GHL » Topics » Note 14 - Business Information

This excerpt taken from the GHL 10-K filed Mar 11, 2005.

Note 14 – Business Information

     The Company’s activities as an investment banking firm constitute a single business segment, with two principal sources of revenue:

  • Financial advisory, which includes advice on mergers, acquisitions, restructuring and similar corporate finance matters; and
  • Merchant banking, which includes the management of outside capital invested in GCP and the Company’s principal investments in such fund.

     The Company has principally earned its revenues from advisory fees earned from clients in large part upon the successful completion of the client’s transaction or restructuring. Financial advisory revenues represented approximately 86%, 96% and 95%, of the Company’s total revenues for the years ended December 31, 2004, 2003 and 2002 respectively.

     The Company had separate clients in 2004 and 2003 which comprised 10% and 17% of total revenue, respectively. The Company’s revenues attributable to these clients related to an engagement similar in nature to all of the Company’s other advisory engagements.

     The Company’s financial advisory and merchant banking activities are closely aligned and have similar economic characteristics. Generally, the Company’s professionals and employees are treated as a common pool of available resources and the related compensation and other Company costs are not directly attributable to either particular revenue source. In reporting to management, the Company distinguishes the sources of its investment banking revenues between financial advisory and merchant banking. However, management does not evaluate other financial data or operating results such as operating expenses, profit and loss or assets by its financial advisory and merchant banking activities.

     Since the financial markets are global in nature, the Company generally manages its business based on the operating results of the enterprise taken as whole, not by geographic region. The Company’s investment banking


activities are conducted out of its offices in New York, London and Frankfurt. For reporting purposes, the geographic regions are the locations in which the Company retains its employees, the United States and Europe.

     The following table presents information about the Company by geographic region, after elimination of all significant inter-company accounts and transactions:

  As of or for the Years Ended December 31,  
  2004     2003     2002  



(in thousands)
Total Revenues                  
   United States $ 95,332   $ 76,484   $ 84,080  
   Europe   56,521     50,195     28,528  



   Total $ 151,853   $ 126,679   $ 112,608  



Income before Minority Interest and Tax                  
   United States $ 38,894   $ 43,054   $ 57,868  
   Europe   24,614     37,607     17,945  



   Total $ 63,508   $ 80,661   $ 75,813  



Total Assets                  
   United States $ 134,025   $ 33,892   $ 50,689  
   Europe   42,991     26,746     13,105  



   Total $ 177,016   $ 60,638   $ 63,794  



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