FOCUS Report Goldman Sachs & Co. Llc

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

Published: 2013-04-10 17:38:05
Submitted: 2013-03-01
Period Ending In: 2012-12-31
scanned.pdf Scanned paper document


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                     Mai roceSSi1CURITlES                                          llIHIII/HIllllhI/IIihIllIllIllhI

                                                                                                                                                              Expires
                            SerfrW
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                                                               ANNUAL AUDITED lt.bI-LJrc                                                                      hours    oer resoonse                    12.00

                                                                    FORM X-17A-5
                                                                                     PART
                         Washington             DC                                               III
                                                                                                                                                                                 ISEC      FILE     NUMBER
                                   402                                                                                                                                           8-         129
                                                                              FACING PAGE
                           Information         Required      of   Brokers and Dealers Pursuant                                        to   Section     17 of the

                                      Securities       Exchange Act                of    1934        and Rule 17a-5                        Thereunder


 REPORT FOR THE PERIOD BEGINNING                                              1/1/2012                      AND ENDING                            12/31/2012
                                                                               MM/DD/YY                                                            MM/DD/YY


                                                                  REGISTRANT                    IDENTIFICATION


 NAME OF BROKER-DEALER

                     Goldman Sachs                  Co                                                                                                                          OFFICIAL       USE ONLY
                                                                                                                                                                                       13-5108880

ADDRESS OF                 PRINCIPAL            PLACE OF BUSINESS                               Do      not         use     P.O Box            No                                      FIRM    ID   NO

                                                                        200 West           Street

                                                                              No     and    Street


                     New    York                                              New       York                                                        10282
                    City                                                      State                                                                 Zip    Code

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

                    Thm               Fvi                                                                                         212 902-1710
                                                                                                                                  Area Code -Telephone            No


                                                               ACCOUNTANT                       IDENTIFICATION


INDEPENDENT                 PUBLIC          ACCOUNTANT                   whose       opinion            is       contained           in this      Report


                     PricewaterhouseCoopers                    LLP
                                                      Name         if   individual      state   last        first   middle        name


                   300 Madison Avenue                                         New       York                                      New      York                        10017
                   Address                                                    City                                                State                                Zip      Code


CHECK ONE

                          Certified    Public       Accountant


                   Iii    Public    Accountant


                   fl     Accountant          not   resident      in     United States                 or    any      of    its
                                                                                                                                   possessions




                                                                  FOR         OFFICIAL           USE ONLY




   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    at the      bureau   of the   exemption      See    section

240 17a.5e2


                                                       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        7-00


This   report contains       check        all      applicable         blanks


           Facing Page


           Consolidated Statement                     of Financial          Condition



           Consolidated Statement                     of Earnings



           Consolidated Statement                     of Comprehensive                   Income


           Consolidated Statement                     of   Changes          in    Partners Capital


           Consolidated Statement                     of   Changes          in    Subordinated           Liabilities



           Consolidated Statement                     of   Cash Flows


           Computation            of Net Capital               Pursuant     to    Rule     5c3-I



           Information        relating        to   the    Possession             or Control    requirements under Rule 15c3-3


                reconciliation         including         appropriate         explanations of the Computation                          of Net Capital

           Under         Rule        15c3-I         and         the    Computation            for        Determination           of     the       Reserve
           Requirements              Exhibit         of Rule 15c3-3



                reconciliation        between            the    audited     and unaudited            Statements           of Financial        Condition

           with    respect      to   methods         of consolidation



          An     Oath    or Affirmation



             copy of the SIPC Supplemental                             Report filed as              separate           document


                report   describing           any    material         inadequacies          found        to    exist   or to   have     existed      since

          the     date of the previous               audit



           Statement         of      Segregation               Requirements          and      Funds           in   Segregation        for   Customers
          Trading        on U.S       Commodity Exchanges

          Statement          of   Secured           Amounts           and        Funds    Held      in    Separate        Accounts          for   Foreign
          Futures and Foreign                 Options           Customers


OATH OR AFFIRMATION



February              28 2013



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
knowledge                    belief                 the    accompanying consolidated financial statements and supplemental schedules
pertaining              to     the      firm        of    Goldman Sachs     Co as of December 31 2012 are true and correct We
further          affirm        that as of December                       31 2012             neither       the    partnership         nor any     Executive Officer              defined       for

purposes               of    this       oath as           members         of    the    Board         of    Directors         members              the
                                                                                                                                            of          Management               Committee
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
proprietary              interest            in   any     account     classified         solely       as that of         customer          except as follows


                  Receivables                      from         and   payables          to      customers             and      counterparties            includes

                  $8390738                        and      $22419458                 respectively               receivable         from     and        payable      to

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


In     addition             pursuant               to    Financial       Industry       Regulatory               Authority     Rule       4140     we     affirm        that    the   attached
consolidated                   financial           statements         and       supplemental               schedules          as     of   December        31 2012              have     been    or

will   be    made            available             to    Executive       Officers       of    The Goldman              Sachs Group               Inc




John Chartres
Chief       Financial               Officer




Subscribed                  and      sworn          before       me

This 28th day                  of    February             2013




LI                                  JOANNE         OLSEN
                      Notary        Public     State of New York
                                  No    010L6159610
                       Qualified        in   Richmond     Couly
                        Term         Expires       Jan 222015


                                                              Washjr.ok   fl
                                                                  402



      GOLDMAN    SACHS        CO AND       SUBSIDIARIES


      Consolidated   Statement   of   Financial   Condition

                As   of   December    31 2012




pwc


                                                              SEC
                                                      Mail
                                                             Processing
                                                             Sectinp

                                                        MAR            O3
                                                      Washington        DC
                                                               402



GOLDMAN SACHS           CO AND     SUBSIDIARIES


Consolidated   Statement   of Financial   Condition
          As   of   December   31 2012


GOLDMAN SACHS                                 CO AND               SUBSIDIARIES
Consolidated                     Statement of Financial                                  Condition


INDEX

                                                                                                                                                                          Page   No

Consolidated           Financial      Statement


Consolidated          Statement      of    Financial       Condition


Notes    to   Consolidated           Statement           of Financial          Condition


Note           Description         of Business


Note           Basis    of   Presentation



Note           Significant        Accounting            Policies



Note           Financial       Instruments         Owned           at   Fair   Value   and   Financial   Instruments Sold   But Not   Yet Purchased   at   Fair   Value


Note           Fair    Value     Measurements


                                                                                                                                                                                 10
Note           Cash     Instruments


                                                                                                                                                                                 14
Note           Derivative        Activities



Note           Fair    Value     Option                                                                                                                                          23


Note           Collateralized                               and                                                                                                                  26
                                      Agreements                    Financings


Note    10     Securitization         Activities                                                                                                                                 29


               Variable       Interest       Entities                                                                                                                            32
Note


Note    12     Other     Assets                                                                                                                                                  35


        13     Short-Term                                                                                                                                                        36
Note                               Borrowings


Note    14                                                                                                                                                                       36
               Long-Term Borrowings

Note    15     Other     Liabilities       and Accrued                                                                                                                           36
                                                                  Expenses


Note    16                                                        and Guarantees                                                                                                 37
               Commitments             Contingencies


               Transactions          with Related                                                                                                                                40
Note    17                                                 Parties



                             Taxes                                                                                                                                               41
Note    18     Income


Note    19     Credit      Concentrations                                                                                                                                        42


        20                                                                                                                                                                       43
Note           Legal     Proceedings


Note    21                       Benefit      Plans                                                                                                                              44
               Employee


Note    22                       Incentive      Plans                                                                                                                            44
               Employee


Note    23     Net                                                                                                                                                               45
                       Capital    Requirements


Note    24                        Events                                                                                                                                         45
               Subsequent


pwc

                                                                        Independent Auditors Report


 To     the     Partners of          Goldman Sachs                      Co

 We      have     audited           the accompanying                  consolidated            statement               of financial             condition         of    Goldman Sachs                          Co
 and     its    subsidiaries              the Firm           as of December                  31 2012


 Managements                       Responsibility                for the Consolidated Financial Statement


                                                      for the                            and                                          of    this      consolidated                financial        statement
 Management               is   responsible                          preparation                    fair    presentation

 in   accordance              with    accounting            principles        generally            accepted           in     the United States of America                                this    includes

 the                                                  and maintenance                  of internal             control           relevant       to    the    preparation               and   fair
        design       implementation
 presentation            of    consolidated               financial     statements            that      are free            from material              misstatement                    whether      due        to

 fraud     or    error


 Auditors           Responsibility


 Our     responsibility              is   to   express an         opinion         on   the    consolidated                   financial         statement          based           on    our audit         We
 conducted          our audit             in   accordance           with    auditing         standards           generally               accepted           in   the   United States                of

 America           Those standards                    require       that    we    plan   and perform the                         audit    to    obtain       reasonable                assurance

 about         whether        the    consolidated            financial       statement             is   free     from material                 misstatement



 An     audit     involves          performing            protedures         to    obtain      audit       evidence               about        the amounts             and        disclosures            in   the

 consolidated            financial             statement          The      procedures          selected           depend             on     our judgment                including            the

 assessment              of   the     risks      of material        misstatement              of    the    consolidated                  financial          statement             whether          due    to

 fraud     or    error        In    making those             risk   assessments we consider                                  internal       control         relevant        to the       Firms

 preparation    and fair presentation of the consolidated financial statement in order to design audit procedures
 that  are appropriate    in the circumstances   but not for the purpose   of expressing an opinion  on the

 effectiveness    of the Firms internal control   Accordingly    we express no such opinion An audit also
 includes   evaluating   the appropriateness   of accounting   policies used and   the reasonableness   of significant

 accounting          estimates                 made   by    management                 as well          as evaluating               the overall             presentation               of the

 consolidated            financial             statement          We    believe        that    the       audit    evidence               we     have        obtained         is    sufficient       and

 appropriate         to       provide            basis for our audit              opinion



 Opinion


 In   our opinion             the consolidated               financial       statement             referred           to    above presents                  fairly     in   all    material

 respects          the financial               position     of   Goldman Sachs                       Co        and         its   subsidiaries          at    December               31 2012          in


 accordance           with         accounting         principles           generally         accepted            in   the United States                     of   America




 February         28 2013




        PricewaterhouseCoopers                    LLP PricewaterhouseCoopers                              Center 300 Madison                         Avenue New York                    NY 10017
           6464713000                          8132866000 www.pwc.com/us


GOLDMAN          SACHS            CO AND         SUBSIDIARIES

Consolidated                         Statement of Financial                                              Condition



in   millions                                                                                                                                                                  As   of   December     2012

Assets

                                                                                                                                                                                                     6085
c.ndcas                   equivalents


                                    gg                                     PY.d          thpurp                                                                                                     31478

Collateralized          agreements

                                  edi.ncludQ$6219                          aue                                                                                                                  177571


     Secu   rities
                       purchased          under    a9reemen                to    rese1                irvalue                                                                                   100204

Rece ivabes            from    brokers        deaers           and    clearing    organizations                                                                                                      7588

        ae                         omers                                        ieides                 $257             fair   vaue                                                                 20541

Financial       instruments          owned        at    fair    value      includes      $32336              DledQed           as   collateral                                                  155216

Other    assets                                                                                                                                                                                      2.412


Total    assets                                                                                                                                                                                $501   .095


Liabilities       and partners             capital




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

                                                                                                                                                                                               $.1916
Collateralized          financings

                                                                                                                                                                                                    73293

                                                                 to                            fair    vaf   ue
                                                                      repurchase         at




                                    dealers       an


                                                       pe
fcrct
Other    liabilities      and     accrued        expenses
                                                                      puriased                air   value


                                                                                                                                                                                                     5452

Total    liabilities                                                                                                                                                                            471520



Commitments                contingencies                and guarantees

        prdprrowings


Partners         capital


.Pane           capta

Accumulated            other      comprehensive                income

Total    partners        capital                                                                                                                                                                     8075

Total    liabilities       and partners                capital                                                                                                                                 $501095




                                                                                                                       statement        of financial   condition
The accompanying                  notes    are    an    integral        part of   this   consolidated


GOLDMAN          SACHS            CO AND          SUBSIDIARIES

Notes to Consolidated                                                Statement of Financial                                        Condition



Note

Description                      of Business


Goldman               Sachs               Co         GSCo                                limited            partnership             Investment                 Management
                                U.S       broker-dealer                         and     futures           commission                The       firm        provides          investment              management                    services        and
registered           as

                                              with                      consolidated                        subsidiaries            offers         investment            products            primarily              through          separately
merchant               together                                its



                                                                                                                       owned        managed             accounts        and     commingled               vehicles           such         as   mutual
collectively                the         firm         is         an         indirectly             wholly
                                                                                                                                    funds      and                      investment                            across
subsidiary           of The        Goldman Sachs Group Inc Group                                                    Inc                                   private                             funds                         all
                                                                                                                                                                                                                                   major        asset


                                                                                                                                    classes        to      diverse       set    of   institutional            and    individual               clients
Delaware              corporation                   The              firm         is             leading               global

                                          securities                 and        investment                                          The      firm         also     offers       wealth         advisory             services             including
investment            banking                                                                           management
firm     that                              wide                            of    financial             services          to         portfolio             management                 and        financial              counseling                 and
                     provides                         range

substantial               and       diversified                      client            base          that         includes          brokerage             and     other       transaction           services         to     high-net-worth

                                                                                                             and                    individuals           and families
corporations               financial             institutions                   governments                             high-

net-worth            individuals
                                                                                                                                    Note

                                                                                                                                    Basis of Presentation
The     firm reports              its    activities             in    the        following             four       business

activities
                                                                                                                                    This     consolidated              statement       of     financial        condition            is
                                                                                                                                                                                                                                          prepared

                                                                                                                                    in    accordance             with    accounting            principles generally                       accepted
Investment                Banking
The      firm        provides                  broad           range             of     investment                 banking
                                                                                                                                    in   the United            States    U.S GAAP and                         include       the accounts             of

services         to              diverse            group              of        corporations                     financial         GSCo                 and     all    other     entities          in    which            the     firm        has

                                                                                                                                                           financial        interest         Intercompany transactions                            and
institutions              investment              funds              and                                          Services          controlling
                                                                                 governments
                                                                                                                                    balances            have    been eliminated
include         advisory           assignments                   with           respect         to      mergers and

acquisitions              divestitures               corporate                   defense             activities          risk

                                                                                                                                    All      references           to    2012         refer     to    the       date        as      the        context
                                                               and                                  and       debt        and
management                  restructurings                                 spin-offs

                underwriting                   of         public                offerings               and         private
                                                                                                                                    requires            December          31 2012 Any                reference             to       future       year
equity
                                                                                                                                    refers    to         year ending           on December               31    of   that    year
placements             including          domestic and cross-border                                      transactions

as    well      as     derivative              transactions                   directly          related           to    these

activities




Institutional               Client Services
The     firm     facilitates            client      transactions                   and        makes          markets          in


fixed        income             equity           currency               and           commodity               products

primarily            with        institutional                 clients            such         as       corporations

financial        institutions                  investment                   funds         and          governments

The    firm also           makes          markets          in        and        clears        client      transactions

on major stock                options          and futures                 exchanges              worldwide and

                     financing             securities                  lending            and           other          prime
provides

brokerage            services       to    institutional                clients




Investing                  Lending
The     firm         invests       in     loans           to     provide               financing             to     clients

These        investments                 and      loans              are      typically           longer-term                 in


nature          The       firm     makes          investments                     directly           and      indirectly


through         funds       that        the    firm       manages                  in    debt          securities         and

loans                      and      private          equity             securities              real        estate        and
             public

consolidated              investment             entities


GOLDMAN            SACHS           CO AND         SUBSIDIARIES

Notes to Consolidated                                           Statement of Financial                             Condition



Note

Significant                    Accounting                        Policies


The      firms significant                  accounting               policies    include     when        and        Consolidation

                                                                                and                      and        The       firm         consolidates                entities              in        which               the      firm           has
how      to      measure           the    fair     value        of     assets           liabilities

                                                                                                                                                                interest             The firm determines                                 whether
when        to     consolidate             an     entity         See    Notes           through           for       controlling             financial                                                                                                        it




                                                                                                                    has                                                                                     in        an
policies         on    fair    value       measurements                 and     below     and Note            11                   controlling              financial                interest                                entity           by       first



                                                                                                                                           whether          the     entity             is         voting              interest          entity         or
for    policies        on consolidation                  accounting           All other     significant             evaluating

accounting             policies are             either        discussed       below     or included           in    variable         interest          entity     VIE
the following               footnotes

                                                                                                                    Voting            Interest              Entities                    Voting                   interest           entities             are

Financial         Instruments            Owned           at   Fair   Value                                          entities        in      which                the         total          equity           investment                  at     risk        is


and    Financial           Instruments           Sold But Not Yet
                                                                                                                    sufficient             to     enable          the            entity           to         finance              its        activities
Purchased             at   Fair    Value                                                          Note

                                                                                                                    independently                 and      ii     the            equity       holders                 have        the        power          to

Fair   Value       Measurements                                                                   Note
                                                                                                                    direct     the     activities          of the           entity      that        most          significantly                 impact

Cash     Instruments                                                                              Note                    economic                                               the obligation                   to       absorb        the losses
                                                                                                                    its                         performance

                                                                                                  Note              of the        entity        and the     right           to    receive          the residual                   returns           of the
Derivative         Activities


                                                                                                                    entity        The       usual       condition                for        controlling                    financial           interest
Fair   Value       Option                                                                         Note
                                                                                                                    in       voting          interest       entity           is
                                                                                                                                                                                   ownership                     of          majority            voting
Collateralized             Agreements            and      Financings                              Note
                                                                                                                    interest         If    the firm has                     majority              voting              interest          in       voting

Securitization             Activities                                                         Note       10         interest                      the                  is    consolidated
                                                                                                                                    entity               entity


Variable         Interest      Entities                                                       Note       11

                                                                                                                    Variable               Interest             Entities                     VIE            is    an       entity        that         lacks
Other    Assets                                                                               Note       12
                                                                                                                    one      or    more of the              characteristics                       of         voting           interest           entity

Short-Term            Borrowings                                                              Note       13                                                                                                                             VIE when
                                                                                                                    The      firm         has      controlling                    financial             interest             in


                                                                                                         14         the firm has                 variable         interest             or    interests                that    provide            it   with
Long-Term             Borrowings                                                              Note

                                                                                                                          the                     to     direct        the         activities               of the VIE                   that         most
                                                                                              Note       15                        power
Other    Liabilities         and    Accrued         Expenses
                                                                                                                    significantly               impact      the     VIEs economic                                performance                   and ii
Commitments                 Contingencies              and      Guarantees                    Note       16
                                                                                                                    the    obligation             to      absorb             losses          of     the          VIE         or     the       right         to


Transactions           with       Related        Parties                                      Note       17         receive          benefits            from       the            VIE        that           could            potentially                 be


Income        Taxes                                                                           Note       18         significant            to    the     VIE        See Note                   11           for    further          information

                                                                                                                    about      VIEs
Credit      Concentrations                                                                    Note       19


Legal    Proceedings                                                                          Note       20                                               Investments                             When             the        firm           does       not
                                                                                                                    Equity-Method
                   Benefit        Plans                                                       Note       21         have                                  financial               interest          in      an     entity         but can             exert
Employee                                                                                                                           controlling

                                                                                                                    significant            influence            over        the entitys                     operating             and        financial
Employee           Incentive        Plans                                                     Note       22

                                                                                                                    policies         the        investment             is        accounted                  for    either                under           the
Net    Capital        Requirements                                                            Note       23
                                                                                                                    equity        method          of     accounting                  or     ii         at    fair       value        by electing

Subsequent             Events                                                                 Note       24         the    fair     value        option         available              under           U.S            GAAP              Significant

                                                                                                                    influence          generally           exists           when        the firm                 owns        20%         to    50%          of


                                                                                                                          Group           Inc     subsidiarys                      common                   stock            or     in-subst4nce

                                                                                                                    common stock


GOLDMAN             SACHS          CO AND            SUBSIDIARIES

Notes               to Consolidated                              Statement of Financial                                                    Condition



In                        the    firm accounts                 for investments                         acquired                   after     between         market               participants                    at     the        measurement                 date
      general

the     fair   value                      became          available               at    fair      value In certain                          Financial         assets        are      marked                 to        bid     prices         and       financial
                            option

               the    firm                       the                       method                of     accounting                   to     liabilities     are   marked           to        offer    prices            Fair value          measurements
cases                             applies                 equity

new      investments               that        are   strategic         in    nature              or closely                  related        do not include             transaction                 costs              See Notes              through             for


to   the   firms principal business                             activities              when            the firm has                        further    information               about         fair    value           measurements

significant               degree          of     involvement                     in     the           cash          flows            or

                                                          when                                                                              Investment                 Banking                       Fees             from         financial           advisory
operations            of the investee                or                cost-benefit                    considerations

        less                                                                                                                                assignments           and        underwriting                    revenues               are     recognized             in
are             significant

                                                                                                                                            earnings         when           the         services                 related           to     the      underlying

                                                                                                                                            transaction        are     completed                under            the terms              of the assignment
Use of Estimates
                           of      this         consolidated                 statement                   of         financial               Expenses associated                    with        such         transactions                 are deferred          until
Preparation

condition            requires          management                to    make            certain          estimates                   and     the     related       revenue            is
                                                                                                                                                                                               recognized                   or      the     assignment             is



                                                                                                                                                               concluded                                              associated            with
assumptions the most important                                              which
                                                                      of                    relate           to    fair        value        otherwise                                    Expenses                                                      financial


measurements                     and    the      provision                 for    losses              that        may             arise     advisory         assignments                     are      recorded                as        non-compensation

from       litigation            regulatory            proceedings                    and        tax    audits                These         expenses           net          of     client             reimbursements                         Underwriting

estimates            and                                  are       based          on       the        best         available               revenues        are presented               net of related                  expenses
                                assumptions

information               but actual           results        could        be materially different
                                                                                                                                            Investment               Management                             The         firm        earns       management

