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Goldman Sachs to Redeem Preferred Stock Issued to Berkshire Hathaway

New York, March 18, 2011 -- The Goldman Sachs Group, Inc. (NYSE: GS) today announced that the Federal Reserve has concluded that it has no objection to Goldman Sachs’ proposed 2011 capital actions, which include the redemption in full of the 50,000 shares of the Company’s 10% Cumulative Perpetual Preferred Stock, Series G (Preferred Shares) held by Berkshire Hathaway Inc. and certain of its subsidiaries (collectively, Berkshire Hathaway), the repurchase of outstanding common stock and a potential increase in our quarterly common stock dividend.

The Company has mailed notices of redemption to Berkshire Hathaway stating that the Company will redeem in full the Preferred Shares held by Berkshire Hathaway, for the stated redemption price of $110,000 per share, plus accrued and unpaid dividends. The redemption date will be April 18, 2011. Berkshire Hathaway continues to hold the warrant to purchase 43,478,260 shares of the Company’s common stock, par value $0.01 per share, which Berkshire Hathaway purchased from the Company concurrently with the Preferred Shares on October 1, 2008.

The redemption includes a one-time preferred dividend of approximately $1.64 billion which will be reflected in the Company’s first quarter results. This is expected to reduce reported diluted earnings per common share for the first quarter by approximately $2.80 per share. The redemption also results in the acceleration of $24 million of preferred dividends that are payable from April 1 to the redemption date, which will reduce reported diluted earnings per common share for the first quarter by approximately $0.04. While the Preferred Shares were outstanding, the Company incurred a dividend expense of $125 million per quarter, or $500 million annually, which reduced diluted earnings per common share by $0.85 in 2010.

The Goldman Sachs Group, Inc. is a leading global investment banking, securities and investment management firm that provides a wide range of financial services to a substantial and diversified client base that includes corporations, financial institutions, governments and high-net-worth individuals. Founded in 1869, the firm is headquartered in New York and maintains offices in London, Frankfurt, Tokyo, Hong Kong and other major financial centers around the world.
 

Media Relations:
Lucas van Praag
212-902-5400

Investor Relations:
Dane E. Holmes
212-902-0300