UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-Q
È QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2021
or

‘ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period fromtoCommission File Number: 001-14965

The Goldman Sachs Group, Inc.
(Exact name of registrant as specified in its charter)

Delaware13-4019460(State or other jurisdiction ofincorporation or organization)(I.R.S. Employer
Identification No.)

200 West Street, New York, N.Y.

10282

(Address of principal executive offices)(Zip Code)(212) 902-1000(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Exchange
Trading on which
Symbol registered

Title of each class
Common stock, par value $.01 per share

GS

NYSE

Depositary Shares, Each Representing 1/1,000th Interest in a Share of Floating Rate Non-Cumulative Preferred Stock, Series A

GS PrA

NYSE

Depositary Shares, Each Representing 1/1,000th Interest in a Share of Floating Rate Non-Cumulative Preferred Stock, Series C

GS PrC

NYSE

Depositary Shares, Each Representing 1/1,000th Interest in a Share of Floating Rate Non-Cumulative Preferred Stock, Series D

GS PrD

NYSE

Depositary Shares, Each Representing 1/1,000th Interest in a Share of 5.50% Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series J

GS PrJ

NYSE

Depositary Shares, Each Representing 1/1,000th Interest in a Share of 6.375% Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series K GS PrK

NYSEDepositary Shares, Each Representing 1/1,000th Interest in a Share of 6.30% Non-Cumulative Preferred Stock, Series N

GS PrN

NYSE

5.793% Fixed-to-Floating Rate Normal Automatic Preferred Enhanced Capital Securities of Goldman Sachs Capital II

GS/43PE

NYSE

Floating Rate Normal Automatic Preferred Enhanced Capital Securities of Goldman Sachs Capital III

GS/43PFNYSE

Medium-Term Notes, Series F, Callable Fixed and Floating Rate Notes due 2031 of GS Finance Corp.

GS/31B

NYSE

Medium-Term Notes, Series E, Index-Linked Notes due 2028 of GS Finance Corp.

FRLG NYSE Arca

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. È Yes ‘ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 ofRegulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such
files). È Yes ‘ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an
emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growthcompany” in Rule 12b-2 of the Exchange Act.
Large accelerated filer È

Accelerated filer ‘

Non-accelerated filer ‘

Smaller reporting company ‘Emerging growth company ‘

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new
or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ‘
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ‘ Yes È No
As of July 23, 2021, there were 337,097,488 shares of the registrant’s common stock outstanding.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESQUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2021

INDEX
Form 10-Q Item Number

Page No.

PART IFINANCIAL INFORMATION

1Item 1Page No.
Report of Independent Registered Public Accounting Firm

95

Statistical Disclosures

96

Item 2Financial Statements (Unaudited)1

Consolidated Statements of Earnings

1

Management’s Discussion and Analysis of Financial Condition
and Results of Operations
98

Consolidated Statements of Comprehensive Income

1

Introduction

98

Consolidated Balance Sheets

2

Executive Overview

98

Consolidated Statements of Changes in Shareholders’ Equity

3

Business Environment

99

Consolidated Statements of Cash Flows4

Critical Accounting Policies

100

Notes to Consolidated Financial Statements

5

Use of Estimates

102

Note 1. Description of Business

5

Recent Accounting Developments

102

Note 2. Basis of Presentation

5

Results of Operations

102

Note 3. Significant Accounting Policies

6

Balance Sheet and Funding Sources

120

Note 4. Fair Value Measurements

11

Equity Capital Management and Regulatory Capital

123

Note 5. Trading Assets and Liabilities

16

Regulatory and Other Matters

127

Note 6. Trading Cash Instruments

17

Off-Balance Sheet Arrangements and Contractual Obligations 130

Note 7. Derivatives and Hedging Activities

20

Risk Management

Note 8. Investments

30

Overview and Structure of Risk Management

131

Note 9. Loans

36

Liquidity Risk Management

137

Note 10. Fair Value Option

46

Market Risk Management

143

Note 11. Collateralized Agreements and Financings

51

Credit Risk Management

147

Note 12. Other Assets

55

Operational Risk Management

156

Note 13. Deposits

57

Model Risk Management

157

Note 14. Unsecured Borrowings

58

Available Information

158

Note 15. Other Liabilities

61

Note 16. Securitization Activities

61

Cautionary Statement Pursuant to the U.S. Private Securities
Litigation Reform Act of 1995

159

Note 17. Variable Interest Entities

63

Item 3Note 18. Commitments, Contingencies and Guarantees

66

Quantitative and Qualitative Disclosures About Market Risk 162

Note 19. Shareholders’ Equity

70

Item 4Note 20. Regulation and Capital Adequacy

73

Controls and Procedures

Note 21. Earnings Per Common Share81

PART II

Note 22. Transactions with Affiliated Funds

81

OTHER INFORMATION

Note 23. Interest Income and Interest Expense

82

Item 1

Note 24. Income Taxes

82

Legal Proceedings

Note 25. Business Segments

83

Item 2

Note 26. Credit Concentrations

86

Unregistered Sales of Equity Securities and Use of Proceeds

Note 27. Legal Proceedings

86

Item 6

131

162
162
162
162

Exhibits

163

SIGNATURES

163

Goldman Sachs June 2021 Form 10-Q

PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Consolidated Statements of Earnings(Unaudited)in millions, except per share amounts

Three Months
Ended June

Six Months
Ended June

2021

2020

2021

2020

Revenues
Investment banking
Investment management
Commissions and fees
Market making
Other principal transactions
Total non-interest revenues$ 3,450
1,905
833
3,274
4,297
13,759$ 2,733
1,635
875
5,787
1,321
12,351$ 7,016
3,701
1,906
9,167
8,191
29,981$ 4,475
3,403
1,895
9,469
539
19,781

Interest income
Interest expense
Net interest income
Total net revenues

2,939
1,310
1,629
15,388

3,034
2,090
944
13,295

5,993
2,882
3,111
33,092

7,784
5,527
2,257
22,038

(92)

1,590

(162)

2,527

5,263
1,125
115
371
520
241
344
661
8,640

4,478
1,014
89
345
499
233
311
3,445
10,414

11,306
2,381
195
746
1,018
488
704
1,239
18,077

7,713
2,044
242
666
936
471
658
4,142
16,872Pre-tax earnings
Provision for taxes
Net earnings
Preferred stock dividends
Net earnings applicable to common shareholders

6,840
1,354
5,486
139
$ 5,347

1,291
918
373
176
$ 197

15,1772,855
12,322264$12,058

2,639
1,053
1,586
266
$ 1,320

Earnings per common share
Basic
Diluted$ 15.22$ 15.02

$
$

0.53
0.53

$ 34.06$ 33.64

$
$

355.7
355.7

353.6
358.4

Provision for credit losses
Operating expenses
Compensation and benefits
Transaction based
Market development
Communications and technology
Depreciation and amortization
Occupancy
Professional fees
Other expenses
Total operating expenses

Average common shares
Basic
Diluted

350.8
356.0

3.66
3.66
356.8
356.8

Consolidated Statements of Comprehensive Income(Unaudited)Three Months
Ended June
$ in millions

Net earnings
Other comprehensive income/(loss) adjustments, net of tax:
Currency translation
Debt valuation adjustment
Pension and postretirement liabilities
Available-for-sale securities
Other comprehensive income/(loss)
Comprehensive income/(loss)

The accompanying notes are an integral part of these consolidated financial statements.

1

Goldman Sachs June 2021 Form 10-Q

2021

Six Months
Ended June

2020

2021

2020

373

$12,322$ 1,586(44)(2,218)(4)(12)(2,278)$ (1,905)

(16)
98
7
(544)
(455)
$11,867

(61)
696
3
505
1,143
$ 2,729$ 5,486

$

(16)
117
–
84
185
$ 5,671

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Consolidated Balance Sheets(Unaudited)
As of
June
2021

December2020$ 240,289$ 155,842

154,123
196,254
162,094375,91790,727130,537
37,981$1,387,922

108,060
142,160
121,331393,630
88,445
116,115
37,445$1,163,028$ 306,142$ 259,962

151,692
38,157
27,633
238,697
199,093
61,740238,930
23,9481,286,032

126,571
21,62125,755
190,658
153,727
52,870213,481
22,451
1,067,096

Shareholders’ equity
Preferred stock; aggregate liquidation preference of $9,203 and $11,203
9,203
Common stock; 906,379,865 and 901,692,039 shares issued, and 337,276,277 and 344,088,725 shares outstanding
9
Share-based awards
3,759
Nonvoting common stock; no shares issued and outstanding–
Additional paid-in capital
56,390Retained earnings
124,051
Accumulated other comprehensive loss
(1,889)Stock held in treasury, at cost; 569,103,590 and 557,603,316 shares(89,633)
Total shareholders’ equity
101,890
Total liabilities and shareholders’ equity$1,387,922

11,2039
3,468–
55,679112,947(1,434)(85,940)
95,932$1,163,028$ in millions

AssetsCash and cash equivalents
Collateralized agreements:
Securities purchased under agreements to resell (at fair value)
Securities borrowed (includes $41,076 and $28,898 at fair value)
Customer and other receivables (includes $57 and $82 at fair value)
Trading assets (at fair value and includes $74,597 and $69,031 pledged as collateral)
Investments (includes $85,021 and $82,778 at fair value, and $13,266 and $13,375 pledged as collateral)
Loans (net of allowance of $3,271 and $3,874, and includes $12,516 and $13,625 at fair value)
Other assets
Total assets
Liabilities and shareholders’ equity
Deposits (includes $33,558 and $16,176 at fair value)
Collateralized financings:
Securities sold under agreements to repurchase (at fair value)
Securities loaned (includes $6,301 and $1,053 at fair value)
Other secured financings (includes $26,170 and $24,126 at fair value)
Customer and other payables
Trading liabilities (at fair value)
Unsecured short-term borrowings (includes $31,871 and $26,750 at fair value)
Unsecured long-term borrowings (includes $44,396 and $40,911 at fair value)
Other liabilities (includes $164 and $263 at fair value)
Total liabilities
Commitments, contingencies and guarantees

The accompanying notes are an integral part of these consolidated financial statements.

Goldman Sachs June 2021 Form 10-Q

2

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Consolidated Statements of Changes in Shareholders’ Equity(Unaudited)$ in millions

Three Months
Ended June

Six Months
Ended June

2021

2021

2020

Preferred stock
Beginning balance$ 9,203 $ 11,203
Issued675–
Redeemed(675)–
Ending balance
9,203
11,203
Common stock
Beginning balance
99Issued––Ending balance
9
9
Share-based awards
Beginning balance
3,608
3,037
Issuance and amortization of share-based awards
219
197
Delivery of common stock underlying share-based awards(7)(17)
Forfeiture of share-based awards
(61)
(14)
Ending balance
3,759
3,203
Additional paid-in capital
Beginning balance
56,34055,621
Delivery of common stock underlying share-based awards
63
32
Cancellation of share-based awards in satisfaction of withholding tax requirements
(32)
(16)
Issuance costs of redeemed preferred stock
19
–
Other
–
–
Ending balance
56,39055,637Retained earnings
Beginning balance, as previously reported
119,210 106,501
Cumulative effect of change in accounting principle for current expected credit losses, net of tax––
Beginning balance, adjusted
119,210 106,501
Net earnings
5,486
373
Accretion of redeemable noncontrolling interests(65)–
Dividends and dividend equivalents declared on common stock and share-based awards
(441)
(450)
Dividends declared on preferred stock
(119)
(176)
Preferred stock redemption premium(20)–
Ending balance
124,051 106,248
Accumulated other comprehensive income/(loss)
Beginning balance(2,074)
1,937
Other comprehensive income/(loss)
185(2,278)Ending balance(1,889)(341)
Stock held in treasury, at cost
Beginning balance(88,632) (85,929)
Repurchased(1,000)–Reissued
–
–
Other
(1)
(1)
Ending balance(89,633) (85,930)
Total shareholders’ equity$101,890 $ 90,029

The accompanying notes are an integral part of these consolidated financial statements.

3

Goldman Sachs June 2021 Form 10-Q

2020

$ 11,203 $ 11,203
675
350(2,675)(350)
9,203
11,203
9
–
9

9
–
9

3,468
1,978
(1,604)
(83)
3,759

3,195
1,594
(1,564)(22)
3,203

55,679
1,653
(969)
26
1
56,39054,883
1,573
(819)
–
–
55,637112,947 106,465–(638)
112,947 105,827
12,322
1,586
(65)
–
(889)
(899)
(223)
(265)
(41)
(1)
124,051 106,248(1,434)(455)(1,889)(1,484)
1,143
(341)

(85,940) (84,006)(3,700)(1,928)
10
10
(3)
(6)
(89,633) (85,930)$101,890 $ 90,029

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows(Unaudited)
Six Months
Ended June
$ in millions

2021

Cash flows from operating activities
Net earnings
Adjustments to reconcile net earnings to net cash provided by/(used for) operating activities:
Depreciation and amortization
Share-based compensation
Gain related to extinguishment of unsecured borrowings
Provision for credit losses
Changes in operating assets and liabilities:
Customer and other receivables and payables, net
Collateralized transactions (excluding other secured financings), net
Trading assets
Trading liabilities
Loans held for sale, net
Other, net
Net cash provided by/(used for) operating activities
Cash flows from investing activities
Purchase of property, leasehold improvements and equipment
Proceeds from sales of property, leasehold improvements and equipment
Purchase of investments
Proceeds from sales and paydowns of investments
Loans (excluding loans held for sale), net
Net cash used for investing activities
Cash flows from financing activities
Unsecured short-term borrowings, net
Other secured financings (short-term), net
Proceeds from issuance of other secured financings (long-term)
Repayment of other secured financings (long-term), including the current portion
Purchase of Trust Preferred securities
Proceeds from issuance of unsecured long-term borrowings
Repayment of unsecured long-term borrowings, including the current portion
Derivative contracts with a financing element, net
Deposits, net
Preferred stock redemption
Common stock repurchased
Settlement of share-based awards in satisfaction of withholding tax requirements
Dividends and dividend equivalents paid on common stock, preferred stock and share-based awards
Proceeds from issuance of preferred stock, net of issuance costs
Other financing, net
Net cash provided by financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents, beginning balance
Cash and cash equivalents, ending balance
Supplemental disclosures:
Cash payments for interest, net of capitalized interest
Cash payments for income taxes, net$ 12,322

2020

$

1,586

1,018
1,961
–
(162)

936
1,580
(1)
2,527

7,272
(58,500)
17,38745,064435(11,513)
15,284(7,490)(79,763)(38,234)
53,472
2,026(1,317)(64,678)(2,665)735(19,716)
23,569(13,631)(11,708)(3,908)822(28,287)
15,643(12,699)(28,429)

7,513
2,992
2,879
(1,500)–52,897(23,136)302
46,334(2,675)(3,700)(970)(1,111)675
371
80,871
84,447
155,842$240,289

5,449
4,250
3,813
(997)
(11)
32,099(28,704)
249
79,525(350)(1,928)(820)(1,164)349
400
92,160(947)
133,546$132,599

$
$

$
$

3,023
3,299

5,855
773

See Notes 12 and 16 for information about non-cash activities.

The accompanying notes are an integral part of these consolidated financial statements.

Goldman Sachs June 2021 Form 10-Q

4

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
Note 1.

Description of Business
The Goldman Sachs Group, Inc. (Group Inc. or parent
company), a Delaware corporation, together with its
consolidated subsidiaries (collectively, the firm), is a leading
global financial institution that delivers a broad range offinancial services across investment banking, securities,
investment management and consumer banking to a large
and diversified client base that includes corporations,financial institutions, governments and individuals.
Founded in 1869, the firm is headquartered in New Yorkand maintains offices in all major financial centers aroundthe world.
The firm reports its activities in four business segments:
Investment Banking
The firm provides a broad range of investment banking
services to a diverse group of corporations, financial
institutions, investment funds and governments. Services
include strategic advisory assignments with respect tomergers and acquisitions, divestitures, corporate defense
activities, restructurings and spin-offs, and equity and debt
underwriting of public offerings and private placements.
The firm also provides lending to corporate clients,
including relationship lending, middle-market lending andacquisition financing. The firm also provides transaction
banking services to certain corporate clients.
Global Markets
The firm facilitates client transactions and makes markets
in fixed income, equity, currency and commodity productswith institutional clients, such as corporations, financial
institutions, investment funds and governments. The firm
also makes markets in and clears institutional clienttransactions on major stock, options and futures exchanges
worldwide and provides prime brokerage and other equities
financing activities, including securities lending, margin
lending and swaps. The firm also provides financing toclients through securities purchased under agreements toresell (resale agreements), and through structured credit,
warehouse and asset-backed lending.
Asset Management
The firm manages assets and offers investment products(primarily through separately managed accounts andcommingled vehicles, such as mutual funds and private
investment funds) across all major asset classes to a diverse
set of institutional clients and a network of third-party
distributors around the world. The firm makes equity
investments, which include alternative investing activities
related to public and private equity investments incorporate, real estate and infrastructure assets, as well as
investments through consolidated investment entities,
substantially all of which are engaged in real estate
investment activities. The firm also invests in corporate
debt and provides financing for real estate and other assets.
5Goldman Sachs June 2021 Form 10-Q

Consumer & Wealth Management
The firm provides investing and wealth advisory solutions,
including financial planning and counseling, executing
brokerage transactions and managing assets for individuals
in its wealth management business. The firm also provides
loans, accepts deposits and provides investing services
through its consumer banking digital platform, Marcus byGoldman Sachs, and through its private bank, as well as
issues credit cards to consumers.
Note 2.

Basis of Presentation
These consolidated financial statements are prepared inaccordance with accounting principles generally accepted in
the United States (U.S. GAAP) and include the accounts ofGroup Inc. and all other entities in which the firm has acontrolling financial interest. Intercompany transactions
and balances have been eliminated.
These consolidated financial statements are unaudited andshould be read in conjunction with the audited consolidated
financial statements included in the firm’s Annual Reporton Form 10-K for the year ended December 31, 2020.
References to “the 2020 Form 10-K” are to the firm’s
Annual Report on Form 10-K for the year ended
December 31, 2020. Certain disclosures included in theannual financial statements have been condensed oromitted from these financial statements as they are notrequired for interim financial statements under U.S. GAAPand the rules of the Securities and Exchange Commission.
These unaudited consolidated financial statements reflect
all adjustments that are, in the opinion of management,
necessary for a fair statement of the results for the interim
periods presented. These adjustments are of a normal,
recurring nature. Interim period operating results may not
be indicative of the operating results for a full year.
All references to June 2021, March 2021 and June 2020refer to the firm’s periods ended, or the dates, as the context
requires, June 30, 2021, March 31, 2021 andJune 30, 2020, respectively. All references to
December 2020 refer to the date December 31, 2020. Anyreference to a future year refers to a year ending on
December 31 of that year. Certain reclassifications havebeen made to previously reported amounts to conform tothe current presentation.
In the fourth quarter of 2020, brokerage, clearing,exchange and distribution fees was renamed transaction
based and additionally includes expenses resulting fromcompleted transactions, which are directly related to client
revenues. Such expenses were previously reported in otherexpenses. Previously reported amounts have been
conformed to the current presentation.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
Note 3.

Significant Accounting Policies
The firm’s significant accounting policies include when andhow to measure the fair value of assets and liabilities,
measuring the allowance for credit losses on loans andlending commitments accounted for at amortized cost, andwhen to consolidate an entity. See Note 4 for policies onfair value measurements, Note 9 for policies on theallowance for credit losses, and below and Note 17 forpolicies on consolidation accounting. All other significant
accounting policies are either described below or includedin the following footnotes:
Fair Value Measurements

Note 4

Trading Assets and Liabilities

Note 5

Trading Cash Instruments

Note 6

Derivatives and Hedging Activities

Note 7

Investments

Note 8Loans

Note 9Fair Value Option

Note 10

Collateralized Agreements and Financings

Note 11

Other Assets

Note 12

Deposits

Note 13

Unsecured Borrowings

Note 14

Other Liabilities

Note 15

Securitization Activities

Note 16

Variable Interest Entities

Note 17

Commitments, Contingencies and Guarantees

Note 18

Shareholders’ Equity

Note 19

Regulation and Capital Adequacy

Note 20

Earnings Per Common Share

Note 21Transactions with Affiliated Funds

Note 22

Interest Income and Interest Expense

Note 23

Income Taxes

Note 24

Business Segments

Note 25

Credit Concentrations

Note 26

Legal Proceedings

Note 27

Consolidation
The firm consolidates entities in which the firm has acontrolling financial interest. The firm determines whether
it has a controlling financial interest in an entity by firstevaluating whether the entity is a voting interest entity or avariable interest entity (VIE).
Voting Interest Entities. Voting interest entities areentities in which (i) the total equity investment at risk is
sufficient to enable the entity to finance its activities
independently and (ii) the equity holders have the power todirect the activities of the entity that most significantly
impact its economic performance, the obligation to absorb
the losses of the entity and the right to receive the residual
returns of the entity. The usual condition for a controlling
financial interest in a voting interest entity is ownership of amajority voting interest. If the firm has a controllingmajority voting interest in a voting interest entity, the entity
is consolidated.
Variable Interest Entities. A VIE is an entity that lacks
one or more of the characteristics of a voting interest entity.
The firm has a controlling financial interest in a VIE when
the firm has a variable interest or interests that provide itwith (i) the power to direct the activities of the VIE thatmost significantly impact the VIE’s economic performanceand (ii) the obligation to absorb losses of the VIE or theright to receive benefits from the VIE that could potentiallybe significant to the VIE. See Note 17 for further
information about VIEs.
Equity-Method Investments. When the firm does nothave a controlling financial interest in an entity but canexert significant influence over the entity’s operating andfinancial policies, the investment is generally accounted forat fair value by electing the fair value option available under
U.S. GAAP. Significant influence generally exists when thefirm owns 20% to 50% of the entity’s common stock or
in-substance common stock.
In certain cases, the firm applies the equity method of
accounting to new investments that are strategic in natureor closely related to the firm’s principal business activities,
when the firm has a significant degree of involvement in the
cash flows or operations of the investee or when costbenefit considerations are less significant. See Note 8 forfurther information about equity-method investments.

Goldman Sachs June 2021 Form 10-Q

6

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
Investment Funds. The firm has formed investment fundswith third-party investors. These funds are typicallyorganized as limited partnerships or limited liability
companies for which the firm acts as general partner ormanager. Generally, the firm does not hold a majority ofthe economic interests in these funds. These funds areusually voting interest entities and generally are notconsolidated because third-party investors typically haverights to terminate the funds or to remove the firm as
general partner or manager. Investments in these funds are
generally measured at net asset value (NAV) and areincluded in investments. See Notes 8, 18 and 22 for further
information about investments in funds.
Use of Estimates
Preparation of these consolidated financial statements
requires management to make certain estimates andassumptions, the most important of which relate to fairvalue measurements, the allowance for credit losses onloans and lending commitments accounted for at amortized
cost, discretionary compensation accruals, accounting for
goodwill and identifiable intangible assets, provisions forlosses that may arise from litigation and regulatory
proceedings (including governmental investigations), andprovisions for losses that may arise from tax audits. Theseestimates and assumptions are based on the best available
information but actual results could be materially different.
Revenue Recognition
Financial Assets and Liabilities at Fair Value. Trading
assets and liabilities and certain investments are carried atfair value either under the fair value option or in accordancewith other U.S. GAAP. In addition, the firm has elected toaccount for certain of its loans and other financial assets
and liabilities at fair value by electing the fair value option.
The fair value of a financial instrument is the amount thatwould be received to sell an asset or paid to transfer aliability in an orderly transaction between market
participants at the measurement date. Financial assets aremarked to bid prices and financial liabilities are marked tooffer prices. Fair value measurements do not include
transaction costs. Fair value gains or losses are generally
included in market making or other principal transactions.
See Note 4 for further information about fair value
measurements.

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Goldman Sachs June 2021 Form 10-Q

Revenue from Contracts with Clients. The firm
recognizes revenue earned from contracts with clients forservices, such as investment banking, investment
management, and execution and clearing (contracts withclients), when the performance obligations related to theunderlying transaction are completed.
Revenues from contracts with clients represent
approximately 40% of total non-interest revenues for boththe three and six months ended June 2021 (including
approximately 85% of investment banking revenues,
approximately 95% of investment management revenues
and all commissions and fees), and approximately 40% of
total non-interest revenues for the three months ended
June 2020 and approximately 45% for the six months
ended June 2020 (including approximately 85% ofinvestment banking revenues, approximately 95% ofinvestment management revenues and all commissions andfees). See Note 25 for information about net revenues bybusiness segment.
Investment Banking
Advisory. Fees from financial advisory assignments arerecognized in revenues when the services related to theunderlying transaction are completed under the terms of theassignment. Non-refundable deposits and milestone
payments in connection with financial advisory
assignments are recognized in revenues upon completion of
the underlying transaction or when the assignment isotherwise concluded.
Expenses associated with financial advisory assignments
are recognized when incurred and are included intransaction based expenses. Client reimbursements for such
expenses are included in investment banking revenues.
Underwriting. Fees from underwriting assignments arerecognized in revenues upon completion of the underlying
transaction based on the terms of the assignment.
Expenses associated with underwriting assignments are
generally deferred until the related revenue is recognized or
the assignment is otherwise concluded. Such expenses areincluded in transaction based expenses for completed
assignments.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
Investment Management
The firm earns management fees and incentive fees forinvestment management services, which are included ininvestment management revenues. The firm makes
payments to brokers and advisors related to the placementof the firm’s investment funds (distribution fees), which areincluded in transaction based expenses.
Management Fees. Management fees for mutual funds
are calculated as a percentage of daily net asset value andare received monthly. Management fees for hedge funds
and separately managed accounts are calculated as apercentage of month-end net asset value and are generally
received quarterly. Management fees for private equity
funds are calculated as a percentage of monthly invested
capital or committed capital and are received quarterly,
semi-annually or annually, depending on the fund.
Management fees are recognized over time in the period theservices are provided.
Distribution fees paid by the firm are calculated based oneither a percentage of the management fee, the investment
fund’s net asset value or the committed capital. Such fees
are included in transaction based expenses.
Incentive Fees. Incentive fees are calculated as apercentage of a fund’s or separately managed account’s
return, or excess return above a specified benchmark orother performance target. Incentive fees are generally basedon investment performance over a twelve-month period orover the life of a fund. Fees that are based on performanceover a twelve-month period are subject to adjustment prior
to the end of the measurement period. For fees that are
based on investment performance over the life of the fund,future investment underperformance may require fees
previously distributed to the firm to be returned to the fund.
Incentive fees earned from a fund or separately managed
account are recognized when it is probable that a significant
reversal of such fees will not occur, which is generally whensuch fees are no longer subject to fluctuations in the market
value of investments held by the fund or separately
managed account. Therefore, incentive fees recognized
during the period may relate to performance obligations
satisfied in previous periods.

Commissions and Fees
The firm earns commissions and fees from executing andclearing client transactions on stock, options and futures
markets, as well as over-the-counter (OTC) transactions.
Commissions and fees are recognized on the day the trade is
executed. The firm also provides third-party researchservices to clients in connection with certain soft-dollar
arrangements. Third-party research costs incurred by thefirm in connection with such arrangements are presented
net within commissions and fees.
Remaining Performance Obligations
Remaining performance obligations are services that thefirm has committed to perform in the future in connection
with its contracts with clients. The firm’s remaining
performance obligations are generally related to its
financial advisory assignments and certain investment
management activities. Revenues associated with remaining
performance obligations relating to financial advisory
assignments cannot be determined until the outcome of thetransaction. For the firm’s investment management
activities, where fees are calculated based on the net asset
value of the fund or separately managed account, future
revenues associated with such remaining performanceobligations cannot be determined as such fees are subject tofluctuations in the market value of investments held by thefund or separately managed account.
The firm is able to determine the future revenues associatedwith management fees calculated based on committed
capital. As of June 2021, substantially all future net
revenues associated with such remaining performanceobligations will be recognized through 2028. Annual
revenues associated with such performance obligations
average less than $250 million through 2028.
Transfers of Financial Assets
Transfers of financial assets are accounted for as sales when
the firm has relinquished control over the assets transferred.
For transfers of financial assets accounted for as sales, any
gains or losses are recognized in net revenues. Assets or
liabilities that arise from the firm’s continuing involvementwith transferred financial assets are initially recognized atfair value. For transfers of financial assets that are notaccounted for as sales, the assets are generally included in
trading assets and the transfer is accounted for as acollateralized financing, with the related interest expense
recognized over the life of the transaction. See Note 11 forfurther information about transfers of financial assets
accounted for as collateralized financings and Note 16 forfurther information about transfers of financial assets
accounted for as sales.

Goldman Sachs June 2021 Form 10-Q

8

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
Cash and Cash Equivalents
The firm defines cash equivalents as highly liquid overnight
deposits held in the ordinary course of business. Cash andcash equivalents included cash and due from banks of$17.34 billion as of June 2021 and $11.95 billion as ofDecember 2020. Cash and cash equivalents also included
interest-bearing deposits with banks of $222.95 billion asof June 2021 and $143.89 billion as of December 2020.
The firm segregates cash for regulatory and other purposes
related to client activity. Cash and cash equivalents
segregated for regulatory and other purposes were$23.38 billion as of June 2021 and $24.52 billion as ofDecember 2020. In addition, the firm segregates securities
for regulatory and other purposes related to client activity.
See Note 11 for further information about segregatedsecurities.
Customer and Other Receivables
Customer and other receivables included receivables from
customers and counterparties of $104.23 billion as ofJune 2021 and $82.39 billion as of December 2020, andreceivables from brokers, dealers and clearingorganizations of $57.86 billion as of June 2021 and$38.94 billion as of December 2020. Such receivables
primarily consist of customer margin loans, receivables
resulting from unsettled transactions and collateral posted
in connection with certain derivative transactions.
Substantially all of these receivables are accounted for atamortized cost net of any allowance for credit losses, which
generally approximates fair value. As these receivables are
not accounted for at fair value, they are not included in thefirm’s fair value hierarchy in Notes 4 through 10. Had thesereceivables been included in the firm’s fair value hierarchy,
substantially all would have been classified in level 2 as ofboth June 2021 and December 2020. See Note 10 for
further information about customer and other receivables
accounted for at fair value under the fair value option.
Interest on customer and other receivables is recognizedover the life of the transaction and included in interest
income.
Customer and other receivables includes receivables fromcontracts with clients and contract assets. Contract assets
represent the firm’s right to receive consideration forservices provided in connection with its contracts withclients for which collection is conditional and not merely
subject to the passage of time. The firm’s receivables fromcontracts with clients were $3.08 billion as of June 2021
and $2.60 billion as of December 2020. As of bothJune 2021 and December 2020 contract assets were notmaterial.

9

Goldman Sachs June 2021 Form 10-Q

Customer and Other Payables
Customer and other payables included payables tocustomers and counterparties of $217.74 billion as ofJune 2021 and $183.57 billion as of December 2020, andpayables to brokers, dealers and clearing organizations of$20.96 billion as of June 2021 and $7.09 billion as ofDecember 2020. Such payables primarily consist ofcustomer credit balances related to the firm’s prime
brokerage activities. Customer and other payables areaccounted for at cost plus accrued interest, which generally
approximates fair value. As these payables are notaccounted for at fair value, they are not included in thefirm’s fair value hierarchy in Notes 4 through 10. Had thesepayables been included in the firm’s fair value hierarchy,
substantially all would have been classified in level 2 as ofboth June 2021 and December 2020. Interest on customer
and other payables is recognized over the life of thetransaction and included in interest expense.
Offsetting Assets and Liabilities
To reduce credit exposures on derivatives and securities
financing transactions, the firm may enter into masternetting agreements or similar arrangements (collectively,
netting agreements) with counterparties that permit it tooffset receivables and payables with such counterparties. A
netting agreement is a contract with a counterparty that
permits net settlement of multiple transactions with thatcounterparty, including upon the exercise of terminationrights by a non-defaulting party. Upon exercise of suchtermination rights, all transactions governed by the netting
agreement are terminated and a net settlement amount iscalculated. In addition, the firm receives and posts cash andsecurities collateral with respect to its derivatives andsecurities financing transactions, subject to the terms of therelated credit support agreements or similar arrangements(collectively, credit support agreements). An enforceablecredit support agreement grants the non-defaulting party
exercising termination rights the right to liquidate thecollateral and apply the proceeds to any amounts owed. Inorder to assess enforceability of the firm’s right of setoff
under netting and credit support agreements, the firm
evaluates various factors, including applicable bankruptcy
laws, local statutes and regulatory provisions in thejurisdiction of the parties to the agreement.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
Derivatives are reported on a net-by-counterparty basis(i.e., the net payable or receivable for derivative assets andliabilities for a given counterparty) in the consolidatedbalance sheets when a legal right of setoff exists under anenforceable netting agreement. Resale agreements andsecurities sold under agreements to repurchase (repurchaseagreements) and securities borrowed and loaned
transactions with the same term and currency are presented
on a net-by-counterparty basis in the consolidated balance
sheets when such transactions meet certain settlement
criteria and are subject to netting agreements.
In the consolidated balance sheets, derivatives are reported
net of cash collateral received and posted under enforceablecredit support agreements, when transacted under anenforceable netting agreement. In the consolidated balance
sheets, resale and repurchase agreements, and securities
borrowed and loaned, are not reported net of the related
cash and securities received or posted as collateral. See
Note 11 for further information about collateral received
and pledged, including rights to deliver or repledge
collateral. See Notes 7 and 11 for further information about
offsetting assets and liabilities.
Share-Based Compensation
The cost of employee services received in exchange for ashare-based award is generally measured based on the
grant-date fair value of the award. Share-based awards that
do not require future service (i.e., vested awards, includingawards granted to retirement-eligible employees) are
expensed immediately. Share-based awards that require
future service are amortized over the relevant service
period. Forfeitures are recorded when they occur.
Cash dividend equivalents paid on restricted stock units(RSUs) are generally charged to retained earnings. If RSUs
that require future service are forfeited, the related dividend
equivalents originally charged to retained earnings arereclassified to compensation expense in the period in which
forfeiture occurs.
The firm generally issues new shares of common stock upondelivery of share-based awards. In certain cases, primarily
related to conflicted employment (as outlined in theapplicable award agreements), the firm may cash settle
share-based compensation awards accounted for as equity
instruments. For these awards, whose terms allow for cash
settlement, additional paid-in capital is adjusted to theextent of the difference between the value of the award at
the time of cash settlement and the grant-date value of theaward. The tax effect related to the settlement of sharebased awards is recorded in income tax benefit or expense.

Foreign Currency Translation
Assets and liabilities denominated in non-U.S. currencies
are translated at rates of exchange prevailing on the date of
the consolidated balance sheets and revenues and expenses
are translated at average rates of exchange for the period.
Foreign currency remeasurement gains or losses ontransactions in nonfunctional currencies are recognized inearnings. Gains or losses on translation of the financial
statements of a non-U.S. operation, when the functional
currency is other than the U.S. dollar, are included, net ofhedges and taxes, in the consolidated statements ofcomprehensive income.
Recent Accounting Developments
Measurement of Credit Losses on Financial
Instruments (ASC 326). In June 2016, the FASB issued
ASU No. 2016-13, “Financial Instruments — Credit Losses(Topic 326) — Measurement of Credit Losses on Financial
Instruments.” This ASU amends several aspects of themeasurement of credit losses on certain financial
instruments, including replacing the existing incurred credit
loss model and other models with the Current Expected
Credit Losses (CECL) model and amending certain aspectsof accounting for purchased financial assets withdeterioration in credit quality since origination.
The firm adopted this ASU in January 2020 under amodified retrospective approach. As a result of adopting
this ASU, the firm’s allowance for credit losses on financial
assets and commitments that are measured at amortizedcost reflects management’s estimate of credit losses over theremaining expected life of such assets. Expected credit
losses for newly recognized financial assets andcommitments, as well as changes to expected credit losses
during the period, are recognized in earnings. These
expected credit losses are measured based on historicalexperience, current conditions and forecasts that affect thecollectability of the reported amount.
The cumulative effect of measuring the allowance under
CECL as a result of adopting this ASU as ofJanuary 1, 2020 was an increase in the allowance for credit
losses of $848 million. The increase in the allowance isdriven by the fact that the allowance under CECL covers
expected credit losses over the full expected life of the loan
portfolios and also takes into account forecasts of expected
future economic conditions. In addition, in accordance with
the ASU, the firm elected the fair value option for loans thatwere previously accounted for as Purchased Credit
Impaired (PCI), which resulted in a decrease to theallowance for PCI loans of $169 million. The cumulative
effect of adopting this ASU was a decrease to retained
earnings of $638 million (net of tax).

Goldman Sachs June 2021 Form 10-Q

10

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
Facilitation of the Effects of Reference Rate Reform on
Financial Reporting (ASC 848). In March 2020, the FASB
issued ASU No. 2020-04, “Reference Rate Reform —Facilitation of the Effects of Reference Rate Reform on
Financial Reporting.” This ASU provides optional relief
from applying generally accepted accounting principles tocontracts, hedging relationships and other transactions
affected by reference rate reform. In addition, in
January 2021 the FASB issued ASU No. 2021-01,“Reference Rate Reform — Scope,” which clarified thescope of ASC 848 relating to contract modifications. The
firm adopted these ASUs upon issuance and elected to apply
the relief available to certain modified derivatives. The
adoption of these ASUs did not have a material impact on
the firm’s consolidated financial statements.

U.S. GAAP has a three-level hierarchy for disclosure of fairvalue measurements. This hierarchy prioritizes inputs to thevaluation techniques used to measure fair value, giving thehighest priority to level 1 inputs and the lowest priority tolevel 3 inputs. A financial instrument’s level in thishierarchy is based on the lowest level of input that issignificant to its fair value measurement. In evaluating thesignificance of a valuation input, the firm considers, among
other factors, a portfolio’s net risk exposure to that input.
The fair value hierarchy is as follows:

Note 4.

Level 3. One or more inputs to valuation techniques are
significant and unobservable.

Fair Value Measurements
The fair value of a financial instrument is the amount thatwould be received to sell an asset or paid to transfer aliability in an orderly transaction between market
participants at the measurement date. Financial assets aremarked to bid prices and financial liabilities are marked tooffer prices. Fair value measurements do not include
transaction costs. The firm measures certain financial assets
and liabilities as a portfolio (i.e., based on its net exposure
to market and/or credit risks).
The best evidence of fair value is a quoted price in an active
market. If quoted prices in active markets are not available,
fair value is determined by reference to prices for similar
instruments, quoted prices or recent transactions in lessactive markets, or internally developed models thatprimarily use market-based or independently sourced
inputs, including, but not limited to, interest rates,
volatilities, equity or debt prices, foreign exchange rates,
commodity prices, credit spreads and funding spreads (i.e.,the spread or difference between the interest rate at which aborrower could finance a given financial instrument relative
to a benchmark interest rate).

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Goldman Sachs June 2021 Form 10-Q

Level 1. Inputs are unadjusted quoted prices in active
markets to which the firm had access at the measurement
date for identical, unrestricted assets or liabilities.
Level 2. Inputs to valuation techniques are observable,
either directly or indirectly.

The fair values for substantially all of the firm’s financial
assets and liabilities are based on observable prices andinputs and are classified in levels 1 and 2 of the fair value
hierarchy. Certain level 2 and level 3 financial assets andliabilities may require valuation adjustments that a market
participant would require to arrive at fair value for factors,
such as counterparty and the firm’s credit quality, funding
risk, transfer restrictions, liquidity and bid/offer spreads.
Valuation adjustments are generally based on market
evidence.
The valuation techniques and nature of significant inputs
used to determine the fair value of the firm’s financial
instruments are described below. See Notes 5 through 10
for further information about significant unobservable
inputs used to value level 3 financial instruments.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
Valuation Techniques and Significant Inputs for
Trading Cash Instruments, Investments and Loans
Level 1. Level 1 instruments include U.S. government
obligations, most non-U.S. government obligations, certain
agency obligations, certain corporate debt instruments,
certain money market instruments and actively traded listed
equities. These instruments are valued using quoted prices
for identical unrestricted instruments in active markets. The
firm defines active markets for equity instruments based on
the average daily trading volume both in absolute terms andrelative to the market capitalization for the instrument. The
firm defines active markets for debt instruments based on
both the average daily trading volume and the number ofdays with trading activity.
Level 2. Level 2 instruments include certain non-U.S.
government obligations, most agency obligations, most
mortgage-backed loans and securities, most corporate debt
instruments, most state and municipal obligations, mostmoney market instruments, most other debt obligations,
restricted or less liquid listed equities, certain private
equities, commodities and certain lending commitments.
Valuations of level 2 instruments can be verified to quoted
prices, recent trading activity for identical or similar
instruments, broker or dealer quotations or alternative
pricing sources with reasonable levels of price transparency.
Consideration is given to the nature of the quotations (e.g.,indicative or firm) and the relationship of recent market
activity to the prices provided from alternative pricing
sources.
Valuation adjustments are typically made to level 2
instruments (i) if the instrument is subject to transfer
restrictions and/or (ii) for other premiums and liquidity
discounts that a market participant would require to arriveat fair value. Valuation adjustments are generally based onmarket evidence.
Level 3. Level 3 instruments have one or more significant
valuation inputs that are not observable. Absent evidence tothe contrary, level 3 instruments are initially valued attransaction price, which is considered to be the best initial
estimate of fair value. Subsequently, the firm uses othermethodologies to determine fair value, which vary based on
the type of instrument. Valuation inputs and assumptions
are changed when corroborated by substantive observableevidence, including values realized on sales.
Valuation techniques of level 3 instruments vary by
instrument, but are generally based on discounted cash flow
techniques. The valuation techniques and the nature ofsignificant inputs used to determine the fair values of eachtype of level 3 instrument are described below:

Loans and Securities Backed by Commercial Real
EstateLoans and securities backed by commercial real estate are
directly or indirectly collateralized by a single property or aportfolio of properties, and may include tranches of varying
levels of subordination. Significant inputs are generally
determined based on relative value analyses and include:‰ Market yields implied by transactions of similar or related
assets and/or current levels and changes in market indices,such as the CMBX (an index that tracks the performanceof commercial mortgage bonds);‰ Transaction prices in both the underlying collateral andinstruments with the same or similar underlying
collateral;‰ A measure of expected future cash flows in a default
scenario (recovery rates) implied by the value of theunderlying collateral, which is mainly driven by current
performance of the underlying collateral andcapitalization rates. Recovery rates are expressed as apercentage of notional or face value of the instrument andreflect the benefit of credit enhancements on certain
instruments; and‰ Timing of expected future cash flows (duration) which, incertain cases, may incorporate the impact of any loan
forbearances and other unobservable inputs (e.g.,
prepayment speeds).
Loans and Securities Backed by Residential Real
EstateLoans and securities backed by residential real estate are
directly or indirectly collateralized by portfolios ofresidential real estate and may include tranches of varying
levels of subordination. Significant inputs are generally
determined based on relative value analyses, which
incorporate comparisons to instruments with similar
collateral and risk profiles. Significant inputs include:‰ Market yields implied by transactions of similar or related
assets;‰ Transaction prices in both the underlying collateral andinstruments with the same or similar underlying
collateral;‰ Cumulative loss expectations, driven by default rates,
home price projections, residential property liquidation
timelines, related costs and subsequent recoveries; and‰ Duration, driven by underlying loan prepayment speeds
and residential property liquidation timelines.

Goldman Sachs June 2021 Form 10-Q

12

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
Corporate Debt Instruments
Corporate debt instruments includes corporate loans, debt
securities and convertible debentures. Significant inputs forcorporate debt instruments are generally determined basedon relative value analyses, which incorporate comparisonsboth to prices of credit default swaps that reference thesame or similar underlying instrument or entity and toother debt instruments for the same or similar issuer forwhich observable prices or broker quotations are available.
Significant inputs include:‰ Market yields implied by transactions of similar or related
assets and/or current levels and trends of market indices,such as the CDX (an index that tracks the performance ofcorporate credit);‰ Current performance and recovery assumptions and,
where the firm uses credit default swaps to value therelated instrument, the cost of borrowing the underlying
reference obligation;‰ Duration; and‰ Market and transaction multiples for corporate debt
instruments with convertibility or participation options.
Equity Securities
Equity securities consists of private equities. Recent thirdparty completed or pending transactions (e.g., merger
proposals, debt restructurings, tender offers) are considered
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 and revenue
multiples) and public comparables;‰ Transactions in similar instruments;‰ Discounted cash flow techniques; and‰ Third-party appraisals.
The firm also considers changes in the outlook for the
relevant industry and financial performance of the issuer ascompared to projected performance. Significant inputs
include:‰ Market and transaction multiples;‰ Discount rates and capitalization rates; and‰ For equity securities with debt-like features, market yields
implied by transactions of similar or related assets,
current performance and recovery assumptions, andduration.

13

Goldman Sachs June 2021 Form 10-Q

Other Trading Cash Instruments, Investments andLoans
The significant inputs to the valuation of other instruments,
such as non-U.S. government obligations and U.S. andnon-U.S. agency obligations, state and municipal
obligations, and other loans and debt obligations are
generally determined based on relative value analyses,
which incorporate comparisons both to prices of credit
default swaps that reference the same or similar underlying
instrument or entity and to other debt instruments for thesame issuer for which observable prices or broker
quotations are available. Significant inputs include:‰ Market yields implied by transactions of similar or related
assets and/or current levels and trends of market indices;‰ Current performance and recovery assumptions and,
where the firm uses credit default swaps to value therelated instrument, the cost of borrowing the underlying
reference obligation; and‰ Duration.
Valuation Techniques and Significant Inputs for
Derivatives
The firm’s level 2 and level 3 derivatives are valued using
derivative pricing models (e.g., discounted cash flow
models, correlation models and models that incorporate
option pricing methodologies, such as Monte Carlosimulations). Price transparency of derivatives can generally
be characterized by product type, as described below.
‰ Interest Rate. In general, the key inputs used to valueinterest rate derivatives are transparent, even for mostlong-dated contracts. Interest rate swaps and options
denominated in the currencies of leading industrialized
nations are characterized by high trading volumes and tightbid/offer spreads. Interest rate derivatives that referenceindices, such as an inflation index, or the shape of the yield
curve (e.g., 10-year swap rate vs. 2-year swap rate) are
more complex, but the key inputs are generally observable.
‰ Credit. Price transparency for credit default swaps,
including both single names and baskets of credits, varies
by market and underlying reference entity or obligation.
Credit default swaps that reference indices, large
corporates and major sovereigns generally exhibit themost price transparency. For credit default swaps withother underliers, price transparency varies based on credit
rating, the cost of borrowing the underlying reference
obligations, and the availability of the underlying
reference obligations for delivery upon the default of theissuer. Credit default swaps that reference loans, assetbacked securities and emerging market debt instruments
tend to have less price transparency than those thatreference corporate bonds. In addition, more complex
credit derivatives, such as those sensitive to thecorrelation between two or more underlying reference
obligations, generally have less price transparency.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)‰ Currency. Prices for currency derivatives based on theexchange rates of leading industrialized nations,
including those with longer tenors, are generallytransparent. The primary difference between the pricetransparency of developed and emerging market currency
derivatives is that emerging markets tend to be only
observable for contracts with shorter tenors.
‰ Commodity.
Commodity
derivatives
includetransactions referenced to energy (e.g., oil, natural gas
and electricity), metals (e.g., precious and base) and soft
commodities (e.g., agricultural). Price transparency varies
based on the underlying commodity, delivery location,
tenor and product quality (e.g., diesel fuel compared tounleaded gasoline). In general, price transparency forcommodity derivatives is greater for contracts withshorter tenors and contracts that are more closely alignedwith major and/or benchmark commodity indices.
‰ Equity. Price transparency for equity derivatives varies bymarket and underlier. Options on indices and thecommon stock of corporates included in major equity
indices exhibit the most price transparency. Equity
derivatives generally have observable market prices,
except for contracts with long tenors or reference pricesthat differ significantly from current market prices. Morecomplex equity derivatives, such as those sensitive to thecorrelation between two or more individual stocks,
generally have less price transparency.
Liquidity is essential to observability of all product types. If
transaction volumes decline, previously transparent prices
and other inputs may become unobservable. Conversely,
even highly structured products may at times have trading
volumes large enough to provide observability of prices andother inputs.
Level 1. Level 1 derivatives include short-term contracts for
future delivery of securities when the underlying security isa level 1 instrument, and exchange-traded derivatives ifthey are actively traded and are valued at their quoted
market price.
Level 2. Level 2 derivatives include OTC derivatives forwhich all significant valuation inputs are corroborated bymarket evidence and exchange-traded derivatives that are
not actively traded and/or that are valued using models thatcalibrate to market-clearing levels of OTC derivatives.
The selection of a particular model to value a derivative
depends on the contractual terms of and specific risks
inherent in the instrument, as well as the availability ofpricing information in the market. For derivatives that
trade in liquid markets, model selection does not involve
significant management judgment because outputs ofmodels can be calibrated to market-clearing levels.

Valuation models require a variety of inputs, such as
contractual terms, market prices, yield curves, discountrates (including those derived from interest rates oncollateral received and posted as specified in credit support
agreements for collateralized derivatives), credit curves,
measures of volatility, prepayment rates, loss severity rates
and correlations of such inputs. Significant inputs to thevaluations of level 2 derivatives can be verified to market
transactions, broker or dealer quotations or otheralternative pricing sources with reasonable levels of pricetransparency. Consideration is given to the nature of thequotations (e.g., indicative or firm) and the relationship ofrecent market activity to the prices provided fromalternative pricing sources.
Level 3. Level 3 derivatives are valued using models which
utilize observable level 1 and/or level 2 inputs, as well as
unobservable level 3 inputs. The significant unobservable
inputs used to value the firm’s level 3 derivatives aredescribed below.
‰ For level 3 interest rate and currency derivatives,
significant unobservable inputs include correlations ofcertain currencies and interest rates (e.g., the correlation
between Euro inflation and Euro interest rates) andspecific interest rate and currency volatilities.
‰ For level 3 credit derivatives, significant unobservable
inputs include illiquid credit spreads and upfront credit
points, which are unique to specific reference obligations
and reference entities, and recovery rates.
‰ For level 3 commodity derivatives, significant
unobservable inputs include volatilities for options withstrike prices that differ significantly from current market
prices and prices or spreads for certain products for which
the product quality or physical location of the commodity
is not aligned with benchmark indices.
‰ For level 3 equity derivatives, significant unobservable
inputs generally include equity volatility inputs for
options that are long-dated and/or have strike prices thatdiffer significantly from current market prices. In
addition, the valuation of certain structured trades
requires the use of level 3 correlation inputs, such as thecorrelation of the price performance of two or moreindividual stocks or the correlation of the priceperformance for a basket of stocks to another asset class,such as commodities.

Goldman Sachs June 2021 Form 10-Q

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THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
Subsequent to the initial valuation of a level 3 derivative,
the firm updates the level 1 and level 2 inputs to reflect
observable market changes and any resulting gains andlosses are classified in level 3. Level 3 inputs are changed
when corroborated by evidence, such as similar market
transactions, third-party pricing services and/or broker ordealer quotations or other empirical market data. In
circumstances where the firm cannot verify the model value
by reference to market transactions, it is possible that adifferent valuation model could produce a materiallydifferent estimate of fair value. See Note 7 for further
information about significant unobservable inputs used in
the valuation of level 3 derivatives.
Valuation Adjustments. Valuation adjustments areintegral to determining the fair value of derivative
portfolios and are used to adjust the mid-market valuations
produced by derivative pricing models to the exit pricevaluation. These adjustments incorporate bid/offer spreads,
the cost of liquidity, and credit and funding valuation
adjustments, which account for the credit and funding risk
inherent in the uncollateralized portion of derivative
portfolios. The firm also makes funding valuation
adjustments to collateralized derivatives where the terms of
the agreement do not permit the firm to deliver or repledge
collateral received. Market-based inputs are generally used
when calibrating valuation adjustments to market-clearing
levels.
In addition, for derivatives that include significant
unobservable inputs, the firm makes model or exit priceadjustments to account for the valuation uncertainty
present in the transaction.
Valuation Techniques and Significant Inputs for
Other Financial Instruments at Fair Value
In addition to trading cash instruments, derivatives, andcertain investments and loans, the firm accounts for certainof its other financial assets and liabilities at fair value under
the fair value option. Such instruments include resale andrepurchase agreements; certain securities borrowed andloaned transactions; certain customer and other receivables,
including certain margin loans; certain time deposits,
including structured certificates of deposit, which are
hybrid financial instruments; substantially all other secured
financings, including transfers of assets accounted for as
financings; certain unsecured short- and long-termborrowings, substantially all of which are hybrid financial
instruments; and certain other liabilities. These instruments
are generally valued based on discounted cash flow
techniques, which incorporate inputs with reasonable levelsof price transparency, and are generally classified in level 2
because the inputs are observable. Valuation adjustments
may be made for liquidity and for counterparty and thefirm’s credit quality. The significant inputs used to value thefirm’s other financial instruments are described below.
15

Goldman Sachs June 2021 Form 10-Q

Resale and Repurchase Agreements and Securities
Borrowed and Loaned. The significant inputs to thevaluation of resale and repurchase agreements andsecurities borrowed and loaned are funding spreads, theamount and timing of expected future cash flows andinterest rates.
Customer and Other Receivables. The significant inputs
to the valuation of receivables are interest rates, the amountand timing of expected future cash flows and funding
spreads.
Deposits. The significant inputs to the valuation of time
deposits are interest rates and the amount and timing of
future cash flows. The inputs used to value the embedded
derivative component of hybrid financial instruments are
consistent with the inputs used to value the firm’s otherderivative instruments described above. See Note 7 forfurther information about derivatives and Note 13 forfurther information about deposits.
Other Secured Financings. The significant inputs to thevaluation of other secured financings are the amount andtiming of expected future cash flows, interest rates, funding
spreads and the fair value of the collateral delivered by thefirm (determined using the amount and timing of expected
future cash flows, market prices, market yields andrecovery assumptions). See Note 11 for further information
about other secured financings.
Unsecured Short- and Long-Term Borrowings. The
significant inputs to the valuation of unsecured short- andlong-term borrowings are the amount and timing of
expected future cash flows, interest rates, the credit spreadsof the firm and commodity prices for prepaid commodity
transactions. The inputs used to value the embedded
derivative component of hybrid financial instruments are
consistent with the inputs used to value the firm’s otherderivative instruments described above. See Note 7 forfurther information about derivatives and Note 14 forfurther information about borrowings.
Other Liabilities. The significant inputs to the valuation ofother liabilities are the amount and timing of expected
future cash flows and equity volatility and correlation
inputs. The inputs used to value the embedded derivative
component of hybrid financial instruments are consistent
with the inputs used to value the firm’s other derivative
instruments described above. See Note 7 for further
information about derivatives.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
Financial Assets and Liabilities at Fair Value
The table below presents financial assets and liabilities
carried at fair value.
As of
June
2021

$ in millions

March December
2021
2020

$1,387,922 $1,301,548 $1,163,028

Total level 3 financial assets divided by:
Total assets
1.8%
2.1%
2.3%
Total financial assets at fair value
3.8%
4.2%
4.2%
Total level 1 financial liabilities$ 133,781 $ 133,542 $ 85,120
Total level 2 financial liabilities
378,188
350,494
331,824
Total level 3 financial liabilities
33,40533,19232,930Counterparty and cash collateral netting(52,129)(53,163)(60,297)
Total financial liabilities at fair value $ 493,245 $ 464,065 $ 389,577
Total liabilities$1,286,032 $1,203,884 $1,067,096

Total level 3 financial liabilities divided by:
Total liabilities
2.6%
Total financial liabilities at fair value
6.8%

2.8%
7.2%

Trading
AssetsTrading
Liabilities

As of June 2021
Trading cash instruments
Derivatives
Total$309,565
66,352$375,917$150,399
48,694$199,093

As of December 2020
Trading cash instruments
Derivatives
Total$324,049
69,581$393,630$ 95,136
58,591$153,727$ in millions

Total level 1 financial assets$ 256,699 $ 253,650 $ 263,999
Total level 2 financial assets
446,055
428,190
410,275
Total level 3 financial assets
25,62326,893
26,305Investments in funds at NAV
3,988
3,758
3,664
Counterparty and cash collateral netting(63,655)(64,740)(77,170)
Total financial assets at fair value$ 668,710 $ 647,751 $ 627,073
Total assets

The table below presents a summary of trading assets andliabilities.

3.1%
8.5%

See Note 6 for further information about trading cash
instruments and Note 7 for further information about
derivatives.
Gains and Losses from Market Making
The table below presents market making revenues by major
product type.
Three Months
Ended June

In the table above:‰ Counterparty netting among positions classified in thesame level is included in that level.
‰ Counterparty and cash collateral netting represents theimpact on derivatives of netting across levels.
The table below presents a summary of level 3 financial assets.

$ in millions

Interest rates
CreditCurrencies
Equities
Commodities
Total

Six Months
Ended June

2021

2020

2021

2020

$ 920
310
(108)
1,540
612
$3,274$1,315
1,151
42
1,931
1,348
$5,787$ (323)
1,162
2,742
4,318
1,268
$9,167$2,052
2,993
(693)
3,631
1,486
$9,469

As of
June
2021

$ in millions

Trading assets:
Trading cash instruments
Derivatives
Investments
Loans
Total

$

$

1,304 $
5,758
16,332
2,229
25,623 $March December
2021
2020

1,373 $
5,940
17,0492,531
26,893 $

1,237
5,967
16,423
2,678
26,305

Level 3 financial assets as of June 2021 decreased comparedwith March 2021, primarily reflecting a decrease in level 3
investments, loans and derivatives. Level 3 financial assets as ofJune 2021 decreased compared with December 2020, primarilyreflecting a decrease in level 3 loans and derivatives. See Notes 5
through 10 for further information about level 3 financial assets(including information about unrealized gains and losses related
to level 3 financial assets and transfers in and out of level 3).
Note 5.

Trading Assets and Liabilities
Trading assets and liabilities include trading cash
instruments and derivatives held in connection with thefirm’s market-making or risk management activities. Theseassets and liabilities are carried at fair value either under thefair value option or in accordance with other U.S. GAAP,and the related fair value gains and losses are generally
recognized in the consolidated statements of earnings.

In the table above:‰ Gains/(losses) include both realized and unrealized gains
and losses. Gains/(losses) exclude related interest income
and interest expense. See Note 23 for further information
about interest income and interest expense.
‰ Gains and losses included in market making are primarily
related to the firm’s trading assets and liabilities,
including both derivative and non-derivative financial
instruments.
‰ Gains/(losses) are not representative of the manner inwhich the firm manages its business activities because
many of the firm’s market-making and client facilitation
strategies utilize financial instruments across various
product types. Accordingly, gains or losses in one producttype frequently offset gains or losses in other producttypes. For example, most of the firm’s longer-term
derivatives across product types are sensitive to changes
in interest rates and may be economically hedged withinterest rate swaps. Similarly, a significant portion of thefirm’s trading cash instruments and derivatives acrossproduct types has exposure to foreign currencies and may
be economically hedged with foreign currency contracts.

Goldman Sachs June 2021 Form 10-Q

16

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
Note 6.

Trading Cash Instruments
Trading cash instruments consists of instruments held inconnection with the firm’s market-making or risk
management activities. These instruments are carried at fairvalue and the related fair value gains and losses arerecognized in the consolidated statements of earnings.
Fair Value of Trading Cash Instruments by Level
The table below presents trading cash instruments by levelwithin the fair value hierarchy.
$ in millions

Level 1

Level 2 Level 3

Total

As of June 2021
AssetsGovernment and agency obligations:U.S.
$ 69,578 $ 25,725 $ 51 $ 95,354
Non-U.S.
52,41015,8595
68,274Loans and securities backed by:Commercial real estate
–
1,145
96
1,241
Residential real estate
–
7,525
130
7,655
Corporate debt instruments
572
36,348891
37,811
State and municipal obligations
–
238
–
238
Other debt obligations
258
2,206
53
2,517
Equity securities
85,8592,542
78
88,479Commodities
–
7,996
–
7,996
Total
$ 208,677 $ 99,584 $1,304 $ 309,565
Liabilities
Government and agency obligations:U.S.
$ (29,090) $(65) $
Non-U.S.
(36,951)(3,092)Loans and securities backed by:Commercial real estate–(40)
Residential real estate–(3)
Corporate debt instruments(57) (12,663)
Other debt obligations––
Equity securities(67,612)(722)
Commodities
–
(26)
Total
$(133,710) $ (16,611) $– $ (29,155)–(40,043)
–
(40)
–
(3)
(47) (12,767)(1)(1)(30) (68,364)–(26)(78) $(150,399)

In the table above:‰ Trading cash instrument assets are shown as positive
amounts and trading cash instrument liabilities are shownas negative amounts.
‰ Corporate debt instruments includes corporate loans,debt securities, convertible debentures, prepaid
commodity transactions and transfers of assets accounted
for as secured loans rather than purchases.
‰ Other debt obligations includes other asset-backed
securities and money market instruments.
‰ Equity securities includes public equities and exchangetraded funds.
See Note 4 for an overview of the firm’s fair value
measurement policies and the valuation techniques andsignificant inputs used to determine the fair value of trading
cash instruments. See Note 7 for information about hedging
activities for precious metals included in commodities andaccounted for at the lower of cost or net realizable value.
These precious metals are designated in a fair value hedging
relationship, and therefore their carrying value equals fairvalue.
Significant Unobservable Inputs
The table below presents the amount of level 3 assets, andranges and weighted averages of significant unobservable
inputs used to value level 3 trading cash instruments.
As of June 2021
Amount or Weighted
Range Average

As of December 2020
Amount or Weighted
Range Average

As of December 2020

$ in millions

AssetsGovernment and agency obligations:U.S.
$ 93,670 $ 44,863 $– $ 138,533
Non-U.S.
46,147
11,261
15
57,423Loans and securities backed by:Commercial real estate
–
597
203
800
Residential real estate
–
6,948
131
7,079
Corporate debt instruments
915
29,639797
31,351
State and municipal obligations
–
200
–
200
Other debt obligations
338
1,055
19
1,412
Equity securities
75,3002,505
72
77,877
Commodities
–
9,374
–
9,374
Total
$ 216,370 $106,442 $1,237 $ 324,049

Loans and securities backed by commercial real estate
Level 3 assets
$96
$203
Yield
6.7% to 24.6%
17% 1.7% to 22.0%
Recovery rate
11.8% to 92.3%
54% 5.1% to 94.9%
Duration (years)
0.2 to 4.2
2.3
1.1 to 9.1
Loans and securities backed by residential real estate
Level 3 assets
$130
$131
Yield
1.0% to 36.5%
9.6% 0.6% to 15.7%
Cumulative loss rate 1.2% to 40.0%
18.1% 3.4% to 45.6%
Duration (years)
0.5 to 11.9
6.0
0.9 to 16.1
Corporate debt instruments
Level 3 assets
$891
$797
Yield
1.9% to 25.5%
9.8% 0.6% to 30.6%
Recovery rate
0.0% to 69.8%
56.5% 0.0% to 73.6%
Duration (years)
1.6 to 13.8
4.3
0.3 to 25.5

Liabilities
Government and agency obligations:U.S.
$ (16,880) $(13) $
Non-U.S.
(22,092)(1,792)Loans and securities backed by:Commercial real estate–(17)
Residential real estate–(1)
Corporate debt instruments(2)(7,970)State and municipal obligations–(5)
Other debt obligations––
Equity securities(45,734)
(550)
Total
$ (84,708) $ (10,348) $17

Goldman Sachs June 2021 Form 10-Q

– $ (16,893)–(23,884)
(1)
(18)
–
(1)
(50)
(8,022)
–
(5)
(2)
(2)
(27)
(46,311)(80) $ (95,136)

9.0%
57.7%
5.0

6.3%
20.8%
6.5

9.5%
58.7%
4.0

Level 3 government and agency obligations, other debt
obligations and equity securities were not material as ofboth June 2021 and December 2020, and therefore are notincluded in the table above.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
In the table above:

In the table above:‰ Ranges represent the significant unobservable inputs thatwere used in the valuation of each type of trading cash
instrument.

‰ Changes in fair value are presented for all trading cash
instruments that are classified in level 3 as of the end of
the period.

‰ Weighted averages are calculated by weighting each input
by the relative fair value of the trading cash instruments.

‰ Net unrealized gains/(losses) relates to trading cash
instruments that were still held at period-end.

‰ The ranges and weighted averages of these inputs are notrepresentative of the appropriate inputs to use whencalculating the fair value of any one trading cash
instrument. For example, the highest recovery rate forcorporate debt instruments is appropriate for valuing a
specific corporate debt instrument, but may not beappropriate for valuing any other corporate debt
instrument. Accordingly, the ranges of inputs do not
represent uncertainty in, or possible ranges of, fair value
measurements of level 3 trading cash instruments.

‰ Transfers between levels of the fair value hierarchy arereported at the beginning of the reporting period in which
they occur. If a trading cash instrument was transferred tolevel 3 during a reporting period, its entire gain or loss forthe period is classified in level 3.

‰ Increases in yield, duration or cumulative loss rate used in
the valuation of level 3 trading cash instruments would
have resulted in a lower fair value measurement, while
increases in recovery rate would have resulted in a higher
fair value measurement as of both June 2021 andDecember 2020. Due to the distinctive nature of eachlevel 3 trading cash instrument, the interrelationship of
inputs is not necessarily uniform within each producttype.
‰ Trading cash instruments are valued using discounted
cash flows.

‰ For level 3 trading cash instrument assets, increases areshown as positive amounts, while decreases are shown as
negative amounts. For level 3 trading cash instrument
liabilities, increases are shown as negative amounts, while
decreases are shown as positive amounts.
‰ Level 3 trading cash instruments are frequently
economically hedged with level 1 and level 2 trading cash
instruments and/or level 1, level 2 or level 3 derivatives.
Accordingly, gains or losses that are classified in level 3
can be partially offset by gains or losses attributable tolevel 1 or level 2 trading cash instruments and/or level 1,
level 2 or level 3 derivatives. As a result, gains or losses
included in the level 3 rollforward below do notnecessarily represent the overall impact on the firm’s
results of operations, liquidity or capital resources.

Level 3 Rollforward
The table below presents a summary of the changes in fairvalue for level 3 trading cash instruments.

$ in millions

Three Months
Ended June

Six Months
Ended June

2021

2021

2020

2020

Total trading cash instrument assets
Beginning balance$1,373 $1,234 $1,237 $1,242
Net realized gains/(losses)
23
17
42
68
Net unrealized gains/(losses)
10
(40)
16
(190)
Purchases
275
306
647
609
Sales
(284)
(212)
(401)
(320)
Settlements
(100)
(42)
(208)
(183)
Transfers into level 3
148
695
181
761
Transfers out of level 3
(141)
(154)
(210)
(183)
Ending balance$1,304 $1,804 $1,304 $1,804
Total trading cash instrument liabilities
Beginning balance$ (106) $ (194) $Net realized gains/(losses)
2(1)
Net unrealized gains/(losses)(2)
15
Purchases
35
21
Sales
(27)
(15)
Settlements
20
5Transfers into level 3(5)(8)
Transfers out of level 3
5
21Ending balance$ (78) $ (156) $(80) $ (273)
4
–
–
105
28
40
(39)
(22)
10
1
(4)
(10)
3
3
(78) $ (156)Goldman Sachs June 2021 Form 10-Q

18

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
The table below presents information, by product type, forassets included in the summary table above.
Three Months
Ended June

Six Months
Ended June

2021

2021

2020

Loans and securities backed by commercial real estate
Beginning balance
$ 115
$ 130
$ 203
Net realized gains/(losses)
22
5
Net unrealized gains/(losses)
(3)
(9)
(9)
Purchases
10
20
7
Sales
(13)
–
(37)
Settlements
(5)
(6)
(13)
Transfers into level 3
5294
19Transfers out of level 3
(15)
(1)
(79)
Ending balance
$ 96
$ 430
$ 96

$ 191
13
(33)
79
(13)
(57)
255
(5)
$ 430

Loans and securities backed by residential real estate
Beginning balance
$ 204
$ 251
$ 131
Net realized gains/(losses)
438
Net unrealized gains/(losses)
92
10Purchases
4
5
21
Sales
(76)
(89)
(42)
Settlements
(7)
(7)
(9)
Transfers into level 3
12
181
31
Transfers out of level 3
(20)
(39)
(20)
Ending balance
$ 130
$ 307
$ 130

$ 231
7
11
41
(68)
(24)
178
(69)
$ 307

Corporate debt instruments
Beginning balance
Net realized gains/(losses)
Net unrealized gains/(losses)
Purchases
Sales
Settlements
Transfers into level 3
Transfers out of level 3
Ending balance

$ 918
12
3
215
(164)
(77)
65
(81)
$ 891

$ 719
9
(23)
140
(93)
(20)
138
(106)
$ 764

$ 797
26
20
554
(287)
(151)
35
(103)
$ 891

$ 692
35
(137)
303
(175)
(85)
235
(104)
$ 764

Other
Beginning balance
Net realized gains/(losses)
Net unrealized gains/(losses)
Purchases
Sales
Settlements
Transfers into level 3
Transfers out of level 3
Ending balance

$ 136
5
1
46
(31)
(11)
66
(25)
$ 187

$ 134
3
(10)
141
(30)
(9)
82
(8)
$ 303

$ 106
3
(5)
65
(35)
(35)
96
(8)
$ 187

$ 128
13
(31)
186
(64)
(17)
93
(5)
$ 303

$ in millions

2020

In the table above, other includes U.S. and non-U.S.
government and agency obligations, other debt obligations
and equity securities.
Level 3 Rollforward Commentary
Three Months Ended June 2021. The net realized andunrealized gains on level 3 trading cash instrument assets of$33 million (reflecting $23 million of net realized gains and$10 million of net unrealized gains) for the three months
ended June 2021 included gains/(losses) of $(2) million
reported in market making and $35 million reported ininterest income.
The drivers of net unrealized gains on level 3 trading cash
instrument assets for the three months ended June 2021
were not material.
19

Goldman Sachs June 2021 Form 10-Q

The drivers of transfers into level 3 trading cash instrument
assets during the three months ended June 2021 were notmaterial.
The drivers of transfers out of level 3 trading cash
instrument assets during the three months ended June 2021
were not material.
Six Months Ended June 2021. The net realized andunrealized gains on level 3 trading cash instrument assets of$58 million (reflecting $42 million of net realized gains and$16 million of net unrealized gains) for the six months
ended June 2021 included gains/(losses) of $(10) million
reported in market making and $68 million reported ininterest income.
The drivers of net unrealized gains on level 3 trading cash
instrument assets for the six months ended June 2021 were
not material.
The drivers of transfers into level 3 trading cash instrument
assets during the six months ended June 2021 were notmaterial.
Transfers out of level 3 trading cash instrument assets
during the six months ended June 2021 primarily reflectedtransfers of certain corporate debt instruments and loans
and securities backed by commercial real estate to level 2 (ineach case, principally due to increased price transparency asa result of market evidence, including market transactionsin these instruments).
Three Months Ended June 2020. The net realized andunrealized losses on level 3 trading cash instrument assets of$23 million (reflecting $17 million of net realized gains and$40 million of net unrealized losses) for the three months
ended June 2020 included gains/(losses) of $(56) million
reported in market making and $33 million reported ininterest income.
The drivers of net unrealized losses on level 3 trading cash
instrument assets for the three months ended June 2020
were not material.
Transfers into level 3 trading cash instrument assets during
the three months ended June 2020 primarily reflectedtransfers of certain loans and securities backed bycommercial and residential real estate and corporate debt
instruments from level 2 (in each case, principally due toreduced price transparency as a result of a lack of market
evidence, including fewer market transactions in these
instruments).
Transfers out of level 3 trading cash instrument assets
during the three months ended June 2020 primarilyreflected transfers of certain corporate debt instruments tolevel 2 (principally due to increased price transparency as aresult of market evidence, including market transactions inthese instruments).

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
Six Months Ended June 2020. The net realized andunrealized losses on level 3 trading cash instrument assets of$122 million (reflecting $68 million of net realized gains
and $190 million of net unrealized losses) for the six
months ended June 2020 included gains/(losses) of$(194) million reported in market making and $72 million
reported in interest income.
The net unrealized losses on level 3 trading cash instrument
assets for the six months ended June 2020 primarilyreflected losses on corporate debt instruments (principallyreflecting the impact of wider credit spreads).
Transfers into level 3 trading cash instrument assets during
the six months ended June 2020 primarily reflected transfersof certain loans and securities backed by commercial andresidential real estate and corporate debt instruments fromlevel 2 (in each case, principally due to reduced pricetransparency as a result of a lack of market evidence,
including fewer market transactions in these instruments).
Transfers out of level 3 trading cash instrument assets
during the six months ended June 2020 primarily reflectedtransfers of certain corporate debt instruments to level 2(principally due to certain unobservable yield and duration
inputs no longer being significant to the valuation of these
instruments and increased price transparency as a result ofmarket evidence, including market transactions in these
instruments).
Note 7.

Derivatives and Hedging Activities
Derivative Activities
Derivatives are instruments that derive their value fromunderlying asset prices, indices, reference rates and other
inputs, or a combination of these factors. Derivatives may
be traded on an exchange (exchange-traded) or they may beprivately negotiated contracts, which are usually referred toas OTC derivatives. Certain of the firm’s OTC derivatives
are cleared and settled through central clearing
counterparties (OTC-cleared), while others are bilateralcontracts between two counterparties (bilateral OTC).
Market Making. As a market maker, the firm enters into
derivative transactions to provide liquidity to clients and to
facilitate the transfer and hedging of their risks. In this role,
the firm typically acts as principal and is required to commit
capital to provide execution, and maintains market-making
positions in response to, or in anticipation of, clientdemand.

Risk Management. The firm also enters into derivatives toactively manage risk exposures that arise from its marketmaking and investing and financing activities. The firm’s
holdings and exposures are hedged, in many cases, on either
a portfolio or risk-specific basis, as opposed to an
instrument-by-instrument basis. The offsetting impact of
this economic hedging is reflected in the same businesssegment as the related revenues. In addition, the firm mayenter into derivatives designated as hedges under U.S.
GAAP. These derivatives are used to manage interest rate
exposure of certain fixed-rate unsecured borrowings anddeposits, foreign exchange risk of certain available-for-salesecurities and the net investment in certain non-U.S.
operations, and the price risk of certain commodities.
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.
‰ Swaps. Contracts that require counterparties toexchange cash flows, such as currency or interest
payment streams. The amounts exchanged are based on
the specific terms of the contract with reference tospecified rates, financial instruments, commodities,
currencies or indices.
‰ Options. Contracts in which the option purchaser has
the right, but not the obligation, to purchase from or sellto the option writer financial instruments, commodities
or currencies within a defined time period for a specified
price.
Derivatives are reported on a net-by-counterparty basis (i.e.,
the net payable or receivable for derivative assets andliabilities for a given counterparty) when a legal right ofsetoff exists under an enforceable netting agreement(counterparty netting). Derivatives are accounted for at fairvalue, net of cash collateral received or posted underenforceable credit support agreements (cash collateral
netting). Derivative assets are included in trading assets andderivative liabilities are included in trading liabilities.
Realized and unrealized gains and losses on derivatives notdesignated as hedges are included in market making (forderivatives included in the Global Markets segment), andother principal transactions (for derivatives included in theremaining business segments) in the consolidated statementsof earnings. For each of the three and six months ended
June 2021 and June 2020, substantially all of the firm’s
derivatives were included in the Global Markets segment.

Goldman Sachs June 2021 Form 10-Q

20

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
The tables below present the gross fair value and thenotional amounts of derivative contracts by major producttype, the amounts of counterparty and cash collateral
netting in the consolidated balance sheets, as well as cash
and securities collateral posted and received underenforceable credit support agreements that do not meet thecriteria for netting under U.S. GAAP.
As of June 2021
$ in millions

Derivative
AssetsNot accounted for as hedges
Exchange-traded$424
OTC-cleared
14,991
Bilateral OTC
257,863
Total interest rates
273,278
OTC-cleared
5,317
Bilateral OTC
12,108
Total credit
17,425
Exchange-traded592
OTC-cleared
329
Bilateral OTC
79,205
Total currencies
80,126
Exchange-traded
6,554
OTC-cleared
367
Bilateral OTC
18,084
Total commodities
25,005
Exchange-traded
34,480OTC-cleared7
Bilateral OTC
43,939Total equities
78,426
Subtotal
474,260
Accounted for as hedges
OTC-cleared–
Bilateral OTC
1,098
Total interest rates
1,098
OTC-cleared
11
Bilateral OTC
110Total currencies
121
Subtotal
1,219
Total gross fair value$ 475,479

As of December 2020

Derivative
Liabilities

Derivative
AssetsDerivative
Liabilities

$

$

$

471
13,594
229,507
243,572
5,745
11,15916,90430
371
76,41776,8186,836
313
18,975
26,12435,011
5
47,55082,566445,984

–
–
–
21
290
311
311
$ 446,295

665
18,832337,998
357,495
4,137
12,41816,555133
401
101,830
102,364
4,476
195
9,320
13,991
29,006–47,86776,873567,278660
16,809304,370
321,839
4,517
11,551
16,06822
631
102,676
103,329
4,177
187
13,691
18,05531,944–49,07281,016
540,307

1
1,346
1,347
–
4
4
1,351
$ 568,629

–
–
–
87
372
459
459
$ 540,766

Offset in the consolidated balance sheets
Exchange-traded$ (36,292) $ (36,292) $ (29,549)
OTC-cleared(19,452)(19,452)(21,315)
Bilateral OTC(291,186)(291,186) (372,142)
Counterparty netting(346,930)(346,930) (423,006)
OTC-cleared(1,321)(486)(1,926)
Bilateral OTC(60,876)(50,185)(74,116)
Cash collateral netting(62,197)(50,671)(76,042)
Total amounts offset$(409,127) $(397,601) $(499,048)$ (29,549)(21,315)(372,142)(423,006)(720)(58,449)(59,169)$(482,175)

Included in the consolidated balance sheets
Exchange-traded$ 5,758 $ 6,056
OTC-cleared249
111
Bilateral OTC
60,34542,527
Total$ 66,352 $ 48,694

$

4,731
325
64,525$ 69,581

Not offset in the consolidated balance sheets
Cash collateral$(614) $ (1,501) $(979)
Securities collateral(16,249)(7,510)(17,297)
Total$ 49,489 $ 39,683 $ 51,305

21

Goldman Sachs June 2021 Form 10-Q

$

7,254
196
51,141$ 58,591$(2,427)(9,943)$ 46,221

Notional Amounts as of$ in millions

Not accounted for as hedges
Exchange-traded
OTC-cleared
Bilateral OTC
Total interest rates
Exchange-traded
OTC-cleared
Bilateral OTC
Total credit
Exchange-traded
OTC-cleared
Bilateral OTC
Total currencies
Exchange-traded
OTC-cleared
Bilateral OTC
Total commodities
Exchange-traded
OTC-cleared
Bilateral OTC
Total equities
Subtotal
Accounted for as hedges
OTC-cleared
Bilateral OTC
Total interest rates
OTC-cleared
Bilateral OTC
Total currencies
Exchange-traded
Total commodities
Subtotal
Total notional amounts

June
2021

December2020$ 3,580,979
16,456,302
12,395,407
32,432,688
43
584,383
565,326
1,149,752
17,881
177,166
6,538,109
6,733,156
308,6362,010
224,315534,961
1,204,111
179
1,312,771
2,517,061
43,367,618$ 3,722,558
13,789,571
11,076,460
28,588,589–
515,197558,813
1,074,010
7,413
157,687
6,041,663
6,206,763
242,193
2,315
206,253
450,761
948,937

203,427
5,507
208,934
2,164
18,242
20,406
2,086
2,086
231,426$43,599,044

182,311
6,641
188,952
1,767
14,055
15,822–

1,126,572
2,075,509
38,395,632––

204,774$38,600,406

In the tables above:‰ Gross fair values exclude the effects of both counterparty
netting and collateral, and therefore are notrepresentative of the firm’s exposure.
‰ Where the firm has received or posted collateral undercredit support agreements, but has not yet determinedsuch agreements are enforceable, the related collateral has
not been netted.
‰ Notional amounts, which represent the sum of gross longand short derivative contracts, provide an indication of
the volume of the firm’s derivative activity and do not
represent anticipated losses.
‰ Total gross fair value of derivatives included derivative
assets of $18.04 billion as of June 2021 and$20.60 billion as of December 2020, and derivative
liabilities of $17.49 billion as of June 2021 and$22.98 billion as of December 2020, which are notsubject to an enforceable netting agreement or are subject
to a netting agreement that the firm has not yet
determined to be enforceable.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
Fair Value of Derivatives by Level
The table below presents derivatives on a gross basis bylevel and product type, as well as the impact of netting.
$ in millions

Level 1

Level 2

Level 3Total

As of June 2021
AssetsInterest rates
CreditCurrencies
Commodities
Equities
Gross fair valueCounterparty netting in levels
Subtotal
Cross-level counterparty netting
Cash collateral netting
Net fair value
Liabilities
Interest rates
CreditCurrencies
Commodities
Equities
Gross fair valueCounterparty netting in levels
Subtotal
Cross-level counterparty netting
Cash collateral netting
Net fair value$ 177 $ 273,265 $ 934 $ 274,376
1
14,2103,214
17,425–80,033
214
80,247–
24,265740
25,005
1776,931
1,478
78,426
195468,704
6,580
475,479– (344,650)(822) (345,472)$ 195 $ 124,054 $ 5,758 $ 130,007(1,458)(62,197)$ 66,352‰ Derivative assets are shown as positive amounts andderivative liabilities are shown as negative amounts.
See Note 4 for an overview of the firm’s fair value
measurement policies and the valuation techniques andsignificant inputs used to determine the fair value ofderivatives.
Significant Unobservable Inputs
The table below presents the amount of level 3 derivative
assets (liabilities), and ranges, averages and medians ofsignificant unobservable inputs used to value level 3
derivatives.
As of June 2021
Amount or Average/$ in millions, except inputs
Range
Median$(6) $(242,940) $ (626) $(243,572)–(15,440) (1,464)(16,904)–(76,681)(448)(77,129)–(25,650)(474)(26,124)(65)(79,500) (3,001)(82,566)(71) (440,211) (6,013) (446,295)–
344,650822
345,472$ (71) $ (95,561) $(5,191) $(100,823)
1,458
50,671$ (48,694)

As of December 2020
AssetsInterest rates
CreditCurrencies
Commodities
Equities
Gross fair valueCounterparty netting in levels
Subtotal
Cross-level counterparty netting
Cash collateral netting
Net fair value$ 297 $ 357,568 $ 977 $ 358,842–
13,104
3,451
16,555–102,221147
102,368–
13,285706
13,99175
75,054
1,744
76,873372
561,232
7,025
568,629(135) (420,685) (1,058) (421,878)$ 237 $ 140,547 $ 5,967 $ 146,751(1,128)(76,042)$ 69,581

Liabilities
Interest rates
CreditCurrencies
Commodities
Equities
Gross fair valueCounterparty netting in levels
Subtotal
Cross-level counterparty netting
Cash collateral netting
Net fair value$(229) $(320,900) $ (710) $(321,839)–(14,395) (1,673)(16,068)–(103,303)(485) (103,788)–(17,649)(406)(18,055)(318)(78,122) (2,576)(81,016)(547) (534,369) (5,850) (540,766)
135
420,685
1,058
421,878$(412) $(113,684) $(4,792) $(118,888)
1,128
59,169$ (58,591)

In the table above:‰ Gross fair values exclude the effects of both counterparty
netting and collateral netting, and therefore are notrepresentative of the firm’s exposure.

Interest rates, net
Correlation
Volatility (bps)
Credit, net
Credit spreads (bps)
Upfront credit points
Recovery rates
Currencies, net
Correlation
Volatility
Commodities, net
Volatility$308
22% to 81% 62%/60%
31 to 150
64/54
$1,750100/782 to 568
44/30
6 to 10020% to 90% 53%/40%$(234)
20% to 70% 39%/41%
18% to 19% 18%/18%$266
15% to 75% 32%/31%

As of December 2020
Amount or
Range

Average/
Median$267(8)% to 81% 56%/60%
31 to 150
65/53
$1,7782 to 699
109/747 to 90
40/30
25% to 90% 46%/40%$(338)
20% to 70% 39%/41%
18% to 18% 18%/18%$300
15% to 87% 32%/30%

Natural gas spread$(1.59) to$3.92$(0.12)/$(0.07)$(1.00) to$2.13$(0.13)/$(0.09)

Oil spread$7.62 to$12.53$9.55/$9.13$8.30 to$11.20$9.73/$9.55

Electricity price
Equities, net
Correlation
Volatility$15.37 to$33.55/
N/A
N/A$67.44$33.16$(832)$(1,523)(70)% to 100% 54%/58% (70)% to 100% 52%/55%
3% to 154% 18%/16%
3% to 129% 14%/7%

In the table above:‰ Derivative assets are shown as positive amounts andderivative liabilities are shown as negative amounts.
‰ Ranges represent the significant unobservable inputs thatwere used in the valuation of each type of derivative.
‰ Averages represent the arithmetic average of the inputs
and are not weighted by the relative fair value or notionalamount of the respective financial instruments. An
average greater than the median indicates that the
majority of inputs are below the average. For example,
the difference between the average and the median for
credit spreads indicates that the majority of the inputs fallin the lower end of the range.

‰ Counterparty netting is reflected in each level to theextent that receivable and payable balances are netted
within the same level and is included in counterparty
netting in levels. Where the counterparty netting is acrosslevels, the netting is included in cross-level counterparty
netting.
Goldman Sachs June 2021 Form 10-Q

22

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)‰ The ranges, averages and medians of these inputs are notrepresentative of the appropriate inputs to use whencalculating the fair value of any one derivative. For
example, the highest correlation for interest rate
derivatives is appropriate for valuing a specific interest
rate derivative but may not be appropriate for valuing anyother interest rate derivative. Accordingly, the ranges of
inputs do not represent uncertainty in, or possible rangesof, fair value measurements of level 3 derivatives.
‰ Interest rates, currencies and equities derivatives arevalued using option pricing models, credit derivatives arevalued using option pricing, correlation and discounted
cash flow models, and commodities derivatives are valued
using option pricing and discounted cash flow models.
‰ The fair value of any one instrument may be determinedusing multiple valuation techniques. For example, option
pricing models and discounted cash flow models are
typically used together to determine fair value. Therefore,
the level 3 balance encompasses both of these techniques.
‰ Correlation within currencies and equities includes crossproduct type correlation.
‰ Natural gas spread represents the spread per million
British thermal units of natural gas.
‰ Oil spread represents the spread per barrel of oil andrefined products.
‰ Electricity price represents the price per megawatt hour ofelectricity.
Range of Significant Unobservable Inputs
The following provides information about the ranges ofsignificant unobservable inputs used to value the firm’slevel 3 derivative instruments:‰ Correlation. Ranges for correlation cover a variety ofunderliers both within one product type (e.g., equity
index and equity single stock names) and across producttypes (e.g., correlation of an interest rate and a currency),
as well as across regions. Generally, cross-product typecorrelation inputs are used to value more complex
instruments and are lower than correlation inputs on
assets within the same derivative product type.
‰ Volatility. Ranges for volatility cover numerous
underliers across a variety of markets, maturities andstrike prices. For example, volatility of equity indices isgenerally lower than volatility of single stocks.

23

Goldman Sachs June 2021 Form 10-Q

‰ Credit spreads, upfront credit points and recovery
rates. The ranges for credit spreads, upfront credit points
and recovery rates cover a variety of underliers (index andsingle names), regions, sectors, maturities and credit
qualities (high-yield and investment-grade). The broad
range of this population gives rise to the width of theranges of significant unobservable inputs.
‰ Commodity prices and spreads. The ranges forcommodity prices and spreads cover variability inproducts, maturities and delivery locations.
Sensitivity of Fair Value Measurement to Changes
in Significant Unobservable Inputs
The following is a description of the directional sensitivityof the firm’s level 3 fair value measurements to changes insignificant unobservable inputs, in isolation, as of eachperiod-end:‰ Correlation. In general, for contracts where the holder
benefits from the convergence of the underlying asset orindex prices (e.g., interest rates, credit spreads, foreignexchange rates, inflation rates and equity prices), an
increase in correlation results in a higher fair value
measurement.
‰ Volatility. In general, for purchased options, an increasein volatility results in a higher fair value measurement.
‰ Credit spreads, upfront credit points and recovery
rates. In general, the fair value of purchased credit
protection increases as credit spreads or upfront credit
points increase or recovery rates decrease. Credit spreads,
upfront credit points and recovery rates are strongly
related to distinctive risk factors of the underlying
reference obligations, which include reference entityspecific factors, such as leverage, volatility and industry,market-based risk factors, such as borrowing costs or
liquidity of the underlying reference obligation, andmacroeconomic conditions.
‰ Commodity prices and spreads. In general, forcontracts where the holder is receiving a commodity, an
increase in the spread (price difference from a benchmark
index due to differences in quality or delivery location) or
price results in a higher fair value measurement.
Due to the distinctive nature of each of the firm’s level 3
derivatives, the interrelationship of inputs is not necessarily
uniform within each product type.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
Level 3 Rollforward
The table below presents a summary of the changes in fairvalue for level 3 derivatives.
Three Months
Ended June

Six Months
Ended June

2021

2020

2021

Total level 3 derivatives, net
Beginning balance$ 645
Net realized gains/(losses)
119
Net unrealized gains/(losses)(408)
Purchases
29
Sales
(294)
Settlements
568
Transfers into level 3(260)
Transfers out of level 3
168
Ending balance$ 567$1,660
70
(76)
157
(264)
1,557
(17)
(27)
$3,060$1,175
73
(458)
134
(756)
509
(181)
71
$ 567

$ in millions

2020

$

25
136
2,110
326
(516)
945
(36)
70
$3,060In the table above:‰ Changes in fair value are presented for all derivative
assets and liabilities that are classified in level 3 as of theend of the period.
‰ Net unrealized gains/(losses) relates to instruments thatwere still held at period-end.
‰ Transfers between levels of the fair value hierarchy arereported at the beginning of the reporting period in which
they occur. If a derivative was transferred into level 3
during a reporting period, its entire gain or loss for theperiod is classified in level 3.
‰ Positive amounts for transfers into level 3 and negative
amounts for transfers out of level 3 represent net transfersof derivative assets. Negative amounts for transfers intolevel 3 and positive amounts for transfers out of level 3
represent net transfers of derivative liabilities.
‰ A derivative with level 1 and/or level 2 inputs is classified
in level 3 in its entirety if it has at least one significant
level 3 input.
‰ If there is one significant level 3 input, the entire gain orloss from adjusting only observable inputs (i.e., level 1
and level 2 inputs) is classified in level 3.
‰ Gains or losses that have been classified in level 3
resulting from changes in level 1 or level 2 inputs are
frequently offset by gains or losses attributable to level 1
or level 2 derivatives and/or level 1, level 2 and level 3
trading cash instruments. As a result, gains/(losses)
included in the level 3 rollforward below do notnecessarily represent the overall impact on the firm’s
results of operations, liquidity or capital resources.

The table below presents information, by product type, forderivatives included in the summary table above.

$ in millions

Three Months
Ended June

Six Months
Ended June

2021

2020

2021

2020

319 $
33
(42)
–
(33)
60
(1)
(28)
308 $

266
1
(12)
19
(8)
26
6
13
311

267 $
56
97
2
(55)
6
2
(67)
308 $

89
15
170
21
(17)
23
8
2
311

Interest rates, net
Beginning balance
Net realized gains/(losses)
Net unrealized gains/(losses)
Purchases
Sales
Settlements
Transfers into level 3
Transfers out of level 3
Ending balance$

Credit, net
Beginning balance
Net realized gains/(losses)
Net unrealized gains/(losses)
Purchases
Sales
Settlements
Transfers into level 3
Transfers out of level 3
Ending balance$ 1,875 $ 2,518
5
14
18
(152)
10
44
(26)
(47)
6
101
(82)
(94)
(56)
(57)
$ 1,750 $ 2,327$ 1,778 $ 1,877
(14)
(1)
29
366
8
75
(28)
(52)
49
41
(36)
10
(36)
11
$ 1,750 $ 2,327

Currencies, net
Beginning balance
Net realized gains/(losses)
Net unrealized gains/(losses)
Purchases
Sales
Settlements
Transfers into level 3
Transfers out of level 3
Ending balance$ (289) $
61
28
6
(169)
(53)
1
9
(30)
(5)
272
(106)
(57)
(1)
10
(5)
$ (234) $ (94)

$ (338) $ (211)
28
(4)
(90)
17
4
9
(36)
(5)
245
105
(70)
(3)
23
(2)
$ (234) $ (94)

$

$

$

Commodities, net
Beginning balance
Net realized gains/(losses)
Net unrealized gains/(losses)
Purchases
Sales
Settlements
Transfers into level 3
Transfers out of level 3
Ending balance$

Equities, net
Beginning balance
Net realized gains/(losses)
Net unrealized gains/(losses)
Purchases
Sales
Settlements
Transfers into level 3
Transfers out of level 3
Ending balance$(1,472) $(1,573)
44
44
(350)
92
14
83
(203)
(202)
297
1,620
(117)
90
264
31
$(1,523) $ 185

212 $
9
135
4
(2)
(67)
(3)
(22)
266 $

388
5
49
2
(2)
(84)
(18)
(9)
331

$

$

$

300 $
(59)
129
16
(8)
(84)
(17)
(11)
266 $

247
7
154
32
(5)
(57)
(30)
(17)
331

$ (832) $(1,977)
62119(623) 1,403
104
189
(629)
(437)
293
833
(60)
(21)
162
76
$(1,523) $ 185

Level 3 Rollforward Commentary
Three Months Ended June 2021. The net realized andunrealized losses on level 3 derivatives of $289 million(reflecting $119 million of net realized gains and$408 million of net unrealized losses) for the three months
ended June 2021 included gains/(losses) of $(307) million
reported in market making and $18 million reported in otherprincipal transactions.
Goldman Sachs June 2021 Form 10-Q

24

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
The net unrealized losses on level 3 derivatives for the threemonths ended June 2021 were primarily attributable tolosses on certain equity derivatives (primarily reflecting theimpact of an increase in equity prices) and losses on certain
currency derivatives (primarily reflecting the impact ofchanges in foreign exchange rates), partially offset by gains
on certain commodity derivatives (primarily reflecting theimpact of an increase in commodity prices).
Transfers into level 3 derivatives during the three months
ended June 2021 primarily reflected transfers of certain
equity derivative liabilities from level 2 (principally due toreduced transparency of certain volatility inputs used tovalue these derivatives) and transfers of certain credit
derivative liabilities from level 2 (principally due to certain
unobservable credit spread inputs becoming significant tothe valuation of these derivatives).
Transfers out of level 3 derivatives during the three months
ended June 2021 primarily reflected transfers of certain
equity derivative liabilities to level 2 (principally due toincreased transparency of certain volatility inputs used tovalue these derivatives).
Six Months Ended June 2021. The net realized andunrealized losses on level 3 derivatives of $385 million(reflecting $73 million of net realized gains and$458 million of net unrealized losses) for the six months
ended June 2021 included gains/(losses) of $(407) million
reported in market making and $22 million reported inother principal transactions.
The net unrealized losses on level 3 derivatives for the six
months ended June 2021 were primarily attributable tolosses on certain equity derivatives (primarily reflecting theimpact of an increase in equity prices), partially offset bygains on certain commodity derivatives (primarily reflecting
the impact of an increase in commodity prices).
The drivers of transfers into level 3 derivatives during thesix months ended June 2021 were not material.
Transfers out of level 3 derivatives during the six months
ended June 2021 primarily reflected transfers of certain
equity derivative liabilities to level 2 (principally due toincreased transparency of certain volatility inputs used tovalue these derivatives), partially offset by transfers ofcertain interest rate derivative assets to level 2 (principally
due to certain unobservable inputs no longer being
significant to the valuation of these derivatives).

25

Goldman Sachs June 2021 Form 10-Q

Three Months Ended June 2020. The net realized andunrealized losses on level 3 derivatives of $6 million(reflecting $70 million of net realized gains and $76 millionof net unrealized losses) for the three months ended
June 2020 included gains/(losses) of $55 million reported inmarket making and $(61) million reported in otherprincipal transactions.
The drivers of the net unrealized losses on level 3 derivatives
for the three months ended June 2020 were primarily
attributable to losses on certain credit derivatives (primarilyreflecting the tightening of certain credit spreads), partially
offset by gains on certain equity derivatives (primarilyreflecting changes in underlying equity prices).
The drivers of both transfers into level 3 derivatives andtransfers out of level 3 derivatives during the three months
ended June 2020 were not material.
Six Months Ended June 2020. The net realized andunrealized gains on level 3 derivatives of $2.25 billion(reflecting $136 million of net realized gains and$2.11 billion of net unrealized gains) for the six months
ended June 2020 included gains/(losses) of $2.29 billion
reported in market making and $(45) million reported inother principal transactions.
The net unrealized gains on level 3 derivatives for the six
months ended June 2020 were primarily attributable togains on certain equity derivatives (primarily reflecting theimpact of a decrease in underlying equity prices) and gains
on certain credit derivatives (primarily reflecting the impactof a decrease in interest rates).
The drivers of both transfers into level 3 derivatives andtransfers out of level 3 derivatives during the six months
ended June 2020 were not material.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)OTC Derivatives
The table below presents OTC derivative assets andliabilities by tenor and major product type.

$ in millions

Less than
1 Year

1 - 5 Greater thanYears
5 Years

Total

As of June 2021
AssetsInterest rates$ 6,045 $14,080
Credit1,645
2,376
Currencies
13,9306,595
Commodities
7,222
4,150
Equities
8,111 11,005
Counterparty netting in tenors(3,767) (3,367)
Subtotal$33,186 $34,839
Cross-tenor counterparty netting
Cash collateral netting
Total OTC derivative assets$62,553 $ 82,678
3,046
7,067
6,832
27,357459
11,831
2,833
21,949(2,613)(9,747)$73,110 $141,135(18,344)(62,197)$ 60,594

Liabilities
Interest rates$ 4,624 $10,615
Credit1,513
3,262
Currencies
14,2695,522
Commodities
5,989
3,426
Equities
8,384 13,621
Counterparty netting in tenors(3,767) (3,367)
Subtotal$31,012 $33,079
Cross-tenor counterparty netting
Cash collateral netting
Total OTC derivative liabilities$36,588 $ 51,827
1,771
6,546
5,010
24,801
3,253
12,6683,553
25,558(2,613)(9,747)$47,562 $111,653(18,344)(50,671)$ 42,638

In the table above:‰ Tenor is based on remaining contractual maturity.
‰ Counterparty netting within the same product type andtenor category is included within such product type andtenor category.
‰ Counterparty netting across product types within thesame tenor category is included in counterparty netting intenors. Where the counterparty netting is across tenor
categories, the netting is included in cross-tenor
counterparty netting.
Credit Derivatives
The firm enters into a broad array of credit derivatives tofacilitate client transactions and to manage the credit risk
associated with market-making and investing and financing
activities. Credit derivatives are actively managed based on
the firm’s net risk position. Credit derivatives are generally
individually negotiated contracts and can have various
settlement and payment conventions. Credit events include
failure to pay, bankruptcy, acceleration of indebtedness,
restructuring, repudiation and dissolution of the reference
entity.
The firm enters into the following types of credit
derivatives:

As of December 2020
AssetsInterest rates$ 8,913 $20,145
Credit822
3,270
Currencies
13,887
7,400
Commodities
2,998
1,466
Equities
12,182 12,590
Counterparty netting in tenors(3,963) (4,458)
Subtotal$34,839 $40,413
Cross-tenor counterparty netting
Cash collateral netting
Total OTC derivative assets$74,893 $103,951
3,302
7,394
9,303
30,590
488
4,952
1,807
26,579(3,182) (11,603)$86,611 $161,863(20,971)(76,042)$ 64,850

Liabilities
Interest rates$ 5,687 $11,967
Credit1,268
3,462
Currencies
18,7707,575
Commodities
3,455
1,545
Equities
9,702 14,095
Counterparty netting in tenors(3,963) (4,458)
Subtotal$34,919 $34,186
Cross-tenor counterparty netting
Cash collateral netting
Total OTC derivative liabilities$49,301 $ 66,955
2,177
6,907
5,775
32,120
4,315
9,315
3,986
27,783(3,182) (11,603)$62,372 $131,477(20,971)(59,169)$ 51,337‰ Credit Default Swaps. Single-name credit default swaps
protect the buyer against the loss of principal on one ormore bonds, loans or mortgages (reference obligations) inthe event the issuer of the reference obligations suffers acredit event. The buyer of protection pays an initial or
periodic premium to the seller and receives protection forthe period of the contract. If there is no credit event, as
defined in the contract, the seller of protection makes nopayments to the buyer. If a credit event occurs, the sellerof protection is required to make a payment to the buyer,
calculated according to the terms of the contract.
‰ Credit Options. In a credit option, the option writerassumes the obligation to purchase or sell a reference
obligation at a specified price or credit spread. The option
purchaser buys the right, but does not assume theobligation, to sell the reference obligation to, or purchaseit from, the option writer. The payments on credit options
depend either on a particular credit spread or the price ofthe reference obligation.

Goldman Sachs June 2021 Form 10-Q

26

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)‰ Credit Indices, Baskets and Tranches. Credit
derivatives may reference a basket of single-name credit
default swaps or a broad-based index. If a credit event
occurs in one of the underlying reference obligations, theprotection seller pays the protection buyer. The payment
is typically a pro-rata portion of the transaction’s total
notional amount based on the underlying defaulted
reference obligation. In certain transactions, the credit
risk of a basket or index is separated into various portions(tranches), each having different levels of subordination.
The most junior tranches cover initial defaults and once
losses exceed the notional amount of these juniortranches, any excess loss is covered by the next mostsenior tranche.
‰ Total Return Swaps. A total return swap transfers therisks relating to economic performance of a reference
obligation from the protection buyer to the protection
seller. Typically, the protection buyer receives a floating
rate of interest and protection against any reduction infair value of the reference obligation, and the protection
seller receives the cash flows associated with the reference
obligation, plus any increase in the fair value of thereference obligation.
The firm economically hedges its exposure to written credit
derivatives primarily by entering into offsetting purchased
credit derivatives with identical underliers. Substantially allof the firm’s purchased credit derivative transactions arewith financial institutions and are subject to stringent
collateral thresholds. In addition, upon the occurrence of a
specified trigger event, the firm may take possession of thereference obligations underlying a particular written credit
derivative, and consequently may, upon liquidation of thereference obligations, recover amounts on the underlying
reference obligations in the event of default.
As of June 2021, written credit derivatives had a total grossnotional amount of $553.09 billion and purchased credit
derivatives had a total gross notional amount of$597.83 billion, for total net notional purchased protectionof $44.74 billion. As of December 2020, written credit
derivatives had a total gross notional amount of$515.85 billion and purchased credit derivatives had a total
gross notional amount of $558.18 billion, for total net
notional purchased protection of $42.33 billion. The firm’s
written and purchased credit derivatives primarily consistof credit default swaps.

The table below presents information about credit
derivatives.
Credit Spread on Underlier (basis points)$ in millions

0 - 250251 500

501 1,000

Greater
than
1,000

Total

As of June 2021
Maximum Payout/Notional Amount of Written Credit Derivatives by TenorLess than 1 year
$105,146 $ 9,126 $1,600 $ 4,052 $119,924
1 – 5 years
355,832
20,831
5,693
2,531
384,887
Greater than 5 years
42,5885,391
234
67
48,280Total$503,566 $35,348 $7,527 $ 6,650 $553,091
Maximum Payout/Notional Amount of Purchased Credit Derivatives
Offsetting$439,352 $24,603 $6,772 $ 5,637 $476,364
Other$107,788 $10,195 $2,859 $ 628 $121,470
Fair Value of Written Credit Derivatives
Asset$ 11,557 $ 966 $ 262 $39 $ 12,824
Liability
925
1,161
307
1,825
4,218
Net asset/(liability) $ 10,632 $ (195) $ (45) $(1,786) $ 8,606
As of December 2020
Maximum Payout/Notional Amount of Written Credit Derivatives by TenorLess than 1 year
$ 96,049 $ 5,826 $ 450 $ 2,403 $104,728
1 – 5 years
331,145
17,9138,801
4,932
362,791
Greater than 5 years
44,132
3,839
272
88
48,331
Total$471,326 $27,578 $9,523 $ 7,423 $515,850
Maximum Payout/Notional Amount of Purchased Credit Derivatives
Offsetting$407,315 $19,822 $8,679 $ 7,091 $442,907
Other$103,604 $ 7,272 $3,619 $ 776 $115,271
Fair Value of Written Credit Derivatives
Asset$ 10,302 $ 638 $ 256 $ 118 $ 11,314
Liability
1,112
1,119
387
2,001
4,619
Net asset/(liability)$ 9,190 $ (481) $ (131) $(1,883) $ 6,695

In the table above:‰ Fair values exclude the effects of both netting ofreceivable balances with payable balances underenforceable netting agreements, and netting of cash
received or posted under enforceable credit support
agreements, and therefore are not representative of thefirm’s credit exposure.
‰ Tenor is based on remaining contractual maturity.
‰ The credit spread on the underlier, together with the tenorof the contract, are indicators of payment/performancerisk. The firm is less likely to pay or otherwise be required
to perform where the credit spread and the tenor are
lower.
‰ Offsetting purchased credit derivatives represent thenotional amount of purchased credit derivatives that
economically hedge written credit derivatives withidentical underliers.
‰ Other purchased credit derivatives represent the notionalamount of all other purchased credit derivatives notincluded in offsetting.

27

Goldman Sachs June 2021 Form 10-Q

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
Impact of Credit and Funding Spreads on Derivatives
The firm realizes gains or losses on its derivative contracts.
These gains or losses include credit valuation adjustments(CVA) relating to uncollateralized derivative assets andliabilities, which represents the gains or losses (including
hedges) attributable to the impact of changes in credit
exposure, counterparty credit spreads, liability funding
spreads (which includes the firm’s own credit), probabilityof default and assumed recovery. These gains or losses also
include funding valuation adjustments (FVA) relating touncollateralized derivative assets, which represents thegains or losses (including hedges) attributable to the impact
of changes in expected funding exposures and funding
spreads.
The table below presents information about CVA and FVA.
Three Months
Ended June

Six Months
Ended June

$ in millions

2021

2020

2021

2020

CVA, net of hedges
FVA, net of hedges
Total

$45
25
$70

$(322)
580
$ 258

$(63)
37
$(26)

$ (51)(179)$(230)

Bifurcated Embedded Derivatives
The table below presents the fair value and the notionalamount of derivatives that have been bifurcated from theirrelated borrowings.
As of
June
2021

December
2020

Fair value of assets
Fair value of liabilities
Net asset/(liability)$ 1,061(1,285)$ (224)$ 1,450(1,220)$ 230

Notional amount$11,856$12,548$ in millions

In the table above, derivatives that have been bifurcatedfrom their related borrowings are recorded at fair value andprimarily consist of interest rate, equity and commodity
products. These derivatives are included in unsecured shortand long-term borrowings, as well as other secured
financings, with the related borrowings.
Derivatives with Credit-Related Contingent Features
Certain of the firm’s derivatives have been transacted underbilateral agreements with counterparties who may require
the firm to post collateral or terminate the transactions
based on changes in the firm’s credit ratings. The firm
assesses the impact of these bilateral agreements bydetermining the collateral or termination payments thatwould occur assuming a downgrade by all rating agencies.
A downgrade by any one rating agency, depending on theagency’s relative ratings of the firm at the time of thedowngrade, may have an impact which is comparable tothe impact of a downgrade by all rating agencies.

The table below presents information about net derivative
liabilities under bilateral agreements (excluding collateralposted), the fair value of collateral posted and additional
collateral or termination payments that could have beencalled by counterparties in the event of a one- or two-notch
downgrade in the firm’s credit ratings.
As of$ in millions

June December
2021
2020

Net derivative liabilities under bilateral agreements $33,896
Collateral posted$27,986
Additional collateral or termination payments:
One-notch downgrade$ 283
Two-notch downgrade$ 1,074$43,368$35,296$ 481$ 1,388

Hedge Accounting
The firm applies hedge accounting for (i) interest rate swaps
used to manage the interest rate exposure of certain fixedrate unsecured long- and short-term borrowings and certain
fixed-rate certificates of deposit, (ii) foreign exchange
forward contracts used to manage the foreign exchange riskof certain available-for-sale securities, (iii) foreign currency
forward contracts and foreign currency-denominated debt
used to manage foreign currency exposures on the firm’s
net investment in certain non-U.S. operations and(iv) commodity futures contracts used to manage the pricerisk of certain commodities.
To qualify for hedge accounting, the hedging instrument
must be highly effective at reducing the risk from theexposure being hedged. Additionally, the firm mustformally document the hedging relationship at inception
and assess the hedging relationship at least on a quarterly
basis to ensure the hedging instrument continues to behighly effective over the life of the hedging relationship.
Fair Value Hedges
The firm designates interest rate swaps as fair value hedgesof certain fixed-rate unsecured long- and short-term debt
and fixed-rate certificates of deposit. These interest rate
swaps hedge changes in fair value attributable to thedesignated benchmark interest rate (e.g., London Interbank
Offered Rate (LIBOR), Secured Overnight Financing Rateor Overnight Index Swap Rate), effectively converting asubstantial portion of fixed-rate obligations into floatingrate obligations.
The firm applies a statistical method that utilizes regression
analysis when assessing the effectiveness of these hedging
relationships in achieving offsetting changes in the fairvalues of the hedging instrument and the risk being hedged(i.e., interest rate risk). An interest rate swap is consideredhighly effective in offsetting changes in fair value
attributable to changes in the hedged risk when the
regression analysis results in a coefficient of determinationof 80% or greater and a slope between 80% and 125%.
Goldman Sachs June 2021 Form 10-Q

28

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
For qualifying interest rate fair value hedges, gains or losses
on derivatives are included in interest expense. The change
in fair value of the hedged item attributable to the risk being
hedged is reported as an adjustment to its carrying value(hedging adjustment) and is also included in interest
expense. When a derivative is no longer designated as ahedge, any remaining difference between the carrying value
and par value of the hedged item is amortized to interest
expense over the remaining life of the hedged item using theeffective interest method. See Note 23 for further
information about interest income and interest expense.

In the third quarter of 2020, the firm designated foreignexchange forward contracts as fair value hedges of theforeign exchange risk of non-U.S. government securities
classified as available-for-sale. See Note 8 for information
about the amortized cost and fair value of such securities.
The effectiveness of such hedges is assessed based onchanges in spot rates. The losses on the hedges (relating toboth spot and forward points) and the foreign exchange
gains on the related available-for-sale securities were
included in market making and were not material for boththe three and six months ended June 2021.

The table below presents the gains/(losses) from interest
rate derivatives accounted for as hedges and the related
hedged borrowings and deposits, and total interest expense.

During the second quarter of 2021, the firm designatedcommodity futures contracts as fair value hedges of theprice risk of certain precious metals included incommodities within trading assets. As of June 2021, thecarrying value of such commodities was $2.03 billion andthe amortized cost was $2.09 billion. Changes in spot rates
of such commodities are reflected as an adjustment to theircarrying value, and the related gains/(losses) on both thecommodities and the designated futures contracts areincluded in market making. The contractual forward points
on the designated futures contracts are amortized into
earnings ratably over the life of the contract and othergains/(losses) as a result of changes in the forward points
are included in other comprehensive income/(loss). The
cumulative hedging adjustment was not material as ofJune 2021 and the related gains/(losses) were not material
for the three months ended June 2021.

$ in millions

Three Months
Ended June

Six Months
Ended June

2021

2021

2020

2020

Interest rate hedges$ 1,475 $ 353 $(3,930) $ 6,939
Hedged borrowings and deposits $(1,559) $ (564) $ 3,626 $(7,243)
Interest expense$ 1,310 $2,090 $ 2,882 $ 5,527

The table below presents the carrying value of deposits andunsecured borrowings that are designated in a hedging
relationship and the related cumulative hedging adjustment(increase/(decrease)) from current and prior hedging
relationships included in such carrying values.

Carrying
Value

Cumulative
Hedging
Adjustment

As of June 2021
Deposits
Unsecured short-term borrowings
Unsecured long-term borrowings$ 15,707$ 2,474$134,135

$ 456
$
21
$ 8,217

As of December 2020
Deposits
Unsecured short-term borrowings
Unsecured long-term borrowings$ 17,303$ 5,976$115,242

$ 649
$
53
$11,624$ in millions

In the table above, cumulative hedging adjustment included$6.34 billion as of both June 2021 and December 2020 ofhedging adjustments from prior hedging relationships thatwere de-designated and substantially all were related to
unsecured long-term borrowings.
In addition, cumulative hedging adjustments for items nolonger designated in a hedging relationship were$221 million as of June 2021 and $489 million as ofDecember 2020 and substantially all were related to
unsecured long-term borrowings.

Net Investment Hedges
The firm seeks to reduce the impact of fluctuations inforeign exchange rates on its net investments in certain
non-U.S. operations through the use of foreign currency
forward contracts and foreign currency-denominated debt.
For foreign currency forward contracts designated ashedges, the effectiveness of the hedge is assessed based on
the overall changes in the fair value of the forward contracts(i.e., based on changes in forward rates). For foreign
currency-denominated debt designated as a hedge, theeffectiveness of the hedge is assessed based on changes inspot rates. For qualifying net investment hedges, all gains orlosses on the hedging instruments are included in currencytranslation.
The table below presents the gains/(losses) from net
investment hedging.

$ in millions

Three Months
Ended June

Six Months
Ended June

2021

2021

2020

$(114) $227
$ (9) $259

$642
$ (30)

Hedges:Foreign currency forward contract $(233)
Foreign currency-denominated debt $ (6)29Goldman Sachs June 2021 Form 10-Q

2020

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
Gains or losses on individual net investments in non-U.S.
operations are reclassified to earnings from accumulated
other comprehensive income/(loss) when such net
investments are sold or substantially liquidated. The grossand net gains and losses on hedges and the related net
investments in non-U.S. operations reclassified to earnings
from accumulated other comprehensive income/(loss) were
not material for both the three and six months ended
June 2021. The net gain reclassified to earnings fromaccumulated other comprehensive income/(loss) was$57 million (reflecting a gain of $208 million related tohedges and a loss of $151 million on the related net
investments in non-U.S. operations) for both the three andsix months ended June 2020.
The firm had designated $5.25 billion as of June 2021 and$4.97 billion as of December 2020 of foreign currencydenominated debt, included in unsecured long- and shortterm borrowings, as hedges of net investments in non-U.S.
subsidiaries.
Note 8.

Investments
Investments includes debt instruments and equity securities
that are accounted for at fair value and are generally held by
the firm in connection with its long-term investing
activities. In addition, investments includes debt securities
classified as available-for-sale and held-to-maturity that are
generally held in connection with the firm’s asset-liability
management activities. Investments also consists of equity
securities that are accounted for under the equity method.
The table below presents information about investments.
As of$ in millions

Equity securities, at fair value
Debt instruments, at fair value
Available-for-sale securities, at fair value
Investments, at fair value
Held-to-maturity securities
Equity method investments
Total investments

June
2021

December2020$21,045
17,407
46,56985,021
5,260
446$90,727$19,781
16,98146,01682,7785,301
366$88,445

Equity Securities and Debt Instruments, at Fair Value
Equity securities and debt instruments, at fair value areaccounted for at fair value either under the fair value option
or in accordance with other U.S. GAAP, and the related fairvalue gains and losses are recognized in the consolidated
statements of earnings.

Equity Securities, at Fair Value. Equity securities, at fairvalue consists of the firm’s public and private equity
investments in corporate and real estate entities.
The table below presents information about equity
securities, at fair value.
As of
June
2021

December2020$21,045$19,781

Equity Type
Public equity
Private equity
Total

17%
83%
100%

15%
85%
100%

Asset Class
Corporate
Real estate
Total

83%
17%
100%

83%
17%
100%

$ in millions

Equity securities, at fair value

In the table above:‰ Equity securities, at fair value included investments
accounted for at fair value under the fair value option
where the firm would otherwise apply the equity methodof accounting of $6.23 billion as of June 2021 and$7.14 billion as of December 2020. Gains recognized as aresult of changes in the fair value of equity securities forwhich the fair value option was elected were $1.22 billion
for the three months ended June 2021, $99 million for thethree months ended June 2020, $1.64 billion for the six
months ended June 2021 and $176 million for the six
months ended June 2020. These gains are included inother principal transactions.
‰ Equity securities, at fair value included $2.50 billion as ofJune 2021 and $2.35 billion as of December 2020 ofinvestments in funds that are measured at NAV.
Debt Instruments, at Fair Value. Debt instruments, atfair value primarily includes mezzanine, senior anddistressed debt.
The table below presents information about debt
instruments, at fair value.
As of$ in millions

Corporate debt securities
Securities backed by real estate
Money market instruments
Other
Total

June
2021

December
2020$11,217
2,213
1,927
2,050
$17,407$10,991
1,940
2,185
1,865
$16,981

In the table above:‰ Money market instruments primarily includes time
deposits and investments in money market funds.
‰ Other included $1.49 billion as of June 2021 and$1.31 billion as of December 2020 of investments incredit funds that are measured at NAV.
Goldman Sachs June 2021 Form 10-Q

30

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
Investments in Funds at Net Asset Value Per Share.
Equity securities and debt instruments, at fair value include
investments in funds that are measured at NAV of theinvestment fund. The firm uses NAV to measure the fairvalue of fund investments when (i) the fund investment does
not have a readily determinable fair value and (ii) the NAVof the investment fund is calculated in a manner consistent
with the measurement principles of investment company
accounting, including measurement of the investments atfair value.
Substantially all of the firm’s investments in funds at NAV
consist of investments in firm-sponsored private equity,
credit, real estate and hedge funds where the firm co-invests
with third-party investors.
Private equity funds primarily invest in a broad range ofindustries worldwide, including leveraged buyouts,
recapitalizations, growth investments and distressed
investments. Credit funds generally invest in loans andother fixed income instruments and are focused onproviding private high-yield capital for leveraged andmanagement buyout transactions, recapitalizations,financings, refinancings, acquisitions and restructurings forprivate equity firms, private family companies andcorporate issuers. Real estate funds invest globally,
primarily in real estate companies, loan portfolios, debt
recapitalizations and property. Private equity, credit andreal estate funds are closed-end funds in which the firm’s
investments are generally not eligible for redemption.
Distributions will be received from these funds as theunderlying assets are liquidated or distributed, the timing of
which is uncertain.
The firm also invests in hedge funds, primarily multidisciplinary hedge funds that employ a fundamental
bottom-up investment approach across various asset classes
and strategies. The firm’s investments in hedge funds
primarily include interests where the underlying assets are
illiquid in nature, and proceeds from redemptions will not
be received until the underlying assets are liquidated or
distributed, the timing of which is uncertain.

31

Goldman Sachs June 2021 Form 10-Q

Private equity and hedge funds described above are
primarily “covered funds” as defined in the Volcker Rule of
the U.S. Dodd-Frank Wall Street Reform and Consumer
Protection Act (Dodd-Frank Act). Substantially all of thecredit and real estate funds described above are not covered
funds. The Board of Governors of the Federal Reserve
System (FRB) extended the conformance period toJuly 2022 for the firm’s investments in, and relationships
with, certain legacy “illiquid funds” (as defined in the
Volcker Rule) that were in place prior to December 2013.
This extension is applicable to substantially all of the firm’s
remaining investments in, and relationships with, suchcovered funds. As of June 2021, the firm’s total investments
in funds at NAV of $3.99 billion included $1.65 billion of
investments that were in covered funds.
The firm expects to achieve compliance for these covered
funds through ongoing harvesting of underlying fundinvestments in the ordinary course or through structuralmodifications to these funds. To the extent that the firm is
not able to achieve compliance through these measures, thefirm will be required to sell its interests in such funds by July
2022. If that occurs, the firm may receive a value for its
interests that is less than the then carrying value as there
could be a limited secondary market for these investments
and the firm may be unable to sell them in orderlytransactions.
The table below presents the fair value of investments infunds at NAV and the related unfunded commitments.
Fair Value ofInvestments

UnfundedCommitments

As of June 2021
Private equity funds
Credit funds
Hedge funds
Real estate funds
Total$2,1371,490
83
278$3,988

$ 625
685
–
206
$1,516

As of December 2020
Private equity funds
Credit funds
Hedge funds
Real estate funds
Total$2,042
1,312
102
208
$3,664

$ 557
680
–
213
$1,450$ in millions

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
Available-for-Sale Securities
Available-for-sale securities are accounted for at fair value,
and the related unrealized fair value gains and losses areincluded in accumulated other comprehensive income/(loss)
unless designated in a fair value hedging relationship. See
Note 7 for information about available-for-sale securities
that are designated in a hedging relationship.
The
table
below
presents
information
available-for-sale securities by tenor.

$ in millions

Amortized
Cost

about

Weighted
Fair
Average
Value
Yield

‰ Available-for-sale securities are reviewed to determine if
an allowance for credit losses should be recorded in the
consolidated statements of earnings. The firm considers
various factors in such determination, including market
conditions, changes in issuer credit ratings, severity of theunrealized losses, and the intent and ability to hold the
security until recovery. The firm did not record any
provision for credit losses on such securities during either
the three or six months ended June 2021 or June 2020.
Fair Value of Investments by Level
The table below presents investments accounted for at fairvalue by level within the fair value hierarchy.

As of June 2021
Less than 1 year
1 year to 5 years
5 years to 10 years
Total U.S. government obligations

$
25 $
25
37,089 37,003
7,453
7,503
44,567 44,531

0.03%
0.51%
1.18%
0.62%

5 years to 10 years
Greater than 10 years
Total non-U.S. government obligations
Total available-for-sale securities

1,759
1,710
357
328
2,116
2,038
$46,683 $46,569

0.10%
0.74%
0.21%
0.61%

Less than 1 year
1 year to 5 years
5 years to 10 years
Total U.S. government obligations

$
25 $
25
35,831 36,158
7,454
7,732
43,310 43,915

0.08%
0.70%
1.19%
0.78%

5 years to 10 years
Greater than 10 years
Total non-U.S. government obligations
Total available-for-sale securities

1,739
1,744
353
357
2,092
2,101
$45,402 $46,016

0.10%
0.74%
0.21%
0.76%

As of December 2020

In the table above:‰ Available-for-sale securities were classified in level 1 of
the fair value hierarchy as of both June 2021 andDecember 2020.
‰ The firm sold available-for-sale securities of $3.22 billion(realized gains of $3 million) during the three months
ended June 2021, $2.04 billion (realized gains of$54 million) during the three months ended June 2020,$13.42 billion (realized gains of $133 million) during thesix months ended June 2021 and $3.49 billion (realized
gains of $319 million) during the six months ended
June 2020. Such gains were included in the consolidated
statements of earnings.

$ in millions

Level 1

Level 2

Level 3Total

As of June 2021
Government and agency obligations:U.S.
$44,531 $– $– $44,531
Non-U.S.
2,041
55
–
2,096
Corporate debt securities
83
6,176
4,958 11,217
Securities backed by real estate
–
1,096
1,117
2,213
Money market instruments
766
1,161
–
1,927
Other debt obligations
–
–
502
502
Equity securities
406
8,386
9,755 18,547
Subtotal$47,827 $16,874 $16,332 $81,033
Investments in funds at NAV
3,988
Total investments$85,021

As of December 2020
Government and agency obligations:U.S.
$43,915 $– $– $43,915
Non-U.S.
2,109
48
–
2,157
Corporate debt securities
70
5,635
5,286 10,991
Securities backed by real estate
–
942
998
1,940
Money market instruments
781
1,404
–
2,185
Other debt obligations
–
–
497
497
Equity securities
517
7,270
9,642 17,429
Subtotal$47,392 $15,299 $16,423 $79,114
Investments in funds at NAV
3,664
Total investments$82,778

See Note 4 for an overview of the firm’s fair value
measurement policies and the valuation techniques andsignificant inputs used to determine the fair value ofinvestments.

‰ The gross unrealized gains included in accumulated othercomprehensive income/(loss) were $273 million and thegross unrealized losses included in accumulated othercomprehensive income/(loss) were $387 million as ofJune 2021. The gross unrealized gains included inaccumulated other comprehensive income/(loss) were$631 million and the gross unrealized losses included inaccumulated other comprehensive income/(loss) were notmaterial as of December 2020.

Goldman Sachs June 2021 Form 10-Q

32

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
Significant Unobservable Inputs
The table below presents the amount of level 3 investments,
and ranges and weighted averages of significant
unobservable inputs used to value such investments.
As of June 2021
$ in millions

As of December 2020

Amount or Weighted
Range Average

Corporate debt securities
Level 3 assets$4,958Yield
7.0% to 14.6%
Recovery rate
9.1% to 76.0%
Duration (years)
2.6 to 7.3
Multiples
0.5x to 20.9x
Securities backed by real estate
Level 3 assets$1,117Yield
8.3% to 28.2%
Recovery rate
20.9% to 57.8%
Duration (years)
0.5 to 3.2
Other debt obligations
Level 3 assets
$502
Yield
2.4% to 9.6%
Duration (years)
1.3 to 9.5
Equity securities
Level 3 assets$9,755Multiples
0.5x to 33.8x
Discount rate/yield 4.8% to 50.1%
Capitalization rate 3.8% to 13.1%

Amount or Weighted
Range Average$5,286
9.4% 4.5% to 19.5%
59.9% 10.0% to 70.0%
4.4
3.0 to 7.7
7.6x
0.6x to 29.3x

10.2%
50.7%
4.2
6.9x

$998
16.8% 8.2% to 52.4%
32.9% 21.6% to 57.8%
3.1
0.4 to 3.6

17.5%
33.7%
2.7

‰ The fair value of any one instrument may be determinedusing multiple valuation techniques. For example, market
comparables and discounted cash flows may be used
together to determine fair value. Therefore, the level 3
balance encompasses both of these techniques.
Level 3 Rollforward
The table below presents a summary of the changes in fairvalue for level 3 investments.

$ in millions

4.3%
5.6

$497
1.7% to 6.2%
0.2 to 10.3

3.5%
6.4

12.1x
15.4%
6.2%

$9,6420.6x to 27.9x
4.0% to 38.5%
3.7% to 14.1%

9.0x
13.5%
6.3%

In the table above:‰ Ranges represent the significant unobservable inputs thatwere used in the valuation of each type of investment.
‰ Weighted averages are calculated by weighting each input
by the relative fair value of the investment.
‰ The ranges and weighted averages of these inputs are notrepresentative of the appropriate inputs to use whencalculating the fair value of any one investment. For
example, the highest multiple for private equity securities
is appropriate for valuing a specific private equity security
but may not be appropriate for valuing any other private
equity security. Accordingly, the ranges of inputs do not
represent uncertainty in, or possible ranges of, fair value
measurements of level 3 investments.
‰ Increases in yield, discount rate, capitalization rate or
duration used in the valuation of level 3 investments
would have resulted in a lower fair value measurement,
while increases in recovery rate or multiples would haveresulted in a higher fair value measurement as of bothJune 2021 and December 2020. Due to the distinctive
nature of each level 3 investment, the interrelationship of
inputs is not necessarily uniform within each product
type.

33

‰ Corporate debt securities, securities backed by real estateand other debt obligations are valued using discounted
cash flows, and equity securities are valued using market
comparables and discounted cash flows.

Goldman Sachs June 2021 Form 10-Q

Three Months
Ended June

Six Months
Ended June

2021

2021

2020

$19,408 $16,423
40
245
(135)
1,894
344
971
(110)
(778)
(192) (1,734)
428
1,522
(1,867) (2,211)$17,916 $16,332$15,282
121(1,395)811(1,186)(504)
5,937(1,150)$17,916

Beginning balance$17,049
Net realized gains/(losses)
85
Net unrealized gains/(losses) 1,106
Purchases
558
Sales
(422)
Settlements(1,174)
Transfers into level 3
873
Transfers out of level 3(1,743)Ending balance$16,332

2020

In the table above:‰ Changes in fair value are presented for all investmentsthat are classified in level 3 as of the end of the period.
‰ Net unrealized gains/(losses) relates to investments thatwere still held at period-end.
‰ Transfers between levels of the fair value hierarchy arereported at the beginning of the reporting period in which
they occur. If an investment was transferred to level 3
during a reporting period, its entire gain or loss for theperiod is classified in level 3.
‰ For level 3 investments, increases are shown as positive
amounts, while decreases are shown as negative amounts.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
The table below presents information, by product type, forinvestments included in the summary table above.

$ in millions

Three Months
Ended June

Six Months
Ended June

2021

2021

2020

2020

Corporate debt securities
Beginning balance$ 5,314 $ 7,149 $ 5,286 $ 3,465
Net realized gains/(losses)
25
27
127
78
Net unrealized gains/(losses)
179
35
295
(406)
Purchases
27
181
215
244
Sales
(155)
(33)
(281)
(209)
Settlements
(437)
(72)
(678)
(226)
Transfers into level 3
506
87
844
3,800
Transfers out of level 3
(501)
(802)
(850)
(174)
Ending balance$ 4,958 $ 6,572 $ 4,958 $ 6,572
Securities backed by real estate
Beginning balance$ 1,039 $Net realized gains/(losses)
13
Net unrealized gains/(losses)
36
Purchases
168
Settlements(111)
Transfers into level 3–
Transfers out of level 3(28)
Ending balance$ 1,117 $775 $ 998 $
7
27
(28)
36
7
208
(26)
(211)
159
87
(14)
(28)
880 $ 1,117 $

595
17
(104)
94
(43)
321
–
880

Other debt obligations
Beginning balance$
Net realized gains/(losses)
Net unrealized gains/(losses)
Purchases
Sales
Settlements
Transfers into level 3
Ending balance
$

428 $
4
1
14
(15)
(3)
–
429 $

319
7
17
4
–
(9)
91
429

523 $
4
3
11
(11)
(28)
–
502 $

497 $
8
2
39
(12)
(32)
–
502 $

Equity securities
Beginning balance$10,173 $11,056 $ 9,642 $10,903
Net realized gains/(losses)
43
2
83
19
Net unrealized gains/(losses)
888(143) 1,561(902)
Purchases
352
142
509
469
Sales
(256)
(62)
(485)
(977)
Settlements
(598)
(91)
(813)
(226)
Transfers into level 3
367
182
591
1,725
Transfers out of level 3(1,214)(1,051) (1,333)(976)
Ending balance$ 9,755 $10,035 $ 9,755 $10,035

Level 3 Rollforward Commentary
Three Months Ended June 2021. The net realized andunrealized gains on level 3 investments of $1.19 billion(reflecting $85 million of net realized gains and$1.11 billion of net unrealized gains) for the three months
ended June 2021 included gains of $1.12 billion reported inother principal transactions and $66 million reported ininterest income.
The net unrealized gains on level 3 investments for the threemonths ended June 2021 primarily reflected gains oncertain private equity securities and corporate debt
securities (in each case, principally driven by corporate
performance and company-specific events).

Transfers into level 3 investments during the three months
ended June 2021 primarily reflected transfers of certain
corporate debt securities and private equity securities fromlevel 2 (in each case, principally due to reduced pricetransparency as a result of a lack of market evidence,
including fewer market transactions in these instruments).
Transfers out of level 3 investments during the threemonths ended June 2021 primarily reflected transfers ofcertain private equity securities to level 2 (principally due toincreased price transparency as a result of market evidence,
including market transactions in these instruments) andtransfers of certain corporate debt securities to level 2(principally due to certain unobservable yield and duration
inputs no longer being significant to the valuation of these
instruments and increased price transparency as a result ofmarket evidence, including market transactions in these
instruments).
Six Months Ended June 2021. The net realized andunrealized gains on level 3 investments of $2.14 billion(reflecting $245 million of net realized gains and$1.89 billion of net unrealized gains) for the six months
ended June 2021 included gains of $2.02 billion reported inother principal transactions and $116 million reported ininterest income.
The net unrealized gains on level 3 investments for the six
months ended June 2021 primarily reflected gains oncertain private equity securities and corporate debt
securities (in each case, principally driven by corporate
performance and company-specific events).
Transfers into level 3 investments during the six months
ended June 2021 primarily reflected transfers of certain
corporate debt securities and private equity securities fromlevel 2 (in each case, principally due to reduced pricetransparency as a result of a lack of market evidence,
including fewer market transactions in these instruments).
Transfers out of level 3 investments during the six months
ended June 2021 primarily reflected transfers of certain
private equity securities to level 2 (principally due toincreased price transparency as a result of market evidence,
including market transactions in these instruments) andtransfers of certain corporate debt securities to level 2(principally due to certain unobservable yield and duration
inputs no longer being significant to the valuation of these
instruments and increased price transparency as a result ofmarket evidence, including market transactions in these
instruments).

