<PAGE> 1
Filed pursuant to Rule 424(b)(3)
Registration Statement No. 333-75321
Prospectus Supplement No. 41 to the Prospectus dated May 18, 1999.
$1,000,000,000
THE GOLDMAN SACHS GROUP, INC.
Medium-Term Notes, Series B
7.35% Notes due 2009
------------------------
TERMS OF SALE
The notes being purchased have the following terms:
PRINCIPAL AMOUNT: $1,000,000,000
STATED MATURITY: October 1, 2009
SPECIFIED CURRENCY: U.S. dollars
- principal: U.S. dollars
- interest: U.S. dollars
ORIGINAL ISSUE DATE: September 29, 1999
FORM OF NOTE: book-entry form
REDEMPTION: If Goldman Sachs becomes
obligated to pay additional amounts to
non-U.S. investors due to changes in
U.S. withholding tax requirements,
Goldman Sachs may redeem the notes
before their stated maturity at a
price equal to 100% of the principal
amount redeemed plus accrued interest
to the redemption date.
FIXED INTEREST RATE: yes
- annual rate: 7.35%
- interest payment dates: every April 1 and October 1
- regular record dates: every March 15 and September 15
DEFEASANCE APPLIES AS FOLLOWS:
- full defeasance -- i.e., our right to be relieved of all our obligations
on the note by placing funds in trust for the investor; and
- covenant defeasance -- i.e., our right to be relieved of specified
provisions of the note by placing funds in trust for the investor.
------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER REGULATORY
BODY HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY
OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
------------------------
<TABLE>
<CAPTION>
Per Note Total
-------- -----
<S> <C> <C>
Initial public offering price............................... 99.852% $998,520,000
Underwriting discount....................................... 0.450% $ 4,500,000
Proceeds, before expenses, to The Goldman Sachs Group,
Inc....................................................... 99.402% $994,020,000
</TABLE>
The initial public offering price set forth above does not include accrued
interest, if any. Interest on the notes will accrue from September 29, 1999 and
must be paid by the purchaser if the notes are delivered after September 29,
1999.
------------------------
The notes will be listed on the New York Stock Exchange under the symbol
"GS 09" on or shortly after the closing of the offering.
------------------------
The underwriters expect to deliver the notes in New York, New York on
September 29, 1999.
GOLDMAN, SACHS & CO.
BANC OF AMERICA SECURITIES LLC
CHASE SECURITIES INC.
DEUTSCHE BANC ALEX. BROWN
DONALDSON, LUFKIN & JENRETTE
MCDONALD INVESTMENTS INC.
MERRILL LYNCH & CO.
PAINEWEBBER INCORPORATED
SALOMON SMITH BARNEY
MURIEL SIEBERT & CO., INC.
UTENDAHL CAPITAL PARTNERS, L.P.
WACHOVIA SECURITIES, INC.
------------------------
Prospectus Supplement dated September 22, 1999.
<PAGE> 2
RECENT DEVELOPMENTS
On September 21, 1999, The Goldman Sachs Group, Inc. reported net earnings
of $638 million for its fiscal third quarter ended August 27, 1999.
BUSINESS LINE REVIEW
INVESTMENT BANKING
Investment Banking generated net revenues of $1.2 billion in the third
quarter, a 15% increase over the prior quarter and 20% above the same 1998
period. Goldman Sachs' worldwide advisory and financing businesses continued to
perform strongly as global corporate consolidation fueled healthy deal flow in
financial advisory, and new issue activity remained robust. Net revenue growth
was particularly strong in the technology, energy and power, and retail sectors.
Investment Banking also benefited from active markets in both Europe and Asia.
