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Goldman Sachs
2002 Annual Report

Table of contents

  • Page 1
    Goldman Sachs 2002 Annual Report

  • Page 2
    ... OR FOR YEAR ENDED NOVEM BER ($ AND SHARE AM OUNTS IN M ILLIONS, EXCEPT PER SHARE AM OUNTS) 2002 2001 Operating Results Net revenues Investment banking Trading and principal investments Asset management and securities services Total net revenues Pre-tax earnings Net earnings Com m on Share Data...

  • Page 3
    ... conditions into future opportunities. We cannot control external forces but we always strive to meet our own high standards of professionalism, excellence and integrity, regardless of the environment. The results are long-term client relationships that span geographies and decades, and a position...

  • Page 4
    ..., on total net revenues of $13.99 billion. Earnings per diluted share were $4.03 , down 5% from 2001 . Return on shareholders' equity was 11% for the year, and return on tangible shareholders' equity was 15% . Evident in this performance were both the strength and diversity of the Goldman Sachs...

  • Page 5
    ...We were also the leading underwriter of global public equity offerings in 2002 , and ranked second in global initial public offerings.(1) Within our Trading and Principal Investments business, Fixed Income, Currency and Commodities (FICC ) produced record net revenues for the firm, demonstrating the...

  • Page 6
    ... in Japan and Japanese financial markets, through an investment in one of that nation's largest and best-managed institutions. Second, the credit protection component will enhance Goldman Sachs' ability to offer credit commitments to investment-grade clients while mitigating in part the credit risk...

  • Page 7
    ... of Goldman Sachs with responsibility for our securities businesses, to stand for election to our Board of Directors at the April 1 Annual M eeting. We look forward to having Lloyd as a new director and we thank Bob for his contributions to our Board. O ver the past year we changed the ranks of...

  • Page 8
    ... a Board of Directors that would promote and protect the interests of our new partners, our public shareholders. RETA IN IN G THE STREN GTHS OF A N OW N ER CU LTU RE The core of the Goldman Sachs partnership was shared long-term ownership. It shaped individual behavior and our approach to business...

  • Page 9
    ... three most senior officers, we have encouraged our partners to sell a portion of their shares on an orderly and volume-limited basis. Last year, after we reached approximately 50% public ownership, Goldman Sachs was added to the S& P 500 , perhaps the most significant index for listed shares in the...

  • Page 10
    ... of our internal audit function and independent auditors, and our management of market, credit, liquidity and other financial and operational risks. In addition, the Audit Committee reviews and monitors the adequacy of the structures, policies and procedures that the firm has developed to assure...

  • Page 11
    ...and Nominating Committee played a central role in developing our Corporate Governance Guidelines and our Code of Business Conduct and Ethics which applies to all of our directors and the people of Goldman Sachs worldwide. The guidelines and code were adopted by the Board in February of this year and...

  • Page 12
    ... In 2002 , declining equities markets and volatile debt markets, increasing levels of risk and market uncertainty made decision-making extremely difficult for management teams across virtually every industry - and raised the stakes of action or inaction considerably. For Goldman Sachs only...

  • Page 13
    ...marketing effort that reached a large audience of portfolio and asset managers. The Goldman Sachs sales team then focused on those managers w ho demonstrated interest in E.ON and appetite for its debut debt issue. The result w as a record-breaking â,¬7.3 billion offering, and another step in a long...

  • Page 14
    .... Goldman Sachs further advised the company on its July 2002 listing on the Stock Exchange of Hong Kong, w hich raised $2.7 billion. This highly successful and historic IPO w as the first international stock listing by a mainland bank, and paved the w ay for broader financial change w ithin...

  • Page 15
    ... including equities, derivatives, capital markets, trading and investment research. Over the last several years, Putnam Investments has also come to look at Goldman Sachs as a trusted advisor. In 2002, Putnam Investments and Goldman Sachs w orked closely together to evaluate and implement a number...

  • Page 16
    ... SHIP M A N A GEM EN T - SU CCESS THROU GH CLIEN T FOCU S Goldman Sachs' Global Relationship M anagement team (GRM ) brings together tw o of our most deeply held principles: client focus and teamw ork. Their mandate is to think broadly and strategically about the financial alternatives for our...

