-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Incl3nlhSDHVOqtWz0ETytfR6Am1SRYVpFQSSkbO+FIHclIatMIzNon1CSy9qNEK fJtH5FCsECDkPkn6ATZyyA== 0000950123-00-002502.txt : 20000322 0000950123-00-002502.hdr.sgml : 20000322 ACCESSION NUMBER: 0000950123-00-002502 CONFORMED SUBMISSION TYPE: 424B3 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20000321 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GOLDMAN SACHS GROUP INC CENTRAL INDEX KEY: 0000886982 STANDARD INDUSTRIAL CLASSIFICATION: SECURITY BROKERS, DEALERS & FLOTATION COMPANIES [6211] IRS NUMBER: 133501777 STATE OF INCORPORATION: DE FISCAL YEAR END: 1126 FILING VALUES: FORM TYPE: 424B3 SEC ACT: SEC FILE NUMBER: 333-75213 FILM NUMBER: 574688 BUSINESS ADDRESS: STREET 1: 85 BROAD ST CITY: NEW YORK STATE: NY ZIP: 10004 BUSINESS PHONE: 2129021000 MAIL ADDRESS: STREET 1: 85 BROAD ST CITY: NEW YORK STATE: NY ZIP: 10004 424B3 1 SUPPLEMENT A TO PROSPECTUS RE: 6.65% NOTES 1 Filed Pursuant to Rule 424(b)(3) Registration Statement No. 333-75213 Prospectus Supplement A to Prospectus dated February 16, 2000 THE GOLDMAN SACHS GROUP, INC. 6.65% Notes due 2009 [GOLDMAN SACHS LOGO] ------------------------ You should read this prospectus supplement, which describes the first quarter earnings reported by Goldman Sachs, in conjunction with the prospectus dated February 16, 2000. See "Risk Factors" beginning on page 10 of the prospectus dated February 16, 2000 to read about factors you should consider before investing in the notes. ------------------------ NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER REGULATORY BODY HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS SUPPLEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. ------------------------ Goldman, Sachs & Co., a subsidiary of Goldman Sachs, will and other affiliates of Goldman Sachs may use this prospectus supplement in connection with offers and sales of the notes in market-making transactions. GOLDMAN, SACHS & CO. ------------------------ Prospectus Supplement dated March 21, 2000. Page 1 of 5 2 RECENT DEVELOPMENTS On March 21, 2000, The Goldman Sachs Group, Inc. reported net earnings of $887 million, or $1.76 per diluted share, for its fiscal first quarter ended February 25, 2000. BUSINESS SEGMENTS GLOBAL CAPITAL MARKETS Net revenues in Global Capital Markets, which includes Investment Banking and Trading and Principal Investments, were $3.3 billion, a 30% increase from the prior quarter and 47% above last year's first quarter. INVESTMENT BANKING. Investment Banking generated net revenues of $1.2 billion, a 5% decrease from the record prior quarter and 37% above last year's first quarter. Underwriting revenues increased significantly over the same period in 1999 as strong investor demand in global equity markets continued to create a favorable environment for new issue activity. Net revenues in the Financial Advisory business increased 12% over the same period in 1999, resulting from an active global mergers and acquisitions market and an increase in the number of large transactions. Net revenue growth was particularly strong in the high technology and communications, media and entertainment sectors as compared with the first quarter of 1999. Net revenues increased in all major regions compared to the first quarter of 1999. TRADING AND PRINCIPAL INVESTMENTS. Net revenues in Trading and Principal Investments were $2.1 billion for the quarter, significantly above both the fourth quarter of 1999 and last year's first quarter. FICC net revenues increased 16% compared to the first quarter of 1999, primarily due to increased customer activity in fixed income derivatives, partially offset by a reduction in net revenues from Goldman Sachs' government bond business. Net revenues in Equities increased substantially over the same 1999 period, primarily due to favorable conditions in global equity markets that resulted in higher transaction volumes in Goldman Sachs' global shares businesses, particularly in Europe, and increased customer flow in equity derivatives. Net revenues in Principal Investments increased substantially over the same 1999 period, primarily due to mark-to-market gains on certain of Goldman Sachs' merchant banking investments in the high technology and telecommunications sectors. ASSET MANAGEMENT AND SECURITIES SERVICES Net revenues in Asset Management and Securities Services were $1.2 billion, an increase of 27% over the fourth quarter and 59% above the same prior year period. Asset Management revenues increased 51% over last year's first quarter, primarily reflecting a 33% increase in average assets under management as well as favorable changes in the composition of assets managed. Securities Services net revenues were 15% higher than the same 1999 period, primarily due to growth in Goldman Sachs' prime brokerage business and increased customer balances in securities lending and margin lending. Commissions nearly doubled compared to the same prior year period as healthy global equity markets led worldwide transaction volumes to record levels. Revenues from the increased share of gains from Goldman Sachs' merchant banking funds also contributed to the growth in Commissions. EXPENSES Operating expenses were $3.0 billion for the quarter. The ratio of compensation and benefits to net revenues was 50% for the first quarter of 2000. Non-compensation-related expenses rose 