Filed Pursuant to Rule 424(b)(3)
Registration Statement No. 333-112367
Pricing Supplement to the Prospectus Supplement No. 440 dated October 20,
2004 -- No. 471
-------------------
(GOLDMAN SACHS LOGO)
THE GOLDMAN SACHS GROUP, INC.
Medium-Term Notes, Series B
-------------------
$70,000,000.00
2.00% Exchangeable Basket-Linked Notes due February 2012
(Exchangeable for a Basket of Three Common Stocks and Two ADSs)
-------------------
This pricing supplement and the accompanying prospectus supplement no. 440,
relating to the exchangeable basket-linked notes, should be read together.
Because the exchangeable basket-linked 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. 440 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. 440,
unless the context requires otherwise.
The exchangeable basket-linked notes offered by this pricing supplement,
which we call the "offered notes", have the terms described in the accompanying
prospectus supplement no. 440, as supplemented or modified by the following:
ISSUER: The Goldman Sachs Group, Inc.
FACE AMOUNT: $70,000,000.00 in the aggregate for all the offered notes
ORIGINAL ISSUE PRICE: 100% of the face amount
NET PROCEEDS TO ISSUER: 99.60% of the face amount
TRADE DATE: January 26, 2005
SETTLEMENT DATE (ORIGINAL ISSUE DATE): February 2, 2005
STATED MATURITY DATE: February 2, 2012, unless extended for up to six business
days
INTEREST RATE (COUPON): 2.00% per year
INTEREST PAYMENT DATES: August 2 and February 2 of each year, commencing on
August 2, 2005
BASKET STOCKS AND BASKET STOCK ISSUERS: common stock of Amgen Inc. (AMGN), Eli
Lilly and Company (LLY) and Schering-Plough Corporation (SGP) and the
American Depositary Shares (ADSs) of Sanofi-Aventis (SNY) and
GlaxoSmithKline plc (GSK), with each basket stock having a relative weight
on the trade date of 20%
PRINCIPAL AMOUNT: on the stated maturity date, we will pay the holder of an
offered note cash equal to 100% of the outstanding face amount of the note,
unless the holder exercises the exchange right, we exercise the call right
or an automatic exchange occurs
EXCHANGE RATE: 8.8106. Upon any voluntary or automatic exchange, we may, in our
sole discretion, elect to pay the cash value of the basket stocks we would
otherwise be obligated to deliver, as described in the accompanying
prospectus supplement no. 440
EARLIEST CALL DATE; REDEMPTION PRICE: we may, in our sole discretion, redeem
the offered notes at any time after February 2, 2008, at a redemption price
equal to 100% of the outstanding face amount; provided, however, that the
holder will be entitled to the benefit, if any, of an automatic exchange. If
we call the offered notes, we will give notice to the holders not less than
5 nor more than 15 business days before the call date
REFERENCE BASKET LEVEL (AS DETERMINED ON THE TRADE DATE): $100.00
DENOMINATIONS: face amount of $1,000, and integral multiples thereof
CUSIP NO.: 38143UBA8
Your investment in the notes involves certain risks. In particular,
assuming no changes in market conditions or any other relevant factors, the
value of your note on the date of this pricing supplement (as determined by
reference to pricing models used by Goldman, Sachs & Co.) is significantly less
than the original issue price. We encourage you to read "Additional Risk Factors
Specific to Your Note" beginning on page S-2 of this pricing supplement and on
page S-3 of the accompanying prospectus supplement no. 440 so that you may
better understand those risks.
-------------------
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.
-------------------
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.
-------------------
GOLDMAN, SACHS & CO.
-------------------
Pricing Supplement dated January 26, 2005.
EXPIRATION OF EXCHANGE RIGHT: If a holder wishes to exercise the exchange
right, the required deliveries described in
the accompanying prospectus supplement no.
440 under "General Terms of the
Exchangeable Basket-Linked
Notes -- Holder's Exchange
Right -- Exercise Requirements" must be
made no later than 11:00 A.M., New York
City time, on the last day before the
determination date that qualifies as both a
business day and a trading day or any call
notice date, whichever is earlier.
NO LISTING: The offered notes will not be listed on any
securities exchange or interdealer market
quotation system.
