8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):

January 16, 2019

THE GOLDMAN SACHS GROUP, INC.

(Exact name of registrant as specified in its charter)

Delaware	No. 001-14965	No. 13-4019460
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

200 West Street New York, New York	10282
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (212) 902-1000

N/A

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 under the Securities Act (17 CFR 230.405) or Rule 12b-2 under the Exchange Act (17 CFR 240.12b-2).

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.  ☐

TABLE OF CONTENTS

Exhibit 99.1: PRESS RELEASE

Exhibit 99.2: PRESENTATION

Item 2.02 Results of Operations and Financial Condition.

On January 16, 2019, The Goldman Sachs Group, Inc. (Group Inc. and, together with its consolidated subsidiaries, the firm) reported its earnings for the fourth quarter and year ended December 31, 2018. A copy of Group Inc.’s press release containing this information is attached as Exhibit 99.1 to this Report on Form 8-K and is incorporated herein by reference.

Item 7.01 Regulation FD Disclosure.

On January 16, 2019, at 9:30 a.m. (ET), the firm will hold a conference call to discuss the firm’s financial results, outlook and related matters. A copy of the presentation for the conference call is attached as Exhibit 99.2 to this Report on Form 8-K.

Item 8.01 Other Events.

On December 17, 2018, the Attorney General of Malaysia issued a press statement that (i) criminal charges in Malaysia had been filed against Goldman Sachs International, as the arranger of three debt offerings of 1Malaysia Development Berhad (1MDB), for alleged disclosure deficiencies in the offering documents relating to, among other things, the use of proceeds, (ii) Goldman Sachs (Asia) LLC, Goldman Sachs (Singapore) PTE, Tim Leissner (a former participating managing director) and others had been criminally charged in Malaysia, and indicated that Ng Chong Hwa (a former managing director) would be charged shortly, and (iii) prosecutors in Malaysia will seek criminal fines against the accused in excess of $2.7 billion plus the $600 million of fees received in connection with the debt offerings.

In November and December 2018, a shareholder books and records demand was made and purported securities law class action lawsuits and other litigation (including by International Petroleum Investment Company, the guarantor of certain of the debt) were initiated or threatened related to 1MDB.

See   the   disclosures   concerning    1MDB   related   matters   in    our   Quarterly   Report   on    Form 10-Q   for   the    period   ended September 30, 2018.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

99.1 Press release of Group Inc. dated January  16, 2019 containing financial information for its fourth quarter and year ended December 31, 2018.

The quotation on page 1 of Exhibit 99.1 and the information under the caption “Annual Highlights” on the following page (Excluded Sections) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (Exchange Act) or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of Group Inc. under the Securities Act of 1933 or the Exchange Act. The information included in Exhibit 99.1, other than in the Excluded Sections, shall be deemed “filed” for purposes of the Exchange Act.

99.2 Presentation of Group Inc. dated January  16, 2019, for the conference call on January 16, 2019.

Exhibit 99.2 is being furnished pursuant to Item 7.01 of Form 8-K and the information included therein shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of Group Inc. under the Securities Act of 1933 or the Exchange Act.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	THE GOLDMAN SACHS GROUP, INC.
			(Registrant)
Date: January 16, 2019	By:	/s/ Stephen M. Scherr
		Name:  Stephen M. Scherr
		Title:    Chief Financial Officer

EX-99.1

Exhibit 99.1

Full Year and

Fourth Quarter

2018 Earnings

Results

    Media Relations: Jake Siewert 212-902-5400

    Investor Relations: Heather Kennedy Miner 212-902-0300    

The Goldman Sachs Group, Inc.      

200 West Street | New York, NY 10282      

Full Year and Fourth Quarter 2018 Earnings Results

Goldman Sachs Reports Earnings Per Common Share of $25.27 for 2018

Fourth Quarter Earnings Per Common Share was $6.04

“We are pleased with our performance for the year, achieving stronger top and bottom line results despite a challenging     backdrop for our market-making businesses in the second half. For the year, we delivered double-digit revenue growth,     the highest earnings per share in the firm’s history and the strongest return on equity since 2009. We are confident that     we are well positioned to support an even larger universe of clients, continue to diversify our revenue mix and deliver     strong returns for our shareholders in the years ahead.”

- David M. Solomon, Chairman and Chief Executive Officer    

NEW YORK, January 16, 2019 – The Goldman Sachs Group, Inc. (NYSE: GS) today reported net revenues (1) of $36.62 billion and net earnings of $10.46 billion for the year ended December 31, 2018. Net revenues (1) were $8.08 billion and net earnings were $2.54 billion for the fourth quarter of 2018. Diluted earnings per common share (EPS) was $25.27 (2) for the year ended December 31, 2018 compared with $9.01 (2) for the year ended December 31, 2017, and was $6.04 (2) for the fourth quarter of 2018 compared with a diluted loss per common share of $5.51 (2) for the fourth quarter of 2017 and diluted earnings per common share of $6.28 for the third quarter of 2018. Return    on average common shareholders’ equity (ROE) (3) was 13.3%  (2) for 2018  and annualized  ROE was  12.1% for  the fourth quarter of 2018. Return on average tangible common shareholders’ equity (ROTE) (3) was 14.1% (2) for 2018 and annualized ROTE was 12.8% for the fourth quarter of 2018.	NET REVENUES
	2018	$36.62 billion
	4Q18	$8.08 billion
	NET EARNINGS
	2018	$10.46 billion
	4Q18	$2.54 billion
	EPS
	2018	$25.27
	4Q18	$6.04
	ROE
	2018	13.3%
	4Q18	12.1%
	ROTE
	2018	14.1%
	4Q18	12.8%

1      

Goldman Sachs Reports

Full Year and Fourth Quarter 2018 Earnings Results

Annual Highlights

◾ Net revenues of $36.62 billion and pre-tax earnings of $12.48 billion were both 12% higher compared with 2017 and the highest since 2010.

◾ The firm ranked #1 in worldwide announced and completed mergers and acquisitions, equity and equity-related offerings and common stock offerings for the year. ⁽⁴⁾

◾ Investment Banking produced net revenues of $7.86 billion, reflecting the highest net revenues in Financial Advisory since 2007 and a strong performance in Underwriting.

◾ Equities generated net revenues of $7.60 billion, 15% higher than 2017 and the highest since 2015.

◾ Net revenues in Investing & Lending were $8.25 billion, which included record net interest income in debt securities and loans of approximately $2.70 billion.

◾ Investment Management produced record net revenues of $7.02 billion, including record management and other fees. Assets under supervision ⁽⁵⁾ of $1.54 trillion included net inflows of $89 billion during the year, with net inflows of $37 billion in long-term assets under supervision.

◾ Diluted EPS of $25.27 was a record and ROE ⁽³⁾ of 13.3% was the highest since 2009.

◾ Book value per common share increased 14.6% during the year to $207.36 and tangible book value per common share ⁽³⁾ increased 15.3% to $196.64.

◾ The Standardized and Basel III Advanced common equity tier 1 ratios ⁽⁵⁾ increased 140 basis points and 240 basis points, respectively, compared with the fully phased-in ratios at the end of 2017 ⁽⁶⁾ to 13.3% ⁽⁷⁾ and 13.1% ⁽⁷⁾.

Full Year Net Revenue Mix by Segment

2      

Goldman Sachs Reports

Full Year and Fourth Quarter 2018 Earnings Results

Net Revenues

Full Year Net revenues (1) were $36.62 billion for 2018, 12% higher than 2017, reflecting higher net revenues across all segments. Fourth Quarter Net revenues (1) were $8.08 billion for the fourth quarter of 2018, essentially unchangedcompared withthefourthquarterof 2017and8% lower than the third quarter of 2018.
	2018 NET REVENUES
	$36.62 billion
	4Q18 NET REVENUES
	$8.08 billion

Investment Banking

Full Year Net revenues in Investment Banking were $7.86 billion for 2018, 7% higher than 2017. Net revenues in Financial Advisory were $3.51 billion, 10% higher than 2017, reflecting an increase in industry-wide completed mergers and acquisitions volumes. Net revenues in Underwriting were $4.36 billion, 4% higher than 2017, due to significantly higher net revenues in equity underwriting, driven by initial public offerings, partially offset by lower net revenues in debt underwriting, reflecting a decline in leveraged finance activity. The firm’s investment banking transaction backlog (5) increased compared with the end of 2017.
	2018 INVESTMENT BANKING
	$7.86 billion
	Financial Advisory	$3.51 billion
	Underwriting	$4.36 billion
Fourth Quarter NetrevenuesinInvestmentBankingwere $2.04 billion for the fourth quarter of 2018, 5% lower than the fourth quarter of 2017 and 3% higher than the third quarter of 2018. NetrevenuesinFinancialAdvisorywere$1.20 billion,56%higherthan the fourth quarter of 2017, reflecting an increase in industry-wide completed mergers and acquisitions volumes. Net revenues in Underwriting were $843 million, 38% lower than the fourth quarterof2017,duetosignificantlylowernetrevenuesinbothdebt underwriting, reflecting a decline in leveraged finance activity, and equity underwriting, reflecting a decline in secondary offerings. The firm’s investment banking transaction backlog (5) decreased compared with the end of the third quarter of 2018.
	4Q18 INVESTMENT BANKING
	$2.04 billion
	Financial Advisory	$1.20 billion
	Underwriting	$843 million

