FOCUS Report Goldman Sachs & Co. Llc

X-17A-5 [Paper] - FOCUS Report

Published: 2010-03-12 07:33:28
Submitted: 2010-03-01
Period Ending In: 2009-12-31
scanned.pdf Scanned paper document


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                                             ECURIT                                       10035858
                                                                                                                                                                        Expires

                                                                                                                                                                        Estimated            average      burden

                                                                 ANNUAL AUDITED REPORT                                                                                  hours       ocr      resoonso              1200
                                                                      FORM X17A5
                                                                         PART ID
                                                                                                                                                                                              LE                NUMBER



                      Information                                      Brokers
                                                                                   FACNG PAGE
                                                                                        and       Dealers               Pursuant                   Section        17          the
                                                                                                                                                                                              129
                                           Required              of                                                                          to                         of

                                     Securities          Exchange               Act     of    1934       and           Rule            7a5        Thereunder


REPORT FOR THE PERIOD                            BEGINNING                                               11/29/2008                               AND ENDING                          12/31/2009
                                                                                                         MM/DDIYY                                                                     MM/DD/YY


                                                                      REGSTRANT DENTWICATON

NAME OF BROKERDEALER

                 Goldman Sachs                    Co                                                                                                                                         OFFICIAL USE ONLY

                                                                                                                                                                                                     351 08880

ADDRESS           OF PRNCIPAL PLACE OF BUSINESS                                                        Do     not        use        RO        Box     No                                          FIRM     ID   NO

adtreet                                                                            No     and     Street


                 New     York                                                      NewYork                                                                      10004
                 Chy                                                               State                                                                        Zip   Code


NAME AND TELEPHONE                         NUMBER                OF PERSON TO CONTACT                                                  IN    REGARD              TO THIS REPORT

                 Raloh       Silva                                                                                                     212          357871O
                                                                                                                                       Area        Code     Telephone         No


                                                                      ACCOUNTANT                        DENTIFCATON

INDEPENDENT PUBLIC ACCOUNTANT                                                 whose          opinion         is    contained                 in this       Report


waterhouseCooersLLP

son                                                      Name                                                                             namo
                                                                        if   Individual       state    last      first        middle




                                        Aven     ue                                    ew York                                              ew York
                 Address                                                           City                                                State                S1CUH                r4i OMMON
CHECK ONE                                                                                                                                                                                      MI
                       Certified       Public     Accountant


                 LI    Public        Accountant

                       Accountant          not resident                 in    Unted          States         or    any          of   its                     ons
                                                                                                                                            ossesto2                             XAL



FFIIAL                                                                                                   USE ON LV




Claims    for
                exemption     from   the requirement           that     the   annual     report        be covered by                the opinion       of   an   independent         public   accountant

must be   supported     by     statement    of   facts    and         circumstances           relied    on as          the     basis   for   the   exempfion           See    secti



                                                          Persons            who   to   respond         to    the       collection           of   Information         contained

                                                          In   this     form     are    not    required           to    respond             unless    the   form      displays

                                                               currently        valid    0MB       control         number

SEC 1410         700


OATH OR AFFIRMATION



February          26     2010




State   of     New       York

                                      ss
County       of   New         York




We      the       undersigned                 Managing           Directors     of   Goldman            Sachs              Co    affirm    that     to    the    best       of   our


                       and                   the     accompanying           consolidated           financial     statements and           supplemental schedules
knowledge                      belief
                                                    Co as of December 31 2009                                                          are true and correct  We
pertaining         to        Goldman Sachs
                             the   firm     of

                                                                         nor any Executive    Officer defined for
further affirm that   as of December 31 2009 neither the partnership
                             members   of  the  Board   of Directors members  of the Management Committee
purposes    of this  oath as
executive   officers   and Chief Accounting    Officer of The Goldman Sachs   Group Inc the sole member of
The Goldman Sachs            Co L.L.C which is the general partner      of  Goldman     Sachs       Co had any
                                                                                        as that       of       customer      except    as follows
                                           any account
                       interest       in                       classified     solely
proprietary


                                            from        and                   to    customers              and       counterparties       includes
               Receivables                                    payables
                                           and                                                receivable              from    and     payable       to
               $3311751                              $34415885          respectively

                                                                             the    account        balances          of   certain   affiliates     are
               Executive              Officers           Additionally
                                                                                          and                                  or     payables      to
               included             in     receivables           from   customers                     counterparties
                                                                                              financial presentation
               customers and                  counterparties         for    purposes     of



                                                                                                                                                               consolidated
 In   addition        pursuant to                New      York    Stock      Exchange         Rule     418 we affirm that the                attached

                                                                                                     December 31 2009 have                       been    or    will   be    made
 financial        statements and                supplemental schedules as                     of


                        Executive           Officers of The Goldman Sachs                     Group            Inc
 available        to




Mavid             Viniar

 Managing          Director




 Sarah       Smith

 Managing              Director




 Subscribed and                    sworn before           me

        26th       day of February 2010




                  JCAE             OLSEN
      Notary      Pubic       State  of New      York
                  No    010L6159610
                        ri
                                            County
        Tr         irJn.222O1j


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                                                                                                                                        SectoSSifl9

                                                                                                                             t4RViiu
                                                                          LEUER OF                    ATTESTATI



                                                                                                                                                                 February    26   2010




                                                                                                           and belief the accompanying      Financial
   the      undersigned              hereby       certify        that    to the       best       of   my    knowledge
Report         for    the    month/quarter/year                  circle       as appropriate  ending December 31 2009 submitted pursuant to
                                                                                                                               material           the
                                                             Board            of Trade presents fairly and
                                        the                                                                  accurately in all          respects
the    requirements             of              Chicago
financial       condition          of




                                                            Goldman             Sachs                Co                  Name      of   Firm




                                                                                                                                    been        made      available     to         each
  further        certify      that         copy     of   the      accompanying                   Financial       Report has
member           of    the                      Board       of    Trade whose                   membership          is
                                                                                                                          registered      for    the    firm          each   individual
                Chicago
designated by the firm in accordance                                    with    CBOT            Regulation        230.03a          and            each     general     partner    in    the

case     of the partnership




                                                                                                                                        Signature




                                                   David            Viniar      Managing              Director             Type Name and               Title




NOTE                          This       Letter    of Attestation             must be           signed      by the Chief       Financial        Officer     or the    person who
                              has these responsibilities                        If     partnership              the signatory      must also

                              be         general     partner




The      firm submitting                this    Form and          its   attachments and                   the   person whose signature            appears  above represent

          to    the     best    of      their                                  information            contained          therein   is    true correct  and complete       is           It
that                                              knowledge             all


 understood that               all      required     items statements                      and        schedules are          integral     parts    of     this   Form and      that         the

submission             of    any amendment                represents            that    all     unamended items statements and                            schedules remain true

correct        and     complete           as previously             submitted              It   is   understood that any intentional misstatements or
                                                                                                     further

 omissions of facts                  constitute           felony        under        the    Commodity Exchange  Act Sec     U.S.C     13 as well as
violation        of    Exchange           Rules and         Regulations


                                                       3c

                                                        i4i




GOLDMAN SACHS             CO    AND   SUBSIDIARIES


Consolidated      Statement of Financial   Condition

               As of December  31 2009


JCLWATERHOUSECWPERS

                                                                                                                                                               PricewaterhouseCoopers                         LLP
                                                                                                                                                               PricewaterhouseCoopers                        Center

                                                                                                                                                               300     Madison         Avenue

                                                                                                                                                               New      York     NY 10017
                                                                                                                                                               Telephone          646           471   3000

                                                                                                                                                               Facsimile         813         286      6000




                                                                                                           Auditors
                                                               Report of Independent


 To the Partners           of


 Goldman Sachs                     Co

      our opinion        the                                  consolidated           statement        of    financial     condition           presents         fairly     in   all
 In                             accompanying
 material    respects           the       financial     position       of   Goldman Sachs                     Co    and       its    subsidiaries           the    Firm          at

                                                                                                                                                     the United          States of
 December         31 2009            in    conformity         with accounting           principles          generally         accepted         in



 America      This       financial          statement          is   the   responsibility       of the       Firms management our                            responsibility            is   to



 express     an     opinion on this financial    statement    based on our audit                                        We     conducted             our audit         of this


 statement        in accordance    with auditing    standards   generally accepted                                       in    the United           States        of   America

                                                  and                  the                  obtain        reasonable          assurance             about     whether the
 which     require      that    we        plan          perform              audit     to


                  of   financial          condition           free    of material       misstatement               An audit includes examining on                                     test
 statement                                              is



 basis     evidence        supporting             the   amounts           and disclosures            in    the statement             of   financial     condition

                  the accounting                 principles         used and     significant     estimates              made         by   management and
 assessing

 evaluating       the    overall          statement      of    financial      condition       presentation              We          believe    that    our     audit     of    the

 statement        of   financial          condition     provides             reasonable        basis        for   our opinion




                                                                                              UP
 February     26 2010


                                                  GOLDMAN                       SACHS                     CO          and SUBSIDIARIES

                                    CONSOLIDATED                            STATEMENT                           OF FINANCIAL                        CONDITION

                                                                           As of December                              31 2009
                                                                                             in millions




Assets

Cash     and      cash       equivalents                                                                                                                          3273

Cash and          securities            segregated            for regulatory                      and         other      purposes

   includes              $9739      at   fair    value                                                                                                           11459

Collateralized             agreements
    Securities            borrowed          includes            $79137                  at   fair    value                                                      212491

    Financial            instruments            purchased              under            agreements                     to     resell    at    fair   value       70499

Receivables              from brokers             dealers and                   clearing            organizations                                                 8193
Receivables              from customers                 and     counterparties                       includes                 $440      at   fair    value       20203


Financial        instruments             owned          at    fair    value                                                                                     113104

Financial        instruments             owned          and     pledged                 as    collateral               at     fair   value                       19639

   Total      financial           instruments           owned              at    fair    value                                                                  132743


Other      assets                                                                                                                                                 4894
    Total      assets                                                                                                                                           463755



Liabilities        and       partners            capital

Unsecured             short-term          borrowings                 including               the    current            portion         of    unsecured

    long-term             borrowings            includes         $3        at    fair        value                                                               15276

Collateralized            financings

    Securities            loaned        includes         $23810                 at   fair         value                                                          66682

    Financial            instruments            sold    under         agreements                         to   repurchase                at   fair    value      117516

    Other       secured           financings           includes             $853             at   fair        value                                              52197

Payables         to      brokers        dealers and             clearing             organizations                                                               14429

Payables         to   customers             and    counterparties                                                                                               121559

Financial       instruments              sold     but     not        yet    purchased                     at    fair     value                                   40201

Other      liabilities       and    accrued            expenses                 includes             $17        at     fair    value                              9972

Unsecured             long-term borrowings                     includes                  $221        at       fair     value                                        474

    Total      liabilities                                                                                                                                      438306



Commitments                  contingencies                   and       guarantees



Subordinated              borrowings                                                                                                                             18250


Partners          capital

Partners        capital                                                                                                                                           7111

Accumulated               other                                      income                                                                                          88
                                    comprehensive

    Total      partners           capital                                                                                                                         7199

    Total     liabilities         and    partners            capital                                                                                            463755



                                                  The accompanying                                notes         are an          integral       part    of

                                                this    consolidated                     statement                   of financial           condition


                                                                      GOLDMAN SACHS                                  CO        and        SUBSIDIARIES

                                        NOTES              TO CONSOLIDATED                                STATEMENT                    OF FINANCIAL                       CONDITION




Note            Description               of    Business


Goldman             Sachs                 Co             GSCo                          limited      partnership               registered                as        U.S          broker-dealer                  and            futures


commission            merchant together with its consolidated subsidiaries    collectively   the firm is an indirectly    wholly

owned          subsidiary  of The  Goldman     Sachs   Group Inc Group Inc            Delaware   corporation  and      financial


holding         company    The firm is   leading   investment banking   securities   and investment     management    firm that

                        wide                          of     financial              services        to            substantial               and         diversified            client       base            that         includes
provides                              range

corporations               financial       institutions                     governments             and         high-net-worth               individuals




       The firms            activities          are        divided           as follows



                Investment                                         The        firm     provides             broad                      of     investment               banking             services          to           diverse
                                          Banking                                                                          range
                            of   corporations                    financial           institutions          investment            funds            governments                  and        individuals
                group


                Trading           and      Principal                  Investments                  The      firm       facilitates          client       transactions                with            diverse            group       of


                corporations                   financial               institutions              investment                funds          governments                    and         individuals               and            takes

                                                                                   market                         in    trading        of     and        investing           in   fixed        income             and        equity
                proprietary             positions            through                             making

                products              currencies              and            derivatives           on     these        products              In        addition        the        firm      engages               in     market-

                making           activities          on     equities             and     options        exchanges                and        the    firm       clears      client          transactions                  on    major

                stock        options                and      futures             exchanges              worldwide               In     connection                 with       the      firms           other             investing

                activities         the    firm           makes             principal     investments



                Asset        Management                       and            Securities            Services             The      firm        provides             investment                and       wealth             advisory

                services           and         offers            investment                                                          through             separately               managed              accounts                 and
                                                                                           products             primarily

                commingled                vehicles                 such        as      mutual       funds         and        private         investment              funds across                     all    major            asset

                classes          to       diverse             group            of    institutions          and       individuals             worldwide             and         provides              prime         brokerage

                services           financing               services              and     securities             lending        services            to     institutional            clients           including               hedge

                funds       mutual         funds            pension              funds       and    foundations                and     to    high-net-worth                  individuals             worldwide



Note            Significant             Accounting                      Policies



Basis      of Presentation


This consolidated                     statement              of       financial         condition         includes            the accounts                   of   GSCo               and       all    other        entities         in



which      the     firm     has                                       financial          interest         All     material        intercompany                    transactions               and       balances                have
                                          controlling

been      eliminated



The      firm    determines               whether                it   has                               financial          interest         in    an     entity     by     first     evaluating              whether             the
                                                                                    controlling

entity    is       voting         interest            entity                variable       interest        entity       VIE          or          qualifying         special-purpose                     entity           QSPE
under      generally         accepted                accounting                  principles        GAAP

                             Interest               Entities                Voting      interest        entities        are    entities           in    which            the      total
                                                                                                                                                                                            equity          investment              at
               Voting
               risk   is    sufficient              to     enable            the    entity    to    finance          its     activities          independently                 and        ii   the     equity             holders

               have        the        obligation            to        absorb         losses         the     right       to     receive            residual         returns           and       the     right            to    make
               decisions about                      the    entitys           activities        The usual             condition            for          controlling         financial           interest            in
                                                                                                                                                                                                                             voting

               interest                        is    ownership                 of        majority         voting           interest          Accordingly                 the      firm      consolidates                     voting
                                 entity

               interest      entities           in    which           it   has       majority       voting         interest


                                                             GOLDMAN                         SACHS                       CO         and SUBSIDIARIES

            NOTES                    TO CONSOLIDATED                                    STATEMENT                             OF FINANCIAL                             CONDITION                        Continued




Variable               Interest               Entities                  VIEs          are     entities             that        lack           one     or    more             of     the     characteristics                      of         voting

 interest         entity                     controlling                 financial            interest              in          VIE           is
                                                                                                                                                    present            when          an      enterprise                 has            variable

interest             or          combination                   of      variable             interests               that       will       absorb              majority               of the            VIEs expected                       losses
receive                   majority               of    the    VIEs              expected                 residual              returns               or    both              The      enterprise                   with          controlling

financial             interest                known               as      the         primary               beneficiary                       consolidates                    the     VIE               The          firm     determines

whether              it    is        the     primary           beneficiary                   of             VIE      by        first      performing                          qualitative               analysis            of     the      VIEs
expected                  losses            and         expected                 residual              returns                 This           analysis                includes                    review           of     among              other

factors           the           VIEs             capital           structure                contractual             terms which interests                                             create             or     absorb            variability

related         party            relationships                    and      the design                    of    the VIE  Where qualitative                                           analysis             is    not      conclusive             the

firm        performs                         quantitative                  analysis                      For       purposes                    of    allocating                       VIEs              expected              losses          and

expected                  residual               returns           to      its    variable                interest             holders               the      firm           utilizes            the        top       down            method
Under          this        method                 the        firm       calculates                 its      share         of       the        VIEs         expected                 losses and                  expected               residual

returns         using                the    specific          cash          flows           that       would             be    allocated              to     it       based          on     contractual                   arrangements
and/or         the             firms          position              in     the        capital               structure                of       the     VIE              under         various                probability-weighted

scenarios                  The         firm       reassesses                    its   initial       evaluation                  of     an      entity       as           VIE and                 its    initial      determination               of

whether              the        firm              the                                                         of          VIE                        the     occurrence                     of     certain            reconsideration
                                            is               primary             beneficiary                                          upon
events            See                      Recent            Accounting                     Developments                            below            for    information                    regarding                 amendments                   to

accounting                 for        VIEs


QSPEs                  QSPEs                 are passive                   entities               that        are    commonly used                               in     mortgage                  and         other       securitization

transactions                     To be considered                                  QSPE                an      entity          must            satisfy       certain              criteria              These           criteria       include

the       types           of     assets                  QSPE              may         hold            limits         on       asset               sales          the        use      of         derivatives              and         financial

guarantees                      and        the        level       of      discretion                     servicer              may            exercise            in     attempting                    to     collect       receivables
These          criteria
                                     may         require           management                       to      make          judgments                   about             complex              matters               such       as whether
       derivative               is    considered                   passive            and          the        level       of       discretion                    servicer             may exercise                        including             for

example                determining                     when            default         is
                                                                                              reasonably                   foreseeable                      The         firm        does          not       consolidate               QSPEs
See                       Recent                 Accounting                     Developments                             below                for     information                     regarding                    amendments                    to

accounting                 for        QSPEs


Equity-Method                              Investments                      When             the       firm        does         not       have              controlling               financial               interest        in      an    entity

but      exerts           significant                 influence             over        the         entitys           operating                    and      financial               policies            generally             defined as

owning                 voting              interest          of     20%          to     50%              and        has         an        investment                    in    common                   stock         or   in-substance

common               stock             the       firm     accounts                for       its    investment                  either              under     the         equity           method              of     accounting              or at

fair     value            pursuant                to    the        fair     value            option            available                  under            Financial                Accounting                    Standards                Board

