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| Goldman Sachs Group, Inc. The |
| 85 Broad Street, New York, NY 10004 * (212) 902-1000 |
| Business Description | The company is a leading global investment banking and securities firm with three principal business lines: Investment Banking, Trading and Principal Investments and Asset Management and Securities Services. |
| Offering Information Company has | |||
| Trading As | GS (NYSE) | Industry | Financial (SIC 6211) |
| Type of Stock Offered | Common Shares | Filing Date | 03/16/1999 |
| Domestic Shares Offered | 48,000,000 | Offer Date | 05/03/1999 |
| Foreign Shares Offered | 12,000,000 | Filing Range | $45.00 - $55.00 |
| Company Shares | 42,000,000 | Offer Price | $53.00 |
| Selling Shrhldrs Shares | 18,000,000 | Gross Spread | $2.250 |
| Gross Proceeds | $3,180,000,000 | Selling | $1.350 |
| Expenses | - - | Reallowance | $0.100 |
| Post-IPO Shares | 467,709,041 | Employees | 14170 |
| Primary Underwriting Group | ||
| Underwriter Name | Participation | Underwriter Phone |
| Goldman, Sachs & Co. | Lead Manager | (212) 902-5959 |
| Bear, Stearns & Co. Inc. | Co-manager | (212) 272-4850 |
| CS First Boston | Co-manager | (212) 325-2000 |
| Donaldson, Lufkin & Jenrette Securities Corp. | Co-manager | (212) 371-0641 |
| J.P. Morgan Securities Inc. | Co-manager | (212) 648-0517 |
| Lehman Brothers Incorporated | Co-manager | (212) 526-8100 |
| Merrill Lynch & Co. | Co-manager | (212) 449-4600 |
| Morgan Stanley Dean Witter Discover & Co. | Co-manager | (212) 761-5900 |
| PaineWebber Incorporated | Co-manager | (212) 713-2626 |
| Prudential Securities Incorporated | Co-manager | (212) 778-5420 |
| Salomon Smith Barney | Co-manager | (212) 723-7300 |
| Sanford C. Bernstein | Co-manager | (212) 486-5800 |
| Schroder Wertheim & Company, Incorporated | Co-manager | (212) 492-6900 |
| Income Statement and Cash Flow Summary | |||||||
| Prior Audited Income |
Latest Unaudited Income | ||||||
| Full Year Audited Figures | - - Months Ending | ||||||
| Figures in U.S. millions except per share data | 11/30/1995 | 11/30/1996 | 11/30/1997 | 11/30/1998 | |||
| Revenues | - | 14,324.000 | 17,289.000 | 20,433.000 | 22,478.000 | - | - |
| Income from Oper. | - | - | - | - | - | - | - |
| Net Income | - | 1,348.000 | 2,399.000 | 2,746.000 | 2,428.000 | - | - |
| E.P.S | - | - | - | - | - | - | - |
| Revenue Growth (%) | - | 20.70 | 18.18 | 10.008 | - | ||
| Net Income Growth (%) | - | 77.97 | 14.46 | -11.58 | - | ||
| Oper. Profit Margin (%) | - | - | - | - | - | - | - |
| Net Profit Margin (%) | - | 9.41 | 13.88 | 13.44 | 10.80 | - | - |
| Cash Flow - Oper. | 62.00 | - | - | ||||
| Cash Flow - Inv. | -656.00 | - | - | ||||
| Cash Flow - Fin. | 2,102.00 | - | - | ||||
| Balance Sheet Summary and Financial Ratios | |||||
| Balance sheet as of: 11/30/1998 | Financial Ratios | ||||
| Total Assets | 217,380.00 | Current Assets | - | Current Ratio | - |
| Total Liab. | 211,070.00 | Current Liab. | - | Debt Ratio | 97.10% |
| Total Equity | 6,310.00 | Working Cap. | - | Debt to Equity Ratio | 33.45 |
| Cash | 2,836.00 | Return on Assets | 1.12% | ||
| Use Of Proceeds |
The proceeds from the proposed offering will be used to enhance the capital structure of the firm. |
| Legal Counsel Registrar Auditor | |
| Issuer's Law Firm | Sullivan & Cromwell |
| Bank's Law Firm | Cleary, Gottlieb, Steen & Hamilton |
| Registrar/Transfer Agent | ChaseMellon Shareholder Services, L.L.C. |
| Auditor | Pricewaterhouse Coopers LLC |
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| Industry Competition |
The financial services industry -- and all of our businesses -- are intensely competitive, and we expect them to remain so. Our competitors are other brokers and dealers, investment banking firms, insurance companies, investment advisors, mutual funds, hedge funds, commercial banks and merchant banks. We compete with some of our competitors globally and with some others on a regional, product or niche basis. We compete on the basis of a number of factors, including transaction execution, our products and services, innovation, reputation and price. Competition is also intense for the attraction and retention of qualified employees. Our ability to continue to compete effectively in our businesses will