Key Questions and Answers from third quarter fiscal 2007 earnings call conducted by Goldman Sachs Group, Inc. (GS: chart) on September 20th, 2007.

Guy Moszkowski (Merrill Lynch): You alluded to $1.7 billion of leverage finance writedowns before fee impact, is that right?

David Viniar: That's correct. That is after the impact.

Guy Moszkowski (Merrill Lynch): I was wondering if you could give us the impact the gross impact before the fees?

David Viniar: It would be about $2.4 billion.

Guy Moszkowski (Merrill Lynch): Several of the other firms that have reported this week have mentioned the benefits of the mark on structured liabilities from your own spread widening. Can you talk about the impact that would have had on Goldman on the fixed income and then separately, the equities business?

David Viniar: The total impact is pretty immaterial in the context of our quarter. It was a little under $300 million in total, and I actually don't have the exact breakdown because it depends on which business unit the structure notes are issued from. Some portion that far would be in the various businesses within FIC and some portion within equities, but the total is less than $300 million.

Guy Moszkowski (Merrill Lynch): You mentioned the backlog being down versus the prior quarter. Is that mostly because of deals that completed or was a large part of that because deals were either pulled or probability adjusted downward?

David Viniar: Well, it is both. Part of it was because of deals being completed. On the debt underwriting side, which was the biggest part of the decline, a substantial portion was because the fees that were expected to be earned on some of the leveraged finance commitments are now not expected to be earned.

Guy Moszkowski (Merrill Lynch): What is the outlook for some of the higher margin structured fixed income products over the next few quarters?

David Viniar: It is always hard to predict what the next quarter or two will bring. I am always more comfortable predicting what I think is going to happen over the medium to long term. It is pretty clear there is going to be lower CDO activity in the next quarter than there was a year ago. I don't think any of those businesses are gone. I think that there is going to be some shakeout and I think and they will be slower over the next couple of quarters, and then we'll see.

Susan Katzke (Credit Suisse): With some of the larger LBO financings coming to market post Labor Day, are you willing to discuss at all the validation of the marks that you took on those commitments at the end of the August?

David Viniar: We haven't sold that much since the end of the quarter, but we have had reasonable sized sales of the some of the positions, and everything that we have sold so far has been either at or slightly above our marks.

Susan Katzke (Credit Suisse): The comp ratio stuck at the 48% level. Can you walk us through your philosophy on comp accruals vis-a-vis the competitive environment? Clearly, with Goldman's revenue this year you have the wherewithal to out pay any of your peers. How much does that factor in?

David Viniar: The competition for talent remains there. We are in a competitive environment. We compete not just with securities firms, we compete with hedge funds and private equity firms and all other types of financial firms. When we look and we do our calculation, we are accrued at 48% because as we sit here today that's our best estimate of what we think we might have to pay. Of course the great majority of our compensation is bonuses. That is calculated and done at the end of each year, so ultimately our compensation expense will be what we pay but we have no better information than 48% today.

Glen Schorr (UBS): Where does the quant investment show up?

David Viniar: It is in equities.

Glen Schorr (UBS): In equities, did I read right somewhere in the press you are up 16% since you made the investment?

David Viniar: It’s 16% from when we invested until the end of the quarter. It will run through equities up and down each quarter.

Glen Schorr (UBS): In asset management, the $19 billion in in-flows the long-term money side, qualitatively, driven via the new funds that you've been talking about or old funds, a combination?

David Viniar: It depends on which sector. In alternative investments the inflows, a lot of that was in new funds we raised. In equities and fixed income it would largely be inflows into the current mutual funds or fixed income funds or other funds we have.

Roger Freeman (Lehman Brothers): With respect to your position on mortgages, you have been open in the past about saying your stance was one of bearishness. Where would you place yourself today?

David Viniar: We are a lot closer to the bottom than where we were at the end of the second quarter. There are still some things that have to be worked through the market, and we haven't seen the end of that, but we are a lot closer to the bottom.

Roger Freeman (Lehman Brothers): In terms of the GO and Global Alpha Funds, can you tell us where they ended for the month of August and relative to where they bottomed? You're up 16% since you made the investment in GO.

David Viniar: GO ended the quarter down a little over 20% for the quarter and Alpha was down about 30% for the quarter.

Roger Freeman (Lehman Brothers): When you made the investment in GO, obviously that was a vote of confidence in the fund. At the time, you had some redemption notice periods coming up. Can you speak to whether there were any significant redemption requests?

David Viniar: In Alpha the redemption requests are a little bit over $1.6 billion and in the other funds given where the funds are, probably not very material to the funds.

Roger Freeman (Lehman Brothers): Can you walk through the loan commitments from the end of the second quarter to the end of the third quarter and what fell away and what got funded, what got resized?

David Viniar: We had about $51 billion of commitments at the end of the second quarter. There was approximately $28 billion that went away either because the deals closed, syndicated, the deals went away, and then there were $19 billion of new commitments which left us with a total of $42 billion at the end of the third quarter.

We mark everything to market based on where we are today, at the end of the third quarter it is the same. Whenever we commit to them, it doesn't really matter. They're all marked to what their current value is and where we can exit them today.