Goldman 7 nov 2011

The Goldman Sachs Group, Inc.

Goldman Sachs Research

Where to Invest NowRecord profits but cautious outlookRecord profits but cautious outlook

November 7, 2011

David J. Kostin Chief US Equity Strategist Global ECS Research -- US Portfolio Strategy

The Goldman Sachs Group, Inc. does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.

F R AC tifi ti th d f th t t Oth i t t di l f ll th R AC tifi ti t / h/h d ht l

Goldman, Sachs & Co. 212-902-6781 [email protected]

For Reg AC certification, see the end of the text. Other important disclosures follow the Reg AC certification, or go to www.gs.com/research/hedge.html.

Analysts employed by non-US affiliates are not registered/qualified as research analysts with FINRA in the U.S.

US equity market outlookRecord profits but cautious outlook

Index: We forecast 5% return to our 12-month S&P 500 target of 1300S % % f• Economy: Faltering US economy growing by 1.8% in 2011 and 1.6% in 2012; low inflation; low interest rates.

• Earnings: We forecast operating EPS of $96 in 2011 and $98 in 2012 (bottom-up consensus is $98 and $108).

• Valuation: 1200 target in Dec. 2011 reflects forward P/E ratio of 12.2X. DDM supports our 12-month target of 1300.

Risks: Economy Margins and PolicyRisks: Economy, Margins, and Policy• Economy: US data remains weak. 9.3% jobless rate forecast for year-end 2012.

• Margins: We forecast net margins will peak in 2011 and begin to decline in 2012. Consensus expects margins to rise.

• Policy: In US, budget negotiations. In Europe, sovereign debt crisis. In Asia, policy responses to inflation.

Sectors: Stay near benchmark given macro uncertainty and transitioning business cycle • Overweight: Information Technology, Consumer Staples, and Telecom Services

• Underweight: Consumer Discretionary, Industrials, and Materials

Themes: High “Quality” stocks; Dividend yield and growth; and Defensives1. High “Quality”. 50 stocks with safe balance sheets, stable sales growth, and reliable earnings (<GSTHQUAL>).

2. Dividend Growth. Low rates suggest stocks with high dividend yields and growth will outperform (<GSTHDIVG>).

3 D f i 11 f 24 S&P 500 i d t i 7 f 10 t h b l b t (<GSSBDEFS>)

Goldman Sachs Global ECS Research 2

3. Defensives. 11 of 24 S&P 500 industry groups spanning 7 of 10 sectors have below average betas (<GSSBDEFS>).

Note: The ability to trade baskets will depend upon market conditions, including liquidity and borrow constraints at the time of trade.

Goldman Sachs S&P 500 price targetsS&P 500 EPS to exceed prior peak and reach $96 in 2011

1101700

24-Mar-00 P k 1527

09-Oct-07 New Peak = 1565

2011 EPS abovei k $98

80

90

100

1300

1500S&P 500

Price

Peak = 1527 prior peak$96

130012-moTarget

$98

$84

60

70

80

1100

1300

S&P 500 EP

&P

500

Pric

e

Sep-00 Peak EPS = $57 Mar-04

Jun-07 Peak EPS = $91

1250

Target

Current

6-moTarget

12002011

Year-EndTarget

40

50

700

900

PSS&

S&P 500EPS

Mar 04 New Peak EPS SPX

1261

20

30

500

700

c-96

c-97

c-98

c-99

c-00

c-01

c-02

c-03

c-04

c-05

c-06

c-07

c-08

c-09

c-10

c-11

c-12

c-13

c-14

Goldman SachsForecasts09-Mar-09

Low = 678


Source: Compustat, IDC via Factset, FirstCall and Goldman Sachs Global ECS Research. As of November 3, 2011.

Dec

Dec

Dec

Dec

Dec

Dec

Dec

Dec

Dec

Dec

Dec

Dec

Dec

Dec

Dec

Dec

Dec

Dec

Dec

Our US equity market forecasts and key assumptions

1. Global economic growth will equal 3.8% in 2011 and 3.5% in 2012. Our economists forecast a moderate recession in the Eurozone with negative real GDP growth in 4Q 2011forecast a moderate recession in the Eurozone with negative real GDP growth in 4Q 2011 and 1Q 2012. Our outlook remains robust in Asia with China expanding by 9.1% in 2011 and 8.6% in 2012.

2. US economic expansion will average 1.8% in 2011 and 1.6% in 2012. We estimate a 100 p gbp shift in US GDP growth equates to about $5/share of S&P 500 EPS. Unemployment will remain high and end 2012 at 9.3%.

3. Inflation in 2012 as measured by core CPI and personal consumption expenditures (PCE) will remain contained at 1.7% and 1.5%, respectively.

4. Earnings per share (EPS) will grow by 14% in 2011 to $96 but expand by only 3% to $98 in 2012. Bottom-up consensus S&P EPS estimates are $98 and $108 respectively but have b i d d tl l d i th t t th Th j it f th $10been revised modestly lower during the past two months. The majority of the $10 gap between top-down and bottom-up EPS forecasts stems from different margin outlooks.

5. Profit margins will decline by 30 bp to 8.6% in 2012 from a peak of 8.9% in 2011. We estimate a 50 bp shift in profit margin equates to a $5/share reduction in earnings Bottom up


estimate a 50 bp shift in profit margin equates to a $5/share reduction in earnings. Bottom-up analysts forecast margins will continue to expand and reach 9.5% in 2012.

Our US equity market forecasts and key assumptions

(continued)( )

6. Valuation in the current uncertain economic environment is challenging. Our dividend discount model (DDM) anchors our 12-month target of 1300. Our uncertainty-based P/E multiple modelmodel (DDM) anchors our 12 month target of 1300. Our uncertainty based P/E multiple model suggests downside fair value of 9.4x bottom-up EPS, or roughly 1020.

7. Defensive sectors should outperform given the weak economic backdrop. We recommend investors overweight Consumer Staples, Telecom Services, and Information Technology; and Underweight g p gy gConsumer Discretionary, Industrials, and Materials.

8. Recommendation: Goldman Sachs US Portfolio Strategy baskets (Bloomberg ticker: <GSTH>)

High Quality. High geopolitical and policy uncertainty, slow economic growth, and low bond yields favors stocks with safe balance sheets, stable revenue growth, and reliable earnings. Buy our sector-neutral basket of 50 high quality stocks. (<GSTHQUAL>).

Dividend Growth. Low rates suggest stocks with high dividend yields and growth will outperformDividend Growth. Low rates suggest stocks with high dividend yields and growth will outperform (<GSTHDIVG>).

Defensives. 11 of 24 S&P 500 industry groups spanning 7 of 10 sectors have below average betas to the US economy (<GSSBDEFS>).


Goldman Sachs 3- and 12-month forecasts

ForecastsTotal Total

Units Current 3m Return 12m ReturnUnits Current 3m Return 12m ReturnEquities

TOPIX level 739 800 9 % 870 20 %Asia Pac Ex-Japan level 412 450 10 480 20DJStoxx 600 level 242 255 6 275 18S&P 500 level 1261 1200 (4) 1300 5

Ten Year RatesEuroland % 1.9 2.0 0 % 2.3 (1)%US % 2.1 2.3 (1) 2.5 (2)Japan % 1 0 1 1 (1) 1 3 (2)Japan % 1.0 1.1 (1) 1.3 (2)

CurrenciesSterling / US Dollar £/$ 1.60 1.53 (4)% 1.76 10 %Euro / US Dollar EUR/$ 1.37 1.38 0 1.48 8US Dollar / Yen $/¥ 78 77 (1) 74 (5)

EnergyWTI Crude Oil $/bbl 94.07 96.5 3 % 116 23 %NYMEX Nat. Gas $/mmBtu 3.78 4.50 19 4.25 12Brent Crude Oil $/bbl 111 112.5 2 122.5 11

Metals


Source: FactSet and Goldman Sachs Global ECS Research. As of November 3, 2011.

MetalsLME Copper $/mt 7915 8000 1 % 9500 20 %London Gold $/troy oz 1765 1645 (7) 1860 5

Goldman Sachs Economics forecasts GDP growth

of 3.5% for World, 1.6% for US, and 7.2% for BRICs, ,

2011E and 2012E GDP Growth by country2011E and 2012E GDP Growth by country

2011E 2012EGoldman Goldman GS vs.

S h S h C CSachs Sachs Consensus Consensus

China 9.1 % 8.6 8.5 % 10 bp

Japan (0.6) 2.2 2.2 0

UK 1 0 1 3 1 5 (20)UK 1.0 1.3 1.5 (20)

BRICs 7.4 7.2 7.4 (20)

World 3.8 3.5 3.8 (30)

USA 1.8 1.6 2.0 (40)

Russia 4.2 3.5 4.0 (50)

Euroland 1.6 0.1 0.6 (50)

Brazil 3.3 3.0 3.9 (90)


Source: Blue Chip Economic Indicators, Consensus Economics and Goldman Sachs Global ECS Research. As of November 4, 2011.

