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Goldman Sachs Group, Inc. (NYSE:GS)

F2Q07 Earnings Call

June 14, 2007 11:00 am ET

Executives

John Andrews - Director of Investor Relations

David Viniar - CFO, Executive Vice President

Analysts

Guy Moszkowski - Merrill Lynch

Glenn Schorr - UBS

Joseph Dickerson - Atlantic Equities

Mike Mayo - Deutsche Bank

Roger Freeman - Lehman Brothers

Douglas Sipkin - Wachovia Securities

Meredith Whitney - CIBC

Michael Hecht - Banc of America Securities

Presentation

Operator

Good morning. My name is Dennis, and I will be your conference facilitator today. I would like to welcome everyone to the Goldman Sachs Second Quarter 2007 Earnings Call. After the speakers' remarks, there will be a question-and-answer period. (Operator Instructions). Also, this call is being recorded today, June 14, 2007. Thank you.

Mr. Andrews, you may begin your conference.

John Andrews

Dennis, thank you, and good morning, I would like to welcome you all to our second quarter earnings conference call. Let me remind everybody that today's call may include forward-looking statements. These statements represent the firm’s belief regarding future events that by their nature are uncertain and outside of the firm’s control. The firm’s actual results and financial condition may differ, possibly materially, from what is indicated in those forward-looking statements.

For a discussion of some of the risks and factors that could affect the firm’s future results, please see the description of risk factors in our current annual report on Form 10-K for our fiscal year ended November, 2006. I would also direct you to read the forward-looking disclaimers in our quarterly earnings release, particularly as it relates to our investment banking transaction backlog, and you should also read the information on the calculation of non-GAAP financial measures that is posted on the Investor Relations portion of our website, www.gs.com.

This audiocast is copyrighted material of the Goldman Sachs Group Inc. and may not be duplicated, reproduced or rebroadcast without our consent.

Let me now ask David Viniar, our CFO, to review the firm’s second quarter results. David.

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David Viniar

Thanks John. Good morning, I would like to thank all of you for listening. I will give a brief review of our results and then will be happy to take your questions.

I am pleased to report another strong quarter. Second quarter net revenues were $10.2 billion, net earnings were $2.3 billion and earnings per diluted share were $4.93.

For the quarter, return on tangible equity was 31.2% and return on common equity was 26.7%. While managing uniformly strong as the first quarter, most of our businesses continued to benefit from the favorable operating environment in the second quarter. Despite choppy conditions and lower volatility in many markets, we still had our fourth best FICC quarter our third best equities trading quarter and our best quarter ever in Investment Banking, Equities Commissions, Asset Management fees and security services.

The strength of our franchise is particularly evident when you consider that year-to-date net revenues and earnings have grown in double digits over last year's remarkable results.

Let me now review each one of our major businesses. Investment Banking produced record net revenues of $1.7 billion in the quarter, slightly beating the first quarter’s results.

Second quarter advisory revenues were $709 million, down 18% from the first quarter’s record $861 million.

Merger activity continued to accelerate during the quarter as both strategic and financial sponsor clients remained very active.

Goldman Sachs again retained its leadership in mergers, ranking first in Global Announced M&A for the calendar year-to-date.

We advised on a number of important transactions that closed during the quarter, including the $62 billion spinoff of Kraft Foods, and the $13 billion acquisition of Hutchinson Essar by Vodafone.

We are also advisor on a number of important announced transactions, including the $59 billion acquisition of Endesa by Enel and Acciona, Alcoa’s proposed $33 billion acquisition of Alcan and the $27 billion acquisition of Alltel by an investor group that includes TPG and Goldman Sachs Capital partners.

Underwriting revenues were $1 billion, 18% above the first quarter. Debt underwriting revenues grew 11% to a record $654 million and equity underwriting revenues grew 35% to $358 million.

Financing activity remained robust through most of the second quarter. Although market uncertainty dampened the equity financing of the early part of the quarter, activity levels accelerated as the major equity markets recovered in April and May.

Debt financing remained robust, particularly leverage finance, as interest rates remained low, credit spreads tight, and acquisition activity was high.

During the second quarter, we participated in a number of significant transactions, including the $8 billion equity issuance by VTB, one of Russia’s largest banks. The $2.6 billion equity follow on by Taiwan Semiconductor, they are now at $1 billion 144A IPO by Oaktree using our proprietary GS TrUE platform, and the $1.1 billion high yield issuance to [Cognosci].

