2022-10-k.pdf

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2022 Commission File Number: 001-14965

The Goldman Sachs Group, Inc.

(Exact name of registrant as specified in its charter)

Delaware 13-4019460

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

200 West Street, New York, NY 10282

(Address of principal executive offices) (Zip Code)

(212) 902-1000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol

Exchange

on which

registered

Common stock, par value $.01 per share GS NYSE

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

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

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

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

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

5.793% Fixed-to-Floating Rate Normal Automatic Preferred Enhanced Capital Securities of Goldman Sachs Capital II GS/43PE NYSE

Floating Rate Normal Automatic Preferred Enhanced Capital Securities of Goldman Sachs Capital III GS/43PF NYSE

Medium-Term Notes, Series F, Callable Fixed and Floating Rate Notes due March 2031 of GS Finance Corp. GS/31B NYSE

Medium-Term Notes, Series F, Callable Fixed and Floating Rate Notes due May 2031 of GS Finance Corp. GS/31X NYSE

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☐ Yes ☒ No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. ☐ Yes ☒ No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the

preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90

days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T

(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth

company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the

Exchange Act.

Large accelerated filer ☒

Accelerated filer ☐

Non-accelerated filer ☐

Smaller reporting company ☐

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised

financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial

reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the

correction of an error to previously issued financial statements. ☐ Indicate by check mark whether any of those error corrections are restatements that required a recovery

analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to § 240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

As of June 30, 2022, the aggregate market value of the common stock of the registrant held by non-affiliates of the registrant was approximately $101.1billion.

As of February10, 2023, there were 335,423,289 shares of the registrant’s common stock outstanding.

Documents incorporated by reference: Portions of The Goldman Sachs Group, Inc.’s Proxy Statement for its 2023 Annual Meeting of Shareholders are incorporated by

reference in the Annual Report on Form 10-K in response to Part III, Items 10, 11, 12, 13 and 14.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER31, 2022

INDEX

Form 10-K Item Number Page No.

PART I

Item 1

Business

Introduction 1

Our Business Segments 1

Global Banking & Markets 2

Asset & Wealth Management 4

Platform Solutions 5

Business Continuity and Information Security 5

Human Capital Management 6

Sustainability 8

Competition 9

Regulation 10

Information about our Executive Officers 24

Available Information 25

Forward-Looking Statements 25

Item 1A

Risk Factors 28

Item 1B

Unresolved Staff Comments 55

Item 2

Properties 55

Item 3

Legal Proceedings 55

Item 4

Mine Safety Disclosures 55

PART II

Item 5

Market for Registrant's Common Equity, Related Stockholder

Matters and Issuer Purchases of Equity Securities 56

Page No.

Item 7

Management’s Discussion and Analysis of Financial Condition

and Results of Operations

Introduction

Executive Overview

Business Environment

Critical Accounting Policies

Use of Estimates

Recent Accounting Developments

Results of Operations

Balance Sheet and Funding Sources

Capital Management and Regulatory Capital

Regulatory and Other Matters

Off-Balance Sheet Arrangements

Risk Management

Overview and Structure of Risk Management

Liquidity Risk Management

Market Risk Management

101

Credit Risk Management

106

Operational Risk Management

115

Model Risk Management

116

Other Risk Management

117

Item 7A

Quantitative and Qualitative Disclosures About Market Risk 119

Goldman Sachs 2022 Form 10-K

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

INDEX

Page No.

Item 8

Financial Statements and Supplementary Data 119

Management’s Report on Internal Control over Financial Reporting 119

Report of Independent Registered Public Accounting Firm 120

Consolidated Financial Statements 123

Consolidated Statements of Earnings 123

Consolidated Statements of Comprehensive Income 123

Consolidated Balance Sheets 124

Consolidated Statements of Changes in Shareholders’ Equity 125

Consolidated Statements of Cash Flows 126

Notes to Consolidated Financial Statements 127

Note 1. Description of Business 127

Note 2. Basis of Presentation 127

Note 3. Significant Accounting Policies 128

Note 4. Fair Value Measurements 133

Note 5. Fair Value Hierarchy 138

Note 6. Trading Assets and Liabilities 151

Note 7. Derivatives and Hedging Activities 152

Note 8. Investments 158

Note 9. Loans 161

Note 10. Fair Value Option 170

Note 11. Collateralized Agreements and Financings 172

Note 12. Other Assets 176

Note 13. Deposits 179

Note 14. Unsecured Borrowings 180

Note 15. Other Liabilities 182

Note 16. Securitization Activities 183

Note 17. Variable Interest Entities 185

Note 18. Commitments, Contingencies and Guarantees 188

Note 19. Shareholders’ Equity 192

Note 20. Regulation and Capital Adequacy 195

Note 21. Earnings Per Common Share 204

Note 22. Transactions with Affiliated Funds 204

Note 23. Interest Income and Interest Expense 205

Note 24. Income Taxes 205

Note 25. Business Segments 208

Note 26. Credit Concentrations 210

Note 27. Legal Proceedings 210

Note 28. Employee Benefit Plans 223

Note 29. Employee Incentive Plans 224

Note 30. Parent Company 226

Page No.

Supplemental Financial Information 228

Common Stock Performance 228

Statistical Disclosures 228

Item 9

Changes in and Disagreements with Accountants on Accounting

and Financial Disclosure 232

Item 9A

Controls and Procedures

232

Item 9B

Other Information 232

Item 9C

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 232

PART III

232

Item 10

Directors, Executive Officers and Corporate Governance

232

Item 11

Executive Compensation

232

Item 12

Security Ownership of Certain Beneficial Owners and

Management and Related Stockholder Matters 233

Item 13

Certain Relationships and Related Transactions, and Director

Independence 233

Item 14

Principal Accountant Fees and Services 233

PART IV

233

Item 15

Exhibit and Financial Statement Schedules 233

SIGNATURES

238

Goldman Sachs 2022 Form 10-K

PART I

Item 1. Business

Introduction

Goldman Sachs is a leading global financial institution that

delivers a broad range of financial services to a large and

diversified client base that includes corporations, financial

institutions, governments and individuals. Our purpose is to

advance sustainable economic growth and financial

opportunity. Our goal, reflected in our One Goldman Sachs

initiative, is to deliver the full range of our services and

expertise to support our clients in a more accessible,

comprehensive and efficient manner, across businesses and

product areas.

When we use the terms “Goldman Sachs,” “we,” “us” and

“our,” we mean The Goldman Sachs Group, Inc. (Group Inc.

or parent company), a Delaware corporation, and its

consolidated subsidiaries. When we use the term “our

subsidiaries,” we mean the consolidated subsidiaries of

Group Inc. References to “this Form 10-K” are to our Annual

Report on Form 10-K for the year ended December 31, 2022.

All references to 2022, 2021 and 2020 refer to our years

ended, or the dates, as the context requires, December 31,

2022, December 31, 2021 and December 31, 2020,

respectively.

Group Inc. is a bank holding company (BHC) and a financial

holding company (FHC) regulated by the Board of Governors

of the Federal Reserve System (FRB). Our U.S. depository

institution subsidiary, Goldman Sachs Bank USA (GS Bank

USA), is a New York State-chartered bank.

Our Business Segments

We manage and report our activities in three business

segments: Global Banking & Markets, Asset & Wealth

Management and Platform Solutions. Global Banking &

Markets generates revenues from investment banking fees,

including advisory, and equity and debt underwriting fees,

Fixed Income, Currency and Commodities (FICC)

intermediation and financing activities and Equities

intermediation and financing activities, as well as

relationship lending and acquisition financing (and related

hedges) and investing activities related to our Global Banking

& Markets activities. Asset & Wealth Management generates

revenues from management and other fees, incentive fees,

private banking and lending, equity investments and debt

investments. Platform Solutions generates revenues from

consumer platforms, and transaction banking and other

platform businesses.

The chart below presents our three business segments and

their revenue sources.

Prior to the fourth quarter of 2022, we managed and reported

our activities in the following four business segments:

Investment Banking, Global Markets, Asset Management

and Consumer & Wealth Management. Beginning with the

fourth quarter of 2022, consistent with our previously

announced organizational changes, we began managing and

reporting our activities in three new segments: Global

Banking & Markets, Asset & Wealth Management and

Platform Solutions. Our new segments reflect the following

primary changes:

• Global Banking & Markets is a new segment that includes

the results previously reported in Investment Banking and

Global Markets, and additionally includes the results from

equity and debt investments related to our Global Banking

& Markets activities, previously reported in Asset

Management.

• Asset & Wealth Management is a new segment that

includes the results previously reported in Asset

Management and Wealth Management (previously

included in Consumer & Wealth Management), and

additionally includes the results from our direct-to-

consumer banking business, which includes lending,

deposit-taking and investing, previously reported in

Consumer & Wealth Management, as well as the results

from middle-market lending related to our asset

management activities, previously reported in Investment

Banking.

• Platform Solutions is a new segment that includes the

results from our consumer platforms, such as partnerships

offering credit cards and point-of-sale financing, previously

reported in Consumer & Wealth Management, and the

results from our transaction banking business, previously

reported in Investment Banking.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Goldman Sachs 2022 Form 10-K 1

Global Banking & Markets

Global Banking & Markets serves public and private sector

clients and we seek to develop and maintain long-term

relationships with a diverse global group of institutional

clients, including corporations, governments, states and

municipalities. Our goal is to deliver to our institutional

clients all of our resources in a seamless fashion, with our

advisory and underwriting activities serving as the main

initial point of contact. We make markets and facilitate client

transactions in fixed income, currency, commodity and

equity products and offer market expertise on a global basis.

In addition, we make markets in, and clear client transactions

on, major stock, options and futures exchanges worldwide.

Our clients include companies that raise capital and funding

to grow and strengthen their businesses, and engage in

mergers and acquisitions, divestitures, corporate defense,

restructurings and spin-offs, as well as companies that are

professional market participants, who buy and sell financial

products and manage risk, and investment entities whose

ultimate clients include individual investors investing for

their retirement, buying insurance or saving surplus cash.

As a market maker, we provide prices to clients globally

across thousands of products in all major asset classes and

markets. At times, we take the other side of transactions

ourselves if a buyer or seller is not readily available, and at

other times we connect our clients to other parties who want

to transact. Our willingness to make markets, commit capital

and take risk in a broad range of products is crucial to our

client relationships. Market makers provide liquidity and

play a critical role in price discovery, which contributes to the

overall efficiency of the capital markets. In connection with

our market-making activities, we maintain (i) market-making

positions, typically for a short period of time, in response to,

or in anticipation of, client demand, and (ii) positions to

actively manage our risk exposures that arise from these

market-making activities (collectively, inventory).

We execute a high volume of transactions for our clients in

large, highly liquid markets (such as markets for U.S.

Treasury securities, stocks and certain agency mortgage pass-

through securities). We also execute transactions for our

clients in less liquid markets (such as mid-cap corporate

bonds, emerging market currencies and certain non-agency

mortgage-backed securities) for spreads and fees that are

generally somewhat larger than those charged in more liquid

markets. Additionally, we structure and execute transactions

involving customized or tailor-made products that address

our clients’ risk exposures, investment objectives or other

complex needs, as well as derivative transactions related to

client advisory and underwriting activities.

Through our global sales force, we maintain relationships

with our clients, receiving orders and distributing investment

research, trading ideas, market information and analysis.

Much of this connectivity between us and our clients is

maintained on technology platforms, including Marquee, and

operates globally where markets are open for trading.

Marquee provides institutional investors with market

intelligence, risk analytics, proprietary datasets and trade

execution across multiple asset classes.

Our businesses are supported by our Global Investment

Research business, which, as of December 2022, provided

fundamental research on approximately 3,000 companies

worldwide and on approximately 50 national economies, as

well as on industries, currencies and commodities.

Our activities are organized by asset class and include both

“cash” and “derivative” instruments. “Cash” refers to trading

the underlying instrument (such as a stock, bond or barrel of

oil). “Derivative” refers to instruments that derive their value

from underlying asset prices, indices, reference rates and

other inputs, or a combination of these factors (such as an

option, which is the right or obligation to buy or sell a certain

bond, stock or other asset on a specified date in the future at

a certain price, or an interest rate swap, which is the

agreement to convert a fixed rate of interest into a floating

rate or vice versa).

Global Banking & Markets generates revenues from the

following:

Investment banking fees. We provide advisory and

underwriting services to our clients.

Investment banking fees includes the following:

• Advisory. We have been a leader for many years in

providing advisory services, including strategic advisory

assignments with respect to mergers and acquisitions,

divestitures, corporate defense activities, restructurings and

spin-offs. In particular, we help clients execute large,

complex transactions for which we provide multiple

services, including cross-border structuring expertise. We

also assist our clients in managing their asset and liability

exposures and their capital.

• Underwriting. We help companies raise capital to fund

their businesses. As a financial intermediary, our job is to

match the capital of our investing clients, who aim to grow

the savings of millions of people, with the needs of our

public and private sector clients, who need financing to

generate growth, create jobs and deliver products and

services. Our underwriting activities include public

offerings and private placements of a wide range of

securities and other financial instruments, including local

and cross-border transactions and acquisition financing.

Underwriting consists of the following:

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Goldman Sachs 2022 Form 10-K

Equity underwriting. We underwrite common stock,

preferred stock, convertible securities and exchangeable

securities. We regularly receive mandates for large,

complex transactions and have held a leading position in

worldwide public common stock offerings and worldwide

initial public offerings for many years.

Debt underwriting. We originate and underwrite various

types of debt instruments, including investment-grade and

high-yield debt, bank and bridge loans, including in

connection with acquisition financing, and emerging- and

growth-market debt, which may be issued by, among

others, corporate, sovereign, municipal and agency issuers.

In addition, we underwrite and originate structured

securities, which include mortgage-related securities and

other asset-backed securities.

FICC. FICC generates revenues from intermediation and

financing activities.

• FICC intermediation. Includes client execution activities

related to making markets in both cash and derivative

instruments, as detailed below.

Interest Rate Products. Government bonds (including

inflation-linked securities) across maturities, other

government-backed securities, and interest rate swaps,

options and other derivatives.

Credit Products. Investment-grade and high-yield

corporate securities, credit derivatives, exchange-traded

funds (ETFs), bank and bridge loans, municipal securities,

distressed debt and trade claims.

Mortgages. Commercial mortgage-related securities,

loans and derivatives, residential mortgage-related

securities, loans and derivatives (including U.S. government

agency-issued collateralized mortgage obligations and

other securities and loans), and other asset-backed

securities, loans and derivatives.

Currencies. Currency options, spot/forwards and other

derivatives on G-10 currencies and emerging-market

products.

Commodities. Commodity derivatives and, to a lesser

extent, physical commodities, involving crude oil and

petroleum products, natural gas, agricultural, base,

precious and other metals, electricity, including renewable

power, environmental products and other commodity

products.

• FICC financing. Includes secured lending to our clients

through structured credit and asset-backed lending,

including warehouse loans backed by mortgages (including

residential and commercial mortgage loans), corporate

loans and consumer loans (including auto loans and private

student loans). We also provide financing to clients

through securities purchased under agreements to resell

(resale agreements).

Equities. Equities generates revenues from intermediation

and financing activities.

• Equities intermediation. We make markets in equity

securities and equity-related products, including ETFs,

convertible securities, options, futures and over-the-

counter (OTC) derivative instruments. As a principal, we

facilitate client transactions by providing liquidity to our

clients, including by transacting in large blocks of stocks or

derivatives, requiring the commitment of our capital.

We also structure and make markets in derivatives on

indices, industry sectors, financial measures and individual

company stocks. We develop strategies and provide

information about portfolio hedging and restructuring and

asset allocation transactions for our clients. We also work

with our clients to create specially tailored instruments to

enable sophisticated investors to establish or liquidate

investment positions or undertake hedging strategies. We

are one of the leading participants in the trading and

development of equity derivative instruments.

Our exchange-based market-making activities include

making markets in stocks and ETFs, futures and options on

major exchanges worldwide.

We generate commissions and fees from executing and

clearing institutional client transactions on major stock,

options and futures exchanges worldwide, as well as OTC

transactions. We provide our clients with access to a broad

spectrum of equity execution services, including electronic

“low-touch” access and more complex “high-touch”

execution through both traditional and electronic

platforms, including Marquee.

• Equities financing. Includes prime brokerage and other

equities financing activities, including securities lending,

margin lending and swaps.

We earn fees by providing clearing, settlement and custody

services globally. In addition, we provide our hedge fund

and other clients with a technology platform and reporting

that enables them to monitor their security portfolios and

manage risk exposures.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Goldman Sachs 2022 Form 10-K 3

We provide services that principally involve borrowing and

lending securities to cover institutional clients’ short sales

and borrowing securities to cover our short sales and to

make deliveries into the market. In addition, we are an

active participant in broker-to-broker securities lending

and third-party agency lending activities.

We provide financing to our clients for their securities

trading activities through margin loans that are

collateralized by securities, cash or other acceptable

collateral. We earn a spread equal to the difference between

the amount we pay for funds and the amount we receive

from our client.

We execute swap transactions to provide our clients with

exposure to securities and indices.

We also provide securities-based loans to individuals.

Other. We lend to corporate clients, including through

relationship lending and acquisition financing. The hedges

related to this lending and financing activity are also reported

as part of Other. Other also includes equity and debt

investing activities related to our Global Banking & Markets

activities.

Asset & Wealth Management

Asset & Wealth Management provides investment services to

help clients preserve and grow their financial assets and

achieve their financial goals. We provide these services to our

clients, both institutional and individuals, including investors

who primarily access our products through a network of

third-party distributors around the world.

We manage client assets across a broad range of investment

strategies and asset classes, including equity, fixed income

and alternative investments. Alternative investments

primarily includes hedge funds, credit funds, private equity,

real estate, currencies, commodities and asset allocation

strategies. Our investment offerings include those managed

on a fiduciary basis by our portfolio managers, as well as

those managed by third-party managers. We offer our

investment solutions in a variety of structures, including

separately managed accounts, mutual funds, private

partnerships and other commingled vehicles.

We also provide customized investment advisory solutions

designed to address our clients’ investment needs. These

solutions begin with identifying clients’ objectives and

continue through portfolio construction, ongoing asset

allocation and risk management and investment realization.

We draw from a variety of third-party managers, as well as

our proprietary offerings, to implement solutions for clients.

We provide tailored wealth advisory services to clients across

the wealth spectrum. We operate globally serving individuals,

families, family offices, and foundations and endowments.

Our relationships are established directly or introduced

through companies that sponsor financial wellness programs

for their employees.

We offer personalized financial planning to individuals

inclusive of income and liability management, compensation

and benefits analysis, trust and estate structuring, tax

optimization, philanthropic giving, and asset protection. We

also provide customized investment advisory solutions, and

offer structuring and execution capabilities in securities and

derivative products across all major global markets. We

leverage a broad, open-architecture investment platform and

our global execution capabilities to help clients achieve their

investment goals. In addition, we offer clients a full range of

private banking services, including a variety of deposit

alternatives and loans that our clients use to finance

investments in both financial and nonfinancial assets, bridge

cash flow timing gaps or provide liquidity and flexibility for

other needs.

In addition to managing client assets, we invest in alternative

investments across a range of asset classes that seek to deliver

long-term accretive risk-adjusted returns. Our investing

activities, which are typically longer-term, include

investments in corporate equity, credit, real estate and

infrastructure assets.

We also raise deposits and have issued unsecured loans to

consumers through Marcus by Goldman Sachs (Marcus). We

have started a process to cease offering new loans through

Marcus.

Asset & Wealth Management generates revenues from the

following:

• Management and other fees. We receive fees related to

managing assets for institutional and individual clients,

providing investing and wealth advisory solutions,

providing financial planning and counseling services via

Ayco Personal Financial Management, and executing

brokerage transactions for wealth management clients. The

fees that we charge vary by asset class, client channel and

the types of services provided, and are affected by

investment performance, as well as asset inflows and

redemptions.

• Incentive fees. In certain circumstances, we also receive

incentive fees based on a percentage of a fund’s or a

separately managed account's return, or when the return

exceeds a specified benchmark or other performance

targets. Such fees include overrides, which consist of the

increased share of the income and gains derived primarily

from our private equity and credit funds when the return

on a fund’s investments over the life of the fund exceeds

certain threshold returns.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Goldman Sachs 2022 Form 10-K

• Private banking and lending. Our private banking and

lending activities include issuing loans to our wealth

management clients. Such loans are generally secured by

commercial and residential real estate, securities and other

assets. We also accept deposits (including savings and time

deposits) from wealth management clients, including

through Marcus, in GS Bank USA and Goldman Sachs

International Bank (GSIB). We have also issued unsecured

loans to consumers through Marcus and have started a

process to cease offering new loans. Additionally, we

provide investing services through Marcus Invest to U.S.

customers. Private banking and lending revenues include

net interest income allocated to deposits and net interest

income earned on loans to individual clients.

• Equity investments. Includes investing activities related

to our asset management activities primarily related to

public and private equity investments in corporate, real

estate and infrastructure assets. We also make investments

through consolidated investment entities, substantially all

of which are engaged in real estate investment activities.

• Debt investments. Includes lending activities related to

our asset management activities, including investing in

corporate debt, lending to middle-market clients, and

providing financing for real estate and other assets. These

activities include investments in mezzanine debt, senior

debt and distressed debt securities.

Platform Solutions

Platform Solutions includes our consumer platforms, such as

partnerships offering credit cards and point-of-sale financing,

and transaction banking and other platform businesses.

Platform Solutions generates revenues from the following:

Consumer platforms. Our Consumer platforms business

issues credit cards and provides point-of-sale financing to

consumers to finance the purchases of goods or services.

Consumer platforms revenues primarily includes net interest

income earned on credit card lending and point-of-sale

financing activities.

Transaction banking and other. We provide transaction

banking and other services, including cash management

services, such as deposit-taking and payment solutions for

corporate and institutional clients. Transaction banking

revenues include net interest income attributed to transaction

banking deposits.

Business Continuity and Information Security

Business continuity and information security, including

cybersecurity, are high priorities for us. Their importance has

been highlighted by (i) the coronavirus (COVID-19)

pandemic and the work-from-home arrangements

implemented by companies worldwide in response, including

us, (ii) numerous highly publicized events in recent years,

including cyber attacks against financial institutions,

governmental agencies, large consumer-based companies,

software and information technology service providers and

other organizations, some of which have resulted in the

unauthorized access to or disclosure of personal information

and other sensitive or confidential information, the theft and

destruction of corporate information and requests for ransom

payments, and (iii) extreme weather events.

Our Business Continuity & Technology Resilience Program

has been developed to provide reasonable assurance of

business continuity in the event of disruptions at our critical

facilities or of our systems, and to comply with regulatory

requirements, including those of FINRA. Because we are a

BHC, our Business Continuity & Technology Resilience

Program is also subject to review by the FRB. The key

elements of the program are crisis management, business

continuity, technology resilience, business recovery,

assurance and verification, and process improvement. In the

area of information security, we have developed and

implemented a framework of principles, policies and

technology designed to protect the information provided to

us by our clients and our own information from cyber attacks

and other misappropriation, corruption or loss. Safeguards

are designed to maintain the confidentiality, integrity and

availability of information.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Goldman Sachs 2022 Form 10-K 5

Human Capital Management

Our people are our greatest asset. We believe that a major

strength and principal reason for our success is the quality,

dedication, determination and collaboration of our people,

which enables us to serve our clients, generate long-term

value for our shareholders and contribute to the broader

community. We invest heavily in developing and supporting

our people throughout their careers, and we strive to

maintain a work environment that fosters professionalism,

excellence, high standards of business ethics, diversity,

teamwork and cooperation among our employees worldwide.

Diversity and Inclusion

The strength of our culture, our ability to execute our

strategy, and our relationships with clients all depend on a

diverse workforce and an inclusive work environment that

encourages a wide range of perspectives. We believe that

diversity at all levels of our organization, from entry-level

analysts to senior management, as well as the Board of

Directors of Group Inc. (Board) is essential to our

sustainability. As of December 2022, approximately 57% of

our Board was diverse by race, gender or sexual orientation.

Our management team works closely with our Global

Inclusion and Diversity Committee to continue to increase

diversity of our global workforce at all levels. In addition, we

have Inclusion and Diversity Committees across regions,

which promote an environment that values different

perspectives, challenges conventional thinking and maximizes

the potential of all our people.

We believe that increased diversity, including diversity of

experience, gender identity, race, ethnicity, sexual

orientation, disability and veteran status, in addition to being

a social imperative, is vital to our commercial success

through the creativity that it fosters. For this reason, we have

established a comprehensive action plan with aspirational

diversity hiring and representation goals which are set forth

below and are focused on cultivating an inclusive

environment for all our colleagues.

Diverse leadership is crucial to our long-term success and to

driving innovation, and we have implemented and expanded

outreach and career advancement programs for rising diverse

executive talent. For example, we are focused on providing

diverse vice presidents the necessary coaching, sponsorship

and advocacy to support their career trajectories and

strengthen their leadership platforms, including through

programs, such as our Vice President Sponsorship Initiative

focused on high-performing women, Black, Hispanic/Latinx,

Asian and LGBTQ+ vice presidents across the globe. Many

other career development initiatives are aimed at fostering

diverse talent at the analyst and associate level, including the

Black Analyst and Associate Initiative, the Hispanic/Latinx

Analyst Initiative and the Women’s Career Strategies

Initiative. Our global and regional Inclusion Networks and

Interest Forums are open to all professionals at Goldman

Sachs to promote and advance connectivity, understanding,

inclusion and diversity.

Progress Toward Aspirational Goals. Reflecting our

efforts to increase diversity, the composition of our most

recent partnership class was 29% women professionals, 24%

Asian professionals, 9% Black professionals, 3% Hispanic/

Latinx professionals, 3% LGBTQ+ professionals and 3%

professionals who are military/veterans. The composition of

our most recent managing director class was 30% women

professionals, 28% Asian professionals, 5% Black

professionals, 5% Hispanic/Latinx professionals, 3%

LGBTQ+ professionals and 3% professionals who are

military/veterans.

We have also set forth the following aspirational goals:

• We aim for analyst and associate hiring (which accounts

for over 70% of our annual hiring) to achieve

representation of 50% women professionals, 11% Black

professionals and 14% Hispanic/Latinx professionals in the

Americas, and 9% Black professionals in the U.K. In 2022,

our analyst and associate hires included 44% women

professionals, 10% Black professionals and 13% Hispanic/

Latinx professionals in the Americas, and 17% Black

professionals in the U.K.

• We aim for women professionals to represent 40% of our

vice presidents globally by 2025 and 30% of senior talent

(vice presidents and above) in the U.K. by 2023, while also

endeavoring for women employees to comprise 50% of all

of our employees globally over time. As of December 2022,

women professionals represented 33% of our vice president

population globally and 31% of senior talent (vice

presidents and above) in the U.K., and women employees

represented 41% of all of our employees globally.

• We aim for Black professionals to represent 7% of our vice

president population in the Americas and in the U.K., and

for Hispanic/Latinx professionals to represent 9% of our

vice president population in the Americas, both by 2025. As

of December 2022, Black professionals represented 4% of

our vice president population in the Americas and 5% in

the U.K., and Hispanic/Latinx professionals represented

6% of our vice president population in the Americas.

• We aim to double the number of campus hires in the U.S.

recruited from Historically Black Colleges and Universities

(HBCUs) by 2025 relative to 2020.

The metrics above are based on self-identification.

Talent Development and Retention

We seek to help our people achieve their full potential by

investing in them and supporting a culture of continuous

development. Our goals are to maximize individual

capabilities, increase commercial effectiveness and

innovation, reinforce our culture, expand professional

opportunities, and help our people contribute positively to

their communities.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Goldman Sachs 2022 Form 10-K

Instilling our culture in all employees is a continuous process,

in which training plays an important part. We offer our

employees the opportunity to participate in ongoing

educational offerings and periodic seminars facilitated by our

Learning & Engagement team. To accelerate their integration

into the firm and our culture, new hires have the opportunity

to receive training before they start working and orientation

programs with an emphasis on culture and networking, and

nearly all employees participate in at least one training event

each year. For our more senior employees, we provide

guidance and training on how to manage people and projects

effectively, exhibit strong leadership and exemplify our

culture. We are also focused on developing a high

performing, diverse leadership pipeline and career planning

for our next generation of leaders. We maintain a variety of

programs aimed at employees’ professional growth and

leadership development, including initiatives, such as our

Vice President and Managing Director Leadership

Acceleration Initiatives and Partner Development Initiative.

Enhancing our people’s experience of internal mobility is a

key focus, as we believe that this will inspire employees, help

retain top talent and create diverse experiences to build

future leaders.

Another important part of instilling our culture is our

employee performance review process. Employees are

reviewed by supervisors, co-workers and employees whom

they supervise in a 360-degree review process that is integral

to our team approach and includes an evaluation of an

employee’s performance with respect to risk management,

protecting our reputation, adherence to our code of conduct,

compliance, and diversity and inclusion principles. Our

approach to evaluating employee performance centers on

providing robust, timely and actionable feedback that

facilitates professional development. We have directed our

managers, as leaders at the firm, to take an active coaching

role with their teams. We have also implemented “The Three

Conversations at GS” through which managers establish

goals with their team members at the start of the year, check

in mid-year on progress and then close out the year with a

conversation on performance against goals.

We believe that our people value opportunities to contribute

to their communities and that these opportunities enhance

their job satisfaction. We also believe that being able to

volunteer together with colleagues and support community

organizations through completing local service projects

strengthens our people’s bond with us. Community

TeamWorks, our signature volunteering initiative, enables

our people to participate in high-impact, team-based

volunteer opportunities, including projects coordinated with

hundreds of nonprofit partner organizations worldwide.

During 2022, our people volunteered approximately 86,000

hours of service globally through Community TeamWorks,

with approximately 17,000 employees partnering with

approximately 500 nonprofit organizations on approximately

1,200 community projects.

Wellness

We recognize that for our people to be successful in the

workplace they need support in their personal, as well as

their professional, lives. We have created a strong support

framework for wellness, which is intended to enable

employees to better balance their roles at work and their

responsibilities at home. We provide a number of policies for

our employees that support taking time away from the office

when needed, including 20 weeks of parental leave, family

care leave and bereavement leave. In 2022, we also enhanced

our vacation policies for our employees, allowing managing

directors to take time off, when needed, without a fixed

vacation day entitlement and adding a minimum of two

additional vacation days for all other employees, as well as

setting a minimum annual expected vacation usage of 15

days. For longer-tenured employees, we offer an unpaid

sabbatical leave. We also continue to advance our resilience

programs, offering our people a range of counseling,

coaching, medical advisory and personal wellness services.

We increased the availability of these resources during the

COVID-19 pandemic, and continued to evolve and

strengthen virtual offerings to enhance access to support,

with the aim of maintaining the physical and mental well-

being of our people, and enhancing their effectiveness and

productivity.

In addition, to support the financial wellness of our

employees, we offer a variety of resources that help them

manage their personal financial health and decision-making,

including financial education information sessions, live and

on-demand webinars, articles and interactive digital tools.

Global Reach and Strategic Locations

As a firm with a global client base, we take a strategic

approach to attracting, developing and managing a global

workforce. Our clients are located worldwide and we are an

active participant in financial markets around the world. As

of December 2022, we had headcount of 48,500, offices in

over 35 countries and 52% of our headcount was based in the

Americas, 19% in EMEA and 29% in Asia. Our employees

come from over 180 countries and speak more than 150

languages as of December 2022.

In addition to maintaining offices in major financial centers

around the world, we have established key strategic

locations, including in Bengaluru, Salt Lake City, Dallas,

Singapore, Warsaw and Hyderabad. We continue to evaluate

the expanded use of strategic locations, including cities in

which we do not currently have a presence.

As of December 2022, 41% of our employees were working

in strategic locations. We believe our investment in these

strategic locations enables us to build centers of excellence

around specific capabilities that support our business

initiatives.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Goldman Sachs 2022 Form 10-K 7

Sustainability

We have a long-standing commitment to sustainability. Our

two priorities in this area are helping clients across industries

decarbonize their businesses to support their transition to a

low-carbon economy (Climate Transition) and to advance

solutions that expand access, increase affordability, and drive

outcomes to support sustainable economic growth (Inclusive

Growth). Our strategy is to advance these two priorities

through our work with our clients, and with strategic

partners whose strengths and areas of focus complement our

own, as well as through our supply chain.

We have established a Sustainable Finance Group, which

serves as the centralized group that drives climate strategy

and sustainability efforts across our firm, including

commercial efforts alongside our businesses, to advance

Climate Transition and Inclusive Growth. We have also

created the role of Global Head of Sustainability and

Inclusive Growth, which, like our One Goldman Sachs

initiative, is intended to facilitate the application of our full

capabilities across both Climate Transition and Inclusive

Growth. Our sustainable finance-related efforts continue to

evolve. For example, we recently launched the Sustainable

Banking Group, a group focused on supporting our corporate

clients in reducing their direct and indirect carbon emissions.

Our activities relating to sustainability present both financial

and nonfinancial risks, and we have processes for managing

these risks, similar to the other risks we face. We have

integrated oversight of climate-related risks into our risk

management governance structure, from senior management

to our Board and its committees, including the Risk and

Public Responsibilities committees. The Risk Committee of

the Board oversees firmwide financial and nonfinancial risks,

which include climate risk, and, as part of its oversight,

receives updates on our risk management approach to climate

risk. The Public Responsibilities Committee of the Board

assists the Board in its oversight of our firmwide

sustainability strategy and sustainability risks affecting us,

including with respect to climate change. As part of its

oversight, the Public Responsibilities Committee receives

periodic updates on our sustainability strategy, and also

periodically reviews our governance and related policies and

processes for sustainability and climate change-related risks.

We have also implemented an Environmental Policy

Framework to guide our overall approach to sustainability

issues. We apply this Framework when evaluating

transactions for environmental and social risks and impacts.

Our employees also receive training with respect to

environmental and social risks, including for sectors and

industries that we believe have higher potential for these

risks. See “Management’s Discussion and Analysis of

Financial Condition and Results of Operations — Risk

Management — Other Risk Management — Climate Risk

Management” in Part II, Item 7 of this Form 10-K for further

information about our climate risk management.

As a leading financial institution, we acknowledge the

importance of Climate Transition and Inclusive Growth for

our business. In February 2021, we issued our inaugural

sustainability bond of $800 million, and in June 2022 we

issued our second benchmark sustainability bond of $700

million. These issuances align with our sustainable finance

framework for future issuances and fund a range of on-

balance sheet sustainable finance activity. We believe we can

advance sustainability by partnering with our clients across

our businesses, including by developing new sustainability-

linked financing solutions, offering strategic advice, or

coinvesting alongside our clients in clean energy companies.

We have announced a target to deploy $750 billion in

sustainable financing, investing and advisory activity by the

beginning of 2030. As of December 2022, we achieved

approximately 55% of that goal, with the majority dedicated

to Climate Transition.

With respect to Climate Transition, we have announced our

commitment to align our financing activities with a net-zero-

by-2050 pathway. In that context, we have set an initial set of

targets for 2030 focused on three sectors — power, oil and

gas, and auto manufacturing — where we see an opportunity

to proactively engage our clients and investors, deploy capital

required for transition, and invest in new commercial

solutions to drive decarbonization in the real economy.

Carbon neutrality is also a priority for the operation of our

firm and our supply chain. In 2015, we achieved carbon

neutrality in our operations and business travel, ahead of our

2020 goal announced in 2009. We have expanded our

operational carbon commitment to include our supply chain,

targeting net-zero carbon emissions by 2030.

In addition to Climate Transition, our approach to

sustainability also centers on Inclusive Growth where we seek

to drive solutions that expand access, increase affordability,

and drive outcomes to advance sustainable economic growth.

We have sponsored initiatives, such as One Million Black

Women, Launch With GS, the Urban Investment Group,

10,000 Women and 10,000 Small Businesses. An overarching

theme of our sustainability strategy is promoting diversity

and inclusion as an imperative for us, as well as for our

clients and their boards. These efforts are further

strengthened by strategic partnerships that we have

established in areas where we have identified gaps or believe

we are able to drive even greater impact through

collaboration. We believe our ability to achieve our

sustainability objectives is critically dependent on the

strengths and talents of our people, and we recognize that our

people are able to maximize their impact by collaborating in

a diverse and inclusive work environment. See “Business —

Human Capital Management” for information about our

human capital management goals, programs and policies.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Goldman Sachs 2022 Form 10-K

Competition

The financial services industry and all of our businesses are

intensely competitive, and we expect them to remain so. Our

competitors provide investment banking, market-making and

asset management services, private banking and lending,

commercial lending, point-of-sale financing, credit cards,

transaction banking, deposit-taking and other banking

products and services, and make investments in securities,

commodities, derivatives, real estate, loans and other

financial assets. Our competitors include brokers and dealers,

investment banking firms, commercial banks, credit card

issuers, insurance companies, investment advisers, mutual

funds, hedge funds, private equity funds, merchant banks,

consumer finance companies and financial technology and

other internet-based companies. Some of our competitors

operate globally and others regionally, and we compete based

on a number of factors, including transaction execution,

client experience, products and services, innovation,

reputation and price.

We have faced, and expect to continue to face, pressure to

retain market share by committing capital to businesses or

transactions on terms that offer returns that may not be

commensurate with their risks. In particular, corporate

clients seek such commitments (such as agreements to

participate in their loan facilities) from financial services

firms in connection with investment banking and other

assignments.

Consolidation and convergence have significantly increased

the capital base and geographic reach of some of our

competitors and have also hastened the globalization of the

securities and other financial services markets. As a result, we

have had to commit capital to support our international

operations and to execute large global transactions. To

capitalize on some of our most significant opportunities, we

will have to compete successfully with financial institutions

that are larger and have more capital and that may have a

stronger local presence and longer operating history outside

the U.S.

We also compete with smaller institutions that offer more

targeted services, such as independent advisory firms. Some

clients may perceive these firms to be less susceptible to

potential conflicts of interest than we are, and, as described

below, our ability to effectively compete with them could be

affected by regulations and limitations on activities that

apply to us but may not apply to them.

A number of our businesses are subject to intense price

competition. Efforts by our competitors to gain market share

have resulted in pricing pressure in our investment banking,

market-making, consumer, wealth management and asset

management businesses. For example, the increasing volume

of trades executed electronically, through the internet and

through alternative trading systems, has increased the

pressure on trading commissions, in that commissions for

electronic trading are generally lower than those for non-

electronic trading. It appears that this trend toward low-

commission trading will continue. Price competition has also

led to compression in the difference between the price at

which a market participant is willing to sell an instrument

and the price at which another market participant is willing

to buy it (i.e., bid/offer spread), which has affected our

market-making businesses. The increasing prevalence of

passive investment strategies that typically have lower fees

than other strategies we offer has affected the competitive

and pricing dynamics for our asset management products and

services. In addition, we believe that we will continue to

experience competitive pressures in these and other areas in

the future as some of our competitors seek to obtain market

share by further reducing prices, and as we enter into or

expand our presence in markets that rely more heavily on

electronic trading and execution. We and other banks also

compete for deposits on the basis of the rates we offer.

Increases in short-term interest rates have resulted in and are

expected to continue to result in more intense competition in

deposit pricing.

We also compete on the basis of the types of financial

products and client experiences that we and our competitors

offer. In some circumstances, our competitors may offer

financial products that we do not offer and that our clients

may prefer, including cryptocurrencies and other digital

assets that we cannot or may choose not to provide. Our

competitors may also develop technology platforms that

provide a better client experience.

The provisions of the U.S. Dodd-Frank Wall Street Reform

and Consumer Protection Act (Dodd-Frank Act), the

requirements promulgated by the Basel Committee on

Banking Supervision (Basel Committee) and other financial

regulations could affect our competitive position to the

extent that limitations on activities, increased fees and

compliance costs or other regulatory requirements do not

apply, or do not apply equally, to all of our competitors or

are not implemented uniformly across different jurisdictions.

For example, the provisions of the Dodd-Frank Act that

prohibit proprietary trading and restrict investments in

certain hedge and private equity funds differentiate between

U.S.-based and non-U.S.-based banking organizations and

give non-U.S.-based banking organizations greater flexibility

to trade outside of the U.S. and to form and invest in funds

outside the U.S.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Goldman Sachs 2022 Form 10-K 9

Likewise, the obligations with respect to derivative

transactions under Title VII of the Dodd-Frank Act depend,

in part, on the location of the counterparties to the

transaction. The impact of regulatory developments on our

competitive position has depended and will continue to

depend to a large extent on the manner in which the required

rulemaking and regulatory guidance evolve, the extent of

international convergence, and the development of market

practice and structures under the evolving regulatory regimes,

as described further in “Regulation” below.

We also face intense competition in attracting and retaining

qualified employees. Our ability to continue to compete

effectively has depended and will continue to depend upon

our ability to attract new employees, retain and motivate our

existing employees and to continue to compensate employees

competitively amid intense public and regulatory scrutiny on

the compensation practices of large financial institutions.

Our pay practices and those of certain of our competitors are

subject to review by, and the standards of, the FRB and other

regulators inside and outside the U.S., including the

Prudential Regulation Authority (PRA) and the Financial

Conduct Authority (FCA) in the U.K. We also compete for

employees with institutions whose pay practices are not

subject to regulatory oversight. See “Regulation —

Compensation Practices” and “Risk Factors — Competition

— Our businesses would be adversely affected if we are

unable to hire and retain qualified employees” in Part I, Item

1A of this Form 10-K for further information about such

regulation.

Regulation

As a participant in the global financial services industry, we

are subject to extensive regulation and supervision

worldwide. The regulatory regimes applicable to our

operations have been, and continue to be, subject to

significant changes.

New regulations have been adopted or are being considered

by regulators and policy makers worldwide, as described

below. The impacts of any changes to the regulations

affecting our businesses, including as a result of the proposals

described below, are uncertain and will not be known until

such changes are finalized and market practices and

structures develop under the revised regulations.

Group Inc. is a BHC under the U.S. Bank Holding Company

Act of 1956 (BHC Act) and an FHC under amendments to the

BHC Act effected by the U.S. Gramm-Leach-Bliley Act of

1999 (GLB Act), and is subject to supervision and

examination by the FRB, which is our primary regulator.

Under the system of “functional regulation” established

under the GLB Act, the primary regulators of our U.S. non-

bank subsidiaries directly regulate the activities of those

subsidiaries, with the FRB exercising a supervisory role. Such

“functionally regulated” subsidiaries include broker-dealers

and security-based swap dealers registered with the SEC,

such as our principal U.S. broker-dealer, entities registered

with or regulated by the CFTC with respect to futures-related

and swaps-related activities and investment advisers

registered with the SEC with respect to their investment

advisory activities.

Our principal subsidiaries operating in the U.S. include GS

Bank USA, Goldman Sachs & Co., LLC (GS&Co.), J. Aron

& Company LLC (J. Aron) and Goldman Sachs Asset

Management, L.P.

GS Bank USA is our principal U.S. bank subsidiary and is

supervised and regulated by the FRB, the FDIC, the New

York State Department of Financial Services (NYDFS) and

the Consumer Financial Protection Bureau (CFPB). GS Bank

USA also has a London branch, which is regulated by the

FCA and PRA, and a Tokyo branch, which is regulated by

the Japan Financial Services Agency. We conduct a number

of our activities partially or entirely through GS Bank USA

and its subsidiaries, including: corporate loans (including

leveraged lending); securities-based and collateralized loans;

consumer loans (including installment loans, such as point-

of-sale loans, and credit card loans); small business loans

(including installment, lines of credit and credit cards);

residential mortgages; transaction banking; deposit-taking;

interest rate, credit, currency and other derivatives; and

agency lending.

GS&Co. is our principal U.S. broker-dealer and is registered

as a broker-dealer, a securities-based swap dealer, a

municipal advisor and an investment adviser with the SEC

and as a broker-dealer in all 50 states and the District of

Columbia. U.S. self-regulatory organizations, such as FINRA

and the NYSE, have adopted rules that apply to, and

examine, broker-dealers such as GS&Co.

Our principal subsidiaries operating in Europe include:

Goldman Sachs International (GSI), GSIB and Goldman

Sachs Asset Management International (GSAMI); Goldman

Sachs Bank Europe SE (GSBE); and Goldman Sachs Paris Inc.

et Cie (GSPIC).

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Goldman Sachs 2022 Form 10-K

Our E.U. subsidiaries are subject to various E.U. regulations,

as well as national laws, including those implementing

European directives. GSBE is directly supervised by the

European Central Bank (ECB) and additionally by BaFin and

Deutsche Bundesbank in the context of the E.U. Single

Supervisory Mechanism (SSM). GSBE’s London branch is

regulated by the FCA. GSBE engages in certain activities

primarily in the E.U., including underwriting and market

making in debt and equity securities and derivatives,

investment, asset and wealth management services, deposit-

taking, lending (including securities lending), and financial

advisory services. GSBE is also a primary dealer for

government bonds issued by E.U. sovereigns. As a foreign

bank subsidiary of GS Bank USA, GSBE is subject to limits

on the nature and scope of its activities under the FRB’s

Regulation K, including limits on its underwriting and

market making in equity securities based on GSBE’s and/or

GS Bank USA’s capital.

GSPIC is an investment firm regulated by the French

Prudential Supervision and Resolution Authority (ACPR)

and the French Financial Markets Authority. GSPIC’s

activities include certain activities that GSBE is prevented

from undertaking. GSPIC's application to ACPR in October

2021 to become a credit institution remains pending.

GSI is a U.K. broker-dealer and a designated investment firm,

and GSIB is a U.K. bank. Both GSI and GSIB are regulated by

the PRA and the FCA. As an investment firm, GSI is subject

to prudential requirements applicable to banks, including

capital and liquidity requirements. GSI provides broker-

dealer services in and from the U.K. and is registered with the

CFTC as a swap dealer and with the SEC as a securities-

based swap dealer. GSIB engages in lending (including

securities lending) and deposit-taking activities and is a

primary dealer for U.K. government bonds. GSI and GSIB

maintain branches outside of the U.K. and are subject to the

laws and regulations of the jurisdictions where they are

located.

Our principal subsidiary operating in Asia is Goldman Sachs

Japan Co., Ltd. (GSJCL). GSJCL is our regulated Japanese

broker-dealer subsidiary and is regulated by Japan’s

Financial Services Agency, the Tokyo Stock Exchange, the

Bank of Japan and the Ministry of Finance, among others.

Banking Supervision and Regulation

The Basel Committee is the primary global standard setter

for prudential bank regulation. However, the Basel

Committee’s standards do not become effective in a

jurisdiction until the relevant regulators have adopted rules

to implement its standards. The implications of Basel

Committee standards and related regulations for our

businesses depend to a large extent on their implementation

by the relevant regulators globally, and the market practices

and structures that develop.

Capital and Liquidity Requirements. We and GS Bank

USA are subject to regulatory risk-based capital and leverage

requirements that are calculated in accordance with the

regulations of the FRB (Capital Framework). The Capital

Framework is largely based on the Basel Committee’s

framework for strengthening the regulation, supervision and

risk management of banks (Basel III) and also implements

certain provisions of the Dodd-Frank Act. Under the U.S.

federal bank regulatory agencies’ tailoring framework, we

and GS Bank USA are subject to “Category I” standards

because we have been designated as a global systemically

important bank (G-SIB). Accordingly, we and GS Bank USA

are “Advanced approach” banking organizations. Under the

Capital Framework, we and GS Bank USA must meet specific

regulatory capital requirements that involve quantitative

measures of assets, liabilities and certain off-balance sheet

items. The sufficiency of our capital levels is also subject to

qualitative judgments by regulators. We and GS Bank USA

are also subject to liquidity requirements established by the

U.S. federal bank regulatory agencies.

GSBE is subject to capital and liquidity requirements

prescribed in the E.U. Capital Requirements Regulation, as

amended (CRR), and the E.U. Capital Requirements

Directive, as amended (CRD), which are largely based on

Basel III. The most recent amendments to the CRR and CRD

(respectively, CRR II and CRD V) include changes to the

liquidity, market risk, counterparty credit risk, large

exposures and leverage ratio frameworks. These changes

have been applicable in the E.U. since June 2021. From June

2022, the CRR requires large institutions with securities

traded on a regulated market of a member state to make

qualitative and quantitative disclosures relating to

environmental, social and governance risks on an annual

basis. Under an E.U. proposal, these requirements would

apply to our E.U.-regulated entities beginning in January

2025.

GSI and GSIB are subject to the U.K. capital and liquidity

frameworks, which are also largely based on Basel III and are

predominantly aligned with the E.U. capital and liquidity

frameworks. The most recent amendments to the U.K.

frameworks include changes to the liquidity, counterparty

credit risk, large exposures and leverage ratio frameworks.

The changes have been applicable in the U.K. since January

2022.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Goldman Sachs 2022 Form 10-K 11

Risk-Based Capital Ratios. As Advanced approach

banking organizations, we and GS Bank USA calculate risk-

based capital ratios in accordance with both the Standardized

and Advanced Capital Rules. Both the Advanced Capital

Rules and the Standardized Capital Rules include minimum

risk-based capital requirements and additional capital

conservation buffer requirements that must be satisfied solely

with Common Equity Tier 1 (CET1) capital. Failure to

satisfy a buffer requirement in full would result in constraints

on capital distributions and discretionary executive

compensation. The severity of the constraints would depend

on the amount of the shortfall and the organization’s

“eligible retained income,” defined as the greater of (i) net

income for the four preceding quarters, net of distributions

and associated tax effects not reflected in net income; and (ii)

the average of net income over the preceding four quarters.

For Group Inc., the capital conservation buffer requirements

consist of a 2.5% buffer (under the Advanced Capital Rules),

a stress capital buffer (SCB) (under the Standardized Capital

Rules), and both a countercyclical buffer and the G-SIB

surcharge (under both Capital Rules). For GS Bank USA, the

capital conservation buffer requirements consist of a 2.5%

buffer and the countercyclical capital buffer.

The SCB is based on the results of the Federal Reserve’s

supervisory stress tests and our planned common stock

dividends and is likely to change over time based on the

results of the annual supervisory stress tests. See “Stress Tests

and Capital Planning” below. The countercyclical capital

buffer is designed to counteract systemic vulnerabilities and

currently applies only to banking organizations subject to

Category I, II or III standards, including us and GS Bank

USA. Several other national supervisors also require

countercyclical capital buffers. The G-SIB surcharge and

countercyclical capital buffer applicable to us may change in

the future, including due to additional guidance from our

regulators and/or positional changes. As a result, the

minimum capital ratios to which we are subject are likely to

change over time.

The U.S. federal bank regulatory agencies have a rule that

implements the Basel Committee’s standardized approach for

measuring counterparty credit risk exposures in connection

with derivative contracts (SA-CCR). Under the rule,

“Advanced approach” banking organizations are required to

use SA-CCR for calculating their standardized risk-weighted

assets (RWAs) and, with some adjustments, for purposes of

determining their supplementary leverage ratios (SLRs)

discussed below.

The capital requirements applicable to GSBE, GSI and GSIB

include both minimum requirements and buffers. See

“Management’s Discussion and Analysis of Financial

Condition and Results of Operations — Capital

Management and Regulatory Capital” in Part II, Item 7 of

this Form 10-K and Note 20 to the consolidated financial

statements in Part II, Item 8 of this Form 10-K for

information about our capital ratios and those of GS Bank

USA, GSBE, GSI and GSIB.

The Basel Committee standards include guidelines for

calculating incremental capital ratio requirements for

banking institutions that are systemically significant from a

domestic but not global perspective (D-SIBs). Depending on

how these guidelines are implemented by national regulators,

they may apply, among others, to certain subsidiaries of G-

SIBs. These guidelines are in addition to the framework for

G-SIBs, but are more principles-based. The U.S. federal bank

regulatory agencies have not designated any D-SIBs. The

CRD and CRR provide that institutions that are systemically

important at the E.U. or member state level, known as other

systemically important institutions (O-SIIs), may be subject

to additional capital ratio requirements, according to their

degree of systemic importance (O-SII buffers). BaFin has

identified GSBE as an O-SII in Germany and set an O-SII

buffer.

In the U.K., the PRA has identified Goldman Sachs Group

UK Limited (GSG UK), the parent company of GSI and GSIB,

as an O-SII but has not applied an O-SII buffer.

The Basel Committee has finalized revisions to the

framework for calculating capital requirements for market

risk as part of its Fundamental Review of the Trading Book

(FRTB). These revisions are expected to increase market risk

capital requirements for most banking organizations and

large broker-dealers subject to bank capital requirements.

The revised framework, among other things, revises the

standardized and internal model-based approaches used to

calculate market risk requirements and clarifies the scope of

positions subject to market risk capital requirements. The

Basel Committee framework contemplates that national

regulators will have implemented the revised framework by

January 1, 2023. The U.S. federal bank regulatory agencies

have not yet proposed rules implementing the revised

framework. Under the CRR, E.U. financial institutions,

including GSBE, commenced reporting their market risk

calculations under the revised framework in the third quarter

of 2021. In November 2022, the PRA issued a consultation

paper to implement this framework.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Goldman Sachs 2022 Form 10-K

The Basel Committee published standards that it described as

the finalization of the Basel III post-crisis regulatory reforms

(Basel III Revisions). These standards set a floor on internally

modeled capital requirements at a percentage of the capital

requirements under the standardized approach. They also

revise the Basel Committee’s standardized and internal

model-based approaches for credit risk, provide a new

standardized approach for operational risk capital and revise

the frameworks for credit valuation adjustment (CVA) risk.

The Basel Committee framework contemplates that national

regulators will have implemented these standards and that

the new floor will be phased in through January 1, 2028. The

U.S. federal bank regulatory authorities have not yet

proposed rules implementing the Basel III Revisions for

purposes of their risk-based capital ratios. The European

Commission proposed rules to implement the Basel III

Revisions in October 2021 and in November 2022, the

Council of the E.U. adopted its general approach on

implementing the Basel III revisions. The proposed E.U. rules

contemplate amendments to the CRR and the CRD, referred

to as CRR III and CRD VI, generally taking effect in January

2025. In November 2022, the PRA issued a consultation on

the implementation of the Basel III Revisions, with a

proposed January 2025 effective date. Under the PRA

consultation, our U.K. subsidiaries are not expected to be

subject to a floor on internally modeled capital requirements.

The Basel Committee has published an updated securitization

framework and a revised G-SIB assessment methodology, but

the U.S. federal bank regulatory agencies have not yet

proposed rules implementing them. The updated

securitization framework has been implemented in the E.U.

and U.K.

In December 2022, the Basel Committee published a final

standard on the prudential treatment of cryptoasset

exposures. The Basel Committee contemplates that national

regulators will have incorporated the standard into local

capital requirements by January 1, 2025. U.S. federal bank

regulatory agencies and E.U. and U.K. authorities have not

yet proposed rules implementing the standards.

Leverage Ratios. Under the Capital Framework, we and GS

Bank USA are subject to Tier 1 leverage ratios and SLRs

established by the FRB. As a G-SIB, the SLR requirements

applicable to us include both a minimum requirement and a

buffer requirement, which operates in the same manner as the

risk-based buffer requirements described above. In April

2018, the FRB and the OCC issued a proposed rule which

would (i) replace the current 2% SLR buffer for G-SIBs,

including us, with a buffer equal to 50% of their G-SIB

surcharge and (ii) revise the 6% SLR requirement for

Category I banks, such as GS Bank USA, to be “well

capitalized” with a requirement equal to 3% plus 50% of

their parent’s G-SIB surcharge. This proposal, together with

the adopted rule requiring use of SA-CCR for purposes of

calculating the SLR, would implement certain of the revisions

to the leverage ratio framework published by the Basel

Committee in December 2017.

GSBE and certain of our U.K. entities are also subject to

requirements relating to leverage ratios, which are generally

based on the Basel Committee leverage ratio standards.

See “Management’s Discussion and Analysis of Financial

Condition and Results of Operations — Capital

Management and Regulatory Capital” in Part II, Item 7 of

this Form 10-K and Note 20 to the consolidated financial

statements in Part II, Item 8 of this Form 10-K for

information about our and GS Bank USA’s Tier 1 leverage

ratios and SLRs, and GSI’s leverage ratio.

Liquidity Ratios. The Basel Committee’s framework for

liquidity risk measurement, standards and monitoring

requires banking organizations to measure their liquidity

against two specific liquidity tests: the Liquidity Coverage

Ratio (LCR) and the Net Stable Funding Ratio (NSFR).

The LCR rule issued by the U.S. federal bank regulatory

agencies and applicable to both us and GS Bank USA is

generally consistent with the Basel Committee’s framework

and is designed to ensure that a banking organization

maintains an adequate level of unencumbered, high-quality

liquid assets equal to or greater than the expected net cash

outflows under an acute short-term liquidity stress scenario.

We and GS Bank USA are required to maintain a minimum

LCR of 100%. See “Available Information” below and

“Management’s Discussion and Analysis of Financial

Condition and Results of Operations — Risk Management

— Liquidity Risk Management — Liquidity Regulatory

Framework” in Part II, Item 7 of this Form 10-K for

information about our average daily LCR.

GSBE is subject to the LCR rule approved by the European

Parliament and Council, and GSI and GSIB are subject to the

rules approved by the U.K. regulatory authorities' LCR rules.

These rules are generally consistent with the Basel

Committee’s framework.

The NSFR is designed to promote medium- and long-term

stable funding of the assets and off-balance sheet activities of

banking organizations over a one-year time horizon. The

Basel Committee’s NSFR framework requires banking

organizations to maintain a minimum NSFR of 100%.

We are subject to the U.S. NSFR rule and we will be required

to publicly disclose our quarterly average daily NSFR semi-

annually. We will begin doing so in August 2023. The CRR

implements the NSFR for certain E.U. financial institutions,

including GSBE. The NSFR requirement implemented in the

U.K. is applicable to both GSI and GSIB.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Goldman Sachs 2022 Form 10-K 13

The FRB’s enhanced prudential standards require BHCs with

$100 billion or more in total consolidated assets to comply

with enhanced liquidity and overall risk management

standards, which include maintaining a level of highly liquid

assets based on projected funding needs for 30 days, and

increased involvement by boards of directors in liquidity and

overall risk management. Although the liquidity requirement

under these rules has some similarities to the LCR, it is a

separate requirement. GSBE also has its own liquidity

planning process, which incorporates internally designed

stress tests and those required under German regulatory

requirements and the ECB Guide to Internal Liquidity

Adequacy Assessment Process (ILAAP). GSI and GSIB have

their own liquidity planning processes, which incorporate

internally designed stress tests developed in accordance with

the guidelines of the PRA’s ILAAP.

See “Management’s Discussion and Analysis of Financial

Condition and Results of Operations — Risk Management

— Overview and Structure of Risk Management” and “—

Liquidity Risk Management — Liquidity Regulatory

Framework” in Part II, Item 7 of this Form 10-K for

information about the LCR and NSFR, as well as our risk

management practices and liquidity.

Stress Tests and Capital Planning. The FRB’s

Comprehensive Capital Analysis and Review (CCAR) is

designed to ensure that large BHCs, including us, have

sufficient capital to permit continued operations during times

of economic and financial stress. As required by the FRB, we

perform an annual capital stress test and incorporate the

results into an annual capital plan, which we submit to the

FRB for review. See “Management’s Discussion and Analysis

of Financial Condition and Results of Operations — Capital

Management and Regulatory Capital — Capital Planning

and Stress Testing Process” in Part II, Item 7 of this Form 10-

K for further information about our annual capital plan. As

described in “Available Information” below, summary results

of the annual stress test are published on our website.

As part of the CCAR process, the FRB evaluates our plan to

make capital distributions across a range of macroeconomic

and company-specific assumptions, based on our and the

FRB’s own stress tests.

The FRB’s rule applicable to BHCs with $100 billion or more

in total consolidated assets, including us, replaced the static

2.5% component of the capital conservation buffer required

under the Standardized Capital Rules with the SCB. The SCB

reflects stressed losses estimated under the supervisory

severely adverse scenario of the CCAR stress tests, as

calculated by the FRB, and includes four quarters of planned

common stock dividends. The SCB, which is subject to a

2.5% floor, is generally effective on October 1 of each year

and remains in effect until October 1 of the following year,

unless it is reset in connection with the resubmission of a

capital plan. See “Available Information” below and

“Management’s Discussion and Analysis of Financial

Condition and Results of Operations — Capital

Management and Regulatory Capital” in Part II, Item 7 of

this Form 10-K for information about our SCB requirement.

The SCB rule requires a BHC to receive the FRB’s approval

for any dividend, stock repurchase or other capital

distribution, other than a capital distribution on a newly

issued capital instrument, if the BHC is required to resubmit

its capital plan, which may occur if the BHC determines there

has been or will be a “material change” in its risk profile,

financial condition or corporate structure since the plan was

last submitted, or if the FRB directs the BHC to revise and

resubmit its capital plan.

U.S. depository institutions with total consolidated assets of

$250 billion or more that are subsidiaries of U.S. G-SIBs, such

as GS Bank USA, are required to submit annual company-run

stress test results to the FRB. GSBE also has its own capital

and stress testing process, which incorporates internally

designed stress tests and those required under German

regulatory requirements and the ECB Guide to Internal

Capital Adequacy Assessment Process (ICAAP). In addition,

GSI and GSIB have their own capital planning and stress

testing processes, which incorporate internally designed stress

tests developed in accordance with the PRA’s ICAAP

guidelines.

Limitations on the Payment of Dividends. U.S. federal

and state laws impose limitations on the payment of

dividends by U.S. depository institutions, such as GS Bank

USA. In general, the amount of dividends that may be paid by

GS Bank USA is limited to the lesser of the amounts

calculated under a recent earnings test and an undivided

profits test. Under the recent earnings test, a dividend may

not be paid if the total of all dividends declared by the entity

in any calendar year is in excess of the current year’s net

income combined with the retained net income of the two

preceding years, unless the entity obtains regulatory

approval. Under the undivided profits test, a dividend may

not be paid in excess of the entity’s undivided profits

(generally, accumulated net profits that have not been paid

out as dividends or transferred to surplus), unless the entity

receives regulatory and stockholder approval. As a result of

dividend payments from GS Bank USA to Group Inc. in

connection with the acquisition of GSBE in July 2021, GS

Bank USA cannot currently declare any dividends without

regulatory approval.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Goldman Sachs 2022 Form 10-K

The applicable U.S. banking regulators have authority to

prohibit or limit the payment of dividends if, in the banking

regulator’s opinion, payment of a dividend would constitute

an unsafe or unsound practice in light of the financial

condition of the banking organization.

Source of Strength. The Dodd-Frank Act requires BHCs to

act as a source of strength to their U.S. bank subsidiaries and

to commit capital and financial resources to support those

subsidiaries. This support may be required by the FRB at

times when BHCs might otherwise determine not to provide

it. Capital loans by a BHC to a U.S. subsidiary bank are

subordinate in right of payment to deposits and to certain

other indebtedness of the subsidiary bank. In addition, if a

BHC commits to a U.S. federal banking agency that it will

maintain the capital of its bank subsidiary, whether in

response to the FRB’s invoking its source-of-strength

authority or in response to other regulatory measures, that

commitment will be assumed by the bankruptcy trustee for

the BHC and the bank will be entitled to priority payment in

respect of that commitment, ahead of other creditors of the

BHC.

Transactions Between Affiliates. Transactions between

GS Bank USA or its subsidiaries, including GSBE, and Group

Inc. or its other subsidiaries and affiliates are subject to

restrictions under the Federal Reserve Act and regulations

issued by the FRB. These laws and regulations generally limit

the types and amounts of transactions (such as loans and

other credit extensions, including credit exposure arising

from resale agreements, securities borrowing and derivative

transactions, from GS Bank USA or its subsidiaries to Group

Inc. or its other subsidiaries and affiliates and purchases of

assets by GS Bank USA or its subsidiaries from Group Inc. or

its other subsidiaries and affiliates) that may take place and

generally require those transactions, to the extent permitted,

to be on market terms or better to GS Bank USA or its

subsidiaries. These laws and regulations generally do not

apply to transactions between GS Bank USA and its

subsidiaries. Similarly, German regulatory requirements

provide that certain transactions between GSBE and GS Bank

USA or its other affiliates, including Group Inc., must be on

market terms and are subject to special internal approval

requirements. PRA rules provide similar requirements for

transactions between GSI and GSIB and their respective

affiliates.

Resolution and Recovery Plans. We are required by the

FRB and the FDIC to submit a periodic plan for our rapid

and orderly resolution in the event of material financial

distress or failure (resolution plan). If these regulators jointly

determine that an institution has failed to remediate

identified shortcomings in its resolution plan or that its

resolution plan, after any permitted resubmission, is not

credible or would not facilitate an orderly resolution under

the U.S. Bankruptcy Code, they may jointly impose more

stringent capital, leverage or liquidity requirements or

restrictions on growth, activities or operations, or may jointly

order the institution to divest assets or operations, in order to

facilitate orderly resolution in the event of failure. The FRB

and FDIC require U.S. G-SIBs to submit resolution plans

every two years (alternating between submissions of full

plans and targeted plans that include only select

information). We submitted our 2021 resolution plan, which

was a targeted submission, in June 2021, and the FRB and

FDIC did not identify any deficiencies or shortcomings. Our

next required submission is a full submission by July 1, 2023.

See “Risk Factors — Legal and Regulatory —The application

of Group Inc.’s proposed resolution strategy could result in

greater losses for Group Inc.’s security holders” in Part I,

Item 1A of this Form 10-K and “Available Information” in

Part I, Item 1 of this Form 10-K for further information about

our resolution plan.

We are also required by the FRB to submit, on a periodic

basis, a global recovery plan that outlines the steps that we

could take to reduce risk, maintain sufficient liquidity and

conserve capital in times of prolonged stress. Certain of our

subsidiaries are also subject to similar recovery plan

requirements.

GS Bank USA is required to provide a resolution plan to the

FDIC that must, among other things, demonstrate that it is

adequately protected from risks arising from our other

entities. GS Bank USA’s most recent resolution plan was

submitted in June 2018. In June 2021, the FDIC provided

guidance on insured depository institution (IDI) resolution

plans and divided IDIs with $100 billion or more in assets,

including GS Bank USA, into two groups for purposes of the

timing of resolution plan submissions. GS Bank USA is in the

second group with a later submission date.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Goldman Sachs 2022 Form 10-K 15

The U.S. federal bank regulatory agencies have adopted rules

imposing restrictions on qualified financial contracts (QFCs)

entered into by G-SIBs. The rules are intended to facilitate

the orderly resolution of a failed G-SIB by limiting the ability

of the G-SIB to enter into a QFC unless (i) the counterparty

waives certain default rights in such contract arising upon the

entry of the G-SIB or one of its affiliates into resolution, (ii)

the contract does not contain enumerated prohibitions on the

transfer of such contract and/or any related credit

enhancement, and (iii) the counterparty agrees that the

contract will be subject to the special resolution regimes set

forth in the Dodd-Frank Act orderly liquidation authority

(OLA) and the Federal Deposit Insurance Act of 1950 (FDIA),

described below. GS Bank USA has achieved compliance by

adhering to the International Swaps and Derivatives

Association Universal Resolution Stay Protocol (ISDA

Universal Protocol) and International Swaps and Derivatives

Association 2018 U.S. Resolution Stay Protocol (U.S. ISDA

Protocol) described below.

Certain of our other subsidiaries also adhere to these

protocols. The ISDA Universal Protocol imposes a stay on

certain cross-default and early termination rights within

standard ISDA derivative contracts and securities financing

transactions between adhering parties in the event that one of

them is subject to resolution in its home jurisdiction,

including a resolution under OLA or the FDIA in the U.S.

The U.S. ISDA Protocol, which was based on the ISDA

Universal Protocol, was created to allow market participants

to comply with the final QFC rules adopted by the federal

bank regulatory agencies.

The E.U. Bank Recovery and Resolution Directive (BRRD),

as amended by the BRRD II, establishes a framework for the

recovery and resolution of financial institutions in the E.U.,

such as GSBE. The BRRD provides national supervisory

authorities with tools and powers to pre-emptively address

potential financial crises in order to promote financial

stability and minimize taxpayers’ exposure to losses. The

BRRD requires E.U. member states to grant certain

resolution powers to national and, where relevant, E.U.

resolution authorities, including the power to impose a

temporary stay and to recapitalize a failing entity by writing

down its unsecured debt or converting its unsecured debt into

equity. Financial institutions in the E.U. must provide that

contracts governed by non-E.U. law recognize those

temporary stay and bail-in powers unless doing so would be

impracticable. GSBE is under the direct authority of the

Single Resolution Board for resolution planning. Regulatory

authorities in the E.U. may require financial institutions in

the E.U., including subsidiaries of non-E.U. groups, to submit

recovery plans and to assist the relevant resolution authority

in constructing resolution plans for the E.U. entities. GSBE’s

primary regulator with respect to recovery planning is the

ECB, and it is also regulated by BaFin and Deutsche

Bundesbank.

The U.K. Special Resolution Regime confers substantially the

same powers on the Bank of England, as the U.K. resolution

authority, and substantially the same requirements on U.K.

financial institutions. Further, certain U.K. financial

institutions, including GSI and GSIB, are required to meet the

Bank of England’s expectations contained in the U.K.

Resolution Assessment Framework, including with respect to

loss absorbency, contractual stays, operational continuity

and funding in resolution. They are also required by the PRA

to submit solvent wind-down plans on how they could be

wound down in a stressed environment. The PRA is also the

regulatory authority in the U.K. that supervises recovery

planning, and GSI and GSIB are each required to submit

recovery plans to the PRA.

Total Loss-Absorbing Capacity (TLAC). The FRB's rule

addresses U.S. implementation of the Financial Stability

Board’s (FSB’s) TLAC principles and term sheet on minimum

TLAC requirements for G-SIBs. The rule, among other

things, establishes minimum TLAC requirements, establishes

minimum requirements for “eligible long-term debt” (i.e.,

debt that is unsecured, has a maturity of at least one year

from issuance and satisfies certain additional criteria) and

caps the amount of parent company liabilities that are not

eligible long-term debt.

The rule also prohibits a BHC that has been designated as a

U.S. G-SIB from (i) guaranteeing subsidiaries’ liabilities that

are subject to early termination provisions if the BHC enters

into an insolvency or receivership proceeding, subject to an

exception for guarantees permitted by rules of the U.S.

federal banking agencies imposing restrictions on QFCs; (ii)

incurring liabilities guaranteed by subsidiaries; (iii) issuing

short-term debt to third parties; or (iv) entering into

derivatives and certain other financial contracts with external

counterparties.

Additionally, the rule caps, at 5% of the value of the parent

company’s eligible TLAC, the amount of unsecured non-

contingent third-party liabilities that are not eligible long-

term debt that could rank equally with or junior to eligible

long-term debt.

The CRR, the BRRD and U.K. financial services regime are

designed to, among other things, implement the FSB’s

minimum TLAC requirement for G-SIBs. For example, the

CRR requires E.U. subsidiaries of a non-E.U. G-SIB that

exceed the threshold of 5% of the G-SIB’s RWAs, operating

income or leverage exposure, such as GSBE, to meet internal

TLAC requirements. Under the U.K. financial services

regime, GSG UK exceeds the applicable thresholds and

therefore, it is subject to internal TLAC requirements.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Goldman Sachs 2022 Form 10-K

The CRD requires a non-E.U. group with more than €40

billion of assets in the E.U., such as us, to establish an E.U.

intermediate holding company (E.U. IHC) by December 30,

2023 if it has, as in our case, two or more of certain types of

E.U. financial institution subsidiaries, including broker-

dealers and banks. A non-E.U. group may have two E.U.

IHCs if a request for a second is approved. GSBE and GSPIC

will be subject to the single E.U. IHC requirement unless an

exemption is granted. The CRR requires E.U. IHCs to satisfy

capital and liquidity requirements, a minimum requirement

for own funds and eligible liabilities (MREL), and certain

other prudential requirements at a consolidated level. The

U.K. has not implemented a similar requirement to establish

an IHC; however, the PRA has introduced a requirement that

certain U.K. financial holding companies or a designated

U.K. group entity be responsible for the U.K. group’s

regulatory compliance. We have designated GSI for that

responsibility.

The BRRD II and the U.K. resolution regime subject

institutions to an MREL, which is generally consistent with

the FSB’s TLAC standard. GSI is required to maintain a

minimum level of internal MREL and provide the Bank of

England the right to exercise bail-in triggers over certain

intercompany regulatory capital and senior debt instruments

issued by GSI. These triggers enable the Bank of England to

write down such instruments or convert such instruments to

equity. The triggers can be exercised by the Bank of England

if it determines that GSI has reached the point of non-

viability and the FRB and the FDIC have not objected to the

bail-in or if Group Inc. enters bankruptcy or similar

proceedings. The Single Resolution Board’s internal MREL

requirements applicable to GSBE are required to be phased in

through January 2024.

Insolvency of a BHC or IDI. The Dodd-Frank Act created a

resolution regime, OLA, for BHCs and their affiliates that are

systemically important. Under OLA, the FDIC may be

appointed as receiver for the systemically important

institution and its failed non-bank subsidiaries if, upon the

recommendation of applicable regulators, the U.S. Secretary

of the Treasury determines, among other things, that the

institution is in default or in danger of default, that the

institution’s failure would have serious adverse effects on the

U.S. financial system and that resolution under OLA would

avoid or mitigate those effects.

If the FDIC is appointed as receiver under OLA, then the

powers of the receiver, and the rights and obligations of

creditors and other parties who have dealt with the

institution, would be determined under OLA, and not under

the bankruptcy or insolvency law that would otherwise

apply. The powers of the receiver under OLA are generally

based on the powers of the FDIC as receiver for depository

institutions under the FDIA, described below.

Substantial differences in the rights of creditors exist between

OLA and the U.S. Bankruptcy Code, including the right of

the FDIC under OLA to disregard the strict priority of

creditor claims in some circumstances, the use of an

administrative claims procedure to determine creditors’

claims (as opposed to the judicial procedure utilized in

bankruptcy proceedings), and the right of the FDIC to

transfer claims to a “bridge” entity. In addition, OLA limits

the ability of creditors to enforce certain contractual cross-

defaults against affiliates of the institution in receivership.

The FDIC has issued a notice that it would likely resolve a

failed FHC by transferring its assets to a “bridge” holding

company under its “single point of entry” or “SPOE” strategy

pursuant to OLA.

Under the FDIA, if the FDIC is appointed as conservator or

receiver for an IDI such as GS Bank USA, upon its insolvency

or in certain other events, the FDIC has broad powers,

including the power:

• To transfer any of the IDI’s assets and liabilities to a new

obligor, including a newly formed “bridge” bank, without

the approval of the depository institution’s creditors;

• To enforce the IDI’s contracts pursuant to their terms

without regard to any provisions triggered by the

appointment of the FDIC in that capacity; or

• To repudiate or disaffirm any contract or lease to which

the IDI is a party, the performance of which is determined

by the FDIC to be burdensome and the repudiation or

disaffirmance of which is determined by the FDIC to

promote the orderly administration of the IDI.

In addition, the claims of holders of domestic deposit

liabilities and certain claims for administrative expenses

against an IDI would be afforded a priority over other

general unsecured claims, including deposits at non-U.S.

branches and claims of debtholders of the IDI, in the

“liquidation or other resolution” of such an institution by

any receiver. As a result, whether or not the FDIC ever

sought to repudiate any debt obligations of GS Bank USA,

the debtholders (other than depositors at U.S. branches)

would be treated differently from, and could receive, if

anything, substantially less than, the depositors at U.S.

branches of GS Bank USA.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Goldman Sachs 2022 Form 10-K 17

Deposit Insurance. Deposits at GS Bank USA have the

benefit of FDIC insurance up to the applicable limits. The

FDIC’s Deposit Insurance Fund is funded by assessments on

IDIs. GS Bank USA’s assessment (subject to adjustment by

the FDIC) is currently based on its average total consolidated

assets less its average tangible equity during the assessment

period, its supervisory ratings and specified forward-looking

financial measures used to calculate the assessment rate. The

deposits of GSBE are covered by the German statutory

deposit protection program to the extent provided by law. In

addition, GSBE has elected to participate in the German

voluntary deposit protection program which provides

insurance for certain eligible deposits not covered by the

German statutory deposit program. Eligible deposits at GSIB

and the London branch of GS Bank USA are covered by the

U.K. Financial Services Compensation Scheme up to the

applicable limits.

In October 2022, the FDIC adopted a rule applicable to all

FDIC-insured banks that increased initial base deposit

insurance assessment rates by 2 basis points, beginning with

the first quarterly assessment period of 2023.

Prompt Corrective Action. The U.S. Federal Deposit

Insurance Corporation Improvement Act of 1991 (FDICIA)

requires the U.S. federal bank regulatory agencies to take

“prompt corrective action” in respect of depository

institutions that do not meet specified capital requirements.

FDICIA establishes five capital categories for FDIC-insured

banks, such as GS Bank USA: well-capitalized, adequately

capitalized, undercapitalized, significantly undercapitalized

and critically undercapitalized.

An institution may be downgraded to, or deemed to be in, a

capital category that is lower than is indicated by its capital

ratios if it is determined to be in an unsafe or unsound

condition or if it receives an unsatisfactory examination

rating with respect to certain matters. FDICIA imposes

progressively more restrictive constraints on operations,

management and capital distributions, as the capital category

of an institution declines. Failure to meet the capital

requirements could also require a depository institution to

raise capital. Ultimately, critically undercapitalized

institutions are subject to the appointment of a receiver or

conservator, as described in “Insolvency of an IDI or a BHC”

above.

The prompt corrective action regulations do not apply to

BHCs. However, the FRB is authorized to take appropriate

action at the BHC level, based upon the undercapitalized

status of the BHC’s depository institution subsidiaries. In

certain instances, relating to an undercapitalized depository

institution subsidiary, the BHC would be required to

guarantee the performance of the undercapitalized

subsidiary’s capital restoration plan and might be liable for

civil money damages for failure to fulfill its commitments on

that guarantee. Furthermore, in the event of the bankruptcy

of the BHC, the guarantee would take priority over the

BHC’s general unsecured creditors, as described in “Source of

Strength” above.

Volcker Rule and Other Restrictions on Activities. As a

BHC, we are subject to limitations on the types of business

activities in which we may engage.

Volcker Rule. The Volcker Rule prohibits “proprietary

trading,” but permits activities such as underwriting, market

making and risk-mitigation hedging, requires an extensive

compliance program and includes additional reporting and

record-keeping requirements.

In addition, the Volcker Rule limits the sponsorship of, and

investment in, “covered funds” (as defined in the rule) by

banking entities, including us. It also limits certain types of

transactions between us and our sponsored and advised

funds, similar to the limitations on transactions between

depository institutions and their affiliates. Covered funds

include our private equity funds, certain of our credit and real

estate funds, our hedge funds and certain other investment

structures. The limitation on investments in covered funds

requires us to limit our investment in each such fund to 3%

or less of the fund’s net asset value, and to limit our aggregate

investment in all such funds to 3% or less of our Tier 1

capital.

The FRB has granted our request for additional time until

July 2023 to conform our investments in, and relationships

with, certain legacy “illiquid funds” (as defined in the

Volcker Rule) that were in place prior to December 2013. See

Note 8 to the consolidated financial statements in Part II,

Item 8 of this Form 10-K for further information about our

investments in such funds.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Goldman Sachs 2022 Form 10-K

Other Restrictions. FHCs generally can engage in a broader

range of financial and related activities than are otherwise

permissible for BHCs as long as they continue to meet the

eligibility requirements for FHCs. The broader range of

permissible activities for FHCs includes underwriting, dealing

and making markets in securities and making investments in

non-FHCs (merchant banking activities). In addition, certain

FHCs, including us, are permitted to engage in certain

commodities activities in the U.S. that may otherwise be

impermissible for BHCs, so long as the assets held pursuant

to these activities do not equal 5% or more of their

consolidated assets.

The FRB, however, has the authority to limit an FHC’s

ability to conduct activities that would otherwise be

permissible, and will likely do so if the FHC does not

satisfactorily meet certain requirements of the FRB. For

example, if an FHC or any of its U.S. depository institution

subsidiaries ceases to maintain its status as well-capitalized or

well-managed, the FRB may impose corrective capital and/or

managerial requirements, as well as additional limitations or

conditions. If the deficiencies persist, the FHC may be

required to divest its U.S. depository institution subsidiaries

or to cease engaging in activities other than the business of

banking and certain closely related activities.

If any IDI subsidiary of an FHC fails to maintain at least a

“satisfactory” rating under the Community Reinvestment Act

(CRA), the FHC would be subject to restrictions on certain

new activities and acquisitions.

In addition, we are required to obtain prior FRB approval

before certain acquisitions and before engaging in certain

banking and other financial activities both within and outside

the U.S.

U.S. G-SIBs, like us, are also required to comply with a rule

regarding single counterparty credit limits, which imposes

more stringent requirements for credit exposures among

major financial institutions.

The New York State banking law imposes lending limits

(which take into account credit exposure from derivative

transactions) and other requirements that could impact the

manner and scope of GS Bank USA’s activities.

The U.S. federal bank regulatory agencies have issued

guidance that focuses on transaction structures and risk

management frameworks and that outlines high-level

principles for safe-and-sound leveraged lending, including

underwriting standards, valuation and stress testing. This

guidance has, among other things, limited the percentage

amount of debt that can be included in certain transactions.

As a German credit institution, GSBE will become subject to

Volcker Rule-type prohibitions under German banking law

and regulations on December 31, 2023 because its financial

assets exceeded certain thresholds. Prohibited activities

include (i) proprietary trading, (ii) high-frequency trading at

a German trading venue, and (iii) lending and guarantee

businesses with German hedge funds, German funds of hedge

funds or any non-German substantially leveraged alternative

investment funds, unless an exclusion or an exemption

applies. See “Volcker Rule” above for further information.

U.K. banks that have over £25 billion of core retail deposits

are required to separate their retail banking services from

their investment and international banking activities,

commonly known as “ring-fencing.” GSIB is not currently

subject to the ring-fencing requirement.

Broker-Dealer and Securities Regulation

Our broker-dealer subsidiaries, including GS&Co., are

subject to regulations that cover all aspects of the securities

business, including sales methods, trade practices, the use and

safekeeping of clients’ funds and securities, capital structure,

record-keeping, the financing of clients’ purchases, and the

conduct of directors, officers and employees. In the U.S., the

SEC is the federal agency responsible for the administration

of the federal securities laws.

U.S. state securities and other U.S. regulators also have

regulatory or oversight authority over GS&Co. For a

description of net capital requirements applicable to

GS&Co., see “Management’s Discussion and Analysis of

Financial Condition and Results of Operations — Capital

Management and Regulatory Capital — U.S. Regulated

Broker-Dealer Subsidiaries” in Part II, Item 7 of this Form 10-

The SEC issued a proposed rule in November 2021 which, if

adopted, would require lenders of securities to provide the

material terms of securities lending transactions to a

registered national securities association, such as FINRA.

The SEC requires broker-dealers to act in the best interest of

their customers. SEC rules require broker-dealers to provide

a standardized, short-form disclosure highlighting services

offered, applicable standards of conduct, fees and costs, the

differences between brokerage and advisory services, and any

conflicts of interest. In addition, several states have adopted

or proposed adopting uniform fiduciary duty standards

applicable to broker-dealers.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Goldman Sachs 2022 Form 10-K 19

In December 2022, the SEC issued four proposals to reform

the U.S. equity market structure. The SEC proposed

establishing a broker-dealer best execution standard, which

would require broker-dealers to use reasonable diligence to

ascertain the best market for a customer order so that the

resultant price to the customer is as favorable as possible

under prevailing market conditions. The best execution

standard applies to all securities and supplements, but does

not replace, the existing FINRA and Municipal Securities

Rulemaking Board (MSRB) best execution rules. The SEC

also proposed, among other things, to require that individual

investor orders routed through broker-dealers be exposed to

order-by-order competition in qualified auctions; to update

the minimum pricing increments, with variable price

increments based on the trading characteristics of stocks; and

to revise and expand reporting and disclosure requirements

relating to execution quality.

In January 2023, the SEC proposed a rule that would prohibit

participants involved in the creation of asset-backed

securities, including any underwriter, placement agent, initial

purchaser or sponsor of an asset-backed security (or any

affiliate or subsidiary), from engaging in any transaction that

would involve or result in a material conflict of interest

between the securitization participant and an investor in an

asset-backed security, including reducing its exposure to the

asset-backed securities, subject to certain exceptions.

The SEC, FINRA and regulators in various non-U.S.

jurisdictions have imposed both conduct-based and

disclosure-based requirements with respect to research

reports and research analysts and may impose additional

regulations.

GS&Co. and other U.S. subsidiaries are also subject to rules

adopted by U.S. federal agencies pursuant to the Dodd-Frank

Act that require any person who organizes or initiates certain

asset-backed securities transactions to retain a portion

(generally, at least five percent) of any credit risk that the

person conveys to a third party. For certain securitization

transactions, retention by third-party purchasers may satisfy

this requirement.

In Europe, we provide broker-dealer services, including

through GSBE, GSPIC and GSI, that are subject to oversight

by European and national regulators. These services are

regulated in accordance with E.U., U.K. and other national

laws and regulations. These laws require, among other

things, compliance with certain capital adequacy and

liquidity standards, customer protection requirements and

market conduct and trade reporting rules. Certain of our

European subsidiaries are also regulated by the securities,

derivatives and commodities exchanges of which they are

members.

In the E.U. and the U.K., the European Markets in Financial

Instruments Directive (MiFID II) established trading venue

categories for the purposes of discharging the obligation to

trade OTC derivatives on a trading platform, enhanced pre-

and post-trade transparency covering a wide range of

financial instruments, placed volume caps on non-transparent

liquidity trading for equities trading venues, limited the use

of broker-dealer equities crossing networks and created a

regime for systematic internalizers, which are investment

firms that execute client equity transactions outside a trading

venue. Additional control requirements apply to algorithmic

trading, high frequency trading and direct electronic access.

Commodities trading firms are required to calculate their

positions and adhere to specific position limits. MiFID II also

requires enhanced transaction reporting, the publication of

best execution data by investment firms and trading venues,

transparency on costs and charges of service to investors,

restrictions on the way investment managers can pay for the

receipt of investment research, rules limiting the payment and

receipt of soft commissions and other forms of inducements,

and mandatory unbundling for broker-dealers between

execution and other major services. Certain of our non-U.S.

subsidiaries, including GSBE and GSI, are subject to risk

retention requirements in connection with securitization

activities.

GSJCL, our regulated Japanese broker-dealer, is subject to

capital requirements imposed by Japan’s Financial Services

Agency. GSJCL is also regulated by the Tokyo Stock

Exchange, the Bank of Japan and the Ministry of Finance,

among others.

The Securities and Futures Commission in Hong Kong, the

China Securities Regulatory Commission, the Reserve Bank

of India, the Securities and Exchange Board of India, the

Australian Securities and Investments Commission, the

Australian Securities Exchange, the Monetary Authority of

Singapore, the Korean Financial Supervisory Service and the

Central Bank of Brazil, among others, regulate various of our

subsidiaries and also have capital standards and other

requirements comparable to the rules of the U.S. regulators.

Our exchange-based market-making activities are subject to

extensive regulation by a number of securities exchanges. As

a market maker on exchanges, we are required to maintain

orderly markets in the securities to which we are assigned.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Goldman Sachs 2022 Form 10-K

Swaps, Derivatives and Commodities Regulation

The commodity futures, commodity options and swaps

industry in the U.S. is subject to regulation under the U.S.

Commodity Exchange Act (CEA). The CFTC is the U.S.

federal agency charged with the administration of the CEA.

In addition, the SEC is the U.S. federal agency charged with

the regulation of security-based swaps. The rules and

regulations of various self-regulatory organizations, such as

the Chicago Mercantile Exchange, other futures exchanges

and the National Futures Association, also govern

commodity futures, commodity options and swaps activities.

The terms “swaps” and “security-based swaps” include a

wide variety of derivative instruments in addition to those

conventionally referred to as swaps (including certain

forward contracts and options), and relate to a wide variety

of underlying assets or obligations, including currencies,

commodities, interest or other monetary rates, yields, indices,

securities, credit events, loans and other financial obligations.

CFTC rules require registration of swap dealers, mandatory

clearing and execution of interest rate and credit default

swaps and real-time public reporting and adherence to

business conduct standards for all in-scope swaps. A number

of these requirements, particularly those regarding

recordkeeping and reporting, also apply to transactions that

do not involve a registered swap dealer. GS&Co. and other

subsidiaries, including GS Bank USA, GSBE, GSI and J.

Aron, are registered with the CFTC as swap dealers. The

CFTC has rules establishing capital requirements for swap

dealers that are not subject to the capital rules of a prudential

regulator, such as the FRB. The CFTC also has financial

reporting requirements for covered swap entities and capital

rules for CFTC-registered futures commission merchants that

provide explicit capital requirements for proprietary

positions in swaps and security-based swaps that are not

cleared by a clearing organization. Certain of our registered

swap dealers, including J. Aron, are subject to the CFTC’s

capital requirements.

Our affiliates registered as swap dealers are subject to the

margin rules issued by the CFTC (in the case of our non-bank

swap dealers) and the FRB (in the case of GS Bank USA and

GSBE). Inter-affiliate transactions under the CFTC and FRB

margin rules are generally exempt from initial margin

requirements.

SEC rules govern the registration and regulation of security-

based swap dealers. Security-based swaps are defined as

swaps on single securities, single loans or narrow-based

baskets or indices of securities. The SEC has adopted a

number of rules for security-based swap dealers, including (i)

capital, margin and segregation requirements; (ii) record-

keeping, financial reporting and notification requirements;

(iii) business conduct standards; (iv) regulatory and public

trade reporting; and (v) the application of risk mitigation

techniques to uncleared portfolios of security-based swaps.

Certain of our subsidiaries, including GS&Co., GS Bank USA

and GSBE, are registered with the SEC as security-based

swap dealers and subject to the SEC’s regulations regarding

security-based swaps. The SEC has proposed additional

regulations regarding security-based swaps that would,

among other things, require public reporting of large

positions in security-based swaps.

GS Bank USA is also subject to the FRB’s swaps margin rules.

These rules require the exchange of initial and variation

margin in connection with transactions in swaps and

security-based swaps that are not cleared through a registered

or exempt clearinghouse. GS Bank USA is required to post

and collect margin in connection with transactions with swap

dealers, security-based swap dealers, major swap participants

and major security-based swap participants, or financial end

users.

The CFTC and the SEC have adopted rules relating to cross-

border regulation of swaps and securities-based swaps, and

business conduct and registration requirements. The CFTC

and the SEC have entered into agreements with certain non-

U.S. regulators regarding the cross-border regulation of

derivatives and the mutual recognition of cross-border

execution facilities and clearinghouses, and have approved

substituted compliance with certain non-U.S. regulations

related to certain business conduct requirements and margin

rules. The U.S. prudential regulators have not yet made a

determination with respect to substituted compliance for

transactions subject to non-U.S. margin rules.

Similar types of regulation have been proposed or adopted in

jurisdictions outside the U.S., including in the E.U. and

Japan. Under the European Market Infrastructure Regulation

(EMIR), for example, the E.U. and the U.K. have established

regulatory requirements relating to portfolio reconciliation

and reporting, clearing certain OTC derivatives and

margining for uncleared derivatives activities. In addition,

under the European Markets in Financial Instruments

Directive and Regulation, transactions in certain types of

derivatives are required to be executed on regulated

platforms or exchanges.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Goldman Sachs 2022 Form 10-K 21

The CFTC has adopted rules that limit the size of positions

in physical commodity derivatives that can be held by any

entity, or any group of affiliates or other parties trading

under common ownership or control. The CFTC position

limits apply to futures on physical commodities and options

on such futures, apply to both physically and cash settled

positions and to swaps that are economically equivalent to

such futures and options. The position limit rules initially

impose limits in the spot month only (i.e., during the delivery

period for the physical commodities, which is typically a

period of several days). CFTC spot and non-spot month

limits will continue to apply to futures on certain legacy

agricultural commodities, and it is possible that non-spot

month limits will at some point be adopted for futures,

options on futures and swaps on other categories of physical

commodities.

J. Aron is authorized by the U.S. Federal Energy Regulatory

Commission (FERC) to sell wholesale physical power at

market-based rates. As a FERC-authorized power marketer,

J. Aron is subject to regulation under the U.S. Federal Power

Act and FERC regulations and to the oversight of FERC. As a

result of our investing activities, Group Inc. is also an

“exempt holding company” under the U.S. Public Utility

Holding Company Act of 2005 and applicable FERC rules.

In addition, as a result of our power-related and commodities

activities, we are subject to energy, environmental and other

governmental laws and regulations, as described in “Risk

Factors — Legal and Regulatory — Our commodities

activities, particularly our physical commodities activities,

subject us to extensive regulation and involve certain

potential risks, including environmental, reputational and

other risks that may expose us to significant liabilities and

costs” in Part I, Item 1A of this Form 10-K.

GS&Co. is registered with the CFTC as a futures commission

merchant, and several of our subsidiaries, including GS&Co.,

are registered with the CFTC and act as commodity pool

operators and commodity trading advisors. Goldman Sachs

Financial Markets, L.P. is registered with the SEC as an OTC

derivatives dealer.

Asset Management and Wealth Management

Regulation

Our asset management and wealth management businesses

are subject to extensive oversight by regulators around the

world relating to, among other things, the fair treatment of

clients, safeguarding of client assets, offerings of funds,

marketing activities, transactions among affiliates and our

management of client funds.

The federal securities laws impose fiduciary duties on

investment advisers, including GS&Co., Goldman Sachs

Asset Management, L.P. and our other U.S. registered

investment adviser subsidiaries. Additionally, SEC rules

require investment advisers to provide a standardized, short-

form disclosure highlighting services offered, applicable

standards of conduct, fees and costs, the differences between

brokerage and advisory services, and any conflicts of interest.

Several states have adopted or proposed adopting uniform

fiduciary duty standards applicable to advisers.

Certain of our European subsidiaries, including GSBE in the

E.U. and GSAMI in the U.K., are subject to MiFID II and/or

related regulations (including the U.K. legislation making

such regulations part of U.K. law), which govern the

approval, organizational, marketing and reporting

requirements of E.U. or U.K.-based investment managers and

the ability of investment fund managers located outside the

E.U. or the U.K. to access those markets. NNIP B.V. is

subject to similar requirements as a management company

licensed under the E.U. Undertakings for Collective

Investment in Transferable Securities (UCITS) Directive and

the E.U. Alternative Investment Fund Managers (AIFM)

Directive with additional authorizations for certain activities

regulated under MiFID II. Our asset management business in

the E.U. and the U.K. significantly depends on our ability to

delegate parts of our activities to other affiliates.

GSAMI is also subject to the prudential regime for U.K.

investment firms, the Investment Firms Prudential Regime

(IFPR), which governs the prudential requirements for U.K.

investment firms prudentially regulated by the FCA.

Consumer Regulation

Our U.S. consumer-oriented activities are subject to

supervision and regulation by the CFPB with respect to

federal consumer protection laws, including laws relating to

fair lending and the prohibition of unfair, deceptive or

abusive acts or practices in connection with the offer, sale or

provision of consumer financial products and services. Our

consumer-oriented activities are also subject to various state

and local consumer protection laws, rules and regulations,

which, among other things, impose obligations relating to

marketing, origination, servicing and collections activities in

our consumer businesses. Many of these laws, rules and

regulations also apply to our small business lending activities,

which are also subject to supervision and regulation by

federal and state regulators. In addition, our U.K. consumer

deposit-taking activities are subject to U.K. consumer

protection laws and regulations.

Compensation Practices

Our compensation practices are subject to oversight by the

FRB and, with respect to some of our subsidiaries and

employees, by other regulatory bodies worldwide.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Goldman Sachs 2022 Form 10-K

The FSB has released standards for implementation by local

regulators that are designed to encourage sound

compensation practices at banks and other financial

companies. The U.S. federal bank regulatory agencies have

also provided guidance designed to ensure that incentive

compensation arrangements at banking organizations take

into account risk and are consistent with safe and sound

practices. The guidance sets forth the following three key

principles with respect to incentive compensation

arrangements: (i) the arrangements should provide employees

with incentives that appropriately balance risk and financial

results in a manner that does not encourage employees to

expose their organizations to imprudent risk; (ii) the

arrangements should be compatible with effective controls

and risk management; and (iii) the arrangements should be

supported by strong corporate governance. The guidance

provides that supervisory findings with respect to incentive

compensation will be incorporated, as appropriate, into the

organization’s supervisory ratings, which can affect its ability

to make acquisitions or perform other actions. The guidance

also notes that enforcement actions may be taken against a

banking organization if its incentive compensation

arrangements or related risk management, control or

governance processes pose a risk to the organization’s safety

and soundness.

The Dodd-Frank Act requires U.S. financial regulators,

including the FRB and SEC, to adopt rules on incentive-based

payment arrangements at specified regulated entities having

at least $1 billion in total assets. The U.S. financial regulators

proposed revised rules in 2016, which have not been finalized.

In October 2022, the SEC adopted a final rule requiring

securities exchanges to adopt rules mandating, in the case of

a restatement, the recovery or “clawback” of excess

incentive-based compensation paid to current or former

executive officers and requiring listed issuers to disclose any

recovery analysis where recovery is triggered by a

restatement.

The NYDFS’ guidance emphasizes that any incentive

compensation arrangements tied to employee performance

indicators at banking institutions regulated by the NYDFS,

including GS Bank USA, must be subject to effective risk

management, oversight and control.

In the E.U., certain provisions in the CRR and CRD are

designed to meet the FSB’s compensation standards. These

provisions limit the ratio of variable to fixed compensation of

all employees at GSBE and of certain employees at our other

operating subsidiaries in the E.U., including those employees

identified as having a material impact on the risk profile of

regulated entities. CRR II and CRD V amended certain

aspects of these rules, including, by increasing minimum

variable compensation deferral periods. Substantially similar

requirements apply in the U.K. in relation to GSI and GSIB.

The E.U. and the U.K. have each also introduced investment

firm regimes, including rules regulating compensation for

certain persons providing services to certain investment

funds.

Anti-Money Laundering and Anti-Bribery Rules and

Regulations

The U.S. Bank Secrecy Act, as amended (BSA), including by

the USA PATRIOT Act of 2001, contains anti-money

laundering and financial transparency laws and authorizes or

mandates the promulgation of various regulations applicable

to financial institutions, including standards for verifying

client identification at account opening, and obligations to

monitor client transactions and report suspicious activities.

Through these and other provisions, the BSA seeks, among

other things, to promote the identification of parties that may

be involved in terrorism, money laundering or other

suspicious activities.

The Anti-Money Laundering Act of 2020 (AMLA), which

amends the BSA, is intended to comprehensively reform and

modernize U.S. anti-money laundering laws. Among other

things, the AMLA codifies a risk-based approach to anti-

money laundering compliance for financial institutions;

requires the U.S. Department of the Treasury to promulgate

priorities for anti-money laundering and countering the

financing of terrorism policy; requires the development of

standards by the U.S. Department of the Treasury for testing

technology and internal processes for BSA compliance;

expands enforcement- and investigation-related authority,

including a significant expansion in the available sanctions

for certain BSA violations; and expands BSA whistleblower

incentives and protections. Many of the statutory provisions

in the AMLA will require additional rulemakings, reports

and other measures, and the impact of the AMLA will

depend on, among other things, rulemaking and

implementation guidance. The Financial Crimes Enforcement

Network (FinCEN), a bureau of the U.S. Department of

Treasury has issued the priorities for anti-money laundering

and countering the financing of terrorism policy, as required

under the AMLA. The priorities include: corruption,

cybercrime, terrorist financing, fraud, transnational crime,

drug trafficking, human trafficking and proliferation

financing.

We are subject to other laws and regulations worldwide

relating to anti-money laundering and financial transparency,

including the E.U. Anti-Money Laundering Directives. In

addition, we are subject to the U.S. Foreign Corrupt Practices

Act (FCPA), the U.K. Bribery Act and other laws and

regulations worldwide regarding corrupt and illegal

payments, or providing anything of value, for the benefit of

government officials and others. The scope of the types of

payments or other benefits covered by these laws is very

broad. These laws and regulations include requirements

relating to the identification of clients, monitoring for and

reporting suspicious transactions, monitoring direct and

indirect payments to politically exposed persons, providing

information to regulatory authorities and law enforcement

agencies, and sharing information with other financial

institutions.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Goldman Sachs 2022 Form 10-K 23

Privacy and Cybersecurity Regulation

Our businesses are subject to numerous laws and regulations

relating to the privacy of information regarding clients,

employees and others. These include, but are not limited to,

the GLB Act, the California Consumer Privacy Act of 2018,

as amended by the California Privacy Rights Act of 2020

(CCPA), the E.U.’s General Data Protection Regulation

(GDPR), the U.K.’s Data Protection Act 2018, the Japanese

Personal Information Protection Act, the Personal

Information Protection Law of the People’s Republic of

China (PIPL), and the Hong Kong Personal Data (Privacy)

Ordinance. Among other things, the CCPA imposes

compliance obligations with regard to the collection, use and

disclosure of personal information. In addition, several other

states and non-U.S. jurisdictions have enacted, or are

proposing, privacy and data protection laws similar to the

GDPR and the CCPA. Furthermore, the GDPR has

heightened our privacy compliance obligations, impacted

certain of our businesses’ collection, processing and retention

of personal data and imposed strict standards for reporting

data breaches. The GDPR also provides for significant

penalties for non-compliance. The PIPL limits the legal bases

for processing personal information, contains heightened

notice and consent requirements for the handling of certain

types of personal information and imposes special cross-

border data transfer rules under certain circumstances.

Our businesses are also subject to laws and regulations

governing cybersecurity and related risks, and which require

regulatory disclosures of certain security incidents. The

NYDFS also requires financial institutions regulated by the

NYDFS, including GS Bank USA, to, among other things, (i)

establish and maintain a cybersecurity program designed to

ensure the confidentiality, integrity and availability of their

information systems; (ii) implement and maintain a written

cybersecurity policy setting forth policies and procedures for

the protection of their information systems and nonpublic

information; and (iii) designate a Chief Information Security

Officer.

In January 2023, the E.U. Digital Operational Resilience Act

(DORA) became effective, and will apply from January 2025.

DORA requires E.U. financial entities, such as GSBE, to have

a comprehensive governance and control framework for the

management of information and communications technology

(ICT) risk.

In addition, in March 2022, the SEC proposed new rules that

would require disclosures about material cybersecurity

incidents on Form 8-K and updated disclosures about

previously disclosed cybersecurity incidents on Forms 10-Q

and 10-K.

Information about our Executive Officers

Set forth below are the name, age, present title, principal

occupation and certain biographical information for the

executive officers who have been appointed by, and serve at

the pleasure of, Group Inc.’s Board.

Philip R. Berlinski, 46

Mr. Berlinski has been Global Treasurer since October 2021;

he also serves as Chief Executive Officer of Goldman Sachs

Bank USA. He had previously served as Chief Operating

Officer of Global Equities from May 2019. Prior to that, he

was Co-Head of Global Equities Trading and Execution

Services from September 2016 to May 2019.

Denis P. Coleman III, 49

Mr. Coleman has been Chief Financial Officer since January

2022. He had previously served as Deputy Chief Financial

Officer from September 2021 and, prior to that, Co-Head of

the Global Financing Group from June 2018 to September

2021. From 2016 to June 2018, he was Head of the EMEA

Financing Group, and from 2009 to 2016 he was Head of

EMEA Credit Finance in London.

Sheara J. Fredman, 47

Ms. Fredman has been Controller and Chief Accounting

Officer since November 2019. She had previously served as

Head of Regulatory Controllers from September 2017 and,

prior to that, she had served as Global Product Controller.

Brian J. Lee, 56

Mr. Lee has been Chief Risk Officer since November 2019.

He had previously served as Controller and Chief Accounting

Officer from March 2017 and, prior to that, he had served as

Deputy Controller from 2014.

Ericka T. Leslie, 52

Ms. Leslie has been Chief Administrative Officer since

February 2022. She had previously served as Global Head of

Operations and Platform Engineering for the Global Markets

Division from March 2020, as Global Head of Operations for

the Securities Division from January 2019 and as Head of

Global Operations for the Commodities business from

September 2008.

John F.W. Rogers, 66

Mr. Rogers has been an Executive Vice President since April

2011 and Chief of Staff and Secretary to the Board since

December 2001.

Kathryn H. Ruemmler, 51

Ms. Ruemmler has been the Chief Legal Officer, General

Counsel and Secretary since March 2021, and was previously

Global Head of Regulatory Affairs from April 2020. From

June 2014 to April 2020, Ms. Ruemmler was a Litigation

Partner at Latham & Watkins LLP, a global law firm, where

she was Global Chair of the White Collar Defense and

Investigations practice.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Goldman Sachs 2022 Form 10-K

David Solomon, 61

Mr. Solomon has been Chairman of the Board since January

2019 and Chief Executive Officer and a director since

October 2018. He had previously served as President and

Chief or Co-Chief Operating Officer from January 2017 and

Co-Head of the Investment Banking Division from July 2006

to December 2016.

John E. Waldron, 53

Mr. Waldron has been President and Chief Operating Officer

since October 2018. He had previously served as Co-Head of

the Investment Banking Division from December 2014. Prior

to that he was Global Head of Investment Banking Services/

Client Coverage for the Investment Banking Division and had

oversight of the Investment Banking Services Leadership

Group, and from 2007 to 2009 was Global Co-Head of the

Financial Sponsors Group.

Available Information

Our internet address is www.goldmansachs.com and the

investor relations section of our website is located at

www.goldmansachs.com/investor-relations, where we make

available, free of charge, our annual reports on Form 10-K,

quarterly reports on Form 10-Q and current reports on Form

8-K and amendments to those reports filed or furnished

pursuant to Section 13(a) or 15(d) of the Exchange Act, as

well as proxy statements, as soon as reasonably practicable

after we electronically file such material with, or furnish it to,

the SEC. Also posted on our website, and available in print

upon request of any shareholder to our Investor Relations

Department (Investor Relations), are our certificate of

incorporation and by-laws, charters for our Audit, Risk,

Compensation, Corporate Governance and Nominating, and

Public Responsibilities Committees, our Policy Regarding

Director Independence Determinations, our Policy on

Reporting of Concerns Regarding Accounting and Other

Matters, our Corporate Governance Guidelines and our

Code of Business Conduct and Ethics governing our

directors, officers and employees. Within the time period

required by the SEC, we will post on our website any

amendment to the Code of Business Conduct and Ethics and

any waiver applicable to any executive officer, director or

senior financial officer.

Our website also includes information about (i) purchases

and sales of our equity securities by our executive officers and

directors; (ii) disclosure relating to certain non-GAAP

financial measures (as defined in the SEC’s Regulation G)

that we may make public orally, telephonically, by webcast,

by broadcast or by other means; (iii) our U.S. Dodd-Frank

Wall Street Reform and Consumer Protection Act Stress

Tests results; (iv) the public portion of our resolution plan

submission; (v) our Pillar 3 disclosure; (vi) our average daily

LCR; (vii) our People Strategy Report; (viii) our

Sustainability Report; and (ix) our Task Force on Climate-

Related Financial Disclosures (TCFD) Report.

Investor Relations can be contacted at The Goldman Sachs

Group, Inc., 200 West Street, 29th Floor, New York, New

York 10282, Attn: Investor Relations, telephone:

212-902-0300, e-mail: [email protected]. We use

the following, as well as other social media channels, to

disclose public information to investors, the media and

others:

• Our website (www.goldmansachs.com);

• Our Twitter account (twitter.com/GoldmanSachs); and

• Our Instagram account (instagram.com/GoldmanSachs).

Our officers may use similar social media channels to disclose

public information. It is possible that certain information we

or our officers post on our website and on social media could

be deemed material, and we encourage investors, the media

and others interested in Goldman Sachs to review the

business and financial information we or our officers post on

our website and on the social media channels identified

above. The information on our website and those social

media channels is not incorporated by reference into this

Form 10-K.

Forward-Looking Statements

We have included in this Form 10-K, and our management

may make, statements that may constitute “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 or

statements of current conditions, but instead represent only

our beliefs regarding future events, many of which, by their

nature, are inherently uncertain and outside our control.

By identifying these statements for you in this manner, we are

alerting you to the possibility that our actual results, financial

condition, liquidity and capital actions may differ, possibly

materially, from the anticipated results, financial condition,

liquidity and capital actions in these forward-looking

statements. Important factors that could cause our results,

financial condition, liquidity and capital actions to differ

from those in these statements include, among others, those

described below and in “Risk Factors” in Part I, Item 1A of

this Form 10-K.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Goldman Sachs 2022 Form 10-K 25

These statements may relate to, among other things, (i) our

future plans and results, including our target ROE, ROTE,

efficiency ratio, CET1 capital ratio and firmwide assets under

supervision (AUS) inflows, and how they can be achieved, (ii)

trends in or growth opportunities for our businesses,

including the timing, costs, profitability, benefits and other

aspects of business and strategic initiatives and their impact

on our efficiency ratio, (iii) our level of future compensation

expense, including as a percentage of both operating expenses

and revenues, net of provision for credit losses, (iv) our

Investment banking fees backlog and future results, (v) our

expected interest income and interest expense, (vi) our

expense savings and strategic locations initiatives, (vii)

expenses we may incur, including future litigation expense

and expenses from investing in our platform solutions

business, (viii) the projected growth of our deposits and other

funding, asset liability management and funding strategies

and related interest expense savings, (ix) our business

initiatives, including transaction banking and new products

in our consumer platforms business, (x) our planned 2023

benchmark debt issuances, (xi) the amount, composition and

location of global core liquid assets (GCLA) we expect to

hold, (xii) our credit exposures, (xiii) our expected provisions

for credit losses, (xiv) the adequacy of our allowance for

credit losses, (xv) the projected growth of our platform

solutions business, (xvi) the objectives and effectiveness of

our business continuity planning, information security

program, risk management and liquidity policies, (xvii) our

resolution plan and strategy and their implications for

stakeholders, (xviii) the design and effectiveness of our

resolution capital and liquidity models and triggers and alerts

framework, (xix) the results of stress tests, the effect of

changes to regulations, and our future status, activities or

reporting under banking and financial regulation, (xx) our

expected tax rate, (xxi) the future state of our liquidity and

regulatory capital ratios, and our prospective capital

distributions (including dividends and repurchases), (xxii)

our expected SCB and G-SIB surcharge, (xxiii) legal

proceedings, governmental investigations or other

contingencies, (xxiv) the asset recovery guarantee and our

remediation activities related to our 1Malaysia Development

Berhad (1MDB) settlements, (xxv) the replacement of

Interbank Offered Rates and our transition to alternative

risk-free reference rates, (xxvi) the impact of the COVID-19

pandemic on our business, results, financial position and

liquidity, (xxvii) the effectiveness of our management of our

human capital, including our diversity goals, (xxviii) our

sustainability and carbon neutrality targets and goals, (xxix)

future inflation and (xxx) the impact of Russia’s invasion of

Ukraine and related sanctions and other developments on our

business, results and financial position.

Statements about our target return on average common

shareholders’ equity (ROE), return on average tangible

common shareholders’ equity (ROTE), efficiency ratio and

expense savings, and how they can be achieved, are based on

our current expectations regarding our business prospects

and are subject to the risk that we may be unable to achieve

our targets due to, among other things, changes in our

business mix, lower profitability of new business initiatives,

increases in technology and other costs to launch and bring

new business initiatives to scale, and increases in liquidity

requirements.

Statements about our target ROE, ROTE and CET1 capital

ratio, and how they can be achieved, are based on our current

expectations regarding the capital requirements applicable to

us and are subject to the risk that our actual capital

requirements may be higher than currently anticipated

because of, among other factors, changes in the regulatory

capital requirements applicable to us resulting from changes

in regulations or the interpretation or application of existing

regulations or changes in the nature and composition of our

activities. Statements about our firmwide AUS inflows targets

are based on our current expectations regarding our

fundraising prospects and are subject to the risk that actual

inflows may be lower than expected due to, among other

factors, competition from other asset managers, changes in

investment preferences and changes in economic or market

conditions.

Statements about the timing, costs, profitability, benefits and

other aspects of business and expense savings initiatives, the

level and composition of more durable revenues and increases

in market share are based on our current expectations

regarding our ability to implement these initiatives and actual

results may differ, possibly materially, from current

expectations due to, among other things, a delay in the timing

of these initiatives, increased competition and an inability to

reduce expenses and grow businesses with durable revenues.

Statements about the level of future compensation expense,

including as a percentage of both operating expenses and

revenues, net of provision for credit losses, and our efficiency

ratio as our platform solutions business reaches scale are

subject to the risks that the compensation and other costs to

operate our businesses, including platform initiatives, may be

greater than currently expected.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Goldman Sachs 2022 Form 10-K

Statements about our Investment banking fees backlog and

future results are subject to the risk that such transactions

may be modified or may not be completed at all, and related

net revenues may not be realized or may be materially less

than expected. Important factors that could have such a

result include, for underwriting transactions, a decline or

weakness in general economic conditions, an outbreak or

worsening of hostilities, including the escalation or

continuation of the war between Russia and Ukraine,

continuing volatility in the securities markets or an adverse

development with respect to the issuer of the securities and,

for advisory transactions, a decline in the securities markets,

an inability to obtain adequate financing, an adverse

development with respect to a party to the transaction or a

failure to obtain a required regulatory approval. For

information about other important factors that could

adversely affect our Investment banking fees, see “Risk

Factors” in Part I, Item 1A of this Form 10-K.

Statements about the projected growth of our deposits and

other funding, asset liability management and funding

strategies and related interest expense savings, and our

platform solutions business, are subject to the risk that actual

growth and savings may differ, possibly materially, from that

currently anticipated due to, among other things, changes in

interest rates and competition from other similar products.

Statements about planned 2023 benchmark debt issuances

and the amount, composition and location of GCLA we

expect to hold are subject to the risk that actual issuances and

GCLA levels may differ, possibly materially, from that

currently expected due to changes in market conditions,

business opportunities or our funding and projected liquidity

needs.

Statements about our expected provisions for credit losses are

subject to the risk that actual credit losses may differ and our

expectations may change, possibly materially, from that

currently anticipated due to, among other things, changes to

the composition of our loan portfolio and changes in the

economic environment in future periods and our forecasts of

future economic conditions, as well as changes in our models,

policies and other management judgments.

Statements about our future effective income tax rate are

subject to the risk that it may differ from the anticipated rate

indicated in such statements, possibly materially, due to,

among other things, changes in the tax rates applicable to us,

changes in our earnings mix, our profitability and entities in

which we generate profits, the assumptions we have made in

forecasting our expected tax rate, the interpretation or

application of existing tax statutes and regulations, as well as

any corporate tax legislation that may be enacted or any

guidance that may be issued by the U.S. Internal Revenue

Service.

Statements about the future state of our liquidity and

regulatory capital ratios (including our SCB and G-SIB

surcharge), and our prospective capital distributions (including

dividends and repurchases), are subject to the risk that our

actual liquidity, regulatory capital ratios and capital

distributions may differ, possibly materially, from what is

currently expected due to, among other things, the need to use

capital to support clients, increased regulatory requirements

resulting from changes in regulations or the interpretation or

application of existing regulations, results of applicable

supervisory stress tests, changes to the composition of our

balance sheet and the impact of taxes on share repurchases.

Statements about the risk exposure related to the asset recovery

guarantee provided to the Government of Malaysia are subject

to the risk that the actual value of, or credit received for, assets

and proceeds from assets seized and returned to the

Government of Malaysia may be less than currently

anticipated. Statements about the progress or the status of

remediation activities relating to 1MDB are based on our

expectations regarding our current remediation plans.

Accordingly, our ability to complete the remediation activities

may change, possibly materially, from what is currently

expected.

Statements about our objectives in management of our human

capital, including our diversity goals, are based on our current

expectations and are subject to the risk that we may not

achieve these objectives and goals due to, among other things,

competition in recruiting and attracting diverse candidates and

unsuccessful efforts in retaining diverse employees.

Statements about our sustainability and carbon neutrality

targets and goals are based on our current expectations and are

subject to the risk that we may not achieve these targets and

goals due to, among other things, global socio-demographic

and economic trends, energy prices, lack of technological

innovations, climate-related conditions and weather events,

legislative and regulatory changes, consumer behavior and

demand, and other unforeseen events or conditions.

Statements about future inflation are subject to the risk that

actual inflation may differ, possibly materially, due to, among

other things, changes in economic growth, unemployment or

consumer demand.

Statements about the impact of Russia’s invasion of Ukraine

and related sanctions and other developments on our business,

results and financial position are subject to the risks that

hostilities may escalate and expand, that sanctions may

increase and that the actual impact may differ, possibly

materially, from what is currently expected.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Goldman Sachs 2022 Form 10-K 27

Item 1A. Risk Factors

We face a variety of risks that are substantial and inherent in

our businesses.

The following is a summary of some of the more important

factors that could affect our businesses:

Market

• Our businesses have been and may in the future be

adversely affected by conditions in the global financial

markets and broader economic conditions.