3      

Goldman Sachs Reports

Full Year and Fourth Quarter 2018 Earnings Results

Institutional Client Services

Full Year Net revenues in Institutional Client Services were $13.48 billion for 2018, 13% higher than 2017. Net revenues in Fixed Income, Currency and Commodities (FICC) Client Execution were $5.88 billion, 11% higher than 2017, reflecting significantly higher net revenues in commodities and currencies. Net revenues in interest rate productsandmortgageswereslightlylower,whilenet revenuesincreditproducts were essentially unchanged. During 2018, FICC Client Execution operated in an environment characterized by higher client activity and generally less challenging market conditions compared with 2017. Net revenues in Equities were $7.60 billion, 15% higher than 2017, primarily due to significantly higher net revenues in equities client execution, reflecting significantly higher net revenues in both cash products and derivatives. In addition, commissions and fees were higher, reflecting higher market volumes, and net revenues in securities services were slightly higher. During 2018, Equities operated in an environment characterized by generally higher volatility and improved client activity compared with 2017.
	2018 INSTITUTIONAL          CLIENT SERVICES
	$13.48 billion
	FICC	$5.88 billion
	Equities	$7.60 billion
Fourth Quarter Net revenues in Institutional Client Services were $2.43 billion for the fourth quarter of 2018, 2% higher than the fourth quarter of 2017 and 22% lower than the third quarter of 2018. Net revenues in FICC Client Execution were $822 million, 18% lower than the fourth quarter of 2017, reflecting significantly lower net revenues in credit products and lower net revenues in interest rate products. Net revenues in commodities, currencies and mortgages were essentially unchanged. During the quarter, FICC Client Execution operated in an environment characterized by challenging market conditions, including wider credit spreads, compared with the third quarter of 2018. Net revenues in Equities were $1.60 billion, 17% higher than the fourth quarter of 2017, primarily due to significantly higher net revenues in equities client execution compared with a challenging prior year period. This increase reflected significantly higher net revenues in cash products, while net revenues in derivatives were essentially unchanged. Commissions and fees were higher, reflecting higher market volumes, and net revenues in securities services were slightly lower. During the quarter, Equities operated in an environment generally characterized by higher volatility but less favorable market conditions compared with the third quarter of 2018.
	4Q18 INSTITUTIONAL           CLIENT SERVICES
	$2.43 billion
	FICC	$822 million
	Equities	$1.60 billion

4      

Goldman Sachs Reports

Full Year and Fourth Quarter 2018 Earnings Results

Investing & Lending

Full Year Net revenues in Investing & Lending were $8.25 billion for 2018, 14% higher than 2017. Net revenues in equity securities were $4.46 billion, 3% lower than 2017, reflecting net losses from investments in public equities compared with net gains in the prior year, partially offset by significantly higher net gains from investments in private equities, driven by company-specific events, including sales, and corporate performance. Net revenues in debt securities and loans were $3.80 billion, 43% higher than 2017, primarily driven by significantly higher net interest income. 2018 included net interest income of approximately $2.70 billion compared with approximately $1.80 billion in 2017.
	2018 INVESTING & LENDING
	$8.25 billion
	Equity Securities	$4.46 billion
	Debt Securities   and Loans	$3.80 billion
Fourth Quarter Net revenues in Investing & Lending were $1.91 billion for the fourth quarter of 2018, 2% lower than the fourth quarter of 2017 and 6% lower than the third quarter of 2018. Net revenues in equity securities were $994 million, 18% lower than the fourth quarter of 2017, reflecting net losses from investments in public equities, as global equity prices decreased during the quarter. Net revenues in equity securities for the fourth quarter of 2018 included $1.26 billion of net gains from investments in private equities, driven by company-specific events, including sales, and corporate performance. Net revenues in debt securities and loans were $912 million, 23% higher than the fourth quarter of 2017, driven by significantly higher net interest income. The fourth quarter of 2018 included net interest income of approximately $800 million compared with approximately $500 million in the fourth quarter of 2017.
	4Q18 INVESTING & LENDING
	$1.91 billion
	Equity Securities	$994 million
	Debt Securities   and Loans	$912 million

Investment Management

Full Year Net revenues in Investment Management were $7.02 billion for 2018, 13% higher than 2017. The increase in net revenues compared with 2017 was primarily due to significantly higher incentive fees, as a result of harvesting. Management and other fees were also higher, reflecting higher average assets under supervisionandtheimpactoftherecentlyadoptedrevenuerecognition standard(8),partially offset by shifts in the mix of client assets and strategies. In addition, transaction revenues were higher. During the year, total assets under supervision (5) increased $48 billion to $1.54 trillion. Long-term assets under supervision decreased $4 billion, including net marketdepreciationof$41billion,primarilyinequityassets,largelyoffsetbynet inflows of $37 billion, primarily in fixed income and equity assets. Liquidity products increased $52 billion.
	2018 INVESTMENT MANAGEMENT
	$7.02 billion
	Management and   Other Fees	$5.44 billion
	Incentive Fees Transaction   Revenues	$830 million   $754 million

5      

Goldman Sachs Reports

Full Year and Fourth Quarter 2018 Earnings Results

Investment Management

Fourth Quarter Net revenues in Investment Management were $1.70 billion for the fourth quarter of 2018, 2% higher than the fourth quarter of 2017 and unchanged compared with the third quarter of 2018. The increase compared with the fourth quarter of 2017 reflected higher incentive fees and transaction revenues. Management and other fees were essentially unchanged compared with the fourth quarter of 2017. During the quarter, total assets under supervision (5) decreased $8 billion to $1.54 trillion. Long-term assets under supervision decreased $47 billion, including net market depreciation of $50 billion, primarily in equity assets, partially offset by net inflows of $3 billion. Liquidity products increased $39 billion.
	4Q18 INVESTMENT MANAGEMENT
	$1.70 billion
	Management and   Other Fees	$1.37 billion
	Incentive Fees	$153 million
	Transaction   Revenues	$186 million

Provision for Credit Losses

Full Year Provision for credit losses (1) was $674 million for 2018, compared with $657 million for 2017, as higher provision for credit losses primarily related to consumerloangrowthin2018werepartiallyoffsetbyanimpairmentofasecured loan in 2017. Fourth Quarter Provision for credit losses (1) was $222 million for the fourth quarter of 2018, compared with $290 million for the fourth quarter of 2017 and $174 million for the third quarter of 2018. The decrease compared with the fourth quarter of 2017 reflected an impairment of a secured loan in the fourth quarter of 2017, partially offset by higher provision for credit losses primarily related to consumer loan growth in the fourth quarter of 2018.
	2018 PROVISION FOR CREDIT LOSSES
	$674 million
	4Q18 PROVISION FOR CREDIT LOSSES
	$222 million

6      

Goldman Sachs Reports

Full Year and Fourth Quarter 2018 Earnings Results

Operating Expenses

Full Year Operating expenses were $23.46 billion for 2018, 12% higher than 2017. The firm’s efficiency ratio (9) for 2018 was 64.1%, compared with 64.0% for 2017. The increase in operating expenses compared with 2017 was primarily due to higher compensation and benefits expenses, reflecting improved operating performance, and significantly higher net provisions for litigation and regulatory proceedings. Brokerage, clearing, exchange and distribution fees were also higher, reflecting an increase in activity levels, and technology expenses increased, reflecting higher expenses related to computing services. In addition, expenses related to consolidated investments and the firm’s digital lending and deposit platform increased, with the increases primarily in depreciation and amortization expenses, market development expenses and other expenses. The increase compared with 2017 also included $297 million related to the recently adopted revenue recognition standard (8). Net provisions for litigation and regulatory proceedings for 2018 were $844 million compared with $188 million for 2017. Headcount (1) increased 9% during 2018, reflecting an increase in technology professionals and investments in new business initiatives.
	2018 OPERATING EXPENSES
	$23.46 billion
	2018 EFFICIENCY RATIO
	64.1%

Fourth Quarter Operating expenses were $5.15 billion for the fourth quarter of 2018, 9% higher than the fourth quarter of 2017 and 8% lower than the third quarter of 2018. The increase in operating expenses compared with the fourth quarter of 2017 primarily reflected significantly higher net provisions for litigation and regulatory proceedings. The increase compared with the fourth quarter of 2017 also included $79 million related to the recently adopted revenue recognition standard (8) . These increases were partially offset by lower compensation and benefits expenses. Net provisions for litigation and regulatory proceedings for the fourth quarter of 2018 were $516 million compared with $9 million for the fourth quarter of 2017. The fourth quarter of 2018 included a $132 million charitable contribution to Goldman Sachs Gives. Compensation was reduced to fund this charitable contribution to Goldman Sachs Gives.
	4Q18 OPERATING EXPENSES
	$5.15 billion

Provision for Taxes

The effective income tax rate for 2018 was 16.2%, down from 19.0% for the first nine months of 2018 and down from 61.5% for full year 2017, as 2017 included the estimated impact of Tax Legislation (2), which increased the effective income tax rate by 39.5 percentage points. The finalization of this impact of Tax Legislation (2) reduced the effective income tax rate for 2018 by 3.9 percentage points.
	2018 EFFECTIVE TAX RATE
	16.2%

