##### 



(MANAGEMENTS DISCUSSION & ANALYSIS)




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##### 



CONTENTS 1.
    
    INTRODUCTION
    
    12.
    
    OVERVIEW OF 2004
    
    1Provides a summary of Goldcorps financial results and operating performance3.
    
    OUTLOOK FOR 2005
    
    5Provides a view on production costs, exploration and cash flow4.
    
    RISKS & UNCERTAINTIES
    
    5Identifies the risk factors for the business and the programs to mitigate them5.
    
    CONSOLIDATED FINANCIAL RESULTS OF OPERATIONS
    
    7Analyses revenues, expenses, other income, income taxes and earnings6.
    
    OPERATIONAL REVIEW
    
    10Discusses operating results by business unit or mine Red Lake Mine Wharf Mine Saskatchewan Minerals7.
    
    LIQUIDITY AND CAPITAL RESOURCES
    
    13Describes sources and uses of cash and balance sheet strength Cash Resources Commitments Cash Flow from Operating Activities Cash Flow from Investing Activities8.
    
    CRITICAL ACCOUNTING POLICIES AND ESTIMATES
    
    15Discusses critical accounting policies and management estimatesIncludes a review of non-GAAP performance measures9.
    
    QUARTERLY DATA AND FOURTH QUARTER 2004 RESULTS
    
    1710.
    
    CONSOLIDATED FINANCIAL STATEMENTS FOR 2004
    
    19 Managements Responsibility for Financial Statements Auditors Report to the Shareholders Consolidated Balance Sheets Consolidated Statements of Earnings Consolidated Statements of Retained Earnings (Deficit) Consolidated Statements of Cash Flows Notes to Consolidated Financial Statements
 This MD&A contains certain Forward-Looking Statements within the meaning of section 21E of
the United States Securities Exchange Act of 1934, as amended. All statements, other than
statements of historical fact, included herein, including without limitation, statements regarding
potential mineralization and reserves, exploration results and future plans and objectives of
Goldcorp are forward-looking statements that involve various risks and uncertainties. There can be
no assurance that such statements will prove to be accurate, and actual results and future events
could differ materially from those anticipated in such statements. Important factors that could
cause actual results to differ materially from Goldcorps expectations are disclosed in Goldcorp
documents filed from time to time with the Toronto Stock Exchange, the United States Securities and
Exchange Commission and other regulatory authorities.




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##### 



GOLDCORP INC.     1 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 1. Introduction This Managements Discussion and Analysis of Financial Condition and Results of Operations
(MD&A) together with the consolidated financial statements and accompanying notes provides a
detailed account of Goldcorp Inc.s performance as prepared on February 16, 2005. The consolidated financial statements of Goldcorp Inc. (Goldcorp) have been prepared in
accordance with accounting principles generally accepted (GAAP) in Canada. Goldcorps policies
are consistent with accounting policies generally accepted in the United States (US) in all
material respects except as outlined in Note 14 to the consolidated financial statements. Goldcorps consolidated financial statements are expressed in US dollars. All amounts in this
report are in US dollars, except where otherwise indicated. The MD&A includes certain forward-looking statements. Please read the cautionary note on the inside
cover of this report. 2. Overview of 2004 Goldcorp is a North American based gold producer engaged in exploration, extraction, and
processing of gold. The Companys primary asset and key value driver is its Red Lake Mine, which,
in 2004, produced a record 551,886 ounces of gold, making it the largest producing gold mine in
Canada for the fourth consecutive year. Goldcorp has a strong and liquid balance sheet, no debt and
has not hedged or sold forward any of its future gold production. Goldcorps other operations include the Wharf Mine, a gold mine located in the Black Hills of South
Dakota, USA and Saskatchewan Minerals, an industrial minerals operation in Saskatchewan, Canada,
which produces natural sodium sulphate used primarily in the detergent industry. Goldcorps strategy is to provide its shareholders with superior returns from high quality assets
in areas of low political risk. At the end of 2004, Goldcorp had liquid assets with a market value
of $460.8 million, comprised of cash and short-term investments of $333.4 million, gold bullion of
$96.4 million and marketable securities of $31.0 million. Goldcorp is listed on the New York and Toronto stock exchanges and its options trade on the
American Stock Exchange, the Chicago Board of Options Exchange and the Pacific Stock Exchange in
the United States and on the Montreal Exchange in Canada. Financial Results (in millions of US dollars, except per share amounts)
 2004
    
    
    % Change
    
    
    2003
    
    
    % Change
    
    
    2002Revenues
    
    $
    191.0
    
    
    
    (27.3
    %)
    
    $
    262.6
    
    
    
    41.8
    %
    
    $
    185.2Revenues from gold sales
    
    $
    178.3
    
    
    
    (28.4
    %)
    
    $
    249.0
    
    
    
    45.4
    %
    
    $
    171.2Realized gold price ($/oz)
    
    
    409
    
    
    
    11.4
    %
    
    
    367
    
    
    
    17.6
    %
    
    
    312Actual average gold price ($/oz)
    
    
    409
    
    
    
    12.4
    %
    
    
    364
    
    
    
    17.4
    %
    
    
    310Earnings
    
    $
    51.3
    
    
    
    (48.1
    %)
    
    $
    98.8
    
    
    
    44.9
    %
    
    $
    68.2Per Share: Basic
    
    
    0.27
    
    
    
    (50.0
    %)
    
    
    0.54
    
    
    
    38.5
    %
    
    
    0.39Diluted
    
    
    0.27
    
    
    
    (49.1
    %)
    
    
    0.53
    
    
    
    43.2
    %
    
    
    0.37Total Assets
    
    $
    701.5
    
    
    
    9.9
    %
    
    $
    638.5
    
    
    
    39.5
    %
    
    $
    457.7Cash dividends declared
    
    $
    31.3
    
    
    
    (37.5
    %)
    
    $
    50.1
    
    
    
    155.6
    %
    
    $
    19.6




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##### 



2

GOLDCORP INC.    Revenues in 2004 decreased 27.3% from last year. Reported revenues were significantly higher in
2003 due to the sale of production ounces accumulated from years prior to 2003. Beginning in the second
half of 2001, Goldcorp began accumulating a significant gold bullion inventory by withholding from
sale a portion of the Companys gold production in anticipation of higher gold prices. At the
beginning of 2003, 95,882 ounces of gold held back from sale had been accumulated of which 35,061
ounces were produced in 2001 and 60,821 ounces were produced in 2002. During the fourth quarter of
2003, Goldcorp sold these holdings of produced gold bullion at an average sales price of $388 per
ounce resulting in an additional $37.2 million in revenue for 2003. During 2004, Goldcorp has
maintained throughout the year a policy of only selling approximately two-thirds of gold production
with the other one-third held back from sale in anticipation of higher gold prices. Consequently,
the Company sold 427,576 of gold during 2004 compared to 677,936 ounces sold during 2003. Partially
offsetting the decrease in ounces sold is a $42 per ounce (11.4%) increase in the realized price of
gold. From a production standpoint, 2004 proved to be an exceptional year as the Red Lake Mine produced a
record 551,886 ounces compared to 532,028 ounces in 2003 and 525,000 ounces as originally
forecasted. The excellent operating results at Red Lake combined with a strong year at the Wharf
Mine contributed to a consolidated gross operating margin of 63%, compared to 66% for 2003 and 65%
in 2002. Earnings on a GAAP basis for 2004 were $51.3 million ($0.27 per share), a 48% decrease
compared to the $98.8 million ($0.54 per share) in earnings for 2003. The difference largely reflects the timing of when the gold is sold since GAAP revenue is based on the sale, rather than the
production of gold. Refer to Bullion Adjusted Results on page 4 for an alternative measure of
earnings based on production, rather than the sale of ounces.1 Operating Results (in US dollars, except gold production ounces)
 2004
    
    
    % Change
    
    
    2003
    
    
    % Change
    
    
    2002Gold Production (oz)Red Lake Mine
    
    
    551,886
    
    
    
    3.7
    %
    
    
    532,028
    
    
    
    1.2
    %
    
    
    525,930Wharf Mine
    
    
    76,119
    
    
    
    7.5
    %
    
    
    70,817
    
    
    
    (13.6
    %)
    
    
    81,989Total ounces produced
    
    
    628,005
    
    
    
    4.2
    %
    
    
    602,845
    
    
    
    (0.8
    %)
    
    
    607,919Total ounces sold
    
    
    427,576
    
    
    
    (36.9
    %)
    
    
    677,936
    
    
    
    23.9
    %
    
    
    547,098Production costs ($/oz)1Red Lake MineCash cost
    
    $
    92
    
    
    
    15.0
    %
    
    $
    80
    
    
    
    23.1
    %
    
    $
    65Non-cash cost
    
    
    36
    
    
    
    16.1
    %
    
    
    31
    
    
    
    6.9
    %
    
    
    29Total cost  Red Lake Mine
    
    $
    128
    
    
    
    15.3
    %
    
    $
    111
    
    
    
    18.1
    %
    
    $
    94Wharf MineCash cost
    
    $
    255
    
    
    
    (7.6
    %)
    
    $
    276
    
    
    
    10.4
    %
    
    $
    250Non-cash cost
    
    
    104
    
    
    
    19.5
    %
    
    
    87
    
    
    
    45.0
    %
    
    
    60Total cost  Wharf Mine
    
    $
    359
    
    
    
    (1.1
    %)
    
    $
    363
    
    
    
    17.1
    %
    
    $
    310Weighted averageCash cost
    
    $
    115
    
    
    
    15.0
    %
    
    $
    100
    
    
    
    7.5
    %
    
    $
    93Non-cash cost
    
    
    46
    
    
    
    24.3
    %
    
    
    37
    
    
    
    12.1
    %
    
    
    33Total cost  Goldcorp
    
    $
    161
    
    
    
    17.5
    %
    
    $
    137
    
    
    
    8.7
    %
    
    $
    126
  1
    For an explanation of non-GAAP performance measures refer to page 16. Cash and
total costs are calculated in accordance with the Gold Institute standards.




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##### 



GOLDCORP INC.     3 (BAR CHARTS) Bullion Adjusted Earnings and Bullion Adjusted Cash Flow illustrate, on an after-tax basis,
the normalized earnings and per share amounts had bullion been sold in the year produced. These are
not GAAP measures of earnings or cash flow and are unlikely to allow meaningful comparability to
other companies. Impact of withholding gold production Revenue from gold bullion production is recognized when title passes to the purchaser and as a
result revenue is recorded when the gold is sold, not when it is produced. Unlike other gold
producers, Goldcorp strategically holds back the sale of gold bullion ounces in anticipation of
higher prices. This had a dramatic impact on the reported results of the Company during 2004 as
628,005 ounces of gold were produced but only 427,576 ounces were sold (68% of production). The
unsold gold is carried on the balance sheet at a cost of $33.9 million while it has a market value
of $96.4 million based on the December 31, 2004 gold price. Conversely, in 2003, Goldcorp was in an
opposite position whereby 602,845 ounces of gold were produced and 677,936 ounces were sold (112%
of production) as the Company sold gold which had been held back from previous years production. On a bullion adjusted basis, had Goldcorp sold all of the gold produced during 2004, earnings would
have increased by $32.9 million ($0.17 per share) to $84.2 million ($0.44 per share). Cash flow
from operating activities for 2004 would have been increased by $60.9 million ($0.32 per share) to
$114.0 million ($0.60 per share). For 2003, had Goldcorp only sold the gold produced, the Company would have sold 602,845 ounces
compared to 677,936 ounces actually sold, or 11% fewer ounces. This would have reduced earnings by
$13.1 million ($0.07 per share) to $85.7 million ($0.47 per share). Cash flow from operating
activities for 2003 would have been reduced by $21.2 million ($0.12 per share) to $74.0 million
($0.40 per share). Quarterly movement in Goldcorps unsold gold bullion inventory during 2004 and 2003 is outlined
below: 2004
    
    First
    
    
    Second
    
    
    Third
    
    
    Fourthquarter
    
    
    quarter
    
    
    quarter
    
    
    quarterOpening balance
    
    
    20,791
    
    
    
    72,716
    
    
    
    117,737
    
    
    
    168,723Ounces produced
    
    
    159,327
    
    
    
    138,617
    
    
    
    163,807
    
    
    
    166,254Ounces sold
    
    
    (107,402
    )
    
    
    (93,596
    )
    
    
    (112,821
    )
    
    
    (113,757
    )Closing balance
    
    
    72,716
    
    
    
    117,737
    
    
    
    168,723
    
    
    
    221,220




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##### 



4

GOLDCORP INC.    2003
    
    First
    
    
    Second
    
    
    Third
    
    
    Fourthquarter
    
    
    quarter
    
    
    quarter
    
    
    quarterOpening balance
    
    
    95,882
    
    
    
    99,759
    
    
    
    121,407
    
    
    
    142,913Ounces produced
    
    
    133,743
    
    
    
    149,354
    
    
    
    161,459
    
    
    
    158,289Inventoried ounces sold
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (142,913
    )Ounces sold
    
    
    (129,866
    )
    
    
    (127,706
    )
    
    
    (139,953
    )
    
    
    (137,498
    )Closing balance
    
    
    99,759
    
    
    
    121,407
    
    
    
    142,913
    
    
    
    20,791
 Bullion Adjusted Results (in millions of US dollars, except per share amounts)
 2004
    
    
    % Change
    
    
    2003
    
    
    % Change
    
    
    2002Earnings, as reported
    
    $
    51.3
    
    
    
    (48.1
    )%
    
    $
    98.8
    
    
    
    44.9
    %
    
    $
    68.2Change in earnings if all gold
bullion
was produced and sold during
the same period
    
    
    32.9
    
    
    
    N/A
    
    
    
    (13.1
    )
    
    
    N/A
    
    
    
    6.7Bullion adjusted earnings
    
    $
    84.2
    
    
    
    (1.8
    )%
    
    $
    85.7
    
    
    
    14.4
    %
    
    $
    74.9Bullion adjusted earnings per
sharePer Share: Basic
    
    $
    0.44
    
    
    
    (6.4
    )%
    
    $
    0.47
    
    
    
    11.9
    %
    
    $
    0.42Diluted
    
    $
    0.43
    
    
    
    (6.5
    )%
    
    
    0.46
    
    
    
    12.2
    %
    
    $
    0.41Operating cash flow, as reported
    
    $
    53.1
    
    
    
    (44.2
    )%
    
    $
    95.2
    
    
    
    (8.5
    )%
    
    $
    104.1Change in cash flow if all gold
bullion
was produced and sold during
the same period
    
    
    60.9
    
    
    
    N/A
    
    
    
    (21.2
    )
    
    
    N/A
    
    
    
    15.9Bullion adjusted cash flow
    
    $
    114.0
    
    
    
    54.1
    %
    
    $
    74.0
    
    
    
    (38.3
    )%
    
    $
    120.0Bullion adjusted cash flow per
sharePer Share: Basic
    
    $
    0.60
    
    
    
    50.0
    %
    
    $
    0.40
    
    
    
    (41.2
    )%
    
    $
    0.68Diluted
    
    $
    0.59
    
    
    
    51.3
    %
    
    $
    0.39
    
    
    
    (40.0
    )%
    
    $
    0.65
 With Goldcorps continued strong operating results, the Company maintained its dividend policy
despite withholding a significant portion of gold production from sale. Goldcorp paid a regular
monthly dividend of $0.015 per share ($0.18 per share annually). A special $0.10 per share dividend
was announced on December 10, 2003 and paid to shareholders of record on January 6, 2004.
Therefore, shareholders in 2004 received a regular dividend of $0.18 per share paid monthly and a
special dividend of $0.10 per share for a total of $0.28 per share. Total dividend payments for
2004 on a cash basis totalled $53.1 million. In comparison, shareholders during 2003 received five
bimonthly dividend payments of $0.025 per share and two monthly dividend payments of $0.015 per
share. This resulted in total cash dividends of $28.4 million, or $0.155 per share, being paid out
in 2003. Corporate Development On December 6, 2004, Goldcorp and Wheaton River Minerals Ltd. (Wheaton) issued a joint press
release announcing a proposed transaction which provided for Goldcorp to make a friendly take-over
bid for Wheaton on the basis of one Goldcorp share for every four Wheaton shares. On December 29,
2004, Goldcorp mailed the Goldcorp Take-over Bid Circular to the Wheaton shareholders. On December 16, 2004, Glamis Gold Limited publicly announced its intention to make a hostile
take-over bid for Goldcorp. On January 7, 2005, the Glamis Bid Circular was mailed to Goldcorp
shareholders.




