Goldman Sachs 2012 Annual Report Download - page 198

Notes to Consolidated Financial Statements
The segment information presented in the table below is
prepared according to the following methodologies:
‰Revenues and expenses directly associated with each
segment are included in determining pre-tax earnings.
‰Net revenues in the firm’s segments include allocations of
interest income and interest expense to specific securities,
commodities and other positions in relation to the cash
generated by, or funding requirements of, such
underlying positions. Net interest is included in segment
net revenues as it is consistent with the way in which
management assesses segment performance.
‰Overhead expenses not directly allocable to specific
segments are allocated ratably based on direct
segment expenses.
Management believes that the following information
provides a reasonable representation of each segment’s
contribution to consolidated pre-tax earnings and
total assets.
For the Years Ended or as of December
in millions 2012 2011 2010
Investment Banking Net revenues $ 4,926 $ 4,355 $ 4,810
Operating expenses 3,330 2,995 3,459
Pre-tax earnings $ 1,596 $ 1,360 $ 1,351
Segment assets $ 1,712 $ 1,983 $ 1,870
Institutional Client Services Net revenues 1$ 18,124 $ 17,280 $ 21,796
Operating expenses 12,480 12,837 14,994
Pre-tax earnings $ 5,644 $ 4,443 $ 6,802
Segment assets $825,496 $813,660 $799,775
Investing & Lending Net revenues $ 5,891 $ 2,142 $ 7,541
Operating expenses 2,666 2,673 3,361
Pre-tax earnings/(loss) $ 3,225 $ (531) $ 4,180
Segment assets $ 98,600 $ 94,330 $ 95,373
Investment Management Net revenues $ 5,222 $ 5,034 $ 5,014
Operating expenses 4,294 4,020 4,082
Pre-tax earnings $ 928 $ 1,014 $ 932
Segment assets $ 12,747 $ 13,252 $ 14,314
Total Net revenues $ 34,163 $ 28,811 $ 39,161
Operating expenses 22,956 22,642 26,269
Pre-tax earnings $ 11,207 $ 6,169 $ 12,892
Total assets $938,555 $923,225 $911,332
1. Includes $121 million, $115 million and $111 million for the years ended December 2012, December 2011 and December 2010, respectively, of realized gains on
available-for-sale securities held in the firm’s reinsurance subsidiaries.
Total operating expenses in the table above include the
following expenses that have not been allocated to the
firm’s segments:
‰charitable contributions of $169 million, $103 million
and $345 million for the years ended December 2012,
December 2011 and December 2010, respectively; and
‰real estate-related exit costs of $17 million, $14 million
and $28 million for the years ended December 2012,
December 2011 and December 2010, respectively. Real
estate-related exit costs are included in “Depreciation and
amortization” and “Occupancy” in the consolidated
statements of earnings.
Operating expenses related to net provisions for litigation
and regulatory proceedings, previously not allocated to the
firm’s segments, have now been allocated. This allocation is
consistent with the manner in which management currently
views the performance of the firm’s segments.
Reclassifications have been made to previously reported
segment amounts to conform to the current presentation.
196 Goldman Sachs 2012 Annual Report