4'%14&8QNWOG0Q
9CUJKPIVQP#PPWCN/GGVKPI
1EVQDGTä
5GUUKQP%5
%CUG5VWF[HQT'UVCDNKUJKPICP1RVKOCN
+PXGUVOGPV5VTCVGI[
6TCEM
-G[YQTFU
+PXGUVOGPV
+PXGUVOGPVU
/QFGTCVQT
2CPGNKUVU
)4')14;,41'/'.6
6+/16*;$74610ì
/+%*#'.5#/17%'í
,.#44;9*+6'h
5WOOCT[6GEJPKSWGUHQTCPCN[\KPICPFFGXGNQRKPIKPXGUVOGPVUVTCVGIKGUDCUGFQP
VJGOCVJGOCVKECNCRRTQCEJQHNKPGCTRTQITCOOKPICTGRTGUGPVGF
/T)TGIQT[,4QGOGNV+OCPCEVWCT[CV<WTKEJ-GORGT.KHGKP.QPI)TQXG
+NNKPQKU9GJCXGVJTGGIGPVNGOGPHTQO#RRNKGF3WCPVKVCVKXG5QNWVKQPU
#35
6JG[CTGIQKPIVQDGFKUEWUUKPICOGVJQFQNQI[HQTFGXGNQRKPIKPXGUVOGPVUVTCVGIKGU
DCUGFQPNKPGCTQRVKOK\CVKQPOQFGNU6KO$WTVQPKUVJGEJKGHOCTMGVKPIQHHKEGTQH
#35*GJCUCNKHGKPUWTCPEGDCEMITQWPFCPFJCUYQTMGFCUCTGIKUVGTGF
KPXGUVOGPVCFXKUQTCPFUQNFUGEWTKVKGUHQTCDQWVUGXGP[GCTU6KOYKNNIQVJTQWIJ
CPKPVTQFWEVKQPCPFNQQMCVEWTTGPVRTCEVKEGUKPCUUGVNKCDKNKV[OCPCIGOGPV
#./
*GYKNNDGHQNNQYGFD[/KMG5COQWEG/KMGKUVJGOCPCIKPIFKTGEVQTCPFHQWPFGT
QH#35*GJCUYQTMGFKPVJGHKZGFKPEQOGKPFWUVT[YKVJCPKPUWTCPEG
URGEKCNK\CVKQPUKPEGCDQWV*GYKNNUGVWRQWTECUGUVWF[CPFIKXGWUC
RTGNKOKPCT[GXCNWCVKQP(KPCNN[.CTT[9JKVGKUVJGFKTGEVQTQHRTQFWEVFGXGNQROGPV
.CTT[JCUC$5KP/GEJCPKECN'PIKPGGTKPI*GYKNNVCMGWUVJTQWIJVJGECUG
%QR[TKIJV l 5QEKGV[ QH #EVWCTKGU
ì/T $WTVQP PQV C OGODGT QH VJG URQPUQTKPI QTICPK\CVKQPU KU %JKGH /CTMGVKPI 1HHKEGT QH #35 ..% KP
#WUVKP 6:
í/T 5COQWEG PQV C OGODGT QH VJG URQPUQTKPI QTICPK\CVKQPU KU /CPCIKPI &KTGEVQT QH #35 ..% KP #WUVKP
6:
h/T 9JKVG PQV C OGODGT QH VJG URQPUQTKPI QTICPK\CVKQPU KU 8KEG 2TGUKFGPV QH #35 ..% KP #WUVKP 6:
4'%14&8QNWOG
UVWF[CPFVJTQWIJVJGOQFGNHQTCNQQMCVVJGOGVJQFQNQI[HQTFGXGNQRKPIVJG
KPXGUVOGPVUVTCVGI[
/T6KOQVJ[$WTVQP+OIQKPIVQDTGCMVJKUWRKPVQVJTGGFKUVKPEVRCTVU+YKNNUVCTV
YKVJUQOGQHVJGGZKUVKPI#./VGEJPKSWGUVJCVCTGDGKPIWUGF+çNNFKUEWUUUQOGQH
VJGVGEJPKSWGUKPVJKURCTVKEWNCTECUGUVWF[CPFJQYYGJCXGFGXGNQRGFUQOGQH
VJQUGVGEJPKSWGUKPVQVJGVGEJPQNQI[VJCV[QWCTGIQKPIVQUGG6JGP/KMGYKNN
VJGPYCNMVJTQWIJCRTGNKOKPCT[GXCNWCVKQPVJCVYGFKFHQTVJKUURGEKHKEENKGPVKPVJG
ECUGUVWF[6JGP.CTT[QPEGCICKPYKNNUGVWRVJGECUGUVWF[HQTWU
.GVçUUVCTVYKVJVJG#./RTQEGUU+çFNKMGVQVGNN[QWJQYYGYGTGDTQWIJVKPQPVJKU
ECUG9GYGTGCVCP#/$GUVOGGVKPICEVKPICUCEQPUWNVCPV6JTGGQHWUYGTG
UGCVGFCVVJGVCDNGYKVJVJG#/$GUVITQWR6JGCEVWCT[YCNMGFKPCPFKPVTQFWEGF
JKOUGNHVQGXGT[DQF[6JGPJGNQQMGFFQYPCVVJGQVJGTGPFQHVJGVCDNGCPF
KPVTQFWEGFJKOUGNHVQVJGEJKGHKPXGUVOGPVQHHKEGT
%+1QHJKUEQORCP[YJQOJG
JCFPGXGTOGVDGHQTG9GVJQWIJVVJCVYCUPQVCIQQF#./UVTCVGI[CPF#/
$GUVFKFPQVHKPFVJCVJWOQTQWU6JGRQKPVJGTGKUVJCV#./EQOOWPKECVKQPU
DGVYGGPVJGCUUGVUKFGCPFVJGNKCDKNKV[UKFGQH[QWTDWUKPGUUGUFQPQVQEEWT
GPQWIJ5GEQPFECUJHNQYVGUVKPIKUCPKPVGITCNRCTVQHVJG#./RTQEGUU+VUVJG
FTKXKPIHQTEGHQTVQFC[UECUGUVWF[%CUJHNQYVGUVKPIKU[QWTQPEGC[GCT
IWCTCPVGGFEQOOWPKECVKQPDGVYGGPVJGCUUGVUKFGCPFVJGNKCDKNKV[UKFG9GYCPV
VQOCMGCRQKPVKPVJGECUGUVWF[VJCVECUJHNQYVGUVKPIKUPQV#./
.KCDKNKV[FGXGNQROGPV6JGNKCDKNKV[ECUJHNQYUVJCV[QWYKNNUGGCTGCPKPVGITCNRCTV
QHVQFC[UECUGUVWF[6JGTGçU265%JCNMGCPF6KNNKPIJCUVCUQVJGTRTQRTKGVCT[
U[UVGOUQWVVJGTG6JQUGCTGVJGNKCDKNKV[GPIKPGUVJCVYGTGCDNGVQYQTMYKVJTKIJV
PQY%QXGTKPINKCDKNKVKGUYKVJCUUGVUKUCPQVJGTRCTVQHVJGRTQEGUU1WTVJQWIJV
JGTGKUKH#./KUVJGOCPCIGOGPVCPFOGCUWTGOGPVQH[QWTEQORCP[UKPVGTGUVTCVG
TKUMCTG[QWVCMKPICRTQCEVKXGQTTGCEVKXGCRRTQCEJVQVJGRTQDNGO!9JCVU[UVGOU
FQ[QWJCXGKPRNCEGVQFGCNYKVJGHHGEVKXG#./!
0QY+çFNKMGVQEQXGTGZKUVKPIRTCEVKEGU6JGTGKUURGEWNCVKQPKPHQTGECUVKPIXGTUWU
TKUMOCPCIGOGPVKOOWPK\CVKQPECUJHNQYOCVEJKPIFWTCVKQPOCVEJKPIMG[TCVG
FWTCVKQPOCVEJKPIGHHKEKGPVHTQPVKGTCPCN[UKUCPFVQVCNTGVWTPQRVKOK\CVKQP
(KTUVVJGTGYCUURGEWNCVKQPKPHQTGECUVKPIXGTUWUTKUMOCPCIGOGPV9GTGFGHKPKPI
URGEWNCVKQPCUCP[UVTCVGI[VJCVKUFGRGPFCPVQPCRCTVKEWNCTQWVEQOG4KUM
OCPCIGOGPVKUCP[UVTCVGI[VJCVCUUWOGUCTCPIGQHQWVEQOGUCPFUGGMUVQ
EQPUVTCKPCPFQRVKOK\GTGICTFNGUUQHVJGURGEKHKEQWVEQOG+PXGUVOGPVUVTCVGIKGU
VJCVCTGRCTVQHCP#./RTQITCOUJQWNFPQVDGURGEWNCVKXG
%CUG5VWF[HQT'UVCDNKUJKPICP1RVKOCN+PXGUVOGPV5VTCVGI[
6JGTGKUGEQPQOKEHQTGECUVKPICPFURGEWNCVKQP5RGEWNCVKQPTGSWKTGUCEEWTCVG
HQTGECUVKPI#RCUUKXGUVTCVGI[QHDW[CPFJQNFOC[PQVDGTQDWUVGPQWIJ*GTGKU
VJG(KPCPEKCN#EEQWPVKPI5VCPFCTF
(#5TGIWNCVKQPé#PCUUGVECPPQVDG
FGUKIPCVGFCUJGNFVQOCVWTKV[WPNGUUVJGCUUGVXKGYGFKPVJGEQPVGZVQHVJGHKTOU
QXGTCNNCUUGVNKCDKNKV[OCVEJECPKPHCEVDGJGNFVQOCVWTKV[ê1WTVJQWIJVKUVJCVC
DW[CPFJQNFUVTCVGI[OKIJVPQVDGTQDWUVGPQWIJKPVQFC[UOCTMGVRNCEG#P
CEVKXGUVTCVGI[QHVQVCNTGVWTPOGCPUDCUKECNN[EJCUKPI[KGNFU;QWTGIKXKPI[QWT
KPXGUVOGPVFGEKUKQPOCMGTUVJGTKIJVVQOQXGHQTYCTFCPFUC[é(KPFOGVJGDGUV
[KGNF(KPFOGVJGDGUVVQVCNTGVWTPê/CP[QHVJQUGOCPCIGTUCTGGXCNWCVGFCICKPUV
CPCTDKVTCT[DGPEJOCTMåDGPEJOCTMUCTGVT[KPIVQDGCEJKGXGFUQOGVKOGUYKVJPQ
TGICTFVQVJGNKCDKNKV[UKFGQHVJGDWUKPGUU
.GVUOQXGQPVQKOOWPK\CVKQP9GTGFGHKPKPIVJKUCUVJGFWTCVKQPQHVJGCUUGVU
DGKPIGSWCNVQVJGFWTCVKQPQHVJGNKCDKNKVKGUYKVJVJGRTGUGPVXCNWGQHVJGCUUGVU
ITGCVGTVJCPVJGRTGUGPVXCNWGQHVJGNKCDKNKVKGU&KURGTUKQPQHVJGCUUGVUKUITGCVGT
VJCPVJGFKURGTUKQPQHVJGNKCDKNKVKGU&KURGTUKQPKUFGHKPGFCUVJGXCTKCPEGQHECUJ
HNQYUCTQWPFVJGFWTCVKQPFCVGQHCDQPF+OOWPK\CVKQPKUUVKNNFWTCVKQPOCVEJKPI
6JGEQPEGRVQHKOOWPK\CVKQPCPFFWTCVKQPOCVEJKPIYCUFGXGNQRGFDGHQTGYGJCF
VJGEQORWVGTRQYGTCXCKNCDNGVQVWODNGNCTIGCOQWPVUQHECUJHNQYU6JCVUTGCNN[
VJGDCUKUQHVQFC[UECUGUVWF[9GTGIQKPIVQDGNQQMKPICVVWODNKPINCTIG
COQWPVUQHECUJHNQYUCPFOCVEJKPIVJQUGECUJHNQYUKPCPGYUVTCVGI[VJCVXCTKGU
HTQOKOOWPK\CVKQPVQFWTCVKQPOCVEJKPI+OOWPK\CVKQPKUJKIJN[FGRGPFCPVQP
ECUJHNQYU+H[QWTGCNTGCF[FGCNKPIYKVJECUJHNQYUYJ[PQVETGCVGCUQNWVKQPVJCV
FGCNUGZENWUKXGN[YKVJVJGO!
