goldman sachs us options research weekly options watch jan 16, 2013

January 16, 2013

United States

Weekly Options Watch Options Research

Earnings Edition: AMAT, BMY, INTC, ROC, SBUX

Trade Recommendations: AMAT, BMY, INTC, ROC, SBUX, ARO, C, CROX, DFS, DPZ, EBAY, GPS, URBN, VALE5 (2) One page of WOW (3) Options Insight: Buy Semi Equipment vol for Intel, Samsung capex (4)

Detailed Trade Ideas: AMAT, BMY, INTC, ROC, SBUX (5-8) Weekly Options Watch Chartbook - Published today alongside the Weekly Options Watch, contains correlation, skew,

term structure and sector-wise volatility screens for our WOW Coverage Universe.

Options Insight: Buy Semi Equipment vol for Intel, Samsung capex

Intel (17-Jan) and Samsung (24-Jan) are due to announce their 2013 capex

guidance, which together represent over half of global semi capex. We

believe the options market is missing the earnings-like moves that semi

equipment stocks realize on bellwether capex announcements. We

recommend investors position with February options, which capture Intel

and Samsung capex guidance, and likely each of these earnings reports.

Our favorite implementation is buying AMAT Feb $12 straddles for 7%.

Trade Ideas: AMAT, BMY, INTC, ROC, SBUX

Trade 1: Buy AMAT Feb options to capture multiple catalysts. AMAT

shares have realized a median move +/-4% on INTC and +/-3% on Samsung

capex guidance, as well as a +/- 3% on its own earnings.

Trade 2: Hedge risk to INTC earnings. Our analyst views the debate this

quarter centered around the extent of downside to margins. While he sees

risks to expectations, low skew suggests that option investors not positioning

for this risk. We recommend investors hedge with puts ahead of results.

Trade 3: Buy SBUX calls for better-than-expected SSS. This quarter

appears more controversial, yet our analyst expects management to beat

consensus US SSS estimates. Options prices near record lows.

Trade 4: Buy calls to capture ROC earnings and stock moving

analyst day. ROC has averaged +/-5% on earnings in addition to +/-3% on

past analyst days. Potential for strategic update on non-growth businesses

could drive additional volatility this quarter.

Trade 5: BMY options are inexpensive ahead of 2013 guidance. Vol

near record lows yet uncertainty around 2013 guidance.

Trade Close: We recommend closing 1 trade, LULU at a loss. 1 trade, GRMN

was closed between publications, at a gain.

Katherine Fogertey

(212) 902-6473 [email protected] Goldman, Sachs & Co.

John Marshall

(212) 902-6848 [email protected] Goldman, Sachs & Co.

Amarnath Jha

(212) 934-9821 [email protected] Goldman Sachs India SPL

Goldman Sachs 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. For Reg AC certification and other important disclosures, see the Disclosure Appendix, 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. This report is intended for distribution to GS institutional clients only.

The Goldman Sachs Group, Inc. Goldman Sachs Global Economics, Commodities and Strategy Research

Trade recommendations summary

We recommend adding 5, holding 9 and closing 1 trade this week. 1 trade was closed

between publications. The table below focuses on the catalyst-based recommendations

discussed in the WOW; for our macro and thematic recommendations, we refer readers to

our other Cross-Product reports on GS360.

Exhibit 1: Trade recommendations summary Recommendations and indicative prices as of January 15, 2013.

Source: Goldman Sachs Global Research estimates, Reuters. Note: A negative value indicates that investors collect premium to put on the trade. VALE5 is calculated OTC assuming March 17, 2013 expiration and 24% implied volatility.