TRADING AND PRINCIPAL INVESTMENTS
Net revenues in Trading and Principal Investments were $1.4 billion, 16%
lower than an outstanding second quarter of 1999 but substantially above last
year's depressed third quarter. FICC net revenues increased 52% over the same
period in 1998 primarily due to improved performance in Goldman Sachs' trading
and credit-sensitive businesses, which were negatively affected by a dramatic
widening of credit spreads in 1998. Strong results in commodities, which
benefited from increased customer activity, also contributed to the growth in
FICC. Net revenues in Equities increased substantially over the prior year
period primarily due to strength in equity arbitrage, higher transaction volumes
in the global shares businesses and strong customer flow in equity derivatives.
Net revenues in principal investments increased significantly over the prior
year due to mark-to-market gains on certain of Goldman Sachs' merchant banking
investments.
ASSET MANAGEMENT AND SECURITIES SERVICES
Net revenues in Asset Management and Securities Services were $811 million
for the third quarter, an increase of 8% over the second quarter and 13% above
the third quarter of 1998. Asset management revenues increased 11% over the
prior year period, reflecting growth in assets under management. Securities
services net revenues were up 6% compared to the same 1998 period, primarily due
to increased customer balances in Goldman Sachs' securities lending and margin
lending businesses. Commissions rose by 17% compared to the prior year period,
benefiting from higher transaction volumes worldwide in listed equity
securities.
EXPENSE REVIEW
Operating expenses were $2.3 billion in the third quarter. The ratio of
compensation and benefits to net revenues was 50% for both the quarter and
year-to-date periods. Non-compensation-related expenses rose 23% compared to the
same period in 1998 due to higher employment levels and growth in business
activity. Goldman Sachs' effective tax rate was 41%.
CAPITAL
As of August 27, 1999, total capital was $28.9 billion, consisting of $8.6
billion in stockholders' equity and $20.3 billion in long-term debt. Book value
per share was $18.11, based on common shares outstanding, including the
formula-based restricted stock units, of 474,598,485 at period end.
DIVIDEND
On September 20, 1999, the Board of Directors of The Goldman Sachs Group,
Inc. declared a dividend of $0.12 per share to be paid on November 22, 1999 to
voting and nonvoting common stockholders of record on October 25, 1999.
S-2
<PAGE> 3
SPECIFIC TERMS OF THE NOTES
Please note that in this section entitled "Specific Terms of The Notes",
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,
while references to "Goldman Sachs" mean The Goldman Sachs Group, Inc. together
with its consolidated subsidiaries. Also, references to "Holders" means The
Depository Trust Company or its nominee, and not indirect holders who own
beneficial interests in notes through participants in The Depository Trust
Company. Please review the special considerations that apply to indirect holders
in the attached prospectus, under "Description of Notes We May Offer -- Legal
Ownership of Notes".
The notes are one of a series of debt securities, entitled "Medium-Term
Notes, Series B", that we may issue under the indenture from time to time. This
prospectus supplement summarizes specific financial and other terms that apply
to the notes; terms that apply generally to all Series B medium-term notes are
described in "Description of Notes We May Offer" in the attached prospectus. The
terms described here supplement those described in the attached prospectus and,
if the terms described here are inconsistent with those described there, the
terms described here are controlling.
FINANCIAL TERMS OF THE NOTES
The specific financial terms of the notes we are offering are as follows:
- - TITLE OF THE NOTES: 7.35% Notes due 2009
- - ISSUER OF THE NOTES: The Goldman Sachs Group, Inc.
- - TOTAL PRINCIPAL AMOUNT BEING ISSUED: $1,000,000,000
- - DUE DATE FOR PRINCIPAL: October 1, 2009
- - INTEREST RATE: 7.35% annually
- - DATE INTEREST STARTS ACCRUING: September 29, 1999
- - DUE DATES FOR INTEREST: every April 1 and October 1
- - FIRST DUE DATE FOR INTEREST: April 1, 2000
- - REGULAR RECORD DATES FOR INTEREST: every March 15 and September 15
- - ADDITIONAL AMOUNTS: We intend to pay principal and interest without deducting
U.S. withholding taxes. If we are required to deduct from payments to non-U.S.
investors, however, we will pay additional amounts on those payments, but only
to the extent described below under "-- Payment of Additional Amounts".
