-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, N0CEqzkQtEtDAtCn3Cl7T9ROM1lL8FpCj5x3ppOJKRdJGxPo7Em+EmpImhHhn2gy GYEZHCTXfoFvNugKTCH1IQ== 0001020242-07-000875.txt : 20070806 0001020242-07-000875.hdr.sgml : 20070806 20070806164927 ACCESSION NUMBER: 0001020242-07-000875 CONFORMED SUBMISSION TYPE: 10-D PUBLIC DOCUMENT COUNT: 46 CONFORMED PERIOD OF REPORT: 20070725 FILED AS OF DATE: 20070806 DATE AS OF CHANGE: 20070806 FILER: COMPANY DATA: COMPANY CONFORMED NAME: IndyMac IMSC Mortgage Loan Trust 2007-HOA1 CENTRAL INDEX KEY: 0001402523 STANDARD INDUSTRIAL CLASSIFICATION: ASSET-BACKED SECURITIES [6189] FILING VALUES: FORM TYPE: 10-D SEC ACT: 1934 Act SEC FILE NUMBER: 333-140726-08 FILM NUMBER: 071028416 BUSINESS ADDRESS: STREET 1: 155 NORTH LAKE AVENUE CITY: PASADENA STATE: CA ZIP: 91101 BUSINESS PHONE: 8006692300 MAIL ADDRESS: STREET 1: 155 NORTH LAKE AVENUE CITY: PASADENA STATE: CA ZIP: 91101 10-D 1 in07mh10d1.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-D ASSET-BACKED ISSUER DISTRIBUTION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the monthly distribution period from June 1, 2007 to June 30, 2007 Commission File Number of issuing entity: 333-132042-83 IndyMac IMSC Mortgage Loan Trust 2007-HOA1 (Exact name of issuing entity as specified in its Charter) Commission File Number of depositor: 333-132042 IndyMac MBS, Inc. (Exact name of depositor as specified in its Charter) IndyMac Bank, F.S.B (Exact name of sponsor as specified in its Charter) Delaware (State or other jurisdiction of incorporation or organization of the issuing entity) 26-0597666 (I.R.S. Employer Identification No.) Care of Deutsche Bank National Trust Company as Trustee 1761 East St. Andrew Place, Santa Ana CA (Address of principal executive offices of the issuing entity) 92705 (Zip Code) Registrant's Telephone Number, Including Area Code: (626) 535-5555 NONE (Former name or former address, if changed since last report) Registered / reporting pursuant to (check one) Section 12(b) Section 12(g) Section 15(d) Name of Exchange Title of Class (if Section 12(b)) Class A-1-1 [ ] [ ] [X] Not Applicable Class A-1-2 [ ] [ ] [X] Not Applicable Class A-2-1 [ ] [ ] [X] Not Applicable Class A-2-2 [ ] [ ] [X] Not Applicable Class A-2-3 [ ] [ ] [X] Not Applicable Class A-2-4 [ ] [ ] [X] Not Applicable Class A-3 [ ] [ ] [X] Not Applicable Class AXPP [ ] [ ] [X] Not Applicable Class A-R [ ] [ ] [X] Not Applicable Class B-1 [ ] [ ] [X] Not Applicable Class B-2 [ ] [ ] [X] Not Applicable Class B-3 [ ] [ ] [X] Not Applicable Class B-4 [ ] [ ] [X] Not Applicable Class B-5 [ ] [ ] [X] Not Applicable Class B-6 [ ] [ ] [X] Not Applicable Class B-7 [ ] [ ] [X] Not Applicable Class B-8 [ ] [ ] [X] Not Applicable Class B-9 [ ] [ ] [X] Not Applicable Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] PART I DISTRIBUTION INFORMATION Item 1. Distribution and Pool Performance Information. On July 25, 2007 a distribution was made to holders of IndyMac MBS, Inc., IndyMac IMSC Mortgage Loan Trust 2007-HOA1, Mortgage Pass-Through Certificates Series 2007- HOA1 PART II OTHER INFORMATION Item 2. Legal Proceedings. None. Item 3. Sales of Securities and Use of Proceeds. None. Item 4. Defaults Upon Senior Securities. None. Item 5. Submission of Matters to a Vote of Security Holders. None. Item 6. Significant Obligors of Pool Assets. None. Item 7. Significant Enhancement Provider Information. (a) FSA as the credit enhancement provider. (b) The Bank of New York as the credit enhancement provider. Item 8. Other Information. None. Item 9. Exhibits. (a) The following is a list of documents filed as part of this Report on Form 10D: Statement to Certificateholders on July 25, 2007 is filed as Exhibit 99.1 hereto. FSA Financial Data as described in the attached as Exhibit 99.2 hereto. The Bank of New York Financial Data as described in the attached as Exhibit 99.3 hereto. (b) The exhibits required to be filed by Registrant pursuant to Item 601 of Regulation S-K are listed above in the Exhibit Index that immediately follows the signature page hereof. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. IndyMac MBS, Inc. (Depositor) /s/ Beverlin Hammett Name: Beverlin Hammett Title: First Vice President Date: August 6, 2007 Exhibit Number Description 99.1 Monthly report distributed to holders of the IndyMac MBS, Inc., IndyMac Home Equity Mortgage Loan Asset-Backed Trust, Mortgage Pass-Through Certificates Series 2007- HOA1 99.2 FSA Financial Data 99.3 The Bank of New York Financial Data EX-99.3 2 in07mhbony993.txt THE BANK OF NEW YORK COMPANY, INC. Quarterly Report on Form 10-Q For the quarterly period ended March 31, 2007 The Quarterly Report on Form 10-Q and cross reference index is on page 72. THE BANK OF NEW YORK COMPANY, INC. FINANCIAL REVIEW TABLE OF CONTENTS Consolidated Financial Highlights 1 Management's Discussion and Analysis of Financial Condition and Results of Operations - Overview 3 - First Quarter 2007 Highlights 5 - Consolidated Income Statement Review 6 - Business Segment Review 12 - Critical Accounting Policies 26 - Consolidated Balance Sheet Review 30 - Liquidity 37 - Capital Resources 40 - Trading Activities 42 - Asset/Liability Management 44 - Statistical Information 45 - Supplemental Information 46 - Merger Agreement with Mellon Financial Corporation 48 - Forward-Looking Statements and Risk Factors 48 - Mellon Transaction 49 - Government Monetary Policies and Competition 50 - Website Information 50 Consolidated Financial Statements - Consolidated Balance Sheets March 31, 2007 and December 31, 2006 51 - Consolidated Statements of Income for the Three Months Ended March 31, 2007, December 31, 2006, and March 31, 2006 52 - Consolidated Statement of Changes In Shareholders' Equity for the Three Months Ended March 31, 2007 53 - Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2007 and 2006 54 - Notes to Consolidated Financial Statements 55 Form 10-Q - Cover 72 - Controls and Procedures 73 - Legal and Regulatory Proceedings 73 - Risk Factors 74 - Unregistered Sales of Equity Securities and Use of Proceeds 74 - Exhibits 75 - Signature 76 1

3 MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE COMPANY'S FINANCIAL CONDITION AND RESULTS OF OPERATIONS ("MD&A") The Bank of New York Company, Inc.'s (the "Company") actual results of future operations may differ from those estimated or anticipated in certain forward-looking statements contained herein for reasons which are discussed below and under the heading "Forward-Looking Statements and Risk Factors." When used in this report words such as "estimate," "forecast," "project," "anticipate," "confident," "target," "expect," "intend," "think," "continue," "seek," "believe," "plan," "goal," "could," "should," "may," "will," "strategy," "highly attractive," "rapidly evolving financial markets," "synergies," "opportunities," "superior returns," "well-positioned," "trends," "pro forma" and words of similar meaning, signify forward-looking statements in addition to statements specifically identified as forward-looking statements. In addition, certain business terms used in this document are defined in the Company's 2006 Annual Report on Form 10-K. OVERVIEW The Company's Businesses The Bank of New York Company, Inc. (NYSE: BK) is a global leader in providing a comprehensive array of services that enable institutions and individuals to move and manage their financial assets in more than 100 markets worldwide. The Company has a long tradition of collaborating with clients to deliver innovative solutions through its core competencies: securities servicing, treasury management, asset management, and wealth management. The Company's extensive global client base includes a broad range of leading financial institutions, corporations, government entities, endowments and foundations. Its principal subsidiary, The Bank of New York (the "Bank"), founded in 1784, is the oldest bank in the United States and has consistently played a prominent role in the evolution of financial markets worldwide. The Company's strategy over the past decade has been to focus on highly scalable, fee-based securities servicing and fiduciary businesses, and it has achieved top three market share in most of its major product lines. The Company distinguishes itself competitively by offering one of the industry's broadest array of products and services around the investment lifecycle. These include: * advisory and asset management services to support the investment decision; * custody, securities lending, accounting, and administrative services for investment portfolios; * clearance and settlement capabilities and trade and foreign exchange execution; * sophisticated risk and performance measurement tools for analyzing portfolios; and * services for issuers of both equity and debt securities. 4 By providing integrated solutions for clients' needs, the Company strives to be the preferred partner in helping its clients succeed in the world's rapidly evolving financial markets. The Company's long-term financial objectives include: * achieving positive operating leverage over an economic cycle; and * sustaining top-line growth by expanding client relationships and winning new ones. To achieve its long-term objectives, the Company has grown both through internal reinvestment as well as execution of strategic acquisitions to expand product offerings and increase market share in its scale businesses. Internal reinvestment occurs through increased technology spending, staffing levels, marketing/branding initiatives, quality programs, and product development. The Company consistently invests in technology to improve the breadth and quality of its product offerings, and to increase economies of scale. The Company has acquired over 90 businesses over the past ten years, almost exclusively in its securities servicing and asset management areas. The Company has taken recent actions that have significantly transformed the Company. During 2006 the Company: * Agreed to merge with Mellon Financial Corporation ("Mellon"), a global leader in asset management and securities servicing * Sold its retail and regional middle market banking businesses ("Retail Business") * Purchased the corporate trust business (the "Acquired Corporate Trust Business") of JPMorgan Chase & Co. ("JPMorgan Chase") * Formed a joint venture known as BNY ConvergEx Group, LLC, a trade execution and investment technology firm As part of the transformation to a leading securities servicing provider, the Company has also de-emphasized or exited several of its slower growth traditional banking businesses over the past decade. The Company's more significant actions include selling its credit card business in 1997 and its factoring business in 1999, significantly reducing non-financial corporate credit exposures, and most recently, the sale of the Company's Retail Business. To the extent these actions generated capital, the capital has been reallocated to the Company's higher-growth businesses or used to repurchase shares. 5 The Company's business model is well positioned to benefit from a number of long-term secular trends. These include: * growth of worldwide financial assets, * globalization of investment activity, * structural market changes, and * increased outsourcing. These trends benefit the Company by driving higher levels of financial asset trading volume and other transactional activity, as well as higher asset price levels and growth in client assets, all factors by which the Company prices its services. In addition, international markets offer excellent growth opportunities. FIRST QUARTER 2007 HIGHLIGHTS The Company reported first quarter net income of $434 million and diluted earnings per share of 57 cents. On an adjusted basis, excluding merger and integration costs, first quarter net income was $449 million and diluted earnings per share was 59 cents. This compares to net income of $422 million, or 55 cents of diluted earnings per share, and income from continuing operations of $360 million, or 47 cents of diluted earnings per share, in the first quarter of 2006. Performance highlights for the quarter include: * Asset servicing revenue grew 17% over the first quarter of 2006, driven by custody, fund services, and broker-dealer services; * Asset and wealth management fees were up 20% over the first quarter of 2006 reflecting organic growth; * Issuer services results were strong following the seasonally robust fourth quarter; * Asset quality remained excellent; * Good expense discipline drove positive operating leverage. In the first quarter of 2007, the Company continued its strong momentum and achieved broad-based growth. The performance reflected the strength of the Company's business model, which has been built to benefit from global capital flows and investor activity. The Company benefited from active capital markets and the increase in net new business remains favorable. 6 CONSOLIDATED INCOME STATEMENT REVIEW Noninterest Income - ------------------ Continuing Operations - ---------------------

The results of many of the Company's businesses are influenced by customer activities that vary by quarter. For instance, consistent with an overall decline in securities industry activity in the summer, the Company typically experiences a seasonal decline in the third quarter. The Company also experiences seasonal increases in securities lending and depositary receipts reflecting European dividend distribution during the second quarter of the year, and to a lesser extent, in the fourth quarter of the year. The increase in noninterest income versus the year-ago quarter primarily reflects growth in securities servicing, asset and wealth management and foreign exchange and other trading activities. The first quarter of 2007 and the fourth quarter of 2006 reflect the new business mix including higher revenue from the Acquired Corporate Trust Business partially offset by the BNY ConvergEx transaction. The sequential- quarter increase in noninterest income primarily reflects growth in securities servicing fees and foreign exchange and other trading revenues. Securities servicing fees increased over the first quarter period of 2006 reflects strong growth in asset servicing and issuer services. Securities servicing fees were up sequentially reflecting growth in asset servicing and clearing services. See "Institutional Services Segment" in "Business Segment Review" for additional details. Global payment services fees were down slightly from the first and fourth quarters of 2006. Compared with the first quarter of 2006, the level of fees has been impacted by customers paying with a higher value of compensatory balances in lieu of fees. Global payment services includes fees related to funds transfer, cash management, and liquidity management. Asset and wealth management fees increased from the first quarter of 2006 primarily due to growth in assets under management, notably in alternative investments, as well as the acquisition of Urdang, a real estate investment management company, in March of last year. Total assets under management for asset and wealth management were $130 billion at March 31, 7 2007, up from $113 billion at March 31, 2006 and essentially unchanged from December 31, 2006. Performance fees were up from a year-ago quarter reflecting strong results at two of the Company's alternative asset management subsidiaries, Ivy Asset Management and Alcentra. The sequential-quarter decline primarily reflects the robust fourth quarter in performance fees. Financing-related fees decreased from a year-ago quarter and fourth quarter of 2006 reflecting a lower level of credit-related activities consistent with the Company's strategic direction. Finance-related fees include capital markets and investment banking fees, loan commitment fees and credit-related trade fees. Foreign exchange and other trading revenues were up sequentially and from the first quarter of 2006 reflecting an increase in other trading activities driven by interest rate derivatives and hedging transactions. Foreign exchange revenue increased on a sequential quarter basis consistent with higher market volatility and volumes in late February and early March. Foreign exchange results were down from the first quarter of 2006 reflecting lower market volatility. Asset/investment income in the quarter reflected continued strong returns on investments in the sponsor fund portfolio. Venture capital income was $17 million in the first quarter of 2007, down from $29 million in the fourth quarter of 2006 and $23 million in the first quarter of 2006. In the fourth quarter of 2006, the Company sold one of its sponsor fund investments to a third party for a realized gain of $11 million. Asset/investment income includes the gains and losses on private equity investments, income from insurance contracts, and lease residual gains and losses. Other noninterest income is comprised of asset-related gains, equity investment income, net economic value payments, and other transactions. Asset-related gains include loan and real estate dispositions. Equity investment income primarily reflects the Company's proportionate share of the income from its investment in Wing Hang Bank Limited. Other income primarily includes low income housing, other investments and various miscellaneous revenues. The breakdown among these four categories is shown below: Other Noninterest Income (In millions) 1Q07 4Q06 1Q06 - ------------------------------- ------- ------- ------- Asset-related gains $ 12 $ 19 $ 34 Equity investment income 13 11 11 Net economic value payments 25 23 - Other 1 (1) (2) ------- ------- ------- Other noninterest income $ 51 $ 52 $ 43 ======= ======= ======= Other noninterest income decreased versus fourth quarter of 2006 reflecting lower asset-related gains. The first quarter 2007 results include net economic value payments of $25 million compared with $23 million in the fourth quarter of 2006 on corporate trust deposits that have not yet transitioned to the Company's balance sheet. The first quarter of 2006 included pre-tax gain of $31 million related to the conversion of the Company's New York Stock Exchange seats into cash and shares of NYSE Group, Inc. common stock. The fourth quarter 2006 results include a $6 million loss related to low-income housing investments. 8 Net Interest Income - ------------------- Continuing Operations - ---------------------

Net interest income and net interest margin increased from the first quarter of 2006 reflecting higher deposit balances associated with the Acquired Corporate Trust Business, as well as higher amounts of interest-earning assets and interest-free balances and the greater value of interest-free balances in a higher rate environment. The sequential-quarter decrease in net interest income and net interest margin was driven by a lower volume of low cost deposits associated with the securities servicing business and fewer days in the quarter. Net interest margin was 2.18% in the first quarter of 2007, compared with 1.95% in the first quarter of 2006 and 2.27% in the fourth quarter of 2006. Net interest income does not reflect the impact of certain deposits of the Acquired Corporate Trust Business which are expected to transition to the Company's balance sheet in the second quarter of 2007. Pro forma for the inclusion of these deposits and the associated economic value on these deposits, the net interest margin would have been approximately 2%. 9 Noninterest Expense and Income Taxes - ------------------------------------ Continuing Operations - ---------------------

Noninterest expense was up compared with the first quarter of 2006 and down on a sequential-quarter basis. The decline in sequential quarter expenses reflects strong expense discipline across many of the Company's businesses. * The decrease in staff expense reflects lower incentive compensation and pension expenses. Staff expense is comprised of: - compensation expense, which includes * base salary expense, primarily driven by headcount, * the cost of temporary help and overtime, and * severance expense; - incentive expense, which includes * additional compensation earned under a wide range of sales commission plans and incentive plans designed to reward a combination of individual, business unit and corporate performance versus goals, and * stock option expense; and - employee benefit expense, primarily medical benefits, payroll taxes, pension and other retirement benefits. * The increase in net occupancy primarily reflects the conversion of AIB/BNY Securities Servicing (Ireland) Ltd. ("AIB/BNY") to a wholly-owned subsidiary. 10 * The fourth quarter of 2006's amortization of intangibles included a $6 million impairment charge related to the write-off of customer intangibles. * Other expense included transition services expense and other costs related to the Acquired Corporate Trust Business of $21 million in the current quarter and $22 million in the fourth quarter of 2006. * Merger and integration expense in the first quarter of 2007 included $11 million related to the Acquired Corporate Trust Business and $4 million related to the anticipated merger with Mellon. The purchase of the Acquired Corporate Trust Business and the remaining 50% of AIB/BNY joint venture, along with the disposition of certain execution businesses in the BNY ConvergEx transaction, significantly impacts comparisons of the first quarter of 2007 to the first quarter of 2006. The net impact of these transactions was to increase staff expense, net occupancy, business development, professional, legal, and other purchased services, amortization of intangibles, and other expense. The BNY ConvergEx transaction also resulted in lower clearing expenses. The effective tax rate for the first quarter of 2007 was 32.2%, compared to 32.7% in the first quarter of 2006 and 31.4% in the fourth quarter of 2006. The decrease from the first quarter of 2006 primarily reflects foreign sales corporation benefits for certain leverage leases. The sequential quarter increase reflects lower Section 29 tax credits related to synthetic fuel. The Company's effective tax rate in the future is expected to be impacted by the price of oil, which determines the amount of synthetic fuel tax credits (Section 29 of the Internal Revenue Code) it will receive. These credits relate to investments that produce alternative fuel from coal byproducts. To manage its exposure in 2007 to the risk of an increase in oil prices that could reduce synthetic fuel tax credits, the Company entered into an option contract covering a specified number of barrels of oil that settles at the end of 2007. The option contract economically hedges a portion of the Company's projected 2007 synthetic fuel tax credit benefit. The contract does not qualify for hedge accounting and, as a result, changes in the fair value of the option will be recorded currently in trading income. The Company may enter into further option contracts to protect against fluctuations in oil prices. At March 31, 2007, the Company assumed a $73 average price per barrel after March 31, 2007 to estimate the 2007 benefit from synthetic fuel credits. To the extent the average oil price differs from this assumption, the table below shows the estimated effect on earnings per share ("EPS") for 2007.

If the 2007 annual average price per barrel of oil were to go below $64 or above $78, there would be no additional EPS effect. 11 Credit Loss Provision and Net Charge-Offs - ----------------------------------------- (In millions) 1Q07 4Q06 1Q06 ------- ------- ------- Provision $ (15) $ (15) $ - ======= ======= ======= Net (charge-offs)/recoveries: Commercial $ 3 $ (23) $ 2 Foreign - (1) 2 ------- ------- ------- Total net (charge-offs)/recoveries $ 3 $ (24) $ 4 ======= ======= ======= The provision for credit losses for the first quarter of 2007 was a credit of $15 million, compared with zero in the first quarter of 2006 and a credit of $15 million in the fourth quarter of 2006 reflecting continuing high credit quality. The Company recorded a net recovery of $3 million in the first quarter of 2007, compared with a net recovery of $4 million in the first quarter of 2006 and a net charge-off of $24 million in the fourth quarter of 2006. The first quarter of 2007 reflects a $7 million recovery related to leased aircraft that were sold. During the fourth quarter of 2006, the Company sold $38 million of domestic airline leasing exposure resulting in a charge-off of $23 million. 12 BUSINESS SEGMENT REVIEW Segment Data The Company has an internal information system that produces performance data for its three business segments along product and service lines. Business Segments Accounting Principles The Company's segment data has been determined on an internal management basis of accounting, rather than the generally accepted accounting principles used for consolidated financial reporting. These measurement principles are designed so that reported results of the segments will track their economic performance. Segment results are subject to restatement whenever improvements are made in the measurement principles or when organizational changes are made. The Company continuously updates segment information for changes that occur in the management of its businesses. In the first quarter of 2007, in connection with the anticipated merger with Mellon, business segment reporting was realigned to reflect the planned new business structure of the combined company. In addition, several allocation methodologies were also revised to achieve greater harmonization with Mellon's methodologies. All prior periods have been restated to reflect these revisions. It is anticipated that most remaining allocation methodologies will be harmonized during the second quarter of 2007. The Company now provides segment data for three segments with the Asset and Wealth Management Segment and Institutional Services Segment being further divided into business groupings. These segments are shown below: * Asset and Wealth Management Segment - Asset Management Business - Wealth Management Business * Institutional Services Segment - Asset Servicing Business - Clearing & Execution Services Business - Issuer Services Business - Treasury Services Business * Other Segment On October 1, 2006, the Company sold substantially all of the assets of its Retail Business. Specific segment accounting principles employed include: * Revenue amounts reflect fee revenues generated by each segment. * Revenues and expenses associated with specific client bases are included in those segments. For example, foreign exchange activity associated with clients using custody products is allocated to Asset Servicing Business within the Institutional Services Segment (which includes the Company's custody operations.) * Balance sheet assets and liabilities and their related income or expense are specifically assigned to each segment. Previously segments with a net liability position would have also been allocated assets from the securities portfolio. * Net interest income is allocated to segments based on the yields on the assets and liabilities generated by each segment. The Company employs a funds transfer pricing system that match funds the specific assets and liabilities of each segment based on their interest sensitivity and maturity characteristics. * The measure of revenues and profit or loss by a segment has been adjusted to present segment data on a tax equivalent basis. 13 * The provision for credit losses is allocated to segments based on changes in each segment's credit risk during the period. Previously the provision for credit losses was based on management's judgment as to average credit losses that would have been incurred in the operations of the segment over a credit cycle of a period of years. * Support and other indirect expenses are allocated to segments based on internally-developed methodologies. * Goodwill and intangibles are reflected within individual business segments. * The business segment information is reported on a continuing operations basis for all periods presented. * The operations of the Acquired Corporate Trust Business are included only from October 1, 2006, the date on which it was acquired. DESCRIPTION OF BUSINESS SEGMENTS The activities within each business segment are described below. Asset and Wealth Management Segment - ----------------------------------- Asset Management Business - ------------------------- Asset Management provides investment solutions predominately to institutional investors around the world applying a broad spectrum of investment strategies. Asset Management's alternative strategies have expanded to include funds of hedge funds, private equity, alternative fixed income, and real estate. The Company's asset management subsidiaries include: * Ivy Asset Management Corporation, one of the country's leading fund of hedge funds firms, offers a comprehensive range of multi- manager hedge fund products and customized portfolio solutions. * Alcentra offers sophisticated alternative credit investments, including leveraged loans and subordinated and distressed debt. * Urdang, a real estate investment firm, offers the opportunity to invest in real estate through separate accounts, a closed-end commingled fund that invests directly in properties, and a separate account that invests in publicly-traded real estate investment trusts. * Estabrook Capital Management LLC offers value-oriented investment management strategies, including socially responsible investing. * Gannett, Welsh & Kotler specializes in tax-exempt securities management and equity portfolio strategies. The Company also provides investment management services directly to institutions and manages the "Hamilton" family of mutual funds. Wealth Management Business - -------------------------- In this business, the Company offers a full array of investment management, wealth management, and comprehensive financial management services to help individuals plan, invest, and arrange intergenerational wealth transition, which includes financial and estate planning, trust and fiduciary services, customized banking services, and brokerage and investment solutions. Clients include predominately high-net-worth individuals, families, family offices, charitable gift programs, endowments, foundations, professionals, and entrepreneurs. 14 Institutional Services Segment - ------------------------------ Asset Servicing Business - ------------------------ Asset Servicing includes global custody, global fund services, securities lending, global liquidity services, outsourcing, government securities clearance, collateral management, credit-related services, and other linked revenues, principally foreign exchange. Clients include corporate and public retirement funds, foundations and global financial institution including banks, broker-dealers, investment managers, insurance companies, and mutual funds. The Company is one of the leading asset service companies with $13.8 trillion of Assets under Custody and Administration at March 31, 2007. The Company is one of the largest mutual fund custodians for U.S. funds and one of the largest providers of fund services in the world with over $2.0 trillion in total assets. The Company also services more than 45% of the exchange-traded funds in the United States, and is a leading U.K. custodian. In securities lending, the Company is one of the largest lenders of U.S. Treasury securities and depositary receipts with a lending pool of approximately $1.8 trillion in 27 markets around the world. The Company clears approximately 50% of transactions in U.S. Government securities. The Company is a leader in global clearance, clearing equity and fixed income transactions in 101 markets. With $1.5 trillion in tri-party balances worldwide, the Company is a leading collateral management agent. Clearing & Execution Services Business - -------------------------------------- The Company's Clearing & Execution Services Business consists of its Pershing clearing business, its 35% equity interest in BNY ConvergEx Group and the Company's B-Trade and G-Trade businesses, which are expected to become part of the BNY ConvergEx Group in 2008. The BNY ConvergEx transaction changed the accounting from a fully consolidated subsidiary to a 35% equity interest recorded in other income. The Company's Pershing subsidiary provides clearing, execution, financing, and custody for introducing broker-dealers and registered investment advisors. Pershing services more than 1,150 retail and institutional financial organizations and independent investment advisors with more than five million active accounts. Through its affiliate, BNY ConvergEx Group, the Company provides execution solutions, investment technologies, commission management, research, transition management and wholesale and outsourcing solutions in over 90 global markets, executing 553 million shares each day and clearing more than 1.3 million trades daily. In execution services, the Company provides broker-assisted and electronic trading services. The Company's execution services business is one of the largest global institutional agency brokerage organizations. In addition, it is one of the leading institutional electronic brokers for non-U.S. dollar equity execution. Issuer Services Business - ------------------------ Issuer Services includes corporate trust, depositary receipts, employee investment plan services, and stock transfer. In Issuer Services, the Company is depositary for more than 1,270 American and global depositary receipt programs, with a 64% market share, servicing leading companies from 62 countries. As the world's largest trustee, the Company provides diverse services for corporate, municipal, structured, and international debt securities. The Company serves as trustee for some 90,000 clients with more than $8 trillion in outstanding 15 debt securities. The Company is the third largest stock transfer agent in the United States, servicing more than 17 million shareowners. Employee Investment Plan Services has more than 120 clients with 650,000 employees in over 54 countries. Treasury Services Business - -------------------------- Treasury Services includes global payment services for corporate customers as well as lending and credit-related services. Corporate Global Payment Services offers leading-edge technology, innovative products, and industry expertise to help its clients optimize cash flow, manage liquidity, and make payments around the world in more than 90 different countries. The Company maintains a global network of branches, representative offices and correspondent banks to provide comprehensive payment services including funds transfer, cash management, trade services and liquidity management. The Company is one of the largest funds transfer banks in the U.S. transferring over $1.4 trillion daily via more than 150,000 wire transfers. The Company provides lending and credit-related services to large public and private corporations and financial institutions nationwide. Through BNY Capital Markets, Inc., the Company provides a broad range of capital markets services including syndicated loans, bond underwriting, and private placements of corporate debt and equity securities. For its credit services business overall, the Company's corporate lending strategy is to focus on those clients and industries that are major users of securities servicing and global payment services. Other Segment - ------------- The Other Segment primarily includes the Company's leasing operations, investing and funding operations, and corporate overhead. The tax equivalent adjustment on net interest income is eliminated in this segment. Noninterest income primarily reflects leasing, securities gains, and income from the sale of other corporate assets. Noninterest expenses include direct expenses supporting the leasing, investing, and funding activities as well as certain corporate overhead not directly attributable to the operations of the other segments. In addition, this segment includes expenses previously allocated to the Company's Retail and Middle Market Banking Segment that did not qualify for treatment as discontinued operations expense. 16 Market Data - -----------

Assets under management ("AUM") were $130 billion at March 31, 2007, compared with $113 billion at March 31, 2006, and $131 billion at December 31, 2006. The year-over-year increase in AUM primarily reflects the continued good growth across asset classes and strategies. Institutional clients represent 76% of AUM while individual clients equal 24%. At March 31, 2007, such assets were invested 32% in equities, 17% in fixed income, and 26% in alternative investments, with the remaining amount invested in liquid assets. Asset Management Business - ------------------------- Inc/(Dec) ------------------ 1Q07 vs. 1Q07 vs. (In millions) 1Q07 4Q06 3Q06 2Q06 1Q06 4Q06 1Q06 - ------------------- ------- ------- ------- ------- ------- -------- -------- Mutual funds $ 3 $ 3 $ 2 $ 3 $ 2 $ - $ 1 Institutional clients 68 72 64 61 55 (4) 13 Private clients 13 13 12 12 11 - 2 ------- ------- ------- ------- ------- Total asset management fees 84 88 78 76 68 (4) 16 Performance fees 14 18 3 7 7 (4) 7 Securities servicing fees - 1 1 1 1 (1) (1) Other 3 2 2 1 3 1 - ------- ------- ------- ------- ------- Total noninterest income 101 109 84 85 79 (8) 22 Net interest income 5 6 3 3 2 (1) 3 ------- ------- ------- ------- ------- Total revenue 106 115 87 88 81 (9) 25 Noninterest expense 65 72 57 54 49 (7) 16 ------- ------- ------- ------- ------- Income before taxes $ 41 $ 43 $ 30 $ 34 $ 32 (2) 9 ======= ======= ======= ======= ======= Average assets $ 1,387 $ 1,226 $ 1,082 $ 1,055 $ 925 161 462 Average deposits 61 98 86 92 105 (37) (44)
Income before taxes was up 28% to $41 million for the first quarter of 2007 from $32 million in the first quarter of 2006, and down 5% from $43 million in the fourth quarter of 2006. Noninterest income increased $22 million, or 28%, in the first quarter of 2007 compared with the first quarter of 2006 reflecting higher asset management fees from institutional clients. Performance fees were up reflecting strong results at two of the Company's alternative asset management subsidiaries, Ivy Asset Management and Alcentra. Noninterest income declined on a sequential-quarter basis reflecting lower performance fees. Net interest income increased $3 million compared with the first quarter of 2006, driven by higher interest-earning assets. On a sequential-quarter basis, the decline in net interest income reflects a lower spread on interest-earning assets. Average deposits were $0.1 billion in the first 18 quarter of 2007, first quarter of 2006 and fourth quarter of 2006. Average assets were $1.4 billion in the first quarter of 2007, compared with $0.9 billion in the first quarter of 2006 and $1.2 billion in the fourth quarter of 2006. Noninterest expense increased $16 million, or 33%, in the first quarter of 2007 compared with the first quarter of 2006 reflecting higher incentive compensation and outside help. The sequential-quarter decline in noninterest expense primarily reflects lower incentive compensation. Wealth Management Business - --------------------------
Inc/(Dec) ------------------ 1Q07 vs. 1Q07 vs. (In millions) 1Q07 4Q06 3Q06 2Q06 1Q06 4Q06 1Q06 - ------------------- ------- ------- ------- ------- ------- -------- -------- Securities servicing fees $ - $ - $ - $ - $ 1 $ - $ (1) Wealth management fees 50 48 46 50 49 2 1 Other 1 1 1 1 1 - - ------- ------- ------- ------- ------- Total noninterest income 51 49 47 51 51 2 - Net interest income 15 14 16 13 16 1 (1) ------- ------- ------- ------- ------- Total revenue 66 63 63 64 67 3 (1) Provision for credit losses - - - (2) - - - Noninterest expense 53 51 51 51 52 2 1 ------- ------- ------- ------- ------- Income before taxes $ 13 $ 12 $ 12 $ 15 $ 15 1 (2) ======= ======= ======= ======= ======= Average assets $ 1,448 $ 1,481 $ 1,503 $ 1,446 $ 1,525 (33) (77) Average deposits 1,052 1,003 1,039 1,021 1,042 49 10
Income before taxes was down 13% to $13 million for the first quarter of 2007 from $15 million in the first quarter of 2006, and was up 8% from $12 million in the fourth quarter of 2006. Total noninterest income was flat on a year-over-year basis. The sequential-quarter increase reflects growth in wealth management fees. Net interest income decreased $1 million, or 6%, compared with the first quarter of 2006, reflecting the decline in the spread on earning assets. Average deposits were $1.1 billion in the first quarter of 2007, compared with $1.0 billion in the first quarter of 2006 and $1.0 billion in the fourth quarter of 2006. Average assets were $1.4 billion in the first quarter of 2007, compared with $1.5 billion in the first quarter of 2006 and $1.5 billion in the fourth quarter of 2006. Noninterest expense increased $1 million, or 2%, in the first quarter of 2007 compared with the first quarter of 2006 primarily reflecting higher salaries, outside help and occupancy expense. The sequential-quarter increase reflects higher outsourcing partially offset by lower technology expense. 19 Institutional Services Segment - ------------------------------ Asset Servicing Business - ------------------------
Inc/(Dec) ------------------ 1Q07 vs. 1Q07 vs. (In millions) 1Q07 4Q06 3Q06 2Q06 1Q06 4Q06 1Q06 - ------------------- ------- ------- ------- ------- ------- -------- -------- Securities servicing fees $ 388 $ 350 $ 351 $ 371 $ 341 $ 38 $ 47 Foreign exchange 68 54 50 79 66 14 2 Other 15 17 23 21 17 (2) (2) ------- ------- ------- ------- ------- Total noninterest income 471 421 424 471 424 50 47 Net interest income 127 132 117 113 103 (5) 24 ------- ------- ------- ------- ------- Total revenue 598 553 541 584 527 45 71 Noninterest expense 424 410 400 399 383 14 41 ------- ------- ------- ------- ------- Income before taxes $ 174 $ 143 $ 141 $ 185 $ 144 31 30 ======= ======= ======= ======= ======= Average assets $10,610 $ 9,453 $ 8,641 $ 8,873 $ 7,418 1,157 3,192 Average deposits 24,648 24,335 24,115 23,937 21,748 313 2,900 Securities lending revenue 36 35 40 50 45 1 (9)
Income before taxes was up 21% to $174 million for the first quarter of 2007 from $144 million in the first quarter of 2006, and up 22% from $143 million in the fourth quarter of 2006. Total noninterest income increased $47 million, or 11%, in the first quarter of 2007 compared with the first quarter of 2006 driven by increased transaction volumes and organic growth across all business products, especially global custody, domestic and international mutual funds, exchange-traded funds, hedge fund servicing and collateral management. European asset servicing continues to gain momentum with strong first quarter revenue growth across all products, again reflective of the significant cross-border investment interest and capital flow. In addition, the Company benefited from the conversion of AIB/BNY to a wholly-owned subsidiary in the fourth quarter of 2006. Securities lending revenue was flat on a sequential-quarter basis and down from the first quarter of 2006 as increased volumes were more than offset by the exceptionally tight spread between the Treasury repo rate and Fed funds rate. In hedge fund services during the quarter, the Company surpassed the $100 billion mark in assets under administration. In broker-dealer services, the continued adoption of tri-party repo arrangements remains a key driver. The growth in global clearance was due to new business wins and increased volume from existing clients. The Company now handles approximately $1.5 trillion of financing for the Company's broker-dealer clients daily through collateralized financing agreements, up approximately 18% from a year ago. Foreign exchange revenue increased on a sequential-quarter basis consistent with higher market volatility and volumes in late February and early March. Foreign exchange results were up from the first quarter of 2006 reflecting greater cross-border flows. Net interest income increased $24 million compared with the first quarter of 2006, primarily driven by deposit growth coupled with the higher value of deposits in a rising rate environment. The sequential- quarter decline is due to a lower spread on interest-earning foreign deposits. Average deposits were $24.6 billion in the first quarter of 2007, compared with $21.7 billion in the first quarter of 2006 and $24.3 billion in the fourth quarter of 2006. The growth in deposits reflects greater customer activity in the Company's asset servicing businesses. Average assets were $10.6 billion in the first quarter of 2007, compared with $7.4 billion in the first quarter of 2006 and $9.5 billion in the fourth quarter of 2006. 20 Noninterest expense increased $41 million, or 11%, in the first quarter of 2007 compared with the first quarter of 2006 reflecting increased incentive compensation, salaries, outside help, sub-custodian fees, net occupancy expense, claims by customers and technology. The sequential-quarter increase is primarily due to increased claims by customers, salaries, outside help, net occupancy expense, and sub- custodian fees. Clearing & Execution Services Business - --------------------------------------
Inc/(Dec) ------------------ 1Q07 vs. 1Q07 vs. (In millions) 1Q07 4Q06 3Q06 2Q06 1Q06 4Q06 1Q06 - ------------------- ------- ------- ------- ------- ------- -------- -------- Securities servicing fees $ 286 $ 271 $ 293 $ 328 $ 332 $ 15 $ (46) Asset & wealth management 11 10 9 9 9 1 2 Foreign exchange and other trading activities 10 10 10 11 11 - (1) Other 6 10 19 7 34 (4) (28) ------- ------- ------- ------- ------- Total noninterest income 313 301 331 355 386 12 (73) Net interest income 59 62 58 54 53 (3) 6 ------- ------- ------- ------- ------- Total revenue 372 363 389 409 439 9 (67) Provision for credit losses - 2 - (4) (2) (2) 2 Noninterest expense 272 257 306 307 303 15 (31) ------- ------- ------- ------- ------- Income before taxes $ 100 $ 104 $ 83 $ 106 $ 138 (4) (38) ======= ======= ======= ======= ======= Average assets $16,363 $14,825 $16,363 $17,175 $17,381 1,538 (1,018) Average interest-bearing payables to customers and broker-dealers 4,747 4,683 4,657 5,034 5,231 64 (484)
Income before taxes was down 28% to $100 million for the first quarter of 2007 from $138 million in the first quarter of 2006, and down 4% from $104 million in the fourth quarter of 2006. The decline in results from the first quarter of 2006 reflects the $31 million gain related to the first quarter of 2006 conversion of the Company's New York Stock Exchange seats into cash and shares of the NYSE Group, Inc. common stock. Total noninterest income decreased $73 million, or 19%, in the first quarter of 2007 compared with the first quarter of 2006. Securities servicing fees declined reflecting the disposition of certain execution businesses in the BNY ConvergEx transaction. These businesses had revenues of $90 million in the first quarter of 2006. On a sequential-quarter basis, securities servicing fees were up $15 million, or 6%, reflecting solid performance at Pershing as well as the benefits of new business acquired. The decline in other from the first quarter of 2006 reflects the aforementioned NYSE Group, Inc. transaction. Net interest income increased $6 million, or 11%, compared with the first quarter of 2006, resulting from a higher spread on interest- earning assets in a rising rate environment. The sequential-quarter decline in net interest income reflects a lower spread on interest- earning assets. Average assets were $16.4 billion in the first quarter of 2007, compared with $17.4 billion in the first quarter of 2006 and $14.8 billion in the fourth quarter of 2006. Average interest-bearing payables to customers and broker-dealers were $4.7 billion in the first quarter of 2007, compared with $5.2 billion in the first quarter of 2006 and $4.7 billion in the fourth quarter of 2006. The decline from a year-ago quarter reflects loss of a significant customer at Pershing. Noninterest expense decreased $31 million, or 10%, in the first quarter of 2007 compared with the first quarter of 2006 reflecting lower 21 clearing expense, commissions, incentive compensation, and the disposition of certain execution businesses in the BNY ConvergEx transaction. The sequential-quarter increase in noninterest expense reflects higher incentive compensation, salaries, outside help and clearing expense. Issuer Services Business - ------------------------
Inc/(Dec) ------------------ 1Q07 vs. 1Q07 vs. (In millions) 1Q07 4Q06 3Q06 2Q06 1Q06 4Q06 1Q06 - ------------------- ------- ------- ------- ------- ------- -------- -------- Securities servicing fees $ 319 $ 340 $ 197 $ 209 $ 156 $ (21) $ 163 Other 37 31 8 11 9 6 28 ------- ------- ------- ------- ------- Total noninterest income 356 371 205 220 165 (15) 191 Net interest income 105 101 47 52 45 4 60 ------- ------- ------- ------- ------- Total revenue 461 472 252 272 210 (11) 251 Provision for credit losses - (1) 1 - - 1 - Noninterest expense 237 236 122 122 110 1 127 ------- ------- ------- ------- ------- Income before taxes $ 224 $ 237 $ 129 $ 150 $ 100 (13) 124 ======= ======= ======= ======= ======= Average assets $ 4,235 $ 3,988 $ 1,359 $ 1,316 $ 1,351 247 2,884 Average deposits 11,718 10,942 5,844 6,361 5,843 776 5,875
Income before taxes was up 124% to $224 million for the first quarter of 2007 from $100 million in the first quarter of 2006, and down 5% from $237 million in the fourth quarter of 2006. Total noninterest income increased $191 million, or 116%, in the first quarter of 2007 compared with the first quarter of 2006. Issuer services fees continued to exhibit strong growth in the first quarter compared with last year's first quarter. The Acquired Corporate Trust Business significantly impacts comparisons of the first quarter of 2007 to the first quarter of 2006. Corporate trust fees increased sequentially over the strong fourth quarter reflecting continued strong performance in global products and structured finance, notably asset- backed and mortgage-backed securities and CDOs. Depositary receipts had another quarter of double-digit growth and the Company continues to see strong underlying activity, particularly from emerging markets. On a sequential-quarter basis, depositary receipt fees declined consistent with normal seasonal patterns for corporate actions. Net interest income increased $60 million, or 133%, in the first quarter of 2007 compared with the first quarter of 2006, primarily resulting from the Acquired Corporate Trust Business. The sequential- quarter increase in net interest income was driven by higher value on both interest-bearing and noninterest-bearing deposits. Average deposits were $11.7 billion in the first quarter of 2007, compared with $5.8 billion in the first quarter of 2006 and $10.9 billion in the fourth quarter of 2006. The higher levels of deposits reflects the Acquired Corporate Trust Business as well as increased liquidity from the Company's other issuer services customers compared with 2006. Average assets were $4.2 billion in the first quarter of 2007, compared with $1.4 billion in the first quarter of 2006 and $4.0 billion in the fourth quarter of 2006. Noninterest expense increased $127 million, or 115%, in the first quarter of 2007 compared with the first quarter of 2006 reflecting the impact of the Acquired Corporate Trust Business and expenses associated with revenue growth in depositary receipts and corporate trust. The sequential-quarter increase reflects higher salaries, outside help and commissions offset by lower incentive compensation, outsourcing and sub-custodian fees. 22 Treasury Services Business - --------------------------
Inc/(Dec) ------------------ 1Q07 vs. 1Q07 vs. (In millions) 1Q07 4Q06 3Q06 2Q06 1Q06 4Q06 1Q06 - ------------------- ------- ------- ------- ------- ------- -------- -------- Global payment services $ 48 $ 50 $ 53 $ 50 $ 49 $ (2) $ (1) Financing-related fees 38 42 46 47 45 (4) (7) Other 46 40 42 59 41 6 5 ------- ------- ------- ------- ------- Total noninterest income 132 132 141 156 135 - (3) Net interest income 94 99 96 97 95 (5) (1) ------- ------- ------- ------- ------- Total revenue 226 231 237 253 230 (5) (4) Provision for credit losses (3) (7) (3) 7 8 4 (11) Noninterest expense 117 117 115 120 111 - 6 ------- ------- ------- ------- ------- Income before taxes $ 112 $ 121 $ 125 $ 126 $ 111 (9) 1 ======= ======= ======= ======= ======= Average assets $17,003 $16,615 $16,680 $16,279 $15,521 388 1,482 Average deposits 13,576 14,529 12,707 12,261 11,873 (953) 1,703
Income before taxes was up 1% to $112 million for the first quarter of 2007 from $111 million in the first quarter of 2006, and down 7% from $121 million in the fourth quarter of 2006. Total noninterest income decreased $3 million, or 2%, in the first quarter of 2007 compared with the first quarter of 2006. Global payment services fees were down $1 million from the first quarter of 2006 and $2 million from the fourth quarter of 2006 as more clients used compensating balances to pay for services. Financing-related fees declined sequentially and from the first quarter of 2006 reflecting a lower level of credit-related fees. Other income increased sequentially and from a year-ago quarter reflecting higher foreign exchange and other trading income. Net interest income decreased slightly compared with the first quarter of 2006. The sequential-quarter decrease reflects a lower spread on trading assets and lower volume of noninterest-bearing deposits. Average deposits were $13.6 billion in the first quarter of 2007, compared with $11.9 billion in the first quarter of 2006 and $14.5 billion in the fourth quarter of 2006. Average assets were $17.0 billion in the first quarter of 2007, compared with $15.5 billion in the first quarter of 2006 and $16.6 billion in the fourth quarter of 2006. Noninterest expense increased $6 million, or 5%, in the first quarter of 2007 compared with the first quarter of 2006 reflecting higher salaries and outside help. 23 Other Segment - -------------
Inc/(Dec) ------------------ 1Q07 vs. 1Q07 vs. (In millions) 1Q07 4Q06 3Q06 2Q06 1Q06 4Q06 1Q06 - ------------------- ------- ------- ------- ------- ------- -------- -------- Noninterest income $ 51 $ 58 $ 31 $ 32 $ 25 $ (7) $ 26 Net interest income 22 37 14 26 25 (15) (3) ------- ------- ------- ------- ------- Total revenue 73 95 45 58 50 (22) 23 Provision for credit losses (12) (9) (2) (2) (6) (3) (6) Noninterest expense 104 142 145 85 61 (38) 43 ------- ------- ------- ------- ------- Income before taxes $ (19) $ (38) $ (98) $ (25) $ (5) 19 (14) ======= ======= ======= ======= ======= Average assets $50,929 $54,499 $49,951 $50,249 $47,710 (3,570) 3,219 Average deposits 7,701 8,147 10,794 10,205 10,761 (446) (3,060)
Income before taxes was a loss of $19 million for the first quarter of 2007, compared with a loss of $5 million in the first quarter of 2006, and a loss of $38 million in the fourth quarter of 2006. The loss in the first quarter of 2007 and fourth quarter of 2006 reflected $11 million and $17 million of merger and integration costs associated with the Acquired Corporate Trust Business. Total noninterest income increased $26 million, or 104%, in the first quarter of 2007 compared with the first quarter of 2006 reflecting higher gains in the sponsor fund portfolio and transition services income. The sequential-quarter decline reflects lower gains in the sponsor fund portfolio. Net interest income decreased slightly compared with the first quarter of 2006. The sequential-quarter decline in net interest income reflects certain leasing adjustments recorded in the fourth quarter of 2006. Average deposits were $7.7 billion in the first quarter of 2007, compared with $10.8 billion in the first quarter of 2006 and $8.1 billion in the fourth quarter of 2006. Average assets were $50.9 billion in the first quarter of 2007, compared with $47.7 billion in the first quarter of 2006 and $54.5 billion in the fourth quarter of 2006. Provision for credit losses was a credit of $12 million in the first quarter of 2007, compared with a credit of $6 million in the first quarter of 2006 and a credit of $9 million the fourth quarter of 2006. Noninterest expense includes unallocated corporate overhead, nonrecurring items including merger and integration costs, and certain expenses previously allocated to the Retail and Middle Market Banking Segment that are not included in the businesses sold to JPMorgan Chase. Noninterest expense increased $43 million, or 70%, in the first quarter of 2007 compared with the first quarter of 2006 primarily reflecting merger and integration costs, consulting expense, compensation and benefits. The sequential-quarter decline primarily reflects lower incentive compensation. Other items - The tax equivalent adjustment is eliminated in the Other Segment. Certain revenue and expense items have been driven by corporate decisions and have been included in the Other Segment. In the first quarter of 2007 and fourth quarter of 2006, these included merger and integration costs of $11 million and $17 million associated with the Acquired Corporate Trust Business. 24 Segment Financial Data The consolidating schedule below shows the contribution of the Company's businesses to its overall profitability.
(Dollars in millions) Subtotal Subtotal For the Quarter Asset & Clearing & Institut- Total Ended Asset Wealth Wealth Asset Execution Issuer Treasury ional Continuing March 31, 2007 Management Management Management Servicing Services Services Services Services Other Operations - --------------- ---------- ---------- --------- --------- -------- -------- -------- ---------- ----- ---------- Noninterest income $ 101 $ 51 $ 152 $ 471 $ 313 $ 356 $ 132 $ 1,272 $ 51 $ 1,475 Net interest income 5 15 20 127 59 105 94 385 22 427 --------- -------- -------- ------- -------- -------- -------- ---------- ----- ---------- Total revenue 106 66 172 598 372 461 226 1,657 73 1,902 Provision for credit losses - - - - - - (3) (3) (12) (15) Noninterest expense 65 53 118 424 272 237 117 1,050 104 1,272 --------- -------- -------- ------- -------- -------- -------- ---------- ----- ---------- Income before taxes $ 41 $ 13 $ 54 $ 174 $ 100 $ 224 $ 112 $ 610 $ (19) $ 645 ========= ======== ======== ======= ======== ======== ======== ========== ===== ========== Operating margin (1) 39% 20% 31% 29% 27% 49% 50% 37% Average assets $ 1,387 $ 1,448 $ 2,835 $10,610 $ 16,363 $ 4,235 $ 17,003 $ 48,211 $50,929 $ 101,975(2)

(Dollars in millions) Subtotal Subtotal For the Quarter Asset & Clearing & Institut- Total Ended Asset Wealth Wealth Asset Execution Issuer Treasury ional Continuing December 31, 2006 Management Management Management Servicing Services Services Services Services Other Operations - ----------------- ---------- ---------- --------- --------- -------- -------- -------- ---------- ----- ---------- Noninterest income $ 109 $ 49 $ 158 $ 421 $ 301 $ 371 $ 132 $ 1,225 $ 58 $ 1,441 Net interest income 6 14 20 132 62 101 99 394 37 451 --------- -------- -------- ------- -------- -------- -------- ---------- ----- ---------- Total revenue 115 63 178 553 363 472 231 1,619 95 1,892 Provision for credit losses - - - - 2 (1) (7) (6) (9) (15) Noninterest expense 72 51 123 410 257 236 117 1,020 142 1,285 --------- -------- -------- ------- -------- -------- -------- ---------- ----- ---------- Income before taxes $ 43 $ 12 $ 55 $ 143 $ 104 $ 237 $ 121 $ 605 $ (38) $ 622 ========= ======== ======== ======= ======== ======== ======== ========== ===== ========== Operating margin (1) 37% 19% 31% 26% 29% 50% 52% 37% Average assets $ 1,226 $ 1,481 $ 2,707 $ 9,453 $ 14,825 $ 3,988 $ 16,615 $ 44,881 $54,499 $ 102,087(2)

(Dollars in millions) Subtotal Subtotal For the Quarter Asset & Clearing & Institut- Total Ended Asset Wealth Wealth Asset Execution Issuer Treasury ional Continuing September 30, 2006 Management Management Management Servicing Services Services Services Services Other Operations - ------------------ ---------- ---------- --------- --------- -------- -------- -------- ---------- ----- ---------- Noninterest income $ 84 $ 47 $ 131 $ 424 $ 331 $ 205 $ 141 $ 1,101 $ 31 $ 1,263 Net interest income 3 16 19 117 58 47 96 318 14 351 --------- -------- -------- ------- -------- -------- -------- ---------- ----- ---------- Total revenue 87 63 150 541 389 252 237 1,419 45 1,614 Provision for credit losses - - - - - 1 (3) (2) (2) (4) Noninterest expense 57 51 108 400 306 122 115 943 145 1,196 --------- -------- -------- ------- -------- -------- -------- ---------- ----- ---------- Income before taxes $ 30 $ 12 $ 42 $ 141 $ 83 $ 129 $ 125 $ 478 $ (98) $ 422 ========= ======== ======== ======= ======== ======== ======== ========== ===== ========== Operating margin (1) 34% 19% 28% 26% 21% 51% 53% 34% Average assets $ 1,082 $ 1,503 $ 2,585 $ 8,641 $ 16,363 $ 1,359 $ 16,680 $ 43,043 $49,951 $ 95,579(2)
25
(Dollars in millions) Subtotal Subtotal For the Quarter Asset & Clearing & Institut- Total Ended Asset Wealth Wealth Asset Execution Issuer Treasury ional Continuing June 30, 2006 Management Management Management Servicing Services Services Services Services Other Operations - ------------------ ---------- ---------- --------- --------- -------- -------- -------- ---------- ----- ---------- Noninterest income $ 85 $ 51 $ 136 $ 471 $ 355 $ 220 $ 156 $ 1,202 $ 32 $ 1,370 Net interest income 3 13 16 113 54 52 97 316 26 358 --------- -------- -------- ------- -------- -------- -------- ---------- ----- ---------- Total revenue 88 64 152 584 409 272 253 1,518 58 1,728 Provision for credit losses - (2) (2) - (4) - 7 3 (2) (1) Noninterest expense 54 51 105 399 307 122 120 948 85 1,138 --------- -------- -------- ------- -------- -------- -------- ---------- ----- ---------- Income before taxes $ 34 $ 15 $ 49 $ 185 $ 106 $ 150 $ 126 $ 567 $ (25) $ 591 ========= ======== ======== ======= ======== ======== ======== ========== ===== ========== Operating margin (1) 39% 23% 32% 32% 26% 55% 50% 37% Average assets $ 1,055 $ 1,446 $ 2,501 $ 8,873 $ 17,175 $ 1,316 $ 16,279 $ 43,643 $50,249 $ 96,393(2)