India 7.0 7.4 8.4 (100)

Goldman Sachs forecasts US real GDP growth of

1.8% in 2011 and 1.6% in 2012

Goldman Sachs US Economics forecastsGS Economics and consensus quarterly GDP forecasts

% Annual Change2010A 2011E 2012E

Real GDP 3.0% 1.8% 1.6%Consumer Spending 2.0 2.3 1.5Total Fixed Investment 2.6 6.9 5.3

Business Fixed Investment 4 4 9 0 5 73.5 %

4.0 %

4.5 %

5.0 %

aliz

ed %

)

Business Fixed Investment 4.4 9.0 5.7Residential Investment (4.3) (1.7) 3.7

Federal Government Spending 4.5 (1.6) (0.9)Exports of Goods and Services 11.3 6.6 1.4Imports of Goods and Services 12.5 4.8 1.2

InflationProducer Price Index 4.2 6.1 2.8

3.9 3.8

2.5 2.3 2.5 2.5 1.5 %

2.0 %

2.5 %

3.0 %

3.5 %

Gro

wth

(qoq

ann

ua Goldman SachsEconomics

Consensus

Headline CPI 1.6 3.2 2.2Core CPI 1.0 1.7 1.7Core PCE 1.4 1.5 1.5

Unemployment Rate 9.6 9.0 9.2Fed Funds Rate 0.2 0.1 0.12-year Treasury Rate 0.6 0.3 0.510-year Treasury Rate 3 3 2 3 2 8

2.3

0.4

1.3 2.0

0.5

1.5 2.0

0.0 %

0.5 %

1.0 %

Q1A Q2A Q3A Q4A Q1A Q2A Q3A Q4E Q1E Q2E Q3E Q4E

GDP

G

2010 2011 2012 10 year Treasury Rate 3.3 2.3 2.82010 2011 2012


Source: Bloomberg and Goldman Sachs Global ECS Research. As of November 4, 2011.

Sputtering labor market means unemployment rate

will remain above 9% through year-end 2012g y

U l t t tl b 9%W k i t ll th Unemployment rate currently above 9%Weak private payrolls growth

10

11

12

Unemployment RateGoldman

Sachs

Forecasts

200

400

usan

ds)

Private Payrolls+2.6 Million Cumulative

6

7

8

9

ploy

men

t Rat

e (%

)

Consensus

(400)

(200)

0

rivat

e Pa

yrol

ls (

Thou

2

3

4

5

90 92 94 96 98 00 02 04 06 08 10 12 14

Unem

p(1,000)

(800)

(600)

0 2 3 4 5 6 7 8 9 0 2

Chan

ge in

P

-8.8 Million Cumulative

Jan-

9

Jan-

9

Jan-

9

Jan-

9

Jan-

9

Jan-

0

Jan-

0

Jan-

0

Jan-

0

Jan-

0

Jan-

1

Jan-

1

Jan-

1

2000

2001

200 2

2003

2004

2005

2006

2007

2008

2009

2010

2011

201 2


Source: Department of Labor, Bureau of Labor Statistics, and Goldman Sachs Global ECS Research. As of November 2, 2011.

Consumer confidence back to March 2009 low;

ISM level now 50.8, down from 61.4 peak in February, p y

Weak consumer sentiment consistent ISM above 50Weak consumer sentiment consistent

with contraction in final sales

110

1207.5 Percent change, year ago Index

ISM above 50

(indicating expansion) for 27 months

90100

80

90

100

110

0 0

2.5

5.0

60

70

80

25

50

75

US ISM

yoy

chan

ge

ISM level, rhs

50

60

70

80

(5.0)

(2.5)

0.0

Real Domestic Final Sales (lhs)40

50

(25)

0

level

US

ISM

y

ISM momentum(yoy change, lhs)

40

50

(7.5)

1985

1988

1991

1994

1997

2000

2003

2006

2009

2012

Real Domestic Final Sales (lhs)Universityof Michigan Consumer Sentiment (rhs) 30(50)

Jan-

08

Apr

-08

Jul-0

8

Oct

-08

Jan-

09

Apr

-09

Jul-0

9

Oct

-09

Jan-

10

Apr

-10

Jul-1

0

Oct

-10

Jan-

11

Apr

-11

Jul-1

1

Oct

-11

Jan-

12


Source: ISM, BEA, US Treasury, University of Michigan and Goldman Sachs Global ECS Research. As of November 1, 2011.

US housing prices are 32% below peak

S&P/Case-Shiller 20-City Composite Home-Price Index Current Δ from Δ fromCity Level High Low

180

200

220207

City Level High LowLas Vegas 95 60 % 0 %Phoenix 99 57 0Miami 140 50 1Tampa 128 47 0Detroit 72 44 7San Francisco 132 40 9

140

160

180

32% from High

141

141

San Diego 152 40 5Los Angeles 167 39 4Minneapolis 113 35 2Composite 20 141 32 0Chicago 116 32 2Seattle 135 29 0

100

120

n-00

n-01

n-02

n-03

n-04

n-05

n-06

n-07

n-08

n-09

n-10

n-11

n-12

141Portland 133 28 0Washington DC 184 27 8Atlanta 100 27 0New York 167 23 2Cleveland 99 20 0Charlotte 111 17 1Boston 153 15 3

Jan

Jan

Jan

Jan

Jan

Jan

Jan

Jan

Jan

Jan

Jan

Jan

Jan Boston 153 15 3

Denver 123 12 0Dallas 114 9 0


Source: Standard & Poor’s, Fiserve, and Goldman Sachs Global ECS Research. As of October 25, 2011.

Another “jobless” US economic recovery

11

12

11

12

N f E l tRecoveries:

8

9

10

11

8

9

10

11

on (p

ct p

ts) 1954 - 1982

200119912009 Current Cycle

Nonfarm EmploymentRecoveries:

4

5

6

7

4

5

6

7

end

of re

cces

i y

End of Recession(June 2009 in

0

1

2

3

0

1

2

3

Cha

nge

from

e (June 2009 in current cycle)

(2)

(1)

(2)

(1)

-12 -6 0 +6 +12 +18 +24 +30 +36

C

Months from End of Recession


Source: Bureau of Labor and Statistics and Goldman Sachs Global ECS Research. As of October 31, 2011.

Stagnation: 93 episodes of long-lasting (6+ years) of

sub-par GDP per capita growth during last 150 yearsp p p g g y

100%

22

5662

70%

80%

90%

OECD1950-2010

10+

2862

40%

50%

60%OECD

8-9

43 26

3120%

30%

40%

Non-OECD

1900-19506-7

11

31

0%

10%

… By duration (years) … By epoch … By region

OECD

1800-1900


Source: Barro-UrsuaMacro data and Goldman Sachs Global ECS Research. As of September 28, 2011.

Recent GDP per capita growth trend in US is

currently following the typical stagnation pathy g yp g p

120t-1=100

110

Mean + 1SD

Japan

100

Japan(1992-2003)

Mean

90US

(2008-12E)

MeanStagnation Path

Mean - 1SD

80

90 (2008-12E)

StagnationBegins


Source: Barro-Ursua data and Goldman Sachs Global ECS Research. As of November 4, 2011.

80t-5 t-4 t-3 t-2 t-1 t t+1 t+2 t+3 t+4 t+5 t+6 t+7 t+8 t+9

Path of real total equity returns during 43 economic

stagnations in OECD countries since 1950g

US path (2008-12E) is currently following Japan experience (1993-2003) t-1=100

160

180

Mean Equity

Mean Stagnation

+ 1SD

120

140

q yReturn (+9.4%)

Mean StagnationReturn (+7.1%)

80

100US

(2008-12E)

60

80

StagnationBegins

Japan(1992-2003)

Mean Stagnation

- 1SD


Source: Barro-Ursua data and Goldman Sachs Global ECS Research. As of October 19, 2011.

40t-5 t-4 t-3 t-2 t-1 t t+1 t+2 t+3 t+4 t+5 t+6 t+7 t+8 t+9

( )1SD

S&P 500 sales, margins and EPS forecasts Goldman Sachs top-down vs. consensus bottom-upp p

Top-down Bottom-UpGS Forecast ConsensusGS Forecast Consensus

2010 2011E 2012E 2011E 2012ES&P 500 ex-Financials and Utilities

Sales Per Share $785 $861 $903 $870 $916Y/Y growth 10 % 5 % 11 % 5 %Y/Y growth 10 % 5 % 11 % 5 %Y/Y growth ex- Energy 7 4 8 5

Profit Margin 8.5% 8.9% 8.6% 9.0% 9.5%

EPS $67 $77 $78 $79 $87Y/Y growth 15% 1% 17% 10%

Utilities EPS $3 $3 $3 $3 $3Financials EPS 14 16 17 16 18

S&P 500 EPS $84 $96 $98 $98 $108Y/Y growth 14% 3% 17% 11%


Source: Compustat, FirstCall, I/B/E/S, and Goldman Sachs Global ECS Research. As of October 31, 2011.

Decomposition of S&P 500 earnings estimates

We forecast operating EPS of $96 in 2011 and $98 in 2012

Contribution to EPS Annual earnings growth ratesGS Top-Down EPS Bottom-Up GS Top-Down Bottom-Up

2010A 2011E 2012E 2011E 2012E 2011E 2012E 2011E 2012E

Information Technology $15 $18 $18 $18 $21 19 % 1 % 19 % 15 %

Energ 10 14 14 15 15 35 3 40 5Energy 10 14 14 15 15 35 3 40 5

Health Care 11 12 12 12 13 10 4 11 9

Consumer Staples 9 9 10 9 10 7 6 6 8

Industrials 8 9 9 10 11 11 1 16 14

Consumer Discretionary 8 8 8 9 10 2 (6) 10 9

Utilities 3 3 3 3 3 2 (1) 2 (1)

Materials 3 3 3 4 4 27 (15) 34 11

Telecom Services 2 2 3 2 2 (2) 17 (2) 8Telecom Services 2 2 3 2 2 (2) 17 (2) 8

S&P 500 ex-Financials 70 80 81 82 90 14 1 17 10

Financials 14 16 17 16 18 15 10 18 15

S&P 500 Operating EPS $84 $96 $98 $98 $108 14 % 3 % 17 % 11 %


Numbers may not add due to rounding.

