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Source 2020: https://www.sec.gov/Archives/edgar/data/886982/000095012304002239/y94357exv13w2.htm | 2020-02-16

        <DOCUMENT>
<TYPE>EX-13.2
<SEQUENCE>8
<FILENAME>y94357exv13w2.htm
<DESCRIPTION>CONSOLIDATED FINANCIAL STATEMENTS
<TEXT>
<HTML>
<HEAD>
<TITLE>CONSOLIDATED FINANCIAL STATEMENTS</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
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<H5 align="left" style="page-break-before:always"> </H5><P>
<P align="right"><FONT size="2"><B>EXHIBIT 13.2</B></FONT>

<P align="right"><FONT size="2"><I>Report of Independent Auditors</I></FONT>

<P align="left"><FONT size="2">To the Board of Directors and Shareholders of
The Goldman Sachs Group, Inc.:
</FONT>
<P align="left"><FONT size="2">In our opinion, the accompanying 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) at November 28, 2003 and November 29,
2002, and the results of their operations and their cash
flows for each of the three fiscal years in the period ended
November 28, 2003, in conformity with accounting principles generally accepted in the United States of America.
These financial statements are the responsibility of the
Company’s management; our responsibility is to express
an opinion on these financial statements based on our
audits. We conducted our audits of these financial statements in accordance with auditing standards generally
accepted in the United States of America, which require
that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free
of material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made
by management, and evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis for our opinion.
</FONT>
<P align="left"><FONT size="2"><IMG src="y94357y9435702.gif" alt="-s- PricewaterhouseCoopers LLP"><BR>
PricewaterhouseCoopers LLP<BR>
New York, New York<BR>
January 26, 2004
</FONT>

<P align="right"><FONT size="2"><I>GOLDMAN SACHS 2003 ANNUAL REPORT  </I>67</FONT>

<P align="center"><FONT size="2"> </FONT>
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<H5 align="left" style="page-break-before:always"> </H5><P>


<P align="left"><FONT size="2"><I>Consolidated Statements of Earnings</I>
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="3%"> </TD>
    <TD width="76%"> </TD>
    <TD width="3%"> </TD>
    <TD width="1%"> </TD>
    <TD width="1%"> </TD>
    <TD width="2%"> </TD>
    <TD width="3%"> </TD>
    <TD width="1%"> </TD>
    <TD width="1%"> </TD>
    <TD width="2%"> </TD>
    <TD width="3%"> </TD>
    <TD width="1%"> </TD>
    <TD width="1%"> </TD>
    <TD width="2%"> </TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="11"><FONT size="1"><B>YEAR ENDED NOVEMBER</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="11"><HR size="1" noshade></TD>
</TR>

<TR valign="bottom">
    <TD nowrap align="left" colspan="2"><FONT size="1">(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)</FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2003</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Revenues</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Investment banking</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>2,400</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">2,572</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">3,677</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Trading and principal investments</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>8,555</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">7,297</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">9,296</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Asset management and securities services</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>1,917</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">1,716</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">1,545</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Interest income</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>10,751</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">11,269</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">16,620</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total revenues</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>23,623</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">22,854</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">31,138</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Interest expense</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>7,600</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">8,868</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">15,327</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Cost of power generation</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>11</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">—</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">—</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Revenues, net of interest expense and cost of power generation</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>16,012</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">13,986</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">15,811</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Operating expenses</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Compensation and benefits</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>7,393</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">6,744</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">7,700</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Amortization of employee initial public offering and acquisition awards</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>122</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">293</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">464</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Brokerage, clearing and exchange fees</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>829</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">852</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">843</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Market development</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>264</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">306</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">406</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Communications and technology</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>478</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">528</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">604</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Depreciation and amortization</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>562</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">617</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">613</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Amortization of goodwill and identifiable intangible assets</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>319</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">127</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">260</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Occupancy</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>722</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">637</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">591</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Professional services and other</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>878</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">629</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">634</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total non-compensation expenses</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>4,052</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">3,696</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">3,951</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total operating expenses</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>11,567</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">10,733</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">12,115</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Pre-tax earnings</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>4,445</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">3,253</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">3,696</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Provision for taxes</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>1,440</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">1,139</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">1,386</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Net earnings</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>3,005</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">2,114</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">2,310</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Earnings per share</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Basic</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>6.15</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">4.27</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">4.53</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Diluted</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>5.87</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">4.03</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">4.26</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Average common shares outstanding</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Basic</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>488.4</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">495.6</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">509.7</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Diluted</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>511.9</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">525.1</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">541.8</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2">The accompanying notes are an integral part of these consolidated financial
statements.
</FONT>
<P align="left"><FONT size="2">68  <I>GOLDMAN SACHS 2003 ANNUAL REPORT</I>
</FONT>

<P align="center"><FONT size="2"> </FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"> </H5><P>

<P align="right"><FONT size="2"><I>Consolidated Statements of Financial Condition</I></FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="3%"> </TD>
    <TD width="79%"> </TD>
    <TD width="3%"> </TD>
    <TD width="2%"> </TD>
    <TD width="1%"> </TD>
    <TD width="3%"> </TD>
    <TD width="3%"> </TD>
    <TD width="2%"> </TD>
    <TD width="1%"> </TD>
    <TD width="3%"> </TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1"><B>AS OF NOVEMBER</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="7"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="left" colspan="2"><FONT size="1">(IN MILLIONS, EXCEPT SHARE AND PER SHARE AMOUNTS)</FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2003</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Assets</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Cash and cash equivalents</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>7,087</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">4,822</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Cash and securities segregated in compliance with U.S. federal and other regulations</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>29,715</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">20,389</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Receivables from brokers, dealers and clearing organizations</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>9,197</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">5,779</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Receivables from customers and counterparties</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>27,180</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">23,159</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Securities borrowed</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>129,118</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">113,579</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Securities purchased under agreements to resell</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>26,856</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">45,772</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
<TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Financial instruments owned, at fair value</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>139,029</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">123,318</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Financial instruments owned and pledged as collateral, at fair value</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>21,690</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">6,457</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total financial instruments owned, at fair value</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>160,719</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">129,775</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
<TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Other assets</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>13,927</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">12,299</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total assets</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>403,799</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">355,574</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR><TD> </TD></TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Liabilities and shareholders’ equity</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Short-term borrowings, including the current portion of long-term borrowings</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>44,202</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">40,638</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Payables to brokers, dealers and clearing organizations</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>3,515</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">1,893</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Payables to customers and counterparties</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>105,513</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">93,697</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Securities loaned</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>17,528</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">12,238</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Securities sold under agreements to repurchase</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>43,084</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">59,919</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Financial instruments sold, but not yet purchased, at fair value</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>102,699</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">83,473</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Other liabilities and accrued expenses</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>8,144</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">6,002</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Long-term borrowings</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>57,482</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">38,711</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total liabilities</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>382,167</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">336,571</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
<TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Commitments, contingencies and guarantees</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
<TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Shareholders’ equity</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Preferred stock, par value $0.01 per share; 150,000,000 shares authorized, no shares
issued and outstanding</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>—</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">—</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Common stock, par value $0.01 per share; 4,000,000,000 shares authorized,
527,371,946 and 515,084,810 shares issued as of November 2003 and
November 2002, respectively, and 473,014,926 and 472,940,724 shares
outstanding as of November 2003 and November 2002, respectively</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>5</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">5</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Restricted stock units and employee stock options</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>2,984</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">3,517</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Nonvoting common stock, par value $0.01 per share; 200,000,000 shares authorized,
no shares issued and outstanding</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>—</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">—</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Additional paid-in capital</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>13,562</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">12,750</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Retained earnings</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>9,914</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">7,259</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Unearned compensation</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>(339</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(845</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Accumulated other comprehensive income/(loss)</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>6</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(122</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Treasury stock, at cost, par value $0.01 per share; 54,357,020 and 42,144,086 shares
as of November 2003 and November 2002, respectively</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>(4,500</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(3,561</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total shareholders’ equity</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>21,632</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">19,003</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total liabilities and shareholders’ equity</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>403,799</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">355,574</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2">The accompanying notes are an integral part of these consolidated financial
statements.
</FONT>
<P align="right"><FONT size="2"><I>GOLDMAN SACHS 2003 ANNUAL REPORT  </I>69</FONT>

<P align="center"><FONT size="2"> </FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"> </H5><P>



<P align="left"><FONT size="2"><I>Consolidated Statements of Changes in Shareholders’ Equity</I>
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="3%"> </TD>
    <TD width="67%"> </TD>
    <TD width="3%"> </TD>
    <TD width="3%"> </TD>
    <TD width="1%"> </TD>
    <TD width="3%"> </TD>
    <TD width="3%"> </TD>
    <TD width="3%"> </TD>
    <TD width="1%"> </TD>
    <TD width="3%"> </TD>
    <TD width="3%"> </TD>
    <TD width="3%"> </TD>
    <TD width="1%"> </TD>
    <TD width="3%"> </TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="11"><FONT size="1"><B>YEAR ENDED NOVEMBER</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="11"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="left" colspan="2"><FONT size="1">(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)</FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2003</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Common stock, par value $0.01 per share</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Balance, beginning of year</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>5</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">5</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">5</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Issued</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>—</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">—</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">—</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Balance, end of year</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>5</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">5</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">5</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
<TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B> </B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Restricted stock units and employee stock options</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Balance, beginning of year</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>3,517</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">4,561</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">4,771</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Issued</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>339</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">507</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">657</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Delivered</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>(714</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(1,293</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(600</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Forfeited</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>(156</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(257</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(267</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Options exercised</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>(2</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(1</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">—</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Balance, end of year</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>2,984</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">3,517</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">4,561</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
<TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B> </B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Additional paid-in capital</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Balance, beginning of year</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>12,750</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">11,766</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">11,116</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Issuance of common stock</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>709</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">865</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">527</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Excess net tax benefit related to delivery of stock-based awards</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>103</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">119</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">123</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Balance, end of year</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>13,562</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">12,750</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">11,766</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
<TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B> </B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Retained earnings</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Balance, beginning of year</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>7,259</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">5,373</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">3,294</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Net earnings</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>3,005</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">2,114</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">2,310</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Dividends declared</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>(350</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(228</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(231</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Balance, end of year</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>9,914</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">7,259</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">5,373</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
<TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B> </B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Unearned compensation</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Balance, beginning of year</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>(845</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(1,220</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(1,878</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Restricted stock units granted</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>(6</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(387</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(375</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Restricted stock units forfeited</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>48</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">95</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">108</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Amortization of restricted stock units</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>464</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">667</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">925</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Balance, end of year</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>(339</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(845</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(1,220</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
<TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B> </B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Accumulated other comprehensive income/(loss)</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Balance, beginning of year</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>(122</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(168</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(130</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Currency translation adjustment, net of tax</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>128</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">46</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(38</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Balance, end of year</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>6</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(122</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(168</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
<TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B> </B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Treasury stock, at cost, par value $0.01 per share</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Balance, beginning of year</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>(3,561</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(2,086</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(648</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Repurchased</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>(939</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(1,475</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(1,438</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Balance, end of year</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>(4,500</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(3,561</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(2,086</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>21,632</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">19,003</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">18,231</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2">The accompanying notes are an integral part of these consolidated financial
statements.
</FONT>
<P align="left"><FONT size="2">70 <I>GOLDMAN SACHS 2003 ANNUAL REPORT</I>
</FONT>

<P align="center"><FONT size="2"> </FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"> </H5><P>

<P align="right"><FONT size="2"><I>Consolidated Statements of Cash Flows</I></FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="3%"> </TD>
    <TD width="3%"> </TD>
    <TD width="61%"> </TD>
    <TD width="3%"> </TD>
    <TD width="3%"> </TD>
    <TD width="1%"> </TD>
    <TD width="4%"> </TD>
    <TD width="3%"> </TD>
    <TD width="3%"> </TD>
    <TD width="1%"> </TD>
    <TD width="4%"> </TD>
    <TD width="3%"> </TD>
    <TD width="3%"> </TD>
    <TD width="1%"> </TD>
    <TD width="4%"> </TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="11"><FONT size="1"><B>YEAR ENDED NOVEMBER</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="11"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD nowrap colspan="3"><FONT size="1">(IN MILLIONS)</FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2003</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Cash flows from operating activities</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"><B> </B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Net earnings</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>3,005</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">2,114</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">2,310</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Noncash items included in net earnings</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"><B> </B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Depreciation and amortization</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>562</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">617</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">613</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Amortization of goodwill and identifiable intangible assets</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>319</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">127</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">260</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Deferred income taxes</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>93</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">230</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">52</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Stock-based compensation</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>711</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">639</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">789</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Changes in operating assets and liabilities</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"><B> </B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Cash and securities segregated in compliance with
U.S. federal and other regulations</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>(9,311</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">1,745</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(5,002</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Net receivables from brokers, dealers and clearing organizations</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>(1,797</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(2,423</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">931</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Net payables to customers and counterparties</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>7,826</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">5,265</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">20,056</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Securities borrowed, net of securities loaned</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>(10,249</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(7,039</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(21,098</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Securities sold under agreements to repurchase, net of
securities purchased under agreements to resell</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>2,081</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">2,429</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">18,046</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Financial instruments owned, at fair value</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>(28,920</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(20,977</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(14,390</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Financial instruments sold, but not yet purchased, at fair value</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>19,227</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">8,756</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">1,809</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Other, net</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>798</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(1,560</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(1,511</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Net cash (used for)/provided by operating activities</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>(15,655</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(10,077</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">2,865</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<tr><td> </td></tr>


<TR valign="bottom">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Cash flows from investing activities</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"><B> </B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Property, leasehold improvements and equipment</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>(592</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(1,008</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(1,370</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Business combinations, net of cash acquired</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>(697</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(68</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(314</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Other investments</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>(1,372</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(27</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(225</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Net cash used for investing activities</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>(2,661</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(1,103</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(1,909</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<tr><td> </td></tr>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Cash flows from financing activities</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"><B> </B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Short-term borrowings, net</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>729</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">6,354</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">1,261</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Issuance of long-term borrowings</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>28,238</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">12,740</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">6,694</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Repayment of long-term borrowings, including the
current portion of long-term borrowings</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>(7,471</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(8,358</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(4,208</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Derivative contracts with a financing element</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>231</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">—</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">—</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Common stock repurchased</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>(939</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(1,475</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(1,438</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Dividends paid</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>(350</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(228</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(231</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Proceeds from issuance of common stock</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>143</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">60</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">5</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Net cash provided by financing activities</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>20,581</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">9,093</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">2,083</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Net increase/(decrease) in cash and cash equivalents</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>2,265</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(2,087</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">3,039</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>


<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Cash and cash equivalents, beginning of year</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>4,822</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">6,909</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">3,870</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Cash and cash equivalents, end of year</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>7,087</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">4,822</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">6,909</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

</TABLE>
</CENTER>
<hr noshade size="1" align="left" width="70">

<div align="left"><FONT size="2">SUPPLEMENTAL DISCLOSURES:
</FONT></div>

<DIV align="left"><FONT size="2">Cash payments for interest, net of capitalized interest, were $7.21 billion,
$8.92 billion and $14.98 billion for the years ended November 2003,
November 2002 and November 2001, respectively.
</FONT></DIV>
<DIV><FONT size="1"> </FONT></DIV>
<DIV align="left"><FONT size="2">Cash payments for income taxes, net of refunds, were $846 million, $1.22
billion and $1.30 billion for the years ended November 2003, November
2002 and November 2001, respectively.
</FONT></DIV>
<DIV> </DIV>
<DIV align="left"><FONT size="2"><I>Noncash activities:</I></FONT></DIV>
<DIV align="left"><FONT size="2">The value of common stock issued in connection with business combinations was
$165 million, $47 million and $223 million for the years ended
November 2003, November 2002 and November 2001, respectively. In addition, the
firm assumed $584 million of long-term borrowings in connection with business combinations for the year ended November 2003.
</FONT></DIV>
<P align="left"><FONT size="2">The accompanying notes are an integral part of these consolidated financial
statements.
</FONT>
<P align="right"><FONT size="2"><I>GOLDMAN SACHS 2003 ANNUAL REPORT
</I>  71</FONT>

<P align="center"><FONT size="2"> </FONT>
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"> </H5><P>



<P align="left"><FONT size="2"><I>Consolidated Statements of Comprehensive Income</I>
</FONT>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="67%"> </TD>
    <TD width="5%"> </TD>
    <TD width="2%"> </TD>
    <TD width="1%"> </TD>
    <TD width="3%"> </TD>
    <TD width="5%"> </TD>
    <TD width="2%"> </TD>
    <TD width="1%"> </TD>
    <TD width="3%"> </TD>
    <TD width="5%"> </TD>
    <TD width="2%"> </TD>
    <TD width="1%"> </TD>
    <TD width="3%"> </TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="11"><FONT size="1"><B>YEAR ENDED NOVEMBER</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="11"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD nowrap><FONT size="1">(IN MILLIONS)</FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2003</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Net earnings</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>3,005</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">2,114</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">2,310</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Currency translation adjustment, net of tax</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>128</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">46</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(38</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Comprehensive income</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>3,133</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">2,160</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">2,272</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2">The accompanying notes are an integral part of these consolidated financial
statements.
</FONT>
<P align="left"><FONT size="2">72  <I>GOLDMAN SACHS 2003 ANNUAL REPORT</I>
</FONT>
<P align="center"><FONT size="2"> </FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"> </H5><P>
<P align="left"><FONT size="2"><I>Notes to Consolidated Financial Statements</I>
</FONT>

<P align="left"><FONT size="2"><B><U>NOTE 1</U></B></FONT>

<P align="left"><FONT size="2"><B>DESCRIPTION OF BUSINESS</B></FONT>

<P align="left"><FONT size="2">The Goldman Sachs Group, Inc. (Group Inc.), a
Delaware corporation, together with its consolidated
subsidiaries (collectively, the firm), 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.
</FONT>
<P align="left"><FONT size="2">The firm’s activities are divided into three segments:
</FONT>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="3%"><FONT size="2"> </FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">•</FONT></TD>
    <TD width="3%"><FONT size="2"> </FONT></TD>
    <TD width="93%"><FONT size="2">INVESTMENT BANKING – The firm provides a broad
range of investment banking services to a diverse
group of corporations, financial institutions, governments and individuals.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2"> </FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">•</FONT></TD>
    <TD width="3%"><FONT size="2"> </FONT></TD>
    <TD width="93%"><FONT size="2">TRADING AND PRINCIPAL INVESTMENTS – The firm
facilitates customer transactions 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 derivatives on such products.
In addition, the firm engages in floor-based and electronic
market making as a specialist on U.S. equities and
options exchanges and clears customer transactions
on major stock, options and futures exchanges
worldwide. In connection with the firm’s merchant
banking and other investment activities, the firm
makes principal investments directly and through
funds that the firm raises and manages.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2"> </FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">•</FONT></TD>
    <TD width="3%"><FONT size="2"> </FONT></TD>
    <TD width="93%"><FONT size="2">ASSET MANAGEMENT AND SECURITIES
SERVICES –
The firm offers a broad array of investment strategies, advice and planning across all major asset
classes to a diverse client base of institutions and
individuals and provides prime brokerage, financing
services and securities lending services to mutual
funds, pension funds, hedge funds, foundations,
endowments and high-net-worth individuals.</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">The firm made certain changes to its segment reporting
structure in 2003. These changes included reclassifying
the following from Asset Management and Securities
Services to Trading and Principal Investments:
</FONT>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="3%"><FONT size="2"> </FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">•</FONT></TD>
    <TD width="3%"><FONT size="2"> </FONT></TD>
    <TD width="93%"><FONT size="2">equity commissions and clearing and execution fees;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2"> </FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">•</FONT></TD>
    <TD width="3%"><FONT size="2"> </FONT></TD>
    <TD width="93%"><FONT size="2">merchant banking overrides; and</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2"> </FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">•</FONT></TD>
    <TD width="3%"><FONT size="2"> </FONT></TD>
    <TD width="93%"><FONT size="2">the matched book businesses.</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">These reclassifications did not affect the firm’s previously
reported consolidated results of operations, financial condition or cash flows. See Note 15 for further information
regarding the firm’s segments.
</FONT>

<P align="left"><FONT size="2"><B><U>NOTE 2</U></B>
</FONT>
<P align="left"><FONT size="2"><B>SIGNIFICANT ACCOUNTING POLICIES</B>
</FONT>