.GVUIQVQECUJHNQYOCVEJKPI9GDGNKGXGECUJHNQYOCVEJKPIKUCPGHHGEVKXGRCTV
QHVJG#./RTQEGUU9JGPYGWUGVJGNKCDKNKV[ECUJHNQYUCUCEQPUVTCKPVYGOQXG
ENQUGTVQCPQRVKOCNRQTVHQNKQOKZ%CUJHNQYOCVEJKPICNUQKORNKGUVJCV[QWECP
ETGCVGCOKPKOWOEQUVUQNWVKQPVQHWPFCURGEKHKEUGVQHNKCDKNKVKGUCPFCECUJHNQY
OCVEJRQTVHQNKQECPDGCEVKXGN[OCPCIGFYJKEJKUCPCFXCPVCIG6JGTGKUC
UJQTVHCNNKPECUJHNQYOCVEJKPICPF.CTT[KUIQKPIVQVQWEJQPVJKUCNKVVNGOQTGKP
VJGECUGUVWF[9JGP[QWQRVKOK\GCRQTVHQNKQVQVJGECUJHNQYOCVEJ[QWFQPV
PGEGUUCTKN[KORTQXGOCTMGVUWTRNWUQT[QWTECRKVCNRQUKVKQP6JQUGCTGUQOGQHVJG
UVCVGFIQCNUVJCVYGTGIQKPIVQNQQMCVVQFC[KPVJGECUGUVWF[*QYFQYG
KORTQXGQWTUWTRNWUFGXGNQROGPV!*QYFQYGIGVVQCOKPKOWOEQUVECUJHNQY
OCVEJUQNWVKQP!
&WTCVKQPOCVEJKPIKUQPGQHVJGOQUVRQRWNCTHQTOUQH#./VQFC[QDXKQWUN[
DGECWUGQHKVUUKORNKEKV[+VKUCHQTOQHKOOWPK\CVKQP1PEGCICKP+IQDCEMVQVJG
HCEVVJCVKVUFGRGPFCPVQPECUJHNQYIGPGTCVKQP#TGCNKORQTVCPVRQKPVJGTGKUKVU
CRRNKECDNGVQQPN[QRVKQPHTGGDQPFUYJKEJCTGDQPFUVJCVFQPVJCXGECNNHGCVWTGU
KPVJGO/WEJQHVJGOQFGNKPIVJCVYGFQQHUGEWTKVKGUKPENWFGUECNNHGCVWTGUCPF
4'%14&8QNWOG
VJQUGCTGTGCNN[FKHHKEWNVVQFWTCVKQPOCVEJ6JGGUVKOCVGUCTGIQQFQPN[HQTUOCNN
[KGNFEJCPIGU6JCVURGCMUVQ6JQOCU*QCPFVJGMG[TCVGFWTCVKQPVJGQT[VJCVJG
JCURWVVQIGVJGT2QUUKDNGTGUKFWCNTKUMKUETGCVGFYKVJFWTCVKQPOCVEJKPI+YCPVVQ
FGHKPGTGUKFWCNTKUMJGTG+HCPCUUGVRC[UQVJGTVJCPCVVJGVKOGVJGHWPFUCTG
PGGFGFVQRC[CNKCDKNKV[VJGTGKUCTKUMVJCVVJGHWPFUOC[GKVJGTJCXGVQDG
TGKPXGUVGFCVCNQYGTTCVGQTUQNFCVCNQUU6JKUKUENGCTN[CUWDQRVKOCNCRRTQCEJVQ
#./
.GVUFKUEWUUNKPGCTRTQITCOOKPIXGTUWUUKOWNCVKQP+VJKPMGXGT[DQF[KUHCOKNKCT
YKVJVJG/CTMQYKV\VJGQT[QHVJGGHHKEKGPVHTQPVKGT/QUV#./OQFGNUCTGCHQTOQH
UKOWNCVKQP6JGTGECPDGGTTCVKECPFUWDQRVKOCNRCVJUNKMGVJCVHTQOCOGCPXCTKCPV
UCORNKPIVGEJPKSWG1WTEQPEGRVEQOGUHTQO'NVQPCPF)TQQXGTQWVQHVJG,QWTPCN
QH$CPMKPICPF(KPCPEG6JG[OCFGCUVCVGOGPVVJCVHQTURGEKHKENKCDKNKV[ECUJ
HNQYUVJGGHHKEKGPVHTQPVKGTTGFWEGUVQCUKPINGRQKPV+HYGTGTWPPKPICNNVJGUG
UKOWNCVKQPUCPFYGTGETGCVKPIVJGGHHKEKGPVHTQPVKGTYJCVKUVJGTGCNVKOGKPVQFC[U
OCTMGVRNCEG!%CPYGTGCEJVJGDGUVRQKPVQPVJGGHHKEKGPVHTQPVKGTCPFHKPFCP
QRVKOCNUQNWVKQPYKVJC\GTQTGUKFWCNTKUM!9GVJKPMVJCVVJQUGDGUVTGUWNVUECP
EQOGHTQONKPGCTRTQITCOOKPI.CTT[KUIQKPIVQDGFKUEWUUKPIVJCV
0GZVKUVQVCNTGVWTPUQRVKOK\CVKQP6QVCNTGVWTPUQRVKOK\CVKQPKUENQUGTVQCIQCNQH
CPQRVKOCNRQTVHQNKQ+VUKORQTVCPVVQPQVGVJCVVJKUOGVJQFKUJKIJN[FGRGPFCPVQP
VJGETGCVKQPQHCEEWTCVGOCTMGVXCNWGRTKEKPIOCVTKEGU5KPEGUWEJRTKEKPIKPXQNXGU
UKIPKHKECPVGXGPVTKUMVJGKORNKECVKQPUVJCVNKCDKNKVKGUYKNNCNYC[UDGHWPFGFDGEQOGU
CHWPEVKQPQHKPETGCUGFTGUKFWCNTKUM0QPGVJGNGUUVQVCNTGVWTPQRVKOK\CVKQPFQGU
FGCNYKVJVJGEQORNGZKVKGUQHRQTVHQNKQOCPCIGOGPVHQTCEQORNGZQTICPK\CVKQP+V
KORNKGUVJCVNKCDKNKVKGUECPCNYC[UDGHWPFGFWPFGTCP[QHVJGUEGPCTKQUVJCV[QWTWP
6JG*CPFDQQMQH(KZGF+PEQOG5GEWTKVKGUHQWTVJGFKVKQPJCUCYKUJNKUVHQT
RQTVHQNKQOCPCIGOGPVCPFVJKUKUYJCVVJGJCPFDQQMUC[Ué'ZRNKEKVN[URGEKH[
TKUMTGVWTPRTGHGTGPEGUCPFDWKNFVJGOKPVQVJGRQTVHQNKQ0GXGTVTCPUCEVWPNGUU
VJGTGKUCPQRRQTVWPKV[VQKORTQXGVJGTKUMTGVWTPRTQHKNGQHVJGRQTVHQNKQ=.GVUDG
VTCPUCEVKQPCFXGTUG?#NYC[UHWPFVJGNKCDKNKVKGUKPCP[URGEKHKGFGEQPQOKEUEGPCTKQ
/QUVKORQTVCPVN[CEJKGXGNQPITWPTGVWTPQDLGEVKXGUYKVJKPVJGEJQUGPTKUMCPF
VTCPUCEVKQPVQNGTCPEGUê
/KMGYCUKPUVTWOGPVCNKPVJKURTGNKOKPCT[GXCNWCVKQPQHVJGECUGUVWF[9GXGFQPG
VYQRCTVUHQTVJGENKGPVåCRTGNKOKPCT[GXCNWCVKQPCPFCHWNNVQVCNQRVKOK\CVKQP
/T/KEJCGN5COQWEG+YKNNUGVWRVJGECUGUVWF[HQTVJKURCTVKEWNCTENKGPV;QW
JCXGVQTGCNN[UVWF[VJGENKGPV.QQMCVVJGUKVWCVKQPVJGENKGPVKUKPPQY(TQOVJCV
EQOGWRYKVJVJGQRVKOK\CVKQP+OIQKPIVQKPVTQFWEGCNKPGQHDWUKPGUUIQQXGT
%CUG5VWF[HQT'UVCDNKUJKPICP1RVKOCN+PXGUVOGPV5VTCVGI[
VJGRTGNKOKPCT[GXCNWCVKQPCPFVJGP.CTT[KUIQKPIVQIQKPVQVJGHWNNUECNG
QRVKOK\CVKQPOQFGN
9GNNNQQMCVVJGRQTVHQNKQUVTWEVWTGCPFEQORQUKVKQPVJG[EWTTGPVN[JCXGHQTVJKU
NKPGQHDWUKPGUUCPFCVCP[TGNGXCPVHKPCPEKCNKPFKEGUUWEJCUFWTCVKQPEQPXGZKV[
CPFYJCVUKPVJGRQTVHQNKQ9GYKNNVJGPNQQMCVVJGNKCDKNKVKGUETGCVGFD[VJGKT
CEVWCTKCNUVCHHNKMGECUJHNQYOKUOCVEJUWTRNWUFGXGNQROGPVCPFXCTKQWUKPVGTGUV
TCVGUEGPCTKQU
.GVçUFKUEWUUCRCTVKEWNCTENKGPVVJCVEWTTGPVN[JCUQHVJGKTRQTVHQNKQKP
OCTMGVCDNGEQTRQTCVGUKPOCTMGVCDNGOQTVICIGUCPFKPRTKXCVG
RNCEGOGPVYJKEJYGEQPUKFGTXGT[KNNKSWKF6JGKTFWTCVKQPKU[GCTUYKVJC
PGICVKXGEQPXGZKV[QHä
%JCTVKUFKTGEVN[HTQOVJGENKGPV6JKUKUVJGKTNKCDKNKV[FGXGNQROGPVWPFGTVJG0GY
;QTM5GXGPKPVGTGUVTCVGUEGPCTKQ9GVQQMVJKUTKIJVHTQOVJGKTCEVWCTKCN
OGOQTCPFWO+VUQWTUVCTVKPIRQKPV
CHART 1
LIABILITY CASH FLOWS—NEW YORK SEVEN SCENARIOS
4'%14&8QNWOG
%JCTVUJQYUVJGECUJHNQYOKUOCVEJ;QWECPUGGYJCVUUKIPKHKECPVCDQWV
VJKUåD[VJGTGKUCOKNNKQPOKUOCVEJ
CHART 2
INITIAL CASH FLOW MISMATCH—NEW YORK SEVEN SCENARIOS
9GFGHKPGCECUJHNQYOKUOCVEJCUVJGQTKIKPCNRQTVHQNKQCPPWCNKPVGTGUVRNWUVJG
QTKIKPCNRQTVHQNKQOCVWTKPIRTKPEKRCNOKPWUCNNCPPWCNNKCDKNKVKGU6JGPYGCFFKPVJG
TGKPXGUVOGPVQHRTKPEKRCNCPFKPVGTGUV+PVJKUTGKPXGUVOGPVCUUWORVKQPVJCVVJKU