Source: Compustat, FirstCall, and Goldman Sachs Global ECS Research. As of October 27, 2011.

Goldman Sachs top-down and consensus bottom-up

2011 and 2012 EPS estimates

115

110

Shar

e

$106

Consensus2012E EPS

$108

100

105

arni

ngs

Per S

Goldman Sachs2012E EPS

$106

$102$104

Consensus2011E EPS $98

95

100

S&P

500

E

Goldman Sachs2011E EPS

$96

2011E EPS$98 $98

90

31-D

ec

31-J

an

28-F

eb

31-M

ar

30-A

pr

31-M

ay

30-J

un

31-J

ul

31-A

ug

30-S

ep

31-O

ct

30-N

ov

31-D

ec

2011E EPS


Source: Compustat, FirstCall, and Goldman Sachs Global ECS Research. As of October 27, 2011.

3Q results: 13% year/year sales growth, 37 bp margin

expansion, and 18% EPS growth; Apple is key driver!p , g ; pp y

3QE 2011 Bottom-up ConsensusEPS Sales MarginEPS Sales Margin

$/Share Growth $/Share Growth Level ChangeEnergy $4.12 65 % $44 33 % 9.4 % 182 bpMaterials 0.83 25 10 13 8.0 76Financials 4.41 22 NM NM NM NMIndustrials 2 56 16 31 10 8 4 46Industrials 2.56 16 31 10 8.4 46Consumer Discretionary 2.23 12 32 6 6.9 34Info Tech 4.36 11 27 11 16.0 5Consumer Staples 2.38 6 37 11 6.5 (27)Utilities 1.12 4 NM NM NM NMTelecom Services 0.58 4 8 1 6.9 18Telecom Services 0.58 4 8 1 6.9 18Health Care 2.85 2 32 9 8.9 (66)S&P 500 $25.45 18 %

ex. Financials and Utilities 19.92 18 $221 13 % 9.0 % 37 bp

Apple (APPL) $0.73 53 % $3 38 % 23.4 % 223 bppp ( ) $ $ p

Excluding Apple

S&P 500 $24.72 17 %ex. Financials and Utilities 19.19 17 $218 13 % 8.8 % 31 bp

Info Tech 3 64 6 24 8 15 0 (37)


Source: Compustat, FirstCall, I/B/E/S, Bloomberg, and Goldman Sachs Global ECS Research. As of November 4, 2011.

Info Tech 3.64 6 24 8 15.0 (37)

Goldman Sachs 2012 US GDP growth forecast

relative to consensus

Distribution of 2012 US GDP forecasts10

2012 US GDP F t

8

ts

2012 US GDP Forecastsn=51 Consensus

2.0%

6

r of F

orec

ast

2

4

Num

ber Goldman

Sachs1.6%

00.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 2.0 2.2 2.4 2.6 2.8 3.0 3.2

Goldman Sachs Global ECS Research 20Source: Blue Chip Economic Indicators, and Goldman Sachs Global ECS Research. Consensus estimates as of October 10, 2011.

2012 GDP Growth (%)

Sensitivity of 2012 S&P 500 earnings estimate to

US GDP growth (100 bp ≈ $5/share)g ( p $ )

Sensitivity of 2012 EPS forecast toUS GDP growth

2012 US GDP2012 US GDP(1.4)% (0.4)% 0.6 % 1.6 % 2.6 % 3.6 %(3)% (2)% (1)% 0 1% 2%

3.3 % 83 88 93 98 103 108

P 2.8 84 89 93 98 103 1082.3 84 89 93 98 103 1081.8 84 89 94 98 103 1081 3 84 89 94 98 103 1081 U

S G

DP

1.3 84 89 94 98 103 1080.8 84 89 94 98 103 1080.3 84 89 93 98 103 108

2011


Source: Goldman Sachs Global ECS Research. As of November 4, 2011.

We forecast margins will peak in 2011 and decline in

2012 while consensus expects margins will keep risingp g p g

S&P 500 net profit margins

11%

9%

10%

11%

S&P 500 Net Profit Margin(trailing four quarters)

Bottom-up ConsensusForecast

2012

8 6

9.5

7%

8%8.9 8.6

5%

6%Goldman Sachs

Portfolio Strategy

5.9

4 7

3%

4%

c-79

c-81

c-83

c-85

c-87

c-89

c-91

c-93

c-95

c-97

c-99

c-01

c-03

c-05

c-07

c-09

c-11

c-13

c-15

Forecast3.8

4.7


Source: Compustat and Goldman Sachs Global ECS Research. As of October 27, 2011.

Dec

Dec

Dec

Dec

Dec

Dec

Dec

Dec

Dec

Dec

Dec

Dec

Dec

Dec

Dec

Dec

Dec

Dec

Dec

Sensitivity of 2012 S&P 500 earnings estimate to

sales and margin assumptions (50 bp ≈ $5/share)g p ( p $ )

Sensitivity of 2012 EPS forecast toSensitivity of 2012 EPS forecast tosales growth and margin

2012 Profit Margin

6.6 % 7.1 % 7.6 % 8.1 % 8.6 % 9.1 % 9.6 % 10.1 % 10.6 %

7.9 % 82 87 91 96 101 105 110 115 1196.9 81 86 91 95 100 104 109 114 1185 9 81 85 90 95 99 104 108 113 117ow

th

5.9 81 85 90 95 99 104 108 113 1174.9 80 85 89 94 98 103 107 112 1163.9 80 84 89 93 98 102 107 111 1162.9 79 84 88 92 97 101 106 110 115

12 S

ales

Gro

1.9 79 83 87 92 96 101 105 109 1140.9 78 82 87 91 95 100 104 108 113

201


Source: Goldman Sachs Global ECS Research. As of October 31, 2011.

Decomposition of S&P 500 net margin estimates

We forecast 2012 margin contraction in six sectorsg

Net Margin Annual margin expansionNet Margin Annual margin expansionGS Top-Down Margin Bottom-up GS Top-Down Bottom-Up

2011E 2012E 2011E 2012E 2011E 2012E 2011E 2012E

Telecom Services 6.8 % 7.9 % 6.6 % 6.9 % (7)bp 110 bp (27)bp 25 bp

Health Care 9.4 9.5 9.4 10.2 27 11 26 76

Consumer Staples 6.4 6.4 6.4 6.6 (3) (3) (11) 29

Industrials 7.9 7.7 8.0 8.6 25 (20) 37 57

Consumer Discretionary 6.4 5.9 6.9 7.1 (15) (50) 29 22

Information Technology 16.7 16.2 16.7 17.7 87 (55) 92 92

Energy 8.8 8.2 9.0 8.8 83 (60) 106 (20)

Materials 8.7 7.3 8.8 9.2 125 (145) 135 42

S&P 500 Net Margin 8.9 % 8.6 % 9.0 % 9.5 % 41 bp (31)bp 51 bp 42 bpS&P 500 Net Margin 8.9 % 8.6 % 9.0 % 9.5 % 41 bp (31)bp 51 bp 42 bp


Source: Compustat, FirstCall, I/B/E/S and Goldman Sachs Global ECS Research. As of October 31, 2011.

.

Information Technology & Consumer Discretionary

margins are particularly elevated relative to historyg p y y

InformationTechnology net profit margin Consumer Discretionary net profit marginInformation Technology net profit margin Consumer Discretionary net profit margin

6%

7%

8%

9%

Consumer DiscretionaryNet Profit Margin


7.2 2012

14%

16%

18%

20%

Info TechNet Profit Margin


16.2

17.8 2012

%

3%

4%

5%

6% 5.9

6%

8%

10%

12%

Goldman Sachs

0%

1%

2%

Dec

-79

Dec

-84

Dec

-89

Dec

-94

Dec

-99

Dec

-04

Dec

-09

Dec

-14

Dec

-19

Goldman SachsPortfolio Strategy

Forecast0%

2%

4%

Dec

-79

Dec

-84

Dec

-89

Dec

-94

Dec

-99

Dec

-04

Dec

-09

Dec

-14

Goldman SachsPortfolio Strategy

Forecast

D D D D D D D D DD D D D D D D D


Source: Compustat, I/B/E/S, FirstCall and Goldman Sachs Global ECS Research.

Five approaches to S&P 500 fair value P/E multiple

Implied Year-End 2011 Fair ValueP/E Price

Methodology Multiple Level UpsideMethodology Multiple Level Upside

US Portfolio Strategy DDM 12.2X 1200 (5)

Uncertainty-based Model 9.4 1020 (19)

Top-down P/E Regression 13.1 1420 13

Fed Model 14.3 1540 22

Cyclically Adjusted P/E 16 7 1250 (1)Cyclically Adjusted P/E 16.7 1250 (1)


Source: Goldman Sachs Global ECS Research. As of November 3, 2011.

