Goldman Sachs 2003 Annual Report Download - page 89

Download and view the complete annual report

Please find page 89 of the 2003 Goldman Sachs annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 116

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116

Notes to Consolidated Financial Statements
GOLDMAN SACHS 2003 ANNUAL REPORT 87
The following table sets forth certain information about the firm’s derivative contracts that meet the definition of a guar-
antee and certain other guarantees as of November 2003:
MAXIMUM PAYOUT/NOTIONAL AMOUNT BY PERIOD OF EXPIRATION(3)
CARRYING 2005- 2007- 2009-
(IN MILLIONS) VALUE 2004 2006 2008 THEREAFTER TOTAL
Derivatives(1) $7,639 $216,038 $87,843 $126,385 $163,721 $593,987
Securities lending indemnifications(2) — 7,955———7,955
Guarantees of the collection of
contractual cash flows 16 827 708 3 5 1,543
Fund-related commitments —4420 2 268
Letters of credit and other guarantees 89 89 25 1 82 197
(1) The carrying value of $7.64 billion excludes the effect of a legal right of setoff that may exist under an enforceable netting agreement.
(2) Collateral held in connection with these securities lending indemnifications was $8.23 billion as of November 2003.
(3) Such amounts do not represent anticipated losses in connection with these contracts.
In the normal course of its business, the firm indemnifies
and guarantees certain service providers, such as clearing
and custody agents, trustees and administrators, against
specified potential losses in connection with their acting
as an agent of, or providing services to, the firm or its
affiliates. The firm also indemnifies some clients against
potential losses incurred in the event specified third-party
service providers, including subcustodians and third-
party brokers, improperly execute transactions. In addi-
tion, the firm is a member of payment, clearing and
settlement networks as well as securities exchanges
around the world that may require the firm to meet the
obligations of such networks and exchanges in the event
of member defaults. In connection with its prime broker-
age and clearing businesses, the firm may agree to clear
and settle on behalf of its clients the transactions entered
into by them with other brokerage firms. The firm’s obliga-
tions in respect of such transactions are secured by the
assets in the client’s account as well as any proceeds
received from the transactions cleared and settled by the
firm on behalf of the client. The firm is unable to develop
an estimate of the maximum payout under these guaran-
tees and indemnifications. However, management
believes that it is unlikely the firm will have to make
material payments under these arrangements, and no lia-
bilities related to these guarantees and indemnifications
have been recognized in the consolidated statement of
financial condition as of November 2003.
The firm provides representations and warranties to
counterparties in connection with a variety of commer-
cial transactions and occasionally indemnifies them
against potential losses caused by the breach of those rep-
resentations and warranties. The firm may also provide
indemnifications protecting against changes in or adverse
application of certain U.S. tax laws in connection with
ordinary-course transactions such as securities issuances,
borrowings or derivatives. In addition, the firm may
provide indemnifications to some counterparties to pro-
tect them in the event additional taxes are owed or pay-
ments are withheld, due either to a change in or an
adverse application of certain non-U.S. tax laws. These
indemnifications generally are standard contractual terms
and are entered into in the normal course of business.
Generally, there are no stated or notional amounts
included in these indemnifications, and the contingencies
triggering the obligation to indemnify are not expected to
occur. The firm is unable to develop an estimate of the
maximum payout under these guarantees. However,
management believes that it is unlikely the firm will have
to make material payments under these arrangements,
and no liabilities related to these arrangements have been
recognized in the consolidated statement of financial con-
dition as of November 2003.
note 7
SHAREHOLDERS’ EQUITY
Dividends declared per common share were $0.74 in
2003 and $0.48 in each of 2002 and 2001. On
December 17, 2003, the Board of Directors of Group
Inc. declared a dividend of $0.25 per share to be paid on
February 26, 2004 to common shareholders of record on
January 27, 2004.
During 2003 and 2002, the firm repurchased 12.2 mil-
lion shares and 19.4 million shares of the firm’s common
stock, respectively. The average price paid per share for
repurchased shares was $76.83 and $76.49 for the years
ended November 2003 and November 2002, respectively.
As of November 2003, the firm was authorized to repur-
chase up to 8.6 million additional shares of common stock
pursuant to the firm’s common stock repurchase program.