Financial                 Assets               and       Financial                     Liabilities                      at        Fair      fees for investment                   management                      services              Management             fees


Value                                                                                                             value             and             calculated         as                                    of net                        value       invested
                     Financial             instruments                owned                 at    fair                                      are                                    percentage                                 asset


Financial            instruments                              but     not                                                    at     fair               or    commitments                      and      are recognized                     over     the period
                                                sold                             yet        purchased                                       capital


value       are      recorded             at    fair     value        either           under           the         fair       value         that    the related        service          is
                                                                                                                                                                                              provided

option         or    in   accordance             with         other        U.S         GAAP                   In    addition

the     firm         has        elected         to     account              for        certain           of         its           other     Commissions                     and         Fees            The            firm        earns     Commissions

financial            assets        and          fmancial                                                           value                    and     fees    from executing                     and      clearing              client       transactions          on
                                                                    liabilities              at        fair                          by
                                                                 The        fair       value           of           financial               stock                  and       futures           markets Commissions                               and    fees     are
electing        the        fair    value         option                                                                                               options

                            the                                 would             be received                                               recognized         on the day the trade                         is    executed
instrument            is               amount          that                                                        to        sell    an

asset      or paid          to    transfer               liability          in    an     orderly                  transaction


GOLDMAN             SACHS                CO AND            SUBSIDIARIES

Notes              to Consolidated                                        Statement of Financial                                             Condition




Transfers                 of Financial Assets                                                                                                 Receivables                   from and Payables                           to    Brokers                 Dealers

Transfers           of fmancial                   assets          are accounted                      for as          sales     when           and Clearing Organizations
                                                                                                                                              Receivables                  from     and          payables          to        brokers            dealers             and
the firm           has     relinquished                     control            over        the       assets          transferred

                                                       accounted                                                              related         clearing      organizations                  are accounted                for    at      cost     plus       accrued
For transfers of                         assets                                     for        as    sales           any
                                                                                                                                                             which                                                                fair        value           While
              or    losses          are         recognized                    in    net         revenues               Assets         or      interest                           generally           approximates
gains
                                                                                                                                              these    receivables                 and                         are      carried          at    amounts              that
liabilities         that       arise         from           the     firms continuing                             involvement                                                               payables

                                                                                                                                                                                                                  not        accounted               for     at     fair
                                                                    measured                    at     fair          value        For         approximate              fair       value          they     are
with         transferred                  assets            are

                                                                                                                                              value        under           the      fair        value      option            or     at        fair     value          in
transfers           of assets               that       are        not         accounted               for       as     sales         the

                                                                                                                              value           accordance              with        other         U.S       GAAP            and       therefore              are      not
assets        remain           in   Financial instruments                                      owned            at    fair

                                                                                                                                              included       in    the          firms     fair    value    hierarchy              in   Notes                  and
and      the transfer               is    accounted               for         as      collateralized                   fmancing
                                                                                                                                              Had      these          receivables               and     payables          been           included            in      the
with        the related             interest                                                              over        the     life    of
                                                           expense recognized
                                                                                                                                              firms       fair    value                               substantially           all      would          have         been
the    transaction                  See         Note          10        for        further           information               about                                             hierarchy

                                         accounted                for as sales                                                                classified         in level           as of        December          2012
transfers          of    assets




Receivables                    from Customers and Counterparties                                                                              Foreign Currency Translation
                                                                                                                                              Assets and liabilities denominated                                  in    non-U.S               currencies             are
Receivables                 from            customers                    and         counterparties                     generally

                                                                                           Such           receivables                are      translated         at    rates       of exchange             prevailing               on    the date            of the
relate        to     collateralized                        transactions

                                                                                                                                              consolidated                 statement            of    financial         conditioncondition                          and
primarily                comprised                    of     customer                    margin             loans             certain


                                                                   for              secured           loans rather               than         revenues           and                             are     translated           at       average             rates      of
transfers           of    assets          accounted                           as                                                                                            expenses

                            fair                           and     collateral                                   in    connection              exchange           for        the     period            Foreign        currency             remeasurement
purchases            at                  value                                                 posted

                                                                                                                of the firms                                losses          on transactions               in   nonfunctional                   currencies            are
with        certain         derivative                 transactions                        Certain                                            gains or

                                                                                                                                                                      in                        Gains     or     losses       on       translation            of     the
receivables               from customers                         and      counterparties                     are accounted                    recognized                    earnings

                                                                                                                                                                 statements                of           non-U.S                                       when           the
for    at    fair    value          under         the       fair    value           option            Receivables                from         financial                                                                      operation

customers                and                                        not        accounted                  for    at    fair     value         functional         currency            is    other than          the   U.S          dollar        are    included
                                counterparties

            accounted               for          at        amortized                 cost            net        of     estimated              net of    hedges and taxes                    in    comprehensive                   income
are

uncollectible                   amounts.                          Interest                on         receivables                 from

customers            and counterparties                            is    recognized                  over       the    life    of the         Cash and Cash Equivalents
                                                                                                                                              The     firm defines                cash     equivalents            as     highly          liquid       overnight
transaction                     See         Note                   for         further              information                 about

                                                                                                                                                            held           in   the ordinary            course       of business
receivables              from customers                       and counterparties                                                              deposits




Payables to Customers and Counterparties
                    to    customers                  and                                            primarily          consist          of
Payables                                                     counterparties

customer                 credit            balances                related                to        the      firms             prime

                     activities                 Payables           to     customers                  and counterparties
brokerage

are         accounted               for         at         cost                     accrued               interest             which
                                                                    plus

                                                       fair       value             While            these       payables            are
generally            approximates

carried        at    amounts                that       approximate                       fair       value        they        are not

accounted                for   at        fair     value          under             the    fair       value           option      or     at


fair     value       in    accordance                      with    other            U.S GAAP                    and therefore

are not        included              in    the        firms         fair       value           hierarchy              in    Notes

     and            Had        these            payables           been            included            in    the       firms         fair


value         hierarchy              substantially                      all    would            have        been           classified


in    level         as     of December                      2012


     GOLDMAN          SACHS           CO AND       SUBSIDIARIES

     Notes            to Consolidated                              Statement of Financial                                       Condition



     Recent          Accounting                 Developments
     Reconsideration                            of             Effective                      Control                 for        Disclosures                  about Offsetting                  Assets and               Liabilities


     Repurchase                    Agreements                 ASC 860                    In    April       2011       the        ASC 210                 In    December             2011    the       FASB      issued        ASU No
--

     FASB         issued           ASU       No     2011-03              Transfers                 and     Servicing             2011-il          Balance             Sheet     Topic 210                     Disclosures            about


     Topic          860               Reconsideration                    of     Effective            Control           for       Offsetting         Assets           and      Liabilities ASU                 No        2011-li            as


     Repurchase               Agreements                 ASU            No      2011-03              changes          the        amended           by     ASU         2013-01          Balance           Sheet         Topic         210
                            of effective          control                                            the                                            the                  of    Disclosures        about        Offsetting           Assets
     assessment                                                    by removing                                 criterion         Clarifing                    Scope

     that                     the transferor            to    have       the                  to                           or    and      Liabilities           requires        disclosure       of    the    effect     or    potential
            requires                                                           ability             repurchase

     redeem          financial         assets       on                                  the                       terms          effect      of    offsetting          arrangements              on     the     firms          fmancial
                                                              substantially                        agreed

     even      in    the      event      of default                     the    transferee            and        ii    the        position     as    well       as    enhanced        disclosure        of the     rights       of    setoff
                                                               by
     collateral           maintenance             implementation                     guidance             related          to    associated         with       the    firms recognized                derivative        instruments

     that    criterion             ASU       No      2011-03             was      effective              for    periods          including           bifurcated               embedded            derivatives                repurchase

                           after    December                 15 2011            The      firm        adopted          the        agreements          and reverse repurchase                     agreements             and    securities
     beginning

     standard         in     December           2012 Adoption                     of    ASU No                 2011-03           borrowing          and        lending         transactions            ASU       No      2011-11           is



     did not        affect    the     firms financial condition                                                                  effective        for    periods       beginning           on    or   after    January               2013
                                                                                                                                 Since       these        amended              principles        require        only         additional

     Amendments                       to      Achieve                    Common                    Fair          Value           disclosures            concerning            offsetting        and    related     arrangements
     Measurement                    and Disclosure                        Requirements                         in  U.S           adoption         will   not    affect        the   firms fmancial            condition

     GAAP            and IFRSs               ASC 820                      In    May 2011                  the     FASB
     issued       ASU         No       2011-04               Fair        Value         Measurements                   and

     Disclosures              Topic           820                       Amendments                   to        Achieve

     Common                  Fair        Value           Measurement                      and             Disclosure

     Requirements              in   U.S      GAAP             and       IFRSs ASU No                           2011-04

     clarifies        the     application          of existing                fair     value        measurement

     and     disclosure               requirements                  changes             certain           principles

     related         to     measuring             fair       value        and          requires           additional

     disclosures           about      fair   value       measurements                   ASU No                 2011-04

     was    effective         for     periods      beginning              after      December              15 2011
     The     firm adopted              the standard                in   December              2012 Adoption

     of     ASU       No       2011-04            did        not    materially            affect          the       firms

     financial condition


GOLDMAN              SACHS              CO AND      SUBSIDIARIES

Notes to Consolidated                                            Statement of Financial                                   Condition



Note

Financial                    Instruments                         Owned                  at Fair Value

and             Financial                     Instruments                       Sold                But        Not
Yet Purchased                                   at Fair Value


                                                                                               and                          further        information        about        the             value                       The    table
Financial             instruments                owned           at     fair     value                  financial                                                                 fair                 option

instruments                                                                             at    fair     value     are        below                      the   firms        financial        instruments          owned        at    fair
                           sold but              not     yet     purchased                                                             presents

                                             value       either        under the                   value                                                 those                        as    collateral          and      fmancial
accounted              for     at    fair                                                 fair               option         value          including                   pledged

or    in   accordance                    with     other        U.S      GAAP                 See      Note       for        instruments           sold but not yet purchased                      at   fair    value




                                                                                                                                                             As   of   December        2012

                                                                                                                                                                                      Financial        Instruments        Sold
 in   millions                                                                                                             Financial        Instruments      Owned                           But Not Yet Purchased


 Commercial             paper           certificates     of deposit      and     other       money market
         instruments                                                                                                                                              2440

 U.S government                     and   federal                                                                                                             88020                                                     16866
                                                       agency     obligations


 Non-U.S                                   and                                                                                                                    3345                                                       915
                     government                   agency       obligations


 Mortgage            and     other       asset-backed          loans    and    securities


         Loans       and     securities         backed     by commercial           real      estate                                                               2321

         Loans       and     securities         backed     by    residential     real     estate                                                                  4042

 Bank      loans                                                                                                                                                    484


 Corporate           debt      securities                                                                                                                         8552                                                   2915

 State     and       municipal           obligations                                                                                                              2446

 Other        debt                                                                                                                                                  888
                      obligations


                 and       convertible          debentures                                                                                                    34494                                                      8979
 Equities


 Derivatives                                                                                                                                                      8184                                                   7379

 Total                                                                                                                                                   $155216                                                       $37057

                                                                                                                          and                                                    basis     when                        of setoff
     Net   of   cash       collateral       received      or   posted    under     credit support            agreements         reported     on    net-by-counterparty                                 legal   right



     exists     under an         enforceable           netting   agreement


GOLDMAN             SACHS             CO AND          SUBSIDIARIES

Notes to Consolidated                                               Statement of Financial                                                 Condition



Note

Fair Value                       Measurements

The         fair    value         of           financial          instrument               is    the         amount              that       The      fair   value       hierarchy            is    as   follows

would         be received              to      sell   an    asset or paid                to     transfer                  liability

                                                                                                                                            Level                 Inputs           are      unadjusted                      quoted            prices         in     active
in     an    orderly            transaction           between              market participants                              at     the
                                                                                                                                            markets         to   which         the firm           had        access           at   the      measurement                 date
measurement                    date         Financial             assets        are   marked                to    bid       prices
                                                                                                                                            for                        unrestricted              assets or              liabilities
                                                                                                                                                   identical
and financial                  liabilities        are      marked          to     offer prices                    Fair value

measurements                     do       not     include           transaction                 costs                The         firm
                                                                                                                                            Level               Inputs       to    valuation            techniques                   are     observable             either

measures                certain       financial            assets        and      financial               liabilities            as
                                                                                                                                            directly        or indirectly

portfolio               i.e      based          on    its        net     exposure               to    market and/or

credit       risks                                                                                                                          Level                One         or     more          inputs           to       valuation             techniques             are

                                                                                                                                            significant          and unobservable

The      best evidence                    of   fair   value         is      quoted              price           in   an     active

market                                                in    active         markets              are not              available              The      fair      values         for     substantially                            of     the      firms fmancial
                   If   quoted         prices                                                                                                                                                                           all



fair     value           is    determined             by         reference            to      prices             for      similar           assets       and     financial           liabilities             are       based         on      observable             prices

                                                                                                                                            and                  and                                                               and         of the        fair   value
instruments                   quoted prices or recent transactions                                          in less         active                   inputs              are       classified           in    levels


                    or                                                     models             that                                 use      hierarchy            Certain            level           and            level              fmancial           assets         and
markets                       internally          developed                                               primarily

market-based                    or independently                    sourced           parameters                     as     inputs          financial            liabilities             may            require                 appropriate                  valuation

                        but not limited                       interest                                                                                             that            market                                      would          require         to    arrive
including                                             to                        rates          volatilities                 equity          adjustments                                            participant

or     debt                                                                                                                                 at    fair    value        for     factors       such            as     counterparty                  and    the        firms
                   prices           foreign           exchange             rates           commodity                       prices

credit                              and        funding            spreads             i.e            the         spread               or    credit       quality        funding            risk     transfer                restrictions              liquidity         and
              spreads

                          between              the    interest           rate       at     which                     borrower               bid/offer                             Valuation             adjustments                    are generally                based
difference                                                                                                                                                     spreads

could         finance                  given          financial            instrument                     relative            to            on market evidence

benchmark                interest         rate
                                                                                                                                            See      Notes             and           for     further information                              about       fair      value


U.S          GAAP               has             three-level                fair       value               hierarchy                for      measurements                     of        cash             instruments                         and         derivatives

disclosure                of      fair      value           measurements                         The             fair        value          respectively                included            in     Financial                   instruments               owned            at


                                                            to     the     valuation                                          used          fair     value             and        Financial              instruments                       sold       but         not    yet
hierarchy               prioritizes            inputs                                            techniques

     measure              fair      value                         the highest                                     to      level                                   at    fair      value           and        Note              for         further      information
to                                                giving                                      priority                                      purchased
              and        the     lowest                            to    level             inputs                     fmancial              about        fair    value        measurements                        of     other        fmancial           assets         and
inputs                                           priority

instruments                   level    in      the    fair       value                               is    based on the                     financial          liabilities          accounted                for       at     fair    value          under        the   fair
                                                                            hierarchy

lowest         level           of     input       that       is
                                                                    significant                 to        its    fair        value          value        option

measurement


GOLDMAN            SACHS           CO AND               SUBSIDIARIES

Notes             to Consolidated                                     Statement of Financial                                     Condition



Financial             assets      and        financial          liabilities          accounted         for    at     fair                U.S GAAP           are   summarized          below

value      under the             fair       value         option      or   in    accordance           with      other




  in    millions                                                                                                                                                                                          As   of   December           2012

Total    level         financial       assets                                                                                                                                                                                      91376

Total    level         financial       assets                                                                                                                                                                                     250972

Total    level         financial       assets                                                                                                                                                                                          5303

Cash     collateral       netting                                                                                                                                                                                                  1442
Total    financial       assets        at   fair    value                                                                                                                                                                        $346209

Total    assets                                                                                                                                                                                                                  $501095

           v3etape                                               centage        of   Iota       sse




Total    level         financial       liabilities                                                                                                                                                                                 25822

Total    level         financial       liabilities                                                                                                                                                                                209.318

Total    level         financial       liabilities                                                                                                                                                                                     1203

Cash     collateral       netting                                                                                                                                                                                                        56
Total    financial       liabilities        at   fair   value                                                                                                                                                                    $236287

Total    level         financial       liabilities       as     percentage           of Total   financial    liabilities    at   fair   value                                                                                          0.5%


   Represents             the   impact           on     derivatives     of   cash      collateral     netting        Netting     among          positions   classified   in   the   same   level   is   included     in   that   level




See      Notes                    and              for      further    information                about      level                      financial     liabilities    accounted         for   at fair     value      under        the   fair


cash      instruments                  derivatives              and    other          financial       assets       and                  value     option     respectively


GOLDMAN SACHS                        CO AND      SUBSIDIARIES

Notes            to Consolidated                              Statement of Financial                                  Condition



Note

Cash Instruments

Cash          instruments                include        U.S           government                and     federal           Valuations           of     level            cash         instruments              can        be    verified          to


agency           obligations                   non-U.S           government                  and        agency            quoted     prices          recent          trading        activity      for        identical            or similar

obligations               bank       loans corporate             debt    securities             equities      and         instruments           broker           or dealer quotations                  or     alternative             pricing

convertible                debentures            and      other        non-derivative                 fmancial            sources        with             reasonable               levels        of        price         transparency

instruments               owned and             financial       instruments           sold but not yet                    Consideration              is     given       to    the     nature      of       the     quotations              e.g
purchased                      See    below       for     the    types         of    cash       instruments               indicative          or     firm         and        the     relationship              of       recent        market

included             in    each        level    of the        fair     value        hierarchy          and     the        activity       to     the         prices          provided            from         alternative              pricing

valuation            techniques            and significant             inputs       used     to     determine             sources

their    fair        values            See Note            for an        overview            of the firms

fair    value        measurement                policies                                                                  Valuation           adjustments               are        typically          made         to    level              cash

                                                                                                                          instruments                     if   the    cash         instrument          is    subject           to    transfer

Level            Cash Instruments                                                                                         restrictions         and/or            ii         for     other       premiums                 and        liquidity

Level                     cash          instruments             include             U.S         government                discounts       that            market participant                    would        require          to    arrive      at

                           and        most       non-U.S              government                obligations                                                                                                                        based
obligations                                                                                                               fair    value        Valuation               adjustments               are        generally                           on

actively         traded              listed    equities         certain        government               agency            market evidence
                               and                      market           instrwnents                     These
obligations                             money
instruments                 are      valued       using         quoted         prices        for      identical           Level          Cash Instruments
unrestricted              instruments           in   active     markets                                                   Level           cash            instruments               have        one     or        more            significant


                                                                                                                          valuation       inputs          that    are not observable                         Absent          evidence           to


The     firm         defmes          active     markets         for    equity       instruments            based          the contrary              level            cash         instruments         are     initially            valued       at


on     the                                                volume         both        in   absolute         terms          transaction                          which         is    considered          to     be    the       best      initial
              average             daily       trading                                                                                          price

and     relative           to     the    market capitalization                  for       the     instrument              estimate       of     fair        value            Subsequently                  the      firm       uses        other

The firm defmes active                          markets       for debt     instruments                based     on                                    to       determine            fair    value      which            vary        based       on
                                                                                                                          methodologies

both     the average                 daily trading        volume         and the number                 of    days        the type       of instrument                  Valuation            inputs         and     assumptions              are

with     trading           activity                                                                                       changed             when             corroborated                by     substantive                  observable


                                                                                                                          evidence            including              values         realized          on      sales          of     financial


Level            Cash Instruments                                                                                         assets

Level                     cash        instruments           include            commercial                paper

certificates              of     deposit       most     government              agency          obligations

certain       non-U.S                                    obligations            most corporate                debt
                                     government

securities                certain        mortgage-backed                 loans            and       securities

certain        bank            loans      restricted       or     less    liquid          listed      equities

most         state        and        municipal          obligations            and        certain      lending

commitments




                                                                                                                     10


GOLDMAN             SACHS               CO AND           SUBSIDIARIES

Notes to Consolidated                                                     Statement                             of Financial                                       Condition



The      table           below                                  the   valuation                                                    and          the                         fair     values                of each                           of     level                cash         instrument
                                           presents                                         techniques                                                                                                                         type

nature         of significant                      inputs        generally           used             to        determine                       the



 Level         Cash        Instruments                                      Valuation            Techniques and                            Significant                   Inputs

 Loans           and                                  backed                Valuation                                                                                                                                                                                    flow
                               securities                             by                         techniques                  vary        by instrument                   but        are   generally            based           on discounted                   cash               techniques

 commercial            real    estate                                                                                                                                                                                                                    and
                                                                            Significant           inputs              are generally              determined                    based       on      relative          value          analyses                    include

      Collateralized              by        single     commercial                                                                   both                      collateral                              and     instruments              with        the     same         or     similar                               collateral        and
                                                                                Transaction                     prices
                                                                                                                              in            the underlying                                                                                                                                underlying
      real     estate         property        or        portfolio     of                                                                       to such
                                                                                the basis              or       price        difference                  prices

      properties
                                                                                Market                                                    transactions                 of     similar      or     related          assets           and/or         current         levels       and     changes           in       market        indices
                                                                                                 yields           implied           by
      May      include         trariches      of     varying     levels
                                                                                such        as the              CMBX an               index       that        tracks          the    performance                   of    commercial                mortgage             bonds
      of    subordination
                                                                                                                                         by the value
                                                                                                       rates                                                        of      the underlying                  collateral          which         is    mainly         driven         by current         performance                  of   the
                                                                                Recovery                               implied