• Our businesses have been and may in the future be

adversely affected by declining asset values, particularly

where we have net “long” positions, receive fees based on

the value of assets managed, or receive or post collateral.

• Our market-making activities have been and may in the

future be affected by changes in the levels of market

volatility.

• Our investment banking, client intermediation, asset

management and wealth management businesses have been

adversely affected and may in the future be adversely

affected by market uncertainty or lack of confidence

among investors and CEOs due to declines in economic

activity and other unfavorable economic, geopolitical or

market conditions.

• Our asset management and wealth management businesses

have been and may in the future be adversely affected by

the poor investment performance of our investment

products or a client preference for products other than

those which we offer or for products that generate lower

fees.

• Inflation has had, and could continue to have, a negative

effect on our business, results of operations and financial

condition.

Liquidity

• Our liquidity, profitability and businesses may be adversely

affected by an inability to access the debt capital markets

or to sell assets.

• Our businesses have been and may in the future be

adversely affected by disruptions or lack of liquidity in the

credit markets, including reduced access to credit and

higher costs of obtaining credit.

• Reductions in our credit ratings or an increase in our credit

spreads may adversely affect our liquidity and cost of

funding.

• Group Inc. is a holding company and its liquidity depends

on payments and loans from its subsidiaries, many of

which are subject to legal, regulatory and other restrictions

on providing funds or assets to Group Inc.

Credit

• Our businesses, profitability and liquidity may be adversely

affected by deterioration in the credit quality of or defaults

by third parties.

• Concentration of risk increases the potential for significant

losses in our market-making, underwriting, investing and

financing activities.

• Derivative transactions and delayed documentation or

settlements may expose us to credit risk, unexpected risks

and potential losses.

Operational

• A failure in our operational systems or human error,

malfeasance or other misconduct, could impair our

liquidity, disrupt our businesses, result in the disclosure of

confidential information, damage our reputation and cause

losses.

• A failure or disruption in our infrastructure, or in the

operational systems or infrastructure of third parties, could

impair our liquidity, disrupt our businesses, damage our

reputation and cause losses.

• A failure to protect our computer systems, networks and

information, and our clients’ information, against cyber

attacks and similar threats could impair our ability to

conduct our businesses, result in the disclosure, theft or

destruction of confidential information, damage our

reputation and cause losses.

• We may incur losses as a result of ineffective risk

management processes and strategies.

Legal and Regulatory

• Our businesses and those of our clients are subject to

extensive and pervasive regulation around the world.

• A failure to appropriately identify and address potential

conflicts of interest could adversely affect our businesses.

• We may be adversely affected by increased governmental

and regulatory scrutiny or negative publicity.

• Substantial civil or criminal liability or significant

regulatory action against us could have material adverse

financial effects or cause us significant reputational harm,

which in turn could seriously harm our business prospects.

• In conducting our businesses around the world, we are

subject to political, legal, regulatory and other risks that

are inherent in operating in many countries.

• The application of regulatory strategies and requirements

in the U.S. and non-U.S. jurisdictions to facilitate the

orderly resolution of large financial institutions could

create greater risk of loss for Group Inc.’s security holders.

• The application of Group Inc.’s proposed resolution

strategy could result in greater losses for Group Inc.’s

security holders.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Goldman Sachs 2022 Form 10-K

• Our commodities activities, particularly our physical

commodities activities, subject us to extensive regulation

and involve certain potential risks, including

environmental, reputational and other risks that may

expose us to significant liabilities and costs.

Competition

• Our results have been and may in the future be adversely

affected by the composition of our client base.

• The financial services industry is highly competitive.

• The growth of electronic trading and the introduction of

new products and technologies, including trading and

distributed ledger technologies, including cryptocurrencies,

has increased competition.

• Our businesses would be adversely affected if we are

unable to hire and retain qualified employees.

Market Developments and General Business

Environment

• Our businesses, financial condition, liquidity and results of

operations have been and may in the future be adversely

affected by unforeseen or catastrophic events, including

pandemics, terrorist attacks, extreme weather events or

other natural disasters.

• Climate change could disrupt our businesses and adversely

affect client activity levels and the creditworthiness of our

clients and counterparties, and our efforts to address

concerns relating to climate change could result in damage

to our reputation.

• Our business, financial condition, liquidity and results of

operations may be adversely affected by disruptions in the

global economy caused by Russia’s invasion of Ukraine

and related sanctions and other developments.

• Certain of our businesses, our funding instruments and

financial products may be adversely affected by changes in

or the discontinuance of Interbank Offered Rates (IBORs),

in particular USD LIBOR.

• Certain of our businesses and our funding instruments may

be adversely affected by changes in other reference rates,

currencies, indexes, baskets or ETFs to which products we

offer or funding that we raise are linked.

• Our business, financial condition, liquidity and results of

operations may be adversely affected by disruptions in the

global economy caused by escalating tensions between the

U.S. and China.

• We face enhanced risks as new business initiatives and

acquisitions lead us to engage in new activities, operate in

new locations, transact with a broader array of clients and

counterparties and expose us to new asset classes and

markets.

• We may not be able to fully realize the expected benefits or

synergies from acquisitions or other business initiatives in

the time frames we expect, or at all.

The following are detailed descriptions of our Risk Factors

summarized above:

Market

Our businesses have been and may in the future be

adversely affected by conditions in the global financial

markets and broader economic conditions.

Many of our businesses, by their nature, do not produce

predictable earnings, and all of our businesses are materially

affected by conditions in the global financial markets and

economic conditions generally, both directly and through

their impact on client activity levels and creditworthiness.

These conditions can change suddenly and negatively.

Our financial performance is highly dependent on the

environment in which our businesses operate. A favorable

business environment is generally characterized by, among

other factors, high global gross domestic product growth,

regulatory and market conditions that result in transparent,

liquid and efficient capital markets, low inflation, business,

consumer and investor confidence, stable geopolitical

conditions and strong business earnings.

Unfavorable or uncertain economic and market conditions

can be caused by: low levels of or declines in economic

growth, business activity or investor, business or consumer

confidence; concerns over a potential recession; changes in

consumer spending or borrowing patterns; pandemics;

limitations on the availability or increases in the cost of credit

and capital; illiquid markets; increases in inflation, interest

rates, exchange rate or basic commodity price volatility or

default rates; high levels of inflation or stagflation; concerns

about sovereign defaults; uncertainty concerning fiscal or

monetary policy, government shutdowns, debt ceilings or

funding; the extent of and uncertainty about potential

increases in tax rates and other regulatory changes;

limitations on international trade and travel; laws and

regulations that limit trading in, or the issuance of, securities

of issuers outside their domestic markets; outbreaks of

domestic or international tensions or hostilities, terrorism,

nuclear proliferation, cybersecurity threats or attacks and

other forms of disruption to or curtailment of global

communication, energy transmission or transportation

networks or other geopolitical instability or uncertainty;

corporate, political or other scandals that reduce investor

confidence in capital markets; extreme weather events or

other natural disasters; or a combination of these or other

factors.

The financial services industry and the securities and other

financial markets have been materially and adversely affected

in the past by significant declines in the values of nearly all

asset classes, by a serious lack of liquidity and by high levels

of borrower defaults. In addition, concerns about actual or

potential increases in interest rates, inflation and other

borrowing costs, a resurgence of COVID-19 cases, European

sovereign debt risk and its impact on the European banking

system, and limitations on international trade, have, at times,

negatively impacted the levels of client activity.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Goldman Sachs 2022 Form 10-K 29

General uncertainty about economic, political and market

activities, and the scope, timing and impact of regulatory

reform, as well as weak consumer, investor and CEO

confidence resulting in large part from such uncertainty, has

in the past negatively impacted client activity, which can

adversely affect many of our businesses. Periods of low

volatility and periods of high volatility combined with a lack

of liquidity, have at times had an unfavorable impact on our

market-making businesses.

Changes, or proposed changes, to U.S. international trade

and investment policies, particularly with important trading

partners, have in recent years negatively impacted financial

markets. Continued or escalating tensions may result in

further actions taken by the U.S. or other countries that could

disrupt international trade and investment and adversely

affect financial markets. Those actions could include, among

others, the implementation of sanctions, tariffs or foreign

exchange measures, the large-scale sale of U.S. Treasury

securities or other restrictions on cross-border trade,

investment, or transfer of information or technology. Any

such developments could adversely affect our or our clients’

businesses.

Financial institution returns may be negatively impacted by

increased funding costs due in part to the lack of perceived

government support of such institutions in the event of future

financial crises relative to financial institutions in countries in

which governmental support is maintained. In addition,

liquidity in the financial markets has in the past been, and

could in the future be, negatively impacted as market

participants and market practices and structures adjust to

evolving regulatory frameworks.

In January 2023, the outstanding debt of the U.S. reached its

statutory limit and the U.S. Treasury Department

commenced taking extraordinary measures to prevent the

U.S. from defaulting on its obligations. If Congress does not

raise the debt ceiling, the U.S. could default on its

obligations, including Treasury securities that play an

integral role in financial markets. A default by the U.S. could

result in unprecedented market volatility and illiquidity,

heightened operational risks relating to the clearance and

settlement of transactions, margin and other disputes with

clients and counterparties, an adverse impact to investors

including money market funds that invest in U.S. Treasuries,

downgrades in the U.S. credit rating, further increases in

interest rates and borrowing costs and a recession in the U.S.

or other economies. Even if the U.S. does not default,

continued uncertainty relating to the debt ceiling could result

in downgrades of the U.S. credit rating, which could

adversely affect market conditions, lead to margin disputes,

further increases in interest rates and borrowing costs and

necessitate significant operational changes among market

participants, including us. A downgrade of the federal

government’s credit rating could also materially and

adversely affect the market for repurchase agreements,

securities borrowing and lending, and other financings

typically collateralized by U.S. Treasury or agency

obligations. Further, the fair value, liquidity and credit

ratings of securities issued by, or other obligations of,

agencies of the U.S. government or related to the U.S.

government or its agencies, as well as municipal bonds could

be similarly adversely affected.

Our businesses have been and may in the future be

adversely affected by declining asset values,

particularly where we have net “long” positions,

receive fees based on the value of assets managed, or

receive or post collateral.

Many of our businesses have net “long” positions in debt

securities, loans, derivatives, mortgages, equities (including

private equity and real estate) and most other asset classes.

These include positions we take when we act as a principal to

facilitate our clients’ activities, including our exchange-based

market-making activities, or commit large amounts of capital

to maintain positions in interest rate and credit products, as

well as through our currencies, commodities, equities and

mortgage-related activities. In addition, we invest in similar

asset classes. Substantially all of our investing and market-

making positions and a portion of our loans are marked-to-

market on a daily or other periodic basis and declines in asset

values directly and promptly impact our earnings, unless we

have effectively “hedged” our exposures to those declines.

In certain circumstances (particularly in the case of credit

products, including leveraged loans, and private equities or

other securities that are not freely tradable or lack established

and liquid trading markets), it may not be possible or

economic to hedge our exposures and to the extent that we

do so the hedge may be ineffective or may greatly reduce our

ability to profit from increases in the values of the assets.

Sudden declines and significant volatility in the prices of

assets have in the past substantially curtailed or eliminated,

and may in the future substantially curtail or eliminate, the

trading markets for certain assets, which may make it

difficult to sell, hedge or value such assets. We may incur

losses from time to time as trading markets deteriorate or

cease to function, including with respect to loan

commitments we have made or securities offerings we have

underwritten. The inability to sell or effectively hedge assets

reduces our ability to limit losses in such positions and the

difficulty in valuing assets has in the past negatively affected,

and may in the future negatively affect, our capital, liquidity

or leverage ratios, our funding costs and our ability to deploy

capital.

In our exchange-based market-making activities, we are

obligated by stock exchange rules to maintain an orderly

market, including by purchasing securities in a declining

market. In markets where asset values are declining and in

volatile markets, this results in losses and an increased need

for liquidity.

We receive asset-based management fees based on the value

of our clients’ portfolios or investment in funds managed by

us and, in some cases, we also receive incentive fees based on

increases in the value of such investments. Declines in asset

values would ordinarily reduce the value of our clients’

portfolios or fund assets, which in turn would typically

reduce the fees we earn for managing such assets.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Goldman Sachs 2022 Form 10-K

We post collateral to support our obligations and receive

collateral that supports the obligations of our clients and

counterparties. When the value of the assets posted as

collateral or the credit ratings of the party posting collateral

decline, the party posting the collateral may need to provide

additional collateral or, if possible, reduce its trading

position. An example of such a situation is a “margin call” in

connection with a brokerage account. Therefore, declines in

the value of asset classes used as collateral mean that either

the cost of funding positions is increased or the size of

positions is decreased. If we are the party providing

collateral, this can increase our costs and reduce our

profitability and if we are the party receiving collateral, this

can also reduce our profitability by reducing the level of

business done with our clients and counterparties.

In addition, volatile or less liquid markets increase the

difficulty of valuing assets, which can lead to costly and time-

consuming disputes over asset values and the level of required

collateral, as well as increased credit risk to the recipient of

the collateral due to delays in receiving adequate collateral. In

cases where we foreclose on collateral, sudden declines in the

value or liquidity of the collateral have in the past resulted in

and may in the future, despite credit monitoring, over-

collateralization, the ability to call for additional collateral or

the ability to force repayment of the underlying obligation,

result in significant losses to us, especially where there is a

single type of collateral supporting the obligation. In

addition, we have been and may in the future be subject to

claims that the foreclosure was not permitted under the legal

documents, was conducted in an improper manner, including

in violation of law, or caused a client or counterparty to go

out of business.

Our market-making activities have been and may in

the future be affected by changes in the levels of

market volatility.

Certain of our market-making activities depend on market

volatility to provide trading and arbitrage opportunities to

our clients, and decreases in volatility have reduced and may

in the future reduce these opportunities and the level of client

activity associated with them and adversely affect the results

of these activities. Increased volatility, while it can increase

trading volumes and spreads, also increases risk as measured

by Value-at-Risk (VaR) and may expose us to increased risks

in connection with our market-making activities or may

cause us to reduce our inventory in order to avoid increasing

our VaR. Limiting the size of our market-making positions

can adversely affect our profitability. In periods when

volatility is increasing, but asset values are declining

significantly, it may not be possible to sell assets at all or it

may only be possible to do so at steep discounts. In those

circumstances, we have been and may in the future be forced

to either take on additional risk or to realize losses in order to

decrease our VaR. In addition, increases in volatility increase

the level of our RWAs, which increases our capital

requirements.

Our investment banking, client intermediation, asset

management and wealth management businesses

have been adversely affected and may in the future be

adversely affected by market uncertainty or lack of

confidence among investors and CEOs due to

declines in economic activity and other unfavorable

economic, geopolitical or market conditions.

Our investment banking business has been and may in the

future be adversely affected by market conditions. Poor

economic conditions and other uncertain geopolitical

conditions may adversely affect and have in the past

adversely affected investor and CEO confidence, resulting in

significant industry-wide declines in the size and number of

underwritings and of advisory transactions, which would

likely have an adverse effect on our revenues and our profit

margins. In particular, because a significant portion of our

investment banking revenues is derived from our

participation in large transactions, a decline in the number of

large transactions has in the past and would in the future

adversely affect our investment banking business. Similarly,

in recent years, cross-border initial public offerings and other

securities offerings have accounted for a significant

proportion of new issuance activity. Legislative, regulatory or

other changes that limit trading in, or the issuance of,

securities outside the issuers’ domestic markets, that result in

or could result in the delisting or removal of securities from

exchanges or indices, have in the past adversely affected and

would in the future adversely affect our underwriting and

client intermediation businesses. Furthermore, changes, or

proposed changes, to international trade and investment

policies of the U.S. and other countries could negatively affect

market activity levels and our revenues.

In certain circumstances, market uncertainty or general

declines in market or economic activity may adversely affect

our client intermediation businesses by decreasing levels of

overall activity or by decreasing volatility, but at other times

market uncertainty and even declining economic activity may

result in higher trading volumes or higher spreads or both.

Market uncertainty, volatility and adverse economic

conditions, as well as declines in asset values, may cause our

clients to transfer their assets out of our funds or other

products or their brokerage accounts and result in reduced

net revenues, principally in our asset management and wealth

management businesses. Even if clients do not withdraw their

funds, they may invest them in products that generate less fee

income.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Goldman Sachs 2022 Form 10-K 31

Our asset management and wealth management

businesses have been and may in the future be

adversely affected by the poor investment

performance of our investment products or a client

preference for products other than those which we

offer or for products that generate lower fees.

Poor investment returns in our asset management and wealth

management businesses, due to either general market

conditions or underperformance (relative to our competitors

or to benchmarks) by funds or accounts that we manage or

investment products that we design or sell, affect our ability

to retain existing assets and to attract new clients or

additional assets from existing clients. This could affect the

management and incentive fees that we earn on AUS or the

commissions and net spreads that we earn for selling other

investment products, such as structured notes or derivatives.

To the extent that our clients choose to invest in products

that we do not currently offer, we will suffer outflows and a

loss of management fees. Further, if, due to changes in

investor sentiment or the relative performance of certain asset

classes or otherwise, clients continue to invest in products

that generate lower fees (e.g., passively managed or fixed

income products), our average effective management fee

would continue to decline and our asset management and

wealth management businesses could be adversely affected.

Inflation has had, and could continue to have, a

negative effect on our business, results of operations

and financial condition.

Inflationary pressures have affected economies, financial

markets and market participants worldwide. Inflationary

pressures have increased certain of our operating expenses,

and have adversely affected consumer sentiment and CEO

confidence. Central bank responses to inflationary pressures

have also resulted in higher market interest rates, which, in

turn, have contributed to lower activity levels across financial

markets, in particular for debt underwriting transactions and

mortgage originations, and resulted in lower values for

certain financial assets which have adversely affected our

equity and debt investments. Higher interest rates increase

our borrowing costs and have required us to increase interest

paid on our deposits. If inflationary pressures persist, our

expenses may increase further; we may be unable to achieve

our efficiency ratio target; activity levels for certain of our

businesses, in particular debt underwriting and mortgages,

may remain at low levels or decline further; our interest

expense could increase faster than our interest income,

reducing our net interest income and net interest margin;

certain of our investments could continue to incur losses or

generally low levels of returns; AUS could decline, reducing

management and other fees; economies worldwide could

experience recessions; and we could continue to operate in a

generally unfavorable economic and market environment.

Liquidity

Our liquidity, profitability and businesses may be

adversely affected by an inability to access the debt

capital markets or to sell assets.

Liquidity is essential to our businesses. It is of critical

importance to us, as most of the failures of financial

institutions have occurred in large part due to insufficient

liquidity. Our liquidity may be impaired by an inability to

access secured and/or unsecured debt markets, an inability to

raise or retain deposits, an inability to access funds from our

subsidiaries or otherwise allocate liquidity optimally, an

inability to sell assets or redeem our investments, lack of

timely settlement of transactions, unusual deposit outflows,

or other unforeseen outflows of cash or collateral, such as in

March 2020, when corporate clients drew on revolving credit

facilities in response to the COVID-19 pandemic. This

situation may arise due to circumstances that we may be

unable to control, such as a general market or economic

disruption or an operational problem that affects third

parties or us, or even by the perception among market

participants that we, or other market participants, are

experiencing greater liquidity risk.

We employ structured products to benefit our clients and

hedge our own risks. The financial instruments that we hold

and the contracts to which we are a party are often complex,

and these complex structured products often do not have

readily available markets to access in times of liquidity stress.

Our investing and financing activities may lead to situations

where the holdings from these activities represent a

significant portion of specific markets, which could restrict

liquidity for our positions.

Further, our ability to sell assets may be impaired if there is

not generally a liquid market for such assets, as well as in

circumstances where other market participants are seeking to

sell similar otherwise generally liquid assets at the same time,

as is likely to occur in a liquidity or other market crisis or in

response to changes to rules or regulations. For example, in

2021, an investment management firm with large positions

with several financial institutions defaulted, resulting in

rapidly declining prices in the securities underlying those

positions. In addition, clearinghouses, exchanges and other

financial institutions with which we interact may exercise set-

off rights or the right to require additional collateral,

including in difficult market conditions, which could further

impair our liquidity.

Numerous regulations have been adopted that impose more

stringent liquidity requirements on large financial

institutions, including us. These regulations require us to

hold large amounts of highly liquid assets and reduce our

flexibility to source and deploy funding. In addition, our need

to manage our operations in light of certain regulatory

requirements when applicable thresholds are met has in the

past limited and may in the future limit our ability to raise

deposits in GSIB or other funding, which could adversely

affect our liquidity or ability to respond efficiently to

liquidity stress.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Goldman Sachs 2022 Form 10-K

Our businesses have been and may in the future be

adversely affected by disruptions or lack of liquidity in

the credit markets, including reduced access to credit

and higher costs of obtaining credit.

Widening credit spreads, as well as significant declines in the

availability of credit, have in the past adversely affected our

ability to borrow on a secured and unsecured basis and may

do so in the future. We fund ourselves on an unsecured basis

by issuing long-term debt and commercial paper, by raising

deposits at our bank subsidiaries, by issuing hybrid financial

instruments and by obtaining loans or lines of credit from

commercial or other banking entities. We seek to finance

many of our assets on a secured basis. Any disruptions in the

credit markets may make it harder and more expensive to

obtain funding for our businesses. If our available funding is

limited or we are forced to fund our operations at a higher

cost, these conditions may require us to curtail our business

activities and increase our cost of funding, both of which

could reduce our profitability, particularly in our businesses

that involve investing, lending and market making.

Our clients engaging in mergers, acquisitions and other types

of strategic transactions often rely on access to the secured

and unsecured credit markets to finance their transactions. A

lack of available credit or an increased cost of credit can

adversely affect the size, volume and timing of our clients’

merger and acquisition transactions, particularly large

transactions, and adversely affect our advisory and

underwriting businesses.

Our credit businesses have been and may in the future be

negatively affected by a lack of liquidity in credit markets. A

lack of liquidity reduces price transparency, increases price

volatility and decreases transaction volumes and size, all of

which can increase transaction risk or decrease the

profitability of these businesses.

Reductions in our credit ratings or an increase in our

credit spreads may adversely affect our liquidity and

cost of funding.

Our credit ratings are important to our liquidity. A reduction

in our credit ratings could adversely affect our liquidity and

competitive position, increase our borrowing costs, limit our

access to the capital markets or trigger our obligations under

certain provisions in some of our trading and collateralized

financing contracts. Under these provisions, counterparties

could be permitted to terminate contracts with us or require

us to post additional collateral. Termination of our trading

and collateralized financing contracts could cause us to

sustain losses and impair our liquidity by requiring us to find

other sources of financing or to make significant cash

payments or securities movements.

As of December 2022, our counterparties could have called

for additional collateral or termination payments related to

our net derivative liabilities under bilateral agreements in an

aggregate amount of $343 million in the event of a one-notch

downgrade of our credit ratings and $1.12 billion in the event

of a two-notch downgrade of our credit ratings. A

downgrade by any one rating agency, depending on the

agency’s relative ratings of us at the time of the downgrade,

may have an impact which is comparable to the impact of a

downgrade by all rating agencies. For further information

about our credit ratings, see “Management’s Discussion and

Analysis of Financial Condition and Results of Operations —

Risk Management — Liquidity Risk Management — Credit

Ratings” in Part II, Item 7 of this Form 10-K.

Our cost of obtaining long-term unsecured funding is directly

related to our credit spreads (the amount in excess of the

interest rate of benchmark securities that we need to pay).

Increases in our credit spreads can significantly increase our

cost of this funding. Changes in credit spreads are

continuous, market-driven, and subject at times to

unpredictable and highly volatile movements. Our credit

spreads are also influenced by market perceptions of our

creditworthiness and movements in the costs to purchasers of

credit default swaps referenced to our long-term debt. The

market for credit default swaps has proven to be extremely

volatile and at times has lacked a high degree of transparency

or liquidity.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Goldman Sachs 2022 Form 10-K 33

Group Inc. is a holding company and its liquidity

depends on payments and loans from its subsidiaries,

many of which are subject to legal, regulatory and

other restrictions on providing funds or assets to

Group Inc.

Group Inc. is a holding company and, therefore, depends on

dividends, distributions, loans and other payments from its

subsidiaries to fund share repurchases and dividend payments

and to fund payments on its obligations, including debt

obligations. Many of our subsidiaries, including our broker-

dealer and bank subsidiaries, are subject to laws that restrict

dividend payments or authorize regulatory bodies to block or

reduce the flow of funds from those subsidiaries to Group

Inc.

In addition, our broker-dealer and bank entities and their

subsidiaries are subject to restrictions on their ability to lend

or transact with affiliates and to minimum regulatory capital

and other requirements, as well as restrictions on their ability

to use funds deposited with them in brokerage or bank

accounts to fund their businesses. Additional restrictions on

related-party transactions, increased capital and liquidity

requirements and additional limitations on the use of funds

on deposit in bank or brokerage accounts, as well as lower

earnings, can reduce the amount of funds available to meet

the obligations of Group Inc., including under the FRB’s

source of strength requirement, and even require Group Inc.

to provide additional funding to such subsidiaries.

Restrictions or regulatory action of that kind could impede

access to funds that Group Inc. needs to make payments on

its obligations, including debt obligations, or dividend

payments. In addition, Group Inc.’s right to participate in a

distribution of assets upon a subsidiary’s liquidation or

reorganization is subject to the prior claims of the

subsidiary’s creditors.

There has been a trend towards increased regulation and

supervision of our subsidiaries by the governments and

regulators in the countries in which those subsidiaries are

located or do business. Concerns about protecting clients and

creditors of financial institutions that are controlled by

persons or entities located outside of the country in which

such entities are located or do business have caused or may

cause a number of governments and regulators to take

additional steps to “ring fence” or require internal total loss-

absorbing capacity (which may also be subject to “bail-in”

powers, as described below) at those entities in order to

protect clients and creditors of those entities in the event of

financial difficulties involving those entities. The result has

been and may continue to be additional limitations on our

ability to efficiently move capital and liquidity among our

affiliated entities, or to Group Inc., including in times of

stress, thereby increasing the overall level of capital and

liquidity required by us on a consolidated basis.

Furthermore, Group Inc. has guaranteed the payment

obligations of certain of its subsidiaries, including GS&Co.

and GS Bank USA, subject to certain exceptions. In addition,

Group Inc. guarantees many of the obligations of its other

consolidated subsidiaries on a transaction-by-transaction

basis, as negotiated with counterparties. These guarantees

may require Group Inc. to provide substantial funds or assets

to its subsidiaries or their creditors or counterparties at a

time when Group Inc. is in need of liquidity to fund its own

obligations.

The requirements for us and certain of our subsidiaries to

develop and submit recovery and resolution plans to

regulators, and the incorporation of feedback received from

regulators, may require us to increase capital or liquidity

levels or issue additional long-term debt at Group Inc. or

particular subsidiaries or otherwise incur additional or

duplicative operational or other costs at multiple entities, and

may reduce our ability to provide Group Inc. guarantees of

the obligations of our subsidiaries or raise debt at Group Inc.

Resolution planning may also impair our ability to structure

our intercompany and external activities in a manner that we

may otherwise deem most operationally efficient.

Furthermore, arrangements to facilitate our resolution

planning may cause us to be subject to additional taxes. Any

such limitations or requirements would be in addition to the

legal and regulatory restrictions described above on our

ability to engage in capital actions or make intercompany

dividends or payments.

See “Business — Regulation” in Part I, Item 1 of this Form

10-K for further information about regulatory restrictions.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Goldman Sachs 2022 Form 10-K

Credit

Our businesses, profitability and liquidity may be

adversely affected by deterioration in the credit quality

of or defaults by third parties.

We are exposed to the risk that third parties that owe us

money, securities or other assets will not perform their

obligations. These parties may default on their obligations to

us due to bankruptcy, lack of liquidity, operational failure or

other reasons. A failure of a significant market participant, or

even concerns about a default by such an institution, could

lead to significant liquidity problems, losses or defaults by

other institutions, which in turn could adversely affect us.

We are also subject to the risk that our rights against third

parties may not be enforceable in all circumstances. In

addition, deterioration in the credit quality of third parties

whose securities or obligations we hold, including a

deterioration in the value of collateral posted by third parties

to secure their obligations to us under derivative contracts

and loan agreements, could result in losses and/or adversely

affect our ability to rehypothecate or otherwise use those

securities or obligations for liquidity purposes.

A significant downgrade in the credit ratings of our

counterparties could also have a negative impact on our

results. While in many cases we are permitted to require

additional collateral from counterparties that experience

financial difficulty, disputes may arise as to the amount of

collateral we are entitled to receive and the value of pledged

assets. The termination of contracts and the foreclosure on

collateral may subject us to claims for the improper exercise

of our rights. Default rates, downgrades and disputes with

counterparties as to the valuation of collateral typically

increase significantly in times of market stress, increased

volatility and illiquidity.

As part of our clearing and prime brokerage activities, we

finance our clients’ positions, and we could be held

responsible for the defaults or misconduct of our clients.

Although we have limits and regularly review credit

exposures to specific clients and counterparties and to

specific industries, countries and regions that we believe may

present credit concerns, default risk may arise from events or

circumstances that are difficult to detect or foresee.

Concentration of risk increases the potential for

significant losses in our market-making, underwriting,

investing and financing activities.

Concentration of risk increases the potential for significant

losses in our market-making, underwriting, investing and

financing activities. The number and size of these

transactions has affected and may in the future affect our

results of operations in a given period. Moreover, because of

concentrated risk, we may suffer losses even when economic

and market conditions are generally favorable for our

competitors. Disruptions in the credit markets can make it

difficult to hedge these credit exposures effectively or

economically. In addition, we extend large commitments as

part of our credit origination activities. Disruptions in the

credit markets have in the past substantially curtailed or

eliminated, and may in the future substantially curtail or

eliminate, the trading markets for loans we originate. These

disruptions may make it difficult for us to sell or value such

assets, which may result in losses for us from time to time.

Rules adopted under the Dodd-Frank Act, and similar rules

adopted in other jurisdictions, require issuers of certain asset-

backed securities and any person who organizes and initiates

certain asset-backed securities transactions to retain

economic exposure to the asset, which has affected the cost of

and structures used in connection with these securitization

activities. Our inability to reduce our credit risk by selling,

syndicating or securitizing these positions, including during

periods of market stress, could negatively affect our results of

operations due to a decrease in the fair value of the positions,

including due to the insolvency or bankruptcy of borrowers,

as well as the loss of revenues associated with selling such

securities or loans.

In the ordinary course of business, we may be subject to a

concentration of credit risk to a particular counterparty,

borrower, issuer (including sovereign issuers) or geographic

area or group of related countries, such as the E.U., and a

failure or downgrade of, or default by, such entity could

negatively impact our businesses, perhaps materially, and the

systems by which we set limits and monitor the level of our

credit exposure to individual entities, industries, countries

and regions may not function as we have anticipated.

Regulatory reform, including the Dodd-Frank Act, has led to

increased centralization of trading activity through particular

clearinghouses, central agents or exchanges, which has

significantly increased our concentration of risk with respect

to these entities. While our activities expose us to many

different industries, counterparties and countries, we

routinely execute a high volume of transactions with

counterparties engaged in financial services activities,

including brokers and dealers, commercial banks,

clearinghouses, exchanges and investment funds. This has

resulted in significant credit concentration with respect to

these counterparties.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Goldman Sachs 2022 Form 10-K 35

Derivative transactions and delayed documentation or

settlements may expose us to credit risk, unexpected

risks and potential losses.

We are party to a large number of derivative transactions,

including credit derivatives. Many of these derivative

instruments are individually negotiated and non-

standardized, which can make exiting, transferring or settling

positions difficult. Many credit derivatives require that we

deliver to the counterparty the underlying security, loan or

other obligation in order to receive payment. In a number of

cases, we do not hold the underlying security, loan or other

obligation and may not be able to obtain the underlying

security, loan or other obligation. This could cause us to

forfeit the payments due to us under these contracts or result

in settlement delays with the attendant credit and operational

risk, as well as increased costs to us.

Derivative transactions also involve the risk that

documentation has not been properly executed, that executed

agreements may not be enforceable against the counterparty,

or that obligations under such agreements may not be able to

be “netted” against other obligations with such counterparty.

In addition, counterparties may claim that such transactions

were not appropriate or authorized.

As a signatory to the ISDA Universal Protocol or U.S. ISDA

Protocol (ISDA Protocols) and being subject to the FRB’s and

FDIC’s rules on QFCs and similar rules in other jurisdictions,

we may not be able to exercise remedies against

counterparties and, as this regime has not yet been tested, we

may suffer risks or losses that we would not have expected to

suffer if we could immediately close out transactions upon a

termination event. The ISDA Protocols and these rules and

regulations extend to repurchase agreements and other

instruments that are not derivative contracts.

Derivative contracts and other transactions, including

secondary bank loan purchases and sales, entered into with

third parties are not always confirmed by the counterparties

or settled on a timely basis. While the transaction remains

unconfirmed or during any delay in settlement, we are subject

to heightened credit and operational risk and in the event of a

default may find it more difficult to enforce our rights.

In addition, as new complex derivative products are created,

covering a wider array of underlying credit and other

instruments, disputes about the terms of the underlying

contracts could arise, which could impair our ability to

effectively manage our risk exposures from these products

and subject us to increased costs. The provisions of the

Dodd-Frank Act requiring central clearing of credit

derivatives and other OTC derivatives, or a market shift

toward standardized derivatives, could reduce the risk

associated with these transactions, but under certain

circumstances could also limit our ability to develop

derivatives that best suit the needs of our clients and to hedge

our own risks, and could adversely affect our profitability. In

addition, these provisions have increased our credit exposure

to central clearing platforms.

Operational

A failure in our operational systems or human error,

malfeasance or other misconduct, could impair our

liquidity, disrupt our businesses, result in the

disclosure of confidential information, damage our

reputation and cause losses.

Our businesses are highly dependent on our ability to process

and monitor, on a daily basis, a very large number of

transactions, many of which are highly complex and occur at

high volumes and frequencies, across numerous and diverse

markets in many currencies. These transactions, as well as

the information technology services we provide to clients,

often must adhere to client-specific guidelines, as well as legal

and regulatory standards.

Many rules and regulations worldwide govern our

obligations to execute transactions and report such

transactions and other information to regulators, exchanges

and investors. Compliance with these legal and reporting

requirements can be challenging, and we have been and may

in the future be subject to regulatory fines and penalties for

failing to follow these rules or to report timely, accurate and

complete information in accordance with these rules. As

reporting requirements expand, compliance with these rules

and regulations has become more challenging.

As our client base, including through our consumer

businesses, and our geographical reach expand and the

volume, speed, frequency and complexity of transactions,

especially electronic transactions (as well as the requirements

to report such transactions on a real-time basis to clients,

regulators and exchanges) increase, developing and

maintaining our operational systems and infrastructure has

become more challenging, and the risk of systems or human

error in connection with such transactions has increased, as

have the potential consequences of such errors due to the

speed and volume of transactions involved and the potential

difficulty associated with discovering errors quickly enough

to limit the resulting consequences. These risks are

exacerbated in times of increased volatility. As with other

similarly situated institutions, we utilize credit underwriting

models in connection with our businesses, including our

consumer-oriented activities. Allegations or publicity,

whether or not accurate, that our underwriting decisions do

not treat consumers or clients fairly, or comply with the

applicable law or regulation, can result in negative publicity,

reputational damage and governmental and regulatory

scrutiny, investigations and enforcement actions.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Goldman Sachs 2022 Form 10-K

Our financial, accounting, data processing or other

operational systems and facilities may fail to operate properly

or become disabled as a result of events that are wholly or

partially beyond our control, such as a spike in transaction

volume, adversely affecting our ability to process these

transactions or provide these services. We must continuously

update these systems to support our operations and growth

and to respond to changes in regulations and markets, and

invest heavily in systemic controls and training to pursue our

objective of ensuring that such transactions do not violate

applicable rules and regulations or, due to errors in

processing such transactions, adversely affect markets, our

clients and counterparties or us. Enhancements and updates

to systems, as well as the requisite training, including in

connection with the integration of new businesses, entail

significant costs and create risks associated with

implementing new systems and integrating them with

existing ones.

The use of computing devices and phones is critical to the

work done by our employees and the operation of our

systems and businesses and those of our clients and our third-

party service providers and vendors. Their importance has

continued to increase, in particular in light of work-from-

home arrangements. Computers and computer networks are

subject to various risks, including, among others, cyber

attacks, inherent technological defects, system failures and

human error. For example, fundamental security flaws in

computer chips found in many types of these computing

devices and phones have been reported in the past and may

occur in the future. The use of personal devices by our

employees or by our vendors for work-related activities also

presents risks related to potential violations of record

retention and other requirements. Cloud technologies are

also critical to the operation of our systems and platforms

and our reliance on cloud technologies is growing. Service

disruptions have resulted, and may result in the future, in

delays in accessing, or the loss of, data that is important to

our businesses and may hinder our clients’ access to our

platforms. There have been a number of widely publicized

cases of outages in connection with access to cloud

computing providers. Addressing these and similar issues

could be costly and affect the performance of these businesses

and systems. Operational risks may be incurred in applying

fixes and there may still be residual security risks.

Notwithstanding the proliferation of technology and

technology-based risk and control systems, our businesses

ultimately rely on people as our greatest resource, and, from

time to time, they have in the past and may in the future

make mistakes or engage in violations of applicable policies,

laws, rules or procedures that are not always caught

immediately by our technological processes or by our

controls and other procedures, which are intended to prevent

and detect such errors or violations. These have in the past

and may in the future include calculation errors, mistakes in

addressing emails, errors in software or model development

or implementation, or simple errors in judgment, as well as

intentional efforts to ignore or circumvent applicable policies,

laws, rules or procedures. Human errors, malfeasance and

other misconduct, including the intentional misuse of client

information in connection with insider trading or for other

purposes, even if promptly discovered and remediated, has in

the past resulted and may in the future result in reputational

damage and losses and liabilities for us.

The majority of the employees in our primary locations,

including the New York metropolitan area, London,

Bengaluru, Hyderabad, Hong Kong, Tokyo, Salt Lake City

and Dallas, work in close proximity to one another. Our

headquarters is located in the New York metropolitan area,

and we have our largest employee concentration occupying

two principal office buildings near the Hudson River

waterfront. They are subject to potential catastrophic events,

including, but not limited to, terrorist attacks, extreme

weather, or other hostile events that could negatively affect

our business. Notwithstanding our efforts to maintain

business continuity, business disruptions impacting our

offices and employees could lead to our employees’ inability

to occupy the offices, communicate with or travel to other

office locations or work remotely. As a result, our ability to

service and interact with clients may be adversely impacted,

due to our failure or inability to successfully implement

business contingency plans.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Goldman Sachs 2022 Form 10-K 37

A failure or disruption in our infrastructure, or in the

operational systems or infrastructure of third parties,

could impair our liquidity, disrupt our businesses,

damage our reputation and cause losses.

We face the risk of operational failure or significant

operational delay, termination or capacity constraints of any

of the clearing agents, exchanges, clearinghouses or other

financial intermediaries we use to facilitate our securities and

derivatives transactions, and as our interconnectivity with

our clients grows, we increasingly face the risk of operational

failure or significant operational delay with respect to our

clients’ systems.

There has been significant consolidation among clearing

agents, exchanges and clearinghouses and an increasing

number of derivative transactions are cleared on exchanges,

which has increased our exposure to operational failure or

significant operational delay, termination or capacity

constraints of the particular financial intermediaries that we

use and could affect our ability to find adequate and cost-

effective alternatives in the event of any such failure, delay,

termination or constraint. Industry consolidation, whether

among market participants or financial intermediaries,

increases the risk of operational failure or significant

operational delay as disparate complex systems need to be

integrated, often on an accelerated basis.

The interconnectivity of multiple financial institutions with

central agents, exchanges and clearinghouses, and the

increased centrality of these entities, increases the risk that an

operational failure at one institution or entity may cause an

industry-wide operational failure that could materially

impact our ability to conduct business. Interconnectivity of

financial institutions with other companies through, among

other things, application programming interfaces or APIs

presents similar risks. Any such failure, termination or

constraint could adversely affect our ability to effect

transactions, service our clients, manage our exposure to risk

or expand our businesses or result in financial loss or liability

to our clients, impairment of our liquidity, disruption of our

businesses, regulatory intervention or reputational damage.

Despite our resiliency plans and facilities, our ability to

conduct business may be adversely impacted by a disruption

in the infrastructure that supports our businesses and the

communities where we are located. This may include a

disruption involving electrical, satellite, undersea cable or

other communications, internet, transportation or other

facilities used by us, our employees or third parties with

which we conduct business, including cloud service

providers. These disruptions may occur as a result of events

that affect only our buildings or systems or those of such

third parties, or as a result of events with a broader impact

globally, regionally or in the cities where those buildings or

systems are located, including, but not limited to, natural

disasters, war, civil unrest, terrorism, economic or political

developments, pandemics and weather events.

In addition, although we seek to diversify our third-party

vendors to increase our resiliency, we are exposed to risks if

our vendors operate in the same area and are also exposed to

the risk that a disruption or other information technology

event at a common service provider to our vendors could

impede their ability to provide products or services to us. We

may not be able to effectively monitor or mitigate operational

risks relating to our vendors’ use of common service

providers.

Additionally, although the prevalence and scope of

applications of distributed ledger technology, cryptocurrency

and similar technologies is growing, the technology is nascent

and may be vulnerable to cyber attacks or have other

inherent weaknesses. We are exposed to risks, and may

become exposed to additional risks, related to distributed

ledger technology, including through our facilitation of

clients’ activities involving financial products that use

distributed ledger technology, such as blockchain,

cryptocurrencies or other digital assets, our investments in

companies that seek to develop platforms based on

distributed ledger technology, the use of distributed ledger

technology by third-party vendors, clients, counterparties,

clearinghouses and other financial intermediaries, and the

receipt of cryptocurrencies or other digital assets as

collateral. The market volatility that financial products using

distributed ledger technology have recently experienced may

increase these risks.

A failure to protect our computer systems, networks

and information, and our clients’ information, against

cyber attacks and similar threats could impair our

ability to conduct our businesses, result in the

disclosure, theft or destruction of confidential

information, damage our reputation and cause losses.

Our operations rely on the secure processing, storage and

transmission of confidential and other information in our

computer systems and networks and those of our vendors.

There have been a number of highly publicized cases

involving financial services companies, consumer-based

companies, software and information technology service

providers, governmental agencies and other organizations

reporting the unauthorized access or disclosure of client,

customer or other confidential information in recent years, as

well as cyber attacks involving the dissemination, theft and

destruction of corporate information or other assets, as a

result of inadequate procedures or the failure to follow

procedures by employees or contractors or as a result of

actions by third parties, including actions by foreign

governments. There have also been several highly publicized

cases where hackers have requested “ransom” payments in

exchange for not disclosing customer information or for

restoring access to information or systems.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Goldman Sachs 2022 Form 10-K

We are regularly the target of attempted cyber attacks,

including denial-of-service attacks, and must continuously

monitor and develop our systems to protect the integrity and

functionality of our technology infrastructure and access to

and the security of our data. We have faced a high volume of

cyber attacks as we expand our mobile- and other internet-

based products and services, as well as our usage of mobile

and cloud technologies, and as we provide more of these

services to a greater number of individual consumers. The

migration of our communication from devices we provide to

employee-owned devices presents additional risks of cyber

attacks, as do work-from-home arrangements . In addition,

due to our interconnectivity with third-party vendors (and

their respective service providers), central agents, exchanges,

clearinghouses and other financial institutions, we could be

adversely impacted if any of them is subject to a successful

cyber attack or other information security event. These

impacts could include the loss of access to information or

services from the third party subject to the cyber attack or

other information security event or could result in

unauthorized access to or disclosure of client, customer or

other confidential information, which could, in turn,

interrupt certain of our businesses or adversely affect our

results of operations and reputation.

Despite our efforts to ensure the integrity of our systems and

information, we may not be able to anticipate, detect or

implement effective preventive measures against all cyber

threats, including because the techniques used are

increasingly sophisticated, change frequently and are often

not recognized until launched. Cyber attacks can originate

from a variety of sources, including third parties who are

affiliated with or sponsored by foreign governments or are

involved with organized crime or terrorist organizations.

Third parties may also attempt to place individuals in our

offices or induce employees, clients or other users of our

systems to disclose sensitive information or provide access to

our data or that of our clients, and these types of risks may be

difficult to detect or prevent.

Although we take protective measures proactively and

endeavor to modify them as circumstances warrant, our

computer systems, software and networks may be vulnerable

to unauthorized access, misuse, computer viruses or other

malicious code, cyber attacks on our vendors and other

events that could have a security impact. Risks relating to

cyber attacks on our vendors have been increasing given the

greater frequency and severity in recent years of supply chain

attacks affecting software and information technology service

providers. Due to the complexity and interconnectedness of

our systems, the process of enhancing our protective

measures can itself create a risk of systems disruptions and

security issues. In addition, protective measures that we

employ to compartmentalize our data may reduce our

visibility into, and adversely affect our ability to respond to,

cyber threats and issues with our systems.

If one or more of these types of events occur, it potentially

could jeopardize our, our clients’, our counterparties’ or third

parties' confidential and other information processed, stored

in, or transmitted through our computer systems and

networks, or otherwise cause interruptions or malfunctions

in our operations or those of our clients, counterparties or

third parties, which could impact their ability to transact

with us or otherwise result in legal or regulatory action,

significant losses or reputational damage. In addition, such

an event could persist for an extended period of time before

being properly detected or escalated, and, following detection

or escalation, it could take considerable time for us to obtain

full and reliable information about the extent, amount and

type of information compromised. During the course of an

investigation, we may not know the full impact of the event

and how to remediate it, and actions, decisions and mistakes

that are taken or made may further increase the negative

effects of the event on our business, results of operations and

reputation. Moreover, potential new regulations may require

us to disclose information about a material cybersecurity

incident before it has been resolved or fully investigated.

We have expended, and expect to continue to expend,

significant resources on an ongoing basis to modify our

protective measures and to investigate and remediate

vulnerabilities or other exposures, but these measures may be

ineffective and we may be subject to legal or regulatory

action, as well as financial losses that are either not insured

against or not fully covered through any insurance

maintained by us.

Our clients’ confidential information may also be at risk

from the compromise of clients’ personal electronic devices

or as a result of a data security breach at an unrelated

company. Losses due to unauthorized account activity could

harm our reputation and may have adverse effects on our

business, financial condition and results of operations.

The increased use of mobile and cloud technologies can

heighten these and other operational risks, as can work-from-

home arrangements. Certain aspects of the security of such

technologies are unpredictable or beyond our control, and

the failure by mobile technology and cloud service providers

to adequately safeguard their systems and prevent cyber

attacks could disrupt our operations and result in

misappropriation, corruption or loss of confidential and

other information. In addition, there is a risk that encryption

and other protective measures, despite their sophistication,

may be defeated, particularly to the extent that new

computing technologies vastly increase the speed and

computing power available.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Goldman Sachs 2022 Form 10-K 39

We routinely transmit and receive personal, confidential and

proprietary information by email and other electronic means.

We have discussed and worked with clients, vendors, service

providers, counterparties and other third parties to develop

secure transmission capabilities and protect against cyber

attacks, but we do not have, and may be unable to put in

place, secure capabilities with all of our clients, vendors,

service providers, counterparties and other third parties and

we may not be able to ensure that these third parties have

appropriate controls in place to protect the confidentiality of

the information. An interception, misuse or mishandling of

personal, confidential or proprietary information being sent

to or received from a client, vendor, service provider,

counterparty or other third party could result in legal

liability, regulatory action and reputational harm.

We may incur losses as a result of ineffective risk

management processes and strategies.

We seek to monitor and control our risk exposure through a

risk and control framework encompassing a variety of

separate but complementary financial, credit, operational,

compliance and legal reporting systems, internal controls,

management review processes and other mechanisms. Our

risk management process seeks to balance our ability to

profit from market-making, investing or lending positions,

and underwriting activities, with our exposure to potential

losses. While we employ a broad and diversified set of risk

monitoring and risk mitigation techniques, those techniques

and the judgments that accompany their application cannot

anticipate every economic and financial outcome or the

specifics and timing of such outcomes. Thus, in the course of

our activities, we have incurred and may in the future incur

losses. Market conditions in recent years have involved

unprecedented dislocations and highlight the limitations

inherent in using historical data to manage risk.

The models that we use to assess and control our risk

exposures reflect assumptions about the degrees of

correlation or lack thereof among prices of various asset

classes or other market indicators. In times of market stress

or other unforeseen circumstances, previously uncorrelated

indicators may become correlated, or conversely previously

correlated indicators may move in different directions. These

types of market movements have at times limited the

effectiveness of our hedging strategies and have caused us to

incur significant losses, and they may do so in the future.

These changes in correlation have been and may in the future

be exacerbated where other market participants are using risk

or trading models with assumptions or algorithms that are

similar to ours. In these and other cases, it may be difficult to

reduce our risk positions due to the activity of other market

participants or widespread market dislocations, including

circumstances where asset values are declining significantly

or no market exists for certain assets.

In addition, the use of models in connection with risk

management and numerous other critical activities presents

risks that the models may be ineffective, either because of

poor design, ineffective testing, or improper or flawed inputs,

as well as unpermitted access to the models resulting in

unapproved or malicious changes to the model or its inputs.

To the extent that we have positions through our market-

making or origination activities or we make investments

directly through our investing activities, including private

equity, that do not have an established liquid trading market

or are otherwise subject to restrictions on sale or hedging, we

may not be able to reduce our positions and therefore reduce

our risk associated with those positions. In addition, to the

extent permitted by applicable law and regulation, we invest

our own capital in private equity, credit, real estate and

hedge funds that we manage and limitations on our ability to

withdraw some or all of our investments in these funds,

whether for legal, reputational or other reasons, may make it

more difficult for us to control the risk exposures relating to

these investments.

Prudent risk management, as well as regulatory restrictions,

may cause us to limit our exposure to counterparties,

geographic areas or markets, which may limit our business

opportunities and increase the cost of our funding or hedging

activities.

As we have expanded and intend to continue to expand the

product and geographic scope of our offerings of credit and

investment products to consumers, we are presented with

different risks and must expand and adapt our risk

monitoring and mitigation activities to account for these

business activities. A failure to adequately assess and control

such risk exposures could result in losses to us.

For further information about our risk management policies

and procedures, see “Management’s Discussion and Analysis

of Financial Condition and Results of Operations — Risk

Management” in Part II, Item 7 of this Form 10-K.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Goldman Sachs 2022 Form 10-K

Legal and Regulatory

Our businesses and those of our clients are subject to

extensive and pervasive regulation around the world.

As a participant in the financial services industry and a

systemically important financial institution, we are subject to

extensive regulation in jurisdictions around the world. We

face the risk of significant intervention by law enforcement,

regulatory and taxing authorities, as well as private litigation,

in all jurisdictions in which we conduct our businesses. In

many cases, our activities have been and may continue to be

subject to overlapping and divergent regulation in different

jurisdictions. Among other things, as a result of law

enforcement authorities, regulators or private parties

challenging our compliance with existing laws and

regulations, we or our employees have been, and could be,

fined, criminally charged or sanctioned; prohibited from

engaging in some of our business activities; subjected to

limitations or conditions on our business activities, including

higher capital requirements; or subjected to new or

substantially higher taxes or other governmental charges in

connection with the conduct of our businesses or with respect

to our employees. These limitations or conditions may limit

our business activities and negatively impact our

profitability.

In addition to the impact on the scope and profitability of our

business activities, day-to-day compliance with existing laws

and regulations has involved and will continue to involve

significant amounts of time, including that of our senior

leaders and that of a large number of dedicated compliance

and other reporting and operational personnel, all of which

may negatively impact our profitability.

Our revenues and profitability and those of our competitors

have been and will continue to be impacted by requirements

relating to capital, leverage, minimum liquidity and long-

term funding levels, requirements related to resolution and

recovery planning, derivatives clearing and margin rules and

levels of regulatory oversight, as well as limitations on which

and, if permitted, how certain business activities may be

carried out by financial institutions. The laws and regulations

that apply to our businesses are often complex and, in many

cases, we must make interpretive decisions regarding the

application of those laws and regulations to our business

activities. Changes in interpretations, whether in response to

regulatory guidance, industry conventions, our own

reassessments or otherwise, could adversely affect our

businesses, results of operations or ability to satisfy

applicable regulatory requirements, such as capital or

liquidity requirements.

If there are new laws or regulations or changes in the

interpretation or enforcement of existing laws or regulations

applicable to our businesses or those of our clients, including

capital, liquidity, leverage, long-term debt, total loss-

absorbing capacity and margin requirements, restrictions on

leveraged lending or other business practices, reporting

requirements, requirements relating to recovery and

resolution planning, tax burdens and compensation

restrictions, that are imposed on a limited subset of financial

institutions (whether based on size, method of funding,

activities, geography or other criteria), compliance with these

new laws or regulations, or changes in the enforcement of

existing laws or regulations, could adversely affect our ability

to compete effectively with other institutions that are not

affected in the same way. In addition, regulation imposed on

financial institutions or market participants generally, such

as taxes on stock transfers, share repurchases and other

financial transactions, could adversely impact levels of

market activity more broadly, and thus impact our

businesses. Changes to laws or regulations, such as tax laws,

could also have a disproportionate impact on us, based on

the way those laws or regulations are applied to financial

services and financial firms or due to our corporate structure

or where these services are provided.

These developments could impact our profitability in the

affected jurisdictions, or even make it uneconomic for us to

continue to conduct all or certain of our businesses in those

jurisdictions, or could cause us to incur significant costs

associated with changing our business practices, restructuring

our businesses, moving all or certain of our businesses and

our employees to other locations or complying with

applicable capital requirements, including reducing dividends

or share repurchases, liquidating assets or raising capital in a

manner that adversely increases our funding costs or

otherwise adversely affects our shareholders and creditors.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Goldman Sachs 2022 Form 10-K 41

U.S. and non-U.S. regulatory developments, in particular the

Dodd-Frank Act and Basel III, have significantly altered the

regulatory framework within which we operate and have

adversely affected and may in the future adversely affect our

profitability. Among the aspects of the Dodd-Frank Act that

have affected or may in the future affect our businesses are:

increased capital, liquidity and reporting requirements;

limitations on activities in which we may engage; increased

regulation of and restrictions on OTC derivatives markets

and transactions; limitations on incentive compensation;

limitations on affiliate transactions; requirements to

reorganize or limit activities in connection with recovery and

resolution planning; increased deposit insurance assessments;

and increased standards of care for broker-dealers and

investment advisers in dealing with clients. The

implementation of higher capital requirements, more

stringent requirements relating to liquidity, long-term debt

and total loss-absorbing capacity and the prohibition on

proprietary trading and the sponsorship of, or investment in,

covered funds by the Volcker Rule may continue to adversely

affect our profitability and competitive position, particularly

if these requirements do not apply equally to our competitors

or are not implemented uniformly across jurisdictions. We

may also become subject to higher and more stringent capital

and other regulatory requirements as a result of the

implementation of Basel Committee standards, including the

credit and operational risk capital standards published in

December 2017 and the market risk capital standard

published in January 2019.

As described in “Business — Regulation — Banking

Supervision and Regulation” in Part I, Item 1 of this Form 10-

K, the SCB has replaced the capital conservation buffer under

the Standardized Capital Rules and resulted in higher

Standardized capital ratio requirements. Failure to comply

with these requirements could limit our ability to, among

other things, repurchase shares, pay dividends and make

certain discretionary compensation payments. In addition, if,

as in 2020, we are required to resubmit our capital plan, we

generally may not make capital distributions, such as share

repurchases or dividends, without the prior approval of the

FRB. Dividends and repurchases are also subject to oversight

by the FRB, which can result in limitations. Limitations on

our ability to make capital distributions could, among other

things, prevent us from returning capital to our shareholders

and impact our return on equity. Additionally, as a G-SIB, we

are subject to the G-SIB surcharge. Our G-SIB surcharge is

updated annually based on financial data from the prior year.

Expansion of our businesses, growth in our balance sheet and

increased reliance on short-term wholesale funding have

resulted in increases and in the future may result in further

increases in our G-SIB surcharge and a corresponding

increase in our capital requirements.

We are also subject to laws and regulations, such as the

GDPR and the California Consumer Privacy Act, relating to

the privacy of the information of clients, employees or others,

and any failure to comply with these laws and regulations

could expose us to liability and/or reputational damage. As

new privacy-related laws and regulations are implemented,

the time and resources needed for us to comply with such

laws and regulations, as well as our potential liability for

non-compliance and reporting obligations in the case of data

breaches, may significantly increase.

Further, the CRD requires certain non-E.U. groups with

more than €40 billion of assets in the E.U., such as us, to

establish an E.U. IHC by December 30, 2023. A non-E.U.

group may have two E.U. IHCs if a request for a second is

approved. If we are unable to obtain approval to have two

E.U. IHCs, we would be required to limit our European

subsidiary activities to those that are permissible for GSBE.

In addition, our businesses are increasingly subject to laws

and regulations relating to surveillance, encryption and data

on-shoring in the jurisdictions in which we operate.

Compliance with these laws and regulations may require us

to change our policies, procedures and technology for

information security, which could, among other things, make

us more vulnerable to cyber attacks and misappropriation,

corruption or loss of information or technology.

We have entered into consumer-oriented deposit-taking,

lending and credit card businesses, and we may expand the

product and geographic scope of our offerings. Entering into

these businesses subjects us to numerous additional

regulations in the jurisdictions in which these businesses

operate. Not only are these regulations extensive, but they

involve types of regulations and supervision, as well as

regulatory compliance risks, that have not historically

applied to us. The level of regulatory scrutiny and the scope

of regulations affecting financial interactions with consumers

is often much greater than that associated with doing

business with institutions and high-net-worth individuals.

Complying with these regulations is time-consuming, costly

and presents new and increased risks.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Goldman Sachs 2022 Form 10-K

Our expansion into consumer-oriented activities will result in

a change to GS Bank USA's CRA requirements later in 2023,

such that GS Bank USA will no longer be assessed as a

“wholesale bank” for CRA compliance purposes and,

instead, will be assessed pursuant to the framework

applicable to large commercial banks or pursuant to an

approved strategic plan. Any failure to comply with different

or expanded CRA requirements as a result of this change in

assessment methods could negatively impact GS Bank USA's

CRA ratings, cause reputational harm and result in limits on

our ability to make future acquisitions or engage in certain

new activities.

Increasingly, regulators and courts have sought to hold

financial institutions liable for the misconduct of their clients

where they have determined that the financial institution

should have detected that the client was engaged in

wrongdoing, even though the financial institution had no

direct knowledge of the activities engaged in by its client.

Regulators and courts have also increasingly found liability

as a “control person” for activities of entities in which

financial institutions or funds controlled by financial

institutions have an investment, but which they do not

actively manage. In addition, regulators and courts continue

to seek to establish “fiduciary” obligations to counterparties

to which no such duty had been assumed to exist. To the

extent that such efforts are successful, the cost of, and

liabilities associated with, engaging in brokerage, clearing,

market-making, prime brokerage, investing and other similar

activities could increase significantly. To the extent that we

have fiduciary obligations in connection with acting as a

financial adviser or investment adviser or in other roles for

individual, institutional, sovereign or investment fund clients,

any breach, or even an alleged breach, of such obligations

could have materially negative legal, regulatory and

reputational consequences.

For information about the extensive regulation to which our

businesses are subject, see “Business — Regulation” in Part I,

Item 1 of this Form 10-K.

A failure to appropriately identify and address

potential conflicts of interest could adversely affect

our businesses.

Due to the broad scope of our businesses and our client base,

we regularly address potential conflicts of interest, including

situations where our services to a particular client or our own

investments or other interests conflict, or are perceived to

conflict, with the interests of that client or another client, as

well as situations where one or more of our businesses have

access to material non-public information that may not be

shared with our other businesses and situations where we

may be a creditor of an entity with which we also have an

advisory or other relationship.

In addition, our status as a BHC subjects us to heightened

regulation and increased regulatory scrutiny by the FRB with

respect to transactions between GS Bank USA and its

subsidiaries and entities that are or could be viewed as

affiliates of ours and, under the Volcker Rule, transactions

between us and covered funds.

We have extensive procedures and controls that are designed

to identify and address conflicts of interest, including those

designed to prevent the improper sharing of information

among our businesses. However, appropriately identifying

and dealing with conflicts of interest is complex and difficult,

and our reputation, which is one of our most important

assets, could be damaged and the willingness of clients to

enter into transactions with us may be adversely affected if

we fail, or appear to fail, to identify, disclose and deal

appropriately with conflicts of interest. In addition, potential

or perceived conflicts could give rise to litigation or

regulatory enforcement actions. Additionally, our One

Goldman Sachs initiative aims to increase collaboration

among our businesses, which may increase the potential for

actual or perceived conflicts of interest and improper

information sharing. The realignment of our businesses,

reflected in our new segments beginning with the fourth

quarter of 2022, presents similar risks.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Goldman Sachs 2022 Form 10-K 43

We may be adversely affected by increased

governmental and regulatory scrutiny or negative

publicity.

Governmental scrutiny from regulators, legislative bodies

and law enforcement agencies with respect to matters relating

to compensation, our business practices, our past actions and

other matters remains at high levels. Political and public

sentiment regarding financial institutions has in the past

resulted and may in the future result in a significant amount

of adverse press coverage, as well as adverse statements or

charges by regulators or other government officials. Press

coverage and other public statements that assert some form

of wrongdoing (including, in some cases, press coverage and

public statements that do not directly involve us) often result

in some type of investigation by regulators, legislators and

law enforcement officials or in lawsuits.

Responding to these investigations and lawsuits, regardless of

the ultimate outcome of the proceeding, is time-consuming

and expensive and can divert the time and effort of our senior

management from our business. Penalties and fines sought by

regulatory authorities have increased substantially and

certain regulators have been more likely in recent years to

commence enforcement actions or to support legislation

targeted at the financial services industry. Governmental

authorities may also be more likely to pursue criminal or

other actions, including seeking admissions of wrongdoing or

guilty pleas, in connection with the resolution of an inquiry

or investigation to the extent a company is viewed as having

previously engaged in criminal, regulatory or other

misconduct. Adverse publicity, governmental scrutiny and

legal and enforcement proceedings can also have a negative

impact on our reputation and on the morale and performance

of our employees, which could adversely affect our businesses

and results of operations. Further, we are subject to

regulatory settlements, orders and feedback that require

significant remediation activities, which require us to commit

significant resources, including hiring, as well as testing the

operation and effectiveness of new controls, policies and

procedures.

The financial services industry generally and our businesses

in particular have been subject to negative publicity. Our

reputation and businesses may be adversely affected by

negative publicity or information regarding our businesses

and personnel, whether or not accurate or true, that may be

posted on social media or other internet forums or published

by news organizations. Postings on these types of forums may

also adversely impact risk positions of our clients and other

parties that owe us money, securities or other assets and

increase the chance that they will not perform their

obligations to us or reduce the revenues we receive from their

use of our services. The speed and pervasiveness with which

information can be disseminated through these channels, in

particular social media, may magnify risks relating to

negative publicity.

Substantial civil or criminal liability or significant

regulatory action against us could have material

adverse financial effects or cause us significant

reputational harm, which in turn could seriously harm

our business prospects.

We face significant legal risks in our businesses, and the

volume of claims and amount of damages and penalties

claimed in litigation and regulatory proceedings against

financial institutions remain high. See Notes 18 and 27 to the

consolidated financial statements in Part II, Item 8 of this

Form 10-K for information about certain of our legal and

regulatory proceedings and investigations. We have seen legal

claims by consumers and clients increase in a market

downturn and employment-related claims increase following

periods in which we have reduced our headcount.

Additionally, governmental entities have been plaintiffs and

are parties in certain of our legal proceedings, and we may

face future civil or criminal actions or claims by the same or

other governmental entities, as well as follow-on civil

litigation that is often commenced after regulatory

settlements.

Significant settlements by several large financial institutions,

including, in some cases, us, with governmental entities have

been publicly announced. The trend of large settlements with

governmental entities may adversely affect the outcomes for

other financial institutions, including, in some cases, us, in

similar actions, especially where governmental officials have

announced that the large settlements will be used as the basis

or a template for other settlements. The uncertain regulatory

enforcement environment makes it difficult to estimate

probable losses, which can lead to substantial disparities

between legal reserves and subsequent actual settlements or

penalties.

Claims of collusion or anti-competitive conduct have become

more common. Financial institutions (including us) have been

subject to civil cases and investigatory demands relating to

alleged bid-rigging, group boycotts or other anti-competitive

practices. Antitrust laws generally provide for joint and

several liability and treble damages. These claims have

resulted in significant settlements and fines in the past and

may do so in the future.

We are subject to laws and regulations worldwide, including

the FCPA and the U.K. Bribery Act, relating to corrupt and

illegal payments to, and hiring practices with regard to,

government officials and others. Violation of these or similar

laws and regulations have in the past resulted in and could in

the future result in significant monetary penalties. Such

violations could also result in severe restrictions on our

activities and damage to our reputation.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Goldman Sachs 2022 Form 10-K

Certain law enforcement authorities have recently required

admissions of wrongdoing, and, in some cases, criminal

pleas, as part of the resolutions of matters brought against

financial institutions or their employees. See for example,

“1MDB-Related Matters” in Note 27 to the consolidated

financial statements in Part II, Item 8 of this Form 10-K. Any

such resolution of a criminal matter involving us or our

employees could lead to increased exposure to civil litigation,

could adversely affect our reputation, could result in

penalties or limitations on our ability to conduct our

activities generally or in certain circumstances and could have

other negative effects. Further, as a result of this type of

settlement, we are no longer a “well-known seasoned issuer,”

which places limitations on the manner in which we can

market our securities.

In conducting our businesses around the world, we

are subject to political, legal, regulatory and other

risks that are inherent in operating in many countries.

In conducting our businesses and supporting our global

operations, we are subject to risks of possible nationalization,

expropriation, price controls, capital controls, exchange

controls, communications and other content restrictions, and

other restrictive governmental actions. For example,

sanctions have been imposed by the U.S. and the E.U. on

certain individuals and companies in Russia and Venezuela.

In many countries, the laws and regulations applicable to the

securities and financial services industries and many of the

transactions in which we are involved are uncertain and

evolving, and it may be difficult for us to determine the exact

requirements of local laws in every market. We have been in

some cases subject to divergent and conflicting laws and

regulations across markets, and we are increasingly subject to

the risk that the jurisdictions in which we operate have

implemented or may implement laws and regulations that

directly conflict with those of another jurisdiction. Any

determination by local regulators that we have not acted in

compliance with the application of local laws in a particular

market or our failure to develop effective working

relationships with local regulators could have a significant

and negative effect not only on our businesses in that market,

but also on our reputation generally. Further, in some

jurisdictions a failure, or alleged failure, to comply with laws

and regulations has subjected and may in the future subject

us and our personnel not only to civil actions, but also

criminal actions and other sanctions. We are also subject to

the enhanced risk that transactions we structure might not be

legally enforceable in all cases.

While business and other practices throughout the world

differ, our principal entities are subject in their operations

worldwide to rules and regulations relating to corrupt and

illegal payments, hiring practices and money laundering, as

well as laws relating to doing business with certain

individuals, groups and countries, such as the FCPA, the BSA

and the U.K. Bribery Act. While we have invested and

continue to invest significant resources in training and in

compliance monitoring, the geographical diversity of our

operations, employees, clients and consumers, as well as the

vendors and other third parties that we deal with, greatly

increases the risk that we may be found in violation of such

rules or regulations and any such violation could subject us to

significant penalties or adversely affect our reputation. See

for example, “1MDB-Related Matters” in Note 27 to the

consolidated financial statements in Part II, Item 8 of this

Form 10-K.

In addition, there have been a number of highly publicized

cases around the world, involving actual or alleged fraud or

other misconduct by employees in the financial services

industry, and we have had and may in the future have

employee misconduct. This misconduct has included and

may also in the future include intentional efforts to ignore or

circumvent applicable policies, rules or procedures or

misappropriation of funds and the theft of proprietary

information, including proprietary software. It is not always

possible to deter or prevent employee misconduct and the

precautions we take to prevent and detect this activity have

not been and may not be effective in all cases, as reflected by

the settlements relating to 1MDB.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Goldman Sachs 2022 Form 10-K 45

The application of regulatory strategies and

requirements in the U.S. and non-U.S. jurisdictions to

facilitate the orderly resolution of large financial

institutions could create greater risk of loss for Group

Inc.’s security holders.

As described in “Business — Regulation — Banking

Supervision and Regulation — Insolvency of an IDI or a

BHC,” if the FDIC is appointed as receiver under OLA, the

rights of Group Inc.’s creditors would be determined under

OLA, and substantial differences exist in the rights of

creditors between OLA and the U.S. Bankruptcy Code,

including the right of the FDIC under OLA to disregard the

strict priority of creditor claims in some circumstances, which

could have a material adverse effect on our debtholders.

The FDIC has announced that a single point of entry strategy

may be a desirable strategy under OLA to resolve a large

financial institution in a manner that would, among other

things, impose losses on shareholders, debtholders and other

creditors of the top-tier BHC (in our case, Group Inc.), while

the BHC’s subsidiaries may continue to operate. It is possible

that the application of the single point of entry strategy under

OLA, in which Group Inc. would be the only entity to enter

resolution proceedings (and its material broker-dealer, bank

and other operating entities would not enter resolution

proceedings), would result in greater losses to Group Inc.’s

security holders (including holders of our fixed rate, floating

rate and indexed debt securities), than the losses that would

result from the application of a bankruptcy proceeding or a

different resolution strategy, such as a multiple point of entry

resolution strategy for Group Inc. and certain of its material

subsidiaries.

Assuming Group Inc. entered resolution proceedings and that

support from Group Inc. or other available resources to its

subsidiaries was sufficient to enable the subsidiaries to

remain solvent, losses at the subsidiary level would be

transferred to Group Inc. and ultimately borne by Group

Inc.’s security holders, third-party creditors of Group Inc.’s

subsidiaries would receive full recoveries on their claims, and

Group Inc.’s security holders (including our shareholders,

debtholders and other unsecured creditors) could face

significant and possibly complete losses. In that case, Group

Inc.’s security holders would face losses while the third-party

creditors of Group Inc.’s subsidiaries would incur no losses

because the subsidiaries would continue to operate and

would not enter resolution or bankruptcy proceedings. In

addition, holders of Group Inc.’s eligible long-term debt and

holders of Group Inc.’s other debt securities could face losses

ahead of its other similarly situated creditors in a resolution

under OLA if the FDIC exercised its right, described above,

to disregard the priority of creditor claims.

OLA also provides the FDIC with authority to cause

creditors and shareholders of the financial company in

receivership to bear losses before taxpayers are exposed to

such losses, and amounts owed to the U.S. government would

generally receive a statutory payment priority over the claims

of private creditors, including senior creditors.

In addition, under OLA, claims of creditors (including

debtholders) could be satisfied through the issuance of equity

or other securities in a bridge entity to which Group Inc.’s

assets are transferred. If such a securities-for-claims exchange

were implemented, there can be no assurance that the value

of the securities of the bridge entity would be sufficient to

repay or satisfy all or any part of the creditor claims for

which the securities were exchanged. While the FDIC has

issued regulations to implement OLA, not all aspects of how

the FDIC might exercise this authority are known and

additional rulemaking is possible.

In addition, certain jurisdictions, including the U.K. and the

E.U., have implemented resolution regimes to provide

resolution authorities with the ability to recapitalize a failing

entity by writing down its unsecured debt or converting its

unsecured debt into equity. Such “bail-in” powers are

intended to enable the recapitalization of a failing institution

by allocating losses to its shareholders and unsecured

debtholders. For example, the Bank of England requires a

certain amount of intercompany funding that we provide to

our material U.K. subsidiaries to contain a contractual trigger

to expressly permit the Bank of England to exercise such

“bail-in” powers in certain circumstances. If the

intercompany funding we provide to our subsidiaries is

“bailed in,” Group Inc.’s claims on its subsidiaries would be

subordinated to the claims of the subsidiaries’ third-party

creditors or written down. U.S. regulators are considering

and non-U.S. authorities have adopted requirements that

certain subsidiaries of large financial institutions maintain

minimum amounts of total loss-absorbing capacity that

would pass losses up from the subsidiaries to the top-tier

BHC and, ultimately, to security holders of the top-tier BHC

in the event of failure.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Goldman Sachs 2022 Form 10-K

The application of Group Inc.’s proposed resolution

strategy could result in greater losses for Group Inc.’s

security holders.

In our resolution plan, Group Inc. would be resolved under

the U.S. Bankruptcy Code. The strategy described in our

resolution plan is a variant of the single point of entry

strategy: Group Inc. and Goldman Sachs Funding LLC

(Funding IHC), a wholly-owned, direct subsidiary of Group

Inc., would recapitalize and provide liquidity to certain major

subsidiaries, including through the forgiveness of

intercompany indebtedness, the extension of the maturities of

intercompany indebtedness and the extension of additional

intercompany loans. If this strategy were successful, creditors

of some or all of Group Inc.’s major subsidiaries would

receive full recoveries on their claims, while Group Inc.’s

security holders could face significant and possibly complete

losses.

To facilitate the execution of our resolution plan, we formed

Funding IHC. In exchange for an unsecured subordinated

funding note and equity interest, Group Inc. transferred

certain intercompany receivables and substantially all of its

GCLA to Funding IHC, and agreed to transfer additional

GCLA above prescribed thresholds.

We also put in place a Capital and Liquidity Support

Agreement (CLSA) among Group Inc., Funding IHC and our

major subsidiaries. Under the CLSA, Funding IHC has

provided Group Inc. with a committed line of credit that

allows Group Inc. to draw sufficient funds to meet its cash

needs during the ordinary course of business. In addition, if

our financial resources deteriorate so severely that resolution

may be imminent, (i) the committed line of credit will

automatically terminate and the unsecured subordinated

funding note will automatically be forgiven, (ii) all

intercompany receivables owed by the major subsidiaries to

Group Inc. will be transferred to Funding IHC or their

maturities will be extended to five years, (iii) Group Inc. will

be obligated to transfer substantially all of its remaining

intercompany receivables and GCLA (other than an amount

to fund anticipated bankruptcy expenses) to Funding IHC,

and (iv) Funding IHC will be obligated to provide capital and

liquidity support to the major subsidiaries. Group Inc.’s and

Funding IHC’s obligations under the CLSA are secured

pursuant to a related security agreement. Such actions would

materially and adversely affect Group Inc.’s liquidity. As a

result, during a period of severe stress, Group Inc. might

commence bankruptcy proceedings at an earlier time than it

otherwise would if the CLSA and related security agreement

had not been implemented.

If Group Inc.’s proposed resolution strategy were successful,

Group Inc.’s security holders could face losses while the

third-party creditors of Group Inc.’s major subsidiaries

would incur no losses because those subsidiaries would

continue to operate and not enter resolution or bankruptcy

proceedings. As part of the strategy, Group Inc. could also

seek to elevate the priority of its guarantee obligations

relating to its major subsidiaries’ derivative contracts or

transfer them to another entity so that cross-default and early

termination rights would be stayed under the ISDA

Protocols, as applicable, which would result in holders of

Group Inc.’s eligible long-term debt and holders of Group

Inc.’s other debt securities incurring losses ahead of the

beneficiaries of those guarantee obligations. It is also possible

that holders of Group Inc.’s eligible long-term debt and other

debt securities could incur losses ahead of other similarly

situated creditors of Group Inc.’s major subsidiaries.

If Group Inc.’s proposed resolution strategy were not

successful, Group Inc.’s financial condition would be

adversely impacted and Group Inc.’s security holders,

including debtholders, may as a consequence be in a worse

position than if the strategy had not been implemented. In all

cases, any payments to debtholders are dependent on our

ability to make such payments and are therefore subject to

our credit risk.

As a result of our recovery and resolution planning processes,

including incorporating feedback from our regulators, we

may incur increased operational, funding or other costs and

face limitations on our ability to structure our internal

organization or engage in internal or external activities in a

manner that we may otherwise deem most operationally

efficient.

Our commodities activities, particularly our physical

commodities activities, subject us to extensive

regulation and involve certain potential risks,

including environmental, reputational and other risks

that may expose us to significant liabilities and costs.

As part of our commodities business, we purchase and sell

certain physical commodities, arrange for their storage and

transport, and engage in market making of commodities. The

commodities involved in these activities may include crude

oil, refined oil products, natural gas, liquefied natural gas,

electric power, agricultural products, metals (base and

precious), minerals (including unenriched uranium), emission

credits, coal, freight and related products and indices.

We make investments in and finance entities that engage in

the production, storage and transportation of numerous

commodities, including many of the commodities referenced

above.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Goldman Sachs 2022 Form 10-K 47

These activities subject us and/or the entities in which we

invest to extensive and evolving federal, state and local

energy, environmental, antitrust and other governmental

laws and regulations worldwide, including environmental

laws and regulations relating to, among others, air quality,

water quality, waste management, transportation of

hazardous substances, natural resources, site remediation and

health and safety. Additionally, rising climate change

concerns have led to additional regulation that could increase

the operating costs and adversely affect the profitability of

certain of our investments.

There may be substantial costs in complying with current or

future laws and regulations relating to our commodities-

related activities and investments. Compliance with these

laws and regulations could require significant commitments

of capital toward environmental monitoring, renovation of

storage facilities or transport vessels, payment of emission

fees and carbon or other taxes, and application for, and

holding of, permits and licenses.

Commodities involved in our intermediation activities and

investments are also subject to the risk of unforeseen or

catastrophic events, which are likely to be outside of our

control, including those arising from the breakdown or

failure of transport vessels, storage facilities or other

equipment or processes or other mechanical malfunctions,

fires, leaks, spills or release of hazardous substances,

performance below expected levels of output or efficiency,

terrorist attacks, extreme weather events or other natural

disasters or other hostile or catastrophic events. In addition,

we rely on third-party suppliers or service providers to

perform their contractual obligations and any failure on their

part, including the failure to obtain raw materials at

reasonable prices or to safely transport or store commodities,

could expose us to costs or losses. Also, while we seek to

insure against potential risks, we may not be able to obtain

insurance to cover some of these risks and the insurance that

we have may be inadequate to cover our losses.

The occurrence of any of such events may prevent us from

performing under our agreements with clients, may impair

our operations or financial results and may result in

litigation, regulatory action, negative publicity or other

reputational harm.

We may also be required to divest or discontinue certain of

these activities for regulatory or legal reasons or due to the

transition to a less carbon-dependent economy in response to

climate change.

Competition

Our results have been and may in the future be

adversely affected by the composition of our client

base.

Our client base is not the same as that of our major

competitors. Our businesses may have a higher or lower

percentage of clients in certain industries or markets than

some or all of our competitors. Therefore, unfavorable

industry developments or market conditions affecting certain

industries or markets have resulted in the past and may result

in the future in our businesses underperforming relative to

similar businesses of a competitor if our businesses have a

higher concentration of clients in such industries or markets.

For example, our market-making businesses have a higher

percentage of clients with actively managed assets than some

of our competitors and such clients have in the past been and

may in the future be disproportionately affected by low

volatility.

Correspondingly, favorable or simply less adverse

developments or market conditions involving industries or

markets in a business where we have a lower concentration

of clients in such industry or market have also resulted in the

past and may result in the future in our underperforming

relative to a similar business of a competitor that has a higher

concentration of clients in such industry or market. For

example, we have a smaller corporate client base in our

market-making businesses than some of our peers and

therefore those competitors may benefit more from increased

activity by corporate clients. Similarly, we have not

historically engaged in retail equities intermediation to the

same extent as other financial institutions, which has in the

past affected and could in the future adversely affect our

market share in equities execution.

The financial services industry is highly competitive.

The financial services industry and all of our businesses are

intensely competitive, and we expect them to remain so. We

compete on the basis of a number of factors, including

transaction execution, our products and services, innovation,

reputation, creditworthiness and price. There has been

substantial consolidation and convergence among companies

in the financial services industry. This has hastened the

globalization of the securities and other financial services

markets. As a result, we have had to commit capital to

support our international operations and to execute large

global transactions. As we have expanded into new business

areas and new geographic regions, we have faced competitors

with more experience and more established relationships

with clients, regulators and industry participants in the

relevant market, which could adversely affect our ability to

expand our businesses.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Goldman Sachs 2022 Form 10-K

Governments and regulators have adopted regulations,

imposed taxes, adopted compensation restrictions or

otherwise put forward various proposals that have impacted

or may impact our ability to conduct certain of our

businesses in a cost-effective manner or at all in certain or all

jurisdictions, including proposals relating to restrictions on

the type of activities in which financial institutions are

permitted to engage. These or other similar rules, many of

which do not apply to all our U.S. or non-U.S. competitors,

could impact our ability to compete effectively.

Pricing and other competitive pressures in our businesses

have continued to increase, particularly in situations where

some of our competitors may seek to increase market share

by reducing prices. For example, in connection with

investment banking and other assignments, in response to

competitive pressure we have experienced, we have extended

and priced credit at levels that in some cases have not fully

compensated us for the risks we undertook.

The financial services industry is highly interrelated in that a

significant volume of transactions occur among a limited

number of members of that industry. Many transactions are

syndicated to other financial institutions, and financial

institutions are often counterparties in transactions. This has

led to claims by other market participants and regulators that

such institutions have colluded in order to manipulate

markets or market prices, including allegations that antitrust

laws have been violated. While we have extensive procedures

and controls that are designed to identify and prevent such

activities, they may not be effective. Allegations of such

activities, particularly by regulators, can have a negative

reputational impact and can subject us to large fines and

settlements, and potentially significant penalties, including

treble damages.

The growth of electronic trading and the introduction

of new products and technologies, including trading

and distributed ledger technologies, including

cryptocurrencies, has increased competition.

Technology is fundamental to our business and our industry.

The growth of electronic trading and the introduction of new

technologies is changing our businesses and presenting us

with new challenges. Securities, futures and options

transactions are increasingly occurring electronically, both on

our own systems and through other alternative trading

systems, and it appears that the trend toward alternative

trading systems will continue. Some of these alternative

trading systems compete with us, particularly our exchange-

based market-making activities, and we may experience

continued competitive pressures in these and other areas. In

addition, the increased use by our clients of low-cost

electronic trading systems and direct electronic access to

trading markets could cause a reduction in commissions and

spreads. As our clients increasingly use our systems to trade

directly in the markets, we may incur liabilities as a result of

their use of our order routing and execution infrastructure.

We have invested significant resources into the development

of electronic trading systems and expect to continue to do so,

but there is no assurance that the revenues generated by these

systems will yield an adequate return, particularly given the

generally lower commissions arising from electronic trades.

In addition, the emergence, adoption and evolution of new

technologies, including distributed ledgers, such as digital

assets and blockchain, have required us to invest resources to

adapt our existing products and services, and we expect to

continue to make such investments, which could be material.

The adoption and evolution of such new technologies may

also increase our compliance and regulatory costs. Further,

technologies, such as those based on distributed ledgers, that

do not require intermediation could also significantly disrupt

payments processing and other financial services. Regulatory

limitations on our involvement in products and platforms

involving digital assets and distributed ledger technologies

may not apply equally or in some cases at all to certain of our

competitors. We may not be as timely or successful in

developing or integrating, or even able to develop or

integrate, new products and technologies, such as those built

on distributed ledgers, into our existing products and

services, adapting to changes in consumer preferences or

achieving market acceptance of our products and services,

any of which could affect our ability to attract or retain

clients, cause us to lose market share or result in service

disruptions and in turn reduce our revenues or otherwise

adversely affect us.

Our businesses would be adversely affected if we are

unable to hire and retain qualified employees.

Our performance is largely dependent on the talents and

efforts of highly skilled people; therefore, our continued

ability to compete effectively in our businesses, to manage

our businesses effectively and to expand into new businesses

and geographic areas depends on our ability to attract new

talented and diverse employees and to retain and motivate

our existing employees. Factors that affect our ability to

attract and retain such employees include the level and

composition of our compensation and benefits, and our

reputation as a successful business with a culture of fairly

hiring, training and promoting qualified employees. As a

significant portion of the compensation that we pay to our

employees is in the form of year-end discretionary

compensation, a significant portion of which is in the form of

deferred equity-related awards, declines in our profitability,

or in the outlook for our future profitability, as well as

regulatory limitations on compensation levels and terms, can

negatively impact our ability to hire and retain highly

qualified employees.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Goldman Sachs 2022 Form 10-K 49

Competition from within the financial services industry and

from businesses outside the financial services industry,

including the technology industry, for qualified employees

has often been intense. We have experienced increased

competition in hiring and retaining employees to address the

demands of our expanding consumer-oriented businesses and

our technology initiatives. This is also the case in emerging

and growth markets, where we are often competing for

qualified employees with entities that have a significantly

greater presence or more extensive experience in the region.

Laws or regulations in jurisdictions in which our operations

are located that affect taxes on our employees’ income or the

amount or composition of compensation, or that require us

to disclose our or our competitors’ compensation practices,

may also adversely affect our ability to hire and retain

qualified employees in those jurisdictions.

As described further in “Business — Regulation —

Compensation Practices” in Part I, Item 1 of this Form 10-K,

our compensation practices are subject to review by, and the

standards of, the FRB. As a large global financial and

banking institution, we are subject to limitations on

compensation practices (which may or may not affect the

companies with which we compete for talent) by the FRB, the

PRA, the FCA, the FDIC and other regulators worldwide.

These limitations have shaped our compensation practices,

which has, in some cases, adversely affected our ability to

attract and retain talented employees, in particular in relation

to companies not subject to these limitations, and future

legislation or regulation may have similar adverse effects.

Our operating expenses and efficiency ratio depend, in part,

on our overall headcount and the proportion of our

employees located in strategic locations. Our future human

capital resource requirements and the benefits provided by

strategic locations are uncertain, and we may not realize the

benefits we anticipate.

Market Developments and General Business

Environment

Our businesses, financial condition, liquidity and

results of operations have been and may in the future

be adversely affected by unforeseen or catastrophic

events, including pandemics, terrorist attacks,

extreme weather events or other natural disasters.

The occurrence of unforeseen or catastrophic events,

including pandemics, such as COVID-19, or other

widespread health emergencies (or concerns over the

possibility of such an emergency), terrorist attacks, extreme

weather events, solar events or other natural disasters, could

adversely affect our business, financial condition, liquidity

and results of operations. These events could have such

effects through economic or financial market disruptions or

challenging economic or market conditions more generally,

the deterioration of our creditworthiness or that of our

counterparties, changes in consumer sentiment and consumer

borrowing, spending and savings patterns, liquidity stress, or

operational difficulties (such as travel limitations and

limitations on occupancy in our offices) that impair our

ability to manage our businesses.

The COVID-19 pandemic created economic and financial

disruptions that have in the past adversely affected and may

in the future adversely affect our business, financial

condition, liquidity and results of operations. The extent to

which the COVID-19 pandemic will negatively affect our

businesses, financial condition, liquidity and results of

operations will depend on, among other things, future

developments, including any resurgence of COVID-19 cases,

the emergence of new variants of COVID-19 and the

effectiveness of vaccines and treatments over the long term

and against new variants, which are highly uncertain and

cannot be predicted.

Climate change could disrupt our businesses and

adversely affect client activity levels and the

creditworthiness of our clients and counterparties,

and our efforts to address concerns relating to climate

change could result in damage to our reputation.

Climate change may cause extreme weather events that

disrupt operations at one or more of our primary locations,

which may negatively affect our ability to service and interact

with our clients, adversely affect the value of our

investments, including our real estate investments, and reduce

the availability or increase the cost of insurance. Climate

change and the transition to a less carbon-dependent

economy may also have a negative impact on the operations

or financial condition of our clients and counterparties,

which may decrease revenues from those clients and

counterparties and increase the credit risk associated with

loans and other credit exposures to those clients and

counterparties. In addition, climate change may impact the

broader economy.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Goldman Sachs 2022 Form 10-K

We are also exposed to risks resulting from changes in public

policy, laws and regulations, or market and public

perceptions and preferences in connection with the transition

to a less carbon-dependent economy. These changes could

adversely affect our business, results of operations and

reputation. For example, our reputation and client

relationships may be damaged as a result of our or our

clients’ involvement in, or decision not to participate in,

certain industries or projects associated with causing or

exacerbating climate change, as well as any decisions we

make to continue to conduct or change our activities in

response to considerations relating to climate change. If we

are unable to achieve our objectives relating to climate

change or our response to climate change is perceived to be

ineffective, insufficient or otherwise inappropriate, our

business, reputation and efforts to recruit and retain

employees may suffer.

New regulations or guidance relating to climate change, as

well as the perspectives of government officials, regulators,

shareholders, employees and other stakeholders regarding

climate change, may affect whether and on what terms and

conditions we engage in certain activities or offer certain

products. Federal and state, and non-U.S. banking regulators

and supervisory authorities, shareholders and other

stakeholders have increasingly viewed financial institutions

as playing an important role in helping to address risks

related to climate change, both directly and with respect to

their clients, which may result in financial institutions coming

under increased requirements and expectations regarding the

disclosure and management of their climate risks and related

lending, investment and advisory activities. The FRB has

announced that we are among the six U.S. financial

institutions participating in a pilot climate scenario analysis

exercise in 2023, and we also are subject to new or heightened

regulatory requirements relating to climate change, such as

requirements relating to operational resiliency or stress

testing for various climate stress scenarios. Any such new or

heightened requirements could result in increased regulatory,

compliance or other costs or higher capital requirements. The

risks associated with, and the perspective of regulators,

shareholders, employees and other stakeholders regarding,

climate change are continuing to evolve rapidly, which can

make it difficult to assess the ultimate impact on us of climate

change-related risks and uncertainties, and we expect that

climate change-related risks will increase over time.

Our business, financial condition, liquidity and results

of operations may be adversely affected by

disruptions in the global economy caused by Russia’s

invasion of Ukraine and related sanctions and other

developments.

The war between Russia and Ukraine has negatively affected

the global economy. Governments around the world have

responded to Russia’s invasion by imposing economic

sanctions and export controls on certain industry sectors,

including price caps on Russian oil, and parties in Russia.

Compliance with economic sanctions and restrictions

imposed by governments has increased our costs and

otherwise adversely affected our business and may continue

to do so. Russia has responded with its own restrictions

against investors and countries outside Russia and has

proposed additional measures aimed at non-Russia owned

businesses. Businesses in the U.S. and globally have

experienced shortages in materials and increased costs for

transportation, energy, and raw materials due in part to the

negative effects of the war on the global economy. The

escalation or continuation of the war between Russia and

Ukraine or other hostilities could result in, among other

things, further increased risk of cyber attacks, an increased

frequency and volume of failures to settle securities

transactions, supply chain disruptions, higher inflation, lower

consumer demand and increased volatility in commodity,

currency and other financial markets.

The extent and duration of the war, sanctions and resulting

market disruptions are impossible to predict, and the

consequences for our business could be significant. See

“Management’s Discussion and Analysis of Financial

Condition and Results of Operations — Risk Management

— Credit Risk Management — Selected Exposures —

Country Exposures” for further information about our credit

exposure to Russia and Ukraine.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Goldman Sachs 2022 Form 10-K 51

Certain of our businesses, our funding instruments

and financial products may be adversely affected by

changes in or the discontinuance of Interbank Offered

Rates (IBORs), in particular USD LIBOR.

On January 1, 2022, the publication of all EUR, CHF, JPY

and GBP LIBOR (non-USD LIBOR) settings along with

certain USD LIBOR settings ceased. The publication of the

most commonly used USD LIBOR settings as representative

rates will cease after June 2023. The FCA proposed that

certain of those USD LIBOR settings continue to be

published on a synthetic basis through September 2024. The

FCA has allowed the publication and use of synthetic rates

for certain GBP LIBOR settings in legacy GBP LIBOR-based

derivative contracts through March 2024.

The International Swaps and Derivatives Association (ISDA)

2020 IBOR Fallbacks Protocol (IBOR Protocol) has provided

derivatives market participants with amended fallbacks for

legacy and new derivative contracts to mitigate legal or

economic uncertainty. Both counterparties have to adhere to

the IBOR Protocol or engage in bilateral amendments for the

terms to be effective for derivative contracts. ISDA has

confirmed that the FCA’s formal announcement to cease both

non-USD and USD LIBOR settings fixed the spread

adjustment for all LIBOR rates and as a result fallbacks

applied automatically for non-USD LIBOR settings following

December 31, 2021 and will apply automatically for USD

LIBOR settings following June 30, 2023. The Adjustable

Interest Rate (LIBOR) Act (LIBOR Act), that was enacted in

March 2022, provides a statutory framework to replace USD

LIBOR with a benchmark rate based on the Secured

Overnight Financing Rate (SOFR) for contracts governed by

U.S. law that have no fallbacks or fallbacks that would

require the use of a poll or LIBOR-based rate. In December

2022, the FRB adopted a final rule that implements the

LIBOR Act, which will become effective on February 27,

2023. The final rule identifies different SOFR-based

replacement rates for derivative contracts, for cash

instruments such as floating-rate notes and preferred stock,

for consumer contracts, for certain government-sponsored

enterprise contracts and for certain student loan

securitizations that lack a fallback to an alternative rate when

USD LIBOR ceases to be published on June 30, 2023. As the

transition from LIBOR is ongoing, there continues to be

uncertainty as to the ultimate effect of the transition on the

financial markets for LIBOR-linked financial instruments.

Similar developments have occurred with respect to other

IBORs.

The language in our contracts and financial instruments that

define IBORs, in particular LIBOR, have developed over time

and have various events that trigger when a successor rate to

the designated rate would be selected. Once a trigger is

satisfied, contracts and financial instruments often give the

calculation agent (which may be us) discretion over the

successor rate or benchmark to be selected. Although the

LIBOR Act includes safe harbors if the FRB-identified SOFR-

based replacement rate is selected, these safe harbors are

untested. As a result, and despite the enactment of the LIBOR

Act, for the most commonly used USD LIBOR settings, the

selection of a successor rate could result in client disputes and

litigation surrounding the proper interpretation of our IBOR-

based contracts and financial instruments. Discretionary

actions taken in connection with the implementation of

fallback provisions could also result in client disputes and

litigation particularly for derivatives and other synthetic

instruments.

Changes in, the discontinuation of, or changes in market

acceptance of any IBOR, particularly USD LIBOR, as a

reference rate may adversely affect certain of our businesses,

our funding instruments and financial products.

Certain of our businesses and our funding

instruments may be adversely affected by changes in

other reference rates, currencies, indexes, baskets or

ETFs to which products we offer or funding that we

raise are linked.

Many of the products that we own or that we offer, such as

structured notes, warrants, swaps or security-based swaps,

pay interest or determine the principal amount to be paid at

maturity or in the event of default by reference to rates or by

reference to an index, currency, basket, ETF or other

financial metric (the underlier). In the event that the

composition of the underlier is significantly changed, by

reference to rules governing such underlier or otherwise, the

underlier ceases to exist (for example, in the event that a

country withdraws from the Euro or links its currency to or

delinks its currency from another currency or benchmark, an

index or ETF sponsor materially alters the composition of an

index or ETF, or stocks in a basket are delisted or become

impermissible to be included in the index or ETF), the

underlier ceases to be recognized as an acceptable market

benchmark or there are legal or regulatory constraints on

linking a financial instrument to the underlier, we may

experience adverse effects.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Goldman Sachs 2022 Form 10-K

Our business, financial condition, liquidity and results

of operations may be adversely affected by

disruptions in the global economy caused by

escalating tensions between the U.S. and China.

Continued or escalating tensions between the U.S. and China

have resulted in and may result in additional changes to U.S.

international trade and investment policies, which could

disrupt international trade and investment, adversely affect

financial markets, including market activity levels, and

adversely impact our revenues. Continued or escalating

tensions may also lead to the U.S., China or other countries

taking other actions, which could include the implementation

of sanctions, tariffs or foreign exchange measures, the large-

scale sale of U.S. Treasury securities or restrictions on cross-

border trade, investment or transfer of information or

technology. Any such developments could adversely affect

our or our clients’ businesses, as well as our financial

condition, liquidity and results of operations, possibly

materially.

A conflict, or concerns about a potential conflict, involving

China and Taiwan, the U.S. or other countries could

negatively impact financial markets and our or our clients’

businesses. Trade restrictions by the U.S. or other countries

in response to a conflict or potential conflict involving China,

including financial and economic sanctions and export

controls against certain organizations or individuals, or

actions taken by China in response to trade restrictions,

could negatively impact our or our clients’ ability to conduct

business in certain countries or with certain counterparties

and could negatively impact regional and global financial

markets and economic conditions. Any of the foregoing could

adversely affect our business, financial condition, liquidity

and results of operations, possibly materially.

We face enhanced risks as new business initiatives

and acquisitions lead us to engage in new activities,

operate in new locations, transact with a broader array

of clients and counterparties and expose us to new

asset classes and new markets.

A number of our recent and planned business initiatives and

expansions of existing businesses, including through

acquisitions and partnership arrangements, could continue to

bring us into contact, directly or indirectly, with individuals

and entities that are not within our traditional client and

counterparty base, expose us to new asset classes and new

markets, and present us with integration challenges. For

example, we continue to transact business and invest in new

regions, including a wide range of emerging and growth

markets, and we expect this trend to continue. Various

emerging and growth market countries have experienced

severe economic and financial disruptions, including

significant devaluations of their currencies, defaults or

threatened defaults on sovereign debt, capital and currency

exchange controls, and low or negative growth rates in their

economies. The possible effects of any of these conditions

include an adverse impact on our businesses and increased

volatility in financial markets generally.

Furthermore, in a number of our businesses, including where

we make markets, invest and lend, we own interests in, or

otherwise become affiliated with the ownership and

operation of, public services, such as airports, toll roads and

shipping ports, as well as physical commodities and

commodities infrastructure components, both within and

outside the U.S.

We have increased our consumer-oriented deposit-taking and

lending activities. For example, we now issue credit cards to

consumers and through our acquisition of GreenSky, Inc.

(GreenSky), we expanded our offering of point-of-sale

financing. To the extent we engage in those and other

consumer-oriented activities, we have faced, and would

continue to face, additional compliance, legal and regulatory

risk, increased reputational risk and increased operational

risk due to, among other things, higher transaction volumes

and significantly increased retention and transmission of

consumer and client information. Acquisitions and new

products can also expose us to new or different types of risks.

For example, providing point-of-sale financing through

GreenSky also subjects us to risks relating to retaining and

attracting merchants and servicing loans for other banks, as

well as potential liability for remediation costs if merchants

fail to fulfill their obligations to consumers. We are also

subject to additional legal requirements, including with

respect to suitability and consumer protection (for example,

Regulation Best Interest, fair lending laws and regulations

and privacy laws and regulations). Further, identity fraud

may increase and credit reporting practices may change in a

manner that makes it more difficult for financial institutions,

such as us, to evaluate the creditworthiness of consumers.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Goldman Sachs 2022 Form 10-K 53

We have increased and intend to further increase our

transaction banking activities. As a result, we expect to face

additional compliance, legal and regulatory risk, including

with respect to know-your-customer, anti-money laundering

and reporting requirements and prohibitions on transfers of

property belonging to countries, entities and individuals

subject to sanctions by U.S. or other governmental

authorities.

New business initiatives expose us to new and enhanced

risks, including risks associated with dealing with

governmental entities, reputational concerns arising from

dealing with different types of clients, business partners,

counterparties and investors, greater regulatory scrutiny of

these activities, increased credit-related, market, sovereign

and operational risks, risks arising from accidents or acts of

terrorism, and reputational concerns with the manner in

which certain assets are being operated or held or in which

we interact with these clients, business partners,

counterparties and investors. Legal, regulatory and

reputational risks may also exist in connection with activities

and transactions involving new products or markets where

there is regulatory uncertainty or where there are different or

conflicting regulations depending on the regulator or the

jurisdiction involved, particularly where transactions in such

products may involve multiple jurisdictions.

We have developed and pursued new business and strategic

initiatives, including acquisitions, and expect to continue to

do so. If and to the extent we are unable to successfully

execute those initiatives, we may incur unanticipated costs

and losses, and face other adverse consequences, such as

negative reputational effects. In addition, the actual effects of

pursuing those initiatives may differ, possibly materially,

from the benefits that we expect to realize from them, such as

generating additional revenues, achieving expense savings,

reducing operational risk exposures or using capital and

funding more efficiently. Engaging in new activities exposes

us to a variety of risks, including that we may be unable to

successfully develop new, competitive, efficient and effective

systems and processes, and hire and retain the necessary

personnel. Due to our lack of historical experience with

unsecured consumer lending, our loan loss assumptions may

prove to be incorrect and we may incur losses significantly

above those which we originally anticipated in entering the

business or in expanding the product offerings for the

business.

In recent years, we have invested, and may continue to invest,

more in businesses that we expect will generate a higher level

of more consistent revenues. In order to develop and be able

to offer consumer financial products that compete effectively,

we have made and may continue to make significant

investments in technology and human capital resources in

connection with our consumer-oriented activities. Such

investments and acquisitions may not be successful or have

returns similar to our other businesses.

We may not be able to fully realize the expected

benefits or synergies from acquisitions or other

business initiatives in the time frames we expect, or at

all.

We have engaged in selective acquisitions and may continue

to do so in the future and these acquisitions may, individually

or in the aggregate, be material to us. Any future acquisitions

could involve the issuance of common stock and/or the

payment of cash as consideration. The success of our

acquisitions will depend, in part, on our ability to integrate

the acquired businesses and realize anticipated synergies, cost

savings and growth opportunities. We may face numerous

risks and uncertainties in combining and integrating the

relevant businesses and systems, including the need to

combine or separate accounting and data processing systems

and management controls and to integrate relationships with

clients, counterparties, regulators and others in connection

with acquisitions. Integration of acquired businesses is time-

consuming and could disrupt our ongoing businesses,

produce unforeseen regulatory or operating difficulties, cause

us to incur incremental expenses or require incremental

financial, management and other resources. It is also possible

that an acquisition, once announced, may not close due to the

failure to satisfy applicable closing conditions, such as the

receipt of necessary shareholder or regulatory approvals.

There is no assurance that any of our acquisitions will be

successfully integrated or yield all of the expected benefits

and synergies in the time frames that we expect, or at all. If

we are not able to integrate our acquisitions successfully, our

results of operations, financial condition and cash flows

could be adversely affected.

There is no assurance that the reorganization of our business

segments will yield all of the expected benefits in the time

frames that we expect, or at all.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Goldman Sachs 2022 Form 10-K

Item 1B. Unresolved Staff Comments

There are no material unresolved written comments that

were received from the SEC staff 180 days or more before the

end of our fiscal year relating to our periodic or current

reports under the Exchange Act.

Item 2. Properties

In the U.S. and elsewhere in the Americas, we have offices

consisting of approximately 6.7 million square feet of leased

and owned space. Our principal executive offices are located

at 200 West Street, New York, New York and consist of

approximately 2.1 million square feet. The building is located

on a parcel leased from Battery Park City Authority pursuant

to a ground lease. Under the lease, Battery Park City

Authority holds title to all improvements, including the office

building, subject to our right of exclusive possession and use

until June 2069, the expiration date of the lease. Under the

terms of the ground lease, we made a lump sum ground rent

payment in June 2007 of $161 million for rent through the

term of the lease.

In Europe, the Middle East and Africa, we have offices

consisting of approximately 1.8 million square feet of leased

and owned space. Our European headquarters is located in

London at Plumtree Court, consisting of approximately

826,000 square feet under a lease which can be terminated in

2039.

In Asia, Australia and New Zealand, we have offices

consisting of approximately 2.8 million square feet, including

our offices in India, and regional headquarters in Tokyo and

Hong Kong. In India, we have offices with approximately 1.7

million square feet, the majority of which have leases that

will expire in 2028.

In the preceding paragraphs, square footage figures are

provided only for properties that are used in the operation of

our businesses. We regularly evaluate our space capacity in

relation to current and projected headcount. We may incur

exit costs in the future if we (i) reduce our space capacity or

(ii) commit to, or occupy, new properties in locations in

which we operate and dispose of existing space that had been

held for potential growth. These costs may be material to our

operating results in a given period.

Item 3. Legal Proceedings

We are involved in a number of judicial, regulatory and

arbitration proceedings concerning matters arising in

connection with the conduct of our businesses. Many of these

proceedings are in early stages, and many of these cases seek

an indeterminate amount of damages. We have estimated the

upper end of the range of reasonably possible aggregate loss

for matters where we have been able to estimate a range and

we believe, based on currently available information, that the

results of matters where we have not been able to estimate a

range of reasonably possible loss, in the aggregate, will not

have a material adverse effect on our financial condition, but

may be material to our operating results in a given period.

Given the range of litigation and investigations presently

under way, our litigation expenses may remain high. See

“Management’s Discussion and Analysis of Financial

Condition and Results of Operations — Use of Estimates” in

Part II, Item 7 of this Form 10-K. See Notes 18 and 27 to the

consolidated financial statements in Part II, Item 8 of this

Form 10-K for information about our reasonably possible

aggregate loss estimate and judicial, regulatory and legal

proceedings.

Item 4. Mine Safety Disclosures

Not applicable.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Goldman Sachs 2022 Form 10-K 55

PART II

Item 5. Market for Registrant’s

Common Equity, Related Stockholder

Matters and Issuer Purchases of Equity

Securities

The principal market on which our common stock is traded

is the NYSE under the symbol “GS.” Information relating to

the performance of our common stock from December 31,

2017 through December 31, 2022 is set forth in

“Supplemental Financial Information – Common Stock

Performance” in Part II, Item 8 of this Form 10-K. As of

February10, 2023, there were 5,750 holders of record of our

common stock.

The table below presents purchases made by or on behalf of

Group Inc. or any “affiliated purchaser” (as defined in Rule

10b-18(a)(3) under the Exchange Act) of our common stock

during the fourth quarter of 2022.

Total

Purchased

Average

Price Paid

Per Share

Total Shares

Purchased as

Part of a Publicly

Announced

Program

Maximum Shares

That May Yet Be

Purchased Under

the Program

October

1,368,286 $ 328.88 1,368,286 27,092,986

November

2,816,047 $ 372.86 2,816,047 24,276,939

December

— — — 24,276,939

Total

4,184,333 4,184,333

Since March 2000, our Board had approved a repurchase

program authorizing repurchases of up to 605 million shares

of our common stock. In February 2023, our Board approved

a new share repurchase program authorizing repurchases of

up to $30 billion (in aggregate value and inclusive of shares

repurchased in 2023) of our common stock. This program

replaces our existing share repurchase program. The

repurchase program is effected primarily through regular

open-market purchases (which may include repurchase plans

designed to comply with Rule 10b5-1 and accelerated share

repurchases), the amounts and timing of which are

determined primarily by our current and projected capital

position, but which may also be influenced by general market

conditions and the prevailing price and trading volumes of

our common stock. The repurchase program has no set

expiration or termination date.

Information relating to compensation plans under which our

equity securities are authorized for issuance is presented in

Part III, Item 12 of this Form 10-K.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Goldman Sachs 2022 Form 10-K

Item 7. Management’s Discussion and

Analysis of Financial Condition and

Results of Operations

Introduction

The Goldman Sachs Group, Inc. (Group Inc. or parent

company), a Delaware corporation, together with its

consolidated subsidiaries, is a leading global financial

institution that delivers a broad range of financial services to

a large and diversified client base that includes corporations,

financial institutions, governments and individuals. Founded

in 1869, we are headquartered in New York and maintain

offices in all major financial centers around the world. We

manage and report our activities in three business segments:

Global Banking & Markets, Asset & Wealth Management

and Platform Solutions. See “Results of Operations” for

further information about our business segments.

When we use the terms “we,” “us” and “our,” we mean

Group Inc. and its consolidated subsidiaries. When we use

the term “our subsidiaries,” we mean the consolidated

subsidiaries of Group Inc. References to “this Form 10-K” are

to our Annual Report on Form 10-K for the year ended

December 31, 2022. All references to “the consolidated

financial statements” or “Supplemental Financial

Information” are to Part II, Item 8 of this Form 10-K. All

references to 2022, 2021 and 2020 refer to our years ended, or

the dates, as the context requires, December 31, 2022,

December 31, 2021 and December 31, 2020, respectively. Any

reference to a future year refers to a year ending on December

31 of that year.

Group Inc. is a bank holding company (BHC) and a financial

holding company regulated by the Board of Governors of the

Federal Reserve System (FRB).

In this discussion and analysis of our financial condition and

results of operations, we have included information that may

constitute “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 or statements of current conditions,

but instead represent only our beliefs regarding future events,

many of which, by their nature, are inherently uncertain and

outside our control.

By identifying these statements for you in this manner, we are

alerting you to the possibility that our actual results, financial

condition, liquidity and capital actions may differ, possibly

materially, from the anticipated results, financial condition,

liquidity and capital actions in these forward-looking

statements. Important factors that could cause our results,

financial condition, liquidity and capital actions to differ

from those in these statements include, among others, those

described in “Risk Factors” in Part I, Item 1A of this Form

10-K and “Forward-Looking Statements” in Part I, Item 1 of

this Form 10-K.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis

Goldman Sachs 2022 Form 10-K 57

These statements may relate to, among other things, (i) our

future plans and results, including our target ROE, ROTE,

efficiency ratio, Common Equity Tier 1 (CET1) capital ratio

and firmwide assets under supervision (AUS) inflows, and

how they can be achieved, (ii) trends in or growth

opportunities for our businesses, including the timing, costs,

profitability, benefits and other aspects of business and

strategic initiatives and their impact on our efficiency ratio,

(iii) our level of future compensation expense, including as a

percentage of both operating expenses and revenues, net of

provision for credit losses, (iv) our Investment banking fees

backlog and future results, (v) our expected interest income

and interest expense, (vi) our expense savings and strategic

locations initiatives, (vii) expenses we may incur, including

future litigation expense and expenses from investing in our

platform solutions business, (viii) the projected growth of our

deposits and other funding, asset liability management and

funding strategies and related interest expense savings, (ix)

our business initiatives, including transaction banking and

new products in our consumer platforms business, (x) our

planned 2023 benchmark debt issuances, (xi) the amount,

composition and location of global core liquid assets (GCLA)

we expect to hold, (xii) our credit exposures, (xiii) our

expected provisions for credit losses, (xiv) the adequacy of

our allowance for credit losses, (xv) the projected growth of

our platform solutions business, (xvi) the objectives and

effectiveness of our business continuity planning (BCP),

information security program, risk management and liquidity

policies, (xvii) our resolution plan and strategy and their

implications for stakeholders, (xviii) the design and

effectiveness of our resolution capital and liquidity models

and triggers and alerts framework, (xix) the results of stress

tests, the effect of changes to regulations, and our future

status, activities or reporting under banking and financial

regulation, (xx) our expected tax rate, (xxi) the future state

of our liquidity and regulatory capital ratios, and our

prospective capital distributions (including dividends and

repurchases), (xxii) our expected SCB and global systemically

important bank (G-SIB) surcharge, (xxiii) legal proceedings,

governmental investigations or other contingencies, (xxiv)

the asset recovery guarantee and our remediation activities

related to our 1Malaysia Development Berhad (1MDB)

settlements, (xxv) the replacement of IBORs and our

transition to alternative risk-free reference rates, (xxvi) the

impact of the coronavirus (COVID-19) pandemic on our

business, results, financial position and liquidity, (xxvii) the

effectiveness of our management of our human capital,

including our diversity goals, (xxviii) our sustainability and

carbon neutrality targets and goals, (xxix) future inflation

and (xxx) the impact of Russia’s invasion of Ukraine and

related sanctions and other developments on our business,

results and financial position.

Executive Overview

We generated net earnings of $11.26 billion for 2022,

compared with $21.64 billion for 2021. Diluted earnings per

common share (EPS) was $30.06 for 2022, compared with

$59.45 for 2021. Return on average common shareholders’

equity (ROE) was 10.2% for 2022, compared with 23.0% for

2021. Book value per common share was $303.55 as of

December 2022, 6.7% higher compared with December 2021.

Net revenues were $47.37 billion for 2022, 20% lower than a

strong 2021, reflecting significantly lower net revenues in

Asset & Wealth Management and lower net revenues in

Global Banking & Markets, partially offset by significantly

higher net revenues in Platform Solutions. Net revenues in

Asset & Wealth Management primarily reflected significantly

lower net revenues in Equity investments and Debt

investments. Net revenues in Global Banking & Markets

primarily reflected significantly lower Investment banking

fees compared with a strong prior year, partially offset by

significantly higher net revenues in Fixed Income, Currency,

and Commodities (FICC). Net revenues in Platform Solutions

were significantly higher, primarily reflecting significantly

higher net revenues in Consumer platforms.

Provision for credit losses was $2.72 billion for 2022,

compared with $357 million for 2021. Provisions for 2022

primarily reflected growth in the credit card portfolio, the

impact of macroeconomic and geopolitical concerns and net

charge-offs. Provisions for 2021 reflected growth in the credit

card and wholesale portfolios, largely offset by reserve

reductions as the broader economic environment continued

to improve following the initial impact of the COVID-19

pandemic.

Operating expenses were $31.16 billion for 2022, 2% lower

than 2021, primarily due to lower compensation and benefits

expenses (reflecting a decline in operating performance

compared with a strong prior year). This decrease was

partially offset by higher non-compensation expenses,

reflecting the inclusion of NN Investment Partners (NNIP)

and GreenSky, Inc. (GreenSky) and increases in transaction

based expenses and technology expenses. Our efficiency ratio

(total operating expenses divided by total net revenues) was

65.8% for 2022, compared with 53.8% for 2021.

During 2022, we returned a total of $6.70 billion to

shareholders, including common stock repurchases of $3.50

billion and common stock dividends of $3.20 billion. As of

December 2022, our CET1 capital ratio was 15.1% under the

Standardized Capital Rules and 14.4% under the Advanced

Capital Rules. See Note 20 to the consolidated financial

statements for further information about our capital ratios.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis

Goldman Sachs 2022 Form 10-K

Business Environment

In 2022, the global economy was impacted by persistent

broad macroeconomic and geopolitical concerns, including

Russia’s invasion of Ukraine and the ongoing war, and

inflationary and labor market pressures. Governments

around the world responded to Russia’s invasion of Ukraine

by imposing economic sanctions, and global central banks

sought to address inflation by increasing policy interest rates

several times over the course of the year. These factors

contributed to increased market volatility during the year, as

well as a decrease in global equity and bond prices and wider

corporate credit spreads compared with the end of 2021.

The economic outlook remains uncertain, reflecting concerns

about the continuation or escalation of the war between

Russia and Ukraine and other geopolitical risks, inflation,

and supply chain complications. See “Results of Operations

— Segment Assets and Operating Results — Segment

Operating Results” for further information about the

operating environment for each of our business segments.

Critical Accounting Policies

Fair Value

Fair Value Hierarchy. Trading assets and liabilities, certain

investments and loans, and certain other financial assets and

liabilities, are included in our consolidated balance sheets at

fair value (i.e., marked-to-market), with related gains or

losses generally recognized in our consolidated statements of

earnings. The use of fair value to measure financial

instruments is fundamental to our risk management practices

and is our most critical accounting policy.

The fair value of a financial instrument is the amount that

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

liability in an orderly transaction between market

participants at the measurement date. We measure certain

financial assets and liabilities as a portfolio (i.e., based on its

net exposure to market and/or credit risks). In determining

fair value, the hierarchy under U.S. generally accepted

accounting principles (U.S. GAAP) gives (i) the highest

priority to unadjusted quoted prices in active markets for

identical, unrestricted assets or liabilities (level 1 inputs), (ii)

the next priority to inputs other than level 1 inputs that are

observable, either directly or indirectly (level 2 inputs), and

(iii) the lowest priority to inputs that cannot be observed in

market activity (level 3 inputs). In evaluating the significance

of a valuation input, we consider, among other factors, a

portfolio’s net risk exposure to that input. Assets and

liabilities are classified in their entirety based on the lowest

level of input that is significant to their fair value

measurement.

The fair values for substantially all of our financial assets and

liabilities are based on observable prices and inputs and are

classified in levels 1 and 2 of the fair value hierarchy. Certain

level 2 and level 3 financial assets and liabilities may require

appropriate valuation adjustments that a market participant

would require to arrive at fair value for factors, such as

counterparty and our credit quality, funding risk, transfer

restrictions, liquidity and bid/offer spreads.

Instruments classified in level 3 of the fair value hierarchy are

those which require one or more significant inputs that are

not observable. Level 3 financial assets represented 1.8% as

of December 2022 and 1.6% as of December 2021 of our total

assets. See Notes 4 and 5 to the consolidated financial

statements for further information about level 3 financial

assets, including changes in level 3 financial assets and related

fair value measurements. Absent evidence to the contrary,

instruments classified in level 3 of the fair value hierarchy are

initially valued at transaction price, which is considered to be

the best initial estimate of fair value. Subsequent to the

transaction date, we use other methodologies to determine

fair value, which vary based on the type of instrument.

