Goldman Sachs 2009 Annual Report Download - page 62

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net in ows. Net in ows re ected in ows in money market
assets, partially offset by out ows in  xed income, equity and
alternative investment assets.
Securities Services net revenues were $236million for the
month of December 2008. These results re ected favorable
changes in the composition of securities lending balances,
but were negatively impacted by a decline in total average
customer balances.
Operating expenses were $329million for the month of
December 2008. Pre-tax earnings were $226million for the
month of December 2008.
Geographic Data
See Note18 to the consolidated  nancial statements for a
summary of our total net revenues, pre-tax earnings and net
earnings by geographic region.
Off-Balance-Sheet Arrangements
We have various types of off-balance-sheet arrangements
that we enter into in the ordinary course of business. Our
involvement in these arrangements can take many different
forms, including purchasing or retaining residual and
other interests in 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; entering into operating leases; and providing
guarantees, indemni cations, loan commitments, letters of
credit and representations and warranties.
We enter into these arrangements for a variety of business
purposes, including the securitization of commercial and
residential mortgages, corporate bonds, and other types
of  nancial assets. Other reasons for entering into these
arrangements include underwriting client securitization
transactions; providing secondary market liquidity; making
investments inperforming and nonperforming debt, equity,
real estate and other assets; providing investors with credit-
linked and asset-repackaged notes; and receiving or providing
letters of credit to satisfy margin requirements and to facilitate
the clearance and settlement process.
We engage in transactions with variable interest entities
(VIEs), including VIEs that were considered qualifying special-
purpose entities (QSPEs) prior to our adoption of Accounting
Standards Update 2009-16, “Transfers and Servicing
(Topic860) — Accounting for Transfers of Financial Assets,”
in the  rstquarter of 2010. Asset-backed  nancing vehicles
are critical to the functioning of several signi cant investor
markets, including the mortgage-backed and other asset-backed
securities markets, since they offer investors access to speci c
cash ows and risks created through the securitization process.
Our  nancial interests in, and derivative transactions with, such
nonconsolidated entities are accounted for at fair value, in the
same manner as our other  nancial instruments, except in cases
where we apply the equity method ofaccounting.
We did not have off-balance-sheet commitments to purchase
or  nance any CDOs held by structured investment vehicles as
of December2009 or November2008.
In December 2007, the American Securitization Forum (ASF)
issued the “Streamlined Foreclosure and Loss Avoidance
Framework for Securitized Subprime Adjustable Rate
Mortgage Loans” (ASF Framework). The ASF Framework
provides guidance for servicers to streamline borrower
evaluation procedures and to facilitate the use of foreclosure
and loss prevention measures for securitized subprime
residential mortgages that meet certain criteria. For certain
eligible loans as de ned in the ASF Framework, servicers
may presume default is reasonably foreseeable and apply
a fast-track loan modi cation plan, under which the loan
interest rate will be kept at the then current rate for aperiod
up to  ve years following the upcoming reset date. Mortgage
loan modi cations of these eligible loans did not affect our
accounting treatment for QSPEs that hold the subprime loans.
Goldman Sachs 2009 Annual Report
60
Management’s Discussion and Analysis