Our Investment Banking backlog increased during the quarter and reached a new record level, surpassing for the first time the prior record set in the second quarter of 2000.

Let me turn to trading and principal investments. This comprises FICC, equities, and principal investments.

Net revenues in this segment were $6.6 billion in the second quarter, down 29% from the record first quarter. FICC net revenues were $3.4 billion, 27% below the record first quarter.

Strength in currencies and rates was offset by sequential declines in commodities, credit, and mortgage net revenues. Commodities and credit still had strong quarters, but with reduced volatility in customer activity they were unable to match the first quarter results. Mortgages had a weak quarter as the sub-prime sector continued to be challenged.

Equities net revenues for the second quarter were $2.5 billion, down 19% from the record first quarter. Equities trading net revenues were up 35% to $1.4 billion essentially equal to the third best quarter ever, despite the challenging equities market in late February and March.

Our derivatives, principal strategies and cash equities businesses all produced strong revenues that had lower sequential revenues reflecting the less robust environment, compared to the first quarter. Equities commissions however were up 17% to a record $1.1 billion.

Even with the continued decline of average commission rates and cash equities, we believed our growth here underscores that we continue to gain share in this business.

Turning to risk, average daily value at risk in the second quarter was $133 million compared to $127 million for the first quarter. The increase in VaR was mostly in the interest rates category and largely reflected higher volatility in the parts of the mortgage market.

Let me now review principal investments. Second quarter net revenues were $784 million, down from the record $1.7 billion produced in the first quarter. Corporate and real estate principal investing produced net revenues of $973 million in the second quarter as the business continues to benefit from a favorable environment for both investing and harvesting.

Partially offsetting those revenues were losses of $125 million and $64 million respectively on our ICBC and SFMG investments as the common stocks of both companies were down in the quarter. The combined ICBC and SFMG's results lowered diluted earnings per share by $0.14 per share in the quarter.

Asset management and security services reported second quarter net revenues of $1.8 billion, up 13% from the first quarter. Asset management produced net revenues of $1.1 billion, down slightly from the first quarter as growth in management fees was offset by decline of a million in incentive fees.

Management fees in the second quarter were a record, exceeding $1 billion for the first time. Assets under management increased to a record $758 billion at the end of the second quarter. The $39 billion increase consisted of net in-flows of $18 billion and asset appreciation of $21 billion.

Second quarter results in security services were also a record, with net revenues of $757 million, up 44% sequentially. These results reflected the seasonally strongest second quarter and continued growth in customer balances.

Now let me turn to expenses. Compensation and benefits expense in the second quarter was $4.9 billion, accrued at 48% of net revenues. Second quarter non-compensation expenses, excluding $100 million of expenses related to consolidated investments, were $1.8 billion, 5% increase from the first quarter. The sequential increase largely resulted from higher brokerage clearing fees.

Headcount at the end of the second quarter was approximately 28,000, up 4% from the first quarter and 6% from year-end 2006.

Our effective tax rate was 32% in the second quarter and 33.3% for the first half of 2007 that compared to a 33.6% tax rates for the first half of 2006.

During the quarter, the firm repurchased 5.4 million shares for approximately $1.1 billion. We currently have approximately 34 million shares remaining under the firm’s existing stock repurchased authorization.

In general, there were mixed trends in the quarter. While the equities market recovered following a weak start, several businesses reduced volatility and risk after tax from our clients versus a very robust first quarter. On the other hand, corporate and financial sponsor activity accelerated to record levels. Despite these mix trends our second quarter results again underscore the broad earnings power of Goldman Sachs and the strength to our franchise.

We are the leader in virtually all the businesses in which we compete and have a significant global presence. Most importantly and the basic reason for us success is our extraordinary focus on our clients.

Of particular importance as we look forward is our global presence. We believed our global capital market franchise is second to none. As ignored before, many of our greatest growth opportunities outside of the U.S. are in new markets and with new clients. This was again demonstrated in the second quarter when our international business accounted for approximately 52% of Goldman Sachs net revenues.

So, we cannot predict the short-term, we remain bullish on the prospect for Goldman Sachs, we have substantial growth opportunities around the world with virtually all of our businesses and we are well position to take advantage of them.

With that I would like to thank you again for listening today. And I am now happy to answer your questions.

Question-and-Answer Session

Operator

(Operator Instructions). We will pause for a moment to compile the Q&A roster. Your first question will come from the line of Guy Moszkowski with Merrill Lynch.

