Goldman Sachs Presentation at the 2008 Merrill Lynch Banking and Financial Services Investor Conference
1. Cautionary Note
on Forward-Looking Statements
Today’s presentation may include forward-looking statements. These
statements represent the Firm’s belief regarding future events that, by
their nature, are uncertain and outside of the Firm’s control. The Firm’s
actual results and financial condition may differ, possibly materially, from
what is indicated in those forward-looking statements.
For a discussion of some of the risks and factors that could affect the
Firm’s future results, please see the description of “Risk Factors” in our
current annual report on Form 10-K for our fiscal year ended November
2007. You should also read the information on the calculation of non-
GAAP financial measures that is posted on the Investor Relations
portion of our website: www.gs.com.
The statements in the presentation are current only as of its date,
November 11, 2008.
2. Goldman Sachs Presentation to
2008 Merrill Lynch Financial
Services Conference
Lloyd C. Blankfein
Chairman & CEO
November 11, 2008
3. Goldman Sachs
“They still have the Goldman reputation and history, but they will
not be unique anymore.”
Bloomberg News
January, 20 1999
“…something bolder might be needed, such as a merger…”
The Economist
June 20, 1998
“Goldman’s earnings have grown more dependent than most
people think on proprietary trading”
The New York Times
June 6, 1998
2
4. Market Dynamics
August 2007 to Present1
Asset Price Performance Volatility (VIX)
Global Equity Markets Credit Markets
(8)%
(37)% 23
(42)% (41)%
56
(52)%
(88)%
S&P FTSE Hang ABX CMBX LCDX
500 Seng AA AA
Aug-07 Nov-07 Feb-08 May-08 Jul-08 Oct-08
(1) Data through November 7, 2008 3
5. Bank Holding Company
Why now?
Regulation inevitable
Market perception
− Safety of the Fed
− Funding Availability
How will this impact Goldman’s strategy?
No impact on existing strategy
Provides optionality in a dislocated market
− Bank Deposits could lower cost of funding over time
Near-term impact
New Regulator
$130bn - $150bn of assets being moved into the bank
4
10. Risk Management
50 245% 250%
45 43
191%
% of Tangible Common Equity
40
148%
35
150%
30
27
$bn
25 23 82%
22
19 19 19
20 17
15 15 50%
15 13
10
10
5
0 -50%
1
4Q07 1Q08 2Q08 3Q08 Pro-Forma
Lev. Loans Res. RE CRE Total as a % of Tangible
(1) 3Q08 Tangible Common Equity is pro-forma for our recent $20.75bn in capital raises
pro- 9
11. Liquidity and Capital Management
Average Global Core Excess ($bn) Prudent Capital Management1
$102 20.7%
$88
17.1%
$61 $61
$51
$46
$42 15.2%
$38
14.2%
11.6%
10.8%
Nov-03
Nov-04
Nov-05
Nov-06
Nov-07
1Q08
2Q08
3Q08
2Q08 3Q08 Pro-Forma
Tier 1 Ratio Total Capital Ratio
(1) Pro-forma for our recent $20.75bn in capital raises
Pro- 10
12. Franchise Drives Market Share Gains
Investment Banking – Strength of FIG
Franchise1 Equities Commissions ($bn)
($bn)
Advisory Financing
$4.6
$3.7
$3.5
$15bn Acquisition $20bn IPO
$3.0 $3.0
$2.6 $2.7
$2.5
$2.0
$10bn Acquisition $8bn Common and
Pref. Stock Offering
2000 2002 2004 2006 3Q
$8bn Acquisition $3bn Common Offering 2008
YTD
(1) Americas ex-self led/advised 2008YTD transactions as of November 4, 2008
ex- 11
14. International Expansion Strategy
Positioned to Chase GDP Growth
Positioned to Chase GDP Growth
Real GDP Growth by Region (YoY %) Revenue Contribution by Region1
12 GS Research
Estimate
10
Asia
17%
8
6 Americas
EMEA 54%
4 29%
2
0
Q107 Q307 Q108 Q308 Q109 Q309
-2
BRICS World Adv. Economies
(1) Average revenue contribution from 2007 through 3Q08
13
15. Opportunistic Investing
Cumulative Funds Raised Over Time ($bn)
$120
Total Funds Raised in $107
$100 2007 and 2008:
$93
$55bn
$80
$60 $52
$40
$40
$26 $26 $28 $28
$24
$20 $15
$0
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
PIA REPIA
14
17. Returns Over the Cycle
GS Annual ROTE since IPO
40%
38%
32%
29%
25%
27% Average Since
IPO: 26%
20%
18% Target: 20%
16%
15%
1999 2000 2001 2002 2003 2004 2005 2006 2007 08YTD
16
18. ROE is Sustainable
GS ROE vs. Adjusted Leverage – 2Q99 to 3Q08
Leverage is not a major driver of our ROE
22
R2 = 0.38
20
GS Adj. Leverage (x)
18
16
14
12
10
0 5 10 15 20 25 30 35 40
ROE (%)
17
19. Long Term Growth
Growing Book Value Per Share in a Dislocated Environment
$99.30
%
R 19 $90.43
CA G
$72.62
$57.02
$50.77
$43.60
$36.33 $38.69
$32.18
$20.94
1999 2000 2001 2002 2003 2004 2005 2006 2007 3Q08
18
20. Goldman Sachs Presentation to
2008 Merrill Lynch Financial
Services Conference
Lloyd C. Blankfein
Chairman & CEO
November 11, 2008