We believe the sharp October rally reflected a drop

in the cost of equity rather than better fundamentals q y

S&P 500 cost of equity = ERP + 10-yearTreasury yield Sensitivity of P/E to cost of equity and inflationS&P 500 cost of equity = ERP + 10-year Treasury yield Sensitivity of P/E to cost of equity and inflation

2011 Year-End Fair Value

2011 Cost of Equity1,200 8.2 % 8.3 % 8.4 % 8.5 % 8.6 % 8.7 % 8.8 % 8.9 % 9.0 %

1.5 % 1253 1222 1192 1163 1135 1108 1083 1058 1033

9.0

9.2

Cost of Equity 9.0%

1.6 1281 1249 1218 1188 1160 1132 1105 1079 1055

1.7 1310 1277 1245 1214 1185 1156 1129 1102 1076

1.8 1341 1306 1273 1241 1211 1181 1153 1125 1099

1.9 1372 1336 1302 1269 1238 1207 1178 1149 1122

2.0 1405 1368 1332 1298 1266 1234 1204 1174 1146

2.1 1439 1400 1364 1328 1294 1262 1230 1200 1171

2 2 1474 1434 1396 1360 1324 1291 1258 1227 1196m c

ore

infla

tion

8.4

8.6

8.8

8.4%2.2 1474 1434 1396 1360 1324 1291 1258 1227 1196

2.3 1510 1469 1430 1392 1355 1320 1287 1254 1223

2.4 1548 1506 1465 1425 1388 1351 1316 1283 1251

2.5 1588 1543 1501 1460 1421 1383 1347 1312 1279

2.6 1629 1583 1539 1496 1456 1417 1379 1343 1309

2.7 1671 1624 1578 1534 1492 1451 1412 1375 1339Lo

ng-te

rm

8.0

8.2

30-J

un

31-J

ul

31-A

ug

30-S

ep

31-O

ct

30-N

ov


Note: We estimate the equity risk premium (ERP) using our DDM framework to model expected future cash flows.

We solve for the cost of equity that implies the market is at ‘fair value’ and then deduct the 10-year US Treasury.

Source: IDC via FactSet, and Goldman Sachs Global ECS Research. As of October 27, 2011.

P/E multiple based on uncertainty metricsHigh uncertainty represents a headwind for valuationg y p

Uncertainty metrics explain Current uncertainty range is

actual P/E multiple

22

24

ate23

25

27

Actual P/E

wider than normal

16

18

20

500

forw

ard

P/E

estim

a

15

17

19

21

S&P

500

P/E

(NTM

)

Predicted P/E

10

12

14

S&P

5

95% conf idence range

Uncertainty-based P/E estimate8.3X

9.4X

10.5X

9.4

11.8

9

11

13

15

r-square = 0.56

8

Jan-

92

Jan-

94

Jan-

96

Jan-

98

Jan-

00

Jan-

02

Jan-

04

Jan-

06

Jan-

08

Jan-

10

Jan-

12

Jan-

14

7

Jan-

92

Jan-

94

Jan-

96

Jan-

98

Jan-

00

Jan-

02

Jan-

04

Jan-

06

Jan-

08

Jan-

10

Jan-

12

Jan-

14



S&P 500 currently trades near the 80-year average

cyclically-adjusted operating P/E ratio of 16.7xy y j p g

45

50

C

35

40

45

P/E

Current

Cyclically AdjustedS&P 500 P/E Ratio

(10-year average trailing EPS)

20

25

30

cally

-Adj

uste

d P Current

(31-Oct)

Operating17.2x

As Reported80 year

avg = 17 6x

As Reported21.2x

10

15

20

Cyc

lic

17.2xavg = 17.6x

9-Mar-09

Operating 80 year

avg = 16 7x

0

5

1929

1934

1939

1944

1949

1954

1960

1965

1970

1975

1980

1985

1990

1995

2000

2005

2010

2015

2020

2025

16-Aug-826.2x

19325.1x

9-Mar-099.9x

avg 16.7x


Note: Traditional Shiller series uses As Reported EPS. GS series uses Operating EPS when available (1988 – Present).

Source: Compustat, Robert Shiller and Goldman Sachs Global ECS Research. As of October 31, 2011.

Strongest balance sheets in history as non-Financial

firms hold $1.2 trillion in cash equal to 11% of assets$ q

13%S&P 500 Cash / Assets Cash to Assets

10%

11%

12%S&P 500 Cash / Assets

(ex-Financials)11.1% Oct-11

8%

9%

10%

h / A

sset

s

5%

6%

7%

% C

ash

3%

4%

5%

8 2 6 0 4 8 2 6 0 4

Recession


Source: Compustat and Goldman Sachs Global ECS Research. As October 31, 2011.

1978

1982

1986

1990

1994

1998

2002

2006

2010

2014

Households own 54% and Pension Funds own 17% of

US equities; ETFs now own more than Hedge Fundsq ; g

100%

70%

80%

90%

Households 33%

Share ofUS Corporate Equity Market

54%

50%

60% Mutual Funds 21%

20%

30%

40% Pension Funds 8%

Government Retirement Funds 8%

International Investors 13%

17%

0%

10%

1945

1948

1951

1954

1957

1960

1963

1966

1969

1972

1975

1978

1981

1984

1987

1990

1993

1996

1999

2002

2005

2008

2011

ETFs 4%Hedge Funds 3%

Other 9%


Source: Federal Reserve, Lionshare via FactSet, and Goldman Sachs Global ECS Research.

Global oil demand growth outpacing supply;

Our 2012 Brent forecast is 23% above futures market

Oil demand growth vs non-OPEC supply growth Our forecast is 23% above futures marketOil demand growth vs. non-OPEC supply growth

2 53.0 3.5 4.0

s y/

y) Demand

Our forecast is 23% above futures market

130

140

150

Brent Crude Dec-12E

$125GS Forecast

0.5 1.0 1.5 2.0 2.5

gro

wth

(ba

rrel

s

100

110

120

$/Ba

rrel

$125

$102

Futures

(1.5)(1.0)(0.5)0.0

002

003

004

005

006

007

008

009

010

011 2E 3E 4E 5E

Ann

ual

Non-OPEC supply

60

70

80

90

20 20 20 20 20 20 20 20 20 20 2012

2013

2014

2015 60

Jan-

10

Apr

-10

Jul-1

0

Oct

-10

Jan-

11

Apr

-11

Jul-1

1

Oct

-11

Jan-

12

Apr

-12

Jul-1

2

Oct

-12

Jan-

13

Apr

-13


Source: Bloomberg, Compustat, and Goldman Sachs Global ECS Research.

Commodity inflation in Industrial Metals and Energy We forecast Brent will average $120/barrel in 2012

Price Change Forecast Prices Forecast Price ChangesUnits 19-Oct-11 y/y 3m 6m 12m 3m 6m 12m

Industrial Metals (average change) (15)% 7 % 14 % 24 %LME Copper $/mt 7210 (13) 8000 9000 9500 11 25 32 LME Copper $/mt 7210 (13) 8000 9000 9500 11 25 32

LME Zinc $/mt 1838 (22) 2050 2200 2400 12 20 31 LME Aluminum $/mt 2182 (7) 2300 2400 2650 5 10 21 LME Nickel $/mt 18800 (20) 18500 19000 21000 (2) 1 12

Energy (average change) 22 % 10 % 15 % 23 % UK NBP Nat. Gas p/th 63 35 66 66 88 5 5 39p WTI Crude Oil $/bbl 86 7 97 107 116 12 24 35 NYMEX Nat. Gas $/mmBtu 3.59 2 4.50 4.25 4.25 25 19 19 Brent Crude Oil $/bbl 108 34 113 120 123 4 11 13 RBOB Gasoline $/gal 2.67 30 2.80 3.12 2.99 5 17 12

Precious Metals (average change) 29 % (7)% (2)% 5 % London Gold $/troy oz 1647 23 1645 1730 1860 (0) 5 13 London Silver $/troy oz 32.0 35 27.5 28.9 31.1 (14) (10) (3)

Agriculture (average change) 8 % 2 % (0)% (4)% CBOT Soybean cent/bu 1225 4 1260 1300 1300 3 6 6 CME Lean Hog cent/lb 90 32 95 95 95 5 5 5

NYBOT Cocoa $/mt 2603 (5) 2700 2700 2700 4 4 4 NYBOT Cocoa $/mt 2603 (5) 2700 2700 2700 4 4 4 NYBOT Cotton cent/lb 100 (10) 100 100 100 0 0 0 CME Live Cattle cent/lb 121 22 120 130 120 (1) 7 (1) CBOT Wheat cent/bu 620 (8) 640 650 600 3 5 (3) NYBOT Sugar cent/lb 27 (5) 28 24 24 4 (11) (11) CBOT Corn cent/bu 639 17 615 615 550 (4) (4) (14)


Source: FactSet and Goldman Sachs Global ECS Research. As of October 19, 2011.

NYBOT Coffee cent/lb 236 24 235 200 175 (0) (15) (26)

Overall Average: 11 % 3 % 7 % 12 %

US Portfolio Strategy recommended sector

weightingsg g

Sector Weightings

Total Goldman Sachs Current GS GSReturn Recommended S&P 500 Overweight / Alpha

Sectors YTD Sector Weightings Weight Underweight YTDInformation Technology 5 % 20 % 200 bp (3)bpC St l 8 11 200 0OverweightConsumer Staples 8 11 200 0Telecom Services 1 3 100 (3)

Financials (14) 14 0 (5)Energy 4 13 0 6

Overweight

NeutralHealth Care 8 11 0 (10)Utilities 15 4 0 (23)

Materials (8) 4 (100) 3Industrials (3) 11 (200) (3)

Neutral

UnderweightIndustrials (3) 11 (200) (3)Consumer Discretionary 5 11 (200) (6)

S&P 500 1 % 100 % 0 bp (45)bp

Underweight


Sector weightings last rebalanced on September 14, 2011.

Source: FactSet and Goldman Sachs Global ECS Research. As of October 31, 2011.