                                                                                underlying                 collateral              capitalization               rates          and     multiples


                                                                                Timing           of    expected               future       cash       flows            duration


 Loans           and                                  backed                Valuation                                                                                                                                                                          cash      flow
                               securities                             by                         techniques                  vary        by instrument                   but        are   generally            based           on    discounted                                   techniques

 residential        real      estate
                                                                                                                        are                           determined                     based            on      relative          value                                 which                      comparisons                              to
                                                                            Significant               inputs                       generally                                                                                               analyses                                incorporate
      Collateralized                                                  of    instruments               with        similar           collateral        and           risk      profiles          including           relevant          indices   such               as    the      ABX an    index that tracks                          the
                                       by          portfolios

      residential          real    estate                                   performance                    of   subprime              residential              mortgage              bonds               Significant            inputs        include


               include        tranches        of     varying     levels         Transaction                                         both the         underlying                collateral             and     instruments              with        the     same         or   similar      underlying                collateral
      May                                                                                                       prices        in



      of    subordination                                                       Market           yields          implied            by transactions                    of     similar      or     related          assets


                                                                                Cumulative                      loss        expectations                 driven               by     default           rates            home         price         projections                 residential          property              liquidation

                                                                                timelines             and        related            costs


                                                                                Duration              driven                                          loan prepayment                       speeds             and       residential           property            liquidation           timelines
                                                                                                                        by underlying


 Bank       loans                                                           Valuation                                                                                                                                                                                    flow
                                                                                                 techniques                  vary        by instrument                   but are          generally            based           on    discounted                cash               techniques

                    debt      securities                                                                               are                           determined                 based           on     relative          value               which    incorporate     comparisons      both to
 Corporate                                                                  Significant            inputs                     generally                                                                                            analyses
                                                                                                                                                      the same                                                      similar                   instrument                and    to  other debt
 State and                                                                  prices     of        credit          default       swaps that reference                                                           or                  underlying                or entity
                  municipal            obligations
                                                                            instruments                for       the        same issuer  for which  observable                                                            or    broker quotations    are available       Significant    inputs
                                                                                                                                                                                                            prices
 Other debt         obligations                                             include

                                                                                Market                            implied           by     transactions                  of    similar       or       related           assets       and/or         current           levels      and     trends         of        market       indices
                                                                                                 yields

                                                                                such        as     CDX                LCDX          indices          that      track          the performance                      of    corporate            credit       and        loans        respectively                and        MCDX an
                                                                                index       that       tracks            the performance                       of    municipal            obligations

                                                                               Current                                              and                                                         and         where         the       firm     uses         credit        default                     to    value         the      related
                                                                                                  performance                               recovery                assumptions                                                                                                         swaps
                                                                               cash         instrument                   the cost          of    borrowing               the underlying                    reference            obligation


                                                                                Duration



 Equities
                    and        convertible             debentures           Recent          third-party                 completed               or    pending               transactions                 e.g            merger        proposals                tender          offers        debt    restructurings                    are

 including        private         equity    investments                     considered                to    be        the    best evidence                    for    any       change            in    fair    value           When          these         are not available                  the    following               valuation

                                                                            methodologies                       are     used         as appropriate


                                                                                Industry           multiples                 primarily           EBITDA              multiples             and        public       comparables

                                                                               Transactions                      in    similar        instruments

                                                                                Discounted                  cash         flow       techniques


                                                                               Third-party                  appraisals

                                                                            The      firm     also          considers                                           the         outlook        for     the        relevant                             and         financial         performance                  of    the      issuer     as
                                                                                                                                     changes             in                                                                     industry

                                                                            compared             to    projected                   performance                  Significant               inputs         include

                                                                               Market            and        transaction               multiples


                                                                                Discount                                                                    rates                                                        annual                          rates     and                                   rates
                                                                                                      rates            long-term           growth                           earnings            compound                              growth                                 capitalization


                                                                                For    equity              instruments                   with     debt-like              features               market          yields         implied         by        transactions              of    similar         or        related      assets

                                                                               current                                             and     recovery            assumptions                   and         duration
                                                                                                 performance




                                                                                                                                                              11


GOLDMAN                SACHS              CO AND            SUBSIDIARIES

Notes                  to Consolidated                                        Statement                         of Financial                            Condition



Significant                     Unobservable                             Inputs

The            table            below               presents                  the         ranges               of      significant                          instrument               For     example              the highest                 multiple           presented          in   the

unobservable                       inputs           used         to      value           the         firms          level               cash                table      for       private      equity         investments                  is    appropriate              for    valuing

instruments                         These                ranges                represent                     the       significant                                  specific           private          equity           investment                    but         may          not        be

unobservable                       inputs         that          were         used        in     the valuation                 of        each                appropriate               for     valuing         any other                  private           equity       investment

             of cash           instrument                       The                          and      weighted                                              Accordingly                     the                   of    inputs                presented            below        do       not
type                                                                     ranges                                             averages                                                               ranges
of these              inputs        are not representative                                of the appropriate inputs                                         represent             uncertainty                in    or    possible                ranges            of      fair     value

to      use           when          calculating                  the         fair        value   of any one cash                                            measurements                    of the     firms         level               cash     instruments



                                                                                                     Level          Assets as            of                                                                             Range            of Significant              Unobservable
                                                                                                        December              2012                  Significant           Unobservable              Inputs              Inputs Weighted                         Average1        as    of

     Level            Cash     instruments                                                                    in    millions                        by    Valuation         Technique                                   December   2012

     Loans       and     securities            backed           by     commercial                                     806                           Discounted            cash    flows

     real   estate
                                                                                                                                                         Basis                                                           13         points       to   18    points         points
        Collateralized              by         single       commercial                real


        estate        property          or     portfolio         of    properties


        May       include          tranches         of     varying           levels       of

        subordination


     Loans        and        securities         backed           by     residential                                   791                           Discounted            cash    flows

     real   estate
                                                                                                                                                         Yield                                                          4.1%        to        15.4%    6.9%
        Collateralized                                            of    residential
                                     by       portfolios
                                                                                                                                                         Cumulative           loss   rate                               0.0%        to    61.6%        15.3%
        real    estate

                                                                                                                                                         Duration      years                                            1.8    to    5.5       3.4
                  include          tranches         of                       levels      of
        May                                                varying
        subordination




  Bank         loans                                                                                                $2710                          Discounted          cash       flows


  Corporate             debt       securities                                                                                                            Yield                                                          0.6%        to    29.3%        9.7%
  State        and     municipal             obligations                                                                                                 Recovery         rate                                          0.0%        to    700%         56.6%
  Other        debt     obligations                                                                                                                      Duration      years                                            0.5    to    15.5       4.8



  Equities               and              convertible                  debentures                                    622                           Comparable              multiples

  including            private equity             investments
                                                                                                                                                         Multiples                                                      2.8x    to       8.lx    7.Ox
                                                                                                                                                   Discounted          cash       flows


                                                                                                                                                         Discount      rate                                             10.0%            to   18.0%        13.7%


     Weighted            averages             are     calculated              by    weighting           each        input     by    the      relative     fair   value      of the      respective       financial        instruments


     The       fair    value       of    any one           instrument              may be determined                    using           multiple        valuation      techniques                 For example           market            comparables              and     discounted

     cash       flows        may be used               together           to    determine             fair    value         Therefore             the    level       balance         encompasses              both      of these              techniques

     Duration           is    an    estimate          of the           timing       of    future      cash      flows       and         in    certain      cases       may        incorporate          the    impact      of other              unobservable             inputs      e.g
     prepayment                speeds

     Recovery            rate       is        measure             of    expected               future        cash     flows        in        default      scenario          expressed             as     percentage             of       notional          or face      value       of   the

     instrument and                     reflects      the       benefit        of credit        enhancement                 on     certain        instruments




Increases              in     yield           discount                rate      capitalization                  rate        duration                        Due      to    the    distinctive           nature         of each                of the firms            level          cash

or     cumulative                   loss       rate        used         in     the        valuation             of the firms                                instruments               the     interrelationship                     of        inputs       is    not necessarily

level             cash         instruments                      would          result           in       lower          fair       value                   uniform within                    each      product         type
measurement                         while           increases                 in                              rate      basis                or
                                                                                      recovery

multiples               would             result           in          higher            fair    value         measurement




                                                                                                                                                   12


GOLDMAN            SACHS           CO AND         SUBStDLARIES

Notes to Consolidated                                          Statement of Financial                                    Condition



Fair      Value           of Cash            Instruments                   by Level
The       tables         below                                               within       the      fair    value              Financial instruments                                owned           at    fair       value          and       Financial
                                       present           by      level


hierarchy           cash         instrument          assets       and       liabilities      at    fair    value              instruments                sold           but         not      yet        purchased                 at     fair       value

Cash         instrument                assets        and       liabilities            are     included          in            respectively



                                                                                                                             Cash Instrument Assets                           at   Fair    Value        as    of   December              2012


in    millions                                                                                                                  Level                                 Level                                   Level                                   Total


Commercial              paper    certificates       of deposit        and     other   money market
     instruments                                                                                                                                                        2440                                                                         2440

                                                                                                                                     7646                              50      74                                                                   8802
Y.921.me
                                                                                                                                      728                               2617                                                                         3345
                                                 geniobiigations

Mortgage          and    other    asset-backed           loans       and    securities


                                                                                les                                                                                           515                                                                    232

         secs
                                                ckedbyco                                     te


                                                                                                                                                                        3251                                                                         4042
                                                abyresidiairealestate
                                                                                                                                                                            406                                          78                            484
Bank      loans


Corp      ratedeb           ecurities

                                                                                                                                                                        1845                                            60                           2446

        i.gations                                                                                                                                                             26                                        652                            888

             and        convertible      debentures                                                                                 32065                               1807                                            622                         34494
Equities

Total                                                                                                                          $70443                                 $71660                                      $4929                           $147032




                                                                                                                         Cash        Instrument              Liabilities           at Fair   Value           as    of   December             2012

in    millions                                                                                                                  Level                                 Level                                   Level                                   Total


                                                                                                                                                                              419
             emment and               fed era       gPgations                                                                  $16447                                                                                                               1686
                                                                                                                                                                                                                                                        91
PniYS.90                               an       agency    obligations                                                                 505                                     10
Bank      loans


Corp      mtedeb             res                                                                                                          29                            25                                                                           z915
       teandm           nicipaobli9ations

             and        convertible      debentures                                                                                  8839                                     140                                                                    8979
Equities

Total                                                                                                                          $25820                                   3857                                                                        29678


      Includes      $489      million       and   $446     million of collateralized              debt    obligations        CDOs     backed            by    real    estate        in   level     and       level            respectively



      Includes      $194      million       and   $1.04    billion     of   CDOs      backed       by    corporate   obligations        in     level         and      level         respectively



      Includes      $343      million of private          equity      investments           and $279       million of convertible            debentures


Transfers                Between                Levels      of the Fair Value Hierarchy

Transfers           between              levels      of       the     fair     value        hierarchy          are             obligations               of      $7         million          reflecting                 the      level       of     market

                   at    the     beginning           of the reporting                  period       in     which               activity        in      these         instruments             and        transfers            of equity          securities
reported

                                                                                                                                                                                         reflecting the impact                     of lower
                          During the year ended                       December            2012                                       $54 million
                                                                                                                               of                                                                                                                    levels
they      occur                                                                                      transfers                                                  primarily

into      level             from        level            of cash            instruments            were       $62              of   market activity

million             including                transfers           of         non-U.S               government




                                                                                                                        13


GOLDMAN           SACHS          CO AND             SUBSIDIARIES

Notes          to Consolidated                                     Statement of Financial                                            Condition



Note

Derivative                 Activities


Derivative             Activities

Derivatives              are     instruments                 that          derive         their           value       from                  Swaps              Contracts         that    require             counterparties          to    exchange

                       asset                        indices               reference              rates         and    other                 cash      flows     such        as currency                 or     interest     payment          streams
underlying                        prices

             or        combination                of these           factors             Derivatives              may          be           The     amounts          exchanged               are    based on the             specific       terms       of
inputs

privately         negotiated            contracts               which             are    usually           referred            to           the     contract         with        reference              to      specified      rates        financial


as over-the-counter                    OTC             derivatives                 or they          may be            listed                instruments          commodities                  currencies                or indices

and traded on an exchange                              exchange-traded
                                                                                                                                                                Contracts                which           the option                           has the
                                                                                                                                            Options                                in                                       purchaser

                                                                                                                                                                                                                            from or       sell    to   the
                                                                                                                                            right but not the obligation                           to     purchase
Market-Making                         As            market maker                      the        firm      enters         into

                                                                                                                                                          writer         financial                instruments                commodities                or
                                                                                              and         to    facilitate                  option
derivative         transactions                to      provide             liquidity
                                                                                                                                            currencies          within            defined               time       period      for          specified
the transfer            and      hedging             of    risk            In     this    capacity              the    firm

                                                                                                                                            price
typically         acts     as     principal               and        is    consequently                   required             to


commit        capital      to     provide            execution                   As      market maker                     it   is
                                                                                                                                         Derivatives           are     accounted              for         at     fair     value      net     of    cash

essential         to     maintain            an      inventory              of     financial              instruments                    collateral     received         or posted            under            credit     support    agreements
sufficient        to   meet expected                   client        and market demands                                                  Derivatives           are reported             on         net-by-counterparty                    basis    i.e
                                                                                                                                         the   net                       or      receivable                  for    derivative           assets        and
                                                                                                                                                        payable
Risk     Management                           The firm also enters                        into       derivatives               to
                                                                                                                                         liabilities     for          given        counterpart                     when           legal      right      of

actively                              risk     exposures                   that       arise        from           market-                                         under                      enforceable
                  manage                                                                                                                 setoff       exists                      an                                      netting        agreement
              and                            and       lending            activities        in     derivative             and                                                                                      included               Financial
making                  investing                                                                                                        Derivative        assets        and      liabilities                are                    in


cash     instruments                   The          firms          holdings              and       exposures               are                                                               value           and    Financial            instruments
                                                                                                                                         instruments           owned        at    fair


hedged        in                  cases           on      either                                  or
                       many                                                 portfolio                    risk-specific
                                                                                                                                         sold but not yet purchased                          at    fair      value        respectively

         as                       to     an       instrument-by                   instrument               basis          The
basis             opposed
                                 of     this      economic                hedging           is    reflected          in    the
offsetting        impact

same business             segment as the related                                revenues



The firm enters                into     various           types       of derivatives                     including



   Futures               and           Forwards                             Contracts                that         commit

   counterparties                to     purchase                or        sell     financial             instruments

   commodities or currencies                               in   the future




                                                                                                                                    14


GOLDMAN             SACHS         CO AND         SUBSIDIARIES

Notes              to    Consoidated Statement                                              of Financial                  Condition



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




                                                                                                                                                                      As    of   December        2012


                                                                                                                                                       Derivative      Assets                           Derivative     Liabilities
in   millions


                                                                                                                                                                         $2364                                              $1735
Exchange-traded

Over-the-counter                                                                                                                                                            5820                                             5644

Total                                                                                                                                                                    $8184                                              $7379




The        table        below                          the    fair        value       and      the    notional                    agreements           and therefore             are not representative              of the firms
                                    presents

                                                                                                           on                                      Notional           amounts            which     represent         the   sum       of
amount             of   derivative         contracts          by major product                    type                            exposure
                                        fair   values        in    the table      below         exclude      the                                         and        short        derivative       contracts          provide        an
gross       basis        Gross                                                                                                    gross      long

                of both                         of receivable              balances          with                                 indication        of the       volume           of the firms           derivative        activity
effects                          netting                                                              payable

balances           under       enforceable                                                  and netting         of                however         they      do not represent             anticipated     losses
                                                    netting         agreements

cash        collateral           received           or       posted         under        credit        support



                                                                                                                                                  As   of   December        2012


                                                                                                      Derivative       Assets                          Derivative      Liabilities                          Notional       Amount
in    millions


Derivatives


                                                                                                                      $o                                                                                               $18
Credit                                                                                                                    211.4                                                  Z99                                        4246
Currencies                                                                                                                                                                       7126

Commothties                                                                                                                    58                                                   37                                  1033
Equities                                                                                                                28092                                                26623                                         725204

Gross       fair    value/notional             amount        of

     derivatives                                                                                                      $62992                                                $60801                                     $3879373



Jnteri           arty


Cash      collateral      netting                                                                                        1442                                                       56
FaIr     value      included       in   financial      instruments

     owned                                                                                                                8184

Fair     value      included       in   financial      instruments
                                                                                                                                                                                 7379
     sold but not          yet    purchased


                         the               of    receivable         balances      with                  balances        for   the   same     counterparty        under      enforceable       netting   agreements
      Represents                 netting                                                    payable

                         the     netting   of   cash     collateral        received      and    posted on            counterparty         basis   under      credit   support      agreements
      Represents




                                                                                                                         15


GOLDMAN          SACHS             CO AND        SUBSIDIARIES

Notes           to Consolidated                                Statement of Financial                                    Condition



Valuation            Techniques                      for Derivatives

The      firms        level           and       level           derivatives           are valued            using            commodity                delivery           location             tenor        and product               quality          e.g
                                                                                                                                                                                unleaded                                     In
derivative           pricing             models          e.g           models         that         incorporate               diesel      fuel        compared             to                             gasoline                  general            price

                                                               Monte         Carlo        simulations            and         transparency                for        commodity                       derivatives               is
                                                                                                                                                                                                                                      greater               for
option        pricing        methodologies

discounted           cash        flows          Price transparency                    of derivatives             can         contracts          with         shorter            tenors            and         contracts           that     are       more

                 be characterized                                                                                            closely       aligned             with           major           and/or           benchmark                 commodity
generally                                            by product             type
                                                                                                                             indices

Interest         Rate            In general            the prices           and other inputs used                  to


                                                                                            even                                            Price                                           for equity               derivatives           varies           by
value      interest         rate    derivatives               are transparent                        for    long-            Equity                       transparency

dated                            Interest        rate                   and                     denominated                  market and               underlier                Options              on    indices           and     the        common
          contracts                                       swaps                 options

in     the      currencies               of                       industrialized                 nations         are         stock     of corporates                 included                in     major equity                  indices        exhibit
                                                 leading

characterized                                                  volumes              and               bid/offer              the     most        price         transparency                       Equity            derivatives                generally
                            by     high         trading                                     tight


                Interest          rate    derivatives            that        reference                          such         have     observable              market prices                                     for     contracts          with        long
spreads                                                                                         indices                                                                                           except

                                                                                                                                                                                             that         differ                                      from
as an     inflation         index         or the shape              of the yield curve               e.g         10-         tenors        or        reference            prices                                        significantly


                              vs                                             are    more complex                 but         current       market prices                      More          complex            equity        derivatives              such
year     swap        rate            2-year           swap      rate

the prices          and other inputs are generally                             observable                                    as    those        sensitive           to        the      correlation              between             two        or     more

                                                                                                                             individual          stocks        generally                   have     less       price transparency

Credit          Price transparency                     for    credit        default    swaps         including

                                                                                                                                                                                                               of
                                                                                                    by market                                                                                                         all                                    If
both      single      names           and       baskets         of credits            varies                                 Liquidity          is    essential          to     observability                               product            types

                                                                                             Credit       default            transaction              volumes             decline              previously               transparent                 prices
and      underlying           reference              entity     or     obligation
                                                                                                                             and      other                                     become              unobservable                      Conversely
              that      reference              indices          large        corporates            and     major                                     inputs     may
swaps
                                                                                                                             even      highly          structured               products             may         at    times        have         trading
                                         exhibit the            most price            transparency               For
sovereigns           generally
                                                                                                                             volumes        large         enough               to    provide             observability              of prices           and
credit     default                       with     other        underliers            price      transparency
                            swaps
                                                                                                                             other     inputs           See Note                      for     an     overview               of the firms                fair

varies        based         on      credit       rating          the        cost     of borrowing                the
                                                                                                                             value     measurement                   policies
                     reference            obligations               and       the    availability          of the
underlying

underlying           reference           obligations            for     delivery          upon      the default
                                                                                                                             Level          Derivatives
of the issuer               Credit       default        swaps        that     reference          loans      asset-           Level          derivatives                  include             short-term               contracts           for        future

backed        securities           and emerging                market debt                instruments           tend                        of       securities          when          the underlying                                     is        level
                                                                                                                             delivery                                                                                  security

to     have      less       price        transparency                than      those        that     reference                                         and                                                    derivatives            if        they     are
                                                                                                                             instrument                         exchange-traded

                      bonds              In       addition                  more       complex              credit                          traded        and are valued                      at their         quoted        market price
corporate                                                                                                                    actively

derivatives           such         as those          sensitive         to    the correlation          between

two or more underlying                          reference           obligations             generally           have         Level          Derivatives

less    price    transparency
                                                                                                                             Level          derivatives                  include             OTC          derivatives              for     which            all



                                                                                                                                                      valuation                inputs          are         corroborated                   by     market
                                                                                                                             significant


Currency                  Prices         for     currency            derivatives             based        on     the         evidence            and         exchange-traded                             derivatives               that         are     not


exchange            rates        of leading             industrialized               nations         including               actively       traded             and/or               that     are         valued         using        models             that


those        with     longer          tenors            are     generally            transparent                The          calibrate      to       market-clearing                       levels        of   OTC       derivatives

                 difference               between               the         price      transparency                of
primary
                                                                                                                             The      selection           of             particular               model          to     value              derivative
developed            and      emerging            market currency                    derivatives           is   that


                                                                                                                with         depends            on      the         contractual                terms            of      and        specific           risks
emerging            markets          tend       to     be     observable             for    contracts

                                                                                                                             inherent           in     the     instrument                    as      well        as     the        availability              of
shorter       tenors