RCTVKEWNCTENKGPVWUGUYGFGHKPGGZEGUUECUJHNQYCUQTKIKPCNRQTVHQNKQKPVGTGUVRNWU
OCVWTKPIRTKPEKRCNOKPWUCP[NKCDKNKVKGU+PVJKUENKGPVUECUGVJGKTTGKPXGUVOGPV
CUUWORVKQPYCUCOKZVWTGQHEQTRQTCVGUCPFOQTVICIGUGEWTKVKGU
%JCTVKNNWUVTCVGUUWTRNWUFGXGNQROGPV6JKUKUDCUGFQPVJGKTCUUGVUOKPWUVJGKT
NKCDKNKVKGUCPFVJGUWTRNWUQXGTVJGPGZV[GCTUWPFGTVJG0GY;QTM5GXGP
UEGPCTKQ6JGTGCTGVYQKORQTVCPVRQKPVU+YCPVVQOCMGCDQWVVJKUEJCTV+H[QW
NQQMCVVJGUGWRUEGPCTKQU[QWçNNUGGVJCVVJKUENKGPVIQGUPGICVKXGKPUWTRNWUCPF
UVC[UPGICVKXGKPQHVJGUEGPCTKQUQWVä[GCTUUQVJG[HCKNVJGVGUV0QVOCP[
HKTOUYQWNFRCUUVJKUVGUVYKVJVJQUGWRUEGPCTKQU#PQVJGTUKIPKHKECPVRQKPVKU
[GCTUHTQOPQYVJGKTUWTRNWUFGXGNQROGPVJCUCNQYQHCDQWVOKNNKQPVQC
JKIJQHOKNNKQP6JGTGKUCDKIURTGCFFGRGPFKPIQPYJCVUIQKPIVQJCRRGP
YKVJVJGKPVGTGUVTCVGUEGPCTKQU6JCVUJQYVJG[NQQMPQY
%CUG5VWF[HQT'UVCDNKUJKPICP1RVKOCN+PXGUVOGPV5VTCVGI[
CHART 3
INITIAL SURPLUS DEVELOPMENT—NEW YORK SCENARIOS
9GNQQMGFCVVJGUWTRNWUFGXGNQROGPVWRVQVJKURQKPV6JGPYGUVCTVGFC6TGCUWT[
EWTXGYJKEJYGFQYKVJCNNVJGENKGPVU6JGTGCUQPYGWUGVJG6TGCUWT[EWTXGKUKH
YGECPUQNXGQTOCMGQRVKOK\CVKQPQHVJGKTUWTRNWUQTYJCVGXGTIQCNYGEJQQUGHQT
VJGODGVVGTWUKPIC6TGCUWT[VJGPYGMPQYHWTVJGTQRVKOK\CVKQPKUYCTTCPVGF9G
CNUQNQQMGFCVUQOGEQPUVTCKPVUCPFTGKPXGUVOGPVCUUWORVKQPU6JGPYGTCPC
UGTKGUOKPKOWOEQUVUQNWVKQPU+NNVCNMCDQWVVJGTGUWNVUCPFKPVGTRTGVCVKQPU
9JCVCDQWVVJG0GY;QTM5GXGPKPVGTGUVTCVGUEGPCTKQU!+YQWNFDGVVJCVSWKVGC
HGYQH[QWCTGHCOKNKCTYKVJVJGO9GWUGVJG0GY;QTM5GXGPDWVYGCTGPQV
NKOKVGFVQWUKPIVJGO9GECPWUGCP[UEGPCTKQYGYCPVYKVJCUOCP[RCVJUCU[QW
CEVWCTKGUECPFTGCOWR%JCTVUJQYUCITCRJKECNFGRKEVKQPQHVJG0GY;QTM
5GXGP9GWUGKVDGECWUGKVUOQTGQTNGUUWPKXGTUCN
9JCVCTGVJGEQPUVTCKPVUQHVJKUENKGPVECUJHNQYOKUOCVEJ!9GFKFPVYCPVKVVQDG
PGICVKXGKVUJQWNFDGITGCVGTVJCPQTGSWCNVQ\GTQ6JGOCZKOWOKPXGUVOGPVYCU
XCTKCDNGVQVJKURCTVKEWNCTCEEQWPV9GMGRVECUJCVNGUUVJCPYJKEJKUVJG
OKPKOWOEQUVVQHWPFVJGNKCDKNKVKGU6JGTGYCUVJKUVGTOKPCNNKCDKNKV[KP[GCTHQT
VJKURQKPV
.GVçUIQDCEMVQVJGTGKPXGUVOGPVCUUWORVKQP4CVJGTVJCPWUKPIVJGKTEQTRQTCVGU
CPFOQTVICIGUYGYGPVGZVTGOGN[EQPUGTXCVKXGCPFWUGFCTGKPXGUVOGPV
CUUWORVKQPQHKPC[GCT6TGCUWT[CPFKPVJG[GCT6TGCUWT[
4'%14&8QNWOG
CHART 4
INTEREST RATE SCENARIOS: NEW YORK SEVEN
%JCTVKUCPGZVTGOGN[KPVGTGUVKPIITCRJ6JKUENKGPVYCPVGFVQMPQYYJCVVJG
OKPKOWOEQUVUQNWVKQPYCUVQOCVEJVJGKTNKCDKNKV[+PFQKPIUQ[QWIQCNNVJGYC[
QXGTVQVJGTKIJV9GTCPVJKUOQFGNVQVCNN[WPEQPUVTCKPGFOGCPKPIVJGUQNXGT
RKEMGFCP[COQWPVCPFCP[IKXGPOCVWTKV[VQCEJKGXGVJKUOKPKOWOEQUVUQNWVKQP
6JGUQNXGTNQXGURWVVKPICNNVJGOQPG[UQOGDKNNKQPKPQPGUGEWTKV[6JCVU
ITGCVDWVVJCVUPQVRTWFGPV6JGTGCTGPQVVQQOCP[CEEQWPVUQWVVJGTGYKVJQPG
UGEWTKV[VJCVECPEQXGTVJGNKCDKNKV[;QWEQPUVTCKPVJGOQFGNCPFKH[QWOQXGVQ
VJGNGHV[QWNNPQVKEGVJCVVJGOKPKOWOEQUVUQNWVKQPIQGUWRDWVFQYGJCXGC
EQPXGTIGPEGDGVYGGPCPFOKNNKQPYJGTGYGFKXGTUKHKGFVJGRQTVHQNKQ
CPFUVKNNCVVCKPGFCOKPKOWOEQUVUQNWVKQPYKVJQWVRWVVKPIKVCNNKPVQQPGUGEWTKV[!
6JGEQUVUQNWVKQPKUOKPKOWOCVVJGNGCUVEQPUVTCKPGFKPXGUVOGPVCPFVJGEQUV
UQNWVKQPKUOCZKOWOCVVJGOQUVEQPUVTCKPGFKPXGUVOGPV6JGITGCVGUVTCVGQH
EJCPIGHQTVJKUENKGPVYCUDGVYGGPOKNNKQPCPFOKNNKQP6JKUCUUWOGU
QPGVJKPIYJKEJKUVJCVNKCDKNKVKGUCTGCEEWTCVG5KPEGYGCTGPQV
CEEWTCVGYJGPRTGFKEVKPINKCDKNKVKGUVJKUVGNNUWUVJCVYGFQJCXGVQFKXGTUKH[CPFYG
JCXGVQEQPUVTCKPKVKPVJGCOQWPVHQTGCEJQPG+UGVVJGECUGUVWF[WRHQTVJKU
RCTVKEWNCTENKGPVWRVQVJKURQKPV9GXGTWPCOKPKOWOEQUVUQNWVKQP9GXGUGGP
JQYVJGKTUWTRNWUNQQMUCPFPQYYGECPQRVKOK\G
/T,.CTT[9JKVG/QUVQHVJGRQTVHQNKQUVJCVYGJCXGNQQMGFCVJCXGDGGP
KPVGTGUVTCVGUGPUKVKXGNKCDKNKV[V[RGRQTVHQNKQU*QYGXGTYGJCXGPQVKEGFUKOKNCTN[
TQDWUVTGUWNVUYKVJCP[V[RGQHNKCDKNKVKGU6JCVKUDGECWUGVJGTGKUCITGCVFGCNQH
KPVGTGUVTCVGTKUMKPVJGCUUGVUKFGQHVJGRQTVHQNKQCNTGCF[$GECWUG9CNN5VTGGVUGGOU
%CUG5VWF[HQT'UVCDNKUJKPICP1RVKOCN+PXGUVOGPV5VTCVGI[
VQJCXGCMPCEMHQTETGCVKPIJQVDWVVQPUHQTRQTVHQNKQOCPCIGTUCPFVJGJQVDWVVQP
JCUDGGP[KGNFCPFFWTCVKQPVJKUIKXGUTKUGVQVJGUGEWTKVKGU/[HCXQTKVGKUC(CPPKG
/CGVJCVYCUKUUWGFCDQWVOQPVJUCIQVJCVYCUCPEQWRQP[GCTOCVWTKV[
CPFECNNCDNGKPOQPVJU6JG[KGNFKUUWDUVCPVKCN6JGRTKEGKUITGCVCPFKVURCT
6JGTGKUPQDQQMXCNWGRTQDNGO;QWECPCEEQWPVHQTKV9JCVFQGUVJCVFQHQTVJG
#./RTQDNGO!9JCVFQGUVJCVFQYKVJVJGECUJHNQYOKUOCVEJ!+H[QWCUUWOGC
TGHWPFKPIRTGOKWOQHCDQWVDCUKURQKPVUVJCVDQPFKUKOOKPGPVN[ECNNCDNG/[
YJQNGRQKPVKUVJCVVJKUYCUCPCPPWKV[NKPGQHDWUKPGUUVJCVYGDGICPYKVJ;QW
ECPVGNNVJCVUQOGYJCVHTQOVJGNKCDKNKVKGU$WVDGECWUGQHVJGGODGFFGFECNNTKUM
CPFVJGTGUKFWCNTKUMVJCVUKPJGTGPVQPVJGCUUGVUKFGQHVJGRQTVHQNKQYGHKPFVJCV
UWEJCPQRVKOK\CVKQPYQTMUHQTGXGPKPVGTGUVTCVGKPUGPUKVKXGNKCDKNKVKGUUKORN[
DGECWUGVJGTGKUUQOWEJTGUKFWCNTKUMDWKNVKPVQVJGCUUGVUKFGQHVJGRQTVHQNKQ
CHART 5
MINIMUM COST SOLUTION
(TQOVJG(NQQT9JGP[QWUJQYGFVJGTKUMCPFTGVWTPITCRJKUKVCUUGVTGVWTPQTKU
KVCUWTRNWUCUUGVTGVWTP!+LWUVPGGFUQOGENCTKHKECVKQP
/T9JKVG6JGSWGUVKQPTGICTFUVJGGHHKEKGPVHTQPVKGTRQTVHQNKQCPFYJGVJGTVJG
GHHKEKGPVHTQPVKGTKUCUUGVQPN[QTUWTRNWU
(TQOVJG(NQQT+UVJCVVJGTGVWTPQPVJGCUUGVQTKUVJCVVJGTGVWTPQPVJGUWTRNWU!