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##### 



GOLDCORP INC.     5 On February 8, 2005, Goldcorp announced a special US$0.50 per share cash dividend would be payable
to existing Goldcorp shareholders should shareholders approve the Wheaton acquisition or Goldcorps
takeover bid. The payment of a special dividend would result in an adjustment to the exchange ratio
of Goldcorps outstanding warrants  an increase in entitlement from 2.0 to 2.08 Goldcorp shares
per warrant. February 10, 2005, at the special meeting of shareholders, approximately 65% of Goldcorp
shareholders who voted were in favour of approval of the issuance of additional Goldcorp common
shares to effect the acquisition of Wheaton. Following the vote, Glamis publicly stated that they
would allow their competing bid for Goldcorp to expire. As of February 14, 2005, approximately 70% of the outstanding Wheaton common shares (403,165,952
shares) have been tendered to Goldcorps offer. This satisfied the minimum two-thirds bid
requirement under the terms of the offer to acquire Wheaton. On the same day, Goldcorp extended the
offer expiry date to February 28, 2005 to give remaining Wheaton shareholders more time to tender
their shares. With conditions met, the special US$0.50 per share dividend, totaling approximately
$95 million, is payable to shareholders of record on February 16, 2005 and will be paid on February
28, 2005. 3. Outlook for 2005 Goldcorp anticipates continuing strong operating results in 2005. Total production for 2005 is
forecast at approximately 620,000 ounces, compared with production of 628,005 ounces in 2004.
Consolidated cash cost is expected to be consistent with costs during 2004 while non-cash costs are
expected to increase slightly. Small expected increases in costs at the Red Lake Mine due to the
strengthening Canadian dollar are expected to be offset by a lower proportion of production coming
from the higher cost Wharf Mine. During 2004, the weighted average cash cost was $115 per ounce,
non-cash cost was $46 per ounce resulting in total costs of $161 per ounce for the year. The Red Lake Mine is planning to produce approximately 550,000 ounces of gold in 2005, which
includes 34,000 ounces of gold produced from concentrate. The production forecast is based on
milling 726 tons per day, compared with a rate of 674 tons per day in 2004. Cash costs are expected
to be marginally higher than the $92 per ounce in 2004, largely due to a strengthening Canadian
dollar. The Wharf Mine is forecast to produce 70,000 ounces of gold in 2005, compared with 76,119 ounces in
2004 and costs on a per ounce basis are expected to increase as a result of the lower production. Work is progressing on the sinking of the new shaft at the Red Lake Mine to a depth of 7,150 feet
with a capacity of 4,000 tons per day and expanding the mill capacity to 1,000 tons per day. The
shaft depth was 2,290 feet at December 31, 2004. The 16 Level station was completed in December
2004. Efforts continue to improve the shaft sinking advance rate. Plans for 2005 include further
expansion related development work at the existing Red Lake Mine, driving of the 12 foot diameter
return air raise from surface to 23 Level, work on the mill expansion and shaft sinking. Shaft
sinking during 2005 should include excavation and completion of the 23, 30 and 34 Level stations.
The remaining cost of the project until completion in 2007 is estimated at $50 million with $25
million earmarked to be spent in 2005. Previously, construction was estimated to be completed in
2006. During 2004, contractor progress was slowed due to changes in contractor personnel in August
and September. The contractor has completed their re-staffing and the new team is steadily
increasing the shaft advance rate. Goldcorp has no debt and its gold production is entirely unhedged enabling it to fully participate
in higher gold prices. Based on the current status of the Wheaton acquisition, the Company expects to begin consolidating
the results of Wheaton as of February 17, 2005. Based on full year production, Wheaton is expected
to produce approximately 630,000 ounces of gold at a cash cost of less than $50 per ounce for 2005.
Wheaton operates gold mines in Mexico and Australia and owns an equity interest in the Alumbrera
Mine in Argentina. Wheaton also has development projects in Mexico and Brazil. 4. Risks & Uncertainties Gold price Goldcorps profitability is linked to the price of gold as its revenues are derived primarily from
gold mining. Gold prices are affected by numerous factors beyond our control, including central
bank sales, producer hedging activities, the relative exchange rate of the US dollar with other
major currencies, global and regional demand, political and economic
conditions and production costs in major gold producing




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##### 



6

GOLDCORP INC.    regions. World-wide gold production levels
also affect gold prices. In addition, the price of gold has on occasion been subject to rapid short-term
changes due to speculative activities. Goldcorp is better positioned than most of its competitors
in the industry to withstand low commodity prices due to the low production cost per ounce at the
Red Lake Mine. A 10% change in the average price of gold in 2004 would have had an impact of $0.06, or 22% on
basic earnings per share and a $0.09, or 32% impact on cash flow per share. Exploration and development The costs and results of Goldcorps exploration and development programs affect its profitability
and value. As mines have limited lives based on proven and probable reserves, Goldcorp actively
seeks to replace and expand its reserves, primarily through exploration and development of existing
operations and through strategic acquisitions. Exploration for minerals involves many risks and may
not result in any new economically viable mining operations or yield new reserves to replace and
expand current reserves. Operational Goldcorps operations are located in Canada and the United States and face low political risk. The
business of gold mining involves many operational risks and hazards. Through high operational
standards, emphasis on training and continuous improvement, Goldcorp works to reduce the mining
risks at each of its operations. The Company also maintains insurance to cover normal business
risk. The Red Lake Mine currently accounts for most of Goldcorps gold production and revenue and
much of the Companys exploration and development program is focused there. Any adverse development
affecting the Red Lake Mine would have an adverse effect on the Companys financial performance. Environmental Goldcorps activities are subject to extensive federal, provincial, state and local laws and
regulations governing environmental protection and employee health and safety. Goldcorp is required
to obtain governmental permits and provide associated financial assurance to carry on certain
activities. Goldcorp is also subject to various reclamation-related conditions imposed under
federal, state or provincial air, water quality and mine reclamation rules and permits. While
Goldcorp has budgeted for future capital and operating expenditures to maintain compliance with
environmental laws and permits, there can be no assurance that they will not change in the future
in a manner that could have a material adverse effect on Goldcorps financial condition, liquidity
or results of operations. Laws and regulations Goldcorps mining operations and exploration activities are subject to extensive federal,
provincial, state and local laws and regulations governing prospecting, development, production,
exports, taxes, labour standards, occupational health and safety, mine safety and other matters.
Such laws and regulations are subject to change, can become more stringent and compliance can
therefore become more costly. Goldcorp draws on the expertise and commitment of its management
team, their advisors, its employees and contractors to ensure compliance with current laws and
foster a climate of open communication and co-operation with regulatory bodies. Currency fluctuations Goldcorps operating results and cash flow are affected by changes in the US/Canadian dollar
exchange rate as substantially all of the revenues are earned in US dollars but the majority of the
operating and capital expenditures are in Canadian dollars. A further 10% strengthening of the
Canadian dollar in 2004 vis-à-vis the US dollar would have decreased basic earnings per share and
cash flow per share by $0.02, or 7%, and $0.04, or 14%, respectively. Energy costs and supply Energy costs account for approximately 6% of total operating costs at the Red Lake Mine, 6% of
costs at the Wharf Mine, and 35% of costs at Saskatchewan Minerals. Costs arising from the
consumption of electricity and natural gas are generally subject to variations in market prices,
therefore, any significant increase in market prices will increase overall operating costs. In
addition, any prolonged interruption in the delivery of electricity or natural gas could disrupt
operations.




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##### 



GOLDCORP INC.     7 5. Consolidated Financial Results of Operations Revenues Goldcorps revenues consist of sales of gold bullion (including ounces from concentrate sales) and
industrial minerals. Revenues are recognized when ownership passes to the purchaser, in accordance
with GAAP. Gold bullion is sold to financial institutions or recognized precious metals trading
houses on a spot basis. (in millions of US dollars) 2004
    
    
    % Change
    
    
    2003
    
    
    % Change
    
    
    2002RevenuesGold
    
    $
    178.3
    
    
    
    (28.4
    %)
    
    $
    248.9
    
    
    
    45.4
    %
    
    $
    171.2Industrial minerals
    
    
    12.7
    
    
    
    (7.3
    %)
    
    
    13.7
    
    
    
    (2.1
    %)
    
    
    14.0Total
    
    $
    191.0
    
    
    
    (27.3
    %)
    
    $
    262.6
    
    
    
    41.8
    %
    
    $
    185.2
 2004 Revenues in 2004 decreased 27.3% from last year. As
discussed in the Bullion Adjusted Results section,
reported revenues were significantly higher in 2003
due to the sale of production ounces accumulated from
years prior to 2003. Conversely, during 2004,
Goldcorp has maintained a policy throughout the year
of only selling approximately two-thirds of gold
production with the other one-third held back from
sale in anticipation of higher gold prices.
Consequently, the Company sold 427,576 of gold during
2004 compared to 677,936 ounces sold during 2003.
Partially offsetting the decrease in ounces sold is a
$42 per ounce (11.4%) increase in the realized price
of gold. The market for natural sodium sulphate remained difficult during 2004 as lower sales volumes and a
stronger Canadian dollar eroded reported revenue for
2004 by 7.3% compared to 2003. (BAR CHART) 2003 Revenues from gold sales for the year ended December 31, 2003 grew by $77.7 million, or 45% over 2002. The increase in revenues was due to the sale of gold
bullion ounces held back from sale in previous years and also due to the increase in gold price.
Goldcorp produced 602,845 ounces of gold bullion in 2003 and sold 677,936 ounces (112% of
production). This compares with 607,919 ounces produced in 2002 and 547,098 gold bullion ounces
sold in the year (90% of production). The gold price realized during the year was $367 per ounce, an improvement of $55 per ounce, or
18%, over 2002. This is consistent with the $54 per ounce, or 17% increase in average spot price
over 2002. Revenues from industrial mineral sales decreased marginally in 2003 compared to 2002. A reduction
in tons produced and sold were partially offset by stronger prices during the year.




---



##### 



8

GOLDCORP INC.    Expenses (in millions of US dollars)
 2004
    
    
    % Change
    
    
    2003
    
    
    % Change
    
    
    2002Operating
    
    $
    69.4
    
    
    
    (21.6
    %)
    
    $
    88.5
    
    
    
    36.6
    %
    
    $
    64.8Corporate administration
    
    $
    14.0
    
    
    
    15.7
    %
    
    $
    12.1
    
    
    
    30.1
    %
    
    $
    9.3Depreciation and depletion
    
    $
    20.1
    
    
    
    (16.6
    %)
    
    $
    24.1
    
    
    
    34.6
    %
    
    $
    17.9Exploration
    
    $
    6.7
    
    
    
    123.3
    %
    
    $
    3.0
    
    
    
    (18.9
    %)
    
    $
    3.7
 2004 Operating expenses were $69.4 million for 2004 compared to $88.5
million for 2003 and $64.8 million in 2002. The decrease over 2003 of
22% was due to the 37% decrease in ounces sold, partially offset by
higher operating costs at the Red Lake Mine attributable to the
impact of a stronger Canadian dollar and higher contractor labour
costs. The value of the Canadian dollar increased from an average of
$0.71 in 2003 to $0.77 in 2004, an 8% increase. Goldcorps consolidated weighted average cash cost of gold production
was $115 per ounce in 2004 compared to $100 per ounce in 2003, a 15%
increase. The increase in consolidated cash cost is the result of a
higher cash cost at Red Lake along with a larger percentage of higher
cost Wharf ounces being sold in 2004 compared to 2003. 2003 Operating expenses were $88.5 million for 2003 compared to $64.8
million for 2002. The increase over 2002 of 37% was due to an
increase in ounces sold and higher operating costs at the Red Lake
Mine attributable to the impact of a stronger Canadian dollar on the
Canadian operations. The value of the Canadian dollar has increased
from an average of $0.64 in 2002 to $0.71 in 2003, an 11% increase. (BAR CHART) Corporate administration, depreciation and depletion, and exploration Corporate administration for the year ended December 31, 2004 was $14.0 million compared to $12.1
million in 2003. Included in corporate administration for 2004 is $3.6 million relating to stock
option expense compared to $1.8 million of stock option expense in 2003. There is no corresponding
expense in 2002. This is due to the prospective adoption of the policy to expense stock option
expense over the vesting period of the options (3 years), beginning on January 1, 2003. Depreciation and depletion costs are largely recorded on a unit-of-production basis. The decrease
in depreciation and depletion expense from $24.1 million to $20.1 million is primarily attributable
to the decrease in ounces sold during 2004. Refer to the operational review for a more detailed
analysis of these amounts. Exploration costs are charged to earnings up to the time that it is established that a property has
reserves which are economically recoverable. Exploration expenditures to increase reserves at the
Red Lake Mine are capitalized. Total exploration expenditures (both expensed and capitalized) were
$24.3 million for the year ended December 31, 2004, compared with $19.3 million in 2003 and $16.4
million in 2002. Exploration expenditures expensed during the year ended December 31, 2004 were
$6.7 million, compared with $3.0 million in 2003 and $3.7 million in 2002. All expenditures within
this three year period relate to exploration activities at the Red Lake Mine and within the Red
Lake District. The increase in total expenditures each year reflects ongoing efforts to expand our
reserve base and search for additional ore bodies.




---



##### 



GOLDCORP INC.     9 Other Income(Expense) (in millions of US dollars)
 2004
    
    
    % Change
    
    
    2003
    
    
    % Change
    
    
    2002Interest and other income
    
    $
    9.4
    
    
    
    30.6
    %
    
    $
    7.2
    
    
    
    80.0
    %
    
    $
    4.0Gain on sale of purchased gold
bullion
    
    $
    
    
    
    
    (100.0
    %)
    
    $
    1.7
    
    
    
    N/A
    
    
    $
    Gain (loss) on foreign currency
    
    $
    0.2
    
    
    
    116.7
    %
    
    $
    (1.2
    )
    
    
    (33.3
    %)
    
    $
    (0.9
    )Gain on sale of marketable
securities
    
    $
    1.4
    
    
    
    (82.9
    %)
    
    $
    8.2
    
    
    
    (25.5
    %)
    
    $
    11.0Decrease (increase) in provision
for decline in value of
marketable securities
    
    $
    (10.4
    )
    
    
    N/A
    
    
    $
    2.0
    
    
    
    (47.4
    %)
    
    $
    3.8
 Interest and other income earned for the year ended December 31, 2004 was significantly higher
than that earned in 2003 and 2002, due to larger average cash balances generated through
operations. While the Companys cash balance at December 31, 2004 is slightly lower than that at
December 31, 2003, the 2003 balance was increased significantly towards the end of the year due to
the sale of ounces held back from sale. Gains and losses on foreign currency are largely the result
of the movement in the US/Canadian dollar rate of exchange on US dollar denominated assets in the
Companys Canadian operations. The Company did not hold any purchased bullion during 2004. During the second half of 2002 and the
first quarter of 2003, the Company accumulated a purchased bullion inventory of 123,817 ounces of
gold at an average cost of $322 per ounce. In the fourth quarter of 2003, this inventory of
purchased bullion was sold at an average price of $388 per ounce. Net of exchange rate effects, the
gain on sale of this purchased bullion during 2003 was $1.7 million. Marketable securities are accounted for at the lower of their cost or market value on an individual
security basis. The market value is based on the closing price reported on recognized securities
exchanges and on over-the counter markets. The market value, based on closing market quotations,
does not necessarily represent the realizable value of the total holding of any security, which may
be more or less than that indicated by market quotations. A write-down of an investment in
marketable securities to reflect a decline in value is not reversed if there is a subsequent
increase in value. The Company made minimal disposals of its holdings during 2004 resulting in a
realized gain of $1.4 million. In comparison, in 2003 and 2002, the Company realized significant
gains on disposal of certain marketable securities held for investment and strategic purposes. In
2004, the Company recorded a significant increase in the provision for decline in marketable
securities of $10.4 million due to a decline in market value of certain investments. Gains on the
Companys marketable securities holdings are not recorded until realized. Income Taxes Goldcorps income tax provision is calculated on the various income and mining taxes the Company is
subject to in Canada and the United States. In 2004, a tax provision of $30.1 million was recorded
on earnings before taxes of $81.4 million, compared with a $54.0 million provision recorded on
earnings before taxes of $152.8 million in 2003. In 2002, a $39.2 million provision was recorded on
earnings before taxes of $107.5 million. In 2004, earnings before taxes of $77.1 million were generated from the Companys Canadian
operations and earnings of $4.4 million were generated by Goldcorps US operations. The tax
provision in the financial statements of $30.1 million is therefore largely related to Goldcorps
Canadian operations and consisted of current income and mining taxes of $11.5 million and $18.6
million in future income and mining taxes. There were no changes to corporate income tax rates applicable to the Company for 2004 whereas in
the prior year, Goldcorp booked a net decrease to the income tax provision of $1.8 million
resulting from legislation rate changes. Goldcorps statutory Canadian federal and weighted average provincial income tax rate continues to
be 40%. The tax provision of $30.1 million represents an effective tax rate of 37.0% on earnings
before taxes of $81.4 million. Differences between the statutory tax rate of 40% and the actual
amount provided are described and reconciled in detail in Note 9(b) to the Consolidated Financial
Statements.




