Overview of Goldman Sachs
May 2017
Cautionary Note on Forward-Looking Statements
This presentation may include forward-looking statements. These statements are not historical facts, but instead represent only the
Firm’s beliefs regarding future events, many of which, by their nature, are inherently uncertain and outside of the Firm’s control. It is
possible that the Firm’s actual results and financial condition may differ, possibly materially, from the anticipated results and financial
condition indicated in these forward-looking statements.
For a discussion of some of the risks and important factors that could affect the Firm’s future results and financial condition, see
“Risk Factors” in our Annual Report on Form 10-K (“Form 10-K”) for the year ended December 31, 2016. You should also read the
forward-looking disclaimers in our Form 10-Q for the period ended March 31, 2017, particularly as it relates to capital, liquidity, and
leverage ratios, including the Common Equity Tier 1 (“CET1”) ratios under the Advanced and Standardized approaches on a fully
phased-in basis and the supplementary leverage ratio (“SLR”), and information on the calculation of non-GAAP financial measures
that is posted on the Investor Relations portion of our website: www.gs.com. See the appendix for more information about nonGAAP financial measures in this presentation.
Except as may be indicated on a particular slide, the statements in the presentation are current only as of its date – May 3, 2017.
1
Key Credit Strengths
Well-Positioned
with respect to
Regulatory
Capital Ratios
and Strong
Balance Sheet
 The firm is well-positioned for regulatory capital requirements with 1Q17 CET1 ratios of 14.2% and 12.9% under the
Standardized and Basel III Advanced approaches, respectively, reflecting the applicable transitional provisions
 Our gross leverage is 10.3x as of 1Q17
 In addition, 97% of our balance sheet is marked to market or carried at amounts that approximate fair value as of
1Q17, which means our equity reflects market value
 We have in place a comprehensive and conservative set of liquidity and funding policies that allows us to maintain
significant flexibility to address both GS-specific and broader industry or market liquidity stress events
 Our two major liquidity and funding policies are based on the core principles of:
Best in Class
Liquidity Risk
Management
— Excess liquidity refers to having sufficient cash or highly liquid instruments on hand to meet contractual,
contingent and intraday outflows in a stressed environment
— Asset-liability management refers to having a liability profile that has sufficient term and diversification based
upon the liquidity profile of our assets
 Under the rules on minimum liquidity requirements, approved by the U.S. federal bank regulatory agencies, our
average liquidity coverage ratio (“LCR”) exceeded the minimum requirement for the three months ended March 2017
 We hold sufficient excess liquidity in the form of Global Core Liquid Assets (“GCLA”) to cover potential outflows during
a stressed period
— GCLA ended 1Q17 at $222 billion, reflecting 25% of our period-end balance sheet
Global Core
Liquid Assets
— GCLA is comprised of cash, high quality and narrowly defined unencumbered assets, including U.S. Treasuries
and German, French, Japanese and United Kingdom government obligations
 In addition, our U.S. bank subsidiary, GS Bank USA, has access to funding through the Federal Reserve Bank
discount window. While we do not rely on this funding in our liquidity planning and stress testing, we maintain policies
and procedures necessary to access this funding and test discount window borrowing procedures
2
Key Credit Strengths (cont’d)
 Our principal objective is to fund our balance sheet and run the firm with the ability to weather stressed market
conditions without dependence on government support
 Balance sheet comprised of highly liquid assets
— Greater than 90% of the balance sheet was comprised of more liquid assets1 (e.g., cash, reverses/borrows, U.S.
