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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
Item 2.02 Results of Operations and Financial Condition
Item 7.01 Regulation FD Disclosure
Item 8.01 Other Events
Item 9.01 Financial Statements and Exhibits
Signature
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
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
unchanged compared with the fourth quarter of 2017 and 8% 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
Net revenues in Investment Banking were $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.
Net revenues in Financial Advisory were $1.20 billion, 56% higher than 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
quarter of 2017, due to significantly lower net revenues in both debt 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
products and mortgages were slightly lower, while net revenues in credit products
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 supervision
and the impact of the recently adopted revenue recognition 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
market depreciation of $41 billion, primarily in equity assets, largely offset by net
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
consumer loan growth in 2018 were partially offset by an impairment of a secured
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 included 5.6 million shares repurchased during the fourth quarter at an average 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 common share (3) was $196.64, both based on basic shares (10) of 380.9 million 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 share397.4 409.1
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
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anking $
2,0
44 3
% -
5%
$ 7
,862 7
% F
IC
C 8
22 -
37%
-18%
5,882 1
1%
Eq
uiti
es 1,6
04 -
11%
17%
7,6
00 1
5%
Instit
utio
nal C
lie
nt S
ervices 2
,426 -
22%
2%
13,4
82 1
3%
Inve
stin
g &
Lendin
g 1,9
06 -
6%
-2%
8,2
50 1
4%
Inve
stm
ent M
ana
ge
me
nt 1
,704 —
2%
7,0
22 1
3%
Net re
ve
nue
s3 $
8,0
80 -
8%
-1%
$3
6,6
16 1
2%
Provisio
n fo
r cred
it losse
s3 2
22 2
8%
-23%
67
4 3
% O
pe
rati
ng e
xpe
nse
s 5
,15
0 -
8%
9%
23,4
61 1
2%
Pre-ta
x e
arnings 2
,708 -
12%
-13%
12
,481 1
2%
Provisio
n f
or t
axe
s4 1
70 -
69%
-97%
2,0
22 -
70%
Ne
t earnings 2
,538 1
% N
.M. 1
0,4
59
144%
Ne
t earnings to
co
mm
on $
2,3
22 -
5%
N.M
. $ 9
,860 1
68%
Dilu
ted
EPS
4 $
6.0
4 -
4%
N.M
. $ 2
5.2
7 1
80%
RO
E4
,5 1
2.1
% -
1.0
pp N
.M. 1
3.3
% 8
.4pp
RO
TE
4,5 1
2.8
% -
1.0
pp N
.M. 1
4.1
% 8
.9pp
Inv
estm
ent B
an
kin
g F
inanc
ial R
esults
$ in
mill
ions 4Q
18 v
s. 3
Q18 v
s. 4
Q17 2
018 v
s.
2017 F
ina
nc
ial A
dvisory
$ 1
,201 3
1%
56%
$ 3
,50
7 1
0%
Equ
ity
un
derw
rit
ing
31
5 -
27
% -
32
% 1
,64
6 3
2%
De
bt u
nd
erw
riti
ng
52
8 -1
6%
-4
2%
2,7
09
-8%
T
ota
l Un
de
rw
ritin
g 8
43
-2
1%
-3
8%
4,3
55 4
% T
ota
l Inve
stm
ent B
anking $
2,0
44 3
% -
5%
$ 7
,862 7
% F
ull
Year W
orl
dw
ide
Le
ag
ue T
able R
ankin
gs2 N
et R
eve
nue
s (
$ i
n m
illio
ns) K
ey
Hig
hli
ghts
Finan
cia
l Ad
vis
ory 2
018 a
nd 4
Q1
8 n
et r
ev
enu
es re
fle
ct s
trong
M&
A v
olu
mes a
nd
leadin
g m
ark
et s
hare
— ~
$1.2
tril
lion
of c
om
ple
ted M
&A
volum
es f
rom
nea
rly
40
0 tr
an
sa
ctio
ns i
n 2
018
2 —
~$1.3
tri
llion o
f a
nnounce
d M
&A
volu
me
s in
20
18, in
cludin
g ~
$45
0 b
illio
n f
rom
tran
sac
tio
ns b
elo
w $
5 b
illio
n in
de
al v
alu
e2 S
trong U
nderw
rit
ing n
et r
eve
nue
s in
2018 d
riv
en b
y in
crea
se
d I
PO
ac
tivity
off
se
ttin
g l
ow
er d
ebt u
nde
rw
ritin
g a
ctiv
ity; 4
Q18 n
et r
evenue
s d
ow
n sig
nifi
ca
ntl
y Q
oQ
on
low
er
industr
y-w
ide
acti
vity
C
ontin
ue
d s
tro
ng le
ve
ls o
f enga
ge
me
nt w
ith
ba
ck
log
7 u
p Y
oY
#1 A
nnoun
ce
d M
&A
#2 #
1 #
1 #
1 C
om
ple
ted M
&A
Equity
& E
quity
-Rela
ted
Hig
h-Y
ield
D
ebt 6
1Q
17 2
Q17 3
Q17
4Q
17 1
Q1
8 2
Q18 3
Q18 4
Q18 756 7
49
911 7
72 5
86 8
04 9
16
1,2
01 3
11 2
60 212 4
60
410 4
89 4
32 3
15 6
36 721 6
74
909 7
97 7
52 6
32 5
28
$1,7
03
$1,7
30 $1,7
97 $2,1
41 $
1,7
93 $
2,0
45 $
1,9
80 $
2,0
44 F
ina
nc
ial A
dv
isory
Equ
ity u
nde
rwrit
ing D
ebt
unde
rwri
ting C
om
mon S
tock O
ffe
rings I
nve
stm
ent-
Grad
e D
ebt (
$+
€) #
4
In
stitu
tion
al C
lient S
erv
ices –
FIC
C F
IC
C N
et R
ev
en
ues (
$ in
mil
lion
s) 2
018 n
et r
evenue
s in
cre
ase
d Y
oY
prim
arily
re
fle
ctin
g h
ighe
r cli
en
t acti
vity
; 4Q
18
perform
anc
e c
ha
lleng
ed due
to d
iff
icult
ma
rket b
ack
dro
p 4
Q18 n
et re
ve
nues d
ec
rea
se
d Y
oY
re
flec
ting s
ign
ific
an
tly l
ow
er n
et r
eve
nue
s in
cre
dit p
rod
uc
ts, a
mid
wid
er c
re
dit
sprea
ds a
nd
in
cre
ase
d v
ola
tilit
y, a
nd
low
er n
et r
ev
en
ues in
intere
st r
ate
pro
du
cts
R
em
ain
foc
use
d o
n e
xp
and
ing
add
re
ssa
ble
ma
rke
t by b
roade
ning c
lient r
ela
tion
ship
s, s
tre
am
lining e
xpe
nse
s, o
ptim
izing c
ap
ital a
nd in
ve
stin
g in
auto
ma
tion a
nd
pla
tform
enha
nc
em
en
ts 7
FIC
C K
ey H
ighlig
hts 2
018 FIC
C N
et R
eve
nue
Mix8 F
inanc
ing ~
10%
Ma
rke
t Inte
rm
edia
tion~
90
% 1
Q17 2
Q17
3Q
17 4
Q1
7 1
Q18 2
Q18 3
Q18 4Q
18 $
1,685 $
1,1
59 $
1,4
52 $
1,0
03 $
2,0
74 $
1,6
79 $
1,3
07 $
822
$ in
mill
ions 4
Q18 v
s. 3
Q18 v
s. 4
Q17 2
018 v
s.