  • Page 17
    ... look to Goldman Sachs for advice and guidance in developing investment strategies. The financial markets are highly interdependent, and successful investment portfolios require global perspective, leading-edge know ledge and individualized strategy. Goldman Sachs' approach to w ealth management is...

  • Page 18
    ... it attracts people of very high caliber, people who want to work together to achieve something greater than they could achieve on their own. That desire and ability to be part of a team is fundamental to our culture, our business principles and, we believe, our long-term success. Since the firm...

  • Page 19
    ... much of 2002. The team structured a series of complex transactions for Providian and executed them in difficult markets, including the sale of Providian's M aster Trust and its credit card business in the United Kingdom. Goldman Sachs also securitized and provided the equity to fund the sale...

  • Page 20
    ...- nated global process. Recruiters and other Goldman Sachs professionals w ork together to give recruits the best and most accurate perspective on the career opportunities Goldman Sachs has to offer. Both cost-effective and efficient, this new approach helps us reach a diverse pool of candidates...

  • Page 21
    ... as w e w ork more closely w ith them, those benefits increase proportionately. For five years, the Goldman Sachs Asset M anagement team served as one of four portfolio managers for VGZ, one of the largest specialized health insurance companies in The Netherlands. When VGZ decided to elect a sole...

  • Page 22
    ... of crisis. Our disciplined management approach, our financial prudence and the strength of our core franchise have paid off this year, as we have continued a leadership position in our most important investment banking businesses. O ver the past 133 years, Goldman Sachs and its people have been...

  • Page 23
    ...Goldman Sachs remained a market leader in Investment Banking, ranking number one in announced and completed global mergers and acquisitions and in w orldw ide public common stock issuances.(1) And w hile business volumes declined, w e continued to strengthen existing relationships and establish new...

  • Page 24
    ...YEA R Goldman Sachs seeks to develop innovative approaches to help clients during volatile times. In the active and uncertain market environment of 2002, FICC helped its clients manage a variety of risks, including those related to commodities, credit, currencies, interest rates and liquidity. FICC...

  • Page 25
    HON G KON G LON DON N EW YORK G O L D M A N SA C H S 2 0 0 2 A N N U A L R E PO R T 23

  • Page 26
    ... risk management resources to help our clients address their concerns. This level of client commitment contributed both to significant mandates from new clients and to additional assets from certain existing clients. As a result, despite significant market depreciation, Goldman Sachs ended the year...

  • Page 27
    ...DEEPEN IN G CLIEN T RELATION SHIPS While Goldman Sachs' equities businesses could not escape the difficult market conditions that w ere pervasive in 2002, w e continued to benefit from the scale and efficiency of our global equities businesses, and the success of our focused effort to deepen client...

  • Page 28
    ...Core Businesses Goldman Sachs is a leading global investment banking, securities and investment management firm that provides a wide range of services worldwide to a substantial and diversified client base that includes corporations, financial institutions, governments and high-net-worth individuals...

  • Page 29
    ...or options. 2000 2001 2002 Equities Net Revenues (in millions) $134 $1,008 FICC makes markets in and trades interest rate and credit products, currencies and commodities, structures and enters into a wide variety of derivative transactions, and engages in proprietary trading. FICC's principal...

  • Page 30
    ... ent 2000 2001 2002 Asset M anagem ent and Securities Services Net Revenues (in millions) Asset M anagement generates management fees by providing investment advisory services to a diverse client base of institutions and individuals. Assets under management include our mutual funds, separate...

  • Page 31
    ...Per Share ... ... Risk Management Structure. Market Risk . ... Note 10 - Goodwill and Identifiable Intangible Assets ...Note 11 -Employee Benefit Plans Note 13 - Income Taxes Note 12 - Employee Incentive Plans Note 14 - Regulated Subsidiaries Note 15 - Business Segments . ... Trading Net Revenues...

  • Page 32
    ...A nalysis Goldman Sachs is a leading global investment banking, securities and investment management firm that provides a wide range of services worldwide to a substantial and diversified client base that includes corporations, financial institutions, governments and high-net-worth individuals. Our...

  • Page 33
    ... Financial Advisory businesses, and continued weakness in global equities markets has adversely affected the results of certain of our Trading and Principal Investments businesses. In addition, our operating results have been affected by Goldman Sachs' combination with SLK LLC (SLK) in October 2000...