- - REDEMPTION: We will not have the option to redeem the notes before they
mature, unless we become obligated to pay additional amounts because of
changes in U.S. withholding tax requirements.
- - REPAYMENT AT OPTION OF HOLDER: none
ADDITIONAL INFORMATION
ABOUT THE NOTES
BOOK-ENTRY HOLDERS
We will issue the notes only in book-entry form -- i.e., as global notes
registered in the name of The Depository Trust Company, New York, New York, or
its nominee. The sale of the notes will settle in immediately available funds
through DTC. You will not be permitted to withdraw the notes from The Depository
Trust Company except in the limited situations described in the attached
prospectus under "Description of Notes We May Offer -- What is a Global
Note? -- Special Situations When a Global Note Will Be Terminated".
Investors may hold interests in a global note through organizations that
participate, directly or indirectly, in the DTC system. Those organizations will
include the Cedel and Euroclear systems in Europe. See "Description of Notes We
May Offer -- Legal Ownership of Notes" and "-- What is a Global Note?" in the
attached prospectus.
S-3
<PAGE> 4
YOU CAN HOLD INTERESTS IN GLOBAL NOTES
THROUGH CEDEL AND EUROCLEAR, AS
INDIRECT PARTICIPANTS IN DTC
As long as DTC is the depositary for the global notes, you may hold an
interest in a global note through any organization that participates, directly
or indirectly, in the DTC system. Those organizations include Cedelbank S.A. in
Luxembourg, known as Cedel, and Morgan Guaranty Trust Company of New York,
Brussels office, as operator of the Euroclear system known as Euroclear. If you
are a participant in either of those systems, you may hold your interest
directly in that system. If you are not a participant, you may hold your
interest indirectly through organizations that are participants in that system.
If you hold your interest indirectly, you should note that DTC, Cedel and
Euroclear will have no record of you or your relationship with the direct
participant in their systems.
Cedel and Euroclear are securities clearance systems in Europe, and they
participate indirectly in DTC. Cedel and Euroclear will hold interests in the
global notes on behalf of the participants in their systems, through securities
accounts they maintain in their own names for their customers on their own books
or on the books of their depositaries. Those depositaries, in turn, are
participants in DTC and hold those interests in securities accounts they
maintain in their own names on the books of DTC. Citibank, N.A. acts as
depositary for Cedel and The Chase Manhattan Bank acts as depositary for
Euroclear. Cedel and Euroclear clear and settle securities transactions between
their participants through electronic, book-entry delivery of securities against
payment.
DTC RULES WILL ALSO APPLY TO NOTES HELD THROUGH CEDEL AND EUROCLEAR
If you hold an interest in a global note through Cedel or Euroclear, that
system will credit the payments we make on your note to the account of your
Cedel or Euroclear participant in accordance with that system's rules and
procedures. The participant's account will be credited only to the extent that
the system's depositary receives these payments through the DTC system.
Payments, notices and other communications or deliveries relating to the notes,
if made through Cedel or Euroclear, must comply not only with the rules and
procedures of those systems, but also with the rules and procedures of DTC,
except as described below.
If you hold an interest in a global note through Cedel or Euroclear, you
will not be entitled to exchange your interest for a certificate representing a
non-global note, unless and until the global note is terminated at DTC, as
described under "Description of Notes We May Offer -- What is a Global
Note? -- Special Situations When a Global Note Will Be Terminated" in the
attached prospectus.
Trading in the notes between Cedel participants or between Euroclear
participants will by governed only by the rules and procedures of that system.
We understand that, at present, those systems' rules and procedures applicable
to trades in conventional eurobonds will apply to trades in the notes, with
settlement in immediately available funds.