2017 F
IC
C $
822 -3
7%
-18%
$ 5
,882
11%
Equitie
s 1
,604 -
11%
17%
7,600 1
5%
To
tal I
CS
$ 2
,42
6 -
22%
2%
$ 1
3,4
82 1
3%
Fin
anc
ial R
esults
$ in
milli
on
s 4
Q1
8 v
s. 3
Q1
8 v
s. 4
Q1
7 2
01
8 v
s. 2
01
7 E
qu
itie
s c
lien
t exe
cu
tion $
40
1 -4
1%
80
% $
2,8
35
39
% C
om
mis
sio
ns a
nd
fe
es 8
01 1
9%
9%
3,0
55
5%
Se
curitie
s s
ervice
s 4
02
-8%
-2%
1,7
10 4
% T
ota
l Equitie
s $
1,6
04 -
11%
17%
$ 7
,600 1
5%
Instit
utio
nal C
lie
nt S
erv
ice
s –
Eq
uiti
es 2
018
ne
t rev
en
ue
s h
igh
er Y
oY
on s
ign
ific
an
tly h
ig
he
r e
qu
ities c
lien
t e
xec
uti
on n
et r
even
ues 4
Q1
8 n
et r
ev
en
ue
s in
crease
d Y
oY
am
id im
prove
d m
ark
et c
onditio
ns, h
igh
er le
ve
ls o
f vola
tility
and h
ighe
r c
lie
nt a
ctiv
ity —
Equ
ities c
lient e
xe
cuti
on n
et r
even
ues in
crea
se
d s
ignif
ican
tly v
ersus a
ch
alle
nging 4
Q17
, supp
ort
ed
by b
ette
r p
erfo
rm
an
ce
in c
ash p
rodu
cts —
Com
mis
sions a
nd f
ees in
crease
d d
riv
en b
y h
igh
er m
arke
t vo
lum
es; m
arket s
ha
re in
low
touch
imp
roved
— S
ec
uriti
es s
ervice
s n
et r
evenue
s d
ec
rea
se
d s
lightly
; avera
ge
cu
sto
mer b
ala
nc
es lo
we
r N
et R
eve
nue
s (
$ in
mill
ions) 8
Key H
ighli
ghts
Fin
anc
ial R
esults
2018 E
quiti
es N
et R
eve
nue
Mix
8 F
inan
cing ~
40%
Ma
rket In
term
ed
iatio
n ~
60%
1Q
17
2Q
17 3
Q17 4
Q17 1
Q18 2
Q18
3Q
18 4
Q1
8 5
52 6
87 5
84 223 1
,062 6
91 6
81 4
01
738 7
64 6
81 7
37 8
17 763 6
74
801 3
84 4
41 4
03 4
09
432 4
37
439 4
02 $
1,6
74 $
1,8
92 $
1,6
68 $
1,3
69 $
2,3
11 $
1,8
91
$1,7
94
$1,6
04
Equit
ies c
lie
nt e
xe
cu
tion C
om
mis
sio
ns a
nd
fee
s S
ec
uriti
es s
erv
ice
s
Inv
estin
g &
Le
ndin
g –
Equity
Sec
uriti
es F
inan
cia
l Re
sult
s K
ey H
ighlig
hts 2
018 net re
ve
nue
s d
ec
rea
se
d s
lightl
y Y
oY
as im
prove
d p
erfo
rman
ce
vs. v
s. v
s. f
ro
m p
riv
ate
eq
uity
in
ve
stm
en
ts la
rg
ely
offset n
et l
osse
s f
ro
m p
ub
lic $
in
millio
ns 4
Q1
8 3
Q1
8 4
Q1
7 2
01
8 2
017 i
nve
stm
ents 4
Q18 n
et re
ve
nue
s r
efl
ec
ted c
onti
nue
d s
tron
g r
esu
lts i
n p
riv
ate
equit
y E
quit
y s
ecu
ritie
s $
994 -
11%
-18%
$ 4
,455 -
3%
inv
estm
ents
, driv
en b
y c
om
pan
y-spe
cifi
c e
ve
nts
, inc
luding s
ale
s, a
nd c
orp
ora
te p
erform
anc
e —
Approxim
ate
ly o
ne-half
of th
e n
et r
eve
nue
s w
ere
ge
ne
rate
d f
rom
real e
sta
te, w
hic
h p
rim
ari
ly r
efl
ec
ted g
ain
s fr
om
sa
les N
et R
evenue
s (
$ i
n m
illio
ns) in
ve
stm
ents
, Ou
r glo
ba
l priv
ate
which and
are
public
div
ersif
ied e
quit
y a
cro
ss p
ortf
olio
ge
ograp
hy c
onsis
ts a
nd o
f o
ver in
vestm
ent 1
,00
0 v
in
tag
e a
nd
hav
e a
tota
l carry
ing
valu
e o
f $
21 b
illio
n $
1,3
91 $
1,2
81 —
In a
ddit
ion, o
ur c
on
soli
dated
inve
stm
en
t entit
ies h
ave a c
arr
ying $
1,1
80 $
1,2
09 v
alu
e o
f $
13 billi
on, s
ubsta
nti
ally
all o
f wh
ich
is r
ela
ted to
real 3
1%
$1,1
11 e
sta
te 9
$1,0
69 2
5%
40
% $994 E
quity
I&
L A
sse
t Mix
10,1
1 $
798 49%
30%
41%
$ in
billio
ns 4
Q18
$ in
billi
ons 4
Q1
8 5
2%
Corp
orate $
17 P
ublic
eq
uit
y $
1 4
2%
Re
al e
sta
te 4
Priv
ate e
quity
20 T
ota
l $ 2
1 T
ota
l $ 2
1 7
5%
69%
70
% 60%
59%
Vin
tag
e G
eogra
phic
51
% 5
8%
48%
201
1 o
r A
sia
201
5 –
31%
Present 4
7%
Ea
rlie
r 30%
Am
eric
as 1
Q17 2
Q1
7 3
Q17 4
Q1
7 1
Q18 2
Q18 3
Q18
4Q
18 5
3%
2012 –
Corpora
te R
ea
l Esta
te 2
01
4 E
ME
A 2
3%
16%
9
Record
net in
terest in
com
e i
n 2
018
of ~
$2.7 b
illio
n; 4
Q18 i
nclude
d ~
$800 m
illion o
f n
et in
tere
st
inc
om
e (
~$3
.2 b
illio
n ann
ual p
ace
) F
ra
nchis
e a
dja
ce
nt lo
an p
ortf
olio
that c
om
ple
me
nts
our c
urr
en
t pro
duc
t offerin
gs a
nd e
xpe
rtis
e A
s o
f 4
Q1
8, ~
85%
of to
tal l
oan
s w
ere
se
cured 2
018 a
nd 4
Q1
8 p
rovis
ion f
or c
redit lo
sse
s3 o
f $
67
4 m
illio
n a
nd
$222 m
illio
n, r
espec
tive
ly,
dri
ve
n p
rim
arily
by c
onsu
mer l
oa
n g
row
th N
et c
ha
rge
-off
ra
te 0.5
% f
or 2
018 I
nv
estin
g &
Le
ndin
g –
Debt S
ec
uriti
es a
nd
Loa
ns N
et R
eve
nue
s3 (
$ in
milli
ons) $
in m
illio
ns 4
Q18 v
s. 3
Q18 v
s. 4
Q17 2018 v
s. 2
017 D
ebt s
ecurit
ies a
nd lo
ans3 $
912
-1%
23%
$ 3
,79
5 4
3%
44
% 3
7%
75
% 5
6%
26
% 3
3%
15%
33
% 1
9%
30
% 1
0%
11
% 1
1%
$ i
n m
illio
ns 4
Q1
8 v
s. 3
Q1
8 v
s. 4
Q1
7 2
01
8 v
s. 2
01
7 M
an
ag
em
en
t an
d o
th
er f
ees $
1,3
65
-1%
— $
5,4
38 6
% I
nc
entiv
e f
ee
s 1
53 3
% 1
9%
83
0 9
9%
Tra
nsactio
n r
even
ue
s 1
86 7
% 1
3%
754 1
5%
Tota
l Inve
stm
en
t Ma
na
ge
me
nt $
1,7
04 —
2%
$ 7
,02
2 1
3%
In
ve
stm
en
t Mana
ge
ment F
inanc
ial R
esu
lts 4
Q18 A
US
Mix
7 A
sse
ts U
nd
er S
upe
rvis
ion7 $
in b
illio
ns 4
Q18 v
s. 3
Q18 v
s. 4
Q17 L
ong-te
rm A
US
$ 1
,145
-4%
— L
iqu
idit
y p
roduc
ts 3
97 1
1%
15
% T
ota
l AU
S $
1,5
42 -
1%
3%
Long-T
erm
AU
S N
et F
low
s7,1
2 (
$ in
billio
ns) R
ec
ord n
et r
even
ues in
201
8, d
riv
en b
y re
cord m
ana
gem
ent a
nd o
the
r fe
es, s
ignif
ican
tly h
ighe
r in
cen
tive
fee
s a
nd h
ighe
r tr
an
sa
cti
on r
even
ues A
US7 in
cre
ase
d $
48 b
illio
n in
201
8 t
o $
1.5
4 tr
illion —
Long-te
rm
ne
t infl
ow
s o
f $
37 b
illio
n, p
rim
arily
in f
ixe
d in
com