FASB              Accounting                          Standards                  Codification                      ASC                 825-10                     In         general              the         firm        accounts              for

investments                     acquired                subsequent                      to         November                    24 2006                      when              the         fair      value            option           became
available                 at    fair       value             In     certain            cases                the     firm           applies           the      equity              method               of     accounting               to     new
investments                     that       are        strategic            in     nature               or     closely              related           to    the         firms         principal                business             activities

where        the          firm        has             significant               degree            of     involvement                     in    the    cash             flows        or    operations                 of the        investee

or     where         cost-benefit                     considerations                    are        less        significant



Other           If        the        firm    does            not       consolidate                  an        entity          or    apply the               equity             method              of       accounting                the     firm

accounts             for        its    investment                 at     fair    value


                                                                    GOLDMAN SACHS                                            CO          and SUBSIDIARIES

                           NOTES               TO CONSOLIDATED                                STATEMENT                           OF FINANCIAL                         CONDITION                   Continued




In     connection              with      becoming                 bank        company
                                                                                holding  Group Inc was required   to change    its fiscal year-end


from      November                  to    December                  In   2009
                                                                           April  the Board of Directors of Group Inc    approved         change   in


Group         Inc.s        fiscal         year-end           from the last Friday   of December   to December   31 As       result    the  firm also


changed            to      calendar              year-end


Unless        specifically               stated        otherwise               all    references                   to    2009       refer     to   the        firms         fiscal        period          ended         or    the         date

as the context requires                              December            31 2009

Use of Estimates


This consolidated                        statement           of    financial               condition              has       been         prepared           in    accordance                     with     generally           accepted

accounting               principles             that     require           management                            to     make         certain        estimates                     and     assumptions                      The            most

important           of     these            estimates             and          assumptions                       relate       to     fair     value         measurements                           and      the        provision            for

                   losses        that                  arise      from                             and                                   proceedings                 and     tax        audits           Although          these           and
potential                                     may                              litigation                        regulatory

other        estimates                and       assumptions                    are      based               on        the    best         available              information                actual          results           could         be

materially          different            from these            estimates



Financial           Instruments                       Substantially                  all    financial             instruments                owned          and        financial           instruments                 sold      but        not


yet     purchased               are      reflected        in      the    consolidated                        statement              of    financial         condition               at    fair     value      on          trade date

basis


Other        Financial                Assets           and        Financial                Liabilities                at     Fair    Value             In     addition              to    total         financial       instruments

owned         at    fair       value      and        financial          instruments                    sold        but      not    yet      purchased                at    fair    value          the     firm     has       elected         to

account        for certain               of    its   other     financial             assets and                   financial          liabilities       at     fair     value        under          ASC       815-15           and         825-

10     i.e    the       fair    value         option


Such      financial            assets and              financial         liabilities          accounted                    for at    fair    value       include



                                          unsecured                                        and                                                                                                     of
                        certain                                short-term                              long-term             borrowings               primarily            consisting                     promissory notes
                        certain          other secured                  financings                 primarily               transfers         accounted               for     as     financings             rather       than         sales

                         resale          and     repurchase              agreements
                        securities             borrowed            consisting                of    the firms matched                         book        and         certain        firm financing                 activities             and

                        certain          receivables from customers                                         and                                                                                   of     certain
                                                                                                                      counterparties               primarily              consisting                                   margin
                        loans



Fair     Value          Measurements                         The        fair     value            of         financial            instrument           is     the      amount             that      would         be     received            to

sell    an     asset           or     paid       to    transfer                  liability             in    an       orderly        transaction                 between                 market           participants               at    the

measurement                    date       i.e the         exit      price              Financial                 assets are              marked          to      bid      prices          and      financial           liabilities         are

marked        to offer          prices            Fair   value          measurements                          do      not    include         transaction               costs


                                                                         GOLDMAN                         SACHS                     CO      and         SUBSIDIARIES

                              NOTES             TO CONSOLIDATED                                   STATEMENT                             OF FINANCIAL                    CONDITION                      Continued




The      fair     value         hierarchy               under            ASC 820              prioritizes                  the        inputs      to     valuation            techniques                  used        to     measure                  fair



value        The                                               the        highest          priority              to    unadjusted                 quoted           prices        in       active          markets              for      identical
                         hierarchy               gives

assets           or      liabilities                                     measurements                            and         the          lowest         priority        to      unobservable                         inputs            level
                                                level

measurements                          The       three        levels         of    the     fair      value          hierarchy              are described                 below


                                                                                    Basis           of Fair            Value           Measurement


                              Level                               Unadjusted               quoted                prices          in    active      markets            that     are accessible                     at the

                                                                  measurement                     date           for identical                 unrestricted            assets         or     liabilities




                              Level                               Quoted           prices           in    markets             that        are     not    considered             to    be     active          or

                                                                  financial         instruments                       for   which         all    significant           inputs        are observable

                                                                  either         directly        or indirectly




                              Level                               Prices         or valuations                   that        require           inputs       that      are both         significant               to    the

                                                                  fair    value         measurement                         and        unobservable



                                                                                                                                                  based          on    the     lowest            level       of                             that        is
     financial           instruments                   level       within         the     fair      value             hierarchy             is                                                                        any      input

significant             to the      fair       value        measurement


The      firm      defines              active         markets              for                     instruments                       based        on     the                         daily          trading          volume               both         in
                                                                                   equity                                                                          average
absolute terms and                          relative         to the         market            capitalization                     for the         instrument    The firm defines  active markets    for


debt     instruments based                         on       both         the     average            daily         trading             volume          and the number of days with trading activity



Credit          risk     is    an     essential              component                   of      fair      value             Cash          products             e.g           bonds         and           loans         and          derivative


instruments                                            those         with        significant              future            projected            cash       flows        trade        in    the       market           at         levels        which
                          particularly

reflect      credit           considerations                      The       firm        calculates                the       fair      value      of     derivative           assets by               discounting                   future        cash

flows       at          rate      which                                          counterparty                     credit           spreads            and      the     fair     value           of    derivative                  liabilities          by
                                                 incorporates
discounting              future          cash          flows       at          rate      which            incorporates                    the     firms        own      credit        spreads                    In
                                                                                                                                                                                                                      doing           so        credit


                        are adjusted                   to   reflect         mitigants               namely                 collateral           agreements              which          reduce               exposures                 based           on
exposures
                 and          contractual                                 requirements                      The            firm       manages            its    exposure             to    credit           risk      as     it    does         other
triggers                                               posting

market           risks        and       will     price         economically                    hedge               facilitate             and      intermediate                trades which                      involve            credit           risk

                                                                                                                                                       cost                            concentrated                        risk       positions
The      firm         records            liquidity          valuation              adjustments                        to    reflect         the                  of    exiting

including          exposure                to   the     firms        own         credit       spreads


                                            value           the      firm                                  total           financial            instruments             owned              at      fair      value          and         financial
In   determining                 fair                                            separates
instruments               sold           but     not               purchased                   at        fair     value            into    two        categories              cash         instruments                  and          derivative
                                                            yet

contracts



                 Cash          Instruments                        The firms cash                        instruments are                        generally         classified           within          level            or level                 of    the

                 fair    value                               because              they are valued                           using quoted                 market         prices            broker            or   dealer quotations
                                        hierarchy

                 or alternative                                   sources          with          reasonable                   levels        of    price        transparency                     The types               of        instruments
                                                pricing

                 valued          based           on     quoted            market          prices            in    active              markets          include         most      government                      obligations                active

                 listed        equities          and         certain           money           market              securities                  Such       instruments             are        generally                classified                within


                 level           of     the     fair    value            hierarchy                Instruments                      classified           within        level       of       the       fair    value          hierarchy                are

                                    to     be    carried           at    quoted          market                 prices           even      in    situations           where          the     firm         holds            large         position
                 required

                 and           sale      could         reasonably                 impact          the       quoted            price


                                                         GOLDMAN                          SACHS                     CO          and      SUBSIDIARIES

          NOTES TO CONSOLIDATED                                                      STATEMENT                           OF FINANCIAL                              CONDITION                    Continued




The types              of        instruments                  that       trade            in    markets             that        are        not        considered                  to      be    active        but     are valued

                                                                                                               dealer                                              or   alternative                                sources           with
based        on        quoted                market              prices              broker             or                       quotations                                                        pricing

reasonable                  levels         of                    transparency                       include          most           government                      agency             securities             most       corporate
                                                 price

bonds         certain                  mortgage                  products                  certain             bank            loans          less            liquid           listed          equities           certain         state

municipal              and         provincial                obligations                       and      certain            money              market                securities                  Such        instruments               are

generally         classified                 within          level            of     the       fair     value        hierarchy


                                                                                                  within           level            of     the                    value                               because                     trade
Certain       cash               instruments                  are      classified                                                                     fair                     hierarchy                               they

infrequently                and        therefore              have         little     or       no      price       transparency                        Such             instruments                include        private      equity

investments                  and         real         estate          fund           investments                     less        liquid          corporate                   debt         securities          and     other debt

                                                   less                                                 bonds            distressed                   debt         instruments                 and      collateralized              debt
obligations             including                             liquid          corporate

obligations             CDO5                   backed             by corporate                      obligations                     less    liquid            mortgage                 whole         loans and           securities


                                         commercial                             residential                  real    estate                The         transaction                              is                  used       as     the
backed         by           either                                      or                                                                                                           price            initially


best estimate                     of    fair     value             Accordingly                        when               pricing           model              is    used        to     value         such     an     instrument

                                                                                                                                                               the      transaction                               This   valuation
the    model           is    adjusted so                    that      the model                   value        at inception                 equals                                                   price

is    adjusted              only        when           changes                 to     inputs            and         assumptions                       are          corroborated                    by evidence              such       as

transactions                 in        similar         instruments                     completed                    or     pending               third-party                  transactions               in   the      underlying

investment                  or     comparable                         entities                 subsequent                  rounds             of        financing                    recapitalizations                 and        other

transactions                 across             the                        structure                                       in    the       equity            or    debt        capital          markets            and      changes
                                                        capital                                       offerings

in    financial        ratios           or     cash         flows



For     positions                that    are       not      traded            in     active           markets            or     are      subject              to transfer                 restrictions            valuations          are

                  to         reflect                                  and/or              non-transferability                              Such              adjustments                     are     generally           based         on
adjusted                                        illiquidity

                  market                 evidence                where               available                In    the         absence                of     such           evidence                managements                     best
available

estimate          is    used


Derivative                  Contracts                       Derivative                 contracts                   can      be        exchange-traded                                or    over-the-counter                   OTC
Exchange-traded                          derivatives                  typically            fall       within       level             or level                 of    the       fair     value         hierarchy        depending

on     whether                                  deemed                to     be                         traded            or     not        The          firm generally                      values       exchange-traded
                        they are                                                     actively

                                                                                                                                                      levels            and       eliminate                           differences
derivatives             using models                          which           calibrate                to     market-clearing                                                                           timing

between           the                                            of    the                                                     derivatives                   and        their        underlying             instruments                 In
                                 closing          price                             exchange-traded
such                                                                   derivatives                    are    classified              within           level             of the        fair     value     hierarchy
          cases             exchange-traded


OTC       derivatives                   are valued                using market                        transactions                  and       other           market            evidence              whenever possible
                  market-based                                           to    models                  model         calibration                 to     market               clearing          transactions              broker         or
including                                                inputs

dealer quotations                        or      alternative                                    sources             with         reasonable                    levels          of     price        transparency               Where
                                                                              pricing

models        are           used           the        selection               of          particular               model            to   value           an         OTC         derivative             depends upon                   the

contractual             terms of                  and        specific               risks       inherent            in     the        instrument as                       well       as      the     availability        of    pricing

information                 in     the         market                 The           firm        generally                uses          similar           models                to      value         similar        instruments

Valuation          models                require                 variety             of    inputs            including              contractual                    terms market                      prices        yield      curves

                                                                                                                   and                                                                     rates       loss                         rates
credit      curves                measures                  of    volatility              voluntary                            involuntary                   prepayment                                           severity

and      correlations                   of     such         inputs                  For        OTC          derivatives                that       trade            in
                                                                                                                                                                         liquid           markets           such      as      generic

                                        and                              model                               can                              be        verified              and         model        selection          does        not
forwards           swaps                           options                                 inputs                     generally

involve       significant             management                              judgment                       OTC          derivatives                  are         classified                within     level          of     the     fair



value                              when all of the                                                                  can        be    corroborated                       to    market           evidence
          hierarchy                                                     significant                   inputs



                                                                                                                                                                                                   information              and       the
Certain       OTC                 derivatives                    trade          in        less         liquid        markets                with             limited           pricing

determination                     of     fair      value           for       these             derivatives                is
                                                                                                                                 inherently                  more            difficuft          Such        instruments               are

classified        within               level           of   the                value                                     Where             the        firm         does       not      have        corroborating              market
                                                                      fair                      hierarchy


                                                                     GOLDMAN                      SACHS                         CO          and SUBSIDIARIES

                       NOTES TO CONSOLIDATED                                                   STATEMENT                              OF FINANCIAL                           CONDITION                        Continued




             evidence              to                      significant              model             inputs           and            cannot             verify       the        model        to       market            transactions                  the
                                         support
             transaction                price      is     initially        used          as    the        best estimate                         of   fair      value             Accordingly                  when             pricing           model

             is     used     to     value        such         an        instrument               the       model            is       adjusted so                   that     the model                  value        at   inception              equals

             the     transaction                price            The       valuations                of    these           less            liquid        OTC         derivatives              are       typically             based         on        level

                    and/or         level          inputs            that      can        be      observed                  in        the        market as                  well     as      unobservable                      level             inputs

             Subsequent                  to     initial       recognition                 the     firm          updates                the        level            and           level        inputs           to    reflect         observable

             market          changes with  resulting gains and                                                       losses                reflected            within            level                Level              inputs           are        only

                               when corroborated by evidence                                                         such             as         similar         market             transactions                     third-party                pricing
             changed
             services          and/or            broker            or     dealer          quotations                  or        other           empirical             market             data           In    circumstances                      where

                     firm                                        the      model           value           to    market                transactions                                                     that          different         valuation
             the              cannot             verify                                                                                                               it    is    possible

             model          could        produce                   materially             different             estimate                   of    fair    value



             When                                         valuations            are adjusted                         for various                  factors            such         as     liquidity            bid/offer         spreads               and
                            appropriate
             credit        considerations                           Such        adjustments                      are       generally                    based          on        available             market            evidence                In    the

             absence           of       such      evidence                   managements                         best estimate                          is   used


Collateralized                          and Financings                                                     Collateralized                         agreements                     consist          of    resale           agreements                    and
                         Agreements
securities          borrowed  Collateralized financings                                               consist              of        repurchase                 agreements                    securities                 loaned        and        other

                                                                                                           and                                       are                               on                                                         basis
secured       financings                  Collateralized                     agreements                               financings                               presented                           net-by-counterparty

when      right of          setoff        exists



             Resale          and         Repurchase                       Agreements                           Financial               instruments                    purchased                  under         agreements                   to    resell

             and      financial              instruments                sold        under         agreements                          to    repurchase                      principally             U.S         government                      federal

                             and                                                                                                                 represent                 collateralized                financing              transactions
             agency                      investment-grade                           sovereign                   obligations

             The       firm        receives              financial            instruments                      purchased                        under          agreements                   to     resell            makes            delivery           of

             financial             instruments                   sold        under            agreements                        to     repurchase                      monitors              the        market            value            of     these

             securities            on                      basis          and       delivers           or      obtains               additional                collateral           as appropriate                       As noted               above
                                                daily

                                                                                                           carried                    the        consolidated                    statement              of     financial         condition                at
             resale         and         repurchase                 agreements                   are                             in


             fair    value         under         the      fair      value       option               Resale            and            repurchase                   agreements                    are    generally              valued            based

             on                               reasonable                  levels         of    price       transparency                          and         are     classified             within           level        of the       fair       value
                     inputswith

             hierarchy


             Securities                 Borrowed                   and        Loaned                 Securities                  borrowed                    and      loaned             are      generally              collateralized                 by

             cash          securities            or letters             of    credit           The        firm       receives                   securities           borrowed                makes             delivery          of    securities

                                                                                                     of        securities                   borrowed                 and          loaned               and      delivers              or        obtains
             loaned           monitors                  the        market           value
             additional            collateral             as appropriate                       Securities               borrowed                     and       loaned            relating         to    both         customer              activities


             and       to          lesser         extent             certain             firm    financing                 activities                    are    recorded                 based          on      the       amount            of        cash

             collateral            advanced                   or    received                           accrued                  interest                     As these              arrangements                       generally             can         be
                                                                                          plus

             terminated                 on      demand                 they     exhibit           little         if    any            sensitivity               to     changes               in     interest             rates         As noted

             above           securities            borrowed                   and        loaned           within           trading               and         principal            investments                   which          are     related            to

             the firms matched                            book          and     certain          firm          financing                   activities            are recorded                     at    fair    value          under            the    fair


             value         option               These              securities             borrowed                   and         loaned                 transactions                are       generally               valued           based            on