Stock Trade Description Initiation date Stock Trade Stock Trade

Add to these trade recommendations

AMAT BUY Feb-13 $12 STRADDLE 16-Jan-13 11.77 0.76 11.77 0.76

BMY BUY Feb-13 $34 STRADDLE 16-Jan-13 34.30 1.24 34.30 1.24

INTC BUY Feb-13 $21 PUT 16-Jan-13 21.88 0.37 21.88 0.37

ROC BUY May-13 $55 CALL 16-Jan-13 51.21 1.70 51.21 1.70

SBUX BUY Feb-13 $55 CALL 16-Jan-13 54.48 1.44 54.48 1.44

Continue to hold these trade recommendations

ARO BUY Jan-13 $12.5/$14 STRANGLE 24-Dec-12 13.13 0.80 13.25 0.25

C BUY Jan-13 $42 CALL 4-Jan-13 41.39 0.73 42.57 1.07

CROX BUY Jan-13 $15 CALL 9-Jan-13 15.23 0.60 15.71 1.05

DFS BUY Jan-13 $41 CALL 19-Dec-12 40.53 1.25 39.34 0.05

DPZ BUY Jan-13 $46 CALL 9-Jan-13 45.63 0.50 45.08 0.35

EBAY BUY Jan-13 $55 CALL 9-Jan-13 52.68 0.68 52.51 0.54

GPS BUY Mar-13 $32 CALL 19-Dec-12 32.02 1.99 32.46 1.97

URBN BUY Jan-13 $41 STRADDLE 9-Jan-13 41.18 2.15 42.10 1.85

VALE5 BUY Mar-13 R$42 CALL 14-Dec-12 R$ 38.38 R$ 0.82 R$ 39.65 R$ 0.83

Close these trades

LULU BUY Jan-13 $72.5 STRADDLE 21-Nov-12 71.88 9.50 69.47 3.39

Previously closed trades

GRMN BUY Apr-13 $41 PUT 12-Dec-12 42.40 2.63 39.18 4.50

Full trade idea references with risks: Legend:

GRMN trade close (11-Jan)

https://360.gs.com/gs/portal/?st=1&action=action.binary&d=14309086&fn=/document.pdf

CROX, DPZ, EBAY, URBN trade ideas (9-Jan)


C trade idea (4-Jan)

https://360.gs.com/gir/portal//?st=1&action=action.binary&d=14269082&fn=/document.pdf

ARO trade idea (24-Dec)


DFS, GPS trade ideaS (19-Dec)

https://360.gs.com/gir/portal//?st=1&action=action.binary&d=14218879&fn=/document.pdf

VALE5 trade idea (13-Dec)


GRMN trade idea (12-Dec)


LULU trade idea (21-Nov)


Continue to hold these trade recommendations: These are open trade ideas where we think the risk/reward on the trade is still favorable; we recommend that investors who hold the position continue to do so. We would not recommend adding new money for one of the following reasons: (1) many of the key catalysts have passed, (2) the trade has moved significantly toward the place we expected it to move to, or (3) there is not enough time before expiration to put on a fresh trade.

Close these trades: With this report, we close our recommendations on these trade ideas for one of the following reasons: (1) the major catalysts have passed, (2) the fundamental thesis has changed, or (3) the trade has already moved to where we thought it should.

Initial price Current price

Add to these trade recommendations: These are open trade ideas where we think there remains a good opportunity for investors to add new money. We believe the trade is still attractive, the majority of the catalysts have not yet happened and there is still a significant portion of the time to expiration.

Exhibit 2: One page of WOW – summary of upcoming catalysts for select trade recommendations

Source: Goldman Sachs Research estimates, Bloomberg.

Recommended Upcoming Catalyst Options 8Q 1M 3M Brief Summary of Trade ThesisTicker Options Trade Catalyst Date Implied Median iVol iVol For more details and risks please view exhibit 1AMAT Buy Feb-13 $12

StraddleINTC Capex Samsung Capex Earnings Release

'17-Jan 24-Jan

Feb

- -

2.0

- -

2.6

27 24 We recommend investors position with Feb options to capture 3 stock moving catalysts - INTC capex (+/-4% historical move), Samsung capex (+/-3% historical move) and earnings (+/-3% historical move).

INTC Buy Feb-13 $21 Put Earnings Release 17-Jan 4.6 2.7 25 23 Our analyst believes 4Q12 results will be in line at best, and 1Q13 guidance will be below the Street, driven by weak PCs and margin pressure from lower utilization. We believe setup in the options market is more positive despite risks, and recommend investors position with puts to hedge.

ROC Buy May-13 $55 Call Analyst Day Earnings Release

17-Jan end-Feb

- 4.6

- 5.0

25 28 Our analyst believes that ROC shares are undervalued as investors are focusing too much on slowing TiO2 Pigments segments and missing the potential contribution from higher growth businesses. We recommend investors position for upside on the back of earnings and a historically stock-moving analyst day.

