulatory Authority, Inc. (FINRA) and
subsidiaries were in compliance with their local capital
the National Futures Association. Rule 15c3-1 of the SEC
adequacy requirements.
and Rule 1.17 of the CFTC specify uniform minimum net
capital requirements, as defined, for their registrants, and Restrictions on Payments
also effectively require that a significant part of the The regulatory requirements referred to above restrict
registrants’ assets be kept in relatively liquid form. GS&Co. Group Inc.’s ability to withdraw capital from its regulated
and GSEC have elected to compute their minimum capital subsidiaries. As of December 2011 and December 2010,
requirements in accordance with the “Alternative Net approximately $25.53 billion and $24.70 billion,
Capital Requirement” as permitted by Rule 15c3-1. respectively, of net assets of regulated subsidiaries were
restricted as to the payment of dividends to Group Inc. In
As of December 2011, GS&Co. had regulatory net capital,
addition to limitations on the payment of dividends
as defined by Rule 15c3-1, of $11.24 billion, which
imposed by federal and state laws, the Federal Reserve
exceeded the amount required by $9.34 billion. As of
Board, the FDIC and the New York State Department of
December 2011, GSEC had regulatory net capital, as
Financial Services have authority to prohibit or to limit the
defined by Rule 15c3-1, of $2.10 billion, which exceeded
payment of dividends by the banking organizations they
the amount required by $2.00 billion.
supervise (including GS Bank USA) if, in the relevant
In addition to its alternative minimum net capital regulator’s opinion, payment of a dividend would
requirements, GS&Co. is also required to hold tentative net constitute an unsafe or unsound practice in the light of the
capital in excess of $1 billion and net capital in excess of financial condition of the banking organization.
$500 million in accordance with the market and credit risk
standards of Appendix E of Rule 15c3-1. GS&Co. is also
required to notify the SEC in the event that its tentative net
capital is less than $5 billion. As of December 2011 and
December 2010, GS&Co. had tentative net capital and net
capital in excess of both the minimum and the notification
requirements.

Note 21.
Earnings Per Common Share
Basic earnings per common share (EPS) is calculated by basic EPS and, in addition reflects the dilutive effect of the
dividing net earnings applicable to common shareholders common stock deliverable for stock warrants and options
by the weighted average number of common shares and for RSUs for which future service is required as a
outstanding. Common shares outstanding includes condition to the delivery of the underlying common stock.
common stock and RSUs for which no future service is
The table below presents the computations of basic and
required as a condition to the delivery of the underlying
diluted EPS.
common stock. Diluted EPS includes the determinants of
Year Ended December

in millions, except per share amounts 2011 2010 2009
Numerator for basic and diluted EPS — net earnings applicable to common shareholders $2,510 $7,713 $12,192
Denominator for basic EPS — weighted average number of common shares 524.6 542.0 512.3
Effect of dilutive securities:
RSUs 14.6 15.0 15.7
Stock options and warrants 17.7 28.3 22.9
Dilutive potential common shares 32.3 43.3 38.6
Denominator for diluted EPS — weighted average number of common shares and dilutive
potential common shares 556.9 585.3 550.9
Basic EPS $ 4.71 $14.15 $ 23.74
Diluted EPS 4.51 13.18 22.13
In the table above, unvested share-based payment awards The diluted EPS computations in the table above do not
that have non-forfeitable rights to dividends or dividend include the following:
equivalents are treated as a separate class of securities in
calculating EPS. The impact of applying this methodology
was a reduction in basic EPS of $0.07, $0.08 and $0.06 for
the years ended December 2011, December 2010 and
Year Ended December

in millions 2011 2010 2009
Number of antidilutive RSUs and common shares underlying antidilutive stock options and warrants 9.2 6.2 24.7

Note 22.
Transactions with Affiliated Funds
The firm has formed numerous nonconsolidated investment The firm has provided voluntary financial support to
funds with third-party investors. The firm generally acts as certain of its funds that have experienced significant
the investment manager for these funds and, as such, is reductions in capital and liquidity or had limited access to
entitled to receive management fees and, in certain cases, the debt markets during the financial crisis. As of
advisory fees or incentive fees from these funds. December 2011 and December 2010, the firm had exposure
Additionally, the firm invests alongside the third-party to these funds in the form of loans and guarantees of
investors in certain funds. $289 million and $253 million, respectively, primarily
related to certain real estate funds. In addition, as of
The tables below present fees earned from affiliated funds,
December 2011 and 2010, the firm had outstanding
fees receivable from affiliated funds and the aggregate
commitments to extend credit to these funds of $0 and
carrying value of the firm’s interests in affiliated funds.
$160 million, respectively.
Year Ended December The firm may provide additional voluntary financial
in millions 2011 2010 2009 support to these funds if they were to experience significant
Fees earned from affiliated funds $2,789 $2,882 $2,484 financial distress; however, such amounts are not expected
to be material to the firm. In the ordinary course of
business, the firm may also engage in other activities with
As of December
these funds, including, among others, securities lending,
trade execution, market making, custody, and acquisition
Fees receivable from funds $ 721 $ 886
and bridge financing. See Note 18 for the firm’s investment
Aggregate carrying value of interests in funds 14,960 14,773
commitments related to these funds.

Note 23.
Interest Income and Interest Expense
Interest income is recorded on an accrual basis based on sources of interest income and interest expense.
contractual interest rates. The table below presents the
Year Ended December

in millions 2011 2010 2009
Interest income
Deposits with banks $ 125 $ 86 $ 65
Securities borrowed, securities purchased under agreements to resell and federal funds sold 666 540 951
Financial instruments owned, at fair value 10,718 10,346 11,106
Other interest 1 1,665 1,337 1,785
Total interest income 13,174 12,309 13,907
Interest expense
Deposits 280 304 415
Securities loaned and securities sold under agreements to repurchase 905 708 1,317
Financial instruments sold, but not yet purchased, at fair value 2,464 1,859 1,854
Short-term borrowings 2 526 453 623
Long-term borrowings 2 3,439 3,155 2,585
Other interest 3 368 327 (294)
Total interest expense 7,982 6,806 6,500
Net interest income $ 5,192 $ 5,503 $ 7,407
1. Primarily includes interest income on customer debit balances and other interest-earning assets.
2. Includes interest on unsecured borrowings and other secured financings.
3. Primarily includes interest expense on customer credit balances and other interest-bearing liabilities.

Note 24.
Income Taxes
Provision for Income Taxes
Income taxes are provided for using the asset and liability The tables below present the components of the provision/
method under which deferred tax assets and liabilities are (benefit) for taxes and a reconciliation of the U.S. federal
recognized for temporary differences between the financial statutory income tax rate to the firm’s effective income tax
reporting and tax bases of assets and liabilities. The firm rate.
reports interest expense related to income tax matters in
“Provision for taxes” and income tax penalties in “Other
expenses.”
Year Ended December

in millions 2011 2010 2009
Current taxes
U.S. federal $ 405 $1,791 $4,039
State and local 392 325 594
Non-U.S. 204 1,083 2,242
Total current tax expense 1,001 3,199 6,875
Deferred taxes
U.S. federal 683 1,516 (763)
State and local 24 162 (130)
Non-U.S. 19 (339) 462
Total deferred tax (benefit)/expense 726 1,339 (431)
Provision for taxes $1,727 $4,538 $6,444
Year Ended December

2011 2010 2009
U.S. federal statutory income tax rate 35.0% 35.0% 35.0%
State and local taxes, net of U.S. federal income tax effects 4.4 2.5 1.5
Tax credits (1.6) (0.7) (0.3)
Non-U.S. operations (6.7) (2.3) (3.5)
Tax-exempt income, including dividends (2.4) (1.0) (0.4)
Other (0.7) 1.7 1 0.2
Effective income tax rate 28.0% 35.2% 32.5%
1. Primarily includes the effect of the SEC settlement of $550 million, substantially all of which is non-deductible.

Deferred Income Taxes

Deferred income taxes reflect the net tax effects of deferred tax assets to the amount that more likely than not
temporary differences between the financial reporting and will be realized. Tax assets and liabilities are presented as a
tax bases of assets and liabilities. These temporary component of “Other assets” and “Other liabilities and
differences result in taxable or deductible amounts in future accrued expenses,” respectively.
years and are measured using the tax rates and laws that
The table below presents the significant components of
will be in effect when such differences are expected to
deferred tax assets and liabilities.
reverse. Valuation allowances are established to reduce
As of December
Deferred tax assets

Compensation and benefits $3,126 $3,397
Unrealized losses 849 731
ASC 740 asset related to unrecognized tax benefits 569 972
Non-U.S. operations 662 652
Foreign tax credits 12 11
Net operating losses 213 250
Occupancy-related 110 129
Other comprehensive income-related 168 68
Other, net 581 473
6,290 6,683
Valuation allowance 1 (65) (50)
Total deferred tax assets 2 $6,225 $6,633
Depreciation and amortization 1,959 1,647
Other comprehensive income-related 36 130
Total deferred tax liabilities 2 $1,995 $1,777
1. Relates primarily to the ability to utilize losses in various tax jurisdictions.

2. Before netting within tax jurisdictions.

The firm has recorded deferred tax assets of $213 million The firm permanently reinvests eligible earnings of certain
and $250 million as of December 2011 and December foreign subsidiaries and, accordingly, does not accrue any
2010, respectively, in connection with U.S. federal, state U.S. income taxes that would arise if such earnings were
and local and foreign net operating loss carryforwards. repatriated. As of December 2011 and December 2010, this
The firm also recorded a valuation allowance of $59 policy resulted in an unrecognized net deferred tax liability
million and $42 million as of December 2011 and of $3.32 billion and $2.67 billion, respectively, attributable
December 2010, respectively, related to these net to reinvested earnings of $20.63 billion and $17.70 billion,
operating loss carryforwards. As of December 2011, the respectively.
U.S. federal, state and local, and foreign net operating loss
carryforwards were $96 million, $1.65 billion and Unrecognized Tax Benefits
$378 million, respectively. If not utilized, the U.S. federal The firm recognizes tax positions in the financial statements
net operating loss carryforward will begin to expire in only when it is more likely than not that the position will be
2017 and the state and local net operating loss sustained on examination by the relevant taxing authority
carryforwards will begin to expire in 2012. The foreign based on the technical merits of the position. A position
net operating loss carryforwards can be carried forward that meets this standard is measured at the largest amount
indefinitely. The firm had foreign tax credit carryforwards of benefit that will more likely than not be realized on
of $12 million and $11 million as of December 2011 and settlement. A liability is established for differences between
December 2010, respectively. The firm recorded a related positions taken in a tax return and amounts recognized in
net deferred income tax asset of $6 million and $5 million the financial statements.
as of December 2011 and December 2010, respectively. As of December 2011 and December 2010, the accrued liability
These carryforwards will begin to expire in 2013. for interest expense related to income tax matters and income tax
penalties was $233 million and $213 million, respectively. The
The firm had capital loss carryforwards of $6 million and
firm recognized $21 million, $28 million and $62 million of
$12 million as of December 2011 and December 2010,
interest and income tax penalties for the years ended
respectively. The firm recorded a related net deferred
December 2011, December 2010 and December 2009,
income tax asset of $2 million as of both December 2011
respectively. It is reasonably possible that unrecognized tax
and December 2010. These carryforwards expire in 2013.
benefits could change significantly during the twelve months
subsequent to December 2011 due to potential audit settlements.
The valuation allowance increased by $15 million and
At this time, it is not possible to estimate the change or its impact
decreased by $24 million during 2011 and 2010,
on the firm’s effective tax rate over the next twelve months.
respectively. The increase was due to losses considered
more likely than not to expire unused. The decrease was The table below presents the changes in the liability for
primarily due to the utilization of losses previously unrecognized tax benefits, which is recorded in “Other
considered more likely than not to expire unused. liabilities and accrued expenses.” See Note 17 for further
information.
As of December
in millions 2011 2010 2009
Balance, beginning of year $2,081 $1,925 $1,548
Increases based on tax positions related to the current year 171 171 143
Increases based on tax positions related to prior years 278 162 379
Decreases related to tax positions of prior years (41) (104) (19)
Decreases related to settlements (638) (128) (91)
Acquisitions/(dispositions) 47 56 —
Exchange rate fluctuations (11) (1) (35)
Balance, end of year $1,887 $2,081 $1,925
Related deferred income tax asset 1 $ 569 $ 972 $1,004
Net unrecognized tax benefit 2 1,318 1,109 921
1. Included in “Other assets.” See Note 12.

2. If recognized, the net tax benefit would reduce the firm’s effective income tax rate.

Regulatory Tax Examinations Note 25.

The firm is subject to examination by the U.S. Internal Business Segments
Revenue Service (IRS) and other taxing authorities in
jurisdictions where the firm has significant business In the fourth quarter of 2010, the firm reorganized its three
operations, such as the United Kingdom, Japan, Hong previous reportable business segments into four new
Kong, Korea and various states, such as New York. The tax reportable business segments: Investment Banking,
years under examination vary by jurisdiction. The firm Institutional Client Services, Investing & Lending and
believes that during 2012, certain audits have a reasonable Investment Management. Prior periods are presented on a
possibility of being completed. The firm does not expect comparable basis.
completion of these audits to have a material impact on the Basis of Presentation
firm’s financial condition but it may be material to In reporting segments, certain of the firm’s business lines
operating results for a particular period, depending, in part, have been aggregated where they have similar economic
on the operating results for that period. characteristics and are similar in each of the following
The table below presents the earliest tax years that remain areas: (i) the nature of the services they provide, (ii) their
subject to examination by major jurisdiction. methods of distribution, (iii) the types of clients they serve
and (iv) the regulatory environments in which they operate.
As of
Jurisdiction December 2011 The cost drivers of the firm taken as a whole —
U.S. Federal 1 2005
compensation, headcount and levels of business activity —
New York State and City 2 2004 are broadly similar in each of the firm’s business segments.
United Kingdom 2007 Compensation and benefits expenses in the firm’s segments
Japan 3 2008 reflect, among other factors, the overall performance of the
Hong Kong 2005 firm as well as the performance of individual businesses.
Korea 2008 Consequently, pre-tax margins in one segment of the firm’s
1. IRS examination of fiscal 2008 through calendar 2010 began during 2011. IRS business may be significantly affected by the performance
examination of fiscal 2005, 2006 and 2007 began during 2008. IRS of the firm’s other business segments.
examination of fiscal 2003 and 2004 has been completed, but the liabilities
for those years are not yet final. The firm allocates revenues and expenses among the four
2. New York State and City examination of fiscal 2004, 2005 and 2006 began in reportable business segments. Due to the integrated nature
2008.
of these segments, estimates and judgments are made in
3. Japan National Tax Agency examination of fiscal 2005 through 2009 began
during the first quarter of 2010. The examinations have been completed, but allocating certain revenue and expense items. Transactions
the liabilities for 2008 and 2009 are not yet final. between segments are based on specific criteria or
All years subsequent to the above remain open to approximate third-party rates. Total operating expenses
examination by the taxing authorities. The firm believes include corporate items that have not been allocated to
that the liability for unrecognized tax benefits it has individual business segments. The allocation process is
established is adequate in relation to the potential for based on the manner in which management views the
additional assessments. business of the firm.

The segment information presented in the table below is ‰ Overhead expenses not directly allocable to specific
prepared according to the following methodologies: segments are allocated ratably based on direct segment
expenses.
‰ Revenues and expenses directly associated with each
segment are included in determining pre-tax earnings. Management believes that the following information
provides a reasonable representation of each segment’s
‰ Net revenues in the firm’s segments include allocations
contribution to consolidated pre-tax earnings and total
of interest income and interest expense to specific
assets.
securities, commodities and other positions in relation to
the cash generated by, or funding requirements of, such
underlying positions. Net interest is included in segment
net revenues as it is consistent with the way in which
management assesses segment performance.
For the Years Ended or as of December

in millions 2011 2010 2009
Investment Banking Net revenues $ 4,355 $ 4,810 $ 4,984
Pre-tax earnings $ 1,393 $ 1,299 $ 1,502
Segment assets $ 1,690 $ 1,870 $ 1,759
Institutional Client Services Net revenues 1 $ 17,280 $ 21,796 $ 32,719

Pre-tax earnings $ 4,583 $ 7,505 $ 19,028
Segment assets $834,780 $819,765 $751,851
Investing & Lending Net revenues $ 2,142 $ 7,541 $ 2,863

Pre-tax earnings/(loss) $ (531) $ 4,180 $ (660)
Segment assets $ 76,753 $ 78,771 $ 83,851
Investment Management Net revenues $ 5,034 $ 5,014 $ 4,607

Pre-tax earnings $ 1,016 $ 963 $ 934
Segment assets $ 10,002 $ 10,926 $ 11,481
Total Net revenues $ 28,811 $ 39,161 $ 45,173

Pre-tax earnings $ 6,169 $ 12,892 $ 19,829
Total assets $923,225 $911,332 $848,942
1. Includes $115 million, $111 million and $36 million for the years ended December 2011, December 2010 and December 2009, respectively, of realized gains on
available-for-sale securities held in the firm’s insurance subsidiaries.

Operating expenses in the table above include the following Geographic Information
expenses that have not been allocated to the firm’s Due to the highly integrated nature of international financial
segments: markets, the firm manages its businesses based on the
profitability of the enterprise as a whole. The methodology
‰ net provisions for a number of litigation and regulatory
for allocating profitability to geographic regions is dependent
proceedings of $175 million, $682 million and
on estimates and management judgment because a
$104 million for the years ended December 2011,
significant portion of the firm’s activities require cross-
December 2010 and December 2009, respectively;
border coordination in order to facilitate the needs of the
‰ charitable contributions of $103 million, $345 million and firm’s clients.
$810 million for the years ended December 2011,
Geographic results are generally allocated as follows:
December 2010 and December 2009, respectively; and
‰ Investment Banking: location of the client and investment
‰ real estate-related exit costs of $14 million, $28 million
banking team.
and $61 million for the years ended
December 2011, December 2010 and December 2009, ‰ Institutional Client Services: Fixed Income, Currency and
respectively. Commodities Client Execution, and Equities (excluding
Securities Services): location of the market-making desk;
The tables below present the amounts of net interest income
Securities Services: location of the primary market for the
included in net revenues, and the amounts of depreciation
underlying security.
and amortization expense included in pre-tax earnings.
‰ Investing & Lending: Investing: location of the investment;
Year Ended December Lending: location of the client.
in millions 2011 2010 2009
‰ Investment Management: location of the sales team.
Investment Banking $ (6) $ — $ —
Institutional Client Services 4,360 4,692 6,951
Investing & Lending 635 609 242
Investment Management 203 202 214
Total net interest $5,192 $5,503 $7,407
Year Ended December

in millions 2011 2010 2009
Investment Banking $ 174 $ 172 $ 156
Institutional Client Services 944 1,109 775
Investing & Lending 563 422 793
Investment Management 188 200 214
Total depreciation and
amortization 1 $1,869 $1,904 $1,943
1. Includes real estate-related exit costs of $1 million and $5 million for the
years ended December 2010 and December 2009, respectively, that have
not been allocated to the firm’s segments.

The table below presents the total net revenues, pre-tax well as the percentage of total net revenues, pre-tax
earnings and net earnings of the firm by geographic region earnings and net earnings (excluding Corporate) for each
allocated based on the methodology referred to above, as geographic region.
Year Ended December

$ in millions 2011 2010 2009
Net revenues
Americas 1 $17,873 62% $21,564 55% $25,313 56%
EMEA 2 7,074 25 10,449 27 11,595 26
Asia 3, 4 3,864 13 7,148 18 8,265 18
Total net revenues $28,811 100% $39,161 100% $45,173 100%
Pre-tax earnings
Americas 1 $ 5,466 85% $ 7,934 57% $11,461 56%
EMEA 2 1,226 19 3,080 22 5,508 26
Asia 3 (231) (4) 2,933 21 3,835 18
Subtotal 6,461 100% 13,947 100% 20,804 100%
Corporate 5 (292) (1,055) (975)
Total pre-tax earnings $ 6,169 $12,892 $19,829
Net earnings
Americas 1 $ 3,624 78% $ 4,917 53% $ 7,120 51%
EMEA 2 1,117 24 2,236 24 4,201 30
Asia 3 (103) (2) 2,083 23 2,689 19
Subtotal 4,638 100% 9,236 100% 14,010 100%
Corporate (196) (882) (625)
Total net earnings $ 4,442 $ 8,354 $13,385
1. Substantially all relates to the U.S.

2. EMEA (Europe, Middle East and Africa). Pre-tax earnings and net earnings include the impact of the U.K. bank payroll tax for the year ended December 2010.
3. Asia also includes Australia and New Zealand.
4. The decline in net revenues in Asia compared with 2010 primarily reflects lower results in Investing & Lending, principally due to losses from public equities,
reflecting a significant decline in equity markets in Asia during 2011.
5. Consists of net provisions for a number of litigation and regulatory proceedings of $175 million, $682 million and $104 million for the years ended
December 2011, December 2010 and December 2009, respectively; charitable contributions of $103 million, $345 million and $810 million for the years ended
December 2011, December 2010 and December 2009, respectively; and real estate-related exit costs of $14 million, $28 million and $61 million for the years ended
December 2011, December 2010 and December 2009, respectively.