7      

Goldman Sachs Reports

Full Year and Fourth Quarter 2018 Earnings Results

Capital

◾  Total shareholders’ equity was $90.19 billion (common shareholders’ equity of $78.98 billion  and  preferred  stock  of  $11.20  billion)  as  of December 31, 2018. ◾  The Standardized common equity tier 1 ratio (5) was 13.3% (7) as of December 31, 2018, compared with 11.9% (6) as of December 31, 2017 and 13.1% as of September 30, 2018. ◾  The Basel III Advanced common equity tier 1 ratio (5) was 13.1% (7) as of December 31, 2018, compared with 10.7% (6) as of December 31, 2017 and 12.4% as of September 30, 2018. ◾  The supplementary leverage ratio (5) was 6.2% (7) as of December 31, 2018, compared with 5.8% as of December 31, 2017 and 6.0% as of September 30, 2018. ◾  On January 15, 2019, the Board of Directors of The Goldman Sachs Group, Inc. declared a dividend of $0.80 per common share to be paid on March 28, 2019 to common shareholders of record on February 28, 2019. ◾  During the year, the firm repurchased 13.9 million shares of common stock at an average cost per share of $236.22, for a total cost of $3.29 billion. This included5.6millionsharesrepurchasedduringthefourthquarteratanaverage cost per share of $222.30, for a total cost of $1.25 billion. (5) ◾  Book value per common share was $207.36 and tangible book value per commonshare (3) was$196.64,bothbasedonbasicshares (10)of380.9million as of December 31, 2018.	TOTAL SHAREHOLDERS’  EQUITY
	$90.19 billion
	STANDARDIZED RATIO
	13.3%
	ADVANCED RATIO
	13.1%
	SUPPLEMENTARY  LEVERAGE RATIO
	6.2%
	DECLARED QUARTERLY  DIVIDEND PER COMMON SHARE
	$0.80
	COMMON SHARE REPURCHASES
	13.9 million shares  for $3.29 billion in 2018
	BOOK VALUE  PER COMMON SHARE
	$207.36

Other Balance Sheet and Liquidity Metrics

◾  Total assets were $933 billion (7) as of December 31, 2018, compared with $917 billion as of December 31, 2017 and $957 billion as of September 30, 2018. ◾  Global core liquid assets (5) averaged $233 billion (7) for 2018, compared with an average of $219 billion for 2017. Global core liquid assets averaged $229 billion (7) for the fourth quarter of 2018, compared with an average of $238 billion for the third quarter of 2018.	TOTAL ASSETS
	$933 billion
	AVERAGE GCLA
	$233 billion for 2018

8        

Goldman Sachs Reports

Full Year and Fourth Quarter 2018 Earnings Results

The Goldman Sachs Group, Inc. is a leading global investment banking, securities and investment management firm that provides a wide range of financial services to a substantial and diversified client base that includes corporations, financial institutions, governments and individuals. Founded in 1869, the firm is headquartered in New York and maintains offices in all major financial centers around the world.

Cautionary Note Regarding Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are not historical facts, but instead represent only the firm’s beliefs regarding future events, many of which, by their nature, are inherently uncertain and outside of the firm’s control. It is possible that the firm’s actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements. For a discussion of some of the risks and important factors that could affect the firm’s future results and financial condition, see “Risk Factors” in Part I, Item 1A of the firm’s Annual Report on Form 10-K for the year ended December 31, 2017.

Information regarding the firm’s capital ratios, risk-weighted assets, supplementary leverage ratio, total assets and balance sheet data, global core liquid assets and VaR consists of preliminary estimates. These estimates are forward-looking statements and are subject to change, possibly materially, as the firm completes its financial statements.

Statements about the firm’s investment banking transaction backlog also may constitute forward-looking statements. Such statements are subject to the risk that the terms of these transactions may be modified or that they may not be completed at all; therefore, the net revenues, if any, that the firm actually earns from these transactions may differ, possibly materially, from those currently expected. Important factors that could result in a modification of the terms of a transaction or a transaction not being completed include, in the case of underwriting transactions, a decline or continued weakness in general economic conditions, outbreak of hostilities, volatility in the securities markets generally or an adverse development with respect to the issuer of the securities and, in the case of 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 a discussion of other important factors that could adversely affect the firm’s investment banking transactions, see “Risk Factors” in Part I, Item 1A of the firm’s Annual Report on Form 10-K for the year ended December 31, 2017.

Conference Call

A conference call to discuss the firm’s financial results, outlook and related matters will be held at 9:30 am (ET). The call will be open to the public. Members of the public who would like to listen to the conference call should dial 1-888-281-7154 (in the U.S.) or 1-706-679-5627 (outside the U.S.). The number should be dialed at least 10 minutes prior to the start of the conference call. The conference call will also be accessible as an audio webcast through the Investor Relations section of the firm’s website, www.goldmansachs.com/investor-relations. There is no charge to access the call. For those unable to listen to the live broadcast, a replay will be available on the firm’s website or by dialing 1-855-859-2056 (in the U.S.) or 1-404-537-3406 (outside the U.S.) passcode number 64774224 beginning approximately three hours after the event. Please direct any questions regarding obtaining access to the conference call to Goldman Sachs Investor Relations, via e-mail, at gs-investor-relations@gs.com.

9      

Goldman Sachs Reports:

Full Year and Fourth Quarter 2018 Earnings Results

The Goldman Sachs Group, Inc. and Subsidiaries

Segment Net Revenues (unaudited)

$ in millions

	YEAR ENDED				% CHANGE FROM
	DECEMBER 31, 2018		DECEMBER 31, 2017		DECEMBER 31, 2017
INVESTMENT BANKING
Financial Advisory		$            3,507		$            3,188		10 %
Equity underwriting		1,646		1,243		32
Debt underwriting		2,709		2,940		(8)
Total Underwriting		4,355		4,183		4
Total Investment Banking		7,862		7,371		7
INSTITUTIONAL CLIENT SERVICES
FICC Client Execution		5,882		5,299		11
Equities client execution		2,835		2,046		39
Commissions and fees		3,055		2,920		5
Securities services		1,710		1,637		4
Total Equities		7,600		6,603		15
Total Institutional Client Services		13,482		11,902		13
INVESTING & LENDING
Equity securities		4,455		4,578		(3)
Debt securities and loans		3,795		2,660		43
Total Investing & Lending		8,250		7,238		14
INVESTMENT MANAGEMENT
Management and other fees		5,438		5,144		6
Incentive fees		830		417		99
Transaction revenues		754		658		15
Total Investment Management		7,022		6,219		13
Total net revenues (1)		$          36,616		$          32,730		12
Geographic Net Revenues (unaudited) (5) $ in millions
	YEAR ENDED
	DECEMBER 31, 2018		DECEMBER 31, 2017
Americas		$          22,339		$          19,737
EMEA		9,244		8,168
Asia		5,033		4,825
Total net revenues (1)		$          36,616		$          32,730
Americas		61%		60%
EMEA		25%		25%
Asia		14%		15%
Total		100%		100%

10

Goldman Sachs Reports:

Full Year and Fourth Quarter 2018 Earnings Results

The Goldman Sachs Group, Inc. and Subsidiaries

Segment Net Revenues (unaudited)

$ in millions

	THREE MONTHS ENDED						% CHANGE FROM
	DECEMBER 31, 2018		SEPTEMBER 30, 2018		DECEMBER 31, 2017		SEPTEMBER 30, 2018		DECEMBER 31, 2017
INVESTMENT BANKING
Financial Advisory		$            1,201		$               916		$               772		31 %		56 %
Equity underwriting		315		432		460		(27)		(32)
Debt underwriting		528		632		909		(16)		(42)
Total Underwriting		843		1,064		1,369		(21)		(38)
Total Investment Banking		2,044		1,980		2,141		3		(5)
INSTITUTIONAL CLIENT SERVICES
FICC Client Execution		822		1,307		1,003		(37)		(18)
Equities client execution		401		681		223		(41)		80
Commissions and fees		801		674		737		19		9
Securities services		402		439		409		(8)		(2)
Total Equities		1,604		1,794		1,369		(11)		17
Total Institutional Client Services		2,426		3,101		2,372		(22)		2
INVESTING & LENDING
Equity securities		994		1,111		1,209		(11)		(18)
Debt securities and loans		912		924		739		(1)		23
Total Investing & Lending		1,906		2,035		1,948		(6)		(2)
INVESTMENT MANAGEMENT
Management and other fees		1,365		1,382		1,369		(1)		–
Incentive fees		153		148		129		3		19
Transaction revenues		186		174		165		7		13
Total Investment Management		1,704		1,704		1,663		–		2
Total net revenues (1)		$            8,080		$            8,820		$            8,124		(8)		(1)
Geographic Net Revenues (unaudited) (5) $ in millions
	THREE MONTHS ENDED
	DECEMBER 31, 2018		SEPTEMBER 30, 2018		DECEMBER 31, 2017
Americas		$            5,178		$            5,351		$            4,921
EMEA		1,766		2,254		1,945
Asia		1,136		1,215		1,258
Total net revenues (1)		$            8,080		$            8,820		$            8,124
Americas		64%		61%		61%
EMEA		22%		25%		24%
Asia		14%		14%		15%
Total		100%		100%		100%