e a
nd e
quity
asse
ts —
Liq
uid
ity p
roduc
ts n
et in
flo
ws o
f $
52 b
illio
n —
Ne
t mark
et d
ep
re
ciatio
n o
f $
41
bill
ion, p
rim
arily
in e
quity
assets O
ve
r p
ast f
ive
ye
ars,
tota
l cum
ula
tive
orga
nic
lon
g-te
rm A
US n
et in
flo
ws o
f ~
$21
5 b
illio
n A
lte
rnativ
e in
ve
stm
ents
Eq
uity
L
iquid
ity p
roduc
ts F
ixe
d in
com
e T
hir
d p
arty
distr
ibuted
Hig
h-ne
t- w
orth
indiv
idua
ls I
nstitu
tio
na
l EM
EA
Am
eric
as A
sia
Pu
blic
funds S
epa
rate
acc
oun
ts P
riv
ate
funds a
nd o
the
r 11 A
sse
t Cla
ss D
istr
ibutio
n C
ha
nne
l Re
gion V
ehic
le 1
Q17 2
Q1
7 3
Q17 4
Q17 1
Q18
2Q
18 3
Q1
8 4
Q18 $
5 $
25 $
13 $
(1) $
13 $
8 $
13 $
3 K
ey H
ighlig
hts
Ex
pen
se
s F
ina
ncial R
esult
s3 K
ey H
ighlig
hts
vs. v
s. v
s. E
fficie
nc
y r
atio
13 s
table
YoY
as n
et r
eve
nue
grow
th f
und
ed
$ in
mill
ions 4
Q18 3
Q18
4Q
17 2
018 2
017
inve
stm
ents
in o
ur b
usin
esse
s C
om
pe
nsati
on a
nd b
ene
fits
$ 1,8
57 -
38%
-11
% $
12,3
28
6%
2018 o
pera
ting e
xpe
nse
s in
crea
se
d Y
oY
, inc
ludin
g: —
Highe
r c
om
pensa
tion a
nd b
enefits
expe
nse
s (
+$675 m
illio
n); u
p B
roke
rag
e, c
lea
ring, e
xchan
ge 830 1
6%
13%
3,2
00 1
1%
6%
, only h
alf
the
rate o
f n
et r
eve
nue
grow
th a
nd d
istr
ibutio
n f
ee
s —
Sig
nif
ican
tly h
ighe
r n
et p
rovis
ions f
or l
itiga
tio
n a
nd
re
gula
tory
Mark
et d
ev
elo
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en
t 20
8 2
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19
% 7
40
26
% p
ro
ce
ed
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gs (
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lion) —
Re
ve
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rec
ognitio
n sta
nda
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pac
t14
(+$29
7 m
illio
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Co
mm
unica
tions a
nd 2
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% 1
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tec
hnolo
gy —
Sub
sta
ntia
lly a
ll of th
e r
em
ain
ing in
crea
se
(+
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illio
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inve
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ents
to
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e g
row
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nclu
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arcus, c
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Dep
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BC
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ccu
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2018 e
ffe
ctiv
e ta
x r
ate
inc
lude
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$48
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illio
n ta
x b
ene
fit r
elated t
o th
e f
ina
liza
tion o
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t of T
ax L
egis
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n4
; 2019
effe
ctiv
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x r
ate e
xpe
cte
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ludin
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quity
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pe
nsa
tion
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d P
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ee
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iscre
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ms O
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2,8
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atio
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,150 -8
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% $23,4
61
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Pro
vis
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xes4 $
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-69%
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Effec
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ax R
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pp
2016 2
017 2
018 1
2
Capita
l Fin
anc
ial M
etr
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5 K
ey H
ighlig
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n b
illio
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xce
pt p
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mounts 4
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18 4
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Re
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s to
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-Tax L
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ve
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om
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arnings a
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educ
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rket R
WA
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rdiz
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RW
As $
548 $
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6 $