SPECIAL CONSIDERATIONS FOR CROSS-MARKET TRANSFERS
Cross-market transfers of the notes -- i.e., transfers between investors
who hold or will hold their interests through Cedel or Euroclear, on the one
hand, and investors who hold or will hold their interests through DTC but not
through Cedel or Euroclear, on the other hand -- will be governed by DTC's rules
and procedures in addition to those of Cedel or Euroclear. If you hold your note
through Cedel or Euroclear and you wish to complete a cross-market transfer, you
will need to deliver transfer instructions and payment, if applicable, to Cedel
or Euroclear, through your participant, and that system in turn will need to
deliver them to DTC, through that system's depositary.
Because of time-zone differences between the United States and Europe, any
notes you purchase through Cedel or Euroclear in a cross-market transfer will
not be credited to your account at your Cedel or Euroclear participant until the
business day after the DTC settlement date. For the same reason, if you sell the
notes through Cedel or
S-4
<PAGE> 5
Euroclear in a cross-market transfer, your cash proceeds will be received by the
depositary for that system on the DTC settlement date but will not be credited
to your participant's account until the business day following the DTC
settlement date. In this context, "business day" means a business day for Cedel
or Euroclear.
The description of the clearing and settlement systems in this section
reflects our understanding of the rules and procedures of DTC, Cedel and
Euroclear as currently in effect. Those systems could change their rules and
procedures at any time. We have no control over those systems and we take no
responsibility for their activities.
PAYMENT OF ADDITIONAL AMOUNTS
We intend to make all payments on the notes without deducting U.S.
withholding taxes. If we are required by law to do so on payments to non-U.S.
investors, however, we will pay additional amounts on those payments to the
extent described in this section.
We will pay additional amounts on a note only if the beneficial owner of
the note is a United States alien. The term United States alien means any person
who, for U.S. federal income tax purposes, is:
- - a nonresident alien individual;
- - a foreign corporation;
- - a foreign partnership; or
- - an estate or trust that is not subject to U.S. federal income tax on a net
income basis on income or gain from a note.
If the beneficial owner of a note is a United States alien, we will pay all
additional amounts that may be necessary so that every net payment of interest
or principal on that note will not be less than the amount provided for in that
note. By net payment we mean the amount we or our paying agent pay after
deducting or withholding an amount for or on account of any present or future
tax, assessment or other governmental charge imposed with respect to that
payment by a U.S. taxing authority.
Our obligation to pay additional amounts is subject to several important
exceptions, however. We will NOT pay additional amounts for or on account of any
of the following:
- - any tax, assessment or other governmental charge imposed solely because at any
time there is or was a connection between the beneficial owner -- or between a
fiduciary, settlor, beneficiary or member of the beneficial owner, if the
beneficial owner is an estate, trust or partnership -- and the United States
(other than the mere receipt of a payment or the ownership or holding of a
note), including because the beneficial owner -- or the fiduciary, settlor,
beneficiary or member -- at any time, for U.S. federal income tax purposes:
-- is or was a citizen or resident or is or was treated as a resident of the
United States;
-- is or was present in the United States;
-- is or was engaged in a trade or business in the United States;
-- has or had a permanent establishment in the United States;
-- is or was a domestic or foreign personal holding company, a passive
foreign investment company or a controlled foreign corporation;
-- is or was a corporation that accumulates earnings to avoid U.S. federal
income tax; or
-- is or was a "ten percent shareholder" of The Goldman Sachs Group, Inc.;
- - any tax, assessment or other governmental charge imposed solely because of a
change in applicable law or regulation, or in any official interpretation or
application of applicable law or regulation, that becomes effective more than
15 days after the day on which the payment becomes due or is duly provided
for, whichever occurs later;
- - any estate, inheritance, gift, sales, excise, transfer, wealth or personal
property tax, or any similar tax, assessment or other governmental charge;
S-5
<PAGE> 6
- - any tax, assessment or other governmental charge imposed solely because the
beneficial owner or any other person fails to comply with any certification,
identification or other reporting requirement concerning the nationality,
residence, identity or connection with the United States of the holder or any
beneficial owner of the note, if compliance is required by statute, by
regulation of the U.S. Treasury department or by an applicable income tax
treaty to which the United States is a party, as a precondition to exemption
from the tax, assessment or other governmental charge;
- - any tax, assessment or other governmental charge that can be paid other than
by deduction or withholding from a payment on the notes;
- - any tax, assessment or other governmental charge imposed solely because the
payment is to be made by a particular paying agent (which term may include us)
and would not be imposed if made by another paying agent; or
- - any combination of the taxes, assessments or other governmental charges
described above.