                                                                                                                             pricing       information                   in    the     market             For derivatives                  that       trade

                                                        derivatives             include          transactions                in                       markets                 model            selection               does          not         involve
Commodity                     Commodity                                                                                              liquid

                                                                                                                                                                                                         because                           of models
referenced           to     energy        e.g          oil    and      natural        gas        metals         e.g          significant             management                 judgment                                    outputs

                                                                                                                                     be calibrated                                                         levels
precious        and         base      and       soft     commodities                e.g         agricultural                 can                               to    market-clearing

Price                                          varies          based           on         the       underlying
              transparency




                                                                                                                        16


     GOLDMAN         SACHS             CO AND         SUBSIDIARtES

     Notes          to Consolidated                              Statement of Financial                                             Condition



     Valuation           models            require              variety            of        inputs            including                Subsequent           to        the    initial    valuation            of          level         derivative           the

                                         market prices                                                                                  firm                           the     level              and       level                              to     reflect
     contractual          terms                                       yield curves                      credit       curves                       updates                                                                         inputs

     measures          of                                                  rates           loss         severity          rates         observable          market changes                      and     any resulting gains and                        losses
                              volatility          prepayment
     and     correlations              of such         inputs         Inputs          to     the        valuations            of        are     recorded           in     level            Level              inputs         are     changed           when

     level          derivatives            can        be     verified       to     market transactions                                  corroborated          by         evidence          such        as similar           market transactions

     broker      or       dealer          quotations             or      other          alternative                  pricing            third-party         pricing services                    and/or      broker          or dealer quotations

     sources         with             reasonable             levels        of                                                           or    other    empirical               market data               In    circumstances                   where         the
                                                                                      price             transparency

     Consideration               is
                                       given      to       the nature         of      the     quotations               e.g              firm     cannot       verif the model                          value        by reference               to     market

     indicative          or                 and        the                                   of    recent            market             transactions                                            that          different            valuation          model
                                 firm                          relationship                                                                                       it    is
                                                                                                                                                                              possible

                            the                                          from           alternative                                     could                                materially          different           estimate           of    fair    value
     activity       to                 prices         provided                                                       pricing                      produce

     sources                                                                                                                            See below           for        further     information                about         unobservable              inputs

                                                                                                                                        used     in   the valuation               of    level          derivatives

     Level          Derivatives
     Level          derivatives             are       valued          using      models                 which         utilize           Valuation           Adjustments
     observable             level                and/or        level                                     as        well       as        Valuation           adjustments                 are      integral           to     determining              the     fair
                                                                                   inputs

     unobservable              level                                                                                                    value     of derivatives                  and      are     used        to        adjust     the      mid-market
                                            inputs

                                                                                                                                        valuations           produced              by      derivative               pricing         models            to     the

        For     level             credit         derivatives             significant               level              inputs            appropriate               exit           price          valuation                  These             adjustments

        include        illiquid         credit       spreads which                 are unique                 to   specific             incorporate           bid/offer                spreads the              cost         of    liquidity           credit


        reference         obligations                and    reference         entities              recovery              rates         valuation           adjustments                    CVA                 and           funding            valuation

        and      certain              correlations            required           to        value           credit          and          adjustments               which          account          for    the        credit        and     funding           risk



        mortgage            derivatives              e.g      the likelihood                  of default              of    the         inherent       in    derivative                portfolios               Market-based                   inputs        are


        underlying            reference          obligation           relative          to    one another                               generally         used           when          calibrating             valuation            adjustments               to


                                                                                                                                        market-clearing                  levels

        For     level            equity          derivatives             significant               level              inputs

                            include                                                               for                      that         In      addition                for       derivatives               that            include           significant
-_      generally                          equity           volatility        inputs                      options

                                                  and/or        have       strike                             that     differ           unobservable                   inputs      the        firm       makes             model        or     exit        price
        are     very      long-dated                                                         prices

                                                                                                                                        adjustments           to        account         for     the     valuation            uncertainty             present
                                  from current               market prices                        In     addition           the
        significantly
                                                                                                                                        in   the transaction
        valuation           of certain            structured           trades           requires           the       use      of

        level         inputs          for the        correlation          of the price                   performance

        of    two    or     more         individual           stocks       or the correlation                         of    the


        price    performance                   for         basket      of stocks              to        another           asset

        class    such       as   commodities




                                                                                                                                   17


GOLDMAN SACHS                 CO AND          SUBSIDIARIES

Notes         to Consolidated                               Statement                    of Financial                     Condition




Significant            Unobservable                    Inputs
The       table        below                                 the                        of                                                         the                     correlation                 presented           in    the    table         for
                                       presents                          ranges                 significant                     example                   highest

unobservable                               used       to      value           the      firms        level                       interest        rate    derivatives            is
                                                                                                                                                                                     appropriate              for        valuing             specific
                          inputs

                        These                                                                                                                          derivative          but                  not be                             for valuing
derivatives                                ranges            represent               the        significant                     interest        rate                                may                      appropriate

unobservable                                      were used          in    the      valuation         of    each                         other     interest       rate     derivative                  Accordingly               the ranges            of
                       inputs        that                                                                                       any
        of derivative           The                                           and medians           of these                    inputs      presented             below        do         not     represent              uncertainty             in or
type                                       ranges averages
                                                      of the appropriate                               to                                                     of        fair        value        measurements                   of the           firms
inputs      are not     representative                                                       inputs          use                possible          ranges

when                            the        fair    value          of any       one      derivative           For                level       derivatives
          calculating




                                                      Net Level            AssetslLiabilities                                                                                        Range         of Significant               Unobservable

 Level       Derivative                                       as    of    December           2012                  Significant           Unobservable             Inputs             Inputs       Average                Median1            as   of

 Product                                                                 in                                         of   Derivative        Pricing       Models                      December             2012
              Type                                                            mi/lions

 Credit                                                                          109                                Correlation                                                      68%     to   70% 69% /70%


                                                                                                                   Credit       spreads                                              12    bps    to   722    bps    117     bps       95    bps


                                                                                                                    Recovery       rates                                             50%     to   70% 68%                70%


                                                                              $534                                  Correlation                                                      71%     to   98% 86%                87%
 Equities



                                                                                                                   Volatility                                                        15%     to   71% 35%                33%


                                     the                              of the                        and     are    not                          the    relative    fair    value      or notional            of   the     respective         financial
  Averages        represent                 arithmetic        average          inputs                                    weighted          by
  instruments          An average                          than the median   indicates                that the     majority       of inputs      are   below      the     average
                                            greater


  The     range   of    unobservable              inputs     for correlation           across    derivative        product       types     i.e     cross-asset           correlation         was        41%         to   54% Average                  14%

      Median      44%      as   of   December          2012




                                                                                                                         18


GOLDMAN          SACHS            CO AND         SUBSIDIARIES

Notes           to Consolidated                               Statement of Financial                               Condition




Range          of Significant                    Unobservable                 Inputs                                   Sensitivity                 of Fair           Value Measurement                                    to     Changes
The     following           provides             further      information              about    the ranges             in    Significant                Unobservable                         Inputs
of     unobservable                               used      to     value        the     finns       level              The        following              provides                 description                  of        the     directional
                                  inputs

derivative        instruments                                                                                          sensitivity           of the finns                 level              fair    value          measurements                 to


                                                                                                                       changes          in    significant            unobservable                   inputs       in       isolation             Due
     Correlation                 Ranges           for    correlation            cover           variety      of                                                                  of     each         of the              firms          level
                                                                                                                       to    the     distinctive               nature

     underliers        both        within         one     market        e.g        equity       index       and
                                                                                                                       derivatives             the       interrelationship                   of     inputs      is       not     necessarily
                                  stock          names           and     across          markets         e.g
     equity       single                                                                                               uniform          within          each       product       type
     correlation           of      commodity               price       and        foreign        exchange
                as    well       as     across          regions            Generally           cross-asset
     rate
                                                                                                                            Correlation                  In    general            for        contracts          where            the      holder
     correlation            inputs          are      used         to     value          more       complex
                                                                                                                            benefits         from the convergence                             of the underlying                         asset    or
     instruments           and     are      lower than           correlation           inputs      on   assets


     within     the    same derivative                   product       type
                                                                                                                            index       prices          e.g          credit       spreads                and    equity           prices          an

                                                                                                                            increase          in    correlation                                     results          in                         fair
                                                                                                                                                                             generally                                           higher

                                           for                     cover      numerous          underliers                  value    measurement
     Volatility            Ranges                volatility

     across          variety          of    markets           maturities          and     strike        prices

     For example                volatility        of equity        indices        is    generally        lower                                                            for                                                    increase         in
                                                                                                                            Volatility             In    general                 purchased                options          an
     than     volatility        of single         stocks
                                                                                                                            volatility        results         in        higher        fair   value         measurement


     Credit      spreads          and      recovery         rates          The     ranges        for     credit
                                                                                                                            Credit      spreads          and recovery                 rates         In    general          the     fair    value
                     and                         rates     cover             variety      of    underliers
     spreads                 recovery
                                                                                                                            of    purchased             credit          protection           increases              as    credit        spreads
     index       and       single       names            regions         sectors         maturities         and
                                                                                                                            increase          or    recovery             rates        decrease                 Credit           spreads         and
     credit                                                and         investment-grade                     The
                 qualities         high-yield
                                                                                                                            recovery          rates      are       strongly       related           to    distinctive            risk    factors
     broad range           of    this      population         gives      rise    to    the width        of the
                                                                                                                            of    the        underlying              reference               obligations                  which          include
     ranges      of unobservable                  inputs
                                                                                                                            reference          entity-specific                factors         such        as   leverage            volatility


                                                                                                                            and     industry            market-based                  risk    factors           such       as    borrowing

                                                                                                                            costs    or       liquidity            of    the     underlying                reference             obligation

                                                                                                                            and macro-economic                          conditions




                                                                                                                  19


GOLDMAN           SACI-1S         CO AND         SUBSIDIARIES

Notes to Consolidated                                          Statement              of Financial              Condition



Fair     Value          of Derivatives                  by Level
The      tables         below                      the     fair    value     of    derivatives     on                enforceable              netting         agreements                and    netting     of cash      received
                                   present

            basis               level     and       major         product      type        Gross     fair            or posted           under          credit      support         agreements           both    in   and across
gross                     by
values       in   the tables            below      exclude        the    effects     of both     netting             levels        of        the   fair       value          hierarchy           and     therefore       are   not


of      receivable              balances             with                          balances       under              representative                of the finns exposure
                                                                  payable



                                                                                                                   Derivative       Assets         at    Fair    Value       as   of    December         2012


                                                                                                                                                                                        Cross-Level
                                                                                               Level                          Level                           Level                                                       Total
in   millions                                                                                                                                                                                 Netting


Interest     rates                                                                                                              25582                                 38                                                25620

Credit                                                                                                                           1462                                652                                                  2114

Currencies                                                                                                                       7106                                                                                     7108

Commodities                                                                                                                             57                                                                                     58

                                                                                                                                27674                                417                                                 28092
Equities


Gross      fair   value     of derivative        assets                                                                         61881                             1110                                                   62992

Counterparty            netting                                                                                               52630                                  736                                                53366

Subtotal                                                                                                                         9251                                374                                                  9626

Cash     collateral        netting                                                                                                                                                                                        1442
Fair    value      included       in financial          instruments         owned                                                                                                                                         8184




                                                                                                                Derivative        Liabilities           at   Fair   Value      as      of   December      2012


                                                                                                                                                                                        Cross-Level

in   millions                                                                                    Level                        Level                             Level                         Netting                     Total


interest     rates                                                                                                              24842                                   74                                               24916

Credit                                                                                                                            1556                               543                                                  2099

Currencies                                                                                                                        7125                                                                                    7126

Commodities                                                                                                                             36                                                                                     37

                                                                                                                                25670                                951                                                 26623
Equities


Gross      fair   value     of derivative        liabilities                                                                    59229                               1570                                                60801

Counterparty            netting                                                                                               52630                                  736                                                 53366

Subtotal                                                                                                                         6599                                834                                                  7435

Cash     collateral       netting                                                                                                                                                                                              56
Fair   value       included       in financial          instruments         sold
     but not                                                                                                                                                                                                              7379
                  yet     purchased


                          the               of receivable         balances    with   payable     balances    for the    same      counterparty               under    enforceable            netting    agreements
     Represents                 netting


                                                                                     and                                                            credit
     Represents           the   netting     of   cash    collateral     received           posted on       counterparty         basis    under                   support      agreements




                                                                                                              20


GOLDMAN             SACHS                  CO AND            SUBSIDIARIES

Notes              to Consolidated                                         Statement of Financial                                               Condition




Derivatives                    with          Credit-Related                         Contingent                       Features                       event        occurs           the       seller       of     protection             is
                                                                                                                                                                                                                                               required              to    make
Certain         of the firms derivatives                                      have        been           transacted               under                               to        the buyer            of protection                    which                calculated              in
                                                                                                                                                    payment                                                                                          is



bilateral          agreements                  with          counterparties                   who may              require           the            accordance             with        the terms           of the contract

firm     to     post          collateral            or terminate                   the transactions                     based            on

changes            in        the     firms          credit           ratings             The        firm        assesses             the            Credit            Indices                  Baskets                  and            Tranches                              Credit

                of       these                                                                 by                                    the                                                 reference                    basket           of
impact                                     bilateral               agreements                            determining                                derivatives              may                                                                 single-name                 credit


collateral          or termination                       payments              that       would           occur         assuming                    default                       or        broad-based               index           If         credit     event           occurs
                                                                                                                                                                  swaps

     downgrade                 by    all     rating agencies                             downgrade                 by any one                       in   one      of the underlying                      reference            obligations                 the protection

                                                              on the agencys                        relative                             of         seller                 the protection                     buyer         The                                  typically
rating        agency               depending                                                                            ratings                                  pays                                                                  payment             is



the     firm       at    the time              of the              downgrade                  may have                  an     impact               pro-rata          portion           of the transactions                            total        notional               amount

which         is     comparable                    to        the     impact           of            downgrade                  by        all        based        on     the       underlying                  defaulted           reference               obligation               In


rating        agencies                The      table            below         presents              the aggregate                    fair           certain        transactions                 the      credit         risk      of             basket         or        index      is



value         of        net        derivative                 liabilities           under             such         agreements                       separated              into         various           portions              tranches                   each             having

excluding                application                    of      collateral            posted             to    reduce             these             different          levels          of    subordination                    The           most junior                   tranches

liabilities                  the     related             aggregate                 fair        value          of     the          assets            cover        initial         defaults           and        once        losses             exceed         the          notional


posted             as         collateral                 and          the          additional                 collateral                 or         amount         of these junior tranches                             any       excess           loss    is    covered           by

termination                                         that            could          have         been          called           at    the            the next        most         senior        tranche          in   the                       structure
                             payments                                                                                                                                                                                         capital

                     date                  counterparties                     in   the event              of            one-notch
reporting                          by
and two-notch downgrade                                       in    the    firms          credit                                                    Total         Return               Swaps                        total      return            swap       transfers             the
                                                                                                         ratings

                                                                                                                                                    risks        relating          to        economic                performance                     of               reference


                                                                                                                                                    obligation             from the protection                        buyer         to        the protection                 seller
in   millions                                                                                 As    of    December                2012
                                                                                                                                                    Typically              the protection                 buyer receives                       from the protection
Net    derivative            liabilities      under          bilateral


                                                                                                                                  $191              seller            floating          rate     of      interest           and       protection                against           any

      aIposted                                                                                                                                      reduction           in       fair       value        of the reference                        obligation                 and     in

Additional         collateral           or termination
                                                                                                                                                    return       the protection                 seller        receives          the cash            flows            associated
                                                                                                                                    21
..pypentsIo                      9flenotc           downgrade
                                                                                                                                                    with      the     reference              obligation               plus        any          increase              in    the    fair
Additional         collateral           or termination

                     for         two-notch          downgrade                                                                       24              value      of the reference
     payments                                                                                                                                                                                    obligation



Credit          Derivatives                                                                                                                         Credit                                                                                        the                        writer
                                                                                                                                                                      Options                   In             credit         option                       option
The      firm           enters          into            broad            array        of       credit         derivatives                 in
                                                                                                                                                    assumes             the       obligation               to       purchase                or     sell               reference

locations           around              the    world           to    facilitate           client         transactions                and
                                                                                                                                                    obligation             at          specified          price         or     credit           spread The                   option
to    manage            the        credit      risk          associated             with        market-making and                                                                  the right              but does            not      assume             the obligation
                                                                                                                                                    purchaser           buys
investing               and         lending              activities                   Credit              derivatives                are
                                                                                                                                                    to    sell    the reference                 obligation               to     or       purchase               it    from        the

actively           managed                 based        on the firms net                       risk      position
                                                                                                                                                    option        writer          The        payments            on        credit        options           depend            either


                                                                                                                                                    on         particular              credit        spread           or      the      price        of     the        reference

Credit        derivatives                   are     individually                   negotiated                 contracts             and
                                                                                                                                                    obligation
can     have       various              settlement                 and     payment              conventions Credit

              include                                                      bankruptcy                     acceleration                   of
events                               failure            to      pay                                                                                 The       firm economically                       hedges            its
                                                                                                                                                                                                                               exposure             to     written           credit

indebtedness                    restructuring                    repudiation                  and     dissolution                 of the
                                                                                                                                                    derivatives                                                                into
                                                                                                                                                                            primarily               by    entering                            offsetting             purchased
reference           entity                                                                                                                          credit       derivatives             with        identical          underlyings                  Substantially                 all



                                                                                                                                                    of the       firms purchased                      credit         derivative               transactions                are with
Credit          Default                 Swaps                    Single-name                   credit         default             swaps             financial           institutions             and          are     subject            to      stringent            collateral

              the        buyer against                   the        loss      of principal                on one             or   more
protect                                                                                                                                             thresholds                                                       the      occurrence                  of
                                                                                                                                                                            In     addition              upon                                                             specified
              loans or                                         reference            obligations                    in   the event
bonds                               mortgages                                                                                                                                     the firm                      take                                 of the reference
                                                                                                                                                    trigger       event                              may                    possession
the     issuer           reference                  entity               of    the        reference                obligations
                                                                                                                                                    obligations             underlying                    particular            written            credit            derivative
suffers            credit           event          The         buyer          of protection                   pays        an      initial
                                                                                                                                                    and                                                                                            of      the        reference
                                                                                                                                                              consequently                   may          upon          liquidation
or periodic                                    to       the        seller     and        receives             protection             for
                         premium                                                                                                                                                                 amounts                       the                                    reference
                                                                                                                                                    obligations                 recover                                on                   underlying
the                      of        the       contract               If     there         is    no        credit         event            as
        period                                                                                                                                                             in     the event           of default
                                                                                                                                                    obligations
defmed             in    the        contract                 the     seller         of        protection             makes               no

payments                to     the         buyer         of        protection                 However                if           credit




                                                                                                                                               21


GOLDMAN             SACHS         CO AND          SUBSIDIARIES

Notes to Consolidated                                           Statement                     of Financial                    Condition



As          of     December               2012           written            and      purchased                credit                     tenor      is      based         on     expected            duration           for    mortgage-related

derivatives            had                                            amounts           of                  billion                                                            and on remaining                   contractual                              for
                                total    gross notional                                       $63.45                                     credit     derivatives                                                                            maturity

and         $79.80         billion           respectively                  for     total      net      notional                          other     credit           derivatives            and

purchased            protection           of $16.35            billion
                                                                                                                                     the      credit             spread      on the underlying                     together          with          the tenor

                                                                                                                                         of the contract                  are indicators                 of payment/performance                           risk
The         table      below          presents          certain        information             about          credit
                                                                                                                                     The          firm        is      less   likely        to    pay       or otherwise             be        required          to
derivatives             In the table          below
                                                                                                                                     perform               where the            credit          spread      and the tenor               are       lower

     fair     values      exclude         the        effects       of both       netting       of receivable

     balances          with      payable             balances        under         enforceable           netting

                               and      netting        of cash        received           or posted            under
     agreements
     credit          support            agreements                   and          therefore            are        not


     representative              of the firms             credit      exposure

                                                                                                                                            Maximum                 Payout/Notional

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


                                                               of Written    Credit      Derivatives        by   Tenor                                      Derivatives                                       Written     Credit Derivatives




                                                                                                                                                  Offsetting                           Other
                                                                                                 Years                                                                                                                                                    Net
                                                                                                                                              Purchased                        Purchased

                                                           0-12                    1-5                   or                                                Credit                   Credit                                                            Asset/
                                                                                                                                             fl.4...k
  in    mi/ions                                          Months                  Years         Greater                   Total                                                                                Asset            Liability           LiabiIitv

As     of   December           2012
Credit      spread       on    underlying

basis       points

0-250                                                  $11196               $33603             $13604               $58403                           $56348                     $17870                      $1113                 $559                  554

                                                                                                                          413                                 381                      324                                                                44
251500

501-1000                                                       198               1114               198                  1510                              1467                         179                       31                    26

Greaterthan           1000                                     170                 947                                   1125                              1122                         104                       24                125                101
Total                                                  $11634               $37795             $14022               $63451                           $61318                     $18477                      $1230                 $728                  502




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

     credit      derivatives     with    identical       underlyings


                                                                     the    notional       amount      of                       credit    derivatives                 excess      of the        notional     amount       included            in
     This     purchased         protection        represents                                                  purchased                                          in                                                                                Offsetting

     Purchased         Credit     Derivatives




                                                                                                                          22


GOLDMAN              SACHS              CO AND             SUBSIDIARIES

Notes                to Consolidated                                        Statement of Financial                                                 Condition



Note

Fair Value                        Option


Other Financial                              Assets               and             Financial                   Liabilities               at