564
— D
ecre
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n c
red
it R
WA
s a
lso c
ontr
ibuted
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ase
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dardize
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ase
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ase
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atio
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n c
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atio
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se
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om
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k, f
or a
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l cost o
f $3.2
9 b
illi
on7 B
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07
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7.3
3 $
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0 T
BV
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4 $
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170
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dard
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Adv
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4Q
17 4
Q18 4
Q17 4
Q18 4Q
17 4
Q18
13
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et &
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ala
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e S
he
et A
llocati
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ey
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18 3
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ighly
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uid b
ala
nc
e s
hee
t and r
obu
st li
quid
ity m
etri
cs a
llo
w th
e $
in b
illio
ns f
irm
to c
apit
aliz
e o
n m
arket o
pportu
niti
es G
CL
A, s
egre
gate
d a
ssets
and o
ther $
313 $
28
2 $
285
— G
CL
A7 a
vera
ge
d $
229 billi
on11 fo
r 4
Q1
8 S
ec
ured
clie
nt f
ina
nc
ing 1
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61
164 W
ell-
div
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ed f
un
din
g m
ix a
cross te
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urren
cy,
cha
nne
l, str
uc
ture a
nd cou
nte
rparty
In
stit
utio
nal C
lient S
ervic
es 3
08 3
58 3
19
Benc
hm
ark m
atu
rit
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xpe
cted t
o o
utpac
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ench
ma
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su
anc
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Inve
stin
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ndin
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26
121 2
019, a
s d
eposits
grow
Othe
r asse
ts 3
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0 2
8 D
eposit
fundin
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wers o
ve
rall f
ina
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osts, a
dds d
ive
rsif
icati
on a
nd r
educ
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re
dit s
en
siti
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Tota
l asse
ts $
933 $
95
7 $
917
Sou
rce
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f F
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s o
f 4
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ec
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ha
reh
old
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ala
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he
et A
sse
ts1
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undin
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8%
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14%
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billio
ns 4
Q18 3Q
18 4
Q17
Cash a
nd c
ash e
quiv
alents $
130
$ 1
19 $
110 C
olla
teraliz
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agre
em
ents
276 2
98
312 R
ec
eiv
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s 1
60
159 1
51 D
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Fin
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str
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ned 3
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16
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nse
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erm
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To
tal a
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ts $
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7 $
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red S
hort-
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rm D
ebt 7
% 1
4
Cautio
nary N
ote o
n F
orw
ard-L
ooking S
tate
me
nts
Th
is p
re
se
nta
tion c
onta
ins “
forw
ard-lo
okin
g s
tate
me
nts
” w
ith
in t
he
me
an
ing o
f t
he s
afe
ha
rbor p
rovis
ions o
f t
he U
.S. P
riv
ate
Se
curitie
s L
itig
ati
on R
eform
Act o
f 1995. F
orw
ard-lo
okin
g s
tate
me
nts
are
not h
isto
rica
l fa
cts, b
ut in
stea
d r
epre
se
nt
only
the fi
rm’s b
elie
fs r
eg
ardin
g f
utu
re
