Goldman Sachs 2007 Annual Report Download - page 138

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Notes to Consolidated Financial Statements
Geographic results are generally allocated as follows:
■ Investment Banking: location of the client and investment
banking team.
■ Fixed Income, Currency and Commodities, and Equities:
location of the trading desk.
■ Principal Investments: location of the investment.
■ Asset Management: location of the sales team.
■ Securities Services: location of the primary market for the
underlying security.
Geographic Information
Due to the highly integrated nature of international financial
markets, the firm manages its businesses based on the
profitability of the enterprise as a whole. Since a significant
portion of the firm’s activities require cross-border coordination
in order to facilitate the needs of the firm’s clients, the methodology
for allocating the firm’s profitability to geographic regions is
dependent on the judgment of management.
The following table sets forth the total net revenues and pre-tax earnings of the firm and its consolidated subsidiaries by
geographic region allocated on the methodology described above, as well as the percentage of total net revenues and total pre-tax
earnings for each geographic region:
Year Ended November
($ in millions) 2007 2006 2005
Net revenues
Americas
(1) $23,412 51% $20,361 54% $14,639 58%
EMEA
(2)
13,538 29 9,354 25 6,063 24
Asia 9,037 20 7,950 21 4,536 18
Total net revenues $45,987 100% $37,665 100% $25,238 100%
Pre-tax earnings
Americas
(1) $ 7,673 43% $ 7,515 52% $ 4,977 60%
EMEA
(2)
5,458 31 3,075 21 1,457 17
Asia 4,510 26 4,015 27 1,876 23
Corporate
(3)
(37) — (45) — (37) —
Total pre-tax earnings $17,604 100% $14,560 100% $ 8,273 100%
(1) Substantially all relates to U.S. results.
(2) EMEA (Europe, Middle East and Africa).
(3) Consists of net provisions for a number of litigation and regulatory proceedings.
136 Goldman Sachs 2007 Annual Report