DETERMINATION DATE: The fifth trading day prior to February 2,
2012 unless extended for up to five
business days.
GLAXOSMITHKLINE ADSs: Each GlaxoSmithKline ADS currently
represents two GlaxoSmithKline ordinary
shares. The GlaxoSmithKline ADSs are issued
pursuant to the deposit agreement between
GlaxoSmithKline plc and The Bank of New
York, as ADS depositary. You may obtain
additional information about the terms of
this agreement from the periodic
information submitted by GlaxoSmithKline
plc to the SEC, as described below.
SANOFI-AVENTIS ADSs: Each Sanofi-Aventis ADS currently
represents one-half of one Sanofi-Aventis
ordinary share. The Sanofi-Aventis ADSs are
issued pursuant to the deposit agreement
between Sanofi-Aventis and The Bank of New
York, as ADS depositary. You may obtain
additional information about the terms of
this agreement from the periodic
information submitted by Sanofi-Aventis to
the SEC, as described below.
ADDITIONAL RISK FACTORS SPECIFIC
TO YOUR NOTE: ASSUMING NO CHANGES IN MARKET CONDITIONS OR
ANY OTHER RELEVANT FACTORS, THE VALUE OF
YOUR NOTE ON THE DATE OF THIS PRICING
SUPPLEMENT (AS DETERMINED BY REFERENCE TO
PRICING MODELS USED BY GOLDMAN, SACHS &
CO.) IS SIGNIFICANTLY LESS THAN THE
ORIGINAL ISSUE PRICE
The value or quoted price of your note at
any time, however, will reflect many
factors and cannot be predicted. If
Goldman, Sachs & Co. makes a market in the
offered notes, the price quoted by Goldman,
Sachs & Co. would reflect any changes in
market conditions and other relevant
factors, and the quoted price could be
higher or lower than the original issue
price, and may be higher or lower than the
value of your note 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 note or otherwise
values your note,
S-2
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 Your
Note -- The Market Price of Your Note May
Be Influenced by Many Unpredictable
Factors" in the accompanying prospectus
supplement no. 440.
Furthermore, if you sell your note, 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 note; and, in this regard,
Goldman, Sachs & Co. is not obligated to
make a market in the notes. See "Additional
Risk Factors Specific to Your Note -- Your
Note May Not Have an Active Trading Market"
in the accompanying prospectus supplement
no. 440.
THERE ARE IMPORTANT DIFFERENCES BETWEEN THE
RIGHTS OF HOLDERS OF ADSs AND THE RIGHTS OF
HOLDERS OF THE ORDINARY SHARES THE ADSs
REPRESENT
Because your note is linked in part to the
value of ADSs of GlaxoSmithKline and
Sanofi-Aventis, and not to the ordinary
shares of those companies, you should be
aware of the differences between ADSs and
ordinary shares. ADSs are securities that
represent a specified number of underlying
ordinary shares of a non-U.S. company. The
ADSs included in the basket are issued
under a deposit agreement between the
relevant basket stock issuer and the
relevant ADS depositary. In each case, the
ADS deposit agreement sets forth the rights
and responsibilities of the ADS depositary,
the basket stock issuer and the ADS
holders, which may be different from the
rights of holders of ordinary shares of
that basket stock issuer. For example, a
basket stock issuer may make distributions
in respect of its ordinary shares that are
not passed on to holders of its ADSs. In
addition, the calculation agent will not be
required to make anti-dilution adjustments
for every corporate event that may affect
the ordinary shares that the ADSs
represent.
GLAXOSMITHKLINE ADSs AND SANOFI-AVENTIS
ADSs MAY TRADE DIFFERENTLY FROM
GLAXOSMITHKLINE ORDINARY SHARES AND
SANOFI-AVENTIS ORDINARY SHARES,
RESPECTIVELY.
The basket includes ADSs representing
ordinary shares of non-U.S. companies.
These ordinary shares
S-3
are not quoted and traded in U.S. dollars.
You should be aware that an investment in
securities linked to the value of such ADSs
involves particular risks. For example,
fluctuations in the exchange rate between
the British pound and the U.S. dollar may
affect the U.S. dollar equivalent of the
British pound price of GlaxoSmithKline
ordinary shares and may, in turn, affect
the U.S. dollar market price of the
GlaxoSmithKline ADSs and therefore may also
affect the market value of your note.