Estimating the fair value of level 3 financial instruments

requires judgments to be made. These judgments include:

• Determining the appropriate valuation methodology and/

or model for each type of level 3 financial instrument;

• Determining model inputs based on an evaluation of all

relevant empirical market data, including prices evidenced

by market transactions, interest rates, credit spreads,

volatilities and correlations; and

• Determining appropriate valuation adjustments, including

those related to illiquidity or counterparty credit quality.

Regardless of the methodology, valuation inputs and

assumptions are only changed when corroborated by

substantive evidence.

Controls Over Valuation of Financial Instruments.

Market makers and investment professionals in our revenue-

producing units are responsible for pricing our financial

instruments. Our control infrastructure is independent of the

revenue-producing units and is fundamental to ensuring that

all of our financial instruments are appropriately valued at

market-clearing levels. In the event that there is a difference

of opinion in situations where estimating the fair value of

financial instruments requires judgment (e.g., calibration to

market comparables or trade comparison, as described

below), the final valuation decision is made by senior

managers in independent risk oversight and control

functions. This independent price verification is critical to

ensuring that our financial instruments are properly valued.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis

Goldman Sachs 2022 Form 10-K 59

Price Verification. All financial instruments at fair value

classified in levels 1, 2 and 3 of the fair value hierarchy are

subject to our independent price verification process. The

objective of price verification is to have an informed and

independent opinion with regard to the valuation of financial

instruments under review. Instruments that have one or more

significant inputs which cannot be corroborated by external

market data are classified in level 3 of the fair value

hierarchy. Price verification strategies utilized by our

independent risk oversight and control functions include:

• Trade Comparison. Analysis of trade data (both internal

and external, where available) is used to determine the

most relevant pricing inputs and valuations.

• External Price Comparison. Valuations and prices are

compared to pricing data obtained from third parties (e.g.,

brokers or dealers, S&P Global Services, Bloomberg, ICE

Data Services, Pricing Direct, TRACE). Data obtained

from various sources is compared to ensure consistency

and validity. When broker or dealer quotations or third-

party pricing vendors are used for valuation or price

verification, greater priority is generally given to executable

quotations.

• Calibration to Market Comparables. Market-based

transactions are used to corroborate the valuation of

positions with similar characteristics, risks and

components.

• Relative Value Analyses. Market-based transactions are

analyzed to determine the similarity, measured in terms of

risk, liquidity and return, of one instrument relative to

another or, for a given instrument, of one maturity relative

to another.

• Collateral Analyses. Margin calls on derivatives are

analyzed to determine implied values, which are used to

corroborate our valuations.

• Execution of Trades. Where appropriate, market-making

desks are instructed to execute trades in order to provide

evidence of market-clearing levels.

• Backtesting. Valuations are corroborated by comparison

to values realized upon sales.

See Note 4 to the consolidated financial statements for

further information about fair value measurements.

Review of Net Revenues. Independent risk oversight and

control functions ensure adherence to our pricing policy

through a combination of daily procedures, including the

explanation and attribution of net revenues based on the

underlying factors. Through this process, we independently

validate net revenues, identify and resolve potential fair value

or trade booking issues on a timely basis and seek to ensure

that risks are being properly categorized and quantified.

Review of Valuation Models. Our independent model risk

management group (Model Risk), consisting of quantitative

professionals who are separate from model developers,

performs an independent model review and validation

process of our valuation models. New or changed models are

reviewed and approved prior to implementation. Models are

reviewed annually to assess the impact of any changes in the

product or market and any market developments in pricing

theories. See “Risk Management — Model Risk

Management” for further information about the review and

validation of our valuation models.

Allowance for Credit Losses

We estimate and record an allowance for credit losses related

to our loans held for investment that are accounted for at

amortized cost. To determine the allowance for credit losses,

we classify our loans accounted for at amortized cost into

wholesale and consumer portfolios. These portfolios

represent the level at which we have developed and

documented our methodology to determine the allowance for

credit losses. The allowance for credit losses is measured on a

collective basis for loans that exhibit similar risk

characteristics using a modeled approach and on an asset-

specific basis for loans that do not share similar risk

characteristics.

The allowance for credit losses takes into account the

weighted average of a range of forecasts of future economic

conditions over the expected life of the loans and lending

commitments. The expected life of each loan or lending

commitment is determined based on the contractual term

adjusted for extension options or demand features, or is

modeled in the case of revolving credit card loans. The

forecasts include baseline, favorable and adverse economic

scenarios over a three-year period. For loans with expected

lives beyond three years, the model reverts to historical loss

information based on a non-linear modeled approach. We

apply judgment in weighting individual scenarios each

quarter based on a variety of factors, including our internally

derived economic outlook, market consensus, recent

macroeconomic conditions and industry trends. The

forecasted economic scenarios consider a number of risk

factors relevant to the wholesale and consumer portfolios.

Risk factors for wholesale loans include internal credit

ratings, industry default and loss data, expected life,

macroeconomic indicators (e.g., unemployment rates and

GDP), the borrower’s capacity to meet its financial

obligations, the borrower’s country of risk and industry, loan

seniority and collateral type. In addition, for loans backed by

real estate, risk factors include loan-to-value ratio, debt

service ratio and home price index. Risk factors for

installment and credit card loans include Fair Isaac

Corporation (FICO) credit scores, delinquency status, loan

vintage and macroeconomic indicators.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis

Goldman Sachs 2022 Form 10-K

The allowance for credit losses also includes qualitative

components which allow management to reflect the uncertain

nature of economic forecasting, capture uncertainty

regarding model inputs, and account for model imprecision

and concentration risk.

Our estimate of credit losses entails judgment about

collectability at the reporting dates, and there are

uncertainties inherent in those judgments. The allowance for

credit losses is subject to a governance process that involves

review and approval by senior management within our

independent risk oversight and control functions. Personnel

within our independent risk oversight and control functions

are responsible for forecasting the economic variables that

underlie the economic scenarios that are used in the modeling

of expected credit losses. While we use the best information

available to determine this estimate, future adjustments to the

allowance may be necessary based on, among other things,

changes in the economic environment or variances between

actual results and the original assumptions used. Loans are

charged off against the allowance for loan losses when

deemed to be uncollectible.

We also record an allowance for credit losses on lending

commitments which are held for investment that are

accounted for at amortized cost. Such allowance is

determined using the same methodology as the allowance for

loan losses, while also taking into consideration the

probability of drawdowns or funding, and whether such

commitments are cancellable by us.

To estimate the potential impact of an adverse

macroeconomic environment on our allowance for credit

losses, we, among other things, compared the expected credit

losses under the weighted average forecast used in the

calculation of allowance for credit losses as of December

2022 (which was weighted towards the baseline and adverse

economic scenarios) to the expected credit losses under a

100% weighted adverse economic scenario. The adverse

economic scenario of the forecast model reflects a global

recession in 2023 and a more aggressive tightening of

monetary policy by central banks, resulting in an economic

contraction and rising unemployment rates. A 100%

weighting to the adverse economic scenario would have

resulted in an approximate $1.0 billion increase in our

allowance for credit losses as of December 2022. This

hypothetical increase does not take into consideration any

potential adjustments to qualitative reserves. The forecasts of

macroeconomic conditions are inherently uncertain and do

not take into account any other offsetting or correlated

effects. The actual credit loss in an adverse macroeconomic

environment may differ significantly from this estimate. See

Note 9 to the consolidated financial statements for further

information about the allowance for credit losses.

Use of Estimates

U.S. GAAP requires us to make certain estimates and

assumptions. In addition to the estimates we make in

connection with fair value measurements and the allowance

for credit losses on loans and lending commitments held for

investment and accounted for at amortized cost, the use of

estimates and assumptions is also important in determining

the accounting for goodwill and identifiable intangible assets,

provisions for losses that may arise from litigation and

regulatory proceedings (including governmental

investigations), and accounting for income taxes.

Goodwill is assessed for impairment annually in the fourth

quarter or more frequently if events occur or circumstances

change that indicate an impairment may exist. When

assessing goodwill for impairment, first, a qualitative

assessment can be made to determine whether it is more

likely than not that the estimated fair value of a reporting

unit is less than its carrying value. If the results of the

qualitative assessment are not conclusive, a quantitative

goodwill test is performed. Alternatively, a quantitative

goodwill test can be performed without performing a

qualitative assessment. Estimating the fair value of our

reporting units requires judgment. Critical inputs to the fair

value estimates include projected earnings and allocated

equity. There is inherent uncertainty in the projected

earnings. The carrying value of each reporting unit reflects an

allocation of total shareholders’ equity and represents the

estimated amount of total shareholders’ equity required to

support the activities of the reporting unit under currently

applicable regulatory capital requirements. The estimated

fair value of our Consumer platforms reporting unit, which

represents approximately 7.5% of our goodwill, was not

substantially in excess of its carrying value. This reporting

unit has been adversely impacted by the recent operating

environment generally characterized by broad

macroeconomic concerns. We will continue to closely

monitor it to determine whether an impairment is required in

the future. As of December 2022, the goodwill related to the

Consumer platforms reporting unit was $482 million. See

Note 12 to the consolidated financial statements for further

information about goodwill. If we experience a prolonged or

severe period of weakness in the business environment,

financial markets, the performance of one or more of our

reporting units or our common stock price, or additional

increases in capital requirements, our goodwill could be

impaired in the future.

Identifiable intangible assets are tested for impairment when

events or changes in circumstances suggest that an asset’s or

asset group’s carrying value may not be fully recoverable.

Judgment is required to evaluate whether indications of

potential impairment have occurred, and to test identifiable

intangible assets for impairment, if required. An impairment

is recognized if the estimated undiscounted cash flows

relating to the asset or asset group is less than the

corresponding carrying value. See Note 12 to the

consolidated financial statements for further information

about identifiable intangible assets.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis

Goldman Sachs 2022 Form 10-K 61

We also estimate and provide for potential losses that may

arise out of litigation and regulatory proceedings to the

extent that such losses are probable and can be reasonably

estimated. In addition, we estimate the upper end of the

range of reasonably possible aggregate loss in excess of the

related reserves for litigation and regulatory proceedings

where we believe the risk of loss is more than slight. See

Notes 18 and 27 to the consolidated financial statements for

information about certain judicial, litigation and regulatory

proceedings. Significant judgment is required in making these

estimates and our final liabilities may ultimately be

materially different. Our total estimated liability in respect of

litigation and regulatory proceedings is determined on a case-

by-case basis and represents an estimate of probable losses

after considering, among other factors, the progress of each

case, proceeding or investigation, our experience and the

experience of others in similar cases, proceedings or

investigations, and the opinions and views of legal counsel.

In accounting for income taxes, we recognize tax positions in

the financial statements only when it is more likely than not

that the position will be sustained on examination by the

relevant taxing authority based on the technical merits of the

position. As of December 2022, our net liability for

unrecognized tax benefits was $1.22 billion. We use estimates

to recognize current and deferred income taxes in the U.S.

federal, state and local and non-U.S. jurisdictions in which

we operate. The income tax laws in these jurisdictions are

complex and can be subject to different interpretations

between taxpayers and taxing authorities. Disputes may arise

over these interpretations and can be settled by audit,

administrative appeals or judicial proceedings. Our

interpretations are reevaluated quarterly based on guidance

currently available, tax examination experience and the

opinions of legal counsel, among other factors. We recognize

deferred taxes based on the amount that will more likely than

not be realized in the future based on enacted income tax

laws. As of December 2022, we had $8.93 billion of deferred

tax assets with a related valuation allowance of $1.57 billion.

Our estimate for deferred taxes includes estimates for future

taxable earnings, including the level and character of those

earnings, and various tax planning strategies. See Note 24 to

the consolidated financial statements for further information

about income taxes.

Recent Accounting Developments

See Note 3 to the consolidated financial statements for

information about Recent Accounting Developments.

Results of Operations

The composition of our net revenues has varied over time as

financial markets and the scope of our operations have

changed. The composition of net revenues can also vary over

the shorter term due to fluctuations in U.S. and global

economic and market conditions. See “Risk Factors” in Part

I, Item 1A of this Form 10-K for further information about

the impact of economic and market conditions on our results

of operations.

Financial Overview

The table below presents an overview of our financial results

and selected financial ratios.

Year Ended December

$ in millions, except per share amounts

2022 2021 2020

Net revenues $ 47,365 $ 59,339 $ 44,560

Pre-tax earnings $ 13,486 $ 27,044 $ 12,479

Net earnings $ 11,261 $ 21,635 $ 9,459

Net earnings to common $ 10,764 $ 21,151 $ 8,915

Diluted EPS $ 30.06 $ 59.45 $ 24.74

ROE 10.2% 23.0% 11.1%

ROTE 11.0% 24.3% 11.8%

Net earnings to average assets 0.7% 1.6% 0.8%

Return on shareholders’ equity 9.7% 21.3% 10.3%

Average equity to average assets 7.5% 7.4% 8.2%

Dividend payout ratio 29.9% 10.9% 20.2%

In the table above:

• Net earnings to common represents net earnings applicable

to common shareholders, which is calculated as net

earnings less preferred stock dividends.

• ROE is calculated by dividing net earnings to common by

average monthly common shareholders’ equity. Tangible

common shareholders’ equity is calculated as total

shareholders’ equity less preferred stock, goodwill and

identifiable intangible assets.

• Return on average tangible common shareholders' equity

(ROTE) is calculated by dividing net earnings to common

by average monthly tangible common shareholders’ equity.

We believe that tangible common shareholders’ equity is

meaningful because it is a measure that we and investors

use to assess capital adequacy and that ROTE is

meaningful because it measures the performance of

businesses consistently, whether they were acquired or

developed internally. Tangible common shareholders’

equity and ROTE are non-GAAP measures and may not be

comparable to similar non-GAAP measures used by other

companies.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis

Goldman Sachs 2022 Form 10-K

The table below presents our average equity and the

reconciliation of average common shareholders’ equity to

average tangible common shareholders’ equity.

Average for the Year Ended December

$ in millions 2022 2021 2020

Total shareholders’ equity $ 115,990 $ 101,705 $ 91,779

Preferred stock (10,703) (9,876) (11,203)

Common shareholders’ equity 105,287 91,829 80,576

Goodwill (5,726) (4,327) (4,238)

Identifiable intangible assets (1,583) (536) (617)

Tangible common shareholders’ equity

$ 97,978 $ 86,966 $ 75,721

• Net earnings to average assets is calculated by dividing net

earnings by average total assets.

• Return on shareholders’ equity is calculated by dividing net

earnings by average monthly shareholders’ equity.

• Average equity to average assets is calculated by dividing

average total shareholders’ equity by average total assets.

• Dividend payout ratio is calculated by dividing dividends

declared per common share by diluted EPS.

Net Revenues

The table below presents our net revenues by line item.

Year Ended December

$ in millions 2022 2021 2020

Investment banking $ 7,360 $ 14,136 $ 9,100

Investment management 9,005 8,171 6,986

Commissions and fees 4,034 3,590 3,539

Market making 18,634 15,357 15,428

Other principal transactions 654 11,615 4,756

Total non-interest revenues 39,687 52,869 39,809

Interest income 29,024 12,120 13,689

Interest expense 21,346 5,650 8,938

Net interest income 7,678 6,470 4,751

Total net revenues $ 47,365 $ 59,339 $ 44,560

In the table above:

• Investment banking consists of revenues (excluding net

interest) from financial advisory and underwriting

assignments. These activities are included in Global

Banking & Markets.

• Investment management consists of revenues (excluding net

interest) from providing asset management and wealth

advisory services across all major asset classes to a diverse

set of clients. These activities are included in Asset &

Wealth Management.

• Commissions and fees consists of revenues from executing

and clearing client transactions on major stock, options

and futures exchanges worldwide, as well as over-the-

counter (OTC) transactions. Substantially all of these

activities are included in Global Banking & Markets.

• Market making consists of revenues (excluding net interest)

from client execution activities related to making markets

in interest rate products, credit products, mortgages,

currencies, commodities and equity products. These

activities are included in Global Banking & Markets.

• Other principal transactions consists of revenues

(excluding net interest) from our equity investing activities,

including revenues related to our consolidated investments

(included in Asset & Wealth Management), and debt

investing and lending activities (included across our three

segments).

Operating Environment. During 2022, the operating

environment was characterized by broad macroeconomic and

geopolitical concerns and market volatility, which

contributed to a decrease in global equity and bond prices

and wider corporate credit spreads compared with the end of

2021. These factors contributed to solid market-making

activity levels and a decline in industry-wide investment

banking activity, particularly for underwriting. In the U.S.,

the rate of unemployment remained low and consumer

spending increased slightly compared with 2021.

If concerns about the economic outlook grow, including

those about the continuation or escalation of geopolitical

concerns, inflation and supply chain complications, and the

persistence of COVID-19-related effects, it may lead to a

continued decline in asset prices, or a decline in market-

making activity levels, or a continued decline in investment

banking activity levels, and net revenues and provision for

credit losses would likely be negatively impacted. See

“Segment Assets and Operating Results — Segment

Operating Results” for information about the operating

environment and material trends and uncertainties that may

impact our results of operations.

2022 versus 2021

Net revenues in the consolidated statements of earnings were

$47.37 billion for 2022, 20% lower than a strong 2021,

primarily reflecting significantly lower other principal

transactions revenues and investment banking revenues,

partially offset by significantly higher market making

revenues.

Non-Interest Revenues. Investment banking revenues in

the consolidated statements of earnings were $7.36 billion for

2022, 48% lower than a strong 2021, due to significantly

lower revenues in both equity and debt underwriting,

reflecting a significant decline in industry-wide volumes, and

lower revenues in advisory, reflecting a decline in industry-

wide completed mergers and acquisitions transactions from

elevated activity levels in the prior year.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis

Goldman Sachs 2022 Form 10-K 63

Investment management revenues in the consolidated

statements of earnings were $9.01 billion for 2022, 10%

higher than 2021, due to higher management and other fees,

reflecting the inclusion of NNIP and a reduction in fee

waivers on money market funds.

Commissions and fees in the consolidated statements of

earnings were $4.03 billion for 2022, 12% higher than 2021,

primarily due to higher commissions and fees in Equities,

reflecting generally higher volumes.

Market making revenues in the consolidated statements of

earnings were $18.63 billion for 2022, 21% higher than 2021,

primarily reflecting significantly higher revenues in interest

rate products, currencies and commodities, partially offset by

lower revenues in equity products.

Other principal transactions revenues in the consolidated

statements of earnings were $654 million for 2022, compared

with $11.62 billion for 2021, primarily reflecting significantly

lower net gains from investments in private equities,

significant mark-to-market net losses from investments in

public equities and net mark-downs in debt investments

compared with net mark-ups in 2021.

Net Interest Income. Net interest income in the

consolidated statements of earnings was $7.68 billion for

2022, 19% higher than 2021, reflecting an increase in interest

income primarily related to collateralized agreements, other

interest-earning assets and deposits with banks, each

reflecting the impact of higher average interest rates, and

loans, reflecting the impact of higher average balances and

higher average interest rates. The increase in interest income

was partially offset by an increase in interest expense

primarily related to other interest-bearing liabilities,

collateralized financings, and borrowings, each reflecting the

impact of higher average interest rates, and deposits,

reflecting the impact of higher average interest rates and

higher average balances. See “Statistical Disclosures –

Distribution of Assets, Liabilities and Shareholders’ Equity”

for further information about our sources of net interest

income.

2021 versus 2020

Net revenues in the consolidated statements of earnings were

$59.34 billion for 2021, 33% higher than 2020, reflecting

significantly higher other principal transactions revenues,

investment banking revenues and net interest income, and

higher investment management revenues.

Non-Interest Revenues. Investment banking revenues in

the consolidated statements of earnings were $14.14 billion

for 2021, 55% higher than 2020, due to significantly higher

revenues in advisory, reflecting a significant increase in

completed mergers and acquisitions volumes, in equity

underwriting, primarily driven by strong industry-wide initial

public offerings activity, and in debt underwriting, primarily

reflecting elevated industry-wide leveraged finance activity.

Investment management revenues in the consolidated

statements of earnings were $8.17 billion for 2021, 17%

higher than 2020, primarily due to higher management and

other fees, reflecting the impact of higher average assets

under supervision, partially offset by higher fee waivers on

money market funds. In addition, incentive fees were

significantly higher, primarily driven by harvesting.

Commissions and fees in the consolidated statements of

earnings were $3.59 billion for 2021, essentially unchanged

compared with 2020.

Market making revenues in the consolidated statements of

earnings were $15.36 billion for 2021, essentially unchanged

compared with 2020, as significantly lower revenues in

interest rate products and credit products were largely offset

by significantly higher revenues in equity products (primarily

in derivatives) and commodities, and improved results in

mortgages.

Other principal transactions revenues in the consolidated

statements of earnings were $11.62 billion for 2021,

compared with $4.76 billion for 2020, primarily reflecting

significantly higher net gains from investments in private

equities and in debt instruments, partially offset by net losses

from investments in public equities compared with significant

net gains in 2020.

Net Interest Income. Net interest income in the

consolidated statements of earnings was $6.47 billion for

2021, 36% higher than 2020, reflecting a decrease in interest

expense, partially offset by a decrease in interest income. The

decrease in interest expense is primarily related to other

interest-bearing liabilities, deposits and long-term

borrowings, each reflecting the impact of lower interest rates.

The decrease in interest income primarily related to

collateralized agreements and trading assets, both reflecting

the impact of lower interest rates, partially offset by the

impact of higher average balances for loans. See

“Supplemental Financial Information — Statistical

Disclosures — Distribution of Assets, Liabilities and

Shareholders’ Equity” for further information about our

sources of net interest income.

Provision for Credit Losses

Provision for credit losses consists of provision for credit

losses on loans and lending commitments held for investment

and accounted for at amortized cost. See Note 9 to the

consolidated financial statements for further information

about the provision for credit losses.

The table below presents our provision for credit losses.

Year Ended December

$ in millions 2022 2021 2020

Provision for credit losses $ 2,715 $ 357 $ 3,098

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis

Goldman Sachs 2022 Form 10-K

2022 versus 2021. Provision for credit losses in the

consolidated statements of earnings was $2.72 billion for

2022, compared with $357 million for 2021. Provisions for

2022 primarily reflected growth in the credit card portfolio,

the impact of macroeconomic and geopolitical concerns and

net charge-offs. Provisions for 2021 reflected portfolio

growth in the credit card and wholesale portfolios, largely

offset by reserve reductions as the broader economic

environment continued to improve following the initial

impact of the COVID-19 pandemic.

2021 versus 2020. Provision for credit losses in the

consolidated statements of earnings was $357 million for

2021, compared with $3.10 billion for 2020. Provisions for

2021 reflected portfolio growth (primarily in credit cards,

including approximately $185 million of provisions related to

the commitment to acquire the General Motors co-branded

credit card portfolio), largely offset by reserve reductions on

wholesale and consumer loans reflecting continued

improvement in the broader economic environment. This

followed challenging conditions in the prior year as a result

of the COVID-19 pandemic, which contributed to significant

provisions in 2020.

Operating Expenses

Our operating expenses are primarily influenced by

compensation, headcount and levels of business activity.

Compensation and benefits includes salaries, year-end

discretionary compensation, amortization of equity awards

and other items such as benefits. Discretionary compensation

is significantly impacted by, among other factors, the level of

net revenues, net of provision for credit losses, overall

financial performance, prevailing labor markets, business

mix, the structure of our share-based compensation programs

and the external environment.

The table below presents our operating expenses by line item

and headcount.

Year Ended December

$ in millions 2022 2021 2020

Compensation and benefits $ 15,148 $ 17,719 $ 13,309

Transaction based 5,312 4,710 4,141

Market development 812 553 401

Communications and technology 1,808 1,573 1,347

Depreciation and amortization 2,455 2,015 1,902

Occupancy 1,026 981 960

Professional fees 1,887 1,648 1,306

Other expenses 2,716 2,739 5,617

Total operating expenses $ 31,164 $ 31,938 $ 28,983

Headcount at period-end 48,500 43,900 40,500

2022 versus 2021. Operating expenses in the consolidated

statements of earnings were $31.16 billion for 2022, 2% lower

than 2021. Our efficiency ratio was 65.8% for 2022,

compared with our medium-term target efficiency ratio of

approximately 60%. Our efficiency ratio was 53.8% for

2021.

The decrease in operating expenses compared with 2021 was

primarily due to lower compensation and benefits expenses

(reflecting a decline in operating performance compared with

a strong prior year). This decrease was partially offset by

higher non-compensation expenses, reflecting the inclusion of

NNIP and GreenSky and increases in transaction based

expenses and technology expenses. While certain expenses

(e.g., compensation and benefits, occupancy and market

development) were impacted by inflationary pressures, the

overall impact of higher inflation was not material to our

operating expenses for 2022.

Net provisions for litigation and regulatory proceedings were

$576 million for 2022 compared with $534 million for 2021.

Headcount increased 10% during 2022, primarily reflecting

investments in growth initiatives and the acquisitions of

NNIP and GreenSky.

2021 versus 2020. Operating expenses in the consolidated

statements of earnings were $31.94 billion for 2021, 10%

higher than 2020. Our efficiency ratio was 53.8% for 2021,

compared with 65.0% for 2020. In 2020, net provisions for

litigation and regulatory proceedings increased our efficiency

ratio by 7.6 percentage points.

The increase in operating expenses compared with 2020

primarily reflected significantly higher compensation and

benefits expenses (reflecting strong performance). In

addition, technology expenses and professional fees were

significantly higher and transaction based expenses were

higher. These increases were partially offset by significantly

lower net provisions for litigation and regulatory proceedings

and lower expenses related to consolidated investments

(including impairments).

Net provisions for litigation and regulatory proceedings were

$534 million for 2021 compared with $3.42 billion for 2020.

Charitable contributions to Goldman Sachs Gives were

approximately $250 million for 2021.

Headcount increased 8% during 2021, reflecting investments

in growth initiatives and an increase in technology

professionals.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis

Goldman Sachs 2022 Form 10-K 65

Provision for Taxes

The effective income tax rate for 2022 was 16.5%, down

from the full year income tax rate of 20.0% for 2021,

primarily due to an increase in the impact of permanent tax

benefits, partially offset by changes in the geographic mix of

earnings in 2022 compared with 2021.

The U.K. Finance Act 2021 increased the corporate income

tax rate by six percent and the Finance Act 2022 decreased

the U.K. bank surcharge tax rate by five percent effective

from April 1, 2023. As a result, beginning April 1, 2023, the

U.K. tax rate for our U.K. regulated broker-dealer and bank

subsidiaries and branches, including Goldman Sachs

International (GSI) and Goldman Sachs International Bank

(GSIB), will increase by one percent and the U.K. tax rate for

all other U.K. subsidiaries and branches will increase by six

percent. During 2022, following Royal Assent of Finance Act

2022, certain U.K. deferred tax assets and liabilities were

remeasured and a net reduction in deferred tax assets of

approximately $50 million was recognized.

In August 2022, the Inflation Reduction Act of 2022 was

signed into law. The Inflation Reduction Act of 2022 includes

income tax incentives to encourage investments in clean

energy and a new 15% corporate alternative minimum tax

(CAMT). The CAMT applies to corporations with average

annual profits over $1 billion and is calculated on their

financial statement income, with certain adjustments, for

years beginning after December 31, 2022. The legislation had

no impact on our 2022 annual effective tax rate and based on

our current understanding of the CAMT, is not expected to

have a material impact on our 2023 annual effective tax rate.

Segment Assets and Operating Results

Segment Assets. The table below presents assets by

segment.

As of December

$ in millions 2022 2021

Global Banking & Markets $ 1,169,539 $ 1,201,996

Asset & Wealth Management 214,970 221,150

Platform Solutions

57,290 40,842

Total $ 1,441,799 $ 1,463,988

The allocation process for segment assets is based on the

activities of these segments. The allocation of assets includes

allocation of GCLA (which consists of unencumbered, highly

liquid securities and cash), which is generally included within

cash and cash equivalents, collateralized agreements and

trading assets on our balance sheet. Due to the integrated

nature of these segments, estimates and judgments are made

in allocating these assets. See “Risk Management —

Liquidity Risk Management” for further information about

our GCLA.

Segment Operating Results. The table below presents our

segment operating results.

Year Ended December

$ in millions 2022 2021 2020

Global Banking & Markets

Net revenues $ 32,487 $ 36,734 $ 30,469

Provision for credit losses 468 (171) 1,216

Operating expenses 17,851 19,542 18,884

Pre-tax earnings $ 14,168 $ 17,363 $ 10,369

Net earnings to common $ 11,458 $ 13,535 $ 7,428

Average common equity $ 69,951 $ 60,064 $ 54,749

Return on average common equity

16.4% 22.5% 13.6%

Asset & Wealth Management

Net revenues $ 13,376 $ 21,965 $ 13,757

Provision for credit losses 519 (169) 1,395

Operating expenses 11,550 11,406 9,469

Pre-tax earnings $ 1,307 $ 10,728 $ 2,893

Net earnings to common $ 979 $ 8,459 $ 2,083

Average common equity $ 31,762 $ 29,988 $ 24,963

Return on average common equity

3.1% 28.2% 8.3%

Platform Solutions

Net revenues

$ 1,502

$ 640

$ 334

Provision for credit losses

1,728

697

487

Operating expenses

1,763

990

630

Pre-tax earnings/(loss)

$ (1,989)

$ (1,047)

$ (783)

Net earnings/(loss) to common

$ (1,673)

$ (843)

$ (596)

Average common equity

$ 3,574

$ 1,777

$ 864

Return on average common equity

(46.8) %

(47.4) %

(69.0) %

Total

Net revenues $ 47,365 $ 59,339 $ 44,560

Provision for credit losses 2,715 357 3,098

Operating expenses 31,164 31,938 28,983

Pre-tax earnings $ 13,486 $ 27,044 $ 12,479

Net earnings to common $ 10,764 $ 21,151 $ 8,915

Average common equity $ 105,287 $ 91,829 $ 80,576

Return on average common equity

10.2% 23.0% 11.1%

Net revenues in our segments include allocations of interest

income and expense to specific positions in relation to the

cash generated by, or funding requirements of, such

positions. See Note 25 to the consolidated financial

statements for further information about our business

segments.

The allocation of common shareholders’ equity and preferred

stock dividends to each segment is based on the estimated

amount of equity required to support the activities of the

segment under relevant regulatory capital requirements. Net

earnings for each segment is calculated by applying the

firmwide tax rate to each segment’s pre-tax earnings.

Compensation and benefits expenses within our segments

reflect, among other factors, our overall performance, as well

as the performance of individual businesses. Consequently,

pre-tax margins in one segment of our business may be

significantly affected by the performance of our other

business segments. A description of segment operating results

follows.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis

Goldman Sachs 2022 Form 10-K

Global Banking & Markets

Global Banking & Markets generates revenues from the

following:

Investment banking fees. We provide advisory and

underwriting services and help companies raise capital to

strengthen and grow their businesses. Investment banking

fees includes the following:

• Advisory. Includes strategic advisory assignments with

respect to mergers and acquisitions, divestitures, corporate

defense activities, restructurings and spin-offs.

• Underwriting. Includes public offerings and private

placements of a wide range of securities and other financial

instruments, including local and cross-border transactions

and acquisition financing.

FICC. FICC generates revenues from intermediation and

financing activities.

• FICC intermediation. Includes client execution activities

related to making markets in both cash and derivative

instruments, as detailed below.

Interest Rate Products. Government bonds (including

inflation-linked securities) across maturities, other

government-backed securities, and interest rate swaps,

options and other derivatives.

Credit Products. Investment-grade and high-yield

corporate securities, credit derivatives, exchange-traded

funds (ETFs), bank and bridge loans, municipal securities,

distressed debt and trade claims.

Mortgages. Commercial mortgage-related securities,

loans and derivatives, residential mortgage-related

securities, loans and derivatives (including U.S. government

agency-issued collateralized mortgage obligations and

other securities and loans), and other asset-backed

securities, loans and derivatives.

Currencies. Currency options, spot/forwards and other

derivatives on G-10 currencies and emerging-market

products.

Commodities. Commodity derivatives and, to a lesser

extent, physical commodities, involving crude oil and

petroleum products, natural gas, agricultural, base,

precious and other metals, electricity, including renewable

power, environmental products and other commodity

products.

• FICC financing. Includes secured lending to our clients

through structured credit and asset-backed lending,

including warehouse loans backed by mortgages (including

residential and commercial mortgage loans), corporate

loans and consumer loans (including auto loans and private

student loans). We also provide financing to clients

through securities purchased under agreements to resell

(resale agreements).

Equities. Equities generates revenues from intermediation

and financing activities.

• Equities intermediation. We make markets in equity

securities and equity-related products, including ETFs,

convertible securities, options, futures and OTC derivative

instruments. We also structure and make markets in

derivatives on indices, industry sectors, financial measures

and individual company stocks. Our exchange-based

market-making activities include making markets in stocks

and ETFs, futures and options on major exchanges

worldwide. In addition, we generate commissions and fees

from executing and clearing institutional client transactions

on major stock, options and futures exchanges worldwide,

as well as OTC transactions.

• Equities financing. Includes prime brokerage and other

equities financing activities, including securities lending,

margin lending and swaps. We earn fees by providing

clearing, settlement and custody services globally. We

provide services that principally involve borrowing and

lending securities to cover institutional clients’ short sales

and borrowing securities to cover our short sales and to

make deliveries into the market. In addition, we are an

active participant in broker-to-broker securities lending

and third-party agency lending activities. We provide

financing to our clients for their securities trading activities

through margin loans that are collateralized by securities,

cash or other acceptable collateral and provide securities-

based loans to individuals. In addition, we execute swap

transactions to provide our clients with exposure to

securities and indices.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis

Goldman Sachs 2022 Form 10-K 67

Market-Making Activities

As a market maker, we facilitate transactions in both liquid

and less liquid markets, primarily for institutional clients,

such as corporations, financial institutions, investment funds

and governments, to assist clients in meeting their investment

objectives and in managing their risks. In this role, we seek to

earn the difference between the price at which a market

participant is willing to sell an instrument to us and the price

at which another market participant is willing to buy it from

us, and vice versa (i.e., bid/offer spread). In addition, we

maintain (i) market-making positions, typically for a short

period of time, in response to, or in anticipation of, client

demand, and (ii) positions to actively manage our risk

exposures that arise from these market-making activities

(collectively, inventory). Our inventory is recorded in trading

assets (long positions) or trading liabilities (short positions)

in our consolidated balance sheets.

Our results are influenced by a combination of

interconnected drivers, including (i) client activity levels and

transactional bid/offer spreads (collectively, client activity),

and (ii) changes in the fair value of our inventory and interest

income and interest expense related to the holding, hedging

and funding of our inventory (collectively, market-making

inventory changes). Due to the integrated nature of our

market-making activities, disaggregation of net revenues into

client activity and market-making inventory changes is

judgmental and has inherent complexities and limitations.

The amount and composition of our net revenues vary over

time as these drivers are impacted by multiple interrelated

factors affecting economic and market conditions, including

volatility and liquidity in the market, changes in interest

rates, currency exchange rates, credit spreads, equity prices

and commodity prices, investor confidence, and other

macroeconomic concerns and uncertainties.

In general, assuming all other market-making conditions

remain constant, increases in client activity levels or bid/offer

spreads tend to result in increases in net revenues, and

decreases tend to have the opposite effect. However, changes

in market-making conditions can materially impact client

activity levels and bid/offer spreads, as well as the fair value

of our inventory. For example, a decrease in liquidity in the

market could have the impact of (i) increasing our bid/offer

spread, (ii) decreasing investor confidence and thereby

decreasing client activity levels, and (iii) widening of credit

spreads on our inventory positions.

Other. We lend to corporate clients, including through

relationship lending and acquisition financing. The hedges

related to this lending and financing activity are also reported

as part of Other. Other also includes equity and debt

investing activities related to our Global Banking & Markets

activities.

The table below presents our Global Banking & Markets

assets.

As of December

$ in millions 2022 2021

Cash and cash equivalents $ 167,203 $ 178,359

Collateralized agreements 380,157 359,100

Customer and other receivables 122,037 147,958

Trading assets 272,788 351,920

Investments 103,229 56,228

Loans 107,648 94,597

Other assets 16,477 13,834

Total $ 1,169,539 $ 1,201,996

The table below presents details about our Global Banking &

Markets loans.

As of December

$ in millions 2022 2021

Corporate $ 25,776 $ 22,068

Real estate 33,215 34,986

Securities-based 3,857 3,017

Other collateralized 45,407 33,077

Other 561 2,311

Loans, gross 108,816 95,459

Allowance for loan losses (1,168) (862)

Total loans $ 107,648 $ 94,597

Our average Global Banking & Markets gross loans were

$105.11billion for 2022 and $74.34billion for 2021.

The table below presents our Global Banking & Markets

operating results.

Year Ended December

$ in millions

2022 2021 2020

Advisory $ 4,704 $ 5,654 $ 3,064

Equity underwriting 848 4,985 3,376

Debt underwriting 1,808 3,497 2,660

Investment banking fees 7,360 14,136 9,100

FICC intermediation 11,890 8,714 10,106

FICC financing 2,786 1,897 1,347

FICC 14,676 10,611 11,453

Equities intermediation 6,662 7,707 7,069

Equities financing 4,326 4,015 2,815

Equities 10,988 11,722 9,884

Other (537) 265 32

Net revenues 32,487 36,734 30,469

Provision for credit losses 468 (171) 1,216

Operating expenses 17,851 19,542 18,884

Pre-tax earnings 14,168 17,363 10,369

Provision for taxes 2,338 3,473 2,509

Net earnings 11,830 13,890 7,860

Preferred stock dividends 372 355 432

Net earnings to common $ 11,458 $ 13,535 $ 7,428

Average common equity $ 69,951 $ 60,064 $ 54,749

Return on average common equity 16.4% 22.5% 13.6%

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis

Goldman Sachs 2022 Form 10-K

The table below presents our FICC and Equities net revenues

by line item in the consolidated statements of earnings.

$ in millions FICC Equities

Year Ended December 2022

Market making $ 12,422 $ 6,212

Commissions and fees – 3,791

Other principal transactions 377 41

Net interest income 1,877 944

Total $ 14,676 $ 10,988

Year Ended December 2021

Market making $ 7,690 $ 7,667

Commissions and fees – 3,514

Other principal transactions 362 72

Net interest income 2,559 469

Total $ 10,611 $ 11,722

Year Ended December 2020

Market making $ 8,941 $ 6,487

Commissions and fees – 3,339

Other principal transactions 96 9

Net interest income 2,416 49

Total $ 11,453 $ 9,884

In the table above:

• See “Net Revenues” for information about market making

revenues, commissions and fees, other principal

transactions revenues and net interest income. See Note 25

to the consolidated financial statements for net interest

income by segment.

• The primary driver of net revenues for FICC

intermediation for all periods was client activity.

The table below presents our unaudited quarterly Global

Banking & Markets operating results.

First Second Third Fourth

$ in millions Quarter Quarter Quarter Quarter

2022

Advisory $ 1,127 $ 1,197 $ 972 $ 1,408

Equity underwriting 276 145 244 183

Debt underwriting 741 457 328 282

Investment banking fees 2,144 1,799 1,544 1,873

FICC intermediation 4,099 2,921 2,896 1,974

FICC financing 631 721 721 713

FICC 4,730 3,642 3,617 2,687

Equities intermediation 2,178 1,767 1,608 1,109

Equities financing 1,061 1,177 1,124 964

Equities 3,239 2,944 2,732 2,073

Other (51) (43) (329) (114)

Net revenues 10,062 8,342 7,564 6,519

Provision for credit losses 191 208 63 6

Operating expenses 4,973 4,431 4,224 4,223

Pre-tax earnings $ 4,898 $ 3,703 $ 3,277 $ 2,290

2021

Advisory $ 1,117 $ 1,257 $ 1,649 $ 1,631

Equity underwriting 1,539 1,256 1,167 1,023

Debt underwriting 877 949 724 947

Investment banking fees 3,533 3,462 3,540 3,601

FICC intermediation 3,472 1,922 2,007 1,313

FICC financing 435 395 512 555

FICC 3,907 2,317 2,519 1,868

Equities intermediation 2,620 1,795 1,949 1,343

Equities financing 1,084 887 1,207 837

Equities 3,704 2,682 3,156 2,180

Other 170 239 (85) (59)

Net revenues 11,314 8,700 9,130 7,590

Provision for credit losses (99) (46) (10) (16)

Operating expenses 5,892 5,470 4,090 4,090

Pre-tax earnings $ 5,521 $ 3,276 $ 5,050 $ 3,516

2020

Advisory $ 780 $ 687 $ 506 $ 1,091

Equity underwriting 377 1,050 843 1,106

Debt underwriting 576 988 571 525

Investment banking fees 1,733 2,725 1,920 2,722

FICC intermediation 2,496 3,831 2,232 1,547

FICC financing 435 302 278 332

FICC 2,931 4,133 2,510 1,879

Equities intermediation 1,533 2,217 1,497 1,822

Equities financing 729 900 580 606

Equities 2,262 3,117 2,077 2,428

Other 351 (151) (36) (132)

Net revenues 7,277 9,824 6,471 6,897

Provision for credit losses 564 702 (9) (41)

Operating expenses 4,007 7,777 3,510 3,590

Pre-tax earnings $ 2,706 $ 1,345 $ 2,970 $ 3,348

The table below presents our financial advisory and

underwriting transaction volumes.

Year Ended December

$ in billions

2022 2021 2020

Announced mergers and acquisitions $ 1,237 $ 1,771 $ 904

Completed mergers and acquisitions $ 1,355 $ 1,588 $ 1,037

Equity and equity-related offerings $ 33 $ 140 $ 115

Debt offerings $ 222 $ 341 $ 352

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis

Goldman Sachs 2022 Form 10-K 69

In the table above:

• Volumes are per Dealogic.

• Announced and completed mergers and acquisitions

volumes are based on full credit to each of the advisors in a

transaction. Equity and equity-related and debt offerings

are based on full credit for single book managers and equal

credit for joint book managers. Transaction volumes may

not be indicative of net revenues in a given period. In

addition, transaction volumes for prior periods may vary

from amounts previously reported due to the subsequent

withdrawal or a change in the value of a transaction.

• Equity and equity-related offerings includes Rule 144A and

public common stock offerings, convertible offerings and

rights offerings.

• Debt offerings includes non-convertible preferred stock,

mortgage-backed securities, asset-backed securities and

taxable municipal debt. It also includes publicly registered

and Rule 144A issues and excludes leveraged loans.

Operating Environment. During 2022, Global Banking &

Markets operated in an environment generally characterized

by broad macroeconomic and geopolitical concerns and

market volatility, which negatively affected industry-wide

investment banking activity levels, particularly for

underwriting, but contributed to solid market-making

activity levels.

In investment banking, compared with 2021, industry-wide

equity underwriting volumes were low amid volatile equity

markets and a decline in prices, and industry-wide debt

underwriting volumes declined across leveraged finance and

investment grade issuances amid rising interest rates.

Additionally, industry-wide completed mergers and

acquisitions transactions declined from elevated levels in the

prior year.

For volatility, the average daily VIX was 30% higher

compared with 2021. In equities, the S&P 500 Index

decreased by 19% and the MSCI World Index decreased by

20%, compared with the end of 2021. Additionally, global

central banks sought to address inflation by increasing policy

interest rates several times over the course of the year.

In the future, if market and economic conditions deteriorate

further, and activity levels or volatility decline, or credit

spreads related to hedges on our relationship lending

portfolio tighten, net revenues in Global Banking & Markets

would likely be negatively impacted. In addition, if economic

conditions deteriorate further or if the creditworthiness of

borrowers deteriorates, provision for credit losses would

likely be negatively impacted.

2022 versus 2021. Net revenues in Global Banking &

Markets were $32.49 billion for 2022, 12% lower than a

strong 2021.

Investment banking fees were $7.36 billion, 48% lower than a

strong 2021, due to significantly lower net revenues in both

Equity and Debt underwriting, reflecting a significant decline

in industry-wide volumes, and lower net revenues in

Advisory, reflecting a decline in industry-wide completed

mergers and acquisitions transactions from elevated activity

levels in the prior year.

As of December 2022, our Investment banking fees backlog

decreased significantly compared with the end of 2021,

primarily due to significantly lower estimated net revenues

from both potential advisory transactions and potential debt

underwriting transactions (primarily from leveraged finance

transactions).

Our backlog represents an estimate of our net revenues from

future transactions where we believe that future revenue

realization is more likely than not. We believe changes in our

backlog may be a useful indicator of client activity levels

which, over the long term, impact our net revenues.

However, the time frame for completion and corresponding

revenue recognition of transactions in our backlog varies

based on the nature of the assignment, as certain transactions

may remain in our backlog for longer periods of time. In

addition, our backlog is subject to certain limitations, such as

assumptions about the likelihood that individual client

transactions will occur in the future. Transactions may be

cancelled or modified, and transactions not included in the

estimate may also occur.

Net revenues in FICC were $14.68 billion, 38% higher than

2021, primarily reflecting significantly higher net revenues in

FICC intermediation, driven by significantly higher net

revenues in interest rate products, currencies and

commodities, partially offset by significantly lower net

revenues in mortgages and lower net revenues in credit

products. In addition, net revenues in FICC financing were

significantly higher, primarily driven by secured lending.

The increase in FICC intermediation net revenues reflected

significantly higher client activity as we supported clients

amid an evolving macroeconomic environment. The

following provides information about our FICC

intermediation net revenues by business, compared with 2021

results:

• Net revenues in interest rate products, currencies and

commodities primarily reflected higher client activity.

• Net revenues in mortgages and credit products primarily

reflected the impact of challenging market-making

conditions on our inventory.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis

Goldman Sachs 2022 Form 10-K

Net revenues in Equities were $10.99 billion, 6% lower than

2021, due to lower net revenues in Equities intermediation,

reflecting significantly lower net revenues in cash products

and lower net revenues in derivatives. Net revenues in

Equities financing were higher, primarily reflecting increased

client activity.

Net revenues in Other were $(537) million for 2022,

compared with $265 million for 2021, reflecting significantly

lower net gains from investments in equities and net mark-

downs on acquisition financing activities.

Provision for credit losses was $468 million for 2022,

compared with a net benefit of $171 million for 2021.

Provisions for 2022 primarily reflected the impact of broad

macroeconomic and geopolitical concerns, while the net

benefit for 2021 reflected reserve reductions as the broad

economic environment continued to improve following the

initial impact of the COVID-19 pandemic, partially offset by

growth in the portfolio.

Operating expenses were $17.85 billion for 2022, 9% lower

than 2021, reflecting lower compensation and benefits

expenses (reflecting a decline in operating performance

compared with a strong prior year). Pre-tax earnings were

$14.17 billion for 2022, 18% lower than 2021.

2021 versus 2020. Net revenues in Global Banking &

Markets were $36.73 billion for 2021, 21% higher than 2020.

Investment banking fees were $14.14 billion, 55% higher than

2020, due to significantly higher net revenues in Advisory,

reflecting a significant increase in completed mergers and

acquisitions volumes, in Equity underwriting, primarily

driven by strong industry-wide initial public offerings

activity, and in Debt underwriting, primarily reflecting

elevated industry-wide leveraged finance activity.

As of December 2021, our Investment banking fees backlog

increased significantly compared with December 2020, due to

significantly higher estimated net revenues from potential

advisory transactions and potential debt underwriting

transactions (particularly from leveraged finance

transactions), and higher estimated net revenues from

potential equity underwriting transactions.

Net revenues in FICC were $10.61 billion, 7% lower than

2020, due to lower net revenues in FICC intermediation,

reflecting significantly lower net revenues in interest rate

products and credit products and slightly lower net revenues

in currencies, partially offset by significantly higher net

revenues in mortgages and higher net revenues in

commodities. Net revenues in FICC financing were

significantly higher, reflecting significantly higher net

revenues from secured lending, partially offset by

significantly lower net revenues from resale agreements.

The decrease in FICC intermediation net revenues reflected

strong but significantly lower client activity compared with

very strong activity levels in the prior year due to high

volatility amid the COVID-19 pandemic. This was partially

offset by the impact of improved market-making conditions

on our inventory compared with challenging conditions in

the prior year. The following provides information about our

FICC intermediation net revenues by business, compared

with 2020 results:

• Net revenues in interest rate products primarily reflected

lower client activity.

• Net revenues in credit products and currencies reflected

lower client activity, partially offset by the impact of

improved market-making conditions on our inventory.

• Net revenues in mortgages reflected the impact of

improved market-making conditions on our inventory.

• Net revenues in commodities primarily reflected higher

client activity.

Net revenues in Equities were $11.72 billion, 19% higher than

2020, due to significantly higher net revenues in Equities

financing, primarily reflecting increased activity (including

higher average client balances), and higher net revenues in

Equities intermediation, primarily reflecting higher net

revenues in derivatives.

Net revenues in Other were $265 million for 2021, compared

with $32 million for 2020, primarily reflecting significantly

higher net gains from investments in equities.

Provision for credit losses was a net benefit of $171 million

for 2021, compared with net provisions of $1.22 billion for

2020, primarily due to reserve reductions in the year

reflecting continued improvement in the broad economic

environment following challenging conditions in 2020

resulting from the COVID-19 pandemic, partially offset by

portfolio growth.

Operating expenses were $19.54 billion for 2021, 3% higher

than 2020, primarily due to significantly higher compensation

and benefits expenses (reflecting strong performance) and

higher transaction based expenses, largely offset by

significantly lower net provisions for litigation and

regulatory proceedings. Pre-tax earnings were $17.36 billion,

67% higher than 2020. ROE was 22.5% for 2021, compared

with 13.6% for 2020 (which included the impact of net

provisions for litigation and regulatory proceedings that

reduced ROE by 5.4 percentage points).

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis

Goldman Sachs 2022 Form 10-K 71

Asset & Wealth Management

Asset & Wealth Management provides investment services to

help clients preserve and grow their financial assets and

achieve their financial goals. We provide these services to our

clients, both institutional and individuals, including investors

who primarily access our products through a network of

third-party distributors around the world.

We manage client assets across a broad range of investment

strategies and asset classes, including equity, fixed income

and alternative investments. We provide investment

solutions, including those managed on a fiduciary basis by

our portfolio managers, as well as those managed by third-

party managers. We offer our investment solutions in a

variety of structures, including separately managed accounts,

mutual funds, private partnerships and other commingled

vehicles.

We also provide tailored wealth advisory services to clients

across the wealth spectrum. We operate globally serving

individuals, families, family offices, and foundations and

endowments. Our relationships are established directly or

introduced through companies that sponsor financial

wellness programs for their employees.

We offer personalized financial planning to individuals and

also provide customized investment advisory solutions, and

offer structuring and execution capabilities in securities and

derivative products across all major global markets. In

addition, we offer clients a full range of private banking

services, including a variety of deposit alternatives and loans

that our clients use to finance investments in both financial

and nonfinancial assets, bridge cash flow timing gaps or

provide liquidity and flexibility for other needs.

We invest in alternative investments across a range of asset

classes that seek to deliver long-term accretive risk-adjusted

returns. Our investing activities, which are typically longer-

term, include investments in corporate equity, credit, real

estate and infrastructure assets.

We also raise deposits and have issued unsecured loans to

consumers through Marcus by Goldman Sachs (Marcus). We

have started a process to cease offering new loans through

Marcus.

Asset & Wealth Management generates revenues from the

following:

• Management and other fees. We receive fees related to

managing assets for institutional and individual clients,

providing investing and wealth advisory solutions,

providing financial planning and counseling services via

Ayco Personal Financial Management, and executing

brokerage transactions for wealth management clients. The

majority of revenues in management and other fees consists

of asset-based fees on client assets that we manage. For

further information about assets under supervision, see

“Assets Under Supervision” below. The fees that we charge

vary by asset class, client channel and the types of services

provided, and are affected by investment performance, as

well as asset inflows and redemptions.

• Incentive fees. In certain circumstances, we also receive

incentive fees based on a percentage of a fund’s or a

separately managed account’s return, or when the return

exceeds a specified benchmark or other performance

targets. Such fees include overrides, which consist of the

increased share of the income and gains derived primarily

from our private equity and credit funds when the return

on a fund’s investments over the life of the fund exceeds

certain threshold returns.

• Private banking and lending. Our private banking and

lending activities include issuing loans to our wealth

management clients. We also accept deposits from wealth

management clients, including through Marcus. We have

also issued unsecured loans to consumers through Marcus

and have started a process to cease offering new loans.

Additionally, we provide investing services through Marcus

Invest to U.S. customers. Private banking and lending

revenues include net interest income allocated to deposits

and net interest income earned on loans to individual

clients.

• Equity investments. Includes investing activities related

to our asset management activities primarily related to

public and private equity investments in corporate, real

estate and infrastructure assets. We also make investments

through consolidated investment entities (CIEs),

substantially all of which are engaged in real estate

investment activities.

• Debt investments. Includes lending activities related to

our asset management activities, including investing in

corporate debt, lending to middle-market clients, and

providing financing for real estate and other assets. These

activities include investments in mezzanine debt, senior

debt and distressed debt securities.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis

Goldman Sachs 2022 Form 10-K

The table below presents our Asset & Wealth Management

assets.

As of December

$ in millions 2022 2021

Cash and cash equivalents $ 54,065 $ 62,652

Collateralized agreements 23,723 18,737

Customer and other receivables 13,409 12,712

Trading assets 19,860 17,739

Investments 27,400 32,491

Loans 56,338 56,676

Other assets 20,175 20,143

Total $ 214,970 $ 221,150

The table below presents details about our Asset & Wealth

Management loans.

As of December

$ in millions 2022 2021

Corporate $ 14,359 $ 15,575

Real estate 18,699 18,688

Securities-based 12,814 13,635

Other collateralized 6,295 5,186

Installment 4,474 3,646

Other 1,700 1,708

Loans, gross 58,341 58,438

Allowance for loan losses (2,003) (1,762)

Total loans $ 56,338 $ 56,676

The average Asset & Wealth Management gross loans were

$59.35billion for 2022 and $56.85billion for 2021.

The table below presents our Asset & Wealth Management

operating results.

Year Ended December

$ in millions 2022 2021 2020

Management and other fees $ 8,781 $ 7,750 $ 6,750

Incentive fees 359 616 401

Private banking and lending 2,458 1,661 1,372

Equity investments 610 8,794 3,902

Debt investments 1,168 3,144 1,332

Net revenues 13,376 21,965 13,757

Provision for credit losses 519 (169) 1,395

Operating expenses 11,550 11,406 9,469

Pre-tax earnings 1,307 10,728 2,893

Provision for taxes 215 2,146 700

Net earnings 1,092 8,582 2,193

Preferred stock dividends 113 123 110

Net earnings to common $ 979 $ 8,459 $ 2,083

Average common equity $ 31,762 $ 29,988 $ 24,963

Return on average common equity 3.1% 28.2% 8.3%

The table below presents our Asset management and Wealth

management net revenues by line item in Asset & Wealth

Management.

$ in millions

Asset

management

Wealth

management

Asset & Wealth

Management

Year Ended December 2022

Management and other fees $ 3,817 $ 4,964 $ 8,781

Incentive fees 359 – 359

Private banking and lending – 2,458 2,458

Equity investments 610 – 610

Debt investments 1,168 – 1,168

Total $ 5,954 $ 7,422 $ 13,376

Year Ended December 2021

Management and other fees $ 2,918 $ 4,832 $ 7,750

Incentive fees 616 – 616

Private banking and lending – 1,661 1,661

Equity investments 8,794 – 8,794

Debt investments 3,144 – 3,144

Total $ 15,472 $ 6,493 $ 21,965

Year Ended December 2020

Management and other fees $ 2,782 $ 3,968 $ 6,750

Incentive fees 401 – 401

Private banking and lending – 1,372 1,372

Equity investments 3,902 – 3,902

Debt investments 1,332 – 1,332

Total $ 8,417 $ 5,340 $ 13,757

In the table above, incentive fees previously included in

Wealth management have been reclassified to Asset

management to better reflect the activities of the reporting

unit that generated the underlying revenues. Previously,

incentive fees related to wealth management clients were

reflected in Wealth management. Prior periods have been

conformed to the current presentation.

The table below presents our Equity investments net revenues

by equity type and asset class.

Year Ended December

$ in millions 2022 2021 2020

Equity Type

Private equity $ 2,078 $ 8,826 $ 2,329

Public equity (1,468) (32) 1,573

Total $ 610 $ 8,794 $ 3,902

Asset Class

Real estate $ 1,482 $ 2,489 $ 1,621

Corporate (872) 6,305 2,281

Total $ 610 $ 8,794 $ 3,902

The table below presents details about our Debt investments

net revenues.

Year Ended December

$ in millions 2022 2021 2020

Fair value net gains/(losses) $ (415) $ 1,216 $ (268)

Net interest income 1,583 1,928 1,600

Total $ 1,168 $ 3,144 $ 1,332

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis

Goldman Sachs 2022 Form 10-K 73

The table below presents our unaudited quarterly Asset &

Wealth Management operating results.

First Second Third Fourth

$ in millions Quarter Quarter Quarter Quarter

2022

Management and other fees $ 2,035 $ 2,243 $ 2,255 $ 2,248

Incentive fees

79 185 56 39

Private banking and lending

492 538 675 753

Equity investments

(294) (104) 721 287

Debt investments

291 317 326 234

Net revenues 2,603 3,179 4,033 3,561

Provision for credit losses 203 149 (13) 180

Operating expenses 2,409 2,823 2,955 3,363

Pre-tax earnings/(loss) $ (9) $ 207 $ 1,091 $ 18

2021

Management and other fees $ 1,839 $ 1,879 $ 1,985 $ 2,047

Incentive fees 68 93 220 235

Private banking and lending 416 387 432 426

Equity investments 2,965 3,425 957 1,447

Debt investments 963 765 711 705

Net revenues 6,251 6,549 4,305 4,860

Provision for credit losses (140) (159) 58 72

Operating expenses 3,315 2,983 2,232 2,876

Pre-tax earnings $ 3,076 $ 3,725 $ 2,015 $ 1,912

2020

Management and other fees $ 1,603 $ 1,642 $ 1,708 $ 1,797

Incentive fees 223 44 35 99

Private banking and lending 377 245 341 409

Equity investments (56) 896 1,377 1,685

Debt investments (710) 557 728 757

Net revenues 1,437 3,384 4,189 4,747

Provision for credit losses 281 781 203 130

Operating expenses 2,307 2,471 2,550 2,141

Pre-tax earnings/(loss) $ (1,151) $ 132 $ 1,436 $ 2,476

Operating Environment. During 2022, Asset & Wealth

Management operated in an environment generally

characterized by broad macroeconomic and geopolitical

concerns and market volatility, which contributed to a

decrease in asset prices compared to the end of 2021,

negatively affecting assets under supervision and investments.

Additionally, global central banks sought to address inflation

by increasing policy interest rates several times over the

course of the year.

In the future, if market and economic conditions deteriorate

further, it may lead to a continued decline in asset prices, or

investors transitioning to asset classes that typically generate

lower fees or withdrawing their assets or deposits, and net

revenues in Asset & Wealth Management would likely

continue to be negatively impacted.

2022 versus 2021. Net revenues in Asset & Wealth

Management were $13.38 billion for 2022, 39% lower than

2021, primarily reflecting significantly lower net revenues in

Equity investments and Debt investments.

Broad macroeconomic and geopolitical concerns during the

year led to a decline in global equity prices and wider credit

spreads. As a result, net revenues in Equity investments

reflected significantly lower net gains from investments in

private equities and significant mark-to-market net losses

from investments in public equities. The decrease in Debt

investments net revenues reflected net mark-downs compared

with net mark-ups in the prior year and lower net interest

income. Incentive fees were significantly lower, primarily

driven by harvesting in the prior year. Management and

other fees were higher, reflecting the inclusion of NNIP and a

reduction in fee waivers on money market funds. Private

banking and lending net revenues were significantly higher,

primarily reflecting higher deposit spreads, as well as higher

loan and deposit balances.

Provision for credit losses was $519 million for 2022,

compared with a net benefit of $169 million for 2021.

Provisions for 2022 primarily reflected the impact of

macroeconomic and geopolitical concerns, while the net

benefit for 2021 reflected reserve reductions as the broad

economic environment continued to improve following the

initial impact of the COVID-19 pandemic.

Operating expenses were $11.55 billion for 2022, essentially

unchanged compared with 2021, reflecting the inclusion of

operating expenses related to NNIP, largely offset by lower

compensation and benefits expenses. Pre-tax earnings were

$1.31 billion for 2022, compared with $10.73 billion for 2021.

2021 versus 2020. Net revenues in Asset & Wealth

Management were $21.97 billion for 2021, 60% higher than

2020, primarily reflecting significantly higher net revenues in

Equity investments and Debt investments, and higher

Management and other fees.

The increase in Equity investments net revenues reflected

significantly higher net gains from investments in private

equities, driven by company-specific events and improved

corporate performance compared with 2020, partially offset

by net losses from investments in public equities compared

with significant net gains in the prior year. The increase in

Debt investments net revenues reflected net mark-ups

compared with net mark-downs in the prior year, and

significantly higher net interest income. The increase in

management and other fees reflected the impact of higher

average assets under supervision, partially offset by higher fee

waivers on money market funds. Private banking and lending

net revenues were higher, primarily reflecting higher deposit

balances. Incentive fees were significantly higher, primarily

driven by harvesting.

Provision for credit losses was a net benefit of $169 million

for 2021, compared with net provisions of $1.40 billion for

2020, primarily due to reserve reductions in the year

reflecting continued improvement in the broad economic

environment following challenging conditions in 2020

resulting from the COVID-19 pandemic.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis

Goldman Sachs 2022 Form 10-K

Operating expenses were $11.41 billion for 2021, 20% higher

than 2020, primarily due to significantly higher compensation

and benefits expenses (reflecting strong performance). Pre-

tax earnings were $10.73 billion for 2021, compared with

$2.89 billion for 2020.

Assets Under Supervision. AUS includes our institutional

clients’ assets, assets sourced through third-party distributors

and high-net-worth clients’ assets where we earn a fee for

managing assets on a discretionary basis. This includes net

assets in our mutual funds, hedge funds, credit funds, private

equity funds, real estate funds, and separately managed

accounts for institutional and individual investors. AUS also

includes client assets invested with third-party managers,

private bank deposits and advisory relationships where we

earn a fee for advisory and other services, but do not have

investment discretion. AUS does not include the self-directed

brokerage assets of our clients.

The table below presents information about our firmwide

period-end AUS by asset class, client channel, region and

vehicle.

As of December

$ in billions 2022 2021 2020

Asset Class

Alternative investments $ 263 $ 236 $ 191

Equity 563 613 475

Fixed income 1,010 940 896

Total long-term AUS 1,836 1,789 1,562

Liquidity products 711 681 583

Total AUS $ 2,547 $ 2,470 $ 2,145

Client Channel

Institutional $ 905 $ 824 $ 761

Wealth management 712 751 615

Third-party distributed 930 895 769

Total AUS $ 2,547 $ 2,470 $ 2,145

Region

Americas $ 1,806 $ 1,930 $ 1,656

EMEA 548 354 318

Asia 193 186 171

Total AUS $ 2,547 $ 2,470 $ 2,145

Vehicle

Separate accounts $ 1,388 $ 1,347 $ 1,186

Public funds 862 811 707

Private funds and other 297 312 252

Total AUS $ 2,547 $ 2,470 $ 2,145

In the table above:

• Liquidity products includes money market funds and

private bank deposits.

• EMEA represents Europe, Middle East and Africa.

The table below presents changes in our AUS.

Year Ended December

$ in billions 2022 2021 2020

Beginning balance $ 2,470 $ 2,145 $ 1,859

Net inflows/(outflows):

Alternative investments 19 33 (1)

Equity 13 41 (4)

Fixed income 18 56 47

Total long-term AUS net inflows/(outflows) 50 130 42

Liquidity products 16 98 121

Total AUS net inflows/(outflows) 66 228 163

Acquisitions 316 – –

Net market appreciation/(depreciation) (305) 97 123

Ending balance $ 2,547 $ 2,470 $ 2,145

In the table above, acquisitions for 2022 included inflows

from the acquisitions of NNIP and NextCapital Group, Inc.,

and from the acquisition of the assets of Bombardier Global

Pension Asset Management Inc. For each, substantially all of

the inflows were in fixed income and equity assets.

The table below presents information about our average

monthly firmwide AUS by asset class.

Average for the

Year Ended December

$ in billions 2022 2021 2020

Asset Class

Alternative investments $ 253 $ 211 $ 183

Equity 581 547 409

Fixed income 992 919 829

Total long-term AUS 1,826 1,677 1,421

Liquidity products 693 625 573

Total AUS $ 2,519 $ 2,302 $ 1,994

In addition to our AUS, we have discretion over alternative

investments where we currently do not earn management fees

(non-fee-earning alternative assets).

We earn management fees on client assets that we manage

and also receive incentive fees based on a percentage of a

fund’s or a separately managed account’s return, or when the

return exceeds a specified benchmark or other performance

targets. These incentive fees are recognized when it is

probable that a significant reversal of such fees will not

occur. Our estimated unrecognized incentive fees were

$3.33 billion as of December 2022, $3.39 billion as of

December 2021 and $1.79 billion as of December 2020. Such

amounts are based on the completion of the funds’ financial

statements, which is generally one quarter in arrears. These

fees will be recognized, assuming no decline in fair value, if

and when it is probable that a significant reversal of such fees

will not occur, which is generally when such fees are no

longer subject to fluctuations in the market value of the

assets.

Our target is to achieve annual firmwide management and

other fees of more than $10 billion (including more than $2

billion from alternatives) in 2024.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis

Goldman Sachs 2022 Form 10-K 75

The table below presents our average effective management

fee (which excludes non-asset-based fees) earned on our

firmwide AUS by asset class.

Year Ended December

Effective fees (bps) 2022 2021 2020

Alternative investments 64 63 61

Equity 57 60 58

Fixed income 17 17 18

Liquidity products 14 5 14

Total average effective fee 31 29 29

In the table above, our average effective management fee for

liquidity products increased during 2022 compared to 2021,

primarily reflecting higher management fee waivers in 2021.

The table below presents details about our monthly average

AUS for alternative investments and the average effective

management fee we earned on such assets.

$ in billions

Direct

Strategies

Fund of

Funds

Total

Year Ended December 2022

Average AUS

Corporate equity $ 27 $ 61 $ 88

Credit 36 2 38

Real estate 10 8 18

Hedge funds and other 45 22 67

Funds and discretionary accounts $ 118 $ 93 $ 211

Advisory accounts 42

Total average AUS for alternative investments $ 253

Effective Fees (bps)

Corporate equity 133 61 83

Credit 81 51 80

Real estate 87 50 70

Hedge funds and other 64 49 59

Funds and discretionary accounts 87 57 74

Advisory accounts 16

Total average effective fee 64

Year Ended December 2021

Average AUS

Corporate equity $ 20 $ 59 $ 79

Credit 18 2 20

Real estate 8 7 15

Hedge funds and other 43 19 62

Funds and discretionary accounts $ 89 $ 87 $ 176

Advisory accounts 35

Total average AUS for alternative investments $ 211

Effective Fees (bps)

Corporate equity 118 57 72

Credit 102 53 98

Real estate 94 55 76

Hedge funds and other 65 55 62

Funds and discretionary accounts 87 56 72

Advisory accounts 17

Total average effective fee 63

Year Ended December 2020

Average AUS

Corporate equity $ 15 $ 58 $ 73

Credit 13 2 15

Real estate 7 6 13

Hedge funds and other 37 17 54

Funds and discretionary accounts $ 72 $ 83 $ 155

Advisory accounts 28

Total average AUS for alternative investments $ 183

Effective Fees (bps)

Corporate equity 132 57 73

Credit 95 52 89

Real estate 88 62 75

Hedge funds and other 63 53 60

Funds and discretionary accounts 86 57 70

Advisory accounts 13

Total average effective fee 61

In the table above,

• Direct strategies primarily includes our private equity,

growth equity, private credit, liquid alternatives and real

estate strategies. Fund of funds primarily includes our

Alternative Investments & Manager Selection (AIMS)

business. AIMS invests in leading private equity, hedge

fund, real estate and credit third-party managers as a

limited partner, secondary-market investor, co-investor or

management company partner.

• Certain AUS previously reported in Direct Strategies were

reclassified to Fund of Funds to better reflect the nature of

the underlying strategy. Prior periods amounts have been

conformed to the current presentation.

The table below presents information about our period-end

AUS for alternative investments, non-fee-earning alternative

investments and total alternative investments.

$ in billions AUS

Non-fee-earning

alternative

assets

Total

alternative

assets

As of December 2022

Corporate equity $ 94 $ 76 $ 170

Credit 44 73 117

Real estate 18 36 54

Hedge funds and other 65 2 67

Funds and discretionary accounts 221 187 408

Advisory accounts 42 – 42

Total alternative investments $ 263 $ 187 $ 450

As of December 2021

Corporate equity $ 87 $ 78 $ 165

Credit 25 79 104

Real estate 16 39 55

Hedge funds and other 70 2 72

Funds and discretionary accounts 198 198 396

Advisory accounts 38 2 40

Total alternative investments $ 236 $ 200 $ 436

As of December 2020

Corporate equity $ 74 $ 50 $ 124

Credit 18 80 98

Real estate 13 43 56

Hedge funds and other 56 2 58

Funds and discretionary accounts 161 175 336

Advisory accounts 30 1 31

Total alternative investments $ 191 $ 176 $ 367

In the table above:

• Corporate equity primarily includes private equity.

• Total alternative investments included uncalled capital that

is available for future investing of $54 billion as of

December 2022, $42 billion as of December 2021 and $44

billion as of December 2020.

• Non-fee-earning alternative investments primarily includes

investments that we hold on our balance sheet, our

unfunded commitments, unfunded commitments of our

clients (where we do not charge fees on commitments),

credit facilities collateralized by fund assets and employee

funds. Our calculation of non-fee-earning alternative

investments may not be comparable to similar calculations

used by other companies.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis

Goldman Sachs 2022 Form 10-K

• Non-fee-earning alternative investments primarily includes

our direct investing strategies, including private equity,

growth equity, private credit and real estate strategies.

We have announced a strategic objective of growing our

third-party alternatives business, and have established a

target of achieving gross inflows of $225 billion for

alternative investments from 2020 through the end of 2024.

The table below presents information about third-party

commitments raised in our alternatives business from 2020

through 2022.

As of

$ in billions December 2022

Included in AUS $ 118

Included in non-fee-earning alternative assets 61

Third-party commitments raised $ 179

In the table above, commitments included in non-fee-earning

alternative investments included approximately $44 billion,

which will begin to earn fees (and become AUS) if and when

the commitments are drawn and assets are invested.

The table below presents information about alternative

investments in Asset & Wealth Management that we hold on

our balance sheet.

$ in billions

Loans

Debt

securities

Equity

securities

CIE

investments

and other Total

As of December 2022

Corporate equity $ – $ – $ 10 $ – $ 10

Credit 14 11 – – 25

Real estate 5 1 5 12 23

Other – – – 1 1

Total $ 19 $ 12 $ 15 $ 13 $ 59

As of December 2021

Corporate equity $ – $ – $ 14 $ – $ 14

Credit 15 11 – – 26

Real estate 7 2 4 14 27

Other – – – 1 1

Total $ 22 $ 13 $ 18 $ 15 $ 68

As of December 2020

Corporate equity $ – $ – $ 16 $ – $ 16

Credit 16 12 – – 28

Real estate 9 2 3 19 33

Other – – – 1 1

Total $ 25 $ 14 $ 19 $ 20 $ 78

As we continue to grow our third-party alternatives business,

we remain focused on our strategic objective to reduce the

capital intensity of our alternative investments in Asset &

Wealth Management that we hold on our balance sheet.

During 2022, we reduced our on-balance sheet alternative

investments by $9 billion to $59 billion.

Loans and Debt Securities. The table below presents the

concentration of loans and debt securities within our

alternative investments by accounting classification, region

and industry.

As of December

$ in billions 2022 2021

Loans $19 $22

Debt securities 12 13

Total $31 $35

Accounting Classification

Debt securities at fair value 39% 38%

Loans at amortized cost 49% 53%

Loans at fair value 6% 9%

Loans held for sale 6% —

Total 100% 100%

Region

Americas 51% 50%

EMEA 35% 34%

Asia 14% 16%

Total 100% 100%

Industry

Consumer & Retail 10% 9%

Financial Institutions 7% 6%

Healthcare 13% 12%

Industrials 16% 16%

Natural Resources & Utilities 2% 4%

Real Estate 20% 25%

Technology, Media & Telecommunications 25% 22%

Other 7% 6%

Total 100% 100%

Equity Securities. The table below presents the

concentration of equity securities within our alternative

investments by region and industry.

As of December

$ in billions 2022 2021

Equity securities $15 $18

Region

Americas 67% 57%

EMEA 15% 23%

Asia 18% 20%

Total 100% 100%

Industry

Consumer & Retail 6% 8%

Financial Institutions 10% 9%

Healthcare 9% 11%

Industrials 7% 8%

Natural Resources & Utilities 14% 11%

Real Estate 30% 23%

Technology, Media & Telecommunications 23% 29%

Other 1% 1%

Total 100% 100%

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis

Goldman Sachs 2022 Form 10-K 77

In the table above:

• Equity securities included $13billion as of December 2022

and $14 billion as of December 2021 of private equity

positions, and $2 billion as of December 2022 and

$4 billion as of December 2021 of public equity positions

that converted from private equity upon the initial public

offerings of the underlying companies.

• The concentrations for real estate equity securities as of

December 2022 were 9% for multifamily (5% as of

December 2021), 5% for office (5% as of December 2021),

8% for mixed use (7% as of December 2021) and 8% for

other real estate equity securities (6% as of December

2021).

The table below presents the concentration of equity

securities within our alternative investments by vintage.

Vintage

As of December 2022

2015 or earlier 26%

2016 - 2018 26%

2019 - thereafter 48%

Total 100%

As of December 2021

2014 or earlier 20%

2015 - 2017 32%

2018 - thereafter 48%

Total 100%

CIE Investments and Other. CIE investments and other

included assets held by CIEs of $12 billion as of December

2022 and $14billion as of December 2021, which were funded

with liabilities of approximately $6 billion as of December

2022 and $7 billion as of December 2021. Substantially all

such liabilities were nonrecourse, thereby reducing our equity

at risk.

The table below presents the concentration of CIE assets, net

of financings, within our alternative investments by region

and asset class.

As of December

$ in billions 2022 2021

CIE assets, net of financings $6 $7

Region

Americas 65% 63%

EMEA 25% 25%

Asia 10% 12%

Total 100% 100%

Asset Class

Hospitality 4% 4%

Industrials 10% 10%

Multifamily 23% 23%

Office 22% 24%

Retail 3% 5%

Senior Housing 14% 16%

Student Housing 7% 6%

Other 17% 12%

Total 100% 100%

The table below presents the concentration of CIE assets, net

of financings, within our alternative investments by vintage.

Vintage

As of December 2022

2015 or earlier 5%

2016 - 2018 45%

2019 - thereafter 50%

Total 100%

As of December 2021

2014 or earlier 2%

2015 - 2017 29%

2018 - thereafter 69%

Total 100%

Platform Solutions

Platform Solutions includes our consumer platforms, such as

partnerships offering credit cards and point-of-sale financing,

and transaction banking and other platform businesses.

Platform Solutions generates revenues from the following:

Consumer platforms. Our Consumer platforms business

issues credit cards and provides point-of-sale financing to

consumers to finance the purchases of goods or services.

Consumer platforms revenues primarily includes net interest

income earned on credit card lending and point-of-sale

financing activities.

Transaction banking and other. We provide transaction

banking and other services, including cash management

services, such as deposit-taking and payment solutions for

corporate and institutional clients. Transaction banking

revenues include net interest income attributed to transaction

banking deposits.

The table below presents our Platform Solutions assets.

As of December

$ in millions 2022 2021

Cash and cash equivalents $ 20,557 $ 20,025

Collateralized agreements 10,278 6,637

Customer and other receivables 2 3

Trading assets 8,597 6,257

Loans 15,300 7,289

Other assets 2,556 631

Total $ 57,290 $ 40,842

The table below presents details about our Platform

Solutions loans.

As of December

$ in millions 2022 2021

Installment $ 1,852 $ 26

Credit cards 15,820 8,212

Loans, gross 17,672 8,238

Allowance for loan losses (2,372) (949)

Total loans $ 15,300 $ 7,289

The average Platform Solutions gross loans were

$12.43billion for 2022 and $5.51billion for 2021.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis

Goldman Sachs 2022 Form 10-K

The table below presents our Platform Solutions operating

results.

Year Ended December

$ in millions 2022 2021 2020

Consumer platforms $ 1,176 $ 424 $ 188

Transaction banking and other

326 216 146

Net revenues 1,502 640 334

Provision for credit losses 1,728 697 487

Operating expenses 1,763 990 630

Pre-tax earnings/(loss) (1,989) (1,047) (783)

Provision for taxes (328) (210) (189)

Net earnings/(loss) (1,661) (837) (594)

Preferred stock dividends 12 6 2

Net earnings/(loss) to common $ (1,673) $ (843) $ (596)

Average common equity $ 3,574 $ 1,777 $ 864

Return on average common equity (46.8) % (47.4) % (69.0) %

The table below presents our unaudited quarterly Platform

Solutions operating results.

First Second Third Fourth

$ in millions Quarter Quarter Quarter Quarter

2022

Consumer platforms $ 201 $ 252 $ 290 $ 433

Transaction banking and other

67 91 88 80

Net revenues 268 343 378 513

Provision for credit losses 167 310 465 786

Operating expenses 334 399 525 505

Pre-tax earnings/(loss) $ (233) $ (366) $ (612) $ (778)

2021

Consumer platforms $ 90 $ 90 $ 119 $ 125

Transaction banking and other 49 49 54 64

Net revenues 139 139 173 189

Provision for credit losses 169 113 127 288

Operating expenses 230 187 269 304

Pre-tax earnings/(loss) $ (260) $ (161) $ (223) $ (403)

2020

Consumer platforms $ 21 $ 50 $ 70 $ 47

Transaction banking and other 8 37 51 50

Net revenues 29 87 121 97

Provision for credit losses 92 107 84 204

Operating expenses 144 166 144 176

Pre-tax earnings/(loss) $ (207) $ (186) $ (107) $ (283)

Operating Environment. During 2022, Platform Solutions

operated in an environment generally characterized by broad

macroeconomic concerns. In the U.S., the rate of

unemployment remained low and consumer spending

increased slightly compared with 2021. Additionally, global

central banks sought to address inflation by increasing policy

interest rates several times over the course of the year.

In the future, if market and economic conditions deteriorate

further, it may lead to a decrease in consumer spending or a

deterioration in consumer credit, and net revenues and

provision for credit losses in Platform Solutions would likely

be negatively impacted.

2022 versus 2021. Net revenues in Platform Solutions were

$1.50 billion for 2022, 135% higher than 2021, reflecting

significantly higher net revenues in both Consumer platforms

and Transaction banking and other.

The increase in Consumer platforms net revenues primarily

reflected significantly higher credit card balances. The

increase in Transaction banking and other net revenues

reflected higher deposit balances.

Provision for credit losses was $1.73 billion for 2022,

compared with $697 million for 2021. Provisions for 2022

primarily reflected growth in the credit card portfolio and net

charge offs, while 2021 primarily reflected growth in the

credit card portfolio, which was partially offset by reserve

reductions as the broad economic environment continued to

improve following the initial impact of the COVID-19

pandemic.

Operating expenses were $1.76 billion for 2022, 78% higher

than 2021, reflecting higher spend on growth initiatives in

Consumer platforms, primarily from the inclusion of

operating expenses related to GreenSky. Pre-tax loss was

$1.99 billion for 2022, compared with $1.05 billion for 2021.

2021 versus 2020. Net revenues in Platform Solutions were

$640 million for 2021, 92% higher than 2020, reflecting

significantly higher net revenues in Consumer platforms and

higher net revenues in Transaction banking and other.

Net revenues in Consumer platforms reflected higher credit

card balances. Net revenues in Transaction banking and

other reflected higher deposit balances.

Provision for credit losses was $697 million for 2021, 43%

higher than 2020, primarily reflecting growth in the credit

card portfolio, including approximately $185 million of the

provisions related to the commitment to acquire the General

Motors co-branded credit card portfolio, partially offset by

reserve reductions in the year reflecting continued

improvement in the broad economic environment following

challenging conditions in 2020 resulting from the COVID-19

pandemic.

Operating expenses were $990 million for 2021, 57% higher

than 2020, primarily reflecting higher spend on growth

initiatives in Consumer platforms. Pre-tax loss was $1.05

billion for 2021, compared with $783 million for 2020.

Geographic Data

See Note 25 to the consolidated financial statements for a

summary of our total net revenues, pre-tax earnings and net

earnings by geographic region.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis

Goldman Sachs 2022 Form 10-K 79

Balance Sheet and Funding Sources

Balance Sheet Management

One of our risk management disciplines is our ability to

manage the size and composition of our balance sheet. While

our asset base changes due to client activity, market

fluctuations and business opportunities, the size and

composition of our balance sheet also reflects factors,

including (i) our overall risk tolerance, (ii) the amount of

capital we hold and (iii) our funding profile, among other

factors. See “Capital Management and Regulatory Capital —

Capital Management” for information about our capital

management process.

Although our balance sheet fluctuates on a day-to-day basis,

our total assets at quarter-end are generally not materially

different from those occurring within our reporting periods.

In order to ensure appropriate risk management, we seek to

maintain a sufficiently liquid balance sheet and have

processes in place to dynamically manage our assets and

liabilities, which include (i) balance sheet planning, (ii)

balance sheet limits, (iii) monitoring of key metrics and (iv)

scenario analyses.

Balance Sheet Planning. We prepare a balance sheet plan

that combines our projected total assets and composition of

assets with our expected funding sources over a three-year

time horizon. This plan is reviewed quarterly and may be

adjusted in response to changing business needs or market

conditions. The objectives of this planning process are:

• To develop our balance sheet projections, taking into

account the general state of the financial markets and

expected business activity levels, as well as regulatory

requirements;

• To allow Treasury and our independent risk oversight and

control functions to objectively evaluate balance sheet limit

requests from our revenue-producing units in the context

of our overall balance sheet constraints, including our

liability profile and capital levels, and key metrics; and

• To inform the target amount, tenor and type of funding to

raise, based on our projected assets and contractual

maturities.

Treasury and our independent risk oversight and control

functions, along with our revenue-producing units, review

current and prior period information and expectations for the

year to prepare our balance sheet plan. The specific

information reviewed includes asset and liability size and

composition, limit utilization, risk and performance

measures, and capital usage.

Our consolidated balance sheet plan, including our balance

sheets by business, funding projections and projected key

metrics, is reviewed and approved by the Firmwide Asset

Liability Committee and the Firmwide Risk Appetite

Committee. See “Risk Management — Overview and

Structure of Risk Management” for an overview of our risk

management structure.

Balance Sheet Limits. The Firmwide Asset Liability

Committee and the Firmwide Risk Appetite Committee have

the responsibility to review and approve balance sheet limits.

These limits are set at levels which are close to actual

operating levels, rather than at levels which reflect our

maximum risk appetite, in order to ensure prompt escalation

and discussion among our revenue-producing units, Treasury

and our independent risk oversight and control functions on

a routine basis. Requests for changes in limits are evaluated

after giving consideration to their impact on our key metrics.

Compliance with limits is monitored by our revenue-

producing units and Treasury, as well as our independent

risk oversight and control functions.

Monitoring of Key Metrics. We monitor key balance sheet

metrics both by business and on a consolidated basis,

including asset and liability size and composition, limit

utilization and risk measures. We attribute assets to

businesses and review and analyze movements resulting from

new business activity, as well as market fluctuations.

Scenario Analyses. We conduct various scenario analyses,

including as part of the Comprehensive Capital Analysis and

Review (CCAR) and U.S. Dodd-Frank Wall Street Reform

and Consumer Protection Act Stress Tests (DFAST), as well

as our resolution and recovery planning. See “Capital

Management and Regulatory Capital — Capital

Management” for further information about these scenario

analyses. These scenarios cover short- and long-term time

horizons using various macroeconomic and firm-specific

assumptions, based on a range of economic scenarios. We use

these analyses to assist us in developing our longer-term

balance sheet management strategy, including the level and

composition of assets, funding and capital. Additionally,

these analyses help us develop approaches for maintaining

appropriate funding, liquidity and capital across a variety of

situations, including a severely stressed environment.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis

Goldman Sachs 2022 Form 10-K

Balance Sheet Analysis and Metrics

As of December 2022, total assets in our consolidated balance

sheets were $1.44 trillion, a decrease of $22.19 billion from

December 2021, reflecting decreases in trading assets of

$74.67 billion (primarily due to decreases in equity securities,

corporate debt instruments, reflecting the impact of our and

our clients' activities), customer and other receivables of

$25.23 billion (primarily reflecting client activity), cash and

cash equivalents of $19.21 billion (primarily reflecting our

activity), partially offset by increases in investments of $41.91

billion (primarily due to an increase in U.S. government

obligations accounted for as held-to-maturity), collateralized

agreements of $29.68 billion (primarily reflecting the impact

of our and our clients' activities), and loans of $20.72 billion

(reflecting increases in other collateralized and consumer

loans).

As of December 2022, total liabilities in our consolidated

balance sheets were $1.32 trillion, a decrease of $29.45 billion

from December 2021, reflecting decreases in collateralized

financings of $75.91 billion (primarily reflecting the impact of

our and our clients' activities), partially offset by increases in

deposits of $22.44 billion (primarily due to increases in

transaction banking and private bank and consumer deposits,

partially offset by other deposits), customer and other

payables of $10.11 billion (primarily reflecting client activity),

and trading liabilities of $9.90 billion (primarily due to an

increase in equity securities, partially offset by a decrease in

government obligations, both reflecting the impact of our and

our clients' activities).

Our total repurchase agreements, accounted for as

collateralized financings, were $110.35 billion as of December

2022 and $165.88 billion as of December 2021, which were

15% lower as of December 2022 and 3% higher as of

December 2021 than the average daily amount of repurchase

agreements over the respective quarters, and 27% lower as of

December 2022 and 14% higher as of December 2021 than

the average daily amount of repurchase agreements over the

respective years. As of December 2022, the decrease in our

repurchase agreements relative to the average daily amount

of repurchase agreements during the quarter and year

resulted from lower levels of our and our clients’ activities at

the end of the period.

The level of our repurchase agreements fluctuates between

and within periods, primarily due to providing clients with

access to highly liquid collateral, such as certain government

and agency obligations, through collateralized financing

activities.

The table below presents information about our balance

sheet and leverage ratios.

As of December

$ in millions 2022 2021

Total assets $ 1,441,799 $ 1,463,988

Unsecured long-term borrowings $ 247,138 $ 254,092

Total shareholders’ equity $ 117,189 $ 109,926

Leverage ratio 12.3x 13.3x

Debt-to-equity ratio 2.1x 2.3x

In the table above:

• The leverage ratio equals total assets divided by total

shareholders’ equity and measures the proportion of equity

and debt we use to finance assets. This ratio is different

from the leverage ratios included in Note 20 to the

consolidated financial statements.

• The debt-to-equity ratio equals unsecured long-term

borrowings divided by total shareholders’ equity.

The table below presents information about our

shareholders’ equity and book value per common share,

including the reconciliation of common shareholders’ equity

to tangible common shareholders’ equity.

As of December

$ in millions, except per share amounts 2022 2021

Total shareholders’ equity $ 117,189 $ 109,926

Preferred stock (10,703) (10,703)

Common shareholders’ equity 106,486 99,223

Goodwill (6,374) (4,285)

Identifiable intangible assets (2,009) (418)

Tangible common shareholders’ equity $ 98,103 $ 94,520

Book value per common share $ 303.55 $ 284.39

Tangible book value per common share $ 279.66 $ 270.91

In the table above:

• Tangible common shareholders’ equity is calculated as

total shareholders’ equity less preferred stock, goodwill

and identifiable intangible assets. We believe that tangible

common shareholders’ equity is meaningful because it is a

measure that we and investors use to assess capital

adequacy. Tangible common shareholders’ equity is a non-

GAAP measure and may not be comparable to similar non-

GAAP measures used by other companies.

• Book value per common share and tangible book value per

common share are based on common shares outstanding

and restricted stock units granted to employees with no

future service requirements and not subject to performance

or market conditions (collectively, basic shares) of 350.8

million as of December 2022 and 348.9 million as of

December 2021. We believe that tangible book value per

common share (tangible common shareholders’ equity

divided by basic shares) is meaningful because it is a

measure that we and investors use to assess capital

adequacy. Tangible book value per common share is a non-

GAAP measure and may not be comparable to similar non-

GAAP measures used by other companies.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis

Goldman Sachs 2022 Form 10-K 81

Funding Sources

Our primary sources of funding are deposits, collateralized

financings, unsecured short- and long-term borrowings, and

shareholders’ equity. We seek to maintain broad and

diversified funding sources globally across products,

programs, markets, currencies and creditors to avoid funding

concentrations.

The table below presents information about our funding

sources.

As of December

$ in millions 2022 2021

Deposits $ 386,665 40% $ 364,227 36%

Collateralized financings 155,022 16% 230,932 23%

Unsecured short-term borrowings 60,961 6% 46,955 5%

Unsecured long-term borrowings 247,138 26% 254,092 25%

Total shareholders’ equity 117,189 12% 109,926 11%

Total $ 966,975 100% $ 1,006,132 100%

Our funding is primarily raised in U.S. dollar, Euro, British

pound and Japanese yen. We generally distribute our funding

products through our own sales force and third-party

distributors to a large, diverse creditor base in a variety of

markets in the Americas, Europe and Asia. We believe that

our relationships with our creditors are critical to our

liquidity. Our creditors include banks, governments,

securities lenders, corporations, pension funds, insurance

companies, mutual funds and individuals. We have imposed

various internal guidelines to monitor creditor concentration

across our funding programs.

Deposits. Our deposits provide us with a diversified source

of funding and reduce our reliance on wholesale funding. We

raise deposits, including savings, demand and time deposits,

from private bank clients, consumers, transaction banking

clients, other institutional clients, and through internal and

third-party broker-dealers. Substantially all of our deposits

are raised through GS Bank USA, GSIB and Goldman Sachs

Bank Europe SE (GSBE). See Note 13 to the consolidated

financial statements for further information about our

deposits, including a maturity profile of our time deposits.

Secured Funding. We fund a significant amount of

inventory and a portion of investments on a secured basis.

Secured funding includes collateralized financings in the

consolidated balance sheets. See Note 11 to the consolidated

financial statements for further information about our

collateralized financings, including its maturity profile. We

may also pledge our inventory and investments as collateral

for securities borrowed under a securities lending agreement.

We also use our own inventory and investments to cover

transactions in which we or our clients have sold securities

that have not yet been purchased. Secured funding is less

sensitive to changes in our credit quality than unsecured

funding, due to our posting of collateral to our lenders.

Nonetheless, we analyze the refinancing risk of our secured

funding activities, taking into account trade tenors, maturity

profiles, counterparty concentrations, collateral eligibility

and counterparty rollover probabilities. We seek to mitigate

our refinancing risk by executing term trades with staggered

maturities, diversifying counterparties, raising excess secured

funding and pre-funding residual risk through our GCLA.

We seek to raise secured funding with a term appropriate for

the liquidity of the assets that are being financed, and we seek

longer maturities for secured funding collateralized by asset

classes that may be harder to fund on a secured basis,

especially during times of market stress. Our secured funding,

excluding funding collateralized by liquid government and

agency obligations, is primarily executed for tenors of one

month or greater and is primarily executed through term

repurchase agreements and securities loaned contracts.

Assets that may be harder to fund on a secured basis during

times of market stress include certain financial instruments in

the following categories: mortgage- and other asset-backed

loans and securities, non-investment-grade corporate debt

securities, equity securities and emerging market securities.

We also raise financing through other types of collateralized

financings, such as secured loans and notes. GS Bank USA

has access to funding from the Federal Home Loan Bank. We

had no outstanding borrowings from the Federal Home Loan

Bank as of December 2022 and $100million as of December

2021. Additionally, we have access to funding through the

Federal Reserve discount window. However, we do not rely

on this funding in our liquidity planning and stress testing.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis

Goldman Sachs 2022 Form 10-K

Unsecured Short-Term Borrowings. A significant portion

of our unsecured short-term borrowings was originally long-

term debt that is scheduled to mature within one year of the

reporting date. We use unsecured short-term borrowings,

including U.S. and non-U.S. hybrid financial instruments and

commercial paper, to finance liquid assets and for other cash

management purposes. In accordance with regulatory

requirements, Group Inc. does not issue debt with an original

maturity of less than one year, other than to its subsidiaries.

See Note 14 to the consolidated financial statements for

further information about our unsecured short-term

borrowings.

Unsecured Long-Term Borrowings. Unsecured long-term

borrowings, including structured notes, are raised through

syndicated U.S. registered offerings, U.S. registered and Rule

144A medium-term note programs, offshore medium-term

note offerings and other debt offerings. We issue in different

tenors, currencies and products to maximize the

diversification of our investor base.

The table below presents our quarterly unsecured long-term

borrowings maturity profile.

$ in millions

First

Quarter

Second

Quarter

Third

Quarter

Fourth

Quarter

Total

As of December 2022

2024 $ 18,136 $ 11,053 $ 9,964 $ 11,858 $ 51,011

2025 $ 12,131 $ 10,681 $ 6,443 $ 7,887 37,142

2026 $ 5,862 $ 3,835 $ 3,278 $ 9,227 22,202

2027 $ 8,580 $ 3,435 $ 6,568 $ 11,777 30,360

2028 - thereafter 106,423

Total $ 247,138

The weighted average maturity of our unsecured long-term

borrowings as of December 2022 was approximately six

years. To mitigate refinancing risk, we seek to limit the

principal amount of debt maturing over the course of any

monthly, quarterly, semi-annual or annual time horizon. We

enter into interest rate swaps to convert a portion of our

unsecured long-term borrowings into floating-rate

obligations to manage our exposure to interest rates. See

Note 14 to the consolidated financial statements for further

information about our unsecured long-term borrowings. We

issued approximately $28 billion of benchmark debt during

2022, and we intend to issue significantly less benchmark

debt in 2023 compared to our benchmark debt issuance in

2022, though actual issuances may differ due to business

needs and market opportunities.

Shareholders’ Equity. Shareholders’ equity is a stable and

perpetual source of funding. See Note 19 to the consolidated

financial statements for further information about our

shareholders’ equity.

Capital Management and Regulatory Capital

Capital adequacy is of critical importance to us. We have in

place a comprehensive capital management policy that

provides a framework, defines objectives and establishes

guidelines to assist us in maintaining the appropriate level

and composition of capital in both business-as-usual and

stressed conditions.

Capital Management

We determine the appropriate amount and composition of

our capital by considering multiple factors, including our

current and future regulatory capital requirements, the results

of our capital planning and stress testing process, the results

of resolution capital models and other factors, such as rating

agency guidelines, subsidiary capital requirements, the

business environment and conditions in the financial

markets.

We manage our capital requirements and the levels of our

capital usage principally by setting limits on the balance sheet

and/or limits on risk, in each case at both the firmwide and

business levels.

We principally manage the level and composition of our

capital through issuances and repurchases of our common

stock.

We may issue, redeem or repurchase our preferred stock and

subordinated debt or other forms of capital as business

conditions warrant. Prior to such redemptions or

repurchases, we must receive approval from the FRB. See

Notes 14 and 19 to the consolidated financial statements for

further information about our preferred stock and

subordinated debt.

Capital Planning and Stress Testing Process. As part of

capital planning, we project sources and uses of capital given

a range of business environments, including stressed

conditions. Our stress testing process is designed to identify

and measure material risks associated with our business

activities, including market risk, credit risk, operational risk

and liquidity risk, as well as our ability to generate revenues.

Our capital planning process incorporates an internal capital

adequacy assessment with the objective of ensuring that we

are appropriately capitalized relative to the risks in our

businesses. We incorporate stress scenarios into our capital

planning process with a goal of holding sufficient capital to

ensure we remain adequately capitalized after experiencing a

severe stress event. Our assessment of capital adequacy is

viewed in tandem with our assessment of liquidity adequacy

and is integrated into our overall risk management structure,

governance and policy framework.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis

Goldman Sachs 2022 Form 10-K 83

Our stress tests incorporate our internally designed stress

scenarios, including our internally developed severely adverse

scenario, and those required by the FRB, and are designed to

capture our specific vulnerabilities and risks. We provide

further information about our stress test processes and a

summary of the results on our website as described in

“Business — Available Information” in Part I, Item 1 of this

Form 10-K.

As required by the FRB’s CCAR rules, we submit an annual

capital plan for review by the FRB. The purpose of the FRB’s

review is to ensure that we have a robust, forward-looking

capital planning process that accounts for our unique risks

and that permits continued operation during times of

economic and financial stress.

The FRB evaluates us based, in part, on whether we have the

capital necessary to continue operating under the baseline

and severely adverse scenarios provided by the FRB and those

developed internally. This evaluation also takes into account

our process for identifying risk, our controls and governance

for capital planning, and our guidelines for making capital

planning decisions. In addition, the FRB evaluates our plan to

make capital distributions (i.e., dividend payments and

repurchases or redemptions of stock, subordinated debt or

other capital securities) and issue capital, across the range of

macroeconomic scenarios and firm-specific assumptions. The

FRB determines the stress capital buffer (SCB) applicable to

us based on its own annual stress test. The SCB under the

Standardized approach is calculated as (i) the difference

between our starting and minimum projected CET1 capital

ratios under the supervisory severely adverse scenario and (ii)

our planned common stock dividends for each of the fourth

through seventh quarters of the planning horizon, expressed

as a percentage of risk-weighted assets (RWAs).

Based on our 2022 CCAR submission, the FRB reduced our

SCB from 6.4% to 6.3% for the period from October 1, 2022

through September 30, 2023. As a result, beginning on

October 1, 2022, our Standardized CET1 capital ratio

requirement was 13.3%. Additionally, effective January 1,

2023, our G-SIB surcharge increased from 2.5% to 3.0%,

resulting in a Standardized CET1 capital ratio requirement of

13.8%. See “Share Repurchase Program” for further

information about common stock repurchases and dividends

and “Consolidated Regulatory Capital” for further

information about the G-SIB surcharge. We published a

summary of our annual DFAST results in June 2022. See

“Business — Available Information” in Part I, Item 1 of this

Form 10-K.

GS Bank USA is required to conduct stress tests on an annual

basis and publish a summary of certain results. GS Bank USA

published a summary of its annual DFAST results in June

2022. See “Business — Available Information” in Part I, Item

1 of this Form 10-K.

GSI, GSIB and GSBE also have their own capital planning

and stress testing processes, which incorporate internally

designed stress tests developed in accordance with the

guidelines of their respective regulators.

Contingency Capital Plan. As part of our comprehensive

capital management policy, we maintain a contingency

capital plan. Our contingency capital plan provides a

framework for analyzing and responding to a perceived or

actual capital deficiency, including, but not limited to,

identification of drivers of a capital deficiency, as well as

mitigants and potential actions. It outlines the appropriate

communication procedures to follow during a crisis period,

including internal dissemination of information, as well as

timely communication with external stakeholders.

Capital Attribution. We assess the capital usage of each of

our businesses based on our attributed equity framework.

This framework considers many factors, including our

internal assessment of risks as well as the regulatory capital

requirements related to our business activities. These

regulatory capital requirements take into consideration our

most binding capital constraints. Our most binding capital

constraint is our CET1 capital ratio requirement under the

Standardized Capital Rules. This requirement includes the

SCB which is determined by the FRB based on its own annual

stress test.

Share Repurchase Program. We use our share repurchase

program to help maintain the appropriate level of common

equity. The repurchase program is effected primarily through

regular open-market purchases (which may include

repurchase plans designed to comply with Rule 10b5-1 and

accelerated share repurchases), the amounts and timing of

which are determined primarily by our current and projected

capital position and our capital plan submitted to the FRB as

part of CCAR. The amounts and timing of the repurchases

may also be influenced by general market conditions and the

prevailing price and trading volumes of our common stock.

In the third quarter of 2022, the Board of Directors of Group

Inc. (Board) approved an increase in our common stock

dividend from $2.00 to $2.50 per share. During 2022, we

returned a total of $6.70 billion to shareholders, including

common stock repurchases of $3.50 billion and common

stock dividends of $3.20 billion. During the fourth quarter of

2022, we returned a total of $2.38 billion to shareholders,

including common stock repurchases of $1.50 billion and

common stock dividends of $880 million. Consistent with our

capital management philosophy, we will continue prioritizing

deployment of capital for our clients where returns are

attractive and return any excess capital to shareholders

through dividends and share repurchases. During the first

quarter of 2023 through February 23, 2023, our common

stock repurchases were approximately $2.25 billion.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis

Goldman Sachs 2022 Form 10-K

See “Market for Registrant’s Common Equity, Related

Stockholder Matters and Issuer Purchases of Equity

Securities” in Part II, Item 5 of this Form 10-K and Note 19 to

the consolidated financial statements for further information

about our share repurchase program, and see above for

information about our capital planning and stress testing

process.

In August 2022, the Inflation Reduction Act of 2022

introduced a one percent non-deductible excise tax (buyback

tax) on the fair market value of certain corporate share

repurchases after December 31, 2022. The fair market value

of share repurchases subject to the tax is reduced by the fair

market value of any stock issued during the calendar year,

including stock issued to employees. Based on our current

understanding, we do not expect the buyback tax to have a

material impact on our financial condition, results of

operations or cash flows in 2023.

Resolution Capital Models. In connection with our

resolution planning efforts, we have established a Resolution

Capital Adequacy and Positioning framework, which is

designed to ensure that our major subsidiaries (GS Bank

USA, Goldman Sachs & Co. LLC (GS&Co.), GSI, GSIB,

GSBE, Goldman Sachs Japan Co., Ltd. (GSJCL), Goldman

Sachs Asset Management, L.P. and Goldman Sachs Asset

Management International) have access to sufficient loss-

absorbing capacity (in the form of equity, subordinated debt

and unsecured senior debt) so that they are able to wind

down following a Group Inc. bankruptcy filing in accordance

with our preferred resolution strategy.

In addition, we have established a triggers and alerts

framework, which is designed to provide the Board with

information needed to make an informed decision on

whether and when to commence bankruptcy proceedings for

Group Inc.

Rating Agency Guidelines

The credit rating agencies assign credit ratings to the

obligations of Group Inc., which directly issues or guarantees

substantially all of our senior unsecured debt obligations.

GS&Co. and GSI have been assigned long- and short-term

issuer ratings by certain credit rating agencies. GS Bank USA,

GSIB and GSBE have also been assigned long- and short-term

issuer ratings, as well as ratings on their long- and short-term

bank deposits. In addition, credit rating agencies have

assigned ratings to debt obligations of certain other

subsidiaries of Group Inc.

The level and composition of our capital are among the many

factors considered in determining our credit ratings. Each

agency has its own definition of eligible capital and

methodology for evaluating capital adequacy, and

assessments are generally based on a combination of factors

rather than a single calculation. See “Risk Management —

Liquidity Risk Management — Credit Ratings” for further

information about credit ratings of Group Inc., GS Bank

USA, GSIB, GSBE, GS&Co. and GSI.

Consolidated Regulatory Capital

We are subject to consolidated regulatory capital

requirements which are calculated in accordance with the

regulations of the FRB (Capital Framework). Under the

Capital Framework, we are an “Advanced approaches”

banking organization and have been designated as a G-SIB.

The capital requirements calculated under the Capital

Framework include the capital conservation buffer

requirements, which are comprised of a 2.5% buffer (under

the Advanced Capital Rules), the SCB (under the

Standardized Capital Rules), a countercyclical capital buffer

(under both Capital Rules) and the G-SIB surcharge (under

both Capital Rules). Our G-SIB surcharge was 2.5% for 2022

and is 3.0% for 2023 and 2024. The G-SIB surcharge and

countercyclical capital buffer in the future may differ due to

additional guidance from our regulators and/or positional

changes, and our SCB is likely to change from year to year

based on the results of the annual supervisory stress tests.

Our target is to maintain capital ratios equal to the

regulatory requirements plus a buffer of 50 to 100 basis

points.

See Note 20 to the consolidated financial statements for

further information about our risk-based capital ratios and

leverage ratios, and the Capital Framework.

Total Loss-Absorbing Capacity (TLAC)

We are also subject to the FRB’s TLAC and related

requirements. Failure to comply with the TLAC and related

requirements would result in restrictions being imposed by

the FRB and could limit our ability to repurchase shares, pay

dividends and make certain discretionary compensation

payments.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis

Goldman Sachs 2022 Form 10-K 85

The table below presents TLAC and external long-term debt

requirements.

Requirements

TLAC to RWAs 21.5%

TLAC to leverage exposure 9.5%

External long-term debt to RWAs 8.5%

External long-term debt to leverage exposure 4.5%

In the table above:

• The TLAC to RWAs requirement included (i) the 18%

minimum, (ii) the 2.5% buffer, (iii) the countercyclical

capital buffer, which the FRB has set to zero percent and

(iv) the 1.0% G-SIB surcharge (Method 1). Beginning in

January 2023, our TLAC to RWAs requirement increased

to 22.0%.

• The TLAC to leverage exposure requirement includes (i)

the 7.5% minimum and (ii) the 2.0% leverage exposure

buffer.

• The external long-term debt to RWAs requirement

includes (i) the 6% minimum and (ii) the 2.5% G-SIB

surcharge (Method 2). Beginning in January 2023, our

external long-term debt to RWAs requirement increased to

9.0%.

• The external long-term debt to total leverage exposure is

the 4.5% minimum.

The table below presents information about our TLAC and

external long-term debt ratios.

For the Three Months

Ended or as of December

$ in millions 2022 2021

TLAC $ 297,100 $ 297,765

External long-term debt $ 172,845 $ 174,500

RWAs $ 679,450 $ 676,863

Leverage exposure $ 1,867,358 $ 1,910,521

TLAC to RWAs 43.7% 44.0%

TLAC to leverage exposure 15.9% 15.6%

External long-term debt to RWAs 25.4% 25.8%

External long-term debt to leverage exposure 9.3% 9.1%

In the table above:

• TLAC includes common and preferred stock, and eligible

long-term debt issued by Group Inc. Eligible long-term

debt represents unsecured debt, which has a remaining

maturity of at least one year and satisfies additional

requirements.

• External long-term debt consists of eligible long-term debt

subject to a haircut if it is due to be paid between one and

two years.

• RWAs represent Advanced RWAs as of December 2022

and Standardized RWAs as of December 2021. In

accordance with the TLAC rules, the higher of Advanced

or Standardized RWAs are used in the calculation of TLAC

and external long-term debt ratios and applicable

requirements.

• Leverage exposure consists of average adjusted total assets

and certain off-balance sheet exposures.

In the second half of 2022, based on regulatory feedback, we

revised certain interpretations of the Capital Rules underlying

the calculation of Standardized RWAs. As of December 2021,

this change would have reduced our TLAC to RWAs ratio of

44.0% by 0.8 percentage points and our External long-term

debt to RWAs ratio of 25.8% by 0.5 percentage points.

See “Business — Regulation” in Part I, Item 1 of this Form

10-K for further information about TLAC.

Subsidiary Capital Requirements

Many of our subsidiaries, including our bank and broker-

dealer subsidiaries, are subject to separate regulation and

capital requirements of the jurisdictions in which they

operate.

Bank Subsidiaries. GS Bank USA is our primary U.S.

banking subsidiary and GSIB and GSBE are our primary non-

U.S. banking subsidiaries. These entities are subject to

regulatory capital requirements. See Note 20 to the

consolidated financial statements for further information

about the regulatory capital requirements of our bank

subsidiaries.

U.S. Regulated Broker-Dealer Subsidiaries. GS&Co.,

our primary U.S. regulated broker-dealer subsidiary, is also a

registered futures commission merchant and a registered

swap dealer with the CFTC, and a registered security-based

swap dealer with the SEC, and therefore is subject to

regulatory capital requirements imposed by the SEC, the

Financial Industry Regulatory Authority, Inc., the CFTC, the

Chicago Mercantile Exchange and the National Futures

Association. Rule 15c3-1 of the SEC and Rules 1.17 and Part

23 Subpart E of the CFTC specify uniform minimum net

capital requirements, as defined, for their registrants, and

also effectively require that a significant part of the

registrants’ assets be kept in relatively liquid form. GS&Co.

has elected to calculate its minimum capital requirements in

accordance with the “Alternative Net Capital Requirement”

as permitted by Rule 15c3-1 of the SEC.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis

Goldman Sachs 2022 Form 10-K

GS&Co. had regulatory net capital, as defined by Rule

15c3-1, of $22.21 billion as of December 2022 and

$22.18 billion as of December 2021, which exceeded the

amount required by $17.46billion as of December 2022 and

$17.74 billion as of December 2021. In addition to its

alternative minimum net capital requirements, GS&Co. is

also required to hold tentative net capital in excess of

$5billion and net capital in excess of $1billion in accordance

with Rule 15c3-1. GS&Co. is also required to notify the SEC

in the event that its tentative net capital is less than $6billion.

As of both December 2022 and December 2021, GS&Co. had

tentative net capital and net capital in excess of both the

minimum and the notification requirements.

Non-U.S. Regulated Broker-Dealer Subsidiaries. Our

principal non-U.S. regulated broker-dealer subsidiaries

include GSI and GSJCL.

GSI, our U.K. broker-dealer, is regulated by the Prudential

Regulation Authority (PRA) and the Financial Conduct

Authority (FCA). GSI is subject to the U.K. capital

framework, which is largely based on the Basel Committee

on Banking Supervision’s (Basel Committee) capital

framework for strengthening international capital standards

(Basel III).

The table below presents GSI’s risk-based capital

requirements.

As of December

2022 2021

Risk-based capital requirements

CET1 capital ratio 8.7% 8.1%

Tier 1 capital ratio 10.7% 9.9%

Total capital ratio 13.3% 12.4%

In the table above, the risk-based capital requirements

incorporate capital guidance received from the PRA and

could change in the future.

The table below presents information about GSI’s risk-based

capital ratios.

As of December

$ in millions 2022 2021

Risk-based capital and risk-weighted assets

CET1 capital $ 31,780 $ 28,810

Tier 1 capital $ 40,080 $ 37,110

Tier 2 capital $ 5,377 $ 5,377

Total capital $ 45,457 $ 42,487

RWAs $ 247,653 $ 269,762

Risk-based capital ratios

CET1 capital ratio 12.8% 10.7%

Tier 1 capital ratio 16.2% 13.8%

Total capital ratio 18.4% 15.7%

In the table above, the risk-based capital ratios as of

December 2022 reflected profits after foreseeable charges that

are still subject to audit by GSI’s external auditors and

approval by GSI's Board of Directors for inclusion in risk-

based capital. These profits contributed approximately 9

basis points to the CET1 capital ratio as of December 2022.

GSI is also subject to the minimum leverage ratio

requirement of 3.25% established by the PRA, which became

effective in January 2023. GSI had a leverage ratio of 6.1% as

of December 2022. The leverage ratio as of December 2022

reflected profits after foreseeable charges that are still subject

to audit by GSI’s external auditors and approval by GSI's

Board of Directors for inclusion in risk-based capital. These

profits contributed approximately 7 basis points to the

leverage ratio as of December 2022.

GSI is a registered swap dealer with the CFTC and a

registered security-based swap dealer with the SEC. As of

both December 2022 and December 2021, GSI was subject to

and in compliance with applicable capital requirements for

swap dealers and security-based swap dealers.

GSI is also subject to a minimum requirement for own funds

and eligible liabilities issued to affiliates. This requirement is

subject to a transitional period which began to phase in from

January 2019 and became fully effective beginning in January

2022. As of both December 2022 and December 2021, GSI

was in compliance with this requirement.

GSJCL, our Japanese broker-dealer, is regulated by Japan’s

Financial Services Agency. GSJCL and certain other non-U.S.

subsidiaries are also subject to capital requirements

promulgated by authorities of the countries in which they

operate. As of both December 2022 and December 2021,

these subsidiaries were in compliance with their local capital

requirements.

Regulatory and Other Matters

Regulatory Matters

Our businesses are subject to extensive regulation and

supervision worldwide. Regulations have been adopted or are

being considered by regulators and policy makers worldwide.

Given that many of the new and proposed rules are highly

complex, the full impact of regulatory reform will not be

known until the rules are implemented and market practices

develop under the final regulations.

See “Business — Regulation” in Part I, Item 1 of this Form

10-K for further information about the laws, rules and

regulations and proposed laws, rules and regulations that

apply to us and our operations.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis

Goldman Sachs 2022 Form 10-K 87

Other Matters

Replacement of Interbank Offered Rates (IBORs),

including LIBOR. On January 1, 2022, the publication of all

EUR, CHF, JPY and GBP LIBOR (non-USD LIBOR) settings

along with certain USD LIBOR settings ceased. The

publication of the most commonly used USD LIBOR settings

as representative rates will cease after June 2023. The FCA

has allowed the publication and use of synthetic rates for

certain GBP LIBOR settings in legacy GBP LIBOR-based

derivative contracts through March 2024. The FCA has

proposed to allow the publication and use of synthetic rates

for certain USD LIBOR settings in legacy USD LIBOR-based

derivative contracts through September 2024. The U.S.

federal banking agencies’ guidance strongly encourages

banking organizations to cease using USD LIBOR.

The International Swaps and Derivatives Association (ISDA)

2020 IBOR Fallbacks Protocol (IBOR Protocol) has provided

derivatives market participants with amended fallbacks for

legacy and new derivative contracts to mitigate legal or

economic uncertainty. Both counterparties have to adhere to

the IBOR Protocol or engage in bilateral amendments for the

terms to be effective for derivative contracts. ISDA has

confirmed that the FCA’s formal announcement to cease both

non-USD and USD LIBOR settings fixed the spread

adjustment for all LIBOR rates and as a result fallbacks

applied automatically for non-USD LIBOR settings following

December 31, 2021 and will apply automatically for USD

LIBOR settings following June 30, 2023. The Adjustable

Interest Rate (LIBOR) Act, that was enacted in March 2022,

provides a statutory framework to replace USD LIBOR with

a benchmark rate based on the Secured Overnight Financing

Rate (SOFR) for contracts governed by U.S. law that have no

fallbacks or fallbacks that would require the use of a poll or

LIBOR-based rate. In December 2022, the FRB adopted a

final rule that implements the LIBOR Act, which will become

effective on February 27, 2023. The final rule identifies

different SOFR-based replacement rates for derivative

contracts, for cash instruments such as floating-rate notes

and preferred stock, for consumer contracts, for certain

government-sponsored enterprise contracts and for certain

student loan securitizations that lack a fallback to an

alternative rate when USD LIBOR ceases to be published on

June 30, 2023.

We facilitated an orderly transition from non-USD LIBORs

to alternative risk-free reference rates and synthetic rates for

us and our clients, and continue to make progress on our

transition program as it relates to USD LIBOR.

Our risk exposure to USD LIBOR is primarily in connection

with our derivative contracts and, to a lesser extent, our

unsecured debt, preferred stock and loan portfolio. As of

December 2022, the notional amount of our USD LIBOR-

based derivative contracts was approximately $6 trillion, of

which approximately $5 trillion will mature after June 2023

based on their contractual terms. Substantially all of such

derivative contracts are with counterparties under bilateral

agreements subject to the IBOR Protocol, or with central

clearing counterparties or exchanges which have

incorporated fallbacks consistent with the IBOR Protocol in

their rulebooks and have announced that they plan to convert

USD LIBOR contracts to alternative risk-free reference rates.

Our unsecured benchmark debt and preferred stock with

USD LIBOR exposure was approximately $29.0billion as of

December 2022, of which $26.4 billion will contractually

mature after June 2023 or is perpetual and has no stated

maturity date. Under the FRB’s final rule and the LIBOR Act,

we will replace our USD LIBOR-based unsecured benchmark

debt and preferred stock with term SOFR plus the statutorily

prescribed tenor spread. This transition will take place

following USD LIBOR cessation on June 30, 2023. In

addition, our USD LIBOR-based loans were approximately

$33.1 billion as of December 2022, of which approximately

$30.5 billion will mature after June 2023 based on their

contractual terms. A vast majority of such loans contain

fallback provisions in the related loan agreements and we are

actively engaging with our clients and syndicate partners to

remediate the remaining loans agreements.