government/agency and other financial instruments) as of 1Q17
Conservative
Asset-Liability
Management
— Businesses subject to conservative balance sheet limits that are reviewed regularly and monitored daily
 Liability term structure – we seek to have long-dated liabilities to reduce our refinancing risk
— Weighted Average Maturity (WAM) of approximately 8 years as of 1Q17 for unsecured long-term borrowings
— WAM >120 days for secured funding2 as of 1Q17 (excluding funding that can only be collateralized by highly liquid
securities eligible for inclusion in our GCLA)
 We maintain broad and diversified funding sources globally
 Counterparties well distributed throughout the U.S., Europe and Asia
 The balance sheet stands at $894 billion as of 1Q17, down ~20% vs. 4Q07
Strong Asset
Quality
 Our asset quality has substantially improved since 4Q07 as our balance sheet reductions targeted less liquid, legacy
exposures such as Level 3 assets
— Level 3 assets3 are down by more than 50% since 4Q07 to $23 billion and represent 2.6% of our balance sheet as
of 1Q17
 From 1999-2016, net revenues have grown at a compound annual growth rate of approximately 5%
Diversified Global
Business with
Profitable Track
Record
1 Excludes
 Average ROE from 1999-2016 of approximately 16%
 Our diversified business model allows us to outperform through cycles
— Although our FICC and Equities Client Execution businesses averaged approximately 39% of net revenues from
2009 through 2016, these businesses are diversified across various products, markets, and regions designed to
serve our global client base, which includes corporations, financial institutions and governments
Level 3, other assets, and investments in funds at NAV
of collateralized financings from the Consolidated Statement of Financial Condition
3 4Q07 Level 3 assets included investments in funds at NAV, 1Q17 excludes these funds
2 Comprised
3
Goldman Sachs’ Credit Profile
Credit Ratings as of May 3, 2017
Moody's
S&P
Fitch
GS Group Inc.
Short-term Debt
P-2
A-2
F1
Long-term Debt
A3
BBB+
A
Baa2
BBB-
A-
Ba1
BB
BB+
Ratings Outlook
Stable
Stable
Stable
GS&Co.
Short-term Debt
N/A
A-1
F1
Long-term Debt
N/A
A+
A+
Ratings Outlook
N/A
Stable
Stable
Goldman Sachs International
Short-term Debt
P-1
A-1
F1
Long-term Debt
A1
A+
A
Ratings Outlook
Stable
Stable
Stable
Goldman Sachs Bank USA
Short-term Debt
P-1
A-1
F1
Long-term Debt
A1
A+
A+
Short-term Bank Deposits
P-1
N/A
F1+
Long-term Bank Deposits
A1
N/A
AA-
Stable
Stable
Stable
Goldman Sachs International Bank
Short-term Debt
P-1
A-1
F1
Long-term Debt
A1
A+
A
Short-term Bank Deposits
P-1
N/A
F1
Long-term Bank Deposits
A1
N/A
A
Stable
Stable
Stable
Subordinated Debt
Preferred Stock
1
Ratings Outlook
Ratings Outlook
1
Preferred Stock includes Group Inc.’s non-cumulative preferred stock and the Normal Automatic Preferred Enhanced Capital Securities (APEX) issued by Goldman Sachs Capital II and Goldman Sachs Capital III
4
Diversified Net Revenue Mix
Diversified by Business
Average 2009 – 2016
Investing &
Lending
15%
Asia
16%
Investment
Banking
16%
Investment
Management
16%
FICC Client
Execution
30%
Securities
Services
5%
Diversified by Geography
Average 2009 – 2016
EMEA
26%
Americas
58%
Commissions
and Fees
9%
Equities Client
Execution
9%
Our goal is to continue to have leading, diverse franchise businesses
5
Financial Performance
Net Earnings ($bn) & ROE (%)1
Net Revenues ($bn)1
$46.0
32.7%
$45.2
32.8%
$13.4
$39.2
$37.7
$11.6
$34.2 $34.2 $34.5$33.8
22.5%
$30.6
$9.5
$28.8
$8.5
$8.4
$7.5
$22.2
11.5%
$8.0
$7.4
$6.1
11.2%
11.0%
10.7%