<P align="left"><FONT size="2"><B>Basis of Presentation</B>
</FONT>
<P align="left"><FONT size="2">These consolidated financial statements include the
accounts of Group Inc. and all other entities in which the
firm has a controlling financial interest. All material intercompany transactions and
balances have been eliminated. The firm determines whether it has a controlling
financial interest in an entity by first evaluating whether
the entity is a voting interest entity, a variable interest
entity (VIE), a special-purpose entity (SPE) or a qualifying special-purpose entity (QSPE) under generally
accepted accounting principles.
</FONT>
<P align="left"><FONT size="2">Voting interest entities are entities in which the total
equity investment at risk is sufficient to enable each entity
to finance itself independently and provides the equity
holders with the obligation to absorb losses, the right to
receive residual returns and the right to make decisions
about the entity’s activities.
</FONT>
<P align="left"><FONT size="2">Voting interest entities are consolidated in accordance
with Accounting Research Bulletin (ARB) No. 51,
“Consolidated Financial Statements,” as amended. ARB
No. 51 states that the usual condition for a controlling
financial interest in an entity is ownership of a majority
voting interest. Accordingly, the firm consolidates voting
interest entities in which it has all, or a majority of, the
</FONT>
<P align="right"><FONT size="2"><I>GOLDMAN SACHS 2003 ANNUAL REPORT  </I>73</FONT>

<P align="center"><FONT size="2"> </FONT>
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"> </H5><P>



<P align="left"><FONT size="2"><I>Notes to Consolidated Financial Statements</I>
</FONT>

<P align="left"><FONT size="2">voting interest. The firm’s principal U.S. and
international subsidiaries include Goldman, Sachs & Co.
(GS&Co.), J. Aron & Company and Spear, Leeds &
Kellogg, L.P. (SLK) in New York, Goldman Sachs
International (GSI) in London and Goldman Sachs
(Japan) Ltd. (GSJL) in Tokyo.
</FONT>
<P align="left"><FONT size="2">As defined in Financial Accounting Standards Board
(FASB) Interpretation (FIN) No. 46, “Consolidation of
Variable Interest Entities,” VIEs are entities that lack one
or more of the characteristics of a voting interest entity
described above. Prior to the issuance of FIN No. 46, VIEs
were commonly referred to as SPEs. FIN No. 46 states
that a controlling financial interest in an entity is present
when an enterprise has a variable interest, or combination
of variable interests, that will absorb a majority of the
entity’s expected losses, receive a majority of the entity’s
expected residual returns, or both. The enterprise with a
controlling financial interest, known as the primary beneficiary, consolidates the VIE under FIN No. 46.
</FONT>
<P align="left"><FONT size="2">In January 2003, the FASB issued FIN No. 46. In accordance with its original provisions, the firm adopted FIN
No. 46 immediately for all VIEs created after January 31,
2003. For VIEs created before February 1, 2003 (pre-existing VIEs), the firm was initially required to adopt
FIN No. 46 no later than November 2003. In October
2003, the FASB deferred the effective date of FIN No. 46
for pre-existing VIEs to no later than February 2004 (the
firm’s first quarter of fiscal 2004). In December 2003, the
FASB issued a revision to FIN No. 46 (FIN No. 46-R),
which incorporated the October 2003 deferral provisions
and clarified and revised the accounting guidance for
VIEs. Under its transition provisions, early application of
FIN No. 46 or FIN No. 46-R to some or all VIEs was
permitted. The firm applied either FIN No. 46 or FIN
No. 46-R to substantially all pre-existing VIEs in which
it held a variable interest as of November 2003. All VIEs,
regardless of when created, are required to be evaluated
under FIN No. 46-R no later than May 2004.
</FONT>
<P align="left"><FONT size="2">In accordance with Statement of Financial Accounting
Standards (SFAS) No. 140, “Accounting for Transfers
and Servicing of Financial Assets and Extinguishments of
Liabilities,” the firm does not consolidate QSPEs. QSPEs
are passive entities that hold financial assets transferred
to them and are commonly used in mortgage and other
securitization transactions. Prior to the adoption of FIN
No. 46 or FIN No. 46-R, as applicable, the firm consolidated all nonqualifying SPEs if the firm controlled the
SPE, held a majority of the SPE’s substantive risks and
rewards, or had transferred assets to the SPE and independent investors had not made a substantive majority
equity investment in legal form.
</FONT>
<P align="left"><FONT size="2">When the firm does not have a controlling financial interest in an entity but exerts significant influence over the
entity’s operating and financial policies (generally defined
as owning a voting or economic interest of 20% to 50%),
the firm accounts for its investment in accordance with
the equity method of accounting prescribed by
Accounting Principles Board (APB) Opinion No. 18,
“The Equity Method of Accounting for Investments in
Common Stock.”
</FONT>
<P align="left"><FONT size="2">If the firm does not have a controlling financial interest
in, or exert significant influence over, an entity, the firm
accounts for its investment at fair value.
</FONT>
<P align="left"><FONT size="2">The firm’s financial interests in, and
derivative transactions with, nonconsolidated SPEs and VIEs are accounted
for at fair value, in the same manner as other financial
instruments. As of November 2003, the firm had no
material additional financial commitments or guarantees
in respect of these entities.
</FONT>
<P align="left"><FONT size="2">The firm also has formed numerous nonconsolidated
merchant banking funds with third-party investors that
are typically organized as limited partnerships. The firm
acts as general partner for these funds and does not hold
a majority of the economic interests in any fund. Where
the firm holds an interest that is significant to a fund, it is
subject to removal as general partner. The firm’s aggregate investments in funds in which it holds a significant
interest was $1.57 billion and $1.42 billion as of
November 2003 and November 2002, respectively. Such
fund investments are included in “Financial instruments
owned, at fair value” in the consolidated statements of
financial condition. Total assets in these funds were
approximately $13 billion as of September 30, 2003 (the
most recent investment fund reporting date).
</FONT>
<P align="left"><FONT size="2">These consolidated financial
statements have been prepared in accordance with generally accepted accounting
principles that require management to make certain estimates and assumptions regarding fair
value measurement, the accounting for goodwill and identifiable
intangible assets, the provision for potential losses that
may arise from litigation and regulatory proceedings, and
other matters that affect the consolidated financial statements and related disclosures. These estimates and
assumptions are based on the best available information;
nonetheless, actual results could be materially different
from these estimates.
</FONT>
<P align="left"><FONT size="2">Unless otherwise stated herein, all references to
November 2003, November 2002 and November 2001
refer to the firm’s fiscal years ended, or the dates, as the
context requires, November 28, 2003, November 29,
</FONT>
<P align="left"><FONT size="2">74  <I>GOLDMAN SACHS 2003 ANNUAL REPORT</I>
</FONT>

<P align="center"><FONT size="2"> </FONT>
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<P align="right"><FONT size="2"><I>Notes to Consolidated Financial Statements</I></FONT>

<P align="left"><FONT size="2">2002 and November 30, 2001, respectively. Certain
reclassifications have been made to previously reported
amounts to conform to the current presentation.
</FONT>
<P align="left"><FONT size="2"><B>Revenue Recognition</B>
</FONT>
<P align="left"><FONT size="2">INVESTMENT BANKING
</FONT>
<P align="left"><FONT size="2">Underwriting revenues and fees from mergers and acquisitions and other corporate finance advisory assignments
are recorded when the services related to the underlying
transaction are completed under the terms of the engagement. Expenses associated with such transactions are
deferred until the related revenue is recognized or the
engagement is otherwise concluded. Underwriting revenues are presented net of related expenses. Expenses
associated with advisory transactions are recorded as non-compensation expenses, net of client reimbursements.
</FONT>
<P align="left"><FONT size="2">REPURCHASE AGREEMENTS AND
COLLATERALIZED FINANCING ARRANGEMENTS
</FONT>
<P align="left"><FONT size="2">Securities purchased under agreements to resell and securities sold under agreements to repurchase, principally
U.S. government, federal agency and investment-grade
foreign sovereign obligations, represent short-term collateralized financing
transactions and are carried in the consolidated statements of financial condition at their
contractual amounts plus accrued interest. These
amounts are presented on a net-by-counterparty basis
when the requirements of FIN No. 41, “Offsetting of
Amounts Related to Certain Repurchase and Reverse
Repurchase Agreements,” are satisfied. The firm takes
possession of securities purchased under agreements to
resell, makes delivery of securities sold under agreements
to repurchase, monitors the market value of these securities on a daily basis and
delivers or obtains additional collateral as appropriate.
</FONT>
<P align="left"><FONT size="2">Securities borrowed and loaned are recorded based on
the amount of cash collateral advanced or received. These
transactions are generally collateralized by cash, securities or letters of credit. The firm takes possession of securities borrowed, makes delivery of securities loaned,
monitors the market value of securities borrowed and
loaned, and delivers or obtains additional collateral as
appropriate. Income or expense on repurchase agreements and collateralized financing arrangements is recognized as interest over the life of the transaction.
</FONT>
<P align="left"><FONT size="2">FINANCIAL INSTRUMENTS
</FONT>
<P align="left"><FONT size="2">The consolidated statements of financial condition generally reflect purchases and sales of financial instruments on
a trade-date basis.
</FONT>
<P align="left"><FONT size="2">“Financial instruments owned, at fair value” and
“Financial instruments sold, but not yet purchased, at
fair value” in the consolidated statements of financial
condition consist of financial instruments carried at fair
value or amounts that approximate fair value, with
related unrealized gains or losses recognized in the firm’s
results of operations. The fair value of a financial instrument is the amount at which the instrument could be
exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.
</FONT>
<P align="left"><FONT size="2">In determining fair value, the firm separates financial
instruments into three categories—cash (i.e., nonderivative) trading instruments, derivative contracts and principal investments.
</FONT>
<P align="left"><FONT size="2">The fair values of cash trading instruments are generally
obtained from quoted market prices in active markets,
broker or dealer price quotations, or alternative pricing
sources with a reasonable level of price transparency. The
types of instruments valued in this manner include U.S.
government and agency securities, other sovereign government
obligations, liquid mortgage products, investment-grade corporate bonds, listed equities, money market
securities, state, municipal and provincial obligations,
and physical commodities.
</FONT>
<P align="left"><FONT size="2">Certain cash trading instruments trade infrequently and,
therefore, have little or no price transparency. Such
instruments may include certain high-yield debt, corporate bank loans, mortgage whole loans and distressed
debt. The firm values these instruments using methodologies such as the present value of known or estimated
cash flows and generally does not adjust underlying valuation assumptions unless there is substantive evidence
supporting a change in the value of the underlying instrument or valuation assumptions (such as similar market
transactions, changes in financial ratios and changes in
the credit ratings of the underlying companies).
</FONT>
<P align="left"><FONT size="2">Cash trading instruments owned by the firm (long positions) are marked to bid prices and instruments sold but
not yet purchased (short positions) are marked to offer
prices. If liquidating a position is reasonably expected to
affect its prevailing market price, the valuation is adjusted
generally based on market evidence or predetermined
policies. In certain circumstances, such as for highly illiquid positions, management’s estimates are used to determine this adjustment.
</FONT>
<P align="left"><FONT size="2">The fair values of the firm’s derivative contracts include
cash that the firm has paid and received (for example,
option premiums or cash paid or received pursuant to
credit support agreements) and consist of exchange-traded and over-the-counter (OTC) derivatives. The fair
</FONT>
<P align="right"><FONT size="2"><I>GOLDMAN SACHS 2003 ANNUAL REPORT  </I>75</FONT>

<P align="center"><FONT size="2"> </FONT>
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<P align="left"><FONT size="2"><I>Notes to Consolidated Financial Statements</I>
</FONT>

<P align="left"><FONT size="2">values of the firm’s exchange-traded derivatives are generally determined from quoted market prices.
OTC derivatives are valued using valuation models. The firm uses a
variety of valuation models including the present value of
known or estimated cash flows, option-pricing models
and option-adjusted spread models. The valuation models used to derive the fair values of the firm’s
OTC derivatives require inputs including contractual terms, market
prices, yield curves, credit curves, measures of volatility,
prepayment rates and correlations of such inputs.
</FONT>
<P align="left"><FONT size="2">At the inception of an OTC derivative contract (day one),
the firm values the contract at the model value if the firm
can verify all of the significant model inputs to observable
market data and verify the model value to market transactions. When appropriate, valuations are adjusted to
take account of various factors such as liquidity, bid/offer
and credit considerations. These adjustments are generally based on market evidence or predetermined policies.
In certain circumstances, such as for highly illiquid positions, management’s estimates are used to determine
these adjustments.
</FONT>
<P align="left"><FONT size="2">Where the firm cannot verify all of the significant model
inputs to observable market data and verify the model
value to market transactions, the firm values the contract
at the transaction price at inception and, consequently,
records no day one gain or loss in accordance with
Emerging Issues Task Force (EITF) Issue No. 02-3, “Issues
Involved in Accounting for Derivative Contracts Held
for Trading Purposes and Contracts Involved in Energy
Trading and Risk Management Activities.”
</FONT>
<P align="left"><FONT size="2">Following day one, the firm adjusts the inputs to valuation models only to the extent that changes in such inputs
can be verified by similar market transactions, third-party
pricing services and/or broker quotes or can be derived
from other substantive evidence such as empirical market
data. In circumstances where the firm cannot verify the
model value to market transactions, it is possible that
a different valuation model could produce a materially
different estimate of fair value.
</FONT>
<P align="left"><FONT size="2">In valuing corporate and real estate principal investments,
the firm’s portfolio is separated into investments in private
companies and investments in public companies, including the firm’s investment in the convertible preferred
stock of Sumitomo Mitsui Financial Group, Inc. (SMFG).
</FONT>
<P align="left"><FONT size="2">The firm’s private principal investments, by their nature,
have little to no price transparency. Such investments
are initially carried at cost as an approximation of fair
value. Adjustments to carrying value are made if there
are third-party transactions evidencing a change in value.
Downward adjustments are also made, in the absence of
third-party transactions, if it is determined that the
expected realizable value of the investment is less than the
carrying value. In reaching that determination, many
factors are considered, including, but not limited to, the
operating cash flows and financial performance of the
companies or properties relative to budgets or projections,
trends within sectors and/or regions, 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.
</FONT>
<P align="left"><FONT size="2">The firm’s public principal investments, which tend to be
large, concentrated holdings that resulted from initial
public offerings or other corporate transactions, are valued using quoted market prices discounted for restrictions on sale. If liquidating a position is reasonably
expected to affect market prices, valuations are adjusted
accordingly based on predetermined written policies.
</FONT>
<P align="left"><FONT size="2">The firm’s investment in the convertible preferred stock
of SMFG is carried at fair value, which is derived from a
model that incorporates SMFG’s common stock price
and credit spreads, the impact of the transfer restrictions
on the firm’s investment and the downside protection on
the conversion strike price.
</FONT>
<P align="left"><FONT size="2">In general, transfers of financial assets are accounted for
as sales under SFAS No. 140 when the firm has relinquished control over the transferred assets. For transfers
accounted for as sales, any related gains or losses are recognized in net revenues. Transfers that are not accounted
for as sales are accounted for as repurchase agreements or
collateralized financing arrangements, with the related
interest expense recognized in net revenues over the lives
of the transactions.
</FONT>
<P align="left"><FONT size="2">COMMISSIONS
</FONT>
<P align="left"><FONT size="2">The firm generates commissions from executing and
clearing client transactions on stock, options and futures
markets worldwide. These commissions are recorded on
a trade-date basis in “Trading and principal investments”
in the consolidated statements of earnings.
</FONT>
<P align="left"><FONT size="2">POWER GENERATION
</FONT>
<P align="left"><FONT size="2">Power generation revenues are included in “Trading and
principal investments” in the consolidated statements of
earnings when power is delivered. “Cost of power generation” in the consolidated statement of earnings includes
all of the direct costs of the firm’s power plant operations
(e.g., fuel, operations and maintenance), as well as the
depreciation and amortization associated with the plant
and related contractual assets.
</FONT>
<P align="left"><FONT size="2">76  <I>GOLDMAN SACHS 2003 ANNUAL REPORT</I>
</FONT>

<P align="center"><FONT size="2"> </FONT>
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<P align="right"><FONT size="2"><I>Notes to Consolidated Financial Statements</I></FONT>

<P align="left"><FONT size="2">ASSET MANAGEMENT
</FONT>
<P align="left"><FONT size="2">Asset management fees are generally recognized over the
period that the related service is provided based upon
average net asset values. In certain circumstances, the
firm is entitled to receive incentive fees when the return
on assets under management exceeds certain benchmark
returns or other performance targets. Incentive fees are
generally based on investment performance over a
twelve-month period and are not subject to adjustment
once the measurement period ends. Accordingly, incentive fees are recognized in the consolidated statements
of earnings when the measurement period ends. Asset
management fees and incentive fees are included in
“Asset management and securities services” in the consolidated statements of earnings.
</FONT>
<P align="left"><FONT size="2">MERCHANT BANKING OVERRIDES
</FONT>
<P align="left"><FONT size="2">The firm is entitled to receive merchant banking overrides
(i.e., an increased share of a fund’s income and gains)
when the return on the funds’ investments exceeds certain
threshold returns. Overrides are based on investment performance over the life of each merchant banking fund,
and future investment underperformance may require

amounts previously distributed to the firm to be returned
to the funds. Accordingly, overrides are recognized in the
consolidated statements of earnings only when all material contingencies have been resolved. Overrides are
included in “Trading and principal investments” in the
consolidated statements of earnings.
</FONT>
<P align="left"><FONT size="2"><B>Cash and Cash Equivalents</B>
</FONT>
<P align="left"><FONT size="2">The firm defines cash equivalents as highly liquid
overnight deposits held in the ordinary course of business.
</FONT>
<P align="left"><FONT size="2"><B>Goodwill</B>
</FONT>
<P align="left"><FONT size="2">Goodwill is the cost of acquired companies in excess of
the fair value of identifiable net assets at acquisition date.
Prior to December 1, 2001, goodwill was amortized over
periods of 15 to 20 years on a straight-line basis. Effective
December 1, 2001, the firm adopted SFAS No. 142,
“Goodwill and Other Intangible Assets”; consequently,
goodwill is no longer amortized but, instead, is tested at
least annually for impairment. An impairment loss is triggered if the estimated fair value of an operating segment
is less than its estimated net book value. Such loss is calculated as the difference between the estimated fair value
of goodwill and its carrying value.
</FONT>
<P align="left"><FONT size="2"><B>Identifiable Intangible Assets</B>
</FONT>
<P align="left"><FONT size="2">Identifiable intangible assets, which consist primarily of
customer lists and specialist rights, are amortized over
their useful lives. Identifiable intangible assets are tested
for potential impairment whenever events or changes in
circumstances suggest that an asset’s or asset group’s carrying value may not be fully recoverable in accordance
with SFAS No. 144, “Accounting for the Impairment or
Disposal of Long-Lived Assets.” An impairment loss,
calculated as the difference between the estimated fair
value and the carrying value of an asset or asset group,
is recognized if the expected undiscounted cash flows
relating to the asset or asset group are less than the corresponding carrying value.
</FONT>
<P align="left"><FONT size="2"><B>Property, Leasehold Improvements
and Equipment</B>
</FONT>
<P align="left"><FONT size="2">Property, leasehold improvements and equipment, net of accumulated depreciation
and amortization, are included in
“Other assets” in the consolidated statements of financial condition. Effective
December 1, 2001, the firm changed to
the straight-line method of depreciation for certain property, leasehold
improvements and equipment placed in service
on or after December 1, 2001.
</FONT>
<P align="left"><FONT size="2">The firm’s depreciation and amortization is generally computed using the
methods set forth below:
</FONT>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="24%"> </TD>
    <TD width="3%"> </TD>
    <TD width="16%"> </TD>
    <TD width="3%"> </TD>
    <TD width="16%"> </TD>
    <TD width="3%"> </TD>
    <TD width="16%"> </TD>
    <TD width="3%"> </TD>
    <TD width="16%"> </TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center"><FONT size="1"><B>PROPERTY AND</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center"><FONT size="1"><B>CERTAIN INTERNAL USE</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center"><FONT size="1"><B>EQUIPMENT</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>LEASEHOLD IMPROVEMENTS</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center"><FONT size="1"><B>SOFTWARE COSTS</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center"><FONT size="1"><B>TERM OF LEASE GREATER</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center"><FONT size="1"><B>TERM OF LEASE LESS</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center"><FONT size="1"><B>THAN USEFUL LIFE</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center"><FONT size="1"><B>THAN USEFUL LIFE</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">Placed in service
prior to December 1, 2001</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Accelerated cost<BR>
recovery
</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="left" valign="top"><FONT size="2">Accelerated cost<BR>
recovery
</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="left" valign="top"><FONT size="2">Straight-line over
the term of the
lease
</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="left" valign="top"><FONT size="2">Straight-line over
the useful life of
the asset</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="left" valign="top"><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="left" valign="top"><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="left" valign="top"><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="left" valign="top"><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">Placed in service on
or after December 1, 2001</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Straight-line over
the useful life of
the asset
</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="left" valign="top"><FONT size="2">Straight-line over
the useful life of
the asset
</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="left" valign="top"><FONT size="2">Straight-line over
the term of the
lease
</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="left" valign="top"><FONT size="2">Straight-line over
the useful life of
the asset</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="right"><FONT size="2"><I>GOLDMAN SACHS 2003 ANNUAL REPORT </I>77</FONT>

<P align="center"><FONT size="2"> </FONT>
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<P align="left"><FONT size="2"><I>Notes to Consolidated Financial Statements</I>
</FONT>