(Dollars in millions) Subtotal Subtotal For the Quarter Asset & Clearing & Institut- Total Ended Asset Wealth Wealth Asset Execution Issuer Treasury ional Continuing March 31, 2006 Management Management Management Servicing Services Services Services Services Other Operations - ------------------ ---------- ---------- --------- --------- -------- -------- -------- ---------- ----- ---------- Noninterest income $ 79 $ 51 $ 130 $ 424 $ 386 $ 165 $ 135 $ 1,110 $ 25 $ 1,265 Net interest income 2 16 18 103 53 45 95 296 25 339 --------- -------- -------- ------- -------- -------- -------- ---------- ----- ---------- Total revenue 81 67 148 527 439 210 230 1,406 50 1,604 Provision for credit losses - - - - (2) - 8 6 (6) - Noninterest expense 49 52 101 383 303 110 111 907 61 1,069 --------- -------- -------- ------- -------- -------- -------- ---------- ----- ---------- Income before taxes $ 32 $ 15 $ 47 $ 144 $ 138 $ 100 $ 111 $ 493 $ (5) $ 535 ========= ======== ======== ======= ======== ======== ======== ========== ===== ========== Operating margin (1) 40% 22% 32% 27% 31% 48% 48% 35% Average assets $ 925 $ 1,525 $ 2,450 $ 7,418 $ 17,381 $ 1,351 $ 15,521 $ 41,671 $47,710 $ 91,831(2) (1) Income before taxes divided by total revenue. (2) Including average assets of discontinued operations of $66 million, $51 million, $13,285 million, $13,993 million, and $14,302 million for the quarters ended March 31, 2007, December 31, 2006, September 30, 2006, June 30, 2006 and March 31, 2006, consolidated average assets were $102,041 million, $102,138 million, $108,864 million, $110,386 million and $106,133 million for the quarters ended March 31, 2007, December 31, 2006, September 30, 2006, June 30, 2006, and March 31, 2006.
26 CRITICAL ACCOUNTING POLICIES The Company's significant accounting policies are described in the "Notes to Consolidated Financial Statements" under "Summary of Significant Accounting and Reporting Policies" in the Company's 2006 Annual Report on Form 10-K. Four of the Company's more critical accounting policies are those related to the allowance for credit losses, the valuation of derivatives and securities where quoted market prices are not available, goodwill and other intangibles, and pension accounting. Allowance for Credit Losses - --------------------------- The allowance for credit losses and allowance for lending-related commitments consist of four elements: (1) an allowance for impaired credits; (2) an allowance for higher risk rated loans and exposures; (3) an allowance for pass rated loans and exposures; and (4) an unallocated allowance based on general economic conditions and certain risk factors in the Company's individual portfolio and markets. Further discussion on the four elements can be found under "Consolidated Balance Sheet Review" in the MD&A section. The allowance for credit losses represents management's estimate of probable losses inherent in the Company's credit portfolio. This evaluation process is subject to numerous estimates and judgments. Probability of default ratings are assigned after analyzing the credit quality of each borrower/counterparty and the Company's internal ratings are generally consistent with external ratings agency's default databases. Loss given default ratings are driven by the collateral, structure, and seniority of each individual asset and are consistent with external loss given default/recovery databases. The portion of the allowance related to impaired credits is based on the present value of future cash flows. Changes in the estimates of probability of default, risk ratings, loss given default/recovery rates, and cash flows could have a direct impact on the allocated allowance for loan losses. To the extent actual results differ from forecasts or management's judgment, the allowance for credit losses may be greater or less than future charge-offs. The Company considers it difficult to quantify the impact of changes in forecast on its allowance for credit losses. Nevertheless, the Company believes the following discussion may enable investors to better understand the variables that drive the allowance for credit losses. A key variable in determining the allowance is management's judgment in determining the size of the unallocated allowance. At March 31, 2007, the unallocated allowance was 27% of the total allowance. If the unallocated allowance were five percent higher or lower, the allowance would have increased or decreased by $21 million, respectively. The credit rating assigned to each credit is another significant variable in determining the allowance. If each credit were rated one grade better, the allowance would have decreased by $72 million, while if each credit were rated one grade worse, the allowance would have increased by $123 million. Similarly, if the loss given default were one rating worse, the allowance would have increased by $34 million, while if the loss given default were one rating better, the allowance would have decreased by $42 million. For impaired credits, if the fair value of the loans were 10% higher or lower, the allowance would have decreased or increased by $1 million, respectively. 27 Valuation of Derivatives and Securities Where Quoted Market Prices Are Not - -------------------------------------------------------------------------- Available --------- When quoted market prices are not available for derivatives and securities values, such values are determined at fair value, which is defined as the value at which positions could be closed out or sold in a transaction with a willing counterparty over a period of time consistent with the Company's trading or investment strategy. Fair value for these instruments is determined based on discounted cash flow analysis, comparison to similar instruments, and the use of financial models. Financial models use as their basis independently-sourced market parameters including, for example, interest rate yield curves, option volatilities, and currency rates. Discounted cash flow analysis is dependent upon estimated future cash flows and the level of interest rates. Model-based pricing uses inputs of observable prices for interest rates, foreign exchange rates, option volatilities and other factors. Models are benchmarked and validated by independent parties. The Company's valuation process takes into consideration factors such as counterparty credit quality, liquidity and concentration concerns. The Company applies judgment in the application of these factors. In addition, the Company must apply judgment when no external parameters exist. Finally, other factors can affect the Company's estimate of fair value including market dislocations, incorrect model assumptions, and unexpected correlations. These valuation methods could expose the Company to materially different results should the models used or underlying assumptions be inaccurate. See "Use of Estimates" in "Summary of Significant Accounting and Reporting Policies" of the Notes to Consolidated Financial Statement in the Company's 2006 Annual Report on Form 10-K. To assist in assessing the impact of a change in valuation, at March 31, 2007, approximately $1.9 billion of the Company's portfolio of securities and derivatives is not priced based on quoted market prices because no such quoted market prices are available. A change of 2.5% in the valuation of these securities and derivatives would result in a change in pre-tax income of $49 million. Goodwill and Other Intangibles - ------------------------------ The Company records all assets and liabilities acquired in purchase acquisitions, including goodwill, indefinite-lived intangibles, and other intangibles, at fair value as required by FASB Statements No. 141 and No. 142 ("SFAS 141" and "SFAS 142"), "Business Combinations" and "Goodwill and Other Intangible Assets." Goodwill ($5,131 million at March 31, 2007) and indefinite-lived intangible assets ($370 million at March 31, 2007) are not amortized but are subject to annual tests for impairment or more often if events or circumstances indicate they may be impaired. Other intangible assets are amortized over their estimated useful lives and are subject to impairment if events or circumstances indicate a possible inability to realize the carrying amount. The initial recording of goodwill, indefinite-lived intangibles, and other intangibles requires subjective judgments concerning estimates of the fair value of acquired assets. The goodwill impairment test is performed in two phases. The first step of the goodwill impairment test compares the fair value of the reporting unit with its carrying amount, including goodwill. If the fair value of the reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired; however, if the carrying amount of the reporting unit exceeds its fair value, an additional procedure must be performed. That additional procedure compares the implied fair value of the reporting unit's goodwill with the carrying amount of that goodwill. An impairment loss is recorded to the extent that the carrying amount of goodwill exceeds its implied fair value. Indefinite-lived intangible assets are evaluated for impairment at least annually by comparing their fair value to their carrying value. Other intangible assets ($1,077 million at March 31, 2007) are evaluated for impairment if events and circumstances indicate a possible impairment. Such evaluation of other intangible assets is based on undiscounted cash flow projections. The Company 28 recorded a $6 million impairment charge in 2006 related to the write-off of customer intangibles in Europe. Fair value may be determined using: market prices, comparison to similar assets, market multiples, discounted cash flow analysis and other determinates. Estimated cash flows may extend far into the future and, by their nature, are difficult to determine over an extended timeframe. Factors that may significantly affect the estimates include, among others, competitive forces, customer behaviors and attrition, changes in revenue growth trends, cost structures and technology, and changes in discount rates and specific industry or market sector conditions. Other key judgments in accounting for intangibles include useful life and classification between goodwill and indefinite-lived intangibles or other intangibles that require amortization. See Note "Goodwill and Intangibles" in the Notes to Consolidated Financial Statements for additional information regarding intangible assets. To assist in assessing the impact of a goodwill, indefinite-lived intangibles, or other intangible asset impairment charge, at March 31, 2007, the Company has $6.6 billion of goodwill, indefinite-lived intangibles, and other intangible assets. The impact of a 5% impairment charge would result in reduction in pre-tax income of approximately $329 million. Pension Accounting - ------------------ The Company has defined benefit pension plans covering approximately 14,200 U.S. employees and approximately 2,750 non-US employees. The Company has three defined benefit pension plans in the U.S. and six overseas. The U.S. plans account for 77% of the projected benefit obligation. Pension expense was $38 million in 2006, compared with $26 million in 2005 and a pension credit of $24 million in 2004. In addition to its pension plans, the Company also has an Employee Stock Ownership Plan ("ESOP") which may provide additional benefits to certain employees. Upon retirement, covered employees are entitled to the higher of their benefit under the ESOP or the defined benefit plan. If the benefit is higher under the defined benefit plan, the employees' ESOP account is contributed to the pension plan. A number of key assumption and measurement date values determine pension expense. The key elements include the long-term rate of return on plan assets, the discount rate, the market-related value of plan assets, and for the primary U.S. plan the price used to value stock in the ESOP. Since 2004, these key elements have varied as follows:
2007 2006 2005 2004 -------- -------- -------- -------- (Dollars in millions, except per share amounts) Domestic plans: Long-term rate of return on plan assets 8.00% 7.88% 8.25% 8.75% Discount rate 6.00 5.88 6.00 6.25 Market-related value of plan assets(1) $ 1,352 $ 1,324 $ 1,502 $ 1,523 ESOP stock price(1) 34.85 30.46 30.67 27.88 Net U.S. pension credit/ (expense) $ (26) $ (17) $ 31 All other pension credit/ (expense) (12) (9) (7) -------- -------- -------- Total pension credit/ (expense)(2) $ (38) $ (26) $ 24 ======== ======== ======== (1) Actuarially smoothed data. See "Summary of Significant Accounting and Reporting Policies" in Notes to Consolidated Financial Statements in the 2006 Annual Report on Form 10-K. (2) Pension benefits expense includes discontinued operations expense of $6 million in 2006, 2005, and 2004.
29 The discount rate for U.S. pension plans was determined after reviewing a number of high quality long-term bond indices whose yields were adjusted to match the duration of the Company's pension liability. The Company also reviewed the results of several models that matched bonds to the Company's pension cash flows. The various indices and models produced discount rates ranging from 5.91% to 6.10%. After reviewing the various indices and models the Company selected a discount rate of 6.00%. The discount rates for foreign pension plans are based on high quality corporate bonds rates in countries that have an active corporate bond market. In those countries with no active corporate bond market, discount rates are based on local government bond rates plus a credit spread. The Company's expected long-term rate of return on plan assets is based on anticipated returns for each asset class. For 2007 and 2006, the assumptions for the long-term rates of return on plan assets were 8.00% and 7.88%, respectively. Anticipated returns are weighted for the target allocation for each asset class. Anticipated returns are based on forecasts for prospective returns in the equity and fixed-income markets, which should track the long-term historical returns for these markets. The Company also considers the growth outlook for U.S. and global economies, as well as current and prospective interest rates. The market-related value of plan assets also influences the level of pension expense. Differences between expected and actual returns are recognized over five years to compute an actuarially derived market-related value of plan assets. In 2006, the market-related value of plan assets declined as the extraordinary actual return in 2000 was replaced with a more modest return. The market-related value of plan assets grew slightly for 2007 as the pension fund earned more normal returns. Unrecognized actuarial gains and losses are amortized over the future service period (11 years) of active employees if they exceed a threshold amount. The Company currently has unrecognized losses which are being amortized. For 2006, U.S. pension expense increased by $9 million reflecting changes in assumptions, the amortization of unrecognized pension losses, and a decline in the market-related value of plan assets, partly offset by a switch to the computation of benefits from final average pay to career average pay. U.S. pension expense is expected to decline approximately $30 million in 2007 primarily due to employees working longer and the Pension Protection Act of 2006. The annual impacts on the primary U.S. plan of hypothetical changes in the key elements on the pension expense are shown in the tables below.
(Dollars in millions, Increase in Decrease in except per share amounts) Pension Expense 2007 Base Pension Expense --------------- ------------- --------------- Long-term rate of return on plan assets 7.00% 7.50% 8.00% 8.50% 9.00% Change in pension expense $ 18.4 $ 9.2 N/A $ 9.2 $ 18.4 Discount rate 5.50% 5.75% 6.00% 6.25% 6.50% Change in pension expense $ 11.8 $ 5.8 N/A $ 5.7 $ 11.2 Market-related value of plan assets -20.00% -10.00% $1,352 +10.00% +20.00% Change in pension expense $ 50.6 $ 25.3 N/A $ 25.2 $ 46.9 ESOP stock price $24.85 $29.85 $34.85 $39.85 $44.85 Change in pension expense $ 14.5 $ 7.0 N/A $ 6.5 $ 12.5
30 CONSOLIDATED BALANCE SHEET REVIEW Total assets were $99.8 billion at March 31, 2007, compared with $103.6 billion at March 31, 2006 and $103.4 billion at December 31, 2006. The decrease in assets from March 31, 2006 primarily reflects the sale of the Retail Business and decline in trading assets partly offset by increases in short-term high quality interest-bearing deposits in banks and loans to financial institutions. Total shareholders' equity was $11.5 billion at March 31, 2007, compared with $10.1 billion at March 31, 2006 and $11.6 billion at December 31, 2006. On a continuing operations basis, return on average common equity for the first quarter of 2007 was 15.70%, (16.06% excluding merger and integration costs) compared with 14.75% in the first quarter of 2006 and 14.95% in the fourth quarter of 2006 (15.36% excluding merger and integration costs). On a continuing operations basis, return on average assets for the first quarter of 2007 was 1.73%, (1.78% excluding merger and integration costs) compared with 1.50% in the first quarter of 2006 and 1.66% in the fourth quarter of 2006 (1.70% excluding merger and integration costs). Investment Securities - --------------------- The table below shows the distribution of the Company's securities portfolio:
Investment securities (at fair value) (In millions) 3/31/07 12/31/06 ---------- ---------- Fixed income securities: Mortgage-backed securities $ 20,890 $ 17,785 Asset-backed securities 436 464 Corporate debt 284 256 Short-term money market instruments 522 531 U.S. treasury securities 86 86 U.S. government agencies 673 673 State and political subdivisions 82 88 Emerging market debt (collateralized by U.S. treasury zero coupon obligations) 116 116 Other foreign debt 10 10 ---------- ---------- Subtotal fixed income securities 23,099 20,009 Equity securities: Money market or fixed income funds 504 1,032 Other 78 46 ---------- ---------- Subtotal equity securities 582 1,078 ---------- ---------- Total investment securities $ 23,681 $ 21,087 ========== ==========
Total investment securities were $23.7 billion at March 31, 2007, compared with $27.1 billion at March 31, 2006, and $21.1 billion at December 31, 2006. Average investment securities were $22.4 billion in the first quarter of 2007, compared with $23.2 billion in the first quarter of 2006 and $20.7 billion in the fourth quarter of 2006. The Company's portfolio of highly rated mortgage-backed securities are 86% rated AAA, 10% AA, and 4% A. In replacing securities that mature or are paid off, the Company has been adding either adjustable or short life classes of structured mortgage-backed securities, both of which have short durations. The effective duration of the Company's mortgage portfolio at March 31, 2007 was approximately 1.74 years. Unrealized net loss on securities available-for-sale was $1 million at March 31, 2007, compared with unrealized net losses of $195 million at March 31, 2006, and no unrealized net gain or loss at December 31, 2006. The asymmetrical accounting treatment of the impact of a change in interest rates 31 on the Company's balance sheet may create a situation in which an increase in interest rates can adversely affect reported equity and regulatory capital, even though economically there may be no impact on the economic capital position of the Company. For example, an increase in rates will result in a decline in the value of the fixed-rate portion of the Company's fixed income investment portfolio, which will be reflected through a reduction in other comprehensive income in the Company's shareholders' equity, thereby affecting the tangible common equity ("TCE") ratio. Under current accounting rules, there is no corresponding change in value of the Company's fixed-rate liabilities, even though economically these liabilities are more valuable as rates rise. Loans - -----
(In billions) Quarterly Period End Average ------------------------- ------------------------- Total Non-Margin Margin Total Non-Margin Margin ----- ---------- ------ ----- ---------- ------ March 31, 2007 $38.3 $33.2 $5.1 $36.0 $30.6 $5.4 December 31, 2006 37.8 32.7 5.1 35.3 30.1 5.2 March 31, 2006 32.2 26.9 5.3 31.8 26.1 5.7
Total loans were $38.3 billion at March 31, 2007, compared with $37.8 billion at December 31, 2006. The increase in total loans from December 31, 2006 primarily reflects increased lending to financial institutions. Average total loans were $36.0 billion in the first quarter of 2007, compared with $31.8 billion in the first quarter of 2006. The increase in average loans from March 31, 2006 results from increased lending to financial institutions and purchases of residential mortgage loans. The following tables provide additional details on the Company's credit exposures and outstandings for continuing operations at March 31, 2007 in comparison to December 31, 2006. Overall Loan Portfolio - ----------------------
March 31, 2007 December 31, 2006 ---------------------------- ---------------------------- Unfunded Total Unfunded Total (In billions) Loans Commitments Exposure Loans Commitments Exposure ---------------------------- ---------------------------- Financial institutions $ 18.3 $ 27.1 $ 45.4 $ 17.4 $ 27.5 $ 44.9 Corporate 4.2 20.0 24.2 4.1 19.8 23.9 -------- -------- -------- -------- -------- -------- 22.5 47.1 69.6 21.5 47.3 68.8 -------- -------- -------- -------- -------- -------- Consumer 4.3 0.5 4.8 4.3 0.5 4.8 Leasing financings 4.9 0.1 5.0 5.5 0.1 5.6 Commercial real estate 1.5 1.2 2.7 1.4 1.4 2.8 Margin loans 5.1 - 5.1 5.1 - 5.1 -------- -------- -------- -------- -------- -------- Total $ 38.3 $ 48.9 $ 87.2 $ 37.8 $ 49.3 $ 87.1 ======== ======== ======== ======== ======== ========
32 Financial Institutions - ---------------------- The financial institutions portfolio exposure was $45.4 billion at March 31, 2007, compared to $44.9 billion at December 31, 2006. The increase in exposure from year-end 2006 reflects greater activity in the capital markets in the first quarter of 2007, which drove increased demands for credit from financial institutions. These exposures are of high quality with 87% meeting the investment grade criteria of the Company's rating system. These exposures are generally short-term, with 77% expiring within one year and are frequently secured. For example, mortgage banking, securities industry, and investment managers often borrow against marketable securities held in custody at the Company. The diversity of the portfolio is shown in the accompanying table:
(In billions) March 31, 2007 December 31, 2006 --------------------------------------- --------------------------- Unfunded Total %Inv %due Unfunded Total Lending Division Loans Commitments Exposures Grade <1 Yr Loans Commitments Exposures - ------------------- ----- ----------- --------- ----- ----- ----- ----------- --------- Banks $ 7.2 $ 5.4 $ 12.6 73% 86% $ 5.7 $ 5.5 $ 11.2 Securities industry 5.5 4.7 10.2 86 96 6.0 5.4 11.4 Insurance 0.4 6.0 6.4 100 43 0.6 6.1 6.7 Government 0.1 7.2 7.3 100 64 0.1 6.7 6.8 Asset managers 4.8 2.0 6.8 86 86 4.7 1.9 6.6 Mortgage banks 0.2 0.7 0.9 72 49 0.2 0.7 0.9 Endowments 0.1 1.1 1.2 100 59 0.1 1.2 1.3 ----- ----------- --------- ----- ----- ----- ----------- --------- Total $18.3 $ 27.1 $ 45.4 87% 77% $17.4 $ 27.5 $ 44.9 ===== =========== ========= ===== ===== ===== =========== =========
Corporate - --------- The corporate portfolio exposure increased to $24.2 billion at March 31, 2007 from $23.9 billion at year-end 2006. Approximately 75% of the portfolio is investment grade while 15% of the portfolio matures within one year.
(In billions) March 31, 2007 December 31, 2006 --------------------------------------- --------------------------- Unfunded Total %Inv %due Unfunded Total Lending Division Loans Commitments Exposures Grade <1 Yr Loans Commitments Exposures - ------------------- ----- ----------- --------- ----- ----- ----- ----------- --------- Media $ 0.9 $ 1.7 $ 2.6 73% 6% $ 1.2 $ 2.0 $ 3.2 Cable 0.2 0.3 0.5 74 - 0.2 0.4 0.6 Telecom - 0.4 0.4 85 - - 0.3 0.3 ----- ----------- -------- ------ ----------- --------- Subtotal 1.1 2.4 3.5 74 5 1.4 2.7 4.1 Energy 0.7 5.2 5.9 83 6 0.6 5.0 5.6 Retailing 0.1 2.8 2.9 88 41 0.1 2.3 2.4 Automotive (1) 0.1 1.0 1.1 56 35 0.1 1.0 1.1 Healthcare 0.4 1.5 1.9 80 11 0.5 1.8 2.3 Other (2) 1.8 7.1 8.9 67 14 1.4 7.0 8.4 ----- ----------- --------- ----- ----- ----- ----------- --------- Total $ 4.2 $ 20.0 $ 24.2 75% 15% $ 4.1 $ 19.8 $ 23.9 ===== =========== ========= ===== ===== ===== =========== ========= (1) During the third quarter of 2005, the Company eliminated the Automotive division and transferred the customers to the other geographic lending divisions. The amounts in the table were constructed for analytical purposes. (2) Diversified portfolio of industries and geographies.
The Company continues to seek to selectively reduce automotive exposures given ongoing weakness in the domestic automotive industry. Total exposures reported in the Automotive Division were down $11 million at March 31, 2007 compared with December 31, 2006. At March 31, 2007, this broadly defined industry portfolio consisted of exposures of $188 million to Big Three automotive manufacturing companies, $158 million to finance subsidiaries, $378 million to highly rated asset-backed securitization vehicles, $246 million to suppliers, and $141 million of other. The Company's exposure to the airline industry, at March 31, 2007, consisted of a $294 million leasing portfolio, including a $17 million real estate lease exposure. At March 31, 2007, the airline-leasing portfolio 33 consisted of $91 million to major U.S. carriers, $141 million to foreign airlines and $62 million to U.S. regionals. During the first quarter of 2007, the airline industry continued to face difficult operating conditions. The industry's excess capacity and higher oil prices continued to have a dampening effect on aircraft values in the secondary market. Because of these factors, the Company continues to maintain a sizable allowance for loan losses against these exposures and to closely monitor the portfolio. Counterparty Risk Ratings Profile - --------------------------------- The table below summarizes the risk ratings of the Company's foreign exchange and interest rate derivative counterparty credit exposure for the past year. For the Quarter Ended -------------------------------------------------- Rating(1) 3/31/07 12/31/06 9/30/06 6/30/06 3/31/06 - --------------------- -------------------------------------------------- AAA to AA- 75% 76% 77% 77% 77% A+ to A- 13 12 10 10 8 BBB+ to BBB- 6 6 7 6 9 Noninvestment Grade 6 6 6 7 6 -------- --------- ---------- --------- ---------- Total 100% 100% 100% 100% 100% ======== ========= ========== ========= ========== (1) Represents credit rating agency equivalent of internal credit ratings. Nonperforming Assets - --------------------
Change Percent 3/31/2007 vs. Inc/ (Dollars in millions) 3/31/2007 12/31/2006 12/31/2006 (Dec) --------- ---------- ----------- ------- Loans: Commercial $ 18 $ 28 $ (10) (36)% Foreign 9 9 - - --------- ---------- ----------- Total nonperforming loans 27 37 (10) (27) Other assets owned 2 1 1 100 --------- ---------- ----------- Total nonperforming assets $ 29 $ 38 $ (9) (24) ========= ========== =========== Nonperforming assets ratio 0.1% 0.1% Allowance for loan losses/nonperforming loans 1,074.1 775.7 Allowance for loan losses/nonperforming assets 1,000.0 755.3 Total allowance for credit losses/nonperforming loans 1,574.1 1,181.1 Total allowance for credit losses/nonperforming assets 1,465.5 1,150.0
The sequential-quarter decrease in nonperforming assets primarily reflects a paydown of a loan to an auto parts supplier. 34 Activity in Nonperforming Assets
(In millions) Quarter End Quarter End March 31, 2007 December 31, 2006 ------------------ ------------------ Balance at beginning of period $ 38 $ 38 Additions 10 8 Charge-offs - (2) Paydowns/Sales (19) (6) ------------------ ------------------ Balance at end of period $ 29 $ 38 ================== ==================
Interest income would have been increased by $0.5 million and $0.4 million for the first quarters of 2007 and 2006 if loans on nonaccrual status at March 31, 2007 and 2006 had been performing for the entire period. Impaired Loans - -------------- The table below sets forth information about the Company's impaired loans. The Company uses the discounted cash flow, collateral value, or market price methods for valuing its impaired loans:
March 31, December 31, March 31, (In millions) 2007 2006 2006 ------------ ------------ ----------- Impaired loans with an allowance $ 17 $ 8 $ 17 Impaired loans without an allowance(1) - 19 - ------------ ------------ ----------- Total impaired loans $ 17 $ 27 $ 17 ============ ============ =========== Allowance for impaired loans(2) $ 2 $ 1 $ 4 Average balance of impaired loans during the quarter 25 22 17 Interest income recognized on impaired loans during the quarter 0.1 0.5 - (1) When the discounted cash flows, collateral value or market price equals or exceeds the carrying value of the loan, then the loan does not require an allowance under the accounting standard related to impaired loans. (2) The allowance for impaired loans is included in the Company's allowance for credit losses.
35 Allowance - ---------
March 31, December 31, March 31, (Dollars in millions) 2007 2006 2006 ------------ ------------ ------------ Margin loans $ 5,133 $ 5,167 $ 5,312 Non-margin loans 33,156 32,626 26,879 ------------ ------------ ------------ Total loans $ 38,289 $ 37,793 $ 32,191 ============ ============ ============ Allowance for loan losses $ 290 $ 287 $ 334 Allowance for lending-related commitments 135 150 140 ------------ ------------ ------------ Total allowance for credit losses $ 425 $ 437 $ 474 ============ ============ ============ Allowance for loan losses as a percent of total loans 0.76% 0.76% 1.04% Allowance for loan losses as a percent of non-margin loans 0.87 0.88 1.24 Total allowance for credit losses as a percent of total loans 1.11 1.16 1.47 Total allowance for credit losses as a percent of non-margin loans 1.28 1.34 1.76
The total allowance for credit losses was $425 million, or 1.11% of total loans at March 31, 2007, compared with $474 million, or 1.47% of total loans at March 31, 2006 and $437 million, or 1.16% of total loans at December 31, 2006. The decline in the allowance from the first quarter of 2006 reflects the continued strong credit quality of the Company's loan portfolio. The Company has $5.1 billion of secured margin loans on its balance sheet at March 31, 2007. The Company has rarely suffered a loss on these types of loans and does not allocate any of its allowance for credit losses to these loans. As a result, the Company believes the ratio of total allowance for credit losses to non-margin loans is a more appropriate metric to measure the adequacy of the reserve. The ratio of the total allowance for credit losses to non-margin loans was 1.28% at March 31, 2007, compared with 1.76% at March 31, 2006 and 1.34% at December 31, 2006, reflecting improvement in the credit quality since the first quarter of 2006. The ratio of the allowance for loan losses to nonperforming assets was 1,000% at March 31, 2007, compared with 1,336% at March 31, 2006, and 755.3% at December 31, 2006. The allowance for loan losses and the allowance for lending-related commitments consists of four elements: (1) an allowance for impaired credits (nonaccrual commercial credits over $1 million), (2) an allowance for higher risk rated credits, (3) an allowance for pass rated credits, and (4) an unallocated allowance based on general economic conditions and risk factors in the Company's individual markets. The first element, impaired credits, is based on individual analysis of all nonperforming commercial credits over $1 million. The allowance is measured by the difference between the recorded value of impaired loans and their fair value. Fair value is either the present value of the expected future cash flows from borrower, the market value of the loan, or the fair value of the collateral. The second element, higher risk rated credits, is based on the assignment of loss factors for each specific risk category of higher risk credits. The Company rates each credit in its portfolio that exceeds $1 million and assigns the credits to specific risk pools. A potential loss factor is assigned to each pool, and an amount is included in the allowance equal to the product of the amount of the loan in the pool and the risk factor. Reviews of higher risk 36 rated loans are conducted quarterly and the loan's rating is updated as necessary. The Company prepares a loss migration analysis and compares its actual loss experience to the loss factors on an annual basis to attempt to ensure the accuracy of the loss factors assigned to each pool. The third element, pass rated credits, is based on the Company's expected loss model. Borrowers are assigned to pools based on their credit ratings. The expected loss for each loan in a pool incorporates the borrower's credit rating, loss given default rating and maturity. The credit rating is dependent upon the borrower's probability of default. The loss given default incorporates a recovery expectation. Borrower ratings are reviewed semi-annually at a minimum and are periodically mapped to third party, including rating agency and default and recovery, data bases to ensure ongoing consistency and validity. Commercial loans over $1 million are individually analyzed before being assigned a credit rating. The Company also applies this technique to its leasing and consumer portfolios. The fourth element, the unallocated allowance, is based on management's judgment regarding the following factors: * Economic conditions including duration of the current cycle; * Past experience including recent loss experience; * Credit quality trends; * Collateral values; * Volume, composition, and growth of the loan portfolio; * Specific credits and industry conditions; * Results of bank regulatory and internal credit exams; * Actions by the Federal Reserve Board; * Delay in receipt of information to evaluate loans or confirm existing credit deterioration; and * Geopolitical issues and their impact on the economy. Based on an evaluation of these four elements, including individual credits, historical credit losses, and global economic factors, the Company has allocated its allowance for credit losses on a continuing operations basis as follows:
March 31, December 31, 2007 2006 ------------ ----------- Domestic Real Estate 2% 2% Commercial 64 67 Consumer 6 6 Foreign 1 2 Unallocated 27 23 ------------ ----------- 100% 100% ============ ===========
Such an allocation is inherently judgmental, and the entire allowance for credit losses is available to absorb credit losses regardless of the nature of the loss. The unallocated allowance increase in the first quarter of 2007 reflects various factors in the current credit environment, including potential spillover into other credit markets from the distress in the sub- prime mortgage markets. 37 Deposits - -------- Total deposits were $59.0 billion at March 31, 2007, compared with $50.8 billion at March 31, 2006, and $62.1 billion at December 31, 2006. The increase from March 31, 2006 was primarily due to growth in the securities servicing businesses and the Acquired Corporate Trust Business. The sequential-quarter decline was primarily due to lower customer activity levels, which resulted in a reduced level of customer deposits at quarter end. Noninterest-bearing deposits were $17.3 billion at March 31, 2007, compared with $19.5 billion at December 31, 2006. Interest-bearing deposits were $41.7 billion at March 31, 2007, compared with $42.6 billion at December 31, 2006. LIQUIDITY The Company maintains its liquidity through the management of its assets and liabilities, utilizing worldwide financial markets. The diversification of liabilities reflects the Company's efforts to maintain flexibility of funding sources under changing market conditions. Stable core deposits from the Company's securities servicing businesses and asset management and wealth management businesses are generated through the Company's diversified network and managed with the use of trend studies and deposit pricing. The use of derivative products such as interest rate swaps and financial futures enhances liquidity by enabling the Company to issue long-term liabilities with limited exposure to interest rate risk. Liquidity also results from the maintenance of a portfolio of assets which can be easily sold and the monitoring of unfunded loan commitments, thereby reducing unanticipated funding requirements. Liquidity is managed on both a consolidated basis and at The Bank of New York Company, Inc. parent company ("Parent"). On a continuing operations basis, non-core sources of funds such as money market rate accounts, certificates of deposits greater than $100,000, federal funds purchased, and other borrowings were $12.7 billion and $13.6 billion on an average basis for the first three months of 2007 and 2006. Average foreign deposits, primarily from the Company's European-based securities servicing business, were $33.6 billion and $30.2 billion for the first three months of 2007 and 2006. The increase in foreign deposits reflects greater liquidity from the Company's corporate trust and custody businesses. Domestic savings and other time deposits were $1.0 billion on an average basis for the first three months of 2007 compared to $1.4 billion in 2006. Average payables to customers and broker-dealers decreased to $4.7 billion from $5.2 billion in 2006. The decline in payables to customers and broker-dealers primarily reflects lower customer balances and loss of a significant customer at Pershing. Long-term debt averaged $8.9 billion and $8.0 billion for the first three months of 2007 and 2006, respectively. The increase in long-term debt reflects the building of liquidity to pay debt maturing in 2007. A significant reduction in the Company's securities servicing businesses would reduce its access to deposits. Noninterest-bearing deposits increased to $14.9 billion from $10.1 billion in the first quarter of 2006, reflecting organic growth in securities servicing businesses and the acquisition of the Acquired Corporate Trust Business. The Company's transaction with JPMorgan Chase altered the composition of the balance sheet. When the Acquired Corporate Trust Business is fully integrated in 2007, approximately $14 billion of U.S. dollar retail deposits will have been replaced with between $11 billion and $14 billion of institutional corporate trust deposits. Between $7 billion and $10 billion of deposits related to the Acquired Corporate Trust Business have not yet transitioned to the Company. These deposits will transition to the Company as regulatory approval is received to operate in certain foreign locations and as the novation process proceeds in other foreign locations. The Company expects the transition will be substantially complete by June 30, 2007. Until the transition is complete, JPMorgan Chase will pay the Company for the net economic value of these deposits. In the first quarter of 2007, the Company recorded $25 million of net economic value payments in noninterest income. On the asset side of the balance sheet, approximately $8 billion of retail and 38 middle market loans sold to JPMorgan Chase have been replaced with liquid assets and securities. The Parent has four major sources of liquidity: dividends from its subsidiaries, the commercial paper market, a revolving credit agreement with third party financial institutions, and access to the capital markets. At March 31, 2007, the Bank can pay dividends of approximately $888 million to the Parent without the need for regulatory waiver. This dividend capacity would increase in the remainder of 2007 to the extent of the Bank's net income less dividends. Nonbank subsidiaries of the Parent have liquid assets of approximately $244 million. These assets could be liquidated and the proceeds delivered by dividend or loan to the Parent. For the quarter ended March 31, 2007, the Parent's quarterly average commercial paper borrowings were $133 million compared with $447 million in 2006. At March 31, 2007, the Parent had cash of $2,097 million, compared with $685 million at March 31, 2006 and $908 million at December 31, 2006. Net of commercial paper outstanding, the Parent's cash position at March 31, 2007 increased by $1,506 million compared with March 31, 2006. The Parent has been increasing cash in anticipation of the repayment of long- term debt that matures in the next twelve months. On October 10, 2006, the Company entered into a new credit agreement of $250 million with 11 financial institutions. The fee on this facility depends on the Company's credit rating and is currently six basis points. The credit agreement requires the Company to maintain: shareholders' equity of $5 billion; a ratio of Tier 1 capital plus the allowance for credit losses to nonperforming assets of at least 2.5; a double leverage ratio less than 1.3; and adequate capitalization of all its banks for regulatory purposes. This line of credit matures in October 2011. There were no borrowings under this line of credit at March 31, 2007. The Company also has the ability to access the capital markets. Access to the capital markets is partially dependent on the Company's credit ratings, which as of April 30, 2007 were as follows:
The Bank of Parent Parent Parent Senior New York Commercial Subordinated Long-Term Long-Term Paper Long-Term Debt Debt Deposits Outlook ---------- -------------- ------------- ----------- ------- Standard & Poor's A-1 A A+ AA- Stable Moody's P-1 Aa3 Aa2 Aaa Stable Fitch F1+ A+ AA- AA Positive Dominion Bond Rating Service R-1(middle) A(high) AA(low) AA Stable
Moody's upgraded the Company's senior debt ratings for the Bank from Aa2 to Aaa in March 2007 and for the Parent from Aa3 to Aa2 in April 2007. The Parent's major uses of funds are payment of dividends, principal and interest on its borrowings, acquisitions, and additional investment in its subsidiaries. The Parent has $700 million of long-term debt that becomes due in 2007 subsequent to March 31, 2007 and $1,450 million of long-term debt that is due in 2008. The Company has $250 million of subordinated debt that became callable and steps up to a higher interest rate in 2007 and $400 million of subordinated debt that became callable and steps up to a higher interest rate in 2008. The Company expects that it will call this debt when the interest rate steps up. In addition, the Parent periodically has the option to call $339 million of subordinated debt in 2007, which it will call and refinance if market conditions are favorable. The Parent expects to refinance any debt it repays by issuing a combination of senior and subordinated debt. 39 The Company has $800 million of preferred trust securities that are callable in 2007. These securities qualify as Tier 1 Capital. All of the Company's preferred trust securities are swapped to floating rate. The Company has not yet decided if it will call these securities. The decision to call will be based on interest rates, the availability of cash and capital, and regulatory conditions. If the Company calls the preferred trust securities, it expects to replace them with new preferred trust securities or senior or subordinated debt. See discussion of qualification of preferred trust securities as capital in "Capital Resources." Double leverage is the ratio of investment in subsidiaries divided by the Company's consolidated equity plus preferred trust securities. The Company's double leverage ratio at March 31, 2007 and 2006 was 101.34% and 106.36%, respectively. The Company's target double leverage ratio is a maximum of 120%. The double leverage ratio is monitored by regulators and rating agencies and is an important constraint on the Company's ability to invest in its subsidiaries to expand its businesses. Pershing LLC, an indirect subsidiary of the Company, has committed and uncommitted lines of credit in place for liquidity purposes. The committed line of credit of $500 million with four financial institutions matures in March 2008. Average daily borrowing under these lines was $4 million, in aggregate, during the first quarter of 2007. Pershing LLC has three separate uncommitted lines of credit amounting to $1 billion in aggregate. Average daily borrowing under these lines was $9 million, in aggregate, during the first quarter of 2007. Pershing Limited, an indirect U.K.-based subsidiary of the Company, has committed and uncommitted lines in place for liquidity purposes. The committed lines of credit of $275 million with four financial institutions matures in March 2008. There were no borrowings against this line of credit during the first quarter of 2007. Pershing Limited has three separate uncommitted lines of credit amounting to $300 million in aggregate. Average daily borrowing under these lines was $107 million, in aggregate, during the first quarter of 2007. The following comments relate to the information disclosed in the Consolidated Statements of Cash Flows. Cash provided by operating activities was $2.0 billion for the first three months of 2007, compared with $0.5 billion provided by operating activities through March 31, 2006. The source of funds in 2007 was principally due to trading activities and net income. The source of funds in 2006 was principally due to the changes in accruals and other and net income. In the first three months of 2007, cash provided by investing activities was $0.3 billion as compared to cash used for investing activities in the first three months of 2006 of $1.0 billion. In the first three months of 2007, changes in federal funds sold and securities purchased under resale agreements and paydowns of securities available-for- sale were a significant source of funds. Significant uses of funds in 2006 were purchases of securities available-for-sale and changes in federal funds sold and securities purchased under resale agreements. Through March 31, 2007, cash used for financing activities was $3.0 billion, compared to $0.4 billion provided by financing activities in the first three months of 2006. In the first three months of 2007, deposits were a significant use of funds. Primary sources of funds in 2006 included deposits and net proceeds from the issuance of long-term debt. 40 CAPITAL RESOURCES Shareholders' equity was $11,527 million at March 31, 2007, compared with $10,101 million at March 31, 2006, and $11,593 million at December 31, 2006. During the first quarter of 2007, the Company retained $266 million of earnings. Capital was also impacted by after-tax adjustments related to FSP FAS 13-2 of $389 million and FIN 48 of $27 million. In April 2007, the Company declared a quarterly common stock dividend of 22 cents per share. In the first quarter of 2007, the Company issued $55 million of callable medium-term subordinated notes bearing interest at rates from 5.60% to 5.85%. The notes are due in 2022 and 2032 and are callable by the Company after three to five years. The notes qualify as Tier 2 capital. In the first quarter of 2007, the Company also issued $750 million of five-year senior holding company debt. The issuance consisted of $500 million at a floating rate of LIBOR plus 10 basis points and $250 million at a fixed rate tranche at five-year treasuries plus 57 basis points. Regulators establish certain levels of capital for bank holding companies and banks, including the Company and the Bank, in accordance with established quantitative measurements. For the Parent to maintain its status as a financial holding company, the Bank must, among other things, qualify as well capitalized. In addition, major bank holding companies such as the Parent are expected by the regulators to be well capitalized. As of March 31, 2007 and 2006, the Company and the Bank were considered well capitalized on the basis of the ratios (defined by regulation) of Total and Tier 1 capital to risk-weighted assets and leverage (Tier 1 capital to average assets), which are shown as follows:
March 31, 2007 March 31, 2006 Well Adequately ------------------ ------------------ Company Capitalized Capitalized Company Bank Company Bank Targets Guidelines Guidelines --------- ------- --------- ------- ---------- ----------- ----------- Tier 1 (1) 8.43% 8.43% 8.28% 9.14% 8.00% 6% 4% Total capital (2) 12.81 11.70 12.44 12.07 10 8 Leverage 6.80 6.95 6.51 7.26 5 3-5 Tangible common equity 5.31 5.92 5.52 6.67 5.00 Adjusted tangible common equity (3) 5.47 6.11 5.54 6.70 N.A. N.A. (1) Tier 1 capital consists, generally, of common equity, preferred trust securities (subject to limitations in 2009), and certain qualifying preferred stock, less goodwill and most other intangibles. (2) Total Capital consists of Tier 1 capital plus Tier 2 capital. Tier 2 capital consists, generally, of certain qualifying preferred stock and subordinated debt and a portion of the loan loss allowance. (3) Adjusted for deferred tax liabilities associated with non-tax deductible identifiable intangible assets.
In a non-taxable business combination, such as the Company's planned merger with Mellon, deferred tax liabilities are recorded in relation to identifiable intangible assets. The recording of this deferred tax liability results in an increase in goodwill equal to the amount of the liability. Bank regulators and some rating agencies and analysts adjust equity upward for the amount of this deferred tax liability since it is a liability for accounting purposes and will never require a cash settlement. As a result, the Company believes Tier 1 and adjusted TCE should be its primary capital metrics. The Tier 1 and adjusted TCE ratios vary depending on the size of the balance sheet at quarter-end and the impact of interest rates on unrealized gains and losses among other factors. The balance sheet size fluctuates from quarter to quarter based on levels of customer and market activity. In general, when servicing clients are more actively trading securities, deposit balances and the balance sheet as a whole, are higher to finance these activities. For quarter-ends in 2007, the size of the balance sheet will depend on the novation of deposits and the receipt of approval to open new subsidiaries related to the Acquired Corporate Trust Business and the anticipated merger with Mellon. 41 The Company's Tier 1 capital and Total Capital ratios were 8.43% and 12.81% at March 31, 2007, compared with 8.28% and 12.44% at March 31, 2006, and 8.19% and 12.49% at December 31, 2006. The leverage ratio was 6.80% at March 31, 2007, compared with 6.51% at March 31, 2006, and 6.67% at December 31, 2006. The Company's TCE as a percentage of total assets was 5.31% at March 31, 2007, compared with 5.52% at March 31, 2006, and 5.13% at December 31, 2006. The Company's adjusted TCE as a percentage of total assets was 5.47% at March 31, 2007, compared with 5.54% at March 31, 2006, and 5.30% at December 31, 2006. Certain accounting charges in the first quarter of 2007 reduced the Company's Tier 1 and adjusted TCE ratios to 8.43% and 5.47%. A billion dollar change in risk-weighted assets changes the Tier 1 ratio by 11 basis points while a $100 million change in common equity changes the Tier 1 ratio by 13 basis points. A billion dollar change in assets changes the adjusted TCE ratio by 6 basis points while a $100 million change in common equity changes the adjusted TCE ratio by 11 basis points. At March 31, 2007, the Company has $1,150 million of trust preferred securities outstanding. On March 1, 2005, the Board of Governors of the Federal Reserve System (the "FRB") adopted a final rule that allows the continued limited inclusion of trust preferred securities in the Tier 1 capital of bank holding companies (BHCs). Under the final rule, the Company will be subject to a 15 percent limit in the amount of trust preferred securities that can be included in Tier 1 capital, net of goodwill, less any related deferred tax liability. Amounts in excess of these limits will continue to be included in Tier 2 capital. The final rule provides a five- year transition period, ending March 31, 2009, for application of quantitative limits. Under the transition rules and the final rules, the Company expects all its trust preferred securities to continue to qualify as Tier 1 capital. Both the Company and the Bank are expected to remain "well capitalized" under the final rule. The following table presents the components of the Company's risk- based capital at March 31, 2007 and 2006:
March 31, ------------------ (In millions) 2007 2006 ------- ------- Shareholders' equity $11,527 $10,101 Trust preferred securities 1,150 1,150 Adjustments: Goodwill and intangibles (6,421) (4,741) Other 248 88 ------- ------- Tier 1 capital 6,504 6,598 ------- ------- Qualifying unrealized equity security gains 4 7 Qualifying subordinated debt 2,946 2,745 Qualifying allowance for loan losses 425 566 ------- ------- Tier 2 capital 3,375 3,318 ------- ------- Total risk-based capital $ 9,879 $ 9,916 ======= ======= Total risk-adjusted assets $77,130 $79,697 ======= =======
42 TRADING ACTIVITIES The fair value and notional amounts of the Company's financial instruments held for trading purposes at March 31, 2007 and 2006 are as follows:
March 31, 2007 1Q07 Average --------------------------- ------------------ (In millions) Notional Fair Value Fair Value ------------------ ------------------ Trading Account Amount Assets Liabilities Assets Liabilities - --------------- -------- ------ ----------- ------ ----------- Interest rate contracts: Futures and forward contracts $ 63,886 $ - $ - $ - $ - Swaps 341,824 1,329 905 1,486 1,071 Written options 208,423 - 631 - 684 Purchased options 191,279 181 - 190 - Foreign exchange contracts: Swaps 2,457 - - - - Written options 10,593 - 113 - 113 Purchased options 11,151 55 - 72 - Commitments to purchase and sell foreign exchange 125,099 297 267 410 390 Debt securities - 1,607 167 2,747 216 Credit derivatives 1,899 5 6 3 9 Equities 20,956 195 180 260 323 Commodities & other derivatives 268 6 1 4 1 ------ ----------- ------ ----------- Total trading account $3,675 $ 2,270 $5,172 $ 2,807 ====== =========== ====== ===========

March 31, 2006 1Q06 Average --------------------------- ------------------ (In millions) Notional Fair Value Fair Value ------------------ ------------------ Trading Account Amount Assets Liabilities Assets Liabilities - --------------- -------- ------ ----------- ------ ----------- Interest rate contracts: Futures and forward contracts $ 98,606 $ 32 $ - $ 9 $ - Swaps 261,730 1,416 826 1,886 1,174 Written options 220,001 - 1,045 - 1,090 Purchased options 182,731 190 - 174 - Foreign exchange contracts: Swaps 2,404 - - - - Written options 6,070 - 114 - 54 Purchased options 7,913 125 - 100 - Commitments to purchase and sell foreign exchange 81,308 125 123 93 140 Debt securities - 5,143 176 4,715 234 Credit derivatives 1,491 1 6 1 7 Equities 5,383 97 68 135 118 ------ ----------- ------ ----------- Total trading account $7,129 $ 2,358 $7,113 $ 2,817 ====== =========== ====== ===========
The Company's trading activities are focused on acting as a market maker for the Company's customers. The risk from these market making activities and from the Company's own positions is managed by the Company's traders and limited in total exposure as described below. The Company manages trading risk through a system of position limits, a value at risk (VAR) methodology-based on a Monte Carlo simulation, stop loss advisory triggers, and other market sensitivity measures. Risk is monitored and reported to senior management by a separate unit on a daily basis. Based on certain assumptions, the VAR methodology is designed to capture the potential overnight pre-tax dollar loss from adverse changes in fair values of all trading positions. The calculation assumes a one-day holding period for most instruments, utilizes a 99% confidence level, and incorporates the non-linear characteristics of options. The VAR model is used to calculate economic 43 capital, which is allocated to the business units for computing risk-adjusted performance. As VAR methodology does not evaluate risk attributable to extraordinary financial, economic or other occurrences, the risk assessment process includes a number of stress scenarios based upon the risk factors in the portfolio and management's assessment of market conditions. Additional stress scenarios based upon historic market events are also tested. Stress tests by their design incorporate the impact of reduced liquidity and the breakdown of observed correlations. The results of these stress tests are reviewed weekly with senior management. The following table indicates the calculated VAR amounts for the trading portfolio for the periods indicated.
(In millions) 1st Quarter 2007 Market Risk ------------------------------------- - ----------- Average Minimum Maximum 3/31/07 ------- ------- ------- ------- Interest rate $ 3.2 $ 1.9 $ 4.9 $ 4.5 Foreign exchange 1.2 0.6 2.1 1.6 Equity 2.0 0.8 6.6 1.8 Credit derivatives 0.9 0.6 1.4 1.3 Commodities 1.7 - 3.3 3.3 Diversification (2.0) NM NM (3.4) Overall portfolio 7.0 3.0 10.9 9.1

