The Goldman Sachs Group, Inc. (GS)
Q4 2009 Earnings Call Transcript
January 21, 2010 11:00 a.m. ET

Executives

Dane Holmes – Director of Investor Relations
David A. Viniar – Executive Vice President & Chief Financial Officer

Analysts

Guy Moszkowski - Bank of America/Merrill Lynch
Glenn Schorr - UBS
Howard Chen - Credit Suisse
Roger Freeman - Barclays Capital
Meredith Whitney - Meredith Whitney Advisory Group LLC
Chris Kotowski - Oppenheimer & Co.
Michael Mayo – CLSA
Jeff Harte – Sandler O’Neill & Partners, L.P.
Michael Carrier - Deutsche Bank
David Trone – Macquarie Securities
Michael Hecht - JMP Securities
Steve Stelmach - FBR Capital Markets
Robert Lee – Keefe, Bruyette & Woods
Matthew Burnell - Wells Fargo Securities
Ron Mandel – GIC

Presentation

Dane Holmes

Good morning. This is Dane Holmes, Director of Investor Relations at Goldman Sachs. Welcome to our fourth quarter earnings conference call.

Today''s call may include forward-looking statements. These statements represent the firm''s belief regarding future events that by their nature are uncertain and outside of the firm''s control. The firm''s actual results and financial condition may differ, possibly materially, from what is indicated in those forward-looking statements.

For a discussion of some of the risks and factors that affect the firm''s future results, please see the description of risk factors in our current Annual Report on Form 10-K for the fiscal year ended November 2008. I would also direct you to read the forward-looking disclaimers in our quarterly earnings release, particularly as it relates to our investment banking transaction backlog, and you should also read the information on the calculation of non-GAAP financial measures that is posted on the Investor Relations portion of our website at www.gs.com.

This audio cast is copyrighted material of The Goldman Sachs Group, Inc. and may not be duplicated, reproduced, or rebroadcast without our consent.

Our Chief Financial Officer, David Viniar, will now review the firm''s results. David.

David A. Viniar

Thanks Dane. I’d like to thank all of you for listening today. I’ll give an overview of our fourth quarter and full-year results and then take your questions.

Full year net revenues for 2009 were $45.2 billion. Net earnings were $13.4 billion and earnings per diluted share were $22.13. These results generated a return on common equity of 22.5%. Over the past year book value per share was up 23% to $117.48.

For the fourth quarter net revenues were $9.6 billion, net earnings were $4.9 billion and earnings per diluted share were $8.20. At the end of 2008 governments around the world implemented significant liquidity, capital and funding initiatives to help stabilize the capital markets.

These actions were critical to reversing the market panic that was pervasive in the fourth quarter of 2008 and the early part of 2009. In 2009, the equity and credit markets were generally characterized by increasing asset prices, lower volatility and improved liquidity.

During 2009, the S&P 500 increased by 23%, the LCVX improved by over 700 basis points, and the VIX declined by nearly 50%. As would be expected the improving market environment had a positive impact on client activity.

While several operating dynamics significantly improved in 2009, the broader macro operating environment remained challenged with negative global GDP growth, rising unemployment, and limited credit availability.

In addition, certain asset classes like commercial real estate continued to deteriorate during the year. Since economic growth continues to be the single most significant driver of our firm’s opportunity set, improvement in these macroeconomic factors will be important to our ongoing performance.