Note 26.
Credit Concentrations
Credit concentrations may arise from market making, client To reduce credit exposures, the firm may enter into
facilitation, investing, underwriting, lending and collateralized agreements with counterparties that permit the firm to
transactions and may be impacted by changes in economic, offset receivables and payables with such counterparties
industry or political factors. The firm seeks to mitigate credit risk and/or enable the firm to obtain collateral on an upfront or
by actively monitoring exposures and obtaining collateral from contingent basis. Collateral obtained by the firm related to
counterparties as deemed appropriate. derivative assets is principally cash and is held by the firm
or a third-party custodian. Collateral obtained by the firm
While the firm’s activities expose it to many different
related to resale agreements and securities borrowed
industries and counterparties, the firm routinely executes a
transactions is primarily U.S. government and federal
high volume of transactions with asset managers,
agency obligations and other sovereign obligations. See
investment funds, commercial banks, brokers and dealers,
Note 9 for further information about collateralized
clearing houses and exchanges, which results in significant
agreements and financings.
credit concentrations.
The table below presents U.S. government and federal
In the ordinary course of business, the firm may also be
agency obligations, and other sovereign obligations that
subject to a concentration of credit risk to a particular
collateralize resale agreements and securities borrowed
counterparty, borrower or issuer, including sovereign
transactions (including those in “Cash and securities
issuers, or to a particular clearing house or exchange.
segregated for regulatory and other purposes”). Because the
The table below presents the credit concentrations in assets firm’s primary credit exposure on such transactions is to the
held by the firm. As of December 2011 and December 2010, counterparty to the transaction, the firm would be exposed
the firm did not have credit exposure to any other to the collateral issuer only in the event of counterparty
counterparty that exceeded 2% of total assets. default.
As of December As of December
$ in millions 2011 2010 in millions 2011 2010
U.S. government and federal agency U.S. government and federal agency
obligations 1 $103,468 $96,350 obligations $ 94,603 $121,366
% of total assets 11.2% 10.6% Other sovereign obligations 1 110,178 73,357
Other sovereign obligations 1, 2 $ 49,025 $40,379
1. Principally consisting of securities issued by the governments of Germany
% of total assets 5.3% 4.4% and France.
1. Included in “Financial instruments owned, at fair value” and “Cash and

securities segregated for regulatory and other purposes.”
2. Principally consisting of securities issued by the governments of the United
Kingdom, Japan, and Germany as of December 2011, and the United
Kingdom, Japan and France as of December 2010.

Note 27.
Legal Proceedings
The firm is involved in a number of judicial, regulatory and Management is generally unable to estimate a range of
arbitration proceedings (including those described below) reasonably possible loss for proceedings other than those
concerning matters arising in connection with the conduct included in the estimate above, including where (i) plaintiffs
of the firm’s businesses. Many of these proceedings are in have not claimed an amount of money damages, unless
early stages, and many of these cases seek an indeterminate management can otherwise determine an appropriate
amount of damages. amount, (ii) the proceedings are in early stages, (iii) there is
uncertainty as to the likelihood of a class being certified or
Under ASC 450 an event is “reasonably possible” if “the
the ultimate size of the class, (iv) there is uncertainty as to
chance of the future event or events occurring is more than
the outcome of pending appeals or motions, (v) there are
remote but less than likely” and an event is “remote” if “the
significant factual issues to be resolved, and/or (vi) there are
chance of the future event or events occurring is slight.”
novel legal issues presented. However, for these cases,
Thus, references to the upper end of the range of reasonably
management does not believe, based on currently available
possible loss for cases in which the firm is able to estimate a
information, that the outcomes of such proceedings will
range of reasonably possible loss mean the upper end of the
have a material adverse effect on the firm’s financial
range of loss for cases for which the firm believes the risk of
condition, though the outcomes could be material to the
loss is more than slight. The amounts reserved against such
firm’s operating results for any particular period,
matters are not significant as compared to the upper end of
depending, in part, upon the operating results for such
the range of reasonably possible loss.
period.
With respect to proceedings described below for which
IPO Process Matters. Group Inc. and GS&Co. are among
management has been able to estimate a range of
the numerous financial services companies that have been
reasonably possible loss where (i) plaintiffs have claimed an
named as defendants in a variety of lawsuits alleging
amount of money damages, (ii) the firm is being sued by
improprieties in the process by which those companies
purchasers in an underwriting and is not being indemnified
participated in the underwriting of public offerings in
by a party that the firm believes will pay any judgment, or
recent years.
(iii) the purchasers are demanding that the firm repurchase
securities, management has estimated the upper end of the GS&Co. has, together with other underwriters in certain
range of reasonably possible loss as being equal to (a) in the offerings as well as the issuers and certain of their officers and
case of (i), the amount of money damages claimed, (b) in the directors, been named as a defendant in a number of related
case of (ii), the amount of securities that the firm sold in the lawsuits filed in the U.S. District Court for the Southern
underwritings and (c) in the case of (iii), the price that District of New York alleging, among other things, that the
purchasers paid for the securities less the estimated value, if prospectuses for the offerings violated the federal securities
any, as of December 2011 of the relevant securities, in each laws by failing to disclose the existence of alleged
of cases (i), (ii) and (iii), taking into account any factors arrangements tying allocations in certain offerings to higher
believed to be relevant to the particular proceeding. As of customer brokerage commission rates as well as purchase
the date hereof, the firm has estimated the aggregate orders in the aftermarket, and that the alleged arrangements
amount of reasonably possible losses for such proceedings resulted in market manipulation. On October 5, 2009, the
and for any other proceedings described below where district court approved a settlement agreement entered into by
management has been able to estimate a range of the parties. The firm has paid into a settlement fund the full
reasonably possible loss to be approximately $2.4 billion. amount that GS&Co. would contribute in the settlement.
Certain objectors appealed certain aspects of the settlement’s
approval, but all such appeals have been withdrawn or finally
dismissed, thereby concluding the matter.

GS&Co. is among numerous underwriting firms named as Group Inc. and certain of its affiliates have, together with
defendants in a number of complaints filed commencing various underwriters in certain offerings, received
October 3, 2007, in the U.S. District Court for the Western subpoenas and requests for documents and information
District of Washington alleging violations of Section 16 of the from various governmental agencies and self-regulatory
Exchange Act in connection with offerings of securities for 15 organizations in connection with investigations relating to
issuers during 1999 and 2000. The complaints generally assert the public offering process. Goldman Sachs has cooperated
that the underwriters, together with each issuer’s directors, with these investigations.
officers and principal shareholders, entered into purported
World Online Litigation. In March 2001, a Dutch
agreements to tie allocations in the offerings to increased
shareholders’ association initiated legal proceedings for an
brokerage commissions and aftermarket purchase orders. The
unspecified amount of damages against GSI and others in
complaints further allege that, based upon these and other
Amsterdam District Court in connection with the initial
purported agreements, the underwriters violated the reporting
public offering of World Online in March 2000, alleging
provisions of, and are subject to short-swing profit recovery
misstatements and omissions in the offering materials and
under, Section 16 of the Exchange Act. The district court
that the market was artificially inflated by improper public
granted defendants’ motions to dismiss on the grounds that the
statements and stabilization activities. Goldman Sachs and
plaintiff’s demands were inadequate with respect to certain
ABN AMRO Rothschild served as joint global
actions and that the remaining actions were time-barred. On
coordinators of the approximately €2.9 billion offering.
December 2, 2010, the appellate court affirmed in part and
GSI underwrote 20,268,846 shares and GS&Co.
reversed in part, upholding the dismissal of seven of the actions
underwrote 6,756,282 shares for a total offering price of
in which GS&Co. is a defendant that were dismissed based on
approximately €1.16 billion.
the deficient demands but remanding the remaining eight
actions in which GS&Co. is a defendant that were dismissed The district court rejected the claims against GSI and ABN
as time-barred for consideration of other bases for dismissal. AMRO, but found World Online liable in an amount to be
On June 27, 2011, the U.S. Supreme Court granted the determined. On appeal, the Netherlands Court of Appeals
defendants’ petition for review of whether the actions that affirmed in part and reversed in part the decision of the
were remanded are time-barred and denied the plaintiff’s district court, holding that certain of the alleged disclosure
petition. deficiencies were actionable as to GSI and ABN AMRO.
On further appeal, the Netherlands Supreme Court
GS&Co. has been named as a defendant in an action
affirmed the rulings of the Court of Appeals, except that it
commenced on May 15, 2002 in New York Supreme
found certain additional aspects of the offering materials
Court, New York County, by an official committee of
actionable and held that individual investors could
unsecured creditors on behalf of eToys, Inc., alleging that
potentially hold GSI and ABN AMRO responsible for
the firm intentionally underpriced eToys, Inc.’s initial
certain public statements and press releases by World
public offering. The action seeks, among other things,
Online and its former CEO. The parties entered into a
unspecified compensatory damages resulting from the
definitive settlement agreement, dated July 15, 2011,
alleged lower amount of offering proceeds. On appeal from
pursuant to which GSI will contribute up to €48 million to
rulings on GS&Co.’s motion to dismiss, the New York
a settlement fund. The firm has paid the full amount of
Court of Appeals dismissed claims for breach of contract,
GSI’s proposed contribution to the settlement into an
professional malpractice and unjust enrichment, but
escrow account. Other shareholders’ associations have
permitted claims for breach of fiduciary duty and fraud to
made demands or filed claims for compensation of alleged
continue. On remand, the lower court granted GS&Co.’s
damages.
motion for summary judgment and, on December 8, 2011,
the appellate court affirmed the lower court’s decision. On
January 9, 2012, the creditors moved for permission either
to reargue the appellate decision or to appeal further to the
New York Court of Appeals.

Research Matters. Group Inc. and certain of its affiliates On March 30, 2004, certain specialist firms on the NYSE,
are subject to a number of investigations and reviews by including SLKS, without admitting or denying the
various governmental and regulatory bodies and self- allegations, entered into a final global settlement with the
regulatory organizations relating to research practices, SEC and the NYSE covering certain activities during the
including, among other things, research analysts’ methods years 1999 through 2003. The SLKS settlement involves,
for obtaining receipt and distribution of information and among other things, (i) findings by the SEC and the NYSE
communications among research analysts, sales and trading that SLKS violated certain federal securities laws and NYSE
personnel and clients. On June 9, 2011, pursuant to a rules, and in some cases failed to supervise certain individual
settlement, a consent order was entered by the specialists, in connection with trades that allegedly
Massachusetts Securities Division pursuant to which disadvantaged customer orders, (ii) a cease and desist order
GS&Co. paid a $10 million civil penalty and agreed to against SLKS, (iii) a censure of SLKS, (iv) SLKS’ agreement to
various undertakings regarding certain of its research pay an aggregate of $45.3 million in disgorgement and a
practices. Other regulators, including the SEC and FINRA, penalty to be used to compensate customers, (v) certain
have been investigating matters similar to those involved in undertakings with respect to SLKS’ systems and procedures,
the Massachusetts settlement, and Goldman Sachs has been and (vi) SLKS’ retention of an independent consultant to
discussing potential resolution of their proposed charges. review and evaluate certain of SLKS’ compliance systems,
policies and procedures. Comparable findings were made
Adelphia Communications Fraudulent Conveyance
and sanctions imposed in the settlements with other specialist
Litigation. GS&Co. is named a defendant in two
firms. The settlement did not resolve the related private civil
adversary proceedings commenced in the U.S.
actions against SLKS and other firms or regulatory
Bankruptcy Court for the Southern District of New
investigations involving individuals or conduct on other
York, one on July 6, 2003 by a creditors committee, and
exchanges. On May 26, 2011, the SEC issued an order
the second on or about July 31, 2003 by an equity
directing the undistributed settlement funds to be transferred
committee of Adelphia Communications, Inc. Those
to the U.S. Treasury; the funds will accordingly not be
proceedings were consolidated in a single amended
allocated to any settlement fund for the civil actions
complaint filed by the Adelphia Recovery Trust on
described below.
October 31, 2007. The complaint seeks, among other
things, to recover, as fraudulent conveyances, SLKS, Spear, Leeds & Kellogg, L.P. and Group Inc. are
approximately $62.9 million allegedly paid to GS&Co. among numerous defendants named in purported class
by Adelphia Communications, Inc. and its affiliates in actions brought beginning in October 2003 on behalf of
respect of margin calls made in the ordinary course of investors in the U.S. District Court for the Southern District
business on accounts owned by members of the family of New York alleging violations of the federal securities laws
that formerly controlled Adelphia Communications, Inc. and state common law in connection with NYSE floor
The district court assumed jurisdiction over the action specialist activities. The actions, which have been
and on April 8, 2011 granted GS&Co.’s motion for consolidated, seek unspecified compensatory damages,
summary judgment. The plaintiff has appealed. restitution and disgorgement on behalf of purchasers and
sellers of unspecified securities between October 17, 1998
Specialist Matters. Spear, Leeds & Kellogg Specialists
and October 15, 2003. By a decision dated March 14, 2009,
LLC (SLKS) and certain affiliates have received requests for
the district court granted plaintiffs’ motion for class
information from various governmental agencies and self-
certification. The defendants’ petition with the U.S. Court of
regulatory organizations as part of an industry-wide
Appeals for the Second Circuit seeking review of the
investigation relating to activities of floor specialists in
certification ruling was denied, and the specialist defendants’
recent years. Goldman Sachs has cooperated with the
petition for a rehearing and/or rehearing en banc was denied
requests.
on February 24, 2010. On December 5, 2011, the parties
reached a settlement in principle, subject to documentation
and court approval. The firm has reserved the full amount of
its proposed contribution to the settlement.

Treasury Matters. GS&Co. was named as a defendant Fannie Mae Litigation. GS&Co. was added as a defendant
in a purported class action filed on March 10, 2004 in in an amended complaint filed on August 14, 2006 in a
the U.S. District Court for the Northern District of purported class action pending in the U.S. District Court for
Illinois on behalf of holders of short positions in 30-year the District of Columbia. The complaint asserts violations of
U.S. Treasury futures and options on the morning of the federal securities laws generally arising from allegations
October 31, 2001. The complaint alleged that the firm concerning Fannie Mae’s accounting practices in connection
purchased 30-year bonds and futures prior to a with certain Fannie Mae-sponsored REMIC transactions
forthcoming U.S. Treasury refunding announcement that that were allegedly arranged by GS&Co. The complaint does
morning based on non-public information about that not specify a dollar amount of damages. The other
announcement, and that such purchases increased the defendants include Fannie Mae, certain of its past and
costs of covering such short positions. The complaint present officers and directors, and accountants. By a decision
also named as defendants the Washington, D.C.-based dated May 8, 2007, the district court granted GS&Co.’s
political consultant who allegedly was the source of the motion to dismiss the claim against it. The time for an appeal
information, a former GS&Co. economist who allegedly will not begin to run until disposition of the claims against
received the information, and another company and one other defendants. A motion to stay the action filed by the
of its employees who also allegedly received and traded Federal Housing Finance Agency (FHFA), which took
on the information prior to its public announcement. control of the foregoing action following Fannie Mae’s
The complaint alleged violations of the federal conservatorship, was denied on November 14, 2011.
commodities and antitrust laws, as well as Illinois
Beginning in September 2006, Group Inc. and/or GS&Co.
statutory and common law, and seeks, among other
were named as defendants in four Fannie Mae shareholder
things, unspecified damages including treble damages
derivative actions in the U.S. District Court for the District
under the antitrust laws. The district court dismissed the
of Columbia. The complaints generally allege that the
antitrust and Illinois state law claims but permitted the
Goldman Sachs defendants aided and abetted a breach of
federal commodities law claims to proceed. Plaintiff’s
fiduciary duty by Fannie Mae’s directors and officers in
motion for class certification was denied. GS&Co.
connection with certain Fannie Mae-sponsored REMIC
moved for summary judgment, and the district court
transactions, and one of the complaints also asserts a
granted the motion but only insofar as the claim relates
breach of contract claim. The complaints also name as
to the trading of treasury bonds. On October 13, 2009,
defendants certain former officers and directors of Fannie
the parties filed an offer of judgment and notice of
Mae as well as an outside accounting firm. The complaints
acceptance with respect to plaintiff’s individual claim.
seek, inter alia, unspecified damages. The Goldman Sachs
The plaintiff attempted to pursue an appeal of the denial
defendants were dismissed without prejudice from the first
of class certification, as did another individual trader
filed of these actions, and the remaining claims in that
who had previously litigated and lost an individual claim
action were dismissed for failure to make a demand on
and unsuccessfully sought to intervene in the purported
Fannie Mae’s board of directors. That dismissal has been
class action. On August 5, 2011, the U.S. Court of
affirmed on appeal. The district court dismissed the
Appeals for the Seventh Circuit affirmed the lower
remaining three actions on July 28, 2010. The plaintiffs
court’s rulings that neither the plaintiff nor the proposed
filed motions for reconsideration, which were denied on
intervenor could pursue the class issues on appeal, but
October 22, 2010, and have revised their notices of appeal
remanded for further consideration as to the amount of
in these actions. On January 20, 2011, the appellate court
pre-judgment interest on the plaintiff’s individual claim.
consolidated all actions on appeal.
The appellants’ petition for reconsideration en banc was
denied on October 19, 2011. On remand, the district
court entered a final stipulation and order on
December 7, 2011 regarding calculation of pre-judgment
interest, which concluded the matter.

Compensation-Related Litigation. On January 17, 2008, Purported shareholder derivative actions were commenced in
Group Inc., its Board, executive officers and members of its New York Supreme Court, New York County and the
management committee were named as defendants in a Delaware Court of Chancery beginning on December 14, 2009,
purported shareholder derivative action in the U.S. District alleging that the Board breached its fiduciary duties in
Court for the Eastern District of New York predicting that the connection with setting compensation levels for the year 2009
firm’s 2008 Proxy Statement would violate the federal securities and that such levels were excessive. The complaints name as
laws by undervaluing certain stock option awards and alleging defendants Group Inc., the Board and certain senior executives.
that senior management received excessive compensation for The complaints sought, inter alia, unspecified damages,
2007. The complaint seeks, among other things, an equitable restitution of certain compensation paid, and an order requiring
accounting for the allegedly excessive compensation. Plaintiff’s the firm to adopt corporate reforms. In the actions in New York
motion for a preliminary injunction to prevent the 2008 Proxy state court, on April 8, 2010, the plaintiffs filed a motion
Statement from using options valuations that the plaintiff alleges indicating that they no longer intend to pursue their claims but
are incorrect and to require the amendment of SEC Form 4s are seeking an award of attorneys’ fees in connection with
filed by certain of the executive officers named in the complaint bringing the suit, which the defendants opposed. By a decision
to reflect the stock option valuations alleged by the plaintiff was dated September 21, 2011, the New York court dismissed
denied, and plaintiff’s appeal from this denial was dismissed. On plaintiffs’ claims as moot and denied plaintiffs’ application for
February 13, 2009, the plaintiff filed an amended complaint, attorneys’ fees. On October 25, 2011, plaintiffs appealed from
which added purported direct (i.e., non-derivative) claims based the denial of a fee award. In the actions brought in the Delaware
on substantially the same theory. The plaintiff filed a further Court of Chancery, the defendants moved to dismiss, and the
amended complaint on March 24, 2010, and the defendants’ plaintiffs amended their complaint on April 28, 2010 to include,
motion to dismiss this further amended complaint was granted among other things, the allegations included in the SEC’s action
on the ground that dismissal of the shareholder plaintiff’s prior described in the “Mortgage-Related Matters” section below.
action relating the firm’s 2007 Proxy Statement based on the The plaintiffs amended the complaint a second time on
failure to make a demand to the Board precluded relitigation of January 20, 2011, the defendants moved to dismiss the second
demand futility. On December 19, 2011, the appellate court amended complaint and, by a decision dated October 12, 2011,
vacated the order of dismissal, holding only that preclusion the Delaware court dismissed plaintiffs’ second amended
principles did not mandate dismissal and remanding for complaint. Plaintiffs appealed on November 9, 2011.
consideration of the alternative grounds for dismissal.
Group Inc. and certain of its affiliates are subject to a
On March 24, 2009, the same plaintiff filed an action in New number of investigations and reviews from various
York Supreme Court, New York County against Group Inc., governmental agencies and self-regulatory organizations
its directors and certain senior executives alleging violation regarding the firm’s compensation processes. The firm is
of Delaware statutory and common law in connection with cooperating with the investigations and reviews.
substantively similar allegations regarding stock option
awards. On January 7, 2011, the plaintiff filed an amended
complaint. Defendants moved to dismiss the amended
complaint, and the parties subsequently agreed to stay the
state court action pending the final resolution of the appeal
from the dismissal of the federal court action in respect of the
firm’s 2008 Proxy Statement described above, as well as any
remanded proceedings further adjudicating defendants’
motion to dismiss.

