Goldman Sachs 2004 Annual Report Download - page 2

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financial฀highlights
฀ ฀ AS฀OF฀OR฀FOR฀THE฀YEAR฀ENDED฀NOVEMBER฀
($฀AND฀SHARE฀AMOUNTS฀IN฀MILLIONS,฀EXCEPT฀PER฀SHARE฀AMOUNTS)฀ 2004฀ 2003฀ 2002
operating฀results
Net revenues
Investment banking $ ฀฀฀3,374฀฀ $ ฀฀฀2,711 $ ฀฀฀2,830฀
Trading and principal investments ฀13,327฀ ฀10,443 ฀8,647
Asset management and securities services ฀3,849 ฀2,858฀ ฀2,509฀
Total net revenues ฀20,550 16,012฀ ฀13,986
Pre-tax earnings ฀6,676 ฀4,445฀ ฀3,253฀
Net earnings ฀4,553 ฀3,005฀ ฀2,114฀
common฀share฀data
Diluted earnings per share ฀$ ฀฀฀฀฀8.92 $ ฀฀฀฀฀5.87 $ ฀฀฀฀฀4.03
Average diluted common shares outstanding ฀510.5฀511.9 ฀525.1
Dividends declared per share $ ฀฀฀฀฀1.00 $ ฀฀฀฀฀0.74 $ ฀฀฀฀฀0.48
Book value per share(1) ฀50.77฀฀43.60 ฀38.69
Tangible book value per share(2)(3) ฀40.91฀฀33.56 28.84
financial฀condition฀and฀other฀operating฀data
Total assets $531,379 $403,799 $355,574
Long-term borrowings 80,696฀฀57,482 38,711
Shareholders’ equity ฀25,079฀21,632 19,003
Leverage ratio(4) ฀21.2x 18.7x 18.7x
Adjusted leverage ratio(5) ฀15.1x 16.5x 15.2x
Debt to equity ratio(6) ฀3.2x 2.7x 2.0x
Return on average shareholders’ equity(7) 19.8% 15.0% 11.3%
Return on average tangible shareholders’ equity(8) 25.2% 19.9% 15.3%
selected฀data
Total employees 20,722฀฀ 19,476 ฀19,739
Assets under management ($฀IN฀BILLIONS)฀ $ ฀฀฀฀฀฀452 $ ฀฀฀฀฀฀373 $ ฀฀฀฀฀฀348
(1)฀฀
Book฀value฀per฀share฀is฀based฀on฀common฀shares฀outstanding,฀including฀restricted฀stock฀units฀granted฀to฀employees฀with฀no฀future฀service฀requirements,฀of฀
494.0฀million,฀496.1฀million฀and฀491.2฀million฀as฀of฀November฀2004,฀November฀2003฀and฀November฀2002,฀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฀information฀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฀equity฀capital.฀Adjusted฀assets฀excludes฀(i)฀low-risk฀collateralized฀assets฀generally฀associated฀
with฀our฀matched฀book฀and฀securities฀lending฀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.฀ Tangible฀ equity฀ capital฀ includes฀tangible฀ shareholders’฀ equity฀and฀ junior฀ subordinated฀debt฀ issued฀ to฀a฀ trust.฀ We฀believe฀ that฀
the฀adjusted฀leverage฀ratio฀is฀a฀more฀meaningful฀measure฀of฀our฀capital฀adequacy฀because฀it฀excludes฀certain฀low-risk฀collateralized฀assets฀that฀are฀generally฀
supported฀with฀little฀or฀no฀capital฀and฀reflects฀the฀tangible฀equity฀capital฀deployed฀in฀our฀businesses.฀See฀“Financial฀Information฀—฀Management’s฀Discussion฀
and฀Analysis฀—฀Capital฀and฀Funding”฀for฀further฀information฀regarding฀our฀adjusted฀leverage฀ratio฀calculation.
(6)฀฀
Debt฀to฀equity฀ratio฀equals฀long-term฀borrowings฀divided฀by฀shareholders’฀equity.฀
(7)฀฀
Return฀on฀average฀shareholders’฀equity฀is฀computed฀by฀dividing฀net฀earnings฀by฀average฀monthly฀shareholders’฀equity.
(8)฀฀
Return฀on฀average฀tangible฀shareholders’฀equity฀is฀computed฀by฀dividing฀net฀earnings฀by฀average฀monthly฀tangible฀shareholders’฀equity.฀We฀believe฀that฀return฀
on฀average฀tangible฀shareholders’฀equity฀is฀a฀meaningful฀measure฀of฀performance฀because฀it฀excludes฀the฀portion฀of฀our฀shareholders’฀equity฀attributable฀฀
to฀goodwill฀and฀identifiable฀intangible฀assets.฀As฀a฀result,฀this฀calculation฀measures฀corporate฀performance฀in฀a฀manner฀that฀ treats฀underlying฀businesses฀฀
consistently,฀whether฀they฀were฀acquired฀or฀developed฀internally.฀See฀“Financial฀Information฀—฀Management’s฀Discussion฀and฀Analysis฀—฀Results฀of฀Operations”฀
for฀further฀information฀regarding฀our฀return฀on฀average฀tangible฀shareholders’฀equity฀calculation.฀