Guy Moszkowski - Merrill Lynch

Good morning, David.

David Viniar

Good morning, Guy.

Guy Moszkowski - Merrill Lynch

First of all, I was wondering if you could give us a little a bit more of a flavor for the generation of the $909 million in the corporate and real estate gains. I don’t know how much you can tell us about the mix between mark-to-market versus realized, domestic versus international, and sort of corporate versus real estate?

David Viniar

The one thing I will tell you Guy, it was predominantly corporate. And that's really the only one of those questions I am comfortable to answer.

Guy Moszkowski - Merrill Lynch

Okay, fair enough. How about on the decrease in asset management incentive fees that we saw versus the two benchmark quarters? Can you give us a sense for what went with that?

David Viniar

Sure. It's been fairly widely publicized that we've had a disappointing performance in some of our hedge funds within the alternative investment segment and asset management and that's what drove the incentive fee decline.

Guy Moszkowski - Merrill Lynch

Okay. The comp ratio which was 48% versus just under 50% in the year ago quarter, should we consider that to be a result of a shift in business mix relative to the comparable quarter or some sort of change in your internal accrual policy?

David Viniar

No. I hate to mention this. But don't forget last year we had the impact of 123R. But I would not expect there is no shift in policy or business mix or anything, 48% is our best estimate as received here today of what the accrual needs to be.

Guy Moszkowski - Merrill Lynch

Okay. Thanks for that. May be you can give us a sense for what impact you are seeing currently in terms of the recent sort of close quarter and interest rate shift in the market., How that's affecting different aspects of your business and in conjunction with the increase in interest rate VaR that you reported, is that creating either issues or opportunities for you?

David Viniar

Couple of things. No, I am going to start with your last question. Remember the increase in interest rate VaR last quarter was almost exclusively driven by the increase in volatility in the mortgage market. They had nothing to do with increased positions. Now that does increase risk and so risk was higher because of it. But that's really what drove the increase in the interest rate category into our last quarter.

Couple of things, I would say first of all, by historical standards interest rates are still pretty low. The second thing I'd tell you is, if you go back over the last couple of years you will see in each of them, a short-term spike in interest rates. Now, I can't tell you if this is a short-term spike or not, I don't know, but you have seen that before, and you have seen equity markets initially reacted badly to interest rate increases but have since recovered a fair amount. So as long as you saw the numbers this morning, there's really no indications of a big pickup inflation as long as we continue to see that type of benign environment, as long as we still see good available liquidity and credit and that leads to good economic growth and I don't think its going to have much of the effect on our business.

Guy Moszkowski - Merrill Lynch

Great, thank you David. That's really helpful.

David Viniar

You're welcome.

Operator

Your next question will come from the line of Glenn Schorr with UBS.

Glenn Schorr - UBS

Hi Dave.

David Viniar

Good morning, Glenn.

Glenn Schorr - UBS

Good morning. Couple of quickies, one is as you've announced the Wind Energy, and Horizon sale you've announced interests as to get bids and sale of the Cogentrix components. Obviously, great investments as we expect great returns, is it a little weird that your are selling while everyone is buying, especially given that I think you have a good long-term secular outlook on commodities business in general?

David Viniar

I think, we are quite opportunistic on when we buy and sell assets. The Horizon sale, we just think it was the right time to sell that particular asset. We have announced that Cogentrix is for sale. When we bought the assets, the intent was to keep them for a longer period of time but the markets are such that again it seems to us to be right to sell those particular assets. There are other assets within the commodities world that we are looking to buy at this time. And so, we are just being opportunistic, when we think it makes sense to buy and sell certain assets.

Glenn Schorr - UBS

Simple enough. Anything else to strengthen the commission line, I agree with your earlier comment in terms of, boy, something must be going right, for while there is so much commission compression for you to be able to have a 17% sequential rise, 16 year-over-year. Is that, you mentioned market share gains, is there any thoughts you can give us in between both, say the cash business, derivatives is there, a clearing component that flows through this line that, that's picking up? Just any other color you would be interested in?

David Viniar

No. It is really just an increase in share, and it's really across both cash and derivatives

Glenn Schorr - UBS

And any comment on high-touch, low-touch?

David Viniar

Not really.