$4.4
11.4%
9.4%
7.4%
$8.0
$2.3
$2.3
4.9%
3.7%
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 1Q17
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 1Q17 2
Net Earnings
ROE
In connection with becoming a bank holding company, the firm was required to change its fiscal year-end from November to December. This change in the firm’s fiscal year-end resulted in a one-month transition period. For the
one-month ended December 2008, we reported net revenues of $183 million and a net loss of $780 million
² 1Q17 ROE of 11.4% calculated on an annualized basis
1
6
Our Risk Philosophy
Board of Directors
 Senior management awareness of nature and
amount of risk incurred
Board Committees
 Independence of process from the business
Corporate Oversight
Internal Audit
 Fair value accounting is a critical risk mitigant and
is supported by a robust price verification process
Senior Management Oversight
Chief Executive Officer
 Minimize losses and manage risk through:
Presidents/Co-Chief Operating Officers
— Active management
Chief Financial Officer
— Risk mitigation, where possible using collateral
Committee Oversight
— Diversification
Chief Risk Officer
Management Committee
— Return hurdles matched to underlying risks
Firmwide Risk
Committee
Firmwide Client and Business
Standards Committee
Revenue-Producing
Units
Independent Control and
Support Functions
Chief Executive Officer
 Compliance
Presidents/Co-Chief
Operating Officers
Chief Financial Officer
 Conflicts
Capital Management
 Operations
 Technology
— Qualitative and quantitative analysis, but not a
specific formulaic link
 Legal
 Human
 Controllers
 Credit
Chief Risk Officer
 Overall risk tolerance established by assessment
of opportunity relative to potential loss
 Tax
 Treasury
Risk Management  Liquidity Risk Management
 Market Risk Management  Model Risk Management
 Operational Risk Management
 Variety of approaches used to monitor risk
exposures
 Effective risk systems, which are thorough, timely
and flexible
 While we manage risk conservatively, we are in a
risk-taking business and will incur losses
7
Managing Our Risk
4Q07
Balance
Sheet
$1,120bn
-20%
$894bn
Common
Equity
$40bn
1.9x
$76bn
Gross
Leverage
26.2x
-61%
10.3x
GCLA1
$61bn
3.6x
$222bn
Level 3
Assets2
1 Prior
to 4Q09, GCLA reflects loan value and subsequent periods reflect fair value
Level 3 assets included investments in funds at NAV, 1Q17 excludes these funds
2 4Q07
1Q17
Down by more than 50% since 4Q07
8
Balance Sheet
Overview
 Highly liquid balance sheet with 97% of our assets marked to market or carried at amounts that approximate fair value as of 1Q17
— As of 1Q17, greater than 90% of the balance sheet was comprised of more liquid assets1 (e.g., cash, reverses/borrows, U.S.
government/agency and other financial instruments)
 Businesses are subject to conservative balance sheet limits that are reviewed and monitored. In addition, aged inventory limits are
set for certain financial instruments
1Q17 Balance Sheet Allocation²
Other Assets
3%
Balance Sheet² Reduction: 4Q13 to 1Q17 ($bn)
-2%
$911
$894
$22
$27
$61
Investing &
Lending
12%
GCLA and
Cash
26%
$102
-14%
$375
$323
-21%
Institutional
Client
Services
36%
$263
Secured
Client
Financing
23%
+23%
$190
$233
4Q13
1Q17
GCLA and Cash
Institutional Client Services
Other Assets
1
$209
Secured Client Financing
Investing & Lending
Excludes Level 3, other assets and investments in funds at NAV. ² The balance sheet allocation to our businesses is a non-GAAP presentation, see the appendix for more information about this non-GAAP presentation.