                            with        reasonable                  levels      of                                                          and          are    classified               within         level            of    the     fair       value
             inputs                                                                      price        transparency

             hierarchy



             Other          Secured                                                       addition              to     repurchase                        agreements                    and        securities             loaned             the       firm
                                                  Financings                        In


             funds          assets              through             the       use         of     other           secured                    financing                 arrangements                       and          pledges              financial

             instruments                and      other assets as                         collateral             in    these            transactions                        As noted           above             the      firm     has           elected

                                                                                                               accounted                    for                                      rather            than     sales          for     which           the
          to        apply the            fair    value           option        to    transfers                                                       as      funancings


                                                                             GOLDMAN                       SACHS                  CO         and SUBSIDIARIES

                             NOTES TO CONSOLIDATED                                                    STATEMENT                         OF FINANCIAL                             CONDITION                    Continued




                 use     of      fair       value            eliminates                  non-economic                    volatility
                                                                                                                                            in
                                                                                                                                                   earnings                 that       would       arise         from             using             different

                 measurement                          attributes                   These         other           secured           financing              transactions                     are     generally                 classified                within

                 level              of    the      fair       value                                       Other      secured             financings                   that        are      not     recorded                 at     fair        value           are
                                                                              hierarchy
                 recorded                 based             on        the         amount             of    cash          received                plus     accrued                     interest          See           Note                  for       further

                 information                    regarding              other        secured               financings



Hybrid            Financial                 Instruments                                 Hybrid        financial            instruments                    are          instruments                  that        contain                 bifurcatable

                                                                 do                                  settlement                                                                                                       assets                        the        firm
embedded                derivatives                   and                   not    require                                   by     physical              delivery               of     non-financial                                          If




elects      to    bifurcate               the     embedded                        derivative              from     the     associated                   debt          it    is   accounted               for at           fair     value             and       the

host     contract              is    accounted                    for at           amortized               cost      adjusted                for the           effective                portion         of     any         fair        value          hedge

accounting               relationships                           If    the        firm     does            not     elect       to       bifurcate              the          entire         hybrid         financial                instrument                    is



accounted               for     at       fair    value           under             the    fair       value        option           See Notes                      for further                   information                 regarding                 hybrid

financial         instruments



Transfers               of Financial                     Assets               In    general               transfers         of     financial            assets              are       accounted               for     as         sales          when           the

firm     has      relinquished                    control              over        the     transferred              assets               Transfers               that            are     not     accounted                  for        as      sales           are

accounted               for     as       collateralized                     financings                    See             Recent            Accounting                      Developments                       below             for      information


regarding          amendments                          to    accounting                   for transfers             of     financial             assets



Asset                                                  Management                        fees are recognized                          over         the                           that     the     related            service              is        provided
             Management                                                                                                                                    period

based        upon        average                 net        asset values



Share-Based                    Compensation

The      firm                                     in     the          share-based                compensation                       plans  of Group Inc   The cost of employee services
                   participates

received          in    exchange                  for          share-based                     award         is    generally            measured based  on the grant-date fair value of the

award        in    accordance                      with          ASC              718      Share-based                     awards            that         do      not            require         future         service                i.e            vested

awards                                    awards             granted               to    retirement-eligible                      employees                 are expensed                         immediately                           Share-based
                  including

                        awards              that                              future           service            are      amortized                over         the             relevant         service                 period                Expected
employee                                                 require

forfeitures            are     included                in
                                                             determining                  share-based                   employee                 compensation                      expense


Property Leasehold                                Improvements                            and        Equipment


Property           leasehold                    improvements                    and equipment    net of accumulated   depreciation   and amortization                                                                                                          are

recorded           at   cost and                 included              in    Other assets in the consolidated statement of financial condition


Substantially                 all    property                and       equipment                 are depreciated                        on           straight-line                     basis      over         the         useful              life   of       the

asset        Leasehold                                                        are amortized on                                                          basis          over        the     useful        life        of    the     improvement
                                          improvements                                                                    straight-line

or   the term           of    the        lease whichever                           is    shorter            Certain          costs          of    software developed                             or     obtained                 for internal                  use

are                             and        amortized on                            straight-line             basis over               the        useful        life        of the       software
       capitalized



Property           leasehold improvements                                          and         equipment             are      tested             for    impairment                      whenever events                           or      changes                in



circumstances                                            that         an      assets            or    asset         groups              carrying           value                 may       not     be                     recoverable                          An
                                    suggest                                                                                                                                                                  fully


                        loss             calculated                   as the        difference              between               the    estimated                fair           value      and         the     carrying                value             of    an
impairment
asset             asset                                recognized                        the     sum       of the        expected                undiscounted                      cash         flows        relating             to    the         asset        or
            or                 group             is                                 if




asset group              is    less        than        the       corresponding                       carrying        value



The firms operating leases                                        include            office       space            held      in    excess            of    current                requirements                       The          firm         records

                 based          on        the     fair       value           of    the remaining                   lease          rentals          reduced                  by any          potential           or        existing              sublease
liability


                                                                         GOLDMAN                    SACHS                   CO           and SUBSIDIARIES

                              NOTES          TO CONSOLIDATED                                      STATEMENT                        OF FINANCIAL                          CONDITION                      Continued




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                       lease            before            the      end         of        its    term        are

recognized                 and      measured             at   fair       value         upon       termination



Foreign            Currency Translation


Assets         and         liabilities       denominated                   in    non-U.S             currencies                are        translated            at       rates     of        exchange                 prevailing               on   the


date     of the           consolidated             statement                of financial             condition



Income             Taxes


Income          taxes are                 provided            for        using       the      asset and                 liability         method               Deferred                tax        assets and                     liabilities        are

                           for                        differences                    between             the        financial           reporting          and           tax      bases            of     the    firms assets and
recognized                          temporary
liabilities             Valuation           allowances                   are     established               to       reduce          deferred          tax       assets            to        the     amount             that        more         likely


than     not       will       be    realized          The firms                  tax    assets and                   liabilities         are presented                    as           component                  of       Other assets

and     Other              liabilities      and      accrued              expenses                  respectively                   in    the    consolidated                     statement                of financial                 condition

The     firm                             amended                                                                    related         to    the    accounting                     for     uncertainty                   in    income              taxes
                     adopted                                   accounting                  principles
                                                                                  The                                                                                                                                                     when
ASC 740                   as   of    December                   2007                        firm     recognizes                tax        positions            in    the        financial            statements                   only                   it




                                 than                                                               be     sustained                            examination                            the         relevant
is     more        likely
                                          not     that        the        position          will                                     upon                                         by                                    taxing            authority

based         on        the    technical          merits            of    the     position                  position           that        meets          this       standard                is     measured                 at     the    largest

amount             of      benefit        that    will        more                      than         not        be     realized                           settlement                                             is    established                   for
                                                                           likely                                                          upon                                                   liability


differences                between          positions           taken           in      tax       return        and       amounts recognized                               in    the        financial           statements



Cash          and       Cash         Equivalents


The     firm       defines cash               equivalents                  as    highly           liquid overnight                  deposits          held          in    the     ordinary              course             of    business



Recent Accounting                            Developments


FASB           Accounting                    Standards                    Codification                         In
                                                                                                                     July      2009             the       FASB              launched                 the        FASB               Accounting

Standards               Codification              the Codification                       as the          single         source            of    GAAP            While            the        Codification                   did     not    change

GAAP            it      introduced                 new structure                       to     the        accounting                 literature            and        changed   references                                   to     accounting

standards               and         other    authoritative                                                                     The         Codification               was effective for the                                  firm        for    2009
                                                                           accounting                guidance
and     did    not         have      an     effect       on    the       firms         financial          condition



Accounting      for Transfers   of Financial Assets  and Repurchase Financing         Transactions      ASC 860 In
           2008    the FASB   issued  amended   accounting principles related to  transfers  of financial    assets and
February
                        transactions These   amended principles require an initial transfer of     financial  asset and
repurchase   financing

     repurchase                financing          that        was         entered           into     contemporaneously                               or   in    contemplation                        of    the        initial       transfer          to


be     evaluated               as        linked      transaction                 for purposes                   of     determining               whether                   sale        has occurred                         unless         certain

                                                                                                      asset must                   be                      obtainable                        the        marketplace                      The        firm
criteria       are         met       including           that       the     transferred                                                   readily                                      in


                     these          amended              accounting                    principles              for     new          transactions                    entered             into         after       November                      2008
adopted

Adoption             did      not    have         material               effect        on the firms                 financial           condition


                                                                       GOLDMAN SACHS                                         CO          and SUBSIDIARIES

                             NOTES           TO CONSOLIDATED                                    STATEMENT                          OF FINANCIAL                             CONDITION                          Continued




Disclosures                  About         Derivative                Instruments                      and        Hedging                 Activities                 ASC 815                          In    March         2008         the       FASB
issued       amended                  principles           related            to    disclosures                  about            derivative              instruments                     and         hedging              activities           which

were       effective           for     the     firm        beginning               on        November                  29         2008           Since           these         amended                      principles              require       only

additional           disclosures                                         derivatives                 and       hedging             activities               adoption              did      not        affect        the       firms       financial
                                              concerning
condition


                                                                                                                                                                                    amended
Business Combinations                                    ASC 805                        In    December                  2007            the      FASB            issued                                        accounting              principles

                      business                                                which                                                                         for       transaction                    costs          certain          contingent
related         to                         combinations                                       changed                 the     accounting
assets and              liabilities          and other balances in                                    business               combination                         In    addition                in    partial acquisitions                       when
control      is      obtained           the    amended principles                                   require          that     the       acquiring                company              measure and                          record         all   of the


                 assets           and                               including                goodwill             at       fair        value         as     if      the      entire            target           company               had        been
targets                                      liabilities


                        These           amended                 accounting                   principles               will        be     applicable                   to    the       firms               business             combinations
acquired
                     after     December                  31      2009               Adoption             will        not     affect         the firms                  financial               condition               but     may         have      an
occurring

effect     on     accounting               for future            business               combinations



Noncontrolling                     Interests             in     Consolidated                        Financial               Statements                    ASC 810                         In    December                   2007       the       FASB
issued       amended                                          principles             related           to      noncontrolling                   interests              in    consolidated                       financial           statements
                                     accounting
which       require           that     ownership                interests            in      consolidated                   subsidiaries                  held         by    parties                other       than         the    parent        i.e
                                                     be       accounted                 for     and         presented                  as      equity            rather        than            as              liability       or    mezzanine
noncontrolling                 interests

                These          amended               accounting                principles               will    be      effective              for the           firm after             December                   31 2009                The     firm
equity
does     not      expect          adoption           to    have               material              effect      in    its    financial           condition



Disclosures                  by       Public            Entities              Enterprises                       about             Transfers                 of        Financial                     Assets          and            Interests         in

Variable             Interest          Entities            ASC           860     and 810                         In     December                     2008           the      FASB              issued            amended               principles

related         to    disclosures                 by      public         entities             enterprises                     about            transfers               of     financial                   assets        and         interests         in



variable         interest                            which         were        effective              for      the     firm       beginning               in     December                  2008                Since         these     amended
                                  entities

                                                  additional            disclosures                   concerning                   transfers              of     financial            assets                and      interests             in   VIEs
principles            require         only

adoption          did    not      affect       the      firms        financial               condition



                              Fair Value                  When              the      Volume                  and           Level          of        Activity               for the                  Asset          or        Liability          Have
Determining

Significantly                Decreased                  and      Identifying                  Transactions                        That         Are     Not            Orderly           ASC 820                         In
                                                                                                                                                                                                                              April    2009         the


FASB        issued           amended               accounting                 principles               related          to    determining                      fair    value         when                 the volume                and     level    of

                                                                    have                                       decreased                  and                                 transactions                       that        are    not     orderly
activity     for the           asset         or    liability                       significantly                                                      identifying

                             these         amended                                           list     factors           which             should               be      evaluated                     to     determine                whether
Specifically                                                     principles

transaction                                                     that                                    to      transactions                   or     quoted               prices         may             be    necessary              when         the
                        is    orderly          clarify                   adjustments
volume          and      level        of                      for      an     asset           or      liability        have            decreased                 significantly                      and        provide             guidance         for
                                             activity

determining              the       concurrent                 weighting              of       the      transaction                     price         relative          to     fair        value             indications              from       other

valuation            techniques              when          estimating                fair       value                The          firm      adopted                 these         amended                      accounting              principles

            2009               Since         the        firms          fair    value            methodologies                          were          consistent               with         these               amended               accounting
during

principles            adoption          did       not     affect       the     firms           financial             condition



Interim Disclosures                          about         Fair        Value         of Financial                      Instruments                    ASC 825                        In    April          2009          the        FASB issued
amended              principles            related         to    interim           disclosures                  about         fair       value         of      financial             instruments                     The           firm    adopted

these      amended                principles            during         2009          Adoption                  did     not    affect           the     firms          financial            condition




                                                                                                                             10


                                                                    GOLDMAN                     SACHS                 CO         and     SUBSIDIARIES

                            NOTES TO CONSOLIDATED                                          STATEMENT                      OF FINANCIAL                      CONDITION                    Continued




Transfers              of   Financial               Assets           and          Interests          in       Variable           Interest        Entities              ASC          860       and         810             In    June

2009        the     FASB           issued          amended                accounting              principles          which            change         the        accounting              for securitizations                      and

VIEs        These           principles             were       codified                as Accounting                 Standards            Update            ASU No                  2009-16                Transfers               and

Servicing          Topic           860            Accounting                for       Transfers          of    Financial          Assets and                 ASU No 2009-17                           Consolidations

                                                                                                                                                                             Variable                               Entities        in
Topic 810    Improvements                                    to     Financial           Reporting              by    Enterprises              Involved            with                          Interest

December  2009      ASU                               No          2009-16              eliminates             the     concept           of           QSPE              changes            the       requirements                   for


derecognizing                    financial          assets               and      requires           additional                disclosures            about            transfers              of    financial               assets

including          securitization                 transactions                  and     continuing             involvement               with     transferred                 financial            assets            ASU No
2009-17           changes              the    determination                      of    when             VIE     should           be    consolidated                        Under     ASU No 2009-17                               the

determination                of    whether           to      consolidate                   VIE      is    based           on     the    power         to    direct          the    activities             of   the VIE            that

most                                                the      VIEs         economic              performance                together           with     either          the    obligation             to    absorb              losses
           significantly            impact
or   the    right to         receive          benefits             that    could         be     significant          to    the        VIE as         well        as    the    VIEs         purpose              and       design

ASU No            2009-16              and      2009-17             are    effective          for fiscal            years beginning                  after       November                15        2009         In
                                                                                                                                                                                                                      February

2010        the        FASB         issued          ASU No 2010-10                            which           defers       the        requirements          ASU No 2009-17
                                                                                                                                                                  of                                                for     certain

interests         in    investment                funds        and         certain        similar         entities             Adoption          of    ASU Nos 2009-16 and                                      2009-17            on

January                2010        did    not      have             material           effect      on    the    firms          financial        condition             or regulatory                capital           However
continued                                    of   these       principles               requires         the    firm to         make judgments                     that       are    subject          to    change              based
                   application

on the      new        facts       and       circumstances                      and     evolving         interpretations                and     practices


Fair    Value          Measurements                         and      Disclosures                        Measuring                Liabilities           at    Fair          Value      ASC 820                        In     August

2009        the        FASB            issued         ASU           No           2009-05            Fair        Value            Measurements                     and        Disclosures                  Topic             820
                                             at    Fair      Value                ASU         No        2009-05            provides           guidance                in    measuring               liabilities           when
Measuring              Liabilities


                                         active       market              for    an     identical                                not    available           and        clarifies         that             reporting             entity
quoted       price          in    an                                                                      liability       is


should       not       make        an     adjustment                to    fair    value       for        restriction            that    prevents            the       transfer       of the         liability             The    firm


adopted       ASU No                   2009-05             during         2009          Since       the firms             fair    value        methodologies                      were     consistent                with       ASU
No      2009-05             adoption          did     not     affect        the       firms     financial           condition



                       Disclosures                  about            Fair        Value        Measurements                       ASC 820                    In    January           2010            the        FASB         issued
Improving
ASU No 2010-06                         Fair Value              Measurements and                           Disclosures                 Topic      820.- Improving                      Disclosures                    about        Fair

Value       Measurements                           ASU         No         2010-06             provides          amended                disclosure                requirements                 related          to    fair       value

measurements                      ASU No             2010-06              is     effective         for financial               statements            issued            for reporting               periods           beginning

after      December               15     2009        for certain               disclosures              and    for    reporting          periods beginning                         after      December                15        2010
for other      disclosures                   Since          these         amended             principles            require       only       additional           disclosures              concerning                fair      value

measurements                      adoption          will     not     affect       the    firms          financial         condition




                                                                                                                     11


                                                                        GOLDMAN                              SACHS                   CO      and      SUBSIDIARIES

                            NOTES TO CONSOLIDATED                                                        STATEMENT                         OF FINANCIAL                        CONDITION             Continued




Note           Financial               Instruments



Fair Value            of Financial                   Instruments



The     following            table        sets        forth       the        firms               financial            instruments              owned              at    fair    value         including        those       pledged         as

                                                                                                                                                                    value           At any                     time     the    firm
collateral        and         financial             instruments                    sold            but       not     yet      purchased              at    fair                                 point     in                              may
use cash         instruments as                      well    as     derivatives                      to      manage                long     or short         risk position




                                                                                                                                                                               As   of   December              2009

                                                                                                                                                                       Assets                                   Liabilities



                                                                                                                                                                                         in    millions




              Commercial                                                      of    deposit               time     deposits
                                       paper         certificates


                  and        other                     market           instruments                                                                                              3293
                                          money

              U.S government                        and    federal                                 obligations                                                                  74848                                      19875
                                                                              agency
              Non-U.S                                                                                                                                                            1700                                          560
                               government                 obligations

