Pricing Supplement to the Prospectus Supplement No. 371 dated February 6,
2004 -- No. 470
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(GOLDMAN SACHS LOGO)
THE GOLDMAN SACHS GROUP, INC.
Medium-Term Notes, Series B
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$48,656,053.60
4.1% Mandatory Exchangeable Notes due February 2006
(Exchangeable for Common Stock of International Business
Machines Corporation)
-------------------
This pricing supplement and the accompanying prospectus supplement no. 371,
relating to the mandatory exchangeable notes, should be read together. Because
the mandatory exchangeable notes are part of a series of our debt securities
called Medium-Term Notes, Series B, this pricing supplement and the accompanying
prospectus supplement no. 371 should also be read with the accompanying
prospectus dated February 6, 2004, as supplemented by the accompanying
prospectus supplement dated February 6, 2004. Terms used here have the meanings
given them in the accompanying prospectus supplement no. 371, unless the context
requires otherwise.
The mandatory exchangeable notes offered by this pricing supplement, which
we call the "offered notes" or the "notes", have the terms described in the
accompanying prospectus supplement no. 371, as supplemented or modified by the
following:
ISSUER: The Goldman Sachs Group, Inc.
FACE AMOUNT: each offered note will have a face amount equal to $92.344, which
is the initial index stock price; the aggregate face amount for all the offered
notes is $48,656,053.60
INITIAL INDEX STOCK PRICE: $92.344
ORIGINAL ISSUE PRICE: 100% of the face amount
NET PROCEEDS TO THE ISSUER: 99.9% of the face amount
TRADE DATE: January 24, 2005
SETTLEMENT DATE (ORIGINAL ISSUE DATE): January 31, 2005
STATED MATURITY DATE: February 1, 2006, unless extended for up to six business
days
INTEREST RATE (COUPON): 4.1% per year
INTEREST PAYMENT DATES: the first calendar day of each month, until maturity,
commencing on March 1, 2005
REGULAR RECORD DATES: for the interest payment dates specified above, five
business days before the first calendar day of each month
INDEX STOCK AND INDEX STOCK ISSUER: common stock of International Business
Machines Corporation
CUSIP NO.: 38143Y780
Your investment in the notes involves certain risks. We encourage you to
read "Additional Risk Factors Specific to Your Note" beginning on page S-3 of
the accompanying prospectus supplement no. 371 so that you may better understand
those risks. The offered notes are not principal-protected and the payment
amount is capped.
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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.
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Goldman Sachs may use this pricing supplement in the initial sale of the
offered notes. In addition, Goldman, Sachs & Co. or any other affiliate of
Goldman Sachs may use this pricing supplement in a market-making transaction in
an offered 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.
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GOLDMAN, SACHS & CO.
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Pricing Supplement dated January 24, 2005.
PRINCIPAL AMOUNT: On the stated maturity date, each offered
note will be exchanged for index stock at
the exchange rate or, at the option of
Goldman Sachs, for the cash value of that
stock based on the final index stock price.
EXCHANGE RATE: If the final index stock price equals or
exceeds the threshold appreciation price,
then the exchange rate will equal the
threshold fraction times one share of index
stock for each $92.344 of the outstanding
face amount. Otherwise, the exchange rate
will equal one share of the index stock for
each $92.344 of the outstanding face
amount. The exchange rate is subject to
anti-dilution adjustment as described in
the accompanying prospectus supplement no.
371.
Please note that the amount you receive for
each $92.344 of outstanding face amount on
the stated maturity date will not exceed
the threshold appreciation price and that
it could be substantially less than
$92.344. You could lose your entire
investment in the offered notes.
INITIAL INDEX STOCK PRICE: $92.344 per share.
FINAL INDEX STOCK PRICE: The closing price of one share of the index
stock on the determination date, subject to
anti-dilution adjustment.
THRESHOLD APPRECIATION PRICE: The initial index stock price times 1.10,
which equals $101.5784 per share.
THRESHOLD FRACTION: The threshold appreciation price divided by
the final index stock price.
DETERMINATION DATE: The fifth business day prior to February 1,
2006 unless extended for up to five
business days.
NO LISTING: The offered notes will not be listed on any
securities exchange or interdealer market
quotation system.
INTERNATIONAL BUSINESS MACHINES
CORPORATION: According to its publicly available
documents, International Business Machines
Corporation is a provider of customer
solutions that include, either singularly
or in some combination, technologies,
systems, products, services, software and
financing. Information filed with the SEC
by International Business Machines
Corporation under the Exchange Act can be
located by referencing its SEC file number:
001-02360.