---



##### 



10

GOLDCORP INC.    During 2004, Goldcorp paid $40 million in taxes. Approximately $15 million related to earnings from
2003 while $25 million were net installments made during the year on expected earnings for 2004 and
other payments. At December 31, 2004, Goldcorp had a net income and mining taxes receivable balance
of $12.3 million. Additional information on income and mining taxes for the Company during the three years ended
December 31, 2004, including an outline of future tax assets and liabilities as reflected on the
balance sheet, are detailed in Note 9 to the Consolidated Financial Statements. Earnings for the Year Goldcorp generated earnings in 2004 of $51.3 million compared to
earnings in 2003 of $98.8 million and earnings in 2002 of $68.2
million. While operating results have been strong, the decrease
compared to 2003 is due to fewer ounces sold, partially offset by a
higher realized gold price. Earnings per share decreased to $0.27 per share compared to $0.54 per
share in 2003, a $0.27 per share decrease. Earnings per share in 2002
were $0.39. The net profit margin, defined as earnings as a percentage of
revenues, was 27% in 2004 compared to 38% in 2003, and 37% in 2002. A
significant portion of the decrease in 2004 compared to 2003 and 2002
is the result of the increase in provision for decline in value of
marketable securities in 2004 and a relatively small amount of
realized gains on the sale of such marketable securities. In both 2003
and 2002, the Company recorded significant gains on the sale of
marketable securities. Return on equity and invested capital
1 was 10% in 2004 compared with 23% in 2003, and 27% in
2002. The significantly lower return in 2004 was a result of reduced
earnings due to the holdback in gold sales along with the impact of a
growing equity base.   1
    For an explanation of non-GAAP performance measures refer to page 16. (BAR CHART) 6. Operational Review Red Lake Mine Operating Data
    
    2004
    
    
    % Change
    
    
    2003
    
    
    % Change
    
    
    2002Tons of ore milled
    
    
    246,822
    
    
    
    2.0
    %
    
    
    242,082
    
    
    
    1.1
    %
    
    
    239,482Tons of ore milled per
calendar day
    
    
    674
    
    
    
    1.7
    %
    
    
    663
    
    
    
    1.1
    %
    
    
    656Average mill head grade
(ounces per ton)
    
    
    2.25
    
    
    
    2.3
    %
    
    
    2.20
    
    
    
    (3.9
    %)
    
    
    2.29Average recovery rate
    
    
    90.3
    %
    
    
    1.9
    %
    
    
    88.6
    %
    
    
    (2.4
    %)
    
    
    90.8
    %Ounces of gold produced
    
    
    551,886
    
    
    
    3.7
    %
    
    
    532,028
    
    
    
    1.2
    %
    
    
    525,930Ounces of gold sold
    
    
    365,256
    
    
    
    (40.2
    %)
    
    
    610,334
    
    
    
    31.7
    %
    
    
    463,524Operating cost per ounceCash production cost
    
    $
    92
    
    
    
    15.0
    %
    
    $
    80
    
    
    
    23.1
    %
    
    $
    65Non-cash cost
    
    
    36
    
    
    
    16.1
    %
    
    
    31
    
    
    
    6.9
    %
    
    
    29Total operating cost
    
    $
    128
    
    
    
    15.3
    %
    
    $
    111
    
    
    
    18.1
    %
    
    $
    94
 Financial Data (in millions of US dollars)
 2004
    
    
    % Change
    
    
    2003
    
    
    % Change
    
    
    2002Revenues
    
    $
    152.2
    
    
    
    (32.1
    %)
    
    $
    224.0
    
    
    
    54.6
    %
    
    $
    144.9Operating profit
    
    $
    102.7
    
    
    
    (32.9
    %)
    
    $
    153.0
    
    
    
    55.2
    %
    
    $
    98.6Operating margin (%)
    
    
    67
    %
    
    
    (1.5
    %)
    
    
    68
    %
    
    
    4.6
    %
    
    
    65
    %Operating cash flow
    
    $
    115.2
    
    
    
    (32.9
    %)
    
    $
    171.8
    
    
    
    53.4
    %
    
    $
    112.0




---



##### 



GOLDCORP INC.     11 Red Lake delivered excellent results for the year ended December 31, 2004. Significant milestones
were reached in 2004: employees completed four years of full production without a lost time
accident during which the Red Lake Mine produced over 2.0 million ounces of gold making it the
highest producing gold mine in Canada. Gold production for the year was 551,886 ounces, an increase of 19,858 ounces, or 4% over 2003. The
increase in production was the result of more tons milled (246,822 tons versus 242,082 tons),
higher grade (2.25 ounces per ton versus 2.20 ounces per ton), and a higher recovery rate (90.3%
versus 88.6%). The Red Lake Mine exceeded its production budget by 7%, while meeting its plans for
underground mine development and conducting an extensive exploration program. Cash cost at the Red
Lake Mine increased by $12 per ounce, or 15%, between 2003 and 2004. The increase of $12 per ounce
in cash cost in 2004 can be attributed to a stronger Canadian dollar ($6 per ounce), a larger
percentage of higher cost concentrate ($3 per ounce) and increased operating costs primarily due to
higher contractor labour costs. Gold not recovered through the primary extraction process is stockpiled in concentrate form,
transported and subsequently processed by a third party. Due to the secondary processing required,
the production cost of ounces produced from concentrate is higher than the cost of ounces produced
on site. Currently, Goldcorp ships concentrate to two facilities for processing: Barricks
Goldstrike Mine in Nevada and Placer Domes Campbell Mine, which is located adjacent to the Red
Lake Mine. Red Lake recovered 57,820 ounces of gold from concentrate at third parties at a cash
cost of $135 per ounce (including both inventoried mining and milling costs, and transportation and
secondary processing costs). Also recovered during the year were 8,684 ounces of gold from Old Concentrate at a cash cost of
$281 per ounce (including transportation and secondary processing costs only). Old Concentrate
refers to concentrate produced from the sulphide ore mined prior to the shutdown of the mine in
1996. Ounces produced from Old Concentrate, and the associated cost per ounce, are not included in
the Red Lake operating data. If the 8,684 ounces from Old Concentrate were included, year-to-date
production would have been 560,570 ounces, at a cash cost of $96 per ounce and a total cost of $132
per ounce. A major goal of the 2004 exploration program was to increase the reserves of the High Grade Zone
(HGZ) and Sulphide Zone in order to increase mine life and justify an expanded production rate. This was
achieved as the exploration program has added to reserves more ounces than mined during the year.
The total proven and probable reserves at the Red Lake Mine for December 31, 2004 were estimated at
3.4 million tons of ore at a grade of 1.46 ounces per ton (opt) (50.1 grams per tonne (gpt)), for
5.0 million contained ounces of gold, compared with 4.9 million contained ounces of gold in 2003.
The HGZ reserves stand at 2.0 million tons of ore at a grade of 2.23 opt (76.4 gpt), for a total of
approximately 4.4 million contained ounces of gold. The sulphide reserves make up 1.4 million tons
of ore at an average grade of 0.39 opt (13.3 gpt), for approximately 0.6 million contained ounces
of gold. These estimates are based on a gold price of $375 per ounce and are audited by a firm of
independent consulting geologists and engineers. Wharf Mine Operating Data
    
    2004
    
    
    % Change
    
    
    2003
    
    
    % Change
    
    
    2002Tons of ore mined (000s)
    
    
    3,049
    
    
    
    (15.0
    %)
    
    
    3,587
    
    
    
    (14.8
    %)
    
    
    4,210Tons of waste removed (000s)
    
    
    9,234
    
    
    
    (14.8
    %)
    
    
    10,835
    
    
    
    (12.0
    %)
    
    
    12,319Ratio of waste to ore
    
    
    3.03:1
    
    
    
    0.3
    %
    
    
    3.02:1
    
    
    
    3.1
    %
    
    
    2.93:1Tons of ore processed (000s)
    
    
    3,036
    
    
    
    (15.5
    %)
    
    
    3,593
    
    
    
    (15.5
    %)
    
    
    4,251Average grade of gold
processed (opt)
    
    
    0.028
    
    
    
    (3.4
    %)
    
    
    0.029
    
    
    
    7.4
    %
    
    
    0.027Ounces of gold produced
    
    
    76,119
    
    
    
    7.5
    %
    
    
    70,817
    
    
    
    (13.6
    %)
    
    
    81,989Ounces of gold sold
    
    
    62,320
    
    
    
    (7.8
    %)
    
    
    67,602
    
    
    
    (19.1
    %)
    
    
    83,574Operating cost per ounceCash production cost
    
    $
    234
    
    
    
    (9.3
    %)
    
    $
    258
    
    
    
    9.3
    %
    
    $
    236Royalties and severance
taxes
    
    
    21
    
    
    
    16.7
    %
    
    
    18
    
    
    
    28.6
    %
    
    
    14Total cash cost
    
    $
    255
    
    
    
    (7.6
    %)
    
    $
    276
    
    
    
    10.4
    %
    
    $
    250Non-cash cost
    
    
    104
    
    
    
    19.5
    %
    
    
    87
    
    
    
    45.0
    %
    
    
    60Total operating cost
    
    $
    359
    
    
    
    (1.1
    %)
    
    $
    363
    
    
    
    17.1
    %
    
    $
    310




---



##### 



12

GOLDCORP INC.    Financial Data (in millions of US dollars)
 2004
    
    
    % Change
    
    
    2003
    
    
    % Change
    
    
    2002Revenues
    
    $
    26.1
    
    
    
    4.8
    %
    
    $
    24.9
    
    
    
    (5.7
    %)
    
    $
    26.4Operating profit (loss)
    
    $
    3.6
    
    
    
    3500.0
    %
    
    $
    0.1
    
    
    
    (50.0
    %)
    
    $
    0.2Operating margin (%)
    
    
    14
    %
    
    
    N/A
    
    
    
    
    
    
    
    (100
    %)
    
    
    1
    %Operating cash flow
    
    $
    10.1
    
    
    
    65.6
    %
    
    $
    6.1
    
    
    
    15.1
    %
    
    $
    5.3
 Mining operations at the open pit Wharf Mine in South Dakota are expected to be completed in early
2007. Ounces will continue to be produced throughout 2007 from previously delivered ounces. During
2004 operations remained focused on increasing and maintaining operational efficiencies. Increased production and lower costs compared to 2003 are reflected in
a cash cost of $255 per ounce in 2004, compared with $276 in 2003. Operational changes during the year have reduced mining
and processing costs. This has been partially offset by higher royalties due to the higher price of
gold. The increase in the non-cash cost is related to amortization of capitalized stripping costs
incurred to access the ore in the Trojan pit. The costs relating to stripping are capitalized and
then amortized over the mines estimated remaining ounces of reserves. The proven and probable reserves at December 31, 2004 were estimated at 6.6 million tons of ore at
a grade of 0.033 opt (1.1 gpt), for a total gold content of 229,000 ounces. Reclamation on the nearby Golden Reward Mine, which ceased production in 1996, progressed well
during 2004 with activity consisting primarily of plant site clean up and re-vegetation maintenance. Final
reclamation began in 2002 after a five year care and maintenance period. Saskatchewan Minerals Financial Data (in millions of US dollars, operating data in thousands of tons)
 2004
    
    
    % Change
    
    
    2003
    
    
    % Change
    
    
    2002Revenues
    
    $
    12.7
    
    
    
    (7.3
    %)
    
    $
    13.7
    
    
    
    (2.1
    %)
    
    $
    14.0Operating profit
    
    $
    0.8
    
    
    
    (53.0
    %)
    
    $
    1.7
    
    
    
    (37.0
    %)
    
    $
    2.7Operating cash flow
    
    $
    1.3
    
    
    
    (35.0
    %)
    
    $
    2.0
    
    
    
    (31.0
    %)
    
    $
    2.9
 Saskatchewan Minerals is an industrial minerals operation producing natural sodium sulphate for the
detergent, pulp and paper and textile industries. Revenue for the year ended December 31, 2004 was
7% lower than for 2003. Operating profit for the year ended December 31, 2004 was generally lower
than 2003 and 2002 as a result of lower sales volumes and a stronger Canadian dollar.




---



##### 



GOLDCORP INC.     13 7. Liquidity and Capital Resources Cash Resources Cash and short-term investments decreased from $379.0
million at December 31, 2003 to $333.4 million at December
31, 2004. The decrease of $45.6 million was due to the use
of cash in investing activities of $73.1 million and in financing
activities of $49.6 million, partially offset by
cash flow from operations of $53.1 million and the effect
of a strengthening Canadian dollar ($24.0 million).
Despite only selling two-thirds of production, cash flows
from operating activities still contributed $53.1 million
to cash (2003  $95.2 million, 2002  $104.1 million).
Significant uses of cash included investing activities
consisting primarily of the Red Lake expansion and the
purchase of marketable securities, as well as dividend
payments. Goldcorps treasury assets, noted at market values, are
listed below and in the accompanying chart. These values
differ from the GAAP valuation on the balance sheet which
is at the lower of cost or market. (BAR CHART) Treasury Assets(Market value in millions of US dollars) 2004
    
    
    % Change
    
    
    2003
    
    
    % Change
    
    
    2002Cash and short-term investments
    
    $
    333.4
    
    
    
    (12.0
    %)
    
    $
    379.0
    
    
    
    45.3
    %
    
    $
    260.8Purchased gold bullion  at market value
    
    
    
    
    
    
    N/A
    
    
    
    
    
    
    
    (100.0
    %)
    
    
    34.3Produced gold bullion  at market value
    
    
    96.4
    
    
    
    1008.0
    %
    
    
    8.7
    
    
    
    (73.6
    %)
    
    
    32.9Marketable securities  at market value
    
    
    31.0
    
    
    
    40.9
    %
    
    
    22.0
    
    
    
    124.5
    %
    
    
    9.8Total
    
    $
    460.8
    
    
    
    12.5
    %
    
    $
    409.7
    
    
    
    21.3
    %
    
    $
    337.8
 The market value of marketable securities at December 31, 2004 was $31.0 million which is $8.1
million above book value. Operating activities Goldcorps cash flow from operations was $53.1 million, or $0.28 per share, for the year ended
December 31, 2004. This compares with $95.2 million, or $0.52 per share, for the year ended
December 31, 2003 and $104.1 million, or $0.59 per share in 2001. The decrease in the current year
is primarily attributable to lower earnings due to lower gold sales and changes in non-cash working
capital as noted below: Change in non-cash operating working capital (in millions of US dollars)
 2004
    
    
    % Change
    
    
    2003
    
    
    % Change
    
    
    2002Decrease (increase)
in current assets:Gold bullion
    
    $
    (28.0
    )
    
    
    N/A
    
    
    $
    8.1
    
    
    
    N/A
    
    
    $
    (6.9
    )Accounts receivable
    
    
    2.4
    
    
    
    N/A
    
    
    
    (4.9
    )
    
    
    4,900.0
    %
    
    
    (0.1
    )Inventories
    
    
    9.7
    
    
    
    N/A
    
    
    
    (3.8
    )
    
    
    N/A
    
    
    
    1.3Prepaid expenses
    
    
    
    
    
    
    N/A
    
    
    
    (0.1
    )
    
    
    N/A
    
    
    
    (0.2
    )Increase (decrease) in current liabilities:Accounts payable
    
    
    0.7
    
    
    
    N/A
    
    
    
    
    
    
    
    100.0
    %
    
    
    2.7Accrued liabilities
    
    
    (5.6
    )
    
    
    N/A
    
    
    
    4.1
    
    
    
    925.0
    %
    
    
    0.4Taxes payable
    
    
    (27.8
    )
    
    
    (7.3
    %)
    
    
    (25.9
    )
    
    
    N/A
    
    
    
    34.4Total
    
    $
    (48.6
    )
    
    
    (127.0
    %)
    
    $
    (22.5
    )
    
    
    N/A
    
    
    $
    31.6
 Goldcorps year-end gold bullion inventory increased significantly to 221,220 ounces at December
31, 2004 compared to 20,791 ounces in 2003.