              Mortgage and                other       asset-backed                      loans        and      securities                                                         5553
              Bank     loans                                                                                                                                                         248

                                   debt     securities           and         other         debt       obligations                                                               15539                                         3259
              Corporate

              Equities       and       convertible           debentures                                                                                                         21721                                         9538
              Derivative        contracts                                                                                                                                        98411                                        6967

              Total                                                                                                                                                            132743                                      40201



                      Net    of cash      received      pursuant        to                     enforceable         netting    agreements       of   $538   million
                                                                              legally




Fair Value            Hierarchy


The     following            tables           set     forth        by        level         within            the      fair     value        hierarchy             total    financial          instruments             owned          at   fair



                                instruments                                              not                                           at           value          and         other     financial        assets       and      financial
value         financial                                      sold            but                    yet      purchased                      fair



liabilities      accounted                 for at         fair     value            under             the      fair     value         option        as     of     December               2009        See Note                 for further


information           on      the               value                                           Assets           and         liabilities     are     classified            in    their entirety           based       on      the lowest
                                       fair                      hierarchy
level    of input           that     is   significant              to    the            fair      value       measurement




                                                                                                                                    12


                                                                                                                      GOLDMAN SACHS                                                    CO                and                SUBSIDIARIES

                                                            NOTES                   TO CONSOLIDATED                                              STATEMENT                                        OF FINANCIAL                                   CONDITION                            Continued




                                                                                                                                                                         Financial                        Assets               at Fair           Value as                   of     December            2009

                                                                                                                                                                                                                                                                                                  Netting          and

                                                                                                                                   Level                                                            Level                                                     Level                                Collateral                               Total


                                                                                                                                                                                                                                      in      millions


               Commercial                                            certicates                     of
                                                  paper
                     deposit                 time           deposits                and         other

                      money              market               instruments                                                                                   73                                                          3220                                                                                                                   3293

               U.S        government                             and        federal

                                             obligations                                                                                        33636                                                                  41212                                                                                                                 74848
                      agency

               Non-U.S                   government                          obligations...                                                            330                                                              1370                                                                                                                    1700
                                                                      asset-backed
               Mortgage and                           other

                      loans            and        securities

                      Loans              and         securities                 backed                   by

                         commercial                          real      estate                                                                                                                                           1040                                                270                                                                1310
                      Loans             and          securities                 backed               by
                         residential                    real        estate                                                                                                                                              3723                                                520                                                                4243

               Bank         loans                                                                                                                                                                                           248                                                                                                                     248


               Corporatedebtsecuritie21                                                                                                                     83                                                          9115                                            1424                                                                  10622

               State        and              municipal                obligations                                                                                                                                       1376                                            1114                                                                   2490

               Otherdebtobligations                                                                                                                    652                                                              1109                                                666                                                                2427
               Equities                and         convertible

                   debentures                                                                                                                   16995                                                                   3625                                            1101          181
                                                                                                                                                                                                                                                                                                                                              21721

         Cash        instruments                                                                                                                51769                                                                  66038                                         5095                                                                   122902

         Derivative              contracts                                                                                                                  51                                                          9863         IC
                                                                                                                                                                                                                                                                           462                              535           15                   9841

Total        financial            instruments                        owned                  at     fair


       value                                                                                                                                    51820                                                                  75901                                         5557                                   535                             132743

Securities            segregated                            for     regulatory

       and     other       purposes                                                                                                              9.131                                                                      608                                                                                                                9739

Securities             borrowed                                                                                                                                                                                        79137                                                                                                                 79137
Financial             instruments                       purchased                      under
                                   to        resell           at     fair       value                                                                                                                                  70499                                                                                                                 70499
       agreements
Receivables                from              customers                       and
                                                                                                                                                                                                                            440                                                                                                                     440
       counterparties

Total      financial             assets                 at    fair         value                                                                60951                                                           226585                                               5557                                   535                             292558



           Includes       $181           and       $307          million       of   COOs          backed          by    real     estate     obligations            within     level                and         level         respectively         of the         fair      value     hierarchy



           Indudes         $656          million        of    COOs           backed         by      corporate           obligations         within     level          of the      fair        value             hierarchy



           Primarily       consists              of   publicly         listed         equity      securities


           Consists        of    U.S           Department                  of the     Treasury             U.S        Treasury            securities        and     money         market              instruments


 151

                                       all   of the         firms      level                              and    convertible           debentures            are     less    liquid           publicly             listed    securities
           Substantially                                                               equities


 16                                                     and                                of                 derivative         assets     within                    and                           respectively                    the          value         hierarchy            These      amounts      exclude      the
           Includes       $670           million                  $67       million             credit                                                 level                   level                                           of         fair


           effects     of netting              under         enforceable               netting           agreements             across      other    derivative             product               types


 71
           Principally          consists           of resale           agreements                    The        underlying         securittes        have         been      segregated                    to      satisfy    certain      regulatory           requirements


           Includes       $744           million        of private             equity      investments


 191

           Level         assets          were         2%      of Total         financial          assets         at    fair    value      and   1%    of Total         assets                in    the     consolidated              statement           of    financial           condition


 10                              cash                                               and     the                       of netting       across    the        levels    of the                      value          hierarchy          Netting                       positions          classified    within    the   same        level   is
           Represents                          collateral           netting                          impact                                                                           fair                                                       among
           Included       in    that         level




                                                                                                                                                                                      13


                                                                                                    GOLDMAN                             SACHS                             CO          and          SUBSIDIARIES

                                              NOTES TO CONSOLIDATED                                                                   STATEMENT                                  OF FINANCIAL                               CONDITION                       Continued




                                                                                                                                                           Financial                  Liabilities                 at    Fair        Value        as   of     December                2009

                                                                                                                                                                                                                                                             Nethng            and

                                                                                                                            Level                                             Level                                         Level                               Collateral                              Total


                                                                                                                                                                                                                       in   millions


              U.S          government                         and     federal

                                         obligations                                                                                   19858                                                      17                                                                                                          19875
                    agency

              Non-U.S                                                                                                                          500                                                60                                                                                                             560
                                        government                       obligations

              Bank         loans


              Corporate                  debt           securities1                                                                               63                                      3116                                              80                                                                 3259

              Equities             and          convertible                   debenture21.                                               9270                                                   266                                                                                                            9538

      Cash          instruments                                                                                                       29691                                               3461                                              82                                                                33234

      Derivative              contracts                                                                                                                                                   7074                                         133                               246                                   6967
 Financial          instruments                        sold          but      not yet

     purchased                at       fair     value                                                                                  29697                                           10535                                           215                               246                                  40201

 Unsecured             short-term                       borrowings

 Securities          loaned                                                                                                                                                           23810                                                                                                                   23810

 Financial          instruments                        sold          under

     agreements                   to    repurchase                       at       fair   value...                                                                                   117516                                                                                                                117516

 Other      secured                                                                                                                                                                               71                                   782                                                                       853
                                  financings

                                                                                                                                                                                                  17                                                                                                              17
 Other       liabilities           and accrued                        expenses

                                                                                                                                                                                                                                       221                                                                       221
 Unsecured              long-term                     borrowings



 Total     financial              liabilities                at   fair      value                                                     29697                               151949
                                                                                                                                                                    _____________
                                                                                                                                                                                                                          1221
                                                                                                                                                                                                                  ____________
                                                                                                                                                                                                                                                               246
                                                                                                                                                                                                                                                       ____________
                                                                                                                                                                                                                                                                                                         182621



         Includes     $45     million          of     CDOs         backed          by corporate           obligations            within        level        of      the   fair    value         hierarchy



      Substantially           consists            of publicly            listed     equity      securities


13
      Includes        $247         million        and        $1   million      of   credit     derivative       liabilities           within       level         and      level                                   of the     fair   value    hierarchy           These       amounts     exclude        the
                                                                                                                                                                                          respectively

      effects       of netting          under          enforceable            netting        agreements           across          other        derivative            product         types



      Level         liabilities         were          less    than       1%   of Total        financial      liabilities         at    fair    value       and       Total        liabilities      in    the   consolidated            statement       of   financial        condition



                            cash         collateral           and    the                     of netting     across         the        levels     of the      fair     value       hierarchy             Netting        among        positions      classified       within    the   same   level   is
      Represents                                                              impact

      Included        in   that        level




                                                                                                                                                                      14


                                                                          GOLDMAN                   SACHS                  CO        and SUBSIDIARIES

                              NOTES            TO CONSOLIDATED                                 STATEMENT                      OF FINANCIAL                       CONDITION                     Continued




Credit          Concentration


Credit         concentrations                      may    arise        from trading                 underwriting                   lending       and      securities           borrowing                activities             and     may
be      impacted               by changes                in     economic                industry          or   political           factors           The        firm      seeks         to    mitigate               credit      risk      by

actively           monitoring                                         and        obtaining             collateral           as       deemed              appropriate               While           the         firms           activities
                                             exposures
expose             it    to     many          different          industries              and        counterparties                       the   firm       routinely            executes                       high        volume            of

transactions                  with      counterparties                    in   the     financial          services           industry           including             brokers and                 dealers              commercial

banks              clearing             houses                exchanges                 and         investment                funds                 This        has         resulted              in     significant                 credit

concentration                   with     respect          to    this       industry           In    the    ordinary           course           of    business             the     firm       may        also         be      subject        to

     concentration                   of credit        risk to              particular         counterparty                  borrower            or       issuer        including            sovereign                issuers          or to


     particular              clearing        house         or   exchange


As      of    December                 2009        the     firm held             $78.5       billion       17%         of    total       assets          of    U.S        government                   and      federal          agency

obligations                  included         in   Total        financial              instruments             owned           at     fair     value          and      Cash         and        securities                 segregated
for     regulatory               and        other        purposes                in    the    consolidated                  statement               of    financial          condition                   In    addition              as     of

December                 2009           $95.3        billion         of    the       firms      financial         instruments                  purchased                under          agreements                    to    resell      and

securities              borrowed             including               those        in    Cash         and       securities             segregated                for regulatory                and        other purposes
respectively                  were       collateralized                   by   U.S       government                and        federal          agency           obligations                  As    of     December  2009
$8.7         billion         of the     firms        financial            instruments               purchased               under          agreements                to   resell        and       securities               borrowed

were         collateralized                 by other sovereign                        obligations           As    of       December              2009          the     firm did         not     have           credit          exposure
to    any other counterparty                             that   exceeded 2%                    of    the    firms          total     assets


Derivative               Activities




                                              are instruments                         such      as futures              forwards                                                   contracts                  that     derive          their
Derivative               contracts                                                                                                             swaps            or    option

value          from           underlying             assets               indices            reference             rates            or         combination                   of     these              factors             Derivative

instruments                   may be         privately          negotiated contracts                           which        are      often      referred          to    as    OTC           derivatives               or       they    may
be    listed       and         traded on            an    exchange                Derivatives              may        involve         future        commitments                   to    purchase               or     sell     financial


instruments                   or to     exchange               currency           or    interest          payment            streams The amounts exchanged                                               are based                on      the


specific          terms         of the       contract           with       reference           to specified             rates            securities            currencies              or    indices



Certain           cash          instruments                   such        as     mortgage-backed                       securities              interest-only                and        principal-only                  obligations

and          indexed            debt         instruments                  are     not        considered               derivatives              even           though          their         values            or     contractually

required           cash         flows        are derived from                    the    price       of    some        other         security         or   index


The      firm      enters            into    derivative          transactions                 to    facilitate        client         transactions               to     take       proprietary             positions              and       as

     means              of    risk     management                      Risk       exposures                are    managed                  through            diversification                by        controlling              position

             and                                                                                    For                            the    firm                                 the      risk related                 to
sizes                   by    entering         into      offsetting            positions                   example                                  may manage                                                                  portfolio

of   common                  stock      by   entering           into      an     offsetting          position         in       related         equity-index               futures            contract



The      firm applies                 hedge accounting  to certain                                  derivative          contracts              The        firm       uses      these         derivatives                  to   manage
certain         interest          rate   and currency exposures                                     The        firm    designates                certain         interest         rate       swap         contracts               as      fair


value        hedges




                                                                                                                       15


                                                                            GOLDMAN                                SACHS                     CO         and            SUBSIDIARIES

                            NOTES TO CONSOLIDATED                                                              STATEMENT                            OF FINANCIAL                                CONDITION                          Continued




The     fair        value        of     the         firms        derivative                         contracts                is    reflected                net        of      cash           paid            or      received           pursuant             to    credit


support          agreements                     and       is     reported                         on           net-by-counterparty                                basis           in    the firms                         consolidated                  statement       of

financial           condition                 when        management                                   believes                    legal        right           of      setoff          exists                     under        an     enforceable                 netting


agreement                The          following            table           sets            forth             the     fair         value       and           the        number                 of        the firms                 derivative            contracts       by

major     product             type on                    gross basis as                                 of    December                   2009               Gross              fair     values                 in    the       table     below           exclude       the

effects        of    both        netting            under          enforceable                           netting            agreements                      and         netting             of      cash             received           or     posted         pursuant

to   credit      support              agreements                   and           therefore                     are     not        representative                        of     the firms exposure



                                                                                                                                                                               As      of     December                    2009

                                                                                                                                                                                                                                              Number
                                                                                                                                               Derivative                                     Derivative                                          of

                                                                                                                                                    Assets                                     Liabilities                               Contracts


                                                                                                                                                            in millions                 except                number           of contracts

            Derivative                contracts            for tradinci                   activities

                                      Interest         rates                                                                                            $13871                                            $13759                                  11051

                                      Credit
                                                                                                                                                                3994                                               3514                            7354

                                      Currencies                                                                                                                                                                                                146077
                                                                                                                                                                6529                                               6381
                                      Commodities                                                                                                                 154                                                212                                616

                                      Equities                                                                                                              21684                                             18667                             156568

                 Gross        fair      value         of derivative                     contracts                                                      $46232                                             $42533                               321666


                                      Counterparty                 netting                                                                               35320                                              35320
                                      Cash          collateral          netting
                                                                                            121


                                                                                                                                                          1071                                                246

            Fair value                included            In   financial                 Instruments

            owned             at      fair     value                                                                                                        $9841


            Fair value                included            in   financial                 instruments

            sold        but       not         yet   purchased                   at      fair           value                                                                                                 $6967



                                         the              of receivabte               balances           with      payable        balances      for   the       same     counterparty               pursuant          to enforceable          netting
                     Represents                 netting

                     agreements
            12
                     Represents          the    netting   of cash        collateral               received      and    posted       on       counterparty              basis    pursuant           to     credit     support      agreements

                     Presented        after               effect   to    $1.1         billion       of derivative       assets       and     $1.1     billion     of   derivative           liabilities        settled     with    clearing
                                                giving

                     organizations




                                                                                                                                          16


                                                                         GOLDMAN SACHS                                              CO          and         SUBSIDIARIES

                          NOTES TO CONSOLIDATED                                                       STATEMENT                           OF FINANCIAL                           CONDITION                             Continued




The        firm     enters         into             broad                            of        credit        derivatives                   to      facilitate            client            transactions                      to     take           proprietary
                                                                     array

positions           and     as          means            of        risk      management                              The         firm     uses          each        of     the      credit             derivatives                 described               below

for   these                              These                credit          derivatives                   are entered                   into       by various                 trading            desks               around            the       world        and
                    purposes
are       actively      managed                based           on        the     underlying                     risks             These          activities              are     frequently                   part          of         broader            trading

strategy          and      are dynamically                      managed                        based            on         the     net        risk     position                As          individually                 negotiated                 contracts

credit       derivatives               can      have           numerous                     settlement                      and     payment                 conventions                           The            more common                         types           of


triggers          include          bankruptcy                      of     the         reference                      credit        entity            acceleration                     of      indebtedness                              failure       to        pay
                                                      and          dissolution                  of the
restructuring              repudiation                                                                          entity



               Credit            default            swaps                       Single-name                          credit         default             swaps             protect            the         buyer              against            the        loss       of

                                                                                                                                                                                                                                         of        default
               principal           on     one    more bonds loans or mortgages
                                                    or                                                                                          reference                 obligations                    in      the        event                                    by
               the      issuer          reference  entity The buyer of protection                                                                    pays      an        initial      or      periodic                 premium                to    the    seller

               and        receives            credit          default                                       for the                             of    the    contract                 If    there           is    no        credit       default          event
                                                                                protection                                       period

               as defined by the                         specific             derivative                contract                  then        the      seller of           protection                   makes                no    payments                to     the

               buyer         of    protection                  However                    if         credit           default           event         occurs              the      seller of                protection                 will    be    required

               to     make              payment               to    the        buyer           of     protection                   Typical            credit        default           events                requiring              payment             include


               bankruptcy                of    the reference                     credit             entity           failure        to    pay the           principal              or interest                    and        restructuring                 of     the

               relevant           obligations                 of    the       reference                 entity




               Credit            indices            baskets                   and         tranches                         Credit         derivatives               may reference                                  basket               of    single-name
                                                                                broad-based                           index                                              the       event               of              default           of    one        of      the
               credit        default           swaps                or                                                                    Typically              in


               underlying               reference              obligations                      the      protection                seller          will    pay      to the          protection                    buyer                pro-rata           portion

               of         transactions                   total          notional               amount                relating            to    the        underlying               defaulted                  reference                  obligation                  In


               tranched                transactions                     the     credit              risk        of          basket            or     index          is    separated                     into       various               portions           each

               having            different          levels              of     subordination                           The         most          junior          tranches                  cover            initial          defaults              and      once

               losses exceed                    the       notional              amount                of     these               tranches             the    excess              is        covered               by     the       next         most       senior

               tranche            in   the     capital         structure



               Total        return                                                                                                                                                                  economic                                                    of
                                              swaps                          total        return         swap               transfers            the       risks         relating            to                                   performance
               reference               obligation              from the               protection                     buyer         to    the       protection              seller             Typically                     the    protection              buyer

               receives from the                      protection                     seller             floating             rate of          interest         and        protection                   against              any        reduction           in     fair


               value       of     the     reference                                             and        in     return          the     protection               seller          receives                 the        cash        flows       associated
                                                                    obligation

               with       the     reference              obligation                  plus        any increase                      in    the     fair      value          of the           reference                   obligation




