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Filed Pursuant to Rule 424(b)(3)
Registration Statement No. 333-154173
Amendment No. 1 to the Pricing Supplement No. 285 to theProspectus dated April 6, 2009,
theProspectus Supplement dated April 6, 2009,
and theProspectus Supplement No. 255 dated December 11, 2009
 | The Goldman Sachs Group, Inc. Medium-Term Notes, Series D
$1,500,000 Buffered Index-Linked Notes due 2011 (Linked to the S&P 500® Index)
|
The notes do not bear interest. The amount that you will be paid on your notes on the stated maturity date (August 11, 2011, subject to adjustment) is based on the performance of the S&P 500® Index (which we refer to as the index or underlier,) as measured from the trade date (February 4, 2010) to the determination date (August 4, 2011, subject to adjustment).If the index return (defined below) is less than -12.00%, you could lose your entire investment in the notes. Additionally, the amount you may receive on your notes at maturity is subject to a maximum settlement amount of $1,225.00.
To determine your payment at maturity, we will first calculate the percentage increase or decrease in the final index level (determined on the determination date, subject to adjustment) from the initial index level (1070.45), which we refer to as the index return. The index return may reflect a positive return (based on any increase in the index level over the life of the notes) or a negative return (based on any decrease in the index level over the life of the notes). On the stated maturity date, for each $1,000 face amount of your notes:
| • | if the index return ispositive (the final index level isgreater than the initial index level), you will receive an amount in cash equal to thesum of (i) $1,000plus (ii) theproduct of the index returnmultiplied by $1,000, subject to the maximum settlement amount of $1,225.00; |
| • | if the index return is zero ornegative butnot below -12.00% (the final index level isequal to or less than the initial index level butnot by more than 12.00%), you will receive an amount in cash equal to $1,000; or |
| • | if the index return isnegativeandis below -12.00% (the final index level isless thanthe initial index level by more than 12.00%), you will receive an amount in cash that is equal to thesumof (i) $1,000plus(ii) theproduct of (a) approximately 1.1364times (b) thesum of the index returnplus 12.00%times(c) $1,000. You will receive less than $1,000. |
The amount you will be paid on your notes on the stated maturity date will not be affected by the closing level of the index on any day other than the determination date. You could lose your entire investment in the notes. A percentage decrease of more than 12.00% between the initial index level and the final index level will reduce the payment you will receive, if any, on the stated maturity date below the face amount of your notes, potentially to $0. Further, the maximum payment that you could receive on the stated maturity date with respect to a $1,000 face amount note is limited to the maximum settlement amount of $1,225.00. In addition, the notes do not pay interest, and no other payments on your notes will be made prior to the stated maturity date.
Because we have provided only a brief summary of the terms of your notes above, you should read the detailed description of the terms of the notes found in “Summary Information” on page PS-2 in this pricing supplement and the general terms of the buffered index-linked notes found in “General Terms of the Non-Principal Protected Underlier-Linked Notes” on page S-45 of the accompanying prospectus supplement no. 255.
Your investment in the notes involves certain risks. In particular, assuming no changes in market conditions or our creditworthiness and other relevant factors, the value of your notes on the trade date (as determined by reference to pricing models used by Goldman, Sachs & Co. and taking into account our credit spreads) is, and the price you may receive for your notes may be, significantly less than the original issue price. The value or quoted price of your notes at any time will reflect many factors and cannot be predicted; however, the price at which Goldman, Sachs & Co. would initially buy or sell notes (if Goldman, Sachs & Co. makes a market) and the value that Goldman, Sachs & Co. will initially use for account statements and otherwise will significantly exceed the value of your notes using such pricing models. The amount of the excess will decline on a straight line basis over the period from the date hereof through May 5, 2010. We encourage you to read “Additional Risk Factors Specific to the Non-Principal Protected Underlier-Linked Notes” on page S-33 of the accompanying prospectus supplement no. 255 and “Additional Risk Factors Specific to Your Notes” on page PS-8 of this pricing supplement so that you may better understand those risks.
Original issue date (settlement date):February 11, 2010
Original issue price: 100% of the face amount
Underwriting discount: 0.15% of the face amount
Net proceeds to the issuer:99.85% of the face amount
The issue price, underwriting discount and net proceeds listed above relate to the notes we sell initially. We may decide to sell additional notes after the date of this pricing supplement, at issue prices, underwriting discounts and net proceeds that differ from the amounts set forth above.
Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or passed upon the accuracy or adequacy of this pricing supplement. Any representation to the contrary is a criminal offense.
The notes are not bank deposits and are not insured by the Federal Deposit Insurance Corporation or any other governmental agency, nor are they obligations of, or guaranteed by, a bank.
Goldman Sachs may use this pricing supplement in the initial sale of the notes. In addition, Goldman, Sachs & Co. or any other affiliate of Goldman Sachs may use this pricing supplement in a market-making transaction in a note after its initial sale.Unless Goldman Sachs or its agent informs the purchaser otherwise in the confirmation of sale, this pricing supplement is being used in a market-making transaction.
“Standard & Poor’s®”, “S&P®” and “S&P 500®” are registered trademarks of Standard & Poor’s Financial Services LLC (“Standard & Poor’s”) and are licensed for use by The Goldman, Sachs Group, Inc. and its affiliates. The notes are not sponsored, endorsed, sold or promoted by Standard & Poor’s and Standard & Poor’s does not make any representation regarding the advisability of investing in the notes.
Goldman, Sachs & Co.
Pricing Supplement dated February 9, 2010.
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We refer to the notes we are offering by this pricing supplement as the “offered notes” or the “notes”. Each of the offered notes, including your notes, has the terms described below. Please note that in this pricing supplement, references to “The Goldman Sachs Group, Inc.”, “we”, “our” and “us” mean only The Goldman Sachs Group, Inc. and do not include its consolidated subsidiaries. Also, references to the “accompanying prospectus” mean the accompanying prospectus, dated April 6, 2009, as supplemented by the accompanying prospectus supplement, dated April 6, 2009, of The Goldman Sachs Group, Inc., and references to the “accompanying prospectus supplement no. 255” mean the accompanying prospectus supplement no. 255, dated December 11, 2009, of The Goldman Sachs Group, Inc., to the accompanying prospectus.
This section is meant as a summary and should be read in conjunction with the section entitled “General Terms of the Non-Principal Protected Underlier-Linked Notes” on page S-45 of the accompanying prospectus supplement no. 255.
Key Terms
Issuer: The Goldman Sachs Group, Inc.
Underlier: the S&P 500® Index, as published by Standard & Poor’s Financial Services LLC (“Standard & Poor’s”)
Specified currency: U.S. dollars (“$”)
Terms to be specified in accordance with the accompanying prospectus supplement no. 255:
| • | type of notes: notes linked to a single underlier |
| • | exchange rates: not applicable |
| • | buffer level: yes, as described below |
| • | cap level: yes, as described below |
| • | averaging dates: not applicable |
| • | interest: not applicable |
| • | redemption right or price dependent redemption right: not applicable |
Face amount:each note will have a face amount of $1,000; $1,500,000 in the aggregate for all the offered notes; the aggregate face amount of the offered notes may be increased if the issuer, at its sole option, decides to sell an additional amount of the offered notes on a date subsequent to the date of this pricing supplement but prior to the settlement date
Payment amount: on the stated maturity date we will pay you, for each $1,000 face amount of your notes, an amount in cash equal to the cash settlement amount
Cash settlement amount:
| • | if the final underlier level isgreater than orequal to the cap level, the maximum settlement amount; |
| • | if the final underlier level isgreater than the initial underlier level butless than the cap level, thesumof (1) the $1,000 face amountplus(2) theproductof (i) the $1,000 face amounttimes(ii) the upside participation ratetimes (iii) the underlier return; |
| • | if the final underlier level isequal to orless than the initial underlier level butgreater than orequal to the buffer level, the $1,000 face amount; or |
| • | if the final underlier level isless than the buffer level, thesumof (1) the $1,000 face amountplus (2) the productof (i) the $1,000 face amount times(ii) the buffer rate times(iii) the sum of the underlier return plus the buffer amount |
Initial underlier level:1070.45
Final underlier level: the closing level of the underlier on the determination date, except in the limited circumstances described under “General Terms of the Non-Principal Protected Underlier-Linked Notes — Payment of Principal on Stated Maturity Date — Consequences of a Market Disruption Event or a Non-Trading Day” on page S-52 of the accompanying prospectus supplement no. 255 and subject to adjustment as provided under “General Terms of the Non-Principal Protected Underlier-Linked Notes — Discontinuance or Modification of an Underlier” on page S-53 of the accompanying prospectus supplement no. 255
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Underlier return: thequotient of (1) the final underlier levelminusthe initial underlier leveldividedby (2) the initial underlier level, expressed as a percentage
