Goldman Sachs 2009 Annual Report Download - page 55
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Segment Operating Results
The following table sets forth the net revenues, operating expenses and pre-tax earnings of our segments:
Segment Operating Results
Year Ended
One Month Ended
December November November December
(inmillions) 2009 2008 2007 2008
Investment Banking Net revenues $ 4,797 $ 5,185 $ 7,555 $ 135
Operating expenses 3,527 3,143 4,985 169
Pre-tax earnings/(loss) $ 1,270 $ 2,042 $ 2,570 $ (34)
Trading and Principal Investments Net revenues $34,373 $ 9,063 $31,226 $ (507)
Operating expenses 17,053 11,808 17,998 875
Pre-tax earnings/(loss) $17,320 $ (2,745) $13,228 $(1,382)
Asset Management and Securities Services Net revenues $ 6,003 $ 7,974 $ 7,206 $ 555
Operating expenses 4,660 4,939 5,363 329
Pre-tax earnings $ 1,343 $ 3,035 $ 1,843 $ 226
Total Net revenues $45,173 $22,222 $45,987 $ 183
Operating expenses
(1) 25,344 19,886 28,383 1,441
Pre-tax earnings/(loss) $19,829 $ 2,336 $17,604 $(1,258)
(1) Operating expenses include net provisions for a number of litigation and regulatory proceedings of $104million, $(4)million, $37million and $68million for the years
ended December2009, November2008 and November 2007 and one month ended December 2008, respectively, that have not been allocated to our segments.
Net revenues in our segments include allocations of interest income and interest expense to speci c securities, commodities and
other positions in relation to the cash generated by, or funding requirements of, such underlying positions. See Note18 to the
consolidated nancial statements for further information regarding our business segments.
The cost drivers of Goldman Sachs taken as a whole — compensation, headcount and levels of business activity — are broadly similar in each
of our business segments. Compensation and bene ts expenses within our segments re ect, among other factors, the overall performance of
Goldman Sachs as well as the performance of individual business units. Consequently, pre-tax margins in one segment of our business may
be signi cantly affected by the performance of our other business segments. A discussion of segment operating results follows.
INVESTMENT BANKING
Our Investment Banking segment is divided into two components:
▪
Financial Advisory. Financial Advisory includes advisory assignments with respect to mergers and acquisitions, divestitures,
corporate defense activities, restructurings and spin-offs.
▪
Underwriting. Underwriting includes public offerings and private placements of a wide range of securities and other
nancial instruments.
Goldman Sachs 2009 Annual Report
53
Management’s Discussion and Analysis