Fair        Value
In     addition           to     all    cash        and derivative                       instruments                     included        in         These         financial       assets        and     financial           liabilities         at    fair      value      are

Financial instruments                                 owned                at     fair    value               and        Financial                  generally           valued        based on             discounted              cash        flow        techniques

instruments                    sold but             not                    purchased                at     fair         value          the          which          incorporate              inputs         with        reasonable               levels           of price
                                                             yet

firm has             elected            to    account             for certain                  of    its      other         financial               transparency               and     are generally                  classified          as    level             because

assets       and      financial              liabilities              at    fair      value     under              the     fair   value             the      inputs       are     observable                 Valuation              adjustments                  may        be

option                                                                                                                                              made      for       liquidity         and    for       counterparty             and        the        firms      credit


                                                                                                                                                    quality

The      primary               reasons          for      electing               the   fair     value          option        are    to

                                                                                                                                                    See     below        for    information             about         the    significant             inputs        used      to
     reflect         economic                events         in    earnings               on         timely basis
                                                                                                                                                    value         other       financial         assets          and     financial          liabilities              at    fair


     mitigate                                         in       earnings                  from              using            different                                               the ranges             of                          unobservable
                               volatility                                                                                                           value         including                                     significant                                         inputs
     measurement                        attributes                    e.g              transfers                   of       financial
                                                                                                                                                    used     to     value      the    level           instruments              within          these        categories

     instruments                   owned                 accounted                    for       as         financings                   are         These                                             the                           unobservable
                                                                                                                                                                  ranges        represent                    significant                                            inputs
     recorded             at     fair   value         whereas the related                                secured           financing                                    used          the valuation               of each
                                                                                                                                                    that     were                in                                                type of other                 financial

     would           be        recorded          on an           accrual              basis         absent           electing          the                                                                                      value          The                        and
                                                                                                                                                    assets        and     financial         liabilities          at     fair
                                                                                                                                                                                                                                                           ranges
     fair    value         option               and                                                                                                                                       of these                                                                           of
                                                                                                                                                    weighted            averages                             inputs          are    not    representative

                                                                                                                                                    the appropriate               inputs        to    use       when         calculating             the     fair       value
     address          simplification                     and cost-benefit                      considerations                     e.g
                                                                                                                                                    of any          one        instrument                   For       example             the        highest             yield
     accounting                 for     hybrid           financial               instruments                  at    fair    value        in

                                                                                                                                                    presented           below         for     other        secured           financings              is
                                                                                                                                                                                                                                                           appropriate
     their     entirety            versus        bifurcation                     of embedded                   derivatives
                                                                                                                                                    for    valuing             specific         agreement             in that      category               but    may       not

                                                                                                                                                    be     appropriate              for     valuing             any      other         agreements                  in     that
Hybrid          financial                instruments                       are        instruments                   that     contain

                                                                                                                                                                        Accordingly                  the range          of     inputs          presented            below
bifurcatable                    embedded                   derivatives                    and            do         not       require               category

                                                                                                                                                    do     not     represent          uncertainty               in      or     possible          ranges           of      fair
settlement            by physical                   delivery               of non-financial                        assets         If   the
                                                                                                                                                    value         measurements                  of    the       firms          level            other            financial
fn-m        elects         to      bifurcate               the        embedded                 derivative                  from the
                                                                                                                                                    assets       and financial            liabilities
associated                debt        the derivative                       is    accounted                for       at    fair    value

and      the         host        contract             is    accounted                    for        at     amortized               cost
                                                                                                                                                    Resale           and Repurchase                          Agreements                    and Securities
                 for       the effective                   portion              of any         fair      value           hedges          If
adjusted
                                                                                                                                                    Borrowed                  and         Loaned                The      significant                 inputs        to      the
the firm does                   not     elect       to     bifurcate               the    entire           hybrid           financial

                                                                                                                                                    valuation           of resale         and        repurchase          agreements                  and     securities
instrument                is    accounted                for     at    fair       value        under               the     fair   value
                                                                                                                                                    borrowed             and      loaned             are    collateral             funding                spreads          the
option
                                                                                                                                                    amount          and timing            of expected             future        cash       flows           and     interest


                                                                                                                                                    rates         See    Note         for further information                          about          collateralized
Other financial assets and financial                                               liabilities            accounted               for    at


fair   value         under the               fair     value           option          include                                                       agreements



     repurchase                 and resale agreements

     securities                borrowed               and         loaned               consisting                  certain         firm

     financing             activities



     certain         unsecured                  short-term                 borrowings                     consisting              of    all



     promissory                 notes

     certain          receivables                     from            customers                and            counterparties

     consisting                of certain         margin loans and

     certain         other secured                    financings




                                                                                                                                              23


GOLDMAN           SACHS             CO AND        SUBSIDIARIES

Notes to Consolidated                                          Statement of Financial                                       Condition



Other Secured                       Financings                  The     significant               inputs     to    the          Receivables                  from           Customers                    and          Counterparties

valuation          of other           secured            financings            at    fair    value         are     the          Receivables            from customers                      and     counterparties                 at    fair     value

amount           and     timing        of expected               future         cash         flows         interest             are                                                      of                                         loans         The
                                                                                                                                           primarily           comprised                         certain            margin
                                                                        the         fair     value         of      the
rates        collateral             funding           spreads                                                                   significant          inputs          to     the     valuation           of         such     receivables               are

collateral         delivered           by the          firm     which           is     determined            using
                                                                                                                                interest                  the   amount              and                      of                        future     cash
                                                                                                                                              rates                                           timing                expected
the    amount           and timing              of expected           future         cash    flows market
                                                                                                                                flows       and funding            spreads
              market                            and                       assumptions                   and        the
prices                          yields                   recovery
                       of      additional             collateral          calls            The      ranges          of
frequency
                                                                                                                                Receivables            from customers                    and counterparties                   not accounted
                       unobservable                inputs       used      to        value     level             other
significant
                                                                                                                                for    at    fair    value      are accounted                    for    at     amortized            cost        net    of
secured         financings            as   of December                2012      are as       follows
                                                                                                                                estimated               uncollectible                      amounts                   which               generally
   Yield 0.32% weighted                            average            0.32%                                                                                 fair      value              Such      receivables                are
                                                                                                                                approximates                                                                                             primarily

   Duration             1.0                weighted                            1.0    years                                     comprised of customer                           margin loans and                     collateral          posted        in
                               years                           average
                                                                                                                                connection            with      certain           derivative           transactions               While          these

                       increases           in    yield    or duration                in    isolation        would               items are carried               at    amounts             that    approximate                fair      value they
Generally
result       in           lower            fair    value         measurement                      Due      to      the          are not accounted                  for     at     fair   value      under the              fair   value         option

distinctive            nature       of each        of the firms                level          other     secured                 or    at    fair    value       in        accordance             with        other        U.S       GAAP           and

                       the                                       of                   is    not                                 therefore          are not included                 in    the    firms         fair       value     hierarchy          in
financings                      interrelationship                      inputs                      necessarily

uniform across                 such    financings                                                                               Notes               and            Had       these       items     been            included       in    the     firms

                                                                                                                                fair       value      hierarchy                 substantially                all     would          have         been


See       Note                for     further         information               about         collateralized                    classified          in level          as of       December             2012

financings



Unsecured                     Short-term                  Borrowings                        The     significant


           to     the valuation                 of unsecured            short-term           borrowings               at
inputs

fair     value     are        the   amount         and        timing     of     expected           future         cash


                                       as well           as   the     credit        spreads        of the firm
flows       interest          rates

See    Note       13    for    further          information           about     unsecured            short-term


borrowings




                                                                                                                           24


GOLDMAN           SACHS        CO AND        SUBSIDIARIES

Notes           to Consolidated                                Statement of Financial                              Condition




Fair      Value of Other                  Financial                 Assets           and     Financial

Liabilities           by Level
The                    below                                   level       within     the       fair    value            accounted            for      at    fair   value       primarily             under    the      fair    value
         tables                     present          by

hierarchy         other     financial assets                  and   financial        liabilities                         option




                                                                                                                         Other    Financial          Assets       at Fair    Value      as     of   December       2012


in   millions                                                                                                          Level                            Level                             Level                                 Total


Securitigpsg.yat9y.afldo                                               erpurpose                                       $20932

Securities      borrowed                                                                                                                                    62191                                                             62191

.Secu                                        greementstOrese                                                                                            10    204                                                             00204

Receivables          from customers          and                                                                                                              257                                                                257
                                                     counterparties

Total                                                                                                                  $20932                         $170061                                                            $190993




                                                                                                                       Other     Financial          Liabilities     at   Fair   Value     as    of    December         2012

in   milions                                                                                                       Level                                Level                            Level                                  Total


                                                                                                                                                              260                                                                  60
Unsecured            h.9tto.rrn   Potr9s
Securitie       loaned                                                                                                                                      31698

59d                      nder agreements                 to   repurchase                                                                                19                                                                    49
Other secured          financings                                                                                                                            8255                               368                            8623

Total                                                                                                                                                 $198862                                  $368                      $199230


     includes     securities                              for regulatory        and     other     purposes       accounted        for at     fair    value     under     the    fair    value       option    which     consists        of
                                    segregated
     securities      borrowed       and   resale                    The  table above    includes                        $20.93    billion     of    level       securities      segregated            for regulatory      and    other
                                                       agreements
                     accounted      for at   fair    value under other U.S GAAP      primarily                    consisting       of   U.S     Treasury        securities
     purposes




Transfers               Between               Levels                 of      the        Fair           Value

Hierarchy
Transfers            between        levels          of        the   fair     value                         are           and     financial          liabilities      between           level         and   level        during      the
                                                                                       hierarchy

                at    the   beginning           of the reporting                    period       in    which             year
                                                                                                                              ended           December              2012
reported

they    occur        There were no            transfers             of other    financial         assets




                                                                                                                  25


GOLDMAN SACHS                          CO AND     SUBSIDIARIES

Notes               to Consolidated                               Statement of Financial                                            Condition



Note

Collateralized                            Agreements and Financings

Collateralized                    agreements             are       securities               purchased                  under            Resale          and Repurchase                           Agreements
                                                                                                                                              resale                                                 transaction                in     which               the        firm
agreements                 to    resell resale           agreements                or reverse                 repurchase                                    agreement                is



                                                                                                      Collateralized                    purchases           financial              instruments                  from              seller                                in
agreements                       and      securities              borrowed                                                                                                                                                                          typically


                                 securities      sold        under agreements                             to repurchase                 exchange            for         cash         and         simultaneously                           enters            into        an
financings              are

                                                                                                          other     secured                                   to    resell           the    same                or    substantially                       the      same
repurchase agreements                                 securities           loaned          and                                          agreement

                                                                 these         transactions                        order                financial          instruments               to    the         seller         at             stated              price        plus
financings                The      firm enters          into                                                 in              to

                                                               client                                     invest      excess            accrued       interest          at     future       date
among              other        things     facilitate                          activities


cash                            securities       to     cover       short          positions                 and    finance
             acquire
                                                                                                                                                                                                       transaction                in      which            the        firm
certain         firm         activities                                                                                                       repurchase            agreement              is



                                                                                                                                                                    instruments                                                                     in
                                                                                                                                        sells     financial                                     to          buyer          typically                      exchange

                                                                                                                        on              for      cash       and      simultaneously                        enters          into      an        agreement                to
Collateralized                   agreements            and      financings               are presented

                                          basis       when                                      of        setoff exists                 repurchase            the        same         or        substantially                   the       same             financial
net-by-counterparty                                                      legal     right

                                                                                         and              collateralized                instruments            from the buyer                         at         stated           price         plus        accrued
Interest             on         collateralized            agreements

                                                           the      life       of the transaction                                       interest     at       future         date
financings              is
                               recognized        over



                                                                                                      of resale             and         The      financial          instruments                 purchased                  or     sold         in     resale          and
The        table        below          presents         the     carrying                value

                                                 and      securities               borrowed                  and      loaned            repurchase           agreements               typically             include         U.S government                            and
repurchase                 agreements
                                                                                                                                        federal      agency          and investment-grade                             sovereign                obligations
transactions



                                                                                                                                        The       firm      receives               financial           instruments                   purchased                   under

                                                                                   As      of    December              2012             resale                                 makes                                  of    financial                instruments
in   millions                                                                                                                                       agreements                                  delivery

Securities          borrowed                                                                                      $177571               sold under          repurchase               agreements                  monitors              the      market value

Securities          purchased          under                                                                                                                                                          on                                    and delivers
     gree
                    nto2                                                                                              0204
                                                                                                                                        of these

                                                                                                                                        obtains
                                                                                                                                                        financial


                                                                                                                                                        additional
                                                                                                                                                                             instruments

                                                                                                                                                                              collateral              due
                                                                                                                                                                                                                daily basis

                                                                                                                                                                                                                to    changes                  in    the        market
                                                                                                                                                                                                                                                                        or



Securities          loaned                                                                                          73293
                                                                                                                                        value      of the      financial            instruments                  as    appropriate                        For    resale
Securities          sold       under

 agreements               to    repurchase2                                                                        158649               agreements             the       firm typically                    requires         delivery                of    collateral


                                                                                                                                        with        fair    value        approximately                     equal      to     the carrying                   value       of
     As    of      December            2012    $62.19          billion     of     securities              borrowed          and

     $31.70         billion     of securities     loaned were               at   fair    value                                          the relevant           assets         in    the consolidated                       statement                 of    financial


                                                                                                              value    under            condition
     Resale         and        repurchase      agreements                are     carried        at    fair


     the    fair    value        option    See Note               for further            information               about    the

     valuation          techniques         and    significant             inputs        used         to    determine        fair
                                                                                                                                        Even       though          repurchase              and         resale         agreements                     involve           the
     value
                                                                                                                                        legal     transfer of            ownership of                  financial            instruments                     they       are


                                                                                                                                        accounted           for    as    financing          arrangements                        because             they require

                                                                                                                                        the     financial          instruments             to        be repurchased                       or    resold           at    the

                                                                                                                                        maturity         of the agreement                       However                repos              to    maturity               are


                                                                                                                                        accounted           for    as sales                 repo           to   maturity             is        transaction              in


                                                                                                                                        which       the      firm        transfers                   security         under            an       agreement               to


                                                                                                                                        repurchase            the        security           where               the    maturity                     date        of     the


                                                                                                                                        repurchase            agreement                   matches               the    maturity                     date        of     the


                                                                                                                                        underlying           security              Therefore the firm effectively no                                             longer

                                                                                                                                        has        repurchase            obligation              and has relinquished                               control           over

                                                                                                                                        the      underlying             security           and         accordingly                    accounts               for       the

                                                                                                                                        transaction           as             sale     The            firm       had        no        repos           to    maturity

                                                                                                                                        outstanding           as    of       December            2012




                                                                                                                                   26


GOLDMAN             SACHS             CO AND            SUBSIDIARIES

Notes              to Consolidated                                      Statement of Financial                                   Condition



Securities                   Borrowed                  and Loaned                      Transactions

In            securities              borrowed                    transaction               the      firm          borrows           All other          securities          borrowed          and       loaned          are recorded              based

securities              from         counterparty                  in   exchange             for    cash      When        the        on     the    amount           of cash          collateral         advanced           or     received          plus

firm returns                 the     securities              the counterparty                    returns       the   cash            accrued         interest             As    these        arrangements                 generally           can       be

Interest           is
                         generally               paid        periodically                 over      the     life    of    the        terminated           on demand               they exhibit            little     if   any      sensitivity          to


transaction                                             affected                       rebates        on      securities             changes         in      interest          rates     Therefore              the      carrying           value       of
                             Interest            as                            by

borrowed                transactions              is                              as     interest     income         on    an        such      arrangements                    approximates               fair       value         While          these
                                                        recognized

accrual        basis                                                                                                                 arrangements                are      carried       at    amounts            that      approximate                 fair


                                                                                                                                     value they are not accounted                             for    at    fair      value        under      the       fair


In       securities             loaned           transaction                 the firm lends               securities       to        value        option      or     at    fair      value    in    accordance               with      other        U.S

     counterparty               typically              in    exchange             for     cash      or securities          or        GAAP          and therefore               are not included                 in   the   firms           fair   value


     letter   of credit When                       the counterparty                      returns      the securities                 hierarchy          in   Notes                    and         Had      these        arrangements              been

the     firm        returns           the        cash        or    securities                          as    collateral              carried       at     fair      value       and     included           in    the       firms       fair       value
                                                                                          posted

Interest                                                                                  over      the     life    of    the        hierarchy            they      would         have       been       classified          in    level           as    of
                   is    generally               paid        periodically

transaction                  Interest            as     affected             by        rebates        for     securities             December            2012

loaned         transactions                 is
                                                  recognized                 as     interest        expense          in   the

consolidated                 statement            of earnings                on an accrual basis                                     As of December                  2012         the firm        had     $7.41         billion       of   securities


                                                                                                                                     received           under       resale           agreements           and        securities            borrowed

The      firm           receives            securities             borrowed                 makes          delivery        of        transactions            that    were segregated                to     satisfy        certain      regulatory

securities               loaned             monitors                the        market             value        of    these           requirements                These          securities         are      included             in   Cash             and

securities              on                                   and        delivers          or obtains         additional              securities         segregated             for   regulatory          and other purposes
                                    daily basis

collateral          due        to    changes            in   the    market value                  of the securities

as appropriate                      For    securities             borrowed               transactions              the firm


                    requires           collateral             with                fair    value      approximately
typically

              to        the                             value           of     the        securities          borrowed
equal                               carrying

transaction




Securities               borrowed                and         loaned            consisting            of     the      firms

matched                 book         and         certain           firm        financing             activities           are

recorded           at    fair       value        under the              fair   value        option          See Note

for further information                               about       securities             borrowed           and     loaned

accounted               for    at fair      value




                                                                                                                                27


GOLDMAN          SACHS          CO AND        SUBSIDIARIES

Notes to Consolidated                                    Statement of Financial                                    Condition



Other Secured                    Financings
In     addition      to    repurchase           agreements            and     securities         lending            Other         secured         financings           that     are    not    recorded            at    fair       value

transactions            the firm funds              certain     assets       through       the use       of         are       recorded          based        on    the        amount         of cash            received            plus

other      secured         financings           and     pledges         financial        instruments                accrued            interest         which       generally           approximates                   fair      value

and      other      assets       as    collateral        in    these      transactions             These            While             these       financings             are          carried        at     amounts                  that


other secured             financings         consist     of                                                         approximate                fair     value       they        are    not    accounted                for     at     fair


                                                                                                                    value         under         the      fair      value         option       or      at        fair      value           in

      intercompany financings
                                                                                                                    accordance                with      other      U.S         GAAP          and      therefore               are     not

      liabilities    of consolidated                VIEs and                                                        included           in   the   finns         fair   value         hierarchy       in    Notes                     and

                                                                                                                            Had       these    fmancings been                 included        in    the    firms          fair     value
      other structured           financing          arrangements
                                                                                                                    hierarchy            they     would         have     primarily           been     classified              in    level


                                                                                                                         as   of December              2012
Other       secured            financings            include         arrangements           that        are

nonrecourse               As      of        December          2012          nonrecourse             other
                                                                                                                    The       table     below        presents      other secured             financings              by
secured      financings           were $301           million
                                                                                                                    maturity



The     firm has          elected                      the    fair   value                 to    certain                                                                                                   As   of     December
                                       to    apply                             option
                                                                                                                    in   millions                                                                                                2012
other      secured             financings           because       the       use     of    fair     value

eliminates          non-economic                volatility       in     earnings         that     would
                                                                                                                         hrsecuredfinancingsiong-term
arise    from using different measurement                              attributes        See Note
                                                                                                                    2014                                                                                                       1515
for    further information                  about    other    secured        financings          that   are
                                                                                                                    2015
accounted         for     at   fair   value
                                                                                                                    2016

                                                                                                                    2017

                                                                                                                    201     8-thereafter                                                                                            280

                                                                                                                    Total     other    secured        financings       long-term                                               1795
                                                                                                                    Total       other secured          financings                                                         $31850

                                                                                                                          The    weighted       average       interest        rate   was 2.27%       as    of    December
                                                                                                                          2012




                                                                                                              28


GOLDMAN               SACHS           CO AND            SUBSIDLRIES

Notes to Consolidated                                                 Statement of Financial                                              Condition



Collateral                 Received               and Pledged                                                                              Note 10

The            firm           receives              fmancial                instruments                      e.g          U.S              Securitization                         Activities
                              and          federal                                other               sovereign            and
government                                                     agency
                                                             well      as                         and            convertible               The     firm       securitizes           residential             mortgages                 corporate              bonds
corporate                 obligations              as                        equities

                                                                             in   connection                     with    resale            and    other       types of financial                   assets          by     selling          these        assets       to
debentures as collateral                                primarily

agreements                  securities            borrowed                 derivative             transactions             and             securitization              vehicles           e.g          trusts           corporate               entities            and

                                                                                                                                           limited                          companies                 and     acts       as        underwriter             of       the
customer              margin loans                                                                                                                       liability

                                                                                                                                           beneficial           interests         that      are       sold         to     investors               The        firms

                                                                                        deliver                                            residential                               securitizations                    are                                           in
In     many cases                    the       firm     is    permitted           to                         or     repledge                                    mortgage                                                        substantially                 all



these          financial             instruments                when         entering             into           repurchase                connection           with       government             agency           securitizations


agreements                  and       securities             lending         agreements                     primarily           in


connection                 with      secured            client        financing         activities                 The    firm             Beneficial           interests         issued         by    securitization                 entities           are debt

       also                                to     deliver             or     repledge                 these        fmancial                or equity        securities         that      give     the investors                 rights       to    receive           all
is                   permitted

instruments                  in      connection                with         other       secured                  fmancings                 or     portions            of    specified        cash           inflows             to           securitization