Similar considerations apply to the
euro-dollar exchange rate with respect to
the Sanofi-Aventis ADSs, which represent
ordinary shares that trade on the Premier
Marche of Euronext Paris S.A.
The exchange rate between the euro or the
British pound, on the one hand, and the
U.S. dollar, on the other hand, may
fluctuate over time due to the interaction
of many factors directly or indirectly
affecting economic and political conditions
in Europe as a whole and the United States,
including economic and political
developments in other countries. For more
information on currency related risks,
please see "Considerations Relating to
Securities Denominated or Payable in or
Linked to a Non-U.S. Dollar Currency" in
the accompanying prospectus dated February
6, 2004.
While the ADSs of GlaxoSmithKline and
Sanofi-Aventis are listed and traded in the
United States, the ordinary shares of those
companies are quoted and traded on foreign
securities markets, which may have less
liquidity and greater volatility than U.S.
and market developments may affect foreign
markets differently from U.S or other
securities markets. Also, there may be less
publicly available information about
foreign companies, including those that
file periodic reports with the U.S.
Securities and Exchange Commission, than
about those U.S. companies that are subject
to the reporting requirements of the U.S.
Securities and Exchange Commission. Foreign
companies are subject to accounting,
auditing and financial reporting standards
and requirements that differ from those
applicable to U.S. reporting companies.
YOU WILL NOT HAVE ANY SHAREHOLDER RIGHTS
AND MAY HAVE NO RIGHTS TO RECEIVE ADSs OR
THE ORDINARY SHARES THEY REPRESENT.
Investing in your note will not make you a
holder of the ADSs or ordinary shares of
either GlaxoSmithKline or Sanofi-Aventis.
Neither you nor any other holder or owner
of your note will have any voting rights,
any right to receive dividends or other
distribu-
S-4
tions or any other rights with respect to
the ADSs and ordinary shares of either
GlaxoSmithKline or Sanofi-Aventis. For more
information on shareholder rights, please
see "Additional Risk Factors Specific to
Your Note -- You Will Note Have Any
Shareholder Rights and May Note Have Any
Rights to Receive Stock" in the
accompanying prospectus dated February 6,
2004.
INITIAL BASKET STOCK PRICE: The initial stock price for each of the
basket stocks is as follows:
<Table>
1. Amgen Inc. $63.564 per share
2. GlaxoSmithKline plc. $45.130 per ADS
3. Eli Lilly and Company $55.725 per share
4. Schering-Plough Corporation $19.882 per share
5. Sanofi-Aventis $37.855 per ADS
</Table>
BASKET STOCK CLOSING PRICE: The closing price of one share of the
relevant basket stock on any trading day.
REFERENCE AMOUNT: The initial reference amount for each of
the basket stocks is as follows:
<Table>
1. Amgen Inc. 0.3146 shares
2. GlaxoSmithKline plc 0.4432 ADSs
3. Eli Lilly and Company 0.3589 shares
4. Schering-Plough Corporation 1.0059 shares
5. Sanofi-Aventis 0.5283 ADSs
</Table>
The reference amount for each basket stock
is subject to anti-dilution adjustment,
both as to the amount and type of property
comprising the reference amount, as
described in the accompanying prospectus
supplement no. 440 for basket stocks that
are common stocks, and as further described
below for basket stocks that are ADSs.
CLOSING LEVEL OF THE BASKET: The closing level of the basket on any
trading day will equal the sum of the
products of each basket stock's closing
price on that day times that basket stock's
reference amount. The closing level of the
basket on the trade date was $99.80.
For the avoidance of doubt, "primary
market" or "principal stock exchange," as
used under "Market disruption event" on p.
S-25 and "Closing Price" on p. S-24 of the
prospectus supplement no. 440, means the
New York Stock Exchange, or other U.S.
stock exchange on which the ADSs are
listed, regardless of the primary market of
the ordinary shares represented by such
ADSs.