We have also issued debt and deposits linked to SOFR and

Sterling Overnight Index Average (SONIA) and executed

SOFR- and SONIA-based derivative contracts to make

markets and facilitate client activities. When appropriate, we

continue to execute transactions in the market to reduce our

USD LIBOR exposures arising from hedges to our fixed-rate

debt issuances and replace them with alternative risk-free

reference rate exposures.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis

Goldman Sachs 2022 Form 10-K

Off-Balance Sheet Arrangements

In the ordinary course of business, we enter into various types

of off-balance sheet arrangements. Our involvement in these

arrangements can take many different forms, including:

• Purchasing or retaining residual and other interests in

special purpose entities, such as mortgage-backed and

other asset-backed securitization vehicles;

• Holding senior and subordinated debt, interests in limited

and general partnerships, and preferred and common stock

in other nonconsolidated vehicles;

• Entering into interest rate, foreign currency, equity,

commodity and credit derivatives, including total return

swaps; and

• Providing guarantees, indemnifications, commitments,

letters of credit and representations and warranties.

We enter into these arrangements for a variety of business

purposes, including securitizations. The securitization

vehicles that purchase mortgages, corporate bonds and other

types of financial assets are critical to the functioning of

several significant investor markets, including the mortgage-

backed and other asset-backed securities markets, since they

offer investors access to specific cash flows and risks created

through the securitization process.

We also enter into these arrangements to underwrite client

securitization transactions; provide secondary market

liquidity; make investments in performing and

nonperforming debt, distressed loans, power-related assets,

equity securities, real estate and other assets; and provide

investors with credit-linked and asset-repackaged notes.

The table below presents where information about our

various off-balance sheet arrangements may be found in this

Form 10-K. In addition, see Note 3 to the consolidated

financial statements for information about our consolidation

policies.

Off-Balance Sheet Arrangement Disclosure in Form 10-K

Variable interests and other

obligations, including contingent

obligations, arising from variable

interests in nonconsolidated

variable interest entities (VIEs)

See Note 17 to the consolidated

financial statements.

Guarantees, and lending and other

commitments

See Note 18 to the consolidated

financial statements.

Derivatives

See “Risk Management —

Credit Risk Management —

Credit Exposures — OTC

Derivatives” and Notes 4, 5, 7

and 18 to the consolidated

financial statements.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis

Goldman Sachs 2022 Form 10-K 89

Risk Management

Risks are inherent in our businesses and include liquidity,

market, credit, operational, model, legal, compliance,

conduct, regulatory and reputational risks. For further

information about our risk management processes, see

“Overview and Structure of Risk Management,” and for

information about our areas of risk, see “Liquidity Risk

Management,” “Market Risk Management,” “Credit Risk

Management,” “Operational Risk Management,” “Model

Risk Management” and “Other Risk Management,” as well

as “Risk Factors” in Part I, Item 1A of this Form 10-K.

Overview and Structure of Risk Management

Overview

We believe that effective risk management is critical to our

success. Accordingly, we have established an enterprise risk

management framework that employs a comprehensive,

integrated approach to risk management, and is designed to

enable comprehensive risk management processes through

which we identify, assess, monitor and manage the risks we

assume in conducting our activities. Our risk management

structure is built around three core components: governance,

processes and people.

Governance. Risk management governance starts with the

Board, which both directly and through its committees,

including its Risk Committee, oversees our risk management

policies and practices implemented through the enterprise

risk management framework. The Board is also responsible

for the annual review and approval of our risk appetite

statement. The risk appetite statement describes the levels

and types of risk we are willing to accept or to avoid, in order

to achieve our objectives included in our strategic business

plan, while remaining in compliance with regulatory

requirements. The Board reviews our strategic business plan

and is ultimately responsible for overseeing and providing

direction about our strategy and risk appetite.

The Board receives regular briefings on firmwide risks,

including liquidity risk, market risk, credit risk, operational

risk, model risk and climate risk, from our independent risk

oversight and control functions, including the chief risk

officer, and on compliance risk and conduct risk from

Compliance, on legal and regulatory enforcement matters

from the chief legal officer, and on other matters impacting

our reputation from the chair and vice-chairs of our

Firmwide Reputational Risk Committee. The chief risk

officer reports to our chief executive officer and to the Risk

Committee of the Board. As part of the review of the

firmwide risk portfolio, the chief risk officer regularly advises

the Risk Committee of the Board of relevant risk metrics and

material exposures, including risk limits and thresholds

established in our risk appetite statement.

The implementation of our risk governance structure and

core risk management processes is overseen by Enterprise

Risk, which reports to our chief risk officer, and is

responsible for ensuring that our enterprise risk management

framework provides the Board, our risk committees and

senior management with a consistent and integrated

approach to managing our various risks in a manner

consistent with our risk appetite.

Our revenue-producing units, as well as Treasury,

Engineering, Human Capital Management, Operations, and

Corporate and Workplace Solutions, are considered our first

line of defense. They are accountable for the outcomes of our

risk-generating activities, as well as for assessing and

managing those risks within our risk appetite.

Our independent risk oversight and control functions are

considered our second line of defense and provide

independent assessment, oversight and challenge of the risks

taken by our first line of defense, as well as lead and

participate in risk committees. Independent risk oversight

and control functions include Compliance, Conflicts

Resolution, Controllers, Legal, Risk and Tax.

Internal Audit is considered our third line of defense, and our

director of Internal Audit reports to the Audit Committee of

the Board and administratively to our chief executive officer.

Internal Audit includes professionals with a broad range of

audit and industry experience, including risk management

expertise. Internal Audit is responsible for independently

assessing and validating the effectiveness of key controls,

including those within the risk management framework, and

providing timely reporting to the Audit Committee of the

Board, senior management and regulators.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis

Goldman Sachs 2022 Form 10-K

The three lines of defense structure promotes the

accountability of first line risk takers, provides a framework

for effective challenge by the second line and empowers

independent review from the third line.

Processes. We maintain various processes that are critical

components of our risk management framework, including

(i) risk identification and control assessment, (ii) risk

appetite, limit and threshold setting, (iii) risk metrics,

reporting and monitoring, and (iv) risk decision-making.

• Risk Identification and Control Assessment. We

believe the identification of our risks and related control

assessment is a critical step in providing our Board and

senior management transparency and insight into the range

and materiality of our risks. We have a comprehensive data

collection process, including firmwide policies and

procedures that require all employees to report and escalate

risk events. Our approach for risk identification and

control assessment is comprehensive across all risk types, is

dynamic and forward-looking to reflect and adapt to our

changing risk profile and business environment, leverages

subject matter expertise, and allows for prioritization of

our most critical risks. This approach also encompasses

our control assessment, led by our second line of defense,

to review and challenge the control environment to ensure

it supports our strategic business plan.

To effectively assess our risks, we maintain a daily

discipline of marking substantially all of our inventory to

current market levels. We carry our inventory at fair value,

with changes in valuation reflected immediately in our risk

management systems and in net revenues. We do so

because we believe this discipline is one of the most

effective tools for assessing and managing risk and that it

provides transparent and realistic insight into our inventory

exposures.

An important part of our risk management process is

firmwide stress testing. It allows us to quantify our

exposure to tail risks, highlight potential loss

concentrations, undertake risk/reward analysis, and assess

and mitigate our risk positions. Firmwide stress tests are

performed on a regular basis and are designed to ensure a

comprehensive analysis of our vulnerabilities and

idiosyncratic risks combining financial and nonfinancial

risks, including, but not limited to, credit, market, liquidity

and funding, operational and compliance, strategic,

systemic and emerging risks into a single combined

scenario. We also perform ad hoc stress tests in

anticipation of market events or conditions. Stress tests are

also used to assess capital adequacy as part of our capital

planning and stress testing process. See “Capital

Management and Regulatory Capital — Capital

Management” for further information.

• Risk Appetite, Limit and Threshold Setting. We apply

a rigorous framework of limits and thresholds to control

and monitor risk across transactions, products, businesses

and markets. The Board, directly or indirectly through its

Risk Committee, approves limits and thresholds included

in our risk appetite statement at firmwide, business and

product levels. In addition, the Firmwide Risk Appetite

Committee, through delegated authority from the

Firmwide Enterprise Risk Committee, is responsible for

approving our risk limits and thresholds policy, subject to

the overall limits approved by the Risk Committee of the

Board, and monitoring these limits.

The Firmwide Risk Appetite Committee is responsible for

approving limits at firmwide, business and product levels.

Certain limits may be set at levels that will require periodic

adjustment, rather than at levels that reflect our maximum

risk appetite. This fosters an ongoing dialogue about risk

among our first and second lines of defense, committees

and senior management, as well as rapid escalation of risk-

related matters. Additionally, through delegated authority

from the Firmwide Risk Appetite Committee, Market Risk

sets limits at certain product and desk levels, and Credit

Risk sets limits for individual counterparties and their

subsidiaries, industries and countries. Limits are reviewed

regularly and amended on a permanent or temporary basis

to reflect changing market conditions, business conditions

or risk tolerance.

• Risk Metrics, Reporting and Monitoring. Effective risk

reporting and risk decision-making depends on our ability

to get the right information to the right people at the right

time. As such, we focus on the rigor and effectiveness of

our risk systems, with the objective of ensuring that our

risk management technology systems provide us with

complete, accurate and timely information. Our risk

metrics, reporting and monitoring processes are designed to

take into account information about both existing and

emerging risks, thereby enabling our risk committees and

senior management to perform their responsibilities with

the appropriate level of insight into risk exposures.

Furthermore, our limit and threshold breach processes

provide means for timely escalation. We evaluate changes

in our risk profile and our businesses, including changes in

business mix or jurisdictions in which we operate, by

monitoring risk factors at a firmwide level.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis

Goldman Sachs 2022 Form 10-K 91

• Risk Decision-Making. Our governance structure

provides the protocol and responsibility for decision-

making on risk management issues and ensures

implementation of those decisions. We make extensive use

of risk committees that meet regularly and serve as an

important means to facilitate and foster ongoing

discussions to manage and mitigate risks.

We maintain strong and proactive communication about

risk and we have a culture of collaboration in decision-

making among our first and second lines of defense,

committees and senior management. While our first line of

defense is responsible for management of their risk, we

dedicate extensive resources to our second line of defense in

order to ensure a strong oversight structure and an

appropriate segregation of duties. We regularly reinforce

our strong culture of escalation and accountability across

all functions.

People. Even the best technology serves only as a tool for

helping to make informed decisions in real time about the

risks we are taking. Ultimately, effective risk management

requires our people to interpret our risk data on an ongoing

and timely basis and adjust risk positions accordingly. The

experience of our professionals, and their understanding of

the nuances and limitations of each risk measure, guides us in

assessing exposures and maintaining them within prudent

levels.

We reinforce a culture of effective risk management,

consistent with our risk appetite, in our training and

development programs, as well as in the way we evaluate

performance, and recognize and reward our people. Our

training and development programs, including certain

sessions led by our most senior leaders, are focused on the

importance of risk management, client relationships and

reputational excellence. As part of our performance review

process, we assess reputational excellence, including how an

employee exercises good risk management and reputational

judgment, and adheres to our code of conduct and

compliance policies. Our review and reward processes are

designed to communicate and reinforce to our professionals

the link between behavior and how people are recognized,

the need to focus on our clients and our reputation, and the

need to always act in accordance with our highest standards.

Structure

Ultimate oversight of risk is the responsibility of our Board.

The Board oversees risk both directly and through its

committees, including its Risk Committee. We also have a

series of committees with specific risk management mandates

that have oversight or decision-making responsibilities for

risk management activities. Committee membership generally

consists of senior managers from both our first and second

lines of defense. We have established procedures for these

committees to ensure that appropriate information barriers

are in place. Our primary risk committees, most of which

also have additional sub-committees, councils or working

groups, are described below. In addition to these committees,

we have other risk committees that provide oversight for

different businesses, activities, products, regions and entities.

All of our committees have responsibility for considering the

impact on our reputation of the transactions and activities

that they oversee.

Membership of our risk committees is reviewed regularly and

updated to reflect changes in the responsibilities of the

committee members. Accordingly, the length of time that

members serve on the respective committees varies as

determined by the committee chairs and based on the

responsibilities of the members.

The chart below presents an overview of our risk

management governance structure.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis

Goldman Sachs 2022 Form 10-K

Management Committee. The Management Committee

oversees our global activities. It provides this oversight

directly and through authority delegated to committees it has

established. This committee consists of our most senior

leaders, and is chaired by our chief executive officer. Most

members of the Management Committee are also members of

other committees. The following are the committees that are

principally involved in firmwide risk management.

Firmwide Enterprise Risk Committee. The Firmwide

Enterprise Risk Committee is responsible for overseeing all of

our financial and nonfinancial risks. As part of such

oversight, the committee is responsible for the ongoing

review, approval and monitoring of our enterprise risk

management framework, as well as our risk limits and

thresholds policy, through delegated authority to the

Firmwide Risk Appetite Committee. This committee also

reviews new significant strategic business initiatives to

determine whether they are consistent with our risk appetite

and risk management capabilities. Additionally, the

Firmwide Enterprise Risk Committee performs enhanced

reviews of significant risk events, the top residual and

emerging risks, and the overall risk and control environment

in each of our business units in order to propose uplifts,

identify elements that are common to all business units and

analyze the consolidated residual risks that we face. This

committee, which reports to the Management Committee, is

co-chaired by our president and chief operating officer and

our chief risk officer, who are appointed as chairs by our

chief executive officer, and the vice-chair is our chief financial

officer, who is appointed as vice-chair by the chairs of the

Firmwide Enterprise Risk Committee. The following are the

primary committees or councils that report to the Firmwide

Enterprise Risk Committee (unless otherwise noted):

• Firmwide Risk Council. The Firmwide Risk Council is

responsible for the ongoing monitoring of relevant

financial risks and related risk limits at the firmwide,

business and product levels. This council is co-chaired by

our chief financial officer and our chief risk officer.

• Firmwide New Activity Committee. The Firmwide

New Activity Committee is responsible for reviewing new

activities and for establishing a process to identify and

review previously approved activities that are significant

and that have changed in complexity and/or structure or

present different reputational and suitability concerns over

time to consider whether these activities remain

appropriate. This committee is co-chaired by our controller

and chief accounting officer and our chief operating and

strategy officer for Engineering, who are appointed as

chairs by the chairs of the Firmwide Enterprise Risk

Committee.

• Firmwide Operational Risk and Resilience

Committee. The Firmwide Operational Risk and

Resilience Committee is responsible for overseeing

operational risk, and for ensuring our business and

operational resilience. To assist the Firmwide Operational

Risk and Resilience Committee in carrying out its mandate,

other risk committees with dedicated oversight for

technology-related risks, including cybersecurity matters,

report into the Firmwide Operational Risk and Resilience

Committee. This committee is co-chaired by our chief

administrative officer for EMEA and our head of

Operational Risk, who are appointed as chairs by the

chairs of the Firmwide Enterprise Risk Committee.

• Firmwide Conduct Committee. The Firmwide Conduct

Committee is responsible for the ongoing approval and

monitoring of the frameworks and policies which govern

our conduct risks. Conduct risk is the risk that our people

fail to act in a manner consistent with our Business

Principles and related core values, policies or codes, or

applicable laws or regulations, thereby falling short in

fulfilling their responsibilities to us, our clients, colleagues,

other market participants or the broader community. This

committee is chaired by our chief legal officer, who is

appointed as chair by the chairs of the Firmwide Enterprise

Risk Committee.

• Firmwide Risk Appetite Committee. The Firmwide

Risk Appetite Committee (through delegated authority

from the Firmwide Enterprise Risk Committee) is

responsible for the ongoing approval and monitoring of

risk frameworks, policies and parameters related to our

core risk management processes, as well as limits and

thresholds, at firmwide, business and product levels. In

addition, this committee is responsible for overseeing our

financial risks and reviews the results of stress tests and

scenario analyses. To assist the Firmwide Risk Appetite

Committee in carrying out its mandate, a number of other

risk committees with dedicated oversight for stress testing,

model risks, Volcker Rule compliance, as well as our

investments or other capital commitments that may give

rise to financial risk, report into the Firmwide Risk

Appetite Committee. This committee is chaired by our

chief risk officer, who is appointed as chair by the chairs of

the Firmwide Enterprise Risk Committee. The Firmwide

Capital Committee and Firmwide Commitments

Committee report to the Firmwide Risk Appetite

Committee.

Firmwide Capital Committee. The Firmwide Capital

Committee provides approval and oversight of debt-related

transactions, including principal commitments of our

capital. This committee aims to ensure that business,

reputational and suitability standards for underwritings

and capital commitments are maintained on a global basis.

This committee is co-chaired by our head of Credit Risk

and a co-head of our Global Financing Group, who are

appointed as chairs by the chair of the Firmwide Risk

Appetite Committee.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis

Goldman Sachs 2022 Form 10-K 93

Firmwide Commitments Committee. The Firmwide

Commitments Committee reviews our underwriting and

distribution activities with respect to equity and equity-

related product offerings, and sets and maintains policies

and procedures designed to ensure that legal, reputational,

regulatory and business standards are maintained on a

global basis. In addition to reviewing specific transactions,

this committee periodically conducts general strategic

reviews of sectors and products and establishes policies in

connection with transaction practices. This committee is

co-chaired by our chief equity underwriting officer for the

Americas, a co-chairman of our Global Financial

Institutions Group and a co-head of our Global Investment

Grade Capital Markets and Risk Management Group in

Global Banking & Markets, who are appointed as chairs

by the chair of the Firmwide Risk Appetite Committee.

• Firmwide Reputational Risk Committee. The

Firmwide Reputational Risk Committee is responsible for

assessing reputational risks arising from transactions that

have been identified as having potential heightened

reputational risk pursuant to the criteria established by the

Firmwide Reputational Risk Committee and as determined

by committee leadership. This committee is also

responsible for overseeing client-related business standards

and addressing client-related reputational risk. This

committee is chaired by our president and chief operating

officer, who is appointed as chair by our chief executive

officer, and the vice-chairs are our chief legal officer and

the head of Conflicts Resolution, who are appointed as

vice-chairs by the chair of the Firmwide Reputational Risk

Committee. This committee periodically provides updates

to, and receives guidance from, the Public Responsibilities

Committee of the Board. The Firmwide Suitability

Committee reports to the Firmwide Reputational Risk

Committee.

Firmwide Suitability Committee. The Firmwide

Suitability Committee is responsible for setting standards

and policies for product, transaction and client suitability

and providing a forum for consistency across functions,

regions and products on suitability assessments. This

committee also reviews suitability matters escalated from

other committees. This committee is co-chaired by our

chief compliance officer, and the head of Net Zero

Transition Solutions in Global Banking & Markets, who

are appointed as chairs by the chair of the Firmwide

Reputational Risk Committee.

Firmwide Asset Liability Committee. The Firmwide

Asset Liability Committee reviews and approves the strategic

direction for our financial resources, including capital,

liquidity, funding and balance sheet. This committee has

oversight responsibility for asset liability management,

including interest rate and currency risk, funds transfer

pricing, capital allocation and incentives, and credit ratings.

This committee makes recommendations as to any

adjustments to asset liability management and financial

resource allocation in light of current events, risks,

exposures, and regulatory requirements and approves related

policies. This committee is co-chaired by our chief financial

officer and our global treasurer, who are appointed as chairs

by our chief executive officer, and reports to the

Management Committee.

Liquidity Risk Management

Overview

Liquidity risk is the risk that we will be unable to fund

ourselves or meet our liquidity needs in the event of firm-

specific, broader industry or market liquidity stress events.

We have in place a comprehensive and conservative set of

liquidity and funding policies. Our principal objective is to be

able to fund ourselves and to enable our core businesses to

continue to serve clients and generate revenues, even under

adverse circumstances.

Treasury, which reports to our chief financial officer, has

primary responsibility for developing, managing and

executing our liquidity and funding strategy within our risk

appetite.

Liquidity Risk, which is independent of our revenue-

producing units and Treasury, and reports to our chief risk

officer, has primary responsibility for identifying, monitoring

and managing our liquidity risk through firmwide oversight

across our global businesses and the establishment of stress

testing and limits frameworks.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis

Goldman Sachs 2022 Form 10-K

Liquidity Risk Management Principles

We manage liquidity risk according to three principles: (i)

hold sufficient excess liquidity in the form of GCLA to cover

outflows during a stressed period, (ii) maintain appropriate

Asset-Liability Management and (iii) maintain a viable

Contingency Funding Plan.

GCLA. GCLA is liquidity that we maintain to meet a broad

range of potential cash outflows and collateral needs in a

stressed environment. A primary liquidity principle is to pre-

fund our estimated potential cash and collateral needs during

a liquidity crisis and hold this liquidity in the form of

unencumbered, highly liquid securities and cash. We believe

that the securities held in our GCLA would be readily

convertible to cash in a matter of days, through liquidation,

by entering into repurchase agreements or from maturities of

resale agreements, and that this cash would allow us to meet

immediate obligations without needing to sell other assets or

depend on additional funding from credit-sensitive markets.

Our GCLA reflects the following principles:

• The first days or weeks of a liquidity crisis are the most

critical to a company’s survival;

• Focus must be maintained on all potential cash and

collateral outflows, not just disruptions to financing flows.

Our businesses are diverse, and our liquidity needs are

determined by many factors, including market movements,

collateral requirements and client commitments, all of

which can change dramatically in a difficult funding

environment;

• During a liquidity crisis, credit-sensitive funding, including

unsecured debt, certain deposits and some types of secured

financing agreements, may be unavailable, and the terms

(e.g., interest rates, collateral provisions and tenor) or

availability of other types of secured financing may change

and certain deposits may be withdrawn; and

• As a result of our policy to pre-fund liquidity that we

estimate may be needed in a crisis, we hold more

unencumbered securities and have larger funding balances

than our businesses would otherwise require. We believe

that our liquidity is stronger with greater balances of highly

liquid unencumbered securities, even though it increases

our total assets and our funding costs.

We maintain our GCLA across Group Inc., Goldman Sachs

Funding LLC (Funding IHC) and Group Inc.’s major broker-

dealer and bank subsidiaries, asset types and clearing agents

to provide us with sufficient operating liquidity to ensure

timely settlement in all major markets, even in a difficult

funding environment. In addition to the GCLA, we maintain

cash balances and securities in several of our other entities,

primarily for use in specific currencies, entities or

jurisdictions where we do not have immediate access to

parent company liquidity.

Asset-Liability Management. Our liquidity risk

management policies are designed to ensure we have a

sufficient amount of financing, even when funding markets

experience persistent stress. We manage the maturities and

diversity of our funding across markets, products and

counterparties, and seek to maintain a diversified funding

profile with an appropriate tenor, taking into consideration

the characteristics and liquidity profile of our assets.

Our approach to asset-liability management includes:

• Conservatively managing the overall characteristics of our

funding book, with a focus on maintaining long-term,

diversified sources of funding in excess of our current

requirements. See “Balance Sheet and Funding Sources —

Funding Sources” for further information;

• Actively managing and monitoring our asset base, with

particular focus on the liquidity, holding period and ability

to fund assets on a secured basis. We assess our funding

requirements and our ability to liquidate assets in a stressed

environment while appropriately managing risk. This

enables us to determine the most appropriate funding

products and tenors. See “Balance Sheet and Funding

Sources — Balance Sheet Management” for further

information about our balance sheet management process

and “— Funding Sources — Secured Funding” for further

information about asset classes that may be harder to fund

on a secured basis; and

• Raising secured and unsecured financing that has a long

tenor relative to the liquidity profile of our assets. This

reduces the risk that our liabilities will come due in

advance of our ability to generate liquidity from the sale of

our assets. Because we maintain a highly liquid balance

sheet, the holding period of certain of our assets may be

materially shorter than their contractual maturity dates.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis

Goldman Sachs 2022 Form 10-K 95

Our goal is to ensure that we maintain sufficient liquidity to

fund our assets and meet our contractual and contingent

obligations in normal times, as well as during periods of

market stress. Through our dynamic balance sheet

management process, we use actual and projected asset

balances to determine secured and unsecured funding

requirements. Funding plans are reviewed and approved by

the Firmwide Asset Liability Committee. In addition, our

independent risk oversight and control functions analyze, and

the Firmwide Asset Liability Committee reviews, our

consolidated total capital position (unsecured long-term

borrowings plus total shareholders’ equity) so that we

maintain a level of long-term funding that is sufficient to

meet our long-term financing requirements. In a liquidity

crisis, we would first use our GCLA in order to avoid reliance

on asset sales (other than our GCLA). However, we recognize

that orderly asset sales may be prudent or necessary in a

severe or persistent liquidity crisis.

Subsidiary Funding Policies

The majority of our unsecured funding is raised by Group

Inc., which provides the necessary funds to Funding IHC and

other subsidiaries, some of which are regulated, to meet their

asset financing, liquidity and capital requirements. In

addition, Group Inc. provides its regulated subsidiaries with

the necessary capital to meet their regulatory requirements.

The benefits of this approach to subsidiary funding are

enhanced control and greater flexibility to meet the funding

requirements of our subsidiaries. Funding is also raised at the

subsidiary level through a variety of products, including

deposits, secured funding and unsecured borrowings.

Our intercompany funding policies assume that a subsidiary’s

funds or securities are not freely available to its parent,

Funding IHC or other subsidiaries unless (i) legally provided

for and (ii) there are no additional regulatory, tax or other

restrictions. In particular, many of our subsidiaries are

subject to laws that authorize regulatory bodies to block or

reduce the flow of funds from those subsidiaries to Group

Inc. or Funding IHC. Regulatory action of that kind could

impede access to funds that Group Inc. needs to make

payments on its obligations. Accordingly, we assume that the

capital provided to our regulated subsidiaries is not available

to Group Inc. or other subsidiaries and any other financing

provided to our regulated subsidiaries is not available to

Group Inc. or Funding IHC until the maturity of such

financing.

Group Inc. has provided substantial amounts of equity and

subordinated indebtedness, directly or indirectly, to its

regulated subsidiaries. For example, as of December 2022,

Group Inc. had $39.33 billion of equity and subordinated

indebtedness invested in GS&Co., its principal U.S.

registered broker-dealer; $47.74 billion invested in GSI, a

regulated U.K. broker-dealer; $2.62 billion invested in

GSJCL, a regulated Japanese broker-dealer; $52.55 billion

invested in GS Bank USA, a regulated New York State-

chartered bank; and $4.25 billion invested in GSIB, a

regulated U.K. bank. Group Inc. also provides financing,

directly or indirectly, in the form of: $108.14 billion of

unsubordinated loans (including secured loans of

$52.93 billion) and $30.16 billion of collateral and cash

deposits to these entities as of December 2022. In addition, as

of December 2022, Group Inc. had significant amounts of

capital invested in and loans to its other regulated

subsidiaries.

Contingency Funding Plan. We maintain a contingency

funding plan to provide a framework for analyzing and

responding to a liquidity crisis situation or periods of market

stress. Our contingency funding plan outlines a list of

potential risk factors, key reports and metrics that are

reviewed on an ongoing basis to assist in assessing the

severity of, and managing through, a liquidity crisis and/or

market dislocation. The contingency funding plan also

describes in detail our potential responses if our assessments

indicate that we have entered a liquidity crisis, which include

pre-funding for what we estimate will be our potential cash

and collateral needs, as well as utilizing secondary sources of

liquidity. Mitigants and action items to address specific risks

which may arise are also described and assigned to

individuals responsible for execution.

The contingency funding plan identifies key groups of

individuals and their responsibilities, which include fostering

effective coordination, control and distribution of

information, implementing liquidity maintenance activities

and managing internal and external communication, all of

which are critical in the management of a crisis or period of

market stress.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis

Goldman Sachs 2022 Form 10-K

Stress Tests

In order to determine the appropriate size of our GCLA, we

model liquidity outflows over a range of scenarios and time

horizons. One of our primary internal liquidity risk models,

referred to as the Modeled Liquidity Outflow, quantifies our

liquidity risks over a 30-day stress scenario. We also consider

other factors, including, but not limited to, an assessment of

our potential intraday liquidity needs through an additional

internal liquidity risk model, referred to as the Intraday

Liquidity Model, the results of our long-term stress testing

models, our resolution liquidity models and other applicable

regulatory requirements and a qualitative assessment of our

condition, as well as the financial markets. The results of the

Modeled Liquidity Outflow, the Intraday Liquidity Model,

the long-term stress testing models and the resolution

liquidity models are reported to senior management on a

regular basis. We also perform firmwide stress tests. See

“Overview and Structure of Risk Management” for

information about firmwide stress tests.

Modeled Liquidity Outflow. Our Modeled Liquidity

Outflow is based on conducting multiple scenarios that

include combinations of market-wide and firm-specific stress.

These scenarios are characterized by the following qualitative

elements:

• Severely challenged market environments, which include

low consumer and corporate confidence, financial and

political instability, and adverse changes in market values,

including potential declines in equity markets and widening

of credit spreads; and

• A firm-specific crisis potentially triggered by material

losses, reputational damage, litigation and/or a ratings

downgrade.

The following are key modeling elements of our Modeled

Liquidity Outflow:

• Liquidity needs over a 30-day scenario;

• A two-notch downgrade of our long-term senior unsecured

credit ratings;

• Changing conditions in funding markets, which limit our

access to unsecured and secured funding;

• No support from additional government funding facilities.

Although we have access to various central bank funding

programs, we do not assume reliance on additional sources

of funding in a liquidity crisis; and

• A combination of contractual outflows and contingent

outflows arising from both our on- and off-balance sheet

arrangements. Contractual outflows include, among other

things, upcoming maturities of unsecured debt, term

deposits and secured funding. Contingent outflows include,

among other things, the withdrawal of customer credit

balances in our prime brokerage business, increase in

variation margin requirements due to adverse changes in

the value of our exchange-traded and OTC-cleared

derivatives, draws on unfunded commitments and

withdrawals of deposits that have no contractual maturity.

See notes to the consolidated financial statements for

further information about contractual outflows, including

Note 11 for collateralized financings, Note 13 for deposits,

Note 14 for unsecured long-term borrowings and Note 15

for operating lease payments, and “Off-Balance Sheet

Arrangements” for further information about our various

types of off-balance sheet arrangements.

Intraday Liquidity Model. Our Intraday Liquidity Model

measures our intraday liquidity needs using a scenario

analysis characterized by the same qualitative elements as our

Modeled Liquidity Outflow. The model assesses the risk of

increased intraday liquidity requirements during a scenario

where access to sources of intraday liquidity may become

constrained.

Long-Term Stress Testing. We utilize longer-term stress

tests to take a forward view on our liquidity position through

prolonged stress periods in which we experience a severe

liquidity stress and recover in an environment that continues

to be challenging. We are focused on ensuring conservative

asset-liability management to prepare for a prolonged period

of potential stress, seeking to maintain a diversified funding

profile with an appropriate tenor, taking into consideration

the characteristics and liquidity profile of our assets.

Resolution Liquidity Models. In connection with our

resolution planning efforts, we have established our

Resolution Liquidity Adequacy and Positioning framework,

which estimates liquidity needs of our major subsidiaries in a

stressed environment. The liquidity needs are measured using

our Modeled Liquidity Outflow assumptions and include

certain additional inter-affiliate exposures. We have also

established our Resolution Liquidity Execution Need

framework, which measures the liquidity needs of our major

subsidiaries to stabilize and wind down following a Group

Inc. bankruptcy filing in accordance with our preferred

resolution strategy.

In addition, we have established a triggers and alerts

framework, which is designed to provide the Board with

information needed to make an informed decision on

whether and when to commence bankruptcy proceedings for

Group Inc.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis

Goldman Sachs 2022 Form 10-K 97

Limits

We use liquidity risk limits at various levels and across

liquidity risk types to manage the size of our liquidity

exposures. Limits are measured relative to acceptable levels

of risk given our liquidity risk tolerance. See “Overview and

Structure of Risk Management” for information about the

limit approval process.

Limits are monitored by Treasury and Liquidity Risk.

Liquidity Risk is responsible for identifying and escalating to

senior management and/or the appropriate risk committee,

on a timely basis, instances where limits have been exceeded.

GCLA and Unencumbered Metrics

GCLA. Based on the results of our internal liquidity risk

models, described above, as well as our consideration of

other factors, including, but not limited to, a qualitative

assessment of our condition, as well as the financial markets,

we believe our liquidity position as of both December 2022

and December 2021 was appropriate. We strictly limit our

GCLA to a narrowly defined list of securities and cash

because they are highly liquid, even in a difficult funding

environment. We do not include other potential sources of

excess liquidity in our GCLA, such as less liquid

unencumbered securities or committed credit facilities.

The table below presents information about our GCLA.

Average for the

Three Months Year Ended

Ended December December

$ in millions

2022 2021 2022 2021

Denomination

U.S. dollar $ 312,414 $ 230,720 $ 281,427 $ 217,797

Non-U.S. dollar 96,404 122,401 116,655 116,723

Total $ 408,818 $ 353,121 $ 398,082 $ 334,520

Asset Class

Overnight cash deposits $ 217,141 $ 188,223 $ 228,203 $ 173,000

U.S. government obligations 149,519 107,898 126,349 108,260

U.S. agency obligations 12,789 13,154 11,007 10,183

Non-U.S. government obligations

29,369 43,846 32,523 43,077

Total $ 408,818 $ 353,121 $ 398,082 $ 334,520

Entity Type

Group Inc. and Funding IHC $ 69,386 $ 54,489 $ 64,579 $ 53,205

Major broker-dealer subsidiaries 109,502 107,279 113,887 104,326

Major bank subsidiaries 229,930 191,353 219,616 176,989

Total $ 408,818 $ 353,121 $ 398,082 $ 334,520

In the table above:

• The U.S. dollar-denominated GCLA consists of (i)

unencumbered U.S. government and agency obligations

(including highly liquid U.S. agency mortgage-backed

obligations), all of which are eligible as collateral in Federal

Reserve open market operations and (ii) certain overnight

U.S. dollar cash deposits.

• The non-U.S. dollar-denominated GCLA consists of non-

U.S. government obligations (only unencumbered German,

French, Japanese and U.K. government obligations) and

certain overnight cash deposits in highly liquid currencies.

We maintain our GCLA to enable us to meet current and

potential liquidity requirements of our parent company,

Group Inc., and its subsidiaries. Our Modeled Liquidity

Outflow and Intraday Liquidity Model incorporate a

requirement for Group Inc., as well as a standalone

requirement for each of our major broker-dealer and bank

subsidiaries. Funding IHC is required to provide the

necessary liquidity to Group Inc. during the ordinary course

of business, and is also obligated to provide capital and

liquidity support to major subsidiaries in the event of our

material financial distress or failure. Liquidity held directly in

each of our major broker-dealer and bank subsidiaries is

intended for use only by that subsidiary to meet its liquidity

requirements and is assumed not to be available to Group

Inc. or Funding IHC unless (i) legally provided for and (ii)

there are no additional regulatory, tax or other restrictions.

In addition, the Modeled Liquidity Outflow and Intraday

Liquidity Model also incorporate a broader assessment of

standalone liquidity requirements for other subsidiaries and

we hold a portion of our GCLA directly at Group Inc. or

Funding IHC to support such requirements.

Other Unencumbered Assets. In addition to our GCLA,

we have a significant amount of other unencumbered cash

and financial instruments, including other government

obligations, high-grade money market securities, corporate

obligations, marginable equities, loans and cash deposits not

included in our GCLA. The fair value of our unencumbered

assets averaged $273.49 billion for the three months ended

December 2022, $271.65 billion for the three months ended

December 2021, $275.69 billion for the year ended December

2022 and $249.32 billion for the year ended December 2021.

We do not consider these assets liquid enough to be eligible

for our GCLA.

Liquidity Regulatory Framework

As a BHC, we are subject to a minimum Liquidity Coverage

Ratio (LCR) under the LCR rule approved by the U.S. federal

bank regulatory agencies. The LCR rule requires

organizations to maintain an adequate ratio of eligible high-

quality liquid assets (HQLA) to expected net cash outflows

under an acute, short-term liquidity stress scenario. Eligible

HQLA excludes HQLA held by subsidiaries that is in excess

of their minimum requirement and is subject to transfer

restrictions. We are required to maintain a minimum LCR of

100%. We expect that fluctuations in client activity, business

mix and the market environment will impact our LCR.

The table below presents information about our average

daily LCR.

Average for the

Three Months Ended

December September December

$ in millions 2022 2022 2021

Total HQLA $ 401,836 $ 407,969 $ 342,047

Eligible HQLA $ 291,118 $ 279,121 $ 248,570

Net cash outflows $ 226,532 $ 224,408 $ 203,623

LCR 129% 124% 122%

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis

Goldman Sachs 2022 Form 10-K

As a BHC, we are subject to a net stable funding ratio

(NSFR) requirement established by the U.S. federal bank

regulatory agencies, which requires large U.S. banking

organizations to ensure they have access to stable funding

over a one-year time horizon. The rule also requires

disclosure of our quarterly average daily NSFR on a semi-

annual basis and a description of the banking organization’s

stable funding sources. We will begin doing so in August

2023. Our NSFR as of December 2022 exceeded the minimum

requirement.

The following provides information about our subsidiary

liquidity regulatory requirements:

• GS Bank USA. GS Bank USA is subject to a minimum

LCR of 100% under the LCR rule approved by the U.S.

federal bank regulatory agencies. As of December 2022, GS

Bank USA’s LCR exceeded the minimum requirement. The

NSFR requirement described above also applies to GS

Bank USA. As of December 2022, GS Bank USA’s NSFR

exceeded the minimum requirement.

• GSI and GSIB. GSI and GSIB are subject to a minimum

LCR of 100% under the LCR rule approved by the U.K.

regulatory authorities. GSI’s and GSIB’s average monthly

LCR for the trailing twelve-month period ended December

2022 exceeded the minimum requirement. GSI and GSIB

are subject to the applicable NSFR requirement in the U.K.

As of December 2022, both GSI’s and GSIB’s NSFR

exceeded the minimum requirement.

• GSBE. GSBE is subject to a minimum LCR of 100% under

the LCR rule approved by the European Parliament and

Council. GSBE’s average monthly LCR for the trailing

twelve-month period ended December 2022 exceeded the

minimum requirement. GSBE is subject to the applicable

NSFR requirement in the E.U. As of December 2022,

GSBE’s NSFR exceeded the minimum requirement.

• Other Subsidiaries. We monitor local regulatory

liquidity requirements of our subsidiaries to ensure

compliance. For many of our subsidiaries, these

requirements either have changed or are likely to change in

the future due to the implementation of the Basel

Committee’s framework for liquidity risk measurement,

standards and monitoring, as well as other regulatory

developments.

The implementation of these rules and any amendments

adopted by the regulatory authorities could impact our

liquidity and funding requirements and practices in the

future.

Credit Ratings

We rely on the short- and long-term debt capital markets to

fund a significant portion of our day-to-day operations and

the cost and availability of debt financing is influenced by our

credit ratings. Credit ratings are also important when we are

competing in certain markets, such as OTC derivatives, and

when we seek to engage in longer-term transactions. See

“Risk Factors” in Part I, Item 1A of this Form 10-K for

information about the risks associated with a reduction in

our credit ratings.

The table below presents the unsecured credit ratings and

outlook of Group Inc.

As of December 2022

DBRS Fitch Moody’s R&I S&P

Short-term debt R-1 (middle) F1 P-1 a-1 A-2

Long-term debt A (high) A A2 A BBB+

Subordinated debt A BBB+ Baa2 A- BBB

Trust preferred A BBB- Baa3 N/A BB+

Preferred stock BBB (high) BBB- Ba1 N/A BB+

Ratings outlook Stable Stable Stable Stable Stable

In the table above:

• The ratings and outlook are by DBRS, Inc. (DBRS), Fitch,

Inc. (Fitch), Moody’s Investors Service (Moody’s), Rating

and Investment Information, Inc. (R&I), and Standard &

Poor’s Ratings Services (S&P).

• The ratings for trust preferred relate to the guaranteed

preferred beneficial interests issued by Goldman Sachs

Capital I.

• The DBRS, Fitch, Moody’s and S&P ratings for preferred

stock include the APEX issued by Goldman Sachs Capital

II and Goldman Sachs Capital III.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis

Goldman Sachs 2022 Form 10-K 99

The table below presents the unsecured credit ratings and

outlook of GS Bank USA, GSIB, GSBE, GS&Co. and GSI.

As of December 2022

Fitch Moody’s S&P

GS Bank USA

Short-term debt F1 P-1 A-1

Long-term debt A+ A1 A+

Short-term bank deposits F1+ P-1 N/A

Long-term bank deposits AA- A1 N/A

Ratings outlook Stable Stable Stable

GSIB

Short-term debt F1 P-1 A-1

Long-term debt A+ A1 A+

Short-term bank deposits F1 P-1 N/A

Long-term bank deposits A+ A1 N/A

Ratings outlook Stable Stable Stable

GSBE

Short-term debt F1 P-1 A-1

Long-term debt A+ A1 A+

Short-term bank deposits N/A P-1 N/A

Long-term bank deposits N/A A1 N/A

Ratings outlook Stable Stable Stable

GS&Co.

Short-term debt F1 N/A A-1

Long-term debt A+ N/A A+

Ratings outlook Stable N/A Stable

GSI

Short-term debt F1 P-1 A-1

Long-term debt A+ A1 A+

Ratings outlook Stable Stable Stable

We believe our credit ratings are primarily based on the

credit rating agencies’ assessment of:

• Our liquidity, market, credit and operational risk

management practices;

• Our level and variability of earnings;

• Our capital base;

• Our franchise, reputation and management;

• Our corporate governance; and

• The external operating and economic environment,

including, in some cases, the assumed level of government

support or other systemic considerations, such as potential

resolution.

Certain of our derivatives have been transacted under

bilateral agreements with counterparties who may require us

to post collateral or terminate the transactions based on

changes in our credit ratings. We manage our GCLA to

ensure we would, among other potential requirements, be

able to make the additional collateral or termination

payments that may be required in the event of a two-notch

reduction in our long-term credit ratings, as well as collateral

that has not been called by counterparties, but is available to

them.

See Note 7 to the consolidated financial statements for

further information about derivatives with credit-related

contingent features and the additional collateral or

termination payments related to our net derivative liabilities

under bilateral agreements that could have been called by

counterparties in the event of a one- or two-notch downgrade

in our credit ratings.

Cash Flows

As a global financial institution, our cash flows are complex

and bear little relation to our net earnings and net assets.

Consequently, we believe that traditional cash flow analysis

is less meaningful in evaluating our liquidity position than the

liquidity and asset-liability management policies described

above. Cash flow analysis may, however, be helpful in

highlighting certain macro trends and strategic initiatives in

our businesses.

Year Ended December 2022. Our cash and cash

equivalents decreased by $19.21 billion to $241.83 billion at

the end of 2022, primarily due to net cash used for investing

activities, partially offset by net cash provided by financing

activities. The net cash used for investing activities primarily

reflected purchases of investments (primarily U.S.

government obligations accounted for as held-to-maturity)

and an increase in net lending activities (reflecting increases

in other collateralized and consumer loans). The net cash

provided by financing activities primarily reflected cash

inflows from net issuances of unsecured long-term

borrowings and deposits (reflecting increases in transaction

banking and private bank and consumer deposits, partially

offset by a decrease in other deposits). The net cash provided

by operating activities primarily reflected cash inflows from

trading assets and liabilities, customer and other receivables

and payables, net (reflecting both a decrease in customer and

other receivables and an increase in customer and other

payables), net earnings and loans held for sale, net, partially

offset by cash outflows from collateralized transactions

(reflecting both a decrease in collateralized financings and an

increase in collateralized agreements). The decrease in cash

and cash equivalents as a result of changes in foreign

exchange rates was due to the U.S. dollar strengthening

during the year. Such amount was $11.56 billion for 2022

($3.42 billion for the three months ended March 2022, $10.34

billion for the six months ended June 2022 and $18.17 billion

for the nine months ended September 2022).

Year Ended December 2021. Our cash and cash

equivalents increased by $105.19 billion to $261.04 billion at

the end of 2021, primarily due to net cash provided by

financing activities, partially offset by net cash used for

investing activities. The net cash provided by financing

activities primarily reflected an increase in net deposits

(reflecting increases across channels) and net issuances of

unsecured long-term borrowings. The net cash used for

investing activities primarily reflected purchases of

investments and an increase in net lending activities, partially

offset by sales and paydowns of investments.

For an analysis of cash flows for the year ended December

2020, see Part II, Item 7 "Management's Discussion and

Analysis of Financial Condition and Results of Operations"

in our Annual Report on Form 10-K for the year ended

December 31, 2021.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis

100

Goldman Sachs 2022 Form 10-K

Market Risk Management

Overview

Market risk is the risk of an adverse impact to our earnings

due to changes in market conditions. Our assets and

liabilities that give rise to market risk primarily include

positions held for market making for our clients and for our

investing and financing activities, and these positions change

based on client demands and our investment opportunities.

We employ a variety of risk measures, each described in the

respective sections below, to monitor market risk. Categories

of market risk include the following:

• Interest rate risk: results from exposures to changes in the

level, slope and curvature of yield curves, the volatilities of

interest rates, prepayment speeds and credit spreads;

• Equity price risk: results from exposures to changes in

prices and volatilities of individual equities, baskets of

equities and equity indices;

• Currency rate risk: results from exposures to changes in

spot prices, forward prices and volatilities of currency

rates; and

• Commodity price risk: results from exposures to changes in

spot prices, forward prices and volatilities of commodities,

such as crude oil, petroleum products, natural gas,

electricity, and precious and base metals.

Market Risk, which is independent of our revenue-producing

units and reports to our chief risk officer, has primary

responsibility for assessing, monitoring and managing our

market risk through firmwide oversight across our global

businesses.

Managers in revenue-producing units, Treasury and Market

Risk discuss market information, positions and estimated

loss scenarios on an ongoing basis. Managers in revenue-

producing units and Treasury are accountable for managing

risk within prescribed limits. These managers have in-depth

knowledge of their positions, markets and the instruments

available to hedge their exposures.

Market Risk Management Process

Our process for managing market risk includes the critical

components of our risk management framework described in

the “Overview and Structure of Risk Management,” as well

as the following:

• Monitoring compliance with established market risk limits

and reporting our exposures;

• Diversifying exposures;

• Controlling position sizes; and

• Evaluating mitigants, such as economic hedges in related

securities or derivatives.

Our market risk management systems enable us to perform

an independent calculation of Value-at-Risk (VaR), Earnings-

at-Risk (EaR) and other stress measures, capture risk

measures at individual position levels, attribute risk measures

to individual risk factors of each position, report many

different views of the risk measures (e.g., by desk, business,

product type or entity) and produce ad hoc analyses in a

timely manner.

Risk Measures

We produce risk measures and monitor them against

established market risk limits. These measures reflect an

extensive range of scenarios and the results are aggregated at

product, business and firmwide levels.

We use a variety of risk measures to estimate the size of

potential losses for both moderate and more extreme market

moves over both short- and long-term time horizons. Our

primary risk measures are VaR, EaR and other stress tests.

Our risk reports detail key risks, drivers and changes for each

desk and business, and are distributed daily to senior

management of both our revenue-producing units and our

independent risk oversight and control functions.

Value-at-Risk. VaR is the potential loss in value due to

adverse market movements over a defined time horizon with

a specified confidence level. For assets and liabilities included

in VaR, see “Financial Statement Linkages to Market Risk

Measures.” We typically employ a one-day time horizon with

a 95% confidence level. We use a single VaR model, which

captures risks, including interest rates, equity prices, currency

rates and commodity prices. As such, VaR facilitates

comparison across portfolios of different risk characteristics.

VaR also captures the diversification of aggregated risk at the

firmwide level.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis

Goldman Sachs 2022 Form 10-K 101

We are aware of the inherent limitations to VaR and

therefore use a variety of risk measures in our market risk

management process. Inherent limitations to VaR include:

• VaR does not estimate potential losses over longer time

horizons where moves may be extreme;

• VaR does not take account of the relative liquidity of

different risk positions; and

• Previous moves in market risk factors may not produce

accurate predictions of all future market moves.

To comprehensively capture our exposures and relevant risks

in our VaR calculation, we use historical simulations with

full valuation of market factors at the position level by

simultaneously shocking the relevant market factors for that

position. These market factors include spot prices, credit

spreads, funding spreads, yield curves, volatility and

correlation, and are updated periodically based on changes in

the composition of positions, as well as variations in market

conditions. We sample from five years of historical data to

generate the scenarios for our VaR calculation. The historical

data is weighted so that the relative importance of the data

reduces over time. This gives greater importance to more

recent observations and reflects current asset volatilities,

which improves the accuracy of our estimates of potential

loss. As a result, even if our positions included in VaR were

unchanged, our VaR would increase with increasing market

volatility and vice versa.

Given its reliance on historical data, VaR is most effective in

estimating risk exposures in markets in which there are no

sudden fundamental changes or shifts in market conditions.

Our VaR measure does not include:

• Positions that are not accounted for at fair value, such as

held-to-maturity securities and loans, deposits and

unsecured borrowings that are accounted for at amortized

cost;

• Available-for-sale securities for which the related

unrealized fair value gains and losses are included in

accumulated other comprehensive income/(loss);

• Positions that are best measured and monitored using

sensitivity measures; and

• The impact of changes in counterparty and our own credit

spreads on derivatives, as well as changes in our own credit

spreads on financial liabilities for which the fair value

option was elected.

We perform daily backtesting of our VaR model (i.e.,

comparing daily net revenues for positions included in VaR

to the VaR measure calculated as of the prior business day) at

the firmwide level and for each of our businesses and major

regulated subsidiaries.

Earnings-at-Risk. Beginning in the fourth quarter of 2022,

we started managing our interest rate risk using the EaR

metric. EaR measures the estimated impact of changes in

interest rates to our net revenues and preferred stock

dividends over a defined time horizon. EaR complements the

VaR metric, which measures the impact of interest rate

changes that have an immediate impact on the fair values of

our assets and liabilities (i.e., mark-to-market changes). Our

exposure to interest rate risk occurs due to a variety of

factors, including, but not limited to:

• Differences in maturity or repricing dates of assets,

liabilities, preferred stock and certain off-balance sheet

instruments.

• Differences in the amounts of assets, liabilities, preferred

stock and certain off-balance sheet instruments with the

same maturity or repricing dates.

• Certain interest rate sensitive fees.

Treasury manages the aggregated interest rate risk from all

businesses through our investment securities portfolio and

interest rate derivatives. We measure EaR over a one-year

time horizon following a 100-basis point instantaneous

parallel shock in both short- and long-term interest rates.

This sensitivity is calculated relative to a baseline market

scenario, which takes into consideration, among other things,

the market’s expectation of forward rates, as well as our

expectation of future business activity. This scenario includes

contractual elements of assets, liabilities, preferred stock, and

certain off-balance sheet instruments, such as rates of

interest, principal repayment schedules, maturity and reset

dates, and any interest rate ceilings or floors, as well as

assumptions with respect to our balance sheet size and

composition, deposit repricing and prepayment behavior. We

manage EaR with a goal to reduce potential volatility

resulting from changes in interest rates so it remains within

our EaR risk appetite. Our EaR scenario is regularly

evaluated and updated, if necessary, to reflect changes in our

business plans, market conditions and other macroeconomic

factors. While management uses the best information

available to estimate EaR, actual results may differ materially

as a result of, among other things, changes in the economic

environment or assumptions used in the process.

Risk, which is independent of our revenue-producing units,

and Treasury, have primary responsibility for assessing and

monitoring EaR through firmwide oversight, including

oversight of EaR stress testing and assumptions, and the

establishment of our EaR risk appetite.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis

102

Goldman Sachs 2022 Form 10-K

Stress Testing. Stress testing is a method of determining the

effect of various hypothetical stress scenarios. In addition to

EaR, we use other stress tests to examine risks of specific

portfolios, as well as the potential impact of our significant

risk exposures. We use a variety of stress testing techniques

to calculate the potential loss from a wide range of market

moves on our portfolios, including firmwide stress tests,

sensitivity analysis and scenario analysis. The results of our

various stress tests are analyzed together for risk

management purposes. See “Overview and Structure of Risk

Management” for information about firmwide stress tests.

Sensitivity analysis is used to quantify the impact of a market

move in a single risk factor across all positions (e.g., equity

prices or credit spreads) using a variety of defined market

shocks, ranging from those that could be expected over a

one-day time horizon up to those that could take many

months to occur. We also use sensitivity analysis to quantify

the impact of the default of any single entity, which captures

the risk of large or concentrated exposures.

Scenario analysis is used to quantify the impact of a specified

event, including how the event impacts multiple risk factors

simultaneously. For example, for sovereign stress testing we

calculate potential direct exposure associated with our

sovereign positions, as well as the corresponding debt, equity

and currency exposures associated with our non-sovereign

positions that may be impacted by the sovereign distress.

When conducting scenario analysis, we often consider a

number of possible outcomes for each scenario, ranging from

moderate to severely adverse market impacts. In addition,

these stress tests are constructed using both historical events

and forward-looking hypothetical scenarios.

Unlike VaR measures, which have an implied probability

because they are calculated at a specified confidence level,

there may not be an implied probability that our stress testing

scenarios will occur. Instead, stress testing is used to model

both moderate and more extreme moves in underlying

market factors. When estimating potential loss, we generally

assume that our positions cannot be reduced or hedged

(although experience demonstrates that we are generally able

to do so).

Limits

We use market risk limits at various levels to manage the size

of our market exposures. These limits are set based on VaR,

EaR and on a range of stress tests relevant to our exposures.

See “Overview and Structure of Risk Management” for

information about the limit approval process.

Limits are monitored by Treasury and Risk. Risk is

responsible for identifying and escalating to senior

management and/or the appropriate risk committee, on a

timely basis, instances where limits have been exceeded (e.g.,

due to positional changes or changes in market conditions,

such as increased volatilities or changes in correlations). Such

instances are remediated by a reduction in the positions we

hold and/or a temporary or permanent increase to the limit, if

warranted.

Metrics

We analyze VaR at the firmwide level and a variety of more

detailed levels, including by risk category, business and

region. Diversification effect in the tables below represents

the difference between total VaR and the sum of the VaRs for

the four risk categories. This effect arises because the four

market risk categories are not perfectly correlated.

The table below presents our average daily VaR.

Year Ended December

$ in millions 2022 2021

Categories

Interest rates $ 139 $ 57 $ 74 $ 49

Equity prices $ 48 $ 25 $ 71 $ 30

Currency rates $ 55 $ 16 $ 20 $ 8

Commodity prices $ 82 $ 18 $ 45 $ 14

Firmwide

VaR $ 158 $ 76 $ 105 $ 69

The chart below presents our daily VaR for 2022.

The table below presents, by number of business days, the

frequency distribution of our daily net revenues for positions

included in VaR.

Year Ended December

$ in millions 2022 2021

>$100 92 53

$75 – $100 25 45

$50 – $75 29 42

$25 – $50 33 33

$0 – $25 36 45

$(25) – $0 17 24

$(50) – $(25) 13 6

$(75) – $(50) 1 2

$(100) – $(75) 3 1

<$(100) 2 1

Total 251 252

Daily net revenues for positions included in VaR are

compared with VaR calculated as of the end of the prior

business day. Net losses incurred on a single day for such

positions exceeded our 95% one-day VaR (i.e., a VaR

exception) on two occasions during 2022 and on one occasion

during 2021.

During periods in which we have significantly more positive

net revenue days than net revenue loss days, we expect to

have fewer VaR exceptions because, under normal

conditions, our business model generally produces positive

net revenues. In periods in which our franchise revenues are

adversely affected, we generally have more loss days,

resulting in more VaR exceptions. The daily net revenues for

positions included in VaR used to determine VaR exceptions

reflect the impact of any intraday activity, including bid/offer

net revenues, which are more likely than not to be positive by

their nature.

Sensitivity Measures

Certain portfolios and individual positions are not included

in VaR because VaR is not the most appropriate risk

measure. Other sensitivity measures we use to analyze market

risk are described below.

10% Sensitivity Measures. The table below presents our

market risk by asset category for positions accounted for at

fair value, that are not included in VaR.

As of December

$ in millions 2022 2021

Equity $ 1,621 $ 1,953

Debt 1,986 2,244

Total $ 3,607 $ 4,197

In the table above:

• The market risk of these positions is determined by

estimating the potential reduction in net revenues of a 10%

decline in the value of these positions.

• Equity positions relate to private and restricted public

equity securities, including interests in funds that invest in

corporate equities and real estate and interests in hedge

funds.

• Debt positions include interests in funds that invest in

corporate mezzanine and senior debt instruments, loans

backed by commercial and residential real estate, corporate

bank loans and other corporate debt, including acquired

portfolios of distressed loans.

• Funded equity and debt positions are included in our

consolidated balance sheets in investments and loans. See

Note 8 to the consolidated financial statements for further

information about investments and Note 9 to the

consolidated financial statements for further information

about loans.

• These measures do not reflect the diversification effect

across asset categories or across other market risk

measures.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis

104

Goldman Sachs 2022 Form 10-K

Credit and Funding Spread Sensitivity on Derivatives

and Financial Liabilities. VaR excludes the impact of

changes in counterparty credit spreads, our own credit

spreads and unsecured funding spreads on derivatives, as well

as changes in our own credit spreads (debt valuation

adjustment) on financial liabilities for which the fair value

option was elected. The estimated sensitivity to a one basis

point increase in credit spreads (counterparty and our own)

and unsecured funding spreads on derivatives (including

hedges) was a loss of $1 million as of both December 2022

and December 2021. In addition, the estimated sensitivity to a

one basis point increase in our own credit spreads on

financial liabilities for which the fair value option was elected

was a gain of $37 million as of December 2022 and

$33 million as of December 2021. However, the actual net

impact of a change in our own credit spreads is also affected

by the liquidity, duration and convexity (as the sensitivity is

not linear to changes in yields) of those financial liabilities for

which the fair value option was elected, as well as the relative

performance of any hedges undertaken.

Earnings-at-Risk. The table below presents the impact of a

parallel shift in rates on our net revenues and preferred stock

dividends over the next 12 months relative to the baseline

scenario.

As of December

$ in millions 2022 2021

+100 basis points parallel shift in rates

$ 104 $ 782

-100 basis points parallel shift in rates

$ (104) N.M.

In the table above:

• The EaR metric utilized various assumptions, including,

among other things, balance sheet size and composition,

deposit repricing and prepayment behavior, all of which

have inherent uncertainties. The EaR metric does not

represent a forecast of our net revenues and preferred stock

dividends.

• The change in our sensitivities as of December 2022

compared to December 2021 primarily reflects the impact

of changes in our investment securities portfolio and

interest rate derivatives.

• The -100 basis points parallel shift in rates scenario was not

meaningful as of December 2021 given the low interest rate

environment.

Other Market Risk Considerations

We make investments in securities that are accounted for as

available-for-sale, held-to-maturity or under the equity

method which are included in investments in the consolidated

balance sheets. See Note 8 to the consolidated financial

statements for further information.

Direct investments in real estate are accounted for at cost less

accumulated depreciation. See Note 12 to the consolidated

financial statements for further information about other

assets.

Financial Statement Linkages to Market Risk

Measures

We employ a variety of risk measures, each described in the

respective sections above, to monitor market risk across the

consolidated balance sheets and consolidated statements of

earnings. The related gains and losses on these positions are

included in market making, other principal transactions,

interest income and interest expense in the consolidated

statements of earnings, and debt valuation adjustment and

unrealized gains/(losses) on available-for-sale securities in the

consolidated statements of comprehensive income.

The table below presents certain assets and liabilities

accounted for at fair value in our consolidated balance sheets

and the market risk measures used to assess those assets and

liabilities.

Assets or Liabilities Market Risk Measures

Collateralized agreements and financings VaR

Customer and other receivables

10% Sensitivity Measures

Trading assets and liabilities VaR

Credit Spread Sensitivity

Investments VaR

10% Sensitivity Measures

Loans VaR

10% Sensitivity Measures

Other assets and liabilities

VaR

Deposits

VaR

Credit Spread Sensitivity

Unsecured borrowings VaR

Credit Spread Sensitivity

In addition to the above, we measure the interest rate risk for

all positions within our consolidated balance sheets using the

EaR metric.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis

Goldman Sachs 2022 Form 10-K 105

Credit Risk Management

Overview

Credit risk represents the potential for loss due to the default

or deterioration in credit quality of a counterparty (e.g., an

OTC derivatives counterparty or a borrower) or an issuer of

securities or other instruments we hold. Our exposure to

credit risk comes mostly from client transactions in OTC

derivatives and loans and lending commitments. Credit risk

also comes from cash placed with banks, securities financing

transactions (i.e., resale and repurchase agreements and

securities borrowing and lending activities) and customer and

other receivables.

Credit Risk, which is independent of our revenue-producing

units and reports to our chief risk officer, has primary

responsibility for assessing, monitoring and managing our

credit risk through firmwide oversight across our global

businesses. In addition, we hold other positions that give rise

to credit risk (e.g., bonds and secondary bank loans). These

credit risks are captured as a component of market risk

measures, which are monitored and managed by Market

Risk. We also enter into derivatives to manage market risk

exposures. Such derivatives also give rise to credit risk, which

is monitored and managed by Credit Risk.

Credit Risk Management Process

Our process for managing credit risk includes the critical

components of our risk management framework described in

the “Overview and Structure of Risk Management,” as well

as the following:

• Monitoring compliance with established credit risk limits

and reporting our credit exposures and credit

concentrations;

• Establishing or approving underwriting standards;

• Assessing the likelihood that a counterparty will default on

its payment obligations;

• Measuring our current and potential credit exposure and

losses resulting from a counterparty default;

• Using credit risk mitigants, including collateral and

hedging; and

• Maximizing recovery through active workout and

restructuring of claims.

We also perform credit analyses, which incorporate initial

and ongoing evaluations of the capacity and willingness of a

counterparty to meet its financial obligations. For

substantially all of our credit exposures, the core of our

process is an annual counterparty credit evaluation or more

frequently if deemed necessary as a result of events or

changes in circumstances. We determine an internal credit

rating for the counterparty by considering the results of the

credit evaluations and assumptions with respect to the nature

of and outlook for the counterparty’s industry and the

economic environment. The internal credit rating does not

take into consideration collateral received or other credit

support arrangements. Senior personnel, with expertise in

specific industries, inspect and approve credit reviews and

internal credit ratings.

Our risk assessment process may also include, where

applicable, reviewing certain key metrics, including, but not

limited to, delinquency status, collateral value, FICO credit

scores and other risk factors.

Our credit risk management systems capture credit exposure

to individual counterparties and on an aggregate basis to

counterparties and their subsidiaries. These systems also

provide management with comprehensive information about

our aggregate credit risk by product, internal credit rating,

industry, country and region.

Risk Measures

We measure our credit risk based on the potential loss in the

event of non-payment by a counterparty using current and

potential exposure. For derivatives and securities financing

transactions, current exposure represents the amount

presently owed to us after taking into account applicable

netting and collateral arrangements, while potential exposure

represents our estimate of the future exposure that could

arise over the life of a transaction based on market

movements within a specified confidence level. Potential

exposure also takes into account netting and collateral

arrangements. For loans and lending commitments, the

primary measure is a function of the notional amount of the

position.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis

106

Goldman Sachs 2022 Form 10-K

Stress Tests

We conduct regular stress tests to calculate the credit

exposures, including potential concentrations that would

result from applying shocks to counterparty credit ratings or

credit risk factors (e.g., currency rates, interest rates, equity

prices). These shocks cover a wide range of moderate and

more extreme market movements, including shocks to

multiple risk factors, consistent with the occurrence of a

severe market or economic event. In the case of sovereign

default, we estimate the direct impact of the default on our

sovereign credit exposures, changes to our credit exposures

arising from potential market moves in response to the

default, and the impact of credit market deterioration on

corporate borrowers and counterparties that may result from

the sovereign default. Unlike potential exposure, which is

calculated within a specified confidence level, stress testing

does not generally assume a probability of these events

occurring. We also perform firmwide stress tests. See

“Overview and Structure of Risk Management” for

information about firmwide stress tests.

To supplement these regular stress tests, as described above,

we also conduct tailored stress tests on an ad hoc basis in

response to specific market events that we deem significant.

We also utilize these stress tests to estimate the indirect

impact of certain hypothetical events on our country

exposures, such as the impact of credit market deterioration

on corporate borrowers and counterparties along with the

shocks to the risk factors described above. The parameters of

these shocks vary based on the scenario reflected in each

stress test. We review estimated losses produced by the stress

tests in order to understand their magnitude, highlight

potential loss concentrations, and assess and mitigate our

exposures where necessary.

Limits

We use credit risk limits at various levels, as well as

underwriting standards to manage the size and nature of our

credit exposures. Limits for industries and countries are

based on our risk appetite and are designed to allow for

regular monitoring, review, escalation and management of

credit risk concentrations. See “Overview and Structure of

Risk Management” for information about the limit approval

process.

Credit Risk is responsible for monitoring these limits, and

identifying and escalating to senior management and/or the

appropriate risk committee, on a timely basis, instances

where limits have been exceeded.

Risk Mitigants

To reduce our credit exposures on derivatives and securities

financing transactions, we may enter into netting agreements

with counterparties that permit us to offset receivables and

payables with such counterparties. We may also reduce credit

risk with counterparties by entering into agreements that

enable us to obtain collateral from them on an upfront or

contingent basis and/or to terminate transactions if the

counterparty’s credit rating falls below a specified level. We

monitor the fair value of the collateral to ensure that our

credit exposures are appropriately collateralized. We seek to

minimize exposures where there is a significant positive

correlation between the creditworthiness of our

counterparties and the market value of collateral we receive.

For loans and lending commitments, depending on the credit

quality of the borrower and other characteristics of the

transaction, we employ a variety of potential risk mitigants.

Risk mitigants include collateral provisions, guarantees,

covenants, structural seniority of the bank loan claims and,

for certain lending commitments, provisions in the legal

documentation that allow us to adjust loan amounts, pricing,

structure and other terms as market conditions change. The

type and structure of risk mitigants employed can

significantly influence the degree of credit risk involved in a

loan or lending commitment.

When we do not have sufficient visibility into a

counterparty’s financial strength or when we believe a

counterparty requires support from its parent, we may obtain

third-party guarantees of the counterparty’s obligations. We

may also mitigate our credit risk using credit derivatives or

participation agreements.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis

Goldman Sachs 2022 Form 10-K 107

Credit Exposures

As of December 2022, our aggregate credit exposure

decreased compared with December 2021, primarily

reflecting decreases in receivables from clearing organizations

and cash deposits with central banks, partially offset by an

increase in loans and lending commitments. The percentage

of our credit exposures arising from non-investment-grade

counterparties (based on our internally determined public

rating agency equivalents) decreased compared with

December 2021, primarily reflecting a decrease in non-

investment-grade loans and lending commitments. Our credit

exposures are described further below.

Cash and Cash Equivalents. Our credit exposure on cash

and cash equivalents arises from our unrestricted cash, and

includes both interest-bearing and non-interest-bearing

deposits. To mitigate the risk of credit loss, we place

substantially all of our deposits with highly rated banks and

central banks.

The table below presents our credit exposure from

unrestricted cash and cash equivalents, and the concentration

by industry, region and internally determined public rating

agency equivalents.

As of December

$ in millions 2022 2021

Cash and Cash Equivalents $224,889 $236,168

Industry

Financial Institutions 6% 5%

Sovereign 94% 95%

Total 100% 100%

Region

Americas 77% 55%

EMEA 19% 36%

Asia 4% 9%

Total 100% 100%

Credit Quality (Credit Rating Equivalent)

AAA 89% 64%

AA 5% 24%

A 6% 11%

BBB – 1%

Total 100% 100%

The table above excludes cash segregated for regulatory and

other purposes of $16.94 billion as of December 2022 and

$24.87billion as of December 2021.

OTC Derivatives. Our credit exposure on OTC derivatives

arises primarily from our market-making activities. As a

market maker, we enter into derivative transactions to

provide liquidity to clients and to facilitate the transfer and

hedging of their risks. We also enter into derivatives to

manage market risk exposures. We manage our credit

exposure on OTC derivatives using the credit risk process,

measures, limits and risk mitigants described above.

We generally enter into OTC derivatives transactions under

bilateral collateral arrangements that require the daily

exchange of collateral. As credit risk is an essential

component of fair value, we include a credit valuation

adjustment (CVA) in the fair value of derivatives to reflect

counterparty credit risk, as described in Note 7 to the

consolidated financial statements. CVA is a function of the

present value of expected exposure, the probability of

counterparty default and the assumed recovery upon default.

The table below presents our net credit exposure from OTC

derivatives and the concentration by industry and region.

As of December

$ in millions 2022 2021

OTC derivative assets $53,399 $58,637

Collateral (not netted under U.S. GAAP) (15,823) (17,245)

Net credit exposure $37,576 $41,392

Industry

Consumer & Retail 3% 2%

Diversified Industrials 8% 10%

Financial Institutions 20% 15%

Funds 19% 13%

Healthcare 1% 1%

Municipalities & Nonprofit 2% 5%

Natural Resources & Utilities 34% 33%

Sovereign 7% 8%

Technology, Media & Telecommunications 4% 8%

Other (including Special Purpose Vehicles) 2% 5%

Total 100% 100%

Region

Americas 49% 53%

EMEA 43% 37%

Asia 8% 10%

Total 100% 100%

Our credit exposure (before any potential recoveries) to OTC

derivative counterparties that defaulted during 2022 remained

low, representing less than 2% of our total credit exposure

from OTC derivatives.

In the table above:

• OTC derivative assets, included in the consolidated

balance sheets, are reported on a net-by-counterparty basis

(i.e., the net receivable for a given counterparty) when a

legal right of setoff exists under an enforceable netting

agreement (counterparty netting) and are accounted for at

fair value, net of cash collateral received under enforceable

credit support agreements (cash collateral netting).

• Collateral represents cash collateral and the fair value of

securities collateral, primarily U.S. and non-U.S.

government and agency obligations, received under credit

support agreements, that we consider when determining

credit risk, but such collateral is not eligible for netting

under U.S. GAAP.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis

108

Goldman Sachs 2022 Form 10-K

The table below presents the distribution of our net credit

exposure from OTC derivatives by tenor.

$ in millions

Investment-

Grade

Non-Investment-

Grade / Unrated Total

As of December 2022

Less than 1 year $ 23,112 $ 8,812 $ 31,924

1 – 5 years 26,627 8,355 34,982

Greater than 5 years 58,354 4,342 62,696

Total 108,093 21,509 129,602

Netting (83,531) (8,495) (92,026)

Net credit exposure $ 24,562 $ 13,014 $ 37,576

As of December 2021

Less than 1 year $ 27,668 $ 11,203 $ 38,871

1 – 5 years 21,746 9,515 31,261

Greater than 5 years 64,670 6,590 71,260

Total 114,084 27,308 141,392

Netting (89,244) (10,756) (100,000)

Net credit exposure $ 24,840 $ 16,552 $ 41,392

In the table above:

• Tenor is based on remaining contractual maturity.

• Netting includes counterparty netting across tenor

categories and collateral that we consider when

determining credit risk (including collateral that is not

eligible for netting under U.S. GAAP). Counterparty

netting within the same tenor category is included within

such tenor category.

The tables below present the distribution of our net credit

exposure from OTC derivatives by tenor and internally

determined public rating agency equivalents.

Investment-Grade

$ in millions AAA AA A BBB Total

As of December 2022

Less than 1 year $ 521 $ 2,113 $ 10,516 $ 9,962 $ 23,112

1 – 5 years 1,684 5,383 9,057 10,503 26,627

Greater than 5 years 5,594 16,063 21,060 15,637 58,354

Total 7,799 23,559 40,633 36,102 108,093

Netting (5,025) (20,582) (31,956) (25,968) (83,531)

Net credit exposure $ 2,774 $ 2,977 $ 8,677 $ 10,134 $ 24,562

As of December 2021

Less than 1 year $ 1,017 $ 4,926 $ 12,481 $ 9,244 $ 27,668

1 – 5 years 1,150 3,071 8,298 9,227 21,746

Greater than 5 years 13,777 5,421 23,867 21,605 64,670

Total 15,944 13,418 44,646 40,076 114,084

Netting (13,535) (9,501) (36,005) (30,203) (89,244)

Net credit exposure $ 2,409 $ 3,917 $ 8,641 $ 9,873 $ 24,840

Non-Investment-Grade / Unrated

$ in millions BB or lower Unrated Total

As of December 2022

Less than 1 year $ 8,245 $ 567 $ 8,812

1 – 5 years 8,150 205 8,355

Greater than 5 years 4,232 110 4,342

Total 20,627 882 21,509

Netting (8,436) (59) (8,495)

Net credit exposure $ 12,191 $ 823 $ 13,014

As of December 2021

Less than 1 year $ 10,446 $ 757 $ 11,203

1 – 5 years 9,210 305 9,515

Greater than 5 years 6,320 270 6,590

Total 25,976 1,332 27,308

Netting (10,683) (73) (10,756)

Net credit exposure $ 15,293 $ 1,259 $ 16,552

Lending Activities. We manage our lending activities using

the credit risk process, measures, limits and risk mitigants

described above. Other lending positions, including

secondary trading positions, are risk-managed as a

component of market risk. In the fourth quarter of 2022, we

changed the classification of our lending portfolio to better

reflect the nature of the underlying collateral. Loans and

lending commitments types in the table below include the

addition of securities-based and other collateralized, as well

as the removal of wealth management. This also resulted in

reclassifications of certain loans and lending commitments in

corporate and other to other collateralized. Prior periods

have been conformed to the current presentation.

The table below presents our loans and lending

commitments.

$ in millions

Loans

Lending

Commitments

Total

As of December 2022

Corporate $ 40,135 $ 139,718 $ 179,853

Commercial real estate 28,879 4,271 33,150

Residential real estate 23,035 3,192 26,227

Securities-based 16,671 508 17,179

Other collateralized 51,702 14,407 66,109

Consumer:

Installment 6,326 1,882 8,208

Credit cards 15,820 62,216 78,036

Other 2,261 944 3,205

Total $ 184,829 $ 227,138 $ 411,967

Allowance for loan losses $ (5,543) $ (774) $ (6,317)

As of December 2021

Corporate $ 37,643 $ 146,694 $ 184,337

Commercial real estate 29,000 6,736 35,736

Residential real estate 24,674 4,031 28,705

Securities-based 16,652 454 17,106

Other collateralized 38,263 17,253 55,516

Consumer:

Installment 3,672 9 3,681

Credit cards 8,212 35,932 44,144

Other 4,019 443 4,462

Total $ 162,135 $ 211,552 $ 373,687

Allowance for loan losses $ (3,573) $ (776) $ (4,349)

In the table above, lending commitments excluded $4.85

billion as of December 2022 and $4.14 billion as of December

2021 relating to issued letters of credit which are classified as

guarantees in our consolidated financial statements. See Note

18 to the consolidated financial statements for further

information about guarantees.

See Note 9 to the consolidated financial statements for

information about net charge-offs on wholesale and

consumer loans, as well as past due and nonaccrual loans

accounted for at amortized cost.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis

Goldman Sachs 2022 Form 10-K 109

Corporate. Corporate loans and lending commitments

include term loans, revolving lines of credit, letter of credit

facilities and bridge loans, and are principally used for

operating and general corporate purposes, or in connection

with acquisitions. Corporate loans are secured (typically by a

senior lien on the assets of the borrower) or unsecured,

depending on the loan purpose, the risk profile of the

borrower and other factors.

The table below presents our credit exposure from corporate

loans and lending commitments, and the concentration by

industry, region, internally determined public rating agency

equivalents and other credit metrics.

$ in millions Loans

Lending

Commitments

Total

As of December 2022

Corporate

$40,135

$139,718

$179,853

Industry

Consumer & Retail 10% 13% 12%

Diversified Industrials 18% 18% 18%

Financial Institutions 7% 8% 8%

Funds 3% 4% 4%

Healthcare 10% 12% 12%

Natural Resources & Utilities 9% 18% 16%

Real Estate 11% 5% 7%

Technology, Media & Telecommunications

26% 20% 21%

Other (including Special Purpose Vehicles)

6% 2% 2%

Total 100% 100% 100%

Region

Americas 57% 77% 73%

EMEA 34% 21% 24%

Asia 9% 2% 3%

Total 100% 100% 100%

Credit Quality (Credit Rating Equivalent)

AAA – 2% 1%

AA 1% 5% 4%

A 5% 21% 18%

BBB 19% 38% 34%

BB or lower 75% 34% 43%

Total 100% 100% 100%

As of December 2021

Corporate

$37,643

$146,694

$184,337

Industry

Consumer & Retail 11% 14% 13%

Diversified Industrials 17% 17% 17%

Financial Institutions 7% 7% 7%

Funds 2% 3% 3%

Healthcare 10% 10% 10%

Natural Resources & Utilities 13% 17% 16%

Real Estate 10% 5% 6%

Technology, Media & Telecommunications

24% 25% 25%

Other (including Special Purpose Vehicles)

6% 2% 3%

Total 100% 100% 100%

Region

Americas 52% 76% 71%

EMEA 38% 21% 25%

Asia 10% 3% 4%

Total 100% 100% 100%

Credit Quality (Credit Rating Equivalent)

AAA – 1% 1%

AA 1% 5% 4%

A 6% 17% 14%

BBB 15% 37% 33%

BB or lower 78% 40% 48%

Total 100% 100% 100%

Commercial Real Estate. Commercial real estate includes

originated loans and lending commitments that are directly

or indirectly secured by hotels, retail stores, multifamily

housing complexes and commercial and industrial properties.

Commercial real estate also includes loans and lending

commitments extended to clients who warehouse assets that

are directly or indirectly backed by commercial real estate. In

addition, commercial real estate includes loans purchased by

us.

The table below presents our credit exposure from

commercial real estate loans and lending commitments, and

the concentration by region, internally determined public

rating agency equivalents and other credit metrics.

$ in millions

Loans

Lending

Commitments Total

As of December 2022

Commercial Real Estate $28,879 $4,271 $33,150

Region

Americas 79% 74% 78%

EMEA 16% 17% 16%

Asia 5% 9% 6%

Total 100% 100% 100%

Credit Quality (Credit Rating Equivalent)

Investment-grade 18% 27% 19%

Non-investment-grade 82% 72% 80%

Unrated – 1% 1%

Total 100% 100% 100%

As of December 2021

Commercial Real Estate $29,000 $6,736 $35,736

Region

Americas 82% 78% 81%

EMEA 13% 10% 13%

Asia 5% 12% 6%

Total 100% 100% 100%

Credit Quality (Credit Rating Equivalent)

Investment-grade 22% 20% 21%

Non-investment-grade 77% 80% 78%

Unrated 1% – 1%

Total 100% 100% 100%

In the table above, credit exposure includes loans and lending

commitments of $10.28 billion as of December 2022 and

$11.65 billion as of December 2021 which are extended to

clients who warehouse assets that are directly or indirectly

backed by commercial real estate.

In addition, we also have credit exposure to commercial real

estate loans held for securitization of $119 million as of

December 2022 and $922 million as of December 2021. Such

loans are included in trading assets in our consolidated

balance sheets.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis

110

Goldman Sachs 2022 Form 10-K

Residential Real Estate. Residential real estate loans and

lending commitments are primarily extended to wealth

management clients and to clients who warehouse assets that

are directly or indirectly secured by residential real estate. In

addition, residential real estate includes loans purchased by

us.

The table below presents our credit exposure from residential

real estate loans and lending commitments, and the

concentration by region, internally determined public rating

agency equivalents and other credit metrics.

$ in millions Loans

Lending

Commitments Total

As of December 2022

Residential Real Estate $23,035 $3,192 $26,227

Region

Americas 96% 93% 95%

EMEA 3% 7% 4%

Asia 1% – 1%

Total 100% 100% 100%

Credit Quality (Credit Rating Equivalent)

Investment-grade 16% 8% 15%

Non-investment-grade 61% 91% 64%

Other metrics 23% 1% 21%

Total 100% 100% 100%

As of December 2021

Residential Real Estate $24,674 $4,031 $28,705

Region

Americas 96% 82% 94%

EMEA 2% 16% 4%

Asia 2% 2% 2%

Total 100% 100% 100%

Credit Quality (Credit Rating Equivalent)

Investment-grade 13% 21% 14%

Non-investment-grade 65% 70% 66%

Other metrics

21%

19%

Unrated 1% – 1%

Total 100% 100% 100%

In the table above:

• Credit exposure includes loans and lending commitments

of $14.62 billion as of December 2022 and $16.89 billion as

of December 2021 which are extended to clients who

warehouse assets that are directly or indirectly secured by

residential real estate.

• Other metrics category consists of loans where we use

other key metrics to assess the borrower's credit quality,

such as loan-to-value ratio, delinquency status, collateral

value, expected cash flows and other risk factors.

In addition, we also have credit exposure to residential real

estate loans held for securitization of $8.07 billion as of

December 2022 and $11.57 billion as of December 2021. Such

loans are included in trading assets in our consolidated

balance sheets.

Securities-Based. Securities-based includes loans and

lending commitments that are secured by stocks, bonds,

mutual funds, and exchange-traded funds. These loans and

commitments are primarily extended to our wealth

management clients and used for purposes other than

purchasing, carrying or trading margin stocks. Securities-

based loans require borrowers to post additional collateral

based on changes in the underlying collateral's fair value.

The table below presents our credit exposure from securities-

based loans and lending commitments, and the concentration

by region, internally determined public rating agency

equivalents and other credit metrics.

$ in millions

Loans

Lending

Commitments Total

As of December 2022

Securities-based $16,671 $508 $17,179

Region

Americas 83% 98% 83%

EMEA 15% 2% 15%

Asia 2% – 2%

Total 100% 100% 100%

Credit Quality (Credit Rating Equivalent)

Investment-grade 77% 18% 76%

Non-investment-grade 5% 2% 4%

Other metrics 18% 80% 20%

Total 100% 100% 100%

As of December 2021

Securities-based $16,652 $454 $17,106

Region

Americas 77% 100% 78%

EMEA 16% – 15%

Asia 7% – 7%

Total 100% 100% 100%

Credit Quality (Credit Rating Equivalent)

Investment-grade 83% 46% 82%

Non-investment-grade 3% – 3%

Other metrics 14% 54% 15%

Total 100% 100% 100%

In the table above, other metrics category consists of loans

where we use other key metrics to assess the borrower's credit

quality, such as collateral value, loan-to-value ratio and

delinquency status.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis

Goldman Sachs 2022 Form 10-K 111

Other Collateralized. Other collateralized includes loans

and lending commitments that are backed by specific

collateral (other than securities and real estate). Such loans

and lending commitments are extended to clients who

warehouse assets that are directly or indirectly secured by

corporate loans, consumer loans and other assets. Other

collateralized also includes loans and lending commitments

to investment funds (managed by third parties) that are

collateralized by capital commitments of the funds' investors

or assets held by the fund, as well as other secured loans and

lending commitments extended to our wealth management

clients.

The table below presents our credit exposure from other

collateralized loans and lending commitments, and the

concentration by region, internally determined public rating

agency equivalents and other credit metrics.

$ in millions Loans

Lending

Commitments Total

As of December 2022

Other Collateralized $51,702 $14,407 $66,109

Region

Americas 86% 93% 87%

EMEA 12% 7% 11%

Asia 2% – 2%

Total 100% 100% 100%

Credit Quality (Credit Rating Equivalent)

Investment-grade 64% 66% 65%

Non-investment-grade 35% 31% 34%

Other metrics 1% – –

Unrated – 3% 1%

Total 100% 100% 100%

As of December 2021

Other Collateralized $38,263 $17,253 $55,516

Region

Americas 74% 92% 79%

EMEA 23% 7% 18%

Asia 3% 1% 3%

Total 100% 100% 100%

Credit Quality (Credit Rating Equivalent)

Investment-grade 58% 69% 62%

Non-investment-grade 41% 30% 38%

Other metrics 1% – –

Unrated – 1% –

Total 100% 100% 100%

In the table above, credit exposure included loans and

lending commitments extended to clients who warehouse

assets of $16.89 billion as of December 2022 and $13.73

billion as of December 2021.

Installment and Credit Cards. We originate unsecured

installment loans (including point-of-sale loans that we began

to originate through the GreenSky platform in the third

quarter of 2022) and credit card loans (pursuant to revolving

lines of credit) to consumers in the Americas. The credit card

lines are cancellable by us and therefore do not result in

credit exposure.

The tables below present our credit exposure from originated

installment and credit card funded loans, and the

concentration by the five most concentrated U.S. states.

$ in millions Installment

As of December 2022

Loans, gross $6,326

California 10%

Texas 9%

Florida 7%

New York 6%

Illinois 4%

Other 64%

Total 100%

As of December 2021

Loans, gross $3,672

California 11%

Texas 9%

Florida 7%

New York 7%

Illinois 4%

Other 62%

Total 100%

$ in millions Credit Cards

As of December 2022

Loans, gross

$15,820

California 16%

Texas 9%

New York 8%

Florida 8%

Illinois 4%

Other 55%

Total 100%

As of December 2021

Loans, gross $8,212

California 18%

Texas 9%

New York 8%

Florida 8%

New Jersey 4%

Other 53%

Total 100%

In addition, we had credit exposure of $1.88 billion as of

December 2022 and $9 million as of December 2021 related

to our commitments to provide unsecured installment loans

to consumers.

See Note 9 to the consolidated financial statements for

further information about the credit quality indicators of

installment and credit card loans.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis

112

Goldman Sachs 2022 Form 10-K

Other. Other includes unsecured loans extended to wealth

management clients and unsecured consumer and credit card

loans purchased by us.

The table below presents our credit exposure from other

loans and lending commitments, and the concentration by

region, internally determined public rating agency

equivalents and other credit metrics.

$ in millions

Loans

Lending

Commitments Total

As of December 2022

Other $2,261 $944 $3,205

Region

Americas 89% 99% 92%

EMEA 11% 1% 8%

Total 100% 100% 100%

Credit Quality (Credit Rating Equivalent)

Investment-grade 47% 93% 60%

Non-investment-grade 26% 7% 21%

Other metrics 27% – 19%

Total 100% 100% 100%

As of December 2021

Other $4,019 $443 $4,462

Region

Americas 89% 100% 90%

EMEA 11% – 10%

Total 100% 100% 100%

Credit Quality (Credit Rating Equivalent)

Investment-grade 24% 78% 29%

Non-investment-grade 23% 14% 22%

Other metrics 51% – 46%

Unrated 2% 8% 3%

Total 100% 100% 100%

In the table above, other metrics primarily includes consumer

and credit card loans purchased by us. Our risk assessment

process for such loans includes reviewing certain key metrics,

such as expected cash flows, delinquency status and other

risk factors.

In addition, we also have credit exposure to other loans held

for securitization of $1.76 billion as of December 2022 and

$467 million as of December 2021. Such loans are included in

trading assets in our consolidated balance sheets.

Credit Hedges. To mitigate the credit risk associated with

our lending activities, we obtain credit protection on certain

loans and lending commitments through credit default swaps,

both single-name and index-based contracts, and through the

issuance of credit-linked notes.

Securities Financing Transactions. We enter into

securities financing transactions in order to, among other

things, facilitate client activities, invest excess cash, acquire

securities to cover short positions and finance certain

activities. We bear credit risk related to resale agreements

and securities borrowed only to the extent that cash

advanced or the value of securities pledged or delivered to the

counterparty exceeds the value of the collateral received. We

also have credit exposure on repurchase agreements and

securities loaned to the extent that the value of securities

pledged or delivered to the counterparty for these

transactions exceeds the amount of cash or collateral

received. Securities collateral for these transactions primarily

includes U.S. and non-U.S. government and agency

obligations.

The table below presents our credit exposure from securities

financing transactions and the concentration by industry,

region and internally determined public rating agency

equivalents.

As of December

$ in millions 2022 2021

Securities Financing Transactions $34,762 $34,505

Industry

Financial Institutions 43% 34%

Funds 23% 23%

Municipalities & Nonprofit 5% 5%

Sovereign 28% 35%

Other (including Special Purpose Vehicles) 1% 3%

Total 100% 100%

Region

Americas 47% 36%

EMEA 34% 44%

Asia 19% 20%

Total 100% 100%

Credit Quality (Credit Rating Equivalent)

AAA 20% 19%

AA 31% 28%

A 31% 33%

BBB 8% 9%

BB or lower 10% 11%

Total 100% 100%

The table above reflects both netting agreements and

collateral that we consider when determining credit risk.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis

Goldman Sachs 2022 Form 10-K 113

Other Credit Exposures. We are exposed to credit risk

from our receivables from brokers, dealers and clearing

organizations and customers and counterparties. Receivables

from brokers, dealers and clearing organizations primarily

consist of initial margin placed with clearing organizations

and receivables related to sales of securities which have

traded, but not yet settled. These receivables generally have

minimal credit risk due to the low probability of clearing

organization default and the short-term nature of receivables

related to securities settlements. Receivables from customers

and counterparties generally consist of collateralized

receivables related to customer securities transactions and

generally have minimal credit risk due to both the value of

the collateral received and the short-term nature of these

receivables.

The table below presents our other credit exposures and the

concentration by industry, region and internally determined

public rating agency equivalents.

As of December

$ in millions 2022 2021

Other Credit Exposures $48,916 $61,187

Industry

Financial Institutions 80% 86%

Funds 12% 9%

Other (including Special Purpose Vehicles) 8% 5%

Total 100% 100%

Region

Americas 41% 50%

EMEA 49% 43%

Asia 10% 7%

Total 100% 100%

Credit Quality (Credit Rating Equivalent)

AAA 7% 4%

AA 32% 47%

A 33% 29%

BBB 10% 6%

BB or lower 16% 13%

Unrated 2% 1%

Total 100% 100%

The table above reflects collateral that we consider when

determining credit risk.

Selected Exposures

We have credit and market exposures, as described below,

that have had heightened focus given recent events and broad

market concerns. Credit exposure represents the potential for

loss due to the default or deterioration in credit quality of a

counterparty or borrower. Market exposure represents the

potential for loss in value of our long and short positions due

to changes in market prices.

Country Exposures. The Russian invasion of Ukraine

continues to negatively affect the global economy and has

resulted in significant disruptions in financial markets and

increased macroeconomic uncertainty. Governments around

the world have responded to Russia’s invasion by imposing

economic sanctions and export controls on specific industry

sectors, companies and individuals in Russia. Retaliatory

restrictions against investors, non-Russian owned businesses

and other sovereign states have been implemented by Russia.

Businesses in the U.S. and globally continue to experience

shortages in materials and increased costs for transportation,

energy and raw materials due, in part, to the negative effects

of the war on the global economy. The escalation or

continuation of the war between Russia and Ukraine presents

heightened risks relating to cyber attacks, limited ability to

settle securities transactions, third-party and agent bank

dependencies, supply chain disruptions, and inflation, as well

as the potential for increased volatility in commodity,

currency and other financial markets. Complying with

economic sanctions and restrictions imposed by governments

has resulted in increased operational risk. The extent and

duration of the war, sanctions and resulting market

disruptions, as well as the potential adverse consequences for

our business, liquidity and results of operations, are difficult

to predict.

Our senior management, risk committees and the Board

receive regular briefings from our independent risk oversight

and control functions, including our chief risk officer, on

Russian and Ukrainian exposures, as well as other relevant

risk metrics. We have significantly reduced our exposure to

Russia and Ukraine and have curtailed our operations in

Russia to those necessary to meet our legal and regulatory

obligations. The overall direct financial impact to our net

revenues for 2022 from Russian and Ukrainian

counterparties, borrowers, issuers and related instruments

was not material. We have established a firmwide working

group to identify and assess the operational risk associated

with complying with economic sanctions and restrictions as a

result of this invasion. In addition, to mitigate the risk of

increased cyber attacks, we liaise with government agencies

in order to update our monitoring processes with the latest

information.

Our total credit exposure to Russian or Ukrainian

counterparties or borrowers and our total market exposure

relating to Russian or Ukrainian issuers was not material as

of December 2022.

In addition, economic and/or political uncertainties in

Argentina, Ethiopia, Ghana, Lebanon, Pakistan, Sri Lanka

and Venezuela have led to concerns about their financial

stability. Our credit exposure to counterparties or borrowers

and our market exposure to issuers relating to each of these

countries was not material as of December 2022.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis

114

Goldman Sachs 2022 Form 10-K

We have a comprehensive framework to monitor, measure

and assess our country exposures and to determine our risk

appetite. We determine the country of risk by the location of

the counterparty, issuer’s assets, where they generate revenue,

the country in which they are headquartered, the jurisdiction

where a claim against them could be enforced, and/or the

government whose policies affect their ability to repay their

obligations. We monitor our credit exposure to a specific

country both at the individual counterparty level, as well as

at the aggregate country level. See “Stress Tests” for

information about stress tests that are designed to estimate

the direct and indirect impact of events involving the above

countries.

Operational Risk Management

Overview

Operational risk is the risk of an adverse outcome resulting

from inadequate or failed internal processes, people, systems

or from external events. Our exposure to operational risk

arises from routine processing errors, as well as

extraordinary incidents, such as major systems failures or

legal and regulatory matters.

Potential types of loss events related to internal and external

operational risk include:

• Execution, delivery and process management;

• Business disruption and system failures;

• Employment practices and workplace safety;

• Clients, products and business practices;

• Damage to physical assets;

• Internal fraud; and

• External fraud.

Operational Risk, which is independent of our revenue-

producing units and reports to our chief risk officer, has

primary responsibility for developing and implementing a

formalized framework for assessing, monitoring and

managing operational risk with the goal of maintaining our

exposure to operational risk at levels that are within our risk

appetite.

Operational Risk Management Process

Our process for managing operational risk includes the

critical components of our risk management framework

described in the “Overview and Structure of Risk

Management,” including a comprehensive data collection

process, as well as firmwide policies and procedures, for

operational risk events.

We combine top-down and bottom-up approaches to manage

and measure operational risk. From a top-down perspective,

our senior management assesses firmwide and business-level

operational risk profiles. From a bottom-up perspective, our

first and second lines of defense are responsible for risk

identification and risk management on a day-to-day basis,

including escalating operational risks and risk events to

senior management.

We maintain a comprehensive control framework designed to

provide a well-controlled environment to minimize

operational risks. The Firmwide Operational Risk and

Resilience Committee is responsible for overseeing

operational risk, and for ensuring operational resilience of

our business.

Our operational risk management framework is designed to

comply with the operational risk measurement rules under

the Capital Framework and has evolved based on the

changing needs of our businesses and regulatory guidance.

We have established policies that require all employees and

consultants to report and escalate operational risk events.

When operational risk events are identified, our policies

require that the events be documented and analyzed to

determine whether changes are required in our systems and/

or processes to further mitigate the risk of future events.

We use operational risk management applications to capture,

analyze, aggregate and report operational risk event data and

key metrics. One of our key risk identification and control

assessment tools is an operational risk and control self-

assessment process, which is performed by our managers.

This process consists of the identification and rating of

operational risks, on a forward-looking basis, and the related

controls. The results from this process are analyzed to

evaluate operational risk exposures and identify businesses,

activities or products with heightened levels of operational

risk.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis

Goldman Sachs 2022 Form 10-K 115

Risk Measurement

We measure our operational risk exposure using both

statistical modeling and scenario analyses, which involve

qualitative and quantitative assessments of internal and

external operational risk event data and internal control

factors for each of our businesses. Operational risk

measurement also incorporates an assessment of business

environment factors, including:

• Evaluations of the complexity of our business activities;

• The degree of automation in our processes;

• New activity information;

• The legal and regulatory environment; and

• Changes in the markets for our products and services,

including the diversity and sophistication of our customers

and counterparties.

The results from these scenario analyses are used to monitor

changes in operational risk and to determine business lines

that may have heightened exposure to operational risk. These

analyses are used in the determination of the appropriate

level of operational risk capital to hold. We also perform

firmwide stress tests. See “Overview and Structure of Risk

Management” for information about firmwide stress tests.

Types of Operational Risks

Increased reliance on technology and third-party

relationships has resulted in increased operational risks, such

as information and cybersecurity risk, third-party risk and

business resilience risk. We manage those risks as follows:

Information and Cybersecurity Risk. Information and

cybersecurity risk is the risk of compromising the

confidentiality, integrity or availability of our data and

systems, leading to an adverse impact to us, our reputation,

our clients and/or the broader financial system. We seek to

minimize the occurrence and impact of unauthorized access,

disruption or use of information and/or information systems.

We deploy and operate preventive and detective controls and

processes to mitigate emerging and evolving information

security and cybersecurity threats, including monitoring our

network for known vulnerabilities and signs of unauthorized

attempts to access our data and systems. There is increased

information risk through diversification of our data across

external service providers, including use of a variety of cloud-

provided or -hosted services and applications. See “Risk

Factors” in Part I, Item 1A of this Form 10-K for further

information about information and cybersecurity risk.

Third-Party Risk. Third-party risk, including vendor risk, is

the risk of an adverse impact due to reliance on third parties

performing services or activities on our behalf. These risks

may include legal, regulatory, information security,

reputational, operational or any other risks inherent in

engaging a third party. We identify, manage and report key

third-party risks and conduct due diligence across multiple

risk domains, including information security and

cybersecurity, resilience and additional supply chain

dependencies. The Third-Party Risk Program monitors,

reviews and reassesses third-party risks on an ongoing basis.

See “Risk Factors” in Part I, Item 1A of this Form 10-K for

further information about third-party risk.

Business Resilience Risk. Business resilience risk is the risk

of disruption to our critical processes. We monitor threats

and assess risks and seek to ensure our state of readiness in

the event of a significant operational disruption to the normal

operations of our critical functions or their dependencies,

such as critical facilities, systems, third parties, data and/or

personnel. Our resilience framework defines the fundamental

principles for BCP and crisis management to ensure that

critical functions can continue to operate in the event of a

disruption. The business continuity program is

comprehensive, consistent on a firmwide basis, and up-to-

date, incorporating new information, including updated

resilience capabilities as and when they become available.

Our resilience assurance program encompasses testing of

response and recovery strategies on a regular basis with the

objective of minimizing and preventing significant

operational disruptions. See “Business — Business Continuity

and Information Security” in Part I, Item 1 of this Form 10-K

for further information about business continuity.

Model Risk Management

Overview

Model risk is the potential for adverse consequences from

decisions made based on model outputs that may be incorrect

or used inappropriately. We rely on quantitative models

across our business activities primarily to value certain

financial assets and liabilities, to monitor and manage our

risk, and to measure and monitor our regulatory capital.

Model Risk, which is independent of our revenue-producing

units, model developers, model owners and model users, and

reports to our chief risk officer, has primary responsibility for

assessing, monitoring and managing our model risk through

firmwide oversight across our global businesses, and provides

periodic updates to senior management, risk committees and

the Risk Committee of the Board.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis

116

Goldman Sachs 2022 Form 10-K

Our model risk management framework is managed through

a governance structure and risk management controls, which

encompass standards designed to ensure we maintain a

comprehensive model inventory, including risk assessment

and classification, sound model development practices,

independent review and model-specific usage controls. The

Firmwide Model Risk Control Committee oversees our

model risk management framework.

Model Review and Validation Process

Model Risk consists of quantitative professionals who

perform an independent review, validation and approval of

our models. This review includes an analysis of the model

documentation, independent testing, an assessment of the

appropriateness of the methodology used, and verification of

compliance with model development and implementation

standards.

We regularly refine and enhance our models to reflect

changes in market or economic conditions and our business

mix. All models are reviewed on an annual basis, and new

models or significant changes to existing models and their

assumptions are approved prior to implementation.

The model validation process incorporates a review of

models and trade and risk parameters across a broad range of

scenarios (including extreme conditions) in order to critically

evaluate and verify:

• The model’s conceptual soundness, including the

reasonableness of model assumptions, and suitability for

intended use;

• The testing strategy utilized by the model developers to

ensure that the models function as intended;

• The suitability of the calculation techniques incorporated

in the model;

• The model’s accuracy in reflecting the characteristics of the

related product and its significant risks;

• The model’s consistency with models for similar products;

and

• The model’s sensitivity to input parameters and

assumptions.

See “Critical Accounting Policies — Fair Value — Review of

Valuation Models,” “Liquidity Risk Management,” “Market

Risk Management,” “Credit Risk Management” and

“Operational Risk Management” for further information

about our use of models within these areas.

Other Risk Management

In addition to the areas of risks discussed above, we also

manage other risks, including capital, climate, compliance

and conflicts. These areas of risks are discussed below.

Capital Risk Management

Capital risk is the risk that our capital is insufficient to

support our business activities under normal and stressed

market conditions or we face capital reductions or RWA

increases, including from new or revised rules or changes in

interpretations of existing rules, and are therefore unable to

meet our internal capital targets or external regulatory

capital requirements. Capital adequacy is of critical

importance to us. Accordingly, we have in place a

comprehensive capital management policy that provides a

framework, defines objectives and establishes guidelines to

maintain an appropriate level and composition of capital in

both business-as-usual and stressed conditions. Our capital

management framework is designed to provide us with the

information needed to identify and comprehensively manage

risk, and develop and apply projected stress scenarios that

capture idiosyncratic vulnerabilities with a goal of holding

sufficient capital to remain adequately capitalized even after

experiencing a severe stress event. See “Capital Management

and Regulatory Capital” for further information about our

capital management process.

We have established a comprehensive governance structure to

manage and oversee our day-to-day capital management

activities and to ensure compliance with capital rules and

related policies. Our capital management activities are

overseen by the Board and its committees. The Board is

responsible for approving our annual capital plan and the

Risk Committee of the Board approves our capital

management policy, which details the risk committees and

members of senior management who are responsible for the

ongoing monitoring of our capital adequacy and evaluation

of current and future regulatory capital requirements, the

review of the results of our capital planning and stress tests

processes, and the results of our capital models. In addition,

our risk committees and senior management are responsible

for the review of our contingency capital plan, key capital

adequacy metrics, including regulatory capital ratios, and

capital plan metrics, such as the payout ratio, as well as

monitoring capital targets and potential breaches of capital

requirements.

Our process for managing capital risk also includes

independent review by Risk that, among other things,

assesses regulatory capital policies and related

interpretations, escalates certain interpretations to senior

management and/or the appropriate risk committee, and

performs calculation testing to corroborate alignment with

applicable capital rules.

Climate Risk Management

We categorize climate risk into physical risk and transition

risk. Physical risk is the risk that asset values may decline or

operations may be disrupted as a result of changes in the

climate, while transition risk is the risk that asset values may

decline because of changes in climate policies or changes in

the underlying economy due to decarbonization.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis

Goldman Sachs 2022 Form 10-K 117

As a global financial institution, climate-related risks

manifest in different ways across our businesses and we have

continued to make significant enhancements to our climate

risk management framework, including steps to further

integrate climate into our broader risk management

processes. We have integrated oversight of climate-related

risks into our risk management governance structure, from

senior management to our Board and its committees,

including the Risk and Public Responsibilities Committees.

The Risk Committee of the Board oversees firmwide

financial and nonfinancial risks, which include climate risk,

and, as part of its oversight, receives updates on our risk

management approach to climate risk, including our

approaches towards scenario analysis and integration into

existing risk management processes. The Public

Responsibilities Committee of the Board assists the Board in

its oversight of our firmwide sustainability strategy and

sustainability issues affecting us, including with respect to

climate change. As part of its oversight, the Public

Responsibilities Committee receives periodic updates on our

sustainability strategy, and also periodically reviews our

governance and related policies and processes for

sustainability and climate change-related risks. Senior

management within Risk is responsible for the development

of our climate risk program.

We have begun incorporating climate risk into our credit

evaluation and underwriting processes for select industries.

Climate risk factors are now evaluated as part of transaction

due diligence for select loan commitments.

See “Business — Sustainability” in Part I, Item 1 and “Risk

Factors” in Part I, Item 1A of this Form 10-K for information

about our sustainability initiatives, including in relation to

climate transition.

Compliance Risk Management

Compliance risk is the risk of legal or regulatory sanctions,

material financial loss or damage to our reputation arising

from our failure to comply with the requirements of

applicable laws, rules and regulations, and our internal

policies and procedures. Compliance risk is inherent in all

activities through which we conduct our businesses. Our

Compliance Risk Management Program, administered by

Compliance, assesses our compliance, regulatory and

reputational risk; monitors for compliance with new or

amended laws, rules and regulations; designs and implements

controls, policies, procedures and training; conducts

independent testing; investigates, surveils and monitors for

compliance risks and breaches; and leads our responses to

regulatory examinations, audits and inquiries. We monitor

and review business practices to assess whether they meet or

exceed minimum regulatory and legal standards in all

markets and jurisdictions in which we conduct business.

Conflicts Management

Conflicts of interest and our approach to dealing with them

are fundamental to our client relationships, our reputation

and our long-term success. The term “conflict of interest”

does not have a universally accepted meaning, and conflicts

can arise in many forms within a business or between

businesses. The responsibility for identifying potential

conflicts, as well as complying with our policies and

procedures, is shared by all of our employees.

We have a multilayered approach to resolving conflicts and

addressing reputational risk. Our senior management

oversees policies related to conflicts resolution and, in

conjunction with Conflicts Resolution, Legal and

Compliance, and internal committees, formulates policies,

standards and principles, and assists in making judgments

regarding the appropriate resolution of particular conflicts.

Resolving potential conflicts necessarily depends on the facts

and circumstances of a particular situation and the

application of experienced and informed judgment.

As a general matter, Conflicts Resolution reviews financing

and advisory assignments in Global Banking & Markets and

certain of our investing, lending and other activities. In

addition, we have various transaction oversight committees,

such as the Firmwide Capital, Commitments and Suitability

Committees and other committees that also review new

underwritings, loans, investments and structured products.

These groups and committees work with internal and

external counsel and Compliance to evaluate and address any

actual or potential conflicts. The head of Conflicts

Resolution reports to our chief legal officer, who reports to

our chief executive officer.

We regularly assess our policies and procedures that address

conflicts of interest in an effort to conduct our business in

accordance with the highest ethical standards and in

compliance with all applicable laws, rules and regulations.

For further information about our risk management

processes, see “Overview and Structure of Risk

Management” and “Risk Factors” in Part I, Item 1A of this

Form 10-K.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis

118

Goldman Sachs 2022 Form 10-K

Item 7A. Quantitative and Qualitative

Disclosures About Market Risk

Quantitative and qualitative disclosures about market risk

are set forth in “Management's Discussion and Analysis of

Financial Condition and Results of Operations — Risk

Management” in Part II, Item 7 of this Form 10-K.

Item 8. Financial Statements and

Supplementary Data

Management’s Report on Internal Control

over Financial Reporting

Management of The Goldman Sachs Group, Inc., together

with its consolidated subsidiaries (the firm), is responsible for

establishing and maintaining adequate internal control over

financial reporting. The firm’s internal control over financial

reporting is a process designed under the supervision of the

firm’s principal executive and principal financial officers to

provide reasonable assurance regarding the reliability of

financial reporting and the preparation of the firm’s financial

statements for external reporting purposes in accordance

with U.S. generally accepted accounting principles.

As of December 31, 2022, management conducted an

assessment of the firm’s internal control over financial

reporting based on the framework established in Internal

Control – Integrated Framework (2013) issued by the

Committee of Sponsoring Organizations of the Treadway

Commission (COSO). Based on this assessment, management

has determined that the firm’s internal control over financial

reporting as of December 31, 2022 was effective.

Our internal control over financial reporting includes policies

and procedures that pertain to the maintenance of records

that, in reasonable detail, accurately and fairly reflect

transactions and dispositions of assets; provide reasonable

assurance that transactions are recorded as necessary to

permit preparation of financial statements in accordance with

U.S. generally accepted accounting principles, and that

receipts and expenditures are being made only in accordance

with authorizations of management and the directors of the

firm; and provide reasonable assurance regarding prevention

or timely detection of unauthorized acquisition, use or

disposition of the firm’s assets that could have a material

effect on our financial statements.

The firm’s internal control over financial reporting as of

December 31, 2022 has been audited by

PricewaterhouseCoopers LLP (PCAOB ID 238), an

independent registered public accounting firm, as stated in

their report appearing on pages 120 to 122, which expresses

an unqualified opinion on the effectiveness of the firm’s

internal control over financial reporting as of December 31,

2022.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Goldman Sachs 2022 Form 10-K 119

To the Board of Directors and Shareholders of The Goldman

Sachs Group, Inc.:

Opinions on the Financial Statements and Internal Control

over Financial Reporting

We have audited the accompanying consolidated balance

sheets of The Goldman Sachs Group, Inc. and its subsidiaries

(the Company) as of December 31, 2022 and 2021, and the

related consolidated statements of earnings, of

comprehensive income, of changes in shareholders’ equity

and of cash flows for each of the three years in the period

ended December 31, 2022, including the related notes

(collectively referred to as the “consolidated financial

statements”). We also have audited the Company’s internal

control over financial reporting as of December 31, 2022,

based on criteria established in Internal Control – Integrated

Framework (2013) issued by the Committee of Sponsoring

Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred

to above present fairly, in all material respects, the financial

position of the Company as of December 31, 2022 and 2021,

and the results of its operations and its cash flows for each of

the three years in the period ended December 31, 2022 in

conformity with accounting principles generally accepted in

the United States of America. Also in our opinion, the

Company maintained, in all material respects, effective

internal control over financial reporting as of December 31,

2022, based on criteria established in Internal Control –

Integrated Framework (2013) issued by the COSO.

Change in Accounting Principle

As discussed in Note 9 to the consolidated financial

statements, the Company changed the manner in which it

accounts for credit losses on certain financial instruments in

2020.

Basis for Opinions

The Company’s management is responsible for these

consolidated financial statements, for maintaining effective

internal control over financial reporting, and for its

assessment of the effectiveness of internal control over

financial reporting, included in the accompanying

Management’s Report on Internal Control over Financial

Reporting. Our responsibility is to express opinions on the

Company’s consolidated financial statements and on the

Company’s internal control over financial reporting based on

our audits. We are a public accounting firm registered with

the Public Company Accounting Oversight Board (United

States) (PCAOB) and are required to be independent with

respect to the Company in accordance with the U.S. federal

securities laws and the applicable rules and regulations of the

Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of

the PCAOB. Those standards require that we plan and

perform the audits to obtain reasonable assurance about

whether the consolidated financial statements are free of

material misstatement, whether due to error or fraud, and

whether effective internal control over financial reporting

was maintained in all material respects.

Our audits of the consolidated financial statements included

performing procedures to assess the risks of material

misstatement of the consolidated financial statements,

whether due to error or fraud, and performing procedures

that respond to those risks. Such procedures included

examining, on a test basis, evidence regarding the amounts

and disclosures in the consolidated financial statements. Our

audits also included evaluating the accounting principles used

and significant estimates made by management, as well as

evaluating the overall presentation of the consolidated

financial statements. Our audit of internal control over

financial reporting included obtaining an understanding of

internal control over financial reporting, assessing the risk

that a material weakness exists, and testing and evaluating

the design and operating effectiveness of internal control

based on the assessed risk. Our audits also included

performing such other procedures as we considered necessary

in the circumstances. We believe that our audits provide a

reasonable basis for our opinions.

Report of Independent Registered Public

Accounting Firm

120

Goldman Sachs 2022 Form 10-K

Definition and Limitations of Internal Control over Financial

Reporting

A company’s internal control over financial reporting is a

process designed to provide reasonable assurance regarding

the reliability of financial reporting and the preparation of

financial statements for external purposes in accordance with

generally accepted accounting principles. A company’s

internal control over financial reporting includes those

policies and procedures that (i) pertain to the maintenance of

records that, in reasonable detail, accurately and fairly reflect

the transactions and dispositions of the assets of the

company; (ii) provide reasonable assurance that transactions

are recorded as necessary to permit preparation of financial

statements in accordance with generally accepted accounting

principles, and that receipts and expenditures of the company

are being made only in accordance with authorizations of

management and directors of the company; and (iii) provide

reasonable assurance regarding prevention or timely

detection of unauthorized acquisition, use, or disposition of

the company’s assets that could have a material effect on the

financial statements.

Because of its inherent limitations, internal control over

financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future

periods are subject to the risk that controls may become

inadequate because of changes in conditions, or that the

degree of compliance with the policies or procedures may

deteriorate.

Critical Audit Matters

The critical audit matters communicated below are matters

arising from the current period audit of the consolidated

financial statements that were communicated or required to

be communicated to the audit committee and that (i) relate to

accounts or disclosures that are material to the consolidated

financial statements and (ii) involved our especially

challenging, subjective, or complex judgments. The

communication of critical audit matters does not alter in any

way our opinion on the consolidated financial statements,

taken as a whole, and we are not, by communicating the

critical audit matters below, providing separate opinions on

the critical audit matters or on the accounts or disclosures to

which they relate.

Valuation of Certain Level 3 Financial Instruments

As described in Notes 4 and 5 to the consolidated financial

statements, as of December 31, 2022, the Company carries

financial instruments at fair value, which includes $26.0

billion of financial assets and $22.8 billion of financial

liabilities classified in Level 3 of the fair value hierarchy, as

one or more inputs to the financial instrument’s valuation

technique are significant and unobservable. Significant

unobservable inputs used by management to value certain of

these Level 3 financial instruments included (i) industry

multiples and public comparables, (ii) credit spreads or (iii)

correlation.

The principal considerations for our determination that

performing procedures relating to the valuation of these

certain Level 3 financial instruments is a critical audit matter

are (i) the significant judgment by management in valuing the

financial instruments, which in turn led to a high degree of

auditor judgment, subjectivity, and effort in performing

procedures and evaluating audit evidence related to the

aforementioned significant unobservable inputs used in the

valuation of certain Level 3 financial instruments, and (ii) the

audit effort involved the use of professionals with specialized

skill and knowledge.

Addressing the matter involved performing procedures and

evaluating audit evidence in connection with forming our

overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of

controls relating to the valuation of financial instruments,

including controls over the methods and significant

unobservable inputs used in the valuation of certain Level 3

financial instruments. These procedures also included,

among others, for a sample of financial instruments, the

involvement of professionals with specialized skill and

knowledge to assist in (i) developing an independent estimate

of fair value or (ii) testing management’s process to

determine the fair value of these financial instruments.

Developing the independent estimate involved (i) testing the

completeness and accuracy of data provided by management,

(ii) evaluating and utilizing management’s significant

unobservable inputs or developing independent significant

unobservable inputs, and (iii) comparing management’s

estimate to the independently developed estimate of fair

value. Testing management’s process included evaluating the

reasonableness of the aforementioned significant

unobservable inputs, evaluating the appropriateness of the

techniques used, and testing the completeness and accuracy

of data used by management to determine the fair value of

these instruments.

Report of Independent Registered Public

Accounting Firm

Goldman Sachs 2022 Form 10-K 121

Allowance for Loan Losses - Wholesale Loan Portfolio

As described in Note 9 to the consolidated financial

statements, the Company’s allowance for loan losses for the

wholesale loan portfolio reflects management’s estimate of

loan losses over the remaining expected life of the loans and

also considers forecasts of future economic conditions. As of

December 31, 2022, $2.6 billion of the allowance for loan

losses and $150.4 billion of the loans accounted for at

amortized cost related to the wholesale loan portfolio. The

allowance for loan losses for the wholesale loan portfolio is

measured on a collective basis for loans that exhibit similar

risk characteristics using a modeled approach and on an

asset-specific basis for loans that do not share similar risk

characteristics. In addition, it includes qualitative

components to reflect the uncertain nature of economic

forecasting, capture uncertainty regarding model inputs, and

account for model imprecision and concentration risk. The

wholesale models determine the probability of default and

loss given default based on various risk factors, including

internal credit ratings, industry default and loss data,

expected life, macroeconomic indicators, the borrower’s

capacity to meet its financial obligations, the borrower’s

country of risk and industry, loan seniority and collateral

type. The most significant inputs to the forecast model for

wholesale loans include forecasted U.S. unemployment rates,

GDP, credit spreads, commercial and industrial delinquency

rates, short- and long-term interest rates, and oil prices.

The principal considerations for our determination that

performing procedures relating to the allowance for loan

losses for the wholesale loan portfolio is a critical audit

matter are (i) the significant judgment and estimation by

management in the determinations of internal credit ratings

and the forecasted U.S. unemployment rates, which in turn

led to a high degree of auditor judgment, subjectivity, and

effort in performing procedures and evaluating audit

evidence related to management’s determinations, and (ii) the

audit effort involved the use of professionals with specialized

skill and knowledge.

Addressing the matter involved performing procedures and

evaluating audit evidence in connection with forming our

overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of

controls relating to the Company’s allowance for loan losses

for the wholesale loan portfolio, including controls over the

model, certain data, and significant assumptions. These

procedures also included, among others, testing

management’s process for estimating the allowance for loan

losses for the wholesale loan portfolio using a modeled

approach, which involved evaluating the appropriateness of

the methodology and testing the completeness and accuracy

of certain data used in estimating the allowance for loan

losses. The procedures also involved the use of professionals

with specialized skill and knowledge to assist in evaluating (i)

the appropriateness of the model and methodology and (ii)

the reasonableness of the internal credit ratings and the

forecasted U.S. unemployment rates used in estimating the

allowance for loan losses for the wholesale loan portfolio.

/s/ PricewaterhouseCoopers LLP

New York, New York

February23, 2023

We have served as the Company’s auditor since 1922.