<P align="left"><FONT size="2"><B>Earnings Per Share</B>
</FONT>
<P align="left"><FONT size="2">Basic earnings per share (EPS) is calculated by dividing
net earnings by the weighted average number of common
shares outstanding. Common shares outstanding includes
common stock and restricted stock units for which no
future service is required as a condition to the delivery of
the underlying common stock. Diluted EPS includes the
determinants of basic EPS and, in addition, reflects the
dilutive effect of the common stock deliverable pursuant
to stock options and restricted stock units for which
future service is required as a condition to the delivery of
the underlying common stock.
</FONT>
<P align="left"><FONT size="2"><B>Stock-Based Compensation</B>
</FONT>
<P align="left"><FONT size="2">Effective for fiscal 2003, the firm began to account for
stock-based employee compensation in accordance with
the fair-value method prescribed by SFAS No. 123,
“Accounting for Stock-Based Compensation,” as
amended by SFAS No. 148, “Accounting for Stock-Based
Compensation—Transition and Disclosure,” using the
prospective adoption method. Under this method of
adoption, compensation expense is recognized over the
relevant service period based on the fair value of stock
options and restricted stock units granted for fiscal 2003
and future years. No unearned compensation is included
in “Shareholders’ equity” for such stock options and
restricted stock units granted. Rather, such stock options
and restricted stock units are included in “Shareholders’
equity” under SFAS No. 123 when services required
from employees in exchange for the awards are rendered
and expensed. Adoption of SFAS No. 123 did not have
a material effect on the firm’s financial condition, results
of operations or cash flows.
</FONT>
<P align="left"><FONT size="2">Compensation expense resulting from stock options and
restricted stock units granted for the years ended
November 2002, November 2001 and prior years was,
and continues to be, accounted for under the intrinsic-value-based method prescribed by APB Opinion No.25,
“Accounting for Stock Issued to Employees,” as permitted
by SFAS No. 123. Therefore, no compensation expense
was, or will be, recognized for those unmodified stock
options issued for years prior to fiscal 2003 that had
no intrinsic value on the date of grant. Compensation
expense for restricted stock units issued for the years prior
to fiscal 2003 was, and continues to be, recognized over
the relevant service periods using amortization schedules
based on the applicable vesting provisions.
</FONT>
<P align="left"><FONT size="2">If the firm were to recognize compensation expense over the relevant service
period under the fair-value method of SFAS
No. 123 with respect to stock options granted for the year ended November 2002
and all prior years, net earnings
would have decreased, resulting in pro forma net earnings and EPS as presented
below:
</FONT>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="3%"> </TD>
    <TD width="76%"> </TD>
    <TD width="3%"> </TD>
    <TD width="1%"> </TD>
    <TD width="1%"> </TD>
    <TD width="2%"> </TD>
    <TD width="3%"> </TD>
    <TD width="1%"> </TD>
    <TD width="1%"> </TD>
    <TD width="2%"> </TD>
    <TD width="3%"> </TD>
    <TD width="1%"> </TD>
    <TD width="1%"> </TD>
    <TD width="2%"> </TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="11"><FONT size="1"><B>YEAR ENDED NOVEMBER</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="11"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD nowrap colspan="2"><FONT size="1">(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)</FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2003</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Net earnings, as reported</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>3,005</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">2,114</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">2,310</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">

<TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Add:
Stock-based employee compensation expense, net of related
tax<br>
effects, included in reported net earnings</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>458</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">416</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">499</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Deduct: Stock-based employee compensation expense, net of related tax
effects, <br>determined under the fair-value method for all awards</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>(782</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(785</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(844</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Pro forma net earnings</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>2,681</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">1,745</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">1,965</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">EPS, as reported</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Basic</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>6.15</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">4.27</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">4.53</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Diluted</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>5.87</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">4.03</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">4.26</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Pro forma EPS</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Basic</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>5.49</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">3.52</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">3.86</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Diluted</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>5.24</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">3.32</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">3.63</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2">78  <I>GOLDMAN SACHS 2003 ANNUAL REPORT</I>
</FONT>

<P align="center"><FONT size="2"> </FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"> </H5><P>

<P align="right"><FONT size="2"><I>Notes to Consolidated Financial Statements</I></FONT>

<P align="left"><FONT size="2"><B>Income Taxes</B>
</FONT>
<P align="left"><FONT size="2">Deferred tax assets and liabilities are recognized for temporary differences between the financial reporting and
tax bases of the firm’s assets and liabilities. Valuation
allowances are established to reduce deferred tax assets
to the amount that more likely than not will be realized.
The firm’s tax assets and liabilities are presented as a
component of “Other assets” and “Other liabilities and
accrued expenses,” respectively, in the consolidated statements of financial condition.
</FONT>
<P align="left"><FONT size="2"><B>Foreign Currency Translation</B>
</FONT>
<P align="left"><FONT size="2">Assets and liabilities denominated in non-U.S. currencies
are translated at rates of exchange prevailing on the date
of the consolidated statement of financial condition, and
revenues and expenses are translated at average rates of
exchange for the fiscal year. Gains or losses on translation
of the financial statements of a non-U.S. operation, when
the functional currency is other than the U.S. dollar, are
included, net of hedges, on the consolidated statements of
comprehensive income. Hedge effectiveness is assessed
based on changes in forward exchange rates; accordingly,
forward points are reflected as a component of the currency translation adjustment in the consolidated statements of comprehensive income. Foreign currency
remeasurement gains or losses on transactions in non-functional currencies are included in the consolidated
statements of earnings.
</FONT>
<P align="left"><FONT size="2"><B>Recent Accounting Developments</B>
</FONT>
<P align="left"><FONT size="2">In June 2002, the FASB issued SFAS No. 146,
“Accounting for Costs Associated with Exit or Disposal
Activities.” The statement specifies the accounting for
certain employee termination benefits, contract termination costs and costs to consolidate facilities or relocate
employees and is effective for exit and disposal activities
initiated after December 31, 2002. Adoption of this
statement did not have a material effect on the firm’s
financial condition, results of operations or cash flows.
</FONT>
<P align="left"><FONT size="2">In November 2002, the FASB issued FIN No. 45,
“Guarantor’s Accounting and Disclosure Requirements for
Guarantees, Including Indirect Guarantees of Indebtedness
of Others.” FIN No. 45 specifies the disclosures to be made
about obligations under certain issued guarantees and
requires a liability to be recognized for the fair value of a
guarantee obligation. The recognition and measurement
provisions of the interpretation apply prospectively to
guarantees issued after December 31, 2002. The firm
adopted the disclosure provisions effective beginning with
the firm’s first fiscal quarter in 2003. Adoption of the
recognition and measurement provisions did not have a
material effect on the firm’s financial condition or results of
operations. See Note 6 for further information regarding
the firm’s commitments, contingencies and guarantees.
</FONT>
<P align="left"><FONT size="2">In November 2002, the EITF reached a consensus on
EITF Issue No. 02-3, which precludes mark-to-market
accounting for energy-trading contracts that are not
derivatives pursuant to SFAS No. 133, “Accounting for
Derivative Instruments and Hedging Activities.” The firm
adopted the provisions of EITF Issue No. 02-3 related to
energy-trading contracts as of the beginning of the first
quarter of fiscal 2003, and the effect of adoption was not
material to the firm’s financial condition, results of operations or cash flows. EITF Issue No. 02-3
also communicates the FASB staff’s view that the transaction price for
a derivative contract is the best information available to
estimate fair value at the inception of a contract when the
estimate is not based on other observable market data.
The application of the FASB staff’s view did not have a
material effect on the firm’s financial condition, results of
operations or cash flows.
</FONT>
<P align="left"><FONT size="2">As discussed above in “—Basis of Presentation,” in
January 2003, the FASB issued FIN No. 46 and, in
December 2003, the FASB issued FIN No. 46-R. The
effect of the firm’s adoption of FIN No. 46 and the early
application of FIN No. 46-R to certain structures was not
material to the firm’s financial condition, results of operations or cash flows. Management is still evaluating the
effect of full adoption of FIN No. 46-R for the firm’s second quarter of fiscal 2004, but does not currently expect
full adoption to have a material effect on the firm’s financial condition, results of operations or cash flows.
</FONT>
<P align="left"><FONT size="2">In April 2003, the FASB issued SFAS No. 149,
“Amendment of Statement 133 on Derivative Instruments
and Hedging Activities.” SFAS No. 149 amends and clarifies the accounting for derivative instruments, including
certain derivative instruments embedded in other contracts, and for hedging activities. In addition, the statement clarifies when a contract is a derivative and when a
derivative contains a financing component that warrants
special reporting in the statement of cash flows. As
required, the firm adopted SFAS No. 149 prospectively for
contracts entered into or modified, and hedging relationships designated, after June 30, 2003. Adoption did not
have a material effect on the firm’s financial condition,
results of operations or cash flows.
</FONT>
<P align="left"><FONT size="2">In May 2003, the FASB issued SFAS No. 150,
“Accounting for Certain Financial Instruments with
Characteristics of both Liabilities and Equity.” SFAS
No.150 establishes standards for how an issuer classifies
and measures certain financial instruments with characteristics of both liabilities and equity and imposes certain
</FONT>
<P align="right"><FONT size="2"><I>GOLDMAN SACHS 2003 ANNUAL REPORT  </I>79</FONT>


<P align="center"><FONT size="2"> </FONT>




<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"> </H5><P>

<P align="left"><FONT size="2"><I>Notes to Consolidated Financial Statements</I>
</FONT>
<P align="left"><FONT size="2">additional disclosure requirements.
The provisions of SFAS No. 150 are
generally effective for financial
instruments entered into or modified
after May 31, 2003, except for those
provisions relating to
noncontrolling interests that have
been deferred. As required, the firm
adopted the applicable provisions of
SFAS No. 150 to all financial
instruments at the beginning of the
firm’s fourth quarter of fiscal
2003. Adoption did not have a
material effect on the firm’s
financial condition, results of
operations or cash flows. If the
deferred provisions are finalized in
their current form, management does
not expect adoption to have a
material effect on the firm’s
financial condition, results of
operations or cash flows.
</FONT>
<P align="left"><FONT size="2"><B><U>NOTE 3</U></B>
</FONT>
<P align="left"><FONT size="2"><B>FINANCIAL INSTRUMENTS</B>
</FONT>
<P align="left"><FONT size="2">Financial instruments, including
both cash instruments and
derivatives, are used to manage
market risk, facilitate customer
transactions, engage in proprietary
transactions and meet financing
objectives. These instruments can be
either executed on an exchange or
negotiated in the OTC market.
</FONT>
<P align="left"><FONT size="2">In December 2003, the FASB issued
SFAS No. 132 (revised 2003),
“Employers’ Disclosures about
Pensions and Other Postretirement
Benefits.” SFAS No. 132 revises
employers’ disclosures about pension
plans and other postretirement
benefits by requiring additional
disclosures such as descriptions of
the types of plan assets, investment
strategies, measurement dates, plan
obligations, cash flows and
components of net periodic benefit
costs recognized during interim
periods. The statement does not
change the measurement or
recognition of the plans. Interim
period disclosure is generally
effective for the firm’s second
quarter of 2004. Required annual
disclosure is effective for the
firm’s fiscal year ending 2004.
</FONT>
<P align="left"><FONT size="2">Transactions involving financial
instruments sold, but not yet
purchased, generally entail
obligations to purchase financial
instruments at future dates. The
firm may incur a loss if the market
value of the financial instrument
subsequently increases prior to the
purchase of the instrument.
</FONT>
<P align="left"><FONT size="2"><B>Fair Value of Financial
Instruments</B>
</FONT>
<P align="left"><FONT size="2">The following table sets forth the firm’s financial instruments owned,
including those pledged as collateral, at fair value, and financial
instruments sold, but not yet purchased, at fair value:
</FONT>

<TABLE cellspacing="0" border="0" cellpadding="0" width="90%">
<TR valign="bottom">
    <TD width="3%"> </TD>
    <TD width="59%"> </TD>
    <TD width="3%"> </TD>
    <TD width="3%"> </TD>
    <TD width="1%"> </TD>
    <TD width="3%"> </TD>
    <TD width="3%"> </TD>
    <TD width="3%"> </TD>
    <TD width="1%"> </TD>
    <TD width="3%"> </TD>
    <TD width="3%"> </TD>
    <TD width="3%"> </TD>
    <TD width="1%"> </TD>
    <TD width="3%"> </TD>
    <TD width="3%"> </TD>
    <TD width="2%"> </TD>
    <TD width="1%"> </TD>
    <TD width="2%"> </TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="15"><FONT size="1"><B>AS OF NOVEMBER</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="15"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1"><B>2003</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1"><B>2002</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="7"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="7"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="left" colspan="2"><FONT size="1">(IN MILLIONS)</FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>ASSETS</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>LIABILITIES</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>ASSETS</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>LIABILITIES</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:20px; text-indent:-20px"><FONT size="2">Commercial paper, certificates of deposit, time deposits
and other money market instruments</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>4,987</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>—</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">1,092</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">—</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2" nowrap><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">U.S. government, federal agency and sovereign obligations</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>36,634</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>34,003</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">36,053</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">22,272</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Corporate and other debt obligations</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Mortgage whole loans and collateralized debt obligations</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>11,768</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>363</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">8,292</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">738</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Investment-grade corporate bonds</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>9,862</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>4,641</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">7,959</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">4,607</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Bank loans</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>6,706</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>264</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">4,289</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">401</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">High-yield securities</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>4,817</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>1,394</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">1,944</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">940</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Preferred stock</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>3,822</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>163</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">1,543</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">70</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Other</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>569</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>157</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">1,398</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">146</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>37,544</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>6,982</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">25,425</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">6,902</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Equities and convertible debentures</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>35,006</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>19,651</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">23,624</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">14,398</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">State, municipal and provincial obligations</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>459</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>—</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">715</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">—</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Derivative contracts</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>45,733</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>41,886</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">42,205</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">38,921</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Physical commodities</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>356</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>177</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">661</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">980</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>160,719</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>102,699</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">129,775</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">83,473</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
</TABLE>

<P align="left"><FONT size="2">80 <I>GOLDMAN SACHS 2003 ANNUAL REPORT</I>
</FONT>

<P align="center"><FONT size="2"> </FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"> </H5><P>

<P align="right"><FONT size="2"><I>Notes to Consolidated Financial Statements</I></FONT>

<P align="left"><FONT size="2"><B>Credit Concentrations</B>
</FONT>
<P align="left"><FONT size="2">Credit concentrations may arise from
trading, underwriting and securities
borrowing activities and may be
impacted by changes in economic,
industry or political factors. As of
both November 2003 and November
2002, the firm held U.S. government
and federal agency obligations that
represented 6% of the firm’s total
assets. In addition, most of the
firm’s securities purchased under
agreements to resell are
collateralized by U.S. government,
federal agency and other sovereign
obligations. As of November 2003 and
November 2002, the firm did not have
credit exposure to any other
counterparty that exceeded 5% of the
firm’s total assets.
</FONT>
<P align="left"><FONT size="2"><B>Derivative Activities</B>
</FONT>
<P align="left"><FONT size="2">Derivative contracts are
instruments, such as futures,
forwards, swaps or option contracts,
that derive their value from
underlying assets, indices,
reference rates or a combination of
these factors. Derivative
instruments may be privately
negotiated contracts, which are
often referred to as OTC
derivatives, or they may be listed
and traded on an exchange.
Derivatives may involve future
commitments to purchase or sell
financial instruments or
commodities, or to exchange currency
or interest payment streams. The
amounts exchanged are based on the
specific terms of the contract with
reference to specified rates,
securities, commodities, currencies
or indices.
</FONT>
<P align="left"><FONT size="2">Certain cash instruments, such as
mortgage-backed securities,
interest-only and principal-only
obligations, and indexed debt
instruments, are not considered
derivatives even though their values
or contractually required cash flows
are derived from the price of some
other security or
index. However, certain
commodity-related contracts are
included in the firm’s derivatives
disclosure, as these contracts may
be settled in cash or are readily
convertible into cash.
</FONT>
<P align="left"><FONT size="2">Most of the firm’s derivative
transactions are entered into for
trading purposes. The firm uses
derivatives in its trading
activities to facilitate customer
transactions, to take proprietary
positions and as a means of risk
management. Risk exposures are
managed through diversification, by
controlling position sizes and by
establishing hedges in related
securities or derivatives. For
example, the firm may hedge a
portfolio of common stock by taking
an offsetting position in a related
equity-index futures contract. Gains
and losses on derivatives used for
trading purposes are generally
included in “Trading and principal
investments” in the consolidated
statements of earnings.
</FONT>
<P align="left"><FONT size="2">The firm also enters into derivative
contracts to manage the interest
rate, currency and equity-linked
exposure on its long-term
borrowings. These derivatives
generally include 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 designated as
fair-value hedges. The gains and
losses associated with the
ineffective portion of
these fair-value hedges are included
in “Trading and principal
investments” in the consolidated
statements of earnings and were not
material for the years ended
November 2003, November 2002 and
November 2001.
</FONT>
<P align="left"><FONT size="2">Derivative contracts are reported on a net-by-counterparty basis in the
firm’s consolidated statements of financial condition when management
believes a legal right of setoff exists under an enforceable netting
agreement. The fair value of derivative financial instruments, computed in
accordance with the firm’s netting policy, is set forth below:
</FONT>

<TABLE cellspacing="0" border="0" cellpadding="0" width="75%">
<TR valign="bottom">
    <TD width="38%"> </TD>
    <TD width="5%"> </TD>
    <TD width="6%"> </TD>
    <TD width="1%"> </TD>
    <TD width="7%"> </TD>
    <TD width="5%"> </TD>
    <TD width="3%"> </TD>
    <TD width="1%"> </TD>
    <TD width="4%"> </TD>
    <TD width="5%"> </TD>
    <TD width="6%"> </TD>
    <TD width="1%"> </TD>
    <TD width="7%"> </TD>
    <TD width="5%"> </TD>
    <TD width="3%"> </TD>
    <TD width="1%"> </TD>
    <TD width="4%"> </TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="15"><FONT size="1"><B>AS OF NOVEMBER</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="15"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1"><B>2003</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1"><B>2002</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="7"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="7"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="left"><FONT size="1">(IN MILLIONS)</FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>ASSETS</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>LIABILITIES</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>ASSETS</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>LIABILITIES</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Forward settlement contracts</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>8,134</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>9,271</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">4,293</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">4,602</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Swap agreements</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>25,471</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>17,317</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">22,426</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">18,516</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Option contracts</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>12,128</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>15,298</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">15,486</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">15,803</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>45,733</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>41,886</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">42,205</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">38,921</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
</TABLE>

<P align="right"><FONT size="2"><I>GOLDMAN SACHS 2003 ANNUAL REPORT </I>81</FONT>

<P align="center"><FONT size="2"> </FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"> </H5><P>



<P align="left"><FONT size="2"><I>Notes to Consolidated Financial Statements</I>
</FONT>
<P align="left"><FONT size="2"><B>Securitization Activities</B>
</FONT>
<P align="left"><FONT size="2">The firm securitizes commercial and
residential mortgages, home equity
loans, government and corporate
bonds, and other types of financial
assets. The firm acts as underwriter
of the beneficial interests that are
sold to investors. The firm
derecognizes financial assets
transferred in securitizations
provided it has relinquished control
over such assets. Transferred assets
are accounted for at fair value
prior to securitization. Net
revenues related to these
underwriting activities are
recognized in connection with the
sales of the underlying beneficial
interests to investors.
</FONT>
<P align="left"><FONT size="2">The firm may retain interests in
securitized financial assets, which
it generally attempts to sell as
quickly as possible, subject to
prevailing market conditions.
Retained interests
are accounted for at fair value and
included in “Total financial
instruments owned, at fair value” in
the consolidated statements of
financial condition.
</FONT>
<P align="left"><FONT size="2">During the years ended November 2003
and November 2002, the firm
securitized $95.00 billion and
$107.05 billion, respectively, of
financial assets, including $70.89
billion and $89.33 billion,
respectively, of agency
mortgage-backed securities. Cash
flows received on retained interests
and other securitization cash flows
were approximately $1 billion and
$534 million for the years ended
November 2003 and November 2002,
respectively. As of November 2003,
the firm held $3.20 billion of
retained interests, including $3.04
billion held in QSPEs.
</FONT>
<P align="left"><FONT size="2">The fair value of $1.05 billion of retained interests was based on quoted
market prices in active markets. The following table sets forth the weighted
average key economic assumptions used in measuring the fair value of $2.15
billion of retained interests for which fair value is based on alternative
pricing sources with reasonable, little or no price transparency and the
sensitivity of those fair values to immediate adverse changes of 10% and 20%
in those assumptions:
</FONT>