HYPOTHETICAL RETURNS TABLE: In the table below, we compare the total
pretax return on owning the basket stocks
(having the same relative weightings as
they do in the basket) to the total pretax
return on owning your note, in each case
S-5
during the period from the trade date to
the stated maturity date. The information
in the table is based on hypothetical
market values for the basket stocks and
your note at the end of this period, and on
the key terms and assumptions stated in the
box below. In the paragraphs following the
table, we explain how we have calculated
these hypothetical returns.
The basket stocks have been highly volatile
in the past and their performance cannot be
predicted for any future period. The actual
performance of the basket stocks over the
life of the offered notes, as well as the
amount payable at maturity, may bear little
relation to the historical trading prices
of the basket stocks shown above or to the
hypothetical return examples shown below.
KEY TERMS AND ASSUMPTIONS
<Table>
Original issue price, expressed as a percentage of the
face amount......................................... 100%
Exchange rate......................................... 8.8106
Reference basket level (as determined on the trade
date)............................................... $100.00
Premium (as a percentage of the reference basket
level).............................................. 13.50%
Annual basket stock dividend yield, expressed as a
percentage of the reference amounts of the basket
stocks (assumed).................................... 1.75%
Automatic exchange in full on the stated maturity
date -- i.e., no prior redemption or voluntary
exchange (assumed)..................................
No dilution event or other change in or affecting any
of the basket stocks (assumed)......................
No market disruption event occurs (assumed)...........
</Table>
We calculate the total pretax return on
your note based on the exchange rate of
8.8106 for each $1,000 of the outstanding
face amount of your note. This exchange
rate was determined by dividing $1,000 by
the product of the reference basket level
times an amount equal to one plus a premium
of 13.50%. Because the exchange rate has
been determined in this manner, the closing
level of the basket must increase by the
determination date to an amount equal to
the reference basket level times an amount
equal to one plus the premium in order for
the holder of a note to receive stock or
cash having a value in excess of the
principal amount (100% of the outstanding
face amount) on the stated maturity date.
S-6
This closing basket level is substantially
higher than the reference basket level of
$100.00. There is no assurance that the
closing basket level will increase to that
extent by the determination date.
As stated above, the following table
assumes that dividends will be paid on the
basket stocks at the annual basket stock
dividend yield shown in the box above, from
the trade date to the stated maturity date.
We do not know, however, whether or to what
extent the issuers of the basket stocks
will pay dividends in the future. These are
matters that will be determined by the
issuers of the basket stocks and not by us.
Consequently, the amount of dividends
actually paid on the basket stocks by their
issuers, and, therefore, the rate of pretax
return on the basket stocks during the life
of the offered notes, may differ
substantially from the information
reflected in the table below.
<Table>
<Caption>
BASKET YOUR NOTE
----------------------------------------- ---------------------------
HYPOTHETICAL
CLOSING
BASKET HYPOTHETICAL
LEVEL ON MARKET
HYPOTHETICAL STATED VALUE ON
CLOSING MATURITY STATED
BASKET DATE MATURITY
LEVEL ON AS % OF DATE
STATED REFERENCE HYPOTHETICAL AS % OF HYPOTHETICAL
MATURITY BASKET PRETAX TOTAL FACE PRETAX TOTAL
DATE LEVEL RETURN AMOUNT RETURN
------------ ------------ ------------ ------------ ------------
$50.00 50% -37.8% 100.0% 14.0%
$70.00 70% -17.8% 100.0% 14.0%
$90.00 90% 2.3% 100.0% 14.0%
$100.00 100% 12.3% 100.0% 14.0%
$110.00 110% 22.3% 100.0% 14.0%
$120.00 120% 32.3% 105.7% 18.7%
$150.00 150% 62.3% 132.2% 45.2%
$200.00 200% 112.3% 176.2% 89.2%
</Table>
The hypothetical pretax total return on the
basket represents the difference between
(a) the hypothetical closing level of the
basket on the stated maturity date plus the
dividends that would be paid at the assumed
dividend yield rate during the period from
the trade date to the stated maturity date,
without reinvestment of those dividends,
and (b) the reference basket level. This
difference is expressed as a percentage of
the reference basket level.