Large-cap core mutual funds sector distributions

35%

40%

Average Fund WeightS&P WeightGoldman Sachs Weighting

20%

25%

30%

g g

75th %ile

5%

10%

15%

75th %ile

25th %ile

-10%

-5%

0%

Information Technology

Consumer Staples

Telecom Services Financials Energy Health Care Utilities Materials

Consumer Discretionary Industrials

S&P Weight 19.7 11.1 3.0 14.0 12.3 11.5 3.7 3.6 10.7 10.610%

Average Mutual Fund Weight 19.1 10.9 2.2 12.4 12.3 13.0 1.9 4.4 12.3 11.5

Goldman Sachs Weighting 21.7 13.1 4.0 14.0 12.3 11.5 3.7 2.6 8.7 8.6

Goldman Sachs vs S&P 500Overweight/(Underweight) 200 bp 200 bp 100 bp 0 bp 0 bp 0 bp 0 bp (100) bp (200) bp (200) bp

Goldman Sachs Global ECS Research 35Source: Lionshares, Lipper, and Goldman Sachs Global ECS Research. As of October 31, 2011.

Percent difference OW/(UW) 10 % 18 % 33 % 0 % 0 % 0 % 0 % (28)% (19)% (19)%

Overweight / Underweight

Sector absolute valuation and historical relative

valuation versus S&P 500

Aggregate valuation metrics for S&P 500 and sectors Standard deviation vs 10-year history (Z-Score)Aggregate valuation metrics for S&P 500 and sectors Standard deviation vs. 10-year history (Z-Score)

EV/ Sales

EV/ EBITDA

Price/ Book

FCF Yield

PEG Ratio

NTM P/E

S&P 500 1.4x 7.4x 2.1x 6.9 % 1.0x 12.1xTelecommunication Services 1.8 6.0 1.8 9.6 2.3 17.3C Di ti 1 3 7 5 3 0 6 3 0 9 14 4

EV/ Sales

EV/ EBITDA

Price/ Book

FCF Yield P/E

PEG Ratio

Median Z-Score

S&P 500 (1.0) (1.6) (1.3) (1.6) (1.6) (1.8) (1.6)Financials NM NM (1.6) NM (0.8) (0.9) (0.9)Health Care (1 4) (0 8) (0 9) (0 9) (0 6) 2 6 (0 9)Consumer Discretionary 1.3 7.5 3.0 6.3 0.9 14.4

Consumer Staples 1.2 9.3 3.4 5.6 1.5 14.4Utilities NM 7.8 1.6 2.7 4.3 14.2Industrials 1.5 9.1 2.6 6.9 0.8 12.6Information Technology 2.1 7.8 3.5 7.9 0.9 12.3Materials 1.3 6.8 2.5 6.2 1.1 12.1

Health Care (1.4) (0.8) (0.9) (0.9) (0.6) 2.6 (0.9)Information Technology (0.3) (1.1) 0.9 (0.8) (1.1) (0.6) (0.7)Energy (0.3) (0.2) 0.1 (0.3) 0.7 (0.6) (0.2)Materials 0.4 (0.4) 0.9 0.6 0.1 0.1 0.2Consumer Discretionary 2.6 0.6 2.5 0.1 0.0 (0.5) 0.4Industrials (1.2) 0.4 1.3 1.4 0.6 (1.9) 0.5

Health Care 1.2 7.5 2.4 8.5 1.3 11.2Energy 1.0 5.2 2.0 6.4 0.8 10.5Financials NM NM 1.0 NM 0.9 10.0

Telecommunication Services (0.3) 1.8 1.0 0.3 3.7 1.4 1.2Utilities NM 1.4 0.6 (0.1) 1.7 4.6 1.4Consumer Staples 2.0 2.0 (0.2) 2.0 1.6 2.0 2.0


Based on bottom-up consensus valuation, as of November 3, 2011.

Source: Compustat, FirstCall, via FactSet, and Goldman Sachs Global ECS Research.

S&P 500 foreign revenues by region and sectorNon-US sales account for 31% of S&P 500 revenues

Revenues by region for the S&P 500 2010 S&P 500 foreign revenues by sectorRevenues by region for the S&P 500 2010 S&P 500 foreign revenues by sector

Other12%

Other EMEA7%

ForeignRevenues ($ Billions) Sales

Sector Total Foreign ExposureInformation Technology $897 $513 57 %7%

Asia & Pacific ex. Japan

5%

Western Europe3%

Information Technology $897 $513 57 %Materials 319 153 48Energy 1,233 553 45Industrials 1,014 388 38Consumer Staples 1,411 390 28Consumer Discretionary 1,201 306 25Financials 1,253 268 21

Other Americas2%

Japan1%

South America1%

U.S.69%

Financials 1,253 268 21Health Care 1,102 219 20Utilities 336 17 5Telecom Services 296 6 2

S&P 500 (sales weighted) $9,061 $2,812 31 %


Source: Company 10-K filings, FactSet, and Goldman Sachs Global ECS Research.

Sector, intra-sector, and stock return correlations

establish record high in 2011g

1.0

0.7

0.8

0.9

1.0

on

Average sector correlation 0.91

0.72

0.4

0.5

0.6

age

Cor

rela

ti

0.1

0.2

0.3

Aver

a

Average stock correlation0.0

Dec

-89

Dec

-90

Dec

-91

Dec

-92

Dec

-93

Dec

-94

Dec

-95

Dec

-96

Dec

-97

Dec

-98

Dec

-99

Dec

-00

Dec

-01

Dec

-02

Dec

-03

Dec

-04

Dec

-05

Dec

-06

Dec

-07

Dec

-08

Dec

-09

Dec

-10

Dec

-11

Dec

-12

Dec

-13

g



In October, 2/3 of S&P 500 returns fell between

3% and 23% creating an opportunity set of 20% g pp y

50

pp)

S&P 500 1-Month

35

40

45

in R

etur

ns (

p S&P 500 1-Month Return Dispersion

20

25

30

iatio

n Sp

read

Since 1980 opportunity set averages 17 pp

5

10

15

Stan

dard

Dev

0

5

Dec

-80

Dec

-82

Dec

-84

Dec

-86

Dec

-88

Dec

-90

Dec

-92

Dec

-94

Dec

-96

Dec

-98

Dec

-00

Dec

-02

Dec

-04

Dec

-06

Dec

-08

Dec

-10

Dec

-12

+/-1

S


Source: Compustat, IDC via FactSet, and Goldman Sachs Global ECS Research. As of October 31, 2011.

2011 YTD distribution of hedge fund and mutual

fund performance p

1314 15

Avg MF: 2%

S&P 500:0%

10 11 12 13 -2%

M l

2011 YTD as of 21-Oct

67 8 9

% o

f Fun

ds

Mutual Funds

(SPX = 1238)

3 4 5 6 %

Avg HF:2%

Hedge Funds

0 1 2

< 24 20 16 12 8 4 0 4 8 12 16 >20

-2%


Source: Compustat, Lipper, FactSet, Goldman Sachs Asset Management, and Goldman Sachs Global ECS Research. As of October 21, 2011.

.

<-24 -20 -16 -12 -8 -4 0 4 8 12 16 >202011 YTD Return (%)

Goldman Sachs US Portfolio Strategy BasketsBloomberg <GSTH>g

Bloomberg<GSTH2>

Bloomberg<GSTH1>

Thematic Baskets Sector Baskets

<GSTH2>Cyclicals

GSSBCYCL

DefensivesGSSBDEFS

Global

MacroeconomicGSTHBETAGSTHINTLGSTHAINTGSTHBRIC

GSTHWEUR

GlobalGSSBGLBL

DomesticGSSBDOMS

Global CyclicalsGSSBGCYC

FundamentalGSTHQUALGSTHREVGGSTHGROEGSTHOPHIGSTHOPLOGSTHSBALGSTHWBAL

GSSBGCYC

Domestic CyclicalGSSBDCYC

Global DefensiveGSSBGDEF

D ti D f i

GSTHWBAL

Hedge FundGSTHHVIPGSTHHFHIGSTHHFSL

Valuation

Permission to our GS Portfolio Strategy Baskets

To receive access to the Goldman Sachs US Portfolio Strategy <GSTH> Bloomberg page,

please follow the directions below:

1. Please go to your Bloomberg terminal and type IAM <go>.

2 Take a screen shot of the page

Domestic DefensiveGSSBDDEF

ValuationGSTHDIVGGSTHSHRPGSTHSVLUGSTHAVLUGSTHGARP


Source: Bloomberg and Goldman Sachs Research.

2. Take a screen shot of the page.

3. Send the attachment and an email to your Goldman Sachs salesperson requesting access to

the US Portfolio Strategy Bloomberg <GSTH> page .

US Portfolio Strategy current thematic investment

recommendations

Investment Recommendation (<Bloomberg Ticker>)

High "Quality" Stocks

Stocks with strong balance sheets, stable sales growth, stable earnings, stable prices, high ROE, and large equity capitalization should outperform <GSTHQUAL>.

High DividendGrowth

Low interest rates suggest stocks with high dividend yields and growth will outperform <GSTHDIVG>.

Defensives 11 of 24 S&P 500 industry groups spanning 7 of 10 sectors have below averageDefensives 11 of 24 S&P 500 industry groups spanning 7 of 10 sectors have below average betas to the US economy <GSSBDEFS>.

Goldman Sachs Global ECS Research 42Source: Goldman Sachs Global ECS Research.

Our recommended US Portfolio Strategy baskets:

High Quality, Dividend Growth, Defensives


Bold indicates overlap between baskets.

(1) The exhibit shows the 23 companies with greater than 1% weight in the 222-constituent Defensives Basket (Bloomberg ticker <GSSBDEFS>.