ev
ents, m
any of w
hic
h, b
y t
heir n
atu
re, a
re in
he
rently
un
ce
rta
in a
nd o
uts
ide
of th
e f
irm
’s c
ontr
ol. I
t is p
ossib
le th
at th
e f
irm
’s a
ctua
l resu
lts a
nd fi
nan
cial
co
nditi
on m
ay d
iff
er, p
ossib
ly m
ate
rially
, from
the antic
ipa
ted r
esu
lts a
nd fi
nan
cial
con
diti
on in
dic
ate
d i
n th
ese
forw
ard-lo
okin
g s
tate
me
nts
. For a
dis
cussio
n o
f som
e o
f th
e r
isk
s a
nd im
porta
nt f
actors th
at c
ould
affe
ct th
e f
irm
’s f
utu
re
results
an
d fi
na
ncial c
onditi
on, s
ee
“R
isk
Fa
cto
rs”
in P
art I, I
tem
1A
of th
e f
irm
’s A
nnua
l Re
port
on F
orm
10-K
fo
r th
e y
ea
r end
ed D
ec
em
be
r 31
, 2017
. Info
rma
tion r
ega
rdin
g t
he
firm
’s c
apita
l ratio
s, r
isk-w
eighte
d a
sse
ts, s
upple
mentary l
eve
ra
ge r
atio
, tota
l assets
an
d b
ala
nce
sh
ee
t data
, glo
bal c
ore
liquid
assets, a
nd p
lanne
d 2
019 b
enc
hm
ark is
sua
nce
s c
onsis
ts o
f p
relim
inary e
stim
ate
s. T
he
se
estim
ate
s a
re
forw
ard-lo
okin
g s
tate
me
nts
and a
re
subje
ct to
cha
nge
, po
ssib
ly m
ate
ria
lly,
inc
luding a
s th
e f
irm
com
ple
tes its
fin
an
cial s
tate
me
nts
. Statem
ents a
bout
the
firm
’s e
xpe
cted
20
19 e
ffe
ctiv
e i
nco
me
tax r
ate c
onstitu
te f
orw
ard-lo
oking s
tatem
en
ts. T
he
se
sta
tem
en
ts a
re
sub
jec
t to th
e r
isk
tha
t the
fir
m’s 2019 e
ffe
ctiv
e i
nco
me
tax r
ate m
ay
dif
fer f
rom
the antic
ipa
ted r
ate i
ndic
ated
in th
ese
forw
ard
-lookin
g s
tate
me
nts
, possib
ly m
ate
rially
, due
to, a
mong o
the
r th
ing
s, c
han
ges in
the f
irm
’s e
arnin
gs m
ix, th
e f
irm
’s p
rofit
ab
ility a
nd
the
entit
ies in
wh
ich th
e f
irm
ge
ne
rates p
rofits
, the
assum
ptio
ns th
e f
irm
ha
s m
ad
e in
fore
castin
g its
expe
cte
d ta
x r
ate
, a
s w
ell
as g
uid
anc
e th
at m
ay b
e i
ssue
d b
y th
e U
.S. I
nterna
l Rev
enu
e S
erv
ice. S
tate
me
nts
abo
ut th
e f
irm
’s in
ve
stm
en
t ba
nkin
g tr
ansa
ctio
n b
ac
klo
g als
o m
ay c
onstitu
te f
orw
ard-lo
oking s
tatem
ents. S
uch
sta
tem
ents
are
subjec
t to th
e r
isk t
ha
t the
term
s o
f the
se tr
ansac
tions m
ay b
e m
odif
ied o
r that th
ey m
ay n
ot b
e c
om
pleted at
all
; there
fore
, the n
et r
eve
nue
s, if
any, t
hat th
e f
irm
ac
tua
lly e
arn
s f
rom
these tr
ansa
ctio
ns m
ay d
iff
er, p
ossib
ly m
ate
riall
y, f
rom
tho
se
cu
rre
ntl
y e
xpec
ted. I
mp
orta
nt f
actors
tha
t could
resu
lt in a
mo
dif
ica
tion o
f th
e te
rm
s o
f a tr
ansa
ctio
n o
r a tr
ansa
ctio
n not b
ein
g c
om
ple
ted
in
clude
, in t
he c
ase
of u
nderw
ritin
g tr
an
sac
tion
s, a
de
clin
e o
r c
ontin
ue
d w
ea
kne
ss in
ge
ne
ral
ec
onom
ic c
ond
itio
ns, o
utb
re
ak
of h
osti
litie
s, v
ola
tility
in th
e s
ecu
riti
es m
ark
ets g
enera
lly o
r a
n a
dv
erse
de
ve
lop
men
t with
resp
ec
t to th
e is
suer o
f th
e s
ec
uriti
es a
nd
, in th
e c
ase
of fi
nancial a
dv
iso
ry t
ransa
ctio
ns, a
de
cli
ne
in th
e s
ec
uriti
es m
ark
ets, a
n in
abil
ity t
o o
bta
in a
de
qua
te f
ina
nc
ing
, an
ad
ve
rse
de
velopm
ent w
ith r
espe
ct to
a p
arty
to
the
tra
nsa
ctio
n o
r a f
ailu
re
to o
bta
in a
req
uired r
egu
lato
ry a
pp
roval. F
or a
discu
ssio
n o
f o
ther im
porta
nt f
actors
tha
t cou
ld a
dverse
ly affec
t the
firm
’s in
vestm
ent b
an
kin
g tr
an
sa
ctio
ns, s
ee “
Ris
k F
acto
rs” i
n P
art I
, Ite
m 1
A o
f th
e f
irm
’s A
nn
ual R
eport o
n F
orm
10-K
for th
e y
ear e
nde
d D
ece
mb
er 3
1, 2
017. 1
5
Fo
otnote
s 1
. 2
019 e
stim
ate
d r
eal g
ross d
om
esti
c p
roduc
t (G
DP
) g
row
th a
nd 2
01
8 e
stim
ated
S&
P 500 I
nde
x e
arn
ings per s
hare
(E
PS
) g
row
th both
per G
oldm
an S
achs R
ese
arc
h. U
.S. c
red
it z
-sprea
ds p
er B
loom
be
rg. C
orpo
rate
confid
enc
e le
vel p
er D
uk
e F
uq
ua C
FO
surve
y. 2
. D
ea
logic – J
anua
ry 1
, 201
8 th
ro
ug
h D
ece
mb
er 3
1,
2018. 3
. The
follo
win
g r
eclassif
icatio
ns hav
e b
ee
n m
ade
to
prev
iously r
eporte
d a
mounts to
co
nfo
rm to
the c
urre
nt p
re
se
nta
tion
. Provisio
n fo
r c
red
it losse
s, p
re
vio
usly
re
porte
d in
oth
er
prin
cip
al tr
ansa
ctio
ns re
ve
nue
s (
and I
nve
sti
ng &
L
end
ing s
egm
en
t ne
t re
ven
ues), i
s n
ow
re
porte
d a
s a
sepa
rate
line i
tem
in th
e C
on
soli
dated
Sta
tem
ents o
f E
arn
ings. H
ea
dco
unt c
onsis
ts o
f th
e f
irm
’s e
mp
loye
es, a
nd e
xclude
s c
onsulta
nts
an
d t
em
porary s
taff
pre
vio
usly
re
porte
d a
s p
art o
f to
tal s
taff.
As a
re
su
lt, e
xpe
nse
s r
elated to
consulta
nts
and t
em
pora
ry s
taff p
revio
usly
re
porte
d i
n c
om
pe
nsa
tion
and b
ene
fits
expe
nse
s a
re n
ow
repo
rted in
profe
ssio
nal fe
es. R
egu
lato
ry-re
late
d f
ees th
at a
re p
aid
to
exc
han
ges, re
ported
in o
ther e
xpe
nses p
rio
r t
o 2
018, a
re
now
re
porte
d in
bro
kera
ge
, clea
rin
g,
excha
nge
and d
istr
ibutio
n f
ees. 4
. Durin
g th
e f
ourth
qu
arte
r o
f 2
017,
the
Tax
Cuts a
nd J
obs A
ct (
Tax L
egisla
tion
) w
as e
na
cte
d a
nd lo
we
red
U.S
. co
rpora
te in
co
me ta
x r
ate
s a
s o
f J
anua
ry 1
, 20
18, im
ple
me
nte
d a
terri
toria
l tax s
yste
m a
nd i
mpo
sed
a r
epa
tria
tion
tax
on d
ee