Report of Independent Registered Public

Accounting Firm

122

Goldman Sachs 2022 Form 10-K

Year Ended December

in millions, except per share amounts

2022 2021 2020

Revenues

Investment banking $ 7,360 $ 14,136 $ 9,100

Investment management 9,005 8,171 6,986

Commissions and fees 4,034 3,590 3,539

Market making 18,634 15,357 15,428

Other principal transactions 654 11,615 4,756

Total non-interest revenues 39,687 52,869 39,809

Interest income 29,024 12,120 13,689

Interest expense 21,346 5,650 8,938

Net interest income 7,678 6,470 4,751

Total net revenues 47,365 59,339 44,560

Provision for credit losses 2,715 357 3,098

Operating expenses

Compensation and benefits 15,148 17,719 13,309

Transaction based 5,312 4,710 4,141

Market development 812 553 401

Communications and technology 1,808 1,573 1,347

Depreciation and amortization 2,455 2,015 1,902

Occupancy 1,026 981 960

Professional fees 1,887 1,648 1,306

Other expenses 2,716 2,739 5,617

Total operating expenses 31,164 31,938 28,983

Pre-tax earnings 13,486 27,044 12,479

Provision for taxes 2,225 5,409 3,020

Net earnings 11,261 21,635 9,459

Preferred stock dividends 497 484 544

Net earnings applicable to common shareholders $ 10,764 $ 21,151 $ 8,915

Earnings per common share

Basic $ 30.42 $ 60.25 $ 24.94

Diluted $ 30.06 $ 59.45 $ 24.74

Average common shares

Basic 352.1 350.5 356.4

Diluted 358.1 355.8 360.3

Consolidated Statements of Comprehensive Income

Year Ended December

$ in millions 2022 2021 2020

Net earnings $ 11,261 $ 21,635 $ 9,459

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

Currency translation (47) (42) (80)

Debt valuation adjustment 1,403 322 (261)

Pension and postretirement liabilities (172) 41 (26)

Available-for-sale securities (2,126) (955) 417

Other comprehensive income/(loss) (942) (634) 50

Comprehensive income $ 10,319 $ 21,001 $ 9,509

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

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Consolidated Statements of Earnings

Goldman Sachs 2022 Form 10-K 123

As of December

$ in millions 2022 2021

Assets

Cash and cash equivalents $ 241,825 $ 261,036

Collateralized agreements:

Securities purchased under agreements to resell (at fair value) 225,117 205,703

Securities borrowed (includes $38,578 and $39,955 at fair value) 189,041 178,771

Customer and other receivables (includes $25 and $42 at fair value) 135,448 160,673

Trading assets (at fair value and includes $40,143 and $68,208 pledged as collateral) 301,245 375,916

Investments (includes $78,201 and $83,427 at fair value, and $9,818 and $12,840 pledged as collateral) 130,629 88,719

Loans (net of allowance of $5,543 and $3,573, and includes $7,655 and $10,769 at fair value) 179,286 158,562

Other assets (includes $145 and $0 at fair value) 39,208 34,608

Total assets $ 1,441,799 $ 1,463,988

Liabilities and shareholders’ equity

Deposits (includes $15,746 and $35,425 at fair value) $ 386,665 $ 364,227

Collateralized financings:

Securities sold under agreements to repurchase (at fair value) 110,349 165,883

Securities loaned (includes $4,372 and $9,170 at fair value) 30,727 46,505

Other secured financings (includes $12,756 and $17,074 at fair value) 13,946 18,544

Customer and other payables 262,045 251,931

Trading liabilities (at fair value) 191,324 181,424

Unsecured short-term borrowings (includes $39,731 and $29,832 at fair value) 60,961 46,955

Unsecured long-term borrowings (includes $73,147 and $52,390 at fair value) 247,138 254,092

Other liabilities (includes $159 and $359 at fair value) 21,455 24,501

Total liabilities 1,324,610 1,354,062

Commitments, contingencies and guarantees

Shareholders’ equity

Preferred stock; aggregate liquidation preference of $10,703 and $10,703 10,703 10,703

Common stock; 917,815,030 and 906,430,314 shares issued, and 334,918,639 and 333,573,254 shares outstanding 9 9

Share-based awards 5,696 4,211

Nonvoting common stock; no shares issued and outstanding – –

Additional paid-in capital 59,050 56,396

Retained earnings 139,372 131,811

Accumulated other comprehensive loss (3,010) (2,068)

Stock held in treasury, at cost; 582,896,393 and 572,857,062 shares (94,631) (91,136)

Total shareholders’ equity 117,189 109,926

Total liabilities and shareholders’ equity $ 1,441,799 $ 1,463,988

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

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

124

Goldman Sachs 2022 Form 10-K

Year Ended December

$ in millions 2022 2021 2020

Preferred stock

Beginning balance $ 10,703 $ 11,203 $ 11,203

Issued – 2,175 350

Redeemed – (2,675) (350)

Ending balance 10,703 10,703 11,203

Common stock

Beginning balance 9 9 9

Issued – – –

Ending balance 9 9 9

Share-based awards

Beginning balance 4,211 3,468 3,195

Issuance and amortization of share-based awards 4,110 2,527 1,967

Delivery of common stock underlying share-based awards (2,468) (1,626) (1,601)

Forfeiture of share-based awards (157) (158) (93)

Ending balance 5,696 4,211 3,468

Additional paid-in capital

Beginning balance 56,396 55,679 54,883

Delivery of common stock underlying share-based awards 2,516 1,678 1,619

Cancellation of share-based awards in satisfaction of withholding tax requirements (1,591) (984) (829)

Issuance costs of redeemed preferred stock – 24 –

Issuance of common stock in connection with acquisition 1,730 – –

Other (1) (1) 6

Ending balance 59,050 56,396 55,679

Retained earnings

Beginning balance, as previously reported 131,811 112,947 106,465

Cumulative effect of change in accounting principle for current expected credit losses, net of tax – – (638)

Beginning balance, adjusted 131,811 112,947 105,827

Net earnings 11,261 21,635 9,459

Dividends and dividend equivalents declared on common stock and share-based awards (3,203) (2,287) (1,795)

Dividends declared on preferred stock (497) (443) (543)

Preferred stock redemption premium – (41) (1)

Ending balance 139,372 131,811 112,947

Accumulated other comprehensive income/(loss)

Beginning balance (2,068) (1,434) (1,484)

Other comprehensive income/(loss) (942) (634) 50

Ending balance (3,010) (2,068) (1,434)

Stock held in treasury, at cost

Beginning balance (91,136) (85,940) (84,006)

Repurchased (3,500) (5,200) (1,928)

Reissued 20 11 11

Other (15) (7) (17)

Ending balance (94,631) (91,136) (85,940)

Total shareholders’ equity $ 117,189 $ 109,926 $ 95,932

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

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Consolidated Statements of Changes in Shareholders’ Equity

Goldman Sachs 2022 Form 10-K 125

Year Ended December

$ in millions 2022 2021 2020

Cash flows from operating activities

Net earnings $ 11,261 $ 21,635 $ 9,459

Adjustments to reconcile net earnings to net cash provided by/(used for) operating activities

Depreciation and amortization 2,455 2,015 1,902

Deferred income taxes (2,412) 5 (833)

Share-based compensation 4,083 2,348 1,920

Gain related to extinguishment of unsecured borrowings – – (1)

Provision for credit losses 2,715 357 3,098

Changes in operating assets and liabilities:

Customer and other receivables and payables, net 35,014 21,971 (30,895)

Collateralized transactions (excluding other secured financings), net (100,996) (70,058) (13,007)

Trading assets 45,278 15,232 (33,405)

Trading liabilities 8,062 26,616 44,892

Loans held for sale, net 3,161 (5,556) 1,820

Other, net 87 (8,267) (3,485)

Net cash provided by/(used for) operating activities 8,708 6,298 (18,535)

Cash flows from investing activities

Purchase of property, leasehold improvements and equipment (3,748) (4,667) (6,309)

Proceeds from sales of property, leasehold improvements and equipment 2,706 3,933 2,970

Net cash used for business acquisitions (2,115) – (231)

Purchase of investments (60,536) (39,912) (48,670)

Proceeds from sales and paydowns of investments 12,961 45,701 29,057

Loans (excluding loans held for sale), net (25,228) (35,520) (11,173)

Net cash used for investing activities (75,960) (30,465) (34,356)

Cash flows from financing activities

Unsecured short-term borrowings, net 321 2,137 7,707

Other secured financings (short-term), net (2,283) (1,320) 2,861

Proceeds from issuance of other secured financings (long-term) 1,800 4,795 8,073

Repayment of other secured financings (long-term), including the current portion (3,407) (6,590) (4,137)

Purchase of Trust Preferred securities – – (11)

Proceeds from issuance of unsecured long-term borrowings 84,522 92,717 47,250

Repayment of unsecured long-term borrowings, including the current portion (42,806) (52,608) (55,040)

Derivative contracts with a financing element, net 1,797 1,121 1,037

Deposits, net 28,074 103,538 67,343

Preferred stock redemption – (2,675) (350)

Common stock repurchased (3,500) (5,200) (1,928)

Settlement of share-based awards in satisfaction of withholding tax requirements (1,595) (985) (830)

Dividends and dividend equivalents paid on common stock, preferred stock and share-based awards (3,682) (2,725) (2,336)

Proceeds from issuance of preferred stock, net of issuance costs – 2,172 349

Other financing, net 361 361 392

Net cash provided by financing activities 59,602 134,738 70,380

Effect of exchange rate changes on cash and cash equivalents (11,561) (5,377) 4,807

Net increase/(decrease) in cash and cash equivalents (19,211) 105,194 22,296

Cash and cash equivalents, beginning balance 261,036 155,842 133,546

Cash and cash equivalents, ending balance $ 241,825 $ 261,036 $ 155,842

Supplemental disclosures:

Cash payments for interest, net of capitalized interest $ 19,022 $ 5,521 $ 9,091

Cash payments for income taxes, net $ 4,555 $ 6,195 $ 2,754

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

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

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

126

Goldman Sachs 2022 Form 10-K

Note 1.

Description of Business

The Goldman Sachs Group, Inc. (Group Inc. or parent

company), a Delaware corporation, together with its

consolidated subsidiaries (collectively, the firm), is a leading

global financial institution that delivers a broad range of

financial services to a large 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.

Commencing with the fourth quarter of 2022, consistent with

the firm's previously announced organizational changes, the

firm began managing and reporting its activities in the

following three business segments: Global Banking &

Markets, Asset & Wealth Management and Platform

Solutions. Prior periods are presented on a comparable basis.

Global Banking & Markets

The firm provides a broad range of services to a diverse

group of corporations, financial institutions, investment

funds and governments. Services include strategic advisory

assignments with respect to mergers and acquisitions,

divestitures, corporate defense activities, restructurings and

spin-offs, and equity and debt underwriting of public

offerings and private placements. The firm facilitates client

transactions and makes markets in fixed income, equity,

currency and commodity products. In addition, the firm

makes markets in and clears institutional client transactions

on major stock, options and futures exchanges worldwide

and provides prime brokerage and other equities financing

activities, including securities lending, margin lending and

swaps. The firm also provides lending to corporate clients,

including through relationship lending and acquisition

financing, and secured lending, through structured credit and

asset-backed lending. In addition, the firm provides financing

through securities purchased under agreements to resell

(resale agreements) and provides securities-based loans to

individuals. The firm also makes equity and debt investments

related to Global Banking & Markets activities.

Asset & Wealth Management

The firm manages assets and offers investment products

across all major asset classes to a diverse set of clients, both

institutional and individuals, including through a network of

third-party distributors around the world. The firm also

provides investing and wealth advisory solutions, including

financial planning and counseling, and executing brokerage

transactions for wealth management clients. The firm issues

loans to wealth management clients, accepts deposits

through its consumer banking digital platform, Marcus by

Goldman Sachs (Marcus), and through its private bank, and

provides investing services through Marcus Invest to U.S.

customers. The firm has also issued unsecured loans to

consumers through Marcus and has started a process to cease

offering new loans. The firm makes equity investments,

which include investing activities related to public and

private equity investments in corporate, real estate and

infrastructure assets, as well as investments through

consolidated investment entities, substantially all of which

are engaged in real estate investment activities. The firm also

invests in debt instruments and engages in lending activities

to middle-market clients, and provides financing for real

estate and other assets.

Platform Solutions

The firm issues credit cards through partnership

arrangements and provides point-of-sale financing through

GreenSky, Inc. (GreenSky) to consumers. The firm also

provides transaction banking and other services, including

cash management services, such as deposit-taking and

payment solutions for corporate and institutional clients.

Note 2.

Basis of Presentation

These consolidated financial statements are prepared in

accordance with accounting principles generally accepted in

the United States (U.S. GAAP) and include the accounts of

Group Inc. and all other entities in which the firm has a

controlling financial interest. Intercompany transactions and

balances have been eliminated.

All references to 2022, 2021 and 2020 refer to the firm’s years

ended, or the dates, as the context requires, December 31,

2022, December 31, 2021 and December 31, 2020,

respectively. Any reference to a future year refers to a year

ending on December 31 of that year. Certain reclassifications

have been made to previously reported amounts to conform

to the current presentation.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Goldman Sachs 2022 Form 10-K 127

Note 3.

Significant Accounting Policies

The firm’s significant accounting policies include when and

how to measure the fair value of assets and liabilities,

measuring the allowance for credit losses on loans and

lending commitments accounted for at amortized cost, and

when to consolidate an entity. See Note 4 for policies on fair

value measurements, Note 9 for policies on the allowance for

credit losses, and below and Note 17 for policies on

consolidation accounting. All other significant accounting

policies are either described below or included in the

following footnotes:

Fair Value Measurements Note 4

Fair Value Hierarchy Note 5

Trading Assets and Liabilities Note 6

Derivatives and Hedging Activities Note 7

Investments Note 8

Loans Note 9

Fair Value Option Note 10

Collateralized Agreements and Financings Note 11

Other Assets Note 12

Deposits Note 13

Unsecured Borrowings Note 14

Other Liabilities Note 15

Securitization Activities Note 16

Variable Interest Entities Note 17

Commitments, Contingencies and Guarantees Note 18

Shareholders’ Equity Note 19

Regulation and Capital Adequacy Note 20

Earnings Per Common Share Note 21

Transactions with Affiliated Funds Note 22

Interest Income and Interest Expense Note 23

Income Taxes Note 24

Business Segments Note 25

Credit Concentrations Note 26

Legal Proceedings Note 27

Employee Benefit Plans Note 28

Employee Incentive Plans Note 29

Parent Company Note 30

Consolidation

The firm consolidates entities in which the firm has a

controlling financial interest. The firm determines whether it

has a controlling financial interest in an entity by first

evaluating whether the entity is a voting interest entity or a

variable interest entity (VIE).

Voting Interest Entities. Voting interest entities are entities

in which (i) the total equity investment at risk is sufficient to

enable the entity to finance its activities independently and

(ii) the equity holders have the power to direct the activities

of the entity that most significantly impact its economic

performance, the obligation to absorb the losses of the entity

and the right to receive the residual returns of the entity. The

usual condition for a controlling financial interest in a voting

interest entity is ownership of a majority voting interest. If

the firm has a controlling majority voting interest in a voting

interest entity, the entity is consolidated.

Variable Interest Entities. A VIE is an entity that lacks one

or more of the characteristics of a voting interest entity. The

firm has a controlling financial interest in a VIE when the

firm has a variable interest or interests that provide it with (i)

the power to direct the activities of the VIE that most

significantly impact the VIE’s economic performance and (ii)

the obligation to absorb losses of the VIE or the right to

receive benefits from the VIE that could potentially be

significant to the VIE. See Note 17 for further information

about VIEs.

Equity-Method Investments. When the firm does not have

a controlling financial interest in an entity but can exert

significant influence over the entity’s operating and financial

policies, the investment is generally accounted for at fair

value by electing the fair value option available under U.S.

GAAP. Significant influence generally exists when the firm

owns 20% to 50% of the entity’s common stock or in-

substance common stock.

In certain cases, the firm applies the equity method of

accounting to new investments that are strategic in nature or

closely related to the firm’s principal business activities,

when the firm has a significant degree of involvement in the

cash flows or operations of the investee or when cost-benefit

considerations are less significant. See Note 8 for further

information about equity-method investments.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

128

Goldman Sachs 2022 Form 10-K

Investment Funds. The firm has formed investment funds

with third-party investors. These funds are typically

organized as limited partnerships or limited liability

companies for which the firm acts as general partner or

manager. Generally, the firm does not hold a majority of the

economic interests in these funds. These funds are usually

voting interest entities and generally are not consolidated

because third-party investors typically have rights to

terminate the funds or to remove the firm as general partner

or manager. Investments in these funds are generally

measured at net asset value (NAV) and are included in

investments. See Notes 8, 18 and 22 for further information

about investments in funds.

Use of Estimates

Preparation of these consolidated financial statements

requires management to make certain estimates and

assumptions, the most important of which relate to fair value

measurements, the allowance for credit losses on loans and

lending commitments accounted for at amortized cost,

accounting for goodwill and identifiable intangible assets,

provisions for losses that may arise from litigation and

regulatory proceedings (including governmental

investigations), and accounting for income taxes. These

estimates and assumptions are based on the best available

information, but actual results could be materially different.

Revenue Recognition

Financial Assets and Liabilities at Fair Value. Trading

assets and liabilities and certain investments are carried at

fair value either under the fair value option or in accordance

with other U.S. GAAP. In addition, the firm has elected to

account for certain of its loans and other financial assets and

liabilities at fair value by electing the fair value option. The

fair value of a financial instrument is the amount that would

be received to sell an asset or paid to transfer a liability in an

orderly transaction between market participants at the

measurement date. Financial assets are marked to bid prices

and financial liabilities are marked to offer prices. Fair value

measurements do not include transaction costs. Fair value

gains or losses are generally included in market making or

other principal transactions. See Note 4 for further

information about fair value measurements.

Revenue from Contracts with Clients. The firm

recognizes revenue earned from contracts with clients for

services, such as investment banking, investment

management, and execution and clearing (contracts with

clients), when the performance obligations related to the

underlying transaction are completed.

Revenues from contracts with clients represent

approximately 50% of total non-interest revenues for 2022

(including approximately 85% of investment banking

revenues, approximately 95% of investment management

revenues and all commissions and fees), approximately 45%

of total non-interest revenues for 2021 (including

approximately 90% of both investment banking revenues

and investment management revenues, and all commissions

and fees), and approximately 45% of total non-interest

revenues for 2020 (including approximately 90% of

investment banking revenues, approximately 95% of

investment management revenues and all commissions and

fees). See Note 25 for information about net revenues by

business segment.

Investment Banking

Advisory. Fees from financial advisory assignments are

recognized in revenues when the services related to the

underlying transaction are completed under the terms of the

assignment. Non-refundable deposits and milestone

payments in connection with financial advisory assignments

are recognized in revenues upon completion of the

underlying transaction or when the assignment is otherwise

concluded.

Expenses associated with financial advisory assignments are

recognized when incurred and are included in transaction

based expenses. Client reimbursements for such expenses are

included in investment banking revenues.

Underwriting. Fees from underwriting assignments are

recognized in revenues upon completion of the underlying

transaction based on the terms of the assignment.

Expenses associated with underwriting assignments are

generally deferred until the related revenue is recognized or

the assignment is otherwise concluded. Such expenses are

included in transaction based expenses for completed

assignments.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Goldman Sachs 2022 Form 10-K 129

Investment Management

The firm earns management fees and incentive fees for

investment management services, which are included in

investment management revenues. The firm makes payments

to brokers and advisors related to the placement of the firm’s

investment funds (distribution fees), which are included in

transaction based expenses.

Management Fees. Management fees for mutual funds are

calculated as a percentage of daily net asset value and are

received monthly. Management fees for hedge funds and

separately managed accounts are calculated as a percentage

of month-end net asset value and are generally received

quarterly. Management fees for private equity funds are

calculated as a percentage of monthly invested capital or

committed capital and are received quarterly, semi-annually

or annually, depending on the fund. Management fees are

recognized over time in the period the services are provided.

Distribution fees paid by the firm are calculated based on

either a percentage of the management fee, the investment

fund’s net asset value or the committed capital. Such fees are

included in transaction based expenses.

Incentive Fees. Incentive fees are calculated as a percentage

of a fund’s or separately managed account’s return, or excess

return above a specified benchmark or other performance

target. Incentive fees are generally based on investment

performance over a twelve-month period or over the life of a

fund. Fees that are based on performance over a twelve-

month period are subject to adjustment prior to the end of

the measurement period. For fees that are based on

investment performance over the life of the fund, future

investment underperformance may require fees previously

distributed to the firm to be returned to the fund.

Incentive fees earned from a fund or separately managed

account are recognized when it is probable that a significant

reversal of such fees will not occur, which is generally when

such fees are no longer subject to fluctuations in the market

value of investments held by the fund or separately managed

account. Therefore, incentive fees recognized during the

period may relate to performance obligations satisfied in

previous periods.

Commissions and Fees

The firm earns substantially all commissions and fees from

executing and clearing client transactions on stock, options

and futures markets, as well as over-the-counter (OTC)

transactions. Commissions and fees are recognized on the

day the trade is executed. The firm also provides third-party

research services to clients in connection with certain soft-

dollar arrangements. Third-party research costs incurred by

the firm in connection with such arrangements are presented

net within commissions and fees.

Remaining Performance Obligations

Remaining performance obligations are services that the firm

has committed to perform in the future in connection with its

contracts with clients. The firm’s remaining performance

obligations are generally related to its financial advisory

assignments and certain investment management activities.

Revenues associated with remaining performance obligations

relating to financial advisory assignments cannot be

determined until the outcome of the transaction. For the

firm’s investment management activities, where fees are

calculated based on the net asset value of the fund or

separately managed account, future revenues associated with

such remaining performance obligations cannot be

determined as such fees are subject to fluctuations in the

market value of investments held by the fund or separately

managed account.

The firm is able to determine the future revenues associated

with management fees calculated based on committed

capital. As of December 2022, substantially all future net

revenues associated with such remaining performance

obligations will be recognized through 2030. Annual

revenues associated with such performance obligations

average less than $300 million through 2030.

Transfers of Financial Assets

Transfers of financial assets are accounted for as sales when

the firm has relinquished control over the assets transferred.

For transfers of financial assets accounted for as sales, any

gains or losses are recognized in net revenues. Assets or

liabilities that arise from the firm’s continuing involvement

with transferred financial assets are initially recognized at

fair value. For transfers of financial assets that are not

accounted for as sales, the assets are generally included in

trading assets and the transfer is accounted for as a

collateralized financing, with the related interest expense

recognized over the life of the transaction. See Note 11 for

further information about transfers of financial assets

accounted for as collateralized financings and Note 16 for

further information about transfers of financial assets

accounted for as sales.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

130

Goldman Sachs 2022 Form 10-K

Cash and Cash Equivalents

The firm defines cash equivalents as highly liquid overnight

deposits held in the ordinary course of business. Cash and

cash equivalents included cash and due from banks of $7.87

billion as of December 2022 and $10.14 billion as of

December 2021. Cash and cash equivalents also included

interest-bearing deposits with banks of $233.96 billion as of

December 2022 and $250.90 billion as of December 2021.

The firm segregates cash for regulatory and other purposes

related to client activity. Cash and cash equivalents

segregated for regulatory and other purposes were $16.94

billion as of December 2022 and $24.87 billion as of

December 2021. In addition, the firm segregates securities for

regulatory and other purposes related to client activity. See

Note 11 for further information about segregated securities.

Customer and Other Receivables

Customer and other receivables included receivables from

customers and counterparties of $67.88 billion as of

December 2022 and $103.82 billion as of December 2021, and

receivables from brokers, dealers and clearing organizations

of $67.57 billion as of December 2022 and $56.85 billion as of

December 2021. Such receivables primarily consist of

collateral posted in connection with certain derivative

transactions, customer margin loans and receivables resulting

from unsettled transactions.

Substantially all of these receivables are accounted for at

amortized cost net of any allowance for credit losses, which

generally approximates fair value. As these receivables are

not accounted for at fair value, they are not included in the

firm’s fair value hierarchy in Notes 4 and 5. Had these

receivables been included in the firm’s fair value hierarchy,

substantially all would have been classified in level 2 as of

both December 2022 and December 2021. See Note 10 for

further information about customer and other receivables

accounted for at fair value under the fair value option.

Interest on customer and other receivables is recognized over

the life of the transaction and included in interest income.

Customer and other receivables includes receivables from

contracts with clients and contract assets. Contract assets

represent the firm’s right to receive consideration for services

provided in connection with its contracts with clients for

which collection is conditional and not merely subject to the

passage of time. The firm’s receivables from contracts with

clients were $3.01 billion as of both December 2022 and

December 2021. As of both December 2022 and December

2021, contract assets were not material.

Customer and Other Payables

Customer and other payables included payables to customers

and counterparties of $238.12 billion as of December 2022

and $241.93 billion as of December 2021, and payables to

brokers, dealers and clearing organizations of $23.93 billion

as of December 2022 and $10.00 billion as of December 2021.

Such payables primarily consist of customer credit balances

related to the firm’s prime brokerage activities. Customer

and other payables are accounted for at cost plus accrued

interest, which generally approximates fair value. As these

payables are not accounted for at fair value, they are not

included in the firm’s fair value hierarchy in Notes 4 and 5.

Had these payables been included in the firm’s fair value

hierarchy, substantially all would have been classified in level

2 as of both December 2022 and December 2021. Interest on

customer and other payables is recognized over the life of the

transaction and included in interest expense.

Offsetting Assets and Liabilities

To reduce credit exposures on derivatives and securities

financing transactions, the firm may enter into master netting

agreements or similar arrangements (collectively, netting

agreements) with counterparties that permit it to offset

receivables and payables with such counterparties. A netting

agreement is a contract with a counterparty that permits net

settlement of multiple transactions with that counterparty,

including upon the exercise of termination rights by a non-

defaulting party. Upon exercise of such termination rights,

all transactions governed by the netting agreement are

terminated and a net settlement amount is calculated. In

addition, the firm receives and posts cash and securities

collateral with respect to its derivatives and securities

financing transactions, subject to the terms of the related

credit support agreements or similar arrangements

(collectively, credit support agreements). An enforceable

credit support agreement grants the non-defaulting party

exercising termination rights the right to liquidate the

collateral and apply the proceeds to any amounts owed. In

order to assess enforceability of the firm’s right of setoff

under netting and credit support agreements, the firm

evaluates various factors, including applicable bankruptcy

laws, local statutes and regulatory provisions in the

jurisdiction of the parties to the agreement.

Derivatives are reported on a net-by-counterparty basis (i.e.,

the net payable or receivable for derivative assets and

liabilities for a given counterparty) in the consolidated

balance sheets when a legal right of setoff exists under an

enforceable netting agreement. Resale agreements and

securities sold under agreements to repurchase (repurchase

agreements) and securities borrowed and loaned transactions

with the same settlement date are presented on a net-by-

counterparty basis in the consolidated balance sheets when

such transactions meet certain settlement criteria and are

subject to netting agreements.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Goldman Sachs 2022 Form 10-K 131

In the consolidated balance sheets, derivatives are reported

net of cash collateral received and posted under enforceable

credit support agreements, when transacted under an

enforceable netting agreement. In the consolidated balance

sheets, resale and repurchase agreements, and securities

borrowed and loaned, are not reported net of the related cash

and securities received or posted as collateral. See Note 11 for

further information about collateral received and pledged,

including rights to deliver or repledge collateral. See Notes 7

and 11 for further information about offsetting assets and

liabilities.

Foreign Currency Translation

Assets and liabilities denominated in non-U.S. currencies are

translated at rates of exchange prevailing on the date of the

consolidated balance sheets and revenues and expenses are

translated at average rates of exchange for the period.

Foreign currency remeasurement gains or losses on

transactions in nonfunctional currencies are recognized in

earnings. Gains or losses on translation of the financial

statements of a non-U.S. operation, when the functional

currency is other than the U.S. dollar, are included, net of

hedges and taxes, in the consolidated statements of

comprehensive income.

Recent Accounting Developments

Facilitation of the Effects of Reference Rate Reform on

Financial Reporting (ASC 848). In March 2020, the FASB

issued ASU No. 2020-04, “Reference Rate Reform —

Facilitation of the Effects of Reference Rate Reform on

Financial Reporting.” This ASU, as amended in 2022,

provides optional relief from applying generally accepted

accounting principles to contracts, hedging relationships and

other transactions affected by reference rate reform. In

addition, in January 2021 the FASB issued ASU No. 2021-01,

“Reference Rate Reform — Scope,” which clarified the scope

of ASC 848 relating to contract modifications. The firm

adopted these ASUs upon issuance and elected to apply the

relief available to certain modified derivatives. The adoption

of these ASUs did not have a material impact on the firm’s

consolidated financial statements.

Troubled Debt Restructurings and Vintage Disclosures

(ASC 326). In March 2022, the FASB issued ASU No.

2022-02, “Financial Instruments — Credit Losses (Topic 326)

— Troubled Debt Restructurings and Vintage Disclosures.”

This ASU eliminates the recognition and measurement

guidance for troubled debt restructurings (TDRs) and

requires enhanced disclosures about loan modifications for

borrowers experiencing financial difficulty. This ASU also

requires enhanced disclosure for loans that have been

charged off. The ASU became effective in January 2023

under a prospective approach. Adoption of this ASU did not

have a material impact on the firm’s consolidated financial

statements.

Accounting for Obligations to Safeguard Crypto-

Assets an Entity Holds for Platform Users (SAB 121).

In March 2022, the SEC staff issued SAB 121 (SAB 121) —

“Accounting for obligations to safeguard crypto-assets an

entity holds for platform users.” SAB 121 adds interpretive

guidance requiring an entity to recognize a liability on its

balance sheet to reflect the obligation to safeguard the

crypto-assets held for its platform users, along with a

corresponding asset. The firm adopted SAB 121 in June 2022

under a modified retrospective approach and adoption did

not have a material impact on the firm’s consolidated

financial statements.

Fair Value Measurement of Equity Securities Subject

to Contractual Sale Restrictions (ASC 820). In June

2022, the FASB issued ASU No. 2022-03, “Fair Value

Measurement of Equity Securities Subject to Contractual Sale

Restrictions.” This ASU clarifies that a contractual

restriction on the sale of an equity security should not be

considered in measuring its fair value. In addition, the ASU

requires specific disclosures related to equity securities that

are subject to contractual sale restrictions. The ASU is

effective in January 2024 under a prospective approach. Early

adoption is permitted. Adoption of this ASU is not expected

to have a material impact on the firm’s consolidated financial

statements.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

132

Goldman Sachs 2022 Form 10-K

Note 4.

Fair Value Measurements

The fair value of a financial instrument is the amount that

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

liability in an orderly transaction between market

participants at the measurement date. Financial assets are

marked to bid prices and financial liabilities are marked to

offer prices. Fair value measurements do not include

transaction costs. The firm measures certain financial assets

and liabilities as a portfolio (i.e., based on its net exposure to

market and/or credit risks).

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

market. If quoted prices in active markets are not available,

fair value is determined by reference to prices for similar

instruments, quoted prices or recent transactions in less

active markets, or internally developed models that primarily

use market-based or independently sourced inputs, including,

but not limited to, interest rates, volatilities, equity or debt

prices, foreign exchange rates, commodity prices, credit

spreads and funding spreads (i.e., the spread or difference

between the interest rate at which a borrower could finance a

given financial instrument relative to a benchmark interest

rate).

U.S. GAAP has a three-level hierarchy for disclosure of fair

value measurements. This hierarchy prioritizes inputs to the

valuation techniques used to measure fair value, giving the

highest priority to level 1 inputs and the lowest priority to

level 3 inputs. A financial instrument’s level in this hierarchy

is based on the lowest level of input that is significant to its

fair value measurement. In evaluating the significance of a

valuation input, the firm considers, among other factors, a

portfolio’s net risk exposure to that input. The fair value

hierarchy is as follows:

Level 1. Inputs are unadjusted quoted prices in active

markets to which the firm had access at the measurement

date for identical, unrestricted assets or liabilities.

Level 2. Inputs to valuation techniques are observable, either

directly or indirectly.

Level 3. One or more inputs to valuation techniques are

significant and unobservable.

The fair values for substantially all of the firm’s financial

assets and liabilities are based on observable prices and

inputs and are classified in levels 1 and 2 of the fair value

hierarchy. Certain level 2 and level 3 financial assets and

liabilities may require valuation adjustments that a market

participant would require to arrive at fair value for factors,

such as counterparty and the firm’s credit quality, funding

risk, transfer restrictions, liquidity and bid/offer spreads.

Valuation adjustments are generally based on market

evidence.

The table below presents financial assets and liabilities

carried at fair value.

As of December

$ in millions 2022 2021

Total level 1 financial assets $ 194,698 $ 255,774

Total level 2 financial assets 485,134 498,527

Total level 3 financial assets 26,048 24,083

Investments in funds at NAV 2,941 3,469

Counterparty and cash collateral netting (57,855) (66,041)

Total financial assets at fair value $ 650,966 $ 715,812

Total assets $ 1,441,799 $ 1,463,988

Total level 3 financial assets divided by:

Total assets 1.8% 1.6%

Total financial assets at fair value 4.0% 3.4%

Total level 1 financial liabilities $ 119,578 $ 110,030

Total level 2 financial liabilities 353,060 403,627

Total level 3 financial liabilities 22,830 29,169

Counterparty and cash collateral netting (47,884) (51,269)

Total financial liabilities at fair value $ 447,584 $ 491,557

Total liabilities $ 1,324,610 $ 1,354,062

Total level 3 financial liabilities divided by:

Total liabilities 1.7%

2.2%

Total financial liabilities at fair value 5.1%

5.9%

In the table above:

• Counterparty netting among positions classified in the

same level is included in that level.

• Counterparty and cash collateral netting represents the

impact on derivatives of netting across levels.

The table below presents a summary of level 3 financial

assets.

As of December

$ in millions 2022 2021

Trading assets:

Trading cash instruments $ 1,734 $ 1,889

Derivatives 5,461 5,938

Investments 16,942 13,902

Loans 1,837 2,354

Other assets 74 –

Total $ 26,048 $ 24,083

Level 3 financial assets as of December 2022 increased

compared with December 2021, primarily reflecting an

increase in level 3 investments. See Note 5 for further

information about level 3 financial assets (including

information about unrealized gains and losses related to level

3 financial assets and transfers in and out of level 3).

The valuation techniques and nature of significant inputs

used to determine the fair value of the firm’s financial

instruments are described below. See Note 5 for further

information about significant unobservable inputs used to

value level 3 financial instruments.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Goldman Sachs 2022 Form 10-K 133

Valuation Techniques and Significant Inputs for

Trading Cash Instruments, Investments and Loans

Level 1. Level 1 instruments include U.S. government

obligations, most non-U.S. government obligations, certain

agency obligations, certain corporate debt instruments,

certain money market instruments and actively traded listed

equities. These instruments are valued using quoted prices for

identical unrestricted instruments in active markets. The firm

defines active markets for equity instruments based on the

average daily trading volume both in absolute terms and

relative to the market capitalization for the instrument. The

firm defines active markets for debt instruments based on

both the average daily trading volume and the number of

days with trading activity.

Level 2. Level 2 instruments include certain non-U.S.

government obligations, most agency obligations, most

mortgage-backed loans and securities, most corporate debt

instruments, most state and municipal obligations, most

money market instruments, most other debt obligations,

restricted or less liquid listed equities, certain private equities,

commodities and certain lending commitments.

Valuations of level 2 instruments can be verified to quoted

prices, recent trading activity for identical or similar

instruments, broker or dealer quotations or alternative

pricing sources with reasonable levels of price transparency.

Consideration is given to the nature of the quotations (e.g.,

indicative or executable) and the relationship of recent

market activity to the prices provided from alternative

pricing sources.

Valuation adjustments are typically made to level 2

instruments (i) if the instrument is subject to transfer

restrictions and/or (ii) for other premiums and liquidity

discounts that a market participant would require to arrive at

fair value. Valuation adjustments are generally based on

market evidence.

Level 3. Level 3 instruments have one or more significant

valuation inputs that are not observable. Absent evidence to

the contrary, level 3 instruments are initially valued at

transaction price, which is considered to be the best initial

estimate of fair value. Subsequently, the firm uses other

methodologies to determine fair value, which vary based on

the type of instrument. Valuation inputs and assumptions are

changed when corroborated by substantive observable

evidence, including values realized on sales.

Valuation techniques of level 3 instruments vary by

instrument, but are generally based on discounted cash flow

techniques. The valuation techniques and the nature of

significant inputs used to determine the fair values of each

type of level 3 instrument are described below:

Loans and Securities Backed by Commercial Real

Estate

Loans and securities backed by commercial real estate are

directly or indirectly collateralized by a single property or a

portfolio of properties, and may include tranches of varying

levels of subordination. Significant inputs are generally

determined based on relative value analyses and include:

• Market yields implied by transactions of similar or related

assets and/or current levels and changes in market indices,

such as the CMBX (an index that tracks the performance

of commercial mortgage bonds);

• Transaction prices in both the underlying collateral and

instruments with the same or similar underlying collateral;

• A measure of expected future cash flows in a default

scenario (recovery rates) implied by the value of the

underlying collateral, which is mainly driven by current

performance of the underlying collateral and capitalization

rates. Recovery rates are expressed as a percentage of

notional or face value of the instrument and reflect the

benefit of credit enhancements on certain instruments; and

• Timing of expected future cash flows (duration) which, in

certain cases, may incorporate the impact of any loan

forbearances and other unobservable inputs (e.g.,

prepayment speeds).

Loans and Securities Backed by Residential Real

Estate

Loans and securities backed by residential real estate are

directly or indirectly collateralized by portfolios of residential

real estate and may include tranches of varying levels of

subordination. Significant inputs are generally determined

based on relative value analyses, which incorporate

comparisons to instruments with similar collateral and risk

profiles. Significant inputs include:

• Market yields implied by transactions of similar or related

assets;

• Transaction prices in both the underlying collateral and

instruments with the same or similar underlying collateral;

• Cumulative loss expectations, driven by default rates,

home price projections, residential property liquidation

timelines, related costs and subsequent recoveries; and

• Duration, driven by underlying loan prepayment speeds

and residential property liquidation timelines.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

134

Goldman Sachs 2022 Form 10-K

Corporate Debt Instruments

Corporate debt instruments includes corporate loans, debt

securities and convertible debentures. Significant inputs for

corporate debt instruments are generally determined based

on relative value analyses, which incorporate comparisons

both to prices of credit default swaps that reference the same

or similar underlying instrument or entity and to other debt

instruments for the same or similar issuer for which

observable prices or broker quotations are available.

Significant inputs include:

• Market yields implied by transactions of similar or related

assets and/or current levels and trends of market indices,

such as the CDX (an index that tracks the performance of

corporate credit);

• Current performance and recovery assumptions and, where

the firm uses credit default swaps to value the related

instrument, the cost of borrowing the underlying reference

obligation;

• Duration; and

• Market and transaction multiples for corporate debt

instruments with convertibility or participation options.

Equity Securities

Equity securities consists of private equities. Recent third-

party completed or pending transactions (e.g., merger

proposals, debt restructurings, tender offers) are considered

the best evidence for any change in fair value. When these are

not available, the following valuation methodologies are

used, as appropriate:

• Industry multiples (primarily EBITDA and revenue

multiples) and public comparables;

• Transactions in similar instruments;

• Discounted cash flow techniques; and

• Third-party appraisals.

The firm also considers changes in the outlook for the

relevant industry and financial performance of the issuer as

compared to projected performance. Significant inputs

include:

• Market and transaction multiples;

• Discount rates and capitalization rates; and

• For equity securities with debt-like features, market yields

implied by transactions of similar or related assets, current

performance and recovery assumptions, and duration.

Other Trading Cash Instruments, Investments and

Loans

The significant inputs to the valuation of other instruments,

such as non-U.S. government and agency obligations, state

and municipal obligations, and other loans and debt

obligations are generally determined based on relative value

analyses, which incorporate comparisons both to prices of

credit default swaps that reference the same or similar

underlying instrument or entity and to other debt instruments

for the same issuer for which observable prices or broker

quotations are available. Significant inputs include:

• Market yields implied by transactions of similar or related

assets and/or current levels and trends of market indices;

• Current performance and recovery assumptions and, where

the firm uses credit default swaps to value the related

instrument, the cost of borrowing the underlying reference

obligation; and

• Duration.

Valuation Techniques and Significant Inputs for

Derivatives

The firm’s level 2 and level 3 derivatives are valued using

derivative pricing models (e.g., discounted cash flow models,

correlation models and models that incorporate option

pricing methodologies, such as Monte Carlo simulations).

Price transparency of derivatives can generally be

characterized by product type, as described below.

• Interest Rate. In general, the key inputs used to value

interest rate derivatives are transparent, even for most

long-dated contracts. Interest rate swaps and options

denominated in the currencies of leading industrialized

nations are characterized by high trading volumes and tight

bid/offer spreads. Interest rate derivatives that reference

indices, such as an inflation index, or the shape of the yield

curve (e.g., 10-year swap rate vs. 2-year swap rate) are

more complex, but the key inputs are generally observable.

• Credit. Price transparency for credit default swaps,

including both single names and baskets of credits, varies

by market and underlying reference entity or obligation.

Credit default swaps that reference indices, large

corporates and major sovereigns generally exhibit the most

price transparency. For credit default swaps with other

underliers, price transparency varies based on credit rating,

the cost of borrowing the underlying reference obligations,

and the availability of the underlying reference obligations

for delivery upon the default of the issuer. Credit default

swaps that reference loans, asset-backed securities and

emerging market debt instruments tend to have less price

transparency than those that reference corporate bonds. In

addition, more complex credit derivatives, such as those

sensitive to the correlation between two or more

underlying reference obligations, generally have less price

transparency.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Goldman Sachs 2022 Form 10-K 135

• Currency. Prices for currency derivatives based on the

exchange rates of leading industrialized nations, including

those with longer tenors, are generally transparent. The

primary difference between the price transparency of

developed and emerging market currency derivatives is that

emerging markets tend to be only observable for contracts

with shorter tenors.

• Commodity. Commodity derivatives include transactions

referenced to energy (e.g., oil, natural gas and electricity),

metals (e.g., precious and base) and soft commodities (e.g.,

agricultural). Price transparency varies based on the

underlying commodity, delivery location, tenor and

product quality (e.g., diesel fuel compared to unleaded

gasoline). In general, price transparency for commodity

derivatives is greater for contracts with shorter tenors and

contracts that are more closely aligned with major and/or

benchmark commodity indices.

• Equity. Price transparency for equity derivatives varies by

market and underlier. Options on indices and the common

stock of corporates included in major equity indices exhibit

the most price transparency. Equity derivatives generally

have observable market prices, except for contracts with

long tenors or reference prices that differ significantly from

current market prices. More complex equity derivatives,

such as those sensitive to the correlation between two or

more individual stocks, generally have less price

transparency.

Liquidity is essential to the observability of all product types.

If transaction volumes decline, previously transparent prices

and other inputs may become unobservable. Conversely, even

highly structured products may at times have trading

volumes large enough to provide observability of prices and

other inputs.

Level 1. Level 1 derivatives include short-term contracts for

future delivery of securities when the underlying security is a

level 1 instrument, and exchange-traded derivatives if they

are actively traded and are valued at their quoted market

price.

Level 2. Level 2 derivatives include OTC derivatives for

which all significant valuation inputs are corroborated by

market evidence and exchange-traded derivatives that are not

actively traded and/or that are valued using models that

calibrate to market-clearing levels of OTC derivatives.

The selection of a particular model to value a derivative

depends on the contractual terms of and specific risks

inherent in the instrument, as well as the availability of

pricing information in the market. For derivatives that trade

in liquid markets, model selection does not involve significant

management judgment because outputs of models can be

calibrated to market-clearing levels.

Valuation models require a variety of inputs, such as

contractual terms, market prices, yield curves, discount rates

(including those derived from interest rates on collateral

received and posted as specified in credit support agreements

for collateralized derivatives), credit curves, measures of

volatility, prepayment rates, loss severity rates and

correlations of such inputs. Significant inputs to the

valuations of level 2 derivatives can be verified to market

transactions, broker or dealer quotations or other alternative

pricing sources with reasonable levels of price transparency.

Consideration is given to the nature of the quotations (e.g.,

indicative or executable) and the relationship of recent

market activity to the prices provided from alternative

pricing sources.

Level 3. Level 3 derivatives are valued using models which

utilize observable level 1 and/or level 2 inputs, as well as

unobservable level 3 inputs. The significant unobservable

inputs used to value the firm’s level 3 derivatives are

described below.

• For level 3 interest rate and currency derivatives, significant

unobservable inputs include correlations of certain

currencies and interest rates (e.g., the correlation between

Euro inflation and Euro interest rates) and specific interest

rate and currency volatilities.

• For level 3 credit derivatives, significant unobservable

inputs include illiquid credit spreads and upfront credit

points, which are unique to specific reference obligations

and reference entities, and recovery rates.

• For level 3 commodity derivatives, significant unobservable

inputs include volatilities for options with strike prices that

differ significantly from current market prices and prices or

spreads for certain products for which the product quality

or physical location of the commodity is not aligned with

benchmark indices.

• For level 3 equity derivatives, significant unobservable

inputs generally include equity volatility inputs for options

that are long-dated and/or have strike prices that differ

significantly from current market prices. In addition, the

valuation of certain structured trades requires the use of

level 3 correlation inputs, such as the correlation of the

price performance of two or more individual stocks or the

correlation of the price performance for a basket of stocks

to another asset class, such as commodities.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

136

Goldman Sachs 2022 Form 10-K

Subsequent to the initial valuation of a level 3 derivative, the

firm updates the level 1 and level 2 inputs to reflect

observable market changes and any resulting gains and losses

are classified in level 3. Level 3 inputs are changed when

corroborated by evidence, such as similar market

transactions, third-party pricing services and/or broker or

dealer quotations or other empirical market data. In

circumstances where the firm cannot verify the model value

by reference to market transactions, it is possible that a

different valuation model could produce a materially

different estimate of fair value. See Note 5 for further

information about significant unobservable inputs used in the

valuation of level 3 derivatives.

Valuation Adjustments. Valuation adjustments are

integral to determining the fair value of derivative portfolios

and are used to adjust the mid-market valuations produced

by derivative pricing models to the exit price valuation. These

adjustments incorporate bid/offer spreads, the cost of

liquidity, and credit and funding valuation adjustments,

which account for the credit and funding risk inherent in the

uncollateralized portion of derivative portfolios. The firm

also makes funding valuation adjustments to collateralized

derivatives where the terms of the agreement do not permit

the firm to deliver or repledge collateral received. Market-

based inputs are generally used when calibrating valuation

adjustments to market-clearing levels.

In addition, for derivatives that include significant

unobservable inputs, the firm makes model or exit price

adjustments to account for the valuation uncertainty present

in the transaction.

Valuation Techniques and Significant Inputs for Other

Financial Instruments at Fair Value

In addition to trading cash instruments, derivatives, and

certain investments and loans, the firm accounts for certain

of its other financial assets and liabilities at fair value under

the fair value option. Such instruments include resale and

repurchase agreements; certain securities borrowed and

loaned transactions; certain customer and other receivables,

including certain margin loans; certain time deposits,

including structured certificates of deposit, which are hybrid

financial instruments; substantially all other secured

financings, including transfers of assets accounted for as

financings; certain unsecured short- and long-term

borrowings, substantially all of which are hybrid financial

instruments; and certain other assets and liabilities. These

instruments are generally valued based on discounted cash

flow techniques, which incorporate inputs with reasonable

levels of price transparency, and are generally classified in

level 2 because the inputs are observable. Valuation

adjustments may be made for liquidity and for counterparty

and the firm’s credit quality. The significant inputs used to

value the firm’s other financial instruments are described

below.

Resale and Repurchase Agreements and Securities

Borrowed and Loaned. The significant inputs to the

valuation of resale and repurchase agreements and securities

borrowed and loaned are funding spreads, the amount and

timing of expected future cash flows and interest rates.

Customer and Other Receivables. The significant inputs

to the valuation of receivables are interest rates, the amount

and timing of expected future cash flows and funding

spreads.

Deposits. The significant inputs to the valuation of time

deposits are interest rates and the amount and timing of

future cash flows. The inputs used to value the embedded

derivative component of hybrid financial instruments are

consistent with the inputs used to value the firm’s other

derivative instruments described above. See Note 7 for

further information about derivatives and Note 13 for further

information about deposits.

Other Secured Financings. The significant inputs to the

valuation of other secured financings are the amount and

timing of expected future cash flows, interest rates, funding

spreads and the fair value of the collateral delivered by the

firm (determined using the amount and timing of expected

future cash flows, market prices, market yields and recovery

assumptions). See Note 11 for further information about

other secured financings.

Unsecured Short- and Long-Term Borrowings. The

significant inputs to the valuation of unsecured short- and

long-term borrowings are the amount and timing of expected

future cash flows, interest rates, the credit spreads of the firm

and commodity prices for prepaid commodity transactions.

The inputs used to value the embedded derivative component

of hybrid financial instruments are consistent with the inputs

used to value the firm’s other derivative instruments

described above. See Note 7 for further information about

derivatives and Note 14 for further information about

borrowings.

Other Assets and Liabilities. The significant inputs to the

valuation of other assets and liabilities are the amount and

timing of expected future cash flows, interest rates, market

yields, volatility and correlation inputs. The inputs used to

value the embedded derivative component of hybrid financial

instruments are consistent with the inputs used to value the

firm’s other derivative instruments described above. See Note

7 for further information about derivatives.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Goldman Sachs 2022 Form 10-K 137

Note 5.

Fair Value Hierarchy

Financial assets and liabilities at fair value includes trading

cash instruments, derivatives, and certain investments, loans

and other financial assets and liabilities at fair value.

Fair Value of Trading Cash Instruments by Level

The table below presents trading cash instruments by level

within the fair value hierarchy.

$ in millions Level 1 Level 2 Level 3 Total

As of December 2022

Assets

Government and agency obligations:

U.S. $ 75,598 $ 31,783 $ – $ 107,381

Non-U.S. 22,794 15,238 67 38,099

Loans and securities backed by:

Commercial real estate – 1,135 66 1,201

Residential real estate – 9,706 88 9,794

Corporate debt instruments 249 27,555 1,238 29,042

State and municipal obligations – 707 20 727

Other debt obligations 27 2,349 153 2,529

Equity securities 44,909 2,141 100 47,150

Commodities – 5,907 2 5,909

Total $ 143,577 $ 96,521 $ 1,734 $ 241,832

Liabilities

Government and agency obligations:

U.S. $ (23,339) $ (36) $ – $ (23,375)

Non-U.S. (28,537) (2,172) – (30,709)

Loans and securities backed by:

Commercial real estate – (30) – (30)

Residential real estate – (16) – (16)

Corporate debt instruments (64) (14,217) (61) (14,342)

Other debt obligations – (35) (2) (37)

Equity securities (67,591) (488) (1) (68,080)

Commodities – – – –

Total $ (119,531) $ (16,994) $ (64) $ (136,589)

As of December 2021

Assets

Government and agency obligations:

U.S. $ 63,388 $ 27,427 $ – $ 90,815

Non-U.S. 35,284 13,511 19 48,814

Loans and securities backed by:

Commercial real estate – 1,717 137 1,854

Residential real estate – 13,083 152 13,235

Corporate debt instruments 590 36,874 1,318 38,782

State and municipal obligations – 568 36 604

Other debt obligations 69 1,564 66 1,699

Equity securities 105,233 2,958 156 108,347

Commodities – 7,801 5 7,806

Total $ 204,564 $ 105,503 $ 1,889 $ 311,956

Liabilities

Government and agency obligations:

U.S. $ (21,002) $ (25) $ – $ (21,027)

Non-U.S. (39,983) (2,602) – (42,585)

Loans and securities backed by:

Commercial real estate – (40) (2) (42)

Residential real estate – (5) – (5)

Corporate debt instruments (23) (15,781) (71) (15,875)

Equity securities (48,991) (915) (31) (49,937)

Total $ (109,999) $ (19,368) $ (104) $ (129,471)

Trading cash instruments consists of instruments held in

connection with the firm’s market-making or risk

management activities. These instruments are carried at fair

value and the related fair value gains and losses are

recognized in the consolidated statements of earnings.

In the table above:

• Trading cash instrument assets are shown as positive

amounts and trading cash instrument liabilities are shown

as negative amounts.

• Corporate debt instruments includes corporate loans, debt

securities, convertible debentures, prepaid commodity

transactions and transfers of assets accounted for as

secured loans rather than purchases.

• Other debt obligations includes other asset-backed

securities and money market instruments.

• Equity securities includes public equities and exchange-

traded funds.

See Note 4 for an overview of the firm’s fair value

measurement policies, valuation techniques and significant

inputs used to determine the fair value of trading cash

instruments.

Significant Unobservable Inputs for Trading Cash

Instrument Assets

The table below presents the amount of level 3 assets, and

ranges and weighted averages of significant unobservable

inputs used to value level 3 trading cash instrument assets.

As of December 2022 As of December 2021

$ in millions

Amount or

Range

Weighted

Average

Amount or

Range

Weighted

Average

Loans and securities backed by real estate

Level 3 assets $ 154 $ 289

Yield 3.0% to 36.0% 14.2% 0.4% to 28.5% 9.7%

Recovery rate 35.8% to 76.1% 54.7% 5.1% to 86.5% 55.0%

Cumulative loss rate

3.7% to 29.9% 10.4% 0.1% to 43.4% 17.7%

Duration (years) 0.9 to 12.3 4.6 0.1 to 17.2 4.3

Corporate debt instruments

Level 3 assets $ 1,238 $ 1,318

Yield 1.1% to 34.3% 6.9% 0.0% to 18.0% 7.1%

Recovery rate 11.5% to 77.0% 48.0% 9.0% to 69.9% 52.0%

Duration (years) 0.3 to 20.3 4.5 2.0 to 28.5 4.5

Other

Level 3 assets $ 342 $ 282

Yield 2.8% to 47.8% 10.0% 1.1% to 44.8% 9.4%

Multiples 3.3x to 4.5x 4.3x N/A N/A

Duration (years) 1.2 to 14.4 6.1 0.9 to 5.2 2.4

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

138

Goldman Sachs 2022 Form 10-K

In the table above:

• Other includes government and agency obligations, state

and municipal obligations, other debt obligations, equity

securities and commodities. In other, the significant

unobservable inputs for multiples as of December 2021 did

not have a range (and there was no weighted average) as

each pertained to a single position. Therefore, such

unobservable inputs are not included in the table above.

• Ranges represent the significant unobservable inputs that

were used in the valuation of each type of trading cash

instrument.

• Weighted averages are calculated by weighting each input

by the relative fair value of the trading cash instruments.

• The ranges and weighted averages of these inputs are not

representative of the appropriate inputs to use when

calculating the fair value of any one trading cash

instrument. For example, the highest recovery rate for

corporate debt instruments is appropriate for valuing a

specific corporate debt instrument, but may not be

appropriate for valuing any other corporate debt

instrument. Accordingly, the ranges of inputs do not

represent uncertainty in, or possible ranges of, fair value

measurements of level 3 trading cash instruments.

• Increases in yield, duration or cumulative loss rate used in

the valuation of level 3 trading cash instruments would

have resulted in a lower fair value measurement, while

increases in recovery rate or multiples would have resulted

in a higher fair value measurement as of both December

2022 and December 2021. Due to the distinctive nature of

each level 3 trading cash instrument, the interrelationship

of inputs is not necessarily uniform within each product

type.

• Trading cash instruments are valued using discounted cash

flows.

Level 3 Rollforward for Trading Cash Instruments

The table below presents a summary of the changes in fair

value for level 3 trading cash instruments.

Year Ended December

$ in millions 2022 2021

Assets

Beginning balance $ 1,889 $ 1,237

Net realized gains/(losses) 167 80

Net unrealized gains/(losses) (1,889) 52

Purchases 1,271 1,241

Sales (704) (456)

Settlements (345) (273)

Transfers into level 3 1,680 272

Transfers out of level 3 (335) (264)

Ending balance $ 1,734 $ 1,889

Liabilities

Beginning balance $ (104) $ (80)

Net realized gains/(losses) 18 6

Net unrealized gains/(losses) 65 (5)

Purchases 137 36

Sales (106) (64)

Settlements 5 13

Transfers into level 3 (89) (16)

Transfers out of level 3 10 6

Ending balance $ (64) $ (104)

In the table above:

• Changes in fair value are presented for all trading cash

instruments that are classified in level 3 as of the end of the

period.

• Net unrealized gains/(losses) relates to trading cash

instruments that were still held at period-end.

• Transfers between levels of the fair value hierarchy are

reported at the beginning of the reporting period in which

they occur. If a trading cash instrument was transferred to

level 3 during a reporting period, its entire gain or loss for

the period is classified in level 3.

• For level 3 trading cash instrument assets, increases are

shown as positive amounts, while decreases are shown as

negative amounts. For level 3 trading cash instrument

liabilities, increases are shown as negative amounts, while

decreases are shown as positive amounts.

• Level 3 trading cash instruments are frequently

economically hedged with level 1 and level 2 trading cash

instruments and/or level 1, level 2 or level 3 derivatives.

Accordingly, gains or losses that are classified in level 3 can

be partially offset by gains or losses attributable to level 1

or level 2 trading cash instruments and/or level 1, level 2 or

level 3 derivatives. As a result, gains or losses included in

the level 3 rollforward below do not necessarily represent

the overall impact on the firm’s results of operations,

liquidity or capital resources.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Goldman Sachs 2022 Form 10-K 139

The table below presents information, by product type, for

assets included in the summary table above.

Year Ended December

$ in millions 2022 2021

Loans and securities backed by real estate

Beginning balance $ 289 $ 334

Net realized gains/(losses) 11 12

Net unrealized gains/(losses) (11) 3

Purchases 51 135

Sales (127) (75)

Settlements (26) (53)

Transfers into level 3 19 42

Transfers out of level 3 (52) (109)

Ending balance $ 154 $ 289

Corporate debt instruments

Beginning balance $ 1,318 $ 797

Net realized gains/(losses) 29 57

Net unrealized gains/(losses) (111) 28

Purchases 607 894

Sales (372) (330)

Settlements (247) (182)

Transfers into level 3 278 207

Transfers out of level 3 (264) (153)

Ending balance $ 1,238 $ 1,318

Other

Beginning balance $ 282 $ 106

Net realized gains/(losses) 127 11

Net unrealized gains/(losses) (1,767) 21

Purchases 613 212

Sales (205) (51)

Settlements (72) (38)

Transfers into level 3 1,383 23

Transfers out of level 3 (19) (2)

Ending balance $ 342 $ 282

In the table above, other includes government and agency

obligations, state and municipal obligations, other debt

obligations, equity securities and commodities.

Level 3 Rollforward Commentary for Trading Cash

Instruments

Year Ended December 2022. The net realized and

unrealized losses on level 3 trading cash instrument assets of

$1.72 billion (reflecting $167 million of net realized gains and

$1.89 billion of net unrealized losses) for 2022 included gains/

(losses) of $(1.77) billion reported in market making and $54

million reported in interest income.

The net unrealized losses on level 3 trading cash instrument

assets for 2022 primarily reflected losses on certain equity

securities (included in other cash instruments), principally

driven by broad macroeconomic and geopolitical concerns.

Transfers into level 3 trading cash instrument assets during

2022 primarily reflected transfers of certain equity securities

(included in other cash instruments) and corporate debt

instruments from both level 1 and level 2 (in each case,

principally due to reduced price transparency as a result of a

lack of market evidence, including fewer market transactions

in these instruments).

Transfers out of level 3 trading cash instrument assets during

2022 primarily reflected transfers of certain corporate debt

instruments to level 2 (principally due to increased price

transparency as a result of market evidence, including market

transactions in these instruments).

Year Ended December 2021. The net realized and

unrealized gains on level 3 trading cash instrument assets of

$132million (reflecting $80million of net realized gains and

$52million of net unrealized gains) for 2021 included gains of

$45 million reported in market making and $87 million

reported in interest income.

The drivers of the net unrealized gains on level 3 trading cash

instrument assets for 2021 were not material.

Transfers into level 3 trading cash instrument assets during

2021 primarily reflected transfers of certain corporate debt

instruments from level 2 (principally due to certain

unobservable yield and duration inputs becoming significant

to the valuation of these instruments, and reduced price

transparency as a result of a lack of market evidence,

including fewer market transactions in these instruments).

Transfers out of level 3 trading cash instrument assets during

2021 primarily reflected transfers of certain corporate debt

instruments, and loans and securities backed by real estate to

level 2 (in each case, principally due to increased price

transparency as a result of market evidence, including market

transactions in these instruments, and certain unobservable

yield and duration inputs no longer being significant to the

valuation of these instruments).

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

140

Goldman Sachs 2022 Form 10-K

Fair Value of Derivatives by Level

The table below presents derivatives on a gross basis by level

and product type, as well as the impact of netting.

$ in millions Level 1 Level 2 Level 3 Total

As of December 2022

Assets

Interest rates $ 69 $ 269,590 $ 700 $ 270,359

Credit – 9,690 2,577 12,267

Currencies – 103,450 494 103,944

Commodities – 38,331 1,609 39,940

Equities 113 49,481 967 50,561

Gross fair value 182 470,542 6,347 477,071

Counterparty netting in levels – (358,917) (886) (359,803)

Subtotal $ 182 $ 111,625 $ 5,461 $ 117,268

Cross-level counterparty netting (1,079)

Cash collateral netting (56,776)

Net fair value $ 59,413

Liabilities

Interest rates $ (32) $ (247,871) $ (1,159) $ (249,062)

Credit – (10,163) (1,117) (11,280)

Currencies – (111,840) (332) (112,172)

Commodities – (32,435) (690) (33,125)

Equities (15) (55,240) (1,528) (56,783)

Gross fair value (47) (457,549) (4,826) (462,422)

Counterparty netting in levels – 358,917 886 359,803

Subtotal $ (47) $ (98,632) $ (3,940) $ (102,619)

Cross-level counterparty netting 1,079

Cash collateral netting 46,805

Net fair value $ (54,735)

As of December 2021

Assets

Interest rates $ 2 $ 246,525 $ 1,065 $ 247,592

Credit – 12,823 3,433 16,256

Currencies – 86,773 237 87,010

Commodities – 34,501 1,044 35,545

Equities 33 72,570 963 73,566

Gross fair value 35 453,192 6,742 459,969

Counterparty netting in levels – (329,164) (804) (329,968)

Subtotal $ 35 $ 124,028 $ 5,938 $ 130,001

Cross-level counterparty netting (1,924)

Cash collateral netting (64,117)

Net fair value $ 63,960

Liabilities

Interest rates $ (2) $ (217,438) $ (882) $ (218,322)

Credit – (14,176) (1,579) (15,755)

Currencies – (85,925) (384) (86,309)

Commodities – (31,925) (606) (32,531)

Equities (29) (77,393) (2,851) (80,273)

Gross fair value (31) (426,857) (6,302) (433,190)

Counterparty netting in levels – 329,164 804 329,968

Subtotal $ (31) $ (97,693) $ (5,498) $ (103,222)

Cross-level counterparty netting

1,924

Cash collateral netting

49,345

Net fair value $ (51,953)

In the table above:

• Gross fair values exclude the effects of both counterparty

netting and collateral netting, and therefore are not

representative of the firm’s exposure.

• Counterparty netting is reflected in each level to the extent

that receivable and payable balances are netted within the

same level and is included in counterparty netting in levels.

Where the counterparty netting is across levels, the netting

is included in cross-level counterparty netting.

• Derivative assets are shown as positive amounts and

derivative liabilities are shown as negative amounts.

See Note 4 for an overview of the firm’s fair value

measurement policies, valuation techniques and significant

inputs used to determine the fair value of derivatives.

Significant Unobservable Inputs for Derivatives

The table below presents the amount of level 3 derivative

assets (liabilities), and ranges, averages and medians of

significant unobservable inputs used to value level 3

derivatives.

As of December 2022 As of December 2021

$ in millions, except inputs

Amount or

Range

Average/

Median

Amount or

Range

Average/

Median

Interest rates, net $ (459) $ 183

Correlation

(10)% to 81%

61%/60% 25% to 81% 63%/62%

Volatility (bps) 31 to 101 60/57 31 to 100 59/54

Credit, net $ 1,460 $ 1,854

Credit spreads (bps) 5 to 935 149/116 1 to 568 136/107

Upfront credit points (1) to 100 29/18 2 to 100 34/26

Recovery rates 20% to 50% 40%/40% 20% to 50% 37%/40%

Currencies, net $ 162 $ (147)

Correlation 20% to 71% 40%/23% 20% to 71% 40%/41%

Volatility 20% to 21% 20%/20% 19% to 19% 19%/19%

Commodities, net $ 919 $ 438

Volatility

20% to 118%

50%/46% 15% to 93% 32%/29%

Natural gas spread

$(3.21) to

$5.85

$(0.20)/

$(0.27)

$(1.33) to

$2.60

$(0.11)/

$(0.07)

Oil spread

$12.68 to

$48.92

$20.42/

$20.36

$8.64 to

$22.68

$13.36/

$12.69

Electricity price

$3.00 to

$329.28

$47.19/

$39.69

$1.50 to

$289.96

$37.42/

$32.20

Equities, net $ (561) $ (1,888)

Correlation

(75)% to 100%

66%/75%

(70)% to 99%

59%/62%

Volatility 2% to 74% 13%/7% 3% to 150% 17%/17%

In the table above:

• Derivative assets are shown as positive amounts and

derivative liabilities are shown as negative amounts.

• Ranges represent the significant unobservable inputs that

were used in the valuation of each type of derivative.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Goldman Sachs 2022 Form 10-K 141

• Averages represent the arithmetic average of the inputs and

are not weighted by the relative fair value or notional

amount of the respective financial instruments. An average

greater than the median indicates that the majority of

inputs are below the average. For example, the difference

between the average and the median for credit spreads

indicates that the majority of the inputs fall in the lower

end of the range.

• The ranges, averages and medians of these inputs are not

representative of the appropriate inputs to use when

calculating the fair value of any one derivative. For

example, the highest correlation for interest rate derivatives

is appropriate for valuing a specific interest rate derivative

but may not be appropriate for valuing any other interest

rate derivative. Accordingly, the ranges of inputs do not

represent uncertainty in, or possible ranges of, fair value

measurements of level 3 derivatives.

• Interest rates, currencies and equities derivatives are valued

using option pricing models, credit derivatives are valued

using option pricing, correlation and discounted cash flow

models, and commodities derivatives are valued using

option pricing and discounted cash flow models.

• The fair value of any one instrument may be determined

using multiple valuation techniques. For example, option

pricing models and discounted cash flow models are

typically used together to determine fair value. Therefore,

the level 3 balance encompasses both of these techniques.

• Correlation within currencies and equities includes cross-

product type correlation.

• Natural gas spread represents the spread per million British

thermal units of natural gas.

• Oil spread represents the spread per barrel of oil and

refined products.

• Electricity price represents the price per megawatt hour of

electricity.

Range of Significant Unobservable Inputs for

Derivatives

The following provides information about the ranges of

significant unobservable inputs used to value the firm’s level

3 derivative instruments:

• Correlation. Ranges for correlation cover a variety of

underliers both within one product type (e.g., equity index

and equity single stock names) and across product types

(e.g., correlation of an interest rate and a currency), as well

as across regions. Generally, cross-product type correlation

inputs are used to value more complex instruments and are

lower than correlation inputs on assets within the same

derivative product type.

• Volatility. Ranges for volatility cover numerous underliers

across a variety of markets, maturities and strike prices.

For example, volatility of equity indices is generally lower

than volatility of single stocks.

• Credit spreads, upfront credit points and recovery

rates. The ranges for credit spreads, upfront credit points

and recovery rates cover a variety of underliers (index and

single names), regions, sectors, maturities and credit

qualities (high-yield and investment-grade). The broad

range of this population gives rise to the width of the

ranges of significant unobservable inputs.

• Commodity prices and spreads. The ranges for

commodity prices and spreads cover variability in

products, maturities and delivery locations.

Sensitivity of Fair Value Measurement to Changes in

Significant Unobservable Inputs for Derivatives

The following is a description of the directional sensitivity of

the firm’s level 3 fair value measurements to changes in

significant unobservable inputs, in isolation, as of each

period-end:

• Correlation. In general, for contracts where the holder

benefits from the convergence of the underlying asset or

index prices (e.g., interest rates, credit spreads, foreign

exchange rates, inflation rates and equity prices), an

increase in correlation results in a higher fair value

measurement.

• Volatility. In general, for purchased options, an increase in

volatility results in a higher fair value measurement.

• Credit spreads, upfront credit points and recovery

rates. In general, the fair value of purchased credit

protection increases as credit spreads or upfront credit

points increase or recovery rates decrease. Credit spreads,

upfront credit points and recovery rates are strongly related

to distinctive risk factors of the underlying reference

obligations, which include reference entity-specific factors,

such as leverage, volatility and industry, market-based risk

factors, such as borrowing costs or liquidity of the

underlying reference obligation, and macroeconomic

conditions.

• Commodity prices and spreads. In general, for

contracts where the holder is receiving a commodity, an

increase in the spread (price difference from a benchmark

index due to differences in quality or delivery location) or

price results in a higher fair value measurement.

Due to the distinctive nature of each of the firm’s level 3

derivatives, the interrelationship of inputs is not necessarily

uniform within each product type.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

142

Goldman Sachs 2022 Form 10-K

Level 3 Rollforward for Derivatives

The table below presents a summary of the changes in fair

value for level 3 derivatives.

Year Ended December

$ in millions

2022 2021

Total level 3 derivatives, net

Beginning balance $ 440 $ 1,175

Net realized gains/(losses) 839 265

Net unrealized gains/(losses) 1,817 452

Purchases 510 501

Sales (1,592) (1,541)

Settlements 100 (59)

Transfers into level 3 (482) (131)

Transfers out of level 3 (111) (222)

Ending balance $ 1,521 $ 440

In the table above:

• Changes in fair value are presented for all derivative assets

and liabilities that are classified in level 3 as of the end of

the period.

• Net unrealized gains/(losses) relates to instruments that

were still held at period-end.

• Transfers between levels of the fair value hierarchy are

reported at the beginning of the reporting period in which

they occur. If a derivative was transferred into level 3

during a reporting period, its entire gain or loss for the

period is classified in level 3.

• Positive amounts for transfers into level 3 and negative

amounts for transfers out of level 3 represent net transfers

of derivative assets. Negative amounts for transfers into

level 3 and positive amounts for transfers out of level 3

represent net transfers of derivative liabilities.

• A derivative with level 1 and/or level 2 inputs is classified in

level 3 in its entirety if it has at least one significant level 3

input.

• If there is one significant level 3 input, the entire gain or

loss from adjusting only observable inputs (i.e., level 1 and

level 2 inputs) is classified in level 3.

• Gains or losses that have been classified in level 3 resulting

from changes in level 1 or level 2 inputs are frequently

offset by gains or losses attributable to level 1 or level 2

derivatives and/or level 1, level 2 and level 3 trading cash

instruments. As a result, gains/(losses) included in the level

3 rollforward below do not necessarily represent the overall

impact on the firm’s results of operations, liquidity or

capital resources.

The table below presents information, by product type, for

derivatives included in the summary table above.

Year Ended December

$ in millions 2022 2021

Interest rates, net

Beginning balance $ 183 $ 267

Net realized gains/(losses) 88 72

Net unrealized gains/(losses) 137 316

Purchases 50 124

Sales (585) (341)

Settlements (20) 18

Transfers into level 3 (13) 2

Transfers out of level 3 (299) (275)

Ending balance $ (459) $ 183

Credit, net

Beginning balance $ 1,854 $ 1,778

Net realized gains/(losses) 217 (21)

Net unrealized gains/(losses) (343) 409

Purchases 107 53

Sales (90) (217)

Settlements (27) (77)

Transfers into level 3 (21) (70)

Transfers out of level 3 (237) (1)

Ending balance $ 1,460 $ 1,854

Currencies, net

Beginning balance $ (147) $ (338)

Net realized gains/(losses) 95 9

Net unrealized gains/(losses) 270 155

Purchases 41 7

Sales (36) (10)

Settlements 19 32

Transfers into level 3 (83) (17)

Transfers out of level 3 3 15

Ending balance $ 162 $ (147)

Commodities, net

Beginning balance $ 438 $ 300

Net realized gains/(losses) (59) (80)

Net unrealized gains/(losses) 741 355

Purchases 31 42

Sales (30) (15)

Settlements (245) (149)

Transfers into level 3 182 (3)

Transfers out of level 3 (139) (12)

Ending balance $ 919 $ 438

Equities, net

Beginning balance $ (1,888) $ (832)

Net realized gains/(losses) 498 285

Net unrealized gains/(losses) 1,012 (783)

Purchases 281 275

Sales (851) (958)

Settlements 373 117

Transfers into level 3 (547) (43)

Transfers out of level 3 561 51

Ending balance $ (561) $ (1,888)

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Goldman Sachs 2022 Form 10-K 143

Level 3 Rollforward Commentary for Derivatives

Year Ended December 2022. The net realized and

unrealized gains on level 3 derivatives of $2.66 billion

(reflecting $839 million of net realized gains and $1.82 billion

of net unrealized gains) for 2022 included gains of $2.65

billion reported in market making and gains of $3 million

reported in other principal transactions.

The net unrealized gains on level 3 derivatives for 2022 were

attributable to gains on certain equity derivatives (primarily

reflecting the impact of a decrease in equity prices), gains on

certain commodity derivatives (primarily reflecting the

impact of an increase in commodity prices), gains on certain

currency derivatives (primarily reflecting the impact of

changes in foreign exchange rates and an increase in interest

rates), and gains on certain interest rate derivatives (primarily

reflecting the impact of an increase in interest rates), partially

offset by losses on certain credit derivatives (primarily

reflecting the impact of an increase in interest rates).

Transfers into level 3 derivatives during 2022 primarily

reflected transfers of certain equity derivative liabilities from

level 2 (principally due to decreased transparency of certain

unobservable volatility inputs used to value these

derivatives), partially offset by transfers of certain

commodity derivative assets from level 2 (principally due to

certain unobservable electricity price inputs becoming

significant to the valuation of these derivatives).

Transfers out of level 3 derivatives during 2022 primarily

reflected transfers of certain interest rate derivative assets to

level 2 (principally due to certain unobservable volatility

inputs no longer being significant to the valuation of these

derivatives), certain credit derivative assets to level 2

(principally due to certain unobservable credit spread inputs

no longer being significant to the net risk of certain

portfolios), and certain commodity derivative assets to level 2

(principally due to certain unobservable natural gas spread

and electricity price inputs no longer being significant to the

valuation of these derivatives), partially offset by transfers of

certain equity derivative liabilities to level 2 (principally due

to certain unobservable volatility inputs no longer being

significant to the valuation of these derivatives).

Year Ended December 2021. The net realized and

unrealized gains on level 3 derivatives of $717 million

(reflecting $265million of net realized gains and $452million

of net unrealized gains) for 2021 included gains of

$700 million reported in market making and gains of

$17million reported in other principal transactions.

The net unrealized gains on level 3 derivatives for 2021 were

primarily attributable to gains on certain credit and currency

derivatives (in each case, primarily reflecting the impact of

changes in foreign exchange rates), gains on certain

commodity derivatives (primarily reflecting the impact of an

increase in commodity prices) and gains on certain interest

rate derivatives (primarily reflecting the impact of an increase

in interest rates), partially offset by losses on certain equity

derivatives (primarily reflecting the impact of an increase in

equity prices).

The drivers of transfers into level 3 derivatives during 2021

were not material.

Transfers out of level 3 derivatives during 2021 primarily

reflected transfers of certain interest rate derivative assets to

level 2 (principally due to increased transparency of certain

volatility inputs used to value these derivatives).

Fair Value of Investments by Level

The table below presents investments accounted for at fair

value by level within the fair value hierarchy.

$ in millions Level 1 Level 2 Level 3 Total

As of December 2022

Government and agency obligations:

U.S. $ 47,055 $ – $ – $ 47,055

Non-U.S. 2,169 66 – 2,235

Corporate debt securities 145 2,950 7,003 10,098

Securities backed by real estate – 176 827 1,003

Money market instruments 48 957 – 1,005

Other debt obligations – 3 256 259

Equity securities 1,522 3,227 8,856 13,605

Subtotal $ 50,939 $ 7,379 $ 16,942 $ 75,260

Investments in funds at NAV

2,941

Total investments

$ 78,201

As of December 2021

Government and agency obligations:

U.S. $ 46,322 $ – $ – $ 46,322

Non-U.S. 2,612 – – 2,612

Corporate debt securities 65 5,201 4,527 9,793

Securities backed by real estate – 1,202 1,078 2,280

Money market instruments 41 1,355 – 1,396

Other debt obligations – 35 382 417

Equity securities 2,135 7,088 7,915 17,138

Subtotal $ 51,175 $ 14,881 $ 13,902 $ 79,958

Investments in funds at NAV 3,469

Total investments $ 83,427

See Note 4 for an overview of the firm’s fair value

measurement policies, valuation techniques and significant

inputs used to determine the fair value of investments.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

144

Goldman Sachs 2022 Form 10-K

Significant Unobservable Inputs for Investments

The table below presents the amount of level 3 investments,

and ranges and weighted averages of significant unobservable

inputs used to value such investments.

As of December 2022 As of December 2021

$ in millions

Amount or

Range

Weighted

Average

Amount or

Range

Weighted

Average

Corporate debt securities

Level 3 assets $ 7,003 $ 4,527

Yield 5.0% to 21.8% 11.6% 2.0% to 29.0% 10.8%

Recovery rate 10.0% to 70.0% 55.5% 9.1% to 76.0% 59.1%

Duration (years) 1.3 to 5.7 3.3 1.4 to 6.4 3.8

Multiples 1.8x to 83.4x 8.3x 0.5x to 28.2x 6.9x

Securities backed by real estate

Level 3 assets $ 827 $ 1,078

Yield 8.0% to 20.3% 14.6% 8.3% to 20.3% 13.1%

Recovery rate

N/A

55.1% to 61.0%

56.4%

Duration (years) 0.6 to 4.2 4.1 0.1 to 2.6 1.2

Other debt obligations

Level 3 assets $ 256 $ 382

Yield 5.2% to 8.4% 7.4% 2.3% to 10.6% 3.2%

Duration (years) N/A N/A 0.9 to 9.3 4.8

Equity securities

Level 3 assets $ 8,856 $ 7,915

Multiples 0.5x to 34.3x 8.3x 0.4x to 30.5x 10.1x

Discount rate/yield

5.4% to 38.5% 14.6% 2.0% to 35.0% 14.1%

Capitalization rate 4.0% to 10.8% 5.4% 3.5% to 14.0% 5.7%

In the table above:

• Ranges represent the significant unobservable inputs that

were used in the valuation of each type of investment.

• Weighted averages are calculated by weighting each input

by the relative fair value of the investment.

• The ranges and weighted averages of these inputs are not

representative of the appropriate inputs to use when

calculating the fair value of any one investment. For

example, the highest multiple for private equity securities is

appropriate for valuing a specific private equity security

but may not be appropriate for valuing any other private

equity security. Accordingly, the ranges of inputs do not

represent uncertainty in, or possible ranges of, fair value

measurements of level 3 investments.

• Increases in yield, discount rate, capitalization rate or

duration used in the valuation of level 3 investments would

have resulted in a lower fair value measurement, while

increases in recovery rate or multiples would have resulted

in a higher fair value measurement as of both December

2022 and December 2021. Due to the distinctive nature of

each level 3 investment, the interrelationship of inputs is

not necessarily uniform within each product type.

• Corporate debt securities, securities backed by real estate

and other debt obligations are valued using discounted cash

flows, and equity securities are valued using market

comparables and discounted cash flows.

• The fair value of any one instrument may be determined

using multiple valuation techniques. For example, market

comparables and discounted cash flows may be used

together to determine fair value. Therefore, the level 3

balance encompasses both of these techniques.

• The significant unobservable inputs for recovery rate

(related to securities backed by real estate) and for duration

(related to other debt obligations) as of December 2022 did

not have a range (and there was no weighted average) as

each pertained to a single position. Therefore, such

unobservable inputs are not included in the table above.

Level 3 Rollforward for Investments

The table below presents a summary of the changes in fair

value for level 3 investments.

Year Ended December

$ in millions 2022 2021

Beginning balance $ 13,902 $ 16,423

Net realized gains/(losses) 563 449

Net unrealized gains/(losses) (1,649) 1,263

Purchases 2,362 1,600

Sales (1,514) (2,135)

Settlements (1,995) (3,265)

Transfers into level 3 6,345 3,080

Transfers out of level 3 (1,072) (3,513)

Ending balance $ 16,942 $ 13,902

In the table above:

• Changes in fair value are presented for all investments that

are classified in level 3 as of the end of the period.

• Net unrealized gains/(losses) relates to investments that

were still held at period-end.

• Transfers between levels of the fair value hierarchy are

reported at the beginning of the reporting period in which

they occur. If an investment was transferred to level 3

during a reporting period, its entire gain or loss for the

period is classified in level 3.

• For level 3 investments, increases are shown as positive

amounts, while decreases are shown as negative amounts.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Goldman Sachs 2022 Form 10-K 145

The table below presents information, by product type, for

investments included in the summary table above.

Year Ended December

$ in millions 2022 2021

Corporate debt securities

Beginning balance $ 4,527 $ 5,286

Net realized gains/(losses) 352 167

Net unrealized gains/(losses) (173) 311

Purchases 1,007 431

Sales (125) (594)

Settlements (1,117) (1,876)

Transfers into level 3 2,790 1,871

Transfers out of level 3 (258) (1,069)

Ending balance $ 7,003 $ 4,527

Securities backed by real estate

Beginning balance $ 1,078 $ 998

Net realized gains/(losses) 42 45

Net unrealized gains/(losses) (338) 6

Purchases 199 182

Sales (169) (44)

Settlements (320) (234)

Transfers into level 3 344 142

Transfers out of level 3 (9) (17)

Ending balance $ 827 $ 1,078

Other debt obligations

Beginning balance $ 382 $ 497

Net realized gains/(losses) 12 12

Net unrealized gains/(losses) (5) 1

Purchases 25 63

Sales

(6)

–

Settlements

(147)

(96)

Transfers out of level 3 (5) (95)

Ending balance $ 256 $ 382

Equity securities

Beginning balance $ 7,915 $ 9,642

Net realized gains/(losses) 157 225

Net unrealized gains/(losses) (1,133) 945

Purchases 1,131 924

Sales (1,214) (1,497)

Settlements (411) (1,059)

Transfers into level 3 3,211 1,067

Transfers out of level 3 (800) (2,332)

Ending balance $ 8,856 $ 7,915

Level 3 Rollforward Commentary for Investments

Year Ended December 2022. The net realized and

unrealized losses on level 3 investments of $1.09 billion

(reflecting $563 million of net realized gains and $1.65 billion

of net unrealized losses) for 2022 included gains/(losses) of

$(1.52) billion reported in other principal transactions and

$433 million reported in interest income.

The net unrealized losses on level 3 investments for 2022

primarily reflected losses on certain equity securities and

corporate debt securities (in each case, principally driven by

broad macroeconomic and geopolitical concerns) and

securities backed by real estate (principally driven by an

increase in interest rates).

Transfers into level 3 investments during 2022 primarily

reflected transfers of certain equity securities and corporate

debt securities from level 2 (in each case, principally due to

reduced price transparency as a result of a lack of market

evidence, including fewer market transactions in these

instruments), and transfers of certain corporate debt

securities from level 2 (due to certain unobservable yield and

duration inputs becoming significant to the valuation of these

instruments).

Transfers out of level 3 investments during 2022 primarily

reflected transfers of certain equity securities and corporate

debt securities to level 2 (in each case, principally due to

increased price transparency as a result of market evidence,

including market transactions in these instruments and

certain unobservable yield and duration inputs no longer

being significant to the valuation of these instruments).

Year Ended December 2021. The net realized and

unrealized gains on level 3 investments of $1.71 billion

(reflecting $449million of net realized gains and $1.26billion

of net unrealized gains) for 2021 included gains of

$1.53 billion reported in other principal transactions and

$180million reported in interest income.

The net unrealized gains on level 3 investments for 2021

primarily reflected gains on certain private equity securities

and corporate debt securities (in each case, principally driven

by corporate performance and company-specific events).

Transfers into level 3 investments during 2021 primarily

reflected transfers of certain corporate debt securities from

level 2 (principally due to reduced price transparency as a

result of a lack of market evidence, including fewer market

transactions in these instruments, and certain unobservable

yield and duration inputs becoming significant to the

valuation of these instruments) and transfers of certain

private equity securities from level 2 (principally due to

reduced price transparency as a result of a lack of market

evidence, including fewer market transactions in these

instruments).

Transfers out of level 3 investments during 2021 primarily

reflected transfers of certain private equity securities to level

2 (principally due to increased price transparency as a result

of market evidence, including market transactions in these

instruments) and transfers of certain corporate debt securities

to level 2 (principally due to certain unobservable yield and

duration inputs no longer being significant to the valuation of

these instruments, and increased price transparency as a

result of market evidence, including market transactions of

these instruments).

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

146

Goldman Sachs 2022 Form 10-K

Fair Value of Loans by Level

The table below presents loans held for investment accounted

for at fair value under the fair value option by level within

the fair value hierarchy.

$ in millions Level 1 Level 2 Level 3 Total

As of December 2022

Loan Type

Corporate $ – $ 359 $ 637 $ 996

Real estate:

Commercial – 435 711 1,146

Residential – 4,437 74 4,511

Other collateralized – 576 140 716

Other – 11 275 286

Total $ – $ 5,818 $ 1,837 $ 7,655

As of December 2021

Loan Type

Corporate $ – $ 937 $ 672 $ 1,609

Real estate:

Commercial – 605 983 1,588

Residential – 5,980 205 6,185

Other collateralized – 726 229 955

Other – 167 265 432

Total $ – $ 8,415 $ 2,354 $ 10,769

The gains/(losses) as a result of changes in the fair value of

loans held for investment for which the fair value option was

elected were $(367) million for 2022 and $216 million for

2021. These gains/(losses) were included in other principal

transactions.

Significant Unobservable Inputs for Loans

The table below presents the amount of level 3 loans, and

ranges and weighted averages of significant unobservable

inputs used to value such loans.

As of December 2022 As of December 2021

$ in millions

Amount or

Range

Weighted

Average

Amount or

Range

Weighted

Average

Corporate

Level 3 assets $ 637 $ 672

Yield 4.1% to 26.9% 9.6% 1.5% to 55.6% 17.8%

Recovery rate 23.1% to 95.0% 66.0%

20.0% to 92.0%

46.6%

Duration (years) 1.6 to 3.3 2.6 1.0 to 4.3 2.5

Real estate

Level 3 assets $ 785 $ 1,188

Yield 3.0% to 27.0% 16.1% 2.1% to 20.0% 13.2%

Recovery rate 3.6% to 66.2% 54.4% 3.8% to 99.5% 43.7%

Duration (years) 0.6 to 6.7 2.5 0.1 to 4.0 1.7

Other collateralized

Level 3 assets $ 140 $ 229

Yield 5.8% to 12.7% 7.7% 1.8% to 4.3% 3.3%

Duration (years) 2.5 to 2.9 2.7 0.9 to 6.8 3.2

Other

Level 3 assets $ 275 $ 265

Yield 9.4% to 10.0% 9.9% 3.8% to 18.7% 7.9%

Duration (years) N/A N/A 2.9 to 5.5 3.6

In the table above:

• Ranges represent the significant unobservable inputs that

were used in the valuation of each type of loan.

• Weighted averages are calculated by weighting each input

by the relative fair value of the loan.

• The ranges and weighted averages of these inputs are not

representative of the appropriate inputs to use when

calculating the fair value of any one loan. For example, the

highest yield for real estate loans is appropriate for valuing

a specific real estate loan but may not be appropriate for

valuing any other real estate loan. Accordingly, the ranges

of inputs do not represent uncertainty in, or possible ranges

of, fair value measurements of level 3 loans.

• Increases in yield or duration used in the valuation of level

3 loans would have resulted in a lower fair value

measurement, while increases in recovery rate would have

resulted in a higher fair value measurement as of both

December 2022 and December 2021. Due to the distinctive

nature of each level 3 loan, the interrelationship of inputs is

not necessarily uniform within each product type.

• Loans are valued using discounted cash flows.

• The significant unobservable inputs for duration related to

other loans as of December 2022 did not have a range (and

there was no weighted average) as it related to a purchased

portfolio of revolving loans with a single duration.

Level 3 Rollforward for Loans

The table below presents a summary of the changes in fair

value for level 3 loans.

Year Ended December

$ in millions 2022 2021

Beginning balance $ 2,354 $ 2,678

Net realized gains/(losses) 82 99

Net unrealized gains/(losses) (129) (33)

Purchases 113 272

Sales (82) (54)

Settlements (403) (668)

Transfers into level 3 236 369

Transfers out of level 3 (334) (309)

Ending balance $ 1,837 $ 2,354

In the table above:

• Changes in fair value are presented for loans that are

classified in level 3 as of the end of the period.

• Net unrealized gains/(losses) relates to loans that were still

held at period-end.

• Purchases includes originations and secondary purchases.

• Transfers between levels of the fair value hierarchy are

reported at the beginning of the reporting period in which

they occur. If a loan was transferred to level 3 during a

reporting period, its entire gain or loss for the period is

classified in level 3.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Goldman Sachs 2022 Form 10-K 147

The table below presents information, by loan type, for loans

included in the summary table above.

Year Ended December

$ in millions 2022 2021

Corporate

Beginning balance $ 672 $ 896

Net realized gains/(losses) 29 30

Net unrealized gains/(losses) (40) (34)

Purchases 27 81

Sales (74) (17)

Settlements (95) (228)

Transfers into level 3 121 37

Transfers out of level 3 (3) (93)

Ending balance $ 637 $ 672

Real estate

Beginning balance $ 1,188 $ 1,364

Net realized gains/(losses) 45 57

Net unrealized gains/(losses) (108) (62)

Purchases 65 78

Sales

(8)

(10)

Settlements (233) (353)

Transfers into level 3 102 242

Transfers out of level 3 (266) (128)

Ending balance $ 785 $ 1,188

Other collateralized

Beginning balance $ 229 $ 97

Net realized gains/(losses) 3 1

Net unrealized gains/(losses) (2) (1)

Purchases 3 62

Settlements (55) (20)

Transfers into level 3 13 90

Transfers out of level 3 (51) –

Ending balance $ 140 $ 229

Other

Beginning balance $ 265 $ 321

Net realized gains/(losses) 5 11

Net unrealized gains/(losses) 21 64

Purchases 18 51

Sales – (27)

Settlements (20) (67)

Transfers out of level 3 (14) (88)

Ending balance $ 275 $ 265

Level 3 Rollforward Commentary for Loans

Year Ended December 2022. The net realized and

unrealized losses on level 3 loans of $47 million (reflecting

$82 million of net realized gains and $129 million of net

unrealized losses) for 2022 included gains/(losses) of $(78)

million reported in other principal transactions and $31

million reported in interest income.

The net unrealized losses on level 3 loans for 2022 primarily

reflected losses on certain loans backed by real estate

(principally due to the impact of an increase in interest rates).

Transfers into level 3 loans during 2022 primarily reflected

transfers of certain corporate loans and loans backed by real

estate from level 2 (in each case, principally due to reduced

price transparency as a result of a lack of market evidence,

including fewer market transactions in these instruments).

Transfers out of level 3 loans during 2022 primarily reflected

transfers of certain loans backed by real estate to level 2

(principally due to increased price transparency as a result of

market evidence, including market transactions in these

instruments).

Year Ended December 2021. The net realized and

unrealized gains on level 3 loans of $66 million (reflecting $99

million of net realized gains and $33 million of net unrealized

losses) for 2021 included gains of $42 million reported in

other principal transactions and $24 million reported in

interest income.

The drivers of net unrealized losses on level 3 loans for 2021

were not material.

Transfers into level 3 loans during 2021 primarily reflected

transfers of certain loans backed by real estate from level 2

(principally due to certain unobservable yield and duration

inputs becoming significant to the valuation of these

instruments) and transfers of certain other collateralized

loans from level 2 (principally due to reduced price

transparency as a result of a lack of market evidence,

including fewer market transactions in these instruments).

Transfers out of level 3 loans during 2021 primarily reflected

transfers of certain loans backed by real estate, corporate

loans and other loans to level 2 (in each case, principally due

to increased price transparency as a result of market

evidence, including market transactions in these instruments).

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

148

Goldman Sachs 2022 Form 10-K

Fair Value of Other Financial Assets and Liabilities by

Level

The table below presents, by level within the fair value

hierarchy, other financial assets and liabilities at fair value,

substantially all of which are accounted for at fair value

under the fair value option.

$ in millions Level 1 Level 2 Level 3 Total

As of December 2022

Assets

Resale agreements $ – $ 225,117 $ – $ 225,117

Securities borrowed – 38,578 – 38,578

Customer and other receivables – 25 – 25

Other assets – 71 74 145

Total $ – $ 263,791 $ 74 $ 263,865

Liabilities

Deposits $ – $ (13,003) $ (2,743) $ (15,746)

Repurchase agreements – (110,349) – (110,349)

Securities loaned – (4,372) – (4,372)

Other secured financings – (10,914) (1,842) (12,756)

Unsecured borrowings:

Short-term – (35,641) (4,090) (39,731)

Long-term – (63,081) (10,066) (73,147)

Other liabilities – (74) (85) (159)

Total $ – $ (237,434) $ (18,826) $ (256,260)

As of December 2021

Assets

Resale agreements $ – $ 205,703 $ – $ 205,703

Securities borrowed – 39,955 – 39,955

Customer and other receivables – 42 – 42

Total $ – $ 245,700 $ – $ 245,700

Liabilities

Deposits $ – $ (31,812) $ (3,613) $ (35,425)

Repurchase agreements – (165,883) – (165,883)

Securities loaned – (9,170) – (9,170)

Other secured financings – (14,508) (2,566) (17,074)

Unsecured borrowings:

Short-term – (22,003) (7,829) (29,832)

Long-term – (42,977) (9,413) (52,390)

Other liabilities – (213) (146) (359)

Total $ – $ (286,566) $ (23,567) $ (310,133)

In the table above, other financial assets are shown as

positive amounts and other financial liabilities are shown as

negative amounts.

See Note 4 for an overview of the firm’s fair value

measurement policies, valuation techniques and significant

inputs used to determine the fair value of other financial

assets and liabilities.

Significant Unobservable Inputs for Other Financial

Instruments at Fair Value

See below for information about the significant unobservable

inputs used to value level 3 other financial liabilities at fair

value as of both December 2022 and December 2021.

Other Secured Financings. The ranges and weighted

averages of significant unobservable inputs used to value level

3 other secured financings are presented below. These ranges

and weighted averages exclude unobservable inputs that are

only relevant to a single instrument, and therefore are not

meaningful.

As of December 2022:

• Yield: 4.5% to 9.4% (weighted average: 5.9%)

• Duration: 0.6 to 5.1 years (weighted average: 2.2 years)

As of December 2021:

• Yield: 1.3% to 6.4% (weighted average: 2.1%)

• Duration: 0.6 to 7.1 years (weighted average: 3.7 years)

Generally, increases in yield or duration, in isolation, would

have resulted in a lower fair value measurement as of period-

end. Due to the distinctive nature of each of level 3 other

secured financings, the interrelationship of inputs is not

necessarily uniform across such financings. See Note 11 for

further information about other secured financings.

Deposits, Unsecured Borrowings and Other Assets

and Liabilities. Substantially all of the firm’s deposits,

unsecured short- and long-term borrowings, and other assets

and liabilities that are classified in level 3 are hybrid financial

instruments. As the significant unobservable inputs used to

value hybrid financial instruments primarily relate to the

embedded derivative component of these deposits, unsecured

borrowings and other assets and liabilities, these

unobservable inputs are incorporated in the firm’s derivative

disclosures. See Note 12 for further information about other

assets, Note 13 for further information about deposits, Note

14 for further information about unsecured borrowings and

Note 15 for further information about other liabilities.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Goldman Sachs 2022 Form 10-K 149

Level 3 Rollforward for Other Financial Instruments at

Fair Value

The table below presents a summary of the changes in fair

value for level 3 other financial instruments accounted for at

fair value.

Year Ended December

$ in millions 2022 2021

Assets

Beginning balance $ – $ –

Net unrealized gains/(losses) 65 –

Purchases 9 –

Ending balance $ 74 $ –

Liabilities

Beginning balance $ (23,567) $ (28,058)

Net realized gains/(losses) (311) (401)

Net unrealized gains/(losses) 4,459 825

Issuances (10,090) (12,632)

Settlements 10,255 14,930

Transfers into level 3 (1,851) (736)

Transfers out of level 3 2,279 2,505

Ending balance $ (18,826) $ (23,567)

In the table above:

• Changes in fair value are presented for all other financial

instruments that are classified in level 3 as of the end of the

period.

• Net unrealized gains/(losses) relates to other financial

instruments that were still held at period-end.

• Transfers between levels of the fair value hierarchy are

reported at the beginning of the reporting period in which

they occur. If a financial instrument was transferred to

level 3 during a reporting period, its entire gain or loss for

the period is classified in level 3.

• For level 3 other financial assets, increases are shown as

positive amounts, while decreases are shown as negative

amounts. For level 3 other financial liabilities, increases are

shown as negative amounts, while decreases are shown as

positive amounts.

• Level 3 other financial instruments are frequently

economically hedged with trading assets and liabilities.

Accordingly, gains or losses that are classified in level 3 can

be partially offset by gains or losses attributable to level 1,

2 or 3 trading assets and liabilities. As a result, gains or

losses included in the level 3 rollforward below do not

necessarily represent the overall impact on the firm’s

results of operations, liquidity or capital resources.

The table below presents information, by the consolidated

balance sheet line items, for liabilities included in the

summary table above.

Year Ended December

$ in millions 2022 2021

Deposits

Beginning balance $ (3,613) $ (4,221)

Net realized gains/(losses) (5) (28)

Net unrealized gains/(losses) 391 (110)

Issuances (937) (473)

Settlements 1,264 1,203

Transfers into level 3 (13) (70)

Transfers out of level 3 170 86

Ending balance $ (2,743) $ (3,613)

Repurchase agreements

Beginning balance $ – $ (2)

Net unrealized gains/(losses) – 1

Settlements – 1

Ending balance $ – $ –

Other secured financings

Beginning balance $ (2,566) $ (3,474)

Net realized gains/(losses) (12) (27)

Net unrealized gains/(losses) 31 63

Issuances (621) (145)

Settlements 850 779

Transfers into level 3 (110) (135)

Transfers out of level 3 586 373

Ending balance $ (1,842) $ (2,566)

Unsecured short-term borrowings

Beginning balance $ (7,829) $ (7,523)

Net realized gains/(losses) (112) (134)

Net unrealized gains/(losses) 730 374

Issuances (3,497) (7,878)

Settlements 6,201 7,188

Transfers into level 3 (265) (163)

Transfers out of level 3 682 307

Ending balance $ (4,090) $ (7,829)

Unsecured long-term borrowings

Beginning balance $ (9,413) $ (12,576)

Net realized gains/(losses) (182) (212)

Net unrealized gains/(losses) 3,246 381

Issuances (5,035) (4,136)

Settlements 1,940 5,759

Transfers into level 3 (1,463) (368)

Transfers out of level 3 841 1,739

Ending balance $ (10,066) $ (9,413)

Other liabilities

Beginning balance $ (146) $ (262)

Net unrealized gains/(losses) 61 116

Ending balance $ (85) $ (146)

Level 3 Rollforward Commentary for Other Financial

Instruments at Fair Value

Year Ended December 2022. The net realized and

unrealized gains on level 3 other financial liabilities of $4.15

billion (reflecting $311 million of net realized losses and $4.46

billion of net unrealized gains) for 2022 included gains/

(losses) of $3.60 billion reported in market making, $64

million reported in other principal transactions and $(21)

million reported in interest expense in the consolidated

statements of earnings, and $503 million reported in debt

valuation adjustment in the consolidated statements of

comprehensive income.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

150

Goldman Sachs 2022 Form 10-K

The net unrealized gains on level 3 other financial liabilities

for 2022 primarily reflected gains on certain hybrid financial

instruments included in unsecured long- and short-term

borrowings (principally due to a decrease in global equity

prices and an increase in interest rates).

Transfers into level 3 other financial liabilities during 2022

primarily reflected transfers of certain hybrid financial

instruments included in unsecured long- and short-term

borrowings from level 2 (principally due to reduced

transparency of certain volatility and correlation inputs used

to value these instruments).

Transfers out of level 3 other financial liabilities during 2022

primarily reflected transfers of certain hybrid financial

instruments included in unsecured long- and short-term

borrowings to level 2 (principally due to increased price

transparency of certain volatility and correlation inputs used

to value these instruments) and transfers of certain other

secured financings to level 2 (principally due to certain

unobservable yield and duration inputs no longer being

significant to the valuation of these instruments).

Year Ended December 2021. The net realized and

unrealized gains on level 3 other financial liabilities of $424

million (reflecting $401 million of net realized losses and $825

million of net unrealized gains) for 2021 included gains/

(losses) of $355 million reported in market making, $32

million reported in other principal transactions and $(20)

million reported in interest expense in the consolidated

statements of earnings, and $57 million reported in debt

valuation adjustment in the consolidated statements of

comprehensive income.

The net unrealized gains on level 3 other financial liabilities

for 2021 primarily reflected gains on certain hybrid financial

instruments included in unsecured long- and short-term

borrowings (principally due to an increase in interest rates).

Transfers into level 3 other financial liabilities during 2021

primarily reflected transfers of certain hybrid financial

instruments included in unsecured long- and short-term

borrowings from level 2 (principally due to reduced price

transparency of certain volatility and correlation inputs used

to value these instruments) and certain other secured

financings from level 2 (principally due to reduced price

transparency of certain yield and duration inputs used to

value these instruments).

Transfers out of level 3 other financial liabilities during 2021

primarily reflected transfers of certain hybrid financial

instruments included in unsecured long- and short-term

borrowings to level 2 (principally due to increased price

transparency of certain volatility and correlation inputs used

to value these instruments, and certain unobservable

volatility inputs no longer being significant to the valuation

of these instruments) and certain other secured financings to

level 2 (principally due to increased price transparency of

certain yield and duration inputs used to value these

instruments).

Note 6.

Trading Assets and Liabilities

Trading assets and liabilities include trading cash instruments

and derivatives held in connection with the firm’s market-

making or risk management activities. These assets and

liabilities are carried at fair value either under the fair value

option or in accordance with other U.S. GAAP, and the

related fair value gains and losses are generally recognized in

the consolidated statements of earnings.

The table below presents a summary of trading assets and

liabilities.

Trading Trading

$ in millions Assets Liabilities

As of December 2022

Trading cash instruments $ 241,832 $ 136,589

Derivatives 59,413 54,735

Total $ 301,245 $ 191,324

As of December 2021

Trading cash instruments $ 311,956 $ 129,471

Derivatives 63,960 51,953

Total $ 375,916 $ 181,424

See Note 5 for further information about trading cash

instruments and Note 7 for further information about

derivatives.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Goldman Sachs 2022 Form 10-K 151

Gains and Losses from Market Making

The table below presents market making revenues by major

product type.

Year Ended December

$ in millions 2022 2021 2020

Interest rates $ (4,890) $ (2,664) $ 6,074

Credit 1,095 1,739 3,269

Currencies 11,662 5,627 (3,312)

Equities 7,734 8,459 6,792

Commodities 3,033 2,196 2,605

Total $ 18,634 $ 15,357 $ 15,428

In the table above:

• Gains/(losses) include both realized and unrealized gains

and losses. Gains/(losses) exclude related interest income

and interest expense. See Note 23 for further information

about interest income and interest expense.

• Gains/(losses) included in market making are primarily

related to the firm’s trading assets and liabilities, including

both derivative and non-derivative financial instruments.

• Gains/(losses) are not representative of the manner in

which the firm manages its business activities because

many of the firm’s market-making and client facilitation

strategies utilize financial instruments across various

product types. Accordingly, gains or losses in one product

type frequently offset gains or losses in other product types.

For example, most of the firm’s longer-term derivatives

across product types are sensitive to changes in interest

rates and may be economically hedged with interest rate

swaps. Similarly, a significant portion of the firm’s trading

cash instruments and derivatives across product types has

exposure to foreign currencies and may be economically

hedged with foreign currency contracts.

Note 7.

Derivatives and Hedging Activities

Derivative Activities

Derivatives are instruments that derive their value from

underlying asset prices, indices, reference rates and other

inputs, or a combination of these factors. Derivatives may be

traded on an exchange (exchange-traded) or they may be

privately negotiated contracts, which are usually referred to

as OTC derivatives. Certain of the firm’s OTC derivatives

are cleared and settled through central clearing

counterparties (OTC-cleared), while others are bilateral

contracts between two counterparties (bilateral OTC).

Market Making. As a market maker, the firm enters into

derivative transactions to provide liquidity to clients and to

facilitate the transfer and hedging of their risks. In this role,

the firm typically acts as principal and is required to commit

capital to provide execution, and maintains market-making

positions in response to, or in anticipation of, client demand.

Risk Management. The firm also enters into derivatives to

actively manage risk exposures that arise from its market-

making and investing and financing activities. The firm’s

holdings and exposures are hedged, in many cases, on either a

portfolio or risk-specific basis, as opposed to an instrument-

by-instrument basis. The offsetting impact of this economic

hedging is reflected in the same business segment as the

related revenues. In addition, the firm may enter into

derivatives designated as hedges under U.S. GAAP. These

derivatives are used to manage interest rate exposure of

certain fixed-rate unsecured borrowings and deposits and

certain U.S. government securities classified as available-for-

sale, foreign exchange risk of certain available-for-sale

securities and the net investment in certain non-U.S.

operations, and the price risk of certain commodities.

The firm enters into various types of derivatives, including:

• Futures and Forwards. Contracts that commit

counterparties to purchase or sell financial instruments,

commodities or currencies in the future.

• Swaps. Contracts that require counterparties to exchange

cash flows, such as currency or interest payment streams.

The amounts exchanged are based on the specific terms of

the contract with reference to specified rates, financial

instruments, commodities, currencies or indices.

• Options. Contracts in which the option purchaser has the

right, but not the obligation, to purchase from or sell to the

option writer financial instruments, commodities or

currencies within a defined time period for a specified

price.

Derivatives are reported on a net-by-counterparty basis (i.e.,

the net payable or receivable for derivative assets and

liabilities for a given counterparty) when a legal right of

setoff exists under an enforceable netting agreement

(counterparty netting). Derivatives are accounted for at fair

value, net of cash collateral received or posted under

enforceable credit support agreements (cash collateral

netting). Derivative assets are included in trading assets and

derivative liabilities are included in trading liabilities.

Realized and unrealized gains and losses on derivatives not

designated as hedges are included in market making (for

derivatives included in Fixed Income, Currency and

Commodities (FICC) and Equities within Global Banking &

Markets), and other principal transactions (for derivatives

included in Investment banking fees and Other within Global

Banking & Markets, as well as derivatives in Asset & Wealth

Management) in the consolidated statements of earnings. For

both 2022 and 2021, substantially all of the firm’s derivatives

were included in Global Banking & Markets.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

152

Goldman Sachs 2022 Form 10-K

The tables below present the gross fair value and the notional

amounts of derivative contracts by major product type, the

amounts of counterparty and cash collateral netting in the

consolidated balance sheets, as well as cash and securities

collateral posted and received under enforceable credit

support agreements that do not meet the criteria for netting

under U.S. GAAP.

As of December 2022 As of December 2021

$ in millions

Derivative

Assets

Derivative

Liabilities

Derivative

Assets

Derivative

Liabilities

Not accounted for as hedges

Exchange-traded $ 675 $ 1,385 $ 256 $ 557

OTC-cleared 74,297 72,979 13,795 12,692

Bilateral OTC 195,052 174,687 232,595 205,073

Total interest rates 270,024 249,051 246,646 218,322

OTC-cleared 1,516 1,802 3,665 4,053

Bilateral OTC 10,751 9,478 12,591 11,702

Total credit 12,267 11,280 16,256 15,755

Exchange-traded 1,041 22 417 10

OTC-cleared 520 589 423 338

Bilateral OTC 102,301 111,276 86,076 85,795

Total currencies 103,862 111,887 86,916 86,143

Exchange-traded 9,225 9,542 6,534 6,189

OTC-cleared 698 838 652 373

Bilateral OTC 30,017 22,745 28,359 25,969

Total commodities 39,940 33,125 35,545 32,531

Exchange-traded 26,302 26,607 33,840 35,518

OTC-cleared 685 19 8 5

Bilateral OTC 23,574 30,157 39,718 44,750

Total equities 50,561 56,783 73,566 80,273

Subtotal 476,654 462,126 458,929 433,024

Accounted for as hedges

OTC-cleared – – 1 –

Bilateral OTC 335 11 945 –

Total interest rates 335 11 946 –

OTC-cleared 29 29 34 27

Bilateral OTC 53 256 60 139

Total currencies 82 285 94 166

Subtotal 417 296 1,040 166

Total gross fair value $ 477,071 $ 462,422 $ 459,969 $ 433,190

Offset in the consolidated balance sheets

Exchange-traded $ (31,229) $ (31,229) $ (35,724) $ (35,724)

OTC-cleared (75,349) (75,349) (16,979) (16,979)

Bilateral OTC (254,304) (254,304) (279,189) (279,189)

Counterparty netting (360,882) (360,882) (331,892) (331,892)

OTC-cleared (1,388) (406) (1,033) (361)

Bilateral OTC (55,388) (46,399) (63,084) (48,984)

Cash collateral netting (56,776) (46,805) (64,117) (49,345)

Total amounts offset $ (417,658) $ (407,687) $ (396,009) $ (381,237)

Included in the consolidated balance sheets

Exchange-traded $ 6,014 $ 6,327 $ 5,323 $ 6,550

OTC-cleared 1,008 501 566 148

Bilateral OTC 52,391 47,907 58,071 45,255

Total $ 59,413 $ 54,735 $ 63,960 $ 51,953

Not offset in the consolidated balance sheets

Cash collateral $ (298) $ (1,887) $ (1,008) $ (1,939)

Securities collateral (15,229) (4,329) (15,751) (7,349)

Total $ 43,886 $ 48,519 $ 47,201 $ 42,665

Notional Amounts as of December

$ in millions 2022 2021

Not accounted for as hedges

Exchange-traded $ 4,241,937 $ 2,630,915

OTC-cleared 13,104,682 17,874,504

Bilateral OTC 11,137,127 11,122,871

Total interest rates 28,483,746 31,628,290

Exchange-traded 369 –

OTC-cleared 529,543 463,477

Bilateral OTC 577,542 616,095

Total credit 1,107,454 1,079,572

Exchange-traded 9,012 14,617

OTC-cleared 150,561 194,124

Bilateral OTC 5,304,069 6,606,927

Total currencies 5,463,642 6,815,668

Exchange-traded 341,526 308,917

OTC-cleared 3,188 3,647

Bilateral OTC 255,208 234,322

Total commodities 599,922 546,886

Exchange-traded 1,107,659 1,149,777

OTC-cleared 1,639 198

Bilateral OTC 1,026,736 1,173,103

Total equities 2,136,034 2,323,078

Subtotal 37,790,798 42,393,494

Accounted for as hedges

OTC-cleared 257,739 219,083

Bilateral OTC 3,156 4,499

Total interest rates 260,895 223,582

OTC-cleared 2,048 2,758

Bilateral OTC 7,701 18,658

Total currencies 9,749 21,416

Exchange-traded – 1,050

Total commodities – 1,050

Subtotal 270,644 246,048

Total notional amounts $ 38,061,442 $ 42,639,542

In the tables above:

• Gross fair values exclude the effects of both counterparty

netting and collateral, and therefore are not representative

of the firm’s exposure.

• Where the firm has received or posted collateral under

credit support agreements, but has not yet determined such

agreements are enforceable, the related collateral has not

been netted.

• Notional amounts, which represent the sum of gross long

and short derivative contracts, provide an indication of the

volume of the firm’s derivative activity and do not

represent anticipated losses.

• Total gross fair value of derivatives included derivative

assets of $10.08 billion as of December 2022 and $17.48

billion as of December 2021, and derivative liabilities of

$12.71 billion as of December 2022 and $17.29 billion as of

December 2021, which are not subject to an enforceable

netting agreement or are subject to a netting agreement that

the firm has not yet determined to be enforceable.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Goldman Sachs 2022 Form 10-K 153

OTC Derivatives

The table below presents OTC derivative assets and liabilities

by tenor and major product type.

$ in millions

Less than

1 Year

1 - 5

Years

Greater than

5 Years

Total

As of December 2022

Assets

Interest rates $ 5,509 $ 16,963 $ 53,943 $ 76,415

Credit 921 2,622 2,142 5,685

Currencies 12,284 7,819 7,085 27,188

Commodities 10,525 7,513 2,574 20,612

Equities 5,346 4,007 1,782 11,135

Counterparty netting in tenors (2,661) (3,942) (4,830) (11,433)

Subtotal $ 31,924 $ 34,982 $ 62,696 $ 129,602

Cross-tenor counterparty netting

(19,427)

Cash collateral netting

(56,776)

Total OTC derivative assets

$ 53,399

Liabilities

Interest rates $ 9,351 $ 23,589 $ 21,467 $ 54,407

Credit 993 2,635 1,071 4,699

Currencies 18,987 8,736 8,712 36,435

Commodities 6,400 6,135 945 13,480

Equities 7,629 7,249 2,174 17,052

Counterparty netting in tenors (2,661) (3,942) (4,830) (11,433)

Subtotal $ 40,699 $ 44,402 $ 29,539 $ 114,640

Cross-tenor counterparty netting

(19,427)

Cash collateral netting

(46,805)

Total OTC derivative liabilities

$ 48,408

As of December 2021

Assets

Interest rates $ 6,076 $ 11,655 $ 61,380 $ 79,111

Credit 1,800 2,381 3,113 7,294

Currencies 13,366 6,642 6,570 26,578

Commodities 10,178 7,348 770 18,296

Equities 11,075 6,592 2,100 19,767

Counterparty netting in tenors (3,624) (3,357) (2,673) (9,654)

Subtotal $ 38,871 $ 31,261 $ 71,260 $ 141,392

Cross-tenor counterparty netting

(18,638)

Cash collateral netting (64,117)

Total OTC derivative assets $ 58,637

Liabilities

Interest rates $ 3,929 $ 10,932 $ 34,676 $ 49,537

Credit 1,695 3,257 1,841 6,793

Currencies 14,122 6,581 5,580 26,283

Commodities 7,591 6,274 1,763 15,628

Equities 8,268 12,944 3,587 24,799

Counterparty netting in tenors (3,624) (3,357) (2,673) (9,654)

Subtotal $ 31,981 $ 36,631 $ 44,774 $ 113,386

Cross-tenor counterparty netting

(18,638)

Cash collateral netting (49,345)

Total OTC derivative liabilities $ 45,403

In the table above:

• Tenor is based on remaining contractual maturity.

• Counterparty netting within the same product type and

tenor category is included within such product type and

tenor category.

• Counterparty netting across product types within the same

tenor category is included in counterparty netting in tenors.

Where the counterparty netting is across tenor categories,

the netting is included in cross-tenor counterparty netting.

See Note 4 for an overview of the firm’s fair value

measurement policies, valuation techniques and significant

inputs used to determine the fair value of derivatives, and

Note 5 for information about derivatives within the fair value

hierarchy.

Credit Derivatives

The firm enters into a broad array of credit derivatives to

facilitate client transactions and to manage the credit risk

associated with market-making and investing and financing

activities. Credit derivatives are actively managed based on

the firm’s net risk position. Credit derivatives are generally

individually negotiated contracts and can have various

settlement and payment conventions. Credit events include

failure to pay, bankruptcy, acceleration of indebtedness,

restructuring, repudiation and dissolution of the reference

entity.

The firm enters into the following types of credit derivatives:

• Credit Default Swaps. Single-name credit default swaps

protect the buyer against the loss of principal on one or

more bonds, loans or mortgages (reference obligations) in

the event the issuer of the reference obligations suffers a

credit event. The buyer of protection pays an initial or

periodic premium to the seller and receives protection for

the period of the contract. If there is no credit event, as

defined in the contract, the seller of protection makes no

payments to the buyer. If a credit event occurs, the seller of

protection is required to make a payment to the buyer,

calculated according to the terms of the contract.

• Credit Options. In a credit option, the option writer

assumes the obligation to purchase or sell a reference

obligation at a specified price or credit spread. The option

purchaser buys the right, but does not assume the

obligation, to sell the reference obligation to, or purchase it

from, the option writer. The payments on credit options

depend either on a particular credit spread or the price of

the reference obligation.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

154

Goldman Sachs 2022 Form 10-K

• Credit Indices, Baskets and Tranches. Credit

derivatives may reference a basket of single-name credit

default swaps or a broad-based index. If a credit event

occurs in one of the underlying reference obligations, the

protection seller pays the protection buyer. The payment is

typically a pro-rata portion of the transaction’s total

notional amount based on the underlying defaulted

reference obligation. In certain transactions, the credit risk

of a basket or index is separated into various portions

(tranches), each having different levels of subordination.