Glenn Schorr - UBS

Okay. And the last one, this is unlike years, less than 3 or 4 years that your comp accrual is now up 6% year-to-date. And your headcounts up 6% year-to-date. You don't have that big cushion nor does anybody else, that you've enjoyed in the past, how do you think about that as you run through the rest of the year, I mean, I know your answer is going to be some version up, we think we are fine here. But, any ways, any thought there?

David Viniar

You answered the question. We never --

Glenn Schorr - UBS

Okay. Next question.

David Viniar

That is so, we had a big cushion, we always accrue our compensation as our best estimate of where we think we going to have to pay people. It is sometimes difficult to estimate, because we pay the substantial portion of our compensation in year end bonuses, but we are accrued as we think is appropriate right now.

Glenn Schorr - UBS

Okay. I am done. Thank you.

David Viniar

You are welcome.

Operator

Your next question will come from the line of Joseph Dickerson with Atlantic Equities

Joseph Dickerson - Atlantic Equities

Hi David, thanks for taking my question.

David Viniar

Good morning, Joe.

Joseph Dickerson - Atlantic Equities

Hi. I just have a quick question, if you can elaborate on it, you made a comment on the higher brokerage in clearing fees, and I am just wondering if the 35% year-over-year increase there, isn’t any relation of the changing market structure both in the US and Europe?

David Viniar

No, it is really just increased volumes. That’s really over us.

Joseph Dickerson - Atlantic Equities

And can I ask another question? Is there any degree to which you are competing with the exchanges now?

David Viniar

No. Do we compete with the exchanges, I guess I would say, there are a lot of exchanges around the world, and in certain places where we may think that exchanges are not being competitive in the prices they charge us, we and others in our industry might get together and try to form a consortium that performed services in competition with certain exchanges at better prices.

Joseph Dickerson - Atlantic Equities

Thanks David that’s helpful.

David Viniar

You are welcome.

Operator

Your next question will from the line of Mike Mayo with Deutsche Bank.

Mike Mayo - Deutsche Bank

Good morning.

David Viniar

Good morning, Mike.

Mike Mayo - Deutsche Bank

Can you comment more on the growth for non-U.S. versus the U.S. so has the length quarter growth rate that in the relative margins?

David Viniar

Well, let me deal with the first part of it. Our non-U.S. revenues were a little bit over 50% in the first quarter and were roughly 52% in the second quarter, and it always hard to look at one quarter versus the next, because a transaction or a couple of transactions a big principal investment and ICBC gain, I mean there is big things that could cause that to move around a little bit. So, I wouldn’t pay too much attention to 52 versus 51 versus 49, but what I will tell you is that we continue to see our international business is growing faster than our U.S. businesses. Not to say that our U.S. businesses aren't growing. If I will order them, I would tell you and this is consistent with what we are seeing, probably for the last five years, is our U.S. businesses are growing, our European businesses are growing faster and our Asian businesses are growing even faster and I expect that that will continue.

Mike Mayo - Deutsche Bank

And what percent of new headcount is outside U.S.?

David Viniar

It's the same answer to what I just gave you. It is on a percentage basis, much heavier in Asia, and it will be then second in Europe, and last in the US.

Mike Mayo - Deutsche Bank

And China I know that's the long-term position you have, but there has been some changes recently, whether it's with private equity or I guess the bond business. Can you comment on what you are doing there?

David Viniar

Nothing different. Again, we considered China to probably be the single biggest growth opportunities front; given the size of their economy and the fact that the government in China very much is committed to a modern financial system. We are seeing more and more companies accessing the public markets. We are seeing companies merge and do strategic transactions. We think that the opportunities there are still every bit as good as they have been.

Mike Mayo - Deutsche Bank

And lastly, again the margins for US versus non-US?

David Viniar

We don't comment on that.

Mike Mayo - Deutsche Bank

All right thank you.

David Viniar

You are welcome.

Operator

Your next question will come from the line of Roger Freeman with Lehman Brothers.

Roger Freeman - Lehman Brothers

Hi, David.

David Viniar

Good morning, Roger.

Roger Freeman - Lehman Brothers

Good morning. I just wanted to ask you a question on mortgage business. Obviously, recognizing smaller pieces of business for you, but they are disappointed their mortgage revenues are actually up in that quarter. So you take more principal risk in the business, if the question would be was there mostly a mark issue and is it a result of closing the quarter little bit earlier or positioning for further spread widening during the quarter that didn't happen?