Upside participation rate: 100%
Cap level: 122.50% of the initial underlier level
Maximum settlement amount: $1,225.00
Buffer level:88.00% of the initial underlier level
Buffer amount: 12.00%
Buffer rate: The quotient of the initial underlier leveldivided by the buffer level, which equals approximately 113.64%
Trade date: February 4, 2010
Original issue date (settlement date):February 11, 2010
Stated maturity date: August 11, 2011, subject to adjustment as described under “General Terms of the Non-Principal Protected Underlier-Linked Notes — Payment of Principal on Stated Maturity Date — Stated Maturity Date” on page S-50 of the accompanying prospectus supplement no. 255
Determination date: August 4, 2011, subject to adjustment as described under “General Terms of the Non-Principal Protected Underlier-Linked Notes — Payment of Principal on Stated Maturity Date — Determination Date” on page S-50 of the accompanying prospectus supplement no. 255
No interest: the offered notes do not bear interest
No listing: the offered notes will not be listed on any securities exchange or interdealer quotation system
No redemption: the offered notes will not be subject to redemption right or price dependent redemption right
Closing level:as described under “General Terms of the Non-Principal Protected Underlier-Linked Notes — Special Calculation Provisions — Closing Level” on page S-56 of the accompanying prospectus supplement no. 255
Business day: as described under “General Terms of the Non-Principal Protected Underlier-Linked Notes — Special Calculation Provisions — Business Day” on page S-56 of the accompanying prospectus supplement no. 255
Trading day: as described under “General Terms of the Non-Principal Protected Underlier-Linked Notes — Special Calculation Provisions — Trading Day” on page S-56 of the accompanying prospectus supplement no. 255
Use of proceeds and hedging: as described under “Use of Proceeds and Hedging” on page S-61 of the accompanying prospectus supplement no. 255
Supplemental discussion of federal income tax consequences: you will be obligated pursuant to the terms of the notes — in the absence of an administrative determination or judicial ruling to the contrary — to characterize each note for all tax purposes as a pre-paid derivative contract in respect of the underlier index, as described under “Supplemental Discussion of Federal Income Tax Consequences” on page S-63 of the accompanying prospectus supplement no. 255
ERISA: as described under “Employee Retirement Income Security Act” on page S-69 of the accompanying prospectus supplement no. 255
Supplemental plan of distribution: as described under “Supplemental Plan of Distribution” on page S-70 of the accompanying prospectus supplement no. 255; The Goldman Sachs Group, Inc. estimates that its share of the total offering expenses, excluding underwriting discounts and commissions, will be approximately $15,000;
we will deliver the notes against payment therefor in New York, New York on February 11, 2010, which is the fifth scheduled business day following the date of the pricing of the notes. Under Rule 15c6-1 of the Exchange Act, trades in the secondary market generally are required to settle in three business days, unless the parties to any such trade expressly agree otherwise. Accordingly, purchasers who wish to trade notes on any date prior to three business days before delivery will be required, by virtue of the fact that the notes will initially settle in five business days (T + 5), to specify alternative settlement arrangements to prevent a failed settlement.
Calculation agent: Goldman, Sachs & Co.
CUSIP no.: 38143UGM7
ISIN no.: US38143UGM71
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Conflicts of interest: Goldman, Sachs & Co. is an affiliate of The Goldman Sachs Group, Inc. and, as such, has a “conflict of interest” in this offering within the meaning of NASD Rule 2720. Consequently, the offering is being conducted in compliance with the provisions of Rule 2720. Goldman, Sachs & Co. is not permitted to sell notes in this offering to an account over which it exercises discretionary authority without the prior specific written approval of the account holder
FDIC: the notes are not bank deposits and are not insured by the Federal Deposit Insurance Corporation (the “FDIC”) or any other governmental agency, nor are they obligations of, or guaranteed by, a bank. In addition, the notes are not guaranteed under the FDIC’s Temporary Liquidity Guarantee Program
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The following table and chart are provided for purposes of illustration only. They should not be taken as an indication or prediction of future investment results and are intended merely to illustrate the impact that the various hypothetical underlier levels on the determination date could have on the payment amount at maturity assuming all other variables remain constant.
