Goldman Sachs 2007 Annual Report Download - page 65

Management’s Discussion and Analysis
PREFERRED STOCK. As of November 2007, Goldman Sachs had 124,000 shares of perpetual non-cumulative preferred stock
issued and outstanding in four series as set forth in the following table:
Preferred Stock by Series
Shares Shares Earliest Redemption Value
Series Issued Authorized Dividend Rate Redemption Date (in millions)
A 30,000 50,000 3 month LIBOR + 0.75%, with floor of 3.75% per annum April 25, 2010 $ 750
B 32,000 50,000 6.20% per annum October 31, 2010 800
C 8,000 25,000 3 month LIBOR + 0.75%, with floor of 4% per annum October 31, 2010 200
D 54,000 60,000 3 month LIBOR + 0.67%, with floor of 4% per annum May 24, 2011 1,350
124,000 185,000 $3,100
by general market conditions and the prevailing price and trading
volumes of our common stock.
The following table sets forth the level of share repurchases for
the years ended November 2007 and November 2006:
As of November
(in millions, except per share amounts) 2007 2006
Number of shares repurchased 41.22 50.23
Total cost $ 8,956 $ 7,817
Average cost per share $217.29 $155.64
The repurchase program was increased by 60.0 million shares
on December 17, 2007. Taking into account this increased
authorization, the total remaining authorization under the
repurchase program was 65.4 million shares as of January 18, 2008.
For additional information on our repurchase program, see
“Market for Registrant’s Common Equity, Related Stockholder
Matters and Issuer Purchases of Equity Securities” in Part ll,
Item 5 of the Annual Report on Form 10-K.
Our ability to declare or pay dividends on, or purchase, redeem
or otherwise acquire, our common stock is subject to certain
restrictions in the event that we fail to pay or set aside full
dividends on our preferred stock for the latest completed dividend
period. All series of preferred stock are pari passu and have a
preference over our common stock upon liquidation.
Equity Capital Management
Our objective is to maintain a sufficient level and optimal
composition of equity capital. We manage our capital through
repurchases of our common stock and issuances of preferred stock,
junior subordinated debt issued to trusts and other subordinated
debt. We manage our capital requirements principally by setting
limits on balance sheet assets and/or limits on risk, in each case
at both the consolidated and business unit levels. We attribute
capital usage to each of our business units based upon the CSE
regulatory capital framework and manage the levels of usage
based upon the balance sheet and risk limits established.
SHARE REPURCHASE PROGRAM. We use our share repurchase
program to help maintain the appropriate level of common
equity and to substantially offset increases in share count over
time resulting from employee share-based compensation. The
repurchase program is effected primarily through regular open-
market purchases, the amounts and timing of which are
determined primarily by our current and projected capital
positions (i.e., comparisons of our desired level of capital to
our actual level of capital) but which may also be influenced
Each share of preferred stock issued and outstanding has a
par value of $0.01, has a liquidation preference of $25,000, is
represented by 1,000 depositary shares and is redeemable at
our option at a redemption price equal to $25,000 plus
declared and unpaid dividends. Dividends on each series of
preferred stock, if declared, are payable quarterly in arrears.
63Goldman Sachs 2007 Annual Report