Goldman Sachs 2000 Annual Report Download - page 62

Note 7/Commitments and Contingencies
Litigation
The firm is involved in a number of judicial, regulatory and
arbitration proceedings concerning matters arising in con-
nection with the conduct of its businesses. Management
believes, based on currently available information, that the
results of such proceedings, in the aggregate, will not have
a material adverse effect on the firm’s financial condition,
but might be material to the firm’s operating results for any
particular period, depending, in part, upon the operating
results for such period.
Leases
The firm has obligations under long-term noncancelable
lease agreements, principally for office space, expiring on
various dates through 2029. Certain agreements are sub-
ject to periodic escalation provisions for increases in real
estate taxes and other charges. Minimum rental commit-
ments, net of minimum sublease rentals, under noncance-
lable leases for 2001 and the succeeding four years and
thereafter and rent charged to operating expense for the
last three years are set forth below:
(in millions)
Minimum Rental Commitments
2001 $ 355
2002 334
2003 335
2004 391
2005 374
2006-Thereafter 2,524
Total $4,313
Net Rent Expense
2000 $ 240
1999 154
1998 104
Other Commitments
The firm had commitments to enter into repurchase and
resale agreements of $37.36 billion and $30.58 billion as of
November 2000 and November 1999, respectively.
The firm had pledged securities of $34.91 billion and $35.83
billion as collateral for securities borrowed of approxi-
mately equivalent value as of November 2000 and
November 1999, respectively.
In connection with loan origination and participation, the
firm had loan commitments of $10.43 billion and $9.38 bil-
lion as of November 2000 and November 1999, respec-
tively. These commitments are agreements to lend to
counterparties, have fixed termination dates and are con-
tingent on all conditions to borrowing set forth in the con-
tract having been met. Since these commitments may expire
unused, the total commitment amount does not necessarily
reflect the actual future cash flow requirements.
The firm provides letters of credit issued by various banks to
counterparties in lieu of securities or cash to satisfy various
collateral and margin deposit requirements. Letters of
credit outstanding were $9.61 billion and $10.30 billion as
of November 2000 and November 1999, respectively.
The firm acts as an investor in merchant banking transac-
tions, which includes making long-term investments in
equity and debt securities in privately negotiated transac-
tions, corporate acquisitions and real estate transactions.
In connection with these activities, the firm had commit-
ments to invest up to $1.74 billion and $1.09 billion in cor-
porate and real estate merchant banking investment funds
and a bridge loan fund as of November 2000 and November
1999, respectively.
60 Goldman Sachs Annual Report 2000
As of November 2000 and November 1999, the notional amounts of the related swap agreements used for nontrading
purposes were $26.26 billion and $12.94 billion, respectively. The fair value and carrying value of these agreements are
set forth below:
As of November
2000 1999
(in millions) Assets Liabilities Assets Liabilities
Fair value $3 $442 $ 3 $159
Carrying value 27036 2