The examples below are based on a range of final underlier levels that are entirely hypothetical; no one can predict what the underlier level will be on any day throughout the life of your notes, and no one can predict what the final underlier level will be on the determination date. The underlier has been highly volatile in the past — meaning that the underlier level has changed considerably in relatively short periods — and its performance cannot be predicted for any future period.
The information in the following examples reflects hypothetical rates of return on the offered notes assuming that they are purchased on the original issue date and held to the stated maturity date. If you sell your notes in a secondary market prior to the stated maturity date, your return will depend upon the market value of your notes at the time of sale, which may be affected by a number of factors that are not reflected in the table below such as interest rates and the volatility of the underlier. In addition, assuming no changes in market conditions or our creditworthiness and any other relevant factors, the value of your notes on the trade date (as determined by reference to pricing models used by Goldman, Sachs & Co. and taking into account our credit spreads) is, and the price you may receive for your notes may be, significantly less than the issue price. For more information on the value of your notes in the secondary market, see “Additional Risk Factors Specific to the Non-Principal Protected Underlier-Linked Notes — Assuming No Changes in Market Conditions or any Other Relevant Factors, the Market Value of Your Notes on the Date of Any Applicable Pricing Supplement (as Determined By Reference to Pricing Models Used By Goldman, Sachs & Co.) Will, and the Price You May Receive for Your Notes May, Be Significantly Less Than the Issue Price” on page S-33 of the accompanying prospectus supplement no. 255 and “Additional Risk Factors Specific to Your Notes — Assuming No Changes in Market Conditions or Any Other Relevant Factors, the Market Value of Your Notes on the Trade Date (as Determined By Reference to Pricing Models Used by Goldman, Sachs & Co.) Is, and the Price You May Receive for Your Notes May Be, Significantly Less Than the Issue Price” on page PS-8 of this pricing supplement. The information in the table also reflects the key terms and assumptions in the box below.
Key Terms and Assumptions | ||
| Face amount | $1,000 | |
| Upside participation rate | 100.00% | |
| Cap level | 122.50% of the initial underlier level | |
| Maximum settlement amount | $1,225.00 | |
| Buffer level | 88.00% of the initial underlier level | |
| Buffer rate | approximately 113.64% | |
| Buffer amount | 12.00% | |
| Neither a market disruption event nor a non-trading day occurs on the originally scheduled determination date | ||
| No change in or affecting any of the underlier stocks or the method by which the underlier sponsor calculates the underlier | ||
| Notes purchased on original issue date and held to the stated maturity date
| ||
For these reasons, the actual performance of the underlier over the life of your notes, as well as the amount payable at maturity, if any, may bear little relation to the hypothetical examples shown below or to the historical underlier levels shown elsewhere in this pricing supplement. For information about the historical levels of the underlier during recent periods, see “The Underlier — Historical High, Low and Closing Levels of the Underlier” below. Before investing in the offered notes, you should consult publicly available information to determine the levels of the underlier between the trade date and the date of your purchase of the offered notes.
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Also, the hypothetical examples shown below do not take into account the effects of applicable taxes. Because of the U.S. tax treatment applicable to your notes, tax liabilities could affect the after-tax rate of return on your notes to a comparatively greater extent than the after-tax return on the underlier stocks.
The levels in the left column of the table below represent hypothetical final underlier levels and are expressed as percentages of the initial underlier level. The amounts in the right column represent the hypothetical payment amounts, based on the corresponding hypothetical final underlier level (expressed as a percentage of the initial underlier level), and are expressed as percentages of the face amount of a note (rounded to the nearest one-hundredth of a percent). Thus, a hypothetical payment amount of 100.00% means that the value of the cash payment that we would deliver for each $1,000 of the outstanding face amount of the offered notes on the stated maturity date would equal 100.00% of the face amount of a note, based on the corresponding hypothetical final underlier level (expressed as a percentage of the initial underlier level) and the assumptions noted above.