In addition, we will not pay additional amounts with respect to any payment of
principal or interest to any United States alien who is a fiduciary or a
partnership, or who is not the sole beneficial owner of the payment, to the
extent that we would not have to pay additional amounts to any beneficiary or
settlor of the fiduciary or any member of the partnership, or to any beneficial
owner of the payment, if that person or entity were treated as the beneficial
owner of the note for this purpose.
When we refer to a U.S. taxing authority, we mean the United States of
America or any state, other jurisdiction or taxing authority in the United
States. When we refer to the United States in the discussion of additional
amounts above and in the discussion of redemption for tax reasons below, we mean
the United States of America, including the states and the District of Columbia,
together with the territories, possessions and all other areas subject to the
jurisdiction of the United States of America.
When we refer to any payment of interest or principal on a note, this
includes any additional amount that may be payable in respect of that payment.
WHEN WE CAN REDEEM THE NOTES
We will not be permitted to redeem the notes we are offering before their
stated maturity, except as described below. The notes will not be entitled to
the benefit of any sinking fund -- that is, we will not deposit money on a
regular basis into any separate custodial account to repay your note. In
addition, you will not be entitled to require us to buy your note from you
before its stated maturity.
We will be entitled, at our option, to redeem the outstanding notes in
whole and not in part if at any time we become obligated to pay additional
amounts on any notes on the next interest payment date, but only if our
obligation results from a change in the laws or regulations of the United
States, of any jurisdiction in the United States or of any U.S. taxing
authority, or from a change in any official interpretation or application of
those laws or regulations, that becomes effective or is announced after the date
of this prospectus supplement. If we redeem the notes, we will do so at a
redemption price equal to 100% of the principal amount of the notes redeemed,
plus accrued interest to the redemption date.
If we become entitled to redeem the notes, we may do so at any time on a
redemption date of our choice. However, we must give the Holders of the notes
notice of the redemption not less than 30 days or more than 60 days before the
redemption date and not more than 90 days before the next date on which we would
be obligated to pay additional amounts. In addition, our obligation to pay
additional amounts must remain in effect when we give the notice of redemption.
We will give the notice in the manner described under "Description of Notes We
May Offer -- Notices" in the attached prospectus.
We or our affiliates may purchase notes from investors who are willing to
sell from
S-6
<PAGE> 7
time to time, either in the open market at prevailing prices or in private
transactions at negotiated prices. For example, we currently expect Goldman,
Sachs & Co. to make a market in the notes by purchasing and reselling notes from
time to time. Notes that we or our subsidiaries purchase may, at our discretion,
be held, resold or cancelled.
VALIDITY OF THE NOTES
The validity of the notes will be passed upon for The Goldman Sachs Group,
Inc. by one of its General Counsel and for the underwriters by Sullivan &
Cromwell, New York, New York. Sullivan & Cromwell has in the past represented
and continues to represent Goldman Sachs on a regular basis and in a variety of
matters. Sullivan & Cromwell represented The Goldman Sachs Group, Inc. in
connection with its initial public offering and its underwritten debt offerings,
and has performed services for The Goldman Sachs Group, Inc. in connection with
this offering.
S-7
<PAGE> 8
SUPPLEMENTAL PLAN OF DISTRIBUTION
The Goldman Sachs Group, Inc. and the underwriters for this offering named
below have entered into a terms agreement with respect to the notes which
supplements the distribution agreement referred to in the attached prospectus
under the heading "Plan of Distribution". Subject to certain conditions, each
underwriter has severally agreed to purchase the principal amount of notes
indicated in the following table.