The hypothetical pretax total return on
your note represents the difference between
(a) the hypothetical market value of your
note on the stated maturity date plus the
amount of interest that would be payable on
your note during the period from the trade
date to the stated maturity date (or to the
prior interest payment date as described
below), without reinvestment of that
interest, and (b) the hypothetical market
value of your note on the trade date. This
difference is expressed as a percentage of
the
S-7
hypothetical market value of your note on
the trade date.
We have assumed that the market value of
your note on the stated maturity date will
equal the greater of the principal amount
(100% of outstanding face amount) of your
note and the cash value (based on the
hypothetical closing basket level shown
above) of the basket stock that we would be
obligated to deliver on that date in an
automatic exchange of your note. There will
be no automatic exchange on the stated
maturity date, however, unless that cash
value exceeds the sum of the outstanding
principal amount plus the amount of the
regular interest installment payable on
your note on that date. Moreover, if an
automatic exchange occurs, the holder will
not be entitled to receive that interest
installment (as a result, where the
hypothetical market value of your note is
assumed to equal the automatic exchange
amount, the hypothetical total return on
your note is assumed to include interest
accruing only to the interest payment date
before the stated maturity date).
Therefore, we have assumed that, unless
that cash value exceeds that sum, the
market value of your note on the stated
maturity date will equal the principal
amount.
We have also assumed that the closing level
of the basket will be the same on the
determination date and the stated maturity
date. Because the value of the shares or
cash that we will deliver on your note on
the stated maturity date will depend on the
closing level of the basket on the
determination date, changes in the closing
level of the basket between the
determination date and the stated maturity
date could cause the pretax returns on your
note to be substantially different from
those reflected in the table above.
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 or no relation
to the hypothetical values shown above, and
those values should not be viewed as an
indication of the financial return on an
investment in the offered notes or on an
investment in the basket stocks. The pretax
rates of return shown above are entirely
hypothetical; they are based on market
values that may not be achieved on the
relevant date and on assumptions that may
prove to be erroneous and do not take into
account the effects of any applicable
taxes. Please read "Additional Risk Factors
Specific to Your Note" and "Hypothetical
Returns on Your Note" in the accompanying
prospectus supplement no. 440.
S-8
Payments on this note are economically
equivalent to the amounts that would be
paid on a combination of other instruments.
For example, payments on the note are
economically equivalent to the amounts that
would be paid on a combination of an
interest-bearing bond and an option, in
each case, bought by the holder (with an
implicit option premium paid over time by
the holder). The discussion in this
paragraph does not modify or affect the
terms of the note or the United States
income tax treatment of the note as
described under "Supplemental Discussion of
Federal Income Tax Consequences" in the
accompanying prospectus supplement no. 440.
HEDGING: In anticipation of the sale of the offered
notes, we and/or our affiliates have
entered into hedging transactions involving
purchases of the basket stocks 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. 440.
DESCRIPTION OF THE BASKET STOCK
ISSUERS: According to its publicly available
documents, Amgen Inc. is a global
biotechnology company that discovers,
develops, manufactures, and markets human
therapeutics based on advances in cellular
and molecular biology. Information filed
with the SEC by the index stock issuer
under the Exchange Act can be located by
referencing its SEC file number: 000-12477.
According to publicly available documents,
Eli Lilly and Company discovers, develops,
manufactures and sells pharmaceutical
products. Information filed with the SEC by
Eli Lilly and Company under the Exchange
Act can be located by referencing its SEC
file number: 001-06351.
According to its publicly available
documents, GlaxoSmithKline plc engages in
the creation, discovery, development,
manufacture and marketing of pharmaceutical
and consumer health-related products.
Information filed with the SEC by
GlaxoSmithKline plc under the Exchange Act
can be located by referencing its SEC file
number: 001-15170.
According to its publicly available
documents, Schering-Plough Corporation,
through its subsidiaries, is engaged in the
discovery, development, manufacturing and
marketing of pharmaceutical products
worldwide. Information filed with the SEC
by Schering-Plough Corporation under the
Exchange Act can be
S-9
located by referencing its SEC file number:
001-06571.
According to its publicly available
documents, Sanofi-Aventis is a
pharmaceutical company that engages in
research and development in seven major
therapeutic areas: cardiovascular disease,
thrombosis, oncology, diabetes, central
nervous system, internal medicine and
vaccines. Information filed with the SEC by
Sanofi-Aventis under the Exchange Act can
be located by referencing its SEC file
number: 001-31368.