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##### 



14

GOLDCORP INC.    Investing Activities Mining Interests (in millions of US dollars)
 2004
    
    
    % Change
    
    
    2003
    
    
    % Change
    
    
    2002Red Lake
    
    $
    49.7
    
    
    
    (24.2
    %)
    
    $
    65.6
    
    
    
    243.5
    %
    
    $
    19.1Wharf Mine
    
    
    6.2
    
    
    
    (27.1
    %)
    
    
    8.5
    
    
    
    18.1
    %
    
    
    7.2Saskatchewan Minerals
    
    
    0.2
    
    
    
    (50.0
    %)
    
    
    0.4
    
    
    
    (20.0
    %)
    
    
    0.5Total
    
    $
    56.1
    
    
    
    (24.7
    %)
    
    $
    74.5
    
    
    
    178.0
    %
    
    $
    26.8
 During 2004, significant investments were made in mining interests relating primarily to our Red
Lake Mine. Approximately $24 million was spent on new shaft expansion which is scheduled to be
completed in 2007. Exploration expenditures of $17.6 million at the Red Lake Mine were capitalized
during the year. The balance was largely spent on underground development infrastructure and
surface facilities. The amounts spent at the Wharf Mine relate predominantly to capitalized
stripping costs on the Trojan Pit. During 2004, Goldcorp had net purchases of marketable securities of $18.0 million. At December 31,
2004, the portfolio had a market value of $31.0 million (2003  $22.0 million) compared to a
carrying value on the balance sheet of $22.9 million (2003  $12.2 million). Costs associated with the proposed acquisition of Wheaton have been recorded as deferred charges on
the balance sheet. If the proposed transaction is not successful, these amounts will be expensed during
the period when it is determined that the transaction is unsuccessful. Financing activities Throughout 2004, Goldcorp paid a regular monthly dividend of $0.015 per share ($0.18 per share
annually). A special $0.10 per share dividend was announced on December 10, 2003, and paid to
shareholders of record on January 6, 2004. Therefore, shareholders in 2004 received a regular
dividend of $0.18 per share paid monthly and a special dividend of $0.10 per share for a total of
$0.28 per share. This amounted to $53.1 million in total dividend payments for 2004 on a cash
basis. In comparison, shareholders during 2003 received five bi-monthly dividend payments of
$0.025 per share and two monthly dividend payments of $0.015 per share. This resulted in total cash
dividends of $28.4 million, or $0.155 per share, being paid out in 2003. During 2004, cash raised through the exercise of stock options was $3.5 million (2003  $27.0
million). Effect of Exchange Rate Changes on Cash A substantial portion of the Companys cash and short-term investments are held in Canadian
dollars. As a result, the movement in the Cdn/US dollar exchange rate has an impact on the cash and
short-term investments, in US dollar terms, as reported on the balance sheet. For example, a
strengthening Canadian dollar will have a positive impact on the Companys cash position. This
impact is reported on the Consolidated Statement of Cash Flows under the Effect of exchange rate
changes on cash. Between December 31, 2003 and December 31, 2004, the Canadian dollar strengthened
vis-à-vis the US dollar, which had a positive impact of $24.0 million on the Companys cash
position. During the corresponding period in 2003, the Canadian dollar also strengthened, which had
a positive impact on Goldcorps cash position of $57.5 million.




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##### 



GOLDCORP INC.     15 Commitments Goldcorp remains debt free and its gold production and reserves are totally unhedged. Goldcorp has
no unfunded pension liabilities. Operating lease commitments relating primarily to equipment leases
and commitments relating to the sinking of the new shaft at the Red Lake Mine are estimated at
approximately $66.1 million over the next five years as follows: (in millions of US dollars) Equipment
    
    
    Red Lake Mineleases
    
    
    shaft sinking
    
    
    Total2005
    
    $
    7.0
    
    
    $
    25.0
    
    
    $
    32.02006
    
    
    6.2
    
    
    
    19.0
    
    
    
    25.22007
    
    
    2.5
    
    
    
    6.0
    
    
    
    8.52008
    
    
    0.3
    
    
    
    
    
    
    
    0.32009
    
    
    0.1
    
    
    
    
    
    
    
    0.1Total
    
    $
    16.1
    
    
    $
    50.0
    
    
    $
    66.1
 These payments will be made from the Companys regular cash flow from operating activities. In addition, Goldcorp has provided letters of credit of $18.2 million to the State of South Dakota
for reclamation costs in lieu of cash deposits. Goldcorp does not have any off-balance sheet
arrangements nor does it have any guarantees outstanding. In connection with the proposed acquisition of Wheaton, the Company agreed to a break fee of $35
million should the transaction be unsuccessful. Given shareholder approval of the transaction and
the tendering status of the Wheaton shares as of February 16, 2005, the Company does not anticipate
any payments being necessary in connection with the break fee. Upon successful completion of the
Wheaton transaction, the Company has contractual obligations to pay advisory fees of approximately $14.0 million to various
parties. Shareholders Equity Shareholders equity for the year-ended December 31, 2004 has increased by $70.1 million. The
increase reflects $20.0 million in earnings net of dividends, foreign currency gains of $41.5
million not reflected in earnings, an increase to capital stock of $3.5 million through shares
issued on the exercise of stock options and an increase to contributed surplus of $5.1 million
relating to the expensing of stock options, net of stock option exercises affecting contributed
surplus which is detailed further in Note 8(e) to the financial statements. 8. Critical Accounting Policies and Estimates Mining Interests Mining interests are a significant asset on Goldcorps balance sheet
and represent the capitalized expenditures related to the
exploration, development and processing of mineral deposits.
Management makes estimates of the reserves and the economic life of
the mine. These are used for calculating depreciation, depletion and
amortization expense and determining the recoverability of the cost
of each property. Reserve estimates may be revised for a number of
reasons including, but not limited to: changes in gold price
assumptions, changes in by-product price assumptions (e.g. silver),
changes in foreign exchange rate estimates, revisions to geological
data and results of drilling and exploration activities. Goldcorps
reserve estimates at the Red Lake Mine are insensitive to small
changes in the price of gold or foreign exchange rate estimates due
to the low cost nature of the operation. Annually, an independent firm of consulting geologists and engineers
audits the reserves and resources estimate at the Red Lake Mine and
Wharf Mine. (TOTAL RESERVES AND RESOURCES BAR CHART)




---



##### 



16

GOLDCORP INC.    A 10% decrease to our estimated reserve base at the beginning of 2004 would have impacted our 2004
financial statements by increasing depreciation and depletion by approximately $1.5 million. In addition to plant and equipment, this asset category includes deferred exploration and mine
development. Note 2(e) to the Consolidated Financial Statements details the accounting policies in
place, while Note 5 provides additional disclosure. Reclamation and Closure Costs Obligations Environmental laws and regulations relating to the protection of the environment are continually
changing and generally becoming more restrictive. Goldcorp has made, and intends to make in the
future, expenditures to comply with such laws and regulations. The Company has recorded a liability
and corresponding asset for the fair value of legal obligations for reclamation and closure costs,
including site rehabilitation and long-term treatment and monitoring costs. Implicit in these
amounts are estimates of future costs which are subject to change based on negotiations with
regulatory authorities, changes in laws and regulations and changes in estimated discount rate.
These estimates are reviewed annually or as new information becomes available. External consultants
have been used by the Company at all three operations to develop and refine the estimates for
reclamation and closure costs. All significant estimates are disclosed in Note 6. There have been
no significant changes during the year to cash flow expenditure estimates relating to Wharf Mine,
Golden Reward Mine (inactive), or Saskatchewan Minerals. Upward revisions were made to the
reclamation estimates at the Red Lake Mine and associated Cochenour Mine (inactive) due primarily
to an estimated increase in the cost and number of years of future water treatment
required at these properties. Recent Canadian Accounting Pronouncements In December 2004, the CICA issued EIC-150: Determining Whether an Arrangement Contains a Lease
which discusses whether outsourcing or other types of contracts or arrangements contains a lease
under the scope of CICA 3065. This standard applies to the Company for any arrangements agreed to,
modified, or acquired through a business combination after January 1, 2005. The Company has not
yet determined whether this standard will affect the consolidated financial statements. Non-GAAP Measures Goldcorp has included throughout this document certain non-GAAP performance measures such as
Bullion adjusted results. These non-GAAP measures do not have any standardized meaning nor are they
necessarily comparable with similar measures presented by other companies. Cash costs and non-cash
costs are presented as they represent an industry standard method of comparing certain costs on a
per unit basis. Goldcorp believes that certain investors use this information to evaluate the
Companys performance. The data are intended to provide additional information and should not be
considered in isolation or as a substitute for measures of performance prepared in accordance with
GAAP. Management utilizes both GAAP and non-GAAP measures in assessing the Companys own
performance. Set out below are definitions for these performance measures and reconciliations of
non-GAAP measures to reported GAAP measures. Cash Flow from Operations per Common Share Cash flow from operations is determined by dividing cash flow from operations by the weighted
average number of common shares outstanding during the year. The following table sets forth the
computation of both the basic and diluted cash flow from operations per common share:  (in thousands of US
dollars, except per share amounts)2004
    
    
    2003
    
    
    2002Cash flow from operations
    
    $
    53,103
    
    
    $
    95,166
    
    
    $
    104,140Divided by:Weighted average shares outstanding (000s)
    
    
    189,723
    
    
    
    183,574
    
    
    
    176,654Effect of dilutive securities:Employee stock options and warrants
    
    
    3,962
    
    
    
    4,605
    
    
    
    7,592Adjusted weighted average shares and assumed conversions
    
    
    193,685
    
    
    
    188,179
    
    
    
    184,246Basic cash flow from operations per share
    
    $
    0.28
    
    
    $
    0.52
    
    
    $
    0.59Diluted cash flow from operations per share
    
    $
    0.27
    
    
    $
    0.51
    
    
    $
    0.57




---



##### 



GOLDCORP INC.     17 Financial Ratios Gross Operating Marginis defined as gross operating profit for the year, which is profit after
deducting from revenue operating expenses, divided by revenue for the year. Net Profit Marginis calculated by dividing earnings for the year by revenue for the year. Return on Invested Capitalis defined as earnings for the year divided by the total of the average
of debt and equity for the year. Because the Company is debt free, Goldcorps calculation of Return
on Invested Capital is earnings divided by the average equity during the year. Reconciliation of Cash Cost per Ounce to Financial Statements (in thousands of US dollars)
 2004
    
    
    2003
    
    
    2002Operating expenses
    
    $
    69,368
    
    
    $
    88,527
    
    
    $
    64,779Industrial Minerals operating expense
    
    
    (11,723
    )
    
    
    (11,747
    )
    
    
    (11,054
    )Silver by-product credit
    
    
    (1,092
    )
    
    
    (605
    )
    
    
    (520
    )Stock option compensation from gold operations
included with operating expense
    
    (1,292
    )
    
    
    (439
    )
    
    
    Old concentrate processing cost
    
    
    (2,443
    )
    
    
    (2,662
    )
    
    
    (492
    )Accretion expense from gold operations
    
    
    (1,199
    )
    
    
    (1,113
    )
    
    
    (1,021
    )Other
    
    
    (2,444
    )
    
    
    (4,168
    )
    
    
    (812
    )$
    49,175
    
    
    $
    67,793
    
    
    $
    50,880Divided by ounces sold
    
    
    427,576
    
    
    
    677,936
    
    
    
    547,098Cash cost per ounce
    
    $
    115
    
    
    $
    100
    
    
    $
    93
 Reconciliation of Non-Cash Cost per Ounce to Financial Statements (in thousands of US dollars, except per ounce amounts)
 2004
    
    
    2003
    
    
    2002Depreciation and deletion
    
    $
    20,058
    
    
    $
    24,101
    
    
    $
    17,851Industrial Minerals depreciation and depletion
    
    
    (345
    )
    
    
    (284
    )
    
    
    (238
    )Accretion expense from gold operations
    
    
    1,199
    
    
    
    1,113
    
    
    
    1,021Stock option compensation from gold operations
included with operating expense
    
    
    1,292
    
    
    
    439
    
    
    
    Other
    
    
    (2,423
    )
    
    
    (296
    )
    
    
    (580
    )$
    19,781
    
    
    $
    25,073
    
    
    $
    18,054Divided by ounces sold
    
    
    427,576
    
    
    
    677,936
    
    
    
    547,098Non-cash cost per ounce
    
    $
    46
    
    
    $
    37
    
    
    $
    33
 9. Quarterly Data(unaudited) (in millions of US dollars, except per share amounts)
 March
    
    
    June
    
    
    September
    
    
    December2004
    
    
    2003
    
    
    2004
    
    
    2003
    
    
    2004
    
    
    2003
    
    
    2004
    
    
    2003Revenue
    
    $
    48.3
    
    
    $
    47.5
    
    
    $
    40.5
    
    
    $
    48.8
    
    
    $
    50.4
    
    
    $
    55.8
    
    
    $
    51.9
    
    
    $
    110.6Earnings from
operations
    
    $
    25.1
    
    
    $
    23.2
    
    
    $
    16.0
    
    
    $
    24.1
    
    
    $
    22.2
    
    
    $
    25.8
    
    
    $
    17.6
    
    
    $
    61.7Earnings
    
    $
    17.3
    
    
    $
    14.2
    
    
    $
    9.2
    
    
    $
    17.6
    
    
    $
    9.9
    
    
    $
    23.7
    
    
    $
    15.0
    
    
    $
    43.3EarningsBasic
    
    $
    0.09
    
    
    $
    0.08
    
    
    $
    0.05
    
    
    $
    0.10
    
    
    $
    0.05
    
    
    $
    0.13
    
    
    $
    0.08
    
    
    $
    0.23Diluted
    
    $
    0.09
    
    
    $
    0.07
    
    
    $
    0.05
    
    
    $
    0.09
    
    
    $
    0.05
    
    
    $
    0.12
    
    
    $
    0.08
    
    
    $
    0.22Cash flow from
operations
    
    $
    (3.5
    )
    
    $
    (14.3
    )
    
    $
    11.9
    
    
    $
    16.6
    
    
    $
    22.3
    
    
    $
    23.0
    
    
    $
    22.4
    
    
    $
    69.8




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##### 



18

GOLDCORP INC.    Summary of Fourth Quarter 2004 Results Revenues for the quarter ended December 31, 2004 were $51.9 million, a $58.7 million decrease
compared with the corresponding period last year. This reflects the sale in the fourth quarter of
2003 of a large amount of gold previously held back from sale. Beginning in the second half of
2001, Goldcorp began accumulating a significant gold bullion inventory by withholding from sale a portion of the
Companys gold production in anticipation of higher gold prices. By the beginning of the fourth
quarter of 2003, 142,913 ounces of gold from prior period production had been accumulated and in
the fourth quarter of 2003, all of this inventory was sold. At an average sales price of $388 per
ounce, this resulted in an additional $55.5 million in revenue for the fourth quarter of 2003 in
addition to regular production sales of 137,498 ounces. During 2004, Goldcorp has maintained a
policy throughout the year of only selling approximately two-thirds of gold production with the
other one-third held back from sale in anticipation of higher gold prices. Consequently, for the
fourth quarter of 2004, the Company only sold 113,757 ounces of the 166,254 ounces produced during
the quarter. Partially offsetting the decrease in ounces sold is an increase in the realized price
of gold from $388 for the fourth quarter of 2003 to $432 for the fourth quarter of 2004. Goldcorp produced 166,254 ounces of gold bullion during the fourth quarter of 2004 and sold 113,757
ounces at a realized price of $432 per ounce, compared with 158,289 ounces produced and 280,411
ounces sold at a realized price of $388 per ounce for the corresponding period last year. Earnings from operations for the quarter were $17.6 million, compared to $61.7 million in the
fourth quarter of 2003. Other factors affecting our operating results include a $2.4 million
decrease in depreciation and depletion due to fewer ounces sold, partially offset by a $1.9 million
increase in exploration expense. In addition, in the prior year quarter, significant gains
relating to the sale of purchased bullion and marketable securities were realized while there were
corresponding losses in the fourth quarter of 2004 on marketable securities. Earnings for the fourth quarter of 2004 were $15.0 million ($0.08 per share) compared to $43.3
million ($0.24 per share) for the fourth quarter of 2003 and $9.9 million ($0.05 per share) for the
third quarter of 2004. The decrease in earnings compared to the fourth quarter of 2003 is due
primarily to the decrease in ounces sold partially offset by a higher gold price and a lower
effective tax rate. Cash flow from operations for the fourth quarter of 2004 was $22.4 million, compared to $69.8
million for the fourth quarter of 2003. Cash flow from operations was significantly higher in the
prior year quarter due to the sale of accumulated ounces of bullion held back from sale as noted
previously, along with other positive movements in non-cash working capital relating primarily to
changes in income tax balances.