me
d r
ep
atri
ate
d e
arn
ings o
f fo
reig
n s
ubsidia
rie
s. T
he
estim
ated
im
pa
ct o
f T
ax L
egis
latio
n w
as a
n in
cre
ase
in in
com
e ta
x e
xpe
nse
of $
4.4
0 b
illio
n fo
r the fo
urt
h q
ua
rte
r of 2
017. E
xclu
din
g t
his
expe
nse, d
ilu
ted E
PS
was $
19.7
6, re
turn
on a
vera
ge
co
mm
on s
ha
reh
old
ers’ e
quity
(R
OE
) w
as 1
0.8
% a
nd r
etu
rn o
n a
ve
rag
e t
ang
ible
com
mon s
hare
hold
ers’ e
quity
(RO
TE
) w
as 1
1.4
% f
or 2
017, a
nd d
ilute
d E
PS w
as $
5.6
8 f
or th
e f
ourth
qua
rter o
f 2
01
7. I
n th
e f
ourth
quarter o
f 2
01
8, th
e f
irm
fin
aliz
ed t
his
esti
ma
te to
re
fle
ct t
he
imp
ac
t of u
pdated in
form
atio
n, in
clu
din
g s
ubse
que
nt g
uid
ance
issue
d b
y t
he U
.S. I
nterna
l Reve
nue
Service
, re
sulti
ng in
a $
467 m
illion in
com
e t
ax
ben
efit
($487 m
illio
n to
tal in
com
e t
ax b
ene
fit f
or 2
018). E
xc
luding th
is b
ene
fit, d
ilu
ted E
PS w
as $
24.0
2, R
OE
wa
s 1
2.7
% a
nd
RO
TE
wa
s 1
3.4
% f
or
2018, a
nd d
iluted E
PS
was $
4.8
3 fo
r t
he f
ou
rth q
ua
rte
r of 2
018. M
ana
ge
me
nt b
elie
ves th
at p
re
se
ntin
g th
e f
irm
’s r
esult
s e
xcludin
g T
ax
Legisla
tion is
mea
ning
ful a
s e
xc
luding th
is ite
m in
crea
se
s th
e c
om
para
bili
ty o
f p
erio
d-to-p
erio
d r
esu
lts. D
ilu
ted E
PS
an
d R
OE
, ex
clu
din
g th
e i
mpa
ct o
f T
ax L
egis
lati
on, a
re n
on-G
AA
P m
easure
s a
nd m
ay
not b
e c
om
para
ble
to s
imila
r non-G
AA
P m
ea
sure
s u
sed b
y o
ther c
om
pa
nies. T
he ta
ble
s b
elo
w p
rese
nt th
e c
alc
ula
tion
of n
et e
arnin
gs a
ppli
ca
ble
to c
om
mon
sha
reh
olde
rs, d
ilute
d E
PS
an
d a
vera
ge
com
mon s
ha
re
hold
ers’ e
quity
, ex
clud
ing th
e im
pact o
f T
ax L
egis
latio
n (
un
au
dite
d, in
m
illio
ns, e
xce
pt p
er s
ha
re
am
ounts): F
OR
TH
E T
HR
EE
MO
NT
HS
YE
AR
TH
RE
E M
ON
TH
S Y
EA
R E
ND
ED
EN
DE
D E
ND
ED
EN
DE
D D
EC
EM
BE
R 3
1, D
EC
EM
BE
R 3
1, D
EC
EM
BE
R 3
1, D
EC
EM
BE
R 3
1,
201
8 2
01
8 2
01
7 2
017
N
et
ea
rn
ing
s / (
loss)
app
licab
le to
com
mon s
hare
hold
ers, a
s r
eporte
d $
2,3
22 $
9,8
60 $
(2,1
43) $
3,6
85
Impa
ct o
f T
ax
Legisla
tion (
467) (
487
) 4
,400
4,4
00 N
et e
arnin
gs a
pplic
able
to c
om
mon
sha
reholde
rs, e
xc
ludin
g t
he
impa
ct o
f T
ax L
egis
latio
n $
1,8
55 $
9,3
73 $
2,2
57 $
8,0
85 D
ivid
ed b
y a
ve
ra
ge
dilu
ted c
om
mon
sha
res u
sed
in th
e c
alc
ula
tion
of d
ilute
d e
arnin
gs (
exc
ludin
g t
he
impa
ct o
f T
ax L
egis
latio
n) p
er c
om
mon s
ha
re 3
84.3
39
0.2
397
.4 4
09.1
Dilu
ted
ea
rnin
gs p
er c
om
mon sha
re, e
xc
luding th
e im
pa
ct o
f T
ax
Legisla
tion $
4.8
3 $
24.0
2 $
5.6
8 $
19.7
6 F
OR
TH
E T
HR
EE
MO
NT
HS
YE
AR
EN
DE
D E
ND
ED
DE
CE
MB
ER
31, D
EC
EM
BE
R 3
1, 2
017 2
017 A
ve
rag
e b
asic c
om
mon s
hare
s, a
s r
eporte
d 3
89.8 4
01.6
E
ffe
ct o
f d
ilutiv
e s
ecu
ritie
s 7
.6 7
.5 A
ve
ra
ge d
iluted com
mon
sha
res u
sed
in th
e c
alc
ula
tion
of d
ilute
d e
arn
ing
s (
ex
clu
din
g t
he
imp
ac
t of T
ax L
egis
latio
n) p
er c
om
mon s
ha
re 397.4
40
9.1
16
Fo
otnote
s (
conti
nue
d) A
VE
RA
GE
FO
R T
HE
YE
AR
EN
DE
D Y
EA
R E
ND
ED
DE
CE
MB
ER
31, 2
018 D
EC
EM
BE
R 3
1, 2
017 C
om
mon sha
reholde
rs’ e
quity
, as r
eporte
d $
73,9
85 $ 7
4,7
21 I
mpa
ct o
f T
ax L
egis
latio
n (
42
) 338 C
om
mon s
hare
hold
ers’ e
quit
y, e
xcludin
g th
e im
pact
of T
ax
Leg
isla
tion 7
3,9
43 7
5,0
59 G
ood
will
and
ide
nti
fiable in
tangible
asse
ts (
4,0
90
) (4
,065) T
angib
le co
mm
on
sha
reho
lde
rs’ e
qu
ity,
exc
ludin
g t
he im
pac
t of T
ax L
egisla
tion
$ 6
9,8
53 $
70,9
94 5
. RO
E i
s c
alculated
by d
ivid
ing n
et e
arnings (
or a
nnua
lize
d n
et
ea
rnin
gs f
or
ann
ualiz
ed
RO
E) a
ppli
ca
ble
to c
om
mo
n s
ha
reh
old
ers b
y ave
rag
e m
onthly
com
mon s
ha
reholders’ e
quity
. Ta
ngible
co
mm
on s
ha
re
hold
ers’ e
qu
ity is
ca
lcu
late
d a
s to
tal s
ha
reh
old
ers
’ eq
uity
less p
re
ferred sto
ck
, go
od
will
an
d id
en
tif
iab
le in
tang
ib
le a
sse
ts. R
OT
E is
ca
lcula
ted b
y d
ividin
g n
et e
arnin
gs (
or a
nnua
lize
d n
et e
arn
ings f
or a
nnu
ali
ze
d R
OT
E) a
pplic
able
to com
mon
sh
areho
lde
rs b
y a
ve
rage
month
ly ta
ngible
co
mm
on s
ha
rehold
ers’ e
quity
. Ta
ngib
le b
ook v
alu
e p
er c
om
mon s
hare
(T
BV
PS) i
s c
alculated by d
ivid
ing ta
ngib
le com
mon
sh
areho
lders’ e
quity
by b
asic
sh
are
s (
380.9
m
illio
n as of D
ec
em
be
r 3
1, 2
018, 3
82
.9 m
illio
n a
s o
f S
eptem
be
r 30, 2
01
8 a
nd 3
88
.9 m
illio
n a
s o
f D
ece
mb
er 3
1,
2017). M
ana
ge
me
nt
belie
ves th
at t
ang
ible
com
mon s
hare
hold
ers’ e
quit
y a
nd T
BV
PS
are
mea
nin
gful b
ec
au
se th
ey
are
mea
sure
s th
at
the f
irm
an
d i
nve
sto
rs u
se
to a
sse
ss ca
pit
al a
de
qu
ac
y a
nd t
hat R
OT
E i
s m
ea
nin
gfu
l be
cause i
t me
asure
s th
e p
erform
anc
e o
f b
usin
esses con
sis
tently
, whe
ther th
ey w
ere
ac
quire
d o
r dev
elo
ped
intern
ally
. Tan
gib
le c
om
mon s
ha
reholders’ e
quity
, RO
TE
and T
BV
PS
are
no
n-G
AA
P m
ea
su
re
s a
nd
may
no
t b
e c
om
pa
rab
le t
o s
imila
r n
on
-G
AA
P m
ea
su
re
s u
se
d b
y o
the
r c
om
pa
nies.