(In millions) 1st Quarter 2006 Market Risk ------------------------------------- - ----------- Average Minimum Maximum 3/31/06 ------- ------- ------- ------- Interest rate $ 2.8 $ 2.0 $ 4.4 $ 2.9 Foreign exchange 1.0 0.6 1.7 0.8 Equity 0.8 0.5 1.2 0.9 Credit derivatives 0.9 0.6 1.2 0.9 Diversification (1.4) NM NM (1.4) Overall portfolio 4.1 3.3 5.4 4.1 NM - Because the minimum and maximum may occur on different days for different risk components, it is not meaningful to compute a portfolio diversification effect.
During the first quarter of 2007, interest rate risk generated approximately 31% of average VAR, credit derivatives risk generated 13% of average VAR, foreign exchange risk accounted for 12% of average VAR, commodities risk generated 25% of average VAR, and equity risk generated 19% of average VAR. The commodities VAR reflects the option contract the Company uses to hedge its Section 29 synthetic fuel tax credits. During the first quarter of 2007, the Company's daily trading loss did not exceed the Company's calculated VAR amounts on any given day. The following table of total daily revenue or loss captures trading volatility and shows the number of days in which the Company's trading revenues fell within particular ranges during the past year:
Distribution of Revenues(1) - -------------------------- For the Quarter Ended -------------------------------------------------- (Dollars in millions) 3/31/07 12/31/06 9/30/06 6/30/06 3/31/06 -------------------------------------------------- Revenue Range Number of Occurrences - ---------------------- --------- --------- --------- ---------- --------- Less than $(2.5) 0 0 0 0 0 $(2.5)~ $ 0 6 4 3 2 4 $ 0 ~ $ 2.5 33 45 52 39 40 $ 2.5 ~ $ 5.0 20 11 8 21 18 More than $5.0 3 2 0 2 0 (1) Based on revenues before deducting share of joint venture partner, Susquehanna Trading.
44 ASSET/LIABILITY MANAGEMENT The Company's asset/liability management activities include lending, investing in securities, accepting deposits, raising money as needed to fund assets, and processing securities and other transactions. The market risks that arise from these activities are interest rate risk, and to a lesser degree, foreign exchange risk. The Company's primary market risk is exposure to movements in U.S. dollar interest rates. Exposure to movements in foreign currency interest rates also exists, but to a significantly lower degree. The Company actively manages interest rate sensitivity. In addition to gap analysis, the Company uses earnings simulation and discounted cash flow models to identify interest rate exposures. An earnings simulation model is the primary tool used to assess changes in pre-tax net interest income. The model incorporates management's assumptions regarding interest rates, balance changes on core deposits, and changes in the prepayment behavior of loans and securities, and the impact of derivative financial instruments used for interest rate risk management purposes. These assumptions have been developed through a combination of historical analysis and future expected pricing behavior. These assumptions are inherently uncertain, and, as a result, the earnings simulation model cannot precisely estimate net interest income or the impact of higher or lower interest rates on net interest income. Actual results may differ from projected results due to timing, magnitude and frequency of interest rate changes and changes in market conditions and management's strategies, among other factors. The Company evaluates the effect on earnings by running various interest rate ramp scenarios up and down from a baseline scenario, which assumes no changes in interest rates. These scenarios are reviewed to examine the impact of large interest rate movements. Interest rate sensitivity is quantified by calculating the change in pre-tax net interest income between the scenarios over a 12-month measurement period. The measurement of interest rate sensitivity is the percentage change in net interest income as shown in the following table:
(Dollars in millions) Estimated Changes in Net Interest Income Pro Forma ---------------------------------------- March 31, 2007 December 31, 2006 $ % $ % --------- -------- ---------- ------ +200 Basis Point Ramp vs. Stable Rate $ 15 0.8% $ 4 0.2% +100 Basis Point Ramp vs. Stable Rate 18 1.0 17 0.9 -100 Basis Point Ramp vs. Stable Rate (13) (0.7) (13) (0.7) -200 Basis Point Ramp vs. Stable Rate (25) (1.4) (35) (1.9)
The pro forma data in the above table reflects the swap with JPMorgan Chase as if the transaction was fully integrated into the Company on March 31, 2007 and December 31, 2006. The Company's swap with JPMorgan Chase would have resulted in a more liability-sensitive balance sheet because corporate trust liabilities reprice more quickly than retail deposits. However, among other actions, the Company restructured its investment portfolio to readjust its interest rate sensitivity. The baseline scenario's Fed Funds rate in the March 31, 2007 analysis and the December 31, 2006 analysis was 5.25%. The 100 basis point ramp scenarios assumes short-term rates change 25 basis points in each of the next four quarters, while the 200 basis point ramp scenarios assumes a 50 basis point per quarter change. Both the +100 basis point and the +200 basis point March 31, 2007 scenarios assume a steepening of the yield curve with 10-year rates rising 184 and 284 basis points respectively. These scenarios do not reflect strategies that management could employ to limit the impact as interest rate expectations change. The above table relies on certain critical assumptions including depositors' behavior related to interest rate fluctuations and the prepayment and extension risk in certain of the Company's assets. To the extent that actual behavior is different from that assumed in the models, there could be a change in interest rate sensitivity. 45 STATISTICAL INFORMATION
THE BANK OF NEW YORK COMPANY, INC. Average Balances and Rates on a Taxable Equivalent Basis (Dollars in millions) For the three months For the three months ended March 31, 2007 ended March 31, 2006(1) ---------------------------- ---------------------------- Average Average Average Average Balance Interest Rate Balance Interest Rate -------- -------- ------- -------- -------- ------- ASSETS - ------ Interest-bearing deposits in banks (primarily foreign) $ 13,546 $ 146 4.36% $ 9,624 $ 86 3.61% Federal funds sold and securities purchased under resale agreements 4,435 57 5.23 1,691 15 3.64 Margin loans 5,401 84 6.33 5,655 77 5.54 Non-margin loans Domestic offices 19,231 244 5.11 16,321 184 4.54 Foreign offices 11,321 163 5.85 9,815 126 5.21 --------- -------- --------- -------- Total non-margin loans 30,552 407 5.38 26,136 310 4.79 --------- -------- --------- -------- Securities U.S. government obligations 86 1 4.95 225 2 4.22 U.S. government agency obligations 2,905 37 5.07 3,953 44 4.45 Obligations of states and political subdivisions 86 2 8.22 118 3 8.04 Other securities 19,311 255 5.30 18,919 232 4.89 Trading securities 2,753 34 4.99 4,714 51 4.42 --------- -------- --------- -------- Total securities 25,141 329 5.25 27,929 332 4.76 --------- -------- --------- -------- Total interest-earning assets 79,075 1,023 5.22 71,035 820 4.65 -------- -------- Allowance for credit losses (286) (333) Cash and due from banks 2,424 4,269 Other assets 20,762 16,860 Assets of discontinued operations held for sale 66 - 14,302 185 5.24 --------- -------- --------- -------- TOTAL ASSETS $ 102,041 $ 1,023 $ 106,133 $ 1,005 ========= ======== ========= ======== LIABILITIES AND SHAREHOLDERS' EQUITY - ------------------------------------ Interest-bearing deposits Money market rate accounts $ 6,169 $ 45 2.98% $ 5,426 $ 31 2.29% Savings 416 2 1.85 468 1 1.13 Certificates of deposit of $100,000 & over 3,133 42 5.43 4,246 48 4.59 Other time deposits 584 7 5.18 903 10 4.41 Foreign offices 33,560 304 3.67 30,220 208 2.80 --------- -------- --------- -------- Total interest-bearing deposits 43,862 400 3.70 41,263 298 2.93 Federal funds purchased and securities sold under repurchase agreements 1,527 19 4.97 1,966 20 4.19 Other borrowed funds 1,870 13 2.88 1,980 20 4.02 Payables to customers and broker-dealers 4,747 42 3.59 5,231 40 3.10 Long-term debt 8,888 120 5.42 8,011 96 4.81 --------- -------- --------- -------- Total interest-bearing liabilities 60,894 594 3.95 58,451 474 3.28 -------- -------- Noninterest-bearing deposits 14,903 10,119 Other liabilities 14,901 13,373 Common shareholders' equity 11,277 9,888 Liabilities of discontinued operations held for sale 66 - 14,302 36 1.02 --------- -------- --------- -------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 102,041 $ 594 $ 106,133 $ 510 ========= ======== ========= ======= Interest earnings, continuing operations $ 429 $ 346 ======== ======= Net interest margin 2.18% 1.95% ======= ======= Note: (1) Average balances and rates have been impacted by allocations made to match assets of discontinued operations held for sale with liabilities of discontinued operations held for sale.
46 SUPPLEMENTAL INFORMATION On October 1, 2006, the Company acquired JPMorgan Chase's corporate trust business and sold to JPMorgan Chase the Company's Retail Business. The transaction further increased the Company's focus on the securities services and asset management businesses that are at the core of its long-term business strategy. For the quarters ended March 31, 2007 and March 31, 2006, the Company has prepared supplemental financial information as follows: * Full income statement for the Retail Business, which is reflected as discontinued operations * Adjusted results, which combine continuing and discontinued operations to provide continuity with historical results * Continuing operations and adjusted results including and excluding merger and integration costs The Company believes that providing supplemental adjusted non-GAAP financial information is useful to investors in understanding the underlying operating performance of the Company and its businesses and performance trends, particularly in view of the materiality and strategic significance of the JPMorgan Chase transaction. By combining the results of continuing and discontinued operations and excluding merger and integration costs, the Company believes investors can gain greater insight into the operating performance of the Company in relation to historic results. Although the Company believes that the non-GAAP financial measures presented in this report enhance investors' understanding of the Company's business and performance, these non-GAAP measures should not be considered an alternative to GAAP. 47
THE BANK OF NEW YORK COMPANY, INC. SUPPLEMENTAL INFORMATION ------------------------ Consolidated Statements of Income (Dollars in millions, except per share amounts) (Unaudited) Quarter Ended March 31, 2007 Quarter Ended March 31, 2006 ---------------------------------------- ----------------------------------------- Continuing Discontinued Adjusted Continuing Discontinued Adjusted Operations Operations Results (1) Operations Operations Results (1) ---------- ------------- ---------- ---------- ------------ ----------- Noninterest income - ------------------ Securities servicing fees Asset servicing $ 393 $ - $ 393 $ 335 $ - $ 335 Issuer services 319 - 319 154 - 154 Clearing services 278 - 278 342 - 342 ------ ------ ------ ------ ------ ------ Total securities servicing fees 990 - 990 831 - 831 Global payment services 50 - 50 51 8 59 Asset and wealth management fees 153 - 153 127 11 138 Performance fees 14 - 14 7 - 7 Financing-related fees 52 - 52 63 37 100 Foreign exchange and other trading activities 128 - 128 113 2 115 Securities gains/(losses) 2 - 2 (4) - (4) Asset/investment income 35 - 35 34 - 34 Other 51 14 65 43 13 56 ------ ------ ------ ------ ------ ------ Total noninterest income 1,475 14 1,489 1,265 71 1,336 ------ ------ ------ ------ ------ ------ Net interest income - ------------------- 427 - 427 339 149 488 Provision for credit losses (15) - (15) - 5 5 ------ ------ ------ ------ ------ ------ Net interest income after provision for credit losses 442 - 442 339 144 483 ------ ------ ------ ------ ------ ------ Noninterest expense - ------------------- Staff 720 9 729 604 64 668 Net occupancy 79 - 79 68 20 88 Furniture and equipment 50 - 50 51 2 53 Clearing 37 - 37 50 - 50 Sub-custodian expenses 34 - 34 34 - 34 Software 54 - 54 55 1 56 Business development 30 - 30 23 9 32 Communications 19 - 19 26 1 27 Professional, legal, and other purchased services 130 2 132 82 8 90 Distribution and servicing 4 - 4 4 - 4 Amortization of intangibles 28 - 28 13 - 13 Merger and integration costs 15 8 23 - - - Other 72 - 72 59 8 67 ------ ------ ------ ------ ------ ------ Total noninterest expense 1,272 19 1,291 1,069 113 1,182 ------ ------ ------ ------ ------ ------ Income before income taxes 645 (5) 640 535 102 637 Income taxes 208 (2) 206 175 40 215 ------ ------ ------ ------ ------ ------ Net income 437 (3) 434 360 62 422 Merger and integration cost, net of taxes 10 5 15 - - - ------ ------ ------ ------ ------ ------ Net income excluding merger and integration costs $ 447 $ 2 $ 449 $ 360 $ 62 $ 422 ====== ====== ====== ====== ====== ====== Diluted earnings per share $ 0.57 $ - $ 0.57 $ 0.47 $ 0.08 $ 0.55 Diluted earnings per share excluding merger and integration costs 0.59 - 0.59 0.47 0.08 0.55 Note: (1) Adjusted results combine continuing and discontinued operations to provide continuity with historical results.
48 MERGER AGREEMENT WITH MELLON FINANCIAL CORPORATION ("MELLON") On December 3, 2006, the Company and Mellon entered into an Agreement and Plan of Merger (the "Merger Agreement"), pursuant to which the Company and Mellon will each merge with and into a newly formed corporation to be called The Bank of New York Mellon Corporation. The boards of directors of both companies have unanimously approved the Merger Agreement. The parties amended and restated the Merger Agreement on February 23, 2007 and again on March 30, 2007. The board of directors of each company has adopted a resolution recommending the adoption of the Merger Agreement by its respective shareholders, and each party has agreed to put these matters before their respective shareholders for consideration. Subject to the customary closing conditions, the merger is expected to close early in the third quarter of 2007. The Company and Mellon filed a joint proxy statement/prospectus with the Securities and Exchange Commission ("SEC") regarding the proposed merger in late February and filed amendments to the joint proxy statement/prospectus with the SEC in April. The joint proxy statement/prospectus became effective on April 17, 2007. The Company and Mellon will each hold separate special shareholder meetings on May 24, 2007 to approve the merger for shareholders of record as of April 12, 2007. FORWARD-LOOKING STATEMENTS AND RISK FACTORS Some statements in this document are forward-looking. These include all statements about the future results of the Company, projected business growth, statements with respect to the proposed merger with Mellon, expectations with respect to operations after the merger, the expected outcome of legal, regulatory and investigatory proceedings, predicted loan losses, and the Company's plans, objectives and strategies. In this report, any press release or any oral statement that the Company or its executives may make, words such as "estimate," "forecast," "project," "anticipate," "confident," "target," "expect," "intend," "think," "continue," "seek," "believe," "plan," "goal," "could," "should," "may," "will," "strategy," "highly attractive," "rapidly evolving financial markets," "synergies," "opportunities," "superior returns," "well- positioned," "trends," "pro forma" and words of similar meaning, signify forward-looking statements. In addition, with respect to the Mellon transaction, actual results may differ materially from the anticipated results or other expectations expressed in the forward-looking statements as a result of risks and uncertainties, including but not limited to, the businesses of the Company and Mellon may not be integrated successfully or the integration may be more difficult, time-consuming or costly than expected; the combined company may not realize, to the extent or at the time the Company expects, revenue synergies and cost savings from the transaction; revenues following the transaction may be lower than expected as a result of losses of customers or other reasons; deposit attrition, operating costs, customer loss and business disruption following the transaction, including, without limitation, difficulties in maintaining relationships with employees, may be greater than expected; governmental approvals of the transaction may not be obtained on the proposed terms or expected timeframe; a weakening of the economies in which the combined company will conduct operations may adversely affect the Company's operating results; the Company's and Mellon's shareholders may fail to approve the transaction; the U.S. and foreign legal and regulatory framework could adversely affect the operating results of the combined company; and fluctuations in interests rates, currency exchange rates and securities prices may adversely affect the operating results of the combined company. Additional factors that could cause the Company's and Mellon's results to differ materially from those described in the forward-looking statements can be found in The Bank of New York Company, Inc.'s and Mellon Financial Corporation's Annual Report on Form 10-K for the year ended December 31, 2006 and any subsequent reports filed with the SEC pursuant to the Securities Exchange Act of 1934, as amended, as well as other uncertainties affecting future results and the value of the Company's stock. Forward-looking statements, including the Company's discussions and projections of future results of operations and discussions of future plans contained in the MD&A and elsewhere in this Form 10-Q, are based on 49 management's current expectations and assumptions that involve risks and uncertainties and that are subject to change based on various important factors (some of which are beyond the Corporation's control), including adverse changes in market conditions and the timing of such changes, and the actions that management could take in response to these changes. Actual results may differ materially from those expressed or implied as a result of these risks and uncertainties. The "Risk Factors" discussed in the section "Forward-Looking Statements and Risk Factors" in Part I, Item 1A of the Company's Annual Report on Form 10-K for the year ended December 31, 2006 could cause or contribute to such differences. Investors should consider all risks mentioned elsewhere in this document and in subsequent reports filed by the Company with the SEC pursuant to the Securities and Exchange Act of 1934, as amended, as well as other uncertainties affecting future results and the value of the Company's stock. All forward-looking statements speak only as of the date on which such statements are made, and the Company undertakes no obligation to update any statement to reflect events or circumstances after the date on which such forward-looking statement is made or to reflect the occurrence of unanticipated events. MELLON TRANSACTION The proposed transaction between The Bank of New York Company, Inc. and Mellon Financial Corporation will be submitted to The Bank of New York Company, Inc.'s and Mellon Financial Corporation's shareholders for their consideration. In connection with the proposed transaction, The Bank of New York Mellon Corporation, an entity formed by The Bank of New York Company, Inc. and Mellon Financial Corporation for purposes of facilitating the proposed transaction, has filed a registration statement on Form S-4 (Registration No. 333-140863) containing a definitive joint proxy statement/prospectus that has been mailed to the shareholders of each of The Bank of New York Company, Inc. and Mellon Financial Corporation. Shareholders are urged to read the registration statement and the joint proxy statement/prospectus regarding the proposed transaction and any other relevant documents filed with the Securities and Exchange Commission, as well as any amendments or supplements to those documents, because they will contain important information. Shareholders may obtain a free copy of the joint proxy statement/prospectus, as well as other filings containing information about The Bank of New York Company, Inc., Mellon Financial Corporation and The Bank of New York Mellon Corporation, without charge, at the SEC's Internet site (http://www.sec.gov). Copies of the joint proxy statement/prospectus and other SEC filings that are incorporated by reference in the joint proxy statement/prospectus are also available, without charge, from The Bank of New York Company, Inc., Investor Relations, One Wall Street, 31st Floor, New York, New York 10286 (212-635-1578), or from Mellon Financial Corporation, Secretary of Mellon Financial Corporation, One Mellon Center, Pittsburgh, Pennsylvania 15258- 0001 (800-205-7699). Directors and executive officers of The Bank of New York Company, Inc. and Mellon Financial Corporation and other persons may be deemed to be participants in the solicitation of proxies from the shareholders of The Bank of New York Company Inc. and/or Mellon Financial Corporation, in respect of the proposed transaction. Information about the directors and executive officers of The Bank of New York Company, Inc. is set forth in the proxy statement for The Bank of New York Company, Inc.'s annual meeting of shareholders, as filed with the SEC on March 14, 2007. Information about the directors and executive officers of Mellon Financial Corporation is set forth in the proxy statement for Mellon Financial Corporation's 2007 annual meeting of shareholders, as filed with the SEC on March 19, 2007. Additional information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, is contained in the definitive joint proxy statement/prospectus. 50 GOVERNMENT MONETARY POLICIES AND COMPETITION Government Monetary Policies - ---------------------------- The Federal Reserve Board has the primary responsibility for United States monetary policy. Its actions have an important influence on the demand for credit and investments and the level of interest rates, and thus on the earnings of the Company. Competition - ----------- The businesses in which the Company operates are very competitive. Competition is provided by both unregulated and regulated financial services organizations, whose products and services span the local, national, and global markets in which the Company conducts operations. A wide variety of domestic and foreign companies compete for processing services. For securities servicing and global payment services, international, national, and regional commercial banks, trust banks, investment banks, specialized processing companies, outsourcing companies, data processing companies, stock exchanges, and other business firms offer active competition. In the asset management and wealth management markets, international, national, and regional commercial banks, standalone asset management companies, mutual funds, securities brokerage firms, insurance companies, investment counseling firms, and other business firms and individuals actively compete for business. Commercial banks, savings banks, savings and loan associations, and credit unions actively compete for deposits, and money market funds and brokerage houses offer deposit-like services. These institutions, as well as commercial finance companies, factors, insurance companies and pension trusts, are important competitors for various types of loans. Issuers of commercial paper compete actively for funds and reduce demand for bank loans. WEBSITE INFORMATION The Company makes available on its website: www.bankofny.com * All of its SEC filings, including annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to these reports, SEC Forms 3, 4 and 5 and its proxy statement as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC, * Its earnings releases and management conference calls and presentations, and * Its corporate governance guidelines and the charters of the Audit and Examining, Compensation and Organization, and Nominating and Governance Committees of its Board of Directors. The corporate governance guidelines and committee charters are available in print to any shareholder who requests them. Requests should be sent to The Bank of New York Company, Inc., Corporate Communications, One Wall Street, NY, NY 10286. 51
THE BANK OF NEW YORK COMPANY, INC. Consolidated Balance Sheets (Dollars in millions, except per share amounts) (Unaudited) March 31, December 31, 2007 2006 ----------- ----------- Assets - ------ Cash and due from banks $ 2,159 $ 2,840 Interest-bearing deposits with banks 13,474 13,172 Federal funds sold and securities purchased under resale agreements 1,712 5,114 Securities Held-to-maturity (fair value of $1,557 at 03/31/07 and $1,710 at 12/31/06) 1,572 1,729 Available-for-sale 22,124 19,377 ----------- ----------- Total securities 23,696 21,106 Trading assets at fair value 3,675 5,544 Loans 38,289 37,793 Reserve for loan losses (290) (287) ----------- ----------- Net loans 37,999 37,506 Premises and equipment 1,064 1,050 Accrued interest receivable 409 422 Goodwill 5,131 5,172 Intangible assets 1,447 1,453 Other assets 9,061 9,973 Assets of discontinued operations held for sale 21 18 ----------- ----------- Total assets $ 99,848 $ 103,370 =========== =========== Liabilities - ----------- Deposits Noninterest-bearing (principally domestic offices) $ 17,269 $ 19,554 Interest-bearing deposits in domestic offices 9,312 10,041 Interest-bearing deposits in foreign offices 32,435 32,551 ----------- ----------- Total deposits 59,016 62,146 Federal funds purchased and securities sold under repurchase agreements 773 790 Trading liabilities 2,270 2,507 Payables to customers and broker-dealers 6,739 7,266 Other borrowed funds 1,714 1,625 Accrued taxes and other expenses 4,153 5,129 Other liabilities (including allowance for lending-related commitments of $135 at 03/31/07 and $150 at 12/31/06) 4,007 3,477 Long-term debt 9,585 8,773 Liabilities of discontinued operations held for sale 64 64 ----------- ----------- Total liabilities 88,321 91,777 ----------- ----------- Shareholders' Equity - -------------------- Common stock-par value $7.50 per share, authorized 2,400,000,000 shares, issued 1,054,488,125 shares at 03/31/07 and 1,053,752,916 shares at 12/31/06 7,909 7,903 Additional capital 2,203 2,142 Retained earnings 9,294 9,444 Accumulated other comprehensive income (337) (317) ---------- ----------- 19,069 19,172 Less: Treasury stock (296,062,120 shares at 03/31/07 and 297,790,159 shares at 12/31/06), at cost 7,539 7,576 Loan to ESOP (101,753 shares at 03/31/07 and 12/31/06), at cost 3 3 ----------- ----------- Total shareholders' equity 11,527 11,593 ----------- ----------- Total liabilities and shareholders' equity $ 99,848 $ 103,370 =========== =========== Notes:(1) See accompanying Notes to Consolidated Financial Statements. (2) The balance sheet at December 31, 2006 has been derived from the audited financial statements at that date.
52
THE BANK OF NEW YORK COMPANY, INC. Consolidated Statements of Income (In millions, except per share amounts) (Unaudited) Quarter Ended ---------------------------- March 31, Dec 31, March 31, 2007 2006 2006 --------- ------- -------- Noninterest Income - ------------------ Securities servicing fees Asset servicing $ 393 $ 355 $ 335 Issuer services 319 340 154 Clearing services 278 263 342 ------ ------ ------ Total securities servicing fees 990 958 831 Global payment services 50 51 51 Asset and wealth management fees 153 154 127 Performance fees 14 18 7 Financing-related fees 52 61 63 Foreign exchange and other trading activities 128 98 113 Securities gains/(losses) 2 2 (4) Asset/investment income 35 47 34 Other 51 52 43 ------ ------ ------ Total noninterest income 1,475 1,441 1,265 ------ ------ ------ Net Interest Income - ------------------- Interest income 1,021 1,057 813 Interest expense 594 606 474 ------ ------ ------ Net interest income 427 451 339 Provision for credit losses (15) (15) - ------ ------ ------ Net interest income after provision for credit losses 442 466 339 ------ ------ ------ Noninterest Expense - ------------------- Staff 720 736 604 Net occupancy 79 73 68 Furniture and equipment 50 45 51 Clearing 37 38 50 Sub-custodian expenses 34 33 34 Software 54 59 55 Business development 30 30 23 Communications 19 23 26 Professional, legal, and other purchased services 130 125 82 Distribution and servicing 4 5 4 Amortization of intangible assets 28 34 13 Merger and integration costs 15 17 - Other 72 67 59 ------ ------ ------ Total noninterest expense 1,272 1,285 1,069 ------ ------ ------ Income - ------ Income from continuing operations before income taxes 645 622 535 Provision for income taxes 208 195 175 ------ ------ ------ Income from continuing operations 437 427 360 ------ ------ ------ Discontinued operations Income (loss) from discontinued operations (5) 2,130 102 Provision for income taxes (2) 768 40 ------ ------ ------ Income (loss) from discontinued operations, net (3) 1,362 62 ------ ------ ------ Net income $ 434 $1,789 $ 422 ====== ====== ====== Earnings per Share - ------------------ Basic Income from continuing operations $ 0.58 $ 0.57 $ 0.47 Income from discontinued operations, net - 1.82 0.08 Net income 0.58 2.39 0.55 Diluted Income from continuing operations $ 0.57 $ 0.56 $ 0.47 Income from discontinued operations, net - 1.80 0.08 Net income 0.57 2.36 0.55 Average Shares Outstanding (in thousands) - ----------------------------------------- Basic 750,737 746,688 763,851 Diluted 763,083 757,981 773,630 Note: (1) See accompanying Notes to Consolidated Financial Statements. (2) Certain prior periods' amounts have been reclassified to conform to current period presentation.
53
THE BANK OF NEW YORK COMPANY, INC. Consolidated Statement of Changes in Shareholders' Equity For the three months ended March 31, 2007 (Dollars in millions) (Unaudited) Common stock Balance, January 1 $ 7,903 Issuances in connection with employee benefit plans 6 ------------- Balance, March 31 7,909 ------------- Additional capital Balance, January 1 2,142 Issuances in connection with employee benefit plans 61 ------------- Balance, March 31 2,203 ------------- Retained earnings Balance, January 1 9,444 Adjustments for the cumulative effect of applying FSP FAS 13-2 and FIN 48, net of taxes of $(214) (416) ------------- Balance, January 1 restated 9,028 Net income $ 434 434 Cash dividends on common stock (168) ------------- Balance, March 31 9,294 ------------- Accumulated other comprehensive income Balance, January 1 (317) Net unrealized derivative gain/(loss) on cash flow hedges, net of taxes of $13 (19) (19) Foreign currency translation adjustment, net of taxes of $- 1 1 Other adjustments, net of taxes of $- (2) (2) ------------- Balance, March 31 (337) ----------- ------------- Total comprehensive income $ 414 =========== Less treasury stock Balance, January 1 7,576 Issued (53) Acquired 16 ------------- Balance, March 31 7,539 ------------- Less loan to ESOP Balance, January 1 3 Loan to ESOP - ------------- Balance, March 31 3 ------------- Total shareholders' equity, March 31, 2007 $ 11,527 ============= - ------------------------------------------------------------------------------------------- Comprehensive income for the three months ended March 31, 2007 and 2006 was $414 and $367. See accompanying Notes to Consolidated Financial Statements.
54
THE BANK OF NEW YORK COMPANY, INC. Consolidated Statements of Cash Flows (Dollars in millions) (Unaudited) For the three months ended March 31, 2007 2006 -------- -------- Operating activities Net income $ 434 $ 422 Adjustments to determine net cash attributable to operating activities: Provision for credit losses (15) 5 Depreciation and amortization 127 117 Deferred income taxes 62 (37) Securities gains and venture capital income (18) (17) Change in trading activities 1,608 (1,074) Change in accruals and other, net (151) 1,117 -------- -------- Net cash provided by operating activities 2,047 533 -------- -------- Investing activities Change in interest-bearing deposits in banks (219) 1,100 Change in margin loans 34 777 Purchases of securities held-to-maturity - (303) Paydowns of securities held-to-maturity 35 65 Maturities of securities held-to-maturity 129 40 Purchases of securities available-for-sale (4,887) (3,260) Sales of securities available-for-sale 60 890 Paydowns of securities available-for-sale 1,071 1,193 Maturities of securities available-for-sale 945 1,436 Net principal disbursed on loans to customers (1,055) (138) Proceeds from loans held for sale and other loan sales - 33 Change in federal funds sold and securities purchased under resale agreements 3,402 (2,356) Purchases of premises and equipment/capitalized software (57) (41) Acquisitions, net of cash disbursed (58) (339) Proceeds from the sale of premises and equipment - - Other, net 858 (57) -------- -------- Net cash provided by/(used for)investing activities 258 (960) -------- -------- Financing activities Change in deposits (3,286) 637 Change in federal funds purchased and securities sold under repurchase agreements (17) 69 Change in payables to customers and broker-dealers (526) (1,067) Change in other borrowed funds 74 302 Net proceeds from the issuance of long-term debt 803 600 Repayments of long-term debt (11) (12) Issuance of common stock 120 104 Tax benefit realized on share-based payment awards 15 9 Treasury stock acquired (16) (82) Cash dividends paid (168) (164) -------- -------- Net cash (used for)/provided by financing activities (3,012) 396 -------- -------- Effect of exchange rate changes on cash 26 (76) -------- -------- Change in cash and due from banks (681) (107) Cash and due from banks at beginning of period 2,840 3,515 Cash related to discontinued operations - (544) -------- -------- Cash and due from banks at end of period $ 2,159 $ 2,864 ======== ======== - ------------------------------------------------------------------------------- Supplemental disclosures Interest paid $ 626 $ 510 Income taxes paid 643 328 Income taxes refunded 1 2 - ------------------------------------------------------------------------------- See accompanying Notes to Consolidated Financial Statements.
55 THE BANK OF NEW YORK COMPANY, INC. Notes to Consolidated Financial Statements 1. General ------- The accounting and reporting policies of The Bank of New York Company, Inc., a financial holding company, and its consolidated subsidiaries (the "Company") conform with U.S. generally accepted accounting principles and general practice within the banking industry. Such policies are consistent with those applied in the preparation of the Company's annual financial statements. The Company provides a complete range of banking and other financial services to corporations and individuals worldwide through its business segments: Asset and Wealth Management, Institutional Services, and Other. "Business Segment Accounting Principles" and "Segment Financial Data" are incorporated from the Business Segment Review section of Management's Discussion and Analysis of the Company's Financial Condition and Results of Operations ("MD&A"). There were no major customers from whom revenues were individually material to the Company's performance. The accompanying consolidated financial statements are unaudited. In the opinion of management, all adjustments necessary for a fair presentation of financial position, results of operations and cash flows for the interim periods have been made. Certain other reclassifications have been made to prior periods to place them on a basis comparable with current period presentation. 2. Accounting Changes and New Accounting Pronouncements ---------------------------------------------------- The Company adopted Statement of Financial Accounting Standards ("SFAS") No. 123 ("SFAS 123"), "Accounting for Stock-Based Compensation," in 1995. At that time, as permitted by the standard, the Company elected to continue to apply the provisions of Accounting Principles Board Opinion No. 25 ("APB 25"), "Accounting for Stock Issued to Employees," and accounted for the options granted to employees using the intrinsic value method, under which no expense is recognized for stock options because they were granted at the stock price on the grant date and therefore have no intrinsic value. On January 1, 2003, the Company adopted the fair value method of accounting for its options under SFAS 123 as amended by SFAS No. 148 ("SFAS 148"), "Accounting for Stock-Based Compensation-Transition and Disclosure." SFAS 148 permitted three different methods of adopting fair value: (1) the prospective method, (2) the modified prospective method, and (3) the retroactive restatement method. Under the prospective method, options issued after January 1, 2003 are expensed while all options granted prior to January 1, 2003 are accounted for under APB 25 using the intrinsic value method. Consistent with industry practice, the Company elected the prospective method of adopting fair value accounting. During the three months ended March 31, 2007, approximately 5.6 million options were granted. In the first quarters of 2007 and 2006, the Company recorded $14 million and $10 million of stock option expense. The fair value of options granted in 2007 and 2006 were estimated at the grant date using the following weighted average assumptions: First Quarter 2007 2006 ------ ------- Dividend yield 2.46% 2.44% Expected volatility 23.35 21.94 Risk free interest rates 4.42 4.66 Expected options lives (in years) 6 5 In December 2004, the Financial Accounting Standards Board ("FASB") issued SFAS No. 123 (revised 2004) ("SFAS 123(R)"), "Share-Based Payment," which is a 56 revision of SFAS No. 123, "Accounting for Stock-Based Compensation." SFAS 123(R) eliminates the ability to account for share-based compensation transactions using APB 25 and requires that such transactions be accounted for using a fair value-based method. SFAS 123(R) covers a wide range of share-based compensation arrangements including share options, restricted share plans, performance-based awards, share appreciation rights, and employee share purchase plans. The Company adopted SFAS 123(R) on January 1, 2006 using the "modified prospective" method. Under this method, compensation cost is recognized beginning with the effective date (a) based on the requirements of SFAS 123(R) for all share-based payments granted after the effective date and (b) based on the requirements of SFAS 123 for all awards granted to employees prior to the effective date of SFAS 123(R) that remain unvested on the effective date. As of January 1, 2006, the Company was amortizing all of its unvested stock option grants. Certain of the Company's stock compensation grants vest when the employee retires. SFAS 123(R) requires the completion of expensing of new grants with this feature by the first date the employee is eligible to retire. For grants prior to January 1, 2006, the Company will continue to expense them over their stated vesting period. The adoption of SFAS 123(R) increased pre-tax expense in 2006 by $12 million. In February 2006, the FASB issued SFAS No. 155 ("SFAS 155"), "Accounting for Certain Hybrid Financial Instruments", an amendment of SFAS 140 and SFAS 133. SFAS 155 permits the Company to elect to measure any hybrid financial instrument at fair value if the hybrid instrument contains an embedded derivative that otherwise would require bifurcation and be accounted for separately under SFAS 133. SFAS 155 clarifies which interest-only strips and principal-only strips are not subject to the requirements of SFAS 133 and that concentrations of credit risk in the form of subordination are not embedded derivatives. SFAS 155 is effective for all financial instruments acquired, issued, or subject to a remeasurement event after December 31, 2006. On January 17, 2007, the FASB issued Derivative Implementation Groups ("DIG") Issue B40 which impacts how SFAS 155 is applied. The adoption of SFAS 155 and DIG Issue B40 did not have a significant impact on the Company's investment activities. In July 2006, the FASB issued FASB Staff Position ("FSP") FAS 13-2, "Accounting for a Change or Projected Change in the Timing of Cash Flows Relating to Income Taxes Generated by a Leverage Lease Transaction," revising the accounting guidance under SFAS No. 13 ("SFAS 13"), "Accounting for Leases," for leveraged leases. This FSP modifies existing interpretations of SFAS 13 and associated industry practice. As a result in 2007, the Company recognized a one-time after-tax charge to equity of $389 million related to a change in the timing of its lease cash flows due to the LILO settlement. See "Commitments and Contingent Liabilities" in Notes to Consolidated Financial Statements. However, an amount approximating this one-time charge will be taken into income over the remaining term of the affected leases. In the first quarter of 2007, the Company recognized an after-tax income of $2 million. Since the Company has not yet reached a settlement with the IRS related to LILOs originated in 1998, the charge to equity was estimated assuming a December 31, 2007 settlement date. The portion of the one-time charge related to 1998 LILOs will be taken into income between the settlement date and the end of the lease term. In September 2006, the FASB issued SFAS No. 157 ("SFAS 157"), "Fair Value Measurements." SFAS 157 defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles, and expands additional disclosures about fair value measurements. SFAS 157 clarifies that fair value is the amount that would be exchanged to sell an asset or transfer a liability, in an orderly transaction between market participants. SFAS 157 nullifies the consensus reached in EITF Issue No. 02-3 prohibiting the recognition of day one gain or loss on derivative contracts (and hybrid instruments measured at fair value under SFAS 133 as modified by SFAS 155) where the Company cannot verify all of the significant model inputs to observable market data and verify the model to market transactions. However, SFAS 157 requires that a fair value measurement technique include an adjustment for risks inherent in a particular valuation technique (such as a pricing 57 model) and/or the risks inherent in the inputs to the model if market participants would also include such an adjustment. SFAS 157 will require the Company to consider the effect of its own credit standing in determining the fair value of its liabilities. In addition, SFAS 157 prohibits the recognition of "block discounts" for large holdings of unrestricted financial instruments where quoted prices are readily and regularly available in an active market. The requirements of SFAS 157 are to be applied prospectively, except for changes in fair value measurements that result from the initial application of SFAS 157 to existing derivative financial instruments measured under EITF Issue No. 02-3, existing hybrid instruments measured at fair value, and block discounts, which are to be recorded as an adjustment to opening retained earnings in the year of adoption. The Company expects to adopt SFAS 157 on January 1, 2008. The Company is currently evaluating the impact of SFAS 157. In September 2006, the FASB issued SFAS No. 158, "Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans - an amendment of FASB Statements No. 87, 88, 106 and 132(R)" ("SFAS 158"). SFAS 158 requires the Company to (a) recognize in its statement of financial position an asset for a plan's overfunded status or a liability for a plan's underfunded status, (b) measure a plan's assets and its obligations that determine its funded status as of the end of the fiscal year, (c) recognize changes in the funded status of a defined postretirement plan in the year in which the changes occur (reported in comprehensive income) and (d) provide additional disclosure. The requirement to recognize the funded status of a benefit plan and the disclosure requirements are effective as of the end of the fiscal year ending after December 15, 2006. The requirement to measure the plan assets and benefit obligations as of the date of the employer's fiscal year-end statement of financial position is effective for fiscal years ending after December 15, 2008. On December 31, 2006, the Company adopted the recognition and disclosure provisions of SFAS 158. The adoption of SFAS 158 resulted in a charge to equity of $264 million. In 2007, the Company adopted FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxes" ("FIN 48"). FIN 48 clarifies the accounting for uncertain tax positions in accordance with SFAS No. 109, "Accounting for Income Taxes." FIN 48 requires that a tax position meet a "more-likely-than-not threshold" for the benefit of the uncertain tax position to be recognized in the financial statements. A tax position that fails to meet a more-likely-than-not recognition threshold will result in either reduction of current or deferred tax assets, and/or recording of current or deferred tax liabilities. The impact of adoption in 2007 was a charge to equity of $27 million. See "Income Taxes" in the Notes to Consolidated Financial Statements for further discussion related to FIN 48. In February 2007, the FASB issued SFAS No. 159 ("SFAS 159"), "The Fair Value Option for Financial Assets and Financial Liabilities." SFAS 159 provides companies with an option to report selected financial assets and liabilities at fair value and to provide additional information that will help investors and other users of financial statements to understand more easily the effect on earnings of the company's choice to use fair value. It also requires companies to display the fair value of those assets and liabilities for which the company has chosen to use fair value on the face of the balance sheet. The Company expects to adopt SFAS 159 along with SFAS 157 on January 1, 2008 and is currently evaluating the impact of SFAS 159. Certain other prior year information has been reclassified to conform its presentation with the 2007 financial statements. 3. Acquisitions and Dispositions ----------------------------- The Company continues to be a selective acquirer of securities servicing and asset management businesses. In the first quarter of 2007, the Company acquired certain clearing and custody relationships rights for cash. The Company frequently structures its acquisitions with both an initial payment and a later contingent payment tied to post-closing revenue or income growth. The Company records the fair value 58 of contingent payments as an additional cost of the entity acquired in the period that the payment becomes probable. Goodwill and tax-deductible portion of goodwill related to completed acquisitions in the first quarter of 2007 was zero. At March 31, 2007, the Company was liable for potential contingent payments related to acquisitions in the amount of $130 million. Cash paid or accrued for acquisitions and contingent payments was $89 million in the first quarter of 2007. 2007 - ---- In January 2007, certain clearing and custody relationships rights were acquired by the Company's Pershing subsidiary. The transaction involved 46 organizations, comprised of 30 registered investment advisor firms and 16 introducing broker-dealer firms. In March 2007, the Company sold its 49 percent stake in joint venture BNY Mortgage Co. to EverBank Financial Corp. The transaction is consistent with the Company's recent strategic moves to focus on asset management and securities servicing. In April 2007, the Company agreed to sell its 30% equity investment in RBS International Securities Services (Holdings) Limited to BNP Paribas Securities Services. 2006 - ---- On October 1, 2006, the Company sold its Retail Business to JPMorgan Chase for the net asset value plus a premium of $2.3 billion. JPMorgan Chase sold its corporate trust business to the Company for the net asset value plus a premium of $2.15 billion. The difference between premiums resulted in a net cash payment of $150 million to the Company. There is also a contingent payment of up to $50 million to the Company tied to customer retention. For further details, see "Discontinued Operations" in the Notes to the Consolidated Financial Statements. JPMorgan Chase's corporate trust business comprised issues representing $5 trillion in total debt outstanding. It had 2,400 employees in more than 40 locations globally. Prior to the acquisition, the Company's corporate trust business comprised issues representing $3 trillion in total debt outstanding and had 1,300 employees in 25 locations globally. The Company's retail bank consisted of 338 branches in the Tri-State region, serving approximately 700,000 consumer households and small businesses with $13 billion in deposits and $9 billion in assets at September 30, 2006. The Company's regional middle market businesses provided financing, banking and treasury services for middle market clients, serving more than 2,000 clients in the Tri-State region. Together, the units had 4,000 employees located in New York, New Jersey, Connecticut and Delaware. The transaction further increases the Company's focus on the securities services and wealth management businesses that have fueled the Company's growth in recent years and that are at the core of its long-term business strategy. The Company recorded an after-tax gain of $1,381 million on the sale of the Retail Business. The Company also expects to incur after-tax charges of $150 million related to the acquisition. The transaction is expected to be dilutive to GAAP earnings per share through 2009 (4.5 percent in 2007 to 1.5 percent in 2009), but to be accretive to cash earnings per share in 2009 when cost savings are fully phased in. 59 On a pro forma basis, if the acquisition of the Acquired Corporate Trust Business had occurred on January 1, 2006, the transaction would have had the following impact: For the three months ended (Dollars in millions, March 31, 2006 except per share amounts) -------------------------- Reported Pro Forma --------- --------- Revenue $ 1,604 $ 1,810 Net income from continuing operations 360 409 Net income 422 471 Diluted earnings per share from continuing operations $ 0.47 $ 0.53 Diluted earnings per share 0.55 0.61 The pro forma results are based on adding the pre-tax historical results of the Acquired Corporate Trust Business to the Company's results and adjusting for amortization of intangibles created in the transaction and taxes. The pro forma data does not include adjustments to reflect the Company's operating costs or expected differences in the way funds generated by the Acquired Corporate Trust Business are invested. The pro forma data is intended for informational purposes and is not indicative of the future results of operations. The Company's transaction with JPMorgan Chase altered the composition of the balance sheet. When the Acquired Corporate Trust Business is fully integrated in 2007, approximately $14 billion of U.S. dollar retail deposits will have been replaced with between $11 billion and $14 billion of institutional corporate trust deposits. Between $7 billion and $10 billion of deposits related to the Acquired Corporate Trust Business have not yet transitioned to the Company. These deposits will transition to the Company as regulatory approval is received to operate in certain foreign locations and as the novation process proceeds in other foreign locations. The Company expects the transition will be substantially complete by June 30, 2007. Until the transition is complete, JPMorgan Chase will pay the Company for the net economic value of these deposits. In the first quarter of 2007, the Company recorded $25 million of net economic value payments in noninterest income, compared with $23 million in the fourth quarter of 2006. On the asset side of the balance sheet, approximately $8 billion of retail and middle market loans included in the sale of the Retail Business have been replaced with liquid assets and securities. Goodwill and intangibles related to the Acquired Corporate Trust Business were approximately $2.3 billion. On October 2, 2006, the Company completed the transaction resulting in the formation of BNY ConvergEx Group. BNY ConvergEx Group brought together BNY Securities Group's trade execution, commission management, independent research and transition management business with Eze Castle Software, a leading provider of trade order management and related investment technologies. This transaction enabled the Company to achieve several objectives including repositioning its execution services business for faster growth and enhancing the product offering for the Company's client base, while allowing the Company to withdraw capital committed to the business. BNY ConvergEx Group is a leading global agency brokerage and technology company offering a complete spectrum of pre-trade, trade, and post-trade solutions for traditional money managers, hedge funds, broker- dealers, corporations and plan sponsors. BNY ConvergEx Group has a global presence in New York, Boston, San Francisco, Chicago, Dallas, Stamford, London, Bermuda, Tokyo, Hong Kong, and Sydney. The Company and GTCR Golder Rauner, LLC each hold a 35 percent stake in BNY ConvergEx Group, with the balance held by Eze Castle Software's investors and BNY ConvergEx Group's management team. BNY ConvergEx Group, with pro forma 2005 revenues of approximately $340 million, is an affiliate of The Bank of New York and is reflected on the Company's financial statements as an equity 60 investment. After the use of the proceeds to repurchase shares, the transaction is expected to be neutral to earnings per share. The BNY Securities Group businesses included in BNY ConvergEx Group are BNY Brokerage, Lynch, Jones & Ryan, G-Port, Westminster Research and BNY Jaywalk. In addition, The Bank of New York's B-Trade and G-Trade businesses are expected to become part of BNY ConvergEx Group in 2008, although in the interim they will continue to be owned by The Bank of New York. On December 1, 2006, the Company sold its transfer agency software business, Rufus, to Bravura Solutions Limited ("Bravura"), a leading global supplier of wealth management applications and professional services, for approximately $38 million. Under the agreement, Bravura acquired all of the software and intellectual property comprising Rufus, and all existing employees will transfer to Bravura. On December 3, 2006, the Company and Mellon entered into a definitive agreement to merge, creating the world's largest securities servicing and asset management firm. The new company, which will be called The Bank of New York Mellon Corporation, will be the world's leading asset servicer with Assets under Custody and Administration expected to exceed $18 trillion and the world's leading corporate trustee with assets under trusteeship expected to exceed $8 trillion. It will rank among the top 10 global asset managers with assets under management expected to exceed $1.1 trillion. The combined company is expected to have annual revenues of more than $12 billion, with approximately 28% derived from asset servicing, 38% from issuer services, clearing and execution services and treasury services, and 29% from asset and wealth management. By the end of 2008, the Company is expected to generate over $1 billion tangible capital per quarter. It will be well positioned to capitalize on global growth trends, including the evolution of emerging markets, the growth of hedge funds and alternative asset classes, the increasing need for more complex financial products and services, and the increasingly global need for people to save and invest for retirement. Almost a quarter of combined revenue will be derived internationally. Under the terms of the agreement, the Company's shareholders will receive 0.9434 shares in the new company for each share of the Company that they own and Mellon shareholders will receive one share in the new company for each Mellon share they own. To induce Mellon to enter into the merger agreement, the Company granted Mellon an option to purchase up to 149,621,546 shares of the Company's common stock at a price per share equal to the lesser of $35.48 and the closing sale price of the Company's common stock on the trading day immediately preceding the exercise date; but in no case may Mellon acquire more than 19.9% of the outstanding shares of the Company's common stock under this stock option agreement. Mellon cannot exercise the option unless specified triggering events occur. These events generally relate to business combinations or acquisition transactions involving the Company and a third party. The option could have the effect of discouraging a third party from trying to acquire the Company prior to completion of the transaction or termination of the merger agreement. Upon the occurrence of certain triggering events, the Company may be required to repurchase the option and/or any shares of the Company's common stock purchased by Mellon under the option at a predetermined price, or Mellon may choose to surrender the option to the Company for a cash payment of $1.15 billion. In no event will the total profit received by Mellon with respect to this option exceed $1.3 billion. To induce the Company to enter into the merger agreement, Mellon granted the Company an option to purchase up to 82,641,656 shares of Mellon common stock at a price per share equal to the lesser of $40.05 and the closing sale price of Mellon common stock on the trading day immediately preceding the exercise date; but in no case may the Company acquire more than 19.9% of the outstanding shares of Mellon common stock under this stock option agreement. The Company cannot exercise the option unless specified triggering events 61 occur. These events generally relate to business combinations or acquisition transactions involving Mellon and a third party. The option could have the effect of discouraging a third party from trying to acquire Mellon prior to completion of the transaction or termination of the merger agreement. Upon the occurrence of certain triggering events, Mellon may be required to repurchase the option and/or any shares of Mellon common stock purchased by the Company under the option at a predetermined price, or the Company may choose to surrender the option to Mellon for a cash payment of $725 million. In no event will the total profit received by the Company with respect to this option exceed $825 million. On December 19, 2006, the Company acquired the remaining 50% stake in AIB/BNY Securities Services (Ireland) Ltd. (AIB/BNY) that it did not own from Allied Irish Banks, p.l.c. ("AIB"). AIB/BNY was established in 1995 as a joint venture between AIB and the Company to provide a range of services for a number of fund structures domiciled in Ireland. At acquisition, AIB/BNY had $210 billion assets under administration and employed 600 staff in its Dublin and Cork offices. 4. Discontinued Operations ----------------------- On October 1, 2006, the Company acquired JPMorgan Chase's corporate trust business and JPMorgan Chase acquired the Company's Retail Business. The Company adopted discontinued operations accounting for its Retail Business. Also included in the sales agreement are provisions related to transitional services that will be provided for a period of up to 8 months after closing, subject to extensions. The results from continuing operations exclude the results of the Company's Retail Business and include the operations of the Acquired Corporate Trust Business only after October 1, 2006. Results for all the Retail Business are reported separately as discontinued operations for all periods presented. The assets and liabilities of the businesses sold are included in assets of discontinued operations held for sale and liabilities of discontinued operations held for sale on the consolidated balance sheet. Net interest income has been computed by allocating investment securities and federal funds sold and related interest income to discontinued operations to match the amount and duration of the assets sold with the amount and duration of the liabilities sold. Summarized financial information for discontinued operations related to the Retail Business is as follows: (In millions) 1Q07 4Q06 1Q06 ------ ------ ------ Noninterest income(1) $ 14 $2,174 $ 71 Net interest income - - 149 ------ ------ ------ Total revenue, net of interest expense $ 14 $2,174 $ 220 ====== ====== ====== Income (loss) from discontinued operations(1) $ (5) $2,130 $ 102 Income taxes (benefits) (2) 768 40 ------ ------ ------ Income (loss) from discontinued operations, Net of taxes $ (3) $1,362 $ 62 ====== ====== ====== (1) Including the $2,159 million pre-tax gain on the sale of the Retail Business in the fourth quarter of 2006. Assets and liabilities of discontinued operations held for sale as of March 31, 2007 and December 31, 2006 were not significant. 62 5. Goodwill and Intangibles ------------------------ Goodwill by reportable segment is as follows: (In millions) March 31, 2007 December 31, 2006 ------------------ ----------------- Asset and wealth management $ 622 $ 605 Institutional services 4,509 4,567 ------------------ ----------------- Consolidated total $ 5,131 $ 5,172 ================== ================= The changes in goodwill during the first quarter of 2007 were as follows: (In millions) Balance at December 31, 2006 $ 5,172 Acquisitions 8 Foreign exchange translation 2 Other (1) (51) -------- Balance at March 31, 2007 $ 5,131 ======== (1) Other changes in goodwill include purchase price adjustments and certain other reclassifications. The Company's reporting units are tested annually for goodwill impairment. Intangible Assets - -----------------