---



##### 



GOLDCORP INC.     19 MANAGEMENTS RESPONSIBILITY FOR FINANCIAL STATEMENTS The accompanying consolidated financial statements have been prepared by and are the
responsibility of the Board of Directors and Management of the Company. The consolidated financial
statements have been prepared in accordance with the accounting principles generally accepted in
Canada and reflect Managements best estimates and judgements based on currently available
information. The Company has developed and maintains a system of internal accounting controls in
order to ensure, on a reasonable and cost effective basis, the reliability of its financial
information. The consolidated financial statements have been audited by KPMG LLP, Chartered Accountants. Their
report outlines the scope of their examination and opinion on the financial statements. /s/ Brad J. Boland  Brad J. Boland  Vice President Finance  Toronto, Canada  February 7, 2005
 AUDITORS REPORT TO THE SHAREHOLDERS We have audited the consolidated balance sheets of Goldcorp Inc. as at December 31, 2004 and
2003 and the consolidated statements of earnings, retained earnings (deficit) and cash flows for
each of the years in the three year period ended December 31, 2004. These financial statements are
the responsibility of the Companys management. Our responsibility is to express an opinion on
these financial statements based on
our audits. We conducted our audits in accordance with Canadian generally accepted auditing standards. Those
standards require that we plan and perform an audit to obtain reasonable assurance whether the
financial statements are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. In our opinion, these consolidated financial statements present fairly, in all material respects,
the financial position of the Company as at December 31, 2004 and 2003 and the results of its
operations and its cash flows for each of the years in the three year period ended December 31,
2004 in accordance with Canadian generally accepted accounting principles. /s/ KPMG LLP  Chartered Accountants  Toronto, Canada  February 7, 2005 (except as to Note 15 which is as of February 14, 2005)




---



##### 



(KPMG LETTERHEAD) Comments by Auditors for U.S. Readerson
Canada-U.S. Reporting Differences In the United States, reporting standards for auditors require the addition of an explanatory
paragraph (following the opinion paragraph) when there is a change in accounting principles that
has a material effect on the comparability of a companys financial statements. As described in
note 15(i) to the consolidated financial statements of Goldcorp Inc. as at December 31, 2004, the
Company has adopted the provisions of SFAS No. 123, Accounting for Stock Based Compensation
effective January 1, 2003 in its reconciliation of significant differences between Canadian and
United States generally accepted accounting principles. Our report to the shareholders dated
February 7, 2005 except as to Note 15 which is as of February 14, 2005, is expressed in accordance
with Canadian reporting standards, which do not require a reference to such changes in accounting
principles in the auditors report when the change is properly accounted for and adequately
disclosed in the financial statements.  (-s- KPMG LLP)
Toronto, Canada
February 7, 2005
(except as to Note 15 which is as of February 14, 2005)    KPMG
LLP, a Canadian limited liability partnership is the
Canadianmember firm of KPMG International, a Swiss cooperative.




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##### 



20

GOLDCORP INC.    CONSOLIDATED BALANCE SHEETS (in thousands of United States dollars)
 As at December 31,
    
    2004
    
    
    2003ASSETSCurrent assetsCash and short-term investments
    
    $
    333,375
    
    
    $
    378,954Gold bullion (note 3)(market value: $96,363; 2003: $8,675)
    
    
    33,895
    
    
    
    3,910Accounts receivable
    
    
    7,197
    
    
    
    8,872Income and mining taxes receivable
    
    
    12,269
    
    
    
    Marketable securities (market value: $31,006; 2003: $22,003)
    
    
    22,873
    
    
    
    12,224Inventories (note 4)
    
    
    15,329
    
    
    
    17,527Prepaid expenses
    
    
    1,735
    
    
    
    1,803426,673
    
    
    
    423,290Mining interests(note 5)
    
    
    264,949
    
    
    
    207,317Deposits for reclamation costs(note 6)
    
    
    4,924
    
    
    
    5,754Deferred charges(note 15)
    
    
    2,624
    
    
    
    Other assets
    
    
    2,348
    
    
    
    2,162$
    701,518
    
    
    $
    638,523LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilitiesAccounts payable
    
    $
    6,828
    
    
    $
    5,606Accrued liabilities
    
    
    18,679
    
    
    
    17,422Dividends payable
    
    
    
    
    
    
    21,526Income and mining taxes payable
    
    
    
    
    
    
    16,516Future income and mining taxes
    
    
    1,149
    
    
    
    6126,656
    
    
    
    61,131Reclamation and closure cost obligations(note 6)
    
    
    26,403
    
    
    
    21,850Future income and mining taxes(note 9(c))
    
    
    70,610
    
    
    
    47,800Shareholders equityCapital stock (note 8)
    
    
    379,356
    
    
    
    375,827Contributed surplus (note 8(e))
    
    
    7,347
    
    
    
    2,275Cumulative translation adjustment (note 8(f))
    
    
    107,741
    
    
    
    66,282Retained earnings
    
    
    83,405
    
    
    
    63,358577,849
    
    
    
    507,742$
    701,518
    
    
    $
    638,523
 Commitments and contingencies (notes 6 and 7)  Subsequent events (note 15)
 The accompanying notes are an integral part of these consolidated financial statements. Approved by the Board, /s/ R. R. McEwen
R. R. McEwen
Director
    
    /s/ Brian W. Jones
Brian W. Jones
Director




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##### 



GOLDCORP INC.     21 CONSOLIDATED STATEMENTS OF EARNINGS (in thousands of United States dollars, except per share amounts)
 Years ended December 31,
    
    2004
    
    
    2003
    
    
    2002RevenuesGold
    
    $
    178,319
    
    
    $
    248,954
    
    
    $
    171,208Industrial minerals
    
    
    12,697
    
    
    
    13,688
    
    
    
    13,986191,016
    
    
    
    262,642
    
    
    
    185,194ExpensesOperating (excluding depreciation and depletion)
    
    
    69,368
    
    
    
    88,527
    
    
    
    64,779Corporate administration
    
    
    14,010
    
    
    
    12,138
    
    
    
    9,290Depreciation and depletion
    
    
    20,058
    
    
    
    24,101
    
    
    
    17,851Exploration
    
    
    6,701
    
    
    
    3,006
    
    
    
    3,696110,137
    
    
    
    127,772
    
    
    
    95,616Earnings from operations
    
    
    80,879
    
    
    
    134,870
    
    
    
    89,578Other income (expense)Interest and other income
    
    
    9,354
    
    
    
    7,241
    
    
    
    4,021Gain on sale of purchased bullion
    
    
    
    
    
    
    1,664
    
    
    
    Gain (loss) on foreign currency
    
    
    211
    
    
    
    (1,164
    )
    
    
    (933
    )Gain on sale of marketable securities
    
    
    1,391
    
    
    
    8,186
    
    
    
    10,958Decrease (increase) in provision for decline
in value of marketable securities
    
    
    (10,397
    )
    
    
    2,044
    
    
    
    3,834559
    
    
    
    17,971
    
    
    
    17,880Earnings before taxes
    
    
    81,438
    
    
    
    152,841
    
    
    
    107,458Income and mining taxes (note 9(b))
    
    
    30,091
    
    
    
    54,037
    
    
    
    39,223Earnings for the year
    
    $
    51,347
    
    
    $
    98,804
    
    
    $
    68,235Earnings per share (note 10)Basic
    
    $
    0.27
    
    
    $
    0.54
    
    
    $
    0.39Diluted
    
    $
    0.27
    
    
    $
    0.53
    
    
    $
    0.37Weighted average number of
shares outstanding (000s) (note 10)Basic
    
    
    189,723
    
    
    
    183,574
    
    
    
    176,654Diluted
    
    
    193,685
    
    
    
    188,179
    
    
    
    184,246
 The accompanying notes are an integral part of these consolidated financial statements.




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##### 



22

GOLDCORP INC.    CONSOLIDATED STATEMENTS OF RETAINED EARNINGS (DEFICIT) (in thousands of United States dollars)
 Years ended December 31,
    
    2004
    
    
    2003
    
    
    2002Retained earnings (deficit) at beginning of year
    
    $
    63,358
    
    
    $
    14,700
    
    
    $
    (33,936
    )Earnings for the year
    
    
    51,347
    
    
    
    98,804
    
    
    
    68,235Dividends declared on common shares
    
    
    (31,300
    )
    
    
    (50,146
    )
    
    
    (19,626
    )Interest on note receivable from officer
    
    
    
    
    
    
    
    
    
    
    27Retained earnings at end of year
    
    $
    83,405
    
    
    $
    63,358
    
    
    $
    14,700
 The accompanying notes are an integral part of these consolidated financial statements.




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##### 



GOLDCORP INC.     23 CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands of United States dollars)
 Years ended December 31,
    
    2004
    
    
    2003
    
    
    2002Cash provided by (used in)Operating activitiesEarnings for the year
    
    $
    51,347
    
    
    $
    98,804
    
    
    $
    68,235Items not affecting cashDepreciation and depletion
    
    
    20,058
    
    
    
    24,101
    
    
    
    17,851Accretion on closure cost accrual
    
    
    1,329
    
    
    
    1,124
    
    
    
    1,021Gain on sale of purchased bullion
    
    
    
    
    
    
    (1,664
    )
    
    
    Gain on sale of marketable securities
    
    
    (1,391
    )
    
    
    (8,186
    )
    
    
    (10,958
    )Increase (decrease) in provision for decline in
value of marketable securities
    
    
    10,397
    
    
    
    (2,044
    )
    
    
    (3,834
    )Stock option expense
    
    
    5,081
    
    
    
    2,275
    
    
    
    Future income taxes
    
    
    18,599
    
    
    
    4,123
    
    
    
    4,797Reclamation expenditures
    
    
    (744
    )
    
    
    (346
    )
    
    
    (4,454
    )Other
    
    
    (2,881
    )
    
    
    (544
    )
    
    
    (122
    )Change in non-cash operating
working capital (note 12)
    
    
    (48,692
    )
    
    
    (22,477
    )
    
    
    31,604Net cash provided by operating activities
    
    
    53,103
    
    
    
    95,166
    
    
    
    104,140Investing activitiesMining interests
    
    
    (56,125
    )
    
    
    (74,528
    )
    
    
    (26,835
    )Purchase of gold bullion
    
    
    
    
    
    
    (8,160
    )
    
    
    (32,024
    )Proceeds on sale of purchased gold bullion
    
    
    
    
    
    
    45,112
    
    
    
    Purchase of marketable securities
    
    
    (22,594
    )
    
    
    (88,823
    )
    
    
    (201,035
    )Proceeds from sale of marketable securities
    
    
    4,639
    
    
    
    94,134
    
    
    
    216,353Decrease (increase) in reclamation deposits
    
    
    987
    
    
    
    (859
    )
    
    
    (1,733
    )Net cash used in investing activities
    
    
    (73,093
    )
    
    
    (33,124
    )
    
    
    (45,274
    )Financing activitiesIssue of capital stock (note 8)
    
    
    3,520
    
    
    
    26,979
    
    
    
    140,963Dividends paid to common shareholders
    
    
    (53,071
    )
    
    
    (28,375
    )
    
    
    (19,626
    )Repayment of note receivable from officer
    
    
    
    
    
    
    
    
    
    
    2,413Net cash provided by (used in) financing activities
    
    
    (49,551
    )
    
    
    (1,396
    )
    
    
    123,750Effect of exchange rate changes on cash (note 2(k))
    
    
    23,962
    
    
    
    57,475
    
    
    
    113Increase (decrease) in cash and short-term investments
    
    
    (45,579
    )
    
    
    118,121
    
    
    
    182,729Cash and short-term investments at beginning of year
    
    
    378,954
    
    
    
    260,833
    
    
    
    78,104Cash and short-term investments at end of year
    
    $
    333,375
    
    
    $
    378,954
    
    
    $
    260,833
 The accompanying notes are an integral part of these consolidated financial statements.




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##### 



24

GOLDCORP INC.    NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS(in United States dollars, tabular amounts in thousands)  1.

Nature of the Operation
 Goldcorp Inc. is engaged in gold mining and related activities, including exploration,
extraction, processing, and reclamation. Gold is produced from mines in both Canada and the United
States (US). In addition, the Company owns an industrial minerals operation in Western Canada,
which produces sodium sulphate used primarily in the detergent industry.  2.

Significant Accounting Policies
  (a)

Basis of PresentationThe consolidated financial statements of Goldcorp Inc. and its subsidiaries (the Company or Goldcorp) have been prepared by
management in accordance with accounting principles generally accepted in Canada. These policies are consistent with accounting
principles generally accepted in the United States in all material respects except as outlined in Note 14.(b)

Use of EstimatesThe preparation of financial statements in conformity with generally accepted accounting principles requires management to
make estimates and assumptions. The most significant of these relate to the estimation of mineral reserves and the cost of satisfying
reclamation obligations. Actual results could differ from those estimates.(c)

Principles of ConsolidationThe consolidated financial statements include the financial statements of the Company and its subsidiaries. All significant
intercompany balances and transactions have been eliminated on consolidation. The consolidated financial statements are reported
in US dollars.(d)

Revenue RecognitionRevenues from the sale of bullion, concentrate and industrial minerals are recognized when ownership passes to the purchaser at
which time the following conditions are met:
  

persuasive evidence of an arrangement exists;

delivery has occurred under the terms of the arrangement;

the price is fixed or determinable; and

collectability is reasonably assured.
  All sales contracts are with credit-worthy counterparties.(e)

Mining InterestsMining interests represent the capitalized expenditures related to the exploration and development of mineral deposits and related plant and equipment. Capitalized costs are depreciated and depleted using either a unit-of-production method over the
estimated economic life of the mine to which they relate or using the straight-line method over their estimated useful lives,
which generally range from five to fifteen years.The recoverability of the book value of each property is assessed annually for indicators of impairment such as adverse changes to any of the following:
  

estimated recoverable ounces of gold

estimated future commodity prices

estimated expected future operating costs, capital expenditures and reclamation expenditures
  A write-down to fair value is recorded when the expected future cash flow is less than the net book value of the property.Capitalized costs are accounted for as follows:
  

Costs related to property acquisitions are capitalized until it is determined that the property does not contain reserves that are
economically viable. When it is determined that a property is not economically viable the capitalized costs are written-off.

