Goldman Sachs 2000 Annual Report Download - page 4
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2000 was a remarkable year for Goldman Sachs and a rewarding
one for our shareholders. In our first full year as a public company, we
posted record earnings(1) of $3.25 billion, up 27% from $2.55 bil-
lion in 1999. Earnings per diluted share rose to $6.35, a 20%
increase from $5.27 in 1999. And our return on equity reached 27%.
These results reflect more than a very good year for a number of
our businesses. They are also evidence of our continued
progress toward our goal of becoming the preeminent, global
investment banking and securities firm. This goal is underpinned by
a strategy that emphasizes expanding in key markets our core
offerings. In addition, we improved our high-yield underwriting
business, finishing the year with the number two market share
in the United States.
In 2000, we also continued to expand our most profitable trad-
ing businesses. We placed a special emphasis on client-driven
transactions and solving complex problems with highly tailored
solutions. During the course of the year, we succeeded in
increasing our trading revenues while lowering risk. In Fixed
Income, Currency and Commodities (FICC),net revenues grew by5%
despite difficult market conditions. Our Equities business posted
spectacular gains, with net revenues up 78% over 1999. In
October, we strengthened our capabilities in the equity market
through our combination with Spear, Leeds & Kellogg, an indus-
try leader in securities market making and clearing. In Principal
Investments, we substantially expanded our global platform,
raising $8 billion in new private equity and real estate funds.
Goldman Sachs now manages more than $30 billion of merchant
banking investments for our clients and our own account.
Asset Management and Securities Services also generated
strong growth in 2000. Net revenues rose 43% from 1999
and assets under management reached $294 billion, a 14%
increase over the previous year. Since 1995, our assets under
management have expanded at an average rate of 41% per
year, making us one of the fastest growing large asset managers
in the industry. In 2000, we added $40 billion of new client
assets, building on $34 billion and $46 billion increases in 1999
and 1998, respectively. This growth is testimony to both our
investment record and distribution power. We see attractive
growth opportunities in the high-net-worth market and are
investing to capture an increasing share of it.
A strong capital position is an important part of our strategy.
Indeed, one of the principal reasons we became a public company
was to secure the permanent capital necessary to serve our
clients better. Since our IPO, our equity capital has grown from
$6.6 billion to $16.5 billion. Despite this increase, we remain as
disciplined about our capital as we were when we were a private
partnership. Our capital is available to help clients meet their
important needs but we use it carefully for those transactions
where we can combine it with our expertise and where we
believe that the potential rewards justify the risk. We owe our
shareholders no less.
businesses: Global Capital Markets (Investment Banking and
Trading and Principal Investments) and Asset Management and
Securities Services. Our goal is for Goldman Sachs to be the finan-
cial advisor of choice for the most important and influential cor-
porations, institutions and individuals worldwide. It is critical that
we capture— and keep — a leading share of the high value-
added business of these clients. In 2000, we experienced
marked success in doing so.
In Investment Banking, for instance, we were the number one
advisor in merger transactions on a worldwide basis.Goldman
Sachs advised on a total of $1.3 trillion in announced transac-
tions, including seven out of ten of the largest in the world. We
hold strong leadership positions in key growth industries, including
telecommunications, financial institutions, technology, healthcare
and energy. Goldman Sachs was also the number one global
underwriter of initial public offerings (IPOs) and all common stock
John A. Thain / Henry M. Paulson, Jr. / John L. Thornton
FELLOW SHAREHOLDERS
(1) Results for 2000 exclude the charge related to our combination with Spear, Leeds & Kellogg. Results for 1999 reflect the pro forma effect of our incorporation and related transactions.
Source of market share information: Thomson Financial Securities Data