Goldman Sachs June 2021 Form 10-Q

34

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)Three Months Ended June 2020. The net realized andunrealized losses on level 3 investments of $95 million(reflecting $40 million of net realized gains and$135 million of net unrealized losses) for the three months
ended June 2020 included gains/(losses) of $(170) million
reported in other principal transactions and $75 million
reported in interest income.
The net unrealized losses on level 3 investments for thethree months ended June 2020 primarily reflected losses oncertain private equity securities (principally driven bycorporate performance).
Transfers into level 3 investments during the three months
ended June 2020 primarily reflected transfers of certain
private equity securities and securities backed by real estatefrom level 2 (in each case, principally due to reduced pricetransparency as a result of lack of market evidence,
including fewer transactions in these instruments).
Transfers out of level 3 investments during the threemonths ended June 2020 primarily reflected transfers ofcertain private equity securities and corporate debt
securities to level 2 (in each case, principally due toincreased price transparency as a result of market evidence,
including market transactions in these instruments).
Six Months Ended June 2020. The net realized andunrealized losses on level 3 investments of $1.27 billion(reflecting $121 million of net realized gains and$1.40 billion of net unrealized losses) for the six months
ended June 2020 included gains/(losses) of $(1.41) billion
reported in other principal transactions and $132 million
reported in interest income.
The net unrealized losses on level 3 investments for the six
months ended June 2020 primarily reflected losses oncertain private equity securities (principally driven bycorporate performance), and corporate debt securities(principally driven by the impact of wider credit spreads
and corporate performance).
Transfers into level 3 investments during the six months
ended June 2020 primarily reflected transfers of certain
corporate debt securities from level 2 (principally due tocertain unobservable yield and duration inputs becoming
significant to the valuation of these instruments), andprivate equity securities from level 2 (principally due toreduced price transparency as a result of a lack of market
evidence, including fewer transactions in these
instruments).
Transfers out of level 3 investments during the six months
ended June 2020 primarily reflected transfers of certain
private equity securities and corporate debt securities tolevel 2 (in each case, principally due to increased pricetransparency as a result of market evidence, including
market transactions in these instruments).
35

Goldman Sachs June 2021 Form 10-Q

Held-to-Maturity Securities
Held-to-maturity securities are accounted for at amortized
cost.
The
table
below
presents
information
held-to-maturity securities by type and tenor.

about

Amortized
Cost

Fair
Value

Weighted
Average
Yield

As of June 2021
Less than 1 year
1 year to 5 years
Total U.S. government obligations

$ 501
4,057
4,558

$ 506
4,283
4,789

2.53%
2.30%
2.33%

5 years to 10 years
Greater than 10 years
Total securities backed by real estate
Total held-to-maturity securities

3
699
702
$5,2603724
727$5,516

2.65%
1.11%
1.12%
2.17%

As of December 2020
Less than 1 year
1 year to 5 years
5 years to 10 years
Total U.S. government obligations

$ 501
2,529
1,531
4,561

$ 513
2,695
1,675
4,883

2.53%
2.34%
2.25%
2.33%

5 years to 10 years
Greater than 10 years
Total securities backed by real estate
Total held-to-maturity securities

4
736
740
$5,301

3751
754$5,637

2.56%
1.08%
1.08%
2.15%

$ in millions

In the table above:‰ Substantially all of the securities backed by real estate
consist of securities backed by residential real estate.
‰ As these securities are not accounted for at fair value, they
are not included in the firm’s fair value hierarchy inNotes 4 through 10. Had these securities been included in
the firm’s fair value hierarchy, U.S. government
obligations would have been classified in level 1 andsecurities backed by real estate would have been primarily
classified in level 2 of the fair value hierarchy as of bothJune 2021 and December 2020.
‰ The gross unrealized gains were $257 million as ofJune 2021 and $340 million as of December 2020. The
gross unrealized losses were not material as of bothJune 2021 and December 2020.
‰ Held-to-maturity securities are reviewed to determine if
an allowance for credit losses should be recorded in the
consolidated statements of earnings. The firm considers
various factors in such determination, including market
conditions, changes in issuer credit ratings, historicalcredit losses and sovereign guarantees. Provision for
credit losses on such securities was not material during
either the three or six months ended June 2021 orJune 2020.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
Note 9.

Loans
Loans include (i) loans held for investment that are
accounted for at amortized cost net of allowance for loan
losses or at fair value under the fair value option and(ii) loans held for sale that are accounted for at the lower ofcost or fair value. Interest on loans is recognized over thelife of the loan and is recorded on an accrual basis.
The table below presents information about loans.

$ in millions

Amortized
Cost

Fair
Value

As of June 2021
Loan Type
Corporate$ 44,153 $ 2,786
Wealth management
32,833
7,122
Commercial real estate
17,321
1,677
Residential real estate
11,696
417
Consumer:
Installment
3,257–
Credit cards
5,210
–
Other
4,841
514
Total loans, gross
119,311
12,516
Allowance for loan losses(3,271)–
Total loans$116,040 $12,516
As of December 2020
Loan Type
Corporate$ 44,778 $ 2,751
Wealth management
25,151
7,872
Commercial real estate
17,096
1,961
Residential real estate
5,236
494
Consumer:
Installment
3,823–
Credit cards
4,270
–
Other
3,211
547
Total loans, gross
103,565
13,625
Allowance for loan losses(3,874)–
Total loans$ 99,691 $13,625

Held For
Sale

Total

$ 875
–
470
105

$ 47,814
39,955
19,468
12,218

–
–
531
1,981
–
$1,981

3,257
5,210
5,886
133,808(3,271)$130,537$1,130–1,233
20$ 48,659
33,023
20,290
5,750

–
–
416
2,799
–
$2,799

3,823
4,270
4,174
119,989(3,874)$116,115

The following is a description of the loan types in the table
above:‰ Corporate. Corporate loans includes term loans,revolving lines of credit, letter of credit facilities andbridge loans, and are principally used for operating andgeneral corporate purposes, or in connection withacquisitions. Corporate loans may be secured or
unsecured, depending on the loan purpose, the risk profileof the borrower and other factors.

‰ Commercial Real Estate. Commercial real estate loans
include originated loans (other than those extended to
private bank clients) that are directly or indirectly securedby hotels, retail stores, multifamily housing complexes
and commercial and industrial properties. Commercial
real estate loans also includes loans extended to clients
who warehouse assets that are directly or indirectly
backed by commercial real estate. In addition,commercial real estate includes loans purchased by thefirm.
‰ Residential Real Estate. Residential real estate loans
primarily includes loans extended by the firm to clients(other than those extended to private bank clients) who
warehouse assets that are directly or indirectly secured byresidential real estate and loans purchased by the firm.
‰ Installment. Installment loans are unsecured and are
originated by the firm.
‰ Credit Cards. Credit card loans are loans made pursuant
to revolving lines of credit issued to consumers by thefirm.
‰ Other. Other loans primarily includes loans extended toclients who warehouse assets that are directly or
indirectly secured by consumer loans, including autoloans and private student loans, and other assets. Otherloans also includes unsecured consumer and credit cardloans purchased by the firm.
Credit Quality
Risk Assessment. The firm’s risk assessment processincludes evaluating the credit quality of its loans. For
corporate loans and a majority of wealth management, realestate and other loans, the firm performs credit reviews
which include initial and ongoing analyses of its borrowers,
resulting in an internal credit rating. A credit review is anindependent analysis of the capacity and willingness of aborrower to meet its financial obligations and is performedon an annual basis or more frequently if circumstanceschange that indicate that a review may be necessary. The
determination of internal credit ratings also incorporates
assumptions with respect to the nature of and outlook forthe borrower’s industry and the economic environment.

‰ Wealth Management. Wealth management loans
includes loans extended to private bank clients, including
wealth management and other clients. These loans areused to finance investments in both financial andnonfinancial assets, bridge cash flow timing gaps orprovide liquidity for other needs. Substantially all of suchloans are secured by securities, residential real estate,commercial real estate or other assets.

Goldman Sachs June 2021 Form 10-Q

36

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
The table below presents gross loans by an internallydetermined public rating agency equivalent or other credit
metrics and the concentration of secured and unsecuredloans.

$ in millions

Investment- Non-Investment- Other Metrics/
Grade
Grade
Unrated

Total

As of June 2021
Accounting Method
Amortized cost
Fair value
Held for sale
Total
Loan Type
Corporate
Wealth management
Real estate:
Commercial
Residential
Consumer:
Installment
Credit cards
Other
Total
SecuredUnsecured
Total$41,3872,323
110$43,820$64,523
5,306
1,263$71,092$13,401 $119,311
4,887
12,516608
1,981$18,896 $133,808$11,370
28,195$35,980
5,477

$

1,668
687

16,970
10,234––
1,900$43,820––
2,431$71,092

86%
14%
100%

93%
7%
100%

$33,5322,084
224$35,840$58,250
5,925
2,152$66,327$11,783 $103,565
5,616
13,625423
2,799$17,822 $119,989$ 9,478
22,098$38,704
5,331

$

1,792
636

17,480
3,852

–
–
1,836
$35,840––960$66,327

83%
17%
100%

90%
10%
100%

464 $ 47,814
6,283
39,955830
1,297

19,468
12,218

3,257
3,257
5,210
5,210
1,555
5,886
$18,896 $133,808
47%
53%
100%

84%
16%
100%

As of December 2020
Accounting Method
Amortized cost
Fair value
Held for sale
Total
Loan Type
Corporate
Wealth management
Real estate:
Commercial
Residential
Consumer:
Installment
Credit cards
Other
Total
SecuredUnsecured
Total

37

Goldman Sachs June 2021 Form 10-Q

477 $ 48,659
5,594
33,023
1,018
1,262

20,290
5,750

3,823
3,823
4,270
4,270
1,378
4,174
$17,822 $119,989
46%
54%
100%

82%
18%
100%

In the table above:‰ Wealth management loans included in the other metrics/
unrated category primarily consists of loans backed byresidential real estate and securities, and real estate loans
included in the other metrics/unrated category primarily
consists of purchased loans. The firm’s risk assessment
process for these loans includes reviewing certain key
metrics, such as loan-to-value ratio, delinquency status,
collateral values, expected cash flows, the Fair Isaac
Corporation (FICO) credit score (which measures aborrower’s creditworthiness by considering factors suchas payment and credit history) and other risk factors.
‰ For installment and credit card loans included in the othermetrics/unrated category, the evaluation of credit quality
incorporates the borrower’s FICO credit score. FICO
credit scores are periodically refreshed by the firm toassess the updated creditworthiness of the borrower. See“Vintage” below for information about installment andcredit card loans by FICO credit scores.
The firm also assigns a regulatory risk rating to its loans
based on the definitions provided by the U.S. federal bankregulatory agencies. Total loans included 89% of loans asof June 2021 and 85% of loans as of December 2020 thatwere rated pass/non-criticized.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
Vintage. The tables below present gross loans accounted
for at amortized cost (excluding installment and credit cardloans) by an internally determined public rating agency
equivalent or other credit metrics and origination year forterm loans.
As of June 2021
$ in millions

2021
2020
2019
2018
2017
2016 or earlier
Revolving
Corporate
2021
2020
2019
2018
2017
2016 or earlier
Revolving
Wealth management
2021
2020
2019
2018
2017
2016 or earlier
Revolving
Commercial real estate
2021
2020
2019
2018
2017
2016 or earlier
Revolving
Residential real estate
2021
2020
2019
2018
2017
Revolving
Other
Total
Percentage of total

Investment- Non-Investment- Other Metrics/
Grade
Grade
Unrated$ 2,357
1,466
601
1,864
803
369
3,316
10,776
454
551
725
270
373
585
23,82826,786
191
580
70
134
26
–
404
1,405
413
–
–
–
8
–
175
596
243
–
–
–
–
1,581
1,824
$41,387$ 3,683
5,887
5,022
3,006
2,324
2,646
10,56233,130
326
247
380
130
30
251
2,214
3,578
2,129
2,965
1,818
1,675
1,458
782
4,499
15,326
309
986
34
104
55
1
8,656
10,145
377
64
29
183
6
1,685
2,344
$64,523

37%

58%

Total

$ 126 $ 6,166
–
7,353
–
5,623
–
4,870
–
3,127
45
3,060
76
13,954247 44,153
534
1,314
–
798
–
1,105
–
400
–
403
–
836
1,935 27,977
2,469 32,833
82
2,402
14
3,559
–
1,888
7
1,816
10
1,494
465
1,247
12
4,915
590 17,321
116
838
116
1,102
223
257
190
294
136
199
62
63
112
8,943
955 11,696
101
721
421
485
24
53
32
215
8
14
87
3,353
673
4,841
$4,934 $110,844
5%

As of December 2020
$ in millions

2020
2019
2018
2017
2016
2015 or earlier
Revolving
Corporate
2020
2019
2018
2017
2016
2015 or earlier
Revolving
Wealth management
2020
2019
2018
2017
2016
2015 or earlier
Revolving
Commercial real estate
2020
2019
2018
2017
2016
2015 or earlier
Revolving
Residential real estate
2020
2019
2018
2017
Revolving
Other
Total
Percentage of total

Investment- Non-Investment- Other Metrics/
Grade
Grade
Unrated$ 1,978
889
2,076
851
268
351
2,662
9,075
497
723
298
377
22
531
18,077
20,525
848
76
137
26
–
–
461
1,548
402
–
–
9
–
–
225
636
242
–
–
–
1,506
1,748
$33,532$ 7,545
6,106
3,555
3,083
1,262
2,073
11,89135,515
313
403
87
30
20
264
2,085
3,202
3,071
1,965
2,164
1,734
165
775
5,047
14,921
976
90
123
83
1
–
2,470
3,743
84
67
46
8
664
869
$58,250

35%

61%

Total

$ 140 $ 9,663
–
6,995
–
5,631
–
3,934
–
1,530
–
2,424
48 14,601
188 44,778
–
810
–
1,126
–
385
–
407
–
42
–
795
1,424 21,586
1,424 25,151
55
3,974
–
2,041
25
2,326
12
1,772
9
174
526
1,301
–
5,508
627 17,096
115
1,493
271
361
249
372
152
244
–
1
70
70
–
2,695
857
5,236
466
792
29
96
–
46
–
8
99
2,269
594
3,211
$3,690 $95,472
4%

100%

In the tables above, revolving loans which converted toterm loans were not material as of both June 2021 andDecember 2020.

100%

Goldman Sachs June 2021 Form 10-Q

38

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
The table below presents gross installment loans byrefreshed FICO credit scores and origination year and grosscredit card loans by refreshed FICO credit scores.

$ in millions

Greater than orequal to 660

As of June 2021
2021
2020
2019
2018
2017
2016
Installment
Credit cards
Total

$ 674
988
837
471
69
3
3,042
4,077
$7,119Percentage of total:
Installment
Credit cards
Total

93%
78%
84%

As of December 2020
2020
2019
2018
2017
2016
Installment
Credit cards
Total$1,321
1,225
792
128
6
3,472
3,398
$6,870Percentage of total:
Installment
Credit cards
Total

91%
80%
85%

Less than 660

Total

$

5
38
84
74
13
1
215
1,133
$1,348

$ 679
1,026
921
545
82
4
3,257
5,210
$8,467

7%
22%
16%

100%
100%
100%

38
132
150
30
1
351
872
$1,223$1,359
1,357
942
158
7
3,823
4,270
$8,093

9%
20%
15%

100%
100%
100%

$

In the table above, credit card loans consist of revolving
lines of credit.
Credit Concentrations. The table below presents theconcentration of gross loans by region.

$ in millions

Carrying
Value

As of June 2021
Corporate$ 47,814
Wealth management
39,955
Commercial real estate
19,468Residential real estate
12,218Consumer:
Installment
3,257
Credit cards
5,210
Other
5,886
Total
$133,808
As of December 2020
Corporate$ 48,659
Wealth management
33,023
Commercial real estate
20,290Residential real estate
5,750
Consumer:
Installment
3,823
Credit cards
4,270
Other
4,174
Total
$119,989

39

Americas

EMEA

Asia

Total

57%
86%
70%
90%

33%
11%
22%
8%

10%
3%
8%
2%

100%
100%
100%
100%

100%
100%
85%
75%

–
–
13%
19%

–
–
2%
6%

100%
100%
100%
100%

60%
88%
71%
88%

31%
10%
19%
9%

9%
2%
10%
3%

100%
100%
100%
100%

100%
100%
81%
75%

–
–
17%
19%

–
–
2%
6%

100%
100%
100%
100%

Goldman Sachs June 2021 Form 10-Q

In the table above:‰ EMEA represents Europe, Middle East and Africa.
‰ The top five industry concentrations for corporate loans
as of June 2021 were 19% for technology, media &telecommunications (17% as of December 2020), 18%
for funds (13% as of December 2020), 16% fordiversified industrials (17% as of December 2020), 10%
for natural resources & utilities (12% as ofDecember 2020), and 7% for healthcare (7% as ofDecember 2020).
Nonaccrual and Past Due Loans. Loans accounted for atamortized cost (other than credit card loans) are placed on
nonaccrual status when it is probable that the firm will notcollect all principal and interest due under the contractual
terms, regardless of the delinquency status or if a loan ispast due for 90 days or more, unless the loan is both wellcollateralized and in the process of collection. At that time,
all accrued but uncollected interest is reversed againstinterest income and interest subsequently collected isrecognized on a cash basis to the extent the loan balance isdeemed collectible. Otherwise, all cash received is used toreduce the outstanding loan balance. A loan is consideredpast due when a principal or interest payment has not been
made according to its contractual terms. Credit card loans
are not placed on nonaccrual status and accrue interest
until the loan is paid in full or is charged-off.
In certain circumstances, the firm may modify the originalterms of a loan agreement by granting a concession to aborrower experiencing financial difficulty, typically in theform of a modification of loan covenants, but may also
include forbearance of interest or principal, payment
extensions or interest rate reductions. These modifications,to the extent significant, are considered troubled debt
restructurings (TDRs). Loan modifications that extend
payment terms for a period of less than 90 days are
generally considered insignificant and therefore notreported as TDRs.
The firm adopted the relief issued under the Coronavirus
Aid, Relief, and Economic Security Act, as amended, andcertain interpretive guidance issued by the U.S. banking
agencies that provides for certain modified loans thatwould otherwise meet the definition of a TDR to not beclassified as such. Loans accounted for at amortized costthat were not classified as TDRs as a result of this relief andinterpretive guidance were $133 million as of June 2021
and were $184 million as of December 2020.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
The table below presents information about past due loans.

$ in millions

As of June 2021
Corporate
Wealth management
Commercial real estate
Residential real estateConsumer:
Installment
Credit cards
Other
Total

90 daysor more

Total

–
–
14
1

$ 80
39
190
17

$ 80
39
204
18

21
49
15
$100

7
36
5
$374

28
85
20
$474

30-89 days$

Total divided by gross loans at amortized cost
As of December 2020
Corporate
Wealth management
Commercial real estate
Residential real estateConsumer:
Installment
Credit cards
Other
Total

$

0.4%

–
58
49
4

$294
34
183
23

$294
92
232
27

42
46
20
$219

16
31
4
$585

58
77
24
$804

Total divided by gross loans at amortized cost

0.8%

The table below presents information about nonaccrualloans.
As of
June
2021

December
2020$2,074
59
689
18
43
–
$2,883$2,651
61
649
25
44
122
$3,552

Total divided by gross loans at amortized cost 2.4%

3.4%

$ in millions

Corporate
Wealth management
Commercial real estate
Residential real estate
Installment
Other
Total

In the table above:‰ Nonaccrual loans included $286 million as of June 2021
and $533 million as of December 2020 of loans that were
30 days or more past due.

Allowance for Credit Losses
The firm’s allowance for credit losses consists of theallowance for losses on loans and lending commitments
accounted for at amortized cost. Loans and lending
commitments accounted for at fair value or accounted forat the lower of cost or fair value are not subject to anallowance for credit losses.
To determine the allowance for credit losses, the firmclassifies its loans and lending commitments accounted forat amortized cost into wholesale and consumer portfolios.
These portfolios represent the level at which the firm hasdeveloped and documented its methodology to determine
the allowance for credit losses. The allowance for credit
losses is measured on a collective basis for loans that exhibit
similar risk characteristics using a modeled approach andasset-specific basis for loans that do not share similar risk
characteristics.
The allowance for credit losses takes into account theweighted average of a range of forecasts of future economic
conditions over the expected life of the loan and lending
commitments. The expected life of each loan or lending
commitment is determined based on the contractual term
adjusted for extension options or demand features. The
forecasts include baseline, favorable and adverse economic
scenarios over a three-year period. For loans with expected
lives beyond three years, the model reverts to historical loss
information based on a non-linear modeled approach. The
forecasted economic scenarios consider a number of risk
factors relevant to the wholesale and consumer portfolios
described below. The firm applies judgment in weighing
individual scenarios each quarter based on a variety offactors, including the firm’s internally derived economic
outlook, market consensus, recent macroeconomic
conditions and industry trends.
The allowance for credit losses also includes qualitative
components which allow management to reflect theuncertain nature of economic forecasting, capture
uncertainty regarding model inputs, and account for model
imprecision and concentration risk.

‰ Loans that were 90 days or more past due and still
accruing were not material as of both June 2021 andDecember 2020.
‰ Nonaccrual loans included $234 million as of June 2021
and $315 million as of December 2020 of corporate andcommercial real estate loans that were modified in atroubled debt restructuring. The firm’s lending
commitments related to these loans were not material asof both June 2021 and December 2020. Installment loansthat were modified in a troubled debt restructuring were
not material as of both June 2021 and December 2020.

Goldman Sachs June 2021 Form 10-Q

40

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)Management’s estimate of credit losses entails judgment
about loan collectability at the reporting dates, and there
are uncertainties inherent in those judgments. The
allowance for credit losses is subject to a governanceprocess that involves review and approval by senior
management within the firm’s independent risk oversightand control functions. Personnel within the firm’s
independent risk oversight and control functions are
responsible for forecasting the economic variables that
underlie the economic scenarios that are used in themodeling of expected credit losses. While management uses
the best information available to determine this estimate,
future adjustments to the allowance may be necessary based
on, among other things, changes in the economic
environment or variances between actual results and theoriginal assumptions used.
The table below presents gross loans and lending
commitments accounted for at amortized cost by portfolio.
As ofJune 2021$ in millions

Lending
Loans Commitments

Wholesale
Corporate$ 44,153
Wealth management
32,833
Commercial real estate 17,321
Residential real estate
11,696
Other
4,841
Consumer
Installment
3,257
Credit cards
5,210
Total
$119,311

December 2020
Lending
Loans Commitments$148,973 $ 44,778
3,382
25,151
4,151
17,096
2,410
5,236
5,461
3,211

$127,756
2,314
4,154
1,804
4,841

8
3,823
28,5294,270$192,914 $103,565

4
21,640$162,513

In the table above:‰ Wholesale loans included $2.84 billion as of June 2021
and $3.51 billion as of December 2020 of nonaccrualloans for which the allowance for credit losses wasmeasured on an asset-specific basis. The allowance for
credit losses on these loans was $557 million as ofJune 2021 and $649 million as of December 2020. Theseloans included $317 million as of June 2021 and$584 million as of December 2020 of loans which did not
require a reserve as the loan was deemed to be
recoverable.
‰ Credit card lending commitments included $26.57 billion
as of June 2021 and $21.64 billion as of December 2020
related to credit card lines issued by the firm toconsumers. These credit card lines are cancellable by thefirm. Credit card lending commitments also included
approximately $2.0 billion as of June 2021 related to acommitment to acquire the General Motors co-brandedcredit card portfolio.
See Note 18 for further information about lending
commitments.
41

Goldman Sachs June 2021 Form 10-Q

The following is a description of the methodology used to
calculate the allowance for credit losses:
Wholesale. The allowance for credit losses for wholesaleloans and lending commitments that exhibit similar risk
characteristics is measured using a modeled approach.
These models determine the probability of default and loss
given default based on various risk factors, includinginternal credit ratings, industry default and loss data,
expected life, macroeconomic indicators, the borrower’s
capacity to meet its financial obligations, the borrower’s
country of risk and industry, loan seniority and collateral
type. For lending commitments, the methodology also
considers probability of drawdowns or funding. In
addition, for loans backed by real estate, risk factors
include the loan-to-value ratio, debt service ratio and homeprice index. The most significant inputs to the forecast
model for wholesale loans and lending commitments
include unemployment rates, GDP, credit spreads,
commercial and industrial delinquency rates, short- andlong-term interest rates, and oil prices.
The allowance for loan losses for wholesale loans that do notshare similar risk characteristics, such as nonaccrual loans orloans in a troubled debt restructuring, is calculated using thepresent value of expected future cash flows discounted at the
loan’s original effective rate, the observable market price ofthe loan or the fair value of the collateral.
Wholesale loans are charged-off against the allowance forloan losses when deemed to be uncollectible.
Consumer. The allowance for credit losses for consumer
loans that exhibit similar risk characteristics is calculatedusing a modeled approach which classifies consumer loans
into pools based on borrower-related and exposure-relatedcharacteristics that differentiate a pool’s risk characteristics
from other pools. The factors considered in determining apool are generally consistent with the risk characteristics
used for internal credit risk measurement and management
and include key metrics, such as FICO credit scores,
delinquency status, loan vintage and macroeconomic
indicators. The most significant inputs to the forecast
model for consumer loans include unemployment rates anddelinquency rates. The expected life of revolving credit cardloans is determined by modeling expected future draws andthe timing and amount of repayments allocated to thefunded balance. The firm also recognizes an allowance for
credit losses on commitments to acquire loans. However,no allowance for credit losses is recognized on credit card
lending commitments as they are cancellable by the firm.
The allowance for credit losses for consumer loans that do
not share similar risk characteristics, such as loans in atroubled debt restructuring, is calculated using the present
value of expected future cash flows discounted at the loan’s
original effective rate.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
Installment loans are charged-off when they are 120 days
past due. Credit card loans are charged-off when they are
180 days past due.
Allowance for Credit Losses Rollforward
The table below presents information about the allowancefor credit losses.
$ in millions

Three Months Ended June 2021
Allowance for loan losses
Beginning balance
Net (charge-offs)/recoveries
Provision
Other
Ending balance

Wholesale$2,4088(240)(3)$2,173

Consumer

Total$1,107 $3,515
(56)
(48)
47
(193)
–
(3)
$1,098 $3,271

Allowance ratio
2.0%
Net charge-off ratio
0.0%
Allowance for losses on lending commitments
Beginning balance$ 541
Provision
95
Ending balance
$ 636

13.0%
2.8%

2.7%
0.2%

$ 180
6
$ 186

$ 721
101
$ 822

Three Months Ended June 2020
Allowance for loan losses
Beginning balance
Net (charge-offs)/recoveries
Provision
Other
Ending balance$ 925 $2,868
(86)
(260)
305
1,434
–
(141)
$1,144 $3,901$1,943
(174)
1,129
(141)
$2,757

Allowance ratio
2.8%
Net charge-off ratio
0.7%
Allowance for losses on lending commitments
Beginning balance$ 335
Provision
155
Ending balance$ 490
Six Months Ended June 2021
Allowance for loan losses
Beginning balance
Net (charge-offs)/recoveries
Provision
Other
Ending balance$2,584
(9)
(370)
(32)
$2,173

Allowance ratio
2.0%
Net charge-off ratio
0.0%
Allowance for losses on lending commitments
Beginning balance$ 557
Provision
97
Other
(18)
Ending balance$ 636
Six Months Ended June 2020
Allowance for loan losses
Beginning balance
Net (charge-offs)/recoveries
Provision
Other
Ending balance$1,331
(224)
1,875
(225)
$2,757

Allowance ratio
2.8%
Net charge-off ratio
0.5%
Allowance for losses on lending commitments
Beginning balance$ 313
Provision
177
Ending balance
$ 490

17.0%
5.1%

3.7%
0.9%

$

$ 335
155
$ 490

$

–
–
–

$1,290 $3,874
(117)
(126)
(75)
(445)
–
(32)
$1,098 $3,271
13.0%
2.9%
$

–
186
–
$ 186

2.7%
0.2%
$ 557
283
(18)
$ 822

$ 837 $2,168
(167)
(391)
474
2,349
–
(225)
$1,144 $3,901
17.0%
5.0%

3.7%
0.8%

$

$ 313
177
$ 490

$

–
–
–

In the table above:‰ Other represents the reduction to the allowance related toloans and lending commitments transferred to held forsale.
‰ The allowance ratio is calculated by dividing theallowance for loan losses by gross loans accounted for atamortized cost.
‰ The net charge-off ratio is calculated by dividing
annualized net (charge-offs)/recoveries by average grossloans accounted for at amortized cost.
‰ The beginning balance for the allowance for loan losses
and allowance for losses on lending commitments for thesix months ended June 2020 reflects the cumulative effectof measuring the allowance under the CECL standard asof January 1, 2020. The cumulative effect was an increasein the allowance for credit losses of $679 million, which
consisted of (i) an increase in the allowance for loan losses
of $727 million (an increase in the allowance forwholesale loans of $452 million, an increase in theallowance for consumer loans of $444 million and adecrease in the allowance for PCI loans of $169 million)and (ii) a decrease in the allowance for lending
commitments of $48 million.
As of December 2020, the allowance ratio was 2.7% forwholesale, 15.9% for consumer and 3.7% for total loans.
The net charge-off ratio for the year ended December 2020
was 0.6% for wholesale, 4.2% for consumer and 0.9% fortotal loans.
Allowancefor
CreditLossesRollforward
Commentary
Three Months Ended June 2021. The allowance for
credit losses decreased by $143 million during the threemonths ended June 2021.
The provision for credit losses for wholesale and consumer
loans and lending commitments reflected a net reserve
reduction driven by improved broader economic
conditions, partially offset by growth in the firm’s
wholesale and consumer lending portfolios.
Net (charge-offs)/recoveries for the three months ended
June 2021 for wholesale loans were not material and net(charge-offs)/recoveries for consumer loans were primarily
related to credit cards.

Goldman Sachs June 2021 Form 10-Q

42

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
Six Months Ended June 2021. The allowance for credit
losses decreased by $338 million during the six months
ended June 2021.

Three Months Ended June 2020. The allowance for
credit losses increased by $1.19 billion during the threemonths ended June 2020.

The provision for credit losses for wholesale and consumer
loans and lending commitments reflected a reserve
reduction driven by improved broader economic conditions
and lower credit loss expectations, partially offset by
growth in the firm’s wholesale and consumer lending
portfolios, including a provision for credit losses of$185 million relating to the pending acquisition of theGeneral Motors co-branded credit card portfolio.

The provision for credit losses for wholesale and consumer
loans reflected the continued impact of the COVID-19
pandemic on macroeconomic indicators such as
unemployment and GDP, which deteriorated in the second
quarter and resulted in higher modeled expected losses andlower recoveries. In addition, the provision for credit losses
for wholesale loans was impacted by ratings downgrades
and asset-specific provisions primarily related to borrowers
in the diversified industrials, technology, media &telecommunications, and natural resource industries.

Net (charge-offs)/recoveries for the six months ended
June 2021 for wholesale loans were not material and net(charge-offs)/recoveries for consumer loans were primarily
related to credit cards.
Forecast model inputs as of June 2021. When modelingexpected credit losses, the firm employs a weighted,
multivariate forecast, which includes baseline, adverse andfavorable economic scenarios. As of June 2021, theforecasted economic scenarios were most heavily weighted
towards the baseline and adverse scenarios. The forecast
model incorporated adjustments to reflect the impact of thecoronavirus (COVID-19) pandemic-related economic
support programs provided by national governments.
The table below presents the forecasted range (across thebaseline, adverse and favorable scenarios) of the U.S.
unemployment and U.S. GDP growth rates used in theforecast model as of June 2021.
U.S. Unemployment Growth/(Decline)
Rate
in U.S. GDP

Forecast for the quarter ended:
December 2021
June 2022
December 2022

4.6% to 9.5%
4.2% to 9.7%
3.9% to 8.0%

5.3% to (2.4)%
7.2% to (2.4)%
8.8% to (0.5)%

In the table above:‰ U.S. unemployment rate represents the rate forecasted asof the respective quarter-end.
‰ Growth/(decline) in U.S. GDP represents the change inquarterly U.S. GDP relative to the U.S. GDP for the
fourth quarter of 2019 (pre-pandemic levels).
‰ While the U.S. unemployment and U.S. GDP growth rates
are significant inputs to the forecast model, the model
contemplates a variety of other inputs across a range of
scenarios to provide a forecast of future economic
conditions. Given the complex nature of the forecastingprocess, no single economic variable can be viewed inisolation and independently of other inputs.

43

Goldman Sachs June 2021 Form 10-Q

Net (charge-offs)/recoveries for the three months ended
June 2020 for wholesale loans were substantially all related
to corporate loans and net (charge-offs)/recoveries for
consumer loans were primarily related to installment loans.
Six Months Ended June 2020. The allowance for credit
losses increased by $2.59 billion during the six months
ended June 2020 reflecting $679 million relating to theimpact of CECL adoption and $1.91 billion from activity
during the period.
The provision for credit losses for wholesale and consumer
loans reflected the impact of the COVID-19 pandemic on
economic conditions, which resulted in higher modeled
expected losses and lower recoveries. In addition, theprovision for credit losses for wholesale loans was impacted
by ratings downgrades and asset-specific provisions
primarily related to borrowers in the technology, media &telecommunications, diversified industrials, and oil and gas
industries. Besides the weaker economic outlook related to
the COVID-19 pandemic, the provision for credit losses for
consumer loans for the six months ended June 2020 was
also impacted by the continued seasoning of the credit card
portfolio.
Net (charge-offs)/recoveries for the six months ended
June 2020 for wholesale loans were substantially all related
to corporate loans and net (charge-offs)/recoveries for
consumer loans were primarily related to installment loans.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
Fair Value of Loans by Level
The table below presents loans held for investment
accounted for at fair value under the fair value option bylevel within the fair value hierarchy.
$ in millions

Level 1

Level 2

Level 3Total

As of June 2021
Loan Type
Corporate
Wealth management
Commercial real estate
Residential real estate
Other
Total

$ –
–
–
–
–
$ –

$ 1,934
7,059
757
299
238
$10,287

$ 852
63
920
118
276
$2,229$ 2,786
7,122
1,677
417
514
$12,516

As of December 2020
Loan Type
Corporate
Wealth management
Commercial real estate
Residential real estate
Other
Total

$ –
–
–
–
–
$ –

$ 1,822
7,809
857
234
225
$10,947

$ 929
63
1,104
260
322
$2,678$ 2,751
7,872
1,961
494
547
$13,625

The gains/(losses) as a result of changes in the fair value ofloans held for investment for which the fair value option
was elected were $101 million for the three months ended
June 2021, $12 million for the three months ended
June 2020, $193 million for the six months ended
June 2021 and $(15) million for the six months ended
June 2020. These gains/(losses) were included in otherprincipal transactions.
See Note 4 for an overview of the firm’s fair value
measurement policies and the valuation techniques andsignificant inputs used to determine the fair value of loans.
Significant Unobservable Inputs
The table below presents the amount of level 3 loans, andranges and weighted averages of significant unobservable
inputs used to value such loans.
As of June 2021
$ in millions

As of December 2020

Amount or Weighted
Range Average

Corporate
Level 3 assets
$852
Yield
2.0% to 37.2%
Recovery rate
15.0% to 98.6%
Duration (years)
2.0 to 5.0
Commercial real estate
Level 3 assets
$920
Yield
1.0% to 19.7%
Recovery rate
9.1% to 99.5%
Duration (years)
0.3 to 4.3
Residential real estate
Level 3 assets
$118
Yield
1.5% to 13.5%
Duration (years)
0.4 to 2.4
Wealth management and other
Level 3 assets
$339
Yield
3.5% to 18.7%
Duration (years)
3.7 to 5.0

Amount or Weighted
Range Average

In the table above:‰ Ranges represent the significant unobservable inputs thatwere used in the valuation of each type of loan.
‰ Weighted averages are calculated by weighting each input
by the relative fair value of the loan.
‰ The ranges and weighted averages of these inputs are notrepresentative of the appropriate inputs to use whencalculating the fair value of any one loan. For example,
the highest yield for residential real estate loans isappropriate for valuing a specific residential real estateloan but may not be appropriate for valuing any otherresidential real estate loan. Accordingly, the ranges of
inputs do not represent uncertainty in, or possible rangesof, fair value measurements of level 3 loans.
‰ Increases in yield or duration used in the valuation oflevel 3 loans would have resulted in a lower fair value
measurement, while increases in recovery rate would haveresulted in a higher fair value measurement as of bothJune 2021 and December 2020. Due to the distinctive
nature of each level 3 loan, the interrelationship of inputs
is not necessarily uniform within each product type.
‰ Loans are valued using discounted cash flows.
Level 3 Rollforward
The table below presents a summary of the changes in fairvalue for level 3 loans.
Three Months
Ended June
$ in millions

Six Months
Ended June

2021

2020

2021

2020

Beginning balance$2,531
Net realized gains/(losses)
21
Net unrealized gains/(losses)
22
Purchases
35
Sales
–
Settlements(249)
Transfers into level 3
51
Transfers out of level 3(182)
Ending balance$2,229$2,753
16
10
58
–
(173)
163
(168)
$2,659$2,678
47
(11)
68
–
(377)
94
(270)
$2,229$1,890
37
(53)
397
(7)
(379)
787
(13)
$2,659In the table above:‰ Changes in fair value are presented for loans that areclassified in level 3 as of the end of the period.

$929
11.5% 1.1% to 45.2%
51.1% 15.0% to 58.0%
3.4
1.5 to 5.3

12.4%
31.0%
3.4

13.4%
54.3%
1.6

$1,104
4.5% to 19.3%
3.0% to 99.8%
0.3 to 4.8

11.0%
66.5%
2.6

‰ Purchases includes originations and secondary purchases.

10.7%
0.9

$260
2.0% to 14.0%
0.6 to 2.6

12.1%
1.7

9.7%
4.0

$385
2.8% to 18.7%
0.9 to 5.5

8.0%
4.1

‰ Transfers between levels of the fair value hierarchy arereported at the beginning of the reporting period in which
they occur. If a loan was transferred to level 3 during areporting period, its entire gain or loss for the period isclassified in level 3.

‰ Net unrealized gains/(losses) relates to loans that werestill held at period-end.

Goldman Sachs June 2021 Form 10-Q

44

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
The table below presents information, by loan type, forloans included in the summary table above.

$ in millions

Three Months
Ended June

Six Months
Ended June

2021

2021

2020

2020

Six Months Ended June 2021. The net realized andunrealized gains on level 3 loans of $36 million (reflecting$47 million of net realized gains and $11 million of net
unrealized losses) for the six months ended June 2021
included gains of $19 million reported in other principaltransactions and $17 million reported in interest income.

Corporate
Beginning balance
Net realized gains/(losses)
Net unrealized gains/(losses)
Purchases
Sales
Settlements
Transfers into level 3
Transfers out of level 3
Ending balance$ 976 $1,044 $ 929 $ 752
8
4
16
10
3
(1)
(8)
(17)
32
37
51
64
–
–
–
(7)
(136)
(60)
(133)
(79)
50
83
94
229
(81)
(168)
(97)
(13)
$ 852 $ 939 $ 852 $ 939

The drivers of the net unrealized losses on level 3 loans forthe six months ended June 2021 were not material.

Commercial real estate
Beginning balance
Net realized gains/(losses)
Net unrealized gains/(losses)
Purchases
Settlements
Transfers into level 3
Transfers out of level 3
Ending balance$1,028 $1,063 $1,104 $ 591
7
7
13
16
–
(13)
(18)
(37)
3
16
17
285
(68)
(47)
(148)
(171)
1
58
–
400
(51)
–
(48)
–
$ 920 $1,084 $ 920 $1,084

Transfers out of level 3 loans during the six months ended
June 2021 primarily reflected transfers of certain corporateloans and residential real estate to level 2 (in each case,principally due to increased price transparency as a result ofmarket evidence, including market transactions in these
instruments).

Residential real estate
Beginning balance
Net realized gains/(losses)
Net unrealized gains/(losses)
Purchases
Settlements
Transfers into level 3
Transfers out of level 3
Ending balance$ 176 $ 260 $ 260 $ 221
3
2
6
1
(19)
15
(24)
1
–
5
–
42
(17)
(15)
(28)
(39)
–
1
–
42
(25)
–
(96)
–
$ 118 $ 268 $ 118 $ 268

Wealth management and other
Beginning balance$ 351 $ 386 $ 385 $ 326
Net realized gains/(losses)
3
3
12
10
Net unrealized gains/(losses)
38
9
39
–
Purchases–––
6
Settlements
(28)
(51)
(68)
(90)
Transfers into level 3
–
21
–
116
Transfers out of level 3
(25)
–
(29)
–
Ending balance$ 339 $ 368 $ 339 $ 368

Level 3 Rollforward Commentary
Three Months Ended June 2021. The net realized andunrealized gains on level 3 loans of $43 million (reflecting$21 million of net realized gains and $22 million of net
unrealized gains) for the three months ended June 2021
included gains of $32 million reported in other principaltransactions and $11 million reported in interest income.
The drivers of the net unrealized gains on level 3 loans forthe three months ended June 2021 were not material.
The drivers of transfers into level 3 loans during the threemonths ended June 2021 were not material.
Transfers out of level 3 loans during the three months
ended June 2021 primarily reflected transfers of certain
corporate loans and commercial real estate to level 2 (ineach case, principally due to increased price transparency asa result of market evidence, including market transactionsin these instruments).
45

Goldman Sachs June 2021 Form 10-Q

The drivers of transfers into level 3 loans during the six
months ended June 2021 reflected transfers of certain
corporate loans from level 2 (principally due to reduced
price transparency as a result of a lack of market evidence
including fewer market transactions in these instruments).

Three Months Ended June 2020. The net realized andunrealized gains on level 3 loans of $26 million (reflecting$16 million of net realized gains and $10 million of net
unrealized gains) for the three months ended June 2020
included gains of $15 million reported in other principaltransactions and $11 million reported in interest income.
The drivers of the net unrealized gains on level 3 loans forthe three months ended June 2020 were not material.
Transfers into level 3 loans during the three months ended
June 2020 primarily reflected transfers of certain corporateloans from level 2 (principally due to reduced pricetransparency as a result of a lack of market evidence,
including fewer market transactions in these instruments).
Transfers out of level 3 loans during the three months
ended June 2020 reflected transfers of certain corporateloans to level 2 (principally due to certain unobservable
yield and duration inputs no longer being significant to thevaluation of these instruments).

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
Six Months Ended June 2020. The net realized andunrealized losses on level 3 loans of $16 million (reflecting$37 million of net realized gains and $53 million of net
unrealized losses) for the six months ended June 2020
included gains/(losses) of $(35) million reported in otherprincipal transactions and $19 million reported in interest
income.
The drivers of the net unrealized losses on level 3 loans forthe six months ended June 2020 were not material.
Transfers into level 3 loans during the six months ended
June 2020 primarily reflected transfers of certain loans
backed by commercial real estate and corporate loans fromlevel 2 (in each case, principally due to reduced pricetransparency as a result of a lack of market evidence,
including fewer market transactions in these instruments).
The drivers of transfers out of level 3 loans during the six
months ended June 2020 were not material.
Estimated Fair Value
The table below presents the estimated fair value of loansthat are not accounted for at fair value and in what level ofthe fair value hierarchy they would have been classified ifthey had been included in the firm’s fair value hierarchy.
Estimated Fair Value

Carrying
Value

Level 2

Level 3Total

As of June 2021
Amortized cost
Held for sale$116,040$ 1,981$70,217$ 1,475$46,798$ 515$117,015$ 1,990

As of December 2020
Amortized cost
Held for sale

$ 99,691$ 2,799$52,793$ 1,541$48,512$ 1,271$101,305$ 2,812$ in millions

Note 10.

Fair Value Option
Other Financial Assets and Liabilities at Fair Value
In addition to trading assets and liabilities, and certain
investments and loans, the firm accounts for certain of its
other financial assets and liabilities at fair value,
substantially all under the fair value option. The primaryreasons for electing the fair value option are to:‰ Reflect economic events in earnings on a timely basis;‰ Mitigate volatility in earnings from using different
measurement attributes (e.g., transfers of financial assets
accounted for as financings are recorded at fair value,
whereas the related secured financing would be recordedon an accrual basis absent electing the fair value option);and‰ Address simplification and cost-benefit considerations(e.g., accounting for hybrid financial instruments at fairvalue in their entirety versus bifurcation of embedded
derivatives and hedge accounting for debt hosts).
Hybrid financial instruments are instruments that containbifurcatable embedded derivatives and do not require
settlement by physical delivery of nonfinancial assets (e.g.,physical commodities). If the firm elects to bifurcate theembedded derivative from the associated debt, thederivative is accounted for at fair value and the hostcontract is accounted for at amortized cost, adjusted for theeffective portion of any fair value hedges. If the firm does
not elect to bifurcate, the entire hybrid financial instrument
is accounted for at fair value under the fair value option.
Other financial assets and liabilities accounted for at fairvalue under the fair value option include:‰ Resale and repurchase agreements;‰ Certain securities borrowed and loaned transactions;‰ Certain customer and other receivables and certain otherliabilities;‰ Certain time deposits (deposits with no stated maturity
are not eligible for a fair value option election), including
structured certificates of deposit, which are hybrid
financial instruments;‰ Substantially all other secured financings, includingtransfers of assets accounted for as financings; and‰ Certain unsecured short- and long-term borrowings,
substantially all of which are hybrid financial
instruments.

Goldman Sachs June 2021 Form 10-Q

46

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
Fair Value of Other Financial Assets and Liabilities by
Level
The table below presents, by level within the fair value
hierarchy, other financial assets and liabilities at fair value,
substantially all of which are accounted for at fair value
under the fair value option.
$ in millions

Level 1

Level 2

Level 3Total

As of June 2021
AssetsResale agreements
Securities borrowed
Customer and other receivables
Total
Liabilities
Deposits
Repurchase agreements
Securities loaned
Other secured financings
Unsecured borrowings:
Short-termLong-term
Other liabilities
Total$ – $ 154,123 $–
41,076–57$ – $ 195,256 $– $ 154,123–
41,076–57– $ 195,256$ – $ (29,650) $ (3,908) $ (33,558)– (151,692)– (151,692)–(6,301)–(6,301)–(23,279)(2,891)(26,170)–(20,410) (11,461)(31,871)–(34,682)(9,714)(44,396)
–
(2)
(162)
(164)
$ – $(266,016) $(28,136) $(294,152)

As of December 2020
AssetsResale agreements
Securities borrowed
Customer and other receivables
Total
Liabilities
Deposits
Repurchase agreements
Securities loaned
Other secured financings
Unsecured borrowings:
Short-termLong-term
Other liabilities
Total$ – $ 108,060 $–
28,898–82$ – $ 137,040 $– $ 108,060–
28,898–82– $ 137,040$ – $ (11,955) $ (4,221) $ (16,176)–(126,569)(2) (126,571)–(1,053)–(1,053)–(20,652)(3,474)(24,126)–(19,227)(7,523)(26,750)–(28,335) (12,576)(40,911)
–
(1)
(262)
(263)
$ – $(207,792) $(28,058) $(235,850)

In the table above, other financial assets are shown as
positive amounts and other financial liabilities are shown as
negative amounts.
See Note 4 for an overview of the firm’s fair value
measurement policies and the valuation techniques andsignificant inputs used to determine the fair value of otherfinancial assets and liabilities.

47

Goldman Sachs June 2021 Form 10-Q

Significant Unobservable Inputs
See below for information about the significant
unobservable inputs used to value level 3 other financial
assets and liabilities at fair value as of both June 2021 andDecember 2020.
Other Secured Financings. The ranges and weighted
averages of significant unobservable inputs used to valuelevel 3 other secured financings are presented below. These
ranges and weighted averages exclude unobservable inputs
that are only relevant to a single instrument, and therefore
are not meaningful.
As of June 2021:‰ Yield: 1.4% to 7.1% (weighted average: 2.4%)‰ Duration: 1.1 to 7.5 years (weighted average: 4.1 years)
As of December 2020:‰ Yield: 1.4% to 7.1% (weighted average: 2.7%)‰ Duration: 1.4 to 8.0 years (weighted average: 4.0 years)
Generally, increases in yield or duration, in isolation, would
have resulted in a lower fair value measurement as ofperiod-end. Due to the distinctive nature of each of level 3other secured financings, the interrelationship of inputs is
not necessarily uniform across such financings. See Note 11
for further information about other secured financings.
Deposits, Unsecured Borrowings and Other
Liabilities. Substantially all of the firm’s deposits,
unsecured short- and long-term borrowings, and otherliabilities that are classified in level 3 are hybrid financial
instruments. As the significant unobservable inputs used tovalue hybrid financial instruments primarily relate to theembedded derivative component of these deposits,
unsecured borrowings and other liabilities, theseunobservable inputs are incorporated in the firm’s
derivative disclosures in Note 7. See Note 13 for further
information about deposits, Note 14 for further
information about unsecured borrowings and Note 15 forfurther information about other liabilities.
Repurchase Agreements. As of June 2021, the firm had
no level 3 repurchase agreements. As of December 2020,
the firm’s level 3 repurchase agreements were not material.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
Level 3 Rollforward
The table below presents a summary of the changes in fairvalue for level 3 other financial liabilities accounted for atfair value.

$ in millions

Three Months
Ended June

Six Months
Ended June

2021

2021

2020

The table below presents information, by the consolidatedbalance sheet line items, for liabilities included in thesummary table above.
Three Months
Ended June

Six Months
Ended June

2021

2021

2020

$ (3,984)
(9)
(110)
(125)
313
(7)
14
$ (3,908)$ (3,996) $ (4,221)
(1)
(16)
(79)
(111)
(3,929)
(215)
3,796
625
(44)
(28)
36
58
$ (4,217) $ (3,908)$ (4,023)
4(75)(4,025)
3,919
(66)
49
$ (4,217)

$

$

(2)
–
2
–

$

$

$ in millions

2020

Beginning balance$(27,791) $(21,650) $(28,058) $(21,036)
Net realized gains/(losses)
(200)
(109)
(294)
(203)
Net unrealized gains/(losses)(612)(1,977)(49)
777
Issuances(7,776)(9,541) (12,334) (15,206)
Settlements
7,258
7,707
10,844
11,132
Transfers into level 3
(903)
(628)
(980)
(1,622)
Transfers out of level 3
1,888
235
2,735
195
Ending balance$(28,136) $(25,963) $(28,136) $(25,963)

In the table above:‰ Changes in fair value are presented for all other financial
liabilities that are classified in level 3 as of the end of theperiod.
‰ Net unrealized gains/(losses) relates to other financial
liabilities that were still held at period-end.
‰ Transfers between levels of the fair value hierarchy arereported at the beginning of the reporting period in which
they occur. If a financial liability was transferred to level 3
during a reporting period, its entire gain or loss for theperiod is classified in level 3.
‰ For level 3 other financial liabilities, increases are shownas negative amounts, while decreases are shown as
positive amounts.
‰ Level 3 other financial liabilities are frequently
economically hedged with trading assets and liabilities.
Accordingly, gains or losses that are classified in level 3
can be partially offset by gains or losses attributable tolevel 1, 2 or 3 trading assets and liabilities. As a result,gains or losses included in the level 3 rollforward below
do not necessarily represent the overall impact on thefirm’s results of operations, liquidity or capital resources.

Deposits
Beginning balance
Net realized gains/(losses)
Net unrealized gains/(losses)
IssuancesSettlements
Transfers into level 3
Transfers out of level 3
Ending balance

2020

Repurchase agreements
Beginning balance
Net unrealized gains/(losses)
Settlements
Ending balance$

Other secured financings
Beginning balance
Net realized gains/(losses)
Net unrealized gains/(losses)
IssuancesSettlements
Transfers into level 3
Transfers out of level 3
Ending balance$ (3,224)
(9)
(1)
(34)
92
(111)
396
$ (2,891)$ (1,230) $ (3,474)
2
(6)
(32)
35
(806)
(62)
293
323
–
(304)
–
597
$ (1,773) $ (2,891)

(386)
5
26
(806)
373
(985)
–
$ (1,773)

Unsecured short-term borrowings
Beginning balance$(10,246)
Net realized gains/(losses)(103)
Net unrealized gains/(losses)(184)
Issuances(6,012)
Settlements
4,510
Transfers into level 3(395)
Transfers out of level 3969
Ending balance$(11,461)$ (5,411) $ (7,523)
(48)
(130)
(735)
(135)
(2,853) (9,480)
2,572
5,303
(445)
(218)
114
722
$ (6,806) $(11,461)$ (5,707)(81)
605(5,339)
4,008
(353)
61
$ (6,806)

Unsecured long-term borrowings
Beginning balance$(10,177)
Net realized gains/(losses)(79)
Net unrealized gains/(losses)(314)
Issuances(1,605)
Settlements
2,342
Transfers into level 3(390)
Transfers out of level 3509
Ending balance$ (9,714)$(10,676) $(12,576)
(70)
(142)
(1,132)62(1,945) (2,577)
1,040
4,591
(139)
(430)
85
1,358
$(12,837) $ (9,714)$(10,741)(146)
393(5,021)
2,811
(218)
85
$(12,837)$$

Other liabilities
Beginning balance
Net realized gains/(losses)
Net unrealized gains/(losses)
IssuancesEnding balance

$

$

(1)
–
1
–

(159)
–
(3)
–
(162)

$

$

(12) $(4)6(10) $(325) $
85(8)(320) $

(262)
–
100
–
(162)

$

$

(30)
(1)
21
(10)

(149)
15
(171)
(15)
(320)

Level 3 Rollforward Commentary
Three Months Ended June 2021. The net realized andunrealized losses on level 3 other financial liabilities of$812 million (reflecting $200 million of net realized losses and$612 million of net unrealized losses) for the three months
ended June 2021 included gains/(losses) of $(862) million
reported in market making, $(10) million reported in otherprincipal transactions and $(4) million reported in interest
expense in the consolidated statements of earnings and$64 million reported in debt valuation adjustment in the
consolidated statements of comprehensive income.
Goldman Sachs June 2021 Form 10-Q

48

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
The net unrealized losses on level 3 other financial liabilities
for the three months ended June 2021 primarily reflected
losses on certain hybrid financial instruments included in
unsecured long- and short-term borrowings and deposits(in each case, principally due to an increase in global equity
prices).
Transfers into level 3 other financial liabilities during thethree months ended June 2021 primarily reflected transfersof certain hybrid financial instruments included in
unsecured short- and long-term borrowings from level 2(principally due to reduced transparency of certain
volatility and correlation inputs used to value these
instruments).
Transfers out of level 3 other financial liabilities during thethree months ended June 2021 primarily reflected transfersof certain hybrid financial instruments included in
unsecured short- and long-term borrowings to level 2(principally due to increased price transparency of certain
volatility and correlation inputs used to value these
instruments) and transfers of certain other secured
financings to level 2 (principally due to increased pricetransparency of certain yield and duration inputs used tovalue these instruments).
Six Months Ended June 2021. The net realized andunrealized losses on level 3 other financial liabilities of$343 million (reflecting $294 million of net realized losses
and $49 million of net unrealized losses) for the six months
ended June 2021 included gains/(losses) of $(428) million
reported in market making, $29 million reported in otherprincipal transactions and $(7) million reported in interest
expense in the consolidated statements of earnings and$63 million reported in debt valuation adjustment in the
consolidated statements of comprehensive income.
The net unrealized losses on level 3 other financial liabilities
for the six months ended June 2021 primarily reflected
losses on certain hybrid financial instruments included in
unsecured short-term borrowings and deposits (in eachcase, principally due to an increase in global equity prices),partially offset by gains on other liabilities (principally due
to an increase in the market value of the underlying assets)
and gains on certain hybrid financial instruments included
in unsecured long-term borrowings (principally due to anincrease in interest rates).
Transfers into level 3 other financial liabilities during thesix months ended June 2021 primarily reflected transfers ofcertain hybrid financial instruments included in unsecured
long- and short-term borrowings from level 2 (principally
due to reduced transparency of certain volatility andcorrelation inputs used to value these instruments) andtransfers of certain other secured financings from level 2(principally due to reduced price transparency of certain
yield and duration inputs used to value these instruments).
49

Goldman Sachs June 2021 Form 10-Q

Transfers out of level 3 other financial liabilities during thesix months ended June 2021 primarily reflected transfers ofcertain hybrid financial instruments included in unsecured
long- and short-term borrowings to level 2 (principally due
to increased price transparency of certain volatility andcorrelation inputs used to value these instruments) andtransfers of certain other secured financings to level 2(principally due to increased price transparency of certain
yield and duration inputs used to value these instruments).
Three Months Ended June 2020. The net realized andunrealized losses on level 3 other financial liabilities of$2.09 billion (reflecting $109 million of net realized losses
and $1.98 billion of net unrealized losses) for the threemonths ended June 2020 included losses of $1.24 billion
reported in market making, $10 million reported in otherprincipal transactions and $2 million reported in interest
expense in the consolidated statements of earnings and$839 million reported in debt valuation adjustment in the
consolidated statements of comprehensive income.
The net unrealized losses on level 3 other financial liabilities
for the three months ended June 2020 primarily reflected
losses on certain hybrid financial instruments included in
unsecured long- and short-term borrowings (principally
due to an increase in global equity prices).
Transfers into level 3 other financial liabilities during thethree months ended June 2020 primarily reflected transfersof certain hybrid financial instruments included in
unsecured short- and long-term borrowings from level 2(principally due to reduced transparency of certain
volatility and correlation inputs used to value these
instruments).
Transfers out of level 3 other financial liabilities during thethree months ended June 2020 primarily reflected transfersof certain hybrid financial instruments included in
unsecured short- and long-term borrowings to level 2(principally due to increased price transparency of certain
volatility and correlation inputs used to value these
instruments).
Six Months Ended June 2020. The net realized andunrealized gains on level 3 other financial liabilities of$574 million (reflecting $203 million of net realized losses
and $777 million of net unrealized gains) for the six months
ended June 2020 included gains/(losses) of $247 million
reported in market making, $55 million reported in otherprincipal transactions and $(5) million reported in interest
expense in the consolidated statements of earnings and$277 million reported in debt valuation adjustment in the
consolidated statements of comprehensive income.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
The net unrealized gains on level 3 other financial liabilities
for the six months ended June 2020 primarily reflected
gains on certain hybrid financial instruments included in
unsecured short- and long-term borrowings (principally
due to a decrease in global equity prices and interest rates),
partially offset by losses on other liabilities and deposits (ineach case, principally due to changes in the market value ofthe underlying assets).

‰ Other financial assets and liabilities at fair value are
frequently economically hedged with trading assets andliabilities. Accordingly, gains or losses on such otherfinancial assets and liabilities can be partially offset bygains or losses on trading assets and liabilities. As a result,gains or losses on other financial assets and liabilities do
not necessarily represent the overall impact on the firm’s
results of operations, liquidity or capital resources.

Transfers into level 3 other financial liabilities during thesix months ended June 2020 primarily reflected transfers ofcertain other secured financings and hybrid financial
instruments included in unsecured short- and long-termborrowings from level 2 (in each case, principally due toreduced transparency of certain volatility and correlation
inputs used to value these instruments).

See Note 8 for information about gains/(losses) on equity
securities and Note 9 for information about gains/(losses)
on loans which are accounted for at fair value under the fairvalue option. Gains/(losses) on trading assets and liabilities
accounted for at fair value under the fair value option are
included in market making. See Note 5 for further
information about gains/(losses) from market making.

Transfers out of level 3 other financial liabilities during thesix months ended June 2020 primarily reflected transfers ofcertain hybrid financial instruments included in unsecured
long- and short-term borrowings to level 2 (principally due
to increased price transparency of certain volatility andcorrelation inputs used to value these instruments).
Gains and Losses on Other Financial Assets andLiabilities Accounted for at Fair Value Under the
Fair Value Option
The table below presents the gains and losses recognized inearnings as a result of the election to apply the fair value
option to certain financial assets and liabilities.
Three Months
Ended June

Six Months
Ended June

2021

2021

Long-Term Debt Instruments
The difference between the aggregate contractual principal
amount and the related fair value of long-term othersecured financings, for which the fair value option waselected, was not material as of both June 2021 andDecember 2020.
The fair value of unsecured long-term borrowings, forwhich the fair value option was elected, exceeded therelated aggregate contractual principal amount by$298 million as of June 2021 and $445 million as ofDecember 2020. The amounts above include bothprincipal-protected and non-principal-protected long-termborrowings.

$ (850) $(2,352) $(1,810) $ 2,129(1,473) (2,015) (1,702) (1,023)
(177)
(492)
(71)
(94)
$(2,500) $(4,859) $(3,583) $ 1,012

Debt Valuation Adjustment
The firm calculates the fair value of financial liabilities forwhich the fair value option is elected by discounting future
cash flows at a rate which incorporates the firm’s credit
spreads.

‰ Gains/(losses) were substantially all included in market
making.

The table below presents information about the net debt
valuation adjustment (DVA) gains/(losses) on financial
liabilities for which the fair value option was elected.

$ in millions

Unsecured short-term borrowings
Unsecured long-term borrowings
Other
Total

2020

2020

In the table above:‰ Gains/(losses) exclude contractual interest, which isincluded in interest income and interest expense, for all
instruments other than hybrid financial instruments. See
Note 23 for further information about interest income
and interest expense.
‰ Gains/(losses) included in unsecured short- and long-termborrowings were substantially all related to the embedded
derivative component of hybrid financial instruments forboth the three and six months ended June 2021 andJune 2020. These gains and losses would have beenrecognized under other U.S. GAAP even if the firm had
not elected to account for the entire hybrid financial
instrument at fair value.
‰ Other primarily consists of gains/(losses) on customer andother receivables, deposits, other secured financings andother liabilities.

Three Months
Ended June

Six Months
Ended June

$ in millions

2021

2020

2021

2020

DVA (pre-tax)
DVA (net of tax)

$159
$117

$(2,938)$(2,218)

$130
$ 98

$933
$696

In the table above:‰ DVA (net of tax) is included in debt valuation adjustmentin the consolidated statements of comprehensive income.
‰ The gains/(losses) reclassified to earnings fromaccumulated other comprehensive income/(loss) upon
extinguishment of such financial liabilities were notmaterial for both the three and six months ended
June 2021 and June 2020.

Goldman Sachs June 2021 Form 10-Q

50

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
Loans and Lending Commitments
The table below presents the difference between theaggregate fair value and the aggregate contractual principal
amount for loans (included in trading assets and loans in
the consolidated balance sheets) for which the fair value
option was elected.
As of$ in millions

June
2021

Performing loans
Aggregate contractual principal in excess of fair value $ 1,398

December
2020

$

958

Loans on nonaccrual status and/or more than 90 days past due
Aggregate contractual principal in excess of fair value $11,120$10,526
Aggregate fair value$ 3,498$ 3,519

In the table above, the aggregate contractual principal
amount of loans on nonaccrual status and/or more than
90 days past due (which excludes loans carried at zero fairvalue and considered uncollectible) exceeds the related fairvalue primarily because the firm regularly purchases loans,such as distressed loans, at values significantly below thecontractual principal amounts.
The fair value of unfunded lending commitments for which
the fair value option was elected was a liability of $7 million
as of June 2021 and $25 million as of December 2020, andthe related total contractual amount of these lending
commitments was $808 million as of June 2021 and$1.64 billion as of December 2020. See Note 18 for further
information about lending commitments.
Impact of Credit Spreads on Loans and Lending
Commitments
The estimated net gain/(loss) attributable to changes in
instrument-specific credit spreads on loans and lending
commitments for which the fair value option was elected
was $71 million for the three months ended June 2021,$(30) million for the three months ended June 2020,$203 million for the six months ended June 2021 and$(224) million for the six months ended June 2020. The
firm generally calculates the fair value of loans and lending
commitments for which the fair value option is elected bydiscounting future cash flows at a rate which incorporates
the instrument-specific credit spreads. For floating-rateloans and lending commitments, substantially all changes infair value are attributable to changes in instrument-specificcredit spreads, whereas for fixed-rate loans and lending
commitments, changes in fair value are also attributable tochanges in interest rates.

51

Goldman Sachs June 2021 Form 10-Q

Note 11.

Collateralized Agreements and Financings
Collateralized agreements are resale agreements andsecurities borrowed. Collateralized financings are
repurchase agreements, securities loaned and other secured
financings. The firm enters into these transactions in order
to, among other things, facilitate client activities, invest
excess cash, acquire securities to cover short positions andfinance certain firm activities.
Collateralized agreements and financings are presented on a
net-by-counterparty basis when a legal right of setoff exists.
Interest on collateralized agreements, which is included ininterest income, and collateralized financings, which isincluded in interest expense, is recognized over the life of
the transaction. See Note 23 for further information about
interest income and interest expense.
Resale and Repurchase Agreements
A resale agreement is a transaction in which the firmpurchases financial instruments from a seller, typically in
exchange for cash, and simultaneously enters into anagreement to resell the same or substantially the samefinancial instruments to the seller at a stated price plus
accrued interest at a future date.
A repurchase agreement is a transaction in which the firm
sells financial instruments to a buyer, typically in exchange
for cash, and simultaneously enters into an agreement torepurchase the same or substantially the same financial
instruments from the buyer at a stated price plus accrued
interest at a future date.
Even though repurchase and resale agreements (including“repos- and reverses-to-maturity”) involve the legaltransfer of ownership of financial instruments, they areaccounted for as financing arrangements because theyrequire the financial instruments to be repurchased or
resold before or at the maturity of the agreement. The
financial instruments purchased or sold in resale andrepurchase agreements typically include U.S. government
and agency, and investment-grade sovereign obligations.
The firm receives financial instruments purchased underresale agreements and makes delivery of financial
instruments sold under repurchase agreements. To mitigate
credit exposure, the firm monitors the market value of thesefinancial instruments on a daily basis, and delivers or
obtains additional collateral due to changes in the market
value of the financial instruments, as appropriate. For
resale agreements, the firm typically requires collateral witha fair value approximately equal to the carrying value of therelevant assets in the consolidated balance sheets.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
Securities Borrowed and Loaned Transactions
In a securities borrowed transaction, the firm borrows
securities from a counterparty in exchange for cash or
securities. When the firm returns the securities, thecounterparty returns the cash or securities. Interest is
generally paid periodically over the life of the transaction.

Offsetting Arrangements
The table below presents resale and repurchase agreements
and securities borrowed and loaned transactions includedin the consolidated balance sheets, as well as the amounts
not offset in the consolidated balance sheets.

In a securities loaned transaction, the firm lends securities
to a counterparty in exchange for cash or securities. Whenthe counterparty returns the securities, the firm returns the
cash or securities posted as collateral. Interest is generally
paid periodically over the life of the transaction.

Assets

The firm receives securities borrowed and makes delivery of
securities loaned. To mitigate credit exposure, the firm
monitors the market value of these securities on a daily
basis, and delivers or obtains additional collateral due tochanges in the market value of the securities, as
appropriate. For securities borrowed transactions, the firm
typically requires collateral with a fair value approximately
equal to the carrying value of the securities borrowed
transaction.
Securities borrowed and loaned within Fixed Income,Currency and Commodities (FICC) financing are recorded
at fair value under the fair value option. See Note 10 for
further information about securities borrowed and loaned
accounted for at fair value.
Substantially all of securities borrowed and loaned within
Equities financing are recorded based on the amount ofcash collateral advanced or received plus accrued interest.
The firm also reviews such securities borrowed todetermine if an allowance for credit losses should berecorded by taking into consideration the fair value ofcollateral received. As these agreements generally can beterminated on demand, they exhibit little, if any, sensitivity
to changes in interest rates. Therefore, the carrying value ofsuch agreements approximates fair value. As these
agreements are not accounted for at fair value, they are notincluded in the firm’s fair value hierarchy in Notes 4
through 10. Had these agreements been included in thefirm’s fair value hierarchy, they would have been classified
in level 2 as of both June 2021 and December 2020.

$ in millions

Resaleagreements

Liabilities
Securities
borrowed

Repurchaseagreements

Securities
loanedAs of June 2021
Included in the consolidated balance sheets
Gross carrying value $ 267,924 $ 200,633 $ 265,493 $ 42,536
Counterparty netting(113,801)(4,379) (113,801)(4,379)
Total
154,123
196,254
151,692
38,157
Amounts not offset
Counterparty netting(28,495)(11,866)(28,495) (11,866)
Collateral(120,865) (176,921) (119,180) (23,138)
Total$ 4,763 $ 7,467 $ 4,017 $ 3,153
As of December 2020
Included in the consolidated balance sheets
Gross carrying value $ 205,817 $ 147,593 $ 224,328 $ 27,054
Counterparty netting(97,757)(5,433)(97,757)(5,433)
Total
108,060
142,160
126,571
21,621
Amounts not offset
Counterparty netting(8,920)(3,525)(8,920)(3,525)Collateral(96,140)(132,893) (116,819)(17,693)
Total$ 3,000 $ 5,742 $
832 $
403

In the table above:‰ Substantially all of the gross carrying values of thesearrangements are subject to enforceable netting
agreements.
‰ Where the firm has received or posted collateral undercredit support agreements, but has not yet determinedsuch agreements are enforceable, the related collateral has
not been netted.
‰ Amounts not offset includes counterparty netting that
does not meet the criteria for netting under U.S. GAAPand the fair value of collateral received or posted subject
to enforceable credit support agreements.
‰ Resale agreements and repurchase agreements are carriedat fair value under the fair value option. See Note 4 forfurther information about the valuation techniques andsignificant inputs used to determine fair value.
‰ Securities borrowed included in the consolidated balance
sheets of $41.08 billion as of June 2021 and$28.90 billion as of December 2020, and securities loanedof $6.30 billion as of June 2021 and $1.05 billion as ofDecember 2020 were at fair value under the fair value
option. See Note 10 for further information about
securities borrowed and securities loaned accounted forat fair value.

Goldman Sachs June 2021 Form 10-Q

52

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
Gross Carrying Value of Repurchase Agreements
and Securities Loaned
The table below presents the gross carrying value of
repurchase agreements and securities loaned by class ofcollateral pledged.

$ in millions

Repurchaseagreements

As of June 2021
Money market instruments$
928
U.S. government and agency obligations
113,578
Non-U.S. government and agency obligations 119,760
Securities backed by commercial real estate
26
Securities backed by residential real estate
218
Corporate debt securities
11,007
State and municipal obligations
92
Other debt obligations
55
Equity securities
19,829Total$265,493
As of December 2020
Money market instruments$
88
U.S. government and agency obligations
121,751
Non-U.S. government and agency obligations
79,159Securities backed by commercial real estate
65
Securities backed by residential real estate
121
Corporate debt securities
6,364State and municipal obligations
92
Other debt obligations
20
Equity securities
16,668
Total$224,328

Securities
loaned‰ Liabilities of consolidated VIEs;$‰ Transfers of assets accounted for as financings rather thansales (e.g., pledged commodities, bank loans andmortgage whole loans); and

9
64
1,572
–
–
297
–
–
40,594$42,536

$

–
–
1,634
–
–
46
–
–
25,374$27,054

The table below presents the gross carrying value of
repurchase agreements and securities loaned by maturity.
As of June 2021
$ in millions

No stated maturity and overnight2 - 30 days
31 - 90 days
91 days - 1 year
Greater than 1 year
Total

Other Secured Financings
In addition to repurchase agreements and securities loaned
transactions, the firm funds certain assets through the use ofother secured financings and pledges financial instruments
and other assets as collateral in these transactions. Theseother secured financings include:

Repurchaseagreements

Securities
loaned$102,727
66,89728,94457,363
9,562$265,493$25,54490
109
15,4901,303$42,536

In the table above:‰ Repurchase agreements and securities loaned that are
repayable prior to maturity at the option of the firm arereflected at their contractual maturity dates.
‰ Repurchase agreements and securities loaned that areredeemable prior to maturity at the option of the holder
are reflected at the earliest dates such options become
exercisable.

‰ Other structured financing arrangements.
Other secured financings included nonrecourse arrangements.
Nonrecourse other secured financings were $10.79 billion asof June 2021 and $12.31 billion as of December 2020.
The firm has elected to apply the fair value option to
substantially all other secured financings because the use offair value eliminates non-economic volatility in earnings
that would arise from using different measurement
attributes. See Note 10 for further information about othersecured financings that are accounted for at fair value.
Other secured financings that are not recorded at fair value
are recorded based on the amount of cash received plus
accrued interest, which generally approximates fair value. As
these financings are not accounted for at fair value, they are
not included in the firm’s fair value hierarchy in Notes 4
through 10. Had these financings been included in the firm’s
fair value hierarchy, they would have been primarily
classified in level 3 as of both June 2021 and December 2020.
The table below presents information about other secured
financings.
$ in millions

As of June 2021
Other secured financings (short-term):
At fair value
At amortized cost
Other secured financings (long-term):
At fair value
At amortized cost
Total other secured financings

U.S.
DollarNon-U.S.
DollarTotal$ 7,523 $ 7,786 $15,309
139
–
139
5,563
5,298
10,861
659
665
1,324
$13,884 $13,749 $27,633

Other secured financings collateralized by:
Financial instruments$ 7,756 $12,052 $19,808
Other assets$ 6,128 $ 1,697 $ 7,825
As of December 2020
Other secured financings (short-term):
At fair value
At amortized cost
Other secured financings (long-term):
At fair value
At amortized cost
Total other secured financings$ 6,371 $ 6,847 $13,218
–
–
–
6,632
4,276
10,908
914
715
1,629
$13,917 $11,838 $25,755

Other secured financings collateralized by:
Financial instruments$ 6,841 $10,068 $16,909
Other assets$ 7,076 $ 1,770 $ 8,846
53

Goldman Sachs June 2021 Form 10-Q

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
In the table above:‰ Short-term other secured financings includes financings
maturing within one year of the financial statement date
and financings that are redeemable within one year of thefinancial statement date at the option of the holder.
‰ U.S. dollar-denominated short-term other secured
financings at amortized cost had a weighted averageinterest rate of 2.54% as of June 2021. These rates
include the effect of hedging activities.
‰ U.S. dollar-denominated long-term other secured
financings at amortized cost had a weighted averageinterest rate of 0.59% as of June 2021 and 1.27% as ofDecember 2020. These rates include the effect of hedging
activities.
‰ Non-U.S. dollar-denominated long-term other secured
financings at amortized cost had a weighted averageinterest rate of 0.39% as of June 2021 and 0.40% as ofDecember 2020. These rates include the effect of hedging
activities.
‰ Total other secured financings included $1.73 billion asof June 2021 and $2.05 billion as of December 2020
related to transfers of financial assets accounted for as
financings rather than sales. Such financings werecollateralized by financial assets, primarily included in
trading assets, of $1.81 billion as of June 2021 and$2.26 billion as of December 2020.
‰ Other secured financings collateralized by financial
instruments included $14.19 billion as of June 2021 and$11.28 billion as of December 2020 of other secured
financings collateralized by trading assets, investments
and loans, and included $5.62 billion as of June 2021 and$5.63 billion as of December 2020 of other secured
financings collateralized by financial instruments received
as collateral and repledged.

The table below presents other secured financings bymaturity.
As ofJune 2021$ in millions

Other secured financings (short-term)
Other secured financings (long-term):
2022
2023
2024
2025
2026
2027 - thereafter
Total other secured financings (long-term)
Total other secured financings$15,448
3,389
3,016
1,559
972
1,236
2,013
12,185$27,633

In the table above:‰ Long-term other secured financings that are repayableprior to maturity at the option of the firm are reflected attheir contractual maturity dates.
‰ Long-term other secured financings that are redeemableprior to maturity at the option of the holder are reflected
at the earliest dates such options become exercisable.
Collateral Received and Pledged
The firm receives cash and securities (e.g., U.S. government
and agency obligations, other sovereign and corporate
obligations, as well as equity securities) as collateral,
primarily in connection with resale agreements, securities
borrowed, derivative transactions and customer marginloans. The firm obtains cash and securities as collateral on
an upfront or contingent basis for derivative instruments
and collateralized agreements to reduce its credit exposure
to individual counterparties.
In many cases, the firm is permitted to deliver or repledge
financial instruments received as collateral when entering
into repurchase agreements and securities loaned
transactions, primarily in connection with secured client
financing activities. The firm is also permitted to deliver orrepledge these financial instruments in connection withother secured financings, collateralized derivativetransactions and firm or customer settlement requirements.
The firm also pledges certain trading assets in connection
with repurchase agreements, securities loaned transactions
and other secured financings, and other assets (substantially
all real estate and cash) in connection with other secured
financings to counterparties who may or may not have theright to deliver or repledge them.

Goldman Sachs June 2021 Form 10-Q

54

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
The table below presents financial instruments at fair value
received as collateral that were available to be delivered or
repledged and were delivered or repledged.
As of
June
2021

December
2020$1,010,547$ 853,216$864,494$723,409$ in millions

Collateral available to be delivered or repledged
Collateral that was delivered or repledged

The table below presents information about assets pledged.
As of
June
2021

$ in millions

December2020

Pledged to counterparties that had the right to deliver or repledge
Trading assets$ 74,597 $ 69,031
Investments$ 13,266 $ 13,375
Pledged to counterparties that did not have the right to deliver or repledge
Trading assets$ 99,640 $ 99,142
Investments$
4,020 $ 2,331
Loans$
8,234 $ 8,320
Other assets$ 12,246 $ 14,144

The firm also segregates securities for regulatory and otherpurposes related to client activity. Such securities aresegregated from trading assets and investments, as well asfrom securities received as collateral under resaleagreements and securities borrowed transactions. Securities
segregated by the firm were $23.87 billion as of June 2021
and $32.97 billion as of December 2020.
Note 12.

Other Assets
The table below presents other assets by type.
As of$ in millions

Property, leasehold improvements and equipment $Goodwill
Identifiable intangible assets
Operating lease right-of-use assets
Income tax-related assets
Miscellaneous receivables and other
Total
$

June
2021

December
2020

20,840
4,332
523
2,300
3,755
6,231
37,981$ 23,147
4,332
630
2,280
2,960
4,096
$ 37,445

Property, Leasehold Improvements and Equipment
Property, leasehold improvements and equipment is net ofaccumulated
depreciation
andamortizationof$10.58 billion as of June 2021 and $10.12 billion as ofDecember 2020. Property, leasehold improvements andequipment included $6.59 billion as of June 2021 and$6.54 billion as of December 2020 that the firm uses inconnection with its operations, and $219 million as ofJune 2021 and $318 million as of December 2020 of
foreclosed real estate primarily related to distressed loansthat were purchased by the firm. The remainder is held by
investment entities, including VIEs, consolidated by thefirm. Substantially all property and equipment isdepreciated on a straight-line basis over the useful life of theasset. Leasehold improvements are amortized on a straightline basis over the shorter of the useful life of the
improvement or the term of the lease. Capitalized costs ofsoftware developed or obtained for internal use areamortized on a straight-line basis over three years.
The firm tests property, leasehold improvements andequipment for impairment when events or changes incircumstances suggest that an asset’s or asset group’s
carrying value may not be fully recoverable. To the extent
the carrying value of an asset or asset group exceeds the
projected undiscounted cash flows expected to result fromthe use and eventual disposal of the asset or asset group, thefirm determines the asset or asset group is impaired andrecords an impairment equal to the difference between theestimated fair value and the carrying value of the asset or
asset group. In addition, the firm will recognize an
impairment prior to the sale of an asset or asset group if thecarrying value of the asset or asset group exceeds its
estimated fair value.
There were no material impairments during both the threemonths ended June 2021 and June 2020 or the six months
ended June 2021. There were $129 million of impairments
during the six months ended June 2020.
Goodwill
Goodwill is the cost of acquired companies in excess of thefair value of net assets, including identifiable intangible
assets, at the acquisition date.
The table below presents the carrying value of goodwill byreporting unit.
As of$ in millions

Investment Banking
Global Markets:
FICC
Equities
Asset Management
Consumer & Wealth Management:
Consumer banking
Wealth management
Total
55

Goldman Sachs June 2021 Form 10-Q

June
2021

December
2020

$ 281

$ 281

269
2,644
390

269
2,644
390

48
700
$4,33248
700$4,332

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
Goodwill is assessed for impairment annually in the fourth
quarter or more frequently if events occur or circumstanceschange that indicate an impairment may exist. Whenassessing goodwill for impairment, first, a qualitative
assessment can be made to determine whether it is more
likely than not that the estimated fair value of a reporting
unit is less than its estimated carrying value. If the results of
the qualitative assessment are not conclusive, a quantitative
goodwill test is performed. Alternatively, a quantitative
goodwill test can be performed without performing aqualitative assessment.

There were no events or changes in circumstances during
the six months ended June 2021 that would indicate that it
was more likely than not that the estimated fair value ofeach of the reporting units did not exceed its respective
estimated carrying value as of June 2021.

The quantitative goodwill test compares the estimated fairvalue of each reporting unit with its estimated net bookvalue (including goodwill and identifiable intangible
assets). If the reporting unit’s estimated fair value exceeds
its estimated net book value, goodwill is not impaired. An
impairment is recognized if the estimated fair value of areporting unit is less than its estimated net book value.

$ in millions

To estimate the fair value of each reporting unit, other thanConsumer banking, a relative value technique is usedbecause the firm believes market participants would use thistechnique to value these reporting units. The relative value
technique applies observable price-to-earnings multiples or
price-to-book multiples of comparable competitors toreporting units’ net earnings or net book value. To estimate
the fair value of Consumer banking, a discounted cash flow
valuation approach is used because the firm believes market
participants would use this technique to value thatreporting unit given its early stage of development. The
estimated net carrying value of each reporting unit reflects
an allocation of total shareholders’ equity and represents
the estimated amount of total shareholders’ equity required
to support the activities of the reporting unit undercurrently applicable regulatory capital requirements.
In the fourth quarter of 2020, the firm performed its annual
assessment of goodwill for impairment, for each of its
reporting units, by performing a qualitative assessment.
Multiple factors, including performance indicators,
macroeconomic indicators, firm and industry events, and fairvalue indicators, were assessed with respect to each of thefirm’s reporting units to determine whether it was more
likely than not that the estimated fair value of any of thesereporting units was less than its estimated carrying value. The
qualitative assessment also considered changes since thequantitative test performed in the fourth quarter of 2019.
As a result of the qualitative assessment, the firm determinedthat it was more likely than not that the estimated fair valueof each of the reporting units exceeded its respective
estimated carrying value. Therefore, the firm determined that
goodwill for each reporting unit was not impaired and that aquantitative goodwill test was not required.

Identifiable Intangible Assets
The table below presents identifiable intangible assets byreporting unit and type.
As of
June
2021

December
2020

By Reporting Unit
Global Markets:
FICC
Equities
Asset Management
Consumer & Wealth Management:
Consumer banking
Wealth management
Total

$

By TypeCustomer lists
Gross carrying value
Accumulated amortization
Net carrying value$ 1,472(1,112)360$ 1,478(1,089)389

Acquired leases and other
Gross carrying value
Accumulated amortization
Net carrying value

600
(437)
163

710
(469)
241

2,072
(1,549)
$ 523

2,188
(1,558)$ 630$

Total gross carrying value
Total accumulated amortization
Total net carrying value

2
44
194

$

–
283
523

$

2
45
274
6
303
630

During the six months ended June 2021, the amount ofintangible assets acquired by the firm was not material. The
firm acquired $155 million of intangible assets during 2020,
primarily related to acquired leases and customer lists, with aweighted average amortization period of 10 years.
Substantially all of the firm’s identifiable intangible assets
have finite useful lives and are amortized over their estimateduseful lives generally using the straight-line method.
The tables below present informationamortization of identifiable intangible assets.
Three Months
Ended June

about

the

Six Months
Ended June

$ in millions

2021

2020

2021

2020

Amortization

$31

$36

$67

$77
As of
June 2021$ in millions

Estimated future amortization
Remainder of 2021
2022
2023
2024
2025
2026
Goldman Sachs June 2021 Form 10-Q

$46
$82
$76
$62
$44
$33
56

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
The firm tests intangible assets for impairment when eventsor changes in circumstances suggest that an asset’s or asset
group’s carrying value may not be fully recoverable. To theextent the carrying value of an asset or asset group exceeds
the projected undiscounted cash flows expected to result
from the use and eventual disposal of the asset or asset
group, the firm determines the asset or asset group is
impaired and records an impairment equal to the difference
between the estimated fair value and the carrying value ofthe asset or asset group. In addition, the firm will recognize
an impairment prior to the sale of an asset or asset group if
the carrying value of the asset or asset group exceeds its
estimated fair value. There were no material impairments
during each of the three and six months ended June 2021
and June 2020.

Miscellaneous Receivables and Other
Miscellaneous receivables and other included:

Operating Lease Right-of-Use Assets
The firm enters into operating leases for real estate, officeequipment and other assets, substantially all of which areused in connection with its operations. For leases longer
than one year, the firm recognizes a right-of-use asset
representing the right to use the underlying asset for thelease term, and a lease liability representing the liability tomake payments. The lease term is generally determinedbased on the contractual maturity of the lease. For leases
where the firm has the option to terminate or extend thelease, an assessment of the likelihood of exercising theoption is incorporated into the determination of the lease
term. Such assessment is initially performed at the inceptionof the lease and is updated if events occur that impact theoriginal assessment.

The table below presents the types and sources of deposits.

An operating lease right-of-use asset is initially determinedbased on the operating lease liability, adjusted for initial
direct costs, lease incentives and amounts paid at or prior tolease commencement. This amount is then amortized overthe lease term. The firm recognized $144 million for the six
months ended June 2021 and $147 million for the six
months ended June 2020 of right-of-use assets andoperating lease liabilities in non-cash transactions for leases
entered into or assumed. See Note 15 for information about
operating lease liabilities.
For leases where the firm will derive no economic benefit
from leased space that it has vacated or where the firm has
shortened the term of a lease when space is no longer
needed, the firm will record an impairment or accelerated
amortization of right-of-use assets. There were no material
impairments or accelerated amortizations during both thesix months ended June 2021 and June 2020.

‰ Investments in qualified affordable housing projects of$682 million as of June 2021 and $678 million as ofDecember 2020.
‰ Assets classified as held for sale of $2.22 billion as ofJune 2021 and $437 million as of December 2020 related
to the firm’s consolidated investments within the AssetManagement segment, substantially all of which
consisted of property and equipment.
Note 13.

Deposits$ in millions

Savings and
Demand

Time

Total

As of June 2021
Consumer deposits
Private bank deposits
Brokered certificates of deposit
Deposit sweep programs
Transaction banking
Other deposits
Total$ 79,305
67,398–28,491
39,330–$214,524$23,201
2,546
31,866–
4,516
29,489$91,618$102,506
69,944
31,86628,491
43,84629,489$306,142

As of December 2020
Consumer deposits
Private bank deposits
Brokered certificates of deposit
Deposit sweep programs
Transaction banking
Other deposits
Total$ 67,395
67,185–22,98728,852–$186,419$29,530
1,183
30,060––12,770$73,543$ 96,925
68,36830,06022,98728,852
12,770$259,962

In the table above:‰ Substantially all deposits are interest-bearing.
‰ Savings and demand accounts consist of money market
deposit accounts, negotiable order of withdrawal
accounts and demand deposit accounts that have nostated maturity or expiration date.
‰ Time deposits included $33.56 billion as of June 2021
and $16.18 billion as of December 2020 of deposits
accounted for at fair value under the fair value option. See
Note 10 for further information about deposits
accounted for at fair value.
‰ Time deposits had a weighted average maturity of
approximately 1.0 years as of June 2021 and 1.3 years asof December 2020.
‰ Deposit sweep programs include long-term contractual
agreements with U.S. broker-dealers who sweep client
cash to FDIC-insured deposits. As of June 2021, the firm
had 12 such deposit sweep program agreements.

57

Goldman Sachs June 2021 Form 10-Q

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)‰ Transaction banking deposits consists of deposits that thefirm raised through its cash management services businessfor corporate and other institutional clients.
‰ Other deposits represent deposits from institutional
clients.

Note 14.

Unsecured Borrowings
The table below presents information about unsecured
borrowings.

‰ Deposits insured by the FDIC were $136.72 billion as ofJune 2021 and $123.03 billion as of December 2020.
‰ Deposits insured by non-U.S. insurance programs were$29.35 billion as of June 2021 and $27.52 billion as ofDecember 2020.
The table below presents the location of deposits.
As of$ in millions

U.S. offices
Non-U.S. offices
Total

June
2021

December
2020$231,734
74,408$306,142$206,356
53,606$259,962

In the table above, U.S. deposits were held at Goldman
Sachs Bank USA (GS Bank USA) and substantially all
non-U.S. deposits were held at Goldman Sachs
International Bank (GSIB).
The table below presents maturities of time deposits held in
U.S. and non-U.S. offices.
As of June 2021
$ in millions

Remainder of 2021
2022
2023
2024
2025
2026
2027 - thereafter
Total

U.S.

Non-U.S.

Total$22,20923,219
6,489
4,151
2,054
1,489
959
$60,570$18,345
11,209
125
134
267
251
717
$31,048$40,554
34,428
6,614
4,285
2,321
1,740
1,676
$91,618

As of June 2021, deposits in U.S. offices included$14.03 billion and deposits in non-U.S. offices included$30.52 billion of time deposits in denominations that met
or exceeded the applicable insurance limits, or wereotherwise not covered by insurance.
The firm’s savings and demand deposits are recorded basedon the amount of cash received plus accrued interest, whichapproximates fair value. In addition, the firm designates
certain derivatives as fair value hedges to convert a portionof its time deposits not accounted for at fair value fromfixed-rate obligations into floating-rate obligations. The
carrying value of time deposits not accounted for at fairvalue approximated fair value as of both June 2021 andDecember 2020. As these savings and demand deposits andtime deposits are not accounted for at fair value, they are
not included in the firm’s fair value hierarchy in Notes 4
through 10. Had these deposits been included in the firm’s
fair value hierarchy, they would have been classified inlevel 2 as of both June 2021 and December 2020.

As of$ in millions

Unsecured short-term borrowings
Unsecured long-term borrowings
Total

June
2021

December2020$ 61,740
238,930$300,670$ 52,870
213,481$266,351

Unsecured Short-Term Borrowings
Unsecured short-term borrowings includes the portion of
unsecured long-term borrowings maturing within one yearof the financial statement date and unsecured long-termborrowings that are redeemable within one year of thefinancial statement date at the option of the holder.
The firm accounts for certain hybrid financial instruments
at fair value under the fair value option. See Note 10 for
further information about unsecured short-termborrowings that are accounted for at fair value. In addition,
the firm designates certain derivatives as fair value hedges
to convert a portion of its unsecured short-term borrowings
not accounted for at fair value from fixed-rate obligations
into floating-rate obligations. The carrying value of
unsecured short-term borrowings that are not recorded atfair value generally approximates fair value due to theshort-term nature of the obligations. As these unsecured
short-term borrowings are not accounted for at fair value,
they are not included in the firm’s fair value hierarchy inNotes 4 through 10. Had these borrowings been included in
the firm’s fair value hierarchy, substantially all would havebeen classified in level 2 as of both June 2021 andDecember 2020.
The table below presents information about unsecured
short-term borrowings.
As of
June
2021

December2020

Current portion of unsecured long-term borrowings $26,077
Hybrid financial instruments
22,850Commercial paper
10,710
Other unsecured short-term borrowings
2,103
Total unsecured short-term borrowings$61,740$25,914
18,8236,085
2,048$52,870

Weighted average interest rate

1.84%

$ in millions

1.98%

In the table above, the weighted average interest rates forthese borrowings include the effect of hedging activities andexclude unsecured short-term borrowings accounted for atfair value under the fair value option. See Note 7 for further
information about hedging activities.

Goldman Sachs June 2021 Form 10-Q

58

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
Unsecured Long-Term Borrowings
The table below presents information about unsecured
long-term borrowings.
U.S.
DollarNon-U.S.
DollarTotal

As of June 2021
Fixed-rate obligations
Floating-rate obligations
Total$111,944
46,692$158,636$46,475
33,819$80,294$158,419
80,511$238,930

As of December 2020
Fixed-rate obligations
Floating-rate obligations
Total$100,558
42,019$142,577$38,759
32,145$70,904$139,317
74,164$213,481$ in millions

In the table above:‰ Unsecured long-term borrowings consists principally of
senior borrowings, which have maturities extending
through 2065.
‰ Floating-rate obligations includes equity-linked, creditlinked and indexed instruments. Floating interest rates are
generally based on LIBOR or Euro Interbank OfferedRate.
‰ U.S. dollar-denominated debt had interest rates ranging
from 0.48% to 7.68% (with a weighted average rate of
3.53%) as of June 2021 and 0.63% to 9.30% (with aweighted average rate of 4.07%) as of December 2020.
These rates exclude unsecured long-term borrowings
accounted for at fair value under the fair value option.
‰ Non-U.S. dollar-denominated debt had interest rates
ranging from 0.13% to 13.00% (with a weighted averagerate of 1.89%) as of June 2021 and 0.13% to 13.00%(with a weighted average rate of 2.20%) as ofDecember 2020. These rates exclude unsecured long-termborrowings accounted for at fair value under the fairvalue option.

The table below presents unsecured long-term borrowings
by maturity.

$ in millions

As ofJune 2021

2022
2023
2024
2025
2026
2027 - thereafter
Total$ 14,582
37,567
29,37728,01821,426
107,960$238,930

In the table above:‰ Unsecured long-term borrowings maturing within one
year of the financial statement date and unsecured longterm borrowings that are redeemable within one year of
the financial statement date at the option of the holder are
excluded as they are included in unsecured short-termborrowings.
‰ Unsecured long-term borrowings that are repayable prior
to maturity at the option of the firm are reflected at theircontractual maturity dates.
‰ Unsecured long-term borrowings that are redeemableprior to maturity at the option of the holder are reflected
at the earliest dates such options become exercisable.
‰ Unsecured long-term borrowings included $8.43 billionof adjustments to the carrying value of certain unsecured
long-term borrowings resulting from the application ofhedge accounting by year of maturity as follows:$6 million in 2022, $159 million in 2023, $505 million in
2024, $583 million in 2025, $422 million in 2026 and$6.75 billion in 2027 and thereafter.
The firm designates certain derivatives as fair value hedges
to convert a portion of fixed-rate unsecured long-termborrowings not accounted for at fair value into floatingrate obligations. See Note 7 for further information about
hedging activities.
The table below presents unsecured long-term borrowings,
after giving effect to such hedging activities.
As of
June
2021

$ in millions

Fixed-rate obligations:
At fair value
At amortized cost
Floating-rate obligations:
At fair value
At amortized cost
Total

59

Goldman Sachs June 2021 Form 10-Q

$

2,469
29,59841,927
164,936$238,930

December
2020

$

1,521
30,82739,390141,743$213,481

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
In the table above, the aggregate amounts of unsecured
long-term borrowings had weighted average interest rates
of 1.60% (2.32% related to fixed-rate obligations and1.47% related to floating-rate obligations) as of June 2021
and 2.01% (3.34% related to fixed-rate obligations and1.70% related to floating-rate obligations) as ofDecember 2020. These rates exclude unsecured long-termborrowings accounted for at fair value under the fair value
option.
The carrying value of unsecured long-term borrowings forwhich the firm did not elect the fair value option was$194.53 billion as of June 2021 and $172.57 billion as ofDecember 2020. The estimated fair value of such unsecured
long-term borrowings was $203.85 billion as of June 2021
and $183.29 billion as of December 2020. As theseborrowings are not accounted for at fair value, they are notincluded in the firm’s fair value hierarchy in Notes 4
through 10. Had these borrowings been included in thefirm’s fair value hierarchy, substantially all would havebeen classified in level 2 as of both June 2021 andDecember 2020.
Subordinated Borrowings
Unsecured long-term borrowings includes subordinateddebt and junior subordinated debt. Subordinated debt thatmatures within one year is included in unsecured short-termborrowings. Junior subordinated debt is junior in right of
payment to other subordinated borrowings, which arejunior to senior borrowings. Long-term subordinated debt
had maturities ranging from 2025 to 2045 as of bothJune 2021 and December 2020.
The table below presents information about subordinatedborrowings.

$ in millions

Par
AmountCarrying
Value

Rate

As of June 2021
Subordinated debt
Junior subordinated debt
Total

$13,959968$14,927$17,368
1,350$18,718

1.57%
1.19%
1.55%

As of December 2020
Subordinated debt
Junior subordinated debt
Total

$14,136968$15,104$18,5291,430$19,959

1.83%
1.32%
1.80%

In the table above, the rate is the weighted average interest
rate for these borrowings (excluding borrowings accounted
for at fair value under the fair value option), including theeffect of fair value hedges used to convert fixed-rate
obligations into floating-rate obligations. See Note 7 forfurther information about hedging activities.

Junior Subordinated Debt
In 2004, Group Inc. issued $2.84 billion of juniorsubordinated debt to Goldman Sachs Capital I (Trust), a
Delaware statutory trust. The Trust issued $2.75 billion ofguaranteed preferred beneficial interests (Trust Preferred
securities) to third parties and $85 million of common
beneficial interests to Group Inc. As of both June 2021 andDecember 2020, the outstanding par amount of juniorsubordinated debt held by the Trust was $968 million andthe outstanding par amount of Trust Preferred securities
and common beneficial interests issued by the Trust was$939 million and $29 million, respectively. The Trust is awholly-owned finance subsidiary of the firm for regulatory
and legal purposes but is not consolidated for accounting
purposes.
The firm pays interest semi-annually on the juniorsubordinated debt at an annual rate of 6.345% and thedebt matures on February 15, 2034. The coupon rate andthe payment dates applicable to the beneficial interests are
the same as the interest rate and payment dates for thejunior subordinated debt. The firm has the right, from time
to time, to defer payment of interest on the juniorsubordinated debt, and therefore cause payment on the
Trust’s preferred beneficial interests to be deferred, in eachcase up to ten consecutive semi-annual periods. During any
such deferral period, the firm will not be permitted to,among other things, pay dividends on or make certain
repurchases of its common stock. The Trust is not
permitted to pay any distributions on the common
beneficial interests held by Group Inc. unless all dividends
payable on the preferred beneficial interests have been paidin full.
The firm has covenanted in favor of the holders ofGroup Inc.’s 6.345% junior subordinated debt due
February 15, 2034, that, subject to certain exceptions, thefirm will not redeem or purchase the capital securities
issued by Goldman Sachs Capital II and Goldman Sachs
Capital III (APEX Trusts) or shares of Group Inc.’s
Perpetual Non-Cumulative Preferred Stock, Series E(Series E Preferred Stock), Perpetual Non-Cumulative
Preferred Stock, Series F (Series F Preferred Stock) or
Perpetual Non-Cumulative Preferred Stock, Series O, if theredemption or purchase results in less than $253 million
aggregate liquidation preference of that series outstanding,prior to specified dates in 2022 for a price that exceeds amaximum amount determined by reference to the net cash
proceeds that the firm has received from the sale ofqualifying securities.
The APEX Trusts hold Group Inc.’s Series E Preferred
Stock and Series F Preferred Stock. These trusts are
Delaware statutory trusts sponsored by the firm andwholly-owned finance subsidiaries of the firm forregulatory and legal purposes but are not consolidated foraccounting purposes.
Goldman Sachs June 2021 Form 10-Q

60

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
In the table above, the weighted average discount rate
represents the firm’s incremental borrowing rate as ofJanuary 2019 for operating leases existing on the date ofadoption of ASU No. 2016-02, “Leases (Topic 842),” andat the lease inception date for leases entered into subsequent
to the adoption of this ASU.

Note 15.

Other Liabilities
The table below presents other liabilities by type.
As of$ in millions

Compensation and benefits
Income tax-related liabilities
Operating lease liabilities
Noncontrolling interests
Employee interests in consolidated funds
Accrued expenses and other
Total

June
2021

December2020$ 9,260
3,166
2,291
1,631
27
7,573
$23,948$ 7,896
3,155
2,283
1,640
34
7,443
$22,451

In the table above, accrued expenses and other includes
contract liabilities, which represent consideration received
by the firm in connection with its contracts with clients,
prior to providing the service. As of both June 2021 andDecember 2020, the firm’s contract liabilities were notmaterial.
Operating Lease Liabilities
For leases longer than one year, the firm recognizes aright-of-use asset representing the right to use theunderlying asset for the lease term, and a lease liability
representing the liability to make payments. See Note 12 for
information about operating lease right-of-use assets.
The table below presents information about operating leaseliabilities.

$ in millions

As of June 2021
Remainder of 2021
2022
2023
2024
2025
2026 - thereafter
Total undiscounted lease payments
Imputed interest
Total operating lease liabilities
Weighted average remaining lease term
Weighted average discount rate
As of December 2020
2021
2022
2023
2024
2025
2026 - thereafter
Total undiscounted lease payments
Imputed interest
Total operating lease liabilities
Weighted average remaining lease term
Weighted average discount rate

61

Goldman Sachs June 2021 Form 10-Q

Operatinglease liabilities

$ 162
323
282
266
235
1,807
3,075
(784)
$2,29115 years
3.72%

$ 342
301
264
247
215
1,899
3,268
(985)
$2,28316 years
4.02%

Operating lease costs were $110 million for both the threemonths ended June 2021 and June 2020, $230 million forthe six months ended June 2021 and $223 million for thesix months ended June 2020. Variable lease costs, which
are included in operating lease costs, were not material foreach of the three and six months ended June 2021 andJune 2020. Total occupancy expenses for space held inexcess of the firm’s current requirements were not material
for both the six months ended June 2021 and June 2020.
Lease payments relating to operating lease arrangementsthat were signed, but had not yet commenced were$441 million as of June 2021.
Note 16.

Securitization Activities
The firm securitizes residential and commercial mortgages,
corporate bonds, loans and other types of financial assets
by selling these assets to securitization vehicles (e.g., trusts,
corporate entities and limited liability companies) or
through a resecuritization. The firm acts as underwriter ofthe beneficial interests that are sold to investors. The firm’s
residential mortgage securitizations are primarily inconnection with government agency securitizations.
The firm accounts for a securitization as a sale when it has
relinquished control over the transferred financial assets.
Prior to securitization, the firm generally accounts for assets
pending transfer at fair value and therefore does not
typically recognize significant gains or losses upon thetransfer of assets. Net revenues from underwriting activities
are recognized in connection with the sales of theunderlying beneficial interests to investors.
The firm generally receives cash in exchange for thetransferred assets but may also have continuing
involvement with the transferred financial assets, including
ownership of beneficial interests in securitized financial
assets, primarily in the form of debt instruments. The firm
may also purchase senior or subordinated securities issued
by securitization vehicles (which are typically VIEs) inconnection with secondary market-making activities.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
The primary risks included in beneficial interests and otherinterests from the firm’s continuing involvement withsecuritization vehicles are the performance of the underlying
collateral, the position of the firm’s investment in the capital
structure of the securitization vehicle and the market yield forthe security. Interests accounted for at fair value are primarily
classified in level 2 of the fair value hierarchy. Interests notaccounted for at fair value are carried at amounts thatapproximate fair value. See Notes 4 through 10 for further
information about fair value measurements.

‰ The firm’s risk of loss from retained or purchasedinterests is limited to the carrying value of these interests.

The table below presents the amount of financial assets
securitized and the cash flows received on retained interests
in securitization entities in which the firm had continuing
involvement as of the end of the period.

‰ The fair value of retained interests was $3.88 billion as ofJune 2021 and $3.19 billion as of December 2020.

Three Months
Ended June
$ in millions

2021

Six Months
Ended June

2020

2021

2020

Residential mortgages$ 4,813 $5,297 $ 9,751 $ 8,404
Commercial mortgages
5,836 2,457 11,209 7,453
Other financial assets
1,162
687
2,225 1,227
Total financial assets securitized $11,811 $8,441 $23,185 $17,084
Retained interests cash flows

$

282 $

98 $

412 $

184

In the table above, financial assets securitized included
assets of $274 million during the three months ended
June 2021, $129 million during the three months ended
June 2020, $413 million during the six months ended
June 2021 and $303 million during the six months ended
June 2020, which were securitized in a non-cash exchange
for loans and investments.

‰ Purchased interests represent senior and subordinatedinterests, purchased in connection with secondary
market-making activities, in securitization entities inwhich the firm also holds retained interests.
‰ Substantially all of the total outstanding principal amountand total retained interests relate to securitizations during
2015 and thereafter.

In addition to the interests in the table above, the firm hadother continuing involvement in the form of derivativetransactionsandcommitments
withcertainnonconsolidated VIEs. The carrying value of thesederivatives and commitments was a net asset of $97 million
as of June 2021 and $52 million as of December 2020, andthe notional amount of these derivatives and commitments
was $1.99 billion as of June 2021 and $1.43 billion as ofDecember 2020. The notional amounts of these derivatives
and commitments are included in maximum exposure toloss in the nonconsolidated VIE table in Note 17.
The table below presents information about the weighted
average key economic assumptions used in measuring thefair value of mortgage-backed retained interests.
As of$ in millions

The table below presents information about nonconsolidated
securitization entities to which the firm sold assets and had
continuing involvement as of the end of the period.
Outstanding
Principal
AmountRetained
Interests

Purchased
Interests

As of June 2021
U.S. government agency-issued CMOs
Other residential mortgage-backed
Other commercial mortgage-backed
Corporate debt and other asset-backed
Total$ 25,675
23,32045,735
5,783$100,513$1,487
1,053
1,078
252
$3,870

$ –
21
28
–
$49

As of December 2020
U.S. government agency-issued CMOs
Other residential mortgage-backed
Other commercial mortgage-backed
Corporate debt and other asset-backed
Total$ 20,841
24,262
38,3404,299$ 87,742

$ 906
1,170
914
192
$3,182

$ 4
23
39
–
$66

$ in millions

In the table above:‰ CMOs represents collateralized mortgage obligations.
‰ The outstanding principal amount is presented for the
purpose of providing information about the size of the
securitization entities and is not representative of thefirm’s risk of loss.

Fair value of retained interests
Weighted average life (years)
Constant prepayment rate
Impact of 10% adverse change
Impact of 20% adverse change
Discount rate
Impact of 10% adverse change
Impact of 20% adverse change

June
2021

December
2020$3,632
5.3
13.0%$ (28)$ (51)
7.4%$ (54)$ (105)$2,9934.7
15.0%$ (25)$ (50)
6.1%$ (42)$ (82)In the table above:‰ Amounts do not reflect the benefit of other financial
instruments that are held to mitigate risks inherent inthese retained interests.
‰ Changes in fair value based on an adverse variation inassumptions generally cannot be extrapolated because therelationship of the change in assumptions to the change infair value is not usually linear.
‰ The impact of a change in a particular assumption is
calculated independently of changes in any otherassumption. In practice, simultaneous changes inassumptions might magnify or counteract the sensitivities
disclosed above.

Goldman Sachs June 2021 Form 10-Q

62

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)‰ The constant prepayment rate is included only for
positions for which it is a key assumption in thedetermination of fair value.
‰ The discount rate for retained interests that relate to U.S.
government agency-issued CMOs does not include any
credit loss. Expected credit loss assumptions are reflectedin the discount rate for the remainder of retainedinterests.
The firm has other retained interests not reflected in thetable above with a fair value of $252 million and aweighted average life of 3.1 years as of June 2021, and a fairvalue of $192 million and a weighted average life of
3.9 years as of December 2020. Due to the nature and fairvalue of certain of these retained interests, the weighted
average assumptions for constant prepayment and discountrates and the related sensitivity to adverse changes are notmeaningful as of both June 2021 and December 2020. The
firm’s maximum exposure to adverse changes in the valueof these interests is the carrying value of $252 million as ofJune 2021 and $192 million as of December 2020.

VIE Consolidation Analysis
The enterprise with a controlling financial interest in a VIE
is known as the primary beneficiary and consolidates the
VIE. The firm determines whether it is the primary
beneficiary of a VIE by performing an analysis thatprincipally considers:‰ Which variable interest holder has the power to direct theactivities of the VIE that most significantly impact the
VIE’s economic performance;‰ Which variable interest holder has the obligation toabsorb losses or the right to receive benefits from the VIEthat could potentially be significant to the VIE;
‰ The VIE’s purpose and design, including the risks the VIE
was designed to create and pass through to its variableinterest holders;‰ The VIE’s capital structure;‰ The terms between the VIE and its variable interest
holders and other parties involved with the VIE; and‰ Related-party relationships.

Note 17.

Variable Interest Entities
A variable interest in a VIE is an investment (e.g., debt orequity) or other interest (e.g., derivatives or loans andlending commitments) that will absorb portions of the
VIE’s expected losses and/or receive portions of the VIE’s
expected residual returns.
The firm’s variable interests in VIEs include senior andsubordinated debt; loans and lending commitments; limited
and general partnership interests; preferred and common
equity; derivatives that may include foreign currency,
equity and/or credit risk; guarantees; and certain of the fees
the firm receives from investment funds. Certain interest
rate, foreign currency and credit derivatives the firm enters
into with VIEs are not variable interests because theycreate, rather than absorb, risk.
VIEs generally finance the purchase of assets by issuing debt
and equity securities that are either collateralized by orindexed to the assets held by the VIE. The debt and equity
securities issued by a VIE may include tranches of varying
levels of subordination. The firm’s involvement with VIEs
includes securitization of financial assets, as described in
Note 16, and investments in and loans to other types of
VIEs, as described below. See Note 3 for the firm’s
consolidation policies, including the definition of a VIE.

63

Goldman Sachs June 2021 Form 10-Q

The firm reassesses its evaluation of whether an entity is a
VIE when certain reconsideration events occur. The firm
reassesses its determination of whether it is the primary
beneficiary of a VIE on an ongoing basis based on current
facts and circumstances.
VIE Activities
The firm is principally involved with VIEs through thefollowing business activities:
Mortgage-Backed VIEs. The firm sells residential andcommercial mortgage loans and securities to mortgagebacked VIEs and may retain beneficial interests in the assets
sold to these VIEs. The firm purchases and sells beneficial
interests issued by mortgage-backed VIEs in connection
with market-making activities. In addition, the firm mayenter into derivatives with certain of these VIEs, primarily
interest rate swaps, which are typically not variableinterests. The firm generally enters into derivatives withother counterparties to mitigate its risk.
Real Estate, Credit- and Power-Related and Other
Investing VIEs. The firm purchases equity and debt
securities issued by and makes loans to VIEs that hold realestate, performing and nonperforming debt, distressedloans, power-related assets and equity securities. The firm
generally does not sell assets to, or enter into derivatives
with, these VIEs.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
Corporate Debt and Other Asset-Backed VIEs. The
firm structures VIEs that issue notes to clients, purchases
and sells beneficial interests issued by corporate debt andother asset-backed VIEs in connection with market-making
activities, and makes loans to VIEs that warehousecorporate debt. Certain of these VIEs synthetically create
the exposure for the beneficial interests they issue byentering into credit derivatives with the firm, rather thanpurchasing the underlying assets. In addition, the firm mayenter into derivatives, such as total return swaps, withcertain corporate debt and other asset-backed VIEs, underwhich the firm pays the VIE a return due to the beneficial
interest holders and receives the return on the collateral
owned by the VIE. The collateral owned by these VIEs isprimarily other asset-backed loans and securities. The firm
may be removed as the total return swap counterparty andmay enter into derivatives with other counterparties tomitigate its risk related to these swaps. The firm may sell
assets to the corporate debt and other asset-backed VIEs it
structures.
Principal-Protected Note VIEs. The firm structures VIEs
that issue principal-protected notes to clients. These VIEs
own portfolios of assets, principally with exposure to hedge
funds. Substantially all of the principal protection on thenotes issued by these VIEs is provided by the asset portfolio
rebalancing that is required under the terms of the notes.
The firm enters into total return swaps with these VIEs
under which the firm pays the VIE the return due to theprincipal-protected note holders and receives the return on
the assets owned by the VIE. The firm may enter into
derivatives with other counterparties to mitigate its risk.
The firm also obtains funding through these VIEs.
Investments in Funds. The firm makes equity investments
in certain investment fund VIEs it manages and is entitled toreceive fees from these VIEs. The firm has generally not soldassets to, or entered into derivatives with, these VIEs.

Nonconsolidated VIEs
The table below presents a summary of the nonconsolidated
VIEs in which the firm holds variable interests.
As of$ in millions

June
2021

Total nonconsolidated VIEs
Assets in VIEs
$159,629
Carrying value of variable interests — assets $ 9,846
Carrying value of variable interests — liabilities $755
Maximum exposure to loss:
Retained interests$ 3,870
Purchased interests
813
Commitments and guarantees
2,168
Derivatives
8,792
Debt and equity
4,789
Total
$ 20,432

December
2020$148,665$ 8,624
$
888
$

3,182
1,041
2,455
8,343
4,020
$ 19,041

In the table above:‰ The nature of the firm’s variable interests is described in
the rows under maximum exposure to loss.
‰ The firm’s exposure to the obligations of VIEs is generally
limited to its interests in these entities. In certain
instances, the firm provides guarantees, including
derivative guarantees, to VIEs or holders of variableinterests in VIEs.
‰ The maximum exposure to loss excludes the benefit ofoffsetting financial instruments that are held to mitigate
the risks associated with these variable interests.
‰ The maximum exposure to loss from retained interests,
purchased interests, and debt and equity is the carrying
value of these interests.
‰ The maximum exposure to loss from commitments andguarantees, and derivatives is the notional amount, which
does not represent anticipated losses and has not been
reduced by unrealized losses. As a result, the maximum
exposure to loss exceeds liabilities recorded forcommitments and guarantees, and derivatives.

Goldman Sachs June 2021 Form 10-Q

64

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
The table below presents information, by principal businessactivity, for nonconsolidated VIEs included in the summary
table above.

Consolidated VIEs
The table below presents a summary of the carrying value
and balance sheet classification of assets and liabilities in
consolidated VIEs.

As of
June
2021

$ in millions

Mortgage-backed
Assets in VIEs
Carrying value of variable interests — assets
Maximum exposure to loss:
Retained interests
Purchased interests
Commitments and guarantees
Derivatives
Total$107,729$ 4,399$99,353$ 4,014$$ 2,990
1,024
47
394
$ 4,455

$

3,618
781
41
394
4,834

Corporate debt and other asset-backed
Assets in VIEs
$ 16,635
Carrying value of variable interests — assets $ 1,452
Carrying value of variable interests — liabilities $745
Maximum exposure to loss:
Retained interests$
252
Purchased interests
32
Commitments and guarantees
667
Derivatives
8,325
Debt and equity
794
Total
$ 10,070$14,077
$ 913
$ 874
$

192
17
989
7,862
323
$ 9,383$ 12,219$
429$14,301
$ 409

$

$

$

34
3
429
466

$

45
3
409
457

‰ Mortgage-backed: Assets primarily included in trading
assets and loans.
‰ Real estate, credit- and power-related and other investing:Assets primarily included in investments and loans, andliabilities included in trading liabilities and otherliabilities.
‰ Corporate debt and other asset-backed: Assets included
in loans and trading assets, and liabilities included in
trading liabilities.
‰ Investments in funds: Assets included in investments.
Goldman Sachs June 2021 Form 10-Q

December
2020

Total consolidated VIEs
AssetsCash and cash equivalents
Trading assets
Investments
Loans
Other assets
Total

$ 215
155
867
1,738
575
$3,550

$ 312
96
880
2,099
989
$4,376

Liabilities
Other secured financings
Customer and other payables
Trading liabilities
Unsecured short-term borrowings
Unsecured long-term borrowings
Other liabilities
Total$1,348
5
54
40
207
946
$2,600$1,891
28
296
43
226
948
$3,432In the table above:

As of both June 2021 and December 2020, the carrying
values of the firm’s variable interests in nonconsolidated
VIEs are included in the consolidated balance sheets asfollows:

65

June
2021

$ in millions

Real estate, credit- and power-related and other investing
Assets in VIEs
$ 23,046$20,934
Carrying value of variable interests — assets $ 3,566$ 3,288
Carrying value of variable interests — liabilities $10$
14
Maximum exposure to loss:
Commitments and guarantees$ 1,426$ 1,374
Derivatives
70
84
Debt and equity
3,566
3,288
Total
$ 5,062$ 4,746

Investments in funds
Assets in VIEs
Carrying value of variable interests — assets
Maximum exposure to loss:
Commitments and guarantees
Derivatives
Debt and equity
Total

As of

December2020‰ Assets and liabilities are presented net of intercompany
eliminations and exclude the benefit of offsetting financial
instruments that are held to mitigate the risks associatedwith the firm’s variable interests.
‰ VIEs in which the firm holds a majority voting interest are
excluded if (i) the VIE meets the definition of a businessand (ii) the VIE’s assets can be used for purposes otherthan the settlement of its obligations.
‰ Substantially all assets can only be used to settle
obligations of the VIE.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
The table below presents information, by principal businessactivity, for consolidated VIEs included in the summary
table above.

June
2021

December
2020

Real estate, credit-related and other investing
AssetsCash and cash equivalents$ 129
Trading assets
38
Investments
867
Loans
1,738
Other assets
575
Total
$3,347

$ 229
8
880
2,099
989
$4,205

Liabilities
Other secured financings
Customer and other payables
Trading liabilities
Other liabilities
Total

$ 312
5
54
946
$1,317

$ 649
28
46
948
$1,671

Corporate debt and other asset-backed
AssetsCash and cash equivalents
Total

$
$

$
$

Liabilities
Other secured financings
Total

$ 627
$ 627

86
86

Commitments, Contingencies and Guarantees
Commitments
The table below presents commitments by type.

As of$ in millions

Note 18.

As of$ in millions

83
83

Commitment Type
Commercial lending:Investment-grade
Non-investment-grade
Warehouse financing
Credit cards
Total lending
Risk participations
Collateralized agreement
Collateralized financing
Letters of credit
Investment
Other
Total commitments

June
2021

December2020$ 95,800
75,062
10,62028,529210,011
10,126110,120
34,584
369
8,067
9,608
$382,885$ 83,801
56,757
9,377
21,640171,575
8,054
55,27835,402
367
6,456
7,836
$284,968

The table below presents commitments by expiration.
As of June 2021

$ 679
$ 679

Principal-protected notes
AssetsTrading assets
Total

$ 117
$ 117

$
$

Liabilities
Other secured financings
Trading liabilities
Unsecured short-term borrowings
Unsecured long-term borrowings
Total

$ 409
–
40
207
$ 656

$ 563
250
43
226
$1,082

88
88

In the table above:‰ The majority of the assets in principal-protected notes
VIEs are intercompany and are eliminated inconsolidation.
‰ Creditors and beneficial interest holders of real estate,credit-related and other investing VIEs do not haverecourse to the general credit of the firm.

Remainderof 20212022 2023

2024 2025

2026 Thereafter

Commitment Type
Commercial lending:Investment-grade$ 6,015
Non-investment-grade
2,280
Warehouse financing
22
Credit cards
28,529Total lending
36,846
Risk participations
536
Collateralized agreement 106,401
Collateralized financing
34,584
Letters of credit
205
Investment
3,193
Other
9,092
Total commitments$190,857$36,934
21,397
5,285–
63,616
5,237
3,719
–
123
1,890
432
$75,017$34,405
23,687
4,203–
62,295
3,093
–
–
–
1,586
50
$67,024$ 18,446
27,6981,110–
47,254
1,260
–
–
41
1,398
34
$ 49,987$ in millions

Lending Commitments
The firm’s commercial and warehouse financing lending
commitments are agreements to lend with fixed termination
dates and depend on the satisfaction of all contractual
conditions to borrowing. These commitments are presented
net of amounts syndicated to third parties. The totalcommitment amount does not necessarily reflect actual
future cash flows because the firm may syndicate portionsof these commitments. In addition, commitments can
expire unused or be reduced or cancelled at thecounterparty’s request. The firm also provides credit toconsumers by issuing credit card lines.

Goldman Sachs June 2021 Form 10-Q

66

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
The table below presents information about lending
commitments.
As of$ in millions

Held for investment
Held for saleAt fair value
Total

June
2021

December
2020$192,914
15,458
1,639$210,011$162,513
6,594
2,468
$171,575

In the table above:‰ Held for investment lending commitments are accounted
for at amortized cost. The carrying value of lending
commitments was a liability of $1.06 billion (including
allowance for credit losses of $822 million) as ofJune 2021 and $775 million (including allowance for
credit losses of $557 million) as of December 2020. The
estimated fair value of such lending commitments was aliability of $3.98 billion as of June 2021 and $4.05 billion
as of December 2020. Had these lending commitments
been carried at fair value and included in the fair value
hierarchy, $2.37 billion as of June 2021 and $2.43 billion
as of December 2020 would have been classified inlevel 2, and $1.61 billion as of June 2021 and$1.62 billion as of December 2020 would have beenclassified in level 3.
‰ Held for sale lending commitments are accounted for at
the lower of cost or fair value. The carrying value oflending commitments held for sale was a liability of$75 million as of June 2021 and $68 million as ofDecember 2020. The estimated fair value of such lending
commitments approximates the carrying value. Had theselending commitments been included in the fair value
hierarchy, they would have been primarily classified inlevel 3 as of both June 2021 and December 2020.
‰ Gains or losses related to lending commitments at fairvalue, if any, are generally recorded net of any fees inother principal transactions.
Commercial Lending. The firm’s commercial lending
commitments were primarily extended to investment-grade
corporate borrowers. Such commitments primarily
included $117.42 billion as of June 2021 and$110.31 billion as of December 2020, related torelationship lending activities (principally used for
operating and general corporate purposes) and$35.29 billion as of June 2021 and $15.81 billion as ofDecember 2020, related to other investment banking
activities (generally extended for contingent acquisition
financing and are often intended to be short-term in nature,
as borrowers often seek to replace them with other funding
sources). The firm also extends lending commitments inconnection with other types of corporate lending, as well as
commercial real estate financing. See Note 9 for further
information about funded loans.
67

Goldman Sachs June 2021 Form 10-Q

To mitigate the credit risk associated with the firm’scommercial lending activities, the firm obtains credit
protection on certain loans and lending commitments
through credit default swaps, both single-name and indexbased contracts, and through the issuance of credit-linked
notes. In addition, Sumitomo Mitsui Financial Group, Inc.
provides the firm with credit loss protection on certain
approved loan commitments.
Warehouse Financing. The firm provides financing toclients who warehouse financial assets. These arrangements
are secured by the warehoused assets, primarily consistingof residential real estate, consumer and corporate loans.
Credit Cards. The firm’s credit card lending commitments
included $26.57 billion as of June 2021 and $21.64 billion
as of December 2020 related to credit card lines issued by
the firm to consumers. These credit card lines arecancellable by the firm. Credit card commitments also
includes approximately $2.0 billion relating to the firm’s
commitment to acquire a credit card portfolio in
connection with its agreement, in January 2021, to form aco-branded credit card relationship with General Motors.
This amount represents the portfolio’s outstanding credit
card loan balance as of June 2021. However, the final
amount will depend on the outstanding balance of credit
card loans at the closing of the acquisition, which is
expected to occur by the first quarter of 2022.
Risk Participations
The firm also risk participates certain of its commercial
lending commitments to other financial institutions. In theevent of a risk participant’s default, the firm will be
responsible to fund the borrower.
Collateralized
Agreement
Commitments/
Collateralized Financing Commitments
Collateralized agreement commitments includes forward
starting resale and securities borrowing agreements, andcollateralized financing commitments includes forward
starting repurchase and secured lending agreements that
settle at a future date, generally within three business days.
Collateralized agreement commitments also includes
transactions where the firm has entered into commitments
to provide contingent financing to its clients andcounterparties through resale agreements. The firm’s
funding of these commitments depends on the satisfactionof all contractual conditions to the resale agreement andthese commitments can expire unused.
Letters of Credit
The firm has commitments under letters of credit issued byvarious banks which the firm provides to counterparties inlieu of securities or cash to satisfy various collateral andmargin deposit requirements.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
Investment Commitments
Investment commitments includes commitments to invest in
private equity, real estate and other assets directly andthrough funds that the firm raises and manages. Investmentcommitments included $1.73 billion as of June 2021 and$1.69 billion as of December 2020, related to commitments
to invest in funds managed by the firm. If thesecommitments are called, they would be funded at market
value on the date of investment.
Contingencies
Legal Proceedings. See Note 27 for information about
legal proceedings, including certain mortgage-related
matters.
Other Contingencies. In connection with the settlementagreement with the Residential Mortgage-Backed Securities
Working Group of the U.S. Financial Fraud Enforcement
Task Force, the firm agreed to provide $1.80 billion in
consumer relief, and the independent monitor overseeing
the firm’s compliance with its consumer relief obligations
validated that the firm has satisfied its obligations. Thisrelief was provided in the form of principal forgiveness forunderwater homeowners and distressed borrowers;
financing for construction, rehabilitation and preservationof affordable housing; and support for debt restructuring,
foreclosure prevention and housing quality improvement
programs, as well as land banks.
Guarantees
The table below presents derivatives that meet thedefinition of a guarantee, securities lending and clearing
guarantees and certain other financial guarantees.

$ in millions

Derivatives

Securities
lending andclearing

Other
financialguarantees

As of June 2021
Carrying Value of Net Liability $ 3,368
$
–
$ 227
Maximum Payout/Notional Amount by Period of Expiration
Remainder of 2021
$ 64,573$17,861$ 934
2022 - 2023
67,567–2,661
2024 - 2025
26,912–2,337
2026 - thereafter
33,403–363
Total$192,455$17,861$6,295
As of December 2020
Carrying Value of Net Liability$ 4,357$–$ 253
Maximum Payout/Notional Amount by Period of Expiration
2021$ 89,202$21,352$1,2632022 - 2023
56,204–3,304
2024 - 2025
23,389–2,787
2026 - thereafter
32,244–268
Total$201,039$21,352$7,622In the table above:‰ The maximum payout is based on the notional amount of
the contract and does not represent anticipated losses.
‰ Amounts exclude certain commitments to issue standby
letters of credit that are included in lending commitments.
See the tables in “Commitments” above for a summary of
the firm’s commitments.
‰ The carrying value for derivatives included derivative
assets of $1.52 billion as of June 2021 and $1.66 billion
as of December 2020, and derivative liabilities of$4.89 billion as of June 2021 and $6.02 billion as ofDecember 2020.
Derivative Guarantees. The firm enters into various
derivatives that meet the definition of a guarantee under
U.S. GAAP, including written equity and commodity put
options, written currency contracts and interest rate caps,
floors and swaptions. These derivatives are risk managed
together with derivatives that do not meet the definition ofa guarantee, and therefore the amounts in the table above
do not reflect the firm’s overall risk related to derivative
activities. Disclosures about derivatives are not required ifthey may be cash settled and the firm has no basis toconclude it is probable that the counterparties held theunderlying instruments at inception of the contract. The
firm has concluded that these conditions have been met for
certain large, internationally active commercial andinvestment bank counterparties, central clearing
counterparties, hedge funds and certain othercounterparties. Accordingly, the firm has not included suchcontracts in the table above. See Note 7 for information
about credit derivatives that meet the definition of aguarantee, which are not included in the table above.
Derivatives are accounted for at fair value and therefore thecarrying value is considered the best indication of payment/
performance risk for individual contracts. However, thecarrying values in the table above exclude the effect ofcounterparty and cash collateral netting.
Securities Lending and Clearing Guarantees. Securities
lending
andclearing
guarantees
includetheindemnifications and guarantees that the firm provides in
its capacity as an agency lender and in its capacity as asponsoring member of the Fixed Income Clearing
Corporation.

Goldman Sachs June 2021 Form 10-Q

68

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
As an agency lender, the firm indemnifies most of its
securities lending customers against losses incurred in theevent that borrowers do not return securities and thecollateral held is insufficient to cover the market value ofthe securities borrowed. The maximum payout of suchindemnifications was $17.86 billion as of June 2021 and$19.86 billion as of December 2020. Collateral held by thelendersinconnection
withsecurities
lending
indemnifications was $18.34 billion as of June 2021 and$20.39 billion as of December 2020. Because thecontractual nature of these arrangements requires the firm
to obtain collateral with a market value that exceeds thevalue of the securities lent to the borrower, there is minimal
performance risk associated with these indemnifications.
As a sponsoring member of the Government Securities
Division of the Fixed Income Clearing Corporation, thefirm guarantees the performance of its sponsored member
clients to the Fixed Income Clearing Corporation inconnection with certain resale and repurchase agreements.
To minimize potential losses on such guarantees, the firm
obtains a security interest in the collateral that thesponsored client placed with the Fixed Income Clearing
Corporation. Therefore, the risk of loss on such guarantees
is minimal. There were no amounts outstanding under theguarantee as of June 2021. As of December 2020, themaximum payout on this guarantee was $1.49 billion andthe related collateral held was $1.50 billion.
Other Financial Guarantees. In the ordinary course ofbusiness, the firm provides other financial guarantees of theobligations of third parties (e.g., standby letters of credit
and other guarantees to enable clients to complete
transactions and fund-related guarantees). These
guarantees represent obligations to make payments tobeneficiaries if the guaranteed party fails to fulfill its
obligation under a contractual arrangement with that
beneficiary. Other financial guarantees also include aguarantee that the firm has provided to the Government of
Malaysia that it will receive at least $1.4 billion in assets
and proceeds from assets seized by governmental
authorities around the world related to 1Malaysia
Development Berhad, a sovereign wealth fund in Malaysia(1MDB). The firm evaluates progress toward satisfying thisobligation based on the report that it receives on a semiannual basis, expected in February and August. Based on
the latest report as of February 2021, approximately$220 million in assets or proceeds from assets has beenreturned to the Government of Malaysia in connection withthis guarantee, which must be satisfied byAugust 18, 2025. Any amounts paid by the firm under thisguarantee would be subject to reimbursement in the eventthe assets or proceeds received by the Government of
Malaysia through August 18, 2028 exceeds $1.4 billion.
See Note 27 for further information about matters related
to 1MDB.
69

Goldman Sachs June 2021 Form 10-Q

Guarantees of Securities Issued by Trusts. The firm hasestablished trusts, including Goldman Sachs Capital I, the
APEX Trusts and other entities, for the limited purpose of
issuing securities to third parties, lending the proceeds tothe firm and entering into contractual arrangements withthe firm and third parties related to this purpose. The firm
does not consolidate these entities. See Note 14 for further
information about the transactions involving Goldman
Sachs Capital I and the APEX Trusts.
The firm effectively provides for the full and unconditional
guarantee of the securities issued by these entities. Timely
payment by the firm of amounts due to these entities under
the guarantee, borrowing, preferred stock and related
contractual arrangements will be sufficient to cover
payments due on the securities issued by these entities. No
subsidiary of Group Inc. guarantees the securities ofGoldman Sachs Capital I or the APEX Trusts.
Management believes that it is unlikely that any
circumstances will occur, such as nonperformance on thepart of paying agents or other service providers, that would
make it necessary for the firm to make payments related tothese entities other than those required under the terms ofthe guarantee, borrowing, preferred stock and related
contractual arrangements and in connection with certain
expenses incurred by these entities.
Indemnities and Guarantees of Service Providers. In theordinary course of business, the firm indemnifies andguarantees certain service providers, such as clearing andcustody agents, trustees and administrators, against specified
potential losses in connection with their acting as an agent of,or providing services to, the firm or its affiliates.
The firm may also be liable to some clients or other parties
for losses arising from its custodial role or caused by acts oromissions of third-party service providers, including
sub-custodians and third-party brokers. In certain cases, thefirm has the right to seek indemnification from these thirdparty service providers for certain relevant losses incurredby the firm. In addition, the firm is a member of payment,
clearing and settlement networks, as well as securities
exchanges around the world that may require the firm tomeet the obligations of such networks and exchanges in theevent of member defaults and other loss scenarios.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
In connection with the firm’s prime brokerage and clearing
businesses, the firm agrees to clear and settle on behalf of its
clients the transactions entered into by them with otherbrokerage firms. The firm’s obligations in respect of suchtransactions are secured by the assets in the client’s account,
as well as any proceeds received from the transactions
cleared and settled by the firm on behalf of the client. In
connection with joint venture investments, the firm may
issue loan guarantees under which it may be liable in theevent of fraud, misappropriation, environmental liabilities
and certain other matters involving the borrower.
The firm is unable to develop an estimate of the maximum
payout under these guarantees and indemnifications.
However, management believes that it is unlikely the firm
will have to make any material payments under thesearrangements, and no material liabilities related to theseguarantees and indemnifications have been recognized in
the consolidated balance sheets as of both June 2021 andDecember 2020.
Other
Representations,
Warranties
andIndemnifications. The firm provides representations andwarranties to counterparties in connection with a variety ofcommercial transactions and occasionally indemnifies themagainst potential losses caused by the breach of those
representations and warranties. The firm may also provide
indemnifications protecting against changes in or adverse
application of certain U.S. tax laws in connection withordinary-course transactions, such as securities issuances,borrowings or derivatives.
In addition, the firm may provide indemnifications to somecounterparties to protect them in the event additional taxes
are owed or payments are withheld, due either to a change
in or an adverse application of certain non-U.S. tax laws.
These indemnifications generally are standard contractual
terms and are entered into in the ordinary course ofbusiness. Generally, there are no stated or notionalamounts included in these indemnifications, and thecontingencies triggering the obligation to indemnify are notexpected to occur. The firm is unable to develop an estimateof the maximum payout under these guarantees andindemnifications. However, management believes that it isunlikely the firm will have to make any material payments
under these arrangements, and no material liabilities related
to these arrangements have been recognized in the
consolidated balance sheets as of both June 2021 andDecember 2020.

Guarantees of Subsidiaries. Group Inc. is the entity thatfully and unconditionally guarantees the securities issued by
GS Finance Corp., a wholly-owned finance subsidiary of
the firm. Group Inc. has guaranteed the payment
obligations of Goldman Sachs & Co. LLC (GS&Co.), GS
Bank USA and Goldman Sachs Paris Inc. et Cie, subject tocertain exceptions. In addition, Group Inc. has provided
guarantees to Goldman Sachs International (GSI) andGoldman Sachs Bank Europe SE (GSBE) related toagreements that each entity has entered into with certain of
its counterparties. Furthermore, Group Inc. provided aguarantee to GS Bank USA in 2020 related to securities that
GS Bank USA acquired from certain affiliated funds ofGroup Inc. and loans and lending commitments that GS
Bank USA acquired from certain subsidiaries of Group Inc.
As of June 2021, none of the securities acquired from theaffiliated funds were outstanding.
Group Inc. guarantees many of the obligations of its otherconsolidated subsidiaries on a transaction-by-transaction
basis, as negotiated with counterparties. Group Inc. isunable to develop an estimate of the maximum payout
under its subsidiary guarantees. However, because theseobligations are also obligations of consolidated
subsidiaries, Group Inc.’s liabilities as guarantor are notseparately disclosed.
Note 19.

Shareholders’ Equity
Common Equity
As of both June 2021 and December 2020, the firm had
4.00 billion authorized shares of common stock and
200 million authorized shares of nonvoting common stock,each with a par value of $0.01 per share.
The firm’s share repurchase program is intended to help
maintain the appropriate level of common equity. The
share repurchase program is effected primarily throughregular open-market purchases (which may include
repurchase plans designed to comply with Rule 10b5-1 andaccelerated share repurchases), the amounts and timing of
which are determined primarily by the firm’s current andprojected capital position, and capital deployment
opportunities, but which may also be influenced by generalmarket conditions and the prevailing price and trading
volumes of the firm’s common stock. The firm suspended
stock repurchases during the first quarter of 2020 and,consistent with the FRB’s requirement for all large bankholding companies (BHCs), extended the suspension ofstock repurchases through the fourth quarter of 2020. The
firm resumed stock repurchases in the first quarter of 2021.