HISTORICAL TRADING PRICE
INFORMATION: Amgen Inc. is traded on the Nasdaq National
Market System under the symbol "AMGN". Eli
Lilly and Company, GlaxoSmithKline plc
ADSs, Schering-Plough Corporation and
Sanofi-Aventis ADSs are traded on the New
York Stock Exchange, under the symbols
"LLY", "GSK", "SGP" and "SNY",
respectively. The following tables show the
quarterly high, low and final closing
prices as traded on the Nasdaq National
Market System or New York Stock Exchange,
as applicable, for each of the basket
stocks, in each case for the four calendar
quarters in each of 2003 and 2004 and for
the first calendar quarter in 2005, through
January 26, 2005. We obtained the trading
price information shown below from
Bloomberg Financial Services, without
independent verification.
The actual performance of the basket stocks
over the life of the offered notes may bear
little relation to the historical trading
prices of the basket stocks shown below.
S-10
AMGEN INC.
<Table>
<Caption>
HIGH LOW CLOSE
---- --- -----
2003
Quarter ended March 31... $58.87 $48.88 $57.55
Quarter ended June 30.... $67.50 $57.60 $65.94
Quarter ended September
30..................... $71.54 $64.52 $64.52
Quarter ended December
31..................... $67.14 $57.62 $61.79
2004
Quarter ended March 31... $66.23 $57.83 $58.15
Quarter ended June 30.... $60.43 $52.82 $54.57
Quarter ended September
30..................... $59.98 $53.23 $56.81
Quarter ended December
31..................... $64.76 $52.70 $64.15
2005
Quarter ending March
31(through January 26,
2005).................. $64.87 $62.12 $63.56
Closing price on January
26, 2005............... $63.56
</Table>
GLAXOSMITHKLINE PLC
<Table>
<Caption>
HIGH LOW CLOSE
---- --- -----
2003
Quarter ended March 31... $39.93 $32.75 $35.19
Quarter ended June 30.... $43.70 $35.85 $40.54
Quarter ended September
30..................... $43.01 $37.40 $42.40
Quarter ended December
31..................... $47.40 $42.77 $46.62
2004
Quarter ended March 31... $46.93 $39.38 $39.95
Quarter ended June 30.... $43.50 $39.44 $41.46
Quarter ended September
30..................... $43.84 $39.04 $43.73
Quarter ended December
31..................... $47.50 $41.15 $47.39
2005
Quarter ending March
31(through January 26,
2005).................. $47.35 $44.48 $45.15
Closing price on January
26, 2005............... $45.15
</Table>
S-11
ELI LILLY AND COMPANY
<Table>
<Caption>
HIGH LOW CLOSE
---- --- -----
2003
Quarter ended March 31... $67.98 $53.70 $57.15
Quarter ended June 30.... $69.83 $57.73 $68.97
Quarter ended September
30..................... $70.33 $57.99 $59.40
Quarter ended December
31..................... $73.89 $60.78 $70.33
2004
Quarter ended March 31... $74.70 $65.00 $66.90
Quarter ended June 30.... $76.26 $67.60 $69.91
Quarter ended September
30..................... $67.39 $60.05 $60.05
Quarter ended December
31..................... $62.01 $50.44 $56.75
2005
Quarter ending March
31(through January 26,
2005).................. $57.78 $54.84 $55.50
Closing price on January
26, 2005............... $55.50
</Table>
SCHERING-PLOUGH CORPORATION
<Table>
<Caption>
HIGH LOW CLOSE
---- --- -----
2003
Quarter ended March 31... $23.68 $15.45 $17.83
Quarter ended June 30.... $20.47 $16.82 $18.60
Quarter ended September
30..................... $19.35 $14.95 $15.24
Quarter ended December
31..................... $17.39 $14.52 $17.39
2004
Quarter ended March 31... $18.97 $15.96 $16.22
Quarter ended June 30.... $18.70 $16.10 $18.48
Quarter ended September
30..................... $19.98 $17.55 $19.06
Quarter ended December
31..................... $21.12 $16.72 $20.88
2005
Quarter ending March
31(through January 26,
2005).................. $21.41 $19.77 $19.77
Closing price on January
26, 2005............... $19.77
</Table>
S-12
SANOFI-AVENTIS
<Table>
<Caption>
HIGH LOW CLOSE
---- --- -----
2003
Quarter ended March 31... $31.04 $22.80 $25.55
Quarter ended June 30.... $33.28 $26.02 $29.15
Quarter ended September
30..................... $32.00 $26.50 $30.22
Quarter ended December
31..................... $37.75 $30.53 $37.75
2004
Quarter ended March 31... $39.85 $32.30 $32.67
Quarter ended June 30.... $33.80 $29.36 $31.99
Quarter ended September
30..................... $36.68 $32.01 $36.61
Quarter ended December
31..................... $40.45 $35.20 $40.05
2005
Quarter ending March
31(through January 26,
2005).................. $39.80 $37.15 $37.83
Closing price on January
26, 2005............... $37.83
</Table>
As indicated above, the market prices of
basket stocks have been highly volatile
during recent periods. It is impossible to
predict whether the price of any of the
basket stocks will rise or fall and you
should not view the historical prices of
the basket stocks 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. 440.