<TABLE cellspacing="0" border="0" cellpadding="0" width="66%">
<TR valign="bottom">
    <TD width="5%"> </TD>
    <TD width="5%"> </TD>
    <TD width="64%"> </TD>
    <TD width="8%"> </TD>
    <TD width="5%"> </TD>
    <TD width="1%"> </TD>
    <TD width="5%"> </TD>
    <TD width="2%"> </TD>
    <TD width="2%"> </TD>
    <TD width="1%"> </TD>
    <TD width="2%"> </TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1"><B>AS OF NOVEMBER 2003</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="7"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1"><B>TYPE OF RETAINED INTERESTS</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="7"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="left" colspan="3"><FONT size="1">($ IN MILLIONS)</FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>MORTGAGE-BACKED</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>OTHER ASSET-BACKED<SUP>(3)</SUP></B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Fair value of retained interests</FONT></DIV></TD>

<TD><FONT size="2">          </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">1,199</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">954</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Weighted average life (years)</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">3.8</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">3.4</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="7"> </TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Annual constant prepayment rate</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">22.0</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">N/A</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Impact of 10% adverse change</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">(3</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">—</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Impact of 20% adverse change</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(7</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">—</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="7"> </TD>
</TR>

<TR valign="bottom">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Annual credit losses<SUP>(1)</SUP></FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">2.9</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">1.3</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Impact of 10% adverse change<SUP>(2)</SUP></FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">(11</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">(6</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>

<TD nowrap><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Impact
of 20% adverse change<SUP>(2)</SUP></FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(19</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(11</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="7"> </TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Annual discount rate</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">15.0</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">8.3</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Impact of 10% adverse change</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">(27</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">(6</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Impact of 20% adverse change</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(51</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(11</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
</TABLE>

<P>
<HR size="1" noshade width="10%" align="left">

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="bottom">
    <TD width="1%" align="left" nowrap><FONT size="1"><SUP>(1)</SUP></FONT></TD>
    <TD width="1%"><FONT size="1"> </FONT></TD>
    <TD width="96%"><FONT size="1">Annual percentage credit loss is based only on positions in which expected
credit loss is a key assumption in the determination of fair values.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom">
    <TD width="1%" align="left" nowrap><FONT size="1"><SUP>(2)</SUP></FONT></TD>
    <TD width="1%"><FONT size="1"> </FONT></TD>
    <TD width="96%"><FONT size="1">The impacts of adverse change take into account credit mitigants
incorporated in the retained interests, including over-collateralization and
subordination provisions.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom">
    <TD width="1%" align="left" nowrap><FONT size="1"><SUP>(3)</SUP></FONT></TD>
    <TD width="1%"><FONT size="1"> </FONT></TD>
    <TD width="96%"><FONT size="1">Includes retained interests in government and corporate bonds and other
types of financial assets that are not subject to prepayment risk.</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">The preceding table does not give
effect to the offsetting benefit of
other financial instruments that are
held to hedge risks inherent in
these retained interests. Changes in
fair value based on a 10% adverse
variation in assumptions generally
cannot be extrapolated because the
relationship of the change in
assumptions to the change in fair
value is not usually linear. In
addition, the impact of a change in
a particular assumption is
calculated independently of changes
in any other assumption.
In practice, simultaneous changes in
assumptions might magnify or
counteract the sensitivities
disclosed above.
</FONT>
<P align="left"><FONT size="2">In addition to the retained
interests described above, the firm
also held interests in QSPEs,
primarily agency mortgage-backed
securities, purchased in connection
with secondary market-making
activities. These purchased
interests approximated $6 billion
and $3 billion as of November 2003
and November 2002, respectively.
</FONT>
<P align="left"><FONT size="2">82 <I>GOLDMAN SACHS 2003 ANNUAL REPORT</I>
</FONT>

<P align="center"><FONT size="2"> </FONT>
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"> </H5><P>


<P align="right"><FONT size="2"><I>Notes to Consolidated Financial Statements</I></FONT>

<P align="left"><FONT size="2">In connection with the issuance of
asset-repackaged notes to investors,
the firm had derivative receivables
from QSPEs, to which the firm has
transferred assets, with a fair
value of $188 million and $222
million as of November 2003 and
November 2002, respectively. These
receivables are collateralized by a
first-priority interest in the
assets held by each QSPE.
Accordingly, the firm views these
derivative receivables in the same
manner as other segregated
collateral arrangements from a
credit perspective.
</FONT>
<P align="left"><FONT size="2"><B>Variable Interest Entities (VIEs)</B>
</FONT>
<P align="left"><FONT size="2">The firm, in the ordinary course of
its business, retains interests in
VIEs in connection with its
securitization activities. The firm
also purchases and sells variable
interests in VIEs, primarily
mortgage-backed and asset-backed
interests, in connection with its
market-making activities and makes
investments in and loans to VIEs
that hold performing and
nonperforming debt, real estate and
other assets. In addition, the firm
utilizes VIEs to
provide investors with credit-linked
and asset-repackaged notes designed
to meet their objectives.
</FONT>
<P align="left"><FONT size="2">VIEs generally purchase assets by
issuing debt and equity instruments
and through other contractual
arrangements. In certain instances,
the firm has provided guarantees to
certain VIEs or holders of variable
interests in these VIEs. In such
cases, the maximum exposure to loss
included in the tables set forth
below is the notional amount of such
guarantees. Such amounts do not
represent anticipated losses in
connection with these guarantees.
The firm’s variable interests in
these VIEs include senior and
subordinated debt; limited and
general partnership interests;
preferred and common stock; interest
rate, foreign currency, equity,
commodity and credit derivatives;
guarantees; and residual interests
in mortgage-backed and asset-backed
securitization vehicles. Group Inc.
generally is not directly or
indirectly obligated to repay the
debt and equity instruments and
contractual arrangements entered
into by these VIEs.
</FONT>
<P align="left"><FONT size="2">The following table sets forth the firm’s total assets and maximum exposure
to loss associated with its significant variable interests in consolidated,
asset-backed VIEs:
</FONT>

<TABLE cellspacing="0" border="0" cellpadding="0" width="55%">
<TR valign="bottom">
    <TD width="64%"> </TD>
    <TD width="5%"> </TD>
    <TD width="6%"> </TD>
    <TD width="1%"> </TD>
    <TD width="6%"> </TD>
    <TD width="5%"> </TD>
    <TD width="6%"> </TD>
    <TD width="1%"> </TD>
    <TD width="6%"> </TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1"><B>AS OF NOVEMBER</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="7"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="left"><FONT size="1">(IN MILLIONS)</FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2003</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">VIE assets<SUP>(1)</SUP></FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>1,832</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">1,746</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Maximum exposure to loss</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>145</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">270</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
</TABLE>


<P>
<HR size="1" noshade width="10%" align="left">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR valign="bottom">
    <TD width="1%" nowrap valign="top"><FONT size="1"><SUP>(1)</SUP>  </FONT></TD>
    <TD width="99%"><FONT size="1">Consolidated VIE assets include assets financed by nonrecourse short-term
and long-term debt. Nonrecourse debt is debt that Group Inc. is not directly
or indirectly obligated to repay</FONT></TD>
</TR>

<TR valign="bottom">
    <TD width="1%" nowrap valign="top"><FONT size="1"> </FONT></TD>
    <TD width="99%"><FONT size="1">through a guarantee, general partnership
interest or contractual arrangement.</FONT></TD>
</TR>

</TABLE>
<P align="left"><FONT size="2">The following table sets forth the firm’s total assets and maximum exposure
to loss associated with its significant variable interests in nonconsolidated
VIEs:
</FONT>

<TABLE cellspacing="0" border="0" cellpadding="0" width="85%">
<TR valign="bottom">
    <TD width="51%"> </TD>
    <TD width="5%"> </TD>
    <TD width="4%"> </TD>
    <TD width="1%"> </TD>
    <TD width="4%"> </TD>
    <TD width="5%"> </TD>
    <TD width="1%"> </TD>
    <TD width="1%"> </TD>
    <TD width="1%"> </TD>
    <TD width="2%"> </TD>
    <TD width="3"> </TD>
    <TD width="1%"> </TD>
    <TD width="1%"> </TD>
    <TD width="1%"> </TD>
    <TD width="3"> </TD>
    <TD width="1%"> </TD>
    <TD width="1%"> </TD>
    <TD width="2%"> </TD>
    <TD width="3"> </TD>
    <TD width="1%"> </TD>
    <TD width="1%"> </TD>
    <TD width="2%"> </TD>
    <TD width="3"> </TD>
    <TD width="1%"> </TD>
    <TD width="1%"> </TD>
    <TD width="2%"> </TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>

<TD nowrap align="left" colspan="14"><FONT size="1"><B>AS OF NOVEMBER 2003</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="24"><HR size="1" noshade></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
<TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
<TD nowrap align="left" colspan="14"><FONT size="1"><B>MAXIMUM EXPOSURE TO LOSS</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="19"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>VIE</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
<TD style="border-left: 1px solid #000000"><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>PURCHASED</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>LOANS AND</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="left"><FONT size="1">(IN MILLIONS)</FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>ASSETS</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
<TD style="border-left: 1px solid #000000"><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>INTERESTS</B></FONT></TD>
    <TD><FONT size="1">      </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>GUARANTEES</B></FONT></TD>
    <TD><FONT size="1">      </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>DERIVATIVES</B></FONT></TD>
    <TD><FONT size="1">      </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>INVESTMENTS</B></FONT></TD>
    <TD><FONT size="1">      </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>TOTAL</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
<TD style="border-left: 1px solid #000000"><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Mortgage-backed</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>1,648</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
<TD style="border-left: 1px solid #000000"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>24</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>—</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>—</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>507</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>531</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Other asset-backed</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>6,617</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
<TD style="border-left: 1px solid #000000"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>65</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>236</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>100</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>920</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>1,321</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
<TD style="border-left: 1px solid #000000"><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>8,265</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
<TD style="border-left: 1px solid #000000"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>89</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>236</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>100</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>1,427</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>1,852</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
<TD style="border-left: 1px solid #000000"><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR>
    <TD> </TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
<TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
<TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
<TD nowrap align="left" colspan="14"><FONT size="1">AS OF NOVEMBER 2002</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="24"><HR size="1" noshade></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
<TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
<TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>

    <TD nowrap align="left" colspan="14"><FONT size="1">MAXIMUM EXPOSURE TO LOSS</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="19"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1">VIE</FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
<TD style="border-left: 1px solid #000000"><FONT size="2"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1">PURCHASED</FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1">LOANS AND</FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="left"><FONT size="1">(IN MILLIONS)</FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1">ASSETS</FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
<TD style="border-left: 1px solid #000000"><FONT size="2"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1">INTERESTS</FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1">GUARANTEES</FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1">DERIVATIVES</FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1">INVESTMENTS</FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1">TOTAL</FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
<TD style="border-left: 1px solid #000000"><FONT size="2"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>




<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Mortgage-backed</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">3,102</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
<TD style="border-left: 1px solid #000000"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">148</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">—</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">—</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">—</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">148</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Other asset-backed</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">5,614</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
<TD style="border-left: 1px solid #000000"><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">292</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">—</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">137</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">318</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">747</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
<TD style="border-left: 1px solid #000000"><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">8,716</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
<TD style="border-left: 1px solid #000000"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">440</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">—</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">137</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">318</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">895</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
<TD style="border-left: 1px solid #000000"><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
</TABLE>

<P align="right"><FONT size="2"><I>GOLDMAN SACHS 2003 ANNUAL REPORT </I>83</FONT>

<P align="center"><FONT size="2"> </FONT>
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"> </H5><P>



<P align="left"><FONT size="2"><I>Notes to Consolidated Financial Statements</I>
</FONT>
<P align="left"><FONT size="2"><B>Secured Borrowing and Lending Activities</B>
</FONT>
<P align="left"><FONT size="2">The firm obtains secured short-term
financing principally through the
use of repurchase agreements and
securities lending agreements to
obtain securities for settlement, to
finance inventory positions and to
meet customers’ needs. In these
transactions, the firm either
provides or receives collateral,
including U.S. government, federal
agency, mortgage-backed,
investment-grade foreign sovereign
obligations and equity securities.
</FONT>
<P align="left"><FONT size="2">The firm receives collateral in
connection with resale agreements,
securities lending transactions,
derivative transactions, customer
margin loans and other secured
lending activities. In many cases,
the firm is permitted to sell or
repledge securities held as
collateral. These securities may be
used to secure repurchase
agreements, enter into securities
lending or derivative transactions,
or cover short positions. As of
November 2003 and November 2002, the
fair value of securities received as
collateral by the firm that it was
permitted to sell or repledge was
$410.01 billion and $316.31 billion,
respectively, of which the firm sold
or repledged $350.57 billion and
$272.49 billion, respectively.
</FONT>
<P align="left"><FONT size="2">The firm also pledges its own assets
to collateralize repurchase
agreements and other secured
financings. As of November 2003 and
November 2002, the carrying value of
securities included in “Financial
instruments owned, at fair value”
that had been loaned or pledged to
counter-parties that did not have
the right to sell or repledge was
$47.39 billion and $34.66 billion,
respectively.
</FONT>
<P align="left"><FONT size="2"><B><u>NOTE 4</u></B>
</FONT>
<P align="left"><FONT size="2"><B>SHORT-TERM BORROWINGS</B>
</FONT>
<P align="left"><FONT size="2">The firm obtains unsecured
short-term borrowings through
issuance of promissory notes,
commercial paper and bank loans.
Short-term borrowings also include
the portion of long-term borrowings
maturing within one year and certain
long-term borrowings that may be
payable within one year at the
option of the holder. The carrying
value of these short-term
obligations approximates fair value
due to their short-term nature.
</FONT>
<P align="left"><FONT size="2">Short-term borrowings are set forth below:
</FONT>

<DIV align="left">
<TABLE cellspacing="0" border="0" cellpadding="0" width="55%">
<TR valign="bottom">
    <TD width="64%"> </TD>
    <TD width="5%"> </TD>
    <TD width="6%"> </TD>
    <TD width="1%"> </TD>
    <TD width="6%"> </TD>
    <TD width="5%"> </TD>
    <TD width="6%"> </TD>
    <TD width="1%"> </TD>
    <TD width="6%"> </TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1"><B>AS OF NOVEMBER</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="7"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="left"><FONT size="1">(IN MILLIONS)</FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2003</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Promissory notes</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>24,119</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">20,433</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Commercial paper</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>4,767</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">9,463</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Bank loans and other</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>8,183</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">4,948</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Current portion of long-term
borrowings</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>7,133</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">5,794</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total<SUP>(1)</SUP></FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>44,202</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">40,638</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
</TABLE>
</DIV>

<P>

<HR noshade size="1" width="10%" align="left">

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="bottom">
    <TD valign="bottom" width="1%" align="left" nowrap><FONT size="1"><SUP>(1)</SUP>  </FONT></TD>
    <TD width="99%"><FONT size="1">As of November 2003 and November
2002, the weighted average interest
rates for short-term borrowings,
including commercial paper, were
1.48% and 2.09%, respectively.</FONT></TD>
</TR>
</TABLE>

<P align="left"><FONT size="2"><B><u>NOTE 5</u></B>
</FONT>

<P align="left"><FONT size="2"><B>LONG-TERM BORROWINGS</B></FONT>

<P align="left"><FONT size="2">Long-term borrowings are set forth below:</FONT>

<DIV align="left">
<TABLE cellspacing="0" border="0" cellpadding="0" width="55%">
<TR valign="bottom">
    <TD width="5%"> </TD>
    <TD width="61%"> </TD>
    <TD width="5%"> </TD>
    <TD width="5%"> </TD>
    <TD width="1%"> </TD>
    <TD width="6%"> </TD>
    <TD width="5%"> </TD>
    <TD width="5%"> </TD>
    <TD width="1%"> </TD>
    <TD width="6%"> </TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1"><B>AS OF NOVEMBER</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="7"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="left" colspan="2"><FONT size="1">(IN MILLIONS)</FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2003</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Fixed rate obligations<SUP>(1)</SUP></FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">U.S. dollar</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>28,242</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">19,550</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Non-U.S. dollar</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>8,703</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">4,407</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Floating rate obligations<SUP>(2)</SUP></FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">U.S. dollar</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>13,269</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">10,175</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Non-U.S. dollar</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>7,268</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">4,579</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>57,482</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">38,711</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
</TABLE>
</DIV>

<P>
<HR noshade size="1" width="10%" align="left">

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="bottom">
    <TD valign="bottom" width="1%" align="left" nowrap><FONT size="1"><SUP>(1)</SUP>  </FONT></TD>
    <TD width="99%"><FONT size="1">During 2003 and 2002, interest
rates on U.S. dollar fixed rate
obligations ranged from 4.13% to
12.00% and from 5.50% to 12.00%,
respectively. During 2003 and 2002,
interest</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="bottom" width="1%" align="left" nowrap><FONT size="1"> </FONT></TD>
    <TD width="99%"><FONT size="1">rates on non-U.S. dollar
fixed rate obligations ranged from
0.70% to 8.88% and from 1.20% to
8.88%, respectively.</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="bottom" width="1%" align="left" nowrap><FONT size="1"><SUP>(2)</SUP>  </FONT></TD>
    <TD width="99%"><FONT size="1">Floating interest rates generally are based on LIBOR, the U.S.
Treasury bill rate or the federal
funds rate. Certain equity-linked
and indexed instruments are
included in floating rate</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="bottom" width="1%" align="left" nowrap><FONT size="1"> </FONT></TD>
    <TD width="99%"><FONT size="1">obligations.</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">As of November 2003, long-term
borrowings included nonrecourse debt
of $5.4 billion, consisting of $3.2
billion issued during the year by
William Street Funding Corporation
(Funding Corp) (a wholly owned
subsidiary of Group Inc. formed to
raise funding to support loan
commitments made by another wholly
owned William Street entity to
investment-grade clients), $1.6
billion issued by consolidated VIEs
and $0.6 billion issued by other
consolidated entities, primarily
associated with the firm’s ownership
of East Coast Power L.L.C. As of
November 2002, long-term borrowings
included nonrecourse debt of $530
million issued by consolidated VIEs.
Nonrecourse debt is debt that Group
Inc. is not directly or indirectly
obligated to repay through a
guarantee, general partnership
interest or contractual arrangement.
</FONT>
<P align="left"><FONT size="2">84 <I>GOLDMAN SACHS 2003 ANNUAL REPORT</I>
</FONT>

<P align="center"><FONT size="2"> </FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"> </H5><P>

<P align="right"><FONT size="2"><I>Notes to Consolidated Financial Statements</I></FONT>

<P align="left"><FONT size="2">Long-term borrowings by fiscal maturity date are set forth below:
</FONT>
<DIV align="left">
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%">
<TR valign="bottom">
    <TD width="29%"> </TD>
    <TD width="3%"> </TD>
    <TD width="4%"> </TD>
    <TD width="1%"> </TD>
    <TD width="4%"> </TD>
    <TD width="3%"> </TD>
    <TD width="4%"> </TD>
    <TD width="1%"> </TD>
    <TD width="4%"> </TD>
    <TD width="3%"> </TD>
    <TD width="4%"> </TD>
    <TD width="1%"> </TD>
    <TD width="4%"> </TD>
    <TD width="3%"> </TD>
    <TD width="4%"> </TD>
    <TD width="1%"> </TD>
    <TD width="4%"> </TD>
    <TD width="3%"> </TD>
    <TD width="3%"> </TD>
    <TD width="1%"> </TD>
    <TD width="4%"> </TD>
    <TD width="3%"> </TD>
    <TD width="4%"> </TD>
    <TD width="1%"> </TD>
    <TD width="4%"> </TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="23"><FONT size="1"><B>AS OF NOVEMBER</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="23"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="11"><FONT size="1"><B>2003<SUP>(1)</SUP><SUP>(2)</SUP><SUP>(3)</SUP></B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="11"><FONT size="1"><B>2002<SUP>(2)</SUP></B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="11"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="11"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>U.S.</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>NON-U.S.</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>U.S.</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>NON-U.S.</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="left"><FONT size="1">(IN MILLIONS)</FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>DOLLAR</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>DOLLAR</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>TOTAL</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>DOLLAR</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>DOLLAR</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>TOTAL</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2004</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>—</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>—</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>—</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">6,846</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">184</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">7,030</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2005</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>7,854</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>4,598</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>12,452</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">5,804</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">3,075</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">8,879</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2006</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>6,133</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>1,576</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>7,709</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">1,575</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">1,020</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">2,595</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2007</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>1,274</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>564</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>1,838</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">1,094</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">953</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">2,047</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2008</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>3,105</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>2,546</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>5,651</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">239</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">593</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">832</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2009-thereafter</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>23,145</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>6,687</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>29,832</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">14,167</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">3,161</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">17,328</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>41,511</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>15,971</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>57,482</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">29,725</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">8,986</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">38,711</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
</TABLE>
</DIV>

<P>

<HR noshade size="1" width="10%" align="left">



<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="1%" nowrap valign="top"><FONT size="1"><SUP>(1)</SUP>  </FONT></TD>
    <TD width="99%"><FONT size="1">Long-term borrowings maturing within one year
and certain long-term borrowings that may be redeemable within one year at the option of the holder
are included as short-term
</FONT></TD>
</TR>