4'%14&8QNWOG
/T9JKVG)QQFSWGUVKQP6JG[CZKUUJQYUVJGOCKPTGVWTPQTVJGCXGTCIGQH
TGVWTPCPFVJGZCZKUUJQYUVJGUVCPFCTFFGXKCVKQP+PQVJGTYQTFUYGCTGRNQVVKPI
TKUMXGTUWUTGVWTPYJKEJKUQPVJGCUUGVUKFGQHVJGRQTVHQNKQ6JCVUEQPUKUVGPVYKVJ
/CTMQYKV\çUVJGQT[5QOGVJKPIYGTWPKPVQHTGSWGPVN[KURGQRNGUC[KPIé9GTG
RGTHQTOKPI#./QPVJGDCUKUQHVJGGHHKEKGPVHTQPVKGTVJGQT[6JGTGUPQVJKPIYTQPI
YKVJVJCV6JCVUC[UVJCVYGFQPVYCPVVQDW[LWPMDQPFUDWVYGNNDW[LWUV
UNKIJVN[DGVVGTETGFKVSWCNKV[CPFYGNNCEJKGXGC[KGNFUQVJCVYGECPUNGGRCVPKIJVê
6JGRTQDNGOKUVJCVGXGPKH[QWFQCPGHHKEKGPVHTQPVKGTRNQVHQTCP[PWODGTQH
UKOWNCVKQPUCPFCEJKGXGVJKUJQTK\QPYJGTGVJKUGHHKEKGPVHTQPVKGTGZKUVUVJGGHHKEKGPV
HTQPVKGTTGFWEGUVQCUKPINGRQKPVKH[QWJCXGURGEKHKENKCDKNKVKGU6JCVGHHKEKGPV
HTQPVKGTKUCNKPG#NKPGKUOCFGWRQHCPKPHKPKVGPWODGTQHRQKPVUCPFDGECWUG
GCEJQPGQHVJQUGRQKPVUKUWPKSWGVJGSWGUVKQP[QWEQOGVQåCHVGT[QWXGFQPG
CDQWVUKOWNCVKQPUåKUFKFYGCEJKGXGCPQRVKOCNUQNWVKQPQTKUQWTEQORWVGT
LWUVVKTGFCPFQWTRGQRNGGCIGTVQIQJQOG!5GEQPFCTGYGTGCNN[OCVEJKPI
NKCDKNKVKGUYJKEJOC[QTOC[PQVDGKPVGTGUVTCVGUGPUKVKXG!9JKNGYGUGGVJG
GHHKEKGPVHTQPVKGTCUUQOGVJKPIVJCVPGGFUVQDGCFFTGUUGFQPCSWCPVKVCVKXGDCUKU
KGOCVEJKPICUUGVNKCDKNKV[ECUJHNQYUYGVJKPMVJCVKVUVKNNJCUKVUUJQTVEQOKPIU
9JCVçUOQUVKORQTVCPVKUVJCVYJGPYGFGCNYKVJUKOWNCVKQPYGUVKNNJCXGPQV
CEJKGXGFCUVTCKIJVHQTYCTFOGVJQFQNQI[HQTCEJKGXKPICPQRVKOWO9GXGUKORN[
FGVGTOKPGFVJCVYGJCXGCUQNWVKQPVJCVKUDGVVGTVJCPVJGQVJGTU
(TQOVJG(NQQT+PQVKEGF[QWTTGKPXGUVOGPVCUUWORVKQPUCTGKPHKXGUCPFVGPUCPF
[QWTFWTCVKQPKU+YCUYQPFGTKPIJQYVJCVHKVUKPVQOCKPVCKPKPICFWTCVKQP
PGWVTCNUVTCVGI[#NUQHKXGUCPFVGPUCTGIQKPIVQIKXG[QWQPVJGOCTIKPCITGCVGT
FWTCVKQPVJCPGURGEKCNN[KP6TGCUWTKGU6JQUGECUJHNQYUVJCV[QWCTG
TGKPXGUVKPIåOQTVICIGDCEMRTGRC[OGPVUQTOCVWTKVKGUåCTGIQKPIVQDGFKHHGTGPV
HTQOKPXGUVOGPVKPEQOGCUHCTCUVJGGHHGEVVJCVVJG[JCXGQPVJGYTKVGFQYPCPF
FWTCVKQPQH[QWTEWTTGPVRQTVHQNKQ+çOLWUVYQPFGTKPIYJGTGVJQUGECUJHNQYUCTG
EQOKPIHTQO+H[QWJCXGCF[PCOKEUVTCVGI[HQTKPXGUVKPIKPHKXGUCPFVGPUYJCV
RTQRQTVKQPFQ[QWWUGCPFKUVJCVIQKPIVQETGCVGCITGCVGTFWTCVKQPHQT[QWT
GZKUVKPIRQTVHQNKQ!6JCVUPWODGTQPG
+COCRQTVHQNKQOCPCIGTCV0QTVJYGUVGTP/WVWCN.KHG
0/.#NNVJKUOQFGNKPIKU
ITGCVCPFYGCUUWOGVJCVYGECPIQQWVCPFDW[EQQMKGEWVVGTEQTRQTCVGUCPF
UVTQPIVTKRNG$UCPFVJGPIGVVJGURTGCFQHHCPKPFGZNKMG$NQQODGTI9JGP[QWIQ
QWVCPFVT[VQHKPFVJQUGVJKPIUVJGDCPMUIQDDNGVJGOWR;QWTGVJGPUVWEM
KPXGUVKPIKPYJCV[QWYQWNFECNNCUWDQRVKOCNOQTVICIGDCEMGFQTUQOGVJKPIYKVJ
PGICVKXGEQPXGZKV[DGECWUGVJCVUTGCNN[VJGQPN[VJKPIVJCVUIQKPIVQIKXG[QWVJG
FWTCVKQP%QWNF[QWCFFTGUUYJ[CXCKNCDKNKV[KPVJGOCTMGVHQTVJGUGCUUGVUKUC
EQPUVTCKPV!
%CUG5VWF[HQT'UVCDNKUJKPICP1RVKOCN+PXGUVOGPV5VTCVGI[
/T9JKVG6JGHKTUVKFGCVJCV+YQWNFNKMGVQFKUEWUUKUVJGEQPEGRVQHFWTCVKQP
#HVGTYGRGTHQTOGFQWTCPCN[UKUCPFQWTQRVKOK\CVKQPYGUKORN[DCEMGFKPVQVJG
FWTCVKQPPWODGTULWUVVQIKXGGXGT[QPGCHGGNHQTJQYKVUVCEMGFWR9GFQPV
TGCNN[ECTGCDQWVFWTCVKQPEQPXGZKV[QTMG[TCVGFWTCVKQP#NNVJGUGVJKPIUCTGITGCV
VJWODPCKNUMGVEJGUQHVJGF[PCOKEUGODGFFGFKPCNKPGQHDWUKPGUU6JGRTQDNGO
KUVJCVKVJCUDGGPKPWUGHQT[GCTU9GYGTGWUKPIFWTCVKQPOCVEJKPICPF
KOOWPK\CVKQPDCEMYJGPCNNYGJCFYGTGUNKFGTWNGUCPFCDCEWUGUVQFQQWTYQTM
0QYYGCTGVCMKPIKPETGFKDN[F[PCOKERQTVHQNKQUCPFYGTGVT[KPIVQDQKNVJGO
FQYPVQQPGPWODGTVJCVTGRTGUGPVUVJGUWOVQVCNQHCNNQWTMPQYNGFIGQHVJG
RQTVHQNKQ6JGFWTCVKQPVJCVYGECNEWNCVGKUVJGFWTCVKQPQHVJGKPKVKCNRQTVHQNKQPQV
VJGTGKPXGUVOGPVUGEWTKVKGUKPVCPFGO9GVQQMVJGFWTCVKQPQHVJGENKGPVURQTVHQNKQ
CUKVGZKUVUVQFC[YJKEJKU[GCTUCPFYGFKFPQVVCMGVJGTGKPXGUVOGPVUGEWTKVKGU
KPVQCEEQWPVYJGPYGECNEWNCVGFVJCVFWTCVKQP.CVGT+YKNNFKUEWUUJQYVJG
FWTCVKQPYCUGZVGPFGFHTQOCDQWVUKZOQPVJUVQC[GCT
6JGUGEQPFSWGUVKQPYCUJQYFQ[QWCEVWCNN[FQVJKUQRVKOK\CVKQPCPFEQOGWR
YKVJVJGUGUGEWTKVKGUVJCV[QWYCPVVQDW[!*QYFQ[QWFQVJKUKPCHCUJKQPVJCV
CNNQYU[QWVQKORNGOGPV!