Goldman Sachs June 2021 Form 10-Q

70

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
The table below presents information about common stock
repurchases.
Three Months
Ended Junein millions, except per share amounts

Six Months
Ended June

2021 2020

Common share repurchases
2.8
Average cost per share$350.90 $Total cost of common share repurchases $ 1,000 $

2021

2020

–
11.6
8.2
– $320.12 $236.35– $ 3,700 $ 1,928

Pursuant to the terms of certain share-based compensationplans, employees may remit shares to the firm or the firm
may cancel share-based awards to satisfy statutory
employee tax withholding requirements. Under these plans,
during the six months ended June 2021, 1,830 shares wereremitted with a total value of $0.5 million and the firm
cancelled 3.3 million share-based awards with a total valueof $969 million.
The table below presents common stock dividends declared.
Three Months
Ended June

Six Months
Ended June

2021

2021

2020

$1.25 $2.50$2.50

Dividends declared per common share $1.25

2020

On July 12, 2021, the Board of Directors of Group Inc.
(Board) increased the quarterly dividend to $2.00 per
common share from $1.25 per common share. The
dividend will be paid on September 29, 2021 to commonshareholders of record on September 1, 2021.
Preferred Equity
The tables below present information about the perpetual
preferred stock issued and outstanding as of June 2021.

SeriesSharesAuthorized

SharesIssuedSharesOutstanding

Depositary Shares
Per Share

A
C
D
E
F
J
K
O
P
Q
R
S
T
Total

50,00025,00060,00017,5005,000
46,00032,20026,00066,00020,00024,00014,00027,000412,700

30,0008,000
54,0007,667
1,615
40,00028,00026,00060,00020,00024,00014,00027,000340,282

29,9998,000
53,9997,667
1,615
40,00028,00026,00060,00020,00024,00014,00027,000340,280

1,000
1,000
1,000
N/A
N/A
1,000
1,000
25
25
25
25
25
25

71

Goldman Sachs June 2021 Form 10-Q

Series

Earliest Redemption Date

Liquidation
Preference

A
C
D
E
F
J
K
O
P
Q
R
S
T
Total

Currently redeemable
Currently redeemable
Currently redeemable
Currently redeemable
Currently redeemable
May 10, 2023
May 10, 2024
November 10, 2026
November 10, 2022
August 10, 2024
February 10, 2025
February 10, 2025
May 10, 2026

$ 25,000$ 25,000$ 25,000$100,000$100,000$ 25,000$ 25,000$ 25,000$ 25,000$ 25,000$ 25,000$ 25,000$ 25,000

Redemption
Value($ in millions)

$ 750
200
1,350
767
161
1,000
700
650
1,500
500
600
350
675
$9,203In the tables above:‰ All shares have a par value of $0.01 per share and, whereapplicable, each share is represented by the specified
number of depositary shares.
‰ The earliest redemption date represents the date on which
each share of non-cumulative Preferred Stock isredeemable at the firm’s option.
‰ Prior to redeeming preferred stock, the firm must receive
approval from the FRB.
‰ In April 2021, the firm issued 27,000 shares of Series T
3.80% Fixed-Rate Reset Non-Cumulative Preferred
Stock (Series T Preferred Stock).
‰ The redemption price per share for Series A through F and
Series Q through T Preferred Stock is the liquidationpreference plus declared and unpaid dividends. The
redemption price per share for Series J through P
Preferred Stock is the liquidation preference plus accrued
and unpaid dividends. Each share of Series E and Series F
Preferred Stock is redeemable at the firm’s option, subject
to certain covenant restrictions governing the firm’s
ability to redeem the preferred stock without issuingcommon stock or other instruments with equity-likecharacteristics. See Note 14 for information about the
replacement capital covenants applicable to the Series E
and Series F Preferred Stock.
‰ All series of preferred stock are pari passu and have apreference over the firm’s common stock on liquidation.
‰ The firm’s ability to declare or pay dividends on, orpurchase, redeem or otherwise acquire, its common stock
is subject to certain restrictions in the event that the firm
fails to pay or set aside full dividends on the preferredstock for the latest completed dividend period.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
In July 2021, the firm issued 30,000 shares of Series U
3.65% Fixed-Rate Reset Non-Cumulative Preferred Stock(Series U Preferred Stock). Each share of Series U Preferred
Stock issued and outstanding has a liquidation preferenceof $25,000, is represented by 25 depositary shares and isredeemable at the firm’s option beginning August 10, 2026
at a redemption price equal to $25,000 plus declared andunpaid dividends. Dividends on Series U Preferred Stock, if
declared, are payable semi-annually at (i) 3.65% per annum
from the issuance date to, but excluding, August 10, 2026
and, thereafter, (ii) 2.915% per annum plus the five-year
treasury rate.
In the second quarter of 2021, the firm redeemed all
outstanding shares of its Series N 6.30% Non-Cumulative
Preferred Stock (Series N Preferred Stock) with aredemption value of $675 million ($25,000 per share), plus
accrued and unpaid dividends on May 19, 2021. The
difference between the redemption value and net carrying
value was $20 million, which was recorded as an addition
to preferred stock dividends in the second quarter of 2021.
In the first quarter of 2021, the firm redeemed all
outstanding shares of its Series M 5.375%
Fixed-to-Floating Rate Non-Cumulative Preferred Stock(Series M Preferred Stock) with a redemption value of$2 billion ($25,000 per share), plus accrued and unpaid
dividends. The difference between the redemption value
and net carrying value was $21 million, which wasrecorded as an addition to preferred stock dividends in thefirst quarter of 2021.
In 2020, the firm redeemed the remaining 14,000
outstanding shares of its Series L 5.70% Non-Cumulative
Preferred Stock (Series L Preferred Stock) with aredemption value of $350 million ($25,000 per share), plus
accrued and unpaid dividends. The difference between theredemption value and net carrying value was $1 million,
which was recorded as an addition to preferred stock
dividends in 2020.

The table below presents the dividend rates of perpetual
preferred stock as of June 2021.
SeriesPer Annum Dividend Rate

A
C
D
E
F

3 month LIBOR + 0.75%, with floor of 3.75%, payable quarterly
3 month LIBOR + 0.75%, with floor of 4.00%, payable quarterly
3 month LIBOR + 0.67%, with floor of 4.00%, payable quarterly
3 month LIBOR + 0.7675%, with floor of 4.00%, payable quarterly
3 month LIBOR + 0.77%, with floor of 4.00%, payable quarterly
5.50% to, but excluding, May 10, 2023;
J
3 month LIBOR + 3.64% thereafter, payable quarterly
6.375% to, but excluding, May 10, 2024;K
3 month LIBOR + 3.55% thereafter, payable quarterly
5.30%, payable semi-annually, from issuance date to, but excluding,O
November 10, 2026; 3 month LIBOR + 3.834%, payable quarterly, thereafter
5.00%, payable semi-annually, from issuance date to, but excluding,P
November 10, 2022; 3 month LIBOR + 2.874%, payable quarterly, thereafter
5.50%, payable semi-annually, from issuance date to, but excluding,Q
August 10, 2024; 5 year treasury rate + 3.623%, payable semi-annually, thereafter
4.95%, payable semi-annually, from issuance date to, but excluding,R
February 10, 2025; 5 year treasury rate + 3.224%, payable semi-annually, thereafter
4.40%, payable semi-annually, from issuance date to, but excluding,S
February 10, 2025; 5 year treasury rate + 2.85%, payable semi-annually thereafter
3.80%, payable semi-annually, from issuance date to, but excluding,T
May 10, 2026; 5 year treasury rate + 2.969%, payable semi-annually, thereafter

In the table above, dividends on each series of preferredstock are payable in arrears for the periods specified.
The table below presents preferred stock dividends
declared.
2021
Seriesper share

Three Months Ended JuneA
$ 231.77
C$ 247.22
D$ 247.22
E$1,022.22
F$1,022.22
J$ 343.75
K$ 398.44
M$–N$ 393.75
O$ 662.50
P$ 625.00
Total
Six Months Ended JuneA
$ 471.35
C$ 502.78
D$ 502.78
E$2,022.22
F$2,022.22
J$ 687.50
K$ 796.88
L
$
–
M
$
–
N
$ 787.50
O$ 662.50
P$ 625.00
Q$ 687.50
R$ 618.75
S$ 550.00
Total

2020

$ in millions

per share$ in millions

$

7
2
13
8
1
13
11
–
9
17
38
$119

$ 236.98$ 252.78$ 252.78$1,011.11$1,011.11$ 343.75$ 398.44$ 671.88$ 393.75$ 662.50$ 625.00

$

$ 14
4
27
15
3
27
22
–
–
19
17
38
14
15
8
$223

$ 471.36$ 502.78$ 502.78$2,022.22$2,022.22$ 687.50$ 796.88$ 361.54$ 671.88$ 787.50$ 662.50$ 625.00$ 889.93
$
–
$
–

$ 14
4
27
15
3
28
22
4
54
21
17
38
18
–
–
$265

Goldman Sachs June 2021 Form 10-Q

7
2
14
8
1
14
11
54
10
17
38
$176

72

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
On July 7, 2021, Group Inc. declared dividends of$239.58 per share of Series A Preferred Stock, $255.56 pershare of Series C Preferred Stock, $255.56 per share ofSeries D Preferred Stock, $343.75 per share of Series J
Preferred Stock, $398.44 per share of Series K Preferred
Stock, $687.50 per share of Series Q Preferred Stock,$618.75 per share of Series R Preferred Stock, and$550.00 per share of Series S Preferred Stock to be paid on
August 10, 2021 to preferred shareholders of record on
July 26, 2021. In addition, the firm declared dividends of$1,022.22 per share of Series E Preferred Stock and$1,022.22 per share of Series F Preferred Stock to be paid
on September 1, 2021 to preferred shareholders of recordon August 17, 2021.
Accumulated Other Comprehensive Income/(Loss)
The table below presents changes in accumulated othercomprehensive income/(loss), net of tax, by type.

$ in millions

Other
comprehensive
income/(loss)
Beginning
adjustments,
balance
net of tax

Three Months Ended June 2021
Currency translation$ (696)
Debt valuation adjustment(852)
Pension and postretirement liabilities(361)
Available-for-sale securities
(165)
Total
$(2,074)
Three Months Ended June 2020
Currency translation$ (633)
Debt valuation adjustment
2,342
Pension and postretirement liabilities(335)
Available-for-sale securities
563
Total
$ 1,937
Six Months Ended June 2021
Currency translation$ (696)
Debt valuation adjustment(833)
Pension and postretirement liabilities(368)
Available-for-sale securities
463
Total
$(1,434)
Six Months Ended June 2020
Currency translation$ (616)
Debt valuation adjustment(572)
Pension and postretirement liabilities(342)
Available-for-sale securities
46
Total$(1,484)

73

Goldman Sachs June 2021 Form 10-Q$$

Endingbalance(16) $ (712)
117
(735)
–
(361)
84
(81)
185 $(1,889)$(44) $ (677)(2,218)
124
(4)
(339)
(12)
551
$(2,278) $ (341)$(16) $ (712)
98
(735)
7
(361)
(544)
(81)
$ (455) $(1,889)$(61) $ (677)
696
124
3
(339)
505
551
$ 1,143 $ (341)

Note 20.

Regulation and Capital Adequacy
The FRB is the primary regulator of Group Inc., a BHC
under the U.S. Bank Holding Company Act of 1956 and afinancial holding company under amendments to this Act.
The firm is subject to consolidated regulatory capitalrequirements which are calculated in accordance with theregulations of the FRB (Capital Framework).
The capital requirements are expressed as risk-based capitaland leverage ratios that compare measures of regulatory
capital to risk-weighted assets (RWAs), average assets andoff-balance sheet exposures. Failure to comply with thesecapital requirements could result in restrictions being
imposed by the firm’s regulators and could limit the firm’s
ability to repurchase shares, pay dividends and makecertain discretionary compensation payments. The firm’s
capital levels are also subject to qualitative judgments by
the regulators about components of capital, risk weightingsand other factors. Furthermore, certain of the firm’s
subsidiaries are subject to separate regulations and capitalrequirements.
Capital Framework
The regulations under the Capital Framework are largely
based on the Basel Committee on Banking Supervision’s(Basel Committee) capital framework for strengthening
international capital standards (Basel III) and also
implement certain provisions of the Dodd-Frank Act.
Under the Capital Framework, the firm is an “Advanced
approach” banking organization and has been designatedas a global systemically important bank (G-SIB).
The Capital Framework includes the minimum risk-based
capital and the capital conservation buffer requirements.
The buffer must consist entirely of capital that qualifies as
Common Equity Tier 1 (CET1) capital.
The firm calculates its CET1 capital, Tier 1 capital andTotal capital ratios in accordance with both theStandardized and Advanced Capital Rules. Each of theratios calculated under the Standardized and Advanced
Capital Rules must meet its respective capital requirements.
Under the Capital Framework, the firm is also subject toleverage requirements which consist of a minimum Tier 1
leverage ratio and a minimum supplementary leverage ratio(SLR), as well as the SLR buffer.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
Consolidated Regulatory Capital Requirements
Risk-Based Capital Ratios. The table below presents therisk-based capital requirements as of both June 2021 andDecember 2020.

CET1 capital ratio
Tier 1 capital ratio
Total capital ratio

Standardized

Advanced

13.6%
15.1%
17.1%

9.5%
11.0%
13.0%

In the table above:‰ Under both the Standardized and Advanced Capital
Rules, the CET1 capital ratio requirement includes aminimum of 4.5%, the Tier 1 capital ratio requirement
includes a minimum of 6.0% and the Total capital ratio
requirement includes a minimum of 8.0%. These
requirements also include the capital conservation buffer
requirements, consisting of the G-SIB surcharge of 2.5%
(Method 2) and the countercyclical capital buffer, which
the FRB has set to zero percent. In addition, the capitalconservation buffer requirements include the stresscapital buffer (SCB) of 6.6% under the Standardized
Capital Rules and a buffer of 2.5% under the Advanced
Capital Rules.
‰ The G-SIB surcharge is updated annually based on
financial data from the prior year and is generally
applicable for the following year. The G-SIB surcharge iscalculated using two methodologies, the higher of whichis reflected in the firm’s risk-based capital requirements.
The first calculation (Method 1) is based on the BaselCommittee’s methodology which, among other factors,
relies upon measures of the size, activity and complexityof each G-SIB. The second calculation (Method 2) uses
similar inputs but includes a measure of reliance on shortterm wholesale funding.
Based on the firm’s 2021 Comprehensive Capital Analysis
and Review submission, the FRB has set the SCB for thefirm at 6.4% for the period from October 1, 2021 throughSeptember 30, 2022. As a result, beginning on
October 1, 2021, the firm’s Standardized requirements willbe 13.4% for the CET1 capital ratio, 14.9% for the Tier 1
capital ratio and 16.9% for the Total capital ratio.

The table below presents information about risk-based
capital ratios.
$ in millions

Standardized

Advanced

As of June 2021
CET1 capital
Tier 1 capital
Tier 2 capital
Total capital
RWAs$ 89,440$ 98,514$ 14,965$113,479$621,335$ 89,440$ 98,514$ 12,747$111,261$667,143

CET1 capital ratio
Tier 1 capital ratio
Total capital ratio

14.4%
15.9%
18.3%

13.4%
14.8%
16.7%

$ 81,641$ 92,730$ 15,424$108,154$554,162$ 81,641$ 92,730$ 13,279$106,009$609,750

14.7%
16.7%
19.5%

13.4%
15.2%
17.4%

As of December 2020
CET1 capital
Tier 1 capital
Tier 2 capital
Total capital
RWAs
CET1 capital ratio
Tier 1 capital ratio
Total capital ratio

In the table above, as permitted by the FRB, the firm has
elected to temporarily delay the estimated effects ofadopting CECL on regulatory capital until January 2022
and to subsequently phase-in the effects throughJanuary 2025. In addition, during 2020 and 2021, the firm
has elected to increase regulatory capital by 25% of theincrease in the allowance for credit losses since
January 1, 2020, as permitted by the rules issued by the
FRB. The impact of this increase will also be phased in over
the three-year transition period. Reflecting the full impactof CECL as of both June 2021 and December 2020 would
not have had a material impact on the firm’s capital ratios.
Leverage Ratios. The table below presents the leverage
requirements.
Requirements

Tier 1 leverage ratio
SLR

4.0%
5.0%

In the table above, the SLR requirement of 5% includes aminimum of 3% and a 2% buffer applicable to G-SIBs.
The table below presents information about leverage ratios.
For the Three Months
Ended or as of
June
2021

$ in millions

Tier 1 capital$

Average total assets
Deductions from Tier 1 capital
Average adjusted total assets
Impact of SLR temporary amendment
Average off-balance sheet exposures
Total leverage exposure$1,358,068(5,003)
1,353,065–
424,376$1,777,441$1,152,785(4,948)1,147,837(202,748)
387,848$1,332,937

7.3%
5.5%

8.1%
7.0%

Tier 1 leverage ratio
SLR

98,514

December
2020$

92,730Goldman Sachs June 2021 Form 10-Q

74

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
In the table above:

In the table above:‰ Average total assets represents the average daily assets forthe quarter adjusted for the impact of CECL transition.

‰ Impact of CECL transition represents the impact of
adoption as of January 1, 2020 and the impact ofincreasing regulatory capital by 25% of the increase inallowance for credit losses since January 1, 2020. The
allowance for credit losses within Standardized andAdvanced Tier 2 capital also reflects the impact of theseadjustments.

‰ Impact of SLR temporary amendment represented theexclusion of average holdings of U.S. Treasury securities
and average deposits at the Federal Reserve as permitted
by the FRB. The impact of this temporary amendment
was an increase in the firm’s SLR by approximately 1.0
percentage points for the three months ended
December 2020. Effective April 1, 2021, the amendment
permitting this exclusion expired and, as a result, the SLR
for the three months ended June 2021 did not reflect the
impact of the temporary amendment to exclude theholdings of such assets.
‰ Average off-balance sheet exposures represents themonthly average and consists of derivatives, securities
financing transactions, commitments and guarantees.
‰ Tier 1 leverage ratio is calculated as Tier 1 capital divided
by average adjusted total assets.
‰ SLR is calculated as Tier 1 capital divided by total
leverage exposure.
Risk-Based Capital. The table below presents information
about risk-based capital.
As of
June
2021

December
2020

Common shareholders’ equity
Impact of CECL transition
Deduction for goodwill
Deduction for identifiable intangible assets
Other adjustments
CET1 capitalPreferred stock
Deduction for investments in covered funds
Other adjustments
Tier 1 capital$ 92,687
1,041(3,657)(504)(127)
89,440
9,203
(126)
(3)
$ 98,514$ 84,729
1,126(3,652)(601)
39
81,641
11,203(106)(8)$ 92,730

Standardized Tier 2 and Total capital
Tier 1 capital
Qualifying subordinated debt
Junior subordinated debt
Allowance for credit losses
Other adjustments
Standardized Tier 2 capitalStandardized Total capital$ 98,514
12,077
94
2,841
(47)
14,965$113,479$ 92,730
12,196
188
3,095
(55)
15,424$108,154

Advanced Tier 2 and Total capital
Tier 1 capitalStandardized Tier 2 capital
Allowance for credit losses
Other adjustments
Advanced Tier 2 capital
Advanced Total capital$ 98,514
14,965(2,841)623
12,747$111,261$ 92,730
15,424(3,095)
950
13,279$106,009$ in millions

75

Goldman Sachs June 2021 Form 10-Q

‰ Deduction for goodwill was net of deferred tax liabilities
of $675 million as of June 2021 and $680 million as ofDecember 2020.
‰ Deduction for identifiable intangible assets was net ofdeferred tax liabilities of $19 million as of June 2021 and$29 million as of December 2020.
‰ Deduction for investments in covered funds represents thefirm’s aggregate investments in applicable covered funds,
excluding investments that are subject to an extended
conformance period. See Note 8 for further information
about the Volcker Rule.
‰ Other adjustments within CET1 capital and Tier 1 capital
primarily include credit valuation adjustments onderivative liabilities, the overfunded portion of the firm’s
defined benefit pension plan obligation net of associateddeferred tax liabilities, disallowed deferred tax assets,
debt valuation adjustments and other required credit riskbased deductions. Other adjustments within Advanced
Tier 2 capital include eligible credit reserves.
‰ Qualifying subordinated debt is subordinated debt issued
by Group Inc. with an original maturity of five years or
greater. The outstanding amount of subordinated debt
qualifying for Tier 2 capital is reduced upon reaching aremaining maturity of five years. See Note 14 for further
information about the firm’s subordinated debt.
‰ Junior subordinated debt is debt issued to a Trust. As ofJune 2021, 10% of this debt was included in Tier 2
capital and 90% was phased out of regulatory capital. As
of December 2020, 20% of this debt was included inTier 2 capital and 80% was phased out of regulatory
capital. Junior subordinated debt is reduced by theamount of Trust Preferred securities purchased by thefirm and will be fully phased out of Tier 2 capital by2022. See Note 14 for further information about thefirm’s junior subordinated debt and Trust Preferred
securities.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
The table below presents changes in CET1 capital, Tier 1
capital and Tier 2 capital.
$ in millions

Six Months Ended June 2021
CET1 capital
Beginning balance
Change in:Common shareholders’ equity
Impact of CECL transition
Deduction for goodwill
Deduction for identifiable intangible assets
Other adjustments
Ending balance
Tier 1 capital
Beginning balance
Change in:
CET1 capital
Deduction for investments in covered funds
Preferred stock
Other adjustments
Ending balance
Tier 2 capital
Beginning balance
Change in:
Qualifying subordinated debt
Junior subordinated debt
Allowance for credit losses
Other adjustments
Ending balance
Total capitalYear Ended December 2020
CET1 capital
Beginning balance
Change in:Common shareholders’ equity
Impact of CECL transition
Deduction for goodwill
Deduction for identifiable intangible assets
Other adjustments
Ending balance
Tier 1 capital
Beginning balance
Change in:
CET1 capital
Deduction for investments in covered funds
Other adjustments
Ending balance
Tier 2 capital
Beginning balance
Change in:
Qualifying subordinated debt
Junior subordinated debt
Allowance for credit losses
Other adjustments
Ending balance
Total capital

RWAs. RWAs are calculated in accordance with both theStandardized and Advanced Capital Rules.

$ 81,641 $ 81,641

Credit Risk
Credit RWAs are calculated based on measures of
exposure, which are then risk weighted under theStandardized and Advanced Capital Rules:

7,958
7,958
(85)
(85)
(5)
(5)
97
97
(166)
(166)
$ 89,440 $ 89,440‰ The Standardized Capital Rules apply prescribed riskweights, which depend largely on the type ofcounterparty. The exposure measure for derivatives andsecurities financing transactions are based on specificformulas which take certain factors into consideration.

Standardized

Advanced$ 92,730 $ 92,730
7,799
(20)
(2,000)5
98,5147,799(20)(2,000)5
98,514

15,424

13,279

(119)
(119)
(94)
(94)
(254)
–
8
(319)
14,965
12,747$113,479 $111,261$ 74,850 $ 74,850
5,667
5,667
1,126
1,126
(123)
(123)
3
3
118
118
$ 81,641 $ 81,641‰ Under the Advanced Capital Rules, the firm computes
risk-weights for wholesale and retail credit exposures inaccordance with the Advanced Internal Ratings-Basedapproach. The exposure measures for derivatives andsecurities financing transactions are computed utilizing
internal models.
‰ For both Standardized and Advanced credit RWAs, therisk-weights for securitizations and equities are based on
specific required formulaic approaches.
Market Risk
RWAs for market risk in accordance with the Standardized
and Advanced Capital Rules are generally consistent.
Market RWAs are calculated based on measures of
exposure which include the following:‰ Value-at-Risk (VaR) is the potential loss in value of
trading assets and liabilities, as well as certain
investments, loans, and other financial assets andliabilities accounted for at fair value, due to adverse
market movements over a defined time horizon with a
specified confidence level.

$ 85,440 $ 85,440
6,791
504
(5)
92,730

6,791
504
(5)
92,73014,925

13,473

(651)
(651)
(96)
(96)
1,293
–
(47)
553
15,424
13,279$108,154 $106,009

Goldman Sachs June 2021 Form 10-Q

76

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
For both risk management purposes and regulatory capital
calculations, the firm uses a single VaR model which
captures risks, including those related to interest rates,
equity prices, currency rates and commodity prices.
However, VaR used for risk management purposes differsfrom VaR used for regulatory capital requirements(regulatory VaR) due to differences in time horizons,confidence levels and the scope of positions on which VaR
is calculated. For risk management purposes, a 95%
one-day VaR is used, whereas for regulatory capitalrequirements, a 99% 10-day VaR is used to determineMarket RWAs and a 99% one-day VaR is used todetermine regulatory VaR exceptions. In addition, the daily
net revenues used to determine risk management VaR
exceptions (i.e., comparing the daily net revenues to the
VaR measure calculated as of the end of the prior businessday) include intraday activity, whereas the Capital
Framework requires that intraday activity be excluded fromdaily net revenues when calculating regulatory VaR
exceptions. Intraday activity includes bid/offer net
revenues, which are more likely than not to be positive by
their nature. As a result, there may be differences in thenumber of VaR exceptions and the amount of daily net
revenues calculated for regulatory VaR compared to theamounts calculated for risk management VaR.
The firm’s positional losses observed on a single day did notexceed its 99% one-day regulatory VaR during the six
months ended June 2021 and exceeded its 99% one-day
regulatory VaR on six occasions during 2020 (all of which
occurred during March 2020 and, as permitted by the FRB,
did not have any impact on the firm’s VaR multiplier used
to calculate Market RWAs);‰ Stressed VaR is the potential loss in value of trading assets
and liabilities, as well as certain investments, loans, andother financial assets and liabilities accounted for at fairvalue, during a period of significant market stress;‰ Incremental risk is the potential loss in value of
non-securitized positions due to the default or credit
migration of issuers of financial instruments over a
one-year time horizon;‰ Comprehensive risk is the potential loss in value, due toprice risk and defaults, within the firm’s credit correlation
positions; and‰ Specific risk is the risk of loss on a position that could
result from factors other than broad market movements,
including event risk, default risk and idiosyncratic risk.
The standardized measurement method is used todetermine specific risk RWAs, by applying supervisorydefined risk-weighting factors after applicable netting is
performed.

77

Goldman Sachs June 2021 Form 10-Q

Operational Risk
Operational RWAs are only required to be included underthe Advanced Capital Rules. The firm utilizes an internalrisk-based model to quantify Operational RWAs.
The table below presents information about RWAs.
$ in millions

As of June 2021
Credit RWAs
Derivatives
Commitments, guarantees and loans
Securities financing transactions
Equity investments
Other
Total Credit RWAs
Market RWAs
Regulatory VaRStressed VaR
Incremental risk
Comprehensive risk
Specific risk
Total Market RWAs
Total Operational RWAs
Total RWAs
As of December 2020
Credit RWAs
Derivatives
Commitments, guarantees and loans
Securities financing transactions
Equity investments
Other
Total Credit RWAs
Market RWAs
Regulatory VaRStressed VaR
Incremental risk
Comprehensive risk
Specific risk
Total Market RWAs
Total Operational RWAs
Total RWAs

Standardized

Advanced$128,830
197,151
77,78755,57871,705531,051$110,132
168,796
15,36362,00589,350445,646

15,771
51,917
7,704
2,164
12,72890,284–$621,335

15,771
51,917
7,704
2,164
12,72890,284
131,213$667,143$120,292
176,501
71,427
46,94470,274
485,438$111,691
151,587
16,56849,26883,599412,713

14,913
31,978
7,882
1,758
12,19368,724–$554,162

14,913
31,978
7,882
1,758
12,19368,724
128,313$609,750

In the table above:‰ Securities financing transactions represents resale andrepurchase agreements and securities borrowed andloaned transactions.
‰ Other includes receivables, certain debt securities, cash
and cash equivalents, and other assets.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
The table below presents changes in RWAs.
$ in millions

Six Months Ended June 2021
RWAs
Beginning balance
Credit RWAs
Change in:
Derivatives
Commitments, guarantees and loans
Securities financing transactions
Equity investments
Other
Change in Credit RWAs
Market RWAs
Change in:Regulatory VaRStressed VaR
Incremental risk
Comprehensive risk
Specific risk
Change in Market RWAs
Change in Operational RWAs
Ending balanceYear Ended December 2020
RWAs
Beginning balance
Credit RWAs
Change in:
Derivatives
Commitments, guarantees and loans
Securities financing transactions
Equity investments
Other
Change in Credit RWAs
Market RWAs
Change in:Regulatory VaRStressed VaR
Incremental risk
Comprehensive risk
Specific risk
Change in Market RWAs
Change in Operational RWAs
Ending balanceStandardized

Advanced$554,162$609,750

8,538
20,650
6,360
8,634
1,431
45,613(1,559)17,209(1,205)
12,737
5,751
32,933858
19,939
(178)
406
535
21,560–$621,335

858
19,939
(178)
406
535
21,5602,900$667,143$563,575$544,653(614)(3,239)5,560(9,870)(5,386)(13,549)

39,06017,131
2,734(12,624)
5,333
51,634

5,980
1,067
3,574
365
(6,850)4,136–$554,162

5,980
1,067
3,574
567
(6,850)4,338
9,125$609,750

RWAs Rollforward Commentary
Six Months Ended June 2021. Standardized Credit
RWAs as of June 2021 increased by $45.61 billion
compared with December 2020, primarily reflecting an
increase in commitments, guarantees and loans (principally
due to increased lending activity), an increase in derivatives(principally due to increased exposures), an increase inequity investments (principally due to increased exposures
as a result of gains, partially offset by sales), and an increase
in securities financing transactions (principally due toincreased exposures). Standardized Market RWAs as ofJune 2021 increased by $21.56 billion compared with
December 2020, primarily reflecting an increase in stressed
VaR (principally due to increased exposures to interest
rates).

Advanced Credit RWAs as of June 2021 increased by$32.93 billion compared with December 2020, primarilyreflecting an increase in commitments, guarantees andloans (principally due to increased lending activity), an
increase in equity investments (principally due to increased
exposures as a result of gains, partially offset by sales) andan increase in other credit RWAs (principally due toincreased corporate debt, and customer and otherreceivables exposures). Advanced Market RWAs as ofJune 2021 increased by $21.56 billion compared with
December 2020, primarily reflecting an increase in stressed
VaR (principally due to increased exposures to interest
rates).
Year Ended December 2020. Standardized Credit RWAs
as of December 2020 decreased by $13.55 billion comparedwith December 2019, primarily reflecting a decrease inequity investments (principally due to the sale of certain
equity positions) and a decrease in other (principally due todecreased receivables as a result of changes in risk
measurements). These decreases were partially offset by anincrease in securities financing transactions (principally due
to increased funding exposures). Standardized Market
RWAs as of December 2020 increased by $4.14 billion
compared with December 2019, primarily reflecting an
increase in regulatory VaR (principally due to increased
market volatility) and an increase in incremental risk(principally due to increased exposures in equities held formarket-making purposes). These increases were partially
offset by a decrease in specific risk (principally due tochanges in risk measurements on certain exposures).
Advanced Credit RWAs as of December 2020 increased by$51.63 billion compared with December 2019, primarilyreflecting an increase in derivatives (principally due to theimpact of higher levels of volatility and counterparty creditrisk) and an increase in commitments, guarantees and loans(principally due to increased lending activity). These
increases were partially offset by a decrease in equity
investments (principally due to the sale of certain equity
positions). Advanced Market RWAs as of December 2020
increased by $4.34 billion compared with December 2019,
primarily reflecting an increase in regulatory VaR(principally due to increased market volatility) and anincrease in incremental risk (principally due to increased
exposures in equities held for market-making purposes).
These increases were partially offset by a decrease in
specific risk (principally due to changes in risk
measurements on certain exposures). Advanced
Operational RWAs as of December 2020 increased by$9.13 billion compared with December 2019. The vast
majority of this increase was associated with litigation andregulatory proceedings.

Goldman Sachs June 2021 Form 10-Q

78

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)Bank Subsidiaries
Regulatory Capital Ratios. GS Bank USA, the firm’s
primary U.S. bank subsidiary, is an FDIC-insured, NewYork State-chartered bank and a member of the Federal
Reserve System, is supervised and regulated by the FRB, theFDIC, the New York State Department of Financial
Services (NYDFS) and the Consumer Financial Protection
Bureau, and is subject to regulatory capital requirementsthat are calculated under the Capital Framework. GS Bank
USA is an Advanced approach banking organization under
the Capital Framework.
The Capital Framework includes the minimum risk-based
capital and the capital conservation buffer requirements(consisting of a 2.5% buffer and the countercyclical capital
buffer). The buffer must consist entirely of capital that
qualifies as CET1 capital. In addition, the Capital
Framework includes the leverage ratio requirement.
GS Bank USA is required to calculate the CET1 capital,
Tier 1 capital and Total capital ratios in accordance withboth the Standardized and Advanced Capital Rules. The
lower of each risk-based capital ratio under theStandardized and Advanced Capital Rules is the ratio
against which GS Bank USA’s compliance with its riskbased capital requirements is assessed. In addition, under
the regulatory framework for prompt corrective action
applicable to GS Bank USA, in order to meet thequantitative requirements for a “well-capitalized”
depository institution, GS Bank USA must also meet the“well-capitalized” requirements in the table below. GS
Bank USA’s capital levels and prompt corrective action
classification are also subject to qualitative judgments by
the regulators about components of capital, risk weightingsand other factors. Failure to comply with the capitalrequirements, including a breach of the buffers described
below, could result in restrictions being imposed by theregulators.
The table below presents GS Bank USA’s risk-based capital,
leverage and “well-capitalized” requirements.

Requirements“Well-capitalized”
Requirements

Risk-based capital requirements
CET1 capital ratio
Tier 1 capital ratio
Total capital ratio

7.0%
8.5%
10.5%

6.5%
8.0%
10.0%

Leverage requirements
Tier 1 leverage ratio
SLR

4.0%
3.0%

5.0%
6.0%

79

Goldman Sachs June 2021 Form 10-Q

In the table above:‰ The CET1 capital ratio requirement includes a minimumof 4.5%, the Tier 1 capital ratio requirement includes aminimum of 6.0% and the Total capital ratio
requirement includes a minimum of 8.0%. These
requirements also include the capital conservation buffer
requirements consisting of a 2.5% buffer and thecountercyclical capital buffer, which the FRB has set tozero percent.
‰ The “well-capitalized” requirements are the binding
requirements for leverage ratios.
The table below presents information about GS Bank USA’s
risk-based capital ratios.
$ in millions

Standardized

Advanced

As of June 2021
CET1 capital
Tier 1 capital
Tier 2 capital
Total capital
RWAs$ 32,593$ 32,593$ 6,148$ 38,741$295,470$ 32,593$ 32,593$ 4,688$ 37,281$193,398

CET1 capital ratio
Tier 1 capital ratio
Total capital ratio

11.0%
11.0%
13.1%

16.9%
16.9%
19.3%

$ 30,656$ 30,656$ 6,288$ 36,944$266,153$ 30,656$ 30,656$ 4,903$ 35,559$165,799

11.5%
11.5%
13.9%

18.5%
18.5%
21.4%

As of December 2020
CET1 capital
Tier 1 capital
Tier 2 capital
Total capital
RWAs
CET1 capital ratio
Tier 1 capital ratio
Total capital ratio

In the table above:‰ The lower of the Standardized or Advanced ratio is theratio against which GS Bank USA’s compliance with thecapital requirements is assessed under the risk-based
Capital Rules, and therefore, the Standardized ratios
applied to GS Bank USA as of both June 2021 andDecember 2020.
‰ As permitted by the FRB, GS Bank USA has elected totemporarily delay the estimated effects of adopting CECL
on regulatory capital until January 2022 and to
subsequently phase-in the effects through January 2025.
In addition, during 2020 and 2021, GS Bank USA has
elected to increase regulatory capital by 25% of theincrease in the allowance for credit losses since
January 1, 2020, as permitted by the rules issued by the
FRB. The impact of this increase will also be phased inover the three-year transition period. Reflecting the full
impact of CECL as of both June 2021 andDecember 2020 would not have had a material impact on
GS Bank USA’s Standardized risk-based capital ratios.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)‰ The Standardized and Advanced risk-based capital ratios
decreased from December 2020 to June 2021, reflecting
an increase in both Credit and Market RWAs, partially
offset by an increase in capital, reflecting net earnings anda capital contribution from Group Inc.
The table below presents information about GS Bank USA’s
leverage ratios.
For the Three Months
Ended or as of$ in millions

Tier 1 capital
Average adjusted total assets
Total leverage exposure
Tier 1 leverage ratio
SLR

June
2021

December2020$ 32,593$306,095$512,063$ 30,656$283,869$343,198

10.6%
6.4%

10.8%
8.9%

In the table above:‰ Average adjusted total assets represents the average daily
assets for the quarter adjusted for deductions from Tier 1
capital, and the impact of CECL transition.
‰ Total leverage exposure, for the three months ended
December 2020, excluded average holdings of U.S.
Treasury securities and average deposits at the Federal
Reserve as permitted by the FRB under a temporary
amendment. The impact of this temporary amendment
was an increase in GS Bank USA’s SLR by approximately
2.4 percentage points for the three months ended
December 2020. Effective April 1, 2021, the amendment
permitting this exclusion expired and, as a result, the SLR
for the three months ended June 2021 did not reflect the
impact of the temporary amendment to exclude theholdings of such assets.
‰ Tier 1 leverage ratio is calculated as Tier 1 capital divided
by average adjusted total assets.
‰ SLR is calculated as Tier 1 capital divided by total
leverage exposure.
The firm’s principal non-U.S. bank subsidiaries, GSIB and
GSBE, are also subject to regulatory capital requirements.
GSIB is regulated by the Prudential Regulation Authority(PRA) and the Financial Conduct Authority (FCA), andGSBE is directly supervised by the European Central Bankand by BaFin and Deutsche Bundesbank in the context of
the E.U. Single Supervisory Mechanism. As of bothJune 2021 and December 2020, GSIB and GSBE were incompliance with their regulatory capital requirements.

Other. The deposits of GS Bank USA are insured by the FDIC
to the extent provided by law. The FRB requires that GS Bank
USA maintain cash reserves with the Federal Reserve. As ofboth June 2021 and December 2020, the reserve requirement
ratio was zero percent. The amount deposited by GS Bank
USA at the Federal Reserve was $133.09 billion as ofJune 2021 and $52.71 billion as of December 2020.
Restrictions on Payments
Group Inc. may be limited in its ability to access capital heldat certain subsidiaries as a result of regulatory, tax or otherconstraints. These limitations include provisions ofapplicable law and regulations and other regulatory
restrictions that limit the ability of those subsidiaries todeclare and pay dividends without prior regulatory
approval. For example, the amount of dividends that may
be paid by GS Bank USA are limited to the lesser of theamounts calculated under a recent earnings test and an
undivided profits test. In connection with the acquisition of
GSBE by GS Bank USA on July 1, 2021, Group Inc. made a$33 billion cash capital contribution to GS Bank USA onthat date. Since the acquisition and through the date of thisreport, GS Bank USA has declared and paid approximately$33 billion of dividends to Group Inc., largely reflecting thesubsequent maturity or settlement of assets held by GSBE
on the acquisition date. Accordingly, GS Bank USA cannot
currently declare any additional dividends without priorregulatory approval.
In addition, subsidiaries not subject to separate regulatory
capital requirements may hold capital to satisfy local tax
and legal guidelines, rating agency requirements (forentities with assigned credit ratings) or internal policies,
including policies concerning the minimum amount of
capital a subsidiary should hold based on its underlying
level of risk.
Group Inc.’s equity investment in subsidiaries was$111.10 billion as of June 2021 and $103.80 billion as ofDecember 2020, of which Group Inc. was required tomaintain $72.26 billion as of June 2021 and $63.68 billion
as of December 2020, of minimum equity capital in its
regulated subsidiaries in order to satisfy the regulatory
requirements of such subsidiaries.
Group Inc.’s capital invested in certain non-U.S.
subsidiaries is exposed to foreign exchange risk,
substantially all of which is managed through a
combination of derivatives and non-U.S. denominated debt.
See Note 7 for information about the firm’s net investment
hedges used to hedge this risk.

Goldman Sachs June 2021 Form 10-Q

80

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
Note 21.

Note 22.

Earnings Per Common Share

Transactions with Affiliated Funds

Basic earnings per common share (EPS) is calculated by
dividing net earnings to common by the weighted average
number of common shares outstanding and RSUs for which
the delivery of the underlying common stock is not subject
to satisfaction of future service or performance conditions(collectively, basic shares). Diluted EPS includes thedeterminants of basic EPS and, in addition, reflects thedilutive effect of the common stock deliverable for RSUs forwhich the delivery of the underlying common stock issubject to satisfaction of future service or performance
conditions.

The firm has formed nonconsolidated investment fundswith third-party investors. As the firm generally acts as theinvestment manager for these funds, it is entitled to receive
management fees and, in certain cases, advisory fees or
incentive fees from these funds. Additionally, the firm
invests alongside the third-party investors in certain funds.

The table below presents information about basic anddiluted EPS.

in millions, except per share amounts

Three Months
Ended June

Six Months
Ended June

2021

2021

2020

2020

Net earnings to common$5,347 $ 197
Weighted average basic shares
350.8 355.7
Effect of dilutive RSUs
5.2–
Weighted average diluted shares 356.0 355.7$12,058 $1,320353.6 356.8
4.8–
358.4 356.8

Basic EPS
Diluted EPS$ 34.06 $ 3.66
$ 33.64 $ 3.66

$15.22 $ 0.53
$15.02 $ 0.53

In the table above:‰ Net earnings to common represents net earnings
applicable to common shareholders, which is calculated
as net earnings less preferred stock dividends.
‰ Unvested share-based awards that have non-forfeitablerights to dividends or dividend equivalents are treated as aseparate class of securities under the two-class method.
Distributed earnings allocated to these securities reduce
net earnings to common to calculate EPS under thismethod. The impact of applying this methodology was a
reduction in basic EPS of $0.02 for the three months
ended June 2021 and $0.04 for the six months ended
June 2021, and a reduction in basic and diluted EPS of$0.02 for the three months ended June 2020 and $0.04
for the six months ended June 2020.
‰ Diluted EPS does not include antidilutive RSUs ofapproximately 0.1 million for both the three and six
months ended June 2021, and 7.5 million for both thethree and six months ended June 2020.

81

Goldman Sachs June 2021 Form 10-Q

The tables below present information about affiliatedfunds.
Three Months
Ended June

Six Months
Ended June

$ in millions

2021

2020

2021

2020

Fees earned from funds

$783

$804

$1,601$1,725As of$ in millions

Fees receivable from funds
Aggregate carrying value of interests in funds

June
2021

December
2020

$ 932
$5,419$ 803$5,068The firm may periodically determine to waive certain
management fees on selected money market funds toenhance the yield for investors in these funds. Management
fees waived were $161 million for the three months ended
June 2021, $19 million for the three months ended
June 2020, $266 million for the six months ended
June 2021 and $31 million for the six months ended
June 2020.
The Volcker Rule restricts the firm from providing financial
support to covered funds (as defined in the rule) after the
expiration of the conformance period. As a general matter,in the ordinary course of business, the firm does not expect
to provide additional voluntary financial support to any
covered funds, but may choose to do so with respect tofunds that are not subject to the Volcker Rule. However,any such support is not expected to be material to theresults of operations of the firm.
In March 2020, GS Bank USA and unaffiliated entities
purchased certificates of deposit and commercial paper
from two money market funds managed by the firm. These
funds are not covered funds under the Volcker Rule. GS
Bank USA’s purchase price of these securities was$1.84 billion, of which none were outstanding as ofJune 2021 and $321 million were outstanding as ofDecember 2020. These purchases were made to promoteliquidity in the short-term credit markets and to increase thefunds’ weekly liquid assets. Group Inc. provided aguarantee to GS Bank USA in connection with thesesecurities. See Note 18 for information about guarantees
provided by Group Inc. to subsidiaries.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
The firm had an outstanding guarantee, as permitted under
the Volcker Rule, on behalf of its funds of $87 million as ofboth June 2021 and December 2020. The firm has
voluntarily provided this guarantee in connection with afinancing agreement with a third-party lender executed by
one of the firm’s real estate funds that is not covered by the
Volcker Rule. Except as noted above, the firm has notprovided any additional financial support to its affiliatedfunds during both the six months ended June 2021 and theyear ended December 2020.

‰ Collateralized financings consists
agreements and securities loaned.

In addition, in the ordinary course of business, the firm may
also engage in other activities with its affiliated funds,
including, among others, securities lending, trade
execution, market-making, custody, and acquisition andbridge financing. See Note 18 for information about thefirm’s investment commitments related to these funds.

Income Taxes

Note 23.

Interest Income and Interest Expense
Interest is recorded over the life of the instrument on an
accrual basis based on contractual interest rates.
The table below presents sources of interest income andinterest expense.
Three Months
Ended June
$ in millions

Deposits with banks
Collateralized agreements
Trading assets
Investments
Loans
Other interest
Total interest income
Deposits
Collateralized financings
Trading liabilities
Short-term borrowings
Long-term borrowings
Other interest
Total interest expense
Net interest income

2021

$

7
(250)
1,130
378
1,295
379
2,939
316
25
372
160
741
(304)
1,310
$1,629Six Months
Ended June

2020

$

18
(16)
1,257
321
1,222
232
3,034
659
72
272
158
1,131
(202)
2,090
$ 944

2021

2020

4
(431)
2,323
885
2,515
697
5,993
659
8
745
318
1,634
(482)
2,882
$3,111

$ 223
518
2,830
792
2,538
883
7,784
1,477
520
586
299
2,236
409
5,527
$2,257$In the table above:‰ Collateralized agreements includes rebates paid andinterest income on securities borrowed.

ofrepurchase‰ Short- and long-term borrowings include both secured
and unsecured borrowings.
‰ Other interest expense includes rebates received on otherinterest-bearing liabilities and interest expense on
customer credit balances.
Note 24.

Provision for Income Taxes
Income taxes are provided for using the asset and liability
method under which deferred tax assets and liabilities arerecognized for temporary differences between the financial
reporting and tax bases of assets and liabilities. The firm
reports interest expense related to income tax matters inprovision for taxes and income tax penalties in otherexpenses.
Deferred Income Taxes
Deferred income taxes reflect the net tax effects of
temporary differences between the financial reporting andtax bases of assets and liabilities. These temporary
differences result in taxable or deductible amounts in futureyears and are measured using the tax rates and laws thatwill be in effect when such differences are expected toreverse. Valuation allowances are established to reducedeferred tax assets to the amount that more likely than notwill be realized and primarily relate to the ability to utilize
losses in various tax jurisdictions. Tax assets are included inother assets and tax liabilities are included in otherliabilities.
Unrecognized Tax Benefits
The firm recognizes tax positions in the consolidated
financial statements only when it is more likely than notthat the position will be sustained on examination by therelevant taxing authority based on the technical merits ofthe position. A position that meets this standard ismeasured at the largest amount of benefit that will more
likely than not be realized on settlement. A liability isestablished for differences between positions taken in a tax
return and amounts recognized in the consolidated
financial statements.

‰ Loans excludes interest on loans held for sale that are
accounted for at the lower of cost or fair value. Suchinterest is included within other interest.
‰ Other interest income includes interest income on
customer debit balances, other interest-earning assets andloans held for sale that are accounted for at the lower ofcost or fair value.

Goldman Sachs June 2021 Form 10-Q

82

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
Regulatory Tax Examinations
The firm is subject to examination by the U.S. Internal
Revenue Service (IRS) and other taxing authorities injurisdictions where the firm has significant business
operations, such as the United Kingdom, Japan, Hong
Kong and various states, such as New York. The tax years
under examination vary by jurisdiction. The firm does notexpect completion of these audits to have a material impact
on the firm’s financial condition, but it may be material tooperating results for a particular period, depending, in part,on the operating results for that period.
The table below presents the earliest tax years that remainsubject to examination by major jurisdiction.

Jurisdiction

U.S. Federal
New York State and City
United Kingdom
Japan
Hong Kong

As of
June 2021

2011
2015
2017
2015
2015

The firm has been accepted into the Compliance Assurance
Process program by the IRS for each of the tax years from2013 through 2021. This program allows the firm to workwith the IRS to identify and resolve potential U.S. Federal
tax issues before the filing of tax returns. The fieldwork for
tax years 2011 through 2017 has been completed and thefinal resolution is not expected to have a material impact on
the effective tax rate. The 2018 and 2019 tax years remainsubject to post-filing review. New York State and City
examinations of 2015 through 2018 commenced during thefirst half of 2021.
All years, including and subsequent to the years in the table
above, remain open to examination by the taxing
authorities. The firm believes that the liability forunrecognized tax benefits it has established is adequate inrelation to the potential for additional assessments.

83

Goldman Sachs June 2021 Form 10-Q

Note 25.

Business Segments
The firm reports its activities in four business segments:
Investment Banking, Global Markets, Asset Management
and Consumer & Wealth Management. See Note 1 for
information about the firm’s business segments.
Compensation and benefits expenses in the firm’s segments
reflect, among other factors, the overall performance of thefirm, as well as the performance of individual businesses.
Consequently, pre-tax margins in one segment of the firm’s
business may be significantly affected by the performanceof the firm’s other business segments.
The firm allocates assets (including allocations of global
core liquid assets and cash, secured client financing andother assets), revenues and expenses among the fourbusiness segments. Due to the integrated nature of thesesegments, estimates and judgments are made in allocating
certain assets, revenues and expenses. The allocation
process is based on the manner in which management
currently views the performance of the segments.
The allocation of common shareholders’ equity andpreferred stock dividends to each segment is based on theestimated amount of equity required to support theactivities of the segment under relevant regulatory capitalrequirements.
Net earnings for each segment is calculated by applying thefirmwide tax rate to each segment’s pre-tax earnings.
Management believes that this allocation provides areasonable representation of each segment’s contribution to
consolidated net earnings to common, return on averagecommon equity and total assets. Transactions between
segments are based on specific criteria or approximate
third-party rates.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
Segment Results
The table below presents a summary of the firm’s segment
results.
Three Months
Ended June
$ in millions

2021

2020

Six Months
Ended June
2021

2020

Investment Banking
Non-interest revenues$ 3,485 $ 2,664
Net interest income
124(7)
Total net revenues
3,609 2,657
Provision for credit losses
(107)
819
Operating expenses
1,955 2,704
Pre-tax earnings/(loss)$ 1,761 $ (866)Net earnings/(loss)$ 1,413 $ (639)Net earnings/(loss) to common$ 1,393 $ (662)
Average common equity$ 9,792 $11,070
Return on average common equity 56.9% (23.9)%$ 7,156 $ 4,710
224
131
7,380 4,841(270) 1,441
3,818 3,873$ 3,832 $ (473)$ 3,111 $ (285)$ 3,072 $ (319)$10,078 $11,141
61.0% (5.7)%

Global Markets
Non-interest revenues$ 4,158 $ 6,547
Net interest income
742
629
Total net revenues
4,900 7,176
Provision for credit losses
14
183
Operating expenses
3,373 5,179
Pre-tax earnings$ 1,513 $ 1,814
Net earnings$ 1,201 $ 419
Net earnings to common$ 1,121 $ 305
Average common equity$44,430 $42,702
Return on average common equity 10.1% 2.9%

$11,178 $11,199
1,303 1,140
12,481 12,339(6)
251
7,558 8,026$ 4,929 $ 4,062$ 4,002 $ 2,442$ 3,851 $ 2,269$42,741 $40,970
18.0% 11.1%

Asset Management
Non-interest revenues$ 5,014 $ 2,176
Net interest income
118(75)
Total net revenues
5,132 2,101
Provision for credit losses(65)
271
Operating expenses
1,943 1,332
Pre-tax earnings/(loss)$ 3,254 $ 498
Net earnings/(loss)$ 2,620 $ 710
Net earnings/(loss) to common$ 2,592 $ 684
Average common equity$25,410 $19,322
Return on average common equity 40.8% 14.2%$ 9,445 $ 1,909
301
96
9,746 2,005(12)350
3,833 2,530$ 5,925 $ (875)$ 4,810 $ (526)$ 4,757 $ (566)$25,092 $20,371
37.9% (5.6)%

Consumer & Wealth Management
Non-interest revenues$ 1,102 $ 964
Net interest income
645
397
Total net revenues
1,747 1,361
Provision for credit losses
66
317
Operating expenses
1,369 1,199
Pre-tax earnings/(loss)$ 312 $ (155)Net earnings/(loss)$ 252 $ (117)Net earnings/(loss) to common$ 241 $ (130)
Average common equity$10,459 $ 7,505
Return on average common equity 9.2% (6.9)%$ 2,202 $ 1,963
1,283
890
3,485 2,853
126
485
2,868 2,443$ 491 $
(75)
$ 399 $
(45)
$ 378 $
(64)
$10,335 $ 7,271
7.3% (1.8)%

Total
Non-interest revenues$13,759 $12,351
Net interest income
1,629
944
Total net revenues
15,388 13,295
Provision for credit losses(92) 1,590
Operating expenses
8,640 10,414
Pre-tax earnings$ 6,840 $ 1,291
Net earnings$ 5,486 $ 373
Net earnings to common$ 5,347 $ 197
Average common equity$90,091 $80,599
Return on average common equity 23.7% 1.0%

$29,981 $19,781
3,111 2,257
33,092 22,038(162) 2,527
18,077 16,872$15,177 $ 2,639$12,322 $ 1,586$12,058 $ 1,320$88,246 $79,753
27.3% 3.3%

In the table above:‰ Revenues and expenses directly associated with eachsegment are included in determining pre-tax earnings.
‰ Net revenues in the firm’s segments include allocations ofinterest income and expense to specific positions inrelation to the cash generated by, or funding requirementsof, such positions. Net interest is included in segment net
revenues as it is consistent with how management assesses
segment performance.
‰ Total operating expenses included net provisions forlitigation and regulatory proceedings of $2.96 billion forthe second quarter of 2020 and $3.14 billion for the firsthalf of 2020, primarily reflected in Investment Banking
and Global Markets.
‰ Overhead expenses not directly allocable to specificsegments are allocated ratably based on direct segment
expenses.
‰ The allocation of common equity among the firm’s
segments for the second quarter and first half of 2021
reflected updates to the firm’s attributed equity
framework (effective January 1, 2021) to incorporate theimpact of the SCB rule and the firm’s SCB of 6.6%, whichbecame effective on October 1, 2020 under theStandardized Approach. The average common equity
balances above incorporate such impact, as well as thechanges in the size and composition of assets held in eachof the firm’s segments that occurred during the second
quarter and first half of 2021. See Note 20 for
information about the firm’s updated SCB, which will
become effective on October 1, 2021.
The table below presents depreciation and amortization
expense by segment.
Three Months
Ended June

Six Months
Ended June

2021

2020

2021

2020

Investment Banking$ 46
Global Markets
194
Asset Management
196
Consumer & Wealth Management
84
Total
$520

$ 43
147
213
96
$499

94
362
386
176
$1,018

$ 82
280
383
191
$936

$ in millions$

Goldman Sachs June 2021 Form 10-Q

84

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)

June
2021

December2020$ 145,836
1,025,631
96,605
119,850$1,387,922$ 116,242
844,606
95,751
106,429$1,163,028

Geographic Information
Due to the highly integrated nature of international
financial markets, the firm manages its businesses based on
the profitability of the enterprise as a whole. The
methodology for allocating profitability to geographic
regions is dependent on estimates and management
judgment because a significant portion of the firm’s
activities require cross-border coordination in order tofacilitate the needs of the firm’s clients. Geographic results
are generally allocated as follows:

The table below presents gross loans by segment and loantype, and allowance for loan losses by segment.

‰ Investment Banking: location of the client and investmentbanking team.

Segment Assets
The table below presents assets by segment.
As of$ in millions

Investment Banking
Global Markets
Asset Management
Consumer & Wealth Management
Total

As of
June
2021

$ in millions

Investment Banking
Corporate
Loans, grossAllowance for loan losses
Loans

$

25,08725,087(951)
24,136

December
2020$

27,86627,866(1,322)
26,544Global Markets
Corporate
Real estate
Other
Loans, grossAllowance for loan losses
Loans

15,292
23,0085,182
43,482(442)
43,04013,24816,915
3,499
33,662(448)
33,214

Asset Management
Corporate
Real estate
Other
Loans, grossAllowance for loan losses
Loans

7,435
8,678
704
16,817(749)
16,068

7,545
9,125
675
17,345(787)
16,558Consumer & Wealth Management
Wealth management
Installment
Credit cards
Loans, grossAllowance for loan losses
Loans39,9553,257
5,210
48,422(1,129)47,29333,023
3,823
4,270
41,116(1,317)39,799133,808(3,271)$ 130,537

119,989(3,874)$ 116,115

Total
Loans, grossAllowance for loan losses
Loans

See Note 9 for further information about loans.

‰ Global Markets: FICC and Equities intermediation:
location of the market-making desk; FICC and Equities
financing (excluding prime brokerage financing): locationof the desk; prime brokerage financing: location of the
primary market for the underlying security.
‰ Asset Management (excluding Equity investments andLending and debt investments): location of the sales team;
Equity investments: location of the investment; Lending
and debt investments: location of the client.
‰ Consumer & Wealth Management: Wealth management:
location of the sales team; Consumer banking: location of
the client.
The table below presents total net revenues and pre-tax
earnings by geographic region.
$ in millions

2021

2020

Three Months Ended June
Americas$ 9,957
EMEA
3,478
Asia
1,953
Total net revenues$15,388
Americas$ 4,465
EMEA
1,675
Asia
700
Total pre-tax earnings$ 6,840

65%
22%
13%
100%
65%
25%
10%
100%

$ 8,2893,453
1,553$13,295$ 1,853566(1,128)$ 1,291

62%
26%
12%
100%
143%
44%
(87)%
100%

Six Months Ended June
Americas
EMEA
Asia
Total net revenues
Americas
EMEA
Asia
Total pre-tax earnings

63%
25%
12%
100%
62%
27%
11%
100%

$13,460
5,561
3,017$22,038$ 2,404
1,002(767)$ 2,639

61%
25%
14%
100%
91%
38%
(29)%
100%

$20,782
8,191
4,119$33,092$ 9,480
4,090
1,607$15,177

In the table above:‰ Asia pre-tax earnings for the second quarter of 2020 and
first half of 2020 were impacted by net provisions forlitigation and regulatory proceedings.
‰ Substantially all of the amounts in Americas were
attributable to the U.S.
‰ Asia includes Australia and New Zealand.
85

Goldman Sachs June 2021 Form 10-Q

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
Note 26.

Credit Concentrations
The firm’s concentrations of credit risk arise from its
market making, client facilitation, investing, underwriting,lending and collateralized transactions, and cash
management activities, and may be impacted by changes in
economic, industry or political factors. These activities
expose the firm to many different industries andcounterparties, and may also subject the firm to aconcentration of credit risk to a particular central bank,counterparty, borrower or issuer, including sovereignissuers, or to a particular clearing house or exchange. The
firm seeks to mitigate credit risk by actively monitoring
exposures and obtaining collateral from counterparties as
deemed appropriate.
The firm measures and monitors its credit exposure basedon amounts owed to the firm after taking into account risk
mitigants that the firm considers when determining credit
risk. Such risk mitigants include netting and collateralarrangements and economic hedges, such as credit
derivatives, futures and forward contracts. Netting andcollateral agreements permit the firm to offset receivables
and payables with such counterparties and/or enable thefirm to obtain collateral on an upfront or contingent basis.
The table below presents the credit concentrations included
in trading cash instruments and investments.
As of

The table below presents U.S. government and agency
obligations and non-U.S. government and agency
obligations that collateralize resale agreements andsecurities borrowed transactions.
As of$ in millions

U.S. government and agency obligations
Non-U.S. government and agency obligations

June
2021

December
2020$86,093$92,458$60,158$68,001

In the table above:‰ Non-U.S. government and agency obligations primarily
consists of securities issued by the governments of the
U.K. and Japan.
‰ Given that the firm’s primary credit exposure on suchtransactions is to the counterparty to the transaction, thefirm would be exposed to the collateral issuer only in theevent of counterparty default.
Note 27.

June
2021

December
2020

U.S. government and agency obligations$144,443
Percentage of total assets
10.4%
Non-U.S. government and agency obligations $ 70,370
Percentage of total assets
5.1%$187,009
16.1%$ 59,580
5.1%$ in millions

Collateral obtained by the firm related to derivative assets isprincipally cash and is held by the firm or a third-party
custodian. Collateral obtained by the firm related to resaleagreements and securities borrowed transactions is
primarily U.S. government and agency obligations andnon-U.S. government and agency obligations. See Note 11
for further information about collateralized agreements andfinancings.

In addition, the firm had $202.20 billion as of June 2021
and $116.63 billion as of December 2020 of cash deposits
held at central banks (included in cash and cash
equivalents), of which $133.09 billion as of June 2021 and$52.71 billion as of December 2020 was held at the Federal
Reserve.
As of both June 2021 and December 2020, the firm did nothave credit exposure to any other counterparty thatexceeded 2% of total assets.

Legal Proceedings
The firm is involved in a number of judicial, regulatory andarbitration proceedings (including those described below)
concerning matters arising in connection with the conductof the firm’s businesses. Many of these proceedings are in
early stages, and many of these cases seek an indeterminate
amount of damages.
Under ASC 450, an event is “reasonably possible” if “thechance of the future event or events occurring is more thanremote but less than likely” and an event is “remote” if “thechance of the future event or events occurring is slight.”
Thus, references to the upper end of the range of reasonably
possible loss for cases in which the firm is able to estimate a
range of reasonably possible loss mean the upper end of therange of loss for cases for which the firm believes the risk ofloss is more than slight.

Goldman Sachs June 2021 Form 10-Q

86

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)With respect to matters described below for which
management has been able to estimate a range ofreasonably possible loss where (i) actual or potential
plaintiffs have claimed an amount of money damages,(ii) the firm is being, or threatened to be, sued by purchasers
in a securities offering and is not being indemnified by aparty that the firm believes will pay the full amount of any
judgment, or (iii) the purchasers are demanding that thefirm repurchase securities, management has estimated theupper end of the range of reasonably possible loss based on(a) in the case of (i), the amount of money damages claimed,(b) in the case of (ii), the difference between the initial sales
price of the securities that the firm sold in such offering andthe estimated lowest subsequent price of such securities
prior to the action being commenced and (c) in the case of(iii), the price that purchasers paid for the securities less theestimated value, if any, as of June 2021 of the relevant
securities, in each of cases (i), (ii) and (iii), taking into
account any other factors believed to be relevant to theparticular matter or matters of that type. As of the datehereof, the firm has estimated the upper end of the range ofreasonably possible aggregate loss for such matters and forany other matters described below where management has
been able to estimate a range of reasonably possible
aggregate loss to be approximately $1.8 billion in excess of
the aggregate reserves for such matters.
Management is generally unable to estimate a range ofreasonably possible loss for matters other than thoseincluded in the estimate above, including where (i) actual or
potential plaintiffs have not claimed an amount of money
damages, except in those instances where management canotherwise determine an appropriate amount, (ii) matters
are in early stages, (iii) matters relate to regulatory
investigations or reviews, except in those instances wheremanagement can otherwise determine an appropriate
amount, (iv) there is uncertainty as to the likelihood of aclass being certified or the ultimate size of the class, (v) there
is uncertainty as to the outcome of pending appeals or
motions, (vi) there are significant factual issues to beresolved, and/or (vii) there are novel legal issues presented.
For example, the firm’s potential liabilities with respect tothe investigations and reviews described below in“Regulatory Investigations and Reviews and Related
Litigation” generally are not included in management’s
estimate of reasonably possible loss. However,management does not believe, based on currently available
information, that the outcomes of such other matters will
have a material adverse effect on the firm’s financial
condition, though the outcomes could be material to thefirm’s operating results for any particular period,
depending, in part, upon the operating results for such
period. See Note 18 for further information about
mortgage-related contingencies.

87

Goldman Sachs June 2021 Form 10-Q

1MDB-Related Matters
Between 2012 and 2013, subsidiaries of the firm acted asarrangers or purchasers of approximately $6.5 billion ofdebt securities of 1MDB.
On November 1, 2018, the U.S. Department of Justice(DOJ) unsealed a criminal information and guilty plea by
Tim Leissner, a former participating managing director of
the firm, and an indictment against Ng Chong Hwa, aformer managing director of the firm. On August 28, 2018,
Leissner was adjudicated guilty by the U.S. District Court
for the Eastern District of New York of conspiring tolaunder money and to violate the U.S. Foreign Corrupt
Practices Act’s (FCPA) anti-bribery and internal accounting
controls provisions. Ng was charged with conspiring tolaunder money and to violate the FCPA’s anti-bribery andinternal accounting controls provisions. On May 6, 2019,
Ng pleaded not guilty to the DOJ’s criminal charges.
On August 18, 2020, the firm announced that it enteredinto a settlement agreement with the Government of
Malaysia to resolve the criminal and regulatory proceedingsin Malaysia involving the firm, which includes a guaranteethat the Government of Malaysia receives at least$1.4 billion in assets and proceeds from assets seized bygovernmental authorities around the world related to
1MDB.
On October 22, 2020, the firm announced that it reachedsettlements of governmental and regulatory investigations
relating to 1MDB with the DOJ, the SEC, the FRB, the
NYDFS, the FCA, the PRA, the Singapore Attorney
General’s Chambers, the Singapore Commercial Affairs
Department, the Monetary Authority of Singapore and theHong Kong Securities and Futures Commission. Group Inc.
entered into a three-year deferred prosecution agreementwith the DOJ, in which a charge against the firm, one countof conspiracy to violate the FCPA, was filed and will later
be dismissed if the firm abides by the terms of theagreement. In addition, GS Malaysia pleaded guilty to one
count of conspiracy to violate the FCPA, and was sentenced
on June 9, 2021. In May 2021, the U.S. Department ofLabor granted the firm a five-year exemption to maintainits status as a qualified professional asset manager(QPAM).

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
The firm has received multiple demands, beginning inNovember 2018, from alleged shareholders under
Section 220 of the Delaware General Corporation Law forbooks and records relating to, among other things, thefirm’s involvement with 1MDB and the firm’s compliance
procedures. On December 13, 2019, an alleged shareholder
filed a lawsuit in the Court of Chancery of the State of
Delaware seeking books and records relating to, among
other things, the firm’s involvement with 1MDB and thefirm’s compliance procedures. The parties have agreed tostay proceedings pending resolution of the books andrecords demand.

On December 20, 2018, a putative securities class action
lawsuit was filed in the U.S. District Court for the Southern
District of New York against Group Inc. and certain former
officers of the firm alleging violations of the anti-fraud
provisions of the Exchange Act with respect to Group Inc.’s
disclosures and public statements concerning 1MDB andseeking unspecified damages. The plaintiffs filed the second
amended complaint on October 28, 2019. On
June 28, 2021, the court dismissed the claims against one of
the individual defendants but denied the defendants’
motion to dismiss with respect to the firm and theremaining individual defendants.

On February 19, 2019, a purported shareholder derivative
action relating to 1MDB was filed in the U.S. District Court
for the Southern District of New York against Group Inc.
and the directors at the time and a former chairman andchief executive officer of the firm. The second amended
complaint filed on November 13, 2020 alleges breaches offiduciary duties, including in connection with alleged
insider trading by certain current and former directors,
unjust enrichment and violations of the anti-fraud
provisions of the Exchange Act, including in connection
with Group Inc.’s common stock repurchases andsolicitation of proxies, and seeks unspecified damages,
disgorgement and injunctive relief. Defendants moved todismiss this action on January 15, 2021.

Mortgage-Related Matters
Beginning in April 2010, a number of purported securities
law class actions were filed in the U.S. District Court for theSouthern District of New York challenging the adequacy ofGroup Inc.’s public disclosure of, among other things, thefirm’s activities in the collateralized debt obligation market,
and the firm’s conflict of interest management.

Beginning in March 2019, the firm has also received
demands from three shareholders to investigate and pursue
claims against certain current and former directors andexecutive officers based on their oversight and public
disclosures regarding 1MDB and related internal controls.
In June 2019, the Board appointed a Special Committee toconsider the demands and, in January 2021, the Board
voted to reject them. In June 2021, the firm reached asettlement with the three shareholders. Following theBoard’s decision to reject the initial three demands, the firm
received two additional demands from alleged shareholders(one of which is the alleged shareholder that filed theDecember 2019 books and records action in Delaware
Chancery Court) to investigate and pursue claims related to
1MDB (and, for one of the demands, other matters) against
other parties, including certain current and former directors
and executive officers of the firm.

The consolidated amended complaint filed on
July 25, 2011, which named as defendants Group Inc. andcertain current and former officers and employees of Group
Inc. and its affiliates, generally alleges violations of Sections
10(b) and 20(a) of the Exchange Act and seeks monetarydamages. The defendants have moved for summary
judgment. On April 7, 2020, the Second Circuit Court ofAppeals affirmed the district court’s August 14, 2018 grantof class certification. On June 21, 2021, the United States
Supreme Court vacated the judgment of the Second Circuit
and remanded the case for further proceedings.
Complaints were filed in the U.S. District Court for theSouthern District of New York on July 25, 2019 and
May 29, 2020 against Goldman Sachs Mortgage Company
and GS Mortgage Securities Corp. by U.S. Bank National
Association, as trustee for two residential mortgage-backed
securitization trusts that issued $1.7 billion of securities.
The complaints generally allege that mortgage loans in thetrusts failed to conform to applicable representations andwarranties and seek specific performance or, alternatively,
compensatory
damagesandotherrelief.
On
November 23, 2020, the court granted in part and denied inpart defendants’ motion to dismiss the complaint in the firstaction and denied defendants’ motion to dismiss thecomplaint in the second action. On January 14, 2021,
amended complaints were filed in both actions.

Goldman Sachs June 2021 Form 10-Q

88

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
Currencies-Related Litigation
GS&Co. and Group Inc. are among the defendants namedin an action filed in the U.S. District Court for the Southern
District of New York on November 7, 2018, and GSI,
GSIB, Goldman Sachs Group UK Limited and GS Bank
USA are among the defendants in an action filed in the High
Court of England and Wales on November 11, 2020, ineach case by certain direct purchasers of foreign exchange
instruments that opted out of a class settlement reachedwith, among others, GS&Co. and Group Inc. The thirdamended complaint in the U.S. district court action, filed on
August 3, 2020, generally alleges that the defendants
violated federal antitrust law and state common law inconnection with an alleged conspiracy to manipulate theforeign currency exchange markets and seeks declaratory
and injunctive relief, as well as unspecified amounts ofcompensatory, punitive, treble and other damages. The
claim in the U.K. action is for breaches of U.K. and E.U.
competition rules from 2003 to 2013 and alleges
manipulation of foreign exchange rates and bid/offer
spreads, the exchange of commercially sensitive
information among defendants and collusive trading.
Banco Espirito Santo S.A. and Oak Finance
Beginning in February 2015, GSI commenced actions
against Novo Banco S.A. (Novo Banco) in the English
Commercial Court and the Bank of Portugal (BoP) in
Portuguese Administrative Court in response to BoP’s
decision in December 2014 not to transfer to Novo Banco
an $835 million facility agreement (the Facility), structured
by GSI, between Oak Finance Luxembourg S.A. (OakFinance), a special purpose vehicle formed in connection
with the Facility, and Banco Espirito Santo S.A. (BES) prior
to the failure of BES. In July 2018, the English Supreme
Court found that the English courts did not havejurisdiction over GSI’s action. In July 2018, the Liquidation
Committee for BES issued a decision seeking to claw back
$54 million paid to GSI and $50 million paid to Oak
Finance in connection with the Facility, alleging that GSI
acted in bad faith in extending the Facility, including
because GSI allegedly knew that BES was at risk ofimminent failure. GSI has also issued a claim against thePortuguese State seeking compensation for losses related to
the failure of BES, including a contingent claim for the$104 million sought by the Liquidation Committee.

89

Goldman Sachs June 2021 Form 10-Q

Financial Advisory Services
Group Inc. and certain of its affiliates are from time to time
parties to various civil litigation and arbitration
proceedings and other disputes with clients and third
parties relating to the firm’s financial advisory activities.
These claims generally seek, among other things,
compensatory damages and, in some cases, punitive
damages, and in certain cases allege that the firm did not
appropriately disclose or deal with conflicts of interest.
Underwriting Litigation
Firm affiliates are among the defendants in a number ofproceedings in connection with securities offerings. In theseproceedings, including those described below, the plaintiffs
assert class action or individual claims under federal andstate securities laws and in some cases other applicablelaws, allege that the offering documents for the securities
that they purchased contained material misstatements andomissions, and generally seek compensatory and rescissory
damages in unspecified amounts. Certain of theseproceedings involve additional allegations.
Altice USA, Inc. GS&Co. is among the underwriters
named as defendants in putative securities class actions
pending in New York Supreme Court, County of Queens,and the U.S. District Court for the Eastern District of New
York beginning in June 2018, relating to Altice USA, Inc.’s(Altice) $2.15 billion June 2017 initial public offering. In
addition to the underwriters, the defendants include Alticeand certain of its officers and directors. GS&Co.
underwrote 12,280,042 shares of common stock
representing an aggregate offering price of approximately$368 million. On June 26, 2020, the court dismissed theamended complaint in the state court action, and on
September 4, 2020, plaintiffs moved for leave to file a
consolidated amended complaint. Plaintiffs in the district
court action filed a second amended complaint on
October 7, 2020. On February 16, 2021, the parties
reached a settlement in principle. Under the terms of thesettlement in principle, the firm will not be required tocontribute to the settlement.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
Alnylam Pharmaceuticals, Inc. GS&Co. is among theunderwriters named as defendants in a putative securities
class action filed on September 12, 2019 in New YorkSupreme Court, County of New York, relating to Alnylam
Pharmaceuticals,Inc.’s(Alnylam)$805
millionNovember 2017 public offering of common stock. In
addition to the underwriters, the defendants include
Alnylam and certain of its officers and directors. GS&Co.
underwrote 2,576,000 shares of common stock
representing an aggregate offering price of approximately$322 million. On October 30, 2020, the court denied thedefendants’ motion to dismiss the amended complaint filed
on November 7, 2019. On February 22, 2021, the plaintiffs
moved for class certification. On April 29, 2021, theAppellate Division of the Supreme Court of the State of
New York for the First Department denied defendants’appeal of the New York Supreme Court’s denial of the
defendants’ motion to dismiss the amended complaint,
except with respect to one of the plaintiffs’ claims against
Alnylam’s officers and directors.
Uber Technologies, Inc. GS&Co. is among theunderwriters named as defendants in several putative
securities class actions filed beginning in September 2019 in
California Superior Court, County of San Francisco and the
U.S. District Court for the Northern District of California,
relating to Uber Technologies, Inc.’s (Uber) $8.1 billion
May 2019 initial public offering. In addition to theunderwriters, the defendants include Uber and certain of its
officers and directors. GS&Co. underwrote 35,864,408
shares of common stock representing an aggregate offering
price of approximately $1.6 billion. On November 16, 2020,
the court in the state court action granted defendants’ motion
to dismiss the consolidated amended complaint filed on
February 11, 2020, and on December 16, 2020, plaintiffs
appealed. On August 7, 2020, defendants’ motion to dismissthe district court action was denied. On September 25, 2020,
the plaintiffs in the district court action moved for classcertification. On December 5, 2020, the plaintiffs in the state
court action filed a complaint in the district court, which wasconsolidated with the existing district court action on
January 25, 2021. On May 14, 2021, the plaintiffs filed asecond amended complaint in the district court, and on
June 28, 2021, defendants filed a motion to dismiss thesecond amended complaint.

Venator Materials PLC. GS&Co. is among theunderwriters named as defendants in putative securities
class actions in Texas District Court, Dallas County, NewYork Supreme Court, New York County, and the U.S.
District Court for the Southern District of Texas, filed
beginning in February 2019, relating to Venator Materials
PLC’s (Venator) $522 million August 2017 initial public
offering and $534 million December 2017 secondary equity
offering. In addition to the underwriters, the defendants
include Venator, certain of its officers and directors andcertain of its shareholders. GS&Co. underwrote 6,351,347
shares of common stock in the August 2017 initial public
offering representing an aggregate offering price ofapproximately $127 million and 5,625,768 shares ofcommon stock in the December 2017 secondary equity
offering representing an aggregate offering price ofapproximately $127 million. On January 21, 2020, theTexas Court of Appeals reversed the Texas District Courtand dismissed the claims against the underwriterdefendants, including GS&Co., in the Texas state court
action for lack of personal jurisdiction. On
March 22, 2021, the defendants’ motion to dismiss the
New York state court action was granted and the plaintiffs
have filed a notice of appeal. On July 7, 2021, the court in
the federal action granted in part and denied in part
defendants’ motion to dismiss the consolidated complaint.
XP Inc. GS&Co. is among the underwriters named as
defendants in putative securities class actions pending in
New York Supreme Court, County of New York, and the
U.S. District Court for the Eastern District of York, filed
beginning March 19, 2020, relating to XP Inc.’s (XP)$2.3 billion December 2019 initial public offering. In
addition to the underwriters, the defendants include XP,
certain of its officers and directors and certain of its
shareholders. GS&Co. underwrote 19,326,218 shares ofcommon stock in the December 2019 initial public offering
representing an aggregate offering price of approximately$522 million. On August 5, 2020, defendants’ motion tostay the state court action in favor of the federal court
action was denied. On February 8, 2021, the state court
granted the defendants’ motion to dismiss the state court
action, and on March 7, 2021, the district court granted thedefendants’ motion to dismiss the federal court action. On
April 7, 2021, plaintiffs in the district court action appealed
to the Second Circuit Court of Appeals.

Goldman Sachs June 2021 Form 10-Q

90

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
GoHealth, Inc. GS&Co. is among the underwriters named
as defendants in putative securities class actions filed
beginning on September 21, 2020 and consolidated in the
U.S. District Court for the Northern District of Illinois
relating to GoHealth, Inc.’s (GoHealth) $914 million
July 2020 initial public offering. In addition to theunderwriters, the defendants include GoHealth, certain of
its officers and directors and certain of its shareholders.
GS&Co. underwrote 11,540,550 shares of common stock
representing an aggregate offering price of approximately$242 million. On February 25, 2021, the plaintiffs filed aconsolidated complaint. On April 26, 2021, the defendants
filed a motion to dismiss the consolidated complaint.

DiDi Global Inc. Goldman Sachs (Asia) L.L.C. is among
the underwriters named as defendants in two putative
securities class actions filed on July 6, 2021 in the U.S.
District Courts for the Southern District of New York andthe Central District of California relating to DiDi Global
Inc.’s (DiDi) $4.4 billion June 2021 initial public offering ofAmerican Depositary Shares (ADS). In addition to theunderwriters, the defendants include DiDi and certain of its
officers and directors. Goldman Sachs (Asia) L.L.C.
underwrote 104,554,000 ADS representing an aggregateoffering price of approximately $1.5 billion. On
July 9, 2021, plaintiffs in the California district court action
filed an amended complaint.

Root, Inc. GS&Co. is among the underwriters named as
defendants in a putative securities class action filed on
March 25, 2021 in the U.S. District Court for the Southern
District of Ohio, relating to Root, Inc.’s (Root)$724 million October 2020 initial public offering ofcommon stock. In addition to the underwriters, thedefendants include Root and certain of its officers anddirectors. GS&Co. underwrote 9,406,891 shares ofcommon stock representing an aggregate offering price ofapproximately $254 million. On May 12, 2021, plaintiffs
voluntarily dismissed their claims without prejudice.

Investment Management Services
Group Inc. and certain of its affiliates are parties to various
civil litigation and arbitration proceedings and otherdisputes with clients relating to losses allegedly sustained asa result of the firm’s investment management services.
These claims generally seek, among other things, restitution
or other compensatory damages and, in some cases,
punitive damages.

Array Technologies, Inc. GS&Co. is among theunderwriters named as defendants in a putative securities
class action filed on May 14, 2021 in the U.S. District Court
for the Southern District of New York, relating to Array
Technologies, Inc.’s (Array) $1.2 billion October 2020
initial public offering of common stock, $1.3 billion
December 2020 offering of common stock and$993 million March 2021 offering of common stock. In
addition to the underwriters, the defendants include Arrayand certain of its officers and directors. GS&Co.
underwrote an aggregate of 31,912,213 shares of common
stock in the three offerings representing an aggregateoffering price of approximately $877 million.
ContextLogic, Inc. GS&Co. is among the underwriters
named as defendants in two putative securities class actions
filed on May 17, 2021 and May 25, 2021, respectively, in
the U.S. District Court for the Northern District ofCalifornia, relating to ContextLogic, Inc.’s (ContextLogic)$1.1 billion December 2020 initial public offering ofcommon stock. In addition to the underwriters, thedefendants include ContextLogic and certain of its officers
and directors. GS&Co. underwrote 16,169,000 shares ofcommon stock representing an aggregate offering price ofapproximately $388 million.

91

Goldman Sachs June 2021 Form 10-Q

Securities Lending Antitrust Litigation
Group Inc. and GS&Co. are among the defendants namedin a putative antitrust class action and three individual
actions relating to securities lending practices filed in the
U.S. District Court for the Southern District of New York
beginning in August 2017. The complaints generally assert
claims under federal and state antitrust law and statecommon law in connection with an alleged conspiracy
among the defendants to preclude the development ofelectronic platforms for securities lending transactions. The
individual complaints also assert claims for tortious
interference with business relations and under state tradepractices law and, in the second and third individual
actions, unjust enrichment under state common law. The
complaints seek declaratory and injunctive relief, as well as
unspecified amounts of compensatory, treble, punitive andother damages. Group Inc. was voluntarily dismissed fromthe putative class action on January 26, 2018. Defendants’
motion to dismiss the class action complaint was denied on
September 27, 2018. Defendants moved to dismiss thesecond individual action on December 21, 2018. In
June 2019, the third individual action was consolidatedwith the second individual action. After that consolidation,
the court ordered that the pending motion to dismiss in thesecond individual action apply to the newly consolidated
matter. Defendants’ motion to dismiss the first individual
action was granted on August 7, 2019. The plaintiffs in theputative class action moved for class certification on
February 22, 2021.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
Interest Rate Swap Antitrust Litigation
Group Inc., GS&Co., GSI, GS Bank USA and Goldman
Sachs Financial Markets, L.P. are among the defendants
named in a putative antitrust class action relating to the
trading of interest rate swaps, filed in November 2015 andconsolidated in the U.S. District Court for the Southern
District of New York. The same Goldman Sachs entities
also are among the defendants named in two antitrust
actions relating to the trading of interest rate swaps,
commenced in April 2016 and June 2018, respectively, in
the U.S. District Court for the Southern District of New
York by three operators of swap execution facilities andcertain of their affiliates. These actions have been
consolidated for pretrial proceedings. The complaints
generally assert claims under federal antitrust law and statecommon law in connection with an alleged conspiracy
among the defendants to preclude exchange trading ofinterest rate swaps. The complaints in the individual actions
also assert claims under state antitrust law. The complaints
seek declaratory and injunctive relief, as well as treble
damages in an unspecified amount. Defendants moved todismiss the class and the first individual action and the
district court dismissed the state common law claims
asserted by the plaintiffs in the first individual action andotherwise limited the state common law claim in theputative class action and the antitrust claims in both actions
to the period from 2013 to 2016. On November 20, 2018,
the court granted in part and denied in part the defendants’
motion to dismiss the second individual action, dismissing
the state common law claims for unjust enrichment andtortious interference, but denying dismissal of the federal
and state antitrust claims. On March 13, 2019, the court
denied the plaintiffs’ motion in the putative class action toamend their complaint to add allegations related to 20082012 conduct, but granted the motion to add limited
allegations from 2013-2016, which the plaintiffs added in a
fourth consolidated amended complaint filed on
March 22, 2019. The plaintiffs in the putative class action
moved for class certification on March 7, 2019.

Variable Rate Demand Obligations Antitrust
Litigation
GS&Co. is among the defendants named in a putative classaction relating to variable rate demand obligations(VRDOs), filed beginning in February 2019 under separate
complaints and consolidated in the U.S. District Court for
the Southern District of New York. The consolidated
amended complaint, filed on May 31, 2019, generally
asserts claims under federal antitrust law and state common
law in connection with an alleged conspiracy among thedefendants to manipulate the market for VRDOs. The
complaint seeks declaratory and injunctive relief, as well as
unspecified amounts of compensatory, treble and otherdamages. On November 2, 2020, the court granted in partand denied in part the defendants’ motion to dismiss,dismissing the state common law claims against GS&Co.,
but denying dismissal of the federal antitrust law claims.
GS&Co. is also among the defendants named in a related
putative class action filed on June 2, 2021 in the U.S.
District Court for the Southern District of New York. The
complaint alleges the same conspiracy in the market for
VRDOs as that alleged in the consolidated amended
complaint filed on May 31, 2019, and asserts federal
antitrust law, state law and state common law claims
against the defendants. The complaint seeks declaratory
and injunctive relief, as well as unspecified amounts ofcompensatory, treble and other damages. On July 26, 2021,
plaintiffs in the May 31, 2019 action sought leave to file anamended complaint consolidating the two actions.
Commodities-Related Litigation
GSI is among the defendants named in putative classactions relating to trading in platinum and palladium, filed
beginning on November 25, 2014 and most recently
amended on May 15, 2017, in the U.S. District Court for
the Southern District of New York. The amended
complaint generally alleges that the defendants violated
federal antitrust laws and the Commodity Exchange Act inconnection with an alleged conspiracy to manipulate abenchmark for physical platinum and palladium prices andseek declaratory and injunctive relief, as well as treble
damages in an unspecified amount. On March 29, 2020,
the court granted the defendants’ motions to dismiss andfor reconsideration, resulting in the dismissal of all claims.
On April 27, 2020, plaintiffs appealed to the Second Circuit
Court of Appeals.

Goldman Sachs June 2021 Form 10-Q

92

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
GS&Co., GSI, J. Aron & Company and Metro
International Trade Services (Metro), a previously
consolidated subsidiary of Group Inc. that was sold in the
fourth quarter of 2014, are among the defendants in a
number of putative class and individual actions filed
beginning on August 1, 2013 and consolidated in the U.S.
District Court for the Southern District of New York. The
complaints generally allege violations of federal antitrust
laws and state laws in connection with the storage ofaluminum and aluminum trading. The complaints seek
declaratory, injunctive and other equitable relief, as well as
unspecified monetary damages, including treble damages.
In December 2016, the district court granted defendants’
motions to dismiss and on August 27, 2019, the Second
Circuit vacated the district court’s dismissals and remanded
the case to district court for further proceedings. On
July 23, 2020, the district court denied the class plaintiffs’
motion for class certification, and on December 16, 2020
the Second Circuit denied leave to appeal the denial. On
February 17, 2021, the district court granted defendants’
motion for summary judgment with respect to the claims of
most of the individual plaintiffs. On April 14, 2021, theplaintiffs appealed to the Second Circuit Court of Appeals.
Group Inc., GS&Co., GSI, J. Aron & Company and Metro
are among the defendants in an action filed on
February 27, 2020 in the High Court of Justice, Business andProperty Courts of England and Wales. The particulars ofclaim seeks unspecified compensatory and exemplary
damages based on alleged violations of U.K. and E.U.
competition laws in connection with the storage and tradingof aluminum. On May 21, 2021, the parties entered into asettlement agreement. The firm has paid the full amount of
its contribution to the settlement. All proceedings against thefirm were dismissed on June 4, 2021.
In connection with the sale of Metro, the firm agreed toprovide indemnities to the buyer, including for any
potential liabilities for legal or regulatory proceedings
arising out of the conduct of Metro’s business while thefirm owned it.

U.S. Treasury Securities Litigation
GS&Co. is among the primary dealers named as defendants
in several putative class actions relating to the market for
U.S. Treasury securities, filed beginning in July 2015 andconsolidated in the U.S. District Court for the Southern
District of New York. GS&Co. is also among the primary
dealers named as defendants in a similar individual action
filed in the U.S. District Court for the Southern District of
New York on August 25, 2017. The consolidated classaction complaint, filed on December 29, 2017, generally
alleges that the defendants violated antitrust laws inconnection with an alleged conspiracy to manipulate thewhen-issued market and auctions for U.S. Treasury
securities and that certain defendants, including GS&Co.,
colluded to preclude trading of U.S. Treasury securities onelectronic trading platforms in order to impede competitionin the bidding process. The individual action alleges asimilar conspiracy regarding manipulation of the whenissued market and auctions, as well as related futures andoptions in violation of the Commodity Exchange Act. The
complaints seek declaratory and injunctive relief, treble
damages in an unspecified amount and restitution.
Defendants’ motion to dismiss was granted on
March 31, 2021. On May 14, 2021, plaintiffs filed anamended complaint. On June 14, 2021, defendants filed amotion to dismiss the amended complaint.
Corporate Bonds Antitrust Litigation
Group Inc. and GS&Co. are among the dealers named as
defendants in a putative class action relating to thesecondary market for odd-lot corporate bonds, filed on
April 21, 2020 in the U.S. District Court for the Southern
District of New York. The amended consolidated
complaint, filed on October 29, 2020, asserts claims underfederal antitrust law in connection with alleged anticompetitive conduct by the defendants in the secondary
market for odd-lots of corporate bonds, and seeks
declaratory and injunctive relief, as well as unspecified
monetary damages, including treble and punitive damages
and restitution. Defendants moved to dismiss on
December 15, 2020.
Credit Default Swap Antitrust Litigation
Group Inc., GS&Co. and GSI are among the defendants
named in a putative antitrust class action relating to thesettlement of credit default swaps, filed on June 30, 2021 in
the U.S. District Court for the District of New Mexico. The
complaint generally asserts claims under federal antitrust
law and the Commodity Exchange Act in connection withan alleged conspiracy among the defendants to manipulate
the benchmark price used to value credit default swaps forsettlement. The complaint also asserts a claim for unjust
enrichment under state common law. The complaint seeks
declaratory and injunctive relief, as well as unspecified
amounts of treble and other damages.

93

Goldman Sachs June 2021 Form 10-Q

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements(Unaudited)
Employment-Related Matters
On September 15, 2010, a putative class action was filed in
the U.S. District Court for the Southern District of New
York by three female former employees. The complaint, as
subsequently amended, alleges that Group Inc. and
GS&Co. have systematically discriminated against female
employees in respect of compensation, promotion andperformance evaluations. The complaint alleges a classconsisting of all female employees employed at specified
levels in specified areas by Group Inc. and GS&Co. since
July 2002, and asserts claims under federal and New York
City discrimination laws. The complaint seeks class action
status, injunctive relief and unspecified amounts ofcompensatory, punitive and other damages.
On March 30, 2018, the district court certified a damages
class as to the plaintiffs’ disparate impact and treatment
claims. On September 4, 2018, the Second Circuit Court ofAppeals denied defendants’ petition for interlocutory
review of the district court’s class certification decision andsubsequently denied defendants’ petition for rehearing. On
September 27, 2018, plaintiffs advised the district courtthat they would not seek to certify a class for injunctive anddeclaratory relief. On March 26, 2020, the Magistrate
Judge in the district court granted in part a motion tocompel arbitration as to class members who are parties tocertain agreements with Group Inc. and/or GS&Co. in
which they agreed to arbitrate employment-related
disputes. On April 16, 2020, plaintiffs submitted objections
to the Magistrate Judge’s order and defendants submitted
conditional objections in the event that the district judge
overturns any portion of the Magistrate Judge’s order.
Regulatory Investigations and Reviews and Related
Litigation
Group Inc. and certain of its affiliates are subject to anumber of other investigations and reviews by, and in somecases have received subpoenas and requests for documents
and information from, various governmental andregulatory bodies and self-regulatory organizations andlitigation and shareholder requests relating to various
matters relating to the firm’s businesses and operations,
including:‰ The securities
practices;offering

process

andunderwriting‰ The firm’s investment management and financial
advisory services;‰ Research practices, including research independence andinteractions between research analysts and other firm
personnel, including investment banking personnel, as
well as third parties;‰ Transactions involving government-related financingsand other matters, municipal securities, including wallcross procedures and conflict of interest disclosure withrespect to state and municipal clients, the trading andstructuring of municipal derivative instruments inconnection with municipal offerings, politicalcontribution rules, municipal advisory services and thepossible impact of credit default swap transactions onmunicipal issuers;‰ Consumer lending, as well as residential mortgage
lending, servicing and securitization, and compliancewith related consumer laws;‰ The offering, auction, sales, trading and clearance ofcorporate and government securities, currencies,
commodities and other financial products and related
sales and other communications and activities, as well as
the firm’s supervision and controls relating to suchactivities, including compliance with applicable short salerules, algorithmic, high-frequency and quantitative
trading, the firm’s U.S. alternative trading system (darkpool), futures trading, options trading, when-issued
trading, transaction reporting, technology systems andcontrols, securities lending practices, prime brokerage
activities, trading and clearance of credit derivative
instruments and interest rate swaps, commodities
activities and metals storage, private placement practices,
allocations of and trading in securities, and trading
activities and communications in connection with theestablishment of benchmark rates, such as currency rates;‰ Compliance with the FCPA;‰ The firm’s hiring and compensation practices;‰ The firm’s system of risk management and controls; and‰ Insider trading, the potential misuse and dissemination ofmaterial nonpublic information regarding corporate andgovernmental developments and the effectiveness of thefirm’s insider trading controls and information barriers.
The firm is cooperating with all such governmental andregulatory investigations and reviews.

‰ Conflicts of interest;

Goldman Sachs June 2021 Form 10-Q

94

Report of Independent Registered Public
Accounting Firm
To the Board of Directors and the Shareholders of The
Goldman Sachs Group, Inc.:
Results of Review of Interim Financial Statements
We have reviewed the accompanying consolidated balance
sheet of The Goldman Sachs Group, Inc. and its
subsidiaries (the Company) as of June 30, 2021, the related
consolidated statements of earnings, comprehensive income
and changes in shareholders’ equity for the three and six
month periods ended June 30, 2021 and 2020, and theconsolidated statements of cash flows for the six month
periods ended June 30, 2021 and 2020, including therelated notes (collectively referred to as the “interim
financial statements”). Based on our reviews, we are notaware of any material modifications that should be made to
the accompanying interim financial statements for them to
be in conformity with accounting principles generally
accepted in the United States of America.
We have previously audited, in accordance with thestandards of the Public Company Accounting Oversight
Board (United States) (PCAOB), the consolidated balance
sheet of the Company as of December 31, 2020, and therelated consolidated statements of earnings, comprehensive
income, changes in shareholders’ equity and cash flows forthe year then ended (not presented herein), and in ourreport dated February 19, 2021, which included aparagraph describing a change in the manner of accounting
for credit losses on certain financial instruments in the 2020
consolidated financial statements, we expressed an
unqualified opinion on those consolidated financial
statements. In our opinion, the information set forth in theaccompanying consolidated balance sheet as ofDecember 31, 2020 is fairly stated in all material respects inrelation to the consolidated balance sheet from which it has
been derived.

95

Goldman Sachs June 2021 Form 10-Q

Basis for Review Results
These interim financial statements are the responsibility of
the Company’s management. We are a public accounting
firm registered with the PCAOB and are required to be
independent with respect to the Company in accordancewith the U.S. federal securities laws and the applicable rules
and regulations of the Securities and Exchange Commission
and the PCAOB. We conducted our review in accordancewith the standards of the PCAOB. A review of interim
financial information consists principally of applying
analytical procedures and making inquiries of persons
responsible for financial and accounting matters. It is
substantially less in scope than an audit conducted inaccordance with the standards of the PCAOB, the objectiveof which is the expression of an opinion regarding thefinancial statements taken as a whole. Accordingly, we do
not express such an opinion.
/s/ PricewaterhouseCoopers LLP
New York, New York
August 3, 2021

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Statistical Disclosures
Distribution of Assets, Liabilities and Shareholders’EquityThe tables below present information about averagebalances, interest and average interest rates.
$ in millions

Average Balance for theThree Months
Ended June
$ in millions

2021

2020

Six Months
Ended June
2021

2020

AssetsU.S.
$ 108,501 $ 68,836 $ 93,707 $ 55,042
Non-U.S.
86,39578,39782,644
66,250Total deposits with banks
194,896 147,233 176,351 121,292
U.S.
209,228 137,881 191,728 137,493
Non-U.S.
142,133 126,256 125,768 124,737
Total collateralized agreements 351,361 264,137 317,496 262,230
U.S.
166,787 195,616 177,936 195,735
Non-U.S.
141,406 108,210 135,798 112,849
Total trading assets
308,193 303,826 313,734 308,584
U.S.
69,85053,806
69,484
48,892
Non-U.S.
18,756
16,456
18,661
16,946
Total investments
88,60670,262
88,14565,838U.S.
102,168 104,032
98,63496,283
Non-U.S.
21,506
19,51821,281
18,292
Total loans
123,674 123,550 119,915 114,575
U.S.
97,01954,73491,00752,811
Non-U.S.
51,73746,512
54,10345,041
Total other interest-earning
148,756 101,246 145,110
97,852
assetsTotal interest-earning assets 1,215,486 1,010,254 1,160,751 970,371
Cash and due from banks
13,037
9,414
11,807
10,823
Other non-interest-earning assets
128,504 116,468 130,608 111,207
Total assets$1,357,027 $1,136,136 $1,303,166 $1,092,401
Liabilities
U.S.
$ 218,196 $ 192,569 $ 209,996 $ 173,170
Non-U.S.
75,841
55,32069,16750,369Total interest-bearing deposits
294,037 247,889 279,163 223,539
U.S.
105,444
66,702 104,097
77,463
Non-U.S.
73,17035,626
61,41736,255
Total collateralized financings
178,614 102,328 165,514 113,718
U.S.
73,94147,82673,15937,726
Non-U.S.
77,69653,60671,42050,777
Total trading liabilities
151,637 101,432 144,579
88,503
U.S.
35,05437,29535,38835,767
Non-U.S.
37,46820,68836,202
19,544
Total short-term borrowings
72,522
57,98371,59055,311
U.S.
214,605 204,734 207,155 200,898
Non-U.S.
29,062
32,73928,73630,017
Total long-term borrowings
243,667 237,473 235,891 230,915
U.S.
134,723 140,803 129,552 134,544
Non-U.S.
83,49364,021
79,68564,861
Total other interest-bearing
liabilities
218,216 204,824 209,237 199,405
Total interest-bearing liabilities 1,158,693 951,929 1,105,974 911,391
Non-interest-bearing deposits
6,046
6,406
6,271
6,365
Other non-interest-bearing liabilities
92,99485,99993,186
83,689Total liabilities
1,257,733 1,044,334 1,205,431 1,001,445
Shareholders’ equity
Preferred stock
9,203
11,203
9,489
11,203
Common stock
90,09180,59988,24679,753
Total shareholders’ equity
99,29491,802
97,73590,956
Total liabilities andshareholders’ equity$1,357,027 $1,136,136 $1,303,166 $1,092,401
Percentage attributable to non-U.S. operations
Interest-earning assets
38.00%
39.13%
Interest-bearing liabilities
32.51%
27.52%

37.76%
31.34%

Interest for the

AssetsU.S.
Non-U.S.
Total deposits with banks
U.S.
Non-U.S.
Total collateralized agreements
U.S.
Non-U.S.
Total trading assets
U.S.
Non-U.S.
Total investments
U.S.
Non-U.S.
Total loans
U.S.
Non-U.S.
Total other interest-earning assets
Total interest-earning assets

Three Months
Ended June

Six Months
Ended June

2021

2021

2020

2020

$

31 $ 26 $ 55 $ 177
(24)
(8)
(51)
46
7
18
4
223
(87)
13
(169)
453
(163)
(29)
(262)
65
(250)
(16)
(431)
518
646
921 1,438 1,988
484
336
885
842
1,130 1,257 2,323 2,830
226
231
582
565
152
90
303
227
378
321
885
792
1,063 1,021 2,076 2,144
232
201
439
394
1,295 1,222 2,515 2,538
320
187
580
640
59
45
117
243
379
232
697
883
$2,939 $3,034 $5,993 $7,784

Liabilities
U.S.
$ 266 $ 532 $ 557 $1,217
Non-U.S.
50
127
102
260
Total interest-bearing deposits
316
659
659 1,477
U.S.
47
57
59
457
Non-U.S.
(22)
15
(51)
63
Total collateralized financings
25
72
8
520
U.S.
116
122
265
227
Non-U.S.
256
150
480
359
Total trading liabilities
372
272
745
586
U.S.
144
146
288
281
Non-U.S.
16
12
30
18
Total short-term borrowings
160
158
318
299
U.S.
722 1,100 1,590 2,174
Non-U.S.
19
31
44
62
Total long-term borrowings
741 1,131 1,634 2,236
U.S.
(263)
(187)
(420)
265
Non-U.S.
(41)
(15)
(62)
144
Total other interest-bearing liabilities
(304)
(202)
(482)
409
Total interest-bearing liabilities$1,310 $2,090 $2,882 $5,527
Net interest income
U.S.
Non-U.S.
Net interest income$1,167 $ 629 $2,223 $1,346
462
315
888
911
$1,629 $ 944 $3,111 $2,257

39.58%
27.63%

Goldman Sachs June 2021 Form 10-Q

96

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Statistical Disclosures
Annualized Average Rate for theThree Months
Ended June

Six Months
Ended June

2021

2021

2020

2020

Assets
U.S.
0.11% 0.15%
0.12% 0.65%
Non-U.S.
(0.11)% (0.04)% (0.12)% 0.14%
Total deposits with banks
0.01% 0.05%
0.00% 0.37%
U.S.
(0.17)% 0.04% (0.18)% 0.66%
Non-U.S.
(0.46)% (0.09)% (0.42)% 0.10%
Total collateralized agreements(0.29)% (0.02)% (0.27)% 0.40%
U.S.
1.55% 1.89%
1.63% 2.04%
Non-U.S.
1.37% 1.25%
1.31% 1.50%
Total trading assets
1.47% 1.66%
1.49% 1.84%
U.S.
1.30% 1.73%
1.69% 2.32%
Non-U.S.
3.25% 2.20%
3.27% 2.69%
Total investments
1.71% 1.84%
2.02% 2.42%
U.S.
4.17% 3.95%
4.24% 4.48%
Non-U.S.
4.33% 4.14%
4.16% 4.33%
Total loans
4.20% 3.98%
4.23% 4.45%
U.S.
1.32% 1.37%
1.29% 2.44%
Non-U.S.
0.46% 0.39%
0.44% 1.08%
Total other interest-earning assets 1.02% 0.92%
0.97% 1.81%
Total interest-earning assets
0.97% 1.21%
1.04% 1.61%
Liabilities
U.S.
0.49% 1.11%
0.53% 1.41%
Non-U.S.
0.26% 0.92%
0.30% 1.04%
Total interest-bearing deposits
0.43% 1.07%
0.48% 1.33%
U.S.
0.18% 0.34%
0.11% 1.19%
Non-U.S.
(0.12)% 0.17% (0.17)% 0.35%
Total collateralized financings
0.06% 0.28%
0.01% 0.92%
U.S.
0.63% 1.03%
0.73% 1.21%
Non-U.S.
1.32% 1.13%
1.36% 1.42%
Total trading liabilities
0.98% 1.08%
1.04% 1.33%
U.S.
1.65% 1.57%
1.64% 1.58%
Non-U.S.
0.17% 0.23%
0.17% 0.19%
Total short-term borrowings
0.88% 1.10%
0.90% 1.09%
U.S.
1.35% 2.16%
1.55% 2.18%
Non-U.S.
0.26% 0.38%
0.31% 0.42%
Total long-term borrowings
1.22% 1.92%
1.40% 1.95%
U.S.
(0.78)% (0.53)% (0.65)% 0.40%
Non-U.S.
(0.20)% (0.09)% (0.16)% 0.45%
Total other interest-bearing liabilities (0.56)% (0.40)% (0.46)% 0.41%
Total interest-bearing liabilities
0.45% 0.88%
0.53% 1.22%
Interest rate spread
0.52%
U.S.
0.62%
Non-U.S.
0.40%
Net yield on interest-earning assets 0.54%

97

Goldman Sachs June 2021 Form 10-Q

0.33%
0.41%
0.32%
0.38%

0.51%
0.62%
0.41%
0.54%

0.39%
0.46%
0.48%
0.47%

In the tables above:‰ Assets, liabilities and interest are classified as U.S. andnon-U.S. based on the location of the legal entity in which
the assets and liabilities are held.
‰ Derivative instruments and commodities are included inother non-interest-earning assets and other non-interestbearing liabilities.
‰ Total other interest-earning assets primarily consists ofreceivables from customers and counterparties.
‰ Collateralized financings consists of securities sold underagreements to repurchase and securities loaned.
‰ Substantially all of the total other interest-bearing
liabilities consists of payables to customers andcounterparties.
‰ Interest rates for borrowings include the effects of interest
rate swaps accounted for as hedges.
‰ Total loans exclude loans held for sale that are accounted
for at the lower of cost or fair value. Such loans areincluded within other interest-earning assets.
‰ Total short- and long-term borrowings include bothsecured and unsecured borrowings.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis

Item 2. Management’s Discussion
and Analysis of Financial Condition
and Results of Operations
Introduction

Executive Overview

The Goldman Sachs Group, Inc. (Group Inc. or parent
company), a Delaware corporation, together with its
consolidated subsidiaries, is a leading global financial
institution that delivers a broad range of financial services
across investment banking, securities, investment
management and consumer banking to a large anddiversified client base that includes corporations, financial
institutions, governments and individuals. Founded in
1869, we are headquartered in New York and maintain
offices in all major financial centers around the world. We
report our activities in four business segments: Investment
Banking, Global Markets, Asset Management, andConsumer & Wealth Management. See “Results ofOperations” for further information about our businesssegments.

Three Months Ended June 2021 versus June 2020. We
generated net earnings of $5.49 billion for the second
quarter of 2021, significantly higher compared with$373 million for the second quarter of 2020. Diluted
earnings per common share (EPS) was $15.02 for thesecond quarter of 2021, significantly higher compared with
$0.53 for the second quarter of 2020. Annualized return on
average common shareholders’ equity (ROE) was 23.7%
for the second quarter of 2021, compared with 1.0% for
the second quarter of 2020. Book value per common share
was $264.90 as of June 2021, 5.6% higher compared with
March 2021 and 12.2% higher compared with
December 2020.

When we use the terms “we,” “us” and “our,” we mean
Group Inc. and its consolidated subsidiaries. When we use
the term “our subsidiaries,” we mean the consolidated
subsidiaries of Group Inc.
This Management’s Discussion and Analysis of Financial
Condition and Results of Operations should be read in
conjunction with our Annual Report on Form 10-K for theyear ended December 31, 2020. References to “the 2020
Form 10-K” are to our Annual Report on Form 10-K forthe year ended December 31, 2020. References to “thisForm 10-Q” are to our Quarterly Report on Form 10-Q for
the quarterly period ended June 30, 2021. All references to“the consolidated financial statements” or “Statistical
Disclosures” are to Part I, Item 1 of this Form 10-Q. The
consolidated financial statements are unaudited. All
references to June 2021, March 2021 and June 2020 refer
to our periods ended, or the dates, as the context requires,
June 30, 2021, March 31, 2021 and June 30, 2020,
respectively. All references to December 2020 refer to thedate December 31, 2020. Any reference to a future year
refers to a year ending on December 31 of that year. Certain
reclassifications have been made to previously reported
amounts to conform to the current presentation.

In the second quarter of 2020, net provisions for litigation
and regulatory proceedings reduced diluted EPS by $8.23
and annualized ROE by 14.5 percentage points.
Net revenues were $15.39 billion for the second quarter of2021, 16% higher than the second quarter of 2020, due tosignificantly higher net revenues in Asset Management,
reflecting strong Equity investments net revenues, in
Investment Banking, primarily reflecting strong Financial
advisory and Underwriting net revenues, and inConsumer & Wealth Management, reflecting growth inboth Wealth management and Consumer banking net
revenues. These increases were partially offset bysignificantly lower net revenues in Global Markets
compared with a very strong second quarter of 2020, which
included strong activity levels amid heightened volatility
and significant market dislocations. The decrease in Global
Markets reflected significantly lower net revenues in Fixed
Income, Currency and Commodities (FICC) and lower net
revenues in Equities.
Provision for credit losses was a net benefit of $92 million
for the second quarter of 2021, compared with net
provisions of $1.59 billion for the second quarter of 2020.
The second quarter of 2021 included reserve reductions onwholesale and consumer loans reflecting continued
improvement in the broader economic environment
following challenging conditions that began in the first halfof 2020 as a result of the coronavirus (COVID-19)
pandemic, partially offset by provisions related to portfolio
growth (primarily in credit cards).

Goldman Sachs June 2021 Form 10-Q

98

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Operating expenses were $8.64 billion for the second
quarter of 2021, 17% lower than the second quarter of
2020, due to significantly lower net provisions for litigation
and regulatory proceedings, partially offset by higher
compensation and benefits expenses (reflecting strong
performance). In addition, transaction based expenses andtechnology expenses were higher. Our efficiency ratio (total
operating expenses divided by total net revenues) for thesecond quarter of 2021 was 56.1%, compared with 78.3%
for the second quarter of 2020. In the second quarter of
2020, net provisions for litigation and regulatory
proceedings increased our efficiency ratio by 22.2
percentage points.
We returned $1.44 billion of capital to commonshareholders, including $1.00 billion of share repurchases
and $441 million of common stock dividends. As ofJune 2021, our Common Equity Tier 1 (CET1) capital ratio
was 14.4% under the Standardized Capital Rules and13.4% under the Advanced Capital Rules. See Note 20 tothe consolidated financial statements for further
information about our capital ratios.
We remain focused on our strategic initiative to achieve theannual run-rate expense efficiencies target of $1.3 billion by
year-end 2022. In addition, we expect that we will achieve
an additional $400 million of expense efficiencies beyond
year-end 2022.
Six Months Ended June 2021 versus June 2020. We
generated net earnings of $12.32 billion for the first half of2021, significantly higher compared with $1.59 billion for
the first half of 2020. Diluted EPS was $33.64 for the firsthalf of 2021, significantly higher compared with $3.66 forthe first half of 2020. Annualized ROE was 27.3% for the
first half of 2021, compared with 3.3% for the first half of2020.
In the first half of 2020, net provisions for litigation andregulatory proceedings reduced diluted EPS by $8.76 andannualized ROE by 7.8 percentage points.
Net revenues were $33.09 billion for the first half of 2021,
50% higher than the first half of 2020, due to significantly
higher net revenues in Asset Management, primarilyreflecting strong Equity investments net revenues, in
Investment
Banking, primarily reflecting strong
Underwriting and Financial advisory net revenues, and inConsumer & Wealth Management, reflecting growth inboth Wealth management and Consumer banking net
revenues. Net revenues in Global Markets were strong
across both FICC and Equities, but essentially unchanged
compared with the first half of 2020.

99

Goldman Sachs June 2021 Form 10-Q

Provision for credit losses was a net benefit of $162 million
for the first half of 2021, compared with net provisions of$2.53 billion for the first half of 2020. The first half of 2021
included reserve reductions on wholesale and consumer
loans reflecting continued improvement in the broader
economic environment following challenging conditions
that began in the first half of 2020 as a result of the
COVID-19 pandemic, partially offset by provisions related
to portfolio growth (primarily in credit cards, including
provisions related to the pending acquisition of the General
Motors co-branded credit card portfolio).
Operating expenses were $18.08 billion for the first half of2021, 7% higher than the first half of 2020, reflecting
significantly higher compensation and benefits expenses(reflecting strong performance), partially offset bysignificantly lower non-compensation expenses. Within
non-compensation expenses, net provisions for litigation
and regulatory proceedings were significantly lower,
partially offset by higher transaction based expenses andhigher technology expenses. Our efficiency ratio (total
operating expenses divided by total net revenues) for the
first half of 2021 was 54.6%, compared with 76.6% for the
first half of 2020. In the first half of 2020, net provisions forlitigation and regulatory proceedings increased our
efficiency ratio by 14.3 percentage points.
During the first half of 2021, we returned $4.59 billion ofcapital to common shareholders, including $3.70 billion ofcommon share repurchases and $889 million in common
stock dividends.

Business Environment
In the second quarter of 2021, the global economy
continued its recovery from the COVID-19 pandemic, as
the lifting of health and safety restrictions in parts of theworld amid vaccine distribution facilitated an increase inglobal economic activity. The broader economic
improvement was also aided by accommodative monetary
policy provided by global central banks in response to thepandemic (through low policy rates and large-scale asset
purchases) and, in the U.S., the prospect of further fiscal
stimulus in the form of infrastructure spending. The growthin economic activity and demand for goods and services,alongside labor shortages and supply chain complications,contributed to rising inflationary pressures. However,investors remained optimistic about the prospect forcontinued economic recovery, as global equity prices
generally increased during the quarter, while volatility
continued to moderate from elevated levels. In addition,
long-term government bond yields generally declined.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Despite broad improvements in the overall economy since
the initial impact of the pandemic, there continues to be
uncertainty related to the prospects for the economic
recovery to continue, reflecting concerns about virus
resurgence from the Delta variant and other virus
mutations, vaccine distribution and hesitancy, inflation andgeopolitical risks. See “Results of Operations — Segment
Assets and Operating Results — Segment Operating
Results” for further information about the operating
environment for each of our business segments.

Critical Accounting Policies
Fair Value
Fair Value Hierarchy. Trading assets and liabilities,
certain investments and loans, and certain other financial
assets and liabilities, are included in our consolidatedbalance sheets at fair value (i.e., marked-to-market), withrelated gains or losses generally recognized in ourconsolidated statements of earnings. The use of fair value tomeasure financial instruments is fundamental to our risk
management practices and is our most critical accounting
policy.
The fair value of a financial instrument is the amount thatwould be received to sell an asset or paid to transfer aliability in an orderly transaction between market
participants at the measurement date. We measure certain
financial assets and liabilities as a portfolio (i.e., based on
its net exposure to market and/or credit risks). In
determining fair value, the hierarchy under U.S. generally
accepted accounting principles (U.S. GAAP) gives (i) the
highest priority to unadjusted quoted prices in active
markets for identical, unrestricted assets or liabilities(level 1 inputs), (ii) the next priority to inputs other thanlevel 1 inputs that are observable, either directly or
indirectly (level 2 inputs), and (iii) the lowest priority to
inputs that cannot be observed in market activity (level 3
inputs). In evaluating the significance of a valuation input,
we consider, among other factors, a portfolio’s net risk
exposure to that input. Assets and liabilities are classified intheir entirety based on the lowest level of input that issignificant to their fair value measurement.
The fair values for substantially all of our financial assets
and liabilities are based on observable prices and inputs andare classified in levels 1 and 2 of the fair value hierarchy.
Certain level 2 and level 3 financial assets and liabilities
may require appropriate valuation adjustments that amarket participant would require to arrive at fair value forfactors, such as counterparty and our credit quality,
funding risk, transfer restrictions, liquidity and bid/offer
spreads.

Instruments classified in level 3 of the fair value hierarchy
are those which require one or more significant inputs thatare not observable. Level 3 financial assets represented
1.8% as of June 2021, 2.1% as of March 2021 and 2.3% asof December 2020, of our total assets. See Notes 4 through10 to the consolidated financial statements for further
information about level 3 financial assets, includingchanges in level 3 financial assets and related fair value
measurements. Absent evidence to the contrary,
instruments classified in level 3 of the fair value hierarchy
are initially valued at transaction price, which is considered
to be the best initial estimate of fair value. Subsequent to thetransaction date, we use other methodologies to determine
fair value, which vary based on the type of instrument.
Estimating the fair value of level 3 financial instruments
requires judgments to be made. These judgments include:‰ Determining the appropriate valuation methodology and/or model for each type of level 3 financial instrument;‰ Determining model inputs based on an evaluation of all
relevant empirical market data, including prices
evidenced by market transactions, interest rates, credit
spreads, volatilities and correlations; and‰ Determining appropriate valuation adjustments, including
those related to illiquidity or counterparty credit quality.
Regardless of the methodology, valuation inputs andassumptions are only changed when corroborated bysubstantive evidence.
Controls Over Valuation of Financial Instruments.
Market makers and investment professionals in ourrevenue-producing units are responsible for pricing ourfinancial instruments. Our control infrastructure isindependent of the revenue-producing units and isfundamental to ensuring that all of our financial
instruments are appropriately valued at market-clearing
levels. In the event that there is a difference of opinion insituations where estimating the fair value of financial
instruments requires judgment (e.g., calibration to market
comparables or trade comparison, as described below), thefinal valuation decision is made by senior managers inindependent risk oversight and control functions. This
independent price verification is critical to ensuring that our
financial instruments are properly valued.
Price Verification. All financial instruments at fair value
classified in levels 1, 2 and 3 of the fair value hierarchy are
subject to our independent price verification process. The
objective of price verification is to have an informed andindependent opinion with regard to the valuation offinancial instruments under review. Instruments that haveone or more significant inputs which cannot be
corroborated by external market data are classified inlevel 3 of the fair value hierarchy. Price verification
strategies utilized by our independent risk oversight andcontrol functions include:
Goldman Sachs June 2021 Form 10-Q 100

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis‰ Trade Comparison. Analysis of trade data (both internaland external, where available) is used to determine themost relevant pricing inputs and valuations.
‰ External Price Comparison. Valuations and prices arecompared to pricing data obtained from third parties(e.g., brokers or dealers, IHS Markit, Bloomberg, IDC,
TRACE). Data obtained from various sources iscompared to ensure consistency and validity. Whenbroker or dealer quotations or third-party pricing
vendors are used for valuation or price verification,
greater priority is generally given to executablequotations.
‰ Calibration to Market Comparables. Market-basedtransactions are used to corroborate the valuation of
positions with similar characteristics, risks andcomponents.
‰ Relative Value Analyses. Market-based transactions
are analyzed to determine the similarity, measured interms of risk, liquidity and return, of one instrument
relative to another or, for a given instrument, of one
maturity relative to another.
‰ Collateral Analyses. Margin calls on derivatives areanalyzed to determine implied values, which are used tocorroborate our valuations.
‰ Execution of Trades. Where appropriate, marketmaking desks are instructed to execute trades in order toprovide evidence of market-clearing levels.
‰ Backtesting. Valuations are corroborated
comparison to values realized upon sales.

by

See Note 4 to the consolidated financial statements forfurther information about fair value measurements.
Review of Net Revenues. Independent risk oversight andcontrol functions ensure adherence to our pricing policy
through a combination of daily procedures, including the
explanation and attribution of net revenues based on theunderlying factors. Through this process, we independently
validate net revenues, identify and resolve potential fair value
or trade booking issues on a timely basis and seek to ensurethat risks are being properly categorized and quantified.
Review of Valuation Models. Our independent model risk
management group (Model Risk), consisting of quantitative
professionals who are separate from model developers,
performs an independent model review and validation
process of our valuation models. New or changed models arereviewed and approved prior to implementation. Models arereviewed annually to assess the impact of any changes in the
product or market and any market developments in pricing
theories. See “Risk Management — Model Risk
Management” for further information about the review andvalidation of our valuation models.
101 Goldman Sachs June 2021 Form 10-Q

Allowance for Credit Losses
We estimate and record an allowance for credit losses related
to our loans held for investment that are accounted for atamortized cost. To determine the allowance for credit losses,
we classify our loans accounted for at amortized cost into
wholesale and consumer portfolios. These portfolios
represent the level at which we have developed anddocumented our methodology to determine the allowancefor credit losses. The allowance for credit losses is measured
on a collective basis for loans that exhibit similar risk
characteristics using a modeled approach and asset-specificbasis for loans that do not share similar risk characteristics.
The allowance for credit losses also includes qualitative
components which allow management to reflect theuncertain nature of economic forecasting, capture
uncertainty regarding model inputs, and account for model
imprecision and concentration risk. The determination ofallowance for credit losses entails significant judgment onvarious risk factors. Risk factors for wholesale loans include
internal credit ratings, industry default and loss data,
expected
life,
macroeconomic
indicators(e.g.,
unemployment rates and GDP), the borrower’s capacity tomeet its financial obligations, the borrower’s country of risk
and industry, loan seniority and collateral type. In addition,
for loans backed by real estate, risk factors include
loan-to-value ratio, debt service ratio and home price index.
Risk factors for installment and credit card loans include Fair
Isaac Corporation (FICO) credit scores, delinquency status,
loan vintage and macroeconomic indicators.
Our estimate of credit losses entails judgment aboutcollectability at the reporting dates, and there areuncertainties inherent in those judgments. The allowance for
credit losses is subject to a governance process that involves
review and approval by senior management within our
independent risk oversight and control functions. Personnel
within our independent risk oversight and control functions
are responsible for forecasting the economic variables that
underlie the economic scenarios that are used in the modelingof expected credit losses. While we use the best information
available to determine this estimate, future adjustments tothe allowance may be necessary based on, among otherthings, changes in the economic environment or variances
between actual results and the original assumptions used.
Loans are charged off against the allowance for loan losses
when deemed to be uncollectible.
We also record an allowance for credit losses on lending
commitments which are held for investment that are
accounted for at amortized cost. Such allowance isdetermined using the same methodology as the allowance
for loan losses, while also taking into consideration theprobability of drawdowns or funding, and whether suchcommitments are cancellable by us. See Note 9 to theconsolidated financial statements for further information
about the allowance for credit losses.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Use of Estimates
U.S. GAAP requires us to make certain estimates andassumptions. In addition to the estimates we make inconnection with fair value measurements and the allowancefor credit losses on loans and lending commitments held forinvestment and accounted for at amortized cost, the use of
estimates and assumptions is also important in determining
discretionary compensation accruals, the accounting for
goodwill and identifiable intangible assets, provisions forlosses that may arise from litigation and regulatory
proceedings (including governmental investigations), andprovisions for losses that may arise from tax audits.
A substantial portion of our compensation and benefits
represents discretionary compensation, which is finalized at
year-end. We believe the most appropriate way to allocate
estimated year-end discretionary compensation amonginterim periods is in proportion to the net revenues earnedin such periods. In addition to the level of net revenues, ouroverall compensation expense in any given year is also
influenced by, among other factors, overall financial
performance, prevailing labor markets, business mix, thestructure of our share-based compensation programs andthe external environment.
Goodwill is assessed for impairment annually in the fourth
quarter or more frequently if events occur or circumstanceschange that indicate an impairment may exist. Whenassessing goodwill for impairment, first, a qualitative
assessment can be made to determine whether it is more
likely than not that the estimated fair value of a reporting
unit is less than its estimated carrying value. If the results of
the qualitative assessment are not conclusive, a quantitative
goodwill test is performed. Alternatively, a quantitative
goodwill test can be performed without performing aqualitative assessment.
Estimating the fair value of our reporting units requires
judgment. Critical inputs to the fair value estimates include
projected earnings and allocated equity. There is inherent
uncertainty in the projected earnings. The estimatedcarrying value of each reporting unit reflects an allocationof total shareholders’ equity and represents the estimatedamount of total shareholders’ equity required to support
the activities of the reporting unit under currently
applicable regulatory capital requirements. See Note 12 tothe consolidated financial statements for further
information about goodwill.
If we experience a prolonged or severe period of weakness
in the business environment, financial markets, ourperformance or our common stock price, or additional
increases in capital requirements, our goodwill could be
impaired in the future.

Identifiable intangible assets are tested for impairment
when events or changes in circumstances suggest that an
asset’s or asset group’s carrying value may not be fully
recoverable. Judgment is required to evaluate whether
indications of potential impairment have occurred, and totest intangible assets for impairment, if required. An
impairment is recognized if the estimated undiscounted
cash flows relating to the asset or asset group is less than thecorresponding carrying value. See Note 12 to theconsolidated financial statements for further information
about identifiable intangible assets.
We also estimate and provide for potential losses that may
arise out of litigation and regulatory proceedings to theextent that such losses are probable and can be reasonably
estimated. In addition, we estimate the upper end of therange of reasonably possible aggregate loss in excess of therelated reserves for litigation and regulatory proceedings
where we believe the risk of loss is more than slight. See
Notes 18 and 27 to the consolidated financial statements
for information about certain judicial, litigation andregulatory proceedings. Significant judgment is required in
making these estimates and our final liabilities may
ultimately be materially different. Our total estimatedliability in respect of litigation and regulatory proceedings isdetermined on a case-by-case basis and represents anestimate of probable losses after considering, among otherfactors, the progress of each case, proceeding orinvestigation, our experience and the experience of othersin similar cases, proceedings or investigations, and theopinions and views of legal counsel.
In accounting for income taxes, we recognize tax positionsin the financial statements only when it is more likely than
not that the position will be sustained on examination by
the relevant taxing authority based on the technical meritsof the position. See Note 24 to the consolidated financial
statements for further information about income taxes.

Recent Accounting Developments
See Note 3 to the consolidated financial statements for
information about Recent Accounting Developments.

Results of Operations
The composition of our net revenues has varied over time asfinancial markets and the scope of our operations havechanged. The composition of net revenues can also varyover the shorter term due to fluctuations in U.S. and global
economic and market conditions. See “Risk Factors” inPart I, Item 1A of the 2020 Form 10-K for further
information about the impact of economic and market
conditions on our results of operations.
Goldman Sachs June 2021 Form 10-Q 102

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Financial Overview
The table below presents an overview of our financial
results and selected financial ratios.

The table below presents our average equity and thereconciliation of average common shareholders’ equity
to average tangible common shareholders’ equity.
Average for theThree Months
Ended June
$ in millions, except per share amounts

2021

2020

Net revenues$15,388 $13,295
Pre-tax earnings$ 6,840 $ 1,291
Net earnings$ 5,486 $ 373
Net earnings to common$ 5,347 $ 197
Diluted EPS$ 15.02 $ 0.53
ROE
23.7%
1.0%
ROTE
25.1%
1.0%
Net earnings to average assets
1.6%
0.1%
Return on average shareholders’ equity 22.1%
1.6%
Average equity to average assets
7.3%
8.1%
Dividend payout ratio
8.3% 235.8%

Six Months
Ended June
2021

2020

$33,092 $22,038$15,177 $ 2,639$12,322 $ 1,586$12,058 $ 1,320$ 33.64 $ 3.66
27.3%
3.3%
28.9%
3.5%
1.9%
0.3%
25.2%
3.5%
7.5%
8.3%
7.4% 68.3%

In the table above:‰ Net earnings to common represents net earnings
applicable to common shareholders, which is calculated
as net earnings less preferred stock dividends.
‰ ROE, return on average tangible common shareholders’equity (ROTE), net earnings to average assets and returnon average shareholders’ equity are annualized amounts.
‰ Average equity to average assets is calculated by dividing
average total shareholders’ equity by average total assets.
‰ Dividend payout ratio is calculated by dividing dividends
declared per common share by diluted EPS.
‰ Annualized ROE is calculated by dividing annualized net
earnings to common by average monthly commonshareholders’ equity. Tangible common shareholders’equity is calculated as total shareholders’ equity lesspreferred stock, goodwill and identifiable intangible
assets. Annualized ROTE is calculated by dividing
annualized net earnings to common by average monthly
tangible common shareholders’ equity. We believe thattangible common shareholders’ equity is meaningful
because it is a measure that we and investors use to assess
capital adequacy and that ROTE is meaningful because itmeasures the performance of businesses consistently,
whether they were acquired or developed internally.
Tangible common shareholders’ equity and ROTE are
non-GAAP measures and may not be comparable tosimilar non-GAAP measures used by other companies.
Annualized return on average shareholders’ equity is
calculated by dividing annualized net earnings by averagemonthly shareholders’ equity.

103 Goldman Sachs June 2021 Form 10-Q

$ in millions

Three Months
Ended June

Six Months
Ended June

2021

2021

2020

2020

Total shareholders’ equity$ 99,294 $ 91,802 $ 97,735 $ 90,956
Preferred stock(9,203) (11,203)(9,489) (11,203)
Common shareholders’ equity
90,09180,59988,24679,753
Goodwill(4,332)(4,196)(4,332)(4,196)
Identifiable intangible assets
(552)
(610)
(581)
(618)
Tangible common shareholders’ equity $ 85,207 $ 75,793 $ 83,333 $ 74,939

Net Revenues
The table below presents our net revenues by line item.

$ in millions

Investment banking
Investment management
Commissions and fees
Market making
Other principal transactions
Total non-interest revenues
Interest income
Interest expense
Net interest income
Total net revenues

Three Months
Ended June

Six Months
Ended June

2021

2021

2020

2020

$ 3,450 $ 2,733 $ 7,016 $ 4,475
1,905
1,635
3,701
3,403
833
875
1,906
1,895
3,274
5,787
9,167
9,469
4,297
1,321
8,191
539
13,759 12,351 29,981 19,781
2,939
3,034
5,993
7,784
1,310
2,090
2,882
5,527
1,629
944
3,111
2,257
$15,388 $ 13,295 $ 33,092 $ 22,038

In the table above:‰ Investment banking consists of revenues (excluding net
interest) from financial advisory and underwriting
assignments. These activities are included in our
Investment Banking segment.
‰ Investment management consists of revenues (excluding
net interest) from providing asset management services
across all major asset classes to a diverse set of asset
management clients (included in our Asset Management
segment), as well as asset management services, wealthadvisory services and certain transaction services for
wealth management clients (included in our Consumer &Wealth Management segment).
‰ Commissions and fees consists of revenues fromexecuting and clearing client transactions on major stock,
options and futures exchanges worldwide, as well as
over-the-counter (OTC) transactions. These activities areincluded in our Global Markets and Consumer & WealthManagement segments.
‰ Market making consists of revenues (excluding net interest)
from client execution activities related to making markets ininterest rate products, credit products, mortgages,
currencies, commodities and equity products. These
activities are included in our Global Markets segment.
‰ Other principal transactions consists of revenues(excluding net interest) from our equity investing activities,
including revenues related to our consolidated investments(included in our Asset Management segment), and lending
activities (included across our four segments).

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Operating Environment. During the second quarter of2021, economic recovery, the lifting of health and safety
restrictions in parts of the world amid vaccine distribution,and continued monetary and fiscal support from central
banks and governments provided a favorable market
backdrop. These factors contributed to generally higher
global equity prices compared with the first quarter of2021, a supportive environment for alternative
investments, elevated investment banking activity levels,and more modest yet solid market-making activity levels.
If optimism about the economic outlook declines or theongoing efforts to mitigate the impact of the COVID-19
pandemic are ineffective (including due to new variants orcomplications with the vaccine distribution), it may lead toworsened economic conditions for alternative investments,
a further decline in market-making activity levels, a decline
in investment banking activity levels, and a decline in global
equity markets, and net revenues and the provision for
credit losses would likely be negatively impacted. See“Segment Assets and Operating Results — Segment
Operating Results” for information about the operating
environment and material trends and uncertainties that
may impact our results of operations.
Three Months Ended June 2021 versus June 2020. Net
revenues in the consolidated statements of earnings were
$15.39 billion for the second quarter of 2021, 16% higher
than the second quarter of 2020, reflecting significantly
higher other principal transactions, investment banking
revenues and net interest income, and higher investment
management revenues, partially offset by significantly
lower market making revenues.
Non-Interest Revenues. Investment banking revenues in
the consolidated statements of earnings were $3.45 billion
for the second quarter of 2021, 26% higher than the second
quarter of 2020, reflecting significantly higher revenues infinancial advisory, reflecting an increase in completed
mergers and acquisitions transactions, and higher revenues
in equity underwriting, primarily driven by strong industrywide initial public offering activity, partially offset by asignificant decline in industry-wide secondary offerings.
These increases were partially offset by slightly lower
revenues in debt underwriting, primarily reflecting
significantly lower industry-wide investment-grade
volumes, partially offset by elevated industry-wide
leveraged finance volumes.
Investment management revenues in the consolidated
statements of earnings were $1.91 billion for the second
quarter of 2021, 17% higher than the second quarter of
2020, primarily due to higher management and other fees,
reflecting the impact of higher average assets under
supervision (AUS), partially offset by fee waivers on money
market funds.

Commissions and fees in the consolidated statements ofearnings were $833 million for the second quarter of 2021,
slightly lower than the second quarter of 2020.
Market making revenues in the consolidated statements ofearnings were $3.27 billion for the second quarter of 2021,
43% lower than the second quarter of 2020, primarily due
to significantly lower revenues in interest rate products,
credit products, equity products (primarily in cash
products), commodities and currencies.
Other principal transactions revenues in the consolidated
statements of earnings were $4.30 billion for the second
quarter of 2021, compared with $1.32 billion for thesecond quarter of 2020, primarily reflecting significantly
higher net gains from investments in private equities, driven
by company-specific events, including capital raises andsales, and improved corporate performance versus achallenging second quarter of 2020.
Net Interest Income. Net interest income in the
consolidated statements of earnings was $1.63 billion forthe second quarter of 2021, 73% higher than the second
quarter of 2020, reflecting a decrease in interest expense
primarily related to long-term borrowings and deposits,
both reflecting the impact of lower interest rates. The
decrease in interest expense was partially offset by adecrease in interest income primarily related tocollateralized agreements and trading assets, both reflecting
the impact of lower interest rates partially offset by the
impact of higher average balances for other interest-earning
assets. See “Statistical Disclosures — Distribution of Assets,
Liabilities and Shareholders’ Equity” for further
information about our sources of net interest income.
Six Months Ended June 2021 versus June 2020. Net
revenues in the consolidated statements of earnings were$33.09 billion for the first half of 2021, 50% higher than
the first half of 2020, due to significantly higher otherprincipal transactions and investment banking revenues
and, to a lesser extent, net interest income.
Non-Interest Revenues. Investment banking revenues in
the consolidated statements of earnings were $7.02 billion
for the first half of 2021, 57% higher than the first half of2020, reflecting significantly higher revenues in equity
underwriting, primarily driven by strong industry-wide
initial public offering activity, and in financial advisory,reflecting a significant increase in completed mergers andacquisitions transactions, as well as higher revenues in debt
underwriting, reflecting elevated industry-wide leveraged
finance activity.