  • Page 34
    ... Total Net revenues Operating expenses (1) Pre-tax earnings (1) Includes the follow ing expenses that have not been allocated to our segments: (i) amortization of employee initial public offering aw ards of $212 million, $363 million and $428 million for the years ended November 2002, November...

  • Page 35
    ...7% decline in industry-wide total equity underwriting volume, (1) as well as a decline in Goldman Sachs' market share in global debt underwriting. The reduction in Investment Banking net revenues was primarily due to lower levels of activity across all sectors, particularly communications, media and...

  • Page 36
    ...the net revenues of the Asset Management and Securities Services segment. O ur Trading and Principal Investments business facilitates customer transactions with a diverse group of corporations, financial institutions, governments and individuals and takes proprietary positions through market making...

  • Page 37
    ... on lower interest rates, increased volatility and strong customer demand. This increase in net revenues was driven by strong performances in commodities, currencies, our credit-sensitive businesses (which include high-yield debt, bank loans and investment-grade corporate debt) and fixed income...

  • Page 38
    ... results of our Asset Management and Securities Services segment: ASSET M ANAGEM ENT AND SECURITIES SERVICES OPERATING RESULTS YEAR ENDED NOVEM BER (IN M ILLIONS) 2002 2001 2000 Asset M anagement Securities Services Commissions Total net revenues Operating expenses Pre-tax earnings $1,653 981...

  • Page 39
    ... of these employees are reimbursed to Goldman Sachs by the real estate investment funds to w hich these companies provide property management services. During 2002, we continued to focus on cost containment in light of the difficult business environment. We reduced employment levels and maintained...

  • Page 40
    ... levels were essentially unchanged from N ovember 2000. Substantially all of the equity-based compensation granted for 2001 was in the form of stock options. See " -Recent Accounting Developments" below as well as Note 2 and Note 12 to the consolidated financial statements for further information...

  • Page 41
    ... all types of risk. Liquidity (i.e., ready access to funds) is essential to our businesses. O ur liquidity could be impaired by an inability to access the long-term or short-term debt markets, an inability to access the repurchase and securities lending markets, or an inability to sell assets. This...

  • Page 42
    ... with our trading and market-making businesses. We have reclassified net cash flows from " Securities sold under agreements to repurchase, net of agreements to resell" as Liquidity is of critical importance to companies in the financial services sector. M ost failures of financial institutions have...

  • Page 43
    ... intended to allow us to meet immediate obligations without needing to sell other assets or depend on additional funding from credit-sensitive markets. Our primary liquidity cushion consists of cash and unencumbered U.S. government and agency securities and highly liquid mortgage securities that may...

  • Page 44
    ... debt securities, emerging market debt securities and principal investments. Goldman Sachs seeks to maintain broad and diversified funding sources globally. These sources include insurance companies, mutual funds, banks, bank trust departments, corporations, individuals and other asset managers...

  • Page 45
    ...such as subsidiary regulatory requirements, rating agency guidelines, our capital policies regarding asset composition, leverage and risk of loss, business opportunities, and capital availability and cost. Goldman Sachs' total capital increased 17% to $57.71 billion as of November 2002 compared with...

  • Page 46
    ... management team and internal and external parties to be contacted to ensure effective distribution of information. Contractual Obligations and Contingent Commitments Goldman Sachs has contractual obligations to make future payments under long-term debt and long-term noncancelable lease agreements...

  • Page 47
    ...Certain agreements are subject to periodic escalation provisions for increases in real estate taxes and other charges. Our occupancy expenses include costs associated with office space held in excess of our current requirements, primarily due to the impact of the levels of current business activity...

  • Page 48
    ... by the Financial Services Agency, the Tokyo Stock Exchange, the Osaka Securities Exchange, the Tokyo International Financial Futures Exchange and the Japan Securities Dealers Association. Several other subsidiaries of Goldman Sachs are regulated by securities, investment advisory, banking, and...

  • Page 49
    ...of our risk management process. In addition to the committees described above, departments that are independent of the revenue-producing units, such as the Firmwide Risk, Credit, Controllers, Treasury, Global Operations, Compliance, Management Controls (Internal Audit) and Legal departments, in part...

