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LETTER TO SHAREHOLDERS

CONCLUSION
One of the most meaningful tests of individuals and organizations is how well they handle adversity. In 2002, the people of Goldman Sachs rose to meet the challenges of the environment and events with great distinction and considerable success.

We anticipate that the coming year will continue to be difficult, with slow growth in most of our major markets. The international situation, particularly in the Middle East and Asia, is of concern to us all, and will affect market conditions in ways that cannot be predicted. And we believe that close scrutiny of the securities industry and its role in the late 1990s bubble will continue.

However, there is no question that today Goldman Sachs is a stronger firm than we were only a year ago, and well positioned to benefit from the broad secular forces that, despite recent setbacks, are driving profound and lasting global change. As a result, we have even greater confidence in Goldman Sachs' longer-term prospects and success.

HENRY M. PAULSON, JR.
Chairman and
Chief Executive Officer

JOHN A. THAIN
President and
Co-Chief Operating Officer

JOHN L. THORNTON
President and
Co-Chief Operating Officer

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