Mortgage-Related Matters. On April 16, 2010, the SEC challenge the accuracy and adequacy of Group Inc.’s
brought an action (SEC Action) under the U.S. federal disclosure. These derivative complaints seek, among other
securities laws in the U.S. District Court for the Southern things, declaratory relief, unspecified compensatory
District of New York against GS&Co. and Fabrice Tourre, damages, restitution and certain corporate governance
one of its employees, in connection with a CDO offering reforms. In addition, as described in the “Compensation-
made in early 2007 (ABACUS 2007-AC1 transaction), Related Litigation” section above, the plaintiffs in the
alleging that the defendants made materially false and compensation-related Delaware Court of Chancery actions
misleading statements to investors and seeking, among twice amended their complaint, including to assert
other things, unspecified monetary penalties. Investigations allegations similar to those in the derivative claims referred
of GS&Co. by FINRA and of GSI by the FSA were to above, the Delaware court granted the defendants’
subsequently initiated, and Group Inc. and certain of its motion to dismiss the second amended complaint and
affiliates have received subpoenas and requests for plaintiffs appealed on November 9, 2011.
information from other regulators, regarding CDO
The federal court cases have been consolidated, plaintiffs
offerings, including the ABACUS 2007-AC1 transaction,
filed a consolidated amended complaint on August 1, 2011,
and related matters.
and, on October 6, 2011, the defendants moved to dismiss
On July 14, 2010, GS&Co. entered into a consent agreement the action. On December 8, 2011, the parties to the federal
with the SEC, settling all claims made against GS&Co. in the court action stipulated that (i) if the dismissal of the
SEC Action (SEC Settlement), pursuant to which GS&Co. paid Delaware action is affirmed, the parties will submit a
$550 million of disgorgement and civil penalties, and which was proposed order dismissing the federal court action with
approved by the U.S. District Court for the Southern District of prejudice and (ii) if the Delaware action is remanded, the
New York on July 20, 2010. federal court action will be reinstated. The New York
Supreme Court has consolidated the two actions pending in
On January 6, 2011, ACA Financial Guaranty Corp. filed
that court and the defendants moved to dismiss on
an action against GS&Co. in respect of the ABACUS
December 2, 2011.
2007-AC1 transaction in New York Supreme Court, New
York County. The complaint includes allegations of Since July 1, 2011, two putative shareholder derivative
fraudulent inducement, fraudulent concealment and unjust actions have been filed in the U.S. District Court for the
enrichment and seeks at least $30 million in compensatory Southern District of New York against Group Inc., the
damages, at least $90 million in punitive damages and Board and certain officers and employees of Group Inc. and
unspecified disgorgement. On March 8, 2011, GS&Co. Litton in connection with the servicing of residential
filed a motion to compel arbitration and/or to dismiss the mortgage loans and other mortgage-related activities
complaint. On April 25, 2011, the plaintiff filed an beginning in January 2009. The complaints generally
amended complaint and, on June 3, 2011, GS&Co. moved include allegations of breach of fiduciary duty, waste, abuse
to dismiss the amended complaint. of control, and mismanagement and seek, among other
things, declaratory relief, unspecified damages and certain
Since April 22, 2010, a number of putative shareholder
governance reforms. The district court consolidated the
derivative actions have been filed in New York Supreme
actions, and, on December 20, 2011, the plaintiffs filed a
Court, New York County, and the U.S. District Court for
consolidated amended complaint. On January 31, 2012,
the Southern District of New York against Group Inc., the
the defendants moved to dismiss.
Board and certain officers and employees of Group Inc. and
its affiliates in connection with mortgage-related matters In addition, in October 2011, the Board received a books
between 2004 and 2007, including the ABACUS 2007-AC1 and records demand from a shareholder for materials
transaction and other CDO offerings. These derivative relating to, among other subjects, the firm’s mortgage
complaints generally include allegations of breach of servicing and foreclosure activities, participation in federal
fiduciary duty, corporate waste, abuse of control, programs providing assistance to financial institutions and
mismanagement, unjust enrichment, misappropriation of homeowners and loan sales to Fannie Mae and Freddie
information, securities fraud and insider trading, and Mac.

Since April 23, 2010, the Board has received letters from GS&Co., Goldman Sachs Mortgage Company (GSMC)
shareholders demanding that the Board take action to and GS Mortgage Securities Corp. (GSMSC) and three
address alleged misconduct by GS&Co., the Board and current or former Goldman Sachs employees are defendants
certain officers and employees of Group Inc. and its in a putative class action commenced on
affiliates. The demands generally allege misconduct in December 11, 2008 in the U.S. District Court for the
connection with the firm’s securitization practices, Southern District of New York brought on behalf of
including the ABACUS 2007-AC1 transaction, the alleged purchasers of various mortgage pass-through certificates
failure by Group Inc. to adequately disclose the SEC and asset-backed certificates issued by various
investigation that led to the SEC Action, and Group Inc.’s securitization trusts established by the firm and
2009 compensation practices. The demands include a letter underwritten by GS&Co. in 2007. The complaint generally
from a Group Inc. shareholder, which previously made a alleges that the registration statement and prospectus
demand that the Board investigate and take action in supplements for the certificates violated the federal
connection with auction products matters, and expanded securities laws, and seeks unspecified compensatory
its demand to address the foregoing matters. The Board damages and rescission or rescissionary damages. The
previously rejected the demand relating to auction products defendants’ motion to dismiss the second amended
matters in September 2010, and, in August 2011, the complaint was granted with leave to replead certain claims.
shareholder made a books and records demand for On March 31, 2010, the plaintiff filed a third amended
materials related to the Board’s rejection of the complaint relating to two offerings, which the defendants
shareholder’s demand letter. moved to dismiss. This motion to dismiss was denied as to
the plaintiff’s Section 12(a)(2) claims and granted as to the
In addition, beginning April 26, 2010, a number of
plaintiff’s Section 11 claims, and the plaintiff’s motion for
purported securities law class actions have been filed in the
reconsideration was denied. The plaintiff filed a motion for
U.S. District Court for the Southern District of New York
entry of final judgment or certification of an interlocutory
challenging the adequacy of Group Inc.’s public disclosure
appeal as to plaintiff’s Section 11 claims, which was denied.
of, among other things, the firm’s activities in the CDO
The plaintiff then filed a motion for leave to amend to
market and the SEC investigation that led to the SEC
reinstate the damages claims based on allegations that it
Action. The purported class action complaints, which name
had sold its securities, which was denied. On May 5, 2011,
as defendants Group Inc. and certain officers and
the court granted plaintiff’s motion for entry of a final
employees of Group Inc. and its affiliates, have been
judgment dismissing all its claims. The plaintiff has
consolidated, generally allege violations of Sections 10(b)
appealed the dismissal with respect to all of the offerings
and 20(a) of the Exchange Act and seek unspecified
included in its original complaint. On June 3, 2010, another
damages. Plaintiffs filed a consolidated amended complaint
investor (who had unsuccessfully sought to intervene in the
on July 25, 2011. On October 6, 2011, the defendants
action) filed a separate putative class action asserting
moved to dismiss.
substantively similar allegations relating to an additional
offering pursuant to the 2007 registration statement. The
defendants moved to dismiss this separate action, and the
district court dismissed the action, with leave to replead.
Plaintiff filed an amended complaint on October 20, 2011,
and, on December 16, 2011, defendants moved to dismiss.
These trusts issued, and GS&Co. underwrote,
approximately $785 million principal amount of
certificates to all purchasers in the offering at issue in this
amended complaint.

Group Inc., GS&Co., GSMC and GSMSC are among the Various alleged purchasers of, and counterparties involved in
defendants in a separate putative class action commenced on transactions relating to, mortgage pass-through certificates,
February 6, 2009 in the U.S. District Court for the Southern CDOs and other mortgage-related products (including
District of New York brought on behalf of purchasers of certain Allstate affiliates, Basis Yield Alpha Fund (Master),
various mortgage pass-through certificates and asset-backed Cambridge Place Investment Management Inc., the Charles
certificates issued by various securitization trusts established Schwab Corporation, the Federal Home Loan Banks of
by the firm and underwritten by GS&Co. in 2006. The other Boston, Chicago, Indianapolis and Seattle, the FHFA (as
original defendants include three current or former Goldman conservator for Fannie Mae and Freddie Mac), Heungkuk
Sachs employees and various rating agencies. The second Life Insurance Co. Limited (Heungkuk), Landesbank Baden-
amended complaint generally alleges that the registration Württemberg, Massachusetts Mutual Life Insurance
statement and prospectus supplements for the certificates Company, MoneyGram Payment Systems, Inc., the National
violated the federal securities laws, and seeks unspecified Credit Union Administration, Stichting Pensioenfonds ABP,
compensatory and rescissionary damages. Defendants moved The Union Central Life Insurance Company, Ameritas Life
to dismiss the second amended complaint. On Insurance Corp., Acacia Life Insurance Company, and The
January 12, 2011, the district court granted the motion to Western and Southern Life Insurance Co.) have filed
dismiss with respect to offerings in which plaintiff had not complaints in state and federal court against firm affiliates,
purchased securities as well as all claims against the rating generally alleging that the offering documents for the
agencies, but denied the motion to dismiss with respect to a securities that they purchased contained untrue statements of
single offering in which the plaintiff allegedly purchased material facts and material omissions and generally seeking
securities. These trusts issued, and GS&Co. underwrote, rescission and damages. Certain of these complaints allege
approximately $698 million principal amount of certificates to fraud and seek punitive damages. Certain of these complaints
all purchasers in the offerings at issue in the complaint also name other firms as defendants.
(excluding those offerings for which the claims have been
A number of other entities (including American
dismissed). On February 2, 2012, the district court granted the
International Group, Inc. (AIG), Bayerische Landesbank,
plaintiff’s motion for class certification and on
Deutsche Bank National Trust Company, Deutsche
February 16, 2012, defendants filed a petition to review that
Zentral-Genossenschaftbank, Erste Abwicklungsanstalt
ruling with the U.S. Court of Appeals for the Second Circuit.
and related parties, HSH Nordbank, IKB Deutsche
On September 30, 2010, a putative class action was Industriebank AG, John Hancock and related parties,
filed in the U.S. District Court for the Southern District M&T Bank, Norges Bank Investment Management,
of New York against GS&Co., Group Inc. and two Prudential Insurance Company of America and related
former GS&Co. employees on behalf of investors in parties, and Sealink Funding Ltd.) have threatened to assert
notes issued in 2006 and 2007 by two synthetic CDOs claims of various types against the firm in connection with
(Hudson Mezzanine 2006-1 and 2006-2). The various mortgage-related transactions, and the firm has
complaint, which was amended on February 4, 2011, entered into agreements with a number of these entities to
asserts federal securities law and common law claims, toll the relevant statute of limitations.
and seeks unspecified compensatory, punitive and other
As of the date hereof, the aggregate notional amount of
damages. The defendants moved to dismiss on
mortgage-related securities sold to plaintiffs in active cases
April 5, 2011.
brought against the firm where those plaintiffs are seeking
GS&Co., GSMC and GSMSC are among the defendants in rescission of such securities was approximately
a lawsuit filed in August 2011 by CIFG Assurance of North $16.5 billion (which does not reflect adjustment for any
America, Inc. (CIFG) in the New York Supreme Court. The subsequent paydowns or distributions or any residual value
complaint alleges that CIFG was fraudulently induced to of such securities). This amount does not include the
provide credit enhancement for a 2007 securitization threatened claims noted above or potential claims by other
sponsored by GSMC, and seeks, among other things, the purchasers in the same or other mortgage-related offerings
repurchase of $24.7 million in aggregate principal amount that have not actually brought claims against the firm, or
of mortgages that CIFG had previously stated to be claims that have been dismissed (including a claim by
non-conforming, an accounting for any proceeds associated Landesbank Baden-Württemberg, which was dismissed by
with mortgages discharged from the securitization and a decision dated September 26, 2011, from which the
unspecified compensatory damages. On October 17, 2011, plaintiff appealed on October 24, 2011).
the Goldman Sachs defendants moved to dismiss.

In June 2011, Heungkuk filed a criminal complaint against underwritten by GS&Co. The firm will be making a
certain past and present employees of the firm in South submission to, and intends to engage in a dialogue with, the
Korea relating to its purchase of a CDO securitization from SEC staff seeking to address their concerns.
Goldman Sachs. The filing does not represent any judgment
by a governmental entity, but starts a process whereby the The firm expects to be the subject of additional putative
prosecutor investigates the complaint and determines shareholder derivative actions, purported class actions,
whether to take action. rescission and “put back” claims and other litigation,
additional investor and shareholder demands, and additional
On September 1, 2011, Group Inc. and GS Bank USA
regulatory and other investigations and actions with respect
entered into a Consent Order with the Federal Reserve
to mortgage-related offerings, loan sales, CDOs, and
Board relating to the servicing of residential mortgage
servicing and foreclosure activities. See Note 18 for further
loans. In addition, on September 1, 2011, GS Bank USA
information regarding mortgage-related contingencies.
entered into an Agreement on Mortgage Servicing Practices
with the New York State Banking Department, Litton and Auction Products Matters. On August 21, 2008,
the acquirer of Litton, in connection with which Group Inc. GS&Co. entered into a settlement in principle with the
agreed to forgive 25% of the unpaid principal balance on Office of the Attorney General of the State of New York
certain delinquent first lien residential mortgage loans and the Illinois Securities Department (on behalf of the
owned by Group Inc. or a subsidiary, totaling North American Securities Administrators Association)
approximately $13 million in principal forgiveness. See regarding auction rate securities. Under the agreement,
Note 18 for further information about these settlements. Goldman Sachs agreed, among other things, (i) to offer to
repurchase at par the outstanding auction rate securities
Group Inc., GS&Co. and GSMC are among the numerous
that its private wealth management clients purchased
financial services firms named as defendants in a qui tam
through the firm prior to February 11, 2008, with the
action originally filed by a realtor on April 7, 2010
exception of those auction rate securities where auctions
purportedly on behalf of the City of Chicago and State of
were clearing, (ii) to continue to work with issuers and
Illinois in Cook County, Illinois Circuit Court asserting
other interested parties, including regulatory and
claims under the Illinois Whistleblower Reward and
governmental entities, to expeditiously provide liquidity
Protection Act and Chicago False Claims Act, based on
solutions for institutional investors, and (iii) to pay a
allegations that defendants had falsely certified compliance
$22.5 million fine. The settlement is subject to definitive
with various Illinois laws, which were purportedly violated
documentation and approval by the various states. On
in connection with mortgage origination and servicing
June 2, 2009, GS&Co. entered into an Assurance of
activities. The complaint, which was originally filed under
Discontinuance with the New York State Attorney
seal, seeks treble damages and civil penalties. Plaintiff filed
General. On March 19, 2010, GS&Co. entered into an
an amended complaint on December 28, 2011, naming
Administrative Consent Order with the Illinois Secretary
GS&Co. and GSMC, among others, as additional
of State, Securities Department, which had conducted an
defendants and a second amended complaint on
investigation on behalf of states other than New York.
February 8, 2012.
GS&Co. has entered into similar consent orders with most
The firm has also received, and continues to receive, requests states and is in the process of doing so with the remaining
for information and/or subpoenas from federal, state and states.
local regulators and law enforcement authorities, relating to
On September 4, 2008, Group Inc. was named as a
the mortgage-related securitization process, subprime
defendant, together with numerous other financial services
mortgages, CDOs, synthetic mortgage-related products,
firms, in two complaints filed in the U.S. District Court for
particular transactions involving these products, and
the Southern District of New York alleging that the
servicing and foreclosure activities, and is cooperating with
defendants engaged in a conspiracy to manipulate the
these regulators and other authorities. See also “Financial
auction securities market in violation of federal antitrust
Crisis-Related Matters” below.
laws. The actions were filed, respectively, on behalf of
On February 24, 2012, the firm received a “Wells” notice putative classes of issuers of and investors in auction rate
from the staff of the SEC with respect to the disclosures securities and seek, among other things, treble damages in
contained in the offering documents used in connection with an unspecified amount. Defendants’ motion to dismiss was
a late 2006 offering of approximately $1.3 billion of granted on January 26, 2010. On March 1, 2010, the
subprime residential mortgage-backed securities plaintiffs appealed from the dismissal of their complaints.

Private Equity-Sponsored Acquisitions Litigation. failed to describe accurately the company’s exposure to
Group Inc. and “GS Capital Partners” are among mortgage-related activities in violation of the disclosure
numerous private equity firms and investment banks requirements of the federal securities laws. The defendants
named as defendants in a federal antitrust action filed in include past and present directors and officers of
the U.S. District Court for the District of Massachusetts Washington Mutual, the company’s former outside
in December 2007. As amended, the complaint generally auditors, and numerous underwriters. On June 30, 2011,
alleges that the defendants have colluded to limit the underwriter defendants and plaintiffs entered into a
competition in bidding for private equity-sponsored definitive settlement agreement, pursuant to which
acquisitions of public companies, thereby resulting in GS&Co. would contribute to a settlement fund. On
lower prevailing bids and, by extension, less November 4, 2011, the court approved the settlement, and
consideration for shareholders of those companies in the time to appeal has run, thereby concluding the matter.
violation of Section 1 of the U.S. Sherman Antitrust Act The firm has paid the full amount of GS&Co.’s
and common law. The complaint seeks, among other contribution to the settlement fund.
things, treble damages in an unspecified amount.
IndyMac Pass-Through Certificates Litigation. GS&Co.
Defendants moved to dismiss on August 27, 2008. The
is among numerous underwriters named as defendants in a
district court dismissed claims relating to certain
putative securities class action filed on May 14, 2009 in the
transactions that were the subject of releases as part of
U.S. District Court for the Southern District of New York. As
the settlement of shareholder actions challenging such
to the underwriters, plaintiffs allege that the offering
transactions, and by an order dated December 15, 2008
documents in connection with various securitizations of
otherwise denied the motion to dismiss. On
mortgage-related assets violated the disclosure requirements
April 26, 2010, the plaintiffs moved for leave to proceed
of the federal securities laws. The defendants include
with a second phase of discovery encompassing
IndyMac-related entities formed in connection with the
additional transactions. On August 18, 2010, the court
securitizations, the underwriters of the offerings, certain
permitted discovery on eight additional transactions, and
ratings agencies which evaluated the credit quality of the
the plaintiffs filed a fourth amended complaint on
securities, and certain former officers and directors of
October 7, 2010. The defendants filed a motion to
IndyMac affiliates. On November 2, 2009, the underwriters
dismiss certain aspects of the fourth amended complaint
moved to dismiss the complaint. The motion was granted in
on October 21, 2010, and the court granted that motion
part on February 17, 2010 to the extent of dismissing claims
on January 13, 2011. On January 21, 2011, certain
based on offerings in which no plaintiff purchased, and the
defendants, including Group Inc., filed a motion to
court reserved judgment as to the other aspects of the
dismiss another claim of the fourth amended complaint
motion. By a decision dated June 21, 2010, the district court
on the grounds that the transaction was the subject of a
formally dismissed all claims relating to offerings in which no
release as part of the settlement of a shareholder action
named plaintiff purchased certificates (including all offerings
challenging the transaction. The court granted that
underwritten by GS&Co.), and both granted and denied the
motion on March 1, 2011. On July 11, 2011, the
defendants’ motions to dismiss in various other respects. On
plaintiffs moved for leave to file a fifth amended
May 17, 2010, four additional investors filed a motion
complaint encompassing additional transactions and to
seeking to intervene in order to assert claims based on
take discovery concerning those transactions. On
additional offerings (including two underwritten by
September 7, 2011, the district court denied the
GS&Co.). On July 6, 2010 and August 19, 2010, two
plaintiffs’ motion, without prejudice, insofar as it sought
additional investors filed motions to intervene in order to
leave to file a fifth amended complaint, but permitted an
assert claims based on additional offerings (none of which
additional six-month phase of discovery with respect to
were underwritten by GS&Co.). The defendants opposed the
the additional transactions.
motions on the ground that the putative intervenors’ claims
Washington Mutual Securities Litigation. GS&Co. is were time-barred and, on June 21, 2011, the court denied the
among numerous underwriters named as defendants in a motions to intervene with respect to, among others, the
putative securities class action amended complaint filed on claims based on the offerings underwritten by GS&Co.
August 5, 2008 in the U.S. District Court for the Western Certain of the putative intervenors (including those seeking
District of Washington. As to the underwriters, plaintiffs to assert claims based on two offerings underwritten by
allege that the offering documents in connection with GS&Co.) have appealed.
various securities offerings by Washington Mutual, Inc.

GS&Co. underwrote approximately $751 million principal On September 15, 2010, a putative class action was filed in
amount of securities to all purchasers in the offerings at the U.S. District for the Southern District of New York by
issue in the May 2010 motion to intervene. On three former female employees alleging that Group Inc. and
July 11, 2008, IndyMac Bank was placed under an FDIC GS&Co. have systematically discriminated against female
receivership, and on July 31, 2008, IndyMac Bancorp, Inc. employees in respect of compensation, promotion,
filed for Chapter 7 bankruptcy in the U.S. Bankruptcy assignments, mentoring and performance evaluations. The
Court in Los Angeles, California. complaint alleges a class consisting of all female employees
employed at specified levels by Group Inc. and GS&Co.
MF Global Securities Litigation. GS&Co. is among
since July 2002, and asserts claims under federal and New
numerous underwriters named as defendants in class action
York City discrimination laws. The complaint seeks class
complaints filed in the U.S. District Court for the Southern
action status, injunctive relief and unspecified amounts of
District of New York commencing November 18, 2011.
compensatory, punitive and other damages. Group Inc. and
These complaints generally allege that the offering
GS&Co. filed a motion to stay the claims of one of the
materials for two offerings of MF Global Holdings Ltd.
named plaintiffs and to compel individual arbitration with
convertible notes (aggregating approximately $575 million
that individual, based on an arbitration provision contained
in principal amount) in February 2011 and July 2011 failed
in an employment agreement between Group Inc. and the
to, among other things, describe adequately the extent of
individual. On April 28, 2011, the magistrate judge to
MF Global’s exposure to European sovereign debt, in
whom the district judge assigned the motion denied the
violation of the disclosure requirements of the federal
motion. On July 7, 2011, the magistrate judge denied
securities laws. GS&Co. underwrote an aggregate principal
Group Inc.’s and GS&Co.’s motion for reconsideration of
amount of approximately $214 million of the notes. On
the magistrate judge’s decision, and on July 21, 2011
October 31, 2011, MF Global Holdings Ltd. filed for
Group Inc. and GS&Co. appealed the magistrate judge’s
Chapter 11 bankruptcy in the U.S. Bankruptcy Court in
decision to the district court. On June 13, 2011, Group Inc.
Manhattan, New York.
and GS&Co. moved to strike the class allegations of one of
GS&Co. has also received inquiries from various the three named plaintiffs based on her failure to exhaust
governmental and regulatory bodies and self-regulatory administrative remedies. On September 29, 2011, the
organizations concerning certain transactions with MF magistrate judge recommended denial of the motion to
Global prior to its bankruptcy filing. Goldman Sachs is strike and Group Inc. and GS&Co. filed their objections to
cooperating with all such inquiries. that recommendation with the district judge presiding over
the case on October 11, 2011. By a decision dated
Employment-Related Matters. On May 27, 2010, a
January 10, 2012, the district court denied the motion to
putative class action was filed in the U.S. District Court for
strike. On July 22, 2011, Group Inc. and GS&Co. moved
the Southern District of New York by several contingent
to strike all of the plaintiffs’ class allegations, and for partial
technology workers who were employees of third-party
summary judgment as to plaintiffs’ disparate impact claims.
vendors. The plaintiffs are seeking overtime pay for alleged
By a decision dated January 19, 2012, the magistrate judge
hours worked in excess of 40 per work week. The complaint
recommended that defendants’ motion be denied as
alleges that the plaintiffs were de facto employees of GS&Co.
premature. The defendants have filed their objections to
and that GS&Co. is responsible for the overtime pay under
that recommendation with the district judge. On
federal and state overtime laws. The complaint seeks class
November 15, 2011, the district court denied the
action status and unspecified damages. On March 21, 2011,
defendants’ motion to compel arbitration with one of the
the parties agreed to the terms of a settlement in principle and
three named plaintiffs; defendants have appealed.
on February 10, 2012, the court approved the terms of the
settlement. The firm has reserved the full amount of the
proposed settlement.

