Goldman Sachs 2003 Annual Report Download - page 22

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WE HELP MARKETS FIND WAYS TO CONNECT IDEAS AND CAPITAL.
Global markets—in all their utility, interdependencies and scale—are at the core of our business. We
will continue to see tremendous growth and innovation in markets around the world, driven in part by
advancements in technology, but also by the evolving needs of the societies they serve.
As complex as markets become, we must continually embrace new opportunities with creativity, flexibility
and decisive action. We are committed to remaining at the center of the global markets so that we may
leverage their strengths and manage their risks on behalf of our clients.
SELECTED POWER SECTOR TRANSACTIONS
Through several significant transactions
this year, Goldman Sachs assumed a larger
position in the U.S. power sector.
In October 2003, Goldman Sachs pur-
chased East Coast Power L.L.C., owner
of a 940-megawatt cogeneration facility
in Linden, New Jersey. In December, we
acquired privately owned Cogentrix
Energy, Inc., owner of interests in 26
power plants with significant production
capacity. These holdings are expected
to generate stable, long-term cash flows
and greater opportunities for trading
and risk management.
From Allegheny Energy, Goldman Sachs
bought a power supply contract with
the California Department of Water
Resources, and associated gas and power
hedge transactions, thereby enabling
Allegheny to alleviate risk and improve
its liquidity position.
Additionally, Goldman Sachs sole man-
aged a $3.3 billion financing for Calpine
Corporation. This high-yield offering, the
largest since March 1999, was followed
by an $800 million nonrecourse financing
for a Calpine subsidiary, employing an
innovative commodities hedge to enhance
the structure for investors.
“Our goal is to generate interesting transactions for our clients and for ourselves,
but it clearly has the side effect of being good for the world economy. We find strategically
important initiatives for our clients to engage in, and we’re constantly at
the center of the people who need capital and the people who are able to provide it.”
michael sherwood, fixed income, currency and commodities, london