Hypothetical Final Underlier Level | Hypothetical Payment Amount (as Percentage of Face Amount) | |
| 150.00% | 122.50% | |
| 140.00% | 122.50% | |
| 130.00% | 122.50% | |
| 125.00% | 122.50% | |
| 122.50% | 122.50% | |
| 115.00% | 115.00% | |
| 110.00% | 110.00% | |
| 105.00% | 105.00% | |
| 100.00% | 100.00% | |
| 95.00% | 100.00% | |
| 88.00% | 100.00% | |
| 70.00% | 79.55% | |
| 50.00% | 56.82% | |
| 25.00% | 28.41% | |
| 10.00% | 11.36% | |
| 0.00% | 0.00% |
If, for example, the final underlier level were determined to be 25.00% of the initial underlier level, the payment amount that we would deliver on your notes at maturity would be approximately 28.41% of the face amount of your notes, as shown in the table above. As a result, if you purchased your notes on the original issue date and held them to the stated maturity date, you would lose approximately 71.59% of your investment. In addition, if the final underlier level were determined to be 150.00% of the initial underlier level, the payment amount that we would deliver on your notes at maturity would be capped at the maximum settlement amount (expressed as a percentage of the face amount), or 122.50% of the face amount of your notes, as shown in the table above. As a result, if you purchased your notes on the original issue date and held them to the stated maturity date, you would not benefit from any increase in the final underlier level over 122.50% of the initial underlier level.
The following chart also shows a graphical illustration of the hypothetical payment amounts (expressed as a percentage of the face amount of your notes) that we would pay on your notes on the stated maturity date, if the final underlier level (expressed as a percentage of the initial underlier level) were any of the hypothetical levels shown on the horizontal axis. The chart shows that any hypothetical final underlier level (expressed as a
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percentage of the initial underlier level) of less than 88.00% (the section left of the 88.00% marker on the horizontal axis) would result in a hypothetical payment amount of less than 100.00% of the face amount of your notes (the section below the 100.00% marker on the vertical axis) and, accordingly, in a loss of principal to the holder of the notes. The chart also shows that any hypothetical final underlier level (expressed as a percentage of the initial underlier level) of greater than 122.50% (the section right of the 122.50% marker on the horizontal axis) would result in a capped return on your investment.
The payment amounts shown above are entirely hypothetical; they are based on market prices for the underlier stocks that may not be achieved on the determination date and on assumptions that may prove to be erroneous. The actual market value of your notes on the stated maturity date or at any other time, including any time you may wish to sell your notes, may bear little relation to the hypothetical payment amounts shown above, and these amounts should not be viewed as an indication of the financial return on an investment in the offered notes. Please read “Additional Risk Factors Specific to the Non-Principal Protected Underlier-Linked Notes — The Market Value of Your Notes May Be Influenced by Many Unpredictable Factors” on page S-37 of the accompanying prospectus supplement no. 255.
We cannot predict the actual final underlier level or what the market value of your notes will be on any particular trading day, nor can we predict the relationship between the underlier level and the market value of your notes at any time prior to the stated maturity date. The actual amount that you will receive, if any, at maturity and the rate of return on the offered notes will depend on the actual final underlier level determined by the calculation agent as described above. Moreover, the assumptions on which the hypothetical returns are based may turn out to be inaccurate. Consequently, the amount of cash to be paid in respect of your notes, if any, on the stated maturity date may be very different from the information reflected in the table and chart above.
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ADDITIONAL RISK FACTORS SPECIFIC TO YOUR NOTES
An investment in your notes is subject to the risks described below, as well as the risks described under “Considerations Relating to Indexed Securities” in the accompanying prospectus dated April 6, 2009, and “Additional Risk Factors Specific to the Non-Principal Protected Underlier-Linked Notes” in the accompanying prospectus supplement no. 255. Your notes are a riskier investment than ordinary debt securities. Also, your notes are not equivalent to investing directly in the underlier stocks, i.e., the stocks comprising the underlier to which your notes are linked. You should carefully consider whether the offered notes are suited to your particular circumstances.
Assuming No Changes in Market Conditions or Any Other Relevant Factors, the Market Value of Your Notes on the Trade Date (As Determined By Reference to Pricing Models Used By Goldman, Sachs & Co.) Is, and the Price You May Receive for Your Notes Will Be, Significantly Less Than the Issue Price
The price at which Goldman, Sachs & Co. would initially buy or sell notes (if Goldman, Sachs & Co. makes a market) and the value that Goldman, Sachs & Co. will initially use for account statements and otherwise will significantly exceed the value of your notes using such pricing models. The amount of the excess will decline on a straight line basis over the period from the date hereof through May 5, 2010. After May 5, 2010, the price at which Goldman, Sachs & Co. would buy or sell notes will reflect the value determined by reference to the pricing models, plus our customary bid and asked spread.