Goldman Sachs June 2021 Form 10-Q 104

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Investment management revenues in the consolidated
statements of earnings were $3.70 billion for the first half of2021, 9% higher than the first half of 2020, due to higher
management and other fees, reflecting the impact of higher
average assets under supervision, partially offset by fee
waivers on money market funds.
Commissions and fees in the consolidated statements ofearnings were $1.91 billion for the first half of 2021,
essentially unchanged compared with the first half of 2020.
Market making revenues in the consolidated statements ofearnings were $9.17 billion for the first half of 2021,
slightly lower than a strong first half of 2020, as
significantly lower revenues in interest rate products andcredit products were largely offset by significantly higher
revenues in equity products (primarily in derivatives) and in
mortgages.
Other principal transactions revenues in the consolidated
statements of earnings were $8.19 billion for the first half of2021, compared with $539 million for the first half of2020, primarily reflecting significantly higher net gains
from investments in private equities, driven by companyspecific events, including capital raises and sales, andimproved corporate performance versus a challenging firsthalf of 2020. In addition, net gains from investments inpublic equities and debt investments were significantly
higher.
Net Interest Income. Net interest income in the
consolidated statements of earnings was $3.11 billion for
the first half of 2021, 38% higher than the first half of2020, reflecting a decrease in interest expense related toother interest-bearing liabilities, deposits, long-termborrowings and collateralized financings, each reflecting
the impact of lower interest rates, partially offset by the
impact of higher average balances in trading liabilities. The
decrease in interest expense was partially offset by adecrease in interest income primarily related tocollateralized agreements, trading assets and deposits withbanks, each reflecting the impact of lower interest rates. See“Statistical Disclosures — Distribution of Assets, Liabilities
and Shareholders’ Equity” for further information about
our sources of net interest income.
Provision for Credit Losses
Provision for credit losses consists of provision for credit
losses on loans and lending commitments held forinvestment and accounted for at amortized cost. See Note 9
to the consolidated financial statements for further
information about the provision for credit losses.

The table below presents our provision for credit losses.
Three Months
Ended June
$ in millions

Provision for credit losses

2020(92) $ 1,590 $

2021

2020

(162) $ 2,527

Three Months Ended June 2021 versus June 2020.
Provision for credit losses in the consolidated statements ofearnings was a net benefit of $92 million for the second
quarter of 2021, compared with net provisions of$1.59 billion for the second quarter of 2020. The second
quarter of 2021 included reserve reductions on wholesaleand consumer loans reflecting continued improvement in
the broader economic environment following challenging
conditions that began in the first half of 2020 as a result of
the COVID-19 pandemic, partially offset by provisions
related to portfolio growth (primarily in credit cards).
Six Months Ended June 2021 versus June 2020.
Provision for credit losses in the consolidated statements ofearnings was a net benefit of $162 million for the first halfof 2021, compared with net provisions of $2.53 billion for
the first half of 2020. The first half of 2021 included reserve
reductions on wholesale and consumer loans reflecting
continued improvement in the broader economic
environment following challenging conditions that began in
the first half of 2020 as a result of the COVID-19
pandemic, partially offset by provisions related to portfolio
growth (primarily in credit cards, including $185 million ofprovisions related to the pending acquisition of the General
Motors co-branded credit card portfolio).
Operating Expenses
Our operating expenses are primarily influenced bycompensation, headcount and levels of business activity.
Compensation and benefits includes salaries, estimatedyear-end discretionary compensation, amortization ofequity awards and other items such as benefits.
Discretionary compensation is significantly impacted by,among other factors, the level of net revenues, overall
financial performance, prevailing labor markets, businessmix, the structure of our share-based compensation
programs and the external environment.
The table below presents our operating expenses by line
item and headcount.

$ in millions

Three Months
Ended June

Six Months
Ended June

2021

2021

2020

2020

Compensation and benefits$ 5,263 $ 4,478 $11,306 $ 7,713
Transaction based
1,125
1,014
2,381
2,044
Market development
115
89
195
242
Communications and technology
371
345
746
666
Depreciation and amortization
520
499
1,018
936
Occupancy
241
233
488
471
Professional fees
344
311
704
658
Other expenses
661
3,445
1,239
4,142
Total operating expenses$ 8,640 $10,414 $18,077 $16,872
Headcount at period-end

105 Goldman Sachs June 2021 Form 10-Q

2021

$

Six Months
Ended June

40,80039,100THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
In the table above, brokerage, clearing, exchange anddistribution fees was renamed transaction based (beginningin the fourth quarter of 2020) and additionally includes
expenses resulting from completed transactions, which are
directly related to client revenues. Such expenses werepreviously reported in other expenses. Previously reported
amounts have been conformed to the current presentation.
Three Months Ended June 2021 versus June 2020.
Operating expenses in the consolidated statements of earnings
were $8.64 billion for the second quarter of 2021, 17% lower
than the second quarter of 2020. Our efficiency ratio (total
operating expenses divided by total net revenues) for thesecond quarter of 2021 was 56.1%, compared with 78.3% for
the second quarter of 2020. In the second quarter of 2020, net
provisions for litigation and regulatory proceedings increased
our efficiency ratio by 22.2 percentage points.
The decrease in operating expenses compared with thesecond quarter of 2020 was due to significantly lower
non-compensation expenses, partially offset by higher
compensation and benefits expenses (reflecting strong
performance). Within non-compensation expenses, net
provisions for litigation and regulatory proceedings weresignificantly lower, partially offset by higher transaction
based expenses and higher technology expenses (included incommunications and technology and depreciation andamortization).
Net provisions for litigation and regulatory proceedings forthe second quarter of 2021 were $226 million comparedwith $2.96 billion for the second quarter of 2020.
As of June 2021, headcount was essentially unchanged
compared with March 2021.
Six Months Ended June 2021 versus June 2020.
Operating expenses in the consolidated statements ofearnings were $18.08 billion for the first half of 2021, 7%
higher than the first half of 2020. Our efficiency ratio (total
operating expenses divided by total net revenues) for the
first half of 2021 was 54.6%, compared with 76.6% for the
first half of 2020. In the first half of 2020, net provisions forlitigation and regulatory proceedings increased our
efficiency ratio by 14.3 percentage points.
The increase in operating expenses compared with the firsthalf of 2020 was due to significantly higher compensation
and benefits expenses (reflecting strong performance),
partially offset by significantly lower non-compensation
expenses. Within non-compensation expenses, net provisions
for litigation and regulatory proceedings were significantly
lower, partially offset by higher transaction based expenses
and higher technology expenses (included in communications
and technology and depreciation and amortization).
Net provisions for litigation and regulatory proceedings forthe first half of 2021 were $300 million compared with
$3.14 billion for the first half of 2020.

As of June 2021, headcount was essentially unchanged
compared with December 2020.
Provision for Taxes
The effective income tax rate for the first half of 2021 was
18.8%, down from the full year income tax rate of 24.2% for2020, primarily due to a decrease in provisions fornon-deductible litigation in the first half of 2021 comparedwith 2020. The increase compared with 18.0% for the firstquarter of 2021 was primarily due to a decrease in the impactof tax benefits on the settlement of share-based awards in thefirst half of 2021 compared with the first quarter of 2021.
In March 2021, the American Rescue Plan Act of 2021
(Rescue Plan) was signed into law. The Rescue Plan is a
$1.9 trillion stimulus package enacted to help address the
economic and health impacts of the COVID-19 pandemic.
The Rescue Plan includes a repeal of a provision under which
U.S. affiliated groups could elect a worldwide allocation ofinterest expense for foreign tax credit limitation purposes for
one year beginning in January 2021. Additionally, beginningin 2027, the limitation on corporate tax deductions forcompensation payable to the CEO, CFO and the top threehighest paid employees will be expanded to include the next
five highest paid employees. The legislation is not expected tohave a material impact on our 2021 annual effective tax rate.
In April 2021, the New York State (NYS) FY 2022 budget
was enacted. The legislation temporarily increased the NYS
corporate income tax rate from 6.5% to 7.25% for calendar
years 2021 through 2023. The legislation is not expected tohave a material impact on our 2021 annual effective tax rate.
The U.K. Finance Act 2021 was enacted in June 2021 andincludes a six percent increase in the corporate income tax rate
effective from April 2023. During the second quarter of 2021,
U.K. deferred tax assets and liabilities were remeasured and adeferred tax benefit of approximately $100 million wasrecognized. Following the increase in the U.K. corporate tax
rate, the U.K. government has indicated that it will undertake areview of the eight percent bank surcharge in order to ensurethat the combined tax burden on banks does not rise
substantially. The results of the review, including any changes
to the bank surcharge, will be announced in the second half of2021 and legislated as Finance Bill 2021-22. The banksurcharge is currently applicable to certain of our U.K.
subsidiaries and branches, including Goldman Sachs
International (GSI) and Goldman Sachs International Bank
(GSIB). Following Royal Assent, the associated impact of any
change to the bank surcharge on U.K. deferred tax assets andliabilities could have a material impact on our effective tax
rate, depending on the operating results for the quarter during
which this legislation is enacted.
We expect our tax rate for the remainder of 2021 to beapproximately 21%, excluding the impact of any potentialchanges in current income tax rates.
Goldman Sachs June 2021 Form 10-Q 106

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Segment Assets and Operating Results
Segment Assets. The table below presents assets bysegment.
As of
June
2021

December2020$ 145,836
1,025,631
96,605
119,850$1,387,922$ 116,242
844,606
95,751
106,429$1,163,028$ in millions

Investment Banking
Global Markets
Asset Management
Consumer & Wealth Management
Total

The allocation process for segment assets is based on theactivities of these segments. The allocation of assets
includes allocation of global core liquid assets (GCLA)(which consists of unencumbered, highly liquid securities
and cash), which is generally included within cash and cash
equivalents, collateralized agreements and trading assets on
our balance sheet. Due to the integrated nature of thesesegments, estimates and judgments are made in allocatingthese assets. See “Risk Management — Liquidity Risk
Management” for further information about our GCLA.
Segment Operating Results. The table below presents
our segment operating results.

$ in millions

Three Months
Ended June

Six Months
Ended June

2021

2021

2020

2020

Investment Banking
Net revenues
Provision for credit losses
Operating expenses
Pre-tax earnings/(loss)
Net earnings/(loss) to common
Average common equity
Return on average common equity$ 3,609 $ 2,657 $ 7,380 $ 4,841
(107)
819
(270)
1,441
1,955
2,704
3,818
3,873
$ 1,761 $ (866) $ 3,832 $ (473)$ 1,393 $ (662) $ 3,072 $ (319)$ 9,792 $11,070 $10,078 $11,141
56.9% (23.9)%
61.0% (5.7)%

Global Markets
Net revenues
Provision for credit losses
Operating expenses
Pre-tax earnings
Net earnings to common
Average common equity
Return on average common equity$ 4,900
14
3,373$ 1,513$ 1,121$44,430
10.1%$ 7,176
183
5,179$ 1,814$ 305$42,702
2.9%$12,481 $12,339
(6)
251
7,558
8,026
$ 4,929 $ 4,062$ 3,851 $ 2,269$42,741 $40,970
18.0% 11.1%

Asset Management
Net revenues
Provision for credit losses
Operating expenses
Pre-tax earnings/(loss)
Net earnings/(loss) to common
Average common equity
Return on average common equity$ 5,132 $ 2,101
(65)
271
1,943
1,332
$ 3,254 $ 498$ 2,592 $ 684$25,410 $19,322
40.8% 14.2%$ 9,746 $ 2,005
(12)
350
3,833
2,530
$ 5,925 $ (875)$ 4,757 $ (566)$25,092 $20,371
37.9% (5.6)%

Consumer & Wealth Management
Net revenues$ 1,747
Provision for credit losses
66
Operating expenses
1,369
Pre-tax earnings/(loss)$ 312
Net earnings/(loss) to common$ 241
Average common equity$10,459Return on average common equity
9.2%$ 1,361 $ 3,485
317
126
1,199
2,868
$ (155) $ 491$ (130) $ 378$ 7,505 $10,335(6.9)%
7.3%

Total net revenues$15,388 $13,295
Total provision for credit losses
(92)
1,590
Total operating expenses
8,640 10,414
Total pre-tax earnings$ 6,840 $ 1,291
Net earnings to common$ 5,347 $ 197
Average common equity$90,091 $80,599
Return on average common equity 23.7%
1.0%

107 Goldman Sachs June 2021 Form 10-Q

Net revenues in our segments include allocations of interest
income and expense to specific positions in relation to the
cash generated by, or funding requirements of, such
positions. See Note 25 to the consolidated financial
statements for further information about our businesssegments.
The allocation of common shareholders’ equity and preferredstock dividends to each segment is based on the estimatedamount of equity required to support the activities of thesegment under relevant regulatory capital requirements. Net
earnings for each segment is calculated by applying thefirmwide tax rate to each segment’s pre-tax earnings.
The allocation of common equity among our segments for thesecond quarter and first half of 2021 reflects updates to ourattributed equity framework (effective January 1, 2021) toincorporate the impact of the stress capital buffer (SCB) ruleand our SCB of 6.6%, which became effective on
October 1, 2020 under the Standardized Approach. See“Equity Capital Management and Regulatory Capital —Equity Capital Management” for information about the
impact of these updates on the allocation of attributed equity
among our segments as of the beginning of the first quarter of2021. The average common equity balances above
incorporate such impact, as well as the changes in the size andcomposition of assets held in each of our segments that
occurred during the second quarter and first half of 2021. See“Equity Capital Management and Regulatory Capital —Equity Capital Management” for information about our
updated SCB, which will become effective on October 1, 2021.
Compensation and benefits expenses within our segments
reflect, among other factors, our overall performance, as
well as the performance of individual businesses.
Consequently, pre-tax margins in one segment of ourbusiness may be significantly affected by the performanceof our other business segments. A description of segment
operating results follows.
Investment Banking
Investment Banking generates revenues from the following:‰ Financial advisory. Includes strategic advisory
assignments with respect to mergers and acquisitions,divestitures, corporate defense activities, restructuringsand spin-offs.

$ 2,853
485
2,443
$
(75)
$
(64)
$ 7,271(1.8)%‰ Underwriting. Includes public offerings and private
placements, including local and cross-border transactions
and acquisition financing, of a wide range of securities
and other financial instruments, including loans.

$33,092 $22,038
(162)
2,527
18,077 16,872$15,177 $ 2,639$12,058 $ 1,320$88,246 $79,753
27.3%
3.3%

‰ Corporate lending. Includes lending to corporateclients, including through relationship lending, middlemarket lending and acquisition financing. We also
provide transaction banking services to certain of ourcorporate clients.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
The table below presents our Investment Banking assets.
As of
June
2021

December2020$ 63,903
18,795
9,762
25,8791,441
24,136
1,920$145,836$ 34,730
20,242
2,465
29,493
1,078
26,544
1,690$116,242$ in millions

Cash and cash equivalents
Collateralized agreements
Customer and other receivables
Trading assets
Investments
Loans
Other assets
Total

The table below presents our Investment Banking operating
results.

$ in millions

Three Months
Ended June

Six Months
Ended June

2021

2021

2020

2020

Financial advisory
Equity underwriting
Debt underwriting
Underwriting
Corporate lending
Net revenues
Provision for credit losses
Operating expenses
Pre-tax earnings/(loss)
Provision/(benefit) for taxes
Net earnings/(loss)
Preferred stock dividends
Net earnings/(loss) to common$1,257 $ 686 $ 2,374 $ 1,467
1,243
1,057
2,812
1,435
950
990
1,830
1,573
2,193
2,047
4,642
3,008
159
(76)
364
366
3,609
2,657
7,380
4,841
(107)
819
(270) 1,441
1,955
2,704
3,818
3,873
1,761
(866)
3,832
(473)
348
(227)
721
(188)
1,413
(639)
3,111
(285)
20
23
39
34
$1,393 $ (662) $ 3,072 $ (319)

Average common equity
Return on average common equity$9,792 $11,070 $10,078 $11,141
56.9% (23.9)%
61.0% (5.7)%

The table below presents our financial advisory andunderwriting transaction volumes.
Three Months
Ended June
$ in billions

2021

Announced mergers and acquisitions $ 607 $Completed mergers and acquisitions $ 296 $Equity and equity-related offerings$ 35 $
Debt offerings$ 89 $Six Months
Ended June

2020

61
412
40
115

$
$
$
$

2021

2020

975 $
609 $
85 $
182 $

282
610
52
208

In the table above:‰ Volumes are per Dealogic.
‰ Announced and completed mergers and acquisitions
volumes are based on full credit to each of the advisors ina transaction. Equity and equity-related offerings anddebt offerings are based on full credit for single book
managers and equal credit for joint book managers.
Transaction volumes may not be indicative of net
revenues in a given period. In addition, transaction
volumes for prior periods may vary from amounts
previously reported due to the subsequent withdrawal ora change in the value of a transaction.
‰ Equity and equity-related offerings includes Rule 144A
and public common stock offerings, convertible offerings
and rights offerings.

Operating Environment. During the second quarter of2021, Investment Banking operated in an environment
characterized by strong industry-wide activity acrossmergers and acquisitions and underwriting, as the global
economy continued to recover. In mergers and acquisitions,industry-wide completed and announced transactions
remained at high levels, reflecting supportive market
conditions and CEO confidence. In underwriting, industrywide activity levels reflected continued strength in equity
underwriting, particularly in initial public offerings, anddebt underwriting, reflecting elevated leveraged financevolumes.
In the future, if market and economic conditions
deteriorate, and industry-wide mergers and acquisitionstransactions decline, or if industry-wide equity and debt
underwriting volumes decline, or credit spreads related tohedges on our relationship lending portfolio tighten, net
revenues in Investment Banking would likely be negatively
impacted. In addition, a deterioration in thecreditworthiness of borrowers would negatively impact theprovision for credit losses.
Three Months Ended June 2021 versus June 2020. Net
revenues in Investment Banking were $3.61 billion for thesecond quarter of 2021, 36% higher than the second
quarter of 2020, reflecting significantly higher net revenues
in Financial advisory and Corporate lending and higher net
revenues in Underwriting.
The increase in Financial advisory net revenues reflected anincrease in completed mergers and acquisitionstransactions. The increase in Corporate lending net
revenues primarily reflected higher net interest income. The
increase in Underwriting net revenues was due to higher net
revenues in Equity underwriting, primarily driven by strong
industry-wide initial public offering activity, partially offset
by a significant decline in industry-wide secondaryofferings. Debt underwriting net revenues were slightly
lower, primarily reflecting significantly lower industry-wide
investment-grade volumes, partially offset by elevatedindustry-wide leveraged finance volumes.
Provision for credit losses was a net benefit of $107 million
for the second quarter of 2021, compared with net
provisions of $819 million for the second quarter of 2020,
primarily due to reserve reductions reflecting continued
improvement in the broader economic environment
following challenging conditions that began in the first halfof 2020.

‰ Debt offerings includes non-convertible preferred stock,mortgage-backed securities, asset-backed securities andtaxable municipal debt. Includes publicly registered andRule 144A issues and excludes leveraged loans.
Goldman Sachs June 2021 Form 10-Q 108

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Operating expenses were $1.96 billion for the second
quarter of 2021, 28% lower than the second quarter of
2020, reflecting significantly lower net provisions forlitigation and regulatory proceedings, partially offset bysignificantly higher compensation and benefits expenses(reflecting strong performance). Pre-tax earnings were$1.76 billion for the second quarter of 2021, comparedwith a pre-tax loss of $866 million for the second quarter of2020. Annualized ROE was 56.9% for the second quarterof 2021, compared with (23.9)% for the second quarter of2020 (which included the impact of net provisions forlitigation and regulatory proceedings that reduced
annualized ROE by 38.5 percentage points).
As of June 2021, our investment banking transaction
backlog increased compared with March 2021, due tohigher estimated net revenues across potential financial
advisory transactions, potential equity underwritingtransactions (particularly from initial public offerings) andpotential debt underwriting transactions (particularly fromleveraged finance and investment-grade transactions).
Our backlog represents an estimate of our net revenues
from future transactions where we believe that future
revenue realization is more likely than not. We believe
changes in our backlog may be a useful indicator of client
activity levels which, over the long term, impact our net
revenues. However, the time frame for completion andcorresponding revenue recognition of transactions in our
backlog varies based on the nature of the assignment, as
certain transactions may remain in our backlog for longer
periods of time. In addition, our backlog is subject tocertain limitations, such as assumptions about thelikelihood that individual client transactions will occur inthe future. Transactions may be cancelled or modified, andtransactions not included in the estimate may also occur,
including underwriting transactions for which the timeframe from discussion to completion has shortened in thecurrent environment.
Six Months Ended June 2021 versus June 2020. Net
revenues in Investment Banking were $7.38 billion for the
first half of 2021, 52% higher than the first half of 2020,
due to significantly higher net revenues in Underwriting and
Financial advisory. Net revenues in Corporate lending were
essentially unchanged.
The increase in Underwriting net revenues was due tosignificantly higher net revenues in Equity underwriting,primarily driven by strong industry-wide initial public
offering activity, and higher net revenues in Debt
underwriting, reflecting elevated industry-wide leveraged
finance volumes. The increase in Financial advisory net
revenues reflected a significant increase in completed
mergers and acquisitions transactions.

109 Goldman Sachs June 2021 Form 10-Q

Provision for credit losses was a net benefit of $270 million
for the first half of 2021, compared with net provisions of$1.44 billion for the first half of 2020, primarily due toreserve reductions reflecting continued improvement in the
broader economic environment following challenging
conditions that began in the first half of 2020.
Operating expenses were $3.82 billion for the first half of2021, essentially unchanged compared with the first half of2020 as significantly lower net provisions for litigation andregulatory proceedings were offset by significantly higher
compensation and benefits expenses (reflecting strong
performance). Pre-tax earnings were $3.83 billion for the
first half of 2021, compared with a pre-tax loss of$473 million for the first half of 2020. Annualized ROE
was 61.0% for the first half of 2021, compared with
(5.7)% for the first half of 2020 (which included the impact
of net provisions for litigation and regulatory proceedingsthat reduced annualized ROE by 21.0 percentage points).
As of June 2021, our investment banking transaction
backlogincreasedsignificantly
comparedwith
December 2020, due to significantly higher estimated net
revenues across potential financial advisory transactions,potential debt underwriting transactions (particularly fromleveraged finance and investment-grade transactions) andpotential equity underwriting transactions (primarily frominitial public offerings).
Global Markets
Our Global Markets segment consists of:
FICC. FICC generates revenues from intermediation andfinancing activities.
‰ FICC intermediation. Includes client execution activities
related to making markets in both cash and derivative
instruments, as detailed below.
Interest Rate Products. Government bonds (including
inflation-linked securities) across maturities, othergovernment-backed securities, and interest rate swaps,
options and other derivatives.
Credit Products. Investment-grade and high-yieldcorporate securities, credit derivatives, exchange-tradedfunds (ETFs), bank and bridge loans, municipal
securities, emerging market and distressed debt, andtrade claims.
Mortgages. Commercial mortgage-related securities,
loans and derivatives, residential mortgage-related
securities, loans and derivatives (including U.S.
government agency-issued collateralized mortgage
obligations and other securities and loans), and otherasset-backed securities, loans and derivatives.
Currencies. Currency options, spot/forwards andother derivatives on G-10 currencies and emergingmarket products.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Commodities. Commodity derivatives and, to a lesser
extent, physical commodities, involving crude oil andpetroleum products, natural gas, base, precious andother metals, electricity, coal, agricultural and othercommodity products.
For further information about market-making
activities, see “Market-Making Activities” below.
‰ FICC financing. Includes providing financing to ourclients through securities purchased under agreements toresell (resale agreements), and through structured credit,
warehouse lending (including residential and commercial
mortgage lending) and asset-backed lending, which are
typically longer term in nature.
Equities. Equities generates revenues from intermediationand financing activities.
‰ Equities intermediation. We make markets in equity
securities and equity-related products, including ETFs,
convertible securities, options, futures and OTC
derivative instruments. We also structure and makemarkets in derivatives on indices, industry sectors,
financial measures and individual company stocks. Our
exchange-based market-making activities include making
markets in stocks and ETFs, futures and options on major
exchanges worldwide. In addition, we generatecommissions and fees from executing and clearing
institutional client transactions on major stock, options
and futures exchanges worldwide, as well as OTC
transactions. For further information about marketmaking activities, see “Market-Making Activities” below.
‰ Equities financing. Includes prime brokerage and other
equities financing activities, including securities lending,margin lending and swaps. We earn fees by providing
clearing, settlement and custody services globally. We
provide services that principally involve borrowing andlending securities to cover institutional clients’ short sales
and borrowing securities to cover our short sales and to
make deliveries into the market. In addition, we are an
active participant in broker-to-broker securities lending
and third-party agency lending activities. We provide
financing to our clients for their securities trading
activities through margin loans that are collateralized by
securities, cash or other acceptable collateral. In addition,
we execute swap transactions to provide our clients with
exposure to securities and indices.

Market-Making Activities
As a market maker, we facilitate transactions in both liquidand less liquid markets, primarily for institutional clients,
such as corporations, financial institutions, investment
funds and governments, to assist clients in meeting theirinvestment objectives and in managing their risks. In thisrole, we seek to earn the difference between the price atwhich a market participant is willing to sell an instrument
to us and the price at which another market participant iswilling to buy it from us, and vice versa (i.e., bid/offer
spread). In addition, we maintain (i) market-making
positions, typically for a short period of time, in response
to, or in anticipation of, client demand, and (ii) positions toactively manage our risk exposures that arise from thesemarket-making activities (collectively, inventory). Ourinventory is recorded in trading assets (long positions) ortrading liabilities (short positions) in our consolidatedbalance sheets.
Our results are influenced by a combination ofinterconnected drivers, including (i) client activity levels andtransactional bid/offer spreads (collectively, client activity),and (ii) changes in the fair value of our inventory andinterest income and interest expense related to the holding,hedging and funding of our inventory (collectively, marketmaking inventory changes). Due to the integrated nature of
our market-making activities, disaggregation of net
revenues into client activity and market-making inventorychanges is judgmental and has inherent complexities andlimitations.
The amount and composition of our net revenues vary overtime as these drivers are impacted by multiple interrelated
factors affecting economic and market conditions,
including volatility and liquidity in the market, changes ininterest rates, currency exchange rates, credit spreads,
equity prices and commodity prices, investor confidence,and other macroeconomic concerns and uncertainties.
In general, assuming all other market-making conditions
remain constant, increases in client activity levels or bid/offer spreads tend to result in increases in net revenues, anddecreases tend to have the opposite effect. However,changes in market-making conditions can materially impact
client activity levels and bid/offer spreads, as well as the fairvalue of our inventory. For example, a decrease in liquidity
in the market could have the impact of (i) increasing our
bid/offer spread, (ii) decreasing investor confidence andthereby decreasing client activity levels, and (iii) wideningof credit spreads on our inventory positions.

Goldman Sachs June 2021 Form 10-Q 110

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
The table below presents our Global Markets assets.

In the table above:

As of
June
2021

December2020$ 125,615
318,415
141,769
332,140
53,48843,04011,164$1,025,631$ 86,663
212,711
110,473
339,349
52,92933,214
9,267$844,606$ in millions

Cash and cash equivalents
Collateralized agreements
Customer and other receivables
Trading assets
Investments
Loans
Other assets
Total

The table below presents our Global Markets operating
results.

$ in millions

Three Months
Ended June

Six Months
Ended June

2021

2021

2020

2020

FICC intermediation
FICC financing
FICC$ 1,897 $ 3,786
423
449
2,320
4,235

$ 5,348 $ 6,323
865
881
6,213
7,204

Equities intermediation
Equities financing
Equities
Net revenues
Provision for credit losses
Operating expenses
Pre-tax earnings
Provision for taxes
Net earnings
Preferred stock dividends
Net earnings to common

1,765
2,199
815
742
2,580
2,941
4,900
7,176
14
183
3,373
5,179
1,513
1,814
312
1,395
1,201
419
80
114
$ 1,121 $ 305

4,351
3,727
1,917
1,408
6,268
5,135
12,481 12,339
(6)
251
7,558
8,026
4,929
4,062
927
1,620
4,002
2,442
151
173
$ 3,851 $ 2,269

Average common equity$44,430 $42,702
Return on average common equity 10.1%
2.9%$42,741 $40,970
18.0% 11.1%

The table below presents our Global Markets net revenues
by line item in the consolidated statements of earnings.
FICC

Equities

GlobalMarkets

Three Months Ended June 2021
Market making
Commissions and fees
Other principal transactions
Net interest income
Total$1,499–76745$2,320$1,775809(1)(3)$2,580$ 3,274809
75
742$ 4,900

Three Months Ended June 2020
Market making
Commissions and fees
Other principal transactions
Net interest income
Total$3,566–(45)
714$4,235$2,221808(3)(85)$2,941$ 5,787
808
(48)
629
$ 7,176

Six Months Ended June 2021
Market making
Commissions and fees
Other principal transactions
Net interest income
Total$4,758–184
1,271$6,213$4,4091,828(1)
32$6,268$ 9,167
1,828
183
1,303
$12,481Six Months Ended June 2020
Market making
Commissions and fees
Other principal transactions
Net interest income
Total$5,900–(65)
1,369$7,204$3,569
1,788
7
(229)
$5,135$ 9,469
1,788
(58)
1,140
$12,339$ in millions

111 Goldman Sachs June 2021 Form 10-Q

‰ The difference between commissions and fees and thosein the consolidated statements of earnings represents
commissions and fees included in our Consumer &Wealth Management segment.
‰ See “Net Revenues” for further information aboutmarket making revenues, commissions and fees, otherprincipal transactions revenues and net interest income.
See Note 25 to the consolidated financial statements fornet interest income by business segment.
‰ The primary driver of net revenues
intermediation was client activity.

for

FICC

Operating Environment. During the second quarter of2021, Global Markets operated in an environment
characterized by less favorable market-making conditions
and more modest yet solid client activity. Improved
sentiment regarding the pace of the economic recovery,
combined with continued monetary and fiscal support from
central banks and governments globally, contributed togenerally higher global equity prices and lower interest
rates compared with the first quarter of 2021. During thesecond quarter of 2021, the S&P 500 Index increased by
8% and the MSCI World Index increased by 7%. In thesame time period, the yield on 10-year U.S. Treasury
securities declined by approximately 30 basis points and theyield on U.K. Gilts declined by approximately 15 basis
points. Market volatility continued to moderate fromelevated levels last year, as the average daily VIX was 22%
lower than in the first quarter of 2021. If macroeconomic
conditions lead to a continued decline in activity levels or acontinued decline in volatility, net revenues in Global
Markets would likely be negatively impacted.
Three Months Ended June 2021 versus June 2020. Net
revenues in Global Markets were $4.90 billion for thesecond quarter of 2021, 32% lower than a strong second
quarter of 2020.
Net revenues in FICC were $2.32 billion, 45% lower than
the second quarter of 2020, due to significantly lower net
revenues in FICC intermediation, reflecting significantly
lower net revenues in interest rate products, credit products
and commodities, and lower net revenues in mortgages andcurrencies. In addition, net revenues in FICC financing werelower, reflecting lower net revenues from resale agreements,
partially offset by higher net revenues from mortgage
lending.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
The decrease in FICC intermediation net revenues primarilyreflected solid, but significantly lower client activity
compared with strong activity levels in the prior year period
due to high volatility amid the COVID-19 pandemic. The
following provides information about our FICC
intermediation net revenues by business, compared withresults in the second quarter of 2020:‰ Net revenues in most businesses reflected lower client
activity.
‰ Additionally, net revenues in interest rate products,
commodities and mortgages reflected the impact of lessfavorable market-making conditions on our inventory,
while net revenues in currencies reflected improved
market-making conditions on our inventory.
Net revenues in Equities were $2.58 billion, 12% lower than
the second quarter of 2020, due to significantly lower net
revenues in Equities intermediation, reflecting significantly
lower net revenues in cash products and lower net revenues
in derivatives. Net revenues in Equities financing werehigher, reflecting higher average client balances.
Provision for credit losses was $14 million for the second
quarter of 2021, compared with $183 million for thesecond quarter of 2020, primarily due to reserve reductions
reflecting continued improvement in the broader economic
environment following challenging conditions that began in
the first half of 2020.
Operating expenses were $3.37 billion for the second
quarter of 2021, 35% lower than the second quarter of
2020, reflecting significantly lower net provisions forlitigation and regulatory proceedings and significantly
lower compensation and benefits expenses. Pre-tax
earnings were $1.51 billion for the second quarter of 2021,
17% lower than the second quarter of 2020. Annualized
ROE was 10.1% for the second quarter of 2021, comparedwith 2.9% for the second quarter of 2020 (which included
the impact of net provisions for litigation and regulatory
proceedings that reduced annualized ROE by 18.9
percentage points).
Six Months Ended June 2021 versus June 2020. Net
revenues in Global Markets were $12.48 billion for the firsthalf of 2021, essentially unchanged compared with a strong
first half of 2020.

The decrease in FICC intermediation net revenues reflected
solid, but significantly lower client activity compared withstrong activity levels in the prior year period due to highvolatility amid the COVID-19 pandemic. This was partially
offset by the impact of improved market-making conditions
on our inventory compared with challenging conditions in
the prior year period. The following provides information
about our FICC intermediation net revenues by business,compared with results in the first half of 2020:‰ Net revenues in credit products, interest rate products,
currencies and commodities reflected lower client
activity, partially offset by the impact of improved
market-making conditions on our inventory.
‰ Net revenues in mortgages reflected the impact ofimproved market-making conditions on our inventory.
Net revenues in Equities were $6.27 billion, 22% higher
than the first half of 2020, due to higher net revenues in
Equities intermediation, reflecting significantly higher net
revenues in derivatives and higher net revenues in cash
products, and significantly higher net revenues in Equities
financing, reflecting improved market conditions andincreased activity (including higher average customer
balances in our Prime business).
Provision for credit losses was a net benefit of $6 million for
the first half of 2021, compared with net provisions of$251 million for the first half of 2020, primarily due toreserve reductions reflecting continued improvement in the
broader economic environment following challenging
conditions that began in the first half of 2020.
Operating expenses were $7.56 billion for the first half of2021, 6% lower than the first half of 2020, reflecting
significantly lower net provisions for litigation andregulatory proceedings, partially offset by significantly
higher compensation and benefits expenses (reflecting
strong performance). Pre-tax earnings were $4.93 billion
for the first half of 2021, 21% higher than the first half of2020. Annualized ROE was 18.0% for the first half of2021, compared with 11.1% for the first half of 2020
(which included the impact of net provisions for litigation
and regulatory proceedings that reduced annualized ROE
by 10.5 percentage points).

Net revenues in FICC were $6.21 billion, 14% lower than
the first half of 2020, due to lower net revenues in FICC
intermediation, reflecting significantly lower net revenues
in credit products, interest rate products and currencies,
and slightly lower net revenues in commodities, partially
offset by significantly higher net revenues in mortgages. In
addition, net revenues in FICC financing were slightly
lower, reflecting significantly lower net revenues fromresale agreements, partially offset by significantly higher net
revenues from mortgage lending.
Goldman Sachs June 2021 Form 10-Q 112

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Asset Management
We manage client assets across a broad range of investment
strategies and asset classes for a diverse set of institutional
clients and a network of third-party distributors around theworld, including equity, fixed income and alternative
investments. We provide investment solutions including
those managed on a fiduciary basis by our portfolio
managers, as well as those managed by a variety of thirdparty managers. We offer our investment solutions in avariety of structures, including separately managed
accounts, mutual funds, private partnerships and othercomingled vehicles. These solutions begin with identifying
clients’ objectives and continue through portfolio
construction, ongoing asset allocation and risk
management and investment realization.
In addition to managing client assets, we invest inalternative investments across a range of asset classes that
seek to deliver long-term accretive risk-adjusted returns.
Our investing activities, which are typically longer term,
include investments in corporate equity, credit, real estateand infrastructure assets.
Asset Management generates revenues from the following:‰ Management and other fees. The majority of revenues
in management and other fees consists of asset-based feeson client assets that we manage. For further information
about AUS, see “Assets Under Supervision” below. The
fees that we charge vary by asset class, distribution
channel and the types of services provided, and are
affected by investment performance, as well as asset
inflows and redemptions.
‰ Incentive fees. In certain circumstances, we also receive
incentive fees based on a percentage of a fund’s or aseparately managed account’s return, or when the return
exceeds a specified benchmark or other performancetargets. Such fees include overrides, which consist of theincreased share of the income and gains derived primarily
from our private equity and credit funds when the returnon a fund’s investments over the life of the fund exceeds
certain threshold returns.
‰ Equity investments. Our alternative investing activities
relate to public and private equity investments incorporate, real estate and infrastructure assets. We also
make investments through consolidated investment
entities (CIEs), substantially all of which are engaged inreal estate investment activities.
‰ Lending and debt investments. We invest in corporate
debt and provide financing for real estate and otherassets. These activities include investments in mezzanine
debt, senior debt and distressed debt securities.

113 Goldman Sachs June 2021 Form 10-Q

The table below presents our Asset Management assets.
As of
June
2021

December
2020$13,411
3,658
923
5,033
35,75916,06821,753$96,605$ 8,635
4,749
1,261
6,819
34,386
16,55823,343$95,751$ in millions

Cash and cash equivalents
Collateralized agreements
Customer and other receivables
Trading assets
Investments
Loans
Other assets
Total

The table below presents our Asset Management operating
results.

$ in millions

Management and other fees
Incentive fees
Equity investments
Lending and debt investments
Net revenues
Provision for credit losses
Operating expenses
Pre-tax earnings/(loss)
Provision/(benefit) for taxes
Net earnings/(loss)
Preferred stock dividends
Net earnings/(loss) to common

Three Months
Ended June

Six Months
Ended June

2021

2021

2020

2020

$

727 $ 684 $ 1,420 $ 1,324
78
34
120
188
3,717
924
6,837
902
610
459
1,369
(409)
5,132
2,101
9,746
2,005
(65)
271
(12)
350
1,943
1,332
3,833
2,530
3,254
498
5,925
(875)
634
(212)
1,115
(349)
2,620
710
4,810
(526)
28
26
53
40
$ 2,592 $ 684 $ 4,757 $ (566)

Average common equity$25,410 $19,322
Return on average common equity 40.8% 14.2%$25,092 $20,371
37.9% (5.6)%

The table below presents our Equity investments net
revenues by equity type and asset class.
Three Months
Ended June

Six Months
Ended June

$ in millions

2021

2020

2021

2020

Equity TypePrivate equity
Public equity
Total$ 2,816 $901$ 3,717 $

288
636
924

$ 5,597 $1,240$ 6,837 $

750
152
902

$

487
437
924

$

Asset ClassReal estate
Corporate
Total

672 $
3,045
$ 3,717 $972 $ 1,038
5,865
(136)
$ 6,837 $ 902

The table below presents details about our Lending anddebt investments net revenues.
Three Months
Ended June
$ in millions

Fair value net gains/(losses)
Net interest income
Total

$
$

2021

2020

277 $
333
610 $

253
206
459

Six Months
Ended June
2021

2020

737 $
632
$ 1,369 $

(858)
449
(409)

$

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Operating Environment. In the second quarter of 2021,
Asset Management benefitted from a supportive operating
environment, as generally higher global equity prices,
optimism about the economic recovery and continued
support from central banks and governments globallyprovided a more favorable backdrop for asset management
activities and investments. If optimism about the economic
outlook declines or the ongoing efforts to mitigate theimpact of the COVID-19 pandemic are ineffective, it may
lead to a decline in asset prices, widening of credit spreads,
and investors transitioning to asset classes that typicallygenerate lower fees or investors withdrawing their assets,
and net revenues in Asset Management would likely be
negatively impacted.
Three Months Ended June 2021 versus June 2020. Net
revenues in Asset Management were $5.13 billion for thesecond quarter of 2021, more than double the amount in
the second quarter of 2020, primarily driven bysignificantly higher net revenues in Equity investments. In
addition, Lending and debt investments net revenues,
Incentive fees and Management and other fees were eachhigher.
The increase in Equity investments net revenues primarilyreflected significantly higher net gains from investments inprivate equities, driven by company-specific events,
including capital raises and sales, and improved corporate
performance versus a challenging second quarter of 2020.
The increase in Lending and debt investments net revenues
was primarily due to higher net interest income. The
increase in Incentive fees was due to harvesting.
Management and other fees included the impact of higher
average assets under supervision and higher other fees,partially offset by fee waivers on money market funds.
Provision for credit losses was a net benefit of $65 million
for the second quarter of 2021, compared with net
provisions of $271 million for the second quarter of 2020,
primarily due to reserve reductions reflecting continued
improvement in the broader economic environment
following challenging conditions that began in the first halfof 2020.

Six Months Ended June 2021 versus June 2020. Net
revenues in Asset Management were $9.75 billion for the
first half of 2021, compared with $2.01 billion for the firsthalf of 2020, driven by significantly higher net revenues in
Equity investments and Lending and debt investments.
Management and other fees were higher, while Incentive
fees were lower.
The increase in Equity investments net revenues primarilyreflected significantly higher net gains from investments inprivate equities, driven by company-specific events,
including capital raises and sales, and improved corporate
performance versus a challenging first half of 2020. In
addition, net gains from investments in public equities weresignificantly higher, reflecting the impact of generally
higher global equity prices.
Lending and debt investments net revenues reflected net
gains across debt investments for the first half of 2021,
reflecting generally tighter corporate credit spreads,
compared with net losses for the first half of 2020.
The increase in Management and other fees reflected theimpact of higher average assets under supervision, partially
offset by fee waivers on money market funds. The decreasein Incentive fees was driven by higher performance in thefirst half of 2020.
Provision for credit losses was a net benefit of $12 million
for the first half of 2021, compared with net provisions of$350 million for the first half of 2020, primarily due toreserve reductions reflecting continued improvement in the
broader economic environment following challenging
conditions that began in the first half of 2020.
Operating expenses were $3.83 billion for the first half of2021, 52% higher than the first half of 2020, primarily due
to significantly higher compensation and benefits expenses(reflecting strong performance). Pre-tax earnings were$5.93 billion for the first half of 2021, compared with apre-tax loss of $875 million for the first half of 2020.

Operating expenses were $1.94 billion for the second
quarter of 2021, 46% higher than the second quarter of
2020, primarily due to significantly higher compensation
and benefits expenses (reflecting strong performance).
Pre-tax earnings were $3.25 billion for the second quarterof 2021, compared with $498 million for the second
quarter of 2020.

Goldman Sachs June 2021 Form 10-Q 114

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Consumer & Wealth Management
Consumer & Wealth Management helps clients achieve
their individual financial goals by providing a broad range
of wealth advisory and banking services, including financial
planning, investment management, deposit taking, andlending. Services are offered through our global network ofadvisors and via our digital platforms.
Wealth Management. Wealth management provides
tailored wealth advisory services to clients across the wealthspectrum. We operate globally serving individuals, families,
family offices, and foundations and endowments. Our
relationships are established directly or introduced throughcorporations that sponsor financial wellness programs fortheir employees.
We offer personalized financial planning inclusive of
income and liability management, compensation andbenefits analysis, trust and estate structuring, tax
optimization, philanthropic giving, and asset protection.
We also provide customized investment advisory solutions,and offer structuring and execution capabilities in security
and derivative products across all major global markets.
We leverage a broad, open-architecture investment
platform and our global execution capabilities to help
clients achieve their investment goals. In addition, we offer
clients a full range of private banking services, including avariety of deposit alternatives and loans that our clients use
to finance investments in both financial and nonfinancial
assets, bridge cash flow timing gaps or provide liquidity andflexibility for other needs.
Wealth management
following:

generates

revenues

fromConsumer banking revenues consist of net interest income
earned on unsecured loans issued to consumers throughMarcus and credit card lending activities, and net interest
income allocated to consumer deposits.
The table below presents our Consumer & WealthManagement assets.
As of‰ Incentive fees. In certain circumstances, we also receive
incentive fees from wealth management clients based on apercentage of a fund’s return, or when the return exceeds
a specified benchmark or other performance targets. Suchfees include overrides, which consist of the increased
share of the income and gains derived primarily from ourprivate equity and credit funds when the return on afund’s investments over the life of the fund exceeds
certain threshold returns.
‰ Private banking and lending. Includes net interest
income allocated to deposit-taking and net interest
income earned on lending activities for wealthmanagement clients.

June
2021

December2020$ 37,360
9,509
9,640
12,86539
47,293
3,144$119,850$ 25,814
12,518
7,132
17,96952
39,7993,145$106,429$ in millions

Cash and cash equivalents
Collateralized agreements
Customer and other receivables
Trading assets
Investments
Loans
Other assets
Total

The table below presents our Consumer & WealthManagement operating results.

the‰ Management and other fees. Includes fees related to
managing assets, providing investing and wealth advisory
solutions, providing financial planning and counselingservices via Ayco Personal Finance Management, andexecuting brokerage transactions for wealth management
clients.

115 Goldman Sachs June 2021 Form 10-Q

Consumer Banking. Our Consumer banking businessissues unsecured loans, through our digital platform,
Marcus by Goldman Sachs (Marcus), and credit cards, tofinance the purchases of goods or services. We also accept
deposits through Marcus, in Goldman Sachs Bank USA (GSBank USA) and GSIB. These deposits include savings andtime deposits which provide us with a diversified source offunding. Additionally, we provide investing services
through Marcus Invest, currently offered in the U.S.

Three Months
Ended June
$ in millions

2021

2020

Six Months
Ended June
2021

2020

Management and other fees
Incentive fees
Private banking and lending
Wealth management$ 1,109 $ 938
15
10
260
155
1,384 1,103

Consumer banking
Net revenues
Provision for credit losses
Operating expenses
Pre-tax earnings/(loss)
Provision/(benefit) for taxes
Net earnings/(loss)
Preferred stock dividends
Net earnings/(loss) to common

363
258
734
540
1,747 1,361
3,485 2,853
66
317
126
485
1,369 1,199
2,868 2,443
312 (155)
491
(75)
60
(38)
92
(30)
252 (117)
399
(45)
11
13
21
19
$ 241 $ (130) $ 378 $ (64)

Average common equity$10,459 $7,505
Return on average common equity 9.2% (6.9)%$ 2,186 $1,897
41
79
524
337
2,751 2,313$10,335 $7,271
7.3% (1.8)%

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Operating Environment. During the second quarter of2021, improved market and economic conditions
contributed to a more favorable backdrop for consumer
banking and wealth management activities. Global equity
prices generally increased and, in the U.S., unemployment
decreased and consumer spending increased compared withthe first quarter of 2021, aided by optimism about theeconomic recovery and continued support from central
banks and governments globally. If optimism about theeconomic outlook declines or the ongoing efforts tomitigate the impact of the COVID-19 pandemic are
ineffective, it may lead to a decline in asset prices, investors
favoring asset classes that typically generate lower fees,
investors withdrawing their assets and consumers
withdrawing their deposits or deterioration in consumer
credit, and net revenues and the provision for credit losses
in Consumer & Wealth Management would likely be
negatively impacted.
Three Months Ended June 2021 versus June 2020. Net
revenues in Consumer & Wealth Management were$1.75 billion for the second quarter of 2021, 28% higher
than the second quarter of 2020.
Net revenues in Wealth management were $1.38 billion,
25% higher than the second quarter of 2020. Management
and other fees were higher, reflecting the impact of higher
average assets under supervision, and net revenues in
Private banking and lending were higher, primarilyreflecting higher loan balances.
Net revenues in Consumer banking were $363 million,
41% higher than the second quarter of 2020, reflecting
higher deposit and credit card balances.
Provision for credit losses was $66 million for the second
quarter of 2021, 79% lower than the second quarter of2020. The second quarter of 2021 included provisions
related to growth in credit card loans, partially offset byreserve reductions reflecting continued improvement in the
broader economic environment following challenging
conditions that began in the first half of 2020.
Operating expenses were $1.37 billion for the second
quarter of 2021, 14% higher than the second quarter of
2020, primarily due to higher compensation and benefits
expenses (reflecting strong performance). Pre-tax earnings
were $312 million for the second quarter of 2021,
compared with a pre-tax loss of $155 million for the second
quarter of 2020.

Six Months Ended June 2021 versus June 2020. Net
revenues in Consumer & Wealth Management were$3.49 billion for the first half of 2021, 22% higher than thefirst half of 2020.
Net
revenues
inWealthmanagement
were$2.75 billion, 19% higher than the first half of 2020, due tohigher Management and other fees, primarily reflecting theimpact of higher average assets under supervision, andsignificantly higher net revenues in Private banking andlending, primarily reflecting higher loan balances, while
Incentive fees were lower.
Net revenues in Consumer banking were $734 million,
36% higher than the first half of 2020, reflecting higher
deposit and credit card balances.
Provision for credit losses was $126 million for the first halfof 2021, compared with $485 million for the first half of2020. The first half of 2021 included provisions for
portfolio growth in credit cards, including $185 million ofprovisions related to the pending acquisition of the General
Motors co-branded portfolio, partially offset by reserve
reductions reflecting continued improvement in the broader
economic environment following challenging conditions
that began in the first half of 2020.
Operating expenses were $2.87 billion for the first half of2021, 17% higher than the first half of 2020, primarily due
to significantly higher compensation and benefits expenses(reflecting strong performance). Pre-tax earnings were$491 million for the first half of 2021, compared with apre-tax loss of $75 million for the first half of 2020.
Assets Under Supervision
AUS includes our institutional clients’ assets and assets
sourced through third-party distributors (both included in
our Asset Management segment), as well as high-net-worthclients’ assets (included in our Consumer & WealthManagement segment), where we earn a fee for managing
assets on a discretionary basis. This includes net assets in
our mutual funds, hedge funds, credit funds, private equity
funds, real estate funds, and separately managed accounts
for institutional and individual investors. AUS also includes
client assets invested with third-party managers, privatebank deposits and advisory relationships where we earn afee for advisory and other services, but do not haveinvestment discretion. AUS does not include the selfdirected brokerage assets of our clients.

Goldman Sachs June 2021 Form 10-Q 116

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
The table below presents information about our firmwide
period-end AUS by segment, asset class, distribution
channel, region and vehicle.

The table below presents changes in our AUS.

As of June
$ in billions

2021

2020

Segment
Asset Management
Consumer & Wealth Management
Total AUS

$1,633672$2,305$1,499558$2,057

Asset Class
Alternative investments
EquityFixed income
Total long-term AUS
Liquidity products
Total AUS

$ 211
558
914
1,683
622
$2,305

$ 179
394
817
1,390
667
$2,057

Distribution Channel
Institutional
Wealth management
Third-party distributed
Total AUS

$ 794
672
839
$2,305

$ 709
558
790
$2,057

RegionAmericas
EMEA
Asia
Total AUS

$1,794336
175$2,305$1,596289
172$2,057

VehicleSeparate accounts
Public funds
Private funds and otherTotal AUS

$1,264759
282$2,305$1,080752
225$2,057In the table above:‰ Liquidity products includes money market funds andprivate bank deposits.
‰ EMEA represents Europe, Middle East and Africa.
Asset classes, such as alternative investment and equity assets,
typically generate higher fees relative to fixed income andliquidity product assets. The average effective management fee(which excludes non-asset-based fees) we earned on ourfirmwide AUS was 29 basis points for both the three and six
months ended June 2021, 29 basis points for the three months
ended June 2020 and 30 basis points for the six months ended
June 2020. The decrease from the first half of 2020 reflected
the impact of fee waivers on money market funds in the firsthalf of 2021.
We earn management fees on client assets that we manage andalso receive incentive fees based on a percentage of a fund’s ora separately managed account’s return, or when the return
exceeds a specified benchmark or other performance targets.
These incentive fees are recognized when it is probable that asignificant reversal of such fees will not occur. Our estimatedunrecognized incentive fees were $2.58 billion as of June 2021
and $1.79 billion as of December 2020. Such amounts are
based on the completion of the funds’ financial statements,
which is generally one quarter in arrears. These fees will berecognized, assuming no decline in fair value, if and when it isprobable that a significant reversal of such fees will not occur,
which is generally when such fees are no longer subject tofluctuations in the market value of the assets.
117 Goldman Sachs June 2021 Form 10-Q

$ in billions

Three Months
Ended June

Six Months
Ended June

2021

2021

2020

2020

Asset Management
Beginning balance$1,567 $1,309 $1,530 $1,298
Net inflows/(outflows):
Alternative investments
3
(2)
6
(3)
Equity(5)3(2)
5
Fixed income
12
6
28
13
Total long-term AUS net inflows/(outflows)
10
7
32
15
Liquidity products
16
121
45
187
Total AUS net inflows/(outflows)
26
128
77
202
Net market appreciation/(depreciation)
40
62
26
(1)
Ending balance$1,633 $1,499 $1,633 $1,499
Consumer & Wealth Management
Beginning balance$ 637 $ 509 $ 615 $ 561
Net inflows/(outflows):
Alternative investments
5–7–Equity8(1)19–Fixed income
(1)
–
1
(8)
Total long-term AUS net inflows/(outflows)
12
(1)
27
(8)
Liquidity products
–
12
(6)
18
Total AUS net inflows/(outflows)
12
11
21
10
Net market appreciation/(depreciation)
23
38
36
(13)
Ending balance$ 672 $ 558 $ 672 $ 558
Firmwide
Beginning balance$2,204 $1,818 $2,145 $1,859
Net inflows/(outflows):
Alternative investments
8
(2)
13
(3)
Equity32
175
Fixed income
11
6
29
5
Total long-term AUS net inflows/(outflows)
22
6
59
7
Liquidity products
16
133
39
205
Total AUS net inflows/(outflows)
38
139
98
212
Net market appreciation/(depreciation)
63
100
62
(14)
Ending balance$2,305 $2,057 $2,305 $2,057

The table below presents information about our averagemonthly firmwide AUS by segment and asset class.
Average for the$ in billions

Three Months
Ended June

Six Months
Ended June

2021

2021

2020

2020

Segment
Asset Management
Consumer & Wealth Management
Total AUS

$1,607 $1,426 $1,571 $1,368
657
536
640
546
$2,264 $1,962 $2,211 $1,914

Asset Class
Alternative investments
EquityFixed income
Total long-term AUS
Liquidity products
Total AUS

$ 203 $ 179 $ 199 $ 181
540
369
514
387
902
793
900
799
1,645 1,341
1,613 1,367
619
621
598
547
$2,264 $1,962 $2,211 $1,914

In addition to our AUS, we have discretion over alternative
investments where we currently do not earn management
fees (non-fee-earning alternative assets).

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
The table below presents information about our AUS for
alternative assets, non-fee-earning alternative assets andtotal alternative assets.

$ in billions

As of June 2021
Corporate equity
CreditReal estate
Hedge funds and multi-asset
Other
Total
As of June 2020
Corporate equity
CreditReal estate
Hedge funds and multi-asset
Other
Total

AUS

Non-fee-earning
alternative assets

$ 86
21
19
85
–
$211

$ 79
15
14
71
–
$179

Total
alternative
assets

$ 68
77
44
1
1
$191

$154
98
63
86
1
$402

$ 40
53
43
1
1
$138

$119
68
57
72
1
$317

In the table above:‰ Corporate equity primarily includes private equity.
‰ Total alternative assets included uncalled capital that isavailable for future investing of $47 billion as ofJune 2021 and $31 billion as of June 2020.
‰ Non-fee-earning alternative assets primarily includes
investments that we hold on our balance sheet, ourunfunded commitments, unfunded commitments of ourclients (where we do not charge fees on commitments),
credit facilities collateralized by fund assets and employee
funds. Our calculation of non-fee-earning alternative
assets may not be comparable to similar calculations usedby other companies.
In the beginning of 2020, we announced a strategic
objective of growing our third-party alternatives business,and established targets of achieving net inflows of$100 billion and gross inflows of $150 billion foralternative assets over five years.
The table below presents information about third-party
commitments raised in our alternatives business during2020 and through the second quarter of 2021.

$ in billions

Included in AUS
Included in non-fee-earning alternative assets
Third-party commitments raised

As ofJune 2021

The table below presents information about alternative
investments in our Asset Management segment that wehold on our balance sheet.

Equitysecurities

CIE
investments
and other

Total

Loans

Debt
securities

As of June 2021
Corporate equity
CreditReal estate
Other
Total

$ –
8
8
–
$16

$ –
12
2
–
$14

$17
–
4
–
$21

$ –
–
18
1
$19

$17
20
32
1
$70

As of June 2020
Corporate equity
CreditReal estate
Other
Total

$ –
8
8
–
$16

$ –
11
2
–
$13

$16
–
4
–
$20

$ –
–
20
1
$21

$16
19
34
1
$70

$ in billions

Loans and Debt Securities. The table below presents theconcentration of loans and debt securities within ouralternative investments by accounting classification, region
and industry.
As of June
$ in billions

2021

2020

Loans
Debt securities
Total

$16
14
$30

$16
13
$29

Accounting Classification
Debt securities at fair value
Loans at amortized cost
Loans at fair value
Total

46%
43%
11%
100%

44%
43%
13%
100%

RegionAmericas
EMEA
Asia
Total

45%
34%
21%
100%

46%
32%
22%
100%

Industry
Consumers
Financial Institutions
Healthcare
Industrials
Natural Resources & Utilities
Real EstateTechnology, Media & Telecommunications
Other
Total

4%
8%
8%
15%
3%
36%
15%
11%
100%

6%
8%
8%
15%
4%
34%
13%
12%
100%

$36
38
$74

In the table above, commitments included in
non-fee-earning alternative assets included approximately$28 billion which will begin to earn fees (and become AUS),
if and when the commitments are drawn and assets areinvested.
Goldman Sachs June 2021 Form 10-Q 118

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Equity. The table below presents the concentration ofequity securities within our alternative investments byregion and industry.
As of June
$ in billions

2021

2020

Equity securities

$21

$20

52%
21%
27%
100%

48%
16%
36%
100%

RegionAmericas
EMEA
Asia
Total
Industry
Financial Institutions
Healthcare
Industrials
Natural Resources & Utilities
Real EstateTechnology, Media & Telecommunications
Other
Total

The table below presents the concentration of CIE assets,
net of financings, within our alternative investments byregion and asset class.
As of June
$ in billions

19%
13%
7%
8%
17%
29%
7%
100%

28%
6%
7%
7%
18%
27%
7%
100%

The table below presents the concentration of equity
securities within our alternative investments by vintage.
Vintage

As of June 2021
2014 or earlier
2015 - 20172018 - thereafter
Total

26%
32%
42%
100%

As of June 20202013 or earlier
2014 - 20162017 - thereafter
Total

37%
33%
30%
100%

In the table above:‰ Equity securities included $17 billion of private equity
positions as of both June 2021 and June 2020, $4 billion
as of June 2021 and $3 billion as of June 2020 of public
equity positions that converted from private equity upon
the initial public offerings of the underlying companies.
‰ The concentrations for real estate equity securities as ofJune 2021 were 3% for multifamily (3% as ofJune 2020), 4% for office (3% as of June 2020), 5% for
mixed use (5% as of June 2020) and 5% for other realestate equity securities (7% as of June 2020).

119 Goldman Sachs June 2021 Form 10-Q

CIE Investments and Other. CIE investments and otherincluded assets held by CIEs of $18 billion as of June 2021
and $20 billion as of June 2020, which were funded withliabilities of approximately $10 billion as of June 2021 and$11 billion as of June 2020. Substantially all such liabilities
were nonrecourse, thereby reducing our equity at risk.

CIE assets, net of financings

2021

2020

$8

$9

RegionAmericas
EMEA
Asia
Total

63%
25%
12%
100%

61%
20%
19%
100%

Asset Class
Hospitality
Industrials
Multifamily
OfficeRetailSenior Housing
Student Housing
Other
Total

4%
10%
25%
24%
5%
13%
7%
12%
100%

4%
7%
25%
29%
7%
11%
8%
9%
100%

The table below presents the concentration of CIE assets,
net of financings, within our alternative investments by
vintage.
Vintage

As of June 2021
2014 or earlier
2015 - 20172018 - thereafter
Total

2%
29%
69%
100%

As of June 20202013 or earlier
2014 - 20162017 - thereafter
Total

2%
36%
62%
100%

Geographic Data
See Note 25 to the consolidated financial statements for asummary of our total net revenues and pre-tax earnings by
geographic region.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Balance Sheet and Funding Sources
Balance Sheet Management
One of our risk management disciplines is our ability to
manage the size and composition of our balance sheet.
While our asset base changes due to client activity, market
fluctuations and business opportunities, the size andcomposition of our balance sheet also reflects factors,
including (i) our overall risk tolerance, (ii) the amount ofequity capital we hold and (iii) our funding profile, among
other factors. See “Equity Capital Management andRegulatory Capital — Equity Capital Management” for
information about our equity capital management process.
Although our balance sheet fluctuates on a day-to-day
basis, our total assets at quarter-end and year-end dates are
generally not materially different from those occurring
within our reporting periods.
In order to ensure appropriate risk management, we seek tomaintain a sufficiently liquid balance sheet and haveprocesses in place to dynamically manage our assets andliabilities, which include (i) balance sheet planning,(ii) balance sheet limits, (iii) monitoring of key metrics and(iv) scenario analyses.
Balance Sheet Planning. We prepare a balance sheet planthat combines our projected total assets and composition ofassets with our expected funding sources over a three-yeartime horizon. This plan is reviewed quarterly and may be
adjusted in response to changing business needs or market
conditions. The objectives of this planning process are:
‰ To develop our balance sheet projections, taking into
account the general state of the financial markets andexpected business activity levels, as well as regulatory
requirements;‰ To allow Treasury and our independent risk oversightand control functions to objectively evaluate balance
sheet limit requests from our revenue-producing units inthe context of our overall balance sheet constraints,
including our liability profile and equity capital levels,and key metrics; and‰ To inform the target amount, tenor and type of funding toraise, based on our projected assets and contractual
maturities.
Treasury and our independent risk oversight and control
functions, along with our revenue-producing units, review
current and prior period information and expectations forthe year to prepare our balance sheet plan. The specificinformation reviewed includes asset and liability size andcomposition, limit utilization, risk and performancemeasures, and capital usage.

Our consolidated balance sheet plan, including our balance
sheets by business, funding projections and projected key
metrics, is reviewed and approved by the Firmwide Asset
Liability Committee and the Risk Governance Committee.
See “Risk Management — Overview and Structure of Risk
Management” for an overview of our risk management
structure.
Balance Sheet Limits. The Firmwide Asset Liability
Committee and the Risk Governance Committee have theresponsibility to review and approve balance sheet limits.
These limits are set at levels which are close to actual
operating levels, rather than at levels which reflect our
maximum risk appetite, in order to ensure prompt
escalation and discussion among our revenue-producing
units, Treasury and our independent risk oversight andcontrol functions on a routine basis. Requests for changes
in limits are evaluated after giving consideration to theirimpact on our key metrics. Compliance with limits ismonitored by our revenue-producing units and Treasury, as
well as our independent risk oversight and control
functions.
Monitoring of Key Metrics. We monitor key balance
sheet metrics both by business and on a consolidated basis,including asset and liability size and composition, limit
utilization and risk measures. We allocate assets tobusinesses and review and analyze movements resulting
from new business activity, as well as market fluctuations.
Scenario Analyses. We conduct various scenario
analyses, including as part of the Comprehensive Capital
Analysis and Review (CCAR) and U.S. Dodd-Frank WallStreet Reform and Consumer Protection Act Stress Tests(DFAST), as well as our resolution and recovery planning.
See “Equity Capital Management and Regulatory
Capital — Equity Capital Management” for further
information about these scenario analyses. These scenarios
cover short- and long-term time horizons using various
macroeconomic and firm-specific assumptions, based on a
range of economic scenarios. We use these analyses to assist
us in developing our longer-term balance sheet
management strategy, including the level and compositionof assets, funding and equity capital. Additionally, theseanalyses help us develop approaches for maintaining
appropriate funding, liquidity and capital across a variety
of situations, including a severely stressed environment.

Goldman Sachs June 2021 Form 10-Q 120

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Balance Sheet Analysis and Metrics
As of June 2021, total assets in our consolidated balance
sheets were $1.39 trillion, an increase of $224.89 billion
from December 2020, primarily reflecting increases incollateralized agreements of $100.16 billion (primarilyreflecting the impact of our and our clients’ activities), cash
and cash equivalents of $84.45 billion (primarily reflecting
our activity), and customer and other receivables of$40.76 billion (primarily reflecting client activity).
As of June 2021, total liabilities in our consolidated balance
sheets were $1.29 trillion, an increase of $218.94 billion
from December 2020, primarily reflecting increases incustomer and other payables of $48.04 billion (primarilyreflecting client activity), deposits of $46.18 billion(primarily reflecting increases in institutional, transaction
banking, consumer and deposit sweep programs deposits),
trading liabilities of $45.37 billion (primarily reflecting theimpact of our and our clients’ activities in government
obligations and equities, partially offset by the impact ofinterest rates and currency movements on derivative
instruments), collateralized financings of $43.54 billion(primarily reflecting the impact of our and our clients’
activities), and unsecured borrowings of $34.32 billion(primarily driven by new issuances partially offset by
maturities).
Our total securities sold under agreements to repurchase(repurchase agreements), accounted for as collateralized
financings, were $151.69 billion as of June 2021 and$126.57 billion as of December 2020, which were 7%
higher as of June 2021 and 24% higher as ofDecember 2020 than the average daily amount ofrepurchase agreements over the respective quarters. As ofJune 2021, the increase in our repurchase agreements
relative to the average daily amount of repurchaseagreements during the quarter resulted from higher levels of
our and our clients’ activities at the end of the period.
The level of our repurchase agreements fluctuates between
and within periods, primarily due to providing clients withaccess to highly liquid collateral, such as liquid government
and agency obligations, through collateralized financing
activities.
The table below presents information about our balance
sheet and leverage ratios.
As of
June
2021

December
2020$1,387,922$ 238,930$ 101,890
13.6x
2.3x

$1,163,028$ 213,481$ 95,932
12.1x
2.2x

$ in millions

Total assets
Unsecured long-term borrowings
Total shareholders’ equity
Leverage ratio
Debt-to-equity ratio

121 Goldman Sachs June 2021 Form 10-Q

In the table above:‰ The leverage ratio equals total assets divided by total
shareholders’ equity and measures the proportion ofequity and debt we use to finance assets. This ratio isdifferent from the leverage ratios included in Note 20 tothe consolidated financial statements.
‰ The debt-to-equity ratio equals unsecured long-termborrowings divided by total shareholders’ equity.
The table below presents information about ourshareholders’ equity and book value per common share,including the reconciliation of common shareholders’equity to tangible common shareholders’ equity.
As of
June
2021

December
2020

Total shareholders’ equity
Preferred stock
Common shareholders’ equity
Goodwill
Identifiable intangible assets
Tangible common shareholders’ equity$101,890(9,203)92,687(4,332)(523)$ 87,832$ 95,932(11,203)
84,729(4,332)(630)$ 79,767

Book value per common share
Tangible book value per common share$ 264.90$ 251.02$ 236.15$ 222.32$ in millions, except per share amounts

In the table above:‰ Tangible common shareholders’ equity is calculated as
total shareholders’ equity less preferred stock, goodwill
and identifiable intangible assets. We believe that tangible
common shareholders’ equity is meaningful because it is ameasure that we and investors use to assess capital
adequacy. Tangible common shareholders’ equity is a
non-GAAP measure and may not be comparable tosimilar non-GAAP measures used by other companies.
‰ Book value per common share and tangible book value
per common share are based on common shares
outstanding and restricted stock units granted to
employees with no future service requirements and not
subject to performance conditions (collectively, basic
shares) of 349.9 million as of June 2021 and358.8 million as of December 2020. We believe thattangible book value per common share (tangible commonshareholders’ equity divided by basic shares) ismeaningful because it is a measure that we and investors
use to assess capital adequacy. Tangible book value percommon share is a non-GAAP measure and may not becomparable to similar non-GAAP measures used by othercompanies.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Funding Sources
Our primary sources of funding are deposits, collateralized
financings, unsecured short- and long-term borrowings,
and shareholders’ equity. We seek to maintain broad anddiversified funding sources globally across products,
programs, markets, currencies and creditors to avoid
funding concentrations.
The table below presents information about our funding
sources.
As of$ in millions

June 2021

December 2020

Deposits$306,142 33% $259,962 33%
Collateralized financings
217,482 23% 173,947 22%
Unsecured short-term borrowings
61,7407%52,8706%
Unsecured long-term borrowings
238,930 26% 213,481 27%
Total shareholders’ equity
101,890 11%
95,932 12%
Total$926,184 100% $796,192 100%

Our funding is primarily raised in U.S. dollar, Euro, British
pound and Japanese yen. We generally distribute ourfunding products through our own sales force and thirdparty distributors to a large, diverse creditor base in avariety of markets in the Americas, Europe and Asia. We
believe that our relationships with our creditors are criticalto our liquidity. Our creditors include banks, governments,
securities lenders, corporations, pension funds, insurancecompanies, mutual funds and individuals. We have
imposed various internal guidelines to monitor creditor
concentration across our funding programs.
Deposits. Our deposits provide us with a diversified sourceof funding and reduce our reliance on wholesale funding.
We raise deposits, including savings, demand and time
deposits, from private bank clients, consumers, transaction
banking clients, other institutional clients, and throughinternal and third-party broker-dealers. Substantially all ofour deposits are raised through GS Bank USA and GSIB.
See Note 13 to the consolidated financial statements forfurther information about our deposits.
Secured Funding. We fund a significant amount of
inventory and a portion of investments on a secured basis.
Secured funding includes collateralized financings in the
consolidated balance sheets. We may also pledge ourinventory and investments as collateral for securities
borrowed under a securities lending agreement. We also use
our own inventory and investments to cover transactions inwhich we or our clients have sold securities that have not yet
been purchased. Secured funding is less sensitive to changes
in our credit quality than unsecured funding, due to our
posting of collateral to our lenders. Nonetheless, we analyze
the refinancing risk of our secured funding activities, taking
into account trade tenors, maturity profiles, counterparty
concentrations, collateral eligibility and counterparty
rollover probabilities. We seek to mitigate our refinancing
risk by executing term trades with staggered maturities,
diversifying counterparties, raising excess secured funding
and pre-funding residual risk through our GCLA.

We seek to raise secured funding with a term appropriate
for the liquidity of the assets that are being financed, and weseek longer maturities for secured funding collateralized byasset classes that may be harder to fund on a secured basis,
especially during times of market stress. Our secured
funding, excluding funding collateralized by liquid
government and agency obligations, is primarily executedfor tenors of one month or greater and is primarily executed
through term repurchase agreements and securities loaned
contracts.
The weighted average maturity of our secured funding
included in collateralized financings in the consolidatedbalance sheets, excluding funding that can only becollateralized by liquid government and agency obligations,exceeded 120 days as of June 2021.
Assets that may be harder to fund on a secured basis during
times of market stress include certain financial instrumentsin the following categories: mortgage and other assetbacked loans and securities, non-investment-grade
corporate debt securities, equity securities and emerging
market securities. Assets that are classified in level 3 of thefair value hierarchy are generally funded on an unsecured
basis. See Notes 4 through 10 to the consolidated financial
statements for further information about the classificationof financial instruments in the fair value hierarchy and“Unsecured Long-Term Borrowings” below for further
information about the use of unsecured long-termborrowings as a source of funding.
We also raise financing through other types ofcollateralized financings, such as secured loans and notes.
GS Bank USA has access to funding from the Federal Home
Loan Bank. Our outstanding borrowings against theFederal Home Loan Bank were $1.60 billion as ofJune 2021 and we had no outstanding borrowings as ofDecember 2020. Additionally, we have access to funding
through the Federal Reserve discount window. However,
we do not rely on this funding in our liquidity planning andstress testing.
Unsecured Short-Term Borrowings. A significant
portion of our unsecured short-term borrowings was
originally long-term debt that is scheduled to mature within
one year of the reporting date. We use unsecured short-termborrowings, including U.S. and non-U.S. hybrid financial
instruments and commercial paper, to finance liquid assets
and for other cash management purposes. In accordancewith regulatory requirements, Group Inc. does not issue
debt with an original maturity of less than one year, otherthan to its subsidiaries. See Note 14 to the consolidated
financial statements for further information about our
unsecured short-term borrowings.

Goldman Sachs June 2021 Form 10-Q 122

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Unsecured Long-Term Borrowings. Unsecured longterm borrowings, including structured notes, are raised
through syndicated U.S. registered offerings, U.S. registered
and Rule 144A medium-term note programs, offshore
medium-term note offerings and other debt offerings. We
issue in different tenors, currencies and products tomaximize the diversification of our investor base.
The table below presents our quarterly unsecured long-termborrowings maturity profile.

$ in millions

As of June 2021
2022
2023
2024
2025
2026
2027 - thereafter
Total

First
Quarter

SecondQuarter

Third
Quarter

FourthQuarter$–$14,459$ 8,657$ 7,044$ 6,315$–$7,121$9,369$9,681$3,705$8,115$8,476$7,858$5,739$5,363$6,467 $ 14,582$7,511
37,567$3,49329,377$5,55428,018$6,043
21,426
107,960$238,930

Total

The weighted average maturity of our unsecured long-termborrowings as of June 2021 was approximately seven years.
To mitigate refinancing risk, we seek to limit the principal
amount of debt maturing over the course of any monthly,quarterly or annual time horizon. We enter into interest
rate swaps to convert a portion of our unsecured long-termborrowings into floating-rate obligations to manage our
exposure to interest rates. See Note 14 to the consolidated
financial statements for further information about our
unsecured long-term borrowings.
Shareholders’ Equity. Shareholders’ equity is a stable andperpetual source of funding. See Note 19 to theconsolidated financial statements for further information
about our shareholders’ equity.

Equity Capital Management and Regulatory
CapitalCapital adequacy is of critical importance to us. We have inplace a comprehensive capital management policy thatprovides a framework, defines objectives and establishes
guidelines to assist us in maintaining the appropriate level
and composition of capital in both business-as-usual andstressed conditions.
Equity Capital Management
We determine the appropriate amount and composition of
our equity capital by considering multiple factors, including
our current and future regulatory capital requirements, theresults of our capital planning and stress testing process, theresults of resolution capital models and other factors, suchas rating agency guidelines, subsidiary capital requirements,
the business environment and conditions in the financial
markets.
We manage our capital requirements and the levels of ourcapital usage principally by setting limits on the balance
sheet and/or limits on risk, in each case at both the firmwide
and business levels.
We principally manage the level and composition of ourequity capital through issuances and repurchases of ourcommon stock.
We may issue, redeem or repurchase our preferred stock,junior subordinated debt issued to trusts, and othersubordinated debt or other forms of capital as businessconditions warrant. Prior to such redemptions orrepurchases, we must receive approval from the Board ofGovernors of the Federal Reserve System (FRB). See
Notes 14 and 19 to the consolidated financial statements
for further information about our preferred stock, juniorsubordinated debt issued to trusts and other subordinateddebt.
Capital Planning and Stress Testing Process. As part ofcapital planning, we project sources and uses of capitalgiven a range of business environments, including stressed
conditions. Our stress testing process is designed to identify
and measure material risks associated with our businessactivities, including market risk, credit risk and operationalrisk, as well as our ability to generate revenues.
Our capital planning process incorporates an internal
capital adequacy assessment with the objective of ensuringthat we are appropriately capitalized relative to the risks inour businesses. We incorporate stress scenarios into ourcapital planning process with a goal of holding sufficient
capital to ensure we remain adequately capitalized after
experiencing a severe stress event. Our assessment of capital
adequacy is viewed in tandem with our assessment ofliquidity adequacy and is integrated into our overall risk
management structure, governance and policy framework.

123 Goldman Sachs June 2021 Form 10-Q

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Our stress tests incorporate our internally designed stressscenarios, including our internally developed severely
adverse scenario, and those required by the FRB, and aredesigned to capture our specific vulnerabilities and risks.
We provide further information about our stress test
processes and a summary of the results on our website as
described in “Available Information.”
As required by the FRB’s CCAR rules, we submit an annual
capital plan for review by the FRB. The purpose of the
FRB’s review is to ensure that we have a robust, forwardlooking capital planning process that accounts for our
unique risks and that permits continued operation during
times of economic and financial stress.
The FRB evaluates us based, in part, on whether we havethe capital necessary to continue operating under thebaseline and severely adverse scenarios provided by the
FRB and those developed internally. This evaluation also
takes into account our process for identifying risk, ourcontrols and governance for capital planning, and ourguidelines for making capital planning decisions. In
addition, the FRB evaluates our plan to make capital
distributions (i.e., dividend payments and repurchases orredemptions of stock, subordinated debt or other capitalsecurities) and issue capital, across the range ofmacroeconomic scenarios and firm-specific assumptions.
The FRB determines the SCB applicable to us based on its
own annual stress test. The SCB under the Standardized
approach is calculated as (i) the difference between ourstarting and minimum projected CET1 capital ratios under
the supervisory severely adverse scenario and (ii) ourplanned common stock dividends for each of the fourth
through seventh quarters of the planning horizon,
expressed as a percentage of risk-weighted assets (RWAs).
We submitted our 2021 CCAR capital plan in April 2021
and published a summary of our annual DFAST results inJune 2021. See “Available Information.” Based on our
2021 CCAR submission, the FRB has reduced our SCB
from 6.6% to 6.4%, resulting in a Standardized CET1
capital ratio requirement of 13.4%, which will be effective
for the period from October 1, 2021 throughSeptember 30, 2022. See “Share Repurchase Program” forfurther information about common stock repurchases anddividends.
GS Bank USA has its own capital planning process and,starting in 2022, will be required to submit its annual stresstest results to the FRB. GSI, GSIB and Goldman Sachs Bank
Europe SE (GSBE) also have their own capital planning andstress testing process, which incorporates internallydesigned stress tests developed in accordance with theguidelines of their respective regulators.

Contingency Capital Plan. As part of our comprehensive
capital management policy, we maintain a contingency
capital plan. Our contingency capital plan provides aframework for analyzing and responding to a perceived or
actual capital deficiency, including, but not limited to,
identification of drivers of a capital deficiency, as well as
mitigants and potential actions. It outlines the appropriate
communication procedures to follow during a crisis period,
including internal dissemination of information, as well as
timely communication with external stakeholders.
Capital Attribution. We assess each of our businesses’
capital usage based on our internal assessment of risks,
which incorporates an attribution of our relevant
regulatory capital requirements. These regulatory capitalrequirements are allocated using our attributed equity
framework, which takes into consideration our mostbinding capital constraints. Our most binding capitalconstraint is based on the results of the FRB’s annual stress
test, which includes the Standardized risk-based capital andleverage ratios. We review and make any necessary
adjustments to our attributed equity framework each year,
in January, to reflect our final CCAR results from the prioryear.
On January 1, 2021, we adjusted our attributed equity
framework to reflect the results of our 2020 CCAR
submission. The adjusted attributed equity framework
places greater emphasis on activities that generatesignificant stress losses and higher Standardized risk
weights. As a result of this adjustment, relative to theallocation as of December 2020, the allocation of attributed
equity among our segments at the start of this year changed
as follows: attributed equity increased by approximately$3.7 billion for Asset Management and approximately$0.7 billion for Consumer & Wealth Management, while
attributed equity decreased by approximately $2.3 billion
for Global Markets and approximately $2.1 billion for
Investment Banking. See “Segment Assets and Operating
Results — Segment Operating Results” for information
about our average quarterly attributed equity by segment.
Share Repurchase Program. We use our share
repurchase program to help maintain the appropriate levelof common equity. The repurchase program is effectedprimarily through regular open-market purchases (which
may include repurchase plans designed to comply with
Rule 10b5-1 and accelerated share repurchases), theamounts and timing of which are determined primarily by
our current and projected capital position and our capitalplan submitted to the FRB as part of CCAR. The amounts
and timing of the repurchases may also be influenced bygeneral market conditions and the prevailing price andtrading volumes of our common stock.

Goldman Sachs June 2021 Form 10-Q 124

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
During the first half of 2021, large bank holding companies(BHCs) were subject to the COVID-19-related restrictions by
the FRB that limited the amount of stock repurchases andcommon stock dividends to the average net income of the
BHC over the prior four quarters and precluded BHCs fromincreasing common stock dividends. These restrictions
ceased on July 1, 2021. During the second quarter of 2021,
we returned a total of $1.44 billion to shareholders,
including common stock repurchases of $1.0 billion and$441 million in common stock dividends. Consistent withour capital management philosophy and in recognition of
attractive capital deployment opportunities, we lowered ourstock repurchases in the second quarter of 2021 comparedwith the first quarter of 2021. The Board of Directors ofGroup Inc. (Board) approved an increase in our common
stock dividend from $1.25 to $2.00 per share beginning in
the third quarter of 2021. We will continue deploying capitalin our business where returns are attractive.
As of June 2021, the remaining share authorization under
our existing repurchase program was 38.1 million shares.
See “Unregistered Sales of Equity Securities and Use ofProceeds” in Part II, Item 2 of this Form 10-Q and Note 19
to the consolidated financial statements for further
information about our share repurchase program, and see
above for information about our capital planning and stresstesting process.
Resolution Capital Models. In connection with ourresolution planning efforts, we have established a
Resolution Capital Adequacy and Positioning framework,
which is designed to ensure that our major subsidiaries (GSBank USA, Goldman Sachs & Co. LLC (GS&Co.), GSI,
GSIB, GSBE, Goldman Sachs Japan Co., Ltd. (GSJCL),
Goldman Sachs Asset Management, L.P. and Goldman
Sachs Asset Management International) have access to
sufficient loss-absorbing capacity (in the form of equity,
subordinated debt and unsecured senior debt) so that they
are able to wind-down following a Group Inc. bankruptcy
filing in accordance with our preferred resolution strategy.
In addition, we have established a triggers and alerts
framework, which is designed to provide the Board withinformation needed to make an informed decision onwhether and when to commence bankruptcy proceedingsfor Group Inc.
Rating Agency Guidelines
The credit rating agencies assign credit ratings to the
obligations of Group Inc., which directly issues orguarantees substantially all of our senior unsecured debt
obligations. GS&Co. and GSI have been assigned long- andshort-term issuer ratings by certain credit rating agencies.
GS Bank USA, GSIB and GSBE have also been assigned
long- and short-term issuer ratings, as well as ratings ontheir long- and short-term bank deposits. In addition, credit
rating agencies have assigned ratings to debt obligations ofcertain other subsidiaries of Group Inc.
125 Goldman Sachs June 2021 Form 10-Q

The level and composition of our equity capital are among
the many factors considered in determining our credit
ratings. Each agency has its own definition of eligible
capital and methodology for evaluating capital adequacy,
and assessments are generally based on a combination offactors rather than a single calculation. See “RiskManagement — Liquidity Risk Management — Credit
Ratings” for further information about credit ratings ofGroup Inc., GS Bank USA, GSIB, GSBE, GS&Co. and GSI.
Consolidated Regulatory Capital
We are subject to consolidated regulatory capitalrequirements which are calculated in accordance with theregulations of the FRB (Capital Framework). Under the
Capital Framework, we are an “Advanced approach”
banking organization and have been designated as a global
systemically important bank (G-SIB).
The capital requirements calculated under the Capital
Framework include the capital conservation buffer
requirements, which are comprised of a 2.5% buffer (underthe Advanced Capital Rules), the SCB (under theStandardized Capital Rules), a countercyclical capital
buffer (under both Capital Rules) and the G-SIB surcharge(under both Capital Rules). Our G-SIB surcharge is 2.5%
for 2021 and 2022. We expect that our G-SIB surcharge
will be 3.0% beginning in 2023. Based on financial data forthe six months ended June 2021, our current estimate isthat we are above the threshold for the 3.5% G-SIB
surcharge. The earliest this surcharge could be effective is
January 2024. The G-SIB surcharge and countercyclicalcapital buffer in the future may differ due to additional
guidance from our regulators and/or positional changes,
and our SCB is likely to change from year to year based on
the results of the annual supervisory stress tests. Our target
Standardized CET1 capital ratio remains in a range
between 13.0% and 13.5% (including management
buffers) based upon the execution of our previously
announced strategic initiatives and achievement of capitalefficiencies. However, in light of our most recent SCB basedon our 2021 CCAR submission, achieving this target by
year-end 2022 will be challenging.
See Note 20 to the consolidated financial statements forfurther information about our risk-based capital ratios andleverage ratios, and the Capital Framework.
Total Loss-Absorbing Capacity (TLAC)
We are also subject to the FRB’s TLAC and related
requirements. Failure to comply with the TLAC and related
requirements could result in restrictions being imposed by
the FRB and could limit our ability to repurchase shares,
pay dividends and make certain discretionary
compensation payments.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
The table below presents TLAC and external long-term
debt requirements.
As of

TLAC to RWAs
TLAC to leverage exposure
External long-term debt to RWAs
External long-term debt to leverage exposure

June
2021

December
2020

21.5%
9.5%
8.5%
4.5%

22.0%
9.5%
8.5%
4.5%

In the table above:‰ As of both June 2021 and December 2020, the TLAC to
RWAs requirement included (i) the 18% minimum, (ii) the
2.5% buffer, (iii) the countercyclical capital buffer, which
the FRB has set to zero percent and (iv) the G-SIB surcharge(Method 1). The G-SIB surcharge (Method 1) was 1.0% as
of June 2021 and 1.5% as of December 2020.
‰ The TLAC to leverage exposure requirement
includes (i) the 7.5% minimum and (ii) the 2.0% leverage
exposure buffer.
‰ The external long-term debt to RWAs requirement
includes (i) the 6% minimum and (ii) the 2.5% G-SIB
surcharge (Method 2).
‰ The external long-term debt to total leverage exposure is
the 4.5% minimum.
The table below presents information about our TLAC andexternal long-term debt ratios.
For the Three Months
Ended or as of$ in millions

TLAC
External long-term debt
RWAs
Leverage exposure
TLAC to RWAs
TLAC to leverage exposure
External long-term debt to RWAs
External long-term debt to leverage exposure

June
2021

December2020$ 277,114$ 164,500$ 667,143$1,777,441$ 242,730$ 139,200$ 609,750$1,332,937

41.5%
15.6%
24.7%
9.3%

39.8%
18.2%
22.8%
10.4%

In the table above:‰ TLAC includes common and preferred stock, and eligible
long-term debt issued by Group Inc. Eligible long-term
debt represents unsecured debt, which has a remaining
maturity of at least one year and satisfies additional
requirements.
‰ External long-term debt consists of eligible long-term
debt subject to a haircut if it is due to be paid between one
and two years.

‰ Leverage exposure consists of average adjusted total
assets and certain off-balance sheet exposures. Leverage
exposure excluded average holdings of U.S. Treasury
securities and average deposits at the Federal Reserve as
permitted by the FRB under a temporary amendment.
This temporary amendment had the effect of increasing
the TLAC to leverage exposure ratio and the external
long-term debt to leverage ratio. The impact of this
temporary amendment was an increase to the TLAC toleverage exposure ratio of 2.4 percentage points and theexternal long-term debt to leverage exposure ratio of 1.3
percentage points for the three months ended
December 2020. Effective April 1, 2021, the amendment
permitting this exclusion expired and, as a result, the
TLAC and external long-term debt to leverage exposure
ratios for the three months ended June 2021 did notreflect the impact of the temporary amendment to
exclude the holdings of such assets.
See “Business — Regulation” in Part I, Item 1 of the 2020
Form 10-K for further information about TLAC.
Subsidiary Capital Requirements
Many of our subsidiaries, including our bank and brokerdealer subsidiaries, are subject to separate regulation andcapital requirements of the jurisdictions in which they
operate.
Bank Subsidiaries. GS Bank USA is our primary U.S.
banking subsidiary and GSIB and GSBE are our primary
non-U.S. banking subsidiaries. These entities are subject toregulatory capital requirements. See Note 20 to theconsolidated financial statements for further information
about the regulatory capital requirements of our banksubsidiaries.
U.S. Regulated Broker-Dealer Subsidiaries. GS&Co. is
our primary U.S. regulated broker-dealer subsidiary and issubject to regulatory capital requirements, including those
imposed by the SEC and the Financial Industry Regulatory
Authority, Inc. In addition, GS&Co. is a registered futurescommission merchant and is subject to regulatory capitalrequirements imposed by the CFTC, the Chicago
Mercantile Exchange and the National Futures Association.
Rule 15c3-1 of the SEC and Rule 1.17 of the CFTC specify
uniform minimum net capital requirements, as defined, fortheir registrants, and also effectively require that asignificant part of the registrants’ assets be kept in relatively
liquid form. GS&Co. has elected to calculate its minimum
capital requirements in accordance with the “Alternative
Net Capital Requirement” as permitted by Rule 15c3-1.

‰ RWAs represent Advanced RWAs as of both June 2021
and December 2020. In accordance with the TLAC rules,
the higher of Advanced or Standardized RWAs are usedin the calculation of TLAC and external long-term debt
ratios and applicable requirements.
Goldman Sachs June 2021 Form 10-Q 126

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
GS&Co. had regulatory net capital, as defined byRule 15c3-1, of $19.96 billion as of June 2021 and$22.38 billion as of December 2020, which exceeded theamount required by $15.76 billion as of June 2021 and$18.45 billion as of December 2020. In addition to its
alternative minimum net capital requirements, GS&Co. is
also required to hold tentative net capital in excess of$1 billion and net capital in excess of $500 million inaccordance with the market and credit risk standards ofAppendix E of Rule 15c3-1. GS&Co. is also required to
notify the SEC in the event that its tentative net capital isless than $5 billion. As of both June 2021 andDecember 2020, GS&Co. had tentative net capital and net
capital in excess of both the minimum and the notification
requirements.
Non-U.S. Regulated Broker-Dealer Subsidiaries. Our
principal non-U.S. regulated broker-dealer subsidiaries
include GSI and GSJCL.
GSI, our U.K. broker-dealer, is regulated by the Prudential
Regulation Authority (PRA) and the Financial Conduct
Authority (FCA). GSI is subject to the U.K. capitalframework, which is predominantly aligned with the E.U.
capital framework prescribed in the amended E.U. Capital
Requirements Directive (CRD) and the E.U. Capital
Requirements Regulation (CRR). These capital regulations
are largely based on the Basel Committee on Banking
Supervision’s (Basel Committee) capital framework forstrengthening international capital standards (Basel III).
The table below presents GSI’s risk-based capitalrequirements.
As ofJune December
2021
2020

Risk-based capital requirements
CET1 capital ratio
Tier 1 capital ratio
Total capital ratio

8.1%
10.0%
12.5%

8.1%
10.0%
12.5%

In the table above, the risk-based capital requirements
incorporate capital guidance received from the PRA andcould change in the future.
The table below presents information about GSI’s riskbased capital ratios.
As of$ in millions

Risk-based capital and risk-weighted assets
CET1 capital
Tier 1 capital
Tier 2 capital
Total capital
RWAs
Risk-based capital ratios
CET1 capital ratio
Tier 1 capital ratio
Total capital ratio
127 Goldman Sachs June 2021 Form 10-Q

June December
2021
2020

$ 27,724 $ 26,962$ 36,024 $ 35,262$ 5,377 $ 5,377$ 41,401 $ 40,639$261,344 $252,355
10.6%
13.8%
15.8%

10.7%
14.0%
16.1%

In the table above, CET1 capital, Tier 1 capital and Total
capital as of June 2021 include GSI’s profits after
foreseeable charges for the three months ended June 2021
(which will be finalized upon verification by GSI’s external
auditors and approval by the PRA for inclusion in riskbased capital). These profits contributed approximately 17
basis points to the risk-based capital ratios.
GSI will become subject to a PRA-required leverage ratiothat is expected to become effective in January 2022 and issimilar to the E.U. capital framework’s minimum 3%
leverage ratio requirement. GSI had a leverage ratio of
4.2% as of June 2021 and 4.7% as of December 2020.
Tier 1 capital as of June 2021 included GSI’s profits after
foreseeable charges for the three months ended June 2021
(which will be finalized upon verification by GSI’s external
auditors and approval by the PRA for inclusion in riskbased capital). These profits contributed approximately 5basis points to the leverage ratio. This leverage ratio isbased on our current interpretation and understanding of
this rule and may evolve as we discuss the interpretation
and application of the U.K. leverage ratio framework with
GSI’s regulators.
GSI is also subject to a minimum requirement for own
funds and eligible liabilities issued to affiliates. Thisrequirement is subject to a transitional period which beganto phase in from January 2019 and will become fully
effective beginning in January 2022. As of both June 2021
and December 2020, GSI was in compliance with thisrequirement.
GSJCL, our Japanese broker-dealer, is regulated by Japan’s
Financial Services Agency. GSJCL and certain othernon-U.S. subsidiaries are also subject to capitalrequirements promulgated by authorities of the countries inwhich they operate. As of both June 2021 andDecember 2020, these subsidiaries were in compliance with
their local capital requirements.

Regulatory and Other Matters
Regulatory Matters
Our businesses are subject to extensive regulation andsupervision worldwide. Regulations have been adopted orare being considered by regulators and policy makers
worldwide. Given that many of the new and proposed rules
are highly complex, the full impact of regulatory reform
will not be known until the rules are implemented andmarket practices develop under the final regulations.
See “Business — Regulation” in Part I, Item 1 of the 2020
Form 10-K for further information about the laws, rules
and regulations and proposed laws, rules and regulations
that apply to us and our operations.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Other Matters
Replacement of Interbank Offered Rates (IBORs),
including LIBOR. Central banks and regulators in a
number of major jurisdictions (for example, U.S., U.K.,
E.U., Switzerland and Japan) have convened working
groups to find, and implement the transition to suitablereplacements for IBORs. In March 2021, the FCA and theIntercontinental
Exchange
BenchmarkAuthority
announced that the publication of all EUR and CHF
LIBOR settings along with certain JPY, GBP and USD
LIBOR settings will cease after December 31, 2021 and the
publication of the most commonly used USD LIBOR
settings will cease after June 30, 2023. The FCA continues
to consult the market on publishing synthetic rates forcertain GBP and JPY LIBOR settings for a limited time. In
April 2021, the State of New York approved legislation
which minimizes legal and economic uncertainty forcontracts that are governed by New York law and have nofallback provisions or have fallback provisions that are
based on LIBOR by providing a statutory framework to
replace LIBOR with a benchmark rate based on the Secured
Overnight Financing Rate (SOFR). The U.S. federalbanking agencies have also issued guidance strongly
encouraging banking organizations to cease using USD
LIBOR as a reference rate in new contracts as soon aspracticable and in any event by December 31, 2021.
The International Swaps and Derivatives Association(ISDA) 2020 IBOR Fallbacks Protocol (IBOR Protocol),which became effective in January 2021, provides
derivatives market participants with amended fallbacks forlegacy and new derivatives contracts to mitigate legal or
economic uncertainty. Both counterparties will have toadhere to the IBOR Protocol or engage in bilateralamendments for the terms to be effective for derivative
contracts. ISDA confirmed that the FCA’s formal
announcement in March 2021 fixed the spread adjustment
for all LIBOR rates and that fallbacks will automaticallyoccur for outstanding derivatives contracts that incorporate
the relevant terms.

We have a program in place that focuses on achieving anorderly transition from IBORs to alternative risk-freereference rates for us and our clients, and continue to makeprogress on our transition program. As part of thistransition, we continue to actively engage with ourregulators and clients, as well as participate in central bankand sector working groups. The majority of our LIBOR risk
exposure is to USD LIBOR, which is primarily inconnection with our derivative contracts and to a lesser
extent our unsecured debt, preferred stock and loan
portfolio. For non-USD LIBOR, substantially all of our risk
exposure is in connection with derivative contracts. Ourderivative contracts are primarily with counterparties underbilateral agreements which adhere to the IBOR Protocol orwith central clearing counterparties which haveincorporated fallbacks consistent with the IBOR Protocolin their rule books and have announced that they plan toconvert all LIBOR contracts to alternative risk-freereference rates before LIBOR cessation. We continue tomonitor the potential legislative developments as they relate
to unsecured debt and preferred stock and will take actions
designed to facilitate an orderly transition. We are also
engaged with our clients in order to remediate our loan
agreements through bilateral amendments. We have also
issued debt and deposits linked to SOFR and Sterling
Overnight Index Average (SONIA) and executed SOFRand SONIA-based derivative contracts to make markets
and facilitate client activities. When appropriate, we
continue to execute transactions in the market to reduce
our LIBOR exposures arising from hedges to our fixed-rate
debt issuances and replace with alternative reference rate
exposures. See “Regulatory and Other Matters – Other
Matters” in Part II, Item 7 of the 2020 Form 10-K for
further information about our transition program.
Impact of COVID-19 Pandemic. During the second
quarter of 2021, the economic recovery gained significant
traction in countries in which comprehensive vaccination
programs have led to the lifting of health and safety
restrictions, such as the U.S. and China. However, othercountries encountered more challenging circumstances as aresult of slower distribution of vaccines and the spread of
new variants, most notably the Delta variant.

Goldman Sachs June 2021 Form 10-Q 128

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
We have continued to successfully execute on our BusinessContinuity Planning (BCP) strategy since initially activating
it in the first quarter of 2020 in response to the emergenceof the COVID-19 pandemic. Our priority has been tosafeguard our employees and to seek to ensure continuity ofbusiness operations on behalf of our clients. Our business
continuity response to the COVID-19 pandemic is managed
by a central team, which is led by our chief administrative
officer and chief medical officer, and includes senior
management within Risk and the chief operating officers
across all regions and businesses. Given that the situation
regarding COVID-19 varies geographically, our approach
to transitioning back to the office is tailored to thecircumstances of each location, and it evolves as the specificconditions and requirements of each location change.
During the second quarter of 2021, we formally welcomed
employees back to our offices in New York, Dallas, Salt
Lake City, Hong Kong and other locations, andapproximately 50% of employees in these offices have since
been working from the office on a regular basis. Goingforward, we will look to re-open more locations consistent
with the health and safety guidelines of each city in which
we operate.
Our systems and infrastructure have been robust
throughout the COVID-19 pandemic, enabling us to
conduct our activities without disruption. Communication
throughout our organization has remained active during
the pandemic and our risk management processes havecontinued to operate in a rigorous and disciplined manner.
From the onset of the pandemic, our people have stayed
connected with our clients. In addition, as part of ourvendor management processes, we have ongoing dialogues
with third-party service providers, which are intended toensure that they continue to meet our criteria for business
continuity.
We maintained high liquidity levels during the second
quarter of 2021, as our GCLA averaged $329 billion. We
have continued to access our traditional funding sources in
the normal course and service our debt and otherobligations on a timely basis. Our unsecured long-termborrowings increased by $20 billion during the second
quarter of 2021, driven by the issuance of $18 billion of ourbenchmark debt to support the growth in our total assets
amid client demand and attractive return opportunities. We
expect to continue this issuance if accretive opportunities
requiring non-bank funding persist. However, we expectthat the pace of our issuance will moderate relative to thefirst half of 2021. See “Balance Sheet and Funding Sources”
and “Risk Management — Liquidity Risk Management”
for further information.

129 Goldman Sachs June 2021 Form 10-Q

Accounting estimates, particularly those made inconnection with determining the allowance for credit losses
and the fair value of certain level 3 assets, are sensitive toassumptions regarding future economic conditions.
Predicting the trajectory of the economic recovery is highly
judgmental given the uncertainty as to how the pandemic
will evolve, as it will largely depend on the speed and extent
of further vaccine distribution and the impact of the Delta
variant or other variants that might arise. See Note 9 to theconsolidated financial statements for further information
about our allowance for credit losses and Note 4 to theconsolidated financial statements for further information
about fair value measurements.
Financial markets remained constructive during the second
quarter of 2021, and although trading volumes andvolatility moderated, client activity was still solid. We
continued to deploy our balance sheet to intermediate risk
and to support client activity. Our average daily
Value-at-Risk (VaR) for the second quarter of 2021 wasessentially unchanged compared with the first quarter of2021. We have maintained our proactive approach to
managing market risk levels, which entails ongoing review
and monitoring of exposures and focusing on ways tomitigate risk. As a result of the improved broader economic
backdrop, credit risk in general has abated from the depthsof the pandemic, including the risk associated withindustries that were most severely impacted by lockdowns,
such as hospitality and airlines. However, the potential
exists for the Delta variant or other variants to impede therecovery and we continue to closely monitor our exposures
to industries that would be most negatively impacted by aresurgence in the pandemic. See “Risk Management —Market Risk Management” and “— Credit Risk
Management” for further information.
Although progress in the fight against the COVID-19
pandemic has occurred unevenly across regions andcountries since vaccines first became available, optimism
regarding the continued rebound of the global economy
remains high. However, if progress toward an end to thepandemic were to stall or reverse and a sustained period of
weak economic conditions were to ensue, our businesses
would be adversely impacted. This would have a negative
impact on factors that are important to our operating
performance, such as the level of client activity,
creditworthiness of counterparties and borrowers, and theamount of our AUS. We will continue to closely monitor
the rollout of vaccines across regions, as well as the impact
of new variants of the virus, and will take further actions, asnecessary, in order to best serve the interests of ouremployees, clients and counterparties. For further
information about the risks associated with the COVID-19
pandemic, see “Risk Factors” in Part I, Item 1A of the 2020
Form 10-K.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Off-Balance Sheet Arrangements
Contractual Obligations

andOff-Balance Sheet Arrangements
In the ordinary course of business, we enter into various
types of off-balance sheet arrangements. Our involvementin these arrangements can take many different forms,
including:

The table below presents where information about ourvarious off-balance sheet arrangements may be found in
this Form 10-Q. In addition, see Note 3 to the consolidated
financial statements for information about ourconsolidation policies.

‰ Purchasing or retaining residual and other interests inspecial purpose entities, such as mortgage-backed andother asset-backed securitization vehicles;

Off-Balance Sheet Arrangement

Disclosure in Form 10-Q

Variable interests and otherobligations, including contingent
obligations, arising from variableinterests in nonconsolidated
variable interest entities (VIEs)

See Note 17 to the consolidated
financial statements.

Guarantees, letters of credit, andlending and other commitments

See Note 18 to the consolidated
financial statements.

Derivatives

See “Risk Management — Credit
RiskManagement — Credit
Exposures — OTC
Derivatives”
and Notes 4, 5, 7 and 18 to theconsolidated financial statements.

‰ Holding senior and subordinated debt, interests in limited
and general partnerships, and preferred and common
stock in other nonconsolidated vehicles;‰ Entering into interest rate, foreign currency, equity,commodity and credit derivatives, including total returnswaps; and‰ Providing guarantees, indemnifications, commitments,
letters of credit and representations and warranties.
We enter into these arrangements for a variety of businesspurposes, including securitizations. The securitization
vehicles that purchase mortgages, corporate bonds, andother types of financial assets are critical to the functioningof several significant investor markets, including the
mortgage-backed and other asset-backed securities
markets, since they offer investors access to specific cash
flows and risks created through the securitization process.
We also enter into these arrangements to underwrite client
securitization transactions; provide secondary market
liquidity; make investments in performing andnonperforming debt, distressed loans, power-related assets,
equity securities, real estate and other assets; provide
investors with credit-linked and asset-repackaged notes;
and receive or provide letters of credit to satisfy margin
requirements and to facilitate the clearance and settlement
process.

Contractual Obligations
We have certain contractual obligations which require us tomake future cash payments. These contractual obligations
include our time deposits, secured long-term financings,
unsecured long-term borrowings, interest payments andoperating lease payments.
Our obligations to make future cash payments also include
our commitments and guarantees related to off-balance
sheet arrangements, which are excluded from the tablebelow. See Note 18 to the consolidated financial statements
for further information about such commitments andguarantees.
Due to the uncertainty of the timing and amounts that will
ultimately be paid, our liability for unrecognized tax
benefits has been excluded from the table below. See
Note 24 to the consolidated financial statements for further
information about our unrecognized tax benefits.
The table below presents our contractual obligations by
type.
As of
$ in millions

Time deposits
Financings and borrowings:
Secured long-term
Unsecured long-term
Interest payments
Operating lease payments

June
2021

December2020$ 22,111$ 26,433$ 12,185$238,930$ 45,536$ 3,075$ 12,537$213,481$ 44,073$ 3,268

Goldman Sachs June 2021 Form 10-Q 130

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
The table below presents our contractual obligations by
expiration.
As of June 2021
$ in millions

Remainderof 2021

Time deposits
Financings and borrowings:
Secured long-term
Unsecured long-term
Interest payments
Operating lease payments

$

–

$
–
$
–
$2,650$ 162

2022 2023

2024 2025

2026 Thereafter$12,089 $ 6,606$$ 6,405$52,149$10,271$ 605$ 3,249$129,386$ 24,786$ 1,807$ 2,531$57,395$ 7,829
$ 501

3,416

In the table above:‰ Obligations maturing within one year of our financial
statement date or redeemable within one year of our
financial statement date at the option of the holders are
excluded as they are treated as short-term obligations. See
Note 14 to the consolidated financial statements forfurther information about our short-term borrowings.
‰ Obligations that are repayable prior to maturity at our
option are reflected at their contractual maturity dates
and obligations that are redeemable prior to maturity at
the option of the holders are reflected at the earliest dates
such options become exercisable.
‰ As of June 2021, unsecured long-term borrowings had
maturities extending through 2065, consisted principallyof senior borrowings, and included $8.43 billion ofadjustments to the carrying value of certain unsecured
long-term borrowings resulting from the application ofhedge accounting. See Note 14 to the consolidated
financial statements for further information about our
unsecured long-term borrowings.
‰ As of June 2021, the difference between aggregate
contractual principal amount and the related fair value of
long-term other secured financings for which the fairvalue option was elected was not material.
‰ As of June 2021, the fair value of unsecured long-termborrowings, for which the fair value option was elected,
exceeded the related aggregate contractual principal
amount by $298 million.
‰ Interest payments represents estimated future contractualinterest payments related to unsecured long-termborrowings, secured long-term financings and time
deposits based on applicable interest rates as of June 2021,
and includes stated coupons, if any, on structured notes.
‰ Operating lease payments includes lease commitments foroffice space that expire on various dates through 2069.
Certain agreements are subject to periodic escalation
provisions for increases in real estate taxes and othercharges. See Note 15 to the consolidated financial statements
for further information about our operating lease liabilities.

131 Goldman Sachs June 2021 Form 10-Q

Risk Management
Risks are inherent in our businesses and include liquidity,
market, credit, operational, model, legal, compliance,
conduct, regulatory and reputational risks. Our risks
include the risks across our risk categories, regions or global
businesses, as well as those which have uncertain outcomes
and have the potential to materially impact our financial
results, our liquidity and our reputation. For further
information about our risk management processes, see“Overview and Structure of Risk Management,” and for
information about our areas of risk, see “Liquidity Risk
Management,” “Market Risk Management,” “Credit Risk
Management,” “Operational Risk Management” and“Model Risk Management” and “Risk Factors” in Part I,
Item 1A of the 2020 Form 10-K.

Overview and Structure of Risk Management
Overview
We believe that effective risk management is critical to our
success. Accordingly, we have established an enterprise risk
management framework that employs a comprehensive,
integrated approach to risk management, and is designed toenable comprehensive risk management processes throughwhich we identify, assess, monitor and manage the risks weassume in conducting our activities. Our risk management
structure is built around three core components:
governance, processes and people.
Governance. Risk management governance starts with theBoard, which both directly and through its committees,
including its Risk Committee, oversees our risk
management policies and practices implemented throughthe enterprise risk management framework. The Board isalso responsible for the annual review and approval of ourrisk appetite statement. The risk appetite statement
describes the levels and types of risk we are willing to accept
or to avoid, in order to achieve our objectives included inour strategic business plan, while remaining in compliancewith regulatory requirements. The Board reviews our
strategic business plan and is ultimately responsible foroverseeing and providing direction about our strategy andrisk appetite.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
The Board receives regular briefings on firmwide risks,
including liquidity risk, market risk, credit risk, operationalrisk and model risk, from our independent risk oversightand control functions, including the chief risk officer, andon compliance risk and conduct risk from Compliance, on
legal and regulatory enforcement matters from the chief
legal officer, and on other matters impacting our reputationfrom the chair of our Firmwide Client and BusinessStandards Committee and our Firmwide Reputational Risk
Committee. The chief risk officer reports to our chief
executive officer and to the Risk Committee of the Board.
As part of the review of the firmwide risk portfolio, thechief risk officer regularly advises the Risk Committee of
the Board of relevant risk metrics and material exposures,
including risk limits and thresholds established in our risk
appetite statement.
The implementation of our risk governance structure andcore risk management processes are overseen by EnterpriseRisk, which reports to our chief risk officer, and is
responsible for ensuring that our enterprise risk
management framework provides the Board, our risk
committees and senior management with a consistent andintegrated approach to managing our various risks in amanner consistent with our risk appetite.
Our revenue-producing units, as well as Treasury,
Engineering, Human Capital Management, Operations,and Corporate and Workplace Solutions, are considered
our first line of defense. They are accountable for theoutcomes of our risk-generating activities, as well as forassessing and managing those risks within our risk appetite.
Our independent risk oversight and control functions are
considered our second line of defense and provide
independent assessment, oversight and challenge of therisks taken by our first line of defense, as well as lead andparticipate in risk committees. Independent risk oversightand control functions include Compliance, Conflicts
Resolution, Controllers, Legal, Risk and Tax.
Internal Audit is considered our third line of defense andour director of Internal Audit reports to the Audit
Committee of the Board and administratively to our chief
executive officer. Internal Audit includes professionals witha broad range of audit and industry experience, including
risk management expertise. Internal Audit is responsible forindependently assessing and validating the effectiveness of
key controls, including those within the risk management
framework, and providing timely reporting to the Audit
Committee of the Board, senior management andregulators.

The three lines of defense structure promotes theaccountability of first line risk takers, provides aframework for effective challenge by the second line andempowers independent review from the third line.
Processes. We maintain various processes that are criticalcomponents of our risk management framework, including(i) risk identification and assessment, (ii) risk appetite, limit
and threshold setting, (iii) risk reporting and monitoring,and (iv) risk decision-making.
‰ Risk Identification and Assessment. We believe thatthe identification and assessment of our risks is a criticalstep in providing our Board and senior managementtransparency and insight into the range and materiality of
our risks. We have a comprehensive data collection
process, including firmwide policies and procedures that
require all employees to report and escalate risk events.
Our approach for risk identification and assessment iscomprehensive across all risk types, is dynamic andforward-looking to reflect and adapt to our changing risk
profile and business environment, leverages subject
matter expertise, and allows for prioritization of our mostcritical risks.
To effectively assess our risks, we maintain a daily
discipline of marking substantially all of our inventory tocurrent market levels. We carry our inventory at fairvalue, with changes in valuation reflected immediately in
our risk management systems and in net revenues. We doso because we believe this discipline is one of the mosteffective tools for assessing and managing risk and that itprovides transparent and realistic insight into ourinventory exposures.
An important part of our risk management process isfirmwide stress testing. It allows us to quantify our
exposure to tail risks, highlight potential loss
concentrations, undertake risk/reward analysis, andassess and mitigate our risk positions. Firmwide stresstests are performed on a regular basis and are designed toensure a comprehensive analysis of our vulnerabilities
and idiosyncratic risks combining financial andnonfinancial risks, including, but not limited to, credit,
market, liquidity and funding, operational andcompliance, strategic, systemic and emerging risks into asingle combined scenario. We also perform ad hoc stresstests in anticipation of market events or conditions. Stresstests are also used to assess capital adequacy as part ofour capital planning and stress testing process. See“Equity Capital Management and Regulatory Capital —Equity Capital Management” for further information.

Goldman Sachs June 2021 Form 10-Q 132

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis‰ Risk Appetite, Limit and Threshold Setting. We apply
a rigorous framework of limits and thresholds to control
and monitor risk across transactions, products,
businesses and markets. The Board, directly or indirectly
through its Risk Committee, approves limits andthresholds included in our risk appetite statement at
firmwide, business and product levels. In addition, theFirmwide Enterprise Risk Committee is responsible forapproving our risk limits framework, subject to theoverall limits approved by the Risk Committee of theBoard, and monitoring these limits.
The Risk Governance Committee is responsible forapproving limits at firmwide, business and productlevels. Certain limits may be set at levels that will require
periodic adjustment, rather than at levels that reflect our
maximum risk appetite. This fosters an ongoing dialogue
about risk among our first and second lines of defense,
committees and senior management, as well as rapid
escalation of risk-related matters. Additionally, throughdelegated authority from the Risk GovernanceCommittee, Market Risk sets limits at certain productand desk levels, and Credit Risk sets limits for individual
counterparties, counterparties and their subsidiaries,
industries and countries. Limits are reviewed regularly
and amended on a permanent or temporary basis toreflect changing market conditions, business conditions
or risk tolerance.
‰ Risk Reporting and Monitoring. Effective risk
reporting and risk decision-making depends on ourability to get the right information to the right people atthe right time. As such, we focus on the rigor andeffectiveness of our risk systems, with the objective ofensuring that our risk management technology systems
provide us with complete, accurate and timely
information. Our risk reporting and monitoring processes
are designed to take into account information about both
existing and emerging risks, thereby enabling our risk
committees and senior management to perform their
responsibilities with the appropriate level of insight intorisk exposures. Furthermore, our limit and thresholdbreach processes provide means for timely escalation. We
evaluate changes in our risk profile and our businesses,
including changes in business mix or jurisdictions inwhich we operate, by monitoring risk factors at a
firmwide level.

133 Goldman Sachs June 2021 Form 10-Q

‰ Risk Decision-Making. Our governance structure
provides the protocol and responsibility fordecision-making on risk management issues and ensures
implementation of those decisions. We make extensive
use of risk committees that meet regularly and serve as animportant means to facilitate and foster ongoing
discussions to manage and mitigate risks.
We maintain strong and proactive communication aboutrisk and we have a culture of collaboration in decisionmaking among our first and second lines of defense,
committees and senior management. While our first lineof defense is responsible for management of their risk, we
dedicate extensive resources to our second line of defense
in order to ensure a strong oversight structure and an
appropriate segregation of duties. We regularly reinforce
our strong culture of escalation and accountability acrossall functions.
People. Even the best technology serves only as a tool for
helping to make informed decisions in real time about therisks we are taking. Ultimately, effective risk management
requires our people to interpret our risk data on an ongoing
and timely basis and adjust risk positions accordingly. The
experience of our professionals, and their understanding of
the nuances and limitations of each risk measure, guides us
in assessing exposures and maintaining them within
prudent levels.
We reinforce a culture of effective risk management,
consistent with our risk appetite, in our training anddevelopment programs, as well as in the way we evaluate
performance, and recognize and reward our people. Our
training and development programs, including certain
sessions led by our most senior leaders, are focused on theimportance of risk management, client relationships andreputational excellence. As part of our performance review
process, we assess reputational excellence, including how
an employee exercises good risk management andreputational judgment, and adheres to our code of conductand compliance policies. Our review and reward processes
are designed to communicate and reinforce to our
professionals the link between behavior and how people arerecognized, the need to focus on our clients and our
reputation, and the need to always act in accordance with
our highest standards.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Structure
Ultimate oversight of risk is the responsibility of our Board.
The Board oversees risk both directly and through its
committees, including its Risk Committee. We have a seriesof committees with specific risk management mandates thathave oversight or decision-making responsibilities for risk
management activities. Committee membership generally
consists of senior managers from both our first and secondlines of defense. We have established procedures for thesecommittees to ensure that appropriate information barriers
are in place. Our primary risk committees, most of which
also have additional sub-committees, councils or working
groups, are described below. In addition to thesecommittees, we have other risk committees that provide
oversight for different businesses, activities, products,
regions and entities. All of our committees have
responsibility for considering the impact on our reputationof the transactions and activities that they oversee.
Membership of our risk committees is reviewed regularly
and updated to reflect changes in the responsibilities of thecommittee members. Accordingly, the length of time thatmembers serve on the respective committees varies as
determined by the committee chairs and based on the
responsibilities of the members.
The chart below presents an overview of our risk
management governance structure.
Corporate Oversight
Board of Directors
Board Commiees
Senior Management OversightChief Execuve Oﬃcer
President/Chief Operang Oﬃcer
Chief Financial Oﬃcer
Director ofInternal Audit
Firmwide Enterprise Risk
CommieeCommiee OversightManagement Commiee
Firmwide Client and BusinessStandards Commiee

Chief Risk Oﬃcer
Firmwide Asset Liability
Commiee

Management Committee. The Management Committee
oversees our global activities. It provides this oversightdirectly and through authority delegated to committees it
has established. This committee consists of our most seniorleaders, and is chaired by our chief executive officer. Most
members of the Management Committee are also membersof other committees. The following are the committees thatare principally involved in firmwide risk management.

Firmwide Enterprise Risk Committee. The Firmwide
Enterprise Risk Committee is responsible for overseeing allof our financial and nonfinancial risks. As part of suchoversight, the committee is responsible for the ongoing
review, approval and monitoring of our enterprise risk
management framework, as well as our risk limits
framework. This committee is co-chaired by our chief
financial officer and our chief risk officer, who areappointed as chairs by our chief executive officer, andreports to the Management Committee. The following are
the primary committees or councils that report to the
Firmwide Enterprise Risk Committee:‰ Firmwide Risk Council. The Firmwide Risk Council is
responsible for the ongoing monitoring of relevant
financial risks and related risk limits at the firmwide,business and product levels. This council is co-chaired by
the chairs of the Firmwide Enterprise Risk Committee.
‰ Firmwide New Activity Committee. The Firmwide
New Activity Committee is responsible for reviewing newactivities and for establishing a process to identify andreview previously approved activities that are significant
and that have changed in complexity and/or structure orpresent different reputational and suitability concerns
over time to consider whether these activities remain
appropriate. This committee is co-chaired by thecontroller and chief accounting officer, and the head ofOperations and Platform Engineering for the Global
Markets Division, who are appointed as chairs by thechairs of the Firmwide Enterprise Risk Committee.
‰ Firmwide Operational Risk and Resilience
Committee. The Firmwide Operational Risk andResilience Committee is responsible for overseeing
operational risk, and for ensuring our business andoperational resilience. To assist the Firmwide
Operational Risk and Resilience Committee in carryingout its mandate, other risk committees with dedicatedoversight for technology-related risks, including cybersecurity matters, report into the Firmwide Operational
Risk and Resilience Committee. This committee isco-chaired by our chief administrative officer and deputy
chief risk officer, who are appointed as chairs by thechairs of the Firmwide Enterprise Risk Committee.

Goldman Sachs June 2021 Form 10-Q 134

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis‰ Firmwide Conduct Committee. The Firmwide
Conduct Committee is responsible for the ongoingapproval and monitoring of the frameworks and policies
which govern our conduct risks. Conduct risk is the riskthat our people fail to act in a manner consistent with ourBusiness Principles and related core values, policies orcodes, or applicable laws or regulations, thereby fallingshort in fulfilling their responsibilities to us, our clients,
colleagues, other market participants or the broader
community. This committee is chaired by our chief legal
officer, who is appointed as chair by the chairs of the
Firmwide Enterprise Risk Committee.
‰ Risk Governance Committee. The Risk GovernanceCommittee (through delegated authority from the
Firmwide Enterprise Risk Committee) is responsible forthe ongoing approval and monitoring of risk frameworks,
policies and parameters related to our core risk
management processes, as well as limits, at firmwide,business and product levels. In addition, this committee
reviews the results of stress tests and scenario analyses. To
assist the Risk Governance Committee in carrying out its
mandate, a number of other risk committees withdedicated oversight for stress testing, model risks andVolcker Rule compliance report into the Risk
Governance Committee. This committee is chaired by ourchief risk officer, who is appointed as chair by the chairsof the Firmwide Enterprise Risk Committee.
Firmwide Client and Business Standards Committee.
The Firmwide Client and Business Standards Committee is
responsible for overseeing relationships with our clients,
client service and experience, and related businessstandards, as well as client-related reputational matters.
This committee is chaired by our president and chief
operating officer, who is appointed as chair by the chief
executive officer, and reports to the Management
Committee. This committee periodically provides updates
to, and receives guidance from, the Public Responsibilities
Committee of the Board.

The following committees report jointly to the Firmwide
Enterprise Risk Committee and the Firmwide Client andBusiness Standards Committee:‰ Firmwide Reputational Risk Committee. The
Firmwide Reputational Risk Committee is responsible forassessing reputational risks arising from transactions thathave been identified as having potential heightened
reputational risk pursuant to the criteria established by
the Firmwide Reputational Risk Committee and as
determined by committee leadership. This committee ischaired by our president and chief operating officer, who
is appointed as chair by the chief executive officer, andthe vice-chairs are our chief legal officer and the chair ofConflicts Resolution, who are appointed as vice-chairs by
the chair of the Firmwide Reputational Risk Committee.
This committee periodically provides updates to, andreceives guidance from, the Public Responsibilities
Committee of the Board.
‰ Firmwide Suitability Committee. The Firmwide
Suitability Committee is responsible for setting standards
and policies for product, transaction and client suitability
and providing a forum for consistency across functions,regions and products on suitability assessments. This
committee also reviews suitability matters escalated fromother committees. This committee is co-chaired by ourchief compliance officer, and the co-head of EMEA FICC
sales, who are appointed as chairs by the chair of the
Firmwide Client and Business Standards Committee.
‰ Firmwide Investment Policy Committee. The
Firmwide Investment Policy Committee periodicallyreviews our investing and lending activities on a portfolio
basis, including review of risk management and controls,
and sets business standards and policies for these types ofinvestments. This committee is co-chaired by the head of
our Asset Management Division, a co-head of our Global
Markets Division and the chief risk officer, who areappointed as chairs by our president and chief operating
officer and our chief financial officer.
‰ Firmwide Capital Committee. The Firmwide CapitalCommittee provides approval and oversight of debtrelated transactions, including principal commitments ofour capital. This committee aims to ensure that business,
reputational and suitability standards for underwritingsand capital commitments are maintained on a global
basis. This committee is co-chaired by the head of Market
Risk and a co-head of the Financing Group, who areappointed as chairs by the chairs of the Firmwide
Enterprise Risk Committee.

135 Goldman Sachs June 2021 Form 10-Q

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis‰ Firmwide Commitments Committee. The Firmwide
Commitments Committee reviews our underwriting anddistribution activities with respect to equity and equityrelated product offerings, and sets and maintains policies
and procedures designed to ensure that legal,
reputational, regulatory and business standards aremaintained on a global basis. In addition to reviewing
specific transactions, this committee periodicallyconducts general strategic reviews of sectors and products
and establishes policies in connection with transaction
practices. This committee is co-chaired by the co-head of
the Industrials Group in our Investment Banking
Division, the chief underwriting officer for EMEA, and amanaging director in our Investment Banking Division,
who are appointed as chairs by the chair of the Firmwide
Client and Business Standards Committee.
Firmwide Asset Liability Committee. The Firmwide
Asset Liability Committee reviews and approves thestrategic direction for our financial resources, including
capital, liquidity, funding and balance sheet. This
committee has oversight responsibility for asset liability
management, including interest rate and currency risk,
funds transfer pricing, capital allocation and incentives, andcredit ratings. This committee makes recommendations as
to any adjustments to asset liability management andfinancial resource allocation in light of current events, risks,
exposures, and regulatory requirements and approves
related policies. This committee is co-chaired by our chief
financial officer and our global treasurer, who areappointed as chairs by our chief executive officer, andreports to the Management Committee.
Conflicts Management
Conflicts of interest and our approach to dealing with them
are fundamental to our client relationships, our reputationand our long-term success. The term “conflict of interest”
does not have a universally accepted meaning, and conflicts
can arise in many forms within a business or between
businesses. The responsibility for identifying potential
conflicts, as well as complying with our policies andprocedures, is shared by all of our employees.

As a general matter, Conflicts Resolution reviews financing
and advisory assignments in Investment Banking andcertain of our investing, lending and other activities. In
addition, we have various transaction oversightcommittees, such as the Firmwide Capital, Commitments
and Suitability Committees and other committees that also
review new underwritings, loans, investments andstructured products. These groups and committees workwith internal and external counsel and Compliance toevaluate and address any actual or potential conflicts. The
head of Conflicts Resolution reports to our chief legal
officer, who reports to our chief executive officer.
We regularly assess our policies and procedures that
address conflicts of interest in an effort to conduct ourbusiness in accordance with the highest ethical standards
and in compliance with all applicable laws, rules andregulations.
Compliance Risk Management
Compliance risk is the risk of legal or regulatory sanctions,material financial loss or damage to our reputation arisingfrom our failure to comply with the requirements ofapplicable laws, rules and regulations, and our internal
policies and procedures. Compliance risk is inherent in all
activities through which we conduct our businesses. Our
Compliance Risk Management Program, administered byCompliance, assesses our compliance, regulatory andreputational risk; monitors for compliance with new oramended laws, rules and regulations; designs andimplements controls, policies, procedures and training;
conducts independent testing; investigates, surveils andmonitors for compliance risks and breaches; and leads our
responses to regulatory examinations, audits and inquiries.
We monitor and review business practices to assess whether
they meet or exceed minimum regulatory and legal
standards in all markets and jurisdictions in which we
conduct business.

We have a multilayered approach to resolving conflicts andaddressing reputational risk. Our senior management
oversees policies related to conflicts resolution, and, in
conjunction with Conflicts Resolution, Legal andCompliance, the Firmwide Client and Business Standards
Committee, and other internal committees, formulates
policies, standards and principles, and assists in making
judgments regarding the appropriate resolution ofparticular conflicts. Resolving potential conflicts
necessarily depends on the facts and circumstances of aparticular situation and the application of experienced andinformed judgment.

Goldman Sachs June 2021 Form 10-Q 136

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Liquidity Risk Management
Overview
Liquidity risk is the risk that we will be unable to fundourselves or meet our liquidity needs in the event of firmspecific, broader industry or market liquidity stress events.
We have in place a comprehensive and conservative set of
liquidity and funding policies. Our principal objective is tobe able to fund ourselves and to enable our core businesses
to continue to serve clients and generate revenues, evenunder adverse circumstances.
Treasury, which reports to our chief financial officer, has
primary responsibility for developing, managing andexecuting our liquidity and funding strategy within our risk
appetite.
Liquidity Risk, which is independent of our revenueproducing units and Treasury, and reports to our chief risk
officer, has primary responsibility for assessing, monitoringand managing our liquidity risk through firmwide oversightacross our global businesses and the establishment of stresstesting and limits frameworks.
Liquidity Risk Management Principles
We manage liquidity risk according to three principles:(i) hold sufficient excess liquidity in the form of GCLA tocover outflows during a stressed period, (ii) maintainappropriate Asset-Liability Management and (iii) maintaina viable Contingency Funding Plan.
GCLA. GCLA is liquidity that we maintain to meet a broad
range of potential cash outflows and collateral needs in a
stressed environment. A primary liquidity principle is topre-fund our estimated potential cash and collateral needs
during a liquidity crisis and hold this liquidity in the form of
unencumbered, highly liquid securities and cash. We believethat the securities held in our GCLA would be readily
convertible to cash in a matter of days, through liquidation,by entering into repurchase agreements or from maturities
of resale agreements, and that this cash would allow us tomeet immediate obligations without needing to sell otherassets or depend on additional funding from credit-sensitivemarkets.
Our GCLA reflects the following principles:‰ The first days or weeks of a liquidity crisis are the mostcritical to a company’s survival;‰ Focus must be maintained on all potential cash andcollateral outflows, not just disruptions to financing
flows. Our businesses are diverse, and our liquidity needs
are determined by many factors, including market
movements, collateral requirements and client
commitments, all of which can change dramatically in adifficult funding environment;

137 Goldman Sachs June 2021 Form 10-Q

‰ During a liquidity crisis, credit-sensitive funding,including unsecured debt, certain deposits and some typesof secured financing agreements, may be unavailable, andthe terms (e.g., interest rates, collateral provisions andtenor) or availability of other types of secured financing
may change and certain deposits may be withdrawn; and‰ As a result of our policy to pre-fund liquidity that we
estimate may be needed in a crisis, we hold more
unencumbered securities and have larger fundingbalances than our businesses would otherwise require.
We believe that our liquidity is stronger with greaterbalances of highly liquid unencumbered securities, eventhough it increases our total assets and our funding costs.
We maintain our GCLA across Group Inc., Goldman Sachs
Funding LLC (Funding IHC) and Group Inc.’s major
broker-dealer and bank subsidiaries, asset types andclearing agents to provide us with sufficient operating
liquidity to ensure timely settlement in all major markets,
even in a difficult funding environment. In addition to the
GCLA, we maintain cash balances and securities in severalof our other entities, primarily for use in specific currencies,
entities or jurisdictions where we do not have immediate
access to parent company liquidity.
Asset-Liability Management. Our liquidity risk
management policies are designed to ensure we have asufficient amount of financing, even when funding markets
experience persistent stress. We manage the maturities anddiversity of our funding across markets, products andcounterparties, and seek to maintain a diversified funding
profile with an appropriate tenor, taking into consideration
the characteristics and liquidity profile of our assets.
Our approach to asset-liability management includes:‰ Conservatively managing the overall characteristics of
our funding book, with a focus on maintaining long-term,
diversified sources of funding in excess of our current
requirements. See “Balance Sheet and Funding Sources —Funding Sources” for further information;‰ Actively managing and monitoring our asset base, withparticular focus on the liquidity, holding period andability to fund assets on a secured basis. We assess ourfunding requirements and our ability to liquidate assets ina stressed environment while appropriately managing
risk. This enables us to determine the most appropriate
funding products and tenors. See “Balance Sheet andFunding Sources — Balance Sheet Management” forfurther information about our balance sheet management
process and “— Funding Sources — Secured Funding”
for further information about asset classes that may beharder to fund on a secured basis; andTHE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis‰ Raising secured and unsecured financing that has a longtenor relative to the liquidity profile of our assets. This
reduces the risk that our liabilities will come due inadvance of our ability to generate liquidity from the saleof our assets. Because we maintain a highly liquid balance
sheet, the holding period of certain of our assets may bematerially shorter than their contractual maturity dates.
Our goal is to ensure that we maintain sufficient liquidity tofund our assets and meet our contractual and contingent
obligations in normal times, as well as during periods ofmarket stress. Through our dynamic balance sheet
management process, we use actual and projected asset
balances to determine secured and unsecured funding
requirements. Funding plans are reviewed and approved by
the Firmwide Asset Liability Committee. In addition, our
independent risk oversight and control functions analyze,
and the Firmwide Asset Liability Committee reviews, ourconsolidated total capital position (unsecured long-termborrowings plus total shareholders’ equity) so that we
maintain a level of long-term funding that is sufficient tomeet our long-term financing requirements. In a liquidity
crisis, we would first use our GCLA in order to avoid
reliance on asset sales (other than our GCLA). However, we
recognize that orderly asset sales may be prudent ornecessary in a severe or persistent liquidity crisis.
Subsidiary Funding Policies
The majority of our unsecured funding is raised by Group
Inc., which provides the necessary funds to Funding IHC
and other subsidiaries, some of which are regulated, to meettheir asset financing, liquidity and capital requirements. In
addition, Group Inc. provides its regulated subsidiaries
with the necessary capital to meet their regulatory
requirements. The benefits of this approach to subsidiaryfunding are enhanced control and greater flexibility to meetthe funding requirements of our subsidiaries. Funding is
also raised at the subsidiary level through a variety of
products, including deposits, secured funding andunsecured borrowings.
Our intercompany funding policies assume that a
subsidiary’s funds or securities are not freely available to its
parent, Funding IHC or other subsidiaries unless (i) legallyprovided for and (ii) there are no additional regulatory, tax
or other restrictions. In particular, many of our subsidiaries
are subject to laws that authorize regulatory bodies to blockor reduce the flow of funds from those subsidiaries toGroup Inc. or Funding IHC. Regulatory action of that kind
could impede access to funds that Group Inc. needs to makepayments on its obligations. Accordingly, we assume thatthe capital provided to our regulated subsidiaries is notavailable to Group Inc. or other subsidiaries and any otherfinancing provided to our regulated subsidiaries is notavailable to Group Inc. or Funding IHC until the maturityof such financing.

Group Inc. has provided substantial amounts of equity andsubordinated indebtedness, directly or indirectly, to its
regulated subsidiaries. For example, as of June 2021,
Group Inc. had $35.15 billion of equity and subordinatedindebtedness invested in GS&Co., its principal U.S.
registered broker-dealer; $43.55 billion invested in GSI, aregulated U.K. broker-dealer; $2.83 billion invested in
GSJCL, a regulated Japanese broker-dealer; $36.31 billion
invested in GS Bank USA, a regulated New York Statechartered bank; $4.23 billion invested in GSIB, a regulated
U.K. bank; and $6.46 billion invested in GSBE, a regulated
German bank. Group Inc. also provides financing, directly
or indirectly, in the form of: $82.05 billion of
unsubordinated loans (including secured loans of$32.12 billion) and $22.65 billion of collateral and cash
deposits to these entities, substantially all of which was to
GS&Co., GSI, GSJCL and GS Bank USA, as of June 2021.
In addition, as of June 2021, Group Inc. had significant
amounts of capital invested in and loans to its otherregulated subsidiaries.
Contingency Funding Plan. We maintain a contingency
funding plan to provide a framework for analyzing andresponding to a liquidity crisis situation or periods ofmarket stress. Our contingency funding plan outlines a listof potential risk factors, key reports and metrics that are
reviewed on an ongoing basis to assist in assessing theseverity of, and managing through, a liquidity crisis and/or
market dislocation. The contingency funding plan also
describes in detail our potential responses if ourassessments indicate that we have entered a liquidity crisis,
which include pre-funding for what we estimate will be ourpotential cash and collateral needs, as well as utilizing
secondary sources of liquidity. Mitigants and action items
to address specific risks which may arise are also describedand assigned to individuals responsible for execution.
The contingency funding plan identifies key groups ofindividuals and their responsibilities, which include
fostering effective coordination, control and distribution of
information, implementing liquidity maintenance activities
and managing internal and external communication, all ofwhich are critical in the management of a crisis or period ofmarket stress.