Transactions with the Hellenic Republic (Greece). connection with the supply of data related to credit default
Group Inc. and certain of its affiliates have been subject to a swaps and in connection with profit sharing and fee
number of investigations and reviews by various arrangements for clearing of credit default swaps, including
governmental and regulatory bodies and self-regulatory potential anti-competitive practices. These proceedings are
organizations in connection with the firm’s transactions ongoing. The firm has received civil investigative demands
with the Hellenic Republic (Greece), including financing from the U.S. Department of Justice (DOJ) for information
and swap transactions. Goldman Sachs has cooperated on similar matters.
with the investigations and reviews.
The CFTC has been investigating the role of GSEC as the
Investment Management Services. Group Inc. and certain clearing broker for an SEC-registered broker-dealer client.
of its affiliates are parties to various civil litigation and The CFTC staff has orally advised GSEC that it intends to
arbitration proceedings and other disputes with clients relating recommend that the CFTC bring aiding and abetting, civil
to losses allegedly sustained as a result of the firm’s investment fraud and supervision-related charges against GSEC arising
management services. These claims generally seek, among other from its provision of clearing services to this broker-dealer
things, restitution or other compensatory damages and, in some client based on allegations that GSEC knew or should have
cases, punitive damages. In addition, Group Inc. and its affiliates known that the client’s subaccounts maintained at GSEC
are subject from time to time to investigations and reviews by were actually accounts belonging to customers of the broker-
various governmental and regulatory bodies and self-regulatory dealer client and not the client’s proprietary accounts. GSEC
organizations in connection with the firm’s investment has been discussing a potential resolution. Goldman Sachs is
management services. Goldman Sachs is cooperating with all cooperating with the investigations and reviews.
such investigations and reviews.
Insider Trading Investigations. From time to time, the
Sales, Trading and Clearance Practices. Group Inc. and firm and its employees are the subject of or otherwise
certain of its affiliates are subject to a number of involved in regulatory investigations relating to insider
investigations and reviews, certain of which are industry- trading, the potential misuse of material nonpublic
wide, by various governmental and regulatory bodies and information and the effectiveness of the firm’s insider
self-regulatory organizations relating to the sales, trading trading controls and information barriers. It is the firm’s
and clearance of corporate and government securities and practice to fully cooperate with any such investigations.
other financial products, including compliance with the
EU Price-Fixing Matter. On July 5, 2011, the European
SEC’s short sale rule, algorithmic and quantitative trading,
Commission issued a Statement of Objections to Group Inc.
futures trading, transaction reporting, securities lending
raising allegations of an industry-wide conspiracy to fix
practices, trading and clearance of credit derivative
prices for power cables including by an Italian cable
instruments, commodities trading, private placement
company in which certain Goldman Sachs-affiliated
practices and compliance with the U.S. Foreign Corrupt
investment funds held ownership interests from 2005 to
Practices Act.
2009. The Statement of Objections proposes to hold Group
The European Commission announced in April 2011 that it Inc. jointly and severally liable for some or all of any fine
is initiating proceedings to investigate further numerous levied against the cable company under the concept of
financial services companies, including Group Inc., in parental liability under EU competition law.

Municipal Securities Matters. Group Inc. and certain of The complaints assert claims under the federal antitrust
its affiliates are subject to a number of investigations and laws and either California’s Cartwright Act or New York’s
reviews by various governmental and regulatory bodies and Donnelly Act, and seek, among other things, treble
self-regulatory organizations relating to transactions damages under the antitrust laws in an unspecified amount
involving municipal securities, including wall-cross and injunctive relief. On April 26, 2010, the Goldman
procedures and conflict of interest disclosure with respect Sachs defendants’ motion to dismiss complaints filed by
to state and municipal clients, the trading and structuring of several individual California municipal plaintiffs was
municipal derivative instruments in connection with denied. On August 19, 2011, Group Inc., GSMMDP and
municipal offerings, political contribution rules, GS Bank USA were voluntarily dismissed without prejudice
underwriting of Build America Bonds and the possible from all actions except one brought by a California
impact of credit default swap transactions on municipal municipal entity.
issuers. Goldman Sachs is cooperating with the
Financial Crisis-Related Matters. Group Inc. and certain
investigations and reviews.
of its affiliates are subject to a number of investigations and
Group Inc., Goldman Sachs Mitsui Marine Derivative reviews by various governmental and regulatory bodies and
Products, L.P. (GSMMDP) and GS Bank USA are among self-regulatory organizations and litigation relating to the
numerous financial services firms that have been named as 2008 financial crisis, including the establishment and
defendants in numerous substantially identical individual unwind of credit default swaps between Goldman Sachs
antitrust actions filed beginning on November 12, 2009 and AIG and other transactions with, and in the securities
that have been coordinated with related antitrust class of, AIG, The Bear Stearns Companies Inc., Lehman
action litigation and individual actions, in which no Brothers Holdings Inc. and other firms. Goldman Sachs is
Goldman Sachs affiliate is named, for pre-trial proceedings cooperating with the investigations and reviews.
in the U.S. District Court for the Southern District of New
In the second quarter of 2011, a Staff Report of the Senate
York. The plaintiffs include individual California municipal
Permanent Subcommittee on Investigations concerning the
entities and three New York non-profit entities. All of these
key causes of the financial crisis was issued. Goldman Sachs
complaints against Group Inc., GSMMDP and GS Bank
and another financial institution were used as case studies
USA generally allege that the Goldman Sachs defendants
with respect to the role of investment banks. The report was
participated in a conspiracy to arrange bids, fix prices and
referred to the DOJ and the SEC for review. The firm is
divide up the market for derivatives used by municipalities
cooperating with the investigations arising from this
in refinancing and hedging transactions from 1992 to 2008.
referral, which are ongoing.

Note 28.
Employee Benefit Plans
The firm sponsors various pension plans and certain other The firm recognizes the funded status of its defined benefit
postretirement benefit plans, primarily healthcare and life pension and postretirement plans, measured as the difference
insurance. The firm also provides certain benefits to former between the fair value of the plan assets and the benefit
or inactive employees prior to retirement. obligation, in the consolidated statements of financial
condition. As of December 2011, “Other assets” and “Other
Defined Benefit Pension Plans and Postretirement
liabilities and accrued expenses” included $135 million
Plans
(related to an overfunded pension plan) and $858 million,
Employees of certain non-U.S. subsidiaries participate in
respectively, related to these plans. As of December 2010,
various defined benefit pension plans. These plans generally
“Other assets” and “Other liabilities and accrued expenses”
provide benefits based on years of credited service and a
included $164 million (related to an overfunded pension plan)
percentage of the employee’s eligible compensation. The
and $641 million, respectively, related to these plans.
firm maintains a defined benefit pension plan for certain
U.K. employees. As of April 2008, the U.K. defined benefit Defined Contribution Plans
plan was closed to new participants, but will continue to The firm contributes to employer-sponsored U.S. and non-U.S.
accrue benefits for existing participants. These plans do not defined contribution plans. The firm’s contribution to these plans
have a material impact on the firm’s consolidated results of was $225 million, $193 million and $178 million for the years
operations. ended December 2011, December 2010 and December 2009,
respectively.
The firm also maintains a defined benefit pension plan for
substantially all U.S. employees hired prior to November 1, 2003.
As of November 2004, this plan was closed to new participants
and frozen such that existing participants would not accrue any
additional benefits. In addition, the firm maintains unfunded
postretirement benefit plans that provide medical and life
insurance for eligible retirees and their dependents covered under
these programs. These plans do not have a material impact on the
firm’s consolidated results of operations.

Note 29.
Employee Incentive Plans
The cost of employee services received in exchange for a Stock Incentive Plan
share-based award is generally measured based on the The firm sponsors a stock incentive plan, The Goldman
grant-date fair value of the award. Share-based awards that Sachs Amended and Restated Stock Incentive Plan (SIP),
do not require future service (i.e., vested awards, including which provides for grants of incentive stock options,
awards granted to retirement-eligible employees) are nonqualified stock options, stock appreciation rights,
expensed immediately. Share-based awards that require dividend equivalent rights, restricted stock, RSUs, awards
future service are amortized over the relevant service with performance conditions and other share-based
period. Expected forfeitures are included in determining awards. In the second quarter of 2003, the SIP was
share-based employee compensation expense. approved by the firm’s shareholders, effective for grants
after April 1, 2003. The SIP was further amended and
The firm pays cash dividend equivalents on outstanding
restated, effective December 31, 2008.
RSUs. Dividend equivalents paid on RSUs are generally
charged to retained earnings. Dividend equivalents paid on The total number of shares of common stock that may be
RSUs expected to be forfeited are included in compensation delivered pursuant to awards granted under the SIP through
expense. The firm accounts for the tax benefit related to the end of the 2008 fiscal year could not exceed 250 million
dividend equivalents paid on RSUs as an increase to shares. The total number of shares of common stock that
additional paid-in capital. may be delivered for awards granted under the SIP in the
2009 fiscal year and each fiscal year thereafter cannot
In certain cases, primarily related to conflicted employment
exceed 5% of the issued and outstanding shares of common
(as outlined in the applicable award agreements), the firm
stock, determined as of the last day of the immediately
may cash settle share-based compensation awards. For
preceding fiscal year, increased by the number of shares
awards accounted for as equity instruments, additional
available for awards in previous years but not covered by
paid-in capital is adjusted to the extent of the difference
awards granted in such years. As of December 2011 and
between the current value of the award and the grant-date
December 2010, 161.0 million and 139.2 million shares,
value of the award.
respectively, were available for grant under the SIP.
Restricted Stock Units
The firm issues RSUs to employees under the SIP, primarily in
connection with year-end compensation and acquisitions. RSUs
are valued based on the closing price of the underlying shares on
the date of grant after taking into account a liquidity discount
for any applicable post-vesting transfer restrictions. Year-end
RSUs generally vest and deliver as outlined in the applicable
RSU agreements. Employee RSU agreements generally provide
that vesting is accelerated in certain circumstances, such as on
retirement, death and extended absence. Delivery of the
underlying shares of common stock is conditioned on the
grantees satisfying certain vesting and other requirements
outlined in the award agreements. The table below presents the
activity related to RSUs.

Weighted Average
Restricted Stock Grant-Date Fair Value of Restricted
Units Outstanding Stock Units Outstanding
Future No Future Future No Future
Service Service Service Service
Required Required Required Required
Outstanding, December 2010 21,455,793 39,537,417 $124.17 $145.13
Granted 1, 2 10,250,856 7,156,834 139.47 143.70
Forfeited (1,258,410) (183,858) 128.29 133.15
Delivered 3 — (31,815,863) — 152.28
Vested 2 (16,146,050) 16,146,050 119.99 119.99
Outstanding, December 2011 14,302,189 4 30,840,580 139.46 124.33
1. The weighted average grant-date fair value of RSUs granted during the years ended December 2011, December 2010 and December 2009 was $141.21, $132.64
and $151.31, respectively. The fair value of the RSUs granted during the year ended December 2011 and December 2010 includes a liquidity discount of 12.7% and
13.2%, respectively, to reflect post-vesting transfer restrictions of up to 4 years.
2. The aggregate fair value of awards that vested during the years ended December 2011, December 2010 and December 2009 was $2.40 billion, $4.07 billion and
$2.18 billion, respectively.
3. Includes RSUs that were cash settled.
4. Includes 754,482 shares of restricted stock subject to future service requirements.
In the first quarter of 2012, the firm granted to its employees Stock Options
10.4 million year-end RSUs, of which 6.2 million RSUs Stock options generally vest as outlined in the applicable
require future service as a condition of delivery. These stock option agreement. Options granted in February 2010
awards are subject to additional conditions as outlined in will generally become exercisable in one-third installments
the award agreements. Generally, shares underlying these in January 2011, January 2012 and January 2013 and will
awards, net of required withholding tax, deliver over a expire in February 2014. In general, options granted prior
three-year period but are subject to post-vesting transfer to February 2010 expire on the tenth anniversary of the
restrictions through January 2017. These grants are not grant date, although they may be subject to earlier
included in the above table. termination or cancellation under certain circumstances in
accordance with the terms of the SIP and the applicable
stock option agreement.
The table below presents the activity related to stock
options.
Aggregate Weighted Average

Options Weighted Average Intrinsic Value Remaining Life
Outstanding Exercise Price (in millions) (years)
Outstanding, December 2010 55,247,865 $ 96.71 $4,152 6.25
Exercised (4,289,438) 89.49
Forfeited (10,743) 79.73
Expired (3,690,746) 91.61
Outstanding, December 2011 47,256,938 97.76 444 6.08
Exercisable, December 2011 35,699,815 103.83 310 5.79

The total intrinsic value of options exercised during the $484 million, respectively. The table below presents
years ended December 2011, December 2010 and options outstanding.
December 2009 was $143 million, $510 million and
Weighted Average
Options Weighted Average Remaining Life
Exercise Price Outstanding Exercise Price (years)
$ 75.00 - $ 89.99 38,119,258 $ 78.79 6.37
90.00 - 104.99 290,056 96.08 1.92
105.00 - 119.99 — — —
120.00 - 134.99 2,791,500 131.64 3.92
135.00 - 149.99 — — —
150.00 - 164.99 75,000 154.16 2.17
165.00 - 194.99 — — —
195.00 - 209.99 5,981,124 202.27 5.48
Outstanding, December 2011 47,256,938
The weighted average fair value of options granted in the The tables below present the primary weighted average
year ended December 2010 was $37.58 per option. assumptions used to estimate fair value as of the grant date
based on a Black-Scholes option-pricing model, and
share-based compensation and the related tax benefit.
Year Ended December

2011 2010 2009
Risk-free interest rate N/A 1.6% N/A
Expected volatility N/A 32.5 N/A
Annual dividend per share N/A $1.40 N/A
Expected life N/A 3.75 years N/A
Year Ended December

in millions 2011 2010 2009
Share-based compensation $2,843 $4,070 $2,030
Excess tax benefit related to options exercised 55 183 166
Excess tax benefit/(provision) related to share-based awards 1 138 239 (793)
1. Represents the tax benefit/(provision) recognized in additional paid-in capital on stock options exercised and the delivery of common stock underlying share-based
awards.
As of December 2011, there was $926 million of total expected to be recognized over a weighted average period
unrecognized compensation cost related to non-vested of 1.62 years.
share-based compensation arrangements. This cost is

Note 30.
Parent Company
Group Inc. — Condensed Statements of Earnings Group Inc.—Condensed Statements of Cash Flows
Year Ended December Year Ended December
in millions 2011 2010 2009 in millions 2011 2010 2009
Revenues Cash flows from operating activities
Dividends from bank subsidiary $ 1,000 $ — $ — Net earnings $ 4,442 $ 8,354 $ 13,385
Dividends from nonbank subsidiaries 4,967 6,032 8,793 Non-cash items included in net earnings
Undistributed earnings of subsidiaries 481 2,884 5,884 Undistributed earnings of subsidiaries (481) (2,884) (5,884)
Other revenues (3,381) 964 (1,018) Depreciation and amortization 14 18 39
Total non-interest revenues 3,067 9,880 13,659 Deferred income taxes 809 214 (3,347)
Interest income 4,547 4,153 4,565 Share-based compensation 244 393 100
Interest expense 3,917 3,429 3,112 Changes in operating assets and liabilities
Net interest income 630 724 1,453 Financial instruments owned, at fair value 3,557 (176) 24,382
Net revenues, including net interest income 3,697 10,604 15,112 Financial instruments sold, but not yet
purchased, at fair value (536) (1,091) (1,032)
Operating expenses Other, net 1,422 10,852 10,081
Compensation and benefits 300 423 637 Net cash provided by operating activities 9,471 15,680 37,724
Other expenses 252 238 1,034
Total operating expenses 552 661 1,671 Cash flows from investing activities
Pre-tax earnings 3,145 9,943 13,441 Purchase of property, leasehold
Provision/(benefit) for taxes (1,297) 1,589 56 improvements and equipment (42) (15) (5)
Net earnings 4,442 8,354 13,385 Issuance of short-term loans to
Preferred stock dividends 1,932 641 1,193 subsidiaries, net of repayments 20,319 (9,923) (6,335)
Net earnings applicable to common Issuance of term loans to subsidiaries (42,902) (5,532) (13,823)
shareholders $ 2,510 $ 7,713 $12,192 Repayments of term loans by subsidiaries 21,850 1,992 9,601
Capital distributions from/(contributions to)
subsidiaries, net 4,642 (1,038) (2,781)
Group Inc. — Condensed Statements of Financial Condition Net cash provided by/(used for)
As of December investing activities 3,867 (14,516) (13,343)
in millions 2011 2010 Cash flows from financing activities
Assets Unsecured short-term borrowings, net (727) 3,137 (13,266)
Cash and cash equivalents $ 14 $ 7 Proceeds from issuance of long-term
Loans to and receivables from subsidiaries borrowings 27,251 21,098 22,814
Bank subsidiary 7,196 5,050 Repayment of long-term borrowings,
including the current portion (27,865) (21,838) (27,374)
Nonbank subsidiaries 180,397 182,316
Preferred stock repurchased (3,857) — (9,574)
Investments in subsidiaries and other affiliates
Common stock repurchased (6,048) (4,183) (2)
Bank subsidiary 19,226 18,807
Nonbank subsidiaries and other affiliates 48,473 52,498
Dividends and dividend equivalents paid on
Financial instruments owned, at fair value 20,698 24,153
common stock, preferred stock and
Other assets 7,912 8,612 restricted stock units (2,771) (1,443) (2,205)
Total assets $283,916 $291,443 Proceeds from issuance of common stock,
including stock option exercises 368 581 6,260
Liabilities and shareholders’ equity Excess tax benefit related to share-based
Payables to subsidiaries $ 693 $ 358 compensation 358 352 135
Financial instruments sold, but not yet purchased, at Cash settlement of share-based
fair value 241 935 compensation (40) (1) (2)
Unsecured short-term borrowings 1 Net cash used for financing activities (13,331) (2,297) (24,314)
With third parties 35,368 32,299 Net increase/(decrease) in cash and cash
With subsidiaries 4,701 5,483 equivalents 7 (1,133) 67
Unsecured long-term borrowings 2 Cash and cash equivalents, beginning of
With third parties 166,342 167,782 year 7 1,140 1,073
With subsidiaries 3 1,536 1,000 Cash and cash equivalents, end of year $ 14 $ 7 $ 1,140
Other liabilities and accrued expenses 4,656 6,230
SUPPLEMENTAL DISCLOSURES:
Total liabilities 213,537 214,087 Cash payments for third-party interest, net of capitalized interest, were
$3.83 billion, $3.07 billion and $2.77 billion for the years ended December 2011,
Commitments, contingencies and guarantees December 2010 and December 2009, respectively.
Shareholders’ equity Cash payments for income taxes, net of refunds, were $1.39 billion,
Preferred stock 3,100 6,957 $2.05 billion and $2.77 billion for the years ended December 2011,
Common stock 8 8 December 2010 and December 2009, respectively.
Restricted stock units and employee stock options 5,681 7,706 1. Includes $6.25 billion and $7.82 billion at fair value as of December 2011 and
Additional paid-in capital 45,553 42,103 December 2010, respectively.
Retained earnings 58,834 57,163 2. Includes $12.91 billion and $13.44 billion at fair value as of December 2011
Accumulated other comprehensive loss (516) (286) and December 2010, respectively.
Stock held in treasury, at cost (42,281) (36,295) 3. Unsecured long-term borrowings with subsidiaries by maturity date are
$263 million in 2013, $656 million in 2014, $243 million in 2015, $97 million
Total shareholders’ equity 70,379 77,356 in 2016 and $277 million in 2017-thereafter.
Total liabilities and shareholders’ equity $283,916 $291,443 Non-cash activity:
During the year ended December 2011, $103 million of common stock was
issued in connection with the acquisition of Goldman Sachs Australia Pty Ltd
(GS Australia), formerly Goldman Sachs & Partners Australia Group Holdings
Pty Ltd.