               Credit           options                  In             credit        option               the        option            writerassumes the                                  obligation                  to    purchase                or    sell


               reference               obligation              at            specified               price           or credit            spread The option                                 purchaser                   buys           the     right      to     sell


               the      reference              obligation                 to     or        purchase                   it    from          the      option          writer              The             payments                   on     credit       options

               depend             either       on         particular                 credit          spread                or the        price       of    the     reference                 obligation




Substantially              all    of     the       firms           purchased                    credit           derivative                transactions                   are       with          financial                 institutions              and        are

subject        to     stringent               collateral                 thresholds                     The           firm         economically                       hedges                its        exposure                   to     written           credit

                                                                              into                                                              credit         derivatives                   with           identical                                                In
derivatives           primarily               by    entering                              offsetting                 purchased                                                                                                     underlyings
                                                                                                                                                                                                                                         the reference
addition          upon          the occurrence                          of           specified               trigger              event          the       firm       may take                    possession                       of

                      underlying                     particular                 written              credit           derivative                 and        consequently                          may             upon            liquidation             of      the
obligations

reference           obligations                recover              amounts on                        the       underlying                 reference               obligations                    in    the event                  of    default           As        of

December              2009         the       firms        written             and         purchased                    credit           derivatives              had       total
                                                                                                                                                                                           gross         notional                 amounts            of    $99.4

billion     and      $110.6            billion                                        for       total       net       purchased                  protection               of    $11.2             billion         in    notional              value
                                                    respectively




                                                                                                                                   17


                                                                                                                                     GOLDMAN                              SACHS                            CO           and         SUBSIDIARIES

                                                                         NOTES TO CONSOLIDATED                                                                      STATEMENT                                     OF FINANCIAL                                        CONDITION                           Continued




                          The             following                       table           sets             forth             certain                 information                     related              to      the      firms              credit                  derivatives                         Fair       values                 in      the           table

                          below                  exclude                        the          effects                   of       both             netting            under                   enforceable                        netting                 agreements                                 and         netting                of        cash                 paid

                          pursuant                          to        credit          support                    agreements                                 and     therefore                     are           not      representative                                   of      the       firms exposure



                                                                                                                                                                                                                      Maximum                 Payout/Notional

                                                                                   Maximum                                                                  Amount                                                 Amount            of      Purchased                        Credit                                                      Fair      value                of
                                                                                                                 Payout/Notional

                                                                                   Written                                                                                                                                                                                                                                                                      Derivatives
                                                                            of                             Credit            Derivatives                by Tenor                                                                      Derivatives                                                                     Written              Credit


                                                                                                                                                                                                                   Offsetting                                             Other

                                                                                                                                               Years                                                              Purchased                                     Purchased

                                                                 0-12                                       -5                                   or                                                                     Credit                                            Credit                                                                                                Net   Asset/

                                                              Months                                Years                                 Greater                           Total                               DerivatIves                                  DerivatIves                                   Asset                            LIability                           Uablilty


As   of        December                    2009                                                                                                                                                                     in     millions



Credit          spread

on   underlying
                                     41
basis           points

0-250                                                                $6233                           $58270                                $21135                           $85638                                       $77002                                      $14750                                        $932                                 $907                            $25

251-500                                                                    153                              4558                                     2048                            6759                                      6122                                         1.420                                    137                                      240                      103
                                                                                                                                                                                     4618                                      3126                                         5586                                     282                                      268                        14
501-1000                                                                    71                              3180                                     1367
Greater           than         1000                                       223                               1.738                                      439                           2400                                      2211                                             349                                                                           708                      701
Totai                                                                $6680                           $67746                                $24989                           $99415                                       $88461                                      $22105                                   $1358                                $2123                               765

          Tenor           is   based             on     expected                duration           for     mortgage-related                      credit      derivatives         and on           remaining             contractual               maturity            for     other      credit    derivatives



                                                               credit       derivatives                                       the   notional           amount       of purchased                  credit        derivatives         to the         extent             they      hedge        written      credit     derivatives               with          identical
          Offsetting              purchased                                                              represent

          underlyings


13
                                      of purchased                                                  excess            of the        amount            of written                            on                                               and       purchased                    protection       on     other         underlyings              on    which            the
          Comprised                                                      protection           in                                                                     protection                   Identical           underlyings

          firm       has       not        written           proteofon


          Credit          spread            on        the     underlying                together            with       the     tenor      of the        contract      are       indicators           of payment/performance                                 risk            For     example         the     firm     is    least      likely       to   pay         or

          otherwise              be                              to                     where             the    credit                         on    the                       is    0-250              basis                 and     the        tenor        is     0-12 Months                   The       likelihood            of payment                 or
                                           required                     perform                                                spread                        undertying                                            points

          performance                      is   generally                greater        as    the        credit        spread        on        the    underlying          and   tenor        increase



          These            net       liabilities            differ       from     the     carrying              values         related          to credit      derivatives             in   the    firms         consolidated               statement                of     financial        condition        because              they     exclude              the

          effects          of both              netting          under       enforceable                   netting           agreements   and                 netting      of cash          collateral           paid     pursuant           to    credit            support            agreements            Including             the    effects            of netting

          receivable                 balances                with       payable          balances               for    the     same counterparty                    across            written        and        purchased          credit          derivatives                  pursuant          to enforceable              netting            agreements
          the      firms         consolidated                        statement           of   financial               condition           as    of    December        2009            included             net     asset       related        to    credit           derivatives             of   $737     million         and        net        liability        related

          to     credit        derivatives                  of $247         million            These            net     amounts            exclude            the   netting      of    cash        collateral           paid     pursuant           to      credit          support         agreements




                                                                                                                                                                                                         18


                                                                   GOLDMAN                     SACHS              CO     and SUBSIDIARIES

                            NOTES         TO CONSOLIDATED                                  STATEMENT                  OF FINANCIAL                    CONDITION                 Continued




Collateralized Transactions



The       firm    receives         financial           instruments as                    collateral        primarily         in   connection          with     resale           agreements                    securities

borrowed               derivative           transactions                    and        customer            margin        loans          Such      financial               instruments                   may         include


obligations            of    the    U.S        govemment                       federal         agencies          sovereigns           and       corporations                   as    well         as    equities          and

convertibles



                  cases          the     firm             permitted               to    deliver       or    repledge          these       financial      instruments                      in      connection              with
In
      many                                          is


entering           into         repurchase          agreements                           securities          lending          agreements               and           other           secured                 financings

collateralizing             derivative         transactions and                         meeting       firm or         customer        settlement         requirements                           As     of    December
2009        the    fair     value       of financial            instruments               received          as    collateral       by     the   firm that          it   was     permitted               to    deliver       or

repledge          was $404.3              billion        of   which            the     firm delivered            or   repledged         $317.4        billion




The       firm    also       pledges          assets          that        it   owns to         counterparties            who       may      or   may         not        have        the        right to       deliver       or


repledge          them           Financial          instruments                 owned           and    pledged          to    counterparties            that            have    the         right to          deliver       or

repledge           are       included          in        Financial               instruments             owned          and       pledged        as     collateral                  at     fair      value           in    the

consolidated                statement             of      financial              condition         and       were        $19.6        billion     as     of         December                    2009          Financial

instruments               owned         and     pledged              in        connection         with      repurchase             agreements                securities              lending            agreements
and       other secured                financings             to   counterparties                 that     did    not    have       the     right to     sell        or    repledge               are included                in


Financial          instruments              owned             at   fair        value      in   the consolidated               statement          of   financial           condition               and       were     $55.4

billion     as    of    December            2009


In    addition         to    repurchase             agreements                    and      securities        lending          agreements               the     firm        obtains              secured            funding

through          the use         of other      arrangements                          Other      secured          financings         include      arrangements                       that       are     nonrecourse
that                      the                            that      executed             the arrangement                 or                                                               the                                  is
          is   only              subsidiary                                                                                        subsidiary          guaranteeing                               arrangement

obligated         to      repay     the       financing              Other             secured        financings         primarily         consist      of     liabilities               related        to    the     firms

short-term             borrowings          with        Group Inc




                                                                                                                 19


                                                                         GOLDMAN                       SACHS                           CO          and           SUBSIDIARIES

                       NOTES             TO CONSOLIDATED                                          STATEMENT                                  OF FINANCIAL                                    CONDITION                       Continued




Other        secured      funancings                  by        maturity           are     set        forth         in      the       table         below


                                                                                                                                                                                                                      As      of

                                                                                                                                                                                                            December                2009


                                                                                                                                                                                                                    in millions

                                        Other         secured                                    short-term
                                                                                                                                 U2
                                                                           financings                                                                                                                                           52070
                                        Other         secured              financings            long-term
                                                                                                                                                                                                                                       101
                                               2011

                                               2012

                                               2013

                                               2014

                                               2015-thereafter                                                                                                                                                                          26

                                               Total            other      secured          financings                 long-term                                                                                                      127

                                        Total         othersecured                    financings                                                                                                                                52197


                                               The     blended          weighted      average          interest        rate      was 2.0%          as     of   December              2009


                                               Includes          other    secured      financings             maturing          within      one    year    of the       financial            statement         date   and     other   secured         financings     that


                                               are    redeemable             within   one      year    of the       financial          statement          date    at    the     option          of the     holder



                                               As     of   December          2009     other      secured           financings              were    collateralized             by    financial         instruments           Other    secured      financings       include

                                               $101        million      of norrrecourse          obligations           as       of   December           2009




Note           Securitization                   Activities                  and       Variable                    Interest                 Entities




Securitization            Activities



The     firm     securitizes             residential                     and        commercial                        mortgages                           corporate                      bonds              and       other           types           of    financial

assets        The      firm acts         as      underwriter                    of    the        beneficial                     interests               that      are          sold             to    investors               The      firm also              acts      as

underwriter         when       other            subsidiaries                    of    Group Inc                        securitize                  financial                  assets                 The        firm        derecognizes                    financial

assets       transferred           in   securitizations                         provided                 it       has       relinquished                       control              over             such       assets              Transferred                   assets

are accounted             for at        fair    value                prior to       securitization




The    firm     may have            continuing                       involvement                 with             transferred                     assets               including                     retaining              interests            in   securitized

financial       assets        primarily                    in     the       form          of     senior              or         subordinated                           securities                         retaining           servicing               rights         and

                    senior     or       subordinated                         securities                in      connection                     with        secondary                          market-making                          activities             Retained
purchasing
interests       and            other            interests                  related          to        the firms                      continuing                  involvement                          are accounted                        for    at       fair    value
                        any
and    are     included       in    Total             financial              instruments                      owned                   at    fair     value              in     the           consolidated                    statement                of    financial

condition        See Note                for additional                       information                     regarding                    fair    value          measurement


For    the    period      ended            December                       2009         the        firm            securitized                      $48.4          billion               of      financial             assets          in    which            the     firm

had    continuing            involvement                         all      related          to         residential                     mortgages                        primarily                     in     connection                with        government

agency        securitizations




                                                                                                                                      20


                                                                                GOLDMAN                                    SACHS                             CO         and            SUBSIDIARIES

                         NOTES                  TO CONSOLIDATED                                                      STATEMENT                                 OF FINANCIAL                                      CONDITION                                Continued




The     following         table             sets           forth           certain                information                           related              to        the firms                  continuing                           involvement                         in     securitization

entities     to    which            the        firm sold                  assets                  as         well          as     the         total          outstanding                       principal                     amount                     of     transferred                  assets        in


which      the     firm       has         continuing                      involvement                                as      of    December                             2009             The outstanding                                      principal                   amount               set     forth

in   the   table        below             is     presented                          for      the           purpose                 of         providing                    information                         about               the          size           of       the       securitization

entities     in    which            the        firm         has          continuing                         involvement                             and           is     not      representative                                  of    the         firms               risk of          loss           For

retained         or   purchased                      interests                 the        firms                 risk        of    loss             is   limited             to     the        fair          value             of   these                  interests



                                                                                                                                                                                                                               152
                                                                                                                                                               As         of      December                      2009


                                                                                                                                                    Outstanding                                                      Fair          Value            of

                                                                                                                                             Principal                   Amount                               Retained                  Interests


                                                                                                                                                                                       in   millions



                      Residential               mortgage-backed                                                                                                         $43707                                                                3849

                      Other                          aced4t                                                                                                                 4367                                                                          37

                      Total                                                                                                                                             $48074                                                            $3886



                              As     of   December                2009       fair    value        of     other       continuing            involvement                 excludes         $58     million         of purchased                  interests           in   securitizalion

                              entities         where        the     firms      involvement                  was       related      to     secondary               market-making                activities                 Continuing           involvement                also    excludes

                              derivative         contracts               that are      used        by       securitizatlon              entities        to   manage            credit       Interest          rate        or foreign          exchange              risk      See    Note        for


                              information             on    the     firms      derivative               contracts



                              The        firm had          other                          involvement                  in   the   form         of derivative             transactions             and                                  with    certain         nonconsolidated                 VIEs
                                                                     continuing                                                                                                                             guarantees

                              for    which      the        carrying        value      was              liability      of    $70   million          as   of   December              2009        The          notional         amounts             of these           transactions         are

                              included          in   maximum               exposure          to        loss     in   the    nonconsolidated                   VIE        table    below


                              Primarily         consists            of outstanding                principal           and     retained             interests       related        to    government               agency            OSPEs

                              Consists          of    CDOs          backed           by corporate                  and     mortgage            obligations               Outstanding              principal           amount            and      fair     value        of retained

                              interests         include           $4.4     billion    and $37               million         respectively                as   of   December              2009       related           to    VIEs    which          are        also      included     in   the

                              nonconsolidated                     VIE     table      below




                                                                                                                                                        21


                                                                                     GOLDMAN                                    SACHS                              CO          and           SUBSIDIARIES

                               NOTES              TO CONSOLIDATED                                                           STATEMENT                                     OF FINANCIAL                                  CONDITION                          Continued




The     following               table         sets          forth              the              weighted                       average                   key              economic                     assumptions                         used            in         measuring                    the    fair


value    of   the         firms          retained                 interests                       and              the         sensitivity                    of this           fair         value            to    immediate                    adverse                         changes           of    10%
and     20%        in    those           assumptions


                                                                                                                                                                                                As           of     December                 2009

                                                                                                                                                                                                                                                                 11
                                                                                                                                                                                       Type            of     Retained                 Interests




                                                                                                                                                                            Mortgage                                                       Other Asset-
                                                                                                                                                                                Backed                                                          Backed                l2l




                                                                                                                                                                                                             in millions

                        Fair value           of     retained                   interests                                                                                                 3849                                                                         37

                    Weighted                 average                  life      years                                                                                                         4.4                                                                 4.0



                                                                                            13
                    Constant                 prepayment                        rate                                                                                                          23.7                                                               N.M
                        Impact          of   10% adverse change                                             13j


                                                                                                                                                                                              40                                                                N.M

                        Impact          of   20%         adverse                     change
                                                                                                            l3l

                                                                                                                                                                                              85                                                                N.M


                    Discount                 rate   41
                                                                                                                                                                                              5.8                                                               N.M
                        Impact          of   10% adverse change                                                                                                                               67                                                                N.M

                        Impact          of   20% adverse change                                                                                                                              130                                                                N.M

                   11            Includes      $3.8         billion      as     of    December                     2009        held     in   QSPEs

                                 Due     to the     nature         and         cuneni            fair   value             of certain         of these          retained         interests          the       weighted            average     assumptions                    for     constant

                                                      and        discount             rates           and         the     related      sensitivity            to    adverse        changes             are    not     meaningful           as    of   December                   2009       The
                                 prepayment
                                 firms       maximum                                  to        adverse             changes            in   the      value         of these      Interests        is    the       firms      carrng        value      of   $37        million
                                                                 exposure

                   13
                                 constant                                      rate    is       included            only       for    positions         for        which      constant        prepayment                  rate   is    key      assumption                  in    the
                                                  prepayment

                                 determination              of   fair        value


                   14
                                 The                     of the         firms                                                   retained          interests           are     U.S      government                 agencyissued               collateralized                 mortgage
                                         majority                                    mortgage-backed

                                 obligations          for     which           there        is    no     anticipated              credit       loss       For        the     remainder           of the        firms       retained     interests           the        expected           credit



                                 loss    assumptions               are        reflected            within           the    discount           rate




The preceding                    table        does            not             give          effect                  to     the        offsetting                     benefit             of     other               financial              instruments                            that       are   held    to


mitigate      risks             inherent              in         these                retained                          interests                    Changes                     in      fair      value                  based            on         an        adverse                    variation        in



assumptions                    generally            cannot                     be       extrapolated                                  because                       the        relationship                        of      the        change               in    assumptions                        to    the

change        in        fair     value         is      not            usually                    linear                   In     addition                     the           impact            of              change                  in
                                                                                                                                                                                                                                                   particular                       assumption              is


calculated               independently                           of            changes                             in
                                                                                                                           any              other              assumption                               In
                                                                                                                                                                                                                  practice                   simultaneous                                changes            in



assumptions                    might magnify                       or         counteract                            the         sensitivities                        disclosed                  above




                                                                                                                                                              22


                                                                   GOLDMAN                       SACHS              CO          and SUBSIDIARIES

                            NOTES            TO CONSOLIDATED                                 STATEMENT                       OF FINANCIAL                CONDITION                   Continued




