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PRO FORMA CONSOLIDATED INCOME STATEMENT INFORMATION
To the Partners,
We have examined the pro forma adjustments reflecting (i) the
incorporation transactions and the related transactions described under "Certain
Relationships and Related Transactions — Incorporation and Related
Transactions"; (ii) compensation to managing directors who were profit
participating limited partners; (iii) compensation in the form of restricted
stock units awarded to employees in lieu of ongoing cash compensation; and (iv)
the provision for corporate income taxes (collectively, the "Pro Forma
Adjustments"), and the offerings, all as described in Note 2 to the Pro Forma
Consolidated Financial Information (included on pages 25 to 31 of this
prospectus) and the application of those adjustments to the historical amounts
in the Pro Forma Consolidated Income Statement Information for the year ended
November 27, 1998. The historical consolidated income statement information is
derived from the historical consolidated financial statements of Goldman Sachs,
which were audited by us and which are included elsewhere in this prospectus.
The Pro Forma Adjustments are based upon management's assumptions described in
Note 2 to the Pro Forma Consolidated Financial Information. Our examination was
made in accordance with standards established by the American Institute of
Certified Public Accountants and, accordingly, included such procedures as we
considered necessary in the circumstances.
The objective of this pro forma consolidated financial information is
to show what the significant effects on the historical income statement
information of Goldman Sachs might have been had the Pro Forma Adjustments and
the offerings occurred at an earlier date. However, the Pro Forma Consolidated
Income Statement Information is not necessarily indicative of the results of
operations that would have been attained had the above-mentioned Pro Forma
Adjustments and the offerings actually occurred earlier.
In our opinion, management's assumptions provide a reasonable basis for
presenting the significant effects directly attributable to the above-mentioned
Pro Forma Adjustments and the offerings, all as described in Note 2 to the Pro
Forma Consolidated Financial Information, the related pro forma adjustments give
appropriate effect to those assumptions, and the "Pro Forma" and "Pro Forma as
Adjusted for Offerings" columns reflect the proper application of those
adjustments to the historical consolidated income statement amounts in the Pro
Forma Consolidated Income Statement Information for the year ended November 27,
1998.
PricewaterhouseCoopers LLP
New York, New York
PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
To the Partners,
We have reviewed the pro forma adjustments reflecting (i) the
incorporation transactions and the related transactions described under "Certain
Relationships and Related Transactions — Incorporation and Related
Transactions"; (ii) compensation to managing directors who were profit
participating limited partners; (iii) compensation in the form of restricted
stock units awarded to employees in lieu of ongoing cash compensation; (iv) the
provision for corporate income taxes; (v) the redemption of Goldman Sachs'
senior limited partnership interests; (vi) cash distributions by The Goldman
Sachs Group, L.P. to its partners in the second quarter of fiscal 1999 in
accordance with the Goldman Sachs partnership agreement, including distributions
for partner income taxes related to Goldman Sachs' earnings in the first quarter
of fiscal 1999, capital withdrawals by the managing directors who were profit
participating limited partners, Sumitomo Bank Capital Markets, Inc. and
Kamehameha Activities Association and distributions to satisfy obligations to
retired limited partners; and (vii) the recognition of net tax assets
(collectively, the "Pro Forma Adjustments"), and the offerings, all as described
in Note 2 to the Pro Forma Consolidated Financial Information (included on pages
25 to 31 of this prospectus) and the application of those adjustments to the
historical amounts in the Pro Forma Consolidated Balance Sheet Information as of
February 26, 1999 and the Pro Forma Consolidated Income Statement Information
for the three months then ended. The historical consolidated financial statement
information is derived from the historical condensed consolidated financial
statements of Goldman Sachs, which were reviewed by us and which are included
elsewhere in this prospectus. The Pro Forma Adjustments are based upon
management's assumptions described in Note 2 to the Pro Forma Consolidated
Financial Information. Our review was made in accordance with standards
established by the American Institute of Certified Public Accountants.
A review is substantially less in scope than an examination, the
objective of which is the expression of an opinion on management's assumptions,
the pro forma adjustments and the application of those adjustments to historical
financial information. Accordingly, we do not express such an opinion.
The objective of this pro forma consolidated financial information is
to show what the significant effects on the historical financial information of
Goldman Sachs might have been had the Pro Forma Adjustments and the offerings
occurred at an earlier date. However, the Pro Forma Consolidated Income
Statement Information and the Pro Forma Consolidated Balance Sheet Information
are not necessarily indicative of the results of operations or related effects
on financial position that would have been attained had the above-mentioned Pro
Forma Adjustments and the offerings actually occurred earlier.
Based on our review, nothing came to our attention that caused us to
believe that management's assumptions do not provide a reasonable basis for
presenting the significant effects directly attributable to the above-mentioned
Pro Forma Adjustments and the offerings, all
as described in Note 2 to the Pro Forma Consolidated Financial Information, that
the related pro forma adjustments do not give appropriate effect to those
assumptions, or that the "Pro Forma" and "Pro Forma as Adjusted for Offerings"
columns do not reflect the proper application of those adjustments to the
historical consolidated financial statement amounts in the Pro Forma
Consolidated Balance Sheet Information as of February 26, 1999 and the Pro Forma
Consolidated Income Statement Information for the three months then ended.
PricewaterhouseCoopers LLP
New York, New York
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