9
Capital Update
Shareholders’ Equity ($bn)
Gross and Adjusted Leverage
+15%
$86.9
$75.7
12.4x
$11.2
-17%
10.3x
$6.2
$75.7
$69.5
5.2x1
4Q12
Common Equity
1Q17
Preferred Stock
4Q12
1Q17
Includes (i) Cash and Cash Equivalents, (ii)
Collateralized Agreements, and (iii) Financial
Instruments Owned, at fair value segregated
for regulatory and other purposes
Structurally higher capital levels
 We continue to manage our balance sheet to provide a solid financial foundation and meet client needs and regulatory
requirements. Our equity base has meaningfully expanded and leverage has decreased significantly
 Taking a longer-term perspective, since 4Q07 we have seen significant strengthening of our capital base with common equity
up 1.9x, while our gross leverage ratio has fallen by 61%
Capital growth coupled with active balance sheet management leaves us well-positioned for capital requirements
1
Adjusted leverage is a non-GAAP measure, see the appendix for more information about this non-GAAP measure
10
Capital Ratios
1Q17 Transitional CET1 Ratios1
1Q17 Standardized RWAs ($507bn)1
1Q17 Basel III Advanced RWAs ($558bn)1
14.2%
12.9%
9.5%
2.5%
Estimated
G-SIB
Surcharge2
2.5%
Est. Fully
Phased-in
Regulatory
Requirement in
2019
7.0%
7.0%
Standardized
Basel III Advanced
Market
Risk
16%
Operational
Risk
20%
Credit
Risk
84%
Market Risk
15%
Credit Risk
65%
Supplementary Leverage Ratio3
 Under the Standardized approach, our CET1 ratio as of 1Q17 was
14.2% on a transitional basis and 13.7% on a fully phased-in basis4
6.4%
4.2%
 Under the Basel III Advanced approach, our CET1 ratio as of 1Q17
was 12.9% on a transitional basis and 12.5% on a fully phased-in
basis4
 As of 1Q17 our fully phased-in SLR of 6.4% is compliant with the
2018 requirements
1Q14
1Q17
Calculated on a transitional basis based on the Federal Reserve Board’s final rules. 2 Based on the Federal Reserve Board’s G-SIB final rule issued in July 2015. Represents fully phased-in estimated G-SIB buffer based on
2016 financial data. The buffer in the future may differ from this estimate due to additional guidance from our regulators and/or positional changes. 3 1Q14 SLR is a non-GAAP measure which reflects our best estimate based on
the U.S. federal bank regulatory agencies’ April 2014 proposal. See the appendix for more information about this non-GAAP measure; 1Q17 SLR based on the U.S. federal bank regulatory agencies’ final rule. 4 The fully
phased-in Basel III Advanced and Standardized capital ratios are non-GAAP measures, see the appendix for more information about these non-GAAP measures.
1
11
Conservative and Comprehensive Liquidity Risk Management
Excess Liquidity
 Our most important liquidity policy is to pre-fund
estimated potential liquidity needs in a stressed
environment
 Our GCLA consists of cash and highly-liquid
government and agency securities that would
be readily convertible to cash in a matter of
days
 GCLA size is based on:
— Modeled assessment of the firm’s liquidity
risks, including contractual, behavioral and
market-driven outflows and intraday
demands
Asset-Liability Management
 Conservative asset and liability management
to ensure stability of financing
 Focus on size and composition of assets to
determine appropriate funding strategy
 Secured and unsecured financing with long
tenor relative to the liquidity profile of our
assets in order to withstand a stressed
environment
 Consistently manage overall characteristics of
liabilities, including term, diversification and
excess capacity
— Applicable regulatory requirements
— Qualitative assessment of the conditions of
the financial markets and the firm
— Long-term stress tests, which take a forward
view on our liquidity positions through a
prolonged stress period
Rigorous and conservative stress tests underpin our liquidity and asset-liability management frameworks
12
Liquidity Update
We are focused on maintaining excess liquidity
1Q17 Average GCLA by Entity
 GCLA reflects 25% of our balance sheet as of 1Q17
 In 1Q17, over 80% of our average GCLA was made up of
U.S. government obligations, overnight cash deposits
(which are mainly at the Federal Reserve) and U.S.