Variable            Interest           Entities




The      firm         in    the       ordinary         course        of        business             retains        interests            in   VIEs      in   connection                with     its   securitization

activities            The        firm also           purchases          and       sells variable              interests           in    VIEs which           primarily             issue     mortgage-backed

securities               CDOs          and      CLOs          in   connection                with       its   market-making                   activities      and           makes          investments               in    and

loans         to   VIEs        that     hold     performing and                   nonperforming                 debt            equity       real    estate        and           other assets             In    addition
the    firm         utilizes       VIEs         to    provide        investors               with       credit-linked             notes       designed            to        meet     their     objectives                 VIEs

generally           purchase             assets by            issuing          debt        and    equity      instruments


The firms                significant           variable        interests              in    VIEs     include        senior          and       subordinated                  debt    interests        in    mortgage-
backed             and     asset-backed                 securitization                 vehicles            CDOs          and      CLOs          loan     commitments                       limited    and        general

partnership                interests            preferred          and         common               stock       interest          rate       foreign        currency               equity      commodity                   and

credit        derivatives              and      guarantees


The firms exposure  to the obligations   of VIEs   is  generally                                                             limited    to    its   interests          in   these     entities       In    the       tables

set forth below the    maximum      exposure    to    loss  for                                                         purchased              and       retained             interests        and        loans            and

investments                 is    the     carrying           value        of     these           interests              In    certain        instances            the        firm    provides         guarantees

including            derivative              guarantees              to        VIEs         or    holders        of          variable        interests       in        VIEs           For     these        contracts

maximum               exposure            to loss       set     forth      in   the        tables       below      is   the      notional       amount        of       such        guarantees             which           does

not    represent             anticipated              losses       and         also        has    not    been      reduced              by   unrealized           losses already recorded                            by     the

firm     in    connection                with        these     guarantees                    As           result        the      maximum             exposure               to     loss    exceeds             the    firms

liabilities        related        to    VIEs




                                                                                                                 23


                                                                                                                 GOLDMAN                                SACHS                                CO           and SUBSIDIARIES

                                                     NOTES TO CONSOLIDATED                                                                         STATEMENT                                      OF FINANCIAL                                    CONDITION                                       Continued




            The              following                  table             sets                forth         total            assets                in
                                                                                                                                                          firm-sponsored                                          nonconsolidated                                     VIEs                  in    which                the           firm       holds

            variable                   interests                    and         other               nonconsolidated                                  VIEs             in     which                  the         firm       holds              significant                           variable                    interests                   and      the

            firms               maximum                           exposure                          to     loss             excluding                     the         benefit                     of       offsetting                   financial                         instruments                             that              are      held      to


            mitigate                     the        risks            associated                          with          these               variable               interests                               In      accordance                          with                amended                          principles                      requiring

            enhanced                           disclosures                           the            following                    table        also           sets                 forth            the          total        assets and                               total            liabilities                     included                in    the

            consolidated                             statement                           of    financial                    condition                related                 to         the firms                     significant                     interests                        in    these                nonconsolidated

            VIEs               The             firm          has        aggregated                               these              nonconsolidated                                      VIEs             based             on         principal                      business                         activity                 as         reflected

            in       the        first      column   The nature of                                                           the       firms               variable                      interests                    can        take           different                           forms as described                                           in   the

            columns                      under maximum  exposure                                                            to      loss


                                                                                                                                                                                                           As_of           December                  2009
                                                                      _________                          _________________
                                                                                                                                     Value          of
                                                                                                             Carrying

                                                                                                                       the        Firms

                                                                                                            Variable                Interests                                                                  Maximum                 Exposure                       to Loss                In     Nonconsolidated                             VIEs

                                                                                                                                                                             Purchased                                     Commitments

                                                                        Assets                                                                                         and              Retained                                       and                                                                                          Loans       and

                                                                          in        VIE                  Assets                       Liabilitie                              Interests                                     Guarantees                                        Derivatives                                      Investments                  Total


                                                                                                                                                                                                         in     millions




                 COOs                                                         $2330                              $82                                                                              82                                                                                                                                                                $82
Mortgage
                                                                                                                                                                                                                                                                                                                t435
CorporatecOOsandcLOs121                                                      21154                               235                                130                                         234                                                                                              804                                                            1038

Real    estate          credit-related                   and

  other    investing                                                           1997                              190                                                                                                                          17                                                                                              173                   190


Total                                                                   $25481                               $507                             $130                                           $316                                           $17                                             $804                                            $173              $1310



          Such amounts                    do   not     represent              the    anticipated              losses         in   connection              with   these            transactions                 because          they     exclude               the        effect       of   offsetting           financial           instruments

          that   are     held       to    mitigate           these      risks



          These        VIEs      are                           financed                              the     issuance             of debt         Instruments              collateralized                  by assets          held      by     the      VIE           Substantially                  alt      assets         held     by the    firm
                                            generally                               through

          related       to    these         VIEs      are     included              in   Total       financial         instruments                owned          at   fair        value           in     the   consolidated              statement                 of      financial         condition



          The    firm        obtains        interests          in    these          VIEs       in   connection              with     making          investments                  In     real     estate          distressed           loans         and         other types                of   debt          mezzanine              instruments

          and                          These         VIEs      are                             financed                             the    issuance         of debt           and            equity       instruments           which          are      either            collateralized                 by    or indexed             to   assets
                 equities                                              generally                                 through

          held                  VIE                                                            and                                          the    firm                      to        these       VIEs              included          in    Total            financial            instruments                 owned           at   fair   value
                 by the                      Substantially              all    assets                    liabilities         held     by                    related                                            are

          and Other Assets and Other                                    liabilities            and       accrued            expenses              respectively               in        the      consolidated            statement              of    financial               condition



          Primarily          consists          of    total    retum          swaps            on    coos         and        CLO5           The     firm    has        generally                 transferred          the    risks      related           to     the       underlying              securities           through

          derivatives           with       non-VIEs


          Includes           $467        million      as     of   December                 2009          related       to    derivative           transactions               to which              the     firm      transferred            assets




                                                                                                                                                                                        24


                                                                          GOLDMAN                                SACHS                              CO          and SUBSIDIARIES

                         NOTES             TO CONSOLIDATED                                                   STATEMENT                                 OF FINANCIAL                                           CONDITION                            Continued




The     following          table      sets        forth        the firms                      total           assets excluding                                   the            benefit              of       offsetting                financial                 instruments                  that

are     held    to     mitigate        the        risks            associated                          with          its    variable                  interests                         in    consolidated                           VIEs                  The             following          table

excludes            VIEs       in   which         the      firm               holds                    majority                  voting              interest                   unless               the         activities                 of      the         VIE           are      primarily

related        to      securitization                   asset-backed                               financings                           or          single-lessee                              leasing                     arrangements                                     For        2009       in


accordance              with        amended               principles                         requiring                   enhanced                       disclosures                                the        following                  table               also          sets        forth    the

total    liabilities        included             in    the         consolidated                              statement                        of     financial                        condition                  related               to     the          firms consolidated

VIEs      The        firm   has       aggregated                        consolidated                            VIEs             based               on         principal                     business                     activity               as      reflected               in    the    first


column



                                                                                                                                                                                              As         of

                                                                                                                                                                                December                       2009

                                                                                                                                                                    VIE                                                       VIE

                                                                                                                                                           Assets                                                    Liabilities


                                                                                                                                                                                        in millions

                                    Real     estate            credit-related                          and
                                                                                                                                                                                                                                                        21
                                      other           investing                                                                                                                      $350                                              $255

                                    Municipal            bond             securitizations                                                                                              679                                               782

                                    CDOs              mortgage-backed                                  and
                                                                                                                                                                                       127                                                   71
                                       other          asset-backed

                                    Total                                                                                                                                    $1156                                               $1108


                                            consolidated                VIE       assets        and      liabilities       are                            after                                      eliminationa              and     include         assets         financed
                                                                                                                                       presented                      intercompany

                                            on        nonrecourse                 basis         Substantially              all    VIE       assets        are     included              in    Total      financial           instruments            owned           at     fair



                                            valu        and Other Assets                          in   the     consolidated                 statement           of       financial           condition



                                            These        VIE                            which      are       collateralized                                                                                                  induded          in     Other       secured
                                                                   liabilities                                                            by the      related            VIE         assets        are    primarily

                                                                   in   the      consolidated                statement           of     financial       condition                and     generally            do     not     provide        for    recourse           to   the
                                            flnancings

                                                          credit        of the         firm
                                            general



                                            These       VIE        liabilities         which       are       partially      collateralized                by    the        related           VIE    assets           are    included         in    Other         secured

                                                                   in   the      consolidated                statement           of     financial       condition
                                            financings



                                            These       VIE        liabilities         are    included          in     Other       secured            financings                 in    the    consolidated                 statement         of    financial          condition

                                            and       generally         do       not    provide        for    recourse            10    the     general         credit         of the         firm




The     firm    did      not        have         off-balance-sheet                                 commitments                                  to     purchase                          or        finance                  any        COOs                    held          by   structured

investment           vehicles         as    of        December                     2009




                                                                                                                                                25


                                                                GOLDMAN SACHS                                    CO         and SUBSIDIARIES

                            NOTES TO CONSOLIDATED                                       STATEMENT                     OF FINANCIAL                      CONDITION                    Continued




Note           Short-Term               Borrowings


As     of   December               2009       short-term               borrowings             were      $67.4         billion        comprised              of    $52.1        billion        included          in    Other
secured          financings            in    the     consolidated                    statement          of    financial        condition           and       $15.3        billion        of      unsecured            short-

term        borrowings             See Note               for information                on     other        secured         financings


The       firm   obtains           unsecured              short-term                 borrowings             primarily        from        Group          Inc        The         firm    accounts              for certain

hybrid       financial          instruments               at    fair      value        under          the     fair    value         option             Short-term              borrowings                that        are    not

recorded          at    fair    value       are recorded                   based        on     the      amount          of     cash       received               plus    accrued              interest        and      such

amounts approximate                         fair   value       due        to    the    short-term            nature        of the        obligations



Note           Long-Term               Borrowings


As     of   December               2009       long-term              borrowings              were       $601         million        comprised               of    $127         million        included          in    Other
secured          financings            in    the     consolidated                    statement          of    financial         condition          and           $474     million           of    unsecured            long-

term borrowings                    See Note               for information                on    other         secured         financings


The       firm    obtains            unsecured            long-term                  borrowings              which         have      various           maturity           dates          primarily           from      third

parties          As    of   December               2009        the      carrying        values         of    these      long-term            obligations                approximated                 fair    value



Subordinated                   Borrowings


As     of    December                2009          the    firm         had       outstanding                 borrowings             of    $5.0         billion      from         Group             Inc       under         four

subordinated                loan      agreements                which            mature         in     2011           In     addition            the     firm       has              $16.6         billion      revolving

subordinated                loan     agreement              with        Group Inc which                        also        matures          in    2011             As     of    December                 2009         $13.3

billion     was drawn              down       under       these         agreements


Amounts borrowed                      under        these        subordinated                  loan     agreements                bear      interest         at          rate    of    LIBOR          plus       .75% per
annum The               carrying       value         of   these         borrowings             approximates                  fair    value



The       subordinated               borrowings             are        with      related        parties         and        are      available          in    computing                net        capital      under        the

SECs          uniform          net    capital        rule            To        the    extent         that     such         borrowings             are       required           for     the        firms       continued

compliance             with     minimum             net    capital         requirements                 they     may         not    be    repaid




                                                                                                               26


                                                                                GOLDMAN                            SACHS                      CO            and       SUBSIDIARIES

                               NOTES TO CONSOLIDATED                                                            STATEMENT                            OF FINANCIAL                      CONDITION                 Continued




Note                Commitments                           Contingencies                                 and       Guarantees


Commitments


The        following             table          summarizes                  the           firms            commitments as                             of     December              2009




                                                                                                           Commitment                       Amount                   Period                                           Total
                                                                                                                                                              by
                                                                                                          of Expiration             as       of      December              2009                             Commitments

                                                                                                                                                           2013-                    2015-                             as   of
                                                                                                                          2011-

                                                                                   2010                               2012                              2014                    Thereafter              December2009
                                                                                _________                         __________                         ________                  __________            _________________
                                                                                                                                                     in    millions
                                                                                __________                        __________                                                   ___________
  Commitments                    to    extend        credit1121                                 100                                                                                                                              100

 Forward            starting          resale        and

        securities           borrowing           agreements                               3030                                                                                                                                  3030
  Forward           starting          repurchase              and

        securities           lending          agreements                                  1879                                                                                                                                  1879
                                      13
  Letters          of   credit                                                                  253                                                                                                                              253

                                                                                                     27
                                                                                                                                                                                                    ______________53
  Other                                                                                                                                                                                     21

Total      commitments                                                               $5289                                        $4                                                    $21                   $5315
                                                                                                                                                                                                    _______________

         Commitments             to    extend    credit      are    presented            net    of   amounts        syndicated         to    third    parties



         Consists       of investment.grade               commercial             lending         commitments


         Consists       of    commitments            under     letters    of    credit         issued      by   various     banks      which         the    firm    provides    to counlerparties   in   lieu   of securities    or cash   to

         satisfy    various      collateral      and      margin      deposit        requirements




Leases               The       firm           has    contractual                   obligations                    under           long-term                  noncancelable                  lease    agreements                   principally         for

office         space             expiring            on       various              dates              through              2027             Certain                agreements            are     subject         to    periodic        escalation

provisions               for      increases                   in    real         estate                 taxes        and          other              charges              Future       minimum             rental          payments             net   of

minimum sublease                                rentals            are    set       forth            below


                                                                                                                                                                                                         As     of

                                                                                                                                                                                                 December             2009

                                                                                                                                                                                                     in     millions

                                                                   2010                                                                                                                                                    79
                                                                   2011                                                                                                                                                    49

                                                                   2012                                                                                                                                                    20

                                                                   2013
                                                                   2014
                                                                   2015-thereafter

                                                          Total                                                                                                                                                        161




                                                                                                                                            27


                                                                                                  GOLDMAN SACHS                                                              CO          and        SUBSIDIARIES

                                     NOTES TO CONSOLIDATED                                                                            STATEMENT                                   OF FINANCIAL                                 CONDITION                         Continued




  Contingencies


 The        firm         is    involved                 in               number                     of judicial                        regulatory                     and               arbitration              proceedings                        concerning                         matters              arising

        connection                                                          conduct                                            businesses                                                                        believes                   based                on                                    available
  in                                       with         the                                               of       its                                                Management                                                                                            currently

  information                    that            the         results                 of      such               proceedings                              in     the             aggregate                   will   not          have                 material                 adverse                  effect       on

 the        firms             financial                condition                             but          may            be           material                  to         the          firms         operating                     results              for     any            particular               period

 depending                      in
                                       part             upon                  the           operating                    results                 for       such                 period              Given          the         inherent                  difficulty              of      predicting             the

 outcome of                    the         firms              litigation                     and          regulatory                        matters                   particularly                   in     cases              or    proceedings                       in       which                substantial

 or     indeterminate                            damages                        or fines                   are sought                            the          firm           cannot            estimate losses                              or      ranges              of       losses               for     cases

 or     proceedings                        where                  there            is       only                reasonable                            possibility that                              loss         may be incurred


  Guarantees


 The           firm      enters                  into         various                       derivative                     contracts                      that              meet the                  definition                 of            guarantee                        under                ASC 460
 Disclosures                    about                derivative                      contracts                          are      not            required                   if   such         contracts                 may be cash                          settled              and           the      firm    has

 no     basis         to       conclude                      it    is    probable                         that          the      counterparties                                  held          at    inception                  the         underlying                  instruments                      related

 to     the       derivative                     contracts                          The             firm           has           concluded                        that             these            conditions                  have             been            met            for certain                   large

 internationally                           active                 commercial                               and            investment                             bank                   counterparties                         and          certain               other               counterparties

 Accordingly                     the            firm     has             not          included                    such                contracts                  in        the      table           below


        the                                                            of                                        the           firm                                         other            financial                                               of      the                                         of    third
 In               ordinary                  course                             business                                                         provides                                                           guarantees                                           obligations

 parties             e.g              standby                          letters               of      credit               that              enable               clients                  to    complete                       transactions                                 These               guarantees

 represent                 obligations                            to     make                 payments                         to           beneficiaries                          if     the guaranteed                             party           fails        to        fulfill           its     obligation

 under               contractual                       arrangement                                  with          that         beneficiary



 The        following                table             sets            forth          certain                   information                           about           the         firms         derivative                 contracts                     that      meet               the       definition          of


       guarantee                 and             certain                 other              guarantees                           as         of        December                          2009          Derivative                    contracts                  set      forth            below           include

 written            equity              and            commodity                               put              options                     written              currency                      contracts                 and           interest                  rate          caps                  floors     and

 swaptions                       See             Note                         for       information                            regarding                        credit              derivative                   contracts                  that          meet              the         definition             of


 guarantee                    which              are         not         included                    below



                                                                                                                                                                  Maximum                      Payout/Notional                          Amount                   by    Period                 of Expirationt1t


                                                                                                          Carrying

                                                                                                           Value           of                                                                       2011-                               2013-                                      2015-

                                                                                                     Net                                                   2010                                     2012                                2014                                Thereafter                               Total
                                                                                                                  Liability


                                                                                                                                                                                                                 in millions

As     of   December                  2009

                                                                                                                  $49                                         $1493                                       $173                                      $85                                       $368                    $2119
Derivatives

Other       financial                                                                                                                                                      25                                                                                                                                                25
                                guarantees



        Such amounts              do       not    represent              the     anticipated               losses         in   connection               with     these           contracts