Th
e ta
ble
be
low
pre
se
nts
th
e fi
rm
’s a
ve
rage
total a
nd c
om
mon s
hare
hold
ers’ e
quit
y, a
s w
ell a
s a
rec
onc
ilia
tion
of to
tal
sha
reholders’ e
quity
to ta
ngib
le com
mon
sha
reho
lde
rs’ e
qu
ity (u
naud
ited, $
in
milli
on
s): A
VE
RA
GE
FO
R T
HE
T
HR
EE
MO
NT
HS E
ND
ED
YE
AR
EN
DE
D A
S O
F D
EC
EM
BE
R 3
1, 2
018 D
EC
EM
BE
R 3
1, 2
01
8 D
EC
EM
BE
R 3
1, 2
018 T
otal s
ha
reh
old
ers’ e
quity
$ 8
7,7
61 $
85
,238 $
90,1
85 Pre
ferred
sto
ck (
11,2
03) (
11,2
53
) (11
,203) C
om
mon s
hare
hold
ers’ e
quit
y 7
6,5
58 7
3,9
85 7
8,9
82 G
oodw
ill a
nd i
de
ntif
iable
inta
ng
ible a
sse
ts (4
,094) (
4,0
90) (
4,0
82) T
an
gib
le c
om
mon s
hare
hold
ers’ e
quit
y $
72,4
64 $
69
,895 $
74,9
00 6
. Co
nsis
ts o
f I
nve
stm
ent B
an
king n
et r
even
ues, c
om
missio
ns a
nd f
ees w
ith
in E
quit
ies, s
ecu
ritie
s s
ervic
es n
et r
ev
enu
es w
ithin E
quit
ies, n
et in
tere
st
inc
om
e w
ithin
de
bt
sec
urit
ies a
nd lo
ans, a
nd In
vestm
ent M
an
ag
em
ent n
et r
ev
enue
s. 7
. Fo
r inform
atio
n a
bo
ut th
e f
irm
’s in
ve
stm
en
t ba
nk
ing tr
ansactio
n b
ac
klo
g, a
ssets u
nder s
upe
rvis
ion
(A
US
), s
ha
re r
epu
rch
ase
prog
ra
m a
nd
glo
ba
l core
liquid
asse
ts (
GC
LA
), see
“R
esults
of O
pe
ratio
ns –
Inve
stm
en
t B
ankin
g,”
“R
esu
lts o
f O
peratio
ns –
Inv
estm
ent M
ana
ge
me
nt,”
“E
qu
ity
Ca
pita
l Ma
nag
em
en
t an
d R
eg
ula
tory C
ap
ita
l – E
qu
ity C
ap
ital M
anage
me
nt”
and “
Risk M
ana
ge
me
nt –
L
iqu
idity
Ris
k M
anag
em
en
t,” re
spe
ctiv
ely
, in P
art I, I
tem
2 “
Ma
nag
em
ent’s D
isc
ussio
n a
nd A
naly
sis
of F
inan
cia
l Cond
itio
n a
nd R
esult
s o
f O
pe
rati
ons”
in t
he
firm
’s Q
ua
rte
rly R
eport o
n F
orm
10-Q
for th
e p
erio
d e
nd
ed S
epte
mbe
r 3
0, 2
018. F
or in
form
atio
n a
bout t
he fi
rm’s r
isk-ba
sed
cap
ital r
atio
s a
nd
sup
plem
en
tary
lev
era
ge ra
tio, s
ee N
ote
20 “
Re
gula
tion a
nd C
apita
l Adequa
cy
” i
n P
art I
, Ite
m 1
“F
inanc
ial S
tate
me
nts
(U
na
udite
d)”
in th
e f
irm
’s Q
ua
rte
rly R
eport o
n F
orm
10-Q
fo
r th
e p
erio
d e
nde
d S
epte
mber 3
0, 2
018. 8
. Fin
anc
ing
in F
IC
C in
clu
de
s n
et r
eve
nue
s p
rim
aril
y f
rom
sh
ort
-term
repu
rcha
se
ag
ree
me
nt a
ctiv
itie
s. F
ina
nc
ing i
n E
quitie
s in
clu
des n
et r
eve
nue
s f
rom
prim
e b
roke
rag
e a
nd o
the
r finan
cin
g a
cti
viti
es, in
clu
ding s
ec
uritie
s l
end
ing, m
argin
lendin
g a
nd s
wa
ps. 1
7
Fo
otnote
s (
conti
nue
d) 9
. Include
s c
onsolid
ate
d in
vestm
ent e
nti
ty a
sse
ts re
porte
d i
n “
Othe
r Assets”
on th
e c
onso
lida
ted s
tatem
en
ts o
f f
ina
ncia
l co
nditio
n, s
ub
stan
tia
lly a
ll o
f w
hic
h r
elate t
o e
ntit
ies e
ng
ag
ed
in
rea
l estate
inv
estm
en
t a
ctiv
ities. T
hese a
sse
ts a
re
ge
nera
lly a
cc
ou
nte
d f
or a
t his
toric
al c
ost l
ess d
epre
cia
tion
. Th
ese en
titie
s a
re
fun
de
d w
ith ap
pro
xim
ate
ly $
6 b
illio
n o
f n
on-rec
ourse
de
bt. 1
0. I
n a
dditi
on to
prepa
rin
g th
e fi
rm
’s c
onsolid
ate
d s
tate
ments o
f f
ina
nc
ial c
ondit
ion i
n a
cc
ord
ance
wit
h U
.S. G
AA
P, t
he
firm
pre
pare
s a
ba
lance
she
et th
at g
en
era
lly a
lloca
tes a
sse
ts to
the f
irm
’s b
usinesses, w
hic
h is
a n
on
-G
AA
P p
rese
nta
tion a
nd
ma
y n
ot b
e c
om
pa
rab
le to
sim
ilar n
on
-GA
AP
pre
se
nta
tion
s u
se
d b
y oth
er c
om
pa
nie
s. T
he
fir
m b
elie
ves th
at p
re
se
ntin
g th
e f
irm
’s a
ssets
on th
is b
asis
is m
ea
nin
gfu
l be
ca
use
it is
consiste
nt w
ith
the w
ay m
an
age
me
nt v
iew
s a
nd m
ana
ge
s r
isk
s a
ssocia
ted w
ith th
e f
irm
’s a
sse
ts a
nd bette
r enable
s i
nve
sto
rs t
o a
sse
ss th
e li
quid
ity o
f t
he f
irm
’s a
sse
ts. F
or m
ore
inform
ati
on a
bout th
e f
irm
’s b
ala
nc
e s
he
et
all
oc
atio
n, s
ee
“B
ala
nce
She
et a
nd
Fun
din
g S
ourc
es—
Ba
lanc
e S
he
et A
lloca
tion”
in P
art I, I
tem
2 “
Manag
em
en
t’s D
isc
ussio
n a
nd A
naly
sis
of F
ina
nc
ial C
onditio
n a
nd R
esult
s o
f O
pe
rati
ons”
in th
e fi
rm
’s Q
ua
rte
rly R
eport o
n F
orm
10-Q
for th
e p
erio
d e
nde
d S
epte
mbe
r 3
0, 2
018. T
he
table
s b
elo
w p
rese
nts th
e r
ec
onc
ilia
tions o
f th
e b
ala
nc
e s
hee
t allo
