Goldman Sachs 2003 Annual Report Download - page 2

Contents
Letter to Shareholders 3
A Strategic Reaction 10
An Innovative Reaction 14
A Resilient Reaction 18
A Global Reaction 22
A Cooperative Reaction 26
Our Core Businesses 28
Financial Information 31
Board Members, Officers and Directors 104
International Advisors and Offices 110
Our Business Principles 111
Shareholder Information 112
Financial Highlights
AS OF OR FOR YEAR ENDED NOVEMBER
($ AND SHARE AMOUNTS IN MILLIONS, EXCEPT PER SHARE AMOUNTS) 2003 2002 2001
Operating Results
Net revenues
Investment banking $ 2,711 $ 2,830 $ 3,836
Trading and principal investments 10,443 8,647 9,570
Asset management and securities services 2,858 2,509 2,405
Total net revenues 16,012 13,986 15,811
Pre-tax earnings 4,445 3,253 3,696
Net earnings 3,005 2,114 2,310
Common Share Data
Diluted earnings per share $ 5.87 $ 4.03 $ 4.26
Average diluted common shares outstanding 511.9 525.1 541.8
Dividends declared per share $ 0.74 $ 0.48 $ 0.48
Book value per share(1) 43.60 38.69 36.33
Tangible book value per share(2)(3) 33.56 28.84 26.75
Financial Condition and Other Operating Data
Total assets $403,799 $355,574 $312,218
Long-term borrowings 57,482 38,711 31,016
Shareholders’ equity 21,632 19,003 18,231
Leverage ratio(4) 18.7x 18.7x 17.1x
Adjusted leverage ratio(5) 16.5x 15.2x 14.5x
Return on average shareholders’ equity(6) 15.0% 11.3% 13.0%
Return on average tangible shareholders’ equity(7) 19.9% 15.3% 17.8%
Selected Data
Total employees(8) 19,476 19,739 22,677
Assets under management ($ in billions) $ 373 $ 348 $ 351
(1) Book value per share is based on common shares outstanding, including restricted stock units granted to
employees with no future service requirements, of 496.1 million, 491.2 million and 501.8 million as of
November 2003, November 2002 and November 2001, respectively.
(2) Tangible book value per share is computed by dividing tangible shareholders’ equity by the number of common
shares outstanding, including restricted stock units granted to employees with no future service requirements.
(3) Tangible shareholders’ equity equals total shareholders’ equity less goodwill and identifiable intangible assets.
See “Financial Information—Management’s Discussion and Analysis—Capital and Funding” for further informa-
tion regarding our tangible shareholders’ equity calculation.
(4) Leverage ratio equals total assets divided by shareholders’ equity.
(5) Adjusted leverage ratio equals adjusted assets divided by tangible shareholders’ equity. Adjusted assets
excludes (i) low-risk collateralized assets generally associated with our matched book and securities lend-
ing businesses (which we calculate by adding our securities purchased under agreements to resell and
securities borrowed, and then subtracting our nonderivative short positions), (ii) cash and securities we
segregate in compliance with regulations and (iii) goodwill and identifiable intangible assets. See “Financial
Information—Management’s Discussion and Analysis—Capital and Funding” for further information regard-
ing our adjusted leverage ratio calculation.
(6) Return on average shareholders’ equity is computed by dividing net earnings by average monthly share-
holders’ equity.
(7) Return on average tangible shareholders’ equity is computed by dividing net earnings by average monthly
tangible shareholders’ equity. See “Financial Information—Management’s Discussion and Analysis—Results
of Operations” for further information regarding our return on average tangible shareholders’ equity calcula-
tion.
(8) Excludes employees of Goldman Sachs’ property management subsidiaries. Substantially all of the costs of
these employees are reimbursed to Goldman Sachs by the real estate investment funds to which these compa-
nies provide property management and loan services.