Exploration costs incurred to the date of establishing that a property has reserves which are economically recoverable are
charged to earnings. Further exploration expenditures are capitalized to the property.

Mining expenditures incurred either to develop new ore bodies or to develop mine areas substantially in advance of current production are capitalized. Mine development costs incurred to maintain current production are included in operating expenses.

Upon sale or abandonment, the cost of the property and equipment, and related accumulated depreciation or depletion are
removed from the accounts and any gains or losses thereon are included in operations.




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##### 



GOLDCORP INC.     25  (f)

Reclamation and Closure Cost ObligationsThe Companys mining and exploration activities are subject to various governmental laws and
regulations relating to the protection of the environment. These environmental regulations are
continually changing and generally becoming more restrictive.The Company has made, and intends to make in the future, expenditures to comply with such laws
and regulations. The Company has estimated the future cost of reclamation and closure, including
site rehabilitation and long-term treatment and monitoring costs discounted to net present
value. Such estimates are, however, subject to change based on negotiations with regulatory
authorities, changes in laws and regulations, and changes in estimated discount rate. These
estimates are reviewed annually.The Company records a liability for the estimated future costs associated with legal obligations
relating to the reclamation and closure of its mining properties described above. This amount is
initially recorded at its discounted present value with subsequent annual recognition of an
accretion amount on the discounted liability. An equivalent amount is recorded as an increase to
mining interests and expensed as depreciation and depletion over the useful life of the
property. Changes resulting from revisions to the timing or the amount of the original estimate
of undiscounted cash flows are recognized as an increase or a decrease in the carrying amount of
the liability for reclamation and closure cost obligations, and the related asset retirement
cost is capitalized as part of the carrying amount of the related long-lived asset. Upward
revisions in the amount of undiscounted estimated cash flows are discounted using the current
credit-adjusted risk-free rate. Downward revisions in the amount of undiscounted estimated cash
flows are discounted using the credit-adjusted risk-free rate that existed when the original
liability was recognized.(g)

InventoriesWork-in-process inventories are valued at the lower of average production cost or net
realizable value. Production costs include the cost of raw materials, direct labour, mine-site
overhead expenses and depreciation and depletion of mining interests.Industrial minerals inventories are finished goods valued at the lower of average production
cost or net realizable value.Supplies are valued at the lower of average cost or replacement cost.(h)

Cash and Short-Term InvestmentsCash and short-term investments consist of investment grade government and corporate money
market securities and bank term deposits.(i)

Gold BullionGold bullion is carried at the lower of average cost or market value.(j)

Marketable SecuritiesMarketable securities are accounted for at the lower of their cost or quoted market value. A
write-down of an investment in marketable securities to reflect a decline in value is not reversed
if there is a subsequent increase in value.(k)

Foreign Currency TranslationThe United States dollar is the measurement currency of the Companys operations in the United
States. The Canadian dollar is the measurement currency of the Companys Canadian operations.Unrealized gains and losses due to movements in exchange rates on cash balances held in foreign
currencies are shown separately on the Consolidated Statement of Cash Flows. Each operation
translates foreign currency denominated transactions into its measurement currency using the
rate of exchange in effect at the date of the transaction. Monetary assets and liabilities
denominated in a foreign currency are translated into the measurement currency of the operation
using the year-end rate of exchange giving rise to a gain or loss which is recognized in income
during the current period.For reporting purposes, the Canadian operations are translated into United States dollars using
the current rate method. Under this method, all assets and liabilities are translated at the
year-end rate of exchange and all revenue and expense items are translated at the average rate
of exchange for the year. The resulting translation adjustment is recorded as a separate
component of shareholders equity.(l)

Income and Mining TaxesThe Company uses the asset and liability method of accounting for income taxes. Under the asset
and liability method, future tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases. Future tax assets and
liabilities are measured using enacted or substantively enacted tax rates expected to apply when
the asset is realized or the liability settled. A reduction in respect of the benefit of a
future tax asset (a valuation allowance) is recorded against any future tax asset if it is not
likely to be realized. The effect on future tax assets and liabilities of a change in tax rates
is recognized in income in the period that the tax rate changes.




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##### 



26

GOLDCORP INC.    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(in United States dollars, tabular amounts in
thousands)  (m)

Earnings per ShareBasic earnings per share is calculated by dividing net earnings by the weighted average
number of shares outstanding during the year. The calculation of diluted earnings per share
assumes that outstanding options and warrants that are in-the-money are exercised and the
proceeds are used to repurchase shares of the Company at the average market price of the shares for the period.
The effect is to increase the number of shares used to calculate diluted earnings per
share.(n)

Stock-Based CompensationThe Company applies the fair value method of accounting for all stock option awards. Under
this method the Company recognizes a compensation expense for all stock options awarded to
employees since January 1, 2003, based on the fair value of the options on the date of
grant which is determined by using an option pricing model. The fair value of the options
is expensed over the vesting period of the options. Stock options issued to employees
before January 1, 2003 were accounted for using the settlement method and accordingly, no
compensation expense has been recorded.
  3.

Gold Bullion Inventory
 Total
    
    
    Market
    
    
    UnrealizedOunces
    
    
    Cost
    
    
    Value
    
    
    GainUnsold production at December 31,2004
    
    
    221,220
    
    
    $
    33,895
    
    
    $
    96,363
    
    
    $
    62,4682003
    
    
    20,791
    
    
    $
    3,910
    
    
    $
    8,675
    
    
    $
    4,765
  4.

Inventories
 2004
    
    
    2003Work-in-process
    
    $
    10,539
    
    
    $
    13,343Industrial minerals
    
    
    644
    
    
    
    600Supplies
    
    
    4,146
    
    
    
    3,584$
    15,329
    
    
    $
    17,527
  5.

Mining Interests
 AccumulatedDepreciationCost
    
    
    and Depletion
    
    
    Net2004Mine properties
    
    $
    287,715
    
    
    $
    134,429
    
    
    $
    153,286Plant and equipment
    
    
    223,662
    
    
    
    111,999
    
    
    
    111,663$
    511,377
    
    
    $
    246,428
    
    
    $
    264,9492003Mine properties
    
    $
    223,841
    
    
    $
    110,959
    
    
    $
    112,882Plant and equipment
    
    
    200,152
    
    
    
    105,717
    
    
    
    94,435$
    423,993
    
    
    $
    216,676
    
    
    $
    207,317
 A summary by property of the net book value of plant and equipment and mine properties is as
follows: Mine
    
    
    Plant andProperties
    
    
    Equipment
    
    
    Total 2004
    
    
    Total 2003Canada:Red Lake Mine
    
    $
    135,095
    
    
    $
    107,516
    
    
    $
    242,611
    
    
    $
    186,778Saskatchewan Minerals
    
    
    580
    
    
    
    2,800
    
    
    
    3,380
    
    
    
    3,266Other
    
    
    9,391
    
    
    
    712
    
    
    
    10,103
    
    
    
    9,470145,066
    
    
    
    111,028
    
    
    
    256,094
    
    
    
    199,514United States:Wharf Mine
    
    
    7,262
    
    
    
    635
    
    
    
    7,897
    
    
    
    6,845Other
    
    
    958
    
    
    
    
    
    
    
    958
    
    
    
    9588,220
    
    
    
    635
    
    
    
    8,855
    
    
    
    7,803$
    153,286
    
    
    $
    111,663
    
    
    $
    264,949
    
    
    $
    207,317
 Capitalized expenditures relating to the Red Lake Expansion are not being depreciated. Construction
in progress at December 31, 2004 totalled $61,530,000.




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##### 



GOLDCORP INC.     27  6.

Reclamation and Closure Cost Obligations
 The Companys asset retirement obligations consist of reclamation and closure costs for both
active and inactive mines. The present value of obligations relating to active mines is currently
estimated at $21,204,000 (2003  $18,612,000) reflecting payments for approximately the next 55 years. The present value of obligations relating
to inactive mines is currently estimated at $5,199,000 (2003  $3,238,000) reflecting payments for
approximately the next 35 years. Significant reclamation and closure activities include land
rehabilitation, demolition of buildings and mine facilities, ongoing care and maintenance and other
costs. The liability for reclamation and closure cost obligations at December 31, 2004 is $26,403,000
(2003  $21,850,000). The undiscounted value of this liability is $39,399,000 (2003  $28,472,000).
An inflation rate assumption of 2% has been used. An accretion expense component of $1,329,000
(2003  $1,124,000) has been charged in 2004 to reflect an increase in the carrying amount of the
asset retirement obligation which has been determined using a discount rate of 6.5%. Changes to the
reclamation and closure cost balance during the year are as follows: 2004
    
    
    2003Reclamation and closure cost obligations  January 1
    
    $
    21,850
    
    
    $
    20,171Liabilities settled in the period
    
    
    (744
    )
    
    
    (346
    )Accretion expense
    
    
    1,329
    
    
    
    1,124Revisions in estimated cash flows at 6.5% discount rate
    
    
    3,968
    
    
    
    901Reclamation and closure cost obligations  December 31
    
    $
    26,403
    
    
    $
    21,850
 In relation to these obligations, the Company, at December 31, 2004, had a deposit of $2,187,000
with the Province of Ontario and $2,737,000 with the State of South Dakota, and provided letters of
credit of $18,242,000 to the State of South Dakota for reclamation costs in lieu of cash deposits.
These amounts are representative of fair value.  7.

Commitments
 Goldcorp does not have any unfunded pension liabilities or any guarantees outstanding. In addition,
Goldcorp does not have any off-balance sheet arrangements such as unconsolidated entities. The Company is party to certain operating leases and contracts. Future minimum payments under these
agreements at December 31, 2004 are as follows: 2005
    
    $
    7,0382006
    
    
    6,1652007
    
    
    2,5742008
    
    
    2722009
    
    
    89$
    16,138
 The Company has contractual commitments relating to construction at the Red Lake Mine to be
completed in 2007 of which the remaining amount is currently estimated at $50 million using an US
to Canadian dollar exchange rate of 1.25. The Company also has contractual commitments relating to the proposed acquisition of Wheaton River
Minerals Ltd (refer to Note 15) where upon successful completion of the transaction, advisory fees
of approximately $14 million will be payable to various parties.  8.

Shareholders Equity
 (a)

AuthorizedThe authorized share capital of the Company consists of an unlimited number of common shares.(b)

Equity IssueOn April 30, 2002, the Company issued 8,000,000 Units at a price of US$18.00 per Unit, for
net proceeds of $137,740,000. Each Unit consisted of two common shares (valued at US$8.25
per share) and one-half of one share purchase warrant (valued at US$1.50 per half warrant).
One full share purchase warrant entitles the holder to purchase two common shares at a
total price of US$25.00 (US$12.50 per share) until April 30, 2007.In addition to the warrants issued April 30, 2002, the Company has 3,000,000 share purchase
warrants outstanding, each of which entitles the holder to acquire two common shares, at
any time on or before May 13, 2009, at a total price of C$20.00 (C$10.00 per share).




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##### 



28

GOLDCORP INC.    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(in United States dollars, tabular amounts in thousands)  (c)

Changes in Capital Stock
 2004
    
    
    2003
    
    
    2002Shares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Shares
    
    
    Amount(000s)
    
    
    
    
    
    
    (000s)
    
    
    
    
    
    
    (000s)Common SharesOutstanding at
beginning of year
    
    
    189,274
    
    
    $
    359,717
    
    
    
    182,390
    
    
    $
    332,738
    
    
    
    165,091
    
    
    $
    201,188Issued pursuant to
public offering, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16,000
    
    
    
    128,327Exercise of stock options
    
    
    706
    
    
    
    3,529
    
    
    
    6,884
    
    
    
    26,979
    
    
    
    1,299
    
    
    
    3,223Outstanding at
end of year
    
    
    189,980
    
    
    $
    363,246
    
    
    
    189,274
    
    
    $
    359,717
    
    
    
    182,390
    
    
    $
    332,738Warrants on
Common SharesOutstanding at
beginning of year
    
    
    7,000
    
    
    $
    16,110
    
    
    
    7,000
    
    
    $
    16,110
    
    
    
    3,000
    
    
    $
    4,110Issued pursuant to
public offering, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,000
    
    
    
    12,000Outstanding at
end of year
    
    
    7,000
    
    
    $
    16,110
    
    
    
    7,000
    
    
    $
    16,110
    
    
    
    7,000
    
    
    $
    16,110Total capital stock
    
    
    
    
    
    $
    379,356
    
    
    
    
    
    
    $
    375,827
    
    
    
    
    
    
    $
    348,848
  (d)

Stock Option PlanUnder the Companys stock option plan, the Board of Directors may, at its discretion, grant
options to purchase common shares, which vest over three years and are exercisable over a period
of a maximum of ten years, to directors, officers, employees or consultants of the Company or
its affiliates. Stock appreciation rights may also be granted. All current options expire on or
before December 6, 2014. The maximum number of shares that the Company is currently authorized
to issue under the plan, subsequent to December 31, 2004, is 7,075,000 shares. The stock options
are granted in Canadian dollars. The exchange rate between the Canadian and United States dollar
at December 31, 2004 was 1.202.
 Options
    
    
    Average exercise price(000s)
    
    
    (C$ per share)2004
    
    
    2003
    
    
    2002
    
    
    2004
    
    
    2003
    
    
    2002Outstanding at
beginning of year
    
    
    6,012
    
    
    
    10,890
    
    
    
    8,569
    
    
    $
    12.68
    
    
    $
    6.92
    
    
    $
    4.19Granted
    
    
    1,335
    
    
    
    2,176
    
    
    
    3,687
    
    
    
    16.89
    
    
    
    17.62
    
    
    
    12.26Exercised
    
    
    (706
    )
    
    
    (6,884
    )
    
    
    (1,299
    )
    
    
    (6.64
    )
    
    
    (5.21
    )
    
    
    (3.91
    )Cancelled
    
    
    (497
    )
    
    
    (170
    )
    
    
    (67
    )
    
    
    (16.47
    )
    
    
    (9.64
    )
    
    
    (9.74
    )Outstanding at
end of year
    
    
    6,144
    
    
    
    6,012
    
    
    
    10,890
    
    
    $
    13.98
    
    
    $
    12.68
    
    
    $
    6.92
 Options outstanding
    
    
    Options currently exercisableWeightedWeighted
    
    
    average
    
    
    
    
    
    
    Weightedaverage
    
    
    remaining
    
    
    
    
    
    
    averageNumber
    
    
    exercise
    
    
    term of
    
    
    Number
    
    
    exerciseRange of exercise price (C$)
    
    outstanding
    
    
    price (C$)
    
    
    options
    
    
    exercisable
    
    
    price (C$)(000s)
    
    
    
    
    
    
    (years)
    
    
    (000s)$2.04 to $3.95
    
    
    484
    
    
    $
    3.14
    
    
    
    4.36
    
    
    
    484
    
    
    $
    3.14$4.40 to $8.47
    
    
    119
    
    
    
    5.54
    
    
    
    4.28
    
    
    
    119
    
    
    
    5.54$11.40 to $13.30
    
    
    2,412
    
    
    
    12.24
    
    
    
    7.25
    
    
    
    1,335
    
    
    
    12.27$16.75 to $18.10
    
    
    3,011
    
    
    
    17.22
    
    
    
    9.12
    
    
    
    565
    
    
    
    17.49$19.00 to $23.99
    
    
    118
    
    
    
    19.83
    
    
    
    8.80
    
    
    
    39
    
    
    
    19.83$2.04 to $23.99
    
    
    6,144
    
    
    $
    13.98
    
    
    
    7.91
    
    
    
    2,542
    
    
    $
    11.49




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##### 



GOLDCORP INC.     29 The fair value of the 3,511,600 options granted subsequent to January 1, 2003 has been estimated at
the date of grant using a Black-Scholes option pricing model with the following assumptions:
risk-free interest rate of 4%; dividend yield of 1%; volatility factor of the expected market price
of the Companys common stock of 42% (2003  45%); and a weighted average expected life of the
options of 5 years. The estimated fair value of the options is expensed over the options vesting
period, which is 3 years. The weighted average grant date fair values of options issued in 2004 and
2003 were C$6.29 and C$6.96, respectively. The following is the Companys pro forma earnings for 2004, 2003, and 2002, with the fair value
method applied to all options issued since January 1, 2002 (the Black-Scholes option pricing model
assumptions used for 2002 are consistent with those noted for 2003 and 2004 with the exception of a
volatility factor of 40%): 2004
    
    
    2003
    
    
    2002Earnings for the year
    
    $
    51,347
    
    
    $
    98,804
    
    
    $
    68,235Pro forma net additional compensation expense
related to fair value of stock options issued
    
    
    (1,433
    )
    
    
    (3,923
    )
    
    
    (4,953
    )Pro forma earnings for the year
    
    $
    49,914
    
    
    $
    94,881
    
    
    $
    63,282Pro forma earnings per share for the year  Basic
    
    $
    0.26
    
    
    $
    0.52
    
    
    $
    0.36Pro forma earnings per share for the year  Diluted
    
    $
    0.26
    
    
    $
    0.50
    
    
    $
    0.34
  (e)

Contributed SurplusContributed surplus is increased in connection with the recognition of compensation cost
relating to stock options. Contributed surplus is decreased when those stock options are
exercised.
 2004
    
    
    2003Contributed surplus at beginning of year
    
    $
    2,275
    
    
    
    Add: Stock option expense for the year
    
    
    5,081
    
    
    
    2,275Less: Stock options exercised
    
    
    (9
    )
    
    
    Contributed surplus at end of year
    
    $
    7,347
    
    
    $
    2,275
  (f)

Cumulative Translation AdjustmentThe change in the cumulative translation adjustment represents the net unrealized foreign exchange
gain on translation of the
Canadian dollar denominated accounts of the Canadian operations to US dollars for reporting purposes.(g)

Retained Earnings DeficitEffective December 31, 1997, pursuant to a directors resolution, the accumulated retained earnings
deficit of $70,573,000 was eliminated by an offsetting reduction in contributed surplus.9.