        Because         derivative          contracts              are      accounted               for    at    fair    value          carrying         value        is     considered         the       best   indication          of payment/performance                            risk    for



        individual       contracts               However                the                       value         excludes              the    effect      of      legal          right    of setoff    that       may   exist        under     an    enforceable               netting
                                                                               carrying

                           and       the    effect      of                      of cash                                          to    credit                        agreements                 These        derivative         contracts          are    risk    managed              together
        agreement                                                 netting                         paid         pursuant                               support

        will   derivative        contracts             that        do    not     meet         the    definition           of                               under           ASC      460 and          therefore         these        amounts          do    not    reflect        the    firms
                                                                                                                                      guarantee

        overall   risk        related      to    its   derivative              activities




                                                                                                                                                                         28


                                                                         GOLDMAN SACHS                                               CO        and SUBSIDIARIES

                             NOTES                  TO CONSOLIDATED                                  STATEMENT                          OF FINANCIAL                          CONDITION                       Continued




 In   the    ordinary               course            of    business                the        firm        indemnifies                  and      guarantees                   certain         service                providers                   such         as

                  and                                                trustees            and                                                                                                        losses             in    connection                  with
clearing                     custody            agents                                          administrators                          against        specified                  potential

their     acting        as an             agent           of     or    providing               services               to       the     firm or        its    affiliates              The      firm          also       indemnifies                    some
clients      against            potential                  losses        incurred               in    the           event         specified           third-party                  service          providers                    including               sub-

custodians              and         third-party                  brokers            improperly                      execute             transactions                 In       addition             the        firm          is         member                 of


payment            clearing               and        settlement networks                             as        well       as    securities           exchanges                    around          the       world           that       may           require

the     firm       to    meet             the        obligations               of        such        networks                   and         exchanges               in       the      event            of      member                  defaults                In


connection              with        its    prime brokerage                          and        clearing               businesses                the     firm        agrees            to     clear          and      settle           on        behalf        of

its   clients      the       transactions                   entered            into       by them               with        other brokerage                      firms        The firms                  obligations                  in    respect           of

such      transactions                    are secured                  by   the      assets               in    the       clients        account            as     well       as any          proceeds                 received                 from         the

transactions             cleared and                      settled       by     the        firm       on        behalf          of the       client     The         firm       is    unable          to      develop              an estimate                  of

the    maximum                 payout               under        these        guarantees                       and        indemnifications                       However              management                        believes                 that    it    is



unlikely        the     firm        will       have        to    make any                 material              payments                under        these         arrangements                          and       no       liabilities              related

to    these        guarantees                       and     indemnifications                         have           been          recognized                in    the        consolidated                   statement                  of       financial

condition          as    of     December                    2009


The     firm      provides representations                                    and         warranties                  to counterparties                     in    connection                 with             variety            of    commercial

transactions                 and          occasionally                  indemnifies                   them               against         potential               losses             caused             by      the      breach                  of    those

representations                     and         warranties               The        firm        may            also        provide           indemnifications                       protecting               against             changes                in    or

adverse           application                  of    certain          U.S      tax        laws       in        connection               with    ordinary-course                       transactions                   such             as    securities

issuances               borrowings                   or derivatives                  In       addition              the     firm       may provide                indemnifications                       to      some            counterparties

to    protect       them            in    the event              additional               taxes are                 owed         or     payments             are withheld                    due         either         to            change            in    or

an    adverse           application                  of certain             non-U.S             tax        laws           These          indemnifications                         generally            are standard                    contractual

terms       and         are entered                       into    in    the        ordinary               course            of       business           Generally                    there are                no     stated                or    notional

amounts            included               in    these            indemnifications                         and         the      contingencies                     triggering           the     obligation                    to    indemnify are
not     expected               to        occur            The        firm      is    unable               to        develop            an      estimate             of       the      maximum                    payout               under           these

guarantees              and         indemnifications                          However                 management                         believes           that        it   is
                                                                                                                                                                                    unlikely           that      the        firm       will      have         to

make any            material               payments                  under         these        arrangements                           and     no     liabilities            related         to   these            arrangements                         have

been      recognized                 in    the       consolidated statement                                    of   financial           condition           as     of        December               2009


Note            Employee                   Benefit              Plans



The       firms          employees                        participate               in        various               Group              Inc      sponsored                    pension              plans              and          certain              other

                                                                                         healthcare                  and                insurance                                                                                                benefits
postretirement                 benefit              plans            primarily                                                  life                             Group Inc                 also        provides              certain

to    former       or inactive                 employees                prior to          retirement



Defined           Benefit            Pension                Plans        and         Postretirement                             Plans



Employees               of    certain               non-U.S            subsidiaries                  participate                 in    various        defined                benefit        pension              plans                These           plans

generally          provide               benefits              based          on     years           of        credited              service         and            percentage                    of       employees
                                                                                                                                                                                                         the                                         eligible

compensation                        Group Inc                    maintains                    defined               benefit            pension        plan         for       most          U.K         employees  As                             of     April

2008        the     U.K         defined               benefit           plan        was         closed              to     new         participants                but       will    continue               to     accrue              benefits              for


existing        participants



Group Inc               maintains                          defined            benefit            pension                   plan        for     substantially                  all    U.S          employees                      hired           prior        to

November                     2003              As     of       November                  2004             this       plan        was         closed         to     new            participants               and        frozen              such         that


existing        participants                   would           not     accrue         any       additional                  benefits            Employees                    of     certain       subsidiaries                     participate                in


various         defined         benefit              pension           plans             In   addition                Group Inc                maintains unfunded                            postretirement                        benefit            plans




                                                                                                                                 29


                                                                    GOLDMAN                        SACHS                 CO            and SUBSIDIARIES

                         NOTES                 TO CONSOLIDATED                                    STATEMENT                      OF FINANCIAL                         CONDITION                          Continued




that                         medical            and        life    insurance                  for       eligible         retirees               and         their     dependents                         covered          under       these
          provide

programs


Defined          Contribution                   Plans



The      firm contributes                 to    Group Inc employer-sponsored                                             U.S          and        non-U.S             defined                contribution              plans



Note            Employee                 Incentive            Plans



Stock          Incentive            Plan


                                                                                                  The Goldman                    Sachs Amended                         and        Restated                 Stock        Incentive         Plan
Group Inc sponsors                              stock        incentive                plan
                                                                                                                                                                                                                stock
SIP            which         provides            for    grants              of    incentive             stock        options                nonqualified                stock               options                       appreciation


rights         dividend            equivalent              rights           restricted             stock           restricted               stock           units     RSUs                    awards             with     performance

conditions           and          other share-based                         awards                In   the     second            quarter              of2003 the SIP was approved by the firms
shareholders                 effective          for grants             after      April            2003         and      was          further          amended and restated effective December

312008

Restricted              Stock           Units        and      Stock              Options


                                          RSUs                                               of    the        firm     under            the          SIP                               in     connection                with     year-end
Group Inc               issues                          to        employees                                                                                    primarily

compensation                  and        acquisitions                  RSUs            are valued               based            on     the          closing        price        of    the         underlying           shares       on    the


date      of                 after       taking        into       account               liquidity
                                                                                                             discount            for       any        applicable            post-vesting                   transfer        restrictions
                grant

Year-end             RSUs          generally           vest        and       deliver          as       outlined        in    the        applicable              RSU agreements                                  All   employee            RSU
                                           that                        is    accelerated                 in    certain           circumstances                       such         as upon                 retirement           death      and
agreements               provide                     vesting

extended            absence               The subsequent                         amortization                 of   the      cost        of      these          RSUs         is    allocated                to    the    firm    by    Group
Inc      Delivery            of    the     underlying               shares              of    common                 stock         is       conditioned                on        the        grantees             satisfying          certain


vesting        and      other requirements                         outlined            in    the       award        agreements


Stock                                           to                                                      vest as        outlined                 in    the    applicable                stock         option       agreement    No
           options           granted                  employees                  generally

                were                           for    the     period             ended            2009          Year-end                options             granted          in       December                  2008 will become
options                      granted
exercisable                                                                                               2010                                  2011         and     January                 2012           Shares         received         on
                        in    one        third       installments                in    January                         January
exercise            cannot         be    sold        transferred                  or   otherwise disposed                             of    until          January      2014                 Year-end              2008        options     will



               on    December                  31 2018                      Year-end               options          granted                in    December               2007                will    become              exercisable            in
expire

                 2011         and                                 November                   24 2017                Shares              received               on    exercise                 of     year-end            2007        options
January                                   expire        on
cannot          be                      transferred               or        otherwise              disposed                 of     until             January          2013              All        employee               stock       option
                        sold
                                           that                        is    accelerated                 in    certain           circumstances                       such         as upon                 retirement           death      and
agreements              provide                      vesting

extended             absence              In                       all       stock       options              expire        on        the       tenth        anniversary                    of     the     grant        date     although
                                                general
                                                                                                                                 under           certain        circumstances                              accordance             with     the
         may be subject                    to     earlier termination                        or    cancellation                                                                                      in
they
terms      of    the    SIP and            the       applicable              stock          option        agreement




                                                                                                                         30


                                                                           GOLDMAN                 SACHS                CO          and         SUBSIDIARIES

                                NOTES            TO CONSOLIDATED                                 STATEMENT                    OF FINANCIAL                           CONDITION                Continued




Note         10     Income Taxes


Effective            November                    29 2003                   GSCo            elected         to     be     taxed            as         corporation                for     U.S        federal            income           tax

                      As              corporation                 for tax                            the       firm     is    subject           to      U.S      federal          and      various            state      and       local
purposes                                                                         purposes
income            taxes on                 its    earnings                 The     firm     is     also        subject         to        taxes       in    foreign          jurisdictions                on       certain         of       its



operations                  The       firm       is     included            with    Group Inc               and         subsidiaries                 in    the consolidated                   corporate               federal          tax

return       as     well         as   the        consolidated/combined                            state     and        local       tax     returns         The         firm     computes               its   tax      liability       as    if




it    were                          tax     return           on            modified         separate            company              basis           and       settles         such        liability
                                                                                                                                                                                                             with     Group Inc
                  filing


pursuant            to      the    tax sharing agreement   To the extent  the firm generates                                                                         tax   benefits          from           losses        it   will     be

reimbursed                 by     Group Inc pursuant to the tax sharing agreement


Deferred            income             taxes           reflect      the      net   tax     effects        of    temporary                differences                 between       the       financial            reporting            and

tax     bases          of       assets           and         liabilities         These       temporary                differences                result         in    taxable         or    deductible                amounts              in


                                                 measured                                                       and          laws        that             be           effect     when            such        differences              are
             years and                 are
future                                                                              the     tax     rates                                        will            in
                                                                           using

expected            to      reverse



Significant            components                      of    the firms deferred                   tax     assets and               liabilities          are     set    forth      below


                                                                                                                                                                                           As     of   December
                                                                                                                                                                                                       2009

                                                                                                                                                                                                  in   millions

                      Deferred             tax    assets

                                Compensation                  and     benefits                                                                                                                                        1650
                                Unrealized             losses                                                                                                                                                           576

                                Other       net                                                                                                                                                                         323

                     Total         deferred            tax   assets                                                                                                                                                   2549


                     Total         deferred            tax   liabilitiest                                                                                                                                               211




                                 Relates    to   depreciation       and     amortization




The      firm      adopted                 amended                accounting           principles           related           to    accounting                 for uncertainty               in    income             taxes as             of

December                          2007             As        of    December                2009         the     firm         did     not        record                liability
                                                                                                                                                                                      related          to     accounting                for


uncertainty                in   income           taxes



All
       years subsequent                           to    and        including         2005         for     U.S     Federal                and     2004          for     New        York      State           and     City       remain

open     to       examination                    by    the      taxing      authorities




                                                                                                                       31


                                                         GOLDMAN                     SACHS                 CO          and SUBSIDIARIES

                    NOTES            TO CONSOLIDATED                              STATEMENT                       OF FINANCIAL                      CONDITION            Continued




Note    11   Transactions                 with    Related             Parties


                                                                                                                                                                                                     of
The                                                                   Group Inc and                                                        normal      course            business      as
                                                          with                                        affiliates            in    the                               of                                     its
       firm enters         into    transactions                                                                                                                                              part

trading      financing           and      general        operations         Amounts                       payable            to          and      receivable      from       such      affiliates         are

reflected    in   the    consolidated             statement            of     financial         condition              as   set     forth      below



                                                                                                                                                                                         As    of

                                                                                                                                                                                December            2009

                                                                                                                                                                                        in   millions

            Assets

            Receivables           from    brokers        dealers            and   clearing        organizations                                                                                      5122
            Receivables           from    customers         and        counterparties                                                                                                                1036

            Securities      borrowed                                                                                                                                                                38714
            Financial      instruments                                under agreements                    to   resell        at   fair    value                                                     13609
                                                 purchased

            Financial      instruments           owned          at   fair    value                                                                                                                   1554

            Other       assets                                                                                                                                                                         954



            Liabilities


            Unsecured            short-term      borrowings             including         the     current         portion of             unsecured      long-term

                  borrowings                                                                                                                                                                        15127

            Payables        to    brokers     dealers       and        clearing      organizations                                                                                                   8614

            Payables        to    customers        and    counterparties                                                                                                                            10434

            Securities      loaned                                                                                                                                                                  62978
            Financial      instruments           sold    under agreements                    to   repurchase                at    fair    value                                                     22521

            Other    secured         financings                                                                                                                                                     51288
            Financial      instruments           sold    but     not        yet   purchased          at    fair    value                                                                               594

            Unsecured            long-term       borrowings                                                                                                                                            139

            Subordinated            borrowings                                                                                                                                                      18250



The firm from time                  to   time      makes             markets         in   debt        issued by                  Group Inc            and      certain    affiliates      Included          in



Financial      instruments               owned      at   fair        value        are $1.2         billion        of    such        issuances




                                                                                                          32


                                                                    GOLDMAN              SACHS            CO         and           SUBSIDIARIES

                          NOTES TO CONSOLIDATED                                        STATEMENT               OF FINANCIAL                      CONDITION          Continued




Note        12    Net        Capital          Requirements


GSCo              is         registered           U.S         broker-dealer            and     futures     commission                    merchant         subject   to   Rule        15c3-1      of   the


Securities             and    Exchange Commission                               SEC       and Rule        1.17           of    the      Commodity Futures Trading                    Commission
which       specify          uniform minimum net capital                               requirements            as defined                for    their registrants        and     also      effectively

require      that            significant          part       of    the    registrants        assets be         kept           in   relatively    liquid    form     GSCo             has    elected      to


compute net capital in accordance    with the  Alternative  Net                                                     Capital             Requirement          as permitted            by Rule     15c3-

   As of December  2009             had regulatory GSCo
                                                     net capital                                                         as defined by Rule                 5c3-1   of   $13.7        billion    which

exceeded   the amount required  by $11.8 billion


Certain          other        subsidiaries              of        GSCo          are     also    subject        to        capital   adequacy requirements promulgated                                   by

authorities             of      the        countries          in        which   they     operate          As        of        December  2009  these  subsidiaries were                                   in



compliance               with     their local          capital          adequacy requirements
As     of    December                  2009        GSCo                  made    computation                   related             to   the     reserve     requirement          for       Proprietary

                                                                                                                    PAIB debits                                                       PAIB     credits
Accounts           of    Introducing              Brokers           PAIB        that    indicated         Companys
                                                                                                         the                     exceeded                                      its



The amount               held         on    deposit      in       the    Reserve       Bank    at   December 2009 was $396 million




                                                                                                          33


ICLWATERHOUsEJWPEPS

                                                                                                                                                                                 PricewaterhouseCoopers                      LLP

                                                                                                                                                                                 PricewaterhouseCoopers                     Center

                                                                                                                                                                                 300      Madison      Avenue

                                                                                                                                                                                 New      York      NY 10017

                                                                                                                                                                                 Telephone           646     471     3000

                                                                                                                                                                                 Facsimile          813      286 6000

                                                                    Report           of Independent                         Accountants




To   the   Partners           of

Goldman              Sachs              Co

In   accordance              with           Rule       17a-5e4                of the       Securities                 Exchange Act                 of    1934        we         have      performed            the

                       enumerated                   below         with       respect           to    the       accompanying                  Transitional             Assessment
procedures
Reconciliation               Form SIPC-7T                          of the          Securities             Investor          Protection             Corporation              SIPC             of     Goldman

Sachs            Co.GSCo                            for     the    period           from March                 28 2009 through December                                    31 2009                  which     were

                  by GSCo the                                                             Exchange Commission
                                                         Securities            and                                                             Financial         Industry              Regulatory
agreed      to

                                                                        Investor           Protection                                                                  the        specified                parties
Authority            Inc and            the        Securities                                                         Corporation             collectively

solely     to    assist the             specified              parties        in    evaluating             GSCo.s                 compliance              with       the        applicable            instructions

of   Form SIPC-7T                  during           the        period        ended December                           31 2009                Management               is    responsible                for


GSCo.s                                            with    those requirements                              This        agreed-upon                 procedures           engagement                      was
                     compliance
                           accordance                    with     attestation             standards                 established              by the American                    Institute           of Certified
conducted             in

                                             The                                                                                                                                     of    those parties
Public     Accountants                                 sufficiency             of    these procedures                        is
                                                                                                                                  solely the            responsibility

                                                                                    we make               no        representation                regarding          the        sufficiency            of the
specified        in this      report               Consequently
                       described                  below        either        for    the                         for      which     this      report      has        been         requested             or    for    any
procedures                                                                                 purpose
other      purpose


The procedures                    we        performed             and        our findings              are          as follows



                                        the                     assessment payments on page                                               items         2B and 2G               of   Form SIPC-7T                    with
                Compared                           listed

                the                               cash         disbursement                record          entries           as follows                 The amount on      $8105806       2B     of
                       respective

                was        paid        in   three        installments               in   the    amounts               of    $150        on    January        14 2009 $8026876 on July