ca
tion to
the fi
rm’s b
usin
esse
s to
the
firm
’s U
.S. G
AA
P b
alanc
e s
he
et (
una
udite
d, $
in b
illio
ns): G
CL
A, S
ec
ured
In
stit
utio
nal
Se
greg
ated A
sse
ts a
nd O
ther C
lient F
ina
nc
ing C
lient S
ervic
es I
nve
stin
g &
Le
nding T
otal A
s o
f D
ec
em
be
r 3
1, 2
018 C
ash
an
d c
ash equ
iva
lents
$ 130 $
– $
– $
– $
130 C
olla
tera
lized
agre
em
ents
98 1
17 6
1 –
276 R
ece
iva
bles – 3
0 4
2 88 1
60 Fin
anc
ial i
nstr
um
en
ts o
wne
d 8
5 –
205 4
6 3
36 S
ubtota
l $ 3
13 $
14
7 $
308 $ 1
34 $
902 O
ther a
sse
ts 3
1 T
ota
l asse
ts $
933 G
CL
A, S
ec
ure
d I
nsti
tuti
ona
l Se
gre
ga
ted A
sse
ts a
nd O
the
r Clie
nt F
inan
cin
g C
lie
nt S
ervice
s I
nve
sti
ng &
Len
din
g T
ota
l As o
f S
ep
tem
be
r 3
0, 2
01
8 C
ash a
nd c
ash e
quivalents $
11
9 $
– $
– $
– $
119 C
olla
teraliz
ed a
gre
em
en
ts 1
01
128 6
9 –
298 R
ece
iva
ble
s –
33 4
5 8
1 1
59 F
ina
nc
ial in
str
um
ents o
wne
d 6
2 –
244 4
5 3
51 S
ubtota
l $ 2
82 $
161
$ 3
58 $
126 $
927 O
the
r a
sse
ts 3
0 T
ota
l asse
ts $
957 G
CL
A, S
ec
ure
d I
nstit
utio
nal S
egre
ga
ted
Asse
ts a
nd O
ther C
lient
Fin
anc
ing C
lie
nt S
ervic
es I
nve
sti
ng &
L
end
ing T
otal A
s o
f D
ece
mb
er 3
1, 2
017 C
ash a
nd c
ash
eq
uiv
ale
nts
$
110
$ –
$ –
$ –
$ 1
10
Coll
atera
lize
d a
gre
em
ents
12
2 1
24
65 1
312 R
ec
eiva
ble
s –
40 3
7 7
4 1
51 F
ina
ncial in
stru
me
nts
ow
ned
53
– 2
17
46 3
16 S
ubto
tal
$ 2
85 $
164
$ 3
19
$ 1
21
$ 8
89 O
the
r assets 2
8 T
otal a
ssets $
91
7 1
1. R
ep
rese
nts
a p
reli
min
ary e
stim
ate
and
ma
y b
e r
evise
d in
th
e fi
rm’s A
nnu
al R
eport o
n F
orm
10-K
for t
he
yea
r e
nde
d D
ec
em
be
r 3
1, 2
018. 1
2. 1
Q17
includ
es $
5 b
illi
on o
f o
utfl
ow
s in
con
nec
tio
n w
ith
the
div
estitu
re
of th
e f
irm
’s l
oc
al
Austr
alia
n-fo
cu
sed
inv
estm
ent c
ap
abilit
ies a
nd
fun
d p
latfo
rm
. 2Q
17 i
nclu
de
s $
20
bill
ion o
f inflo
ws i
n c
onne
ctio
n w
ith
the
ac
qu
isitio
n o
f a
po
rtio
n o
f Ve
rus I
nve
stors’ o
uts
ource
d c
hie
f in
ve
stm
ent o
ffic
er b
usin
ess. 1
8
Fo
otnote
s (
conti
nue
d) 1
3. E
ffic
iency
rati
o is
ca
lcula
ted b
y d
ivid
ing to
tal o
pe
rati
ng e
xpe
nse
s b
y t
ota
l ne
t re
ve
nue
s. 1
4. I
n t
he fi
rst q
ua
rte
r of
2018, t
he f
irm
ad
opte
d A
SU
No
. 201
4-09, “
Re
ve
nue f
rom
Contr
acts w
ith C
ustom
ers (
Topic 6
06),”
which
require
d a
change
in th
e p
re
se
nta
tion o
f c
erta
in c
osts f
rom
a n
et p
rese
nta
tion
with
in r
ev
enu
es t
o a
gross b
asis a
nd v
ice
ve
rsa. F
or in
fo
rm
atio
n a
bout A
SU
No
. 2014-09
, se
e N
ote 3
“S
ign
ific
ant A
cc
oun
ting P
olic
ies” i
n P
art I
, Ite
m 1
“F
ina
nc
ial S
tate
ments
(U
na
udite
d)”
in th
e f
irm
’s Q
ua
rte
rly R
eport o
n F
orm
10-Q
for th
e p
erio
d e
nd
ed S
epte
mbe
r 3
0, 2
018. 1
5. A
s o
f D
ece
mbe
r 3
1, 2
017, t
he f
irm
’s c
ap
ita
l r
ati
os o
n a
fully
phase
d-in
basis w
ere
no
n-G
AA
P m
ea
sures a
nd m
ay n
ot b
e c
om
pa
ra
ble
to s
im
ilar n
on-G
AA
P m
ea
sures u
se
d b
y o
ther c
om
pa
nie
s. M
an
age
ment b
elie
ve
s th
at t
he f
irm
’s c
apita
l r
ati
os o
n a
fully
pha
se
d-in
basis a
re m
ea
nin
gful b
ec
ause t
hey
are
me
asures th
at th
e f
irm
and
inve
sto
rs u
se
to a
sse
ss ca
pit
al
ade
qua
cy. T
he
table
be
low
pre
sents
reconc
iliati
ons, f
or b
oth
the
Sta
nda
rdiz
ed app
roac
h a
nd th
e B
asel II
I A
dva
nc
ed a
pproac
h, o
f com
mon e
quity
tie
r 1
and
risk
-w
eighte
d a
sse
ts o
n a
tran
siti
ona
l ba
sis
to
a f
ully
phased
-in b
asis
as o
f De
cem
be
r 31
, 2017
(unau
dite
d, $
in
bil
lion
s): A
S O
F D
EC
EM
BE
R 3
1, 2
017 ST
AN
DA
RD
IZ
ED
BA
SE
L I
II A
DV
AN
CE
D C
om
mo
n e
quity
tier 1
, tra
nsit
ion
al b
asis $
67
.1 $
67
.1 T
ran
sitio
nal a
dju
stm
ents
(0
.1) (
0.1
) C
om
mo
n e
quity
tier 1
, fu
lly
pha
se
d-in
basis $
67
.0 $
67
.0 R
isk
-w
eighte
d a
sse
ts, t
ransitio
nal b
asis
$ 556 $
618 T
ran
siti
ona
l adju
stm
ents
8 8
Ris
k-w
eig
hted a
ssets
, fully
phased
-in b
asis
$ 5
64 $
626 C
om
mon e
quit
y tie
r 1
ratio
, tra
nsitio
nal b
asis
12
.1%
10.9
% C
om
mon e
quit
y tie
r 1
ra
tio, f
ully
ph
ase
d-in
basis
11.9%
10.7
% 1
9
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