Goldman Sachs 2009 Annual Report Download - page 147

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The weighted average fair value of options granted for the year ended 2007 and in the one month ended December 2008 was
$51.04 and $14.08per option, respectively. Fair value was estimated as of the grant date based on a Black-Scholes option-pricing
model principally using the following weighted average assumptions:
Year Ended One Month Ended
December November November December
2009 2008 2007 2008
Risk-free interest rate N/A N/A 4.0% 1.1%
Expected volatility N/A N/A 35.0 50.1
Annual dividendper share N/A N/A $1.40 $1.40
Expected life N/A N/A 7.5 years 4.0 years
The common stock underlying the options granted for the year ended 2007 is subject to transfer restrictions through
January2013. The common stock underlying the options granted in the one month ended December 2008 is subject to transfer
restrictions through January 2014. The value of the common stock underlying the options granted for the year ended 2007 and in
the one month ended December 2008 re ects a liquidity discount of 24.0% and 26.7%, respectively, as a result of these transfer
restrictions. The liquidity discount was based on the  rm’s pre-determined written liquidity discount policies.
The following table sets forth share-based compensation and the related tax bene t:
Year Ended One Month Ended
December November November December
(inmillions) 2009 2008 2007 2008
Share-based compensation $2,030 $1,587 $4,549 $180
Excess tax bene t related to options exercised 166 144 469 –
Excess tax bene t/(provision) related to share-based compensation (1) (793) 645 908 –
(1) Represents the tax bene t/(provision), recognized in additional paid-in capital, on stock options exercised and the delivery of common stock underlying RSUs.
As of December2009, there was $983million of total unrecognized compensation cost related to nonvested share-based
compensation arrangements. This cost is expected to be recognized over a weighted average period of 1.59 years.
NOTE 15
Transactions with Af liated Funds
The  rm has formed numerous nonconsolidated investment
funds with third-party investors. The  rm generally acts
as the investment manager for these funds and, as such, is
entitled to receive management fees and, in certain cases,
advisory fees, incentive fees or overrides from these funds.
These fees amounted to $2.52billion, $3.14billion,
$3.62billion and $206million for the years ended
December2009, November2008 and November 2007
and one month ended December 2008, respectively. As of
December2009 and November2008, the fees receivable
from these funds were $1.04billion and $861million,
respectively. Additionally, the  rm may invest alongside
the third-party investors in certain funds. The aggregate
carrying value of the  rm’s interests in these funds was
$13.84billion and $14.45billion as of December2009 and
November2008, respectively. In the ordinary course of
business, the  rm may also engage in other activities with
these funds, including, among others, securities lending,
trade execution, trading, custody, and acquisition and
bridge  nancing. See Note8 for the  rm’s commitments
related to these funds.
Goldman Sachs 2009 Annual Report
145
Notes to Consolidated Financial Statements