<TR valign="bottom">
    <TD width="1%" nowrap valign="top"><FONT size="1"> </FONT></TD>
    <TD width="99%"><FONT size="1">borrowings in the consolidated statements of
financial condition.</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD width="1%" nowrap valign="top"><FONT size="1"><SUP>(2)</SUP>  </FONT></TD>
    <TD width="99%"><FONT size="1">Long-term borrowings repayable at the option of the firm are reflected at
their contractual maturity dates. Certain long-term borrowings redeemable
prior to maturity at the option of the</FONT></TD>
</TR>
<TR valign="bottom">
    <TD width="1%" nowrap valign="top"><FONT size="1"> </FONT></TD>
    <TD width="99%"><FONT size="1">holder are reflected at the date such
options first become exercisable.</FONT></TD>
</TR>


<TR>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD width="1%" nowrap valign="top"><FONT size="1"><SUP>(3)</SUP>  </FONT></TD>
    <TD width="99%"><FONT size="1">Long-term borrowings have maturities that range from one to 30 years from
the date of issue.</FONT></TD>
</TR>
</TABLE>

<P align="left"><FONT size="2">The firm enters into derivative
contracts, such as interest rate
futures contracts, interest rate
swap agreements, currency swap
agreements and equity-linked
contracts, to effectively convert a
substantial portion of its long-term
borrowings into U.S. dollar-based
floating rate obligations.
Accordingly, the aggregate carrying
value of these long-term borrowings
and related hedges approximates fair
value.
</FONT>
<P align="left"><FONT size="2">The effective weighted average interest rates for long-term borrowings, after
hedging activities, are set forth below:
</FONT>
<DIV align="left">
<TABLE cellspacing="0" border="0" cellpadding="0" width="75%">
<TR valign="bottom">
    <TD width="48%"> </TD>
    <TD width="5%"> </TD>
    <TD width="4%"> </TD>
    <TD width="1%"> </TD>
    <TD width="5%"> </TD>
    <TD width="5%"> </TD>
    <TD width="2%"> </TD>
    <TD width="1%"> </TD>
    <TD width="3%"> </TD>
    <TD width="5%"> </TD>
    <TD width="4%"> </TD>
    <TD width="1%"> </TD>
    <TD width="5%"> </TD>
    <TD width="5%"> </TD>
    <TD width="2%"> </TD>
    <TD width="1%"> </TD>
    <TD width="3%"> </TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="15"><FONT size="1"><B>AS OF NOVEMBER</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="15"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1"><B>2003</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1"><B>2002</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="7"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="7"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="left"><FONT size="1">($ IN MILLIONS)</FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>AMOUNT</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>RATE</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>AMOUNT</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>RATE</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Fixed rate obligations</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>1,517</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>7.43</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>%</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">1,057</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">8.35</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Floating rate obligations</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>55,965</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>1.79</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">37,654</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">2.24</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>57,482</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>1.94</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">38,711</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">2.40</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
</TABLE>

</DIV>

<P align="left"><FONT size="2"><U><B>NOTE 6</B></u>
</FONT>

<P align="left"><FONT size="2"><B>COMMITMENTS, CONTINGENCIES
AND GUARANTEES</B>
</FONT>
<P align="left"><FONT size="2"><B>Commitments</B>
</FONT>
<P align="left"><FONT size="2">The firm had commitments to enter
into forward secured financing
transactions, including certain
repurchase and resale agreements and
secured borrowing and lending
arrangements, of $35.25 billion and
$40.04 billion as of November 2003
and November 2002, respectively.
</FONT>
<P align="left"><FONT size="2">In connection with its lending
activities, the firm had outstanding
commitments of $15.83 billion and
$9.41 billion as of November 2003
and November 2002, respectively. The
firm’s commitments to extend credit
are agreements
to lend to counterparties that have
fixed termination dates and are
contingent on all conditions to
borrowing set forth in the contract
having been met. Since these
commitments may expire unused, the
total commitment amount does not
necessarily reflect the actual
future cash flow requirements. As of
November 2003, $4.32 billion of the
firm’s outstanding commitments have
been issued through the William
Street credit extension program.<SUP>(1)</SUP>
Substantially all of the credit risk
associated
</FONT>
<P>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="1%" nowrap valign="top"><FONT size="1"><SUP>(1)</SUP>  </FONT></TD>
    <TD width="99%"><FONT size="1">These commitments were primarily issued through William Street Commitment
Corporation (Commitment Corp), a consolidated wholly owned subsidiary of
Group Inc. Another consolidated wholly owned subsidiary, Funding Corp, was
formed to raise funding to support the William Street credit extension
program. Commitment Corp and Funding Corp are each separate corporate
entities, with assets and liabilities that are legally separated from the
other assets and liabilities of the firm. Accordingly, the assets of
Commitment Corp and of Funding Corp will not be available to their respective
shareholders until the claims of their respective creditors have been paid.
In addition, no affiliate of either Commitment Corp or Funding Corp, except
in limited cases as expressly agreed in writing, is responsible for any
obligation of either entity.</FONT></TD>
</TR>
</TABLE>
<P align="right"><FONT size="2"><I>GOLDMAN SACHS 2003 ANNUAL REPORT </I>85</FONT>

<P align="center"><FONT size="2"> </FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"> </H5><P>



<P align="left"><FONT size="2"><I>Notes to Consolidated Financial Statements</I>
</FONT>
<P align="left"><FONT size="2">with these commitments has been
hedged through credit loss
protection provided by SMFG. The
firm has also hedged the credit risk
of certain non-William Street
commitments using a variety of other
financial instruments.
</FONT>
<P align="left"><FONT size="2">The firm provides letters of credit
issued by various banks to
counterparties in lieu of securities
or cash to satisfy various
collateral and margin deposit
requirements. Letters of credit
outstanding were $12.60 billion and
$11.63 billion as of November 2003
and November 2002, respectively.
</FONT>
<P align="left"><FONT size="2">The firm acts as an investor in
merchant banking transactions, which
includes making long-term
investments in equity and debt
securities in privately negotiated
transactions, corporate acquisitions
and real estate transactions. In
connection with these activities,
the firm had commitments to invest
up to $1.38 billion and $1.46
billion in corporate and real estate
investment funds as of November 2003
and November 2002, respectively.
</FONT>
<P align="left"><FONT size="2">The firm had construction-related
commitments of $87 million and $301
million as of November 2003 and
November 2002, respectively, and
other purchase commitments of $255
million and $23 million as of
November 2003 and November 2002,
respectively.
</FONT>
<P align="left"><FONT size="2">The firm has obligations under
long-term noncancelable lease
agreements, principally for office
space, expiring on various dates
through 2029. Certain agreements are
subject to periodic escalation
provisions for increases in real
estate taxes and other charges.
Future minimum rental payments, net
of minimum sublease rentals, and
rent charged to operating expense
for the last three years are set
forth below:
</FONT>
<DIV align="left">
<TABLE cellspacing="0" border="0" cellpadding="0" width="55%">
<TR valign="bottom">
    <TD width="5%"> </TD>
    <TD width="73%"> </TD>
    <TD width="5%"> </TD>
    <TD width="8%"> </TD>
    <TD width="1%"> </TD>
    <TD width="8%"> </TD>
</TR>
<TR valign="bottom">
    <TD align="left" colspan="2"><FONT size="1">(IN MILLIONS)</FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
</TR>

<TR valign="bottom">

<TD align="center" colspan="6"><FONT size="1"><HR noshade size="1"></FONT></TD>
</TR>




<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Minimum rental payments</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2004</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">422</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2005</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">349</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2006</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">339</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2007</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">304</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2008</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">288</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2009-thereafter</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">2,220</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">3,922</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Net rent expense</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2001</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">299</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2002</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">359</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2003</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>360</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
</TABLE>
</DIV>

<P align="left"><FONT size="2"><B>Contingencies</B>
</FONT>
<P align="left"><FONT size="2">The firm is involved in a number of
judicial, regulatory and arbitration
proceedings 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 firm’s
operating results for any particular
period, depending, in part, upon the
operating results for such period.
</FONT>
<P align="left"><FONT size="2"><B>Guarantees</B>
</FONT>
<P align="left"><FONT size="2">The firm enters into various
derivative contracts that meet the
definition of a guarantee under FIN
No. 45. Such
derivative contracts include credit
default swaps, written equity and
commodity put options, written
currency contracts and interest rate
caps, floors and swaptions. FIN No.
45 does not require disclosures
about derivative contracts if such
contracts may be cash settled and
the firm has no basis to conclude it
is probable that the counterparties
held, at inception, the underlying
instruments related to the
derivative contracts. The firm has
concluded that these conditions have
been met, for certain large,
internationally active commercial
and investment banks and end users.
Accordingly, the firm has not
included such contracts in the table
below.
</FONT>
<P align="left"><FONT size="2">The firm, in its capacity as an
agency lender, occasionally
indemnifies securities lending
customers against losses incurred in
the event that borrowers do not
return securities and the collateral
held is insufficient to cover the
market value of the securities
borrowed. In relation to certain
asset sales and securitization
transactions, the firm guarantees
the collection of contractual cash
flows. In connection with fund
management activities, the firm may
issue loan guarantees to secure
financing and to obtain preferential
investment terms. In addition, the
firm provides letters of credit and
other guarantees, on a limited
basis, to enable clients to enhance
their credit standing and complete
transactions.
</FONT>
<P align="left"><FONT size="2">86 <I>GOLDMAN SACHS 2003 ANNUAL REPORT</I>
</FONT>

<P align="center"><FONT size="2"> </FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"> </H5><P>


<P align="right"><FONT size="2"><I>Notes to Consolidated Financial Statements</I></FONT>

<P align="left"><FONT size="2">The following table sets forth certain information about the firm’s
derivative contracts that meet the definition of a guarantee and certain
other guarantees as of November 2003:
</FONT>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="43%"> </TD>
    <TD width="3%"> </TD>
    <TD width="1%"> </TD>
    <TD width="3%"> </TD>
    <TD width="1%"> </TD>
    <TD width="1%"> </TD>
    <TD width="1%"> </TD>
    <TD width="1%"> </TD>
    <TD width="3%"> </TD>
    <TD width="1%"> </TD>
    <TD width="1%"> </TD>
    <TD width="1%"> </TD>
    <TD width="3%"> </TD>
    <TD width="1%"> </TD>
    <TD width="1%"> </TD>
    <TD width="1%"> </TD>
    <TD width="3%"> </TD>
    <TD width="1%"> </TD>
    <TD width="1%"> </TD>
    <TD width="1%"> </TD>
    <TD width="3%"> </TD>
    <TD width="1%"> </TD>
    <TD width="1%"> </TD>
    <TD width="1%"> </TD>
    <TD width="3%"> </TD>
    <TD width="1%"> </TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="19"><FONT size="1"><B>MAXIMUM PAYOUT/NOTIONAL AMOUNT BY PERIOD OF EXPIRATION<SUP>(3)</SUP></B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="19"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>CARRYING</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
<td style="border-left: 1px solid #000000"><FONT size="1"> </font></td>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2005-</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2007-</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2009-</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="left"><FONT size="1">(IN MILLIONS)</FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>VALUE</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
<td style="border-left: 1px solid #000000"><FONT size="1"> </font></td>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2004</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2006</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2008</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>THEREAFTER</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>TOTAL</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
<td style="border-left: 1px solid #000000"><FONT size="1"> </font></td>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Derivatives<SUP>(1)</SUP></FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">7,639</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
<td style="border-left: 1px solid #000000"><FONT size="1"> </font></td>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">216,038</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">87,843</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">126,385</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">163,721</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">593,987</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD nowrap><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Securities lending indemnifications<SUP>(2)</SUP></FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">—</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
<td style="border-left: 1px solid #000000"><FONT size="1"> </font></td>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">7,955</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">—</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">—</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">—</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">7,955</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Guarantees of the collection of
contractual cash flows</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">16</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
<td style="border-left: 1px solid #000000"><FONT size="1"> </font></td>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">827</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">708</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">3</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">5</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">1,543</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Fund-related commitments</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">—</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
<td style="border-left: 1px solid #000000"><FONT size="1"> </font></td>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">44</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">20</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">2</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">2</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">68</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Letters of credit and other guarantees</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">89</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
<td style="border-left: 1px solid #000000"><FONT size="1"> </font></td>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">89</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">25</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">82</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">197</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
</TABLE>
</CENTER>
<P>
<HR noshade size="1" width="10%" align="left">

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="bottom">
    <TD width="1%" align="left" nowrap><FONT size="1"><SUP>(1)</SUP></FONT></TD>
    <TD width="1%"><FONT size="2"> </FONT></TD>
    <TD width="96%"><FONT size="1">The carrying value of $7.64 billion excludes the effect of a legal right of
setoff that may exist under an enforceable netting agreement.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom">
    <TD width="1%" align="left" nowrap><FONT size="1"><SUP>(2)</SUP></FONT></TD>
    <TD width="1%"><FONT size="2"> </FONT></TD>
    <TD width="96%"><FONT size="1">Collateral held in connection with these securities lending
indemnifications was $8.23 billion as of November 2003.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom">
    <TD width="1%" align="left" nowrap><FONT size="1"><SUP>(3)</SUP></FONT></TD>
    <TD width="1%"><FONT size="2"> </FONT></TD>
    <TD width="96%"><FONT size="1">Such amounts do not represent anticipated losses in connection with these
contracts.</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">In the normal course of its
business, the firm indemnifies and
guarantees certain service
providers, such as clearing and
custody agents, trustees and
administrators, against specified
potential losses in connection with
their acting as an agent of, or
providing services to, the firm or
its affiliates. The firm also
indemnifies some clients against
potential losses incurred in the
event specified third-party service
providers, including subcustodians
and third-party brokers, improperly
execute transactions. In addition,
the firm is a member of payment,
clearing and settlement networks as
well as securities exchanges around
the world that may require the firm
to meet the obligations of such
networks and exchanges in the event
of member defaults. In connection
with its prime brokerage and
clearing businesses, the firm may
agree to clear and settle on behalf
of its clients the transactions
entered into by them with other
brokerage firms. The firm’s
obligations in respect of such
transactions are secured by the
assets in the client’s account as
well as any proceeds received from
the transactions cleared and settled
by the firm on behalf of the client.
The firm is unable to develop an
estimate of the maximum payout under
these guarantees and
indemnifications. However,
management believes that it is
unlikely the firm will have to make
material payments under these
arrangements, and no liabilities
related to these guarantees and
indemnifications have been
recognized in the consolidated
statement of financial condition as
of November 2003.
</FONT>
<P align="left"><FONT size="2">The firm provides representations
and warranties to counterparties in
connection with a variety of
commercial transactions and
occasionally indemnifies them
against potential losses caused by
the breach of those representations
and warranties. The firm may also
provide indemnifications protecting
against changes in or adverse
application of certain U.S. tax laws
in connection with ordinary-course
transactions such as securities
issuances, borrowings or derivatives. In
addition, the firm may provide
indemnifications to some
counterparties to protect them in
the event additional taxes are owed
or payments are withheld, due either
to a change in or an adverse
application of certain non-U.S. tax
laws. These indemnifications
generally are standard contractual
terms and are entered into in the
normal course of business.
Generally, there are no stated or
notional amounts included in these
indemnifications, and the
contingencies triggering the
obligation to indemnify are not
expected to occur. The firm is
unable to develop an estimate of the
maximum payout under these
guarantees. However, management
believes that it is unlikely the
firm will have to make material
payments under these arrangements,
and no liabilities related to these
arrangements have been recognized in
the consolidated statement of
financial condition as of November
2003.
</FONT>
<P align="left"><FONT size="2"><B><u>NOTE 7</u></B>
</FONT>
<P align="left"><FONT size="2"><B>SHAREHOLDERS’ EQUITY</B>
</FONT>
<P align="left"><FONT size="2">Dividends declared per common share
were $0.74 in 2003 and $0.48 in each
of 2002 and 2001. On December 17,
2003, the Board of Directors of
Group Inc. declared a dividend of
$0.25 per share to be paid on
February 26, 2004 to common
shareholders of record on January
27, 2004.
</FONT>
<P align="left"><FONT size="2">During 2003 and 2002, the firm
repurchased 12.2 million shares and
19.4 million shares of the firm’s
common stock, respectively. The
average price paid per share for
repurchased shares was $76.83 and
$76.49 for the years ended November
2003 and November 2002,
respectively. As of November 2003,
the firm was authorized to
repurchase up to 8.6 million
additional shares of common stock
pursuant to the firm’s common stock
repurchase program.
</FONT>
<P align="right"><FONT size="2"><I>GOLDMAN SACHS 2003 ANNUAL REPORT </I>87</FONT>

<P align="center"><FONT size="2"> </FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"> </H5><P>

<P align="left"><FONT size="2"><I>Notes to Consolidated Financial Statements</I>
</FONT>
<P align="left"><FONT size="2"><B><u>NOTE 8</u></B>
</FONT>
<P align="left"><FONT size="2"><B>EARNINGS PER SHARE</B>
</FONT>
<P align="left"><FONT size="2">The computations of basic and diluted EPS are set forth below:
</FONT>
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%">
<TR valign="bottom">
    <TD width="73%"> </TD>
    <TD width="3%"> </TD>
    <TD width="2%"> </TD>
    <TD width="1%"> </TD>
    <TD width="3%"> </TD>
    <TD width="3%"> </TD>
    <TD width="2%"> </TD>
    <TD width="1%"> </TD>
    <TD width="3%"> </TD>
    <TD width="3%"> </TD>
    <TD width="2%"> </TD>
    <TD width="1%"> </TD>
    <TD width="3%"> </TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="11"><FONT size="1"><B>YEAR ENDED NOVEMBER</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="11"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="left"><FONT size="1">(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)</FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2003</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Numerator for basic and diluted EPS — earnings available to
common shareholders</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>3,005</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">2,114</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">2,310</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Denominator for basic EPS — weighted average number of
common shares</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>488.4</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">495.6</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">509.7</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Effect of dilutive securities</FONT></DIV></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">    Restricted stock units</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>16.0</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">22.1</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">22.0</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">    Stock options</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>7.5</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">7.4</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">10.1</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Dilutive potential common shares</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>23.5</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">29.5</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">32.1</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Denominator for diluted EPS — weighted average number of
common shares and dilutive potential common shares<SUP>(1)</SUP></FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>511.9</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">525.1</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">541.8</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Basic EPS</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>6.15</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">4.27</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">4.53</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Diluted EPS</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>5.87</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">4.03</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">4.26</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
</TABLE>
<P>

<div align="left"><hr size="1" noshade width="10%">
</div>

<div>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="1"><SUP>(1)  </SUP></FONT></TD>
    <TD valign="bottom" width="96%" colspan="2"><FONT size="1">The diluted EPS computations do not include the antidilutive effect of the
following options:</FONT></TD>
</TR>
</TABLE>
</div>

<TABLE cellspacing="0" border="0" cellpadding="0" width="55%">
<TR valign="bottom">
    <TD width="12%"> </TD>
    <TD width="70%"> </TD>
    <TD width="5%"> </TD>
    <TD width="1%"> </TD>
    <TD width="7%"> </TD>
    <TD width="1%"> </TD>
    <TD width="5%"> </TD>
    <TD width="1%"> </TD>
    <TD width="7%"> </TD>
    <TD width="1%"> </TD>
    <TD width="5%"> </TD>
    <TD width="7%"> </TD>
    <TD width="1%"> </TD>
    <TD width="1%"> </TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="11"><FONT size="1"><B>YEAR ENDED NOVEMBER</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="11"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="left"><FONT size="1">(IN MILLIONS)</FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2003</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">Number of antidilutive options</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="1"><B>27</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="1">28</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="1">1</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
</TABLE>

<P align="left"><FONT size="2"><B><U>NOTE 9</U></B>
</FONT>
<P align="left"><FONT size="2"><B>GOODWILL AND IDENTIFIABLE
INTANGIBLE ASSETS</B>
</FONT>
<P align="left"><FONT size="2"><B>Goodwill</B>
</FONT>
<P align="left"><FONT size="2">As of November 2003 and November
2002, goodwill of $3.16 billion and
$2.86 billion, respectively, was
included in “Other assets” in the
consolidated statements of
financial condition. Prior to
December 1, 2001, goodwill was
amortized over periods of 15 to 20
years on a straight-line basis.
</FONT>
<P align="left"><FONT size="2">The following table sets forth
reported net earnings and EPS, as
adjusted to exclude goodwill
amortization expense:
</FONT>
<TABLE cellspacing="0" border="0" cellpadding="0" width="55%">
<TR valign="bottom">
    <TD width="5%"> </TD>
    <TD width="74%"> </TD>
    <TD width="5%"> </TD>
    <TD width="7%"> </TD>
    <TD width="1%"> </TD>
    <TD width="8%"> </TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="left" colspan="2"><FONT size="1">(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)</FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>YEAR ENDED NOVEMBER<BR>2001</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Net earnings, as reported</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">2,310</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Net earnings, as adjusted</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">2,404</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">EPS, as reported</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Basic</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">4.53</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Diluted</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">4.26</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">EPS, as adjusted</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Basic</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">4.72</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Diluted</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">4.44</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">88 <I>GOLDMAN SACHS 2003 ANNUAL REPORT</I>
</FONT>