23% compared to the same period in 1999, primarily due to costs associated with higher employment levels, global expansion and growth in business activity. Goldman Sachs' effective tax rate for the first quarter was 40%. Page 2 of 5 3 CAPITAL As of February 25, 2000, total capital was $33.8 billion, consisting of $11.1 billion in stockholders' equity and $22.7 billion in long-term debt. Book value per share was $22.90, based on common shares outstanding, including restricted stock units granted to employees with no future service requirements, of 484,613,335 at period end. DIVIDEND On March 20, 2000, the Board of Directors of The Goldman Sachs Group, Inc. declared a dividend of $0.12 per share to be paid on May 25, 2000, to voting and nonvoting common shareholders of record on April 24, 2000. SHARE REPURCHASE PROGRAM On March 20, 2000, the Board of Directors approved a share repurchase program authorizing the repurchase of up to 15 million shares of Goldman Sachs' common stock. The repurchase program will be effected from time to time, depending on market conditions, through open market purchases and privately negotiated transactions. Page 3 of 5 4 THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES BUSINESS SEGMENT NET REVENUES (unaudited) ($ in millions)
THREE MONTHS ENDED CHANGE FROM ------------------------------------------ --------------------------- FEBRUARY 25, NOVEMBER 26, FEBRUARY 26, NOVEMBER 26, FEBRUARY 26, 2000 1999 1999 1999 1999 ------------ ------------ ------------ ------------ ------------ Global Capital Markets Financial Advisory....................... $ 583 $ 622 $ 522 (6)% 12% Underwriting............................. 653 683 380 (4) 72 ------ ------ ------ Investment Banking....................... $1,236 $1,305 $ 902 (5) 37 ------ ------ ------ FICC..................................... $1,016 $ 414 $ 876 145 16 Equities................................. 858 430 455 100 89 Principal Investments.................... 214 407 26 (47) N.M. ------ ------ ------ Trading and Principal Investments........ $2,088 $1,251 $1,357 67 54 ------ ------ ------ Total Global Capital Markets............... $3,324 $2,556 $2,259 30 47 ------ ------ ------ Asset Management and Securities Services Asset Management......................... $ 306 $ 282 $ 202 9% 51% Securities Services...................... 238 196 207 21 15 Commissions.............................. 625 439 327 42 91 ------ ------ ------ Total Asset Management and Securities Services................................. $1,169 $ 917 $ 736 27 59 ------ ------ ------ Total net revenues......................... $4,493 $3,473 $2,995 29 50 ====== ====== ======
* * * ASSETS UNDER SUPERVISION (unaudited) ($ in millions)
AS OF CHANGE FROM ------------------------------------------ --------------------------- FEBRUARY 25, NOVEMBER 26, FEBRUARY 26, NOVEMBER 26, FEBRUARY 26, 2000 1999 1999 1999 1999 ------------ ------------ ------------ ------------ ------------ Assets under management............... $279,617 $258,045 $206,380 8% 35% Other client assets................... 272,991 227,424 163,315 20 67 -------- -------- -------- Total assets under supervision........ $552,608 $485,469 $369,695 14 49 ======== ======== ========
Page 4 of 5 5 THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (unaudited)
THREE MONTHS ENDED -------------------------------------------------- FEBRUARY 25, NOVEMBER 26, FEBRUARY 26, 2000 1999 1999 ------------ ------------ ------------ (in millions, except share and per share amounts) Revenues Global capital markets Investment banking......................... $ 1,230 $ 1,305 $ 902 Trading and principal investments.......... 2,096 1,218 1,398 Asset management and securities services........ 944 736 543 Interest income................................. 3,694 3,453 3,013 ------------ ------------ ------ Total revenues............................. 7,964 6,712 5,856 Interest expense................................ 3,471 3,239 2,861 ------------ ------------ ------ Revenues, net of interest expense............... 4,493 3,473 2,995 Operating expenses Compensation and benefits, excluding employee initial public offering awards................ 2,247 1,527 1,275 Amortization of employee initial public offering awards........................................ 111 114 -- Brokerage, clearing and exchange fees........... 129 118 111 Market development.............................. 106 117 77 Communications and technology................... 93 82 78 Depreciation and amortization................... 101 108 97 Occupancy....................................... 95 93 78 Professional services and other................. 132 105 91 ------------ ------------ ------ Total operating expenses........................ 3,014 2,264 1,807 Pre-tax earnings................................ 1,479 1,209 1,188 Provision for taxes............................. 592 486 181 ------------ ------------ ------ Net earnings.................................... $ 887 $ 723 $1,007 ============ ============ ====== Earnings per share Basic........................................... $ 1.83 $ 1.51 Diluted......................................... 1.76 1.48 Average common shares outstanding Basic........................................... 484,576,498 477,395,104 Diluted......................................... 505,387,044 489,011,804
Page 5 of 5 -----END PRIVACY-ENHANCED MESSAGE-----