                                  derivative             transactions               and          meeting             firm       or         vehicle       and           include         senior           and         subordinated                   shares            of
collateralizing

customer              settlement            requirements                                                                                   principal          interest        and/or         other          cash        inflows            The          proceeds

                                                                                                                                           from      the      sale         of beneficial              interests           are        used         to     pay        the


The          table    below                              financial           instruments                    at    fair   value             transferor           for    the    financial           assets           sold       to     the     securitization
                                      presents

received             as     collateral           that        were      available            to        be    delivered           or         vehicle     or     to     purchase        securities            which         serve        as   collateral


repledged             and were delivered                         or repledged               by the firm
                                                                                                                                           The     firm accounts               for         securitization                 as          sale      when          it    has


                                                                                                                                           relinquished               control        over        the        transferred               assets            Prior        to

in    millions                                                                         As    of       December           2012
                                                                                                                                           securitization              the firm accounts                    for    assets          pending         transfer           at

Collateral       available           to   be    delivered        or                                                                        fair    value             and      therefore            does            not        typically                recognize
      reptedged                                                                                                   $407764
                                                                                                                                           significant          gains        or    losses        upon         the       transfer           of     assets            Net
Collateral       that      was     delivered        or
                                                                                                                                           revenues           from          underwriting                activities              are        recognized                in
      repledged                                                                                                     326734
                                                                                                                                           connection               with      the        sales        of      the        underlying                    beneficial

                                                                                                                                           interests     to     investors
The      firm also pledges                       certain         financial          instruments                   owned         at


fair         value           in      connection                  with         repurchase                     agreements
                                                                                                                                           The      firm           generally          receives              cash         in        exchange              for        the
securities            lending             agreements             and other secured                         financings           in

                                                                                                                                           transferred          assets       but     may         also      have         continuing              involvement
connection                 with       other        secured             financings                to        counterparties
                                                                                                                                           with     transferred              assets         including              ownership                 of beneficial
who          may      or      may         not     have         the     right      to    deliver              or repledge

                                                                                                                                           interests       in      securitized        financial             assets        primarily               in    the    form
them           The         table          below         presents            information                     about        assets

                                                                                                                                           of     senior        or     subordinated               securities               The         firm            may         also
pledged          by the firm
                                                                                                                                                                senior         or        subordinated                    securities               issued             by
                                                                                                                                           purchase

                                                                                                                                           securitization                  vehicles         which                 are      typically               VIEs               in


in    millions                                                                         As    of       December           2012              connection           with       secondary         market-making                         activities



Financial        instruments               owned        at    fair


     value                    to counterparties               that
               pledged
       Ha       the   right    to deliver         or repledge                                                       $32336

       Did     not    have     the    right     to deliver       or

             repledge                                                                                                75218




                                                                                                                                     29


GOLDMAN             SACHS           CO AND       SUBSIDIARIES

Notes              to Consolidated                            Statement of Financial                                            Condition



The       primary           risks      included         in    beneficial            interests          and         other           The         table      below        presents              the       firms continuing                 involvement

interests            from          the     firms         continuing                 involvement                    with             in    nonconsolidated                    securitization                  entities      to     which         the    firm

securitization               vehicles       are the          performance               of the underlying                           sold        assets         as well        as    the       total      outstanding             principal amount

collateral           the position           of the firms investment                             in    the    capital               of      transferred                assets           in        which       the     firm         has     continuing

structure           of the securitization vehicle                           and the market               yield       for           involvement                  In   this    table

the security                 These        interests      are         accounted           for     at    fair    value
                                                                                                                                         the        outstanding             principal                amount         is
                                                                                                                                                                                                                           presented             for     the
and       are      included          in    Financial            instruments                owned              at    fair
                                                                                                                                         purpose              of providing                  information             about       the      size     of the
value         and     are generally              classified           in level            of the        fair   value
                                                                                                                                         securitization               entities              in    which       the        firm     has     continuing
hierarchy             See       Notes             through                   for    further        information
                                                                                                                                         involvement                 and    is    not representative                     of the     firms        risk    of
about        fair   value       measurements                                                                                             loss


                                                                                                                                         for    retained            or purchased                 interests the           firms      risk    of    loss       is

During            the year         ended     December                2012          the    firm securitized
                                                                                                                                         limited         to   the    fair   value           of these         interests and
$33.75            billion       of fmancial              assets         in        which        the      firm        had

                                                 all    related        to     residential                                                purchased               interests             represent             senior         and       subordinated
continuing            involvement                                                                    mortgages
                             all    in     connection                with                                                                interests            purchased            in       connection          with       secondary            market-
substantially                                                                     government                agency
                                                                                                                                         making           activities              in    securitization              entities        in     which        the
securitizations
                                                                                                                                         firm also holds               retained              interests




                                                                                                                                                    As   of   December            2012
                                                                                                                                                                            Fair   Value          of                                Fair    Value       of

in   millions                                                                     Outstanding            Principal         Amount                                Retained          Interests                             Purchased         Interests

U.S      government           agency-issued



P.99c                dm
        lateral                                                                                                            $57685                                                            4654
                                gage      obligations

                                                                                                                                  266                                                             37


CDOs CLOs             and      other3                                                                                           3924                                                              44                                                    19

Total                                                                                                                      $61875                                                       $4735                                                          $19

     Outstanding            principal     amount       and    fair    value       of retained         interests      primarily    relate       to   securitizations         during          2012       and   2011


     Outstanding            principal     amount       and    fair    value       of retained         interests      primarily    relate       to   prime      securitizations              during     2009

     Outstanding             principal      amount        and        fair     value      of     retained           interests     primarily          relate     to    CDO          and        collateralized         loan     obligations          CLOs
     securitizations          during      2007    and    2006




                                                                                                                           30


GOLDMAN SACHS                              CO AND         SUBSIDIARIES

Notes               to Consolidated                                     Statement of Financial                                                Condition



In        addition         to        the     interests          in   the table               above            the     firm      had             The       table        below           presents          the    weighted               average        key economic

other                                        involvement                  in        the      form         of        derivative                  assumptions                     used         in    measuring the                      fair   value         of          retained
              continuing

transactions                    and                                  with           certain          nonconsolidated                            interests             and       the     sensitivity             of   this         fair     value      to     immediate
                                            guarantees

VIEs The                 carrying             value       of these             derivatives               and guarantees                         adverse           changes              of    10% and 20%                   in    those       assumptions

was           net     liability              of $1        million as of December                                2012          The

notional             amounts                 of     these        derivatives                 and         guarantees             are

included            in     maximum                  exposure            to   loss       in   the nonconsolidated

VIE         tables       inNote               11




                                                                                                                                                                                 As     of    December            2012

                                                                                                                                                                            Type       of    Retained          Interests


     in   millions                                                                                                                                              Mortgage-Backed                                                                                           Other1


Fair       value    of retained              interests                                                                                                                            $4691                                                                                      44

                                                                                                                                                                                            8.2                                                                             1.2
Weighted           average             ife    years

                                                                                                                                                                                                                                                                           N.M
ctprpyt.rate
                                                                                                                                                                                  $55                                                                                      N.M

                                                                                                                                                                                       107                                                                                 N.M


Discount           rate3                                                                                                                                                                    3.9%                                                                           N.M

                                                                                                                                                                                      $..                                                                                  N.M

Impact        of   20% adverse change                                                                                                                                                  174                                                                                 N.M

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

     discount        rates           and     the    related                           to    adverse                       are      not   meaningful        as  December
                                                                                                                                                                 of                          2012     The firms            maximum            exposure            to    adverse
                                                                sensitivity                               changes
     changes         in    the       value     of   these       interests        is    the    carrying         value    of   $44     million   as    of   December 2012

     Constant                                      rate   is   included        only        for positions         for   which       constant     prepayment             rate      is
                                                                                                                                                                                            key assumption            in    the       determination          of    fair    value
                      prepayment

     The                        of                                      retained           interests      are    U.S      government           agency-issued                collateralized           mortgage          obligations            for   which         there     is    no
              majority                mortgage-backed
                                                                                       of retained                           the                    credit      loss                               are    reflected        in   the    discount       rate
     anticipated           credit          loss For       the    remainder                                    interests             expected                           assumptions




The                                   table        does        not                    effect        to    the        offsetting                 linear          In     addition               the        impact       of              change        in          particular
            preceding                                                   give

benefit        of other               fmancial            instruments                 that     are held         to     mitigate                 assumption                 in    the preceding                 table       is    calculated           independently

risks       inherent            in    these        retained          interests              Changes            in fair     value                of changes                 in   any other assumption                             In    practice          simultaneous

based          on         an         adverse          variation                in                                                               changes               in    assumptions                   might        magnif                or     counteract                   the
                                                                                       assumptions                   generally

cannot         be extrapolated                      because             the relationship                  of the change                         sensitivities               disclosed             above

in        assumptions                 to      the     change            in     fair         value        is     not     usually




                                                                                                                                         31


GOLDMAN           SACHS            CO AND            SUBSIDIARIES

Notes to Consolidated                                             Statement of Financial                                               Condition



Note      11
Variable                  Interest Entities


VIEs      generally             finance         the purchase                 of     assets      by issuing                 debt            Real          Estate              Credit-Related                            and          Other             Investing

and                       securities            that        are        either        collateralized                    by       or         VIEs           The      firm purchases                    equity           and      debt      securities           issued
         equity

indexed              the                      held               the    VIE           The       debt           and     equity              by and makes                 loans      to    VIEs        that        hold        real     estate          performing
               to               assets                  by
                                                                                                                                           and       nonperforming                       debt         distressed                    loans          and        equity
securities          issued         by           VIE may                include        tranches                 of    varying
                                                                                                                                           securities           The      firm typically               does            not     sell     assets      to or enter
levels      of subordination                         The     firms involvement                                 with     VIEs
                                                                                                                                           into     derivatives             with these VIEs
includes          securitization                  of financial                 assets          as     described                 in


                                                                                                                    of VIEs
Note      10 and           investments                in    and loans           to    other types
                                                                                                                                           Other Asset-Backed                              VIEs             The         firm        structures         VIEs        that

as     described           below             See Note             10     for       additional              information
                                                                                                                                           issue        notes      to       clients        and        purchases                and         sells       beneficial

about       securitization                    activities           including               the       definition                 of
                                                                                                                                           interests           issued        by    other        asset-backed                    VIEs          in      connection

beneficial           interests               See Note                  for   the      firms consolidation
                                                                                                                                           with     market-making                  activities              In    addition            the firm          may       enter

policies       including               the defmition               of        VIE                                                           into         derivatives             with          certain             other         asset-backed                     VIEs

                                                                                                                                           primarily           total     return         swaps         on         the    collateral           assets         held    by
The       firm       is                                involved              with         VIEs            through            the
                            principally                                                                                                    these        VIEs      under which                 the firm pays                  the     VIE      the return           due

following           business           activities
                                                                                                                                           to     the note        holders          and        receives            the    return         on       the    collateral


                                                                                                                                           assets       owned by            the    VIE         The firm generally                          can     be removed
Mortgage-Backed                               VIES           and             Corporate                    CDO              and
                                                                                                                                                  the     total     return                      counterparty                    The          firm       generally
                                                                                                                                           as                                      swap
CLO VIEs                   The      firm        sells      residential             mortgage               securities            to
                                                                                                                                                        into    derivatives             with     other counterparties                         to
                                                                                                                                           enters                                                                                                     mitigate       its


mortgage-backed                     VIEs          and       corporate              bonds        and            may     retain
                                                                                                                                           risk     from derivatives                   with    these        VIEs The                 firm typically               does

beneficial          interests           in    the assets sold                 to     these      VIEs The                   firm
                                                                                                                                           not    sell    assets       to   the other asset-backed                           VIEs       it   structures

purchases            and        sells     beneficial             interests           issued          by        mortgage-

backed       and      corporate               CDO          and    CLO         VIEs        in    connection                 with
                                                                                                                                           VIE      Consolidation                       Analysis
market-making                   activities            In addition               the firm         may            enter       into
                                                                                                                                                variable          interest         in         VIE      is        an    investment                e.g        debt        or

derivatives           with        certain         of these         VIEs            primarily              interest          rate
                                                                                                                                           equity        securities           or       other    interest              e.g       derivatives                 or loans
                                                                                                                The        firm
swaps which                 are typically                  not     variable           interests
                                                                                                                                           and      lending        commitments                   in         VIE         that    will       absorb           portions
                  enters          into       derivatives           with         other        counterparties                     to
generally                                                                                                                                  of     the    VIEs                             losses           and/or        receive             portions         of    the
                                                                                                                                                                       expected
mitigate       its    risk       from derivatives                  with        these       VIEs
                                                                                                                                           VIEs         expected            residual       returns



Certain      mortgage-backed                         and corporate                  CDO         and        CLO VIEs
                                                                                                                                           The       firms         variable             interests           in        VIEs          include           senior       and
usually      referred             to     as     synthetic          CDOs              or    credit-linked                   note
                                                                                                                                           subordinated                debt       in    residential               and        commercial                mortgage-
                                          create           the                            for       the        beneficial
VIEs        synthetically                                          exposure
                                                                                                                                           backed         and      other        asset-backed                    securitization               entities         CDOs
interests      they        issue         by entering              into       credit        derivatives                 rather
                                                                                                                                           and      CLOs            loans         and         lending             commitments                      limited         and
than        purchasing                   the         underlying                 assets               These             credit
                                                                                                                                           general        partnership              interests           preferred               and      common               equity
derivatives           may          reference                     single         asset           an        index            or
                                                                                                                                           derivatives            that       may         include           foreign            currency                and     equity
                                 of assets or indices                           See Note                       for    further
portfolio/basket                                                                                                                                                                                                                                                   and
                                                                                                                                           and/or        credit     risk        Certain         interest              rate     foreign           currency
information               about          credit        derivatives                  These           VIEs             use     the
                                                                                                                                           credit        derivatives              the     firm       enters            into         with      VIEs          are    not
funds      from the             sale     of beneficial                 interests           and the premiums
                                                                                                                                           variable        interests          because          they create              rather         than      absorb          risk

received          from          credit        derivative               counterparties                     to        purchase

securities          which         serve         to    collateralize                the beneficial                    interest
                                                                                                                                           The enterprise                with           controlling              financial           interest         in     VIE        is


                                                     derivative                                           These         VIEs
holders      and/or          the       credit                             counterparty                                                     known          as the primary                 beneficiary                  and     consolidates                 the    VIE
may      enter      into     other derivatives                     primarily              interest         rate       swaps                The firm determines                     whether            it    is    the primary                                      of
                                                                                                                                                                                                                                           beneficiary
which       are typically                not variable              interests              The    firm           may be                     VIE by         performing              an    analysis           that       principally            considers

counterparty               to     derivatives               with        these         VIEs           and        generally

                                                                                                     to                                         which        variable         interest         holder            has     the        power        to    direct       the
enters     into      derivatives              with      other counterparties                               mitigate             its



risk
                                                                                                                                                activities         of the          VIE        that         most         significantly                 impact        the

                                                                                                                                                VIEs economic                   performance




                                                                                                                                      32


GOLDMAN                  SACHS           CO AND               SUBSIDIARIES

Notes to Consolidated                                                       Statement of Financial                                            Condition



       which            variable         interest               holder       has the obligation                       to    absorb                The          maximum                                       to    loss        excludes               the     benefit          of
                                                                                                                                                                                      exposure

       losses           or      the     right        to       receive        benefits              from       the     VIE        that                                  financial            instruments              that          are held          to     mitigate         the
                                                                                                                                                  offsetting

       could        potentially               be significant                 to   the     VIE                                                     risks     associated             with      these       variable         interests


       the    VIEs              purpose             and         design        including             the       risks       the   VIE                  For        retained              and         purchased               interests              and          loans          and

       was         designed             to    create            and     pass        through             to    its          variable                  investments                   the     maximum                                      to    loss    is    the carrying
                                                                                                                                                                                                                  exposure

       interest          holders                                                                                                                     value       of these           interests



       the   VIEs             capital         structure                                                                                              For        derivatives                the         maximum                exposure               to      loss     is     the

                                                                                                                                                     notional               amount               which        does        not           represent             anticipated
       the terms              between              the        VIE and         its      variable          interest          holders
                                                                                                                                                     losses          and      also       has      not    been       reduced                  by unrealized            losses
       and other             parties         involved                with    the       VIE         and
                                                                                                                                                     already           recorded                  As       result          the       maximum                 exposure           to


       related-party                  relationships                                                                                                  loss      exceeds             liabilities         recorded           for       derivatives              provided          to


                                                                                                                                                     VIEs
The         finn        reassesses                its     initial     evaluation              of whether              an     entity


is        VIE when                  certain             reconsideration                  events          occur        The       firm              The       carrying               values          of     the       firms               variable            interests          in


reassesses                   its    determination                     of whether                   it    is     the        primary                nonconsolidated                        VIEs          are        included               in     the        consolidated

                             of         VIE on an ongoing                                basis      based            on    current                statement           of financial condition                        as    follows
beneficiary

facts        and circumstances
                                                                                                                                                     Substantially                   all       assets         held        by            the      firm         related          to


                                                                                                                                                     mortgage-backed                             corporate           CDO                and      CLO          and         other
Nonconsolidated                                   VIEs
                                                                                                                                                     asset-backed                  VIEs          are included                 in    Financial instruments
The         firms exposure                          to     the obligations                    of VIEs           is    generally
                                                                                                                                                     owned             at     fair    value              Substantially                  all    liabilities          held      by
limited            to     its      interests             in     these       entities          In    certain           instances

                                                                                          derivative
                                                                                                                                                     the       firm         related         to     corporate             CDO             and         CLO         VIEs        are
the firm provides                        guarantees                   including                                     guarantees
                                                                                                                                                     included                in     Financial                instruments                      sold         but      not      yet
to     VIEs         or holders               of variable              interests          in   VIEs
                                                                                                                                                     purchased                at fair      value

The         table        below                                  information              about          nonconsolidated
                                        presents                                                                                                                     held
                                                                                                                                                     Assets                       by the firm related                    to    real          estate        credit-related

VIEs               in         which               the           firm          holds            variable               interests
                                                                                                                                                     and        other             investing              VIEs        are           primarily                included           in

Nonconsolidated                          VIEs              are       aggregated               based            on     principal                                                                                                         value
                                                                                                                                                     Financial instruments                             owned         at       fair

business             activity                The         nature         of the firms variable                             interests


can         take         different            forms              as     described              in       the     rows         under

maximum                                                    to        loss           In        the            table          below
                                exposure



                                                                                                                                                        Nonconsolidated                    VIEs

                                                                                                                                                          As   of    December              2012

                                                                                                                                 Corporate                           Real estate

                                                                                         Mortgage-                               CDOs and                 credit-related             and                     Other       asset-

in    millions                                                                                backed                                    CLO5                   other investIr                                        backed                                                Total


Assets         in    VIE                                                                      $68669                                  $ll.749                                      $976                                  $1188                                        82582

Carrying Value                     of   the       Firms
     Variable           Interests

                                                                                                   523

     Liabilities


Maximum                 Exposure             to    Loss         in

     Nonconsolidated                     VIEs

tained                                                                                             56                                      375                                                                                     04

     Derivatives                                                                                                                           373

                                                                                                                                                                                      71                                                                                       71
     Loans     and        investments

Total                                                                                              5236                                    748                                        71                                       104                                         6159


                                      amounts             include     $373        million      as   of    December            2012      related    to derivative            transactions          with    VIEs      to   which          the    firm transferred            assets
      The     aggregate

                         VIE and             maximum                                     loss include           $1.99       billion   and $150      million         respectively           as     of   December          2012           related       to   CDOs      backed         by
      Assets        in                                           exposure         to


       mortgage           obligations




                                                                                                                                         33


GOLDMAN           SACHS         CO AND         SUBSIDIARIES

Notes to Consolidated                                         Statement of Financial                             Condition



Consolidated VIEs
The         table        below                               the                        amount           and         The    table    below      excludes          VIEs       in    which    the    firm holds
                                         presents                     carrying

classification            of    assets        and     liabilities       in     consolidated         VIEs             majority     voting     interest      if       the   VIE meets         the   definition      of

                    the    benefit       of    offsetting            financial     instruments           that        business       and   ii    the     VIEs        assets    can     be   used     for   purposes
excluding

are     held       to                     the       risks      associated          with     the    firms             other than      the settlement         of    its
                                                                                                                                                                        obligations
                          mitigate

variable         interests        Consolidated                VIEs     are     aggregated       based     on

principal         business        activity          and      their    assets     and    liabilities       are        The    liabilities    of   CDOs            mortgage-backed              and     other      asset-


                                                                                                                     backed     VIEs      do not have           recourse           the general      credit      of the
presented          net of intercompany                    eliminations                                                                                                        to


                                                                                                                     firm

                          all   the   assets         in     consolidated         VIEs     can     only    be
Substantially

used     to     settle    obligations         of the         VIE


                                                                                                                                                        Consolidated          VIEs

                                                                                                                                                      As   of    December          2012

                                                                                                                                                                                                               CDOs
                                                                                                                                                                                      mortgage-backed            and
in   millions                                                                                                                                                                              other asset-backed


Assets

Financial        Instruments      owned         at   fair    value                                                                                                                                              $329

Total                                                                                                                                                                                                           $329


Liabilities


Other     secured        financings                                                                                                                                                                             $321

Total                                                                                                                                                                                                           $321




                                                                                                                34


GOLDMAN               SACHS               CO AND          SUBSIDIARIES

Notes to Consolidated                                                  Statement of Financial                                          Condition



Note         12
Other Assets


Other            assets          are      generally             less        liquid        non-financial                  assets            Identifiable                Intangible                   Assets