Source: Bloomberg and Goldman Sachs Global ECS Research.

US Portfolio Strategy thematic basket performance

(see Bloomberg <GSTH>)( g )

High Quality <GSTHQUAL>

160

180 Indexed Performance

100

120

140

Quality Basket

40

60

80 an

-07

Jul-0

7

an-0

8

Jul-0

8

an-0

9

Jul-0

9

an-1

0

Jul-1

0

an-1

1

Jul-1

1

an-1

2

S&P 500

Dividend Growth <GSTHDIVG> Defensives <GSSBDEFS>

Ja J Ja J Ja J Ja J Ja J Ja

115

120

110

115

100

105

110

Relative PerformanceLong GSTHDIVG /

Short SPX100

105

Relative PerformanceLong GSSBDEFS /

Goldman Sachs Global ECS Research 44Source: FactSet and Goldman Sachs Global ECS Research. As of October 31, 2011.

95

Dec

-06

Jun-

07

Dec

-07

Jun-

08

Dec

-08

Jun-

09

Dec

-09

Jun-

10

Dec

-10

Jun-

11

Dec

-11

Short SPX

95

Apr-

10

Jul-1

0

Oct

-10

Jan-

11

Apr-

11

Jul-1

1

Oct

-11

Jan-

12

Long GSSBDEFS /Short SPX

High Quality basket

<GSTHQUAL>

10-Year HistoricalMarket Altman EBIT Sales 5th %ile Average Quality

Company Ticker Cap ($B) Z-Score (a) Downside Sortino (b) Drawdown ROE Score (c)Consumer Discretionary

TJX Companies Inc. TJX $21 7.0 3.6 236 (9)% 43 % 89Coach, Inc. COH 16 13.1 4.0 73 (9) 43 87

10-Year HistoricalMarket Altman EBIT Sales 5th %ile Average Quality

Company Ticker Cap ($B) Z-Score (a) Downside Sortino (b) Drawdown ROE Score (c)Industrials

C.H. Robinson Worldwide CHRW $12 15.8 0.0 3 (9)% 29 % 88General Dynamics GD 21 2.9 2.5 10 (9) 20 86U it d T h l i UTX 65 3 1 2 0 2 (5) 23 84Yum! Brands, Inc YUM 23 4.5 1.2 4 (8) 97 86

Amazon.com AMZN 80 9.1 3.7 MAX (17) 47 83NIKE Inc. NKE 34 8.5 1.4 4 (8) 22 82

Basket Median $23 8.5 4 38 (9)% 43 % 86Sector Median 8 3.5 11 2 (11) 17 50

Consumer StaplesPepsiCo Inc. PEP $96 3.2 0.7 5 (5)% 35 % 89Walgreen Co. WAG 30 5.7 0.0 MAX (10) 17 88Colgate-Palmolive CL 44 6.7 1.0 4 (6) 137 84

United Technologies UTX 65 3.1 2.0 2 (5) 23 84Danaher Corp. DHR 24 3.4 3.7 3 (6) 16 823M Company MMM 53 5.1 5.4 1 (6) 32 68


Information TechnologyCognizant Tech Solutions CTSH $20 16.4 0.0 MAX (12)% 25 % 93Intuit, Inc. INTU 15 6.0 1.2 4 (12) 17 82Oracle Corp. ORCL 119 4.7 3.0 3 (9) 31 82

Coca-Cola Co. KO 150 4.4 0.9 3 (6) 32 81Wal-Mart Stores WMT 93 4.1 3.6 29 (7) 21 78Kellogg Co. K 93 4.1 3.6 29 (7) 21 78


EnergyNational Oilwell Varco NOV $25 3.9 9.4 3 (10)% 12 % 85Cameron International Corp CAM 11 3.9 11.0 4 (12) 16 83Baker Hughes BHI 22 3.3 21.6 2 (9) 14 75

eBay Inc. EBAY 36 5.3 4.3 18 (11) 12 79QUALCOMM Inc. QCOM 85 7.5 7.4 6 (10) 16 78Microsoft Corp. MSFT 196 4.8 6.2 3 (9) 31 75Accenture ACN 36 5.5 12.0 2 (8) 74 72Citrix Systems CTXS 10 7.3 8.6 3 (17) 14 63Adobe Systems ADBE 13 4.9 13.0 1 (11) 23 62Dell Inc. DELL 24 3.7 11.8 1 (12) 54 61


ConocoPhillips COP 88 2.7 25.4 2 (5) 16 74Occidental Petroleum OXY 64 3.8 23.0 2 (6) 23 73Schlumberger Ltd. SLB 64 3.8 23.0 2 (6) 23 73


FinancialsSimon Property Group, Inc SPG $33 NM 2.5 19 (9)% 15 % 87Wells Fargo WFC 134 NM 9.3 3 (7) 17 81AFLAC Inc. AFL 18 NM 7.4 9 (10) 18 81

MaterialsEcolab Inc. ECL $12 5.1 3.4 6 (8)% 23 % 94Praxair, Inc. PX 30 3.7 2.1 1 (5) 24 82


Telecommunication ServicesCenturyLink CTL $20 1.4 4.1 7 (8)% 10 % 72

Basket Median $20 1.4 4 7 (8)% 10 % 72Sector Median 14 1 2 5 2 (9) 12 52( )

Vornado Realty VNO 14 NM 12.2 2 (10) 11 66State Street Corp. STT 16 NM 3.9 1 (11) 16 65Boston Properties BXP 13 NM 11.1 1 (9) 14 63JPMorgan Chase & Co. JPM 126 NM 16.4 1 (5) 11 62

Basket Median $18 NM 9 2 (9)% 15 % 66Sector Median 10 NM 22 1 (10) 11 50

Health CareSt Jude Medical STJ $12 4.1 0.3 MAX (9)% 23 % 89Stryker Corp. SYK 16 5.7 0.0 16 (9) 22 85

Sector Median 14 1.2 5 2 (9) 12 52Utilities

Southern Co. SO $36 NM 1.4 2 (6)% 15 % 88Consolidated Edison ED 16 NM 5.2 1 (7) 10 67

Basket Median $26 NM 3 1 (6)% 12 % 77Sector Median 9 NM 10 0 (6) 12 48

High Quality <GSTHQUAL> Median $30 4.7 4 3 (9)% 22 % 81S&P 500 M di 10 3 4 12 1 (10) 16 50


Source: FactSet, Compustat, Goldman Sachs Research estimates and Goldman Sachs Global ECS Research.

As of October 6, 2011.

y p ( )Gilead Sciences GILD 31 5.1 1.1 37 (9) 39 82Intuitive Surgical ISRG 15 27.5 0.0 MAX (18) 8 82Medtronic Inc. MDT 35 3.4 0.6 15 (7) 26 79Amgen AMGN 35 3.4 0.6 15 (7) 26 79


S&P 500 Median 10 3.4 12 1 (10) 16 50

Dividend Growth basket

<GSTHDIVG>

2012E 2012E

Cash Cash

Market Ann. 2010-2012 Return on Market Ann. 2010-2012 Return on

Price Cap Payout Dividend Cash Price Cap Payout Dividend Cash

Company Name Ticker Sector 31-Oct-11 ($ bil) Ratio CAGR Invested Company Name Ticker Sector 31-Oct-11 ($ bil) Ratio CAGR Invested

AT&T Inc. T Telecom Services $29.31 $174 72 % 2 % 6.0 % Harris Corp. HRS Info Tech $37.75 $5 21 % 12 % 3.1 %

Lockheed Martin LMT Industrials 75.90 21 49 25 5.4 Xerox Corp. XRX Info Tech 8.18 11 15 19 2.9

Verizon Communications VZ Telecom Services 36.98 105 81 3 5.5 Johnson Controls JCI Cons. Discretionary 32.93 22 22 30 2.8

Dow Chemical DOW Materials 27.88 33 36 47 4.7 Comcast Corp. CMCSA Cons. Discretionary 23.45 64 25 26 2.6

Philip Morris Intl PM Consumer Staples 69.87 123 62 15 4.6 Computer Sciences Corp. CSC Info Tech 31.46 5 19 36 2.9

Pfizer Inc. PFE Health Care 19.26 150 37 11 4.6 Microsoft Corp. MSFT Info Tech 26.63 199 28 23 3.1p

General Electric GE Industrials 16.71 177 39 24 4.2 Lowe's Cos. LOW Cons. Discretionary 21.02 26 33 24 2.9

ConocoPhillips COP Energy 69.65 96 32 14 4.0 Medtronic Inc. MDT Health Care 34.74 37 27 8 2.9

Spectra Energy SE Energy 28.63 19 62 6 3.9 Walgreen Co. WAG Consumer Staples 33.20 30 31 26 3.0

Eaton Corp. ETN Industrials 44.82 15 31 22 3.6 Applied Materials AMAT Info Tech 12.32 16 39 9 2.6

JPMorgan Chase JPM Financials 34.76 136 22 155 3.7 U.S. Bancorp USB Financials 25.59 49 20 87 2.7

Darden Restaurants DRI Cons. Discretionary 47.88 6 43 26 3.8 Occidental Petroleum OXY Energy 92.94 76 23 17 2.2

Carnival Corp CCL Cons Discretionary 35 21 16 37 73 3 4 Freeport-McMoRan Cp & Gld FCX Materials 40 26 38 23 50 2 5Carnival Corp. CCL Cons. Discretionary 35.21 16 37 73 3.4 Freeport-McMoRan Cp & Gld FCX Materials 40.26 38 23 50 2.5