In addition to the factors discussed above, the value or quoted price of your notes at any time, however, will reflect many factors and cannot be predicted. If Goldman, Sachs & Co. makes a market in the notes, the price quoted by Goldman, Sachs & Co. would reflect any changes in market conditions and other relevant factors, including a deterioration in our creditworthiness or perceived creditworthiness whether measured by our credit ratings or other credit measures. These changes may adversely affect the market price of your notes, including the price you may receive for your notes in any market making transaction. In addition, even if our creditworthiness does not decline, the value of your notes on the trade date is expected to be significantly less than the original issue price taking into account our credit spreads on that date. The quoted price (and the value of your notes that Goldman, Sachs & Co. will use for account statements or otherwise) could be higher or lower than the original issue price, and may be higher or lower than the value of your notes as determined by reference to pricing models used by Goldman, Sachs & Co.
If at any time a third party dealer quotes a price to purchase your notes or otherwise values your notes, that price may be significantly different (higher or lower) than any price quoted by Goldman, Sachs & Co. You should read “Additional Risk Factors Specific to the Non-Principal Protected Underlier-Linked Notes — The Market Value of Your Notes May Be Influenced by Many Unpredictable Factors” on page S-37 of the accompanying prospectus supplement no. 255.
Furthermore, if you sell your notes, you will likely be charged a commission for secondary market transactions, or the price will likely reflect a dealer discount.
There is no assurance that Goldman, Sachs & Co. or any other party will be willing to purchase your notes and, in this regard, Goldman, Sachs & Co. is not obligated to make a market in the notes. See “Additional Risk Factors Specific to the Non-Principal Protected Underlier-Linked Notes — Your Notes May Not Have an Active Trading Market” on page S-37 of the accompanying prospectus supplement no. 255.
You May Lose Your Entire Investment in the Notes
You can lose all or substantially all of your investment in the notes. The cash payment on your notes, if any, on the stated maturity date will be based on the performance of the S&P 500® Index as measured from the initial underlier level set on the trade date to the closing level on the determination date. If the final underlier level for your notes is less than the buffer level, you will have a loss for each $1,000 of the face amount of
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your notes equal to the product of approximately 1.1364 multiplied by the sum of the underlier return plus the buffer amount multiplied by $1,000. Thus, you may lose your entire investment in the notes.
Also, the market price of your notes prior to the stated maturity date may be significantly lower than the purchase price you pay for your notes. Consequently, if you sell your notes before the stated maturity date, you may receive far less than the amount of your investment in the notes.
Your Notes Do Not Bear Interest
You will not receive any interest payments on your notes. As a result, even if the amount payable for each of your notes on the stated maturity date exceeds the face amount of your notes, the overall return you earn on your notes may be less than you would have earned by investing in a non-indexed debt security of comparable maturity that bears interest at a prevailing market rate.
The Potential for the Value of Your Notes to Increase May Be Limited
Your ability to participate in any change in the value of the underlier over the life of your notes will be limited because of the cap level, which is 122.50% of the initial underlier level. The cap level will limit the amount in cash you may receive for each of your notes at maturity, no matter how much the level of the underlier may rise beyond the cap level over the life of your notes. Accordingly, the amount payable for each of your notes may be significantly less than it would have been had you invested directly in the underlier.
We May Sell an Additional Aggregate Face Amount of the Notes at a Different Issue Price
At our sole option, we may decide to sell an additional aggregate face amount of the notes subsequent to the date of this pricing supplement but prior to the settlement date. The issue price of the notes in the subsequent sale may differ substantially (higher or lower) from the issue price you paid as provided on the cover of this pricing supplement.