Goldman Sachs June 2021 Form 10-Q 138

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Stress Tests
In order to determine the appropriate size of our GCLA, we
model liquidity outflows over a range of scenarios and time
horizons. One of our primary internal liquidity risk models,referred to as the Modeled Liquidity Outflow, quantifies our
liquidity risks over a 30-day stress scenario. We also consider
other factors, including, but not limited to, an assessment ofour potential intraday liquidity needs through an additional
internal liquidity risk model, referred to as the Intraday
Liquidity Model, the results of our long-term stress testingmodels, our resolution liquidity models and other applicableregulatory requirements and a qualitative assessment of ourcondition, as well as the financial markets. The results of theModeled Liquidity Outflow, the Intraday Liquidity Model,
the long-term stress testing models and the resolution
liquidity models are reported to senior management on aregular basis. We also perform firmwide stress tests. See“Overview and Structure of Risk Management” for
information about firmwide stress tests.
Modeled Liquidity Outflow. Our Modeled Liquidity
Outflow is based on conducting multiple scenarios that
include combinations of market-wide and firm-specificstress. These scenarios are characterized by the following
qualitative elements:‰ Severely challenged market environments, which includes
low consumer and corporate confidence, financial andpolitical instability, and adverse changes in market values,
including potential declines in equity markets andwidening of credit spreads; and‰ A firm-specific crisis potentially triggered by material
losses, reputational damage, litigation and/or a ratings
downgrade.
The following are key modeling elements of our Modeled
Liquidity Outflow:‰ Liquidity needs over a 30-day scenario;‰ A two-notch downgrade of our long-term seniorunsecured credit ratings;‰ Changing conditions in funding markets, which limit ouraccess to unsecured and secured funding;‰ No support from additional government funding
facilities. Although we have access to various central bankfunding programs, we do not assume reliance on
additional sources of funding in a liquidity crisis; and‰ A combination of contractual outflows, such as
upcoming maturities of unsecured debt, and contingent
outflows, including, but not limited to, the withdrawal ofcustomer credit balances in our prime brokerage business,increase in variation margin requirements due to adversechanges in the value of our exchange-traded andOTC-cleared derivatives, and withdrawals of deposits
that have no contractual maturity.
139 Goldman Sachs June 2021 Form 10-Q

Intraday Liquidity Model. Our Intraday Liquidity Modelmeasures our intraday liquidity needs using a scenario
analysis characterized by the same qualitative elements as
our Modeled Liquidity Outflow. The model assesses therisk of increased intraday liquidity requirements during a
scenario where access to sources of intraday liquidity may
become constrained.
Long-Term Stress Testing. We utilize longer-term stresstests to take a forward view on our liquidity position
through prolonged stress periods in which we experience a
severe liquidity stress and recover in an environment that
continues to be challenging. We are focused on ensuringconservative asset-liability management to prepare for a
prolonged period of potential stress, seeking to maintain adiversified funding profile with an appropriate tenor,
taking into consideration the characteristics and liquidity
profile of our assets.
Resolution Liquidity Models. In connection with ourresolution planning efforts, we have established ourResolution Liquidity Adequacy and Positioning
framework, which estimates liquidity needs of our major
subsidiaries in a stressed environment. The liquidity needs
are measured using our Modeled Liquidity Outflow
assumptions and include certain additional inter-affiliate
exposures. We have also established our Resolution
Liquidity Execution Need framework, which measures theliquidity needs of our major subsidiaries to stabilize andwind-down following a Group Inc. bankruptcy filing inaccordance with our preferred resolution strategy.
In addition, we have established a triggers and alerts
framework, which is designed to provide the Board withinformation needed to make an informed decision onwhether and when to commence bankruptcy proceedingsfor Group Inc.
LimitsWe use liquidity risk limits at various levels and acrossliquidity risk types to manage the size of our liquidity
exposures. Limits are measured relative to acceptable levelsof risk given our liquidity risk tolerance. See “Overview andStructure of Risk Management” for information about thelimit approval process.
Limits are monitored by Treasury and Liquidity Risk.
Liquidity Risk is responsible for identifying and escalating
to senior management and/or the appropriate risk
committee, on a timely basis, instances where limits havebeen exceeded.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
GCLA and Unencumbered Metrics
GCLA. Based on the results of our internal liquidity risk
models, described above, as well as our consideration ofother factors, including, but not limited to, a qualitative
assessment of our condition, as well as the financial
markets, we believe our liquidity position as of bothJune 2021 and December 2020 was appropriate. We
strictly limit our GCLA to a narrowly defined list of
securities and cash because they are highly liquid, even in adifficult funding environment. We do not include otherpotential sources of excess liquidity in our GCLA, such asless liquid unencumbered securities or committed credit
facilities.
The table below presents information about our GCLA.
Average for theThree Months Ended
June
2021

March
2021

Denomination
U.S. dollar
Non-U.S. dollar
Total$217,977
111,427$329,404$188,854
109,788$298,642

Asset Class
Overnight cash deposits
U.S. government obligations
U.S. agency obligations
Non-U.S. government obligations
Total$171,007
106,708
8,227
43,462$329,404$132,317
108,339
9,295
48,691$298,642

Entity TypeGroup Inc. and Funding IHC
Major broker-dealer subsidiaries
Major bank subsidiaries
Total$ 53,327
102,593
173,484$329,404$ 44,300
94,232
160,110$298,642$ in millions

In the table above:‰ The U.S. dollar-denominated GCLA consists of(i) unencumbered U.S. government and agency
obligations (including highly liquid U.S. agency
mortgage-backed obligations), all of which are eligible as
collateral in Federal Reserve open market operations and(ii) certain overnight U.S. dollar cash deposits.
‰ The non-U.S. dollar-denominated GCLA consists of
non-U.S. government obligations (only unencumbered
German, French, Japanese and U.K. government
obligations) and certain overnight cash deposits in highly
liquid currencies.

We maintain our GCLA to enable us to meet current andpotential liquidity requirements of our parent company,
Group Inc., and its subsidiaries. Our Modeled Liquidity
Outflow and Intraday Liquidity Model incorporate arequirement for Group Inc., as well as a standalone
requirement for each of our major broker-dealer and banksubsidiaries. Funding IHC is required to provide thenecessary liquidity to Group Inc. during the ordinary courseof business, and is also obligated to provide capital andliquidity support to major subsidiaries in the event of ourmaterial financial distress or failure. Liquidity held directlyin each of our major broker-dealer and bank subsidiaries isintended for use only by that subsidiary to meet its liquidity
requirements and is assumed not to be available to Group
Inc. or Funding IHC unless (i) legally provided for and(ii) there are no additional regulatory, tax or otherrestrictions. In addition, the Modeled Liquidity Outflow
and Intraday Liquidity Model also incorporate a broader
assessment of standalone liquidity requirements for othersubsidiaries and we hold a portion of our GCLA directly atGroup Inc. or Funding IHC to support such requirements.
Other Unencumbered Assets. In addition to our GCLA,
we have a significant amount of other unencumbered cash
and financial instruments, including other government
obligations, high-grade money market securities, corporate
obligations, marginable equities, loans and cash deposits
not included in our GCLA. The fair value of our
unencumbered assets averaged $249.61 billion for the threemonths ended June 2021 and $224.01 billion for the threemonths ended March 2021. We do not consider these assets
liquid enough to be eligible for our GCLA.
Liquidity Regulatory Framework
As a BHC, we are subject to a minimum Liquidity Coverage
Ratio (LCR) under the LCR rule approved by the U.S.
federal bank regulatory agencies. The LCR rule requiresorganizations to maintain an adequate ratio of eligible
high-quality liquid assets (HQLA) to expected net cash
outflows under an acute, short-term liquidity stressscenario. Eligible HQLA excludes HQLA held bysubsidiaries that is in excess of their minimum requirement
and is subject to transfer restrictions. We are required tomaintain a minimum LCR of 100%. We expect thatfluctuations in client activity, business mix and the market
environment will impact our LCR.

Goldman Sachs June 2021 Form 10-Q 140

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
The table below presents information about our average
daily LCR.
Average for theThree Months Ended$ in millions

Total HQLA
Eligible HQLANet cash outflows
LCR

June
2021

March
2021

$318,525$238,397$172,895$288,142$210,133$151,993

138%

138%

Credit Ratings
We rely on the short- and long-term debt capital markets tofund a significant portion of our day-to-day operations andthe cost and availability of debt financing is influenced byour credit ratings. Credit ratings are also important when
we are competing in certain markets, such as OTC
derivatives, and when we seek to engage in longer-termtransactions. See “Risk Factors” in Part I, Item 1A of the2020 Form 10-K for information about the risks associatedwith a reduction in our credit ratings.

In October 2020, the U.S. federal bank regulatory agencies
issued a final rule that establishes a net stable funding ratio(NSFR) requirement for large U.S. banking organizations.
This rule became effective on July 1, 2021 and requires
banking organizations to ensure they have access to stable
funding over a one-year time horizon. The rule also requires
disclosure of the ratio on a semi-annual basis and a
description of the banking organization’s stable funding
sources beginning in 2023. Our NSFR as of June 2021
exceeded the minimum requirement, based on ourinterpretation of the final rule.

The table below presents the unsecured credit ratings andoutlook of Group Inc.

The following provides information about our subsidiaryliquidity regulatory requirements:‰ The ratings and outlook are by DBRS, Inc. (DBRS), Fitch,
Inc. (Fitch), Moody’s Investors Service (Moody’s), Rating
and Investment Information, Inc. (R&I), and Standard &Poor’s Ratings Services (S&P).

‰ GS Bank USA. GS Bank USA is subject to a minimum
LCR of 100% under the LCR rule approved by the U.S.
federal bank regulatory agencies. As of June 2021, GS
Bank USA’s LCR exceeded the minimum requirement.
The NSFR requirement described above will also apply to
GS Bank USA. As of June 2021, GS Bank USA’s NSFR
exceeded the minimum requirement.
‰ GSI. GSI is subject to a minimum LCR of 100% under
the LCR rule approved by the U.K. regulatory authorities.
GSI’s average monthly LCR for the trailing twelve-month
period ended June 2021 exceeded the minimum
requirement. GSI is subject to the NSFR requirement
implemented in the U.K., which is expected to become
effective in January 2022.
‰ Other Subsidiaries. We monitor local regulatory
liquidity requirements of our subsidiaries to ensurecompliance. For many of our subsidiaries, theserequirements either have changed or are likely to change
in the future due to the implementation of the BaselCommittee’s framework for liquidity risk measurement,
standards and monitoring, as well as other regulatory
developments.
The implementation of these rules and any amendments
adopted by the regulatory authorities could impact our
liquidity and funding requirements and practices in the
future.

141 Goldman Sachs June 2021 Form 10-Q

As of June 2021
DBRS

Fitch

Short-term debt
R-1 (middle)
F1
Long-term debt
A (high)A
Subordinated debt
A BBB+
Trust preferred
A
BBBPreferred stock
BBB (high) BBBRatings outlook
Stable Stable

Moody’s

R&I

S&P

P-1
a-1
A-2
A2
A BBB+Baa2
ABBBBaa3
N/A
BB
Ba1
N/A
BB
Stable Stable Stable

In the table above:‰ The ratings for trust preferred relate to the guaranteed
preferred beneficial interests issued by Goldman Sachs
Capital I.
‰ The DBRS, Fitch, Moody’s and S&P ratings for preferredstock include the APEX issued by Goldman Sachs
Capital II and Goldman Sachs Capital III.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
The table below presents the unsecured credit ratings andoutlook of GS Bank USA, GSIB, GSBE, GS&Co. and GSI.
As of June 2021

GS Bank USA
Short-term debt
Long-term debt
Short-term bank deposits
Long-term bank deposits
Ratings outlook
GSIB
Short-term debt
Long-term debt
Short-term bank deposits
Long-term bank deposits
Ratings outlook
GSBE
Short-term debt
Long-term debt
Short-term bank deposits
Long-term bank deposits
Ratings outlook
GS&Co.
Short-term debt
Long-term debt
Ratings outlook
GSI
Short-term debt
Long-term debt
Ratings outlook

Fitch

Moody’s

S&P

F1
A+
F1+
AAStable

P-1
A1
P-1
A1
Stable

A-1
A+
N/A
N/A
StableF1A+
F1A+
Stable

P-1
A1
P-1
A1
Stable

A-1
A+
N/A
N/A
Stable

F1
A
N/A
N/A
Stable

P-1
A1
P-1
A1
Stable

A-1
A+
N/A
N/A
StableF1
A+
Stable

N/A
N/A
N/A

A-1
A+
StableF1
A+
StableP-1
A1
StableA-1
A+
StableWe believe our credit ratings are primarily based on thecredit rating agencies’ assessment of:‰ Our liquidity, market, credit and operational risk
management practices;‰ Our level and variability of earnings;‰ Our capital base;‰ Our franchise, reputation and management;‰ Our corporate governance; and‰ The external operating and economic environment,
including, in some cases, the assumed level of government
support or other systemic considerations, such as
potential resolution.
Certain of our derivatives have been transacted underbilateral agreements with counterparties who may require
us to post collateral or terminate the transactions based onchanges in our credit ratings. We manage our GCLA toensure we would, among other potential requirements, beable to make the additional collateral or termination
payments that may be required in the event of a two-notch
reduction in our long-term credit ratings, as well as
collateral that has not been called by counterparties, but isavailable to them.

See Note 7 to the consolidated financial statements forfurther information about derivatives with credit-related
contingent features and the additional collateral or
termination payments related to our net derivative
liabilities under bilateral agreements that could have beencalled by counterparties in the event of a one- or two-notch
downgrade in our credit ratings.
Cash FlowsAs a global financial institution, our cash flows are complex
and bear little relation to our net earnings and net assets.
Consequently, we believe that traditional cash flow analysis
is less meaningful in evaluating our liquidity position thanthe liquidity and asset-liability management policies
described above. Cash flow analysis may, however, be
helpful in highlighting certain macro trends and strategic
initiatives in our businesses.
Six Months Ended June 2021. Our cash and cash
equivalents increased by $84.45 billion to $240.29 billion
at the end of the second quarter of 2021, due to net cash
provided by financing and operating activities, partially
offset by net cash used for investing activities. The net cash
provided by financing activities primarily reflected anincrease in net deposits, principally reflecting increases ininstitutional, transaction banking, consumer and deposit
sweep programs deposits, and net issuance of unsecured
long-term borrowings. The net cash provided by operating
activities primarily reflected net earnings, an increase in
trading liabilities and a decrease in trading assets, partially
offset by an increase in collateralized transactions (anincrease in collateralized agreements, partially offset by anincrease in collateralized financings). The net cash used forinvesting activities primarily reflected purchases ofinvestments and an increase in net lending activities,
partially offset by sales and paydowns of investments.
Six Months Ended June 2020. Our cash and cash
equivalents decreased by $947 million to $132.60 billion at
the end of the second quarter of 2020, due to net cash used
for operating activities and investing activities, partially
offset by net cash provided by financing activities. The net
cash used for operating activities primarily reflected anincrease in collateralized transactions (an increase incollateralized agreements and a decrease in collateralized
financings) and trading assets, partially offset by an increasein trading liabilities as a result of our activities and ourclients’ activities. The net cash used for investing activities
primarily reflected an increase in net purchases ofinvestments, reflecting an increase in U.S. government
obligations accounted for as available-for-sale. The net cash
provided by financing activities primarily reflected anincrease in net deposits, reflecting increases in consumer,transaction banking and private bank deposits.

Goldman Sachs June 2021 Form 10-Q 142

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Market Risk Management
Overview
Market risk is the risk of loss in the value of our inventory,
investments, loans and other financial assets and liabilities
accounted for at fair value due to changes in market
conditions. We hold such positions primarily for market
making for our clients and for our investing and financing
activities, and therefore, these positions change based onclient demands and our investment opportunities. Since
these positions are accounted for at fair value, theyfluctuate on a daily basis, with the related gains and losses
included in the consolidated statements of earnings. We
employ a variety of risk measures, each described in therespective sections below, to monitor market risk.
Categories of market risk include the following:‰ Interest rate risk: results from exposures to changes in thelevel, slope and curvature of yield curves, the volatilities
of interest rates, prepayment speeds and credit spreads;‰ Equity price risk: results from exposures to changes inprices and volatilities of individual equities, baskets ofequities and equity indices;‰ Currency rate risk: results from exposures to changes inspot prices, forward prices and volatilities of currency
rates; and‰ Commodity price risk: results from exposures to changes
in spot prices, forward prices and volatilities ofcommodities, such as crude oil, petroleum products,
natural gas, electricity, and precious and base metals.
Market Risk, which is independent of our revenueproducing units and reports to our chief risk officer, has
primary responsibility for assessing, monitoring andmanaging our market risk through firmwide oversightacross our global businesses.
Managers in revenue-producing units and Market Risk
discuss market information, positions and estimated loss
scenarios on an ongoing basis. Managers in revenueproducing units are accountable for managing risk withinprescribed limits. These managers have in-depth knowledgeof their positions, markets and the instruments available tohedge their exposures.
Market Risk Management Process
Our process for managing market risk includes the criticalcomponents of our risk management framework describedin the “Overview and Structure of Risk Management,” aswell as the following:‰ Monitoring compliance with established market risk
limits and reporting our exposures;‰ Diversifying exposures;

143 Goldman Sachs June 2021 Form 10-Q

‰ Controlling position sizes; and‰ Evaluating mitigants, such as economic hedges in related
securities or derivatives.
Our market risk management systems enable us to perform
an independent calculation of VaR and stress measures,
capture risk measures at individual position levels, attributerisk measures to individual risk factors of each position,
report many different views of the risk measures (e.g., bydesk, business, product type or entity) and produce ad hocanalyses in a timely manner.
Risk Measures
We produce risk measures and monitor them against
established market risk limits. These measures reflect anextensive range of scenarios and the results are aggregatedat product, business and firmwide levels.
We use a variety of risk measures to estimate the size of
potential losses for both moderate and more extreme
market moves over both short- and long-term time
horizons. Our primary risk measures are VaR, which isused for shorter-term periods, and stress tests. Our risk
reports detail key risks, drivers and changes for each deskand business, and are distributed daily to senior
management of both our revenue-producing units and our
independent risk oversight and control functions.
Value-at-Risk. VaR is the potential loss in value due toadverse market movements over a defined time horizon
with a specified confidence level. For assets and liabilities
included in VaR, see “Financial Statement Linkages toMarket Risk Measures.” We typically employ a one-day
time horizon with a 95% confidence level. We use a single
VaR model, which captures risks, including interest rates,
equity prices, currency rates and commodity prices. As
such, VaR facilitates comparison across portfolios ofdifferent risk characteristics. VaR also captures thediversification of aggregated risk at the firmwide level.
We are aware of the inherent limitations to VaR and
therefore use a variety of risk measures in our market risk
management process. Inherent limitations to VaR include:‰ VaR does not estimate potential losses over longer time
horizons where moves may be extreme;‰ VaR does not take account of the relative liquidity ofdifferent risk positions; and‰ Previous moves in market risk factors may not produce
accurate predictions of all future market moves.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
To comprehensively capture our exposures and relevantrisks in our VaR calculation, we use historical simulations
with full valuation of market factors at the position level bysimultaneously shocking the relevant market factors forthat position. These market factors include spot prices,credit spreads, funding spreads, yield curves, volatility andcorrelation, and are updated periodically based on changes
in the composition of positions, as well as variations inmarket conditions. We sample from five years of historical
data to generate the scenarios for our VaR calculation. The
historical data is weighted so that the relative importance ofthe data reduces over time. This gives greater importance tomore recent observations and reflects current asset
volatilities, which improves the accuracy of our estimates ofpotential loss. As a result, even if our positions included in
VaR were unchanged, our VaR would increase withincreasing market volatility and vice versa.
Given its reliance on historical data, VaR is most effective inestimating risk exposures in markets in which there are no
sudden fundamental changes or shifts in market conditions.
Our VaR measure does not include:‰ Positions that are best measured and monitored using
sensitivity measures; and‰ The impact of changes in counterparty and our own
credit spreads on derivatives, as well as changes in ourown credit spreads on financial liabilities for which thefair value option was elected.
We perform daily backtesting of our VaR model (i.e.,comparing daily net revenues for positions included in VaR
to the VaR measure calculated as of the prior business day)at the firmwide level and for each of our businesses andmajor regulated subsidiaries.
Stress Testing. Stress testing is a method of determining
the effect of various hypothetical stress scenarios. We use
stress testing to examine risks of specific portfolios, as wellas the potential impact of our significant risk exposures. We
use a variety of stress testing techniques to calculate thepotential loss from a wide range of market moves on our
portfolios, including firmwide stress tests, sensitivity
analysis and scenario analysis. The results of our various
stress tests are analyzed together for risk management
purposes. See “Overview and Structure of Risk
Management” for information about firmwide stress tests.
Sensitivity analysis is used to quantify the impact of amarket move in a single risk factor across all positions (e.g.,
equity prices or credit spreads) using a variety of definedmarket shocks, ranging from those that could be expected
over a one-day time horizon up to those that could takemany months to occur. We also use sensitivity analysis toquantify the impact of the default of any single entity,
which captures the risk of large or concentrated exposures.

Scenario analysis is used to quantify the impact of a
specified event, including how the event impacts multiple
risk factors simultaneously. For example, for sovereign
stress testing we calculate potential direct exposure
associated with our sovereign positions, as well as thecorresponding debt, equity and currency exposuresassociated with our non-sovereign positions that may be
impacted by the sovereign distress. When conducting
scenario analysis, we often consider a number of possible
outcomes for each scenario, ranging from moderate toseverely adverse market impacts. In addition, these stresstests are constructed using both historical events andforward-looking hypothetical scenarios.
Unlike VaR measures, which have an implied probability
because they are calculated at a specified confidence level,
there may not be an implied probability that our stresstesting scenarios will occur. Instead, stress testing is used tomodel both moderate and more extreme moves inunderlying market factors. When estimating potential loss,
we generally assume that our positions cannot be reducedor hedged (although experience demonstrates that we are
generally able to do so).
LimitsWe use market risk limits at various levels to manage thesize of our market exposures. These limits are set based on
VaR and on a range of stress tests relevant to our exposures.
See “Overview and Structure of Risk Management” for
information about the limit approval process.
Market Risk is responsible for monitoring these limits, andidentifying and escalating to senior management and/or theappropriate risk committee, on a timely basis, instanceswhere limits have been exceeded (e.g., due to positionalchanges or changes in market conditions, such as increased
volatilities or changes in correlations). Such instances are
remediated by a reduction in the positions we hold and/or atemporary or permanent increase to the limit.
Metrics
We analyze VaR at the firmwide level and a variety of moredetailed levels, including by risk category, business andregion. Diversification effect in the tables below represents
the difference between total VaR and the sum of the VaRs
for the four risk categories. This effect arises because thefour market risk categories are not perfectly correlated.
The table below presents our average daily VaR.
Three Months Ended

Six Months
Ended June

$ in millions

June
2021

March
2021

June
2020

2021

2020

Categories
Interest rates
Equity prices
Currency rates
Commodity prices
Diversification effect
Total

$ 64
48
13
22
(57)
$ 90

$ 58
51
12
22
(54)
$ 89

$ 98 $ 61
74
50
39
13
24
22
(113) (56)$ 122 $ 90

$ 79
58
28
18
(82)
$101

Goldman Sachs June 2021 Form 10-Q 144

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Our average daily VaR increased to $90 million for thethree months ended June 2021 from $89 million for thethree months ended March 2021, due to increased
exposures, partially offset by lower levels of volatility. The
total increase of $1 million was primarily driven by anincrease in the interest rates category, partially offset by adecrease in the equity prices category and an increase in thediversification effect.
Our average daily VaR decreased to $90 million for thethree months ended June 2021 from $122 million for thethree months ended June 2020, due to lower levels ofvolatility, partially offset by increased exposures. The total
decrease of $32 million was primarily driven by decreases
in the interest rates, equity prices and currency rates
categories, partially offset by a decrease in thediversification effect.
Our average daily VaR decreased to $90 million for the six
months ended June 2021 from $101 million for the six
months ended June 2020, due to lower levels of volatility,
partially offset by increased exposures. The total decreaseof $11 million was primarily driven by decreases in theinterest rates, currency rates and equity prices categories,
partially offset by a decrease in the diversification effect.
The table below presents our period-end VaR.

During the six months ended June 2021, the firmwide VaRrisk limit was not exceeded, raised or reduced, and there
were no permanent or temporary changes to the firmwide
VaR risk limit. During 2020, the firmwide VaR risk limit
was exceeded on 16 occasions (all of which occurred during
the first half of 2020), primarily due to higher levels ofvolatility. There were no permanent changes to thefirmwide VaR risk limit during this period. However, there
were temporary increases to the firmwide VaR risk limit asa result of the market environment in 2020.
The table below presents our high and low VaR.
Three Months Ended
June 2021

March 2021

June 2020$ in millions

High

Low

High

Low

High

Low

Categories
Interest rates
Equity prices
Currency rates
Commodity prices

$ 74
$ 57
$ 17
$ 32

$58
$37
$10
$15

$ 67
$ 71
$ 16
$ 34

$50
$40
$ 9
$14

$120
$116
$ 49
$ 54

$80
$46
$27
$15

FirmwideVaR$101$81 $105$74 $158$96

The chart below presents our daily VaR for the six months
ended June 2021.
210

As of

180

March
2021

June
2020

Categories
Interest rates
Equity prices
Currency rates
Commodity prices
Diversification effect
Total

$ 74
41
16
25
(61)
$ 95

$ 59
54
14
16
(59)
$ 84

$ 99
68
29
24
(101)
$ 119

Our period-end VaR increased to $95 million as ofJune 2021 from $84 million as of March 2021, due toincreased exposures, partially offset by lower levels ofvolatility. The total increase of $11 million was primarily
driven by increases in the interest rates and commodity
prices categories, partially offset by a decrease in the equity
prices category.
Our period-end VaR decreased to $95 million as ofJune 2021 from $119 million as of June 2020, due to lower
levels of volatility, partially offset by increased exposures.
The total decrease of $24 million was primarily driven by
decreases in the equity prices, interest rates and currency
rates categories, partially offset by a decrease in thediversification effect.

145 Goldman Sachs June 2021 Form 10-Q

150

Daily VaR(in millions)$ in millions

June
2021

120
90
60
30
0
First Quarter
2021

Second Quarter
2021

The table below presents, by number of business days, thefrequency distribution of our daily net revenues for
positions included in VaR.
Three Months
Ended June

Six Months
Ended June

$ in millions

2021

2020

2021

2020

>$100
$75 - $100
$50 - $75
$25 - $50
$0 - $25$(25) - $0$(50) - $(25)$(75) - $(50)$(100) - $(75)
Total

8
13
10
13
14
5
–
–
–
63

26
13
8
10
3
2
1
–
–
63

34
28
19
16
20
7
–
–
–
124

40
21
13
22
17
6
2
2
2
125

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Daily net revenues for positions included in VaR arecompared with VaR calculated as of the end of the priorbusiness day. Net losses incurred on a single day for such
positions did not exceed our 95% one-day VaR (i.e., a VaR
exception) during both the three months ended June 2021
and June 2020.
During periods in which we have significantly more positive
net revenue days than net revenue loss days, we expect tohave fewer VaR exceptions because, under normal
conditions, our business model generally produces positive
net revenues. In periods in which our franchise revenues areadversely affected, we generally have more loss days,
resulting in more VaR exceptions. The daily net revenues
for positions included in VaR used to determine VaR
exceptions reflect the impact of any intraday activity,
including bid/offer net revenues, which are more likely than
not to be positive by their nature.
Sensitivity Measures
Certain portfolios and individual positions are not includedin VaR because VaR is not the most appropriate risk
measure. Other sensitivity measures we use to analyze
market risk are described below.
10% Sensitivity Measures. The table below presents ourmarket risk by asset category for positions accounted for atfair value, that are not included in VaR.
As of
$ in millions

Equity
Debt
Total

June
2021

March
2021

June
2020

$2,096
2,429$4,525$1,831
2,486$4,317$1,723
2,316$4,039In the table above:‰ The market risk of these positions is determined byestimating the potential reduction in net revenues of a
10% decline in the value of these positions.
‰ Equity positions relate to private and restricted public equity
securities, including interests in funds that invest in corporate
equities and real estate and interests in hedge funds.
‰ Debt positions include interests in funds that invest in
corporate mezzanine and senior debt instruments, loans
backed by commercial and residential real estate,
corporate bank loans and other corporate debt, including
acquired portfolios of distressed loans.

Credit and Funding Spread Sensitivity on Derivatives
and Financial Liabilities. VaR excludes the impact ofchanges in counterparty credit spreads, our own credit
spreads and unsecured funding spreads on derivatives, aswell as changes in our own credit spreads (debt valuation
adjustment) on financial liabilities for which the fair value
option was elected. The estimated sensitivity to a one basis
point increase in credit spreads (counterparty and our own)
and unsecured funding spreads on derivatives (including
hedges) was a loss of $2 million as of both June 2021 andMarch 2021. In addition, the estimated sensitivity to a one
basis point increase in our own credit spreads on financial
liabilities for which the fair value option was elected was again of $31 million as of June 2021 and $28 million as ofMarch 2021. However, the actual net impact of a change inour own credit spreads is also affected by the liquidity,
duration and convexity (as the sensitivity is not linear tochanges in yields) of those financial liabilities for which thefair value option was elected, as well as the relative
performance of any hedges undertaken.
Interest Rate Sensitivity. Loans accounted for atamortized cost were $116.04 billion as of June 2021 and$104.60 billion as of March 2021, substantially all ofwhich had floating interest rates. The estimated sensitivity
to a 100 basis point increase in interest rates on such loans
was $826 million as of June 2021 and $808 million as ofMarch 2021 of additional interest income over a twelvemonth period, which does not take into account thepotential impact of an increase in costs to fund such loans.
See Note 9 to the consolidated financial statements forfurther information about loans accounted for at amortized
cost.
Other Market Risk Considerations
We make investments in securities that are accounted for as
available-for-sale, held-to-maturity or under the equity
method which are included in investments in the
consolidated balance sheets. See Note 8 to the consolidated
financial statements for further information.
Direct investments in real estate are accounted for at costless accumulated depreciation. See Note 12 to theconsolidated financial statements for further information
about other assets.

‰ Funded equity and debt positions are included in ourconsolidated balance sheets in investments and loans. See
Note 8 to the consolidated financial statements for further
information about investments and Note 9 to theconsolidated financial statements for further information
about loans.
‰ These measures do not reflect the diversification effect acrossasset categories or across other market risk measures.
Goldman Sachs June 2021 Form 10-Q 146

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Financial Statement Linkages to Market Risk
MeasuresWe employ a variety of risk measures, each described in therespective sections above, to monitor market risk across theconsolidated balance sheets and consolidated statements ofearnings. The related gains and losses on these positions areincluded in market making, other principal transactions,interest income and interest expense in the consolidated
statements of earnings, and debt valuation adjustment in
the consolidated statements of comprehensive income.
The table below presents certain assets and liabilities in ourconsolidated balance sheets and the market risk measuresused to assess those assets and liabilities.
Assets or Liabilities

Market Risk Measures

Collateralized agreements, at fair value

VaR

Customer and other receivables, at fair value

10% Sensitivity Measures

Trading assets

VaR
Credit Spread Sensitivity

Investments, at fair value

VaR
10% Sensitivity Measures

Loans

VaR
10% Sensitivity Measures
Interest Rate Sensitivity

Deposits, at fair value

VaR
Credit Spread Sensitivity

Collateralized financings, at fair value

VaR

Trading liabilities

VaR
Credit Spread Sensitivity

Unsecured borrowings, at fair value

VaR
Credit Spread Sensitivity

Credit Risk Management
Overview
Credit risk represents the potential for loss due to thedefault or deterioration in credit quality of a counterparty(e.g., an OTC derivatives counterparty or a borrower) or anissuer of securities or other instruments we hold. Our
exposure to credit risk comes mostly from clienttransactions in OTC derivatives and loans and lending
commitments. Credit risk also comes from cash placed withbanks, securities financing transactions (i.e., resale andrepurchase agreements and securities borrowing andlending activities) and customer and other receivables.

147 Goldman Sachs June 2021 Form 10-Q

Credit Risk, which is independent of our revenueproducing units and reports to our chief risk officer, has
primary responsibility for assessing, monitoring andmanaging our credit risk through firmwide oversight acrossour global businesses. In addition, we hold other positions
that give rise to credit risk (e.g., bonds and secondary bankloans). These credit risks are captured as a component ofmarket risk measures, which are monitored and managed
by Market Risk. We also enter into derivatives to manage
market risk exposures. Such derivatives also give rise tocredit risk, which is monitored and managed by Credit
Risk.
Credit Risk Management Process
Our process for managing credit risk includes the criticalcomponents of our risk management framework describedin the “Overview and Structure of Risk Management,” aswell as the following:‰ Monitoring compliance with established credit risk limits
and reporting our credit exposures and credit
concentrations;‰ Establishing or approving underwriting standards;‰ Assessing the likelihood that a counterparty will default
on its payment obligations;‰ Measuring our current and potential credit exposure andlosses resulting from a counterparty default;‰ Using credit risk mitigants, including collateral andhedging; and‰ Maximizing recovery through active workout andrestructuring of claims.
We also perform credit reviews, which include initial andongoing analyses of our counterparties. For substantially allof our credit exposures, the core of our process is an annual
counterparty credit review. A credit review is anindependent analysis of the capacity and willingness of acounterparty to meet its financial obligations, resulting in
an internal credit rating. The determination of internal
credit ratings also incorporates assumptions with respect tothe nature of and outlook for the counterparty’s industry,
and the economic environment. Senior personnel, withexpertise in specific industries, inspect and approve credit
reviews and internal credit ratings.
Our risk assessment process may also include, whereapplicable, reviewing certain key metrics, including, but notlimited to, delinquency status, collateral values, FICO
credit scores and other risk factors.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Our credit risk management systems capture credit
exposure to individual counterparties and on an aggregate
basis to counterparties and their subsidiaries. These systems
also provide management with comprehensive information
about our aggregate credit risk by product, internal credit
rating, industry, country and region.
Risk Measures
We measure our credit risk based on the potential loss in theevent of non-payment by a counterparty using current andpotential exposure. For derivatives and securities financing
transactions, current exposure represents the amountpresently owed to us after taking into account applicablenetting and collateral arrangements, while potential
exposure represents our estimate of the future exposurethat could arise over the life of a transaction based onmarket movements within a specified confidence level.
Potential exposure also takes into account netting andcollateral arrangements. For loans and lending
commitments, the primary measure is a function of thenotional amount of the position.
Stress Tests
We conduct regular stress tests to calculate the credit
exposures, including potential concentrations that would
result from applying shocks to counterparty credit ratingsor credit risk factors (e.g., currency rates, interest rates,
equity prices). These shocks cover a wide range of moderate
and more extreme market movements, including shocks tomultiple risk factors, consistent with the occurrence of asevere market or economic event. In the case of sovereigndefault, we estimate the direct impact of the default on oursovereign credit exposures, changes to our credit exposuresarising from potential market moves in response to thedefault, and the impact of credit market deterioration on
corporate borrowers and counterparties that may result
from the sovereign default. Unlike potential exposure,which is calculated within a specified confidence level,stress testing does not generally assume a probability ofthese events occurring. We also perform firmwide stresstests. See “Overview and Structure of Risk Management”
for information about firmwide stress tests.
To supplement these regular stress tests, as described above,
we also conduct tailored stress tests on an ad hoc basis in
response to specific market events that we deem significant.
We also utilize these stress tests to estimate the indirect
impact of certain hypothetical events on our country
exposures, such as the impact of credit market deteriorationon corporate borrowers and counterparties along with theshocks to the risk factors described above. The parametersof these shocks vary based on the scenario reflected in eachstress test. We review estimated losses produced by thestress tests in order to understand their magnitude,highlight potential loss concentrations, and assess andmitigate our exposures where necessary.

LimitsWe use credit risk limits at various levels, as well as
underwriting standards to manage the size and nature of
our credit exposures. Limits for industries and countries are
based on our risk appetite and are designed to allow for
regular monitoring, review, escalation and management ofcredit risk concentrations. See “Overview and Structure of
Risk Management” for information about the limit
approval process.
Credit Risk is responsible for monitoring these limits, andidentifying and escalating to senior management and/or theappropriate risk committee, on a timely basis, instanceswhere limits have been exceeded.
Risk Mitigants
To reduce our credit exposures on derivatives and securities
financing transactions, we may enter into netting
agreements with counterparties that permit us to offset
receivables and payables with such counterparties. We may
also reduce credit risk with counterparties by entering into
agreements that enable us to obtain collateral from them onan upfront or contingent basis and/or to terminatetransactions if the counterparty’s credit rating falls below a
specified level. We monitor the fair value of the collateral toensure that our credit exposures are appropriately
collateralized. We seek to minimize exposures where there
is a significant positive correlation between thecreditworthiness of our counterparties and the market
value of collateral we receive.
For loans and lending commitments, depending on thecredit quality of the borrower and other characteristics ofthe transaction, we employ a variety of potential risk
mitigants. Risk mitigants include collateral provisions,guarantees, covenants, structural seniority of the bank loan
claims and, for certain lending commitments, provisions in
the legal documentation that allow us to adjust loan
amounts, pricing, structure and other terms as market
conditions change. The type and structure of risk mitigants
employed can significantly influence the degree of credit
risk involved in a loan or lending commitment.
When we do not have sufficient visibility into a
counterparty’s financial strength or when we believe a
counterparty requires support from its parent, we may
obtain third-party guarantees of the counterparty’s
obligations. We may also mitigate our credit risk using
credit derivatives or participation agreements.

Goldman Sachs June 2021 Form 10-Q 148

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Credit Exposures
As of June 2021, our aggregate credit exposure increased ascompared with December 2020, primarily reflecting
increases in cash deposits with central banks and loans andlending commitments. The percentage of our credit
exposuresarisingfrom
non-investment-grade
counterparties (based on our internally determined public
rating agency equivalents) decreased as compared with
December 2020, primarily reflecting an increase ininvestment-grade credit exposure related to cash deposits
with central banks. Our credit exposure to counterparties
that defaulted during the six months ended June 2021 waslower as compared with our credit exposure tocounterparties that defaulted during the same prior year
period, and such exposure was primarily related to loans
and lending commitments. Our credit exposure tocounterparties that defaulted during the six months ended
June 2021 remained low, representing less than 1% of our
total credit exposure. Estimated losses associated with thesedefaults have been recognized in earnings. Our credit
exposures are described further below.

OTC Derivatives. Our credit exposure on OTC derivatives
arises primarily from our market-making activities. As amarket maker, we enter into derivative transactions toprovide liquidity to clients and to facilitate the transfer andhedging of their risks. We also enter into derivatives tomanage market risk exposures. We manage our credit
exposure on OTC derivatives using the credit risk process,measures, limits and risk mitigants described above.
We generally enter into OTC derivatives transactions underbilateral collateral arrangements that require the daily
exchange of collateral. As credit risk is an essential
component of fair value, we include a credit valuation
adjustment (CVA) in the fair value of derivatives to reflect
counterparty credit risk, as described in Note 7 to theconsolidated financial statements. CVA is a function of thepresent value of expected exposure, the probability ofcounterparty default and the assumed recovery upon default.
The table below presents our net credit exposure from OTC
derivatives and the concentration by industry and region.
As ofCash and Cash Equivalents. Our credit exposure on cash
and cash equivalents arises from our unrestricted cash, andincludes both interest-bearing and non-interest-bearing
deposits. To mitigate the risk of credit loss, we placesubstantially all of our deposits with highly rated banks andcentral banks.
The table below presents our credit exposure fromunrestricted cash and cash equivalents, and theconcentration by industry, region and internally determinedpublic rating agency equivalents.
As of
June
2021

December
2020$216,907$131,324

Industry
Financial Institutions
Sovereign
Total

6%
94%
100%

11%
89%
100%

RegionAmericas
EMEA
Asia
Total

64%
28%
8%
100%

45%
41%
14%
100%

Credit Quality (Credit Rating Equivalent)
AAA
AA
A
BBB
Total

69%
21%
9%
1%
100%

44%
38%
17%
1%
100%

$ in millions

Cash and Cash Equivalents

The table above excludes cash segregated for regulatory
and other purposes of $23.38 billion as of June 2021 and$24.52 billion as of December 2020.
149 Goldman Sachs June 2021 Form 10-Q

June
2021

December2020$ 60,594(17,207)$ 43,387$ 64,850(18,990)$ 45,860

Industry
Consumer & Retail
Diversified Industrials
Financial Institutions
Funds
Healthcare
Municipalities & Nonprofit
Natural Resources & Utilities
Sovereign
Technology, Media & Telecommunications
Other (including Special Purpose Vehicles)
Total

3%
15%
12%
16%
1%
5%
22%
9%
11%
6%
100%

4%
23%
12%
12%
2%
6%
11%
14%
12%
4%
100%

RegionAmericas
EMEA
Asia
Total

59%
32%
9%
100%

62%
30%
8%
100%

$ in millions

OTC derivative assets
Collateral (not netted under U.S. GAAP)Net credit exposure

In the table above:‰ OTC derivative assets, included in the consolidatedbalance sheets, are reported on a net-by-counterparty basis(i.e., the net receivable for a given counterparty) when alegal right of setoff exists under an enforceable netting
agreement (counterparty netting) and are accounted for atfair value, net of cash collateral received under enforceablecredit support agreements (cash collateral netting).
‰ Collateral represents cash collateral and the fair value of
securities collateral, primarily U.S. and non-U.S.
government and agency obligations, received under credit
support agreements, that we consider when determining
credit risk, but such collateral is not eligible for netting
under U.S. GAAP.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
The table below presents the distribution of our net credit
exposure from OTC derivatives by tenor.
$ in millions

InvestmentGrade

Non-InvestmentGrade / Unrated

Total$ 23,629
19,284
66,299109,212(87,561)$ 21,651$ 9,557
15,555
6,811
31,923(10,187)$ 21,736$ 33,186
34,83973,110141,135(97,748)$ 43,387

As of June 2021
Less than 1 year
1 - 5 years
Greater than 5 years
Total
Netting
Net credit exposure

The table below presents our loans and lending
commitments.

$ in millions

As of December 2020
Less than 1 year
1 - 5 years
Greater than 5 years
Total
Netting
Net credit exposure$ 22,332
23,92777,653
123,912(101,691)$ 22,221$ 12,507
16,486
8,958
37,951(14,312)$ 23,639$ 34,839
40,41386,611
161,863(116,003)$ 45,860

In the table above:‰ Tenor is based on remaining contractual maturity.
‰ Netting includes counterparty netting across tenor
categories and collateral that we consider when determining
credit risk (including collateral that is not eligible for netting
under U.S. GAAP). Counterparty netting within the sametenor category is included within such tenor category.
The tables below present the distribution of our net credit
exposure from OTC derivatives by tenor and internallydetermined public rating agency equivalents.
Investment-Grade$ in millions

AAA

AA

A

BBB

Total

As of June 2021
Less than 1 year
1 - 5 years
Greater than 5 years
Total
Netting
Net credit exposure

Lending Activities. We manage our lending activities
using the credit risk process, measures, limits and risk
mitigants described above. Other lending positions,
including secondary trading positions, are risk-managed as
a component of market risk.

As of June 2021
Corporate
Wealth management
Commercial real estate
Residential real estateConsumer:
Installment
Credit cards
Other
Total, grossAllowance for loan losses
Total
As of December 2020
Corporate
Wealth management
Commercial real estate
Residential real estateConsumer:
Installment
Credit cards
Other
Total, grossAllowance for loan losses
Total

Loans

Lending
Commitments

Total$ 47,814
39,955
19,468
12,218$164,732
3,440
5,133
2,605

$212,546
43,39524,601
14,823

3,257
5,210
5,886
133,808(3,271)$130,537

8
28,5295,564
210,011(822)$209,189

3,265
33,73911,450343,819(4,093)$339,726$ 48,659
33,023
20,2905,750$135,818
3,103
4,268
1,900

$184,477
36,12624,558
7,650

3,823
4,270
4,174
119,989(3,874)$116,115

4
21,640
4,842
171,575(557)$171,018

3,827
25,9109,016
291,564(4,431)$287,133$

850 $ 5,073 $ 10,369 $ 7,337 $ 23,629
1,045
3,143
8,846
6,250
19,284
13,392
5,976 24,392 22,539
66,29915,287 14,192 43,607 36,126 109,212(12,936) (10,368) (36,466) (27,791) (87,561)$ 2,351 $ 3,824 $ 7,141 $ 8,335 $ 21,651

As of December 2020
Less than 1 year
1 - 5 years
Greater than 5 years
Total
Netting
Net credit exposure$

532 $ 4,146 $ 11,440 $ 6,214 $ 22,332
1,069
4,189 10,976
7,693
23,927
16,5507,403 28,410 25,290
77,65318,151 15,738 50,826 39,197 123,912(14,364) (11,230) (44,529) (31,568) (101,691)$ 3,787 $ 4,508 $ 6,297 $ 7,629 $ 22,221
Non-Investment-Grade /Unrated$ in millions

BB or lower

Unrated

Total

As of June 2021
Less than 1 year
1 - 5 years
Greater than 5 years
Total
Netting
Net credit exposure$ 8,842 $715 $ 9,557
15,361
194
15,555
6,675
136
6,811
30,8781,045
31,923(10,110)(77) (10,187)$ 20,768 $968 $ 21,736

As of December 2020
Less than 1 year
1 - 5 years
Greater than 5 years
Total
Netting
Net credit exposure$ 11,541 $966 $ 12,507
16,274212
16,486
8,844
114
8,958
36,6591,292
37,951(14,114)(198) (14,312)$ 22,545 $ 1,094 $ 23,639

Goldman Sachs June 2021 Form 10-Q 150

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Corporate. Corporate loans and lending commitments
include term loans, revolving lines of credit, letter of credit
facilities and bridge loans, and are principally used for
operating and general corporate purposes, or in connection
with acquisitions. Corporate loans may be secured or
unsecured, depending on the loan purpose, the risk profileof the borrower and other factors.
The table below presents our credit exposure from
corporate loans and lending commitments, and theconcentration by industry, region, internally determinedpublic rating agency equivalents and other credit metrics.
$ in millions

Lending
Loans Commitments

Total

As of June 2021
Corporate$47,814$164,732 $212,546

In the table above, credit exposure excludes $3.20 billion asof both June 2021 and December 2020 relating to issued
letters of credit which are classified as guarantees in ourconsolidated financial statements. See Note 18 to theconsolidated financial statements for further information
about guarantees.
Wealth Management. Wealth management loans andlending commitments are extended to private bank clients,
including wealth management and other clients. Theseloans are used to finance investments in both financial andnonfinancial assets, bridge cash flow timing gaps or provide
liquidity for other needs. Substantially all of such loans are
secured by securities, residential real estate, commercial realestate or other assets.
The table below presents our credit exposure from wealthmanagement loans and lending commitments, and theconcentration by region, internally determined public
rating agency equivalents and other credit metrics.

Industry
Consumer & Retail
Diversified Industrials
Financial Institutions
Funds
Healthcare
Natural Resources & Utilities
Real EstateTechnology, Media & Telecommunications
Other (including Special Purpose Vehicles)
Total

7%
16%
6%
18%
7%
10%
6%
19%
11%
100%

11%
22%
7%
3%
11%
15%
5%
22%
4%
100%

10%
21%
7%
7%
10%
14%
5%
21%
5%
100%

RegionAmericas
EMEA
Asia
Total

57%
33%
10%
100%

74%
24%
2%
100%

70%
26%
4%
100%

Credit Quality (Credit Rating Equivalent)
AAA
–
AA
1%
A
6%
BBB
17%
BB or lower
75%
Other metrics/unrated
1%
Total
100%

RegionAmericas
EMEA
Asia
Total

1%
4%
15%
37%
42%
1%
100%

1%
3%
13%
32%
50%
1%
100%

As of December 2020
Corporate$48,659$135,818 $184,477

Industry
Consumer & Retail
Diversified Industrials
Financial Institutions
Funds
Healthcare
Natural Resources & Utilities
Real EstateTechnology, Media & Telecommunications
Other (including Special Purpose Vehicles)
Total

7%
17%
10%
13%
7%
12%
8%
17%
9%
100%

14%
17%
6%
3%
12%
18%
6%
19%
5%
100%

12%
17%
7%
6%
11%
16%
6%
19%
6%
100%

RegionAmericas
EMEA
Asia
Total

60%
31%
9%
100%

70%
28%
2%
100%

67%
29%
4%
100%

Credit Quality (Credit Rating Equivalent)
AAA
–
AA
–
A
6%
BBB
13%
BB or lower
80%
Other metrics/unrated
1%
Total
100%

1%
5%
19%
36%
38%
1%
100%

1%
4%
15%
30%
49%
1%
100%

151 Goldman Sachs June 2021 Form 10-Q

Loans

Lending
Commitments

Total$39,955$3,440$43,395

86%
11%
3%
100%

97%
3%
–
100%

87%
10%
3%
100%

Credit Quality (Credit Rating Equivalent)
Investment-grade70%
Non-investment-grade
14%
Other metrics/unrated
16%
Total
100%

57%
20%
23%
100%

70%
14%
16%
100%

As of December 2020
Wealth Management$33,023$3,103$36,126

88%
10%
2%
100%

99%
1%
–
100%

89%
9%
2%
100%

58%
21%
21%
100%

66%
17%
17%
100%

$ in millions

As of June 2021
Wealth Management

RegionAmericas
EMEA
Asia
Total

Credit Quality (Credit Rating Equivalent)
Investment-grade67%
Non-investment-grade
16%
Other metrics/unrated
17%
Total
100%

In the table above, other metrics/unrated loans primarily
include loans backed by residential real estate. Our risk
assessment process for such loans include reviewing certain
key metrics, such as loan-to-value ratio and delinquency
status.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Commercial Real Estate. Commercial real estate loans
and lending commitments include originated loans andlending commitments (other than those extended to privatebank clients) that are directly or indirectly secured byhotels, retail stores, multifamily housing complexes andcommercial and industrial properties. Commercial realestate loans and lending commitments also includes loans
and lending commitments extended to clients who
warehouse assets that are directly or indirectly backed bycommercial real estate. In addition, commercial real estateincludes loans purchased by us.

Residential Real Estate. Residential real estate loans andlending commitments are extended to clients (other thanthose extended to private bank clients) who warehouseassets that are directly or indirectly secured by residential
real estate and also includes loans purchased by us.

The table below presents our credit exposure fromcommercial real estate loans and lending commitments, andthe concentration by region, internally determined public
rating agency equivalents and other credit metrics.

$ in millions

Loans

Lending
Commitments

Total$19,468$5,133$24,601

70%
22%
8%
100%

76%
10%
14%
100%

72%
19%
9%
100%

Credit Quality (Credit Rating Equivalent)
Investment-grade
9%
Non-investment-grade
87%
Other metrics/unrated
4%
Total
100%

17%
83%
–
100%

10%
86%
4%
100%

As of December 2020
Commercial Real Estate$20,290$4,268$24,558

71%
19%
10%
100%

65%
10%
25%
100%

70%
18%
12%
100%

13%
87%
–
100%

10%
86%
4%
100%

$ in millions

As of June 2021
Commercial Real Estate
RegionAmericas
EMEA
Asia
Total

RegionAmericas
EMEA
Asia
Total

Credit Quality (Credit Rating Equivalent)
Investment-grade
9%
Non-investment-grade
86%
Other metrics/unrated
5%
Total
100%

In the table above, credit exposure includes loans andlending commitments of $7.52 billion as of June 2021 and$7.88 billion as of December 2020 which are extended toclients who warehouse assets that are directly or indirectly
backed by commercial real estate.
In addition, we also have credit exposure to certain
commercial real estate loans held for securitization of$569 million as of June 2021 and $503 million as ofDecember 2020. Such loans are included in trading assets in
our consolidated balance sheets.

The table below presents our credit exposure fromresidential real estate loans and lending commitments, andthe concentration by region, internally determined public
rating agency equivalents and other credit metrics.

Loans

Lending
Commitments

Total$12,218$2,605$14,823

90%
8%
2%
100%

89%
11%
–
100%

90%
8%
2%
100%

Credit Quality (Credit Rating Equivalent)
Investment-grade6%
Non-investment-grade
84%
Other metrics/unrated
10%
Total
100%

11%
86%
3%
100%

7%
84%
9%
100%

As of December 2020
Residential Real Estate$ 5,750$1,900$ 7,650

88%
9%
3%
100%

98%
2%
–
100%

91%
7%
2%
100%

2%
93%
5%
100%

9%
73%
18%
100%

As of June 2021
Residential Real Estate
RegionAmericas
EMEA
Asia
Total

RegionAmericas
EMEA
Asia
Total

Credit Quality (Credit Rating Equivalent)
Investment-grade11%
Non-investment-grade
67%
Other metrics/unrated
22%
Total
100%

In the table above:‰ Credit exposure includes loans and lending commitments
of $12.71 billion as of June 2021 and $5.71 billion as ofDecember 2020 which are extended to clients who
warehouse assets that are directly or indirectly secured byresidential real estate.
‰ Other metrics/unrated primarily includes loans purchasedby us. Our risk assessment process for such loans includes
reviewing certain key metrics, such as loan-to-value ratio,delinquency status, collateral values, expected cash flows
and other risk factors.
In addition, we also have exposure to residential real estateloans held for securitization of $6.69 billion as of June 2021
and $5.57 billion as of December 2020. Such loans areincluded in trading assets in our consolidated balance
sheets.

Goldman Sachs June 2021 Form 10-Q 152

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Installment and Credit Card Lending. We originate
unsecured installment loans and credit card loans (pursuant
to revolving lines of credit) to consumers in the Americas.
The credit card lines are cancellable by us and therefore do
not result in credit exposure.
The table below presents our credit exposure fromoriginated installment and credit card funded loans, and theconcentration by the five most concentrated U.S. states.
As of$ in millions

June
2021

December
2020

Installment$3,257$3,823

California
Texas
New York
FloridaIllinois
Other
Total

11%
9%
7%
7%
4%
62%
100%

11%
9%
7%
7%
4%
62%
100%

Credit Cards$5,210$4,270

California
Texas
New York
FloridaIllinois
Other
Total

19%
9%
8%
8%
4%
52%
100%

19%
9%
8%
8%
4%
52%
100%

See Note 9 to the consolidated financial statements forfurther information about the credit quality indicators of
installment and credit card loans.
Other. Other loans and lending commitments are extended
to clients who warehouse assets that are directly or
indirectly secured by consumer loans, including auto loans
and private student loans, and other assets. Other loans
also includes unsecured consumer and credit card loans
purchased by us.

The table below presents our credit exposure from otherloans and lending commitments, and the concentration byregion, internally determined public rating agency
equivalents and other credit metrics.

$ in millions

Lending
Loans Commitments

Total

As of June 2021
Other

$5,886$5,564 $11,450

RegionAmericas
EMEA
Asia
Total

85%
13%
2%
100%

91%
6%
3%
100%

88%
10%
2%
100%

Credit Quality (Credit Rating Equivalent)
Investment-grade
32%
Non-investment-grade
41%
Other metrics/unrated
27%
Total
100%

86%
14%
–
100%

58%
28%
14%
100%

As of December 2020
Other

$4,174$4,842 $ 9,016

RegionAmericas
EMEA
Asia
Total

81%
17%
2%
100%

98%
–
2%
100%

90%
8%
2%
100%

Credit Quality (Credit Rating Equivalent)
Investment-grade
44%
Non-investment-grade
23%
Other metrics/unrated
33%
Total
100%

94%
6%
–
100%

71%
14%
15%
100%

In the table above:‰ Credit exposure includes loans and lending commitments
extended to clients who warehouse assets of $9.17 billion
as of June 2021 and $7.28 billion as of December 2020.
‰ Other metrics/unrated primarily includes consumer andcredit card loans purchased by us. Our risk assessment
process for such loans includes reviewing certain key
metrics, such as expected cash flows, delinquency status
and other risk factors.
In addition, we also have exposure to other loans held for
securitization of $610 million as of June 2021 and$420 million as of December 2020. Such loans are included
in trading assets in our consolidated balance sheets.
Credit Hedges
To mitigate the credit risk associated with our lending
activities, we obtain credit protection on certain loans andlending commitments through credit default swaps, both
single-name and index-based contracts, and through theissuance of credit-linked notes. In addition, Sumitomo
Mitsui Financial Group, Inc. provides us with credit loss
protection on certain approved loan commitments.

153 Goldman Sachs June 2021 Form 10-Q

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Securities Financing Transactions. We enter into
securities financing transactions in order to, among otherthings, facilitate client activities, invest excess cash, acquire
securities to cover short positions and finance certain
activities. We bear credit risk related to resale agreements
and securities borrowed only to the extent that cash
advanced or the value of securities pledged or delivered tothe counterparty exceeds the value of the collateral
received. We also have credit exposure on repurchaseagreements and securities loaned to the extent that thevalue of securities pledged or delivered to the counterparty
for these transactions exceeds the amount of cash orcollateral received. Securities collateral for thesetransactions primarily includes U.S. and non-U.S.
government and agency obligations.

Other Credit Exposures. We are exposed to credit risk
from our receivables from brokers, dealers and clearingorganizations and customers and counterparties.
Receivables from brokers, dealers and clearingorganizations primarily consist of initial margin placedwith clearing organizations and receivables related to salesof securities which have traded, but not yet settled. These
receivables generally have minimal credit risk due to thelow probability of clearing organization default and theshort-term nature of receivables related to securities
settlements. Receivables from customers and counterparties
generally consist of collateralized receivables related tocustomer securities transactions and generally haveminimal credit risk due to both the value of the collateral
received and the short-term nature of these receivables.

The table below presents our credit exposure fromsecurities financing transactions and the concentration byindustry, region and internally determined public rating
agency equivalents.

The table below presents our other credit exposures and theconcentration by industry, region and internally determinedpublic rating agency equivalents.
As of

As of
June
2021

December2020$36,061$30,190

Industry
Financial Institutions
Funds
Municipalities & Nonprofit
Sovereign
Other (including Special Purpose Vehicles)
Total

40%
29%
5%
24%
2%
100%

39%
24%
5%
30%
2%
100%

RegionAmericas
EMEA
Asia
Total

34%
47%
19%
100%

33%
46%
21%
100%

Credit Quality (Credit Rating Equivalent)
AAA
AA
A
BBB
BB or lower
Unrated
Total

11%
27%
38%
13%
9%
2%
100%

15%
28%
40%
10%
5%
2%
100%

$ in millions

Securities Financing Transactions

The table above reflects both netting agreements andcollateral that we consider when determining credit risk.

June
2021

December
2020$49,695$56,429

Industry
Financial Institutions
Funds
Other (including Special Purpose Vehicles)
Total

83%
11%
6%
100%

85%
9%
6%
100%

RegionAmericas
EMEA
Asia
Total

54%
35%
11%
100%

54%
35%
11%
100%

Credit Quality (Credit Rating Equivalent)
AAA
AA
A
BBB
BB or lower
Unrated
Total

6%
46%
25%
6%
16%
1%
100%

5%
48%
27%
8%
11%
1%
100%

$ in millions

Other Credit Exposures

The table above reflects collateral that we consider when
determining credit risk.
Selected Exposures
We have credit and market exposures, as described below,that have had heightened focus given recent events andbroad market concerns. Credit exposure represents thepotential for loss due to the default or deterioration incredit quality of a counterparty or borrower. Market
exposure represents the potential for loss in value of ourlong and short positions due to changes in market prices.

Goldman Sachs June 2021 Form 10-Q 154

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Country Exposures. High external funding needs andinconsistent monetary policy have led to significant
depreciation of the Turkish Lira prompting concerns about
foreign exchange reserves and economic instability. As ofJune 2021, our total credit exposure to Turkey was$2.30 billion, which was to non-sovereign counterparties orborrowers. Such exposure consisted of $1.52 billion related
to OTC derivatives, $174 million related to loans andlending commitments and $602 million related to secured
receivables. After taking into consideration the benefit ofhedges and Turkish corporate and sovereign collateral, andother risk mitigants provided by Turkish counterparties,
our net credit exposure was $388 million. In addition, ourtotal market exposure to Turkey as of June 2021 was$138 million, primarily to non-sovereign issuers or
underliers. Such exposure consisted of $314 million related
to debt, $(183) million related to credit derivatives and$7 million related to equities.
Liquidity pressures prompted the Argentine government todefault and restructure local and foreign obligations in
2020. Economic challenges persist and the country stillneeds to secure new financial terms with the IMF. As ofJune 2021, our total credit exposure to Argentina was$133 million, which was to non-sovereign counterparties orborrowers, and was primarily related to loans and lending
commitments. In addition, our total market exposure toArgentina as of June 2021 was $110 million, primarily tonon-sovereign issuers or underliers. Such exposure
consisted of $65 million related to debt, $(2) million related
to credit derivatives and $47 million related to equities.
The restructuring of Lebanon’s sovereign debt and sharp
currency depreciation have led to concerns about its
financial and political stability. As of June 2021, our total
credit and market exposure to Lebanon was not material.
Zambia’s sovereign debt default and ongoing liquidity
pressures aggravated by the COVID-19 pandemic have led
to concerns about Zambia’s financial stability. As ofJune 2021, our total credit and market exposure to Zambia
was not material.
Venezuela has delayed payments on its sovereign debt andits political situation remains unclear. As of June 2021, ourtotal credit and market exposure to Venezuela was notmaterial.

155 Goldman Sachs June 2021 Form 10-Q

We have a comprehensive framework to monitor, measure
and assess our country exposures and to determine our risk
appetite. We determine the country of risk by the locationof the counterparty, issuer or underlier’s assets, where theygenerate revenue, the country in which they areheadquartered, the jurisdiction where a claim against them
could be enforced, and/or the government whose policies
affect their ability to repay their obligations. We monitor
our credit exposure to a specific country both at theindividual counterparty level, as well as at the aggregate
country level. See “Stress Tests” for information about
stress tests that are designed to estimate the direct andindirect impact of events involving the above countries.
Industry Exposures. The sharp decline in economic
activity as a result of the COVID-19 pandemic has resulted
in a significant impact to the gaming and lodging industry.
As of June 2021, our credit exposure to gaming and lodging
companies (including hotel owners and operators) related
to loans and lending commitments was $2.63 billion($541 million of loans and $2.09 billion of lending
commitments). Such exposure included $2.59 billion of
exposuretonon-investment-grade
counterparties($541 million related to loans and $2.05 billion related tolending commitments), of which 72% was secured. In
addition, we extend loans that are secured by hotel
properties. As of June 2021, our exposure related to suchloans and lending commitments was $1.46 billion and was
to non-investment-grade counterparties. In addition, we
have exposure to our clients in the gaming and lodging
industry arising from derivatives. As of June 2021, ourcredit exposure related to derivatives and receivables togaming and lodging companies was $175 million, which
was to non-investment-grade counterparties. After taking
into consideration the benefit of $80 million of hedges, ournet credit exposure was $2.73 billion. As of June 2021, ourmarket exposure related to gaming and lodging companies
was $4 million, which was primarily to non-investmentgrade issuers or underliers. Such exposure consisted of$32 million related to debt, $(335) million related to credit
derivatives and $307 million related to equities.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Concerns surrounding the COVID-19 pandemic haveresulted in a sharp decline in travel which has significantly
impacted the airline industry. As of June 2021, our credit
exposure to airline companies related to loans and lending
commitments was $1.50 billion ($586 million of loans and$915 million of lending commitments) to non-investmentgrade counterparties, of which 92% was secured. In
addition, we have exposure to our clients in the airline
industry arising from derivatives. As of June 2021, ourcredit exposure related to derivatives and receivables toairline companies was $146 million ($112 million toinvestment-grade counterparties and $34 million to
non-investment-grade counterparties). After taking into
consideration the benefit of $274 million of hedges, our net
credit exposure was $1.37 billion. As of June 2021, ourmarket exposure related to airline companies was$46 million, which was substantially all to non-investmentgrade issuers or underliers. Such exposure consisted of$276 million related to debt, $(163) million related to credit
derivatives and $(67) million related to equities.

Operational Risk Management Process
Our process for managing operational risk includes thecritical components of our risk management frameworkdescribed in the “Overview and Structure of Risk
Management,” including a comprehensive data collection
process, as well as firmwide policies and procedures, for
operational risk events.

Operational Risk Management

Our operational risk management framework is in part
designed to comply with the operational risk measurement
rules under the Capital Framework and has evolved basedon the changing needs of our businesses and regulatory
guidance.

Overview
Operational risk is the risk of an adverse outcome resulting
from inadequate or failed internal processes, people,
systems or from external events. Our exposure tooperational risk arises from routine processing errors, aswell as extraordinary incidents, such as major systems
failures or legal and regulatory matters.
Potential types of loss events related to internal and external
operational risk include:‰ Clients, products and business practices;‰ Execution, delivery and process management;‰ Business disruption and system failures;‰ Employment practices and workplace safety;‰ Damage to physical assets;‰ Internal fraud; and‰ External fraud.
Operational Risk, which is independent of our revenueproducing units and reports to our chief risk officer, has
primary responsibility for developing and implementing aformalized framework for assessing, monitoring andmanaging operational risk with the goal of maintaining our
exposure to operational risk at levels that are within ourrisk appetite.

We combine top-down and bottom-up approaches tomanage and measure operational risk. From a top-down
perspective, our senior management assesses firmwide andbusiness-level operational risk profiles. From a bottom-up
perspective, our first and second lines of defense areresponsible for risk identification and risk management on
a day-to-day basis, including escalating operational risks tosenior management.
We maintain a comprehensive control framework designed
to provide a well-controlled environment to minimize
operational risks. The Firmwide Operational Risk andResilience Committee is responsible for overseeing
operational risk, and for ensuring our business andoperational resilience.

We have established policies that require all employees toreport and escalate operational risk events. When
operational risk events are identified, our policies requirethat the events be documented and analyzed to determine
whether changes are required in our systems and/or
processes to further mitigate the risk of future events.
We use operational risk management applications tocapture and organize operational risk event data and key
metrics. One of our key risk identification and assessment
tools is an operational risk and control self-assessment
process, which is performed by our managers. This process
consists of the identification and rating of operational risks,
on a forward-looking basis, and the related controls. The
results from this process are analyzed to evaluate
operational risk exposures and identify businesses,
activities or products with heightened levels of operationalrisk.

Goldman Sachs June 2021 Form 10-Q 156

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Risk Measurement
We measure our operational risk exposure using both
statistical modeling and scenario analyses, which involve
qualitative and quantitative assessments of internal andexternal operational risk event data and internal control
factors for each of our businesses. Operational risk
measurement also incorporates an assessment of businessenvironment factors, including:‰ Evaluations of the complexity of our business activities;‰ The degree of automation in our processes;‰ New activity information;‰ The legal and regulatory environment; and‰ Changes in the markets for our products and services,
including the diversity and sophistication of ourcustomers and counterparties.
The results from these scenario analyses are used tomonitor changes in operational risk and to determine
business lines that may have heightened exposure tooperational risk. These analyses are used in thedetermination of the appropriate level of operational risk
capital to hold. We also perform firmwide stress tests. See“Overview and Structure of Risk Management” for
information about firmwide stress tests.
Types of Operational Risks
Increased reliance on technology and third-party
relationships has resulted in increased operational risks,such as information and cyber security risk, third-party risk
and business resilience risk. We manage those risks asfollows:
Information and Cyber Security Risk. Information andcyber security risk is the risk of compromising theconfidentiality, integrity or availability of our data andsystems, leading to an adverse impact to us, our reputation,
our clients and/or the broader financial system. We seek tominimize the occurrence and impact of unauthorizedaccess, disruption or use of information and/or information
systems. We deploy and operate preventive and detective
controls and processes to mitigate emerging and evolving
information security and cyber security threats, including
monitoring our network for known vulnerabilities andsigns of unauthorized attempts to access our data andsystems. There is increased information risk throughdiversification of our data across external service providers,
including use of a variety of cloud-provided or -hosted
services and applications. See “Risk Factors” in Part I,
Item 1A of the 2020 Form 10-K for further information
about information and cyber security risk.

157 Goldman Sachs June 2021 Form 10-Q

Third-Party Risk. Third-party risk, including vendor risk, isthe risk of an adverse impact due to reliance on third parties
performing services or activities on our behalf. These risks
may include legal, regulatory, information security,
reputational, operational or any other risks inherent inengaging a third party. We identify, manage and report key
third-party risks and conduct due diligence across multiple
risk domains, including information security and cybersecurity, resilience and additional third-party dependencies.
The Third-Party Risk Program monitors, reviews andreassesses third-party risks on an ongoing basis. See “Risk
Factors” in Part I, Item 1A of the 2020 Form 10-K for further
information about third-party risk.
Business Resilience Risk. Business resilience risk is the riskof disruption to our critical processes. We monitor threats andassess risks and seek to ensure our state of readiness in theevent of a significant operational disruption to the normal
operations of our critical functions or their dependencies, suchas critical facilities, systems, third parties, data and/or
personnel. We approach BCP through the lens of business andoperational resilience. The resilience framework defines thefundamental principles for BCP and crisis management toensure that critical functions can continue to operate in theevent of a disruption. The business continuity program iscomprehensive, consistent firmwide and up-to-date,incorporating new information, techniques and technologies
as and when they become available, and our resilience
recovery plans incorporate and test specific and measurable
recovery time objectives in accordance with local market bestpractices and regulatory requirements, and under specificscenarios. See “Regulatory and Other Matters — Other
Matters” for information about the impact of the COVID-19
pandemic. See “Business — Business Continuity andInformation Security” in Part I, Item 1 of the 2020 Form 10-K
for further information about business continuity.

Model Risk Management
Overview
Model risk is the potential for adverse consequences fromdecisions made based on model outputs that may beincorrect or used inappropriately. We rely on quantitativemodels across our business activities primarily to value
certain financial assets and liabilities, to monitor and manage
our risk, and to measure and monitor our regulatory capital.
Model Risk, which is independent of our revenueproducing units, model developers, model owners andmodel users, and reports to our chief risk officer, has
primary responsibility for assessing, monitoring andmanaging our model risk through firmwide oversightacross our global businesses, and provides periodic updates
to senior management, risk committees and the Risk
Committee of the Board.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Our model risk management framework is managed
through a governance structure and risk management
controls, which encompass standards designed to ensure we
maintain a comprehensive model inventory, including risk
assessment and classification, sound model development
practices, independent review and model-specific usage
controls. The Firmwide Model Risk Control Committee
oversees our model risk management framework.
Model Review and Validation Process
Model Risk consists of quantitative professionals who
perform an independent review, validation and approval of
our models. This review includes an analysis of the model
documentation, independent testing, an assessment of theappropriateness of the methodology used, and verificationofcompliance
with
model
development
andimplementation standards.
We regularly refine and enhance our models to reflectchanges in market or economic conditions and our businessmix. All models are reviewed on an annual basis, and newmodels or significant changes to existing models and theirassumptions are approved prior to implementation.
The model validation process incorporates a review ofmodels and trade and risk parameters across a broad rangeof scenarios (including extreme conditions) in order tocritically evaluate and verify:‰ The model’s conceptual soundness, including thereasonableness of model assumptions, and suitability for
intended use;
‰ The testing strategy utilized by the model developers toensure that the models function as intended;‰ The suitability of the calculation techniques incorporated
in the model;

Available Information
Our internet address is www.goldmansachs.com and theinvestor relations section of our website is located atwww.goldmansachs.com/investor-relations, where we
make available, free of charge, our annual reports on
Form 10-K, quarterly reports on Form 10-Q and current
reports on Form 8-K and amendments to those reports filed
or furnished pursuant to Section 13(a) or 15(d) of the
Exchange Act, as well as proxy statements, as soon asreasonably practicable after we electronically file suchmaterial with, or furnish it to, the SEC. Also posted on our
website, and available in print upon request of any
shareholder to our Investor Relations Department (Investor
Relations), are our certificate of incorporation and by-laws,
charters for our Audit, Risk, Compensation, Corporate
Governance and Nominating, and Public Responsibilities
Committees, our Policy Regarding Director Independence
Determinations, our Policy on Reporting of Concerns
Regarding Accounting and Other Matters, our Corporate
Governance Guidelines, our Code of Business Conduct andEthics governing our directors, officers and employees, and
our Sustainability Report. Within the time period requiredby the SEC, we will post on our website any amendment to
the Code of Business Conduct and Ethics and any waiver
applicable to any executive officer, director or seniorfinancial officer.
Our website also includes information about (i) purchases
and sales of our equity securities by our executive officers
and directors; (ii) disclosure relating to certain non-GAAP
financial measures (as defined in the SEC’s Regulation G)
that we may make public orally, telephonically, by webcast,by broadcast or by other means; (iii) DFAST results; (iv) the
public portion of our resolution plan submission; (v) our
Pillar 3 disclosure; and (vi) our average daily LCR.

‰ The model’s accuracy in reflecting the characteristics ofthe related product and its significant risks;‰ The model’s consistency with models for similar
products; and‰ The model’s sensitivity to input parameters andassumptions.
See “Critical Accounting Policies — Fair Value — Review
of Valuation Models,” “Liquidity Risk Management,”“Market Risk Management,” “Credit Risk Management”
and “Operational Risk Management” for further
information about our use of models within these areas.

Goldman Sachs June 2021 Form 10-Q 158

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Investor Relations can be contacted at The Goldman Sachs
Group, Inc., 200 West Street, 29th Floor, New York,New York 10282, Attn: Investor Relations, telephone:212-902-0300, e-mail: gs-investor-relations@gs.com. We
use the following, as well as other social media channels, todisclose public information to investors, the media andothers:‰ our website (www.goldmansachs.com);‰ our Twitter account (twitter.com/GoldmanSachs); and‰ our Instagram account (instagram.com/GoldmanSachs).
Our officers may use similar social media channels todisclose public information. It is possible that certain
information we or our officers post on our website and onsocial media could be deemed material, and we encourage
investors, the media and others interested in Goldman
Sachs to review the business and financial information weor our officers post on our website and on the social media
channels identified above. The information on our website
and those social media channels is not incorporated byreference into this Form 10-Q.

Cautionary Statement Pursuant to the U.S.
Private Securities Litigation Reform Act of1995
We have included in this Form 10-Q, and our management
may make, statements that may constitute “forwardlooking statements” within the meaning of the safe harborprovisions of the U.S. Private Securities Litigation ReformAct of 1995. Forward-looking statements are not historicalfacts or statements of current conditions, but instead
represent only our beliefs regarding future events, many ofwhich, by their nature, are inherently uncertain and outside
our control.
By identifying these statements for you in this manner, we
are alerting you to the possibility that our actual results,financial condition, liquidity and capital actions may differ,possibly materially, from the anticipated results, financial
condition and liquidity in these forward-looking
statements. Important factors that could cause our results,financial condition, liquidity and capital actions to differ
from those in these statements include, among others, thosedescribed below and in “Risk Factors” in Part I, Item 1A ofthe 2020 Form 10-K.

159 Goldman Sachs June 2021 Form 10-Q

These statements may relate to, among other things, (i) our
future plans and results, including our target ROE, ROTE,
efficiency ratio and CET1 capital ratio, and how they canbe achieved, (ii) trends in or growth opportunities for ourbusinesses, including the timing, costs, profitability,
benefits and other aspects of business and strategic
initiatives and their impact on our efficiency ratio, (iii) ourlevel of future compensation expense, including as apercentage of both operating expenses and revenues net ofprovision for credit losses, (iv) our investment banking
transaction backlog, (v) our expected interest income andinterest expense, (vi) our expense savings and strategic
locations initiatives, (vii) expenses we may incur, including
future litigation expense and expenses from investing in ourconsumer and transaction banking businesses, (viii) the
projected growth of our deposits and other funding, asset
liability management and funding strategies and related
interest expense savings, (ix) our business initiatives,
including transaction banking and new consumer financial
products, (x) our planned 2021 benchmark debt issuances,(xi) the amount, composition and location of GCLA we
expect to hold, (xii) our credit exposures, (xiii) our expected
provisions for credit losses (including those related to ourplanned co-branded credit card relationship with General
Motors), (xiv) the adequacy of our allowance for credit
losses, (xv) the projected growth of our installment loan
and credit card businesses, (xvi) the objectives andeffectiveness of our BCP strategy, information security
program, risk management and liquidity policies, (xvii) ourresolution plan and strategy and their implications forstakeholders, (xviii) the design and effectiveness of ourresolution capital and liquidity models and triggers andalerts framework, (xix) the results of stress tests, (xx) the
effect of changes to regulations, and our future status,
activities or reporting under banking and financial
regulation, (xxi) our expected tax rate, (xxii) the futurestate of our liquidity and regulatory capital ratios, and ourprospective capital distributions (including dividends andrepurchases), (xxiii) our expected SCB and G-SIB
surcharge, (xxiv) legal proceedings, governmental
investigations or other contingencies, (xxv) the asset
recovery guarantee and our remediation activities related toour 1Malaysia Development Berhad (1MDB) settlements,(xxvi) the replacement of IBORs and our transition toalternative risk-free reference rates, (xxvii) the impact of the
COVID-19 pandemic on our business, results, financial
position and liquidity, (xxviii) the effectiveness of ourmanagement of our human capital, including our diversity
goals, (xxix) our plans for our people to return to ouroffices and (xxx) future inflation.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Statements about our target ROE, ROTE, efficiency ratio
and expense savings, and how they can be achieved, arebased on our current expectations regarding our businessprospects and are subject to the risk that we may be unable
to achieve our targets due to, among other things, changes
in our business mix, lower profitability of new businessinitiatives, increases in technology and other costs to launchand bring new business initiatives to scale, and increases inliquidity requirements.
Statements about our target ROE, ROTE and CET1 capitalratio, and how they can be achieved, are based on ourcurrent expectations regarding the capital requirements
applicable to us and are subject to the risk that our actual
capital requirements may be higher than currently
anticipated because of, among other factors, changes in theregulatory capital requirements applicable to us resulting
from changes in regulations or the interpretation orapplication of existing regulations or changes in the natureand composition of our activities.
Statements about the timing, costs, profitability, benefits
and other aspects of business and expense savings
initiatives, the level and composition of more durable
revenues and increases in market share are based on ourcurrent expectations regarding our ability to implement
these initiatives and actual results may differ, possibly
materially, from current expectations due to, among otherthings, a delay in the timing of these initiatives, increased
competition and an inability to reduce expenses and growbusinesses with durable revenues.
Statements about the level of future compensation expense,
including as a percentage of both operating expenses andrevenues net of provision for credit losses, and our
efficiency ratio as our platform business initiatives reachscale are subject to the risks that the compensation andother costs to operate our businesses, including platform
initiatives, may be greater than currently expected.

Statements about the projected growth of our deposits andother funding, asset liability management and funding
strategies and related interest expense savings, and ourinstallment loan and credit card businesses, are subject tothe risk that actual growth and savings may differ, possibly
materially, from that currently anticipated due to, among
other things, changes in interest rates and competition fromother similar products.
Statements about planned 2021 benchmark debt issuances
and the amount, composition and location of GCLA we
expect to hold are subject to the risk that actual issuancesand GCLA levels may differ, possibly materially, from thatcurrently expected due to changes in market conditions,business opportunities or our funding and projectedliquidity needs.
Statements about our expected provisions for credit losses(including those related to our planned co-branded credit
card relationship with General Motors) are subject to therisk that actual credit losses may differ and our expectations
may change, possibly materially, from that currently
anticipated due to, among other things, changes to thecomposition of our loan portfolio and changes in theeconomic environment in future periods and our forecastsof future economic conditions, as well as changes in ourmodels, policies and other management judgments.
Statements about our future effective income tax rate aresubject to the risk that it may differ from the anticipatedrate indicated in such statements, possibly materially, due
to, among other things, changes in the tax rates applicable
to us, changes in our earnings mix, our profitability andentities in which we generate profits, the assumptions wehave made in forecasting our expected tax rate, as well as
any corporate tax legislation that may be enacted or any
guidance that may be issued by the U.S. Internal Revenue
Service.

Statements about our investment banking transaction
backlog are subject to the risk that such transactions may be
modified or may not be completed at all and related net
revenues may not be realized or may be materially less than
expected. Important factors that could have such a result
include, for underwriting transactions, a decline or
weakness in general economic conditions, an outbreak ofhostilities, volatility in the securities markets or an adverse
development with respect to the issuer of the securities and,for financial advisory transactions, a decline in the
securities markets, an inability to obtain adequate
financing, an adverse development with respect to a party
to the transaction or a failure to obtain a required
regulatory approval. For information about otherimportant factors that could adversely affect ourinvestment banking transactions, see “Risk Factors” inPart I, Item 1A of the 2020 Form 10-K.
Goldman Sachs June 2021 Form 10-Q 160

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Statements about the future state of our liquidity andregulatory capital ratios (including our SCB and G-SIB
surcharge), and our prospective capital distributions(including dividends and repurchases), are subject to therisk that our actual liquidity, regulatory capital ratios andcapital distributions may differ, possibly materially, fromwhat is currently expected due to, among other things, theneed to use capital to support clients, increased regulatory
requirements, results of applicable supervisory stress tests
and changes to the composition of our balance sheet.
Statements about the risk exposure related to the asset
recovery guarantee provided to the Government of
Malaysia are subject to the risk that the actual value of
assets and proceeds from assets seized and returned to theGovernment of Malaysia may be less than currently
anticipated. Statements about the progress or the status ofremediation activities relating to 1MDB are based on our
expectations regarding our current remediation plans.
Accordingly, our ability to complete the remediation
activities may change, possibly materially, from what iscurrently expected.

161 Goldman Sachs June 2021 Form 10-Q

Statements about our objectives in management of ourhuman capital, including our diversity goals, are based on
our current expectations and are subject to the risk that we
may not achieve these objectives and goals due to, among
other things, competition in recruiting and attracting
diverse candidates and unsuccessful efforts in retaining
diverse employees.
Statements about our plans for our people to return to ouroffices are based on our current expectations and that
return may be delayed due to, among other factors, future
events that are unpredictable, including the course of the
COVID-19 pandemic, responses of governmental
authorities and the availability, use and effectiveness of
vaccines.
Statements regarding future inflation are subject to the riskthat actual inflation may differ, possibly materially, due to,among other things, changes in economic growth,
unemployment or consumer demand.

Item 3. Quantitative and Qualitative
Disclosures About Market Risk

Item 2. Unregistered Sales of Equity
Securities and Use of Proceeds

Quantitative and qualitative disclosures about market risk
are set forth in “Management’s Discussion and Analysis ofFinancial Condition and Results of Operations — Risk
Management” in Part I, Item 2 of this Form 10-Q.

The table below presents purchases made by or on behalf ofGroup Inc. or any “affiliated purchaser” (as defined inRule 10b-18(a)(3) under the Exchange Act) of our common
stock during the three months ended June 2021.

Item 4.

Total Shares Maximum Shares
Total Average
Purchased as That May Yet Be
Shares Price Paid
Part of a Publicly Purchased Under
Purchased Per Share Announced Program
the Program

Controls and Procedures

As of the end of the period covered by this report, anevaluation was carried out by our management, with theparticipation of our Chief Executive Officer and Chief
Financial Officer, of the effectiveness of our disclosure
controls and procedures (as defined in Rule 13a-15(e)under the Exchange Act). Based on that evaluation, ourChief Executive Officer and Chief Financial Officer
concluded that these disclosure controls and procedures
were effective as of the end of the period covered by thisreport. In addition, no change in our internal control overfinancial reporting (as defined in Rule 13a-15(f) under the
Exchange Act) occurred during the quarter ended
June 2021 that has materially affected, or is reasonably
likely to materially affect, our internal control overfinancial reporting.

April
May
June
Total

1,528,823
1,227,962
93,0382,849,823$341.27$360.28$385.32

1,528,823
1,227,962
93,0382,849,823

39,456,431
38,228,469
38,135,431

Since the beginning of 2000, our Board has approved arepurchase program authorizing repurchases of up to
605 million shares of our common stock. The repurchaseprogram is effected primarily through regular open-market
purchases (which may include repurchase plans designed tocomply with Rule 10b5-1 and accelerated share
repurchases), the amounts and timing of which are
determined primarily by our current and projected capital
position, but which may also be influenced by generalmarket conditions and the prevailing price and trading
volumes of our common stock. The repurchase program
has no set expiration or termination date.

PART II. OTHER INFORMATION
Item 1. Legal Proceedings
We are involved in a number of judicial, regulatory andarbitration proceedings concerning matters arising inconnection with the conduct of our businesses. Many ofthese proceedings are in early stages, and many of thesecases seek an indeterminate amount of damages. We haveestimated the upper end of the range of reasonably possible
aggregate loss for matters where we have been able toestimate a range and we believe, based on currently
available information, that the results of matters where wehave not been able to estimate a range of reasonably
possible loss, in the aggregate, will not have a material
adverse effect on our financial condition, but may bematerial to our operating results in a given period. Given
the range of litigation and investigations presently underway, our litigation expenses may remain high. See“Management’s Discussion and Analysis of Financial
Condition and Results of Operations — Use of Estimates”
in Part I, Item 2 of this Form 10-Q. See Notes 18 and 27 tothe consolidated financial statements in Part I, Item 1 of thisForm 10-Q for information about our reasonably possible
aggregate loss estimate and judicial, regulatory and legal
proceedings.

Goldman Sachs June 2021 Form 10-Q 162

Item 6.

Exhibits

SIGNATURES

Exhibits
3.1

Restated Certificate of Incorporation of The
Goldman Sachs Group, Inc., amended as ofJuly 30, 2021.

15.1

Letter re: Unaudited
Information.

31.1

Rule 13a-14(a) Certifications.

32.1

Section 1350 Certifications (This information
is furnished and not filed for purposes ofSections 11 and 12 of the Securities Act of1933 and Section 18 of the Securities
Exchange Act of 1934).

101

104

Interim

Financial

Pursuant to Rules 405 and 406 ofRegulation S-T, the following information isformatted in iXBRL (Inline eXtensible
Business Reporting Language): (i) the
Consolidated Statements of Earnings for thethree and six months ended June 30, 2021 andJune 30, 2020, (ii) the Consolidated
Statements of Comprehensive Income for thethree and six months ended June 30, 2021 andJune 30, 2020, (iii) the Consolidated Balance
Sheets as of June 30, 2021 andDecember 31, 2020, (iv) the Consolidated
Statements of Changes in Shareholders’ Equity
for the three and six months ended
June 30, 2021 and June 30, 2020, (v) the
Consolidated Statements of Cash Flows for thesix months ended June 30, 2021 andJune 30, 2020, (vi) the notes to theConsolidated Financial Statements and(vii) the cover page.
Cover Page Interactive Data File (formatted in
iXBRL in Exhibit 101).

163 Goldman Sachs June 2021 Form 10-Q

Pursuant to the requirements of the Securities Exchange Actof 1934, the registrant has duly caused this report to besigned on its behalf by the undersigned thereunto duly
authorized.
THE GOLDMAN SACHS GROUP, INC.
By:
Name:
Title:/s/

Stephen M. Scherr
Stephen M. Scherr
Chief Financial Officer(Principal Financial Officer)
August 3, 2021/s/

Sheara Fredman
Sheara Fredman
Chief Accounting Officer(Principal Accounting Officer)
August 3, 2021

Date:
By:
Name:
Title:
Date:

EXHIBIT 3.1
RESTATEDCERTIFICATE OF INCORPORATIONOF
THE GOLDMAN SACHS GROUP, INC.
THE GOLDMAN SACHS GROUP, INC., a corporation organized and existing under the Delaware General Corporation Law (the“Corporation”), DOES HEREBY CERTIFY:
1. The name of the Corporation is The Goldman Sachs Group, Inc. The date of filing of its original certificate of incorporation with the Secretary ofState of the State of Delaware was July 21, 1998.
2. This Restated Certificate of Incorporation restates and integrates and does not further amend the provisions of the certificate of incorporation of the
Corporation as heretofore amended or supplemented. There is no discrepancy between the provisions of this Restated Certificate of Incorporation andthe provisions of the certificate of incorporation of the Corporation as heretofore amended or supplemented. This Restated Certificate of Incorporation
has been duly adopted in accordance with the provisions of Section 245 of the General Corporation Law of the State of Delaware. The text of thecertificate of incorporation is hereby restated to read herein as set forth in full:
FIRST. The name of the Corporation is The Goldman Sachs Group, Inc.
SECOND. The address of the Corporation’s registered office in the State of Delaware is Corporation Trust Center, 1209 Orange Street in the Cityof Wilmington, County of New Castle, 19801. The name of its registered agent at such address is The Corporation Trust Company.
THIRD. The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the Delaware
General Corporation Law. Without limiting the generality of the foregoing, the Corporation shall have all of the powers conferred on corporations
by the Delaware General Corporation Law and other law, including the power and authority to make an initial charitable contribution (as definedin Section 170(c) of the Internal Revenue Code of 1986, as currently in effect or as the same may hereafter be amended) of up to an aggregate of$200,000,000 to one or more entities (the “Contribution”), and to make other charitable contributions from time to time thereafter, in suchamounts, on such terms and conditions and for such purposes as may be lawful.
FOURTH. The total number of shares of all classes of stock which the Corporation shall have authority to issue is 4,350,000,000, of which
4,000,000,000 shares of the par value of $0.01 per share shall be a separate class designated as Common Stock, 200,000,000 shares of the parvalue of $0.01 per share shall be a separate class designated as Nonvoting Common Stock and 150,000,000 shares of the par value of $0.01 pershare shall be a separate class designated as Preferred Stock.

COMMON STOCK AND NONVOTING COMMON STOCK
Except as set forth in this Article FOURTH, the Common Stock and the Nonvoting Common Stock (together, the “Common Shares”) shall havethe same rights and privileges and shall rank equally, share ratably and be identical in all respects as to all matters.
(i) Voting. Except as may be provided in this Restated Certificate of Incorporation or required by law, the Common Stock shall havevoting rights in the election of directors and on all other matters presented to stockholders, with each holder of Common Stock being
entitled to one vote for each share of Common Stock held of record by such holder on such matters. The Nonvoting Common Stock shallhave no voting rights other than such rights as may be required by the first sentence of Section 242(b)(2) of the Delaware General
Corporation Law or any similar provision hereafter enacted; provided that an amendment of this Restated Certificate of Incorporation toincrease or decrease the number of authorized shares of Nonvoting Common Stock (but not below the number of shares thereof thenoutstanding) may be adopted by resolution adopted by the board of directors of the Corporation and approved by the affirmative vote of
the holders of a majority of the voting power of all outstanding shares of Common Stock of the Corporation and all other outstanding
shares of stock of the Corporation entitled to vote thereon irrespective of the provisions of Section 242(b)(2) of the Delaware General
Corporation Law or any similar provision hereafter enacted, with such outstanding shares of Common Stock and other stock considered
for this purpose as a single class, and no vote of the holders of any shares of Nonvoting Common Stock, voting separately as a class, shallbe required therefor.
(ii) Dividends. Subject to the rights of the holders of any series of Preferred Stock, holders of Common Stock and holders of Nonvoting
Common Stock shall be entitled to receive such dividends and distributions (whether payable in cash or otherwise) as may be declared on
the Common Shares by the board of directors of the Corporation from time to time out of assets or funds of the Corporation legallyavailable therefor; provided that the board of directors of the Corporation shall declare no dividend, and no dividend shall be paid, withrespect to any outstanding share of Common Stock or Nonvoting Common Stock, whether in cash or otherwise (including any dividend inshares of Common Stock on or with respect to shares of Common Stock or any dividend in shares of Nonvoting Common Stock on or withrespect to shares of Nonvoting Common Stock (collectively, “Stock Dividends”)), unless, simultaneously, the same dividend is declared or
paid with respect to each share of Common Stock and Nonvoting Common Stock. If a Stock Dividend is declared or paid with respect toone class, then a Stock Dividend shall likewise be declared or paid with respect to the other class and shall consist of shares of such otherclass in a number that bears the same relationship to the total number of shares of such other class, issued and outstanding immediately
prior to the payment of such dividend, as the number of shares comprising the Stock Dividend with respect to the first referenced classbears to the total number of-2-shares of such first referenced class, issued and outstanding immediately prior to the payment of such dividend. Stock Dividends withrespect to Common Stock may be paid only with shares of Common Stock. Stock Dividends with respect to Nonvoting Common Stock
may be paid only with shares of Nonvoting Common Stock. Notwithstanding the foregoing, in the case of any dividend in the form ofcapital stock of a subsidiary of the Corporation, the capital stock of the subsidiary distributed to holders of Common Stock shall beidentical to the capital stock of the subsidiary distributed to holders of Nonvoting Common Stock, except that the capital stock distributed
to holders of Common Stock may have full or any other voting rights and the capital stock distributed to holders of Nonvoting Common
Stock shall be non-voting to the same extent as the Nonvoting Common Stock is non-voting.
(iii) Subdivisions, Combinations and Mergers. If the Corporation shall in any manner split, subdivide or combine the outstanding shares ofCommon Stock or the outstanding shares of Nonvoting Common Stock, the outstanding shares of the other such class of the Common
Shares shall likewise be split, subdivided or combined in the same manner proportionately and on the same basis per share. In the event ofany merger, statutory share exchange, consolidation or similar form of corporate transaction involving the Corporation (whether or not the
Corporation is the surviving entity), the holders of Common Stock and the holders of Nonvoting Common Stock shall be entitled toreceive the same per share consideration, if any, except that any securities received by holders of Common Stock in consideration of suchstock may have full or any other voting rights and any securities received by holders of Nonvoting Common Stock in consideration ofsuch stock shall be non-voting to the same extent as the Nonvoting Common Stock is non-voting.
(iv) Rights on Liquidation. Subject to the rights of the holders of any series of Preferred Stock, in the event of any liquidation, dissolution
or winding-up of the Corporation (whether voluntary or involuntary), the assets of the Corporation available for distribution to
stockholders shall be distributed in equal amounts per share to the holders of Common Stock and the holders of Nonvoting Common
Stock, as if such classes constituted a single class. For purposes of this paragraph, a merger, statutory share exchange, consolidation orsimilar corporate transaction involving the Corporation (whether or not the Corporation is the surviving entity), or the sale, transfer orlease by the Corporation of all or substantially all its assets, shall not constitute or be deemed a liquidation, dissolution or winding-up of
the Corporation.
-3-

PREFERRED STOCK
Shares of Preferred Stock may be issued in one or more series from time to time as determined by the board of directors of the Corporation, andthe board of directors of the Corporation is authorized to fix by resolution or resolutions the designations and the powers, preferences and rights,
and the qualifications, limitations and restrictions thereof, of the shares of each series of Preferred Stock, including the following:(i) the distinctive serial designation of such series which shall distinguish it from other series;(ii) the number of shares included in such series;(iii) whether dividends shall be payable to the holders of the shares of such series and, if so, the basis on which such holders shall beentitled to receive dividends (which may include, without limitation, a right to receive such dividends or distributions as may be declaredon the shares of such series by the board of directors of the Corporation, a right to receive such dividends or distributions, or any portion or
multiple thereof, as may be declared on the Common Stock or any other class of stock or, in addition to or in lieu of any other right toreceive dividends, a right to receive dividends at a particular rate or at a rate determined by a particular method, in which case such rate or
method of determining such rate may be set forth), the form of such dividend, any conditions on which such dividends shall be payable
and the date or dates, if any, on which such dividends shall be payable;(iv) whether dividends on the shares of such series shall be cumulative and, if so, the date or dates or method of determining the date ordates from which dividends on the shares of such series shall be cumulative;(v) the amount or amounts, if any, which shall be payable out of the assets of the Corporation to the holders of the shares of such series
upon the voluntary or involuntary liquidation, dissolution or winding-up of the Corporation, and the relative rights of priority, if any, of
payment of the shares of such series;(vi) the price or prices (in cash, securities or other property or a combination thereof) at which, the period or periods within which and theterms and conditions upon which the shares of such series may be redeemed, in whole or in part, at the option of the Corporation or at theoption of the holder or holders thereof or upon the happening of a specified event or events;(vii) the obligation, if any, of the Corporation to purchase or redeem shares of such series pursuant to a sinking fund or otherwise and theprice or prices (in cash, securities or other property or a combination thereof) at which, the period or periods within which and the terms
and conditions upon which the shares of such series shall be redeemed or purchased, in whole or in part, pursuant to such obligation;-4-

(viii) whether or not the shares of such series shall be convertible or exchangeable, at any time or times at the option of the holder orholders thereof or at the option of the Corporation or upon the happening of a specified event or events, into shares of any other class orclasses or any other series of the same or any other class or classes of stock of the Corporation or any other securities or property of the
Corporation or any other entity, and the price or prices (in cash, securities or other property or a combination thereof) or rate or rates of
conversion or exchange and any adjustments applicable thereto; and(ix) whether or not the holders of the shares of such series shall have voting rights, in addition to the voting rights provided by law, and if
so the terms of such voting rights, which may provide, among other things and subject to the other provisions of this Restated Certificate
of Incorporation, that each share of such series shall carry one vote or more or less than one vote per share, that the holders of such series
shall be entitled to vote on certain matters as a separate class (which for such purpose may be comprised solely of such series or of suchseries and one or more other series or classes of stock of the Corporation) and that all the shares of such series entitled to vote on aparticular matter shall be deemed to be voted on such matter in the manner that a specified portion of the voting power of the shares ofsuch series or separate class are voted on such matter.
For all purposes, this Restated Certificate of Incorporation shall include each certificate of designations (if any) setting forth the terms of a seriesof Preferred Stock.
Subject to the rights, if any, of the holders of any series of Preferred Stock set forth in a certificate of designations, an amendment of this Restated
Certificate of Incorporation to increase or decrease the number of authorized shares of any class of Preferred Stock (but not below the number ofshares thereof then outstanding) may be adopted by resolution adopted by the board of directors of the Corporation and approved by theaffirmative vote of the holders of a majority of the voting power of all outstanding shares of Common Stock of the Corporation and all otheroutstanding shares of stock of the Corporation entitled to vote thereon irrespective of the provisions of Section 242(b)(2) of the Delaware General
Corporation Law or any similar provision hereafter enacted, with such outstanding shares of Common Stock and other stock considered for thispurpose as a single class, and no vote of the holders of Preferred Stock, voting as a separate class, shall be required therefor.
Except as otherwise required by law or provided in the certificate of designations for the relevant series, holders of Common Shares, as such, shallnot be entitled to vote on any amendment of this Restated Certificate of Incorporation that alters or changes the powers, preferences, rights orother terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together
with the holders of one or more other series of Preferred Stock, to vote thereon as a separate class pursuant to this Restated Certificate ofIncorporation or pursuant to the Delaware General Corporation Law as then in effect.
-5-

Pursuant to the authority conferred by this Article FOURTH upon the board of directors of the Corporation and authority delegated by the boardof directors to the Securities Issuance Committee of the board of directors of the Corporation (the “Securities Issuance Committee”), the Securities
Issuance Committee created a series of shares of Preferred Stock designated as Floating Rate Non-Cumulative Preferred Stock, Series A, by filinga certificate of designations of the Corporation with the Secretary of State of the State of Delaware on April 22, 2005, and the voting powers,
designations, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions thereof, of
the Corporation’s Floating Rate Non-Cumulative Preferred Stock, Series A, are set forth in Appendix A hereto and are incorporated herein byreference.
Pursuant to the authority conferred by this Article FOURTH upon the board of directors of the Corporation and authority delegated by the boardof directors to the Securities Issuance Committee, the Securities Issuance Committee created a series of shares of Preferred Stock designated as
Floating Rate Non-Cumulative Preferred Stock, Series C, by filing a certificate of designations of the Corporation with the Secretary of State of
the State of Delaware on October 28, 2005, and the voting powers, designations, preferences and relative, participating, optional or other special
rights, and the qualifications, limitations or restrictions thereof, of the Corporation’s Floating Rate Non-Cumulative Preferred Stock, Series C, areset forth in Appendix B hereto and are incorporated herein by reference.
Pursuant to the authority conferred by this Article FOURTH upon the board of directors of the Corporation and authority delegated by the boardof directors to the Securities Issuance Committee, the Securities Issuance Committee created a series of shares of Preferred Stock designated as
Floating Rate Non-Cumulative Preferred Stock, Series D, by filing a certificate of designations of the Corporation with the Secretary of State of
the State of Delaware on May 23, 2006, and the voting powers, designations, preferences and relative, participating, optional or other special
rights, and the qualifications, limitations or restrictions thereof, of the Corporation’s Floating Rate Non-Cumulative Preferred Stock, Series D, areset forth in Appendix C hereto and are incorporated herein by reference.
Pursuant to the authority conferred by this Article FOURTH upon the board of directors of the Corporation and authority delegated by the boardof directors to the Securities Issuance Committee, the Securities Issuance Committee created a series of shares of Preferred Stock designated as
Perpetual Non-Cumulative Preferred Stock, Series E, by filing a certificate of designations of the Corporation with the Secretary of State of theState of Delaware on May 14, 2007, and the voting powers, designations, preferences and relative, participating, optional or other special rights,
and the qualifications, limitations or restrictions thereof, of the Corporation’s Perpetual Non-Cumulative Preferred Stock, Series E, are set forth inAppendix D hereto and are incorporated herein by reference.
-6-

Pursuant to the authority conferred by this Article FOURTH upon the board of directors of the Corporation and authority delegated by the boardof directors to the Securities Issuance Committee, the Securities Issuance Committee created a series of shares of Preferred Stock designated as
Perpetual Non-Cumulative Preferred Stock, Series F, by filing a certificate of designations of the Corporation with the Secretary of State of theState of Delaware on May 14, 2007, and the voting powers, designations, preferences and relative, participating, optional or other special rights,
and the qualifications, limitations or restrictions thereof, of the Corporation’s Perpetual Non-Cumulative Preferred Stock, Series F, are set forth inAppendix E hereto and are incorporated herein by reference.
Pursuant to the authority conferred by this Article FOURTH upon the board of directors of the Corporation and authority delegated by the boardof directors to the Securities Issuance Committee, the Securities Issuance Committee created a series of shares of Preferred Stock designated as
5.50% Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series J, by filing a certificate of designations of the Corporation with theSecretary of State of the State of Delaware on April 23, 2013, and the voting powers, designations, preferences and relative, participating, optionalor other special rights, and the qualifications, limitations or restrictions thereof, of the Corporation’s 5.50% Fixed-to-Floating Rate
Non-Cumulative Preferred Stock, Series J, are set forth in Appendix F hereto and are incorporated herein by reference.
Pursuant to the authority conferred by this Article FOURTH upon the board of directors of the Corporation and authority delegated by the boardof directors to the Securities Issuance Committee, the Securities Issuance Committee created a series of shares of Preferred Stock designated as
6.375% Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series K, by filing a certificate of designations of the Corporation with theSecretary of State of the State of Delaware on April 24, 2014, and the voting powers, designations, preferences and relative, participating, optionalor other special rights, and the qualifications, limitations or restrictions thereof, of the Corporation’s 6.375% Fixed-to-Floating Rate
Non-Cumulative Preferred Stock, Series K, are set forth in Appendix G hereto and are incorporated herein by reference.
Pursuant to the authority conferred by this Article FOURTH upon the board of directors of the Corporation and authority delegated by the boardof directors to the Securities Issuance Committee, the Securities Issuance Committee created a series of shares of Preferred Stock designated as
5.30% Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series O, by filing a certificate of designations of the Corporation with theSecretary of State of the State of Delaware on July 26, 2016, and the voting powers, designations, preferences and relative, participating, optionalor other special rights, and the qualifications, limitations or restrictions thereof, of the Corporation’s 5.30% Fixed-to-Floating Rate
Non-Cumulative Preferred Stock, Series O, are set forth in Appendix H hereto and are incorporated herein by reference.
Pursuant to the authority conferred by this Article FOURTH upon the board of directors of the Corporation and authority delegated by the boardof directors to the Securities Issuance Committee, the Securities Issuance Committee created a series of shares of Preferred Stock designated as
5.00% Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series P, by filing a certificate of designations of the Corporation with-7-

the Secretary of State of the State of Delaware on October 27, 2017, and the voting powers, designations, preferences and relative, participating,optional or other special rights, and the qualifications, limitations or restrictions thereof, of the Corporation’s 5.00% Fixed-to-Floating Rate
Non-Cumulative Preferred Stock, Series P, are set forth in Appendix I hereto and are incorporated herein by reference.
Pursuant to the authority conferred by this Article FOURTH upon the board of directors of the Corporation and authority delegated by the boardof directors to the Securities Issuance Committee, the Securities Issuance Committee created a series of shares of Preferred Stock designated as
5.50% Fixed-Rate Reset Non-Cumulative Preferred Stock, Series Q, by filing a certificate of designations of the Corporation with the Secretary ofState of the State of Delaware on June 14, 2019, and the voting powers, designations, preferences and relative, participating, optional or otherspecial rights, and the qualifications, limitations or restrictions thereof, of the Corporation’s 5.50% Fixed-Rate Reset Non-Cumulative Preferred
Stock, Series Q, are set forth in Appendix J hereto and are incorporated herein by reference.
Pursuant to the authority conferred by this Article FOURTH upon the board of directors of the Corporation and authority delegated by the boardof directors to the Securities Issuance Committee, the Securities Issuance Committee created a series of shares of Preferred Stock designated as
4.95% Fixed-Rate Reset Non-Cumulative Preferred Stock, Series R, by filing a certificate of designations of the Corporation with the Secretary ofState of the State of Delaware on November 14, 2019, and the voting powers, designations, preferences and relative, participating, optional orother special rights, and the qualifications, limitations or restrictions thereof, of the Corporation’s 4.95% Fixed-Rate Reset Non-Cumulative
Preferred Stock, Series R, are set forth in Appendix K hereto and are incorporated herein by reference.
Pursuant to the authority conferred by this Article FOURTH upon the board of directors of the Corporation and authority delegated by the boardof directors to the Securities Issuance Committee, the Securities Issuance Committee created a series of shares of Preferred Stock designated as
4.40% Fixed-Rate Reset Non-Cumulative Preferred Stock, Series S, by filing a certificate of designations of the Corporation with the Secretary ofState of the State of Delaware on January 27, 2020, and the voting powers, designations, preferences and relative, participating, optional or otherspecial rights, and the qualifications, limitations or restrictions thereof, of the Corporation’s 4.40% Fixed-Rate Reset Non-Cumulative Preferred
Stock, Series S, are set forth in Appendix L hereto and are incorporated herein by reference.
Pursuant to the authority conferred by this Article FOURTH upon the board of directors of the Corporation and authority delegated by the boardof directors to the Securities Issuance Committee, the Securities Issuance Committee created a series of shares of Preferred Stock designated as
3.80% Fixed-Rate Reset Non-Cumulative Preferred Stock, Series T, by filing a certificate of designations of the Corporation with the Secretary ofState of the State of Delaware on April 22, 2021, and the voting powers, designations, preferences and relative, participating, optional or otherspecial rights, and the qualifications, limitations or restrictions thereof, of the Corporation’s 3.80% Fixed-Rate Reset Non-Cumulative Preferred
Stock, Series T, are set forth in Appendix M hereto and are incorporated herein by reference.
-8-

Pursuant to the authority conferred by this Article FOURTH upon the board of directors of the Corporation and authority delegated by the boardof directors to the Securities Issuance Committee, the Securities Issuance Committee created a series of shares of Preferred Stock designated as
3.65% Fixed-Rate Reset Non-Cumulative Preferred Stock, Series U, by filing a certificate of designations of the Corporation with the Secretary ofState of the State of Delaware on July 26, 2021, and the voting powers, designations, preferences and relative, participating, optional or otherspecial rights, and the qualifications, limitations or restrictions thereof, of the Corporation’s 3.65% Fixed-Rate Reset Non-Cumulative Preferred
Stock, Series U, are set forth in Appendix N hereto and are incorporated herein by reference.
-9-

OPTIONS, WARRANTS AND OTHER RIGHTS
The board of directors of the Corporation is authorized to create and issue options, warrants and other rights from time to time entitling the holders
thereof to purchase securities or other property of the Corporation or any other entity, including any class or series of stock of the Corporation or
any other entity and whether or not in connection with the issuance or sale of any securities or other property of the Corporation, for suchconsideration (if any), at such times and upon such other terms and conditions as may be determined or authorized by the board of directors of the
Corporation and set forth in one or more agreements or instruments. Among other things and without limitation, such terms and conditions may
provide for the following:(i) adjusting the number or exercise price of such options, warrants or other rights or the amount or nature of the securities or otherproperty receivable upon exercise thereof in the event of a subdivision or combination of any securities, or a recapitalization, of the
Corporation, the acquisition by any person of beneficial ownership of securities representing more than a designated percentage of thevoting power of any outstanding series, class or classes of securities, a change in ownership of the Corporation’s securities or a merger,
statutory share exchange, consolidation, reorganization, sale of assets or other occurrence relating to the Corporation or any of its
securities, and restricting the ability of the Corporation to enter into an agreement with respect to any such transaction absent anassumption by another party or parties thereto of the obligations of the Corporation under such options, warrants or other rights;(ii) restricting, precluding or limiting the exercise, transfer or receipt of such options, warrants or other rights by any person that becomes
the beneficial owner of a designated percentage of the voting power of any outstanding series, class or classes of securities of the
Corporation or any direct or indirect transferee of such a person, or invalidating or voiding such options, warrants or other rights held byany such person or transferee; and(iii) permitting the board of directors (or certain directors specified or qualified by the terms of the governing instruments of such options,warrants or other rights) to redeem, terminate or exchange such options, warrants or other rights.
This paragraph shall not be construed in any way to limit the power of the board of directors of the Corporation to create and issue options,warrants or other rights.
FIFTH. [Reserved]
SIXTH. All corporate powers shall be exercised by the board of directors of the Corporation, except as otherwise specifically required by law oras otherwise provided in this Restated Certificate of Incorporation. Any meeting of stockholders may be postponed by action of the board of
directors at any time in advance of such meeting. The board of directors of the Corporation shall have the power to adopt such rules andregulations for the conduct of the meetings and management of the affairs of the Corporation as they may deem proper and the power to adjourn
any meeting of stockholders without a vote of the stockholders, which powers may be delegated by the board of directors to the chairman of suchmeeting either in such rules and regulations or pursuant to the by-laws of the Corporation.
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Special meetings of stockholders of the Corporation may be called at any time by, but only by, the board of directors of the Corporation or, as andto the extent required by the by-laws of the Corporation, by the Secretary of the Corporation upon the written request of the holders of record of
not less than 25% of the voting power of all outstanding shares of Common Stock of the Corporation, such voting power to be calculated anddetermined in the manner specified, and with any limitations as may be set forth, in the Corporation’s by-laws (the “Requisite Percent”). Eachspecial meeting shall be held at such date, time and place either within or without the State of Delaware as may be stated in the notice of themeeting.
The board of directors of the Corporation is authorized to adopt, amend or repeal by-laws of the Corporation. No adoption, amendment or repealof a by-law by action of stockholders shall be effective unless approved by the affirmative vote of not less than a majority of shares present inperson or represented by proxy at the meeting and entitled to vote on such matter, with all shares of Common Stock of the Corporation and otherstock of the Corporation entitled to vote on such matter considered for this purpose as a single class; for purposes of this sentence votes cast “for”
or “against” and “abstentions” with respect to such matter shall be counted as shares of stock of the Corporation entitled to vote on such matter,
while “broker nonvotes” (or other shares of stock of the Corporation similarly not entitled to vote) shall not be counted as shares entitled to voteon such matter. Any vote of stockholders required by this Article SIXTH shall be in addition to any other vote of stockholders that may berequired by law, this Restated Certificate of Incorporation, the by-laws of the Corporation, any agreement with a national securities exchange orotherwise.
SEVENTH. Elections of directors need not be by written ballot except and to the extent provided in the by-laws of the Corporation.
EIGHTH. The number of directors of the Corporation shall be fixed only by resolution of the board of directors of the Corporation from time totime. Each director who is serving as a director on the date of this Restated Certificate of Incorporation shall hold office until the next annual
meeting of stockholders after such date and until his or her successor has been duly elected and qualified, notwithstanding that such director may
have been elected for a term that extended beyond the date of such next annual meeting of stockholders. At each annual meeting of stockholders
after the date of this Restated Certificate of Incorporation, directors elected at such annual meeting shall hold office until the next annual meetingof stockholders and until their successors have been duly elected and qualified.
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Vacancies and newly created directorships resulting from any increase in the authorized number of directors or from any other cause (other thanvacancies and newly created directorships which the holders of any class or classes of stock or series thereof are expressly entitled by this
Restated Certificate of Incorporation to fill) shall be filled by, and only by, a majority of the directors then in office, although less than a quorum,
or by the sole remaining director. Any director appointed to fill a vacancy or a newly created directorship shall hold office until the next annual
meeting of stockholders, and until his or her successor is elected and qualified or until his or her earlier resignation or removal.
Notwithstanding the foregoing, in the event that the holders of any class or series of Preferred Stock of the Corporation shall be entitled, voting
separately as a class, to elect any directors of the Corporation, then the number of directors that may be elected by such holders voting separately
as a class shall be in addition to the number fixed pursuant to a resolution of the board of directors of the Corporation. Except as otherwise
provided in the terms of such class or series, (i) the terms of the directors elected by such holders voting separately as a class shall expire at theannual meeting of stockholders next succeeding their election and (ii) any director or directors elected by such holders voting separately as a class
may be removed, with or without cause, by the holders of a majority of the voting power of all outstanding shares of stock of the Corporation
entitled to vote separately as a class in an election of such directors.
NINTH. In taking any action, including action that may involve or relate to a change or potential change in the control of the Corporation, a
director of the Corporation may consider, among other things, both the long-term and short-term interests of the Corporation and its stockholders
and the effects that the Corporation’s actions may have in the short term or long term upon any one or more of the following matters:(i) the prospects for potential growth, development, productivity and profitability of the Corporation;(ii) the Corporation’s current employees;(iii) the retired former partners of The Goldman Sachs Group, L.P. (“GS Group”) and the Corporation’s employees and other beneficiaries
receiving or entitled to receive retirement, welfare or similar benefits from or pursuant to any plan sponsored, or agreement entered into,by the Corporation;(iv) the Corporation’s customers and creditors;(v) the ability of the Corporation to provide, as a going concern, goods, services, employment opportunities and employment benefits andotherwise to contribute to the communities in which it does business; and(vi) such other additional factors as a director may consider appropriate in such circumstances.
Nothing in this Article NINTH shall create any duty owed by any director of the Corporation to any person or entity to consider, or afford any
particular weight to, any of the foregoing matters or to limit his or her consideration to the foregoing matters. No such employee, retired former
partner of GS Group, former employee, beneficiary, customer, creditor or community or member thereof shall have any rights against any directorof the Corporation or the Corporation under this Article NINTH.
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TENTH. From and after the consummation of the initial public offering of the shares of Common Stock of the Corporation, no action ofstockholders of the Corporation required or permitted to be taken at any annual or special meeting of stockholders of the Corporation may betaken without a meeting of stockholders, without prior notice and without a vote, and the power of stockholders of the Corporation to consent inwriting to the taking of any action without a meeting is specifically denied. Notwithstanding this Article TENTH, the holders of any series ofPreferred Stock of the Corporation shall be entitled to take action by written consent to such extent, if any, as may be provided in the terms ofsuch series.
ELEVENTH. [Reserved]
TWELFTH. A director of the Corporation shall not be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director of the Corporation, except to the extent that such exemption from liability or limitation thereof is not permitted under the
Delaware General Corporation Law as currently in effect or as the same may hereafter be amended.
Pursuant to the Plan of Incorporation of GS Group, dated as of March 8, 1999, as currently in effect or as the same may hereafter be amended (the“Plan”), the Corporation has the right, but not the obligation, to make special arrangements with any person who was a partner of GS Groupparticipating in the Plan to ameliorate, in whole or in part, certain significantly disproportionate tax or other burdens. The board of directors of the
Corporation is authorized to cause the Corporation to make such arrangements (which may include special payments) as the board of directors of
the Corporation may, in its sole discretion, deem appropriate to effectuate the intent of the relevant provision of the Plan and the Corporation andeach stockholder of the Corporation shall, to the fullest extent permitted by law, be deemed to have approved and ratified any such determinationand to have waived any claim or objection on behalf of the Corporation or any such stockholder arising out of the making of such arrangements.
Pursuant to the Plan, the Corporation has the right, but not the obligation, to register with the Securities and Exchange Commission the resale ofcertain securities of the Corporation by directors, employees and former directors and employees of the Corporation and its subsidiaries andaffiliates and former partners and employees of GS Group and its subsidiaries and affiliates and to undertake various actions and to enter into
agreements and arrangements in connection therewith (collectively, the “Registration Arrangements”). The board of directors of the Corporation
is authorized to cause the Corporation to undertake such Registration Arrangements as the board of directors of the Corporation may, in its sole
discretion, deem appropriate and the Corporation and each stockholder of the Corporation shall, to the fullest extent permitted by law, be deemed
to have approved and ratified any such determination and to have waived any claim or objection on behalf of the Corporation or any suchstockholder arising out of the undertaking of such Registration Arrangements.
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The Corporation and each stockholder of the Corporation shall, to the fullest extent permitted by law, be deemed to have approved and ratified
any decision by the board of directors of the Corporation to make the Contribution referred to in Article THIRD, including the amount thereof (upto the limit specified in Article THIRD) and to have waived any claim or objection on behalf of the Corporation or any such stockholder arisingout of any such decision to make, or the making of, the Contribution.
The authorizations, approvals and ratifications contained in the second, third and fourth paragraphs of this Article TWELFTH shall not be
construed to indicate that any other arrangements or contributions not specifically referred to in such paragraphs are, by reason of such omission,
not within the power and authority of the board of directors of the Corporation or that the determination of the board of directors of the
Corporation with respect thereto should be judged by any legal standard other than that which would have applied but for the inclusion of thesecond, third and fourth paragraphs of this Article TWELFTH.
No amendment, modification or repeal of this Article TWELFTH shall adversely affect any right or protection of a director of the Corporation thatexists at the time of such amendment, modification or repeal.
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IN WITNESS WHEREOF, the Corporation has caused this Restated Certificate of Incorporation to be signed and attested by its duly authorized officer
on this 30th day of July, 2021.
By: /s/ Kathryn H. Ruemmler
Name: Kathryn H. Ruemmler
Title: Executive Vice President, Chief Legal Officer
and General Counsel-15-

Appendix A
CERTIFICATE OF DESIGNATIONSOFFLOATING RATE NON-CUMULATIVE PREFERRED STOCK, SERIES A
OF
THE GOLDMAN SACHS GROUP, INC.
THE GOLDMAN SACHS GROUP, INC., a corporation organized and existing under the General Corporation Law of the State of
Delaware (the “Corporation”), in accordance with the provisions of Sections 103 and 151 thereof, DOES HEREBY CERTIFY:
The Securities Issuance Committee (the “Committee”) of the board of directors of the Corporation (the “Board of Directors”), in
accordance with the resolutions of the Board of Directors dated April 6, 2005, the provisions of the amended and restated certificate of incorporation
and bylaws of the Corporation and applicable law, by unanimous written consent dated April 18, 2005, adopted the following resolution creating a seriesof 50,000 shares of Preferred Stock of the Corporation designated as “Floating Rate Non-Cumulative Preferred Stock, Series A”.
RESOLVED, that pursuant to the authority vested in the Committee and in accordance with the resolutions of the Board of Directors
dated April 6, 2005, the provisions of the amended and restated certificate of incorporation and bylaws of the Corporation and applicable law, a series ofPreferred Stock, par value $.01 per share, of the Corporation be and hereby is created, and that the designation and number of shares of such series, andthe voting and other powers, preferences and relative, participating, optional or other rights, and the qualifications, limitations and restrictions thereof, ofthe shares of such series, are as follows:
Section 1. Designation. The distinctive serial designation of such series of Preferred Stock is “Floating Rate Non-Cumulative Preferred
Stock, Series A” (“Series A”). Each share of Series A shall be identical in all respects to every other share of Series A, except as to the respective dates
from which dividends thereon shall accrue, to the extent such dates may differ as permitted pursuant to Section 4(a) below.
Section 2. Number of Shares. The authorized number of shares of Series A shall be 50,000. Shares of Series A that are redeemed,purchased or otherwise acquired by the Corporation, or converted into another series of Preferred Stock, shall be cancelled and shall revert to authorized
but unissued shares of Series A.
Section 3. Definitions. As used herein with respect to Series A:(a) “Board of Directors” means the board of directors of the Corporation.

(b) “ByLaws” means the amended and restated bylaws of the Corporation, as they may be amended from time to time.
(c) “Business Day” means a day that is a Monday, Tuesday, Wednesday, Thursday or Friday and is not a day on which banking
institutions in New York City generally are authorized or obligated by law, regulation or executive order to close.
(d) “Calculation Agent” means, at any time, the person or entity appointed by the Corporation and serving as such agent at such time. The
Corporation may terminate any such appointment and may appoint a successor agent at any time and from time to time, provided that the
Corporation shall use its best efforts to ensure that there is, at all relevant times when the Series A is outstanding, a person or entity appointed
and serving as such agent. The Calculation Agent may be a person or entity affiliated with the Corporation.
(e) “Certificate of Designations” means this Certificate of Designations relating to the Series A, as it may be amended from time to time.
(f) “Certification of Incorporation” shall mean the amended and restated certificate of incorporation of the Corporation, as it may beamended from time to time, and shall include this Certificate of Designations.
(g) “Common Stock” means the common stock, par value $0.01 per share, of the Corporation.
(h) “Junior Stock” means the Common Stock and any other class or series of stock of the Corporation (other than Series A) that ranks
junior to Series A either or both as to the payment of dividends and/or as to the distribution of assets on any liquidation, dissolution or winding
up of the Corporation.
(i) “London Business Day” means a day that is a Monday, Tuesday, Wednesday, Thursday or Friday and is a day on which dealings in
U.S. dollars are transacted in the London interbank market.
(j) “Moneyline Telerate Page” means the display on Moneyline Telerate, Inc., or any successor service, on the page or pages specified in
Section 4 below or any replacement page or pages on that service.
(k) “Parity Stock” means any class or series of stock of the Corporation (other than Series A) that ranks equally with Series A both in thepayment of dividends and in the distribution of assets on any liquidation, dissolution or winding up of the Corporation.
(l) “Preferred Stock” means any and all series of Preferred Stock, having a par value of $0.01 per share, of the Corporation, including theSeries A.
A-2

(m) “Representative Amount” means, at any time, an amount that, in the Calculation Agent’s judgment, is representative of a single
transaction in the relevant market at the relevant time.
(n) “Voting Preferred Stock” means, with regard to any election or removal of a Preferred Stock Director (as defined in Section 8(b)below) or any other matter as to which the holders of Series A are entitled to vote as specified in Section 8 of this Certificate of Designations,any and all series of Preferred Stock (other than Series A) that rank equally with Series A either as to the payment of dividends or as to the
distribution of assets upon liquidation, dissolution or winding up of the Corporation and upon which like voting rights have been conferred andare exercisable with respect to such matter.
Section 4. Dividends.
(a) Rate. Holders of Series A shall be entitled to receive, when, as and if declared by the Board of Directors or the Committee (or another
duly authorized committee of the Board of Directors) out of funds legally available for the payment of dividends under Delaware law, non-cumulative
cash dividends at the rate determined as set forth below in this Section (4) applied to the liquidation preference amount of $25,000 per share of Series A.
Such dividends shall be payable quarterly in arrears (as provided below in this Section 4(a)), but only when, as and if declared by the Board of Directors
or the Committee (or another duly authorized committee of the Board of Directors), on February 10, May 10, August 10 and November 10 (“Dividend
Payment Dates”), commencing on August 10, 2005; provided that if any such Dividend Payment Date would otherwise occur on a day that is not a
Business Day, such Dividend Payment Date shall instead be (and any dividend payable on Series A on such Dividend Payment Date shall instead bepayable on) the immediately succeeding Business Day, unless such immediately succeeding Business Day falls in the next calendar month, in whichcase such Dividend Payment Date shall instead be (and any such dividend shall instead be payable on) the immediately preceding Business Day.
Dividends on Series A shall not be cumulative; holders of Series A shall not be entitled to receive any dividends not declared by the Board of Directors
or the Committee (or another duly authorized committee of the Board of Directors) and no interest, or sum of money in lieu of interest, shall be payable
in respect of any dividend not so declared.
Dividends that are payable on Series A on any Dividend Payment Date will be payable to holders of record of Series A as they appear on
the stock register of the Corporation on the applicable record date, which shall be the 15th calendar day before such Dividend Payment Date or suchother record date fixed by the Board of Directors or the Committee (or another duly authorized committee of the Board of Directors) that is not morethan 60 nor less than 10 days prior to such Dividend Payment Date (each, a “Dividend Record Date”). Any such day that is a Dividend Record Dateshall be a Dividend Record Date whether or not such day is a Business Day.
A-3

Each dividend period (a “Dividend Period”) shall commence on and include a Dividend Payment Date (other than the initial Dividend
Period, which shall commence on and include the date of original issue of the Series A, provided that, for any share of Series A issued after suchoriginal issue date, the initial Dividend Period for such shares may commence on and include such other date as the Board of Directors or theCommittee (or another duly authorized committee of the Board of Directors) shall determine and publicly disclose) and shall end on and include thecalendar day next preceding the next Dividend Payment Date. Dividends payable on the Series A in respect of any Dividend Period shall be computedby the Calculation Agent on the basis of a 360-day year and the actual number of days elapsed in such Dividend Period. Dividends payable in respect ofa Dividend Period shall be payable in arrears - i.e., on the first Dividend Payment Date after such Dividend Period.
The dividend rate on the Series A, for each Dividend Period, shall be a rate per annum equal to the greater of (1) 0.75% above LIBOR (asdefined below) for such Dividend Period and (2) 3.75%. LIBOR, with respect to any Dividend Period, means the offered rate expressed as a percentage
per annum for three-month deposits in U.S. dollars on the first day of such Dividend Period, as that rate appears on Moneyline Telerate Page 3750 as of
11:00 A.M., London time, on the second London Business Day immediately preceding the first day of such Dividend Period.
If the rate described in the preceding paragraph does not appear on Moneyline Telerate Page 3750, LIBOR shall be determined on thebasis of the rates, at approximately 11:00 A.M., London time, on the second London Business Day immediately preceding the first day of such Dividend
Period, at which deposits of the following kind are offered to prime banks in the London interbank market by four major banks in that market selectedby the Calculation Agent: three-month deposits in U.S. dollars, beginning on the first day of such Dividend Period, and in a Representative Amount.
The Calculation Agent shall request the principal London office of each of these banks to provide a quotation of its rate at approximately 11:00 A.M.,
London time. If at least two quotations are provided, LIBOR for such Dividend Period shall be the arithmetic mean of such quotations.
If fewer than two quotations are provided as described in the preceding paragraph, LIBOR for such Dividend Period shall be the arithmetic
mean of the rates for loans of the following kind to leading European banks quoted, at approximately 11:00 A.M. New York City time, on the second
London Business Day immediately preceding the first day of such Dividend Period, by three major banks in New York City selected by the Calculation
Agent: three-month loans of U.S. dollars, beginning on the first day of such Dividend Period, and in a Representative Amount.
If fewer than three banks selected by the Calculation Agent are quoting as described in the preceding paragraph, LIBOR for such Dividend
Period shall be LIBOR in effect for the prior Dividend Period.
The Calculation Agent’s determination of any dividend rate, and its calculation of the amount of dividends for any Dividend Period, will
be maintained on file at the Corporation’s principal offices and will be available to any stockholder upon request and will be final and binding in theabsence of manifest error.
A-4

Holders of Series A shall not be entitled to any dividends, whether payable in cash, securities or other property, other than dividends (ifany) declared and payable on the Series A as specified in this Section 4 (subject to the other provisions of this Certificate of Designations).
(b) Priority of Dividends. So long as any share of Series A remains outstanding, no dividend shall be declared or paid on the Common
Stock or any other shares of Junior Stock (other than a dividend payable solely in Junior Stock), and no Common Stock or other Junior Stock shall bepurchased, redeemed or otherwise acquired for consideration by the Corporation, directly or indirectly (other than as a result of a reclassification of
Junior Stock for or into other Junior Stock, or the exchange or conversion of one share of Junior Stock for or into another share of Junior Stock andother than through the use of the proceeds of a substantially contemporaneous sale of Junior Stock) during a Dividend Period, unless the full dividends
for the latest completed Dividend Period on all outstanding shares of Series A have been declared and paid (or declared and a sum sufficient for thepayment thereof has been set aside). The foregoing provision shall not restrict the ability of Goldman, Sachs & Co., or any other affiliate of the
Corporation, to engage in any market-making transactions in Junior Stock in the ordinary course of business.
When dividends are not paid (or declared and a sum sufficient for payment thereof set aside) on any Dividend Payment Date (or, in thecase of Parity Stock having dividend payment dates different from the Dividend Payment Dates, on a dividend payment date falling within a Dividend
Period) in full upon the Series A and any shares of Parity Stock, all dividends declared on the Series A and all such Parity Stock and payable on such
Dividend Payment Date (or, in the case of parity stock having dividend payment dates different from the Dividend Payment Dates, on a dividend
payment date falling within the Dividend Period related to such Dividend Payment Date) shall be declared pro rata so that the respective amounts ofsuch dividends shall bear the same ratio to each other as all accrued but unpaid dividends per share on the Series A and all Parity Stock payable on such
Dividend Payment Date (or, in the case of Parity Stock having dividend payment dates different from the Dividend Payment Dates, on a dividend
payment date falling within the Dividend Period related to such Dividend Payment Date) bear to each other.
Subject to the foregoing, such dividends (payable in cash, securities or other property) as may be determined by the Board of Directors or
the Committee (or another duly authorized committee of the Board of Directors) may be declared and paid on any securities, including Common Stockand other Junior Stock, from time to time out of any funds legally available for such payment, and the Series A shall not be entitled to participate in any
such dividends.
Section 5. Liquidation Rights.
(a) Voluntary or Involuntary Liquidation. In the event of any liquidation, dissolution or winding up of the affairs of the Corporation,
whether voluntary or involuntary, holders of Series A shall be entitled to receive, out of the assets of the Corporation or proceeds thereof (whether
capital or surplus) available for distribution to
A-5

stockholders of the Corporation, and after satisfaction of all liabilities and obligations to creditors of the Corporation, before any distribution of such
assets or proceeds is made to or set aside for the holders of Common Stock and any other stock of the Corporation ranking junior to the Series A as tosuch distribution, in full an amount equal to $25,000 per share (the “Series A Liquidation Amount”), together with an amount equal to all dividends (ifany) that have been declared but not paid prior to the date of payment of such distribution (but without any amount in respect of dividends that have notbeen declared prior to such payment date).
(b) Partial Payment. If in any distribution described in Section 5(a) above the assets of the Corporation or proceeds thereof are notsufficient to pay the Liquidation Preferences (as defined below) in full to all holders of Series A and all holders of any stock of the Corporation ranking
equally with the Series A as to such distribution, the amounts paid to the holders of Series A and to the holders of all such other stock shall be paid pro
rata in accordance with the respective aggregate Liquidation Preferences of the holders of Series A and the holders of all such other stock. In any such
distribution, the “Liquidation Preference” of any holder of stock of the Corporation shall mean the amount otherwise payable to such holder in such
distribution (assuming no limitation on the assets of the Corporation available for such distribution), including an amount equal to any declared but
unpaid dividends (and, in the case of any holder of stock other than Series A and on which dividends accrue on a cumulative basis, an amount equal toany unpaid, accrued, cumulative dividends, whether or not declared, as applicable).
(c) Residual Distributions. If the Liquidation Preference has been paid in full to all holders of Series A, the holders of other stock of the
Corporation shall be entitled to receive all remaining assets of the Corporation (or proceeds thereof) according to their respective rights and preferences.
(d) Merger, Consolidation and Sale of Assets Not Liquidation. For purposes of this Section 5, the merger or consolidation of the
Corporation with any other corporation or other entity, including a merger or consolidation in which the holders of Series A receive cash, securities orother property for their shares, or the sale, lease or exchange (for cash, securities or other property) of all or substantially all of the assets of the
Corporation, shall not constitute a liquidation, dissolution or winding up of the Corporation.
Section 6. Redemption.
(a) Optional Redemption. The Series A may not be redeemed by the Corporation prior to April 25, 2010. On or after April 25, 2010, theCorporation, at its option, may redeem, in whole at any time or in part from time to time, the shares of Series A at the time outstanding, upon noticegiven as provided in Section 6(c) below, at a redemption price equal to $25,000 per share, together (except as otherwise provided herein below) with anamount equal to any dividends that have been declared but not paid prior to the redemption date (but with no amount in respect of any dividends thathave not been declared prior to such date). The redemption price for any shares of Series A shall be payable on the redemption date to the holder of suchshares against surrender of theA-6

certificate(s) evidencing such shares to the Corporation or its agent. Any declared but unpaid dividends payable on a redemption date that occurs
subsequent to the Dividend Record Date for a Dividend Period shall not be paid to the holder entitled to receive the redemption price on the redemption
date, but rather shall be paid to the holder of record of the redeemed shares on such Dividend Record Date relating to the Dividend Payment Date asprovided in Section 4 above.
(b) No Sinking Fund. The Series A will not be subject to any mandatory redemption, sinking fund or other similar provisions. Holders ofSeries A will have no right to require redemption of any shares of Series A.
(c) Notice of Redemption. Notice of every redemption of shares of Series A shall be given by first class mail, postage prepaid, addressedto the holders of record of the shares to be redeemed at their respective last addresses appearing on the books of the Corporation. Such mailing shall be
at least 30 days and not more than 60 days before the date fixed for redemption. Any notice mailed as provided in this Subsection shall be conclusively
presumed to have been duly given, whether or not the holder receives such notice, but failure duly to give such notice by mail, or any defect in such
notice or in the mailing thereof, to any holder of shares of Series A designated for redemption shall not affect the validity of the proceedings for theredemption of any other shares of Series A. Notwithstanding the foregoing, if the Series A or any depositary shares representing interests in the Series A
are issued in book-entry form through The Depository Trust Company or any other similar facility, notice of redemption may be given to the holders ofSeries A at such time and in any manner permitted by such facility. Each such notice given to a holder shall state: (1) the redemption date; (2) the
number of shares of Series A to be redeemed and, if less than all the shares held by such holder are to be redeemed, the number of such shares to beredeemed from such holder; (3) the redemption price; and (4) the place or places where certificates for such shares are to be surrendered for payment of
the redemption price.
(d) Partial Redemption. In case of any redemption of only part of the shares of Series A at the time outstanding, the shares to beredeemed shall be selected either pro rata or in such other manner as the Corporation may determine to be fair and equitable. Subject to the provisions
hereof, the Corporation shall have full power and authority to prescribe the terms and conditions upon which shares of Series A shall be redeemed fromtime to time. If fewer than all the shares represented by any certificate are redeemed, a new certificate shall be issued representing the unredeemedshares without charge to the holder thereof.
(e) Effectiveness of Redemption. If notice of redemption has been duly given and if on or before the redemption date specified in thenotice all funds necessary for the redemption have been set aside by the Corporation, separate and apart from its other funds, in trust for the pro rata
benefit of the holders of the shares called for redemption, so as to be and continue to be available therefor, then, notwithstanding that any certificate forany share so called for redemption has not been surrendered for cancellation, on and after the redemption date dividends shall cease to accrue on all
shares so called for redemption, all shares so called for redemption shall no longer be deemedA-7

outstanding and all rights with respect to such shares shall forthwith on such redemption date cease and terminate, except only the right of the holders
thereof to receive the amount payable on such redemption, without interest. Any funds unclaimed at the end of three years from the redemption dateshall, to the extent permitted by law, be released to the Corporation, after which time the holders of the shares so called for redemption shall look only to
the Corporation for payment of the redemption price of such shares.
Section 7. Conversion Upon Regulatory Changes. If both (i) and (ii) below occur:(i) after the date of the issuance of the Series A, the Corporation (by election or otherwise) becomes subject to any law, rule, regulation or
guidance (together, “Regulations”) relating to its capital adequacy, which Regulation (x) modifies the existing requirements for treatment as
Allowable Capital (as defined under the Securities and Exchange Commission rules relating to consolidated supervised entities as in effect fromtime to time), (y) provides for a type or level of capital characterized as “Tier 1” or its equivalent pursuant to Regulations of any governmental
agency, authority or other body having regulatory jurisdiction over the Corporation (or any of its subsidiaries or consolidated affiliates) and
implementing the capital standards published by the Basel Committee on Banking Supervision, the Securities and Exchange Commission, theBoard of Governors of the Federal Reserve System or any other United States national governmental agency, authority or other body, or any
other applicable regime based on capital standards published by the Basel Committee on Banking Supervision or its successor, or (z) provides
for a type or level of capital that in the judgment of the Corporation (after consultation with legal counsel of recognized standing) is substantiallyequivalent to such “Tier 1” capital (such capital described in either (y) or (z) above is referred to below as “Tier 1 Capital Equivalent”), and(ii) the Corporation affirmatively elects to qualify the Series A for treatment as Allowable Capital or Tier 1 Capital Equivalent without any
sublimit or other quantitative restriction on the inclusion of the Series A in Allowable Capital or Tier 1 Capital Equivalent (other than any
limitation the Corporation elects to accept and any limitation requiring that common equity or a specified form of common equity constitute thedominant form of Allowable Capital or Tier 1 Capital Equivalent) under such Regulations,then, upon such affirmative election, the Series A shall be convertible at the Corporation’s option into a new series of Preferred Stock having terms andprovisions substantially identical to those of the Series A, except that such new series may have such additional or modified rights, preferences,privileges and voting powers, and limitations and restrictions thereof, as are necessary in the judgment of the Board of Directors or the Committee (oranother duly authorized committee of the Board of Directors) (after consultation with legal counsel of recognized standing) to comply with the Required
Unrestricted Capital Provisions (as defined below), provided that the Corporation will not cause any such conversion unless the Board of Directors or
the Committee (or another duly authorized committee of the Board of Directors) determines that the rights, preferences, privileges andA-8

voting powers, and the qualifications, limitations and restrictions thereof, of such new series of Preferred Stock, taken as a whole, are not materially lessfavorable to the holders thereof than the rights, preferences, privileges and voting powers, and the qualifications, limitations and restrictions thereof, of
the Series A, taken as a whole.
As used above, the term “Required Unrestricted Capital Provisions” means such terms and provisions as are, in the judgment of the
Corporation (after consultation with counsel of recognized standing), required for preferred stock to be treated as Allowable Capital or Tier 1 Capital
Equivalent, as applicable, without any sublimit or other quantitative restriction on the inclusion of such preferred stock in Allowable Capital or Tier 1
Capital Equivalent, as applicable (other than any limitation the Corporation elects to accept and any limitation requiring that common equity or a
specified form of common equity constitute the dominant form of Allowable Capital or Tier 1 Capital Equivalent) pursuant to the applicable
Regulations.
The Corporation shall provide notice to the holders of Series A of any election to qualify the Series A for Allowable Capital or Tier 1
Capital Equivalent treatment and of any determination to convert the Series A into a new series of Preferred Stock pursuant to the terms of thisSection 7, promptly upon the effectiveness of any such election or determination. A copy of such notice and of the relevant Regulations shall bemaintained on file at the principal offices of the Corporation and, upon request, will be made available to any stockholder of the Corporation. Any
conversion of the Series A pursuant to this Section 7 shall be effected pursuant to such procedures as the Corporation may determine and publicly
disclose.
Except as specified in this Section 7, holders of Series A shares shall have no right to exchange or convert such shares into any othersecurities.
Section 8. Voting Rights.
(a) General. The holders of Series A shall not have any voting rights except as set forth below or as otherwise from to time required bylaw.
(b) Right To Elect Two Directors Upon Nonpayment Events. If and whenever dividends on any shares of Series A shall not have been
declared and paid for at least six Dividend Periods, whether or not consecutive (a “Nonpayment Event”), the number of directors then constituting theBoard of Directors shall automatically be increased by two and the holders of Series A, together with the holders of any outstanding shares of Voting
Preferred Stock, voting together as a single class, shall be entitled to elect the two additional directors (the “Preferred Stock Directors”), provided that itshall be a qualification for election for any such Preferred Stock Director that the election of such director shall not cause the Corporation to violate thecorporate governance requirement of the New York Stock Exchange (or any other securities exchange or other trading facility on which securities of the
Corporation may then be listed or traded) that listed or traded companies must have a majority of independent directors.
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In the event that the holders of the Series A, and such other holders of Voting Preferred Stock, shall be entitled to vote for the election of
the Preferred Stock Directors following a Nonpayment Event, such directors shall be initially elected following such Nonpayment Event only at a
special meeting called at the request of the holders of record of at least 20% of the Series A or of any other series of Voting Preferred Stock thenoutstanding (unless such request for a special meeting is received less than 90 days before the date fixed for the next annual or special meeting of thestockholders of the Corporation, in which event such election shall be held only at such next annual or special meeting of stockholders), and at eachsubsequent annual meeting of stockholders of the Corporation. Such request to call a special meeting for the initial election of the Preferred Stock
Directors after a Nonpayment Event shall be made by written notice, signed by the requisite holders of Series A or Voting Preferred Stock, anddelivered to the Secretary of the Corporation in such manner as provided for in Section 10 below, or as may otherwise be required by law.
When dividends have been paid (or declared and a sum sufficient for payment thereof set aside) in full on the Series A for at least four
Dividend Periods (whether or not consecutive) after a Nonpayment Event, then the right of the holders of Series A to elect the Preferred Stock Directors
shall cease (but subject always to revesting of such voting rights in the case of any future Nonpayment Event), and, if and when any rights of holders ofSeries A and Voting Preferred Stock to elect the Preferred Stock Directors shall have ceased, the terms of office of all the Preferred Stock Directors shallforthwith terminate and the number of directors constituting the Board of Directors shall automatically be reduced accordingly.
Any Preferred Stock Director may be removed at any time without cause by the holders of record of a majority of the outstanding sharesof the Series A and Voting Preferred Stock, when they have the voting rights described above (voting together as a single class). So long as a
Nonpayment Event shall continue, any vacancy in the office of a Preferred Stock Director (other than prior to the initial election of Preferred Stock
Directors after a Nonpayment Event) may be filled by the written consent of the Preferred Stock Director remaining in office, or if none remains in
office, by a vote of the holders of record of a majority of the outstanding shares of the Series A and all Voting Preferred Stock, when they have thevoting rights described above (voting together as a single class). Any such vote of stockholders to remove, or to fill a vacancy in the office of, aPreferred Stock Director may be taken only at a special meeting of such stockholders, called as provided above for an initial election of Preferred Stock
Director after a Nonpayment Event (unless such request is received less than 90 days before the date fixed for the next annual or special meeting of thestockholders, in which event such election shall be held at such next annual or special meeting of stockholders). The Preferred Stock Directors shalleach be entitled to one vote per director on any matter that shall come before the Board of Directors for a vote. Each Preferred Stock Director elected atany special meeting of stockholders or by written consent of the other Preferred Stock Director shall hold office until the next annual meeting of thestockholders if such office shall not have previously terminated as above provided.
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(c) Other Voting Rights. So long as any shares of Series A are outstanding, in addition to any other vote or consent of stockholders
required by law or by the Certificate of Incorporation, the vote or consent of the holders of at least 662⁄3% of the shares of Series A and any Voting
Preferred Stock at the time outstanding and entitled to vote thereon, voting together as a single class, given in person or by proxy, either in writing
without a meeting or by vote at any meeting called for the purpose, shall be necessary for effecting or validating:(i) Authorization of Senior Stock. Any amendment or alteration of the Certificate of Incorporation to authorize or create, or increase theauthorized amount of, any shares of any class or series of capital stock of the Corporation ranking senior to the Series A with respect to either orboth the payment of dividends and/or the distribution of assets on any liquidation, dissolution or winding up of the Corporation;(ii) Amendment of Series A. Any amendment, alteration or repeal of any provision of the Certificate of Incorporation so as to materiallyand adversely affect the special rights, preferences, privileges or voting powers of the Series A, taken as a whole; or(iii) Share Exchanges, Reclassifications, Mergers and Consolidations. Any consummation of a binding share exchange orreclassification involving the Series A, or of a merger or consolidation of the Corporation with another corporation or other entity, unless in eachcase (x) the shares of Series A remain outstanding or, in the case of any such merger or consolidation with respect to which the Corporation is
not the surviving or resulting entity, are converted into or exchanged for preference securities of the surviving or resulting entity or its ultimate
parent, and (y) such shares remaining outstanding or such preference securities, as the case may be, have such rights, preferences, privileges andvoting powers, and limitations and restrictions thereof, taken as a whole, as are not materially less favorable to the holders thereof than therights, preferences, privileges and voting powers, and limitations and restrictions thereof, of the Series A immediately prior to suchconsummation, taken as a whole;provided, however, that for all purposes of this Section 8(c), any increase in the amount of the authorized or issued Series A or authorized Preferred
Stock, or the creation and issuance, or an increase in the authorized or issued amount, of any other series of Preferred Stock ranking equally with and/or
junior to the Series A with respect to the payment of dividends (whether such dividends are cumulative or non-cumulative) and/or the distribution ofassets upon liquidation, dissolution or winding up of the Corporation will not be deemed to adversely affect the special rights, preferences, privileges orvoting powers of the Series A. In addition, any conversion of the Series A pursuant to Section 7 above shall not be deemed to adversely affect the rights,
preferences, privileges and voting powers of the Series A.
If any amendment, alteration, repeal, share exchange, reclassification, merger or consolidation specified in this Section 8(c) would
adversely affect the Series A and one or more but not all other series of Preferred Stock, then only the Series A and such series of Preferred Stock as areadversely affected by and entitled to vote on the matter shall vote on the matter together as a single class (in lieu of all other series of Preferred Stock).
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(d) Changes for Clarification. Without the consent of the holders of the Series A, so long as such action does not adversely affect the
special rights, preferences, privileges and voting powers, and limitations and restrictions thereof, of the Series A, the Corporation may amend, alter,
supplement or repeal any terms of the Series A:(i) to cure any ambiguity, or to cure, correct or supplement any provision contained in this Certificate of Designations that may be
defective or inconsistent; or(ii) to make any provision with respect to matters or questions arising with respect to the Series A that is not inconsistent with theprovisions of this Certificate of Designations.
(e) Changes after Provision for Redemption. No vote or consent of the holders of Series A shall be required pursuant to Section 8(b), (c)or (d) above if, at or prior to the time when any such vote or consent would otherwise be required pursuant to such Section, all outstanding shares ofSeries A shall have been redeemed, or shall have been called for redemption upon proper notice and sufficient funds shall have been set aside for such
redemption, in each case pursuant to Section 6 above.
(f) Procedures for Voting and Consents. The rules and procedures for calling and conducting any meeting of the holders of Series A(including, without limitation, the fixing of a record date in connection therewith), the solicitation and use of proxies at such a meeting, the obtaining of
written consents and any other aspect or matter with regard to such a meeting or such consents shall be governed by any rules the Board of Directors or
the Committee (or another duly authorized committee of the Board of Directors), in its discretion, may adopt from time to time, which rules andprocedures shall conform to the requirements of the Certificate of Incorporation, the Bylaws, applicable law and any national securities exchange orother trading facility on which the Series A is listed or traded at the time. Whether the vote or consent of the holders of a plurality, majority or otherportion of the shares of Series A and any Voting Preferred Stock has been cast or given on any matter on which the holders of shares of Series A are
entitled to vote shall be determined by the Corporation by reference to the specified liquidation amounts of the shares voted or covered by the consent.
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Section 9. Record Holders. To the fullest extent permitted by applicable law, the Corporation and the transfer agent for the Series A may
deem and treat the record holder of any share of Series A as the true and lawful owner thereof for all purposes, and neither the Corporation nor suchtransfer agent shall be affected by any notice to the contrary.
Section 10. Notices. All notices or communications in respect of Series A shall be sufficiently given if given in writing and delivered inperson or by first class mail, postage prepaid, or if given in such other manner as may be permitted in this Certificate of Designations, in the Certificate
of Incorporation or Bylaws or by applicable law.
Section 11. No Preemptive Rights. No share of Series A shall have any rights of preemption whatsoever as to any securities of the
Corporation, or any warrants, rights or options issued or granted with respect thereto, regardless of how such securities, or such warrants, rights or
options, may be designated, issued or granted.
Section 12. Other Rights. The shares of Series A shall not have any voting powers, preferences or relative, participating, optional or otherspecial rights, or qualifications, limitations or restrictions thereof, other than as set forth herein or in the Certificate of Incorporation or as provided byapplicable law.