BMY Buy Feb-13 $34 Straddle

Earnings Release 24-Jan 0.9 1.1 15 16 Our analyst expects Eliquis to reach $3.6bn in sales in 2017, or 16% of total revenue, and sees the potential for Anti-pd1 to represent 4% of total 2017 sales. With implied volatilty near record levels, despite the potential for 2013 guidance to drive incremental volatility in shares, we recommend investors position with straddles.

SBUX Buy Feb-13 $55 Call Earnings Release 24-Jan 3.9 3.2 27 25 Our analyst sees an upside to consensus US SSS estimates. SBUX posted 7% SSS last quarter while indicating that it ended this most recent quarter better than it started.

Event Move

Options Insight: Buy Semi Equipment vol for Intel, Samsung capex

In the coming weeks, Intel (17-Jan) and Samsung (24-Jan) are announcing their 2013

capex guidance, which together represent over half of global semi capex. We believe

the options market is missing the earnings-like moves that semi equipment stocks

realize on bellwether capex announcements. February options capture Intel and

Samsung capex guidance, and likely each of these earnings reports. Our favorite

implementation is buying AMAT Feb $12 straddles for 7%; it has historically moved

4% on Intel capex, +/-3% on Samsung capex, and +/-3% on its own earnings.

Exhibit 3: We expect semi equipment stocks to move in reaction to Intel and Samsung’s annual capex guidance While measuring the sum of the moves relative to the straddle price is not comparable, we do it to highlight the relative

attractiveness across the universe.

Source: Goldman Sachs Research estimates, pricing as of January 14, 2013.

A note on methodology: We expect February straddles to capture all reporting dates,

although note that AMAT is still estimated. Intel capex move is calculated as the median

stock move 2003 to present on Intel 4Q earnings report. Samsung capex move is calculated

as the median move 2006 to present on Samsung capex announcements. We’ve excluded

data points when companies report on the same date as capex from INTC or Samsung is

announced to avoid double counting.

Intel Capex Guidance, 17-Jan: Controversy around 2013 capex, and the path to $7 -

$8bn, could result in increased volatility in capex stocks. Intel will likely provide initial

2013 capex guidance in this report. We believe the firm consensus is that Intel will guide

2013 capex to $9 to $10 bn, which at the mid-point is down 16% yoy. As our analyst James

Covello wrote in his 9/26/12 note “Capital reuse should allow Intel to cut capex but still get

to 14nm”, he believes that Intel’s 2013 capex will eventually be $7 to $8 bn. The reason for

this is that when Intel is upgrading existing tools in its current factories rather than adding

brand new equipment, it is able to re-use up to 80-90% of its tools at the next node and

save significant capex.

Samsung Capex Guidance, 24-Jan (after market): Our analyst expects Samsung semi

capex to drop 30% this year. Samsung (about 25% of capex) significantly increased capex

in 2010 through 2012 driven by logic and NAND capacity additions. Our Samsung analyst

Michael Bang expects Samsung to reduce semi capex by at least 30% yoy in 2013 driven by

reductions in both logic (about two thirds less new capacity additions given the likely share

loss of Apple’s foundry business to TSMC) and in memory (as process migrations rather

than new capacity is mostly sufficient to meet demand).

Our preferred implementation is buying AMAT February $12 straddles; see the

following page for more details.

Stock Move Stock Move Stock Move Straddle % ofTicker Strike Price ($) Price (%) INTC Capex + Samsung Capex + own Earnings = "Move" Spot less 'Move'

LRCX 38.00 3.05 8% 3% + 6% + 4% = 13% (5%)AMAT 12.00 0.78 7% 4% + 3% + 3% = 10% (4%)TER 17.00 1.50 9% 2% + 4% + 7% = 12% (4%)KLAC 49.00 3.30 7% 3% + 3% + 3% = 8% (2%)

INTC 22.00 1.36 6% 5% + 2% = 6% (0%)

Feb-13 ATM Straddle

Semi Capex Guidance:

17-Jan: Intel

24-Jan: Samsung

January 16, 2013 United States

Goldman Sachs Global Economics, Commodities and Strategy Research 5

Trade 1: AMAT Feb options capture over 50% of global capex guide

Buy AMAT February $12 Straddles, pay $0.76 (7%, stock $11.77); capture INTC and

Samsung capex and likely earnings prior to Feb expiration. Our analyst James Covello

notes that AMAT management has already guided capex to be down 5% - 15% for 2013,

the most conservative relative to the remaining semi equipment stocks. While AMAT

investors are likely bracing for a worse than expected capex outlook, if INTC does guide as

our analyst expects, it is possible that shares rally. AMAT has a high degree of fundamental

exposure to INTC capex (around10% of sales) and Samsung (20% of sales). Over the past

ten years, AMAT shares have moved +/-4% on INTC capex guidance and +/- 3% on

Samsung capex guidance, making AMAT shares some of the most sensitive to capex

announcements. However, AMAT one month implied volatility is the lowest of the group,

at 27%. This magnitude of capex moves are in-line to more than AMAT’s own earnings

report, yet February option buyers likely capture three events. Despite this, the straddle is

7% of spot, yet captures three “earnings-like” moves and a month of additional trading

days.

Peak earnings for AMAT are likely much higher than the Street expects. Our analyst

sees the potential for Applied Materials’ peak EPS next cycle to be $2.00 or more,

compared to $1.30 at the prior peak in 2011. He expects operational changes, that new

president Gary Dickerson is helping to implement, to drive EPS growth: (1) increased

resources in the higher margin core SPE business, (2) significantly reducing costs in solar,

(3) strong capital allocation (Varian acquisition, reduced share count). Potential update on

these initiatives on earnings could drive additional volatility in shares.

We view AMAT options as the most inexpensive to buy for INTC and Samsung capex

announcements. AMAT one month implied volatility of 27% is the lowest of the group

(exhibit 4) but AMAT moves are among the highest on INTC and Samsung capex guidance.

Further, while AMAT earnings date is not yet announced, our analyst sees a higher

likelihood that earnings occur before February expiration. Further, we note that

management is speaking at the Goldman Sachs Technology & Internet conference in San

Francisco on February 14. Commentary here could drive additional volatility in shares.

Straddle buyers risk losing the premium paid if shares close at the strike price at expiration.

Exhibit 4: AMAT one month option prices are the most

inexpensive in the semi-equipment universe, despite

having the highest exposure to Intel and Samsung

AMAT 1-mth implied volatility

Exhibit 5: February options capture guidance for 50% of

global capex, and likely earnings Listed at the money implied volatility by expiration for AMAT



AMAT, 27

TER, 36

KLAC, 28

LRCX, 32 Average, 31

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Captures 3 events:INTC capex (more stock moving than earnings)

AMAT earnings (expect by Feb expiration)Samsung capex



Trade 2: Hedge risk that INTC margins are worse than expected

Buy INTC February $21 puts, pay $0.37 (1.7%, stock $21.88); hedge against a worse

than expected margin outlook on earnings 17-Jan. Goldman Sachs Semiconductor

analyst James Covello believes 4Q12 results will be in line at best, and 1Q13 guidance will

be below the Street, driven by weak PCs and margin pressure from lower utilization. His

discussions with investors suggest that a revenue guide-down is consensus, and the

debate is about the magnitude and duration of the gross margin weakness. He expects

gross margins to decline into the low-to-mid 50% range in both 1Q and 2Q13, below the

Street at about 57%. Intel’s 3Q12 capex was its second highest all-time, which he expects to

exacerbate excess supply until at least 2Q13 (Street is modeling a 2H13 EPS snap-back that

he believes is unrealistic). He expects Intel to guide 2013 capex to $9-$10 bn (in line with

Street) and then lower it to $7-$8 bn during the year (see our 9/26/12 note on Intel’s capital

reuse).

Setup in the options market is more positive despite risks; buy puts to hedge. INTC

options are implying a +/-5% move on earnings, relative to the median 8 quarter move of

+/-3%. While our analyst sees greater risks of margins being guided lower, we note that

one month normalized skew is only in its 21%-ile over the past year, suggesting that the

options market is not positioning for a large move lower. Put buyers risk losing the

premium paid if shares close above the strike price at expiration.