  • Page 50
    ... inventory position limits for selected business units and country exposures. va r - VaR is the potential loss in value of Goldman Sachs' trading positions due to adverse market movements over a defined time horizon with a specified confidence level. For the VaR numbers reported below, a one-day...

  • Page 51
    ... A nalysis The following tables set forth the daily VaR for substantially all of our trading positions: AVERAGE DAILY VaR (IN M ILLIONS) RISK CATEGORIES YEAR ENDED NOVEM BER 2002 2001 2000 Interest rates Equity prices Currency rates Commodity prices Diversification effect (1) Firmw ide $ 34 22...

  • Page 52
    ... trading positions during 2002: DAILY VaR ($ IN M ILLIONS) 80 70 60 DAILY VaR 50 40 30 20 10 0 FIRST QUARTER SECOND QUARTER THIRD QUARTER FOURTH QUARTER Trading Net Revenues Distribution Substantially all of our inventory positions are marked-to-market on a daily basis and changes are recorded...

  • Page 53
    ... of our overall risk control process, daily trading net revenues are compared with VaR calculated as of the end of the prior business day. Trading losses incurred on a single day exceeded our 95% one-day VaR on one occasion during 2002. Nontrading Risk The market risk for financial instruments in...

  • Page 54
    ... and market volatility. Collateral is usually received under agreements entitling Goldman Sachs to require additional collateral upon specified increases in exposure or the occurrence of adverse credit events. Where w e have obtained collateral from a counterparty under a master trading agreement...

  • Page 55
    ... firmwide operational risk. While each business unit has processes and systems in place to address operational risks within the unit, it is the job of Operational Risk Management to develop a framework for measuring our operational risk more broadly. Operational Risk Management's long-term goal is...

  • Page 56
    ... under current market conditions, assuming an orderly liquidation over a reasonable period of time. Our valuation models consider, among other inputs, contractual and market prices, yield curves, credit, volatility factors, prepayment rates and/or correlations of the underlying positions. Examples...

  • Page 57
    ... under current market conditions, assuming an orderly liquidation over a reasonable period of time. Our valuation models consider, among other inputs, contractual and market prices, yield curves, credit, volatility factors, prepayment rates and/or correlations of the underlying positions. Examples...

  • Page 58
    ... assets and liabilities as of November 2002 by product and by remaining contractual maturity: OTC DERIVATIVES (IN M ILLIONS) ASSETS 0-6 M ONTHS 6-12 M ONTHS 1-5 YEARS 5-10 YEARS 10 YEARS OR GREATER PRODUCT TOTAL Interest rate contracts Currency contracts Commodity contracts Equity contracts Total...

  • Page 59
    ..., underlying business models, expected exit timing and strategy, and any specific rights or terms associated with the investment, such as conversion features and liquidation preferences. Controls Over Valuation of Financial Instrum ents Proper controls, independent of the trading and principal...

  • Page 60
    ... units to be granted to employees in the future is not yet known, nor are the related future service provisions. We elected to adopt the disclosure provisions of SFAS No. 148 for the fiscal year-ended 2002. See Note 2 and Note 12 to the consolidated financial statements for additional information...

  • Page 61
    ...price for a derivative contract is the best information available with which to estimate fair value at the inception of a contract when the estimate is not based on other observable market data. We are currently evaluating the impact of the FASB staff's view on our financial condition and results of...

  • Page 62
    ... A nalysis SUBSEQUENT EVENTS Research Settlem ent On December 20, 2002, as part of a proposed global settlement involving the leading securities firms operating in the United States, agreements in principle were announced among Goldman Sachs' U.S. broker-dealer subsidiary Goldman, Sachs & Co. and...

  • Page 63
    ...consolidated statements of financial condition and the related consolidated statements of earnings, changes in shareholders' equity, cash flows and comprehensive income present fairly, in all material respects, the financial position of The Goldman Sachs Group, Inc. and its subsidiaries (the Company...

  • Page 64
    ...2001 2000 Revenues Investment banking Trading and principal investments Asset management and securities services Interest income Total revenues Interest expense Revenues, net of interest expense Operating expenses Compensation and benefits Nonrecurring acquisition aw ards Amortization of employee...

