Goldman Sachs 2013 Annual Report Download - page 189

Notes to Consolidated Financial Statements
Guarantees of Subsidiaries. Group Inc. 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. (GS&Co.), GS Bank USA and
Goldman Sachs Execution & Clearing, L.P. (GSEC),
subject to certain exceptions.
In November 2008, the firm contributed subsidiaries into
GS Bank USA, and Group Inc. agreed to guarantee the
reimbursement of certain losses, including credit-related
losses, relating to assets held by the contributed entities. In
connection with this guarantee, Group Inc. also agreed to
pledge to GS Bank USA certain collateral, including
interests in subsidiaries and other illiquid assets.
In addition, 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 guaranteed obligations are also obligations of
consolidated subsidiaries, Group Inc.’s liabilities as
guarantor are not separately disclosed.
Note 19.
Shareholders’ Equity
Common Equity
Dividends declared per common share were $2.05 in 2013,
$1.77 in 2012 and $1.40 in 2011. On January 15, 2014,
Group Inc. declared a dividend of $0.55 per common share
to be paid on March 28, 2014 to common shareholders of
record on February 28, 2014.
The firm’s share repurchase program is intended to help
maintain the appropriate level of common equity. The
repurchase program is effected primarily through regular
open-market purchases, the amounts and timing of which
are determined primarily by the firm’s current and
projected capital positions (i.e., comparisons of the firm’s
desired level and composition of capital to its actual level
and composition of capital), but which may also be
influenced by general market conditions and the prevailing
price and trading volumes of the firm’s common stock. Any
repurchase of the firm’s common stock requires approval
by the Federal Reserve Board.
During 2013, 2012 and 2011, the firm repurchased
39.3 million, 42.0 million and 47.0 million shares of its
common stock at an average cost per share of $157.11,
$110.31 and $128.33, for a total cost of $6.17 billion,
$4.64 billion and $6.04 billion, respectively, under the
share repurchase program. In addition, pursuant to the
terms of certain share-based compensation plans,
employees may remit shares to the firm or the firm may
cancel restricted stock units (RSUs) to satisfy minimum
statutory employee tax withholding requirements. Under
these plans, during 2013, 2012 and 2011, employees
remitted 161,211 shares, 33,477 shares and 75,517 shares
with a total value of $25 million, $3 million and
$12 million, and the firm cancelled 4.0 million, 12.7 million
and 12.0 million of RSUs with a total value of $599 million,
$1.44 billion and $1.91 billion, respectively.
On October 1, 2013, Berkshire Hathaway Inc. and certain
of its subsidiaries (collectively, Berkshire Hathaway)
exercised in full a warrant to purchase shares of the firm’s
common stock. The warrant, as amended in March 2013,
required net share settlement, and the firm delivered
13.1 million shares of common stock to Berkshire
Hathaway on October 4, 2013. The number of shares
delivered represented the value of the difference between
the average closing price of the firm’s common stock over
the 10 trading days preceding October 1, 2013 and the
exercise price of $115.00 multiplied by the number of
shares of common stock (43.5 million) covered by
the warrant.
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