11

Goldman Sachs Reports:

Full Year and Fourth Quarter 2018 Earnings Results

The Goldman Sachs Group, Inc. and Subsidiaries

Consolidated Statements of Earnings (unaudited) ⁽¹⁾

In millions, except per share amounts

	YEAR ENDED				% CHANGE FROM
	DECEMBER 31, 2018		DECEMBER 31, 2017		DECEMBER 31,   2017
REVENUES
Investment banking		$            7,862		$            7,371		7 %
Investment management		6,514		5,803		12
Commissions and fees		3,199		3,051		5
Market making		9,451		7,660		23
Other principal transactions		5,823		5,913		(2)
Total non-interest revenues		32,849		29,798		10
Interest income		19,679		13,113		50
Interest expense		15,912		10,181		56
Net interest income		3,767		2,932		28
Total net revenues		36,616		32,730		12
Provision for credit losses		674		657		3
OPERATING EXPENSES
Compensation and benefits		12,328		11,653		6
Brokerage, clearing, exchange and distribution fees		3,200		2,876		11
Market development		740		588		26
Communications and technology		1,023		897		14
Depreciation and amortization		1,328		1,152		15
Occupancy		809		733		10
Professional fees		1,214		1,165		4
Other expenses		2,819		1,877		50
Total operating expenses		23,461		20,941		12
Pre-tax earnings		12,481		11,132		12
Provision for taxes		2,022		6,846		(70)
Net earnings		10,459		4,286		144
Preferred stock dividends		599		601		–
Net earnings applicable to common shareholders		$            9,860		$            3,685		168
EARNINGS PER COMMON SHARE
Basic (11)		$            25.53		$              9.12		180 %
Diluted		25.27		9.01		180
AVERAGE COMMON SHARES
Basic		385.4		401.6		(4)
Diluted		390.2		409.1		(5)

12

Goldman Sachs Reports:

Full Year and Fourth Quarter 2018 Earnings Results

The Goldman Sachs Group, Inc. and Subsidiaries

Consolidated Statements of Earnings (unaudited) ⁽¹⁾

In millions, except per share amounts and headcount

	THREE MONTHS ENDED						% CHANGE FROM
	DECEMBER 31, 2018		SEPTEMBER 30, 2018		DECEMBER 31, 2017		SEPTEMBER 30, 2018		DECEMBER 31,   2017
REVENUES
Investment banking		$            2,044		$            1,980		$            2,141		3  %		(5) %
Investment management		1,567		1,580		1,554		(1)		1
Commissions and fees		838		704		772		19		9
Market making		1,420		2,281		1,215		(38)		17
Other principal transactions		1,220		1,419		1,544		(14)		(21)
Total non-interest revenues		7,089		7,964		7,226		(11)		(2)
Interest income		5,468		5,061		3,736		8		46
Interest expense		4,477		4,205		2,838		6		58
Net interest income		991		856		898		16		10
Total net revenues		8,080		8,820		8,124		(8)		(1)
Provision for credit losses		222		174		290		28		(23)
OPERATING EXPENSES
Compensation and benefits		1,857		3,019		2,098		(38)		(11)
Brokerage, clearing, exchange and distribution fees		830		714		732		16		13
Market development		208		167		175		25		19
Communications and technology		262		250		230		5		14
Depreciation and amortization		377		317		350		19		8
Occupancy		215		203		190		6		13
Professional fees		317		310		363		2		(13)
Other expenses		1,084		588		588		84		84
Total operating expenses		5,150		5,568		4,726		(8)		9
Pre-tax earnings		2,708		3,078		3,108		(12)		(13)
Provision for taxes		170		554		5,036		(69)		(97)
Net earnings / (loss)		2,538		2,524		(1,928)		1		N.M.
Preferred stock dividends		216		71		215		N.M.		–
Net earnings / (loss) applicable to common shareholders		$            2,322		$            2,453		$           (2,143)		(5)		N.M.
EARNINGS / (LOSS) PER COMMON SHARE
Basic (11)		$              6.11		$              6.35		$             (5.51)		(4) %		N.M. %
Diluted		6.04		6.28		(5.51)		(4)		N.M.
AVERAGE COMMON SHARES
Basic		379.5		385.4		389.8		(2)		(3)
Diluted		384.3		390.5		389.8		(2)		(1)
SELECTED DATA AT PERIOD-END
Headcount		36,600		36,300		33,600		1		9

13

Goldman Sachs Reports:

Full Year and Fourth Quarter 2018 Earnings Results

The Goldman Sachs Group, Inc. and Subsidiaries

Condensed Consolidated Statements of Financial Condition (unaudited) ⁽⁷⁾

$ in billions

	AS OF
	DECEMBER 31, 2018		SEPTEMBER 30, 2018		DECEMBER 31, 2017
ASSETS
Cash and cash equivalents		$             130		$             119		$             110
Collateralized agreements		276		298		312
Receivables		160		159		151
Financial instruments owned		336		351		316
Other assets		31		30		28
Total assets		933		957		917
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits		158		151		139
Collateralized financings		113		129		124
Payables		180		190		178
Financial instruments sold, but not yet purchased		109		113		112
Unsecured short-term borrowings		41		42		47
Unsecured long-term borrowings		224		229		218
Other liabilities		18		16		17
Total liabilities		843		870		835
Shareholders’ equity		90		87		82
Total liabilities and shareholders’ equity		$             933		$             957		$             917
Capital Ratios (unaudited) (5) (6) (7) $ in billions
	AS OF
	DECEMBER 31, 2018		SEPTEMBER 30, 2018		DECEMBER 31, 2017
Common equity tier 1		$            73.1		$            71.8		$            67.0
STANDARDIZED CAPITAL RULES
Risk-weighted assets		$             548		$             546		$             564
Common equity tier 1 ratio		13.3%		13.1%		11.9%
BASEL III ADVANCED CAPITAL RULES
Risk-weighted assets		$             558		$             577		$             626
Common equity tier 1 ratio		13.1%		12.4%		10.7%
Average Daily VaR (unaudited) (5) (7) $ in millions
	THREE MONTHS ENDED						YEAR ENDED
	DECEMBER 31, 2018		SEPTEMBER 30, 2018		DECEMBER 31, 2017		DECEMBER 31, 2018		DECEMBER 31, 2017
RISK CATEGORIES
Interest rates		$                40		$                41		$                40		$                 46		$                 40
Equity prices		28		28		28		31		24
Currency rates		19		15		9		14		12
Commodity prices		12		10		9		11		13
Diversification effect		(50)		(41)		(32)		(42)		(35)
Total		$                49		$                53		$                54		$                 60		$                 54

14

Goldman Sachs Reports:

Full Year and Fourth Quarter 2018 Earnings Results

The Goldman Sachs Group, Inc. and Subsidiaries

Assets Under Supervision (unaudited) ⁽⁵⁾

$ in billions

	AS OF						% CHANGE FROM
	DECEMBER 31, 2018		SEPTEMBER 30, 2018		DECEMBER 31, 2017		SEPTEMBER 30, 2018		DECEMBER 31, 2017
ASSET CLASS
Alternative investments		$               167		$               175		$               168		(5) %		(1) %
Equity		301		349		321		(14)		(6)
Fixed income		677		668		660		1		3
Total long-term AUS		1,145		1,192		1,149		(4)		–
Liquidity products		397		358		345		11		15
Total AUS		$            1,542		$            1,550		$            1,494		(1)		3
	THREE MONTHS ENDED						YEAR ENDED
	DECEMBER 31, 2018		SEPTEMBER 30, 2018		DECEMBER 31, 2017		DECEMBER 31, 2018		DECEMBER 31, 2017
Beginning balance		$            1,550		$            1,513		$            1,456		$            1,494		$            1,379
Net inflows / (outflows):
Alternative investments		(4)		3		(2)		1		15
Equity		(1)		7		1		13		2
Fixed income		8		3		–		23		25
Total long-term AUS net inflows / (outflows)		3		13		(1)		37		42
Liquidity products		39		8		17		52		(13)
Total AUS net inflows / (outflows)		42		21		16		89		29 (12)
Net market appreciation / (depreciation)		(50)		16		22		(41)		86
Ending balance		$            1,542		$            1,550		$            1,494		$            1,542		$            1,494

15

  Goldman Sachs Reports

  Full Year and Fourth Quarter 2018 Earnings Results

Footnotes

(1) The following reclassifications have been made to previously reported amounts to conform to the current presentation.

• Provision for credit losses, previously reported in other principal transactions revenues (and Investing & Lending segment net revenues), is now reported as a separate line item in the Consolidated Statements of Earnings.

• Headcount consists of the firm’s employees, and excludes consultants and temporary staff previously reported as part of total staff. As a result, expenses related to consultants and temporary staff previously reported in compensation and benefits expenses are now reported in professional fees.

• Regulatory-related fees that are paid to exchanges, reported in other expenses prior to 2018, are now reported in brokerage, clearing, exchange and distribution fees.