March 31, 2007 December 31, 2006 ---------------------------------------------- ------------------------------ Weighted Gross Net Average Gross Net Carrying Accumulated Carrying Amortization Carrying Accumulated Carrying (Dollars in millions) Amount Amortization Amount Period in Years Amount Amortization Amount -------- ------------ -------- --------------- -------- ------------ -------- Trade names $ 370 $ - $ 370 Indefinite Life $ 370 $ - $ 370 Customer relationships 1,253 (176) 1,077 13 1,231 (148) 1,083 Other intangible assets 8 (8) - - 17 (17) -
The aggregate amortization expense of intangibles was $28 million and $13 million for the quarters ended March 31, 2007 and 2006, respectively. Estimated amortization expense for current intangibles for the next five years is as follows: For the Year Ended Amortization (In millions) December 31, Expense ------------------ ------------ 2007 $114 2008 114 2009 112 2010 111 2011 111 63 6. Allowance for Credit Losses --------------------------- The allowance for credit losses is maintained at a level that, in management's judgment, is adequate to absorb probable losses associated with specifically identified loans, as well as estimated probable credit losses inherent in the remainder of the credit portfolio at the balance sheet date. Management's judgment includes the following factors, among others: risks of individual credits; past experience; the volume, composition, and growth of the credit portfolio; and economic conditions. The Company conducts a quarterly portfolio review to determine the adequacy of its allowance for credit losses. All commercial loans over $1 million are assigned to specific risk categories. Smaller commercial and consumer exposures are evaluated on a pooled basis and assigned to specific risk categories. Following this review, senior management of the Company analyzes the results and determines the allowance for credit losses. The Company's Board of Directors reviews the allowance at the end of each quarter. The portion of the allowance for credit losses allocated to impaired loans (nonaccrual commercial loans over $1 million) is measured by the difference between their recorded value and fair value. Fair value is determined by one of the following: present value of the expected future cash flows from borrowers, the market value of the loan, or the fair value of the collateral. See "Critical Accounting Policies" and "Allowance" in the MD&A section for additional information. Commercial loans are placed on nonaccrual status when collateral is insufficient and principal or interest is past due 90 days or more, or when there is reasonable doubt that interest or principal will be collected. Accrued interest is usually reversed when a loan is placed on nonaccrual status. Interest payments received on nonaccrual loans may be recognized as income or applied to principal depending upon management's judgment. Nonaccrual loans are restored to accrual status when principal and interest are current or they become fully collateralized. Consumer loans are not classified as nonperforming assets, but are charged off and interest accrued is suspended based upon an established delinquency schedule determined by product. Real estate acquired in satisfaction of loans is carried in other assets at the lower of the recorded investment in the property or fair value minus estimated costs to sell. Transactions in the allowance for credit losses are summarized as follows:
(In millions) Three Months Ended March 31, 2007 ---------------------------------------------- Allowance for Allowance for Lending-Related Allowance for Loan Losses Commitments Credit Losses -------------- --------------- ------------- Balance, beginning of period $ 287 $ 150 $ 437 Charge-offs - (5) (5) Recoveries 8 - 8 -------------- --------------- ------------- Net (charge-offs)/recoveries 8 (5) 3 Provision (5) (10) (15) -------------- --------------- ------------- Balance, end of period $ 290 $ 135 $ 425 ============== =============== =============
64
(In millions) Three Months Ended March 31, 2006 ---------------------------------------------- Allowance for Allowance for Lending-Related Allowance for Loan Losses Commitments Credit Losses -------------- --------------- ------------- Balance, beginning of period $ 326 $ 144 $ 470 Charge-offs (2) - (2) Recoveries 6 - 6 -------------- --------------- ------------- Net (charge-offs)/recoveries 4 - 4 Provision 4 (4) - -------------- --------------- ------------- Balance, end of period $ 334 $ 140 $ 474 ============== =============== =============
7. Other Assets ------------ March 31, December 31, (In millions) 2007 2006 - ------------- --------- ---------- Accounts and interest receivable $ 2,621 $ 3,443 Fails to deliver 1,136 1,523 Other investments 963 857 Prepaid pension assets 624 635 Software 387 388 Margin deposits 494 324 Prepaid expenses 250 223 Due from customers on acceptances 285 213 Other 2,301 2,367 --------- ---------- Total other assets $ 9,061 $ 9,973 ========= ========== 8. Net Interest Income -------------------
Quarter Ended (In millions) --------------------------------- March 31, December 31, March 31, 2007 2006 2006 ------ ------ ------- Interest Income - --------------- Loans $ 407 $ 422 $ 310 Margin loans 84 83 77 Securities Taxable 293 274 265 Exempt from federal income taxes 1 1 9 ------ ------ ------ 294 275 274 Deposits in banks 146 167 86 Federal funds sold and securities purchased under resale agreements 57 78 15 Trading assets 33 32 51 ------ ------ ------ Total interest income 1,021 1,057 813 ------ ------ ------ Interest Expense - ---------------- Deposits 400 397 298 Federal funds purchased and securities sold under repurchase agreements 19 16 20 Other borrowed funds 13 30 20 Customer payables 42 43 40 Long-term debt 120 120 96 ------ ------ ------ Total interest expense 594 606 474 ------ ------ ------ Net interest income $ 427 $ 451 $ 339 ====== ====== ======
65 9. Capital Transactions -------------------- The Company has 5 million authorized shares of Class A convertible preferred stock having a par value of $2.00 per share. At December 31, 2006, 3,000 shares were outstanding. On January 22, 2007, the Company redeemed 300 shares of Class A convertible preferred stock at a per share redemption price of $25 plus accrued dividends of $11.03. The remaining 2,700 shares were converted into Company common stock with shareholders receiving 7.39644 shares of Company common stock for each share of Class A convertible preferred stock. In addition to the Class A preferred stock, the Company has 5 million authorized shares of preferred stock having no par value, with no shares outstanding at March 31, 2007 and December 31, 2006, respectively. On April 10, 2007, the Board of Directors declared a quarterly dividend of 22 cents per share payable May 4, 2007 to shareholders of record on April 25, 2007. The Company repurchased 363,080 shares of the Company's common stock in the first quarter of 2007. 10. Earnings Per Share ------------------ The following table illustrates the computations of basic and diluted earnings per share:
(In millions, Three Months Ended except per share amounts) March 31, ------------------ 2007 2006 -------- -------- Income from continuing operations $ 437 $ 360 Income (loss) from discontinued operations (3) 62 -------- -------- Net income (1) $ 434 $ 422 ======== ======== Basic weighted average shares outstanding 751 764 Shares issuable upon conversion of employee stock options 12 10 -------- -------- Diluted weighted average shares outstanding 763 774 ======== ======== Basic earnings per share: Income from continuing operations $ 0.58 $ 0.47 Income from discontinued operations - 0.08 Net income 0.58 0.55 Diluted earnings per share: Income from continuing operations $ 0.57 $ 0.47 Income from discontinued operations - 0.08 Net income 0.57 0.55 (1) Net income, net income available to common shareholders and diluted net income are the same for all periods presented.
66 11. Employee Benefit Plans ---------------------- The components of net periodic benefit cost are as follows:
Pension Benefits Healthcare Benefits ------------------- ------------------- Three Months Ended Three Months Ended March 31, March 31, ------------------- ------------------ Domestic Foreign Domestic --------- --------- ------------------ (In millions) 2007 2006 2007 2006 2007 2006 - --------------------- ---- ---- ---- ---- ----- ----- Net periodic cost (income) Service cost $ 10 $ 12 $ 2 $ 2 $ - $ - Interest cost 12 13 3 3 3 2 Expected return on assets (26) (25) (4) (3) (1) (1) Other 5 9 1 1 2 3 ---- ---- ---- ---- ----- ----- Net periodic cost (income)(1) $ 1 $ 9 $ 2 $ 3 $ 4 $ 4 ==== ==== ==== ==== ===== ===== (1) Pension benefits expense includes discontinued operations expense $1.5 million for the three months ended March 31, 2006.
12. Income Taxes ------------ The statutory federal income tax rate is reconciled to the Company's effective income tax rate below: Three Months Ended March 31, ------------------ 2007 2006 ------ ------ Federal rate 35.0% 35.0% State and local income taxes, net of federal income tax benefit 3.0 2.2 Nondeductible expenses 0.1 0.2 Credit for synthetic fuel investments (1.2) (1.0) Credit for low-income housing investments (1.2) (1.9) Tax-exempt income from municipal securities (0.1) (0.1) Other tax-exempt income (1.0) (1.2) Foreign operations (0.7) (0.9) Leveraged lease portfolio (1.1) (0.1) Tax reserve - LILO exposure 0.1 0.6 Other - net (0.7) (0.1) ------ ------ Effective rate 32.2% 32.7% ====== ====== The Company adopted the provisions of FASB Interpretation No. 48 ("FIN 48"), "Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement No. 109," on January 1, 2007. As a result of the implementation of FIN 48, the Company recognized a $27 million increase in its liability for uncertain tax benefits ("Tax Reserves"), which reduced the January 1, 2007, retained earnings balance. The Company's total Tax Reserves as of the date of adoption were $250 million. If these Tax Reserves were unnecessary, $174 million would affect the effective tax rate in future periods and $76 million would impact deferred taxes. Included in the above Tax Reserves is accrued interest and penalties, where applicable, of $31 million. The Company recognizes accrued interest and penalties, if applicable, related to income taxes in income tax expense. The Company's federal consolidated income tax returns are closed to examination through 1995. Although the IRS has completed its examination for 1996 and 1997, at this time a formal revenue agent's report has not been received. The Company believes it is unlikely that there will be any changes to those years that would affect the Tax Reserves. The IRS is currently examining the Company's 67 consolidated income tax returns for tax years 1998 through 2002. The Company's New York State and New York City return examinations have been completed through 1993. New York State and New York City are currently examining the Company's tax returns for the years 1994 through 1996. The Company's United Kingdom income tax returns are closed through 1999. The Company has Tax Reserves related to transactions occurring in the years 1998 through 2002 that are currently under examination by the IRS. The outcome of such examination is not yet determinable. Additionally, the Company has Tax Reserves for uncertain tax benefits associated with certain tax credits. The Company does not expect that the resolution of these and other issues over the next twelve months will have a material impact on its financial statements. 13. Derivatives and Hedging Relationships ------------------------------------- Derivative contracts, such as futures contracts, forwards, interest rate swaps, foreign currency swaps and options and similar products used in trading activities, are recorded at fair value. The Company does not recognize gains or losses at the inception of derivative transactions if the fair value is not determined based upon observable market transactions and market data. Gains and losses are included in foreign exchange and other trading activities in noninterest income. Unrealized gains and losses are reported on a gross basis in trading account assets and trading liabilities, after taking into consideration master netting agreements. The Company enters into various derivative financial instruments for non-trading purposes primarily as part of its asset/liability management ("ALM") process. These derivatives are designated as fair value and cash flow hedges of certain assets and liabilities when the Company enters into the derivative contracts. Gains and losses associated with fair value hedges are recorded in income as well as any change in the value of the related hedged item. Gains and losses on cash flow hedges are recorded in other comprehensive income. If a derivative used in ALM does not qualify as a hedge it is marked to market and the gain or loss is included in net interest income. The Company formally documents all relationships between hedging instruments and hedged items, as well as its risk-management objectives and strategy for undertaking various hedge transactions. This process includes linking all derivatives that are designated as fair value hedges to specific assets or liabilities on the balance sheet. The Company formally assesses both at the hedge's inception and on an ongoing basis whether the derivatives that are used in hedging transactions are highly effective and whether those derivatives are expected to remain highly effective in future periods. The Company evaluates ineffectiveness in terms of amounts that could impact a hedge's ability to qualify for hedge accounting and the risk that the hedge could result in more than a de minimus amount of ineffectiveness. At inception, the potential causes of ineffectiveness related to each of its hedges is assessed to determine if the Company can expect the hedge to be highly effective over the life of the transaction and to determine the method for evaluating effectiveness on an ongoing basis. Recognizing that changes in the value of derivatives used for hedging or the value of hedged items could result in significant ineffectiveness, the Company has processes in place designed to identify and evaluate such changes when they occur. Quarterly, the Company performs a quantitative effectiveness assessment and records any ineffectiveness. The Company utilizes interest rate swap agreements to manage its exposure to interest rate fluctuations. For hedges of fixed-rate loans, asset-backed securities, deposits and long-term debt, the hedge documentation specifies the terms of the hedged items and interest rate swaps and indicates that the derivative is hedging a fixed rate item and is a fair value hedge, that the hedge exposure is to the changes in the fair value of the hedged item due to changes in benchmark interest rates, and that the strategy is to eliminate fair value variability by converting fixed rate interest payments to LIBOR. 68 The fixed-rate loans hedged generally have a maturity of 9 to 12 years and are not callable. These loans are hedged with "pay fixed rate, receive variable rate" swaps with similar notional amounts, maturities, and fixed rate coupons. The swaps are not callable. At March 31, 2007, $42 million of loans were hedged with interest rate swaps which had notional values of $42 million. The securities hedged generally have a weighted average life of 10 years or less and are callable six months prior to maturity. These securities are hedged with pay fixed rate, receive variable rate swaps of like maturity, repricing and fixed-rate coupon. The swaps are callable six months prior to maturity. At March 31, 2007, $227 million of securities were hedged with interest rate swaps which had notional values of $227 million. The fixed-rate deposits hedged generally have original maturities of 1 to 12 years (21% are one year deposits) and, except for three deposits, are not callable. These deposits are hedged with receive fixed rate, pay variable rate swaps of similar maturity, repricing and fixed rate coupon. The swaps are not callable except for the three that hedge the callable deposits. At March 31, 2007, $880 million of deposits were hedged with interest rate swaps which had notional values of $880 million. The fixed-rate long-term debt hedged generally has an original maturity of 4 to 30 years. The Company issues both callable and non- callable debt. The non-callable debt is hedged with simple interest rate swaps similar to those described for deposits. Callable debt is hedged with callable swaps where the call dates of the swaps exactly match the call dates of the debt. At March 31, 2007, $6,212 million of debt was hedged with interest rate swaps which had notional values of $6,237 million. In addition to the fair value hedges discussed above, the Company has two cash flow hedges utilizing interest rate swaps to hedge the variability in expected future cash flows attributable to floating rates on an a deposit and a long-term debt issue. The hedge documentation specifies the terms of the hedged items and interest rate swaps and indicates that the derivative is hedging future variable interest payments and is a cash flow hedge, that the hedge exposure is the variability in interest payments, and that the strategy is to eliminate variability by converting floating rate interest payments to fixed payments. For cash flow hedges the interest rate swap is marked to market with the changes in value recorded in other comprehensive income. The amount recognized as other comprehensive income for the cash flow hedge is reclassified to net interest income as interest is realized on the hedged item. The deposit hedged has a principal amount of $275 million and has a LIBOR based floating rate and an 18 month original maturity. The deposit is hedged with a receive LIBOR, pay fixed rate swap with the same maturity and interest payment dates as the deposit to eliminate the variability in interest payments on the deposit. During the next twelve months, net losses of less than $1 million (pre-tax) included in other comprehensive income are expected to be reclassified to income. The long-term debt hedged has a principal amount of $400 million and has a LIBOR based floating rate and a 2 year original maturity. The debt is hedged with a receive LIBOR, pay fixed rate swap with the same maturity and interest payment dates as the debt to eliminate the variability in interest payments on the debt. During the next twelve months, net losses of less than $2 million (pre-tax) included in other comprehensive income are expected to be reclassified to income. In addition, the Company enters into foreign exchange hedges. The Company uses forward foreign exchange contracts with maturities of 12 months or less to hedge its Sterling and Euro foreign exchange exposure with respect to forecasted expense transactions in non-U.S. entities which have the U.S. dollar as their functional currency. As of March 31, 2007, the hedged forecasted foreign currency transactions and linked foreign exchange forward hedges were $93 million with $3 million (pre-tax) gains recorded in other comprehensive income. These gains are expected to be reclassified to expense over the next nine months. 69 Forward foreign exchange contracts are also used to hedge the value of the Company's investments in foreign subsidiaries. These forward contracts have a maturity of less than six months. The derivatives employed are designated as net investment hedges of changes in value of the Company's foreign investment due to exchange rates, such that changes in value of the forward exchange contracts offset the changes in value of the foreign investments due to changes in foreign exchange rates. The change in fair market value of these contracts is deferred and reported within accumulated translation adjustments in shareholders' equity, net of tax effects. At March 31, 2007, foreign exchange contracts, with notional amounts totaling $1,894 million, were designated as hedges of corresponding amounts of net investments. The Company discontinues hedge accounting prospectively when it determines that a derivative is no longer an effective hedge, the derivative expires or is sold, or management discontinues the derivative's hedge designation. Ineffectiveness related to derivatives and hedging relationships was recorded in income as follows: (In millions) Three Months Ended March 31, Hedges 2007 2006 ------------------------- ----------- ----------- Fair value hedge of loans $ (0.1) $ 0.2 Fair value hedge of securities 0.1 - Fair value hedge of deposits and long-term debt (0.5) 0.5 Cash flow hedges (0.5) (0.2) Other - (0.3) ----------- ----------- Total $ (1.0) $ 0.2 =========== =========== Other includes ineffectiveness recorded on foreign exchange hedges. 14. Commitments and Contingent Liabilities -------------------------------------- In the normal course of business, various commitments and contingent liabilities are outstanding which are not reflected in the accompanying consolidated balance sheets. Management does not expect any material losses to result from these matters. The Company's significant trading and off-balance sheet risks are securities, foreign currency and interest rate risk management products, commercial lending commitments, letters of credit, and securities lending indemnifications. The Company assumes these risks to reduce interest rate and foreign currency risks, to provide customers with the ability to meet credit and liquidity needs, to hedge foreign currency and interest rate risks, and to trade for its own account. These items involve, to varying degrees, credit, foreign exchange, and interest rate risk not recognized in the balance sheet. The Company's off-balance sheet risks are managed and monitored in manners similar to those used for on-balance sheet risks. There are no significant industry concentrations of such risks. A summary of the notional amount of the Company's off-balance sheet credit transactions, net of participations, at March 31, 2007 and December 31, 2006 follows: Off-Balance Sheet Credit Risks - ------------------------------ March 31, December 31, (In millions) 2007 2006 - ----------------------------------- ------------ ----------- Lending commitments $ 37,530 $ 37,364 Standby letters of credit 10,410 10,902 Commercial letters of credit 1,064 1,195 Securities lending indemnifications 396,722 398,675 70 The total potential loss on undrawn commitments, standby and commercial letters of credit, and securities lending indemnifications is equal to the total notional amount if drawn upon, which does not consider the value of any collateral. Since many of the commitments are expected to expire without being drawn upon, the total amount does not necessarily represent future cash requirements. The allowance for lending-related commitments at March 31, 2007 and December 31, 2006 was $135 million and $150 million. A securities lending transaction is a fully collateralized transaction in which the owner of a security agrees to lend the security through an agent (the Company) to a borrower, usually a broker/dealer or bank, on an open, overnight or term basis, under the terms of a prearranged contract, which generally matures in less than 90 days. The Company generally lends securities with indemnification against broker default. The Company generally requires the borrower to provide 102% cash collateral which is monitored on a daily basis, thus reducing credit risk. Security lending transactions are generally entered into only with highly-rated counterparties. At March 31, 2007 and December 31, 2006, securities lending indemnifications were secured by collateral of $407.3 billion and $405.5 billion, respectively. Standby letters of credit principally support corporate obligations and include $1.1 billion that were collateralized with cash and securities on March 31, 2007 and $1.0 billion on December 31, 2006. At March 31, 2007, approximately $6.8 billion of the standby letters of credit will expire within one year, and the remaining balance will expire between one to five years. The notional amounts for other off-balance sheet risks (See "Trading Activities" in the MD&A section) express the dollar volume of the transactions; however, credit risk is much smaller. The Company performs credit reviews and enters into netting agreements to minimize the credit risk of foreign currency and interest rate risk management products. The Company enters into offsetting positions to reduce exposure to foreign exchange and interest rate risk. Other - ----- The Company has provided standard representations for underwriting agreements, acquisition and divestiture agreements, sales of loans and commitments, and other similar types of arrangements and customary indemnification for claims and legal proceedings related to its provision of financial services. Insurance has been purchased to mitigate certain of these risks. The Company is a minority equity investor in, and member of, several industry clearing or settlement exchanges through which foreign exchange, securities, or other transactions settle. Certain of these industry clearing or settlement exchanges require their members to guarantee their obligations and liabilities or to provide financial support in the event other partners do not honor their obligations. It is not possible to estimate a maximum potential amount of payments that could be required with such agreements. In the ordinary course of business, the Company makes certain investments that have tax consequences. From time to time, the IRS may question or challenge the tax position taken by the Company. The Company engaged in certain types of structured cross-border leveraged leasing investments, referred to as "LILOs", prior to mid-1999 that the IRS has challenged. In 2004, the IRS proposed adjustments to the Company's tax treatment of these transactions. On February 28, 2006, the Company settled this matter with the IRS relating to LILO transactions closed in 1996 and 1997. The settlement did not affect 2006 net income, as the impact of the settlement was fully reserved. The Company's 1998 leveraged lease transactions are in a subsequent audit cycle and were not part of the settlement. The Company believes that a comparable settlement for 1998 may be possible, given the similarity between these leases and the settled leases. However, negotiations are ongoing and the treatment of the 1998 leases may still be litigated if an acceptable settlement cannot be reached. Under current U.S. generally accepted accounting principles, if the 1998 leases are settled on a basis comparable to the 1996 and 1997 leases, the Company would not expect the settlement of the 1998 leases to have an impact on net income, based on existing reserves. 71 In the fourth quarter of 2005 the Company deposited funds with the IRS in anticipation of reaching a settlement on all of its LILO investments. On February 11, 2005, the IRS released Notice 2005-13, which identified certain lease investments known as "SILOs" as potentially subject to IRS challenge. The Company believes that certain of its lease investments entered into prior to 2004 may be consistent with transactions described in the notice. Although it is likely the IRS will challenge the tax benefits associated with these leases in 2007, the Company remains confident that its tax treatment of the leases complied with statutory, administrative and judicial authority existing at the time they were entered into. In 2001 and 2002, the Company entered into various structured transactions that involved, among other things, the payment of U.K. corporate income taxes that were credited against the Company's U.S. corporate income tax liability. The IRS is currently reviewing these transactions and it is likely that some or all of the credits will be challenged upon completion of the review. If necessary the Company will vigorously defend its position and believes that any tax benefits associated with these transactions were consistent with the applicable statutory, judicial and administrative authority. The Company currently believes it has adequate tax reserves to cover its LILO exposure and any other potential tax exposures, based on a probability assessment of various potential outcomes. Probabilities and outcomes are reviewed as events unfold, and adjustments to the reserves are made when appropriate. In the ordinary course of business, the Company and its subsidiaries are routinely defendants in or parties to a number of pending and potential legal actions, including actions brought on behalf of various classes of claimants, and regulatory matters. Claims for significant monetary damages are asserted in certain of these actions and proceedings. Due to the inherent difficulty of predicting the outcome of such matters, the Company cannot ascertain what the eventual outcome of these matters will be; however, based on current knowledge and after consultation with legal counsel, the Company does not believe that judgments or settlements, if any, arising from pending or potential legal actions or regulatory matters, either individually or in the aggregate, after giving effect to applicable reserves, will have a material adverse effect on the consolidated financial position or liquidity of the Company although they could have a material effect on net income for a given period. The Company intends to defend itself vigorously against all of the claims asserted in these legal actions. See discussion of contingent legal matters in the "Legal and Regulatory Proceedings" section. 72 QUARTERLY REPORT ON FORM 10-Q THE BANK OF NEW YORK COMPANY, INC. UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended March 31, 2007 Commission file number 001-06152 THE BANK OF NEW YORK COMPANY, INC. Incorporated in the State of New York I.R.S. Employer Identification No. 13-2614959 Address: One Wall Street New York, New York 10286 Telephone: (212) 495-1784 As of April 30, 2007, The Bank of New York Company, Inc. had 758,522,492 shares of common stock ($7.50 par value) outstanding. The Bank of New York Company, Inc. (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months(or such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. The registrant is a large accelerated filer (as defined in Rule 12b-2 of the Exchange Act). The registrant is not a shell company (as defined in Rule 12b-2 of the Exchange Act). The following sections of the Financial Review set forth in the cross- reference index are incorporated in the Quarterly Report on Form 10-Q. Cross-reference Page(s) - ----------------------------------------------------------------------------- PART I FINANCIAL INFORMATION Item 1 Financial Statements Consolidated Balance Sheets as of March 31, 2007 and December 31, 2006 51 Consolidated Statements of Income for the Three Months Ended March 31, 2007, December 31, 2006 and March 31, 2006 52 Consolidated Statement of Changes in Shareholders' Equity for the Three Months Ended March 31, 2007 53 Consolidated Statement of Cash Flows for the Three Months Ended March 31, 2007 and 2006 54 Notes to Consolidated Financial Statements 55 - 71 Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations 3 - 50 Item 3 Quantitative and Qualitative Disclosures About Market Risk 42 - 44 73 ITEM 4. CONTROLS AND PROCEDURES Disclosure Controls and Procedures The Company's Disclosure Committee, whose members include the Chief Executive Officer and Chief Financial Officer, has responsibility for ensuring that there is an adequate and effective process for establishing, maintaining, and evaluating disclosure controls and procedures that are designed to ensure that information required to be disclosed by the Company in its SEC reports is timely recorded, processed, summarized and reported. In addition, the Company's ethics hotline can also be used by employees for the anonymous communication of concerns about financial controls or reporting matters. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives. As of the end of the period covered by this report, an evaluation was carried out under the supervision and with the participation of the Company's management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Company's disclosure controls and procedures as defined in Exchange Act Rule 13a-15(e) and 15d- 15(e). Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective. Changes in Internal Control Over Financial Reporting In the ordinary course of business, the Company may routinely modify, upgrade or enhance its internal controls and procedures for financial reporting. There have not been any changes in the Company's internal controls over financial reporting as defined in Exchange Act Rule 13a-15(f) and 15d-15(f) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting. PART II. OTHER INFORMATION ITEM 1. LEGAL AND REGULATORY PROCEEDINGS In the ordinary course of business, the Company and its subsidiaries are routinely defendants in or parties to a number of pending and potential legal actions, including actions brought on behalf of various classes of claimants, and regulatory matters. Claims for significant monetary damages are asserted in certain of these actions and proceedings. In regulatory enforcement matters, claims for disgorgement and the imposition of penalties and/or other remedial sanctions are possible. Due to the inherent difficulty of predicting the outcome of such matters, the Company cannot ascertain what the eventual outcome of these matters will be; however, on the basis of current knowledge and after consultation with legal counsel, the Company does not believe that judgments or settlements, if any, arising from pending or potential legal actions or regulatory matters, either individually or in the aggregate, after giving effect to applicable reserves, will have a material adverse effect on the consolidated financial position or liquidity of the Company, although they could have a material effect on net income for a given period. The Company intends to defend itself vigorously against all of the claims asserted in these legal actions. As previously disclosed in the Company's 2006 Annual Report on Form 10-K, the U.S. Securities and Exchange Commission ("SEC") is investigating 1) the appropriateness of certain expenditures made in connection with marketing and distribution of the Hamilton Funds; 2) possible market-timing transactions cleared by Pershing LLC ("Pershing"); and 3) the trading activities of Pershing Trading Company LP, a floor specialist, on two regional exchanges from 1999 to 2004. As to market-timing, the Company has learned that the SEC is considering not pursuing the matter further. 74 Because the conduct at issue in the Pershing market timing and floor specialist investigations is alleged to have occurred largely during the period when Pershing was owned by Credit Suisse First Boston (USA), Inc. ("CSFB"), the Company has made claims for indemnification against CSFB relating to these matters under the agreement relating to the acquisition of Pershing. CSFB is disputing these claims for indemnification. ITEM 1A. RISK FACTORS See "Forward-Looking Statements and Risk Factors" in "Management's Discussion and Analysis of Financial Condition and Results of Operations." There have been no material changes to the risk factors discussed in the Company's Annual Report on Form 10-K for the year ended December 31, 2006. ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS Shares of the Company's common stock were issued in the following transactions exempt from registration under the Securities Act of 1933 pursuant to Section 4(2) thereof: (a) Shares of common stock were issued to former directors who had deferred receipt of such common stock pursuant to the Deferred Compensation Plan for Non-Employee Directors of The Bank of New York Company, Inc. On March 13, 2007, 7,872 shares of common stock were issued to three current directors as part of their annual retainer as non- employee directors. Richard J. Kogan, John A. Luke, Jr. and Richard C. Vaughan each received 2,624 shares. These transactions were exempt from registration under the Securities Act of 1933 pursuant to Section 4(2). (c) Under its stock repurchase program, the Company buys back shares from time to time. The following table discloses the Company's repurchases of the Company's common stock made during the first quarter of 2007. Issuer Purchases of Equity Securities - ------------------------------------- Total Number Maximum Total Average of Shares Number of Shares Number Price Purchased as That May be Period of Shares Paid Part of Repurchased Purchased Per Share Publicly Under the Plans Announced Plans or Programs or Programs - -------------- ---------- ---------- --------------- ------------------ January 1-31 148,423 $ 38.38 148,423 7,973,562 February 1-28 211,620 41.46 211,620 7,761,942 March 1-31 3,037 39.37 3,037 7,758,905 ---------- --------------- Total 363,080 363,080 ========== =============== Shares were repurchased through the Company's stock repurchase programs announced on July 12, 2005 and June 30, 2006, which permit the repurchase of 34 million shares. 75 ITEM 6. EXHIBITS Pursuant to the rules and regulations of the Securities and Exchange Commission, the Company has filed certain agreements as exhibits to this Quarterly Report on Form 10-Q. These agreements may contain representations and warranties by the parties. These representations and warranties have been made solely for the benefit of the other party or parties to such agreements and (i) may have been qualified by disclosures made to such other party or parties, (ii) were made only as of the date of such agreements or such other date(s) as may be specified in such agreements and are subject to more recent developments, which may not be fully reflected in the Company's public disclosure, (iii) may reflect the allocation of risk among the parties to such agreements and (iv) may apply materiality standards different from what may be viewed as material to investors. Accordingly, these representations and warranties may not describe the Company's actual state of affairs at the date hereof and should not be relied upon. 2.1 Amended and Restated Agreement and Plan of Merger, dated as of December 3, 2006, as amended and restated as of February 23, 2007, and as further amended and restated as of March 30, 2007, between The Bank of New York Company, Inc., Mellon Financial Corporation and The Bank of New York Mellon Corporation (incorporated by reference to Annex A to Amendment No. 1 to the Registration Statement on Form S-4 filed by The Bank of New York Mellon Corporation with the SEC on April 2, 2007), incorporated by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K as filed with the Commission on April 5, 2007. 3.1 The By-Laws of The Bank of New York Company, Inc. as amended through April 12, 2005, incorporated by reference to Exhibit 3(ii) to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2005. 3.2 Restated Certificate of Incorporation of The Bank of New York Company, Inc. dated May 8, 2001, incorporated by reference to Exhibit 4 to the Company's Registration Statement on Form S-3 filed June 7, 2001 (File No. 333-62516, 333-62516-01, 333-62516-02, 333-62516-03 and 333-62516-04). 4 None of the outstanding instruments defining the rights of holders of long-term debt of the Company represent long-term debt in excess of 10% of the total assets of the Company. The Company hereby agrees to furnish to the Commission, upon request, a copy of any such instrument. 12 Ratio of Earnings to Fixed Charges for the Three Months Ended March 31, 2007 and 2006. 31.1 Certification of Chairman and Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2 Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1 Certification of Chairman and Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 32.2 Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 76 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. THE BANK OF NEW YORK COMPANY, INC. ---------------------------------- (Registrant) Date: May 9, 2007 By: /s/ Thomas J. Mastro -------------------------------- Name: Thomas J. Mastro Title: Comptroller 77 EXHIBIT INDEX ------------- Exhibit Description - ------- ----------- 2.1 Amended and Restated Agreement and Plan of Merger, dated as of December 3, 2006, as amended and restated as of February 23, 2007, and as further amended and restated as of March 30, 2007, between The Bank of New York Company, Inc., Mellon Financial Corporation and The Bank of New York Mellon Corporation (incorporated by reference to Annex A to Amendment No. 1 to the Registration Statement on Form S-4 filed by The Bank of New York Mellon Corporation with the SEC on April 2, 2007), incorporated by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K as filed with the Commission on April 5, 2007. 3.1 The By-Laws of The Bank of New York Company, Inc. as amended through April 12, 2005, incorporated by reference to Exhibit 3(ii) to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2005. 3.2 Restated Certificate of Incorporation of The Bank of New York Company, Inc. dated May 8, 2001, incorporated by reference to Exhibit 4 to the Company's Registration Statement on Form S-3 filed June 7, 2001 (File No. 333-62516, 333-62516-01, 333-62516-02, 333-62516-03 and 333-62516-04). 4 None of the outstanding instruments defining the rights of holders of long-term debt of the Company represent long-term debt in excess of 10% of the total assets of the Company. The Company hereby agrees to furnish to the Commission, upon request, a copy of any such instrument. 12 Ratio of Earnings to Fixed Charges for the Three Months Ended March 31, 2007 and 2006. 31.1 Certification of Chairman and Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2 Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1 Certification of Chairman and Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 32.2 Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. GRAPHIC 3 dblogo.gif begin 644 dblogo.gif M1TE&.#EAL0`H`/?_```````"9``!;`H*9P@(:P``=```>@4)=`,)?`D&=@P& M?`P*=0H+?0H09!(,;A`.?!@4;1$1A0B`8?2,B>RPL M?3HZ?@`!@P$!B@4(@00)BPH$@P@$C`H*A`L*B@$!D@`!F0,)D0@#D@@$F0P, MD0L)FPL1@0T1C@L1D!`,AQ`,E1,2A1(2BA8L%UEE5MBFEYCIEYAJ%UBLE]BO&)=C61(NXR'MXR) ML8N+NHJ0M(R2NI.3J).4M9*5O968O)R:O)N@O**BO(6"Q8>*P8V.PXZ1SI&. MT9>6P9*2RI6:RYJ7QIF7R)R=Q)V:RY.4T9J4TIRZS[BXSK6RUKJVUKFSVKJ] MT[^_V;W"T[S`V<"_U<"_V\/#U\_5VM/4U=+3WM?=VMK7W]C8VL;&X<#`ZL?/ MX[>#BY./DZN;I[NKGY^CEZ>OMY.GKZN3H\NOG\NOL\>[RY^SP\^[R^_'M M_/#Q[/7U]0```````````"'Y!`$!`/\`+`````"Q`"@`0`C_``$('$BPH,&# M"!,J7,BPH<.'$"-*/,BOHL6+&#-JW,BQH\>/($.*'+GQ$0<4(D1XX+"R)!PZ3';\?QZ\%!2-QI?A]MG`(B!QHR M21:("##MXCQHJ3AL$+W,``=<%6.-V(".WR`.,,)LX*`XY*,1(3S\V+EJ`PJG M9*E*GTZ]>LZGUK-KWWY<9920W:J)_[,VK1T_3DRA;U_/7KK5H1HW;6@A8D4" MC6'56S2+UF*/$@84@Q$^)"EA`%L#AD09!YMX9,]'4W`0PD4@;)`$3[]MH`]. M[U6$3P%-=87*1_F-=9$(*-B`!AI6&.#!"'M4-(UMF/`#3@$<<,$/.@6,8,4[ MH#$P@GG\-%$"",ADXXX`!312D00D],&/)6\)PP\-'$BPHP$C7%)1-V^)P\\F M)!S0##^F&"!`+:-)^,@C@A1Q`@D+\-/+6ZKXEA<@_!PCVRP5\;*!`;T5(AL_ MSXS`@1/&,972HY!&*JFD(3B!77N89JII1I=NZNFG&`$UZ:BDTF0BJ*BB"M0( M0^S4R@@,Z/^7ZJR:=NB1,@8TI<(&WU148J>T!JN=K1L9@%)0P&#T:W3"-IL= ML1=5D$((+1@@QT;+7I2""+)M,`()&UPA%2D[E<,!"9?U-,4(*1A0P`8D<"!` M3Y#XE1.T:$@HP@D0>)3M?F=AQ*42%6&1%Q@UC"``@,!#`0)P,,+,&?+CC0$D(-$HMT-A4PDGGX22R8,?-??< MJ16A``)\%`'-?10A]8@B@WR MXXLALY+(Q9(PA0.MTHDGF&+$+7;QC)ECR@;"Z!$T]&@#!2!` M19JS@C*B\8YI#`H;.;(!%Z`@!200S1PW4$H@`/'T(@GCPA*%XKR(G*`%4H< MLY%5;C%6181!!;Z0/E2A0P`?6!Q/F(``!G1`!#"001Y\0@@1M&!#)'EE13[@ M@:,HHB.V/!$'?M"-8W`"`QX(ET\.48`6[.0G'@7FID8R\L)O\"`\ROEH2D9$5"P($I7&0:2HM11201@@U\@`GED-$"(C", MBC0"!@.8ARDHX`(4R8!E;3&!`#:0@7!8A!Y9&-0+0E$1=`Q'%(^(U18PTH6\ MA.`+'8G0"R[")2]49!]?^$`!/I`$=CS&`0[8QQ@4U8.\#<(O&W+$"Q(PHH]8 MI3\VJ(Q?J@"2;.ZGH!@)P0A8ABL#1(,?\O#6'^Z2E[WP0Q&5(9(3.+`#B\!@ M`[^HB!C*T)HO2&P>F\'!O%PJ`EIVX2T\<\0(/("9#:12(U/02@'`U1B+Q.-= MH*A(7N16.A'HH")4\(`!>%8(H^3C`B9HP`U%4`*#ZL1K`N4'M[YCD7G_O.L) M_"##!E10`'?9Q@",X\##^L(!(@D&<17)!8Y&4``0"+(&"$#015S*@<6%8U!B M6D!7!*"[#8QA-!O0DG_`):,)#,I8L^F37]C$#T$1BA^&>D$(VC42H'A`"NL8 MAW[WR]_^\A<=B:A9!Z9P*11PH`D6$8>Q#-":/0S*(N/81FND(1M>5.0+X#+N M8"QRCJ_P8QX*&($6^*$$#IB3'WHHYX[2^:7=6(/$'`B"19RQ#2)E)$+BK<@5 M*H0/7<@F'A493B34RP%;5*06;UG=`?@QA+=$TJJ.0@$*6"#E*EOYREA&D0=^ MI[1N^64#?+((%[PE.A(4`+!,/F\!H"`;=53D7!#>ZBV*E4:##RB,:Q:HS+OJ MEHZ\.*(BVO!+-RJ"`3W;)@,I6N_K5K@X(`#L_ ` end GRAPHIC 4 graph0.gif begin 644 graph0.gif M1TE&.#EA;@$,`??_`````$U-36AH:'Q\?&-]I8R,C)J:FJ>GI[*RLKV]O'AX>GIZ?#P\/___P`````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M`````````````````````"'Y!`$!`/\`+`````!N`0P!0`C_``$('$BPH,&# M"!,J7,BPH<.'$"-*G$BQHL6+&#-JA`BAH\>/($.*'$FRI,F3*%.J7,FRIG/I4*M:P80&039NVK%>U7:EB52O5[%RQ<*F.G0NU[UF_ M@`/?%:S2KDVNA/L:3LRXL>/'D%LNCDRYLN7+$`K`A?#@0-7/50T<,+!YYN25 MI3&K1KVZ-00"L&$S/5W8M>W;N$42@,L@[P&ZO[<*:"`@=4S:*8VW5NZ:^6KG M@G=#17XSM_6NURD3`(T`P(*.`]0N__".-0"$`-1O0J^=O;U[QMM!SUZ?W#K] MR_XTMR*!0_3D8E80A4?C@A1BZU!]H M"@"@`'CBD2>0>>A9"%)Z)IDHF(J$L1B8BSQM*-]2*"J8X7,W0B4CC##52!*/ M.0:)H8PS*N7C2$`VE>1TURTY$Y%%)G6D2$X*V5.55HX$991(35EAEF"&J262 MT[F(99?9G8EF8%MR>927)XKYF)IAMNFF47!B)^>>0MIYYU!Y3F5?FDT"YB>= M*;(86TF+:BD;28WJ%FE(L6U9*:2/.FKGI"!QVFFFDK9YJ::,@DJIJ1Z-&JJH MGJ;:ZFNH?F+T:DCC?;?7E?=IED`"."W0'0#%?==1K1",YD"+.'6(``3$#DL> M!`H(*YBNO(KW:[`>-1LMLFHIZZRTS0YP+)]KD6ONN8767WG1U?&)J;F5L<>@B766R7^5:[+&**]\;U9QI6R8QAR3?#+)>AF< MF,44]QPFSSX''63`.@O=<]'EXCMHH4M'YF=01!M-$])U;@87L<3>BJ^94G?M MTW94IWQ#47H]=MZQ;E4GWW7S'%&%'Z'V' MM8@&U11UV8223=B&81_>-VM\,^[1KAZU36#^^T[QX\\+5'R#H#'[Y< M,J_HO&JN=.?U>0UEXUQ#;SVE5`K:46>?Y24::<[;C1O:AS'-)IE*FOG[^KZW M/SS[[[M_>_STSV^_\/<3C__^^O3QRW/6LUR;J[6U\ MB4.K("5V50EBU<(4J MA*$(-97"&9Y*AC!T80U?E4,=8NJ%/`SBK$IV.0.I*3V\DI:"@@.W<:UH1B$C MT`$^E)@DWD2*5'QBR$X4'`9`P`$#.!?0.$C&BY&OC&@,7QK7F"XVNK&-:10A MJ@B8EP+:,4IG#/_:&-_(1Y_LL8^`/%L>`TE(D!7RD,A"I"+]\L=%.C)1CXQD MEP8I23A`T7SH?8T-,/M":$'L:P-!I M20:"\#C_XU\^_=>^CLE/G__D9_T`.E"!`C"@^TPH0J7#%^7E!8%J?`DXX6D9 MANYK]CY)Z%XDZ(#XVAFO,@9"Y;L>PFD)QMH16J= M^#@0H^N4H$X;8]-[]@BE"^MI1T-74(46%:%(/:I2#[I4@C+UJ4Z-JD'Q)\"G M+,`\#MT*1,_IT>9$,*>)^=M0GP?4E&KOHF2M9^3TA%;QW8:FT=OIXMAZG@IV M;RLPC:A+X%K6OGS_;JQNG>E:Z>I.G+[UJX>%3YP`^].^ZHM(5Y.;V\@I'.+$ MM*O.O!MD013&P=FJ<%.3J5?5F=BY+K:MC75LO*;G4XGVD:^J86W*PJ/-SW(3 M1B?%$6D_&M8.SLARY90;5PVKVG5MZ:9I%6S7CMO:O2JNMT8^T-]G)%LBR M>I5,<=O50+9X]B[#Q"=FT0C;BDZ7L:Z5*W37VQ0[(3>PV^63>SU"VZP!X+8[ MR6T9RZL="G8$N%N!FW`G-%[5\/>\ZN5/BIJKW?B:ZX/H=6Y&C09AU+)$CAC. ML(8WS.$.>_C#(`ZQB$=,XA*;^,0H3K%"[@B`K2;3P3!.FDDT`P"6WBL`9SCN MY682L+.J!,`!`/*07DJF3!K;^#,X+M%=.P63$6-8N-5XYQ M-6.\P"USV7I>_G+GPBSFQY&YS'P[,YKKIN8U=ZW-Y,+PETP72_`JY\#U@G.< MK?K4871V7"\X3,9OTI'IV MB6N0Q31!0_99K%$C2V3&C,FX\B5S)):>NA"Z/3/CI<>FKMJW%-&Q[I9)FUFZEN646S'%S&V;QSJ2T"UAO M>K];=**$);EGB9>$T9K.WK[*+0O>.]*IN\\U`ZV=&SY`K2"DH;CC]VE][4]_ M)OR7[?Y)R*TT0F/;BL'X3RE9]:Y2YW3\MC/C28T[Q)-K]YV7*N.?.W M\KSG,^E-1YI(V>L>:+A;VXC2E\[TICO]Z5"/^D)2Q^,+MOCJV0TIT",(%V/5 M=N)(A^]R`"G2'O]"3;1CW^UHV=E.5!)WZZXQ^SP+C)F?KQTR\A0YVG7[W+N3 M-,(-AOMM+(K-[X[H/-WZHT<]YAFL]<_'O:1GISM^&(]WV,_=\WQ/<-I):GH)NWXU M*OT/!(AN76!A=_(2-2I4I\I/CR]?^5*%/O.E3_VD/I]W`LR6>3I2]>5A'?F^ MK[S?4Z]8T`2N6`8XEGW!XB[9_YZG>0-\ZU5/WMK;7N_NUP]BR=_;^[\8]^_W M=[T7>.)7?P+X7^1A>/>%>+BE>'6W?^,7'6=5`%Z451@$/N!'@`'H-&>'-1Z4 M57R2`P'A$49>MWZ])EYHJ'^O!7^$_R4E M-4B'EZ>$$W2';I=<:9B#12B"(U6`)=B"\6=AX<=_C(B#Y^.';Y*'@:@4FP4M M'O)U]H5?9PB(COA-B)B(=66!`"!YFRAV?!B!G>A7'_0>)>"*)D4%KKJ9,E:B(&BB+LTB+>'B$O4A[2VB,?VB*M[B'S_B( MS!B)R$B,$.);6%$A#@O6_B-7?@6X3B.7UB%Y&B.Y:B%PV-1N%8:9*A5 M9MA^TU MDELA()MG3J4H>JA8D"(YD0^9D`U2CZ?8D`Y9B\ZHDM=HDSXID_9XB#4IE,W@TEWCNIX?]X0/&(DD0AE91(0?KX6?R8@0,YDUBYDO[_!94>V8,@*9A. M^91#>7IT.105!I@_29AJE94]F92!:8,Z&8U^:9B2Z3=I8Q)/TYDRX9F&9[@N42O>'N)^6PH<54I$2Z#5#AFT2P/0&6"(9_Q M^2SYR2UR<9_[F(3JD1(&D`#8Q!7C@6]VQ2U94P#2<0!*M"?I81X-F%``4*865M22;--C#44@11=I**JB5=$A MK/@L,TI)SF==1;<`GC%K,Z%D;D2D7#9S[]D@!)JD*<>DPK:D3DJ=40II4#JE M+VBE$(.D6*H85;JEH':'FJ(\* :J?*RJ)+Z@E)WJ9B:J9JZJ9S:J9Y:$`$!`#L_ ` end GRAPHIC 5 graph1.gif begin 644 graph1.gif M1TE&.#EA;@$,`??_`````$U-36AH:'Q\?&-]I8R,C)J:FJ>GI[*RLKV]O'AX>GIZ?#P\/___P`````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M`````````````````````"'Y!`$!`/\`+`````!N`0P!0`C_``$('$BPH,&# M"!,J7,BPH<.'$"-*G$BQHL6+&#-JA`BAH\>/($.*'$FRI,F3*%.J7,FRIR;+'&79NV+M2[)K?BWSV@`$'$!8`6*`6K4S&+AU+UCJZI.C2 M7!\3@`JZY6G4L$>^CIV8`&6J![("R$VU`0#?-ELOIDV\./'5LXT*7YE<`/F]_V<;]=YB`A1$X%'T&UN3>3?(1EV"#/-'7W0+`^8;9;FX!($`# M`CPX&$T>0BCBB"E)R%Y4(8:(EXI[L7B7BSF9"*-K*9)8VHPVKF3BB4HM2%2. M0`8)TXX\^E5C<3BV9UZ20P+8E(]Y"?D8DU*&1&212$%I6I5<=OG1E5@>I25) M5(J97IEF[@5FF,H=Z:5@:%:YIF,(6,6;5;X!M].83K[IIXUKLCD4GR`18.BA MB":JZ**,-NKHHY!&*NFDE%9JZ:689JKIIHQ^=1]5"0`0*E`^%B`0=I\&H*I7 M["40F&X!.#P@@%4*=)5?G"V9"@"J^*D:`*L9XLJ<5;'.2JNMA!G[)UC+-NOL MC<(^*^VTH45+[;78DFEMMMQR2VBWX(;_2]ZVXI;[Y[?FIILNNNJV"RZ[[L9[ M+;SRUNLLO:C!I:]NP88DE5QPR<7LK0/K93!E_7J%'[,*,]SOAPX7S*_$$4\L MZ+GDVJOQF1EO['%-#+AEH9T9;MAA<&Y^'%/''-3/3$<]TWI`0XWDF4LB1C5K24O- MH-0(<@VSUV2K)&'57>>+=8"&G=W1```,`(%EF.5\D()IE]VGS#**/1-:@$LE M.,*$MU5X7'8%?GCB@QON..**/\[XXI%#WKCEE%\^N>25;XXYYX(CB!8#"GRZ ML*BHHSRV@VM?;`T8D6BOKG>4?(MT6W;;G;X?BU;/[GM'5\;^-]M9$Z\FF:F9 MGM_NJ@__^Y8J@RG\9\_//J='<&>VF@4Z_UR^W^BW MOZ2'.;OO4?SR3T9T_?@W=G_^_(_;__^*\1X`!__HE/T1\(`"0Z`"V;?`!AK) M@1#,D@$CF#\!4O""LID@!MUGP0UZ<&!`>MAK9L.8@#GE>PELBWC"<[`40DQF M'3Q/PAY6EQ;ZRV*"&\N^7&A#BC5,A3^LH6A,>)7+-6QP,81/$C&X1*DU\8,0 M?"(4&RC%*2KP9QO)HA:WR,4N>O&+8&0(XEQUNE"-"F^RBXT&SV>\PR"J/>"S M8K9<]C+G5=!Z#(3)&D,C/MKLL5!N,155E.<=\#2/>G),U]'@F$;Y_;%!BZPC M(L?71C_6QFFDBF,BJ54=""!@>Q#(GMT`L+.>H=&.^'MD?#JI/8_4"4.]^0WO M-'F>/JI1:X-$6B,WB:ULK>D2E?5397I\^4F<;6^4I?1>[RQ9/-<5)FP=T0S) MIHDG61Z2C;SD%C09"4Q'@NTM>6Q,)9GIS,"X[9>?T5SGUJG.=F;NG:"#Y^?F MZ;EZLE.>]G1G//=)SWON$SFC*UU'R)@?,\YRE^T3YG%(_X-.;)*SG`_M2]\: MJL=LSI&AW)QD*IFV([=02#>\@:553';0;JJMF924J+_>%C?M&9,S=P,1+2W: MI8Z&DX_\4RAL8'?3I4$THK=\G>T2*,KM"229/ILI3:7$TUQVY)5WDJ6>9(I0 M].FT-,'KZ7!^&E2N-B6K%!7G4IT%UJ+D#)G=2VI5JW=5R4@O>;`4J51+JM&N M>O5&*MU;CY0Z5D"E+Z,.#6;TH`?8BMX5K^-4#V&U\ZE"\J>`:^UKCM875IS> M47VT*ZQ84\I9NWXULY)\"1VM]$;2&HHDI15):DU[I=46ZE"HA:UJ70L\VM96 MMJPEDJ)FB]O7]O9+O_6(;6\+IL/A0F"XR#5N?J)*TDQ.[;2Q+2YT1Q)[VUW3=\['8WNBD9)5T@BY)0<88H MO!D98!;F5-Q41J"`L>]-[G0``/.%O_V=)G8<(+=E+(QD'TGY"'KK<=./C/&U!Q!,[-97&Y^\[O2+&@Y@I/78'!(.T3%,NK0+ M?6+#U@SZ?7:>(<)7^$CFS?`_9=Z-V6?C% M;<,1CMM5Z4JP'CUK19.[,^'.-K2CS6(OLQM;[P[TF^(M[R[1N][3UC6^Y7/O M?0>IW_Y.BK**"E-2IO64`9>6(''7)EC]&!+A@4TX;&[W5&K.]9J&[:PW`ZC5 M81TV?(E]G7*=:U*)1V:T_P\L.E&?_K1FTYUJ+?S:,AJN$$QOMF; M8_5V9S7JN=,9V5KVK^?FRSA0/597?>I6O[S4-T]YS7<^ M\U"W#6$6L+.!:CUU0X=[X"_9G5]QAFX8CFGDRSZE_ZG2EYJE>]OW#O/C#;XG MRUP]Z_&^5;TG%)>_IV]=>=][YR"?^!X7/NO9L_AI.IY#=%U9Y3V__7@J'?/@ MYXU\]\/_>?*/7_R7%_U32*^\#&T]];IG_LYKC_-TQW%\1X'4$8&U M(E`$QSVF!'G+]X#^=R*EQUBZ\W`D&'$)N%$6Z%01YDH6ER?9YX#RIX#.%X/_ M-S0!:()",5'_!EA\"&A5/-B#0?.#KV)+.2AX$3B$T0>$)XB$7!=_+RA8$/B$ M#:AZ5\B!.RA4#/6!^"=V2`5_$RB%'8A1/--^5,$\9DB$7O@\:V13`T5&(155 M-EB%9]B%3=B'::B%&,A_:)@4=`B%+S=_LS.'*R6!<.B'?(A84YA@*5>"@Z@4 M366(.J>#'BW%^Y8=^H&=^W!>+K^B* ML#B+K;A.BV1N'T%0[H=Z+8B#CVB$8,A04P%[^><9VI>!B7%X5+B$D2B)$J2, ME>@38(6)7Z.)/#>,:AB(E+ARB+B,V@B(D^B"TW@4U;B%5@B)E^5[GYVX7"!5 M,JGXALS!BO08B]]'B_AXB_5HB_M8B_ZH?MX&5X2$.F?TBUQ8C@>2/E,1=@4W M7\DHB&;'HCSZ9C_U(E$,IE(X# M4-^VBZ=7D$DHC3!)$S)IC&+GD/\&F8XIB86C:)+C^))9"8H9"164Q9&@%94Q M699=>9!?:7E9=X^9?>!9B!V9"25V%R9>#B5J'Z21H-8+`]R`HIU[K-9G$59F6&5[!M5NYI5O)55V9J9FM M95N9J?B9N8>5VVF9N>R9N^ MR5NK"9S$N9NZ*5W'^9O).6`9DH>T:98:XR/LAQ+QDSU]\6AZ$3\/H"Q],9TG MH9W.],`!4`5M0(!`@9T%;=?;"%2%K=&"]J@ MQP*A%R97&O1]%BI2"[`=->8AD"D_)SI6``>=`V*>+$J6+PIO+AJC;TFC<#:C M-MHF.=HN*[JC[>:CYM*C0)IS0_HL0EJD=HFD1HJC2LJ33>HM3/JDJBBE#A:E I5#I[5_IG5IJE'93&I=-RI%Y*>&&ZI&%4IF9ZIFB:IFJZIFQ:$`$!`#L_ ` end GRAPHIC 6 graph2.gif begin 644 graph2.gif M1TE&.#EAA@'\`/?_`````$U-36AH:'Q\?&-]I8R,C)J:FJ>GI[*RLKV]O'AX>GIZ?#P\/___P`````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M`````````````````````"'Y!`$!`/\`+`````"&`?P`0`C_``$('$BPH,&# M"!,J7,BPH<.'$"-*G$BQHL6+&#-JW-@0@L>/($.*'$FRI,F3*%.J7,FRI70H@I,ZC'Y\VA2`59%6K M4:_JW/'D'D2F$S9XX$%8*EJ;KH`@`(!.QG+'!PY)>G2 M>%&K/`V9`E7+GDU[*`'6>F'#Q%T[<^_?+'DG=DUZ[`&OQSTR,+!6>$O= M+YW3ECX=N-C2KC7_A>Z2NO7OX&=G__<^E/OS\+[1J]?^.#O[ON:#JR>OFGYI M^WS=O^<;?R7^]0`&:)=^[!50W&::=?99:/_E-)^`X34XH%.O2;C8@QA&Z!B! M^^W5WVH0ABCB7AR^UUE4R0&0'`3+-6?3AZ9E.&)M%MIVX78U7H=>CHGQ>)B/ M/Y7886Y`IC?CD4CB).20=\&8VHY)5G?8DDS:Y>1)11*6I98R!D;E>P=ZE:!G MH.%TI8-1IJDF2U]NJ526;FZW)FIQSO1EE4F=*1)EE8W$IY!_`LHG28$2.JB? M?QK:YYZ)(KIH2(4Z*NBAC%(*4J25/OH1II`VVJFEEWH:*JB;BEHJJ8NM2%6* M*[8XT(OX&4<(``.9-17`K4^QET!C7@7@`&B>O2HF7(K)2BN"MP:0:U>\4N5K MF<$NZU&9<^949[789@N9GMIVZRV=UWXK[KA-ADMNA>:>6_\8M^JVZRY2[+XK M[[P\Q4OOO?CNEFYD8QFY&FO.B?9J46&EVU_!^2ZV;\(,TVMOPQ!'3*S$%%?\ MKYD69UP8I^5B#*7&/2VLI,A8PMGE=R03C!IQ(#U`;6>8P0R!S`8<:Y3)(.>< M'Y[PXJRASAZWYJ^'<(YE]&`#NV@6TD=GQ?333D>]M-1*5YWTU4U/K;7562L] MU]980PUVUV%37?;88G.=]MEJ2WU;TA[M6BN"'M4L\\U!`ZUW4/JE7-+#49V\ M]VY"!XYCWBBOYW=Y[5%X^."0*\;AXF[Y#![E^&*N4HF#(0``9A[)+/KG$-1\ M$^!