Quarterly Results (unaudited)

The following represents the firm’s unaudited quarterly results adjustments that are, in the opinion of management, necessary
for the years ended December 2011 and December 2010. for a fair statement of the results. These adjustments are of a
These quarterly results were prepared in accordance with normal recurring nature.
generally accepted accounting principles and reflect all
Three Months Ended

December September June March
in millions, except per share data 2011 2011 2011 2011
Total non-interest revenues $4,984 $2,231 $5,868 $10,536
Interest income 3,032 3,354 3,681 3,107
Interest expense 1,967 1,998 2,268 1,749
Net interest income 1,065 1,356 1,413 1,358
Net revenues, including net interest income 6,049 3,587 7,281 11,894
Operating expenses 1 4,802 4,317 5,669 7,854
Pre-tax earnings/(loss) 1,247 (730) 1,612 4,040
Provision/(benefit) for taxes 234 (337) 525 1,305
Net earnings/(loss) 1,013 (393) 1,087 2,735
Preferred stock dividends 35 35 35 1,827
Net earnings/(loss) applicable to common shareholders $ 978 $ (428) $1,052 $ 908
Earnings/(loss) per common share
Basic $ 1.91 $ (0.84) $ 1.96 $ 1.66
Diluted 1.84 (0.84) 1.85 1.56
Dividends declared per common share 0.35 0.35 0.35 0.35
Three Months Ended

December September June March
in millions, except per share data 2010 2010 2010 2010
Total non-interest revenues $7,304 $7,775 $7,222 $11,357
Interest income 3,069 2,937 3,302 3,001
Interest expense 1,731 1,809 1,683 1,583
Net interest income 1,338 1,128 1,619 1,418
Net revenues, including net interest income 8,642 8,903 8,841 12,775
Operating expenses 1 5,168 6,092 7,393 7,616
Pre-tax earnings 3,474 2,811 1,448 5,159
Provision for taxes 1,087 913 835 1,703
Net earnings 2,387 1,898 613 3,456
Preferred stock dividends 160 161 160 160
Net earnings applicable to common shareholders $2,227 $1,737 $ 453 $ 3,296
Earnings per common share
Basic $ 4.10 $ 3.19 $ 0.82 $ 6.02
Diluted 3.79 2.98 0.78 5.59
Dividends declared per common share 0.35 0.35 0.35 0.35
1. The timing and magnitude of changes in the firm’s discretionary compensation accruals can have a significant effect on results in a given quarter.

Common Stock Price Range

The table below presents the high and low sales prices per share of the firm’s common stock.
Year Ended December

2011 2010 2009
High Low High Low High Low
First quarter $175.34 $153.26 $178.75 $147.81 $115.65 $ 59.13
Second quarter 164.40 128.30 186.41 131.02 151.17 100.46
Third quarter 139.25 91.40 157.25 129.50 188.00 135.23
Fourth quarter 118.07 84.27 171.61 144.70 193.60 160.20
As of February 17, 2012, there were 13,340 holders of On February 17, 2012, the last reported sales price for the
record of the firm’s common stock. firm’s common stock on the New York Stock Exchange
was $115.91 per share.
Common Stock Price Performance
The following graph compares the performance of an Index and the S&P 500 Financials Index, and the
investment in the firm’s common stock from dividends were reinvested on the date of payment without
November 24, 2006 through December 31, 2011, with the payment of any commissions. The performance shown
S&P 500 Index and the S&P 500 Financials Index. The in the graph represents past performance and should not
graph assumes $100 was invested on November 24, 2006 be considered an indication of future performance.
in each of the firm’s common stock, the S&P 500
$150
$125
$100
$ 75
$ 50
$ 25
$ 0
Nov-06 Nov-07 Nov-08 Dec-09 Dec-10 Dec-11
The Goldman Sachs Group, Inc. S&P 500 Index S&P 500 Financials Index
The table below shows the cumulative total returns in the S&P 500 Index and the S&P 500 Financials Index, and
dollars of the firm’s common stock, the S&P 500 Index and the dividends were reinvested on the date of payment
the S&P 500 Financials Index for Goldman Sachs’ last five without payment of any commissions. The performance
fiscal year ends 1, assuming $100 was invested on shown in the table represents past performance and should
November 24, 2006 in each of the firm’s common stock, not be considered an indication of future performance.
11/24/06 11/30/07 11/28/08 12/31/09 12/31/10 12/31/11

The Goldman Sachs Group, Inc. $100.00 $113.17 $39.79 $86.10 $86.56 $ 47.09
S&P 500 Index 100.00 107.77 66.72 85.28 98.12 100.19
S&P 500 Financials Index 100.00 88.54 37.56 43.92 49.27 40.88
1. As a result of the firm’s change in fiscal year-end during 2009, this table includes 61 months beginning November 24, 2006 and ending December 31, 2011.

Selected Financial Data
As of or for the
Year Ended One Month Ended
December December December November November December
2011 2010 2009 2008 2007 2008 1
Income statement data (in millions)

Total non-interest revenues $ 23,619 $ 33,658 $ 37,766 $ 17,946 $ 42,000 $ (502)
Interest income 13,174 12,309 13,907 35,633 45,968 1,687
Interest expense 7,982 6,806 6,500 31,357 41,981 1,002
Net interest income 5,192 5,503 7,407 4,276 3,987 685
Net revenues, including net interest income 28,811 39,161 45,173 22,222 45,987 183
Compensation and benefits 12,223 15,376 16,193 10,934 20,190 744
U.K. bank payroll tax — 465 — — — —
Other operating expenses 10,419 10,428 9,151 8,952 8,193 697
Pre-tax earnings/(loss) $ 6,169 $ 12,892 $ 19,829 $ 2,336 $ 17,604 $ (1,258)
Balance sheet data (in millions)
Total assets $923,225 $911,332 $848,942 $884,547 $1,119,796 $1,112,225
Other secured financings (long-term) 8,179 13,848 11,203 17,458 33,300 18,413
Unsecured long-term borrowings 173,545 174,399 185,085 168,220 164,174 185,564
Total liabilities 852,846 833,976 778,228 820,178 1,076,996 1,049,171
Total shareholders’ equity 70,379 77,356 70,714 64,369 42,800 63,054
Common share data (in millions, except per share amounts)
Earnings/(loss) per common share
Basic $ 4.71 $ 14.15 $ 23.74 $ 4.67 $ 26.34 $ (2.15)
Diluted 4.51 13.18 22.13 4.47 24.73 (2.15)
Dividends declared per common share 1.40 1.40 1.05 1.40 1.40 0.47 3
Book value per common share 2 130.31 128.72 117.48 98.68 90.43 95.84
Average common shares outstanding
Basic 524.6 542.0 512.3 437.0 433.0 485.5
Diluted 556.9 585.3 550.9 456.2 461.2 485.5
Selected data (unaudited)
Total staff
Americas 17,200 19,900 18,900 19,700 20,100 19,200
Non-Americas 16,100 15,800 13,600 14,800 15,400 14,100
Total staff 33,300 35,700 32,500 34,500 35,500 33,300
Total staff, including consolidated entities held for
investment purposes 34,700 38,700 36,200 39,200 40,000 38,000
Assets under management (in billions)
Asset class
Alternative investments $ 142 $ 148 $ 146 $ 146 $ 151 $ 145
Equity 126 144 146 112 255 114
Fixed income 340 340 315 248 256 253
Total non-money market assets 608 632 607 506 662 512
Money markets 220 208 264 273 206 286
Total assets under management $ 828 $ 840 $ 871 $ 779 $ 868 $ 798
1. In connection with becoming a bank holding company, the firm was required to change its fiscal year-end from November to December. December 2008 represents
the period from November 29, 2008 to December 26, 2008.
2. Book value per common share is based on common shares outstanding, including RSUs granted to employees with no future service requirements, of 516.3 million,
546.9 million, 542.7 million, 485.4 million, 439.0 million and 485.9 million as of December 2011, December 2010, December 2009, November 2008, November 2007
and December 2008, respectively.
3. Rounded to the nearest penny. Exact dividend amount was $0.4666666 per common share and was reflective of a four-month period (December 2008 through
March 2009), due to the change in the firm’s fiscal year-end.

Statistical Disclosures
Distribution of Assets, Liabilities and Shareholders’ Equity
The table below presents a summary of consolidated average balances and interest rates.
For the Year Ended December
2011 2010 2009
Average Average Average Average Average Average
in millions, except rates balance Interest rate balance Interest rate balance Interest rate
Assets
Deposits with banks $ 38,039 $ 125 0.33% $ 29,371 $ 86 0.29% $ 22,108 $ 65 0.29%
U.S. 32,770 95 0.29 24,988 67 0.27 18,134 45 0.25
Non-U.S. 5,269 30 0.57 4,383 19 0.43 3,974 20 0.50
Securities borrowed, securities purchased under
agreements to resell, at fair value, and federal
funds sold 351,896 666 0.19 353,719 540 0.15 355,636 951 0.27
U.S. 219,240 (249) (0.11) 243,907 75 0.03 255,785 14 0.01
Non-U.S. 132,656 915 0.69 109,812 465 0.42 99,851 937 0.94
Financial instruments owned, at fair value 1, 2 287,322 10,718 3.73 273,801 10,346 3.78 277,706 11,106 4.00
U.S. 183,920 7,477 4.07 189,136 7,865 4.16 198,849 8,429 4.24
Non-U.S. 103,402 3,241 3.13 84,665 2,481 2.93 78,857 2,677 3.39
Other interest-earning assets 3 143,270 1,665 1.16 118,364 1,337 1.13 127,067 1,785 1.40
U.S. 99,042 915 0.92 82,965 689 0.83 83,000 1,052 1.27
Non-U.S. 44,228 750 1.70 35,399 648 1.83 44,067 733 1.66
Total interest-earning assets 820,527 13,174 1.61 775,255 12,309 1.59 782,517 13,907 1.78
Cash and due from banks 4,987 3,709 5,066
Other non-interest-earning assets 2 118,901 113,310 124,554
Total Assets $944,415 $892,274 $912,137
Liabilities
Interest-bearing deposits $ 40,266 $ 280 0.70% $ 38,011 $ 304 0.80% $ 41,076 $ 415 1.01%
U.S. 33,234 243 0.73 31,418 279 0.89 35,043 371 1.06
Non-U.S. 7,032 37 0.53 6,593 25 0.38 6,033 44 0.73
Securities loaned and securities sold under
agreements to repurchase, at fair value 171,753 905 0.53 160,280 708 0.44 156,794 1,317 0.84
U.S. 110,235 280 0.25 112,839 355 0.31 111,718 392 0.35
Non-U.S. 61,518 625 1.02 47,441 353 0.74 45,076 925 2.05
Financial instruments sold, but not yet
purchased 1, 2 102,282 2,464 2.41 89,040 1,859 2.09 72,866 1,854 2.54
U.S. 52,065 984 1.89 44,713 818 1.83 39,647 586 1.48
Non-U.S. 50,217 1,480 2.95 44,327 1,041 2.35 33,219 1,268 3.82
Commercial paper 1,881 5 0.24 1,624 5 0.31 1,002 5 0.50
U.S. 630 2 0.31 289 1 0.35 284 3 1.06
Non-U.S. 1,251 3 0.20 1,335 4 0.30 718 2 0.28
Other borrowings 4, 5 76,616 521 0.68 53,888 448 0.83 58,129 618 1.06
U.S. 50,029 429 0.86 33,017 393 1.19 36,164 525 1.45
Non-U.S. 26,587 92 0.35 20,871 55 0.26 21,965 93 0.42
Long-term borrowings 5, 6 186,148 3,439 1.85 193,031 3,155 1.63 203,280 2,585 1.27
U.S. 179,004 3,235 1.81 183,338 2,910 1.59 192,054 2,313 1.20
Non-U.S. 7,144 204 2.86 9,693 245 2.53 11,226 272 2.42
Other interest-bearing liabilities 7 203,940 368 0.18 189,008 327 0.17 207,148 (294) (0.14)
U.S. 149,958 (535) (0.36) 142,752 (221) (0.15) 147,206 (723) (0.49)
Non-U.S. 53,982 903 1.67 46,256 548 1.18 59,942 429 0.72
Total interest-bearing liabilities 782,886 7,982 1.02 724,882 6,806 0.94 740,295 6,500 0.88
Non-interest-bearing deposits 140 169 115
Other non-interest-bearing liabilities 2 88,681 92,966 106,200
Total liabilities 871,707 818,017 846,610
Shareholders’ equity
Preferred stock 3,990 6,957 11,363
Common stock 68,718 67,300 54,164
Total shareholders’ equity 72,708 74,257 65,527
Total liabilities, preferred stock and
shareholders’ equity $944,415 $892,274 $912,137
Interest rate spread 0.59% 0.65% 0.90%
Net interest income and net yield on
interest-earning assets $ 5,192 0.63 $ 5,503 0.71 $ 7,407 0.95
U.S. 3,600 0.67 4,161 0.77 6,073 1.09
Non-U.S. 1,592 0.56 1,342 0.57 1,334 0.59
Percentage of interest-earning assets and
interest-bearing liabilities attributable to
non-U.S. operations 8
Assets 34.80% 30.22% 28.98%
Liabilities 26.53 24.35 24.07

1. Consists of cash financial instruments, including equity securities and convertible debentures.
2. Derivative instruments and commodities are included in other non-interest-earning assets and other non-interest-bearing liabilities.
3. Primarily consists of cash and securities segregated for regulatory and other purposes and certain receivables from customers and counterparties.
4. Consists of short-term other secured financings and unsecured short-term borrowings, excluding commercial paper.
5. Interest rates include the effects of interest rate swaps accounted for as hedges.
6. Consists of long-term secured financings and unsecured long-term borrowings.
7. Primarily consists of certain payables to customers and counterparties.
8. Assets, liabilities and interest are attributed to U.S. and non-U.S. based on the location of the legal entity in which the assets and liabilities are held.

Changes in Net Interest Income, Volume and Rate

Analysis
The table below presents an analysis of the effect on net changes due to volume/rate variance have been allocated to
interest income of volume and rate changes. In this analysis, volume.
For the Year Ended

December 2011 versus December 2010 December 2010 versus December 2009
Increase (decrease) due Increase (decrease) due
to change in: to change in:
Net Net
in millions Volume Rate change Volume Rate change
Interest-earning assets
Deposits with banks $ 28 $ 11 $ 39 $ 20 $ 1 $ 21
U.S. 23 5 28 18 4 22
Non-U.S. 5 6 11 2 (3) (1)
Securities borrowed, securities purchased under agreements to
resell, at fair value and federal funds sold 186 (60) 126 38 (449) (411)
U.S. 28 (352) (324) (4) 65 61
Non-U.S. 158 292 450 42 (514) (472)
Financial instruments owned, at fair value 375 (3) 372 (234) (526) (760)
U.S. (212) (176) (388) (404) (160) (564)
Non-U.S. 587 173 760 170 (366) (196)
Other interest-earning assets 299 29 328 (159) (289) (448)
U.S. 149 77 226 — (363) (363)
Non-U.S. 150 (48) 102 (159) 74 (85)
Change in interest income 888 (23) 865 (335) (1,263) (1,598)
Interest-bearing liabilities
Interest-bearing deposits 15 (39) (24) (30) (81) (111)
U.S. 13 (49) (36) (32) (60) (92)
Non-U.S. 2 10 12 2 (21) (19)
Securities loaned and securities sold under agreements to
repurchase, at fair value 136 61 197 22 (631) (609)
U.S. (7) (68) (75) 4 (41) (37)
Non-U.S. 143 129 272 18 (590) (572)
Financial instruments sold, but not yet purchased, at fair value 313 292 605 354 (349) 5
U.S. 139 27 166 93 139 232
Non-U.S. 174 265 439 261 (488) (227)
Commercial paper 1 (1) — 2 (2) —
U.S. 1 — 1 — (2) (2)
Non-U.S. — (1) (1) 2 — 2
Other borrowings 166 (93) 73 (40) (130) (170)
U.S. 146 (110) 36 (37) (95) (132)
Non-U.S. 20 17 37 (3) (35) (38)
Long-term debt (151) 435 284 (177) 747 570
U.S. (78) 403 325 (138) 735 597
Non-U.S. (73) 32 (41) (39) 12 (27)
Other interest-bearing liabilities 103 (62) 41 (155) 776 621
U.S. (26) (288) (314) 7 495 502
Non-U.S. 129 226 355 (162) 281 119
Change in interest expense 583 593 1,176 (24) 330 306
Change in net interest income $305 $(616) $(311) $(311) $(1,593) $(1,904)

Available-for-sale Securities Portfolio

The table below presents the fair value of available-for-sale securities.
Gross Gross
Amortized Unrealized Unrealized Fair
in millions Cost Gains Losses Value
Available-for-sale securities, December 2011
Commercial paper, certificates of deposit, time deposits and other money market instruments $ 406 $ — $ — $ 406
U.S. government and federal agency obligations 582 80 — 662
Non-U.S. government obligations 19 — — 19
Mortgage and other asset-backed loans and securities 1,505 30 (119) 1,416
Corporate debt securities 1,696 128 (11) 1,813
State and municipal obligations 418 63 — 481
Other debt obligations 67 — (3) 64
Total available-for-sale securities $4,693 $301 $(133) $4,861
Available-for-sale securities, December 2010
Commercial paper, certificates of deposit, time deposits and other money market instruments $ 176 $ — $ — $ 176
U.S. government and federal agency obligations 638 18 (19) 637
Non-U.S. government obligations 2 — — 2
Mortgage and other asset-backed loans and securities 593 82 (5) 670
Corporate debt securities 1,533 162 (7) 1,688
State and municipal obligations 356 8 (5) 359
Other debt obligations 136 7 (2) 141
Total available-for-sale securities $3,434 $277 $ (38) $3,673

The table below presents the fair value, amortized cost and contractual maturity. Yields are calculated on a weighted
weighted average yields of available-for-sale securities by average basis.
As of December 2011
Due After Due After
Due in One Year Through Five Years Through Due After
One Year or Less Five Years Ten Years Ten Years Total
$ in millions Amount Yield Amount Yield Amount Yield Amount Yield Amount Yield
Fair value of available-for-sale securities
Commercial paper, certificates of deposit,
time deposits and other money market
instruments $406 —% $ — —% $ — —% $ — —% $ 406 —%
U.S. government and federal agency
obligations 72 — 132 3 69 2 389 4 662 3
Non-U.S. government obligations — — 9 3 9 6 1 4 19 4
and securities — — 120 7 19 5 1,277 10 1,416 10
Corporate debt securities 33 5 425 4 848 5 507 6 1,813 5
State and municipal obligations 1 5 12 5 — — 468 6 481 6
Other debt obligations — — 10 4 — — 54 3 64 3
Total available-for-sale securities $512 $708 $945 $2,696 $4,861
Amortized cost of available-for-sale
securities $512 $696 $899 $2,586 $4,693
As of December 2010
Due After Due After
Due in One Year Through Five Years Through Due After
One Year or Less Five Years Ten Years Ten Years Total
$ in millions Amount Yield Amount Yield Amount Yield Amount Yield Amount Yield
Fair value of available-for-sale securities
Commercial paper, certificates of deposit,
time deposits and other money market
instruments $176 —% $ — —% $ — —% $ — —% $ 176 —%
U.S. government and federal agency
obligations 37 4 99 3 17 4 484 4 637 4
Non-U.S. government obligations — — 2 2 — — — — 2 2
and securities — — — — — — 670 11 670 11
Corporate debt securities 34 6 126 6 717 6 811 7 1,688 6
State and municipal obligations — — 10 5 11 5 338 6 359 6
Other debt obligations — — — — 24 1 117 5 141 4
Total available-for-sale securities $247 $237 $769 $2,420 $3,673
Amortized cost of available-for-sale
securities $246 $220 $708 $2,260 $3,434

Deposits
The table below presents a summary of the firm’s interest-bearing deposits.
Average Balances Average Interest Rates

Year Ended December Year Ended December
$ in millions 2011 2010 2009 2011 2010 2009
U.S.:
Savings 1 $25,916 $23,260 $23,024 0.42% 0.44% 0.62%
Time 7,318 8,158 12,019 1.84 2.16 1.89
Total U.S. deposits 33,234 31,418 35,043 0.73 0.89 1.06
Non-U.S.:
Demand 5,378 5,559 5,402 0.46 0.34 0.61
Time 1,654 1,034 631 0.73 0.58 1.65
Total Non-U.S. deposits 7,032 6,593 6,033 0.53 0.38 0.73
Total deposits $40,266 $38,011 $41,076 0.70 0.80 1.01
1. Amounts are available for withdrawal upon short notice, generally within seven days.
Ratios
The table below presents selected financial ratios.
Year Ended December

2011 2010 2009
Net earnings to average assets 0.5% 0.9% 1.5%
Return on average common shareholders’ equity 1 3.7 11.5 22.5
Return on average total shareholders’ equity 2 6.1 11.3 20.4
Total average equity to average assets 7.7 8.3 7.2
Dividend payout ratio 3 31.0 10.6 4.7
1. Based on net earnings applicable to common shareholders divided by average monthly common shareholders’ equity.
2. Based on net earnings divided by average monthly total shareholders’ equity.
3. Dividends declared per common share as a percentage of diluted earnings per common share.
Short-term and Other Borrowed Funds

The table below presents a summary of the firm’s securities mature within one year of the financial statement date and
loaned and securities sold under agreements to repurchase include borrowings that are redeemable at the option of the
and short-term borrowings. These borrowings generally holder within one year of the financial statement date.
Securities Loaned and Securities Sold

Under Agreements to Repurchase Commercial Paper Other Funds Borrowed 1, 2
$ in millions 2011 2010 2009 2011 2010 2009 2011 2010 2009
Amounts outstanding at year-end $171,684 $173,557 $143,567 $1,491 $1,306 $1,660 $76,732 $71,065 $48,787
Average outstanding during the year 171,753 160,280 156,794 1,881 1,624 1,002 76,616 53,888 58,129
Maximum month-end outstanding 190,453 173,557 169,083 2,853 1,712 3,060 84,546 71,065 77,712
Weighted average interest rate
During the year 0.53% 0.44% 0.84% 0.24% 0.31% 0.50% 0.68% 0.83% 1.06%
At year-end 0.39 0.44 0.26 0.34 0.20 0.37 0.93 0.63 0.76
1. Includes short-term secured financings of $29.19 billion, $24.53 billion and $12.93 billion as of December 2011, December 2010 and December 2009, respectively.
2. As of December 2011, December 2010 and December 2009, weighted average interest rates include the effects of hedging.