Income and Mining Taxes(a)

Earnings Before TaxesEarnings before taxes by tax jurisdiction is comprised of the following:
 2004
    
    
    2003
    
    
    2002Canada
    
    $
    77,062
    
    
    $
    152,600
    
    
    $
    107,108United States
    
    
    4,376
    
    
    
    241
    
    
    
    350Total
    
    $
    81,438
    
    
    $
    152,841
    
    
    $
    107,458
  (b)

Provision for Income and Mining TaxesThe Company is subject to income and mining taxes in both Canada and the United States. The
provision for income and mining taxes is as follows:
 2004
    
    
    2003
    
    
    2002Income and mining taxesCurrentCanada
    
    $
    13,027
    
    
    $
    49,873
    
    
    $
    34,426United States
    
    
    (1,535
    )
    
    
    41
    
    
    
    FutureCanada
    
    
    18,599
    
    
    
    4,123
    
    
    
    4,797Income and mining tax provision
    
    $
    30,091
    
    
    $
    54,037
    
    
    $
    39,223Income and mining taxes paid
    
    $
    39,584
    
    
    $
    75,875
    
    
    $
    1,564




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##### 



30

GOLDCORP INC.    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(in United States dollars, tabular amounts in thousands) The provision for income and mining taxes differs from the amount that would have
resulted by applying Canadian federal and weighted average provincial statutory income tax rates of
approximately 40% (2003  40%; 2002  41%) to earnings as described in the table below: 2004
    
    
    2003
    
    
    2002Income taxesIncome tax provision calculated using statutory tax rates
    
    $
    32,575
    
    
    $
    61,136
    
    
    $
    44,058Change in corporate income tax rates
    
    
    
    
    
    
    920
    
    
    
    Non-taxable portion of realized capital losses (gains)
    
    
    1,787
    
    
    
    (2,325
    )
    
    
    (3,032
    )Resource allowance
    
    
    (9,009
    )
    
    
    (13,784
    )
    
    
    (10,312
    )Mining duties deduction
    
    
    (1,468
    )
    
    
    (3,266
    )
    
    
    Non-deductible stock option expense
    
    
    2,016
    
    
    
    904
    
    
    
    Foreign earnings subject to different tax rates
    
    
    (191
    )
    
    
    (28
    )
    
    
    (51
    )Provincial mining taxes
    
    
    7,460
    
    
    
    11,855
    
    
    
    9,591Settlement of prior years tax issues
    
    
    (1,598
    )
    
    
    (1,414
    )
    
    
    Realization of tax asset not previously recognized
    
    
    (920
    )
    
    
    
    
    
    
    (1,045
    )Reduction in valuation allowance
    
    
    
    
    
    
    (82
    )
    
    
    (216
    )Other
    
    
    (561
    )
    
    
    121
    
    
    
    230Consolidated income and mining tax provision
    
    $
    30,091
    
    
    $
    54,037
    
    
    $
    39,223
  (c)

Future Tax BalancesThe tax effects of temporary differences that give rise to future income tax assets and future
income tax liabilities at December 31, 2004 and 2003 are as follows:
 2004
    
    
    2003Canada:Future tax liabilities  current:Gold bullion
    
    $
    3,171
    
    
    $
    199Inventories
    
    
    421
    
    
    
    556Future tax liabilities  long-term:Mining interests
    
    
    76,787
    
    
    
    53,19480,379
    
    
    
    53,949Future tax assets  current:Marketable securities
    
    
    2,207
    
    
    
    25Accounts payable and accrued liabilities
    
    
    236
    
    
    
    669Future tax assets  long-term:Future mining taxes
    
    
    4,117
    
    
    
    4,138Provision for reclamation and closure costs
    
    
    3,494
    
    
    
    1,911Non capital loss carry forwards
    
    
    111
    
    
    
    226Cumulative eligible capital balance
    
    
    976
    
    
    
    973Share issue costs
    
    
    1,231
    
    
    
    1,75512,372
    
    
    
    9,697Valuation allowance
    
    
    (3,752
    )
    
    
    (3,609
    )8,620
    
    
    
    6,088Total Canada
    
    $
    71,759
    
    
    $
    47,861




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##### 



GOLDCORP INC.     31  (c)

Future Tax Balances (continued)
 2004
    
    
    2003United States:Future tax liability  current:Inventories
    
    $
    962
    
    
    $
    892Future tax liability  long-term:Mining interests
    
    
    699
    
    
    
    3071,661
    
    
    
    1,199Future tax assets  current:Accounts payable and accrued liabilities
    
    
    779
    
    
    
    611Future tax assets  long term:Net operating loss carry forwards
    
    
    2,093
    
    
    
    2,918Mining interests
    
    
    762
    
    
    
    367Alternative minimum tax credit carry forwards
    
    
    6,307
    
    
    
    6,0839,941
    
    
    
    9,979Valuation allowance
    
    
    (8,280
    )
    
    
    (8,780
    )1,661
    
    
    
    1,199Total United States
    
    $
    
    
    
    $
    Total net future tax liability
    
    $
    71,759
    
    
    $
    47,861
  (d)

Tax Loss Carry ForwardsSubsidiaries of the Company have non capital loss carry forwards of approximately $356,000
available for Canadian income tax purposes in certain circumstances to reduce taxable income.
These losses expire from 2005 to 2011. The benefit of these tax loss carry forwards has not been
recognized for accounting purposes.A subsidiary of the Company has net operating loss carry forwards of approximately $8,849,000
available for United States income tax purposes to reduce taxable income. These losses expire
from 2021 to 2023. The benefit of these tax loss carry forwards has not been recognized for
accounting purposes.10.

Earnings per Share
 The following table sets forth the computation of diluted earnings per share: 2004
    
    
    2003
    
    
    2002Earnings available to common shareholders
    
    $
    51,347
    
    
    $
    98,804
    
    
    $
    68,235Divided by:Weighted average shares outstanding (000s)
    
    
    189,723
    
    
    
    183,574
    
    
    
    176,654Effect of dilutive securities:Employee stock options and warrants
    
    
    3,962
    
    
    
    4,605
    
    
    
    7,592Adjusted weighted average shares and assumed conversions
    
    
    193,685
    
    
    
    188,179
    
    
    
    184,246Basic earnings per share
    
    $
    0.27
    
    
    $
    0.54
    
    
    $
    0.39Diluted earnings per share
    
    $
    0.27
    
    
    $
    0.53
    
    
    $
    0.37
 The following lists the number of stock options and warrants excluded from the computation of
diluted earnings per share because the exercise prices exceeded the average fair market value of
the common shares for the year, and which were therefore not dilutive: 2004
    
    
    2003
    
    
    2002Stock options and warrants (000s)
    
    
    1,804
    
    
    
    34
    
    
    
    5,392




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##### 



32

GOLDCORP INC.    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(in United States dollars, tabular amounts in thousands)  11.

Segmented Information
 The Company has two reportable industry segments: gold mining in Canada and the United States
and industrial minerals mining and processing in Canada. The Companys gold mines include the Red
Lake Mine located in northern Ontario and the Wharf Mine located in South Dakota. The industrial
mineral operation, Saskatchewan Minerals, is located in Saskatchewan and produces sodium sulphate
primarily for the detergent industry. Revenues from gold operations are attributed based on the
location of the operation and revenues from industrial mineral operations are based on the location
of the customer. 2004
    
    
    2003
    
    
    2002GoldRevenues:Canada
    
    $
    152,198
    
    
    $
    224,033
    
    
    $
    144,856United States
    
    
    26,121
    
    
    
    24,921
    
    
    
    26,352178,319
    
    
    
    248,954
    
    
    
    171,208Depreciation and depletion
    
    
    19,713
    
    
    
    23,828
    
    
    
    17,613Accretion
    
    
    1,199
    
    
    
    1,113
    
    
    
    1,012Operating income before taxes
    
    
    94,090
    
    
    
    145,340
    
    
    
    96,183Total assets
    
    
    325,522
    
    
    
    241,555
    
    
    
    166,005Expenditures for mining interests
    
    
    55,952
    
    
    
    74,086
    
    
    
    26,358Industrial MineralsRevenues:Canada
    
    $
    7,673
    
    
    $
    7,562
    
    
    $
    8,372United States
    
    
    5,024
    
    
    
    6,126
    
    
    
    5,61412,697
    
    
    
    13,688
    
    
    
    13,986Depreciation and depletion
    
    
    345
    
    
    
    273
    
    
    
    238Accretion
    
    
    130
    
    
    
    11
    
    
    
    9Operating income before taxes
    
    
    799
    
    
    
    1,668
    
    
    
    2,685Total assets
    
    
    6,998
    
    
    
    6,352
    
    
    
    5,211Expenditures for mining interests
    
    
    173
    
    
    
    442
    
    
    
    477TotalRevenues:Canada
    
    $
    159,871
    
    
    $
    231,595
    
    
    $
    153,228United States
    
    
    31,145
    
    
    
    31,047
    
    
    
    31,966191,016
    
    
    
    262,642
    
    
    
    185,194Depreciation and depletion
    
    
    20,058
    
    
    
    24,101
    
    
    
    17,851Accretion
    
    
    1,329
    
    
    
    1,124
    
    
    
    1,021Operating income before taxes
    
    
    94,889
    
    
    
    147,008
    
    
    
    98,868Total assets
    
    
    332,520
    
    
    
    247,907
    
    
    
    171,216Expenditures for mining interests
    
    
    56,125
    
    
    
    74,528
    
    
    
    26,835Reconciliation of Reportable Segment ItemsOperating income from reportable segments before taxes
    
    $
    94,889
    
    
    $
    147,008
    
    
    $
    98,868Gain on sale of purchased bullion
    
    
    
    
    
    
    1,664
    
    
    
    Gain on marketable securities
    
    
    1,391
    
    
    
    8,186
    
    
    
    10,958Decrease (increase) in provision for decline in
marketable securities
    
    
    (10,397
    )
    
    
    2,044
    
    
    
    3,834Interest and other income
    
    
    9,354
    
    
    
    7,241
    
    
    
    4,021Gain (loss) on foreign currency
    
    
    211
    
    
    
    (1,164
    )
    
    
    (933
    )Corporate expenses
    
    
    (14,010
    )
    
    
    (12,138
    )
    
    
    (9,290
    )Earnings before taxes
    
    $
    81,438
    
    
    $
    152,841
    
    
    $
    107,458Total assets from reportable segments
    
    $
    332,520
    
    
    $
    247,907
    
    
    $
    171,216Corporate and other
    
    
    368,998
    
    
    
    390,616
    
    
    
    286,533Total assets
    
    $
    701,518
    
    
    $
    638,523
    
    
    $
    457,749




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##### 



GOLDCORP INC.     33  12.

Change in Non-Cash Operating Working Capital
 2004
    
    
    2003
    
    
    2002Decrease (increase) in current assets:Gold bullion
    
    $
    (27,986
    )
    
    $
    8,122
    
    
    $
    (6,940
    )Accounts receivable
    
    
    2,377
    
    
    
    (4,882
    )
    
    
    (113
    )Inventories
    
    
    9,710
    
    
    
    (3,825
    )
    
    
    1,327Prepaid expenses
    
    
    (13
    )
    
    
    (53
    )
    
    
    (221
    )Increase (decrease) in current liabilities:Accounts payable
    
    
    656
    
    
    
    10
    
    
    
    2,692Accrued liabilities
    
    
    (5,646
    )
    
    
    4,110
    
    
    
    385Taxes payable
    
    
    (27,790
    )
    
    
    (25,959
    )
    
    
    34,474$
    (48,692
    )
    
    $
    (22,477
    )
    
    $
    31,604
  13.

Fair Value of Financial Instruments
 At December 31, 2004 and 2003, the carrying amounts of cash and short-term investments,
accounts receivable, accounts payable and accrued liabilities approximate their fair values due to
their short term nature. Goldcorp had no outstanding derivative financial instruments related to
future gold production at December 31, 2004 and 2003.  14.

Reconciliation to United States Generally Accepted Accounting Principles
 Reconciliation of earnings determined in accordance with generally accepted accounting
principles in Canada (Canadian GAAP) to earnings determined under accounting principles which are
generally accepted in the United States (US GAAP) is as follows: 2004
    
    
    2003
    
    
    2002(restated (g))Earnings for the year as reported under Canadian GAAP
    
    $
    51,347
    
    
    $
    98,804
    
    
    $
    68,235FAS 143 cumulative adjustment (b)
    
    
    
    
    
    
    (1,021
    )
    
    
    (2,592
    )Effect of substantively enacted rates on income taxes (g)
    
    
    (1,468
    )
    
    
    (3,266
    )
    
    
    Earnings for the year in accordance with US GAAP
    
    
    49,879
    
    
    
    94,517
    
    
    
    65,643Unrealized gains (losses) on securities, net of
reclassification adjustment (a)
    
    
    (1,317
    )
    
    
    4,781
    
    
    
    3,042Cumulative translation adjustment
    
    
    41,459
    
    
    
    80,909
    
    
    
    383Comprehensive income for the year under US GAAP (f)
    
    $
    90,021
    
    
    $
    180,207
    
    
    $
    69,068Earnings per share in accordance with US GAAPBasic
    
    $
    0.26
    
    
    $
    0.51
    
    
    $
    0.37Diluted
    
    $
    0.26
    
    
    $
    0.50
    
    
    $
    0.36
 Differences between Canadian and US GAAP, as they affect the Companys financial statements, are as follows:  (a)

Under US GAAP (FAS 115), the Companys investments in securities would be classified as available-for-sale securities and
carried at fair value. The unrealized holding gains at December 31, 2004 on available-for-sale securities are not recognized
under Canadian accounting principles, but are recognized under United States accounting principles as a component of comprehensive
income and reported as a net amount in a separate component of shareholders equity until realized. The amounts recorded in
comprehensive income are shown net of tax expense (recovery) of
($329,000) (2003  $1,195,000; 2002  $809,000).(b)

On January 1, 2003, the Company adopted FAS 143, Accounting for Asset Retirement Obligations which is consistent with
the Canadian standard, however, under US GAAP, prior periods are not restated and the cumulative effect of the adoption of the
standard is recorded in the period of adoption with the effect for 2003 being a decrease in earnings of $1,021,000 ($0.01
per share).(c)

United States accounting principles do not allow for the use of contributed surplus to eliminate a deficit.(d)

Under US GAAP, the renunciation of tax deductions to holders of flow-through shares is treated as a future tax expense
rather than as a cost of issuing equity as required by Canadian accounting principles.(e)

Under US GAAP a proportionate amount of the cumulative translation adjustment account is not recognized in earnings when
there is a reduction in the Companys net investment in a subsidiary as a result of dividend distributions.(f)

Under US GAAP, FAS 130, Reporting Comprehensive Income establishes rules for the reporting and display of comprehensive
income and its components. Comprehensive income is net income, plus certain other items that are recorded directly to
shareholders equity such as foreign currency translation adjustments and unrealized gains (losses) on marketable securities.




