Goldman Sachs 2001 Annual Report Download - page 61

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page 59 GOLDMAN SACHS ANNUAL REPORT 2001
The firm enters into derivative contracts, such as interest rate
futures contracts, interest rate swap agreements and currency
swap agreements, to effectively convert a substantial portion of
its fixed rate long-term borrowings into U.S. dollar-based
floating rate obligations. Accordingly, the aggregate carrying
value of these long-term borrowings and related hedges approx-
imates fair value.
NOTE 7COMMITMENTS AND CONTINGENCIES
Litigation
The firm is involved in a number of judicial, regulatory and arbi-
tration proceedings concerning matters arising in connection
with the conduct of its businesses. Management believes, based
on currently available information, that the results of such pro-
ceedings, in the aggregate, will not have a material adverse effect
on the firm’s financial condition, but may 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 subject to periodic
escalation provisions for increases in real estate taxes and other
charges. Minimum rental commitments, net of minimum
sublease rentals, under noncancelable leases for 2002 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
2002 $ 354
2003 347
2004 382
2005 300
2006 294
2007-thereafter 2,241
Total $3,918
Net rent expense
2001 $ 299
2000 240
1999 154
Other Commitments
The firm had commitments to enter into repurchase and
resale agreements of $47.54 billion and $37.36 billion as of
November 2001 and November 2000, respectively.
The effective weighted average interest rates for long-term borrowings, after hedging activities, are set forth below:
AS OF NOVEMBER
2001 2000
($ IN MILLIONS) AMOUNT RATE AMOUNT RATE
Fixed rate obligations $ 757 10.58% $ 852 10.41%
Floating rate obligations 30,259 3.02 30,543 6.96
Total $31,016 3.20 $31,395 7.06