ANTI-DILUTION PROVISIONS FOR
ADDs: The anti-dilution provisions described
under "-- Anti-Dilution Adjustments" on
pages S-17 through S-22 in the accompanying
prospectus supplement no. 440 will apply to
your note, but with important modifications
to reflect the fact that your note is
linked, in part, to the value of ADSs
directly, and only indirectly to the value
of the ordinary shares represented by the
ADSs. In general, with respect to the ADSs
of GlaxoSmithKline and Sanofi-Aventis, all
references to "shares" or "basket stock" in
these provisions shall be deemed to mean
ADSs and all references to "holders" of
common stock of the basket stock issuer
shall be deemed to mean holders of ADSs.
Accordingly, for the purposes of making any
adjustments described on page S-17 of the
accompanying prospectus supplement no. 440,
ADSs will be treated like common stock if a
comparable adjustment to the ordinary
shares represented by the ADSs is made
pursuant to the terms of the relevant
deposit agreement or if holders of the ADSs
are entitled to receive property in
S-13
respect of the underlying ordinary shares.
The ex-dividend date for any dividend of
other distribution will be the first day on
which the relevant ADS trades without the
right to receive that dividend or
distribution. We will not make anti-
dilution adjustments to reflect dilution
events that affect the ordinary shares
represented by the ADSs, except as the
result of any of the events described on
S-17 through S-22 in the accompanying
prospectus supplement no. 440. In addition,
no adjustment will be made as a result of
any event if and to the extent that any
securities, cash or other property
distributed in that event are not passed
through to the holders of that basket stock
issuer's ADSs generally, either by
distribution of that property to those
holders directly or by distribution of that
property to the relevant ADS depositary for
the benefit of those holders, with the ADS
depositary either selling that property and
distributing the sale proceeds to those
holders or holding that property so that,
under the terms of the relevant deposit
agreement, the ADSs represent that
property.
In general, if an event requiring
anti-dilution adjustment occurs, the
calculation agent will make the adjustment
with a view to offsetting, to the extent
practical, any change in the economic
position of the holder and The Goldman
Sachs Group, Inc., relative to your note,
that results from that event. The
calculation agent may, in its sole
discretion, modify the anti-dilution
adjustments described above as necessary to
ensure an equitable result. HOWEVER, AS
STATED ABOVE, NO ADJUSTMENT WILL BE MADE TO
REFLECT ANY DISTRIBUTION OF SECURITIES,
CASH OR OTHER PROPERTY THAT IS NOT PASSED
THROUGH TO THE HOLDERS OF GLAXOSMITHKLINE
ADSS OR SANOFI-AVENTIS ADSS GENERALLY OR TO
THE APPLICABLE ADS DEPOSITARY FOR THEIR
BENEFIT AS DESCRIBED ABOVE. Also, no
adjustment will be made to reflect any
event that would not require an adjustment
of the reference amount of underlying
shares under the provisions described in
"Stock Splits", "Reverse Stock Splits",
"Stock Dividends", "Other Dividends and
Distributions", "Transferable Rights" and
"Reorganization Events" on pages S-19 to
S-22 in the accompanying prospectus
supplement no. 440.