depend upon our ability to attract new employees and retain and motivate our existing employees. In recent years there has been substantial consolidation and convergence among companies in the financial services industry. In particular, a number of large commercial banks, insurance companies and other broad-based financial services firms have established or acquired broker-dealers or have merged with other financial institutions. Many of these firms have the ability to offer a wide range of products, from loans, deposit-taking and insurance to brokerage, asset management and investment banking services, which may enhance their competitive position. They also have the ability to support investment banking and securities products with commercial banking, insurance and other financial services revenues in an effort to gain market share, which could result in pricing pressure in our businesses. This trend toward consolidation and convergence has significantly increased the capital base and geographic reach of our competitors. This trend has also hastened the globalization of the securities and other financial services markets. As a result, we have had to commit capital to support our international operations and to execute large global transactions. We believe that some of our most significant challenges and opportunities will arise outside the United States. In order to take advantage of these opportunities, we will have to compete successfully with financial institutions based in important non-U.S. markets, particularly in Europe. Certain of these institutions are larger, better capitalized and have a stronger local presence and a longer operating history in these markets. We have experienced intense price competition in certain businesses in recent years. For example, equity and debt underwriting discounts have been under pressure for a number of years and the ability to execute trades electronically, through the Internet and other alternative trading systems may increase the pressure on trading commissions. It appears that this trend toward alternative trading systems will continue and perhaps accelerate. Similarly, underwriting spreads in Latin American and other privatizations have been subject to considerable pressure in the last year. We believe that we may experience pricing pressures in these and other areas in the future as some of our competitors seek to obtain market share by reducing prices. |
| Business Plan |
Our strategy is to grow our three core businesses -- Investment Banking, Trading and Principal Investments, and Asset Management and Securities Services -- in markets throughout the world. Our leadership position in investment banking provides us with access to governments, financial institutions and corporate clients globally. Trading and principal investing has been an important part of our culture and earnings, and we remain committed to these businesses irrespective of their volatility. Managing wealth is one of the fastest growing segments of the financial services industry and we are positioning our asset management and securities services businesses to take advantage of that growth. Our assets under supervision, for example, have grown from $92.7 billion as of the end of fiscal 1994 to $336.8 billion as of the end of fiscal 1998, representing a compound annual growth rate of 38%. |
| Principal Shareholders | ||
| Name of Shareholder | % Owned Before | % Owned After |
| Sumitomo Bank Capital Markets, Inc. | 7.50 | 4.90 |
| Kamehameha Activities Association | 7.40 | 4.80 |
| Note: represents ownership of 5% or more prior to the offering. | ||
| Executive Officers and Directors | ||
| Officer Name | Officer Title | Age |
| David A. Viniar | C.F.O. | 43 |
| Barry L. Zubrow | Chief Administrative Officer | 46 |
| Leslie M. Tortora | Chief Information Officer | 42 |
| Robin Neustein | Chief of Staff | 45 |
| John L. Weinberg | Director | 74 |
| Robert J. Hurst | Director and Vice Chairman | 53 |
| Henry M. Paulson, Jr. | Director, Chairman and Chief Executive Officer | 52 |
| John L. Thornton | Director, President and Co-Chief Operating Officer | 45 |
| John A. Thain | Director, President and Co-Chief Operating Officer | 43 |
| Robert J. Katz | General Counsel | 51 |
| Gregory K. Palm | General Counsel | 50 |