Goldman Sachs 2004 Annual Report Download - page 106

Download and view the complete annual report

Please find page 106 of the 2004 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 120

  • 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
  • 117
  • 118
  • 119
  • 120

notes฀to฀consolidated฀financial฀statements
104฀฀฀GOLDMAN฀ S A C H S ฀ 2 0 0 4฀ANNU A L ฀ R E P O RT
104฀฀฀GOLDMAN฀ S A C H S ฀ 2004฀ A N N U A L ฀ REPORT
BES฀•฀Phone฀(201)฀635-5240฀฀•฀FAX฀(201)฀635-5199
BPX/S10829฀•฀Flow฀16฀•฀Proof฀13฀•฀2/4/05฀•฀RUSH
SEGMENT฀OPERATING฀RESULTS
Management believes that the following information provides a reasonable representation of each segment’s contribution to
consolidated pre-tax earnings and total assets:
฀ ฀ AS฀OF฀OR฀FOR฀THE฀YEAR฀ENDED฀NOVEMBER
(IN฀MILLIONS)฀ 2004฀ 2003฀฀ 2002
Investment Banking Net revenues(1) $฀ ฀3,374 $฀ ฀2,711฀ $฀ ฀2,830
Operating expenses(2)฀ 2,973 2,504฀ 2,454
Pre-tax earnings $฀฀ ฀ ฀ ฀401 $฀฀฀฀฀207฀ $฀ ฀ 376
Segment assets $฀ ฀4,759 $฀ ฀4,867฀ $฀ ฀4,555
Trading and Net revenues(1) $฀ 13,327 $฀ ฀10,443฀ $฀ ฀8,647
Principal Investments Operating expenses(2) 8,287 6,938฀ 6,505
Pre-tax earnings $฀ ฀5,040 $฀ ฀3,505฀ $฀ ฀2,142
Segment assets $358,137 $250,490฀ $246,789
Asset Management Net revenues(1) $฀ ฀3,849 $฀ ฀2,858฀ $฀ ฀2,509
and Securities Services Operating expenses(2)฀ 2,430 1,890฀ 1,562
Pre-tax earnings $฀ ฀1,419 $฀฀฀฀฀968฀ $฀฀฀฀฀947
Segment assets $167,957 $147,647฀ $103,436
Total Net revenues(1) $฀ 20,550 $฀ ฀16,012฀ $฀ ฀13,986
Operating expenses(2)(3) 13,874 11,567฀ 10,733
Pre-tax earnings $฀ ฀6,676 $฀ ฀4,445฀ $฀ ฀3,253
Total assets(4) $531,379 $403,799฀ $355,574
(1)฀Net฀revenues฀include฀net฀interest฀and฀cost฀of฀power฀generation฀as฀set฀forth฀in฀the฀table฀below:฀
฀ ฀ YEAR฀ENDED฀NOVEMBER
฀ (IN฀MILLIONS)฀ 2004฀ 2003฀ 2002
฀ Investment฀Banking฀ ฀ $฀ ฀ ฀88฀ $฀ ฀฀311฀ $฀฀ 258
฀ Trading฀and฀Principal฀Investments฀ ฀ 1,343฀ 1,888฀ 1,350
฀ Asset฀Management฀and฀Securities฀Services฀ ฀ 1,194฀ 941฀ 793
฀ Total฀net฀interest฀and฀cost฀of฀power฀generation฀ $2,625฀ $฀3,140฀ $2,401
(2)฀Operating฀expenses฀include฀depreciation฀and฀amortization,฀including฀the฀amortization฀of฀identifiable฀intangible฀assets,฀as฀set฀forth฀in฀the฀table฀below:
฀฀ YEAR฀ENDED฀NOVEMBER
฀ (IN฀MILLIONS)฀ 2004฀ 2003฀ 2002
฀Investment฀Banking฀ ฀ $123฀ $180฀ $140
฀Trading฀and฀Principal฀Investments฀ ฀ 392฀ 584฀ 473
฀Asset฀Management฀and฀Securities฀Services฀ ฀ 109฀ 117฀ 131
฀Total฀depreciation฀and฀amortization฀ ฀ $624฀ $881฀ $744
(3)฀฀Includes฀the฀following฀expenses฀that฀have฀not฀been฀allocated฀to฀the฀firm’s฀segments:฀(i)฀the฀amortization฀of฀employee฀initial฀public฀offering฀awards,฀net฀of฀for-
feitures,฀of฀$19฀million,฀$80฀million฀and฀$212฀million฀for฀the฀years฀ended฀November฀2004,฀November฀2003฀and฀November฀2002,฀respectively,฀(ii)฀net฀provisions฀
for฀a฀number฀of฀litigation฀and฀regulatory฀proceedings฀of฀$103฀million฀and฀$155฀million฀for฀the฀years฀ended฀November฀2004฀and฀November฀2003,฀respectively,฀
and฀(iii)฀$62฀million฀in฀connection฀with฀the฀establishment฀of฀Goldman฀Sachs฀Gao฀Hua฀Securities฀Company฀Limited,฀an฀investment฀banking฀and฀securities฀venture฀
in฀China,฀for฀the฀year฀ended฀November฀2004.
(4)฀฀Includes฀ deferred฀ tax฀ assets฀ relating฀ to฀ the฀ firm’s฀ conversion฀ to฀ corporate฀ form฀ and฀ certain฀ assets฀ that฀ management฀ believes฀ are฀ not฀ allocable฀ to฀ a฀
particular฀segment.