Cross-border Outstandings
Cross-border outstandings are based on the Federal Claims in the tables below include cash, receivables,
Financial Institutions Examination Council’s (FFIEC) securities purchased under agreements to resell, securities
regulatory guidelines for reporting cross-border borrowed and cash financial instruments, but exclude
information and represent the amounts that the firm may derivative instruments and commitments. Securities
not be able to obtain from a foreign country due to country- purchased under agreements to resell and securities
specific events, including unfavorable economic and borrowed are presented gross, without reduction for related
political conditions, economic and social instability, and securities collateral held, based on the domicile of the
changes in government policies. counterparty. Margin loans (included in receivables) are
presented based on the amount of collateral advanced by
Credit exposure represents the potential for loss due to the
the counterparty.
default or deterioration in credit quality of a counterparty
or an issuer of securities or other instruments the firm holds The tables below present cross-border outstandings for
and is measured based on the potential loss in an event of each country in which cross-border outstandings exceed
non-payment by a counterparty. Credit exposure is reduced 0.75% of consolidated assets in accordance with the FFIEC
through the effect of risk mitigants, such as netting guidelines.
agreements with counterparties that permit the firm to
offset receivables and payables with such counterparties or
obtaining collateral from counterparties. The tables below
do not include all the effects of such risk mitigants and do
not represent the firm’s credit exposure.
As of December 2011
in millions Banks Governments Other Total
Country
France $33,916 1 $ 2,859 $ 3,776 $40,551
Cayman Islands — — 33,742 33,742 3
Japan 18,745 31 6,457 25,233 3
Germany 5,458 16,089 3,162 24,709
United Kingdom 2,111 3,349 5,243 10,703 3
Italy 6,143 3,054 841 10,038 4
Ireland 1,148 63 8,801 2 10,012
China 6,722 38 2,908 9,668
Switzerland 3,836 40 5,112 8,988
Canada 676 1,019 6,841 8,536
Australia 1,597 470 5,209 7,276
As of December 2010
in millions Banks Governments Other Total
Country
France $29,250 1 $ 7,373 $ 4,860 $41,483
Cayman Islands 7 — 35,850 35,857 3
Japan 21,881 49 8,002 29,932 3
Germany 3,767 16,572 2,782 23,121
China 10,849 701 2,931 14,481
United Kingdom 2,829 2,401 6,800 12,030 3
Switzerland 2,473 151 7,616 10,240
Canada 260 366 6,741 7,367
1. Primarily comprised of secured lending transactions with a clearing house which are secured by collateral.
2. Primarily comprised of interests in and receivables from funds domiciled in Ireland, but whose underlying investments are primarily located outside of Ireland, and
secured lending transactions which are secured by U.S. government obligations.
3. Excludes claims of $2.27 billion, $6.99 billion and $53.01 billion as of December 2011, and $1.21 billion, $7.06 billion and $26.84 billion as of December 2010 for the
Cayman Islands, Japan and the United Kingdom, respectively, where the firm’s subsidiary and the counterparty are domiciled within the same foreign country, but
the claim is not denominated in that country’s local currency.
4. Primarily comprised of secured lending transactions which are primarily secured by German government obligations.

Board Members, Officers and Directors
as of March 26, 2012
Board of Management Managing Directors

Directors Committee Managing Directors are organized by Managing Director class
Lloyd C. Blankfein Lloyd C. Blankfein Lloyd C. Blankfein John A. Mahoney

Chairman and Chief Chairman and Chief John P. Curtin, Jr. J. William McMahon
Executive Officer Executive Officer Richard A. Friedman Donald J. Mulvihill
Timothy J. O’Neill Stephen R. Pierce
Gary D. Cohn Gary D. Cohn
Gregory K. Palm John J. Rafter
President and Chief President and Chief
Masanori Mochida John F.W. Rogers
Operating Officer Operating Officer
Gene T. Sykes Michael M. Smith
John H. Bryan John S. Weinberg David A. Viniar* Kaysie P. Uniacke
Retired Chairman and J. Michael Evans John S. Weinberg Haruko Watanuki
Chief Executive Officer Michael S. Sherwood Sharmin Mossavar-Rahmani* Paolo Zannoni
of Sara Lee Corporation Vice Chairmen Armen A. Avanessians Yoel Zaoui
Gary D. Cohn Peter C. Aberg
M. Michele Burns Christopher A. Cole Christopher A. Cole Frances R. Bermanzohn*
Former Chairman and Chief Edith W. Cooper Henry Cornell Robert A. Berry
Executive Officer of Mercer Gordon E. Dyal J. Michael Evans Craig W. Broderick
Isabelle Ealet Michael S. Sherwood* Richard M. Campbell-Breeden
Claes Dahlbäck
Richard A. Friedman Esta E. Stecher Anthony H. Carpet
Senior Advisor to
Richard J. Gnodde Terence J. O’Neill Michael J. Carr
Investor AB and Foundation
Eric S. Lane Thomas C. Brasco Kent A. Clark
Asset Management
Gwen R. Libstag Peter D. Brundage Edith W. Cooper*
Stephen Friedman Masanori Mochida Andrew A. Chisholm John S. Daly
Chairman of Stone Point Timothy J. O’Neill Abby Joseph Cohen Gordon E. Dyal
Capital John F.W. Rogers E. Gerald Corrigan Michael P. Esposito*
David C. Ryan Charles P. Eve Matthew T. Fremont-Smith
William W. George Pablo J. Salame Christopher G. French Andrew M. Gordon
Professor of Management Stephen M. Scherr C. Douglas Fuge David J. Greenwald
Practice at Harvard Business Jeffrey W. Schroeder Richard J. Gnodde Walter H. Haydock
School and Former Chairman Harvey M. Schwartz Jeffrey B. Goldenberg James A. Hudis
and Chief Executive Officer David M. Solomon Timothy J. Ingrassia David J. Kostin
of Medtronic, Inc. Esta E. Stecher Bruce M. Larson Paulo C. Leme
James A. Johnson Steven H. Strongin Gwen R. Libstag Hughes B. Lepic
Vice Chairman of Ashok Varadhan Victor M. Lopez-Balboa Kathy M. Matsui*
Perseus, L.L.C. David A. Viniar Sanjeev K. Mehra Geraldine F. McManus
Yoël Zaoui Muneer A. Satter Jeffrey M. Moslow
Lois D. Juliber
John P. Shaughnessy Michael J. Poulter
Former Vice Chairman and Gregory K. Palm
Theodore T. Sotir Paul M. Russo
Chief Operating Officer of General Counsel
W. Thomas York, Jr. Steven M. Scopellite*
Colgate-Palmolive Company
Alan M. Cohen Philippe J. Altuzarra Sarah E. Smith
Lakshmi N. Mittal Head of Global Compliance Jonathan A. Beinner Steven H. Strongin
Chairman and Chief Andrew S. Berman Patrick Sullivan
Executive Officer of Steven M. Bunson John J. Vaske
ArcelorMittal John W. Curtis David M. Solomon
Matthew S. Darnall Karen R. Cook
James J. Schiro Alexander C. Dibelius Gregory A. Agran
Former Chief Executive Karlo J. Duvnjak Raanan A. Agus
Officer of Zurich Financial Isabelle Ealet Dean C. Backer
Services Elizabeth C. Fascitelli Stuart N. Bernstein
Debora L. Spar Oliver L. Frankel Alison L. Bott
President of Barnard College H. John Gilbertson, Jr. Mary D. Byron
Celeste A. Guth Thomas G. Connolly*
Gregory T. Hoogkamp Michael G. De Lathauwer
John F.W. Rogers
William L. Jacob, III James Del Favero
Secretary to the Board
Andrew J. Kaiser Michele I. Docharty
Robert C. King, Jr. Thomas M. Dowling
Francisco Lopez-Balboa Brian J. Duffy
Antigone Loudiadis Keith L. Hayes
*Partnership Committee Member

Bruce A. Heyman Anthony W. Ling George N. Mattson J. Christopher A. Kojima

Daniel E. Holland, III Bonnie S. Litt J. Ronald Morgan, III Takahiro Komatsu
Michael R. Housden Joseph Longo Rie Murayama Rudolf N. Lang
Paul J. Huchro John V. Mallory Jeffrey P. Nedelman Brian J. Lee
Andrew J. Jonas John J. McCabe Gavin G. O’Connor George C. Lee, II
James M. Karp James A. McNamara Todd G. Owens Tim Leissner
Timothy M. Kingston Leslie S. Nelson Fumiko Ozawa Allan S. Levine
John J. Lauto Fergal J. O’Driscoll Helen Paleno Brian T. Levine
Matthew Lavicka L. Peter O’Hagan Archie W. Parnell Terence B. Lim
David N. Lawrence Nigel M. O’Sullivan Alan M. Rapfogel Paula B. Madoff
Ronald S. Levin James R. Paradise Sara E. Recktenwald Puneet Malhi
Robert S. Mancini Philip A. Raper Thomas S. Riggs, III Bruce H. Mendelsohn
Richard P. McNeil Michael J. Richman David C. Ryan Michael J. Millette
Michael R. Miele Elizabeth E. Robinson* David M. Ryan Milton R. Millman
Suok J. Noh Michael S. Rotter Susan J. Scher Philip J. Moffitt
David B. Philip Thomas M. Schwartz Stephen M. Scherr Simon P. Morris
Ellen R. Porges Lisa M. Shalett Abraham Shua Thomas C. Morrow*
Kevin A. Quinn Ralph J. Silva John E. Waldron Marc O. Nachmann
Katsunori Sago Johannes R. Sulzberger Robert P. Wall Steven M. Pinkos
Pablo J. Salame Caroline H. Taylor Michael W. Warren Jean Raby
Jeffrey W. Schroeder Eiji Ueda David D. Wildermuth Richard J. Revell
Harvey M. Schwartz Ashok Varadhan* Kevin L. Willens Marc A. Rothenberg
Trevor A. Smith Martin M. Werner Jon A. Woodruff Matthew L. Schroeder
Shahriar Tadjbakhsh C. Howard Wietschner Edward R. Wilkinson Daniel M. Shefter
Donald J. Truesdale Wassim G. Younan Timothy H. Moe Guy C. Slimmon
John S. Willian Donald W. Himpele Charles Baillie Christoph W. Stanger
Andrew F. Wilson Harry Silver Bernardo Bailo Robin A. Vince
Paul M. Young Alison J. Mass* Stacy Bash-Polley* Andrea A. Vittorelli
Jack Levy* Ben I. Adler Susan M. Benz Theodore T. Wang
Mark F. Dehnert Philip S. Armstrong Johannes M. Boomaars Elisha Wiesel
Michael H. Siegel William J. Bannon J. Theodore Borter Neil J. Wright
Matthew C. Westerman Scott B. Barringer Timothy J. Bridges Denise A. Wyllie
Jason H. Ekaireb Steven M. Barry Nicholas F. Burgin Sheila H. Patel
Seaborn S. Eastland Jordan M. Bender Gerald J. Cardinale* Mark E. Agne
Alan J. Brazil Dorothee Blessing Lik Shuen David Chan Gareth W. Bater
W. Reed Chisholm II Joseph M. Busuttil Colin Coleman Oliver R. Bolitho
Jane P. Chwick Jin Yong Cai Kenneth W. Coquillette Sally A. Boyle*
Michael D. Daffey* Valentino D. Carlotti Michael J. Crinieri Lester R. Brafman
Joseph P. DiSabato Linda S. Daines Craig W. Crossman Cynthia A. Brower
James H. Donovan Stephen Davies Jeffrey R. Currie Philippe L. Camu
Donald J. Duet Diego De Giorgi* Stephen D. Daniel John W. Cembrook
Michael L. Dweck Daniel L. Dees* Bradley S. DeFoor William J. Conley, Jr.
Earl S. Enzer Kenneth M. Eberts, III Alvaro del Castano Thomas W. Cornacchia
Christopher H. Eoyang Luca D. Ferrari Robert K. Ehudin Frederick C. Darling
Norman Feit David A. Fishman Kathy G. Elsesser David H. Dase
Robert K. Frumkes Orit Freedman Weissman Peter C. Enns François-Xavier de Mallmann
Gary T. Giglio Naosuke Fujita Katherine B. Enquist L. Brooks Entwistle
Michael J. Graziano Enrico S. Gaglioti James P. Esposito Elisabeth Fontenelli
Peter Gross Nancy Gloor Douglas L. Feagin Elizabeth J. Ford
Douglas C. Heidt Stefan Green Gail S. Fierstein Colleen A. Foster
Kenneth W. Hitchner Mary L. Harmon Timothy T. Furey Linda M. Fox
Philip Holzer Edward A. Hazel Gonzalo R. Garcia Kieu L. Frisby
Walter A. Jackson Margaret J. Holen Justin G. Gmelich Timur F. Galen
Peter T. Johnston Sean C. Hoover Michael J. Grimaldi Rachel C. Golder
Roy R. Joseph Kenneth L. Josselyn Simon N. Holden Kevin J. Guidotti
James C. Katzman Eric S. Lane Shin Horie Elizabeth M. Hammack
Shigeki Kiritani* Gregg R. Lemkau* Adrian M. Jones Kenneth L. Hirsch
Gregory D. Lee Ryan D. Limaye Alan S. Kava James P. Kenney
Todd W. Leland Robert A. Mass Andreas Koernlein Steven E. Kent

Yasuro K. Koizumi Nancy D. Browne Lorin P. Radtke Steve M. Bunkin

Robert A. Koort Elizabeth M. Burban Deepak K. Rao Mark J. Buono
Brian J. Lahey Anthony Cammarata, Jr. Luigi G. Rizzo Charles E. Burrows
Hugh J. Lawson David C. Carlebach J. Timothy Romer Shawn P. Byron
Ronald Lee Donald J. Casturo John R. Sawtell Jason G. Cahilly
Deborah R. Leone James R. Charnley Paul D. Scialla Marguarite A. Carmody
Thomas R. Lynch Matthew J. Clark Harvey S. Shapiro Stuart A. Cash
Peter J. Lyon Jeffrey F. Daly Keith A. Shultis Christopher L. Castello
James P. McCarthy Debora J. Daskivich Suhail A. Sikhtian Nien Tze Elizabeth Chen
Dermot W. McDonogh Michael C. Dawley Norborne G. Smith, III Denis P. Coleman, III
Arjun N. Murti Ahmad B. Deek Ying Ying Glenda So Richard N. Cormack
Craig J. Nossel Aidan P. Dunn David Z. Solomon James V. Covello
Anthony J. Noto William J. Elliott Robert C. Spofford Christian P. de Haaij
Peter C. Oppenheimer Mark Evans Joseph J. Struzziery, III Olaf Diaz-Pintado
Carol V. Pledger William J. Fallon Randolph A. Stuzin Albert F. Dombrowski
Gilberto Pozzi Matthew J. Fassler Damian E. Sutcliffe Keith Douglas
Krishna S. Rao Jose M. Fernandez Robert J. Sweeney Daniel A. Dreyfus
Louisa G. Ritter Wolfgang Fink Pawan Tewari David P. Eisman
Lisa A. Rotenberg Dino Fusco Terrence P. Travis Carl Faker
Pamela S. Ryan Philip L. Gardner Paul Walker Stephan J. Feldgoise
Clare R. Scherrer James R. Garman Dominic A. Wilson Patrick J. Fels
Vivian C. Schneck-Last Sarah J. Gray Steve Windsor Benjamin W. Ferguson
John A. Sebastian Jason R. Haas Martin Wiwen-Nilsson Samuel W. Finkelstein
Peter A. Seccia Thomas E. Halverson Yoshihiko Yano Peter E. Finn
Peter D. Selman Eric I. Hamou Pei Pei Yu Sean J. Gallagher
Heather K. Shemilt Jan Hatzius Xing Zhang Ivan C. Gallegos Rivas
Gavin Simms Jens D. Hofmann Hector E. Negroni Francesco U. Garzarelli
Alec P. Stais Laura A. Holleman R. Martin Chavez* Michelle Gill
Laurence Stein Dane E. Holmes Atosa Moini Alicia K. Glen
Patrick M. Street Robyn A. Huffman Edward Madara, III Jason A. Gottlieb
Thomas D. Teles Alastair J. Hunt Stephen J. O’Flaherty Mark K. Hancock
Frederick Towfigh Leonid Ioffe Court E. Golumbic Martin Hintze
Greg A. Tusar Steffen J. Kastner Alasdair J. Warren Todd Hohman
Philip J. Venables Christopher M. Keogh Yoshiyuki Hoshino James P. Houghton
Alejandro Vollbrechthausen Peter Kimpel Ian Gilday Christopher E. Hussey
Eileen M. Dillon Scott G. Kolar Andy Fisher Etsuko Kanayama
Deborah B. Wilkens Annette L. Krassner Marshall Smith Dimitrios Kavvathas
Shinichi Yokote Linda A. LaGorga Charles F. Adams C. Annette Kelton
Alan M. Cohen Eugene H. Leouzon Richard A. Kimball, Jr. John J. Kim
Michiel P. Lap Wayne M. Leslie Thomas J. Stein Hideki Kinuhata
Peter E. Scialla Iain Lindsay Farid Pasha Michael E. Koester
Helena Koo Hugo P. MacNeill Hidehiro Imatsu Christopher P. Lalli
Stefan R. Bollinger Arline Mann Nick S. Advani Geoffrey C. Lee
Gregory B. Carey Kevin T. McGuire Sang Gyun Ahn Laurent Lellouche
Paul R. Aaron Thomas J. McLaughlin Analisa M. Allen John R. Levene
Andrew W. Alford Avinash Mehrotra Mark A. Allen Hao-Cheng Liu
Fareed T. Ali Jonathan M. Meltzer Ichiro Amano Lindsay P. LoBue
William D. Anderson, Jr. Christopher Milner Jeffrey D. Barnett Joseph W. Macaione
Rachel Ascher Christina P. Minnis Tracey E. Benford David M. Marcinek
Dolores S. Bamford Kenichi Nagasu Gaurav Bhandari Marvin Markus
Benjamin C. Barber Ted K. Neely, II Marc O. Boheim Roger C. Matthews, Jr.
Slim C. Bentami Michael L. November V. Bunty Bohra Thomas F. Matthias
Susan G. Bowers Toru Okabe Ralane F. Bonn F. Scott McDermott
Christoph M. Brand Konstantinos N. Pantazopoulos John E. Bowman, III John J. McGuire, Jr.
Michael J. Brandmeyer Robert D. Patch Oonagh T. Bradley Sean T. McHugh
Andrew I. Braun Bruce B. Petersen Samuel S. Britton David R. Mittelbusher
Anne F. Brennan Cameron P. Poetzscher Torrey J. Browder Bryan P. Mix
Tony M. Briney Kenneth A. Pontarelli Derek T. Brown Junko Mori
Jason M. Brown Lora J. Robertson Samantha R. Brown Takashi Murata