  • Page 65
    ... value Other assets Total assets Liabilities and shareholders' equity Short-term borrow ings, including the current portion of long-term borrow ings Payables to brokers, dealers and clearing organizations Payables to customers and counterparties Securities loaned Securities sold under agreements to...

  • Page 66
    ... ents of Changes in Shareholders' Equity YEAR ENDED NOVEM BER (IN M ILLIONS, EXCEPT PER SHARE AM OUNTS) 2002 2001 2000 Common stock, par value $0.01 per share Balance, beginning of year Issued Balance, end of year Restricted stock units Balance, beginning of year Granted Delivered Forfeited...

  • Page 67
    ... and equipment Business combinations, net of cash acquired Other, net Net cash used for investing activities Cash flow s from financing activities Short-term borrow ings, net Issuance of long-term borrow ings Repayment of long-term borrow ings, including the current portion of long-term borrow...

  • Page 68
    ... prehensive Incom e YEAR ENDED NOVEM BER (IN M ILLIONS) 2002 2001 2000 Net earnings Currency translation adjustment, net of tax Comprehensive income $2,114 46 $2,160 $2,310 (38) $2,272 $3,067 (167) $2,900 The accompanying notes are an integral part of these consolidated financial statements...

  • Page 69
    ... the consolidated statements of financial condition. As of September 30, 2002 (the latest investment fund reporting date), the funds' total assets were approximately $11.85 billion. The firm's principal U.S. and international subsidiaries include Goldman, Sachs & Co. (GS& Co.), J. Aron & Company and...

  • Page 70
    ... under current market conditions, assuming an orderly liquidation over a reasonable period of time. The firm's valuation models consider, among other inputs, contractual and market prices, yield curves, credit, volatility factors, prepayment rates and/or correlations of the underlying positions. The...

  • Page 71
    ... futures markets worldwide. These commissions are recorded on a trade-date basis in " Asset management and securities services" in the consolidated statements of earnings. M E R C H AN T B AN K I N G O VE R R I D E The firm is entitled to receive merchant banking overrides (i.e., an increased share...

  • Page 72
    ... AM OUNTS) 2002 2001 2000 Net earnings, as reported Add: Stock-based employee compensation expense, net of related tax benefits, included in reported net earnings Deduct: Stock-based employee compensation, net of related tax effects, determined under fair-value based method for all aw ards Pro...

  • Page 73
    ... is the best information available with which to estimate fair value at the inception of a contract when the estimate is not based on other observable market data. Management is currently evaluating the impact of the FASB staff's view on the firm's financial condition and results of operations...

  • Page 74
    ... LIABILITIES ASSETS LIABILITIES Commercial paper, certificates of deposit and time deposits U.S. government, federal agency and sovereign obligations Corporate debt Equities and convertible debentures State, municipal and provincial obligations Derivative contracts Physical commodities Total...

  • Page 75
    ... interest rate futures contracts, interest rate swap agreements, currency swap agreements and equity-linked contracts, which are primarily utilized to convert a substantial portion of the firm's long-term debt into U.S. dollar-based floating rate obligations. Certain interest rate swap contracts are...

  • Page 76
    ... NOVEM BER 2002 TYPE OF RETAINED INTERESTS ($ IN M ILLIONS) M ORTGAGE OTHER ASSET-BACKED(2) Fair value of retained interests Weighted average life (years) Annual prepayment rate Impact of 10% adverse change Impact of 20% adverse change Annual credit losses (1) Impact of 10% adverse change Impact of...

  • Page 77
    ... firm, in the ordinary course of its business, utilizes VIEs such as trusts, limited partnerships and limited liability companies to securitize commercial and residential mortgages and home equity loans, government and corporate bonds, and other types of financial instruments. Prior to the issuance...

  • Page 78
    ... Long-term borrow ings maturing w ithin one year are included in " short-term borrow ings" in the consolidated statements of financial condition. The firm enters into derivative contracts, such as interest rate futures contracts, interest rate swap agreements, currency swap agreements and equity...

  • Page 79
    ... concerning matters arising in connection with the conduct of its businesses. Management believes, based on currently available information, that the results of such proceedings, in the aggregate, will not have a material adverse effect on the firm's financial condition, but may be material to the...