federal agency obligations, with the balance in high
quality non-U.S. government obligations
GS Group
18%
Major
BrokerDealer
Subsidiaries
41%
Major Bank
Subsidiaries
41%
 Our GCLA is held at our parent company and each of our
major broker-dealer and bank subsidiaries to ensure that
liquidity is available to meet entity liquidity requirements
Average GCLA Trend ($bn)
We continually enhance the models that drive the size
of our GCLA
+21%
$211
 Our Modeled Liquidity Outflow reflects potential
contractual and contingent outflows of cash or collateral
$180
$218
+3.4x
since
20071
$188
 Our Intraday Liquidity Model provides an assessment of
potential intraday liquidity needs
 Our long-term stress tests take a forward view on our
liquidity positions through a prolonged stress period
2014
2015
2016
1Q17
Our average LCR exceeded the minimum requirement for the three months ended March 2017
1
Prior to 4Q09, GCLA reflects loan value and subsequent periods reflect fair value
13
Asset-Liability Management
 We actively manage and monitor our asset base, with particular focus on liquidity and potential holding period
 Through our dynamic balance sheet management process, we use actual and projected asset balances to determine our funding
requirements
 We conservatively manage the overall characteristics of our funding book, with a focus on maintaining long-term, diversified
sources of financing with tenors appropriate for the anticipated holding period of our assets
 Our plans are reviewed and approved by the Firmwide Finance Committee as well as senior managers in our independent
control and support functions
Principal Sources of Funding
As of 1Q17
% of Total
Assets
Equity and
Long-term
Debt
Deposits


GCLA and Cash
26%
Secured Client
Financing
23%
Institutional Client
Services
36%


Investing & Lending
12%


Other Assets
3%

Total Assets
Secured
Funding
Financial
Instruments
Sold




$894bn
14
Diversification of Funding Sources
As of 1Q17
 Our secured funding1 book is
diversified across:
 Shareholders’ equity is a
significant, stable and
perpetual source of funding
— Counterparties
— Tenor
— Geography
 Term is dictated by the
composition of our fundable
assets with longer maturities
executed for less liquid assets
Secured Funding
$120.6bn
1
Deposits
$127.9bn
Shareholders'
Equity
$86.9bn
Unsecured
Long-Term Debt
$199.4bn
 Unsecured long-term debt
is well diversified across the
tenor spectrum, currency,
investors and geography
 WAM of ~8 years
 Deposits have become a larger source
of funding
 We are focused on contractual term:
approximately 25% of our deposits are
brokered CDs with a 3-year WAM
1
Unsecured ShortTerm Debt
$35.9bn
Comprised of collateralized financings from the Consolidated Statement of Financial Condition
 Unsecured short-term debt includes
$20.4bn of the current portion of our
long-term unsecured debt
15
Secured Funding Principles
We manage our secured funding liquidity risk with:
 Extending initial trade tenors and managing maturities
1
Term
 Pre-rolling and negotiating tenor extensions with clients
 Longer tenors targeted for less liquid assets
2
Diversity
3
Excess Capacity
4
GCLA
 Raising secured funding from a diverse set of funding counterparties
 Raising excess secured funding to insure against rollover risk or growth in assets to finance
 We raise excess unsecured funding and hold as GCLA to mitigate any 30-day modeled
liquidity needs
 Imposing stress test limits to ensure we do not have excessive liquidity risk even in a
severe scenario
5
Stress Tests
— “Funding-at-Risk” (FaR) uses a number of metrics over various time periods to evaluate
the risks in the secured funding book
— Matched book (Cash gap)
16
Unsecured Funding
As of 1Q17
We continue to emphasize diversification across tenor,
currency, channel and instrument
2017 Vanilla Issuance by Currency ($15.1bn)
 2017 year-to-date, we have raised $15.1bn of GS Group longterm unsecured vanilla debt
JPY
1%
EUR
30%
— $15.0bn of senior benchmark notes
— $0.1bn of sub-debt
— Benchmark issuance across the tenor spectrum included 2,
4, 5 and 10-year maturities, mostly with non-round tenors
USD
69%
— ~8 year WAM for the entire unsecured LT debt portfolio
GS Group Long-Term Vanilla Issuance vs. Vanilla Maturities ($bn)1
Scheduled Maturities
2012-2016 Average
Issuance / Maturities: 126%
$24.5
$20.3
$21.9
2013
Vanilla Debt Issuance
1 GS
$23.8
$24.1
$21.1
$19.3
$17.4
2012
$31.3
$29.3
$29.2
$15.1
2014
2015
Preferred Equity Issuance
2016
Maturity
1Q
2017
2Q
3Q
$19.2
$5.2