(2) During the fourth quarter of 2017, the Tax Cuts and Jobs Act (Tax Legislation) was enacted and lowered U.S. corporate income tax rates as of January 1, 2018, implemented a territorial tax system and imposed a repatriation tax on deemed repatriated earnings of foreign subsidiaries. The estimated impact of Tax Legislation was an increase in income tax expense of $4.40 billion for the fourth quarter of 2017. Excluding this expense, diluted EPS was $19.76, ROE was 10.8% and ROTE was 11.4% for 2017, and diluted EPS was $5.68 for the fourth quarter of 2017. In the fourth quarter of 2018, the firm finalized this estimate to reflect the impact of updated information, including subsequent guidance issued by the U.S. Internal Revenue Service, resulting in a $467 million income tax benefit ($487 million total income tax benefit for 2018). Excluding this benefit, diluted EPS was $24.02, ROE was 12.7% and ROTE was 13.4% for 2018, and diluted EPS was $4.83 for the fourth quarter of 2018.

Management believes that presenting the firm’s results excluding Tax Legislation is meaningful as excluding this item increases the comparability of period-to-period results. Diluted EPS and ROE, excluding the impact of Tax Legislation, are non-GAAP measures and may not be comparable to similar non-GAAP measures used by other companies. The tables below present the calculation of net earnings applicable to common shareholders, diluted EPS and average common shareholders’ equity, excluding the impact of Tax Legislation (unaudited, in millions, except per share amounts):

	FOR THE
	THREE MONTHS ENDED   DECEMBER 31,   2018	YEAR ENDED   DECEMBER 31,   2018	THREE MONTHS ENDED   DECEMBER 31,   2017	YEAR ENDED   DECEMBER 31,   2017
Net earnings / (loss) applicable to common shareholders, as reported	$                  2,322	$                  9,860	$                 (2,143)	$                  3,685
Impact of Tax Legislation	(467)	(487)	4,400	4,400
Net earnings applicable to common shareholders, excluding the impact of Tax Legislation	$                  1,855	$                  9,373	$                  2,257	$                   8,085
Divided by average diluted common shares used in the calculation of diluted earnings (excluding the impact of Tax Legislation) per common share	384.3	390.2	397.4	409.1
Diluted EPS, excluding the impact of Tax Legislation	$                     4.83	$                  24.02	$                     5.68	$                   19.76

	FOR THE
	THREE MONTHS ENDED   DECEMBER 31,   2017	YEAR ENDED   DECEMBER 31,   2017
Average basic common shares, as reported	389.8	401.6
Effect of dilutive securities	7.6	7.5
Average diluted common shares used in the calculation of diluted earnings (excluding the impact of Tax Legislation) per common share	397.4	409.1

	AVERAGE FOR THE
	YEAR ENDED   DECEMBER 31,   2018	YEAR ENDED   DECEMBER 31,   2017
Common shareholders’ equity, as reported	$                73,985	$                74,721
Impact of Tax Legislation	(42)	338
Common shareholders’ equity, excluding the impact of Tax Legislation	73,943	75,059
Goodwill and identifiable intangible assets	(4,090)	(4,065)
Tangible common shareholders’ equity, excluding the impact of Tax Legislation	$                69,853	$                 70,994

16      

  Goldman Sachs Reports

  Full Year and Fourth Quarter 2018 Earnings Results

Footnotes (continued)

(3) ROE is calculated by dividing net earnings (or annualized net earnings for annualized ROE) applicable to common shareholders by average monthly common shareholders’ equity. Tangible common shareholders’ equity is calculated as total shareholders’ equity less preferred stock, goodwill and identifiable intangible assets. ROTE is calculated by dividing net earnings (or annualized net earnings for annualized ROTE) applicable to common shareholders by average monthly tangible common shareholders’ equity. Tangible book value per common share is calculated by dividing tangible common shareholders’ equity by basic shares. Management believes that tangible common shareholders’ equity and tangible book value per common share are meaningful because they are measures that the firm and investors use to assess capital adequacy and that ROTE is meaningful because it measures the performance of businesses consistently, whether they were acquired or developed internally. Tangible common shareholders’ equity, ROTE and tangible book value per common share are non-GAAP measures and may not be comparable to similar non-GAAP measures used by other companies.

The table below presents the firm’s average total and common shareholders’ equity, as well as a reconciliation of total shareholders’ equity to tangible common shareholders’ equity (unaudited, $ in millions):

	AVERAGE FOR THE
	THREE MONTHS ENDED   DECEMBER 31, 2018		YEAR ENDED   DECEMBER 31, 2018		AS OF   DECEMBER 31, 2018
Total shareholders’ equity		$                    87,761		$                     85,238		$                          90,185
Preferred stock		(11,203)		(11,253)		(11,203)
Common shareholders’ equity		76,558		73,985		78,982
Goodwill and identifiable intangible assets		(4,094)		(4,090)		(4,082)
Tangible common shareholders’ equity		$                    72,464		$                     69,895		$                          74,900

(4) Dealogic – January 1, 2018 through December 31, 2018.

(5) For information about the firm’s investment banking transaction backlog, assets under supervision, share repurchase program, global core liquid assets and VaR, see “Results of Operations – Investment Banking,” “Results of Operations – Investment Management,” “Equity Capital Management and Regulatory Capital – Equity Capital Management,” “Risk Management – Liquidity Risk Management” and “Risk Management – Market Risk Management,” respectively, in Part I, Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the firm’s Quarterly Report on Form 10-Q for the period ended September 30, 2018. For information about the firm’s risk-based capital ratios and supplementary leverage ratio, and geographic net revenues, see Note 20 “Regulation and Capital Adequacy” and Note 25 “Business Segments,” respectively, in Part I, Item 1 “Financial Statements (Unaudited)” in the firm’s Quarterly Report on Form 10-Q for the period ended September 30, 2018.

(6) As of December 31, 2017, the  firm’s capital ratios on a fully phased-in basis were non-GAAP measures and may not be comparable  to similar non-GAAP measures used by other companies. Management believes that the firm’s capital ratios on a fully phased-in basis are meaningful because they are measures that the firm and investors use to assess capital adequacy. The table below presents reconciliations, for both the Standardized approach and the Basel III Advanced approach, of common equity tier 1 and risk-weighted assets on a transitional basis to a fully phased-in basis as of December 31, 2017 (unaudited, $ in billions):

	AS OF DECEMBER 31,  2017
	STANDARDIZED	BASEL III ADVANCED
Common equity tier 1, transitional basis	$                     67.1	$                               67.1
Transitional adjustments	(0.1)	(0.1)
Common equity tier 1, fully phased-in basis	$                      67.0	$                               67.0
Risk-weighted assets, transitional basis	$                      556	$                                618
Transitional adjustments	8	8
Risk-weighted assets, fully phased-in basis	$                       564	$                                626
Common equity tier 1 ratio, transitional basis	12.1%	10.9%
Common equity tier 1 ratio, fully phased-in basis	11.9%	10.7%

(7) Represents a preliminary estimate and may be revised in the firm’s Annual Report on Form 10-K for the year ended December 31, 2018.

(8) In the first quarter of 2018, the firm adopted ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” which required a change in the presentation of certain costs from a net presentation within revenues to a gross basis and vice versa. For information about ASU No. 2014-09, see Note 3 “Significant Accounting Policies” in Part I, Item 1 “Financial Statements (Unaudited)” in the firm’s Quarterly Report on Form 10-Q for the period ended September 30, 2018.

(9) Efficiency ratio is calculated by dividing total operating expenses by total net revenues.

(10) Basic shares include common shares outstanding and restricted stock units granted to employees with no future service requirements.

(11) Unvested share-based awards that have non-forfeitable rights to dividends or dividend equivalents are treated as a separate class of securities in calculating EPS. The impact of applying this methodology was a reduction in basic EPS of $0.05 and $0.06 for the years ended December 31, 2018 and December 31, 2017, respectively, and $0.01 for both the three months ended December 31, 2018 and September 30, 2018. The impact of applying this methodology for the three months ended December 31, 2017 was a loss per common share (basic and diluted) of $0.01.

(12) Included $23 billion of inflows ($20 billion in long-term assets under supervision and $3 billion in liquidity products) in connection with the acquisition of a portion of Verus Investors’ outsourced chief investment officer business and $5 billion of equity asset outflows in connection with the divestiture of the firm’s local Australian-focused investment capabilities and fund platform.