                24 2009                and
                                       $78780 on October                                       16 2009               with   check            number 033307                      180936 and                 wire

                                                                                                                                                  was agreed                     the      canceled           checks
                transfer          number 0837240483   The amount                                                    paid    by check                                       to


                without       differences                      The amount on 2G                           of    $14058242                    was    paid    on       February              26 2010            with

                                              number S06005718910                                   and        the    amount was agreed                        to    the        cash       disbursement
                wire       transfer

                record       without              differences



                Compared                    the    revenues             in line      2a    of       Form SIPC-7T                   in    the      amount       of     $12955280109 to                              the

                                                    on      the                                     worksheet               less   the       period       from November        29 2008                              to
                gross revenues                                     consolidating

                                                       and                         revenue            of the                                      subsidiaries              and        equity         in   earnings
                March  27 2009                                  less     the                                          consolidating

                of    unconsolidated                      subsidiaries                   The        following            reconciling           items were noted                        from the

                consolidating                     work      sheet       to    the        revenues              in   page           line      2a    of    Form SIPC-7T


                                                                                                                    from the consolidating                     working               sheet to the
                                  $63975574                     reduction            of    revenues

                                  revenues                                                2a    of    Form SIPC-7T                      of interest        income                This       reduction          is
                                                          in   page            line


                                  offset                                                   reduction                in   interest       expense
                                                  by        corresponding


                                                                                                               from the consolidating                      working sheet                       to   the     revenues
                                  $9504034                     increase of revenues
                                  in
                                        page              line     2a    of    Form SIPC-7T                         of trading          error      losses


PRICEWATERHOU5ECWPERS

            $22178435                increase         in    revenues                    from the      consolidating            working sheet               to    the

                                                            2a        of    Form SIPC-7T                   related      to   losses      incurred          in   investment
            revenues          in    page            line


            banking        division



   Compared any adjustments                       reported             on         page            items     2b    and    2c    of   Form SIPC-7T                 with       the


   supporting      schedules            and    working            papers as follows

                                                             item 2b4 of Form SIPC-7T in the
            Compared the addition amount reported on page
            amount of $165729078 to   dividend          on short securities reported on
                                                expense
             Schedule 2B.4 provided by GSCo Regulatory Reporting Department There were
            no     differences            noted


                                                                 item 2b     of Form SIPC-7T in the
            Compared the addition amount reported on page
            amount of $5534647    to the net losses from total underwriting   stabilization losses

            reported on Schedule  2B.5   provided by  GSCo     Regulatory   Reporting    Department
            There      were no            differences             noted



            Compared            the       deduction          amount                  reported        on    page          item       2c        of    Form SIPC-7T                  in



            the amount             of    $131891951                        to    commissions               from commodity transactions                               reported          on

            Schedule            2C.1 provided by                           GSCo             Regulatory           Reporting           Department                 There       were

            no differences                noted


            Compared            the       deduction          amount                  reported        on    page          item       2c        of    Form SIPC-7T                  in


            the amount             of    $2864654777                            to   commodity             trading      revenue          reported         on    Schedule

            2C.2 provided                 by    GSCo              Regulatory                 Reporting           Department              There           were no
            differences            noted


            Compared            the       deduction          amount                  reported  on page                   item       2c        of    Form SIPC-7T                  in



            the amount                                                                    commissions floor                                        and    clearance
                                   of    $81251000                    to        total                                        brokerage                                       paid

            to    other    SIPC members                     in    connection                 with    securities         transactions               reported          on

            Schedule            2C.3 provided by                           GSCo             Regulatory           Reporting           Department                 There       were

            no     differences            noted


                                                                           of Form SIPC-7T
            Compared the deduction amount reported on page       item 2c                                                                                                          in


            the amount of $1 02785210 to net gain from securities in investment accounts

            reported       on       the    Schedule               2C.5 provided by                         GSCo          Regulatory            Reporting

                Department There                  were no              differences                noted


                                   the    deduction          amount                                  on    page          item       2c        of    Form SIPC-7T                  in
            Compared                                                                 reported

            the amount             of    $56788489                     to       commissions               from transactions              in   commercial                  paper

                reported   on       the    Schedule               2C.6 provided by                         GSCo          Regulatory            Reporting

                Department              There       were         no        differences            noted


                Compared           the    amount           reported               on      page        item       2c    9i     of    Form SIPC-7T                in    the

            amount         of   $1023553383                           to    total         interest   and     dividend   expense but not in excess                                      of

            total    interest        and       dividend           income                reported      on    the    Schedule 2C.9 provided by
                GSCo       Regulatory             Reporting                 Department                There           were no       differences            noted



                Compared           the    amount           reported               on      page        item       2c     9u    of    Form SIPC-7T                 in   the

                amount     of   $103818443                       to    40%           of   total   margin         interest     reported             on    Schedule

                2C.9ii     provided            by    GSCo                  Regulatory             Reporting           Department               There       were no
                differences        noted


fWCEWATERHOUSEWPERS

   Proved    the   arithmetical               accuracy              of the       calculations                  reflected              in    Form SIPC-7T and                                in    the

   related   schedules            and       working            papers obtained                      in    procedure                         as follows


             Recalculated               the        mathematical                  accuracy                of the          SIPC Net Operating                           Revenues on
                            line       2d     and        the   General Assessment                                         .0025            on
                                                                                                                                         page                    line      2e      of
             page
                                                                                                                                     Form SIPC-7T                       There               were         no
             $8865619024                          and     $22164048                     respectively                 of the

             differences               noted


             Recalculated                   the    mathematical                  accuracy                of the          total       dividend                expense on page                                  line


             2b4           based        off       the    Schedule                2B.4 provided                       by       GSCo                Regulatory               Reporting

             Department                of    $165729078                     by recalculating                         the        sum        of the            monthly dividend

             expense         for       the        period       November                 29 2008                to    March 27 2009 period                                         to        period            12
             No differences                  were noted


              Recalculated                  the    mathematical                                          of the          total       stabilization              losses            on        page                   line
                                                                                 accuracy
             2b            based            off    the    Schedule               2B.5 provided by                             GSCo                    Regulatory           Reporting

              Department               of    $5534647                    by recalculating                      the        sum of           monthly             stabilization                 losses                of


             period          to    period              12 No        differences              were noted


              Recalculated                  the    mathematical                  accuracy                of the          total       revenues                from transactions                           in




             security       futures               products          on     page              line    2c1            based            off    the        Schedule            20.1              provided

              by   GSCo            Regulatory                  Reporting           Department                       of    $131891951                           by recalculating                       the

             sum      of   monthly                commissions               in    commodity                    transactions                     of period             to     period               12 No
             differences               were        noted


              Recalculated                  the    mathematical                  accuracy                of the          total       revenues                from commodities

             trading        revenue               on    page             line    2c             based               off    the       Schedule                  2C.2 provided                          by

             GSCo            Regulatory                  Reporting           Department                       of    $2864654777                              by recalculating                      the         sum
             of    monthly             commodity               trading           revenue            of period                   to    period            12 No         differences                     were
              noted


              Recalculated                  the    mathematical                                          of the          total       commissions                     floor      brokerage                      and
                                                                                 accuracy
             clearance                        to    other      SIPC members                         in    connection                  with        securities           transactions                        on
                                  paid

              page          line       2c               based        off   the     Schedule                    20.3             provided               by    GSCo            Regulatory

              Reporting           Department                   of   $81251000                   by recalculating                            the        sum      of   monthly

             commission                 floor          brokerage           and clearance                       paid        to    SIPC members by counterparty                                                      for


             the    period             to     period          12     No     differences                  were noted


              Recalculated                  the    mathematical                                          of    net gain              from securities                  in   investment
                                                                                 accuracy
              accounts          on      page              line      2c            based         off       the       Schedule                    20.5          provided            by        GSCo
              Regulatory               Reporting Department                             of   $102785210                              by recalculating                  the        sum            of

              monthly        net gain       from securities                        in    investment                  accounts                   for    the     period             to    period                12
              No    differences               were        noted


              Recalculated                  the    mathematical                  of commissions  earned from transactions                                                                                          in
                                                                       accuracy
              commercial               paper           that    mature nine months or less from issuance date on page                                                                                          line


              2c           based            off    the    Schedule               20.6         provided                   by     GSCo                  Regulatory           Reporting

                                       of    $56788489                     by recalculating                         the    sum         of       monthly          period                to        period            12
              Department
              No    differences               were noted


              Recalculated                  the    mathematical                                          of    total       interest             and      dividend            expense                  but not
                                                                                 accuracy
              in   excess         of   total       interest         and     dividend            income                on        page                  line    2c      9i        based              off        the

              Schedule             20.9            provided          by     GSCo              Regulatory                      Reporting                Department                 of

              $1   023553383                       by recalculating                 the      sum          of       monthly            interest           expense             of    period                     to


              period       12          No    differences             were noted


PRICEWATERHOUSECWPEPS

                              Recalculated          the     mathematical                 accuracy            of   40%      of   total    margin             interest     on    page             line



                              2c       9u    based        off    the    Schedule             2C.9ii               provided      by      GSCo                Regulatory         Reporting

                              Department           of    $103818443                    by recalculating              the    sum         of   monthly              margin      interest     of


                              period        to period           12    and   multiplying           the    sum by            40%          No     differences              were noted


                              Recalculated           the    greater         of    line      2c    9i     or       2c 9u           of     $1023553383                         No
                              differences          noted



We     were      not    engaged        to    and    did    not       conduct       an       examination              the    objective             of    which       would      be    the

                                                                                                              Form SIPC-7T                   in   accordance             with       the
expression         of    an     opinion     on      Companys
                                                   the                           preparation            of

applicable        instructions              Accordingly we do                    not     express        such        an    opinion            Had we performed                       additional

                                                                                                                                                   been                        to
procedures              other    matters      might have               come       to   our attention              that    would         have                      reported          you


This    report     is    intended         solely    for    the       information            and use      of the          management                    of   Goldman           Sachs         Co
                         and                                                                                                                 Authority             Inc and        the
the    Securities                 Exchange Commission                            Financial        Industry          Regulatory
Securities        Investor        Protection                                 and            not   intended           to    be and        should             not    be   used      by anyone
                                                        Corporation                    is



other    than these specified                 parties




                                                                                             LLf

PricewaterhouseCoopers                        LLP
February         26 2010


      JCEWATERHOUsEJWPER5

                                                                                                                                                                          PricewaterhouseCoopers                      LLP
                                                                                                                                                                          PricewaterhouseCoopers                    Center

                                                                                                                                                                          300     Madison        Avenue

                                                                                                                                                                          New      York    NY 10017
                                                                                                                                                                          Telephone         646 471        3000

                                                                                                                                                                          Facsimile        813 286        6000




Reportof Independent Auditors on Internal Control Required

By SEC Rule 17a-5 and CFTC Regulation   1.16




To     the    Partners of

Goldman Sachs                           Co

In    planning        and        performing           our audit           of the       consolidated              financial           statements             and     supplemental             schedules

of    Goldman Sachs                           Co     the        Firm           as of and              for the    thirteen        month          period        ended          in   accordance              with

auditing        standards               generally          accepted            in    the    United States            of    America we considered                              the     Firms internal

control       over financial                                    internal            control       as       basis     for       designing             our auditing            procedures             for the
                                             reporting

                 of                            our opinion               on     the    consolidated               financial           statements              but    not     for the                           of
purpose                expressing                                                                                                                                                           purpose

expressing            an        opinion       on    the     effectiveness                  of   the    Firms      internal           control        Accordingly              we     do     not    express
an    opinion         on    the effectiveness                   of the        Firms internal control



Also        as required               by Rule       17a-5g1               of the        Securities         and Exchange                     Commission the                   SEC            we     have

made           study of the practices procedures followed  andby the Firm including  consideration   of control

activities for safeguarding securities   This study included    tests of compliance  with such practices   and
                                                                        in Rule
procedures that we considered relevant      to the objectives   stated           17a-5g in the following

                       the                      computations                  of    aggregate           debits     and     net capital              under         Rule    17a-3a1                 and     the
       Making                    periodic

       reserve required                      by Rule        5c3-3e
                       the quarterly               securities        examinations                     counts      verifications               and      comparisons and                     the
       Making
       recordation               of differences             required           by Rule          17a-13
       Complying                with    the    requirements               for       prompt payment                for securities              under         Section          of    Federal

       Reserve             Regulation               of the       Board         of    Governors            of the    Federal Reserve                     System            and

       Obtaining            and        maintaining          physical            possession              or control        of   all
                                                                                                                                      fully   paid      and       excess        margin securities
       of    customers                as required          by Rule             5c3-3


In    addition        as required              by Regulation                  1.16    of the      Commodity              Futures           Trading          Commission the                  CFTC
we     have     made              study of the practices  and                          procedures           followed           by the         Firm      including          consideration             of

control       activities         for safeguarding   customer                           and       firm    assets      This study included                          tests of    compliance             with

such      practices             and     procedures           that    we        considered              relevant     to    the objectives                stated       in   Regulation             1.16     in


making        the     following



       The     periodic           computations              of    minimum              financial         requirements                 pursuant         to    Regulation           1.17
       The     daily       computations               of    the   segregation                   requirements         of    Section            4da2            of the      Commodity
       Exchange Act and                       the    regulations              there     under and           the     segregation                of   funds based              upon         such

       computations                    and

       The     daily       computations               of    the foreign              futures      and     foreign        options           secured          amount requirements

       pursuant            to    Regulation          30.7 of the              CFTC

The management                        of the    Firm       is                           for establishing             and       maintaining              internal         control      and    the
                                                                responsible
                 and                                referred        to   in    the     preceding          paragraph                  In                this       responsibility            estimates
practices                  procedures                                                                                                     fulfilling

and    judgments                by management                   are required               to   assess the expected                       benefits      and        related        costs of controls


      JRCLWATERHOUsEWPERS


                                          and                                               and to assess whether   those
and     of the    practices        procedures referred     to in the preceding paragraph

                 and                 can  be            to  achieve   the SECs   and the CFTCs above-mentioned
practices               procedures           expected

objectives            Two of the objectives  of internal control   and the practices  and procedures are to provide

                            with     reasonable                 but not        absolute               assurance              that       assets for which                  the      Firm has
management
                            are safeguarded                                     loss      from        unauthorized                 use or disposition                        and     that         transactions               are
responsibility                                                  against

                       accordance                                                           authorization                   and     recorded                                 to                    the    preparation
executed         in                                with      managements                                                                                properly                  permit
                                                                                                                                              Rule    7a-5g and
of financial          statements                in   conformity with                 generally              accepted    accounting principles

Regulation            1.1   6d2             list     additional             objectives          of the        practices  and procedures listed in the preceding

paragraphs


Because          of inherent              limitations             in   internal       control          and       the     practices           and        procedures                referred           to       above
error    or fraud           may occur                and     not       be    detected            Also        projection             of   any    evaluation                of      them        to future             periods

                                                     they may become
is               to the           risk    that                                             inadequate               because             of   changes              in    conditions                or that      the
     subject

effectiveness               of their       design and                  operation          may deteriorate

     control     deficiency               exists       when        the       design or operation                       of         control      does          not       allow      management                    or

                            the     normal            course of performing                        their      assigned              functions to prevent or detect
employees              in


misstatements                on           timely          basis             significant         deficiency             is         control deficiency or combination                                           of control

                           that                            affects          the entitys                       to    initiate        authorize record                         process               or report
deficiencies                       adversely                                                    ability

financial       data        reliably       in      accordance                with    generally           accepted             accounting                principles            such that there                       is   more

than       remote likelihood                       that         misstatement                of the          entitys          financial        statements                 that      is   more than

inconsequential                   will    not    be       prevented           or    detected           by the entitys                   internal        control



                  weakness                                                                                                          of significant                                                that    results        in
     material                              is         significant            deficiency or combination                                                             deficiencies

                                                              that           material           misstatement                  of the financial                statements                 will      not    be
more than               remote likelihood

                  or       detected             by the entitys                internal      control
prevented


Our     consideration                of    internal         control          was     for the          limited                           described             in   the       first      second            and        third
                                                                                                                    purpose

paragraphs             and        would         not       necessarily           identify        all    deficiencies                in   internal        control          that      might be              material

weaknesses                  We      did    not       identify       any       deficiencies             in    internal         control        and        control         activities            for    safeguarding

securities       and         certain        regulated              commodity customer                            and        firm    assets      that         we        consider to be material

weaknesses                  as defined               above


                                                                                                                                                                                                              second         and
We      understand            that        practices           and       procedures              that        accomplish              the      objectives             referred            to    in    the

third    paragraphs                of    this    report       are considered                    by the        SEC           and    CFTC        to       be adequate                  for     their       purposes             in


accordance             with       the     Securities              Exchange Act                  of    1934         the      Commodity               Exchange Act and                               related

                                  that                          and                              that       do     not                             such        objectives                in   all    material
regulations            and                 practices                        procedures                                      accomplish
                                                                                    for    such                               Based on             this       understanding                       and     on our
respects indicate                        material          inadequacy                                  purposes
          we     believe            that    the       Firms         practices             and    procedures were adequate                                    at     December 31 2009                            to       meet
study
the     SECs      and        CFTCs              objectives


This report           is    intended            solely for the               information              and     use      of    management                      the       SEC         the     CFTC               the

Financial        Industry           Regulatory               Authority              and    other        regulatory                agencies         that       rely      on     Rule           7a-5g            under          the


Securities        Exchange Act                       of    1934        and/or       Regulation               1.16      of the       CFTC           in   their regulation                     of    registered

broker-dealers               and         futures          commission                merchants and                      is   not    intended             to   be and          should           not        be    used      by

               other        than these specified                        parties
anyone




                                                                                                     LL1
February         26 2010



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