Trade 3: Buy SBUX calls as SSS upside percolates

Buy SBUX February $55 calls, pay $1.44 (2.6%, stock $54.48); we expect SSS to beat

consensus on earnings, 24-Jan. Goldman Sachs analyst Michael Kelter sees the most

potential SSS upside potential at SBUX (CL-Buy) within his Restaurants coverage this

upcoming earnings season. His US SSS estimate of 7% is well ahead of the 5.8%

consensus (he is close to in line in Europe and in Asia). SBUX has averaged 7-8% SSS over

the past two years, and posted 7% SSS last quarter while indicating that it ended this most

recent quarter better than it started. Kelter does not see any reason to believe trends

decelerated in the December quarter to the lowest level in over two years, as is implied by

consensus. Options are implying a +/-4% move on earnings, inline with the average 8

quarter move, and about half of the median 4 quarter move. With rising uncertainty ahead

of results, we see the potential for shares to be more volatile this earnings.

Option prices are unusually low for SBUX earnings; buy calls. While one month options

capture earnings, implied volatility is 2 points below three month realized. Call buyers risk

losing the premium paid if shares close below the strike price at expiration.

Trade 4: ROC May calls at record lows; earnings and analyst day

Buy ROC May $55 calls, pay $1.70 (3%, stock $51.21) for January 17 Analyst Day and

earnings end Feb; option prices are near record lows. Goldman Sachs Specialty

Chemicals analyst Robert Koort believes that ROC shares are undervalued as investors are

focusing too much on slowing Titanium Dioxide Pigments segments (TiO2, mostly used as

a pigment in paint), and missing the potential contribution from higher growth businesses,

including chemicals that are predominantly used in batteries for smartphones and tablets

(23% of earnings). In fact, he sees potential for management to discuss their intentions for

the TiO2 business at the analyst day. Removal of this overhanging business, which only

represents 10% of total earnings in 2013 (17% in 2011), could bring investors to focus on



high growth opportunities from other businesses. Our analyst sees 13% upside to his 12-

mth price target of $58.

Analyst Days are a significant stock-moving catalyst. ROC has held four investor days in

since 2006, with an average stock move of +/-3%, which is double the average daily move.

Recent share repurchase announcement could signal management’s confidence in

near term business opportunities. On January 10, ROC announced Board authorization

for share repurchases up to $400m (about 10% of its market cap). ROC intends to pursue

the repurchase in 2013, with management citing “outstanding value” in ROC shares. Our

analyst sees this as a supportive data point that near term trends are tracking strong.

Option prices are approaching all time lows; buy calls for Analyst Day and earnings.

Three month implied volatility of 28% is near its lowest level since October 2007, due

largely to the low realized environment. However, we believe shares are set to realize

higher volatility on the Analyst Day considering uncertainty around management’s

intentions for the TiO2 business, as well as potential updates on the other businesses.

Earnings have been a positive catalyst in 7 of the past 8 quarters as well. Call buyers risk

losing the premium paid at expiration.

Exhibit 6: Three month option prices are near record lows

ahead of 17-Jan Analyst Day, and earnings end Feb ROC 3-mth implied volatility

Exhibit 7: May options capture two stock moving

catalysts, earnings and the analyst day Listed at the money implied volatility by expiration for ROC



Trade 5: BMY option prices near record lows ahead of 2013 guide

Buy BMY February $34 straddles, pay $1.24 (3.6%, stock $34.30); 2013 guidance likely

drives volatility in shares on earnings 24-January. Goldman Sachs Pharma analyst Jami

Rubin believes that BMY (CL-Buy) has the best pipeline and long-term growth prospects of

her covered pharma names (5-year EPS CAGR of 11% vs. peers at 3%). While BMY faced a

tough 2012 with delays in the US approval of Eliquis and the Inhibitex drug failure, Eliquis

is now approved in the US/EU/Japan with a superior label and BMY’s anti-PD1, which is in

Phase 3, has transformative potential. Our analyst expects Eliquis to reach $3.6bn in sales

in 2017, or 16% of total revenue, and sees the potential for Anti-pd1 to represent 4% of total

2017 sales. She sees 14% upside to shares over the next 12-months. Over the past two

weeks, shares are up 5%, vs S&P500 up 3%. Our analyst’s 2013 EPS estimate of $1.80 is

below the Street’s $1.84.

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Ahead of 2013 guidance, we recommend shareholders buy straddles. BMY one month

implied volatility of 15% is near its lowest levels on record, despite the potential for 2013

guidance to drive incremental volatility in shares. Options are only pricing in a +/-0.9%

move on earnings, which is the lower than the median 8 quarter move of +/-1.1%. Straddles

will help investors lock in recent gains in shares, and if guidance is better than expected,

the call leg of the trade will enhance returns to the upside. We show this payout graph in

exhibit 10 below.