17      

EX-99.2

Exhibit 99.2

Full Year and Fourth Quarter 2018 Earnings Results Presentation January 16, 2019

Earnings Call Agenda Strategic priorities Macro perspectives and client engagement Update on 1MDB David M. Solomon, Chairman and Chief Executive Officer 1 Stephen M. Scherr, Chief Financial Officer 2 Q&A 3 Key financial highlights Segment performance review Expenses and taxes Capital, balance sheet and liquidity 1

Client Centricity: One Goldman Sachs Business Reviews & Expanding our Addressable Market Investing for Scale via Technology and Platform Expansion Targets and Accountability Strategic Overview 2 Superior Long-Term Shareholder Returns Key Priorities Updates on Select Business Reviews Leverage technology to create best-in-class client experience across more products Expand addressable market while optimizing expenses and capital allocation Market Making: FICC and Equities Opportunities to increase 3rd party assets under supervision Continue monetization of on-balance sheet investments Increase fee-based revenues and optimize capital consumption Alternative Investing Platform Deepen corporate relationships Leverage franchise adjacencies and innovation Potential for FX opportunities Cash Management Continue to evolve Marcus to multi-product platform Launch multi-tiered mass affluent strategy Consumer Business

Macro Perspectives 3 Economic Fundamentals Market Dynamics (4Q18) Positive but slowing global growth 2019 estimated GDP growth1: +2.4% U.S. +3.5% Global Strong corporate performance 22% 2018 estimated S&P 500 EPS growth1 $4.2 trillion Announced M&A volumes in 20182 Corporate confidence remains high – 2017 levels1 Market dislocation creates opportunity for strategic client engagement Market uncertainty drives tactical structuring of equity and debt financing Portfolio repositioning and alpha generation Hedging and liquidity solutions Shifting macro environment creates opportunity for productive engagement with clients 10-year Government Bond Yields: -36bps U.S. ï´ -22bps U.K. ï´ -12bps Japan Client Engagement Opportunities -14% -13% -38% S&P 500 MSCI World WTI Crude Volatility: VIX +110% ï´ MOVE +44% ï´ CVIX +12% U.S. Credit Spreads1: +56bps IG ï´ +171bps HY

Annual Results Snapshot Net revenues up 12% YoY, with highest net revenues since 2010 Broad contribution with every segment up YoY Net Revenues3 $36.6 billion $32.7 billion 2018 2017 EPS4 $25.27 $9.01 2018 2017 2018 Returns4,5 13.3% 14.1% ROE ROTE 2018 Book Value $207.36 $196.64 BVPS TBVPS5 Strong 2018 performance across the firm created operating leverage to fund investments in our business Record diluted EPS Highest annual ROE and ROTE since 2009 14.6% YoY growth in book value per share 15.3% YoY growth in tangible book value per share 4

Financial Overview Full Year Net Revenue Mix by Segment 5 Financial Results Fee-Based or More-Recurring Revenues6 2018 61% 48% $22.3 billion $16.6 billion 2013 Investment Management 19% Institutional Client Services 37% (Financial Advisory 9%) (Underwriting 12%) (FICC 16%) (Equities 21%) Investment Banking 21% Investing & Lending 23% (Debt securities and loans net interest income ~7%) $ in millions, except per share amounts 4Q18 vs. 3Q18 vs. 4Q17 2018 vs. 2017 Investment Banking $ 2,044 3% -5% $ 7,862 7% FICC 822 -37% -18% 5,882 11% Equities 1,604 -11% 17% 7,600 15% Institutional Client Services 2,426 -22% 2% 13,482 13% Investing & Lending 1,906 -6% -2% 8,250 14% Investment Management 1,704 — 2% 7,022 13% Net revenues3 $ 8,080 -8% -1% $36,616 12% Provision for credit losses3 222 28% -23% 674 3% Operating expenses 5,150 -8% 9% 23,461 12% Pre-tax earnings 2,708 -12% -13% 12,481 12% Provision for taxes4 170 -69% -97% 2,022 -70% Net earnings 2,538 1% N.M. 10,459 144% Net earnings to common $ 2,322 -5% N.M. $ 9,860 168% Diluted EPS4 $ 6.04 -4% N.M. $ 25.27 180% ROE4,5 12.1% -1.0pp N.M. 13.3% 8.4pp ROTE4,5 12.8% -1.0pp N.M. 14.1% 8.9pp

Investment Banking Financial Results $ in millions 4Q18 vs. 3Q18 vs. 4Q17 2018 vs. 2017 Financial Advisory $ 1,201 31% 56% $ 3,507 10% Equity underwriting 315 -27% -32% 1,646 32% Debt underwriting 528 -16% -42% 2,709 -8% Total Underwriting 843 -21% -38% 4,355 4% Total Investment Banking $ 2,044 3% -5% $ 7,862 7% Full Year Worldwide League Table Rankings2 Net Revenues ($ in millions) Key Highlights Financial Advisory 2018 and 4Q18 net revenues reflect strong M&A volumes and leading market share — ~$1.2 trillion of completed M&A volumes from nearly 400 transactions in 20182 — ~$1.3 trillion of announced M&A volumes in 2018, including ~$450 billion from transactions below $5 billion in deal value2 Strong Underwriting net revenues in 2018 driven by increased IPO activity offsetting lower debt underwriting activity; 4Q18 net revenues down significantly QoQ on lower industry-wide activity Continued strong levels of engagement with backlog7 up YoY #1 Announced M&A #2 #1 #1 #1 Completed M&A Equity & Equity-Related High-Yield Debt 6 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 756 749 911 772 586 804 916 1,201 311 260 212 460 410 489 432 315 636 721 674 909 797 752 632 528 $1,703 $1,730 $1,797 $2,141 $1,793 $2,045 $1,980 $2,044 Financial Advisory Equity underwriting Debt underwriting Common Stock Offerings Investment-Grade Debt ($+€) #4

Institutional Client Services – FICC FICC Net Revenues ($ in millions) 2018 net revenues increased YoY primarily reflecting higher client activity; 4Q18 performance challenged due to difficult market backdrop 4Q18 net revenues decreased YoY reflecting significantly lower net revenues in credit products, amid wider credit spreads and increased volatility, and lower net revenues in interest rate products Remain focused on expanding addressable market by broadening client relationships, streamlining expenses, optimizing capital and investing in automation and platform enhancements 7 FICC Key Highlights 2018 FICC Net Revenue Mix8 Financing ~10% Market Intermediation~90% 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 $1,685 $1,159 $1,452 $1,003 $2,074 $1,679 $1,307 $822 $ in millions 4Q18 vs. 3Q18 vs. 4Q17 2018 vs. 2017 FICC $ 822 -37% -18% $ 5,882 11% Equities 1,604 -11% 17% 7,600 15% Total ICS $ 2,426 -22% 2% $ 13,482 13% Financial Results

$ in millions 4Q18 vs. 3Q18 vs. 4Q17 2018 vs. 2017 Equities client execution $ 401 -41% 80% $ 2,835 39% Commissions and fees 801 19% 9% 3,055 5% Securities services 402 -8% -2% 1,710 4% Total Equities $ 1,604 -11% 17% $ 7,600 15% Institutional Client Services – Equities 2018 net revenues higher YoY on significantly higher equities client execution net revenues 4Q18 net revenues increased YoY amid improved market conditions, higher levels of volatility and higher client activity — Equities client execution net revenues increased significantly versus a challenging 4Q17, supported by better performance in cash products — Commissions and fees increased driven by higher market volumes; market share in low touch improved — Securities services net revenues decreased slightly; average customer balances lower Net Revenues ($ in millions) 8 Key Highlights Financial Results 2018 Equities Net Revenue Mix8 Financing ~40% Market Intermediation ~60% 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 552 687 584 223 1,062 691 681 401 738 764 681 737 817 763 674 801 384 441 403 409 432 437 439 402 $1,674 $1,892 $1,668 $1,369 $2,311 $1,891 $1,794 $1,604 Equities client execution Commissions and fees Securities services

Investing & Lending – Equity Securities Financial Results Key Highlights 2018 net revenues decreased slightly YoY as improved performance vs. vs. vs. from private equity investments largely offset net losses from public $ in millions 4Q18 3Q18 4Q17 2018 2017 investments 4Q18 net revenues reflected continued strong results in private equity Equity securities $ 994 -11% -18% $ 4,455 -3% investments, driven by company-specific events, including sales, and corporate performance — Approximately one-half of the net revenues were generated from real estate, which primarily reflected gains from sales Net Revenues ($ in millions) investments, Our global private which and are public diversified equity across portfolio geography consists and of over investment 1,000 vintage and have a total carrying value of $21 billion $1,391 $1,281 — In addition, our consolidated investment entities have a carrying $1,180 $1,209 value of $13 billion, substantially all of which is related to real 31% $1,111 estate 9 $1,069 25% 40% $994 Equity I&L Asset Mix10,11 $798 49% 30% 41% $ in billions 4Q18 $ in billions 4Q18 52% Corporate $ 17 Public equity $ 1 42% Real estate 4 Private equity 20 Total $ 21 Total $ 21 75% 69% 70% 60% 59% Vintage Geographic 51% 58% 48% 2011 or Asia 2015 – 31% Present 47% Earlier 30% Americas 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 53% 2012 – Corporate Real Estate 2014 EMEA 23% 16% 9

Record net interest income in 2018 of ~$2.7 billion; 4Q18 included ~$800 million of net interest income (~$3.2 billion annual pace) Franchise adjacent loan portfolio that complements our current product offerings and expertise As of 4Q18, ~85% of total loans were secured 2018 and 4Q18 provision for credit losses3 of $674 million and $222 million, respectively, driven primarily by consumer loan growth Net charge-off rate 0.5% for 2018 Investing & Lending – Debt Securities and Loans Net Revenues3 ($ in millions) $ in millions 4Q18 vs. 3Q18 vs. 4Q17 2018 vs. 2017 Debt securities and loans3 $ 912 -1% 23% $ 3,795 43%