David Viniar

I can't comment on that, I don't know about that and they do what they do. For us it was a tougher quarter and it was a combination of lower volumes, more difficulty in getting structure transactions done, and retains positions that we’re going to go into some of those structured vehicles being workless, workless not worthless.

Roger Freeman - Lehman Brothers

Right. Okay and any supposing comment on how much the business is down sequentially?

David Viniar

Enough.

Roger Freeman - Lehman Brothers

Okay.

David Viniar

As you said that they don't want to put this in overall context, when you look at mortgages as in the context Goldman Sachs it's just not that big and in the strict complex where we have five big complexes credit rates, commodities and currencies and mortgages, mortgage is probably the smallest.

Roger Freeman - Lehman Brothers

Right. Okay, understood. The tax rate for the quarter was lower; I am not sure, I might have missed your commentary on that, is there anything particular behind that is it the higher international mix?

David Viniar

Yeah. Geographic mix, and if you look first half it's pretty much, it's pretty close quarter-over-quarter geographic mix.

Roger Freeman - Lehman Brothers

Okay. In the VaR, you talked a little bit about the interest rate VaR increasing, the commodity VaR came down a lot, anything to comment around that is it just the lower activity overall, I think you also mentioned that business was lower?

David Viniar

Yes. Lower volatility, lower activity levels.

Roger Freeman - Lehman Brothers

Okay. And then I guess lastly, just on the asset management, obviously there has been a sort of publicized concern we can try on the Alpha fund, are there redemptions coming out of that?

David Viniar

You know, there have not been substantial redemptions. And that's , while it has not performed great, I think, people who are investing in the fund understand that it is a high risk, very volatile fund, it is fully invested in doing what it has told people it will do. Its had over the life of the fund quite good performance but recent weakness. And so, the withdrawals have been minor.

Roger Freeman - Lehman Brothers

Got it. Okay, thank you.

David Viniar

You are welcome.

Operator

Your next question will come from the line of Douglas Sipkin with Wachovia.

Douglas Sipkin - Wachovia Securities

Hi, good morning.

David Viniar

Hi Dough.

Douglas Sipkin - Wachovia Securities

I just wanted to follow-up on the last question, obviously you mentioned, the redemptions have been relatively small if any at the global. I was just surprised to see the alternative flow number sort of be zero considering, we are hearing a lot about using increased allocations. Is there anything specific to this quarter or some seasonality in your alternative Asset Management business that we should be aware of? Again, just because I thought, yeah, I don't think this is your worst, I guess, net flow number that you've disclosed in the alternative segments. Any more color would be helpful in that area?

David Viniar

There's not really much color to add, it was flat over the quarter. We are still pretty optimistic on the business, we are still, adding new products to the business, and I think overtime you will see that grow. It was net flat during this quarter.

Douglas Sipkin - Wachovia Securities

Great, and then just your perspective on having a pretty substantial private equity business. Inside the organization, how things might change if at all with some of your private equity competitors becoming public. I don't know if, you guys see that as a positive or negative for the business. Any color around how you guys are thinking about a potentially pick-up and then some of your private guys coming to the public markets?

David Viniar

I don't think it will affect the private equity business at all. In most cases it is their management companies. They are going public. The funds themselves are still private funds and I think they will continue to do business exactly as they have. They are in some ways competitors but they are very, very important clients. Our private equity business tends to partner with other private equity firms in almost every circumstance and I don't think, that will change at all.

Douglas Sipkin - Wachovia Securities

So then I guess the fact that may be they have them on a permanent source of capital and they are relying on, I guess, sort of the investment banks. You are not seeing that as a risk at all?

David Viniar

No. I actually don't think it will. Remember it's the management companies that are generally going public not to fund themselves. So, I don't think its going to change things at all.

Douglas Sipkin - Wachovia Securities

Okay. Great, thanks for taking my question.

David Viniar

No problem.

Operator

(Operator Instructions). Your next question will come from the line of Meredith Whitney with CIBC.

Meredith Whitney - CIBC

Hi, David.

David Viniar

Good morning, Meredith.

Meredith Whitney - CIBC

In the context of all the private equity money that hasn't been utilized yet, and in relationship to your very strong sovereign relationship in the papers recently, can people afford not to do business with Goldman? Does the competitive advantage grow as people have to go outside of traditional markets to deploy that capital for you?

David Viniar

I don't know if it grows. I hear, what we've talked about, the fact that we think we have a bigger competitive advantage outside of the United States than we do inside the United States. In some places given our commitment there how long it's been there, our brand. And so, I think it is helpful to us in making investments outside of the Untied States given our brand that are commitment in those prices. I'm not sure it's a bigger competitive advantage but it's certainly part of our competitive advantage.