The most junior tranches cover initial defaults and once

losses exceed the notional amount of these junior tranches,

any excess loss is covered by the next most senior tranche.

• Total Return Swaps. A total return swap transfers the

risks relating to economic performance of a reference

obligation from the protection buyer to the protection

seller. Typically, the protection buyer receives a floating

rate of interest and protection against any reduction in fair

value of the reference obligation, and the protection seller

receives the cash flows associated with the reference

obligation, plus any increase in the fair value of the

reference obligation.

The firm economically hedges its exposure to written credit

derivatives primarily by entering into offsetting purchased

credit derivatives with identical underliers. Substantially all

of the firm’s purchased credit derivative transactions are with

financial institutions and are subject to stringent collateral

thresholds. In addition, upon the occurrence of a specified

trigger event, the firm may take possession of the reference

obligations underlying a particular written credit derivative,

and consequently may, upon liquidation of the reference

obligations, recover amounts on the underlying reference

obligations in the event of default.

As of December 2022, written credit derivatives had a total

gross notional amount of $528.31 billion and purchased

credit derivatives had a total gross notional amount of

$579.14billion, for total net notional purchased protection of

$50.83 billion. As of December 2021, written credit

derivatives had a total gross notional amount of

$510.24 billion and purchased credit derivatives had a total

gross notional amount of $569.34 billion, for total net

notional purchased protection of $59.10 billion. The firm’s

written and purchased credit derivatives primarily consist of

credit default swaps.

The table below presents information about credit derivatives.

Credit Spread on Underlier (basis points)

$ in millions 0 - 250

251 -

500

501 -

1,000

Greater

than

1,000 Total

As of December 2022

Maximum Payout/Notional Amount of Written Credit Derivatives by Tenor

Less than 1 year $ 108,703 $ 12,166 $ 1,879 $ 4,135 $ 126,883

1 - 5 years 306,484 28,188 13,724 9,092 357,488

Greater than 5 years 39,302 2,916 1,416 305 43,939

Total $ 454,489 $ 43,270 $ 17,019 $ 13,532 $ 528,310

Maximum Payout/Notional Amount of Purchased Credit Derivatives

Offsetting $ 372,360 $ 33,149 $ 14,817 $ 11,757 $ 432,083

Other 128,828 13,211 2,615 2,407 147,061

Fair Value of Written Credit Derivatives

Asset $ 5,405 $ 460 $ 132 $ 84 $ 6,081

Liability 681 1,081 1,027 2,673 5,462

Net asset/(liability) $ 4,724 $ (621) $ (895) $ (2,589) $ 619

As of December 2021

Maximum Payout/Notional Amount of Written Credit Derivatives by Tenor

Less than 1 year $ 120,456 $ 6,173 $ 1,656 $ 4,314 $ 132,599

1 - 5 years 305,255 14,328 12,754 3,814 336,151

Greater than 5 years 35,558 3,087 2,529 311 41,485

Total $ 461,269 $ 23,588 $ 16,939 $ 8,439 $ 510,235

Maximum Payout/Notional Amount of Purchased Credit Derivatives

Offsetting $ 381,715 $ 17,210 $ 12,806 $ 6,714 $ 418,445

Other $ 138,214 $ 7,780 $ 3,576 $ 1,322 $ 150,892

Fair Value of Written Credit Derivatives

Asset $ 9,803 $ 924 $ 318 $ 137 $ 11,182

Liability 941 123 1,666 1,933 4,663

Net asset/(liability) $ 8,862 $ 801 $ (1,348) $ (1,796) $ 6,519

In the table above:

• Fair values exclude the effects of both netting of receivable

balances with payable balances under enforceable netting

agreements, and netting of cash received or posted under

enforceable credit support agreements, and therefore are

not representative of the firm’s credit exposure.

• Tenor is based on remaining contractual maturity.

• The credit spread on the underlier, together with the tenor

of the contract, are indicators of payment/performance

risk. The firm is less likely to pay or otherwise be required

to perform where the credit spread and the tenor are lower.

• Offsetting purchased credit derivatives represent the

notional amount of purchased credit derivatives that

economically hedge written credit derivatives with identical

underliers.

• Other purchased credit derivatives represent the notional

amount of all other purchased credit derivatives not

included in offsetting.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Goldman Sachs 2022 Form 10-K 155

Impact of Credit and Funding Spreads on Derivatives

The firm realizes gains or losses on its derivative contracts.

These gains or losses include credit valuation adjustments

(CVA) relating to uncollateralized derivative assets and

liabilities, which represent the gains or losses (including

hedges) attributable to the impact of changes in credit

exposure, counterparty credit spreads, liability funding

spreads (which include the firm’s own credit), probability of

default and assumed recovery. These gains or losses also

include funding valuation adjustments (FVA) relating to

uncollateralized derivative assets, which represent the gains

or losses (including hedges) attributable to the impact of

changes in expected funding exposures and funding spreads.

The table below presents information about CVA and FVA.

Year Ended December

$ in millions 2022 2021 2020

CVA, net of hedges $ 320 $ 25 $ (143)

FVA, net of hedges (193) 60 173

Total $ 127 $ 85 $ 30

Bifurcated Embedded Derivatives

The table below presents the fair value and the notional

amount of derivatives that have been bifurcated from their

related borrowings.

As of December

$ in millions 2022 2021

Fair value of assets $ 288 $ 845

Fair value of liabilities (392) (124)

Net asset/(liability) $ (104) $ 721

Notional amount

$ 8,892 $ 10,743

In the table above, derivatives that have been bifurcated from

their related borrowings are recorded at fair value and

primarily consist of interest rate, equity and commodity

products. These derivatives are included in unsecured short-

and long-term borrowings, as well as other secured

financings, with the related borrowings.

Derivatives with Credit-Related Contingent Features

Certain of the firm’s derivatives have been transacted under

bilateral agreements with counterparties who may require the

firm to post collateral or terminate the transactions based on

changes in the firm’s credit ratings. The firm assesses the

impact of these bilateral agreements by determining the

collateral or termination payments that would occur

assuming a downgrade by all rating agencies. A downgrade

by any one rating agency, depending on the agency’s relative

ratings of the firm at the time of the downgrade, may have an

impact which is comparable to the impact of a downgrade by

all rating agencies.

The table below presents information about net derivative

liabilities under bilateral agreements (excluding collateral

posted), the fair value of collateral posted and additional

collateral or termination payments that could have been

called by counterparties in the event of a one- or two-notch

downgrade in the firm’s credit ratings.

As of December

$ in millions 2022 2021

Net derivative liabilities under bilateral agreements $ 33,059 $ 34,315

Collateral posted $ 27,657 $ 29,214

Additional collateral or termination payments:

One-notch downgrade $ 343 $ 345

Two-notch downgrade $ 1,115 $ 1,536

Hedge Accounting

The firm applies hedge accounting for (i) interest rate swaps

used to manage the interest rate exposure of certain fixed-

rate unsecured long- and short-term borrowings, certain

fixed-rate certificates of deposit and certain U.S. government

securities classified as available-for-sale, (ii) foreign currency

forward contracts used to manage the foreign exchange risk

of certain available-for-sale, (iii) foreign currency forward

contracts and foreign currency-denominated debt used to

manage foreign exchange risk on the firm’s net investment in

certain non-U.S. operations and (iv) commodity futures

contracts used to manage the price risk of certain

commodities.

To qualify for hedge accounting, the hedging instrument

must be highly effective at reducing the risk from the

exposure being hedged. Additionally, the firm must formally

document the hedging relationship at inception and assess the

hedging relationship at least on a quarterly basis to ensure the

hedging instrument continues to be highly effective over the

life of the hedging relationship.

Fair Value Hedges

The firm designates interest rate swaps as fair value hedges of

certain fixed-rate unsecured long- and short-term debt and

fixed-rate certificates of deposit and, beginning in the second

quarter of 2022, of certain U.S. government securities

classified as available-for-sale. These interest rate swaps

hedge changes in fair value attributable to the designated

benchmark interest rate (e.g., London Interbank Offered

Rate (LIBOR), Secured Overnight Financing Rate (SOFR) or

Overnight Index Swap Rate), effectively converting a

substantial portion of these fixed-rate financial instruments

into floating-rate financial instruments.

The firm applies a statistical method that utilizes regression

analysis when assessing the effectiveness of these hedging

relationships in achieving offsetting changes in the fair values

of the hedging instrument and the risk being hedged (i.e.,

interest rate risk). An interest rate swap is considered highly

effective in offsetting changes in fair value attributable to

changes in the hedged risk when the regression analysis

results in a coefficient of determination of 80% or greater

and a slope between 80% and 125%.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

156

Goldman Sachs 2022 Form 10-K

For qualifying interest rate fair value hedges, gains or losses

on derivatives are included in interest income/expense. The

change in fair value of the hedged items attributable to the

risk being hedged is reported as an adjustment to its carrying

value (hedging adjustment) and is also included in interest

income/expense. When a derivative is no longer designated as

a hedge, any remaining difference between the carrying value

and par value of the hedged item is amortized in interest

income/expense over the remaining life of the hedged item

using the effective interest method. See Note 23 for further

information about interest income and interest expense.

The table below presents the gains/(losses) from interest rate

derivatives accounted for as hedges and the related hedged

items.

Year Ended December

$ in millions 2022 2021 2020

Investments

Interest rate hedges $ 366 $ – $ –

Hedged investments (350) – –

Gains/(losses) $ 16 $ – $ –

Borrowings and deposits

Interest rate hedges $ (22,183) $ (6,638) $ 3,862

Hedged borrowings and deposits

21,662 6,085 (4,557)

Gains/(losses) $ (521) $ (553) $ (695)

The table below presents the carrying value of investments,

deposits and unsecured borrowings that are designated in an

interest rate hedging relationship and the related cumulative

hedging adjustment (increase/(decrease)) from current and

prior hedging relationships included in such carrying values.

$ in millions

Carrying

Value

Cumulative

Hedging

Adjustment

As of December 2022

Assets

Investments $ 10,804 $ (350)

Liabilities

Deposits $ 6,311 $ (280)

Unsecured short-term borrowings $ 7,295 $ (47)

Unsecured long-term borrowings $ 151,215 $ (15,134)

As of December 2021

Liabilities

Deposits $ 14,131 $ 246

Unsecured short-term borrowings $ 2,167 $ 5

Unsecured long-term borrowings $ 144,934 $ 6,169

In the table above:

• Cumulative hedging adjustment included $5.09 billion as of

December 2022 and $5.91 billion as of December 2021 of

hedging adjustments from prior hedging relationships that

were de-designated and substantially all were related to

unsecured long-term borrowings.

• The amortized cost of investments was $11.49billion as of

December 2022.

In addition, cumulative hedging adjustments for items no

longer designated in a hedging relationship were $111 million

as of December 2022 and $68 million as of December 2021

and were substantially all related to unsecured long-term

borrowings.

The firm designates foreign currency forward contracts as

fair value hedges of the foreign exchange risk of non-U.S.

government securities classified as available-for-sale. See

Note 8 for information about the amortized cost and fair

value of such securities. The effectiveness of such hedges is

assessed based on changes in spot rates. The gains/(losses) on

the hedges (relating to both spot and forward points) and the

foreign exchange gains/(losses) on the related available-for-

sale securities are included in market making. The net gains/

(losses) on hedges and related available-for-sale securities

were $(30) million (reflecting a gain of $266 million related to

hedges and a loss of $296 million on the related hedged

available-for-sale securities) for 2022. The gross and net

gains/(losses) were not material for both 2021 and 2020.

The firm designates commodity futures contracts as fair

value hedges of the price risk of certain precious metals

included in commodities within trading assets. As of

December 2022, there were no such hedges outstanding, and

as of December 2021, the carrying value of such commodities

was $1.05 billion and the amortized cost was $1.02 billion.

Changes in spot rates of such commodities are reflected as an

adjustment to their carrying value, and the related gains/

(losses) on both the commodities and the designated futures

contracts are included in market making. The contractual

forward points on the designated futures contracts are

amortized into earnings ratably over the life of the contract

and other gains/(losses) as a result of changes in the forward

points are included in other comprehensive income/(loss).

The cumulative hedging adjustment was not material as of

both December 2022 and December 2021, and the related

gains/(losses) were not material for both 2022 and 2021.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Goldman Sachs 2022 Form 10-K 157

Net Investment Hedges

The firm seeks to reduce the impact of fluctuations in foreign

exchange rates on its net investments in certain non-U.S.

operations through the use of foreign currency forward

contracts and foreign currency-denominated debt. For

foreign currency forward contracts designated as hedges, the

effectiveness of the hedge is assessed based on the overall

changes in the fair value of the forward contracts (i.e., based

on changes in forward rates). For foreign currency-

denominated debt designated as a hedge, the effectiveness of

the hedge is assessed based on changes in spot rates. For

qualifying net investment hedges, all gains or losses on the

hedging instruments are included in currency translation.

The table below presents the gains/(losses) from net

investment hedging.

Year Ended December

$ in millions 2022 2021 2020

Hedges:

Foreign currency forward contract $ 1,713 $ 755 $ (126)

Foreign currency-denominated debt

$ (269) $ 386 $ (297)

Gains or losses on individual net investments in non-U.S.

operations are reclassified from accumulated other

comprehensive income/(loss) to other principal transactions

in the consolidated statements of earnings when such net

investments are sold or substantially liquidated. The gross

and net gains and losses on hedges and the related net

investments in non-U.S. operations reclassified to earnings

from accumulated other comprehensive income/(loss) were

not material for both 2022 and 2021, and $61 million

(reflecting a gain of $214million related to hedges and a loss

of $153 million on the related net investments in non-U.S.

operations) for 2020.

The firm had designated $21.46 billion as of December 2022

and $3.71 billion as of December 2021 of foreign currency-

denominated debt, included in unsecured long- and short-

term borrowings, as hedges of net investments in non-U.S.

subsidiaries.

Note 8.

Investments

Investments includes debt instruments and equity securities

that are accounted for at fair value and are generally held by

the firm in connection with its long-term investing activities.

In addition, investments includes debt securities classified as

available-for-sale and held-to-maturity that are generally held

in connection with the firm’s asset-liability management

activities. Investments also consists of equity securities that

are accounted for under the equity method.

The table below presents information about investments.

As of December

$ in millions 2022 2021

Equity securities, at fair value $ 14,892 $ 18,937

Debt instruments, at fair value 14,075 15,558

Available-for-sale securities, at fair value 49,234 48,932

Investments, at fair value 78,201 83,427

Held-to-maturity securities 51,662 4,699

Equity method investments 766 593

Total investments $ 130,629 $ 88,719

See Note 4 for an overview of the firm’s fair value

measurement policies, valuation techniques and significant

inputs used to determine the fair value of investments, and

Note 5 for information about investments within the fair

value hierarchy.

Equity Securities and Debt Instruments, at Fair Value

Equity securities and debt instruments, at fair value are

accounted for at fair value either under the fair value option

or in accordance with other U.S. GAAP, and the related fair

value gains and losses are recognized in the consolidated

statements of earnings.

Equity Securities, at Fair Value. Equity securities, at fair

value consists of the firm’s public and private equity

investments in corporate and real estate entities.

The table below presents information about equity securities,

at fair value.

As of December

$ in millions 2022 2021

Equity securities, at fair value

$ 14,892 $ 18,937

Equity Type

Public equity 13% 24%

Private equity 87% 76%

Total 100% 100%

Asset Class

Corporate 71% 78%

Real estate 29% 22%

Total 100% 100%

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

158

Goldman Sachs 2022 Form 10-K

In the table above:

• Equity securities, at fair value included investments

accounted for at fair value under the fair value option

where the firm would otherwise apply the equity method of

accounting of $5.35 billion as of December 2022 and $5.81

billion as of December 2021. Gains/(losses) recognized as a

result of changes in the fair value of equity securities for

which the fair value option was elected were $(86) million

for 2022 and $2.12billion for 2021. These gains/(losses) are

included in other principal transactions.

• Equity securities, at fair value included $1.30 billion as of

December 2022 and $1.80 billion as of December 2021 of

investments in funds that are measured at NAV.

Debt Instruments, at Fair Value. Debt instruments, at fair

value primarily includes mezzanine, senior and distressed

debt.

The table below presents information about debt

instruments, at fair value.

As of December

$ in millions 2022 2021

Corporate debt securities $ 10,098 $ 9,793

Securities backed by real estate 1,003 2,280

Money market instruments 1,005 1,396

Other 1,969 2,089

Total $ 14,075 $ 15,558

In the table above:

• Money market instruments primarily includes time

deposits and investments in money market funds.

• Other included $1.64 billion as of December 2022 and $1.67

billion as of December 2021 of investments in credit funds

that are measured at NAV.

Investments in Funds at Net Asset Value Per Share.

Equity securities and debt instruments, at fair value include

investments in funds that are measured at NAV of the

investment fund. The firm uses NAV to measure the fair

value of fund investments when (i) the fund investment does

not have a readily determinable fair value and (ii) the NAV of

the investment fund is calculated in a manner consistent with

the measurement principles of investment company

accounting, including measurement of the investments at fair

value.

Substantially all of the firm’s investments in funds at NAV

consist of investments in firm-sponsored private equity,

credit, real estate and hedge funds where the firm co-invests

with third-party investors.

Private equity funds primarily invest in a broad range of

industries worldwide, including leveraged buyouts,

recapitalizations, growth investments and distressed

investments. Credit funds generally invest in loans and other

fixed income instruments and are focused on providing

private high-yield capital for leveraged and management

buyout transactions, recapitalizations, financings,

refinancings, acquisitions and restructurings for private

equity firms, private family companies and corporate issuers.

Real estate funds invest globally, primarily in real estate

companies, loan portfolios, debt recapitalizations and

property. Private equity, credit and real estate funds are

closed-end funds in which the firm’s investments are

generally not eligible for redemption. Distributions will be

received from these funds as the underlying assets are

liquidated or distributed, the timing of which is uncertain.

The firm also invests in hedge funds, primarily multi-

disciplinary hedge funds that employ a fundamental bottom-

up investment approach across various asset classes and

strategies. The firm’s investments in hedge funds primarily

include interests where the underlying assets are illiquid in

nature, and proceeds from redemptions will not be received

until the underlying assets are liquidated or distributed, the

timing of which is uncertain.

The firm's investments in funds at NAV includes investments

in “covered funds” as defined in the Volcker Rule of the U.S.

Dodd-Frank Wall Street Reform and Consumer Protection

Act (Dodd-Frank Act). To achieve conformance with the

covered fund provisions of the Volcker Rule by July 2022, the

firm restructured certain legacy “illiquid funds” (as defined

by the Volcker Rule) to be non-covered funds as liquidating

trusts. However, based on recent interpretations of the

covered fund provisions of the Volcker Rule, the firm was

required to seek an additional extension from the Board of

Governors of the Federal Reserve System (FRB) to bring these

funds into conformance. The FRB granted the firm an

additional extension to July 2023. If the firm does not

conform such funds by July 2023, the firm will be required to

sell such interests. If that occurs, the firm may receive a value

for its interests that is less than the then carrying value as

there could be a limited secondary market for these

investments and the firm may be unable to sell them in

orderly transactions. As of December 2022, the amount by

which the firm’s investment in such funds would need to be

reduced in order to achieve conformance was approximately

$200 million (net of the firm’s pro rata share of cash in the

funds).

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Goldman Sachs 2022 Form 10-K 159

The table below presents the fair value of investments in

funds at NAV and the related unfunded commitments.

$ in millions

Fair Value of

Investments

Unfunded

Commitments

As of December 2022

Private equity funds $ 815 $ 647

Credit funds 1,645 303

Hedge funds 68 –

Real estate funds 413 138

Total $ 2,941 $ 1,088

As of December 2021

Private equity funds $ 1,411 $ 619

Credit funds 1,686 556

Hedge funds 84 –

Real estate funds 288 147

Total $ 3,469 $ 1,322

Available-for-Sale Securities

Available-for-sale securities are accounted for at fair value,

and the related unrealized fair value gains and losses are

included in accumulated other comprehensive income/(loss)

unless designated in a fair value hedging relationship. See

Note 7 for information about available-for-sale securities

that are designated in a hedging relationship.

The table below presents information about available-for-

sale securities by tenor.

$ in millions

Amortized

Cost

Fair

Value

Weighted

Average

Yield

As of December 2022

Less than 1 year $ 8,103 $ 7,861 0.37%

1 year to 5 years 41,479 38,706 0.74%

5 years to 10 years 538 488 1.86%

Total U.S. government obligations 50,120 47,055 0.69%

1 year to 5 years 10 10 0.27%

5 years to 10 years

2,616 2,169 0.40%

Total non-U.S. government obligations 2,626 2,179 0.40%

Total available-for-sale securities $ 52,746 $ 49,234 0.68%

As of December 2021

Less than 1 year $ 25 $ 25 0.12%

1 year to 5 years 41,536 41,066 0.47%

5 years to 10 years 5,337 5,229 0.92%

Greater than 10 years 2 2 2.00%

Total U.S. government obligations 46,900 46,322 0.53%

5 years to 10 years 2,693 2,610 0.33%

Total non-U.S. government obligations 2,693 2,610 0.33%

Total available-for-sale securities $ 49,593 $ 48,932 0.52%

In the table above:

• Available-for-sale securities were classified in level 1 of the

fair value hierarchy as of both December 2022 and

December 2021.

• The weighted average yield for available-for-sale securities

is presented on a pre-tax basis and computed using the

effective interest rate of each security at the end of the

period, weighted based on the fair value of each security.

• The gross unrealized gains included in accumulated other

comprehensive income/(loss) were not material and the

gross unrealized losses included in accumulated other

comprehensive income/(loss) were $3.52 billion as of

December 2022 and primarily related to U.S. government

obligations in a continuous unrealized loss position for

more than a year. The gross unrealized gains included in

accumulated other comprehensive income/(loss) were $118

million and the gross unrealized losses included in

accumulated other comprehensive income/(loss) were $779

million as of December 2021 and primarily related to U.S.

government obligations in a continuous unrealized loss

position for less than a year. Net unrealized losses included

in other comprehensive income/(loss) were $2.85 billion

($2.13 billion, net of tax) for 2022 and $1.28 billion ($955

million, net of tax) for 2021.

• If the fair value of available-for-sale securities is less than

amortized cost, such securities are considered impaired. If

the firm has the intent to sell the debt security, or if it is

more likely than not that the firm will be required to sell

the debt security before recovery of its amortized cost, the

difference between the amortized cost (net of allowance, if

any) and the fair value of the securities is recognized as an

impairment loss in earnings. The firm did not record any

such impairment losses during either 2022 or 2021.

Impaired available-for-sale debt securities that the firm has

the intent and ability to hold are reviewed to determine if

an allowance for credit losses should be recorded. The firm

considers various factors in such determination, including

market conditions, changes in issuer credit ratings and

severity of the unrealized losses. The firm did not record

any provision for credit losses on such securities during

either 2022 or 2021.

The table below presents gross realized gains/(losses) and the

proceeds from the sales of available-for-sale securities.

Year Ended December

$ in millions 2022 2021 2020

Gross realized gains $ – $ 206 $ 319

Gross realized losses – (19) –

Gains/(losses) $ – $ 187 $ 319

Proceeds from sales $ 2 $ 24,882 $ 4,489

In the table above, the realized gains/(losses) were reclassified

from accumulated other comprehensive income/(loss) to

other principal transactions in the consolidated statements of

earnings.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

160

Goldman Sachs 2022 Form 10-K

Held-to-Maturity Securities

Held-to-maturity securities are accounted for at amortized

cost.

The table below presents information about held-to-maturity

securities by type and tenor.

$ in millions

Amortized

Cost

Fair

Value

Weighted

Average

Yield

As of December 2022

Less than 1 year $ 5,319 $ 5,282 2.98%

1 year to 5 years 45,154 43,852 3.00%

5 years to 10 years 1,026 966 2.89%

Total U.S. government obligations 51,499 50,100 2.99%

5 years to 10 years 2 2 5.63%

Greater than 10 years 161 158 3.18%

Total securities backed by real estate 163 160 3.24%

Total held-to-maturity securities $ 51,662 $ 50,260 2.99%

As of December 2021

1 year to 5 years $ 4,054 $ 4,200 2.30%

Total U.S. government obligations 4,054 4,200 2.30%

5 years to 10 years 3 3 2.78%

Greater than 10 years 642 670 1.03%

Total securities backed by real estate 645 673 1.04%

Total held-to-maturity securities $ 4,699 $ 4,873 2.13%

In the table above:

• Substantially all of the securities backed by real estate

consist of securities backed by residential real estate.

• As these securities are not accounted for at fair value, they

are not included in the firm’s fair value hierarchy in Notes

4 and 5. Had these securities been included in the firm’s fair

value hierarchy, U.S. government obligations would have

been classified in level 1 and securities backed by real estate

would have been primarily classified in level 2 of the fair

value hierarchy as of both December 2022 and December

2021.

• The weighted average yield for held-to-maturity securities

is presented on a pre-tax basis and computed using the

effective interest rate of each security at the end of the

period, weighted based on the amortized cost of each

security.

• The gross unrealized gains were not material as of

December 2022 and were $175 million as of December

2021. The gross unrealized losses were $1.44 billion as of

December 2022 and were not material as of December

2021.

• Held-to-maturity securities are reviewed to determine if an

allowance for credit losses should be recorded in the

consolidated statements of earnings. The firm considers

various factors in such determination, including market

conditions, changes in issuer credit ratings, historical credit

losses and sovereign guarantees. Provision for credit losses

on such securities was not material during either 2022 or

2021.

Note 9.

Loans

Loans includes (i) loans held for investment that are

accounted for at amortized cost net of allowance for loan

losses or at fair value under the fair value option and (ii)

loans held for sale that are accounted for at the lower of cost

or fair value. Interest on loans is recognized over the life of

the loan and is recorded on an accrual basis.

The table below presents information about loans.

$ in millions

Amortized

Cost

Fair

Value

Held For

Sale Total

As of December 2022

Loan Type

Corporate $ 36,822 $ 996 $ 2,317 $ 40,135

Commercial real estate 26,222 1,146 1,511 28,879

Residential real estate 18,523 4,511 1 23,035

Securities-based 16,671 – – 16,671

Other collateralized 50,473 716 513 51,702

Consumer:

Installment 6,326 – – 6,326

Credit cards 15,820 – – 15,820

Other 1,723 286 252 2,261

Total loans, gross 172,580 7,655 4,594 184,829

Allowance for loan losses (5,543) – – (5,543)

Total loans $ 167,037 $ 7,655 $ 4,594 $ 179,286

As of December 2021

Loan Type

Corporate $ 34,663 $ 1,609 $ 1,371 $ 37,643

Commercial real estate 24,267 1,588 3,145 29,000

Residential real estate 18,389 6,185 100 24,674

Securities-based 16,652 – – 16,652

Other collateralized 35,916 955 1,392 38,263

Consumer:

Installment 3,672 – – 3,672

Credit cards 8,212 – – 8,212

Other 1,736 432 1,851 4,019

Total loans, gross 143,507 10,769 7,859 162,135

Allowance for loan losses (3,573) – – (3,573)

Total loans $ 139,934 $ 10,769 $ 7,859 $ 158,562

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Goldman Sachs 2022 Form 10-K 161

In the fourth quarter of 2022, the firm changed the

classification of loans to better reflect the nature of the

underlying collateral. This includes the addition of the

securities-based and other collateralized loan types, as well as

the removal of the wealth management loan type. This also

resulted in reclassifications of certain loans in the corporate

and other loan types to the other collateralized loan type.

Prior periods have been conformed to the current

presentation.

In the table above:

• The increase in credit cards from December 2021 to

December 2022 included approximately $2.0 billion

relating to the firm’s acquisition of the General Motors co-

branded credit card portfolio.

• Loans held for investment that are accounted for at

amortized cost include net deferred fees and costs, and

unamortized premiums and discounts, which are amortized

over the life of the loan. These amounts were less than 1%

of loans accounted for at amortized cost as of both

December 2022 and December 2021.

The following is a description of the loan types in the table

above:

• Corporate. Corporate loans includes term loans, revolving

lines of credit, letter of credit facilities and bridge loans,

and are principally used for operating and general

corporate purposes, or in connection with acquisitions.

Corporate loans are secured (typically by a senior lien on

the assets of the borrower) or unsecured, depending on the

loan purpose, the risk profile of the borrower and other

factors.

• Commercial Real Estate. Commercial real estate loans

includes originated loans that are directly or indirectly

secured by hotels, retail stores, multifamily housing

complexes and commercial and industrial properties.

Commercial real estate loans also includes loans extended

to clients who warehouse assets that are directly or

indirectly backed by commercial real estate. In addition,

commercial real estate includes loans purchased by the

firm.

• Residential Real Estate. Residential real estate loans

primarily includes loans extended to wealth management

clients and to clients who warehouse assets that are directly

or indirectly secured by residential real estate. In addition,

residential real estate includes loans purchased by the firm.

• Securities-Based. Securities-based loans includes loans

that are secured by stocks, bonds, mutual funds, and

exchange-traded funds. These loans are primarily extended

to the firm's wealth management clients and used for

purposes other than purchasing, carrying or trading margin

stocks. Securities-based loans require borrowers to post

additional collateral based on changes in the underlying

collateral's fair value.

• Other Collateralized. Other collateralized loans includes

loans that are backed by specific collateral (other than

securities and real estate). Such loans are extended to

clients who warehouse assets that are directly or indirectly

secured by corporate loans, consumer loans and other

assets. Other collateralized loans also includes loans to

investment funds (managed by third parties) that are

collateralized by capital commitments of the funds'

investors or assets held by the fund, as well as other

secured loans extended to the firm's wealth management

clients.

• Installment. Installment loans are unsecured loans

originated by the firm (including point-of-sale loans that

the firm began to originate through the GreenSky platform

in the third quarter of 2022).

• Credit Cards. Credit card loans are loans made pursuant

to revolving lines of credit issued to consumers by the firm.

• Other. Other loans includes unsecured loans extended to

wealth management clients and unsecured consumer and

credit card loans purchased by the firm.

See Note 4 for an overview of the firm’s fair value

measurement policies, valuation techniques and significant

inputs used to determine the fair value of loans, and Note 5

for information about loans within the fair value hierarchy.

Credit Quality

Risk Assessment. The firm’s risk assessment process

includes evaluating the credit quality of its loans by the firm’s

independent risk oversight and control function. For

corporate loans and a majority of securities-based, real

estate, other collateralized and other loans, the firm performs

credit analyses which incorporate initial and ongoing

evaluations of the capacity and willingness of a borrower to

meet its financial obligations. These credit evaluations are

performed on an annual basis or more frequently if deemed

necessary as a result of events or changes in circumstances.

The firm determines an internal credit rating for the

borrower by considering the results of the credit evaluations

and assumptions with respect to the nature of and outlook

for the borrower’s industry and the economic environment.

The internal credit rating does not take into consideration

collateral received or other credit support arrangements. For

consumer loans and for loans that are not assigned an

internal credit rating, the firm reviews certain key metrics,

including, but not limited to, the Fair Isaac Corporation

(FICO) credit scores, delinquency status, collateral value and

other risk factors.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

162

Goldman Sachs 2022 Form 10-K

The table below presents gross loans by an internally

determined public rating agency equivalent or other credit

metrics and the concentration of secured and unsecured

loans.

$ in millions

Investment-

Grade

Non-Investment-

Grade

Other Metrics/

Unrated Total

As of December 2022

Accounting Method

Amortized cost $ 63,971 $ 79,648 $ 28,961 $ 172,580

Fair value 1,735 3,349 2,571 7,655

Held for sale 466 4,082 46 4,594

Total $ 66,172 $ 87,079 $ 31,578 $ 184,829

Loan Type

Corporate $ 10,200 $ 29,935 $ – $ 40,135

Real estate:

Commercial 5,208 23,536 135 28,879

Residential 3,710 13,954 5,371 23,035

Securities-based 12,901 764 3,006 16,671

Other collateralized 33,093 18,291 318 51,702

Consumer:

Installment – – 6,326 6,326

Credit cards – – 15,820 15,820

Other 1,060 599 602 2,261

Total $ 66,172 $ 87,079 $ 31,578 $ 184,829

Secured 85% 93% 27% 79%

Unsecured 15% 7% 73% 21%

Total 100% 100% 100% 100%

As of December 2021

Accounting Method

Amortized cost $ 50,923 $ 75,179 $ 17,405 $ 143,507

Fair value 2,301 4,634 3,834 10,769

Held for sale 1,650 4,747 1,462 7,859

Total $ 54,874 $ 84,560 $ 22,701 $ 162,135

Loan Type

Corporate

$ 8,345

$ 29,183

$ 115

$ 37,643

Real estate:

Commercial

6,283

22,344

373

29,000

Residential

3,194

16,071

5,409

24,674

Securities-based

13,801

447

2,404

16,652

Other collateralized

22,290

15,601

372

38,263

Consumer:

Installment

–

3,672

Credit cards

–

8,212

Other

961

914

2,144

4,019

Total

$ 54,874

$ 84,560

$ 22,701

$ 162,135

Secured

85%

92%

36%

82%

Unsecured

15%

64%

18%

Total

100%

In the table above:

• Substantially all residential real estate, securities-based,

other collateralized and other loans included in the other

metrics/unrated category consists of loans where the firm

uses other key metrics to assess the borrower’s credit

quality, such as loan-to-value ratio, delinquency status,

collateral value, expected cash flows, FICO credit score

(which measures a borrower’s creditworthiness by

considering factors such as payment and credit history) and

other risk factors.

• For installment and credit card loans included in the other

metrics/unrated category, the evaluation of credit quality

incorporates the borrower’s FICO credit score. FICO credit

scores are periodically refreshed by the firm to assess the

updated creditworthiness of the borrower. See “Vintage”

below for information about installment and credit card

loans by FICO credit scores.

The firm also assigns a regulatory risk rating to its loans

based on the definitions provided by the U.S. federal bank

regulatory agencies. Total loans included 93% of loans as of

December 2022 and 92% of loans as of December 2021 that

were rated pass/non-criticized.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Goldman Sachs 2022 Form 10-K 163

Vintage. The tables below present gross loans accounted for

at amortized cost (excluding installment and credit card

loans) by an internally determined public rating agency

equivalent or other credit metrics and origination year for

term loans.

As of December 2022

$ in millions

Investment-

Grade

Non-

Investment-

Grade

Other

Metrics/

Unrated Total

2022 $ 2,607 $ 4,042 $ 2 $ 6,651

2021 1,669 4,273 – 5,942

2020 684 2,595 – 3,279

2019 209 2,779 – 2,988

2018 759 1,911 – 2,670

2017 or earlier 508 2,329 – 2,837

Revolving 3,709 8,746 – 12,455

Corporate

10,145 26,675 2 36,822

2022 734 3,971 2 4,707

2021 744 3,487 – 4,231

2020 407 1,740 – 2,147

2019 335 1,412 – 1,747

2018 212 469 – 681

2017 or earlier 1,238 797 11 2,046

Revolving 1,281 9,382 – 10,663

Commercial real estate

4,951 21,258 13 26,222

2022 941 1,385 1,307 3,633

2021 932 1,219 1,357 3,508

2020 – 14 89 103

2019 7 – 99 106

2018 10 50 138 198

2017 or earlier 31 10 142 183

Revolving 773 10,019 – 10,792

Residential real estate

2,694 12,697 3,132 18,523

2022 5 – – 5

2018 1 – – 1

2017 or earlier – 291 – 291

Revolving 12,895 473 3,006 16,374

Securities-based

12,901 764 3,006 16,671

2022 4,095 1,212 113 5,420

2021 1,860 2,577 146 4,583

2020 777 1,795 36 2,608

2019 235 367 12 614

2018 504 149 6 659

2017 or earlier 294 301 – 595

Revolving 24,504 11,488 2 35,994

Other collateralized

32,269 17,889 315 50,473

2022 44 105 – 149

2021 17 162 – 179

2020 – 29 262 291

2019 – 10 – 10

2017 or earlier – – 5 5

Revolving 950 59 80 1,089

Other

1,011 365 347 1,723

Total

$ 63,971 $ 79,648 $ 6,815 $ 150,434

Percentage of total 42% 53% 5% 100%

As of December 2021

$ in millions

Investment-

Grade

Non-

Investment-

Grade

Other

Metrics/

Unrated Total

2021

$ 2,932 $ 6,843 $ – $ 9,775

2020

675 3,051 7 3,733

2019

314 3,630 – 3,944

2018

1,310 2,751 – 4,061

2017

431 1,737 – 2,168

2016 or earlier

273 1,648 – 1,921

Revolving 2,180 6,806 75 9,061

Corporate 8,115 26,466 82 34,663

2021

799 4,139 94 5,032

2020

532 2,081 – 2,613

2019

444 1,548 – 1,992

2018

478 854 – 1,332

2017

760 625 – 1,385

2016 or earlier

692 824 7 1,523

Revolving 1,883 8,507 – 10,390

Commercial real estate 5,588 18,578 101 24,267

2021

864 2,744 1,517 5,125

2020

271 564 103 938

2019

9 – 173 182

2018

– 96 165 261

2017

25 73 119 217

2016 or earlier

– 1 56 57

Revolving 690 10,919 – 11,609

Residential real estate 1,859 14,397 2,133 18,389

2018

– 1 – 1

2017

– 22 – 22

2016 or earlier

264 – – 264

Revolving 13,537 424 2,404 16,365

Securities-based 13,801 447 2,404 16,652

2021

1,876 4,316 304 6,496

2020

1,378 1,598 48 3,024

2019

243 464 19 726

2018

595 180 – 775

2017

303 125 – 428

2016 or earlier

15 47 – 62

Revolving 16,257 8,148 – 24,405

Other collateralized 20,667 14,878 371 35,916

2021

68 290 10 368

2020

– 60 330 390

2019

30 20 – 50

2017

– – 8 8

Revolving 795 43 82 920

Other 893 413 430 1,736

Total $ 50,923 $ 75,179 $ 5,521 $ 131,623

Percentage of total 39% 57% 4% 100%

In the tables above, revolving loans which converted to term

loans were $725 million as of December 2022, and primarily

included other collateralized loans. Such loans were not

material as of December 2021.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

164

Goldman Sachs 2022 Form 10-K

The table below presents gross installment loans by refreshed

FICO credit scores and origination year and gross credit card

loans by refreshed FICO credit scores.

$ in millions

Greater than or

equal to 660 Less than 660 Total

As of December 2022

2022 $ 4,349 $ 242 $ 4,591

2021 1,080 109 1,189

2020 251 23 274

2019 160 23 183

2018 70 13 83

2017 or earlier 5 1 6

Installment 5,915 411 6,326

Credit cards 10,762 5,058 15,820

Total $ 16,677 $ 5,469 $ 22,146

Percentage of total:

Installment 94% 6% 100%

Credit cards 68% 32% 100%

Total 75% 25% 100%

As of December 2021

2021 $ 2,017 $ 42 $ 2,059

2020 665 40 705

2019 508 61 569

2018 257 42 299

2017 32 7 39

2016 1 – 1

Installment 3,480 192 3,672

Credit cards 6,100 2,112 8,212

Total $ 9,580 $ 2,304 $ 11,884

Percentage of total:

Installment 95% 5% 100%

Credit cards 74% 26% 100%

Total 81% 19% 100%

In the table above, credit card loans consist of revolving lines

of credit.

Credit Concentrations. The table below presents the

concentration of gross loans by region.

$ in millions

Carrying

Value Americas EMEA Asia Total

As of December 2022

Corporate $ 40,135 57% 34% 9% 100%

Commercial real estate 28,879 79% 16% 5% 100%

Residential real estate 23,035 96% 3% 1% 100%

Securities-based 16,671 83% 15% 2% 100%

Other collateralized 51,702 86% 12% 2% 100%

Consumer:

Installment 6,326 100% – – 100%

Credit cards 15,820 100% – – 100%

Other 2,261 89% 11% – 100%

Total $ 184,829 81% 15% 4% 100%

As of December 2021

Corporate $ 37,643 52% 38% 10% 100%

Commercial real estate 29,000 82% 13% 5% 100%

Residential real estate

24,674

96%

100%

Securities-based 16,652 77% 16% 7% 100%

Other collateralized 38,263 74% 23% 3% 100%

Consumer:

Installment 3,672 100% – – 100%

Credit cards 8,212 100% – – 100%

Other 4,019 89% 11% – 100%

Total $ 162,135 76% 19% 5% 100%

In the table above:

• EMEA represents Europe, Middle East and Africa.

• The top five industry concentrations for corporate loans as

of December 2022 were 26% for technology, media &

telecommunications, 18% for diversified industrials, 11%

for real estate, 10% for healthcare and 10% for consumer

& retail.

• The top five industry concentrations for corporate loans as

of December 2021 were 24% for technology, media &

telecommunications, 17% for diversified industrials, 13%

for natural resources & utilities, 11% for consumer &

retail and 10% for healthcare.

Nonaccrual and Past Due Loans. Loans accounted for at

amortized cost (other than credit card loans) are placed on

nonaccrual status when it is probable that the firm will not

collect all principal and interest due under the contractual

terms, regardless of the delinquency status or if a loan is past

due for 90 days or more, unless the loan is both well

collateralized and in the process of collection. At that time,

all accrued but uncollected interest is reversed against interest

income and interest subsequently collected is recognized on a

cash basis to the extent the loan balance is deemed

collectible. Otherwise, all cash received is used to reduce the

outstanding loan balance. A loan is considered past due when

a principal or interest payment has not been made according

to its contractual terms. Credit card loans are not placed on

nonaccrual status and accrue interest until the loan is paid in

full or is charged off.

In certain circumstances, the firm may modify the original

terms of a loan agreement by granting a concession to a

borrower experiencing financial difficulty, typically in the

form of a modification of loan covenants, but may also

include forbearance of interest or principal, payment

extensions or interest rate reductions. These modifications, to

the extent significant, are considered TDRs. Loan

modifications that extend payment terms for a period of less

than 90 days are generally considered insignificant and

therefore not reported as TDRs.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Goldman Sachs 2022 Form 10-K 165

The table below presents information about past due loans.

$ in millions 30-89 days

90 days

or more Total

As of December 2022

Corporate $ – $ 92 $ 92

Commercial real estate 47 362 409

Residential real estate 4 6 10

Securities-based 1 – 1

Other collateralized 10 5 15

Consumer:

Installment 46 17 63

Credit cards 291 265 556

Other 17 5 22

Total $ 416 $ 752 $ 1,168

Total divided by gross loans at amortized cost 0.7%

As of December 2021

Corporate $ 5 $ 90 $ 95

Commercial real estate 7 158 165

Residential real estate 3 4 7

Securities-based – 5 5

Consumer:

Installment 20 7 27

Credit cards 86 71 157

Other 15 3 18

Total $ 136 $ 338 $ 474

Total divided by gross loans at amortized cost 0.3%

The table below presents information about nonaccrual

loans.

As of December

$ in millions 2022 2021

Corporate $ 1,432 $ 1,421

Commercial real estate 1,079 856

Residential real estate 93 5

Securities-based – 5

Other collateralized 65 139

Installment 41 43

Total $ 2,710 $ 2,469

Total divided by gross loans at amortized cost 1.6% 1.7%

In the table above:

• Nonaccrual loans included $483 million as of December

2022 and $254 million as of December 2021 of loans that

were 30 days or more past due.

• Loans that were 90 days or more past due and still accruing

were not material as of both December 2022 and December

2021.

• Nonaccrual loans included $204 million of corporate loans

as of December 2022 and $267 million of corporate and

commercial real estate loans as of December 2021 that were

modified in a TDR. The firm’s lending commitments

related to these loans were not material as of both

December 2022 and December 2021. Installment loans that

were modified in a TDR were not material as of both

December 2022 and December 2021.

• Allowance for loan losses as a percentage of total

nonaccrual loans was 204.5% as of December 2022 and

144.7% as of December 2021.

Allowance for Credit Losses

The firm’s allowance for credit losses consists of the

allowance for losses on loans and lending commitments

accounted for at amortized cost. Loans and lending

commitments accounted for at fair value or accounted for at

the lower of cost or fair value are not subject to an allowance

for credit losses.

To determine the allowance for credit losses, the firm

classifies its loans and lending commitments accounted for at

amortized cost into wholesale and consumer portfolios.

These portfolios represent the level at which the firm has

developed and documented its methodology to determine the

allowance for credit losses. The allowance for credit losses is

measured on a collective basis for loans that exhibit similar

risk characteristics using a modeled approach and on an

asset-specific basis for loans that do not share similar risk

characteristics.

The allowance for credit losses takes into account the

weighted average of a range of forecasts of future economic

conditions over the expected life of the loan and lending

commitments. The expected life of each loan or lending

commitment is determined based on the contractual term

adjusted for extension options or demand features, or is

modeled in the case of revolving credit card loans. The

forecasts include baseline, favorable and adverse economic

scenarios over a three-year period. For loans with expected

lives beyond three years, the model reverts to historical loss

information based on a non-linear modeled approach. The

forecasted economic scenarios consider a number of risk

factors relevant to the wholesale and consumer portfolios

described below. The firm applies judgment in weighing

individual scenarios each quarter based on a variety of

factors, including the firm’s internally derived economic

outlook, market consensus, recent macroeconomic

conditions and industry trends.

The allowance for credit losses also includes qualitative

components which allow management to reflect the uncertain

nature of economic forecasting, capture uncertainty

regarding model inputs, and account for model imprecision

and concentration risk.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

166

Goldman Sachs 2022 Form 10-K

Management’s estimate of credit losses entails judgment

about the expected life of the loan and loan collectability at

the reporting dates, and there are uncertainties inherent in

those judgments. The allowance for credit losses is subject to

a governance process that involves review and approval by

senior management within the firm’s independent risk

oversight and control functions. Personnel within the firm’s

independent risk oversight and control functions are

responsible for forecasting the economic variables that

underlie the economic scenarios that are used in the modeling

of expected credit losses. While management uses the best

information available to determine this estimate, future

adjustments to the allowance may be necessary based on,

among other things, changes in the economic environment or

variances between actual results and the original assumptions

used.

The table below presents gross loans and lending

commitments accounted for at amortized cost by portfolio.

As of December

2022 2021

$ in millions

Loans

Lending

Commitments

Loans

Lending

Commitments

Wholesale

Corporate

$ 36,822 $ 137,149 $ 34,663 $ 135,968

Commercial real estate

26,222 3,692 24,267 5,229

Residential real estate

18,523 3,089 18,389 3,949

Securities-based

16,671 508 16,652 454

Other collateralized

50,473 13,209 35,916 15,137

Other

1,723 944 1,736 442

Consumer

Installment

6,326 1,882 3,672 9

Credit cards

15,820 62,216 8,212 35,932

Total

$ 172,580 $ 222,689

$ 143,507

$ 197,120

In the table above:

• Wholesale loans included $2.67 billion as of December

2022 and $2.43 billion as of December 2021 of nonaccrual

loans for which the allowance for credit losses was

measured on an asset-specific basis. The allowance for

credit losses on these loans was $535 million as of

December 2022 and $543 million as of December 2021.

These loans included $384 million as of December 2022 and

$140 million as of December 2021 of loans which did not

require a reserve as the loan was deemed to be recoverable.

• Credit card lending commitments included $62.22 billion as

of December 2022 and $33.97 billion as of December 2021

related to credit card lines issued by the firm to consumers.

These credit card lines are cancellable by the firm. The

increase in credit card lending commitments from

December 2021 to December 2022 reflected approximately

$15.0 billion relating to the firm’s acquisition of the

General Motors co-branded credit card portfolio. In

addition, credit card lending commitments as of December

2021 included a commitment of approximately $2.0 billion

to acquire the outstanding credit card loans related to the

General Motors co-branded credit card portfolio. See Note

18 for further information about lending commitments.

• The increase in installment lending commitments from

December 2021 to December 2022 primarily relates to

commitments extended in connection with point-of-sale

financing through GreenSky. See Note 18 for further

information about lending commitments.

The following is a description of the methodology used to

calculate the allowance for credit losses:

Wholesale. The allowance for credit losses for wholesale

loans and lending commitments that exhibit similar risk

characteristics is measured using a modeled approach. These

models determine the probability of default and loss given

default based on various risk factors, including internal credit

ratings, industry default and loss data, expected life,

macroeconomic indicators, the borrower’s capacity to meet

its financial obligations, the borrower’s country of risk and

industry, loan seniority and collateral type. For lending

commitments, the methodology also considers the

probability of drawdowns or funding. In addition, for loans

backed by real estate, risk factors include the loan-to-value

ratio, debt service ratio and home price index. The most

significant inputs to the forecast model for wholesale loans

and lending commitments include unemployment rates, GDP,

credit spreads, commercial and industrial delinquency rates,

short- and long-term interest rates, and oil prices.

The allowance for loan losses for wholesale loans that do not

share similar risk characteristics, such as nonaccrual loans or

loans in a TDR, is calculated using the present value of

expected future cash flows discounted at the loan’s original

effective rate, the observable market price of the loan or the

fair value of the collateral.

Wholesale loans are charged off against the allowance for

loan losses when deemed to be uncollectible.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Goldman Sachs 2022 Form 10-K 167

Consumer. The allowance for credit losses for consumer

loans that exhibit similar risk characteristics is calculated

using a modeled approach which classifies consumer loans

into pools based on borrower-related and exposure-related

characteristics that differentiate a pool’s risk characteristics

from other pools. The factors considered in determining a

pool are generally consistent with the risk characteristics used

for internal credit risk measurement and management and

include key metrics, such as FICO credit scores, delinquency

status, loan vintage and macroeconomic indicators. The most

significant inputs to the forecast model for consumer loans

include unemployment rates and delinquency rates. The

expected life of revolving credit card loans is determined by

modeling expected future draws and the timing and amount

of repayments allocated to the funded balance. The firm also

recognizes an allowance for credit losses on commitments to

acquire loans and commitments extended in connection with

point-of-sale financing. However, no allowance for credit

losses is recognized on credit card lending commitments as

they are cancellable by the firm.

The allowance for credit losses for consumer loans that do

not share similar risk characteristics, such as loans in a TDR,

is calculated using the present value of expected future cash

flows discounted at the loan’s original effective rate.

Installment loans are charged off when they are 120 days past

due. Credit card loans are charged off when they are 180 days

past due.

Allowance for Credit Losses Rollforward

The table below presents information about the allowance

for credit losses.

$ in millions Wholesale Consumer Total

Year Ended December 2022

Allowance for loan losses

Beginning balance $ 2,135 $ 1,438 $ 3,573

Net (charge-offs)/recoveries (253) (473) (726)

Provision 699 2,016 2,715

Other (19) – (19)

Ending balance $ 2,562 $ 2,981 $ 5,543

Allowance ratio 1.7% 13.5% 3.2%

Net charge-off ratio 0.2% 2.8% 0.5%

Allowance for losses on lending commitments

Beginning balance $ 589 $ 187 $ 776

Provision 124 (124) –

Other (2) – (2)

Ending balance $ 711 $ 63 $ 774

Year Ended December 2021

Allowance for loan losses

Beginning balance $ 2,584 $ 1,290 $ 3,874

Net (charge-offs)/recoveries (130) (203) (333)

Provision (231) 351 120

Other (88) – (88)

Ending balance $ 2,135 $ 1,438 $ 3,573

Allowance ratio 1.6% 12.1% 2.5%

Net charge-off ratio 0.1% 2.3% 0.3%

Allowance for losses on lending commitments

Beginning balance $ 557 $ – $ 557

Provision 50 187 237

Other (18) – (18)

Ending balance $ 589 $ 187 $ 776

In the table above:

• For the year ended December 2021, other primarily

represented the reduction to the allowance related to loans

and lending commitments transferred to held for sale.

• The allowance ratio is calculated by dividing the allowance

for loan losses by gross loans accounted for at amortized

cost.

• The net charge-off ratio is calculated by dividing net

(charge-offs)/recoveries by average gross loans accounted

for at amortized cost.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

168

Goldman Sachs 2022 Form 10-K

Forecast Model Inputs as of December 2022

When modeling expected credit losses, the firm employs a

weighted, multi-scenario forecast, which includes baseline,

adverse and favorable economic scenarios. As of December

2022, this multi-scenario forecast was weighted towards the

baseline and adverse economic scenarios.

The table below presents the forecasted U.S. unemployment

and U.S. GDP growth rates used in the baseline economic

scenario of the forecast model.

As of December 2022

U.S. unemployment rate

Forecast for the quarter ended:

June 2023 4.2%

December 2023 4.6%

June 2024 4.6%

Growth in U.S. GDP

Forecast for the year:

2023 0.4%

2024 1.3%

2025 1.7%

The adverse economic scenario of the forecast model reflects

a global recession in 2023 and a more aggressive tightening of

monetary policy by central banks, resulting in an economic

contraction and rising unemployment rates. In this scenario,

the U.S. unemployment rate peaks at approximately 7.4%

during the first quarter of 2024 and the maximum decline in

the quarterly U.S. GDP relative to the fourth quarter of 2022

is approximately 2.7%, which occurs during the fourth

quarter of 2023.

In the table above:

• U.S. unemployment rate represents the rate forecasted as of

the respective quarter-end.

• Growth in U.S. GDP represents the year-over-year growth

rate forecasted for the respective years.

• While the U.S. unemployment and U.S. GDP growth rates

are significant inputs to the forecast model, the model

contemplates a variety of other inputs across a range of

scenarios to provide a forecast of future economic

conditions. Given the complex nature of the forecasting

process, no single economic variable can be viewed in

isolation and independently of other inputs.

Allowance for Credit Losses Commentary

Year Ended December 2022. The allowance for credit

losses increased by $1.97 billion during 2022, reflecting

growth in the firm's consumer lending portfolios (principally

in credit cards) and higher modeled expected losses due to

broad macroeconomic and geopolitical concerns. In addition,

the allowance for credit losses for wholesale loans was

impacted by asset-specific provisions and ratings downgrades

primarily related to borrowers in the technology, media &

telecommunications, real estate, and consumer & retail

industries.

Net (charge-offs)/recoveries for 2022 for wholesale loans

were primarily related to corporate loans and net (charge-

offs)/recoveries for consumer loans were primarily related to

credit cards.

Year Ended December 2021. The allowance for credit

losses decreased by $82million during 2021, reflecting reserve

reduction driven by improved broader economic

environment, partially offset by growth in the firm’s lending

portfolios, primarily in the consumer portfolio related to

credit cards, including a provision for credit losses of

approximately $185 million related to the acquisition of the

General Motors co-branded credit card portfolio.

Net (charge-offs)/recoveries for 2021 for wholesale loans

were primarily related to corporate loans and net (charge-

offs)/recoveries for consumer loans were primarily related to

credit cards.

Measurement of Credit Losses on Financial

Instruments (ASC 326)

The firm adopted ASU No. 2016-13, "Financial Instruments -

Credit Losses (Topic 326) - Measurement of Credit Losses on

Financial Instruments" as of January 1, 2020. As a result of

adopting this ASU, the firm's allowance for credit losses on

financial assets and commitments that are accounted for at

amortized cost reflects management's estimate of credit losses

over the remaining life of such assets. The cumulative effect

of adopting this ASU as of January 1, 2020, was a decrease to

retained earnings of $638million (net of tax).

Estimated Fair Value

The table below presents the estimated fair value of loans

that are not accounted for at fair value and in what level of

the fair value hierarchy they would have been classified if

they had been included in the firm’s fair value hierarchy.

Carrying

Value

Estimated Fair Value

$ in millions

Level 2 Level 3 Total

As of December 2022

Amortized cost $ 167,037 $ 85,921 $ 83,121 $ 169,042

Held for sale $ 4,594 $ 2,592 $ 2,014 $ 4,606

As of December 2021

Amortized cost $ 139,934 $ 87,676 $ 54,127 $ 141,803

Held for sale $ 7,859 $ 5,970 $ 1,917 $ 7,887

See Note 4 for an overview of the firm’s fair value

measurement policies, valuation techniques and significant

inputs used to determine the fair value of loans, and Note 5

for information about loans within the fair value hierarchy.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Goldman Sachs 2022 Form 10-K 169

Note 10.

Fair Value Option

Other Financial Assets and Liabilities at Fair Value

In addition to trading assets and liabilities, and certain

investments and loans, the firm accounts for certain of its

other financial assets and liabilities at fair value, substantially

all under the fair value option. The primary reasons for

electing the fair value option are to:

• Reflect economic events in earnings on a timely basis;

• Mitigate volatility in earnings from using different

measurement attributes (e.g., transfers of financial assets

accounted for as financings are recorded at fair value,

whereas the related secured financing would be recorded

on an accrual basis absent electing the fair value option);

and

• Address simplification and cost-benefit considerations

(e.g., accounting for hybrid financial instruments at fair

value in their entirety versus bifurcation of embedded

derivatives and hedge accounting for debt hosts).

Hybrid financial instruments are instruments that contain

bifurcatable embedded derivatives and do not require

settlement by physical delivery of nonfinancial assets (e.g.,

physical commodities). If the firm elects to bifurcate the

embedded derivative from the associated debt, the derivative

is accounted for at fair value and the host contract is

accounted for at amortized cost, adjusted for the effective

portion of any fair value hedges. If the firm does not elect to

bifurcate, the entire hybrid financial instrument is accounted

for at fair value under the fair value option.

Other financial assets and liabilities accounted for at fair

value under the fair value option include:

• Resale and repurchase agreements;

• Certain securities borrowed and loaned transactions;

• Certain customer and other receivables and certain other

assets and liabilities;

• Certain time deposits (deposits with no stated maturity are

not eligible for a fair value option election), including

structured certificates of deposit, which are hybrid

financial instruments;

• Substantially all other secured financings, including

transfers of assets accounted for as financings; and

• Certain unsecured short- and long-term borrowings,

substantially all of which are hybrid financial instruments.

See Note 4 for an overview of the firm’s fair value

measurement policies, valuation techniques and significant

inputs used to determine the fair value of other financial

assets and liabilities, and Note 5 for information about other

financial assets and liabilities within the fair value hierarchy.

Gains and Losses on Other Financial Assets and

Liabilities Accounted for at Fair Value Under the Fair

Value Option

The table below presents the gains and losses recognized in

earnings as a result of the election to apply the fair value

option to certain financial assets and liabilities.

Year Ended December

$ in millions 2022 2021 2020

Unsecured short-term borrowings $ 4,055 $ (1,016) $ 206

Unsecured long-term borrowings 6,506 (2,393) (2,804)

Other 1,072 (135) (563)

Total $ 11,633 $ (3,544) $ (3,161)

In the table above:

• Gains/(losses) were substantially all included in market

making.

• Gains/(losses) exclude contractual interest, which is

included in interest income and interest expense, for all

instruments other than hybrid financial instruments. See

Note 23 for further information about interest income and

interest expense.

• Gains/(losses) included in unsecured short- and long-term

borrowings were substantially all related to the embedded

derivative component of hybrid financial instruments.

These gains and losses would have been recognized under

other U.S. GAAP even if the firm had not elected to

account for the entire hybrid financial instrument at fair

value.

• Gains/(losses) included in other were substantially all

related to resale and repurchase agreements, deposits, other

secured financings and other liabilities.

• Other financial assets and liabilities at fair value are

frequently economically hedged with trading assets and

liabilities. Accordingly, gains or losses on such other

financial assets and liabilities can be partially offset by

gains or losses on trading assets and liabilities. As a result,

gains or losses on other financial assets and liabilities do

not necessarily represent the overall impact on the firm’s

results of operations, liquidity or capital resources.

See Note 8 for information about gains/(losses) on equity

securities and Note 9 for information about gains/(losses) on

loans which are accounted for at fair value under the fair

value option. Gains/(losses) on trading assets and liabilities

accounted for at fair value under the fair value option are

included in market making. See Note 6 for further

information about gains/(losses) from market making.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

170

Goldman Sachs 2022 Form 10-K

Long-Term Debt Instruments

The difference between the aggregate contractual principal

amount and the related fair value of long-term other secured

financings, for which the fair value option was elected, was

not material as of both December 2022 and December 2021.

The aggregate contractual principal amount of unsecured

long-term borrowings, for which the fair value option was

elected, exceeded the related fair value by $5.03 billion as of

December 2022. The related amount was not material as of

December 2021.

These debt instruments include both principal-protected and

non-principal-protected long-term borrowings.

Debt Valuation Adjustment

The firm calculates the fair value of financial liabilities for

which the fair value option is elected by discounting future

cash flows at a rate which incorporates the firm’s credit

spreads.

The table below presents information about the net debt

valuation adjustment (DVA) gains/(losses) on financial

liabilities for which the fair value option was elected.

Year Ended December

$ in millions 2022 2021 2020

Pre-tax DVA $ 1,882 $ 433 $ (347)

After-tax DVA $ 1,403 $ 322 $ (261)

In the table above:

• After-tax DVA is included in debt valuation adjustment in

the consolidated statements of comprehensive income.

• The gains/(losses) reclassified to market making in the

consolidated statements of earnings from accumulated

other comprehensive income/(loss) upon extinguishment of

such financial liabilities were not material for 2022, 2021

and 2020.

Loans and Lending Commitments

The table below presents the difference between the

aggregate fair value and the aggregate contractual principal

amount for loans (included in trading assets and loans in the

consolidated balance sheets) for which the fair value option

was elected.

As of December

$ in millions 2022 2021

Performing loans

Aggregate contractual principal in excess of fair value

$ 2,645 $ 1,373

Loans on nonaccrual status and/or more than 90 days past due

Aggregate contractual principal in excess of fair value

$ 3,331 $ 8,600

Aggregate fair value $ 2,633 $ 3,559

In the table above, the aggregate contractual principal

amount of loans on nonaccrual status and/or more than 90

days past due (which excludes loans carried at zero fair value

and considered uncollectible) exceeds the related fair value

primarily because the firm regularly purchases loans, such as

distressed loans, at values significantly below the contractual

principal amounts.

The fair value of unfunded lending commitments for which

the fair value option was elected was a liability of $22 million

as of December 2022 and $20 million as of December 2021,

and the related total contractual amount of these lending

commitments was $307 million as of December 2022 and

$611 million as of December 2021. See Note 18 for further

information about lending commitments.

Impact of Credit Spreads on Loans and Lending

Commitments

The estimated net gain/(loss) attributable to changes in

instrument-specific credit spreads on loans and lending

commitments for which the fair value option was elected was

$(281) million for 2022, $277 million for 2021 and $(106)

million for 2020. The firm generally calculates the fair value

of loans and lending commitments for which the fair value

option is elected by discounting future cash flows at a rate

which incorporates the instrument-specific credit spreads.

For floating-rate loans and lending commitments,

substantially all changes in fair value are attributable to

changes in instrument-specific credit spreads, whereas for

fixed-rate loans and lending commitments, changes in fair

value are also attributable to changes in interest rates.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Goldman Sachs 2022 Form 10-K 171

Note 11.

Collateralized Agreements and Financings

Collateralized agreements are resale agreements and

securities borrowed. Collateralized financings are repurchase

agreements, securities loaned and other secured financings.

The firm enters into these transactions in order to, among

other things, facilitate client activities, invest excess cash,

acquire securities to cover short positions and finance certain

firm activities.

Collateralized agreements and financings with the same

settlement date are presented on a net-by-counterparty basis

when such transactions meet certain settlement criteria and

are subject to netting agreements. Interest on collateralized

agreements, which is included in interest income, and

collateralized financings, which is included in interest

expense, is recognized over the life of the transaction. See

Note 23 for further information about interest income and

interest expense.

Resale and Repurchase Agreements

A resale agreement is a transaction in which the firm

purchases financial instruments from a seller, typically in

exchange for cash, and simultaneously enters into an

agreement to resell the same or substantially the same

financial instruments to the seller at a stated price plus

accrued interest at a future date.

A repurchase agreement is a transaction in which the firm

sells financial instruments to a buyer, typically in exchange

for cash, and simultaneously enters into an agreement to

repurchase the same or substantially the same financial

instruments from the buyer at a stated price plus accrued

interest at a future date.

Even though repurchase and resale agreements (including

“repos- and reverses-to-maturity”) involve the legal transfer

of ownership of financial instruments, they are accounted for

as financing arrangements because they require the financial

instruments to be repurchased or resold before or at the

maturity of the agreement. The financial instruments

purchased or sold in resale and repurchase agreements

typically include U.S. government and agency, and

investment-grade sovereign obligations.

The firm receives financial instruments purchased under

resale agreements and makes delivery of financial instruments

sold under repurchase agreements. To mitigate credit

exposure, the firm monitors the market value of these

financial instruments on a daily basis, and delivers or obtains

additional collateral due to changes in the market value of the

financial instruments, as appropriate. For resale agreements,

the firm typically requires collateral with a fair value

approximately equal to the carrying value of the relevant

assets in the consolidated balance sheets.

Securities Borrowed and Loaned Transactions

In a securities borrowed transaction, the firm borrows

securities from a counterparty in exchange for cash or

securities. When the firm returns the securities, the

counterparty returns the cash or securities. Interest is

generally paid periodically over the life of the transaction.

In a securities loaned transaction, the firm lends securities to

a counterparty in exchange for cash or securities. When the

counterparty returns the securities, the firm returns the cash

or securities posted as collateral. Interest is generally paid

periodically over the life of the transaction.

The firm receives securities borrowed and makes delivery of

securities loaned. To mitigate credit exposure, the firm

monitors the market value of these securities on a daily basis,

and delivers or obtains additional collateral due to changes in

the market value of the securities, as appropriate. For

securities borrowed transactions, the firm typically requires

collateral with a fair value approximately equal to the

carrying value of the securities borrowed transaction.

Securities borrowed and loaned within FICC financing are

recorded at fair value under the fair value option. See Note 5

for further information about securities borrowed and loaned

accounted for at fair value.

Substantially all of the securities borrowed and loaned within

Equities financing are recorded based on the amount of cash

collateral advanced or received plus accrued interest. The

firm also reviews such securities borrowed to determine if an

allowance for credit losses should be recorded by taking into

consideration the fair value of collateral received. As these

agreements generally can be terminated on demand, they

exhibit little, if any, sensitivity to changes in interest rates.

Therefore, the carrying value of such agreements

approximates fair value. As these agreements are not

accounted for at fair value, they are not included in the firm’s

fair value hierarchy in Notes 4 and 5. Had these agreements

been included in the firm’s fair value hierarchy, they would

have been classified in level 2 as of both December 2022 and

December 2021.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

172

Goldman Sachs 2022 Form 10-K

Offsetting Arrangements

The table below presents resale and repurchase agreements

and securities borrowed and loaned transactions included in

the consolidated balance sheets, as well as the amounts not

offset in the consolidated balance sheets.

Assets Liabilities

$ in millions

Resale

agreements

Securities

borrowed

Repurchase

agreements

Securities

loaned

As of December 2022

Included in the consolidated balance sheets

Gross carrying value $ 334,042 $ 199,623 $ 219,274 $ 41,309

Counterparty netting (108,925) (10,582) (108,925) (10,582)

Total 225,117 189,041 110,349 30,727

Amounts not offset

Counterparty netting (15,350) (4,576) (15,350) (4,576)

Collateral (204,843) (171,997) (92,997) (25,578)

Total $ 4,924 $ 12,468 $ 2,002 $ 573

As of December 2021

Included in the consolidated balance sheets

Gross carrying value $ 334,725 $ 190,197 $ 294,905 $ 57,931

Counterparty netting (129,022) (11,426) (129,022) (11,426)

Total 205,703 178,771 165,883 46,505

Amounts not offset

Counterparty netting (27,376) (12,822) (27,376) (12,822)

Collateral (173,915) (157,752) (134,465) (33,143)

Total $ 4,412 $ 8,197 $ 4,042 $ 540

In the table above:

• Substantially all of the gross carrying values of these

arrangements are subject to enforceable netting

agreements.

• Where the firm has received or posted collateral under

credit support agreements, but has not yet determined such

agreements are enforceable, the related collateral has not

been netted.

• Amounts not offset includes counterparty netting that does

not meet the criteria for netting under U.S. GAAP and the

fair value of collateral received or posted subject to

enforceable credit support agreements.

• Resale agreements and repurchase agreements are carried

at fair value under the fair value option. See Note 4 for

further information about the valuation techniques and

significant inputs used to determine fair value.

• Securities borrowed included in the consolidated balance

sheets of $38.58 billion as of December 2022 and

$39.96 billion as of December 2021, and securities loaned

of $4.37billion as of December 2022 and $9.17billion as of

December 2021 were at fair value under the fair value

option. See Note 5 for further information about securities

borrowed and securities loaned accounted for at fair value.

Gross Carrying Value of Repurchase Agreements and

Securities Loaned

The table below presents the gross carrying value of

repurchase agreements and securities loaned by class of

collateral pledged.

$ in millions

Repurchase

agreements

Securities

loaned

As of December 2022

Money market instruments $ 10 $ –

U.S. government and agency obligations 112,825 55

Non-U.S. government and agency obligations 87,828 594

Securities backed by commercial real estate 172 –

Securities backed by residential real estate 466 –

Corporate debt securities 11,398 295

State and municipal obligations 143 –

Other debt obligations 108 –

Equity securities 6,324 40,365

Total $ 219,274 $ 41,309

As of December 2021

Money market instruments $ 328 $ 14

U.S. government and agency obligations 132,049 503

Non-U.S. government and agency obligations 126,397 1,254

Securities backed by commercial real estate 362 –

Securities backed by residential real estate 919 –

Corporate debt securities 11,034 510

State and municipal obligations 248 –

Other debt obligations 374 –

Equity securities 23,194 55,650

Total $ 294,905 $ 57,931

The table below presents the gross carrying value of

repurchase agreements and securities loaned by maturity.

As of December 2022

$ in millions

Repurchase

agreements

Securities

loaned

No stated maturity and overnight

$ 86,835 $ 27,791

2 - 30 days

70,351 956

31 - 90 days

17,776 936

91 days - 1 year

35,096 7,596

Greater than 1 year

9,216 4,030

Total

$ 219,274 $ 41,309

In the table above:

• Repurchase agreements and securities loaned that are

repayable prior to maturity at the option of the firm are

reflected at their contractual maturity dates.

• Repurchase agreements and securities loaned that are

redeemable prior to maturity at the option of the holder are

reflected at the earliest dates such options become

exercisable.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Goldman Sachs 2022 Form 10-K 173

Other Secured Financings

In addition to repurchase agreements and securities loaned

transactions, the firm funds certain assets through the use of

other secured financings and pledges financial instruments

and other assets as collateral in these transactions. These

other secured financings include:

• Liabilities of consolidated VIEs;

• Transfers of assets accounted for as financings rather than

sales (e.g., pledged commodities, bank loans and mortgage

whole loans); and

• Other structured financing arrangements.

Other secured financings included nonrecourse

arrangements. Nonrecourse other secured financings were

$7.94 billion as of December 2022 and $8.64 billion as of

December 2021.

The firm has elected to apply the fair value option to

substantially all other secured financings because the use of

fair value eliminates non-economic volatility in earnings that

would arise from using different measurement attributes. See

Note 10 for further information about other secured

financings that are accounted for at fair value.

Other secured financings that are not recorded at fair value

are recorded based on the amount of cash received plus

accrued interest, which generally approximates fair value. As

these financings are not accounted for at fair value, they are

not included in the firm’s fair value hierarchy in Notes 4 and

5. Had these financings been included in the firm’s fair value

hierarchy, substantially all would have been classified in level

3 as of both December 2022 and December 2021.

The table below presents information about other secured

financings.

$ in millions

U.S.

Dollar

Non-U.S.

Dollar

Total

As of December 2022

Other secured financings (short-term):

At fair value $ 3,478 $ 2,963 $ 6,441

At amortized cost 398 – 398

Other secured financings (long-term):

At fair value 3,793 2,522 6,315

At amortized cost 395 397 792

Total other secured financings $ 8,064 $ 5,882 $ 13,946

Other secured financings collateralized by:

Financial instruments $ 3,817 $ 4,895 $ 8,712

Other assets $ 4,247 $ 987 $ 5,234

As of December 2021

Other secured financings (short-term):

At fair value $ 5,315 $ 3,664 $ 8,979

At amortized cost – 191 191

Other secured financings (long-term):

At fair value 4,170 3,925 8,095

At amortized cost 827 452 1,279

Total other secured financings $ 10,312 $ 8,232 $ 18,544

Other secured financings collateralized by:

Financial instruments $ 5,990 $ 6,834 $ 12,824

Other assets $ 4,322 $ 1,398 $ 5,720

In the table above:

• Short-term other secured financings includes financings

maturing within one year of the financial statement date

and financings that are redeemable within one year of the

financial statement date at the option of the holder.

• U.S. dollar-denominated short-term other secured

financings at amortized cost had a weighted average

interest rate of 5.56% as of December 2022. These rates

include the effect of hedging activities.

• Non-U.S. dollar-denominated short-term other secured

financings at amortized cost had a weighted average

interest rate of 0.22% as of December 2021. This rate

includes the effect of hedging activities.

• U.S. dollar-denominated long-term other secured

financings at amortized cost had a weighted average

interest rate of 3.54% as of December 2022 and 1.06% as of

December 2021. These rates include the effect of hedging

activities.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

174

Goldman Sachs 2022 Form 10-K

• Non-U.S. dollar-denominated long-term other secured

financings at amortized cost had a weighted average

interest rate of 0.45% as of December 2022 and 0.46% as of

December 2021. These rates include the effect of hedging

activities.

• Total other secured financings included $1.69billion as of

December 2022 and $1.97 billion as of December 2021

related to transfers of financial assets accounted for as

financings rather than sales. Such financings were

collateralized by financial assets, primarily included in

trading assets, of $1.64 billion as of December 2022 and

$2.02billion as of December 2021.

• Other secured financings collateralized by financial

instruments included $7.49billion as of December 2022 and

$10.37 billion as of December 2021 of other secured

financings collateralized by trading assets, investments and

loans, and included $1.22billion as of December 2022 and

$2.45 billion as of December 2021 of other secured

financings collateralized by financial instruments received

as collateral and repledged.

The table below presents other secured financings by

maturity.

As of

$ in millions December 2022

Other secured financings (short-term) $ 6,839

Other secured financings (long-term):

2024 2,956

2025 1,053

2026 978

2027 152

2028 - thereafter 1,968

Total other secured financings (long-term) 7,107

Total other secured financings $ 13,946

In the table above:

• Long-term other secured financings that are repayable

prior to maturity at the option of the firm are reflected at

their contractual maturity dates.

• Long-term other secured financings that are redeemable

prior to maturity at the option of the holder are reflected at

the earliest dates such options become exercisable.

Collateral Received and Pledged

The firm receives cash and securities (e.g., U.S. government

and agency obligations, other sovereign and corporate

obligations, as well as equity securities) as collateral,

primarily in connection with resale agreements, securities

borrowed, derivative transactions and customer margin

loans. The firm obtains cash and securities as collateral on an

upfront or contingent basis for derivative instruments and

collateralized agreements to reduce its credit exposure to

individual counterparties.

In many cases, the firm is permitted to deliver or repledge

financial instruments received as collateral when entering

into repurchase agreements and securities loaned

transactions, primarily in connection with secured client

financing activities. The firm is also permitted to deliver or

repledge these financial instruments in connection with other

secured financings, collateralized derivative transactions and

firm or customer settlement requirements.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Goldman Sachs 2022 Form 10-K 175

The firm also pledges certain trading assets in connection

with repurchase agreements, securities loaned transactions

and other secured financings, and other assets (substantially

all real estate and cash) in connection with other secured

financings to counterparties who may or may not have the

right to deliver or repledge them.

The table below presents financial instruments at fair value

received as collateral that were available to be delivered or

repledged and were delivered or repledged.

As of December

$ in millions 2022 2021

Collateral available to be delivered or repledged $ 971,699 $ 1,057,195

Collateral that was delivered or repledged $ 797,919 $ 875,213

The table below presents information about assets pledged.

As of December

$ in millions 2022 2021

Pledged to counterparties that had the right to deliver or repledge

Trading assets $ 40,143 $ 68,208

Investments $ 9,818 $ 12,840

Pledged to counterparties that did not have the right to deliver or repledge

Trading assets $ 70,912 $ 102,259

Investments $ 1,726 $ 8,683

Loans $ 6,600 $ 6,808

Other assets $ 7,525 $ 8,878

The firm also segregates securities for regulatory and other

purposes related to client activity. Such securities are

segregated from trading assets and investments, as well as

from securities received as collateral under resale agreements

and securities borrowed transactions. Securities segregated by

the firm were $49.60 billion as of December 2022 and

$41.49billion as of December 2021.

Note 12.

Other Assets

The table below presents other assets by type.

As of December

$ in millions 2022 2021

Property, leasehold improvements and equipment $ 17,074 $ 18,094

Goodwill 6,374 4,285

Identifiable intangible assets 2,009 418

Operating lease right-of-use assets 2,172 2,292

Income tax-related assets 7,012 3,860

Miscellaneous receivables and other 4,567 5,659

Total $ 39,208 $ 34,608

During 2022, the firm completed the acquisitions of (i)

GreenSky, a leading technology company facilitating point-

of-sale financing for merchants and consumers, in an all-

stock transaction, (ii) NN Investment Partners (NNIP), a

leading European asset manager, in an all-cash transaction,

and (iii) NextCapital Group, Inc. (NextCapital), a digital

retirement advice provider, in an all-cash transaction. These

acquisitions were accounted for under the acquisition method

of accounting for business combinations and had an

aggregate purchase price of $3.83 billion, substantially all of

which related to GreenSky and NNIP. The purchase price of

GreenSky has been preliminarily allocated to goodwill of

approximately $1.05 billion, identifiable intangible assets of

approximately $710 million and tangible assets of

approximately $960 million (primarily cash and other assets),

and to liabilities assumed of approximately $990 million

(primarily unsecured short-term borrowings and customer

and other payables). The purchase price of NNIP has been

preliminarily allocated to goodwill of approximately $880

million, identifiable intangible assets of approximately $900

million, tangible assets of approximately $540 million

(primarily cash and customer and other receivables), and to

liabilities assumed of approximately $500 million (primarily

deferred tax liabilities and customer and other payables). See

below for further information about goodwill and

identifiable intangible assets related to these acquisitions.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

176

Goldman Sachs 2022 Form 10-K

Property, Leasehold Improvements and Equipment

Property, leasehold improvements and equipment is net of

accumulated depreciation and amortization of $12.19billion

as of December 2022 and $10.81billion as of December 2021.

Property, leasehold improvements and equipment included

$7.17 billion as of December 2022 and $6.71 billion as of

December 2021 that the firm uses in connection with its

operations, and $89 million as of December 2022 and

$194 million as of December 2021 of foreclosed real estate

primarily related to distressed loans that were purchased by

the firm. The remainder is held by investment entities,

including VIEs, consolidated by the firm. Substantially all

property and equipment is depreciated on a straight-line basis

over the useful life of the asset. Leasehold improvements are

amortized on a straight-line basis over the shorter of the

useful life of the improvement or the term of the lease.

Capitalized costs of software developed or obtained for

internal use are amortized on a straight-line basis over three

years.

The firm tests property, leasehold improvements and

equipment for impairment when events or changes in

circumstances suggest that an asset’s or asset group’s carrying

value may not be fully recoverable. To the extent the carrying

value of an asset or asset group exceeds the projected

undiscounted cash flows expected to result from the use and

eventual disposal of the asset or asset group, the firm

determines the asset or asset group is impaired and records

an impairment equal to the difference between the estimated

fair value and the carrying value of the asset or asset group.

In addition, the firm will recognize an impairment prior to

the sale of an asset or asset group if the carrying value of the

asset or asset group exceeds its estimated fair value.

The firm had impairments of $314million during 2022, $143

million during 2021, and $171million during 2020, primarily

related to properties held by the firm’s investment entities

within Asset & Wealth Management.

Goodwill

Goodwill is the cost of acquired companies in excess of the

fair value of net assets, including identifiable intangible

assets, at the acquisition date.

During the fourth quarter of 2022, in connection with the

changes to the firm’s business segments, the firm reassigned

the goodwill to its new reporting units using a relative fair

value approach in accordance with ASC 350.

The table below presents the carrying value of goodwill by

reporting unit.

As of December

$ in millions 2022 2021

Global Banking & Markets:

Investment banking $ 267 $ 267

FICC 269 269

Equities 2,647 2,647

Asset & Wealth Management:

Asset management 1,385 349

Wealth management 1,310 718

Platform Solutions:

Consumer platforms 482 21

Transaction banking and other 14 14

Total $ 6,374 $ 4,285

In the table above:

• Goodwill of $14million previously in Investment Banking

was reassigned to the Transaction banking and other

reporting unit related to the transfer of the transaction

banking business. The amount of goodwill reassigned was

based on the relative fair values of the transferred business

and the remaining business within Investment Banking.

• Goodwill of $9million previously in Wealth management

was reassigned to the Equities reporting unit related to the

transfer of a securities-based loans business of the firm.

The amount of goodwill reassigned was based on the

relative fair values of the transferred business and the

remaining business within Wealth management.

• All goodwill previously in Consumer banking was

reassigned to Wealth management and Consumer

platforms based on the relative fair values of the businesses

transferred to each reporting unit.

• Goodwill previously in FICC, Equities and Asset

Management was not reassigned as no businesses were

transferred out of these reporting units.

• Substantially all of the increase in goodwill from December

2021 to December 2022 was driven by the acquisitions of

GreenSky and NNIP.

Goodwill is assessed for impairment annually in the fourth

quarter or more frequently if events occur or circumstances

change that indicate an impairment may exist. When

assessing goodwill for impairment, first, a qualitative

assessment can be made to determine whether it is more

likely than not that the estimated fair value of a reporting

unit is less than its carrying value. If the results of the

qualitative assessment are not conclusive, a quantitative

goodwill test is performed. Alternatively, a quantitative

goodwill test can be performed without performing a

qualitative assessment.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Goldman Sachs 2022 Form 10-K 177

The quantitative goodwill test compares the estimated fair

value of each reporting unit with its carrying value (including

goodwill and identifiable intangible assets). If the reporting

unit’s estimated fair value exceeds its carrying value,

goodwill is not impaired. An impairment is recognized if the

estimated fair value of a reporting unit is less than its

carrying value.

During the fourth quarter of 2022, goodwill was tested for

impairment using a quantitative test (both prior to and

following the firm’s changes to its business segments). For

each test, the estimated fair value of each of the reporting

units exceeded its respective carrying value, and therefore,

goodwill was not impaired.

The estimated fair value of each reporting unit was based on

valuation techniques the firm believes market participants

would use to value these reporting units. Estimated fair

values are generally derived from utilizing a relative value

technique, which applies observable price-to-earnings

multiples or price-to-book multiples of comparable

competitors to the reporting units’ net earnings or net book

value, or a discounted cash flow valuation approach, for

reporting units with businesses in early stages of

development. The carrying value of each reporting unit

reflects an allocation of total shareholders’ equity and

represents the estimated amount of total shareholders’ equity

required to support the activities of the reporting unit under

currently applicable regulatory capital requirements.

Identifiable Intangible Assets

The table below presents identifiable intangible assets by

type.

As of December

$ in millions

2022 2021

Customer lists and merchant relationships

Gross carrying value $ 3,225 $ 1,460

Accumulated amortization (1,275) (1,130)

Net carrying value 1,950 330

Acquired leases and other

Gross carrying value 486 500

Accumulated amortization (427) (412)

Net carrying value 59 88

Total gross carrying value 3,711 1,960

Total accumulated amortization (1,702) (1,542)

Total net carrying value $ 2,009 $ 418

The firm acquired approximately $1.79billion of identifiable

intangible assets (with a weighted average amortization

period of 13 years) during 2022, substantially all in

connection with the acquisitions of GreenSky and NNIP.

Substantially all of these identifiable intangible assets

consisted of customer lists and merchant relationships.

During 2021, the amount of identifiable intangible assets

acquired by the firm was not material.

Substantially all of the firm’s identifiable intangible assets

have finite useful lives and are amortized over their estimated

useful lives generally using the straight-line method.

The tables below present information about the amortization

of identifiable intangible assets.

Year Ended December

$ in millions 2022 2021 2020

Amortization $ 174 $ 120 $ 147

As of

$ in millions December 2022

Estimated future amortization

2023

$ 200

2024

$ 188

2025

$ 171

2026

$ 164

2027

$ 163

The firm tests identifiable intangible assets for impairment

when events or changes in circumstances suggest that an

asset’s or asset group’s carrying value may not be fully

recoverable. To the extent the carrying value of an asset or

asset group exceeds the projected undiscounted cash flows

expected to result from the use and eventual disposal of the

asset or asset group, the firm determines the asset or asset

group is impaired and records an impairment equal to the

difference between the estimated fair value and the carrying

value of the asset or asset group. In addition, the firm will

recognize an impairment prior to the sale of an asset or asset

group if the carrying value of the asset or asset group exceeds

its estimated fair value. There were no material impairments

during 2022, 2021 and 2020.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

178

Goldman Sachs 2022 Form 10-K

Operating Lease Right-of-Use Assets

The firm enters into operating leases for real estate, office

equipment and other assets, substantially all of which are

used in connection with its operations. For leases longer than

one year, the firm recognizes a right-of-use asset representing

the right to use the underlying asset for the lease term, and a

lease liability representing the liability to make payments.

The lease term is generally determined based on the

contractual maturity of the lease. For leases where the firm

has the option to terminate or extend the lease, an assessment

of the likelihood of exercising the option is incorporated into

the determination of the lease term. Such assessment is

initially performed at the inception of the lease and is

updated if events occur that impact the original assessment.

An operating lease right-of-use asset is initially determined

based on the operating lease liability, adjusted for initial

direct costs, lease incentives and amounts paid at or prior to

lease commencement. This amount is then amortized over

the lease term. Right-of-use assets and operating lease

liabilities recognized (in non-cash transactions for leases

entered into or assumed) by the firm were $256 million for

2022, $305 million for 2021 and $182 million for 2020. See

Note 15 for information about operating lease liabilities.

For leases where the firm will derive no economic benefit

from leased space that it has vacated or where the firm has

shortened the term of a lease when space is no longer needed,

the firm will record an impairment or accelerated

amortization of right-of-use assets. There were no material

impairments or accelerated amortizations during 2022 and

2021.

Miscellaneous Receivables and Other

Miscellaneous receivables and other included:

• Investments in qualified affordable housing projects of

$793 million as of December 2022 and $714 million as of

December 2021.

• Assets classified as held for sale of $285 million as of

December 2022 and $1.02 billion as of December 2021

related to certain of the firm’s consolidated investments

within Asset & Wealth Management, primarily consisted

of property and equipment.

Note 13.

Deposits

The table below presents the types and sources of deposits.

$ in millions

Savings and

Demand

Time Total

As of December 2022

Private bank and consumer $ 192,713 $ 33,046 $ 225,759

Brokered certificates of deposit – 32,624 32,624

Deposit sweep programs 44,819 – 44,819

Transaction banking 65,155 5,069 70,224

Other 808 12,431 13,239

Total $ 303,495 $ 83,170 $ 386,665

As of December 2021

Private bank and consumer $ 174,577 $ 30,198 $ 204,775

Brokered certificates of deposit – 30,816 30,816

Deposit sweep programs 37,965 – 37,965

Transaction banking 48,618 5,689 54,307

Other 275 36,089 36,364

Total $ 261,435 $ 102,792 $ 364,227

In the table above:

• Substantially all deposits are interest-bearing.

• Savings and demand accounts consist of money market

deposit accounts, negotiable order of withdrawal accounts

and demand deposit accounts that have no stated maturity

or expiration date.

• Time deposits included $15.75 billion as of December 2022

and $35.43 billion as of December 2021 of deposits

accounted for at fair value under the fair value option. See

Note 10 for further information about deposits accounted

for at fair value.

• Time deposits had a weighted average maturity of

approximately 0.9 years as of both December 2022 and

December 2021.

• Deposit sweep programs include long-term contractual

agreements with U.S. broker-dealers who sweep client cash

to FDIC-insured deposits.

• Transaction banking deposits consists of deposits that the

firm raised through its cash management services business

for corporate and other institutional clients.

• Other deposits represent deposits from institutional clients.

• Deposits insured by the FDIC were $184.88 billion as of

December 2022 and $156.66billion as of December 2021.

• Deposits insured by non-U.S. insurance programs were

$31.74 billion as of December 2022 and $31.44 billion as of

December 2021.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Goldman Sachs 2022 Form 10-K 179

The table below presents the location of deposits.

As of December

$ in millions 2022 2021

U.S. offices $ 313,598 $ 283,705

Non-U.S. offices 73,067 80,522

Total $ 386,665 $ 364,227

In the table above, U.S. deposits were held at Goldman Sachs

Bank USA (GS Bank USA) and substantially all non-U.S.

deposits were held at Goldman Sachs International Bank

(GSIB) and Goldman Sachs Bank Europe SE (GSBE).

The table below presents maturities of time deposits held in

U.S. and non-U.S. offices.

As of December 2022

$ in millions U.S. Non-U.S. Total

2023 $ 42,113 $ 19,364 $ 61,477

2024 11,457 310 11,767

2025 3,828 217 4,045

2026 2,522 257 2,779

2027 1,179 185 1,364

2028 - thereafter 1,382 356 1,738

Total $ 62,481 $ 20,689 $ 83,170

As of December 2022, deposits in U.S. offices included $14.81

billion and deposits in non-U.S. offices included $18.96

billion of time deposits in denominations that met or

exceeded the applicable insurance limits, or were otherwise

not covered by insurance.

The firm’s savings and demand deposits are recorded based

on the amount of cash received plus accrued interest, which

approximates fair value. In addition, the firm designates

certain derivatives as fair value hedges to convert a portion of

its time deposits not accounted for at fair value from fixed-

rate obligations into floating-rate obligations. The carrying

value of time deposits not accounted for at fair value

approximated fair value as of both December 2022 and

December 2021. As these savings and demand deposits and

time deposits are not accounted for at fair value, they are not

included in the firm’s fair value hierarchy in Notes 4 and 5.

Had these deposits been included in the firm’s fair value

hierarchy, they would have been classified in level 2 as of

both December 2022 and December 2021.

Note 14.

Unsecured Borrowings

The table below presents information about unsecured

borrowings.

As of December

$ in millions 2022 2021

Unsecured short-term borrowings $ 60,961 $ 46,955

Unsecured long-term borrowings 247,138 254,092

Total $ 308,099 $ 301,047

Unsecured Short-Term Borrowings

Unsecured short-term borrowings includes the portion of

unsecured long-term borrowings maturing within one year of

the financial statement date and unsecured long-term

borrowings that are redeemable within one year of the

financial statement date at the option of the holder.

The firm accounts for certain hybrid financial instruments at

fair value under the fair value option. See Note 10 for further

information about unsecured short-term borrowings that are

accounted for at fair value. In addition, the firm designates

certain derivatives as fair value hedges to convert a portion of

its unsecured short-term borrowings not accounted for at fair

value from fixed-rate obligations into floating-rate

obligations. The carrying value of unsecured short-term

borrowings that are not recorded at fair value generally

approximates fair value due to the short-term nature of the

obligations. As these unsecured short-term borrowings are

not accounted for at fair value, they are not included in the

firm’s fair value hierarchy in Notes 4 and 5. Had these

borrowings been included in the firm’s fair value hierarchy,

substantially all would have been classified in level 2 as of

both December 2022 and December 2021.

The table below presents information about unsecured short-

term borrowings.

As of December

$ in millions 2022 2021

Current portion of unsecured long-term borrowings $ 38,635 $ 18,118

Hybrid financial instruments 18,383 20,073

Commercial paper 1,718 6,730

Other unsecured short-term borrowings 2,225 2,034

Total unsecured short-term borrowings $ 60,961 $ 46,955

Weighted average interest rate 3.71% 2.34%

In the table above:

• The current portion of unsecured long-term borrowings

included $21.75 billion as of December 2022 and

$9.16billion as of December 2021 issued by Group Inc.

• The weighted average interest rates for these borrowings

include the effect of hedging activities and exclude

unsecured short-term borrowings accounted for at fair

value under the fair value option. See Note 7 for further

information about hedging activities.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

180

Goldman Sachs 2022 Form 10-K

Unsecured Long-Term Borrowings

The table below presents information about unsecured long-

term borrowings.

$ in millions U.S. Dollar

Non-U.S.

Dollar Total

As of December 2022

Fixed-rate obligations:

Group Inc. $ 117,092 $ 35,541 $ 152,633

Subsidiaries 1,894 2,997 4,891

Floating-rate obligations:

Group Inc. 19,308 14,032 33,340

Subsidiaries 36,381 19,893 56,274

Total $ 174,675 $ 72,463 $ 247,138

As of December 2021

Fixed-rate obligations:

Group Inc. $ 124,731 $ 43,219 $ 167,950

Subsidiaries 1,803 3,189 4,992

Floating-rate obligations:

Group Inc. 23,452 17,394 40,846

Subsidiaries 27,543 12,761 40,304

Total $ 177,529 $ 76,563 $ 254,092

In the table above:

• Unsecured long-term borrowings consists principally of

senior borrowings, which have maturities extending

through 2065.

• Floating-rate obligations includes equity-linked, credit-

linked and indexed instruments. Floating interest rates are

generally based on Euro Interbank Offered Rate, SOFR or

USD LIBOR.

• U.S. dollar-denominated debt had interest rates ranging

from 0.66% to 6.75% (with a weighted average rate of

3.51%) as of December 2022 and 0.48% to 7.68% (with a

weighted average rate of 3.34%) as of December 2021.

These rates exclude unsecured long-term borrowings

accounted for at fair value under the fair value option.

• Non-U.S. dollar-denominated debt had interest rates

ranging from 0.13% to 7.25% (with a weighted average

rate of 1.85%) as of December 2022 and 0.13% to 13.00%

(with a weighted average rate of 1.86%) as of December

2021. These rates exclude unsecured long-term borrowings

accounted for at fair value under the fair value option.

The table below presents unsecured long-term borrowings by

maturity.

As of December 2022

$ in millions Group Inc. Subsidiaries Total

2024

$ 34,130 $ 16,881

$ 51,011

2025

26,690 10,452

37,142

2026

17,662 4,540

22,202

2027

21,835 8,525

30,360

2028 - thereafter

85,655 20,768

106,423

Total

$ 185,972 $ 61,166 $ 247,138

In the table above:

• Unsecured long-term borrowings maturing within one year

of the financial statement date and unsecured long-term

borrowings that are redeemable within one year of the

financial statement date at the option of the holder are

excluded as they are included in unsecured short-term

borrowings.

• Unsecured long-term borrowings that are repayable prior

to maturity at the option of the firm are reflected at their

contractual maturity dates.

• Unsecured long-term borrowings that are redeemable prior

to maturity at the option of the holder are reflected at the

earliest dates such options become exercisable.

• Unsecured long-term borrowings included $(15.01) billion

of adjustments to the carrying value of certain unsecured

long-term borrowings resulting from the application of

hedge accounting by year of maturity as follows: $(539)

million in 2024, $(1.25) billion in 2025, $(800) million in

2026, $(1.55) billion in 2027 and $(10.87) billion in 2028

and thereafter.

The firm designates certain derivatives as fair value hedges to

convert a portion of fixed-rate unsecured long-term

borrowings not accounted for at fair value into floating-rate

obligations. See Note 7 for further information about hedging

activities.

The table below presents unsecured long-term borrowings,

after giving effect to such hedging activities.

$ in millions Group Inc. Subsidiaries Total

As of December 2022

Fixed-rate obligations:

At fair value $ 6,094 $ 53 $ 6,147

At amortized cost 2,667 3,398 6,065

Floating-rate obligations:

At fair value 16,328 50,672 67,000

At amortized cost 160,884 7,042 167,926

Total $ 185,973 $ 61,165 $ 247,138

As of December 2021

Fixed-rate obligations:

At fair value $ 4,798 $ 65 $ 4,863

At amortized cost 27,133 3,237 30,370

Floating-rate obligations:

At fair value 12,864 34,663 47,527

At amortized cost 164,001 7,331 171,332

Total $ 208,796 $ 45,296 $ 254,092

In the table above, the aggregate amounts of unsecured long-

term borrowings had weighted average interest rates of

4.97% (4.08% related to fixed-rate obligations and 5.00%

related to floating-rate obligations) as of December 2022 and

1.60% (2.25% related to fixed-rate obligations and 1.48%

related to floating-rate obligations) as of December 2021.

These rates exclude unsecured long-term borrowings

accounted for at fair value under the fair value option.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Goldman Sachs 2022 Form 10-K 181

The carrying value of unsecured long-term borrowings for

which the firm did not elect the fair value option was $173.99

billion as of December 2022 and $201.70 billion as of

December 2021. The estimated fair value of such unsecured

long-term borrowings was $173.70 billion as of December

2022 and $209.37 billion as of December 2021. As these

borrowings are not accounted for at fair value, they are not

included in the firm’s fair value hierarchy in Notes 4 and 5.

Had these borrowings been included in the firm’s fair value

hierarchy, substantially all would have been classified in level

2 as of both December 2022 and December 2021.

Subordinated Borrowings

Unsecured long-term borrowings includes subordinated debt

and junior subordinated debt. Subordinated debt that

matures within one year is included in unsecured short-term

borrowings. Junior subordinated debt is junior in right of

payment to other subordinated borrowings, which are junior

to senior borrowings. Long-term subordinated debt had

maturities ranging from 2025 to 2045 as of both December

2022 and December 2021.

The table below presents information about subordinated

borrowings.

$ in millions

Par

Amount

Carrying

Value Rate

As of December 2022

Subordinated debt $ 12,261 $ 11,882 6.40%

Junior subordinated debt 968 1,054 4.86%

Total $ 13,229 $ 12,936 6.29%

As of December 2021

Subordinated debt $ 12,437 $ 15,571 1.74%

Junior subordinated debt 968 1,321 1.31%

Total $ 13,405 $ 16,892 1.71%

In the table above:

• The par amount of subordinated debt issued by Group Inc.

was $12.26 billion as of December 2022 and $12.44 billion

as of December 2021, and the carrying value of

subordinated debt issued by Group Inc. was $11.88 billion

as of December 2022 and $15.57 billion as of December

2021.

• The rate is the weighted average interest rate for these

borrowings (excluding borrowings accounted for at fair

value under the fair value option), including the effect of

fair value hedges used to convert fixed-rate obligations into

floating-rate obligations. See Note 7 for further

information about hedging activities.

Junior Subordinated Debt

In 2004, Group Inc. issued $2.84 billion of junior

subordinated debt to Goldman Sachs Capital I, a Delaware

statutory trust. Goldman Sachs Capital I issued $2.75billion

of guaranteed preferred beneficial interests (Trust Preferred

securities) to third parties and $85 million of common

beneficial interests to Group Inc. As of both December 2022

and December 2021, the outstanding par amount of junior

subordinated debt held by Goldman Sachs Capital I was $968

million and the outstanding par amount of Trust Preferred

securities and common beneficial interests issued by

Goldman Sachs Capital I was $939 million and $29 million,

respectively. Goldman Sachs Capital I is a wholly-owned

finance subsidiary of the firm for regulatory and legal

purposes but is not consolidated for accounting purposes.

The firm pays interest semi-annually on the junior

subordinated debt at an annual rate of 6.345% and the debt

matures on February 15, 2034. The coupon rate and the

payment dates applicable to the beneficial interests are the

same as the interest rate and payment dates for the junior

subordinated debt. The firm has the right, from time to time,

to defer payment of interest on the junior subordinated debt,

and therefore cause payment on Goldman Sachs Capital I’s

preferred beneficial interests to be deferred, in each case up to

ten consecutive semi-annual periods. During any such

deferral period, the firm will not be permitted to, among

other things, pay dividends on or make certain repurchases of

its common stock. Goldman Sachs Capital I is not permitted

to pay any distributions on the common beneficial interests

held by Group Inc. unless all dividends payable on the

preferred beneficial interests have been paid in full.

Note 15.

Other Liabilities

The table below presents other liabilities by type.

As of December

$ in millions 2022 2021

Compensation and benefits $ 7,225 $ 10,838

Income tax-related liabilities 2,669 2,360

Operating lease liabilities 2,154 2,288

Noncontrolling interests 649 840

Employee interests in consolidated funds 25 29

Accrued expenses and other 8,733 8,146

Total $ 21,455 $ 24,501

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

182

Goldman Sachs 2022 Form 10-K

Operating Lease Liabilities

For leases longer than one year, the firm recognizes a right-

of-use asset representing the right to use the underlying asset

for the lease term, and a lease liability representing the

liability to make payments. See Note 12 for information

about operating lease right-of-use assets.

The table below presents information about operating lease

liabilities.

$ in millions

Operating

lease liabilities

As of December 2022

2023 $ 325

2024 334

2025 283

2026 236

2027 203

2028 - thereafter 1,424

Total undiscounted lease payments 2,805

Imputed interest (651)

Total operating lease liabilities $ 2,154

Weighted average remaining lease term 13 years

Weighted average discount rate 3.66%

As of December 2021

2022 $ 305

2023 307

2024 284

2025 258

2026 216

2027 - thereafter 1,655

Total undiscounted lease payments 3,025

Imputed interest (737)

Total operating lease liabilities $ 2,288

Weighted average remaining lease term 14 years

Weighted average discount rate 3.61%

In the table above, the weighted average discount rate

represents the firm’s incremental borrowing rate as of

January 2019 for operating leases existing on the date of

adoption of ASU No. 2016-02, “Leases (Topic 842),” and at

the lease inception date for leases entered into subsequent to

the adoption of this ASU.

Operating lease costs were $462 million for 2022, $463

million for 2021 and $458 million for 2020. Variable lease

costs, which are included in operating lease costs, were not

material for 2022, 2021 and 2020. Total occupancy expenses

for space held in excess of the firm’s current requirements

were not material for 2022, 2021 and 2020.

Lease payments relating to operating lease arrangements that

were signed but had not yet commenced were $1.48 billion as

of December 2022.

Accrued Expenses and Other

Accrued expenses and other included:

• Liabilities classified as held for sale were not material as of

December 2022 and $310 million as of December 2021

related to certain of the firm’s consolidated investments

within Asset & Wealth Management, substantially all of

which consisted of other secured financings primarily

carried at fair value under the fair value option, and were

related to assets classified as held for sale. See Note 12 for

further information about assets held for sale.

• Contract liabilities, which represent consideration received

by the firm in connection with its contracts with clients

prior to providing the service, were $113 million as of

December 2022 and were not material as of December

2021.

Note 16.

Securitization Activities

The firm securitizes residential and commercial mortgages,

corporate bonds, loans and other types of financial assets by

selling these assets to securitization vehicles (e.g., trusts,

corporate entities and limited liability companies) or through

a resecuritization. The firm acts as underwriter of the

beneficial interests that are sold to investors. The firm’s

residential mortgage securitizations are primarily in

connection with government agency securitizations.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Goldman Sachs 2022 Form 10-K 183

The firm accounts for a securitization as a sale when it has

relinquished control over the transferred financial assets.

Prior to securitization, the firm generally accounts for assets

pending transfer at fair value and therefore does not typically

recognize significant gains or losses upon the transfer of

assets. Net revenues from underwriting activities are

recognized in connection with the sales of the underlying

beneficial interests to investors.

The firm generally receives cash in exchange for the

transferred assets but may also have continuing involvement

with the transferred financial assets, including ownership of

beneficial interests in securitized financial assets, primarily in

the form of debt instruments. The firm may also purchase

senior or subordinated securities issued by securitization

vehicles (which are typically VIEs) in connection with

secondary market-making activities.

The primary risks included in beneficial interests and other

interests from the firm’s continuing involvement with

securitization vehicles are the performance of the underlying

collateral, the position of the firm’s investment in the capital

structure of the securitization vehicle and the market yield for

the security. Interests accounted for at fair value are

primarily classified in level 2 of the fair value hierarchy.

Interests not accounted for at fair value are carried at

amounts that approximate fair value. See Note 4 for further

information about fair value measurements.

The table below presents the amount of financial assets

securitized and the cash flows received on retained interests

in securitization entities in which the firm had continuing

involvement as of the end of the period.

Year Ended December

$ in millions 2022 2021 2020

Residential mortgages $ 26,717 $ 29,048 $ 20,167

Commercial mortgages 13,935 18,396 14,904

Other financial assets 3,617 4,377 1,775

Total financial assets securitized $ 44,269 $ 51,821 $ 36,846

Retained interests cash flows $ 551 $ 513 $ 331

The firm securitized assets of $792 million during 2022, $886

million during 2021 and $551 million during 2020, in a non-

cash exchange for loans and investments.

The table below presents information about nonconsolidated

securitization entities to which the firm sold assets and had

continuing involvement as of the end of the period.

$ in millions

Outstanding

Principal

Amount

Retained

Interests

Purchased

Interests

As of December 2022

U.S. government agency-issued CMOs $ 38,617 $ 1,835 $ –

Other residential mortgage-backed 27,075 1,461 117

Other commercial mortgage-backed 59,688 1,349 82

Corporate debt and other asset-backed 8,750 398 46

Total $ 134,130 $ 5,043 $ 245

As of December 2021

U.S. government agency-issued CMOs $ 33,984 $ 955 $ 3

Other residential mortgage-backed 23,262 1,114 96

Other commercial mortgage-backed 50,350 1,123 130

Corporate debt and other asset-backed 7,755 360 37

Total $ 115,351 $ 3,552 $ 266

In the table above:

• CMOs represents collateralized mortgage obligations.

• The outstanding principal amount is presented for the

purpose of providing information about the size of the

securitization entities and is not representative of the firm’s

risk of loss.

• The firm’s risk of loss from retained or purchased interests

is limited to the carrying value of these interests.

• Purchased interests represent senior and subordinated

interests, purchased in connection with secondary market-

making activities, in securitization entities in which the

firm also holds retained interests.

• Substantially all of the total outstanding principal amount

and total retained interests relate to securitizations during

2018 and thereafter.

• The fair value of retained interests was $5.03 billion as of

December 2022 and $3.57 billion as of December 2021.

In addition to the interests in the table above, the firm had

other continuing involvement in the form of derivative

transactions and commitments with certain nonconsolidated

VIEs. The carrying value of these derivatives and

commitments was a net asset of $72 million as of December

2022 and $81 million as of December 2021, and the notional

amount of these derivatives and commitments was $1.90

billion as of December 2022 and $1.81 billion as of December

2021. The notional amounts of these derivatives and

commitments are included in maximum exposure to loss in

the nonconsolidated VIE table in Note 17.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

184

Goldman Sachs 2022 Form 10-K

The table below presents information about the weighted

average key economic assumptions used in measuring the fair

value of mortgage-backed retained interests.

As of December

$ in millions 2022 2021

Fair value of retained interests $ 4,644 $ 3,209

Weighted average life (years) 6.6 5.1

Constant prepayment rate 7.7% 14.1%

Impact of 10% adverse change $ (27) $ (38)

Impact of 20% adverse change $ (48) $ (69)

Discount rate 9.5% 5.6%

Impact of 10% adverse change $ (138) $ (49)

Impact of 20% adverse change $ (266) $ (96)

In the table above:

• Amounts do not reflect the benefit of other financial

instruments that are held to mitigate risks inherent in these

retained interests.

• Changes in fair value based on an adverse variation in

assumptions generally cannot be extrapolated because the

relationship of the change in assumptions to the change in

fair value is not usually linear.

• The impact of a change in a particular assumption is

calculated independently of changes in any other

assumption. In practice, simultaneous changes in

assumptions might magnify or counteract the sensitivities

disclosed above.

• The constant prepayment rate is included only for

positions for which it is a key assumption in the

determination of fair value.

• The discount rate for retained interests that relate to U.S.

government agency-issued CMOs does not include any

credit loss. Expected credit loss assumptions are reflected in

the discount rate for the remainder of retained interests.

The firm has other retained interests not reflected in the table

above with a fair value of $384 million and a weighted

average life of 6.4 years as of December 2022, and a fair value

of $360 million and a weighted average life of 3.6 years as of

December 2021. Due to the nature and fair value of certain of

these retained interests, the weighted average assumptions for

constant prepayment and discount rates and the related

sensitivity to adverse changes are not meaningful as of both

December 2022 and December 2021. The firm’s maximum

exposure to adverse changes in the value of these interests is

the carrying value of $398 million as of December 2022 and

$360 million as of December 2021.

Note 17.

Variable Interest Entities

A variable interest in a VIE is an investment (e.g., debt or

equity) or other interest (e.g., derivatives or loans and lending

commitments) that will absorb portions of the VIE’s expected

losses and/or receive portions of the VIE’s expected residual

returns.

The firm’s variable interests in VIEs include senior and

subordinated debt; loans and lending commitments; limited

and general partnership interests; preferred and common

equity; derivatives that may include foreign currency, equity

and/or credit risk; guarantees; and certain of the fees the firm

receives from investment funds. Certain interest rate, foreign

currency and credit derivatives the firm enters into with VIEs

are not variable interests because they create, rather than

absorb, risk.

VIEs generally finance the purchase of assets by issuing debt

and equity securities that are either collateralized by or

indexed to the assets held by the VIE. The debt and equity

securities issued by a VIE may include tranches of varying

levels of subordination. The firm’s involvement with VIEs

includes securitization of financial assets, as described in

Note 16, and investments in and loans to other types of VIEs,

as described below. See Note 3 for the firm’s consolidation

policies, including the definition of a VIE.

VIE Consolidation Analysis

The enterprise with a controlling financial interest in a VIE is

known as the primary beneficiary and consolidates the VIE.

The firm determines whether it is the primary beneficiary of a

VIE by performing an analysis that principally considers:

• Which variable interest holder has the power to direct the

activities of the VIE that most significantly impact the

VIE’s economic performance;

• Which variable interest holder has the obligation to absorb

losses or the right to receive benefits from the VIE that

could potentially be significant to the VIE;

• The VIE’s purpose and design, including the risks the VIE

was designed to create and pass through to its variable

interest holders;

• The VIE’s capital structure;

• The terms between the VIE and its variable interest holders

and other parties involved with the VIE; and

• Related-party relationships.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Goldman Sachs 2022 Form 10-K 185

The firm reassesses its evaluation of whether an entity is a

VIE when certain reconsideration events occur. The firm

reassesses its determination of whether it is the primary

beneficiary of a VIE on an ongoing basis based on current

facts and circumstances.

VIE Activities

The firm is principally involved with VIEs through the

following business activities:

Mortgage-Backed VIEs. The firm sells residential and

commercial mortgage loans and securities to mortgage-

backed VIEs and may retain beneficial interests in the assets

sold to these VIEs. The firm purchases and sells beneficial

interests issued by mortgage-backed VIEs in connection with

market-making activities. In addition, the firm may enter into

derivatives with certain of these VIEs, primarily interest rate

swaps, which are typically not variable interests. The firm

generally enters into derivatives with other counterparties to

mitigate its risk.

Real Estate, Credit- and Power-Related and Other

Investing VIEs. The firm purchases equity and debt

securities issued by and makes loans to VIEs that hold real

estate, performing and nonperforming debt, distressed loans,

power-related assets and equity securities. The firm generally

does not sell assets to, or enter into derivatives with, these

VIEs.

Corporate Debt and Other Asset-Backed VIEs. The firm

structures VIEs that issue notes to clients, purchases and sells

beneficial interests issued by corporate debt and other asset-

backed VIEs in connection with market-making activities,

and makes loans to VIEs that warehouse corporate debt.

Certain of these VIEs synthetically create the exposure for the

beneficial interests they issue by entering into credit

derivatives with the firm, rather than purchasing the

underlying assets. In addition, the firm may enter into

derivatives, such as total return swaps, with certain corporate

debt and other asset-backed VIEs, under which the firm pays

the VIE a return due to the beneficial interest holders and

receives the return on the collateral owned by the VIE. The

collateral owned by these VIEs is primarily other asset-

backed loans and securities. The firm may be removed as the

total return swap counterparty and may enter into derivatives

with other counterparties to mitigate its risk related to these

swaps. The firm may sell assets to the corporate debt and

other asset-backed VIEs it structures.

Principal-Protected Note VIEs. The firm structures VIEs

that issue principal-protected notes to clients. These VIEs

own portfolios of assets, principally with exposure to hedge

funds. Substantially all of the principal protection on the

notes issued by these VIEs is provided by the asset portfolio

rebalancing that is required under the terms of the notes. The

firm enters into total return swaps with these VIEs under

which the firm pays the VIE the return due to the principal-

protected note holders and receives the return on the assets

owned by the VIE. The firm may enter into derivatives with

other counterparties to mitigate its risk. The firm also

obtains funding through these VIEs.

Investments in Funds. The firm makes equity investments

in certain investment fund VIEs it manages and is entitled to

receive fees from these VIEs. The firm has generally not sold

assets to, or entered into derivatives with, these VIEs.

Nonconsolidated VIEs

The table below presents a summary of the nonconsolidated

VIEs in which the firm holds variable interests.

As of December

$ in millions 2022 2021

Total nonconsolidated VIEs

Assets in VIEs $ 181,697 $ 176,809

Carrying value of variable interests — assets $ 12,325 $ 9,582

Carrying value of variable interests — liabilities $ 659 $ 928

Maximum exposure to loss:

Retained interests $ 5,043 $ 3,552

Purchased interests 861 1,071

Commitments and guarantees 3,087 2,440

Derivatives 8,802 8,682

Debt and equity 6,026 4,639

Total $ 23,819 $ 20,384

In the table above:

• The nature of the firm’s variable interests is described in

the rows under maximum exposure to loss.

• The firm’s exposure to the obligations of VIEs is generally

limited to its interests in these entities. In certain instances,

the firm provides guarantees, including derivative

guarantees, to VIEs or holders of variable interests in VIEs.

• The maximum exposure to loss excludes the benefit of

offsetting financial instruments that are held to mitigate the

risks associated with these variable interests.

• The maximum exposure to loss from retained interests,

purchased interests, and debt and equity is the carrying

value of these interests.

• The maximum exposure to loss from commitments and

guarantees, and derivatives is the notional amount, which

does not represent anticipated losses and has not been

reduced by unrealized losses. As a result, the maximum

exposure to loss exceeds liabilities recorded for

commitments and guarantees, and derivatives.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

186

Goldman Sachs 2022 Form 10-K

The table below presents information, by principal business

activity, for nonconsolidated VIEs included in the summary

table above.

As of December

$ in millions 2022 2021

Mortgage-backed

Assets in VIEs $ 127,290 $ 120,343

Carrying value of variable interests — assets $ 4,977 $ 4,147

Maximum exposure to loss:

Retained interests $ 4,645 $ 3,192

Purchased interests 332 955

Commitments and guarantees 64 34

Derivatives 2 18

Total $ 5,043 $ 4,199

Real estate, credit- and power-related and other investing

Assets in VIEs $ 29,193 $ 26,867

Carrying value of variable interests — assets $ 4,415 $ 3,923

Carrying value of variable interests — liabilities $ 2 $ 8

Maximum exposure to loss:

Commitments and guarantees $ 2,679 $ 2,030

Derivatives – 64

Debt and equity 4,414 3,923

Total $ 7,093 $ 6,017

Corporate debt and other asset-backed

Assets in VIEs $ 19,428 $ 18,391

Carrying value of variable interests — assets $ 2,817 $ 1,156

Carrying value of variable interests — liabilities $ 657 $ 920

Maximum exposure to loss:

Retained interests $ 398 $ 360

Purchased interests 529 116

Commitments and guarantees 190 250

Derivatives 8,800 8,597

Debt and equity 1,496 360

Total $ 11,413 $ 9,683

Investments in funds

Assets in VIEs $ 5,786 $ 11,208

Carrying value of variable interests — assets $ 116 $ 356

Maximum exposure to loss:

Commitments and guarantees $ 154 $ 126

Derivatives – 3

Debt and equity 116 356

Total $ 270 $ 485

As of both December 2022 and December 2021, the carrying

values of the firm’s variable interests in nonconsolidated VIEs

are included in the consolidated balance sheets as follows:

• Mortgage-backed: Assets primarily included in trading

assets and loans.

• Real estate, credit- and power-related and other investing:

Assets primarily included in investments and loans, and

liabilities included in trading liabilities and other liabilities.

• Corporate debt and other asset-backed: Assets included in

loans and trading assets, and liabilities included in trading

liabilities.

• Investments in funds: Assets included in investments.

Consolidated VIEs

The table below presents a summary of the carrying value

and balance sheet classification of assets and liabilities in

consolidated VIEs.

As of December

$ in millions 2022 2021

Total consolidated VIEs

Assets

Cash and cash equivalents $ 348 $ 501

Customer and other receivables 7 –

Trading assets 103 122

Investments 101 153

Loans 1,177 1,988

Other assets 336 314

Total $ 2,072 $ 3,078

Liabilities

Other secured financings $ 952 $ 1,143

Customer and other payables 51 34

Trading liabilities 9 7

Unsecured short-term borrowings 58 146

Unsecured long-term borrowings 16 81

Other liabilities 112 163

Total $ 1,198 $ 1,574

In the table above:

• Assets and liabilities are presented net of intercompany

eliminations and exclude the benefit of offsetting financial

instruments that are held to mitigate the risks associated

with the firm’s variable interests.