44% 37% 75% 56% 26% 33% 15% 33% 19% 30% 10% 11% 11% $ in millions 4Q18 vs. 3Q18 vs. 4Q17 2018 vs. 2017 Management and other fees $ 1,365 -1% — $ 5,438 6% Incentive fees 153 3% 19% 830 99% Transaction revenues 186 7% 13% 754 15% Total Investment Management $ 1,704 — 2% $ 7,022 13% Investment Management Financial Results 4Q18 AUS Mix7 Assets Under Supervision7 $ in billions 4Q18 vs. 3Q18 vs. 4Q17 Long-term AUS $ 1,145 -4% — Liquidity products 397 11% 15% Total AUS $ 1,542 -1% 3% Long-Term AUS Net Flows7,12 ($ in billions) Record net revenues in 2018, driven by record management and other fees, significantly higher incentive fees and higher transaction revenues AUS7 increased $48 billion in 2018 to $1.54 trillion — Long-term net inflows of $37 billion, primarily in fixed income and equity assets — Liquidity products net inflows of $52 billion — Net market depreciation of $41 billion, primarily in equity assets Over past five years, total cumulative organic long-term AUS net inflows of ~$215 billion Alternative investments Equity Liquidity products Fixed income Third party distributed High-net- worth individuals Institutional EMEA Americas Asia Public funds Separate accounts Private funds and other 11 Asset Class Distribution Channel Region Vehicle 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 $5 $25 $13 $(1) $13 $8 $13 $3 Key Highlights

Expenses Financial Results3 Key Highlights vs. vs. vs. Efficiency ratio13 stable YoY as net revenue growth funded $ in millions 4Q18 3Q18 4Q17 2018 2017 investments in our businesses Compensation and benefits $ 1,857 -38% -11% $12,328 6% 2018 operating expenses increased YoY, including: — Higher compensation and benefits expenses (+$675 million); up Brokerage, clearing, exchange 830 16% 13% 3,200 11% 6%, only half the rate of net revenue growth and distribution fees — Significantly higher net provisions for litigation and regulatory Market development 208 25% 19% 740 26% proceedings (+$656 million) — Revenue recognition standard impact14 (+$297 million) Communications and 262 5% 14% 1,023 14% technology — Substantially all of the remaining increase (+$892 million) is from investments to drive growth (including Marcus, consolidated Depreciation and amortization 377 19% 8% 1,328 15% investments and technology) and higher activity reflected in BCE&D Occupancy 215 6% 13% 809 10% 2018 effective tax rate included a $487 million tax benefit related to the finalization of impact of Tax Legislation4; 2019 effective tax rate expected to be ~22-23% excluding equity based compensation and Professional fees 317 2% -13% 1,214 4% discrete items Other expenses 1,084 84% 84% 2,819 50% Efficiency Ratio13 66% 64% 64% Total operating expenses $ 5,150 -8% 9% $23,461 12% Provision for taxes4 $ 170 -69% -97% $ 2,022 -70% Effective Tax Rate 16.2% -45.3pp 2016 2017 2018 12

Capital Financial Metrics7,11,15 Key Highlights $ in billions, except per share amounts 4Q18 3Q18 4Q17 Rebuilt capital ratios to pre-Tax Legislation4 levels Common equity tier 1 (CET1) $ 73.1 $ 71.8 $ 67.0 — YoY improvement in CET1 ratios driven by retained earnings and reduced market RWAs Standardized RWAs $ 548 $ 546 $ 564 — Decrease in credit RWAs also contributed to Basel III Standardized CET1 ratio 13.3% 13.1% 11.9% Advanced CET1 ratio YoY improvement Basel III Advanced RWAs $ 558 $ 577 $ 626 Returned $4.52 billion of capital during the year Basel III Advanced CET1 ratio 13.1% 12.4% 10.7% — Paid $1.23 billion in common stock dividends Supplementary leverage ratio 6.2% 6.0% 5.8% — Repurchased 13.9 million shares of common stock, for a total cost of $3.29 billion7 BVPS $ 207.36 $ 197.33 $ 181.00 TBVPS5 $ 196.64 $ 186.62 $ 170.61 Capital and Leverage Ratios7,11,15 Standardized Basel III Supplementary CET1 Ratio Advanced Leverage Ratio CET1 Ratio 13.3% 13.1% 11.9% 10.7% 5.8% 6.2% 4Q17 4Q18 4Q17 4Q18 4Q17 4Q18 13

Balance Sheet & Liquidity Balance Sheet Allocation10,11 Key Highlights 4Q18 3Q18 4Q17 Highly liquid balance sheet and robust liquidity metrics allow the $ in billions firm to capitalize on market opportunities GCLA, segregated assets and other $ 313 $ 282 $ 285 — GCLA7 averaged $229 billion11 for 4Q18 Secured client financing 147 161 164 Well-diversified funding mix across tenor, currency, channel, structure and counterparty Institutional Client Services 308 358 319 Benchmark maturities expected to outpace benchmark issuance in Investing & Lending 134 126 121 2019, as deposits grow Other assets 31 30 28 Deposit funding lowers overall financing costs, adds diversification and reduces credit sensitivity Total assets $ 933 $ 957 $ 917 Sources of Funding as of 4Q1811 Secured Shareholders’ Balance Sheet Assets11 Funding 18% Equity 14% $ in billions 4Q18 3Q18 4Q17 Cash and cash equivalents $ 130 $ 119 $ 110 Collateralized agreements 276 298 312 Receivables 160 159 151 Deposits 25% Financial instruments owned 336 351 316 (Consumer Unsecured Deposits 6%) Long-Term Other assets 31 30 28 Debt 36% Total assets $ 933 $ 957 $ 917 Unsecured Short-Term Debt 7% 14

Cautionary Note on Forward-Looking Statements This presentation contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are not historical facts, but instead represent only the firm’s beliefs regarding future events, many of which, by their nature, are inherently uncertain and outside of the firm’s control. It is possible that the firm’s actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements. For a discussion of some of the risks and important factors that could affect the firm’s future results and financial condition, see “Risk Factors” in Part I, Item 1A of the firm’s Annual Report on Form 10-K for the year ended December 31, 2017. Information regarding the firm’s capital ratios, risk-weighted assets, supplementary leverage ratio, total assets and balance sheet data, global core liquid assets, and planned 2019 benchmark issuances consists of preliminary estimates. These estimates are forward-looking statements and are subject to change, possibly materially, including as the firm completes its financial statements. Statements about the firm’s expected 2019 effective income tax rate constitute forward-looking statements. These statements are subject to the risk that the firm’s 2019 effective income tax rate may differ from the anticipated rate indicated in these forward-looking statements, possibly materially, due to, among other things, changes in the firm’s earnings mix, the firm’s profitability and the entities in which the firm generates profits, the assumptions the firm has made in forecasting its expected tax rate, as well as guidance that may be issued by the U.S. Internal Revenue Service. Statements about the firm’s investment banking transaction backlog also may constitute forward-looking statements. Such statements are subject to the risk that the terms of these transactions may be modified or that they may not be completed at all; therefore, the net revenues, if any, that the firm actually earns from these transactions may differ, possibly materially, from those currently expected. Important factors that could result in a modification of the terms of a transaction or a transaction not being completed include, in the case of underwriting transactions, a decline or continued weakness in general economic conditions, outbreak of hostilities, volatility in the securities markets generally or an adverse development with respect to the issuer of the securities and, in the case of 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 a discussion of other important factors that could adversely affect the firm’s investment banking transactions, see “Risk Factors” in Part I, Item 1A of the firm’s Annual Report on Form 10-K for the year ended December 31, 2017. 15

Footnotes 1. 2019 estimated real gross domestic product (GDP) growth and 2018 estimated S&P 500 Index earnings per share (EPS) growth both per Goldman Sachs Research. U.S. credit z-spreads per Bloomberg. Corporate confidence level per Duke Fuqua CFO survey. 2. Dealogic – January 1, 2018 through December 31, 2018. 3. The following reclassifications have been made to previously reported amounts to conform to the current presentation. Provision for credit losses, previously reported in other principal transactions revenues (and Investing & Lending segment net revenues), is now reported as a separate line item in the Consolidated Statements of Earnings. Headcount consists of the firm’s employees, and excludes consultants and temporary staff previously reported as part of total staff. As a result, expenses related to consultants and temporary staff previously reported in compensation and benefits expenses are now reported in professional fees. Regulatory-related fees that are paid to exchanges, reported in other expenses prior to 2018, are now reported in brokerage, clearing, exchange and distribution fees. 4. During the fourth quarter of 2017, the Tax Cuts and Jobs Act (Tax Legislation) was enacted and lowered U.S. corporate income tax rates as of January 1, 2018, implemented a territorial tax system and imposed a repatriation tax on deemed repatriated earnings of foreign subsidiaries. The estimated impact of Tax Legislation was an increase in income tax expense of $4.40 billion for the fourth quarter of 2017. Excluding this expense, diluted EPS was $19.76, return on average common shareholders’ equity (ROE) was 10.8% and return on average tangible common shareholders’ equity (ROTE) was 11.4% for 2017, and diluted EPS was $5.68 for the fourth quarter of 2017. In the fourth quarter of 2018, the firm finalized this estimate to reflect the impact of updated information, including subsequent guidance issued by the U.S. Internal Revenue Service, resulting in a $467 million income tax benefit ($487 million total income tax benefit for 2018). Excluding this benefit, diluted EPS was $24.02, ROE was 12.7% and ROTE was 13.4% for 2018, and diluted EPS was $4.83 for the fourth quarter of 2018. Management believes that presenting the firm’s results excluding Tax Legislation is meaningful as excluding this item increases the comparability of period-to-period results. Diluted EPS and ROE, excluding the impact of Tax Legislation, are non-GAAP measures and may not be comparable to similar non-GAAP measures used by other companies. The tables below present the calculation of net earnings applicable to common shareholders, diluted EPS and average common shareholders’ equity, excluding the impact of Tax Legislation (unaudited, in millions, except per share amounts): FOR THE THREE MONTHS YEAR THREE MONTHS YEAR ENDED ENDED ENDED ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2018 2018 2017 2017 Net earnings / (loss) applicable to common shareholders, as reported $ 2,322 $ 9,860 $ (2,143) $ 3,685 Impact of Tax Legislation (467) (487) 4,400 4,400 Net earnings applicable to common shareholders, excluding the impact of Tax Legislation $ 1,855 $ 9,373 $ 2,257 $ 8,085 Divided by average diluted common shares used in the calculation of diluted earnings (excluding the impact of Tax Legislation) per common share 384.3 390.2 397.4 409.1 Diluted earnings per common share, excluding the impact of Tax Legislation $ 4.83 $ 24.02 $ 5.68 $ 19.76 FOR THE THREE MONTHS YEAR ENDED ENDED DECEMBER 31, DECEMBER 31, 2017 2017 Average basic common shares, as reported 389.8 401.6 Effect of dilutive securities 7.6 7.5 Average diluted common shares used in the calculation of diluted earnings (excluding the impact of Tax Legislation) per common share 397.4 409.1 16