#`Z(>.2TOR28Y.L3&R5X[2`BMN1I`00N)F=D,CB[ZHKO M[A>5N*/.,^_00XJF7\[C'EKTW4V)I>SG6G_]QX3=V;R/')\ZF:*:FC]I^AZ9 MJO[Z\,./_OF2SA^_I/1GFO^H[$-0OO_N:U\`_P=`5!$P/7>;&>E&AQG3P0I[ M$.P6ZA(809-0L(+P\1X&-Y@G#7+P@T)Q7LX"A:FN#&]%PU,`TD#_2#`/LO"% MQH.A#'?DPAG:4%\WS&%O1*C#'A*%A[,1EA`!AANX"::(BQ-64(Q8LF%)#(C3 M( M\G8XR2DE:@$'0!%RIN(JP$D2?#8T9$GN]$/+*5)OM^'>BRHII9]A9WS'^XTH M):B:5#X.5FLCFRYSR4NS[=*7O40;,(TM],X3A/*7&QJ-*W8'R-Y M'WP:CGKEY(\.R]FW=D:2H"/$"CT_^L[$E=1W(IT62!I),TC.Y)/VG.$X"70@ M?ZJ(D\QA(@ZU"=*,T?_4HR^E:$5/NC$=852B--KHAHR:0:3V%%^3`^IHFJG, M8#Z3JEBU:E6)>543:C6K7-TJ,[]*UK#:LCFD*8#-AC>F!>61IS&5H2AC-]*@ M/E5B=#TJ7.$IU&U)[D9Z725166C(VTDU-G=MV.\^HD)JAFZ!D'VD0)W*S;X^ MYH^+_4@"Y/;/SK(HIYX::-CVMH7EN[&L8V M=RPEG0/QME?4SJM-*>WL394#VCN*-JFT[9'VIM?4WHI3J47=GFP1Z]O?/BFP M]>3K8)'K3>EB-R8$#&`!^R?>\*)JO/OCW_WP9S_TM1=_)3*O`YS(5N*Y=;+5#7`D\9,`TN$E.?M4J')KZD\(',"QB2DPZ+"TH@ M\-UDO&*=M!C&'Y'9`!2LQXP*.'J)//(ADZSD03*YR8!\,I01:61LD=`J,6M0 ME2LF9;QRJC,"H:9`&&K@$0^$H5MKG_[S1+;-9;VM^86`],U%U34ZHT8HV-KQ;C1=$2[(E][=9?$R17@$W&,]*:BK4>]17C(D1,KVG7CSM:&U\] M1!<=.]FB-G:X@VUKG8*[8`B16K=KQ6`UAMK56OQVGV.8L&07$HCVCFC(=%HM M;#=ZE7;PS9B61V1'O]/18&"ZL`RAP`KM@74$>G2[CNG]W].WL^V,>/Y.BM?_O433^`[G]^[G]_M*OW M5_)7=JA'6-#S4\I+41QSUQPAQUNX%%9@-5806%826(%=-8$8:(%B=8$:&($< MV!SCD4Q\%W,,`%$[Y7C`]W^M)(#/-Q@\]V*+YWNCUW6U@X#XUW[ZMQXV_]A_ M^6=2\.=7:D=I!(B"S)=:0LAV!9B#V7>$IT>$`!B`F+=TCG.#K.5T1CB%/(B# M2@@>4<5^5:B"*^B#*,54_S5<9@AR=2>#Z$>#D)-7,Q,\Q\<>?J>&_K>%UI%7 MR@(Z+W@W,>B`R_>$8AB(AN&&\Y>$-E>#;L%TYV&'=PA869@MS1=[A>6(A>B$ M(-1\+(B%E?B'C+@RE#B$G!B&@IB"@_B)2&B)A]B&IN6%W>&!&_B*KAB+%/B! ML#B+M9B!M"B+&?@V3[-[^V13'SB',SB*I!B%T96('\$`$`9S=5."0-=X MH2AHD9-9$*![';>'!M:'`T9_G9B,3$A[WM@L@WCW(U*HC%38=*2EBJN8CHOX MC>+!7)M8C,AHC(`H3_((BO289^QHBDTXC?!XCNCXB.H(A?5XC'\!7"VX@`/1 M@-TH4+:HBQT8D12)BV)U;A4YD18ID;GX-"'8B\'EC*4#C8QW@@`9D*4X/0.C MC3X'9,2XAO9XCZF7DNW_2)#OR(8ZHY#N*!\HZ7S>99,\"8:5)91)(3Z*&)0X M"3)&R8HWV9-+]9/S"),'B9`SV5WY>(HG64&8"([^*(XT(5_I]3[S\U[Z0Y:? M$I8"A%]JN9;KI3_Q95_L`Y9H*9=OR99S*5[I,5S2)UQH^%9V0D*`&9B".9B$ M69B&>9B(F9B*N9B,V9B.^9B0Z9@+44UQ.!AS^)("MI6T<3FEQ$*"=W$D5W@F>>QE&ZZ(U>ME9F%1Q1:(LFOD=^$EH MZ!F:<]*?_JEK^1F@442@?&:@ESB@"`HN"RIH"MJ@V_*@$.H8`#JA<"2A(0)F M)_(<&"I!'?H;5R9_`F$`Q%D0QAE^!%6AVA*B8)%EM8)"WADL`^AY'YI]^G5= L>*:B%AH@.KJC((I3HSX:&#T:I!$"I$2*42R7I$JZI$S:I$[ZI%!*$0$!`#L_ ` end GRAPHIC 7 graph3.gif begin 644 graph3.gif M1TE&.#EAA0'\`/?_`````$U-36AH:'Q\?&-]I8R,C)J:FJ>GI[*RLKV]O'AX>GIZ?#P\/___P`````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M`````````````````````"'Y!`$!`/\`+`````"%`?P`0`C_``$('$BPH,&# M"!,J7,BPH<.'$"-*G$BQHL6+&#-JW,@0@L>/($.*'$FRI,F3*%.J7,FRIU;D4``2G3Z$>!J M5YUBCI5JE:S9=.&%;GUZ]FT8)/*-0IUKMV[>//JW^U;\'_\4.4_QG\^>[6X?]$;U2]R;AJY]/WVYU MRGK)OQ2;M2[_J/Y-]=^``A88X('M&9@@@OTMZ&"#$`+XH(01$L@@A1A:.*&& M%2K8X84<9NBAB"`:&%Z(EEGFD0$,'$<79^K)IYB,AM%(U'WME69C2#O6Y^./ M..&(WW4]YMA=D4"6EIB00P:PG$?$/>EB.*!B(5:F74L5EF;EG^":6=K MJ<*DIY%$7F,Y7:M\"AK8JU_R2>NJO/8:79\?%0!``@GHM``"`@GPI$?''6"` M`S7JE"8"RC'G8G"&"4NLL<@"H*RURV);F%C3,KMLM1`,`*VO*`'+[KOP`NEN MO/36^^NN]N:KKUWS[NOOOX3_]0OPP`2#B6_!""?LY\$*-^SP804;M'"H557, MVVO_^46;P#6)Q;"]'#\,)UJ#-=53R/ZB+/+*++?[<]Y'H'*-#>`5HQ#2`#!O`\,]!&_]1S3+\-#2?-LW+- MWI[\HNIHIF-W6K:FEZ)-]J9JF\WVV7"_+7?:'L:6,00)Y)CB1Z6>>ZJLTEWM ML.`LX4CX6$13W;7BAAFN=<=51[Z7D(=WM37CDB?>.%N/>X8Y=)7S%'I)7@*7 MW%-.`Y"Z0%!+#7CFL`]5>N>G>1V[YX/R1GMMMH/>^V@Y@43LTDU#U?K=Y4U] M^_)=H!*:G_*!,W^Y8*]6KC+GG^\V^NO`.[_S]-*'CW6[N[^4,V0DG4^Z^M2Q M+]+YZ+_O?DCPGPE_^O/3KS/^^[[L>__X&$@`(TH$?J5T`%0@"! M"6S@2?QCG;TY!3.:,51+BL6<^#BM`0!8U[C6@QK5025IB>&@7YP&`136:$\E M9!H#(."``?SK>N++89EPJ,,>_HB'/@QBC+8GQ"+_/L^(2'P7$)/(Q-`LL8E0 M7,P3HTC%@!&QBEAT71:W>*^$Z4@X%CS:1HQM>8M;X')%*W+QD+EA(R(7.11%,O*1[X&D M)&=4R$G"C"#F,HZ4W#3#CD'/DN%CX`(.0#S4&2]JR-O/)WWW.^^(!E=$>6(E M:X?(69+.>JL$)?.$=D3-1:^5K`H-+[_GR;FMC6[&=!LREWG,9BK3F6V+9MR8 M^SD4I>QRUHOP?>KGRV.,>$I7WF`"45;OF^,$E;/6%25-"H=*?O-F0><9 M.7ZJ5BXKIG%Q$Z`([.D[(411VE/L(`T*5NM4!H'4$]64Y,^K$ MQ:045@U%%P0@VLWD312?AQ3I3?^)B;N35HU)N/QI,&D*&H0BU:-R8JH1G8H] MHC8GF=+$ZC2AN=5J9I6:7^6J5L>:MF%BP4"KT;P.IGJ(78E(0VM3U>J* MM:*9[4=_F5K5LK1X`M5B:0?KVMX&#T(YG5(F/RM8VBH,5Z0UZ6E12]W)D8^O MO)-K.SDZP=BJ!):P?"!*P@O>\::DO.8]27C/FU[ULM>][94)>N%KDO#6I4IM M#QWI7.?V2U@OW2P$`D!CJ]0E;R\$ M0```PW+*X)C#MI&1H[:6]Q+-E3=IP<']L8.0!;HJFP..46:\S*6-9@ MEK=L)2Y[695?#O/"Q$QFEY7YS*K1+9J7%^0U_Q]4S6Z&79OC'%(XTSER<[XS M%O.L9RKRN<_MM#.@8_;G02>QT(:>JJ`3O3)$,SJ(CG[T&A<]&Z_HYF(\(AG8 M$`:!'U6<_(Z5XW)4!WO/4@20H76Q=[U.XB$PAUM;H=[0QP1.>+X`S',\+?WA@9EC#J[3TUC!E[L@XPO&. M>_SC(`^YR$<>$02>SBN"?&MK3\'<7(G_B(#J@E)^H:S3+@\WD>;D[6?6.YY[ M1C'BM^$Y4.3I\E4-_W.U+9_K=(F[S^C>-8M`9\W1;YOTHM-GZF'#;4T)RQ@[ M8QW86D=BU%-S]`><;N;'>9/&I6OU)(D3.4J3L64ZJ^6;`W7I.-\Y"?US<8^H MN$=$+VX0WXYTN[==/82GNN%9,_9-YWV?CM=VV*=:Q'1B-SN'=WL])5_UUN+] M[E]S>E]#6OG-(R7PF:^/Y:V:W<^#WK1'^](`[KM)_:J]OXMO8N,A_Z4'D%+N M9*&[<-F>>L3#RB/4LCAP4XS*%?N<\3FO+EV/KWCB0UV(%KW\.HL_'\=I'Z/: MA7[XNV?ZHJ!^B[NO+?6SWGGNDYW9A;<^TW4N_=?"O_I/W_/@X>]9M',RIC>Y MYW["Y&E0(BJA7OR]WBN)WZQ=WR_%5#,AR%_TWZ'YD-#%7_Y)X"MD8'X M-WKUQX`A"!@>_\A^`7B!.O14W[=;'!AT5:6!(`A[(^B`TT>`K(=YM=1#*GB# MV]>"N;&#,-AZ]#>#GF=_584LX*)?:<=?-K>`?I:">P4E_(5RP@>`3NB#O&># MRE%**/9W:[>!KR>#\\==6OB!0HA^4/B"9HB#6/A^41B$;#B$8BB"QE6&)GB% MVR4^A[6"4=6&;JB&=PB&2B>'=$B"E\:#X"=XNW2(<-B#?JAWA[@`(,2%+I5Q M"BB(-$B(84A^+\@`<9=-I*)R7QB#^D=/ASA[-C0<,[=3RW6)I/B(#PB(8&>! M315]N&+B,B"U]>+MD5%C&<8 MC'HUC+-X@K7(=5)DA,<51_XW&;?7A)BH>\[H6QUU@!DT?.$HC;BXC234=Q.8 M2J[Q?$5(A+FEC=1H3Y-71.E7AV__J(N)J(ZY\XS5B(?S>(N#N([LZ(_,6(JW M`TNB%XT`:8C=]8NRA8W9.'Y)X9#>Y1<'M8@3N8PK$6(;1F(CV6$65E\F69(I MN9(L^6$7UI(NN3X0YF$R^2HJ:9,@1F(59&(`U9.L,U"C:#[U,Y1$691&>91( MF91*N91,V91.^910&952.954R90+H5;`5Q?<%)2N,I,F>9(RB9)>.99D*9;J M598H>98XB2M?R6%F69-P&9?^HY9OJ1(NDES+PE-<&9$^U"\+H%DHX2*S%RW@ M%A(N8G:)\9=VN2R(.2[&AAK%@6\-AQX&D`!-)A:8L12XX7N),1#'`0#$@94" M\(F$49F7C6DLJX8;H]F9`N$BH,D<*B(9-X0>:=4`!7`5:8(WYX)B$)!\(S1N M/,E"#F<2M7F;3Y&;*J1\G!8PJA:<%_1["&<31W9(TTEGP\F7\7*=V*E$^[B= MA=6=WBE%X!F>K$F>0J2=YFDGZ)F>9+*>[)DD[OF>/S2>\KDE]%F?='*?^$F1 M^YEO_ GRAPHIC 8 graph4.gif begin 644 graph4.gif M1TE&.#EAA@'\`/?_`````$U-36AH:'Q\?&-]I8R,C)J:FJ>GI[*RLKV]O'AX>GIZ?#P\/___P`````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M`````````````````````"'Y!`$!`/\`+`````"&`?P`0`C_``$('$BPH,&# M"!,J7,BPH<.'$"-*G$BQHL6+&#-JW-@0@L>/($.*'$FRI,F3*%.J7,FRIX=.O:9:L6[%FD M1O$"'DRXL.'#B!/C_*NXL>/'D"-+ALDX)L?+F#-KWLRYLV>,3I4R'2VX9V7* MDVF63MUR->N5KE_'!GSZY>S7N'W>SLT;)8'?P!$`6.!Q0-,%PX76=KF[M_/G MT(L2:#YT>>OH*:E#U_Z<>^/IC:VS__2.O?Q(\N99$QC]$3G3`UKA*T=_/KW] M^_A;KF>?6#SL_'4!F)6`3O6V'W\>!>#1`P>0-I]-]!'86X02$G8@@H?YIQ*% M%7;HH70!*J9A=A5RF)J)DZ$HU(48&C8B2BI^^%B,,O+$8HN%O7@2C37VZ"-+ M-R*(%P+O\7B>BD:&5^*2J06)(V$ZYO3C?4E.Z9*30DXE'P#R!15E255:*6:/ M6#XYV)1*QF0@`!>'?>45@LV*)M` MR!$'0`'$33K%G@`*O"8JJ6I!@%Q4L]:ZZG#),06KIQX=$.N?:7Z*[++,0D9H ML]!&R]NSTF:(JDS45IM;MMK^VJV5_]Q^*^ZXU2E+[KGH9F=NNNRV&YJ[\,8+ M5+C67I7575N9E6^N?85&%E>E\JLOOG@1?%=7IR:L4*G_[E76OOX^G.^_=(&5 MEYEO9?R75&)%1Z^\((/\<<@DMTOONO*BK*W*H!I5\LO;AL7<,2UJFNP\QH-8,U!2TCUE;(6#2'2IG&M MTGY7O^NRUV0C=6#8]HY-\\U3\W8AVA?/Y%=<<_MKMU=W=UPWWGSK?=;>?M/] M]^""%YXWX(@3?KCB?2=N>..,![[XXY)#;M5TO'[$0*VH7AOUUF6'_M.-LR@V[[[C(Y6;K4J:..G^HB86FXTTY[ M"3SO_XD.9^YJ,R^];SN"Q*"#1?_OS;P4___>7B3U*B(6)?%GO7*HW]R/\F/_T94#(%/*`"S[?`!@YO M@`Z,8&L@*,$*PHB"%LQ@RSSVL`)M\%YCRM77A(VPX:1)6[\X8H-8Z@QB3&F=16[(<`&E[:YH5"'':P,6UIH+X`UD6)Z M"5@+IRA$%')03&]!(%;81<(LVH>$&@SC8EXH1@V"L8QHM`P9TW@N!I1E2UWZ M7/3:=KHZ=F=`L,NC\L3'1MJ%;XX-7&./_J@:[WW1D*PA9.WZ2#M$0:``#$@5 M]N18R`H*LD:!(HKVZ+@V.QI(D=ABI.V(UI_E*?"2'E(:`T/I24YN[SFJ_`@D M'>0YV9E2E$*+92GY&$A$](%ME99!I'E02;[<_%)K@,0ET,[V$04`P%>O2QXE M%RE!8A*(F1])0`(^PK,XVI*7PQ-FG=R&QUTF4YDE>QLP46/)Z:G_$YF5[*0\ M7XD;%L5E`0V(CSX?=$YT@LR>K@/``/(HS6_VTX#6Q`_IUFD;<6(GH3"J9PCA M24U_IG.BYHQG!"&:'MQY$`+7JZ5N;ID>CDJIE6^J#T59:=&0^8ZAS+&@2;'S MTI4&$Z7AQ*EC:II1N47.<9,+JN6$6KFB`G6H2#7J3Y=*N:,JM:E,):I3ITK* M4^&QIY-V5E-YU4OH'K4)$F'Z5"/ M229/@NFFN3:)UG3A]:LI;&?9S+?6AHZ5KH>U4$0+NQ)'XLE0^SM49"'[6.!, MUK*5_]H@.;:UF]VLDUZ[6M7V MKVL1YP*7 MNA#8;76M2Y*"#DH["U!02I+WND3J*R3)>P"N4A->E:1WO2EJ"V-:Y<5HO4A! M#2C`5)P)@01`#;<[PXW$BN24+IV1)OC5+U/XZ]]C`?C`E3Q5''&[`%6M;*9] M%1V$,]S'#7,XC1[^6XQP[\,9`7*.0A'[#(1M8?DI-\OR4S>7Y.?G+\>"SE>$6YRM*[ M,I9YI^4MVZ[+,?C!OV0L7 M>CATLN9L+,YR1M@3!XU$0E<1+E,,XJ`57>@RMZ[0B6;B#(N8Q!LJ.HJ7%DVC M#8VAT^R+BHP6Z81,*ND?6GK13KST1YEH:DZ+#:.@;C01:_@N5A]:U6)KM:M1 M/<(C5IK3FDXHF/DY;$FG2]0W&;8:O0QD93/;:\Y^-M*B+6T?4[G:XZ(VME^F M[6V3K-O>S@^ND`%#$MG4[5X6CSQOF.L[$/M2NC`7KN9D% MRIO.,\CX-JN_Z?GOX,'_.]^!W?>R^LU6@F\TX&NB][WM#7%CN:7ZN<4P"MIBN!#@L&6Y8H5.IKH\A9<2WVO0I M:;U>&9_XNW%&]9A2_.!6;U)6YYH,/?.$1SU1=ZDI!6)UWV]TN(UT6G:#E'NGDZSWVH<.= MGQJ->M`=+M'/B[RBE/_1,07><-'3W4!T!GOH1^_ZJ\/>]'H?>.K?'GL7,?V. M;8+U/'_PV92/ASSWE/G[X07_=\4KG_&$?S[SHT_]R3F_^M`_'-'PLKEL3M+< MJ-]]Y3]JG($>/>F97_KFQ?YP M_9,@M(1[MC&`#!@=`)5-/"=OH+>`\_=_'FB`OA=__G>`)25\`7@F)%B".&-G M"GA6-*AD`)B`,:B!!(AU&SB!,`A_1*B#._B!/:A[M-=++^B$0PB!+?B#G#<9 M'I4UQI=WX+=WV#=]R[=X8IA]9EB&:$B&:BA]@P"S)&#,1-\6JA2 M77%^%]8>'#\B"3&@>/#6(/@B(7(6$5*B$5BA6')B%",B#54B( MA4A3:?)T&V*$\3.%C2B`,GB$6,A^@9B):7.!*YB(EU@>QG-5(7AZJGB%4GA7 M7N5!N.6%:1GXB#5X=J*8=;5X?V:WBO;1B@@'=8IX9'?XBXC8A[+HAZ.H6,KX MA*TGC"985LLXC"H&&K5C0E'C=585EWH3:FH1F&XANU8 M8V?HCF/(AO3XCB1W??.(?9CS.((1A_][18<"QHD30HMEI8=*AWSX9XYU9XW2 MF)#'B%`$&8V5&(N0^(W-2%9O18[&J)`VR(W7Z)#AB(S;*)&.:(D=^(PS*(Z+ MI9&`931]5RP!5W)997+595:25Q1.94^V957N972A95XV'/K MJ!\XZ95?&5MD295<"999*98TZ5I0R99RN99W690ZJ9=P^99M"2;JF&<<&60% M.)A6HQT-EAWR87RRD259T24'X"NID9@P`IF2>2*=5A?P$4D.,%`7MA+I!@"1 MY"`!4)J:YGV]C0D``>``I/),<&9%DQ&:HXDJI?D^_O-"6K&:N.*:IPD!\"4M M(Y)NVJ03"R`<`"``4.,T>FA>3>%,1")-R:,`&`@9PNE?QV&[)DZ[OF>5!*?\EE2]%F?@8:?37:? M^ED__4D_X/:?-1*@?2)C6<,M_`F<" GRAPHIC 9 graph5.gif begin 644 graph5.gif M1TE&.#EAA@'\`/?_`````$U-36AH:'Q\?&-]I8R,C)J:FJ>GI[*RLKV]O'AX>GIZ?#P\/___P`````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M`````````````````````"'Y!`$!`/\`+`````"&`?P`0`C_``$('$BPH,&# M"!,J7,BPH<.'$"-*G$BQHL6+&#-JW-@0@L>/($.*'$FRI,F3*%.J7,FRIHU;4BT60\R3.U4!]+GDRY,M$"D;M:C2P4<4S.ED.+'BT8]&#/ M,$V3'JEZM>N6K1\3F#V[,.J7L5];U4TR]VO?C0D`3WK;Y7#>R),KAR`\<7'8 MRZ=&GWY7-('='A=T/;#]N%'O*,&'_Q8_GCIYP=>Q$WY^&"]GL/#=7WTO7ZY] MM?CCT]\_O_]]_?[E5Y^`_/TW((`&%DA@@`@NF""#!]8G'%@0,*#`1PEL1A1[ M*YU'F8?4508B7^E%Y=R(U4V'XF,K-M;B4"6:Z)$"`%RHW0(0W+CAB^J%Z../ MB\4HHVT\\JB8D4#:-IF0/996I'DA(FF8E#PQB5U5!QC@0(X`X#@4ARI1F>28 M9*ID99.!@9E2@VQ&J&";;[H)89QTSFGG@W@ZJ"><=^XI9YY\XCGA?J!EIJ&8 MK#VI8I10,G;FD.LI6N:DE%9Y$F<-`+`E`-SQI69XC5:Z&J(S/0KI:9(N1VII MH1IFZJE.BE8JZZRT&N<=9@DDH-,""`@D0)J^ZZR*7+[KOPHDMN MO/36&_^4N_;FJ^]?^.[K[[]`]0OPP`33)'#!""<3//---L< M5JLX^R3S3C^/:U/011%=-,\BGCCTGW[6"2C3@3;=9]140VVUTU(_C7756[L7 MXP(!8*CAEZDJ9S3"9Y>:=F]E)[?VO4A+=AUGO>*HHXYD#]WSWD'"FF;;[?+] MT]LME4CX78#S=KC/<0BTX.-&5"@I:K4IUR*K/.CT=G M.4^GXY0Z24RF3KK?FL=NZ5H[0Y#IIIWF;53CLN,F6V]*[YZC^?"J.O:HZY'W MKCQ,QP=O,._+=^AX2XT&,NN"80BK!8/3*-Z!@``0<,(%_@ M&Y\,@13#&=I01:N[H0Y1M<,>EO^KACX,HFB`*,0B3H:(1DPB8Y"HQ"82R8E0 M-%T.HTA%W$SQ>50!7L3"4C(/:YAX*45]JHO2R^*[R,C#EZ%Q8XF2 M6%SV(B`ZMHPLB*'/R^;H'I9YK'9VQ*,@Y8B5!+UQD&Y$W!_QDD@:7M%M,#M2 M)*MX$S92\I*#>R0F-[E%3GJR6)K\),$$X"WOW2MYHM1FVZR#/P603,IYS61<\Z/%("%FNE@-7G) MS7$J+C1-Z?FE.&])177F$YTR4>XSF/Q$J-Q*MX!,V4Y3H!N=-4DC MT%J5TW`?&0``7CA-:LUSFP/M6>4`^IEN>M.>??-BK$!Z3UQ69J3_!DUG2"77 MN9"$+9[F`]I$1U/1,)ET,#6-:4!_VL-9MHZDJ9DI-L,83IFB5#<]!=7OF!JI MI77MJE.[6E:QJK6M>K6K8,V:6+GVU;&"$V3JR9`\3TE/I2;,2OIT:D(56D]' MT;*J+(5J,Z=*U38>U*T(:][CDIE,W?VUKG0-W/1T69:[>92M>?W-7NU*/:3Z M#K!OS8EEC4/4(786*::*:T"U&E:REI:T8T6M:5/+5=:6=;5PRFNR;DW!>JRG6O3``DIP@01$BR_](`C`]N[/O?Y;KWG/:T[Z>J2\ MZ@U@>NMK7_SR5[[_Y5]_]WM?`OLW@Q6,:FYG^"G,`("%&@J`A+/(F0RQ2"D! M<``I:Z25W5B2)@Z&L&8D'$VATUG3CC!7=(P386 MWX=S?,T=\SB5/O[Q)X,L9$X2N, M:SFK,L[>_E>WPRVX<9-[;^8^-\[2K>Z<@;O=]6(WO-O\[GDSA@&9"5WN/FHP MCOC[WP`/N,`'3O""5Z0_'CB5:%OM+:I5+JO&F5RX7C^;-)Y66GHN+>K%?#Q2ORW(_F(7RQD:B?#F MFN_)Z5\O0XR")&P0`+K0(1MYVD?'^![YG$>4OF_FX_XU[:N79>55^C?.>QGV MW`?,\)T/))B&GKC9U_[D_V+^V[==RN"/_=R]3W[=M)_K[]?][B7/5_G_?X_N M9S9#094C#D58U9=S5D5XA[>`"MB`BO>`B1>!@L>`$#@0LB45%O)X"C=[JI=^ M%,4Y*0(!&O5"CH5!F\>!QB6`(>A^HE=_S]=HW8>"%D=Q'[(D,"A^`&A#J`>" M*XA_+>B"RG%40O6#N5>$+=5__E$2>#0+A]5,49RK=6 M"$B%Y4[105P@2U+>!S==Y3!'[A^1=&&*;<]9"<[ M=#B$:KB&!'57/KB'1GB$^T<8>7A^(`=_RR-8=%2"D'=]?&@=E358C]=W^1>( M_*=_B:&('J9O9.B(2;2#<>>'9^>)C_A2D6B(3E,'AS.HBDD16G6H67CI%?ZO( MBF"74K@(`6,H>V7X?;U#C/^TF(K*:(75.(J5B'V]V(&%@5S=&(R(&#OH"(RN M]XW@&(XQF(UQ*(<<1(WRB(/0J'%XJ'*YR!(M1V#,85\%!F`!)F#819`".9`& M69#ZI9`0&9$/V9`,.9$)29$+*9`9.6`$26P'.'\R83\B.9(D69(F>9(HF9(J MN9(LV9(N^9(P&9,R.9,LN1`4-(\A29$,&5TZV9$;:2H_>9$\"90Z.9!#*91( MB9!*^5[Q1908690^690A$7R-"(^?"!Y@HQ)X& M$AF%?LE!`H$W>LF7NW$`)L@NGQ(V#5``44$C$$!"K)1T]U@62U=8YB:9E,EB M4(&9?&=N?L1W>[<`00=#+U)B5.2::29O5CDKLCF;#0>*MJDXN)F;O[&;O#DJ MOOF;/!6Q%F<(G*(HGK'CG>1I:0:7GNJYGNS9GN[YGO!)$0$!`#L_ ` end GRAPHIC 10 graph6.gif begin 644 graph6.gif M1TE&.#EA9@'L`/?_`````&AH:'Q\?&-]I8R,C)J:FJ>GI[*RLKV]O'AX>GIZ?#P\/___P`````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M`````````````````````"'Y!`$!`/\`+`````!F`>P`0`C_``$('$BPH,&# M"!,J7,BPH<.'$"-*G$BQHL6+&#-J1/B@H\>/($.*'$FRI,F3*%.J7,FRIV(&#!R[_^Q\^N;HS>?1GS?=E;K[`>R+DD<9/[W] M^V;?5R_-T[G_Y?\U!^!1!`EH('0#'IA<@`@J^-R""38H(80.`J#?=$PA@)UV M#'37P'?AY54?9>:M=]^(;:&(U872J5C3?">YB-^,-%K%(GS\R229B36*)F-5 M-V88$F*$(-9/6:I)5=6;@6C23L^N:5F M5#;5Y5\:=H2``QJBR>&1.I89IH\GVE=F45UJ]26)8_;IYTYY9K5G9D:E=^>? M4AVJTYG:?<0`86X:">=9BGH+JTZ56=.F5I:(J&^A9; M>2IPG4>N=H<4:XB+4?J2`P((IMB2'WKD)IMJ,9#F8AH*UI&;#2B@%JZZ%M91 MK\JDZERNVWX+)5:KCDEINBM^:FJVY5XZ[K[KM6M0OO MO/3:)&^]^.8;%[I9*H734',5.-7`K2VEV\'^_@2P5P*^^''?_W*W'((?\6,8BE[Q6`P779]?]TMA0;>QTVW#;75[:%V9] M4]E/NUUX67@WI;?@?G><.$C&ONP3X88W'J/4@:\]WL\\OXTJYOHQ;K".EI>^ MTN,?16XKZ84>;GI(HJ>$^EN4]UVY[8C+K6?LK_<>DF&(!09\88PJ-?;[G>U8=/L_?BEV\O^>:G2K^Z^NQC M!GZ?PNT+LX'X^Q=K)E:Q`?:/>P[SC<4&B#$"2JR` M!V0@O?07-@0^"7W[:Y\&)T/!#7J0=A\,_^'X1$A"LG2PA"B,#`93Z#'Q*(8P M13I2`I*TI)'MC&^?\QS0=CBW&ZH'=]1;H6EEIW.RDN$7"A8XGJQ.@S,IK1=U3T MR.QRDD0L9E%W@JI=#IOHNK',\7Q0C&-*0A_D#W7N0F$A%8@^/T@LD'R]IF4(>DB9U_*03 MQ>=*5%H/BJ9Q9ZVNC+#')2@Z*TCU,,<"'`M.7OPS/68S9UKY4 M6ZIG5Z!AU8PBR1-+=T*^D(45IA5+*()&Z5*4C;2E,%]0E M?#[@``@(@`-L^D]I_ZJPH<0,'T:1J5&+&4RV316B\J3J4S/Z@!@.AD,Q1)*2NJK5MMKL)0EXU!%8XEJD1BV@K@_XZW8":Y:]WE1-A3$,`O#9`.B% MZX1N)2%F,QO"S7+6@YZ=6?8N8\&O5E1GH979:%M'(*Z?8^+U72I=UYA MU,WN5,"[W@6ZMX`-S*\"5X-?""[0@00^<'?=1]^NT(\W#W:O;?8[E-A4K+SE MA>^#!TP;#!]$PQW&L(:1`Z\%Y\O$L`QO!1OLW!.SN,7U0C&,P2;C&>OVQ39^ M5XUS_PQ<'F]SQSXN&9"#G%P<$[E<0S[R>;;H*$A],9+P!.E&IDSE*EOYREC. MLI8_W!%)XE2G/`6/3SVC1[&&%:Q[42,PV>A5]1FYFO(II9+A5]_+N?',:'8J M/>L,I@V^N:EDP^6<_T1*H+:2B7".$I_YU+X_SW,GL1STIPJ]U$2GF:EXH;0V MW6RW+O7R([%*['5H95DR"UK2]@F4>&*8UAFNE MJ9AHPKJ(&G1T6[CZ:X2BFD;$[J14HXCG6CL[+,D.*#L)V>EN,NW4QQY-M"=G M:&/J,,_0MK;7L%W5NFU[FM/.]GG._=-*`_K0F"8+NTV=[D90FGN7('GU+VM5 M[(VJ^SZ,_(@!%+#/5M.0K<`>)KSC#>YQZDZ9N3XL8GA]O#&?1L[5$[95<;3. M3?];V^(.M+L??6E+9V7>_Q4[*'W>PS+2G5/?*J,`.4VT!?^;U;3A).2MOC4L?,T,%4]*,C M?<]H?/K/\6[OL^W]NH3/.UX.CY2^V_SF:QFJ.J$>ZT8[G:@=7[;BA:[T.'<[ MTXC^^U887S65\WSN/I]HXC?OEE:%44FOVG>I4PY2L*=][`[+;OO=G[WW M:/?][5_3);-V)`#*,OBKE1WUBUY>G<,+S`*01W%?,[_RK.<\W46^Z3\+V]&2 M-VEHYIM?^+"1_F-QSWXF4__1[C.\YH!?O^!5KWGGHW[^[:^_^H?=>4@['O3? M9G1)MWTZ9WI-=W^81WD)MW]WX7H@P3*CYC((9VQ?)8``"'DV(C?&]T)EQ2%J M)5APMWIR9WAR$WW&0AC5ASS_U[>`#-AZ_0="(]=L?B>#`\A^2B6"IT>"!+AT M!MB"8G%^^N5^&$@S`1AN.^AYZ7>`.FB#+H>#/OB#+TA'_Q=_0V@6X7=5XX=] MG(:`DS=X^O>$8Y6`7MAFWA=Z)'=R"+0&"(Q%J!L!%94%P"/`J>25JST*(8@&)(1%JRT<6 MBAA&C1@K"T``!&`LYM(N"]``;?A81.(1,>0`"H"(9,$`!J`A":```+``!G"" M'#)P^V06H3B*?U&*9V4DMI@6K.B*J;B(L]B+2]*'W#(N:W)3"%!7LUA7+E0\ M"\``D[/'%0EPBWV1``LP+-%7/&6QC#CEC*B(`-$8/-Y8%M)\%D.JR6FUS8=@U MD/;ED`#W'MKC6A396IR%D.FBD,/!7_:361@9D#/RD2!Y(A`YDF(ADB:Y'B69 2D@YVAR[YDC`9DS(YDUL6$``[ ` end GRAPHIC 11 graph7.gif begin 644 graph7.gif M1TE&.#EA9@'L`/?_`````&AH:'Q\?&-]I8R,C)J:FJ>GI[*RLKV]O'AX>GIZ?#P\/___P`````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M`````````````````````"'Y!`$!`/\`+`````!F`>P`0`C_``$('$BPH,&# M"!,J7,BPH<.'$"-*G$BQHL6+&#-J1/B@H\>/($.*'$FRI,F3*%.J7,FRIO8,.*S3>>.K*MW;]^C M?Q_PQ7HWY>#`B/$F7NSQL-7"*!TSGDRY,E":#CHVX"F9Y>'.?4&'MBPZ;6FG MD$^>MAQX-6NSKG>F-AG[M>W;7^LJ.'#@`0,%"7P#?[#`P>_@QSLR>-!@0?#( MM?TJI1S=-.G676<#QDV=N]SJ-;5O_]U(OKSY\^C3JU_/\4&!!P@VNX??X'U\ MY0P8/'\I7GKC[@`&J!=X-/4G$H'>B85@@E,M&).!(3G(X(04>O919N_UAL`# M&GK488<(Y+>`81)^)N!B$H:5XF/9E5@A=B_"UN),*\9HHXV',4``A_#QN&%' M'_88(@,C0D=C7BA65J-72S8XHTQ-WEA4E%+Z].2#56:I9617MK3<20H4:9:;);')')Q@F8FF1VIZQ.8"!!"0V98W40GHH(1>!6&A MB"9JEZ"*-NJH4(P^*NFDM$5*Z:68"F9IIIPZ>NAM=26%TU".A0K46Z.&JNI> M@Z7:&%^NNAJJ%*JKTAKHJ9K>FFNNL=9JZZR[?OJ:L)T6V_\IL<8F2RFR[#7K M[+/01BOM0QW9QX!]]=%7+7W8XJCCO4#V"**(;KFKKDWQ%AKPJ^'^:S"37?*'9&(#0S7O:,P=H$!'!AT!F!R"@ M``(&.##X?LDMP$#2825@`,4')+"/@)J)#V?6WQP*3KCA""`^W`*6B^4XY,Y- M[E%R#^R'*+)AM_Y=V9(.(/OL`S1E*JRFNDX5Z[KWOB[LO@=?(/#"%\\?\<8G MSS&A07D6%$''0P^60:RNRC3OK(GZZZC3_=0KKMY_!KWUW/-JJZSHGZ^KINGC M:O[[[[=/ZJ#8@XTJ=<@S5K_R_*.6?_\`7%\`!SC_EOT1$#'0Z`"/=*`B=VK M0_G:T+Z(U"^S^>Y_%4I1U\#UM:WICVI2HY?:Q+;`F`7-@KW#((5.V$'!G(AA M:(L+"[%4PIO-$%*XR^&K='@J'K)OAT#L81!_*,0B$O&(S4LB4I;H0R6JBHE# M=&(4H6A$*5:1BDC$HA6SV,2A``D!`7"`W;2%MVS=QS?Y45W?=O;"LX$0:",T M3`UM&$45&2/C&,^X-S6>"YOHY)0Y[7_ MSW8!%**7NN@["VH_B1K-A?-4Z$)EI$ZAX)28/CT01=M9U#UZL)=!%:HT->/` M(*G)JO!Q)D:/RE5KKK(E"VC`AB28N@?LJ".C-!R9Q,*`,Z5.`0!80.'0FE4# MF`DM81TKCT#ID5':]7%C:>N&$J"``J!IKF;-:D=JNB4#RULB2G;V8J+ MM;8-'FYSF\+:\K98N_UM+GTKW$P%%R[6<]X3'Y1^\VW/P`0.5G4!MF"R1(7`VKO?^+`;7_[.RI-" M3-5_W?O?I5!ODO"E7OB8J.'S>C&,%=7B&>.LQC:> M&8YS7+(=\]AC_S[^<6R%'-`@$_DVJ;R8DO6$L1%IC'%*._+!_II842JVRO8* MT2F3S,%UGO:/\8PJ:)QSM*??]I@&4]3ADF-4,KP+-4P,S20<`[TBP:M5,^".86,KLK5 M$GKI1D-UJI#VLJ1C1&E%6SK33`7DCRI6I"5G[#E0_JI13\WG3SN:FLO942FO MO&LM)P"5JAS/34<-JH_L*#EH1O::F>.<+L^:TZ@V:*T=JN=;=]K3B&[JR(@M MYT0OK-#%JVVIOSW4,1_:W,$<-K>SYVW/@EMXXFYW0M_=YX9F.]V17DNW=\;M M[G(/+=[:WF6=IWWM@M.E(QABYE7UU4P*+D_4^DZF1XHTTS+J+8W.=BI0K9UJ M4,/$JU$6-;TY'FT_RWO@$2]VP(V)7G"U!)[K+L8UNB]6SR;Z!]3/5C72% MCI*N5O8UL+?.RI[K&$;)5O-SV-SL:Y9=Z-0T.$N3L*NVV;GIQTYIG_>H*C; MFNI/+Z?2#6WW10.]VG]W'!B\ZXS5>>';3_9Q,C_N=^2Y=OS]^ MZI&WSN4)6OEA?:0!$G-UJZ^NY"=[C;DD56GL0PIBV9]T]BFEO>UWK_O>Y_[W M+/TDEK\^_*QN.=AOECG<[[W\`JZ)-\(Q5.(\^''FN+ MS_/;I=[TSPM^].+<6WX,#S_^Q'>\_.Q7/ODU/W^B&IWRZJ^_;+P?^*:%G]KM M9W[TYWXV=W_;EG]HLVI8QV2MIW5;%8#?YW]VEFO%%R)@EV5$\FM<%G*-IW<" M.(#,1U?51QQI)GW*<7W_#ZA]"!B!UH5X'U@T_Z=I_,=YH-=_]C=Y![B"S4== M+LB",&B#^]>#0%B`.Z@B@Z>#W$=V\D>`/46#_B.$3@B"/J@@1XB$^L>#$#B$ M-X9G7,9J:X)UKI>"'9B$5%ASDD=EO49*665*&HA\`F2%@%)FT3>'U*=V)]AF M8@B'X$<@#B``F;$<7\(X'>(`>1(6#*`F8O4`?W(O#906??B'OJ$9']$AC6@6 MA\A`/;*(@UA6B7(H"9!E/0(Z&S(X=U.(7W&(@-,C^4&*W')E8_&)H12*]L2* M^62!;(4YO:&*OT$WVM(`L89B.3$QJ-0[POB+E65D>H@CA)>,0+.,S"A#SOB, M4W01C=)H&M281QXE;*V%C(TB6K4#3QHV7M?(/.-(&=Y(6MI56IF73=RH*.<8 I1-@58MM8CM6H(/18C]-SC_C()/JXC^CGC\D2-P(YD`19D`8ID`$!`#L_ ` end GRAPHIC 12 graph8.gif begin 644 graph8.gif M1TE&.#EA9@'L`/?_`````&AH:'Q\?&-]I8R,C)J:FJ>GI[*RLKV]O'AX>GIZ?#P\/___P`````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M`````````````````````"'Y!`$!`/\`+`````!F`>P`0`C_``$('$BPH,&# M"!,J7,BPH<.'$"-*G$BQHL6+&#-J1/B@H\>/($.*'$FRI,F3*%.J7,FRI2),JU7ETJ=.G4*-*G4JUZH.F M5K-JW>1;^*'4NVK-FD6%N&/+'D"-?I>F@8X/&CD_6C9R9;6?/?JTR3OE9K7L+<657#@P`,&"A+(+C\(/UZ]^P9R$?^DKKA MFYPE;X44@A`O(M0!J" M^#6GWW7]3?5?7PR&6")_TW%XXHHLVA07`P1,J)Z,$G9DX8P8,J!A>?/:)U(A^!BHH8'L.:NBA M/"*JZ**+%=2E>:V5*E*>:8OHIJ9,:Y6BJ MK.+_*6FKL"KZ:IWFU6KKK;CFJFM#Z*G'`'SP]?J>>O'-MR&3L3*5K$NK`FCD MLM`&&:51/B+6K%/78ML?C#1V:^.,%V98)++1DEON?=/V=.ZZVBU)+5[YQ2OO M6T4U<(`"'9EI9KX[@LD`5BR MR4.*''+--M.<(,P"_PSTT>C>;#3).C?MM%L<#X7@KE17;?756#N4+P+N_4IL ML.U]3>QPQAJF'`*5'8"``@@8X`#;]`FW``,Q;Y6``?D>?I#``E[*S=M7:$^X M=MMO(Q`W;PO\W=7=>1_'MT?"/4#?QE$C;3FAEYLTP.:<#]!AI3FC6GG+#V=N M^G.CGZXZ3:6O[KK%K\=^5NN0&E1DJ`6!E7JLM$_J4Z>CBEX7IJ3^;JJIQ9=: M//*?&N\I\BOW+OOT?^Y._?4.6X_]]LIS[_^]S]^'C[GXVS>`;[<4?BMAN#J. MJ_+JVA\9(-''OA\ZST_C3R_XS))/\.BTBU^?!,@B`#[K?H4A8'U.MC_8]<]_ MZS)@=SA%P;`,1&H6K"`&-UBJ#'J0@\\#X04[*$(-DO"$(43A"`E2P@^JT(0I MC.$(90C#&=JPACAT(0U!)[@`.`!88PO;L-9#MG_5#V<*5`O%\H2 MH/U.E\0221&).TL-`Z'&/R5"L5Q7O%@.6TC&%^KPAF<;2BI`]].!*7JLQ52=(LDI-M40W] MQ#@S4/I.E(I\72L+=,E',HV1FMQD$T5T0%NRJI>CA%\I<*-Z\H54()4$`!N`35H?JJ(Q&]D_1R^KVULI5[;GTK]N):KLYQ M;B_$AXR-:^RE5VACVL+C.JV&4EMK&J>RQD32?9R5ZN MLI9%&F8S.T[&<`CKC7SGK=9M?JV.6_\X'F,RT'A1I>Y M*9PA@]5[2#:BYX/R;>\2JLO.;]WW?32SGV0A*][O\%XWKC2R?XTM>Q M\[VO5PK)K_ZZJ5\:,F)Q,*/?9''5K'X\*X*YA:%!\O>(2U,M2-.90.DD+CB\ MD=MO,OPWXA@GK:CM9H$9M-&DL;3"*)VP7`XXW_SF5\)F*3&`1MPB&1_LQ"^] MK$NQQ>(L[EC%ZE1I.6EL19.:&,8PS1QK;1P4E^48Q3Z.L9%G3.03,=EA3OZQ MT$)4(WWMR+_^`AB!$1GED%)X=L,Q:R`5O.8&)X"0AOQ),:NLT8_$2#@:QG.' MBW,<"$\2QUHF7:"KQ\HR)_G,4A8R/.FLH"N?5J]/UNR@>1+`+`,YTIA.M!,Q MR6A>3OG&2.XD92>]DTI#FM2:_BA/61QMZ4Z_AM5Z;7%D4;V:'JM:U+>.S@,> MA$J:@BN5-_4SIUUMG;#LZ*%"M&80Y2-@S=@:T?*D]4AV:K9"YWJ8T%[UIYM, M[#HK^J*GOG1*S?^LG6>W5-S2'M"VL=SM[,!ZKZ$.\JC1O113PSO3Y(;RH.Z=TH:V<;UP?7]0/VM7``WT;,W)FBOR?VQZ@FV,UP7B69KTU> MZ>29P\CQ<)]IN?&$8_O?VO[V22=N:+0$'-];)KC+#8YRA-=D77.!:97I:C1SWB(EZZONUU/B]_ MR>$"KEN(Q8C0LM_S[-T=*-K5'M"U&]3L;8\[V^>^PI!D]>*`])4@W_S@:I?\ MYB<7N+P77IO=8%@WOM%SR/D,XCKU6^LVAXJ]`?UTD"%]T[Z,=^"OCJ):?(\O MZY"O?,]I+GA)B[[II(=YY%6/\Q4_/O1H3CJ5B7[Z\W*^/D[W?.VK?GMFS1GV MY.ZRP__;W[#C=-BR3G%(B1.C-N<=[PZ.\W)ROV_6#][F=P9Y;S9\^#1__]C9 MKP=^RC&?3,W'?MZZ!WCJ>Y\5J^^>8;\7__7Y_??2C[OZGX]P\JG.^_>S+O[R M=WXY-W4\MS"7-X#ZUW+S9W^IYGHZ%X`"Z(`$"'@=IV(/YG7$UW`/9QG'EWG[ M5X`-.'@'YGP6QV`ZPG?2YW@0^"079G@NF'C:=QN,!WXKZ%TOX0`"4!G$,24Q M0R$.T"9\E.[5B$S8CYD@8,Z*(,#9H02@H1?(80><1D2,B?=4AF-YR2S MD@`,-B.)(R%L`S9`J!5"F#8S(A]A*#88(A9.$UI.$0I.!5E*"-GB!M< M,S8-(';U!23X0DB7\X=\R%(,;:(C+AJCOB(J.,_W,53 M)&5?BO)7GA,QO,4I GRAPHIC 13 graph9.gif begin 644 graph9.gif M1TE&.#EA9@'L`/?_`````&AH:'Q\?&-]I8R,C)J:FJ>GI[*RLKV]O'AX>GIZ?#P\/___P`````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M`````````````````````"'Y!`$!`/\`+`````!F`>P`0`C_``$('$BPH,&# M"!,J7,BPH<.'$"-*G$BQHL6+&#-J1/B@H\>/($.*'$FRI,F3*%.J7,FRI65K^*'4NVK-FS5\.B7F@8X.YEA]_#(V7=&G- M#TRS59V4M4_4L#?'+NPZI^*BLW/KOHM4P8$##Q@H2!!\^(,%#H035]Z1P8,& M"X@OKBW2;V;J;K%G;ZQ]YFW#NS%W_P^O=7S,[R4WJE_/OKW[]_#C)^Q8X`&" MSP_JW]>/GX%_Z4>9EQIAXFDFX%D'QC69=^1=EF"#22THTX,05FAA>A]U5A]P M"#S`H42$5&:I975/LN3<20H<:4!] M:RE@``)'!OE1F)Y]V9:;);'Y')QFF8FF1VIZQ.8"!!#0V99"60GHH(12A5ZA MB";JU:&*-NJH5(P^*NFD4`I*Z:621HKIIIS>9*EN2Z7FE*BDEAHH5#\U-6JH MH:)*JJJN*A/E5ZJKTFJJJZ4.A:NF4O+:Z:^7__H*[+"."HNJ?,@FJ^RRS#;; M$'WV,<`??]#N9U]__YF8)+%3OIM@.F:/#!@"'5P`$*="2GG`X?R28#TN%W MI8X`8YSQ:V(96_#&($/:I4LH+LFNR3)V[&_(E;$,U,C?NBQSOC"#12#*..=\ MFLH$SPR>SXC5]*?%Z:T,]-&X\8QEN@A#)O!43R_]E<=19XKTQS,-?3&45W?] M\Z(K5\T3DV2G//6)SJ:M]MILM^V0PPCH)^VUU.9'][7-95L5=@AT=@`""B!@ M@`.!`\C<`@P0;58"!I`X?$`""ZAYN'%L]>TAX((3CH#AQBU`.5J,.QY=Y!XQ M]P"`A'KL]>K9B3WI`+#'/@"!3'VL*^MIN8[[[C6ISOOO9P,O_&&^#V^\H;H3 M7Y"]=!D$6O+G-K^\J`0%6KR%UU?(ZJJ[SAIK][D.=*JML&Y?<%-,FP_K:+9^ M?VOVY,$__&VI'E^T_?BWGO_^:,G/____V@*@`/<"O0%.J@$-@]>'Y-4A>AG) M7CW#70%O=""M!5!C6'-:V9K&FYJUS(`9$QO5YG#XVHPR$VD8E+ M1&(4GRC%'T+1BK6[7``<,"V\V[09"E-H-K#%\8^_"F09 M@9=*[<%P,3?3H6,>6=FN6_(1EMR2Y5%(B#2D+%"!1*K7A$[(02?M,B\LL6"E M7@G,30F39,0\VC5C9D9=KA*/Q//EUZH)K&VJDI8E%">&NLE+;WZS+KWIT)&Z M&,8O-J!N_AGCWJA)3DJ9\X/H+*8Z.:8D=YX1G*TD(#_[:36E^5&.Z71HI3)) MT4IBTJ*/K&@C-7I)35YTHQCEZ$<[*E)*WC">?]LB/?&S4C&B_^Y<"V5HL0;Z M,N'5$D+_;"$[$7I09R8T+D:3:;!HRB6;1K2/LPQ:3W_:SC4^)X%#4E-4H_7` MK0G5C=(\94L6T(`.-?!T#^A11SY).#*AA0%G.IT"`+"`P8TU6@8PDUNXZE4? M<=(CGXQKX]:"U@XE0`$%0)-;PQJMCKQT2_Z[JOT2JUCC,;:Q-KWIEF07N\W4 M;Z=W9.ACAT59V-$.,;7+HF(W"UG>D;:T$I0L:M^HVM5ZZ[2N[1IL8UO,UM*V MG+:];:=FJ]N9\;:W+ONM+M%7U'X-[%;[M&/OO!>^H+7*G[E=BT=5141/$7)Z MKU((]918/?%Y5WI.&>*LB,)=Z04KNEK]JU7WG@N^[<9*O:8J7_O6AT/KJ9>^ M[SV5?G$U*>'J<89.G,^QQ-O=Y1W$OMC]K@RK[&,JQA@'&XP_CZ,(C')>(1!Y/")D[_5(E3C%L6NW'%+M9,*2-&8SU)K$3Z M5)Q68SPLO1+6DX7]\;M&-,H9DW&8F`WG.Y6<,L\MQSB'2PZ4*><7,[E MFK86[HW";?YE9)I_9SH!&ZICWS&=%^YG,9O::H#\2I(<=J<83J]B+ MZ'SG+\L9T,[I42B#/&HB)X"4IKQPEAD='KKTB#E1AC65GQ.=(S]:J09=W:3[ MS$U(?[K,D>X@K\_):ISFF9THUK.D?QTP9A[:J<^FT;`!6NPJGM'YFS+M-;)//!MT$U7B[!1KR M%AEVNFWFE$>WWD8J?XX#>XL`1:NN@TSK%52692DH;T M\R<=J>@[/_J2FA[TG@>IZE._P[_<]>F@C)8H3VUDAB<5Y([_NN+[MZ;?%.?) MQ$&.K+-.ZRL?]Z&3USWR&`_SD.F]XWQ7/N+_+NU=R)<\^[L+FO_;EC?^9S;CC5?>O]Y4>__=.7?O73?_OS1[K21B?Z`S+MFA)F1-1X#14F2I9ESO)W[HEWU5$A*OAG7'(67`UQS%_U=PYF=_84=_BX9[ M?@=F'^ASX$=]D-=X&^ARR*>!\2>""TA^&P9_=C>"\E>"#D@6@==E*CB#.C%" MVC9^:N>"^;)]N0>#/AB"6,&#.4B$.RB$1HAPGV9DEZ=__/<<_E=S`+A^*P@7 M=.%CI19[L(>`59B$,^)DOU>&PB>!P7&!MB>&P:4=#B``G>$<7T(T'^(`>7(6 M#*`F7?4`?P(O"/06;QB':4B%(/(C?\@6>>@1G]$A?5B'8%4HO)(`0_8CGM,A M@5,W=U@6>>@W/^(?EPAP"3@6DMA)E!@X^QJXC@C2 7CNY8)?`8CY/A-O9XC_B8C_K8-@$!`#L_ ` end GRAPHIC 14 graph10.gif begin 644 graph10.gif M1TE&.#EAA@$$`??_`````$U-36AH:'Q\?&-]I8R,C)J:FJ>GI[*RLKV]O'AX>GIZ?#P\/___P`````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M`````````````````````"'Y!`$!`/\`+`````"&`00!0`C_``$('$BPH,&# M"!,J7,BPH<.'$"-*G$BQHL6+&#-JW-@0@L>/($.*'$FRI,F3*%.J7,FRIA:#S:%,`3*%G0XU.H M3Z=FU6H5JU>M4K=FE=IU*E>02]%Z_0JV;=.D<(.FC4NWKMV[>//J13EWK]^_ M@`,+'DR5+$W#A%DB3LSXY^+$9`="$.!1P0(("P!WGDV[=E`"A@T7",NT=U@%!WS&?JF:=G';R$4>U_MZ>=SA M+IVCEEZ:>F/K=9M_3*L`@`+,FL%W_Q;XN0!/Z"VQ)U_/?O7KWH+1*VZ/EKY] MY8W?PP\L?Z5ZPO_!=M]^@^FWGV24<2;>@I[UEUZ`K`THX82)&0@A4`ZF)%E7 MD2VU850=AKB=AR2*R.&()H*(XHHGMJBBBQ_&6"*++]8H8XHWTI@CC#-R&%:/ M-@*Y8Y`AOD?01PLP4,!GOL&GF7E#95^=>?&)EY\UW8FG7U*>!.B< MB";JD:"#[E5H3G(J6MNA,C%*Z4R/FA:I?9<^!QBC^PT`P)L**MA@IYF2U*FD MK-(':J-ZI8L*$@&TUCI2K;;>BBM)N-*JZZXB]2IHK[P2&ZRQ(0E;;*[',CLK MLL\"VZROOSK[D;+34IOMG=@F"^VUWX(K+7Y<_A9<75)^=AE?;#8`@`,`$HA8 MFE*=.9BZ&K()@;T"SDN5F@Q`X,";K8ZV:L$()[R>K`HW[+"$##\L\<2V14SQ MQ1A#=G#&-KTED\4<_U>W<.)5+THF=57US25:T5COG'.-.,\< M]-PUV7"GU*VC>G(:MV/NO:V2VYO2IS>&>8]D M0)]UWVVX7=K%5WA[?[_<.$M&U@=2`@FDO29O;CYPWN)T]LUX?MMU>=/CA\>M M7VYHL8DVVKVQO?GHGI=^&&,6BMYQ[`OC[M>6I)O&N>S`]\2[[4;I'GQTA)'9 MNZJ_)[>\T,;C=:=AEBUH*GEBI];\\=S#).CSRGDIY/@XDJ^C^4:?7_[ZZI>W MG_[[1+H?/_Q#9LT^_>C7B%O3'^U6;I-,`0Y1^+:GZ$TJ,)8BWNRZQ\`Q0`Q@`7HJ#2G<0L"`:KJMZ@6'A9Z#RPAC.L(=`Y(].=NA#)(5G`#AD M6?922$6(F;"*6*1;%K=(_[$I+%-;I18V^, M8Z+:*,=+!"%U8*AY!A%*0L MC0/+6=KRDK?,Y0<_QI%>^O*7P`RF,(=)S(=(#I--"LL"H/2ZVQ7PF78KS=SN M"#MHVK&6K@G7GS"H2\.]RBX$C*8X_18X7'J$,M8+3X.8.3INBE"/V'1-(T,W M0=:M;0":VTDXNQD\W.QR@R-L33SWAIK$*;&:XZPC-@UJ)7?R\VN1HR=(`I!, M)T4)L&T.%6A`>R;-,H5D<-M$*#GAV5%8$4ZD#[W;Z?XI&VM^SJ6"6:GB4-HY MDM).HO*JJ"N?]$J:IG1LM9NI,Q-:4Z)^ZIC_#?6I\_H(R#(>=*@_)9M3O;.` M`*Q.;1!PW065BIR!:FBC='%J9C13*G5B#U49Y:A-8TJNIQ8OJE)M:U*A^E*C M+K5`86IHE<+@@K.U=1YN=![HU-(PU;&.CZ]?$3O>Z MTLUN=:D;V%-N%[OQ:TZ)#,,`-%64* M=:GG/=^RSWZ>_R6@`RW(0;^,C&H$T5>NXC./$MHL=41T8=:"RX.$S\UD,_2C MX8GI3:NRTYXNG:9#+<=1D_J-IC[U&E.M:D>"NM69?C6LP<;J6<-9UK9&):YS M3;-:\QJ%OM:H)'&K/4M"VE&+9.27;_TUK3$M2,:V]-1V-.TC]8AJUG;V)[5V M::BIR-(NZO6N6]FA4K;(:I54]*)-Y#%.JGN3B?296%QY,T67DI3N;O29FUUN M?+,%W='F3;[+#>^V7/G>Q][*L>M-2H,/W#?C'G(NY=.X0P6;<1&?H[Z736+' M;%S7OR;TQ4/.O9&3/'@F/[GL4J[RP[&\Y[P*^EZO:_#LY70T`\*2]-UB M=*_@+>QWM2OXPEN7\(M.YPW^+H00?[U9]^0JDGE-T%I-RN%M2D M(;7]JJL844='\'(4O&?EC>+XYC?^^8%W?O2ACWCJ+U[Z+MK?/#U27IU:);W+ M;SK473]^MAY()Y01%:EJ;M:;\PF^5:=B\>=*]-N#:?ZJKS_Y]W_Y"CDZ_^(7 M?R@D4\\5>O;7=C@%@&\&6'ZLQX!_08#T%X!Q-'O)(U%IX5HA=G,YMT>`5WW3 M]X$>&(+79WV,!X(C:((EV"+:MWU>-GD7!7H?(W>\AWG2@U2YT7?)EU6\I4^[ MQT`4:'[_YQ$@=1?P=X#V$50%&(.]]ULT>!=(&($+*(`-](3_"JB$1B@A5*A[ ML:=63`:C16"X"!Z]1;8GB%M2%6`X``#]""5O&"6[6&<;>$ M!U2!QT16`H&#%21D'K>%<$:&1Z>%=LB&[I%7AJA__>>`3(A`BAB&C(AJ&J0\ MI>*$MB`_(>+>P&+2(=\?ZB&K3B&#,2+50A0KK@>Q+B(M^A[>)AYMY5HQ=A2 MHC>,Q):$QGB,MK%:UBB-K=>(N5B#J7&)!`5<_52-4&B%V$@;VKAW5N&'R@>, MR_B(G^B,P16.3W->E`>/43B!W0-B2_"!AF>EC^B8CHEHCM&X6)6@3YB@UYCM?8C;JXD8CC7!C)C0H5D<[5'=\!D!HHD!E9D:!S MD1!`47(8=/_J)8BTM9`SN8L>23GUI'0[6%DR244_F!?N)8Y?I9*_QY+*N(\< M*8_?&%8>Q%\I*86ELU\.29%$Z7\>.9'WE9#"1I-"(94?^9#7=#Q>B95RTV$U MYF,\9I8ZMI8Y-F,R9F,*]F)R>6'+XI9IR99VB6-Y69=P>2`ZJ78S04:".9B$ M69B&>9B(F9B*N9B,V9B.^9B0&9F2R9@*$3J317:!J99OB99Z>9>;R9>=&9I\ M.9K;,I?9`IJFR6!PV6.I:6&M21*>9V@O5Y5=)!U5I1)I)BI=DFTAD6:H*!BW MF1*^B4Y*E#6]J1E%$S;280`),&:2,58"YQ$/4(L-A9R=40#K`D"%/C<8S.F< M+K0AKK2=NYEF.)>=KG0`V:DR4D)1#0`E508!^-*.9,%#O",2>[MD= M\'E$]L1'I\0Z$[0`U'DR*=-E>82@O#:;M"DQ#-J@#O.@$*HP$CJA"%.A%DHT M/YFAD[*A'!I+'XIJ'AJBTS&B)'H=)GJB<*2BKL:B+>JBLI>B,%;ZE3/:/1A: MHU0BH^XQ38F$E'AVHXABF+D%GF:T4YOXHSI:4#QJF65BI&E4B'X&I+3V:U** DHQAGI3Z9I%B*F5O:0%7:I1533&(ZIF1:IF9ZIFB:IA41$``[ ` end GRAPHIC 15 graph11.gif begin 644 graph11.gif M1TE&.#EAA@$$`??_`````$U-36AH:'Q\?&-]I8R,C)J:FJ>GI[*RLKV]O'AX>GIZ?#P\/___P`````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M`````````````````````"'Y!`$!`/\`+`````"&`00!0`C_``$('$BPH,&# M"!,J7,BPH<.'$"-*G$BQHL6+&#-JW-@0@L>/($.*'$FRI,F3*%.J7,FRIH M4:%2U;KU:M:O6Z=RU3I5J=FS*YFB7/'.E5DV;\N^ M?M,&=@DX<%_`3@]D57P50H,!#WCNC5EXL&6+'DW:)H'# M(`N(;;O8DK7[ZY,^N[ MOX-/:?X M^_CKDJ]?='Y:IN9Y55:`4@T(X($&)O@1@0PBN*"#`CZH8(04%BCAA14V.*&% M&4+(X8<:8@@B@F)Y&&*'&YY8H',$?;0``P7(U]ISZQ5`E'\J\9>?73KN^!-Y MX7'7HTA#^FCDD2H!&>0!"C3%&`",L?;84#BF5"2/WUW)'5Y*;D=7E2AIB>19 M8HX)4Y=>Q@7F266:Z>:.:*8)UYKV5=?F6W?*I5^=/):9YYM!_0EH27%:-P`` M`[RG:'QT$N;GH)!&&E*AK><>``6PU]A4`C1YUZVYMLCK M:L@J"YU`ZAE+K+$S0G``MI*&*6BWX(;K5Z/BEFON9>2>J^ZZ7W[+[KOP]I1N MO/36"__4O/;FJR]-^.[K[[\YN@OPP/KV2_#!!!L,,$(L$:BKP@CG!?'"*IJ7 MD(0)EJAQQ@-&B!6'%F/E<,3TD6SRR3D)C/+*2LWU`'K5+BJ0?+1B]BC+.!.U M:9_(9>FSG9J==MQ2.1M5-&>5&2#7S4'76(U;M M]=9?:RUVUV!C/#;689-=X6EJ`<9`DUEE6V-L3#LMG=T>L3BTT7CW?6:L@%_U MY."K32E9W.4N5[\\LXJ:OXLF[0'W#/3NU]UU^X5QQ]U*U*PW1E[[2+B; M&6?RWNI^?.V%EK5``XM5WYCA@1HO'/.Q?>X6I=RG[/SS)(4/)YNEDZ\^D@H' M,/')[IN__H/SUW_D^_;G+Z3^_(/_AW__`*R5_`)(0,H,L(`(;-@!$\A`-BVP M@1`DT@,C2$&J5/""EL*@!MGROWUU)S-S>DV2^ MM%-%57K2(&^T3)\764E'7OJNDJ@)GMR()R_MR5)=^]'E;`#X2?`D_S-JBK0C M(X-S1\Y!LY/'9)4U^<0UM93O;/P>:-H`*M*`$#:C:%HHVC2G4H`P%4!Y; M9$,G7H680K%E/[99-ZV@_3?=.=_IR-^7SJ'J[?>80!8OEF5+!W M+WH>CYS$69[C/)+.V&74IIO!J6!.VA:=CI0O+.5H2>89R?H)M3314ZD"$4K5 MAR;TH%:M*E:W&E&M=C6K#N4J1$/$&Q*!Y&T6%0M&L]?4I`XJJD?=I2%Q!CZI M#G65>&UE7.H:5Y>`$8^9XDQ@2:(I0@UV)-6%-6RA$HO8PP(64XJ-TU\GQ5C* M.M:RDKTL2"J+6<%"EK":_0AG-QM:T98V/%`JW"9]HZ71FO:SH%WL:5V;M]-" MP+:TO>UL=PO;Q_:6M*7-K6Y_"]S,$O>ULCUN;94[7.,FMXP\?2,`UDFFY"P@ M`"J)&00.%:R0A42[+\/+=;/K'@B$=UH4G4NU*!HO,&&W`;2"8E3D@ZW4?@0! M$O-8E#"Y1KN\-[X*F&]Y^5M#+(%LO_9=`+#H-42W)K#!#M[A4R/,,@A3F)D3 MOO#)+*QA3V:XPQ'C,(COG?KA$2>LQ":F6(KK*>(5/Z_%+JX=C&.2WL M[YQ(3+ZVB?!C6DZA02QD%0J%S"H0*G.+1B:Y*)<0A3<$699?*""R3,@I,[1S M@,;R%2HGSL]M>^]HA.Z6S,-5:LYUH=)%$I690+Y2KUBD*=JC_K#5)7?T=VYH1J)I1M?^^ M.-D,1K.1R88GMZU=W;92NSAVS5%)7]R<=%MIW;F!-UP&V2YSGYLT@^P+3`67 MR9FNUF92\^I8K_I5L1)\X`(_N,*I&M:".WS@^7[AL&55;(!_6]GA-JDK%=2L MZ+I.NM0U-K;O/1AZJVGDEM&VO+_WR"RB?#"JCKDCF7IQDK>;YMA$]EQ+WG(. MOMPP*T?7S-T].9OGM#RL@^*S01Y'D=M;XR`-S"L+@]V)[XR_G><]OS;=T_Y+N<_I MY^."N]0K66^MW[WK.A]=7MX%N'>^[PFU?4DGM*?;=(L;9>%9S;S!$\YYS3\< M\YL'6\,1[OD3L:UM.YVX:[!N^5@BOLJO?_QV#L/'69==VDAUO-K]SG:]&[[N M.^=2L!.)=G#''N.*7WRY?Z_[O0[_'Y;3/OXX!T_XN3,_VT%/N5^V"?W<-Q_O M@3MG3^%8\6(V7NCZ%/[P%S``!#S`ZE!D_4^.#7N]2I_EPU\/KV3J&#^R]?K? MQQ;<5WC%AWQ19Q?\1'RN9W\,R'4(2"1$ASX!N'T0V%?Y='_LIG[/1X`+Z(`> MF'BR5WU_=WX3:!8):%XPXQZ31S,_18(P)W@/6($>T43P%T7AY()`9W?`%X+` M9#VVUW]F5U,X6((Z@SP1R"<-:#]5)%(*&'U)6'\?.&]&:($?1812.(5-Z'U/ M.#\DY%)9*%=;:(!1B'\RV'U@:(4HA87GX7$R0WGEAWL&U'FA-X>?)X=U6'J@ M=X<'-7IY;@A1;&,V'J$:QR(W-MB"`*A].KAL//A\,=5O0&B(!8B&)KA41TB) MB9A#,:B&'.B$8RB&()B&FFA]D2B)26%47[A,EUACF5B&FZB%G2ANJ5B$EGB* M%TB*:P%7$!!@33)^;@B)'?B)3K6(&UAU%G5U_\4SA/D5BR](%[@(`6$W=JH5 MA/,'>+:($\W8BF<(C%S(C!)(BU6HC9X(A475C6:(BM5X%GSEC2N%@3?%C4B( MC>88AK#(CDB1CN58B^=8BMVX@I4G1*U%6]U67)'5)9S26`!YD,&%D,R56P&Y M7,K5D`XYD+'UD`IY7`7I6V@"D`*9CEY6R'&6#XQ9B*,@"&F6HVL9CV`YH= MUFH^*1ZD69I9TI.H68FKV6FJV9KW")LFO69O>AIM'IILX0YN\>1NW M^9N,)YQ-1IS%:9PD...;R/F3RSEES8DPROF^?)KY%F>YGF>Z)F>ZKF>%A$0`#L_ ` end GRAPHIC 16 graph12.gif begin 644 graph12.gif M1TE&.#EAA@'\`/?_`````$U-36AH:'Q\?&-]I8R,C)J:FJ>GI[*RLKV]O'AX>GIZ?#P\/___P`````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M`````````````````````"'Y!`$!`/\`+`````"&`?P`0`C_``$('$BPH,&# M"!,J7,BPH<.'$"-*G$BQHL6+&#-JW-@0@L>/($.*'$FRI,F3*%.J7,FRI?4NWKEVW"[.1&K/*P8J%T"D"/7+=R2<>/+E3%K%DD@:5*_??\&'DB5,DO+ MFU.K7LT9]5K3*UUCEGV9=F/;8SOG73"8+P#0$``++HT;97'6LY$K[JSW+NS% MRJ-+;\R\N4?>'W\7U>Y1..FHSY=*QC]NE_QDNM7->PUO?/IX]VZK6Q\`8(#' M`@<,.(#`>X%'`=R=)&&" M9&W(84T67OA6AHE]:.*)/(7H(8$VK6B6BV7!V.%:(8J(UXHRH@B>CE?5:&.$ M./(HY)`I^?@C7$%&ER-:%))EY)&O)4GD>5,V]>227V%9Y99<:D8B20%\V>53 M86HY)FMBGJGFFK69R>:;<%Z59IQTUHF6FW;&I).$<^:)6)]^=@AHH/]>XDGH MH8CF9&BBC#8Z:*.01@K4HHXREM6>@V'JT7=)';454Z!N)^JFE";ZJ*2H1GIJ MJJPBNFJKL)H%($CT\2>@K?X9P$!5IY;J:JS0.2 MIN"*VVRYMY[+8DW=^MGOD.G]J>VZ!+\DWUP+-#"7POMQ-Y!PT+ZKW+\]4G22C<]%]/G3SN=G=2D1FWUU%=7C?766G<] MG-=0<_WUV&萇Y>-=M9KBZTVI]=>G=?/14N&8 M]N!LOTVXVX>;77CB;2N.^.*0/RZYXY0W;KGAD4,0M]PD#Y9`SQ[IRBS0,P'> MLI!7"CS3L:RW[OKKL,^\*=2Z\R:$S,#I4[!F0 MP*Q;\394"M`!0P(.@"*-"6\LR3YKRGS65_X_0#5G\]\1`<<#VAKY[N M_H'MOR^_DJ;/;W]7\=^O_VSU3^EZ2$]K#O@&F#//["\L__D[H`(;M,`&GBB! M#HS@B_HGP0IRBX(6S&!L,%BEM(0*+%L9SE1`^"FBB*H@8FL@!%L5PA`*YH2= MHUO@3.BI$2+$:PYHPR$:L45"/.(.BZA$6!5@,-$S MV=U^UL.:R6MB?,.+ZE;61&+YL%<53")R6L=`+F(17FA\S$>>Z!F3V0T`>+,* M&+L8JVMM,6AA=)\=W65&FZ71CW798WGT1L=$M>L^N_I(%/4RQ;Q9<8%B9,TA MRXC'/UX1D/$I("5+5TA6,>>+@LOUI);/_6LBDEK6<46UL81L2T\Z6 MMAX1;6UM"Q+=]I:W'_%M<(&;6^)JSKC"+:YL?[M<``;V:1G-J$`.2SJ#&?>X MN!UN=I7KVM;6Z+K@;:YVNWO;[XJ7N^0=;WK5&Z+D8G>[[HTO5R2C MLQY8_]/8ZIID`2-+R>AJ%:42AF1T#]@E60"L$@0K>"P&Z:I7_>-"]A5G9`TH MP*;Z"8$$V$NC$.#+A$0H6(TNM248UK!0..SA\P'GQ)GY&H@UN@">F MW:?G/;>LSW[V&*"'5M$(1UC,&BJJD`=]IA%V55-?CK2BILQC1H_)@RT<5:>8 MJF@);YHTH:KRJ-;L'DM?.H"29@J9FZ9E3M?0U:*NLJ1!2NI`H>]BM?Z0J0-= MK%WS&EB^_C6L@BUL5A&[V*@Z-K)5E>MEPTG9SF84M*/MJF936TW3OO99&)`7 MPCILNH&)6$$Y0NYRF_O=$#&7TSKG7-]8]WK2NY9GK?C13[,@(%ET MSKNRJJFUP/^46<-H^X$%CS%:+>N_^6N!XLR6/.\K:S_>TICSO,Y?[RADZ2P>0$G;.,Y^^ADY7@ M6U?ZO.82I@'E&[+B"CK.OP[VZ4QRF/3>6\K,9'9_.@ M-7CFYQQ(88[H[UI?..8]KLFQ.^SL:?_WTSV_&M!?)\"XG,O-_6M7U<-Y7@4L M_'T`RM]]EWSJ3UW]Y36/9:]J9Y7VDFP^Y)->;V4"'TH:1_V]1^_73)K^1I&' M/F)XWL]Q>B2F/]^[N&>O?!6R7OJXA\`BWSCVQ3]_^=7'?UJ;GX"+@JNP&S4V M:H=\XB=/E'9ZX<=9DZ<6/.=\O:=_W0>!8;%/#JA9!@HG@?.C3QDX M2`EX&UFW?<&$90D#72)G6.%F?P]X@=3Q@<%A?C6G>WPG=#]!=(*70UQW5O1A M'SU'?/S67\=G>1_#A..',TJX@4=(>E&5A-U6=H7U,"O(>Q;H>_DWAEZA(@?X;C0X6;)GA5[H M?1_X'8>W;XK'ADN8A>]S-'*H@0_'?0KHAG$H52!(?7DXA6!8A42(A>X'B52( M@(X8@7"8B'_%B&%XB(]X?3`X-]$UWB1UHB6;81GJW>ZC8@I0XBU>8 M4HS(AT#XA['8AJ&X@YXHB:E(B[]HQWR_B(E0^(;"B(RV&(G&B(>]N'_%"'Z9 MR(F56!:,97P0@'[-HB^[&(BJ&'&(6!77>&OSYS..-(W/V!7C*%@>@52B(8!W M.(FU.(S66"*->(R2IXB:.(&898A8EXZLR(S2B(_["%*=:(__G_B/^DB-R=@C M_7B/,)%QX;5=[V5>%#F1ZZ5>KY61Z+61%IE=]@5?]"62]362'!F2)VF2="6$ MQ#=3ZQ>1&/F1,NF1-.E=-5E>-[E;%TE<*-E>*NE=/EF20DF21)F2]V4=Z#.# MYBA'$B*1]Q63.````)'H"9`@(.8B60RC%DFH,-HVS&9S--/ MCEE\U:823]1_.K$`X0(``F`OS/)8GTA2%/W$%\# MF[H)83I1FRPI+@.P'S=6$W:X/\T9:-G6EB82G=+)(=19G0ARG=@)']JYG=/1 MG=Y)/^$)9]8VGOQCGG-6GNA95NJYGO[HGML"GO!9*/,YB.U9GP.I0%R6,X-R MGWDBGY(D.P;40HI9H"+BGW8"H)\G7#3'GP+TH$YH9@JJ'/LIBWXVH?@)D1E* A,!T8NJ'-Z*'JTJ$@.IOL5J(F>J(HFJ(JNJ(L.A$!`0`[ ` end GRAPHIC 17 graph13.gif begin 644 graph13.gif M1TE&.#EAA@'\`/?_`````$U-36AH:'Q\?&-]I8R,C)J:FJ>GI[*RLKV]O'AX>GIZ?#P\/___P`````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M`````````````````````"'Y!`$!`/\`+`````"&`?P`0`C_``$('$BPH,&# M"!,J7,BPH<.'$"-*G$BQHL6+&#-JW-@0@L>/($.*'$FRI,F3*%.J7,FRIGD,#]PA8N.GH1:>#PF\[GFWYJ9V%WGV>\CQUM>[?_TROWN,` M``,\%CA@P`&$W@MX)(!'`'YG4WSR):C@3/351QF"".(E781D48A3@P[2Q9YC M"ZYF88]"&(**8(@8@G^E1B3N+%."%DB:T'H8J7M8BC22(R9^.! M.P8I9$H]^FC7BR7IR)626S&)5EE%&OD@D$-25F5448[H%I)7=NFE@ER*%$"8 M7T(UII-EID9FFFRVB1N:;L8IIX%SUFDG;7#>J>>>,*W)YY^`_U*59Z"$%BJ8 MH8@FVI.?BC;:**..SK34H902Q-Q<@Z755*1=0#!EIKFK?*=2.JO/8D660"7N=JJZ\.&^NLNRJ7*U3+$F:7 M:S_6U*R>TPZYVT<(#/L1JP7"*BN=Q/4J[H5:DI'RW0@%$'^[?=0-TA2Z6R,D+,5H/MM@>P MP":.2W%(`5@7U,>M*J"JP])B;'))&%;LV,6JJ5SRC#0RYN]'#QR@7E"]B8P6 MRR?+?&J/+N<$856E76I4T=X9[1G13-@?W?323D<-]=1*5YWTU4AG_;356DO- M]=98@]TUU6%[73;98W]MMFM2?T8PR#@#H'-6^<(L\=UD%1ETDD.;G?;9:J,M M]N!^$RYXX8@?KGC@C`/N^-^0&]YXY$2QW;;'(25P\T>Q%H@OSSV+F^7>B9WW MZ^FHIZ[ZZJRW[OKKL,#[5A@8DH*JEO2E5 M7\WF"50@``7(NSD$`BC`5O''EY8\4_55;ZZKVD(O/<@>'2#]GZ:&KG[+I*_O M/KCOQZ]B^O+7OV7[]N?_?R#^^O>OJ_\`5!;_`DC`E17P@#D:(`(7N#0&'L5K MEM):4@XS*4LY,"\*M),%QY:0!RZE:1^C'[]$>,$2$B>#)@P@"5/(PJ^@L(7Z M6R$,9R@T&NJO`'-A'LAR-C+X929BZ`(BB:(5+ALJ"H5UR]\+E8,Z#8$.,TOD MD-WHDAXX%`1VJ)XMT>Z+ZTJB:.):QB&?TD!#7\BXB2NJ-A"KD%Z4EN<).H1D6YJI2%_ M.AA#?=''E?OCI"4SN][3G,/'YRW<-Q9F:8XYV0@.![B!-*DFT'S>7DY1L[DN<@H1HWGS6 M1C-:4TXL:N"JXE8L=M(1H7W;IS[C6<^2YM.D(D4I24_*TJ6U\I\SPY9HN$,: M&4X0E6I294[/`C2'&N:B<^KI-P]92U0)E5+SZBBQHOG1J"1TG!+=*9221+#L M?(R@!K4I!G$*U"[IS:>6*>JHHH1+BT(UD*N<*%4%BC``*$P[`FF8.Q_:U6NJ M<:D0V$]_\*HJX8&4J^M;*"LS-E1:HE6JX1S+Z,"ZDM.A3#*/!19)(!M9'DEV MXK*7%.-KBRY>U'2!M:Y"[7N1Y1[G-C.UW86M>X MO3TN=4?BN>BM,UAXI>9*%M"QE'B.5?`I"%*3ZI$'F+(LY%6)Y]S;O`W.Y7D' M#55N.M:``C#GG!!(P#2WXQ&^K,4I5ST:0;4*$_[Z5R@`%O#X%MP^!-?VP@NP M&:$87-<+@*QDC#&YR0%[,I3U)>4IBZO*A3*( M;#+U3RUKV818-M1I%*,IMU4JA)<"7F$M;9RJ3Z,Z!!)>A!@'; M[,LPUUS<3HY8J?B14.=EH"$$@%Q/RG1-F>4 M6Y\ZK-V6#C;U4R]Y#1O7S-+UM)7XK&<3%=E0Q#9/'6[8@+.&C212^)%XO4:* M5QOB.9*X63!^OW!;_%D9FAL$1KVP4N-<>YS07BQ_^4 M]R.U[G?PB)UKD^_:VA$GMU'&)"^]!EM;!_\W:DZ^FIYGW.@+E[;2EVT-(#_E;%.D1E2\,KNHV-;O)7G:&\N;G MOQ.Z7XN>=L2&<>XS8SK!OTL]]N[]X8F-?+1K"1E3M/.][VNL?,D+?^UQ4_[L MF[]\Y\%N&\2#'MR>KK``=4I@3.:IZ>JGIR:Q[UHD\ZPU?_?+>G7NZD/_KGJW]@C3>_.L7_ MMSSD:\]CZG-_V]<7/OD-/_*&$NA@MFUYWE^>_N^K-:;,'*6MAXYPPGA?0QP7 M,[YV'_F15P4'7H.7<&]G)<%7>MMW?K#Q?_:G%2G#==#A=3U#.A5(;70U?&JW M?F*Q@7\T?A-(?!0E?K1W;&O7?A0E:FY%:O.G6R3X@2H(@EZ149H7=,"3@/ZW M@"6(%3B8-$['5XXG7O6G?2LX52<8>C/(?C3XA."WA-#7A#\8A>XW@BD(A3\F M@%@F'.MFA-&'?4D8@FLE=H&W@T2G@$>8 M=38(AV%7(U7C74K5>.%5;&]XAEGQ51SX4PUX,BZ#98A8^'%A.'J1R!6.Z(5F M:(@4>%>6"(E[&#HJ0U;I=#[<\EVRYX9?R(%?0M'M85$I:E(>8"!6@ M>&'(AU4UM7P2N"4!V(=^^(@=V(D.F'WH05C`J(BSV!6+E8@`-XE[I(1S_[B) MP:B*8BB):-B%*!@367(3V]B-*.&-]X6/_;A=4@)-=8A'Z?@2 M]GB/V%60^VB0%/F.!QF1R860_WB0$VF1%=F1(*E='CF2(=D>!'5;N'@UA)B, M@>5H+)E`*R%A)AD4HW9@&8(I!'4`KG<6,ND8.;F3L#$B.!D4LN(`!;AIN8%# MZN8[$!``3MEE0&<>0A$`#C`@+ADJ`I MC:-Y9:)9FE.(FN/RF:K)/JTY0J?YFF;!FK()D[79*[1YFV^BF[R2F[QYC+_Y K*+$9G$LRG,09B\<=>6C&F9R_QYQ(Z9R1$FO2.9W469W6>9W8F9T6$1``.S\_ ` end GRAPHIC 18 graph14.gif begin 644 graph14.gif M1TE&.#EA?@'\`/?_`````$U-36AH:'Q\?&-]I8R,C)J:FJ>GI[*RLKV]O'AX>GIZ?#P\/___P`````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M`````````````````````"'Y!`$!`/\`+`````!^`?P`0`C_``$('$BPH,&# M"!,J7,BPH<.'$"-*G$BQHL6+&#-JW%@0@L>/($.*'$FRI,F3*%.J7,FRI-IISL.#` MI@=#,(P8]&;7*6&'GDW;,P&^=C6WE$V7=UW?O=_>QNUQP52_IX&F+GQX($_= M+('7OBM]>M?AU:]"7YG=NO?O7(<3W8=@G+#YTD63KVZ^_;7-[F?A9P8OWZ?X M\6_;QP;_O3[_GO=--0```T!P@`$.D`?``AX58!R##WHD0'$+/N>??_]EJ&%, M]^'GEGZ4>8&2.DR')Y$@[\KB6DB,Y^>25MOU(W84BTN=EC#;FQB66 MOY'Y5)0Y;6GFFFRV^5A]`5#IYD]Q6CEG9W+>J>>>:O+IYY_6Y0GHH(0&:6>A MT:6G&*(N"LIH6,X]^J2CDE9J_ZEJBNAN>[J*U<3>C2@@@Q2"&&%$1K``*UC_BI3 MIG>BF5FSSE:[TV@?!1MAA,82ZZVRS+[797]?NG4;M(Q1:^UNZX9T[D<(5`C! ML-QZNVV%X%HH;KO\K5+_B#?Q2 MIQ9+3&B`'RW00%$?)ZB>>O<- M^%&7D>TTSXI.S;//0.N;LM(MDUL6FD,K=:'?@?^]]^"<;^ZYX)]K#OKHHI>> M^>F8I]XYZ:C/7;CA(24@->+$*5MOT%AEK;NTE<<&GU[`!R_\\,07;_SQR">O M_/+,-^_\\]!'+_WTR"MT\,Y4>V2[O$^!:$`"P6YE7*E)0=VC0!$"X.#U$BJP MUO?A.S=^4HD+X/Z4Z,NK_L*)&[CPH[W2G0!I$\`!&K!)O3N@`M&2P`4ZL'L- M=-/P0H*]?R7N@I)Y(`,UR,$-%;"#(/^$5`1#2$),E?"$L_D@"E=XM1'JJ55; MN=Y<8LBJ4ZEJ*Y&J84?8]D`5@BJ&4Z,?4<`FJW]5*8=(M.%!>-A#%[+PB6^" MHA0_Y,0I0M&'5LSB;JJH111BL8N6$EX!IF*^_E&M*(QKHU07NM;UDI>L`Z;IA.G+8*YNF,D]57K2D:H.._M,P#^7HYST MJ(8U^RSH0ATXT2Q9_U2AMHQ<1/]HL)\^JU:ZZU*LYX2,0QX,D$57U*]R5K=2E@W&@FN!SLK:FS*G+8)=I%S;1/EXKJ9#N;U M+I.U*T3;:MA+CB6S$`C9>13;FI.-"K*1-1/O/G*@!''+00V#@+:X9\V[DM-7 MJ]6L7#D;2\_B)4Q`A4D<11(\DA27N,=U5W)!LESF`@]*S?7(<)7[7.3NQ;K7 M=6YUJ9M=[>8%NMOU[G>Q.U[N[FBZXCUO=.$8WI^.K&2F$8AIH2(H]'YDOY]UVM?Z;9WO_KU[W_S&V`"EU>\X`UP?PVLW@(O^,'\'3"$)1SA`HODM1V5 M;;?H*YL%X"PEW!K6M'`X%VX]X)1D\;!*3(QBN.PP*^G+*:)`A+,&%"`G&/4G M]T;FERFA[;VJ^:)+:GQCH>0X`3L.L@O;B9Z:%B=JEA)R:K,HY2E/LS2D)2;I2?.KTI9>%Z9? MN$-8A0HIO&&5E3?-Z5?%):?Z89'7F<85M*/-J&53^U;6OO:LLJWM M'TZ[VX#B-K@W)>YQ7ZK]^ M^_O?_Q9>V/Y)2MII;Z"TU6E0.VM9T10W*:WU%@1@>ZQBS?9_"A\GPWFK3=%0 MEEWNUI`=S3+8C=_6X[JM+,'GBQ5)F>5Z%9%.E:3?O2F#U.LR)Y=*0].T)35/.:=<612,DQQB5\\ MZ-S8SU++[]Z;D+XQDD&-^PFSWMOS<5VDLO] M[7:Q.P2L)F^SPM?6\YWJ+L'*=*L:O?%+CSQ7E3YYIT>^<"!1L4<(/LW:(1SC M5G=[9&[>]]&OG3AQ8E#$,1S;KX-4XX"?32Z/NO"]X_7T<1>]S=..=KZ7GD1_ MC[WOZIP_LF(1\L5CN\DTOVL477^U#[;W+S$][V&-?K_2GN?B#0_ZB&K'^>&=[ M8M=Q%95_9O=^]X=R1H11]T,O3]4P475ONS6`D31_^?=AH]1Y3F6&-=:'@,[G M6WH')O0G4_`R6M*W'HZ5<0&8@(%'&BD'547?DBX>_TW2QDT+P22?@V28>U'A5_(?$I(@$P(A`#8@U:(?`;_J"+!EQ]T MYW]U>#Y5^"'-EX2'!8='6'MS:(&">("$:'P-%XAP&&\`(#*&1U,F`W2OMX** MF(,?*(9C.!Z%6(#NI1.K)R_K)R]IJ(*B>(DG]X:':(=]J")_ M"(:::(2(:'^C>(NQR(=K.'=A^%E+4H/<$7^9B(E5L5(7# M&(03&((5:(Z;.(CN*'_(:(O:N(UQ*(3O:(^X*(OBR'^+*)!PZ(`;_F5<2F776E>=YE>>0E@6&E$%TE-&;E!,K&6=&F7 M=8F4Y+674*F6::F89PF7AAF9>IF8A\F7C-F6(V>"T4B2=M)N-(DCGOF9O28; M2`9^CS$8HN5CA^-D!M)/9E&:L:$:!^":)$=K%#08R^(`!?VB;BHQ1E*H.`$0 MG%&W>2T)``'@`!.24:(V:VKAFZ&D*,%9)U)#:NEQG.<.I85$&&V,D4SJQ M`/$"``+P@*J'(/A3%!CE%WXE+PI@FE[1G4B&1N$YG@M9+.UYGH,'`#VVGL4R M``FRG34!C@(DH(46FJ+I0:1WH`24H`HJ40S:H'CRH!`Z>A(ZH:(3#:BHIVI"UZH4WJ;4^:H3X:I=HQI51: 4%0"7I5JZI5S:I5[ZI6!Z$0$!`#L_ ` end GRAPHIC 19 graph15.gif begin 644 graph15.gif M1TE&.#EA?@'\`/?_`````$U-36AH:'Q\?&-]I8R,C)J:FJ>GI[*RLKV]O'AX>GIZ?#P\/___P`````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M`````````````````````"'Y!`$!`/\`+`````!^`?P`0`C_``$('$BPH,&# M"!,J7,BPH<.'$"-*G$BQHL6+&#-JW%@0@L>/($.*'$FRI,F3*%.J7,FRIWQ#RY3IISL.#` MI@=#,(P8]$O-+%V'GDU[,@&^=6$#K9V3]T?9=X%SO8W;XP*C?D__3EWX\$"> MNE4*]VUW.O7AO7-;_WR]N_>UQ(M#VCA.N'QIIJI9/]\9/>5VMN_;QH?/-KQX MM^TC?Z\]?[]/^T8-`,``$!Q@@`/C`;"`1P4:?QAF.)5] M]\EGX6^^?6B6B&61B!.''<)'HHD:8L5BBRZA^"):*\)HXXTQH9CB6OF=-"-7 M/W85))!FZ;AC9C7BF)N25QDY)'M),BGEE!X9>>19/9KTI(O7;9F5ERI9>>6( M45*9F9G_:5D=F&BVZ2:9-060Y9L_R>>(=[)YY^`4N5GH(06&MN@ MAB:JZ%&(+NIHHG,^*NFD_](U2NFE=$:*Z::8:LII34HQ152HH5)6F5*_6;JI MIY^VJBBKKL8:**RRULJ5A!X)F.""$SY((80&,-`3K=G9*I>Q)(D))ZC(-FO3 M:!_A"B&$O>YJ;;##ECF;JL-V*=J8)6KKK'OC5ED<`A1"H"NUUDY+(;854E7N MO"P1Q^VA\O)V+WO>U@>B1^CZ*O!'[@X,+Y3YTJN?L^'M6VG""D<<$H`$-Q"4 MQ0@J=UYY`[&6+<3;]ALB>)3ER:S$:B++X5P!\,54<2^_?)P"N'Y\,LH2RV@R M30[?K*_(9.GXE%$/'.`RB#$G2#.-(.-\8:U"[ZQ84^NUEFI@5&>-]=97=^T4 MU]]?>VUUV&2/;7;5:&LM=MI@GZUVV6RO_;;;;<<-]]QV0W#9UD/WEK3?1\]< M<[P^ATQ=STUW927B/JZ(]^-U0RYWY)1/;OG=E6-^.=V;Y^VYY)J'SKGHZ^W- M=T@)'`WXRQX%RZ[-/#L]KYB,:VFA7KCGKOONO/?N^^_`!R_\\,07;_SQR">O M_/+`*X3T\ZQ#X'JZ4N5G0`*X$I0@JD05S:-`$`+0X/,0"*"`6M=G_]QQW$=X M/I(*IBL^KZH72+^AQ,JN_V3Y[^^_=O\+8(;Z)\`"+LN`"-17[1+(0,8LL($0 M_W3/`R-(P:],L((83%4&-_@]#FJ0;-I+FZF&X9.C!&CK0AC@4T@5SF$`:\O"'1=DA$`7HPR$:"G<0*`#1C!:]I`5%<$PK M7&B$N!F@M459X4J<$0N%1;+DCXI,`N-UH$67+X[L<%8$CU&4N#J8'>V)`%B: M3\RXQ461\2UT#*`8?7,;,>:1-GLD%QK=TD>IR220=11+(3]2`&%!P'M-?*/2 M!HH/D;.QER%C@LFOI-%P_@*7%\652#YI$H"@`MWH5OFYS+%2E:WL'"QG MZB5E*.C5LD\ MMDQ!Z?*:N@XI5^:HDVGW$ M0`BB5H-V&J%J13&?>I259;D:39?&U;2*3%EA99*[9.W%M7F!K960"%N3O'8D MM,7M;462VXGM%B2MU>UO/Q)[ZV6N?(5[WN::U[[J M?6Y^1:)9M$J+>E')SP):EA)JZ0I+'0$+M1Y`R;$,6"4+;K!8#$)"D(0OKX3* M3\L:4("<%)2=U+.K7\YD-;MJK(@PV7"'A?+A!(18-2B.YGI,K)H%&&U1,:9L M!7.LXPCRN,<-_#&0>RC8(7>JR$:FE)"33$0D,_E12W[R29TLY5=1NBP,($IC:2Q2R!X&=E/CB+*7S>QF._O9T(9V:ZO63C>^&YW MEY7?8G5KM__]D6!OC-@GOS/9MX/R:K,#*U^YV1IP=!N0BG?_Q$^_EY1O4/H+X(8=^;IQOFV; MAY:0HK3WS,N8;LAX.^@3'KK.+2.>I0T[JG4UC<*':4V,6QRC$:>XU8VJ]:YG M_.M79VI5'NR1:@/SVO$$L+9%CEIYNUV@Q9+3@L+=7\ZJ7-SF;OG2X8[TL-Q; MW?,>;-^]\G>C%UW@@N*`K\\%.A%YQ0#YZEE[^I((OCMQ-SB!RXYWE.4=\YB.OV,U7,_>E M[[TR9:YWF@>>[\/W4/&)7O.K)C/Y*EI^\!7WM(*^#Z?T2RBP%IIWX%=GX,^_ M#X$A:>W`Q5'":W=]A-O7CWFF^]ZC'X'JY\VCGJHJ??I;N>?CU=_^G[O?]\3G M?<;W>L[W?]#700*(?_G'3_O7501X2>$W>#HD??AQ>"YG@,6Q`!;S6`3>A[W$:P7@J275>"G>0PH(`2"5B@G;O^5;:E$@?)A@=^' M@1(()/>%(CQIHA>,5?9X7G8Y8$@B'N):'@OAX9I."H=]TLJZ(9[Z("6>(:[1WV, MN#YVAX?IHH>M!XN(2T^(N3R(>]B!6+98R; MJ(Q^&(EIB'T$PUG;%V!!2!]FF(S+&(7D=W;F)T?<&(?/6!/1"#".!8K6JT%5 M3U)XNC>,54A8P.B,LEB(IIA:]MB,O)B.5C%:TA@;LPB!Q%B,]_B/EXB,PMB) MJI60,%%O_&A;C8<26"21]7B0C,@NVO.,]%>Z75>[W5(DE< M\*5?^=62*[E>*9F2LC63-8F2**DC)TE=+^E"PG05W063]X631NE>-\F3 M-GF4XI642NF436$I,?+O:& M6WDQ7L@CXC%HJG$`ZU069^D>;QF7)7(?;AD4PN(`!-]B92NA1!\(.`$PF!QG M%*ES)@`0``X@(7'T'*QS:H#I2"\SF':B.JS&%(J9/055F-'B*.VA1!ZE$PN` M+@`@`#DU=P<"/Q!04'[!D>FB`&C9%:#I8D]$FJ:9?:\9FSH4%*Q9;@:&(#@F M(O(D.\-99;Y&EAARG,BY'\JYG-[1G,[9)6$9G4)'G>4"G=;)'].9G1/(G72V MG=X)%^`9GBXRGN1I%=AYGD9GGNH)DNTY:NSYGF,HGZ86G_2YB_F9GXC( @GZYFG_X)AP'ZGP/ZG]%VH`B:H`JZH`S:H`Y:$0$!`#L_ ` end GRAPHIC 20 graph16.gif begin 644 graph16.gif M1TE&.#EAA@$,`??_`````$U-36AH:'Q\?&-]I8R,C)J:FJ>GI[*RLKV]O'AX>GIZ?#P\/___P`````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M`````````````````````"'Y!`$!`/\`+`````"&`0P!0`C_``$('$BPH,&# M"!,J7,BPH<.'$"-*G$BQHL6+&#-JW-@0@L>/($.*'$FRI,F3*%.J7,FRI M6+-J!5EUJ]>O6@V"'5M2*<^N9-/B1*NVK=NW<./*G>N2+=V[>//JWW6);SR+^7+,RWWU M^UK=O^>.?_OZ_P".5UUY-O5WEX$!PH7@3OKM)UAW5LTG(7@+WM2@@X%!2%J" M'';XU848IM=?A7&1Z"%8)LX$XG9205#``08H5AMK'LWXE89-43@A=2G&M*)_ M&8YXXI!$JEB6:-4QMEA1CQ'5(W)"ZECD94^V]&.(FT7)XX[*5>>?/;IYY^`!BKHH(06:FB@ M"@VH5&-3*76;C5Y!:$`"K3DYU&M!G?;``9T)5!L`!<1&7E$"*,#7I)42)%N+ MC+)F:J>PP2)&5:B*?G2`J&W"A&.NO/::X*Z^!BOL<<`.:^RQ!"*K[++`_Q7+ M+$UWBA159EX^.Y>SUA*';;:_;EIT:K3;:8_\M M>-J$!U[XV8,;KCCBAXO-^.*.1P[XXY13[5S;;[V/*K='=.,:Z=UYAUZ3?AU3 MJ_>6HB\%F,T@,?#J1W&W:AL#*8<%NKM!X\W7A:4O=7OJP*_$>TB9R\WH:PI4 MFMOOH_4.KO,I@0C]N4?7!'(>D18HKI[&23RY\>_/DJ_;A]9=5C MMOZR[X.D?L&NR5I;;;>57U/\YLN,^EU7XA]IVH>^\X%)*9`:P*7L)ZO\C65E M4BJ@<>CR)@'ZI7]"^U^7`+BAHDGP@P_#3P`P5K$16A"$%T2A"HW_1<(5NM!= M)WRA#/4WPQH2J87KBI;W6O64T_!06C9T"PZ#2,2\#+&(2)3+$9/(Q+8LL8E0 MM%L4IPA#9KTK7PJSC+X:-B^H2<5A6.L9P.ZU17C=K%YB65J^_D4P,L9KC99B MU1.[%4-MB>5F0BKE+=>FG`#XDIDV,@ M0\/,>/.%VV3;1T8H*I+)J&XHJUN:TEE.<.G3@]U<)S87NA?W@/.1JE.H#9'I M4)"\4YXY$PCY+(:"?_T^U4>7UTGB+T&* M4'MZM%RLJQ%B/@(^>6J4GAPEIT2-RD^!`Q@9C/Y94I,%-:'7G.CJO(=. MH=[4H/*I:42C2E2&)J]SD))=6MC9NK7!M:US?*M>Z MTO6ND!.(0P]6R[A1)6=B.A,FK7G5;$FOES;EJC"'*B"J+M.J10WB"5?TT%3: M-:^756MFW8I9O&K6LYS];&='*UJUDHZO<+*EHVAW4I^EU'TK5:E>*(O8K496 MJGF9GU9]4EC#GJ>V2=GL7$D;VN(.M[3&%:YR07O'0:B3)#LF#Y)=A-#V9P@Y,Y80K/2<$1 M=O"%(;QA"7?X(Q4.9X9!/&(+KX;#)_9PBC6\8A)_V,4M-G%J,/SB'8H)HVC< M:'U]5&(1U]C',0;RC%$\9!7'V$XT#G*(E]SC"C/YQT]6YQU*9N(JI3+=-,L_I\JWXU$6-]+!V*3(V-C*.\ M9(VP&MK::7)$FIW%F&I:\YK`KCYVZ(RM;!WR7U6-:Z1CXO7PXC=180HZB]\O+FD?9YQFM<@/ZIP"X M`5^<$GAQ%F;\QW[`<5`F%1*+%U@\,UB7]R#RMWGM)'F[(5.O-W7O=X`(V!L5 M!7J3=WA#FN=?%.12]Q&!VE9`'QA@MM6!O[&"]H.=4^H=2\&=X)"A;4_5_ M`2A-"R1XMM=YLZ:"#O(:2=(8#@AO!BA@+F@:-/_%@H27@R,H?HVE?C>X:>CS MA%7%@4UX&5JH?4S85%,Q7]4T(L#W>$7B,,GB+UWB,&'B(8X6M#%<0G@5Q_1@#NCA+:# MAM?F?[>VA79XAT.3>.;'A?$G@JEG5)ZX@9O(7L`S/"!X@9S8?ED%A>,EA:-( MA7"ABK`HA)"7BJ^X`#M%:3X%`#I6ARW8BIU(5:XS7;?$6F!6B5:ES6*LX M0>#X?.GHC5%(B\XXAB5HF(Y=$8(*66$!JV!>ZI8XAJ)`<^5OO&!T3B'D4.18=28^Q M.(2ADY)@^(T@:9$7R7H)>8]B>)-QD9(W,WOC4WO_PEB/N3@SX>4@QY>,V*@] M$AF36S&4+1)],Q)0RZA\24EH)VF2,CF3=D2.GR>41S*2WJ&4I#B0*HF+^(B3 MSB<7^366Z\B2+9.6+PF48(F6.3)I$-!3XC-/D0&(@[B7BEB(?DF(@,F7B3B8 M5].(P%8K(*%:20FOF6 MCME_&6-@7ADAF-E8(NF1K"B+%?F9;6&:K(D2459D+&:;,(:;,K8B2&9DNBED MO&EEOUF;($*<23:V0F>Y#F>YOF=\.=YF^*9GKG)E"PB37Z8EW+RG.N)GO:IGL7IG>I9 MGO?9GNRYF_RYG_$G`'JGP.JGV5A:#P)`8UGF06UD3,#=ZGI(1#B:-ZA)#U% M:%'GBQ!P`&^(%Q9J%6+BH>R!=,BA)+CA`$E%+A`"3<"H.0$0H^8&.YT!%`'@ M`*TA5E_D0S'DH@'(*#%J0IOC;8UQHZD25C/J$0<90BH!38^H$PM@?P`@``)5 M&Y-Y@D,15F0BG76C`%$I%T[Z9YI M0G,*;1(ZH94'H7A*+'JZIW3DI\@&J-_4IX+:/(1:J'?N5^<*AY[@B3STD.N M&B*?>DFQBAFE:GSO\4,]U(VREJK?,JOFPJNB>IK!JG:^.JQ"5*S&^H?).F^R 2U*S.^JS0&JW2.JW46A$!`0`[ ` end GRAPHIC 21 graph17.gif begin 644 graph17.gif M1TE&.#EAA@$4`??_`````&-]I?___P`````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M`````````````````````"'Y!`$!`/\`+`````"&`10!0`C_``$('$BPH,&# M"!,J7,BPH<.'$"-*G$BQHL6+&#-JW-A0@,>/($.*'$FRI,F3*%.J7,FRI7"[N1)YYVZT%WXW7Q8C3C.6EAQB* M*(*%'THZOFCDD3#QV.->0VZ&(Y*K%4F3DM^QU12-4AZWXI/59:F6ETD2]=N6 M4)9I)GUBQJ:EFEBJ:&..9Z8&IDM4TE@:F>%Q:=R<+-5IYU]-YA3GH(3*Y&>5 M`/*7XI([!?J8GH46)]>AC%Y6$VDDC7:HIB5Q.I*F=8*:J:L-6NA9HQ/YH9Y#&HJ6? M<\P^QRQC>F>ZZ[`[_ZFB[\,9; MH[STUBNGN?;FJR]A^.[K[[_Y]0OPP`2S6?#!"/OT+KP1PN9P@U_9%3&T3C5% M<500&I;5?A-;=2525%VY,+HC)VSRR2"CK/+*M@G,\LOBEHP4I%'27!G'W06I MWE8R>POSS[2-^6:>0-/D,FLI0[<'"#H_8XO9.7VMU_TBJZK)"1=\:VYWA163F1G3-N M^HC4^6QMFW@W6GIDHS,<>IKS&OWY9[>?7.6G:S.O[F/K.%5M]NEB[YZX[883 M[V3;@G;+)M/#&_TZ;KE3/^GRM;.6JZBKMMI]J-N''RSWL'I?/OCCBV\^K>JC M+VNPO*[/OOR^T@^L_;K"O^OOQ4J[M)O*"V"[_V0F-P'^SH!\$1X"%W@O!CHP M4@I\H`35-<$*(BF"%LS@V33(P?#$KH,@9,P'0TC"@)7PA,=#H0HK,\+.A$PI M6=&:"`=#@R#X6J8Q2AF0[A-94U- MU%Q2Q"2RBT5GBE!<&A,E]L3#(-%=+:Q;#U=X+#*:\2Y?/*,:1;C&-K8EC6Z, MXV/"*$<-PK&.">O8__;(N:'AL6"\PYS!N"8=/X8M>8<<3@K'5CWBT?%^^$/C M]/X8+U(-<9"JXXGP'LF81E)M,/5Y$+;4,Z=->M)TG-15*N%&&$H6;&K98R0B MTW9*M6AMD5+AD"XWQ#)+#^W2E[T$T2^%&4P1$1.8R#RF,HW)S!`Y-*S@F$D*2OQN5!KMG*C'+WZ?"`NK- M?CK51`@:8]PH.M6;&G6@M*.@1IE*5GG2I4X]-250!1@[XU&4IM#K(T2_FBZW M9I6EFROD7)=JUJ8R+ZR`HFH",SBZ0Z55L'0%CV&31D-2NE26?#VI7T/3/#[> MD'71`]=P7B36RN*]RV.K5)S`?%VQ^26L+WN#2%\X]O!^=+7 MCCV][\_LJU^4YK>_+.,O@!\HX`$SL,`&1B""$\S6_S(XCPY^\,$6+.'34;C" MC+LPANVFX0V+K<,>OAJ(0PRT$9,89B8^<8`C[-R#M`PRSRJB$!?CGJK%6(03 M@Q:+J;5C26(OBZSL8@VYR&.N8G6&59QPCUNLIB4Z3(]:\H]63_1$*Z9,R%:V M,F.OW,4M)QF02]Z@QH3\Y$LVYY)6:C*QK)3D&OI4N3FL\L?*#.=]I7@WS=2Q M0KG[U>`/Y/^SV9),KV>+@K_FZ12WOG^] M%[SO>0\\X`?_=P#XAHA=4WA&3X[VLSO^K$1///^T+CBN:]MN!(UVV<5^.*V2`[IS MY\]`MY.^]."F_O!=_WI+L1YW MJ;6>\[$/H]T7S?JU)W]^+O[W?^" MUW_\!X"$1X`"^'^ZY#8E8G_4]'Y/IWSM!TY'AAZUQCIL%#AQ$*AQX?=SXZ=^ M1?9]`81^'4AY7V)^$6@30P5VVH=U*$=[5^6`ZV>"^X4U2*6"\7>"R9$ZFO=3 MS`=^/9B#3Z5SB3=W1[=_"'B$`6B`2CB`3(B$!=B$23B`H72!2^(U^,)^.&A+ M.EB%QU=>_[H7>U7U@^+G?LK6#5MN6'UGH%FIH@SQH=O/W>&X(6&:8 M@6A8-&]84!_5AEJXA0DG=QZH6=(#A4_HA`<8A8BXA(MHB(EXB`E"(CLT@0TX MB&,C@RBFA\LU4Y4H<5]XAGXH(YNX@\(GARQ(?W^XA7>X@J@'-'9%BGT8BJI5 M6;!85&+(@;<8%HL%AZ786:Y(BZN'A[*(@I7%4!5(A`_(+X[(B(K8C)#XC(\8 MC$2<`7TR]D-E5IA*='O3]$9+M&>,=9<-XU,7 M23!W/6.9;1=K"H:57@E[J\EAJMF::P>;6(.:LKDGKUF;,8B;(G:;NKEUO;E? MO/F;:4&;POD9P5F<9$&Y>DOP9:>ZKF>[-F>[OF>\&D1`0$`.S\_ ` end GRAPHIC 22 graph18.gif begin 644 graph18.gif M1TE&.#EAA@$,`??_`````$U-36AH:'Q\?&-]I8R,C)J:FJ>GI[*RLKV]O'AX>GIZ?#P\/___P`````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M`````````````````````"'Y!`$!`/\`+`````"&`0P!0`C_``$('$BPH,&# M"!,J7,BPH<.'$"-*G$BQHL6+&#-JW-@0@L>/($.*'$FRI,F3*%.J7,FRI M6+-JA?ITJ]>O6PV"'>LT:U*R:&^>3//JW>NT*]^_ M@`,+GDF@L&$&31L`<`#T@%3'C9<.9&#`K%^?@ZUFWHSS,E\"F>O2Y8S2,VF0 MID\3'4R@JP"/"P`L@!![-FS9M''7AF"``5;1+%.K'DZ\.$G0PO$"UVP<=?/G M))//11Y:NDKKF[&'AKX:,&B@U6UJ_^=.OCS<[^`'+[].?KSYP.[3HH_O=GU* M^G_Q\]6_E[]7].D)9E]I[Q5H8%P`!@B??Q\QJ-R!QCG84X(*`C;@21+:E>%< M&\K5X4T4?FB9>!"6:*)6%%:8GX0BOM7BB5Z]&%.*`0X$P0$&,+8;!`7LMN-K MN=FVTX4YM6?8806:NBA MB":JZ**,-NKHHY!&*NFDE%9JZ:63*D2E5.!)]E%O.WXUH`$)`$E0;D*E]\`! M_0FT&P`];C/JD0`*[$6JJ3;&EFI3M`HJ&VY`Q;K:4P<(Z:=+>AZK[++E)