• VIEs in which the firm holds a majority voting interest are

excluded if (i) the VIE meets the definition of a business

and (ii) the VIE’s assets can be used for purposes other than

the settlement of its obligations.

• Substantially all assets can only be used to settle

obligations of the VIE.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Goldman Sachs 2022 Form 10-K 187

The table below presents information, by principal business

activity, for consolidated VIEs included in the summary table

above.

As of December

$ in millions 2022 2021

Real estate, credit-related and other investing

Assets

Cash and cash equivalents $ 339 $ 274

Customer and other receivables 7 –

Trading assets 42 16

Investments 101 153

Loans 1,177 1,988

Other assets 336 314

Total $ 2,002 $ 2,745

Liabilities

Other secured financings $ 170 $ 150

Customer and other payables 51 34

Trading liabilities 9 7

Other liabilities 112 163

Total $ 342 $ 354

Corporate debt and other asset-backed

Assets

Cash and cash equivalents $ 9 $ 227

Trading assets 20 17

Total $ 29 $ 244

Liabilities

Other secured financings $ 482 $ 602

Total $ 482 $ 602

Principal-protected notes

Assets

Trading assets $ 41 $ 89

Total $ 41 $ 89

Liabilities

Other secured financings $ 300 $ 391

Unsecured short-term borrowings 58 146

Unsecured long-term borrowings 16 81

Total $ 374 $ 618

In the table above:

• The majority of the assets in principal-protected notes VIEs

are intercompany and are eliminated in consolidation.

• Creditors and beneficial interest holders of real estate,

credit-related and other investing VIEs do not have

recourse to the general credit of the firm.

Note 18.

Commitments, Contingencies and Guarantees

Commitments

The table below presents commitments by type.

As of December

$ in millions

2022 2021

Commitment Type

Commercial lending:

Investment-grade $ 97,659 $ 95,585

Non-investment-grade 56,265 69,635

Warehouse financing 9,116 10,391

Consumer 64,098 35,941

Total lending 227,138 211,552

Risk participations 9,173 10,016

Collateralized agreement 105,301 101,031

Collateralized financing 22,532 29,561

Investment 7,705 11,381

Other 9,690 9,143

Total commitments $ 381,539 $ 372,684

The table below presents commitments by expiration.

As of December 2022

2024 - 2026 - 2028 -

$ in millions 2023 2025 2027 Thereafter

Commitment Type

Commercial lending:

Investment-grade $ 14,764 $ 26,601 $ 54,258 $ 2,036

Non-investment-grade 4,850 17,875 27,601 5,939

Warehouse financing 1,633 6,248 1,197 38

Consumer 64,097 1 – –

Total lending 85,344 50,725 83,056 8,013

Risk participations 2,932 3,394 2,760 87

Collateralized agreement

104,392 909 – –

Collateralized financing 21,816 716 – –

Investment 1,266 1,379 2,344 2,716

Other 9,168 285 – 237

Total commitments $ 224,918 $ 57,408 $ 88,160 $ 11,053

Lending Commitments

The firm’s commercial and warehouse financing lending

commitments are agreements to lend with fixed termination

dates and depend on the satisfaction of all contractual

conditions to borrowing. These commitments are presented

net of amounts syndicated to third parties. The total

commitment amount does not necessarily reflect actual future

cash flows because the firm may syndicate portions of these

commitments. In addition, commitments can expire unused

or be reduced or cancelled at the counterparty’s request. The

firm also provides credit to consumers by issuing credit card

lines and through commitments to provide unsecured

installment loans.

The table below presents information about lending

commitments.

As of December

$ in millions 2022 2021

Held for investment $ 222,689 $ 197,120

Held for sale 3,355 13,175

At fair value 1,094 1,257

Total $ 227,138 $ 211,552

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

188

Goldman Sachs 2022 Form 10-K

In the table above:

• Held for investment lending commitments are accounted

for at amortized cost. The carrying value of lending

commitments was a liability of $1.01 billion (including

allowance for credit losses of $774 million) as of December

2022 and $1.05 billion (including allowance for credit losses

of $776 million) as of December 2021. The estimated fair

value of such lending commitments was a liability of $5.95

billion as of December 2022 and $4.17 billion as of

December 2021. Had these lending commitments been

carried at fair value and included in the fair value

hierarchy, $3.11 billion as of December 2022 and $1.91

billion as of December 2021 would have been classified in

level 2, and $2.84 billion as of December 2022 and $2.26

billion as of December 2021 would have been classified in

level 3.

• Held for sale lending commitments are accounted for at the

lower of cost or fair value. The carrying value of lending

commitments held for sale was a liability of $88 million as

of December 2022 and $91 million as of December 2021.

The estimated fair value of such lending commitments

approximates the carrying value. Had these lending

commitments been included in the fair value hierarchy,

they would have been primarily classified in level 3 as of

both December 2022 and December 2021.

• Gains or losses related to lending commitments at fair

value, if any, are generally recorded net of any fees in other

principal transactions.

Commercial Lending. The firm’s commercial lending

commitments were primarily extended to investment-grade

corporate borrowers. Such commitments primarily included

$127.60 billion as of December 2022 and $120.99 billion as of

December 2021, related to relationship lending activities

(principally used for operating and general corporate

purposes), and $7.71 billion as of December 2022 and $21.07

billion as of December 2021, related to other investment

banking activities (generally extended for contingent

acquisition financing and are often intended to be short-term

in nature, as borrowers often seek to replace them with other

funding sources). The firm also extends lending commitments

in connection with other types of corporate lending,

commercial real estate financing and other collateralized

lending. See Note 9 for further information about funded

loans.

To mitigate the credit risk associated with the firm’s

commercial lending activities, the firm obtains credit

protection on certain loans and lending commitments

through credit default swaps, both single-name and index-

based contracts, and through the issuance of credit-linked

notes.

Warehouse Financing. The firm provides financing to

clients who warehouse financial assets. These arrangements

are collateralized by the warehoused assets, primarily

consisting of residential real estate, consumer and corporate

loans.

Consumer. The firm’s consumer lending commitments

includes:

• Credit card lines issued by the firm to consumers were

$62.22 billion as of December 2022 and $33.97 billion as of

December 2021. These credit card lines are cancellable by

the firm. The increase in credit card lending commitments

from December 2021 to December 2022 included

approximately $15.0 billion relating to the firm’s

acquisition of the General Motors co-branded credit card

portfolio in February 2022. In addition, consumer lending

commitments as of December 2021 included a commitment

of approximately $2.0 billion to acquire the outstanding

credit card loans related to the General Motors co-branded

credit card portfolio.

• Commitments to provide unsecured installment loans to

consumers were $1.88 billion as of December 2022 and

$9 million as of December 2021. The increase in these

lending commitments from December 2021 to December

2022 primarily related to commitments extended in

connection with point-of-sale financing.

Risk Participations

The firm also risk participates certain of its commercial

lending commitments to other financial institutions. In the

event of a risk participant’s default, the firm will be

responsible to fund the borrower.

Collateralized Agreement Commitments/

Collateralized Financing Commitments

Collateralized agreement commitments includes forward

starting resale and securities borrowing agreements, and

collateralized financing commitments includes forward

starting repurchase and secured lending agreements that

settle at a future date, generally within three business days.

Collateralized agreement commitments also includes

transactions where the firm has entered into commitments to

provide contingent financing to its clients and counterparties

through resale agreements. The firm’s funding of these

commitments depends on the satisfaction of all contractual

conditions to the resale agreement and these commitments

can expire unused.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Goldman Sachs 2022 Form 10-K 189

Investment Commitments

Investment commitments includes commitments to invest in

private equity, real estate and other assets directly and

through funds that the firm raises and manages. Investment

commitments included $1.29 billion as of December 2022 and

$1.60 billion as of December 2021, related to commitments to

invest in funds managed by the firm. If these commitments

are called, they would be funded at market value on the date

of investment.

Investment commitments as of December 2021 included

approximately $1.90 billion related to the firm’s commitment

to acquire NNIP and approximately $2.0 billion related to

the firm’s commitment to acquire GreenSky. These

acquisitions were completed in 2022. See Note 12 for

information about these acquisitions. In addition, as of

December 2021, the firm had an undrawn commitment of

approximately $600 million (included within other

commitments) to GreenSky to acquire loans originated by

GreenSky’s bank partners, which was terminated upon

completion of the acquisition.

Contingencies

Legal Proceedings. See Note 27 for information about legal

proceedings.

Guarantees

The table below presents derivatives that meet the definition

of a guarantee, securities lending and clearing guarantees and

certain other financial guarantees.

$ in millions

Derivatives

Securities

lending and

clearing

Other

financial

guarantees

As of December 2022

Carrying Value of Net Liability $ 7,485 $ – $ 395

Maximum Payout/Notional Amount by Period of Expiration

2023 $ 110,599 $ 20,970 $ 1,634

2024 - 2025 133,090 – 3,308

2026 - 2027 20,252 – 1,837

2028 - thereafter 27,518 – 93

Total $ 291,459 $ 20,970 $ 6,872

As of December 2021

Carrying Value of Net Liability $ 3,406 $ – $ 234

Maximum Payout/Notional Amount by Period of Expiration

2022 $ 68,212 $ 11,046 $ 871

2023 - 2024 48,273 – 3,608

2025 - 2026 19,706 – 2,015

2027 - thereafter 30,006 – 97

Total $ 166,197 $ 11,046 $ 6,591

In the table above:

• The maximum payout is based on the notional amount of

the contract and does not represent anticipated losses.

• Amounts exclude certain commitments to issue standby

letters of credit that are included in lending commitments.

See the tables in “Commitments” above for a summary of

the firm’s commitments.

• The carrying value for derivatives included derivative

assets of $578 million as of December 2022 and $1.10

billion as of December 2021, and derivative liabilities of

$8.06 billion as of December 2022 and $4.51 billion as of

December 2021.

Derivative Guarantees. The firm enters into various

derivatives that meet the definition of a guarantee under U.S.

GAAP, including written equity and commodity put options,

written currency contracts and interest rate caps, floors and

swaptions. These derivatives are risk managed together with

derivatives that do not meet the definition of a guarantee, and

therefore the amounts in the table above do not reflect the

firm’s overall risk related to derivative activities. Disclosures

about derivatives are not required if they may be cash settled

and the firm has no basis to conclude it is probable that the

counterparties held the underlying instruments at the

inception of the contract. The firm has concluded that these

conditions have been met for certain large, internationally

active commercial and investment bank counterparties,

central clearing counterparties, hedge funds and certain other

counterparties. Accordingly, the firm has not included such

contracts in the table above. See Note 7 for information

about credit derivatives that meet the definition of a

guarantee, which are not included in the table above.

Derivatives are accounted for at fair value and therefore the

carrying value is considered the best indication of payment/

performance risk for individual contracts. However, the

carrying values in the table above exclude the effect of

counterparty and cash collateral netting.

Securities Lending and Clearing Guarantees. Securities

lending and clearing guarantees include the indemnifications

and guarantees that the firm provides in its capacity as an

agency lender and in its capacity as a sponsoring member of

the Fixed Income Clearing Corporation.

As an agency lender, the firm indemnifies most of its

securities lending customers against losses incurred in the

event that borrowers do not return securities and the

collateral held is insufficient to cover the market value of the

securities borrowed. The maximum payout of such

indemnifications was $12.23 billion as of December 2022 and

$11.05 billion as of December 2021. Collateral held by the

lenders in connection with securities lending indemnifications

was $12.62 billion as of December 2022 and $11.36 billion as

of December 2021. Because the contractual nature of these

arrangements requires the firm to obtain collateral with a

market value that exceeds the value of the securities lent to

the borrower, there is minimal performance risk associated

with these indemnifications.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

190

Goldman Sachs 2022 Form 10-K

As a sponsoring member of the Government Securities

Division of the Fixed Income Clearing Corporation, the firm

guarantees the performance of its sponsored member clients

to the Fixed Income Clearing Corporation in connection with

certain resale and repurchase agreements. To minimize

potential losses on such guarantees, the firm obtains a

security interest in the collateral that the sponsored client

placed with the Fixed Income Clearing Corporation.

Therefore, the risk of loss on such guarantees is minimal. As

of December 2022, the maximum payout on this guarantee

was $8.74 billion and the related collateral held was $8.70

billion. There were no amounts outstanding under the

guarantee as of December 2021.

Other Financial Guarantees. In the ordinary course of

business, the firm provides other financial guarantees of the

obligations of third parties (e.g., standby letters of credit and

other guarantees to enable clients to complete transactions

and fund-related guarantees). These guarantees represent

obligations to make payments to beneficiaries if the

guaranteed party fails to fulfill its obligation under a

contractual arrangement with that beneficiary. Other

financial guarantees also include a guarantee that the firm

has provided to the Government of Malaysia that it will

receive, by August 2025, at least $1.4 billion in assets and

proceeds from assets seized by governmental authorities

around the world related to 1Malaysia Development Berhad,

a sovereign wealth fund in Malaysia (1MDB). In connection

with this guarantee, the firm is also required to make a one-

time interim payment of $250million towards the $1.4billion

if the Government of Malaysia has not received at least

$500million in assets and proceeds by August 2022. The firm

considers the reports that it receives on a semi-annual basis,

expected in February and August, in evaluating the progress

of Malaysia’s recovery efforts. The firm and the Government

of Malaysia disagree about and, following an extension of

the contractual dispute resolution period, continue to discuss

whether the Government of Malaysia did, in fact, recover at

least $500million as of August 2022 and whether any interim

payment was due. If the parties are unable to resolve this

dispute, it would be settled by arbitration. Any amounts paid

by the firm would, in any event, be subject to reimbursement

in the event the assets and proceeds received by the

Government of Malaysia through August 18, 2028 exceed

$1.4 billion. See Note 27 for further information about

matters related to 1MDB.

Guarantees of Securities Issued by Trusts. The firm has

established trusts, including Goldman Sachs Capital I,

Goldman Sachs Capital II and Goldman Sachs Capital III (the

Trusts), and other entities, for the limited purpose of issuing

securities to third parties, lending the proceeds to the firm

and entering into contractual arrangements with the firm and

third parties related to this purpose. The firm does not

consolidate these entities. See Notes 14 and 19 for further

information about the transactions involving the Trusts.

The firm effectively provides for the full and unconditional

guarantee of the securities issued by these entities. Timely

payment by the firm of amounts due to these entities under

the guarantee, borrowing, preferred stock and related

contractual arrangements will be sufficient to cover payments

due on the securities issued by these entities. No subsidiary of

Group Inc. guarantees the securities of the Trusts.

Management believes that it is unlikely that any

circumstances will occur, such as nonperformance on the part

of paying agents or other service providers, that would make

it necessary for the firm to make payments related to these

entities other than those required under the terms of the

guarantee, borrowing, preferred stock and related

contractual arrangements and in connection with certain

expenses incurred by these entities.

Indemnities and Guarantees of Service Providers. In

the ordinary course of business, the firm indemnifies and

guarantees certain service providers, such as clearing and

custody agents, trustees and administrators, against specified

potential losses in connection with their acting as an agent of,

or providing services to, the firm or its affiliates.

The firm may also be liable to some clients or other parties

for losses arising from its custodial role or caused by acts or

omissions of third-party service providers, including sub-

custodians and third-party brokers. In certain cases, the firm

has the right to seek indemnification from these third-party

service providers for certain relevant losses incurred by the

firm. In addition, the firm is a member of payment, clearing

and settlement networks, as well as securities exchanges

around the world that may require the firm to meet the

obligations of such networks and exchanges in the event of

member defaults and other loss scenarios.

In connection with the firm’s prime brokerage and clearing

businesses, the firm agrees to clear and settle transactions

entered into by clients with other brokerage firms. The firm’s

obligations in respect of such transactions are secured by the

assets in the client’s account and proceeds received from the

transactions cleared and settled by the firm on behalf of the

client. In connection with joint venture investments, the firm

may issue loan guarantees under which it may be liable in the

event of fraud, misappropriation, environmental liabilities

and other matters involving the borrower.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Goldman Sachs 2022 Form 10-K 191

The firm is unable to develop an estimate of the maximum

payout under these guarantees and indemnifications.

However, management believes that it is unlikely the firm

will have to make any material payments under these

arrangements, and no material liabilities related to these

guarantees and indemnifications have been recognized in the

consolidated balance sheets as of both December 2022 and

December 2021.

Other Representations, Warranties and

Indemnifications. The firm provides representations and

warranties to counterparties in connection with a variety of

commercial transactions and occasionally indemnifies them

against potential losses caused by the breach of those

representations and warranties. The firm may also provide

indemnifications protecting against changes in or adverse

application of certain U.S. tax laws in connection with

ordinary-course transactions, such as securities issuances,

borrowings or derivatives.

In addition, the firm may provide indemnifications to some

counterparties to protect them in the event additional taxes

are owed or payments are withheld, due either to a change in

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

These indemnifications generally are standard contractual

terms and are entered into in the ordinary course of business.

Generally, there are no stated or notional amounts included

in these indemnifications, and the contingencies triggering the

obligation to indemnify are not expected to occur. The firm

is unable to develop an estimate of the maximum payout

under these guarantees and indemnifications. However,

management believes that it is unlikely the firm will have to

make any material payments under these arrangements, and

no material liabilities related to these arrangements have been

recognized in the consolidated balance sheets as of both

December 2022 and December 2021.

Guarantees of Subsidiaries. Group Inc. is the entity that

fully and unconditionally guarantees the securities issued by

GS Finance Corp., a wholly-owned finance subsidiary of the

firm. Group Inc. has guaranteed the payment obligations of

Goldman Sachs & Co. LLC (GS&Co.), GS Bank USA and

Goldman Sachs Paris Inc. et Cie, subject to certain

exceptions. In addition, Group Inc. has provided guarantees

to Goldman Sachs International (GSI) and GSBE related to

agreements that each entity has entered into with certain of

its counterparties. Group Inc. guarantees many of the

obligations of its other consolidated subsidiaries on a

transaction-by-transaction basis, as negotiated with

counterparties. Group Inc. is unable to develop an estimate of

the maximum payout under its subsidiary guarantees.

However, because these obligations are also obligations of

consolidated subsidiaries, Group Inc.’s liabilities as guarantor

are not separately disclosed.

Note 19.

Shareholders’ Equity

Common Equity

As of both December 2022 and December 2021, the firm had

4.00 billion authorized shares of common stock and 200

million authorized shares of nonvoting common stock, each

with a par value of $0.01 per share. During 2022, in

connection with the acquisition of GreenSky, the firm issued

approximately 5.5 million shares of common stock, including

approximately 325,000 shares subject to future service.

The firm’s share repurchase program is intended to help

maintain the appropriate level of common equity. The share

repurchase program is effected primarily through regular

open-market purchases (which may include repurchase plans

designed to comply with Rule 10b5-1 and accelerated share

repurchases), the amounts and timing of which are

determined primarily by the firm’s current and projected

capital position, and capital deployment opportunities, but

which may also be influenced by general market conditions

and the prevailing price and trading volumes of the firm’s

common stock.

The table below presents information about common stock

repurchases.

Year Ended December

in millions, except per share amounts 2022 2021 2020

Common share repurchases 10.1 15.3 8.2

Average cost per share $ 346.07 $ 339.81 $ 236.35

Total cost of common share repurchases

$ 3,500 $ 5,200 $ 1,928

Pursuant to the terms of certain share-based compensation

plans, employees may remit shares to the firm or the firm

may cancel share-based awards to satisfy statutory employee

tax withholding requirements. Under these plans, 11,644

shares in 2022, 1,830 shares in 2021 and 3,476 shares in 2020

were remitted with a total value of $4 million in 2022,

$0.5 million in 2021 and $0.9 million in 2020, and the firm

cancelled 4.6 million share-based awards in 2022, and

3.4million in both 2021 and 2020, with a total value of $1.59

billion in 2022, $984 million in 2021 and $829million in 2020.

The table below presents common stock dividends declared.

Year Ended December

2022 2021 2020

Dividends declared per common share $ 9.00 $ 6.50 $ 5.00

On January 13, 2023, the Board of Directors of Group Inc.

(Board) declared a dividend of $2.50 per common share to be

paid on March 30, 2023 to common shareholders of record

on March 2, 2023.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

192

Goldman Sachs 2022 Form 10-K

Preferred Equity

The tables below present information about the perpetual

preferred stock issued and outstanding as of December 2022.

Series

Authorized

Issued

Outstanding

Depositary Shares

Per Share

50,000

30,000

29,999

1,000

25,000

8,000

1,000

60,000

54,000

53,999

1,000

17,500

7,667

N.A.

5,000

1,615

N.A.

46,000

40,000

1,000

32,200

28,000

1,000

26,000

66,000

60,000

20,000

24,000

14,000

27,000

30,000

Total

472,700

400,282

400,280

Series Earliest Redemption Date

Liquidation

Preference

Redemption Value

($ in millions)

Currently redeemable

$ 25,000

$ 750

Currently redeemable

$ 25,000

200

Currently redeemable

$ 25,000

1,350

Currently redeemable

$ 100,000

767

Currently redeemable

$ 100,000

161

May 10, 2023

$ 25,000

1,000

May 10, 2024

$ 25,000

700

November 10, 2026

$ 25,000

650

Currently redeemable

$ 25,000

1,500

August 10, 2024

$ 25,000

500

February 10, 2025

$ 25,000

600

February 10, 2025

$ 25,000

350

May 10, 2026

$ 25,000

675

August 10, 2026

$ 25,000

750

November 10, 2026

$ 25,000

750

Total

$ 10,703

In the tables above:

• All shares have a par value of $0.01 per share and, where

applicable, each share is represented by the specified

number of depositary shares.

• The earliest redemption date represents the date on which

each share of non-cumulative preferred stock is redeemable

at the firm’s option.

• Prior to redeeming preferred stock, the firm must receive

approval from the FRB.

• The redemption price per share for Series A through F and

Series Q through V Preferred Stock is the liquidation

preference plus declared and unpaid dividends. The

redemption price per share for Series J through P Preferred

Stock is the liquidation preference plus accrued and unpaid

dividends.

• All series of preferred stock are pari passu and have a

preference over the firm’s common stock on liquidation.

• The firm’s ability to declare or pay dividends on, or

purchase, redeem or otherwise acquire, its common stock is

subject to certain restrictions in the event that the firm fails

to pay or set aside full dividends on the preferred stock for

the latest completed dividend period.

• Series E and Series F Preferred Stock are held by Goldman

Sachs Capital II and Goldman Sachs Capital III,

respectively. These trusts are Delaware statutory trusts

sponsored by the firm and wholly-owned finance

subsidiaries of the firm for regulatory and legal purposes

but are not consolidated for accounting purposes.

In 2021, the firm redeemed all outstanding shares of its (i)

Series N 6.30% Non-Cumulative Preferred Stock with a

redemption value of $675 million ($25,000 per share), plus

accrued and unpaid dividends and (ii) Series M 5.375%

Fixed-to-Floating Rate Non-Cumulative Preferred Stock with

a redemption value of $2 billion ($25,000 per share), plus

accrued and unpaid dividends. The difference between the

redemption value and net carrying value at the time of these

redemptions was $41 million, which was recorded as an

addition to preferred stock dividends in 2021.

In 2020, the firm redeemed the remaining 14,000 outstanding

shares of its Series L 5.70% Non-Cumulative Preferred Stock

with a redemption value of $350million ($25,000 per share),

plus accrued and unpaid dividends. The difference between

the redemption value and net carrying value was $1million,

which was recorded as an addition to preferred stock

dividends in 2020.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Goldman Sachs 2022 Form 10-K 193

The table below presents the dividend rates of perpetual

preferred stock as of December 2022.

Series Per Annum Dividend Rate

3 month LIBOR + 0.75%, with floor of 3.75%, payable quarterly

3 month LIBOR + 0.75%, with floor of 4.00%, payable quarterly

3 month LIBOR + 0.67%, with floor of 4.00%, payable quarterly

3 month LIBOR + 0.7675%, with floor of 4.00%, payable quarterly

3 month LIBOR + 0.77%, with floor of 4.00%, payable quarterly

5.50% to, but excluding, May 10, 2023;

3 month LIBOR + 3.64% thereafter, payable quarterly

6.375% to, but excluding, May 10, 2024;

3 month LIBOR + 3.55% thereafter, payable quarterly

5.30%, payable semi-annually, from issuance date to, but excluding,

November 10, 2026; 3 month LIBOR + 3.834%, payable quarterly, thereafter

3 month LIBOR + 2.874%, payable quarterly

5.50%, payable semi-annually, from issuance date to, but excluding,

August 10, 2024; 5 year treasury rate + 3.623%, payable semi-annually, thereafter

4.95%, payable semi-annually, from issuance date to, but excluding,

February 10, 2025; 5 year treasury rate + 3.224%, payable semi-annually, thereafter

4.40%, payable semi-annually, from issuance date to, but excluding,

February 10, 2025; 5 year treasury rate + 2.85%, payable semi-annually thereafter

3.80%, payable semi-annually, from issuance date to, but excluding,

May 10, 2026; 5 year treasury rate + 2.969%, payable semi-annually, thereafter

3.65%, payable semi-annually, from issuance date to, but excluding,

August 10, 2026; 5 year treasury rate + 2.915%, payable semi-annually, thereafter

4.125%, payable semi-annually, from issuance date to, but excluding,

November 10, 2026; 5 year treasury rate + 2.949%, payable semi-annually, thereafter

In the table above, dividends on each series of preferred stock

are payable in arrears for the periods specified.

The table below presents preferred stock dividends declared.

Year Ended December

2022 2021 2020

Series per share

$ in

millions

per share

$ in

millions

per share

$ in

millions

A $ 950.51 $ 28 $ 950.51 $ 28 $ 947.92 $ 28

C $ 1,013.90 8 $ 1,013.90 8 $ 1,011.12 8

D $ 1,013.90 55 $ 1,013.90 55 $ 1,011.12 55

E $ 4,055.55 31 $ 4,055.55 31 $ 4,055.55 31

F $ 4,055.55 6 $ 4,055.55 7 $ 4,055.55 6

J $ 1,375.00 55 $ 1,375.00 55 $ 1,375.00 55

K $ 1,593.76 45 $ 1,593.76 44 $ 1,593.76 45

L $ – – $ – – $ 361.54 4

M $ – – $ – – $ 1,217.16 97

N $ – – $ 787.50 19 $ 1,575.00 43

O $ 1,325.00 34 $ 1,325.00 34 $ 1,325.00 34

P $ 1,250.00 75 $ 1,250.00 75 $ 1,250.00 75

Q $ 1,375.00 28 $ 1,375.00 28 $ 1,577.43 32

R $ 1,237.50 30 $ 1,237.50 30 $ 910.94 22

S $ 1,100.00 16 $ 1,100.00 15 $ 586.67 8

T $ 950.00 26 $ 511.94 14 $ – –

U $ 942.92 28 $ – – $ – –

V $ 1,062.76 32 $ – – $ – –

Total $ 497 $ 443 $ 543

On January 5, 2023, Group Inc. declared dividends of

$341.29 per share of Series A Preferred Stock, $341.29 per

share of Series C Preferred Stock, $336.18 per share of Series

D Preferred Stock, $343.75 per share of Series J Preferred

Stock, $398.44 per share of Series K Preferred Stock, $476.99

per share of Series P Preferred Stock, $687.50 per share of

Series Q Preferred Stock, $618.75 per share of Series R

Preferred Stock, $550.00 per share of Series S Preferred Stock

and $456.25 per share of Series U Preferred Stock to be paid

on February10, 2023 to preferred shareholders of record on

January26, 2023. In addition, the firm declared dividends of

$1,382.02 per share of Series E Preferred Stock and $1,382.64

per share of Series F Preferred Stock to be paid on March1,

2023 to preferred shareholders of record on February 14,

2023.

Accumulated Other Comprehensive Income/(Loss)

The table below presents changes in accumulated other

comprehensive income/(loss), net of tax, by type.

$ in millions

Beginning

balance

Other

comprehensive

income/(loss)

adjustments,

net of tax

Ending

balance

Year Ended December 2022

Currency translation $ (738) $ (47) $ (785)

Debt valuation adjustment (511) 1,403 892

Pension and postretirement liabilities (327) (172) (499)

Available-for-sale securities (492) (2,126) (2,618)

Total $ (2,068) $ (942) $ (3,010)

Year Ended December 2021

Currency translation $ (696) $ (42) $ (738)

Debt valuation adjustment (833) 322 (511)

Pension and postretirement liabilities (368) 41 (327)

Available-for-sale securities 463 (955) (492)

Total $ (1,434) $ (634) $ (2,068)

Year Ended December 2020

Currency translation $ (616) $ (80) $ (696)

Debt valuation adjustment (572) (261) (833)

Pension and postretirement liabilities (342) (26) (368)

Available-for-sale securities 46 417 463

Total $ (1,484) $ 50 $ (1,434)

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

194

Goldman Sachs 2022 Form 10-K

Note 20.

Regulation and Capital Adequacy

The FRB is the primary regulator of Group Inc., a bank

holding company under the U.S. Bank Holding Company Act

of 1956 and a financial holding company under amendments

to this Act. The firm is subject to consolidated regulatory

capital requirements which are calculated in accordance with

the regulations of the FRB (Capital Framework).

The capital requirements are expressed as risk-based capital

and leverage ratios that compare measures of regulatory

capital to risk-weighted assets (RWAs), average assets and

off-balance sheet exposures. Failure to comply with these

capital requirements would result in restrictions being

imposed by the firm’s regulators and could limit the firm’s

ability to repurchase shares, pay dividends and make certain

discretionary compensation payments. The firm’s capital

levels are also subject to qualitative judgments by the

regulators about components of capital, risk weightings and

other factors. Furthermore, certain of the firm’s subsidiaries

are subject to separate regulations and capital requirements.

Capital Framework

The regulations under the Capital Framework are largely

based on the Basel Committee on Banking Supervision’s

(Basel Committee) capital framework for strengthening

international capital standards (Basel III) and also implement

certain provisions of the Dodd-Frank Act. Under the Capital

Framework, the firm is an “Advanced approaches” banking

organization and has been designated as a global systemically

important bank (G-SIB).

The Capital Framework includes the minimum risk-based

capital and the capital conservation buffer requirements. The

buffer must consist entirely of capital that qualifies as

Common Equity Tier 1 (CET1) capital.

The firm calculates its CET1 capital, Tier 1 capital and Total

capital ratios in accordance with both the Standardized and

Advanced Capital Rules. Each of the ratios calculated under

the Standardized and Advanced Capital Rules must meet its

respective capital requirements.

Under the Capital Framework, the firm is also subject to

leverage requirements which consist of a minimum Tier 1

leverage ratio and a minimum supplementary leverage ratio

(SLR), as well as the SLR buffer.

Consolidated Regulatory Capital Requirements

Risk-Based Capital Ratios. The table below presents the

risk-based capital requirements.

Standardized Advanced

As of December 2022

CET1 capital ratio 13.3% 9.5%

Tier 1 capital ratio 14.8% 11.0%

Total capital ratio 16.8% 13.0%

As of December 2021

CET1 capital ratio 13.4% 9.5%

Tier 1 capital ratio 14.9% 11.0%

Total capital ratio 16.9% 13.0%

In the table above:

• As of both December 2022 and December 2021, under both

the Standardized and Advanced Capital Rules, the CET1

capital ratio requirement includes a minimum of 4.5%, the

Tier 1 capital ratio requirement includes a minimum of

6.0% and the Total capital ratio requirement includes a

minimum of 8.0%. These requirements also include the

capital conservation buffer requirements, consisting of the

G-SIB surcharge of 2.5% (Method 2) and the

countercyclical capital buffer, which the FRB has set to

zero percent. In addition, the capital conservation buffer

requirements include the stress capital buffer of 6.3% as of

December 2022 and 6.4% as of December 2021 under the

Standardized Capital Rules and a buffer of 2.5% under the

Advanced Capital Rules.

• The G-SIB surcharge is updated annually based on

financial data from the prior year and is generally

applicable for the following year. The G-SIB surcharge is

calculated using two methodologies, the higher of which is

reflected in the firm’s risk-based capital requirements. The

first calculation (Method 1) is based on the Basel

Committee’s methodology which, among other factors,

relies upon measures of the size, activity and complexity of

each G-SIB. The second calculation (Method 2) uses similar

inputs but includes a measure of reliance on short-term

wholesale funding.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Goldman Sachs 2022 Form 10-K 195

The table below presents information about risk-based

capital ratios.

$ in millions Standardized Advanced

As of December 2022

CET1 capital $ 98,050 $ 98,050

Tier 1 capital $ 108,552 $ 108,552

Tier 2 capital $ 15,958 $ 12,115

Total capital $ 124,510 $ 120,667

RWAs $ 653,419 $ 679,450

CET1 capital ratio 15.0% 14.4%

Tier 1 capital ratio 16.6% 16.0%

Total capital ratio 19.1% 17.8%

As of December 2021

CET1 capital $ 96,254 $ 96,254

Tier 1 capital $ 106,766 $ 106,766

Tier 2 capital $ 14,636 $ 12,051

Total capital $ 121,402 $ 118,817

RWAs $ 676,863 $ 647,921

CET1 capital ratio 14.2% 14.9%

Tier 1 capital ratio 15.8% 16.5%

Total capital ratio 17.9% 18.3%

In the table above, beginning in the fourth quarter of 2022,

the firm updated the probability of default models used in the

calculation of Advanced RWAs. The impact of this change

was a decrease in the firm's Advanced CET1 capital ratio of

approximately 0.7 percentage points.

In the second half of 2022, based on regulatory feedback, the

firm revised certain interpretations of the Capital Rules

underlying the calculation of Standardized and Advanced

RWAs. As of December 2021, this change would have

increased the firm's Standardized RWAs of $677 billion by

approximately $12 billion, which would have reduced the

firm's Standardized CET1 capital ratio of 14.2% by 0.2

percentage points, Standardized Tier 1 capital ratio of 15.8%

by 0.3 percentage points and Standardized Total capital ratio

of 17.9% by 0.3 percentage points. As of December 2021, this

change would have increased the firm's Advanced RWAs of

$648 billion by approximately $6 billion, which would have

reduced the firm's Advanced CET1 capital ratio of 14.9% by

0.2 percentage points, Advanced Tier 1 capital ratio of 16.5%

by 0.2 percentage points and Advanced Total capital ratio of

18.3% by 0.1 percentage points.

Leverage Ratios. The table below presents the leverage

requirements.

Requirements

Tier 1 leverage ratio 4.0%

SLR 5.0%

In the table above, the SLR requirement of 5% includes a

minimum of 3% and a 2% buffer applicable to G-SIBs.

The table below presents information about leverage ratios.

For the Three Months

Ended or as of December

$ in millions 2022 2021

Tier 1 capital $ 108,552 $ 106,766

Average total assets $ 1,500,225 $ 1,466,770

Deductions from Tier 1 capital (8,259) (4,583)

Average adjusted total assets 1,491,966 1,462,187

Off-balance sheet and other exposures 375,392 448,334

Total leverage exposure $ 1,867,358 $ 1,910,521

Tier 1 leverage ratio 7.3% 7.3%

SLR 5.8% 5.6%

In the table above:

• Average total assets represents the average daily assets for

the quarter adjusted for the impact of Current Expected

Credit Losses (CECL) transition.

• Off-balance sheet and other exposures primarily includes

the monthly average of off-balance sheet exposures,

consisting of derivatives, securities financing transactions,

commitments and guarantees.

• Tier 1 leverage ratio is calculated as Tier 1 capital divided

by average adjusted total assets.

• SLR is calculated as Tier 1 capital divided by total leverage

exposure.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

196

Goldman Sachs 2022 Form 10-K

Risk-Based Capital. The table below presents information

about risk-based capital.

As of December

$ in millions 2022 2021

Common shareholders’ equity $ 106,486 $ 99,223

Impact of CECL transition 829 1,105

Deduction for goodwill (5,674) (3,610)

Deduction for identifiable intangible assets (1,770) (401)

Other adjustments (1,821) (63)

CET1 capital 98,050 96,254

Preferred stock 10,703 10,703

Deduction for investments in covered funds (199) (189)

Other adjustments (2) (2)

Tier 1 capital $ 108,552 $ 106,766

Standardized Tier 2 and Total capital

Tier 1 capital $ 108,552 $ 106,766

Qualifying subordinated debt 10,637 11,554

Junior subordinated debt – 94

Allowance for credit losses 5,331 3,034

Other adjustments (10) (46)

Standardized Tier 2 capital 15,958 14,636

Standardized Total capital $ 124,510 $ 121,402

Advanced Tier 2 and Total capital

Tier 1 capital $ 108,552 $ 106,766

Standardized Tier 2 capital 15,958 14,636

Allowance for credit losses (5,331) (3,034)

Other adjustments 1,488 449

Advanced Tier 2 capital 12,115 12,051

Advanced Total capital $ 120,667 $ 118,817

In the table above:

• Beginning in January 2022, the firm started to phase in the

estimated reduction to regulatory capital as a result of

adopting the CECL model. Impact of CECL transition in

the table above reflects the total amount of reduction of

$1.11 billion as of December 2021 to be phased in through

January 2025 (at 25% per year), of which $276 million was

phased in on January 1, 2022. The total amount to be

phased in includes the impact of adopting CECL as of

January 1, 2020, as well as 25% of the increase in the

allowance for credit losses from January 1, 2020 through

December31, 2021.

• Deduction for goodwill was net of deferred tax liabilities of

$700 million as of December 2022 and $675 million as of

December 2021.

• Deduction for identifiable intangible assets was net of

deferred tax liabilities of $239 million as of December 2022

and $17 million as of December 2021.

• Deduction for investments in covered funds represents the

firm’s aggregate investments in applicable covered funds.

As of December 2021, this deduction excluded investments

that were subject to an extended conformance period. See

Note 8 for further information about the Volcker Rule.

• Other adjustments within CET1 capital and Tier 1 capital

primarily include credit valuation adjustments on

derivative liabilities, the overfunded portion of the firm’s

defined benefit pension plan obligation net of associated

deferred tax liabilities, disallowed deferred tax assets, debt

valuation adjustments and other required credit risk-based

deductions. Other adjustments within Advanced Tier 2

capital include eligible credit reserves.

• Qualifying subordinated debt is subordinated debt issued

by Group Inc. with an original maturity of five years or

greater. The outstanding amount of subordinated debt

qualifying for Tier 2 capital is reduced upon reaching a

remaining maturity of five years. See Note 14 for further

information about the firm’s subordinated debt.

• Junior subordinated debt is debt issued to a Trust and was

fully phased out of regulatory capital on January 1, 2022.

As of December 2021, 10% of this debt was included in

Tier 2 capital and 90% was phased out of regulatory

capital. Junior subordinated debt is reduced by the amount

of Trust Preferred securities purchased by the firm. See

Note 14 for further information about the firm’s junior

subordinated debt and Trust Preferred securities.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Goldman Sachs 2022 Form 10-K 197

The table below presents changes in CET1 capital, Tier 1

capital and Tier 2 capital.

$ in millions Standardized Advanced

Year Ended December 2022

CET1 capital

Beginning balance $ 96,254 $ 96,254

Change in:

Common shareholders’ equity 7,263 7,263

Impact of CECL transition (276) (276)

Deduction for goodwill (2,064) (2,064)

Deduction for identifiable intangible assets (1,369) (1,369)

Other adjustments (1,758) (1,758)

Ending balance $ 98,050 $ 98,050

Tier 1 capital

Beginning balance $ 106,766 $ 106,766

Change in:

CET1 capital 1,796 1,796

Deduction for investments in covered funds

(10) (10)

Ending balance 108,552 108,552

Tier 2 capital

Beginning balance 14,636 12,051

Change in:

Qualifying subordinated debt (917) (917)

Junior subordinated debt (94) (94)

Allowance for credit losses 2,297 –

Other adjustments 36 1,075

Ending balance 15,958 12,115

Total capital $ 124,510 $ 120,667

RWAs. RWAs are calculated in accordance with both the

Standardized and Advanced Capital Rules.

Credit Risk

Credit RWAs are calculated based on measures of exposure,

which are then risk weighted under the Standardized and

Advanced Capital Rules:

• The Standardized Capital Rules apply prescribed risk-

weights, which depend largely on the type of counterparty.

The exposure measures for derivatives and securities

financing transactions are based on specific formulas which

take certain factors into consideration.

• Under the Advanced Capital Rules, the firm computes risk-

weights for wholesale and retail credit exposures in

accordance with the Advanced Internal Ratings-Based

approach. The exposure measures for derivatives and

securities financing transactions are computed utilizing

internal models.

• For both Standardized and Advanced credit RWAs, the

risk-weights for securitizations and equities are based on

specific required formulaic approaches.

Market Risk

RWAs for market risk in accordance with the Standardized

and Advanced Capital Rules are generally consistent. Market

RWAs are calculated based on measures of exposure which

include the following:

• Value-at-Risk (VaR) is the potential loss in value of trading

assets and liabilities, as well as certain investments, loans,

and other financial assets and liabilities accounted for at

fair value, due to adverse market movements over a defined

time horizon with a specified confidence level.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

198

Goldman Sachs 2022 Form 10-K

For both risk management purposes and regulatory capital

calculations, the firm uses a single VaR model which captures

risks, including those related to interest rates, equity prices,

currency rates and commodity prices. However, VaR used

for risk management purposes differs from VaR used for

regulatory capital requirements (regulatory VaR) due to

differences in time horizons, confidence levels and the scope

of positions on which VaR is calculated. For risk

management purposes, a 95% one-day VaR is used, whereas

for regulatory capital requirements, a 99% 10-day VaR is

used to determine Market RWAs and a 99% one-day VaR is

used to determine regulatory VaR exceptions. In addition,

the daily net revenues used to determine risk management

VaR exceptions (i.e., comparing the daily net revenues to the

VaR measure calculated as of the end of the prior business

day) include intraday activity, whereas the Capital

Framework requires that intraday activity be excluded from

daily net revenues when calculating regulatory VaR

exceptions. Intraday activity includes bid/offer net revenues,

which are more likely than not to be positive by their nature.

As a result, there may be differences in the number of VaR

exceptions and the amount of daily net revenues calculated

for regulatory VaR compared to the amounts calculated for

risk management VaR.

The firm’s positional losses observed on a single day

exceeded its 99% one-day regulatory VaR on one occasion

during each of the years ended 2022 and 2021. There was no

change in the firm’s VaR multiplier used to calculate Market

RWAs;

• Stressed VaR is the potential loss in value of trading assets

and liabilities, as well as certain investments, loans, and

other financial assets and liabilities accounted for at fair

value, during a period of significant market stress;

• Incremental risk is the potential loss in value of non-

securitized positions due to the default or credit migration

of issuers of financial instruments over a one-year time

horizon;

• Comprehensive risk is the potential loss in value, due to

price risk and defaults, within the firm’s credit correlation

positions; and

• Specific risk is the risk of loss on a position that could

result from factors other than broad market movements,

including event risk, default risk and idiosyncratic risk. The

standardized measurement method is used to determine

specific risk RWAs, by applying supervisory defined risk-

weighting factors after applicable netting is performed.

Operational Risk

Operational RWAs are only required to be included under

the Advanced Capital Rules. The firm utilizes an internal

risk-based model to quantify Operational RWAs.

The table below presents information about RWAs.

$ in millions Standardized Advanced

As of December 2022

Credit RWAs

Derivatives $ 142,696 $ 111,344

Commitments, guarantees and loans 247,026 198,508

Securities financing transactions 73,189 21,659

Equity investments 30,899 33,451

Other 76,335 96,351

Total Credit RWAs 570,145 461,313

Market RWAs

Regulatory VaR 18,981 18,981

Stressed VaR 37,833 37,833

Incremental risk 6,470 6,470

Comprehensive risk 3,641 3,641

Specific risk 16,349 16,349

Total Market RWAs 83,274 83,274

Total Operational RWAs – 134,863

Total RWAs $ 653,419 $ 679,450

As of December 2021

Credit RWAs

Derivatives $ 175,628 $ 109,532

Commitments, guarantees and loans 233,639 182,210

Securities financing transactions 76,346 14,407

Equity investments 43,256 45,582

Other 71,485 86,768

Total Credit RWAs 600,354 438,499

Market RWAs

Regulatory VaR 13,510 13,510

Stressed VaR 38,922 38,922

Incremental risk 6,867 6,867

Comprehensive risk 2,521 2,521

Specific risk 14,689 14,689

Total Market RWAs 76,509 76,509

Total Operational RWAs – 132,913

Total RWAs $ 676,863 $ 647,921

In the table above:

• Securities financing transactions represents resale and

repurchase agreements and securities borrowed and loaned

transactions.

• Other includes receivables, certain debt securities, cash and

cash equivalents, and other assets.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Goldman Sachs 2022 Form 10-K 199

The table below presents changes in RWAs.

$ in millions Standardized Advanced

Year Ended December 2022

RWAs

Beginning balance $ 676,863 $ 647,921

Credit RWAs

Change in:

Derivatives (32,932) 1,812

Commitments, guarantees and loans 13,387 16,298

Securities financing transactions (3,157) 7,252

Equity investments (12,357) (12,131)

Other 4,850 9,583

Change in Credit RWAs (30,209) 22,814

Market RWAs

Change in:

Regulatory VaR 5,471 5,471

Stressed VaR (1,089) (1,089)

Incremental risk (397) (397)

Comprehensive risk 1,120 1,120

Specific risk 1,660 1,660

Change in Market RWAs 6,765 6,765

Change in Operational RWAs – 1,950

Ending balance $ 653,419 $ 679,450

RWAs Rollforward Commentary

Year Ended December 2022. Standardized Credit RWAs

as of December 2022 decreased by $30.21 billion compared

with December 2021, primarily reflecting a decrease in

derivatives (principally due to reduced exposures) and a

decrease in equity investments (principally due to reduced

exposures as a result of sales and unrealized losses). These

decreases were partially offset by an increase in

commitments, guarantees and loans (principally due to

increased lending activity). Standardized Market RWAs as of

December 2022 increased by $6.77 billion compared with

December 2021, primarily reflecting an increase in regulatory

VaR (principally due to higher levels of market volatility).

Advanced Credit RWAs as of December 2022 increased by

$22.81 billion compared with December 2021, primarily

reflecting an increase in commitments, guarantees and loans,

other credit RWAs and securities financing transactions

(principally due to updates to the probability of default

models in the fourth quarter of 2022). These increases were

partially offset by a decrease in equity investments

(principally due to reduced exposures as a result of sales and

unrealized losses). Advanced Market RWAs as of December

2022 increased by $6.77 billion compared with December

2021, primarily reflecting an increase in regulatory VaR

(principally due to higher levels of market volatility).

Advanced Operational RWAs as of December 2022 increased

by $1.95 billion compared with December 2021, primarily

associated with litigation and regulatory proceedings.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

200

Goldman Sachs 2022 Form 10-K

Bank Subsidiaries

GS Bank USA. GS Bank USA is the firm’s primary U.S.

bank subsidiary. GS Bank USA is a New York State-

chartered bank and a member of the Federal Reserve System,

is supervised and regulated by the FRB, the FDIC, the New

York State Department of Financial Services (NYDFS) and

the Consumer Financial Protection Bureau, and is subject to

regulatory capital requirements that are calculated under the

Capital Framework. GS Bank USA is an Advanced

approaches banking organization under the Capital

Framework. The deposits of GS Bank USA are insured by the

FDIC to the extent provided by law.

The Capital Framework includes the minimum risk-based

capital and the capital conservation buffer requirements

(consisting of a 2.5% buffer and the countercyclical capital

buffer). The buffer must consist entirely of capital that

qualifies as CET1 capital. In addition, the Capital

Framework includes the leverage ratio requirement.

GS Bank USA is required to calculate the CET1 capital, Tier

1 capital and Total capital ratios in accordance with both the

Standardized and Advanced Capital Rules. The lower of each

risk-based capital ratio under the Standardized and Advanced

Capital Rules is the ratio against which GS Bank USA’s

compliance with its risk-based capital requirements is

assessed. In addition, under the regulatory framework for

prompt corrective action applicable to GS Bank USA, in

order to meet the quantitative requirements for a “well-

capitalized” depository institution, GS Bank USA must also

meet the “well-capitalized” requirements in the table below.

GS Bank USA’s capital levels and prompt corrective action

classification are also subject to qualitative judgments by the

regulators about components of capital, risk weightings and

other factors. Failure to comply with the capital

requirements, including a breach of the buffers described

below, would result in restrictions being imposed by the

regulators.

The table below presents GS Bank USA’s risk-based capital,

leverage and “well-capitalized” requirements.

Requirements

“Well-capitalized”

Requirements

Risk-based capital requirements

CET1 capital ratio 7.0% 6.5%

Tier 1 capital ratio 8.5% 8.0%

Total capital ratio 10.5% 10.0%

Leverage requirements

Tier 1 leverage ratio 4.0% 5.0%

SLR 3.0% 6.0%

In the table above:

• The CET1 capital ratio requirement includes a minimum of

4.5%, the Tier 1 capital ratio requirement includes a

minimum of 6.0% and the Total capital ratio requirement

includes a minimum of 8.0%. These requirements also

include the capital conservation buffer requirements

consisting of a 2.5% buffer and the countercyclical capital

buffer, which the FRB has set to zero percent.

• The “well-capitalized” requirements are the binding

requirements for leverage ratios.

The table below presents information about GS Bank USA’s

risk-based capital ratios.

$ in millions Standardized Advanced

As of December 2022

CET1 capital $ 46,845 $ 46,845

Tier 1 capital $ 46,845 $ 46,845

Tier 2 capital $ 8,042 $ 5,382

Total capital $ 54,887 $ 52,227

RWAs $ 357,112 $ 275,451

CET1 capital ratio 13.1% 17.0%

Tier 1 capital ratio 13.1% 17.0%

Total capital ratio 15.4% 19.0%

As of December 2021

CET1 capital $ 42,535 $ 42,535

Tier 1 capital $ 42,535 $ 42,535

Tier 2 capital $ 6,430 $ 4,646

Total capital $ 48,965 $ 47,181

RWAs $ 312,601 $ 222,607

CET1 capital ratio 13.6% 19.1%

Tier 1 capital ratio 13.6% 19.1%

Total capital ratio 15.7% 21.2%

In the table above:

• The lower of the Standardized or Advanced ratio is the

ratio against which GS Bank USA’s compliance with the

capital requirements is assessed under the risk-based

Capital Rules, and therefore, the Standardized ratios

applied to GS Bank USA as of both December 2022 and

December 2021.

• Beginning in January 2022, GS Bank USA started to phase

in the estimated reduction to regulatory capital as a result

of adopting the CECL model. The total amount to be

phased in includes the impact of adopting CECL as of

January 1, 2020, as well as 25% of the increase in the

allowance for credit losses from January 1, 2020 through

December31, 2021.

• Beginning in the fourth quarter of 2022, the firm updated

the probability of default models used in the calculation of

Advanced RWAs. The impact of this change was a

decrease in GS Bank USA's Advanced CET1 capital ratio of

approximately 1 percentage point.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Goldman Sachs 2022 Form 10-K 201

• The Standardized and Advanced risk-based capital ratios

decreased from December 2021 to December 2022,

reflecting an increase in both Credit and Market RWAs,

partially offset by an increase in capital, principally due to

net earnings and capital contributions.

The table below presents information about GS Bank USA’s

leverage ratios.

For the Three Months

Ended or as of December

$ in millions 2022 2021

Tier 1 capital $ 46,845 $ 42,535

Average adjusted total assets $ 499,108 $ 409,739

Total leverage exposure $ 671,215 $ 627,799

Tier 1 leverage ratio 9.4% 10.4%

SLR 7.0% 6.8%

In the table above:

• Average adjusted total assets represents the average daily

assets for the quarter adjusted for deductions from Tier 1

capital and the impact of CECL transition.

• Tier 1 leverage ratio is calculated as Tier 1 capital divided

by average adjusted total assets.

• SLR is calculated as Tier 1 capital divided by total leverage

exposure.

The FRB requires that GS Bank USA maintain cash reserves

with the Federal Reserve. As of both December 2022 and

December 2021, the reserve requirement ratio was zero

percent. See Note 26 for further information about cash

deposits held by the firm at the Federal Reserve.

GS Bank USA is a registered swap dealer with the CFTC and

a registered security-based swap dealer with the SEC. As of

both December 2022 and December 2021, GS Bank USA was

subject to and in compliance with applicable capital

requirements for swap dealers and security-based swap

dealers.

GSIB. GSIB is the firm’s U.K. bank subsidiary regulated by

the Prudential Regulation Authority (PRA) and the Financial

Conduct Authority (FCA). GSIB is subject to the U.K. capital

framework, which is largely based on Basel III. The eligible

retail deposits of GSIB are covered by the U.K. Financial

Services Compensation Scheme to the extent provided by

law.

The table below presents GSIB’s risk-based capital

requirements.

As of December

2022 2021

Risk-based capital requirements

CET1 capital ratio 9.7% 8.5%

Tier 1 capital ratio 11.9% 10.5%

Total capital ratio 14.9% 13.2%

The table below presents information about GSIB’s risk-

based capital ratios.

As of December

$ in millions 2022 2021

Risk-based capital and risk-weighted assets

CET1 capital $ 3,395 $ 3,408

Tier 1 capital $ 3,395 $ 3,408

Tier 2 capital $ 828 $ 826

Total capital $ 4,223 $ 4,234

RWAs $ 15,766 $ 17,196

Risk-based capital ratios

CET1 capital ratio 21.5% 19.8%

Tier 1 capital ratio 21.5% 19.8%

Total capital ratio 26.8% 24.6%

In the table above, the risk-based capital ratios as of

December 2022 reflected profits after foreseeable charges that

are still subject to audit by GSIB’s external auditors and

approval by GSIB’s Board of Directors for inclusion in risk-

based capital. These profits contributed approximately 161

basis points to the CET1 capital ratio as of December 2022.

GSIB is also subject to the minimum leverage ratio

requirement of 3.25% established by the PRA, which became

effective January 1, 2023. GSIB had a leverage ratio of 6.9%

as of December 2022. The leverage ratio as of December 2022

reflected profits after foreseeable charges that are still subject

to audit by GSIB’s external auditors and approval by GSIB’s

Board of Directors for inclusion in risk-based capital. These

profits contributed approximately 56 basis points to the

leverage ratio as of December 2022.

GSIB is subject to minimum reserve requirements at central

banks in certain of the jurisdictions in which it operates. As

of both December 2022 and December 2021, GSIB was in

compliance with these requirements.

GSBE. GSBE is the firm’s German bank subsidiary

supervised by the European Central Bank, BaFin and

Deutsche Bundesbank. GSBE is a non-U.S. banking

subsidiary of GS Bank USA and is also subject to standalone

regulatory capital requirements noted below. GSBE is subject

to the capital requirements prescribed in the amended E.U.

Capital Requirements Directive (CRD) and E.U. Capital

Requirements Regulation (CRR), which are largely based on

Basel III. The deposits of GSBE are covered by the German

statutory deposit protection program to the extent provided

by law. In addition, GSBE has elected to participate in the

German voluntary deposit protection program which

provides insurance for certain eligible deposits not covered by

the German statutory deposit program.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

202

Goldman Sachs 2022 Form 10-K

The table below presents GSBE’s risk-based capital

requirements.

As of December

2022 2021

Risk-based capital requirements

CET1 capital ratio 9.2% 8.7%

Tier 1 capital ratio 11.3% 10.8%

Total capital ratio 14.0% 13.5%

The table below presents information about GSBE’s risk-

based capital ratios.

As of December

$ in millions 2022 2021

Risk-based capital and risk-weighted assets

CET1 capital $ 9,536 $ 6,527

Tier 1 capital $ 9,536 $ 6,527

Tier 2 capital $ 21 $ 23

Total capital $ 9,557 $ 6,550

RWAs $ 30,154 $ 28,924

Risk-based capital ratios

CET1 capital ratio 31.6% 22.6%

Tier 1 capital ratio 31.6% 22.6%

Total capital ratio 31.7% 22.6%

In the table above, the risk-based capital ratios as of

December 2022 reflected profits after foreseeable charges that

are still subject to audit by GSBE’s external auditors and

approval by GSBE’s shareholder (GS Bank USA) for inclusion

in risk-based capital. These profits contributed

approximately 76 basis points to the CET1 capital ratio as of

December 2022.

The table below presents GSBE’s leverage ratio requirement

and leverage ratios.

As of December

2022 2021

Leverage ratio requirement 3.0% 3.0%

Leverage ratio 10.6% 7.6%

In the table above, the leverage ratio as of December 2022

reflected profits after foreseeable charges that are still subject

to audit by GSBE’s external auditors and approval by GSBE’s

shareholder (GS Bank USA) for inclusion in risk-based

capital. These profits contributed approximately 57 basis

points to the leverage ratio as of December 2022.

GSBE is subject to minimum reserve requirements at central

banks in certain of the jurisdictions in which it operates. As

of both December 2022 and December 2021, GSBE was in

compliance with these requirements.

GSBE is a registered swap dealer with the CFTC and a

registered security-based swap dealer with the SEC. As of

both December 2022 and December 2021, GSBE was subject

to and in compliance with applicable capital requirements for

swap dealers and security-based swap dealers.

Restrictions on Payments

Group Inc. may be limited in its ability to access capital held

at certain subsidiaries as a result of regulatory, tax or other

constraints. These limitations include provisions of

applicable law and regulations and other regulatory

restrictions that limit the ability of those subsidiaries to

declare and pay dividends without prior regulatory approval.

For example, the amount of dividends that may be paid by

GS Bank USA are limited to the lesser of the amounts

calculated under a recent earnings test and an undivided

profits test. As a result of dividends paid in connection with

the acquisition of GSBE in July 2021, GS Bank USA cannot

currently declare any additional dividends without prior

regulatory approval.

In addition, subsidiaries not subject to separate regulatory

capital requirements may hold capital to satisfy local tax and

legal guidelines, rating agency requirements (for entities with

assigned credit ratings) or internal policies, including policies

concerning the minimum amount of capital a subsidiary

should hold based on its underlying level of risk.

Group Inc.’s equity investment in subsidiaries was $134.59

billion as of December 2022 and $118.90 billion as of

December 2021, of which Group Inc. was required to

maintain $82.52 billion as of December 2022 and $77.22

billion as of December 2021, of minimum equity capital in its

regulated subsidiaries in order to satisfy the regulatory

requirements of such subsidiaries.

Group Inc.’s capital invested in certain non-U.S. dollar

functional currency subsidiaries is exposed to foreign

exchange risk, substantially all of which is managed through

a combination of non-U.S. dollar-denominated debt and

derivatives. See Note 7 for information about the firm’s net

investment hedges used to hedge this risk.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Goldman Sachs 2022 Form 10-K 203

Note 21.

Earnings Per Common Share

Basic earnings per common share (EPS) is calculated by

dividing net earnings to common by the weighted average

number of common shares outstanding and restricted stock

units (RSUs) for which the delivery of the underlying

common stock is not subject to satisfaction of future service,

performance or market conditions (collectively, basic shares).

Diluted EPS includes the determinants of basic EPS and, in

addition, reflects the dilutive effect of the common stock

deliverable for RSUs for which the delivery of the underlying

common stock is subject to satisfaction of future service,

performance or market conditions.

The table below presents information about basic and diluted

EPS.

Year Ended December

in millions, except per share amounts

2022 2021 2020

Net earnings to common $ 10,764 $ 21,151 $ 8,915

Weighted average basic shares 352.1 350.5 356.4

Effect of dilutive RSUs 6.0 5.3 3.9

Weighted average diluted shares 358.1 355.8 360.3

Basic EPS $ 30.42 $ 60.25 $ 24.94

Diluted EPS $ 30.06 $ 59.45 $ 24.74

In the table above:

• Net earnings to common represents net earnings applicable

to common shareholders, which is calculated as net

earnings less preferred stock dividends.

• Unvested share-based awards that have non-forfeitable

rights to dividends or dividend equivalents are treated as a

separate class of securities under the two-class method.

Distributed earnings allocated to these securities reduce net

earnings to common to calculate EPS under this method.

The impact of applying this methodology was a reduction

in basic EPS of $0.15 for 2022, $0.10 for 2021 and $0.07 for

2020.

• Diluted EPS does not include antidilutive RSUs, including

those that are subject to market conditions, of 0.5million

for 2022, 0.3million for 2021 and 0.1million for 2020.

Note 22.

Transactions with Affiliated Funds

The firm has formed nonconsolidated investment funds with

third-party investors. As the firm generally acts as the

investment manager for these funds, it is entitled to receive

management fees and, in certain cases, advisory fees or

incentive fees from these funds. Additionally, the firm invests

alongside the third-party investors in certain funds.

The tables below present information about affiliated funds.

Year Ended December

$ in millions 2022 2021 2020

Fees earned from funds $ 4,553 $ 3,707 $ 3,393

As of December

$ in millions 2022 2021

Fees receivable from funds $ 1,175 $ 873

Aggregate carrying value of interests in funds $ 3,801 $ 4,321

The firm has waived, and may waive in the future, certain

management fees on selected money market funds to enhance

the yield for investors in such funds. Management fees

waived were $123 million for 2022, $595 million for 2021 and

$109 million for 2020.

In accordance with the Volcker Rule, the firm does not

provide financial support to covered funds. However, in the

ordinary course of business, the firm may choose to provide

voluntary financial support to funds that are not subject to

the Volcker Rule, although any such support is not expected

to be material to the results of operations of the firm. Except

for the fee waivers noted above, the firm did not provide any

additional financial support to its affiliated funds during

either 2022 or 2021.

In addition, in the ordinary course of business, the firm may

also engage in other activities with its affiliated funds,

including, among others, securities lending, trade execution,

market-making, custody, and acquisition and bridge

financing. See Note 18 for information about the firm’s

investment commitments related to these funds.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

204

Goldman Sachs 2022 Form 10-K

Note 23.

Interest Income and Interest Expense

Interest is recorded over the life of the instrument on an

accrual basis based on contractual interest rates.

The table below presents sources of interest income and

interest expense.

Year Ended December

$ in millions 2022 2021 2020

Deposits with banks $ 3,233 $ (24) $ 245

Collateralized agreements 4,468 (980) 282

Trading assets 5,087 4,716 5,210

Investments 2,199 1,589 1,627

Loans 9,059 5,319 4,883

Other interest 4,978 1,500 1,442

Total interest income 29,024 12,120 13,689

Deposits 5,823 1,303 2,386

Collateralized financings 2,808 – 599

Trading liabilities 1,923 1,662 1,238

Short-term borrowings 541 527 542

Long-term borrowings 5,716 3,231 4,153

Other interest 4,535 (1,073) 20

Total interest expense 21,346 5,650 8,938

Net interest income $ 7,678 $ 6,470 $ 4,751

In the table above:

• Collateralized agreements includes rebates paid and

interest income on securities borrowed.

• Loans excludes interest on loans held for sale that are

accounted for at the lower of cost or fair value. Such

interest is included within other interest.

• Other interest income includes interest income on customer

debit balances, other interest-earning assets and loans held

for sale that are accounted for at the lower of cost or fair

value.

• Collateralized financings consists of repurchase agreements

and securities loaned.

• Short- and long-term borrowings include both secured and

unsecured borrowings.

• Other interest expense includes rebates received on other

interest-bearing liabilities and interest expense on customer

credit balances.

Note 24.

Income Taxes

Provision for Income Taxes

Income taxes are provided for using the asset and liability

method under which deferred tax assets and liabilities are

recognized for temporary differences between the financial

reporting and tax bases of assets and liabilities. The firm

reports interest expense related to income tax matters in

provision for taxes and income tax penalties in other

expenses.

The table below presents information about the provision for

taxes.

Year Ended December

$ in millions 2022 2021 2020

Current taxes

U.S. federal $ 2,356 $ 2,904 $1,759

State and local 623 574 555

Non-U.S. 1,658 1,926 1,539

Total current tax expense 4,637 5,404 3,853

Deferred taxes

U.S. federal (2,079) 192 (798)

State and local (436) 72 (42)

Non-U.S. 103 (259) 7

Total deferred tax (benefit)/expense (2,412) 5 (833)

Provision for taxes $ 2,225 $ 5,409 $ 3,020

The table below presents a reconciliation of the U.S. federal

statutory income tax rate to the effective income tax rate.

Year Ended December

2022 2021 2020

U.S. federal statutory income tax rate 21.0% 21.0% 21.0%

State and local taxes, net of U.S. federal benefit 1.3 1.9 3.1

Settlement of employee share-based awards (2.4) (0.7) (1.0)

Non-U.S. operations (1.6) (1.5) (2.4)

Tax credits (0.9) (0.6) (1.2)

Tax-exempt income, including dividends (2.2) (0.5) (0.6)

Non-deductible legal expenses 0.8 – 5.6

Other 0.5 0.4 (0.3)

Effective income tax rate 16.5% 20.0% 24.2%

In the table above, Non-U.S. operations include the impact of

the Base Erosion and Anti-Abuse Tax and Global Intangible

Low Taxed Income.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Goldman Sachs 2022 Form 10-K 205

Deferred Income Taxes

Deferred income taxes reflect the net tax effects of temporary

differences between the financial reporting and tax bases of

assets and liabilities. These temporary differences result in

taxable or deductible amounts in future years and are

measured using the tax rates and laws that will be in effect

when such differences are expected to reverse. Valuation

allowances are established to reduce deferred tax assets to the

amount that more likely than not will be realized and

primarily relate to the ability to utilize losses in various tax

jurisdictions. Tax assets are included in other assets and tax

liabilities are included in other liabilities.

The table below presents information about deferred tax

assets and liabilities, excluding the impact of netting within

tax jurisdictions.

As of December

$ in millions 2022 2021

Deferred tax assets

Compensation and benefits $ 1,889 $ 1,978

ASC 740 asset related to unrecognized tax benefits 315 287

Non-U.S. operations 1,224 606

Unrealized losses 887 –

Net operating losses 787 681

Occupancy-related 123 151

Other comprehensive income/(loss)-related 1,225 593

Tax credits carryforward 87 43

Operating lease liabilities 587 624

Allowance for credit losses 1,580 1,081

Other, net 221 271

Subtotal 8,925 6,315

Valuation allowance (1,569) (895)

Total deferred tax assets $ 7,356 $ 5,420

Deferred tax liabilities

Depreciation and amortization $ 1,240 $ 1,225

Unrealized gains – 1,114

Operating lease right-of-use assets 556 585

Total deferred tax liabilities $ 1,796 $ 2,924

The firm has recorded deferred tax assets of $787million as

of December 2022 and $681million as of December 2021, in

connection with U.S. federal, state and local and foreign net

operating loss carryforwards. The firm also recorded a

valuation allowance of $301million as of December 2022 and

$285 million as of December 2021, related to these net

operating loss carryforwards.

As of December 2022, the U.S. federal net operating loss

carryforward was $1.51 billion, the state and local net

operating loss carryforward was $2.10 billion, and the

foreign net operating loss carryforward was $1.38billion. If

not utilized, the U.S. federal, the state and local, and foreign

net operating loss carryforwards will begin to expire in 2023.

If these carryforwards expire, they will not have a material

impact on the firm’s results of operations. As of December

2022, the firm has recorded deferred tax assets of $37million

in connection with foreign tax credit carryforwards and a

related valuation allowance of $20 million. As of December

2022, the firm has recorded deferred tax assets of $41million

in connection with general business credit carryforwards and

$9 million in connection with state and local tax credit

carryforwards. If not utilized, the foreign tax credit

carryforward will begin to expire in 2033, the general

business credit carryforward will begin to expire in 2023 and

the state and local tax credit carryforward will begin to

expire in 2024.

As of both December 2022 and December 2021, the firm had

no U.S. capital loss carryforwards and no related net deferred

income tax assets. As of December 2022, the firm had

deferred tax assets of $277million in connection with foreign

capital loss carryforwards and a valuation allowance of

$277million related to these capital loss carryforwards.

The valuation allowance increased by $674 million during

2022 and increased by $344 million during 2021. The

increases in both 2022 and 2021 were primarily due to an

increase in deferred tax assets from which the firm does not

expect to realize any benefit.

The firm permanently reinvested eligible earnings of certain

foreign subsidiaries. As of both December 2022 and

December 2021, all U.S. taxes were accrued on these

subsidiaries’ distributable earnings.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

206

Goldman Sachs 2022 Form 10-K

Unrecognized Tax Benefits

The firm recognizes tax positions in the consolidated

financial statements only when it is more likely than not that

the position will be sustained on examination by the relevant

taxing authority based on the technical merits of the position.

A position that meets this standard is measured at the largest

amount of benefit that will more likely than not be realized

on settlement. A liability is established for differences

between positions taken in a tax return and amounts

recognized in the consolidated financial statements.

The accrued liability for interest expense related to income

tax matters and income tax penalties was $205million as of

December 2022 and $131 million as of December 2021. The

firm recognized interest expense and income tax penalties of

$59million for 2022, $13million for 2021 and $41million for

2020. It is reasonably possible that unrecognized tax benefits

could change significantly during the twelve months

subsequent to December 2022 due to potential audit

settlements. However, at this time it is not possible to

estimate any potential change.

The table below presents the changes in the liability for

unrecognized tax benefits, which is included in other

liabilities.

Year Ended or as of December

$ in millions 2022 2021 2020

Beginning balance $ 1,446 $ 1,251 $ 1,445

Increases based on current year tax positions 190 297 164

Increases based on prior years' tax positions 10 95 209

Decreases based on prior years' tax positions (32) (111) (205)

Decreases related to settlements (76) (80) (367)

Exchange rate fluctuations (5) (6) 5

Ending balance $ 1,533 $ 1,446 $ 1,251

Related deferred income tax asset 315 287 200

Net unrecognized tax benefit $ 1,218 $ 1,159 $ 1,051

Regulatory Tax Examinations

The firm is subject to examination by the U.S. Internal

Revenue Service (IRS) and other taxing authorities in

jurisdictions where the firm has significant business

operations, such as the United Kingdom, Japan, Hong Kong

and various states, such as New York. The tax years under

examination vary by jurisdiction. The firm does not expect

completion of these audits to have a material impact on the

firm’s financial condition, but it may be material to operating

results for a particular period, depending, in part, on the

operating results for that period.

The table below presents the earliest tax years that remain

subject to examination by major jurisdiction.

As of

Jurisdiction December 2022

U.S. Federal 2011

New York State and City 2015

United Kingdom 2017

Japan 2016

Hong Kong 2016

The firm has been accepted into the Compliance Assurance

Process program by the IRS for each of the tax years from

2013 through 2023. This program allows the firm to work

with the IRS to identify and resolve potential U.S. federal tax

issues before the filing of tax returns. All issues for the 2011

and 2012 tax years have been resolved and completion is

pending final review by the Joint Committee on Taxation

(JCT). During 2022, the firm reached an agreement with IRS

Appeals on the remaining issues for tax years 2012 through

2019. Subject to final review by JCT, this agreement will not

have a material impact on the effective tax rate. During 2022,

the fieldwork for the 2020 tax year was completed and the

final resolution is not expected to have a material impact on

the effective tax rate. The 2021 tax year remains subject to

post-filing review. New York State and City examinations of

2015 through 2018 commenced during 2021.

All years, including and subsequent to the years in the table

above, remain open to examination by the taxing authorities.

The firm believes that the liability for unrecognized tax

benefits it has established is adequate in relation to the

potential for additional assessments.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Goldman Sachs 2022 Form 10-K 207

Note 25.

Business Segments

The firm manages and reports its activities in three business

segments: Global Banking & Markets, Asset & Wealth

Management and Platform Solutions. See Note 1 for

information about the firm’s business segments, including the

changes made during 2022.

Compensation and benefits expenses in the firm’s segments

reflect, among other factors, the overall performance of the

firm, as well as the performance of individual businesses.

Consequently, pre-tax margins in one segment of the firm’s

business may be significantly affected by the performance of

the firm’s other business segments.

The firm allocates assets (including allocations of global core

liquid assets and cash, secured client financing and other

assets), revenues and expenses among the three business

segments. Due to the integrated nature of these segments,

estimates and judgments are made in allocating certain assets,

revenues and expenses. The allocation process is based on the

manner in which management currently views the

performance of the segments.

The allocation of common shareholders’ equity and preferred

stock dividends to each segment is based on the estimated

amount of equity required to support the activities of the

segment under relevant regulatory capital requirements.

Net earnings for each segment is calculated by applying the

firmwide tax rate to each segment’s pre-tax earnings.

Management believes that this allocation provides a

reasonable representation of each segment’s contribution to

consolidated net earnings to common, return on average

common equity and total assets. Transactions between

segments are based on specific criteria or approximate third-

party rates.

Segment Results

The table below presents a summary of the firm’s segment

results.

Year Ended December

$ in millions 2022 2021 2020

Global Banking & Markets

Non-interest revenues $ 30,042 $ 34,079 $ 28,285

Net interest income 2,445 2,655 2,184

Total net revenues 32,487 36,734 30,469

Provision for credit losses 468 (171) 1,216

Operating expenses 17,851 19,542 18,884

Pre-tax earnings $ 14,168 $ 17,363 $ 10,369

Net earnings $ 11,830 $ 13,890 $ 7,860

Net earnings to common $ 11,458 $ 13,535 $ 7,428

Average common equity $ 69,951 $ 60,064 $ 54,749

Return on average common equity 16.4% 22.5% 13.6%

Asset & Wealth Management

Non-interest revenues $ 9,843 $ 18,922 $ 11,541

Net interest income 3,533 3,043 2,216

Total net revenues 13,376 21,965 13,757

Provision for credit losses 519 (169) 1,395

Operating expenses 11,550 11,406 9,469

Pre-tax earnings $ 1,307 $ 10,728 $ 2,893

Net earnings $ 1,092 $ 8,582 $ 2,193

Net earnings to common $ 979 $ 8,459 $ 2,083

Average common equity $ 31,762 $ 29,988 $ 24,963

Return on average common equity 3.1% 28.2% 8.3%

Platform Solutions

Non-interest revenues $ (198) $ (132) $ (17)

Net interest income 1,700 772 351

Total net revenues 1,502 640 334

Provision for credit losses 1,728 697 487

Operating expenses 1,763 990 630

Pre-tax earnings/(loss) $ (1,989) $ (1,047) $ (783)

Net earnings/(loss) $ (1,661) $ (837) $ (594)

Net earnings/(loss) to common $ (1,673) $ (843) $ (596)

Average common equity $ 3,574 $ 1,777 $ 864

Return on average common equity (46.8) % (47.4) % (69.0) %

Total

Non-interest revenues $ 39,687 $ 52,869 $ 39,809

Net interest income 7,678 6,470 4,751

Total net revenues 47,365 59,339 44,560

Provision for credit losses 2,715 357 3,098

Operating expenses 31,164 31,938 28,983

Pre-tax earnings $ 13,486 $ 27,044 $ 12,479

Net earnings $ 11,261 $ 21,635 $ 9,459

Net earnings to common $ 10,764 $ 21,151 $ 8,915

Average common equity $ 105,287 $ 91,829 $ 80,576

Return on average common equity 10.2% 23.0% 11.1%

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

208

Goldman Sachs 2022 Form 10-K

In the table above:

• Revenues and expenses directly associated with each

segment are included in determining pre-tax earnings.

• Net revenues in the firm’s segments include allocations of

interest income and expense to specific positions in relation

to the cash generated by, or funding requirements of, such

positions. Net interest is included in segment net revenues

as it is consistent with how management assesses segment

performance.

• Total operating expenses included net provisions for

litigation and regulatory proceedings of $576 million for

2022, $534 million for 2021 and $3.42 billion for 2020,

primarily reflected in Global Banking & Markets.

• Expenses not directly associated with specific segments are

allocated based on an estimate of support provided to each

segment.

The table below presents depreciation and amortization

expense by segment.

Year Ended December

$ in millions 2022 2021 2020

Global Banking & Markets $ 1,033 $ 934 $ 760

Asset & Wealth Management 1,212 1,003 1,087

Platform Solutions 210 78 55

Total $ 2,455 $ 2,015 $ 1,902

Segment Assets

The table below presents assets by segment.

As of December

$ in millions 2022 2021

Global Banking & Markets $ 1,169,539 $ 1,201,996

Asset & Wealth Management 214,970 221,150

Platform Solutions 57,290 40,842

Total $ 1,441,799 $ 1,463,988

Geographic Information

Due to the highly integrated nature of international financial

markets, the firm manages its businesses based on the

profitability of the enterprise as a whole. The methodology

for allocating profitability to geographic regions is dependent

on estimates and management judgment because a significant

portion of the firm’s activities require cross-border

coordination in order to facilitate the needs of the firm’s

clients. Geographic results are generally allocated as follows:

• Global Banking & Markets: Investment banking fees and

Other: location of the client and investment banking team;

FICC intermediation and Equities intermediation: location

of the market-making desk; FICC financing and Equities

financing: location of the desk.

• Asset & Wealth Management (excluding direct-to-

consumer business, Equity investments and Debt

investments): location of the sales team and/or investments;

Direct-to-consumer business: location of the client; Equity

investments and Debt investments: location of the

investment or investment professional.

• Platform Solutions: location of the client.

The table below presents total net revenues, pre-tax earnings

and net earnings by geographic region.

$ in millions 2022 2021 2020

Year Ended December

Americas $ 28,669 61% $ 37,217 63% $ 27,293 61%

EMEA 12,860 27% 14,474 24% 10,946 25%

Asia 5,836 12% 7,648 13% 6,321 14 %

Total net revenues $ 47,365 100% $ 59,339 100% $ 44,560 100%

Americas $ 7,016 52% $ 17,314 64% $ 8,804 71%

EMEA 5,260 39% 7,164 27% 3,119 25%

Asia 1,210 9% 2,566 9% 556 4 %

Total pre-tax earnings $ 13,486 100% $ 27,044 100% $ 12,479 100%

Americas $ 6,067 54% $ 13,796 64% $ 7,300 77%

EMEA 4,164 37% 5,778 27% 2,150 23%

Asia 1,030 9% 2,061 9% 9 –

Total net earnings $ 11,261 100% $ 21,635 100% $ 9,459 100%

In the table above:

• During the fourth quarter of 2022, in connection with the

firm’s segment reorganization, the firm changed its

methodology for allocating certain funding-related

revenues not directly allocable to specific regions. As a

result, reclassifications were made to the geographic

allocation of net revenues. Prior period amounts have been

conformed to the current presentation.

• Asia pre-tax earnings and net earnings for 2020 were

impacted by net provisions for litigation and regulatory

proceedings.

• Substantially all of the amounts in Americas were

attributable to the U.S.

• Asia includes Australia and New Zealand.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Goldman Sachs 2022 Form 10-K 209

Note 26.

Credit Concentrations

The firm’s concentrations of credit risk arise from its market-

making, client facilitation, investing, underwriting, lending

and collateralized transactions, and cash management

activities, and may be impacted by changes in economic,

industry or political factors. These activities expose the firm

to many different industries and counterparties, and may also

subject the firm to a concentration of credit risk to a

particular central bank, counterparty, borrower or issuer,

including sovereign issuers, or to a particular clearinghouse

or exchange. The firm seeks to mitigate credit risk by actively

monitoring exposures and obtaining collateral from

counterparties as deemed appropriate.

The firm measures and monitors its credit exposure based on

amounts owed to the firm after taking into account risk

mitigants that the firm considers when determining credit

risk. Such risk mitigants include netting and collateral

arrangements and economic hedges, such as credit

derivatives, futures and forward contracts. Netting and

collateral agreements permit the firm to offset receivables and

payables with such counterparties and/or enable the firm to

obtain collateral on an upfront or contingent basis.

The table below presents the credit concentrations included

in trading cash instruments and investments.

As of December

$ in millions

2022 2021

U.S. government and agency obligations $ 205,935 $ 141,191

Percentage of total assets 14.3% 9.6%

Non-U.S. government and agency obligations $ 40,334 $ 51,426

Percentage of total assets 2.8% 3.5%

In addition, the firm had $208.53 billion as of December 2022

and $222.20 billion as of December 2021 of cash deposits held

at central banks (included in cash and cash equivalents), of

which $165.77 billion as of December 2022 and $122.01

billion as of December 2021 was held at the Federal Reserve.

As of both December 2022 and December 2021, the firm did

not have credit exposure to any other counterparty that

exceeded 2% of total assets.

Collateral obtained by the firm related to derivative assets is

principally cash and is held by the firm or a third-party

custodian. Collateral obtained by the firm related to resale

agreements and securities borrowed transactions is primarily

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

government and agency obligations. See Note 11 for further

information about collateralized agreements and financings.

The table below presents U.S. government and agency

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

that collateralize resale agreements and securities borrowed

transactions.

As of December

$ in millions 2022 2021

U.S. government and agency obligations $ 164,897 $ 86,274

Non-U.S. government and agency obligations $ 76,456 $ 141,588

In the table above:

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

consists of securities issued by the governments of the U.K.,

Japan, Germany and France.

• Given that the firm’s primary credit exposure on such

transactions is to the counterparty to the transaction, the

firm would be exposed to the collateral issuer only in the

event of counterparty default.

Note 27.

Legal Proceedings

The firm is involved in a number of judicial, regulatory and

arbitration proceedings (including those described below)

concerning matters arising in connection with the conduct of

the firm’s businesses. Many of these proceedings are in early

stages, and many of these cases seek an indeterminate

amount of damages.

Under ASC 450, an event is “reasonably possible” if “the

chance of the future event or events occurring is more than

remote but less than likely” and an event is “remote” if “the

chance of the future event or events occurring is slight.”

Thus, references to the upper end of the range of reasonably

possible loss for cases in which the firm is able to estimate a

range of reasonably possible loss mean the upper end of the

range of loss for cases for which the firm believes the risk of

loss is more than slight.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

210

Goldman Sachs 2022 Form 10-K

With respect to matters described below for which

management has been able to estimate a range of reasonably

possible loss where (i) actual or potential plaintiffs have

claimed an amount of money damages, (ii) the firm is being,

or threatened to be, sued by purchasers in a securities offering

and is not being indemnified by a party that the firm believes

will pay the full amount of any judgment, or (iii) the

purchasers are demanding that the firm repurchase securities,

management has estimated the upper end of the range of

reasonably possible loss based on (a) in the case of (i), the

amount of money damages claimed, (b) in the case of (ii), the

difference between the initial sales price of the securities that

the firm sold in such offering and the estimated lowest

subsequent price of such securities prior to the action being

commenced and (c) in the case of (iii), the price that

purchasers paid for the securities less the estimated value, if

any, as of December 2022 of the relevant securities, in each of

cases (i), (ii) and (iii), taking into account any other factors

believed to be relevant to the particular matter or matters of

that type. As of the date hereof, the firm has estimated the

upper end of the range of reasonably possible aggregate loss

for such matters and for any other matters described below

where management has been able to estimate a range of

reasonably possible aggregate loss to be approximately

$2.3 billion in excess of the aggregate reserves for such

matters.

Management is generally unable to estimate a range of

reasonably possible loss for matters other than those included

in the estimate above, including where (i) actual or potential

plaintiffs have not claimed an amount of money damages,

except in those instances where management can otherwise

determine an appropriate amount, (ii) matters are in early

stages, (iii) matters relate to regulatory investigations or

reviews, except in those instances where management can

otherwise determine an appropriate amount, (iv) there is

uncertainty as to the likelihood of a class being certified or

the ultimate size of the class, (v) there is uncertainty as to the

outcome of pending appeals or motions, (vi) there are

significant factual issues to be resolved, and/or (vii) there are

novel legal issues presented. For example, the firm’s potential

liabilities with respect to the investigations and reviews

described below in “Regulatory Investigations and Reviews

and Related Litigation” generally are not included in

management’s estimate of reasonably possible loss. However,

management does not believe, based on currently available

information, that the outcomes of such other matters will

have a material adverse effect on the firm’s financial

condition, though the outcomes could be material to the

firm’s operating results for any particular period, depending,

in part, upon the operating results for such period.

1MDB-Related Matters

Between 2012 and 2013, subsidiaries of the firm acted as

arrangers or purchasers of approximately $6.5 billion of debt

securities of 1MDB.

On November 1, 2018, the U.S. Department of Justice (DOJ)

unsealed a criminal information and guilty plea by Tim

Leissner, a former participating managing director of the

firm, and an indictment against Ng Chong Hwa, a former

managing director of the firm. On August 28, 2018, Leissner

was adjudicated guilty by the U.S. District Court for the

Eastern District of New York of conspiring to launder money

and to violate the U.S. Foreign Corrupt Practices Act’s

(FCPA) anti-bribery and internal accounting controls

provisions. Ng was charged with conspiring to launder

money and to violate the FCPA’s anti-bribery and internal

accounting controls provisions. On April 8, 2022, Ng was

found guilty on all counts following a trial.

On August 18, 2020, the firm announced that it entered into a

settlement agreement with the Government of Malaysia to

resolve the criminal and regulatory proceedings in Malaysia

involving the firm, which includes a guarantee that the

Government of Malaysia receives at least $1.4 billion in

assets and proceeds from assets seized by governmental

authorities around the world related to 1MDB. See Note 18

for further information about this guarantee.

On October 22, 2020, the firm announced that it reached

settlements of governmental and regulatory investigations

relating to 1MDB with the DOJ, the SEC, the FRB, the

NYDFS, the FCA, the PRA, the Singapore Attorney General’s

Chambers, the Singapore Commercial Affairs Department,

the Monetary Authority of Singapore and the Hong Kong

Securities and Futures Commission. Group Inc. entered into a

three-year deferred prosecution agreement with the DOJ, in

which a charge against the firm, one count of conspiracy to

violate the FCPA, was filed and will later be dismissed if the

firm abides by the terms of the agreement. In addition, GS

Malaysia pleaded guilty to one count of conspiracy to violate

the FCPA, and was sentenced on June 9, 2021. In May 2021,

the U.S. Department of Labor granted the firm a five-year

exemption to maintain its status as a qualified professional

asset manager (QPAM).

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Goldman Sachs 2022 Form 10-K 211

The firm has received multiple demands, beginning in

November 2018, from alleged shareholders under Section 220

of the Delaware General Corporation Law for books and

records relating to, among other things, the firm’s

involvement with 1MDB and the firm’s compliance

procedures.

On February 19, 2019, a purported shareholder derivative

action relating to 1MDB was filed in the U.S. District Court

for the Southern District of New York against Group Inc.

and the directors at the time and a former chairman and chief

executive officer of the firm. The second amended complaint

filed on November 13, 2020, alleges breaches of fiduciary

duties, including in connection with alleged insider trading by

certain current and former directors, unjust enrichment and

violations of the anti-fraud provisions of the Exchange Act,

including in connection with Group Inc.’s common stock

repurchases and solicitation of proxies, and seeks unspecified

damages, disgorgement and injunctive relief. On January 13,

2023, the court approved a settlement among the parties

pursuant to which the firm agreed to a payment of

$79.5million to be made to the firm by its insurers, which the

firm has agreed to use for compliance purposes after payment

of any attorneys’ fees and reimbursement of expenses

awarded to plaintiffs.

On December 20, 2018, a putative securities class action

lawsuit was filed in the U.S. District Court for the Southern

District of New York against Group Inc. and certain former

officers of the firm alleging violations of the anti-fraud

provisions of the Exchange Act with respect to Group Inc.’s

disclosures and public statements concerning 1MDB and

seeking unspecified damages. The plaintiff filed the second

amended complaint on October 28, 2019. On June 28, 2021,

the court dismissed the claims against one of the individual

defendants but denied the defendants’ motion to dismiss with

respect to the firm and the remaining individual defendants.

On November 12, 2021, the plaintiff moved for class

certification. On January 13, 2023, the plaintiff moved for

leave to file a third amended complaint.

Mortgage-Related Matters

Beginning in April 2010, a number of purported securities law

class actions were filed in the U.S. District Court for the

Southern District of New York challenging the adequacy of

Group Inc.’s public disclosure of, among other things, the

firm’s activities in the collateralized debt obligation market,

and the firm’s conflict of interest management.

The consolidated amended complaint filed on July 25, 2011,

which named as defendants Group Inc. and certain current

and former officers and employees of Group Inc. and its

affiliates, generally alleges violations of Sections 10(b) and

20(a) of the Exchange Act and seeks monetary damages. The

defendants have moved for summary judgment. On April 7,

2020, the U.S. Court of Appeals for the Second Circuit

affirmed the district court’s August 14, 2018 grant of class

certification. On June 21, 2021, the United States Supreme

Court vacated the judgment of the Second Circuit and

remanded the case for further proceedings, and on August 26,

2021, the Second Circuit vacated the district court’s grant of

class certification and remanded the case for further

proceedings. On December 8, 2021, the district court granted

the plaintiffs’ motion for class certification. On March 9,

2022, the Second Circuit granted defendants’ petition seeking

interlocutory review of the district court’s grant of class

certification.

Complaints were filed in the U.S. District Court for the

Southern District of New York on July 25, 2019 and May 29,

2020 against Goldman Sachs Mortgage Company and GS

Mortgage Securities Corp. by U.S. Bank National

Association, as trustee for two residential mortgage-backed

securitization trusts that issued $1.7 billion of securities. The

complaints generally allege that mortgage loans in the trusts

failed to conform to applicable representations and

warranties and seek specific performance or, alternatively,

compensatory damages and other relief. On November 23,

2020, the court granted in part and denied in part defendants’

motion to dismiss the complaint in the first action and denied

defendants’ motion to dismiss the complaint in the second

action. On January 14, 2021, amended complaints were filed

in both actions.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

212

Goldman Sachs 2022 Form 10-K

Currencies-Related Litigation

GS&Co. and Group Inc. are among the defendants named in

an action filed in the U.S. District Court for the Southern

District of New York on November 7, 2018, and GSI, GSIB,

Goldman Sachs Group UK Limited and GS Bank USA are

among the defendants in an action filed in the High Court of

England and Wales on November 11, 2020 and subsequently

transferred to the U.K. Competition Appeal Tribunal, in each

case by certain direct purchasers of foreign exchange

instruments that opted out of a class settlement reached with,

among others, GS&Co. and Group Inc. The third amended

complaint in the U.S. district court action, filed on August 3,

2020, generally alleges that the defendants violated federal

antitrust law and state common law in connection with an

alleged conspiracy to manipulate the foreign currency

exchange markets and seeks declaratory and injunctive relief,

as well as unspecified amounts of compensatory, punitive,

treble and other damages. The claim in the English action is

for breaches of English and E.U. competition rules from 2003

to 2013 and alleges manipulation of foreign exchange rates

and bid/offer spreads, the exchange of commercially sensitive

information among defendants and collusive trading. On

December 13, 2022, the parties reached settlements in

principle, subject to final documentation, to resolve these

actions.

GS&Co. is among the defendants named in a putative class

action filed in the U.S. District Court for the Southern

District of New York on August 4, 2021. The amended

complaint, filed on January 6, 2022, generally asserts claims

under federal antitrust law and state common law in

connection with an alleged conspiracy among the defendants

to manipulate auctions for foreign exchange transactions on

an electronic trading platform, as well as claims under the

Racketeer Influenced and Corrupt Organizations Act. The

complaint seeks declaratory and injunctive relief, as well as

unspecified amounts of treble and other damages. On March

18, 2022, the defendants moved to dismiss the amended

complaint.

Banco Espirito Santo S.A. and Oak Finance

Beginning in February 2015, GSI commenced actions against

Novo Banco S.A. (Novo Banco) in the English Commercial

Court and the Bank of Portugal (BoP) in Portuguese

Administrative Court in response to BoP’s decisions in

December 2014, September 2015 and December 2015 to

reverse an earlier transfer to Novo Banco of an $835 million

facility agreement (the Facility), structured by GSI, between

Oak Finance Luxembourg S.A. (Oak Finance), a special

purpose vehicle formed in connection with the Facility, and

Banco Espirito Santo S.A. (BES) prior to the failure of BES. In

July 2018, the English Supreme Court found that the English

courts will not have jurisdiction over GSI’s action unless and

until the Portuguese Administrative Court finds against BoP

in GSI’s parallel action. In July 2018, the Liquidation

Committee for BES issued a decision seeking to claw back

from GSI $54 million paid to GSI and $50 million allegedly

paid to Oak Finance in connection with the Facility, alleging

that GSI acted in bad faith in extending the Facility, including

because GSI allegedly knew that BES was at risk of imminent

failure. In October 2018, GSI commenced an action in Lisbon

Commercial Court challenging the Liquidation Committee’s

decision and has since also issued a claim against the

Portuguese State seeking compensation for losses of

approximately $222 million related to the failure of BES,

together with a contingent claim for the $104 million sought

by the Liquidation Committee.

Financial Advisory Services

Group Inc. and certain of its affiliates are from time to time

parties to various civil litigation and arbitration proceedings

and other disputes with clients and third parties relating to

the firm’s financial advisory activities. These claims generally

seek, among other things, compensatory damages and, in

some cases, punitive damages, and in certain cases allege that

the firm did not appropriately disclose or deal with conflicts

of interest.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Goldman Sachs 2022 Form 10-K 213

Archegos-Related Matters

GS&Co. is among the underwriters named as defendants in a

putative securities class action filed on August 13, 2021 in

New York Supreme Court, County of New York, relating to

ViacomCBS Inc.’s (ViacomCBS) March 2021 public offerings

of $1.7 billion of common stock and $1.0 billion of preferred

stock. In addition to the underwriters, the defendants include

ViacomCBS and certain of its officers and directors. GS&Co.

underwrote 646,154 shares of common stock representing an

aggregate offering price of approximately $55 million and

323,077 shares of preferred stock representing an aggregate

offering price of approximately $32 million. The complaint

asserts claims under the federal securities laws and alleges

that the offering documents contained material

misstatements and omissions, including, among other things,

that the offering documents failed to disclose that Archegos

Capital Management (Archegos) had substantial exposure to

ViacomCBS, including through total return swaps to which

certain of the underwriters, including GS&Co., were

allegedly counterparties, and that such underwriters failed to

disclose their exposure to Archegos. The complaint seeks

rescission and compensatory damages in unspecified

amounts. On November 5, 2021, the plaintiffs filed an

amended complaint. On January 4, 2022, the plaintiffs

moved for class certification. On February 6, 2023, the court

dismissed the claims against ViacomCBS and the individual

defendants, but denied the defendants’ motion to dismiss

with respect to GS&Co. and the other underwriter

defendants.

Group Inc. is also a defendant in putative securities class

actions filed beginning in October 2021 and consolidated in

the U.S. District Court for the Southern District of New

York. The complaints allege that Group Inc., along with

another financial institution, sold shares in Baidu Inc.

(Baidu), Discovery Inc. (Discovery), GSX Techedu Inc.

(Gaotu), iQIYI Inc. (iQIYI), Tencent Music Entertainment

Group (Tencent), ViacomCBS, and Vipshop Holdings Ltd.

(Vipshop) based on material nonpublic information

regarding the liquidation of Archegos’ position in Baidu,

Discovery, Gaotu, iQIYI, Tencent, ViacomCBS and Vipshop,

respectively. The complaints generally assert violations of

Sections 10(b), 20A and 20(a) of the Exchange Act and seek

unspecified damages. On June 13, 2022, the plaintiffs in the

class actions filed amended complaints. On August 12, 2022,

the defendants filed motions to dismiss the amended

complaints.

On January 24, 2022, the firm received a demand from an

alleged shareholder under Section 220 of the Delaware

General Corporation Law for books and records relating to,

among other things, the firm’s involvement with Archegos

and the firm’s controls with respect to insider trading.

Underwriting Litigation

Firm affiliates are among the defendants in a number of

proceedings in connection with securities offerings. In these

proceedings, including those described below, the plaintiffs

assert class action or individual claims under federal and state

securities laws and in some cases other applicable laws, allege

that the offering documents for the securities that they

purchased contained material misstatements and omissions,

and generally seek compensatory and rescissory damages in

unspecified amounts, as well as rescission. Certain of these

proceedings involve additional allegations.

Uber Technologies, Inc. GS&Co. is among the

underwriters named as defendants in several putative

securities class actions filed beginning in September 2019 in

California Superior Court, County of San Francisco and the

U.S. District Court for the Northern District of California,

relating to Uber Technologies, Inc.’s (Uber) $8.1 billion May

2019 initial public offering. In addition to the underwriters,

the defendants include Uber and certain of its officers and

directors. GS&Co. underwrote 35,864,408 shares of common

stock representing an aggregate offering price of

approximately $1.6 billion. On November 16, 2020, the court

in the state court action granted defendants’ motion to

dismiss the consolidated amended complaint filed on

February 11, 2020, and on December 16, 2020, plaintiffs

appealed. On August 7, 2020, defendants’ motion to dismiss

the district court action was denied. On September 25, 2020,

the plaintiffs in the district court action moved for class

certification. On December 5, 2020, the plaintiffs in the state

court action filed a complaint in the district court, which was

consolidated with the existing district court action on

January 25, 2021. On May 14, 2021, the plaintiffs filed a

second amended complaint in the district court, purporting to

add the plaintiffs from the state court action as additional

class representatives. On October 1, 2021, defendants’

motion to dismiss the additional class representatives from

the second amended complaint was denied, and on July 26,

2022, the district court granted the plaintiffs’ motion for class

certification. On August 9, 2022, defendants filed a petition

with the U.S. Court of Appeals for the Ninth Circuit seeking

interlocutory review of the district court’s grant of class

certification.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

214

Goldman Sachs 2022 Form 10-K

GoHealth, Inc. GS&Co. is among the underwriters named

as defendants in putative securities class actions filed

beginning on September 21, 2020 and consolidated in the U.S.

District Court for the Northern District of Illinois relating to

GoHealth, Inc.’s (GoHealth) $914 million July 2020 initial

public offering. In addition to the underwriters, the

defendants include GoHealth, certain of its officers and

directors and certain of its shareholders. GS&Co.

underwrote 11,540,550 shares of common stock representing

an aggregate offering price of approximately $242 million.

On February 25, 2021, the plaintiffs filed a consolidated

complaint. On April 5, 2022, the defendants’ motion to

dismiss the consolidated complaint was denied. On

September 23, 2022, the plaintiffs moved for class

certification.

Array Technologies, Inc. GS&Co. is among the

underwriters named as defendants in a putative securities

class action filed on May 14, 2021 in the U.S. District Court

for the Southern District of New York relating to Array

Technologies, Inc.’s (Array) $1.2 billion October 2020 initial

public offering of common stock, $1.3 billion December 2020

offering of common stock and $993 million March 2021

offering of common stock. In addition to the underwriters,

the defendants include Array and certain of its officers and

directors. GS&Co. underwrote an aggregate of 31,912,213

shares of common stock in the three offerings representing an

aggregate offering price of approximately $877 million. On

December 7, 2021, the plaintiffs filed an amended

consolidated complaint. On October 17, 2022, the defendants

moved to dismiss the amended consolidated complaint.

ContextLogic Inc. GS&Co. is among the underwriters

named as defendants in putative securities class actions filed

beginning on May 17, 2021 and consolidated in the U.S.

District Court for the Northern District of California,

relating to ContextLogic Inc.’s (ContextLogic) $1.1 billion

December 2020 initial public offering of common stock. In

addition to the underwriters, the defendants include

ContextLogic and certain of its officers and directors.

GS&Co. underwrote 16,169,000 shares of common stock

representing an aggregate offering price of approximately

$388 million. On July 15, 2022, the plaintiffs filed a

consolidated amended complaint. On September 16, 2022,

the defendants moved to dismiss the consolidated amended

complaint.

DiDi Global Inc. Goldman Sachs (Asia) L.L.C. (GS Asia) is

among the underwriters named as defendants in putative

securities class actions filed beginning on July 6, 2021 in the

U.S. District Courts for the Southern District of New York

and the Central District of California and New York

Supreme Court, County of New York, relating to DiDi

Global Inc.’s (DiDi) $4.4 billion June 2021 initial public

offering of American Depositary Shares (ADS). In addition to

the underwriters, the defendants include DiDi and certain of

its officers and directors. GS Asia underwrote 104,554,000

ADS representing an aggregate offering price of

approximately $1.5 billion. On September 22, 2021, plaintiffs

in the California action voluntarily dismissed their claims

without prejudice. On May 5, 2022, plaintiffs in the

consolidated federal action filed a second consolidated

amended complaint, which includes allegations of violations

of Sections 10(b) and 20A of the Exchange Act against the

underwriter defendants. On June 3, 2022, the defendants

moved to dismiss the second consolidated amended

complaint.

Vroom Inc. GS&Co. is among the underwriters named as

defendants in an amended complaint for a putative securities

class action filed on October 4, 2021 in the U.S. District

Court for the Southern District of New York relating to

Vroom Inc.’s (Vroom) approximately $589 million September

2020 public offering of common stock. In addition to the

underwriters, the defendants include Vroom and certain of its

officers and directors. GS&Co. underwrote 3,886,819 shares

of common stock representing an aggregate offering price of

approximately $212 million. On December 20, 2021, the

defendants served a motion to dismiss the consolidated

complaint.

Zymergen Inc. GS&Co. is among the underwriters named

as defendants in a putative securities class action filed on

August 4, 2021 in the U.S. District Court for the Northern

District of California relating to Zymergen Inc.’s (Zymergen)

$575 million April 2021 initial public offering of common

stock. In addition to the underwriters, the defendants include

Zymergen and certain of its officers and directors. GS&Co.

underwrote 5,750,345 shares of common stock representing

an aggregate offering price of approximately $178 million.

On February 24, 2022, the plaintiffs filed an amended

complaint, and on November 29, 2022, the court granted in

part and denied in part the defendants' motion to dismiss the

amended complaint, denying dismissal of the claims for

violations of Section 11 of the Securities Act.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Goldman Sachs 2022 Form 10-K 215

Waterdrop Inc. GS Asia is among the underwriters named

as defendants in a putative securities class action filed on

September 14, 2021 in the U.S. District Court for the

Southern District of New York relating to Waterdrop Inc.’s

(Waterdrop) $360 million May 2021 initial public offering of

ADS. In addition to the underwriters, the defendants include

Waterdrop and certain of its officers and directors. GS Asia

underwrote 15,300,000 ADS representing an aggregate

offering price of approximately $184 million. On February

21, 2022, the plaintiffs filed an amended complaint, and on

February 3, 2023, the court granted the defendants' motion to

dismiss the amended complaint.

Sea Limited. GS Asia is among the underwriters named as

defendants in putative securities class actions filed on

February 11, 2022 and June 17, 2022, respectively, in New

York Supreme Court, County of New York, relating to Sea

Limited’s approximately $4.0 billion September 2021 public

offering of ADS and approximately $2.9 billion September

2021 public offering of convertible senior notes, respectively.

In addition to the underwriters, the defendants include Sea

Limited, certain of its officers and directors and certain of its

shareholders. GS Asia underwrote 8,222,500 ADS

representing an aggregate offering price of approximately

$2.6 billion and convertible senior notes representing an

aggregate offering price of approximately $1.9 billion. On

August 3, 2022, the actions were consolidated, and on August

9, 2022, the plaintiffs filed a consolidated amended

complaint. The defendants had previously moved to dismiss

the action on July 15, 2022, with the parties stipulating that

the motion would apply to the consolidated amended

complaint.

Rivian Automotive Inc. GS&Co. is among the

underwriters named as defendants in a putative securities

class action filed on March 7, 2022 in the U.S. District Court

for the Central District of California relating to Rivian

Automotive Inc.’s (Rivian) approximately $13.7 billion

November 2021 initial public offering. In addition to the

underwriters, the defendants include Rivian and certain of its

officers and directors. GS&Co. underwrote 44,733,050 shares

of common stock representing an aggregate offering price of

approximately $3.5 billion. On July 22, 2022, the plaintiffs

filed a consolidated complaint, and on August 29, 2022, the

defendants moved to dismiss the consolidated complaint.

Natera Inc. GS&Co. is among the underwriters named as

defendants in putative securities class actions in New York

Supreme Court, County of New York and the U.S. District

Court for the Western District of Texas filed on March 10,

2022 and October 7, 2022, respectively, relating to Natera

Inc.’s (Natera) approximately $585 million July 2021 public

offering of common stock. In addition to the underwriters,

the defendants include Natera and certain of its officers and

directors. GS&Co. underwrote 1,449,000 shares of common

stock representing an aggregate offering price of

approximately $164 million. On July 15, 2022, the parties in

the state court action filed a stipulation and proposed order

approving the discontinuance of the action without prejudice.

On December 16, 2022, the defendants moved to dismiss the

amended complaint in the federal action.

Robinhood Markets, Inc. GS&Co. is among the

underwriters named as defendants in a putative securities

class action filed on December 17, 2021 in the U.S. District

Court for the Northern District of California relating to

Robinhood Markets, Inc.’s (Robinhood) approximately $2.2

billion July 2021 initial public offering. In addition to the

underwriters, the defendants include Robinhood and certain

of its officers and directors. GS&Co. underwrote 18,039,706

shares of common stock representing an aggregate offering

price of approximately $686 million. On June 20, 2022, the

plaintiffs filed an amended complaint. On August 18, 2022,

the defendants moved to dismiss the amended complaint.

ON24, Inc. GS&Co. is among the underwriters named as

defendants in a putative securities class action filed on

November 3, 2021 in the U.S. District Court for the Northern

District of California relating to ON24, Inc.’s (ON24)

approximately $492 million February 2021 initial public

offering of common stock. In addition to the underwriters,

the defendants include ON24 and certain of its officers and

directors, including a director who was a Managing Director

of GS&Co. at the time of the initial public offering. GS&Co.

underwrote 3,616,785 shares of common stock representing

an aggregate offering price of approximately $181 million.

On March 18, 2022, the plaintiffs filed a consolidated

complaint. On May 2, 2022, the defendants moved to dismiss

the consolidated complaint.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

216

Goldman Sachs 2022 Form 10-K

Riskified Ltd. GS&Co. is among the underwriters named as

defendants in a putative securities class action filed on May 2,

2022 in the U.S. District Court for the Southern District of

New York relating to Riskified Ltd.’s (Riskified)

approximately $423million July 2021 initial public offering.

In addition to the underwriters, the defendants include

Riskified and certain of its officers and directors. GS&Co.

underwrote 6,981,128 shares of common stock representing

an aggregate offering price of approximately $147 million.

On November 28, 2022, the plaintiffs filed a second amended

complaint, and on January 20, 2023, the defendants moved to

dismiss the second amended complaint.

Oscar Health, Inc. GS&Co. is among the underwriters

named as defendants in a putative securities class action filed

on May 12, 2022 in the U.S. District Court for the Southern

District of New York relating to Oscar Health, Inc.’s (Oscar

Health) approximately $1.4billion March 2021 initial public

offering. In addition to the underwriters, the defendants

include Oscar Health and certain of its officers and directors.

GS&Co. underwrote 12,760,633 shares of common stock

representing an aggregate offering price of approximately

$498 million. On December 5, 2022, the plaintiffs filed an

amended complaint.

Oak Street Health, Inc. GS&Co. is among the underwriters

named as defendants in an amended complaint for a putative

securities class action filed on May 25, 2022 in the U.S.

District Court for the Northern District of Illinois relating to

Oak Street Health, Inc.’s (Oak Street) $377 million August

2020 initial public offering, $298 million December 2020

secondary equity offering, $691 million February 2021

secondary equity offering and $747 million May 2021

secondary equity offering. In addition to the underwriters,

the defendants include Oak Street, certain of its officers and

directors and certain of its shareholders. GS&Co.

underwrote 4,157,103 shares of common stock in the August

2020 initial public offering representing an aggregate offering

price of approximately $87 million, 1,503,944 shares of

common stock in the December 2020 secondary equity

offering representing an aggregate offering price of

approximately $69 million, 3,083,098 shares of common

stock in the February 2021 secondary equity offering

representing an aggregate offering price of approximately

$173 million and 3,013,065 shares of common stock in the

May 2021 secondary equity offering representing an

aggregate offering price of approximately $187 million. On

February 10, 2023, the court granted in part and denied in

part the defendants’ motion to dismiss, dismissing the claim

alleging a violation of Section 12(a)(2) of the Securities Act

and, with respect to the May 2021 secondary equity offering

only, the claim alleging a violation of Section 11 of the

Securities Act, but declining to dismiss the remaining claims.

Reata Pharmaceuticals, Inc. GS&Co. is among the

underwriters named as defendants in a consolidated amended

complaint for a putative securities class action filed on June

21, 2022 in the U.S. District Court for the Eastern District of

Texas relating to Reata Pharmaceuticals, Inc.’s (Reata)

approximately $282million December 2020 public offering of

common stock. In addition to the underwriters, the

defendants include Reata and certain of its officers and

directors. GS&Co. underwrote 1,000,000 shares of common

stock representing an aggregate offering price of

approximately $141 million. On September 7, 2022, the

defendants moved to dismiss the consolidated amended

complaint.

Bright Health Group, Inc. GS&Co. is among the

underwriters named as defendants in an amended complaint

for a putative securities class action filed on June 24, 2022 in

the U.S. District Court for the Eastern District of New York

relating to Bright Health Group, Inc.’s (Bright Health)

approximately $924million June 2021 initial public offering

of common stock. In addition to the underwriters, the

defendants include Bright Health and certain of its officers

and directors. GS&Co. underwrote 11,297,000 shares of

common stock representing an aggregate offering price of

approximately $203 million. On October 12, 2022, the

defendants moved to dismiss the amended complaint.

17 Education & Technology Group Inc. GS Asia is among

the underwriters named as defendants in a putative securities

class action filed on July 19, 2022 in the U.S. District Court

for the Central District of California and transferred to the

U.S. District Court for the Southern District of New York in

November 2022 relating to 17 Education & Technology

Group Inc.’s (17EdTech) approximately $331 million

December 2020 initial public offering of ADS. In addition to

the underwriters, the defendants include 17EdTech and

certain of its officers and directors. GS Asia underwrote

12,604,000 ADS representing an aggregate offering price of

approximately $132 million. On January 31, 2023, the

plaintiffs filed an amended complaint.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Goldman Sachs 2022 Form 10-K 217

LifeStance Health Group, Inc. GS&Co. is among the

underwriters named as defendants in a putative securities

class action filed on August 10, 2022 in the U.S. District

Court for the Southern District of New York relating to

LifeStance Health Group, Inc.’s (LifeStance) approximately

$828 million June 2021 initial public offering of common

stock. In addition to the underwriters, the defendants include

LifeStance and certain of its officers and directors. GS&Co.

underwrote 10,580,000 shares of common stock representing

an aggregate offering price of approximately $190 million.

On December 19, 2022, the plaintiffs filed an amended

complaint, and on January 18, 2023, the defendants moved to

dismiss the amended complaint.

MINISO Group Holding Limited. GS Asia is among the

underwriters named as defendants in a putative securities

class action filed on August 17, 2022 in the U.S. District

Court for the Central District of California and transferred to

the U.S. District Court for the Southern District of New York

on November 18, 2022 relating to MINISO Group Holding

Limited’s (MINISO) approximately $656 million October

2020 initial public offering of ADS. In addition to the

underwriters, the defendants include MINISO and certain of

its officers and directors. GS Asia underwrote 16,408,093

ADS representing an aggregate offering price of

approximately $328million.

Coupang, Inc. GS&Co. is among the underwriters named as

defendants in a putative securities class action filed on August

26, 2022 in the U.S. District Court for the Southern District of

New York relating to Coupang, Inc.’s (Coupang)

approximately $4.6billion March 2021 initial public offering

of common stock. In addition to the underwriters, the

defendants include Coupang and certain of its officers and

directors. GS&Co. underwrote 42,900,000 shares of common

stock representing an aggregate offering price of

approximately $1.5billion.

Yatsen Holding Limited. GS Asia is among the

underwriters named as defendants in a putative securities

class action filed on September 23, 2022 in the U.S. District

Court for the Southern District of New York relating to

Yatsen Holding Limited’s (Yatsen) approximately

$617 million November 2020 initial public offering of ADS.

In addition to the underwriters, the defendants include

Yatsen, certain of its officers and directors and one of its

shareholders. GS Asia underwrote 22,912,500 ADS

representing an aggregate offering price of approximately

$241million.

Rent the Runway, Inc. GS&Co. is among the underwriters

named as defendants in a putative securities class action filed

on November 14, 2022 in the U.S. District Court for the

Eastern District of New York relating to Rent the Runway,

Inc.’s (Rent the Runway) $357 million October 2021 initial

public offering of common stock. In addition to the

underwriters, the defendants include Rent the Runway and

certain of its officers and directors. GS&Co. underwrote

5,254,304 shares of common stock representing an aggregate

offering price of approximately $110million.

Opendoor Technologies Inc. GS&Co. is among the

underwriters named as defendants in a putative securities

class action filed on November 22, 2022 in the U.S. District

Court for the District of Arizona relating to, among other

things, Opendoor Technologies Inc.’s (Opendoor)

approximately $886million February 2021 public offering of

common stock. In addition to the underwriters, the

defendants include Opendoor and certain of its officers and

directors. GS&Co. underwrote 10,173,401 shares of common

stock representing an aggregate offering price of

approximately $275million.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

218

Goldman Sachs 2022 Form 10-K

FIGS, Inc. GS&Co. is among the underwriters named as

defendants in a putative securities class action filed on

December 8, 2022 in the U.S. District Court for the Central

District of California relating to FIGS, Inc.’s (FIGS)

approximately $668million May 2021 initial public offering

and approximately $413 million September 2021 secondary

equity offering. In addition to the underwriters, the

defendants include FIGS, certain of its officers and directors

and certain of its shareholders. GS&Co. underwrote

9,545,073 shares of common stock in the May 2021 initial

public offering representing an aggregate offering price of

approximately $210million and 3,179,047 shares of common

stock in the September 2021 secondary equity offering

representing an aggregate offering price of approximately

$128million.

Silvergate Capital Corporation. GS&Co. is among the

underwriters named as defendants in a putative securities

class action filed on January 19, 2023 in the U.S. District

Court for the Southern District of California relating to

Silvergate Capital Corporation’s (Silvergate) approximately

$288million January 2021 public offering of common stock

and approximately $552 million December 2021 public

offering of common stock. In addition to the underwriters,

the defendants include Silvergate and certain of its officers

and directors. GS&Co. underwrote 1,711,313 shares of

common stock in the January 2021 public offering of

common stock representing an aggregate offering price of

approximately $108million and 1,375,397 shares of common

stock in the December 2021 public offering of common stock

representing an aggregate offering price of approximately

$199million.

Centessa Pharmaceuticals plc. GS&Co. is among the

underwriters named as defendants in an amended complaint

for a putative securities class action filed on February 10,

2023 in the U.S. District Court for the Southern District of

New York relating to Centessa Pharmaceuticals plc’s

(Centessa) approximately $380 million May 2021 initial

public offering of ADS. In addition to the underwriters, the

defendants include Centessa and certain of its officers and

directors. GS&Co. underwrote 6,072,000 ADS representing

an aggregate offering price of approximately $121million.

Investment Management Services

Group Inc. and certain of its affiliates are parties to various

civil litigation and arbitration proceedings and other disputes

with clients relating to losses allegedly sustained as a result of

the firm’s investment management services. These claims

generally seek, among other things, restitution or other

compensatory damages and, in some cases, punitive damages.

Securities Lending Antitrust Litigation

Group Inc. and GS&Co. were among the defendants named

in a putative antitrust class action and three individual

actions relating to securities lending practices filed in the U.S.

District Court for the Southern District of New York

beginning in August 2017. The complaints generally assert

claims under federal and state antitrust law and state

common law in connection with an alleged conspiracy among

the defendants to preclude the development of electronic

platforms for securities lending transactions. The individual

complaints also assert claims for tortious interference with

business relations and under state trade practices law and, in

the second and third individual actions, unjust enrichment

under state common law. The complaints seek declaratory

and injunctive relief, as well as unspecified amounts of

compensatory, treble, punitive and other damages. Group

Inc. was voluntarily dismissed from the putative class action

on January 26, 2018. Defendants’ motion to dismiss the class

action complaint was denied on September 27, 2018.

Defendants’ motion to dismiss the first individual action was

granted on August 7, 2019. On September 30, 2021, the

defendants’ motion to dismiss the second and third individual

actions, which were consolidated in June 2019, was granted.

On October 25, 2021, the plaintiff in the second individual

action appealed to the U.S. Court of Appeals for the Second

Circuit. On June 30, 2022, the Magistrate Judge

recommended that the plaintiffs’ motion for class

certification in the putative class action be granted in part

and denied in part. On August 15, 2022, the plaintiffs and

defendants filed objections to the Magistrate Judge’s report

and recommendation with the district court.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Goldman Sachs 2022 Form 10-K 219

Variable Rate Demand Obligations Antitrust Litigation

Group Inc. and GS&Co. were among the defendants named

in a putative class action relating to variable rate demand

obligations (VRDOs), filed beginning in February 2019 under

separate complaints and consolidated in the U.S. District

Court for the Southern District of New York. The

consolidated amended complaint, filed on May 31, 2019,

generally asserts claims under federal antitrust law and state

common law in connection with an alleged conspiracy among

the defendants to manipulate the market for VRDOs. The

complaint seeks declaratory and injunctive relief, as well as

unspecified amounts of compensatory, treble and other

damages. Group Inc. was voluntarily dismissed from the

putative class action on June 3, 2019. On November 2, 2020,

the court granted in part and denied in part the defendants’

motion to dismiss, dismissing the state common law claims

against GS&Co., but denying dismissal of the federal

antitrust law claims.