Footnotes (continued) AVERAGE FOR THE YEAR ENDED YEAR ENDED DECEMBER 31, 2018 DECEMBER 31, 2017 Common shareholders’ equity, as reported $ 73,985 $ 74,721 Impact of Tax Legislation (42) 338 Common shareholders’ equity, excluding the impact of Tax Legislation 73,943 75,059 Goodwill and identifiable intangible assets (4,090) (4,065) Tangible common shareholders’ equity, excluding the impact of Tax Legislation $ 69,853 $ 70,994 5. ROE is calculated by dividing net earnings (or annualized net earnings for annualized ROE) applicable to common shareholders by average monthly common shareholders’ equity. Tangible common shareholders’ equity is calculated as total shareholders’ equity less preferred stock, goodwill and identifiable intangible assets. ROTE is calculated by dividing net earnings (or annualized net earnings for annualized ROTE) applicable to common shareholders by average monthly tangible common shareholders’ equity. Tangible book value per common share (TBVPS) is calculated by dividing tangible common shareholders’ equity by basic shares (380.9 million as of December 31, 2018, 382.9 million as of September 30, 2018 and 388.9 million as of December 31, 2017). Management believes that tangible common shareholders’ equity and TBVPS are meaningful because they are measures that the firm and investors use to assess capital adequacy and that ROTE is meaningful because it measures the performance of businesses consistently, whether they were acquired or developed internally. Tangible common shareholders’ equity, ROTE and TBVPS are non-GAAP measures and may not be comparable to similar non-GAAP measures used by other companies. The table below presents the firm’s average total and common shareholders’ equity, as well as a reconciliation of total shareholders’ equity to tangible common shareholders’ equity (unaudited, $ in millions): AVERAGE FOR THE THREE MONTHS ENDED YEAR ENDED AS OF DECEMBER 31, 2018 DECEMBER 31, 2018 DECEMBER 31, 2018 Total shareholders’ equity $ 87,761 $ 85,238 $ 90,185 Preferred stock (11,203) (11,253) (11,203) Common shareholders’ equity 76,558 73,985 78,982 Goodwill and identifiable intangible assets (4,094) (4,090) (4,082) Tangible common shareholders’ equity $ 72,464 $ 69,895 $ 74,900 6. Consists of Investment Banking net revenues, commissions and fees within Equities, securities services net revenues within Equities, net interest income within debt securities and loans, and Investment Management net revenues. 7. For information about the firm’s investment banking transaction backlog, assets under supervision (AUS), share repurchase program and global core liquid assets (GCLA), see “Results of Operations – Investment Banking,” “Results of Operations – Investment Management,” “Equity Capital Management and Regulatory Capital – Equity Capital Management” and “Risk Management – Liquidity Risk Management,” respectively, in Part I, Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the firm’s Quarterly Report on Form 10-Q for the period ended September 30, 2018. For information about the firm’s risk-based capital ratios and supplementary leverage ratio, see Note 20 “Regulation and Capital Adequacy” in Part I, Item 1 “Financial Statements (Unaudited)” in the firm’s Quarterly Report on Form 10-Q for the period ended September 30, 2018. 8. Financing in FICC includes net revenues primarily from short-term repurchase agreement activities. Financing in Equities includes net revenues from prime brokerage and other financing activities, including securities lending, margin lending and swaps. 17

Footnotes (continued) 9. Includes consolidated investment entity assets reported in “Other Assets” on the consolidated statements of financial condition, substantially all of which relate to entities engaged in real estate investment activities. These assets are generally accounted for at historical cost less depreciation. These entities are funded with approximately $ 6 billion of non-recourse debt. 10. In addition to preparing the firm’s consolidated statements of financial condition in accordance with U.S. GAAP, the firm prepares a balance sheet that generally allocates assets to the firm’s businesses, which is a non-GAAP presentation and may not be comparable to similar non-GAAP presentations used by other companies. The firm believes that presenting the firm’s assets on this basis is meaningful because it is consistent with the way management views and manages risks associated with the firm’s assets and better enables investors to assess the liquidity of the firm’s assets. For more information about the firm’s balance sheet allocation, see “Balance Sheet and Funding Sources—Balance Sheet Allocation” in Part I, Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the firm’s Quarterly Report on Form 10-Q for the period ended September 30, 2018. The tables below presents the reconciliations of the balance sheet allocation to the firm’s businesses to the firm’s U.S. GAAP balance sheet (unaudited, $ in billions): GCLA, Secured Institutional Segregated Assets and Other Client Financing Client Services Investing & Lending Total As of December 31, 2018 Cash and cash equivalents $ 130 $ – $ – $ – $ 130 Collateralized agreements 98 117 61 – 276 Receivables – 30 42 88 160 Financial instruments owned 85 – 205 46 336 Subtotal $ 313 $ 147 $ 308 $ 134 $ 902 Other assets 31 Total assets $ 933 GCLA, Secured Institutional Segregated Assets and Other Client Financing Client Services Investing & Lending Total As of September 30, 2018 Cash and cash equivalents $ 119 $ – $ – $ – $ 119 Collateralized agreements 101 128 69 – 298 Receivables – 33 45 81 159 Financial instruments owned 62 – 244 45 351 Subtotal $ 282 $ 161 $ 358 $ 126 $ 927 Other assets 30 Total assets $ 957 GCLA, Secured Institutional Segregated Assets and Other Client Financing Client Services Investing & Lending Total As of December 31, 2017 Cash and cash equivalents $ 110 $ – $ – $ – $ 110 Collateralized agreements 122 124 65 1 312 Receivables – 40 37 74 151 Financial instruments owned 53 – 217 46 316 Subtotal $ 285 $ 164 $ 319 $ 121 $ 889 Other assets 28 Total assets $ 917 11. Represents a preliminary estimate and may be revised in the firm’s Annual Report on Form 10-K for the year ended December 31, 2018. 12. 1Q17 includes $5 billion of outflows in connection with the divestiture of the firm’s local Australian-focused investment capabilities and fund platform. 2Q17 includes $ 20 billion of inflows in connection with the acquisition of a portion of Verus Investors’ outsourced chief investment officer business. 18

Footnotes (continued) 13. Efficiency ratio is calculated by dividing total operating expenses by total net revenues. 14. In the first quarter of 2018, the firm adopted ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” which required a change in the presentation of certain costs from a net presentation within revenues to a gross basis and vice versa. For information about ASU No. 2014-09, see Note 3 “Significant Accounting Policies” in Part I, Item 1 “Financial Statements (Unaudited)” in the firm’s Quarterly Report on Form 10-Q for the period ended September 30, 2018. 15. As of December 31, 2017, the firm’s capital ratios on a fully phased-in basis were non-GAAP measures and may not be comparable to similar non-GAAP measures used by other companies. Management believes that the firm’s capital ratios on a fully phased-in basis are meaningful because they are measures that the firm and investors use to assess capital adequacy. The table below presents reconciliations, for both the Standardized approach and the Basel III Advanced approach, of common equity tier 1 and risk-weighted assets on a transitional basis to a fully phased-in basis as of December 31, 2017 (unaudited, $ in billions): AS OF DECEMBER 31, 2017 STANDARDIZED BASEL III ADVANCED Common equity tier 1, transitional basis $ 67.1 $ 67.1 Transitional adjustments (0.1) (0.1) Common equity tier 1, fully phased-in basis $ 67.0 $ 67.0 Risk-weighted assets, transitional basis $ 556 $ 618 Transitional adjustments 8 8 Risk-weighted assets, fully phased-in basis $ 564 $ 626 Common equity tier 1 ratio, transitional basis 12.1% 10.9% Common equity tier 1 ratio, fully phased-in basis 11.9% 10.7% 19