The table below                                          other                                                                             Substantially               all     of the    firms             identifiable          intangible              assets        are
                                        presents                    assets          by type
                                                                                                                                           considered             to    have       finite           lives     and     are amortized                     over         their


                                                                                                                                           estimated          lives

in    millions                                                                            As of December                  2012


Property            leasehold           improvements             and                                                                       Identifiable                                    assets             are    tested           for        recoverability
                                                                                                                                                                    intangible
                     nt
     equipm                                                                                                                                                                                                  circumstances                  indicate                    an
                                                                                                                                           whenever           events           or changes              in                                                      that

Income           tax-related            assets                                                                           1017
                                                                                                                                           assets                                                                           value                          not          be
Goodwill           and     identifiable
                                                                                                                                                            or      asset          groups                  carrying                           may
                                                 intangible

     assets3                                                                                                               257             recoverable

Miscellaneous                   receivables         and    other                                                           198

                                                                                                                    $2412                  If        recoverability               test    is
                                                                                                                                                                                                    necessary          the carrying                    value        of an
Total

                                                                                                                                           asset       or     asset            group           is
                                                                                                                                                                                                      compared              to        the        total         of      the
      Net     of    accumulated                  depreciation           and        amortization         of    $4.64        billion


      as    of   December               2012                                                                                               undiscounted                 cash       flows            expected          to    be        received            over         the

      See     Note         18    for   further     information          about income taxes                                                 remaining             useful         life   and          from the disposition                     of the        asset        or

      As      of     December              2012           the    net        carrying       amount            of    the     firms           asset      group
      goodwill            and    identifiable        intangible         assets         was $50         million      and     $207

      million        respectively                 Identifiable          intangible          assets       were       recorded

      net     of    accumulated                 amortization           of    $557      million         These       intangible                   If   the    total         of     the     undiscounted                  cash           flows        exceeds             the

      assets                              include         the      firms                                           fund      lead
                     primarily                                                     exchange-traded                                                               value          the asset or               asset    group        is   not     impaired
                                                                                                                                                carrying
      market         maker             rights     NYSE          designated             market      maker           rights     and

      customer             lists

                                                                                                                                                If   the    total      of the undiscounted                          cash    flows           is    less    than         the

                                                                                                                                                                  value           the       asset            or     asset        group            is     not         fully
                                                                                            and Equipment                                       carrying
Property Leasehold Improvements
                                                                                                                                                recoverable               and     an     impairment                  loss     is      recognized                as     the
Substantially                    all    property          and equipment                    are depreciated                  on
                                                                                                                                                difference          between the carrying                           amount of the                  asset    or        asset
                                basis over           the useful              life    of    the asset              Leasehold
straight-line
                                                                                                                                                group       and     its   estimated                 fair    value
improvements                          are amortized              on          straight-line             basis        over      the

useful             life     of the                                           or     the     term        of        the     lease
                                               improvement
whichever                  is    shorter          Certain          costs       of software               developed               or

obtained             for        internal          use     are capitalized                  and     amortized                on

straight-line                   basis over          the useful              life    of the software



Property                  leasehold             improvements                   and        equipment               are     tested

for     impairment whenever                                events           or changes            in   circumstances

                    that        an      assets       or     asset       groups             carrying            value        may
suggest

not      be        fully        recoverable                 The        firms policy                for       impairment

                 of property                leasehold            improvements                    and equipment                   is
testing

the        same           as     is     used       for     identifiable                intangible            assets with

finite       lives




                                                                                                                                      35


     GOLDMAN           SACI-IS           CO AND        SUBSIDIARIES

     Notes            to Consolidated                                      Statement of Financial                                   Condition



     Note      13                                                                                                                       Note         14
     Short-Term                         Borrowings                                                                                      Long-Term Borrowings

     Short-term            borrowings                were comprised of the following                                                    As of December                         2012            long-term           borrowings              were     $1.80


                                                                                                                                        billion         all    of which           is     included       in   Other          secured        financings

                                                                                                                                        in    the      consolidated                 statement           of fmancial                   condition         See

     in   mi/ions                                                                      As       of   December2012                       Note          for      further        information              about      other       secured         financings

     Other secured             financings       short-term                                                         $30055

     Unsecured         short-term            borrowings                                                             19516               Subordinated                        Borrowings
     Total                                                                                                         $49571               As      of    December               2012         the firm        had         outstanding          borrowings

                                                                                                                                        of $5.00          billion          from Group             Inc under             four     subordinated          loan


     See      Note                for        further        information                about           other        secured
                                                                                                                                        agreements                 which         mature         in   2014          In    addition         the firm has

                                                                                                                                             $20.11           billion       revolving           subordinated              loan        agreement        with
     financings

                                                                                                                                                       Inc         which         also         matures        in    2014           As     of December
                                                                                                                                        Group
     Unsecured                 short-term             borrowings                  include            the                      of                                                   was drawn            down          under
                                                                                                              portion                   2012         $16.50          billion                                                      this   agreement
     unsecured             long-term           borrowings maturing                          within           one year of

     the      financial                statement             date           and        unsecured                  long-term             Amounts             borrowed             under these            subordinated                  loan agreements

     borrowings                 that     are        redeemable                within            one        year       of    the         bear      interest           at      rate        of   LIBOR        plus         .75% per annum                 The

     financial statement                     date     at   the option             of the holder                                                           value           of these       borrowings            approximates               fair   value
                                                                                                                                        carrying



     The      firm obtains               unsecured                short-term           borrowings primarily                             The          subordinated                                         from                           Inc     and     are
                                                                                                                                                                                  borrowings                            Group
     from Group                 Inc In addition                    the firm also                obtains       unsecured                 available             in   computing              net    capital          under       the      SECs       uniform

     short-term                borrowings              through               issuing        promissory                   notes          net     capital            rule          To      the     extent        that       such        borrowings         are

     commercial                 paper         and     certain              hybrid      financial             instruments
                                                                                                                                        required          for      the      firms continued                  compliance                with    minimum
     which          are    accounted                for     at    fair      value        under         the     fair      value                                                                               not      be repaid
                                                                                                                                        net     capital        requirements                   they   may
.J   option          See       Note            for    further              information               about    unsecured

     short-term            borrowings                that        are       accounted             for    at    fair       value           Note        15

     The      carrying            value         of short-term                     borrowings               that      are    not         Other             Liabilities                    and Accrued                        Expenses
     recorded         at       fair    value         generally             approximates                fair    value        due
                                                                                                                                        The          table         below                               other       liabilities           and      accrued
     to    the short-term               nature        of the obligations                    While            these       short-                                                   presents

                                                                       amounts                                              fair        expenses              by type
     term borrowings                    are carried              at                      that        approximate

     value                     are not accounted                      for    at   fair    value         under the           fair
                    they

     value      option           or     at    fair    value           in    accordance               with     other        U.S

     GAAP           and therefore               are not included                    in    the        firms        fair   value
                                                                                                                                        in   millions                                                                     As     of   December      2012

     hierarchy            in    Notes                  and                  Had     these        borrowings                been
                                                                                                                                        Compensation                 and    benefits                                                              $3135
     included         in       the     finns         fair        value       hierarchy               substantially           all
                                                                                                                                        Income        tax-related          liabilities                                                             1109
     would          have been           classified           in    level          as   of December                 2012                 Accrued                            and    other                                                            1208
                                                                                                                                                       expenses

                                                                                                                                        Total                                                                                                     $5452

                                                                                                                                             See Note           18   for further         information       about income               taxes




                                                                                                                                   36


GOLDMAN               SACHS             CO AND         SUBSIDIARIES

Notes               to Consolidated                                    Statement of Financial                                              Condition



Note         16

Commitments Contingencies                                                                and Guarantees

Commitments
The table below                        presents        the     firms commitments


                                                                                                                               Commitment                  Amount by Period                                             Total    Commitments as                   of

                                                                                                                              of    Expiration          as  of December 2012                                                     December 2012
                                                                                                                                                2014-                    2016-                        2018-

in    millions                                                                                                     2013                         2015                         2017              Thereafter




Commitments                 to    extend      credit                                                                 100                                                                                $33                                                      133

Contingent            and        forward     starting         resale    and     securities
                                                                                                                                                                                                                                                            6345
..9.9reemen                                                                                                       6345
Forward         starting          repurchase           and     secured        lending

..9.t52                                                                                                            4138

                                                                                                                         26                                                                                                                                       26
Letters       of   credit

                                                                                                                     199                                                                                                                                         203
Other

Total     commitments                                                                                       $10808                                   $1                        $1                       $35                                               $10845

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


      These        agreements              generally         settle    within    three    business           days

      Consists         of   commitments                under                  of credit       issued              various          banks    which         the   firm provides             to   counterparties      in    lieu   of securities        or    cash       to
                                                                  letters                                   by
      satisfy      various         collateral      and    margin         deposit       requirements



Commitments to Extend                                          Credit                                                                           Leases
The      firms commitments                              to     extend         credit      are                                  to               The          firm        has         contractual             obligations             under          long-term
                                                                                                     agreements

lend          with          fixed          termination                 dates       and         depend              on       the                 noncancelable                  lease       agreements            principally            for     office     space

satisfaction                of     all     contractual               conditions          to    borrowing                  The                   expiring           on    various          dates       through      2021          Certain          agreements

total     commitment                     amount          does          not                            reflect        actual                     are                     to    periodic          escalation        provisions              for    increases            in
                                                                             necessarily                                                                  subject

                                                               the      firm                                                   or                                       taxes       and    other      charges       The         table     below
future          cash         flows          because                                may        syndicate              all                        real      estate                                                                                         presents

substantial             portions            of these           commitments                and         commitments                               future          minimum              rental      payments          net     of     minimum                sublease

                             unused                    be       reduced            or     cancelled                 at        the               rentals            In     addition              the     table     below           excludes               amounts
can       expire                               or

                                                                                                                                                                   where        an     affiliate       has      provided         office         space      to     the
counterpartys                     request                                                                                                       payable

                                                                                                                                                firm

The      firm generally                    accounts           for     commitments               to    extend         credit

                                                                                                                                                in   millions                                                                   As   of   December2012
at    fair    value
                                                                                                                                                2013                                                                                                            $3
                                                                                                    Resale               and                    2014
Contingent                         and          Forward                  Starting
                                                                                                                                                2015
Securities Borrowing Agreements/Forward  Starting
            and Secured Lending Agreements                                                                                                      2016
Repurchase
The          firm           enters          into        resale          and        securities               borrowing                           2017

                            and                               and       secured         lending            agreements                           2018         thereafter
agreements                             repurchase

that         settle         at           future         date           The      firm          also         enters         into                  Total                                                                                                           $20


commitments                       to    provide          contingent             financing             to    its     clients


and      counterparties                     through             resale        agreements                   The      firms

                   of these            commitments                   depends       on the            satisfaction              of
funding

all     contractual                conditions            to     the     resale      agreement               and          these

commitments                      can     expire     unused




                                                                                                                                      37


GOLDMAN              SACHS          CO AND           SUBSIDIARIES

Notes to Consolidated                                                Statement                         of Financial                         Condition



                       leases        include               office                            held       in     excess             of          have         been         met         for      certain            large           internationally                  active
Operating                                                                  space

current                                      The          firm       records                                      based       on              commercial                and        investment             bank         counterparties                  and     certain
                 requirements                                                                 liability


the     fair     value        of the remaining                       lease        rentals            reduced         by any                   other    counterparties                       Accordingly                 the firm has                 not included

                     or                      sublease                                  for      leases         where         the              such    contracts            in      the    table     below
potential                  existing                                 rentals

firm           has     ceased         using              the        space          and         management                    has

concluded                        the firm                      not derive                                         economic                    The          table         below                                      certain          information                 about
                       that                         will                                any future                                                                                         presents

benefits             Costs       to terminate                   lease before                  the     end     of    its    term               derivatives           that      meet the defmition                        of       guarantee             and     certain


are recognized                   and measured                  at   fair    value            on termination                                   other    guarantees
                                                                                                                                                                                   The      maximum                  payout         in    the table         below       is



                                                                                                                                              based        on     the notional               amount             of     the     contract            and      therefore


Contingencies                                                                                                                                 does    not represent                  anticipated               losses          See        Note           for   further

Legal           Proceedings                    See Note               20    for        information                about                       information               about        credit        derivatives              that         meet the defmition

legal      proceedings                                                                                                                        of     guarantee             which          are not included                   below


Guarantees                                                                                                                                                                                          accounted                                                          the
                                                                                                                                              Because             derivatives               are                               for        at    fair      value
The        firm        enters         into          various            derivatives                    that        meet       the
                                                                                                                                                                   value            is      considered                 the          best           indication           of
                                                                                                                                              carrying
defmition             of      guarantee             under U.S                GAAP               including            written
                                                                                                                                              paymentlperformance                           risk    for       individual            contracts            However
                and commodity                                               written                               contracts
equity                                        put options                                     currency
                                                                                                                                              the carrying              values       below          exclude           the     effect          of    legal      right    of
and      interest         rate     caps      floors        and       swaptions Disclosures                                about
                                                                                                                                              setoff       that    may        exist        under         an    enforceable                netting        agreement
derivatives               are not      required             if      they     may be                 cash      settled        and
                                                                                                                                              and    the     effect        of netting             of cash           collateral           posted       under      credit

the      firm        has      no    basis           to    conclude                it    is    probable              that     the
                                                                                                                                              support        agreements
                              held    the underlying                       instruments                at     inception            of
counterparties

the     contract             The     firm       has         concluded                  that         these     conditions




                                                                                                                                                             As    of   December             2012

                                                                                                                                             Maximum         Payout/Notional                  Amount            by Period           of    Expiration


                                                                                                Carrying
                                                                                                Value        of                                                   2014-                       2016-                                 2018-

in   millions                                                                            Net        Liability                          2013                       2015                            2017                  Thereafter                                Total


                                                                                                           $10                         $283                        $537                           $760                                   $53                    $1633
Derivatives


     These                                                                                            derivatives          that   do   not   meet    the    definition        of         guarantee            and    therefore           these amounts           do    not
                 derivatives         are     risk     managed           together             with

     reflect     the   firms       overall     risk      related      to    its   derivative           activities




                                                                                                                                       38


GOLDMAN SACHS                        CO AND            SUBSIDIARIES

Notes            to Consolidated                                    Statement of Financial                                         Condition



Indemnities                   and Guarantees of Service                                                Providers             In        Other                  Representations                                      Warranties                     and

the    ordinary              course         of     business               the     firm            indemnifies              and         Indemnifications                        The      firm       provides           representations               and

                        certain        service                                    such            as                       and         warranties        to       counterparties             in    connection              with           variety       of
guarantees                                                  providers                                    clearing

                                trustees           and        administrators                     against        specified              commercial             transactions             and        occasionally             indemnifies           them
custody          agents
                                in   connection                   with    their                                             of                                            losses        caused            by        the    breach           of   those
potential losses                                                                      acting           as an    agent                  against      potential

or providing             services           to the firm or                 its    affiliates                                           representations              and       warranties                The    firm        may       also    provide

                                                                                                                                       indemnifications                  protecting          against           changes          in    or     adverse

The       firm                also    be     liable          to    some        clients           for    losses caused                  application           of     certain        U.S            tax     laws       in     connection            with
                  may
       acts        or         omissions                of                                   service            providers               ordinary-course                  transactions              such        as     securities           issuances
by                                                                third-party

including         sub-custodians                       and       third-party           brokers In addition                             borrowings            or derivatives

the    firm       is          member of payment                                clearing                and     settlement

networks                     well    as     securities                                       around            the    world            In    addition         the firm         may       provide           indemnifications                 to   some
                   as                                               exchanges
                                     the     finn                  meet        the                               of    such            counterparties              to    protect       them        in     the event           additional         taxes
that      may      require                                  to                          obligations

networks          and exchanges                    in   the event              of member defaults                                      are   owed       or    payments          are     withheld              due    either     to        change        in


                                                                                                                                       or an    adverse        application             of certain non-U.S                   tax      laws

In     connection                   with         its
                                                            prime          brokerage                    and      clearing

                                                                                                                       of              These      indemnifications                     generally              are    standard         contractual
businesses              the firm agrees                  to       clear    and        settle       on behalf                its



             the         transactions                  entered            into                   them        with      other           terms    and     are entered             into    in   the ordinary                 course     of     business
clients                                                                               by
                                                                                                                 of such               Generally         there are            no stated or notional                  amounts          included          in
brokerage              firms         The     firms obligations                              in    respect

                                                                                                                                       these    indemnifications                   and       the        contingencies             triggering        the
transactions             are secured               by the           assets        in    the clients              account

                                                                                                                                                        to                         are not expected                  to    occur      The firm          is
as well      as    any proceeds                  received            from the transactions                           cleared           obligation             indemnify

                              the     firm              behalf           of the client                  In   connection                unable     to    develop          an    estimate           of the maximum payout                          under
and    settled         by                        on

                                                                         the      firm                        issue     loan           these           guarantees                and              indemnifications                        However
with       joint        venture            investments                                            may
                                                                                                                                                              believes          that                                 the firm        will    have       to
                                    which                                                                                                                                                          unlikely
                                                       may be                                                                          management                                       it   is
guarantees             under                      it                     liable        in   the event           of fraud

                                     environmental                       liabilities             and     certain       other           make any          material             payments            under       these       arrangements and
misappropriation

                                     the    borrower                                                                                   no material           liabilities       related       to    these       arrangements               have    been
matters      involving
                                                                                                                                                              in        the     consolidated                  statement              of     financial
                                                                                                                                       recognized

The       finn    is     unable        to    develop               an     estimate               of the maximum                        condition        as    of   December            2012

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

will      have          to     make          any            material             payments                under         these

                               and     no         material               liabilities             related        to     these
arrangements
                       and     indemnifications                      have        been            recognized           in    the
guarantees

consolidated                 statement           of    financial condition                        as    of December

2012




                                                                                                                                  39


GOLDMAN           SACHS          CO AND            SUBSIDIARIES

Notes             to Consolidated                                    Statement of Financial                                                    Condition




Note      17
Transactions                         with              Related Parties


The       firm         enters                     transactions                       with                                     Inc    and            Amounts          payable        to and       receivable           from     such      affiliates        are
                                     into                                                              Group
affiliates        in    the    normal course                        of business                      as part               of market-               reflected       in     the consolidated             statement       of    financial        condition

             and general                                                                                                                            as    of    December          31 2012        as    set   forth    below
making                                operations




  in   millions                                                                                                                                                                                                              As    of   December       2012


 Assets

  Collateralized          agreements

        Securities        borrowed          includes           $32357                at    fair      value                                                                                                                                         77563

        Securities        purchased          under           agreements                   to resell           at    fair    value                                                                                                                  30587

  Receivables           from brokers             dealers            and    clearing               organizations                                                                                                                                       3809

  Receivables           from customers                 and     counterparties                                                                                                                                                                         1203

 Financial        instruments         owned             at   fair    value1                                                                                                                                                                           3057

 Other     assets


 Liabilities

 Unsecured             short-term                                                         the     current                       of unsecured-long         term
                                      borrowings                including                                           portion
                                                                                                                                                                                                                                                  $19170
        borrowings


 Collateralized           agreements

        Securities        loaned      includes               $31689            at   fair    value                                                                                                                                                  67684

        Securities        sold   under agreements                         to   repurchase                    at     fair   value                                                                                                                   33454

        Other secured            financings                                                                                                                                                                                                        23228

 Payables         to    brokers      dealers           and     clearing             organizations                                                                                                                                                     8639

 Payables         to    customers          and    counterparties                                                                                                                                                                                      7213

 Financial        instruments                     but    not                                                         value2                                                                                                                                798
                                      sold                      yet       purchased                   at     fair



 Subordinated            borrowings                                                                                                                                                                                                                21500

   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      $1.15     billion     of   such         issuances                  and        $1.91          billion    of   intercompany      derivative     contracts


   Consists        of    intercompany              derivative             contracts




The       firm                                     interest                income                     and                                in         The          firms        receives           and         provides          operational                 and
                        recognized                                                                                   expense

connection               with                                                                                                  loaned               administrative                         and        management          services        to   affiliates
                                     securities                 borrowed                             securities                                                               support

                                            under                                                       resell              securities              and allocates           costs    for   the services         provided
securities          purchased                                 agreements                        to


sold     under          agreements                to     repurchase                         unsecured                      short     and

           term                                          other                 secured                                               and            The        firm enters        into   various                 of   activities        with   affiliates
long                      borrowings                                                                       financings                                                                                  types

                                                                                                                                                                                                   and       receives     revenues         from       such
subordinated              borrowings from Group                                      Inc                                                            and        allocates     revenues       to

                                                                                                                                                    affiliates      for    their    participation




                                                                                                                                              40


      GOLDMAN           SACHS             CO AND               SUBSIDIARIES

      Notes            to Consolidated                                      Statement of Financial                                              Condition



      Note      18
      Income Taxes

      Provision              for     Income                   Taxes
      Effective         November 29 2003                                   GSCo               elected         to   be taxed              as         Income        taxes           are   provided           for using           the        asset     and      liability


                                            U.S              federal        income              tax                               As                method        under           which         deferred          tax    assets           and      liabilities         are
           corporation              for                                                                   purposes
                               for                                             the      firm                                 to    U.S                                      for                        differences              between            the     financial
      corporation                         tax        purposes                                        is    subject                                  recognized                     temporary

      federal         and      various               state            and       local        income            taxes          on       its          reporting          and tax bases             of   assets      and        liabilities



      earnings                The         firm          is       also       subject             to        taxes     in       foreign