(TQOVJG(NQQT4KIJV6JGTGCTGCNNVJGUGCUUWORVKQPU[QWOCMGCDQWVYJCV[QW
ECPTGKPXGUVKP0QY[QWTGVCNMKPICDQWV6TGCUWTKGUYJKEJVQOGYQWNFDGC
UWDQRVKOCNKPXGUVOGPVIKXGPVJCVYGTGETGFKVKPIUQOGVJKPID[DCUKURQKPVUQXGT
VJG6TGCUWT[+YKNNUC[VJCVFWTCVKQPOCVEJKPIKUPVVJGDGCNNCPFGPFCNNUVTCVGI[
+FUC[KVUPGEGUUCT[DWVPQVUWHHKEKGPV9GFQNQQMXGT[ENQUGN[CVQWTECUJHNQY
GURGEKCNN[HQTRC[QWVCPPWKVKGU6QVJGGZVGPVVJCVYGECPOQFGNYJCVUIQKPIVQ
JCRRGPYGNQQMCVUKPINGRTGOKWOFGHGTTGFCPPWKVKGU
52&#UVJGRTQLGEVGFECUJ
HNQYUCPFVJGEQPVTKDWVKQPUVQVJGDQVVQONKPG$WVCUHCTCUYJCVYGECPCEVWCNN[
KPXGUVKPYGJCXGCPGICVKXGEQPXGZRQTVHQNKQCPFCPGZVTGOGN[RQUKVKXGEQPXGZ
NKCDKNKV[6QVJGGZVGPVVJCV[QWTGRCKFGPQWIJRTGOKWOHQTVJGRTGRC[OGPVTKUM
[QWOKIJVHGGNVJCVKVKUGPQWIJVQVCMGVJCVGZVTCTKUM6JCVKUYJCVEQOGUQWVKP
[QWTCPCN[UKUQTKVUJQWNF0GICVKXGEQPXGZKV[KUHKPGKH[QWTGRC[KPIGPQWIJHQTKV
6JCVUJCTFVQSWCPVKH[YKVJQWVVJGUWHHKEKGPVHTQPVKGTOGVJQFQNQI[#NNVJGOQFGNU
VJCVCTGWUGFQPVJGUVTGGVCTGTGXCORGFGXGT[VJTGGQTHQWT[GCTUDGECWUGVJG[
FQPVTGHNGEVTGCNKV[GURGEKCNN[YJGPVJKPIUQVJGTVJCPKPVGTGUVTCVGUCHHGEV
RTGRC[OGPVU+OVCNMKPICDQWVVJGOQTVICIGUKFG6JGTGUCNQVQHRTCEVKECN
HTWUVTCVKQP
/T9JKVG+VTCFGFHKZGFKPEQOGUHQT[GCTU;QWCTGCDUQNWVGN[EQTTGEV
2TQDCDN[VJGDKIIGUVRTQDNGO+UCYKPVJGRTGRC[OGPVOQFGNKPIYCUKPYJGP
YGJCFPGYKUUWGUGEWTKVKGUVJCVYGTGVTCFKPICVRQNKE[JQNFGTUWTRNWU
CEEQWPVU
25#DWVVJGTGCNEQORCP[RGTUKUVGPE[TCVGT
%24YCUQPN[CDQWV
UQVJGTGCNOQPG[EQOKPIKPVQRTGRC[VJGUGEWTKVKGUYCUXGT[NQY$GECWUGQHVJG
4'%14&8QNWOG
TCORWRYCTFQPVJG25#%24EQPXGTUKQPEWTXG[QWTCPKPVQJCNH[GCTUGEWTKVKGU+H
TCVGUJCFGXGPUVC[GFVJGUCOGVJGVTWG%24YQWNFJCXGUNQYGFFQYPDGECWUGKVU
CNNKPVJGTCOR;QWOCMGCIQQFRQKPV*QYFQ[QWQRVKOK\GKHVJGOQFGNKPI
VGEJPKSWGUåVJGECUJHNQYOQFGNKPIVGEJPKSWGUKPRCTVKEWNCTåCTGUQJKIJN[UWURGEV!
+VJKPMYJCV[QWTGIQKPIVQDGUWTRTKUGFVQHKPFQWVKUVJCVYJGPYGIGVKPVQHWNN
UECNGQRVKOK\CVKQPQWTUQNXGTJCVGUOQTVICIGUGEWTKVKGUCPFGODGFFGFECNNUKPCP[
YC[UJCRGQTHQTO9JCV+VJKPMVJCVJCUETGCVGFKUUQOGVJKPIVJCV+JCXGTGCNK\GF
HQTCDQWVVJGNCUVJCNHFQ\GP[GCTU2QTVHQNKQOCPCIGTUCTGEJCUKPI[KGNFCPF
FWTCVKQPDGECWUGVJQUGCTGVJGDGPEJOCTMUVJCVYGCNNWPFGTUVCPFCPFYGECP
GZRNCKPVJGO9CNN5VTGGVECPETGCVGUGEWTKVKGUVJCVCEJKGXGVJKU[KGNFCPFVJKU
FWTCVKQPDGPEJOCTM#VVJGUCOGVKOGVJG[JCXGUQOCP[GODGFFGFECNNUKPVJGO
VJCVVJG[KPVGTOUQHUVTWEVWTGCTGJKIJN[FGHKEKGPV9GJCXGNKCDKNKVKGUDWVGXGP
VJQWIJYGOC[PQVJCXGEQPHKFGPEGKPVJGUGNKCDKNKVKGUVJG[CTGHCKTN[YGNN
UVTWEVWTGFCPFYGCTGEQPHKFGPVKPJQYVJG[RGTHQTOKPCP[IKXGPUEGPCTKQ9CNN
5VTGGVTGXCORGFUQOGQHKVURTGRC[OGPVOQFGNU9GECPTWPVJGQRVKOK\CVKQP
RKGEGQHQWTCEVWCNCPCN[UKUKPUGEQPFU6JCVUOQTGCHWPEVKQPQHQPGQH[QWT
RTQITCOOKPIVGEJPKSWGUVJCPKVKUCP[VJKPIGNUG9GECPIGPGTCVGVJGECUJHNQY
RCVJFGRGPFCPV5GXGPUEGPCTKQU
CDQWVUGEWTKVKGUKPCDQWVJQWTU+HYGUGG
CPGYFGCNEQOGQWVCPFYGJCXGVQOQFGNKVCPFTWPVJTQWIJCNNVJGUGJQQRU
DGHQTGYGFGEKFGYGECPDW[KVYGOC[OKUUKV#UCHKZGFKPEQOGVTCFGTVJCVKU
YJCV+CNYC[UKORTGUUWRQPCRQTVHQNKQOCPCIGT+H[QWFQPVCEVTKIJVPQYKVU
IQKPIVQDGIQPGDWVKVYKNNDGDCEM+HVJG[DNGYKVQWVKPVJTGGJQWTUVJG[NNRTKEG
CPQVJGTQPGCPFKVYKNNDGRTKEGFLWUVNKMGKV
+PVGTOUQHVJGTGKPXGUVOGPVCUUWORVKQPVJCV[QWCUMGFCDQWVYGJCFFWODGFVJCV
FQYPUQOGYJCVDGECWUGYGYCPVGFVQUGGVJGVTWGRGTHQTOCPEGQHVJGRQTVHQNKQ
QRVKOK\CVKQP9GFKFPVYCPVVQVCMGCP[ETGFKVHQTCTGKPXGUVOGPVCUUWORVKQPVJCV
YGOKIJVPQVDGCDNGVQKORNGOGPV6JKURCTVKEWNCTENKGPVJCFCTCVJGTUQRJKUVKECVGF
TGKPXGUVOGPVTQWVKPGVJCVYCUPVCP[YJGTGPGCTYJCVVJG[YGTGCEVWCNN[FQKPI+H
YGTGRGTHQTOKPICECUJHNQYVGUVHQTVJGUCMGQHRGTHQTOKPICECUJHNQYVGUVVJCVU
QPGVJKPI*QYGXGTYGOKIJVYCPVVQVWTPKVKPVQCVQQNVJCVYGECPCEVWCNN[VCMG
VQVJGRQTVHQNKQOCPCIGTCPFUC[é*GTGKUCTQCFOCR+H[QWHQNNQYVJKUUVGRD[
UVGRDQVJKPUVTWEVWTGCPFKPURTGCF[QWYKNNCEJKGXGVJGUGTGUWNVUê6JGPKVKU
CEVWCNN[UQOGVJKPIVJCVYGECPWUG9GCUUWOGFVJCVVJGTGKPXGUVOGPVTQWVKPGKP
VJGHQTOQHVTGCUWTKGUYCUGCUKN[KORNGOGPVCDNGCPFEQPUGTXCVKXGKPVGTOUQH[KGNF
9JGP[QWUGGVJGTGUWNVUVJCVKVIGPGTCVGFQPKVUQYPCPFVJGHCEVVJCVYGYGTG
CDNGVQKORTQXGKVYKVJVJGENKGPVUTGKPXGUVOGPVCUUWORVKQPD[CDQWVCPQVJGT
+VJKPM[QWNNUGGYJCVYGTGVCNMKPICDQWVQPVJGTGKPXGUVOGPVCUUWORVKQP
(TQOVJG(NQQT/[SWGUVKQPKUCDQWVVJGQT[+DGNKGXG6KOTGHGTTGFVQGKVJGTC
VJGQT[QTCPCWVJQTYJGPJGVCNMGFCDQWVTGUKFWCNTKUMQRVKOCNUQNWVKQP
%CUG5VWF[HQT'UVCDNKUJKPICP1RVKOCN+PXGUVOGPV5VTCVGI[
/T$WTVQP6JCVçU/CTMQYKV\
/T46JQOCU*GTIGV;QWICXGCYKUJNKUVHQTRQTVHQNKQOCPCIGOGPV%QWNF[QW
GNCDQTCVGQPPWODGTVJTGGåCNYC[UHWPFNKCDKNKVKGUKPCP[URGEKHKGFGEQPQOKE
UEGPCTKQ!