Massoud Mussavian Robin Rousseau Vance M. Duigan Edward T. Naylor

Amol S. Naik Adam S. Clayton Steven T. Elia Graham H. Officer
Chiang-Ling Ng Jonathan M. Penkin Harry Eliades Lisa Opoku
Junya Nishiwaki Mark R. Etherington Suzanne Escousse Gerald B. Ouderkirk, III
Mitsunari Okamoto Craig W. Packer Steven A. Ferjentsik Charles L. Park
Jennifer A. Padovani David A. George Carlos Fernandez-Aller Jae Hyuk Park
Nicholas W. Phillips Michael Rimland Gregory C. Ferrero Francesco Pascuzzi
Louis Piliego Keith Ackerman David A. Friedland Curtis S. Probst
Michelle H. Pinggera Carlos Pertejo Irwin Goldberg Jeffrey Rabinowitz
M. Louise Pitt Dojin Kim Juan D. Gomez-Villalba Ante Razmilovic
James F. Radecki Massimo Della Ragione Paul Graves Lawrence J. Restieri, Jr.
Richard N. Ramsden Lachlan G. Edwards Philip W. Grovit Lloyd S. Reynolds
Carl J. Reed Chang-Po Yang Jonathan J. Hall Samuel D. Robinson
Scott A. Romanoff Iain N. Drayton Dylan S. Halterlein Philippa A. Rogers
Michael J. Rost Fadi Abuali Magnus C. Hardeberg Michael E. Ronen
David T. Rusoff Kevin L. Adams Norman A. Hardie Adam C. Rosenberg
Ankur A. Sahu Christian S. Alexander Harold P. Hope, III Wendy E. Sacks
Guy E. Saidenberg David Z. Alter Gregory P. Hopper Ricardo Salaman
Julian Salisbury Vincent L. Amatulli Ericka T. Horan Thierry Sancier
Brian J. Saluzzo Rajesh Amin Stephanie Hui David J. Santina
David A. Schwimmer Koral Anderson Irfan S. Hussain Kara Saxon
Rebecca M. Shaghalian Kulbir S. Arora Kota Igarashi Ian M. Schmidek
Magid N. Shenouda Ramaz A. Ashurov Tsuyoshi Inoue Steven M. Schwartz
Julian F. Simon Andrew J. Bagley Makoto Ito Stephen B. Scobie
Michael L. Simpson Susan E. Balogh Kathleen Jack Judith L. Shandling
Barry Sklar Jennifer A. Barbetta Matthew A. Jaume Adrianne W. Shapira
Mark R. Sorrell Gerard M. Beatty Tanweer Kabir Graham P. Shaw
John D. Storey Henry Becker, Jr. Christian Kames Hazem A. Shawki
Ram K. Sundaram Roger S. Begelman Afwa D. Kandawire Steven R. Sher
Tatsuya Suzuki Oliver B. Benkert Nicola S. Kane Radford Small
Michael J. Swenson Avanish R. Bhavsar Henry Wen-Herng King Ian G. Smith
Joseph D. Swift Christopher E. Blume Herman R. Klein Wassink Ramsey D. Smith
Jasper Tans Shane M. Bolton Edward C. Knight Kevin M. Sterling
Teresa Teague Peter V. Bonanno Akiko Koda Robert M. Suss
Cory W. Thackeray William C. Bousquette, Jr. Ravi G. Krishnan J. Richard Suth
Klaus B. Toft Patrick T. Boyle Jorg H. Kukies Daiki Takayama
Jeffrey M. Tomasi Stephen Branton-Speak Shiv Kumar Tin Hsien Tan
John H. Tribolati Emmanuel Bresson Edwin Wing-Tang Kwok Megan M. Taylor
Suzette M. Unger Janet A. Broeckel David W. Lang Richard J. Taylor
Leo J. Van Der Linden Richard J. Butland Nyron Z. Latif Maria Teresa Tejada
Lai Kun Judy Vas Chau Joseph A. Camarda Matthew D. Leavitt Timothy H. Thornton
Simone Verri John H. Chartres David A. Lehman Oliver Thym
Toby C. Watson Alex S. Chi Leland Lim Ingrid C. Tierens
Oliver C. Will Steven N. Cho David B. Ludwig Joseph K. Todd
Andrew E. Wolff Kasper Christoffersen Aedan M. MacGreevy Mark R. Tolette
Jennifer O. Youde Gary W. Chropuvka Raghav Maliah Hiroyuki Tomokiyo
Thomas G. Young Jesse H. Cole Matthew F. Mallgrave Jill L. Toporek
Han Song Zhu Brian M. Coleman Karim H. Manji David Townshend
Steven A. Mayer Cyril Cottu Scott D. Marchakitus Patrick M. Tribolet
Mitsuo Kojima Vijay B. Culas Fabio N. Mariani Richard J. Tufft
Michael T. Smith Kyle R. Czepiel Ramnek S. Matharu Toshihiko Umetani
Thomas G. Fruge Manda J. D’Agata Shogo Matsuzawa John P. Underwood
Clifford D. Schlesinger John F. Daly Thomas C. Mazarakis Thomas S. Vandever
Krishnamurthy Sudarshan Michael J. Daum Patrick S. McClymont Richard C. Vanecek
Maziar Minovi Nicola A. Davies John E. McGarry Kurt J. Von Holzhausen
Steven Ricciardi Craig M. Delizia Penny A. McSpadden Nicholas H. von Moltke
Tuan Lam Stacey Ann DeMatteis Celine-Marie G. Mechain Daniel Wainstein
Todd E. Eagle Michael Dinias Simon H. Moseley Fred Waldman
Jess T. Fardella Christina Drews Jeff Mullen Kevin A. Walker

Daniel S. Weiner Aaron M. Arth Franz A. Hall Daniel A. Ottensoser

Owen O. West Victoria J. Attwood Scott Arni G. Hauksson Edward S. Pallesen
Alan S. Wilmit Ian T. Bailey Michael L. Hensch Yanis Papagiannis
David T. Wilson Vivek J. Bantwal Steven P. Herrup Dave S. Park
Edward C. Wilson Michael H. Bartsch Ning Hong Anthony W. Pasquariello
Christopher D. Woolley Caroline R. Benton Pierre Hudry Jignesh Patel
Brendan Wootten Philip R. Berlinski Jonathan O. Hughes Nirubhan Pathmanabhan
John M. Yae Neeti Bhalla Yuji Ito Richard A. Peacock
Salvatore T. Lentini Brian W. Bolster Brian J. Jacoby Vincent Shen Peng
Gregg J. Felton C. Kane Brenan Andrius Jankunas Antonio R. Pereira
David N. Frechette Michael J. Buchanan Dominique M. Jooris Peter J. Perrone
Brendan M. McGovern Michael A. Cagnassola Rajiv K. Kamilla James R. Peters
Shigemitsu Sugisaki Alfredo A. Capote Brian A. Kane Luis Puchol-Plaza
Takashi Yoshimura Jimmy R. Carlberg Vijay M. Karnani Sumit Rajpal
James M. Li Glen T. Casey Noriko Kawamura Peggy D. Rawitt
Drake Pike Christian Channell Dirk-Jan J. Keijer Kathleen M. Redgate
David K. Cheung Westley D. Chapman William P. Keirstead Donald C. Reed
Matthew C. Schwab Eva Chau Shuya Kekke Mark G. Retik
Khaled Eldabag David Chou Prashant R. Khemka James H. Reynolds
Julie A. Harris Thalia Chryssikou Vivien Khoo Sean D. Rice
William L. Blais Charles Citro Tammy A. Kiely Robert E. Ritchie
Michael S. Swell Michael J. Civitella Jisuk Kim Scott M. Rofey
Tamim H. Al-Kawari Luke E. Clayton Lee Guan Kelvin Koh Jeroen Rombouts
John C. Shaffer Kathleen A. Connolly Masafumi Koike Denis R. Roux
William F. Spoor John G. Creaton Satoshi Kubo Douglas L. Sacks
Erich Bluhm Cecile Crochu Kim M. Lazaroo Vikram P. Sahu
David G. McDonald Lauren Dang Scott L. Lebovitz Yann Samuelides
Ezra Nahum Anne Marie B. Darling Geoffery Y.A. Lee Laura D. Sanchez
Dina H. Powell Paul S. Davies David A. Levy Luke A. Sarsfield, III
Anthony Gutman Bruno P. De Kegel Dirk L. Lievens Richard A. Schafrann
Peter C. Russell Matthew P. DeFusco David B. Lischer Oliver Schiller
Celeste J. Tambaro Daniel Deng Stephen I. Lucas Martin A. Schneider
Michael M. Furth Jeffrey L. Dodge Patrick O. Luthi Michael T. Seigne
Andrew Wilkinson Jonathan G. Donne Christina Ma Konstantin A. Shakhnovich
Gregory P. Lee William P. Douglas Whitney C. Magruder Richard Shannon
Alexis Maged Mary L. Dupay Suneil Mahindru Daniel A. Sharfman
Jason B. Mollin Alessandro Dusi Monica M. Mandelli Jonathan M. Sheridan
Robert M. Pulford Mark S. Edwards Richard M. Manley James Roger Francis Shipton
Paul A. Craven Babak Eftekhari Joseph S. Mauro Faryar Shirzad
Maximillian C. Justicz Jonathan M. Egol Matthew D. McAskin Connie J. Shoemaker
Adriano C. Piccinin Akishige Eguchi Matthew B. McClure Anna K. Skoglund
Patrick Tassin de Nonneville Halil Emecen Carolyn E. McGuire Andrew J. Smith
David M. Inggs David P. Ferris Joseph J. McNeila Ronny Soemitro
Chetan Bhandari Jonathan H. Fine Jack Mendelson Bing Song
Edward B. Droesch David A. Fox Xavier C. Menguy Bertram N. Spence
Timothy J. Talkington Jay A. Friedman Lance M. Meyerowich Aurora J. Swithenbank
Daniel J. Bingham Ramani Ganesh Rodney B. Miller Carl H. Taniguchi
Sergei S. Stankovski Huntley Garriott Jason Moo Mark J. Taylor
Kyu Sang Cho Maksim Gelfer Grant R. Moyer Ryan J. Thall
Gerald Messier Gabe E. Gelman Gersoni A. Munhoz Robert B. Thompson
Steven Tulip Jean-Christophe Germani Michael Nachmani Terence Ting
Andrea Vella Donald G. Gervais, Jr. Rishi Nangalia Jacquelyn G. Titus
Serge Marquie Tamilla F. Ghodsi Allison F. Nathan Mark C. Toomey
Karl J. Robijns Federico J. Gilly Dario Negri Kenneth A. Topping
Timothy Callahan Marc C. Gilly Chris Oberoi Pamela C. Torres
Julian C. Allen John L. Glover, III Dimitri Offengenden Ronald Trichon, Jr.
Joanne L. Alma Melissa Goldman Jun Ohama Padideh N. Trojanow
Quentin Andre Richard C. Govers Gregory G. Olafson Kenro Tsutsumi
Sergei Arsenyev Bradley J. Gross Beverly L. O’Toole Peter van der Goes, Jr.

Damien R. Vanderwilt Karim Bennani Joanne Hannaford Christopher G. Mckey

Ram S. Venkateswaran David L. Berdon Nicholas M. Harper Christopher L. Mikosh
Christoph von Reiche Shomick D. Bhattacharya Honora M. Harvey Paul J. Miller
Elizabeth S. Wahab David C. Bicarregui Takashi Hatanaka Yutaka Miura
Sherif J. Wahba Miguel A. Bilbao Jeffrey R. Haughton Joseph Montesano
Zhixue Josh Wang Matthias B. Bock Jason T. Herman Jennifer L. Moyer
Michael L. Warren Jason H. Brauth Charles P. Himmelberg David J. Mullane
Simon R. Watson William Brennan Timothy R. Hodge Eric D. Muller
Vivien Webb Wong Justin M. Brickwood Russell W. Horwitz T. Clark Munnell, Jr.
Peter A. Weidman Michael G. Broadbery Russell E. Hutchinson Guy A. Nachtomi
Karl D. Wianecki Adam B. Broder Tetsuji Ichimori Rohit Narang
Gavin A. Wills Michael R. Brooke Elena Ivanova Jyothsna G. Natauri
Stephen T.C. Wong Shoqat Bunglawala Tomohiro Iwata Jeffrey R. Nazzaro
Shunichi Yamada Scott A. Carroll Vijay Iyengar Carey Nemeth
Kentaro Yamagishi David Castelblanco Maria S. Jelescu John M. O’Connell
Raymond L. Yin Michael L. Chandler Steve Jeneste Kristin A. Olson
Ka Yan Wilfred Yiu Toby J. Chapman Thomas F. Jessop Kevin W. Pamensky
Hisaaki Yokoo Omar J. Chaudhary Kara R. Johnston Nash Panchal
Hsin Yue Yong Hyung-Jin Chung Denis Joly Ali Peera
George F. Travers Giacomo Ciampolini Eric S. Jordan Tracey A. Perini
Rafael I. de Fex Samara P. Cohen D. Seth Kammerman Edward J. Perkin
Andre Laport Ribeiro Stephanie E. Cohen Johannes A. Kaps Jonathan G. Pierce
Beatriz Sanchez Richard Cohn Anil C. Karpal Dhruv Piplani
Ricardo Mora James M. Conti Edward W. Kelly Dmitri Potishko
Joseph A. Stern David Coulson Robert W. Keogh Siddharth P. Prabhu
Jeffrey L. Verschleiser James O. Coulton Aasem G. Khalil Philip B. Prince
Jeffrey B. Andreski Robert Crane Donough Kilmurray Dirk J. Pruis
Graeme C. Jeffery Nicholas T. Cullen, III Lorence H. Kim Francois J. Rigou
Albert J. Cass, III Thomas J. Davis Tobias Koester Stuart Riley
Hidefumi Fukuda Ann M. Dennison Adam M. Korn Tami B. Rosen
Rondy Jennings Michael J. DesMarais Paul Kornfeld Santiago J. Rubin
Peeyush Misra Sheetal Dhanuka Ulrich R. Kratz Howard H. Russell
Ellen G. Cooper Pamela S. Dickstein Florence Kui Natasha P. Sai
Neil C. Kearns Robert Drake-Brockman Glen M. Kujawski Deeb A. Salem
Jeffrey M. Scruggs Yuichiro Eda Michael E. Kurlander Christian D. Salomone
Joseph M. Spinelli Eric Elbaz Jeffrey M. Laborde Krishnan P. Sankaran
Antonio F. Esteves Edward A. Emerson Cory H. Laing Timothy K. Saunders, Jr.
Caglayan Cetin Michael T. Feldman Meena K. Lakdawala Peter Scheman
Aya Stark Hamilton Thomas J. Fennimore Richard N. Lamming Pedro E. Scherer
Alan Zagury Andrew B. Fontein Francesca Lanza Stephanie R. Schueppert
Mary Anne Choo Salvatore Fortunato Sarah C. Lawlor Hugo P. Scott-Gall
Daniel J. Rothman Sheara J. Fredman Benjamin Leahy Gaurav Seth
Jami Rubin Michael L. Freeborn Timothy M. Leahy Kiran V. Shah
Ajay Sondhi Thomas S. Friedberger Dominic J. Lee Raj Shah
Philippe Challande Jacques Gabillon Jason Lee Roopesh K. Shah
Marc d’Andlau April E. Galda Lakith R. Leelasena Takehisa Shimada
Lancelot M. Braunstein Dean M. Galligan Edward K. Leh Tomoya Shimizu
Eric L. Hirschfield Matthew R. Gibson Philippe H. Lenoble Nameer A. Siddiqui
Charles A. Irwin Jeffrey M. Gido Eugeny Levinzon David A. Sievers
Robert D. Boroujerdi Tyler E. Ginn David H. Loeb Brigit L. Simler
Christopher Pilot Nick V. Giovanni Ning Ma David I. Simpson
Francesco Adiliberti Thomas H. Glanfield John G. Madsen Jason E. Singer
Arthur Ambrose Boon Leng Goh Brian M. Margulies David R. Spurr
Graham N. Ambrose Alexander S. Golten Michael C. Marsh Scott A. Stanford
Anna Gabriella C. Antici Esteban T. Gorondi David W. May Michael H. Stanley
Jason S. Armstrong Eric S. Greenberg Adam J. Mazur Matthew F. Stanton
Gregory A. Asikainen Wade G. Griggs, III Ryan L. McCorvie Umesh Subramanian
David J. Atkinson Ralf Hafner Robert A. McEvoy Kathryn E. Sweeney
Heather L. Beckman Jeffrey D. Hamilton William T. McIntire Teppei Takanabe

Troy S. Thornton Bruce A. Albert Udhay Furtado Michaela J. Ludbrook

Ben W. Thorpe Umit Alptuna Jian Mei Gan August Lund
Christine C. Tomas Matthew T. Arnold Simon F. Gee R. Thornton Lurie
Matthew E. Tropp Yusuke Asai Mark E. Giancola Peter R. Lyneham
Charles-Eduard van Rossum Divyata Ashiya Jeremy Glick Gregory P. Lyons
Mark A. Van Wyk Taraneh Azad Cyril J. Goddeeris Paget R. MacColl
Jonathan R. Vanica Jeffrey Bahl Robert A. Gold Lisa S. Mantil
Rajesh Venkataramani Vishal Bakshi Brian S. Goldman Clifton C. Marriott
John R. Vitha, II David C. Bear Jennifer E. Gordon Nicholas Marsh
Katherine M. Walker Deborah Beckmann Koji Gotoda Daniel G. Martin
Brent D. Watson Gary K. Beggerow Adam C. Graves Elizabeth G. Martin
Nicole A. Weeldreyer Andrea Berni David Greely Jason L. Mathews
John A. Weir Roop Bhullar Benedict L. Green Masaaki Matsuzawa
Noah Y. Weisberger Christopher W. Bischoff Lars A. Gronning Alexander M. Mayer
Ellis Whipple John D. Blondel Carey Baker Halio John P. McLaughlin
Pansy Piao Wong Jill A. Borst Thomas V. Hansen Jean-Pascal Meyre
Yat Wai Wu Peter Bradley Christoph H. Hansmeyer Claus Mikkelsen
Andrew P. Wyke James W. Briggs Michael J. Hayes Arthur M. Miller
Seigo Yamasaki Heather L. Brownlie Scott P. Hegstrom Tom Milligan
Xi Ye Richard M. Buckingham Edouard Hervey Heather K. Miner
Susan Yung Robert Buff Susanna F. Hill Gregory P. Minson
Maoqi Zhang Maxwell S. Bulk Timothy S. Hill Hironobu Moriyama
Xiaoyin Zhang Paul J. Burgess Taiichi Hoshino Edward G. Morse
Helen Zhu Jonathan P. Bury Joseph B. Hudepohl Teodoro Moscoso
Robert Allard Kevin G. Byrne Jeffrey J. Huffman Khalid M. Murgian
Paul Ferrarese Tracy A. Caliendo Till C. Hufnagel Caroline B. Mutter
Matthew T. Kaiser Thomas J. Carella Hiroyuki Ito Robert T. Naccarella
Kenneth Damstrom Winston Cheng Corey M. Jassem Olga A. Naumovich
Robert M. Dannenberg Doris Cheung Ian A. Jensen-Humphreys Brett J. Nelson
Thomas Wadsworth Alina Chiew Baoshan Jin Roger Ng
Tareq Islam Getty Chin Aynesh L. Johnson Victor K. Ng
Michael Paese Paul Christensen Eri Kakuta Stephen J. Nundy
Emmanuel P. Crenne Andrew Chung Takayuki Kasama Jernej Omahen
Alain Marcus Robert C. Cignarella John D. Kast Daniel S. Oneglia
Jonathan Ezrow Alberto Cirillo Michael C. Keats Andrew J. Orekar
Asad Haider Nigel C. Cobb Kevin G. Kelly Anna Ostrovsky
Hector Chan Giorgio Cocini Jane M. Kelsey Marco Pagliara
Toshiya Saito Shaun A. Collins Anita K. Kerr Uberto Palomba
Una M. Neary Martin A. Cosgrove Michael Kirch Gena Palumbo
Shantanu Shete Patricia A. Coughlin Marie Louise Kirk Thomas J. Pearce
Keith Tomao Jason E. Cox Caroline V. Kitidis David Perez
Alan Zhang John R. Cubitt Katharina Koenig Jonathan E. Perry
Steve L. Bossi Patrick C. Cunningham Maxim Kolodkin Gerald J. Peterson
Bobby Vedral Canute H. Dalmasse Matthew E. Korenberg Julien D. Petit
Bob G. MacDonald Stephen J. DeAngelis Tatiana A. Kotchoubey Charlotte L. Pissaridou
Tav Morgan Michele della Vigna Anshul Krishan David S. Plutzer
Karl R. Hancock Brian R. Doyle Dennis M. Lafferty Ian E. Pollington
Alan Sharkey Orla Dunne Raymond Lam Alexander E. Potter
Gohir Anwar Karey D. Dye Gregor A. Lanz Jonathan A. Prather
Cassius Leal Sarel Eldor John V. Lanza Chi Tung Melvyn Pun
Etienne Comon Sanja Erceg Solenn Le Floch Alberto Ramos
Li Hui Suo Alexander E. Evis Craig A. Lee Marko J. Ratesic
Dalinc Ariburnu* Robert A. Falzon Rose S. Lee Sunder K. Reddy
John D. Melvin Danielle Ferreira José Pedro Leite da Costa Joanna Redgrave
George Moscoso John K. Flynn Allison R. Liff Horacio M. Robredo
Shameek Konar Una I. Fogarty Luca M. Lombardi Ryan E. Roderick
Tabassum A. Inamdar Allan W. Forrest Joseph W. Long Philip J. Salem
Richard M. Andrade Mark Freeman Todd D. Lopez Hana Thalova
Benny Adler Boris Funke Galia V. Loya Gleb Sandmann