<TABLE>
<CAPTION>
Underwriters Principal Amount of Notes
------------ -------------------------
<S> <C>
Goldman, Sachs & Co...................................... $ 793,750,000
Banc of America Securities LLC........................... 18,750,000
Chase Securities Inc. ................................... 18,750,000
Deutsche Bank Securities Inc............................. 18,750,000
Donaldson, Lufkin & Jenrette Securities Corporation...... 18,750,000
McDonald Investments Inc., A KeyCorp Company............. 18,750,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated................................ 18,750,000
PaineWebber Incorporated................................. 18,750,000
Salomon Smith Barney Inc. ............................... 18,750,000
Muriel Siebert & Co., Inc. .............................. 18,750,000
Utendahl Capital Partners, L.P. ......................... 18,750,000
Wachovia Securities, Inc. ............................... 18,750,000
--------------
Total.......................................... $1,000,000,000
==============
</TABLE>
------------------------
Notes sold by the underwriters to the public will initially be offered at
the initial public offering price set forth on the cover of this prospectus
supplement. Any notes sold by the underwriters to securities dealers may be sold
at a discount from the initial public offering price of up to 0.300% of the
principal amount of the notes. Any such securities dealers may resell any notes
purchased from the underwriters to other brokers or dealers at a discount from
the initial public offering price of up to 0.250% of the principal amount of the
notes. If all the notes are not sold at the initial offering price, the
underwriters may change the offering price and the other selling terms.
The offer and sale by the underwriters of the notes is subject to the
underwriters having received and accepted the notes from The Goldman Sachs
Group, Inc. In addition, the underwriters may, in their sole discretion, reject
all or any part of any order for the notes which is received by them. The
underwriters expect to deliver the notes in New York, New York on the date
indicated on the front cover page of this prospectus supplement in exchange for
payment in immediately available funds.
The underwriters intend to offer the notes for sale primarily in the United
States. Goldman, Sachs & Co., acting through its affiliates as its selling
agents, may also offer the notes for sale outside the United States.
The notes are a new issue of securities with no established trading market.
While the notes are expected to be listed on the NYSE, this listing does not
assure that a trading market for the notes will develop. The Goldman Sachs
Group, Inc. has been advised by Goldman, Sachs & Co. that Goldman, Sachs & Co.
intends to make a market in the notes. Other affiliates of The Goldman Sachs
Group, Inc. may also do so. Neither Goldman, Sachs & Co. nor any other
affiliate, however, is obligated to do so and any of them may discontinue
market-making at any time with-
S-8
<PAGE> 9
out notice. No assurance can be given as to the liquidity or the trading market
for the notes.
Please note that the information about the original issue date, original
issue price and net proceeds to Goldman Sachs on the front cover page relates
only to the initial sale of the notes. If you have purchased a note in a
market-making transaction after the initial sale, information about the price
and date of sale to you will be provided in a separate confirmation of sale.
In connection with this offering, the underwriters may purchase and sell
notes in the open market. These transactions may include short sales,
stabilizing transactions and purchases to cover positions created by short
sales. Short sales involve the sale by the underwriters of a greater principal
amount of notes than they are required to purchase in this offering. Stabilizing
transactions consist of certain bids or purchases made for the purpose of
preventing or retarding a decline in the market price of the notes while this
offering is in progress.
The underwriters also may impose a penalty bid. This occurs when a
particular underwriter repays to the underwriters a portion of the underwriting
discount received by it because the underwriters have repurchased notes sold by
or for the account of that underwriter in stabilizing or short-covering
transactions.
These activities by the underwriters may stabilize, maintain or otherwise
affect the market price of the notes. As a result, the price of the notes may be
higher than the price that otherwise might exist in the open market. If these
activities are commenced, they may be discontinued by the underwriters at any
time. These transactions may occur in the over-the-counter market or otherwise.