$2.9
$3.6
$2.7
$4.2
$9.9
$7.3
$7.2
2018
4Q
Group issuance and GS Group upcoming maturity values for 2017 and 2018 are as of March 31, 2017; 2016 maturities include calls/tenders for the year; 2017 maturities include the redemption of CAD 500mm
subordinated debt, which was announced in 1Q and will settle in April 2017
17
Deposit Growth
1Q17 Deposits: $127.9bn (22% of Funding Sources)
Deposit Growth Trends ($bn)
124.1
127.9
Deposit
Sweep
Program
13%
97.5
82.9
Brokered
Certificates
of Deposit
25%
Private Bank
and Online
Retail
52%
15.4
2007
Institutional
10%
2014
Deposits
2015
U.S. Deposits
2016
1Q17
International Deposits
 Deposits have become a larger source of funding and provide a diversified source of liquidity
 In particular, GS Bank USA has raised deposits with an emphasis on long-term CDs, private bank deposits and long-term
relationships with broker-dealer aggregators that sweep their client cash to an FDIC-insured deposit at GS Bank USA
 53% of our deposits are FDIC insured as of 1Q17
Deposits have become a more meaningful source of the Firm’s funding
18
Risk Management Policies
 Policies, limits and exposures reviewed regularly
 Extensive investment in our risk management groups
 Multiple risk metrics used to monitor and manage exposures
 Frequent reporting to / communication with Board and senior management
Risk Overview
 Risk of loss due to
changes in market
conditions
Market Risk
Committee Oversight
 Set market risk limits and  Firmwide Risk Committee
sub-limits at certain
is responsible for the ongoing
product and desk levels
monitoring and management of
through delegated
financial risks, approves risk limits
authority of Firmwide Risk
framework, metrics and
Committee
methodologies
Controls & Active Management
 Market Risk Management centrally
manages market risk by producing
risk measures and monitoring
against established market risk
limits
 Risk Governance Committee
(through delegated authority from
the Firmwide Risk Committee)
approves market risk limits and
sub-limits at firmwide, business and
product levels, consistent with our
risk appetite
 Risk of loss related to
failure of counterparties to
fulfill financial and
contractual obligations
Credit Risk
Management
 Set credit limits for
 Firmwide Risk Committee
counterparties, economic
reviews existing counterparty credit
group, industry and
exposures and approves risk limits
country through delegated
framework, metrics and
authority of Firmwide Risk
methodologies
Committee
 Risk Governance Committee
(through delegated authority from
the Firmwide Risk Committee)
approves credit risk limits at
firmwide, business and product
levels consistent with our risk
appetite
 Credit Risk Management centrally
manages and controls counterparty
credit exposures through the
establishment of limits approved by
Risk Governance Committee and
use of collateral and netting
agreements
19
Risk Management Policies (cont’d)
 Policies, limits and exposures reviewed regularly
 Extensive investment in our risk management groups
 Multiple risk metrics used to monitor and manage exposures
 Frequent reporting to / communication with Board and senior management
Risk Overview
Liquidity Risk
Operational
Risk
Model Risk
Management
 Risk that we will be unable  Control and oversight of
to fund the firm or meet
liquidity risk management
our liquidity needs during
framework, including
stress events
stress testing and limits
 Risk of loss resulting from
inadequate or failed
internal processes, people
and systems or from
external events
Committee Oversight
Controls & Active Management
 Firmwide Finance Committee
approves liquidity risk limits at the
firmwide level
 Liquidity Risk Management
manages liquidity risk at the firm by
reviewing liquidity risk measures
and monitoring against liquidity risk
limits approved by risk committees
 Set comprehensive risk
 Firmwide Operational Risk
policies, enforcing,
Committee provides oversight
monitoring and measuring
of operational risk policies,
performance through
framework and methodologies, and
various benchmarks, and
monitors the effectiveness of
active participation
operational risk management
 Potential for adverse
 Perform an independent
consequences from
review, validation and
decisions made based on
approval of models
model outputs that may be
incorrect or used
inappropriately
 Firmwide Model Risk Control
Committee has oversight of the
development and implementation of
model risk controls
 Operational Risk Management
centrally manages implementation