A-13

Appendix B
CERTIFICATE OF DESIGNATIONSOFFLOATING RATE NON-CUMULATIVE PREFERRED STOCK, SERIES C
OF
THE GOLDMAN SACHS GROUP, INC.
THE GOLDMAN SACHS GROUP, INC., a corporation organized and existing under the General Corporation Law of the State of
Delaware (the “Corporation”), in accordance with the provisions of Sections 103 and 151 thereof, DOES HEREBY CERTIFY:
The Securities Issuance Committee (the “Committee”) of the board of directors of the Corporation (the “Board of Directors”), in
accordance with the resolutions of the Board of Directors dated September 16, 2005, the provisions of the amended and restated certificate ofincorporation and bylaws of the Corporation and applicable law, by unanimous written consent dated October 25, 2005, adopted the following
resolution creating a series of 25,000 shares of Preferred Stock of the Corporation designated as “Floating Rate Non-Cumulative Preferred Stock, Series
C”.
RESOLVED, that pursuant to the authority vested in the Committee and in accordance with the resolutions of the Board of Directors
dated September 16, 2005, the provisions of the amended and restated certificate of incorporation and bylaws of the Corporation and applicable law, aseries of Preferred Stock, par value $.01 per share, of the Corporation be and hereby is created, and that the designation and number of shares of suchseries, and the voting and other powers, preferences and relative, participating, optional or other rights, and the qualifications, limitations andrestrictions thereof, of the shares of such series, are as follows:
Section 1. Designation. The distinctive serial designation of such series of Preferred Stock is “Floating Rate Non-Cumulative Preferred
Stock, Series C” (“Series C”). Each share of Series C shall be identical in all respects to every other share of Series C, except as to the respective dates
from which dividends thereon shall accrue, to the extent such dates may differ as permitted pursuant to Section 4(a) below.
Section 2. Number of Shares. The authorized number of shares of Series C shall be 25,000. Shares of Series C that are redeemed,purchased or otherwise acquired by the Corporation, or converted into another series of Preferred Stock, shall be cancelled and shall revert to authorized
but unissued shares of Series C.
Section 3. Definitions. As used herein with respect to Series C:(a) “Board of Directors” means the board of directors of the Corporation.

(b) “ByLaws” means the amended and restated bylaws of the Corporation, as they may be amended from time to time.
(c) “Business Day” means a day that is a Monday, Tuesday, Wednesday, Thursday or Friday and is not a day on which banking
institutions in New York City generally are authorized or obligated by law, regulation or executive order to close.
(d) “Calculation Agent” means, at any time, the person or entity appointed by the Corporation and serving as such agent at such time. The
Corporation may terminate any such appointment and may appoint a successor agent at any time and from time to time, provided that the
Corporation shall use its best efforts to ensure that there is, at all relevant times when the Series C is outstanding, a person or entity appointed
and serving as such agent. The Calculation Agent may be a person or entity affiliated with the Corporation.
(e) “Certificate of Designations” means this Certificate of Designations relating to the Series C, as it may be amended from time to time.
(f) “Certification of Incorporation” shall mean the amended and restated certificate of incorporation of the Corporation, as it may beamended from time to time, and shall include this Certificate of Designations.
(g) “Common Stock” means the common stock, par value $0.01 per share, of the Corporation.
(h) “Junior Stock” means the Common Stock and any other class or series of stock of the Corporation (other than Series C) that ranks
junior to Series C either or both as to the payment of dividends and/or as to the distribution of assets on any liquidation, dissolution or winding
up of the Corporation.
(i) “London Business Day” means a day that is a Monday, Tuesday, Wednesday, Thursday or Friday and is a day on which dealings in
U.S. dollars are transacted in the London interbank market.
(j) “Moneyline Telerate Page” means the display on Moneyline Telerate, Inc., or any successor service, on the page or pages specified in
Section 4 below or any replacement page or pages on that service.
(k) “Parity Stock” means any class or series of stock of the Corporation (other than Series C) that ranks equally with Series C both in thepayment of dividends and in the distribution of assets on any liquidation, dissolution or winding up of the Corporation.
(l) “Preferred Stock” means any and all series of Preferred Stock, having a par value of $0.01 per share, of the Corporation, including theSeries C.
B-2

(m) “Representative Amount” means, at any time, an amount that, in the Calculation Agent’s judgment, is representative of a single
transaction in the relevant market at the relevant time.
(n) “Voting Preferred Stock” means, with regard to any election or removal of a Preferred Stock Director (as defined in Section 8(b)below) or any other matter as to which the holders of Series C are entitled to vote as specified in Section 8 of this Certificate of Designations,any and all series of Preferred Stock (other than Series C) that rank equally with Series C either as to the payment of dividends or as to the
distribution of assets upon liquidation, dissolution or winding up of the Corporation and upon which like voting rights have been conferred andare exercisable with respect to such matter.
Section 4. Dividends.
(a) Rate. Holders of Series C shall be entitled to receive, when, as and if declared by the Board of Directors or the Committee (or another
duly authorized committee of the Board of Directors) out of funds legally available for the payment of dividends under Delaware law, non-cumulative
cash dividends at the rate determined as set forth below in this Section (4) applied to the liquidation preference amount of $25,000 per share of Series C.
Such dividends shall be payable quarterly in arrears (as provided below in this Section 4(a)), but only when, as and if declared by the Board of Directors
or the Committee (or another duly authorized committee of the Board of Directors), on February 10, May 10, August 10 and November 10 (“Dividend
Payment Dates”), commencing on February 10, 2006; provided that if any such Dividend Payment Date would otherwise occur on a day that is not a
Business Day, such Dividend Payment Date shall instead be (and any dividend payable on Series C on such Dividend Payment Date shall instead bepayable on) the immediately succeeding Business Day, unless such immediately succeeding Business Day falls in the next calendar month, in whichcase such Dividend Payment Date shall instead be (and any such dividend shall instead be payable on) the immediately preceding Business Day.
Dividends on Series C shall not be cumulative; holders of Series C shall not be entitled to receive any dividends not declared by the Board of Directors
or the Committee (or another duly authorized committee of the Board of Directors) and no interest, or sum of money in lieu of interest, shall be payable
in respect of any dividend not so declared.
Dividends that are payable on Series C on any Dividend Payment Date will be payable to holders of record of Series C as they appear on
the stock register of the Corporation on the applicable record date, which shall be the 15th calendar day before such Dividend Payment Date or suchother record date fixed by the Board of Directors or the Committee (or another duly authorized committee of the Board of Directors) that is not morethan 60 nor less than 10 days prior to such Dividend Payment Date (each, a “Dividend Record Date”). Any such day that is a Dividend Record Dateshall be a Dividend Record Date whether or not such day is a Business Day.
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Each dividend period (a “Dividend Period”) shall commence on and include a Dividend Payment Date (other than the initial Dividend
Period, which shall commence on and include the date of original issue of the Series C, provided that, for any share of Series C issued after such originalissue date, the initial Dividend Period for such shares may commence on and include such other date as the Board of Directors or the Committee (oranother duly authorized committee of the Board of Directors) shall determine and publicly disclose) and shall end on and include the calendar day next
preceding the next Dividend Payment Date. Dividends payable on the Series C in respect of any Dividend Period shall be computed by the Calculation
Agent on the basis of a 360-day year and the actual number of days elapsed in such Dividend Period. Dividends payable in respect of a Dividend Period
shall be payable in arrears - i.e., on the first Dividend Payment Date after such Dividend Period.
The dividend rate on the Series C, for each Dividend Period, shall be a rate per annum equal to the greater of (1) 0.75% above LIBOR (asdefined below) for such Dividend Period and (2) 4.00%. LIBOR, with respect to any Dividend Period, means the offered rate expressed as a percentage
per annum for three-month deposits in U.S. dollars on the first day of such Dividend Period, as that rate appears on Moneyline Telerate Page 3750 as of
11:00 A.M., London time, on the second London Business Day immediately preceding the first day of such Dividend Period.
If the rate described in the preceding paragraph does not appear on Moneyline Telerate Page 3750, LIBOR shall be determined on thebasis of the rates, at approximately 11:00 A.M., London time, on the second London Business Day immediately preceding the first day of such Dividend
Period, at which deposits of the following kind are offered to prime banks in the London interbank market by four major banks in that market selectedby the Calculation Agent: three-month deposits in U.S. dollars, beginning on the first day of such Dividend Period, and in a Representative Amount.
The Calculation Agent shall request the principal London office of each of these banks to provide a quotation of its rate at approximately 11:00 A.M.,
London time. If at least two quotations are provided, LIBOR for such Dividend Period shall be the arithmetic mean of such quotations.
If fewer than two quotations are provided as described in the preceding paragraph, LIBOR for such Dividend Period shall be the arithmetic
mean of the rates for loans of the following kind to leading European banks quoted, at approximately 11:00 A.M. New York City time, on the second
London Business Day immediately preceding the first day of such Dividend Period, by three major banks in New York City selected by the Calculation
Agent: three-month loans of U.S. dollars, beginning on the first day of such Dividend Period, and in a Representative Amount.
If fewer than three banks selected by the Calculation Agent are quoting as described in the preceding paragraph, LIBOR for such Dividend
Period shall be LIBOR in effect for the prior Dividend Period.
The Calculation Agent’s determination of any dividend rate, and its calculation of the amount of dividends for any Dividend Period, will
be maintained on file at the Corporation’s principal offices and will be available to any stockholder upon request and will be final and binding in theabsence of manifest error.
B-4

Holders of Series C shall not be entitled to any dividends, whether payable in cash, securities or other property, other than dividends (ifany) declared and payable on the Series C as specified in this Section 4 (subject to the other provisions of this Certificate of Designations).
(b) Priority of Dividends. So long as any share of Series C remains outstanding, no dividend shall be declared or paid on the Common
Stock or any other shares of Junior Stock (other than a dividend payable solely in Junior Stock), and no Common Stock or other Junior Stock shall bepurchased, redeemed or otherwise acquired for consideration by the Corporation, directly or indirectly (other than as a result of a reclassification of
Junior Stock for or into other Junior Stock, or the exchange or conversion of one share of Junior Stock for or into another share of Junior Stock andother than through the use of the proceeds of a substantially contemporaneous sale of Junior Stock) during a Dividend Period, unless the full dividends
for the latest completed Dividend Period on all outstanding shares of Series C have been declared and paid (or declared and a sum sufficient for thepayment thereof has been set aside). The foregoing provision shall not restrict the ability of Goldman, Sachs & Co., or any other affiliate of the
Corporation, to engage in any market-making transactions in Junior Stock in the ordinary course of business.
When dividends are not paid (or declared and a sum sufficient for payment thereof set aside) on any Dividend Payment Date (or, in thecase of Parity Stock having dividend payment dates different from the Dividend Payment Dates, on a dividend payment date falling within a Dividend
Period) in full upon the Series C and any shares of Parity Stock, all dividends declared on the Series C and all such Parity Stock and payable on such
Dividend Payment Date (or, in the case of parity stock having dividend payment dates different from the Dividend Payment Dates, on a dividend
payment date falling within the Dividend Period related to such Dividend Payment Date) shall be declared pro rata so that the respective amounts ofsuch dividends shall bear the same ratio to each other as all accrued but unpaid dividends per share on the Series C and all Parity Stock payable on such
Dividend Payment Date (or, in the case of Parity Stock having dividend payment dates different from the Dividend Payment Dates, on a dividend
payment date falling within the Dividend Period related to such Dividend Payment Date) bear to each other.
Subject to the foregoing, such dividends (payable in cash, securities or other property) as may be determined by the Board of Directors or
the Committee (or another duly authorized committee of the Board of Directors) may be declared and paid on any securities, including Common Stockand other Junior Stock, from time to time out of any funds legally available for such payment, and the Series C shall not be entitled to participate in any
such dividends.
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Section 5. Liquidation Rights.
(a) Voluntary or Involuntary Liquidation. In the event of any liquidation, dissolution or winding up of the affairs of the Corporation,
whether voluntary or involuntary, holders of Series C shall be entitled to receive, out of the assets of the Corporation or proceeds thereof (whether
capital or surplus) available for distribution to stockholders of the Corporation, and after satisfaction of all liabilities and obligations to creditors of the
Corporation, before any distribution of such assets or proceeds is made to or set aside for the holders of Common Stock and any other stock of the
Corporation ranking junior to the Series C as to such distribution, in full an amount equal to $25,000 per share (the “Series C Liquidation Amount”),
together with an amount equal to all dividends (if any) that have been declared but not paid prior to the date of payment of such distribution (but without
any amount in respect of dividends that have not been declared prior to such payment date).
(b) Partial Payment. If in any distribution described in Section 5(a) above the assets of the Corporation or proceeds thereof are notsufficient to pay the Liquidation Preferences (as defined below) in full to all holders of Series C and all holders of any stock of the Corporation ranking
equally with the Series C as to such distribution, the amounts paid to the holders of Series C and to the holders of all such other stock shall be paid pro
rata in accordance with the respective aggregate Liquidation Preferences of the holders of Series C and the holders of all such other stock. In any such
distribution, the “Liquidation Preference” of any holder of stock of the Corporation shall mean the amount otherwise payable to such holder in such
distribution (assuming no limitation on the assets of the Corporation available for such distribution), including an amount equal to any declared but
unpaid dividends (and, in the case of any holder of stock other than Series C and on which dividends accrue on a cumulative basis, an amount equal toany unpaid, accrued, cumulative dividends, whether or not declared, as applicable).
(c) Residual Distributions. If the Liquidation Preference has been paid in full to all holders of Series C, the holders of other stock of the
Corporation shall be entitled to receive all remaining assets of the Corporation (or proceeds thereof) according to their respective rights and preferences.
(d) Merger, Consolidation and Sale of Assets Not Liquidation. For purposes of this Section 5, the merger or consolidation of the
Corporation with any other corporation or other entity, including a merger or consolidation in which the holders of Series C receive cash, securities orother property for their shares, or the sale, lease or exchange (for cash, securities or other property) of all or substantially all of the assets of the
Corporation, shall not constitute a liquidation, dissolution or winding up of the Corporation.
Section 6. Redemption.
(a) Optional Redemption. The Series C may not be redeemed by the Corporation prior to October 31, 2010. On or after October 31,
2010, the Corporation, at its option, may redeem, in whole at any time or in part from time to time, the shares of Series C at the time outstanding, upon
notice given as provided in Section 6(c) below, at a redemption price equal to $25,000 per share, together (except as otherwise provided herein below)
with an amount equal to any dividends that have been declared but not paid prior to the redemption date (but with no amount in respect of any dividends
that have not been declared prior to such date). The redemption price for any shares of Series C shall be payable on the redemption date to the holder ofsuch shares against surrender of the
B-6

certificate(s) evidencing such shares to the Corporation or its agent. Any declared but unpaid dividends payable on a redemption date that occurs
subsequent to the Dividend Record Date for a Dividend Period shall not be paid to the holder entitled to receive the redemption price on the redemption
date, but rather shall be paid to the holder of record of the redeemed shares on such Dividend Record Date relating to the Dividend Payment Date asprovided in Section 4 above.
(b) No Sinking Fund. The Series C will not be subject to any mandatory redemption, sinking fund or other similar provisions. Holders ofSeries C will have no right to require redemption of any shares of Series C.
(c) Notice of Redemption. Notice of every redemption of shares of Series C shall be given by first class mail, postage prepaid, addressedto the holders of record of the shares to be redeemed at their respective last addresses appearing on the books of the Corporation. Such mailing shall be
at least 30 days and not more than 60 days before the date fixed for redemption. Any notice mailed as provided in this Subsection shall be conclusively
presumed to have been duly given, whether or not the holder receives such notice, but failure duly to give such notice by mail, or any defect in such
notice or in the mailing thereof, to any holder of shares of Series C designated for redemption shall not affect the validity of the proceedings for theredemption of any other shares of Series C. Notwithstanding the foregoing, if the Series C or any depositary shares representing interests in the Series C
are issued in book-entry form through The Depository Trust Company or any other similar facility, notice of redemption may be given to the holders ofSeries C at such time and in any manner permitted by such facility. Each such notice given to a holder shall state: (1) the redemption date; (2) the
number of shares of Series C to be redeemed and, if less than all the shares held by such holder are to be redeemed, the number of such shares to beredeemed from such holder; (3) the redemption price; and (4) the place or places where certificates for such shares are to be surrendered for payment of
the redemption price.
(d) Partial Redemption. In case of any redemption of only part of the shares of Series C at the time outstanding, the shares to beredeemed shall be selected either pro rata or in such other manner as the Corporation may determine to be fair and equitable. Subject to the provisions
hereof, the Corporation shall have full power and authority to prescribe the terms and conditions upon which shares of Series C shall be redeemed fromtime to time. If fewer than all the shares represented by any certificate are redeemed, a new certificate shall be issued representing the unredeemedshares without charge to the holder thereof.
(e) Effectiveness of Redemption. If notice of redemption has been duly given and if on or before the redemption date specified in thenotice all funds necessary for the redemption have been set aside by the Corporation, separate and apart from its other funds, in trust for the pro rata
benefit of the holders of the shares called for redemption, so as to be and continue to be available therefor, then, notwithstanding that any certificate forany share so called for redemption has not been surrendered for cancellation, on and after the redemption date dividends shall cease to accrue on all
shares so called for redemption, all shares so called for redemption shall no longer be deemedB-7

outstanding and all rights with respect to such shares shall forthwith on such redemption date cease and terminate, except only the right of the holders
thereof to receive the amount payable on such redemption, without interest. Any funds unclaimed at the end of three years from the redemption dateshall, to the extent permitted by law, be released to the Corporation, after which time the holders of the shares so called for redemption shall look only to
the Corporation for payment of the redemption price of such shares.
Section 7. Conversion Upon Regulatory Changes. If both (i) and (ii) below occur:(i) after the date of the issuance of the Series C, the Corporation (by election or otherwise) becomes subject to any law, rule, regulation or
guidance (together, “Regulations”) relating to its capital adequacy, which Regulation (x) modifies the existing requirements for treatment as
Allowable Capital (as defined under the Securities and Exchange Commission rules relating to consolidated supervised entities as in effect fromtime to time), (y) provides for a type or level of capital characterized as “Tier 1” or its equivalent pursuant to Regulations of any governmental
agency, authority or other body having regulatory jurisdiction over the Corporation (or any of its subsidiaries or consolidated affiliates) and
implementing the capital standards published by the Basel Committee on Banking Supervision, the Securities and Exchange Commission, theBoard of Governors of the Federal Reserve System or any other United States national governmental agency, authority or other body, or any
other applicable regime based on capital standards published by the Basel Committee on Banking Supervision or its successor, or (z) provides
for a type or level of capital that in the judgment of the Corporation (after consultation with legal counsel of recognized standing) is substantiallyequivalent to such “Tier 1” capital (such capital described in either (y) or (z) above is referred to below as “Tier 1 Capital Equivalent”), and(ii) the Corporation affirmatively elects to qualify the Series C for treatment as Allowable Capital or Tier 1 Capital Equivalent without any
sublimit or other quantitative restriction on the inclusion of the Series C in Allowable Capital or Tier 1 Capital Equivalent (other than any
limitation the Corporation elects to accept and any limitation requiring that common equity or a specified form of common equity constitute thedominant form of Allowable Capital or Tier 1 Capital Equivalent) under such Regulations,then, upon such affirmative election, the Series C shall be convertible at the Corporation’s option into a new series of Preferred Stock having terms andprovisions substantially identical to those of the Series C, except that such new series may have such additional or modified rights, preferences,privileges and voting powers, and limitations and restrictions thereof, as are necessary in the judgment of the Board of Directors or the Committee (oranother duly authorized committee of the Board of Directors) (after consultation with legal counsel of recognized standing) to comply with the Required
Unrestricted Capital Provisions (as defined below), provided that the Corporation will not cause any such conversion unless the Board of Directors or
the Committee (or another duly authorized committee of the Board of Directors) determines that the rights, preferences, privileges and voting powers,
and the qualifications, limitations and restrictions thereof, of such new series of Preferred Stock, taken as a whole, are not materially less favorable tothe holders thereof than the rights, preferences, privileges and voting powers, and the qualifications, limitations and restrictions thereof, of the Series C,
taken as a whole.
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As used above, the term “Required Unrestricted Capital Provisions” means such terms and provisions as are, in the judgment of the
Corporation (after consultation with counsel of recognized standing), required for preferred stock to be treated as Allowable Capital or Tier 1 Capital
Equivalent, as applicable, without any sublimit or other quantitative restriction on the inclusion of such preferred stock in Allowable Capital or Tier 1
Capital Equivalent, as applicable (other than any limitation the Corporation elects to accept and any limitation requiring that common equity or a
specified form of common equity constitute the dominant form of Allowable Capital or Tier 1 Capital Equivalent) pursuant to the applicable
Regulations.
The Corporation shall provide notice to the holders of Series C of any election to qualify the Series C for Allowable Capital or Tier 1
Capital Equivalent treatment and of any determination to convert the Series C into a new series of Preferred Stock pursuant to the terms of thisSection 7, promptly upon the effectiveness of any such election or determination. A copy of such notice and of the relevant Regulations shall bemaintained on file at the principal offices of the Corporation and, upon request, will be made available to any stockholder of the Corporation. Any
conversion of the Series C pursuant to this Section 7 shall be effected pursuant to such procedures as the Corporation may determine and publicly
disclose.
Except as specified in this Section 7, holders of Series C shares shall have no right to exchange or convert such shares into any othersecurities.
Section 8. Voting Rights.
(a) General. The holders of Series C shall not have any voting rights except as set forth below or as otherwise from to time required bylaw.
(b) Right To Elect Two Directors Upon Nonpayment Events. If and whenever dividends on any shares of Series C shall not have been
declared and paid for at least six Dividend Periods, whether or not consecutive (a “Nonpayment Event”), the number of directors then constituting theBoard of Directors shall automatically be increased by two and the holders of Series C, together with the holders of any outstanding shares of Voting
Preferred Stock, voting together as a single class, shall be entitled to elect the two additional directors (the “Preferred Stock Directors”), provided that itshall be a qualification for election for any such Preferred Stock Director that the election of such director shall not cause the Corporation to violate thecorporate governance requirement of the New York Stock Exchange (or any other securities exchange or other trading facility on which securities of the
Corporation may then be listed or traded) that listed or traded companies must have a majority of independent directors and provided further that theBoard of Directors shall at no time include more than two Preferred Stock Directors (including, for purposes of this limitation, all directors that theholders of any series of Voting Preferred Stock are entitled to elect pursuant to like voting rights).
B-9

In the event that the holders of the Series C, and such other holders of Voting Preferred Stock, shall be entitled to vote for the election of
the Preferred Stock Directors following a Nonpayment Event, such directors shall be initially elected following such Nonpayment Event only at a
special meeting called at the request of the holders of record of at least 20% of the Series C or of any other series of Voting Preferred Stock thenoutstanding (unless such request for a special meeting is received less than 90 days before the date fixed for the next annual or special meeting of thestockholders of the Corporation, in which event such election shall be held only at such next annual or special meeting of stockholders), and at eachsubsequent annual meeting of stockholders of the Corporation. Such request to call a special meeting for the initial election of the Preferred Stock
Directors after a Nonpayment Event shall be made by written notice, signed by the requisite holders of Series C or Voting Preferred Stock, anddelivered to the Secretary of the Corporation in such manner as provided for in Section 10 below, or as may otherwise be required by law.
When dividends have been paid (or declared and a sum sufficient for payment thereof set aside) in full on the Series C for at least four
Dividend Periods (whether or not consecutive) after a Nonpayment Event, then the right of the holders of Series C to elect the Preferred Stock Directors
shall cease (but subject always to revesting of such voting rights in the case of any future Nonpayment Event), and, if and when any rights of holders ofSeries C and Voting Preferred Stock to elect the Preferred Stock Directors shall have ceased, the terms of office of all the Preferred Stock Directors shallforthwith terminate and the number of directors constituting the Board of Directors shall automatically be reduced accordingly.
Any Preferred Stock Director may be removed at any time without cause by the holders of record of a majority of the outstanding sharesof the Series C and Voting Preferred Stock, when they have the voting rights described above (voting together as a single class). So long as a
Nonpayment Event shall continue, any vacancy in the office of a Preferred Stock Director (other than prior to the initial election of Preferred Stock
Directors after a Nonpayment Event) may be filled by the written consent of the Preferred Stock Director remaining in office, or if none remains in
office, by a vote of the holders of record of a majority of the outstanding shares of the Series C and all Voting Preferred Stock, when they have thevoting rights described above (voting together as a single class). Any such vote of stockholders to remove, or to fill a vacancy in the office of, aPreferred Stock Director may be taken only at a special meeting of such stockholders, called as provided above for an initial election of Preferred Stock
Director after a Nonpayment Event (unless such request is received less than 90 days before the date fixed for the next annual or special meeting of thestockholders, in which event such election shall be held at such next annual or special meeting of stockholders). The Preferred Stock Directors shalleach be entitled to one vote per director on any matter that shall come before the Board of Directors for a vote. Each Preferred Stock Director elected atany special meeting of stockholders or by written consent of the other Preferred Stock Director shall hold office until the next annual meeting of thestockholders if such office shall not have previously terminated as above provided.
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(c) Other Voting Rights. So long as any shares of Series C are outstanding, in addition to any other vote or consent of stockholders
required by law or by the Certificate of Incorporation, the vote or consent of the holders of at least 662⁄3% of the shares of Series C and any Voting
Preferred Stock at the time outstanding and entitled to vote thereon, voting together as a single class, given in person or by proxy, either in writing
without a meeting or by vote at any meeting called for the purpose, shall be necessary for effecting or validating:(i) Authorization of Senior Stock. Any amendment or alteration of the Certificate of Incorporation to authorize or create, or increase theauthorized amount of, any shares of any class or series of capital stock of the Corporation ranking senior to the Series C with respect to either orboth the payment of dividends and/or the distribution of assets on any liquidation, dissolution or winding up of the Corporation;(ii) Amendment of Series C. Any amendment, alteration or repeal of any provision of the Certificate of Incorporation so as to materiallyand adversely affect the special rights, preferences, privileges or voting powers of the Series C, taken as a whole; or(iii) Share Exchanges, Reclassifications, Mergers and Consolidations. Any consummation of a binding share exchange orreclassification involving the Series C, or of a merger or consolidation of the Corporation with another corporation or other entity, unless in eachcase (x) the shares of Series C remain outstanding or, in the case of any such merger or consolidation with respect to which the Corporation is
not the surviving or resulting entity, are converted into or exchanged for preference securities of the surviving or resulting entity or its ultimate
parent, and (y) such shares remaining outstanding or such preference securities, as the case may be, have such rights, preferences, privileges andvoting powers, and limitations and restrictions thereof, taken as a whole, as are not materially less favorable to the holders thereof than therights, preferences, privileges and voting powers, and limitations and restrictions thereof, of the Series C immediately prior to suchconsummation, taken as a whole;provided, however, that for all purposes of this Section 8(c), any increase in the amount of the authorized or issued Series C or authorized Preferred
Stock, or the creation and issuance, or an increase in the authorized or issued amount, of any other series of Preferred Stock ranking equally with and/or
junior to the Series C with respect to the payment of dividends (whether such dividends are cumulative or non-cumulative) and/or the distribution ofassets upon liquidation, dissolution or winding up of the Corporation will not be deemed to adversely affect the rights, preferences, privileges or voting
powers of the Series C. In addition, any conversion of the Series C pursuant to Section 7 above shall not be deemed to adversely affect the rights,
preferences, privileges and voting powers of the Series C.
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If any amendment, alteration, repeal, share exchange, reclassification, merger or consolidation specified in this Section 8(c) would
adversely affect the Series C and one or more but not all other series of Preferred Stock, then only the Series C and such series of Preferred Stock as areadversely affected by and entitled to vote on the matter shall vote on the matter together as a single class (in lieu of all other series of Preferred Stock).
(d) Changes for Clarification. Without the consent of the holders of the Series C, so long as such action does not adversely affect therights, preferences, privileges and voting powers, and limitations and restrictions thereof, of the Series C, the Corporation may amend, alter, supplement
or repeal any terms of the Series C:(i) to cure any ambiguity, or to cure, correct or supplement any provision contained in this Certificate of Designations that may be
defective or inconsistent; or(ii) to make any provision with respect to matters or questions arising with respect to the Series C that is not inconsistent with theprovisions of this Certificate of Designations.
(e) Changes after Provision for Redemption. No vote or consent of the holders of Series C shall be required pursuant to Section 8(b), (c)or (d) above if, at or prior to the time when any such vote or consent would otherwise be required pursuant to such Section, all outstanding shares ofSeries C shall have been redeemed, or shall have been called for redemption upon proper notice and sufficient funds shall have been set aside for such
redemption, in each case pursuant to Section 6 above.
(f) Procedures for Voting and Consents. The rules and procedures for calling and conducting any meeting of the holders of Series C(including, without limitation, the fixing of a record date in connection therewith), the solicitation and use of proxies at such a meeting, the obtaining of
written consents and any other aspect or matter with regard to such a meeting or such consents shall be governed by any rules the Board of Directors or
the Committee (or another duly authorized committee of the Board of Directors), in its discretion, may adopt from time to time, which rules andprocedures shall conform to the requirements of the Certificate of Incorporation, the Bylaws, applicable law and any national securities exchange orother trading facility on which the Series C is listed or traded at the time. Whether the vote or consent of the holders of a plurality, majority or otherportion of the shares of Series C and any Voting Preferred Stock has been cast or given on any matter on which the holders of shares of Series C are
entitled to vote shall be determined by the Corporation by reference to the specified liquidation amounts of the shares voted or covered by the consent.
Section 9. Record Holders. To the fullest extent permitted by applicable law, the Corporation and the transfer agent for the Series C may
deem and treat the record holder of any share of Series C as the true and lawful owner thereof for all purposes, and neither the Corporation nor suchtransfer agent shall be affected by any notice to the contrary.
Section 10. Notices. All notices or communications in respect of Series C shall be sufficiently given if given in writing and delivered inperson or by first class mail, postage prepaid, or if given in such other manner as may be permitted in this Certificate of Designations, in the Certificate
of Incorporation or Bylaws or by applicable law.
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Section 11. No Preemptive Rights. No share of Series C shall have any rights of preemption whatsoever as to any securities of the
Corporation, or any warrants, rights or options issued or granted with respect thereto, regardless of how such securities, or such warrants, rights or
options, may be designated, issued or granted.
Section 12. Other Rights. The shares of Series C shall not have any voting powers, preferences or relative, participating, optional or otherspecial rights, or qualifications, limitations or restrictions thereof, other than as set forth herein or in the Certificate of Incorporation or as provided byapplicable law.

B-13

Appendix C

CERTIFICATE OF DESIGNATIONSOFFLOATING RATE NON-CUMULATIVE PREFERRED STOCK, SERIES D
OF
THE GOLDMAN SACHS GROUP, INC.
THE GOLDMAN SACHS GROUP, INC., a corporation organized and existing under the General Corporation Law of the State of
Delaware (the “Corporation”), in accordance with the provisions of Sections 103 and 151 thereof, DOES HEREBY CERTIFY:
The Securities Issuance Committee (the “Committee”) of the board of directors of the Corporation (the “Board of Directors”), in
accordance with the resolutions of the Board of Directors dated September 16, 2005, the provisions of the restated certificate of incorporation and theamended and restated bylaws of the Corporation and applicable law, by unanimous written consent dated May 16, 2005, adopted the following
resolution creating a series of 60,000 shares of Preferred Stock of the Corporation designated as “Floating Rate Non-Cumulative Preferred Stock, Series
D”.
RESOLVED, that pursuant to the authority vested in the Committee and in accordance with the resolutions of the Board of Directors
dated September 16, 2005, the provisions of the restated certificate of incorporation and the amended and restated bylaws of the Corporation andapplicable law, a series of Preferred Stock, par value $.01 per share, of the Corporation be and hereby is created, and that the designation and number ofshares of such series, and the voting and other powers, preferences and relative, participating, optional or other rights, and the qualifications, limitations
and restrictions thereof, of the shares of such series, are as follows:
Section 1. Designation. The distinctive serial designation of such series of Preferred Stock is “Floating Rate Non-Cumulative Preferred
Stock, Series D” (“Series D”). Each share of Series D shall be identical in all respects to every other share of Series D, except as to the respective dates
from which dividends thereon shall accrue, to the extent such dates may differ as permitted pursuant to Section 4(a) below.
Section 2. Number of Shares. The authorized number of shares of Series D shall be 60,000. Shares of Series D that are redeemed,purchased or otherwise acquired by the Corporation, or converted into another series of Preferred Stock, shall be cancelled and shall revert to authorized
but unissued shares of Series D.
Section 3. Definitions. As used herein with respect to Series D:(a) “Board of Directors” means the board of directors of the Corporation.

(b) “ByLaws” means the amended and restated bylaws of the Corporation, as they may be amended from time to time.
(c) “Business Day” means a day that is a Monday, Tuesday, Wednesday, Thursday or Friday and is not a day on which banking
institutions in New York City generally are authorized or obligated by law, regulation or executive order to close.
(d) “Calculation Agent” means, at any time, the person or entity appointed by the Corporation and serving as such agent at such time. The
Corporation may terminate any such appointment and may appoint a successor agent at any time and from time to time, provided that the
Corporation shall use its best efforts to ensure that there is, at all relevant times when the Series D is outstanding, a person or entity appointed
and serving as such agent. The Calculation Agent may be a person or entity affiliated with the Corporation.
(e) “Certificate of Designations” means this Certificate of Designations relating to the Series D, as it may be amended from time to time.
(f) “Certification of Incorporation” shall mean the restated certificate of incorporation of the Corporation, as it may be amended from time
to time, and shall include this Certificate of Designations.
(g) “Common Stock” means the common stock, par value $0.01 per share, of the Corporation.
(h) “Junior Stock” means the Common Stock and any other class or series of stock of the Corporation (other than Series D) that ranks
junior to Series D either or both as to the payment of dividends and/or as to the distribution of assets on any liquidation, dissolution or winding
up of the Corporation.
(i) “London Business Day” means a day that is a Monday, Tuesday, Wednesday, Thursday or Friday and is a day on which dealings in
U.S. dollars are transacted in the London interbank market.
(j) “Moneyline Telerate Page” means the display on Moneyline Telerate, Inc., or any successor service, on the page or pages specified in
Section 4 below or any replacement page or pages on that service.
(k) “Parity Stock” means any class or series of stock of the Corporation (other than Series D) that ranks equally with Series D both in thepayment of dividends and in the distribution of assets on any liquidation, dissolution or winding up of the Corporation.
(l) “Preferred Stock” means any and all series of Preferred Stock, having a par value of $0.01 per share, of the Corporation, including theSeries D.
C-2

(m) “Representative Amount” means, at any time, an amount that, in the Calculation Agent’s judgment, is representative of a single
transaction in the relevant market at the relevant time.
(n) “Voting Preferred Stock” means, with regard to any election or removal of a Preferred Stock Director (as defined in Section 8(b)below) or any other matter as to which the holders of Series D are entitled to vote as specified in Section 8 of this Certificate of Designations,any and all series of Preferred Stock (other than Series D) that rank equally with Series D either as to the payment of dividends or as to the
distribution of assets upon liquidation, dissolution or winding up of the Corporation and upon which like voting rights have been conferred andare exercisable with respect to such matter.
Section 4. Dividends.
(a) Rate. Holders of Series D shall be entitled to receive, when, as and if declared by the Board of Directors or the Committee (or another
duly authorized committee of the Board of Directors) out of funds legally available for the payment of dividends under Delaware law, non-cumulative
cash dividends at the rate determined as set forth below in this Section (4) applied to the liquidation preference amount of $25,000 per share of Series D.
Such dividends shall be payable quarterly in arrears (as provided below in this Section 4(a)), but only when, as and if declared by the Board of Directors
or the Committee (or another duly authorized committee of the Board of Directors), on February 10, May 10, August 10 and November 10 (“Dividend
Payment Dates”), commencing on August 10, 2006; provided that if any such Dividend Payment Date would otherwise occur on a day that is not a
Business Day, such Dividend Payment Date shall instead be (and any dividend payable on Series D on such Dividend Payment Date shall instead bepayable on) the immediately succeeding Business Day, unless such immediately succeeding Business Day falls in the next calendar month, in whichcase such Dividend Payment Date shall instead be (and any such dividend shall instead be payable on) the immediately preceding Business Day.
Dividends on Series D shall not be cumulative; holders of Series D shall not be entitled to receive any dividends not declared by the Board of Directors
or the Committee (or another duly authorized committee of the Board of Directors) and no interest, or sum of money in lieu of interest, shall be payable
in respect of any dividend not so declared.
Dividends that are payable on Series D on any Dividend Payment Date will be payable to holders of record of Series D as they appear on
the stock register of the Corporation on the applicable record date, which shall be the 15th calendar day before such Dividend Payment Date or suchother record date fixed by the Board of Directors or the Committee (or another duly authorized committee of the Board of Directors) that is not morethan 60 nor less than 10 days prior to such Dividend Payment Date (each, a “Dividend Record Date”). Any such day that is a Dividend Record Dateshall be a Dividend Record Date whether or not such day is a Business Day.
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Each dividend period (a “Dividend Period”) shall commence on and include a Dividend Payment Date (other than the initial Dividend
Period, which shall commence on and include the date of original issue of the Series D, provided that, for any share of Series D issued after suchoriginal issue date, the initial Dividend Period for such shares may commence on and include such other date as the Board of Directors or theCommittee (or another duly authorized committee of the Board of Directors) shall determine and publicly disclose) and shall end on and include thecalendar day next preceding the next Dividend Payment Date. Dividends payable on the Series D in respect of any Dividend Period shall be computedby the Calculation Agent on the basis of a 360-day year and the actual number of days elapsed in such Dividend Period. Dividends payable in respect ofa Dividend Period shall be payable in arrears - i.e., on the first Dividend Payment Date after such Dividend Period.
The dividend rate on the Series D, for each Dividend Period, shall be a rate per annum equal to the greater of (1) 0.67% above LIBOR (asdefined below) for such Dividend Period and (2) 4.00%. LIBOR, with respect to any Dividend Period, means the offered rate expressed as a percentage
per annum for three-month deposits in U.S. dollars on the first day of such Dividend Period, as that rate appears on Moneyline Telerate Page 3750 (orany successor or replacement page) as of 11:00 A.M., London time, on the second London Business Day immediately preceding the first day of such
Dividend Period.
If the rate described in the preceding paragraph does not appear on Moneyline Telerate Page 3750 (or any successor or replacement page),
LIBOR shall be determined on the basis of the rates, at approximately 11:00 A.M., London time, on the second London Business Day immediately
preceding the first day of such Dividend Period, at which deposits of the following kind are offered to prime banks in the London interbank market byfour major banks in that market selected by the Calculation Agent: three-month deposits in U.S. dollars, beginning on the first day of such Dividend
Period, and in a Representative Amount. The Calculation Agent shall request the principal London office of each of these banks to provide a quotationof its rate at approximately 11:00 A.M., London time. If at least two quotations are provided, LIBOR for such Dividend Period shall be the arithmetic
mean of such quotations.
If fewer than two quotations are provided as described in the preceding paragraph, LIBOR for such Dividend Period shall be the arithmetic
mean of the rates for loans of the following kind to leading European banks quoted, at approximately 11:00 A.M. New York City time, on the second
London Business Day immediately preceding the first day of such Dividend Period, by three major banks in New York City selected by the Calculation
Agent: three-month loans of U.S. dollars, beginning on the first day of such Dividend Period, and in a Representative Amount.
If fewer than three banks selected by the Calculation Agent are quoting as described in the preceding paragraph, LIBOR for such Dividend
Period shall be LIBOR in effect for the prior Dividend Period.
The Calculation Agent’s determination of any dividend rate, and its calculation of the amount of dividends for any Dividend Period, will
be maintained on file at the Corporation’s principal offices and will be available to any stockholder upon request and will be final and binding in theabsence of manifest error.
C-4

Holders of Series D shall not be entitled to any dividends, whether payable in cash, securities or other property, other than dividends (ifany) declared and payable on the Series D as specified in this Section 4 (subject to the other provisions of this Certificate of Designations).
(b) Priority of Dividends. So long as any share of Series D remains outstanding, no dividend shall be declared or paid on the Common
Stock or any other shares of Junior Stock (other than a dividend payable solely in Junior Stock), and no Common Stock or other Junior Stock shall bepurchased, redeemed or otherwise acquired for consideration by the Corporation, directly or indirectly (other than as a result of a reclassification of
Junior Stock for or into other Junior Stock, or the exchange or conversion of one share of Junior Stock for or into another share of Junior Stock andother than through the use of the proceeds of a substantially contemporaneous sale of Junior Stock) during a Dividend Period, unless the full dividends
for the latest completed Dividend Period on all outstanding shares of Series D have been declared and paid (or declared and a sum sufficient for thepayment thereof has been set aside). The foregoing provision shall not restrict the ability of Goldman, Sachs & Co., or any other affiliate of the
Corporation, to engage in any market-making transactions in Junior Stock in the ordinary course of business.
When dividends are not paid (or declared and a sum sufficient for payment thereof set aside) on any Dividend Payment Date (or, in thecase of Parity Stock having dividend payment dates different from the Dividend Payment Dates, on a dividend payment date falling within a Dividend
Period) in full upon the Series D and any shares of Parity Stock, all dividends declared on the Series D and all such Parity Stock and payable on such
Dividend Payment Date (or, in the case of parity stock having dividend payment dates different from the Dividend Payment Dates, on a dividend
payment date falling within the Dividend Period related to such Dividend Payment Date) shall be declared pro rata so that the respective amounts ofsuch dividends shall bear the same ratio to each other as all accrued but unpaid dividends per share on the Series D and all Parity Stock payable on such
Dividend Payment Date (or, in the case of Parity Stock having dividend payment dates different from the Dividend Payment Dates, on a dividend
payment date falling within the Dividend Period related to such Dividend Payment Date) bear to each other.
Subject to the foregoing, such dividends (payable in cash, securities or other property) as may be determined by the Board of Directors or
the Committee (or another duly authorized committee of the Board of Directors) may be declared and paid on any securities, including Common Stockand other Junior Stock, from time to time out of any funds legally available for such payment, and the Series D shall not be entitled to participate in any
such dividends.
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Section 5. Liquidation Rights.
(a) Voluntary or Involuntary Liquidation. In the event of any liquidation, dissolution or winding up of the affairs of the Corporation,
whether voluntary or involuntary, holders of Series D shall be entitled to receive, out of the assets of the Corporation or proceeds thereof (whether
capital or surplus) available for distribution to stockholders of the Corporation, and after satisfaction of all liabilities and obligations to creditors of the
Corporation, before any distribution of such assets or proceeds is made to or set aside for the holders of Common Stock and any other stock of the
Corporation ranking junior to the Series D as to such distribution, in full an amount equal to $25,000 per share (the “Series D Liquidation Amount”),
together with an amount equal to all dividends (if any) that have been declared but not paid prior to the date of payment of such distribution (but without
any amount in respect of dividends that have not been declared prior to such payment date).
(b) Partial Payment. If in any distribution described in Section 5(a) above the assets of the Corporation or proceeds thereof are notsufficient to pay the Liquidation Preferences (as defined below) in full to all holders of Series D and all holders of any stock of the Corporation ranking
equally with the Series D as to such distribution, the amounts paid to the holders of Series D and to the holders of all such other stock shall be paid pro
rata in accordance with the respective aggregate Liquidation Preferences of the holders of Series D and the holders of all such other stock. In any such
distribution, the “Liquidation Preference” of any holder of stock of the Corporation shall mean the amount otherwise payable to such holder in such
distribution (assuming no limitation on the assets of the Corporation available for such distribution), including an amount equal to any declared but
unpaid dividends (and, in the case of any holder of stock other than Series D and on which dividends accrue on a cumulative basis, an amount equal toany unpaid, accrued, cumulative dividends, whether or not declared, as applicable).
(c) Residual Distributions. If the Liquidation Preference has been paid in full to all holders of Series D, the holders of other stock of the
Corporation shall be entitled to receive all remaining assets of the Corporation (or proceeds thereof) according to their respective rights and preferences.
(d) Merger, Consolidation and Sale of Assets Not Liquidation. For purposes of this Section 5, the merger or consolidation of the
Corporation with any other corporation or other entity, including a merger or consolidation in which the holders of Series D receive cash, securities orother property for their shares, or the sale, lease or exchange (for cash, securities or other property) of all or substantially all of the assets of the
Corporation, shall not constitute a liquidation, dissolution or winding up of the Corporation.
Section 6. Redemption.
(a) Optional Redemption. The Series D may not be redeemed by the Corporation prior to May 24, 2011. On or after May 24, 2011, theCorporation, at its option, may redeem, in whole at any time or in part from time to time, the shares of Series D at the time outstanding, upon noticegiven as provided in Section 6(c) below, at a redemption price equal to $25,000 per share, together (except as otherwise provided hereinbelow) with anamount equal to any dividends that have been declared but not paid prior to the redemption date (but with no amount in respect of any dividends thathave not been declared prior to such date). The redemption price for any shares of Series D shall be payable on the redemption date to the holder of suchshares against surrender of theC-6

certificate(s) evidencing such shares to the Corporation or its agent. Any declared but unpaid dividends payable on a redemption date that occurs
subsequent to the Dividend Record Date for a Dividend Period shall not be paid to the holder entitled to receive the redemption price on the redemption
date, but rather shall be paid to the holder of record of the redeemed shares on such Dividend Record Date relating to the Dividend Payment Date asprovided in Section 4 above.
(b) No Sinking Fund. The Series D will not be subject to any mandatory redemption, sinking fund or other similar provisions. Holders ofSeries D will have no right to require redemption of any shares of Series D.
(c) Notice of Redemption. Notice of every redemption of shares of Series D shall be given by first class mail, postage prepaid, addressedto the holders of record of the shares to be redeemed at their respective last addresses appearing on the books of the Corporation. Such mailing shall be
at least 30 days and not more than 60 days before the date fixed for redemption. Any notice mailed as provided in this Subsection shall be conclusively
presumed to have been duly given, whether or not the holder receives such notice, but failure duly to give such notice by mail, or any defect in such
notice or in the mailing thereof, to any holder of shares of Series D designated for redemption shall not affect the validity of the proceedings for theredemption of any other shares of Series D. Notwithstanding the foregoing, if the Series D or any depositary shares representing interests in the Series D
are issued in book-entry form through The Depository Trust Company or any other similar facility, notice of redemption may be given to the holders ofSeries D at such time and in any manner permitted by such facility. Each such notice given to a holder shall state: (1) the redemption date; (2) the
number of shares of Series D to be redeemed and, if less than all the shares held by such holder are to be redeemed, the number of such shares to beredeemed from such holder; (3) the redemption price; and (4) the place or places where certificates for such shares are to be surrendered for payment of
the redemption price.
(d) Partial Redemption. In case of any redemption of only part of the shares of Series D at the time outstanding, the shares to beredeemed shall be selected either pro rata or in such other manner as the Corporation may determine to be fair and equitable. Subject to the provisions
hereof, the Corporation shall have full power and authority to prescribe the terms and conditions upon which shares of Series D shall be redeemed fromtime to time. If fewer than all the shares represented by any certificate are redeemed, a new certificate shall be issued representing the unredeemedshares without charge to the holder thereof.
(e) Effectiveness of Redemption. If notice of redemption has been duly given and if on or before the redemption date specified in thenotice all funds necessary for the redemption have been set aside by the Corporation, separate and apart from its other funds, in trust for the pro rata
benefit of the holders of the shares called for redemption, so as to be and continue to be available therefor, then, notwithstanding that any certificate forany share so called for redemption has not been surrendered for cancellation, on and after the redemption date dividends shall cease to accrue on all
shares so called for redemption, all shares so called for redemption shall no longer be deemedC-7

outstanding and all rights with respect to such shares shall forthwith on such redemption date cease and terminate, except only the right of the holders
thereof to receive the amount payable on such redemption, without interest. Any funds unclaimed at the end of three years from the redemption dateshall, to the extent permitted by law, be released to the Corporation, after which time the holders of the shares so called for redemption shall look only to
the Corporation for payment of the redemption price of such shares.
Section 7. Conversion Upon Regulatory Changes. If both (i) and (ii) below occur:(i) after the date of the issuance of the Series D, the Corporation (by election or otherwise) becomes subject to any law, rule, regulation or
guidance (together, “Regulations”) relating to its capital adequacy, which Regulation (x) modifies the existing requirements for treatment as
Allowable Capital (as defined under the Securities and Exchange Commission rules relating to consolidated supervised entities as in effect fromtime to time), (y) provides for a type or level of capital characterized as “Tier 1” or its equivalent pursuant to Regulations of any governmental
agency, authority or other body having regulatory jurisdiction over the Corporation (or any of its subsidiaries or consolidated affiliates) and
implementing the capital standards published by the Basel Committee on Banking Supervision, the Securities and Exchange Commission, theBoard of Governors of the Federal Reserve System or any other United States national governmental agency, authority or other body, or any
other applicable regime based on capital standards published by the Basel Committee on Banking Supervision or its successor, or (z) provides
for a type or level of capital that in the judgment of the Corporation (after consultation with legal counsel of recognized standing) is substantiallyequivalent to such “Tier 1” capital (such capital described in either (y) or (z) above is referred to below as “Tier 1 Capital Equivalent”), and(ii) the Corporation affirmatively elects to qualify the Series D for treatment as Allowable Capital or Tier 1 Capital Equivalent without any
sublimit or other quantitative restriction on the inclusion of the Series D in Allowable Capital or Tier 1 Capital Equivalent (other than any
limitation the Corporation elects to accept and any limitation requiring that common equity or a specified form of common equity constitute thedominant form of Allowable Capital or Tier 1 Capital Equivalent) under such Regulations,then, upon such affirmative election, the Series D shall be convertible at the Corporation’s option into a new series of Preferred Stock having terms andprovisions substantially identical to those of the Series D, except that such new series may have such additional or modified rights, preferences,privileges and voting powers, and limitations and restrictions thereof, as are necessary in the judgment of the Board of Directors or the Committee (oranother duly authorized committee of the Board of Directors) (after consultation with legal counsel of recognized standing) to comply with the Required
Unrestricted Capital Provisions (as defined below), provided that the Corporation will not cause any such conversion unless the Board of Directors or
the Committee (or another duly authorized committee of the Board of Directors) determines that the rights, preferences, privileges and voting powers,
and the qualifications, limitations and restrictions thereof, of such new series of Preferred Stock, taken as a whole, are not materially less favorable tothe holders thereof than the rights, preferences, privileges and voting powers, and the qualifications, limitations and restrictions thereof, of the Series D,
taken as a whole.
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As used above, the term “Required Unrestricted Capital Provisions” means such terms and provisions as are, in the judgment of the
Corporation (after consultation with counsel of recognized standing), required for preferred stock to be treated as Allowable Capital or Tier 1 Capital
Equivalent, as applicable, without any sublimit or other quantitative restriction on the inclusion of such preferred stock in Allowable Capital or Tier 1
Capital Equivalent, as applicable (other than any limitation the Corporation elects to accept and any limitation requiring that common equity or a
specified form of common equity constitute the dominant form of Allowable Capital or Tier 1 Capital Equivalent) pursuant to the applicable
Regulations.
The Corporation shall provide notice to the holders of Series D of any election to qualify the Series D for Allowable Capital or Tier 1
Capital Equivalent treatment and of any determination to convert the Series D into a new series of Preferred Stock pursuant to the terms of thisSection 7, promptly upon the effectiveness of any such election or determination. A copy of such notice and of the relevant Regulations shall bemaintained on file at the principal offices of the Corporation and, upon request, will be made available to any stockholder of the Corporation. Any
conversion of the Series D pursuant to this Section 7 shall be effected pursuant to such procedures as the Corporation may determine and publicly
disclose.
Except as specified in this Section 7, holders of Series D shares shall have no right to exchange or convert such shares into any othersecurities.
Section 8. Voting Rights.
(a) General. The holders of Series D shall not have any voting rights except as set forth below or as otherwise from to time required bylaw.
(b) Right To Elect Two Directors Upon Nonpayment Events. If and whenever dividends on any shares of Series D shall not have been
declared and paid for at least six Dividend Periods, whether or not consecutive (a “Nonpayment Event”), the number of directors then constituting theBoard of Directors shall automatically be increased by two and the holders of Series D, together with the holders of any outstanding shares of Voting
Preferred Stock, voting together as a single class, shall be entitled to elect the two additional directors (the “Preferred Stock Directors”), provided that itshall be a qualification for election for any such Preferred Stock Director that the election of such director shall not cause the Corporation to violate thecorporate governance requirement of the New York Stock Exchange (or any other securities exchange or other trading facility on which securities of the
Corporation may then be listed or traded) that listed or traded companies must have a majority of independent directors and provided further that theBoard of Directors shall at no time include more than two Preferred Stock Directors (including, for purposes of this limitation, all directors that theholders of any series of Voting Preferred Stock are entitled to elect pursuant to like voting rights).
C-9

In the event that the holders of the Series D, and such other holders of Voting Preferred Stock, shall be entitled to vote for the election of
the Preferred Stock Directors following a Nonpayment Event, such directors shall be initially elected following such Nonpayment Event only at a
special meeting called at the request of the holders of record of at least 20% of the Series D or of any other series of Voting Preferred Stock thenoutstanding (unless such request for a special meeting is received less than 90 days before the date fixed for the next annual or special meeting of thestockholders of the Corporation, in which event such election shall be held only at such next annual or special meeting of stockholders), and at eachsubsequent annual meeting of stockholders of the Corporation. Such request to call a special meeting for the initial election of the Preferred Stock
Directors after a Nonpayment Event shall be made by written notice, signed by the requisite holders of Series D or Voting Preferred Stock, anddelivered to the Secretary of the Corporation in such manner as provided for in Section 10 below, or as may otherwise be required by law.
When dividends have been paid (or declared and a sum sufficient for payment thereof set aside) in full on the Series D for at least four
Dividend Periods (whether or not consecutive) after a Nonpayment Event, then the right of the holders of Series D to elect the Preferred Stock Directors
shall cease (but subject always to revesting of such voting rights in the case of any future Nonpayment Event), and, if and when any rights of holders ofSeries D and Voting Preferred Stock to elect the Preferred Stock Directors shall have ceased, the terms of office of all the Preferred Stock Directors shallforthwith terminate and the number of directors constituting the Board of Directors shall automatically be reduced accordingly.
Any Preferred Stock Director may be removed at any time without cause by the holders of record of a majority of the outstanding sharesof the Series D and Voting Preferred Stock, when they have the voting rights described above (voting together as a single class). So long as a
Nonpayment Event shall continue, any vacancy in the office of a Preferred Stock Director (other than prior to the initial election of Preferred Stock
Directors after a Nonpayment Event) may be filled by the written consent of the Preferred Stock Director remaining in office, or if none remains in
office, by a vote of the holders of record of a majority of the outstanding shares of the Series D and all Voting Preferred Stock, when they have thevoting rights described above (voting together as a single class). Any such vote of stockholders to remove, or to fill a vacancy in the office of, aPreferred Stock Director may be taken only at a special meeting of such stockholders, called as provided above for an initial election of Preferred Stock
Director after a Nonpayment Event (unless such request is received less than 90 days before the date fixed for the next annual or special meeting of thestockholders, in which event such election shall be held at such next annual or special meeting of stockholders). The Preferred Stock Directors shalleach be entitled to one vote per director on any matter that shall come before the Board of Directors for a vote. Each Preferred Stock Director elected atany special meeting of stockholders or by written consent of the other Preferred Stock Director shall hold office until the next annual meeting of thestockholders if such office shall not have previously terminated as above provided.
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(c) Other Voting Rights. So long as any shares of Series D are outstanding, in addition to any other vote or consent of stockholders
required by law or by the Certificate of Incorporation, the vote or consent of the holders of at least 662⁄3% of the shares of Series D and any Voting
Preferred Stock at the time outstanding and entitled to vote thereon, voting together as a single class, given in person or by proxy, either in writing
without a meeting or by vote at any meeting called for the purpose, shall be necessary for effecting or validating:(i) Authorization of Senior Stock. Any amendment or alteration of the Certificate of Incorporation to authorize or create, or increase theauthorized amount of, any shares of any class or series of capital stock of the Corporation ranking senior to the Series D with respect to either orboth the payment of dividends and/or the distribution of assets on any liquidation, dissolution or winding up of the Corporation;(ii) Amendment of Series D. Any amendment, alteration or repeal of any provision of the Certificate of Incorporation so as to materiallyand adversely affect the special rights, preferences, privileges or voting powers of the Series D, taken as a whole; or(iii) Share Exchanges, Reclassifications, Mergers and Consolidations. Any consummation of a binding share exchange orreclassification involving the Series D, or of a merger or consolidation of the Corporation with another corporation or other entity, unless in eachcase (x) the shares of Series D remain outstanding or, in the case of any such merger or consolidation with respect to which the Corporation is
not the surviving or resulting entity, are converted into or exchanged for preference securities of the surviving or resulting entity or its ultimate
parent, and (y) such shares remaining outstanding or such preference securities, as the case may be, have such rights, preferences, privileges andvoting powers, and limitations and restrictions thereof, taken as a whole, as are not materially less favorable to the holders thereof than therights, preferences, privileges and voting powers, and limitations and restrictions thereof, of the Series D immediately prior to suchconsummation, taken as a whole;provided, however, that for all purposes of this Section 8(c), any increase in the amount of the authorized or issued Series D or authorized Preferred
Stock, or the creation and issuance, or an increase in the authorized or issued amount, of any other series of Preferred Stock ranking equally with and/or
junior to the Series D with respect to the payment of dividends (whether such dividends are cumulative or non-cumulative) and/or the distribution ofassets upon liquidation, dissolution or winding up of the Corporation will not be deemed to adversely affect the rights, preferences, privileges or voting
powers of the Series D. In addition, any conversion of the Series D pursuant to Section 7 above shall not be deemed to adversely affect the rights,
preferences, privileges and voting powers of the Series D.
If any amendment, alteration, repeal, share exchange, reclassification, merger or consolidation specified in this Section 8(c) would
adversely affect the Series D and one or more but not all other series of Preferred Stock, then only the Series D and such series of Preferred Stock as areadversely affected by and entitled to vote on the matter shall vote on the matter together as a single class (in lieu of all other series of Preferred Stock).
C-11

(d) Changes for Clarification. Without the consent of the holders of the Series D, so long as such action does not adversely affect therights, preferences, privileges and voting powers, and limitations and restrictions thereof, of the Series D, the Corporation may amend, alter, supplement
or repeal any terms of the Series D:(i) to cure any ambiguity, or to cure, correct or supplement any provision contained in this Certificate of Designations that may be
defective or inconsistent; or(ii) to make any provision with respect to matters or questions arising with respect to the Series D that is not inconsistent with theprovisions of this Certificate of Designations.
(e) Changes after Provision for Redemption. No vote or consent of the holders of Series D shall be required pursuant to Section 8(b), (c)or (d) above if, at or prior to the time when any such vote or consent would otherwise be required pursuant to such Section, all outstanding shares ofSeries D shall have been redeemed, or shall have been called for redemption upon proper notice and sufficient funds shall have been set aside for such
redemption, in each case pursuant to Section 6 above.
(f) Procedures for Voting and Consents. The rules and procedures for calling and conducting any meeting of the holders of Series D(including, without limitation, the fixing of a record date in connection therewith), the solicitation and use of proxies at such a meeting, the obtaining of
written consents and any other aspect or matter with regard to such a meeting or such consents shall be governed by any rules the Board of Directors or
the Committee (or another duly authorized committee of the Board of Directors), in its discretion, may adopt from time to time, which rules andprocedures shall conform to the requirements of the Certificate of Incorporation, the Bylaws, applicable law and any national securities exchange orother trading facility on which the Series D is listed or traded at the time. Whether the vote or consent of the holders of a plurality, majority or otherportion of the shares of Series D and any Voting Preferred Stock has been cast or given on any matter on which the holders of shares of Series D are
entitled to vote shall be determined by the Corporation by reference to the specified liquidation amounts of the shares voted or covered by the consent.
Section 9. Record Holders. To the fullest extent permitted by applicable law, the Corporation and the transfer agent for the Series D may
deem and treat the record holder of any share of Series D as the true and lawful owner thereof for all purposes, and neither the Corporation nor suchtransfer agent shall be affected by any notice to the contrary.
Section 10. Notices. All notices or communications in respect of Series D shall be sufficiently given if given in writing and delivered inperson or by first class mail, postage prepaid, or if given in such other manner as may be permitted in this Certificate of Designations, in the Certificate
of Incorporation or Bylaws or by applicable law.
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Section 11. No Preemptive Rights. No share of Series D shall have any rights of preemption whatsoever as to any securities of the
Corporation, or any warrants, rights or options issued or granted with respect thereto, regardless of how such securities, or such warrants, rights or
options, may be designated, issued or granted.
Section 12. Other Rights. The shares of Series D shall not have any voting powers, preferences or relative, participating, optional or otherspecial rights, or qualifications, limitations or restrictions thereof, other than as set forth herein or in the Certificate of Incorporation or as provided byapplicable law.

C-13

Appendix D

CERTIFICATE OF DESIGNATIONSOFPERPETUAL NON-CUMULATIVE PREFERRED STOCK, SERIES E
OF
THE GOLDMAN SACHS GROUP, INC.
THE GOLDMAN SACHS GROUP, INC., a corporation organized and existing under the General Corporation Law of the State of
Delaware (the “Corporation”), in accordance with the provisions of Sections 103 and 151 thereof, DOES HEREBY CERTIFY:
The Securities Issuance Committee (the “Committee”) of the board of directors of the Corporation (the “Board of Directors”), in
accordance with the resolutions of the Board of Directors dated September 16, 2005 and September 29, 2006, the provisions of the restated certificate ofincorporation and the amended and restated bylaws of the Corporation and applicable law, by unanimous written consent dated May 14, 2007, adopted
the following resolution creating a series of 17,500.1 shares of Preferred Stock of the Corporation designated as “Perpetual Non-Cumulative Preferred
Stock, Series E”.
RESOLVED, that pursuant to the authority vested in the Committee and in accordance with the resolutions of the Board of Directors
dated September 16, 2005 and September 29, 2006, the provisions of the restated certificate of incorporation and the amended and restated bylaws of the
Corporation and applicable law, a series of Preferred Stock, par value $.01 per share, of the Corporation be and hereby is created, and that thedesignation and number of shares of such series, and the voting and other powers, preferences and relative, participating, optional or other rights, andthe qualifications, limitations and restrictions thereof, of the shares of such series, are as follows:
Section 1. Designation. The distinctive serial designation of such series of Preferred Stock is “Perpetual Non-Cumulative Preferred Stock,
Series E” (“Series E”). Each share of Series E shall be identical in all respects to every other share of Series E.
Section 2. Number of Shares. The authorized number of shares of Series E shall be 17,500.1. Shares of Series E that are redeemed,purchased or otherwise acquired by the Corporation, or converted into another series of Preferred Stock, shall be cancelled and shall revert to authorized
but unissued shares of Series E.
Section 3. Definitions. As used herein with respect to Series E:(a) “Board of Directors” means the board of directors of the Corporation.

(b) “ByLaws” means the amended and restated bylaws of the Corporation, as they may be amended from time to time.
(c) “Business Day” means a day that is a Monday, Tuesday, Wednesday, Thursday or Friday and is not a day on which banking
institutions in New York City generally are authorized or obligated by law, regulation or executive order to close.
(d) “Calculation Agent” means, at any time, the person or entity appointed by the Corporation and serving as such agent at such time. The
Corporation may terminate any such appointment and may appoint a successor agent at any time and from time to time, provided that the
Corporation shall use its best efforts to ensure that there is, at all relevant times when the Series E is outstanding, a person or entity appointed
and serving as such agent. The Calculation Agent may be a person or entity affiliated with the Corporation.
(e) “Certificate of Designations” means this Certificate of Designations relating to the Series E, as it may be amended from time to time.
(f) “Certification of Incorporation” shall mean the restated certificate of incorporation of the Corporation, as it may be amended from time
to time, and shall include this Certificate of Designations.
(g) “Common Stock” means the common stock, par value $0.01 per share, of the Corporation.
(h) “Junior Stock” means the Common Stock and any other class or series of stock of the Corporation (other than Series E) that ranks
junior to Series E either or both as to the payment of dividends and/or as to the distribution of assets on any liquidation, dissolution or winding
up of the Corporation.
(i) “London Business Day” means a day that is a Monday, Tuesday, Wednesday, Thursday or Friday and is a day on which dealings in
U.S. dollars are transacted in the London interbank market.
(j) “Parity Stock” means any class or series of stock of the Corporation (other than Series E) that ranks equally with Series E both in thepayment of dividends and in the distribution of assets on any liquidation, dissolution or winding up of the Corporation.
(k) “Preferred Stock” means any and all series of Preferred Stock, having a par value of $0.01 per share, of the Corporation, including theSeries E.
(l) “Representative Amount” means, at any time, an amount that, in the Calculation Agent’s judgment, is representative of a single
transaction in the relevant market at the relevant time.
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(m) “Reuters Screen LIBOR01” means the display designated on the Reuters 3000 Xtra (or such other page as may replace that page onthat service or such other service as may be nominated by the British Bankers’ Association for the purpose of displaying London interbank
offered rates for U.S. Dollar deposits).
(n) “Voting Preferred Stock” means, with regard to any election or removal of a Preferred Stock Director (as defined in Section 8(b)below) or any other matter as to which the holders of Series E are entitled to vote as specified in Section 8 of this Certificate of Designations,any and all series of Preferred Stock (other than Series E) that rank equally with Series E either as to the payment of dividends or as to the
distribution of assets upon liquidation, dissolution or winding up of the Corporation and upon which like voting rights have been conferred andare exercisable with respect to such matter.
Section 4. Dividends.
(a) Rate. Holders of Series E shall be entitled to receive, when, as and if declared by the Board of Directors or the Committee (or another
duly authorized committee of the Board of Directors) out of funds legally available for the payment of dividends under Delaware law, non-cumulative
cash dividends at the rate determined as set forth below in this Section (4) applied to the liquidation preference amount of $100,000 per share ofSeries E. Such dividends shall be payable in arrears (as provided below in this Section 4(a)), but only when, as and if declared by the Board of Directors
or the Committee (or another duly authorized committee of the Board of Directors), (a) if the shares of Series E are issued prior to June 1, 2012 (or ifsuch date is not a Business Day, the next Business Day), on June 1 and December 1 of each year until June 1, 2012, and (b) thereafter, on March 1,
June 1, September 1 and December 1 of each year (each a “Dividend Payment Date”); provided that if any such Dividend Payment Date would
otherwise occur on a day that is not a Business Day, such Dividend Payment Date shall instead be (and any dividend payable on Series E on such
Dividend Payment Date shall instead be payable on) the immediately succeeding Business Day. If a Dividend Payment Date prior to June 1, 2012 is not
a Business Day, the applicable dividend shall be paid on the first Business Day following that day without adjustment. Dividends on Series E shall not
be cumulative; holders of Series E shall not be entitled to receive any dividends not declared by the Board of Directors or the Committee (or another
duly authorized committee of the Board of Directors) and no interest, or sum of money in lieu of interest, shall be payable in respect of any dividend not
so declared.
Dividends that are payable on Series E on any Dividend Payment Date will be payable to holders of record of Series E as they appear on
the stock register of the Corporation on the applicable record date, which shall be the 15th calendar day before such Dividend Payment Date or suchother record date fixed by the Board of Directors or the Committee (or another duly authorized committee of the Board of Directors) that is not morethan 60 nor less than 10 days prior to such Dividend Payment Date (each, a “Dividend Record Date”). Any such day that is a Dividend Record Dateshall be a Dividend Record Date whether or not such day is a Business Day.
D-3

Each dividend period (a “Dividend Period”) shall commence on and include a Dividend Payment Date (other than the initial Dividend
Period, which shall commence on and include the date of original issue of the Series E) and shall end on and include the calendar day next preceding thenext Dividend Payment Date. Dividends payable on the Series E in respect of a Dividend Period shall be computed by the Calculation Agent (i) if sharesof Series E are issued prior to June 1, 2012, on the basis of a 360-day year consisting of twelve-30 day months until the Dividend Payment Date in June2012 and (ii) thereafter, on the basis of a 360-day year and the actual number of days elapsed in such Dividend Period. Dividends payable in respect of a
Dividend Period shall be payable in arrears - i.e., on the first Dividend Payment Date after such Dividend Period.
The dividend rate on the Series E, for each Dividend Period, shall be (a) if the shares of Series E are issued prior to June 1, 2012, a rate perannum equal to 5.793% until the Dividend Payment date in June 2012, and (b) thereafter, a rate per annum that will reset quarterly and shall be equal to
the greater of (i) three-month LIBOR for such Dividend Period plus 0.7675% and (ii) 4.000%. Three-month LIBOR, with respect to any Dividend
Period, means the offered rate expressed as a percentage per annum for three-month deposits in U.S. dollars on the first day of such Dividend Period, asthat rate appears on Reuters Screen LIBOR01 (or any successor or replacement page) as of 11:00 A.M., London time, on the second London Business
Day immediately preceding the first day of such Dividend Period.
If the rate described in the preceding paragraph does not appear on Reuters Screen LIBOR01(or any successor or replacement page),
LIBOR shall be determined on the basis of the rates, at approximately 11:00 A.M., London time, on the second London Business Day immediately
preceding the first day of such Dividend Period, at which deposits of the following kind are offered to prime banks in the London interbank market byfour major banks in that market selected by the Calculation Agent: three-month deposits in U.S. dollars, beginning on the first day of such Dividend
Period, and in a Representative Amount. The Calculation Agent shall request the principal London office of each of these banks to provide a quotationof its rate at approximately 11:00 A.M., London time. If at least two quotations are provided, LIBOR for such Dividend Period shall be the arithmetic
mean of such quotations.
If fewer than two quotations are provided as described in the preceding paragraph, LIBOR for such Dividend Period shall be the arithmetic
mean of the rates for loans of the following kind to leading European banks quoted, at approximately 11:00 A.M. New York City time, on the second
London Business Day immediately preceding the first day of such Dividend Period, by three major banks in New York City selected by the Calculation
Agent: three-month loans of U.S. dollars, beginning on the first day of such Dividend Period, and in a Representative Amount.
If fewer than three banks selected by the Calculation Agent are quoting as described in the preceding paragraph, LIBOR for such Dividend
Period shall be LIBOR in effect for the prior Dividend Period.
D-4

The Calculation Agent’s determination of any dividend rate, and its calculation of the amount of dividends for any Dividend Period, will
be maintained on file at the Corporation’s principal offices and will be available to any stockholder upon request and will be final and binding in theabsence of manifest error.
Holders of Series E shall not be entitled to any dividends, whether payable in cash, securities or other property, other than dividends (ifany) declared and payable on the Series E as specified in this Section 4 (subject to the other provisions of this Certificate of Designations).
(b) Priority of Dividends. So long as any share of Series E remains outstanding, no dividend shall be declared or paid on the Common
Stock or any other shares of Junior Stock (other than a dividend payable solely in Junior Stock), and no Common Stock or other Junior Stock shall bepurchased, redeemed or otherwise acquired for consideration by the Corporation, directly or indirectly (other than as a result of a reclassification of
Junior Stock for or into other Junior Stock, or the exchange or conversion of one share of Junior Stock for or into another share of Junior Stock andother than through the use of the proceeds of a substantially contemporaneous sale of Junior Stock) during a Dividend Period, unless the full dividends
for the latest completed Dividend Period on all outstanding shares of Series E have been declared and paid (or declared and a sum sufficient for thepayment thereof has been set aside). The foregoing provision shall not restrict the ability of Goldman, Sachs & Co., or any other affiliate of the
Corporation, to engage in any market-making transactions in Junior Stock in the ordinary course of business.
When dividends are not paid (or declared and a sum sufficient for payment thereof set aside) on any Dividend Payment Date (or, in thecase of Parity Stock having dividend payment dates different from the Dividend Payment Dates, on a dividend payment date falling within a Dividend
Period) in full upon the Series E and any shares of Parity Stock, all dividends declared on the Series E and all such Parity Stock and payable on such
Dividend Payment Date (or, in the case of parity stock having dividend payment dates different from the Dividend Payment Dates, on a dividend
payment date falling within the Dividend Period related to such Dividend Payment Date) shall be declared pro rata so that the respective amounts ofsuch dividends shall bear the same ratio to each other as all accrued but unpaid dividends per share on the Series E and all Parity Stock payable on such
Dividend Payment Date (or, in the case of Parity Stock having dividend payment dates different from the Dividend Payment Dates, on a dividend
payment date falling within the Dividend Period related to such Dividend Payment Date) bear to each other.
Subject to the foregoing, such dividends (payable in cash, securities or other property) as may be determined by the Board of Directors or
the Committee (or another duly authorized committee of the Board of Directors) may be declared and paid on any securities, including Common Stockand other Junior Stock, from time to time out of any funds legally available for such payment, and the Series E shall not be entitled to participate in any
such dividends.
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Section 5. Liquidation Rights.
(a) Voluntary or Involuntary Liquidation. In the event of any liquidation, dissolution or winding up of the affairs of the Corporation,
whether voluntary or involuntary, holders of Series E shall be entitled to receive, out of the assets of the Corporation or proceeds thereof (whether
capital or surplus) available for distribution to stockholders of the Corporation, and after satisfaction of all liabilities and obligations to creditors of the
Corporation, before any distribution of such assets or proceeds is made to or set aside for the holders of Common Stock and any other stock of the
Corporation ranking junior to the Series E as to such distribution, in full an amount equal to $100,000 per share (the “Series E Liquidation Amount”),
together with an amount equal to all dividends (if any) that have been declared but not paid prior to the date of payment of such distribution (but without
any amount in respect of dividends that have not been declared prior to such payment date).
(b) Partial Payment. If in any distribution described in Section 5(a) above the assets of the Corporation or proceeds thereof are notsufficient to pay the Liquidation Preferences (as defined below) in full to all holders of Series E and all holders of any stock of the Corporation ranking
equally with the Series E as to such distribution, the amounts paid to the holders of Series E and to the holders of all such other stock shall be paid pro
rata in accordance with the respective aggregate Liquidation Preferences of the holders of Series E and the holders of all such other stock. In any such
distribution, the “Liquidation Preference” of any holder of stock of the Corporation shall mean the amount otherwise payable to such holder in such
distribution (assuming no limitation on the assets of the Corporation available for such distribution), including an amount equal to any declared but
unpaid dividends (and, in the case of any holder of stock other than Series E and on which dividends accrue on a cumulative basis, an amount equal toany unpaid, accrued, cumulative dividends, whether or not declared, as applicable).
(c) Residual Distributions. If the Liquidation Preference has been paid in full to all holders of Series E, the holders of other stock of the
Corporation shall be entitled to receive all remaining assets of the Corporation (or proceeds thereof) according to their respective rights and preferences.
(d) Merger, Consolidation and Sale of Assets Not Liquidation. For purposes of this Section 5, the merger or consolidation of the
Corporation with any other corporation or other entity, including a merger or consolidation in which the holders of Series E receive cash, securities orother property for their shares, or the sale, lease or exchange (for cash, securities or other property) of all or substantially all of the assets of the
Corporation, shall not constitute a liquidation, dissolution or winding up of the Corporation.
D-6

Section 6. Redemption.
(a) Optional Redemption. The Series E may not be redeemed by the Corporation prior to the later of June 1, 2012 and the date of originalissue of Series E. On or after that date, the Corporation, at its option, may redeem, in whole at any time or in part from time to time, the shares ofSeries E at the time outstanding, upon notice given as provided in Section 6(c) below, at a redemption price equal to $100,000 per share, together(except as otherwise provided herein) with an amount equal to any dividends that have been declared but not paid prior to the redemption date (but withno amount in respect of any dividends that have not been declared prior to such date). The redemption price for any shares of Series E shall be payable
on the redemption date to the holder of such shares against surrender of the certificate(s) evidencing such shares to the Corporation or its agent. Any
declared but unpaid dividends payable on a redemption date that occurs subsequent to the Dividend Record Date for a Dividend Period shall not be paid
to the holder entitled to receive the redemption price on the redemption date, but rather shall be paid to the holder of record of the redeemed shares onsuch Dividend Record Date relating to the Dividend Payment Date as provided in Section 4 above.
(b) No Sinking Fund. The Series E will not be subject to any mandatory redemption, sinking fund or other similar provisions. Holders ofSeries E will have no right to require redemption of any shares of Series E.
(c) Notice of Redemption. Notice of every redemption of shares of Series E shall be given by first class mail, postage prepaid, addressedto the holders of record of the shares to be redeemed at their respective last addresses appearing on the books of the Corporation. Such mailing shall be
at least 30 days and not more than 60 days before the date fixed for redemption. Any notice mailed as provided in this Subsection shall be conclusively
presumed to have been duly given, whether or not the holder receives such notice, but failure duly to give such notice by mail, or any defect in such
notice or in the mailing thereof, to any holder of shares of Series E designated for redemption shall not affect the validity of the proceedings for theredemption of any other shares of Series E. Notwithstanding the foregoing, if the Series E or any depositary shares representing interests in the Series E
are issued in book-entry form through The Depository Trust Company or any other similar facility, notice of redemption may be given to the holders ofSeries E at such time and in any manner permitted by such facility. Each such notice given to a holder shall state: (1) the redemption date; (2) the
number of shares of Series E to be redeemed and, if less than all the shares held by such holder are to be redeemed, the number of such shares to beredeemed from such holder; (3) the redemption price; and (4) the place or places where certificates for such shares are to be surrendered for payment of
the redemption price.
(d) Partial Redemption. In case of any redemption of only part of the shares of Series E at the time outstanding, the shares to beredeemed shall be selected either pro rata or in such other manner as the Corporation may determine to be fair and equitable. Subject to the provisions
hereof, the Corporation shall have full power and authority to prescribe the terms and conditions upon which shares of Series E shall be redeemed fromtime to time. If fewer than all the shares represented by any certificate are redeemed, a new certificate shall be issued representing the unredeemedshares without charge to the holder thereof.
D-7

(e) Effectiveness of Redemption. If notice of redemption has been duly given and if on or before the redemption date specified in thenotice all funds necessary for the redemption have been set aside by the Corporation, separate and apart from its other funds, in trust for the pro rata
benefit of the holders of the shares called for redemption, so as to be and continue to be available therefor, then, notwithstanding that any certificate forany share so called for redemption has not been surrendered for cancellation, on and after the redemption date dividends shall cease to accrue on all
shares so called for redemption, all shares so called for redemption shall no longer be deemed outstanding and all rights with respect to such shares shallforthwith on such redemption date cease and terminate, except only the right of the holders thereof to receive the amount payable on such redemption,
without interest. Any funds unclaimed at the end of three years from the redemption date shall, to the extent permitted by law, be released to the
Corporation, after which time the holders of the shares so called for redemption shall look only to the Corporation for payment of the redemption priceof such shares.
Section 7. Conversion Upon Regulatory Changes. If both (i) and (ii) below occur:(i) after the date of the issuance of the Series E, the Corporation (by election or otherwise) becomes subject to any law, rule, regulation or
guidance (together, “Regulations”) relating to its capital adequacy, which Regulation (x) modifies the existing requirements for treatment as
Allowable Capital (as defined under the Securities and Exchange Commission rules relating to consolidated supervised entities as in effect fromtime to time), (y) provides for a type or level of capital characterized as “Tier 1” or its equivalent pursuant to Regulations of any governmental
agency, authority or other body having regulatory jurisdiction over the Corporation (or any of its subsidiaries or consolidated affiliates) and
implementing the capital standards published by the Basel Committee on Banking Supervision, the Securities and Exchange Commission, theBoard of Governors of the Federal Reserve System or any other United States national governmental agency, authority or other body, or any
other applicable regime based on capital standards published by the Basel Committee on Banking Supervision or its successor, or (z) provides
for a type or level of capital that in the judgment of the Corporation (after consultation with legal counsel of recognized standing) is substantiallyequivalent to such “Tier 1” capital (such capital described in either (y) or (z) above is referred to below as “Tier 1 Capital Equivalent”), and(ii) the Corporation affirmatively elects to qualify the Series E for treatment as Allowable Capital or Tier 1 Capital Equivalent without any
sublimit or other quantitative restriction on the inclusion of the Series E in Allowable Capital or Tier 1 Capital Equivalent (other than any
limitation the Corporation elects to accept and any limitation requiring that common equity or a specified form of common equity constitute thedominant form of Allowable Capital or Tier 1 Capital Equivalent) under such Regulations,D-8

then, upon such affirmative election, the Series E shall be convertible at the Corporation’s option into a new series of Preferred Stock having
terms and provisions substantially identical to those of the Series E, except that such new series may have such additional or modified rights,
preferences, privileges and voting powers, and limitations and restrictions thereof, as are necessary in the judgment of the Board of Directors or
the Committee (or another duly authorized committee of the Board of Directors) (after consultation with legal counsel of recognized standing) tocomply with the Required Unrestricted Capital Provisions (as defined below), provided that the Corporation will not cause any such conversion
unless the Board of Directors or the Committee (or another duly authorized committee of the Board of Directors) determines that the rights,
preferences, privileges and voting powers, and the qualifications, limitations and restrictions thereof, of such new series of Preferred Stock,
taken as a whole, are not materially less favorable to the holders thereof than the rights, preferences, privileges and voting powers, and thequalifications, limitations and restrictions thereof, of the Series E, taken as a whole.
As used above, the term “Required Unrestricted Capital Provisions” means such terms and provisions as are, in the judgment of the
Corporation (after consultation with counsel of recognized standing), required for preferred stock to be treated as Allowable Capital or Tier 1 Capital
Equivalent, as applicable, without any sublimit or other quantitative restriction on the inclusion of such preferred stock in Allowable Capital or Tier 1
Capital Equivalent, as applicable (other than any limitation the Corporation elects to accept and any limitation requiring that common equity or a
specified form of common equity constitute the dominant form of Allowable Capital or Tier 1 Capital Equivalent) pursuant to the applicable
Regulations.
The Corporation shall provide notice to the holders of Series E of any election to qualify the Series E for Allowable Capital or Tier 1
Capital Equivalent treatment and of any determination to convert the Series E into a new series of Preferred Stock pursuant to the terms of thisSection 7, promptly upon the effectiveness of any such election or determination. A copy of such notice and of the relevant Regulations shall bemaintained on file at the principal offices of the Corporation and, upon request, will be made available to any stockholder of the Corporation. Any
conversion of the Series E pursuant to this Section 7 shall be effected pursuant to such procedures as the Corporation may determine and publicly
disclose.
Except as specified in this Section 7, holders of Series E shares shall have no right to exchange or convert such shares into any othersecurities.
Section 8. Voting Rights.
(a) General. The holders of Series E shall not have any voting rights except as set forth below or as otherwise from to time required bylaw.
(b) Right To Elect Two Directors Upon Nonpayment Events. If and whenever dividends on any shares of Series E shall not have been
declared and paid for Dividend Periods, whether or not consecutive, equivalent to at least eighteen months (a “Nonpayment Event”), the number of
directors then constituting the Board of Directors shall automatically be increased by two and the holders of Series E, together with the holders of any
outstanding shares of Voting Preferred Stock, voting together as a single class, shall be entitled to elect the two additional directors (the “Preferred Stock
Directors”), provided that it shall be a qualification for election for any such Preferred Stock Director that the election of such director shall not cause
the Corporation to violate
D-9the corporate governance requirement of the New York Stock Exchange (or any other securities exchange or other trading facility on which securities of
the Corporation may then be listed or traded) that listed or traded companies must have a majority of independent directors and provided further that theBoard of Directors shall at no time include more than two Preferred Stock Directors (including, for purposes of this limitation, all directors that theholders of any series of Voting Preferred Stock are entitled to elect pursuant to like voting rights).
In the event that the holders of the Series E, and such other holders of Voting Preferred Stock, shall be entitled to vote for the election of
the Preferred Stock Directors following a Nonpayment Event, such directors shall be initially elected following such Nonpayment Event only at a
special meeting called at the request of the holders of record of at least 20% of the Series E or of any other series of Voting Preferred Stock thenoutstanding (unless such request for a special meeting is received less than 90 days before the date fixed for the next annual or special meeting of thestockholders of the Corporation, in which event such election shall be held only at such next annual or special meeting of stockholders), and at eachsubsequent annual meeting of stockholders of the Corporation. Such request to call a special meeting for the initial election of the Preferred Stock
Directors after a Nonpayment Event shall be made by written notice, signed by the requisite holders of Series E or Voting Preferred Stock, and delivered
to the Secretary of the Corporation in such manner as provided for in Section 10 below, or as may otherwise be required by law.
When dividends have been paid (or declared and a sum sufficient for payment thereof set aside) in full on the Series E for Dividend
Periods, whether or not consecutive, equivalent to at least one year after a Nonpayment Event, then the right of the holders of Series E to elect thePreferred Stock Directors shall cease (but subject always to revesting of such voting rights in the case of any future Nonpayment Event), and, if andwhen any rights of holders of Series E and Voting Preferred Stock to elect the Preferred Stock Directors shall have ceased, the terms of office of all thePreferred Stock Directors shall forthwith terminate and the number of directors constituting the Board of Directors shall automatically be reduced
accordingly.
Any Preferred Stock Director may be removed at any time without cause by the holders of record of a majority of the outstanding sharesof the Series E and Voting Preferred Stock, when they have the voting rights described above (voting together as a single class). So long as a
Nonpayment Event shall continue, any vacancy in the office of a Preferred Stock Director (other than prior to the initial election of Preferred Stock
Directors after a Nonpayment Event) may be filled by the written consent of the Preferred Stock Director remaining in office, or if none remains in
office, by a vote of the holders of record of a majority of the outstanding shares of the Series E and all Voting Preferred Stock, when they have thevoting rights described above (voting together as a single class). Any such vote of stockholders to remove, or to fill a vacancy in the office of, aPreferred Stock Director may be taken only at a special meeting of such stockholders, called as provided above for an initial election of Preferred Stock
Director after a Nonpayment Event (unless such request is received less than 90 days before the date fixed for the next annual or special meeting of thestockholders, in which event such election shall be held at
D-10

such next annual or special meeting of stockholders). The Preferred Stock Directors shall each be entitled to one vote per director on any matter thatshall come before the Board of Directors for a vote. Each Preferred Stock Director elected at any special meeting of stockholders or by written consent
of the other Preferred Stock Director shall hold office until the next annual meeting of the stockholders if such office shall not have previously
terminated as above provided.
(c) Other Voting Rights. So long as any shares of Series E are outstanding, in addition to any other vote or consent of stockholders
required by law or by the Certificate of Incorporation, the vote or consent of the holders of at least 662⁄3% of the shares of Series E and any Voting
Preferred Stock at the time outstanding and entitled to vote thereon, voting together as a single class, given in person or by proxy, either in writing
without a meeting or by vote at any meeting called for the purpose, shall be necessary for effecting or validating:(i) Authorization of Senior Stock. Any amendment or alteration of the Certificate of Incorporation to authorize or create, or increase theauthorized amount of, any shares of any class or series of capital stock of the Corporation ranking senior to the Series E with respect to either orboth the payment of dividends and/or the distribution of assets on any liquidation, dissolution or winding up of the Corporation;(ii) Amendment of Series E. Any amendment, alteration or repeal of any provision of the Certificate of Incorporation so as to materiallyand adversely affect the special rights, preferences, privileges or voting powers of the Series E, taken as a whole; or(iii) Share Exchanges, Reclassifications, Mergers and Consolidations. Any consummation of a binding share exchange orreclassification involving the Series E, or of a merger or consolidation of the Corporation with another corporation or other entity, unless in eachcase (x) the shares of Series E remain outstanding or, in the case of any such merger or consolidation with respect to which the Corporation is
not the surviving or resulting entity, are converted into or exchanged for preference securities of the surviving or resulting entity or its ultimate
parent, and (y) such shares remaining outstanding or such preference securities, as the case may be, have such rights, preferences, privileges andvoting powers, and limitations and restrictions thereof, taken as a whole, as are not materially less favorable to the holders thereof than therights, preferences, privileges and voting powers, and limitations and restrictions thereof, of the Series E immediately prior to suchconsummation, taken as a whole;provided, however, that for all purposes of this Section 8(c), any increase in the amount of the authorized or issued Series E or authorized Preferred
Stock, or the creation and issuance, or an increase in the authorized or issued amount, of any other series of Preferred Stock ranking equally with and/or
junior to the Series E with respect to the payment of dividends (whether such dividends are cumulative or non-cumulative) and/or the distribution ofassets upon liquidation, dissolution or winding up of the Corporation will not be deemed to adversely affect the rights, preferences, privileges or voting
powers of the Series E. In addition, any conversion of the Series E pursuant to Section 7 above shall not be deemed to adversely affect the rights,
preferences, privileges and voting powers of the Series E.
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If any amendment, alteration, repeal, share exchange, reclassification, merger or consolidation specified in this Section 8(c) would
adversely affect the Series E and one or more but not all other series of Preferred Stock, then only the Series E and such series of Preferred Stock as areadversely affected by and entitled to vote on the matter shall vote on the matter together as a single class (in lieu of all other series of Preferred Stock).
(d) Changes for Clarification. Without the consent of the holders of the Series E, so long as such action does not adversely affect therights, preferences, privileges and voting powers, and limitations and restrictions thereof, of the Series E, the Corporation may amend, alter, supplement
or repeal any terms of the Series E:(i) to cure any ambiguity, or to cure, correct or supplement any provision contained in this Certificate of Designations that may be
defective or inconsistent; or(ii) to make any provision with respect to matters or questions arising with respect to the Series E that is not inconsistent with theprovisions of this Certificate of Designations.
(e) Changes after Provision for Redemption. No vote or consent of the holders of Series E shall be required pursuant to Section 8(b), (c)or (d) above if, at or prior to the time when any such vote or consent would otherwise be required pursuant to such Section, all outstanding shares ofSeries E shall have been redeemed, or shall have been called for redemption upon proper notice and sufficient funds shall have been set aside for such
redemption, in each case pursuant to Section 6 above.
(f) Procedures for Voting and Consents. The rules and procedures for calling and conducting any meeting of the holders of Series E(including, without limitation, the fixing of a record date in connection therewith), the solicitation and use of proxies at such a meeting, the obtaining of
written consents and any other aspect or matter with regard to such a meeting or such consents shall be governed by any rules the Board of Directors or
the Committee (or another duly authorized committee of the Board of Directors), in its discretion, may adopt from time to time, which rules andprocedures shall conform to the requirements of the Certificate of Incorporation, the Bylaws, applicable law and any national securities exchange orother trading facility on which the Series E is listed or traded at the time. Whether the vote or consent of the holders of a plurality, majority or otherportion of the shares of Series E and any Voting Preferred Stock has been cast or given on any matter on which the holders of shares of Series E are
entitled to vote shall be determined by the Corporation by reference to the specified liquidation amounts of the shares voted or covered by the consent.
D-12

Section 9. Record Holders. To the fullest extent permitted by applicable law, the Corporation and the transfer agent for the Series E may
deem and treat the record holder of any share of Series E as the true and lawful owner thereof for all purposes, and neither the Corporation nor suchtransfer agent shall be affected by any notice to the contrary.
Section 10. Notices. All notices or communications in respect of Series E shall be sufficiently given if given in writing and delivered inperson or by first class mail, postage prepaid, or if given in such other manner as may be permitted in this Certificate of Designations, in the Certificate
of Incorporation or Bylaws or by applicable law.
Section 11. No Preemptive Rights. No share of Series E shall have any rights of preemption whatsoever as to any securities of the
Corporation, or any warrants, rights or options issued or granted with respect thereto, regardless of how such securities, or such warrants, rights or
options, may be designated, issued or granted.
Section 12. Other Rights. The shares of Series E shall not have any voting powers, preferences or relative, participating, optional or otherspecial rights, or qualifications, limitations or restrictions thereof, other than as set forth herein or in the Certificate of Incorporation or as provided byapplicable law.

D-13

Appendix E

CERTIFICATE OF DESIGNATIONSOFPERPETUAL NON-CUMULATIVE PREFERRED STOCK, SERIES F
OF
THE GOLDMAN SACHS GROUP, INC.
THE GOLDMAN SACHS GROUP, INC., a corporation organized and existing under the General Corporation Law of the State of
Delaware (the “Corporation”), in accordance with the provisions of Sections 103 and 151 thereof, DOES HEREBY CERTIFY:
The Securities Issuance Committee (the “Committee”) of the board of directors of the Corporation (the “Board of Directors”), in
accordance with the resolutions of the Board of Directors dated September 16, 2005 and September 29, 2006, the provisions of the restated certificate ofincorporation and the amended and restated bylaws of the Corporation and applicable law, by unanimous written consent dated May 14, 2007, adopted
the following resolution creating a series of 5,000.1 shares of Preferred Stock of the Corporation designated as “Perpetual Non-Cumulative Preferred
Stock, Series F”.
RESOLVED, that pursuant to the authority vested in the Committee and in accordance with the resolutions of the Board of Directors
dated September 16, 2005 and September 29, 2006, the provisions of the restated certificate of incorporation and the amended and restated bylaws of the
Corporation and applicable law, a series of Preferred Stock, par value $.01 per share, of the Corporation be and hereby is created, and that thedesignation and number of shares of such series, and the voting and other powers, preferences and relative, participating, optional or other rights, andthe qualifications, limitations and restrictions thereof, of the shares of such series, are as follows:
Section 1. Designation. The distinctive serial designation of such series of Preferred Stock is “Perpetual Non-Cumulative Preferred Stock,
Series F” (“Series F”). Each share of Series F shall be identical in all respects to every other share of Series F.
Section 2. Number of Shares. The authorized number of shares of Series F shall be 5,000.1. Shares of Series F that are redeemed,purchased or otherwise acquired by the Corporation, or converted into another series of Preferred Stock, shall be cancelled and shall revert to authorized
but unissued shares of Series F.
Section 3. Definitions. As used herein with respect to Series F:(a) “Board of Directors” means the board of directors of the Corporation.

(b) “ByLaws” means the amended and restated bylaws of the Corporation, as they may be amended from time to time.
(c) “Business Day” means a day that is a Monday, Tuesday, Wednesday, Thursday or Friday and is not a day on which banking
institutions in New York City generally are authorized or obligated by law, regulation or executive order to close.
(d) “Calculation Agent” means, at any time, the person or entity appointed by the Corporation and serving as such agent at such time. The
Corporation may terminate any such appointment and may appoint a successor agent at any time and from time to time, provided that the
Corporation shall use its best efforts to ensure that there is, at all relevant times when the Series F is outstanding, a person or entity appointed
and serving as such agent. The Calculation Agent may be a person or entity affiliated with the Corporation.
(e) “Certificate of Designations” means this Certificate of Designations relating to the Series F, as it may be amended from time to time.
(f) “Certification of Incorporation” shall mean the restated certificate of incorporation of the Corporation, as it may be amended from time
to time, and shall include this Certificate of Designations.
(g) “Common Stock” means the common stock, par value $0.01 per share, of the Corporation.
(h) “Junior Stock” means the Common Stock and any other class or series of stock of the Corporation (other than Series F) that ranks
junior to Series F either or both as to the payment of dividends and/or as to the distribution of assets on any liquidation, dissolution or winding
up of the Corporation.
(i) “London Business Day” means a day that is a Monday, Tuesday, Wednesday, Thursday or Friday and is a day on which dealings in
U.S. dollars are transacted in the London interbank market.
(j) “Parity Stock” means any class or series of stock of the Corporation (other than Series F) that ranks equally with Series F both in thepayment of dividends and in the distribution of assets on any liquidation, dissolution or winding up of the Corporation.
(k) “Preferred Stock” means any and all series of Preferred Stock, having a par value of $0.01 per share, of the Corporation, including theSeries F.
(l) “Representative Amount” means, at any time, an amount that, in the Calculation Agent’s judgment, is representative of a single
transaction in the relevant market at the relevant time.
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(m) “Reuters Screen LIBOR01” means the display designated on the Reuters 3000 Xtra (or such other page as may replace that page onthat service or such other service as may be nominated by the British Bankers’ Association for the purpose of displaying London interbank
offered rates for U.S. Dollar deposits).
(n) “Voting Preferred Stock” means, with regard to any election or removal of a Preferred Stock Director (as defined in Section 8(b)below) or any other matter as to which the holders of Series F are entitled to vote as specified in Section 8 of this Certificate of Designations,any and all series of Preferred Stock (other than Series F) that rank equally with Series F either as to the payment of dividends or as to the
distribution of assets upon liquidation, dissolution or winding up of the Corporation and upon which like voting rights have been conferred andare exercisable with respect to such matter.
Section 4. Dividends.
(a) Rate. Holders of Series F shall be entitled to receive, when, as and if declared by the Board of Directors or the Committee (or another
duly authorized committee of the Board of Directors) out of funds legally available for the payment of dividends under Delaware law, non-cumulative
cash dividends at the rate determined as set forth below in this Section (4) applied to the liquidation preference amount of $100,000 per share of Series
F. Such dividends shall be payable quarterly in arrears (as provided below in this Section 4(a)), but only when, as and if declared by the Board of
Directors or the Committee (or another duly authorized committee of the Board of Directors), on March 1, June 1, September 1 and December 1 of eachyear (each a “Dividend Payment Date”); provided that if any such Dividend Payment Date would otherwise occur on a day that is not a Business Day,
such Dividend Payment Date shall instead be (and any dividend payable on Series F on such Dividend Payment Date shall instead be payable on) the
immediately succeeding Business Day. If a Dividend Payment Date is not a Business Day, the applicable dividend shall be paid on the first Business
Day following that day. Dividends on Series F shall not be cumulative; holders of Series F shall not be entitled to receive any dividends not declared by
the Board of Directors or the Committee (or another duly authorized committee of the Board of Directors) and no interest, or sum of money in lieu ofinterest, shall be payable in respect of any dividend not so declared.
Dividends that are payable on Series F on any Dividend Payment Date will be payable to holders of record of Series F as they appear on
the stock register of the Corporation on the applicable record date, which shall be the 15th calendar day before such Dividend Payment Date or suchother record date fixed by the Board of Directors or the Committee (or another duly authorized committee of the Board of Directors) that is not morethan 60 nor less than 10 days prior to such Dividend Payment Date (each, a “Dividend Record Date”). Any such day that is a Dividend Record Dateshall be a Dividend Record Date whether or not such day is a Business Day.
E-3

Each dividend period (a “Dividend Period”) shall commence on and include a Dividend Payment Date (other than the initial Dividend
Period, which shall commence on and include the date of original issue of the Series F) and shall end on and include the calendar day next preceding thenext Dividend Payment Date. Dividends payable on the Series F in respect of any Dividend Period shall be computed by the Calculation Agent on thebasis of a 360-day year and the actual number of days elapsed in such Dividend Period. Dividends payable in respect of a Dividend Period shall bepayable in arrears - i.e., on the first Dividend Payment Date after such Dividend Period.
The dividend rate on the Series F, for each Dividend Period, shall be (a) if the shares of Series F are issued prior to September 1, 2012, a
rate per annum equal to three-month LIBOR plus 0.77% until the Dividend Payment date in September 2012, and (b) thereafter, a rate per annum thatwill reset quarterly and shall be equal to the greater of (i) three-month LIBOR for such Dividend Period plus 0.77 % and (ii) 4.000%. Three-month
LIBOR, with respect to any Dividend Period, means the offered rate expressed as a percentage per annum for three-month deposits in U.S. dollars on
the first day of such Dividend Period, as that rate appears on Reuters Screen LIBOR01 (or any successor or replacement page) as of 11:00 A.M.,
London time, on the second London Business Day immediately preceding the first day of such Dividend Period.
If the rate described in the preceding paragraph does not appear on Reuters Screen LIBOR01(or any successor or replacement page),
LIBOR shall be determined on the basis of the rates, at approximately 11:00 A.M., London time, on the second London Business Day immediately
preceding the first day of such Dividend Period, at which deposits of the following kind are offered to prime banks in the London interbank market byfour major banks in that market selected by the Calculation Agent: three-month deposits in U.S. dollars, beginning on the first day of such Dividend
Period, and in a Representative Amount. The Calculation Agent shall request the principal London office of each of these banks to provide a quotationof its rate at approximately 11:00 A.M., London time. If at least two quotations are provided, LIBOR for such Dividend Period shall be the arithmetic
mean of such quotations.
If fewer than two quotations are provided as described in the preceding paragraph, LIBOR for such Dividend Period shall be the arithmetic
mean of the rates for loans of the following kind to leading European banks quoted, at approximately 11:00 A.M. New York City time, on the second
London Business Day immediately preceding the first day of such Dividend Period, by three major banks in New York City selected by the Calculation
Agent: three-month loans of U.S. dollars, beginning on the first day of such Dividend Period, and in a Representative Amount.
If fewer than three banks selected by the Calculation Agent are quoting as described in the preceding paragraph, LIBOR for such Dividend
Period shall be LIBOR in effect for the prior Dividend Period.
The Calculation Agent’s determination of any dividend rate, and its calculation of the amount of dividends for any Dividend Period, will
be maintained on file at the Corporation’s principal offices and will be available to any stockholder upon request and will be final and binding in theabsence of manifest error.
E-4

Holders of Series F shall not be entitled to any dividends, whether payable in cash, securities or other property, other than dividends (ifany) declared and payable on the Series F as specified in this Section 4 (subject to the other provisions of this Certificate of Designations).
(b) Priority of Dividends. So long as any share of Series F remains outstanding, no dividend shall be declared or paid on the Common
Stock or any other shares of Junior Stock (other than a dividend payable solely in Junior Stock), and no Common Stock or other Junior Stock shall bepurchased, redeemed or otherwise acquired for consideration by the Corporation, directly or indirectly (other than as a result of a reclassification of
Junior Stock for or into other Junior Stock, or the exchange or conversion of one share of Junior Stock for or into another share of Junior Stock andother than through the use of the proceeds of a substantially contemporaneous sale of Junior Stock) during a Dividend Period, unless the full dividends
for the latest completed Dividend Period on all outstanding shares of Series F have been declared and paid (or declared and a sum sufficient for thepayment thereof has been set aside). The foregoing provision shall not restrict the ability of Goldman, Sachs & Co., or any other affiliate of the
Corporation, to engage in any market-making transactions in Junior Stock in the ordinary course of business.
When dividends are not paid (or declared and a sum sufficient for payment thereof set aside) on any Dividend Payment Date (or, in thecase of Parity Stock having dividend payment dates different from the Dividend Payment Dates, on a dividend payment date falling within a Dividend
Period) in full upon the Series F and any shares of Parity Stock, all dividends declared on the Series F and all such Parity Stock and payable on such
Dividend Payment Date (or, in the case of parity stock having dividend payment dates different from the Dividend Payment Dates, on a dividend
payment date falling within the Dividend Period related to such Dividend Payment Date) shall be declared pro rata so that the respective amounts ofsuch dividends shall bear the same ratio to each other as all accrued but unpaid dividends per share on the Series F and all Parity Stock payable on such
Dividend Payment Date (or, in the case of Parity Stock having dividend payment dates different from the Dividend Payment Dates, on a dividend
payment date falling within the Dividend Period related to such Dividend Payment Date) bear to each other.
Subject to the foregoing, such dividends (payable in cash, securities or other property) as may be determined by the Board of Directors or
the Committee (or another duly authorized committee of the Board of Directors) may be declared and paid on any securities, including Common Stockand other Junior Stock, from time to time out of any funds legally available for such payment, and the Series F shall not be entitled to participate in any
such dividends.
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Section 5. Liquidation Rights.
(a) Voluntary or Involuntary Liquidation. In the event of any liquidation, dissolution or winding up of the affairs of the Corporation,
whether voluntary or involuntary, holders of Series F shall be entitled to receive, out of the assets of the Corporation or proceeds thereof (whether
capital or surplus) available for distribution to stockholders of the Corporation, and after satisfaction of all liabilities and obligations to creditors of the
Corporation, before any distribution of such assets or proceeds is made to or set aside for the holders of Common Stock and any other stock of the
Corporation ranking junior to the Series F as to such distribution, in full an amount equal to $100,000 per share (the “Series F Liquidation Amount”),
together with an amount equal to all dividends (if any) that have been declared but not paid prior to the date of payment of such distribution (but without
any amount in respect of dividends that have not been declared prior to such payment date).
(b) Partial Payment. If in any distribution described in Section 5(a) above the assets of the Corporation or proceeds thereof are notsufficient to pay the Liquidation Preferences (as defined below) in full to all holders of Series F and all holders of any stock of the Corporation ranking
equally with the Series F as to such distribution, the amounts paid to the holders of Series F and to the holders of all such other stock shall be paid pro
rata in accordance with the respective aggregate Liquidation Preferences of the holders of Series F and the holders of all such other stock. In any such
distribution, the “Liquidation Preference” of any holder of stock of the Corporation shall mean the amount otherwise payable to such holder in such
distribution (assuming no limitation on the assets of the Corporation available for such distribution), including an amount equal to any declared but
unpaid dividends (and, in the case of any holder of stock other than Series F and on which dividends accrue on a cumulative basis, an amount equal toany unpaid, accrued, cumulative dividends, whether or not declared, as applicable).
(c) Residual Distributions. If the Liquidation Preference has been paid in full to all holders of Series F, the holders of other stock of the
Corporation shall be entitled to receive all remaining assets of the Corporation (or proceeds thereof) according to their respective rights and preferences.
(d) Merger, Consolidation and Sale of Assets Not Liquidation. For purposes of this Section 5, the merger or consolidation of the
Corporation with any other corporation or other entity, including a merger or consolidation in which the holders of Series F receive cash, securities orother property for their shares, or the sale, lease or exchange (for cash, securities or other property) of all or substantially all of the assets of the
Corporation, shall not constitute a liquidation, dissolution or winding up of the Corporation.
Section 6. Redemption.
(a) Optional Redemption. The Series F may not be redeemed by the Corporation prior to the later of September 1, 2012 and the date oforiginal issue of Series F. On or after that date, the Corporation, at its option, may redeem, in whole at any time or in part from time to time, the sharesof Series F at the time outstanding, upon notice given as provided in Section 6(c) below, at a redemption price equal to $100,000 per share, together(except as otherwise provided herein) with an amount equal to any dividends that have been declared but not paid prior to the redemption date (but withno amount in respectE-6

of any dividends that have not been declared prior to such date). The redemption price for any shares of Series F shall be payable on the redemption dateto the holder of such shares against surrender of the certificate(s) evidencing such shares to the Corporation or its agent. Any declared but unpaid
dividends payable on a redemption date that occurs subsequent to the Dividend Record Date for a Dividend Period shall not be paid to the holder
entitled to receive the redemption price on the redemption date, but rather shall be paid to the holder of record of the redeemed shares on such DividendRecord Date relating to the Dividend Payment Date as provided in Section 4 above.
(b) No Sinking Fund. The Series F will not be subject to any mandatory redemption, sinking fund or other similar provisions. Holders ofSeries F will have no right to require redemption of any shares of Series F.
(c) Notice of Redemption. Notice of every redemption of shares of Series F shall be given by first class mail, postage prepaid, addressedto the holders of record of the shares to be redeemed at their respective last addresses appearing on the books of the Corporation. Such mailing shall be
at least 30 days and not more than 60 days before the date fixed for redemption. Any notice mailed as provided in this Subsection shall be conclusively
presumed to have been duly given, whether or not the holder receives such notice, but failure duly to give such notice by mail, or any defect in such
notice or in the mailing thereof, to any holder of shares of Series F designated for redemption shall not affect the validity of the proceedings for theredemption of any other shares of Series F. Notwithstanding the foregoing, if the Series F or any depositary shares representing interests in the Series F
are issued in book-entry form through The Depository Trust Company or any other similar facility, notice of redemption may be given to the holders ofSeries F at such time and in any manner permitted by such facility. Each such notice given to a holder shall state: (1) the redemption date; (2) the
number of shares of Series F to be redeemed and, if less than all the shares held by such holder are to be redeemed, the number of such shares to beredeemed from such holder; (3) the redemption price; and (4) the place or places where certificates for such shares are to be surrendered for payment of
the redemption price.
(d) Partial Redemption. In case of any redemption of only part of the shares of Series F at the time outstanding, the shares to beredeemed shall be selected either pro rata or in such other manner as the Corporation may determine to be fair and equitable. Subject to the provisions
hereof, the Corporation shall have full power and authority to prescribe the terms and conditions upon which shares of Series F shall be redeemed fromtime to time. If fewer than all the shares represented by any certificate are redeemed, a new certificate shall be issued representing the unredeemedshares without charge to the holder thereof.
(e) Effectiveness of Redemption. If notice of redemption has been duly given and if on or before the redemption date specified in thenotice all funds necessary for the redemption have been set aside by the Corporation, separate and apart from its other funds, in trust for the pro rata
benefit of the holders of the shares called for redemption, so as to be and continue to be available therefor, then, notwithstanding thatE-7

any certificate for any share so called for redemption has not been surrendered for cancellation, on and after the redemption date dividends shall cease toaccrue on all shares so called for redemption, all shares so called for redemption shall no longer be deemed outstanding and all rights with respect tosuch shares shall forthwith on such redemption date cease and terminate, except only the right of the holders thereof to receive the amount payable onsuch redemption, without interest. Any funds unclaimed at the end of three years from the redemption date shall, to the extent permitted by law, bereleased to the Corporation, after which time the holders of the shares so called for redemption shall look only to the Corporation for payment of theredemption price of such shares.
Section 7. Conversion Upon Regulatory Changes. If both (i) and (ii) below occur:(i) after the date of the issuance of the Series F, the Corporation (by election or otherwise) becomes subject to any law, rule, regulation or
guidance (together, “Regulations”) relating to its capital adequacy, which Regulation (x) modifies the existing requirements for treatment as
Allowable Capital (as defined under the Securities and Exchange Commission rules relating to consolidated supervised entities as in effect fromtime to time), (y) provides for a type or level of capital characterized as “Tier 1” or its equivalent pursuant to Regulations of any governmental
agency, authority or other body having regulatory jurisdiction over the Corporation (or any of its subsidiaries or consolidated affiliates) and
implementing the capital standards published by the Basel Committee on Banking Supervision, the Securities and Exchange Commission, theBoard of Governors of the Federal Reserve System or any other United States national governmental agency, authority or other body, or any
other applicable regime based on capital standards published by the Basel Committee on Banking Supervision or its successor, or (z) provides
for a type or level of capital that in the judgment of the Corporation (after consultation with legal counsel of recognized standing) is substantiallyequivalent to such “Tier 1” capital (such capital described in either (y) or (z) above is referred to below as “Tier 1 Capital Equivalent”), and(ii) the Corporation affirmatively elects to qualify the Series F for treatment as Allowable Capital or Tier 1 Capital Equivalent without any
sublimit or other quantitative restriction on the inclusion of the Series F in Allowable Capital or Tier 1 Capital Equivalent (other than any
limitation the Corporation elects to accept and any limitation requiring that common equity or a specified form of common equity constitute thedominant form of Allowable Capital or Tier 1 Capital Equivalent) under such Regulations,then, upon such affirmative election, the Series F shall be convertible at the Corporation’s option into a new series of Preferred Stock having terms andprovisions substantially identical to those of the Series F, except that such new series may have such additional or modified rights, preferences,privileges and voting powers, and limitations and restrictions thereof, as are necessary in the judgment of the Board of Directors or the Committee (oranother duly authorized committee of the Board of Directors) (after consultation with legal
E-8

counsel of recognized standing) to comply with the Required Unrestricted Capital Provisions (as defined below), provided that the Corporation will notcause any such conversion unless the Board of Directors or the Committee (or another duly authorized committee of the Board of Directors) determinesthat the rights, preferences, privileges and voting powers, and the qualifications, limitations and restrictions thereof, of such new series of Preferred
Stock, taken as a whole, are not materially less favorable to the holders thereof than the rights, preferences, privileges and voting powers, and thequalifications, limitations and restrictions thereof, of the Series F, taken as a whole.
As used above, the term “Required Unrestricted Capital Provisions” means such terms and provisions as are, in the judgment of the
Corporation (after consultation with counsel of recognized standing), required for preferred stock to be treated as Allowable Capital or Tier 1 Capital
Equivalent, as applicable, without any sublimit or other quantitative restriction on the inclusion of such preferred stock in Allowable Capital or Tier 1
Capital Equivalent, as applicable (other than any limitation the Corporation elects to accept and any limitation requiring that common equity or a
specified form of common equity constitute the dominant form of Allowable Capital or Tier 1 Capital Equivalent) pursuant to the applicable
Regulations.
The Corporation shall provide notice to the holders of Series F of any election to qualify the Series F for Allowable Capital or Tier 1
Capital Equivalent treatment and of any determination to convert the Series F into a new series of Preferred Stock pursuant to the terms of thisSection 7, promptly upon the effectiveness of any such election or determination. A copy of such notice and of the relevant Regulations shall bemaintained on file at the principal offices of the Corporation and, upon request, will be made available to any stockholder of the Corporation. Any
conversion of the Series F pursuant to this Section 7 shall be effected pursuant to such procedures as the Corporation may determine and publicly
disclose.
Except as specified in this Section 7, holders of Series F shares shall have no right to exchange or convert such shares into any othersecurities.
Section 8. Voting Rights.
(a) General. The holders of Series F shall not have any voting rights except as set forth below or as otherwise from to time required bylaw.
(b) Right To Elect Two Directors Upon Nonpayment Events. If and whenever dividends on any shares of Series F shall not have been
declared and paid for at least six Dividend Periods, whether or not consecutive (a “Nonpayment Event”), the number of directors then constituting theBoard of Directors shall automatically be increased by two and the holders of Series F, together with the holders of any outstanding shares of Voting
Preferred Stock, voting together as a single class, shall be entitled to elect the two additional directors (the “Preferred Stock Directors”), provided that itshall be a qualification for election for any such Preferred Stock Director that the election of such director shall not cause the Corporation to violate thecorporate governance requirement of the New York Stock Exchange (or any other securities exchange or other trading facility on
E-9which securities of the Corporation may then be listed or traded) that listed or traded companies must have a majority of independent directors andprovided further that the Board of Directors shall at no time include more than two Preferred Stock Directors (including, for purposes of this limitation,
all directors that the holders of any series of Voting Preferred Stock are entitled to elect pursuant to like voting rights).
In the event that the holders of the Series F, and such other holders of Voting Preferred Stock, shall be entitled to vote for the election of
the Preferred Stock Directors following a Nonpayment Event, such directors shall be initially elected following such Nonpayment Event only at a
special meeting called at the request of the holders of record of at least 20% of the Series F or of any other series of Voting Preferred Stock thenoutstanding (unless such request for a special meeting is received less than 90 days before the date fixed for the next annual or special meeting of thestockholders of the Corporation, in which event such election shall be held only at such next annual or special meeting of stockholders), and at eachsubsequent annual meeting of stockholders of the Corporation. Such request to call a special meeting for the initial election of the Preferred Stock
Directors after a Nonpayment Event shall be made by written notice, signed by the requisite holders of Series F or Voting Preferred Stock, and delivered
to the Secretary of the Corporation in such manner as provided for in Section 10 below, or as may otherwise be required by law.
When dividends have been paid (or declared and a sum sufficient for payment thereof set aside) in full on the Series F for at least four Dividend
Periods (whether or not consecutive) after a Nonpayment Event, then the right of the holders of Series F to elect the Preferred Stock Directors shallcease (but subject always to revesting of such voting rights in the case of any future Nonpayment Event), and, if and when any rights of holders ofSeries F and Voting Preferred Stock to elect the Preferred Stock Directors shall have ceased, the terms of office of all the Preferred Stock Directors shallforthwith terminate and the number of directors constituting the Board of Directors shall automatically be reduced accordingly.
Any Preferred Stock Director may be removed at any time without cause by the holders of record of a majority of the outstanding shares of theSeries F and Voting Preferred Stock, when they have the voting rights described above (voting together as a single class). So long as a Nonpayment
Event shall continue, any vacancy in the office of a Preferred Stock Director (other than prior to the initial election of Preferred Stock Directors after a
Nonpayment Event) may be filled by the written consent of the Preferred Stock Director remaining in office, or if none remains in office, by a vote of
the holders of record of a majority of the outstanding shares of the Series F and all Voting Preferred Stock, when they have the voting rights describedabove (voting together as a single class). Any such vote of stockholders to remove, or to fill a vacancy in the office of, a Preferred Stock Director may
be taken only at a special meeting of such stockholders, called as provided above for an initial election of Preferred Stock Director after a Nonpayment
Event (unless such request is received less than 90 days before the date fixed for the next annual or special meeting of the stockholders, in which event
such election shall be held at such next annual or special meeting of stockholders). The Preferred Stock Directors shall each be entitled to one vote perdirector on any matter that shall come before the Board of Directors for a vote. Each Preferred Stock Director elected at any special meeting ofstockholders or by written consent of the other Preferred Stock Director shall hold office until the next annual meeting of the stockholders if such officeshall not have previously terminated as above provided.
E-10(c) Other Voting Rights. So long as any shares of Series F are outstanding, in addition to any other vote or consent of stockholders
required by law or by the Certificate of Incorporation, the vote or consent of the holders of at least 662⁄3% of the shares of Series F and any Voting
Preferred Stock at the time outstanding and entitled to vote thereon, voting together as a single class, given in person or by proxy, either in writing
without a meeting or by vote at any meeting called for the purpose, shall be necessary for effecting or validating:(i) Authorization of Senior Stock. Any amendment or alteration of the Certificate of Incorporation to authorize or create, or increase theauthorized amount of, any shares of any class or series of capital stock of the Corporation ranking senior to the Series F with respect to either orboth the payment of dividends and/or the distribution of assets on any liquidation, dissolution or winding up of the Corporation;(ii) Amendment of Series F. Any amendment, alteration or repeal of any provision of the Certificate of Incorporation so as to materiallyand adversely affect the special rights, preferences, privileges or voting powers of the Series F, taken as a whole; or(iii) Share Exchanges, Reclassifications, Mergers and Consolidations. Any consummation of a binding share exchange orreclassification involving the Series F, or of a merger or consolidation of the Corporation with another corporation or other entity, unless in eachcase (x) the shares of Series F remain outstanding or, in the case of any such merger or consolidation with respect to which the Corporation is
not the surviving or resulting entity, are converted into or exchanged for preference securities of the surviving or resulting entity or its ultimate
parent, and (y) such shares remaining outstanding or such preference securities, as the case may be, have such rights, preferences, privileges andvoting powers, and limitations and restrictions thereof, taken as a whole, as are not materially less favorable to the holders thereof than therights, preferences, privileges and voting powers, and limitations and restrictions thereof, of the Series F immediately prior to suchconsummation, taken as a whole;provided, however, that for all purposes of this Section 8(c), any increase in the amount of the authorized or issued Series F or authorized Preferred
Stock, or the creation and issuance, or an increase in the authorized or issued amount, of any other series of Preferred Stock ranking equally with and/or
junior to the Series F with respect to the payment of dividends (whether such dividends are cumulative or non-cumulative) and/or the distribution ofassets upon liquidation, dissolution or winding up of the Corporation will not be deemed to adversely affect the rights, preferences, privileges or voting
powers of the Series F. In addition, any conversion of the Series F pursuant to Section 7 above shall not be deemed to adversely affect the rights,
preferences, privileges and voting powers of the Series F.
E-11

If any amendment, alteration, repeal, share exchange, reclassification, merger or consolidation specified in this Section 8(c) would
adversely affect the Series F and one or more but not all other series of Preferred Stock, then only the Series F and such series of Preferred Stock as areadversely affected by and entitled to vote on the matter shall vote on the matter together as a single class (in lieu of all other series of Preferred Stock).
(d) Changes for Clarification. Without the consent of the holders of the Series F, so long as such action does not adversely affect therights, preferences, privileges and voting powers, and limitations and restrictions thereof, of the Series F, the Corporation may amend, alter, supplement
or repeal any terms of the Series F:(i) to cure any ambiguity, or to cure, correct or supplement any provision contained in this Certificate of Designations that may be
defective or inconsistent; or(ii) to make any provision with respect to matters or questions arising with respect to the Series F that is not inconsistent with theprovisions of this Certificate of Designations.
(e) Changes after Provision for Redemption. No vote or consent of the holders of Series F shall be required pursuant to Section 8(b), (c)or (d) above if, at or prior to the time when any such vote or consent would otherwise be required pursuant to such Section, all outstanding shares ofSeries F shall have been redeemed, or shall have been called for redemption upon proper notice and sufficient funds shall have been set aside for such
redemption, in each case pursuant to Section 6 above.
(f) Procedures for Voting and Consents. The rules and procedures for calling and conducting any meeting of the holders of Series F(including, without limitation, the fixing of a record date in connection therewith), the solicitation and use of proxies at such a meeting, the obtaining of
written consents and any other aspect or matter with regard to such a meeting or such consents shall be governed by any rules the Board of Directors or
the Committee (or another duly authorized committee of the Board of Directors), in its discretion, may adopt from time to time, which rules andprocedures shall conform to the requirements of the Certificate of Incorporation, the Bylaws, applicable law and any national securities exchange orother trading facility on which the Series F is listed or traded at the time. Whether the vote or consent of the holders of a plurality, majority or otherportion of the shares of Series F and any Voting Preferred Stock has been cast or given on any matter on which the holders of shares of Series F are
entitled to vote shall be determined by the Corporation by reference to the specified liquidation amounts of the shares voted or covered by the consent.
E-12

Section 9. Record Holders. To the fullest extent permitted by applicable law, the Corporation and the transfer agent for the Series F may
deem and treat the record holder of any share of Series F as the true and lawful owner thereof for all purposes, and neither the Corporation nor suchtransfer agent shall be affected by any notice to the contrary.
Section 10. Notices. All notices or communications in respect of Series F shall be sufficiently given if given in writing and delivered inperson or by first class mail, postage prepaid, or if given in such other manner as may be permitted in this Certificate of Designations, in the Certificate
of Incorporation or Bylaws or by applicable law.
Section 11. No Preemptive Rights. No share of Series F shall have any rights of preemption whatsoever as to any securities of the
Corporation, or any warrants, rights or options issued or granted with respect thereto, regardless of how such securities, or such warrants, rights or
options, may be designated, issued or granted.
Section 12. Other Rights. The shares of Series F shall not have any voting powers, preferences or relative, participating, optional or otherspecial rights, or qualifications, limitations or restrictions thereof, other than as set forth herein or in the Certificate of Incorporation or as provided byapplicable law.