GS&Co. is also among the defendants named in a related

putative class action filed on June 2, 2021 in the U.S. District

Court for the Southern District of New York. The complaint

alleges the same conspiracy in the market for VRDOs as that

alleged in the consolidated amended complaint filed on May

31, 2019, and asserts federal antitrust law, state law and state

common law claims against the defendants. The complaint

seeks declaratory and injunctive relief, as well as unspecified

amounts of compensatory, treble and other damages. On

August 6, 2021, plaintiffs in the May 31, 2019 action filed an

amended complaint consolidating the June 2, 2021 action

with the May 31, 2019 action. On September 14, 2021,

defendants filed a joint partial motion to dismiss the August

6, 2021 amended consolidated complaint. On June 28, 2022,

the court granted in part and denied in part the defendants’

motion to dismiss, dismissing the state breach of fiduciary

duty claim against GS&Co., but declining to dismiss any

portion of the federal antitrust law claims. On October 27,

2022, the plaintiffs moved for class certification.

Interest Rate Swap Antitrust Litigation

Group Inc., GS&Co., GSI, GS Bank USA and Goldman Sachs

Financial Markets, L.P. are among the defendants named in a

putative antitrust class action relating to the trading of

interest rate swaps, filed in November 2015 and consolidated

in the U.S. District Court for the Southern District of New

York. The same Goldman Sachs entities are also among the

defendants named in two antitrust actions relating to the

trading of interest rate swaps, commenced in April 2016 and

June 2018, respectively, in the U.S. District Court for the

Southern District of New York by three operators of swap

execution facilities and certain of their affiliates. These

actions have been consolidated for pretrial proceedings. The

complaints generally assert claims under federal antitrust law

and state common law in connection with an alleged

conspiracy among the defendants to preclude exchange

trading of interest rate swaps. The complaints in the

individual actions also assert claims under state antitrust law.

The complaints seek declaratory and injunctive relief, as well

as treble damages in an unspecified amount. Defendants

moved to dismiss the class and the first individual action and

the district court dismissed the state common law claims

asserted by the plaintiffs in the first individual action and

otherwise limited the state common law claim in the putative

class action and the antitrust claims in both actions to the

period from 2013 to 2016. On November 20, 2018, the court

granted in part and denied in part the defendants’ motion to

dismiss the second individual action, dismissing the state

common law claims for unjust enrichment and tortious

interference, but denying dismissal of the federal and state

antitrust claims. On March 13, 2019, the court denied the

plaintiffs’ motion in the putative class action to amend their

complaint to add allegations related to conduct from 2008 to

2012, but granted the motion to add limited allegations from

2013 to 2016, which the plaintiffs added in a fourth

consolidated amended complaint filed on March 22, 2019.

The plaintiffs in the putative class action moved for class

certification on March 7, 2019.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

220

Goldman Sachs 2022 Form 10-K

Commodities-Related Litigation

GSI is among the defendants named in putative class actions

relating to trading in platinum and palladium, filed beginning

on November 25, 2014 and most recently amended on May

15, 2017, in the U.S. District Court for the Southern District

of New York. The amended complaint generally alleges that

the defendants violated federal antitrust laws and the

Commodity Exchange Act in connection with an alleged

conspiracy to manipulate a benchmark for physical platinum

and palladium prices and seek declaratory and injunctive

relief, as well as treble damages in an unspecified amount. On

March 29, 2020, the court granted the defendants’ motions to

dismiss and for reconsideration, resulting in the dismissal of

all claims. On April 27, 2020, plaintiffs appealed to the U.S.

Court of Appeals for the Second Circuit.

GS&Co., GSI, J. Aron & Company and Metro International

Trade Services (Metro), a previously consolidated subsidiary

of Group Inc. that was sold in the fourth quarter of 2014, are

among the defendants in a number of putative class and

individual actions filed beginning on August 1, 2013 and

consolidated in the U.S. District Court for the Southern

District of New York. The complaints generally allege

violations of federal antitrust laws and state laws in

connection with the storage of aluminum and aluminum

trading. The complaints seek declaratory, injunctive and

other equitable relief, as well as unspecified monetary

damages, including treble damages. In December 2016, the

district court granted defendants’ motions to dismiss and on

August 27, 2019, the Second Circuit vacated the district

court’s dismissals and remanded the case to district court for

further proceedings. On July 23, 2020, the district court

denied the class plaintiffs’ motion for class certification, and

on December 16, 2020 the Second Circuit denied leave to

appeal the denial. On February 17, 2021, the district court

granted defendants’ motion for summary judgment with

respect to the claims of most of the individual plaintiffs. On

April 14, 2021, the plaintiffs appealed to the U.S. Court of

Appeals for the Second Circuit. On May 31, 2022, the two

remaining individual plaintiffs entered into a settlement with

the defendants. The firm has paid the full amount of its

contribution to the settlement.

In connection with the sale of Metro, the firm agreed to

provide indemnities to the buyer, including for any potential

liabilities for legal or regulatory proceedings arising out of

the conduct of Metro’s business while the firm owned it.

U.S. Treasury Securities Litigation

GS&Co. is among the primary dealers named as defendants

in several putative class actions relating to the market for

U.S. Treasury securities, filed beginning in July 2015 and

consolidated in the U.S. District Court for the Southern

District of New York. GS&Co. is also among the primary

dealers named as defendants in a similar individual action

filed in the U.S. District Court for the Southern District of

New York on August 25, 2017. The consolidated class action

complaint, filed on December 29, 2017, generally alleges that

the defendants violated antitrust laws in connection with an

alleged conspiracy to manipulate the when-issued market and

auctions for U.S. Treasury securities and that certain

defendants, including GS&Co., colluded to preclude trading

of U.S. Treasury securities on electronic trading platforms in

order to impede competition in the bidding process. The

individual action alleges a similar conspiracy regarding

manipulation of the when-issued market and auctions, as

well as related futures and options in violation of the

Commodity Exchange Act. The complaints seek declaratory

and injunctive relief, treble damages in an unspecified

amount and restitution. Defendants’ motion to dismiss was

granted on March 31, 2021. On May 14, 2021, plaintiffs filed

an amended complaint. Defendants’ motion to dismiss the

amended complaint was granted on March 31, 2022. On

April 28, 2022, plaintiffs appealed to the U.S. Court of

Appeals for the Second Circuit.

Corporate Bonds Antitrust Litigation

Group Inc. and GS&Co. are among the dealers named as

defendants in a putative class action relating to the secondary

market for odd-lot corporate bonds, filed on April 21, 2020 in

the U.S. District Court for the Southern District of New

York. The amended consolidated complaint, filed on

October 29, 2020, asserts claims under federal antitrust law

in connection with alleged anti-competitive conduct by the

defendants in the secondary market for odd-lots of corporate

bonds, and seeks declaratory and injunctive relief, as well as

unspecified monetary damages, including treble and punitive

damages and restitution. On October 25, 2021, the court

granted defendants’ motion to dismiss with prejudice. On

November 23, 2021, plaintiffs appealed to the U.S. Court of

Appeals for the Second Circuit. On November 10, 2022, the

district court denied the plaintiffs’ motion for an indicative

ruling that the judgment should be vacated because the wife

of the district judge owned stock in one of the defendants and

the district judge did not recuse himself.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Goldman Sachs 2022 Form 10-K 221

Credit Default Swap Antitrust Litigation

Group Inc., GS&Co. and GSI were among the defendants

named in a putative antitrust class action relating to the

settlement of credit default swaps, filed on June 30, 2021 in

the U.S. District Court for the District of New Mexico. The

complaint generally asserts claims under federal antitrust law

and the Commodity Exchange Act in connection with an

alleged conspiracy among the defendants to manipulate the

benchmark price used to value credit default swaps for

settlement. The complaint also asserts a claim for unjust

enrichment under state common law. The complaint seeks

declaratory and injunctive relief, as well as unspecified

amounts of treble and other damages. On November 15,

2021, the defendants filed a motion to dismiss the complaint.

On February 4, 2022, the plaintiffs filed an amended

complaint and voluntarily dismissed Group Inc. from the

action. On April 5, 2022, the defendants filed a motion to

dismiss the amended complaint.

Employment-Related Matters

On September 15, 2010, a putative class action was filed in

the U.S. District Court for the Southern District of New York

by three female former employees. The complaint, as

subsequently amended, alleges that Group Inc. and GS&Co.

have systematically discriminated against female employees

in respect of compensation, promotion and performance

evaluations. The complaint alleges a class consisting of all

female employees employed at specified levels in specified

areas by Group Inc. and GS&Co. since July 2002, and asserts

claims under federal and New York City discrimination laws.

The complaint seeks class action status, injunctive relief and

unspecified amounts of compensatory, punitive and other

damages.

On March 30, 2018, the district court certified a damages

class as to the plaintiffs’ disparate impact and treatment

claims. On September 4, 2018, the U.S. Court of Appeals for

the Second Circuit denied defendants’ petition for

interlocutory review of the district court’s class certification

decision and subsequently denied defendants’ petition for

rehearing. On September 27, 2018, plaintiffs advised the

district court that they would not seek to certify a class for

injunctive and declaratory relief. On March 26, 2020, the

Magistrate Judge in the district court granted in part a

motion to compel arbitration as to class members who are

parties to certain agreements with Group Inc. and/or

GS&Co. in which they agreed to arbitrate employment-

related disputes. On April 16, 2020, plaintiffs submitted

objections to the Magistrate Judge’s order and defendants

submitted conditional objections in the event that the district

judge overturned any portion of the Magistrate Judge’s

order. On July 22, 2021, defendants filed a motion to

decertify the class. On September 15, 2021, the district court

affirmed the decision of the Magistrate Judge to compel

arbitration. On March 17, 2022, the district court denied the

plaintiffs’ motion for partial summary judgment as to a

portion of the disparate impact claim, granted in part and

denied in part the defendants’ motion for summary judgment

as to plaintiffs’ disparate impact and treatment claims, denied

the defendants’ motion to decertify the class, and granted in

part and denied in part the parties’ respective motions to

preclude certain expert testimony. On August 22, 2022, the

district court granted in part and denied in part the

defendants’ motion for reconsideration of the portion of its

March 17, 2022 decision that denied the defendants’ motion

to decertify the class, denying the defendants’ motion to

decertify the class but narrowing the class definition. Trial is

scheduled to commence on June 7, 2023.

Consumer Investigation and Review

The firm is cooperating with the Consumer Financial

Protection Bureau and other governmental bodies relating to

investigations and/or inquiries concerning GS Bank USA’s

credit card account management practices and is providing

information regarding the application of refunds, crediting of

nonconforming payments, billing error resolution,

advertisements, reporting to credit bureaus, and any other

consumer-related information requested by them.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

222

Goldman Sachs 2022 Form 10-K

Regulatory Investigations and Reviews and Related

Litigation

Group Inc. and certain of its affiliates are subject to a number

of other investigations and reviews by, and in some cases

have received subpoenas and requests for documents and

information from, various governmental and regulatory

bodies and self-regulatory organizations and litigation and

shareholder requests relating to various matters relating to

the firm’s businesses and operations, including:

• The securities offering process and underwriting practices;

• The firm’s investment management and financial advisory

services;

• Conflicts of interest;

• Research practices, including research independence and

interactions between research analysts and other firm

personnel, including investment banking personnel, as well

as third parties;

• Transactions involving government-related financings and

other matters, municipal securities, including wall-cross

procedures and conflict of interest disclosure with respect

to state and municipal clients, the trading and structuring

of municipal derivative instruments in connection with

municipal offerings, political contribution rules, municipal

advisory services and the possible impact of credit default

swap transactions on municipal issuers;

• Consumer lending, as well as residential mortgage lending,

servicing and securitization, and compliance with related

consumer laws;

• The offering, auction, sales, trading and clearance of

corporate and government securities, currencies,

commodities and other financial products and related sales

and other communications and activities, as well as the

firm’s supervision and controls relating to such activities,

including compliance with applicable short sale rules,

algorithmic, high-frequency and quantitative trading, the

firm’s U.S. alternative trading system (dark pool), futures

trading, options trading, when-issued trading, transaction

reporting, technology systems and controls,

communications recordkeeping and recording, securities

lending practices, prime brokerage activities, trading and

clearance of credit derivative instruments and interest rate

swaps, commodities activities and metals storage, private

placement practices, allocations of and trading in

securities, and trading activities and communications in

connection with the establishment of benchmark rates,

such as currency rates;

• Compliance with the FCPA;

• The firm’s hiring and compensation practices;

• The firm’s system of risk management and controls; and

• Insider trading, the potential misuse and dissemination of

material nonpublic information regarding corporate and

governmental developments and the effectiveness of the

firm’s insider trading controls and information barriers.

The firm is cooperating with all such governmental and

regulatory investigations and reviews.

Note 28.

Employee Benefit Plans

The firm sponsors various pension plans and certain other

postretirement benefit plans, primarily healthcare and life

insurance. The firm also provides certain benefits to former

or inactive employees prior to retirement.

Defined Benefit Pension Plans and Postretirement

Plans

Employees of certain non-U.S. subsidiaries participate in

various defined benefit pension plans. These plans generally

provide benefits based on years of credited service and a

percentage of eligible compensation. The firm maintains a

defined benefit pension plan for certain U.K. employees. As

of April 2008, the U.K. defined benefit plan was closed to

new participants and frozen for existing participants as of

March 31, 2016. The non-U.S. plans do not have a material

impact on the firm’s consolidated results of operations.

The firm also maintains a defined benefit pension plan for

substantially all U.S. employees hired prior to November 1,

2003. As of November 2004, this plan was closed to new

participants and frozen for existing participants. In addition,

the firm maintains unfunded postretirement benefit plans

that provide medical and life insurance for eligible retirees

and their dependents covered under these programs. These

plans do not have a material impact on the firm’s

consolidated results of operations.

The firm recognizes the funded status of its defined benefit

pension and postretirement plans, measured as the difference

between the fair value of the plan assets and the benefit

obligation, in the consolidated balance sheets. As of

December 2022, other assets included $111million (related to

overfunded pension plans) and other liabilities included

$337 million related to these plans. As of December 2021,

other assets included $411 million (related to overfunded

pension plans) and other liabilities included $426 million

related to these plans.

Defined Contribution Plans

The firm contributes to employer-sponsored U.S. and non-

U.S. defined contribution plans. The firm's contribution to

these plans was $378million for 2022, $274million for 2021

and $261million for 2020.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Goldman Sachs 2022 Form 10-K 223

Note 29.

Employee Incentive Plans

The cost of employee services received in exchange for a

share-based award is generally measured based on the grant-

date fair value of the award. Share-based awards that do not

require future service (i.e., vested awards, including awards

granted to retirement-eligible employees) are expensed

immediately. Share-based awards that require future service

are amortized over the relevant service period. Forfeitures are

recorded when they occur.

Cash dividend equivalents paid on RSUs are generally

charged to retained earnings. If RSUs that require future

service are forfeited, the related dividend equivalents

originally charged to retained earnings are reclassified to

compensation expense in the period in which forfeiture

occurs.

The firm generally issues new shares of common stock upon

delivery of share-based awards. In limited cases, as outlined

in the applicable award agreements, the firm may cash settle

share-based compensation awards accounted for as equity

instruments. For these awards, additional paid-in capital is

adjusted to the extent of the difference between the value of

the award at the time of cash settlement and the grant-date

value of the award. The tax effect related to the settlement of

share-based awards and payments of dividend equivalents is

recorded in income tax benefit or expense.

Stock Incentive Plan

The firm sponsors a stock incentive plan, The Goldman

Sachs Amended and Restated Stock Incentive Plan (2021)

(2021 SIP), which provides for grants of RSUs, restricted

stock, dividend equivalent rights, incentive stock options,

nonqualified stock options, stock appreciation rights, and

other share-based awards, each of which may be subject to

terms and conditions, including performance or market

conditions. On April 29, 2021, shareholders approved the

2021 SIP. The 2021 SIP is a successor to several predecessor

stock incentive plans, the first of which was adopted on April

30, 1999, and each of which was approved by the firm’s

shareholders.

As of December 2022, 60.8million shares were available to be

delivered pursuant to awards granted under the 2021 SIP. If

any shares of common stock underlying awards granted

under the 2021 SIP or awards granted under predecessor

stock incentive plans are not delivered because such awards

are forfeited, terminated or canceled, or if shares of common

stock underlying such awards are surrendered or withheld to

satisfy any obligation of the grantee (including taxes), those

shares will become available to be delivered pursuant to

awards granted under the 2021 SIP. Shares available to be

delivered under the 2021 SIP also are subject to adjustment

for certain events or changes in corporate structure as

provided under the 2021 SIP. The 2021 SIP is scheduled to

terminate on the date of the annual meeting of shareholders

that occurs in 2025.

Restricted Stock Units

The firm grants RSUs (including RSUs subject to

performance or market conditions) to employees, which are

generally valued based on the closing price of the underlying

shares on the date of grant, after taking into account a

liquidity discount for any applicable post-vesting and delivery

transfer restrictions. The value of equity awards also

considers the impact of material non-public information, if

any, that the firm expects to make available shortly following

grant. RSUs generally vest and underlying shares of common

stock deliver (net of required withholding tax) as outlined in

the applicable award agreements. Award agreements

generally provide that vesting is accelerated in certain

circumstances, such as on retirement, death, disability and, in

certain cases, conflicted employment. Delivery of the

underlying shares of common stock is conditioned on the

grantees satisfying certain vesting and other requirements

outlined in the award agreements. RSUs not subject to

performance or market conditions generally vest and deliver

over a three-year period.

RSUs that are subject to performance or market conditions

generally deliver after the end of a three- to five-year period.

For awards that are subject to performance or market

conditions, generally the final award is adjusted from zero up

to 150% of the original grant based on the extent to which

those conditions are satisfied. Dividend equivalents that

accrue on these awards are paid when the awards settle.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

224

Goldman Sachs 2022 Form 10-K

The table below presents the 2022 activity related to stock

settled RSUs.

Weighted Average

Grant-Date Fair Value of

Restricted Stock Restricted Stock

Units Outstanding Units Outstanding

Future No Future Future No Future

Service Service Service Service

Required Required Required Required

Beginning balance 4,043,074 15,933,696 $ 255.08 $ 228.14

Granted 5,478,475 8,660,927 $ 315.33 $ 318.03

Forfeited (606,404) (260,799) $ 292.38 $ 261.99

Delivered –

(10,633,955)

$ – $ 229.81

Vested (3,626,923) 3,626,923 $ 277.07 $ 277.07

Ending balance 5,288,222 17,326,792 $ 298.14 $ 281.78

In the table above:

• The weighted average grant-date fair value of RSUs

granted was $316.98 during 2022, $264.57 during 2021 and

$220.45 during 2020. The grant-date fair value of these

RSUs included an average liquidity discount of 6.0%

during 2022, 10.2% during 2021 and 10.1% during 2020, to

reflect post-vesting and delivery transfer restrictions,

generally of 1 year for 2022, and up to 4 years for both 2021

and 2020.

• The aggregate fair value of awards that vested was

$3.91 billion during 2022, $2.64 billion during 2021 and

$2.01billion during 2020.

• The ending balance included restricted stock subject to

future service requirements of 357,367 shares as of

December 2022 and 47,719 shares as of December 2021.

• The ending balance included RSUs subject to future service

requirements and performance or market conditions of

618,248 RSUs as of December 2022 and 322,935 RSUs as of

December 2021, and the maximum amount of such RSUs

that may be earned was 914,441 RSUs as of December 2022

and 387,508 RSUs as of December 2021.

• The ending balance also included RSUs not subject to

future service requirements but subject to performance

conditions of 1,457,702 RSUs as of December 2022 and

590,453 RSUs as of December 2021, and the maximum

amount of such RSUs that may be earned was 2,186,553

RSUs as of December 2022 and 885,680 RSUs as of

December 2021.

In relation to 2022 year-end, during the first quarter of 2023,

the firm granted to its employees 6.2million RSUs (of which

2.4 million RSUs require future service as a condition for

delivery of the related shares of common stock). These RSUs

are subject to additional conditions as outlined in the award

agreements. Shares underlying these RSUs, net of required

withholding tax, generally deliver over a three-year period.

These awards are generally subject to a one-year post-vesting

and delivery transfer restriction. These awards are not

included in the table above.

As of December 2022, there was $860 million of total

unrecognized compensation cost related to non-vested share-

based compensation arrangements. This cost is expected to

be recognized over a weighted average period of 1.86 years.

In addition, there is unrecognized compensation cost related

to share-based compensation arrangements subject to

performance conditions. The maximum payout related to

these awards is $124 million. This cost is expected to be

recognized over a weighted average period of 1.92 years.

The table below presents the share-based compensation and

the related excess tax benefit.

Year Ended December

$ in millions 2022 2021 2020

Share-based compensation $ 4,107 $ 2,553 $ 1,985

Excess net tax benefit for share-based awards $ 324 $ 196 $ 120

In the table above, excess net tax benefit for share-based

awards includes the net tax benefit on dividend equivalents

paid on RSUs and the delivery of common stock underlying

share-based awards.

Overrides

The firm shares a portion of its overrides related to

investment management services with approximately 800

employees. The fair value of these overrides is recognized as

compensation expense over the vesting period. Such expense

was $493 million for 2022, $547 million for 2021 and

$141million for 2020.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Goldman Sachs 2022 Form 10-K 225

Note 30.

Parent Company

Group Inc. – Condensed Statements of Earnings

Year Ended December

$ in millions 2022 2021 2020

Revenues

Dividends from subsidiaries and other affiliates:

Bank $ 101 $ 16,990 $ 40

Nonbank 6,243 15,562 11,860

Other revenues (3,590) 529 774

Total non-interest revenues 2,754 33,081 12,674

Interest income 8,367 3,695 4,020

Interest expense 9,428 4,570 5,861

Net interest loss (1,061) (875) (1,841)

Total net revenues 1,693 32,206 10,833

Operating expenses

Compensation and benefits 328 750 367

Other expenses 685 1,005 3,339

Total operating expenses 1,013 1,755 3,706

Pre-tax earnings 680 30,451 7,127

Benefit for taxes (1,398) (551) (696)

Undistributed earnings/(loss) of subsidiaries

and other affiliates 9,183 (9,367) 1,636

Net earnings 11,261 21,635 9,459

Preferred stock dividends 497 484 544

Net earnings applicable to common shareholders

$ 10,764

$ 21,151 $ 8,915

Supplemental Disclosures:

In the condensed statements of earnings above, revenues and

expenses included the following with subsidiaries and other

affiliates:

• Dividends from bank subsidiaries included cash dividends

of $97 million for 2022, $16.99 billion for 2021 and $38

million for 2020.

• Dividends from nonbank subsidiaries and other affiliates

included cash dividends of $6.14 billion for 2022, $15.14

billion for 2021 and $11.32 billion for 2020.

• Other revenues included $(3.34) billion for 2022, $(1.01)

billion for 2021 and $2.62 billion for 2020.

• Interest income included $7.47 billion for 2022, $3.39

billion for 2021 and $3.68 billion for 2020.

• Interest expense included $3.80 billion for 2022, $1.24

billion for 2021 and $1.73 billion for 2020.

• Other expenses included $116 million for 2022, $113

million for 2021 and $100 million for 2020.

Group Inc.’s other comprehensive income/(loss) was $(942)

million for 2022, $(634) million for 2021 and $50 million for

2020.

Group Inc. – Condensed Balance Sheets

As of December

$ in millions 2022 2021

Assets

Cash and cash equivalents:

With third-party banks $ 35 $ 47

With subsidiary bank 46 2

Loans to and receivables from subsidiaries:

Bank 3,545 1,024

Nonbank ($4,825 and $7,638 at fair value) 259,402 273,416

Investments in subsidiaries and other affiliates:

Bank 49,533 43,021

Nonbank 85,058 75,883

Trading assets (at fair value) 5,431 4,663

Investments ($23,894 and $22,525 at fair value) 69,483 26,078

Other assets 6,576 6,098

Total assets $ 479,109 $ 430,232

Liabilities and shareholders’ equity

Repurchase agreements with subsidiaries (at fair value)

$ 66,839 $ –

Secured borrowings with subsidiaries 16,749 50,805

Payables to subsidiaries 510 1,357

Trading liabilities (at fair value) 2,544 1,116

Unsecured short-term borrowings:

With third parties ($5,002 and $1,215 at fair value) 23,823 11,127

With subsidiaries 4,328 3,687

Unsecured long-term borrowings:

With third parties ($22,422 and $17,690 at fair value)

185,972 208,796

With subsidiaries 57,565 40,405

Other liabilities 3,590 3,013

Total liabilities 361,920 320,306

Commitments, contingencies and guarantees

Shareholders' equity

Preferred stock 10,703 10,703

Common stock 9 9

Share-based awards 5,696 4,211

Additional paid-in capital 59,050 56,396

Retained earnings 139,372 131,811

Accumulated other comprehensive loss (3,010) (2,068)

Stock held in treasury, at cost (94,631) (91,136)

Total shareholders’ equity 117,189 109,926

Total liabilities and shareholders’ equity $ 479,109 $ 430,232

Supplemental Disclosures:

Goldman Sachs Funding LLC (Funding IHC), a wholly-

owned, direct subsidiary of Group Inc., has provided Group

Inc. with a committed line of credit that allows Group Inc. to

draw sufficient funds to meet its cash needs in the ordinary

course of business.

Trading assets included derivative contracts with subsidiaries

of $2.17 billion as of December 2022 and $1.38 billion as of

December 2021.

Trading liabilities included derivative contracts with

subsidiaries of $2.54 billion as of December 2022 and $1.12

billion as of December 2021.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

226

Goldman Sachs 2022 Form 10-K

As of December 2022, unsecured long-term borrowings with

subsidiaries by maturity date are $56.10 billion in 2024, $534

million in 2025, $62 million in 2026, $103 million in 2027 and

$770 million in 2028-thereafter.

Group Inc. – Condensed Statements of Cash Flows

Year Ended December

$ in millions 2022 2021 2020

Cash flows from operating activities

Net earnings $ 11,261 $ 21,635 $ 9,459

Adjustments to reconcile net earnings to net

cash provided by operating activities:

Undistributed (earnings)/loss of

subsidiaries and other affiliates (9,183) 9,367 (1,636)

Depreciation and amortization 9 9 6

Deferred income taxes (1,523) (241) (160)

Share-based compensation 378 335 127

Gain on extinguishment of

unsecured borrowings – – (1)

Changes in operating assets and liabilities:

Collateralized transactions (excluding

secured borrowings, net) 66,839 – 332

Trading assets (23,451) (10,273) 3,484

Trading liabilities 1,428 796 (97)

Other, net 5,933 (5,213) (1,492)

Net cash provided by operating activities 51,691 16,415 10,022

Cash flows from investing activities

Purchase of property, leasehold

improvements and equipment (64) (13) (26)

Repayments/(issuances) of short-term loans

to subsidiaries, net 2,210 (9,951) 7,021

Issuance of term loans to subsidiaries (1,859) (37,260) (32,472)

Repayments of term loans by subsidiaries 2,311 10,059 29,568

Purchase of investments (47,247) (16,964) (3,767)

Sales/paydowns of investments 3,162 10,896 4,135

Capital contributions to subsidiaries, net (5,665) (23,978) (5,617)

Net cash used for investing activities (47,152) (67,211) (1,158)

Cash flows from financing activities

Secured borrowings with subsidiary, net (36,389) 12,346 (6,360)

Unsecured short-term borrowings, net:

With third parties 13 (683) (1,372)

With subsidiaries 27,803 7,007 12,603

Issuance of unsecured long-term borrowings 78,803 73,164 24,789

Repayment of unsecured long-term borrowings

(65,960) (31,588) (33,432)

Purchase of Trust Preferred securities – – (11)

Preferred stock redemption – (2,675) (350)

Common stock repurchased (3,500) (5,200) (1,928)

Settlement of share-based awards in

satisfaction of withholding tax requirements (1,595) (985) (830)

Dividends and dividend equivalents paid on

stock and share-based awards (3,682) (2,725) (2,336)

Issuance of preferred stock, net of costs – 2,172 349

Other financing, net – (14) –

Net cash provided by/(used for) financing

activities (4,507) 50,819 (8,878)

Net increase/(decrease) in cash and cash

equivalents 32 23 (14)

Cash and cash equivalents, beginning balance

49 26 40

Cash and cash equivalents, ending balance $ 81 $ 49 $ 26

Supplemental Disclosures:

Cash payments for interest, net of capitalized interest, were

$8.54 billion for 2022, $4.72 billion for 2021 and $5.92 billion

for 2020, and included $3.55 billion for 2022, $1.33 billion for

2021 and $1.90 billion for 2020 of payments to subsidiaries.

Cash payments/(refunds) for income taxes, net, were $2.59

billion for 2022, $3.74 billion for 2021 and $1.37 billion for

2020.

Non-cash activities during the year ended December 2022:

• Group Inc. issued $1.75billion of equity in connection with

the acquisition of GreenSky. Upon closing of the

transaction, GreenSky became a wholly-owned subsidiary

of GS Bank USA.

Non-cash activities during the year ended December 2021:

• Group Inc. exchanged $948 million of loans for additional

equity investment in its wholly-owned subsidiaries.

Non-cash activities during the year ended December 2020:

• Group Inc. exchanged $11.2 million of Trust Preferred

securities and common beneficial interests for $12.5 million

of certain of Group Inc.’s junior subordinated debt.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Goldman Sachs 2022 Form 10-K 227

Common Stock Performance

The graph and table below compare the performance of an

investment in the firm’s common stock from December 31,

2017 (the last trading day before the firm’s 2018 fiscal year)

through December 31, 2022, with the S&P 500 Index (S&P

500) and the S&P 500 Financials Index (S&P 500 Financials).

As of December

2017 2018 2019 2020 2021 2022

Group Inc.

$ 100.00

$ 66.48 $ 93.38

$ 109.70

$ 161.91

$ 149.18

S&P 500

$ 100.00

$ 95.61

$ 125.70

$ 148.81

$ 191.49

$ 156.78

S&P 500 Financials

$ 100.00

$ 86.96

$ 114.87

$ 112.84

$ 152.19

$ 136.11

The graph and table above assume $100 was invested on

December 31, 2017 in each of the firm’s common stock, the

S&P 500 and the S&P 500 Financials, and the dividends were

reinvested without payment of any commissions. The

performance shown represents past performance and should

not be considered an indication of future performance.

Statistical Disclosures

Distribution of Assets, Liabilities and Shareholders’

Equity

The tables below present information about average

balances, interest and average interest rates.

Average Balance for the

Year Ended December

$ in millions 2022 2021 2020

Assets

U.S. $ 151,152 $ 103,182 $ 55,662

Non-U.S. 107,843 95,735 71,312

Deposits with banks 258,995 198,917 126,974

U.S. 241,968 202,841 138,447

Non-U.S. 169,621 148,604 114,974

Collateralized agreements 411,589 351,445 253,421

U.S. 165,331 173,498 204,118

Non-U.S. 123,332 136,075 118,642

Trading assets 288,663 309,573 322,760

U.S. 97,221 69,893 56,167

Non-U.S. 14,696 18,573 17,156

Investments 111,917 88,466 73,323

U.S. 144,781 108,032 94,115

Non-U.S. 22,067 21,455 18,867

Loans 166,848 129,487 112,982

U.S. 95,513 98,086 57,149

Non-U.S. 64,301 55,530 45,672

Other interest-earning assets 159,814 153,616 102,821

Interest-earning assets 1,397,826 1,231,504 992,281

Cash and due from banks 7,715 10,804 10,303

Other non-interest-earning assets 137,418 128,521 116,750

Assets $ 1,542,959 $ 1,370,829 $ 1,119,334

Liabilities

U.S. $ 302,678 $ 231,967 $ 188,767

Non-U.S. 74,662 72,899 51,997

Interest-bearing deposits 377,340 304,866 240,764

U.S. 107,008 110,099 77,727

Non-U.S. 83,783 72,691 35,284

Collateralized financings 190,791 182,790 113,011

U.S. 80,950 67,734 42,213

Non-U.S. 83,657 75,763 55,119

Trading liabilities 164,607 143,497 97,332

U.S. 34,322 31,866 34,449

Non-U.S. 28,675 34,326 22,113

Short-term borrowings 62,997 66,192 56,562

U.S. 221,598 216,864 199,196

Non-U.S. 37,656 29,764 30,941

Long-term borrowings 259,254 246,628 230,137

U.S. 166,200 139,278 127,489

Non-U.S. 98,130 85,913 66,403

Other interest-bearing liabilities 264,330 225,191 193,892

Interest-bearing liabilities 1,319,319 1,169,164 931,698

Non-interest-bearing deposits 4,811 5,920 6,672

Other non-interest-bearing liabilities 102,839 94,040 89,185

Liabilities 1,426,969 1,269,124 1,027,555

Shareholders’ equity

Preferred stock 10,703 9,876 11,203

Common stock 105,287 91,829 80,576

Shareholders’ equity 115,990 101,705 91,779

Liabilities and shareholders’ equity $ 1,542,959 $ 1,370,829 $ 1,119,334

Percentage attributable to non-U.S. operations

Interest-earning assets 35.90% 38.65% 38.96%

Interest-bearing liabilities 30.82% 31.76% 28.11%

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Supplemental Financial Information

228

Goldman Sachs 2022 Form 10-K

Interest for the

Year Ended December

$ in millions 2022 2021 2020

Assets

U.S. $ 2,793 $ 143 $ 219

Non-U.S. 440 (167) 26

Deposits with banks 3,233 (24) 245

U.S. 3,463 (383) 371

Non-U.S. 1,005 (597) (89)

Collateralized agreements 4,468 (980) 282

U.S. 3,362 2,943 3,649

Non-U.S. 1,725 1,773 1,561

Trading assets 5,087 4,716 5,210

U.S. 1,656 991 1,081

Non-U.S. 543 598 546

Investments 2,199 1,589 1,627

U.S. 7,967 4,423 4,061

Non-U.S. 1,092 896 822

Loans 9,059 5,319 4,883

U.S. 3,236 1,201 1,099

Non-U.S. 1,742 299 343

Other interest-earning assets 4,978 1,500 1,442

Interest-earning assets $ 29,024 $ 12,120 $ 13,689

Liabilities

U.S. $ 4,959 $ 1,098 $ 1,967

Non-U.S. 864 205 419

Interest-bearing deposits 5,823 1,303 2,386

U.S. 2,027 146 554

Non-U.S. 781 (146) 45

Collateralized financings 2,808 – 599

U.S. 872 661 477

Non-U.S. 1,051 1,001 761

Trading liabilities 1,923 1,662 1,238

U.S. 408 476 492

Non-U.S. 133 51 50

Short-term borrowings 541 527 542

U.S. 5,570 3,139 4,034

Non-U.S. 146 92 119

Long-term borrowings 5,716 3,231 4,153

U.S. 2,356 (897) (148)

Non-U.S. 2,179 (176) 168

Other interest-bearing liabilities 4,535 (1,073) 20

Interest-bearing liabilities $ 21,346 $ 5,650 $ 8,938

Net interest income

U.S. $ 6,285 $ 4,695 $ 3,104

Non-U.S. 1,393 1,775 1,647

Net interest income $ 7,678 $ 6,470 $ 4,751

Average Rate for the

Year Ended December

2022 2021 2020

Assets

U.S. 1.85 % 0.14 % 0.39 %

Non-U.S. 0.41 % (0.17) % 0.04 %

Deposits with banks 1.25 % (0.01) % 0.19 %

U.S. 1.43 % (0.19) % 0.27 %

Non-U.S. 0.59 % (0.40) % (0.08) %

Collateralized agreements 1.09 % (0.28) % 0.11 %

U.S. 2.03 % 1.70 % 1.79 %

Non-U.S. 1.40 % 1.30 % 1.32 %

Trading assets 1.76 % 1.52 % 1.61 %

U.S. 1.70 % 1.42 % 1.92 %

Non-U.S. 3.69 % 3.22 % 3.18 %

Investments 1.96 % 1.80 % 2.22 %

U.S. 5.50 % 4.09 % 4.31 %

Non-U.S. 4.95 % 4.18 % 4.36 %

Loans 5.43 % 4.11 % 4.32 %

U.S. 3.39 % 1.22 % 1.92 %

Non-U.S. 2.71 % 0.54 % 0.75 %

Other interest-earning assets 3.11 % 0.98 % 1.40 %

Interest-earning assets 2.08 % 0.98 % 1.38 %

Liabilities

U.S. 1.64 % 0.47 % 1.04 %

Non-U.S. 1.16 % 0.28 % 0.81 %

Interest-bearing deposits 1.54 % 0.43 % 0.99 %

U.S. 1.89 % 0.13 % 0.71 %

Non-U.S. 0.93 % (0.20) % 0.13 %

Collateralized financings 1.47 % 0.00 % 0.53 %

U.S. 1.08 % 0.98 % 1.13 %

Non-U.S. 1.26 % 1.32 % 1.38 %

Trading liabilities 1.17 % 1.16 % 1.27 %

U.S. 1.19 % 1.49 % 1.43 %

Non-U.S. 0.46 % 0.15 % 0.23 %

Short-term borrowings 0.86 % 0.80 % 0.96 %

U.S. 2.51 % 1.45 % 2.03 %

Non-U.S. 0.39 % 0.31 % 0.38 %

Long-term borrowings 2.20 % 1.31 % 1.80 %

U.S. 1.42 % (0.64) % (0.12) %

Non-U.S. 2.22 % (0.20) % 0.25 %

Other interest-bearing liabilities 1.72 % (0.48) % 0.01 %

Interest-bearing liabilities 1.62 % 0.48 % 0.96 %

Interest rate spread 0.46 % 0.50 % 0.42 %

U.S. 0.70 % 0.62 % 0.51 %

Non-U.S. 0.28 % 0.37 % 0.43 %

Net yield on interest-earning assets 0.55 % 0.53 % 0.48 %

In the tables above:

• Assets, liabilities and interest are classified as U.S. and non-

U.S. based on the location of the legal entity in which the

assets and liabilities are held.

• Derivative instruments and commodities are included in

other non-interest-earning assets and other non-interest-

bearing liabilities.

• Average collateralized agreements included $216.73billion

of resale agreements and $194.86 billion of securities

borrowed for 2022, $167.95 billion of resale agreements

and $183.50 billion of securities borrowed for 2021 and

$119.16billion of resale agreements and $134.26billion of

securities borrowed for 2020.

• Other interest-earning assets primarily consists of certain

receivables from customers and counterparties.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Supplemental Financial Information

Goldman Sachs 2022 Form 10-K 229

• Collateralized financings included $150.23 billion of

repurchase agreements and $40.56 billion of securities

loaned for 2022, $145.68 billion of repurchase agreements

and $37.11 billion of securities loaned for 2021, and

$96.60billion of repurchase agreements and $16.41billion

of securities loaned for 2020.

• Substantially all of the other interest-bearing liabilities

consists of certain payables to customers and

counterparties.

• Interest rates for borrowings include the effects of interest

rate swaps accounted for as hedges.

• Loans exclude loans held for sale that are accounted for at

the lower of cost or fair value. Such loans are included

within other interest-earning assets.

• Short- and long-term borrowings include both secured and

unsecured borrowings.

Changes in Net Interest Income, Volume and Rate

Analysis

The tables below present the effect on net interest income of

volume and rate changes. In this analysis, changes due to

volume/rate variance have been allocated to volume.

Year Ended December 2022

versus December 2021

Increase (decrease)

due to change in:

$ in millions

Volume Rate

Net Change

Interest-earning assets

U.S.

$ 886

$ 1,764

$ 2,650

Non-U.S.

558

607

Deposits with banks

935

2,322

3,257

U.S.

560

3,286

3,846

Non-U.S.

125

1,477

1,602

Collateralized agreements

685

4,763

5,448

U.S.

(166)

585

419

Non-U.S.

(178)

130

(48)

Trading assets

(344)

715

371

U.S.

465

200

665

Non-U.S.

(143)

(55)

Investments

322

288

610

U.S.

2,022

1,522

3,544

Non-U.S.

166

196

Loans

2,052

1,688

3,740

U.S.

(87)

2,122

2,035

Non-U.S.

238

1,205

1,443

Other interest-earning assets

151

3,327

3,478

Change in interest income

3,801

13,103

16,904

Interest-bearing liabilities

U.S.

1,159

2,702

3,861

Non-U.S.

639

659

Interest-bearing deposits

1,179

3,341

4,520

U.S.

(59)

1,940

1,881

Non-U.S.

103

824

927

Collateralized financings

2,764

2,808

U.S.

142

211

Non-U.S.

(49)

Trading liabilities

241

261

U.S.

(97)

(68)

Non-U.S.

(26)

108

Short-term borrowings

U.S.

119

2,312

2,431

Non-U.S.

Long-term borrowings

150

2,335

2,485

U.S.

382

2,871

3,253

Non-U.S.

271

2,084

2,355

Other interest-bearing liabilities

653

4,955

5,608

Change in interest expense

2,270

13,426

15,696

Change in net interest income

$ 1,531

$ (323)

$ 1,208

Year Ended December 2021

versus December 2020

Increase (decrease)

due to change in:

$ in millions

Volume

Rate

Net Change

Interest-earning assets

U.S.

$ 66

$ (142)

$ (76)

Non-U.S.

(43)

(150)

(193)

Deposits with banks

(292)

(269)

U.S.

(122)

(632)

(754)

Non-U.S.

(135)

(373)

(508)

Collateralized agreements

(257)

(1,005)

(1,262)

U.S.

(519)

(187)

(706)

Non-U.S.

227

(15)

212

Trading assets

(292)

(202)

(494)

U.S.

195

(285)

(90)

Non-U.S.

Investments

241

(279)

(38)

U.S.

570

(208)

362

Non-U.S.

108

(34)

Loans

678

(242)

436

U.S.

501

(399)

102

Non-U.S.

(97)

(44)

Other interest-earning assets

554

(496)

Change in interest income

947

(2,516)

(1,569)

Interest-bearing liabilities

U.S.

204

(1,073)

(869)

Non-U.S.

(273)

(214)

Interest-bearing deposits

263

(1,346)

(1,083)

U.S.

(451)

(408)

Non-U.S.

(75)

(116)

(191)

Collateralized financings

(32)

(567)

(599)

U.S.

249

(65)

184

Non-U.S.

273

(33)

240

Trading liabilities

522

(98)

424

U.S.

(39)

(16)

Non-U.S.

(17)

Short-term borrowings

(21)

(15)

U.S.

256

(1,151)

(895)

Non-U.S.

(4)

(23)

(27)

Long-term borrowings

252

(1,174)

(922)

U.S.

(76)

(673)

(749)

Non-U.S.

(40)

(304)

(344)

Other interest-bearing liabilities

(116)

(977)

(1,093)

Change in interest expense

868

(4,156)

(3,288)

Change in net interest income

$ 79

$ 1,640

$ 1,719

Deposits

The table below presents information about interest-bearing

deposits.

Year Ended December

$ in millions

2022 2021

Average balances

U.S.

Savings and demand

$ 231,693 $ 174,745

Time

70,985 57,222

Total U.S.

302,678 231,967

Non-U.S.

Demand

45,066 43,709

Time

29,596 29,190

Total non-U.S.

74,662 72,899

Total

$ 377,340 $ 304,866

Average interest rates

U.S.

Savings and demand

1.69% 0.34%

Time

1.48% 0.89%

Total U.S.

1.64% 0.47%

Non-U.S.

Demand

1.20% 0.33%

Time

1.09% 0.21%

Total non-U.S.

1.16% 0.28%

Total

1.54% 0.43%

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Supplemental Financial Information

230

Goldman Sachs 2022 Form 10-K

In the table above, deposits are classified as U.S. and non-

U.S. based on the location of the entity in which such

deposits are held.

The amount of deposits in U.S. offices held by non-U.S.

depositors was $6.39 billion as of December 2022 and

$7.56billion as of December 2021.

The amount of uninsured deposits in U.S. offices was $128.72

billion as of December 2022 and $127.05 billion as of

December 2021. The amount of uninsured deposits in non-

U.S. offices was $41.33 billion as of December 2022 and

$49.08billion as of December 2021.

The table below presents uninsured time deposits by

maturity.

As of December 2022

$ in millions U.S. Non-U.S.

3 months or less

$ 5,064

$ 11,093

3 to 6 months

2,376

5,158

6 to 12 months

3,122

1,191

Greater than 12 months

584

1,335

Total

$ 11,146

$ 18,777

In the table above:

• All U.S. time deposits were in accounts eligible for FDIC

insurance and non-U.S. time deposits include deposits in

accounts eligible for insurance in their local jurisdictions,

as well as deposits in uninsured accounts.

• The insurance limit is allocated between time and other

deposits on a pro-rata basis for account holders who have

both time and other deposits that, in aggregate, exceed the

insurance limit.

Loan Portfolio

The table below presents information about loans.

As of December

$ in millions 2022 2021

Corporate

$ 40,135

22 %

$ 37,643

23 %

Commercial real estate

28,879

16 %

29,000

18 %

Residential real estate

23,035

12 %

24,674

15 %

Securities-based

16,671

9 %

16,652

10 %

Other collateralized

51,702

28 %

38,263

24 %

Consumer:

Installment

6,326

3 %

3,672

2 %

Credit cards

15,820

9 %

8,212

5 %

Other

2,261

1 %

4,019

3 %

Total

$ 184,829

100 %

$ 162,135

100 %

Maturities and Interest Rates. The table below presents

gross loans by tenor.

As of December 2022

More than More than

1 year 1 year to 5 years to More than

$ in millions

or less 5 years 15 years 15 years Total

Corporate

$ 3,078

$ 30,605

$ 6,451

$ 1

$ 40,135

Commercial real estate

4,736

22,578

1,561

28,879

Residential real estate

3,934

8,588

10,433

23,035

Securities-based

16,666

–

16,671

Other collateralized

20,522

29,692

1,251

237

51,702

Consumer:

Installment

129

4,269

1,793

135

6,326

Credit cards

15,820

–

15,820

Other

1,038

780

355

2,261

Total

$ 65,923

$ 96,517

$ 11,491

$ 10,898

$ 184,829

The table below presents the gross loans by tenor and for

loans with tenors greater than one year, the distributions of

such loans between fixed and floating interest rates.

As of December 2022

1 year More than one year

$ in millions

or less Fixed-rate Floating-rate Total

Corporate $ 3,078 $ 533 $ 36,524 $ 40,135

Commercial real estate 4,736 607 23,536 28,879

Residential real estate 3,934 11,290 7,811 23,035

Securities-based 16,666 – 5 16,671

Other collateralized 20,522 880 30,300 51,702

Consumer:

Installment 129 6,197 – 6,326

Credit cards 15,820 – – 15,820

Other 1,038 455 768 2,261

Total $ 65,923 $ 19,962 $ 98,944 $ 184,829

Allowance for Loan Losses

The table below presents information about the allowance

for loan losses.

As of December

$ in millions 2022 2021

Corporate $ 1,535 $ 1,288

Commercial real estate 572 482

Residential real estate 122 141

Securities-based – –

Other collateralized 264 153

Other 69 71

Wholesale 2,562 2,135

Installment 831 490

Credit cards 2,150 948

Consumer 2,981 1,438

Total $ 5,543 $ 3,573

The table below presents information about the net charge-

off ratio for loans accounted for at amortized cost.

Net Average Net charge-

$ in millions Charge-offs balance off ratio

Year Ended December 2022

Wholesale $ 253 $ 144,129 0.2%

Installment 46 4,711 1.0%

Credit cards 427 11,984 3.6%

Consumer 473 16,695 2.8%

Total $ 726 $ 160,824 0.5%

Year Ended December 2021

Wholesale $ 130 $ 111,088 0.1%

Installment 68 3,497 1.9%

Credit cards 135 5,495 2.5%

Consumer 203 8,992 2.3%

Total $ 333 $ 120,080 0.3%

In the table above, the net charge-off ratio is calculated by

dividing the net charge-offs by average gross loans accounted

for at amortized cost. Net charge-offs for wholesale loans

were primarily related to corporate loans for both 2022 and

2021.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Supplemental Financial Information

Goldman Sachs 2022 Form 10-K 231

Item 9. Changes in and Disagreements

with Accountants on Accounting and

Financial Disclosure

There were no changes in or disagreements with accountants

on accounting and financial disclosure during the last two

years.

Item 9A. Controls and Procedures

As of the end of the period covered by this report, an

evaluation was carried out by our management, with the

participation of our Chief Executive Officer and Chief

Financial Officer, of the effectiveness of our disclosure

controls and procedures (as defined in Rule 13a-15(e) under

the Exchange Act). Based on that evaluation, our Chief

Executive Officer and Chief Financial Officer concluded that

these disclosure controls and procedures were effective as of

the end of the period covered by this report. In addition, no

change in our internal control over financial reporting (as

defined in Rule 13a-15(f) under the Exchange Act) occurred

during the fourth quarter of our year ended December 31,

2022 that has materially affected, or is reasonably likely to

materially affect, our internal control over financial

reporting.

Management’s Report on Internal Control over Financial

Reporting and the Report of Independent Registered Public

Accounting Firm are set forth in Part II, Item 8 of this Form

10-K.

Item 9B. Other Information

Not applicable.

Item 9C. Disclosure Regarding Foreign

Jurisdictions that Prevent Inspections

Not applicable.

PART III

Item 10. Directors, Executive Officers

and Corporate Governance

Information about our executive officers is included on page

24 of this Form 10-K. Information about our directors,

including our audit committee and audit committee financial

experts and the procedures by which shareholders can

recommend director nominees, and our executive officers will

be in our definitive Proxy Statement for our 2023 Annual

Meeting of Shareholders, which will be filed within 120 days

of the end of 2022 (2023 Proxy Statement) and is incorporated

in this Form 10-K by reference. Information about our Code

of Business Conduct and Ethics, which applies to our senior

financial officers, is included in “Business — Available

Information” in Part I, Item 1 of this Form 10-K.

Item 11. Executive Compensation

Information relating to our executive officer and director

compensation and the compensation committee of the Board

will be in the 2023 Proxy Statement and is incorporated in

this Form 10-K by reference.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

232

Goldman Sachs 2022 Form 10-K

Item 12. Security Ownership of Certain

Beneficial Owners and Management

and Related Stockholder Matters

Information relating to security ownership of certain

beneficial owners of our common stock and information

relating to the security ownership of our management will be

in the 2023 Proxy Statement and is incorporated in this Form

10-K by reference.

The table below presents information as of December 31,

2022 regarding securities to be issued pursuant to outstanding

restricted stock units (RSUs) and securities remaining

available for issuance under our equity compensation plans

that were in effect during 2022.

Plan Category

Securities

to be Issued

Upon

Exercise of

Outstanding

Options and

Rights (a)

Weighted

Average

Exercise

Price of

Outstanding

Options (b)

Securities

Available

For Future

Issuance

Under Equity

Compensation

Plans (c)

Equity compensation plans:

Approved by security holders

23,282,691 N/A 60,775,322

Not approved by security holders

– – –

Total

23,282,691 60,775,322

In the table above:

• Securities to be Issued Upon Exercise of Outstanding

Options and Rights includes 20,288,851 shares that may be

issued pursuant to outstanding RSUs. These awards are

subject to vesting and other conditions to the extent set

forth in the respective award agreements, and the

underlying shares will be delivered net of any required tax

withholding. As of December 31, 2022, there were no

outstanding options.

• Shares underlying RSUs are deliverable without the

payment of any consideration, and therefore these awards

have not been taken into account in calculating the

weighted average exercise price.

• Securities Available For Future Issuance Under Equity

Compensation Plans represents shares remaining to be

issued under our current stock incentive plan (SIP),

excluding shares reflected in column (a). If any shares of

common stock underlying awards granted under our

current SIP, our SIP adopted in 2018, our SIP adopted in

2015 or our SIP adopted in 2013 are not delivered due to

forfeiture, termination or cancellation or are surrendered or

withheld, those shares will again become available to be

delivered under our current SIP. Shares available for grant

are also subject to adjustment for certain changes in

corporate structure as permitted under our current SIP.

Item 13. Certain Relationships and

Related Transactions, and Director

Independence

Information regarding certain relationships and related

transactions and director independence will be in the 2023

Proxy Statement and is incorporated in this Form 10-K by

reference.

Item 14. Principal Accountant Fees and

Services

Information regarding principal accountant fees and services

will be in the 2023 Proxy Statement and is incorporated in

this Form 10-K by reference.

PART IV

Item 15. Exhibit and Financial

Statement Schedules

(a) Documents filed as part of this Report:

1. Consolidated Financial Statements

The consolidated financial statements required to be filed in

this Form 10-K are included in Part II, Item 8 hereof.

2. Exhibits

2.1 Plan of Incorporation (incorporated by reference to

Exhibit 2.1 to the Registrant’s Registration

Statement on Form S-1 (No. 333-74449)).

3.1 Restated Certificate of Incorporation of The

Goldman Sachs Group, Inc., amended as of

November 10, 2021 (incorporated by reference to

Exhibit 3.1 to the Registrant's Current Report on

Form 8-K, filed on November 10, 2021).

3.2 Amended and Restated By-Laws of The Goldman

Sachs Group, Inc., amended as of October 28, 2021

(incorporated by reference to Exhibit 3.1 to the

Registrant’s Quarterly Report on Form 10-Q for

the quarter ended September 30, 2021).

4.1 Description of The Goldman Sachs Group, Inc.’s

Securities registered pursuant to Section 12 of the

Securities Exchange Act of 1934.

4.2 Indenture, dated as of May 19, 1999, between The

Goldman Sachs Group, Inc. and The Bank of New

York, as trustee (incorporated by reference to

Exhibit 6 to the Registrant’s Registration

Statement on Form 8-A, filed on June 29, 1999).

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Goldman Sachs 2022 Form 10-K 233

4.3 Subordinated Debt Indenture, dated as of February

20, 2004, between The Goldman Sachs Group, Inc.

and The Bank of New York, as trustee (incorporated

by reference to Exhibit 4.2 to the Registrant’s Annual

Report on Form 10-K for the fiscal year ended

November 28, 2003).

4.4 Warrant Indenture, dated as of February 14, 2006,

between The Goldman Sachs Group, Inc. and The

Bank of New York, as trustee (incorporated by

reference to Exhibit 4.34 to the Registrant’s Post-

Effective Amendment No. 3 to Form S-3, filed on

March 1, 2006).

4.5 Senior Debt Indenture, dated as of December 4, 2007,

among GS Finance Corp., as issuer, The Goldman

Sachs Group, Inc., as guarantor, and The Bank of

New York, as trustee (incorporated by reference to

Exhibit 4.69 to the Registrant’s Post-Effective

Amendment No. 10 to Form S-3, filed on December 4,

2007).

4.6 Senior Debt Indenture, dated as of July 16, 2008,

between The Goldman Sachs Group, Inc. and The

Bank of New York Mellon, as trustee (incorporated

by reference to Exhibit 4.82 to the Registrant’s Post-

Effective Amendment No. 11 to Form S-3 (No.

333-130074), filed on July 17, 2008).

4.7 Fourth Supplemental Indenture, dated as of December

31, 2016, between The Goldman Sachs Group, Inc.

and The Bank of New York Mellon, as trustee, with

respect to the Senior Debt Indenture, dated as of July

16, 2008 (incorporated by reference to Exhibit 4.1 to

the Registrant’s Current Report on Form 8-K, filed on

January 6, 2017).

4.8 Senior Debt Indenture, dated as of October 10, 2008,

among GS Finance Corp., as issuer, The Goldman

Sachs Group, Inc., as guarantor, and The Bank of

New York Mellon, as trustee (incorporated by

reference to Exhibit 4.70 to the Registrant’s

Registration Statement on Form S-3 (No. 333-154173),

filed on October 10, 2008).

4.9 First Supplemental Indenture, dated as of February 20,

2015, among GS Finance Corp., as issuer, The

Goldman Sachs Group, Inc., as guarantor, and The

Bank of New York Mellon, as trustee, with respect to

the Senior Debt Indenture, dated as of October 10,

2008 (incorporated by reference to Exhibit 4.7 to the

Registrant’s Annual Report on Form 10-K for the

fiscal year ended December 31, 2014).

4.10 Fourth Supplemental Indenture, dated as of August

21, 2018, among GS Finance Corp., as issuer, The

Goldman Sachs Group, Inc., as guarantor, and The

Bank of New York Mellon, as trustee, with respect

to the Senior Debt Indenture, dated as of October

10, 2008 (incorporated by reference to Exhibit 4.1

to the Registrant’s Quarterly Report on Form 10-Q

for the period ended September 30, 2018).

4.11 Ninth Supplemental Subordinated Debt Indenture,

dated as of May 20, 2015, between The Goldman

Sachs Group, Inc. and The Bank of New York

Mellon, as trustee, with respect to the

Subordinated Debt Indenture, dated as of February

20, 2004 (incorporated by reference to Exhibit 4.1

to the Registrant’s Current Report on Form 8-K,

filed on May 22, 2015).

4.12 Tenth Supplemental Subordinated Debt Indenture,

dated as of July 7, 2017, between The Goldman

Sachs Group, Inc. and The Bank of New York

Mellon, as trustee, with respect to the

Subordinated Debt Indenture, dated as of February

20, 2004 (incorporated by reference to Exhibit 4.89

to the Registrant’s Registration Statement on Form

S-3 (No. 333-219206), filed on July 10, 2017).

4.13 Seventh Supplemental Indenture, dated as of July

1, 2020, among GS Finance Corp., as issuer, The

Goldman Sachs Group, Inc., as guarantor, and The

Bank of New York Mellon, as trustee, with respect

to the Senior Debt Indenture, dated as of October

10, 2008 (incorporated by reference to Exhibit 4.69

to the Registrant's Registration Statement on Form

S-3 (No. 333-239610), filed on July 1, 2020).

4.14 Eighth Supplemental Indenture, dated as of

October 14, 2020, among GS Finance Corp., as

issuer, The Goldman Sachs Group, Inc., as

guarantor, and The Bank of New York Mellon, as

trustee, with respect to the Senior Debt Indenture,

dated as of October 10, 2008 (incorporated by

reference to Exhibit 4.1 to the Registrant’s Current

Report on Form 8-K, filed on October 14, 2020).

Certain instruments defining the rights of holders

of long-term debt securities of the Registrant and

its subsidiaries are omitted pursuant to Item

601(b)(4)(iii) of Regulation S-K. The Registrant

hereby undertakes to furnish to the SEC, upon

request, copies of any such instruments.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

234

Goldman Sachs 2022 Form 10-K

10.1 The Goldman Sachs Amended and Restated Stock

Incentive Plan (2021) (incorporated by reference to

Annex C to the Registrant’s Definitive Proxy

Statement on Schedule 14A, filed on March 19, 2021).

†

10.2 The Goldman Sachs Partner Compensation Plan

(incorporated by reference to Exhibit 10.18 to the

Registrant’s Registration Statement on Form S-1 (No.

333-74449)). †

10.3 The Goldman Sachs Amended and Restated

Restricted Partner Compensation Plan (incorporated

by reference to Exhibit 10.1 to the Registrant’s

Quarterly Report on Form 10-Q for the period ended

February 24, 2006). †

10.4 Form of Employment Agreement for Participating

Managing Directors (incorporated by reference to

Exhibit 10.19 to the Registrant’s Registration

Statement on Form S-1 (No. 333-75213)). †

10.5 Form of Agreement Relating to Noncompetition and

Other Covenants (incorporated by reference to

Exhibit 10.20 to the Registrant’s Registration

Statement on Form S-1 (No. 333-75213)). †

10.6 Amended and Restated Shareholders’ Agreement,

effective as of December 31, 2019, among The

Goldman Sachs Group, Inc. and various parties

(incorporated by reference to Exhibit 10.6 to the

Registrant’s Annual Report on Form 10-K for the

fiscal year ended December 31, 2019).

10.7 Instrument of Indemnification (incorporated by

reference to Exhibit 10.27 to the Registrant’s

Registration Statement on Form S-1 (No. 333-75213)).

10.8 Form of Indemnification Agreement (incorporated by

reference to Exhibit 10.28 to the Registrant’s Annual

Report on Form 10-K for the fiscal year ended

November 26, 1999).

10.9 Form of Indemnification Agreement (incorporated by

reference to Exhibit 10.44 to the Registrant’s Annual

Report on Form 10-K for the fiscal year ended

November 26, 1999).

10.10 Form of Indemnification Agreement, dated as of July

5, 2000 (incorporated by reference to Exhibit 10.1 to

the Registrant’s Quarterly Report on Form 10-Q for

the period ended August 25, 2000).

10.11 Form of Amendment, dated November 27, 2004, to

Agreement Relating to Noncompetition and Other

Covenants, dated May 7, 1999 (incorporated by

reference to Exhibit 10.32 to the Registrant’s Annual

Report on Form 10-K for the fiscal year ended

November 26, 2004). †

10.12 Form of Non-Employee Director RSU Award

Agreement (pre-2015) (incorporated by reference

to Exhibit 10.21 to the Registrant’s Annual Report

on Form 10-K for the fiscal year ended December

31, 2014). †

10.13 Ground Lease, dated August 23, 2005, between

Battery Park City Authority d/b/a/ Hugh L. Carey

Battery Park City Authority, as Landlord, and

Goldman Sachs Headquarters LLC, as Tenant

(incorporated by reference to Exhibit 10.1 to the

Registrant’s Current Report on Form 8-K, filed on

August 26, 2005).

10.14 General Guarantee Agreement, dated January 30,

2006, made by The Goldman Sachs Group, Inc.

relating to certain obligations of Goldman Sachs &

Co. LLC (incorporated by reference to Exhibit

10.45 to the Registrant’s Annual Report on Form

10-K for the fiscal year ended November 25, 2005).

10.15 Goldman Sachs & Co. LLC Executive Life

Insurance Policy and Certificate with Metropolitan

Life Insurance Company for Participating

Managing Directors (incorporated by reference to

Exhibit 10.1 to the Registrant’s Quarterly Report

on Form 10-Q for the period ended August 25,

2006). †

10.16 Form of Goldman Sachs & Co. LLC Executive Life

Insurance Policy with Pacific Life & Annuity

Company for Participating Managing Directors,

including policy specifications and form of

restriction on Policy Owner’s Rights (incorporated

by reference to Exhibit 10.2 to the Registrant’s

Quarterly Report on Form 10-Q for the period

ended August 25, 2006). †

10.17 Form of Second Amendment, dated November 25,

2006, to Agreement Relating to Noncompetition

and Other Covenants, dated May 7, 1999, as

amended effective November 27, 2004

(incorporated by reference to Exhibit 10.51 to the

Registrant’s Annual Report on Form 10-K for the

fiscal year ended November 24, 2006). †

10.18 Description of PMD Retiree Medical Program

(incorporated by reference to Exhibit 10.20 to the

Registrant’s Annual Report on Form 10-K for the

fiscal year ended December 31, 2021). †

10.19 Letter, dated June 28, 2008, from The Goldman

Sachs Group, Inc. to Mr. Lakshmi N. Mittal

(incorporated by reference to Exhibit 99.1 to the

Registrant’s Current Report on Form 8-K, filed on

June 30, 2008). †

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Goldman Sachs 2022 Form 10-K 235

10.20 General Guarantee Agreement, dated December 1,

2008, made by The Goldman Sachs Group, Inc.

relating to certain obligations of Goldman Sachs

Bank USA (incorporated by reference to Exhibit 4.80

to the Registrant’s Post-Effective Amendment No. 2

to Form S-3, filed on March 19, 2009).

10.21 Form of One-Time RSU Award Agreement

(pre-2015) (incorporated by reference to Exhibit

10.32 to the Registrant’s Annual Report on Form 10-

K for the fiscal year ended December 31, 2014). †

10.22 Amendments to Certain Non-Employee Director

Equity Award Agreements (incorporated by

reference to Exhibit 10.69 to the Registrant’s Annual

Report on Form 10-K for the fiscal year ended

November 28, 2008). †

10.23 Form of Year-End RSU Award Agreement (not fully

vested) (pre-2015) (incorporated by reference to

Exhibit 10.36 to the Registrant’s Annual Report on

Form 10-K for the fiscal year ended December 31,

2014). †

10.24 Form of Year-End RSU Award Agreement (fully

vested) (pre-2015) (incorporated by reference to

Exhibit 10.37 to the Registrant’s Annual Report on

Form 10-K for the fiscal year ended December 31,

2014). †

10.25 Form of Year-End RSU Award Agreement (Base and/

or Supplemental) (pre-2015) (incorporated by

reference to Exhibit 10.38 to the Registrant’s Annual

Report on Form 10-K for the fiscal year ended

December 31, 2014). †

10.26 Form of Year-End Restricted Stock Award

Agreement (fully vested) (pre-2015) (incorporated by

reference to Exhibit 10.41 to the Registrant’s Annual

Report on Form 10-K for the fiscal year ended

December 31, 2013). †

10.27 Form of Year-End Restricted Stock Award

Agreement (Base and/or Supplemental) (pre-2015)

(incorporated by reference to Exhibit 10.41 to the

Registrant’s Annual Report on Form 10-K for the

fiscal year ended December 31, 2014). †

10.28 Form of Fixed Allowance RSU Award Agreement

(pre-2015) (incorporated by reference to Exhibit

10.43 to the Registrant’s Annual Report on Form 10-

K for the fiscal year ended December 31, 2014). †

10.29 Form of Deed of Gift (incorporated by reference to

Exhibit 10.1 to the Registrant’s Quarterly Report on

Form 10-Q for the period ended June 30, 2010). †

10.30 The Goldman Sachs Long-Term Performance

Incentive Plan, dated December 17, 2010

(incorporated by reference to Exhibit 10.1 to the

Registrant’s Current Report on Form 8-K, filed on

December 23, 2010). †

10.31 Form of Performance-Based Restricted Stock Unit

Award Agreement (pre-2015) (incorporated by

reference to Exhibit 10.2 to the Registrant’s

Current Report on Form 8-K, filed on December

23, 2010). †

10.32 Form of Performance-Based Option Award

Agreement (incorporated by reference to Exhibit

10.3 to the Registrant’s Current Report on Form 8-

K, filed on December 23, 2010). †

10.33 Form of Performance-Based Cash Compensation

Award Agreement (pre-2015) (incorporated by

reference to Exhibit 10.4 to the Registrant’s

Current Report on Form 8-K, filed on December

23, 2010). †

10.34 Amended and Restated General Guarantee

Agreement, dated November 21, 2011, made by

The Goldman Sachs Group, Inc. relating to certain

obligations of Goldman Sachs Bank USA

(incorporated by reference to Exhibit 4.1 to the

Registrant’s Current Report on Form 8-K, filed on

November 21, 2011).

10.35 Form of Aircraft Time Sharing Agreement

(incorporated by reference to Exhibit 10.61 to the

Registrant’s Annual Report on Form 10-K for the

fiscal year ended December 31, 2011). †

10.36 The Goldman Sachs Group, Inc. Clawback Policy,

effective as of January 1, 2015 (incorporated by

reference to Exhibit 10.53 to the Registrant’s

Annual Report on Form 10-K for the fiscal year

ended December 31, 2014).

10.37 Form of Non-Employee Director RSU Award

Agreement. †

10.38 Form of One-Time/Year-End RSU Award

Agreement. †

10.39 Form of Year-End RSU Award Agreement (not

fully vested). †

10.40 Form of Year-End RSU Award Agreement (fully

vested). †

10.41 Form of Year-End RSU Award Agreement (Base

(not fully vested) and/or Supplemental). †

10.42 Form of Year-End Short-Term RSU Award

Agreement. †

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

236

Goldman Sachs 2022 Form 10-K

10.43 Form of Year-End Restricted Stock Award

Agreement (incorporated by reference to Exhibit

10.46 to the Registrant's Annual Report on Form 10-

K for the fiscal year ended December 31, 2020). †

10.44 Form of Year-End Restricted Stock Award

Agreement (fully vested) (incorporated by reference

to Exhibit 10.53 to the Registrant's Annual Report on

Form 10-K for the fiscal year ended December 31,

2017). †

10.45 Form of Year-End Short-Term Restricted Stock

Award Agreement (incorporated by reference to

Exhibit 10.57 to the Registrant’s Annual Report on

Form 10-K for the fiscal year ended December 31,

2015). †

10.46 Form of Fixed Allowance RSU Award Agreement. †

10.47 Form of Fixed Allowance Restricted Stock Award

Agreement. †

10.48 Form of Fixed Allowance Deferred Cash Award

Agreement (incorporated by reference to Exhibit

10.59 to the Registrant’s Annual Report on Form 10-

K for the fiscal year ended December 31, 2015). †

10.49 Form of Performance-Based Restricted Stock Unit

Award Agreement (fully vested). †

10.50 Form of Performance-Based Restricted Stock Unit

Award Agreement (not fully vested). †

10.51 Form of Performance-Based Cash Compensation

Award Agreement (incorporated by reference to

Exhibit 10.61 to the Registrant’s Annual Report on

Form 10-K for the fiscal year ended December 31,

2015). †

10.52 Form of Signature Card for Equity Awards. †

10.53 Amended and Restated General Guarantee

Agreement, dated September 28, 2018, made by The

Goldman Sachs Group, Inc. relating to certain

obligations of Goldman Sachs Bank USA

(incorporated by reference to Exhibit 4.1 to the

Registrant’s Current Report on Form 8-K, filed on

September 28, 2018).

10.54 Amended and Restated General Guarantee

Agreement, dated September 28, 2018, made by

The Goldman Sachs Group, Inc. relating to certain

obligations of Goldman Sachs & Co. LLC

(incorporated by reference to Exhibit 99.1 to the

Registrant’s Current Report on Form 8-K, filed on

September 28, 2018).

10.55 Lease, dated August 17, 2018, between Farringdon

Street Partners Limited and Farringdon Street

(Nominee) Limited, as Landlord, and Goldman

Sachs International, as Tenant (incorporated by

reference to Exhibit 10.3 to the Registrant’s

Quarterly Report on Form 10-Q for the period

ended September 30, 2018).

21.1 List of significant subsidiaries of The Goldman

Sachs Group, Inc.

22.1 Issuers of guaranteed securities (incorporated by

reference to Exhibit 22.1 to the Registrant's Post-

Effective Amendment No. 1 to Form S-3, filed on

February 18, 2021).

23.1 Consent of Independent Registered Public

Accounting Firm.

31.1 Rule 13a-14(a) Certifications.

32.1 Section 1350 Certifications (This information is

furnished and not filed for purposes of Sections 11

and 12 of the Securities Act of 1933 and Section 18

of the Securities Exchange Act of 1934).

101 Pursuant to Rules 405 and 406 of Regulation S-T,

the following information is formatted in iXBRL

(Inline eXtensible Business Reporting Language):

(i) the Consolidated Statements of Earnings for the

years ended December 31, 2022, December 31,

2021 and December 31, 2020, (ii) the Consolidated

Statements of Comprehensive Income for the years

ended December 31, 2022, December 31, 2021 and

December 31, 2020, (iii) the Consolidated Balance

Sheets as of December 31, 2022 and December 31,

2021, (iv) the Consolidated Statements of Changes

in Shareholders’ Equity for the years ended

December 31, 2022, December 31, 2021 and

December 31, 2020, (v) the Consolidated

Statements of Cash Flows for the years ended

December 31, 2022, December 31, 2021 and

December 31, 2020, (vi) the notes to the

Consolidated Financial Statements and (vii) the

cover page.

104 Cover Page Interactive Data File (formatted in

iXBRL in Exhibit 101).

† This exhibit is a management contract or a compensatory plan or

arrangement.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Goldman Sachs 2022 Form 10-K 237

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the

Securities Exchange Act of 1934, the Registrant has duly

caused this report to be signed on its behalf by the

undersigned, thereunto duly authorized.

THE GOLDMAN SACHS GROUP, INC.

By: /s/ Denis P. Coleman III

Name: Denis P. Coleman III

Title:

Chief Financial Officer

Date: February 23, 2023

Pursuant to the requirements of the Securities Exchange Act

of 1934, this report has been signed below by the following

persons on behalf of the Registrant and in the capacities and

on the dates indicated.

By: /s/ David Solomon

Name: David Solomon

Title: Director, Chairman and Chief Executive

Officer (Principal Executive Officer)

Date: February 23, 2023

By: /s/ M. Michele Burns

Name: M. Michele Burns

Title: Director

Date: February 23, 2023

By: /s/ Drew G. Faust

Name: Drew G. Faust

Title: Director

Date: February 23, 2023

By: /s/ Mark A. Flaherty

Name: Mark A. Flaherty

Title: Director

Date: February 23, 2023

By: /s/ Kimberley D. Harris

Name: Kimberley D. Harris

Title: Director

Date: February 23, 2023

By: /s/ Kevin R. Johnson

Name: Kevin R. Johnson

Title: Director

Date: February 23, 2023

By: /s/ Ellen J. Kullman

Name: Ellen J. Kullman

Title: Director

Date: February 23, 2023

By: /s/ Lakshmi N. Mittal

Name: Lakshmi N. Mittal

Title: Director

Date: February 23, 2023

By: /s/ Adebayo O. Ogunlesi

Name: Adebayo O. Ogunlesi

Title: Director

Date: February 23, 2023

By: /s/ Peter Oppenheimer

Name: Peter Oppenheimer

Title: Director

Date: February 23, 2023

By: /s/ Jan E. Tighe

Name: Jan E. Tighe

Title: Director

Date: February 23, 2023

By: /s/ Jessica R. Uhl

Name: Jessica R. Uhl

Title: Director

Date: February 23, 2023

By: /s/ David A. Viniar

Name: David A. Viniar

Title: Director

Date: February 23, 2023

By: /s/ Mark O. Winkelman

Name: Mark O. Winkelman

Title: Director

Date: February 23, 2023

By: /s/ Denis P. Coleman III

Name: Denis P. Coleman III

Title: Chief Financial Officer

(Principal Financial Officer)

Date: February 23, 2023

By: /s/ Sheara J. Fredman

Name: Sheara J. Fredman

Title: Chief Accounting Officer

(Principal Accounting Officer)

Date: February 23, 2023

238

Goldman Sachs 2022 Form 10-K

THE GOLDMAN SACHS GROUP, INC.

DESCRIPTION OF SECURITIES REGISTERED PURSUANT TO SECTION 12 OF THE SECURITIES

EXCHANGE ACT OF 1934

AS OF DECEMBER 31, 2022

The following is a description of each class of securities of The Goldman Sachs Group, Inc. (the “Company”) that

is registered under Section 12 of the Securities and Exchange Act of 1934, as amended, as of December 31,

2022.

TABLE OF CONTENTS

Description of Common Stock ...................................................................................................................................

Description of the Depositary Shares, Each Representing 1/1,000th Interest in a Share of Floating

Rate Non-Cumulative Preferred Stock, Series A...........................................................................................

Description of the Depositary Shares, Each Representing 1/1,000th Interest in a Share of Floating

Rate Non-Cumulative Preferred Stock, Series C ..........................................................................................

Description of the Depositary Shares, Each Representing 1/1,000th Interest in a Share of Floating

Rate Non-Cumulative Preferred Stock, Series D ..........................................................................................

Description of the Depositary Shares, Each Representing 1/1,000th Interest in a Share of 5.50%

Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series J ............................................................

Description of the Depositary Shares, Each Representing 1/1,000th Interest in a Share of 6.375%

Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series K ...........................................................

Description of (i) 5.793% Fixed-to-Floating Rate Normal Automatic Preferred Enhanced Capital

Securities of Goldman Sachs Capital II (Fully and Unconditionally Guaranteed by The Goldman

Sachs Group, Inc.) and (ii) Floating Rate Normal Automatic Preferred Enhanced Capital Securities

of Goldman Sachs Capital III (Fully and Unconditionally Guaranteed by The Goldman Sachs

Group, Inc.) ..........................................................................................................................................................

Description of Medium-Term Notes, Series F, Callable Fixed and Floating Rate Notes due March

2031 of GS Finance Corp. (Fully and Unconditionally Guaranteed by The Goldman Sachs Group,

Inc. ........................................................................................................................................................................

Description of Medium-Term Notes, Series F, Callable Fixed and Floating Rate Notes due May

2031 of GS Finance Corp. (Fully and Unconditionally Guaranteed by The Goldman Sachs Group,

Inc.) .......................................................................................................................................................................

Exhibit 4.1

DESCRIPTION OF COMMON STOCK

The following is a brief description of the material terms of the Company’s common stock. The following summary

does not purport to be complete and is qualified in its entirety by reference to the pertinent sections of the

Company’s restated certificate of incorporation and the Company’s amended and restated by-laws, which are

exhibits to the Annual Report of which this exhibit is a part. Unless the context otherwise provides, all references to

the Company in this description refer only to The Goldman Sachs Group, Inc. and does not include its

consolidated subsidiaries.

Pursuant to the Company’s restated certificate of incorporation, the Company’s authorized capital stock consists of

4,350,000,000 shares, each with a par value of $0.01 per share, of which 4,000,000,000 shares are designated as

common stock and 200,000,000 shares are designated as nonvoting common stock. All outstanding shares of

common stock are validly issued, fully paid and nonassessable, which means that its holders have paid their

purchase price in full and that the Company may not ask them to surrender additional funds.

The Company’s Shareholders’ Agreement governs, among other things, the voting of shares of common stock

owned by participating managing directors of the Company. Shares of common stock subject to the Company’s

Shareholders’ Agreement are called “voting shares.” Before any of the Company’s shareholders vote, a separate,

preliminary vote is held by the persons covered by the Company’s Shareholders’ Agreement. In the election of

directors, all voting shares will be voted in favor of the election of the director nominees receiving the highest

numbers of votes cast by the covered persons in the preliminary vote. For all other matters, all voting shares will

be voted in accordance with the majority of the votes cast by the covered persons in the preliminary vote.

Common Stock

Each holder of common stock is entitled to one vote for each share owned of record on all matters submitted to a

vote of shareholders. There are no cumulative voting rights. Accordingly, the holders of a plurality of the shares of

common stock voting in a contested election of directors can elect all the directors if they choose to do so, subject

to any voting rights of holders of preferred stock to elect directors. In an uncontested director election, a director

must receive a majority of the votes cast for or against the director to be elected.

Subject to the preferential rights of any holders of any outstanding series of preferred stock, the holders of

common stock, together with the holders of the nonvoting common stock, are entitled to such dividends and

distributions, whether payable in cash or otherwise, as may be declared from time to time by the Company’s board

of directors from legally available funds. Subject to the preferential rights of holders of any outstanding series of

preferred stock, upon the Company’s liquidation, dissolution or winding up and after payment of all prior claims, the

holders of common stock, with the shares of the common stock and the nonvoting common stock being

considered as a single class for this purpose, will be entitled to receive pro rata all the Company’s assets. Holders

of common stock have no redemption or conversion rights or preemptive rights to purchase or subscribe for

securities of the Company.

Nonvoting Common Stock

The nonvoting common stock has the same rights and privileges as, ranks equally and shares proportionately

with, and is identical in all respects as to all matters to, the common stock, except that the nonvoting common

stock has no voting rights other than those voting rights required by law.

Section 203 of the Delaware General Corporation Law

The Company is subject to the provisions of Section 203 of the Delaware General Corporation Law. In general,

Section 203 prohibits a publicly held Delaware corporation from engaging in a “business combination” with an

“interested stockholder” for a period of three years after the date of the transaction in which the person became an

interested stockholder, unless the business combination is approved in a prescribed manner. A “business

combination” includes a merger, asset sale or a transaction resulting in a financial benefit to the interested

stockholder. An “interested stockholder” is a person who, together with affiliates and associates, owns (or, in

certain cases, within the preceding three years, did own) 15% or more of the corporation’s outstanding voting

stock. Under Section 203, a business combination between the Company and an interested stockholder is

prohibited unless it satisfies one of the following conditions:

• prior to the stockholder becoming an interested stockholder, the board of directors of the

Company must have previously approved either the business combination or the transaction that

resulted in the stockholder becoming an interested stockholder;

• on consummation of the transaction that resulted in the stockholder becoming an interested

stockholder, the interested stockholder owned at least 85% of the voting stock of the Company

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outstanding at the time the transaction commenced, excluding, for purposes of determining the

number of shares outstanding (but not the outstanding voting stock owned by the interested

stockholder), those shares owned (i) by persons who are directors and also officers and (ii)

employee stock plans in which employee participants do not have the right to determine

confidentially whether shares held subject to the plan will be tendered in a tender or exchange

offer; or

• at or subsequent to such time the business combination is approved by the board of directors and

authorized at an annual or special meeting of stockholders, and not by written consent, by the

affirmative vote of at least 66 2⁄3% of the outstanding voting stock which is not owned by the

interested stockholder.

The Company’s board of directors has adopted a resolution providing that the shareholders’ agreement will not

create an “interested stockholder.”

Certain Anti-Takeover Matters

The Company’s restated certificate of incorporation and amended and restated by-laws include a number of

provisions that may have the effect of encouraging persons considering unsolicited tender offers or other unilateral

takeover proposals to negotiate with the Company’s board of directors rather than pursue non-negotiated takeover

attempts. These provisions include:

Constituency Provision

In accordance with the Company’s restated certificate of incorporation, a director of the Company may (but is not

required to) in taking any action (including an action that may involve or relate to a change or potential change in

control of the Company), consider, among other things, the effects that the Company’s actions may have on other

interests or persons (including its employees, former partners of The Goldman Sachs Group, L.P. and the

community) in addition to the Company’s shareholders.

Advance Notice Requirements

The Company’s amended and restated by-laws establish advance notice procedures with regard to shareholder

proposals relating to the nomination of candidates for election as directors or new business to be brought before

meetings of shareholders of the Company. These procedures provide that notice of such shareholder proposals

must be timely given in writing to the Secretary of the Company prior to the meeting at which the action is to be

taken. The time periods vary depending on the nature of the proposal. The notice must contain certain information

specified in the amended and restated by-laws and must otherwise comply with the amended and restated by-

laws.

Limitation on Ability of Shareholders to Call Special Meetings

The Company’s restated certificate of incorporation and amended and restated by-laws provide procedures

pursuant to which holders of record of not less than 25% of the voting power of outstanding shares of the

Company’s common stock may call a special meeting of shareholders. The Company’s amended and restated by-

laws impose certain procedural requirements on shareholders requesting such a meeting (including the provision

of the same information required for shareholder proposals at annual meetings under the Company’s advance

notice by-law provisions described above), as well as qualifications designed to prevent duplicative and

unnecessary meetings.

No Written Consent of Shareholders

The Company’s restated certificate of incorporation requires all shareholder actions to be taken by a vote of the

shareholders at an annual or special meeting, and does not permit the Company’s shareholders to act by written

consent without a meeting.

Blank Check Preferred Stock

The Company’s restated certificate of incorporation provides for 150,000,000 authorized shares of preferred stock.

The existence of authorized but unissued shares of preferred stock may enable the board of directors to render

more difficult or to discourage an attempt to obtain control of the Company by means of a merger, tender offer,

proxy contest or otherwise. For example, if in the due exercise of its fiduciary obligations, the board of directors

were to determine that a takeover proposal is not in the best interests of the Company, the board of directors could

cause shares of preferred stock to be issued without shareholder approval in one or more private offerings or other

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transactions that might dilute the voting or other rights of the proposed acquiror or insurgent shareholder or

shareholder group. In this regard, the restated certificate of incorporation grants the Company’s board of directors

broad power to establish the rights and preferences of authorized and unissued shares of preferred stock. The

issuance of shares of preferred stock could decrease the amount of earnings and assets available for distribution

to holders of shares of common stock. The issuance may also adversely affect the rights and powers, including

voting rights, of such holders and may have the effect of delaying, deterring or preventing a change in control of

the Company.

Listing

The common stock of the Company is listed on the NYSE under the ticker symbol “GS.”

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DESCRIPTION OF THE DEPOSITARY SHARES, EACH REPRESENTING 1/1,000

INTEREST IN A SHARE

OF FLOATING RATE NON-CUMULATIVE PREFERRED STOCK, SERIES A

DESCRIPTION OF SERIES A PREFERRED STOCK

The depositary is the sole holder of the Company’s Floating Rate Non-Cumulative Preferred Stock, Series A (the

“Series A Preferred Stock”), and all references herein to the holders of the Series A Preferred Stock shall mean

the depositary. However, the holders of depositary shares are entitled, through the depositary, to exercise the

rights and preferences of the holders of the Series A Preferred Stock, as described below under “Description of

Depositary Shares.”

The following is a brief description of the material terms of the Series A Preferred Stock. The following summary of

the terms and provisions of the Series A Preferred Stock does not purport to be complete and is qualified in its

entirety by reference to the pertinent sections of the Company’s restated certificate of incorporation, which is an

exhibit to the Annual Report of which this exhibit is a part. Unless the context otherwise provides, all references to

the Company in this description refer only to The Goldman Sachs Group, Inc. and does not include its

consolidated subsidiaries.

General

The Company’s authorized capital stock includes 150,000,000 shares of preferred stock, par value $0.01 per

share. The Series A Preferred Stock is part of a single series of the Company’s authorized preferred stock. The

Company may from time to time, without notice to or the consent of holders of the Series A Preferred Stock, issue

additional shares of the Series A Preferred Stock, up to the maximum number of authorized but unissued shares.

Shares of the Series A Preferred Stock rank senior to the Company’s common stock, equally with each other

series of the Company’s preferred stock outstanding as of December 31, 2020 and at least equally to each other

series of preferred stock that the Company may issue (except for any senior series that may be issued with the

requisite consent of the holders of the Series A Preferred Stock), with respect to the payment of dividends and

distributions of assets upon liquidation, dissolution or winding up. In addition, the Company will generally be able

to pay dividends and distributions upon liquidation, dissolution or winding up only out of lawfully available funds for

such payment (i.e., after taking account of all indebtedness and other non-equity claims). The Series A Preferred

Stock is fully paid and nonassessable, which means that its holders have paid their purchase price in full and that

the Company may not ask them to surrender additional funds. Holders of Series A Preferred Stock do not have

preemptive or subscription rights to acquire more stock of the Company.

The Series A Preferred Stock is not convertible into, or exchangeable for, shares of any other class or series of

stock or other securities of the Company, except under certain limited circumstances described below under “—

Regulatory Changes Relating to Capital Adequacy.” The Series A Preferred Stock has no stated maturity and is not

subject to any sinking fund or other obligation of the Company to redeem or repurchase the Series A Preferred

Stock. The Series A Preferred Stock represents non-withdrawable capital, is not a bank deposit and is not insured

by the FDIC or any other governmental agency, nor is it the obligation of, or guaranteed by, a bank.

Dividends

Dividends on shares of the Series A Preferred Stock are not mandatory. Holders of Series A Preferred Stock are

entitled to receive, when, as and if declared by the Company’s board of directors or a duly authorized committee of

the board, out of funds legally available for the payment of dividends under Delaware law, non-cumulative cash

dividends from the original issue date, quarterly in arrears on the 10

day of February, May, August and November

of each year (each, a “dividend payment date”). These dividends accrue, with respect to each dividend period, on

the liquidation preference amount of $25,000 per share (equivalent to $25 per depositary share) at a rate per

annum equal to the greater of (1) 0.75% above LIBOR (as described below) on the related LIBOR determination

date (as described below) or (2) 3.75%. In the event that the Company issues additional shares of Series A

Preferred Stock after the original issue date, dividends on such shares may accrue from the original issue date or

any other date the Company specifies at the time such additional shares are issued.

Dividends will be payable to holders of record of Series A Preferred Stock as they appear on the Company’s books

on the applicable record date, which shall be the 15th calendar day before that dividend payment date or such

other record date fixed by the Company’s board of directors (or a duly authorized committee of the board) that is

not more than 60 nor less than 10 days prior to such dividend payment date (each, a “dividend record date”).

These dividend record dates will apply regardless of whether a particular dividend record date is a business day.

The corresponding record dates for the depositary shares are the same as the record dates for the Series A

Preferred Stock.

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A dividend period is the period from and including a dividend payment date to but excluding the next dividend

payment date. Dividends payable on the Series A Preferred Stock are computed on the basis of a 360-day year

and the actual number of days elapsed in the dividend period. If any date on which dividends would otherwise be

payable is not a business day, then the dividend payment date will be the next succeeding business day unless

such day falls in the next calendar month, in which case the dividend payment date will be the immediately

preceding day that is a business day.

For any dividend period, LIBOR shall be determined by the calculation agent on the second London business day

immediately preceding the first day of such dividend period in the following manner:

• LIBOR will be the offered rate per annum for three-month deposits in U.S. dollars, beginning on

the first day of such period, as that rate appears on Moneyline Telerate Page 3750 as of 11:00

A.M., London time, on the second London business day immediately preceding the first day of

such dividend period.

• If the rate described above does not appear on Moneyline Telerate page 3750, LIBOR will be

determined on the basis of the rates, at approximately 11:00 A.M., London time, on the second

London business day immediately preceding the first day of such dividend period, at which

deposits of the following kind are offered to prime banks in the London interbank market by four

major banks in that market selected by the calculation agent: three-month deposits in U.S.

dollars, beginning on the first day of such dividend period, and in a Representative Amount. The

calculation agent will request the principal London office of each of these banks to provide a

quotation of its rate. If at least two quotations are provided, LIBOR for the second London

business day immediately preceding the first day of such dividend period will be the arithmetic

mean of the quotations.

• If fewer than two quotations are provided as described above, LIBOR for the second London

business day immediately preceding the first day of such dividend period will be the arithmetic

mean of the rates for loans of the following kind to leading European banks quoted, at

approximately 11:00 A.M. New York City time on the second London business day immediately

preceding the first day of such dividend period, by three major banks in New York City selected

by the calculation agent: three-month loans of U.S. dollars, beginning on the first day of such

dividend period, and in a Representative Amount.

• If fewer than three banks selected by the calculation agent are quoting as described above,

LIBOR for the new dividend period will be LIBOR in effect for the prior dividend period.

Under the Federal Reserve System’s (“FRB”) final rule and the Adjustable Interest Rate Act (“LIBOR Act”), on the

first London business day following June 30, 2023, LIBOR will be replaced with three-month term Secured

Overnight Financing Rate (“SOFR”) plus the statutorily prescribed tenor spread.

The calculation agent’s determination of any dividend rate, and its calculation of the amount of dividends for any

dividend period, will be on file at the Company’s principal offices, will be made available to any stockholder upon

request and will be final and binding in the absence of manifest error.

This subsection uses several terms that have special meanings relevant to calculating LIBOR. Those terms have

the following meanings:

The term “Representative Amount” means an amount that, in the calculation agent’s judgment, is representative of

a single transaction in the relevant market at the relevant time.

The term “Moneyline Telerate Page” means the display on Moneyline Telerate, Inc., or any successor service, on

the page or pages specified herein or any replacement page or pages on that service.

The term “business day” means a day that is a Monday, Tuesday, Wednesday, Thursday or Friday and is not a day

on which banking institutions in New York City generally are authorized or obligated by law or executive order to

close.

The term “London business day” means a day that is a Monday, Tuesday, Wednesday, Thursday or Friday and is a

day on which dealings in U.S. dollars are transacted in the London interbank market.

Dividends on shares of Series A Preferred Stock are not cumulative. Accordingly, if the board of directors of the

Company, or a duly authorized committee of the board, does not declare a dividend on the Series A Preferred

Stock payable in respect of any dividend period before the related dividend payment date, such dividend will not

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accrue and the Company will have no obligation to pay a dividend for that dividend period on the dividend payment

date or at any future time, whether or not dividends on the Series A Preferred Stock are declared for any future

dividend period.

So long as any share of Series A Preferred Stock remains outstanding, no dividend shall be paid or declared on

the Company’s common stock or any other shares of the Company’s junior stock (as defined below) (other than a

dividend payable solely in junior stock), and no common stock or other junior stock shall be purchased, redeemed

or otherwise acquired for consideration by the Company, directly or indirectly (other than as a result of a

reclassification of junior stock for or into other junior stock, or the exchange or conversion of one share of junior

stock for or into another share of junior stock and other than through the use of the proceeds of a substantially

contemporaneous sale of junior stock), during a dividend period, unless the full dividends for the latest completed

dividend period on all outstanding shares of Series A Preferred Stock have been declared and paid (or declared

and a sum sufficient for the payment thereof has been set aside). However, the foregoing provision shall not

restrict the ability of Goldman Sachs & Co. LLC, or any of the Company’s other affiliates, to engage in any market-

making transactions in the Company’s junior stock in the ordinary course of business.

As used in this description of the Series A Preferred Stock, “junior stock” means any class or series of stock of the

Company that ranks junior to the Series A Preferred Stock either as to the payment of dividends or as to the

distribution of assets upon any liquidation, dissolution or winding up of the Company. Junior stock includes the

Company’s common stock.

When dividends are not paid (or duly provided for) on any dividend payment date (or, in the case of parity stock, as

defined below, having dividend payment dates different from the dividend payment dates pertaining to the Series A

Preferred Stock, on a dividend payment date falling within the related dividend period for the Series A Preferred

Stock) in full upon the Series A Preferred Stock and any shares of parity stock, all dividends declared upon the

Series A Preferred Stock and all such equally ranking securities payable on such dividend payment date (or, in the

case of parity stock having dividend payment dates different from the dividend payment dates pertaining to the

Series A Preferred Stock, on a dividend payment date falling within the related dividend period for the Series A

Preferred Stock) shall be declared pro rata so that the respective amounts of such dividends shall bear the same

ratio to each other as all accrued but unpaid dividends per share on the Series A Preferred Stock and all parity

stock payable on such dividend payment date (or, in the case of parity stock having dividend payment dates

different from the dividend payment dates pertaining to the Series A Preferred Stock, on a dividend payment date

falling within the related dividend period for the Series A Preferred Stock) bear to each other.

As used in this description of the Series A Preferred Stock, “parity stock” means any other class or series of stock

of the Company that ranks equally with the Series A Preferred Stock in the payment of dividends and in the

distribution of assets on any liquidation, dissolution or winding up of the Company.

Subject to the foregoing, such dividends (payable in cash, stock or otherwise) as may be determined by the

Company’s board of directors (or a duly authorized committee of the board) may be declared and paid on the

Company’s common stock and any other stock ranking equally with or junior to the Series A Preferred Stock from

time to time out of any funds legally available for such payment, and the shares of the Series A Preferred Stock

shall not be entitled to participate in any such dividend.

Liquidation Rights

Upon any voluntary or involuntary liquidation, dissolution or winding up of the Company, holders of the Series A

Preferred Stock are entitled to receive out of assets of the Company available for distribution to stockholders, after

satisfaction of liabilities to creditors, if any, before any distribution of assets is made to holders of common stock or

of any of the Company’s other shares of stock ranking junior as to such a distribution to the shares of Series A

Preferred Stock, a liquidating distribution in the amount of $25,000 per share (equivalent to $25 per depositary

share) plus declared and unpaid dividends, without accumulation of any undeclared dividends. Holders of the

Series A Preferred Stock will not be entitled to any other amounts from the Company after they have received their

full liquidation preference.

In any such distribution, if the assets of the Company are not sufficient to pay the liquidation preferences in full to

all holders of the Series A Preferred Stock and all holders of any other shares of the Company’s stock ranking

equally as to such distribution with the Series A Preferred Stock, the amounts paid to the holders of Series A

Preferred Stock and to the holders of all such other stock will be paid pro rata in accordance with the respective

aggregate liquidation preferences of those holders. In any such distribution, the “liquidation preference” of any

holder of preferred stock means the amount payable to such holder in such distribution, including any declared but

unpaid dividends (and any unpaid, accrued cumulative dividends in the case of any holder of stock on which

dividends accrue on a cumulative basis). If the liquidation preference has been paid in full to all holders of Series A

Preferred Stock, the holders of the Company’s other stock shall be entitled to receive all remaining assets of the

Company according to their respective rights and preferences.

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For purposes of this description of the Series A Preferred Stock, the merger or consolidation of the Company with

any other entity, including a merger or consolidation in which the holders of Series A Preferred Stock receive cash,

securities or property for their shares, or the sale, lease or exchange of all or substantially all of the assets of the

Company for cash, securities or other property shall not constitute a liquidation, dissolution or winding up of the

Company.

Redemption

The Series A Preferred Stock is not subject to any mandatory redemption, sinking fund or other similar provisions.

The Series A Preferred Stock is currently redeemable at the Company’s option, in whole or in part, upon not less

than 30 nor more than 60 days’ notice, at a redemption price equal to $25,000 per share (equivalent to $25 per

depositary share), plus declared and unpaid dividends, without accumulation of any undeclared dividends. Holders

of Series A Preferred Stock have no right to require the redemption or repurchase of the Series A Preferred Stock.

If shares of the Series A Preferred Stock are to be redeemed, the notice of redemption shall be given by first-class

mail to the holders of record of the Series A Preferred Stock to be redeemed, mailed not less than 30 days nor

more than 60 days prior to the date fixed for redemption thereof (provided that, if the depositary shares

representing the Series A Preferred Stock are held in book-entry form through The Depository Trust Company, or

“DTC,” the Company may give such notice in any manner permitted by the DTC). Each notice of redemption will

include a statement setting forth: (i) the redemption date, (ii) the number of shares of the Series A Preferred Stock

to be redeemed and, if less than all the shares held by such holder are to be redeemed, the number of such

shares to be redeemed from such holder, (iii) the redemption price and (iv) the place or places where holders may

surrender certificates evidencing shares of Series A Preferred Stock for payment of the redemption price. If notice

of redemption of any shares of Series A Preferred Stock has been given and if the funds necessary for such

redemption have been set aside by the Company for the benefit of the holders of any shares of Series A Preferred

Stock so called for redemption, then, from and after the redemption date, dividends will cease to accrue on such

shares of Series A Preferred Stock, such shares of Series A Preferred Stock shall no longer be deemed

outstanding and all rights of the holders of such shares will terminate, except the right to receive the redemption

price.

In case of any redemption of only part of the shares of the Series A Preferred Stock at the time outstanding, the

shares to be redeemed shall be selected either pro rata or in such other manner as the Company may determine

to be fair and equitable.

See “Description of Depositary Shares” below for information about redemption of the depositary shares relating to

the Company’s Series A Preferred Stock.

Regulatory Changes Relating to Capital Adequacy

The SEC had previously approved the application of the Company and Goldman Sachs & Co. LLC to be

supervised by the SEC as a consolidated supervised entity (“CSE”) pursuant to the SEC’s rules at that time

relating to CSEs (referred to as the “CSE Rules”). The Company treated the Series A Preferred Stock as allowable

capital in accordance with the CSE Rules (such capital is referred to below as “Allowable Capital”).

If the regulatory capital requirements that apply to the Company change in the future, the Series A Preferred Stock

may be converted, at the Company’s option and without consent of the holders, into a new series of preferred

stock, subject to the limitations described below. The Company will be entitled to exercise this conversion right as

follows.

If both of the following occur:

• the Company (by election or otherwise) becomes subject to any law, rule, regulation or guidance

(together, “regulations”) relating to the Company’s capital adequacy, which regulation (i) modifies

the existing requirements for treatment as Allowable Capital, (ii) provides for a type or level of

capital characterized as “Tier 1” or its equivalent pursuant to regulations of any governmental

body having jurisdiction over the Company (or any of the Company’s subsidiaries or consolidated

affiliates) and implementing capital standards published by the Basel Committee on Banking

Supervision, the SEC, the Board of Governors of the Federal Reserve System (the “Federal

Reserve Board”) or any other United States national governmental body, or any other applicable

regime based on capital standards published by the Basel Committee on Banking Supervision or

its successor, or (iii) provides for a type of capital that in the Company’s judgment (after

consultation with counsel of recognized standing) is substantially equivalent to such “Tier 1”

capital (such capital described in either (ii) or (iii) is referred to below as “Tier 1 Capital

Equivalent”), and

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• the Company affirmatively elects to qualify the Series A Preferred Stock for such Allowable

Capital or Tier 1 Capital Equivalent treatment without any sublimit or other quantitative restriction

on the inclusion of the Series A Preferred Stock in Allowable Capital or Tier 1 Capital Equivalent

(other than any limitation the Company elects to accept and any limitation requiring that common

equity or a specified form of common equity constitute the dominant form of Allowable Capital or

Tier 1 Capital Equivalent) under such regulations,

then, upon such affirmative election, the Series A Preferred Stock shall be convertible at the Company’s option into

a new series of preferred stock having terms and provisions substantially identical to those of the Series A

Preferred Stock, except that such new series may have such additional or modified rights, preferences, privileges

and voting powers, and such limitations and restrictions thereof, as are necessary, in the Company’s judgment

(after consultation with counsel of recognized standing), to comply with the Required Unrestricted Capital

Provisions (defined below), provided that the Company will not cause any such conversion unless the Company

determines that the rights, preferences, privileges and voting powers of such new series of preferred stock, taken

as a whole, are not materially less favorable to the holders thereof than the rights, preferences, privileges and

voting powers of the Series A Preferred Stock, taken as a whole. For example, the Company could agree to restrict

its ability to pay dividends on or redeem the new series of preferred stock for a specified period or indefinitely, to

the extent permitted by the terms and provisions of the new series of preferred stock, since such a restriction

would be permitted in the Company’s discretion under the terms and provisions of the Series A Preferred Stock.

The Company will provide notice to holders of the Series A Preferred Stock of any election to qualify the Series A

Preferred Stock for Allowable Capital or Tier 1 Capital Equivalent treatment and of any determination to convert the

Series A Preferred Stock into a new series of preferred stock, promptly upon the effectiveness of any such election

or determination. A copy of any such notice and of the relevant regulations will be on file at the Company’s

principal offices and, upon request, will be made available to any stockholder.

As used above, the term “Required Unrestricted Capital Provisions” means the terms that are, in the Company’s

judgment (after consultation with counsel of recognized standing), required for preferred stock to be treated as

Allowable Capital or Tier 1 Capital Equivalent, as applicable, without any sublimit or other quantitative restriction

on the inclusion of such preferred stock in Allowable Capital or Tier 1 Capital Equivalent (other than any limitation

the Company elects to accept and any limitation requiring that common equity or a specified form of common

equity constitute the dominant form of Allowable Capital or Tier 1 Capital Equivalent) pursuant to applicable

regulations.

Voting Rights

Except as provided below, the holders of the Series A Preferred Stock have no voting rights.

Whenever dividends on any shares of the Series A Preferred Stock shall have not been declared and paid for the

equivalent of six or more dividend payments, whether or not for consecutive dividend periods (as used in this

section, a “Nonpayment”), the holders of such shares, voting together as a class with holders of any and all other

series of voting preferred stock (as defined below) then outstanding, will be entitled to vote for the election of a

total of two additional members of the Company’s board of directors (as used in this section, the “Preferred Stock

Directors”), provided that the election of any such directors shall not cause the Company to violate the corporate

governance requirement of the New York Stock Exchange (or any other exchange on which the Company’s

securities may be listed) that listed companies must have a majority of independent directors. In that event, the

number of directors on the Company’s board of directors shall automatically increase by two, and the new

directors shall be elected at a special meeting called at the request of the holders of record of at least 20% of the

Series A Preferred Stock or of any other series of voting preferred stock (unless such request is received less than

90 days before the date fixed for the next annual or special meeting of the stockholders, in which event such

election shall be held at such next annual or special meeting of stockholders), and at each subsequent annual

meeting. These voting rights will continue until dividends on the shares of the Series A Preferred Stock and any

such series of voting preferred stock for at least four dividend periods, whether or not consecutive, following the

Nonpayment shall have been fully paid (or declared and a sum sufficient for the payment of such dividends shall

have been set aside for payment).

As used in this description of the Series A Preferred Stock, “voting preferred stock” means any other class or

series of preferred stock of the Company ranking equally with the Series A Preferred Stock either as to dividends

or the distribution of assets upon liquidation, dissolution or winding up and upon which like voting rights have been

conferred and are exercisable. Whether a plurality, majority or other portion of the shares of Series A Preferred

Stock and any other voting preferred stock have been voted in favor of any matter shall be determined by

reference to the liquidation amounts of the shares voted.

If and when dividends for at least four dividend periods, whether or not consecutive, following a Nonpayment have

been paid in full (or declared and a sum sufficient for such payment shall have been set aside), the holders of the

Series A Preferred Stock shall be divested of the foregoing voting rights (subject to revesting in the event of each

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subsequent Nonpayment) and, if such voting rights for all other holders of voting preferred stock have terminated,

the term of office of each Preferred Stock Director so elected shall terminate and the number of directors on the

board of directors shall automatically decrease by two. In determining whether dividends have been paid for four

dividend periods following a Nonpayment, the Company may take account of any dividend the Company elects to

pay for such a dividend period after the regular dividend date for that period has passed. Any Preferred Stock

Director may be removed at any time without cause by the holders of record of a majority of the outstanding

shares of the Series A Preferred Stock when they have the voting rights described above (voting together as a

class with all series of voting preferred stock then outstanding). So long as a Nonpayment shall continue, any

vacancy in the office of a Preferred Stock Director (other than prior to the initial election after a Nonpayment) may

be filled by the written consent of the Preferred Stock Director remaining in office, or if none remains in office, by a

vote of the holders of record of a majority of the outstanding shares of Series A Preferred Stock when they have

the voting rights described above (voting together as a class with all series of voting preferred stock then

outstanding). The Preferred Stock Directors shall each be entitled to one vote per director on any matter.

So long as any shares of Series A Preferred Stock remain outstanding, the Company will not, without the

affirmative vote or consent of the holders of at least two-thirds of the outstanding shares of the Series A Preferred

Stock and all other series of voting preferred stock entitled to vote thereon, voting together as a single class, given

in person or by proxy, either in writing or at a meeting:

• amend or alter the provisions of the Company’s restated certificate of incorporation so as to

authorize or create, or increase the authorized amount of, any class or series of stock ranking

senior to the Series A Preferred Stock with respect to payment of dividends or the distribution of

assets upon liquidation, dissolution or winding up of the Company;

• amend, alter or repeal the provisions of the Company’s restated certificate of incorporation so as

to materially and adversely affect the special rights, preferences, privileges and voting powers of

the Series A Preferred Stock, taken as a whole; or

• consummate a binding share exchange or reclassification involving the Series A Preferred Stock

or a merger or consolidation of the Company with another entity, unless in each case (i) the

shares of Series A Preferred Stock remain outstanding or, in the case of any such merger or

consolidation with respect to which the Company is not the surviving or resulting entity, are

converted into or exchanged for preference securities of the surviving or resulting entity or its

ultimate parent, and (ii) such shares remaining outstanding or such preference securities, as the

case may be, have such rights, preferences, privileges and voting powers, taken as a whole, as

are not materially less favorable to the holders thereof than the rights, preferences, privileges and

voting powers of the Series A Preferred Stock, taken as a whole;

provided, however, that any increase in the amount of the authorized or issued Series A Preferred Stock or

authorized preferred stock or the creation and issuance, or an increase in the authorized or issued amount, of

other series of preferred stock ranking equally with and/or junior to the Series A Preferred Stock with respect to the

payment of dividends (whether such dividends are cumulative or non-cumulative) and/or the distribution of assets

upon liquidation, dissolution or winding up of the Company will not be deemed to adversely affect the special

rights, preferences, privileges or voting powers of the Series A Preferred Stock. In addition, any conversion of the

Series A Preferred Stock upon the occurrence of certain regulatory events, as discussed above under “—

Regulatory Changes Relating to Capital Adequacy,” will not be deemed to adversely affect the special rights,

preferences, privileges or voting powers of the Series A Preferred Stock.

If an amendment, alteration, repeal, share exchange, reclassification, merger or consolidation described above

would adversely affect one or more but not all series of voting preferred stock (including the Series A Preferred

Stock for this purpose), then only the series affected and entitled to vote shall vote as a class in lieu of all such

series of preferred stock.

Without the consent of the holders of the Series A Preferred Stock, so long as such action does not adversely

affect the special rights, preferences, privileges and voting powers of the Series A Preferred Stock, taken as a

whole, the Company may amend, alter, supplement or repeal any terms of the Series A Preferred Stock:

• to cure any ambiguity, or to cure, correct or supplement any provision contained in the certificate

of designation for the Series A Preferred Stock that may be defective or inconsistent; or

• to make any provision with respect to matters or questions arising with respect to the Series A

Preferred Stock that is not inconsistent with the provisions of the certificate of designations.

The foregoing voting provisions will not apply if, at or prior to the time when the act with respect to which such vote

would otherwise be required shall be effected, all outstanding shares of Series A Preferred Stock shall have been

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redeemed or called for redemption upon proper notice and sufficient funds shall have been set aside by the

Company for the benefit of the holders of the Series A Preferred Stock to effect such redemption.

DESCRIPTION OF DEPOSITARY SHARES

Please note that as used in this section, references to “holders” of depositary shares mean those who own

depositary shares registered in their own names, on the books that the Company or the depositary maintain for

this purpose, and not indirect holders who own beneficial interests in depositary shares registered in street name

or issued in book-entry form through The Depository Trust Company.

General

The Company has issued fractional interests in shares of preferred stock in the form of depositary shares, each

representing a 1/1,000

ownership interest in a share of Series A Preferred Stock and evidenced by a depositary

receipt. The shares of Series A Preferred Stock represented by depositary shares are deposited under a deposit

agreement among the Company, the depositary and the holders from time to time of the depositary receipts

evidencing the depositary shares. Subject to the terms of the deposit agreement, each holder of a depositary

share is entitled, through the depositary, in proportion to the applicable fraction of a share of Series A Preferred

Stock represented by such depositary share, to all the rights and preferences of the Series A Preferred Stock

represented thereby (including dividend, voting, redemption and liquidation rights).

Dividends and Other Distributions

The depositary will distribute any cash dividends or other cash distributions received in respect of the deposited

Series A Preferred Stock to the record holders of depositary shares relating to the underlying Series A Preferred

Stock in proportion to the number of depositary shares held by the holders. The depositary will distribute any

property received by it other than cash to the record holders of depositary shares entitled to those distributions,

unless it determines that the distribution cannot be made proportionally among those holders or that it is not

feasible to make a distribution. In that event, the depositary may, with the Company’s approval, sell the property

and distribute the net proceeds from the sale to the holders of the depositary shares in proportion to the number of

depositary shares they hold.

Record dates for the payment of dividends and other matters relating to the depositary shares will be the same as

the corresponding record dates for the Series A Preferred Stock.

The amounts distributed to holders of depositary shares will be reduced by any amounts required to be withheld by

the depositary or by the Company on account of taxes or other governmental charges.

Redemption of Depositary Shares

If the Company redeems the Series A Preferred Stock represented by the depositary shares, the depositary shares

will be redeemed from the proceeds received by the depositary resulting from the redemption of the Series A

Preferred Stock held by the depositary. The redemption price per depositary share will be equal to 1/1,000

of the

redemption price per share payable with respect to the Series A Preferred Stock (or $25 per depositary share).

Whenever the Company redeems shares of Series A Preferred Stock held by the depositary, the depositary will

redeem, as of the same redemption date, the number of depositary shares representing shares of Series A

Preferred Stock so redeemed.

In case of any redemption of less than all of the outstanding depositary shares, the depositary shares to be

redeemed will be selected by the depositary pro rata or in such other manner determined by the depositary to be

equitable. In any such case, the Company will redeem depositary shares only in increments of 1,000 shares and

any multiple thereof.

Voting the Series A Preferred Stock

When the depositary receives notice of any meeting at which the holders of the Series A Preferred Stock are

entitled to vote, the depositary will mail the information contained in the notice to the record holders of the

depositary shares relating to the Series A Preferred Stock. Each record holder of the depositary shares on the

record date, which will be the same date as the record date for the Series A Preferred Stock, may instruct the

depositary to vote the amount of the Series A Preferred Stock represented by the holder’s depositary shares. To

the extent possible, the depositary will vote the amount of the Series A Preferred Stock represented by depositary

shares in accordance with the instructions it receives. The Company will agree to take all reasonable actions that

the depositary determines are necessary to enable the depositary to vote as instructed. If the depositary does not

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receive specific instructions from the holders of any depositary shares representing the Series A Preferred Stock, it

will vote all depositary shares of that series held by it proportionately with instructions received.

Listing

The depositary shares are listed on the New York Stock Exchange under the ticker symbol “GS PrA.”

Form of Preferred Stock and Depositary Shares

The depositary shares are issued in book-entry form through The Depository Trust Company. The Series A

Preferred Stock is issued in registered form to the depositary.

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DESCRIPTION OF THE DEPOSITARY SHARES, EACH REPRESENTING 1/1,000

INTEREST IN A SHARE

OF FLOATING RATE NON-CUMULATIVE PREFERRED STOCK, SERIES C

DESCRIPTION OF SERIES C PREFERRED STOCK

The depositary is the sole holder of the Company’s Floating Rate Non-Cumulative Preferred Stock, Series C (the

“Series C Preferred Stock”), and all references herein to the holders of the Series C Preferred Stock shall mean

the depositary. However, the holders of depositary shares are entitled, through the depositary, to exercise the

rights and preferences of the holders of the Series C Preferred Stock, as described below under “Description of

Depositary Shares.”

The following is a brief description of the material terms of the Series C Preferred Stock. The following summary of

the terms and provisions of the Series C Preferred Stock does not purport to be complete and is qualified in its

entirety by reference to the pertinent sections of the Company’s restated certificate of incorporation, which is an

exhibit to the Annual Report of which this exhibit is a part. Unless the context otherwise provides, all references to

the Company in this description refer only to The Goldman Sachs Group, Inc. and does not include its

consolidated subsidiaries.

General

The Company’s authorized capital stock includes 150,000,000 shares of preferred stock, par value $0.01 per

share. The Series C Preferred Stock is part of a single series of the Company’s authorized preferred stock. The

Company may from time to time, without notice to or the consent of holders of the Series C Preferred Stock, issue

additional shares of the Series C Preferred Stock, up to the maximum number of authorized but unissued shares.

Shares of the Series C Preferred Stock rank senior to the Company’s common stock, equally with each other

series of the Company’s preferred stock outstanding as of December 31, 2020 and at least equally with each other

series of preferred stock that the Company may issue (except for any senior series that may be issued with the

requisite consent of the holders of the Series C Preferred Stock), with respect to the payment of dividends and

distributions of assets upon liquidation, dissolution or winding up. In addition, the Company will generally be able

to pay dividends and distributions upon liquidation, dissolution or winding up only out of lawfully available funds for

such payment (i.e., after taking account of all indebtedness and other non-equity claims). The Series C Preferred

Stock is fully paid and nonassessable, which means that its holders have paid their purchase price in full and that

the Company may not ask them to surrender additional funds. Holders of Series C Preferred Stock do not have

preemptive or subscription rights to acquire more stock of the Company.

The Series C Preferred Stock is not convertible into, or exchangeable for, shares of any other class or series of

stock or other securities of the Company, except under certain limited circumstances described below under “—

Regulatory Changes Relating to Capital Adequacy.” The Series C Preferred Stock has no stated maturity and is

not subject to any sinking fund or other obligation of the Company to redeem or repurchase the Series C Preferred

Stock. The Series C Preferred Stock represents non-withdrawable capital, is not a bank deposit and is not insured

by the FDIC or any other governmental agency, nor is it the obligation of, or guaranteed by, a bank.

Dividends

Dividends on shares of the Series C Preferred Stock are not mandatory. Holders of Series C Preferred Stock are

entitled to receive, when, as and if declared by the Company’s board of directors or a duly authorized committee of

the board, out of funds legally available for the payment of dividends under Delaware law, non-cumulative cash

dividends from the original issue date, quarterly in arrears on the 10

day of February, May, August, and

November of each year (each, a “dividend payment date”). These dividends accrue, with respect to each dividend

period, on the liquidation preference amount of $25,000 per share (equivalent to $25 per depositary share) at a

rate per annum equal to the greater of (1) 0.75% above LIBOR (as described below) on the related LIBOR

determination date (as described below) or (2) 4.00%. In the event that the Company issues additional shares of

Series C Preferred Stock after the original issue date, dividends on such shares may accrue from the original issue

date or any other date the Company specifies at the time such additional shares are issued.

Dividends will be payable to holders of record of Series C Preferred Stock as they appear on the Company’s books

on the applicable record date, which shall be the 15

calendar day before that dividend payment date or such

other record date fixed by the Company’s board of directors (or a duly authorized committee of the board) that is

not more than 60 nor less than 10 days prior to such dividend payment date (each, a “dividend record date”).

These dividend record dates will apply regardless of whether a particular dividend record date is a business day.

The corresponding record dates for the depositary shares are the same as the record dates for the Series C

Preferred Stock.

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A dividend period is the period from and including a dividend payment date to but excluding the next dividend

payment date. Dividends payable on the Series C Preferred Stock are computed on the basis of a 360-day year