Your Notes May Be Subject to an Adverse Change in Tax Treatment in the Future
The Internal Revenue Service announced on December 7, 2007 that it is considering the proper Federal income tax treatment of an instrument such as your notes that are currently characterized as prepaid derivative contracts, which could adversely affect the tax treatment and the value of your notes. Among other things, the Internal Revenue Service may decide to require the holders to accrue ordinary income on a current basis and recognize ordinary income on payment at maturity, and could subject non-US investors to withholding tax. Moreover, in 2007, legislation was introduced in Congress that, if enacted, would have required holders that acquired such notes after the bill was enacted to accrue interest income over the term of such notes even though there may be no interest payments over the term of such notes. It is not possible to predict whether a similar or identical bill will be enacted in the future, or whether any such bill would affect the tax treatment of such notes. We describe these developments in more detail under “Supplemental Discussion of Federal Income Tax Consequences” on page S-63 of the accompanying prospectus supplement no. 255. You should consult your own tax adviser about this matter. Except to the extent otherwise provided by law, The Goldman Sachs Group, Inc. intends to continue treating the notes for U.S. federal income tax purposes in accordance with the treatment described under “Supplemental Discussion of Federal Income Tax Consequences” on page S-63 of the accompanying prospectus supplement no. 255 unless and until such time as Congress, the Treasury Department or the Internal Revenue Service determine that some other treatment is more appropriate.
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The S&P 500® Index includes a representative sample of 500 leading companies in leading industries of the U.S. economy. The S&P 500® Index is calculated, maintained and published by Standard & Poor’s Financial Services LLC (“Standard & Poor’s”).
As of February 4, 2010, the 500 companies included in the S&P 500® Index were divided into ten Global Industry Classification Sectors. The Global Industry Classification Sectors include (with the percentage currently included in such sectors indicated in parentheses): Consumer Discretionary (9.74%), Consumer Staples (11.67%), Energy (11.45%), Financials (14.46%), Health Care (13.11%), Industrials (10.60%), Information Technology (18.91%), Materials (3.41%), Telecommunication Services (2.96%), and Utilities (3.69%). (Sector designations are determined by the index sponsor using criteria it has selected or developed. Index sponsors may use very different standards for determining sector designations. In addition, many companies operate in a number of sectors, but are listed in only one sector and the basis on which that sector is selected may also differ. As a result, sector comparisons between indices with different index sponsors may reflect differences in methodology as well as actual differences in the sector composition of the indices.)
The above information supplements the description of the underlier found in the accompanying prospectus supplement no. 255. For more details about the underlier, the underlier sponsor and license agreement between the underlier sponsor and the issuer, see “The Underliers — S&P 500® Index” on page A-1 of the accompanying prospectus supplement no. 255.
Historical High, Low and Closing Levels of the Underlier
The closing level of the underlier has fluctuated in the past and may, in the future, experience significant fluctuations. Any historical upward or downward trend in the closing level of the underlier during any period shown below is not an indication that the underlier is more or less likely to increase or decrease at any time during the life of your notes.
You should not take the historical levels of the underlier as an indication of the future performance of the underlier. We cannot give you any assurance that the future performance of the underlier or the underlier stocks will result in your receiving an amount greater than the outstanding face amount of your notes on the stated maturity date. In light of the increased volatility currently being experienced by the financial services sector and U.S. and global securities markets, and recent market declines, it may be substantially more likely that you could lose all or a substantial portion of your investment in the notes. During the period from January 3, 2007 through February 4, 2010, there were 401 18-month periods, the first of which began on January 3, 2007 and the last of which ended on February 4, 2010. In 351 of such 401 18-month periods, the closing level of the underlier on the final date of such period has fallen below 88.00% of the closing level of the underlier on the initial date of such period. Therefore, during approximately 87.53% of such 18-month periods, if you had owned notes with terms similar to these notes, you may have received less than the face amount of such notes at maturity. (We calculated these figures using fixed 18-month periods and did not take into account holidays or non-business days.)
Neither we nor any of our affiliates make any representation to you as to the performance of the underlier. The actual performance of the underlier over the life of the offered notes, as well as the amount payable at maturity, may bear little relation to the historical levels shown below.
The table below shows the high, low and final closing levels of the underlier for each of the four calendar quarters in 2007, 2008 and 2009 and the first calendar quarter of 2010 (through February 4, 2010). We obtained the closing levels listed in the table below from Bloomberg Financial Services, without independent verification.