Exhibit 8: BMY one month implied volatility is near

record lows 1-mth implied volatility

Exhibit 9: While we recommend February straddles, we

also note that June captures additional key catalysts listed at the money implied volatility BMY



Exhibit 10: Straddles allow investors double the upside exposure, and lock in recent gains

Estimated payout diagram for long February $34 straddles at February expiration


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* Anti-pd1 & Yervoy

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Long Stock

Long Straddle

Long Stock + Long Straddle



Disclosure Appendix

Reg AC

We, Katherine Fogertey, John Marshall and Amarnath Jha, hereby certify that all of the views expressed in this report accurately reflect our personal

views about the subject company or companies and its or their securities. We also certify that no part of our compensation was, is or will be, directly

or indirectly, related to the specific recommendations or views expressed in this report.

Disclosures

Option Specific Disclosures

Price target methodology: Please refer to the analyst’s previously published research for methodology and risks associated with equity price

targets.

Pricing Disclosure: Option prices and volatility levels in this note are indicative only, and are based on our estimates of recent mid-market

levels(unless otherwise noted). All prices and levels exclude transaction costs unless otherwise stated.

General Options Risks – The risks below and any other options risks mentioned in this research report pertain both to specific derivative trade

recommendations mentioned and to discussion of general opportunities and advantages of derivative strategies. Unless otherwise noted, options

strategies mentioned in this report may be a combination of the strategies below and therefore carry with them the risks of those strategies.

Buying Options - Investors who buy call (put) options risk loss of the entire premium paid if the underlying security finishes below (above) the

strike price at expiration. Investors who buy call or put spreads also risk a maximum loss of the premium paid. The maximum gain on a long call or

put spread is the difference between the strike prices, less the premium paid.

Selling Options - Investors who sell calls on securities they do not own risk unlimited loss of the security price less the strike price. Investors who

sell covered calls (sell calls while owning the underlying security) risk having to deliver the underlying security or pay the difference between the

security price and the strike price, depending on whether the option is settled by physical delivery or cash-settled. Investors who sell puts risk loss of

the strike price less the premium received for selling the put. Investors who sell put or call spreads risk a maximum loss of the difference between the

strikes less the premium received, while their maximum gain is the premium received.

For options settled by physical delivery, the above risks assume the options buyer or seller, buys or sells the resulting securities at the

settlement price on expiry.

Company-specific regulatory disclosures

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

Distribution of ratings/investment banking relationships

Goldman Sachs Investment Research global coverage universe

Rating Distribution Investment Banking Relationships

Buy Hold Sell Buy Hold Sell

Global 31% 55% 14% 48% 41% 36%

As of January 1, 2013, Goldman Sachs Global Investment Research had investment ratings on 3,523 equity securities. Goldman 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 views 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

Disclosures required by United States laws and regulations

See 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.

The following are additional required disclosures: Ownership and material conflicts of interest: Goldman Sachs policy prohibits its analysts,

professionals reporting to analysts and members of their households from owning securities of any company in the analyst's area of

coverage. Analyst compensation: Analysts are paid in part based on the profitability of Goldman Sachs, which includes investment banking

revenues. Analyst as officer or director: Goldman Sachs policy prohibits its analysts, persons reporting to analysts or members of their

households from serving as an officer, director, advisory board member or employee of any company in the analyst's area of coverage. Non-U.S.



Analysts: Non-U.S. analysts may not be associated persons of Goldman, Sachs & Co. and therefore may not be subject to NASD Rule 2711/NYSE

Rules 472 restrictions on communications with subject company, public appearances and trading securities held by the analysts.

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The following disclosures are those required by the jurisdiction indicated, except to the extent already made above pursuant to United States laws

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the Banking Act 1959 (Cth)) in Australia and do not provide banking services, nor carry on a banking business, in Australia. This research, and any

access to it, is intended only for "wholesale clients" within the meaning of the Australian Corporations Act, unless otherwise agreed by Goldman

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Where applicable, the Brazil-registered analyst primarily responsible for the content of this research report, as defined in Article 16 of CVM Instruction

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