Williams Cos. WMB Energy 30.11 18 52 46 3.4 CSX Corp. CSX Industrials 22.21 24 26 29 2.4

BlackRock Inc. BLK Financials 157.79 16 46 24 3.9 Exxon Mobil Corp. XOM Energy 78.09 380 22 6 2.5

Intel Corp. INTC Info Tech 24.54 129 33 20 3.7 Accenture ACN Info Tech 60.26 39 35 31 2.4

Sempra Energy SRE Utilities 53.73 13 43 14 3.8 Becton Dickinson BDX Health Care 78.23 17 27 11 2.4

Abbott Laboratories ABT Health Care 53.87 84 38 9 3.8 Murphy Oil Corp. MUR Energy 55.37 11 22 6 2.1

Johnson & Johnson JNJ Health Care 64.39 176 45 7 3.8 St. Jude Medical STJ Health Care 39.00 13 24 NM 2.4

S f I SWY C St l 19 37 7 32 20 3 4 I t ti l B M hi IBM I f T h 184 63 220 21 15 1 8Safeway Inc. SWY Consumer Staples 19.37 7 32 20 3.4 International Bus. Machines IBM Info Tech 184.63 220 21 15 1.8

Weyerhaeuser WY Financials 17.98 10 141 163 3.3

Dr Pepper Snapple Group DPS Consumer Staples 37.45 8 45 25 3.7

ONEOK Inc. OKE Utilities 76.05 8 65 17 3.3

Public Storage PSA Financials 129.05 18 64 16 3.2

Iron Mountain IRM Industrials 30.93 6 73 69 3.5

Molson Coors Brewing TAP Consumer Staples 42.34 7 36 14 3.3


Source: Bloomberg, IDC via FactSet, and Goldman Sachs Global ECS Research. As of October 31, 2011.

KLA-Tencor Corp. KLAC Info Tech 47.09 8 43 32 3.0

Chevron Corp. CVX Energy 105.05 210 24 9 3.2

PNC Financial Svc. Gp. PNC Financials 53.71 28 23 101 3.0 Dividend Growth <GSTHDIVG> Average $63 39% 31 % 3.4 %

Simon Property Group SPG Financials 128.44 38 51 19 2.9 S&P 500 Equal-Weighted Average 1253 23 26 16 2.0

Defensives basket

<GSSBDEFS>

Stocks above 1% weight in the Defensives Basket <GSSBDEFS>

B k tBasketCompany Ticker Sector Industry Group WeightInternational Bus. Machines IBM Information Technology Software & Services 4.3 %Microsoft Corp. MSFT Information Technology Software & Services 3.8Procter & Gamble PG Consumer Staples Household & Personal Products 3.5Johnson & Johnson JNJ Health Care Pharmaceuticals Biotechnology & Life Sciences 3.4AT&T Inc. T Telecommunication Services Telecommunication Services 3.3Pfizer Inc. PFE Health Care Pharmaceuticals Biotechnology & Life Sciences 3.0Coca-Cola Co. KO Consumer Staples Food Beverage & Tobacco 3.0Google Inc. GOOG Information Technology Software & Services 2.9Oracle Corp. ORCL Information Technology Software & Services 2.5Philip Morris Intl PM Consumer Staples Food Beverage & Tobacco 2.5Wal-Mart Stores WMT Consumer Staples Food & Staples Retailing 2.2Verizon Communications VZ Telecommunication Services Telecommunication Services 2.0Merck & Co Inc MRK Health Care Pharmaceuticals Biotechnology & Life Sciences 2.0PepsiCo Inc. PEP Consumer Staples Food Beverage & Tobacco 1.9McDonald's Corp. MCD Consumer Discretionary Consumer Services 1.9Abbott Laboratories ABT Health Care Pharmaceuticals Biotechnology & Life Sciences 1.6gyAmazon.com AMZN Consumer Discretionary Retailing 1.4Kraft Foods KFT Consumer Staples Food Beverage & Tobacco 1.2Home Depot HD Consumer Discretionary Retailing 1.2Altria Group MO Consumer Staples Food Beverage & Tobacco 1.1Bristol-Myers Squibb BMY Health Care Pharmaceuticals Biotechnology & Life Sciences 1.1Amgen Inc AMGN Health Care Pharmaceuticals Biotechnology & Life Sciences 1.0


Source: Compustat, FactSet, and Goldman Sachs Global ECS Research. As of October 27, 2011.

Amgen Inc. AMGN Health Care Pharmaceuticals Biotechnology & Life Sciences 1.0UnitedHealth Group UNH Health Care Health Care Equipment & Services 1.0

Total 51.6 %

Growth and valuation for US Portfolio Strategy

thematic and sector Bloomberg basketsg

EPS Growth Sales GrowthBeta 2010E - 2011E - 2010E - 2011E - Profit P/E Expd. Dividend

Bloomberg Price vs 2011E 2012E 2011E 2012E Margin Mult. ROE YieldTicker 3-Nov-11 SP500 (%) (%) (%) (%) 2011 NTM NTM (%)

FUNDAMENTAL BASKETSHigh Quality GSTHQUAL 116.19 1.0 13 % 10 % 12 % 7 % 14 % 14.5x 24 % 1.9 %ROE Growth GSTHGROE 98.94 1.1 17 13 10 6 10 12.4 20 1.6High Revenue Growth GSTHREVG 97.03 1.1 22 18 20 15 14 17.7 16 0.7High Operating Leverage GSTHOPHI 182.80 1.2 22 14 11 5 8 13.1 17 1.1Low Operating Leverage GSTHOPLO 160.68 1.0 11 14 10 6 13 15.3 22 0.5Strong Balance Sheet GSTHSBAL 129.26 1.1 19 17 18 12 14 18.2 26 0.3Weak Balance Sheet GSTHWBAL 124.63 1.2 10 12 7 4 9 13.0 14 1.3

VALUATION BASKETSVALUATION BASKETSDividend Growth GSTHDIVG 113.27 1.0 12 % 7 % 9 % 3 % 10 % 11.2x 18 % 2.9 %High Sharpe Ratio GSTHSHRP 131.98 1.2 12 10 11 6 10 11.1 16 1.3"Super-value" GSTHSVLU 102.25 1.1 7 8 6 4 9 10.1 16 2.0"Anti-value" GSTHAVLU 123.40 1.0 14 13 10 7 11 17.7 21 1.3GARP GSTHGARP 139.69 1.1 12 12 9 6 15 12.7 23 1.0

MACROECONOMIC BASKETSBRICs Sales GSTHBRIC 170.41 1.2 13 % 12 % 15 % 6 % 14 % 13.5x 17 % 0.9 %International Sales GSTHINTL 128.70 1.1 13 12 13 6 14 13.9 21 1.5Domestic Sales GSTHAINT 90.23 1.0 10 10 9 6 8 12.7 17 1.9Western Europe Sales GSTHWEUR 188.30 1.2 13 14 15 7 8 13.8 16 0.6Dual Beta GSTHBETA 96.36 1.4 24 16 13 7 8 11.9 14 0.2

HEDGE FUND BASKETSHedge Fund "VIP" List GSTHHVIP 92.48 1.2 15 % 13 % 17 % 6 % 12 % 12.1x 18 % 0.8 %High Hedge Fund Concentration GSTHHFHI 90.81 1.1 12 14 4 4 7 15.0 11 0.0Low Hedge Fund Concentration GSTHHFSL 114 38 0 9 4 7 9 3 10 15 2 18 2 7Low Hedge Fund Concentration GSTHHFSL 114.38 0.9 4 7 9 3 10 15.2 18 2.7

SECTOR BASKETSDefensives GSSBDEFS 114.18 0.9 8 % 10 % 7 % 5 % 10 % 13.9x 19 % 1.8 %Cyclicals GSSBCYCL 102.12 1.2 16 12 11 6 10 12.8 15 1.8Global GSSBGLBL 111.92 1.2 13 11 10 6 11 13.9 20 1.4Domestic GSSBDOMS 99.89 1.0 9 11 7 5 7 13.0 14 2.1Global Cyclicals GSSBGCYC 109.90 1.3 17 12 12 6 10 13.6 19 1.4Global Defensives GSSBGDEF 114.38 0.9 8 10 9 5 14 14.1 24 1.4


Source: Compustat, FirstCall , I/B/E/S,

FactSet, and Goldman Sachs Global

ECS Research.

Domestic Cyclicals GSSBDCYC 89.15 1.1 14 12 8 6 9 12.0 11 2.1Domestic Defensives GSSBDDEF 113.74 0.9 7 10 6 5 6 13.7 16 2.1

S&P 500 1,261 1.0 17 % 11 % 11 % 5 % 9 % 12.1x 17 % 2.2 %S&P 500 Average 1.1 11 12 12 7 12 14.3 20 1.9S&P 500 Median 1.1 11 11 9 6 10 13.4 18 1.8

Equity Basket Disclosure

The Securities Division of the firm may have been consulted as to the various

components of the baskets of securities discussed in this report prior to their launch;

h f thi h th l i d h i th ti i fhowever, none of this research, the conclusions expressed herein, nor the timing of

this report was shared with the Securities Division.


Analyst Certification

I, David J. Kostin, hereby certify that all of the views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. I also certify that no part of my compensation was, is, or willbe, directly or indirectly, related to the specific recommendations or views expressed in this report.