<P align="center"><FONT size="2"> </FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"> </H5><P>

<P align="right"><FONT size="2"><I>Notes to Consolidated Financial Statements</I></FONT>

<P align="left"><FONT size="2"><B>Identifiable Intangible Assets
</b></FONT>
<P align="left"><FONT size="2">The following table sets forth the gross carrying amount, accumulated
amortization and net carrying amount of identifiable intangible assets:
</FONT>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="32%"> </TD>
    <TD width="5%"> </TD>
    <TD width="17%"> </TD>
    <TD width="1%"> </TD>
    <TD width="18%"> </TD>
    <TD width="5%"> </TD>
    <TD width="2%"> </TD>
    <TD width="1%"> </TD>
    <TD width="3%"> </TD>
    <TD width="5%"> </TD>
    <TD width="2%"> </TD>
    <TD width="1%"> </TD>
    <TD width="3%"> </TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1"><B>AS OF NOVEMBER</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="7"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" nowrap align="left"><FONT size="1">(IN MILLIONS)</FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2003</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Customer lists<SUP>(1)</SUP></FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">Gross carrying amount<SUP>(3)</SUP><BR></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>1,021</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">859</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">Accumulated amortization<BR></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>(141</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(94</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">Net carrying amount<BR></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>880</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">765</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">

<TD nowrap><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">New
York Stock Exchange (NYSE) specialist rights</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">Gross carrying amount<BR></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>714</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">717</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">

<TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">Accumulated amortization<BR></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>(78</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(51</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom">

<TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">Net carrying amount<BR></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>636</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">666</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">

<TD nowrap><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Option and exchange-traded fund (ETF) specialist rights</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">Gross carrying amount<BR></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>312</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">312</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">

<TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">Accumulated amortization<BR></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>(182</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(21</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">

<TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">Net carrying amount<BR></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>130</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">291</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Other<SUP>(2)</SUP></FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">Gross carrying amount<BR></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>351</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">351</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">Accumulated amortization<BR></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>(177</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(93</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">Net carrying amount<BR></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>174</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">258</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">Gross carrying
amount<SUP>(3)</SUP></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>2,398</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">2,239</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">Accumulated amortization<BR></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>(578</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B><SUP>(4)</SUP></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(259</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">Net carrying amount<BR></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>1,820</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">1,980</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
</TABLE>
</CENTER>
<div align="left">
<hr size="1" noshade width="10%">
</div>

<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="1%" nowrap valign="bottom"><FONT size="1"><SUP>(1)</SUP>  </FONT></TD>
    <TD width="99%"><FONT size="1">Primarily includes the firm’s clearance and execution and Nasdaq customer
lists acquired in the firm’s combination with SLK and financial counseling
customer lists acquired in the</FONT></TD>
</TR>


<TR valign="bottom">
    <TD width="1%" nowrap valign="bottom"><FONT size="1"> </FONT></TD>
    <TD width="99%"><FONT size="1">firm’s combination with The Ayco
Company, L.P.</FONT></TD>
</TR>

<TR valign="bottom">
    <TD width="1%" nowrap valign="bottom"><FONT size="1"><SUP>(2)</SUP>  </FONT></TD>
    <TD width="99%"><FONT size="1">Includes primarily technology-related assets acquired in the firm’s
combination with SLK.</FONT></TD>
</TR>

<TR valign="bottom">
    <TD width="1%" nowrap valign="top"><FONT size="1"><SUP>(3)</SUP>  </FONT></TD>
    <TD width="99%"><FONT size="1">Gross carrying amount includes additions of $162 million and $147 million
for the years ended November 2003 and November 2002, respectively.</FONT></TD>
</TR>

<TR valign="bottom">
    <TD width="1%" nowrap valign="top"><FONT size="1"><SUP>(4)</SUP>  </FONT></TD>
    <TD width="99%"><FONT size="1">For the year ended November 2003, accumulated amortization includes $188
million of impairment charges primarily related to option specialist rights.</FONT></TD>
</TR>
</TABLE>

<P align="left"><FONT size="2">Identifiable intangible assets are
amortized over a weighted average
life of approximately 18 years. There
were no identifiable intangible
assets that were considered to be
indefinite-lived and, therefore, not
subject to amortization.
</FONT>
<P align="left"><FONT size="2">Amortization expense associated with
identifiable intangible assets was
$319 million (including $188 million
of impairment charges), $127 million
and $115 million for the fiscal
years ended November 2003, November
2002 and November 2001,
respectively.
</FONT>
<P align="left"><FONT size="2">Estimated future amortization
expense for existing identifiable
intangible assets is set forth
below:
</FONT>
<TABLE cellspacing="0" border="0" cellpadding="0" width="55%">
<TR valign="bottom">
    <TD width="50%"> </TD>
    <TD width="5%"> </TD>
    <TD width="22%"> </TD>
    <TD width="1%"> </TD>
    <TD width="22%"> </TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" align="left"><FONT size="1">(IN
MILLIONS)<HR size="1" noshade></FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2004</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">123</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2005</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">123</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2006</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">123</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2007</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">118</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2008</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">91</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
</TABLE>
<P align="right"><FONT size="2"><I>GOLDMAN SACHS 2003 ANNUAL REPORT </I>89</FONT>


<P align="center"><FONT size="2"> </FONT>




<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"> </H5><P>


<P align="left"><FONT size="2"><I>Notes to Consolidated Financial Statements</I>
</FONT>

<P align="left"><FONT size="2"><B><U>NOTE 10</U></B></FONT>

<P align="left"><FONT size="2"><B>OTHER ASSETS AND OTHER
LIABILITIES</B></FONT>

<P align="left"><FONT size="2">Other assets are generally less
liquid, nonfinancial assets. The
following table sets forth the
firm’s other assets by type:
</FONT>

<TABLE cellspacing="0" border="0" cellpadding="0" width="65%">
<TR valign="bottom">
    <TD width="68%"> </TD>
    <TD width="5%"> </TD>
    <TD width="5%"> </TD>
    <TD width="1%"> </TD>
    <TD width="5%"> </TD>
    <TD width="5%"> </TD>
    <TD width="5%"> </TD>
    <TD width="1%"> </TD>
    <TD width="5%"> </TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1"><B>AS OF NOVEMBER</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="7"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="left"><FONT size="1">(IN MILLIONS)</FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2003</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Goodwill and identifiable
intangible assets<SUP>(1)</SUP></FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>4,982</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">4,839</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Property, leasehold improvements
and equipment</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>3,527</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">3,460</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Equity-method investments
and joint ventures</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>2,159</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">649</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Miscellaneous receivables
and other</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>1,463</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">1,469</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Net deferred tax assets<SUP>(2)</SUP></FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>1,420</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">1,549</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Prepaid assets and deposits</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>376</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">333</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>13,927</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">12,299</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
</TABLE>
<div align="left"><hr size="1" noshade width="10%">
</div>

<FONT size="1"><SUP>(1)</SUP></FONT><FONT size="1">   See Note 9 for further
information regarding the firm’s
goodwill and identifiable intangible
assets.
</FONT>

<P><FONT size="1"><SUP>(2)</SUP></FONT><FONT size="1">   See Note 13 for further information regarding the firm’s income taxes.
</FONT>

<P align="left"><FONT size="2">Other liabilities and accrued
expenses primarily includes
compensation and benefits, minority
interest in certain consolidated
entities, litigation liabilities,
tax-related payables, deferred
revenue and other payables. The
following table sets forth the
firm’s other liabilities and accrued
expenses by type:
</FONT>
<TABLE cellspacing="0" border="0" cellpadding="0" width="55%">
<TR valign="bottom">
    <TD width="66%"> </TD>
    <TD width="5%"> </TD>
    <TD width="5%"> </TD>
    <TD width="1%"> </TD>
    <TD width="6%"> </TD>
    <TD width="5%"> </TD>
    <TD width="5%"> </TD>
    <TD width="1%"> </TD>
    <TD width="6%"> </TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1"><B>AS OF NOVEMBER</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="7"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="left"><FONT size="1">(IN MILLIONS)</FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2003</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Compensation and benefits</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>3,956</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">3,194</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Accrued expenses and
other payables</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>2,907</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">2,572</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Minority interest</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>1,281</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">236</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>8,144</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">6,002</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2"><B><U>NOTE 11</U></B>
</FONT>

<P align="left"><FONT size="2"><B>EMPLOYEE BENEFIT PLANS</B></FONT>

<P align="left"><FONT size="2">The firm sponsors various pension
plans and certain other
postretirement benefit plans,
primarily healthcare and life
insurance, which cover most
employees worldwide. The firm also
provides certain benefits to former
or inactive employees prior to
retirement. A summary of these plans
is set forth below.
</FONT>
<P align="left"><FONT size="2"><B>Defined Benefit Pension
Plans and Postretirement
Plans</B>
</FONT>
<P align="left"><FONT size="2">The firm maintains a defined benefit
pension plan for substantially all
U.S. employees. Employees of certain
non-U.S. subsidiaries participate in
various local defined benefit plans.
These plans generally provide
benefits based on years of credited
service and a percentage of the
employee’s eligible compensation. In
addition, the firm has unfunded
postretirement benefit plans that
provide medical and life insurance
for eligible retirees, employees and
dependents in the United States.
</FONT>
<P align="left"><FONT size="2"><I>90  GOLDMAN SACHS 2003 ANNUAL REPORT</I>
</FONT>

<P align="center"><FONT size="2"> </FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"> </H5><P>

<P align="right"><FONT size="2"><I>Notes to Consolidated Financial Statements</I></FONT>

<P align="left"><FONT size="2">The following table provides a summary of the changes in the plans’ benefit
obligations and the fair value of assets for November 2003 and November 2002
and a statement of the funded status of the plans as of November 2003 and
November 2002:
</FONT>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="3%"> </TD>
    <TD width="25%"> </TD>
    <TD width="3%"> </TD>
    <TD width="4%"> </TD>
    <TD width="1%"> </TD>
    <TD width="4%"> </TD>
    <TD width="3%"> </TD>
    <TD width="4%"> </TD>
    <TD width="1%"> </TD>
    <TD width="4%"> </TD>
    <TD width="3%"> </TD>
    <TD width="4%"> </TD>
    <TD width="1%"> </TD>
    <TD width="4%"> </TD>
    <TD width="3%"> </TD>
    <TD width="4%"> </TD>
    <TD width="1%"> </TD>
    <TD width="4%"> </TD>
    <TD width="3%"> </TD>
    <TD width="4%"> </TD>
    <TD width="1%"> </TD>
    <TD width="4%"> </TD>
    <TD width="3%"> </TD>
    <TD width="4%"> </TD>
    <TD width="1%"> </TD>
    <TD width="4%"> </TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="23"><FONT size="1"><B>AS OF OR FOR YEAR ENDED NOVEMBER</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="23"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="11"><FONT size="1"><B>2003</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="11"><FONT size="1">2002</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="11"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="11"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>U.S.</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>NON-U.S.</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>POST-</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1">U.S.</FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1">NON-U.S.</FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1">POST-</FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap colspan="2"><FONT size="1">(IN MILLIONS)</FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>PENSION</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>PENSION</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>RETIREMENT</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1">PENSION</FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1">PENSION</FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1">RETIREMENT</FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Benefit obligation</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Balance, beginning of year</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>162</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>245</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>184</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">140</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">184</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">84</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Business combination</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>75</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>—</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>1</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">—</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">—</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">—</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Service cost</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>8</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>41</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>8</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">6</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">37</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">8</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Interest cost</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>13</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>12</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>12</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">10</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">9</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">9</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Plan amendments</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>—</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>—</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>—</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">—</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">40</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Actuarial loss/(gain)</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>39</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>22</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>(3</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">8</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">7</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">50</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Benefits paid</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>(3</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>(13</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>(6</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(2</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(9</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(7</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Effect of foreign exchange rates</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>—</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>28</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>—</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">—</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">16</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">—</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Balance, end of year</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>294</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>335</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>196</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">162</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">245</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">184</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Fair value of plan assets</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="1"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Balance, beginning of year</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>167</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>206</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>—</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">138</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">164</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">12</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Business combination</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>45</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>—</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>—</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">—</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">—</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">—</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Actual return on plan assets</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>31</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>27</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>—</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(14</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(21</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(1</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Firm contributions</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>37</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>58</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>6</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">45</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">56</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">7</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Benefits paid</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>(3</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>(13</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>(6</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(2</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(9</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(7</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Other distributions</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>—</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>—</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>—</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">—</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">—</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(11</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Effect of foreign exchange rates</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>—</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>26</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>—</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">—</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">16</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">—</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Balance, end of year</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>277</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>304</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>—</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">167</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">206</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">—</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Prepaid/(accrued) benefit cost</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="1"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Funded status</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>(17</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>(31</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>(196</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">5</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">(39</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">(184</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Unrecognized loss</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>90</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>89</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>56</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">72</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">79</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">62</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Unrecognized transition (asset)/obligation</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>(26</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>15</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>2</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(28</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">15</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Unrecognized prior service cost</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>—</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>3</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>22</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">—</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">4</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">31</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Adjustment to recognize additional
minimum liability</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>—</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>—</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>—</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">—</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(1</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">—</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Prepaid/(accrued) benefit cost</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>47</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>76</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>(116</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">49</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">58</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">(90</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2">The accumulated benefit obligation
for all defined benefit plans was
$560 million and $356 million as of
November 2003 and November 2002,
respectively.
</FONT>
<P align="left"><FONT size="2">For plans in which the accumulated
benefit obligation exceeded plan
assets, the aggregate projected
benefit obligation and accumulated
benefit obligation was
$160 million and $139 million,
respectively, as of November 2003,
and $72 million and $55 million,
respectively, as of November 2002.
The fair value of plan assets for
each of these plans was $97 million
and $39 million as of November 2003
and November 2002, respectively.
</FONT>
<P align="right"><FONT size="2"><I>GOLDMAN SACHS 2003 ANNUAL REPORT</I>  91</FONT>

<P align="center"><FONT size="2"> </FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"> </H5><P>



<P align="left"><FONT size="2"><I>Notes to Consolidated Financial Statements</I>
</FONT>

<P align="left"><FONT size="2">The components of pension
expense/(income) and postretirement expense are set forth below:</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="3%"> </TD>
    <TD width="65%"> </TD>
    <TD width="5%"> </TD>
    <TD width="3%"> </TD>
    <TD width="1%"> </TD>

    <TD width="3%"> </TD>

    <TD width="3%"> </TD>
    <TD width="3%"> </TD>
    <TD width="1%"> </TD>

    <TD width="3%"> </TD>

    <TD width="3%"> </TD>
    <TD width="3%"> </TD>
    <TD width="1%"> </TD>

    <TD width="3%"> </TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="11"><FONT size="1"><B>YEAR ENDED NOVEMBER</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="11"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD nowrap colspan="2"><FONT size="1">(IN MILLIONS)</FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2003</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">U.S. pension
</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Service cost</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>8</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">6</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">4</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Interest cost</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>13</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">10</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">9</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Expected return on plan assets</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>(16</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(12</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(12</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Net amortization</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>5</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(2</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(3</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>10</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">2</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">(2</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Non-U.S. pension
</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Service cost</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>41</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">37</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">35</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Interest cost</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>12</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">9</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">7</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Expected return on plan assets</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>(15</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(12</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(9</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Net amortization</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>8</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">4</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>46</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">38</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">34</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Postretirement
</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Service cost</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>8</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">8</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">6</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Interest cost</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>12</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">9</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">5</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Expected return on plan assets</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>—</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(1</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(1</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Net amortization</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>11</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">10</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">—</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>31</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">26</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">10</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
</TABLE>
</CENTER>

<P align="left"><FONT size="2">The weighted average assumptions used to develop net periodic pension cost and
the actuarial present value of the projected benefit obligation are set forth
below. These assumptions represent a weighted average of the assumptions used
for the U.S. and non-U.S. plans and are based on the economic environment of
each applicable country.
</FONT>


<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="3%"> </TD>
    <TD width="3%"> </TD>
    <TD width="64%"> </TD>

    <TD width="3%"> </TD>
    <TD width="3%"> </TD>

    <TD width="1%"> </TD>

    <TD width="3%"> </TD>
    <TD width="3%"> </TD>
    <TD width="3%"> </TD>

    <TD width="1%"> </TD>

    <TD width="3%"> </TD>
    <TD width="3%"> </TD>
    <TD width="3%"> </TD>

    <TD width="1%"> </TD>

    <TD width="3%"> </TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="11"><FONT size="1"><B>YEAR ENDED NOVEMBER</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="11"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2003</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
 <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="3"> </TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Defined benefit pension plans</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">U.S. pension—projected benefit obligation</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>

    <TD colspan="2"><DIV style="margin-left:20px; text-indent:-10px"><FONT size="2">Discount rate</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>6.00</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>%</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">6.75</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">7.00</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>

    <TD colspan="2"><DIV style="margin-left:20px; text-indent:-10px"><FONT size="2">Rate of increase in future compensation levels</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>5.00</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">5.00</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">5.00</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">U.S. pension—net periodic benefit cost</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>

    <TD colspan="2"><DIV style="margin-left:20px; text-indent:-10px"><FONT size="2">Discount rate</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>6.59</B></FONT></TD>
    <TD nowrap><FONT size="2"><B><SUP>(1)</SUP></B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">7.00</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">7.50</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>

    <TD colspan="2"><DIV style="margin-left:20px; text-indent:-10px"><FONT size="2">Rate of increase in future compensation levels</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>5.00</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">5.00</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">5.00</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>

    <TD colspan="2"><DIV style="margin-left:20px; text-indent:-10px"><FONT size="2">Expected long-term rate of return on plan assets</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>8.50</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">8.50</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">8.50</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Non-U.S. pension—projected benefit obligation</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>

    <TD colspan="2"><DIV style="margin-left:20px; text-indent:-10px"><FONT size="2">Discount rate</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>4.76</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">4.78</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">4.93</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>

    <TD colspan="2"><DIV style="margin-left:20px; text-indent:-10px"><FONT size="2">Rate of increase in future compensation levels</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>4.37</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">4.14</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">4.11</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>

    <TD colspan="2"><DIV style="margin-left:20px; text-indent:-10px"><FONT size="2">Expected long-term rate of return on plan assets</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>6.25</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">5.86</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">5.74</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Postretirement plans—projected benefit obligation</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Discount rate</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>6.00</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>%</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">6.75</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">7.00</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Rate of increase in future compensation levels</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>5.00</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">5.00</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">5.00</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Postretirement plans—net periodic benefit cost</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Discount rate</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>6.75</B></FONT></TD>
    <TD nowrap><FONT size="2"><B><SUP>(1)</SUP></B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">7.00</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">7.50</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Rate of increase in future compensation levels</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>5.00</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">5.00</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">5.00</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Expected long-term rate of return on plan assets</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>—</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">8.50</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">8.50</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
</TABLE>
</CENTER>

<P align="left"><FONT size="1"><HR size="1" noshade align="left" width="10%">
<SUP>(1)</SUP> Includes plan added in connection with business combination.
</FONT>
<P align="left"><FONT size="2">92 <I>GOLDMAN SACHS 2003 ANNUAL REPORT</I>
</FONT>

<P align="center"><FONT size="2"> </FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"> </H5><P>

<P align="right"><FONT size="2"><I>Notes to Consolidated Financial Statements</I></FONT>

<P align="left"><FONT size="2">The firm’s approach in determining
the long-term rate of return for
plan assets is based upon historical
financial market relationships that
have existed over time with the
presumption that this trend will
generally remain constant in the
future.
</FONT>
<P align="left"><FONT size="2">For measurement purposes, an annual
growth rate in the per capita cost
of covered healthcare benefits of
14% was assumed for the fiscal year
ending November 2004. The rate was
assumed to decrease ratably to 5%
for the fiscal year ending November
2010 and remain at that level
thereafter.
</FONT>
<P align="left"><FONT size="2">The assumed cost of healthcare has an effect on the amounts reported for the
firm’s postretirement plans. A 1% change in the assumed healthcare cost trend
rate would have the following effects:
</FONT>

<TABLE cellspacing="0" border="0" cellpadding="0" width="55%">
<TR valign="bottom">
    <TD width="44%"> </TD>
    <TD width="5%"> </TD>
    <TD width="4%"> </TD>
    <TD width="1%">     </TD>
    <TD width="4%"> </TD>
    <TD width="5%"> </TD>
    <TD width="4%"> </TD>
    <TD width="1%">     </TD>
    <TD width="4%"> </TD>
    <TD width="5%"> </TD>
    <TD width="4%"> </TD>
    <TD width="1%"> </TD>
    <TD width="4%"> </TD>
    <TD width="5%"> </TD>
    <TD width="4%"> </TD>
    <TD width="1%"> </TD>
    <TD width="4%"> </TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1"><B>1% INCREASE</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1"><B>1% DECREASE</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="7"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="7"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD nowrap><FONT size="1">(IN MILLIONS)</FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2003</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2003</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Cost</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>4</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">3</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>(3</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">(2</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Obligation</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>33</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">25</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>(26</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(22</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