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Quarterly High, Low and Closing Levels of the Underlier
| High | Low | Close | ||||
| 2007 | ||||||
Quarter ended March 31 | 1459.68 | 1374.12 | 1420.86 | |||
Quarter ended June 30 | 1539.18 | 1424.55 | 1503.35 | |||
Quarter ended September 30 | 1553.08 | 1406.70 | 1526.75 | |||
Quarter ended December 31 | 1565.15 | 1407.22 | 1468.36 | |||
| 2008 | ||||||
Quarter ended March 31 | 1447.16 | 1273.37 | 1322.70 | |||
Quarter ended June 30 | 1426.63 | 1278.38 | 1280.00 | |||
Quarter ended September 30 | 1305.32 | 1106.39 | 1166.36 | |||
Quarter ended December 31 | 1161.06 | 752.44 | 903.25 | |||
| 2009 | ||||||
Quarter ended March 31 | 934.70 | 676.53 | 797.87 | |||
Quarter ended June 30 | 946.21 | 811.08 | 919.32 | |||
Quarter ended September 30 | 1071.66 | 879.13 | 1057.08 | |||
Quarter ended December 31 | 1127.78 | 1025.21 | 1115.10 | |||
| 2010 | ||||||
Quarter ending March 31 (through February 4, 2010) | 1150.23 | 1063.11 | 1063.11 |
PS-11
Table of Contents
No dealer, salesperson or other person is authorized to give any information or to represent anything not contained in this pricing supplement. You must not rely on any unauthorized information or representations. This pricing supplement is an offer to sell only the notes offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this pricing supplement is current only as of its date.
Pricing Supplement
| Page | ||
| PS-2 | ||
| PS-4 | ||
| PS-5 | ||
| PS-8 | ||
| PS-10 | ||
| Prospectus Supplement No. 255 dated December 11, 2009 | ||
Summary Information | S-3 | |
Hypothetical Returns on the Non-Principal Protected Underlier-Linked Notes | S-13 | |
Additional Risk Factors Specific to the Non-Principal Protected Underlier-Linked Notes | S-33 | |
General Terms of the Non-Principal Protected Underlier-Linked Notes | S-45 | |
Use of Proceeds and Hedging | S-61 | |
Supplemental Discussion of Federal Income Tax Consequences | S-63 | |
Employee Retirement Income Security Act | S-69 | |
Supplemental Plan of Distribution | S-70 | |
The Underliers | A-1 | |
S&P 500® Index | A-1 | |
MSCI Indices | A-5 | |
Hang Seng China Enterprises Index | A-9 | |
Russell 2000® Index | A-12 | |
FTSE® 100 Index | A-17 | |
Dow Jones Euro STOXX 50® Index | A-20 | |
TOPIX® Index | A-24 | |
| Prospectus Supplement dated April 6, 2009 | ||
Use of Proceeds | S-2 | |
Description of Notes We May Offer | S-3 | |
United States Taxation | S-24 | |
Employee Retirement Income Security Act | S-25 | |
Supplemental Plan of Distribution | S-26 | |
Validity of the Notes | S-27 | |
| Prospectus dated April 6, 2009 | ||
Available Information | 2 | |
Prospectus Summary | 4 | |
Use of Proceeds | 8 | |
Description of Debt Securities We May Offer | 9 | |
Description of Warrants We May Offer | 33 | |
Description of Purchase Contracts We May Offer | 49 | |
Description of Units We May Offer | 54 | |
Description of Preferred Stock We May Offer | 59 | |
The Issuer Trusts | 66 | |
Description of Capital Securities and Related Instruments | 68 | |
Description of Capital Stock of The Goldman Sachs Group, Inc | 91 | |
Legal Ownership and Book-Entry Issuance | 96 | |
Considerations Relating to Securities Issued in Bearer Form | 102 | |
Considerations Relating to Indexed Securities | 106 | |
Considerations Relating to Securities Denominated or Payable in or Linked to a Non-U.S. Dollar Currency | 109 | |
Considerations Relating to Capital Securities | 112 | |
United States Taxation | 116 | |
Plan of Distribution | 140 | |
Employee Retirement Income Security Act | 143 | |
Validity of the Securities | 144 | |
Experts | 144 | |
Cautionary Statement Pursuant to the Private Litigation Reform Act of 1995 | 144 | |
$1,500,000
The Goldman Sachs Group, Inc.
Buffered Index-Linked Notes due 2011
(Linked to the S&P 500® Index)
Medium-Term Notes, Series D
Goldman, Sachs & Co.