E-13

Appendix F

CERTIFICATE OF DESIGNATIONS
OF
5.50% FIXED-TO-FLOATING RATE NON-CUMULATIVEPREFERRED STOCK, SERIES J
OF
THE GOLDMAN SACHS GROUP, INC.
THE GOLDMAN SACHS GROUP, INC., a corporation organized and existing under the General Corporation Law of the State of
Delaware (the “Corporation”), in accordance with the provisions of Sections 103 and 151 thereof, DOES HEREBY CERTIFY:
The Securities Issuance Committee (the “Committee”) of the board of directors of the Corporation (the “Board of Directors”), in
accordance with the resolutions of the Board of Directors dated October 28, 2011, the provisions of the restated certificate of incorporation and theamended and restated bylaws of the Corporation and applicable law, at a meeting duly called and held on April 22, 2013, adopted the following
resolution creating a series of 46,000 shares of Preferred Stock of the Corporation designated as “5.50% Fixed-to-Floating Rate Non-Cumulative
Preferred Stock, Series J”.
RESOLVED, that pursuant to the authority vested in the Committee and in accordance with the resolutions of the Board of Directors
dated October 28, 2011, the provisions of the restated certificate of incorporation and the amended and restated bylaws of the Corporation andapplicable law, a series of Preferred Stock, par value $.01 per share, of the Corporation be and hereby is created, and that the designation and number ofshares of such series, and the voting and other powers, preferences and relative, participating, optional or other rights, and the qualifications, limitations
and restrictions thereof, of the shares of such series, are as follows:
Section 1. Designation. The distinctive serial designation of such series of Preferred Stock is “5.50% Fixed-to-Floating Rate
Non-Cumulative Preferred Stock, Series J” (“Series J”). Each share of Series J shall be identical in all respects to every other share of Series J, except as
to the respective dates from which dividends thereon shall accrue, to the extent such dates may differ as permitted pursuant to Section 4(a) below.
Section 2. Number of Shares. The authorized number of shares of Series J shall be 46,000. Shares of Series J that are redeemed,purchased or otherwise acquired by the Corporation shall be cancelled and shall revert to authorized but unissued shares of Series J.

Section 3. Definitions. As used herein with respect to Series J:(a) “Appropriate Federal Banking Agency” means the “appropriate federal banking agency” with respect to the Corporation as that term isdefined in Section 3(q) of the Federal Deposit Insurance Act or any successor provision.
(b) “Board of Directors” means the board of directors of the Corporation.
(c) “ByLaws” means the amended and restated bylaws of the Corporation, as they may be amended from time to time.
(d) “Business Day” means a day that is a Monday, Tuesday, Wednesday, Thursday or Friday and is not a day on which banking
institutions in New York City generally are authorized or obligated by law, regulation or executive order to close.
(e) “Calculation Agent” means, at any time, the person or entity appointed by the Corporation and serving as such agent at such time. The
Corporation may terminate any such appointment and may appoint a successor agent at any time and from time to time, provided that the
Corporation shall use its best efforts to ensure that there is, at all relevant times when the Series J is outstanding, a person or entity appointed andserving as such agent. The Calculation Agent may be a person or entity affiliated with the Corporation.
(f) “Certificate of Designations” means this Certificate of Designations relating to the Series J, as it may be amended from time to time.
(g) “Certification of Incorporation” shall mean the restated certificate of incorporation of the Corporation, as it may be amended from time
to time, and shall include this Certificate of Designations.
(h) “Common Stock” means the common stock, par value $0.01 per share, of the Corporation.
(i) “Junior Stock” means the Common Stock and any other class or series of stock of the Corporation (other than Series J) that ranks junior
to Series J either or both as to the payment of dividends and/or as to the distribution of assets on any liquidation, dissolution or winding up of the
Corporation.
(j) “London Business Day” means a day that is a Monday, Tuesday, Wednesday, Thursday or Friday and is a day on which dealings in
U.S. dollars are transacted in the London interbank market.
(k) “Parity Stock” means any class or series of stock of the Corporation (other than Series J) that ranks equally with Series J both in thepayment of dividends and in the distribution of assets on any liquidation, dissolution or winding up of the Corporation.
F-2

(l) “Preferred Stock” means any and all series of Preferred Stock, having a par value of $0.01 per share, of the Corporation, including theSeries J.
(m) “Regulatory Capital Treatment Event” means the good faith determination by the Corporation that, as a result of (i) any amendment
to, or change in, the laws or regulations of the United States or any political subdivision of or in the United States that is enacted or becomes
effective after the initial issuance of any share of the Series J (ii) any proposed change in those laws or regulations that is announced or becomes
effective after the initial issuance of any share of Series J, or (iii) any official administrative decision or judicial decision or administrative action
or other official pronouncement interpreting or applying those laws or regulations that is announced after the initial issuance of any share ofSeries J, there is more than an insubstantial risk that the Corporation will not be entitled to treat the full liquidation preference amount of$25,000 per share of Series J then outstanding as “tier 1 capital” (or its equivalent) for purposes of the capital adequacy guidelines of the Boardof Governors of the Federal Reserve System (or, as and if applicable, the capital adequacy guidelines or regulations of any successor
Appropriate Federal Banking Agency) as then in effect and applicable, for so long as any share of Series J is outstanding.
(n) “Representative Amount” means, at any time, an amount that, in the Calculation Agent’s judgment, is representative of a single
transaction in the relevant market at the relevant time.
(o) “Reuters screen” means the display on the Reuters 3000 Xtra service, or any successor or replacement service.
(p) “Voting Preferred Stock” means, with regard to any election or removal of a Preferred Stock Director (as defined in Section 7(b)below) or any other matter as to which the holders of Series J are entitled to vote as specified in Section 7 of this Certificate of Designations, any
and all series of Preferred Stock (other than Series J) that rank equally with Series J either as to the payment of dividends or as to the distributionof assets upon liquidation, dissolution or winding up of the Corporation and upon which like voting rights have been conferred and are
exercisable with respect to such matter.
Section 4. Dividends.
(a) Rate. Holders of Series J shall be entitled to receive, when, as and if declared by the Board of Directors or the Committee (or another
duly authorized committee of the Board of Directors) out of funds legally available for the payment of dividends under Delaware law, non-cumulative
cash dividends at the rate determined as set forth below in this Section (4) applied to the liquidation preference amount of $25,000 per share of Series J.
Such dividends shall be payable quarterly in arrears (as provided below in
F-3

this Section 4(a)), but only when, as and if declared by the Board of Directors or the Committee (or another duly authorized committee of the Board of
Directors), on February 10, May 10, August 10 and November 10 (“Dividend Payment Dates”), commencing on August 10, 2013; provided that if any
such Dividend Payment Date would otherwise occur on a day that is not a Business Day, such Dividend Payment Date shall instead be (and any
dividend payable on Series J on such Dividend Payment Date shall instead be payable on) the immediately succeeding Business Day unless, after
May 10, 2023, such immediately succeeding Business Day falls in the next calendar month, in which case such Dividend Payment Date shall instead be(and any such Dividend shall instead be payable on) the immediately preceding Business Day. Dividends on Series J shall not be cumulative; holders ofSeries J shall not be entitled to receive any dividends not declared by the Board of Directors or the Committee (or another duly authorized committee of
the Board of Directors) and no interest, or sum of money in lieu of interest, shall be payable in respect of any dividend not so declared.
Dividends on the Series J shall not be declared or set aside for payment if and to the extent such dividends would cause the Corporation to
fail to comply with the capital adequacy guidelines of the Board of Governors of the Federal Reserve System (or, as and if applicable, the capital
adequacy guidelines or regulations of any successor Appropriate Federal Banking Agency) applicable to the Corporation.
Dividends that are payable on Series J on any Dividend Payment Date will be payable to holders of record of Series J as they appear on thestock register of the Corporation on the applicable record date, which shall be the 15th calendar day before such Dividend Payment Date or such otherrecord date fixed by the Board of Directors or the Committee (or another duly authorized committee of the Board of Directors) that is not more than 60
nor less than 10 days prior to such Dividend Payment Date (each, a “Dividend Record Date”). Any such day that is a Dividend Record Date shall be a
Dividend Record Date whether or not such day is a Business Day.
Each dividend period (a “Dividend Period”) shall commence on and include a Dividend Payment Date (other than the initial Dividend
Period, which shall commence on and include the date of original issue of the Series J, provided that, for any share of Series J issued after such originalissue date, the initial Dividend Period for such shares may commence on and include such other date as the Board of Directors or the Committee (oranother duly authorized committee of the Board of Directors) shall determine and publicly disclose) and shall end on and include the calendar day next
preceding the next Dividend Payment Date. Dividends payable on the Series J in respect of any Dividend Period beginning prior to May 10, 2023 shallbe calculated on the basis of a 360-day year consisting of twelve 30-day months, and dividends payable on the Series J in respect of any Dividend
Period beginning on or after May 10, 2023 shall be calculated by the Calculation Agent on the basis of a 360-day year and the actual number of days
elapsed in such Dividend Period. Dividends payable in respect of a Dividend Period shall be payable in arrears - i.e., on the first Dividend Payment Dateafter such Dividend Period.
F-4

The dividend rate on the Series J, for each Dividend Period beginning prior to May 10, 2023, shall be a rate per annum equal to 5.50%,
and the dividend rate on the Series J, for each Dividend Period beginning on or after May 10, 2023, shall be a rate per annum equal to LIBOR (asdefined below) for such Dividend Period plus 3.64%. LIBOR, with respect to any Dividend Period beginning on or after May 10, 2023, means theoffered rate expressed as a percentage per annum for three-month deposits in U.S. dollars on the first day of such Dividend Period, as that rate appears
on Reuters screen LIBOR01 (or any successor or replacement page) as of approximately 11:00 A.M., London time, on the second London Business Day
immediately preceding the first day of such Dividend Period.
If the rate described in the preceding paragraph does not appear on the Reuters screen LIBOR01 (or any successor or replacement page),
LIBOR shall be determined on the basis of the rates, at approximately 11:00 A.M., London time, on the second London Business Day immediately
preceding the first day of such Dividend Period, at which deposits of the following kind are offered to prime banks in the London interbank market byfour major banks in that market selected by the Calculation Agent: three-month deposits in U.S. dollars, beginning on the first day of such Dividend
Period, and in a Representative Amount. The Calculation Agent shall request the principal London office of each of these banks to provide a quotationof its rate at approximately 11:00 A.M., London time. If at least two quotations are provided, LIBOR for such Dividend Period shall be the arithmetic
mean of such quotations.
If fewer than two quotations are provided as described in the preceding paragraph, LIBOR for such Dividend Period shall be the arithmetic
mean of the rates for loans of the following kind to leading European banks quoted, at approximately 11:00 A.M., New York City time, on the second
London Business Day immediately preceding the first day of such Dividend Period, by three major banks in New York City selected by the Calculation
Agent: three-month loans of U.S. dollars, beginning on the first day of such Dividend Period, and in a Representative Amount.
If no quotation is provided as described in the preceding paragraph, then the Calculation Agent, after consulting such sources as it deems
comparable to any of the foregoing quotations or display page, or any such source as it deems reasonable from which to estimate LIBOR or any of theforegoing lending rates, shall determine LIBOR for such Dividend Period in its sole discretion.
The Calculation Agent’s determination of any dividend rate, and its calculation of the amount of dividends for any Dividend Period, will
be maintained on file at the Corporation’s principal offices, will be made available to any stockholder upon request and will be final and binding in theabsence of manifest error.
Holders of Series J shall not be entitled to any dividends, whether payable in cash, securities or other property, other than dividends (ifany) declared and payable on the Series J as specified in this Section 4 (subject to the other provisions of this Certificate of Designations).
F-5

(b) Priority of Dividends. So long as any share of Series J remains outstanding, no dividend shall be declared or paid on the Common
Stock or any other shares of Junior Stock (other than a dividend payable solely in Junior Stock), and no Common Stock or other Junior Stock shall bepurchased, redeemed or otherwise acquired for consideration by the Corporation, directly or indirectly (other than as a result of a reclassification of
Junior Stock for or into other Junior Stock, or the exchange or conversion of one share of Junior Stock for or into another share of Junior Stock andother than through the use of the proceeds of a substantially contemporaneous sale of Junior Stock) during a Dividend Period, unless the full dividends
for the latest completed Dividend Period on all outstanding shares of Series J have been declared and paid (or declared and a sum sufficient for thepayment thereof has been set aside). The foregoing provision shall not restrict the ability of Goldman, Sachs & Co., or any other affiliate of the
Corporation, to engage in any market-making transactions in Junior Stock in the ordinary course of business.
When dividends are not paid (or declared and a sum sufficient for payment thereof set aside) on any Dividend Payment Date (or, in thecase of Parity Stock having dividend payment dates different from the Dividend Payment Dates, on a dividend payment date falling within a Dividend
Period) in full upon the Series J and any shares of Parity Stock, all dividends declared on the Series J and all such Parity Stock and payable on such
Dividend Payment Date (or, in the case of parity stock having dividend payment dates different from the Dividend Payment Dates, on a dividend
payment date falling within the Dividend Period related to such Dividend Payment Date) shall be declared pro rata so that the respective amounts ofsuch dividends shall bear the same ratio to each other as all accrued but unpaid dividends per share on the Series J and all Parity Stock payable on such
Dividend Payment Date (or, in the case of Parity Stock having dividend payment dates different from the Dividend Payment Dates, on a dividend
payment date falling within the Dividend Period related to such Dividend Payment Date) bear to each other.
Subject to the foregoing, such dividends (payable in cash, securities or other property) as may be determined by the Board of Directors or
the Committee (or another duly authorized committee of the Board of Directors) may be declared and paid on any securities, including Common Stockand other Junior Stock, from time to time out of any funds legally available for such payment, and the Series J shall not be entitled to participate in any
such dividends.
Section 5. Liquidation Rights.
(a) Voluntary or Involuntary Liquidation. In the event of any liquidation, dissolution or winding up of the affairs of the Corporation,
whether voluntary or involuntary, holders of Series J shall be entitled to receive, out of the assets of the Corporation or proceeds thereof (whether capitalor surplus) available for distribution to stockholders of the Corporation, and after satisfaction of all liabilities and obligations to creditors of the
Corporation, before any distribution of such assets or proceeds is made to or set aside for the holders of Common Stock and any other stock of the
Corporation ranking junior to the Series J as to such distribution, in full an amount equal to $25,000 per share (the “Series J Liquidation Amount”),
together with an amount equal to all dividends (if any) that have been declared but not paid prior to the date of payment of such distribution (but without
any amount in respect of dividends that have not been declared prior to such payment date).
F-6(b) Partial Payment. If in any distribution described in Section 5(a) above the assets of the Corporation or proceeds thereof are notsufficient to pay the Liquidation Preferences (as defined below) in full to all holders of Series J and all holders of any stock of the Corporation ranking
equally with the Series J as to such distribution, the amounts paid to the holders of Series J and to the holders of all such other stock shall be paid pro
rata in accordance with the respective aggregate Liquidation Preferences of the holders of Series J and the holders of all such other stock. In any such
distribution, the “Liquidation Preference” of any holder of stock of the Corporation shall mean the amount otherwise payable to such holder in such
distribution (assuming no limitation on the assets of the Corporation available for such distribution), including an amount equal to any declared but
unpaid dividends (and, in the case of any holder of stock other than Series J and on which dividends accrue on a cumulative basis, an amount equal toany unpaid, accrued, cumulative dividends, whether or not declared, as applicable).
(c) Residual Distributions. If the Liquidation Preference has been paid in full to all holders of Series J, the holders of other stock of the
Corporation shall be entitled to receive all remaining assets of the Corporation (or proceeds thereof) according to their respective rights and preferences.
(d) Merger, Consolidation and Sale of Assets Not Liquidation. For purposes of this Section 5, the merger or consolidation of the
Corporation with any other corporation or other entity, including a merger or consolidation in which the holders of Series J receive cash, securities orother property for their shares, or the sale, lease or exchange (for cash, securities or other property) of all or substantially all of the assets of the
Corporation, shall not constitute a liquidation, dissolution or winding up of the Corporation.
Section 6. Redemption.
(a) Optional Redemption. The Series J is perpetual and has no maturity date. The Corporation may, at its option, redeem the shares ofSeries J at the time outstanding, upon notice given as provided in Section 6(c) below, (i) in whole or in part, from time to time, on any date on or after
May 10, 2023, or (ii) in whole but not in part at any time within 90 days following a Regulatory Capital Treatment Event, in each case, at a redemption
price equal to $25,000 per share, together (except as otherwise provided hereinbelow) with an amount equal to any dividends that have accrued but notbeen paid for the then-current Dividend Period to but excluding the redemption date, whether or not such dividends have been declared. The redemption
price for any shares of Series J shall be payable on the redemption date to the holder of such shares against surrender of the certificate(s) evidencing
such shares to the Corporation or its agent. Any declared but unpaid dividends payable on a redemption date that occurs subsequent to the Dividend
F-7

Record Date for a Dividend Period shall not be paid to the holder entitled to receive the redemption price on the redemption date, but rather shall be paid
to the holder of record of the redeemed shares on such Dividend Record Date relating to the Dividend Payment Date as provided in Section 4 above.
Notwithstanding the foregoing, the Corporation may not redeem shares of Series J without having received the prior approval of the Appropriate Federal
Banking Agency if then required under capital guidelines applicable to the Corporation.
(b) No Sinking Fund. The Series J will not be subject to any mandatory redemption, sinking fund or other similar provisions. Holders ofSeries J will have no right to require redemption of any shares of Series J.
(c) Notice of Redemption. Notice of every redemption of shares of Series J shall be given by first class mail, postage prepaid, addressedto the holders of record of the shares to be redeemed at their respective last addresses appearing on the books of the Corporation. Such mailing shall be
at least 30 days and not more than 60 days before the date fixed for redemption. Any notice mailed as provided in this Subsection shall be conclusively
presumed to have been duly given, whether or not the holder receives such notice, but failure duly to give such notice by mail, or any defect in such
notice or in the mailing thereof, to any holder of shares of Series J designated for redemption shall not affect the validity of the proceedings for theredemption of any other shares of Series J. Notwithstanding the foregoing, if the Series J or any depositary shares representing interests in the Series J
are issued in book-entry form through The Depository Trust Company or any other similar facility, notice of redemption may be given to the holders ofSeries J at such time and in any manner permitted by such facility. Each such notice given to a holder shall state: (1) the redemption date; (2) the numberof shares of Series J to be redeemed and, if less than all the shares held by such holder are to be redeemed, the number of such shares to be redeemedfrom such holder; (3) the redemption price; and (4) the place or places where certificates for such shares are to be surrendered for payment of theredemption price.
(d) Partial Redemption. In case of any redemption of only part of the shares of Series J at the time outstanding, the shares to be redeemedshall be selected either pro rata or in such other manner as the Corporation may determine to be fair and equitable. Subject to the provisions hereof, theCorporation shall have full power and authority to prescribe the terms and conditions upon which shares of Series J shall be redeemed from time to time.
If fewer than all the shares represented by any certificate are redeemed, a new certificate shall be issued representing the unredeemed shares withoutcharge to the holder thereof.
(e) Effectiveness of Redemption. If notice of redemption has been duly given and if on or before the redemption date specified in thenotice all funds necessary for the redemption have been set aside by the Corporation, separate and apart from its other funds, in trust for the pro rata
benefit of the holders of the shares called for redemption, so as to be and continue to be available therefor, then, notwithstanding that any certificate forany share so called for redemption has not been surrendered for
F-8

cancellation, on and after the redemption date dividends shall cease to accrue on all shares so called for redemption, all shares so called for redemption
shall no longer be deemed outstanding and all rights with respect to such shares shall forthwith on such redemption date cease and terminate, except
only the right of the holders thereof to receive the amount payable on such redemption, without interest. Any funds unclaimed at the end of three years
from the redemption date shall, to the extent permitted by law, be released to the Corporation, after which time the holders of the shares so called forredemption shall look only to the Corporation for payment of the redemption price of such shares.
Section 7. Voting Rights.
(a) General. The holders of Series J shall not have any voting rights except as set forth below or as otherwise from time to time requiredby law.
(b) Right To Elect Two Directors Upon Nonpayment Events. If and whenever dividends on any shares of Series J shall not have been
declared and paid for at least six Dividend Periods, whether or not consecutive (a “Nonpayment Event”), the number of directors then constituting theBoard of Directors shall automatically be increased by two and the holders of Series J, together with the holders of any outstanding shares of Voting
Preferred Stock, voting together as a single class, shall be entitled to elect the two additional directors (the “Preferred Stock Directors”), provided thatthe Board of Directors shall at no time include more than two Preferred Stock Directors (including, for purposes of this limitation, all directors that theholders of any series of Voting Preferred Stock are entitled to elect pursuant to like voting rights).
In the event that the holders of the Series J, and such other holders of Voting Preferred Stock, shall be entitled to vote for the election of
the Preferred Stock Directors following a Nonpayment Event, such directors shall be initially elected following such Nonpayment Event only at a
special meeting called at the request of the holders of record of at least 20% of the Series J or of any other series of Voting Preferred Stock thenoutstanding (unless such request for a special meeting is received less than 90 days before the date fixed for the next annual or special meeting of thestockholders of the Corporation, in which event such election shall be held only at such next annual or special meeting of stockholders), and at eachsubsequent annual meeting of stockholders of the Corporation. Such request to call a special meeting for the initial election of the Preferred Stock
Directors after a Nonpayment Event shall be made by written notice, signed by the requisite holders of Series J or Voting Preferred Stock, and delivered
to the Secretary of the Corporation in such manner as provided for in Section 9 below, or as may otherwise be required by law.
When dividends have been paid (or declared and a sum sufficient for payment thereof set aside) in full on the Series J for four consecutive
Dividend Periods after a Nonpayment Event, then the right of the holders of Series J to elect the Preferred Stock Directors shall cease (but subject
always to revesting of such voting rights in the case of any future Nonpayment Event), and, if and when any rights of holders of Series J and Voting
Preferred Stock to elect the Preferred Stock Directors shall have ceased, the terms of office of all the Preferred Stock Directors shall forthwith terminate
and the number of directors constituting the Board of Directors shall automatically be reduced accordingly.
F-9Any Preferred Stock Director may be removed at any time without cause by the holders of record of a majority of the outstanding sharesof the Series J and Voting Preferred Stock, when they have the voting rights described above (voting together as a single class). So long as a
Nonpayment Event shall continue, any vacancy in the office of a Preferred Stock Director (other than prior to the initial election of Preferred Stock
Directors after a Nonpayment Event) may be filled by the written consent of the Preferred Stock Director remaining in office, or if none remains in
office, by a vote of the holders of record of a majority of the outstanding shares of the Series J and all Voting Preferred Stock, when they have the voting
rights described above (voting together as a single class). Any such vote of stockholders to remove, or to fill a vacancy in the office of, a Preferred Stock
Director may be taken only at a special meeting of such stockholders, called as provided above for an initial election of Preferred Stock Director after a
Nonpayment Event (unless such request is received less than 90 days before the date fixed for the next annual or special meeting of the stockholders, inwhich event such election shall be held at such next annual or special meeting of stockholders). The Preferred Stock Directors shall each be entitled to
one vote per director on any matter that shall come before the Board of Directors for a vote. Each Preferred Stock Director elected at any special
meeting of stockholders or by written consent of the other Preferred Stock Director shall hold office until the next annual meeting of the stockholders if
such office shall not have previously terminated as above provided.
(c) Other Voting Rights. So long as any shares of Series J are outstanding, in addition to any other vote or consent of stockholders
required by law or by the Certificate of Incorporation, the vote or consent of the holders of at least 662⁄3% of the shares of Series J and any Voting
Preferred Stock at the time outstanding and entitled to vote thereon, voting together as a single class, given in person or by proxy, either in writing
without a meeting or by vote at any meeting called for the purpose, shall be necessary for effecting or validating:(i) Authorization of Senior Stock. Any amendment or alteration of the Certificate of Incorporation to authorize or create, or increase theauthorized amount of, any shares of any class or series of capital stock of the Corporation ranking senior to the Series J with respect to either orboth the payment of dividends and/or the distribution of assets on any liquidation, dissolution or winding up of the Corporation;(ii) Amendment of Series J. Any amendment, alteration or repeal of any provision of the Certificate of Incorporation so as to materiallyand adversely affect the special rights, preferences, privileges or voting powers of the Series J, taken as a whole; or
F-10(iii) Share Exchanges, Reclassifications, Mergers and Consolidations. Any consummation of a binding share exchange orreclassification involving the Series J, or of a merger or consolidation of the Corporation with another corporation or other entity, unless in eachcase (x) the shares of Series J remain outstanding or, in the case of any such merger or consolidation with respect to which the Corporation is not
the surviving or resulting entity, are converted into or exchanged for preference securities of the surviving or resulting entity or its ultimate
parent, and (y) such shares remaining outstanding or such preference securities, as the case may be, have such rights, preferences, privileges andvoting powers, and limitations and restrictions thereof, taken as a whole, as are not materially less favorable to the holders thereof than therights, preferences, privileges and voting powers, and limitations and restrictions thereof, of the Series J immediately prior to suchconsummation, taken as a whole;provided, however, that for all purposes of this Section 7(c), any increase in the amount of the authorized or issued Series J or authorized Preferred
Stock, or the creation and issuance, or an increase in the authorized or issued amount, of any other series of Preferred Stock ranking equally with and/or
junior to the Series J with respect to the payment of dividends (whether such dividends are cumulative or non-cumulative) and/or the distribution ofassets upon liquidation, dissolution or winding up of the Corporation will not be deemed to adversely affect the rights, preferences, privileges or voting
powers of the Series J.
If any amendment, alteration, repeal, share exchange, reclassification, merger or consolidation specified in this Section 7(c) would
adversely affect the Series J and one or more but not all other series of Preferred Stock, then only the Series J and such series of Preferred Stock as areadversely affected by and entitled to vote on the matter shall vote on the matter together as a single class (in lieu of all other series of Preferred Stock).
(d) Changes for Clarification. Without the consent of the holders of the Series J, so long as such action does not adversely affect therights, preferences, privileges and voting powers, and limitations and restrictions thereof, of the Series J, the Corporation may amend, alter, supplement
or repeal any terms of the Series J:(i) to cure any ambiguity, or to cure, correct or supplement any provision contained in this Certificate of Designations that may be
defective or inconsistent; or(ii) to make any provision with respect to matters or questions arising with respect to the Series J that is not inconsistent with theprovisions of this Certificate of Designations.
(e) Changes after Provision for Redemption. No vote or consent of the holders of Series J shall be required pursuant to Section 7(b), (c)or (d) above if, at or prior to the time when any such vote or consent would otherwise be required pursuant to such Section, all outstanding shares ofSeries J shall have been redeemed, or shall have been called for redemption upon proper notice and sufficient funds shall have been set aside for such
redemption, in each case pursuant to Section 6 above.
F-11

(f) Procedures for Voting and Consents. The rules and procedures for calling and conducting any meeting of the holders of Series J(including, without limitation, the fixing of a record date in connection therewith), the solicitation and use of proxies at such a meeting, the obtaining of
written consents and any other aspect or matter with regard to such a meeting or such consents shall be governed by any rules the Board of Directors or
the Committee (or another duly authorized committee of the Board of Directors), in its discretion, may adopt from time to time, which rules andprocedures shall conform to the requirements of the Certificate of Incorporation, the Bylaws, applicable law and any national securities exchange orother trading facility on which the Series J is listed or traded at the time. Whether the vote or consent of the holders of a plurality, majority or otherportion of the shares of Series J and any Voting Preferred Stock has been cast or given on any matter on which the holders of shares of Series J are
entitled to vote shall be determined by the Corporation by reference to the specified liquidation amounts of the shares voted or covered by the consent.
Section 8. Record Holders. To the fullest extent permitted by applicable law, the Corporation and the transfer agent for the Series J may
deem and treat the record holder of any share of Series J as the true and lawful owner thereof for all purposes, and neither the Corporation nor suchtransfer agent shall be affected by any notice to the contrary.
Section 9. Notices. All notices or communications in respect of Series J shall be sufficiently given if given in writing and delivered inperson or by first class mail, postage prepaid, or if given in such other manner as may be permitted in this Certificate of Designations, in the Certificate
of Incorporation or Bylaws or by applicable law.
Section 10. No Preemptive Rights. No share of Series J shall have any rights of preemption whatsoever as to any securities of the
Corporation, or any warrants, rights or options issued or granted with respect thereto, regardless of how such securities, or such warrants, rights or
options, may be designated, issued or granted.
Section 11. Other Rights. The shares of Series J shall not have any voting powers, preferences or relative, participating, optional or otherspecial rights, or qualifications, limitations or restrictions thereof, other than as set forth herein or in the Certificate of Incorporation or as provided byapplicable law.
F-12

Appendix G
CERTIFICATE OF DESIGNATIONS
OF
6.375% FIXED-TO-FLOATING RATE NON-CUMULATIVEPREFERRED STOCK, SERIES K
OF
THE GOLDMAN SACHS GROUP, INC.
THE GOLDMAN SACHS GROUP, INC., a corporation organized and existing under the General Corporation Law of the State of
Delaware (the “Corporation”), in accordance with the provisions of Sections 103 and 151 thereof, DOES HEREBY CERTIFY:
The Securities Issuance Committee (the “Committee”) of the board of directors of the Corporation (the “Board of Directors”), in
accordance with the resolutions of the Board of Directors dated October 28, 2011, the provisions of the restated certificate of incorporation and theamended and restated bylaws of the Corporation and applicable law, at a meeting duly called and held on April 24, 2014, adopted the following
resolution creating a series of 32,200 shares of Preferred Stock of the Corporation designated as “6.375% Fixed-to-Floating Rate Non-Cumulative
Preferred Stock, Series K”.
RESOLVED, that pursuant to the authority vested in the Committee and in accordance with the resolutions of the Board of Directors
dated October 28, 2011, the provisions of the restated certificate of incorporation and the amended and restated bylaws of the Corporation andapplicable law, a series of Preferred Stock, par value $.01 per share, of the Corporation be and hereby is created, and that the designation and number ofshares of such series, and the voting and other powers, preferences and relative, participating, optional or other rights, and the qualifications, limitations
and restrictions thereof, of the shares of such series, are as follows:
Section 1. Designation. The distinctive serial designation of such series of Preferred Stock is “6.375% Fixed-to-Floating Rate
Non-Cumulative Preferred Stock, Series K” (“Series K”). Each share of Series K shall be identical in all respects to every other share of Series K, except
as to the respective dates from which dividends thereon shall accrue, to the extent such dates may differ as permitted pursuant to Section 4(a) below.
Section 2. Number of Shares. The authorized number of shares of Series K shall be 32,200. Shares of Series K that are redeemed,purchased or otherwise acquired by the Corporation shall be cancelled and shall revert to authorized but unissued shares of Series K.

Section 3. Definitions. As used herein with respect to Series K:(a) “Appropriate Federal Banking Agency” means the “appropriate federal banking agency” with respect to the Corporation as that term isdefined in Section 3(q) of the Federal Deposit Insurance Act or any successor provision.
(b) “Board of Directors” means the board of directors of the Corporation.
(c) “ByLaws” means the amended and restated bylaws of the Corporation, as they may be amended from time to time.
(d) “Business Day” means a day that is a Monday, Tuesday, Wednesday, Thursday or Friday and is not a day on which banking
institutions in New York City generally are authorized or obligated by law, regulation or executive order to close.
(e) “Calculation Agent” means, at any time, the person or entity appointed by the Corporation and serving as such agent at such time. The
Corporation may terminate any such appointment and may appoint a successor agent at any time and from time to time, provided that the
Corporation shall use its best efforts to ensure that there is, at all relevant times when the Series K is outstanding, a person or entity appointed
and serving as such agent. The Calculation Agent may be a person or entity affiliated with the Corporation.
(f) “Certificate of Designations” means this Certificate of Designations relating to the Series K, as it may be amended from time to time.
(g) “Certification of Incorporation” shall mean the restated certificate of incorporation of the Corporation, as it may be amended from time
to time, and shall include this Certificate of Designations.
(h) “Common Stock” means the common stock, par value $0.01 per share, of the Corporation.
(i) “Junior Stock” means the Common Stock and any other class or series of stock of the Corporation (other than Series K) that ranks
junior to Series K either or both as to the payment of dividends and/or as to the distribution of assets on any liquidation, dissolution or winding
up of the Corporation.
(j) “London Business Day” means a day that is a Monday, Tuesday, Wednesday, Thursday or Friday and is a day on which dealings in
U.S. dollars are transacted in the London interbank market.
(k) “Parity Stock” means any class or series of stock of the Corporation (other than Series K) that ranks equally with Series K both in thepayment of dividends and in the distribution of assets on any liquidation, dissolution or winding up of the Corporation.
G-2

(l) “Preferred Stock” means any and all series of Preferred Stock, having a par value of $0.01 per share, of the Corporation, including theSeries K.
(m) “Regulatory Capital Treatment Event” means the good faith determination by the Corporation that, as a result of (i) any amendment
to, or change in, the laws, rules or regulations of the United States or any political subdivision of or in the United States that is enacted or
becomes effective after the initial issuance of any share of Series K, (ii) any proposed change in those laws, rules or regulations that isannounced or becomes effective after the initial issuance of any share of Series K, or (iii) any official administrative decision or judicial decisionor administrative action or other official pronouncement interpreting or applying those laws, rules or regulations or policies with respect thereto
that is announced after the initial issuance of any share of Series K, there is more than an insubstantial risk that the Corporation will not be
entitled to treat the full liquidation preference amount of $25,000 per share of Series K then outstanding as “tier 1 capital” (or its equivalent) for
purposes of the capital adequacy guidelines of the Board of Governors of the Federal Reserve System (or, as and if applicable, the capital
adequacy guidelines or regulations of any successor Appropriate Federal Banking Agency) as then in effect and applicable, for so long as any
share of Series K is outstanding.
(n) “Representative Amount” means, at any time, an amount that, in the Calculation Agent’s judgment, is representative of a single
transaction in the relevant market at the relevant time.
(o) “Reuters screen” means the display on the Reuters 3000 Xtra service, or any successor or replacement service.
(p) “Voting Preferred Stock” means, with regard to any election or removal of a Preferred Stock Director (as defined in Section 7(b)below) or any other matter as to which the holders of Series K are entitled to vote as specified in Section 7 of this Certificate of Designations,any and all series of Preferred Stock (other than Series K) that rank equally with Series K either as to the payment of dividends or as to the
distribution of assets upon liquidation, dissolution or winding up of the Corporation and upon which like voting rights have been conferred andare exercisable with respect to such matter.
Section 4. Dividends.
(a) Rate. Holders of Series K shall be entitled to receive, when, as and if declared by the Board of Directors or the Committee (or another
duly authorized committee of the Board of Directors) out of funds legally available for the payment of dividends under Delaware law, non-cumulative
cash dividends per each share of Series K at the rate determined as set forth below in this Section (4) applied to the liquidation
G-3

preference amount of $25,000 per share of Series K. Such dividends shall be payable quarterly in arrears (as provided below in this Section 4(a)), but
only when, as and if declared by the Board of Directors or the Committee (or another duly authorized committee of the Board of Directors), on
February 10, May 10, August 10 and November 10 (“Dividend Payment Dates”), commencing on August 10, 2014; provided that if any such Dividend
Payment Date would otherwise occur on a day that is not a Business Day, such Dividend Payment Date shall instead be (and any dividend payable on
Series K on such Dividend Payment Date shall instead be payable on) the immediately succeeding Business Day unless, after May 10, 2024, such
immediately succeeding Business Day falls in the next calendar month, in which case such Dividend Payment Date shall instead be (and any such
Dividend shall instead be payable on) the immediately preceding Business Day. Dividends on Series K shall not be cumulative; holders of Series K shallnot be entitled to receive any dividends not declared by the Board of Directors or the Committee (or another duly authorized committee of the Board of
Directors) and no interest, or sum of money in lieu of interest, shall be payable in respect of any dividend not so declared.
Dividends on the Series K shall not be declared or set aside for payment if and to the extent such dividends would cause the Corporation to
fail to comply with the capital adequacy guidelines of the Board of Governors of the Federal Reserve System (or, as and if applicable, the capital
adequacy guidelines or regulations of any successor Appropriate Federal Banking Agency) applicable to the Corporation.
Dividends that are payable on Series K on any Dividend Payment Date will be payable to holders of record of Series K as they appear on
the stock register of the Corporation on the applicable record date, which shall be the 15th calendar day before such Dividend Payment Date or suchother record date fixed by the Board of Directors or the Committee (or another duly authorized committee of the Board of Directors) that is not morethan 60 nor less than 10 days prior to such Dividend Payment Date (each, a “Dividend Record Date”). Any such day that is a Dividend Record Dateshall be a Dividend Record Date whether or not such day is a Business Day.
Each dividend period (a “Dividend Period”) shall commence on and include a Dividend Payment Date (other than the initial Dividend
Period, which shall commence on and include the date of original issue of the Series K, provided that, for any share of Series K issued after suchoriginal issue date, the initial Dividend Period for such shares may commence on and include such other date as the Board of Directors or theCommittee (or another duly authorized committee of the Board of Directors) shall determine and publicly disclose) and shall end on and include thecalendar day next preceding the next Dividend Payment Date. Dividends payable on the Series K in respect of any Dividend Period beginning prior to
May 10, 2024 shall be calculated on the basis of a 360-day year consisting of twelve 30-day months, and dividends payable on the Series K in respect of
any Dividend Period beginning on or after May 10, 2024 shall be calculated by the Calculation Agent on the basis of a 360-day year and the actual
number of days elapsed in such Dividend Period. Dividends payable in respect of a Dividend Period shall be payable in arrears - i.e., on the first
Dividend Payment Date after such Dividend Period.
G-4

The dividend rate on the Series K, for each Dividend Period beginning prior to May 10, 2024, shall be a rate per annum equal to 6.375%,
and the dividend rate on the Series K, for each Dividend Period beginning on or after May 10, 2024, shall be a rate per annum equal to LIBOR (asdefined below) for such Dividend Period plus 3.55%. LIBOR, with respect to any Dividend Period beginning on or after May 10, 2024, means theoffered rate expressed as a percentage per annum for three-month deposits in U.S. dollars on the first day of such Dividend Period, as that rate appears
on Reuters screen LIBOR01 (or any successor or replacement page) as of approximately 11:00 A.M., London time, on the second London Business Day
immediately preceding the first day of such Dividend Period.
If the rate described in the preceding paragraph does not appear on the Reuters screen LIBOR01 (or any successor or replacement page),
LIBOR shall be determined on the basis of the rates, at approximately 11:00 A.M., London time, on the second London Business Day immediately
preceding the first day of such Dividend Period, at which deposits of the following kind are offered to prime banks in the London interbank market byfour major banks in that market selected by the Calculation Agent: three-month deposits in U.S. dollars, beginning on the first day of such Dividend
Period, and in a Representative Amount. The Calculation Agent shall request the principal London office of each of these banks to provide a quotationof its rate at approximately 11:00 A.M., London time. If at least two quotations are provided, LIBOR for such Dividend Period shall be the arithmetic
mean of such quotations.
If fewer than two quotations are provided as described in the preceding paragraph, LIBOR for such Dividend Period shall be the arithmetic
mean of the rates for loans of the following kind to leading European banks quoted, at approximately 11:00 A.M., New York City time, on the second
London Business Day immediately preceding the first day of such Dividend Period, by three major banks in New York City selected by the Calculation
Agent: three-month loans of U.S. dollars, beginning on the first day of such Dividend Period, and in a Representative Amount.
If no quotation is provided as described in the preceding paragraph, then the Calculation Agent, after consulting such sources as it deems
comparable to any of the foregoing quotations or display page, or any such source as it deems reasonable from which to estimate LIBOR or any of theforegoing lending rates, shall determine LIBOR for such Dividend Period in its sole discretion.
The Calculation Agent’s determination of any dividend rate, and its calculation of the amount of dividends for any Dividend Period, will
be maintained on file at the Corporation’s principal offices, will be made available to any stockholder upon request and will be final and binding in theabsence of manifest error.
Holders of Series K shall not be entitled to any dividends, whether payable in cash, securities or other property, other than dividends (ifany) declared and payable on the Series K as specified in this Section 4 (subject to the other provisions of this Certificate of Designations).
G-5

(b) Priority of Dividends. So long as any share of Series K remains outstanding, no dividend shall be declared or paid on the Common
Stock or any other shares of Junior Stock (other than a dividend payable solely in Junior Stock), and no Common Stock or other Junior Stock shall bepurchased, redeemed or otherwise acquired for consideration by the Corporation, directly or indirectly (other than as a result of a reclassification of
Junior Stock for or into other Junior Stock, or the exchange or conversion of one share of Junior Stock for or into another share of Junior Stock andother than through the use of the proceeds of a substantially contemporaneous sale of Junior Stock) during a Dividend Period, unless the full dividends
for the latest completed Dividend Period on all outstanding shares of Series K have been declared and paid (or declared and a sum sufficient for thepayment thereof has been set aside). The foregoing provision shall not restrict the ability of Goldman, Sachs & Co., or any other affiliate of the
Corporation, to engage in any market-making transactions in Junior Stock in the ordinary course of business.
When dividends are not paid (or declared and a sum sufficient for payment thereof set aside) on any Dividend Payment Date (or, in thecase of Parity Stock having dividend payment dates different from the Dividend Payment Dates, on a dividend payment date falling within a Dividend
Period) in full upon the Series K and any shares of Parity Stock, all dividends declared on the Series K and all such Parity Stock and payable on such
Dividend Payment Date (or, in the case of parity stock having dividend payment dates different from the Dividend Payment Dates, on a dividend
payment date falling within the Dividend Period related to such Dividend Payment Date) shall be declared pro rata so that the respective amounts ofsuch dividends shall bear the same ratio to each other as all accrued but unpaid dividends per share on the Series K and all Parity Stock payable on such
Dividend Payment Date (or, in the case of Parity Stock having dividend payment dates different from the Dividend Payment Dates, on a dividend
payment date falling within the Dividend Period related to such Dividend Payment Date) bear to each other.
Subject to the foregoing, such dividends (payable in cash, securities or other property) as may be determined by the Board of Directors or
the Committee (or another duly authorized committee of the Board of Directors) may be declared and paid on any securities, including Common Stockand other Junior Stock, from time to time out of any funds legally available for such payment, and the Series K shall not be entitled to participate in any
such dividends.
Section 5. Liquidation Rights.
(a) Voluntary or Involuntary Liquidation. In the event of any liquidation, dissolution or winding up of the affairs of the Corporation,
whether voluntary or involuntary, holders of Series K shall be entitled to receive, out of the assets of the Corporation or proceeds thereof (whether
capital or surplus) available for distribution to stockholders of the Corporation, and after satisfaction of all liabilities and obligations to creditors of the
Corporation, before any distribution of such assets or proceeds is made to or set aside for the holders of Common Stock and any other stock of the
Corporation ranking junior to the Series K as to such distribution, in full an amount equal to $25,000 per share, together with an amount equal to all
dividends (if any) that have been declared but not paid prior to the date of payment of such distribution (but without any amount in respect of dividends
that have not been declared prior to such payment date).
G-6(b) Partial Payment. If in any distribution described in Section 5(a) above the assets of the Corporation or proceeds thereof are notsufficient to pay the Liquidation Preferences (as defined below) in full to all holders of Series K and all holders of any stock of the Corporation ranking
equally with the Series K as to such distribution, the amounts paid to the holders of Series K and to the holders of all such other stock shall be paid pro
rata in accordance with the respective aggregate Liquidation Preferences of the holders of Series K and the holders of all such other stock. In any such
distribution, the “Liquidation Preference” of any holder of stock of the Corporation shall mean the amount otherwise payable to such holder in such
distribution (assuming no limitation on the assets of the Corporation available for such distribution), including an amount equal to any declared but
unpaid dividends (and, in the case of any holder of stock other than Series K and on which dividends accrue on a cumulative basis, an amount equal toany unpaid, accrued, cumulative dividends, whether or not declared, as applicable).
(c) Residual Distributions. If the Liquidation Preference has been paid in full to all holders of Series K, the holders of other stock of the
Corporation shall be entitled to receive all remaining assets of the Corporation (or proceeds thereof) according to their respective rights and preferences.
(d) Merger, Consolidation and Sale of Assets Not Liquidation. For purposes of this Section 5, the merger or consolidation of the
Corporation with any other corporation or other entity, including a merger or consolidation in which the holders of Series K receive cash, securities orother property for their shares, or the sale, lease or exchange (for cash, securities or other property) of all or substantially all of the assets of the
Corporation, shall not constitute a liquidation, dissolution or winding up of the Corporation.
Section 6. Redemption.
(a) Optional Redemption. The Series K is perpetual and has no maturity date. The Corporation may, at its option, redeem the shares ofSeries K at the time outstanding, upon notice given as provided in Section 6(c) below, (i) in whole or in part, from time to time, on any date on or after
May 10, 2024 (or, if not a Business Day, the next succeeding Business Day), or (ii) in whole but not in part at any time within 90 days following a
Regulatory Capital Treatment Event, in each case, at a redemption price per share equal to $25,000, plus (except as otherwise provided hereinbelow) an
amount equal to any dividends per share that have accrued but not been paid for the then-current Dividend Period to but excluding the redemption date,whether or not such dividends have been declared. The redemption price for any shares of Series K shall be payable on the redemption date to the holderof such shares against surrender of the certificate(s) evidencing such shares to the Corporation or its agent. Any declared but unpaid dividends payable
on a redemption date that occurs subsequent to the Dividend Record Date for a
G-7

Dividend Period shall not be paid to the holder entitled to receive the redemption price on the redemption date, but rather shall be paid to the holder ofrecord of the redeemed shares on such Dividend Record Date relating to the Dividend Payment Date as provided in Section 4 above. Notwithstanding
the foregoing, the Corporation may not redeem shares of Series K without having received the prior approval of the Appropriate Federal Banking
Agency if then required under capital guidelines applicable to the Corporation.
(b) No Sinking Fund. The Series K will not be subject to any mandatory redemption, sinking fund or other similar provisions. Holders ofSeries K will have no right to require redemption of any shares of Series K.
(c) Notice of Redemption. Notice of every redemption of shares of Series K shall be given by first class mail, postage prepaid, addressedto the holders of record of the shares to be redeemed at their respective last addresses appearing on the books of the Corporation. Such mailing shall be
at least 30 days and not more than 60 days before the date fixed for redemption. Any notice mailed as provided in this Subsection shall be conclusively
presumed to have been duly given, whether or not the holder receives such notice, but failure duly to give such notice by mail, or any defect in such
notice or in the mailing thereof, to any holder of shares of Series K designated for redemption shall not affect the validity of the proceedings for theredemption of any other shares of Series K. Notwithstanding the foregoing, if the Series K or any depositary shares representing interests in the Series K
are issued in book-entry form through The Depository Trust Company or any other similar facility, notice of redemption may be given to the holders ofSeries K at such time and in any manner permitted by such facility. Each such notice given to a holder shall state: (1) the redemption date; (2) the
number of shares of Series K to be redeemed and, if less than all the shares held by such holder are to be redeemed, the number of such shares to beredeemed from such holder; (3) the redemption price; and (4) the place or places where certificates for such shares are to be surrendered for payment of
the redemption price.
(d) Partial Redemption. In case of any redemption of only part of the shares of Series K at the time outstanding, the shares to beredeemed shall be selected either pro rata or by lot. Subject to the provisions hereof, the Corporation shall have full power and authority to prescribe theterms and conditions upon which shares of Series K shall be redeemed from time to time. If fewer than all the shares represented by any certificate areredeemed, a new certificate shall be issued representing the unredeemed shares without charge to the holder thereof.
(e) Effectiveness of Redemption. If notice of redemption has been duly given and if on or before the redemption date specified in thenotice all funds necessary for the redemption have been set aside by the Corporation, separate and apart from its other funds, in trust for the pro rata
benefit of the holders of the shares called for redemption, so as to be and continue to be available therefor, then, notwithstanding that any certificate forany share so called for redemption has not been surrendered for cancellation, on and after the redemption date dividends shall cease to accrue on all
shares so called for redemption, all shares so called for redemption shall no longer be deemedG-8

outstanding and all rights with respect to such shares shall forthwith on such redemption date cease and terminate, except only the right of the holders
thereof to receive the amount payable on such redemption, without interest. Any funds unclaimed at the end of three years from the redemption dateshall, to the extent permitted by law, be released to the Corporation, after which time the holders of the shares so called for redemption shall look only to
the Corporation for payment of the redemption price of such shares.
Section 7. Voting Rights.
(a) General. The holders of Series K shall not have any voting rights except as set forth below or as otherwise from time to time requiredby law.
(b) Right To Elect Two Directors Upon Nonpayment Events. If and whenever dividends on any shares of Series K shall not have been
declared and paid for at least six Dividend Periods, whether or not consecutive (a “Nonpayment Event”), the number of directors then constituting theBoard of Directors shall automatically be increased by two and the holders of Series K, together with the holders of all outstanding shares of Voting
Preferred Stock, voting together as a single class, shall be entitled to elect the two additional directors (the “Preferred Stock Directors”), provided thatthe Board of Directors shall at no time include more than two Preferred Stock Directors (including, for purposes of this limitation, all directors that theholders of any series of Voting Preferred Stock are entitled to elect pursuant to like voting rights).
In the event that the holders of the Series K, and such other holders of Voting Preferred Stock, shall be entitled to vote for the election of
the Preferred Stock Directors following a Nonpayment Event, such directors shall be initially elected following such Nonpayment Event only at a
special meeting called at the request of the holders of record of at least 20% of the Series K or of any other series of Voting Preferred Stock thenoutstanding (unless such request for a special meeting is received less than 90 days before the date fixed for the next annual or special meeting of thestockholders of the Corporation, in which event such election shall be held only at such next annual or special meeting of stockholders), and at eachsubsequent annual meeting of stockholders of the Corporation. Such request to call a special meeting for the initial election of the Preferred Stock
Directors after a Nonpayment Event shall be made by written notice, signed by the requisite holders of Series K or any series of Voting Preferred Stock,and delivered to the Secretary of the Corporation in such manner as provided for in Section 9 below, or as may otherwise be required by law.
When dividends have been paid (or declared and a sum sufficient for payment thereof set aside) in full on the Series K for four
consecutive Dividend Periods after a Nonpayment Event, then the right of the holders of Series K to elect the Preferred Stock Directors shall cease (butsubject always to revesting of such voting rights in the case of any future Nonpayment Event), and, if and when any rights of holders of Series K and
Voting Preferred Stock to elect the Preferred Stock Directors shall have ceased, the terms of office of all the Preferred Stock Directors shall forthwith
terminate and the number of directors constituting the Board of Directors shall automatically be reduced accordingly.
G-9Any Preferred Stock Director may be removed at any time without cause by the holders of record of a majority of all of the outstanding
shares of the Series K and Voting Preferred Stock, when they have the voting rights described above (voting together as a single class). So long as a
Nonpayment Event shall continue, any vacancy in the office of a Preferred Stock Director (other than prior to the initial election of Preferred Stock
Directors after a Nonpayment Event) may be filled by the written consent of the Preferred Stock Director remaining in office, or if none remains in
office, by a vote of the holders of record of a majority of all of the outstanding shares of the Series K and Voting Preferred Stock, when they have thevoting rights described above (voting together as a single class). Any such vote of stockholders to remove, or to fill a vacancy in the office of, aPreferred Stock Director may be taken only at a special meeting of such stockholders, called as provided above for an initial election of Preferred Stock
Director after a Nonpayment Event (unless such request is received less than 90 days before the date fixed for the next annual or special meeting of thestockholders, in which event such election shall be held at such next annual or special meeting of stockholders). The Preferred Stock Directors shalleach be entitled to one vote per director on any matter that shall come before the Board of Directors for a vote. Each Preferred Stock Director elected atany special meeting of stockholders or by written consent of the other Preferred Stock Director shall hold office until the next annual meeting of thestockholders if such office shall not have previously terminated as above provided.
(c) Other Voting Rights. So long as any shares of Series K are outstanding, in addition to any other vote or consent of stockholders
required by law or by the Certificate of Incorporation, the vote or consent of the holders of at least 662⁄3% of the shares of Series K and any Voting
Preferred Stock at the time outstanding and entitled to vote thereon, voting together as a single class, given in person or by proxy, either in writing
without a meeting or by vote at any meeting called for the purpose, shall be necessary for effecting or validating:(i) Authorization of Senior Stock. Any amendment or alteration of the Certificate of Incorporation to authorize or create, or increase theauthorized amount of, any shares of any class or series of capital stock of the Corporation ranking senior to the Series K with respect to either orboth the payment of dividends and/or the distribution of assets on any liquidation, dissolution or winding up of the Corporation;(ii) Amendment of Series K. Any amendment, alteration or repeal of any provision of the Certificate of Incorporation so as to materiallyand adversely affect the special rights, preferences, privileges or voting powers of the Series K, taken as a whole; or
G-10(iii) Share Exchanges, Reclassifications, Mergers and Consolidations. Any consummation of a binding share exchange orreclassification involving the Series K, or of a merger or consolidation of the Corporation with another corporation or other entity, unless in eachcase (x) the shares of Series K remain outstanding or, in the case of any such merger or consolidation with respect to which the Corporation is
not the surviving or resulting entity, are converted into or exchanged for preference securities of the surviving or resulting entity or its ultimate
parent, and (y) such shares remaining outstanding or such preference securities, as the case may be, have such rights, preferences, privileges andvoting powers, and limitations and restrictions thereof, taken as a whole, as are not materially less favorable to the holders thereof than therights, preferences, privileges and voting powers, and limitations and restrictions thereof, of the Series K immediately prior to suchconsummation, taken as a whole;provided, however, that for all purposes of this Section 7(c), any increase in the amount of the authorized or issued Series K or authorized Preferred
Stock, or the creation and issuance, or an increase in the authorized or issued amount, of any other series of Preferred Stock ranking equally with and/or
junior to the Series K with respect to the payment of dividends (whether such dividends are cumulative or non-cumulative) and/or the distribution ofassets upon liquidation, dissolution or winding up of the Corporation will not be deemed to adversely affect the rights, preferences, privileges or voting
powers of the Series K.
If any amendment, alteration, repeal, share exchange, reclassification, merger or consolidation specified in this Section 7(c) would
adversely affect the Series K and one or more but not all other series of Preferred Stock, then only the Series K and such series of Preferred Stock as areadversely affected by and entitled to vote on the matter shall vote on the matter together as a single class (in lieu of all other series of Preferred Stock).
(d) Changes for Clarification. Without the consent of the holders of the Series K, so long as such action does not adversely affect therights, preferences, privileges and voting powers, and limitations and restrictions thereof, of the Series K, the Corporation may amend, alter, supplement
or repeal any terms of the Series K:(i) to cure any ambiguity, or to cure, correct or supplement any provision contained in this Certificate of Designations that may be
defective or inconsistent; or(ii) to make any provision with respect to matters or questions arising with respect to the Series K that is not inconsistent with theprovisions of this Certificate of Designations.
(e) Changes after Provision for Redemption. No vote or consent of the holders of Series K shall be required pursuant to Section 7(b), (c)or (d) above if, at or prior to the time when any such vote or consent would otherwise be required pursuant to such Section, all outstanding shares ofSeries K shall have been redeemed, or shall have been called for redemption upon proper notice and sufficient funds shall have been set aside for such
redemption, in each case pursuant to Section 6 above.
G-11

(f) Procedures for Voting and Consents. The rules and procedures for calling and conducting any meeting of the holders of Series K(including, without limitation, the fixing of a record date in connection therewith), the solicitation and use of proxies at such a meeting, the obtaining of
written consents and any other aspect or matter with regard to such a meeting or such consents shall be governed by any rules the Board of Directors or
the Committee (or another duly authorized committee of the Board of Directors), in its discretion, may adopt from time to time, which rules andprocedures shall conform to the requirements of the Certificate of Incorporation, the ByLaws, applicable law and any national securities exchange orother trading facility on which the Series K is listed or traded at the time. Whether the vote or consent of the holders of a plurality, majority or otherportion of the shares of Series K and all Voting Preferred Stock has been cast or given on any matter on which the holders of shares of Series K are
entitled to vote shall be determined by the Corporation by reference to the specified liquidation amounts of the shares voted or covered by the consent.
Section 8. Record Holders. To the fullest extent permitted by applicable law, the Corporation and the transfer agent for the Series K may
deem and treat the record holder of any share of Series K as the true and lawful owner thereof for all purposes, and neither the Corporation nor suchtransfer agent shall be affected by any notice to the contrary.
Section 9. Notices. All notices or communications in respect of Series K shall be sufficiently given if given in writing and delivered inperson or by first class mail, postage prepaid, or if given in such other manner as may be permitted in this Certificate of Designations, in the Certificate
of Incorporation or ByLaws or by applicable law.
Section 10. No Preemptive Rights. No share of Series K shall have any rights of preemption whatsoever as to any securities of the
Corporation, or any warrants, rights or options issued or granted with respect thereto, regardless of how such securities, or such warrants, rights or
options, may be designated, issued or granted.
Section 11. Other Rights. The shares of Series K shall not have any voting powers, preferences or relative, participating, optional or otherspecial rights, or qualifications, limitations or restrictions thereof, other than as set forth herein or in the Certificate of Incorporation or as provided byapplicable law.

G-12

Appendix H
CERTIFICATE OF DESIGNATIONS
OF
5.30% FIXED-TO-FLOATING RATE NON-CUMULATIVEPREFERRED STOCK, SERIES O
OFTHE GOLDMAN SACHS GROUP, INC.
THE GOLDMAN SACHS GROUP, INC., a corporation organized and existing under the General Corporation Law of the State of
Delaware (the “Corporation”), in accordance with the provisions of Sections 103 and 151 thereof, DOES HEREBY CERTIFY:
The Securities Issuance Committee (the “Committee”) of the board of directors of the Corporation (the “Board of Directors”), in
accordance with the resolutions of the Board of Directors dated October 28, 2011, the provisions of the restated certificate of incorporation and theamended and restated bylaws of the Corporation and applicable law, at a meeting duly called and held on July 25, 2016, adopted the following
resolution creating a series of 26,000 shares of Preferred Stock of the Corporation designated as “5.30% Fixed-to-Floating Rate Non-Cumulative
Preferred Stock, Series O”.
RESOLVED, that pursuant to the authority vested in the Committee and in accordance with the resolutions of the Board of Directors
dated October 28, 2011, the provisions of the restated certificate of incorporation and the amended and restated bylaws of the Corporation andapplicable law, a series of Preferred Stock, par value $.01 per share, of the Corporation be and hereby is created, and that the designation and number ofshares of such series, and the voting and other powers, preferences and relative, participating, optional or other rights, and the qualifications, limitations
and restrictions thereof, of the shares of such series, are as follows:
Section 1. Designation. The distinctive serial designation of such series of Preferred Stock is “5.30% Fixed-to-Floating Rate
Non-Cumulative Preferred Stock, Series O” (“Series O”). Each share of Series O shall be identical in all respects to every other share of Series O, except
as to the respective dates from which dividends thereon shall accrue, to the extent such dates may differ as permitted pursuant to Section 4(a) below.
Section 2. Number of Shares. The authorized number of shares of Series O shall be 26,000. Shares of Series O that are redeemed,purchased or otherwise acquired by the Corporation shall be cancelled and shall revert to authorized but unissued shares of Series O.

Section 3. Definitions. As used herein with respect to Series O:(a) “Appropriate Federal Banking Agency” means the “appropriate federal banking agency” with respect to the Corporation as that term isdefined in Section 3(q) of the Federal Deposit Insurance Act or any successor provision.
(b) “Board of Directors” means the board of directors of the Corporation.
(c) “ByLaws” means the amended and restated bylaws of the Corporation, as they may be amended from time to time.
(d) “Business Day” means (i) from the original issue date to and including November 10, 2026 (or, if such day is not a Monday, Tuesday,
Wednesday, Thursday or Friday or is a day on which banking institutions in New York City are generally authorized or obligated by law or
executive order to close, the next day that is a Monday, Tuesday, Wednesday, Thursday or Friday and is not a day on which banking institutions
in New York City are generally authorized or obligated by law or executive order to close), a day that is a Monday, Tuesday, Wednesday,Thursday or Friday and is not a day on which banking institutions in New York City are generally authorized or obligated by law or executive
order to close, and (ii) thereafter, a day that is a Monday, Tuesday, Wednesday, Thursday or Friday and is not a day on which banking
institutions in New York City are generally authorized or obligated by law or executive order to close and is a London Business Day.
(e) “Calculation Agent” means, at any time, the person or entity appointed by the Corporation and serving as such agent at such time. The
Corporation may terminate any such appointment and may appoint a successor agent at any time and from time to time, provided that the
Corporation shall use its best efforts to ensure that there is, at all relevant times when the Series O is outstanding, a person or entity appointed
and serving as such agent. The Calculation Agent may be a person or entity affiliated with the Corporation.
(f) “Certificate of Designations” means this Certificate of Designations relating to the Series O, as it may be amended from time to time.
(g) “Certification of Incorporation” shall mean the restated certificate of incorporation of the Corporation, as it may be amended from time
to time, and shall include this Certificate of Designations.
(h) “Common Stock” means the common stock, par value $0.01 per share, of the Corporation.
(i) “Junior Stock” means the Common Stock and any other class or series of stock of the Corporation (other than Series O) that ranks
junior to Series O either or both as to the payment of dividends and/or as to the distribution of assets on any liquidation, dissolution or winding
up of the Corporation.
H-2

(j) “London Business Day” means a day that is a Monday, Tuesday, Wednesday, Thursday or Friday that is not a day on which banking
institutions in London generally are authorized or obligated by law, regulation or executive order to close and is a day on which dealings in
U.S. dollars are transacted in the London interbank market.
(k) “Parity Stock” means any class or series of stock of the Corporation (other than Series O) that ranks equally with Series O both in thepayment of dividends and in the distribution of assets on any liquidation, dissolution or winding up of the Corporation.
(l) “Preferred Stock” means any and all series of Preferred Stock, having a par value of $0.01 per share, of the Corporation, including theSeries O.
(m) “Regulatory Capital Treatment Event” means the good faith determination by the Corporation that, as a result of (i) any amendment
to, or change in, the laws, rules or regulations of the United States or any political subdivision of or in the United States that is enacted or
becomes effective after the initial issuance of any share of Series O, (ii) any proposed change in those laws, rules or regulations that isannounced or becomes effective after the initial issuance of any share of Series O, or (iii) any official administrative decision or judicial decisionor administrative action or other official pronouncement interpreting or applying those laws, rules or regulations or policies with respect thereto
that is announced after the initial issuance of any share of Series O, there is more than an insubstantial risk that the Corporation will not be
entitled to treat the full liquidation preference amount of $25,000 per share of Series O then outstanding as “tier 1 capital” (or its equivalent) for
purposes of the capital adequacy guidelines of the Board of Governors of the Federal Reserve System (or, as and if applicable, the capital
adequacy guidelines or regulations of any successor Appropriate Federal Banking Agency) as then in effect and applicable, for so long as any
share of Series O is outstanding.
(n) “Representative Amount” means, at any time, an amount that, in the Calculation Agent’s judgment, is representative of a single
transaction in the relevant market at the relevant time.
(o) “Reuters screen” means the display on the Reuters 3000 Xtra service, or any successor or replacement service.
(p) “Voting Preferred Stock” means, with regard to any election or removal of a Preferred Stock Director (as defined in Section 7(b)below) or any other matter as to which the holders of Series O are entitled to vote as specified in Section 7 of this Certificate of Designations,any and all series of Preferred Stock (other than Series O) that rank equally with Series O either as to the payment of dividends or as to the
distribution of assets upon liquidation, dissolution or winding up of the Corporation and upon which like voting rights have been conferred andare exercisable with respect to such matter.
H-3

Section 4. Dividends.
(a) Rate. Holders of Series O shall be entitled to receive, when, as and if declared by the Board of Directors or the Committee (or another
duly authorized committee of the Board of Directors) out of funds legally available for the payment of dividends under Delaware law, non-cumulative
cash dividends per each share of Series O at the rate determined as set forth below in this Section (4) applied to the liquidation preference amount of$25,000 per share of Series O. Such dividends shall be payable in arrears (as provided below in this Section 4(a)), but only when, as and if declared by
the Board of Directors or the Committee (or another duly authorized committee of the Board of Directors), on the 10th day of May and November of
each year, commencing on November 10, 2016 and ending on November 10, 2026, and on the 10th day of February, May, August and November of
each year following November 10, 2026 (“Dividend Payment Dates”); provided that if any such Dividend Payment Date that occurs on or before
November 10, 2026 is a day that is not a Business Day, such dividend shall instead be payable on the immediately succeeding Business Day without
interest or other payment in respect of such delayed payment, and provided further, if any such Dividend Payment Date that would otherwise occur for
any Dividend Period after the Dividend Period ending on but excluding November 10, 2026 is a day that is not a Business Day, such Dividend Payment
Date shall instead be (and any such dividend shall accrue to and instead be payable on) the immediately succeeding Business Day unless such
immediately succeeding Business Day falls in the next calendar month, in which case such Dividend Payment Date shall instead be (and any such
dividend shall accrue to and instead be payable on) the immediately preceding Business Day. Dividends on Series O shall not be cumulative; holders ofSeries O shall not be entitled to receive any dividends not declared by the Board of Directors or the Committee (or another duly authorized committee of
the Board of Directors) and no interest, or sum of money in lieu of interest, shall be payable in respect of any dividend not so declared.
Dividends on the Series O shall not be declared or set aside for payment if and to the extent such dividends would cause the Corporation to
fail to comply with the capital adequacy guidelines of the Board of Governors of the Federal Reserve System (or, as and if applicable, the capital
adequacy guidelines or regulations of any successor Appropriate Federal Banking Agency) applicable to the Corporation.
Dividends that are payable on Series O on any Dividend Payment Date will be payable to holders of record of Series O as they appear on
the stock register of the Corporation on the applicable record date, which shall be the 15th calendar day before such Dividend Payment Date or suchother record date fixed by the Board of Directors or the Committee (or another duly authorized committee of the Board of Directors) that is not morethan 60 nor less than 10 days prior to such Dividend Payment Date (each, a “Dividend Record Date”). Any such day that is a Dividend Record Dateshall be a Dividend Record Date whether or not such day is a Business Day.
H-4

Each dividend period (a “Dividend Period”) shall commence on and include a Dividend Payment Date (other than the initial Dividend
Period, which shall commence on and include the date of original issue of the Series O, provided that, for any share of Series O issued after suchoriginal issue date, the initial Dividend Period for such shares may commence on and include such other date as the Board of Directors or theCommittee (or another duly authorized committee of the Board of Directors) shall determine and publicly disclose) and shall end on and include thecalendar day next preceding the next Dividend Payment Date. Dividends payable on the Series O in respect of any Dividend Period beginning prior to
November 10, 2026 shall be calculated on the basis of a 360-day year consisting of twelve 30-day months, and dividends payable on the Series O in
respect of any Dividend Period beginning on or after November 10, 2026 shall be calculated by the Calculation Agent on the basis of a 360-day year andthe actual number of days elapsed in such Dividend Period. Dividends payable in respect of a Dividend Period shall be payable in arrears - i.e., on thefirst Dividend Payment Date after such Dividend Period.
The dividend rate on the Series O, for each Dividend Period beginning prior to November 10, 2026, shall be a rate per annum equal to5.30%, and the dividend rate on the Series O, for each Dividend Period beginning on or after November 10, 2026, shall be a rate per annum equal to
LIBOR (as defined below) for such Dividend Period plus 3.834%. LIBOR, with respect to any Dividend Period beginning on or after November 10,
2026, means the offered rate expressed as a percentage per annum for three-month deposits in U.S. dollars on the first day of such Dividend Period, asthat rate appears on Reuters screen LIBOR01 (or any successor or replacement page) as of approximately 11:00 A.M., London time, on the second
London Business Day immediately preceding the first day of such Dividend Period.
If the rate described in the preceding paragraph does not appear on the Reuters screen LIBOR01 (or any successor or replacement page),
LIBOR shall be determined on the basis of the rates, at approximately 11:00 A.M., London time, on the second London Business Day immediately
preceding the first day of such Dividend Period, at which deposits of the following kind are offered to prime banks in the London interbank market byfour major banks in that market selected by the Calculation Agent: three-month deposits in U.S. dollars, beginning on the first day of such Dividend
Period, and in a Representative Amount. The Calculation Agent shall request the principal London office of each of these banks to provide a quotationof its rate at approximately 11:00 A.M., London time. If at least two quotations are provided, LIBOR for such Dividend Period shall be the arithmetic
mean of such quotations.
If fewer than two quotations are provided as described in the preceding paragraph, LIBOR for such Dividend Period shall be the arithmetic
mean of the rates for loans of the following kind to leading European banks quoted, at approximately 11:00 A.M., New York City time, on the second
London Business Day immediately preceding the first day of such Dividend Period, by major banks in New York City selected by the Calculation
Agent: three-month loans of U.S. dollars, beginning on the first day of such Dividend Period, and in a Representative Amount.
H-5

If no quotation is provided as described in the preceding paragraph, then the Calculation Agent, after consulting such sources as it deems
comparable to any of the foregoing quotations or display page, or any such source as it deems reasonable from which to estimate LIBOR or any of theforegoing lending rates, shall determine LIBOR for such Dividend Period in its sole discretion.
The Calculation Agent’s determination of any dividend rate, and its calculation of the amount of dividends for any Dividend Period, will
be maintained on file at the Corporation’s principal offices, will be made available to any stockholder upon request and will be final and binding in theabsence of manifest error.
Holders of Series O shall not be entitled to any dividends, whether payable in cash, securities or other property, other than dividends (ifany) declared and payable on the Series O as specified in this Section 4 (subject to the other provisions of this Certificate of Designations).
(b) Priority of Dividends. So long as any share of Series O remains outstanding, no dividend shall be declared or paid on the Common
Stock or any other shares of Junior Stock (other than a dividend payable solely in Junior Stock), and no Common Stock or other Junior Stock shall bepurchased, redeemed or otherwise acquired for consideration by the Corporation, directly or indirectly (other than as a result of a reclassification of
Junior Stock for or into other Junior Stock, or the exchange or conversion of one share of Junior Stock for or into another share of Junior Stock andother than through the use of the proceeds of a substantially contemporaneous sale of Junior Stock) during a Dividend Period, unless the full dividends
for the latest completed Dividend Period on all outstanding shares of Series O have been declared and paid (or declared and a sum sufficient for thepayment thereof has been set aside). The foregoing provision shall not restrict the ability of Goldman, Sachs & Co., or any other affiliate of the
Corporation, to engage in any market-making transactions in Junior Stock in the ordinary course of business.
When dividends are not paid (or declared and a sum sufficient for payment thereof set aside) on any Dividend Payment Date (or, in thecase of Parity Stock having dividend payment dates different from the Dividend Payment Dates, on a dividend payment date falling within a Dividend
Period) in full upon the Series O and any shares of Parity Stock, all dividends declared on the Series O and all such Parity Stock and payable on such
Dividend Payment Date (or, in the case of Parity Stock having dividend payment dates different from the Dividend Payment Dates, on a dividend
payment date falling within the Dividend Period related to such Dividend Payment Date) shall be declared pro rata so that the respective amounts ofsuch dividends shall bear the same ratio to each other as all accrued but unpaid dividends per share on the Series O and all Parity Stock payable on such
Dividend Payment Date (or, in the case of Parity Stock having dividend payment dates different from the Dividend Payment Dates, on a dividend
payment date falling within the Dividend Period related to such Dividend Payment Date) bear to each other.
H-6

Subject to the foregoing, such dividends (payable in cash, securities or other property) as may be determined by the Board of Directors or
the Committee (or another duly authorized committee of the Board of Directors) may be declared and paid on any securities, including Common Stockand other Junior Stock, from time to time out of any funds legally available for such payment, and the Series O shall not be entitled to participate in any
such dividends.
Section 5. Liquidation Rights.
(a) Voluntary or Involuntary Liquidation. In the event of any liquidation, dissolution or winding up of the affairs of the Corporation,
whether voluntary or involuntary, holders of Series O shall be entitled to receive, out of the assets of the Corporation or proceeds thereof (whether
capital or surplus) available for distribution to stockholders of the Corporation, and after satisfaction of all liabilities and obligations to creditors of the
Corporation, before any distribution of such assets or proceeds is made to or set aside for the holders of Common Stock and any other stock of the
Corporation ranking junior to the Series O as to such distribution, in full an amount equal to $25,000 per share, together with an amount equal to all
dividends (if any) that have been declared but not paid prior to the date of payment of such distribution (but without any amount in respect of dividends
that have not been declared prior to such payment date).
(b) Partial Payment. If in any distribution described in Section 5(a) above the assets of the Corporation or proceeds thereof are notsufficient to pay the Liquidation Preferences (as defined below) in full to all holders of Series O and all holders of any stock of the Corporation ranking
equally with the Series O as to such distribution, the amounts paid to the holders of Series O and to the holders of all such other stock shall be paid pro
rata in accordance with the respective aggregate Liquidation Preferences of the holders of Series O and the holders of all such other stock. In any such
distribution, the “Liquidation Preference” of any holder of stock of the Corporation shall mean the amount otherwise payable to such holder in such
distribution (assuming no limitation on the assets of the Corporation available for such distribution), including an amount equal to any declared but
unpaid dividends (and, in the case of any holder of stock other than Series O and on which dividends accrue on a cumulative basis, an amount equal toany unpaid, accrued, cumulative dividends, whether or not declared, as applicable).
(c) Residual Distributions. If the Liquidation Preference has been paid in full to all holders of Series O, the holders of other stock of the
Corporation shall be entitled to receive all remaining assets of the Corporation (or proceeds thereof) according to their respective rights and preferences.
(d) Merger, Consolidation and Sale of Assets Not Liquidation. For purposes of this Section 5, the merger or consolidation of the
Corporation with any other corporation or other entity, including a merger or consolidation in which the holders of Series O receive cash, securities orother property for their shares, or the sale, lease or exchange (for cash, securities or other property) of all or substantially all of the assets of the
Corporation, shall not constitute a liquidation, dissolution or winding up of the Corporation.
H-7

Section 6. Redemption.
(a) Optional Redemption. The Series O is perpetual and has no maturity date. The Corporation may, at its option, redeem the shares ofSeries O at the time outstanding, upon notice given as provided in Section 6(c) below, (i) in whole or in part, from time to time, on any date on or afterNovember 10, 2026 (or, if not a Business Day, the next succeeding Business Day), or (ii) in whole but not in part at any time within 90 days following a
Regulatory Capital Treatment Event, in each case, at a redemption price per share equal to $25,000, plus (except as otherwise provided herein below) an
amount equal to any dividends per share that have accrued but not been paid for the then-current Dividend Period to but excluding the redemption date,whether or not such dividends have been declared. The redemption price for any shares of Series O shall be payable on the redemption date to the holderof such shares against surrender of the certificate(s) evidencing such shares to the Corporation or its agent. Any declared but unpaid dividends payable
on a redemption date that occurs subsequent to the Dividend Record Date for a Dividend Period shall not be paid to the holder entitled to receive theredemption price on the redemption date, but rather shall be paid to the holder of record of the redeemed shares on such Dividend Record Date relating
to the Dividend Payment Date as provided in Section 4 above. Notwithstanding the foregoing, the Corporation may not redeem shares of Series O
without having received the prior approval of the Appropriate Federal Banking Agency if then required under capital guidelines applicable to the
Corporation.
(b) No Sinking Fund. The Series O will not be subject to any mandatory redemption, sinking fund or other similar provisions. Holders ofSeries O will have no right to require redemption of any shares of Series O.
(c) Notice of Redemption. Notice of every redemption of shares of Series O shall be given by first class mail, postage prepaid, addressedto the holders of record of the shares to be redeemed at their respective last addresses appearing on the books of the Corporation. Such mailing shall be
at least 30 days and not more than 60 days before the date fixed for redemption. Any notice mailed as provided in this Subsection shall be conclusively
presumed to have been duly given, whether or not the holder receives such notice, but failure duly to give such notice by mail, or any defect in such
notice or in the mailing thereof, to any holder of shares of Series O designated for redemption shall not affect the validity of the proceedings for theredemption of any other shares of Series O. Notwithstanding the foregoing, if the Series O or any depositary shares representing interests in the Series O
are issued in book-entry form through The Depository Trust Company or any other similar facility, notice of redemption may be given to the holders ofSeries O at such time and in any manner permitted by such facility. Each such notice given to a holder shall state: (1) the redemption date; (2) the
number of shares of Series O to be redeemed and, if less than all the shares held by such holder are to be redeemed, the number of such shares to beredeemed from such holder; (3) the redemption price; and (4) the place or places where certificates for such shares are to be surrendered for payment of
the redemption price.
H-8(d) Partial Redemption. In case of any redemption of only part of the shares of Series O at the time outstanding, the shares to beredeemed shall be selected either pro rata or by lot. Subject to the provisions hereof, the Corporation shall have full power and authority to prescribe theterms and conditions upon which shares of Series O shall be redeemed from time to time. If fewer than all the shares represented by any certificate areredeemed, a new certificate shall be issued representing the unredeemed shares without charge to the holder thereof.
(e) Effectiveness of Redemption. If notice of redemption has been duly given and if on or before the redemption date specified in thenotice all funds necessary for the redemption have been set aside by the Corporation, separate and apart from its other funds, in trust for the pro rata
benefit of the holders of the shares called for redemption, so as to be and continue to be available therefor, then, notwithstanding that any certificate forany share so called for redemption has not been surrendered for cancellation, on and after the redemption date dividends shall cease to accrue on all
shares so called for redemption, all shares so called for redemption shall no longer be deemed outstanding and all rights with respect to such shares shallforthwith on such redemption date cease and terminate, except only the right of the holders thereof to receive the amount payable on such redemption,
without interest. Any funds unclaimed at the end of three years from the redemption date shall, to the extent permitted by law, be released to the
Corporation, after which time the holders of the shares so called for redemption shall look only to the Corporation for payment of the redemption priceof such shares.
Section 7. Voting Rights.
(a) General. The holders of Series O shall not have any voting rights except as set forth below or as otherwise from time to time requiredby law.
(b) Right To Elect Two Directors Upon Nonpayment Events. If and whenever dividends on any shares of Series O shall not have been
declared and paid for any Dividend Periods that, in aggregate, equal at least 18 months, whether or not consecutive (a “Nonpayment Event”), thenumber of directors then constituting the Board of Directors shall automatically be increased by two and the holders of Series O, together with theholders of all outstanding shares of Voting Preferred Stock, voting together as a single class, shall be entitled to elect the two additional directors (the“Preferred Stock Directors”), provided that the Board of Directors shall at no time include more than two Preferred Stock Directors (including, forpurposes of this limitation, all directors that the holders of any series of Voting Preferred Stock are entitled to elect pursuant to like voting rights).
In the event that the holders of the Series O, and such other holders of Voting Preferred Stock, shall be entitled to vote for the election of
the Preferred Stock Directors following a Nonpayment Event, such directors shall be initially elected following such Nonpayment Event only at a
special meeting called at the request of the
H-9holders of record of at least 20% of the Series O or of any other series of Voting Preferred Stock then outstanding (unless such request for a special
meeting is received less than 90 days before the date fixed for the next annual or special meeting of the stockholders of the Corporation, in which event
such election shall be held only at such next annual or special meeting of stockholders), and at each subsequent annual meeting of stockholders of the
Corporation. Such request to call a special meeting for the initial election of the Preferred Stock Directors after a Nonpayment Event shall be made by
written notice, signed by the requisite holders of Series O or any series of Voting Preferred Stock, and delivered to the Secretary of the Corporation insuch manner as provided for in Section 9 below, or as may otherwise be required by law.
When dividends have been paid (or declared and a sum sufficient for payment thereof set aside) in full on the Series O for consecutive
Dividend Periods that, in aggregate, equal at least one year after a Nonpayment Event, then the right of the holders of Series O to elect the Preferred
Stock Directors shall cease (but subject always to revesting of such voting rights in the case of any future Nonpayment Event), and, if and when any
rights of holders of Series O and Voting Preferred Stock to elect the Preferred Stock Directors shall have ceased, the terms of office of all the Preferred
Stock Directors shall forthwith terminate and the number of directors constituting the Board of Directors shall automatically be reduced accordingly.
Any Preferred Stock Director may be removed at any time without cause by the holders of record of a majority of all of the outstanding
shares of the Series O and Voting Preferred Stock, when they have the voting rights described above (voting together as a single class). So long as a
Nonpayment Event shall continue, any vacancy in the office of a Preferred Stock Director (other than prior to the initial election of Preferred Stock
Directors after a Nonpayment Event) may be filled by the written consent of the Preferred Stock Director remaining in office, or if none remains in
office, by a vote of the holders of record of a majority of all of the outstanding shares of the Series O and Voting Preferred Stock, when they have thevoting rights described above (voting together as a single class). Any such vote of stockholders to remove, or to fill a vacancy in the office of, aPreferred Stock Director may be taken only at a special meeting of such stockholders, called as provided above for an initial election of Preferred Stock
Director after a Nonpayment Event (unless such request is received less than 90 days before the date fixed for the next annual or special meeting of thestockholders, in which event such election shall be held at such next annual or special meeting of stockholders). The Preferred Stock Directors shalleach be entitled to one vote per director on any matter that shall come before the Board of Directors for a vote. Each Preferred Stock Director elected atany special meeting of stockholders or by written consent of the other Preferred Stock Director shall hold office until the next annual meeting of thestockholders if such office shall not have previously terminated as above provided.
(c) Other Voting Rights. So long as any shares of Series O are outstanding, in addition to any other vote or consent of stockholders
required by law or by the Certificate of Incorporation, the vote or consent of the holders of at least 662⁄3% of the shares of Series O and any Voting
Preferred Stock at the time outstanding and entitled to vote thereon, voting together as a single class, given in person or by proxy, either in writing
without a meeting or by vote at any meeting called for the purpose, shall be necessary for effecting or validating:
H-10

(i) Authorization of Senior Stock. Any amendment or alteration of the Certificate of Incorporation to authorize or create, or increase theauthorized amount of, any shares of any class or series of capital stock of the Corporation ranking senior to the Series O with respect to either orboth the payment of dividends and/or the distribution of assets on any liquidation, dissolution or winding up of the Corporation;(ii) Amendment of Series O. Any amendment, alteration or repeal of any provision of the Certificate of Incorporation so as to materiallyand adversely affect the special rights, preferences, privileges or voting powers of the Series O, taken as a whole; or(iii) Share Exchanges, Reclassifications, Mergers and Consolidations. Any consummation of a binding share exchange orreclassification involving the Series O, or of a merger or consolidation of the Corporation with another corporation or other entity, unless in eachcase (x) the shares of Series O remain outstanding or, in the case of any such merger or consolidation with respect to which the Corporation is
not the surviving or resulting entity, are converted into or exchanged for preference securities of the surviving or resulting entity or its ultimate
parent, and (y) such shares remaining outstanding or such preference securities, as the case may be, have such rights, preferences, privileges andvoting powers, and limitations and restrictions thereof, taken as a whole, as are not materially less favorable to the holders thereof than therights, preferences, privileges and voting powers, and limitations and restrictions thereof, of the Series O immediately prior to suchconsummation, taken as a whole;provided, however, that for all purposes of this Section 7(c), any increase in the amount of the authorized or issued Series O or authorized Preferred
Stock, or the creation and issuance, or an increase in the authorized or issued amount, of any other series of Preferred Stock ranking equally with and/or
junior to the Series O with respect to the payment of dividends (whether such dividends are cumulative or non-cumulative) and/or the distribution ofassets upon liquidation, dissolution or winding up of the Corporation will not be deemed to adversely affect the rights, preferences, privileges or voting
powers of the Series O.
If any amendment, alteration, repeal, share exchange, reclassification, merger or consolidation specified in this Section 7(c) would
adversely affect the Series O and one or more but not all other series of Preferred Stock, then only the Series O and such series of Preferred Stock as areadversely affected by and entitled to vote on the matter shall vote on the matter together as a single class (in lieu of all other series of Preferred Stock).
H-11

(d) Changes for Clarification. Without the consent of the holders of the Series O, so long as such action does not adversely affect therights, preferences, privileges and voting powers, and limitations and restrictions thereof, of the Series O, the Corporation may amend, alter, supplement
or repeal any terms of the Series O:(i) to cure any ambiguity, or to cure, correct or supplement any provision contained in this Certificate of Designations that may be
defective or inconsistent; or(ii) to make any provision with respect to matters or questions arising with respect to the Series O that is not inconsistent with theprovisions of this Certificate of Designations.
(e) Changes after Provision for Redemption. No vote or consent of the holders of Series O shall be required pursuant to Section 7(b), (c)or (d) above if, at or prior to the time when any such vote or consent would otherwise be required pursuant to such Section, all outstanding shares ofSeries O shall have been redeemed, or shall have been called for redemption upon proper notice and sufficient funds shall have been set aside for such
redemption, in each case pursuant to Section 6 above.
(f) Procedures for Voting and Consents. The rules and procedures for calling and conducting any meeting of the holders of Series O(including, without limitation, the fixing of a record date in connection therewith), the solicitation and use of proxies at such a meeting, the obtaining of
written consents and any other aspect or matter with regard to such a meeting or such consents shall be governed by any rules the Board of Directors or
the Committee (or another duly authorized committee of the Board of Directors), in its discretion, may adopt from time to time, which rules andprocedures shall conform to the requirements of the Certificate of Incorporation, the ByLaws, applicable law and any national securities exchange orother trading facility on which the Series O is listed or traded at the time. Whether the vote or consent of the holders of a plurality, majority or otherportion of the shares of Series O and all Voting Preferred Stock has been cast or given on any matter on which the holders of shares of Series O are
entitled to vote shall be determined by the Corporation by reference to the specified liquidation amounts of the shares voted or covered by the consent.
Section 8. Record Holders. To the fullest extent permitted by applicable law, the Corporation and the transfer agent for the Series O may
deem and treat the record holder of any share of Series O as the true and lawful owner thereof for all purposes, and neither the Corporation nor suchtransfer agent shall be affected by any notice to the contrary.
Section 9. Notices. All notices or communications in respect of Series O shall be sufficiently given if given in writing and delivered inperson or by first class mail, postage prepaid, or if given in such other manner as may be permitted in this Certificate of Designations, in the Certificate
of Incorporation or ByLaws or by applicable law.
H-12

Section 10. No Preemptive Rights. No share of Series O shall have any rights of preemption whatsoever as to any securities of the
Corporation, or any warrants, rights or options issued or granted with respect thereto, regardless of how such securities, or such warrants, rights or
options, may be designated, issued or granted.
Section 11. Other Rights. The shares of Series O shall not have any voting powers, preferences or relative, participating, optional or otherspecial rights, or qualifications, limitations or restrictions thereof, other than as set forth herein or in the Certificate of Incorporation or as provided byapplicable law.

H-13

Appendix I

CERTIFICATE OF DESIGNATIONS
OF
5.00% FIXED-TO-FLOATING RATE NON-CUMULATIVEPREFERRED STOCK, SERIES P
OF
THE GOLDMAN SACHS GROUP, INC.
THE GOLDMAN SACHS GROUP, INC., a corporation organized and existing under the General Corporation Law of the State of
Delaware (the “Corporation”), in accordance with the provisions of Sections 103 and 151 thereof, DOES HEREBY CERTIFY:
The Securities Issuance Committee (the “Committee”) of the board of directors of the Corporation (the “Board of Directors”), in
accordance with the resolutions of the Board of Directors dated October 28, 2011, the provisions of the restated certificate of incorporation and theamended and restated bylaws of the Corporation and applicable law, by unanimous written consent dated October 26, 2017, adopted the following
resolution creating a series of 66,000 shares of Preferred Stock of the Corporation designated as “5.00% Fixed-to-Floating Rate Non-Cumulative
Preferred Stock, Series P”.
RESOLVED, that pursuant to the authority vested in the Committee and in accordance with the resolutions of the Board of Directors
dated October 28, 2011, the provisions of the restated certificate of incorporation and the amended and restated bylaws of the Corporation andapplicable law, a series of Preferred Stock, par value $.01 per share, of the Corporation be and hereby is created, and that the designation and number ofshares of such series, and the voting and other powers, preferences and relative, participating, optional or other rights, and the qualifications, limitations
and restrictions thereof, of the shares of such series, are as follows:
Section 1. Designation. The distinctive serial designation of such series of Preferred Stock is “5.00% Fixed-to-Floating Rate
Non-Cumulative Preferred Stock, Series P” (“Series P”). Each share of Series P shall be identical in all respects to every other share of Series P, except
as to the respective dates from which dividends thereon shall accrue, to the extent such dates may differ as permitted pursuant to Section 4(a) below.
Section 2. Number of Shares. The authorized number of shares of Series P shall be 66,000. Shares of Series P that are redeemed,purchased or otherwise acquired by the Corporation shall be cancelled and shall revert to authorized but unissued shares of Series P.

Section 3. Definitions. As used herein with respect to Series P:(a) “30/360 (ISDA) Day Count Convention” means the number of days in the Dividend Period in respect of which payment is being madedivided by 360, calculated on a formula basis as follows:[360×(Y2–Y1)]+[30×(M2–M1)]+(D2–D1)
360
where:“Y1” is the year, expressed as a number, in which the first day of the Dividend Period falls;“Y2” is the year, expressed as a number, in which the day immediately following the last day included in the Dividend Period falls;“M1” is the calendar month, expressed as a number, in which the first day of the Dividend Period falls;“M2” is the calendar month, expressed as a number, in which the day immediately following the last day included in the Dividend Period
falls;“D1” is the first calendar day, expressed as a number, of the Dividend Period, unless such number would be 31, in which case D1 will be
30; and“D2” is the calendar day, expressed as a number, immediately following the last day included in the Dividend Period, unless such number
would be 31 and D1 is greater than 29, in which case D2 will be 30.
(b) “Actual/360 (ISDA) Day Count Convention” means the actual number of days in the Interest Period divided by 360.
(c) “Appropriate Federal Banking Agency” means the “appropriate federal banking agency” with respect to the Corporation as that term isdefined in Section 3(q) of the Federal Deposit Insurance Act or any successor provision.
(d) “Board of Directors” means the board of directors of the Corporation.
(e) “ByLaws” means the amended and restated bylaws of the Corporation, as they may be amended from time to time.
(f) “Business Day” means (i) from the original issue date to and including November 10, 2022 (or, if such day is not a Monday, Tuesday,
Wednesday, Thursday or Friday or is a day on which banking institutions in New York City are generally authorized or obligated by law or
executive order to close, the next day that is a Monday, Tuesday, Wednesday, Thursday or Friday and is not a day on which banking institutions
in New York City are generally authorized or obligated by law or executive order to close), a day that is a Monday, Tuesday, Wednesday,Thursday or Friday and is not a day on which banking institutions in New York City are generally authorized or obligated by law or executive
order to close, and (ii) thereafter, a day that is a Monday, Tuesday, Wednesday, Thursday or Friday and is not a day on which banking
institutions in New York City are generally authorized or obligated by law or executive order to close and is a London Business Day.
I-2

(g) “Calculation Agent” means, at any time, the person or entity appointed by the Corporation and serving as such agent at such time. The
Corporation may terminate any such appointment and may appoint a successor agent at any time and from time to time, provided that the
Corporation shall use its best efforts to ensure that there is, at all relevant times when the Series P is outstanding, a person or entity appointed
and serving as such agent. The Calculation Agent may be a person or entity affiliated with the Corporation.
(h) “Certificate of Designations” means this Certificate of Designations relating to the Series P, as it may be amended from time to time.
(i) “Certification of Incorporation” shall mean the restated certificate of incorporation of the Corporation, as it may be amended from time
to time, and shall include this Certificate of Designations.
(j) “Common Stock” means the common stock, par value $0.01 per share, of the Corporation.
(k) “Junior Stock” means the Common Stock and any other class or series of stock of the Corporation (other than Series P) that ranks
junior to Series P either or both as to the payment of dividends and/or as to the distribution of assets on any liquidation, dissolution or winding
up of the Corporation.
(l) “London Business Day” means a day that is a Monday, Tuesday, Wednesday, Thursday or Friday that is not a day on which banking
institutions in London generally are authorized or obligated by law, regulation or executive order to close and is a day on which dealings in
U.S. dollars are transacted in the London interbank market.
(m) “Parity Stock” means any class or series of stock of the Corporation (other than Series P) that ranks equally with Series P both in thepayment of dividends and in the distribution of assets on any liquidation, dissolution or winding up of the Corporation.
(n) “Preferred Stock” means any and all series of Preferred Stock, having a par value of $0.01 per share, of the Corporation, including theSeries P.
I-3

(o) “Regulatory Capital Treatment Event” means the good faith determination by the Corporation that, as a result of (i) any amendment to,or change in, the laws, rules or regulations of the United States or any political subdivision of or in the United States that is enacted or becomes
effective after the initial issuance of any share of Series P, (ii) any proposed change in those laws, rules or regulations that is announced or
becomes effective after the initial issuance of any share of Series P, or (iii) any official administrative decision or judicial decision oradministrative action or other official pronouncement interpreting or applying those laws, rules or regulations or policies with respect thereto
that is announced after the initial issuance of any share of Series P, there is more than an insubstantial risk that the Corporation will not be
entitled to treat the full liquidation preference amount of $25,000 per share of Series P then outstanding as “tier 1 capital” (or its equivalent) for
purposes of the capital adequacy rules of the Board of Governors of the Federal Reserve System (or, as and if applicable, the capital adequacy
rules or regulations of any successor Appropriate Federal Banking Agency) as then in effect and applicable, for so long as any share of Series P
is outstanding.
(p) “Representative Amount” means, at any time, an amount that, in the Calculation Agent’s judgment, is representative of a single
transaction in the relevant market at the relevant time.
(q) “Reuters screen” means the display on the Thomson Reuters Eikon service, or any successor or replacement service.
(r) “Voting Preferred Stock” means, with regard to any election or removal of a Preferred Stock Director (as defined in Section 7(b)below) or any other matter as to which the holders of Series P are entitled to vote as specified in Section 7 of this Certificate of Designations,any and all series of Preferred Stock (other than Series P) that rank equally with Series P either as to the payment of dividends or as to the
distribution of assets upon liquidation, dissolution or winding up of the Corporation and upon which like voting rights have been conferred andare exercisable with respect to such matter.
Section 4. Dividends.
(a) Rate. Holders of Series P shall be entitled to receive, when, as and if declared by the Board of Directors or the Committee (or another
duly authorized committee of the Board of Directors) out of funds legally available for the payment of dividends under Delaware law, non-cumulative
cash dividends per each share of Series P at the rate determined as set forth below in this Section (4) applied to the liquidation preference amount of$25,000 per share of Series P. Such dividends shall be payable in arrears (as provided below in this Section 4(a)), but only when, as and if declared by
the Board of Directors or the Committee (or another duly authorized committee of the Board of Directors), on the 10th day of May and November of
each year, commencing on May 10, 2018 and ending on November 10, 2022, and on the 10th day of February, May, August and November of each year
following November 10, 2022 (“Dividend Payment Dates”); provided that if any such Dividend Payment Date that occurs on or before November 10,
2022 is a day that is not a Business Day, such dividend shall instead be payable on the immediately succeeding Business Day without interest or otherpayment in respect of such
I-4

delayed payment, and provided further, if any such Dividend Payment Date that would otherwise occur for any Dividend Period after the Dividend
Period ending on but excluding November 10, 2022 is a day that is not a Business Day, such Dividend Payment Date shall instead be (and any such
dividend shall accrue to and instead be payable on) the immediately succeeding Business Day unless such immediately succeeding Business Day falls in
the next calendar month, in which case such Dividend Payment Date shall instead be (and any such dividend shall accrue to and instead be payable on)
the immediately preceding Business Day. Dividends on Series P shall not be cumulative; holders of Series P shall not be entitled to receive any
dividends not declared by the Board of Directors or the Committee (or another duly authorized committee of the Board of Directors) and no interest, or
sum of money in lieu of interest, shall be payable in respect of any dividend not so declared.
Dividends on the Series P shall not be declared or set aside for payment if and to the extent such dividends would cause the Corporation to
fail to comply with the capital adequacy rules of the Board of Governors of the Federal Reserve System (or, as and if applicable, the capital adequacy
rules or regulations of any successor Appropriate Federal Banking Agency) applicable to the Corporation.
Dividends that are payable on Series P on any Dividend Payment Date will be payable to holders of record of Series P as they appear on
the stock register of the Corporation on the applicable record date, which shall be the 15th calendar day before such Dividend Payment Date or suchother record date fixed by the Board of Directors or the Committee (or another duly authorized committee of the Board of Directors) that is not morethan 60 nor less than 10 days prior to such Dividend Payment Date (each, a “Dividend Record Date”). Any such day that is a Dividend Record Dateshall be a Dividend Record Date whether or not such day is a Business Day.
Each dividend period (a “Dividend Period”) shall commence on and include a Dividend Payment Date (other than the initial Dividend
Period, which shall commence on and include the date of original issue of the Series P, provided that, for any share of Series P issued after such originalissue date, the initial Dividend Period for such shares may commence on and include such other date as the Board of Directors or the Committee (oranother duly authorized committee of the Board of Directors) shall determine and publicly disclose) and shall end on and include the calendar day next
preceding the next Dividend Payment Date. Dividends payable on the Series P in respect of any Dividend Period beginning prior to November 10, 2022
shall be calculated on the basis of the 30/360 (ISDA) Day Count Convention, and dividends payable on the Series P in respect of any Dividend Period
beginning on or after November 10, 2022 shall be calculated by the Calculation Agent on the basis of the Actual/360 (ISDA) Day Count Convention.
Dividends payable in respect of a Dividend Period shall be payable in arrears - i.e., on the first Dividend Payment Date after such Dividend Period.
I-5

The dividend rate on the Series P, for each Dividend Period beginning prior to November 10, 2022, shall be a rate per annum equal to
5.00%, and the dividend rate on the Series P, for each Dividend Period beginning on or after November 10, 2022, shall be a rate per annum equal to
LIBOR (as defined below) for such Dividend Period plus 2.874%. LIBOR, with respect to any Dividend Period beginning on or after November 10,
2022, means the offered rate expressed as a percentage per annum for three-month deposits in U.S. dollars on the first day of such Dividend Period, asthat rate appears on Reuters screen LIBOR01 (or any successor or replacement page) as of approximately 11:00 A.M., London time, on the second
London Business Day immediately preceding the first day of such Dividend Period.
If the Calculation Agent determines on the relevant dividend determination date that the LIBOR base rate described in the preceding
paragraph has been discontinued, then the Calculation Agent will use a substitute or successor base rate that it has determined in its sole discretion ismost comparable to the LIBOR base rate, provided that if the Calculation Agent determines there is an industry-accepted successor base rate, then the
Calculation Agent shall use such successor base rate. If the Calculation Agent has determined a substitute or successor base rate in accordance with theforegoing, the Calculation Agent in its sole discretion may determine the business day convention, the definition of business day and the dividend
determination date to be used and any other relevant methodology for calculating such substitute or successor base rate, including any adjustment factor
needed to make such substitute or successor base rate comparable to the LIBOR base rate, in a manner that is consistent with industry-accepted practices
for such substitute or successor base rate. Unless the Calculation Agent uses a substitute or successor base rate as so provided, the following will apply.
(i) If the LIBOR base rate described in the second preceding paragraph does not appear on the Reuters screen LIBOR01 (or any successor
or replacement page), LIBOR shall be determined on the basis of the rates, at approximately 11:00 A.M., London time, on the second London
Business Day immediately preceding the first day of such Dividend Period, at which deposits of the following kind are offered to prime banks inthe London interbank market by four major banks in that market selected by the Calculation Agent: three-month deposits in U.S. dollars,
beginning on the first day of such Dividend Period, and in a Representative Amount. The Calculation Agent shall request the principal London
office of each of these banks to provide a quotation of its rate at approximately 11:00 A.M., London time. If at least two quotations are provided,
LIBOR for such Dividend Period shall be the arithmetic mean of such quotations.
(ii) If fewer than two quotations are provided as described in the preceding paragraph, LIBOR for such Dividend Period shall be thearithmetic mean of the rates for loans of the following kind to leading European banks quoted, at approximately 11:00 A.M., New York City
time, on the second London Business Day immediately preceding the first day of such Dividend Period, by major banks in New York City
selected by the Calculation Agent: three-month loans of U.S. dollars, beginning on the first day of such Dividend Period, and in a Representative
Amount.
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(iii) If no quotation is provided as described in the preceding paragraph, then the Calculation Agent, after consulting such sources as it
deems comparable to any of the foregoing quotations or display page, or any such source as it deems reasonable from which to estimate LIBOR
or any of the foregoing lending rates, shall determine LIBOR for such Dividend Period in its sole discretion.
The Calculation Agent’s determination of any dividend rate, and its calculation of the amount of dividends for any Dividend Period, will
be maintained on file at the Corporation’s principal offices, will be made available to any stockholder upon request and will be final and binding in theabsence of manifest error.
Holders of Series P shall not be entitled to any dividends, whether payable in cash, securities or other property, other than dividends (ifany) declared and payable on the Series P as specified in this Section 4 (subject to the other provisions of this Certificate of Designations).
(b) Priority of Dividends. So long as any share of Series P remains outstanding, no dividend shall be declared or paid on the Common
Stock or any other shares of Junior Stock (other than a dividend payable solely in Junior Stock), and no Common Stock or other Junior Stock shall bepurchased, redeemed or otherwise acquired for consideration by the Corporation, directly or indirectly (other than as a result of a reclassification of
Junior Stock for or into other Junior Stock, or the exchange or conversion of one share of Junior Stock for or into another share of Junior Stock andother than through the use of the proceeds of a substantially contemporaneous sale of Junior Stock) during a Dividend Period, unless the full dividends
for the latest completed Dividend Period on all outstanding shares of Series P have been declared and paid (or declared and a sum sufficient for thepayment thereof has been set aside). The foregoing provision shall not restrict the ability of Goldman Sachs & Co. LLC, or any other affiliate of the
Corporation, to engage in any market-making transactions in Junior Stock in the ordinary course of business.
When dividends are not paid (or declared and a sum sufficient for payment thereof set aside) on any Dividend Payment Date (or, in thecase of Parity Stock having dividend payment dates different from the Dividend Payment Dates, on a dividend payment date falling within a Dividend
Period) in full upon the Series P and any shares of Parity Stock, all dividends declared on the Series P and all such Parity Stock and payable on such
Dividend Payment Date (or, in the case of Parity Stock having dividend payment dates different from the Dividend Payment Dates, on a dividend
payment date falling within the Dividend Period related to such Dividend Payment Date) shall be declared pro rata so that the respective amounts ofsuch dividends shall bear the same ratio to each other as all accrued but unpaid dividends per share on the Series P and all Parity Stock payable on such
Dividend Payment Date (or, in the case of Parity Stock having dividend payment dates different from the Dividend Payment Dates, on a dividend
payment date falling within the Dividend Period related to such Dividend Payment Date) bear to each other.
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Subject to the foregoing, such dividends (payable in cash, securities or other property) as may be determined by the Board of Directors or
the Committee (or another duly authorized committee of the Board of Directors) may be declared and paid on any securities, including Common Stockand other Junior Stock, from time to time out of any funds legally available for such payment, and the Series P shall not be entitled to participate in any
such dividends.
Section 5. Liquidation Rights.
(a) Voluntary or Involuntary Liquidation. In the event of any liquidation, dissolution or winding up of the affairs of the Corporation,
whether voluntary or involuntary, holders of Series P shall be entitled to receive, out of the assets of the Corporation or proceeds thereof (whether
capital or surplus) available for distribution to stockholders of the Corporation, and after satisfaction of all liabilities and obligations to creditors of the
Corporation, before any distribution of such assets or proceeds is made to or set aside for the holders of Common Stock and any other stock of the
Corporation ranking junior to the Series P as to such distribution, in full an amount equal to $25,000 per share, together with an amount equal to all
dividends (if any) that have been declared but not paid prior to the date of payment of such distribution (but without any amount in respect of dividends
that have not been declared prior to such payment date).
(b) Partial Payment. If in any distribution described in Section 5(a) above the assets of the Corporation or proceeds thereof are notsufficient to pay the Liquidation Preferences (as defined below) in full to all holders of Series P and all holders of any stock of the Corporation ranking
equally with the Series P as to such distribution, the amounts paid to the holders of Series P and to the holders of all such other stock shall be paid pro
rata in accordance with the respective aggregate Liquidation Preferences of the holders of Series P and the holders of all such other stock. In any such
distribution, the “Liquidation Preference” of any holder of stock of the Corporation shall mean the amount otherwise payable to such holder in such
distribution (assuming no limitation on the assets of the Corporation available for such distribution), including an amount equal to any declared but
unpaid dividends (and, in the case of any holder of stock other than Series P and on which dividends accrue on a cumulative basis, an amount equal toany unpaid, accrued, cumulative dividends, whether or not declared, as applicable).
(c) Residual Distributions. If the Liquidation Preference has been paid in full to all holders of Series P, the holders of other stock of the
Corporation shall be entitled to receive all remaining assets of the Corporation (or proceeds thereof) according to their respective rights and preferences.
(d) Merger, Consolidation and Sale of Assets Not Liquidation. For purposes of this Section 5, the merger or consolidation of the
Corporation with any other corporation or other entity, including a merger or consolidation in which the holders of Series P receive cash, securities orother property for their shares, or the sale, lease or exchange (for cash, securities or other property) of all or substantially all of the assets of the
Corporation, shall not constitute a liquidation, dissolution or winding up of the Corporation.
I-8

Section 6. Redemption.
(a) Optional Redemption. The Series P is perpetual and has no maturity date. The Corporation may, at its option, redeem the shares ofSeries P at the time outstanding, upon notice given as provided in Section 6(c) below, (i) in whole or in part, from time to time, on any date on or afterNovember 10, 2022 (or, if not a Business Day, the next succeeding Business Day), or (ii) in whole but not in part at any time within 90 days following a
Regulatory Capital Treatment Event, in each case, at a redemption price per share equal to $25,000, plus (except as otherwise provided herein below) an
amount equal to any dividends per share that have accrued but not been paid for the then-current Dividend Period to but excluding the redemption date,whether or not such dividends have been declared. The redemption price for any shares of Series P shall be payable on the redemption date to the holderof such shares against surrender of the certificate(s) evidencing such shares to the Corporation or its agent. Any declared but unpaid dividends payable
on a redemption date that occurs subsequent to the Dividend Record Date for a Dividend Period shall not be paid to the holder entitled to receive theredemption price on the redemption date, but rather shall be paid to the holder of record of the redeemed shares on such Dividend Record Date relating
to the Dividend Payment Date as provided in Section 4 above. Notwithstanding the foregoing, the Corporation may not redeem shares of Series P
without having received the prior approval of the Appropriate Federal Banking Agency if then required under capital rules applicable to the
Corporation.
(b) No Sinking Fund. The Series P will not be subject to any mandatory redemption, sinking fund or other similar provisions. Holders ofSeries P will have no right to require redemption of any shares of Series P.
(c) Notice of Redemption. Notice of every redemption of shares of Series P shall be given by first class mail, postage prepaid, addressedto the holders of record of the shares to be redeemed at their respective last addresses appearing on the books of the Corporation. Such mailing shall be
at least 30 days and not more than 60 days before the date fixed for redemption. Any notice mailed as provided in this Subsection shall be conclusively
presumed to have been duly given, whether or not the holder receives such notice, but failure duly to give such notice by mail, or any defect in such
notice or in the mailing thereof, to any holder of shares of Series P designated for redemption shall not affect the validity of the proceedings for theredemption of any other shares of Series P. Notwithstanding the foregoing, if the Series P or any depositary shares representing interests in the Series P
are issued in book-entry form through The Depository Trust Company or any other similar facility, notice of redemption may be given to the holders ofSeries P at such time and in any manner permitted by such facility. Each such notice given to a holder shall state: (1) the redemption date; (2) the
number of shares of Series P to be redeemed and, if less than all the shares held by such holder are to be redeemed, the number of such shares to beredeemed from such holder; (3) the redemption price; and (4) the place or places where certificates for such shares are to be surrendered for payment of
the redemption price.
I-9

(d) Partial Redemption. In case of any redemption of only part of the shares of Series P at the time outstanding, the shares to beredeemed shall be selected either pro rata or by lot. Subject to the provisions hereof, the Corporation shall have full power and authority to prescribe theterms and conditions upon which shares of Series P shall be redeemed from time to time. If fewer than all the shares represented by any certificate areredeemed, a new certificate shall be issued representing the unredeemed shares without charge to the holder thereof.
(e) Effectiveness of Redemption. If notice of redemption has been duly given and if on or before the redemption date specified in thenotice all funds necessary for the redemption have been set aside by the Corporation, separate and apart from its other funds, in trust for the pro rata
benefit of the holders of the shares called for redemption, so as to be and continue to be available therefor, then, notwithstanding that any certificate forany share so called for redemption has not been surrendered for cancellation, on and after the redemption date dividends shall cease to accrue on all
shares so called for redemption, all shares so called for redemption shall no longer be deemed outstanding and all rights with respect to such shares shallforthwith on such redemption date cease and terminate, except only the right of the holders thereof to receive the amount payable on such redemption,
without interest. Any funds unclaimed at the end of three years from the redemption date shall, to the extent permitted by law, be released to the
Corporation, after which time the holders of the shares so called for redemption shall look only to the Corporation for payment of the redemption priceof such shares.
Section 7. Voting Rights.
(a) General. The holders of Series P shall not have any voting rights except as set forth below or as otherwise from time to time requiredby law.
(b) Right To Elect Two Directors Upon Nonpayment Events. If and whenever dividends on any shares of Series P shall not have been
declared and paid for any Dividend Periods that, in aggregate, equal at least 18 months, whether or not consecutive (a “Nonpayment Event”), thenumber of directors then constituting the Board of Directors shall automatically be increased by two and the holders of Series P, together with theholders of all outstanding shares of Voting Preferred Stock, voting together as a single class, shall be entitled to elect the two additional directors (the“Preferred Stock Directors”), provided that the Board of Directors shall at no time include more than two Preferred Stock Directors (including, forpurposes of this limitation, all directors that the holders of any series of Voting Preferred Stock are entitled to elect pursuant to like voting rights).
I-10

In the event that the holders of the Series P, and such other holders of Voting Preferred Stock, shall be entitled to vote for the election of
the Preferred Stock Directors following a Nonpayment Event, such directors shall be initially elected following such Nonpayment Event only at a
special meeting called at the request of the holders of record of at least 20% of the Series P or of any other series of Voting Preferred Stock thenoutstanding (unless such request for a special meeting is received less than 90 days before the date fixed for the next annual or special meeting of thestockholders of the Corporation, in which event such election shall be held only at such next annual or special meeting of stockholders), and at eachsubsequent annual meeting of stockholders of the Corporation. Such request to call a special meeting for the initial election of the Preferred Stock
Directors after a Nonpayment Event shall be made by written notice, signed by the requisite holders of Series P or any series of Voting Preferred Stock,and delivered to the Secretary of the Corporation in such manner as provided for in Section 9 below, or as may otherwise be required by law.
When dividends have been paid (or declared and a sum sufficient for payment thereof set aside) in full on the Series P for consecutive
Dividend Periods that, in aggregate, equal at least one year after a Nonpayment Event, then the right of the holders of Series P to elect the Preferred
Stock Directors shall cease (but subject always to revesting of such voting rights in the case of any future Nonpayment Event), and, if and when any
rights of holders of Series P and Voting Preferred Stock to elect the Preferred Stock Directors shall have ceased, the terms of office of all the Preferred
Stock Directors shall forthwith terminate and the number of directors constituting the Board of Directors shall automatically be reduced accordingly.
Any Preferred Stock Director may be removed at any time without cause by the holders of record of a majority of all of the outstanding
shares of the Series P and Voting Preferred Stock, when they have the voting rights described above (voting together as a single class). So long as a
Nonpayment Event shall continue, any vacancy in the office of a Preferred Stock Director (other than prior to the initial election of Preferred Stock
Directors after a Nonpayment Event) may be filled by the written consent of the Preferred Stock Director remaining in office, or if none remains in
office, by a vote of the holders of record of a majority of all of the outstanding shares of the Series P and Voting Preferred Stock, when they have thevoting rights described above (voting together as a single class). Any such vote of stockholders to remove, or to fill a vacancy in the office of, aPreferred Stock Director may be taken only at a special meeting of such stockholders, called as provided above for an initial election of Preferred Stock
Director after a Nonpayment Event (unless such request is received less than 90 days before the date fixed for the next annual or special meeting of thestockholders, in which event such election shall be held at such next annual or special meeting of stockholders). The Preferred Stock Directors shalleach be entitled to one vote per director on any matter that shall come before the Board of Directors for a vote. Each Preferred Stock Director elected atany special meeting of stockholders or by written consent of the other Preferred Stock Director shall hold office until the next annual meeting of thestockholders if such office shall not have previously terminated as above provided.
(c) Other Voting Rights. So long as any shares of Series P are outstanding, in addition to any other vote or consent of stockholders
required by law or by the Certificate of Incorporation, the vote or consent of the holders of at least 662⁄3% of the shares of Series P and any Voting
Preferred Stock at the time outstanding and entitled to vote thereon, voting together as a single class, given in person or by proxy, either in writing
without a meeting or by vote at any meeting called for the purpose, shall be necessary for effecting or validating:
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(i) Authorization of Senior Stock. Any amendment or alteration of the Certificate of Incorporation to authorize or create, or increase theauthorized amount of, any shares of any class or series of capital stock of the Corporation ranking senior to the Series P with respect to either orboth the payment of dividends and/or the distribution of assets on any liquidation, dissolution or winding up of the Corporation;(ii) Amendment of Series P. Any amendment, alteration or repeal of any provision of the Certificate of Incorporation so as to materiallyand adversely affect the special rights, preferences, privileges or voting powers of the Series P, taken as a whole; or(iii) Share Exchanges, Reclassifications, Mergers and Consolidations. Any consummation of a binding share exchange orreclassification involving the Series P, or of a merger or consolidation of the Corporation with another corporation or other entity, unless in eachcase (x) the shares of Series P remain outstanding or, in the case of any such merger or consolidation with respect to which the Corporation is
not the surviving or resulting entity, are converted into or exchanged for preference securities of the surviving or resulting entity or its ultimate
parent, and (y) such shares remaining outstanding or such preference securities, as the case may be, have such rights, preferences, privileges andvoting powers, and limitations and restrictions thereof, taken as a whole, as are not materially less favorable to the holders thereof than therights, preferences, privileges and voting powers, and limitations and restrictions thereof, of the Series P immediately prior to suchconsummation, taken as a whole;provided, however, that for all purposes of this Section 7(c), any increase in the amount of the authorized or issued Series P or authorized Preferred
Stock, or the creation and issuance, or an increase in the authorized or issued amount, of any other series of Preferred Stock ranking equally with and/or
junior to the Series P with respect to the payment of dividends (whether such dividends are cumulative or non-cumulative) and/or the distribution ofassets upon liquidation, dissolution or winding up of the Corporation will not be deemed to adversely affect the rights, preferences, privileges or voting
powers of the Series P.
If any amendment, alteration, repeal, share exchange, reclassification, merger or consolidation specified in this Section 7(c) would
adversely affect the Series P and one or more but not all other series of Preferred Stock, then only the Series P and such series of Preferred Stock as areadversely affected by and entitled to vote on the matter shall vote on the matter together as a single class (in lieu of all other series of Preferred Stock).
I-12

(d) Changes for Clarification. Without the consent of the holders of the Series P, so long as such action does not adversely affect therights, preferences, privileges and voting powers, and limitations and restrictions thereof, of the Series P, the Corporation may amend, alter, supplement
or repeal any terms of the Series P:(i) to cure any ambiguity, or to cure, correct or supplement any provision contained in this Certificate of Designations that may be
defective or inconsistent; or(ii) to make any provision with respect to matters or questions arising with respect to the Series P that is not inconsistent with theprovisions of this Certificate of Designations.
(e) Changes after Provision for Redemption. No vote or consent of the holders of Series P shall be required pursuant to Section 7(b), (c)or (d) above if, at or prior to the time when any such vote or consent would otherwise be required pursuant to such Section, all outstanding shares ofSeries P shall have been redeemed, or shall have been called for redemption upon proper notice and sufficient funds shall have been set aside for such
redemption, in each case pursuant to Section 6 above.
(f) Procedures for Voting and Consents. The rules and procedures for calling and conducting any meeting of the holders of Series P(including, without limitation, the fixing of a record date in connection therewith), the solicitation and use of proxies at such a meeting, the obtaining of
written consents and any other aspect or matter with regard to such a meeting or such consents shall be governed by any rules the Board of Directors or
the Committee (or another duly authorized committee of the Board of Directors), in its discretion, may adopt from time to time, which rules andprocedures shall conform to the requirements of the Certificate of Incorporation, the ByLaws, applicable law and any national securities exchange orother trading facility on which the Series P is listed or traded at the time. Whether the vote or consent of the holders of a plurality, majority or otherportion of the shares of Series P and all Voting Preferred Stock has been cast or given on any matter on which the holders of shares of Series P are
entitled to vote shall be determined by the Corporation by reference to the specified liquidation amounts of the shares voted or covered by the consent.
Section 8. Record Holders. To the fullest extent permitted by applicable law, the Corporation and the transfer agent for the Series P may
deem and treat the record holder of any share of Series P as the true and lawful owner thereof for all purposes, and neither the Corporation nor suchtransfer agent shall be affected by any notice to the contrary.
Section 9. Notices. All notices or communications in respect of Series P shall be sufficiently given if given in writing and delivered inperson or by first class mail, postage prepaid, or if given in such other manner as may be permitted in this Certificate of Designations, in the Certificate
of Incorporation or ByLaws or by applicable law.
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Section 10. No Preemptive Rights. No share of Series P shall have any rights of preemption whatsoever as to any securities of the
Corporation, or any warrants, rights or options issued or granted with respect thereto, regardless of how such securities, or such warrants, rights or
options, may be designated, issued or granted.
Section 11. Other Rights. The shares of Series P shall not have any voting powers, preferences or relative, participating, optional or otherspecial rights, or qualifications, limitations or restrictions thereof, other than as set forth herein or in the Certificate of Incorporation or as provided byapplicable law.

I-14

Appendix J

CERTIFICATE OF DESIGNATIONS
OF
5.50% FIXED-RATE RESET NON-CUMULATIVE PREFERREDSTOCK, SERIES Q
OF
THE GOLDMAN SACHS GROUP, INC.
THE GOLDMAN SACHS GROUP, INC., a corporation organized and existing under the General Corporation Law of the State of
Delaware (the “Corporation”), in accordance with the provisions of Sections 103 and 151 thereof, DOES HEREBY CERTIFY:
The Securities Issuance Committee (the “Committee”) of the board of directors of the Corporation (the “Board of Directors”), in
accordance with the resolutions of the Board of Directors dated October 28, 2011, the provisions of the restated certificate of incorporation and theamended and restated bylaws of the Corporation and applicable law, by unanimous written consent dated June 13th, 2019, adopted the following
resolution creating a series of 20,000 shares of Preferred Stock of the Corporation designated as “5.50% Fixed-Rate Reset Non-Cumulative Preferred
Stock, Series Q”.
RESOLVED, that pursuant to the authority vested in the Committee and in accordance with the resolutions of the Board of Directors
dated October 28, 2011, the provisions of the restated certificate of incorporation and the amended and restated bylaws of the Corporation andapplicable law, a series of Preferred Stock, par value $.01 per share, of the Corporation be and hereby is created, and that the designation and number ofshares of such series, and the voting and other powers, preferences and relative, participating, optional or other rights, and the qualifications, limitations
and restrictions thereof, of the shares of such series, are as follows:
Section 1. Designation. The distinctive serial designation of such series of Preferred Stock is “5.50% Fixed-Rate Reset Non-Cumulative
Preferred Stock, Series Q” (“Series Q”). Each share of Series Q shall be identical in all respects to every other share of Series Q, except as to therespective dates from which dividends thereon shall accrue, to the extent such dates may differ as permitted pursuant to Section 4(a) below.
Section 2. Number of Shares. The authorized number of shares of Series Q shall be 20,000. Shares of Series Q that are redeemed,purchased or otherwise acquired by the Corporation shall be cancelled and shall revert to authorized but unissued shares of Series Q.

Section 3. Definitions. As used herein with respect to Series Q:(a) “30/360 (ISDA) Day Count Convention” means the number of days in the Dividend Period in respect of which payment is being madedivided by 360, calculated on a formula basis as follows:[360×(Y2–Y1)]+[30×(M2–M1)]+(D2–D1)
360
where:“Y1” is the year, expressed as a number, in which the first day of the Dividend Period falls;“Y2” is the year, expressed as a number, in which the day immediately following the last day included in the Dividend Period falls;“M1” is the calendar month, expressed as a number, in which the first day of the Dividend Period falls;“M2” is the calendar month, expressed as a number, in which the day immediately following the last day included in the Dividend Period
falls;“D1” is the first calendar day, expressed as a number, of the Dividend Period, unless such number would be 31, in which case D1 will be
30; and“D2” is the calendar day, expressed as a number, immediately following the last day included in the Dividend Period, unless such number
would be 31 and D1 is greater than 29, in which case D2 will be 30.
(b) “Appropriate Federal Banking Agency” means the “appropriate federal banking agency” with respect to the Corporation as that term isdefined in Section 3(q) of the Federal Deposit Insurance Act or any successor provision.
(c) “Board of Directors” means the board of directors of the Corporation.
(d) “ByLaws” means the amended and restated bylaws of the Corporation, as they may be amended from time to time.
(e) “Business Day” means a day that is a Monday, Tuesday, Wednesday, Thursday or Friday and is not a day on which banking
institutions in New York City are generally authorized or obligated by law or executive order to close, subject to any adjustments made by the
Calculation Agent as provided for herein.
(f) “Calculation Agent” means, at any time, the person or entity appointed by the Corporation and serving as such agent at such time. The
Corporation may terminate any such appointment and may appoint a successor agent at any time and from time to time, provided that the
Corporation shall use its best efforts to ensure that there is, at all relevant times when the Series Q is outstanding, a person or entity appointed
and serving as such agent. The Calculation Agent may be a person or entity affiliated with the Corporation.
J-2

(g) “Certificate of Designations” means this Certificate of Designations relating to the Series Q, as it may be amended from time to time.
(h) “Certification of Incorporation” shall mean the restated certificate of incorporation of the Corporation, as it may be amended from time
to time, and shall include this Certificate of Designations.
(i) “Common Stock” means the common stock, par value $0.01 per share, of the Corporation.
(j) “Dividend Payment Date” means the 10th day of February and August of each year, commencing on February 10, 2020.
(k) “Dividend Period” is the period from and including a Dividend Payment Date to but excluding the next Dividend Payment Date,
except that the initial dividend period will commence on and include the original issue date of the Series Q and will end on and exclude the
February 10, 2020 Dividend Payment Date.
(l) “Five-Year Treasury Rate” means:•

The average of the yields on actively traded U.S. treasury securities adjusted to constant maturity, for five-year maturities, for thefive Business Days appearing under the caption “Treasury Constant Maturities” in the most recently published statistical release
designated H.15 Daily Update or any successor publication which is published by the Board of Governors of the Federal Reserve
System, as determined by the Calculation Agent in its sole discretion.