3&:^!:>'9YUJE==BI95_U>-56#`",\TL$!1WI7:'HXZ@ALC[H!"V2H39)X M\L[RK:R4SFGRK!9K!&1TVV/Z2?;7898^M=MILGVWVUFN['3?<;=,M=]UHWZUW:PHN$,!'"70J M:[B\,8"S6BDWYW.^@7VW.%TLVBUYWI._3?GEEF<^-^:;:XZWYWI7WOGHGY,> MSCKG$+1&.&U_>TJXZP&""NR0B0MM.TX`/AY<[<7IGJWO)>4.$@.U>A3XZX(_ M);NQB`,-=9C0ZY4@\/?Q?OOU4D(54NO)#PY>;`H`^9OUPU%?K?D?I8A^3N1+ M&W6$TB_L'`2*,98TG5H.#`"7XSN/_?\M65)XG!8]`(Z&3%-JF(]FM\#9[*8W M_2-@T`JH.+R4:7U]\9\!-WB<(GUD`$L)50.#5+@8M>\T&'P6]0"5PH6=D#0M MA$D,D6(7%@Z0@SCL%KL"4+*/\7"&.017$(=H_ZT>$O&(VP(B$IL[H3KBD:!8GVQ4H>J;*,L M&RG+6D;1EKB\5BYW235>^G)=D>.(,(=)S&(:\YC(3*9!#-6OX]6H>QY97D_B M%7HAQ\*Y M+<%0IYP2?%X8E7C/,V:9\YSSZN>"_ED^>A;4.YF$9_V.-J?[3:8RMP0G-\5Y MS0#Q<#8Q(R&/1@B!F\VN:331)D`1.#6]4-.@[ILH24N:EY.JE(DSG`](X.E0 M+#742@+AWS3E.=)LR=0C%R7ACFCF0)O=AGG_52-H2B?(U/A1"9\A12D28R@\ MJ&:SI_2J*FT40[_%,+2F^M,I3US:U`J^%$&2!.$`;I0CC1)5HQY%ZA>5BL(R MMG!ZW\0,5M^%5ZM*M*S=!.QTLN@1!;Q3J`RL65%G`\&=5@UUIP.=Z$I'V=JE,E.=`O@O:SP+WL;X4;7,T.U[C%S:QR/4O+Z!.A7O;:V6^3];DB9B]SFMO>]RSUN?)/+WOFZU[[O M5=W7BM9.[[D3GB,"_V_O[-I=[_8VJN?UJ0?5>]7+`+/K"27O8G&H?$4"/! M<8T)E6,=@^1;.S9,CWD3A&: MV\QG-OOYS6ZF,YP%'6@\UUG/?R:T2(;*T;B:63M^4\F.0&A201YE1P_X\%TB MG1),:UI#@A0E"5]YK@']K0$%((IA(9"`V849`G(R:2)M&F9:RN34J0;*JAY; M+:1:MY"01@OV`E@E+UN+>*3&/O8YDZWL7S*[V;S_?#:TI4BS M;3MLX;ZW%O.M M[R?RN]]+_#?`CRCP@0^QX`;/(<(3SL&%,]R`#J]TPNJ([HI#SK]'=[ M$NE)Q[K2`US$F:>-XUX[551FOG:UWWR/@VPW(L&5M7/3?&H`RSL@X0UW:,$\ M2BA?9<;%-?8V%?[AI3X\&>)AN7AH_[WQ.WL\Y$TF^_SS)%"]ZLHB/TB)4+`D;.U;2EWY"A2K`4S2,/-AY>.D"YNYV#^HR'G=% M3J\&:VKOM-H0*QR';5:.\5]_&D`!DZX/WOU2*\IB\[Z8@^F4<8N93Y[L6VCY M\*$MBALW8?!OT/7V?`IBQ'S:AN:TS*U_+'WE6]_ZT__^\\__?>VO?_AF+9T4 M1UW]55V'DU2YQWLN5F%_D7U-P5%O]2-'Y5@'&'#(-WB@!GW'`5*((3F(&J(5#?-X(@*'UU%8(?@0#`@GJ)M5BKYQL2B&#[A'V9 M5``X2'O/9'OO]&D@U6`H^!R.`Q*Q$8-?95K#9L'ZB'"TAR/.(;L#-=@G-[9&>$:G@];+B$PL=^3]AWZY6';[@7;/^X@B=( MAE0X8%+CAY2(A5V$?I+H1F6,5# M@T(R0@^$@_%7B:.8B9D$`7\#`4`HB!TVA+BW7OBW?\?H?\F(7\S(?\C8?\V( M.&78GRX6[THCJ+X MC?_35VB(+.1(BA;72^.8BJBH>P5FCOCXCJ^(B(2U5:@5?$[X4(7HBO7(BWY( M/`/XD-*4B_G(CY=(D34TD&J%6+;Q@$:E47BHBR2XA@-IBFFXD`AUCR('DBVX MCPAXD2/9BFX(C[=C6UQ(CR9)??Z8DA/9DE5QJ(\N*4E#08L?88MVB(L?N9,4 M*)`C.7NL4GN#2(P)&9,WV8^\]7M-B%K;2'S=V('[L8<"8H8IYXX*"5-*^9)B M*953^9,H&7/H:"%>F8X7EI-LJ9+'-Y-A>8YTF981ED`D:9.J.'XLV187-#^+ M>%-A!7__1PF0_F:7!K9.`AB(GV)=:F78#&88^.`C1:!$JF8/.F3/;F* M?`F3I]B)C(EA\WA`EJF69HF72/F"?[F2:#6:9UF:,KDS$G9;?KF:,QJF,T.B,R'FY.D6\NF>NUF1GVF1 M]FF>-?DFB69H@R:@A89H@"9GAV:@A-9G!QJ@2N:@1T:@#+J@$)ID$:J@$JIF M9D*'&EE"CT88%7IG&#JB%_J@(9IG%YJB%BJB*LJB*^JB,(JB[2\JHS%Z:`GD ME,,(8(8'H@W:HQ3JHQD:9Q,:I#]:I$0JH$-*HC-JHTLZH$I:HT[:HCF1C5C) MC1]Z;)XX,J%7GS`R(+QV'Y"Q4+(6>$=S`,63%U]:&EABIEWY2%`!&;[A`&LU M>BLA>_M310&0IU3Q%-;84D`1``[P&N\4@%TW%W:*@YZ2IS^T88\G&8!J*H:U MIQ]!A"BC$K)7C3JQ`#((``)0@]TI<1!@6'+"H:$ZF7!QJ:T60IO:J;4(+`I@ MJG!A(Z+*F1HU`(Q1;`YRG4BDJP"WI5QJ(K[ZJQ`2K,+:2L4*4UEZK-F1K,KZ MG\WZ/W7$^JR.)*T'QZS4ZIK7>G[6FJUSR:T0MZW>>H'A"D#1.JXH!*[F&JOH MFAGL9D4,LJYE]T2,0IAXXIA5I"+PFDI=U*Y!:$6;]*]KZ7CY*B8#JR[EFJ[+ BBK`O5[`*"Q8'V[#S";&=ITP46[$6>[$8F[$:N[$5$1``.S\_ ` end GRAPHIC 23 graph19.gif begin 644 graph19.gif M1TE&.#EAA@$,`??_`````$U-36AH:'Q\?&-]I8R,C)J:FJ>GI[*RLKV]O'AX>GIZ?#P\/___P`````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M`````````````````````"'Y!`$!`/\`+`````"&`0P!0`C_``$('$BPH,&# M"!,J7,BPH<.'$"-*G$BQHL6+&#-JW-@0@L>/($.*'$FRI,F3*%.J7,FRIJSJU>75;^*'4MVK,&R:-.J[1EVK=NW<./*G4NW9-NZ>//JW[+:\2MKNYLTW-?0D0QLP2M&>0 MID\'5V#O:D4/_]T.WJCT\^A5BQ_?O?S3].[3]XT_=CU] MM,U3WF<.OW]HU-=])M^`!.JUWFKD"8C>?@7.Q2!/!R+8GH+G/4B7A0[R%2%[ MWS&(88,@AGC2AAP"EE]V_HFHVH0!`<8$!CO4%00&\UQK8;;CN=>!*+ M<`'YEI!N$0F3BT;BY&-.*C;II$TN9CBDZ/A%66) M?G%)U)?()9F6FBN->14"DB&%95%:PNB5F>:!J>>>(_X8H$R&!2KHH(06:NBA MB":JZ**,-NKHHY!&*NFDE%;ZJ$)(O3C49!_]5J-9V!F0@(X$[9;4>`\G0`CWQ.5>RQR";[%)O*-NLL M<\P^*^VT:^%)[;78_T*;[;;<;F9MM^"&>V>TXI9K[K+GIJLNJ.NVZZZ2Y!9X MU%9_-9655:;9N658I6ZYZ61.Z;N4O_/VBY51`->+6L#W^JONM^]&["[$$E=\ M+L469PPNQF0:%^]7']_IFJ`(RDBC;C;BB+*.G\)+H<8PB_7:GS2%?%G,-=G< MTLR9QEDE9)-E:9F^+N>,YG$ZL^5:Q[Q^5K!63V,%]=125VVOU?MB+7#45W>= MM==;4PTVUU^7';;69)\]MMAFI^TVVVJWK=7,3BT0P$<);`JKWAYYBG*/7BZ( M<\V!B9=T:1Z^C3;N.>:,=TYYW*\%*]O=G,"* M7CI[?A-[$\>'#Q[N@:UW^7*:KLL4.TFP@\3`KA#D;;K>3*7.5N`5'NWQ?P`F M:'3MS!_Y'DBD`[\WI[,IH&-PQ$MW.[7;?T1B]SEE3[O@Y.?U??*+-?:SG$$# M#("6V,_>_/PF(4GS3.#C3W]FYK?FL,H\`N".?`..737O_.I#S"[>^! M(G$32`8`E$\)L#>_$0OKC`?!/,UE3$S;RP83.+[BT06$^2-*"CO(PKA@+``< MLQ@,5]C"A=7PALG_BB$.=P@=&O+PAP8$HA!#I,,A&E%;1TSB@GRHQ";*SHE0 M7!$3HTA%?%7QBA.:&,.RLA6H69%@54G8>[H(1J+!Z(P&LQ/1%%:U+EX%*FXT MF+F*R*>".8Q>`[.A'D_%QA[X@N!-'+85^T(R(O-D68R1&+.6LD M)*%(QTE:$G^2O&02*ZG)3B+.DZ"L5N(X0LI2FO*4J$RE*E=I$$+IRW>:.EW? M&-"RU8DOE.H"(5Y&:,)>*G`PNJP++W\YQ$;R+(L.Q.6ZCED`JDAO-:>KWO6" MF$QB6K.$?K%.`_5'PA].49O(Y*8RTP7.#AUP.AQD#1,-!Q+K02!]<;I23_OV M!3]JBO.:WBRTO)DF`<%ET4]PL\!UNA&`<4-R_[_5K1J8O.E2,MF\B(: MDTSJYX@TS)U":QI2<>G4-HMY)V/BZ3,J==0R\5N>+V&*P+U$B"D4'$",9O1/ ME-8F1P.UIT27FD\-6>5^6^WIMIX*5IY.%)UGK<[S(*```,Q*@%D58`:U6M/, M<>YS=LVKYRRG5[SN=7-]Y>M?[RI8OTK-<%S!F^_FQ+YXUJF2(!4KM38DR<@V M%9^7KG,>Z3NA>ERMZRN215NQ[L;=[)+J?!5%@K+VMG^0J>^9%GP?/G+58KF5[_F M+`S)1C(HW`6J)!OF\(<]/.((AMC$AR%QE$Z<'!9[S\7?A3$$.BSB$H=$QC.V M\8UUW.(4UWC%/'ZQCU$,8(T6U7T>/3"@@ASC(>_8R3T&,I2%/.4<,]G*4LXR MB*^,8RY[N_/7QEY7L9.-PV4SV[_(?O8N#UV$,1M\6QOQ'!Q]W/&=4L%C=06Y;M(DZ\W"I*\!U.A7."H M[D7F<=S3B;<+O3BP0[X[C6:T,S0%"48;_C%A7#EDOJV81SW6J^*CUN+!_AW( M+T*4CW8F>+`&K<9[([(M_!(C&?W]<&4+?$AW38C4`O8U>%.M5$LQ8\YQ+O%! MV^O<[D/8T^J<+H!S>Z:N-GJX8Z;TI6NLZ4ZW&-2C+K&I4WW>+[]ZLZRN=9=W M/93_7/]ZQL6NR;"372_7F[,%4SK`N7XTZV>'$LF:^1$!_RZ:;LTSX-#[8`?; M=V0C=@J<(LU8"#R619;=(=R!R6#FQCT]:7;0>]%:8D#CYEAES[> M.)PWT>35">$PN<:]?&?AX@O'E,1LE/#SI`Q2Z3I:[7JWN]S=KNUS?WO=8Y?W MP%_<,=LMR]QV:K=MKMGH@XM9RV>3YB9%F57_R6;:.[Z8^RNGZ%/_^:6A'L%, M=7Y,]?E]SUN8?MHOT_*[3YCTSV?]?:\\ZU>0GE M$0500'872WIC7F[&?>R'/'7#%(/W:1DE-&734O<4?O,G7'\75GX5^'_,$X"= MMX$+N!D>N'W^EUGCAX$/95LD:'Z*-S\CM5^9%X*G\8+V=U5L%U=LQW\4&%86 MR'P]F((<,H#&!TT'F'?G58(M"(`0M1M'UE@:=7C61U\RZ!DO__B!/'B"S7>! M3H5T*PB"25@[/V6%9C6%[<>%ZJ>`VU%Z:8@\*GB&2-AL2@A1;;4K^!=`;(=! M!?1V:$B&:K6$$'`W$%"`Y(5W!I94RA=\O[=[BIB(C(A[B^B(C>A[CJ@>,1#P@TCC4TD`5_JM>!7X5YP\&'C&>&[[>'WZ&&W<&&;7B*;WA#JV<@H0B# MHTB*E^>';LB"6OB#\;=`IM@TK^A?8+A6"Q!4$:B)&754"1B,MMB'2+<[0QB- MPJ.'S/AW?N+L#B,LRB&#=:,V?B+=(:*)J**J2B+ M:V6.UT=LKA-:\BB%Z`B/Y=B%5VB"_G(H?D`X4T=1AQ^A?[6A@[U5C1T4BQ=6 MCDPAB-,S%`AHB%Z8CW#Q7!R2B4XH@3ZG?.Q8)N[8CKZXC[E8D>.(,QC)CV-H MD29'^5/(!3.G"9>I69I_J9-W"98SN9O_N!:SR9^G5W15B(94$Q M]=F?Y?F?Z0EC\IF=XUF@XGF@!(J@W,F>#&J@";J@#@JA"IH3$%AX4$@69A=L MVY:AMJDB)Y)IR6<5D0%/CP9]C14CO),7(*H?5G(`*+,J/Q$`#H!1;>6C"D<7.5I`G,*C,\0W7#<90DHJ15I\>D=H M*M%,"9!I%61_`"``^:<;_J07,-)6<"*='J$`(0H76*JEML&E7FJ'N(&F?\96 M`.!H9@H!`]`88R<3M81#?9IL'-JA1,20@HJ:A GRAPHIC 24 graph20.gif begin 644 graph20.gif M1TE&.#EAA@'\`/?_`````$U-36AH:'Q\?&-]I8R,C)J:FJ>GI[*RLKV]O'AX>GIZ?#P\/___P`````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M`````````````````````"'Y!`$!`/\`+`````"&`?P`0`C_``$('$BPH,&# M"!,J7,BPH<.'$"-*G$BQHL6+&#-JW-@0@L>/($.*'$FRI,F3*%.J7,FRI?4NWKEVW"[.1&K/*P8J%T"D"/7+=R2<>/+E3%K%DD@:5*_??\&'DB5,DO+ MFU.K7LT9]5K3*UUCEGV9=F/;8SOG73"8+P#0$``++HT;97'6LY$K[JSW+NS% MRJ-+;\R\N4?>'W\7U>Y1..FHSY=*QC]NE_QDNM7->PUO?/IX]VZK6Q\`8(#' M`@<,.(#`>X%'`=R=)&&" M9&W(84T67OA6AHE]:.*)/(7H(8$VK6B6BV7!V.%:(8J(UXHRH@B>CE?5:&.$ M./(HY)`I^?@C7$%&ER-:%))EY)&O)4GD>5,V]>227V%9Y99<:D8B20%\V>53 M86HY)FMBGJGFFK69R>:;<%Z59IQTUHF6FW;&I).$<^:)6)]^=@AHH/]>XDGH MH8CF9&BBC#8Z:*.01@K4HHXREM6>@V'JT7=)';454Z!N)^JFE";ZJ*2H1GIJ MJJPBNFJKL)H%($CT\2>@K?X9P$!5IY;J:JS0.2 MIN"*VVRYMY[+8DW=^MGOD.G]J>VZ!+\DWUP+-#"7POMQ-Y!PT+ZKW+\]4G22C<]%]/G3SN=G=2D1FWUU%=7C?766G<] MG-=0<_WUV&萇Y>-=M9KBZTVI]=>G=?/14N&8 M]N!LOTVXVX>;77CB;2N.^.*0/RZYXY0W;KGAD4,0M]PD#Y9`SQ[IRBS0,P'> MLI!7"CS3L:RW[OKKL,^\*=2Z\R:$S,#I4[!F0 MP*Q;\394"M`!0P(.@"*-"6\LR3YKRGS65_X_0#5G\]\1`<<#VAKY[N M_H'MOR^_DJ;/;W]7\=^O_VSU3^EZ2$]K#O@&F#//["\L__D[H`(;M,`&GBB! M#HS@B_HGP0IRBX(6S&!L,%BEM(0*+%L9SE1`^"FBB*H@8FL@!%L5PA`*YH2= MHUO@3.BI$2+$:PYHPR$:L45"/.(.BZA$6!5@,-$S MV=U^UL.:R6MB?,.+ZE;61&+YL%<53")R6L=`+F(17FA\S$>>Z!F3V0T`>+,* M&+L8JVMM,6AA=)\=W65&FZ71CW798WGT1L=$M>L^N_I(%/4RQ;Q9<8%B9,TA MRXC'/UX1D/$I("5+5TA6,>>+@LOUI);/_6LBDEK6<46UL81L2T\Z6 MMAX1;6UM"Q+=]I:W'_%M<(&;6^)JSKC"+:YL?[M<``;V:1G-J$`.2SJ#&?>X MN!UN=I7KVM;6Z+K@;:YVNWO;[XJ7N^0=;WK5&Z+D8G>[[HTO5R2C MLQY8_]/8ZIID`2-+R>AJ%:42AF1T#]@E60"L$@0K>"P&Z:I7_>-"]A5G9`TH MP*;Z"8$$V$NC$.#+A$0H6(TNM248UK!0..SA\P'GQ)GY&H@UN@">F MW:?G/;>LSW[V&*"'5M$(1UC,&BJJD`=]IA%V55-?CK2BILQC1H_)@RT<5:>8 MJF@);YHTH:KRJ-;L'DM?.H"29@J9FZ9E3M?0U:*NLJ1!2NI`H>]BM?Z0J0-= MK%WS&EB^_C6L@BUL5A&[V*@Z-K)5E>MEPTG9SF84M*/MJF936TW3OO99&)`7 MPCILNH&)6$$Y0NYRF_O=$#&7TSKG7-]8]WK2NY9GK?C13[,@(%ET MSKNRJJFUP/^46<-H^X$%CS%:+>N_^6N!XLR6/.\K:S_>TICSO,Y?[RADZ2P>0$G;.,Y^^ADY7@ M6U?ZO.82I@'E&[+B"CK.OP[VZ4QRF/3>6\K,9'9_.@ M-7CFYQQ(88[H[UI?..8]KLFQ.^SL:?_WTSV_&M!?)\"XG,O-_6M7U<-Y7@4L M_'T`RM]]EWSJ3UW]Y36/9:]J9Y7VDFP^Y)->;V4"'TH:1_V]1^_73)K^1I&' M/F)XWL]Q>B2F/]^[N&>O?!6R7OJXA\`BWSCVQ3]_^=7'?UJ;GX"+@JNP&S4V M:H=\XB=/E'9ZX<=9DZ<6/.=\O:=_W0>!8;%/#JA9!@HG@?.C3QDX M2`EX&UFW?<&$90D#72)G6.%F?P]X@=3Q@<%A?C6G>WPG=#]!=(*70UQW5O1A M'SU'?/S67\=G>1_#A..',TJX@4=(>E&5A-U6=H7U,"O(>Q;H>_DWAEZA(@?X;C0X6;)GA5[H M?1_X'8>W;XK'ADN8A>]S-'*H@0_'?0KHAG$H52!(?7DXA6!8A42(A>X'B52( M@(X8@7"8B'_%B&%XB(]X?3`X-]$UWB1UHB6;81GJW>ZC8@I0XBU>8 M4HS(AT#XA['8AJ&X@YXHB:E(B[]HQWR_B(E0^(;"B(RV&(G&B(>]N'_%"'Z9 MR(F56!:,97P0@'[-HB^[&(BJ&'&(6!77>&OSYS..-(W/V!7C*%@>@52B(8!W M.(FU.(S66"*->(R2IXB:.(&898A8EXZLR(S2B(_["%*=:(__G_B/^DB-R=@C M_7B/,)%QX;5=[V5>%#F1ZZ5>KY61Z+61%IE=]@5?]"62]362'!F2)VF2="6$ MQ#=3ZQ>1&/F1,NF1-.E=-5E>-[E;%TE<*-E>*NE=/EF20DF21)F2]V4=Z#.# MYBA'$B*1]Q63.````)'H"9`@(.8B60RC%DFH,-HVS&9S--/ MCEE\U:823]1_.K$`X0(``F`OS/)8GTA2%/W$%\# MF[H)83I1FRPI+@.P'S=6$W:X/\T9:-G6EB82G=+)(=19G0ARG=@)']JYG=/1 MG=Y)/^$)9]8VGOQCGG-6GNA95NJYGO[HGML"GO!9*/,YB.U9GP.I0%R6,X-R MGWDBGY(D.P;40HI9H"+BGW8"H)\G7#3'GP+TH$YH9@JJ'/LIBWXVH?@)D1E* A,!T8NJ'-Z*'JTJ$@.IOL5J(F>J(HFJ(JNJ(L.A$!`0`[ ` end GRAPHIC 25 graph21.gif begin 644 graph21.gif M1TE&.#EAA@'\`/?_`````$U-36AH:'Q\?&-]I8R,C)J:FJ>GI[*RLKV]O'AX>GIZ?#P\/___P`````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M`````````````````````"'Y!`$!`/\`+`````"&`?P`0`C_``$('$BPH,&# M"!,J7,BPH<.'$"-*G$BQHL6+&#-JW-@0@L>/($.*'$FRI,F3*%.J7,FRIGD,#]PA8N.GH1:>#PF\[GFWYJ9V%WGV>\CQUM>[?_TROWN,` M``,\%CA@P`&$W@MX)(!'`'YG4WSR):C@3/351QF"".(E781D48A3@P[2Q9YC M"ZYF88]"&(**8(@8@G^E1B3N+%."%DB:T'H8J7M8BC22(R9^.! M.P8I9$H]^FC7BR7IR)626S&)5EE%&OD@D$-25F5448[H%I)7=NFE@ER*%$"8 M7T(UII-EID9FFFRVB1N:;L8IIX%SUFDG;7#>J>>>,*W)YY^`_U*59Z"$%BJ8 MH8@FVI.?BC;:**..SK34H902Q-Q<@Z755*1=0#!EIKFK?*=2.JO/8D660"7N=JJZ\.&^NLNRJ7*U3+$F:7 M:S_6U*R>TPZYVT<(#/L1JP7"*BN=Q/4J[H5:DI'RW0@%$'^[?=0-TA2Z6R,D+,5H/MM@>P MP":.2W%(`5@7U,>M*J"JP])B;'))&%;LV,6JJ5SRC#0RYN]'#QR@7E"]B8P6 MRR?+?&J/+N<$856E76I4T=X9[1G13-@?W?323D<-]=1*5YWTU4AG_;356DO- M]=98@]TUU6%[73;98W]MMFM2?T8PR#@#H'-6^<(L\=UD%1ETDD.;G?;9:J,M M]N!^$RYXX8@?KGC@C`/N^-^0&]YXY$2QW;;'(25P\T>Q%H@OSSV+F^7>B9WW MZ^FHIZ[ZZJRW[OKKL,#[5A@8DH*JEO2E5 M7\WF"50@``7(NSD$`BC`5O''EY8\4_55;ZZKVD(O/<@>'2#]GZ:&KG[+I*_O M/KCOQZ]B^O+7OV7[]N?_?R#^^O>OJ_\`5!;_`DC`E17P@#D:(`(7N#0&'L5K MEM):4@XS*4LY,"\*M),%QY:0!RZE:1^C'[]$>,$2$B>#)@P@"5/(PJ^@L(7Z M6R$,9R@T&NJO`'-A'LAR-C+X929BZ`(BB:(5+ALJ"H5UR]\+E8,Z#8$.,TOD MD-WHDAXX%`1VJ)XMT>Z+ZTJB:.):QB&?TD!#7\BXB2NJ-A"KD%Z4EN<).H1D6YJI2%_ M.AA#?=''E?OCI"4SN][3G,/'YRW<-Q9F:8XYV0@.![B!-*DFT'S>7DY1L[DN<@H1HWGS6 M1C-:4TXL:N"JXE8L=M(1H7W;IS[C6<^2YM.D(D4I24_*TJ6U\I\SPY9HN$,: M&4X0E6I294[/`C2'&N:B<^KI-P]92U0)E5+SZBBQHOG1J"1TG!+=*9221+#L M?(R@!K4I!G$*U"[IS:>6*>JHHH1+BT(UD*N<*%4%BC``*$P[`FF8.Q_:U6NJ M<:D0V$]_\*HJX8&4J^M;*"LS-E1:HE6JX1S+Z,"ZDM.A3#*/!19)(!M9'DEV MXK*7%.-KBRY>U'2!M:Y"[7N1Y1[G-C.UW86M>X MO3TN=4?BN>BM,UAXI>9*%M"QE'B.5?`I"%*3ZI$'F+(LY%6)Y]S;O`W.Y7D' M#55N.M:``C#GG!!(P#2WXQ&^K,4I5ST:0;4*$_[Z5R@`%O#X%MP^!-?VP@NP M&:$87-<+@*QDC#&YR0%[,I3U)>4IBZO*A3*( M;#+U3RUKV818-M1I%*,IMU4JA)<"7F$M;9RJ3Z,Z!!)>A!@'; M[,LPUUS<3HY8J?B14.=EH"$$@%Q/RG1-F>4 M6Y\ZK-V6#C;U4R]Y#1O7S-+UM)7XK&<3%=E0Q#9/'6[8@+.&C212^)%XO4:* M5QOB.9*X63!^OW!;_%D9FAL$1KVP4N-<>YS07BQ_^4 M]R.U[G?PB)UKD^_:VA$GMU'&)"^]!EM;!_\W:DZ^FIYGW.@+E[;2EVT-(#_E;%.D1E2\,KNHV-;O)7G:&\N;G MOQ.Z7XN>=L2&<>XS8SK!OTL]]N[]X8F-?+1K"1E3M/.][VNL?,D+?^UQ4_[L MF[]\Y\%N&\2#'MR>KK``=4I@3.:IZ>JGIR:Q[UHD\ZPU?_?+>G7NZD/_KGJW]@C3>_.L7_ MMSSD:\]CZG-_V]<7/OD-/_*&$NA@MFUYWE^>_N^K-:;,'*6MAXYPPGA?0QP7 M,[YV'_F15P4'7H.7<&]G)<%7>MMW?K#Q?_:G%2G#==#A=3U#.A5(;70U?&JW M?F*Q@7\T?A-(?!0E?K1W;&O7?A0E:FY%:O.G6R3X@2H(@EZ149H7=,"3@/ZW M@"6(%3B8-$['5XXG7O6G?2LX52<8>C/(?C3XA."WA-#7A#\8A>XW@BD(A3\F M@%@F'.MFA-&'?4D8@FLE=H&W@T2G@$>8 M=38(AV%7(U7C74K5>.%5;&]XAEGQ51SX4PUX,BZ#98A8^'%A.'J1R!6.Z(5F M:(@4>%>6"(E[&#HJ0U;I=#[<\EVRYX9?R(%?0M'M85$I:E(>8"!6@ M>&'(AU4UM7P2N"4!V(=^^(@=V(D.F'WH05C`J(BSV!6+E8@`-XE[I(1S_[B) MP:B*8BB):-B%*!@367(3V]B-*.&-]X6/_;A=4@)-=8A'Z?@2 M]GB/V%60^VB0%/F.!QF1R860_WB0$VF1%=F1(*E='CF2(=D>!'5;N'@UA)B, M@>5H+)E`*R%A)AD4HW9@&8(I!'4`KG<6,ND8.;F3L#$B.!D4LN(`!;AIN8%# MZN8[$!``3MEE0&<>0A$`#C`@+ADJ`I MC:-Y9:)9FE.(FN/RF:K)/JTY0J?YFF;!FK()D[79*[1YFV^BF[R2F[QYC+_Y K*+$9G$LRG,09B\<=>6C&F9R_QYQ(Z9R1$FO2.9W469W6>9W8F9T6$1``.S\_ ` end GRAPHIC 26 graph22.gif begin 644 graph22.gif M1TE&.#EA?@'\`/?_`````$U-36AH:'Q\?&-]I8R,C)J:FJ>GI[*RLKV]O'AX>GIZ?#P\/___P`````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M`````````````````````"'Y!`$!`/\`+`````!^`?P`0`C_``$('$BPH,&# M"!,J7,BPH<.'$"-*G$BQHL6+&#-JW%@0@L>/($.*'$FRI,F3*%.J7,FRI-IISL.#` MI@=#,(P8]&;7*6&'GDW;,P&^=C6WE$V7=UW?O=_>QNUQP52_IX&F+GQX($_= M+('7OBM]>M?AU:]"7YG=NO?O7(<3W8=@G+#YTD63KVZ^_;7-[F?A9P8OWZ?X M\6_;QP;_O3[_GO=--0```T!P@`$.D`?``AX58!R##WHD0'$+/N>??_]EJ&%, M]^'GEGZ4>8&2.DR')Y$@[\KB6DB,Y^>25MOU(W84BTN=EC#;FQB66 MOY'Y5)0Y;6GFFFRV^5A]`5#IYD]Q6CEG9W+>J>>>:O+IYY_6Y0GHH(0&:6>A MT:6G&*(N"LIH6,X]^J2CDE9J_ZEJBNAN>[J*U<3>C2@@@Q2"&&%$1K``*UC_BI3 MIG>BF5FSSE:[TV@?!1MAA,82ZZVRS+[797]?NG4;M(Q1:^UNZX9T[D<(5`C! ML-QZNVV%X%HH;KO\K5+_B#?Q2 MIQ9+3&B`'RW00%$?)ZB>>O<- M^%&7D>TTSXI.S;//0.N;LM(MDUL6FD,K=:'?@?^]]^"<;^ZYX)]K#OKHHI>> M^>F8I]XYZ:C/7;CA(24@->+$*5MOT%AEK;NTE<<&GU[`!R_\\,07;_SQR">O M_/+,-^_\\]!'+_WTR"MT\,Y4>V2[O$^!:$`"P6YE7*E)0=VC0!$"X.#U$BJP MUO?A.S=^4HD+X/Z4Z,NK_L*)&[CPH[W2G0!I$\`!&K!)O3N@`M&2P`4ZL'L- M=-/P0H*]?R7N@I)Y(`,UR,$-%;"#(/^$5`1#2$),E?"$L_D@"E=XM1'JJ55; MN=Y<8LBJ4ZEJ*Y&J84?8]D`5@BJ&4Z,?4<`FJW]5*8=(M.%!>-A#%[+PB6^" MHA0_Y,0I0M&'5LSB;JJH111BL8N6$EX!IF*^_E&M*(QKHU07NM;UDI>L`Z;IA.G+8*YNF,D]57K2D:H.._M,P#^7HYST MJ(8U^RSH0ATXT2Q9_U2AMHQ<1/]HL)\^JU:ZZU*LYX2,0QX,D$57U*]R5K=2E@W&@FN!SLK:FS*G+8)=I%S;1/EXKJ9#N;U M+I.U*T3;:MA+CB6S$`C9>13;FI.-"K*1-1/O/G*@!''+00V#@+:X9\V[DM-7 MJ]6L7#D;2\_B)4Q`A4D<11(\DA27N,=U5W)!LESF`@]*S?7(<)7[7.3NQ;K7 M=6YUJ9M=[>8%NMOU[G>Q.U[N[FBZXCUO=.$8WI^.K&2F$8AIH2(H]'YDOY]UVM?Z;9WO_KU[W_S&V`"EU>\X`UP?PVLW@(O^,'\'3"$)1SA`HODM1V5 M;;?H*YL%X"PEW!K6M'`X%VX]X)1D\;!*3(QBN.PP*^G+*:)`A+,&%"`G&/4G M]T;FERFA[;VJ^:)+:GQCH>0X`3L.L@O;B9Z:%B=JEA)R:K,HY2E/LS2D)2;I2?.KTI9>%Z9? MN$-8A0HIO&&5E3?-Z5?%):?Z89'7F<85M*/-J&53^U;6OO:LLJWM M'TZ[VX#B-K@W)>YQ7ZK]^ M^_O?_Q9>V/Y)2MII;Z"TU6E0.VM9T10W*:WU%@1@>ZQBS?9_"A\GPWFK3=%0 MEEWNUI`=S3+8C=_6X[JM+,'GBQ5)F>5Z%9%.E:3?O2F#U.LR)Y=*0].T)35/.:=<612,DQQB5\\ MZ-S8SU++[]Z;D+XQDD&-^PFSWMOS<5VDLO] M[7:Q.P2L)F^SPM?6\YWJ+L'*=*L:O?%+CSQ7E3YYIT>^<"!1L4<(/LW:(1SC M5G=[9&[>]]&OG3AQ8E#$,1S;KX-4XX"?32Z/NO"]X_7T<1>]S=..=KZ7GD1_ MC[WOZIP_LF(1\L5CN\DTOVL477^U#[;W+S$][V&-?K_2GN?B#0_ZB&K'^>&=[ M8M=Q%95_9O=^]X=R1H11]T,O3]4P475ONS6`D31_^?=AH]1Y3F6&-=:'@,[G M6WH')O0G4_`R6M*W'HZ5<0&8@(%'&BD'547?DBX>_TW2QDT+P22?@V28>U'A5_(?$I(@$P(A`#8@U:(?`;_J"+!EQ]T MYW]U>#Y5^"'-EX2'!8='6'MS:(&">("$:'P-%XAP&&\`(#*&1U,F`W2OMX** MF(,?*(9C.!Z%6(#NI1.K)R_K)R]IJ(*B>(DG]X:':(=]J")_ M"(:::(2(:'^C>(NQR(=K.'=A^%E+4H/<$7^9B(E5L5(7# M&(03&((5:(Z;.(CN*'_(:(O:N(UQ*(3O:(^X*(OBR'^+*)!PZ(`;_F5<2F776E>=YE>>0E@6&E$%TE-&;E!,K&6=&F7 M=8F4Y+674*F6::F89PF7AAF9>IF8A\F7C-F6(V>"T4B2=M)N-(DCGOF9O28; M2`9^CS$8HN5CA^-D!M)/9E&:L:$:!^":)$=K%#08R^(`!?VB;BHQ1E*H.`$0 MG%&W>2T)``'@`!.24:(V:VKAFZ&D*,%9)U)#:NEQG.<.I85$&&V,D4SJQ M`/$"``+P@*J'(/A3%!CE%WXE+PI@FE[1G4B&1N$YG@M9+.UYGH,'`#VVGL4R M``FRG34!C@(DH(46FJ+I0:1WH`24H`HJ40S:H'CRH!`Z>A(ZH:(3#:BHIVI"UZH4WJ;4^:H3X:I=HQI51: 4%0"7I5JZI5S:I5[ZI6!Z$0$!`#L_ ` end GRAPHIC 27 graph23.gif begin 644 graph23.gif M1TE&.#EA?@'\`/?_`````$U-36AH:'Q\?&-]I8R,C)J:FJ>GI[*RLKV]O'AX>GIZ?#P\/___P`````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M`````````````````````"'Y!`$!`/\`+`````!^`?P`0`C_``$('$BPH,&# M"!,J7,BPH<.'$"-*G$BQHL6+&#-JW%@0@L>/($.*'$FRI,F3*%.J7,FRIWQ#RY3IISL.#` MI@=#,(P8]$O-+%V'GDU[,@&^=6$#K9V3]T?9=X%SO8W;XP*C?D__3EWX\$"> MNE4*]VUW.O7AO7-;_WR]N_>UQ(M#VCA.N'QIIJI9/]\9/>5VMN_;QH?/-KQX MM^TC?Z\]?[]/^T8-`,``$!Q@@`/C`;"`1P4:?QAF.)5] M]\EGX6^^?6B6B&61B!.''<)'HHD:8L5BBRZA^"):*\)HXXTQH9CB6OF=-"-7 M/W85))!FZ;AC9C7BF)N25QDY)'M),BGEE!X9>>19/9KTI(O7;9F5ERI9>>6( M45*9F9G_:5D=F&BVZ2:9-060Y9L_R>>(=[)YY^`4N5GH(06&MN@ MAB:JZ%&(+NIHHG,^*NFD_](U2NFE=$:*Z::8:LII34HQ152HH5)6F5*_6;JI MIY^VJBBKKL8:**RRULJ5A!X)F.""$SY((80&,-`3K=G9*I>Q)(D))ZC(-FO3 M:!_A"B&$O>YJ;;##ECF;JL-V*=J8)6KKK'OC5ED<`A1"H"NUUDY+(;854E7N MO"P1Q^VA\O)V+WO>U@>B1^CZ*O!'[@X,+Y3YTJN?L^'M6VG""D<<$H`$-Q"4 MQ0@J=UYY`[&6+<3;]ALB>)3ER:S$:B++X5P!\,54<2^_?)P"N'Y\,LH2RV@R M30[?K*_(9.GXE%$/'.`RB#$G2#.-(.-\8:U"[ZQ84^NUEFI@5&>-]=97=^T4 MU]]?>VUUV&2/;7;5:&LM=MI@GZUVV6RO_;;;;<<-]]QV0W#9UD/WEK3?1\]< M<[P^ATQ=STUW927B/JZ(]^-U0RYWY)1/;OG=E6-^.=V;Y^VYY)J'SKGHZ^W- M=T@)'`WXRQX%RZ[-/#L]KYB,:VFA7KCGKOONO/?N^^_`!R_\\,07;_SQR">O M_/+`*X3T\ZQ#X'JZ4N5G0`*X$I0@JD05S:-`$`+0X/,0"*"`6M=G_]QQW$=X M/I(*IBL^KZH72+^AQ,JN_V3Y[^^_=O\+8(;Z)\`"+LN`"-17[1+(0,8LL($0 M_W3/`R-(P:],L((83%4&-_@]#FJ0;-I+FZF&X9.C!&CK0AC@4T@5SF$`:\O"'1=DA$`7HPR$:"G<0*`#1C!:]I`5%<$PK M7&B$N!F@M459X4J<$0N%1;+DCXI,`N-UH$67+X[L<%8$CU&4N#J8'>V)`%B: M3\RXQ461\2UT#*`8?7,;,>:1-GLD%QK=TD>IR220=11+(3]2`&%!P'M-?*/2 M!HH/D;.QER%C@LFOI-%P_@*7%\652#YI$H"@`MWH5OFYS+%2E:WL'"QG MZB5E*.C5LD\ MMDQ!Z?*:N@XI5^:HDVGW$ M0`BB5H-V&J%J13&?>I259;D:39?&U;2*3%EA99*[9.W%M7F!K960"%N3O'8D MM,7M;462VXGM%B2MU>UO/Q)[ZV6N?(5[WN::U[[J M?6Y^1:)9M$J+>E')SP):EA)JZ0I+'0$+M1Y`R;$,6"4+;K!8#$)"D(0OKX3* M3\L:4("<%)2=U+.K7\YD-;MJK(@PV7"'A?+A!(18-2B.YGI,K)H%&&U1,:9L M!7.LXPCRN,<-_#&0>RC8(7>JR$:FE)"33$0D,_E12W[R29TLY5=1NBP,($IC:2Q2R!X&=E/CB+*7S>QF._O9T(9V:ZO63C>^&YW MEY7?8G5KM__]D6!OC-@GOS/9MX/R:K,#*U^YV1IP=!N0BG?_Q$^_EY1O4/H+X(8=^;IQOFV; MAY:0HK3WS,N8;LAX.^@3'KK.+2.>I0T[JG4UC<*':4V,6QRC$:>XU8VJ]:YG M_.M79VI5'NR1:@/SVO$$L+9%CEIYNUV@Q9+3@L+=7\ZJ7-SF;OG2X8[TL-Q; MW?,>;-^]\G>C%UW@@N*`K\\%.A%YQ0#YZEE[^I((OCMQ-SB!RXYWE.4=\YB.OV,U7,_>E M[[TR9:YWF@>>[\/W4/&)7O.K)C/Y*EI^\!7WM(*^#Z?T2RBP%IIWX%=GX,^_ M#X$A:>W`Q5'":W=]A-O7CWFF^]ZC'X'JY\VCGJHJ??I;N>?CU=_^G[O?]\3G M?<;W>L[W?]#700*(?_G'3_O7501X2>$W>#HD??AQ>"YG@,6Q`!;S6`3>A[W$:P7@J275>"G>0PH(`2"5B@G;O^5;:E$@?)A@=^' M@1(()/>%(CQIHA>,5?9X7G8Y8$@B'N):'@OAX9I."H=]TLJZ(9[Z("6>(:[1WV, MN#YVAX?IHH>M!XN(2T^(N3R(>]B!6+98R; MJ(Q^&(EIB'T$PUG;%V!!2!]FF(S+&(7D=W;F)T?<&(?/6!/1"#".!8K6JT%5 M3U)XNC>,54A8P.B,LEB(IIA:]MB,O)B.5C%:TA@;LPB!Q%B,]_B/EXB,PMB) MJI60,%%O_&A;C8<26"21]7B0C,@NVO.,]%>Z75>[W5(DE< M\*5?^=62*[E>*9F2LC63-8F2**DC)TE=+^E"PG05W063]X631NE>-\F3 M-GF4XI642NF436$I,?+O:& M6WDQ7L@CXC%HJG$`ZU069^D>;QF7)7(?;AD4PN(`!-]B92NA1!\(.`$PF!QG M%*ES)@`0``X@(7'T'*QS:H#I2"\SF':B.JS&%(J9/055F-'B*.VA1!ZE$PN` M+@`@`#DU=P<"/Q!04'[!D>FB`&C9%:#I8D]$FJ:9?:\9FSH4%*Q9;@:&(#@F M(O(D.\-99;Y&EAARG,BY'\JYG-[1G,[9)6$9G4)'G>4"G=;)'].9G1/(G72V MG=X)%^`9GBXRGN1I%=AYGD9GGNH)DNTY:NSYGF,HGZ86G_2YB_F9GXC( @GZYFG_X)AP'ZGP/ZG]%VH`B:H`JZH`S:H`Y:$0$!`#L_ ` end GRAPHIC 28 graph24.gif begin 644 graph24.gif M1TE&.#EAA@$,`??_`````$U-36AH:'Q\?&-]I8R,C)J:FJ>GI[*RLKV]O'AX>GIZ?#P\/___P`````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M`````````````````````"'Y!`$!`/\`+`````"&`0P!0`C_``$('$BPH,&# M"!,J7,BPH<.'$"-*G$BQHL6+&#-JW-@0@L>/($.*'$FRI,F3*%.J7,FRI M6+-J!5EUJ]>O6@V"'5M2*<^N9-/B1*NVK=NW<./*G>N2+=V[>//JWW6);SR+^7+,RWWU M^UK=O^>.?_OZ_P".5UUY-O5WEX$!PH7@3OKM)UAW5LTG(7@+WM2@@X%!2%J" M'';XU848IM=?A7&1Z"%8)LX$XG9205#``08H5AMK'LWXE89-43@A=2G&M*)_ M&8YXXI!$JEB6:-4QMEA1CQ'5(W)"ZECD94^V]&.(FT7)XX[*5>>?/;IYY^`!BKHH(06:FB@ M"@VH5&-3*76;C5Y!:$`"K3DYU&M!G?;``9T)5!L`!<1&7E$"*,#7I)42)%N+ MC+)F:J>PP2)&5:B*?G2`J&W"A&.NO/::X*Z^!BOL<<`.:^RQ!"*K[++`_Q7+ M+$UWBA159EX^.Y>SUA*';;:_;EIT:K3;:8_\M M>-J$!U[XV8,;KCCBAXO-^.*.1P[XXY13[5S;;[V/*K='=.,:Z=UYAUZ3?AU3 MJ_>6HB\%F,T@,?#J1W&W:AL#*8<%NKM!X\W7A:4O=7OJP*_$>TB9R\WH:PI4 MFMOOH_4.KO,I@0C]N4?7!'(>D18HKI[&23RY\>_/DJ_;A]9=5C MMOZR[X.D?L&NR5I;;;>57U/\YLN,^EU7XA]IVH>^\X%)*9`:P*7L)ZO\C65E M4BJ@<>CR)@'ZI7]"^U^7`+BAHDGP@P_#3P`P5K$16A"$%T2A"HW_1<(5NM!= M)WRA#/4WPQH2J87KBI;W6O64T_!06C9T"PZ#2,2\#+&(2)3+$9/(Q+8LL8E0 MM%L4IPA#9KTK7PJSC+X:-B^H2<5A6.L9P.ZU17C=K%YB65J^_D4P,L9KC99B MU1.[%4-MB>5F0BKE+=>FG`#XDIDV,@ M0\/,>/.%VV3;1T8H*I+)J&XHJUN:TEE.<.G3@]U<)S87NA?W@/.1JE.H#9'I M4)"\4YXY$PCY+(:"?_T^U4>7UTGB+T&* M4'MZM%RLJQ%B/@(^>6J4GAPEIT2-RD^!`Q@9C/Y94I,%-:'7G.CJO(=. MH=[4H/*I:42C2E2&)J]SD))=6MC9NK7!M:US?*M>Z MTO6ND!.(0P]6R[A1)6=B.A,FK7G5;$FOES;EJC"'*B"J+M.J10WB"5?TT%3: M-:^756MFW8I9O&K6LYS];&='*UJUDHZO<+*EHVAW4I^EU'TK5:E>*(O8K496 MJGF9GU9]4EC#GJ>V2=GL7$D;VN(.M[3&%:YR07O'0:B3)#LF#Y)=A-#V9P@Y,Y80K/2<$1 M=O"%(;QA"7?X(Q4.9X9!/&(+KX;#)_9PBC6\8A)_V,4M-G%J,/SB'8H)HVC< M:'U]5&(1U]C',0;RC%$\9!7'V$XT#G*(E]SC"C/YQT]6YQU*9N(JI3+=-,L_I\JWXU$6-]+!V*3(V-C*.\ M9(VP&MK::7)$FIW%F&I:\YK`KCYVZ(RM;!WR7U6-:Z1CXO7PXC=180HZB]\O+FD?9YQFM<@/ZIP"X M`5^<$GAQ%F;\QW[`<5`F%1*+%U@\,UB7]R#RMWGM)'F[(5.O-W7O=X`(V!L5 M!7J3=WA#FN=?%.12]Q&!VE9`'QA@MM6!O[&"]H.=4^H=2\&=X)"A;4_5_ M`2A-"R1XMM=YLZ:"#O(:2=(8#@AO!BA@+F@:-/_%@H27@R,H?HVE?C>X:>CS MA%7%@4UX&5JH?4S85%,Q7]4T(L#W>$7B,,GB+UWB,&'B(8X6M#%<0G@5Q_1@#NCA+:# MAM?F?[>VA79XAT.3>.;'A?$G@JEG5)ZX@9O(7L`S/"!X@9S8?ED%A>,EA:-( MA7"ABK`HA)"7BJ^X`#M%:3X%`#I6ARW8BIU(5:XS7;?$6F!6B5:ES6*LX M0>#X?.GHC5%(B\XXAB5HF(Y=$8(*66$!JV!>ZI8XAJ)`<^5OO&!T3B'D4.18=28^Q M.(2ADY)@^(T@:9$7R7H)>8]B>)-QD9(W,WOC4WO_PEB/N3@SX>4@QY>,V*@] M$AF36S&4+1)],Q)0RZA\24EH)VF2,CF3=D2.GR>41S*2WJ&4I#B0*HF+^(B3 MSB<7^366Z\B2+9.6+PF48(F6.3)I$-!3XC-/D0&(@[B7BEB(?DF(@,F7B3B8 M5].(P%8K(*%:20FOF6 MCME_&6-@7ADAF-E8(NF1K"B+%?F9;6&:K(D2459D+&:;,(:;,K8B2&9DNBED MO&EEOUF;($*<23:V0F>Y#F>YOF=\.=YF^*9GKG)E"PB37Z8EW+RG.N)GO:IGL7IG>I9 MGO?9GNRYF_RYG_$G`'JGP.JGV5A:#P)`8UGF06UD3,#=ZGI(1#B:-ZA)#U% M:%'GBQ!P`&^(%Q9J%6+BH>R!=,BA)+CA`$E%+A`"3<"H.0$0H^8&.YT!%`'@ M`*TA5E_D0S'DH@'(*#%J0IOC;8UQHZD25C/J$0<90BH!38^H$PM@?P`@``)5 M&Y-Y@D,15F0BG76C`%$I%T[Z9YI M0G,*;1(ZH94'H7A*+'JZIW3DI\@&J-_4IX+:/(1:J'?N5^<*AY[@B3STD.N M&B*?>DFQBAFE:GSO\4,]U(VREJK?,JOFPJNB>IK!JG:^.JQ"5*S&^H?).F^R 2U*S.^JS0&JW2.JW46A$!`0`[ ` end GRAPHIC 29 graph25.gif begin 644 graph25.gif M1TE&.#EAA@$4`??_`````&-]I?___P`````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M`````````````````````"'Y!`$!`/\`+`````"&`10!0`C_``$('$BPH,&# M"!,J7,BPH<.'$"-*G$BQHL6+&#-JW-A0@,>/($.*'$FRI,F3*%.J7,FRI7"[N1)YYVZT%WXW7Q8C3C.6EAQB* M*(*%'THZOFCDD3#QV.->0VZ&(Y*K%4F3DM^QU12-4AZWXI/59:F6ETD2]=N6 M4)9I)GUBQJ:EFEBJ:&..9Z8&IDM4TE@:F>%Q:=R<+-5IYU]-YA3GH(3*Y&>5 M`/*7XI([!?J8GH46)]>AC%Y6$VDDC7:HIB5Q.I*F=8*:J:L-6NA9HQ/YH9Y#&HJ6? M<\P^QRQC>F>ZZ[`[_ZFB[\,9; MH[STUBNGN?;FJR]A^.[K[[_Y]0OPP`2S6?#!"/OT+KP1PN9P@U_9%3&T3C5% M<500&I;5?A-;=2525%VY,+HC)VSRR2"CK/+*M@G,\LOBEHP4I%'27!G'W06I MWE8R>POSS[2-^6:>0-/D,FLI0[<'"#H_8XO9.7VMU_TBJZK)"1=\:VYWA163F1G3-N M^HC4^6QMFW@W6GIDHS,<>IKS&OWY9[>?7.6G:S.O[F/K.%5M]NEB[YZX[883 M[V3;@G;+)M/#&_TZ;KE3/^GRM;.6JZBKMMI]J-N''RSWL'I?/OCCBV\^K>JC M+VNPO*[/OOR^T@^L_;K"O^OOQ4J[M)O*"V"[_V0F-P'^SH!\$1X"%W@O!CHP M4@I\H`35-<$*(BF"%LS@V33(P?#$KH,@9,P'0TC"@)7PA,=#H0HK,\+.A$PI M6=&:"`=#@R#X6J8Q2AF0[A-94U- MU%Q2Q"2RBT5GBE!<&A,E]L3#(-%=+:Q;#U=X+#*:\2Y?/*,:1;C&-K8EC6Z, MXV/"*$<-PK&.">O8__;(N:'AL6"\PYS!N"8=/X8M>8<<3@K'5CWBT?%^^$/C M]/X8+U(-<9"JXXGP'LF81E)M,/5Y$+;4,Z=->M)TG-15*N%&&$H6;&K98R0B MTW9*M6AMD5+AD"XWQ#)+#^W2E[T$T2^%&4P1$1.8R#RF,HW)S!`Y-*S@F$D*2OQN5!KMG*C'+WZ?"`NK- M?CK51`@:8]PH.M6;&G6@M*.@1IE*5GG2I4X]-250!1@[XU&4IM#K(T2_FBZW M9I6EFROD7)=JUJ8R+ZR`HFH",SBZ0Z55L'0%CV&31D-2NE26?#VI7T/3/#[> MD'71`]=P7B36RN*]RV.K5)S`?%VQ^26L+WN#2%\X]O!^=+7 MCCV][\_LJU^4YK>_+.,O@!\HX`$SL,`&1B""$\S6_S(XCPY^\,$6+.'34;C" MC+LPANVFX0V+K<,>OAJ(0PRT$9,89B8^<8`C[-R#M`PRSRJB$!?CGJK%6(03 M@Q:+J;5C26(OBZSL8@VYR&.N8G6&59QPCUNLIB4Z3(]:\H]63_1$*Z9,R%:V M,F.OW,4M)QF02]Z@QH3\Y$LVYY)6:C*QK)3D&OI4N3FL\L?*#.=]I7@WS=2Q M0KG[U>`/Y/^SV9),KV>+@K_FZ12WOG^] M%[SO>0\\X`?_=P#XAHA=4WA&3X[VLSO^K$1///^T+CBN:]MN!(UVV<5^.*V2`[IS MY\]`MY.^]."F_O!=_WI+L1YW MJ;6>\[$/H]T7S?JU)W]^+O[W?^" MUW_\!X"$1X`"^'^ZY#8E8G_4]'Y/IWSM!TY'AAZUQCIL%#AQ$*AQX?=SXZ=^ M1?9]`81^'4AY7V)^$6@30P5VVH=U*$=[5^6`ZV>"^X4U2*6"\7>"R9$ZFO=3 MS`=^/9B#3Z5SB3=W1[=_"'B$`6B`2CB`3(B$!=B$23B`H72!2^(U^,)^.&A+ M.EB%QU=>_[H7>U7U@^+G?LK6#5MN6'UGH%FIH@SQH=O/W>&X(6&:8 M@6A8-&]84!_5AEJXA0DG=QZH6=(#A4_HA`<8A8BXA(MHB(EXB`E"(CLT@0TX MB&,C@RBFA\LU4Y4H<5]XAGXH(YNX@\(GARQ(?W^XA7>X@J@'-'9%BGT8BJI5 M6;!85&+(@;<8%HL%AZ786:Y(BZN'A[*(@I7%4!5(A`_(+X[(B(K8C)#XC(\8 MC$2<`7TR]D-E5IA*='O3]$9+M&>,=9<-XU,7 M23!W/6.9;1=K"H:57@E[J\EAJMF::P>;6(.:LKDGKUF;,8B;(G:;NKEUO;E? MO/F;:4&;POD9P5F<9$&Y>DOP9:>ZKF>[-F>[OF>\&D1`0$`.S\_ ` end GRAPHIC 30 graph26.gif begin 644 graph26.gif M1TE&.#EAA@$,`??_`````$U-36AH:'Q\?&-]I8R,C)J:FJ>GI[*RLKV]O'AX>GIZ?#P\/___P`````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M`````````````````````"'Y!`$!`/\`+`````"&`0P!0`C_``$('$BPH,&# M"!,J7,BPH<.'$"-*G$BQHL6+&#-JW-@0@L>/($.*'$FRI,F3*%.J7,FRI M6+-JA?ITJ]>O6PV"'>LT:U*R:&^>3//JW>NT*]^_ M@`,+GDF@L&$&31L`<`#T@%3'C9<.9&#`K%^?@ZUFWHSS,E\"F>O2Y8S2,VF0 MID\3'4R@JP"/"P`L@!![-FS9M''7AF"``5;1+%.K'DZ\.$G0PO$"UVP<=?/G M))//11Y:NDKKF[&'AKX:,&B@U6UJ_^=.OCS<[^`'+[].?KSYP.[3HH_O=GU* M^G_Q\]6_E[]7].D)9E]I[Q5H8%P`!@B??Q\QJ-R!QCG84X(*`C;@21+:E>%< M&\K5X4T4?FB9>!"6:*)6%%:8GX0BOM7BB5Z]&%.*`0X$P0$&,+8;!`7LMN-K MN=FVTX4YM6?8806:NBA MB":JZ**,-NKHHY!&*NFDE%9JZ:63*D2E5.!)]E%O.WXUH`$)`$E0;D*E]\`! M_0FT&P`];C/JD0`*[$6JJ3;&EFI3M`HJ&VY`Q;K:4P<(Z:=+>AZK[++E)
3&:^!:>'9YUJE==BI95_U>-56#`",\TL$!1WI7:'HXZ@ALC[H!"V2H39)X M\L[RK:R4SFGRK!9K!&1TVV/Z2?;7898^M=MILGVWVUFN['3?<;=,M=]UHWZUW:PHN$,!'"70J M:[B\,8"S6BDWYW.^@7VW.%TLVBUYWI._3?GEEF<^-^:;:XZWYWI7WOGHGY,> MSCKG$+1&.&U_>TJXZP&""NR0B0MM.TX`/AY<[<7IGJWO)>4.$@.U>A3XZX(_ M);NQB`,-=9C0ZY4@\/?Q?OOU4D(54NO)#PY>;`H`^9OUPU%?K?D?I8A^3N1+ M&W6$TB_L'`2*,98TG5H.#`"7XSN/_?\M65)XG!8]`(Z&3%-JF(]FM\#9[*8W M_2-@T`JH.+R4:7U]\9\!-WB<(GUD`$L)50.#5+@8M>\T&'P6]0"5PH6=D#0M MA$D,D6(7%@Z0@SCL%KL"4+*/\7"&.017$(=H_ZT>$O&(VP(B$IL[H3KBD:!8GVQ4H>J;*,L M&RG+6D;1EKB\5BYW235>^G)=D>.(,(=)S&(:\YC(3*9!#-6OX]6H>QY97D_B M%7HAQ\*Y M+<%0IYP2?%X8E7C/,V:9\YSSZN>"_ED^>A;4.YF$9_V.-J?[3:8RMP0G-\5Y MS0#Q<#8Q(R&/1@B!F\VN:331)D`1.#6]4-.@[ILH24N:EY.JE(DSG`](X.E0 M+#742@+AWS3E.=)LR=0C%R7ACFCF0)O=AGG_52-H2B?(U/A1"9\A12D28R@\ MJ&:SI_2J*FT40[_%,+2F^M,I3US:U`J^%$&2!.$`;I0CC1)5HQY%ZA>5BL(R MMG!ZW\0,5M^%5ZM*M*S=!.QTLN@1!;Q3J`RL65%G`\&=5@UUIP.=Z$I'V=JE,E.=`O@O:SP+WL;X4;7,T.U[C%S:QR/4O+Z!.A7O;:V6^3];DB9B]SFMO>]RSUN?)/+WOFZU[[O M5=W7BM9.[[D3GB,"_V_O[-I=[_8VJN?UJ0?5>]7+`+/K"27O8G&H?$4"/! M<8T)E6,=@^1;.S9,CWD3A&: MV\QG-OOYS6ZF,YP%'6@\UUG/?R:T2(;*T;B:63M^4\F.0&A201YE1P_X\%TB MG1),:UI#@A0E"5]YK@']K0$%((IA(9"`V849`G(R:2)M&F9:RN34J0;*JAY; M+:1:MY"01@OV`E@E+UN+>*3&/O8YDZWL7S*[V;S_?#:TI4BS M;3MLX;ZW%O.M M[R?RN]]+_#?`CRCP@0^QX`;/(<(3SL&%,]R`#J]TPNJ([HI#SK]'=[ M$NE)Q[K2`US$F:>-XUX[551FOG:UWWR/@VPW(L&5M7/3?&H`RSL@X0UW:,$\ M2BA?9<;%-?8V%?[AI3X\&>)AN7AH_[WQ.WL\Y$TF^_SS)%"]ZLHB/TB)4+`D;.U;2EWY"A2K`4S2,/-AY>.D"YNYV#^HR'G=% M3J\&:VKOM-H0*QR';5:.\5]_&D`!DZX/WOU2*\IB\[Z8@^F4<8N93Y[L6VCY M\*$MBALW8?!OT/7V?`IBQ'S:AN:TS*U_+'WE6]_ZT__^\\__?>VO?_AF+9T4 M1UW]55V'DU2YQWLN5F%_D7U-P5%O]2-'Y5@'&'#(-WB@!GW'`5*((3F(&J(5#?-X(@*'UU%8(?@0#`@GJ)M5BKYQL2B&#[A'V9 M5``X2'O/9'OO]&D@U6`H^!R.`Q*Q$8-?95K#9L'ZB'"TAR/.(;L#-=@G-[9&>$:G@];+B$PL=^3]AWZY6';[@7;/^X@B=( MAE0X8%+CAY2(A5V$?I+H1F6,5# M@T(R0@^$@_%7B:.8B9D$`7\#`4`HB!TVA+BW7OBW?\?H?\F(7\S(?\C8?\V( M.&78GRX6[THCJ+X MC?_35VB(+.1(BA;72^.8BJBH>P5FCOCXCJ^(B(2U5:@5?$[X4(7HBO7(BWY( M/`/XD-*4B_G(CY=(D34TD&J%6+;Q@$:E47BHBR2XA@-IBFFXD`AUCR('DBVX MCPAXD2/9BFX(C[=C6UQ(CR9)??Z8DA/9DE5QJ(\N*4E#08L?88MVB(L?N9,4 M*)`C.7NL4GN#2(P)&9,WV8^\]7M-B%K;2'S=V('[L8<"8H8IYXX*"5-*^9)B M*953^9,H&7/H:"%>F8X7EI-LJ9+'-Y-A>8YTF981ED`D:9.J.'XLV187-#^+ M>%-A!7__1PF0_F:7!K9.`AB(GV)=:F78#&88^.`C1:!$JF8/.F3/;F* M?`F3I]B)C(EA\WA`EJF69HF72/F"?[F2:#6:9UF:,KDS$G9;?KF:,QJF,T.B,R'FY.D6\NF>NUF1GVF1 M]FF>-?DFB69H@R:@A89H@"9GAV:@A-9G!QJ@2N:@1T:@#+J@$)ID$:J@$JIF M9D*'&EE"CT88%7IG&#JB%_J@(9IG%YJB%BJB*LJB*^JB,(JB[2\JHS%Z:`GD ME,,(8(8'H@W:HQ3JHQD:9Q,:I#]:I$0JH$-*HC-JHTLZH$I:HT[:HCF1C5C) MC1]Z;)XX,J%7GS`R(+QV'Y"Q4+(6>$=S`,63%U]:&EABIEWY2%`!&;[A`&LU M>BLA>_M310&0IU3Q%-;84D`1``[P&N\4@%TW%W:*@YZ2IS^T88\G&8!J*H:U MIQ]!A"BC$K)7C3JQ`#((``)0@]TI<1!@6'+"H:$ZF7!QJ:T60IO:J;4(+`I@ MJG!A(Z+*F1HU`(Q1;`YRG4BDJP"WI5QJ(K[ZJQ`2K,+:2L4*4UEZK-F1K,KZ MG\WZ/W7$^JR.)*T'QZS4ZIK7>G[6FJUSR:T0MZW>>H'A"D#1.JXH!*[F&JOH MFAGL9D4,LJYE]T2,0IAXXIA5I"+PFDI=U*Y!:$6;]*]KZ7CY*B8#JR[EFJ[+ BBK`O5[`*"Q8'V[#S";&=ITP46[$6>[$8F[$:N[$5$1``.S\_ ` end GRAPHIC 31 graph27.gif begin 644 graph27.gif M1TE&.#EAA@$,`??_`````$U-36AH:'Q\?&-]I8R,C)J:FJ>GI[*RLKV]O'AX>GIZ?#P\/___P`````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M`````````````````````"'Y!`$!`/\`+`````"&`0P!0`C_``$('$BPH,&# M"!,J7,BPH<.'$"-*G$BQHL6+&#-JW-@0@L>/($.*'$FRI,F3*%.J7,FRIJSJU>75;^*'4MVK,&R:-.J[1EVK=NW<./*G4NW9-NZ>//JW[+:\2MKNYLTW-?0D0QLP2M&>0 MID\'5V#O:D4/_]T.WJCT\^A5BQ_?O?S3].[3]XT_=CU] MM,U3WF<.OW]HU-=])M^`!.JUWFKD"8C>?@7.Q2!/!R+8GH+G/4B7A0[R%2%[ MWS&(88,@AGC2AAP"EE]V_HFHVH0!`<8$!CO4%00&\UQK8;;CN=>!*+ M<`'YEI!N$0F3BT;BY&-.*C;II$TN9CBDZ/A%66) M?G%)U)?()9F6FBN->14"DB&%95%:PNB5F>:!J>>>(_X8H$R&!2KHH(06:NBA MB":JZ**,-NKHHY!&*NFDE%;ZJ$)(O3C49!_]5J-9V!F0@(X$[9;4>`\G0`CWQ.5>RQR";[%)O*-NLL M<\P^*^VT:^%)[;78_T*;[;;<;F9MM^"&>V>TXI9K[K+GIJLNJ.NVZZZ2Y!9X MU%9_-9655:;9N658I6ZYZ61.Z;N4O_/VBY51`->+6L#W^JONM^]&["[$$E=\ M+L469PPNQF0:%^]7']_IFJ`(RDBC;C;BB+*.G\)+H<8PB_7:GS2%?%G,-=G< MTLR9QEDE9)-E:9F^+N>,YG$ZL^5:Q[Q^5K!63V,%]=125VVOU?MB+7#45W>= MM==;4PTVUU^7';;69)\]MMAFI^TVVVJWK=7,3BT0P$<);`JKWAYYBG*/7BZ( M<\V!B9=T:1Z^C3;N.>:,=TYYW*\%*]O=G,"* M7CI[?A-[$\>'#Q[N@:UW^7*:KLL4.TFP@\3`KA#D;;K>3*7.5N`5'NWQ?P`F M:'3MS!_Y'DBD`[\WI[,IH&-PQ$MW.[7;?T1B]SEE3[O@Y.?U??*+-?:SG$$# M#("6V,_>_/PF(4GS3.#C3W]FYK?FL,H\`N".?`..737O_.I#S"[>^! M(G$32`8`E$\)L#>_$0OKC`?!/,UE3$S;RP83.+[BT06$^2-*"CO(PKA@+``< MLQ@,5]C"A=7PALG_BB$.=P@=&O+PAP8$HA!#I,,A&E%;1TSB@GRHQ";*SHE0 M7!$3HTA%?%7QBA.:&,.RLA6H69%@54G8>[H(1J+!Z(P&LQ/1%%:U+EX%*FXT MF+F*R*>".8Q>`[.A'D_%QA[X@N!-'+85^T(R(O-D68R1&+.6LD M)*%(QTE:$G^2O&02*ZG)3B+.DZ"L5N(X0LI2FO*4J$RE*E=I$$+IRW>:.EW? M&-"RU8DOE.H"(5Y&:,)>*G`PNJP++W\YQ$;R+(L.Q.6ZCED`JDAO-:>KWO6" MF$QB6K.$?K%.`_5'PA].49O(Y*8RTP7.#AUP.AQD#1,-!Q+K02!]<;I23_OV M!3]JBO.:WBRTO)DF`<%ET4]PL\!UNA&`<4-R_[_5K1J8O.E2,MF\B(: MDTSJYX@TS)U":QI2<>G4-HMY)V/BZ3,J==0R\5N>+V&*P+U$B"D4'$",9O1/ ME-8F1P.UIT27FD\-6>5^6^WIMIX*5IY.%)UGK<[S(*```,Q*@%D58`:U6M/, M<>YS=LVKYRRG5[SN=7-]Y>M?[RI8OTK-<%S!F^_FQ+YXUJF2(!4KM38DR<@V M%9^7KG,>Z3NA>ERMZRN215NQ[L;=[)+J?!5%@K+VMG^0J>^9%GP?/G+58KF5[_F M+`S)1C(HW`6J)!OF\(<]/.((AMC$AR%QE$Z<'!9[S\7?A3$$.BSB$H=$QC.V M\8UUW.(4UWC%/'ZQCU$,8(T6U7T>/3"@@ASC(>_8R3T&,I2%/.4<,]G*4LXR MB*^,8RY[N_/7QEY7L9.-PV4SV[_(?O8N#UV$,1M\6QOQ'!Q]W/&=4L%C=06Y;M(DZ\W"I*\!U.A7."H M[D7F<=S3B;<+O3BP0[X[C6:T,S0%"48;_C%A7#EDOJV81SW6J^*CUN+!_AW( M+T*4CW8F>+`&K<9[([(M_!(C&?W]<&4+?$AW38C4`O8U>%.M5$LQ8\YQ+O%! MV^O<[D/8T^J<+H!S>Z:N-GJX8Z;TI6NLZ4ZW&-2C+K&I4WW>+[]ZLZRN=9=W M/93_7/]ZQL6NR;"372_7F[,%4SK`N7XTZV>'$LF:^1$!_RZ:;LTSX-#[8`?; M=V0C=@J<(LU8"#R619;=(=R!R6#FQCT]:7;0>]%:8D#CYEAES[> M.)PWT>35">$PN<:]?&?AX@O'E,1LE/#SI`Q2Z3I:[7JWN]S=KNUS?WO=8Y?W MP%_<,=LMR]QV:K=MKMGH@XM9RV>3YB9%F57_R6;:.[Z8^RNGZ%/_^:6A'L%, M=7Y,]?E]SUN8?MHOT_*[3YCTSV?]?:\\ZU>0GE M$0500'872WIC7F[&?>R'/'7#%(/W:1DE-&734O<4?O,G7'\75GX5^'_,$X"= MMX$+N!D>N'W^EUGCAX$/95LD:'Z*-S\CM5^9%X*G\8+V=U5L%U=LQW\4&%86 MR'P]F((<,H#&!TT'F'?G58(M"(`0M1M'UE@:=7C61U\RZ!DO__B!/'B"S7>! M3H5T*PB"25@[/V6%9C6%[<>%ZJ>`VU%Z:8@\*GB&2-AL2@A1;;4K^!=`;(=! M!?1V:$B&:K6$$'`W$%"`Y(5W!I94RA=\O[=[BIB(C(A[B^B(C>A[CJ@>,1#P@TCC4TD`5_JM>!7X5YP\&'C&>&[[>'WZ&&W<&&;7B*;WA#JV<@H0B# MHTB*E^>';LB"6OB#\;=`IM@TK^A?8+A6"Q!4$:B)&754"1B,MMB'2+<[0QB- MPJ.'S/AW?N+L#B,LRB&#=:,V?B+=(:*)J**J2B+ M:V6.UT=LKA-:\BB%Z`B/Y=B%5VB"_G(H?D`X4T=1AQ^A?[6A@[U5C1T4BQ=6 MCDPAB-,S%`AHB%Z8CW#Q7!R2B4XH@3ZG?.Q8)N[8CKZXC[E8D>.(,QC)CV-H MD29'^5/(!3.G"9>I69I_J9-W"98SN9O_N!:SR9^G5W15B(94$Q M]=F?Y?F?Z0EC\IF=XUF@XGF@!(J@W,F>#&J@";J@#@JA"IH3$%AX4$@69A=L MVY:AMJDB)Y)IR6<5D0%/CP9]C14CO),7(*H?5G(`*+,J/Q$`#H!1;>6C"D<7.5I`G,*C,\0W7#<90DHJ15I\>D=H M*M%,"9!I%61_`"``^:<;_J07,-)6<"*='J$`(0H76*JEML&E7FJ'N(&F?\96 M`.!H9@H!`]`88R<3M81#?9IL'-JA1,20@HJ:A GRAPHIC 32 graph28.gif begin 644 graph28.gif M1TE&.#EA>P'D`/?_`````&AH:'Q\?&-]I8R,C)J:FJ>GI[*RLKV]O'AX>GIZ?#P\/___P`````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M`````````````````````"'Y!`$!`/\`+`````![`>0`0`C_``$('$BPH,&# M"!,J7,BPH<.'$"-*G$BQHL6+&#-JW"CP@<>/($.*'$FRI,F3*%.J7,FRI/G#T_8)#`8X.> MAV5&OKQR-6N5KE^CC&V9=N74,6W+WEU3-^_?(WU+Q@U3./#CR)/W#HE`](/0 MH#^')FT:M?'9RDM>_[V==_?%WQ43_W\9/KOR\N8GHR\\WN7Z]/#C>__8X(`" MY]#Q=Z;^X#3/]BV]1YF``\IW%7`$"@4@2PD:>)N#R34(U(*M06CAAHH?T-R1JCCFJF6:0?A2CH:Y?29^:F M9VKZ0&E_YD*F9ZRTULJ:CK;FJJN!N.X:H:^Z]@KLL,3>.FNQR"8KJ[+,-EO; ML7;AMI5AL$4V;8[6NO672<)>]51N>4)[((/"^07_7[?.IJLNF^NVZ^Z$?+[[ MHKSD?;2``J4Q@.]H^R[@@+[Y[OMH`PO`BFV;]"8\7)9%->FPFW)Z%Z_""%.\ M8TAA`LQO:?YJK/'`!2M:L<4D'R5N@!.?&^?#NYU,[L@E@QMSGJ`=L*''_?Z[ M[\>:$6SPDC#/+/1.+K>6T MJ9(*'CWTX0W/&;1Y1>>8=,M,JX9X<9-3"Y("-F^L><<["]QSR$!K6?GH,DN\ M>':-W_BX;*G/9CCI)+7>H*6$@Q/].NRXQQYYZ?+)GKC2\RF>N\G#ZU3[P3/= MYP#AQ5_^P/+-M^Q[]-33./V?=-^=%E5+==_]67%5#][UXI?%A>:,D5%?C7:@M!^C(8_WV/+G8QX%Z\Q4"Z$"
_M>_`,[%>PE,8`0_*#]VJ:N$-(.4'+L M<^*,I)C!F5#Q8BSK7<2DMT0FMHN**`Q+^ZZXNM>$<2I9C%\9;_41S82IB"+R M"!S3=,3,6*>+7CRA^^H5Q=R!\7:_2J/*6F@ZT>4Q87_$X_#(*,C+G%&"9@'+ M0"))20%6$I*6S"0F-SE`3AIEDIH$I2652&&6CY'`XZ(QD=9(QFV1=8`<9K.* M^3OT(9-7>UP)W<[VM;SYK6^`^ULXP1DXOGGS?YOG?$`YT5DW<[93G>*$)SCE MF]K0G/=^YSV[RLY]XLUH!..2?@2*@`0;USXCX4SA%2C-9U+3B&/V8 MS0`U$W5K=&1%`?508FZT0GW$742AB,V+GN>9'M%E+^,(Q)72\9=V=*%$.]K$ MCP(I?=?4HO"JJ4:3!C)XA>0I3=/_-5+>F2^G/0VJ%6&YREHVM95.92HHGWK+ MJMKRJE3%JE2CRE6H>E6"7;5J5L=:2M`@X``("(`#$II0C["5H!Y9Z,^*$LVA M$JNHE`LI[/#*QY(F4Z=`5:90[D!]VJ.`A#`V4I5YE*."M&(5HO9)%:F MM$$T4VJ?P]K-LO2U"(BM1YHSV]YFM@',FR9215NY1S)WJ,Y];D>CJ[#LC0N% MRU48=1-F73&B$7S?^RX:QR7=X&2WO#/;+GJ]J-[U[K"][L4A?.-;P_G2-X;V MO>_]\JO?Z_GQM[_O^R^`HWC>`;M+P`8^JLN\XJU.AH];^W-P%6.WD'""9$$@ M8:ZL2<+T!9(B-O)3#(+B3QB)*LRR>95L9== M/&'KK>O"HW6D;SH):ATN"<'_*TSP>E&M:NJQNM7->S6L%UG@61>VUK:&**YS MW9A3M>K7G`I1FDCDI1A-]MC(3K:RE\ULB'S$LI@MJ&\SVUF&AFZPO/91@HZG MQ&4ZKN M8\);U/(.;+T'*7`SUC7?_0:XMS$*[L":EE"5@KB(B!U,NH95JQW]U6, M=USC']]JR#,N\DPZ&.1B+;DG2Y76M4Y;V@?EK%P_C&V$7VC;U:'YN` M.X4)__9?[;W3G=O<1OL&:=!=_6]3U_RD/LU0T^L7\*,S'-U&)3A.I_["JK,N MHT(_*+>XTVUU#"7]ICROGL\]XJB!2CS8B**XSLFN];1?7>R?B;9F8P[7:G__ MEJY>+[N=;,)MF=*=F8C]>M$/'W:[0[W@\5ZXX),Z]JPC?NOS-GC@V1CUP6<^ M\D^?_.6AN7F--ESLI)?\3Y?^>-1K7O6BOWM^CG2D))GL/=L,J#^YR7O=^_[W M;^M]$5_SW_J,Y_Q1+XXC[_\Y#N?G%@;HAQ=2B*8VC8H*,R>]K?/_>Y[__O@ M#[_XQT_^\IO__.A/O_K%OSF=!0Q6G_M[Q8T>>\>KY^"?[SG7[U_ZVH#][HJ' M=7E5?T,'>O0W>N^6?TYW@(U'>?:W,(MG>038@`;(>`"8@)"G<*$G=9VW?Q`H M@'TU@0[X>AOH>8E'=!_1=K]&)BL8=VO2&\9& MMX,GIW(HUX,9M%JHM7<(U7=ZYW>&)X$BN'HT47@PV'\/UH0C6(%,V'K6Y(&/\4BXMFMH2(8K@G]>R'D@>%A:6#QK__>&%E6`"%AW M*&B%(=B&8CA<^G$Y13(:L))(:JB`%^B& M()$QG<,Q[J*2A>*JPB&5\B* M:C>)C&&&':B*')B!"VB!L%B%J5>"MIA8PR@>H`B,M%B)K:B'-^S&(W2:,NKA(S]1#/[1+T\>(+P5,2U@K:9B+E'$O[]=^.`-__0$ZH>:, M.-4=D#@2T&$``W49/H0`G^%:SA%3K#&/(@$=_E@9^5@B_'@D"T``!,`JSM(K M"Y`I9K(A*O6-#.``"G"/EL$`!M`<";.@``"P``:P*4/$C:_QD,UQ*!.YB!KI M0_^XD:]RD?H8DA294E]T'<$E)@BP6B&Y6@:C,0O``(3X&`GP0\]Q``FP`)7B MDP)C&3>)5CIID0C0D_VRE+=%E)A3,$C91@+CB;H&C_`C:UZI+&`9EL@REF1Y M5[MVEFZ2EFK9.VQ))0SVB?UEEL#278T&:4L69F])5'L)'W:Y9MX#0.)E:(3I M7G3I*W$9N;R:!AFF'V9*V$V8(?9EAZ0^9B4&2&6>9EVDIF:.2?-]IF@&9JB *.9JD69H&$1``.S\_ ` end GRAPHIC 33 graph29.gif begin 644 graph29.gif M1TE&.#EA>P'D`/?_`````&AH:'Q\?&-]I8R,C)J:FJ>GI[*RLKV]O'AX>GIZ?#P\/___P`````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M`````````````````````"'Y!`$!`/\`+`````![`>0`0`C_``$('$BPH,&# M"!,J7,BPH<.'$"-*G$BQHL6+&#-JW"CP@<>/($.*'$FRI,F3*%.J7,FRI.6#1AX5+!@@&&"?/0+UVKGHV3MFV7LAG#QGV[M^_?1$?\Y=;??NVPEG_R_]O;SY\R*Q-CB@@+AQ]Y65/_C,<[QS M].%5YS^]/W!_O_:I]!]ZI`U((("W!;C:@0PV:!M6!SPPG$<1#E>AA`PP<%EP M!BI%8(>+@:B8B$"1^)."*)GHX&`JKJA3B_6!"*.+--:X($CKM5<<4;IZ)\(<)S[8P6QX?G/*-Q1T0X<7SUALOQI+IRV^T(:^L M\U]S%D7RS_B5K-^``Q1M]$A&%TU2T@,@G?323SM]M$A,0STUU5&'5+742G/= MM-99@WVUV%V3_3768W_$]-D@;8UVV6V''7?::LOMD=LI31KD7P3O[+?#(',< M--`B*QFXSW^KFCA)HRG@,L606SPSOC5KC+/@BV>.NE_9N>:LDW?XZ(2;9_KF^HG>>IJW]Y1ZOS2UY\#>N8_D._#!\S=[\/RL:^--E8=8F95\:\M/;[U_U5^O/=_;=T_ER=Z'S[GXY#L(?OGH*_^;57EY MM594SQ-T[D!P>>74^TNM519>>WFW[+7U2TU;]*(6^,W%+G(9H/T"Z!VCN(]^ M"VS?_8Z4/?/-J((H<];^_/]VOO1Y4#P8_*`(CS7"$E(GA";$E0$48(`':$E, M+]Q4#&.XK]]M2G4Y2^'*4$@6V(F/APT"XOF`R++"@Z*$,,T3`!-@QC'>5(+CHB+GQW-*(4 M7VG%-%+1<`IS(BO!Y4H?PC)XO7S)VKQF-;C5C6YWLULRD8FWN1GSF,]\0#.A MR39Z9U93FLK$)C*U&ZD3X;D MP[U5[O);P53B+W.73]'8TG/_?$T2_7G/A_4S-N2+92USN<;G*)1Q;2S02$9I MRBVZL*)>1"48>6?/@A;KH!#SWD-OR=".2B>B``W=ZY+ET3G_#A2A/P3F2W'# MR9I^\I(WS>0A0=E)GMK4ISGM*4Z!2M2A&I60\CNJ4#-9U%!.!@$'0$``'!#/ M>'JDJNSTR#QOEAB3MC1=,]5.0F6Z4GTN5)9GK5U9"?K5<8%4K#'E9UA+PY&Z MVO6N>,VK7O?*5ZPH``'N9`!6WWE5=EIU,QGBZNA&VE9^7B MME&->92A+I0ARQK6HHZ![`N_1-GB`/:S8G(4`C;KD>%T]K2$;0#Q@M7!QMKV M?[?-;5=URUO1,+9)S4-9_AA&W-X2Z;TNL;O>32%XPUO"\9)7SX3F/:\'TZM>]+&WO0FE+GR-]5[>22NI MYW(66`HRO^,>US3XW9]K`JP=6$F/2!M+$;.:5-\R]5=_\*N*_*`5X808TB#_ M2\LFD\I?]DDKPQ^^L%@:LF`(3OC$)I[+01B(X1$W.$UH]'`![Y?B%NM%PWL\ M8%T62$`(;NYG%*RXR0I[L2/S(=VC=G7*! M]7O(._^'R,_S!9:>`SV]01,:>88^-#`!K>C2,;K1MDHTI`_T*3#]J5%\&HZ8 M-.23(?;UTZ`.M:A'36H+%U9,@VTG:N69V`3[5EI26U"YV2I&X M5IA"VT;#UG5:NX?KCT0VTZ6Z-(8XK4JD!/6G2H6W3N/][GHW=:GXEG>^[:U( M_.[[WOJN,H6D2M55GQJ>644L/2^'[6^_RB:SYFC#MRW29@?LV2?MM;(MKAN, M.WS1YM[G*' MLAS!,C'4H%V.Z18+_O%DTWVL>H=!5+M&SPS7MT;8[L5-N1[!; M1^1O;SK??:UW<>/]B._QD8^`!..9##.=YB2FY"%/^YWS_O>^_[W MP,=]Y&1V+U153K&=!OSA_8X=Y7.[VL^?)=/I3GVY1W_G<5^^];$__>W///#( MYOGU44[^NIN\Z]H??,?9GG'HJ_7\9BU_]9]N;>FC/_V"AWOWZ;_/^C^`Z)86 M@$<'*.PF<8O%;TQ%;P#G1SM=I8`.F(`0^&\/*($1"&_^%G`(F&^8,1Q19W`/ M('4*AWSAPG[X!WXPL76[M7\;YW;^IW_WEW\P.'^Z\7,F\6@]!W/3%H-]9X)K M)W[OYW5MUX(A1X(E.'Y#Z(,KQX)&_QA^V;>"<^=]YF=_\5>$3@@2$V(% M\8$JLY4LSO>#%:=S6'11,&11I/1%K4=E1,B#5:A^(3(2$C,Y%4-\D),Q(NA; M:TB%K4&#T#%VB,9\A2%V3\A_;C@B?`A1>@B%3*B"0=A_2^AL>?B(A"A_9@=_ M;)6(C((!2)8$B)DQB%FCB%F/AV&Z6%(*&*C&>`FZB(.^A_*]1" MI)1Z99A1J>2*KL)L?O@8[5)\PP1`"W4,@FP`(URD?CB&!`951/9C@A@D?,R MDHW!D9-Q`/L"DN:&+PWID,>(C#9XD[*3DSI)*ST97S_Y0SP9E,HVE"["7_XU M7Y(6+,K59`;D0(&VE,#2E,[%7`6T9NTEE;]"E6562%]V7EI)E+(2EF( GRAPHIC 34 graph30.gif begin 644 graph30.gif M1TE&.#EA>P'D`/?_`````&AH:'Q\?&-]I8R,C)J:FJ>GI[*RLKV]O'AX>GIZ?#P\/___P`````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M`````````````````````"'Y!`$!`/\`+`````![`>0`0`C_``$('$BPH,&# M"!,J7,BPH<.'$"-*G$BQHL6+&#-JW"CP@<>/($.*'$FRI,F3*%.J7,FRII6J>J#3F6[-JT;[\F]2IVKE.K:Y>FA=L5[EFW M(K&:U5M7,-&_AQ,K7LRXL>/'0HU"GDRYLN7+,!LP\*A@`6?/'SM_?L`@@<<& M/27+K(K9)>O6+5_#7BD;=NW6JF/>GLU[Y^[>P$_^MIP;YO#@R),K3QT2P>@' MHD.#%EWZ=.KC*K$CU[Y]N?#NP8N__^3NO;Q<\^COAB=ODGWZ]_#!/VAP0,'S MZ/<]5Y]_'6?\I/\!&*![C!&XF'BN!:B@>@L"9Z!B",;6X(04XO;1`0\XYQ&& MSG&8(0,,@$94A"P]B)F))RJ(XHC;K2A@A>BY""-SZ_DWXXTXL@@2??9!-YV( M/HZV'VHZD4C;@"HF&5Z+-N:HG(Q.U@0E4$9F%^656!8E$@,$/."AAQMFZ*68 M"(`(Y%%-PCDFDU+:J>>>);W60(]?BAEFAV2:R5.5 M'SD@@`.D-FARMNN+9ZZ_`UACLL,1>EFNQR";KVY19L646 M6]F]UFR1TBH5UFWN5:N;M;H)QRM*[%5I6'G_QRIK[KGC?8ONNL.6VR>[/JE; M:U4+*&`:`_:2EN\"#N![;[Z--K``J]2F">_!CLD[D[LD*1R4PP\KZ:"O"R-< MI\56@M2EO_J:QB_''`<\\*%R8FPRA!2OAN3*_T%L7,K=GJRES.V%=@"&(._; M;[XA;R8PP3T^7B/KIJJ9G;/J4AR\+>>RX-_PZYO&U[GCOE/.F>.Z\$T]3[07/ M9)\#B!L/TO+-.W^B[])7GS#UL.*]MUI@W8466II;?R#VXI>?./GFIQ\O^NJW M/[K[\`_(?OSTNUK__>0RRQIA3_D%U??/FDNS"L.]_DU+@%O!B_^HDI=Q*5"! M@ZF-80;B/:8T<"]RF2!=\F(7N_"O@EPQ8``+XZP2[H6`"4S,\%0TO^`U;'\M M'%KR_]@40_S9\%HWS&'E=,C#6?7P?@90@`$>T*4R%3%41SSBP)@7*MOEZ8<8 MJZ$)9Y8^*5;(B@^DXN18!KPE"4N+4(07%CL(1O&-L4%G7*%5N+A%U7FQ45U* MXH<\(L2RC(LT%R8JI#Y"%]&$C69=,\Z1Q=Q(:)KN* MJ;)C/A*:*<';VL;6-\$%CG"#`^X;GK3G`\@YSGS5G=.=J8SG._\9CS1 MJ4YQTK.>]9RG._7)S7WRDV]:*T"&B"10!#2@H$0"T7XBDTAI*HN:,:OB-;]H MS"ZZ\:).P^:1'(HNB*9.HK'S*.PL2M(V9E0DNNSE'(FH4CO^$H\SK"A''ZI1 MV3DRI#5-"3*_PT9FOG&'RYQIL?]$6KSR[12CPI-3+6=I2U@R]:D"Y!Y4;SE5 MIYKRJE3%JE6SRE6K>E*K2P5K4ZNB``0<``$!<`!"$>J1M0[4(PH%6B0'*=1? M$36:()U=3L'54T/VU4(4K69=D757UUD3IX'=%D<6R]C&.O:QD(VL9$.#@((R MP*T&;>M`V4H:$,EU84<=;$C)DP`ND>D!]7).63D[J`M%J-[M2S)2V MB&)*+70J2]LR40H!L/6(\D;+O.AMCW;3:[+ILK>'[GVO#N,KWQO2M[[X MNR]^ZZ?WW_W&K[_^=1^``WS,]1*8F&O2RUF^*EYOP1"59"1OGW(#X:C*T+`6 M-HZ[NE,+>\,UW5:-"#%#P(8/[2$$P:Y($F'O&"/4GC%PN&P2E, MH`,C7!"^,"3'*:YQD(.,8A67)80-K+"04RB9'O\/R4>&D/Y8[)=+_L^I,8;Q M!BU\8R9;2S8H?#&4`^CE"EH0AS:&,HHMF>$P<_!%?>ERC4'8Y`AJ2\P?)*#+ MW,O*,?L9SV*6I4*LC!`70YC(AK;@D"G9XULR^BT4UJ0D!\T@!*I8T(\NLI,) M;>0SKY+)U[HR&1,2X<,,>#VG9B&X'IWJ;5&KU?\3/G!Y82UKY]&ZUL2[-:X? M:>!=MZO7O@:6KH.M(%*-B5"3"I1SRA2B]1U%LM".MK2G3>UJ/^0CEL4L07N; M4,^2C*[$#J1-D.=AF?KTL!-+[$=-RNYSG_1Q00TWA0J[T9(:]9#*%*8SFTG( MGR85W/)&ZFR:"^P7Y?7=0-5WOP7NUW3#6^$!_^OT`+XK`5/.M,I6U;$_U.Q@ M@G:L(*]J6+O*:I&'7*PF3SG*5T[R6#)XJS`?>-S7SO?09YW$1C>6V3L_];>7ON*33SUQ5N_VUML^\%8?.NM-BI\@!6E( MIHX:/N$Y?'GFL_CH_"=`M\G\Y<^MG]!WOO3;N<_CA]/ZQK\^UXY(QY:&Z*5- M9.A,M$?^\IO__.A/O_K7S_[VN__]\(^__.=/?_9W#+4[^Q?HYB,Z\;]^][)7 M&01W>L9#>0\7>;77>&(W<%S780!X>:H'=U4W=ENW>7@%@:A'@)0!=CKU@)X7 M@?\W>M9C@+D741C8=S\G@`WX+AZX@*0'>K"';DQ'=QL')C58*!TG=(JE'(]N'(O5X1#.%:4A5J%QUF$AWB?M1JTUX(!"'36H8/K MYH(C>(63,8"9EX"8IW91IWM6B((6B&$GF&M>2$,22(9CN(9?N(*Z(B`&1B&?PB'()B'=JAYS9$?S_,CI,$JR`5:;UB!,@B)<,52N]1] M1O0A=Q1^4E*%:`B(G:AV&],Y'I-_]R)#)B&]4:+L*B`ML&*BY.+O7B+EL>%U4."34>(PWB' MMV>+S\B+R+B*(0%3T=%[VZ@?C%AN9DB,7>AO031$E^)WE2:, ME5$O^G=_'R.*D_@S['B-S<@>FD@2T6$``M4:0H0`H-%:SP%3L-&/(Q$="'D9 M`RDB!ADD"T``!)`IA$4>"W`I8H(A*66)#.``"A"0F,$`!N`>ZXEO+CEE74EG"I)G(YETI3EW;I3'@)(PJF8?4U;+W"708W9U=& M87^YE^@AF`P27M[C77^'F+^6/HK)::,6:&R&7H!Y.2&V7YF9E[$=TIF>V2J@ 9&9KM")FD&2?6EIJJN9JLV9JN^9H&$1``.S\_ ` end GRAPHIC 35 graph31.gif begin 644 graph31.gif M1TE&.#EA>P'D`/?_`````&AH:'Q\?&-]I8R,C)J:FJ>GI[*RLKV]O'AX>GIZ?#P\/___P`````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M`````````````````````"'Y!`$!`/\`+`````![`>0`0`C_``$('$BPH,&# M"!,J7,BPH<.'$"-*G$BQHL6+&#-JW"CP@<>/($.*'$FRI,F3*%.J7,FRI2G:HUK-NK7].BY2K5*MRX9NDNE8NW;5ZO M:H_B'"NXL.'#B!,K7ES3*./'D"-+GJRR`0./"A9@UOPQ\^8'#!)X;-#3L4S" ME%>B3JUR-6N4KB?'EFPZYNS7N!OGWNWR-N3:,'WS'DZ\.,Z0"#X_\-R9L^?0 MHTL+1VJ\Y'3>UW=G3[P=,?"7W:M7_P\O/C+YPM][EU_/OKU)L`T.*%#.G+YF MZ`](\TS?\KQL]VD!R)9VV/EWEX`"&HC@40H.Q1]+#2XHX80^@77``\EY=&%R M&V+(``.<$?6@:@DB&.%C)P*5XD\CMD9A>RN^J%.,TATGXXTXHA=2?/,MYUR( M/GZ&GWXWM4@=@#1Z9R)V!=J88W%)/AE653G[$``$/=-BAAAAV&28" M'P(Y6);L16F8FCH2J%V$;&*)IIQK4ED4G7CF"=N./7H9)I@ MX,7)ZJNPRCKF:JRTUGJ8D;;FJNMKN.[JZZ^+]0KLL,0Z.&NQR"8KDK!"!<87 M<-.9YNR9:ZWV77>$,?OL:2=I6Z2,_]XJ*^ZXJAU+[KF^AAN2N<6R^RI8"R@@ M&@/R@E;O`@[0.V^]B3:PP*HSPHGNP.;9.9.[%2Y9HINYJ7L@P=]"3")(7.IK MKVCX6FQQO_\2.J?$(#MH,+=(*EPRP[@Y'&#(5;+\7F<'7*CQO?G6N_%E_@)< MI,`N]ZSBR+8M?/+0*0/=T@!()SU2TDB3Q/0`2S/MM-11*RW2TU-;?375(6%= M==-?0]TUUV-K73;89XN]M=D?/:TV2%ZOC3;<9-/-=MMU>Q1W2I42V2S//@>^ M$\*]`0ZCR>X1WI_1X`D^I>/KAJ1`S!=7GK'-_.+<\?DZ0XGI`I]CVXX:G'?F3#L*^W^N"(\QJZ[*7QKI/K`=,TGP-^^P[2\,4; M+ZORS.NI0M?XC>7=0$0,/3#7UDBAQ7_`?`M M\D.@_^(R'O;!R(+#$8YCR$?_)PZZ[X/&`J$(3S?"$J;&@R8,G`$48(`'<(E, M+^Q4#&/X+^)UZG6H2R&Y,*BZVEV/AS@"XK)\*!XA-JYTNB/AG70(,B.NI67> ML@C7B13#2U3(R@R<6!4M(L5PY?&!:61?&W< MTQ5MQR0EKO&,!'LC$9D7QSE2!HY&"6!8JA?(0A+RD')!Y"`3FZ4&]0* M@"']T!,!#;BG?CZ$'_`9D"\DF-8QSY*,I%"5(<^U-G&=G0REWUAF#:[G,.:EDR00H!H/9(=C*A@L;M5KIN'>I'_4&Q-QN.;>Z M/2LN=DNHW>V*L+O>_2!XP]N^\9(W?>8];_G2JU[7-EZWO>AB+WRW)]_Y_O"] M]J4I#[U"EJVH#J[601MX/@ME*K@$+`DGZ:=B1!Y86(549X`!FN,,J-K&,2UR7%[MXQ1]^ ML4(Q&.#]U=@L`KZQA?62OR(["S`$_@N):=P_`B8PR226\0$M.<@I&WDO`XJ@ M4/]"0>-,N,#/NM]!F%SE3\+8QD'^\");?.,3^W?)9M[PAOO+2$,JA+IKSG&; MYX)F'TOYQ)-L\%G3)>A?C>C-A2;_UI?SZ[M%,UJ7^'UTNR(MZ=U2NM*&OC2F M=^7H30,H5);ZDI@"E1PR@:A"<"*LJE?-ZE:[^M4)^0AB%6O/U^X3LAYKJZRWNC6N)WPVLW-* M[&5+^YC?_J.VL:U0:Q=,KRS=]HWL*CINI]1T8.62GQXU;P^=>I;K0RI0H9K4 M?@O2W_H..+_W/56`#US@)3ZXP@M>R$]A5:NV9BP^'1O67`]4W5.TB:\C'%$L M"IO<\+NX2]WM\88-VCH87_?)5==LY2T4W39=*\E'GD2VBCSEYL:>MT'.QW"' MO.,T+_G,*F$*\[OB7$+L7MQ+F_?R!R"*GO4.M:#N;7&@E[OEP3;Y1SA#:XGG M\ZN/[?\GYZA]=+C29.-CO[G9\.FU6GN"R\YKN_Y6[R^'N=K7' M?>AKKWFWWV[W:A>]W3)_M^"537BMZSWK\!Z\WPN_]OH$*4A#8M`RU2E.SI-S MG9[79CSEV^_[W MP`^^\(=/_.(;__C(3[[RE\_\YA??"WB/7*/ M-WSX&9-T7&(?\,Z^/O?IRW?M3Q[RB1?ZXJ?]_O-#^_!*1__>LX^B<3M>__#G M??AG?O87=-FF?O,';L#T=*/6@%)7:H/R:V.%<%%5@0975$)=Q7`4>($62'`= MN($>^&\<.((AV'"8D1Q<%W$/T'5A5WVVX7\%>$*_$QT<5U'QIX#_QWCU=W_C MUWXH\GW*%8->!H3+=8,_Y(/D!X,)>'4]J!CE=U!"^'$""B` M39B#6BAY5!B%V)8AS&%Y8W@?JZ);>Y6%,OAQ.%7'B`V[>$>(.UB(_S&` M4)B(.!B)XJ:&1+>%FEB)-O>%E'B']">*`9B)CIA^C4B*!@B)J=AWICB*H%@J MG5*&Q_,CH'&&$AB+/,AV.;A"+=1*M@>'("5+-?@N.2=^Q1$OT@=],S-]^;$Y ME26+[M42=$@2S&$`]$09+(0`G/%9RB%2J7&-(\$/2:<`"78AU^5!T>9?$!FM\V9=^^9>`&9B`&1`` !.S\_ ` end GRAPHIC 36 graph32.gif begin 644 graph32.gif M1TE&.#EA>P'D`/?_`````&AH:'Q\?&-]I8R,C)J:FJ>GI[*RLKV]O'AX>GIZ?#P\/___P`````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M`````````````````````"'Y!`$!`/\`+`````![`>0`0`C_``$('$BPH,&# M"!,J7,BPH<.'$"-*G$BQHL6+&#-JW"CP@<>/($.*'$FRI,F3*%.J7,FRID8,/>C"JVK-FS:-.J%4MVK=NW<..J;<#`HX(%=O%^O)OW`8,$ M'AOT;`O3JMR5A@^K3*P8)>.XC^$2?AFYL>69E2]K#IEY[627G3>+'DV:M$<##ZYV.%C?+(T37\X<\L<& M!Q2D7CT=[^L'@GDB1]Q<:G?OW94C_Q5_=/OL[^'1Y\Y-_F-[]?#C:_]XX`%J MC_51Y[?/@(%>HN:E]%Y:`Q+X78%*L8>3?,0AR*!.#OH4H&,/5FAA>2%!)YUJ MK?W'85_793?6@!&R=>")EI6H'8D7"M>B9PK6I.*+-#+(&`,$/+#??OC9IZ./ M"/3G(4XL-C?C<2@V=N2("]:8HI-G+4EDDU!6::5)B36PX8X^]J@?D$*NR)(# M`CC@UYG8@;2?`_?!Q4";#:!FII?8;1@7F6;655>:]/FHI5QO/N?CG#_*^0!@ M5U(F9:*,-OK6A(Y&*JEPBTXZGJ6,0HKIIIP26&FGH(8*VJ>BEFHJ29J>6A14 M5'7%E6'F80.E*FG_JP"#B![ M;+)G-K``HA`6*>RU8>E:F+7+:?N3MQ*NER*WV&)6KH`AY>BLLH`QN^ZZT4XK MIHSGUCL4N+^1&QR^\Z7WY+A4VEN8P"59I<`!];V[;+/)PEN7M-0R22_!%$,8 M8U'^&IFD8OPB1MX`((<\4L@@DT3R`".3;++**8LLTLDKN_PRRR'!W'+)-Z-< M,\T[R]PSSC_K/+//'YTL-$@V#PTTTCPS373137N4=$ISBBB4KR)U7'&I6@NH M+VU=!]RMN$I^O?5)8;^8V,$)-[RPPH@^+*_$&)]M]\``3\Q&+? MC:7@X-E4]4Y8]--L=\GUNYJH=72Y-T#EC-.$B<>_[YHY>/ M;OIXI3MI=-*M#M34ZZV"EUCJ9R=^^NU@TX[[[HCKSOOOJP(O/'RV#V^\9[X? MKSS:R5M)EJL$<<8J5])73WU7V#>?:/'+7]5[]_]9:P_^^-R/;WY0Y9^O_KSK M+V^``@8\D&.0\^]9?_W3=K[G]WJW?VWSY1.?V@@'0+/1:F.04]+%S.4_;!4P M<+<3H-\`U[\&(=""?ZM+CN[''X]P,$CYHTML(-C`6SVP@KB3H.0(2#0B$%NG1"(>L8E# MC&(2GTA%(%;1B5;,(A:W*$4H3E&+/XP>&+_(13)V\8ID`4S$C4V,8.RJ^;('RC"#4GQV<&\YC.S"$UT2G-92KSC\RLYK#, M"?]-=EISFH)KIJ*\R$\TFO&?_&2B/_LY1H*6T:!G+.A`%ZK0AHKQH`R%:$/+ MN!<$'``!`7"`+G7ID8W6TB.\C%CPRDE/4.GSGL1<)P_M^,Z68E.!]IQG24]U M4IG>4:64(Q)'=LK3GOKTIT`-JE`K>DL&>!27':TE1_W2'Y%BII@SI1BD$H`C M(#V@6*A1``*6VB:WO,E,^^F/5H^Z/[=0=7X^PJIJMJI4;WH5`6#U"&K$RE:D M-D!TH4I?5$NJU[V:LZ]^!29@=[4Z[WTEG8&UWNX*ZY[&QLX[L7ML8Q.+*JA2 MUH&6O:RP!JO9]G&VL^K[+&C-)]K1@J^TIET>:E-[O-5=LG9XKGWM(3,K6U/% MMK8YI"WQME*0)<(J0*[3+:9NJZKG3>]55PFNJ[227.4Z\2!'5*UP#S2[XRX7 MN5MDKD&TB]SL31<]Q"WN4\(X%1\>]C'1$V,2MWM8XX7WYS&].Z$/5C-`X(Y$^&-6H MASN,RZ6&E'TCGC+Q#`<;0!O2G5A6L@UIO)G,.EK&BV:RH'.,/$F+!L!@@S1D M&'V;"S[9AE4^SZ3E8V117SF"FI8,IRY3'6-*%R?4C1MU?$H=ZU.?;L<>,1,M MN\Q@,'W9T,ATYJPUO%U/G0AT)4GH^I4I0')^4J$Z[)6,JRD1!_>-!>27&)6_R3K5SX)#6N M\(VKK'X>!*=_Q%E6]!E\=2A/NEQHTW=^;2WIX:N]$XCO3=&'QS1G\X6?+?[IOE6-=.S;NUX MHSOJ!9LZU;-E=4!>V^S]UC:0N[YM&$79U&+?M[Q=7'3AX?HCNE8PC_3NZR') M*,)U#CR;`X]F.%0+WLV'-_S@%X_X)3)>\8UGKEU0HY=E*WO/S`[Q2-\==W;7 MY,13HCN][=[T*)4=RN7F-NK3#N[.#_O;SV9[DJ\>:=$[/?6>7_V2;>]ZW=>> M\ZJ?/=K_=P_\W*\]^,YY>ZU[;_PNK2;@S[<.HO`ZP].#FO1*UN`WZ>?--8:P MY)OW=_-?[W6WIVOGZW*7VWX.,7(6G_G#_[WXZWYVWV]ZZ[27._+Y3?SYP__Z ML-=.;0=?I;<;UI=\N$=_\7=_O/=_7Z=\Y%9^!,AUZ':`_'=\X_)S.Z=^.!@O M3E5]'=A:O`%^([$:!D!+<`$_"*`7794:XQ070B@2J]&$;H&$_[&$'[(`!$`` MA,(UNK$`<>(C]<%-+L@`#J``1O@6#&``J)$`"@``"V``1`/&C&@>0 M``O0)ND'+6]QB!>EB&6(`(VX+)IH5I-X,--RB1\!+X18B#_H7IC6BHGTBK!( M*;,X6[5(3+)XBQN(@ENQ1[G8*[]H&8SU.D\T/>4U1)-E6@8V*<-8.+T86;!# MC,DX6LLH*!`!`0`[ ` end GRAPHIC 37 graph33.gif begin 644 graph33.gif M1TE&.#EA>P'D`/?_`````&AH:'Q\?&-]I8R,C)J:FJ>GI[*RLKV]O'AX>GIZ?#P\/___P`````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M`````````````````````"'Y!`$!`/\`+`````![`>0`0`C_``$('$BPH,&# M"!,J7,BPH<.'$"-*G$BQHL6+&#-JW"CP@<>/($.*'$FRI,F3*%.J7,FRIO8,.*'4NT*]FS:-.J7>O5;,RK;./*G1L6;ERW,.W2+:EWK]^\ M<_NJQ?M2\-^/A@\W54PR\5G'9`F[A,RXLN7+E,5*;IF9;N?+BC]_%=V6M$G3 M:U&G!HTX<4UG+GGT8=M+-+&T_ICU;]U'?98$O9BU<_?CR5_C;KQ.OKQ2[SRGIT1_WGSH[&S5HV1_&SQQ M^*FWN]_//[WXFO0A%6!_T.$WF'[WR3;@;P:F)1^!$$8HX8,25F@A>11>J.&& MH&7(X8<@>K9@B"26*-V()J:H8E$HKNCBB]2U".-D=G7$E%-]F64C7#O._^B@ MC#X&.:.'0A9IY'H(=GBD=-D5\``"##B)0`-2-N!1E55ZQ,"6":27)'8*VA?? M?T4M:>980!:VG5%38=44FW#6&"=B<[XIYYT\UNGFGFWVJ:>?=](9J)V"%DKH MH7S^J>B@524ZJ*.&0HJH40<@$(`#6#YIY0.93JDEEUZ.E^"H2H:7W)=GIII5 MFC2*6JJJ-['*64A=$O`D`[9"Z5&NN-ZZ0`(.-,!`3T2*).M.QR(KYFJGN@KK MLV61"=,`U%9K[;789JOMMMQVZ^VWX(8K[KCDEFONN>BF6RZGFEZI:98/;,E` MET,5*U68^)+*K';.0NOO3\G&B-.BD0):,,&3QO^9YZ,&)\PPPI)&W+#$$$_< M<*,65ZRQG"/5>BNONW[L*[#"(HMJ90''NNQ@TLJ4\K\^OGR2O2!E_/#-!^/L M\,(Y]^RPSQ3K'#30-A.-X\9&"^WG1PH@4.FEG6X:]:?S0G^8S0(( M\]?$MOS6UF#/:NI'!BA@P`.\@LRVR%#^&NRP5K.T0`,(//G``0]X'#*4#BC@ M)%H,&)!W`@H`L(`!#OQ=N-IJW9UWWGS[_3:4::]-N.%]"X[`XHU?3C>],6== M]NDBHJXZC#2O[GIYK;\N>W.QSVX[<:;?KOMMN>_N.U>]#UF0L5*Y9:-51]=^ MN_++YPD5583JF.-5.$(&_WM>P5^O_WW=VW?O'//>AP\6^.*7OVKVYKO8@`(> M\4VYWNWK[?ZM#"S@4^WHY[8RR@V^%/JF)NL7_[R7O^'PRVOI.UT!K:>U5SD0 M3'<1&V#T=;T%6O!J"8267GHUO_G%[WV3VY+]B(7!VNP/:_USR?](*$`4$C"% MD2EA!E5UP1:^AVR6L:`$"X/#W^FP:PVUS6O^98$0ZF,YZ=A-6/6EB$=L8A.S MJ,0GTDN*`.*F9ZR(33QF<8ME_*(9Q4A&,L8+C:3+ISG]@DX"J3,_"VUGD;XY MDX;.C)_G=/^C9O2IT=D]]$`1E6B0!,-!5^;M@ZT,82P#R,YQ5K&':(E.-6/% M46UJ[Z,_"JE(A[3#R<#TBG:,:4_-%M3=X32F-=VIBP13,B?2DXGUC-<]6?HA MBU[TIVQ9@!D+.M`Q;M6,!VU`&FG:$KJ=I(D&&-Q9U/8YCYP4JAYI:EK,:I(F MRI4L;!TA_."Z``(0('3"6PD"&E>IIC&N::0CXP(8@$^Q)$!S6DS``MZJ6+"> M9;![0X!A`X>`Q`[4LF1Y[#]_-=F/A@56J:L^WVM;*TK6P!5YL9WL_J])6 M=N2[;6QSJUO7\K:WJ_TM<)4JW.&*M+C&;2=RDQO'Y3)WALY];@([HRM=\U&W MNN*[K@:A)YCN3L]Z/>*N;4&D77]5CWK4$V_QUIL\U997@\Y#[_/"2Z?AA)>^ M$GTO=F\ZWOW_NK.__DV5?@-L5``3>$D#/K#M$JQ@W!JXP4)B,(2;TU1YZM6I M3H5B8Q6:3XYX^,,@#K&(1TSB$J,--X);>[DK6EX2QJ/[GV`*T*],8U M]BJ.PSK6*58TFZNCJ,LF7"$ACTV<,:XC.2$*8Z.^SL@3)'(ZAZH_)`-5R2P# MXH^[]^`9,QF<4C8/E'EH92^_U)]?WC(?GQR2DUH8KAF>JAK!'&8,F?9M*=:5 MZ%A,,KJ^F,X9Q6J@T6PKKH91QP$]HUA1RV%`+YC-6AYRG?LS9I^6>=`R1A.5 MEP-DU56:J)-VSZ>KG&F&8M0XD3[RFETW:DZ'>C^MIHZ@33WKNFQ:)]9QB"]O8Q#ZVLI-ME\8YJ8-[A;9*+__L8TF7>B]=;HTV M1S@U=DT)7O)B-(MTRFI=SV2FU5;UJV%WZ_74>I_O'DV[Y]-IU,7:W>L6\[RO M>FUX7QK5NU9W&\N=ZBCG^SKWIO>_L7UJ6Q>X_F:6R41F,949 M3%IN\I@>-R;(,T[RC7LDXQI?YLE-GO*1FQSE)=]XR$5>2YZ]?G MB]-DYAP'9C,_#LJ.QUSE.)^FTJ7)]*;3?.FH?'DR@;YRF1]=Z--4+*(-.JQ% M6[/)NLLVK0-N$-_;]^GB;=-STSC=3K:H^9.L[7-?O:'6[K?'?5WV^4N2T-N-+,=RPY".U_JK4!3Q3=&\,_IB[-32GF4S@^6U&ZTFA&?Y,-G M&8EYX_:[VN5M*I$^W.DNN]$;A-T:W[ND&_X^)*Z=\^[-/%V!_7`)9Y[4L=> M]J.A_9)MWWGTX#__LK`_[M>N>\\XWO]LWOWM,C<7-4F195#5/5 M^LU7\K!LM?,5CVQNWX?][8O/_MV(I-!?/;2A%=WCU_?==V)G>.]='?Z%S[[P MM;=^TR=4^X=K$8=]!8AO_3=XW2%\G\>``4B`QW=WR<=ZU:=^"SB`C^&`U"=] M9M:!SP=^^*=\2`6`&=B!ZV-YT692])-YX]9A)1:#,CB#-%B#-N@03(,`4A(E MH^)Z+WB"T$4:#B``C3,L="-%\^,`;W46#/!6>/,`@#4_ M*:@62]B$!Q5%(*&%1T0X5J@W66B&?1-AI)$`O3(Y-=8TH`K,E M54W3*7[F6&VH-UJ5-WG8@WL(%G782G?813K8+@VP82O2.NP3+-KSB(Q(8!*& MA*Q#A):((9B8B9&WB9Q(.Y[XB;11B:)H(J18BB1RBJA(7J&XBIC1BJX?B#*P >&(NA,8NT>$ZV>(O8=H.\V(N^^(O`&(S">!`!`0`[ ` end GRAPHIC 38 graph34.gif begin 644 graph34.gif M1TE&.#EA>P'E`/?_`````&AH:'Q\?&-]I8R,C)J:FJ>GI[*RLKV]O'AX>GIZ?#P\/___P`````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M`````````````````````"'Y!`$!`/\`+`````![`>4`0`C_``$('$BPH,&# M"!,J7,BPH<.'$"-*G$BQHL6+&#-JW"CP@<>/($.*'$FRI,F3*%.J7,FRI)"S8U./1IDN;;HT)%6I M4*=B=3JU:M2D8,/6_"JVK-FS:-.J#4MVK=NW<./*5=OV9=6Y*^_B5:EW+\J^ M<@''K>M2L-^1A@^+3*P8)..UC^E&YMNXLN7+//LB\*A@`6?/'SM_?L`@@<<& M/0FWG'R8=6O,)%V;E5U6-4O:7D+'TY\\<<&!Q2,?B`Z-&C1 MI4^GUMV[./7!Q:'ZW@N3?R8A.!N! MWQ7XVX'X<4B`B7`Q\V4"7 M6G(YWX-Q46DEDTQFZ=&6FS6`YEMA'F>FE6_>^8!\2([%8Y^`!KJ>C8(6:JB* MA!X:U`",-CJ`55QY===!D/ZI*'>67JKIII!ERNFGH":5:*BDEHK6J*;JY%16 M6+$**7J2IO^*GZ>RUFKK;;3>JNNNBQ4I9(C`L3` MLWS6Z"NOU/;GXUC!_AKD;A_^J.VW.PY)`&D*F,9`N0\LX,"YYJ)[90,+1"NE MM]76"U>N,J'J6+;A\AO8M0QN*QR^2FVGP`%;LDNN:>HJK/"[\68VK;T4#]@M MM@+S1C!0&]L%,$R.,CI2R"21+)+))SM:LLHI-[JRRR.S'!+*,\M<,\P@T9RS MS3OCW+/(,?O\4,9W= MH]^8"1Z<2.,Z_/:Z;LL]']WS8HSWY.8!#I/A-:8-&^;H67XHYW:+?=D"C2^< M+N-Q._OXU?FFIYP#45+NTNNQRUXXZ+;G/B+NFA+=M%X$;=55\%;I7K;QR._* MT?+,-^_\\]!'+_WTU$N4_/7*\X[]]H%IS_WWG8(O_J=9CV_^[N?#JG57VGW% MU5:O.A8K^^^_G__^7][KKF'YW_-___^*\1\`!T@D`AI000(\H/GDE*?-P*E, M#C03`IXEH0M-3(')`Q">:N>GT&U.,%[HM-A*)^['@Y/#8FC-X98P'G2$?;A9%_@+R/'P,HPL&4AVA/:]K/ M).D1G0V-9Y<46B4QN4E-=G)IF01E*"GY24I:LI0O$^4#3KE*3D(2::E=)"4K M9^E*E?VPC<428@*(:)XR%G)RA_0E&A?9R+_QT6-G!*,>Z=+%)_ZRCEDT&S%I MB$-C1G-OR7) M_ZUKWA&=AFSF;;9I+7[FZ)A>S*8[!7JJD#")A]^<("Y]6"QR&I&0^.R:.B%* MSRK.,XKZ%.,--VK1>I)QG1&EUD3C.4R"%O,M(S5;]5;*TI:Z]*4K#8D!%&"` M<"84B#=UJ*H2&5(%^B!\"U"%NAFB M,N>H7$I65-<2)J9Z9#-.Q2JRYL-!626PIVBU"T_3.L"SLO6M^$/GJ@*W5F#6 M-46^VU?[M!,>KX3GKUJ#Z^7N>JN!"+9NATTLU@BK6.ZYM;&)?2QD!2O9R;ZU MLI9-*V8SV]/-`K*WO0!\+WSO)]_Y&BF. M+\IOC*`DQZ+`]+\`#K"`!PS%U3&^\1QCE&L2"%'&"0*?N`#&_B`!TYPG"4ZD%$,N]WU36K*6+ZR MEJW,Y2IO5U);]G)UL]SE,8?9S&6F,IK%K.8VDYG-;TXN<-U\9CJG.D6/#NBE M,4WD__B3;##F)I`UNND%97K&I39UIS/T:>RTFCRKOE&J.SSJ#\^:/7>Q$K&4 MG-0FF\G)%/^,LI3JC.=B$_O8=Z8NG)&][&0[N]G07K.T[1QM:L_9V,^>=K%! M`II`>\3;I(&6Q`Q]ZTG+1-'CIFBY(ST;82KSU2B5=/C4O>Z.CI#>]3;C1_'= M8Q#KVZ/P9'2^$7T61`Y<9%'O)2RI*3K?0D+3V9 M^_SG0`^ZT(=.]*(;_>A(_SF@L_KMK")UT!E.=TPJ3O*/HW+D51]E++=>\JN7 M?.6J;/G)67Y*JFL=ZUZW>MK/KA)TM\?=$7_QOA\L=W]7U.%S%WB.W!M^+[CO M7=Z2(3>E)0YP4.>]Q7__][WIGGB&.U+PA0^QW3%:ZQ0W_NY]A_SEF0D27]MOF3%6;CBRD@AOJ MA>;WYO%.$[>;4^_#9V3EBSSY=X=ZXK&.3?*=?_@;3Q_P`?*[\I\?>6M6?\?7 M?__GXI$?_NZC5/O8WS[A613]ZI3?\9D7_OL++I(D_[K7O)YYL$G?NMO[?_;^ MMWJP]W\#"(`&6(`(*'N_=8`*V(!&850'L&=]YG1,MW2]5X'`AUB,-W_T=Q/& MUT'RQX'0MWR>QGV&UWR<]W"H)H+Q1H*LQH+$-WZ(QW>85X.4IX(*!X,W^'V6 MIH,IR(,01X/F)H0C!H0KZ(,_AH.DAH0=>!P/DG\0]'DT)W6;DE[7M7YE\53% M`FZ_)VX:R(2E\H'^U1+E5!+-80#$`AE&`.H`!I2"<&L!D)H`"H`+``!H`G/V1@X*(;!B)">8146-Q%6-V&B$VVA7W7@]]14J>158W=6#Y!6.F[)SY$@\?M6.5PA8 MYX6.GS*.UZ45?V6/^.A:ZB6/T*1B%_SXC2GRCP")0-HXD%%4D`89>`EI2`$! "`#L_ ` end GRAPHIC 39 graph35.gif begin 644 graph35.gif M1TE&.#EA?`'E`/?_`````&AH:'Q\?&-]I8R,C)J:FJ>GI[*RLKV]O'AX>GIZ?#P\/___P`````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M`````````````````````"'Y!`$!`/\`+`````!\`>4`0`C_``$('$BPH,&# M"!,J7,BPH<.'$"-*G$BQHL6+&#-JW#CP@<>/($.*'$FRI,F3*%.J7,FRIS.N6+]NX M+_WJ'4RXL$_!:@&[1&RXL>/'=?4J;LFX<&7+D$5>+KMY[&26G3.+'CTX-%S3 M2TFK7NT8==?/*UVWE3U[-6VEMY'"CLRZM^^^DG.#%/Z[N/&BP6L.6&Z2>?,! M)YV3E#YR.?22U$5FUWX=>_?JW\%'_P\?TOKS\>B]IY^^_6-[D._=DX<__Z0# MCPV.[L9[O+]_W#I)GXDU\$/,"``@FX".,#"SCP8HPW>L3`A`O$B!." M*HHH9&9!\N1A244.J21F=QW97Y*XH4B8`@@4\``"#%B)0`-:4MAEESHRP("/ M186&P'T'($"E`0Y026:."S!`H5H)&."1`@:2=4%)Z:68OF9IIIQVVN&FGH8J:HF@CFKJJ96BJNJJ MN)7*:FQ7\0DE:UY0Q3J7DZ__?N5JKKR&BFNOP`:+58G"%GNB1UIF>267RR*[ M+)@NBCEIF<@9:VU2N\;T:TC9KBBE:-W*1>),'6DU5;E1W7KNNNJV2Q6[[[IK MKKSIQFOOO/?6B^^^^O:+[K_P\@LPO0/G6[#``?N;\,$*TYMF``Y\V>P#$F\9 MYIA&`GGMQFB-NZ%JX1[V+7!-:LSQR=Z"%&.+6+*\XP,NN]RC`PV\O-.VPZ&L MLY$>:PORR)"%O%C/+YFGWGG>U?>`T>PIO71\3(/G='Q/K\?>IPDN^-IMW_QVWXS#JK?<=0/]F-V@$1U8XYCS%A+A"B3>.4B?/_`YQA,J M3G?FJ!]H^=`I2MY:::M3EOKLFL4^DLTFA6Z`E6LI8``"B1,.>N(UNX5[2:$7 MSY;OP'\D_$>?+T```1*BBC/MV$].>?;]ZPG/O>ISWXVC)__]"?#!DK/?E&)1L[:$C2?-;%I-G)#UBRGD+() M.76FDYLZ_\1D1"4:(HI2DJ.9\JC?+$E2BYKR<1\%Z:7RLJ,6Q>Q*+WLIEF:F MO#]J4Z78;*?JMGG$B]8&I2/%J9)$ZC.A+HFH-RPI1GGZ%YW6SJA##8D'1QA% MJI:0;2B$JOQ::+J5+*`!:B/;RC[BLC;Q3BT,^-T#$J```"R`31YQF0%\UY:O MAO5L8XTK3.=J)[:DE4]L+0#PX`HSF'KDH:*ZH%;[I]C%YJ^QCK4?9",KO\E2 MUGV6O>SW,JM9[G&VL]C[+&AG)]K1HJZTIL4<:E/+N-6REF^N?2W<8BM;G=&V MMB>[K;4,\M1\V:L@2\R@;J^UKG0E<)*3;`J]*#CW77_8'-Q:ZSQDE=8YCTOL-*K7EZQM[TRQ"Y\02G?^6*S MOO9%BO)"%[H]^K>/6@02^P9,X`(;^,`$_@A?"]LRPS*XB3"EZ?&H==/\]I1& MBM.1UDJ3"SUI10L9TYD^L8N3^NE1CAK2_ZN^7*E)_6AO>@1P412< M5M6GP6ILDXUC1<];C&[V]-!OO2VO5WK=:N:W2]6][?E MS>AW<]O?IN9WN^$-\'+'>S:(UK=8T,VZ>FOZWX`^];P-7G`B8Y++T-LR@-%" MG%]Z_.,@#[G(1T[RDIO\Y"A/NRZ3W4NA`9[HP=82H.\O(1Q\.\5`X36Z+ M=]W6^&:UP@]^Z#@_G-[FAH-UV-.==B7O>.&ASLK8[RWQ?A/\[A`'=:P;WG9[ M][U!>Y?=W"\>^,K-VNL5!WO=!YYWM'^=G2"AHQWYFT?*N\C+79WXX`$?DK&N M>>:?EW#F[=YXBN,]X(2\NNHYK&$=Z5G;I'=\XOU.]DTG?//8BON2=WIXMY^= M?K>O?>D1'W&!YQOWY__6_:M]WWO(KYWOC_\]\?7^?,$C/^`(-_N^H[]]2V"A*>!B<&`Q?>!*PB")QA[)1@E'?A&XR>##DA^ M(VA^,"A\LO>"90=^-6B#D?`&E2$JF4:#B``][$C+^-"@N,`SW,6#""` M/&#U`-4C.%/5%FWXAHM4.F93-GWH5WA8-GN(B&O51::1`%E8-HG")U0"+758 M%G>()F4C)I-H@&\V%H[(,I!X4)NH4`Z&5H%R-IGX(E72+`WP99Q$'!]$,]T3 MBZX(5>^EA@1RB[CH'[JXB\?1B[Y8',`8C+XQC,3(&L9XC""S>\H66!K,V(PW 2"(V,*(T GRAPHIC 40 graph36.gif begin 644 graph36.gif M1TE&.#EA>P'D`/?_`````&AH:'Q\?&-]I8R,C)J:FJ>GI[*RLKV]O'AX>GIZ?#P\/___P`````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M`````````````````````"'Y!`$!`/\`+`````![`>0`0`C_``$('$BPH,&# M"!,J7,BPH<.'$"-*G$BQHL6+&#-JW"CP@<>/($.*'$FRI,F3*%.J7,FRI!T9-.G M6*E.A2HUZE6M(:M6!?D5;-BM6<%F_3H6J=NA7-_*G4NWKMV[>$G&S^G`JX)>7*+"]C5JFYO70#4C6/Q`<6+$BAL_CCQ:-&R]OX$'%]F[;W&^JU,/7V[R.'/0 MJIUS?DZ]^G#*#0XHH&V;NV'=#R#S_TR^4KIJZ^;/ETY?E_QTZ]79PZ%1 M$S:7X8<@68 M9%(X8HE&)HDD@4LV&29+#@C@`&-TA@=2@0X$^!<#>C8PVYQKAEFGH*+F::B;94IJ:Z.>JNJJ M])G*ZJNPRAJ4:JRTUOHDJV7EFA99KA*W:UAG==565PRB9?^KE;T>JZRRLR[K M[+-6B0GM>-/ZYM$""CC&0+:,<;N``]MJRRV=#2Q@J4[-OECMNE_66%.R<,DH M982E2LONN_>^]Q&1X7;KV+?]]DNNN6_BF^_!"KI;5)3/P1LOC>O9BS!,#G-* MF0('_!>PM^!R*_!@Y9[;XHX3ETQMQ"0O5[&&\I:J,$P#Q"SS2#+'3%+-`]!< M\\T[ZSRS2#CS_#/0/8<4M,\V(YVST44S/;3324.]--%/?X3SU"`=377463?= M==56>^V1UBD!RF)_$INL]L(H&]QPR\RM3/'+LJX]F=W`@H2QQAYSO+&E(!,\ MLMMX%VXMCRE?![?*]'::MN%:0DZ"E4YF[Y1N5))GSB#=,**0XRXY@^3 M3E/EZ+JXG0-GFT[8`ZR[[IGGLM?^)>VA7JTU6DIYY?OD9-EN'^["%\\A\<8G M'QORRC=O.?/.1U\4]-)7CZGUV.-(_>S!.A576DVIQ:NP:QE[&51L:2:6L>.S M%>SXXJ>OUO8JTP]D^&^G/O_QY=GWKZ']_@O@BP`HP`#RKX!J,X`"#/``(C') M@8B"(`3-Q3I$/2]Q"(06`7V%0=EMT$(?A!_;\C!?G%D#CFAQ$TT`034,$A6G&*R]+B M3+#X(TJ:D'N/O*$380/%MM$0DI&,XN&*9\D2CBXF5U.:T+@6-K"-36RO="79 MOL:#RE;6\@&SM"76:+E+7,+2EZX$YBUS&IS&5N+6<%`)!X MHHF`!E!3/`<"#]J8",I72;)NR2LE">O%35%M\C6=/.4DN_FL;W9.>>*LH2?7 M:/%DW#S!:4^%UO.$"WTG09G_ M)4K6A%.)%H M``0<``$!<,`UK^F1G4K3(]D4V?3*.=%0&52*",5H1`]ZSX:&#I]+16I1:774 M45Y1J>J4%4>VRM6N>O6K8`VK6"^&`&HRP*?5[*DT>D!V)I-3=FJI[[P:4X%.M!>U\I/O]35@4G*:VW*2E@F[0D!@/7(;`3+V+0V MH'4%C:MD[O(F5Q`Q2J9!H\(?<7R%QS"R$;>QK=UU;Z@^\/WJC%V\"OH2TL+3SC"^ MW:VO0G@EW]/.%[]M/$A]-:A=++77+&7QHOGF&.#R(?B\\YW?@\E'K!:JL7WY M#9_\^CNM];*7=VKT*(`9+%_\NK>]8\RO@M.H8NZ>+UHEKC!][>LL#QOUO.Q- MG8U#_[1C[)*NQS[.')"##+DA$[EP1CZRW9*L9+4QN_G+8`XS0CYB5K1.L['8=&O!/@EE$-H$=1<<*">;ETYRRAF=YVRB MZ.S,YC;OIZH6=:IZ&X?)/C\QSZ@B-&B0Z.>;2^ M<?0"M'T$GLGJFK5]IJ6LO:UK-V*:YW MW5(W*@JG.D6S6JO)UJ"NF9Z<[O2;=W-LAF):THK^"_^T6^!J1]LOTTZVFZ-J MU:Y00S6K$@7UG,N-[2=S;R[=,;2WF1YZ M5='-*9JFGG*;4-WL>+=[WOQVT+6&;,P>N,))_>[^2SNBH<A*C_S@('?9NC]M\I-[W.4R7_G+P^UL MB\-<]K;O'NI"A%*SK>3%+Y3&:J\NE-C[K4I09UJE>]F,U$YC%_N758 M:MWK7`^[+'<&01_Z$T$`M>`V9:*[MKO][7"/N]SG3O>ZV_WN>,^[WO?.][[7 MW5]X[9BX`!<>P:U=XT0'.J7OK/A^[[SEC$\TO1$>],4C/O'FG#FD;6ZZ2?/< MX#X/O;\B4?O>,K_^\J^U[@ M5W;3Q.':ZUH7_]8MA;7Q4V.=:^;SVOG'+ZE(D0_]DR9F-HB!^,.%W59MONOU MMJ_\Q9D]N,MG7N?BA[SY.Q[SG^/%TYL//^I++]75NSO]KL7=_DRG'MWR M-W^T9WHB]VV/_Y=_D7=^_"=[YO9_]Q:`_:`'6AV?Q-X+3@P;Z55)PB![:%O'A)[FN-YZI=[ M!9B"[!!#4A_W3:$^*>$"?B#.6B%5`)^ M6+B%26@<-A@Y4JB"X8$H%:@W)\(8%SA\0]>#N]>!"L1`B!2"=O5/C91Q%H-H M8G@:V#)X@`D!646"`#4EBS5U+OVR M``R`@7>1``Q4&P>0``N@)]$X+GZAC#?5C*B(`-#H+=[8%]9(&`=@+MOX$0)S MC,@XB-`EC^%48/0H)?9XCW&3C_IX'?S8CT_TCR"47A0CD)EE/*PE6RPF808Q M7L/U9)^2D,##79B37A:9-\`%D9PBD0W&/BR&8SAF6QJ),"')7",)D&,<9,X>9,!`0`[ ` end GRAPHIC 41 graph37.gif begin 644 graph37.gif M1TE&.#EA>P'D`/?_`````&AH:'Q\?&-]I8R,C)J:FJ>GI[*RLKV]O'AX>GIZ?#P\/___P`````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M`````````````````````"'Y!`$!`/\`+`````![`>0`0`C_``$('$BPH,&# M"!,J7,BPH<.'$"-*G$BQHL6+&#-JW"CP@<>/($.*'$FRI,F3*%.J7,FRIN5K=NW<./*G1O7+-V[>//JG=N`@4<% M"_X&_@A8\`,&"3PVZ&D79M>]*Q]#5BEY,LK*>C'G;?Q2L^7/,SV#'BT5-&>7 MHDFK7LW:<4@$AA\4)CRX,&+%C%-';CU2-VG?HX'#%?[V=$OBO%DC3TYW^5KC M+)TSGTY];]<&!Q3$GKT]\.T'BWE"_]]=77KFZE1-FS9?&KU[]NZ1PB@I\A*%1]*3F8GUL23BC>>CA9J.&& M:DF&G7:RU69@B(9]%]Y-$%Z&7H7#,6@9BSZE>!*,'#Y8XUTTBN=@CC?VN&%E M#!#P@(`"_M??D$ M=WZTF)Z%'NEF8E\Z1F6DE%:JWZ269JKI<)ANZNFG0\D(ZJBDRB5JJ:BF>M2I MJK;JZDZL:A?ZE4B5F07655NE-5:GN^J:55NX< M,\XQBV2SSCW[O'-(/_-,L]$W$SVTTD$S?;3320O=]$89W2GB<^R.[(:(<\F;._-NQVE%B^>';:+-/==L47;YPQQI!V/##(!=LM MN,DE$\LPW(?K5[AK@Y/7>(5V9,,Z=^.4F[1RA),KEW*[<:]]^FNO6:%%$*UG*85K]E1]I?U3X/=Z??CHYVKW\\TS M%?_]JM._+[_E\<]O/[#WY[]9_?I[:H`"!GB`D)0TP$$5L(#C.MV@)*>V_IV+ M?^53F/$@F!\*HB]PB'N;RCIWJ08Z$%H6])7A)EBY$#XOA&!*'.<8"&@`,L-#H.^8;8F5;-4F M"9?)QUUR6HM,SB-+4L26(3*:PYKF"(NWS14>[YM$C*3F6+A'`?XQANXDX(!J MN,`F01.DX?(;_DZ!U$UXYM8E0S-7QH7"$J!SQ M*,8\3E2B=\2H13,:T8Y>U*,<3>/V/DK2D)K4C81!P`$0$``'+'.9'GFI,5M( MH(\5I9$&'94^CUC-P>T4DQD,Z@;9Z;E[YA14/\4F/S79T,MPY*E0C:I4ITK5 MJEJU*PI``#(9(--DQM28,#U,34EWU+)"D24)"%*2'E`MV&0UK'6ZRYW<)"`" MO16L\,1+6@=XI+;*1JMX59*=$$!7C\#&KH#U:@-8ERKVF=6@CGTL.",KV4I2 M]F"U&XOW)(.9A4;LL@;+;-MN1]H$5=:IITTM93RKVH.!MK7Y>RUL[2?;VXKR(N$;0-5=ZYI.B^K`7WO1)%RKB$XM"L&@&Z[_5C>!_;U4]8:WON\^I:'\/XA4Z+OB-XOUBL+87835>E+I3 M1"^&T3;?UHVTN/\=7BX3$2SB9I&XQ$@],8H]%>(5EU#%+LY4BV,#YJ)".<[QF7-!O9S(SJE5QXW"\8!Z/,B;:I2BCXYTADNZT4I#&J26EC2E M+[UI.F*:TR>E:*%8ZE(F?S6986VF3<_Z9T"W>4VX(5B8`XIEZ[R9FZ]VY)Z= M=VN2P-C5WM.RFKO\NSYWL-6ZSO5O[OS$60-;V77!J9Z19VP\(WO9T&8J]F9Z MK=UG5Y#;T"7VF>/FIF(BFD\"XC&3`.?L==:9SYT;C))/KMK<# M;1,JD[7=\*:VMB4I[8&[6]P#%38U]\UOA8_SRDM]$;B?!?&*$_H\#M\GP[-= MG((35:$&YUV>0Y[L=_,ZXSS=^.&X0R(2F0A^+MOE+&5>2U[2?)7"'*8G=ZYS MJ`'SYST/.BQ]:7-2%KWF1L]9`67X3AH&TH;`DTGMID[UJEO]ZEC/NM:WSO6N M>_WK8`^[V,>^]7ZQ56/?ZAMX_O;,:ZLN,6+37)3>5SB',>[WOT,\+>7 MG._ZOOBX/V[MOL,=X0?_,N#E[G>&HARH_\]$_N>8UCG_K0-[_T04[_^&9?7_SA3[RM'Z_4\Z/_(_Z9#N,O:&=V`D-\ZQ*`]N=F M]$=GX^=A=1=M'$B`EV=Y)IA^*=>!F&=]#AB!`YAY+AA]W!=_]S=_Y;>"+#B" MLN-V/,A4`DAP)2B#ZP>!S?%]FK6#+0AU_`<23?AR#4B##TAW'_<_`=1'3"=/ M3L>`RU0%`"#`8<14; M4*<7;D@2LY&'=T&'!G*')+(`!$``>^(J,K(`>7(D_,%'$S@@#J``0``M0)[L(+GA!BRMUBY&(`+JX+9$8F9$:J9$!`0`[ ` end GRAPHIC 42 graph38.gif begin 644 graph38.gif M1TE&.#EA>P'D`/?_`````&AH:'Q\?&-]I8R,C)J:FJ>GI[*RLKV]O'AX>GIZ?#P\/___P`````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M`````````````````````"'Y!`$!`/\`+`````![`>0`0`C_``$('$BPH,&# M"!,J7,BPH<.'$"-*G$BQHL6+&#-JW"CP@<>/($.*'$FRI,F3*%.J7,FRIC3Y\J73H5ZL>F M2K%2E2K2J5:K3+-6G7I5+->08;=N-?MU+-*W1ZW"G4NWKMV[>/.2E*NWK]^_ M@`$W8.!1P8+"AS\:1OR`00*/#7KR?4DV,,O*EE=BSIQR[!,VY=$W2 MIE./1-U7=$O6JF/+GCT3,P+&#Q8K3KS8,63)L%4&3SV<..V2Q>TFK^OZ\O'G MFJ$_7TZW>73IV+-K7_JQP0$%N'6'_S_L^T%DGM:%;Z>>F;UE]V_A(TW?>;M] M[O=-RX^[_VK^_P"&]M$!#]SF$8&W(5@@`PPD1A1]*/6GEX03VD=A4!<"!>%) M&08(5X<>W@0B<#B%:.*)<87D'7BY\>9@BXR5=YZ(%(XXEXTW6FB:!I*`#!@+&0)\-W&:GF^:Q&!B= M=A)&6)X#0MF`H7_]V1V4@T8IZ`./H3E:F)IVZNF$G'XJZJCSA4KJ@Z>BN6&J MK+:JG*FNQAXJJW"PSFKKK2"M>F137!DUF:ZUF;4:6FZEE6MPQN+_*J>RS#;K M$[#.1BOML5Y.FY2USGFT@`*/,RZ*].]9V*V)+G@/B8NP`"?F^ZR9>JKL%#\OI8O=`VC-R]G$6OV M\,*O89QF80<02'"XXWY;,&'HJDMCM1JGC')[%Q]7\;7R2-)+MW1V1PAOXXJ/@IEXAFKO!&U7E7=N.9AM__@XQ#N" M[OE0D3>;^;HT@>?`VJ<7]L#KL;^7>NVX\Y?[UEZ/Y11W5>&'V>V*;Y[[\3\2 MC_SRFBO/_/-%.0_]]/A2;SWDTE^OO4G&^^BKL,+FJA:OO);5*UO%4FN^5NJS M#Q;Z?9]E_EIKP=^]I_<[6W[=S2__G/_V`$1=]@)(0+44\(!^^1\"4V8`!1C@ M`4N:4@07-<$)INMUB^H?XA8XK0'.+V_+\^!_1&A`RO$O9HZ3F>DVR,%HD?!_ M)#12#$<7FM#)9H:20R'%/D*8)55P01[YX90N.!@2L;"%S7JA#3N'PQ2N$(0G M=.+<5$BQ)2)15DI<6>Z:.,4G!HLL`RD+&+\WQC**\8Q2,6,:Q>@[-%)%C6]T M8QC72,:3.=[S$D9<.J/G4)B'BI) MQ[A+2E&=]`332!;I2"!"L)]#A&0166=*=[I*G"8\WCP[6<^8+%1\Z$PE%5GV M38,>_Q2><`MA.1MJ+T1Z])`@)20AVPC(D)94I"=-J1X_BM*5FM2E:7RI(5LZ M4T`J!@$'0$``'*!-;7JDI]7T"#=-%KV*6I15"+6G1B^'T;WADZ'W7"='VWE4 M4C;U.DOE6U(=RI&N>O6K8`VK6,=*5K(H``'79`!0L?G3:OJT,0PB:K"J2M>B MKB0!2I+2`[9UF[.^M4]^^9.=%,0@O[K5GW_!:P2AQ-?9_6W6ON@UC]1"1[P8AL5B)*V M*ZV]K;5,J]L%\K:W!_PM<`DHW.$"L+C&U1YRDVN]Y3)W>I3.?2XF]4"SF4&N<8[?Y=[^3GE=A)W/C^, M!FE?0N(K7_I6IB#S?:-Y2YC$]AK1?>D5<*_J&,>VC.^[_JW?@]]+8`0/S[OH MS8J$VV+@^'281KX+BWS/R[X\SC>,*";I2`<<4P&S.'SQ8Z."#;A?`A?X="R> M3H9R_[S;#VN75-S]<>V"+&0<^[C(^#LRDC5%Y"473\E.#LJC".4D2UEY2@UZ M5HW*RN4N>_G+8`YSC1^0UK5:$[+;C*M[$QKE$%%H=1H<)U2SNL.IQK.+>'[J M7[9ZSC:CB,]4S;-"04G1@M[0D[1YX547YV<3`?K.>CXEH6UGU$-'-)]U]J)2 M&^VA1V:UC*]M8AS MS>M5CW%`.N4IFMN*S;<.=\\J;[D\8X[S M2L\;Y9;6>2@W;G-]XV8\C[U\=>RY]-,(@`;9!`,^A-F?#N[7"/N]SG3O>ZV_WN>,^[WO?.][[[ M_>]W#US(RI6IPLE5RSXO^L]=WFZ8,W7E-4P\SSE^\P32G'N*KWS*)0_Y(4]^ M\_)63;TU?^Z2!SKS([\WYX6./(\/GM#!37*/`-S* M538UEJMTFBWWNM6ZYK6*<>U3Z^8C__BVAC[S9QQ]YU=??F?=Z\/?ZG")'YZK MJ[_]S&^2\>*'/]P[[WP"%_?]SS7_6A M-W__%WD!J'ZA9H#_^E>`[T=N#"@@C%=S`KA['V$@NB$>,`(C,A)G\D=YZ<=Z M/?1/$N1/C$1$;&=^"MA^_<>!*/A/'R,P@P#K7&#>U&#*AA_MB=[.KB`!*A[/^A^*^B`]4=M1+B#"\=^Z,=[XQ>% MXX:$HN.#-OB`F#>%36@>BU*!+V*&2==L%+>!7=B![==`#\1(:!>"`15)&H<_ M0#>&J;$MA"=X+2A4YF$X5B*&T+4<)4@2NF$`U`08#H0`B0%8N#%0@7&((Z$; MDN@7C>@@D`@C"T``!%`IL[(A"Q`H4$(@_#2'#.``"K"(D6(`MY$`"@``KPM@ M`(,R07!H&:-X&V]RBB#(`+?H)ZZ(*:OHB+2(BAXA@TA5')/%)`AP5K1X5NH" M,`O``$N'%PGP0+EQ``FP`'TBC>;R%\N84\ZHB@@0C>'RC7YQC1R3+MS(0^:" MC,E(B!T'9?*8//4H3_1XCZ*7C_H(AOVH,4WF0AH&?LD5D*SR6N"E8!R68/PX M*@:9*@C9-P,9/!29D#&V70U9&A'98,ER$,22D4E&5PDF70_YCZ(94I(F&9(I 5R5XKR5YB]I(P&9,R.9,T.9,!`0`[ ` end GRAPHIC 43 graph39.gif begin 644 graph39.gif M1TE&.#EA>P'D`/?_`````&AH:'Q\?&-]I8R,C)J:FJ>GI[*RLKV]O'AX>GIZ?#P\/___P`````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M```````````````````````````````````````````````````````````` M`````````````````````"'Y!`$!`/\`+`````![`>0`0`C_``$('$BPH,&# M"!,J7,BPH<.'$"-*G$BQHL6+&#-JW"CP@<>/($.*'$FRI,F3*%.J7,FRI7;KUJE:K5)EV%;DT+%B07*FJ3W<./*G4NW[ERI=O/JW7**"_SU;SW,4S.F$//!"VZM%;1 MGE^2-LVZM>O/(1$@?G#8<.'#BAD[7CWY]4C>IH&7%BZ7>-S4+HW[=JU\N=WF M;9&WA.Z\NO6^7AL<4#"[=O?!N1\T_^8IG27USM>GIC^/E/W1\KW3RW.!![)Y])]L`P+(``.%$06?9>O-YV!H^`FU8$H1\@=7A1:2=Q]. M&7;H(5N4:<<=;;CB=1C^%*-/+)XTXX<2XIC7C>1%R*.. M0'IX&0,$/%!@@0(":*22"!QH(DX^OFC=CR"BMF%-5`:I4Y9:4GAE45V&*69\ M'S4PXI%*)DD@DT[VR)(#`CB0V)SB@52@`P'NQ4">#<@FIYKBC<@7G'("!EB= M_BEI9E][EJGDGTOZ^JJ MK&[:ZJNP%A=G*G]@768K94^9]5%J-6)Y%EEOZ;I6K/_)S4KLL:WVBNRRS&86 M9;..09O<1PLHL!@#UB:6[0(.8'MMMG,VL`"E6SXK[;D7?CF:E-49*Z.5$)J+ M+I;S,@A2D=YJNQBW^>8;[KANTEOOP`JJ*Y.[T;+K',+3&0P9P6!"7))7"ASP M7[_;=INMOX")2^Z*\DHL\HH.PP;C@R=#6#)+`[3L\D@NMTQ2S`/`'//,-]O\ MLD@TX[PSSSF'U+/.,A-=L]!!(_VSTD4S?3302W]$\],@#0UUTU4GG7744FOM MD=4I_:EBJ1R.;';9F"E+$L,[L=TVRI6Y;5G(9WM9]ZXA57SQQAEC3&G'`(., M]MV$F[?RM"DG/B6\:=-=^-IVCV,H=MN./VXYL/$.OC#<[3(>M]PB@\[LY.72 MQ)T#8U\.TNFIJZZ7VJ['/I_HHDX-]E93>566['7!SOOOOOD._/#!T4[\\90C MKWQ]PB_O?._&/R^]>=$'/U:MPJ*E^UF_XIT6]KM>7^OUVI_'?[C\]-/5?/WX[Y;_]`8H8,`#16I2``\UP`&."W6'2I[`]H#O0*@?$MXO/Q=47`KC]A'`%*F` M!O((#)MTP+_H3X0>7)8)(>@Z$C)O?H93X>8PB!X.1BR''P0BF8;G0\ZYRE?; MBV+XI%@5*D+%B@.9HA:KV!4L&B6+5=SB%<4(QC&&\8QF3&,9U_C%-GKQC63D MBAOC"$M*4#R"`Y2FI5DI6IC*4K_QD M+%&I2E'2LI:UG*4K=.`GR$@>JY`XE)TE MA;@9'K)FFB;!YL0\)YD38L69.IRDC9"GS2$VSI#!D1/?8QA@!\)PW_ M:,/211.*T8MJU*,<_>@5-RK1DI+4,`@X``("X`!D(M,C+AVF1Y3Y ML:)8TZ"D0NC#*KG0<]ZS->7\C3J+Z--]XG15.C49\8(:T*(VE"-0C:I4ITK5 MJEKUJB@M)@-B:DR8#O.EB3E031MZU++:E"4)(!*3'E`MV2@``6#-4U[V)*<" M'>BM7$U@7M(:0"6UE39P_2H\YXJ`NGI$-G<-;%<;T+I\,M6LZX.L9(LUV,#JWO0HY6W=Q]+WPDK>" MZ2/(`^M;WBR>+[]E'-9_N2<^]HYLOD("HQQ'&F`%ZW>,$_6O%]Y,WS@XZ;JP;;_1;!R52?B$5NNQ";NIX=3+"H4L[AN+GZQV6(LX^HL*E(X M!E2!FH0@&OGHJD`.LI"'3.0B0^0C6N4J,07;U;`N4W`_K?$B:4(Z!1JUD<-E M9S71B66!7E/+G;FIE-?)T(0"5)I@?IV8T\R!_*I(#5II$D:18MV]-(BS71( M-RUI3'.:TEL$\:Z91W M+6CLT)FZL'8S)@%M:X4>^G/$_C*?A^-G^Q$ZV,<>=++[;&Q<.]7,O(YU*J_[ MDVNE0CO;6XXRM7EZ:#D)D]$Z9I.C7?U/<#?5W6^FEJJ/*=,'I-K)8_\]J[B_ MS>R:S!K*M58VN:V-['TWN]]V'FBW5MN\F[C'O:WMDG>_WK8`^[V,=.=J[KBZT:^];?Q!,X9K9[Y5T>.<,=?CF1%SS@X[9XL0DN;8C# MG:AW?[O)0WYP64T;X7H7.,KE7O&_[SWPV`8YFB,>;KPC7O(7Y_L3+>]XP/>= M\Y0G?+3-C6,DE5[=3_(5E$#MZ4YKVHV6?CU0ZV5?:MJW?O:C!N_M:Y_[M;R5 MK?,&Z[U;#7#!=[[P8=,-K8W_;B8B_T+/[J:P'R_]E`?Q^'G_///COM3GN\6; M'EZQ^+T?G>AC_S@:Q^[@)Z__^?[!0ZG&'LS\ MW#9PBS=3\;1'32=`!E)#4:=OH-=^S;=^.S(2^,(W^Y)V9_)!B!&!=Z)0AY'[>"*(B# M)'=RSF>#P^9W`PB"BE=]*7A].KB#C'$H^[^$_"%`84&'"7*')[(`!$``D/(J-;(`?:(D_^%.!\@`#J``0``N0)[D(+GHABRI5BY&(`+BX+<:X5[]8 M,>,RC"T$+AF(5"NVANV2C=J80=S8C8WTC>`(5.(XCL5CCCU4CA_"81.CCL1" M8Z\B6IPE%K_BCK$"CZTBCZ1E6EB!.[F%CZRBCP[F7NSH6@")CF-RD`@9)AT* >N9!:TI`."200&9'T9606>9$8F9$:N9$<>1`!`0`[ ` end EX-99.1 44 in07mh07.htm