/T9JKVG6JKUYCUVCMGPXGTDCVKOHTQOVJG*CPFDQQMQH(KZGF+PEQOG
5GEWTKVKGU9JCVVJG[YGTGCNNWFKPIVQYCUVJCVVJGFWTCVKQPOCVEJKUPQV
PGEGUUCTKN[CECUJHNQYOCVEJ+OOWPK\CVKQPYJKEJKORNKGUFKURGTUKQPQHCUUGV
ECUJHNQYUCTQWPFUQOGFWTCVKQPEQOGUENQUGTVQCECUJHNQYOCVEJ9JCVYG
JCXGGODGFFGFKPQWTVJKPMKPICPFKPQWTUQNXGTVGEJPQNQI[KUVJCVVJGTGCTGVYQ
KUUWGUCVJCPF+PVQVCNTGVWTPQRVKOK\CVKQPYGWPFGTUEQTGVJGHCEVVJCVKVKORNKGU
VJCVNKCDKNKVKGUCTGCNYC[UHWPFGF6JGTGCUQPHQTVJGKORNKECVKQPKUVJCVVQVCNTGVWTP
QRVKOK\CVKQPJCUCITGCVFGCNVQFQYKVJHQTYCTFRTKEKPIOCVTKEGU1WT
EQNNCVGTCNK\GFOQTVICIGQDNKICVKQP
%/1RCEMGFDQPFUVJCVCTGRTKEGFDCUKU
RQKPVUQXGTVQFC[çUEQTTGURQPFKPI6TGCUWT[YKNNDGRTKEGFCVVJCVURTGCFVQOQTTQY
+H[QWEJQQUGQRVKQPCFLWUVGFURTGCF
1#5CTGVJG[IQKPIVQDGRTKEGFQPVJCV
1#5!6JCVKUPQVTQDWUVKPVJGXQNCVKNGOCTMGVUVJCVYGVTCFGKP%CUGKPRQKPVKP
TKIJVCHVGT1TCPIG%QWPV[KORNQFGFVJGTGYCUCITGCVTWUJVQNKSWKFCVG
CP[VJKPIVJCVNQQMGFQTUOGNNGFNKMGCFGTKXCVKXGUGEWTKV[/CP[%/1UYGTG
ENCUUKHKGFCUFGTKXCVKXGUGEWTKVKGUD[CPWODGTQHVJGUGENKGPVUUQVJGTGYCUCJWIG
TWUJVQUGNNCNNVJGUGCUUGVU6JGURTGCFUYKFGPGFQWVFTCOCVKECNN[CPFVJCVUVJG
MKPFQHGXGPVTKUMVJCVYGVJKPMKUCUJQTVEQOKPIQHVQVCNTGVWTPQRVKOK\CVKQPDGECWUG
YGTGNQQMKPICVCXGT[CEEWTCVGRTKEKPIOCVTKZ
+PTGURQPUGVQVJGUGEQPFRCTVQH[QWTSWGUVKQPYGTGEQIPK\GVJCVVJGTGCTG
FGHKEKGPEKGUKPRTKEKPI+XGRTKEGFOCP[RQTVHQNKQUQPCOQPVJN[DCUKUCPFVTWUV
OGVJGTGCTGOCP[FGHKEKGPEKGUKPKV9GJCXGFGXGNQRGFUGRCTCVGN[VJG
VGEJPQNQI[VQIGPGTCVGCUUGVECUJHNQYU+PQVJGTYQTFUYKNNVJGUG%/1URC[NKMG
VJKU!9KNNVJGUGCIGPE[QTEQTRQTCVGUGEWTKVKGUDGECNNGFIKXGPVJKUUEGPCTKQ!+HVJCV
KUFGXGNQRGFUGRCTCVGN[HTQOVJGRTKEKPIOCVTKZVJCVUKPXQNXGFKPVQVCNTGVWTP
QRVKOK\CVKQPCPFKH[QWVCMGVJGECUJHNQYUCPFECNNHQTCECUJHNQYOCVEJCUC
EQPUVTCKPVKP[QWTQRVKOK\CVKQPVJGP[QWCTGCEVWCNN[JCPFNKPIVJGECUJHNQY
OCVEJKPIRTQDNGOUGRCTCVGN[HTQOVJGVQVCNTGVWTPRTQDNGOYJKEJKUQPGVJCVKU
KPXQNXGFRTKOCTKN[KPRTKEKPIUQKVUPQVRGTHGEV6JCVUVJGVTWGCPUYGTVQVJGUVQT[
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QTVGP[GCTUKPKVKCNN[9GIQVVJCVVQRQUKVKXG9GCNUQIQVUEGPCTKQUVJTGGCPFHQWT
KPVQRQUKVKXGVGTTKVQT[KPCDQWVJCNHVJGVKOGVJCVVJGENKGPVFKF+JQRGVJKUIQGUDCEM
VQVJGTGKPXGUVOGPVCUUWORVKQPVJCVYGYGTGFKUEWUUKPIGCTNKGTYJKEJKUHCTOQTG
EQPUGTXCVKXGVJCPVJGENKGPVYCUWUKPI%CPYGCRRN[VJKPIUQVJGTVJCPCHKXG[GCT
CPFVGP[GCT6TGCUWT[!5WTG9GECPCRRN[CP[VJKPICNQPIVJG6TGCUWT[EWTXG
1WTRQKPVKUVJCVUWTRNWUFGXGNQROGPVUJQWNFPQVDGCHWPEVKQPQHTGKPXGUVOGPV
CUUWORVKQP+VUJQWNFDGCHWPEVKQPQHJCXKPIVJGTKIJVRQTVHQNKQKPVJGHKTUVRNCEG
9JCVYGPQVKEGFYJGPYGCRRNKGFVJGENKGPVUTGKPXGUVOGPVCUUWORVKQPVQVJGUG
VGTOKPCNUWTRNWUPWODGTUYCUVJCVVJG[YGTGCNNKPETGCUGFD[CDQWVYJKEJ
YCUVJGKORCEVQHJCXKPIUQOGCFFKVKQPCN[KGNFVJTQYPKPVQKV
%CUG5VWF[HQT'UVCDNKUJKPICP1RVKOCN+PXGUVOGPV5VTCVGI[
CHART 6
PROPOSED SURPLUS DEVELOPMENT—NEW YORK SEVEN SCENARIOS
0GZVNGVçUEQORCTGVJGDGHQTGCPFCHVGT
DGHQTGKU%JCTVCHVGTKU%JCTV;QWECP
UGGVJGVJKPIU+YCURQKPVKPIQWV9GJCFPGICVKXGUWTRNWUCETQUUVJGDQCTFKP
UEGPCTKQUVYQVJTGGCPFHQWT9GCNUQJCXGFKXGTIGPEG6JGENKGPVYCU
GZRGTKGPEKPICDQWVOKNNKQPKP[GCT1WTYQTUVECUGECOGQWVVQ
OKNNKQPCPFQWTDGUVECUGECOGQWVVQDKNNKQP#ICKPVJKUKUYKVJC6TGCUWT[
TGKPXGUVOGPVCUUWORVKQP
%JCTVKUVJGECUJHNQYOKUOCVEJVJCVYCUCEQPUVTCKPVKPQWTCPCN[UKU+JQRGVQ
OCMGVJGVKGKPVQVJGOKPKOWOEQUVUQNWVKQPJGTG+H[QWCTGUQNXKPIHQTC
OKPKOWOEQUVUQNWVKQPVJGECUJHNQYOKUOCVEJDGEQOGUCPQDLGEVKXGCUQRRQUGF
VQUKORN[CEQPUVTCKPV9JCV[QWNNVGPFVQUGGKUVJCVKPQPGUEGPCTKQQTCPQVJGT
VJGTGYKNNDGCDUQNWVGN[\GTQECUJHNQYOKUOCVEJ6JG[YKNNDGRGTHGEVN[OCVEJGF
9JGPYGDGICPYKVJUWTRNWUYGYGTGIQKPIVQJCXGECUJHNQYOKUOCVEJ6JKUKU
VJGTGUWNV6JGOCIPKVWFGQHVJGECUJHNQYOKUOCVEJKUUKIPKHKECPV+PVJGDGHQTG
ECUGYGYGTGWRVQCNOQUVOKNNKQPKP0QYYGHKPFQWTUGNXGUFQYPCV
CDQWVOKNNKQPCPFVJCVKUTGFWEKPITGUKFWCNTKUM
6JGPGZVDGHQTGCPFCHVGTITCRJEQPUKUVUQH%JCTVCUDGHQTGCPF%JCTVCUCHVGT
CPFUJQYUVJGVYQCICKPQPVJGUCOGUECNGYJGTGVJGTGUKFWCNTKUMYCUOKVKICVGF
DGECWUGQHVJGECUJHNQYOCVEJEQPUVTCKPV6JCVYQPVJCRRGPQPGXGT[RQTVHQNKQ
+VJCRRGPGFVQYQTMQWVXGT[PKEGN[JGTG
4'%14&8QNWOG
CHART 7
PROPOSED CASH-FLOW MISMATCH—7 SCENARIOS
6JKUKUVJGIQQFRCTV9GJCFCOGGVKPICDQWVVYQYGGMUCIQ#HVGTYGUJQYGF
VJGOCNNVJGRKEVWTGUVJGRGQRNGUCKFé9GECPVDW[CDWPEJQH%/1UCPFNQY
ITCFGEQTRQTCVGUê6JGRQTVHQNKQEQORQUKVKQPCEVWCNN[YGPVCYC[HTQOOQTVICIG
UGEWTKVKGU6JGRQTVHQNKQEQORQUKVKQPDGHQTGYCUCDQWVQHYJCV+NNECNN
DQPFUåTGIWNCTQNFEQWRQPDGCTKPIDQPFU6TGCUWTKGUCIGPEKGUEQTRQTCVGUCPF
UQOGECNNCDNGXGTUKQPU#HVGTYCTFYGJCFKPVJGOQTGUVTWEVWTGFUGEWTKVKGU
+PKVKCNN[VJGENKGPVJCFCDQWVKPOCTMGVCDNGOQTVICIGUKPENWFKPIQPGQTVYQ
EQOOGTEKCNOQTVICIGU6JG[YGTGWRVQVJGKTNKOKVVJKPMKPIVJCV[KGNFYCUJGNRKPI
VJGOQWV9JGPYGKORNGOGPVGFQWTQRVKOK\CVKQPYGYGPVCYC[HTQOVJG
PGICVKXGEQPXGZUGEWTKVKGUNKMGVJGOQTVICIGU9GTGFWEGFVJCVGZRQUWTGVQCDQWV
å
#UYGUCKFGCTNKGTVJGENKGPVJCFRTKXCVGRNCEGOGPVU#ICKPNQQMKPIHQT[KGNFYG
EQPUVTCKPGFVJCVCPFOCFGPQEJCPIG6JCVDGICPCVCPFGPFGFCV
6JGUGCTGIQKPIVQDGFWTCVKQPOCVEJGFDGECWUGYGCTGUQOGYJCVECUJHNQY
