8-KOther Events

GOLDMAN SACHS GROUP INC 8-K Report, Corporate Update (Dec 29, 2017)

Filed December 29, 2017For Securities:GSGS-PAGS-PCGS-PDGSCE

Summary

Goldman Sachs Group, Inc. (GS) has filed an 8-K report on December 28, 2017, to disclose the estimated financial impact of the recently enacted Tax Cuts and Jobs Act (Tax Legislation). The firm anticipates a significant reduction in earnings for the fourth quarter and full year ending December 31, 2017, estimated at approximately $5 billion. This impact is primarily driven by a repatriation tax on deemed repatriated earnings of foreign subsidiaries, accounting for about two-thirds of the total estimated reduction. The remaining impact stems from the adoption of a territorial tax system and the remeasurement of U.S. deferred tax assets due to the lower corporate income tax rates. Goldman Sachs cautions that these are preliminary estimates based on currently available information and are subject to change. The firm plans to announce its fourth-quarter and full-year 2017 financial results and provide further details on January 17, 2018.

Key Highlights

  • 1Enactment of the Tax Cuts and Jobs Act (Tax Legislation) on December 22, 2017.
  • 2Estimated reduction in earnings for Q4 and full-year 2017 of approximately $5 billion.
  • 3Approximately two-thirds of the earnings reduction is attributed to a repatriation tax on foreign subsidiary earnings.
  • 4Other impacts include the shift to a territorial tax system and remeasurement of U.S. deferred tax assets.
  • 5The company emphasizes these are preliminary estimates based on current information and assumptions.
  • 6Potential for material changes in the estimated impact due to evolving interpretations, guidance, or firm actions.
  • 7Goldman Sachs will host a conference call to announce Q4 and full-year 2017 results on January 17, 2018.

Frequently Asked Questions

Goldman Sachs estimates that the Tax Cuts and Jobs Act will reduce its earnings for the fourth quarter and full year ending December 31, 2017, by approximately $5 billion. This estimate is based on currently available information.

The earnings reduction is mainly due to a repatriation tax on deemed repatriated earnings of foreign subsidiaries (about two-thirds of the impact), the implementation of a territorial tax system, and the remeasurement of U.S. deferred tax assets at lower enacted corporate tax rates.

These are preliminary estimates and are subject to change, potentially materially. Changes could arise from evolving interpretations of the law, new guidance issued by tax authorities, or actions taken by Goldman Sachs as a result of the new legislation.

Goldman Sachs plans to announce its financial results for the fourth quarter and year ended December 31, 2017, and discuss these matters further on a conference call scheduled for January 17, 2018.