                               on certain of                    its                                The firm         is      included                Deferred               Income         Taxes
      jurisdictions                                                    operations
                                                                                                                                                    Deferred          income          taxes      reflect        the net tax          effects       of temporary
      with                    Inc and subsidiaries                              in   the consolidated                    corporate
               Group
                                                                                                                                                    differences             between        the     financial           reporting           and      tax    bases        of
      federal       tax      return         as well             as the          consolidated/combined                              state

                                                                                                                                                    assets      and         liabilities         These       temporary                differences           result       in
      and     local     returns              The             firm      computes              its     tax    liability         as    if    it


                                                                                                                                                    taxable           or     deductible            amounts              in     future           years      and         are
      was                     tax return                on            modified                                                    basis
              filing                                                                       separate           company
                                                                                                                                                    measured           using        the tax        rates        and     laws       that     will     be    in    effect
      and     settles        such     liability                with       Group            Inc pursuant                to     the tax

                                                     To         the                        the       firm                            tax
                                                                                                                                                    when       such          differences           are      expected            to    reverse             Valuation
      sharing         agreement                                           extent                              generates
                                                                                                                                                    allowances              are established           to    reduce           deferred       tax     assets      to     the
      benefits         from         losses              it     will       be     reimbursed                 by     Group            Inc
                                                                                                                                                    amount        that       more                  than     not       will    be     realized          During the
                        to     the        tax        sharing              agreement                       During         2012        the                                                likely
      pursuant
                                                                                                                                                              ended           December             2012           the        firm        did     not      record
      firms         method            of                                    state          and        local        income            tax            year
                                                allocating
                                                                                                                                                    valuation          allowance           to    reduce         deferred           tax     assets       Tax      assets
                        was           modified                       to        reflect             its      share            of      the
      liability

                                                                                                income           tax                                and      liabilities       are presented               as     component                of    Other        assets
      consolidated/combined                                  state        and        local                                  liability

                                                                                                                                                    and Other               liabilities     and accrued               expenses              respectively
      This     change         did not           have                 material          effect        on the statement                    of

      financial        condition
                                                                                                                                                    The       table         below                           the       significant              components               of
                                                                                                                                                                                         presents

                                                                                                                                                    deferred          tax    assets     and      liabilities




      in   millions                                                                                                                                                                                                            As     of   December             2012


      Deferred        tax     assets

                               and        benefits                                                                                                                                                                                                               812
      Compensation

      Unrealized        losses                                                                                                                                                                                                                                   145

                                                                                                                                                                                                                                                                  65
      ASC     740     asset    related          to   unrecognized                    tax   benefits

                                                                                                                                                                                                                                                                 201
._J   Other     net


      Total    deferred        tax        assets                                                                                                                                                                                                           $1223



                             and    amortization                                                                                                                                                                                                                 237
      Depreciation

               deferred        tax        liabilities
                                                                                                                                                                                                                                                                 237
      Total




                                                                                                                                               41


GOLDMAN          SACHS             CO AND         SUBSIDIARIES

Notes to Consolidated                                           Statement                             of Financial                      Condition




Unrecognized                   Tax Benefits
The        firm        recognizes             tax         positions                 in         the         consolidated                  In        the      ordinary             course         of business                   the     firm            may      also        be

statement         of financial              condition             only       when               it    is    more        likely           subject             to            concentration                   of     credit        risk         to            particular

than    not     that    the position              will     be sustained                   on examination                      by         counterparty                    borrower or issuer                       including                sovereign              issuers

the relevant           taxing        authority           based on the technical                                  merits       of         or    to        particular clearing                     house or exchange

the position                  position           that    meets          this        standard               is    measured

at   the                 amount         of benefit              that    will        more             likely       than       not         The         table        below          presents            the    credit       concentrations                     in     assets
           largest

be     realized         on         settlement                                                    established                 for         held               the    firm As of December                             2012         the firm did not                    have
                                                                  liability               is
                                                                                                                                                     by
differences            between           positions               taken          in               tax        return           and         credit          exposure           to      any    other counterparty                       that     exceeded              2%      of

amounts          recognized            in    the statement                    of     financial                  condition                total       assets

As     of December                 2012      the firm recorded                                  liability         of     $161

million related               to    uncertainty             in    income                 taxes             In    addition
                                                                                                                                              in   millions                                                                    As     of    December              2012
the accrued            liability      for    interest           expense             related           to    income           tax
                                                                                                                                         U.S government                    and      federal
matters       was      $25     million        as    of December                     2012
                                                                                                                                               agency        obligations

                                                                                                                                               of   total    assets                                                                                               19.28%

Regulatory               Tax Examinations
                                                                                                                                               Substantially             all     included        in    Financial          instruments                 owned         at    fair

All years         subsequent            to       and     including             2005             for        U.S        Federal
                                                                                                                                               value         and      Cash           and       securities                                                                and
                                                                                                                                                                                                                  segregated               for        regulatory

and     2004          for    New       York             State      and         City             remain            open        to               other        purposes

examination             by the taxing              authorities
                                                                                                                                         To         reduce            credit             exposures               the       firm            may           enter           into


                                                                                                                                         agreements                 with         counterparties                 that     permit            the firm          to    offset

In     January              2013       Group              Inc           was          accepted                    into        the                                                                                                                                   and/or
                                                                                                                                         receivables                 and         payables             with        such         counterparties

Compliance             Assurance             Process
                                                                program             by         the    IRS        for    2013
                                                                                                                                         enable             the       firm          to      obtain          collateral               on         an      upfront            or
This     program            will    allow        Group          Inc      to     work             with           the    IRS    to
                                                                                                                                         contingent                basis            Collateral             obtained           by      the        firm related              to


identify        and     resolve        potential           U.S          Federal                tax     issues before
                                                                                                                                         derivative                                                         cash        and           held               the firm or
                                                                                                                                                                  assets       is
                                                                                                                                                                                    principally                                 is                by
the              of tax returns                  The      2013         tax     return            will       be the        first
       filing                                                                                                                                                         custodian                Collateral obtained                     by       the     firm related
                                                                                                                                              third-party
return     examined            under        this    program                                                                              to    resale                                     and     securities            borrowed                 transactions               is
                                                                                                                                                              agreements

                                                                                                                                         primarily                U.S          government               and        federal           agency             obligations
Note       19                                                                                                                                                                                                                                            See      Note
                                                                                                                                         and non-U.S                     government               and       agency obligations
Credit Concentrations                                                                                                                                                                           about       collateralized                                               and
                                                                                                                                         for        further        information                                                               agreements
Credit      concentrations               may            arise     from         market making                            client
                                                                                                                                         financings
facilitation                 investing                   underwriting                                lending                 and

collateralized              transactions            and     may be impacted                                 by    changes
                                                                                                                                         The table below                       presents         U.S government                        and        federal          agency
in   economic               industry        or    political            factors            The          firm seeks             to
                                                                                                                                         obligations                and non-U.S                   government                  and     agency            obligations
                credit        risk     by        actively          monitoring                        exposures               and
mitigate                                                                                                                                 that       collateralize                resale                                  and         securities            borrowed
                                                                                                                                                                                                agreements
obtaining              collateral            from               counterparties                             as     deemed
                                                                                                                                         transactions                    including                those            in      Cash                 and        securities

appropriate                                                                                                                                                                                       and       other                                      Because            the
                                                                                                                                         segregated                for     regulatory                                    purposes
                                                                                                                                         firms primary                      credit                           on        such     transactions                 is    to     the
                                                                                                                                                                                          exposure
While       the        finns         activities            expose              it        to      many            different
                                                                                                                                                                      to    the transaction                  the firm           would             be     exposed           to
                                                                                                                                         counterparty
industries        and        counterparties                 the        firm         routinely               executes
                                                                                                                                         the       collateral         issuer                    in    the event          of counterparty                    default
                                                                                                                                                                                     only
high     volume         of transactions                  with      asset       managers                     investment

funds         commercial               banks              brokers            and               dealers            clearing

houses        and       exchanges                which           results            in         significant              credit
                                                                                                                                         in   millions                                                                               As    of    December            2012
concentrations                                                                                                                                                             and
                                                                                                                                         U.S government                             federal

                                                                                                                                               gytions                                                                                                      $102195
                                                                                                                                         Non-U.S            government              and

                                                                                                                                              agency        obligations                                                                                            68017

                                                                                                                                                                                          of    securities         issued       by     the        governments               of
                                                                                                                                               Principally          consisting

                                                                                                                                               France        and     Canada




                                                                                                                                   42


      GOLDMAN SACHS                          CO AND           SUBSIDIARIES

      Notes               to Consolidated                                       Statement of Financial                                              Condition




      Note     20

      Legal Proceedings

      The     firm        is     involved              in         number               of judicial                 regulatory               and         securities              in     each        of     cases                   ii and              iii        taking            into


      arbitration                                                                               matters                   arising             in        account         any          factors       believed            to    be relevant                 to    the particular
                                 proceedings                      concerning

                                                                       of the firms businesses                                                                                                                   of           type             As of the date hereof
      connection               with      the conduct                                                                                  Many              proceeding              or proceedings                        that


                                                                                                     and                                                        firm        has         estimated             the                            end     of        the                   of
      of these            proceedings                  are       in    early           stages                      many of                these         the                                                             upper                                          range

                   seek                                               amount             of                                                                                                                                   loss           for     such
      cases                 an indeterminate                                                  damages                                                   reasonably               possible              aggregate                                                 proceedings

                                                                                                                                                        where                                       has      been           able        to        estimate             range         of
                                                                                                                                                                     management
      Under             ASC       450         an       event                                                                         if     the         reasonably              possible                                loss       to        be approximately                  $3.5
                                                                      is     reasonably                       possible                                                                             aggregate

      chance            of the future                  event          or    events            occurring              is    more             than        billion        Because              more than             one Group                  Inc subsidiary                 may be
      remote but               less     than           likely          and         an    event           is    remote                if     the         named        in         particular             proceeding the sum of the upper end of
      chance            of the          future           event             or     events        occurring                  is    slight                 the range          of reasonably                    possible          loss           amounts           for    all
                                                                                                                                                                                                                                                                             Group
                                                                                                                                                                                                                            the                    end of the range                  of
                                                          upper end of the range of reasonably
      Thus         references                to    the                                                                                                  Inc     subsidiaries                will       not equal                  upper
                         loss     for cases              in which the firm is able to estimate                                                          the consolidated                    reasonably                possible            loss      reported          by Group
      possible

                   of reasonably                   possible                loss     mean         the upper                 end        of     the        Inc     in   its   financial           statements
      range

                   of     loss     for cases             for      which            the firm believes                       the       risk     of
      range
                                  than                         The          amounts            reserved                                   such          Management                          generally             unable             to       estimate                 range         of
      loss    is    more                      slight                                                                  against                                                          is



      matters           are      not                              as                                          the                    end      of        reasonably              possible            loss      for       proceedings                   other          than     those
                                         significant                        compared                to               upper

                          of reasonably                                         loss                                                                    included           in    the estimate               above            including              where              plaintiffs
      the range                                             possible
                                                                                                                                                        have      not        claimed              an      amount             of money                 damages                unless

      These                                       include             but are not               limited             to the firms                        management                   can    otherwise             determine               an      appropriate            amount
                    proceedings

      role     in         certain                                               activities                research              matters                 ii      the        proceedings                  are       in         early           stages            iii      there         is
                                             underwriting
._J                                          mutual fund                     and        securities-related                       actions                                         as    to     the likelihood                 of           class      being        certified          or
      treasury           matters                                                                                                                        uncertainty

      With     respect            to    proceedings                    for      which          management                       has       been          the ultimate             size       of the class              iv      there          is   uncertainty           as    to    the

      able              estimate                             of reasonably                                          loss    where                       outcome            of         pending             appeals            or      motions                          there         are
              to                              range                                           possible

      plaintiffs          have         claimed           an      amount                of money damages                              ii      the        significant             factual        issues       to    be resolved                     and/or       vi      there are

      finn    is
                    being         sued        by purchasers                       in    an    underwriting                 and         is    not        novel        legal           issues        presented                  However                    for    these         cases

                   indemnified                                              that        the firm believes                       will                    management                   does      not      believe              based           on     currently          available
      being                                       by        party                                                                           pay
                                                                                                                                                                                     that   the     outcomes            of such                                        will    have
      any judgment                      or    iii the purchasers                              are    demanding                   that        the        information                                                                          proceedings

      firm                                   securities                                                  has        estimated                the           material             adverse            effect        on    the        firms            financial          condition
               repurchase                                              management
                   end         of the range                 of reasonably                                                                                            the        outcomes            could        be material                 to    the    firms operating
      upper                                                                                    possible             loss        as     being            though
                                                            of              the                      of                                                              for                                                                                 in                         the
      equal        to            in    the case                                    amount                      money damages                            results              any        particular          period            depending                        part    upon

      claimed                     in    the case             of       ii        the      amount               of    securities              that        operating          results          for    such     period

      the firm sold                in    the underwritings                             and               in    the case          of iii

      the                   that                                                   for        the    securities                 less         the
              price                     purchasers                    paid

      estimated            value                            as    of December                       2012           of the relevant
                                          if      any




                                                                                                                                                   43


     GOLDMAN        SACHS              CO AND       SUBSIDIARIES

     Notes          to    Consolidated                             Statement of Financial                                 Condition



     Note    21                                                                                                               Note 22

     Employee                   Benefit                 Plans                                                                 Employee                     Incentive                      Plans


     The     firms         employees                participate             in     various         Group          Inc         Stock Incentive                      Plan

                         pension             plans        and      certain        other      postretirement                   Group       Inc            sponsors               stock           incentive              plan        The      Goldman
     sponsored

     benefit   plans primarily                     healthcare          and       life   insurance            Group            Sachs       Amended                and       Restated                  Stock        Incentive              Plan        SIP
     Inc     also                            certain        benefits         to     former         or     inactive            which                                for                          of       incentive                stock          options
                     provides                                                                                                                 provides                         grants

                                            retirement              The      cost       of these                   are        nonqualified                 stock           options                    stock            appreciation                  rights
     employees           prior        to                                                                plans

     allocated            the firm                              Inc                                                           dividend                                                     restricted              stock          RSUs            awards
                    to                      by Group                                                                                            equivalent               rights

                                                                                                                              with                                 conditions                 and       other          share-based               awards
                                                                                                                                       performance
     Defined         Benefit Pension Plans                                and Postretirement                                  In    the second             quarter         of 2003 the SIP was                                 approved              by the

     Plans                                                                                                                    firms shareholders                         effective              for    grants          after      April              2003

     Employees            of     certain           non-U.S            subsidiaries              participate         in        The     SIP      was         amended              and restated                  effective            December                31
                                Inc defined                                                                                                                                                     December                20 2012                      extend
                                                                                        plans These                           2008       and                     amended                 on
                                                          benefit                                                                               further                                                                                     to
     various    Group                                                 pension                                  plans

                                        benefits        based on years of credited                         service            its   termination             date        until       Group             Inc.s       2013         Annual           Meeting
     generally       provide

     and                                   of the employees                                  compensation                     of Shareholders                 at   which            meeting                  new       equity      compensation
               percentage                                                    eligible

                Inc       maintains                     defined        benefit           pension         plan      for        plan    will     be subject           to     approval              by Group Inc.s                    shareholders
     Group
                                                                                                U.K
--

     certain   U.K         employees                As of        April       2008         the             defined

     benefit              was closed               to   new     participants              but   will     continue             Restricted Stock Units
               plan

     to   accrue    benefits           for existing participants                        These      plans do not               Group           Inc         grants         RSUs              to        employees                 under        the        SIP
     have      material                            on     the   firms consolidated                      results     of                              in    connection                 with                                   compensation                  and
                                      impact                                                                                  primarily                                                           year-end

     operations                                                                                                               acquisitions               RSUs       are valued                   based         on the closing                    price      of

                                                                                                                              the                           shares                   the        date     of                                               into
                                                                                                                                      underlying                           on                                     grant       after      taking

               Inc also maintains                           defined       benefit                                  for        account                                   discount           for        any      applicable             post-vesting
     Group                                                                                pension         plan                                      liquidity


     substantially     U.S employees hired prior to November
                           all                                                                                                transfer         restrictions                Year-end                   RSUs             generally            vest          and

     2003      As of November 2004 this plan was closed  to new                                                               underlying             shares        of common                    stock        deliver as outlined                     in    the


     participants         and         frozen       such     that      existing          participants         would            applicable             RSU           agreements                    Employee                   RSU          agreements

                                                                   the  firm                                                                                            that                                   accelerated                 in     certain
     not    accrue     any additional   benefits   In   addition                                                              generally             provide                         vesting             is



     maintains       unfunded postretirement    benefit  plans that provide                                                   circumstances                 such          as        on     retirement                  death       and      extended

     medical        and        life        insurance         for                        retirees       and      their         absence               The     subsequent                   amortization                  of    the    cost        of    these
                                                                      eligible

                         covered            under these                 These plans do not                                    RSUs       is    allocated           to     the firm              by Group               Inc        Delivery           of the
     dependents                                                programs
     have      material               impact       on     the firms consolidated results of                                   underlying             shares        of      common                 stock           is    conditioned               on       the

                                                                                                                              grantees         satisfying               certain           vesting             and       other         requirements
     operations
                                                                                                                              outlined         in   the    award agreements

     Defined        Contribution                    Plans

     The    firm contributes                 to    Group        Inc     employer-sponsored U.S                                Stock Options
     and     non-U.S                  defined           contribution                               The         firms          Stock       options           generally               vest        as     outlined              in    the     applicable
                                                                                   plans
     contribution                 these                     was       $69        million         for     the                  stock      option                                     Options             granted             in    February            2010
                           to                     plans                                                           year                                    agreement
     ended     December               2012                                                                                    generally             became          exercisable                   in     one-third                installments              in


                                                                                                                                              2011         January         2012           and January                  2013       and     will       expire
                                                                                                                              January

                                                                                                                              in     February             2014           In         general             options              granted            prior       to


                                                                                                                              February          2010        expire             on    the        tenth        anniversary              of    the       grant

                                                                                                                              date although                 they        may be             subject           to    earlier         termination              or

                                                                                                                              cancellation               under      certain              circumstances                  in     accordance              with

                                                                                                                              the     terms          of     the         SIP          and         the         applicable             stock            option

                                                                                                                              agreement


                                                                                                                              Total      employee                share-based                  compensation                    expense net of
                                                                                                                              forfeitures            was      $581         million              for     the                  ended December
                                                                                                                                                                                                                  year

                                                                                                                              2012




                                                                                                                         44


GOLDMAN              SACHS              CO AND           SUBSIDIARIES

Notes               to Consolidated                                   Statement of Financial                                     Condition



Note 23

Net Capital Requirements


GSCo                     is                                 U.S         broker-dealer                   and      futures             The      Dodd      Frank        Act    contains        provisions          that    require      the
                                       registered

commission                     merchant                          to    Rule       5c3-         of the Securities                     registration        of    all   swap         dealers        major    swap         participants
                                                  subject

and       Exchange                    Commission                 SEC             and       Rule         1.17      of the             security-based        swap dealers              and     major security-based                  swap

                                Futures                               Commission               CFTC               which              participants         As of December              2012       the firm has registered              as
Commodity                                         Trading

                    uniform                 minimum              net                                                      as              swap       dealer      under      the     CFTC         rules     The         finn   will    be
specify                                                                     capital          requirements
                                                                                                                                                to   regulatory                     requirements          which        have   not yet
defmed              for       their     registrants          and        also      effectively            require        that         subject                            capital


                                        of the registrants                  assets     be kept           in relatively               been     finalized    by the       CFTC       and      SEC
     significant part

liquid     form                  GSCo              has      elected         to    compute            net      capital     in

                                                                        Net                                                          Note     24
accordance                    with      the      Alternative                      Capital          Requirement
as permitted                   by Rule            5c3-           As    of    December              2012        GSCo                  Subsequent Events
has     regulatory                    net     capital        as       defmed           by     Rule           15c3-l       of

$14.12              billion             which        exceeded               the      amount             required          by                                   has      evaluated           whether          any        events        or
                                                                                                                                     Management
$12.42         billion                Certain       other     subsidiaries              of    GSCo              are also             transactions        occurred        subsequent         to   the date       of the statement

subject             to        capital        adequacy             requirements                promulgated                 by         of     financial    condition         and     through        February         28 2013 and
authorities                   of the        countries        in       which          they      operate            As of              determined         that    there    were no material              events     or transactions

December                  2012          these      subsidiaries              were       in    compliance with                        that     would                                               or     disclosure           in     this
                                                                                                                                                           require         recognition
their     local           capital           adequacy         requirements                     As of December                         consolidated         statement        of   financial    condition

2012       GSCo                        made              computation              related          to    the     reserve

requirement                    for     Proprietary          Accounts              of Introducing                Brokers

PAIB                that        indicated           the     firms            PAIB           credits          exceed       its



PAIB       debits                    The         amount      held        on      deposit         in     the     Reserve

Bank      at    December                    2012     was     $421        million



In      addition                  to        its     alternative                  minimum                net       capital


requirements                     GSCo               is    also        required        to     hold       tentative        net

capital        in        excess          of $1       billion          and     net      capital          in    excess      of

$500       million               in     accordance           with        the      market and                 credit     risk


standards                of Appendix                       of Rule            l5c3-l          GSCo                is    also

required            to        notify       the     SEC      in    the       event      that    its      tentative        net

capital        is    less       than        $5    billion     As       of   December               2012        GSCo
had     tentative               net     capital      and net           capital        in    excess        of both        the

minimum and the notification                                     requirements




                                                                                                                                45


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     2011    PricewaterhouseCoopers                    LLP    All   rights   reserved   in   this   document            PwC    refers   to   PricewaterhouseCoopers   LLP   Delaware   limited   liability   partnership   which   is   member   firm


of   PricewaterhouseCoopers                   International         Limited    each   member        firm   of   which    is   separate       legal   entity



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