Meredith Whitney - CIBC

Would you characterize the barriers to entry into those, as I say that emerging market is obviously outside of Europe and the U.S. as higher?

David Viniar

I think you need to be there, you need to be there for while, you need to have people on the ground, you need to have good relationships. Otherwise, the risks are certainly higher. Doesn't mean people can do it, but there you have to be very careful what you are doing.

Meredith Whitney - CIBC

Okay and then just for the last question in terms of if you could roughly quantify the amount of investments you are making in terms of all of your funds that are in emerging markets versus rest of the world?

David Viniar

I can't, but I can tell you that it is a big focus, but investments tend to be small.

Meredith Whitney - CIBC

Okay.

David Viniar

So, we tend to make larger numbers of smaller investments given the risk in those markets.

Meredith Whitney - CIBC

Got it. Okay, thanks

David Viniar

You are welcome

Operator

Your next question will come from the line of Michael Hecht with the Banc of America Securities.

Michael Hecht - Banc of America Securities

Sorry, I had my phone mute.

David Viniar

No problem.

Michael Hecht - Banc of America Securities

Good morning. How are you doing?

David Viniar

I am good. Thank you, good morning.

Michael Hecht - Banc of America Securities

Just to follow up on Guy’s question on the comp ratio. What was the comp ratio year-ago excluding 123R that we should think about it as the comparison to the 48%, so far this year?

David Viniar

It was 49%

Michael Hecht - Banc of America Securities

49 okay.

David Viniar

Yeah.

Michael Hecht - Banc of America Securities

Okay, thanks. I just wanted to another growth focus I think I heard you guys talk about recently just widening out your investment banking footprints in middle market companies and just wanted if you could give any color on how the tractions going there and--

David Viniar

Sure. Yes, I have said that and we have talked about that as being a strategic initiative and we think it is going well. The investment banking business in general is quiet robust right now

Michael Hecht - Banc of America Securities

Okay.

David Viniar

And then looking at the companies under the top tier that we usually deal with, it is very important source in the business for us.

Michael Hecht - Banc of America Securities

Then there is a thinking that, the middle markets are just less well served. I guess what's changed overtime you are to making more aggressive there?

David Viniar

The couple of things we have changed are, one that you mention that it is less well served, also the need within that market not just for advice, but also for capital. And our strategy of being an advisor or financier or an investor, switch right in with what companies in that segment of the market you are looking for.

Michael Hecht - Banc of America Securities

Okay, great. And then that probably the Oaktree transaction this quarter was interchange. Just wondering, if you could comment on how your backlog of kind of private market transaction looks on, its sound like a pretty successful transaction for Oaktree.

David Viniar

I can't give specifics on that, but we are very proud of that transaction.

Michael Hecht - Banc of America Securities

Okay, and then just last question. Any big shift in VaR at the end of the period versus the average, which was kind of up a bit, overall quarter-over-quarter versus the downtick in trading revenues?

David Viniar

That will be just disclosed in the Q. And it was, pretty close to the average at the end of the quarter. You will see higher early in the quarter, lower in the middle quarter and about average at the end of the quarter.

Michael Hecht - Banc of America Securities

Okay, got it. All right, thanks.

David Viniar

You are welcome.

Operator

Your next question is a follow-up question from the line of Roger Freeman with Lehman Brothers

Roger Freeman - Lehman Brothers

Oh, hi. Just a follow-up, I think you've already touched on it. I want to just ask about this GS TrUE as well, do you think this is something, if you can answer that, this sort of suited for the private equity industry, or looking to go public, or you also pitching this to other client base as well?

David Viniar

I think it could have applications for various types of companies, not just private.

Roger Freeman - Lehman Brothers

Okay, all right. That was it, thanks.

David Viniar

You are welcome.

Operator

And at this time, there are no further questions.

John Andrews

Great Dennis, this is John Andrews again. We would like to thank you for listening today. This call will be available on replay on our website in an hour or so. Thank you for your time or so. Otherwise thanks again for taking your time.

Operator

Ladies and gentlemen, this does conclude today's Goldman Sachs second quarter 2007 earning conference call. You may now disconnect.

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Source: Goldman Sachs F2Q07 (Qtr End 5/25/07) Earnings Call Transcript
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