•

If no calculation is provided as described above, then the Calculation Agent, after consulting such sources as it deems comparable toany of the foregoing calculations, or any such source as it deems reasonable from which to estimate the five-year treasury rate, shalldetermine the five-year treasury rate in its sole discretion, provided that if the Calculation Agent determines there is an industryaccepted successor five-year treasury rate, then the Calculation Agent shall use such successor rate. If the Calculation Agent hasdetermined a substitute or successor base rate in accordance with the foregoing, the Calculation Agent in its sole discretion may
determine the Business Day convention, the definition of Business Day and the Reset Dividend Determination Dates to be used andany other relevant methodology for calculating such substitute or successor base rate, including any adjustment factor needed tomake such substitute or successor base rate comparable to the Five-Year Treasury Rate, in a manner that is consistent with industryaccepted practices for such substitute or successor base rate.
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The Five-Year Treasury Rate will be determined by the Calculation Agent on the Reset Dividend Determination Date.
(m) “Junior Stock” means the Common Stock and any other class or series of stock of the Corporation (other than Series Q) that ranks
junior to Series Q either or both as to the payment of dividends and/or as to the distribution of assets on any liquidation, dissolution or winding
up of the Corporation.
(n) “Parity Stock” means any class or series of stock of the Corporation (other than Series Q) that ranks equally with Series Q both in thepayment of dividends and in the distribution of assets on any liquidation, dissolution or winding up of the Corporation.
(o) “Preferred Stock” means any and all series of Preferred Stock, having a par value of $0.01 per share, of the Corporation, including theSeries Q.
(p) “Regulatory Capital Treatment Event” means the good faith determination by the Corporation that, as a result of (i) any amendment to,or change in, the laws, rules or regulations of the United States or any political subdivision of or in the United States that is enacted or becomes
effective after the initial issuance of any share of Series Q, (ii) any proposed change in those laws, rules or regulations that is announced or
becomes effective after the initial issuance of any share of Series Q, or (iii) any official administrative decision or judicial decision oradministrative action or other official pronouncement interpreting or applying those laws, rules or regulations or policies with respect thereto
that is announced after the initial issuance of any share of Series Q, there is more than an insubstantial risk that the Corporation will not be
entitled to treat the full liquidation preference amount of $25,000 per share of Series Q then outstanding as “tier 1 capital” (or its equivalent) for
purposes of the capital adequacy rules of the Board of Governors of the Federal Reserve System (or, as and if applicable, the capital adequacy
rules or regulations of any successor Appropriate Federal Banking Agency) as then in effect and applicable, for so long as any share of Series Q
is outstanding.
(q) “Reset Date” means August 10, 2024 and each date falling on the fifth anniversary of the preceding Reset Date, in each case,regardless of whether such day is a Business Day.
(r) “Reset Dividend Determination Date” means, in respect of any Reset Period, the day falling three Business Days prior to the beginningof such Reset Period, subject to any adjustments made by the Calculation Agent as provided for herein.
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(s) “Reset Period” means the period from and including August 10, 2024 to, but excluding, the next following Reset Date and thereafter
each period from and including each Reset Date to, but excluding, the next following Reset Date.
(t) “Voting Preferred Stock” means, with regard to any election or removal of a Preferred Stock Director (as defined in Section 7(b)below) or any other matter as to which the holders of Series Q are entitled to vote as specified in Section 7 of this Certificate of Designations,any and all series of Preferred Stock (other than Series Q) that rank equally with Series Q either as to the payment of dividends or as to the
distribution of assets upon liquidation, dissolution or winding up of the Corporation and upon which like voting rights have been conferred andare exercisable with respect to such matter.
Section 4. Dividends.
(a) Rate. Holders of Series Q shall be entitled to receive, when, as and if declared by the Board of Directors or the Committee (or another
duly authorized committee of the Board of Directors) out of funds legally available for the payment of dividends under Delaware law, non-cumulative
cash dividends per each share of Series Q at the rate determined as set forth below in this Section (4) applied to the liquidation preference amount of$25,000 per share of Series Q. Such dividends shall be payable in arrears (as provided below in this Section 4(a)), but only when, as and if declared by
the Board of Directors or the Committee (or another duly authorized committee of the Board of Directors), on each Dividend Payment Date. Dividends
will accrue (i) from the date of original issue to, but excluding, August 10, 2024 at a fixed rate per annum of 5.50%, and (ii) from, and including
August 10, 2024, during each Reset Period, at a rate per annum equal to the Five-Year Treasury Rate as of the most recent Reset Dividend
Determination Date plus 3.623%; provided that if any such Dividend Payment Date is a day that is not a Business Day, such dividend shall instead bepayable on the next succeeding Business Day without interest or other payment in respect of such delayed payment. Dividends on Series Q shall not be
cumulative; holders of Series Q shall not be entitled to receive any dividends not declared by the Board of Directors or the Committee (or another duly
authorized committee of the Board of Directors) and no interest, or sum of money in lieu of interest, shall be payable in respect of any dividend not so
declared.
Dividends on the Series Q shall not be declared or set aside for payment if and to the extent such dividends would cause the Corporation to
fail to comply with the capital adequacy rules of the Board of Governors of the Federal Reserve System (or, as and if applicable, the capital adequacy
rules or regulations of any successor Appropriate Federal Banking Agency) applicable to the Corporation.
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Dividends that are payable on Series Q on any Dividend Payment Date will be payable to holders of record of Series Q as they appear on
the stock register of the Corporation on the applicable record date, which shall be the 15th calendar day before such Dividend Payment Date or suchother record date fixed by the Board of Directors or the Committee (or another duly authorized committee of the Board of Directors) that is not morethan 60 nor less than 10 days prior to such Dividend Payment Date (each, a “Dividend Record Date”). Any such day that is a Dividend Record Dateshall be a Dividend Record Date whether or not such day is a Business Day.
Each Dividend Period shall commence on and include a Dividend Payment Date (other than the initial Dividend Period, which shallcommence on and include the date of original issue of the Series Q, provided that, for any share of Series Q issued after such original issue date, theinitial Dividend Period for such shares may commence on and include such other date as the Board of Directors or the Committee (or another duly
authorized committee of the Board of Directors) shall determine and publicly disclose) and shall end on and include the calendar day next preceding thenext Dividend Payment Date. Dividends payable on the Series Q in respect of any Dividend Period shall be calculated on the basis of the 30/360 (ISDA)
Day Count Convention. Dividends payable in respect of a Dividend Period shall be payable in arrears - i.e., on the first Dividend Payment Date after
such Dividend Period.
The Calculation Agent’s determination of any dividend rate, and its calculation of the amount of dividends for any Dividend Period, andany other adjustments made by the Calculation Agent pursuant to the terms hereof will be maintained on file at the Corporation’s offices, will be madeavailable to any stockholder upon request and will be final and binding in the absence of manifest error.
Holders of Series Q shall not be entitled to any dividends, whether payable in cash, securities or other property, other than dividends (ifany) declared and payable on the Series Q as specified in this Section 4 (subject to the other provisions of this Certificate of Designations).
(b) Priority of Dividends. So long as any share of Series Q remains outstanding, no dividend shall be declared or paid on the Common
Stock or any other shares of Junior Stock (other than a dividend payable solely in Junior Stock), and no Common Stock or other Junior Stock shall bepurchased, redeemed or otherwise acquired for consideration by the Corporation, directly or indirectly (other than as a result of a reclassification of
Junior Stock for or into other Junior Stock, or the exchange or conversion of one share of Junior Stock for or into another share of Junior Stock andother than through the use of the proceeds of a substantially contemporaneous sale of Junior Stock) during a Dividend Period, unless the full dividends
for the latest completed Dividend Period on all outstanding shares of Series Q have been declared and paid (or declared and a sum sufficient for thepayment thereof has been set aside). The foregoing provision shall not restrict the ability of Goldman Sachs & Co. LLC, or any other affiliate of the
Corporation, to engage in any market-making transactions in Junior Stock in the ordinary course of business.
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When dividends are not paid (or declared and a sum sufficient for payment thereof set aside) on any Dividend Payment Date (or, in thecase of Parity Stock having dividend payment dates different from the Dividend Payment Dates, on a dividend payment date falling within a Dividend
Period) in full upon the Series Q and any shares of Parity Stock, all dividends declared on the Series Q and all such Parity Stock and payable on such
Dividend Payment Date (or, in the case of Parity Stock having dividend payment dates different from the Dividend Payment Dates, on a dividend
payment date falling within the Dividend Period related to such Dividend Payment Date) shall be declared pro rata so that the respective amounts ofsuch dividends shall bear the same ratio to each other as all accrued but unpaid dividends per share on the Series Q and all Parity Stock payable on such
Dividend Payment Date (or, in the case of Parity Stock having dividend payment dates different from the Dividend Payment Dates, on a dividend
payment date falling within the Dividend Period related to such Dividend Payment Date) bear to each other.
Subject to the foregoing, such dividends (payable in cash, securities or other property) as may be determined by the Board of Directors or
the Committee (or another duly authorized committee of the Board of Directors) may be declared and paid on any securities, including Common Stockand other Junior Stock, from time to time out of any funds legally available for such payment, and the Series Q shall not be entitled to participate in any
such dividends.
Section 5. Liquidation Rights.
(a) Voluntary or Involuntary Liquidation. In the event of any liquidation, dissolution or winding up of the affairs of the Corporation,
whether voluntary or involuntary, holders of Series Q shall be entitled to receive, out of the assets of the Corporation or proceeds thereof (whether
capital or surplus) available for distribution to stockholders of the Corporation, and after satisfaction of all liabilities and obligations to creditors of the
Corporation, before any distribution of such assets or proceeds is made to or set aside for the holders of Common Stock and any other stock of the
Corporation ranking junior to the Series Q as to such distribution, in full an amount equal to $25,000 per share, together with an amount equal to all
dividends (if any) that have been declared but not paid prior to the date of payment of such distribution (but without any amount in respect of dividends
that have not been declared prior to such payment date).
(b) Partial Payment. If in any distribution described in Section 5(a) above the assets of the Corporation or proceeds thereof are notsufficient to pay the Liquidation Preferences (as defined below) in full to all holders of Series Q and all holders of any stock of the Corporation ranking
equally with the Series Q as to such distribution, the amounts paid to the holders of Series Q and to the holders of all such other stock shall be paid pro
rata in accordance with the respective aggregate Liquidation Preferences of the holders of Series Q and the holders of all such other stock. In any such
distribution, the “Liquidation Preference” of any holder of stock of the Corporation shall mean the amount otherwise payable to such holder in such
distribution (assuming no limitation on the assets of the Corporation available for such distribution), including an amount equal to any declared but
unpaid dividends (and, in the case of any holder of stock other than Series Q and on which dividends accrue on a cumulative basis, an amount equal toany unpaid, accrued, cumulative dividends, whether or not declared, as applicable).
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(c) Residual Distributions. If the Liquidation Preference has been paid in full to all holders of Series Q, the holders of other stock of the
Corporation shall be entitled to receive all remaining assets of the Corporation (or proceeds thereof) according to their respective rights and preferences.
(d) Merger, Consolidation and Sale of Assets Not Liquidation. For purposes of this Section 5, the merger or consolidation of the
Corporation with any other corporation or other entity, including a merger or consolidation in which the holders of Series Q receive cash, securities orother property for their shares, or the sale, lease or exchange (for cash, securities or other property) of all or substantially all of the assets of the
Corporation, shall not constitute a liquidation, dissolution or winding up of the Corporation.
Section 6. Redemption.
(a) Optional Redemption. The Series Q is perpetual and has no maturity date. The Corporation may, at its option, redeem the shares ofSeries Q at the time outstanding, upon notice given as provided in Section 6(c) below, (i) in whole or in part, on any Dividend Payment Date on or after
August 10, 2024, or (ii) in whole but not in part at any time within 90 days following a Regulatory Capital Treatment Event, in each case, at aredemption price per share equal to $25,000, plus (except as otherwise provided herein below) an amount equal to any declared and unpaid dividends
per share to but excluding the redemption date, without accumulation of undeclared dividends. The redemption price for any shares of Series Q shall bepayable on the redemption date to the holder of such shares against surrender of the certificate(s) evidencing such shares to the Corporation or its agent.
Any declared but unpaid dividends payable on a redemption date that occurs subsequent to the Dividend Record Date for a Dividend Period shall not be
paid to the holder entitled to receive the redemption price on the redemption date, but rather shall be paid to the holder of record of the redeemed shareson such Dividend Record Date relating to the Dividend Payment Date as provided in Section 4 above. Notwithstanding the foregoing, the Corporation
may not redeem shares of Series Q without having received the prior approval of the Appropriate Federal Banking Agency if then required under capitalrules applicable to the Corporation.
(b) No Sinking Fund. The Series Q will not be subject to any mandatory redemption, sinking fund or other similar provisions. Holders ofSeries Q will have no right to require redemption of any shares of Series Q.
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(c) Notice of Redemption. Notice of every redemption of shares of Series Q shall be given by first class mail, postage prepaid, addressedto the holders of record of the shares to be redeemed at their respective last addresses appearing on the books of the Corporation. Such mailing shall be
at least 15 days and not more than 60 days before the date fixed for redemption. Any notice mailed as provided in this Subsection shall be conclusively
presumed to have been duly given, whether or not the holder receives such notice, but failure duly to give such notice by mail, or any defect in such
notice or in the mailing thereof, to any holder of shares of Series Q designated for redemption shall not affect the validity of the proceedings for theredemption of any other shares of Series Q. Notwithstanding the foregoing, if the Series Q or any depositary shares representing interests in the Series Q
are issued in book-entry form through The Depository Trust Company or any other similar facility, notice of redemption may be given to the holders ofSeries Q at such time and in any manner permitted by such facility. Each notice given to a holder shall state: (1) the redemption date; (2) the number ofshares of Series Q to be redeemed and, if less than all the shares held by such holder are to be redeemed, the number of such shares to be redeemed fromsuch holder; (3) the redemption price; and (4) the place or places where holders may surrender certificates evidencing shares of Series Q Preferred Stockfor payment of the redemption price.
(d) Partial Redemption. In case of any redemption of only part of the shares of Series Q at the time outstanding, the shares to beredeemed shall be selected either pro rata or by lot. Subject to the provisions hereof, the Corporation shall have full power and authority to prescribe theterms and conditions upon which shares of Series Q shall be redeemed from time to time. If fewer than all the shares represented by any certificate areredeemed, a new certificate shall be issued representing the unredeemed shares without charge to the holder thereof.
(e) Effectiveness of Redemption. If notice of redemption has been duly given and if on or before the redemption date specified in thenotice all funds necessary for the redemption have been set aside by the Corporation, separate and apart from its other funds, in trust for the pro rata
benefit of the holders of the shares called for redemption, so as to be and continue to be available therefor, then, notwithstanding that any certificate forany share so called for redemption has not been surrendered for cancellation, on and after the redemption date dividends shall cease to accrue on all
shares so called for redemption, all shares so called for redemption shall no longer be deemed outstanding and all rights with respect to such shares shallforthwith on such redemption date cease and terminate, except only the right of the holders thereof to receive the amount payable on such redemption,
without interest. Any funds unclaimed at the end of three years from the redemption date shall, to the extent permitted by law, be released to the
Corporation, after which time the holders of the shares so called for redemption shall look only to the Corporation for payment of the redemption priceof such shares.
Section 7. Voting Rights.
(a) General. The holders of Series Q shall not have any voting rights except as set forth below or as otherwise from time to time requiredby law.
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(b) Right To Elect Two Directors Upon Nonpayment Events. If and whenever dividends on any shares of Series Q shall not have been
declared and paid for any Dividend Periods that, in aggregate, equal at least 18 months, whether or not consecutive (a “Nonpayment Event”), thenumber of directors then constituting the Board of Directors shall automatically be increased by two and the holders of Series Q, together with theholders of all outstanding shares of Voting Preferred Stock, voting together as a single class, shall be entitled to elect the two additional directors (the“Preferred Stock Directors”), provided that the Board of Directors shall at no time include more than two Preferred Stock Directors (including, forpurposes of this limitation, all directors that the holders of any series of Voting Preferred Stock are entitled to elect pursuant to like voting rights).
In the event that the holders of the Series Q, and such other holders of Voting Preferred Stock, shall be entitled to vote for the election of
the Preferred Stock Directors following a Nonpayment Event, such directors shall be initially elected following such Nonpayment Event only at a
special meeting called at the request of the holders of record of at least 20% of the Series Q or of any other series of Voting Preferred Stock thenoutstanding (unless such request for a special meeting is received less than 90 days before the date fixed for the next annual or special meeting of thestockholders of the Corporation, in which event such election shall be held only at such next annual or special meeting of stockholders), and at eachsubsequent annual meeting of stockholders of the Corporation. Such request to call a special meeting for the initial election of the Preferred Stock
Directors after a Nonpayment Event shall be made by written notice, signed by the requisite holders of Series Q or any series of Voting Preferred Stock,and delivered to the Secretary of the Corporation in such manner as provided for in Section 9 below, or as may otherwise be required by law.
When dividends have been paid (or declared and a sum sufficient for payment thereof set aside) in full on the Series Q for consecutive
Dividend Periods that, in aggregate, equal at least one year after a Nonpayment Event, then the right of the holders of Series Q to elect the Preferred
Stock Directors shall cease (but subject always to revesting of such voting rights in the case of any future Nonpayment Event), and, if and when any
rights of holders of Series Q and Voting Preferred Stock to elect the Preferred Stock Directors shall have ceased, the terms of office of all the Preferred
Stock Directors shall forthwith terminate and the number of directors constituting the Board of Directors shall automatically be reduced accordingly.
Any Preferred Stock Director may be removed at any time without cause by the holders of record of a majority of all of the outstanding
shares of the Series Q and Voting Preferred Stock, when they have the voting rights described above (voting together as a single class). So long as a
Nonpayment Event shall continue, any vacancy in the office of a Preferred Stock Director (other than prior to the initial election of Preferred Stock
Directors after a Nonpayment Event) may be filled by the written consent of the Preferred Stock Director remaining in office, or if none remains in
office, by a vote of the holders of record of a majority of all of the outstanding shares of the Series Q and Voting Preferred Stock, when they have thevoting rights described above (voting together as a single class). Any such vote of stockholders to remove, or to fill a vacancy in the office of, aPreferred
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Stock Director may be taken only at a special meeting of such stockholders, called as provided above for an initial election of Preferred Stock Director
after a Nonpayment Event (unless such request is received less than 90 days before the date fixed for the next annual or special meeting of thestockholders, in which event such election shall be held at such next annual or special meeting of stockholders). The Preferred Stock Directors shalleach be entitled to one vote per director on any matter that shall come before the Board of Directors for a vote. Each Preferred Stock Director elected atany special meeting of stockholders or by written consent of the other Preferred Stock Director shall hold office until the next annual meeting of thestockholders if such office shall not have previously terminated as above provided.
(c) Other Voting Rights. So long as any shares of Series Q are outstanding, in addition to any other vote or consent of stockholders
required by law or by the Certificate of Incorporation, the vote or consent of the holders of at least 662⁄3% of the shares of Series Q and any Voting
Preferred Stock at the time outstanding and entitled to vote thereon, voting together as a single class, given in person or by proxy, either in writing
without a meeting or by vote at any meeting called for the purpose, shall be necessary for effecting or validating:(i) Authorization of Senior Stock. Any amendment or alteration of the Certificate of Incorporation to authorize or create, or increase theauthorized amount of, any shares of any class or series of capital stock of the Corporation ranking senior to the Series Q with respect to either orboth the payment of dividends and/or the distribution of assets on any liquidation, dissolution or winding up of the Corporation;(ii) Amendment of Series Q. Any amendment, alteration or repeal of any provision of the Certificate of Incorporation so as to materiallyand adversely affect the special rights, preferences, privileges or voting powers of the Series Q, taken as a whole; or(iii) Share Exchanges, Reclassifications, Mergers and Consolidations. Any consummation of a binding share exchange orreclassification involving the Series Q, or of a merger or consolidation of the Corporation with another corporation or other entity, unless in eachcase (x) the shares of Series Q remain outstanding or, in the case of any such merger or consolidation with respect to which the Corporation is
not the surviving or resulting entity, are converted into or exchanged for preference securities of the surviving or resulting entity or its ultimate
parent, and (y) such shares remaining outstanding or such preference securities, as the case may be, have such rights, preferences, privileges andvoting powers, and limitations and restrictions thereof, taken as a whole, as are not materially less favorable to the holders thereof than therights, preferences, privileges and voting powers, and limitations and restrictions thereof, of the Series Q immediately prior to suchconsummation, taken as a whole;J-11

provided, however, that for all purposes of this Section 7(c), any increase in the amount of the authorized or issued Series Q or authorized Preferred
Stock, or the creation and issuance, or an increase in the authorized or issued amount, of any other series of Preferred Stock ranking equally with and/or
junior to the Series Q with respect to the payment of dividends (whether such dividends are cumulative or non-cumulative) and/or the distribution ofassets upon liquidation, dissolution or winding up of the Corporation will not be deemed to adversely affect the rights, preferences, privileges or voting
powers of the Series Q.
If any amendment, alteration, repeal, share exchange, reclassification, merger or consolidation specified in this Section 7(c) would
adversely affect the Series Q and one or more but not all other series of Preferred Stock, then only the Series Q and such series of Preferred Stock as areadversely affected by and entitled to vote on the matter shall vote on the matter together as a single class (in lieu of all other series of Preferred Stock).
(d) Changes for Clarification. Without the consent of the holders of the Series Q, so long as such action does not adversely affect therights, preferences, privileges and voting powers, and limitations and restrictions thereof, of the Series Q, the Corporation may amend, alter, supplement
or repeal any terms of the Series Q:(i) to cure any ambiguity, or to cure, correct or supplement any provision contained in this Certificate of Designations that may be
defective or inconsistent; or(ii) to make any provision with respect to matters or questions arising with respect to the Series Q that is not inconsistent with theprovisions of this Certificate of Designations.
(e) Changes after Provision for Redemption. No vote or consent of the holders of Series Q shall be required pursuant to Section 7(b), (c)or (d) above if, at or prior to the time when any such vote or consent would otherwise be required pursuant to such Section, all outstanding shares ofSeries Q shall have been redeemed, or shall have been called for redemption upon proper notice and sufficient funds shall have been set aside for such
redemption, in each case pursuant to Section 6 above.
(f) Procedures for Voting and Consents. The rules and procedures for calling and conducting any meeting of the holders of Series Q(including, without limitation, the fixing of a record date in connection therewith), the solicitation and use of proxies at such a meeting, the obtaining of
written consents and any other aspect or matter with regard to such a meeting or such consents shall be governed by any rules the Board of Directors or
the Committee (or another duly authorized committee of the Board of Directors), in its discretion, may adopt from time to time, which rules andprocedures shall conform to the requirements of the Certificate of Incorporation, the ByLaws, applicable law and any national securities exchange orother trading facility on which the Series Q is listed or traded at the time. Whether the vote or consent of the holders of a plurality, majority or otherportion of the shares of Series Q and all Voting Preferred Stock has been cast or given on any matter on which the holders of shares of Series Q are
entitled to vote shall be determined by the Corporation by reference to the specified liquidation amounts of the shares voted or covered by the consent.
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Section 8. Record Holders. To the fullest extent permitted by applicable law, the Corporation and the transfer agent for the Series Q may
deem and treat the record holder of any share of Series Q as the true and lawful owner thereof for all purposes, and neither the Corporation nor suchtransfer agent shall be affected by any notice to the contrary.
Section 9. Notices. All notices or communications in respect of Series Q shall be sufficiently given if given in writing and delivered inperson or by first class mail, postage prepaid, or if given in such other manner as may be permitted in this Certificate of Designations, in the Certificate
of Incorporation or ByLaws or by applicable law.
Section 10. No Preemptive Rights. No share of Series Q shall have any rights of preemption whatsoever as to any securities of the
Corporation, or any warrants, rights or options issued or granted with respect thereto, regardless of how such securities, or such warrants, rights or
options, may be designated, issued or granted.
Section 11. Other Rights. The shares of Series Q shall not have any voting powers, preferences or relative, participating, optional or otherspecial rights, or qualifications, limitations or restrictions thereof, other than as set forth herein or in the Certificate of Incorporation or as provided byapplicable law.
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Appendix K

CERTIFICATE OF DESIGNATIONS
OF
4.95% FIXED-RATE RESET NON-CUMULATIVE PREFERREDSTOCK, SERIES R
OF
THE GOLDMAN SACHS GROUP, INC.
THE GOLDMAN SACHS GROUP, INC., a corporation organized and existing under the General Corporation Law of the State of
Delaware (the “Corporation”), in accordance with the provisions of Sections 103 and 151 thereof, DOES HEREBY CERTIFY:
The Securities Issuance Committee (the “Committee”) of the board of directors of the Corporation (the “Board of Directors”), in
accordance with the resolutions of the Board of Directors dated October 28, 2011, the provisions of the restated certificate of incorporation and theamended and restated bylaws of the Corporation and applicable law, by unanimous written consent dated November 14, 2019, adopted the following
resolution creating a series of 24,000 shares of Preferred Stock of the Corporation designated as “4.95% Fixed-Rate Reset Non-Cumulative Preferred
Stock, Series R”.
RESOLVED, that pursuant to the authority vested in the Committee and in accordance with the resolutions of the Board of Directors
dated October 28, 2011, the provisions of the restated certificate of incorporation and the amended and restated bylaws of the Corporation andapplicable law, a series of Preferred Stock, par value $.01 per share, of the Corporation be and hereby is created, and that the designation and number ofshares of such series, and the voting and other powers, preferences and relative, participating, optional or other rights, and the qualifications, limitations
and restrictions thereof, of the shares of such series, are as follows:
Section 1. Designation. The distinctive serial designation of such series of Preferred Stock is “4.95% Fixed-Rate Reset Non-Cumulative
Preferred Stock, Series R” (“Series R”). Each share of Series R shall be identical in all respects to every other share of Series R, except as to therespective dates from which dividends thereon shall accrue, to the extent such dates may differ as permitted pursuant to Section 4(a) below.
Section 2. Number of Shares. The authorized number of shares of Series R shall be 24,000. Shares of Series R that are redeemed,purchased or otherwise acquired by the Corporation shall be cancelled and shall revert to authorized but unissued shares of Series R.

Section 3. Definitions. As used herein with respect to Series R:(a) “30/360 (ISDA) Day Count Convention” means the number of days in the Dividend Period in respect of which payment is being madedivided by 360, calculated on a formula basis as follows:[360×(Y2–Y1)]+[30×(M2–M1)]+(D2–D1)
360
where:“Y1” is the year, expressed as a number, in which the first day of the Dividend Period falls;“Y2” is the year, expressed as a number, in which the day immediately following the last day included in the Dividend Period falls;“M1” is the calendar month, expressed as a number, in which the first day of the Dividend Period falls;“M2” is the calendar month, expressed as a number, in which the day immediately following the last day included in the Dividend Period
falls;“D1” is the first calendar day, expressed as a number, of the Dividend Period, unless such number would be 31, in which case D1 will be
30; and“D2” is the calendar day, expressed as a number, immediately following the last day included in the Dividend Period, unless such number
would be 31 and D1 is greater than 29, in which case D2 will be 30.
(b) “Appropriate Federal Banking Agency” means the “appropriate federal banking agency” with respect to the Corporation as that term isdefined in Section 3(q) of the Federal Deposit Insurance Act or any successor provision.
(c) “Board of Directors” means the board of directors of the Corporation.
(d) “Business Day” means a day that is a Monday, Tuesday, Wednesday, Thursday or Friday and is not a day on which banking
institutions in New York City are generally authorized or obligated by law or executive order to close, subject to any adjustments made by the
Calculation Agent as provided for herein.
(e) “ByLaws” means the amended and restated bylaws of the Corporation, as they may be amended from time to time.
(f) “Calculation Agent” means, at any time, the person or entity appointed by the Corporation and serving as such agent at such time. The
Corporation may terminate any such appointment and may appoint a successor agent at any time and from time to time, provided that the
Corporation shall use its best efforts to ensure that there is, at all relevant times when the Series R is outstanding, a person or entity appointed
and serving as such agent. The Calculation Agent may be a person or entity affiliated with the Corporation.
K-2

(g) “Certificate of Designations” means this Certificate of Designations relating to the Series R, as it may be amended from time to time.
(h) “Certification of Incorporation” shall mean the restated certificate of incorporation of the Corporation, as it may be amended from time
to time, and shall include this Certificate of Designations.
(i) “Common Stock” means the common stock, par value $0.01 per share, of the Corporation.
(j) “Dividend Payment Date” means the 10th day of February and August of each year, commencing on August 10, 2020.
(k) “Dividend Period” is the period from and including a Dividend Payment Date to but excluding the next Dividend Payment Date,
except that the initial dividend period will commence on and include the original issue date of the Series R and will end on and exclude theAugust 10, 2020 Dividend Payment Date.
(l) “Five-Year Treasury Rate” means:•

The average of the yields on actively traded U.S. treasury securities adjusted to constant maturity, for five-year maturities, for thefive Business Days appearing under the caption “Treasury Constant Maturities” in the most recently published statistical release
designated H.15 Daily Update or any successor publication which is published by the Board of Governors of the Federal Reserve
System, as determined by the Calculation Agent in its sole discretion.

•

If no calculation is provided as described above, then the Calculation Agent, after consulting such sources as it deems comparable toany of the foregoing calculations, or any such source as it deems reasonable from which to estimate the five-year treasury rate, shalldetermine the five-year treasury rate in its sole discretion, provided that if the Calculation Agent determines there is an industryaccepted successor five-year treasury rate, then the Calculation Agent shall use such successor rate. If the Calculation Agent hasdetermined a substitute or successor base rate in accordance with the foregoing, the Calculation Agent in its sole discretion may
determine the Business Day convention, the definition of Business Day and the Reset Dividend Determination Dates to be used andany other relevant methodology for calculating such substitute or successor base rate, including any adjustment factor needed tomake such substitute or successor base rate comparable to the Five-Year Treasury Rate, in a manner that is consistent with industryaccepted practices for such substitute or successor base rate.
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The Five-Year Treasury Rate will be determined by the Calculation Agent on the Reset Dividend Determination Date.
(m) “Junior Stock” means the Common Stock and any other class or series of stock of the Corporation (other than Series R) that ranks
junior to Series R either or both as to the payment of dividends and/or as to the distribution of assets on any liquidation, dissolution or winding
up of the Corporation.
(n) “Parity Stock” means any class or series of stock of the Corporation (other than Series R) that ranks equally with Series R both in thepayment of dividends and in the distribution of assets on any liquidation, dissolution or winding up of the Corporation.
(o) “Preferred Stock” means any and all series of Preferred Stock, having a par value of $0.01 per share, of the Corporation, including theSeries R.
(p) “Regulatory Capital Treatment Event” means the good faith determination by the Corporation that, as a result of (i) any amendment to,or change in, the laws, rules or regulations of the United States or any political subdivision of or in the United States that is enacted or becomes
effective after the initial issuance of any share of Series R, (ii) any proposed change in those laws, rules or regulations that is announced or
becomes effective after the initial issuance of any share of Series R, or (iii) any official administrative decision or judicial decision oradministrative action or other official pronouncement interpreting or applying those laws, rules or regulations or policies with respect thereto
that is announced after the initial issuance of any share of Series R, there is more than an insubstantial risk that the Corporation will not be
entitled to treat the full liquidation preference amount of $25,000 per share of Series R then outstanding as “tier 1 capital” (or its equivalent) for
purposes of the capital adequacy rules of the Board of Governors of the Federal Reserve System (or, as and if applicable, the capital adequacy
rules or regulations of any successor Appropriate Federal Banking Agency) as then in effect and applicable, for so long as any share of Series R
is outstanding.
(q) “Reset Date” means February 10, 2025 and each date falling on the fifth anniversary of the preceding Reset Date, in each case,regardless of whether such day is a Business Day.
(r) “Reset Dividend Determination Date” means, in respect of any Reset Period, the day falling three Business Days prior to the beginningof such Reset Period, subject to any adjustments made by the Calculation Agent as provided for herein.
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(s) “Reset Period” means the period from and including February 10, 2025 to, but excluding, the next following Reset Date and thereafter
each period from and including each Reset Date to, but excluding, the next following Reset Date.
(t) “Voting Preferred Stock” means, with regard to any election or removal of a Preferred Stock Director (as defined in Section 7(b)below) or any other matter as to which the holders of Series R are entitled to vote as specified in Section 7 of this Certificate of Designations,any and all series of Preferred Stock (other than Series R) that rank equally with Series R either as to the payment of dividends or as to the
distribution of assets upon liquidation, dissolution or winding up of the Corporation and upon which like voting rights have been conferred andare exercisable with respect to such matter.
Section 4. Dividends.
(a) Rate. Holders of Series R shall be entitled to receive, when, as and if declared by the Board of Directors or the Committee (or another
duly authorized committee of the Board of Directors) out of funds legally available for the payment of dividends under Delaware law, non-cumulative
cash dividends per each share of Series R at the rate determined as set forth below in this Section (4) applied to the liquidation preference amount of$25,000 per share of Series R. Such dividends shall be payable in arrears (as provided below in this Section 4(a)), but only when, as and if declared by
the Board of Directors or the Committee (or another duly authorized committee of the Board of Directors), on each Dividend Payment Date. Dividends
will accrue (i) from the date of original issue to, but excluding, February 10, 2025 at a fixed rate per annum of 4.95%, and (ii) from, and including
February 10, 2025, during each Reset Period, at a rate per annum equal to the Five-Year Treasury Rate as of the most recent Reset Dividend
Determination Date plus 3.224%; provided that if any such Dividend Payment Date is a day that is not a Business Day, such dividend shall instead bepayable on the next succeeding Business Day without interest or other payment in respect of such delayed payment. Dividends on Series R shall not be
cumulative; holders of Series R shall not be entitled to receive any dividends not declared by the Board of Directors or the Committee (or another duly
authorized committee of the Board of Directors) and no interest, or sum of money in lieu of interest, shall be payable in respect of any dividend not so
declared.
Dividends on the Series R shall not be declared or set aside for payment if and to the extent such dividends would cause the Corporation to
fail to comply with the capital adequacy rules of the Board of Governors of the Federal Reserve System (or, as and if applicable, the capital adequacy
rules or regulations of any successor Appropriate Federal Banking Agency) applicable to the Corporation.
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Dividends that are payable on Series R on any Dividend Payment Date will be payable to holders of record of Series R as they appear on
the stock register of the Corporation on the applicable record date, which shall be the 15th calendar day before such Dividend Payment Date or suchother record date fixed by the Board of Directors or the Committee (or another duly authorized committee of the Board of Directors) that is not morethan 60 nor less than 10 days prior to such Dividend Payment Date (each, a “Dividend Record Date”). Any such day that is a Dividend Record Dateshall be a Dividend Record Date whether or not such day is a Business Day.
Each Dividend Period shall commence on and include a Dividend Payment Date (other than the initial Dividend Period, which shallcommence on and include the date of original issue of the Series R, provided that, for any share of Series R issued after such original issue date, theinitial Dividend Period for such shares may commence on and include such other date as the Board of Directors or the Committee (or another duly
authorized committee of the Board of Directors) shall determine and publicly disclose) and shall end on and include the calendar day next preceding thenext Dividend Payment Date. Dividends payable on the Series R in respect of any Dividend Period shall be calculated on the basis of the 30/360 (ISDA)
Day Count Convention. Dividends payable in respect of a Dividend Period shall be payable in arrears - i.e., on the first Dividend Payment Date after
such Dividend Period.
The Calculation Agent’s determination of any dividend rate, and its calculation of the amount of dividends for any Dividend Period, andany other adjustments made by the Calculation Agent pursuant to the terms hereof will be maintained on file at the Corporation’s offices, will be madeavailable to any stockholder upon request and will be final and binding in the absence of manifest error.
Holders of Series R shall not be entitled to any dividends, whether payable in cash, securities or other property, other than dividends (ifany) declared and payable on the Series R as specified in this Section 4 (subject to the other provisions of this Certificate of Designations).
(b) Priority of Dividends. So long as any share of Series R remains outstanding, no dividend shall be declared or paid on the Common
Stock or any other shares of Junior Stock (other than a dividend payable solely in Junior Stock), and no Common Stock or other Junior Stock shall bepurchased, redeemed or otherwise acquired for consideration by the Corporation, directly or indirectly (other than as a result of a reclassification of
Junior Stock for or into other Junior Stock, or the exchange or conversion of one share of Junior Stock for or into another share of Junior Stock andother than through the use of the proceeds of a substantially contemporaneous sale of Junior Stock) during a Dividend Period, unless the full dividends
for the latest completed Dividend Period on all outstanding shares of Series R have been declared and paid (or declared and a sum sufficient for thepayment thereof has been set aside). The foregoing provision shall not restrict the ability of Goldman Sachs & Co. LLC, or any other affiliate of the
Corporation, to engage in any market-making transactions in Junior Stock in the ordinary course of business.
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When dividends are not paid (or declared and a sum sufficient for payment thereof set aside) on any Dividend Payment Date (or, in thecase of Parity Stock having dividend payment dates different from the Dividend Payment Dates, on a dividend payment date falling within a Dividend
Period) in full upon the Series R and any shares of Parity Stock, all dividends declared on the Series R and all such Parity Stock and payable on such
Dividend Payment Date (or, in the case of Parity Stock having dividend payment dates different from the Dividend Payment Dates, on a dividend
payment date falling within the Dividend Period related to such Dividend Payment Date) shall be declared pro rata so that the respective amounts ofsuch dividends shall bear the same ratio to each other as all accrued but unpaid dividends per share on the Series R and all Parity Stock payable on such
Dividend Payment Date (or, in the case of Parity Stock having dividend payment dates different from the Dividend Payment Dates, on a dividend
payment date falling within the Dividend Period related to such Dividend Payment Date) bear to each other.
Subject to the foregoing, such dividends (payable in cash, securities or other property) as may be determined by the Board of Directors or
the Committee (or another duly authorized committee of the Board of Directors) may be declared and paid on any securities, including Common Stockand other Junior Stock, from time to time out of any funds legally available for such payment, and the Series R shall not be entitled to participate in any
such dividends.
Section 5. Liquidation Rights.
(a) Voluntary or Involuntary Liquidation. In the event of any liquidation, dissolution or winding up of the affairs of the Corporation,
whether voluntary or involuntary, holders of Series R shall be entitled to receive, out of the assets of the Corporation or proceeds thereof (whether
capital or surplus) available for distribution to stockholders of the Corporation, and after satisfaction of all liabilities and obligations to creditors of the
Corporation, before any distribution of such assets or proceeds is made to or set aside for the holders of Common Stock and any other stock of the
Corporation ranking junior to the Series R as to such distribution, in full an amount equal to $25,000 per share, together with an amount equal to all
dividends (if any) that have been declared but not paid prior to the date of payment of such distribution (but without any amount in respect of dividends
that have not been declared prior to such payment date).
(b) Partial Payment. If in any distribution described in Section 5(a) above the assets of the Corporation or proceeds thereof are notsufficient to pay the Liquidation Preferences (as defined below) in full to all holders of Series R and all holders of any stock of the Corporation ranking
equally with the Series R as to such distribution, the amounts paid to the holders of Series R and to the holders of all such other stock shall be paid pro
rata in accordance with the respective aggregate Liquidation Preferences of the holders of Series R and the holders of all such other stock. In any such
distribution, the “Liquidation Preference” of any holder of stock of the Corporation shall mean the amount otherwise payable to such holder in such
distribution (assuming no limitation on the assets of the Corporation available for such distribution), including an amount equal to any declared but
unpaid dividends (and, in the case of any holder of stock other than Series R and on which dividends accrue on a cumulative basis, an amount equal toany unpaid, accrued, cumulative dividends, whether or not declared, as applicable).
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(c) Residual Distributions. If the Liquidation Preference has been paid in full to all holders of Series R, the holders of other stock of the
Corporation shall be entitled to receive all remaining assets of the Corporation (or proceeds thereof) according to their respective rights and preferences.
(d) Merger, Consolidation and Sale of Assets Not Liquidation. For purposes of this Section 5, the merger or consolidation of the
Corporation with any other corporation or other entity, including a merger or consolidation in which the holders of Series R receive cash, securities orother property for their shares, or the sale, lease or exchange (for cash, securities or other property) of all or substantially all of the assets of the
Corporation, shall not constitute a liquidation, dissolution or winding up of the Corporation.
Section 6. Redemption.
(a) Optional Redemption. The Series R is perpetual and has no maturity date. The Corporation may, at its option, redeem the shares ofSeries R at the time outstanding, upon notice given as provided in Section 6(c) below, (i) in whole or in part, on any Dividend Payment Date on or after
February 10, 2025, or (ii) in whole but not in part at any time within 90 days following a Regulatory Capital Treatment Event, in each case, at aredemption price per share equal to $25,000, plus (except as otherwise provided herein below) an amount equal to any declared and unpaid dividends
per share to but excluding the redemption date, without accumulation of undeclared dividends. The redemption price for any shares of Series R shall bepayable on the redemption date to the holder of such shares against surrender of the certificate(s) evidencing such shares to the Corporation or its agent.
Any declared but unpaid dividends payable on a redemption date that occurs subsequent to the Dividend Record Date for a Dividend Period shall not be
paid to the holder entitled to receive the redemption price on the redemption date, but rather shall be paid to the holder of record of the redeemed shareson such Dividend Record Date relating to the Dividend Payment Date as provided in Section 4 above. Notwithstanding the foregoing, the Corporation
may not redeem shares of Series R without having received the prior approval of the Appropriate Federal Banking Agency if then required under capitalrules applicable to the Corporation.
(b) No Sinking Fund. The Series R will not be subject to any mandatory redemption, sinking fund or other similar provisions. Holders ofSeries R will have no right to require redemption of any shares of Series R.
(c) Notice of Redemption. Notice of every redemption of shares of Series R shall be given by first class mail, postage prepaid, addressedto the holders of record of the shares to be redeemed at their respective last addresses appearing on the books of the Corporation. Such mailing shall be
at least 15 days and not more than 60 days
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before the date fixed for redemption. Any notice mailed as provided in this Subsection shall be conclusively presumed to have been duly given, whether
or not the holder receives such notice, but failure duly to give such notice by mail, or any defect in such notice or in the mailing thereof, to any holder ofshares of Series R designated for redemption shall not affect the validity of the proceedings for the redemption of any other shares of Series R.
Notwithstanding the foregoing, if the Series R or any depositary shares representing interests in the Series R are issued in book-entry form through The
Depository Trust Company or any other similar facility, notice of redemption may be given to the holders of Series R at such time and in any mannerpermitted by such facility. Each notice given to a holder shall state: (1) the redemption date; (2) the number of shares of Series R to be redeemed and, if
less than all the shares held by such holder are to be redeemed, the number of such shares to be redeemed from such holder; (3) the redemption price;and (4) the place or places where holders may surrender certificates evidencing shares of Series R Preferred Stock for payment of the redemption price.
(d) Partial Redemption. In case of any redemption of only part of the shares of Series R at the time outstanding, the shares to beredeemed shall be selected either pro rata or by lot. Subject to the provisions hereof, the Corporation shall have full power and authority to prescribe theterms and conditions upon which shares of Series R shall be redeemed from time to time. If fewer than all the shares represented by any certificate areredeemed, a new certificate shall be issued representing the unredeemed shares without charge to the holder thereof.
(e) Effectiveness of Redemption. If notice of redemption has been duly given and if on or before the redemption date specified in thenotice all funds necessary for the redemption have been set aside by the Corporation, separate and apart from its other funds, in trust for the pro rata
benefit of the holders of the shares called for redemption, so as to be and continue to be available therefor, then, notwithstanding that any certificate forany share so called for redemption has not been surrendered for cancellation, on and after the redemption date dividends shall cease to accrue on all
shares so called for redemption, all shares so called for redemption shall no longer be deemed outstanding and all rights with respect to such shares shallforthwith on such redemption date cease and terminate, except only the right of the holders thereof to receive the amount payable on such redemption,
without interest. Any funds unclaimed at the end of three years from the redemption date shall, to the extent permitted by law, be released to the
Corporation, after which time the holders of the shares so called for redemption shall look only to the Corporation for payment of the redemption priceof such shares.
Section 7. Voting Rights.
(a) General. The holders of Series R shall not have any voting rights except as set forth below or as otherwise from time to time requiredby law.
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(b) Right To Elect Two Directors Upon Nonpayment Events. If and whenever dividends on any shares of Series R shall not have been
declared and paid for any Dividend Periods that, in aggregate, equal at least 18 months, whether or not consecutive (a “Nonpayment Event”), thenumber of directors then constituting the Board of Directors shall automatically be increased by two and the holders of Series R, together with theholders of all outstanding shares of Voting Preferred Stock, voting together as a single class, shall be entitled to elect the two additional directors (the“Preferred Stock Directors”), provided that the Board of Directors shall at no time include more than two Preferred Stock Directors (including, forpurposes of this limitation, all directors that the holders of any series of Voting Preferred Stock are entitled to elect pursuant to like voting rights).
In the event that the holders of the Series R, and such other holders of Voting Preferred Stock, shall be entitled to vote for the election of
the Preferred Stock Directors following a Nonpayment Event, such directors shall be initially elected following such Nonpayment Event only at a
special meeting called at the request of the holders of record of at least 20% of the Series R or of any other series of Voting Preferred Stock thenoutstanding (unless such request for a special meeting is received less than 90 days before the date fixed for the next annual or special meeting of thestockholders of the Corporation, in which event such election shall be held only at such next annual or special meeting of stockholders), and at eachsubsequent annual meeting of stockholders of the Corporation. Such request to call a special meeting for the initial election of the Preferred Stock
Directors after a Nonpayment Event shall be made by written notice, signed by the requisite holders of Series R or any series of Voting Preferred Stock,and delivered to the Secretary of the Corporation in such manner as provided for in Section 9 below, or as may otherwise be required by law.
When dividends have been paid (or declared and a sum sufficient for payment thereof set aside) in full on the Series R for consecutive
Dividend Periods that, in aggregate, equal at least one year after a Nonpayment Event, then the right of the holders of Series R to elect the Preferred
Stock Directors shall cease (but subject always to revesting of such voting rights in the case of any future Nonpayment Event), and, if and when any
rights of holders of Series R and Voting Preferred Stock to elect the Preferred Stock Directors shall have ceased, the terms of office of all the Preferred
Stock Directors shall forthwith terminate and the number of directors constituting the Board of Directors shall automatically be reduced accordingly.
Any Preferred Stock Director may be removed at any time without cause by the holders of record of a majority of all of the outstanding
shares of the Series R and Voting Preferred Stock, when they have the voting rights described above (voting together as a single class). So long as a
Nonpayment Event shall continue, any vacancy in the office of a Preferred Stock Director (other than prior to the initial election of Preferred Stock
Directors after a Nonpayment Event) may be filled by the written consent of the Preferred Stock Director remaining in office, or if none remains in
office, by a vote of the holders of record of a majority of all of the outstanding shares of the Series R and Voting Preferred Stock, when they have thevoting rights described above (voting together as a single class). Any such vote of stockholders to remove, or to fill a vacancy in the office of, aPreferred
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Stock Director may be taken only at a special meeting of such stockholders, called as provided above for an initial election of Preferred Stock Director
after a Nonpayment Event (unless such request is received less than 90 days before the date fixed for the next annual or special meeting of thestockholders, in which event such election shall be held at such next annual or special meeting of stockholders). The Preferred Stock Directors shalleach be entitled to one vote per director on any matter that shall come before the Board of Directors for a vote. Each Preferred Stock Director elected atany special meeting of stockholders or by written consent of the other Preferred Stock Director shall hold office until the next annual meeting of thestockholders if such office shall not have previously terminated as above provided.
(c) Other Voting Rights. So long as any shares of Series R are outstanding, in addition to any other vote or consent of stockholders
required by law or by the Certificate of Incorporation, the vote or consent of the holders of at least 662⁄3% of the shares of Series R and any Voting
Preferred Stock at the time outstanding and entitled to vote thereon, voting together as a single class, given in person or by proxy, either in writing
without a meeting or by vote at any meeting called for the purpose, shall be necessary for effecting or validating:(i) Authorization of Senior Stock. Any amendment or alteration of the Certificate of Incorporation to authorize or create, or increase theauthorized amount of, any shares of any class or series of capital stock of the Corporation ranking senior to the Series R with respect to either orboth the payment of dividends and/or the distribution of assets on any liquidation, dissolution or winding up of the Corporation;(ii) Amendment of Series R. Any amendment, alteration or repeal of any provision of the Certificate of Incorporation so as to materiallyand adversely affect the special rights, preferences, privileges or voting powers of the Series R, taken as a whole; or(iii) Share Exchanges, Reclassifications, Mergers and Consolidations. Any consummation of a binding share exchange orreclassification involving the Series R, or of a merger or consolidation of the Corporation with another corporation or other entity, unless in eachcase (x) the shares of Series R remain outstanding or, in the case of any such merger or consolidation with respect to which the Corporation is
not the surviving or resulting entity, are converted into or exchanged for preference securities of the surviving or resulting entity or its ultimate
parent, and (y) such shares remaining outstanding or such preference securities, as the case may be, have such rights, preferences, privileges andvoting powers, and limitations and restrictions thereof, taken as a whole, as are not materially less favorable to the holders thereof than therights, preferences, privileges and voting powers, and limitations and restrictions thereof, of the Series R immediately prior to suchconsummation, taken as a whole;
K-11

provided, however, that for all purposes of this Section 7(c), any increase in the amount of the authorized or issued Series R or authorized Preferred
Stock, or the creation and issuance, or an increase in the authorized or issued amount, of any other series of Preferred Stock ranking equally with and/or
junior to the Series R with respect to the payment of dividends (whether such dividends are cumulative or non-cumulative) and/or the distribution ofassets upon liquidation, dissolution or winding up of the Corporation will not be deemed to adversely affect the rights, preferences, privileges or voting
powers of the Series R.
If any amendment, alteration, repeal, share exchange, reclassification, merger or consolidation specified in this Section 7(c) would
adversely affect the Series R and one or more but not all other series of Preferred Stock, then only the Series R and such series of Preferred Stock as areadversely affected by and entitled to vote on the matter shall vote on the matter together as a single class (in lieu of all other series of Preferred Stock).
(d) Changes for Clarification. Without the consent of the holders of the Series R, so long as such action does not adversely affect therights, preferences, privileges and voting powers, and limitations and restrictions thereof, of the Series R, the Corporation may amend, alter, supplement
or repeal any terms of the Series R:(i) to cure any ambiguity, or to cure, correct or supplement any provision contained in this Certificate of Designations that may be
defective or inconsistent; or(ii) to make any provision with respect to matters or questions arising with respect to the Series R that is not inconsistent with theprovisions of this Certificate of Designations.
(e) Changes after Provision for Redemption. No vote or consent of the holders of Series R shall be required pursuant to Section 7(b), (c)or (d) above if, at or prior to the time when any such vote or consent would otherwise be required pursuant to such Section, all outstanding shares ofSeries R shall have been redeemed, or shall have been called for redemption upon proper notice and sufficient funds shall have been set aside for such
redemption, in each case pursuant to Section 6 above.
(f) Procedures for Voting and Consents. The rules and procedures for calling and conducting any meeting of the holders of Series R(including, without limitation, the fixing of a record date in connection therewith), the solicitation and use of proxies at such a meeting, the obtaining of
written consents and any other aspect or matter with regard to such a meeting or such consents shall be governed by any rules the Board of Directors or
the Committee (or another duly authorized committee of the Board of Directors), in its discretion, may adopt from time to time, which rules andprocedures shall conform to the requirements of the Certificate of Incorporation, the ByLaws, applicable law and any national securities exchange orother trading facility on which the Series R is listed or traded at the time. Whether the vote or consent of the holders of a plurality, majority or otherportion of the shares of Series R and all Voting Preferred Stock has been cast or given on any matter on which the holders of shares of Series R are
entitled to vote shall be determined by the Corporation by reference to the specified liquidation amounts of the shares voted or covered by the consent.
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Section 8. Record Holders. To the fullest extent permitted by applicable law, the Corporation and the transfer agent for the Series R may
deem and treat the record holder of any share of Series R as the true and lawful owner thereof for all purposes, and neither the Corporation nor suchtransfer agent shall be affected by any notice to the contrary.
Section 9. Notices. All notices or communications in respect of Series R shall be sufficiently given if given in writing and delivered inperson or by first class mail, postage prepaid, or if given in such other manner as may be permitted in this Certificate of Designations, in the Certificate
of Incorporation or ByLaws or by applicable law.
Section 10. No Preemptive Rights. No share of Series R shall have any rights of preemption whatsoever as to any securities of the
Corporation, or any warrants, rights or options issued or granted with respect thereto, regardless of how such securities, or such warrants, rights or
options, may be designated, issued or granted.
Section 11. Other Rights. The shares of Series R shall not have any voting powers, preferences or relative, participating, optional or otherspecial rights, or qualifications, limitations or restrictions thereof, other than as set forth herein or in the Certificate of Incorporation or as provided byapplicable law.
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Appendix L

CERTIFICATE OF DESIGNATIONS
OF
4.40% FIXED-RATE RESET NON-CUMULATIVE PREFERREDSTOCK, SERIES S
OF
THE GOLDMAN SACHS GROUP, INC.
THE GOLDMAN SACHS GROUP, INC., a corporation organized and existing under the General Corporation Law of the State of
Delaware (the “Corporation”), in accordance with the provisions of Sections 103 and 151 thereof, DOES HEREBY CERTIFY:
The Securities Issuance Committee (the “Committee”) of the board of directors of the Corporation (the “Board of Directors”), in
accordance with the resolutions of the Board of Directors dated October 28, 2011, the provisions of the restated certificate of incorporation and theamended and restated bylaws of the Corporation and applicable law, by unanimous written consent dated January 27, 2020, adopted the following
resolution creating a series of 14,000 shares of Preferred Stock of the Corporation designated as “4.40% Fixed-Rate Reset Non-Cumulative Preferred
Stock, Series S”.
RESOLVED, that pursuant to the authority vested in the Committee and in accordance with the resolutions of the Board of Directors
dated October 28, 2011, the provisions of the restated certificate of incorporation and the amended and restated bylaws of the Corporation andapplicable law, a series of Preferred Stock, par value $.01 per share, of the Corporation be and hereby is created, and that the designation and number ofshares of such series, and the voting and other powers, preferences and relative, participating, optional or other rights, and the qualifications, limitations
and restrictions thereof, of the shares of such series, are as follows:
Section 1. Designation. The distinctive serial designation of such series of Preferred Stock is “4.40% Fixed-Rate Reset Non-Cumulative
Preferred Stock, Series S” (“Series S”). Each share of Series S shall be identical in all respects to every other share of Series S, except as to therespective dates from which dividends thereon shall accrue, to the extent such dates may differ as permitted pursuant to Section 4(a) below.
Section 2. Number of Shares. The authorized number of shares of Series S shall be 14,000. Shares of Series S that are redeemed,purchased or otherwise acquired by the Corporation shall be cancelled and shall revert to authorized but unissued shares of Series S.

Section 3. Definitions. As used herein with respect to Series S:(a) “30/360 (ISDA) Day Count Convention” means the number of days in the Dividend Period in respect of which payment is being madedivided by 360, calculated on a formula basis as follows:[360×(Y2–Y1)]+[30×(M2–M1)]+(D2–D1)
360
where:“Y1” is the year, expressed as a number, in which the first day of the Dividend Period falls;“Y2” is the year, expressed as a number, in which the day immediately following the last day included in the Dividend Period falls;“M1” is the calendar month, expressed as a number, in which the first day of the Dividend Period falls;“M2” is the calendar month, expressed as a number, in which the day immediately following the last day included in the Dividend Period
falls;“D1” is the first calendar day, expressed as a number, of the Dividend Period, unless such number would be 31, in which case D1 will be
30; and“D2” is the calendar day, expressed as a number, immediately following the last day included in the Dividend Period, unless such number
would be 31 and D1 is greater than 29, in which case D2 will be 30.
(b) “Appropriate Federal Banking Agency” means the “appropriate federal banking agency” with respect to the Corporation as that term isdefined in Section 3(q) of the Federal Deposit Insurance Act or any successor provision.
(c) “Board of Directors” means the board of directors of the Corporation.
(d) “Business Day” means a day that is a Monday, Tuesday, Wednesday, Thursday or Friday and is not a day on which banking
institutions in New York City are generally authorized or obligated by law or executive order to close, subject to any adjustments made by the
Calculation Agent as provided for herein.
(e) “ByLaws” means the amended and restated bylaws of the Corporation, as they may be amended from time to time.
(f) “Calculation Agent” means, at any time, the person or entity appointed by the Corporation and serving as such agent at such time. The
Corporation may terminate any such appointment and may appoint a successor agent at any time and from time to time, provided that the
Corporation shall use its best efforts to ensure that there is, at all relevant times when the Series S is outstanding, a person or entity appointed
and serving as such agent. The Calculation Agent may be a person or entity affiliated with the Corporation.
L-2

(g) “Certificate of Designations” means this Certificate of Designations relating to the Series S, as it may be amended from time to time.
(h) “Certification of Incorporation” shall mean the restated certificate of incorporation of the Corporation, as it may be amended from time
to time, and shall include this Certificate of Designations.
(i) “Common Stock” means the common stock, par value $0.01 per share, of the Corporation.
(j) “Dividend Payment Date” means the 10th day of February and August of each year, commencing on August 10, 2020.
(k) “Dividend Period” is the period from and including a Dividend Payment Date to but excluding the next Dividend Payment Date,
except that the initial dividend period will commence on and include the original issue date of the Series S and will end on and exclude theAugust 10, 2020 Dividend Payment Date.
(l) “Five-Year Treasury Rate” means:•

The average of the yields on actively traded U.S. treasury securities adjusted to constant maturity, for five-year maturities, for thefive Business Days appearing under the caption “Treasury Constant Maturities” in the most recently published statistical release
designated H.15 Daily Update or any successor publication which is published by the Board of Governors of the Federal Reserve
System, as determined by the Calculation Agent in its sole discretion.

•

If no calculation is provided as described above, then the Calculation Agent, after consulting such sources as it deems comparable toany of the foregoing calculations, or any such source as it deems reasonable from which to estimate the five-year treasury rate, shalldetermine the five-year treasury rate in its sole discretion, provided that if the Calculation Agent determines there is an industryaccepted successor five-year treasury rate, then the Calculation Agent shall use such successor rate. If the Calculation Agent hasdetermined a substitute or successor base rate in accordance with the foregoing, the Calculation Agent in its sole discretion may
determine the Business Day convention, the definition of Business Day and the Reset Dividend Determination Dates to be used andany other relevant methodology for calculating such substitute or successor base rate, including any adjustment factor needed tomake such substitute or successor base rate comparable to the Five-Year Treasury Rate, in a manner that is consistent with industryaccepted practices for such substitute or successor base rate.
L-3

The Five-Year Treasury Rate will be determined by the Calculation Agent on the Reset Dividend Determination Date.
(m) “Junior Stock” means the Common Stock and any other class or series of stock of the Corporation (other than Series S) that ranks
junior to Series S either or both as to the payment of dividends and/or as to the distribution of assets on any liquidation, dissolution or winding
up of the Corporation.
(n) “Parity Stock” means any class or series of stock of the Corporation (other than Series S) that ranks equally with Series S both in thepayment of dividends and in the distribution of assets on any liquidation, dissolution or winding up of the Corporation.
(o) “Preferred Stock” means any and all series of Preferred Stock, having a par value of $0.01 per share, of the Corporation, including theSeries S.
(p) “Regulatory Capital Treatment Event” means the good faith determination by the Corporation that, as a result of (i) any amendment to,or change in, the laws, rules or regulations of the United States or any political subdivision of or in the United States that is enacted or becomes
effective after the initial issuance of any share of Series S, (ii) any proposed change in those laws, rules or regulations that is announced or
becomes effective after the initial issuance of any share of Series S, or (iii) any official administrative decision or judicial decision oradministrative action or other official pronouncement interpreting or applying those laws, rules or regulations or policies with respect thereto
that is announced after the initial issuance of any share of Series S, there is more than an insubstantial risk that the Corporation will not be
entitled to treat the full liquidation preference amount of $25,000 per share of Series S then outstanding as “tier 1 capital” (or its equivalent) for
purposes of the capital adequacy rules of the Board of Governors of the Federal Reserve System (or, as and if applicable, the capital adequacy
rules or regulations of any successor Appropriate Federal Banking Agency) as then in effect and applicable, for so long as any share of Series S
is outstanding.
(q) “Reset Date” means February 10, 2025 and each date falling on the fifth anniversary of the preceding Reset Date, in each case,regardless of whether such day is a Business Day.
(r) “Reset Dividend Determination Date” means, in respect of any Reset Period, the day falling three Business Days prior to the beginningof such Reset Period, subject to any adjustments made by the Calculation Agent as provided for herein.
(s) “Reset Period” means the period from and including February 10, 2025 to, but excluding, the next following Reset Date and thereafter
each period from and including each Reset Date to, but excluding, the next following Reset Date.
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(t) “Voting Preferred Stock” means, with regard to any election or removal of a Preferred Stock Director (as defined in Section 7(b)below) or any other matter as to which the holders of Series S are entitled to vote as specified in Section 7 of this Certificate of Designations,any and all series of Preferred Stock (other than Series S) that rank equally with Series S either as to the payment of dividends or as to the
distribution of assets upon liquidation, dissolution or winding up of the Corporation and upon which like voting rights have been conferred andare exercisable with respect to such matter.
Section 4. Dividends.
(a) Rate. Holders of Series S shall be entitled to receive, when, as and if declared by the Board of Directors or the Committee (or another
duly authorized committee of the Board of Directors) out of funds legally available for the payment of dividends under Delaware law, non-cumulative
cash dividends per each share of Series S at the rate determined as set forth below in this Section (4) applied to the liquidation preference amount of$25,000 per share of Series S. Such dividends shall be payable in arrears (as provided below in this Section 4(a)), but only when, as and if declared by
the Board of Directors or the Committee (or another duly authorized committee of the Board of Directors), on each Dividend Payment Date. Dividends
will accrue (i) from the date of original issue to, but excluding, February 10, 2025 at a fixed rate per annum of 4.40%, and (ii) from, and including
February 10, 2025, during each Reset Period, at a rate per annum equal to the Five-Year Treasury Rate as of the most recent Reset Dividend
Determination Date plus 2.85%; provided that if any such Dividend Payment Date is a day that is not a Business Day, such dividend shall instead bepayable on the next succeeding Business Day without interest or other payment in respect of such delayed payment. Dividends on Series S shall not be
cumulative; holders of Series S shall not be entitled to receive any dividends not declared by the Board of Directors or the Committee (or another duly
authorized committee of the Board of Directors) and no interest, or sum of money in lieu of interest, shall be payable in respect of any dividend not so
declared.
Dividends on the Series S shall not be declared or set aside for payment if and to the extent such dividends would cause the Corporation to
fail to comply with the capital adequacy rules of the Board of Governors of the Federal Reserve System (or, as and if applicable, the capital adequacy
rules or regulations of any successor Appropriate Federal Banking Agency) applicable to the Corporation.
Dividends that are payable on Series S on any Dividend Payment Date will be payable to holders of record of Series S as they appear on
the stock register of the Corporation on the applicable record date, which shall be the 15th calendar day before such Dividend Payment Date or suchother record date fixed by the Board of Directors or the Committee (or another duly authorized committee of the Board of Directors) that is not morethan 60 nor less than 10 days prior to such Dividend Payment Date (each, a “Dividend Record Date”). Any such day that is a Dividend Record Dateshall be a Dividend Record Date whether or not such day is a Business Day.
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Each Dividend Period shall commence on and include a Dividend Payment Date (other than the initial Dividend Period, which shallcommence on and include the date of original issue of the Series S, provided that, for any share of Series S issued after such original issue date, theinitial Dividend Period for such shares may commence on and include such other date as the Board of Directors or the Committee (or another duly
authorized committee of the Board of Directors) shall determine and publicly disclose) and shall end on and include the calendar day next preceding thenext Dividend Payment Date. Dividends payable on the Series S in respect of any Dividend Period shall be calculated on the basis of the 30/360 (ISDA)
Day Count Convention. Dividends payable in respect of a Dividend Period shall be payable in arrears - i.e., on the first Dividend Payment Date after
such Dividend Period.
The Calculation Agent’s determination of any dividend rate, and its calculation of the amount of dividends for any Dividend Period, andany other adjustments made by the Calculation Agent pursuant to the terms hereof will be maintained on file at the Corporation’s offices, will be madeavailable to any stockholder upon request and will be final and binding in the absence of manifest error.
Holders of Series S shall not be entitled to any dividends, whether payable in cash, securities or other property, other than dividends (ifany) declared and payable on the Series S as specified in this Section 4 (subject to the other provisions of this Certificate of Designations).
(b) Priority of Dividends. So long as any share of Series S remains outstanding, no dividend shall be declared or paid on the Common
Stock or any other shares of Junior Stock (other than a dividend payable solely in Junior Stock), and no Common Stock or other Junior Stock shall bepurchased, redeemed or otherwise acquired for consideration by the Corporation, directly or indirectly (other than as a result of a reclassification of
Junior Stock for or into other Junior Stock, or the exchange or conversion of one share of Junior Stock for or into another share of Junior Stock andother than through the use of the proceeds of a substantially contemporaneous sale of Junior Stock) during a Dividend Period, unless the full dividends
for the latest completed Dividend Period on all outstanding shares of Series S have been declared and paid (or declared and a sum sufficient for thepayment thereof has been set aside). The foregoing provision shall not restrict the ability of Goldman Sachs & Co. LLC, or any other affiliate of the
Corporation, to engage in any market-making transactions in Junior Stock in the ordinary course of business.
When dividends are not paid (or declared and a sum sufficient for payment thereof set aside) on any Dividend Payment Date (or, in thecase of Parity Stock having dividend payment dates different from the Dividend Payment Dates, on a dividend payment date falling within a Dividend
Period) in full upon the Series S and any shares of Parity Stock, all dividends declared on the Series S and all such Parity Stock and payableL-6

on such Dividend Payment Date (or, in the case of Parity Stock having dividend payment dates different from the Dividend Payment Dates, on adividend payment date falling within the Dividend Period related to such Dividend Payment Date) shall be declared pro rata so that the respective
amounts of such dividends shall bear the same ratio to each other as all accrued but unpaid dividends per share on the Series S and all Parity Stockpayable on such Dividend Payment Date (or, in the case of Parity Stock having dividend payment dates different from the Dividend Payment Dates, ona dividend payment date falling within the Dividend Period related to such Dividend Payment Date) bear to each other.
Subject to the foregoing, such dividends (payable in cash, securities or other property) as may be determined by the Board of Directors or
the Committee (or another duly authorized committee of the Board of Directors) may be declared and paid on any securities, including Common Stockand other Junior Stock, from time to time out of any funds legally available for such payment, and the Series S shall not be entitled to participate in any
such dividends.
Section 5. Liquidation Rights.
(a) Voluntary or Involuntary Liquidation. In the event of any liquidation, dissolution or winding up of the affairs of the Corporation,
whether voluntary or involuntary, holders of Series S shall be entitled to receive, out of the assets of the Corporation or proceeds thereof (whether
capital or surplus) available for distribution to stockholders of the Corporation, and after satisfaction of all liabilities and obligations to creditors of the
Corporation, before any distribution of such assets or proceeds is made to or set aside for the holders of Common Stock and any other stock of the
Corporation ranking junior to the Series S as to such distribution, in full an amount equal to $25,000 per share, together with an amount equal to all
dividends (if any) that have been declared but not paid prior to the date of payment of such distribution (but without any amount in respect of dividends
that have not been declared prior to such payment date).
(b) Partial Payment. If in any distribution described in Section 5(a) above the assets of the Corporation or proceeds thereof are notsufficient to pay the Liquidation Preferences (as defined below) in full to all holders of Series S and all holders of any stock of the Corporation ranking
equally with the Series S as to such distribution, the amounts paid to the holders of Series S and to the holders of all such other stock shall be paid pro
rata in accordance with the respective aggregate Liquidation Preferences of the holders of Series S and the holders of all such other stock. In any such
distribution, the “Liquidation Preference” of any holder of stock of the Corporation shall mean the amount otherwise payable to such holder in such
distribution (assuming no limitation on the assets of the Corporation available for such distribution), including an amount equal to any declared but
unpaid dividends (and, in the case of any holder of stock other than Series S and on which dividends accrue on a cumulative basis, an amount equal toany unpaid, accrued, cumulative dividends, whether or not declared, as applicable).
(c) Residual Distributions. If the Liquidation Preference has been paid in full to all holders of Series S, the holders of other stock of the
Corporation shall be entitled to receive all remaining assets of the Corporation (or proceeds thereof) according to their respective rights and preferences.
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(d) Merger, Consolidation and Sale of Assets Not Liquidation. For purposes of this Section 5, the merger or consolidation of the
Corporation with any other corporation or other entity, including a merger or consolidation in which the holders of Series S receive cash, securities orother property for their shares, or the sale, lease or exchange (for cash, securities or other property) of all or substantially all of the assets of the
Corporation, shall not constitute a liquidation, dissolution or winding up of the Corporation.
Section 6. Redemption.
(a) Optional Redemption. The Series S is perpetual and has no maturity date. The Corporation may, at its option, redeem the shares ofSeries S at the time outstanding, upon notice given as provided in Section 6(c) below, (i) in whole or in part, on any Dividend Payment Date on or after
February 10, 2025, or (ii) in whole but not in part at any time within 90 days following a Regulatory Capital Treatment Event, in each case, at aredemption price per share equal to $25,000, plus (except as otherwise provided herein below) an amount equal to any declared and unpaid dividends
per share to but excluding the redemption date, without accumulation of undeclared dividends. The redemption price for any shares of Series S shall bepayable on the redemption date to the holder of such shares against surrender of the certificate(s) evidencing such shares to the Corporation or its agent.
Any declared but unpaid dividends payable on a redemption date that occurs subsequent to the Dividend Record Date for a Dividend Period shall not be
paid to the holder entitled to receive the redemption price on the redemption date, but rather shall be paid to the holder of record of the redeemed shareson such Dividend Record Date relating to the Dividend Payment Date as provided in Section 4 above. Notwithstanding the foregoing, the Corporation
may not redeem shares of Series S without having received the prior approval of the Appropriate Federal Banking Agency if then required under capitalrules applicable to the Corporation.
(b) No Sinking Fund. The Series S will not be subject to any mandatory redemption, sinking fund or other similar provisions. Holders ofSeries S will have no right to require redemption of any shares of Series S.
(c) Notice of Redemption. Notice of every redemption of shares of Series S shall be given by first class mail, postage prepaid, addressedto the holders of record of the shares to be redeemed at their respective last addresses appearing on the books of the Corporation. Such mailing shall be
at least 15 days and not more than 60 days before the date fixed for redemption. Any notice mailed as provided in this Subsection shall be conclusively
presumed to have been duly given, whether or not the holder receives such notice, but failure duly to give such notice by mail, or any defect in such
notice or in the mailing thereof, to any holder of shares of Series S designated for redemption shall not affect the validity of the proceedings for theredemption of any other shares of Series S. Notwithstanding the foregoing, if the Series S or any depositary shares representing
L-8interests in the Series S are issued in book-entry form through The Depository Trust Company or any other similar facility, notice of redemption may be
given to the holders of Series S at such time and in any manner permitted by such facility. Each notice given to a holder shall state: (1) the redemption
date; (2) the number of shares of Series S to be redeemed and, if less than all the shares held by such holder are to be redeemed, the number of suchshares to be redeemed from such holder; (3) the redemption price; and (4) the place or places where holders may surrender certificates evidencing sharesof Series S Preferred Stock for payment of the redemption price.
(d) Partial Redemption. In case of any redemption of only part of the shares of Series S at the time outstanding, the shares to beredeemed shall be selected either pro rata or by lot. Subject to the provisions hereof, the Corporation shall have full power and authority to prescribe theterms and conditions upon which shares of Series S shall be redeemed from time to time. If fewer than all the shares represented by any certificate areredeemed, a new certificate shall be issued representing the unredeemed shares without charge to the holder thereof.
(e) Effectiveness of Redemption. If notice of redemption has been duly given and if on or before the redemption date specified in thenotice all funds necessary for the redemption have been set aside by the Corporation, separate and apart from its other funds, in trust for the pro rata
benefit of the holders of the shares called for redemption, so as to be and continue to be available therefor, then, notwithstanding that any certificate forany share so called for redemption has not been surrendered for cancellation, on and after the redemption date dividends shall cease to accrue on all
shares so called for redemption, all shares so called for redemption shall no longer be deemed outstanding and all rights with respect to such shares shallforthwith on such redemption date cease and terminate, except only the right of the holders thereof to receive the amount payable on such redemption,
without interest. Any funds unclaimed at the end of three years from the redemption date shall, to the extent permitted by law, be released to the
Corporation, after which time the holders of the shares so called for redemption shall look only to the Corporation for payment of the redemption priceof such shares.
Section 7. Voting Rights.
(a) General. The holders of Series S shall not have any voting rights except as set forth below or as otherwise from time to time requiredby law.
(b) Right To Elect Two Directors Upon Nonpayment Events. If and whenever dividends on any shares of Series S shall not have been
declared and paid for any Dividend Periods that, in aggregate, equal at least 18 months, whether or not consecutive (a “Nonpayment Event”), thenumber of directors then constituting the Board of Directors shall automatically be increased by two and the holders of Series S, together with theholders of all outstanding shares of Voting Preferred Stock, voting together as a single class, shall be entitled to elect the two additional directors (the“Preferred Stock Directors”), provided that the Board of Directors shall at no time include more than two Preferred Stock Directors (including, forpurposes of this limitation, all directors that the holders of any series of Voting Preferred Stock are entitled to elect pursuant to like voting rights).
L-9

In the event that the holders of the Series S, and such other holders of Voting Preferred Stock, shall be entitled to vote for the election of
the Preferred Stock Directors following a Nonpayment Event, such directors shall be initially elected following such Nonpayment Event only at a
special meeting called at the request of the holders of record of at least 20% of the Series S or of any other series of Voting Preferred Stock thenoutstanding (unless such request for a special meeting is received less than 90 days before the date fixed for the next annual or special meeting of thestockholders of the Corporation, in which event such election shall be held only at such next annual or special meeting of stockholders), and at eachsubsequent annual meeting of stockholders of the Corporation. Such request to call a special meeting for the initial election of the Preferred Stock
Directors after a Nonpayment Event shall be made by written notice, signed by the requisite holders of Series S or any series of Voting Preferred Stock,and delivered to the Secretary of the Corporation in such manner as provided for in Section 9 below, or as may otherwise be required by law.
When dividends have been paid (or declared and a sum sufficient for payment thereof set aside) in full on the Series S for consecutive
Dividend Periods that, in aggregate, equal at least one year after a Nonpayment Event, then the right of the holders of Series S to elect the Preferred
Stock Directors shall cease (but subject always to revesting of such voting rights in the case of any future Nonpayment Event), and, if and when any
rights of holders of Series S and Voting Preferred Stock to elect the Preferred Stock Directors shall have ceased, the terms of office of all the Preferred
Stock Directors shall forthwith terminate and the number of directors constituting the Board of Directors shall automatically be reduced accordingly.
Any Preferred Stock Director may be removed at any time without cause by the holders of record of a majority of all of the outstanding
shares of the Series S and Voting Preferred Stock, when they have the voting rights described above (voting together as a single class). So long as a
Nonpayment Event shall continue, any vacancy in the office of a Preferred Stock Director (other than prior to the initial election of Preferred Stock
Directors after a Nonpayment Event) may be filled by the written consent of the Preferred Stock Director remaining in office, or if none remains in
office, by a vote of the holders of record of a majority of all of the outstanding shares of the Series S and Voting Preferred Stock, when they have thevoting rights described above (voting together as a single class). Any such vote of stockholders to remove, or to fill a vacancy in the office of, aPreferred Stock Director may be taken only at a special meeting of such stockholders, called as provided above for an initial election of Preferred Stock
Director after a Nonpayment Event (unless such request is received less than 90 days before the date fixed for the next annual or special meeting of thestockholders, in which event such election shall be held at such next annual or special meeting of stockholders). The Preferred Stock Directors shalleach be entitled to one vote per director on any matter that shall come before the Board of Directors for a vote. Each Preferred Stock Director elected atany special meeting of stockholders or by written consent of the other Preferred Stock Director shall hold office until the next annual meeting of thestockholders if such office shall not have previously terminated as above provided.
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(c) Other Voting Rights. So long as any shares of Series S are outstanding, in addition to any other vote or consent of stockholders
required by law or by the Certificate of Incorporation, the vote or consent of the holders of at least 662⁄3% of the shares of Series S and any Voting
Preferred Stock at the time outstanding and entitled to vote thereon, voting together as a single class, given in person or by proxy, either in writing
without a meeting or by vote at any meeting called for the purpose, shall be necessary for effecting or validating:(i) Authorization of Senior Stock. Any amendment or alteration of the Certificate of Incorporation to authorize or create, or increase theauthorized amount of, any shares of any class or series of capital stock of the Corporation ranking senior to the Series S with respect to either orboth the payment of dividends and/or the distribution of assets on any liquidation, dissolution or winding up of the Corporation;(ii) Amendment of Series S. Any amendment, alteration or repeal of any provision of the Certificate of Incorporation so as to materiallyand adversely affect the special rights, preferences, privileges or voting powers of the Series S, taken as a whole; or(iii) Share Exchanges, Reclassifications, Mergers and Consolidations. Any consummation of a binding share exchange orreclassification involving the Series S, or of a merger or consolidation of the Corporation with another corporation or other entity, unless in eachcase (x) the shares of Series S remain outstanding or, in the case of any such merger or consolidation with respect to which the Corporation is
not the surviving or resulting entity, are converted into or exchanged for preference securities of the surviving or resulting entity or its ultimate
parent, and (y) such shares remaining outstanding or such preference securities, as the case may be, have such rights, preferences, privileges andvoting powers, and limitations and restrictions thereof, taken as a whole, as are not materially less favorable to the holders thereof than therights, preferences, privileges and voting powers, and limitations and restrictions thereof, of the Series S immediately prior to suchconsummation, taken as a whole;provided, however, that for all purposes of this Section 7(c), any increase in the amount of the authorized or issued Series S or authorized Preferred
Stock, or the creation and issuance, or an increase in the authorized or issued amount, of any other series of Preferred Stock ranking equally with and/or
junior to the Series S with respect to the payment of dividends (whether such dividends are cumulative or non-cumulative) and/or the distribution ofassets upon liquidation, dissolution or winding up of the Corporation will not be deemed to adversely affect the rights, preferences, privileges or voting
powers of the Series S.
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If any amendment, alteration, repeal, share exchange, reclassification, merger or consolidation specified in this Section 7(c) would
adversely affect the Series S and one or more but not all other series of Preferred Stock, then only the Series S and such series of Preferred Stock as areadversely affected by and entitled to vote on the matter shall vote on the matter together as a single class (in lieu of all other series of Preferred Stock).
(d) Changes for Clarification. Without the consent of the holders of the Series S, so long as such action does not adversely affect therights, preferences, privileges and voting powers, and limitations and restrictions thereof, of the Series S, the Corporation may amend, alter, supplement
or repeal any terms of the Series S:(i) to cure any ambiguity, or to cure, correct or supplement any provision contained in this Certificate of Designations that may be
defective or inconsistent; or(ii) to make any provision with respect to matters or questions arising with respect to the Series S that is not inconsistent with theprovisions of this Certificate of Designations.
(e) Changes after Provision for Redemption. No vote or consent of the holders of Series S shall be required pursuant to Section 7(b), (c)or (d) above if, at or prior to the time when any such vote or consent would otherwise be required pursuant to such Section, all outstanding shares ofSeries S shall have been redeemed, or shall have been called for redemption upon proper notice and sufficient funds shall have been set aside for such
redemption, in each case pursuant to Section 6 above.
(f) Procedures for Voting and Consents. The rules and procedures for calling and conducting any meeting of the holders of Series S(including, without limitation, the fixing of a record date in connection therewith), the solicitation and use of proxies at such a meeting, the obtaining of
written consents and any other aspect or matter with regard to such a meeting or such consents shall be governed by any rules the Board of Directors or
the Committee (or another duly authorized committee of the Board of Directors), in its discretion, may adopt from time to time, which rules andprocedures shall conform to the requirements of the Certificate of Incorporation, the ByLaws, applicable law and any national securities exchange orother trading facility on which the Series S is listed or traded at the time. Whether the vote or consent of the holders of a plurality, majority or otherportion of the shares of Series S and all Voting Preferred Stock has been cast or given on any matter on which the holders of shares of Series S are
entitled to vote shall be determined by the Corporation by reference to the specified liquidation amounts of the shares voted or covered by the consent.
Section 8. Record Holders. To the fullest extent permitted by applicable law, the Corporation and the transfer agent for the Series S may
deem and treat the record holder of any share of Series S as the true and lawful owner thereof for all purposes, and neither the Corporation nor suchtransfer agent shall be affected by any notice to the contrary.
L-12

Section 9. Notices. All notices or communications in respect of Series S shall be sufficiently given if given in writing and delivered inperson or by first class mail, postage prepaid, or if given in such other manner as may be permitted in this Certificate of Designations, in the Certificate
of Incorporation or ByLaws or by applicable law.
Section 10. No Preemptive Rights. No share of Series S shall have any rights of preemption whatsoever as to any securities of the
Corporation, or any warrants, rights or options issued or granted with respect thereto, regardless of how such securities, or such warrants, rights or
options, may be designated, issued or granted.
Section 11. Other Rights. The shares of Series S shall not have any voting powers, preferences or relative, participating, optional or otherspecial rights, or qualifications, limitations or restrictions thereof, other than as set forth herein or in the Certificate of Incorporation or as provided byapplicable law.

L-13

Appendix M
CERTIFICATE OF DESIGNATIONS
OF
3.80% FIXED-RATE RESET NON-CUMULATIVE PREFERREDSTOCK, SERIES T
OF
THE GOLDMAN SACHS GROUP, INC.
THE GOLDMAN SACHS GROUP, INC., a corporation organized and existing under the General Corporation Law of the State of
Delaware (the “Corporation”), in accordance with the provisions of Sections 103 and 151 thereof, DOES HEREBY CERTIFY:
The Securities Issuance Committee (the “Committee”) of the board of directors of the Corporation (the “Board of Directors”), in
accordance with the resolutions of the Board of Directors dated October 28, 2011, the provisions of the restated certificate of incorporation and theamended and restated bylaws of the Corporation and applicable law, by unanimous written consent dated April 21, 2021, adopted the following
resolution creating a series of 27,000 shares of Preferred Stock of the Corporation designated as “3.80% Fixed-Rate Reset Non-Cumulative Preferred
Stock, Series T”.
RESOLVED, that pursuant to the authority vested in the Committee and in accordance with the resolutions of the Board of Directors
dated October 28, 2011, the provisions of the restated certificate of incorporation and the amended and restated bylaws of the Corporation andapplicable law, a series of Preferred Stock, par value $.01 per share, of the Corporation be and hereby is created, and that the designation and number ofshares of such series, and the voting and other powers, preferences and relative, participating, optional or other rights, and the qualifications, limitations
and restrictions thereof, of the shares of such series, are as follows:
Section 1. Designation. The distinctive serial designation of such series of Preferred Stock is “3.80% Fixed-Rate Reset Non-Cumulative
Preferred Stock, Series T” (“Series T”). Each share of Series T shall be identical in all respects to every other share of Series T, except as to therespective dates from which dividends thereon shall accrue, to the extent such dates may differ as permitted pursuant to Section 4(a) below.
Section 2. Number of Shares. The authorized number of shares of Series T shall be 27,000. Shares of Series T that are redeemed,purchased or otherwise acquired by the Corporation shall be cancelled and shall revert to authorized but unissued shares of Series T.

Section 3. Definitions. As used herein with respect to Series T:(a) “30/360 (ISDA) Day Count Convention” means the number of days in the Dividend Period in respect of which payment is being madedivided by 360, calculated on a formula basis as follows:[360×(Y2–Y1)]+[30×(M2–M1)]+(D2–D1)
360
where:“Y1” is the year, expressed as a number, in which the first day of the Dividend Period falls;“Y2” is the year, expressed as a number, in which the day immediately following the last day included in the Dividend Period falls;“M1” is the calendar month, expressed as a number, in which the first day of the Dividend Period falls;“M2” is the calendar month, expressed as a number, in which the day immediately following the last day included in the Dividend Period
falls;“D1” is the first calendar day, expressed as a number, of the Dividend Period, unless such number would be 31, in which case D1 will be
30; and“D2” is the calendar day, expressed as a number, immediately following the last day included in the Dividend Period, unless such number
would be 31 and D1 is greater than 29, in which case D2 will be 30.
(b) “Appropriate Federal Banking Agency” means the “appropriate federal banking agency” with respect to the Corporation as that term isdefined in Section 3(q) of the Federal Deposit Insurance Act or any successor provision.
(c) “Board of Directors” means the board of directors of the Corporation.
(d) “Business Day” means a day that is a Monday, Tuesday, Wednesday, Thursday or Friday and is not a day on which banking
institutions in New York City are generally authorized or obligated by law or executive order to close, subject to any adjustments made by the
Calculation Agent as provided for herein.
(e) “ByLaws” means the amended and restated bylaws of the Corporation, as they may be amended from time to time.
(f) “Calculation Agent” means, at any time, the person or entity appointed by the Corporation and serving as such agent at such time. The
Corporation may terminate any such appointment and may appoint a successor agent at any time and from time to time, provided that the Corporation
shall use its best efforts to ensure that there is, at all relevant times when the Series T is outstanding, a person or entity appointed and serving as suchagent. The Calculation Agent may be a person or entity affiliated with the Corporation.
M-2

(g) “Certificate of Designations” means this Certificate of Designations relating to the Series T, as it may be amended from time to time.
(h) “Certification of Incorporation” shall mean the restated certificate of incorporation of the Corporation, as it may be amended from time
to time, and shall include this Certificate of Designations.
(i) “Common Stock” means the common stock, par value $0.01 per share, of the Corporation.
(j) “Dividend Payment Date” means the 10th day of May and November of each year, commencing on November 10, 2021.
(k) “Dividend Period” is the period from and including a Dividend Payment Date to but excluding the next Dividend Payment Date,
except that the initial dividend period will commence on and include the original issue date of the Series T and will end on and exclude theNovember 10, 2021 Dividend Payment Date.
(l) “Five-Year Treasury Rate” means:•

The average of the yields on actively traded U.S. treasury securities adjusted to constant maturity, for five-year maturities, for thefive Business Days appearing under the caption “Treasury Constant Maturities” in the most recently published statistical release
designated H.15 Daily Update or any successor publication which is published by the Board of Governors of the Federal Reserve
System, as determined by the Calculation Agent in its sole discretion.

•

If no calculation is provided as described above, then the Calculation Agent, after consulting such sources as it deems comparable toany of the foregoing calculations, or any such source as it deems reasonable from which to estimate the five-year treasury rate, shalldetermine the five-year treasury rate in its sole discretion, provided that if the Calculation Agent determines there is an industryaccepted successor five-year treasury rate, then the Calculation Agent shall use such successor rate. If the Calculation Agent hasdetermined a substitute or successor base rate in accordance with the foregoing, the Calculation Agent in its sole discretion may
determine the Business Day convention, the definition of Business Day and the Reset Dividend Determination Dates to be used andany other relevant methodology for calculating such substitute or successor base rate, including any adjustment factor needed tomake such substitute or successor base rate comparable to the Five-Year Treasury Rate, in a manner that is consistent with industryaccepted practices for such substitute or successor base rate.
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The Five-Year Treasury Rate will be determined by the Calculation Agent on the Reset Dividend Determination Date.
(m) “Junior Stock” means the Common Stock and any other class or series of stock of the Corporation (other than Series T) that ranks
junior to Series T either or both as to the payment of dividends and/or as to the distribution of assets on any liquidation, dissolution or winding
up of the Corporation.
(n) “Parity Stock” means any class or series of stock of the Corporation (other than Series T) that ranks equally with Series T both in thepayment of dividends and in the distribution of assets on any liquidation, dissolution or winding up of the Corporation.
(o) “Preferred Stock” means any and all series of Preferred Stock, having a par value of $0.01 per share, of the Corporation, including theSeries T.
(p) “Regulatory Capital Treatment Event” means the good faith determination by the Corporation that, as a result of (i) any amendment to,or change in, the laws, rules or regulations of the United States or any political subdivision of or in the United States that is enacted or becomes
effective after the initial issuance of any share of Series T, (ii) any proposed change in those laws, rules or regulations that is announced or
becomes effective after the initial issuance of any share of Series T, or (iii) any official administrative decision or judicial decision oradministrative action or other official pronouncement interpreting or applying those laws, rules or regulations or policies with respect thereto
that is announced after the initial issuance of any share of Series T, there is more than an insubstantial risk that the Corporation will not be
entitled to treat the full liquidation preference amount of $25,000 per share of Series T then outstanding as “tier 1 capital” (or its equivalent) for
purposes of the capital adequacy rules of the Board of Governors of the Federal Reserve System (or, as and if applicable, the capital adequacy
rules or regulations of any successor Appropriate Federal Banking Agency) as then in effect and applicable, for so long as any share of Series T
is outstanding.
(q) “Reset Date” means May 10, 2026 and each date falling on the fifth anniversary of the preceding Reset Date, in each case, regardlessof whether such day is a Business Day.
(r) “Reset Dividend Determination Date” means, in respect of any Reset Period, the day falling three Business Days prior to the beginningof such Reset Period, subject to any adjustments made by the Calculation Agent as provided for herein.
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(s) “Reset Period” means the period from and including May 10, 2026 to, but excluding, the next following Reset Date and thereafter eachperiod from and including each Reset Date to, but excluding, the next following Reset Date.
(t) “Voting Preferred Stock” means, with regard to any election or removal of a Preferred Stock Director (as defined in Section 7(b)below) or any other matter as to which the holders of Series T are entitled to vote as specified in Section 7 of this Certificate of Designations,any and all series of Preferred Stock (other than Series T) that rank equally with Series T either as to the payment of dividends or as to the
distribution of assets upon liquidation, dissolution or winding up of the Corporation and upon which like voting rights have been conferred andare exercisable with respect to such matter.
Section 4. Dividends.
(a) Rate. Holders of Series T shall be entitled to receive, when, as and if declared by the Board of Directors or the Committee (or another
duly authorized committee of the Board of Directors) out of funds legally available for the payment of dividends under Delaware law, non-cumulative
cash dividends per each share of Series T at the rate determined as set forth below in this Section (4) applied to the liquidation preference amount of$25,000 per share of Series T. Such dividends shall be payable in arrears (as provided below in this Section 4(a)), but only when, as and if declared by
the Board of Directors or the Committee (or another duly authorized committee of the Board of Directors), on each Dividend Payment Date. Dividends
will accrue (i) from the date of original issue to, but excluding, May 10, 2026 at a fixed rate per annum of 3.80%, and (ii) from, and including May 10,
2026, during each Reset Period, at a rate per annum equal to the Five-Year Treasury Rate as of the most recent Reset Dividend Determination Date plus
2.969%; provided that if any such Dividend Payment Date is a day that is not a Business Day, such dividend shall instead be payable on the next
succeeding Business Day without interest or other payment in respect of such delayed payment. Dividends on Series T shall not be cumulative; holders
of Series T shall not be entitled to receive any dividends not declared by the Board of Directors or the Committee (or another duly authorized committeeof the Board of Directors) and no interest, or sum of money in lieu of interest, shall be payable in respect of any dividend not so declared.
Dividends on the Series T shall not be declared or set aside for payment if and to the extent such dividends would cause the Corporation to
fail to comply with the capital adequacy rules of the Board of Governors of the Federal Reserve System (or, as and if applicable, the capital adequacy
rules or regulations of any successor Appropriate Federal Banking Agency) applicable to the Corporation.
Dividends that are payable on Series T on any Dividend Payment Date will be payable to holders of record of Series T as they appear on
the stock register of the Corporation on the applicable record date, which shall be the 15th calendar day before such Dividend Payment Date or suchother record date fixed by the Board of Directors or the Committee (or another duly authorized committee of the Board of Directors) that is not morethan 60 nor less than 10 days prior to such Dividend Payment Date (each, a “Dividend Record Date”). Any such day that is a Dividend Record Dateshall be a Dividend Record Date whether or not such day is a Business Day.
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Each Dividend Period shall commence on and include a Dividend Payment Date (other than the initial Dividend Period, which shallcommence on and include the date of original issue of the Series T, provided that, for any share of Series T issued after such original issue date, theinitial Dividend Period for such shares may commence on and include such other date as the Board of Directors or the Committee (or another duly
authorized committee of the Board of Directors) shall determine and publicly disclose) and shall end on and include the calendar day next preceding thenext Dividend Payment Date. Dividends payable on the Series T in respect of any Dividend Period shall be calculated on the basis of the 30/360 (ISDA)
Day Count Convention. Dividends payable in respect of a Dividend Period shall be payable in arrears - i.e., on the first Dividend Payment Date after
such Dividend Period.
The Calculation Agent’s determination of any dividend rate, and its calculation of the amount of dividends for any Dividend Period, andany other adjustments made by the Calculation Agent pursuant to the terms hereof will be maintained on file at the Corporation’s offices, will be madeavailable to any stockholder upon request and will be final and binding in the absence of manifest error.
Holders of Series T shall not be entitled to any dividends, whether payable in cash, securities or other property, other than dividends (ifany) declared and payable on the Series T as specified in this Section 4 (subject to the other provisions of this Certificate of Designations).
(b) Priority of Dividends. So long as any share of Series T remains outstanding, no dividend shall be declared or paid on the Common
Stock or any other shares of Junior Stock (other than a dividend payable solely in Junior Stock), and no Common Stock or other Junior Stock shall bepurchased, redeemed or otherwise acquired for consideration by the Corporation, directly or indirectly (other than as a result of a reclassification of
Junior Stock for or into other Junior Stock, or the exchange or conversion of one share of Junior Stock for or into another share of Junior Stock andother than through the use of the proceeds of a substantially contemporaneous sale of Junior Stock) during a Dividend Period, unless the full dividends
for the latest completed Dividend Period on all outstanding shares of Series T have been declared and paid (or declared and a sum sufficient for thepayment thereof has been set aside). The foregoing provision shall not restrict the ability of Goldman Sachs & Co. LLC, or any other affiliate of the
Corporation, to engage in any market-making transactions in Junior Stock in the ordinary course of business.
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When dividends are not paid (or declared and a sum sufficient for payment thereof set aside) on any Dividend Payment Date (or, in thecase of Parity Stock having dividend payment dates different from the Dividend Payment Dates, on a dividend payment date falling within a Dividend
Period) in full upon the Series T and any shares of Parity Stock, all dividends declared on the Series T and all such Parity Stock and payable on such
Dividend Payment Date (or, in the case of Parity Stock having dividend payment dates different from the Dividend Payment Dates, on a dividend
payment date falling within the Dividend Period related to such Dividend Payment Date) shall be declared pro rata so that the respective amounts ofsuch dividends shall bear the same ratio to each other as all accrued but unpaid dividends per share on the Series T and all Parity Stock payable on such
Dividend Payment Date (or, in the case of Parity Stock having dividend payment dates different from the Dividend Payment Dates, on a dividend
payment date falling within the Dividend Period related to such Dividend Payment Date) bear to each other.
Subject to the foregoing, such dividends (payable in cash, securities or other property) as may be determined by the Board of Directors or
the Committee (or another duly authorized committee of the Board of Directors) may be declared and paid on any securities, including Common Stockand other Junior Stock, from time to time out of any funds legally available for such payment, and the Series T shall not be entitled to participate in any
such dividends.
Section 5. Liquidation Rights.
(a) Voluntary or Involuntary Liquidation. In the event of any liquidation, dissolution or winding up of the affairs of the Corporation,
whether voluntary or involuntary, holders of Series T shall be entitled to receive, out of the assets of the Corporation or proceeds thereof (whether
capital or surplus) available for distribution to stockholders of the Corporation, and after satisfaction of all liabilities and obligations to creditors of the
Corporation, before any distribution of such assets or proceeds is made to or set aside for the holders of Common Stock and any other stock of the
Corporation ranking junior to the Series T as to such distribution, in full an amount equal to $25,000 per share, together with an amount equal to all
dividends (if any) that have been declared but not paid prior to the date of payment of such distribution (but without any amount in respect of dividends
that have not been declared prior to such payment date).
(b) Partial Payment. If in any distribution described in Section 5(a) above the assets of the Corporation or proceeds thereof are notsufficient to pay the Liquidation Preferences (as defined below) in full to all holders of Series T and all holders of any stock of the Corporation ranking
equally with the Series T as to such distribution, the amounts paid to the holders of Series T and to the holders of all such other stock shall be paid pro
rata in accordance with the respective aggregate Liquidation Preferences of the holders of Series T and the holders of all such other stock. In any such
distribution, the “Liquidation Preference” of any holder of stock of the Corporation shall mean the amount otherwise payable to such holder in such
distribution (assuming no limitation on the assets of the Corporation available for such distribution), including an amount equal to any declared but
unpaid dividends (and, in the case of any holder of stock other than Series T and on which dividends accrue on a cumulative basis, an amount equal toany unpaid, accrued, cumulative dividends, whether or not declared, as applicable).
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(c) Residual Distributions. If the Liquidation Preference has been paid in full to all holders of Series T, the holders of other stock of the
Corporation shall be entitled to receive all remaining assets of the Corporation (or proceeds thereof) according to their respective rights and preferences.
(d) Merger, Consolidation and Sale of Assets Not Liquidation. For purposes of this Section 5, the merger or consolidation of the
Corporation with any other corporation or other entity, including a merger or consolidation in which the holders of Series T receive cash, securities orother property for their shares, or the sale, lease or exchange (for cash, securities or other property) of all or substantially all of the assets of the
Corporation, shall not constitute a liquidation, dissolution or winding up of the Corporation.
Section 6. Redemption.
(a) Optional Redemption. The Series T is perpetual and has no maturity date. The Corporation may, at its option, redeem the shares ofSeries T at the time outstanding, upon notice given as provided in Section 6(c) below, (i) in whole or in part, on any Dividend Payment Date on or after
May 10, 2026, or (ii) in whole but not in part at any time within 90 days following a Regulatory Capital Treatment Event, in each case, at a redemption
price per share equal to $25,000, plus (except as otherwise provided herein below) an amount equal to any declared and unpaid dividends per share to
but excluding the redemption date, without accumulation of undeclared dividends. The redemption price for any shares of Series T shall be payable on
the redemption date to the holder of such shares against surrender of the certificate(s) evidencing such shares to the Corporation or its agent. Any
declared but unpaid dividends payable on a redemption date that occurs subsequent to the Dividend Record Date for a Dividend Period shall not be paid
to the holder entitled to receive the redemption price on the redemption date, but rather shall be paid to the holder of record of the redeemed shares onsuch Dividend Record Date relating to the Dividend Payment Date as provided in Section 4 above. Notwithstanding the foregoing, the Corporation may
not redeem shares of Series T without having received the prior approval of the Appropriate Federal Banking Agency if then required under capital rules
applicable to the Corporation.
(b) No Sinking Fund. The Series T will not be subject to any mandatory redemption, sinking fund or other similar provisions. Holders ofSeries T will have no right to require redemption of any shares of Series T.
(c) Notice of Redemption. Notice of every redemption of shares of Series T shall be given by first class mail, postage prepaid, addressedto the holders of record of the shares to be redeemed at their respective last addresses appearing on the books of the Corporation. Such mailing shall be
at least 15 days and not more than 60 days before the date fixed for redemption. Any notice mailed as provided in this Subsection
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shall be conclusively presumed to have been duly given, whether or not the holder receives such notice, but failure duly to give such notice by mail, or
any defect in such notice or in the mailing thereof, to any holder of shares of Series T designated for redemption shall not affect the validity of theproceedings for the redemption of any other shares of Series T. Notwithstanding the foregoing, if the Series T or any depositary shares representing
interests in the Series T are issued in book-entry form through The Depository Trust Company or any other similar facility, notice of redemption may be
given to the holders of Series T at such time and in any manner permitted by such facility. Each notice given to a holder shall state: (1) the redemption
date; (2) the number of shares of Series T to be redeemed and, if less than all the shares held by such holder are to be redeemed, the number of suchshares to be redeemed from such holder; (3) the redemption price; and (4) the place or places where holders may surrender certificates evidencing sharesof Series T Preferred Stock for payment of the redemption price.
(d) Partial Redemption. In case of any redemption of only part of the shares of Series T at the time outstanding, the shares to beredeemed shall be selected either pro rata or by lot. Subject to the provisions hereof, the Corporation shall have full power and authority to prescribe theterms and conditions upon which shares of Series T shall be redeemed from time to time. If fewer than all the shares represented by any certificate areredeemed, a new certificate shall be issued representing the unredeemed shares without charge to the holder thereof.
(e) Effectiveness of Redemption. If notice of redemption has been duly given and if on or before the redemption date specified in thenotice all funds necessary for the redemption have been set aside by the Corporation, separate and apart from its other funds, in trust for the pro rata
benefit of the holders of the shares called for redemption, so as to be and continue to be available therefor, then, notwithstanding that any certificate forany share so called for redemption has not been surrendered for cancellation, on and after the redemption date dividends shall cease to accrue on all
shares so called for redemption, all shares so called for redemption shall no longer be deemed outstanding and all rights with respect to such shares shallforthwith on such redemption date cease and terminate, except only the right of the holders thereof to receive the amount payable on such redemption,
without interest. Any funds unclaimed at the end of three years from the redemption date shall, to the extent permitted by law, be released to the
Corporation, after which time the holders of the shares so called for redemption shall look only to the Corporation for payment of the redemption priceof such shares.
Section 7. Voting Rights.
(a) General. The holders of Series T shall not have any voting rights except as set forth below or as otherwise from time to time requiredby law.
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(b) Right To Elect Two Directors Upon Nonpayment Events. If and whenever dividends on any shares of Series T shall not have been
declared and paid for any Dividend Periods that, in aggregate, equal at least 18 months, whether or not consecutive (a “Nonpayment Event”), thenumber of directors then constituting the Board of Directors shall automatically be increased by two and the holders of Series T, together with theholders of all outstanding shares of Voting Preferred Stock, voting together as a single class, shall be entitled to elect the two additional directors (the“Preferred Stock Directors”), provided that the Board of Directors shall at no time include more than two Preferred Stock Directors (including, forpurposes of this limitation, all directors that the holders of any series of Voting Preferred Stock are entitled to elect pursuant to like voting rights).
In the event that the holders of the Series T, and such other holders of Voting Preferred Stock, shall be entitled to vote for the election of
the Preferred Stock Directors following a Nonpayment Event, such directors shall be initially elected following such Nonpayment Event only at a
special meeting called at the request of the holders of record of at least 20% of the Series T or of any other series of Voting Preferred Stock thenoutstanding (unless such request for a special meeting is received less than 90 days before the date fixed for the next annual or special meeting of thestockholders of the Corporation, in which event such election shall be held only at such next annual or special meeting of stockholders), and at eachsubsequent annual meeting of stockholders of the Corporation. Such request to call a special meeting for the initial election of the Preferred Stock
Directors after a Nonpayment Event shall be made by written notice, signed by the requisite holders of Series T or any series of Voting Preferred Stock,and delivered to the Secretary of the Corporation in such manner as provided for in Section 9 below, or as may otherwise be required by law.
When dividends have been paid (or declared and a sum sufficient for payment thereof set aside) in full on the Series T for consecutive
Dividend Periods that, in aggregate, equal at least one year after a Nonpayment Event, then the right of the holders of Series T to elect the Preferred
Stock Directors shall cease (but subject always to revesting of such voting rights in the case of any future Nonpayment Event), and, if and when any
rights of holders of Series T and Voting Preferred Stock to elect the Preferred Stock Directors shall have ceased, the terms of office of all the Preferred
Stock Directors shall forthwith terminate and the number of directors constituting the Board of Directors shall automatically be reduced accordingly.
Any Preferred Stock Director may be removed at any time without cause by the holders of record of a majority of all of the outstanding
shares of the Series T and Voting Preferred Stock, when they have the voting rights described above (voting together as a single class). So long as a
Nonpayment Event shall continue, any vacancy in the office of a Preferred Stock Director (other than prior to the initial election of Preferred Stock
Directors after a Nonpayment Event) may be filled by the written consent of the Preferred Stock Director remaining in office, or if none remains in
office, by a vote of the holders of record of a majority of all of the outstanding shares of the Series T and Voting Preferred Stock, when they have thevoting rights described above (voting together as a single class). Any such vote of stockholders to remove, or to fill a vacancy in the office of, aPreferred Stock Director may be taken only at a special meeting of such stockholders, called as
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provided above for an initial election of Preferred Stock Director after a Nonpayment Event (unless such request is received less than 90 days before thedate fixed for the next annual or special meeting of the stockholders, in which event such election shall be held at such next annual or special meeting ofstockholders). The Preferred Stock Directors shall each be entitled to one vote per director on any matter that shall come before the Board of Directors
for a vote. Each Preferred Stock Director elected at any special meeting of stockholders or by written consent of the other Preferred Stock Director shallhold office until the next annual meeting of the stockholders if such office shall not have previously terminated as above provided.
(c) Other Voting Rights. So long as any shares of Series T are outstanding, in addition to any other vote or consent of stockholders
required by law or by the Certificate of Incorporation, the vote or consent of the holders of at least 662⁄3% of the shares of Series T and any Voting
Preferred Stock at the time outstanding and entitled to vote thereon, voting together as a single class, given in person or by proxy, either in writing
without a meeting or by vote at any meeting called for the purpose, shall be necessary for effecting or validating:(i) Authorization of Senior Stock. Any amendment or alteration of the Certificate of Incorporation to authorize or create, or increase theauthorized amount of, any shares of any class or series of capital stock of the Corporation ranking senior to the Series T with respect to either orboth the payment of dividends and/or the distribution of assets on any liquidation, dissolution or winding up of the Corporation;(ii) Amendment of Series T. Any amendment, alteration or repeal of any provision of the Certificate of Incorporation so as to materiallyand adversely affect the special rights, preferences, privileges or voting powers of the Series T, taken as a whole; or(iii) Share Exchanges, Reclassifications, Mergers and Consolidations. Any consummation of a binding share exchange orreclassification involving the Series T, or of a merger or consolidation of the Corporation with another corporation or other entity, unless in eachcase (x) the shares of Series T remain outstanding or, in the case of any such merger or consolidation with respect to which the Corporation is
not the surviving or resulting entity, are converted into or exchanged for preference securities of the surviving or resulting entity or its ultimate
parent, and (y) such shares remaining outstanding or such preference securities, as the case may be, have such rights, preferences, privileges andvoting powers, and limitations and restrictions thereof, taken as a whole, as are not materially less favorable to the holders thereof than therights, preferences, privileges and voting powers, and limitations and restrictions thereof, of the Series T immediately prior to suchconsummation, taken as a whole;
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provided, however, that for all purposes of this Section 7(c), any increase in the amount of the authorized or issued Series T or authorized Preferred
Stock, or the creation and issuance, or an increase in the authorized or issued amount, of any other series of Preferred Stock ranking equally with and/or
junior to the Series T with respect to the payment of dividends (whether such dividends are cumulative or non-cumulative) and/or the distribution ofassets upon liquidation, dissolution or winding up of the Corporation will not be deemed to adversely affect the rights, preferences, privileges or voting
powers of the Series T.
If any amendment, alteration, repeal, share exchange, reclassification, merger or consolidation specified in this Section 7(c) would
adversely affect the Series T and one or more but not all other series of Preferred Stock, then only the Series T and such series of Preferred Stock as areadversely affected by and entitled to vote on the matter shall vote on the matter together as a single class (in lieu of all other series of Preferred Stock).
(d) Changes for Clarification. Without the consent of the holders of the Series T, so long as such action does not adversely affect therights, preferences, privileges and voting powers, and limitations and restrictions thereof, of the Series T, the Corporation may amend, alter, supplement
or repeal any terms of the Series T:(i) to cure any ambiguity, or to cure, correct or supplement any provision contained in this Certificate of Designations that may be
defective or inconsistent; or(ii) to make any provision with respect to matters or questions arising with respect to the Series T that is not inconsistent with theprovisions of this Certificate of Designations.
(e) Changes after Provision for Redemption. No vote or consent of the holders of Series T shall be required pursuant to Section 7(b), (c)or (d) above if, at or prior to the time when any such vote or consent would otherwise be required pursuant to such Section, all outstanding shares ofSeries T shall have been redeemed, or shall have been called for redemption upon proper notice and sufficient funds shall have been set aside for such
redemption, in each case pursuant to Section 6 above.
(f) Procedures for Voting and Consents. The rules and procedures for calling and conducting any meeting of the holders of Series T(including, without limitation, the fixing of a record date in connection therewith), the solicitation and use of proxies at such a meeting, the obtaining of
written consents and any other aspect or matter with regard to such a meeting or such consents shall be governed by any rules the Board of Directors or
the Committee (or another duly authorized committee of the Board of Directors), in its discretion, may adopt from time to time, which rules andprocedures shall conform to the requirements of the Certificate of Incorporation, the ByLaws, applicable law and any national securities exchange orother trading facility on which the Series T is listed or traded at the time. Whether the vote or consent of the holders of a plurality, majority or otherportion of the shares of Series T and all Voting Preferred Stock has been cast or given on any matter on which the holders of shares of Series T are
entitled to vote shall be determined by the Corporation by reference to the specified liquidation amounts of the shares voted or covered by the consent.
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Section 8. Record Holders. To the fullest extent permitted by applicable law, the Corporation and the transfer agent for the Series T may
deem and treat the record holder of any share of Series T as the true and lawful owner thereof for all purposes, and neither the Corporation nor suchtransfer agent shall be affected by any notice to the contrary.
Section 9. Notices. All notices or communications in respect of Series T shall be sufficiently given if given in writing and delivered inperson or by first class mail, postage prepaid, or if given in such other manner as may be permitted in this Certificate of Designations, in the Certificate
of Incorporation or ByLaws or by applicable law.
Section 10. No Preemptive Rights. No share of Series T shall have any rights of preemption whatsoever as to any securities of the
Corporation, or any warrants, rights or options issued or granted with respect thereto, regardless of how such securities, or such warrants, rights or
options, may be designated, issued or granted.
Section 11. Other Rights. The shares of Series T shall not have any voting powers, preferences or relative, participating, optional or otherspecial rights, or qualifications, limitations or restrictions thereof, other than as set forth herein or in the Certificate of Incorporation or as provided byapplicable law.

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Appendix N

CERTIFICATE OF DESIGNATIONS
OF
3.65% FIXED-RATE RESET NON-CUMULATIVE PREFERREDSTOCK, SERIES U
OF
THE GOLDMAN SACHS GROUP, INC.
THE GOLDMAN SACHS GROUP, INC., a corporation organized and existing under the General Corporation Law of the State of
Delaware (the “Corporation”), in accordance with the provisions of Sections 103 and 151 thereof, DOES HEREBY CERTIFY:
The Securities Issuance Committee (the “Committee”) of the board of directors of the Corporation (the “Board of Directors”), in
accordance with the resolutions of the Board of Directors dated October 28, 2011, the provisions of the restated certificate of incorporation and theamended and restated bylaws of the Corporation and applicable law, by unanimous written consent dated July 23, 2021, adopted the following
resolution creating a series of 30,000 shares of Preferred Stock of the Corporation designated as “3.65% Fixed-Rate Reset Non-Cumulative Preferred
Stock, Series U”.
RESOLVED, that pursuant to the authority vested in the Committee and in accordance with the resolutions of the Board of Directors
dated October 28, 2011, the provisions of the restated certificate of incorporation and the amended and restated bylaws of the Corporation andapplicable law, a series of Preferred Stock, par value $.01 per share, of the Corporation be and hereby is created, and that the designation and number ofshares of such series, and the voting and other powers, preferences and relative, participating, optional or other rights, and the qualifications, limitations
and restrictions thereof, of the shares of such series, are as follows:
Section 1. Designation. The distinctive serial designation of such series of Preferred Stock is “3.65% Fixed-Rate Reset Non-Cumulative
Preferred Stock, Series U” (“Series U”). Each share of Series U shall be identical in all respects to every other share of Series U, except as to therespective dates from which dividends thereon shall accrue, to the extent such dates may differ as permitted pursuant to Section 4(a) below.
Section 2. Number of Shares. The authorized number of shares of Series U shall be 30,000. Shares of Series U that are redeemed,purchased or otherwise acquired by the Corporation shall be cancelled and shall revert to authorized but unissued shares of Series U.

Section 3. Definitions. As used herein with respect to Series U:(u) “30/360 (ISDA) Day Count Convention” means the number of days in the Dividend Period in respect of which payment is being madedivided by 360, calculated on a formula basis as follows:[360×(Y2–Y1)]+[30×(M2–M1)]+(D2–D1)
360
where:“Y1” is the year, expressed as a number, in which the first day of the Dividend Period falls;“Y2” is the year, expressed as a number, in which the day immediately following the last day included in the Dividend Period falls;“M1” is the calendar month, expressed as a number, in which the first day of the Dividend Period falls;“M2” is the calendar month, expressed as a number, in which the day immediately following the last day included in the Dividend Period
falls;“D1” is the first calendar day, expressed as a number, of the Dividend Period, unless such number would be 31, in which case D1 will be
30; and“D2” is the calendar day, expressed as a number, immediately following the last day included in the Dividend Period, unless such number
would be 31 and D1 is greater than 29, in which case D2 will be 30.
(v) “Appropriate Federal Banking Agency” means the “appropriate federal banking agency” with respect to the Corporation as that term isdefined in Section 3(q) of the Federal Deposit Insurance Act or any successor provision.
(w) “Board of Directors” means the board of directors of the Corporation.
(x) “Business Day” means a day that is a Monday, Tuesday, Wednesday, Thursday or Friday and is not a day on which banking
institutions in New York City are generally authorized or obligated by law or executive order to close, subject to any adjustments made by the
Calculation Agent as provided for herein.
(y) “ByLaws” means the amended and restated bylaws of the Corporation, as they may be amended from time to time.
(z) “Calculation Agent” means, at any time, the person or entity appointed by the Corporation and serving as such agent at such time. The
Corporation may terminate any such appointment and may appoint a successor agent at any time and from time to time, provided that the
Corporation shall use its best efforts to ensure that there is, at all relevant times when the Series U is outstanding, a person or entity appointed
and serving as such agent. The Calculation Agent may be a person or entity affiliated with the Corporation.
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(aa) “Certificate of Designations” means this Certificate of Designations relating to the Series U, as it may be amended from time to time.
(bb) “Certification of Incorporation” shall mean the restated certificate of incorporation of the Corporation, as it may be amended fromtime to time, and shall include this Certificate of Designations.
(cc) “Common Stock” means the common stock, par value $0.01 per share, of the Corporation.
(dd) “Dividend Payment Date” means the 10th day of February and August of each year, commencing on February 10, 2022.
(ee) “Dividend Period” is the period from and including a Dividend Payment Date to but excluding the next Dividend Payment Date,
except that the initial dividend period will commence on and include the original issue date of the Series U and will end on and exclude the
February 10, 2022 Dividend Payment Date.
(ff) “Five-Year Treasury Rate” means:•

The average of the yields on actively traded U.S. treasury securities adjusted to constant maturity, for five-year maturities, for thefive Business Days appearing under the caption “Treasury Constant Maturities” in the most recently published statistical release
designated H.15 Daily Update or any successor publication which is published by the Board of Governors of the Federal Reserve
System, as determined by the Calculation Agent in its sole discretion.

•

If no calculation is provided as described above, then the Calculation Agent, after consulting such sources as it deems comparable toany of the foregoing calculations, or any such source as it deems reasonable from which to estimate the five-year treasury rate, shalldetermine the five-year treasury rate in its sole discretion, provided that if the Calculation Agent determines there is an industryaccepted successor five-year treasury rate, then the Calculation Agent shall use such successor rate. If the Calculation Agent hasdetermined a substitute or successor base rate in accordance with the foregoing, the Calculation Agent in its sole discretion may
determine the Business Day convention, the definition of Business Day and the Reset Dividend Determination Dates to be used andany other relevant methodology for calculating such substitute or successor base rate, including any adjustment factor needed tomake such substitute or successor base rate comparable to the Five-Year Treasury Rate, in a manner that is consistent with industryaccepted practices for such substitute or successor base rate.
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The Five-Year Treasury Rate will be determined by the Calculation Agent on the Reset Dividend Determination Date.
(gg) “Junior Stock” means the Common Stock and any other class or series of stock of the Corporation (other than Series U) that ranks
junior to Series U either or both as to the payment of dividends and/or as to the distribution of assets on any liquidation, dissolution or winding
up of the Corporation.
(hh) “Parity Stock” means any class or series of stock of the Corporation (other than Series U) that ranks equally with Series U both in thepayment of dividends and in the distribution of assets on any liquidation, dissolution or winding up of the Corporation.
(ii) “Preferred Stock” means any and all series of Preferred Stock, having a par value of $0.01 per share, of the Corporation, including theSeries U.
(jj) “Regulatory Capital Treatment Event” means the good faith determination by the Corporation that, as a result of (i) any amendment to,or change in, the laws, rules or regulations of the United States or any political subdivision of or in the United States that is enacted or becomes
effective after the initial issuance of any share of Series U, (ii) any proposed change in those laws, rules or regulations that is announced or
becomes effective after the initial issuance of any share of Series U, or (iii) any official administrative decision or judicial decision oradministrative action or other official pronouncement interpreting or applying those laws, rules or regulations or policies with respect thereto
that is announced after the initial issuance of any share of Series U, there is more than an insubstantial risk that the Corporation will not be
entitled to treat the full liquidation preference amount of $25,000 per share of Series U then outstanding as “tier 1 capital” (or its equivalent) for
purposes of the capital adequacy rules of the Board of Governors of the Federal Reserve System (or, as and if applicable, the capital adequacy
rules or regulations of any successor Appropriate Federal Banking Agency) as then in effect and applicable, for so long as any share of Series U
is outstanding.
(kk) “Reset Date” means August 10, 2026 and each date falling on the fifth anniversary of the preceding Reset Date, in each case,regardless of whether such day is a Business Day.
(ll) “Reset Dividend Determination Date” means, in respect of any Reset Period, the day falling three Business Days prior to the beginningof such Reset Period, subject to any adjustments made by the Calculation Agent as provided for herein.
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(mm) “Reset Period” means the period from and including August 10, 2026 to, but excluding, the next following Reset Date and thereafter
each period from and including each Reset Date to, but excluding, the next following Reset Date.
(nn) “Voting Preferred Stock” means, with regard to any election or removal of a Preferred Stock Director (as defined in Section 7(b)below) or any other matter as to which the holders of Series U are entitled to vote as specified in Section 7 of this Certificate of Designations,any and all series of Preferred Stock (other than Series U) that rank equally with Series U either as to the payment of dividends or as to the
distribution of assets upon liquidation, dissolution or winding up of the Corporation and upon which like voting rights have been conferred andare exercisable with respect to such matter.
Section 4. Dividends.
(a) Rate. Holders of Series U shall be entitled to receive, when, as and if declared by the Board of Directors or the Committee (or another
duly authorized committee of the Board of Directors) out of funds legally available for the payment of dividends under Delaware law, non-cumulative
cash dividends per each share of Series U at the rate determined as set forth below in this Section (4) applied to the liquidation preference amount of$25,000 per share of Series U. Such dividends shall be payable in arrears (as provided below in this Section 4(a)), but only when, as and if declared by
the Board of Directors or the Committee (or another duly authorized committee of the Board of Directors), on each Dividend Payment Date. Dividends
will accrue (i) from the date of original issue to, but excluding, August 10, 2026 at a fixed rate per annum of 3.65%, and (ii) from, and including
August 10, 2026, during each Reset Period, at a rate per annum equal to the Five-Year Treasury Rate as of the most recent Reset Dividend
Determination Date plus 2.915%; provided that if any such Dividend Payment Date is a day that is not a Business Day, such dividend shall instead bepayable on the next succeeding Business Day without interest or other payment in respect of such delayed payment. Dividends on Series U shall not be
cumulative; holders of Series U shall not be entitled to receive any dividends not declared by the Board of Directors or the Committee (or another duly
authorized committee of the Board of Directors) and no interest, or sum of money in lieu of interest, shall be payable in respect of any dividend not so
declared.
Dividends on the Series U shall not be declared or set aside for payment if and to the extent such dividends would cause the Corporation to
fail to comply with the capital adequacy rules of the Board of Governors of the Federal Reserve System (or, as and if applicable, the capital adequacy
rules or regulations of any successor Appropriate Federal Banking Agency) applicable to the Corporation.
Dividends that are payable on Series U on any Dividend Payment Date will be payable to holders of record of Series U as they appear on
the stock register of the Corporation on the applicable record date, which shall be the 15th calendar day before such Dividend Payment Date or suchother record date fixed by the Board of Directors or the
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Committee (or another duly authorized committee of the Board of Directors) that is not more than 60 nor less than 10 days prior to such Dividend
Payment Date (each, a “Dividend Record Date”). Any such day that is a Dividend Record Date shall be a Dividend Record Date whether or not suchday is a Business Day.
Each Dividend Period shall commence on and include a Dividend Payment Date (other than the initial Dividend Period, which shallcommence on and include the date of original issue of the Series U, provided that, for any share of Series U issued after such original issue date, theinitial Dividend Period for such shares may commence on and include such other date as the Board of Directors or the Committee (or another duly
authorized committee of the Board of Directors) shall determine and publicly disclose) and shall end on and include the calendar day next preceding thenext Dividend Payment Date. Dividends payable on the Series U in respect of any Dividend Period shall be calculated on the basis of the 30/360 (ISDA)
Day Count Convention. Dividends payable in respect of a Dividend Period shall be payable in arrears - i.e., on the first Dividend Payment Date after
such Dividend Period.
The Calculation Agent’s determination of any dividend rate, and its calculation of the amount of dividends for any Dividend Period, andany other adjustments made by the Calculation Agent pursuant to the terms hereof will be maintained on file at the Corporation’s offices, will be madeavailable to any stockholder upon request and will be final and binding in the absence of manifest error.
Holders of Series U shall not be entitled to any dividends, whether payable in cash, securities or other property, other than dividends (ifany) declared and payable on the Series U as specified in this Section 4 (subject to the other provisions of this Certificate of Designations).
(b) Priority of Dividends. So long as any share of Series U remains outstanding, no dividend shall be declared or paid on the Common
Stock or any other shares of Junior Stock (other than a dividend payable solely in Junior Stock), and no Common Stock or other Junior Stock shall bepurchased, redeemed or otherwise acquired for consideration by the Corporation, directly or indirectly (other than as a result of a reclassification of
Junior Stock for or into other Junior Stock, or the exchange or conversion of one share of Junior Stock for or into another share of Junior Stock andother than through the use of the proceeds of a substantially contemporaneous sale of Junior Stock) during a Dividend Period, unless the full dividends
for the latest completed Dividend Period on all outstanding shares of Series U have been declared and paid (or declared and a sum sufficient for thepayment thereof has been set aside). The foregoing provision shall not restrict the ability of Goldman Sachs & Co. LLC, or any other affiliate of the
Corporation, to engage in any market-making transactions in Junior Stock in the ordinary course of business.
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When dividends are not paid (or declared and a sum sufficient for payment thereof set aside) on any Dividend Payment Date (or, in thecase of Parity Stock having dividend payment dates different from the Dividend Payment Dates, on a dividend payment date falling within a Dividend
Period) in full upon the Series U and any shares of Parity Stock, all dividends declared on the Series U and all such Parity Stock and payable on such
Dividend Payment Date (or, in the case of Parity Stock having dividend payment dates different from the Dividend Payment Dates, on a dividend
payment date falling within the Dividend Period related to such Dividend Payment Date) shall be declared pro rata so that the respective amounts ofsuch dividends shall bear the same ratio to each other as all accrued but unpaid dividends per share on the Series U and all Parity Stock payable on such
Dividend Payment Date (or, in the case of Parity Stock having dividend payment dates different from the Dividend Payment Dates, on a dividend
payment date falling within the Dividend Period related to such Dividend Payment Date) bear to each other.
Subject to the foregoing, such dividends (payable in cash, securities or other property) as may be determined by the Board of Directors or
the Committee (or another duly authorized committee of the Board of Directors) may be declared and paid on any securities, including Common Stockand other Junior Stock, from time to time out of any funds legally available for such payment, and the Series U shall not be entitled to participate in any
such dividends.
Section 5. Liquidation Rights.
(a) Voluntary or Involuntary Liquidation. In the event of any liquidation, dissolution or winding up of the affairs of the Corporation,
whether voluntary or involuntary, holders of Series U shall be entitled to receive, out of the assets of the Corporation or proceeds thereof (whether
capital or surplus) available for distribution to stockholders of the Corporation, and after satisfaction of all liabilities and obligations to creditors of the
Corporation, before any distribution of such assets or proceeds is made to or set aside for the holders of Common Stock and any other stock of the
Corporation ranking junior to the Series U as to such distribution, in full an amount equal to $25,000 per share, together with an amount equal to all
dividends (if any) that have been declared but not paid prior to the date of payment of such distribution (but without any amount in respect of dividends
that have not been declared prior to such payment date).
(b) Partial Payment. If in any distribution described in Section 5(a) above the assets of the Corporation or proceeds thereof are notsufficient to pay the Liquidation Preferences (as defined below) in full to all holders of Series U and all holders of any stock of the Corporation ranking
equally with the Series U as to such distribution, the amounts paid to the holders of Series U and to the holders of all such other stock shall be paid pro
rata in accordance with the respective aggregate Liquidation Preferences of the holders of Series U and the holders of all such other stock. In any such
distribution, the “Liquidation Preference” of any holder of stock of the Corporation shall mean the amount otherwise payable to such holder in such
distribution (assuming no limitation on the assets of the Corporation available for such distribution), including an amount equal to any declared but
unpaid dividends (and, in the case of any holder of stock other than Series U and on which dividends accrue on a cumulative basis, an amount equal toany unpaid, accrued, cumulative dividends, whether or not declared, as applicable).
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(c) Residual Distributions. If the Liquidation Preference has been paid in full to all holders of Series U, the holders of other stock of the
Corporation shall be entitled to receive all remaining assets of the Corporation (or proceeds thereof) according to their respective rights and preferences.
(d) Merger, Consolidation and Sale of Assets Not Liquidation. For purposes of this Section 5, the merger or consolidation of the
Corporation with any other corporation or other entity, including a merger or consolidation in which the holders of Series U receive cash, securities orother property for their shares, or the sale, lease or exchange (for cash, securities or other property) of all or substantially all of the assets of the
Corporation, shall not constitute a liquidation, dissolution or winding up of the Corporation.
Section 6. Redemption.
(a) Optional Redemption. The Series U is perpetual and has no maturity date. The Corporation may, at its option, redeem the shares ofSeries U at the time outstanding, upon notice given as provided in Section 6(c) below, (i) in whole or in part, on any Dividend Payment Date on or after
August 10, 2026, or (ii) in whole but not in part at any time within 90 days following a Regulatory Capital Treatment Event, in each case, at aredemption price per share equal to $25,000, plus (except as otherwise provided herein below) an amount equal to any declared and unpaid dividends
per share to but excluding the redemption date, without accumulation of undeclared dividends. The redemption price for any shares of Series U shall bepayable on the redemption date to the holder of such shares against surrender of the certificate(s) evidencing such shares to the Corporation or its agent.
Any declared but unpaid dividends payable on a redemption date that occurs subsequent to the Dividend Record Date for a Dividend Period shall not be
paid to the holder entitled to receive the redemption price on the redemption date, but rather shall be paid to the holder of record of the redeemed shareson such Dividend Record Date relating to the Dividend Payment Date as provided in Section 4 above. Notwithstanding the foregoing, the Corporation
may not redeem shares of Series U without having received the prior approval of the Appropriate Federal Banking Agency if then required under capitalrules applicable to the Corporation.
(b) No Sinking Fund. The Series U will not be subject to any mandatory redemption, sinking fund or other similar provisions. Holders ofSeries U will have no right to require redemption of any shares of Series U.
(c) Notice of Redemption. Notice of every redemption of shares of Series U shall be given by first class mail, postage prepaid, addressedto the holders of record of the shares to be redeemed at their respective last addresses appearing on the books of the Corporation. Such mailing shall be
at least 15 days and not more than 60 days before the date fixed for redemption. Any notice mailed as provided in this Subsection shall be conclusively
presumed to have been duly given, whether or not the holder receives such notice, but failure duly to give such notice by mail, or any defect in such
notice or in the mailing thereof, to any holder of shares of Series U designated for redemption shall not
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affect the validity of the proceedings for the redemption of any other shares of Series U. Notwithstanding the foregoing, if the Series U or any depositaryshares representing interests in the Series U are issued in book-entry form through The Depository Trust Company or any other similar facility, notice ofredemption may be given to the holders of Series U at such time and in any manner permitted by such facility. Each notice given to a holder shall state:(1) the redemption date; (2) the number of shares of Series U to be redeemed and, if less than all the shares held by such holder are to be redeemed, thenumber of such shares to be redeemed from such holder; (3) the redemption price; and (4) the place or places where holders may surrender certificatesevidencing shares of Series U Preferred Stock for payment of the redemption price.
(d) Partial Redemption. In case of any redemption of only part of the shares of Series U at the time outstanding, the shares to beredeemed shall be selected either pro rata or by lot. Subject to the provisions hereof, the Corporation shall have full power and authority to prescribe theterms and conditions upon which shares of Series U shall be redeemed from time to time. If fewer than all the shares represented by any certificate areredeemed, a new certificate shall be issued representing the unredeemed shares without charge to the holder thereof.
(e) Effectiveness of Redemption. If notice of redemption has been duly given and if on or before the redemption date specified in thenotice all funds necessary for the redemption have been set aside by the Corporation, separate and apart from its other funds, in trust for the pro rata
benefit of the holders of the shares called for redemption, so as to be and continue to be available therefor, then, notwithstanding that any certificate forany share so called for redemption has not been surrendered for cancellation, on and after the redemption date dividends shall cease to accrue on all
shares so called for redemption, all shares so called for redemption shall no longer be deemed outstanding and all rights with respect to such shares shallforthwith on such redemption date cease and terminate, except only the right of the holders thereof to receive the amount payable on such redemption,
without interest. Any funds unclaimed at the end of three years from the redemption date shall, to the extent permitted by law, be released to the
Corporation, after which time the holders of the shares so called for redemption shall look only to the Corporation for payment of the redemption priceof such shares.
Section 7. Voting Rights.
(a) General. The holders of Series U shall not have any voting rights except as set forth below or as otherwise from time to time requiredby law.
(b) Right To Elect Two Directors Upon Nonpayment Events. If and whenever dividends on any shares of Series U shall not have been
declared and paid for any Dividend Periods that, in aggregate, equal at least 18 months, whether or not consecutive (a “Nonpayment Event”), thenumber of directors then constituting the Board of Directors shall automatically be increased by two and the holders of Series U, together with theholders of all outstanding shares of Voting Preferred Stock, voting together as a single class, shall be entitled to elect the two additional directors (the“Preferred Stock Directors”), provided that the Board of Directors shall at no time include more than two Preferred Stock Directors (including, forpurposes of this limitation, all directors that the holders of any series of Voting Preferred Stock are entitled to elect pursuant to like voting rights).
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In the event that the holders of the Series U, and such other holders of Voting Preferred Stock, shall be entitled to vote for the election of
the Preferred Stock Directors following a Nonpayment Event, such directors shall be initially elected following such Nonpayment Event only at a
special meeting called at the request of the holders of record of at least 20% of the Series U or of any other series of Voting Preferred Stock thenoutstanding (unless such request for a special meeting is received less than 90 days before the date fixed for the next annual or special meeting of thestockholders of the Corporation, in which event such election shall be held only at such next annual or special meeting of stockholders), and at eachsubsequent annual meeting of stockholders of the Corporation. Such request to call a special meeting for the initial election of the Preferred Stock
Directors after a Nonpayment Event shall be made by written notice, signed by the requisite holders of Series U or any series of Voting Preferred Stock,and delivered to the Secretary of the Corporation in such manner as provided for in Section 9 below, or as may otherwise be required by law.
When dividends have been paid (or declared and a sum sufficient for payment thereof set aside) in full on the Series U for consecutive
Dividend Periods that, in aggregate, equal at least one year after a Nonpayment Event, then the right of the holders of Series U to elect the Preferred
Stock Directors shall cease (but subject always to revesting of such voting rights in the case of any future Nonpayment Event), and, if and when any
rights of holders of Series U and Voting Preferred Stock to elect the Preferred Stock Directors shall have ceased, the terms of office of all the Preferred
Stock Directors shall forthwith terminate and the number of directors constituting the Board of Directors shall automatically be reduced accordingly.
Any Preferred Stock Director may be removed at any time without cause by the holders of record of a majority of all of the outstanding
shares of the Series U and Voting Preferred Stock, when they have the voting rights described above (voting together as a single class). So long as a
Nonpayment Event shall continue, any vacancy in the office of a Preferred Stock Director (other than prior to the initial election of Preferred Stock
Directors after a Nonpayment Event) may be filled by the written consent of the Preferred Stock Director remaining in office, or if none remains in
office, by a vote of the holders of record of a majority of all of the outstanding shares of the Series U and Voting Preferred Stock, when they have thevoting rights described above (voting together as a single class). Any such vote of stockholders to remove, or to fill a vacancy in the office of, aPreferred Stock Director may be taken only at a special meeting of such stockholders, called as provided above for an initial election of Preferred Stock
Director after a Nonpayment Event (unless such request is received less than 90 days before the date fixed for the next annual or special meeting of thestockholders, in which event such election shall be held at such next annual or special meeting of stockholders). The Preferred Stock Directors shalleach be entitled to one vote per director on any matter that shall come before the Board of Directors for a vote. Each Preferred Stock Director elected atany special meeting of stockholders or by written consent of the other Preferred Stock Director shall hold office until the next annual meeting of thestockholders if such office shall not have previously terminated as above provided.
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(c) Other Voting Rights. So long as any shares of Series U are outstanding, in addition to any other vote or consent of stockholders
required by law or by the Certificate of Incorporation, the vote or consent of the holders of at least 662⁄3% of the shares of Series U and any Voting
Preferred Stock at the time outstanding and entitled to vote thereon, voting together as a single class, given in person or by proxy, either in writing
without a meeting or by vote at any meeting called for the purpose, shall be necessary for effecting or validating:(i) Authorization of Senior Stock. Any amendment or alteration of the Certificate of Incorporation to authorize or create, or increase theauthorized amount of, any shares of any class or series of capital stock of the Corporation ranking senior to the Series U with respect to either orboth the payment of dividends and/or the distribution of assets on any liquidation, dissolution or winding up of the Corporation;(ii) Amendment of Series U. Any amendment, alteration or repeal of any provision of the Certificate of Incorporation so as to materiallyand adversely affect the special rights, preferences, privileges or voting powers of the Series U, taken as a whole; or(iii) Share Exchanges, Reclassifications, Mergers and Consolidations. Any consummation of a binding share exchange orreclassification involving the Series U, or of a merger or consolidation of the Corporation with another corporation or other entity, unless in eachcase (x) the shares of Series U remain outstanding or, in the case of any such merger or consolidation with respect to which the Corporation is
not the surviving or resulting entity, are converted into or exchanged for preference securities of the surviving or resulting entity or its ultimate
parent, and (y) such shares remaining outstanding or such preference securities, as the case may be, have such rights, preferences, privileges andvoting powers, and limitations and restrictions thereof, taken as a whole, as are not materially less favorable to the holders thereof than therights, preferences, privileges and voting powers, and limitations and restrictions thereof, of the Series U immediately prior to suchconsummation, taken as a whole;provided, however, that for all purposes of this Section 7(c), any increase in the amount of the authorized or issued Series U or authorized Preferred
Stock, or the creation and issuance, or an increase in the authorized or issued amount, of any other series of Preferred Stock ranking equally with and/or
junior to the Series U with respect to the payment of dividends (whether such dividends are cumulative or non-cumulative) and/or the distribution ofassets upon liquidation, dissolution or winding up of the Corporation will not be deemed to adversely affect the rights, preferences, privileges or voting
powers of the Series U.
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If any amendment, alteration, repeal, share exchange, reclassification, merger or consolidation specified in this Section 7(c) would
adversely affect the Series U and one or more but not all other series of Preferred Stock, then only the Series U and such series of Preferred Stock as areadversely affected by and entitled to vote on the matter shall vote on the matter together as a single class (in lieu of all other series of Preferred Stock).
(d) Changes for Clarification. Without the consent of the holders of the Series U, so long as such action does not adversely affect therights, preferences, privileges and voting powers, and limitations and restrictions thereof, of the Series U, the Corporation may amend, alter, supplement
or repeal any terms of the Series U:(i) to cure any ambiguity, or to cure, correct or supplement any provision contained in this Certificate of Designations that may be
defective or inconsistent; or(ii) to make any provision with respect to matters or questions arising with respect to the Series U that is not inconsistent with theprovisions of this Certificate of Designations.
(e) Changes after Provision for Redemption. No vote or consent of the holders of Series U shall be required pursuant to Section 7(b), (c)or (d) above if, at or prior to the time when any such vote or consent would otherwise be required pursuant to such Section, all outstanding shares ofSeries U shall have been redeemed, or shall have been called for redemption upon proper notice and sufficient funds shall have been set aside for such
redemption, in each case pursuant to Section 6 above.
(f) Procedures for Voting and Consents. The rules and procedures for calling and conducting any meeting of the holders of Series U(including, without limitation, the fixing of a record date in connection therewith), the solicitation and use of proxies at such a meeting, the obtaining of
written consents and any other aspect or matter with regard to such a meeting or such consents shall be governed by any rules the Board of Directors or
the Committee (or another duly authorized committee of the Board of Directors), in its discretion, may adopt from time to time, which rules andprocedures shall conform to the requirements of the Certificate of Incorporation, the ByLaws, applicable law and any national securities exchange orother trading facility on which the Series U is listed or traded at the time. Whether the vote or consent of the holders of a plurality, majority or otherportion of the shares of Series U and all Voting Preferred Stock has been cast or given on any matter on which the holders of shares of Series U areentitled to vote shall be determined by the Corporation by reference to the specified liquidation amounts of the shares voted or covered by the consent.
Section 8. Record Holders. To the fullest extent permitted by applicable law, the Corporation and the transfer agent for the Series U may
deem and treat the record holder of any share of Series U as the true and lawful owner thereof for all purposes, and neither the Corporation nor suchtransfer agent shall be affected by any notice to the contrary.
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Section 9. Notices. All notices or communications in respect of Series U shall be sufficiently given if given in writing and delivered inperson or by first class mail, postage prepaid, or if given in such other manner as may be permitted in this Certificate of Designations, in the Certificate
of Incorporation or ByLaws or by applicable law.
Section 10. No Preemptive Rights. No share of Series U shall have any rights of preemption whatsoever as to any securities of the
Corporation, or any warrants, rights or options issued or granted with respect thereto, regardless of how such securities, or such warrants, rights or
options, may be designated, issued or granted.
Section 11. Other Rights. The shares of Series U shall not have any voting powers, preferences or relative, participating, optional or otherspecial rights, or qualifications, limitations or restrictions thereof, other than as set forth herein or in the Certificate of Incorporation or as provided byapplicable law.
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EXHIBIT 15.1
August 3, 2021
Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549
Re:

The Goldman Sachs Group, Inc.
Registration Statements on Form S-8(No. 333-80839)(No. 333-42068)(No. 333-106430)(No. 333-120802)(No. 333-235973)
Registration Statements on Form S-3(No. 333-253421)

Commissioners:
We are aware that our report dated August 3, 2021 on our review of the consolidated balance sheet of The Goldman Sachs
Group, Inc. and its subsidiaries (the Company) as of June 30, 2021, and the related consolidated statements of earnings,
comprehensive income and changes in shareholders’ equity for the three and six months ended June 30, 2021 and 2020, andthe consolidated statements of cash flows for the six months ended June 30, 2021 and 2020 included in the Company’squarterly report on Form 10-Q for the quarter ended June 30, 2021 is incorporated by reference in the registration statements
referred to above. Pursuant to Rule 436(c) under the Securities Act of 1933 (the Act), such report should not be considered apart of such registration statements, and is not a report within the meaning of Sections 7 and 11 of the Act.
Very truly yours,/s/ PricewaterhouseCoopers LLP

EXHIBIT 31.1
CERTIFICATIONS
I, David M. Solomon, certify that:1.

I have reviewed this Quarterly Report on Form 10-Q for the quarter ended June 30, 2021 of The Goldman Sachs
Group, Inc.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state amaterial fact necessary to make the statements made, in light of the circumstances under which such statements were
made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly
present in all material respects the financial condition, results of operations and cash flows of the registrant as of, andfor, the periods presented in this report;

4.

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial
reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

5.

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period inwhich this report is being prepared;b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to
be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with generally accepted
accounting principles;c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report ourconclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period coveredby this report based on such evaluation; andd)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred
during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control
over financial reporting; andThe registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control
over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (orpersons performing the equivalent functions):a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize andreport financial information; andb)

Any fraud, whether or not material, that involves management or other employees who have a significant role in
the registrant’s internal control over financial reporting.

Date: August 3, 2021/s/David M. Solomon

Name:
Title:David M. Solomon
Chief Executive Officer

CERTIFICATIONS
I, Stephen M. Scherr, certify that:1.

I have reviewed this Quarterly Report on Form 10-Q for the quarter ended June 30, 2021 of The Goldman Sachs
Group, Inc.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state amaterial fact necessary to make the statements made, in light of the circumstances under which such statements were
made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly
present in all material respects the financial condition, results of operations and cash flows of the registrant as of, andfor, the periods presented in this report;

4.

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial
reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

5.

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period inwhich this report is being prepared;b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to
be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with generally accepted
accounting principles;c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report ourconclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period coveredby this report based on such evaluation; andd)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred
during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control
over financial reporting; andThe registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control
over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (orpersons performing the equivalent functions):a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize andreport financial information; andb)

Any fraud, whether or not material, that involves management or other employees who have a significant role in
the registrant’s internal control over financial reporting.

Date: August 3, 2021/s/

Stephen M. Scherr

Name: Stephen M. Scherr
Title:
Chief Financial Officer

EXHIBIT 32.1
Certification
Pursuant to 18 U.S.C. § 1350, the undersigned officer of The Goldman Sachs Group, Inc. (the Company) hereby certifies that
the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2021 (the Report) fully complies with therequirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and that the information
contained in the Report fairly presents, in all material respects, the financial condition and results of operations of theCompany.
Date: August 3, 2021/s/David M. Solomon

Name:
Title:David M. Solomon
Chief Executive Officer

The foregoing certification is being furnished solely pursuant to 18 U.S.C. § 1350 and is not being filed as part of the Reportor as a separate disclosure document.

Certification
Pursuant to 18 U.S.C. § 1350, the undersigned officer of The Goldman Sachs Group, Inc. (the Company) hereby certifies that
the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2021 (the Report) fully complies with therequirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and that the information
contained in the Report fairly presents, in all material respects, the financial condition and results of operations of theCompany.
Date: August 3, 2021/s/

Stephen M. Scherr

Name: Stephen M. Scherr
Title:
Chief Financial Officer
The foregoing certification is being furnished solely pursuant to 18 U.S.C. § 1350 and is not being filed as part of the Reportor as a separate disclosure document.