As noted above, the steps described here
apply only with respect to the ADSs
included in the basket. For any anti-
dilution event relating to one of the three
common stocks included in the basket, the
anti-dilution provisions described under
"-- Anti-Dilution Adjustments" on pages
S-17 through S-22 in the accompanying
prospectus supplement no. 440 will apply to
your note without modification.
S-14
NOTICE OF EXCHANGE
Dated:
The Bank of New York
Corporate Trust Administration
101 Barclay Street, 21W
New York, New York 10286
<Table>
Attn: Caroline Hyunji Lee (212-815-4991)
Hector Herrera (212-815-4293)
Fax: (212-815-5802)
</Table>
with a copy to:
Goldman, Sachs & Co.
85 Broad Street
Options and Derivatives Operations
New York, New York 10004
<Table>
Attn: Sharon Seibold (212-902-7921)
Stephen Barnitz (212-357-4217)
Fax: (212-902-7993)
</Table>
Re: 2.00% Exchangeable Basket-Linked Notes due February 2012, issued by The
Goldman Sachs Group, Inc.
(Exchangeable for a Basket of Three Common Stocks and Two ADSs)
Dear Sirs:
The undersigned is, or is acting on behalf of, the beneficial owner of a portion
of one of the notes specified above, which portion has an outstanding face
amount equal to or greater than the amount set forth at the end of this notice
of exchange. The undersigned hereby irrevocably elects to exercise the exchange
right described in the pricing supplement no. 471, dated January 26, 2005, to
the prospectus supplement no. 440, dated October 20, 2004, with respect to the
outstanding face amount of the note set forth at the end of this notice of
exchange. The exercise is to be effective on the business day on which the
trustee has received this notice of exchange, together with all other items
required to be delivered on exercise, and the calculation agent has received a
copy of this notice of exchange, unless all required items have not been
received by 11:00 A.M., New York City time, on that business day, in which case
the exercise will be effective as of the next business day. We understand,
however, that the effective date in all cases must be no later than the earlier
of (i) the business day before the determination date and (ii) any call notice
date. The effective date will be the exchange notice date.
If the note to be exchanged is in global form, the undersigned is delivering
this notice of exchange to the trustee and to the calculation agent, in each
case by facsimile transmission to the relevant number stated above, or such
other number as the trustee or calculation agent may have designated for this
purpose to the holder. In addition, the beneficial interest in the face amount
indicated below is being transferred on the books of the depositary to an
account of the trustee at the depositary.
If the note to be exchanged is not in global form, the undersigned or the
beneficial owner is the holder of the note and is delivering this notice of
exchange to the trustee and to the calculation agent by facsimile transmission
as described above. In addition, the certificate representing the note and any
payment required in respect of accrued interest are being delivered to the
trustee.
S-15
If the undersigned is not the beneficial owner of the note to be exchanged, the
undersigned hereby represents that it has been duly authorized by the beneficial
owner to act on behalf of the beneficial owner.
Terms used and not defined in this notice have the meanings given to them in the
pricing supplement no. 471, dated January 26, 2005, and the prospectus
supplement no. 440, dated October 20, 2004. The exchange of the note will be
governed by the terms of the note.
The calculation agent should internally acknowledge receipt of the copy of this
notice of exchange, in the place provided below, on the business day of receipt,
noting the date and time of receipt. The consideration to be delivered or paid
in the requested exchange should be made on the fifth business day after the
exchange notice date in accordance with the terms of the note.
S-16
Face amount of note to be exchanged:
$
(must be a minimum of $1,000 and
integral multiples thereof)
Very truly yours,
-----------------------------------
(Name of beneficial owner or person
authorized to act on its behalf)
-----------------------------------
(Title)
-----------------------------------
(Telephone No.)
-----------------------------------
(Fax No.)
-----------------------------------
(DTC participant account number for
delivery of basket stocks, if any)
FOR INTERNAL USE ONLY:
Receipt of the above notice of
exchange
is hereby acknowledged:
GOLDMAN, SACHS & CO., as
calculation agent
By:
- -----------------------------------
(Title)
Date and time of receipt:
- -----------------------------------
(Date)
- -----------------------------------
(Time)
S-17