OCVEJGF6QFQVJCVRTQRGTN[[QWYQWNFPGGFVQVCMGKPVQCEEQWPVVJGTGKPXGUVGF
UGEWTKVKGUKPVQVJGHWVWTG9JCVYGYGTGNQQMKPICVYCUVJGRQTVHQNKQVQFC[XGTUWU
VJGQRVKOCNQPG6JGFWTCVKQPYGPVHTQO[GCTUVQ[GCTU9GTGPQVGZCEVN[
UWTGYJ[VJGENKGPVYCUVJKUUJQTV9GVJKPMVJG[HGNVCUKHKVYCUJGNRKPIVJGOKP
UEGPCTKQUVYQVJTGGCPFHQWTVQRQUUKDN[HWPFCNCTIGECUJHNQYOKUOCVEJQTCNCTIG
JKVVQUWTRNWUFGXGNQROGPV6JCVENGCTN[YCUPQVVJGCPUYGT
%CUG5VWF[HQT'UVCDNKUJKPICP1RVKOCN+PXGUVOGPV5VTCVGI[
%QPXGZKV[YGPVHTQOCUNKIJVPGICVKXGVQCUNKIJVRQUKVKXG%QPXGZKV[YCUUKORN[PQV
CPKUUWGKPVJKURQTVHQNKQ+VYCUUVTWEVWTGYJKEJIQGUDCEMVQYJCV+YCUUC[KPI
GCTNKGT+PQWTQHHKEGYGEJQQUGPQVVQWUGVGTOUNKMGFWTCVKQPCPFEQPXGZKV[9G
WUGKVVQVTCPUNCVGVJKPIUVQENKGPVUVQJGNRVJGOWPFGTUVCPFKVOQTGDWVYGFQPVWUG
VJGVGTOUDGECWUGVJG[LWUVFQPVOCVVGTVQWU9GJCXGDTQMGTUECNNWUVJCVYCPVVQ
UGNNWUDQPFUDGECWUGYGCTGEQPUVCPVN[NQQMKPIVQKPETGCUGQWTFCVCDCUG6JG[CUM
é9GNNYJCVCTG[QWNQQMKPIHQT!ê9GUC[é9GFQPVMPQYê#PFYGFQPV9G
RWVVJGECUJHNQYUKPCPFHQTCP[IKXGPENKGPVCFKHHGTGPVUGEWTKV[KUYCTTCPVGF
/QTGVKOGUVJCPPQVKVKUXGT[FKHHKEWNVVQUC[VJCVKVPGGFUVQJCXGCEGTVCKPFWTCVKQP
CPFURTGCF9GLWUVFQPV9GVJTQYOCP[ECUJHNQYUKPVJGJQRRGTCPFYJCV
EQOGUQWVKUVJGQRVKOCNUQNWVKQP
+XGOGPVKQPGFVJGTGUWNVUKPVJGKPVGTRTGVCVKQP6JGVGTOKPCNUWTRNWUEQPXGTIGPEG
TGICTFNGUUQHRCVJKUVJGIQQFVJKPI5EGPCTKQVYQUWTRNWUTGOCKPURQUKVKXG
5EGPCTKQUVJTGGCPFHQWTCEJKGXGRQUKVKXGTGUWNVUKPJCNHVJGVKOG6JGVGTOKPCN
UWTRNWUTCPIGKPVJGKPKVKCNRQTVHQNKQJCFCDGUVECUGQHOKNNKQPCPFKVUYQTUV
ECUGYCUOKNNKQP6JGQRVKOCNRQTVHQNKQçUDGUVECUGYCUDKNNKQP+VUYQTUV
ECUGYCUDKNNKQP6JKUKUKPVGTOKPCN[GCT6JGTGKPXGUVOGPVCUUWORVKQPKU
OQTGEQPUGTXCVKXGKGYGYGTGWUKPI6TGCUWT[PQVGUKPUVGCFQHEQTRQTCVGUCPF
OQTVICIGU%NGCTN[KH[QWDW[CEQTRQTCVG[QWECPDW[VJGUCOGECUJHNQY
EJGCRGT+VUIQKPIVQETGCVGDGVVGTTGUWNVU
5QJQYFQ[QWKORNGOGPVVJKU!;QWJCXGVJKUQRVKOCNUQNWVKQP;QWECPUJQYVJG
ETCHVVJCV[QWETGCVGFVQVJGDQCTFCPFCUMé&Q[QWNKMGVJCV!ê6JG[FQCPFUC[
é9GNNFQKVê6JGRQTVHQNKQOCPCIGTKUNGHVYQPFGTKPIYJCVVQFQ6JKUYCUCDKI
RTQDNGOHQTWU6JGTGYGTGQTUGEWTKVKGUKPVJGTGUQVJGURTGCFUJGGVYCU
UWDUVCPVKCNN[NCTIGTVJCPVJGQPG+ETGCVGFHQTVJKURTGUGPVCVKQP
9GUJQYGFEWTTGPVCPFRTQRQUGFRQUKVKQPUCPFTGNGXCPVFCVCHQTVJGTGEQOOGPFGF
RWTEJCUG4GEQOOGPFGFPGYRWTEJCUGUCTGUGEWTKVKGUVJCVYGTGRKEMGFQWVQHVJG
WPKXGTUGVJCVYGQHHGTGF9GHQWPFVJGUQNXGTYGPVVQOCP[CIGPE[UGEWTKVKGU9G
JCFRWVVJGCIGPE[UGEWTKVKGUKH[QWTGECNNKPVQVJGOKZDGECWUGQHVJGKTECNN
UVTWEVWTG1WTENKGPVUCKFé;QWOGCPCNNQHVJGUGECNNCDNGUGEWTKVKGUYGXGDGGP
DW[KPIJCXGDGGPDCF!ê9GUCKFé0QKVçUSWKVGVJGQRRQUKVG6JGTKIJVECNNCDNG
UGEWTKV[KUCITGCVVJKPIDWVVJGYTQPIQPGJCUPQKORCEVCVDGUVCPFJCUDCF
KORCEVCVYQTUVê
9GYGTGCDNGVQEQOGWRYKVJCTGEQOOGPFGFJKVNKUVQHUGEWTKVKGUVJCV[QWPGGFVQ
DW[CPFQTUGNNKFGPVKHKGFD[EWTTGPVRTKEGEQWRQPOCVWTKV[URTGCFFWTCVKQP
EQPXGZKV[CPFUQQP5WRRQUGC)/UGEWTKV[KUPQVCXCKNCDNG/C[DG(QTFJCUC
UKOKNCTUGEWTKV[QTOC[DG(QTFKUQP[QWTTGEQOOGPFGFNKUV1TDGVVGT[GVOC[DG
VJGTGKUUQOGNQYGTETGFKVSWCNKV[UGEWTKV[QWVVJGTGVJCVJCUCOCVWTKV[CPFECNN
4'%14&8QNWOG
UVTWEVWTGVJCVKUXGT[UKOKNCT*QYGXGT[QWDGNKGXGVJCVQPCSWCNKVCVKXGDCUKUKVUC
DW[DGECWUGKVUCPKORTQXKPIETGFKV%NGCTN[KVUIQKPIVQOCMGUGPUGVQDW[KVKH
YGTGWUKPIJKIJITCFGEQTRQTCVGUCPFCIGPEKGUKPQWTCPCN[UKU;QWHKPFVJGUCOG
UVTWEVWTGåRNWUQTOKPWUCEQWRQPTCVGåKHVJCVUYJCVJCRRGPUVQDG
TGEQOOGPFGF+VFQGUPVJCXGVQDGGZCEVN[6QVJGGZVGPVVJCVVJGRQTVHQNKQ
OCPCIGTKUCDNGVQGZGEWVGVJGUGUQNWVKQPU[QWCTGCDNGVQCEJKGXGENQUGTVQVJG
QRVKOCNUQNWVKQP
9JCVKUKORQTVCPVKUVJCVKHYGTGTWPPKPIVJKUQPCOQPVJN[DCUKUYGUKORN[FGRNQ[
CNNVJGCUUGVUVJCV[QWRWTEJCUGF4GQRVKOK\GCNNVJGGZGEWVKQPUVJCV[QWXG
CEJKGXGFQXGTVJGNCUVOQPVJ+VYKNNENGCTN[NGCPKPVQUQOGQHVJGUGEWTKVKGUVJCV
[QWFKFPQVRKEMWRKPVJCVRGTKQF6JCVKUJQYYGYQWNFRTQFWEGCJKVNKUVQTC
TQCFOCR
.GVçUFKUEWUUUQOGEQPUKFGTCVKQPUCPFNKOKVCVKQPU#U+OGPVKQPGF+DGICPYQTMKPI
YKVJQRVKOK\CVKQPHKXGQTUKZ[GCTUCIQYJGPCNNYGJCFYCUC.QVWUURTGCFUJGGV
'ZEGNYCUUVKNNCDCFKFGC#EVWCNN[+ECNEWNCVGFCEETWGFKPVGTGUVKP.QVWU9JCVYG
HQWPFYCUVJCVIGPGTCVKPITGUWNVUCPFRTGRCTKPIFCVCYCUCNCDQTKPVGPUKXGRTQEGUU
#UTGEGPVN[CUQPN[CHGYOQPVJUCIQYGYGTGGORNQ[KPIEWVCPFRCUVGOGVJQFUVQ
IGVQWTECUJHNQYUKPVQCHQTOVJCVYQWNFIQVQVJGUQNXGTKPCWUCDNGHCUJKQP9G
HKIWTGYGJCFCDQWVDKVUQHFCVCQPQPGYQTMUJGGVVJCVPGGFGFVQDG
VTCPUHGTTGF+VVQQMVJTGGRGQRNGVYQYGGMU;QWGPFWRNGCTPKPIJQYVQFQCNKVVNG
%RTQITCOOKPICHVGT[QWFQVJCVQPGVKOG$WVQPN[D[FQKPIVJGUGVJKPIUD[JCPF
FQ[QWDGIKPVQCRRTGEKCVGYJKEJCTGVJGNCDQTKPVGPUKXGKUUWGUCPFYJKEJCTGPQV
6JGTGHQTG[QWHKPFQWVYJKEJYC[VQCNNQECVG[QWTRTQITCOOKPIVCNGPV&Q[QW
YCPVVQOCMGKVITCRJKECNCPFWUGTHTKGPFN[DGHQTGKVCEVWCNN[OCMGUUGPUG!0Q
RTQDCDN[PQV9GFNKMGVQJCXGVJGTKIJVCPUYGTDGHQTGYGJCXGUQOGVJKPIVJCVKU
WUGTHTKGPFN[
#EEGUUVQNKXGECRKVCNOCTMGVKPHQTOCVKQPKUUQOGVJKPIVJCVKUCDUQNWVGN[TGNGXCPV
*QYOCP[RGQRNGCEVWCNN[UKVYKVJVJGVTCFGTU!#EEGUUVQNKXGECRKVCNOCTMGV
KPHQTOCVKQPKUUQOGVJKPIVJCVKUFKHHKEWNVHQTOQUVQHWUVQCESWKTG+H[QWQPN[UGGCP
QNFKPXGPVQT[QPEGGXGT[YGGMQTVYQ[QWFQPVMPQYYJCVUCXCKNCDNG+H[QW
