Goldman Sachs 2009 Annual Report Download - page 66

Preferred Stock. In June 2009, we repurchased from the
U.S. Treasury the 10.0million shares of our Fixed Rate
CumulativePerpetual Preferred Stock, Series H (Series H
Preferred Stock), that were issued to the U.S. Treasury
pursuant to the U.S. Treasury’s TARP Capital Purchase
Program. The repurchase resulted in a one-time preferred
dividend of $426million, which is included in the
consolidated statement of earnings for the year ended
December2009. This one-time preferred dividend represented
the difference between the carrying value and the redemption
value of the Series H Preferred Stock. In connection with the
issuance of the Series H Preferred Stock in October 2008,
we issued a 10-year warrant to the U.S. Treasury to purchase
up to 12.2million shares of common stock at an exercise price
of $122.90per share. We repurchased this warrant in full in
July 2009 for $1.1billion, which was recorded as a reduction
to additional paid-in capital. Our cumulative payments to the
U.S. Treasury related to the U.S. Treasury’s TARP Capital
Purchase Program totaled $11.42billion, including the return
of the U.S. Treasury’s $10.0billion investment (inclusive of
the $426million described above), $318million in preferred
dividends and $1.1billion related to the warrant repurchase.
In October 2008, we issued to Berkshire Hathaway and
certain af liates 50,000 shares of 10% CumulativePerpetual
Preferred Stock, Series G (Series G Preferred Stock), and a
 ve-year warrant to purchase up to 43.5million shares of
common stock at an exercise price of $115.00per share, for
aggregate proceeds of $5.00billion. The allocated carrying
values of the warrant and the Series G Preferred Stock (based
on their relative fair values on the date of issuance) were
$1.14billion and $3.86billion, respectively. The Series G
Preferred Stock is redeemable at the  rm’s option, subject to
the approval of the Federal Reserve Board, at a redemption
value of $5.50billion, plus accrued and unpaid dividends.
Accordingly, upon a redemption in full at any time in the
future of the Series G Preferred Stock, we would recognize a
one-time preferred dividend of $1.64billion (calculated as the
difference between the carrying value and redemption value of
the preferred stock), which would be recorded as a reduction
to our earnings applicable to common shareholders and to our
common shareholders’ equity in theperiod of redemption.
Share Repurchase Program. We seek to use our share repurchase
program to help maintain the appropriate level of common
equity and to substantially offset increases in share count over
time resulting from employee share-based compensation. The
repurchase program is effected primarily through regular
open-market purchases, the amounts and timing of which are
determined primarily by our current and projected capital
positions (i.e.,comparisons of our desired level of capital to
our actual level of capital) but which may also be in uenced by
general market conditions and the prevailing price and trading
volumes of our common stock. Any repurchase of our common
stock requires approval by the Federal Reserve Board.
As of December2009, we were authorized to repurchase up
to 60.8million additional shares of common stock pursuant
to our repurchase program, subject to the approval of the
Federal Reserve Board. See “Market for Registrant’s Common
Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities” in PartII, Item 5 of our Annual Report on
Form10-K and Note9 to the consolidated  nancial statements
for additional information on our repurchase program.
See Notes 7 and 9 to the consolidated  nancial statements
for further information regarding our preferred stock, junior
subordinated debt issued to trusts and other subordinated debt.
Capital Ratios and Metrics
The following table sets forth information on our assets,
shareholders’ equity, leverage ratios, capital ratios and book
valueper common share:
As of
December November
($ inmillions, exceptper share amounts) 2009 2008
Total assets $848,942 $884,547
Adjusted assets (1) 546,151 528,292
Total shareholders’ equity 70,714 64,369
Tangible equity capital (2) 70,794 64,317
Leverage ratio (3) 12.0x 13.7x
Adjusted leverage ratio (4) 7.7x 8.2x
Debt to equity ratio (5) 2.6x 2.6x
Common shareholders’ equity $ 63,757 $ 47,898
Tangible common shareholders’ equity (6) 58,837 42,846
Book valueper common share (7) 117.48 98.68
Tangible book valueper common share (6) ( 7) 108.42 88.27
Goldman Sachs 2009 Annual Report
64
Management’s Discussion and Analysis