IndyMac IMSC Mortgage Loan Trust 2007-HOA-1

Mortgage Pass-Through Certificates

July 25, 2007 Distribution

External Parties Table of Contents

Page
Seller
1. Certificate Payment Report 2
IndyMac Bank, F.S.B.
2. Collection Account Report 6

3. Credit Enhancement Report 9
Certificate Insurer(s)
4. Collateral Report 11
Financial Security Assurance
5. Delinquency Report 15
6. REO Report 16
Servicer(s)
7. Foreclosure Report 17
IndyMac Bank, F.S.B.
8. Prepayment Report 18
9. Prepayment Detail Report 23
Underwriter(s)
10. Realized Loss Report 24
UBS Securities 11. Realized Loss Detail Report 27
12. Triggers and Adj. Cert. Report 28

13. Additional Certificate Report 29
14. Other Related Information 31

Total Number of Pages 31

Dates Contacts

Cut-Off Date: June 01, 2007 Jennifer Hermansader
Close Date: June 29, 2007 Administrator
First Distribution Date: July 25, 2007 (714) 247-6258
Jennifer.Vandyne@db.com

Address:
Distribution Date: July 25, 2007
1761 East St. Andrew Place, Santa Ana, CA 92705

Record Date: June 29, 2007
Factor Information: (800) 735-7777

July 24, 2007 Main Phone Number: (714) 247-6000

Determination Date: July 16, 2007

https://www.tss.db.com/invr

Page 1 of 31

IndyMac IMSC Mortgage Loan Trust 2007-HOA-1

Mortgage Pass-Through Certificates

July 25, 2007 Distribution

Certificate Payment Report
Current Period Distribution -
Prior Current

Class Original Principal Total Realized Deferred Principal

Class Type Face Value Balance Interest Principal Distribution Loss Interest Balance
(1) (2) (3) (4)=(2)+(3) (5) (6) (7)=(1)-(3)-(5)+(6)
A-1-1 SR 168,288,000.00 168,288,000.00 668,477.33 643,782.89 1,312,260.22 0.00 0.00 167,644,217.11

A-1-2 SR 70,119,000.00 70,119,000.00 278,528.25 268,239.05 546,767.30 0.00 0.00 69,850,760.95
A-2-1 SR 36,083,000.00 36,083,000.00 140,984.30 390,864.90 531,849.20 0.00 0.00 35,692,135.10
A-2-2 SR 32,955,000.00 32,955,000.00 130,904.58 0.00 130,904.58 0.00 0.00 32,955,000.00
A-2-3 SR 22,671,000.00 22,671,000.00 91,691.60 0.00 91,691.60 0.00 0.00 22,671,000.00
A-2-4 SR 10,465,000.00 10,465,000.00 42,551.85 0.00 42,551.85 0.00 0.00 10,465,000.00
A-3 SR 60,102,000.00 60,102,000.00 238,738.50 229,919.18 468,657.68 0.00 0.00 59,872,080.82
A-XPP SR/CMB 0.00 0.00 827,846.28 0.00 827,846.28 0.00 0.00 0.00
B-1 SUB 7,601,000.00 7,601,000.00 31,675.06 11.18 31,686.24 0.00 0.00 7,600,988.82
B-2 SUB 6,081,000.00 6,081,000.00 25,780.06 8.95 25,789.01 0.00 0.00 6,080,991.05
B-3 SUB 1,737,000.00 1,737,000.00 7,740.27 2.56 7,742.83 0.00 0.00 1,736,997.44
B-4 SUB 2,606,000.00 2,606,000.00 11,894.94 3.83 11,898.77 0.00 0.00 2,605,996.17
B-5 SUB 1,738,000.00 1,738,000.00 8,246.81 2.56 8,249.37 0.00 0.00 1,737,997.44
B-6 SUB 1,303,000.00 1,303,000.00 6,418.00 1.92 6,419.92 0.00 0.00 1,302,998.08
B-7 SUB 1,303,000.00 1,303,000.00 6,888.53 1.92 6,890.45 0.00 0.00 1,302,998.08
B-8 SUB 1,303,000.00 1,303,000.00 6,888.53 1.92 6,890.45 0.00 0.00 1,302,998.08
B-9 SUB 1,303,000.00 1,303,000.00 6,888.53 1.92 6,890.45 0.00 0.00 1,302,998.08
B-10 SUB 2,823,000.00 2,823,000.00 15,452.54 4.15 15,456.69 0.00 0.00 2,822,995.85
B-11 SUB 3,475,000.00 3,475,000.00 19,021.45 5.11 19,026.56 0.00 0.00 3,474,994.89
B-12 SUB 2,388,676.46 2,388,676.46 13,075.14 3.51 13,078.65 0.00 0.00 2,388,672.95
L EXE 0.00 0.00 47.56 0.00 47.56 0.00 0.00 0.00
C-X EXE 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
A-R SR 100.00 100.00 0.55 100.00 100.55 0.00 0.00 0.00

Total 434,344,776.46 434,344,776.46 2,579,740.66 1,532,955.55 4,112,696.21 0.00 0.00 432,811,820.91

Page 2 of 31

IndyMac IMSC Mortgage Loan Trust 2007-HOA-1

Mortgage Pass-Through Certificates

July 25, 2007 Distribution

Interest Accrual Detail Current Period Factor Information per $1,000 of Original Face Value
Orig. Principal Prior Current

Period Period (with Notional) Principal Total Principal
Class Starting Ending Method Cusip Balance Balance Interest Principal Distribution Balance

(1) (1) (2) (3) (4)=(2)+(3) (5)

A-1-1 06/29/07 07/24/07 A-Act/360 45670LAA5 168,288,000.00 1,000.000000 3.972222 3.825483 7.797705 996.174517

A-1-2 06/29/07 07/24/07 A-Act/360 45670LAB3 70,119,000.00 1,000.000000 3.972222 3.825483 7.797705 996.174517
A-2-1 06/29/07 07/24/07 A-Act/360 45670LAC1 36,083,000.00 1,000.000000 3.907222 10.832384 14.739606 989.167616
A-2-2 06/29/07 07/24/07 A-Act/360 45670LAD9 32,955,000.00 1,000.000000 3.972222 0.000000 3.972222 1,000.000000
A-2-3 06/29/07 07/24/07 A-Act/360 45670LAE7 22,671,000.00 1,000.000000 4.044444 0.000000 4.044444 1,000.000000
A-2-4 06/29/07 07/24/07 A-Act/360 45670LAF4 10,465,000.00 1,000.000000 4.066111 0.000000 4.066111 1,000.000000
A-3 06/29/07 07/24/07 A-Act/360 45670LAG2 60,102,000.00 1,000.000000 3.972222 3.825483 7.797705 996.174517
A-XPP 06/01/07 06/30/07 A-30/360 45670LAT4 434,344,776.00 1,000.000000 1.905966 0.000000 1.905966 996.470649
B-1 06/29/07 07/24/07 A-Act/360 45670LAJ6 7,601,000.00 1,000.000000 4.167223 0.001471 4.168694 999.998529
B-2 06/29/07 07/24/07 A-Act/360 45670LAK3 6,081,000.00 1,000.000000 4.239444 0.001472 4.240916 999.998528
B-3 06/29/07 07/24/07 A-Act/360 45670LAL1 1,737,000.00 1,000.000000 4.456114 0.001474 4.457588 999.998526
B-4 06/29/07 07/24/07 A-Act/360 45670LAM9 2,606,000.00 1,000.000000 4.564444 0.001470 4.565913 999.998530
B-5 06/29/07 07/24/07 A-Act/360 45670LAN7 1,738,000.00 1,000.000000 4.745000 0.001473 4.746473 999.998527
B-6 06/29/07 07/24/07 A-Act/360 45670LAP2 1,303,000.00 1,000.000000 4.925556 0.001474 4.927030 999.998526
B-7 06/29/07 07/24/07 A-Act/360 45670LAU1 1,303,000.00 1,000.000000 5.286669 0.001474 5.288143 999.998526
B-8 06/29/07 07/24/07 A-Act/360 45670LAV9 1,303,000.00 1,000.000000 5.286669 0.001474 5.288143 999.998526
B-9 06/29/07 07/24/07 A-Act/360 45670LAW7 1,303,000.00 1,000.000000 5.286669 0.001474 5.288143 999.998526
B-10 06/01/07 06/30/07 A-30/360 45670LAX5 2,823,000.00 1,000.000000 5.473801 0.001470 5.475271 999.998530
B-11 06/01/07 06/30/07 A-30/360 45670LAY3 3,475,000.00 1,000.000000 5.473799 0.001471 5.475269 999.998529
B-12 06/01/07 06/30/07 A-30/360 45670LAZ0 2,388,676.46 1,000.000000 5.473801 0.001469 5.475271 999.998531
L 45670LAQ0 0.00 0.000000 0.000000 0.000000 0.000000 0.000000
C-X 06/01/07 06/30/07 A-30/360 45670LAS6 0.00 0.000000 0.000000 0.000000 0.000000 0.000000
A-R 06/01/07 06/30/07 A-30/360 45670LAH0 100.00 1,000.000000 5.500000 1,000.000000 1,005.500000 0.000000

Page 3 of 31

IndyMac IMSC Mortgage Loan Trust 2007-HOA-1

Mortgage Pass-Through Certificates

July 25, 2007 Distribution

Distribution to Date -
Current

Original Unscheduled Scheduled Total Total Realized Deferred Principal

Class Face Value Interest Principal Principal Principal Distribution Loss Interest Balance
(1) (2) (3) (4) (5)=(3)+(4) (6)=(2)+(5) (7) (8) (9)=(1)-(5)-(7)+(8)
A-1-1 168,288,000.00 668,477.33 0.00 0.00 643,782.89 1,312,260.22 0.00 0.00 167,644,217.11
A-1-2 70,119,000.00 278,528.25 0.00 0.00 268,239.05 546,767.30 0.00 0.00 69,850,760.95
A-2-1 36,083,000.00 140,984.30 0.00 0.00 390,864.90 531,849.20 0.00 0.00 35,692,135.10
A-2-2 32,955,000.00 130,904.58 0.00 0.00 0.00 130,904.58 0.00 0.00 32,955,000.00
A-2-3 22,671,000.00 91,691.60 0.00 0.00 0.00 91,691.60 0.00 0.00 22,671,000.00
A-2-4 10,465,000.00 42,551.85 0.00 0.00 0.00 42,551.85 0.00 0.00 10,465,000.00
A-3 60,102,000.00 238,738.50 0.00 0.00 229,919.18 468,657.68 0.00 0.00 59,872,080.82
A-XPP 0.00 827,846.28 0.00 0.00 0.00 827,846.28 0.00 0.00 0.00
B-1 7,601,000.00 31,675.06 0.00 0.00 11.18 31,686.24 0.00 0.00 7,600,988.82
B-2 6,081,000.00 25,780.06 0.00 0.00 8.95 25,789.01 0.00 0.00 6,080,991.05
B-3 1,737,000.00 7,740.27 0.00 0.00 2.56 7,742.83 0.00 0.00 1,736,997.44
B-4 2,606,000.00 11,894.94 0.00 0.00 3.83 11,898.77 0.00 0.00 2,605,996.17
B-5 1,738,000.00 8,246.81 0.00 0.00 2.56 8,249.37 0.00 0.00 1,737,997.44
B-6 1,303,000.00 6,418.00 0.00 0.00 1.92 6,419.92 0.00 0.00 1,302,998.08
B-7 1,303,000.00 6,888.53 0.00 0.00 1.92 6,890.45 0.00 0.00 1,302,998.08
B-8 1,303,000.00 6,888.53 0.00 0.00 1.92 6,890.45 0.00 0.00 1,302,998.08
B-9 1,303,000.00 6,888.53 0.00 0.00 1.92 6,890.45 0.00 0.00 1,302,998.08
B-10 2,823,000.00 15,452.54 0.00 0.00 4.15 15,456.69 0.00 0.00 2,822,995.85
B-11 3,475,000.00 19,021.45 0.00 0.00 5.11 19,026.56 0.00 0.00 3,474,994.89
B-12 2,388,676.46 13,075.14 0.00 0.00 3.51 13,078.65 0.00 0.00 2,388,672.95
L 0.00 0.00 0.00 0.00 0.00 47.56 0.00 0.00 0.00
C-X 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
A-R 100.00 0.55 0.00 0.00 100.00 100.55 0.00 0.00 0.00

Total 434,344,776.46 2,579,693.10 0.00 0.00 1,532,955.55 4,112,696.21 0.00 0.00 432,811,820.91

Page 4 of 31

IndyMac IMSC Mortgage Loan Trust 2007-HOA-1

Mortgage Pass-Through Certificates

July 25, 2007 Distribution

Interest Detail -
Pass Prior Principal Non- Prior Unscheduled Paid or Current

Through (with Notional) Accrued Supported Unpaid Interest Optimal Deferred Unpaid

Class Rate Balance Interest Interest SF Interest Adjustment Interest Interest Interest
(1) (2) (3) (4) (5)=(1)-(2)+(3)+(4) (6) (7)=(5)-(6)
A-1-1 5.50000% 168,288,000.00 668,477.33 0.00 0.00 0.00 668,477.33 668,477.33 0.00
A-1-2 5.50000% 70,119,000.00 278,528.25 0.00 0.00 0.00 278,528.25 278,528.25 0.00
A-2-1 5.41000% 36,083,000.00 140,984.30 0.00 0.00 0.00 140,984.30 140,984.30 0.00
A-2-2 5.50000% 32,955,000.00 130,904.58 0.00 0.00 0.00 130,904.58 130,904.58 0.00
A-2-3 5.60000% 22,671,000.00 91,691.60 0.00 0.00 0.00 91,691.60 91,691.60 0.00
A-2-4 5.63000% 10,465,000.00 42,551.85 0.00 0.00 0.00 42,551.85 42,551.85 0.00
A-3 5.50000% 60,102,000.00 238,738.50 0.00 0.00 0.00 238,738.50 238,738.50 0.00
A-XPP 2.28716% 434,344,776.00 827,846.28 0.00 0.00 0.00 827,846.28 827,846.28 0.00
B-1 5.77000% 7,601,000.00 31,675.06 0.00 0.00 0.00 31,675.06 31,675.06 0.00
B-2 5.87000% 6,081,000.00 25,780.06 0.00 0.00 0.00 25,780.06 25,780.06 0.00
B-3 6.17000% 1,737,000.00 7,740.27 0.00 0.00 0.00 7,740.27 7,740.27 0.00
B-4 6.32000% 2,606,000.00 11,894.94 0.00 0.00 0.00 11,894.94 11,894.94 0.00
B-5 6.57000% 1,738,000.00 8,246.81 0.00 0.00 0.00 8,246.81 8,246.81 0.00
B-6 6.82000% 1,303,000.00 6,418.00 0.00 0.00 0.00 6,418.00 6,418.00 0.00
B-7 7.32000% 1,303,000.00 6,888.53 0.00 0.00 0.00 6,888.53 6,888.53 0.00
B-8 7.32000% 1,303,000.00 6,888.53 0.00 0.00 0.00 6,888.53 6,888.53 0.00
B-9 7.32000% 1,303,000.00 6,888.53 0.00 0.00 0.00 6,888.53 6,888.53 0.00
B-10 6.56856% 2,823,000.00 15,452.54 0.00 0.00 0.00 15,452.54 15,452.54 0.00
B-11 6.56856% 3,475,000.00 19,021.45 0.00 0.00 0.00 19,021.45 19,021.45 0.00
B-12 6.56856% 2,388,676.46 13,075.14 0.00 0.00 0.00 13,075.14 13,075.14 0.00
L 0.00000% 0.00 0.00 0.00 0.00 0.00 0.00 47.56 0.00
C-X 0.00000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
A-R 6.56856% 100.00 0.55 0.00 0.00 0.00 0.55 0.55 0.00

Total 868,689,552.46 2,579,693.10 0.00 0.00 0.00 2,579,693.10 2,579,740.66 0.00

Page 5 of 31

IndyMac IMSC Mortgage Loan Trust 2007-HOA-1

Mortgage Pass-Through Certificates

July 25, 2007 Distribution

Collection Account Report
SUMMARY

Total
Principal Collections 1,532,955.53
Principal Withdrawals 0.00
Principal Other Accounts 0.00
TOTAL NET PRINCIPAL 1,532,955.53
Interest Collections 2,415,023.47
Interest Withdrawals -0.00
Interest Other Accounts 211,938.19
Interest Fees -47,220.98
TOTAL NET INTEREST 2,579,740.68
TOTAL AVAILABLE FUNDS FOR DISTRIBUTION 4,112,696.21

PRINCIPAL - COLLECTIONS

Total
Scheduled Principal Received 638.89
Curtailments -995,949.54
Prepayments In Full 2,528,266.18
Repurchased/Substitutions 0.00
Liquidations 0.00
Insurance Principal 0.00
Other Additional Principal 0.00
Delinquent Principal -638.89
Realized Losses -0.00
Advanced Principal 638.89
TOTAL PRINCIPAL COLLECTED 1,532,955.53

PRINCIPAL - WITHDRAWALS

SPACE INTENTIONALLY LEFT BLANK

PRINCIPAL - OTHER ACCOUNTS

Total
TOTAL PRINCIPAL OTHER ACCOUNTS 0.00

Page 6 of 31

IndyMac IMSC Mortgage Loan Trust 2007-HOA-1

Mortgage Pass-Through Certificates

July 25, 2007 Distribution

INTEREST - COLLECTIONS

Total
Scheduled Interest 2,515,963.80
Repurchased/Substitution Interest 0.00
Liquidation Interest 0.00
Insurance Interest 0.00
Other Additional Interest 0.00
Prepayment Interest Shortfalls -1,028.44
Delinquent Interest -1,882,935.58
Compensating Interest 1,028.44
Civil Relief Act Shortfalls -0.00
Interest Advanced 1,781,995.25
Interest Realized Loss -0.00
TOTAL INTEREST COLLECTED 2,415,023.47

INTEREST - WITHDRAWALS

SPACE INTENTIONALLY LEFT BLANK

INTEREST - OTHER ACCOUNTS

Total
Prepayment Charges 31,936.00

Late Payment fee paid by the servicer 47.56

Late Payment fee collected. *
Late Payment fee waived. 337.05
Deposit from Swap Reserve fund 389,000.00

Net Swap Payment 1,844,518.00
Net Swap Receipt 1,635,472.63
Net Swap Inflow/(Outflow) -209,045.37

TOTAL INTEREST OTHER ACCOUNTS 211,938.19
* Information not available with Trustee

Page 7 of 31

IndyMac IMSC Mortgage Loan Trust 2007-HOA-1

Mortgage Pass-Through Certificates

July 25, 2007 Distribution

INTEREST FEES

Total
Current Servicing Fees 34,792.41
Trustee Fees 2,714.65
Class A-1-2 Interest Insured Amount 3,505.95
Class A-2-3 Interest Insured Amount 1,700.32
Class A-3 Interest Insured Amount 4,507.65
TOTAL INTEREST FEES 47,220.98

Page 8 of 31

IndyMac IMSC Mortgage Loan Trust 2007-HOA-1

Mortgage Pass-Through Certificates

July 25, 2007 Distribution

Credit Enhancement Report

ACCOUNTS

Cap Contract Reserve

Beginning Account Balance 0.00
Account Deposit 0.00
Account Withdrawal 0.00
Ending Account Balance 0.00

Carryover Shortfall Reserve

Beginning Account Balance 3,000.00
Account Deposit 0.00
Account Withdrawal 0.00
Ending Account Balance 3,000.00

Corridor Contract Reserve

Beginning Account Balance 0.00
Account Deposit 0.00
Account Withdrawal 0.00
Ending Account Balance 0.00

Distribution Account

Beginning Account Balance 0.00
Account Deposit 4,334,169.99
Account Withdrawal 4,334,169.99
Ending Account Balance 0.00

Swap Reserve Fund

Beginning Account Balance 389,000.00
Account Deposit 1,635,472.63
Account Withdrawal 2,233,518.00
Ending Account Balance 0.00

INSURANCE

SPACE INTENTIONALLY LEFT BLANK

Page 9 of 31

IndyMac IMSC Mortgage Loan Trust 2007-HOA-1

Mortgage Pass-Through Certificates

July 25, 2007 Distribution

STRUCTURAL FEATURES

SPACE INTENTIONALLY LEFT BLANK

Page 10 of 31

IndyMac IMSC Mortgage Loan Trust 2007-HOA-1

Mortgage Pass-Through Certificates

July 25, 2007 Distribution

Collateral Report

COLLATERAL

Total

Loan Count:

Original 1,321
Prior 1,321
Prefunding 0
Scheduled Paid Offs -0
Full Voluntary Prepayments -9
Repurchases -0
Liquidations -0
Current 1,312
Principal Balance:

Original 434,344,776.46
Prior 434,344,776.46
Prefunding 0.00
Scheduled Principal -638.89
Partial Prepayments (995,949.54)
Full Voluntary Prepayments -2,528,266.18
Repurchases -0.00
Liquidations -0.00
Current 432,811,820.93

PREFUNDING

SPACE INTENTIONALLY LEFT BLANK

Page 11 of 31

IndyMac IMSC Mortgage Loan Trust 2007-HOA-1

Mortgage Pass-Through Certificates

July 25, 2007 Distribution

CHARACTERISTICS

Total
Weighted Average Coupon Original 6.95106%
Weighted Average Coupon Prior 6.95106%
Weighted Average Coupon Current 6.95106%
Weighted Average Months to Maturity Original 357
Weighted Average Months to Maturity Prior 357
Weighted Average Months to Maturity Current 357
Weighted Avg Remaining Amortization Term Original 357
Weighted Avg Remaining Amortization Term Prior 357
Weighted Avg Remaining Amortization Term Current 357
Weighted Average Seasoning Original 4.62
Weighted Average Seasoning Prior 4.62
Weighted Average Seasoning Current 4.62

Page 12 of 31

IndyMac IMSC Mortgage Loan Trust 2007-HOA-1

Mortgage Pass-Through Certificates

July 25, 2007 Distribution

ARM CHARACTERISTICS

Total
Weighted Average Margin Original 2.46844%
Weighted Average Margin Prior 2.46844%
Weighted Average Margin Current 2.46844%
Weighted Average Max Rate Original 11.96454%
Weighted Average Max Rate Prior 11.96454%
Weighted Average Max Rate Current 11.96454%
Weighted Average Min Rate Original 2.44379%
Weighted Average Min Rate Prior 2.44379%
Weighted Average Min Rate Current 2.44379%
Weighted Average Cap Up Original 1.01235%
Weighted Average Cap Up Prior 1.01235%
Weighted Average Cap Up Current 1.01235%
Weighted Average Cap Down Original 1.01235%
Weighted Average Cap Down Prior 1.01235%
Weighted Average Cap Down Current 1.01235%

Page 13 of 31

IndyMac IMSC Mortgage Loan Trust 2007-HOA-1

Mortgage Pass-Through Certificates

July 25, 2007 Distribution

SERVICING FEES & ADVANCES

Total

Current Servicing Fees 34,792.41
Delinquent Servicing Fees 100,940.33
TOTAL SERVICING FEES 135,732.75

Total Servicing Fees 135,732.75
Compensating Interest -1,028.44
Delinquent Servicing Fees -100,940.33
COLLECTED SERVICING FEES 33,763.97

Total Advanced Interest 1,781,995.25
Total Advanced Principal 638.89
Aggregate Advances with respect to this Distribution 1,782,634.14

Any additional servicing compensation received by the
Servicer attributable to penalties, fees, Excess Proceeds
or other similar charges or fees and items. *

The aggregate amount of Advances reimbursed
during the related Due Period. *
The general source of funds for such reimbursements. *
The aggregate amount of Advances outstanding as
of the close of business on the Distribution Date. *

The aggregate amount of Servicing Advances
reimbursed during the related Due Period. *
The general source of funds for such reimbursements. *
The aggregate amount of Servicing Advances outstanding
as of the close of business on the Distribution Date. *

* Information not available with Trustee

ADDITIONAL COLLATERAL INFORMATION

Total
Prepayment Interest Shortfall (PPIS) 1,028.44
Compensating Interest (1,028.44)
Net Prepayment Interest Shortfall (PPIS) 0.00

Weighted Average Net Mortgage Rate 6.568560%

The number and aggregate balance of any
Delayed Delivery Mortgage Loans not delivered
within the time periods specified in the
definition of Delayed Delivery Mortgage Loans. *

* Information not available with Trustee
Libor For Current Period 5.3200%
Libor For Next Period 5.3200%

Page 14 of 31

IndyMac IMSC Mortgage Loan Trust 2007-HOA-1

Mortgage Pass-Through Certificates

July 25, 2007 Distribution

Delinquency Report

TOTAL
< 1 PAYMENT 1 PAYMENT 2 PAYMENTS 3+ PAYMENTS TOTAL
DELINQUENT Balance 8,925,243.98 0.00 0.00 8,925,243.98
% Balance 2.06% 0.00% 0.00% 2.06%
# Loans 25 0 0 25
% # Loans 1.91% 0.00% 0.00% 1.91%
FORECLOSURE Balance 0.00 0.00 0.00 0.00 0.00
% Balance 0.00% 0.00% 0.00% 0.00% 0.00%
# Loans 0 0 0 0 0
% # Loans 0.00% 0.00% 0.00% 0.00% 0.00%
BANKRUPTCY Balance 0.00 0.00 0.00 0.00 0.00
% Balance 0.00% 0.00% 0.00% 0.00% 0.00%
# Loans 0 0 0 0 0
% # Loans 0.00% 0.00% 0.00% 0.00% 0.00%
REO Balance 0.00 0.00 0.00 0.00 0.00
% Balance 0.00% 0.00% 0.00% 0.00% 0.00%
# Loans 0 0 0 0 0
% # Loans 0.00% 0.00% 0.00% 0.00% 0.00%
TOTAL Balance 0.00 8,925,243.98 0.00 0.00 8,925,243.98
% Balance 0.00% 2.06% 0.00% 0.00% 2.06%
# Loans 0 25 0 0 25
% # Loans 0.00% 1.91% 0.00% 0.00% 1.91%

Page 15 of 31

IndyMac IMSC Mortgage Loan Trust 2007-HOA-1

Mortgage Pass-Through Certificates

July 25, 2007 Distribution

REO Report
Loan Number Original Stated Current State & First

& Principal Principal Paid to Note LTV at Original Payment
Loan Group Balance Balance Date Rate Origination Term Date

Page 16 of 31

IndyMac IMSC Mortgage Loan Trust 2007-HOA-1

Mortgage Pass-Through Certificates

July 25, 2007 Distribution

Foreclosure Report
Loan Number Original Stated Current State & First

& Principal Principal Paid to Note LTV at Original Payment
Loan Group Balance Balance Date Rate Origination Term Date

Page 17 of 31

IndyMac IMSC Mortgage Loan Trust 2007-HOA-1

Mortgage Pass-Through Certificates

July 25, 2007 Distribution

Prepayment Report

VOLUNTARY PREPAYMENTS

Total

Current

Number of Paid in Full Loans 9
Number of Repurchased Loans 0
Total Number of Loans Prepaid in Full 9
Curtailments Amount (995,949.54)
Paid in Full Balance 2,528,266.18
Repurchased Loans Balance 0.00
Total Prepayment Amount 1,532,316.64
Cumulative

Number of Paid in Full Loans 9
Number of Repurchased Loans 0
Total Number of Loans Prepaid in Full 9
Paid in Full Balance 2,528,266.18
Repurchased Loans Balance 0.00
Curtailments Amount (995,949.54)
Total Prepayment Amount 1,532,316.64

Page 18 of 31

IndyMac IMSC Mortgage Loan Trust 2007-HOA-1

Mortgage Pass-Through Certificates

July 25, 2007 Distribution

VOLUNTARY PREPAYMENTS RATES - Including Liquidated Balances

Total

SMM 0.35%
3 Months Avg SMM 0.35%
12 Months Avg SMM 0.35%
Avg SMM Since Cut-off 0.35%

CPR 4.15%
3 Months Avg CPR 4.15%
12 Months Avg CPR 4.15%
Avg CPR Since Cut-off 4.15%

PSA 448.96%
3 Months Avg PSA Approximation 448.96%
12 Months Avg PSA Approximation 448.96%
Avg PSA Since Cut-off Approximation 448.96%

(*) SMM, CPR, PSA Figures Include Liquidated Balances

Page 19 of 31

IndyMac IMSC Mortgage Loan Trust 2007-HOA-1

Mortgage Pass-Through Certificates

July 25, 2007 Distribution

PREPAYMENT CALCULATION METHODOLOGY - Including Liquidated Balances

Single Monthly Mortality (SMM): (Voluntary partial and full prepayments + Repurchases + Liquidated Balances)/(Beg Principal Balance - Sched Principal)

Conditional Prepayment Rate (CPR): 1-((1-SMM)^12)
PSA Standard Prepayment Model: CPR/(0.20%*min(30,WAS))

Average SMM over period between nth month and mth month (AvgSMMn,m): 1 - [(1-SMMn)*(1-SMMn+1)*...*(1-SMMm)]^(1/months in period n,m)
Average CPR over period between the nth month and mth month (AvgCPRn,m): 1-((1-AvgSMMn,m)^12)

Average PSA Approximation over period between the nth month and mth month: AvgCPRn,m/(0.20%*Avg WASn,m))
Average WASn,m: (min(30,WASn)+min(30,WASn+1)+...+min(30,WASm)/(number of months in the period n,m)

Weighted Average Seasoning (WAS)

Note: Prepayment rates are calculated since deal issue date and include partial and full voluntary prepayments and repurchases.
Dates correspond to distribution dates.