Jason M. Savarese Sonjoy Chatterjee Richard J. Asbery Sally Pope Davis

Joshua S. Schiffrin Yun Liu Naohiko Baba Raymond E. de Castro
Adam Schlesinger Robert Werner Scot M. Baldry Gilles M. Dellaert
Rick Schonberg Robert V. Donahoe, II Gargi Banerjee Wim Den Hartog
Johan F. Schulten Leon Goldfeld Amit Bansal George J. Dennis
Matthew W. Seager Asita Anche Thomas J. Barrett, III Sara V. Devereux
Gaik Khin Nancy Seah Bernard Thye Peng Teo Roger K. Bartlett Diana R. Dieckman
Oliver R.C. Sedgwick Shannon E. Young, III Renee Beaumont Avi Dimor
Ned D. Segal Boris M. Baroudel Stephen E. Becker Lisa A. Donnelly
David Sismey Pankaj Jhamb Mick J. Beekhuizen Igor Donnio
Bryan Slotkin Johan M.D. Den Hoedt Stuart R. Bevan Mark T. Drabkin
Timothy A. Smith Johannes P. Fritze Ron Bezoza Tilo A. Dresig
Warren E. Smith Richard Gostling Nick Bhuta Thomas K. Dunlap
Thomas E. Speight Jeffrey S. Isaacs Christopher J. Biasotti Steven M. Durham
Russell W. Stern Marcel Koebeli David R. Binnion Michael S. DuVally
Joseph Stivaletti William Shope, Jr. James Black Masahiro Ehara
Thomas Stolper Steven K. Barg Michael Bogdan Grant M. Eldred
Chandra K. Sunkara Guido Filippa Charles P. Bouckaert Manal I. Eldumiati
Kengo Taguchi Kathleen Hughes Marco Branca Charles W. Evans
Boon-Kee Tan Michael Zeier Didier Breant Anne M. Fairchild
Kristi A. Tange David Wells Kelly Reed Brennan Craig R. Farber
Jonathan E.A. ten Oever Michael D. Foster Craig T. Bricker John W. Fathers
David S. Thomas Philip A. May Nellie A. Bronner Lev Finkelstein
Jonathan S. Thomas Alastair Maxwell Kimberley Burchett Warren P. Finnerty
Andrew Tilton Jiming Ha Sara Burigo Elizabeth O. Fischer
Mana Nabeshima Sara Strang James M. Busby John J. Flynn
Frank T. Tota Yusof Yaacob Elizabeth A. Byrnes Veronica Foo
Hiroshi Ueki Julian Zhu Alvaro Camara Francesca Fornasari
Naohide Une Michael Wise Ramon Camina Mendizabal Christian L. Fritsch
Fernando P. Vallada Pierre-Emmanuel Y. Juillard Tavis C. Cannell Andrew J. Fry
Samuel Villegas Clemens Grafe Michael J. Casabianca Charles M. Fuller
Christian von Schimmelmann Gary Suen Jacqueline M. Cassidy Ruth Gao
Peadar Ward Jeffrey A. Barclay Leor Ceder David M. Garofalo
Hideharu Watanabe Joseph L. D’Anna Gaurang Chadha Lisheng Geng
Scott C. Watson David K. Gallagher Eli W. Chamberlain Luke F. Gillam
Martin Weber Grant Willis Gilbert Chan Lisa M. Giuffra de Diaz
Gregory F. Werd Frederique Gilain-Huneeus Kevin M. Chan Matthew J. Glickman
Ronnie A. Wexler John A. Sabatini Devin N. Chanmugam Parameswaran Gopikrishnan
David A. Whitehead Joel T. Schwartz Francis S. Chlapowski Luke G. Gordon
David Whitmore Philip J. Shelley Dongsuk Choi Pooja Grover
Petter V. Wiberg Theodore Lubke Stephen L. Christian Patricia R. Hall
David Williams Patrick J. Moran Peter I. Chu Anna Hardwick
Julian Wills Ronald Arons Vania H. Chu John L. Harrisingh
William Wong Michael S. Goldstein Susan M. Ciccarone Peter M. Hartley
Michael Woo John P. Killian Emmanuel D. Clair Gerrit Heine
Nick Yim Brett A. Olsher Bracha Cohen Caroline Heller
Koji Yoshikawa James B. Adams Darren W. Cohen Richard I. Hempsell
Albert E. Youssef Geoffrey P. Adamson Antony A. Courtney Isabelle Hennebelle-Warner
Alexei Zabudkin Yashar Aghababaie Christopher J. Creed Jeremy P. Herman
Adam J. Zotkow Nicole Agnew Timothy J. Crowhurst Matthias Hieber
Carlos Watson John F. Aiello Helen A. Crowley Amanda S. Hindlian
Brian C. Friedman Ahmet Akarli Elie M. Cukierman Darren S. Hodges
Bruno A. Carvalho Ali A. Al-Ali Matthew J. Curtis Edward Y. Huang
Robert J. Liberty Jorge Alcover Jason S. Cuttler Simon Hurst
Fabio H. Bicudo Moazzam Ali Sterling D. Daines Edward McKay Hyde
Philip Callahan Shawn M. Anderson Kevin J. Daly Nagisa Inoue
Christopher J. Cowen Gina M. Angelico Rajashree Datta Marc Irizarry
Atanas Djumaliev John J. Arege Samantha S. Davidson Shintaro Isono
Marc B.M. van Heel Paula G. Arrojo Adam E. Davis Benon Z. Janos

Ronald Jansen Petra Monteiro Tejas A. Shah Angel Young

Darren Jarvis Heather L. Mulahasani Alasdair G. Share Daniel M. Young
Mikhail Jirnov Eric Murciano Kevin C. Shea Raheel Zia
Benjamin R. Johnson Colin D. Murphy William Q. Shelton David A. Markowitz
Richard G. Jones Paul M. Mutter Jie Shen Kent Wosepka
Mariam Kamshad Balachandra L. Naidu Jason E. Silvers Joseph Jiampietro
Makiko Kawamura Arvind Narayanan Ales Sladic China D. Onyemeluke
Christina Kelerchian Mani Natarajan Howard D. Sloan Terri M. Messina
Andre H. Kelleners Antti K. Niini Michelle D. Smith Michele Cortese
Sven H. Khatri Tomoya Nishikawa Stephanie P. Smith Kamal S. Hamdan
Sandip S. Khosla Daniel Nissenbaum Thomas J. Smith Max I. Coreth
David A. Killian Kevin Ohn Sangam Sogani Paul Trickett
Melinda Kleehamer Thomas A. Osmond Robert A. Spencer Yi Wang
Maxim B. Klimov Diana Y. Pae Thomas G. Stelmach Sanjiv Nathwani
Adriano Koelle David C. Page Thomas A. Stokes Ramez Attieh
Goohoon Kwon Elena Paitra Sinead M. Strain Joe Raia
Thymios Kyriakopoulos Chrisos Papavasiliou Phillip B. Suh Erwin W. Shilling
Laurent-Olivier Labeis James Park Jamie Sutherland Brad Brown
David R. Land Katherine J. Park Anton Sychev Soares R. Rodolfo
Lambert M. Lau Kyung-Ah Park Brian A. Tafaro Roberto Belchior
Sandra G. Lawson Ian L. Parker Hideaki Takada Julian M. Trott
David H. Leach Benjamin R. Payne Konnin Tam Aaron J. Peyton
Deborah A. Lento Thomas G. Pease Bong Loo Tan Jayne Lerman
Gavin J. Leo-Rhynie Andrew J. Pena Yasuko Taniguchi Ross Levinsky
Leon Leung Stuart R. Pendell Daniel W. Tapson Eduard E. van Wyk
Ke Li Ricardo H. Penfold Richard M. Thomas Keshav K. Sanghi
Xing Li Jerry Z. Peng Francis S. Todd David A. Youngberg
Sabrina Y. Liak Andrew Philipp Christos Tomaras Johan G. van Jaarsveld
Jason R. Lilien Sasa Pilipovic Lale Topcuoglu Heather Bellini
Kirk L. Lindstrom Giovanna Pomilio Thomas A. Tormey Royal I. Hansen
Amy M. Liu Asahi M. Pompey Chi Keung Tse Alexandra L. Merz
Bernard C. Liu Ling C. Pong Weidong Tu Dan P. Petrozzo
Nelson Lo Michael A. Pope Reha Tutuncu Andrew Armstrong
Kyri Loupis Raya Prabhu Mei Ling Tye David John Z. Acton
Yvonne Low Macario Prieto Nicholas A. Valtz Duncan X.A. Adam
Joshua Lu Joshua Purvis Nicholas J. van den Arend Kate X.A. Aitken
Yvonne Lung Xiao Qin Emile F. Van Dijk Chris Baohm
John G. Macpherson Philippe Quix Dirk-Jan M. Vanderbroeck Andrew N. Barclay
Premal Madhavji J Ram Alexandra S. Vargas George X. Batsakis
Marcello Magaletti Rajiv Ramachandran Peter G. Vermette Danny J. Bessell
Todd M. Malan Maximilliano Ramirez Matthew P. Verrochi Ruben H. Bhagobati
Uday Malhotra Gary M. Rapp Cynthia L. Walker Timothy B.M. Burroughs
Upacala Mapatuna Felicia J. Rector Sindy Wan Chris C. Champion
Kristerfor T. Mastronardi Christopher C. Rollins Freda Wang Edward E.J. Eason
Ikuo Matsuhashi Colin J. Ryan Yi Wang Michael E. Everett
Francois Mauran Maheshwar R. Saireddy Mitchell S. Weiss Nicholas X. Fay
Brendan M. McCarthy Ricardo F. Salgado Greg R. Wilson Joseph A. Fayyad
Patrick E. McCarthy Ian P. Savage Mark J. Wilson Ryan S. Fisher
Michael J. McCreesh Bennett J. Schachter Gudrun Wolff Zac F.I. Fletcher
Mathew R. McDermott Martin L. Schmelkin Isaac W. Wong Robert F.X. Foale
Charles M. McGarraugh Laurie E. Schmidt David J. Woodhouse David G. Goatley
Sean B. Meeker Joseph Schultz Stuart J. Wrigley Graham G. Goldsmith
Christopher J. Millar Dirk Schumacher Jerry Wu Charles X.C. Gorman
Vahagn Minasian Carsten Schwarting Jihong Xiang Simon M. Greenaway
Matthew R. Mitchell Thomas Schweppe Ying Xu Christian X. Guerra
Ryan C. Mitchell Dmitri Sedov Lan Xue Rhys A. Gwyn
Christine Miyagishima Ram Seethepalli Yoshiyuki Yamamoto Dion X. Hershan
Igor Modlin Stacy D. Selig C.T. Yip Andrew Z.J. Hinchliff
Michael Moizant Kunal Shah Eugene Yoon Sean H.X. Hogan

Alastair X. Hunter Andrew Robin Edwin K. Chin Andrew Howard

Nell C. Hutton Ronald Hua Pierre Chu Michael P. Huber
Robert A. Hyden Darrick Geant Jean-Paul Churchouse Jonathan S. Hunt
Nick Jacobson Houston Huang Gregory Chwatko Ahmed Husain
Christian W. Johnston Felipe F. Mattar Massimiliano Ciardi Aytac Ilhan
Ross K. King Heath Terry Simon M. Collier Omar Iqbal
Mark Levinson Jonathan H. Xiong Kenneth Connolly Gurjit S. Jagpal
Gordon L. Livingstone Jeremy W. Cave Frederic J.F. Crosnier Simona Jankowski
Alastair F. Lucas Jose C. Labate Alistair K. Cross Arbind K. Jha
Brendan R. Lyons Michael Clarke Robert G. Crystal Xiangrong Jin
Steven X. Maartensz Ryad Yousuf David J. Curtis Danielle G. Johnson
George X. Maltezos Jeff A. Psaki Keith L. Cynar Michael G. Johnson
James McMurdo Hiroko Adachi Simon Dangoor Paul A. Johnson
Matthew J. McNee Sajid Ahmed Jennifer L. Davis Jean Joseph
Anthony I.J. Miller Flavio Aidar Thomas Degn-Petersen Edina Jung
Craig U. Murray Lee M. Alexander Mark Deniston Philipp O. Kahre
Rob J. Penney Osman Ali James Dickson Abhishek Kapur
Chris X. Pidcock Axel P. Andre Kevin M. Dommenge Sho Kawano
Ian M. Preston Ilana D. Ash Benjamin J. Dyer Jeremiah E. Keefe
Lidia X. Ranieri Dominic Ashcroft Christopher M. Dyer Ryan J. Kelly
Andrew K. Rennie Farshid M. Asl Mariano Echeguren Brian J. Kennedy
Matthew G. Ross Linda W. Avery Charles P. Edwards Nimesh Khiroya
Simon A. Rothery Vladislav E. Avsievich Katherine A. El-Hillow Rohan Khurana
Duncan Rutherford Lucy Baldwin Jenniffer Emanuel David Kim
Nick Sims Jonathan K. Barry Hafize Gaye Erkan Jeff Kim
Curtis Smith Yasmine Bassili Sean Fan Phillip Kimber
Conor J. Smyth Eric D. Batchelder Richard M. Fearn Kathryn A. Koch
Malcolm J. Southwood Jonathan Bayliss Michael A. Fisher Stephen J. Koch
Ashley S.K. Spencer Andrew D. Beckman Nick Forster Konstantin Koudriaev
Paul G. Sundberg Omar L. Beer Jennifer A. Fortner Tannon L. Krumpelman
Andrew Sutherland Mark W. Bigley Nanssia Fragoudaki Fiona Laffan
Andrew R. Tanner Timothy C. Bishop Grady C. Frank James Lamanna
Kate A. Temby James Blackham Michael C. Freedman Kerry C. Landreth
Tim F. Toohey Jacki Bond Benjamin M. Freeman Peter B. Lardner
Paul U.S. Uren Alain Bordoni Thomas Gasson Matthew Larson
Sean F. Walsh Jonathan E. Breckenridge Antonio Gatti Alison W. Lau
Ian R. Ward-Ambler John Brennan Frank S. Ghali Arden Lee
David H. Watts Brian R. Broadbent Jason A. Ginsburg Hanben Kim Lee
Dion W.M. Werbeloff Jerome Brochard Paul A. Giordano Hung Ke Lee
Jeremy B. Williams Jason R. Broder Joshua Glassman Sang-Jun Lee
Vaishali Kasture Robin Brooks Gary M. Godshaw Howard Russell Leiner
Robert G. Burke Amy C. Brown Albert Goh Rainer Lenhard
Mark E. Oldcorn Stefan Burgstaller Ernest Gong Stephen L. Lessar
Mumtaz Naseem Christopher Henry Bush Jonathan J. Goodfellow Daphne Leung
Charles Cheng Michael J. Butkiewicz Michael Goosay Chad J. Levant
Jia Ming Hu Eoghainn L. Calder Rosalee M. Gordon Weigang Li
Sanjiv Shah Scott S. Calidas Scott M. Gorran Amy Lin
John Clappier Katrien Carbonez Poppy Gozal Gloria W. Lio
Huw R. Pill Sean V. Carroll Genevieve Gregor Chang Lee Liow
Alan P. Konevsky John B. Carron Krag (Buzz) Gregory Matthew Liste
PV Krishna David E. Casner Nick E. Guano Edmund Lo
Suk Yoon Choi Kenneth G. Castelino Nicholas Halaby Justin Lomheim
Shirley J H.J. McLaughlin Sylvio Castro Sanjay A. Harji David A. Mackenzie
Richard J. Quigley Vincent Catherine Corey R. Harris Regis Maignan
Alex Andrew A. von Moll Winston Chan Thomas J. Harrop Sameer R. Maru
Antoine de Guillenchmidt Gary A. Chandler Brian M. Haufrect Miyuki I. Matsumoto
Carl Stern Christopher H. Chattaway Adam T. Hayes Antonino Mattarella
Tunde J. Reddy Jonathan L. Cheatle Robert Hinch Janice M. McFadden
Paul Ockene Simon Cheung Ida Hoghooghi Jack McFerran

John L. McGuire Andre Souza

Aziz McMahon Oliver Stewart-Malir
Jans Meckel Heidi C. Sutton
Ali Meli Christopher W. Taendler
Rodrigo Mello Winnie Tam
Vrinda Menon Trevor Tam
Raluca Mihaila Luke D. Taylor
Milko Milkov Vipul Thakore
Shinsuke Miyaji Michael D. Thompson
Gabriel Mollerberg Artur Tomala
Matthew L. Moore John B. Tousley
Robert Mullane Alfred Traboulsi
Eric S. Neveux Alexandre Traub
Dale Nolan Eddie Tse
Asim H. Nurmohamed Hidetoshi Uriu
Deirdre M. O’Connor Dirk Urmoneit
Satoshi Ohishi Ram Vittal
Simon G. Osborn Michael Voris
Hilary Packer Thomas W. Waite
Daniel M. J. Parker Joseph F. Walkush
Srivathsan Parthasarathy Steve Weddell
Giles R. Pascoe Paul Weitzkorn
Rahul Patkar Andrew M. Whyte
Robert D. Patton Vicky Wickremeratne
Deepan Pavendranathan Ed Wittig
Alejandro E. Perez Jon J. Wondrack
Jan M. Petzel Yvonne Y. Woo
Tushar Poddar XueYing Shel Xu
Jeff Pollard Zhizhun Xu
Nicole Pullen-Ross Takashi Yamada
Steven J. Purdy Xiaohong Lilly Yang
Ali Raissi Wai Yip
Rosanne Reneo Yusuke Yoshizawa
Paul Rhodes Kota Yuzawa
Jill Rosenberg Jones Richard Zhu
Jason T. Rowe Mikhail Zlotnik
Matthew Rubens Liang Zhang
Joshua A. Rubinson Richard Phillips
Owi Ruivivar Jake Siewert
Jennifer A. Ryan
Andrew S. Rymer
Albert Sagiryan
Hiroyoshi Sandaya
John Santonastaso
Nana Sao
Eduardo Sayto
Michael Schmitz
Mike Schmitz
Michael Schramm
Beesham A. Seecharan
Peter Sheridan
Seung Shin
Andrea Skarbek
Spencer Sloan
William Smiley
Taylor Smisson
Gary Smolyanskiy
Nishi Somaiya
Michael R. Sottile Jr

Directors, Advisors and Offices
Advisory Senior Board of Offices

Directors Directors International Advisors
Eric S. Dobkin John C. Whitehead Claudio Aguirre Atlanta

Jonathan L. Cohen H. Frederick Krimendahl II Erik Åsbrink Auckland
Alan A. Shuch George E. Doty Charles de Croisset Bangalore
Robert E. Higgins Donald R. Gant Charles Curran, A.C. Bangkok
Carlos A. Cordeiro James P. Gorter Keki Dadiseth Beijing
Timothy G. Freshwater Robert B. Menschel Guillermo de la Dehesa Boston
Paul S. Efron Robert E. Mnuchin Vladimír Dlouhý Buenos Aires
Patrick J. Ward Thomas B. Walker, Jr. Walter W. Driver, Jr. Calgary
John J. Powers Richard L. Menschel Senator Judd Gregg Chicago
Robert J. Markwick Eugene Mercy, Jr. Lord Griffiths of Fforestfach Dallas
Maykin Ho Stephen B. Kay Professor Victor Halberstadt Doha
Tracy R. Wolstencroft Robert N. Downey Professor Otmar Issing Dubai
Terrence Campbell Roy J. Zuckerberg Ian Macfarlane, A.C. Dublin
Philip M. Darivoff Robert M. Conway Kazimierz Marcinkiewicz Frankfurt
Jean A. De Pourtales David M. Silfen Dr. Axel May Geneva
Martin R. Devenish Eugene V. Fife Tito T. Mboweni George Town
Silverio Foresi Peter G. Sachs Enrico Vitali Hong Kong
Kevin S. Gasvoda Willard J. Overlock, Jr. Houston
Joseph H. Gleberman Mark O. Winkelman Jersey City
Gregg A. Gonsalves John R. Farmer Johannesburg
Rumiko Hasegawa Robert J. Katz Kuala Lumpur
Edith A. Hunt Robin Neustein London
Charles G.R. Manby Robert Hurst Los Angeles
Blake W. Mather Robert S. Kaplan Madrid
Linnea Roberts Edward K. Eisler Melbourne
Guoqing Song Donald R. Mullen Mexico City
David G. Torrible David B. Heller Miami
Susan A. Willetts Milan
Monte Carlo
Peter D. Sutherland KCMG Moscow
Chairman of Goldman Sachs Mumbai
International New York
Paris
Philadelphia
Princeton
Riyadh
Salt Lake City
San Francisco
São Paulo
Seattle
Seoul
Shanghai
Singapore
Stockholm
Sydney
Taipei
Tampa
Tel Aviv
Tokyo
Toronto
Warsaw
Washington, D.C.
West Palm Beach
Zurich

Shareholder Information
Executive Offices 2011 Annual Report on Form 10-K

The Goldman Sachs Group, Inc. Copies of the firm’s 2011 Annual Report on
200 West Street Form 10-K as filed with the U.S. Securities and Exchange
New York, New York 10282 Commission can be accessed via our Web site at
1-212-902-1000 www.goldmansachs.com/shareholders/.
www.goldmansachs.com
Copies can also be obtained by
Common Stock contacting Investor Relations via email at
[email protected]
The common stock of The Goldman Sachs Group, Inc. is
or by calling 1-212-902-0300.
listed on the New York Stock Exchange and trades under
the ticker symbol “GS.”
Transfer Agent and Registrar for Common Stock
Shareholder Inquiries Questions from registered shareholders of The Goldman
Sachs Group, Inc. regarding lost or stolen stock certificates,
Information about the firm, including all quarterly earnings
dividends, changes of address and other issues related to
releases and financial filings with the U.S. Securities and
registered share ownership should be addressed to:
Exchange Commission, can be accessed via our Web site
at www.goldmansachs.com.
Computershare
480 Washington Boulevard
Shareholder inquiries can also be
Jersey City, New Jersey 07310
directed to Investor Relations via email at
U.S. and Canada: 1-800-419-2595
[email protected]
International: 1-201-680-6541
or by calling 1-212-902-0300.
www.computershare.com
Independent Registered Public Accounting Firm

PricewaterhouseCoopers LLP
PricewaterhouseCoopers Center
300 Madison Avenue
New York, New York 10017
The papers used in the printing of this Annual Report are certified by © 2012 The Goldman Sachs Group, Inc. All rights reserved.
the Forest Stewardship Council™ , which promotes environmentally
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appropriate, socially beneficial and economically viable management
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4350-11-102
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What are the core business principles of Goldman Sachs?

What are the core business principles of Goldman Sachs?

What are some of the locations that Goldman Sachs operates in?

What are some of the locations that Goldman Sachs operates in?

Goldman Sachs 2011 Annual Report

We stress creativity and imagination in We regularly receive confidential information

And that’s where we come in.

Across the globe, our job is to

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Since the beginning of 2010, we have repurchased

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Goldman Sachs 2011 Annual Report

In 2010, Prada, one of the world’s most recognizable

Goldman Sachs 2011 Annual Report 11

As lead underwriter, Goldman Sachs

Anatomy client’s IPO, including:

Helping determine the size and composition of the

is a landmark event. An IPO serves Assisting the marketing of the offering to

#1 Globally in IPOs WorldReginfo - 68db5da4-5599-464b-812e-5e82b25d0a53

In 2011, Goldman Source: Thomson Reuters

a majority of offerings Europe

coming from Asia

A Global Network Potential Investors In 2011, Goldman WorldReginfo - 68db5da4-5599-464b-812e-5e82b25d0a53

enabling Prada to raise Europe

breaking IPO. Source: Thomson Reuters

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For Skype, when the future

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Fueled by an expanding middle class and a rapid

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Investment Banking and Capital Markets

Market Making in Equities, Fixed Income,

Investment Management for Institutions

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For governments, now was the time to

Lars Humble strengthen

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Goldman Sachs Team

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For 10,000 Women and 10,000 Small Businesses,

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is raising awareness and increasing education about breast

Reinforcing Goldman Sachs’ long-standing commitment

Goldman Sachs Gives

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The Goldman Sachs Group, Inc. is a leading global investment banking,

Investment Banking Institutional Client Services

We provide a broad range of investment We facilitate client transactions and