Key questions from the first quarter earnings call conducted by The Goldman Sachs Group, Inc. on March 18, 2008.

Glen Schorr (UBS): How comfortable are you with your liquidity position?

David Viniar: You have heard me talk over the years about liquidity being the single most important thing at Goldman Sachs that is the case for us all the time. It is even more the case in times of market turmoil. Our liquidity position now is stronger than it has ever been before. We have never had a stronger liquidity position than we have right now. Our global core excess which is our pool of cash and cash equivalents, which average in the $60 billion range in the fourth quarter has been significantly higher than that for the entire first quarter and is significantly higher than that now. Most of our short term financing is turned out. We have little rollover risk; it is not zero, but it is little and so we do finance most of our repos for term. We pay for that but we think it is worth it. Our commercial paper is less than $5 billion so it is minimal. We do everything we can to put our liquidity in good shape and it is in as good a shape as we ever seen. The liquidity facility that the Fed has provided, the ability to access the discount window directly for broker dealers is a good thing and will help both our liquidity as well as liquidity in the market. One of the important parts of financing is to have diversification of financing sources. That is another source of diversification. It is another way of financing assets and while we have not used it yet since it is affectively a day old, I would expect that I see no reason we would use it in the future. We would not use in the future. I think we will because it is another source of financing and it is a good source of financing. With all of those things our liquidity position is probably stronger than it has ever been before.

Glen Schorr (UBS): How are you thinking of the distressed opportunities in the market place and how willing you are to take on the Level 3 assets and beef up those positions even though you are getting them at a great price?

David Viniar: Times of distress are times of question but are also times of opportunity. Purchasing distressed assets has actually been a business that has been a good business for Goldman Sachs over the years in various places. Our expectation is that we will see opportunities and we look at everything on a risk reward basis. If we see an asset, we do our best to value it. We do our best to decide what we think the risk is of holding it and what the returns are going to be and if we see good opportunities we would absolutely take advantage of them.

Glen Schorr (UBS): You had a billion in the write-downs on the resi mortgage side. How you have it marked and hedged in Alt-A?

David Viniar: It is mostly Alt-A, some prime, basically all mortgage assets declined in value. Right up to the top of the quality so anything you were loaned went down in value. Mostly all Alt-A, some prime. To give you a sense of what we have, I will just run though it, at the end of the quarter we had $12 billion of prime, $5 billion of Alt-A and $2 billion of sub-prime. Now that is long assets only so it does not take into consideration what hedges we have in place. Most of it was in Alt-A. Alt-A is probably of all of those the hardest to hedge. There is not direct index. You can hedge sub-prime with ABX, you can hedge prime with agencies so there are better hedges for all of them, little for Alt-A. You have to hedge Alt-A with a combination of the other industries and as with all hedges, there is basis risk that is introduced and there is more basis risk with Alt-A than anything and with those losses over the course of the quarter we were not hedged enough.

Glen Schorr (UBS): Do you any interest in the Bear franchise?

David Viniar: That has never been on our radar screen.

Guy Moszkowski (Merrill Lynch): On the leverage finance side you spoke about a reduction over the course of the quarter. What did you sell, what you might have put on at very low prices and how the marks reconciled to sort of actual realized losses?

David Viniar: Beginning of the quarter, we had $26 billion of unfunded; $17 billion of funded; $43 billion total. Over the course of the quarter, we sold or reduced through cancellations about $20 billion. We put on $4 billion of new commitments, obviously put on at the current terms and conditions, leaving us at the end of the quarter $9 billion unfunded; $18 billion funded; $27 billion total. The billion dollars of losses, it was $1.4 billion gross, $1 billion net, a combination of where things were sold and anytime something was sold, anything we had if it was sold below the marks, was marked down to there. We have our positions marked now where we think we can sell them.

Guy Moszkowski (Merrill Lynch): Can you give a sense for total assets and leverage ratios at the end of the quarter?

David Viniar: Gross leverages, assets to equity, round numbers, our assets were about $1.2 trillion and our equity is about $40 billion.

Guy Moszkowski (Merrill Lynch): Could you comment on the marks on commercial real estate finance assets?

David Viniar: Those marks are done with the same level of diligence and vigilance as everything else is marked and as things moved it was marked down. What I mentioned in my script was that the net losses on commercial were not material and that is because we had offsetting gain on hedges. When you hedge commercial real estate loans which are largely single-name loans with induscies which is the best way to hedge it, you are introducing basis risk which we did. We had basis risk but over the course of the quarter, the inducies and the single-names kind of moved in tandem and so they largely offset. We had some losses but they were small. It is something that we watch carefully and we will always get it right but on that basis we did in the course of the first quarter.

Guy Moszkowski (Merrill Lynch): Lehman mentioned in terms of Alt-A hedging, sort of a natural hedge from servicing. You have added servicing capabilities during the quarter. Do you see that as a way of hedging your exposures?

David Viniar: First of all we have just gotten that servicing platform so we are looking at it. The Alt-A is the hardest section to hedge.

Guy Moszkowski (Merrill Lynch): Are you seeing growth in the prime brokerage and clearance business that you can tie directly to what happened to Bear, to what extent are you able to accommodate incremental financing needs that are going to come to you at this point from clients who are sort of displaced?

David Viniar: Our prime brokerage business has grown and continues to grow and that is not necessarily related to what is happening with our competitors. That is more because our business is good and our clients like the service we give them. We get balances both from new hedge funds and from current hedge funds all the time. Those balances have grown and continue to grow. As they grow, we think that is good for us and yes, we can handle what our clients need. We are careful on the financing terms. We have the appropriate margin in place and over the course of the years our losses there have been extremely small.

Guy Moszkowski (Merrill Lynch): Are you seeing any significant securities inventory growth due to seizure of prime brokerage collateral or how quickly are you finding that you are able to liquidate collateral when you seize it?