</TABLE>

<P align="left"><FONT size="2">The following table sets forth the
composition of plan assets for the
U.S. defined benefit pension plans
by asset category:
</FONT>

<TABLE cellspacing="0" border="0" cellpadding="0" width="55%">
<TR valign="bottom">
    <TD width="66%"> </TD>
    <TD width="5%"> </TD>
    <TD width="5%"> </TD>
    <TD width="1%"> </TD>
    <TD width="6%"> </TD>
    <TD width="5%"> </TD>
    <TD width="5%"> </TD>
    <TD width="1%"> </TD>
    <TD width="6%"> </TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1"><B>AS OF NOVEMBER</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="7"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2003</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"> </TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Equity securities</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>61</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>%</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">66</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Debt securities</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>25</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">19</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Other</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>14</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">15</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>100</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>%</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">100</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
</TABLE>

<P align="left"><FONT size="2">The investment approach of the
firm’s U.S. defined benefit pension
plans involves employing a
sufficient level of flexibility to
capture investment opportunities as
they occur, while maintaining
reasonable parameters to ensure that
prudence and care are exercised in
the execution of the investment
program. The plans employ a total
return on investment approach,
whereby a mix, which is broadly
similar to the actual asset
allocation as of November 2003, of
equity securities, debt securities
and other assets is targeted to
maximize the long-term return on
assets for a given level of risk.
Investment risk is measured and
monitored on an ongoing basis by the
firm’s Retirement Committee through
periodic portfolio reviews, meetings
with investment managers and annual
liability measurements.
</FONT>
<P align="left"><FONT size="2">The firm does not expect to be
required to contribute to its U.S.
pension plans in fiscal 2004, but
does expect to contribute $6 million
to its unfunded postretirement
benefit plan in the form of benefit
payments in fiscal 2004.
</FONT>
<P align="left"><FONT size="2">The following table sets forth
amounts of benefits projected to be
paid from the firm’s U.S. defined
benefit
pension and postretirement plans
and reflects expected future
service, where appropriate:
</FONT>

<TABLE cellspacing="0" border="0" cellpadding="0" width="55%">
<TR valign="bottom">
    <TD width="70%"> </TD>
    <TD width="5%"> </TD>
    <TD width="4%"> </TD>
    <TD width="1%"> </TD>
    <TD width="5%"> </TD>
    <TD width="5%"> </TD>
    <TD width="4%"> </TD>
    <TD width="1%"> </TD>
    <TD width="5%"> </TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>U.S.</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>POST-</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap><FONT size="1">(IN MILLIONS)</FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>PENSION</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>RETIREMENT</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2004</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">4</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">6</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2005</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">5</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">7</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2006</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">5</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">7</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2007</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">6</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">8</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2008</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">7</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">8</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2009-2013</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">50</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">45</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
</TABLE>

<P align="left"><FONT size="2"><b>Defined Contribution Plans</b>
</FONT>

<P align="left"><FONT size="2">The firm contributes to
employer-sponsored U.S. and non-U.S.
defined contribution plans. The
firm’s contribution to these plans
was $199 million, $154 million and
$193 million for the years ended
November 2003, November 2002 and
November 2001, respectively.
</FONT>
<P align="left"><FONT size="2">The firm has also established a
nonqualified defined contribution
plan (the Plan) for certain senior
employees. Shares of common stock
contributed to the Plan and
outstanding as of November 2003 were
4.2 million. The shares of common
stock will vest and generally be
distributable to the participant on
specified future dates if the
participant satisfies certain
conditions and the participant’s
employment with the firm has not
been terminated, with certain
exceptions for terminations of
employment due to death or a change
in control. Dividends on the
underlying shares of common stock
are paid currently to the
participants. Forfeited shares
remain in the Plan and are
reallocated to other participants.
Contributions to the Plan are
expensed on the date of grant. Plan
expense was immaterial for the years
ended November 2003, November 2002
and November 2001.
</FONT>
<P align="right"><FONT size="2"><I>GOLDMAN SACHS 2003 ANNUAL REPORT</I>  93</FONT>

<P align="center"><FONT size="2"> </FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"> </H5><P>



<P align="left"><FONT size="2"><I>Notes to Consolidated Financial Statements</I>
</FONT>

<P align="left"><FONT size="2"><u><b>NOTE 12</b></u></FONT>

<P align="left"><FONT size="2"><b>EMPLOYEE INCENTIVE PLANS</b></FONT>

<P align="left"><FONT size="2"><b>Stock Incentive Plan</b></FONT>

<P align="left"><FONT size="2">The firm sponsors a stock incentive
plan, The Goldman Sachs Amended and
Restated Stock Incentive Plan (the
Amended SIP), which provides for
grants of incentive stock options,
nonqualified stock options, stock
appreciation rights, dividend
equivalent rights, restricted stock,
restricted stock units and other
stock-based awards. In the second
quarter of fiscal 2003, the Amended
SIP was approved by the firm’s
shareholders, effective for grants
after April 1, 2003, and no further
awards were or will be made under
the original plan after that date,
although awards granted under the
original plan prior to that date
remain outstanding.
</FONT>
<P align="left"><FONT size="2">The total number of shares of common
stock that may be issued under the
Amended SIP through fiscal 2008 may
not exceed 250 million shares and,
in each fiscal year thereafter, may
not exceed 5% of the issued and
outstanding shares of common stock,
determined as of the last day of the
immediately preceding fiscal year,
increased by the number of shares
available for awards in previous
fiscal years but not covered by
awards granted in such years. As of
November 2003, 236.8 million
shares were available for grant
under the Amended SIP, after taking
into account stock-based
compensation awards that were issued
subsequent to year end, as part of
year-end compensation.
</FONT>
<P align="left"><FONT size="2">As of November 2002, 128.6 million
shares were available for grant
under the original plan, after
taking into account stock-based
compensation awards that were issued
subsequent to year end, as part of
year-end compensation.
</FONT>
<P align="left"><FONT size="2"><b>Restricted Stock Units</b>
</FONT>

<P align="left"><FONT size="2">The firm issued restricted stock
units to employees under the stock
incentive plan, primarily in
connection with its initial public
offering, acquisitions and as part
of year-end compensation. Of the
total restricted stock units
outstanding as of November 2003 and
November 2002, (i) 24.5 million
units and 29.9 million units,
respectively, required future
service as a condition to the
delivery of the underlying shares of
common stock and (ii) 23.3 million
units and 18.3 million units,
respectively, did not require future
service.
</FONT>
<P align="left"><FONT size="2">In all cases, delivery of the underlying shares of common stock is
conditioned on the grantee’s satisfying certain other requirements outlined
in the award agreements. The activity related to these restricted stock units
is set forth below:
</FONT>

<TABLE cellspacing="0" border="0" cellpadding="0" width="75%">
<TR valign="bottom">
    <TD width="5%"> </TD>
    <TD width="45%"> </TD>
    <TD  width="5%"> </TD>
    <TD width="9%"> </TD>
    <TD width="1%"> </TD>
    <TD width="10%"> </TD>
    <TD width="5%"> </TD>
    <TD width="9%"> </TD>
    <TD width="1%"> </TD>
    <TD width="10%"> </TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1"><B>RESTRICTED STOCK UNITS OUTSTANDING</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="7"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>NO FUTURE</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>FUTURE</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>SERVICE</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>SERVICE</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>REQUIRED</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>REQUIRED</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"> </TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Outstanding, November 2000</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">33,502,219</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">46,335,940</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Granted</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">116,968</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">1,638,536</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Forfeited</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(975,713</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(3,065,731</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Delivered</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(10,253,224</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">—</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Vested</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">3,239,683</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(3,239,683</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Outstanding, November 2001</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">25,629,933</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">41,669,062</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>

<TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Granted<SUP>(1)</SUP></FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">1,484,153</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">4,855,553</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Forfeited</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(591,957</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(3,135,134</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Delivered</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(21,700,672</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">—</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Vested</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">13,494,481</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(13,494,481</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Outstanding, November 2002</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">18,315,938</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">29,895,000</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>

<TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Granted<SUP>(1)</SUP></FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>3,615,366</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>9,357,593</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Forfeited</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>(179,708</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>(1,886,420</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Delivered</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>(11,261,989</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>—</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Vested</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>12,824,458</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>(12,824,458</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Outstanding, November 2003</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>23,314,065</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>24,541,715</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
</TABLE>

<HR size="1" noshade align="left" width="10%">

<DIV align="left"><FONT size="1"><SUP>(1)</SUP>  Includes restricted stock units granted to employees subsequent to year end
as part of year-end compensation.
</FONT></DIV>

<P align="left"><FONT size="2">Total employee stock compensation
expense, net of forfeitures, was
$711 million, $645 million and $798
million
for the years ended November 2003,
November 2002 and November 2001,
respectively.
</FONT>
<P align="left"><FONT size="2">94  <I>GOLDMAN SACHS 2003 ANNUAL REPORT</I>
</FONT>

<P align="center"><FONT size="2"> </FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"> </H5><P>

<P align="right"><FONT size="2"><I>Notes to Consolidated Financial Statements</I></FONT>

<P align="left"><FONT size="2"><B>Stock Options</B>
</FONT>

<P align="left"><FONT size="2">In general, stock options granted to
employees in May of 1999 in
connection with the firm’s initial
public offering vest and become
exercisable in equal installments on
or about the third, fourth and fifth
anniversaries of the grant date.
Stock options granted to employees
subsequent to the firm’s initial
public offering generally vest as
outlined in the applicable stock
option agreement and first become
exercisable on the third anniversary
of the grant date. All employee stock
option agreements provide that
vesting is accelerated in certain
circumstances, such as upon
retirement, death and extended
absence. In general, all stock
options expire on the tenth
anniversary of the grant date,
although they may be subject to
earlier termination or cancellation
in certain circumstances in
accordance with the terms of the
firm’s stock incentive plan and the
applicable stock option agreement.
The dilutive effect of the firm’s
outstanding stock options is
included in “Average common shares
outstanding—Diluted,” in the
consolidated statements of earnings.
</FONT>
<P align="left"><FONT size="2">The activity related to these stock options is set forth below:
</FONT>
<TABLE cellspacing="0" border="0" cellpadding="0" width="75%">
<TR valign="bottom">
    <TD width="4%"> </TD>
    <TD width="54%"> </TD>
    <TD width="4%"> </TD>
    <TD width="9%"> </TD>
    <TD width="1%"> </TD>
    <TD width="9%"> </TD>
    <TD width="4%"> </TD>
    <TD width="2%"> </TD>
    <TD width="1%"> </TD>
    <TD width="4%"> </TD>
    <TD width="5%"> </TD>
    <TD width="1%"> </TD>
    <TD width="1%"> </TD>
    <TD width="1%"> </TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>WEIGHTED</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>WEIGHTED</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>AVERAGE</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>AVERAGE</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>OPTIONS</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>EXERCISE</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>REMAINING</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>OUTSTANDING</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>PRICE</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>LIFE (YEARS)</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"> </TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Outstanding, November 2000</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">57,435,758</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">63.19</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">8.96</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Granted<SUP>(1)</SUP></FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">29,004,359</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">91.89</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Exercised</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(104,155</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">52.03</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Forfeited</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(1,969,077</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">64.46</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Outstanding, November 2001</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">84,366,885</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">73.04</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">8.65</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>

<TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Granted<SUP>(1)</SUP></FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">15,908,162</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">79.16</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Exercised</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(1,138,087</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">52.78</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Forfeited</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(4,867,859</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">68.77</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Outstanding, November 2002</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">94,269,101</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">74.53</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">8.08</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Granted<SUP>(1)</SUP></FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>902,511</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>95.81</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Exercised</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>(2,686,955</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>52.76</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Forfeited</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>(3,428,692</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>73.08</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Outstanding, November 2003</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>89,055,965</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>75.47</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>7.17</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Exercisable, November 2003</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>18,604,931</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>53.28</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>5.45</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
</TABLE>
<P align="left">
<DIV align="left">
<HR size="1" noshade width="10%"></DIV>

<DIV align="left"><FONT size="1"><SUP>(1)</SUP>  Includes stock options granted to employees subsequent to year end as part
of year-end compensation.
</FONT></DIV>
<P align="left"><FONT size="2">The options outstanding as of November 2003 are set forth below:
</FONT>

<TABLE cellspacing="0" border="0" cellpadding="0" width="75%">
<TR valign="bottom">
    <TD width="4%"> </TD>
    <TD width="54%"> </TD>
    <TD width="4%"> </TD>
    <TD width="8%"> </TD>
    <TD width="1%"> </TD>
    <TD width="9%"> </TD>
    <TD width="4%"> </TD>
    <TD width="4%"> </TD>
    <TD width="1%"> </TD>
    <TD width="4%"> </TD>
    <TD width="4%"> </TD>
    <TD width="1%"> </TD>
    <TD width="1%"> </TD>
    <TD width="1%"> </TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>WEIGHTED</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>WEIGHTED</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>AVERAGE</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>AVERAGE</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>OPTIONS</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>EXERCISE</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>REMAINING</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="LEFT" colspan="2"><FONT size="1"><B>EXERCISE PRICE</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>OUTSTANDING</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>PRICE</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>LIFE (YEARS)</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">

<TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">$45.00 – $  59.99</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">28,599,381</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">52.95</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">5.44</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>

<TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">60.00 –    74.99</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">—</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">—</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">—</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>

<TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">75.00 –    89.99</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">32,327,078</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">81.08</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">7.92</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>

<TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">90.00 –  104.99</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">28,129,506</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">91.92</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">8.07</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>

<TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><HR size="1" noshade></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Outstanding, November 2003</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">89,055,965</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>

<TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><HR size="1" noshade></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

</TABLE>
<P align="right"><FONT size="2"><I>GOLDMAN SACHS 2003 ANNUAL REPORT</I>  95</FONT>

<P align="center"><FONT size="2"> </FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"> </H5><P>


<P align="left"><FONT size="2"><I>Notes to Consolidated Financial Statements</I>
</FONT>

<P align="left"><FONT size="2">The weighted average fair value of options granted during fiscal 2003, fiscal
2002 and fiscal 2001 was $31.31 per option, $27.38 per option and $30.82 per
option, respectively. Fair value was estimated as of the grant date based on
a binomial option-pricing model using the following weighted average
assumptions:
</FONT>
<TABLE cellspacing="0" border="0" cellpadding="0" width="65%">
<TR valign="bottom">
    <TD width="55%"> </TD>
    <TD width="5%"> </TD>
    <TD width="4%"> </TD>
    <TD width="1%"> </TD>
    <TD width="5%"> </TD>
    <TD width="5%"> </TD>
    <TD width="4%"> </TD>
    <TD width="1%"> </TD>
    <TD width="5%"> </TD>
    <TD width="5%"> </TD>
    <TD width="4%"> </TD>
    <TD width="1%"> </TD>
    <TD width="5%"> </TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="11"><FONT size="1"><B>YEAR ENDED NOVEMBER</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD> </TD>
    <TD><FONT size="1"> </FONT></TD>

    <TD colspan="11"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2003</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Risk-free interest rate</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>3.4</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>%</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">3.5</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">5.2</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Expected volatility</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>35.0</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">35.0</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">35.0</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Dividend yield</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>1.0</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">0.6</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">0.5</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Expected life</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="3" align="center"><FONT size="2"><B>5
years</B>     </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="3" align="center"><FONT size="2">5
years     </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="3" align="center"><FONT size="2">7
years     </FONT></TD>
</TR>
</TABLE>

<P align="left"><FONT size="2"><B><U>NOTE 13</U></B>
</FONT>

<P align="left"><FONT size="2"><B>INCOME TAXES</B></FONT>

<P align="left"><FONT size="2">The components of the net tax expense reflected in the consolidated statements
of earnings are set forth below:
</FONT>

<TABLE cellspacing="0" border="0" cellpadding="0" width="75%">
<TR valign="bottom">
    <TD width="5%"> </TD>
    <TD width="59%"> </TD>
    <TD width="5%"> </TD>
    <TD width="3%"> </TD>
    <TD width="1%"> </TD>
    <TD width="3%"> </TD>
    <TD width="5%"> </TD>
    <TD width="3%"> </TD>
    <TD width="1%"> </TD>
    <TD width="3%"> </TD>
    <TD width="5%"> </TD>
    <TD width="3%"> </TD>
    <TD width="1%"> </TD>
    <TD width="3%"> </TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="11"><FONT size="1"><B>YEAR ENDED NOVEMBER</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="11"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD nowrap colspan="2"><FONT size="1">(IN MILLIONS)</FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2003</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Current taxes</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="1"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
U.S. federal</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>680</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">543</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">781</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>


<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">State and local</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>115</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">35</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">64</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>

<TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Non-U.S.</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>552</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">331</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">489</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total current tax expense</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>1,347</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">909</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">1,334</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Deferred taxes</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="1"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">U.S. federal</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>22</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">7</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(9</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>


<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">State and local</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>27</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">102</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">95</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>

<TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Non-U.S.</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>44</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">121</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(34</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total deferred tax expense/(benefit)</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>93</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">230</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">52</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Net tax expense</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>1,440</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">1,139</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">1,386</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
</TABLE>

<P align="left"><FONT size="2">Deferred income taxes reflect the
net tax effects of temporary
differences between the financial
reporting and tax bases of assets
and liabilities. These temporary
differences
result in taxable or deductible
amounts in future years and are
measured using the tax rates and
laws that will be in effect when
such differences are expected to
reverse.
</FONT>
<P align="left"><FONT size="2">Significant components of the firm’s deferred tax assets and liabilities are
set forth below:
</FONT>

<TABLE cellspacing="0" border="0" cellpadding="0" width="55%">
<TR valign="bottom">
    <TD width="5%"> </TD>
    <TD width="65%"> </TD>
    <TD width="5%"> </TD>
    <TD width="4%"> </TD>
    <TD width="1%"> </TD>
    <TD width="5%"> </TD>
    <TD width="5%"> </TD>
    <TD width="4%"> </TD>
    <TD width="1%"> </TD>
    <TD width="5%"> </TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1"><B>AS OF NOVEMBER</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"> </TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="7"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD nowrap colspan="2"><FONT size="1">(IN MILLIONS)</FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2003</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Deferred tax assets
</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="2"> </FONT></TD>
<TD colspan="1"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Compensation and benefits</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>1,301</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">1,415</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Unrealized losses</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>177</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">173</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Other, net</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>156</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">185</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>1,634</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">1,773</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Valuation allowance<SUP>(1)</SUP></FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>(18</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(17</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total deferred tax assets</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>1,616</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">1,756</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Deferred tax liabilities
</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="1"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Depreciation and amortization</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>196</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">207</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total deferred tax liabilities</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>196</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">207</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Net deferred tax assets</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>1,420</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">1,549</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
</TABLE>

<P align="left">
<DIV align="left">
<HR size="1" noshade width="10%"></DIV>

<DIV align="left"><FONT size="1"><SUP>(1)</SUP>   Relates primarily to the ability to utilize certain state and local and
foreign tax credits.
</FONT></DIV>
<P align="left"><FONT size="2">96  <I>GOLDMAN SACHS 2003 ANNUAL REPORT</I>
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"> </H5><P>

<P align="right"><FONT size="2"><I>Notes to Consolidated Financial Statements</I></FONT>

<P align="left"><FONT size="2">The firm permanently reinvests
eligible earnings of certain foreign
subsidiaries that were incorporated
for U.S. income tax purposes at the
end of fiscal 2001 and, accordingly,
does not accrue any U.S. income
taxes that would arise if such
earnings were repatriated. As of
November 2003, this policy resulted
in an unrecognized net deferred tax
liability of $84 million
attributable to
reinvested earnings of $1.10
billion. Additionally, during 2003,
the valuation allowance was
increased by $1 million, primarily
due to an increase in certain
foreign losses. Acquired net
operating loss carryforwards of $49
million as of November 2003 and $58
million as of November 2002 are
subject to annual limitations on
utilization and will begin to expire
in 2019.
</FONT>
<P align="left"><FONT size="2">A reconciliation of the U.S. federal statutory income tax rate to the firm’s
effective income tax rate is set forth below:
</FONT>