Goldman, Sachs & Co. has also informed The Goldman Sachs Group, Inc. that
it does not expect sales made by the underwriters in this offering to accounts
over which the underwriters exercise discretionary authority to exceed five
percent of the aggregate initial offering price of the notes. No such sales will
be made without the prior written approval of the customer to which such account
relates.
The Goldman Sachs Group, Inc. estimates that its share of the total
expenses of this offering, excluding underwriting discounts and commissions,
whether paid to Goldman, Sachs & Co. or any other underwriter, will be
approximately $150,000.
The Goldman Sachs Group, Inc. has agreed to indemnify the several
underwriters against certain liabilities, including liabilities under the
Securities Act of 1933.
Goldman, Sachs & Co. is a subsidiary of The Goldman Sachs Group, Inc. Rule
2720 of the Conduct Rules of the National Association of Securities Dealers,
Inc. imposes certain requirements when an NASD member such as Goldman, Sachs &
Co. distributes an affiliated company's debt securities. Goldman, Sachs & Co.
has advised The Goldman Sachs Group, Inc. that this offering will comply with
the applicable requirements of Rule 2720.
Certain of the underwriters and their affiliates have in the past provided,
and may in the future from time to time provide, investment banking and general
financing and banking services to The Goldman Sachs Group, Inc. and its
affiliates, for which they have in the past received, and may in the future
receive, customary fees. The Goldman Sachs Group, Inc. and its affiliates have
in the past provided, and may in the future from time to time provide, similar
services to the underwriters and their affiliates on customary terms and for
customary fees.
This prospectus supplement will be used by the underwriters and other
dealers in connection with offers and sales of notes to persons located in the
United States. These offers and sales may involve notes initially sold by the
underwriters in this offering outside the United States.
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<PAGE> 10
- -------------------------------------------------------
- -------------------------------------------------------
No dealer, salesperson or other person is authorized to give any
information or to represent anything not contained in this prospectus. You must
not rely on any unauthorized information or representations. This prospectus is
an offer to sell or a solicitation of an offer to buy the securities it
describes, but only under circumstances and in jurisdictions where it is lawful
to do so. The information contained in this prospectus is current only as of its
date.
------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Prospectus Supplement
Recent Developments................... S-2
Specific Terms of the Notes........... S-3
Validity of the Notes................. S-7
Supplemental Plan of Distribution..... S-8
Prospectus
Our Business Principles............... 2
Prospectus Summary.................... 3
Risk Factors.......................... 11
Use of Proceeds....................... 28
Pro Forma Consolidated Financial
Information......................... 29
Capitalization........................ 36
Selected Consolidated Financial
Data................................ 38
Management's Discussion and Analysis
of Financial Condition and Results
of Operations....................... 40
Industry and Economic Outlook......... 65
Business.............................. 68
Management............................ 93
Principal Shareholders................ 106
Certain Relationships and Related
Transactions........................ 108
Description of Notes We May Offer..... 113
United States Taxation................ 143
Employee Retirement Income Security
Act................................. 154
Validity of the Notes................. 154
Experts............................... 154
Available Information................. 155
Index to Consolidated Financial
Statements.......................... F-1
Plan of Distribution.................. U-1
</TABLE>
- -------------------------------------------------------
- -------------------------------------------------------
- -------------------------------------------------------
- -------------------------------------------------------
$1,000,000,000
THE GOLDMAN SACHS
GROUP, INC.
7.35% Notes due 2009
------------------
[GOLDMAN SACHS LOGO]
------------------
GOLDMAN, SACHS & CO.
BANC OF AMERICA SECURITIES LLC
CHASE SECURITIES INC.
DEUTSCHE BANC ALEX. BROWN
DONALDSON, LUFKIN & JENRETTE
MCDONALD INVESTMENTS INC.
MERRILL LYNCH & CO.
PAINEWEBBER INCORPORATED
SALOMON SMITH BARNEY
MURIEL SIEBERT & CO., INC.
UTENDAHL CAPITAL PARTNERS, L.P.
WACHOVIA SECURITIES, INC.
-------------------------------------------------------
-------------------------------------------------------