  • Page 80
    ...margin deposit requirements. Letters of credit outstanding were $11.63 billion and $11.50 billion as of November 2002 and November 2001, respectively. The firm acts as an investor in merchant banking transactions, which includes making long-term investments in equity and debt securities in privately...

  • Page 81
    ... forth reported net earnings and EPS, as adjusted to exclude goodwill amortization expense: YEAR ENDED NOVEM BER (IN M ILLIONS EXCEPT PER SHARE AM OUNTS) 2001 2000 Identifiable intangible assets consist primarily of specialist rights and customer lists and are amortized over a weighted average life...

  • Page 82
    ... table provides a summary of the changes in the plans' benefit obligations and the fair value of assets for 2002 and 2001 and a statement of the funded status of the plans as of November 2002 and November 2001: AS OF OR FOR THE YEAR ENDED NOVEM BER 2002 U.S. PENSION NON-U.S. PENSION POSTRETIREM ENT...

  • Page 83
    ... Discount rate Rate of increase in future compensation levels Expected long-term rate of return on plan assets 6.75% 5.00 8.50 7.00% 5.00 8.50 7.50% 5.00 - 6.75% 5.00 8.50 4.78 4.14 5.86 7.00% 5.00 8.50 4.93 4.11 5.74 7.50% 5.00 8.50 4.66 4.29 5.81 For measurement purposes, an annual growth rate...

  • Page 84
    ... date of grant. Plan expense was immaterial for the years ended N ovember 2002, N ovember 2001 and N ovember 2000. N O TE options, stock appreciation rights, dividend equivalent rights, restricted stock, restricted stock units and other stock-based awards. The total number of shares of common stock...

  • Page 85
    ... restricted stock units granted to employees subsequent to year end as part of year-end compensation. (2) Total employee stock compensation expense, net of forfeitures, was $645 million, $798 million and $1.35 billion for the years ended November 2002, November 2001 and November 2000, respectively...

  • Page 86
    ... as of the grant date based on a binomial option pricing model using the following weighted average assumptions: YEAR ENDED NOVEM BER 2002 2001 2000 Risk-free interest rate Expected volatility Dividend yield Expected life 3.5% 35.0 0.6 5 years 5.2% 35.0 0.5 7 years 5.6% 35.0 0.6 7 years...

  • Page 87
    ... $209 million. Additionally, during 2002, the valuation allowance was increased by $10 million, primarily due to an increase in certain state and local and foreign tax credits. Acquired net operating loss carryforwards of approximately $58 million are subject to annual limitations on utilization and...

  • Page 88
    ... with a diverse group of corporations, financial institutions, governments and individuals and takes proprietary positions through market making in, and trading of, fixed income and equity products, currencies, commodities, and swaps and other derivatives. In addition, the firm engages in floor...

  • Page 89
    ... Net revenues in the firm's segments include alloca- executing and clearing client transactions on major stock, options and futures markets worldwide. Commissions also includes revenues from the increased share of the income and gains derived from the firm's merchant banking funds when the return...

  • Page 90
    ... information provides a reasonable representation of each segment's contribution to consolidated pre-tax earnings and total assets: AS OF AND FOR YEAR ENDED NOVEM BER (IN M ILLIONS) 2002 2001 2000 Investment Banking Net revenues (1) Operating expenses (2) Pre-tax earnings Segment assets...

  • Page 91
    ... the net revenues of the firm's three segments: YEAR ENDED NOVEM BER (IN M ILLIONS) 2002 2001 2000 Financial Advisory Underw riting Total Investment Banking FICC Equities Principal Investments Total Trading and Principal Investments Asset M anagement Securities Services Commissions Total Asset...

  • Page 92
    ... subsidiaries by geographic region allocated on the basis described above: AS OF OR FOR YEAR ENDED NOVEM BER (IN M ILLIONS) 2002 2001 2000 Net revenues United States Other Americas United Kingdom Other Europe Asia Total net revenues Pre-tax earnings United States Other Americas United Kingdom...

  • Page 93
    ... the management, necessary for a fair presentation of the results. These adjustments are of a normal recurring nature. 2002 FISCAL QUARTER (IN M ILLIONS, EXCEPT PER SHARE DATA) FIRST SECOND THIRD FOURTH Total revenues Interest expense Revenues, net of interest expense Operating expenses Pre-tax...