<TABLE cellspacing="0" border="0" cellpadding="0" width="95%">
<TR valign="bottom">
    <TD width="82%"> </TD>
    <TD width="3%"> </TD>
    <TD width="1%"> </TD>
    <TD width="1%"> </TD>
    <TD width="1%"> </TD>
    <TD width="3%"> </TD>
    <TD width="1%"> </TD>
    <TD width="1%"> </TD>
    <TD width="1%"> </TD>
    <TD width="3%"> </TD>
    <TD width="1%"> </TD>
    <TD width="1%"> </TD>
    <TD width="1%"> </TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="11"><FONT size="1"><B>YEAR ENDED NOVEMBER</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="11"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2003</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD> </TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">U.S. federal statutory income tax rate</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>35.0</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>%</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">35.0</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">35.0</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Increase related to state and local taxes, net of U.S. income tax effects</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>2.1</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">2.7</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">2.8</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Tax credits</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>(3.1</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(2.0</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">—</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Foreign operations</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>(1.2</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(0.9</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">—</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Tax-exempt income, including dividends</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>(1.0</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(1.3</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(0.6</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Other</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>0.6</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">1.5</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">0.3</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Effective income tax rate</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>32.4</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>%</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">35.0</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">37.5</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
</TABLE>

<P align="left"><FONT size="2">Tax benefits of approximately $103
million in November 2003, $119
million in November 2002 and $123
million in November 2001, related to
the delivery of restricted stock
units and the exercise of options,
were credited directly to
“Additional paid-in capital” in the
consolidated statements of financial
condition and changes in
shareholders’ equity.
</FONT>
<P align="left"><FONT size="2"><B><U>NOTE 14</U></B>
</FONT>

<P align="left"><FONT size="2"><B>REGULATED SUBSIDIARIES</B></FONT>

<P align="left"><FONT size="2">GS&Co. and SLK are registered U.S.
broker-dealers and futures
commission merchants subject to Rule
15c3-1 of the Securities and
Exchange Commission and Rule 1.17 of
the Commodity Futures Trading
Commission, which specify uniform
minimum net capital requirements, as
defined, for their registrants. They
have elected to compute their net
capital in accordance with the
“Alternative Net Capital
Requirement” as permitted by Rule
15c3-1. As of November 2003 and
November 2002, GS&Co. had
regulatory net capital, as defined,
of $3.66 billion and $4.75 billion,
respectively, which exceeded the
amounts required
by $2.82 billion and $4.09 billion,
respectively. As of November 2003
and November 2002, SLK had
regulatory net capital, as defined,
of $1.12 billion and $1.28 billion,
respectively, which exceeded the
amounts required by $1.08 billion
and $1.24 billion, respectively.
</FONT>
<P align="left"><FONT size="2">GSI, a registered U.K. broker-dealer,
is subject to the capital
requirements of the Financial
Services Authority, and GSJL, a
Tokyo-based broker-dealer, is subject
to the capital requirements of the
Financial Services Agency. As of
November 2003 and November 2002, GSI
and GSJL were in compliance with
their local capital adequacy
requirements.
</FONT>
<P align="left"><FONT size="2">Certain other subsidiaries of the
firm are also subject to capital
adequacy requirements promulgated by
authorities of the countries in which
they operate. As of November 2003 and
November 2002, these subsidiaries
were in compliance with their local
capital adequacy requirements.
</FONT>
<P align="right"><FONT size="2"><I>GOLDMAN SACHS 2003 ANNUAL REPORT </I>97</FONT>

<P align="center"><FONT size="2"> </FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"> </H5><P>



<P align="left"><FONT size="2"><I>Notes to Consolidated Financial Statements</I>
</FONT>

<P align="left"><FONT size="2"><B><U>NOTE 15</U></B></FONT>

<P align="left"><FONT size="2"><B>BUSINESS SEGMENTS</B></FONT>

<P align="left"><FONT size="2">In reporting to management, the
firm’s operating results are
categorized into the following three
segments: Investment Banking,
Trading and Principal Investments,
and Asset Management and Securities
Services.
</FONT>
<P align="left"><FONT size="2">The firm made certain changes to its
segment reporting structure in 2003.
These changes included reclassifying
the following from Asset Management
and Securities Services to Trading
and Principal Investments:
</FONT>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="3%"><FONT size="2"> </FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">•</FONT></TD>
    <TD width="3%"><FONT size="2"> </FONT></TD>
    <TD width="93%"><FONT size="2">equity commissions and clearing
and execution fees;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2"> </FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">•</FONT></TD>
    <TD width="3%"><FONT size="2"> </FONT></TD>
    <TD width="93%"><FONT size="2">merchant
banking overrides; and</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2"> </FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">•</FONT></TD>
    <TD width="3%"><FONT size="2"> </FONT></TD>
    <TD width="93%"><FONT size="2">the
matched book businesses.</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">These reclassifications did not
affect the firm’s historical
consolidated results of operations,
financial condition or cash flows.
Certain reclassifications have been
made to previously reported amounts
to conform to the current
presentation.
</FONT>
<P align="left"><FONT size="2"><B>Basis of Presentation</B>
</FONT>

<P align="left"><FONT size="2">In reporting segments, certain of
the firm’s business lines have been
aggregated where they have similar
economic characteristics and are
similar in each of the following
areas: (i) the nature of the
services they provide, (ii) their
methods of distribution, (iii) the
types of clients they serve and (iv)
the regulatory environments in which
they operate.
</FONT>
<P align="left"><FONT size="2">The cost drivers of the firm taken
as a whole—compensation, headcount
and levels of business activity—are
broadly similar in each of the
firm’s business segments.
Compensation expenses within the
firm’s segments reflect, among other
factors, the performance of the
individual business units as well as
the overall performance of the firm.
Consequently, pre-tax margins in one
segment of the firm’s business may
be significantly affected by the
performance of the firm’s other
business segments.
</FONT>
<P align="left"><FONT size="2">The firm allocates revenues and
expenses among the three segments.
Due to the integrated nature of the
business segments, estimates and
judgments have been made in
allocating certain revenue and
expense items. Transactions between
segments are based on specific
criteria or approximate third-party
rates. Total operating expenses
include corporate items that have
not been allocated to individual
business segments. The allocation
process is based on the manner in
which management views the business
of the firm.
</FONT>
<P align="left"><FONT size="2">The segment information presented in
the table below is prepared
according to the following
methodologies:
</FONT>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="3%"><FONT size="2"> </FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">•</FONT></TD>
    <TD width="3%"><FONT size="2"> </FONT></TD>
    <TD width="93%"><FONT size="2">Revenues and expenses
directly associated with each
segment are included in
determining pretax earnings.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2"> </FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">•</FONT></TD>
    <TD width="3%"><FONT size="2"> </FONT></TD>
    <TD width="93%"><FONT size="2">Net revenues in the firm’s
segments include allocations
of interest income and
interest expense to specific
securities, commodities and
other positions
in relation to the cash generated
by, or funding requirements of,
such underlying positions. Net
interest is included within
segment net revenues as it is
consistent with the way in which
management assesses segment
performance.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2"> </FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">•</FONT></TD>
    <TD width="3%"><FONT size="2"> </FONT></TD>
    <TD width="93%"><FONT size="2">Overhead expenses not
directly allocable to
specific segments are
allocated ratably based on
direct segment expenses.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2"> </FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">•</FONT></TD>
    <TD width="3%"><FONT size="2"> </FONT></TD>
    <TD width="93%"><FONT size="2">The nonrecurring expenses
associated with the firm’s
acquisition awards and
conversion to corporate form
and related transactions are
not allocated to individual
segments as management
excludes them in evaluating
segment performance.</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">98 <I>GOLDMAN SACHS 2003 ANNUAL REPORT</I>
</FONT>

<P align="center"><FONT size="2"> </FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"> </H5><P>

<P align="right"><FONT size="2"><I>Notes to Consolidated Financial Statements</I></FONT>

<P align="left"><FONT size="2"><B>Segment Operating Results</B>
</FONT>

<P align="left"><FONT size="2">Management believes that the following information provides a reasonable
representation of each segment’s contribution to consolidated pre-tax
earnings and total assets:
</FONT>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="31%"> </TD>
    <TD width="3%"> </TD>
    <TD width="14%"> </TD>
    <TD width="1%"> </TD>
    <TD width="15%"> </TD>
    <TD width="3%"> </TD>
    <TD width="4%"> </TD>
    <TD width="1%"> </TD>
    <TD width="4%"> </TD>
    <TD width="3%"> </TD>
    <TD width="4%"> </TD>
    <TD width="1%"> </TD>
    <TD width="4%"> </TD>
    <TD width="3%"> </TD>
    <TD width="4%"> </TD>
    <TD width="1%"> </TD>
    <TD width="4%"> </TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="11"><FONT size="1"><B>AS OF OR FOR YEAR ENDED NOVEMBER</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="11"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="left"><FONT size="1">(IN MILLIONS)</FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2003</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="5"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Investment Banking</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">Net revenues<SUP>(1)</SUP></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>2,711</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">2,830</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">3,836</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">Operating
expenses<SUP>(2)</SUP></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>2,504</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">2,454</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">3,117</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">Pre-tax earnings</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>207</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">376</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">719</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">Segment assets</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>4,867</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">4,555</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">3,938</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">

<TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Trading and Principal Investments</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">Net revenues<SUP>(1)</SUP></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>10,443</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">8,647</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">9,570</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">

<TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">Operating expenses<SUP>(2)</SUP></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>6,938</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">6,505</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">7,310</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">Pre-tax earnings</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>3,505</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">2,142</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">2,260</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">Segment assets</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>250,490</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">246,789</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">215,654</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD nowrap><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Asset Management and Securities Services</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">Net revenues<SUP>(1)</SUP></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>2,858</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">2,509</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">2,405</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">

<TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">Operating expenses<SUP>(2)</SUP></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>1,890</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">1,562</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">1,325</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">Pre-tax earnings</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>968</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">947</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">1,080</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">Segment assets</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>147,647</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">103,436</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">91,788</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">Net
revenues<SUP>(1)</SUP></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>16,012</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">13,986</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">15,811</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">Operating expenses<SUP>(2)(3)</SUP></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>11,567</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">10,733</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">12,115</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">Pre-tax earnings</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>4,445</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">3,253</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">3,696</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">Total assets<SUP>(4)</SUP></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>403,799</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">355,574</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">312,218</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
</TABLE>
</CENTER>
<HR align='left' size="1" noshade width='10%'>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="1%" nowrap valign="top"><FONT size="1"><SUP>(1)</SUP>  </FONT></TD>
    <TD width="99%"><FONT size="1">Net revenues include net interest and cost of power generation as set forth
in the table below:</FONT></TD>
</TR>
</TABLE>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="96%">
<TR valign="bottom">
    <TD width="70%"> </TD>
    <TD width="5%"> </TD>
    <TD width="2%"> </TD>
    <TD width="1%"> </TD>
    <TD width="2%"> </TD>
    <TD width="5%"> </TD>
    <TD width="2%"> </TD>
    <TD width="1%"> </TD>
    <TD width="2%"> </TD>
    <TD width="5%"> </TD>
    <TD width="2%"> </TD>
    <TD width="1%"> </TD>
    <TD width="2%"> </TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="11"><FONT size="1"><B>YEAR ENDED NOVEMBER</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="11"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="left"><FONT size="1">(IN MILLIONS)</FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2003</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">Investment Banking</FONT></DIV></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD align="right"><FONT size="1"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="1"><B>311</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD align="right"><FONT size="1">$</FONT></TD>
    <TD align="right"><FONT size="1">258</FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD align="right"><FONT size="1">$</FONT></TD>
    <TD align="right"><FONT size="1">159</FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">Trading and Principal Investments</FONT></DIV></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD align="right"><FONT size="1"> </FONT></TD>
    <TD align="right"><FONT size="1"><B>1,888</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD align="right"><FONT size="1">1,350</FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD align="right"><FONT size="1">274</FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">Asset Management and Securities Services</FONT></DIV></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD align="right"><FONT size="1"> </FONT></TD>
    <TD align="right"><FONT size="1"><B>941</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD align="right"><FONT size="1">793</FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD align="right"><FONT size="1">860</FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
</TR>
<TR valign="bottom">

<TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1"> </FONT></DIV></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD align="right"><FONT size="1"><B> </B></FONT></TD>
    <TD align="right"><FONT size="1"><HR size="1" noshade></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD align="right"><FONT size="1"> </FONT></TD>
    <TD align="right"><FONT size="1"><HR size="1" noshade></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD align="right"><FONT size="1"> </FONT></TD>
    <TD align="right"><FONT size="1"><HR size="1" noshade></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">Total net interest and cost of power generation</FONT></DIV></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD align="right"><FONT size="1"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="1"><B>3,140</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD align="right"><FONT size="1">$</FONT></TD>
    <TD align="right"><FONT size="1">2,401</FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD align="right"><FONT size="1">$</FONT></TD>
    <TD align="right"><FONT size="1">1,293</FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
</TR>
<TR valign="bottom">

<TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1"> </FONT></DIV></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD align="right"><FONT size="1"><B> </B></FONT></TD>
    <TD align="right"><FONT size="1"><HR size="1" noshade></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD align="right"><FONT size="1"> </FONT></TD>
    <TD align="right"><FONT size="1"><HR size="1" noshade></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD align="right"><FONT size="1"> </FONT></TD>
    <TD align="right"><FONT size="1"><HR size="1" noshade></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
</TR>

</TABLE>
</CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="1%" nowrap valign="top"><FONT size="1"><SUP>(2)</SUP>  </FONT></TD>
    <TD width="99%"><FONT size="1">Operating expenses include depreciation and amortization, including the amortization of
goodwill and intangible assets, as set forth in the table below:
</FONT></TD>
</TR>
</TABLE>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="96%">
<TR valign="bottom">
    <TD width="70%"> </TD>
    <TD width="5%"> </TD>
    <TD width="2%"> </TD>
    <TD width="1%"> </TD>
    <TD width="2%"> </TD>
    <TD width="5%"> </TD>
    <TD width="2%"> </TD>
    <TD width="1%"> </TD>
    <TD width="2%"> </TD>
    <TD width="5%"> </TD>
    <TD width="2%"> </TD>
    <TD width="1%"> </TD>
    <TD width="2%"> </TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="11"><FONT size="1"><B>YEAR ENDED NOVEMBER</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="11"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="left"><FONT size="1">(IN MILLIONS)</FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2003</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">Investment Banking</FONT></DIV></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD align="right"><FONT size="1"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="1"><B>180</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD align="right"><FONT size="1">$</FONT></TD>
    <TD align="right"><FONT size="1">140</FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD align="right"><FONT size="1">$</FONT></TD>
    <TD align="right"><FONT size="1">172</FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">Trading and Principal Investments</FONT></DIV></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD align="right"><FONT size="1"> </FONT></TD>
    <TD align="right"><FONT size="1"><B>584</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD align="right"><FONT size="1">473</FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD align="right"><FONT size="1">577</FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">Asset Management and Securities Services</FONT></DIV></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD align="right"><FONT size="1"> </FONT></TD>
    <TD align="right"><FONT size="1"><B>117</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD align="right"><FONT size="1">131</FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD align="right"><FONT size="1">124</FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1"> </FONT></DIV></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD align="right"><FONT size="1"><B> </B></FONT></TD>
    <TD align="right"><FONT size="1"><HR size="1" noshade></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD align="right"><FONT size="1"> </FONT></TD>
    <TD align="right"><FONT size="1"><HR size="1" noshade></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD align="right"><FONT size="1"> </FONT></TD>
    <TD align="right"><FONT size="1"><HR size="1" noshade></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">Total depreciation and amortization</FONT></DIV></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD align="right"><FONT size="1"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="1"><B>881</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD align="right"><FONT size="1">$</FONT></TD>
    <TD align="right"><FONT size="1">744</FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD align="right"><FONT size="1">$</FONT></TD>
    <TD align="right"><FONT size="1">873</FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B> </B></FONT></TD>
    <TD align="right"><FONT size="2"><HR size="1" noshade></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><HR size="1" noshade></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><HR size="1" noshade></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
</TABLE>
</CENTER>

<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="1%" nowrap valign="top"><FONT size="1"><SUP>(3)</SUP>  </FONT></TD>
    <TD width="99%"><FONT size="1">Includes the following expenses that have not been allocated to the
firm’s segments: (i) the amortization of employee initial public offering
awards of $80 million, $212 million and </FONT></TD>
</TR>



<TR valign="bottom">
    <TD width="1%" valign="top" nowrap><FONT size="1"> </FONT></TD>
    <TD width="99%"><FONT size="1">$363 million for the years ended
November 2003, November 2002 and November 2001, respectively, and (ii)
provisions for a number of litigation and regulatory proceedings of $155
million for the year ended November 2003.</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD width="1%" valign="top" nowrap><FONT size="1"><SUP>(4)</SUP>  </FONT></TD>
    <TD width="99%"><FONT size="1">Includes deferred tax assets relating to the firm’s conversion to
corporate form and certain assets that management believes are not allocable
to a particular segment.
</FONT></TD>
</TR>
</TABLE>

<P align="right"><FONT size="2"><I>GOLDMAN SACHS 2003 ANNUAL REPORT </I>99</FONT>


<P align="center"><FONT size="2"> </FONT>





<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"> </H5><P>

<P align="left"><FONT size="2"><I>Notes to Consolidated Financial Statements</I>
</FONT>

<P align="left"><FONT size="2"><B>Geographic Information</B></FONT>

<P align="left"><FONT size="2">Due to the highly integrated nature
of international financial markets,
the firm manages its businesses
based on the profitability of the
enterprise as a whole. Accordingly,
management believes that
profitability by geographic region
is not necessarily meaningful.
</FONT>
<P align="left"><FONT size="2">The firm’s revenues, expenses and
identifiable assets are generally
allocated based on the country of
domicile of the legal entity
providing the service.
</FONT>
<P align="left"><FONT size="2">The following table sets forth the total net revenues, pre-tax earnings and
identifiable assets of the firm and its consolidated subsidiaries by
geographic region allocated on the basis described above:
</FONT>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="5%"> </TD>
    <TD width="38%"> </TD>
    <TD width="5%"> </TD>
    <TD width="6%"> </TD>
    <TD width="1%"> </TD>
    <TD width="7%"> </TD>
    <TD width="5%"> </TD>
    <TD width="6%"> </TD>
    <TD width="1%"> </TD>
    <TD width="7%"> </TD>
    <TD width="5%"> </TD>
    <TD width="6%"> </TD>
    <TD width="1%"> </TD>
    <TD width="7%"> </TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="11"><FONT size="1"><B>AS OF OR FOR YEAR ENDED NOVEMBER</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="11"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="left" colspan="2"><FONT size="1">(IN MILLIONS)</FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2003</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1"> </FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Net revenues</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">United States</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>10,040</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">8,633</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">10,228</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Other Americas</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>231</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">352</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">187</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">United Kingdom</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>3,610</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">2,991</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">3,483</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Other Europe</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>427</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">479</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">473</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Asia</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>1,704</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">1,531</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">1,440</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total net revenues</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>16,012</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">13,986</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">15,811</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Pre-tax earnings</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">United States</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>3,105</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">1,850</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">2,418</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Other Americas</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>217</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">293</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">260</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">United Kingdom</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>610</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">525</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">665</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Other Europe</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>90</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">173</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">241</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Asia</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>658</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">624</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">475</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Other<SUP>(1)</SUP></FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>(235</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(212</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(363</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total pre-tax earnings</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>4,445</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">3,253</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">3,696</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Identifiable assets</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">United States</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>400,996</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">393,333</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">340,409</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Other Americas</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>1,241</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">3,284</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">2,637</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">United Kingdom</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>184,476</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">144,608</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">131,812</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Other Europe</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>8,022</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">8,573</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">8,129</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Asia</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>26,650</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">25,422</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">25,367</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Eliminations and other<SUP>(2)</SUP></FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>(217,586</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(219,646</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD nowrap align="right"><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">(196,136</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total identifiable assets</FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>403,799</B></FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">355,574</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">312,218</FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
<TR>
    <TD><FONT size="2"> </FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"> </FONT></DIV></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><FONT size="2"> </FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2"> </FONT></TD>
</TR>
</TABLE>
</CENTER>
<P>
<HR align='left' size="1" noshade width='10%'>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="1%" valign="top" nowrap><FONT size="1"><SUP>(1)</SUP>  </FONT></TD>
    <TD width="99%"><FONT size="1">Includes the following expenses that have not been allocated to the firm’s
segments: (i) amortization of employee initial public offering awards of
$80 million, $212 million and</FONT></TD>
</TR>

<TR valign="bottom">
    <TD width="1%" valign="top" nowrap><FONT size="1"> </FONT></TD>
    <TD width="99%"><FONT size="1">$363 million for the years ended November
2003, November 2002 and November 2001, respectively, and (ii) provisions for a number of litigation and regulatory proceedings of $155
million for the year ended November 2003.</FONT></TD>
</TR>

<TR valign="bottom">
    <TD width="1%" valign="top" nowrap><FONT size="1"><SUP>(2)</SUP>  </FONT></TD>
    <TD width="99%"><FONT size="1">Reflects eliminations and certain assets that are not allocable to a
particular geographic region.</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">100 <I>GOLDMAN SACHS 2003 ANNUAL REPORT</I>
</FONT>

<P align="center"><FONT size="2"> </FONT>

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