GUVCDNKUJCWPKXGTUGQHUGEWTKVKGUVJCVVJGUVTGGVECPVRTQFWEGDGECWUGVJGFGTKXCVKXG
UGEWTKVKGUVJCVCTGTGSWKTGFVQRTKEGUWEJCUGEWTKV[CTGPQVCXCKNCDNGQTVJG[CTGPQV
RTKEGFUWEJVJCVCUGEWTKV[NKMGVJCVECPDGRTKEGFVJGP[QWCTGVJTQYKPIUGEWTKVKGU
KPVJGTGVJCVJ[RQVJGVKECNN[CTGCIQQFKFGC+PRTCEVKEGKVOCMGUPQUGPUGKHVJG
UGEWTKVKGUECPPQVDGHQWPFKPVJGéNKXGêOCTMGV
;QWCNUQIGVKPVQJGFIGKUUWGU6JKUKUYJGTGUQOGUVTGGVHKTOURTKEGQPCP1#5
6JCVUCPQVJGTPGYDW\\YQTFVJCVKPXQNXGUCUVQEJCUVKERCVJIGPGTCVKQPRTKEKPI
V[RGOQFGN6JGRTQDNGOKUVJCVCVTCFGTOC[DW[OKNNKQPYQTVJQHCRCTVKEWNCT
%CUG5VWF[HQT'UVCDNKUJKPICP1RVKOCN+PXGUVOGPV5VTCVGI[
EQTRQTCVGDQPFCPFJGQTUJGOC[UGNNCHKXG[GCT6TGCUWT[PQVGCICKPUVKV*G
VJKPMUHQTIGV1#5CPFFWTCVKQPOCVEJKPI+OIQKPIVQUGNNVJGHKXG[GCTCICKPUVKV
CPFVJCVUJQY+NNRTKEGKV+H[QWJCXGQPGRTKEKPIOQFGNDWVVJGVTCFGTUCTG
RTKEKPIVJGUGEWTKVKGUKPCPQVJGTHCUJKQPVJGPYJCVJCXG[QWCEJKGXGF!;QWJCXGC
OCTMGVVJCVEJCPIGUCPF[QWVJKPMVJGUGEWTKVKGUUJQWNFDGRTKEGFKPCEGTVCKPYC[
6JGVTCFGTKUQPN[IQKPIVQUGNNVJGOKHJKUQTJGTJGFIGYQTMUQWVTKIJVUQ[QWTG
QWVQHNWEM
2TQEGUUKPIVKOGNKOKVCVKQPUCTGCDKIKUUWG9GVCNMGFVQQPGEQORCP[VJCVYCU
TWPPKPIUKOWNCVKQPU6JG[FGENCTGFTCVJGTRTQWFN[VJCVVJG[YGTGFQKPI
UKOWNCVKQPUVJCVYGTGCNNVTKCNCPFGTTQT6JG[RWVCDQWVQHVJGOGCEJPKIJVVQ
TWPKPCDCVEJHCUJKQP+VVQQMVJGOCDQWVVGPFC[UVQIGVVJGUKOWNCVKQPUVQIGVJGT
6JG[JCFVJGKTGHHKEKGPVHTQPVKGTDWVVJG[UVKNNYGTGPVQRVKOCN6JG[JCFPQVIQPG
KPVQVJGGNGOGPVCT[TQYQRGTCVKQPUPGEGUUCT[VQCUUWTGQRVKOCNKV[$WVVJG[JCFTWP
CNQVQHUKOWNCVKQPU
#PQVJGTSWGUVKQPKUYJCVKUQRVKOK\GFCPFJQYKUKVEQPUVTCKPGF!#ICKPYGOWUV
IQDCEMVQYJCVUEQOOGTEKCNN[CXCKNCDNG+PCPCVVGORVVQETGCVGCRCEMCIGVJCVKU
WUGTHTKGPFN[CPFECPDGUJTKPMYTCRRGFOCP[UQHVYCTGFGXGNQROGPVEQORCPKGU
JCXGVQETGCVGUQOGVJKPIVJCVKPUWTCPEGEQORCPKGUOQPG[OCPCIGTUUVQEMRKEMGTU
DCPMUETGFKVWPKQPUCPFUCXKPIUCPFNQCPUECPCNNWUG%NGCTN[YGTGPQVCNNKPVJG
UCOGDWUKPGUU9JCVCTGYGQRVKOK\KPICPFFQGUVJCVCRRN[VQYJCVYGYCPVVQ
FQ!1WTVJGQT[HTQOVJGQPUGVJCUDGGPVJCVKH[QWECPFGUETKDGOCVJGOCVKECNN[
YJCVKVKUVJCV[QWFNKMGVQQRVKOK\GYGECPGORNQ[KVKPQWTEQFGCPFOCMGKVCP
KPVGITCNRKGEGQHQWTUQNWVKQP5WTRNWUKUUKORN[WUGFKPVJKUECUGDGECWUGENGCTN[
VJGENKGPVJCFCUWTRNWUFGXGNQROGPVRTQDNGO
*QYKUKVEQPUVTCKPGF!#PQVJGTQPGVJCV+XGUGGPTGEGPVN[JCUUWIIGUVGFVJCV[QW
DGIKP[QWTQRVKOK\CVKQPRTQEGUUCPFITCFWCNN[CFFEQPUVTCKPVUWPVKN[QWJCXG
CEJKGXGFCPQRVKOCNUQNWVKQP;QWFQPVITCFWCNN[CFFEQPUVTCKPVU;QWJCXGVQ
CFFVJGOCNNCVQPEGDGECWUGVJG[CNNOCVVGTCPF[QWFQPVYCPVVQJCXGVQRNC[
YKVJVJGO#DQWVVJTGG[GCTUCIQ+YCUYQTMKPIYKVJVJG'ZEGNUQNXGTCPF+
VJQWIJV+JCFUQOGVJKPIIQKPI6JGUQNXGTKP'ZEGNJCUCNKOKVQHCDQWV
EQPUVTCKPVUCPFCDQWVXCTKCDNGU6JCVKUPQVCJCTFCPFHCUVPWODGTDWVYJCV+
HQWPFQWVKUYJGP+RWUJGFVJGUQNXGDWVVQP+EQWNFIGVCFKHHGTGPVCPUYGTGXGT[
VKOG6JCVUPQVYJCVYGECNNTQDWUV+VUPQVRTQFWEKPIVJGTKIJVCPUYGT2CTVQH
VJCVJCUVQFQYKVJNKPGCTXGTUWUSWCFTCVKERTQITCOOKPI#TG[QWCEJKGXKPINQECN
OKPKOCCPFOCZKOCQTCTG[QWCEJKGXKPIINQDCNOKPKOCCPFOCZKOC!;QWJCXG
VQDGECTGHWNJQY[QWFGUKIP[QWTRTQITCO
4KIJVUEGPCTKQU6JKURGTVCKPUVQDKPQOKCNCPFVTKPQOKCNNCVVKEGU9JCVCTGVJGTCVGU
CPFJQYFQYGYCPVVQFQVJKU!;QWIGPGTCVGVJGTCVGUEGPCTKQVJCV[QWTGJCRRKGUV
4'%14&8QNWOG
YKVJCPFIKXGWUYJCVGXGTYGKIJVKPIVJCV[QWTGJCRRKGUVYKVJCPFYGGORNQ[VJCV
CUCEQPUVTCKPV+HVJGUGNKCDKNKVKGUGZKUVKPVJKUKPVGTGUVTCVGUEGPCTKQCPFCTGYGKIJVGF
YKVJCEQPHKFGPEGNGXGNVJGPYGECPUQNXGCICKPUVVJCV
*QYCTGVJGTGUWNVURTGUGPVGF!#ICKPKVJCUVQDGUQOGVJKPIVJCVUHCOKNKCTVQVJG
RGQRNGYJQJCXGVQFQVJGKORNGOGPVCVKQPYJKEJKUYJ[YGRKEMGFWRCECUJHNQY
VGUVCPFTCPYKVJVJCV9GMPGYVJCVYCUUQOGVJKPIVJCVGXGT[QPGYCUHCOKNKCT
YKVJVQDGIKPYKVJ.GVURTGUGPVQWTTGUWNVUEQPUKUVGPVYKVJVJCVHCUJKQP
%QORWVGTUOCMGOKUVCMGUQTVJGCUUWORVKQPUEQWNFDGYTQPI+H[QWECPVXGTKH[KV
VJGPYJCVIQQFKUKV!(KPCNN[KHKVKUQRGTCVKQPCNN[YGNNFGHKPGFVJGP[QWUJQWNFDG
CDNGVQJCPFVJGUGTWNGUQXGTVQVYQRGQRNGYKVJVJGUCOGDCEMITQWPFYJQUJQWNF
DGCDNGVQKORNGOGPVVJGUGTGUWNVUCPFCEJKGXGUWDUVCPVKCNN[VJGUCOGTGUWNVU9JCV
YGXGHQEWUGFQPVJGGPVKTGVKOGKUJQYYGIGVVJKUKPHQTOCVKQPVQVJGRQTVHQNKQ
OCPCIGTCPFJQYVJGRQTVHQNKQOCPCIGTECPWUGKVVQETGCVGVJKUQRVKOCNUQNWVKQP
6JGTGCTGUQOGQVJGTRQUUKDNGQDLGEVKXGU6JG[CTGVQ
&
/CZKOK\GUWTRNWU
&
/KPKOK\GTGUKFWCNTKUM
&
/CZKOK\GUVCVWVQT[UWTRNWU
&
+ORTQXGTGUGTXGGHHKEKGPE[
&
+ORTQXGTGRQTVGF[KGNF
&
#EJKGXGOKPKOWOEQUVECUJHNQYOCVEJ
&
+ORTQXGKPEQOG
&
+ORTQXG4$%GZRQUWTG
&
'XCNWCVGPGYDWUKPGUUNKPGU
#OKPKOWOEQUVECUJHNQYOCVEJKUCITGCVYC[VQGXCNWCVGPGYNKPGUQHDWUKPGUU
;QWDGIKPVQNQQMCVKVPQVKPVGTOUQHJQYOWEJUWTRNWUQTJQYOWEJOQPG[[QW
ECPOCMGQHHKVDWVVJGOCZKOWOCOQWPVQHOQPG[VJCV[QWUJQWNFRC[HQTKV+P
QVJGTYQTFUJQYOWEJKUKVIQKPIVQEQUVWUCVCOKPKOWOVQHWPFKVKHKVYGTG
RGTHGEV!+VUCIQQFYC[VQNQQMCVCPGYNKPGQHDWUKPGUU
(TQOVJG(NQQT#NKIJVDWNDYGPVQPKPO[OKPFCU[QWYGTGIQKPIVJTQWIJVJKU
RTGUGPVCVKQP+FDGKPVGTGUVGFKP[QWTGZRGTKGPEGCPFRGTJCRUVJCVQHVJGCWFKGPEG
CUYGNN6JGVJQWIJVVJCVQEEWTTGFVQOGKUCUXCNWCVKQPCEVWCTKGUYGCTGQHVGP
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