HISTORICAL TRADING PRICE
INFORMATION: The index stock is traded on the New York
Stock Exchange under the symbol "IBM". The
following table shows the quarterly high
and low trading prices and the quarterly
closing prices for the index stock on the
New York Stock Exchange for the four
calendar quarters in each of 2003 and 2004
and the first calendar quarter in 2005,
through January 24, 2005. We obtained the
trading price information shown
S-2
below from Bloomberg Financial Services,
without independent verification.
<Table>
<Caption>
HIGH LOW CLOSE
---- --- -----
2003
Quarter ended March 31....... 88.58 75.18 78.43
Quarter ended June 30........ 89.98 78.71 82.50
Quarter ended September 30... 93.28 79.75 88.33
Quarter ended December 31 ... 93.98 88.15 92.68
2004
Quarter ended March 31....... 100.19 89.70 91.84
Quarter ended June 30........ 94.20 85.53 88.15
Quarter ended September 30... 87.50 82.21 85.74
Quarter ended December 31.... 98.58 84.78 98.58
2005
Quarter ending March 31
(through January 24, 2005)... 97.75 91.79 91.79
Closing price on
January 24, 2005........... 91.79
</Table>
As indicated above, the market price of the
index stock has been highly volatile during
recent periods. It is impossible to predict
whether the price of the index stock will
rise or fall, and you should not view the
historical prices of the index stock as an
indication of future performance. See
"Additional Risk Factors Specific to Your
Note -- The Market Price of Your Note May
Be Influenced by Many Unpredictable
Factors" in the accompanying prospectus
supplement no. 371.
HYPOTHETICAL PAYMENT AMOUNT: The table below shows the hypothetical
payment amounts that we would deliver on
the stated maturity date in exchange for
each $92.344 of the outstanding face amount
of your note, if the final index stock
price were any of the hypothetical prices
shown in the left column. For this purpose,
we have assumed that there will be no anti-
dilution adjustments to the exchange rate
and no market disruption events.
The prices in the left column represent
hypothetical closing prices for one share
of index stock on the determination date
and are expressed as percentages of the
initial index stock price, which equals
$92.344 per share. The amounts in the right
column represent the hypothetical cash
value of the index stock to be exchanged,
based on the corresponding hypothetical
final index stock prices, and are expressed
as percentages of the initial index stock
price. Thus, a hypothetical payment amount
of 100% means that the cash value of the
index stock that we would deliver in
exchange for each $92.344 of the
outstanding face amount of your note on the
stated maturity date would equal 100% of
the initial index stock price, or $92.344,
based on the correspond-
S-3
ing hypothetical final index stock price
and the assumptions noted above.
<Table>
<Caption>
HYPOTHETICAL FINAL INDEX HYPOTHETICAL PAYMENT
STOCK PRICE AS % OF AMOUNTS AS % OF
INITIAL INDEX STOCK PRICE $92.344 FACE AMOUNT
------------------------- --------------------
200% 110%
175% 110%
150% 110%
125% 110%
110% 100%
100% 100%
75% 75%
50% 50%
0% 0%
</Table>
The payment amounts shown above are
entirely hypothetical; they are based on
market prices for the index stock that may
not be achieved on the determination date
and on assumptions that may prove to be
erroneous. The actual market value of your
note on the stated maturity date or at any
other time, including any time you may wish
to sell your note, may bear little relation
to the hypothetical payment amounts shown
above, and those amounts should not be
viewed as an indication of the financial
return on an investment in the offered
notes or on an investment in the index
stock. Please read "Additional Risk Factors
Specific to Your Note" and "Hypothetical
Payment Amounts on Your Note" in the
accompanying prospectus supplement no. 371.
Payments on your note are economically
equivalent to the amounts that would be
paid on a combination of other instruments.
For example, payments on your note are
economically equivalent to the amounts that
would be paid on a combination of an
interest-bearing bond bought, and an option
sold, by the holder (with an implicit
option premium paid over time to the
holder). The discussion in this paragraph
does not modify or affect the terms of the
offered notes or the United States income
tax treatment of the offered notes as
described under "Supplemental Discussion of
Federal Income Tax Consequences" in the
accompanying prospectus supplement no. 371.
HEDGING: In anticipation of the sale of the offered
notes, we and/or our affiliates have
entered into hedging transactions involving
purchases of the index stock on the trade
date. For a description of how our hedging
and other trading activities may affect the
value of your note, see "Additional Risk
Factors Specific to Your Note -- Our
Business Activities May Create Conflicts of
Interest Between You and Us" and "Use of
Proceeds and Hedging" in the accompanying
prospectus supplement no. 371.
S-4