  • Page 94
    ... ental Financial Inform ation Com m on Stock Price Range The following table sets forth, for the fiscal quarters indicated, the high and low sales prices per share of the firm's common stock as reported by the Consolidated Tape Association. SALES PRICE 2002 HIGH LOW HIGH 2001 LOW HIGH 2000 LOW...

  • Page 95
    ...-participating limited partners w ere accounted for as distributions of partners' capital rather than as compensation and benefits expense. As a result, pre-tax earnings in 1998 is not comparable w ith 2002, 2001, 2000 or 1999. Excludes employees of Goldman Sachs' property management subsidiaries...

  • Page 96
    ... Jon Winkelried Gregory K. Palm Esta E. Stecher G eneral Counsels John F.W. Rogers Secretary to the Board M anaging Directors H enry M . Paulson, Jr. H oward A. Silverstein Kevin W. Kennedy* Daniel M . N eidich M ichael R. Lynch Thomas E. Tuft Lloyd C. Blankfein John P. Curtin, Jr. Robert K. Steel...

  • Page 97
    ...H . Carpet M ichael J. Carr* Virginia E. Carter David K. Chang Peter T. Cirenza Kent A. Clark Timothy J. Cole Donna L. Conti Edith W. Cooper Philip A. Cooper N eil D. Crowder Stephen C. Daffron John S. Daly Juan A. Del Rivero Stephen D. Dias Simon P. Dingemans N oel B. Donohoe Jana H ale Doty Robert...

  • Page 98
    ...Russo Allen Sangines-Krause Gary B. Schermerhorn Steven M . Scopellite David J. Scudellari Ravi Sinha Edward M . Siskind M ark F. Slaughter Sarah E. Smith Raymond S. Stolz Steven H . Strongin Andrew J. Stuart Patrick Sullivan John H . Taylor Greg W. Tebbe Daisuke Toki John J. Vaske George H . Walker...

  • Page 99
    ... Feit Jacob Y. Friedman Robert K. Frumkes Richard A. Genna Kenneth K. Gershenfeld Rajiv A. Ghatalia Robert R. Gheewalla Gary T. Giglio Pedro ... Kurt D. Winkelmann M elinda B. Wolfe Wassim G. Younan Rebecca Amitai Todd J. Christie Lawrence A. Cohen James A. Coufos N eil V. DeSena Brian Duggan John...

  • Page 100
    ...-H enri Flamand M ark C. Fletcher Timothy T. Furey M aryann L. Gallivan Gonzalo R. Garcia H ywel D. George Justin G. Gmelich Eldridge F. Gray M ichael J. Grimaldi Benoit H erault Axel H oerger Simon N . H olden Shin H orie Adrian M . Jones G O L D M A N SA C H S 2 0 0 2 A N N U A L R E PO R T 97

  • Page 101
    ... Denise A. Wyllie Yi Kevin Z hang John W. Z iegler M arina L. Roesler H oward Q . Spooner Advisory Directors John L. Weinberg Peter M . Sacerdote Peter R. Coneway Eric S. Dobkin Joseph H . Wender Jonathan L. Cohen William C. Landreth Victor R. Wright Joseph H . Ellis David B. Ford H enry James...

  • Page 102
    ... Geneva George Town H ong Kong H ouston Johannesburg London Los Angeles M adrid M enlo Park M exico City M iami M ilan M ontreal M oscow N ew York Paris Philadelphia Princeton Salt Lake City San Francisco São Paulo Seattle Seoul Shanghai Singapore Stockholm Sydney Taipei Tampa Tokyo Toronto...

  • Page 103
    ...and heavy volume of activity, we would, if it came to a choice, rather be best than biggest. 4. changing needs of our clients and to develop new services to meet those needs. We know that the world of finance will not stand still and that complacency can lead to extinction. 12. We regularly receive...

  • Page 104
    ... share ownership should be addressed to: The common stock of The Goldman Sachs Group, Inc. is listed on the N ew York Stock Exchange and trades under the ticker symbol " GS." Shareholder Inquiries M ellon Investor Services LLC O verpeck Centre 85 Challenger Road Ridgefield Park, N ew Jersey...

  • Page 105
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