Rating and pricing information

Rating and pricing information

Abbott Laboratories (N/A, $52.70), Accenture Plc (B/N, $57.02), Adobe Systems Inc. (S/N, $25.84), Aflac Incorporated (N/A, $38.97), Altria Group, Inc. (N/N, $27.80), Amazon.com Inc. (CS, $235.48), Amgen Inc. (S/N, $57.09), Applied Materials, Inc. (S/C, $10.98), AT&T Inc. (N/N, $28.77), Baker Hughes Inc. (CS, $53.23), Becton ( , $ ), g ( , $ ), pp , ( , $ ), ( , $ ), g ( , $ ),Dickinson & Co. (N/A, $73.42), BlackRock, Inc. (B/N, $153.06), Boston Properties, Inc. (N/N, $88.86), Bristol-Myers Squibb Company (B/A, $32.96), C.H. Robinson Worldwide, Inc. (CS, $73.35), Cameron International Corp. (CS, $47.76), Carnival Corp. (B/N, $32.90), CenturyLink Inc. (B/N, $33.52), Chevron Corp. (N/A, $97.60), Citrix Systems Inc. (N/N, $61.19), Coach, Inc. (N/N, $59.29), The Coca-Cola Company (B/A, $66.80), Cognizant Technology Solutions (B/N, $67.48), Colgate-Palmolive Company (CS, $90.35), Comcast Corp. (B/A, $22.98), Computer Sciences Corp. (S/N, $29.82), ConocoPhillips (N/A, $67.02), Consolidated Edison, Inc. (S/N, $56.76), CSX Corporation (CS, $20.85), Danaher Corp. (N/N, $44.15), Darden Restaurants, Inc. (CS, $45.91), Dell Inc. (S/N, $16.18), Dow Chemical Company (N/N, $26.40), Dr Pepper Snapple Group (S/A, $38.94), Eaton Corp. (B/N, $40.49), eBay Inc. (CS, $32.83), Ecolab Inc. (NR, $52.25), Exxon Mobil Corp. (B/A, $76.27), Freeport-McMoRan Copper & Gold (B/N, $35.45), General Dynamics Corp. (N/C, $61.48), General Electric Co. (B/N, $16.14), Gilead Sciences Inc. (B/N, $39.70), Google Inc. (N/N, ( ) y ( ) ( ) ( ) g ($543.18), Harris Corporation (N/C, $36.16), The Home Depot, Inc. (N/N, $34.71), Intel Corp. (S/N, $22.99), International Business Machines (B/N, $185.00), Intuit, Inc. (CS, $51.18), Intuitive Surgical, Inc. (N/N, $385.35), J.P. Morgan Chase & Co. (B/A, $32.30), Johnson & Johnson (N/A, $63.96), Johnson Controls, Inc. (N/A, $30.14), Kellogg Company (N/A, $54.22), KLA-Tencor (S/C, $42.91), Kraft Foods Inc. (NR, $34.40), Lockheed Martin Corp. (N/C, $76.32), Lowe's Companies, Inc. (N/N, $20.53), McDonald's Corp. (B/N, $89.34), Medtronic, Inc. (N/N, $33.23), Merck & Co., Inc. (N/A, $31.93), Microsoft Corp. (N/N, $27.00), Molson Coors Brewing Co. (N/A, $42.01), Murphy Oil Corp. (N/A, $50.24), National Oilwell Varco (CS, $62.74), Nike, Inc. (N/N, $89.85), Occidental Petroleum Corp. (B/A, $80.89), ONEOK, Inc. (N/N, $70.57), Oracle Corp. (B/N, $30.93), PepsiCo, Inc. (N/A, $60.95), Pfizer Inc. (B/A, $18.85), Philip Morris International Inc. (B/N, $65.30), PNC Financial Services (N/A, $49.90), Praxair Inc. (N/N, $100.86), Procter & Gamble Company (CS, $64.57), Public Storage, Inc. (N/N, $112.08), QUALCOMM, Inc. (B/N, $51.65), Safeway Inc. (S/N, $17.46), Schlumberger, Ltd. (CS, $66.82), Sempra Energy (N/N, $51.78), Simon Property Group (B/N, $112.84), Spectra Energy Corp. (N/N, $25.94), St. Jude Medical, Inc. (N/N, $37.89), State Street Corp. (B/N, $33.10), Stryker Corp. (B/N, $50.10), The Southern Company (S/N, $42.68), 3M Company (N/N, $76.42), The TJX Companies, Inc. (B/N, $58.07), U.S. Bancorp (N/A, $23.88), United Technologies Corp. (NR, $73.74), UnitedHealth Group (N/A, $46.64), Verizon Communications (B/N, $36.50), Vornado Realty Trust (N/N, $73.30), Wal-Mart Stores, Inc. (N/N, $54.72), Walgreen Company (B/N, $33.79), Wells Fargo & Company (B/A, $26.05), Weyerhaeuser Co. (CS, $16.79), The Williams Companies, Inc. (NR, $26.41), Xerox Corp. (N/N, $7.43) and Yum! Brands, Inc. (S/N, $51.88).


Disclosure Appendix

N b 7 2011November 7, 2011

Disclosure Appendix

Coverage group(s) of stocks by primary analyst(s)

Th i t d ith th l t( )There are no coverage groups associated with the analyst(s).

Company-specific regulatory disclosures

Th ifi l t di lThere are no company-specific regulatory disclosures


Disclosure Appendix

Distribution of ratings/investment banking relationships

Goldman Sachs Investment Research global coverage universe

R ti Di t ib ti I t t B ki R l ti hiRating Distribution Investment Banking Relationships

Global

Buy Hold Sell

31% 55% 14%

Buy Hold Sell

50% 43% 36%

As of October 1, 2011, Goldman Sachs Global Investment Research had investment ratings on 3,198 equity securities. GoldmanSachs assigns stocks as Buys and Sells on various regional Investment Lists; stocks not so assigned are deemed Neutral.Sachs assigns stocks as Buys and Sells on various regional Investment Lists; stocks not so assigned are deemed Neutral. Such assignments equate to Buy, Hold and Sell for the purposes of the above disclosure required by NASD/NYSE rules. See 'Ratings, Coverage groups and view s and related definitions' below .

Price target and rating history chart(s)

Compendium report: please see disclosures at http://www.gs.com/research/hedge.html. Disclosures applicable to the companies included in this compendium can be found in the latest relevant published research.


Disclosure Appendix

Regulatory disclosures

Disclosures required by United States laws and regulationsSee company-specific regulatory disclosures above for any of the following disclosures required as to companies referred to in this report: manager or co-manager in a pendingSee company-specific regulatory disclosures above for any of the following disclosures required as to companies referred to in this report: manager or co-manager in a pending transaction; 1% or other ownership; compensation for certain services; types of client relationships; managed/co-managed public offerings in prior periods; directorships; for equity securities, market making and/or specialist role. Goldman Sachs usually makes a market in fixed income securities of issuers discussed in this report and usually deals as a principal in these securities.

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Disclosure Appendix

Ratings, coverage groups and views and related definitionsBuy (B), Neutral (N), Sell (S) – Analysts recommend stocks as Buys or Sells for inclusion on various regional Investment Lists. Being assigned a Buy or Sell on an Investment List is determined by a stock’s return potential relative to its coverage group as described below. Any stock not assigned as a Buy or a Sell on an Investment List is deemed Neutral. Each

i l I t t R i C itt i i l I t t Li t t l b l id li f 25% 35% f t k B d 10% 15% f t k S ll h thregional Investment Review Committee manages various regional Investment Lists to a global guideline of 25%-35% of stocks as Buy and 10%-15% of stocks as Sell; however, the distribution of Buys and Sells in any particular coverage group may vary as determined by the regional Investment Review Committee. Regional Conviction Buy and Sell lists represent investment recommendations focused on either the size of the potential return or the likelihood of the realization of the return.

Return potential represents the price differential between the current share price and the price target expected during the time horizon associated with the price target. Price targets are required for all covered stocks. The return potential, price target and associated time horizon are stated in each report adding or reiterating an Investment List membership.

Coverage groups and views: A list of all stocks in each coverage group is available by primary analyst, stock and coverage group at http://www.gs.com/research/hedge.html. The analyst assigns one of the following coverage views which represents the analyst’s investment outlook on the coverage group relative to the group’s historical fundamentals and/or valuation Attractive (A) The investment outlook over the following 12 months is favorable relative to the coverage group's historical fundamentals and/or valuation Neutral (N) Thevaluation. Attractive (A). The investment outlook over the following 12 months is favorable relative to the coverage group s historical fundamentals and/or valuation. Neutral (N). The investment outlook over the following 12 months is neutral relative to the coverage group's historical fundamentals and/or valuation. Cautious (C). The investment outlook over the following 12 months is unfavorable relative to the coverage group's historical fundamentals and/or valuation.

Not Rated (NR). The investment rating and target price have been removed pursuant to Goldman Sachs policy when Goldman Sachs is acting in an advisory capacity in a merger or strategic transaction involving this company and in certain other circumstances. Rating Suspended (RS). Goldman Sachs Research has suspended the investment rating and price target for this stock, because there is not a sufficient fundamental basis for determining, or there are legal, regulatory or policy constraints around publishing, an investment rating or target. The previous investment rating and price target, if any, are no longer in effect for this stock and should not be relied upon. Coverage Suspended (CS). Goldman Sachs has suspended coverage of this company. Not Covered (NC). Goldman Sachs does not cover this company. Not Available or Not Applicable (NA). The information is not available for display or is not applicable. Not Meaningful (NM). The information is not meaningful and is therefore excluded.

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European Union: Goldman Sachs International, authorised and regulated by the Financial Services Authority, has approved this research in connection with its distribution in the


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Disclosure Appendix

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