of the framework and business-level
managers actively manage and
monitor exposures to operational
risks
 Model Risk Management is
responsible for identifying and
reporting significant risks associated
with models
20
Market Risk-Related Metrics
($ in millions)
Average Daily VaR1
10% Sensitivity Table
March
2017
December
2016
Asset Categories
Equity
$181
$38
$2,116
$2,085
$31
$120
$135
Debt
$1,653
$23
$1,702
$89
Total
$3,769
$26
$32
$3,787
$21
$23
$65
 The size of the aggregate 10%
sensitivity decreased by 28% from
4Q07 to 1Q17
$126
4Q09
$20
$11
$18
$15
$31
$37
$63
$62
$64
$15
$61
$33
$17
$19
$18
$19
$27
$25
$26
$41
$45
$40
$44
$22
$24
$22
$67
$71
-$58
-$53
-$51
-$46
-$49
-$40
-$43
4Q11
4Q12
4Q13
4Q14
4Q15
4Q16
1Q17
-$86
4Q10
Interest Rates
1
$81
$123
$86
-$103
$76
Equity Prices
Currency Rates
Commodity Prices
Diversification Effect
VaR is the potential loss in value of inventory positions, as well as certain other financial assets and financial liabilities, due to adverse market movements over a defined time horizon with a specified confidence level. We
hold inventory primarily for market making for our clients and for our investing and lending activities
21
Appendix
Non-GAAP Measures
 The fully phased-in Standardized and Basel III Advanced CET1 capital ratios are non-GAAP measures and may not be
comparable to similar non-GAAP measures used by other companies. As of 1Q14, the supplementary leverage ratio was also a
non-GAAP measure as it was not a required regulatory disclosure at that time. We believe that these ratios are meaningful
because they are measures that we, our regulators and investors use to assess our ability to meet future regulatory capital
requirements. These ratios are based on our current interpretation, expectations and understanding of the revised risk-based
capital and leverage regulations of the Federal Reserve Board, subject to certain transition provisions and may evolve as we
discuss its interpretation and application with our regulators. For a further discussion of the methodology used to calculate the
firm’s regulatory ratios, see Note 20 to the condensed consolidated financial statements in Part I, Item 1 “Financial Statements
(Unaudited)” and “Equity Capital Management and Regulatory Capital” in Part I, Item 2 “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” in the firm’s Quarterly Report on Form 10-Q for the period ended March 31, 2017.
 In addition to preparing our condensed consolidated statements of financial condition in accordance with U.S. GAAP, we prepare a
balance sheet that generally allocates assets to our businesses, which is a non-GAAP presentation and may not be comparable to
similar non-GAAP presentations used by other companies. We believe that presenting our assets on this basis is meaningful
because it is consistent with the way management views and manages risks associated with the firm’s assets and better enables
investors to assess the liquidity of the firm’s assets. For a reconciliation of this balance sheet allocation to our U.S. GAAP balance
sheet, see “Balance Sheet and Funding Sources” in Part I, Item 2 “Management’s Discussion and Analysis of Financial Condition
and Results of Operations” in the firm’s Quarterly Report on Form 10-Q for the period ended March 31, 2017.
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Appendix
Non-GAAP Measures, continued
 Adjusted leverage equals total assets excluding (i) cash and cash equivalents, (ii) collateralized agreements and (iii) financial
instruments owned, at fair value segregated for regulatory and other purposes divided by total shareholders’ equity. This ratio is a
non-GAAP measure and may not be comparable to similar non-GAAP measures used by other companies. We believe that this
ratio is a more meaningful measure than gross leverage because it excludes certain low-risk assets. The table below presents the
reconciliation of total assets to total assets excluding (i) cash and cash equivalents, (ii) collateralized agreements and (iii) financial
instruments owned, at fair value segregated for regulatory and other purposes and adjusted leverage.
As of
March
2017
$ 894,069
$ in millions
Total assets
Less:
Cash and cash equivalents
(123,035)
Collateralized agreements
(304,724)
Financial instruments owned, at fair value
segregated for regulatory and other
purposes
(14,428)
Total
$ 451,882
Total shareholders' equity
$ 86,917
Adjusted leverage
5.2 x
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