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##### 



34

GOLDCORP INC.    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(in United States dollars, tabular amounts in thousands)  (g)

In 2003, certain changes to income tax legislation affecting mining companies became
law; however, the enabling regulations which quantify the deduction for mining taxes paid
permitted by this change in legislation (which is considered to substantively enacted for
Canadian GAAP purposes) had not yet received the required approval to be considered
enacted for US GAAP purposes. Consequently for US GAAP purposes the 2003 results have been restated to remove the benefit
accrued for the deduction for income tax purposes of actual provincial and other Crown
royalties and mining taxes paid as at December 31, 2003. The benefits of this change in
legislation will be recognized for US GAAP purposes when the approval for the amendments to
the regulations has been given. The net effect of the restatement is to increase the tax
provision for 2003 by an amount of $3,266,000. These legislative changes still remained in
draft at December 31, 2004, hence the additional GAAP difference for 2004 was $1,468,000.(h)

Shareholders equity determined in accordance with Canadian GAAP is reconciled to
shareholders equity in accordance with US GAAP as follows:
 As at December 31,
    
    2004
    
    
    2003
    
    
    2002(restated (g))Capital stockIn accordance with Canadian GAAP
    
    $
    379,356
    
    
    $
    375,827
    
    
    $
    348,848Renunciation of tax deductions on flow-through shares (d)
    
    
    1,281
    
    
    
    1,281
    
    
    
    1,281In accordance with US GAAP
    
    
    380,637
    
    
    
    377,108
    
    
    
    350,129Accumulated Other Comprehensive IncomeCumulative translation adjustmentIn accordance with Canadian GAAP
    
    
    107,741
    
    
    
    66,282
    
    
    
    (14,627
    )Realization of cumulative translation adjustment (e)
    
    
    3,371
    
    
    
    3,371
    
    
    
    3,371In accordance with US GAAP
    
    
    111,112
    
    
    
    69,653
    
    
    
    (11,256
    )Unrealized gain on available-for-sale securitiesIn accordance with Canadian GAAP
    
    
    
    
    
    
    
    
    
    
    Unrealized holding gains arising during the year,
net of taxes of $1,905,000 (2003  $4,002,000, 2002 
$3,915,000)
    
    
    7,619
    
    
    
    16,007
    
    
    
    14,728Reclassification adjustments for gains recorded in earnings,
net of taxes of $278,000 (2003  $2,046,000, 2002 
$3,106,000) (a)
    
    
    (1,113
    )
    
    
    (8,184
    )
    
    
    (11,686
    )In accordance with US GAAP
    
    
    6,506
    
    
    
    7,823
    
    
    
    3,042Total Accumulated Other Comprehensive Income
    
    
    117,618
    
    
    
    77,476
    
    
    
    (8,214
    )Contributed surplusIn accordance with Canadian GAAP
    
    
    7,347
    
    
    
    2,275
    
    
    
    Elimination of deficit with offsetting reduction to
contributed surplus (c)
    
    
    70,573
    
    
    
    70,573
    
    
    
    70,573Adjusted reduction to contributed surplus resulting from
the amalgamation with CSA Management Inc.
    
    
    (56,276
    )
    
    
    (56,276
    )
    
    
    (56,276
    )In accordance with US GAAP
    
    
    21,644
    
    
    
    16,572
    
    
    
    14,297Retained earningsIn accordance with Canadian GAAP
    
    
    83,405
    
    
    
    63,358
    
    
    
    14,700Realization of cumulative translation adjustment (e)
    
    
    (3,371
    )
    
    
    (3,371
    )
    
    
    (3,371
    )FAS 143 cumulative adjustment (b)
    
    
    
    
    
    
    
    
    
    
    1,021Elimination of deficit with offsetting reduction to
contributed surplus (c)
    
    
    (70,573
    )
    
    
    (70,573
    )
    
    
    (70,573
    )Adjusted reduction to contributed surplus resulting from
the amalgamation with CSA Management Inc.
    
    
    56,276
    
    
    
    56,276
    
    
    
    56,276Renunciation of tax deductions on flow-through shares (d)
    
    
    (1,281
    )
    
    
    (1,281
    )
    
    
    (1,281
    )Effect of substantively enacted rates on income taxes (g)
    
    
    (4,734
    )
    
    
    (3,266
    )
    
    
    In accordance with US GAAP
    
    
    59,722
    
    
    
    41,143
    
    
    
    (3,228
    )Shareholders equityIn accordance with Canadian GAAP
    
    $
    577,849
    
    
    $
    507,742
    
    
    $
    348,921In accordance with US GAAP
    
    $
    579,621
    
    
    $
    512,299
    
    
    $
    352,984




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##### 



GOLDCORP INC.     35  (i)

Stock optionsThe Company has a stock-based employee compensation plan which is described more fully in Note
8(d). Prior to 2003, the Company accounted for those plans under the recognition and measurement
provisions of APB Opinion No. 25, Accounting for Stock Issued to Employees, and related
Interpretations. No stock-based employee compensation cost was reflected in 2002 net income, as
all options granted under those plans had an exercise price equal to the market value of the
underlying common stock on the date of grant. Effective January 1, 2003, the Company adopted the
fair value recognition provisions of FAS 123, Accounting for Stock-Based Compensation,
prospectively to all employee awards granted, modified, or settled after January 1, 2003. Awards
under the Companys plans vest over three years. Therefore, the cost related to stock-based
employee compensation included in the determination of net income for 2004 and 2003 is less than
that which would have been recognized if the fair value based method had been applied to all
awards since the original effective date of FAS 123. A table has been provided to illustrate the
effect on earnings and earnings per share if the fair value based method had been applied to all
outstanding and unvested awards in each period.The fair value of these options has been estimated at the date of grant using a Black-Scholes
option pricing model with the following assumptions for 2004, 2003, and 2002, respectively:
risk-free interest rate of 4%, for each year; dividend yield of 1% for each year; volatility
factors of the expected market price of the Companys common stock of 42%, 45%, and 40%,
respectively; and a weighted average expected life of the options of 5 years.The weighted average grant date fair values of options issued in 2004, 2003 and 2002 were
C$6.29, C$6.96, and C$4.84, respectively. For purposes of pro forma disclosures, the estimated
fair value of the options is expensed over the options vesting period, which is 3 years. The
following are the Companys pro forma earnings in accordance with United States accounting principles:
 2004
    
    
    2003
    
    
    2002(restated (g))Earnings for the year, US GAAP
    
    $
    49,879
    
    
    $
    94,517
    
    
    $
    65,643Deduct: Unrecorded stock-based employee compensation expense
determined under fair value based method for all awards,
net of related tax effects
    
    
    (1,480
    )
    
    
    (4,186
    )
    
    
    (5,820
    )Pro forma earnings
    
    $
    48,399
    
    
    $
    90,331
    
    
    $
    59,823Earnings per share, US GAAPBasic  as reported
    
    $
    0.26
    
    
    $
    0.51
    
    
    $
    0.37Basic  pro forma
    
    $
    0.26
    
    
    $
    0.49
    
    
    $
    0.34Diluted  as reported
    
    $
    0.26
    
    
    $
    0.50
    
    
    $
    0.36Diluted  pro forma
    
    $
    0.25
    
    
    $
    0.48
    
    
    $
    0.32
  (j)

Impact of Recent United States Accounting PronouncementsRecently issued United States accounting pronouncements have been outlined below. Goldcorp
believes the new standards issued by the U.S. Financial Accounting Standards Board (FASB) will
not affect the Company.In November 2004, the FASB issued FAS 151 which clarifies the accounting for abnormal amounts of
idle facility expense, freight, handling costs and wasted material as they relate to inventory
costing and requires these items to be recognized as current period expenses. Additionally, the
allocation of fixed production overheads to the cost of inventory should be based on the normal
capacity of the production facilities. FAS 151 is effective for inventory costs incurred during
fiscal years beginning after June 15, 2005. The Company does not believe that the application of
FAS 151 will have an impact on the consolidated financial statements under US GAAP.In December 2004, the FASB issued FAS 153 which deals with the accounting for the exchanges of
nonmonetary assets and is an




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36

GOLDCORP INC.    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(in United States dollars, tabular amounts in thousands)  amendment of APB Opinion 29. FAS 153 eliminates the exception from using fair market value
for nonmonetary exchanges of similar productive assets and replaces it with a general exception
for exchanges of nonmonetary assets that do not have commercial substance, as defined. FAS 153
is effective for nonmonetary asset exchanges occurring in fiscal periods beginning after June
15, 2005. The Company does not believe that the application of FAS 153 will have an impact on
the consolidated financial statements, under US GAAP.In December 2004, FASB Statement No. 123 (revised), Share-based Payment was issued. This
Statement requires an entity to recognize the grant-date fair value of stock options and other
equity-based compensation issued to employees in the income statement. FASB 123 (revised)
eliminates the ability to account for share-based compensation transactions using the intrinsic
value method in APB Opinion No. 25. The Company, effective January 01, 2003, adopted FASB
Statement 123, Accounting for Stock-based Compensation as amended by FASB Statement 148,
Accounting for Stock-based Compensation  Transition and Disclosure, and will adopt FASB No.
123 (revised) in 2006 in accordance with the appropriate transition options and adoption period
prescribed in the statement. Adoption of this standard is not expected to have an impact on the
consolidated financial statements.
  15.

Subsequent Events
 On December 6, 2004, Goldcorp and Wheaton River Minerals Ltd. (Wheaton) issued a joint press
release announcing a proposed transaction which provided for Goldcorp to make a friendly take-over
bid for Wheaton on the basis of one Goldcorp share for every four Wheaton shares. On December 29,
2004, Goldcorp mailed the Goldcorp Take-over Bid Circular to the Wheaton shareholders. On December 16, 2004, Glamis Gold Limited publicly announced its intention to make a hostile
take-over bid for Goldcorp. On January 7, 2005, the Glamis Bid Circular was mailed to Goldcorp
shareholders. On February 8, 2005, Goldcorp announced a special US$0.50 per share cash dividend would be payable
to existing Goldcorp shareholders should shareholders approve the Wheaton acquisition or Goldcorps
takeover bid. The payment of a special dividend would result in an adjustment to the exchange ratio
of Goldcorps outstanding warrants  an increase in entitlement from 2.0 to 2.08 Goldcorp shares
per warrant. On February 10, 2005, at the special meeting of shareholders, approximately 65% of Goldcorp
shareholders who voted were in favour of approval of the issuance of additional Goldcorp common
shares to effect the acquisition of Wheaton. Following the vote, Glamis publicly stated that they
would allow their competing bid for Goldcorp to expire. As of February 14, 2005, approximately 70% of the outstanding Wheaton common shares (403,165,952
shares) have been tendered to Goldcorps offer. This satisfied the minimum two-thirds bid
requirement under the terms of the offer to acquire Wheaton. On the same day, Goldcorp extended the
offer expiry date to February 28, 2005 to give remaining Wheaton shareholders more time to tender
their shares. With conditions met, the special US$0.50 per share dividend, totaling approximately
$95 million, is payable to shareholders of record on February 16, 2005 and will be paid on February
28, 2005. Costs incurred with respect to the Wheaton acquisition as of December 31, 2004, have been recorded
on the balance sheet under Deferred charges.




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##### 



DIRECTORS David R. Beatty,o.b.e.(4)  

Resident of Toronto, Ontario

Chair and Chief Executive Officer of Beatinvest Limited, an Investment company. He is
currently Managing Director of the Canadian Coalition for Good Governance and Professor of
Strategy and Director of the Clarkson Centre for Business Ethics at the University of
Toronto. He serves on the boards of the Bank of Montreal, Inmet Mining, First Service and
Thistle Mining.
He was previously Chair and Chief Executive Officer of Old Canada Corporation.

Director of Goldcorp and its predecessor companies since 1994.
 Ronald M. Goldsack(1)  

Resident of Toronto, Ontario

He is the President of Pondfield Capital Corporation Inc., an
independent investment consultant company in corporate
acquisitions, mergers, takeovers and valuations.

Director of Goldcorp since 2003.
 Stuart R. Horne  

Resident of Caledon, Ontario

President of Tombill Mines Ltd.

Director of Goldcorp since 2000. He was a director of CSA
Management Inc. from 1985 to 2000.
 James P. Hutch,p.eng.(4)  

Resident of Saskatoon, Saskatchewan

Engineer. He is President of Hutchtech Inc., an engineering
consulting firm, for the past nine years. He is past President and
Chief Executive Officer, and past Chair of the Saskatchewan
Research Council. He has held senior executive and leadership
positions in government, and the mining and manufacturing
industries. He chairs and is a member of boards of directors of
a number of advanced technology companies.

Director of Goldcorp and its predecessor companies since 1998.
 Brian W. Jones(1)(2)(3)  

Resident of St. Louis, Missouri, USA

President and Chief Executive Officer of New Heights
International Inc., an investment holding company. He is a
Director of several corporations.

Director of Goldcorp and its predecessor companies since 1990.
 Robert R. McEwen  

Resident of Toronto, Ontario

Chairman and Chief Executive Officer.

He has been a Director of Goldcorp and its predecessor
companies since 1986. He is also Chair, Chief Executive Officer
and a Director of Lexam Explorations Inc. He was previously
Chair, Chief Executive Officer and a Director of CSA
Management Inc.
 Dr. Donald R.M. Quick(2)(3)(4)  

Resident of Hamilton, Ontario

He is a Doctor of Chiropractic and owned and operated the East
Hamilton Chiropractic Clinic from 1977  2002. Director of
Goldcorp since 2000. He was a director of CSA Management Inc.
from 1996 to 2000.
 Michael L. Stein(1)(2)(3)  

Resident of Toronto, Ontario

He is the Chair and Chief Executive Officer of the MPI Group,
a private investment company. He is also Executive Chair of
CAP REIT. Previously, Chair and Chief Executive Officer of
Canada Apartment Communities Inc. and Canadian Apartment
Management Inc.

Director of Goldcorp since 2000. He was a director of CSA
Management Inc. from 1994 to 2000.
   (1)
    
    Member of Audit Committee.(2)
    
    Member of the Nominating & Corporate Governance Committee.(3)
    
    Member of the Compensation Committee.(4)
    
    Member of the Health, Safety & Environment Committee.
 OFFICERS Robert R. McEwenChairman and Chief Executive Officer Gilles FilionVice President, Exploration John A. BegemanVice President, Western Operations Mike HoffmanVice President, Projects Brad J. BolandVice President, Finance R. Gregory LaingVice President, Legal Perry Y. IngCorporate Controller MINE MANAGERS John A. BegemanVice President, Western Operations  Wharf Mine Steve HodgsonGeneral Manager  Saskatchewan Minerals Claude LemassonGeneral Manager  Red Lake Mine




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Corporate Office
145 King Street West, Suite 2700
Toronto, Ontario, Canada M5H 1J8 Tel:(416) 865-0326Fax:(416) 361-5741Email:info@goldcorp.comWebsite:www.goldcorp.com Investor Relations Enquiries
(800) 813-1412 (Canada and United States) Listings
Common Shares (NYSE LOGO)
    
    Trading Symbol: GG
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    Trading Symbol: G
 Warrants (TSX LOGO)
    
    Trading Symbol: G.WT
(Expiry May 13, 2009)Trading Symbol: G.WT.U
(Expiry April 30, 2007)
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