Page 20 of 31

IndyMac IMSC Mortgage Loan Trust 2007-HOA-1

Mortgage Pass-Through Certificates

July 25, 2007 Distribution

VOLUNTARY PREPAYMENTS RATES - Excluding Liquidated Balances

Total

SMM 0.35%
3 Months Avg SMM 0.35%
12 Months Avg SMM 0.35%
Avg SMM Since Cut-off 0.35%

CPR 4.15%
3 Months Avg CPR 4.15%
12 Months Avg CPR 4.15%
Avg CPR Since Cut-off 4.15%

PSA 448.96%
3 Months Avg PSA Approximation 448.96%
12 Months Avg PSA Approximation 448.96%
Avg PSA Since Cut-off Approximation 448.96%

(*) SMM, CPR, PSA Figures Exclude Liquidated Balances

Page 21 of 31

IndyMac IMSC Mortgage Loan Trust 2007-HOA-1

Mortgage Pass-Through Certificates

July 25, 2007 Distribution

PREPAYMENT CALCULATION METHODOLOGY - Excluding Liquidated Balances

Single Monthly Mortality (SMM): (Voluntary partial and full prepayments + Repurchases)/(Beg Principal Balance - Sched Principal)

Conditional Prepayment Rate (CPR): 1-((1-SMM)^12)
PSA Standard Prepayment Model: CPR/(0.20%*min(30,WAS))

Average SMM over period between nth month and mth month (AvgSMMn,m): 1 - [(1-SMMn)*(1-SMMn+1)*...*(1-SMMm)]^(1/months in period n,m)
Average CPR over period between the nth month and mth month (AvgCPRn,m): 1-((1-AvgSMMn,m)^12)

Average PSA Approximation over period between the nth month and mth month: AvgCPRn,m/(0.20%*Avg WASn,m))
Average WASn,m: (min(30,WASn)+min(30,WASn+1)+...+min(30,WASm)/(number of months in the period n,m)

Weighted Average Seasoning (WAS)

Note: Prepayment rates are calculated since deal issue date and include partial and full voluntary prepayments and repurchases.
Dates correspond to distribution dates.

Page 22 of 31

IndyMac IMSC Mortgage Loan Trust 2007-HOA-1

Mortgage Pass-Through Certificates

July 25, 2007 Distribution

Prepayment Detail Report

Prepayment Detail Report - Mortgage Loans Prepaid in Full During Current Distribution

Loan Number Original Current State & Type Prepayment First

& Loan Principal Prepayment Prepayment Note LTV at & Payment

Loan Group Status Balance Amount Date Rate Origination Original Term Date

6084089 1 139,650.00 141,415.76 03-Jul-2007 6.875% AZ - 59.43% Paid Off - 360 01-Feb-2007

6084240 1 197,000.00 196,821.83 03-Jul-2007 6.500% MI - 57.94% Paid Off - 360 01-Feb-2007
6111983 1 246,250.00 246,250.00 29-Jun-2007 6.875% AZ - 61.56% Paid Off - 360 01-Apr-2007
6126506 1 316,500.00 316,500.00 29-Jun-2007 6.750% MD - 83.29% Paid Off - 360 01-May-2007
6126637 1 351,000.00 352,759.75 11-Jul-2007 6.500% MD - 79.77% Paid Off - 360 01-May-2007
6126757 1 284,000.00 285,424.29 29-Jun-2007 7.250% AZ - 80.00% Paid Off - 360 01-May-2007
124792143 1 216,750.00 217,807.60 18-Jun-2007 7.375% IL - 75.00% Paid Off - 360 01-Dec-2006
125027460 1 432,000.00 439,434.62 29-Jun-2007 7.250% CA - 80.00% Paid Off - 360 01-Jan-2007
125085329 1 328,000.00 331,852.33 06-Jul-2007 8.125% CA - 75.40% Paid Off - 360 01-Jan-2007

TOTAL 2,511,150.00 2,528,266.18

Page 23 of 31

IndyMac IMSC Mortgage Loan Trust 2007-HOA-1

Mortgage Pass-Through Certificates

July 25, 2007 Distribution

Realized Loss Report

COLLATERAL REALIZED LOSSES

Total

Current

Number of Loans Liquidated 0

Collateral Principal Realized Loss/(Gain) Amount 0.00
Collateral Interest Realized Loss/(Gain) Amount 0.00
Net Liquidation Proceeds 0.00

Cumulative

Number of Loans Liquidated 0

Collateral Realized Loss/(Gain) Amount 0.00
Net Liquidation Proceeds 0.00

Page 24 of 31

IndyMac IMSC Mortgage Loan Trust 2007-HOA-1

Mortgage Pass-Through Certificates

July 25, 2007 Distribution

DEFAULT SPEEDS

Total

MDR 0.00%
3 Months Avg MDR 0.00%
12 Months Avg MDR 0.00%
Avg MDR Since Cut-off 0.00%

CDR 0.00%
3 Months Avg CDR 0.00%
12 Months Avg CDR 0.00%
Avg CDR Since Cut-off 0.00%

SDA 0.00%
3 Months Avg SDA Approximation 0.00%
12 Months Avg SDA Approximation 0.00%
Avg SDA Since Cut-off Approximation 0.00%

Principal Only Loss Severity Approx for Current Period 0.00%
3 Months Avg Loss Severity Approximation 0.00%
12 Months Avg Loss Severity Approximation 0.00%
Avg Loss Severity Approximation Since Cut-Off 0.00%

Principal & Interest Loss Severity Approx for Current Period 0.00%
3 Months Avg Loss Severity Approximation 0.00%
12 Months Avg Loss Severity Approximation 0.00%
Avg Loss Severity Approximation Since Cut-Off 0.00%

Page 25 of 31

IndyMac IMSC Mortgage Loan Trust 2007-HOA-1

Mortgage Pass-Through Certificates

July 25, 2007 Distribution

COLLATERAL REALIZED LOSS CALCULATION METHODOLOGY
Monthly Default Rate (MDR): (Beg Principal Balance of Liquidated Loans)/(Total Beg Principal Balance)

Conditional Default Rate (CDR): 1-((1-MDR)^12)

SDA Standard Default Assumption: CDR/IF(WAS<61,MIN(30,WAS)*0.02%,MAX(0.03%,MIN(30,WAS)*0.02%-0.0095%*(WAS-60)))
Average MDR over period between nth month and mth month (AvgMDRn,m): [(1-MDRn)*(1-MDRn+1)*...*(1-MDRm)]^(1/months in period n,m)
Average CDR over period between the nth month and mth month (AvgCDRn,m): 1-((1-AvgMDRn,m)^12)
Average SDA Approximation over period between the nth month and mth month:
AvgCDRn,m/IF(Avg WASn,m<61,MIN(30,Avg WASn,m)*0.02%,MAX(0.03%,MIN(30,Avg WASn,m)*0.02%-0.0095%*(Avg WASn,m-60)))

Average WASn,m: (WASn + WASn+1 +...+ WASm )/(number of months in the period n,m)
Principal Only Loss Severity Approximation for current period:
Sum(Principal Realized Loss Amount)/sum(Beg Principal Balance of Liquidated Loans)
Principal & Interest Loss Severity Approximation for current period:
Sum(Principal & Interest Realized Loss Amount)/sum(Beg Principal Balance of Liquidated Loans)

Average Loss Severity Approximation over period between nth month and mth month:

Sum(Realized Loss Amount)/sum(Beg Principal Balance of Liquidated Loans for months in the period n,m
Note: Default rates are calculated since deal issue date and include realized gains and additional realized losses and gains from prior periods.
Dates correspond to distribution dates.
All Realized Losses in excess of Principal Balance are treated as Interest Realized Losses.

Page 26 of 31

IndyMac IMSC Mortgage Loan Trust 2007-HOA-1

Mortgage Pass-Through Certificates

July 25, 2007 Distribution

Realized Loss Detail Report
Loan Number Current State & Prior Realized Cumulative

& Loan Note LTV at Original Principal Loss/(Gain) Realized Realized

Loan Group Status Rate Origination Term Balance Revision Loss/(Gain) Loss/(Gain)

TOTAL

Page 27 of 31

IndyMac IMSC Mortgage Loan Trust 2007-HOA-1

Mortgage Pass-Through Certificates

July 25, 2007 Distribution

Triggers and Adj. Cert. Report
TRIGGER EVENTS

Total
Has Optional Termination Date Reached No
Has Sr. Prepay Stepdown Condition Occurred No
Has Spl. Haz. Cov. Term. Date Occured (0=No,1=Yes)? No
Has Fraud Loss Coverage Term. Date Occured No
Has Bankrpt Loss Cov. Term. Date Occured No

ADJUSTABLE RATE CERTIFICATE INFORMATION

SPACE INTENTIONALLY LEFT BLANK

ADDITIONAL INFORMATION

Total
Senior Percentage 92.250010%
Subordinate Percentage 7.749990%
Senior Prepayment Percentage 100.000000%
Subordinate Prepayment Percentage 0.000000%

Page 28 of 31

IndyMac IMSC Mortgage Loan Trust 2007-HOA-1

Mortgage Pass-Through Certificates

July 25, 2007 Distribution

Additional Certificate Report

ADDITIONAL CERTIFICATE REPORT

Deferred Interest NET WAC Shortfall Prior (1) Curr NET WAC SF (2) Total NET WAC SF (1+2+3) NET WAC Shortfall Paid NET WAC Shortfall UnPaid

CLASS
A-1-1 0.00 $0.00 $0.00 $0.00 $0.00 $0.00
A-1-2 0.00 $0.00 $0.00 $0.00 $0.00 $0.00
A-2-1 0.00 $0.00 $0.00 $0.00 $0.00 $0.00
A-2-2 0.00 $0.00 $0.00 $0.00 $0.00 $0.00
A-2-3 0.00 $0.00 $0.00 $0.00 $0.00 $0.00
A-2-4 0.00 $0.00 $0.00 $0.00 $0.00 $0.00
A-3 0.00 $0.00 $0.00 $0.00 $0.00 $0.00
A-XPP 0.00 $0.00 $0.00 $0.00 $0.00 $0.00
B-1 0.00 $0.00 $0.00 $0.00 $0.00 $0.00
B-2 0.00 $0.00 $0.00 $0.00 $0.00 $0.00
B-3 0.00 $0.00 $0.00 $0.00 $0.00 $0.00
B-4 0.00 $0.00 $0.00 $0.00 $0.00 $0.00
B-5 0.00 $0.00 $0.00 $0.00 $0.00 $0.00
B-6 0.00 $0.00 $0.00 $0.00 $0.00 $0.00
B-7 0.00 $0.00 $0.00 $0.00 $0.00 $0.00
B-8 0.00 $0.00 $0.00 $0.00 $0.00 $0.00
B-9 0.00 $0.00 $0.00 $0.00 $0.00 $0.00
B-10 0.00 $0.00 $0.00 $0.00 $0.00 $0.00
B-11 0.00 $0.00 $0.00 $0.00 $0.00 $0.00
B-12 0.00 $0.00 $0.00 $0.00 $0.00 $0.00
L 0.00 $0.00 $0.00 $0.00 $0.00 $0.00
C-X 0.00 $0.00 $0.00 $0.00 $0.00 $0.00
A-R 0.00 $0.00 $0.00 $0.00 $0.00 $0.00
A-XPP-IO 0.00 $0.00 $0.00 $0.00 $0.00 $0.00
A-XPP-PO 0.00 $0.00 $0.00 $0.00 $0.00 $0.00

Page 29 of 31

IndyMac IMSC Mortgage Loan Trust 2007-HOA-1

Mortgage Pass-Through Certificates

July 25, 2007 Distribution

ADDITIONAL CERTIFICATE REPORT

Net Deferred Interest

CLASS
A-1-1 0.00
A-1-2 0.00
A-2-1 0.00
A-2-2 0.00
A-2-3 0.00
A-2-4 0.00
A-3 0.00
B-1 0.00
B-2 0.00
B-3 0.00
B-4 0.00
B-5 0.00
B-6 0.00
B-7 0.00
B-8 0.00
B-9 0.00

Page 30 of 31

IndyMac IMSC Mortgage Loan Trust 2007-HOA-1

Mortgage Pass-Through Certificates

July 25, 2007 Distribution

Other Related Information
ADDITIONAL INFORMATION

Total
Current Scheduled Payments 2,516,602.69
Current Scheduled Payments 1 Month Prior 0.00
Current Scheduled Payments 2 Month Prior 0.00
Current Scheduled Payments 3 Month Prior 0.00
Current Scheduled Payments 4 Month Prior 0.00
Current Scheduled Payments 5 Month Prior 0.00
Current Scheduled Payments 6 Month Prior 0.00
Current Scheduled Payments 7 Month Prior 0.00
Current Scheduled Payments 8 Month Prior 0.00
Current Scheduled Payments 9 Month Prior 0.00
Current Scheduled Payments 10 Month Prior 0.00
Current Scheduled Payments 11 Month Prior 0.00

Sched. Payments for 60+Day Delinquent Loans 0.00
Sched. Pmts - 60+Day Delinquent Loans, 1 Month Prior 0.00
Sched. Pmts - 60+Day Delinquent Loans, 2 Month Prior 0.00
Sched. Pmts - 60+Day Delinquent Loans, 3 Month Prior 0.00
Sched. Pmts - 60+Day Delinquent Loans, 4 Month Prior 0.00
Sched. Pmts - 60+Day Delinquent Loans, 5 Month Prior 0.00
Sched. Pmts - 60+Day Delinquent Loans, 6 Month Prior 0.00
Sched. Pmts - 60+Day Delinquent Loans, 7 Month Prior 0.00
Sched. Pmts - 60+Day Delinquent Loans, 8 Month Prior 0.00
Sched. Pmts - 60+Day Delinquent Loans, 9 Month Prior 0.00
Sched. Pmts - 60+Day Delinquent Loans, 10 Month Prior 0.00
Sched. Pmts - 60+Day Delinquent Loans, 11 Month Prior 0.00

Class B-1 Writedown Amount 0.00
Class B-2 Writedown Amount 0.00
Class B-3 Writedown Amount 0.00
Class B-4 Writedown Amount 0.00
Class B-5 Writedown Amount 0.00
Class B-6 Writedown Amount 0.00

Page 31 of 31

GRAPHIC 45 tsslogo.gif begin 644 tsslogo.gif M1TE&.#EAA@$8`/?_````````6``,7@`):0`%P`:08I=@`J?0@J>@8S?!`L?1,Y?0`!A``-@@`,BP`# MD@`3@P`4BP`:@P`JSA1V#R2U3R4V3V8VUN`JEI_L5R!NF6%KF^%H6^'KV6&M6F5N72'N7B4N424 MTEN'PU*6RV>`PV>-QVJ$PFN)P&B+R&&6QVR2RG:+PW2.U':5PWF6TVZFU7BB MQW>CU7^RU7^YVX&-M8*6N8F@OX6:R(*]=3<^7R]>7S^^7Z]^/]^^KS\^KT^^OY].WY_/'M_O?X[?/T]?/T^O/W\_+V M]OKT]?CT]_GX\_3T\P```"'Y!`$!`/\`+`````"&`1@`0`C_``$('$BPH,&# M"!,J7,BPH<.'$"-*G$BQHL6+&#-JW-C0GT=_(T**'$FR9(@*_F#!6;.''JDP4KE\^?0(,*'?H36"Y=N5+Y"Q-A1(04)%-,&)$D)\Y^ M'W^@\-E%MV'337C`D2C\ZNV0I\4U]J.!R^R@K;-=^W%+=\QL:UJS]TGP!]FIP/*TY`&[)Q]??:5))I_O1AE67)$C"/ MKY\I_62)62IGPSVF"AL,%E=]_MR]_PW5+KEOYI8`*T^>*A"F87KCXQ1X4T4/ M^_COZ\_/7P63E'4((N"`!!9H8(%W"#+'+_+IM0LON0`CX8045FCAA1/R`@PN MWN610@\@ABBB"F0T>)-6."T2@CPWA9`#.?Z04P0*6?A#SP8N?.-1+1T@XI$* M0)2SV4?@+2,""M?H\PT4(3"!@A;X])//3?"DT$$;R<2#CBA!.&"-1V)X\(A' MX"BAP3+^R"."$N+8R,8"SQ4R6'*8D##"9,MLH(I'X*DPAD>@<%"*._Y@PD$X M_7C3@0MH^B,*"$?X4P\'0<"HSRH<,&)5-@^@H`@V[8RS"0H2@.=/"R*LXA$T M*HQ`CS^;/8/"#2[X,Z4_8ZC`53`(9,&B/$PTP*(/+ZCJ#ZLHQ.// M$B(`!DX*1&1GXDWT7:OMMMQVZ^VWX(8K[KCDEFONN>BFJVZV/^[G+G_O^@?@ M@?36*V"""WK[8(08]NMOAAMV^*&(!).X+8K)>>1(".EX]0P'2NG3IQ8>0<%! M"F6(XJQO*/QI53DHH)"-.RAX\`P]%:SQ$:TXA?.)&""$H(Q8*+AAB2,X1V(# M%?Y0D:M'+#/QPTV;B!"./\\HD`JM*HCA4:Q'%]K!T2T$X4@@CC""21L=L)5$ M`RVT(0J+_;RVLME\9K/)C".PJ(8*6./LR!\O:!JK<,--L94_NVS_D)@8-GA$ M`L4YJ1&#W%@O@D(?_CBBP0A6<>.+YYZ"'+GKHE%`R M"5O=4M/,,JRW[OKKL,?N^C//.-/,3F'HH88:>?2>Q^Z[6Z+N\,07;_SQR)MK M>?+,-^_\\]!'+_WTVRXO+LOF8L\MY<3;9J+V0%L#",Z;N*#")H]@#9^IN^HE M,9'P^S/!%/(E$0$PXS"A0=1Z9>'!&@;0"`A8?%+ M3@:+9SEXV?!=]Y$7+.S%0P,EJ`X,ZA8P_WP1(0T9$1A'3"(2EZC$(TJ(0_[P M$,$*5B)M"6%OIG)$#%Q`#63L0QL<$`6?_*$"BNF#`83S1QL*X!TRGD$O_,#* M$5`@`E`,QQXLL\TF//`!%:@A%>/XSF:N$(+G^`,?3G``//Q1C@\HX56\,L`N M_"$THHG@'$A#`0E2P0WL-`U0'"!4H3YP-&U@@`JF6H4&#F$C#FSA(V48`#!2 MZ`\U=*`#2O"#+.IAK12DP!L>(4<*A@:K&J0@&,R8AR8:@";PM"$$Y?"'&'SE MCUQHH(K^*(("RI,"%5S#(^48)E:$T`)3B6(`>0!7#7%XP_[\!Q8!ZJ$\\15$ M;NT+<_BTD(:@*/_%*8;(8-I"6!97U(\B^0V&9=0),,;0`3/\R&,WF9(34@`> MK'B"!"_X@7+X@9,=&`"2]-#'/OQA@Q84"@2!M$H6?$6K::2#DL3T""4A/?1$Q MGWB5D(9Z(3!__A.;)F(&,E;F#VX,%FBO<4,8\%W+>M[B MH'(**K'^^O>_`/:O#/M+/00*N,`(3K""%UP]`##XP1".L(0G3.&/X+?"&,ZP MAC?,81-=^%LJ+%>($YQ`^]K7([#@@`IB@`(;X"`%,%`!"C"1$^_%QS>FTJQC M],(%.J8@%R9R!(Q)T&)'U%B#1UYN5RIZ%8Y1;$JRH*Y/$:67$U=9'V2(P0M2 M@`(=?$*]N@I7`X?3*WV@S7W(LUQ>+<2,VRPC_QMPCK.<^\_G/?@XTH`?=9W44VA_,\)BP#(]6`<4&(H$3 M(6B`@J?.R:[6J]V5<1#55Y&8I/GDW52SU<$?"8*TITWM:E>[!S;X3RSF,-<> M$D(0=6@C`B7D"PGI`ACG3C>ZUZWN=K.;W;O`!2^\@P?[\,"O*=!I?.QA*DA[ M9`\_*(,",A`(9Q"`$S>!0!.T@P`4:*4!:4#:!E2@@@Z@0B^.:$`;/K$`B.*D M-^-H@`T^:Q5]).$`*O_(P08D@+?+A:`!5U0`(#SB@Y^!)Q`&H&`P#@`)#6B@ M"/X(`<_`0'$5F!3G48.%`RBE`@.4""N@4``)@H`"!:CATBCNP!'6X;YSM&`! M-LC!`7X@2DRD8!`7.,`@6K!6CS2#`#,70PB&PW$1#*$##4C,.+YN@R`@H`6B M[$8(-&`#&RB`"*^M'+0]\E:WXN<_NY!#M^5)ATD*44/Z9.(2,=1$"OG".VJX MMU][D`+`-N@')!ACXPKY$6:$489DK!$Y.E"&C^`C%7GV1\<4:(]N*$$$.4A! M*[#N&]]H`P\_\(`''!"%SUK#`PB_R04:X0\_<`!&74D'&L)2!"%8\FC-"('_ M'NJC4ZCUM`.3,<,)K/4'!]!C'!JHO4?N@8K<;Y"CL>@5!SQ`(Q:-1@$DMRP& M$!:;\`%BY!'R$`)N\!$H\!^\LC=)L!6V80QJ8`ZIH`'8\1'<8`#/X0(QY0^H M$(#<8CF-5X+R$GF3UT.5YRV;MV9X]7FU)'KX9GKR(02I!T.,(`+RX!O.T`%B M]#XJT`7#L0E"\`$7T`!B`$E^HA=KT#4>L0R+(@D=$'W4P!1R@`1N``1>@`H8$)@JP`2FP`!]@&``B4P`%5041AY`20``@>@;SGQ#$2P``W``0K``$)P5?[0#D*@`"&0 M`@;0`MC0%9@P`-F`/42``7]P$U*0`,0Q&B.``"H@=8;T#DK0`".0`M;)BNC@ M`QJ\$`$3<``N@'T_N7C^0`+LV9[N^9[P&0)#`PMO8`=U<)_XF9_ZN9_X*0AV M(`=Q<`LL:`M'H0L&>J`(FJ`*NJ`'F@N\H!1IT$UBZ$MB6*$I4"/<@F.$-4;$ MQB?+]A$A)1\9Q$&[,D,?T:%6@:(G!AXH"AWZ0&QY-&+Y\*&Z8@\CU4$MFATL M(VF:&3_>Q5''5F4KTT$F&D-`,V:M2&%61CTV)A\YVF%0&J4+QA%46J56>J58 - -FJ5:NJ5 EX-99.2 46 in07mhfsa992.htm
QuickLinks -- Click here to rapidly navigate through this document

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

ý
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2007

OR

o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                             to

Commission File Number: 1-12644

Financial Security Assurance Holdings Ltd.
(Exact name of registrant as specified in its charter)

New York
(State or other jurisdiction of
incorporation or organization) 13-3261323
(I.R.S. Employer Identification No.)

31 West 52^nd Street
New York, New York 10019
(Address of principal executive offices)

(212) 826-0100
(Registrant's telephone number, including area code)

        Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes ý        No o

        Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of "accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o                Accelerated filer o    Non-accelerated filer ý

        Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes o        No ý

        At May 10, 2007, there were 33,276,017 outstanding shares of Common Stock of the registrant (excludes 241,978 shares of treasury stock).

INDEX

Page

PART I.    FINANCIAL INFORMATION

Item 1.
Financial Statements

Consolidated Financial Statements (unaudited)

Financial Security Assurance Holdings Ltd. and Subsidiaries

Consolidated Balance Sheets (unaudited) 1

Consolidated Statements of Operations and Comprehensive Income (unaudited) 2

Consolidated Statement of Changes in Shareholders' Equity (unaudited) 3

Consolidated Statements of Cash Flows (unaudited) 4

Notes to Consolidated Financial Statements (unaudited) 5

Item 2.
Management's Discussion and Analysis of Financial Condition and Results of Operations

16

Item 3.
Quantitative and Qualitative Disclosures About Market Risk

33

Item 4T.
Controls and Procedures

34

PART II.    OTHER INFORMATION

Item 6.
Exhibits

35

SIGNATURES

36

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

FINANCIAL SECURITY ASSURANCE HOLDINGS LTD. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (unaudited)
(in thousands, except share data)

March 31,
2007
December 31,
2006

ASSETS

General investment portfolio:

Bonds at fair value (amortized cost of $4,537,183 and $4,546,147) $ 4,699,463 $ 4,721,512

Equity securities at fair value (cost of $39,275 and $54,291) 39,321 54,325

Short-term investments (cost of $89,414 and $96,055) 90,537 96,578

Financial products segment investment portfolio:

Bonds at fair value (amortized cost of $17,341,154 and $16,692,183) 17,382,956 16,757,979

Short-term investments 702,496 659,704

Trading portfolio at fair value 214,028 119,424

Assets acquired in refinancing transactions:

Bonds at fair value (amortized cost of $40,533 and $40,133) 41,699 41,051

Securitized loans 229,661 241,785

Other 53,608 55,036

Total investment portfolio 23,453,769 22,747,394

Cash 37,529 32,471

Deferred acquisition costs 344,793 340,673

Prepaid reinsurance premiums 1,006,277 1,004,987

Reinsurance recoverable on unpaid losses 39,126 37,342

Other assets 1,485,714 1,610,759

TOTAL ASSETS $ 26,367,208 $ 25,773,626

LIABILITIES, MINORITY INTEREST AND SHAREHOLDERS' EQUITY

Deferred premium revenue $ 2,655,801 $ 2,653,321

Losses and loss adjustment expenses 233,500 228,122

Financial products segment debt 18,814,436 18,349,665

Deferred federal income taxes 297,255 298,542

Notes payable 730,000 730,000

Accrued expenses, other liabilities and minority interest 882,733 791,664

TOTAL LIABILITIES AND MINORITY INTEREST 23,613,725 23,051,314

COMMITMENTS AND CONTINGENCIES

Common stock (200,000,000 shares authorized; 33,517,995 issued; par value of $.01 per share) 335 335

Additional paid-in capital—common 906,687 906,687

Accumulated other comprehensive income (net of deferred income taxes of $73,452 and $86,119) 136,514 160,038

Accumulated earnings 1,709,947 1,655,252

Deferred equity compensation 19,225 19,225

Less treasury stock at cost (241,978 shares held) (19,225 ) (19,225 )

TOTAL SHAREHOLDERS' EQUITY 2,753,483 2,722,312

TOTAL LIABILITIES, MINORITY INTEREST AND SHAREHOLDERS' EQUITY $ 26,367,208 $ 25,773,626

The accompanying Notes are an integral part of the Consolidated Financial Statements (unaudited).

1

FINANCIAL SECURITY ASSURANCE HOLDINGS LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (unaudited)
(in thousands)

Three Months Ended
March 31,

2007
2006

REVENUES

Net premiums written $ 100,200 $ 88,732

Net premiums earned $ 99,012 $ 94,496

Net investment income 57,709 53,046

Net realized gains (losses) (155 ) (918 )

Net interest income from financial products segment 247,678 176,289

Net realized gains (losses) from financial products segment 534 77

Net realized and unrealized gains (losses) on derivative instruments 18,371 57,825

Income from assets acquired in refinancing transactions 5,852 6,981

Net realized gains (losses) from assets acquired in refinancing transactions 269 712

Other income 5,559 7,348

TOTAL REVENUES 434,829 395,856

EXPENSES

Losses and loss adjustment expenses 4,390 3,285

Interest expense 11,584 6,748

Policy acquisition costs 15,951 16,210

Foreign exchange (gains) losses from financial products segment 17,504 36,185

Net interest expense from financial products segment 241,683 155,660

Other operating expenses 30,262 31,304

TOTAL EXPENSES 321,374 249,392

INCOME BEFORE INCOME TAXES AND MINORITY INTEREST 113,455 146,464

Provision (benefit) for income taxes:

Current 16,879 11,779

Deferred 11,380 42,005

Total provision 28,259 53,784

NET INCOME BEFORE MINORITY INTEREST 85,196 92,680

Less: Minority interest — (37,525 )

NET INCOME 85,196 130,205

OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX

Unrealized gains (losses) arising during the period, net of deferred income tax provision (benefit) of $(12,339) and $(34,286) (22,914 ) (64,179 )

Less: reclassification adjustment for gains (losses) included in net income, net of deferred income tax provision (benefit) of $328 and $(312) 610 (579 )

Other comprehensive income (loss) (23,524 ) (63,600 )

COMPREHENSIVE INCOME $ 61,672 $ 66,605

The accompanying Notes are an integral part of the Consolidated Financial Statements (unaudited).

2

FINANCIAL SECURITY ASSURANCE HOLDINGS LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (unaudited)
(in thousands)

Common
Stock
Additional
Paid-In
Capital-
Common
Accumulated
Other
Comprehensive
Income
Accumulated
Earnings
Deferred
Equity
Compensation
Treasury
Stock
Total

BALANCE, December 31, 2006 $ 335 $ 906,687 $ 160,038 $ 1,655,252 $ 19,225 $ (19,225 ) $ 2,722,312

Net income for the year 85,196 85,196

Net change in accumulated other comprehensive income (net of deferred income tax provision (benefit) of ($12,667) (23,524 ) (23,524 )

Dividends paid on common stock (30,501 ) (30,501 )

BALANCE, March 31, 2007 $ 335 $ 906,687 $ 136,514 $ 1,709,947 $ 19,225 $ (19,225 ) $ 2,753,483

The accompanying Notes are an integral part of the Consolidated Financial Statements (unaudited).

3

FINANCIAL SECURITY ASSURANCE HOLDINGS LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
(in thousands)

Three Months Ended
March 31,

2007
2006

Cash flows from operating activities:

Premiums received, net $ 77,982 $ 36,073

Policy acquisition and other operating expenses paid, net (158,287 ) (132,000 )

Salvage and subrogation 5 267

Losses and loss adjustment expenses paid, net (850 ) (1,464 )

Net investment income received 58,324 51,900

Federal income taxes paid (6,914 ) (1,624 )

Interest paid on notes payable (6,758 ) (6,658 )

Interest paid on financial products segment (162,000 ) (130,176 )

Interest received on financial products segment 227,438 153,235

Financial products segment net derivative payments 14,096 14,220

Income received from refinanced assets 4,132 5,829

Purchases of trading portfolio securities (98,772 ) —

Other 7,126 4,990

Net cash provided by (used for) operating activities (44,478 ) (5,408 )

Cash flows from investing activities:

Proceeds from sales of bonds in general investment portfolio 738,856 420,218

Proceeds from maturities of bonds 60,132 36,706

Purchases of bonds (783,307 ) (451,712 )

Net (increase) decrease in short-term investments 6,959 49,630

Proceeds from sales of bonds in financial products segment 1,766,598 1,374,077

Proceeds from maturities of bonds in financial products segment 830,183 218,592

Purchases of bonds in financial products segment (3,087,109 ) (1,582,351 )

Securities purchased under agreements to resell 150,000 330,000

Net (increase) decrease in financial products segment short-term investments (42,792 ) (115,300 )

Purchases of property, plant and equipment (212 ) (1,018 )

Paydowns of assets acquired in refinancing transactions 15,374 51,875

Proceeds from sales of assets acquired in refinancing transactions 286 4,995

Other investments 14,732 529

Net cash provided by (used for) investing activities (330,300 ) 336,241

Cash flows from financing activities:

Dividends paid (30,501 ) (32,466 )

Proceeds from issuance of financial products segment debt 1,236,509 713,362

Repayment of financial products segment debt (826,192 ) (1,028,242 )

Capital issuance costs (220 ) (233 )

Net cash provided by (used for) financing activities 379,596 (347,579 )

Effect of changes in foreign exchange rates on cash balances 240 772

Net (decrease) increase in cash 5,058 (15,974 )

Cash at beginning of period 32,471 43,629

Cash at end of period $ 37,529 $ 27,655

The accompanying Notes are an integral part of the Consolidated Financial Statements (unaudited).

4

FINANCIAL SECURITY ASSURANCE HOLDINGS LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

1.    ORGANIZATION AND OWNERSHIP

        Financial Security Assurance Holdings Ltd. ("FSA Holdings" or, together with its consolidated entities, the "Company") is a holding company incorporated in the State of New York. The Company operates in two business segments: the Financial Guaranty Segment and the Financial Products ("FP") Segment. In the Financial Guaranty Segment, the principal segment, the Company provides financial guaranty insurance on public finance and asset-backed obligations through its primary insurance company subsidiary, Financial Security Assurance Inc. ("FSA"), and other domestic and foreign insurance subsidiaries. The Company's underwriting policy is to insure public finance and asset-backed obligations that it determines would be investment-grade quality without the benefit of the Company's insurance. Public finance obligations insured by the Company consist primarily of general obligation bonds supported by the issuers' taxing powers and special revenue bonds and other special obligations of states and local governments supported by the issuers' abilities to impose and collect fees and charges for public services or specific projects. Public finance obligations include obligations backed by the cash flow from leases or other revenues from projects serving substantial public purposes, including government office buildings, toll roads, health care facilities and utilities. Asset-backed obligations insured by the Company are generally issued in structured transactions and are backed by pools of assets, such as residential mortgage loans, consumer receivables, securities or other assets having an ascertainable cash flow or market value. The Company also insures synthetic asset-backed obligations that generally take the form of credit default swap ("CDS") obligations or credit-linked notes that reference specific asset-backed securities or pools of securities or loans, with a defined deductible to cover credit risks associated with the referenced securities or loans. The Company has refinanced certain defaulted transactions by employing refinancing vehicles to raise funds for the refinancings. These refinancing vehicles are consolidated. The Company's management believes that the assets held by the refinancing vehicles are beyond the reach of the Company and its creditors, even in bankruptcy or other receivership.

        In the FP Segment, the Company issues guaranteed investment contracts ("GICs") in the municipal GIC and other markets through several consolidated affiliates ("GIC Affiliates"). The GIC Affiliates lend the proceeds from their sales of GICs to FSA Asset Management LLC ("FSAM"), which invests the funds, generally in obligations that qualify for FSA insurance. FSAM wholly owns FSA Portfolio Asset Limited, a U.K. Company that invests in non-U.S. securities. The FP Segment also includes the results of certain variable interest entities ("VIEs"), including FSA Global Funding Limited ("FSA Global") and Premier International Funding Co. ("Premier"). FSA Global issues FSA- insured medium term notes and generally invests the proceeds from the sale of its notes in FSA-insured GICs or other FSA-insured obligations with a view to realizing the yield difference between the notes issued and the obligations purchased with the note proceeds. Substantially all the assets of FSA Global are pledged to secure the repayment, on a pro rata basis, of FSA Global's notes and its other obligations. Premier is principally engaged in debt defeasance for lease transactions. The FP Segment debt is issued at or converted into LIBOR-based floating-rate obligations and the proceeds are invested in or converted into LIBOR-based floating-rate investments intended to result in profits from a higher investment rate than borrowing rate. The Company's management believes that the assets held by the consolidated VIEs, including those that are eliminated in consolidation, are beyond the reach of the Company and its creditors, even in bankruptcy or other receivership.

        The Company is a direct subsidiary of Dexia Holdings, Inc. ("DHI"), which in turn is owned 10% by Dexia S.A. ("Dexia"), a publicly held Belgian corporation, and 90% by Dexia Credit Local S.A., a wholly owned subsidiary of Dexia.

5

2.    BASIS OF PRESENTATION

        The accompanying Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments necessary for a fair statement of the financial position, results of operations and cash flows as of and for the period ended March 31, 2007 and for all periods presented. These Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2006. The accompanying Consolidated Financial Statements have not been audited by an independent registered public accounting firm in accordance with the standards of the Public Company Accounting Oversight Board (United States). The December 31, 2006 consolidated balance sheet was derived from audited financial statements. The results of operations for the periods ended March 31, 2007 and 2006 are not necessarily indicative of the operating results for the full year. Certain prior-year balances have been reclassified to conform to the 2007 presentation.

Revisions

        The statement of cash flows for the period ended March 31, 2007 appropriately segregates the effect of changes in foreign exchange rates on cash balances into a separate line item. The effect of foreign exchange rates on cash balances has historically been included in cash flows from operations. The statements of cash flows for the period ended March 31, 2006 has been revised to conform to the 2007 presentation. The 2006 statement of cash flows also reflects the reclassification of certain accounts. The amount revised for 2006 from cash to short-term investments was $27.6 million.

3.    LOSSES AND LOSS ADJUSTMENT EXPENSES

        The Company establishes loss liabilities based on its estimate of specific and non-specific losses. The Company also establishes liabilities for loss adjustment expenses ("LAE"), consisting of the estimated cost of settling claims, including legal and other fees and expenses associated with administering the claims process.

        The Company calculates a loss and LAE liability based upon identified risks inherent in its insured portfolio. If an individual policy risk has a reasonably estimable and probable loss as of the balance sheet date, a case reserve is established. For the remaining policy risks in the portfolio, a non-specific reserve is established to account for the inherent credit losses that can be statistically estimated.

        The following table presents the activity in non-specific and case reserves for the three months ended March 31, 2007. Adjustments to reserves represent management's estimate of the amount required to cover the present value of the net cost of claims, based on statistical provisions for new originations. Transfers between non-specific and case reserves represent a reallocation of existing loss reserves and have no impact on earnings.

6

Reconciliation of Net Losses and Loss Adjustment Expenses

Non-
Specific
Case
Total

(in millions)

December 31, 2006 $ 137.8 $ 53.0 $ 190.8

Incurred 4.4 — 4.4

Transfers (3.1 ) 3.1 —

Payments and other decreases — (0.8 ) (0.8 )

March 31, 2007 balance $ 139.1 $ 55.3 $ 194.4

        Management of the Company periodically evaluates its estimates for losses and LAE and establishes reserves that management believes are adequate to cover the present value of the ultimate net cost of claims. However, because of the uncertainty involved in developing these estimates, the ultimate liability may differ from current estimates.

        The gross and net par amounts outstanding on transactions with case reserves were $456.1 million and $375.6 million, respectively, at March 31, 2007. The net case reserves consisted primarily of five collateralized debt obligation ("CDO") risks and two municipal risks, which collectively accounted for approximately 94.8% of total net case reserves. The remaining eight exposures were in non-municipal sectors.

        Management is aware that there are differences regarding the method of defining and measuring both case reserves and non-specific reserves among participants in the financial guaranty industry. Other financial guarantors may establish case reserves only after a default and use different techniques to estimate probable loss. Other financial guarantors may establish the equivalent of non-specific reserves, but refer to these reserves by various terms, such as, but not limited to, "unallocated losses," "active credit reserves" and "portfolio reserves," or may use different statistical techniques from those used by the Company to determine loss at a given point in time. In April 2007, the Financial Accounting Standards Board (the "FASB") published an exposure draft proposing new guidance for financial guaranty insurance accounting. This exposure draft proposes, among other things, changes to reserving and premium earnings methodologies. Based on management's current understanding of this exposure draft, the effect of these changes would be material to the financial statements if adopted.

4.    FINANCIAL PRODUCTS SEGMENT DEBT

        The obligations under GICs issued by the GIC Affiliates may be called at various times prior to maturity based on certain agreed-upon events. As of March 31, 2007, interest rates were between 1.91% and 6.07% per annum on outstanding GICs and between 1.98% and 6.20% per annum on VIE debt. Payments due under GICs are based on expected withdrawal dates and exclude negative hedge accounting adjustments and prepaid interest of $82.3 million and include accretion of $936.6 million. VIE debt excludes fair-value adjustments of $136.0 million and includes $1,036.6 million of future interest accretion on zero-coupon obligations. The following table presents the combined principal

7

amounts due under GIC and VIE debt for the remainder of 2007, each of the next four calendar years ending December 31, and thereafter:

Principal
Amount

(in millions)

2007 $ 3,341.1

2008 1,699.1

2009 2,420.1

2010 2,571.6

2011 1,274.9

Thereafter 9,427.1

Total $ 20,733.9

5.    OUTSTANDING EXPOSURE

        The Company's policies insure the scheduled payments of principal and interest on public finance and asset-backed (including FSA-insured derivatives) obligations. The gross amount of financial guaranties in force (principal and interest) was $744.8 billion at March 31, 2007 and $743.9 billion at December 31, 2006. The net amount of financial guaranties in force was $542.3 billion at March 31, 2007 and $531.4 billion at December 31, 2006. The Company limits its exposure to losses from writing financial guaranties by underwriting investment-grade obligations, diversifying its portfolio and maintaining rigorous collateral requirements on asset-backed obligations, as well as through reinsurance.

        The net and ceded par outstanding of insured obligations in the public finance insured portfolio included the following amounts:

Net Par Outstanding
Ceded Par Outstanding

March 31, 2007
December 31,
2006
March 31, 2007
December 31,
2006

(in millions)

Domestic obligations

General obligation $ 106,685 $ 103,112 $ 28,668 $ 28,143

Tax-supported 47,159 46,479 18,730 18,733

Municipal utility revenue 41,561 40,495 13,656 13,367

Health care revenue 13,303 13,155 10,462 10,144

Housing revenue 7,441 7,576 1,954 2,039

Transportation revenue 16,253 16,164 10,322 10,337

Education 4,754 4,378 1,606 1,027

Other domestic public finance 1,615 1,628 506 509

International obligations 18,576 18,306 15,034 14,554

Total public finance obligations $ 257,347 $ 251,293 $ 100,938 $ 98,853

8

        The net and ceded par outstanding of insured obligations in the asset-backed insured portfolio (including FSA-insured CDS) included the following amounts:

Net Par Outstanding
Ceded Par Outstanding

March 31, 2007
December 31,
2006
March 31,
2007
December 31,
2006

(in millions)

Domestic obligations

Residential mortgages $ 17,921 $ 15,666 $ 2,906 $ 2,555

Consumer receivables 10,086 10,599 592 664

Pooled corporate obligations 51,493 45,914 6,377 8,729

Other domestic asset-backed obligations(1) 7,076 6,793 3,288 2,952

International obligations 29,892 29,295 6,166 8,077

Total asset-backed obligations $ 116,468 $ 108,267 $ 19,329 $ 22,977

(1)
Excludes net par outstanding of $16,892 million as of March 31, 2007 and $16,558 million as of December 31, 2006 relating to FSA-insured GICs issued by the GIC Affiliates.

6.    TAXES

        The Company adopted FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxes—an Interpretation of SFAS Statement No.109" ("FIN 48") as of January 1, 2007. FIN 48 clarifies the accounting for uncertainty in income taxes in an entity's financial statements pursuant to FASB Statement No. 109, "Accounting for Income Taxes" and provides thresholds for recognizing and measuring benefits of a tax position taken or expected to be taken in a tax return. Consequently, the Company recognizes tax benefits only on tax positions where it is "more likely than not" to prevail. There was no impact to the Company's financial statements from adopting FIN 48.

        The total amount of unrecognized tax benefits at January 1, 2007 and March 31, 2007 were $22.8 million and $23.4 million, respectively. If recognized, the entire amount would favorably influence the effective tax rate. Further, the Company recognizes interest and penalties related to unrecognized tax benefits as part of income taxes. For the quarter ended March 31, 2007, the Company accrued $0.3 million of expenses related to interest and penalties. Cumulative interest and penalties of $2.3 million had been accrued on the Company's balance sheet at March 31, 2007.

        The Company files consolidated income tax returns in the United States as well as separate tax returns for certain of its subsidiaries or branches in various state and local and foreign jurisdictions, including the United Kingdom, Japan, Australia, and Singapore. With limited exceptions, the Company is no longer subject to income tax examinations for its 2002 and prior tax years for U.S. federal, state and local, or non-U.S. jurisdictions.

        Within the next 12 months, it is reasonably possible that unrecognized tax benefits for tax positions taken on previously filed tax returns will become recognized as a result of the expiration of the statute of limitations for the 2003 tax year, which, absent any extension, will close in September 2007.

9

7.    DERIVATIVE INSTRUMENTS

Insured Derivatives

        Included in the Company's insured portfolio are certain contracts for which fair-value adjustments are recorded through the statements of operations and comprehensive income because they qualify as derivatives under Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging Activities" ("SFAS 133") or SFAS No. 155, "Accounting for Certain Hybrid Financial Instruments" ("SFAS 155"). These contracts include FSA-insured CDS, insured interest rate swaps entered into in connection with the issuance of certain public finance obligations and insured net interest margin ("NIM") securitizations issued in connection with certain mortgage-backed security ("MBS") financings. The Company considers all such agreements to be a normal extension of its financial guaranty insurance business, although they are considered derivatives for accounting purposes and therefore recorded at fair value.

        With respect to insured derivatives, FSA expects that these transactions will not be subject to a market value termination for which the Company would be liable. The Company recorded net earned premium under these agreements of $22.2 million for the three months ended March 31, 2007 and $22.5 million for the three months ended March 31, 2006.

        The Company's net par outstanding of $74.3 billion and $72.8 billion relating to CDS transactions at March 31, 2007 and December 31, 2006, respectively, are included in the asset-backed balances in Note 5. The Company believes that the most meaningful presentation of the financial statement impact of these derivatives is to record earned premiums over the installment period and to record changes in fair value as incurred. Changes in fair value are recorded in net realized and unrealized gains (losses) on derivative instruments and in either other assets or other liabilities, as appropriate. The Company uses quoted market prices, when available, to determine fair value. If quoted market prices are not available, as is generally the case, the Company uses internally developed estimates of fair value. Management applies judgment when developing these estimates and considers factors such as current prices charged for similar agreements, performance of underlying assets, changes in internal shadow ratings, the level at which the deductible has been set and the Company's ability to obtain reinsurance for its insured obligations. Due to the lack of a quoted market for the CDS obligations written by the Company, estimates generated from the Company's valuation process may differ materially from values that may be realized in market transactions. The Company does not believe that the fair value adjustments are an indication of potential claims under FSA's guarantees or an indication of potential gains or losses to be realized from the derivative transactions. The average remaining life of these contracts as of March 31, 2007 was 3.4 years. The inception-to-date gain on the balance sheet was $76.8 million at March 31, 2007 and $88.5 million at December 31, 2006 and is recorded in other assets.

        As of January 1, 2007, the Company implemented SFAS 155, which resulted in a mark-to-market loss of $1.2 million related to insured NIM securitizations. The change in fair value was a function of the market's adverse perception of mortgage-backed products. The Company does not believe that the fair value adjustments are an indication of potential claims under FSA's guarantees or an indication of potential gains or losses to be realized from the derivative transactions.

10

        The table below shows the changes in fair value of insured derivatives that are recorded in net realized and unrealized gains (losses) on derivative instruments in the consolidated statements of operations and comprehensive income:

Three Months Ended
March 31,

2007
2006

(in millions)

Insured derivatives:

CDS $ (11.7 ) $ 29.0

Interest rate swaps (0.3 ) 0.2

NIM securitizations (1.2 ) —

Total $ (13.2 ) $ 29.2

Interest Rate and Foreign Exchange Rate Derivatives

        The Company enters into derivative contracts to manage interest rate and foreign currency exposure in its FP Segment investment portfolio and FP Segment debt. All gains and losses from changes in the fair value of derivatives are recognized immediately in the consolidated statements of operations and comprehensive income. These derivatives generally include interest rate and currency swap agreements, which are primarily utilized to convert fixed-rate debt and investments into U.S. dollar floating-rate debt and investments. Hedge accounting is applied in a fair-value hedge, provided certain criteria are met.

        In order for a derivative to qualify for hedge accounting, it must be highly effective at reducing the risk associated with the exposure being hedged. An effective hedge is defined as one whose periodic fair value change is 80% to 125% correlated with the fair value of the hedged item. The difference between a perfect hedge (i.e., one that is 100% correlated) and the actual correlation within the 80% to 125% range is the ineffective portion of the hedge. A failed hedge is one whose correlation falls outside of the 80% to 125% range. The table below presents the net gain (loss) related to the ineffective portion of the Company's fair value hedges and net gain (loss) related to failed hedges.

Three Months Ended
March 31,

2007
2006

(in millions)

Ineffective portion of fair value hedges(1) $ 0.9 $ 4.4

Failed hedges (0.4 ) 0.3

(1)
Includes the changes in value of hedging instruments related to the passage of time, which have been excluded from the assessment of hedge effectiveness.

        The inception-to-date net unrealized gain on derivatives in the FP Segment of $485.8 million and $493.8 million at March 31, 2007 and December 31, 2006, respectively, is recorded in other assets or accrued expenses, other liabilities and minority interest, as applicable.

11

Other Derivatives

        The Company enters into various other derivative contracts that do not qualify for hedge accounting treatment under SFAS 133. These derivatives may include swaptions, caps and other derivatives which are used principally as protection against large interest rate movements in certain assets and liabilities. Gains and losses on these derivatives are reflected in net realized and unrealized gains (losses) on derivative instruments in the consolidated statements of operations and comprehensive income.

8.    OTHER ASSETS AND LIABILITIES

        The detailed balances that comprise other assets and accrued expenses, other liabilities and minority interest at March 31, 2007 and December 31, 2006 are as follows:

March 31,
2007
December 31,
2006

(in thousands)

Other assets:

Fair value of VIE swaps $ 513,675 $ 516,762

Fair-value adjustment of insured derivatives 75,989 89,195

VIE other invested assets 161,740 157,810

Securities purchased under agreements to resell — 150,000

Deferred compensation trust 121,388 114,181

Tax and loss bonds 128,917 127,150

Accrued interest on VIE swaps 156,533 136,975

Accrued interest income 95,721 92,951

Other assets 231,751 225,735

Total other assets $ 1,485,714 $ 1,610,759

March 31,
2007
December 31,
2006

(in thousands)

Accrued expenses, other liabilities and minority interest:

Payable for securities purchased $ 178,254 $ 33,046

Deferred compensation trust 121,388 114,181

Equity participation plan 62,398 112,688

Accrued interest on FP GICs 122,919 124,856

Fair-value adjustment of derivatives 49,031 33,230

Other liabilities 348,493 373,413

Minority interest in VIE's 250 250

Total accrued expenses, other liabilities and minority interest $ 882,733 $ 791,664

9.    SEGMENT REPORTING

        The Company operates in two business segments: financial guaranty and financial products. The Financial Guaranty Segment is primarily in the business of providing financial guaranty insurance on

12

public finance and asset-backed obligations. The FP Segment includes the GIC operations of the Company, which issues GICs to municipalities and other market participants. GICs provide for the return of principal and the payment of interest at pre-specified rates. Reflecting the manner in which the VIEs' operations are managed, the results of the VIEs have been included in the FP Segment beginning in the fourth quarter of 2006. The March 31, 2006 disclosures have been reclassified to conform to the 2007 presentation.

        The following tables summarize the financial information by segment as of and for the three months ended March 31, 2007 and 2006. The exclusions from pretax operating earnings are the fair value adjustments on insured derivatives and economic interest rate hedges.

Three Months Ended March 31, 2007

Financial
Guaranty
Financial
Products
Intersegment
Eliminations
Total

(in thousands)

Revenues:

External $ 155,595 $ 279,234 — $ 434,829

Intersegment 909 4,239 $ (5,148 ) —

Expenses:

External (56,677 ) (264,697 ) — (321,374 )

Intersegment (4,239 ) (909 ) 5,148 —

Less:

SFAS 133 fair-value adjustments for insured derivatives and economic interest rate hedges (13,206 ) 12 — (13,194 )

Pre-tax segment operating earnings 108,794 17,855 — 126,649

Segment assets $ 7,109,500 $ 19,564,959 $ (307,251 ) $ 26,367,208

Three Months Ended March 31, 2006

Financial
Guaranty
Financial
Products
Intersegment
Eliminations
Total

(in thousands)

Revenues:

External $ 191,174 $ 204,682 — $ 395,856

Intersegment 894 5,386 $ (6,280 ) —

Expenses:

External (52,642 ) (196,750 ) — (249,392 )

Intersegment (5,386 ) (894 ) 6,280 —

Less:

SFAS 133 fair-value adjustments for insured derivatives and economic interest rate hedges 29,164 (1,081 ) — 28,083

Pre-tax segment operating earnings $ 104,876 $ 13,505 $ — $ 118,381

13

        The following tables present reconciliations of the segments' pre-tax operating earnings to net income.

Three Months Ended March 31, 2007

Financial
Guaranty
Financial
Products
Intersegment
Eliminations
Total

(in thousands)

Pretax operating earnings $ 108,794 $ 17,855 — $ 126,649

SFAS 133 fair-value adjustments for insured derivatives and economic interest rate hedges (13,206 ) 12 — (13,194 )

Taxes (28,259 )

Net income $ 85,196

Three Months Ended March 31, 2006

Financial
Guaranty
Financial
Products
Intersegment
Eliminations
Total

(in thousands)

Pretax operating earnings $ 104,876 $ 13,505 — $ 118,381

SFAS 133 fair-value adjustments for insured derivatives and economic interest rate hedges 29,164 (1,081 ) — 28,083

Taxes (53,784 )

Minority interest 37,525

Net income $ 130,205

        The intersegment assets consist of intercompany notes issued by FSA and held within the FP Segment investment portfolio. The intersegment revenues and expenses relate to interest income and interest expense on intercompany notes and premiums paid by FSA Global on FSA-insured notes.

        The amount of SFAS 133 fair-value adjustments for insured derivatives is a reconciling item between pre-tax segment operating earnings and net income. In addition, management subtracts the impact of economic interest rate hedges when analyzing the segments. Marking the derivatives to fair value but not marking the hedged assets or liabilities causes one-sided accounting. By removing its effect, the measure will more closely reflect the underlying economic performance of segment operations.

10.    VARIABLE INTEREST ENTITIES

        On April 28, 2006, the Company increased its ownership of the ordinary shares of FSA Global from 29% to 49% through an acquisition of shares from an unaffiliated third party. Immediately thereafter, FSA Global's charter documents were amended to create a new class of nonvoting preference shares, which was issued to the Company. Holders of such preference shares have exclusive rights to any future dividends and, upon any winding up of FSA Global, all net assets available for distribution to shareholders (after a distribution of $250,000 to the ordinary shares). As a result of the issuance of such preference shares, (a) a substantive sale and purchase of an interest took place between the ordinary shareholders of FSA Global and the Company, resulting in an assessment and recording of the fair value of the assets and liabilities sold and purchased at the time of such

14

transaction, and (b) the Company's minority interest liability associated with FSA Global being eliminated. In the second quarter of 2006, the Company realized a pre-tax gain of $1.8 million as a result of this transaction.

11.    RECENTLY ISSUED ACCOUNTING STANDARDS

        On September 15, 2006, the FASB issued SFAS No. 157, "Fair Value Measurements" ("SFAS 157"), which addresses how companies should measure fair value when required to use fair value measures for recognition or disclosure purposes under GAAP. SFAS 157 adopted an "exit price" approach to determining fair value and set forth a three-level fair value hierarchy to prioritize the inputs used in valuation techniques. Level 1 is the highest priority and is defined as observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 is defined as inputs other than quoted prices included in Level 1 that are observable for the asset or liability through corroboration with observable market data. Level 3 is the lowest priority and is defined as a valuation based on unobservable inputs such as a company's own data. Prioritization of inputs, as well as other considerations, determine the level of disclosure required. SFAS 157 is applicable to financial statements issued for fiscal years beginning after November 15, 2007 and for interim periods within those fiscal years. The Company is in the process of evaluating the impact of SFAS 157 on its financial statements.

        In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities" ("SFAS 159"), which permits reporting entities to choose to measure at fair value many financial instruments and certain other items that are not currently required to be measured at fair value. The fair value option may be applied instrument by instrument, is applied only to entire instruments and not to portions of instruments and the election is irrevocable. SFAS 159 is effective for fiscal years beginning after November 15, 2007. Early adoption is permitted, under certain circumstances, provided the provisions of SFAS 157 are also applied. The Company is currently evaluating SFAS 159 and the implications for the Company's financial statements.

12.    COMMITMENTS AND CONTINGENCIES

        In the ordinary course of business, the Company and certain Subsidiaries are parties to litigation. The Company is not a party to any material pending litigation.

        On November 15, 2006, the Company received a subpoena from the Antitrust Division of the U.S. Department of Justice ("DOJ") issued in connection with an ongoing criminal investigation of bid rigging of awards of municipal GICs. On November 16, 2006, FSA received a subpoena from the Securities and Exchange Commission ("SEC") related to an ongoing industry-wide civil investigation of brokers of municipal GICs. The Company issues municipal GICs through the FP Segment, but does not serve as a GIC broker. The subpoenas request that the Company furnish to the DOJ and SEC records and other information with respect to the Company's municipal GIC business. The Company is cooperating with the investigations by the DOJ and SEC.

15

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

Overview

        Management's principal business objective is to grow the intrinsic value of the Company over the long term. To this end, it seeks to accumulate an insured portfolio of conservatively underwritten public finance and asset-backed obligations and attractively priced GICs in order to produce a reliable, predictable earnings stream. Strategically, the Company seeks to maintain balanced capabilities across domestic and international public finance and asset-backed markets in order to allow the flexibility to pursue the most attractive opportunities available at any point in the business cycle.

        To reflect accurately how management evaluates the Company's operations and progress toward long-term goals, this discussion employs both measures promulgated in accordance with accounting principles generally accepted in the United States of America ("GAAP measures") and measures not so promulgated ("non-GAAP measures"). Although the measures identified as non-GAAP in this discussion should not be considered substitutes for GAAP measures, management considers them key performance indicators and employs them in determining compensation. Non-GAAP measures therefore provide investors with important information about the way management analyzes its business and rewards performance.

        Unless otherwise noted, percentage changes in this discussion and analysis compare the period named with the comparable period of the prior year.

        For the first quarter of 2007, net income decreased 34.6% from $130.2 million to $85.2 million. Gross premiums written for the first quarter increased 18.5% to $149.4 million. Shareholders' equity increased 1.1% to $2.8 billion from December 31, 2006 after dividends of $30.5 million.

Results of Operations

Premiums

Net Earned and Written Premiums

Three Months Ended
March 31,

2007
2006

(in millions)

Premiums written, net of reinsurance $ 100.2 $ 88.7

Premiums earned, net of reinsurance 99.0 94.5

Net premiums earned excluding refundings and accelerations 84.0 85.4

New Business Production

        For each accounting period, the Company estimates the present value of originations ("PV originations"). This non-GAAP measure consists of the total present value of premiums originated ("PV premiums originated") by FSA and its subsidiaries and the present value of net interest margin originated ("PV NIM originated") by the FP Segment. The Company generated PV originations of $197.5 million in the three months ended March 31, 2007 and $126.5 million in the three months ended March 31, 2006. Management believes that, by disclosing the components of PV originations in addition to premiums written, the Company provides investors with a more comprehensive description of its new business activity in a given period.

Present Value of Premiums Originated

        The GAAP measure "gross premiums written" captures premiums collected and accrued in the period, whether collected for business originated in the period, or in installments for business

16

originated in prior periods. It is not a precise measure of current period originations because a significant portion of the Company's premiums are collected in installments. Therefore, to measure current period premium production, management calculates the gross present value of premium installments with respect to business originated in the accounting period and combines it with premiums received upfront with respect to business originated in the accounting period, which produces the non-GAAP measure "PV premiums originated."

        The Company's insurance policies, including insured derivatives, are generally non-cancelable and remain outstanding for years from date of inception, in some cases 30 years or longer. Accordingly, PV premiums originated, as distinct from earned premiums, represents premiums to be earned in the future.

        Viewed at a policy level, installment premiums are generally calculated as a fixed premium rate multiplied by the estimated or expected insured debt outstanding as of dates established by the terms of the policy. Because the actual installment premiums received could vary from the amount estimated at the time of origination based on variances in the actual versus estimated outstanding debt balances and foreign exchange rate fluctuations, the realization of PV premiums originated could be greater or less than the amount reported.

        Installment premiums are not recorded in the financial statements until due, which is a function of the terms of each insurance policy. Future installment premiums are not captured in premiums earned or premiums written, the most comparable GAAP measures. Management therefore uses PV premiums originated to measure current business production.

        PV premiums originated is a measure of gross origination activity, and does not reflect premiums ceded to reinsurers or the cost of insured derivatives or other credit protection, which may be considerable, employed by the Company to manage its credit exposures. PV premiums originated reflects estimated future installment premiums discounted to their present value, as well as upfront premiums, with respect to business originated during the period. To calculate PV premiums originated, management discounts an estimate of all future installment premium receipts. The Company calculates the discount rate for PV premiums originated as the average pre-tax yield on its insurance investment portfolio for the previous three years. This rate serves as a proxy for the return that could be achieved if the premiums had been received upfront. The estimated installment premium receipts are determined based on each installment policy's projected par balance outstanding multiplied by its premium rate. The Company's Transaction Oversight Groups estimate the relevant schedule of future par balances outstanding for each insurance policy with installment premiums. At the time of origination, projected debt schedules are generally based on good faith estimates developed and used by the parties negotiating the transaction.

        Year-to-year comparisons of PV premiums originated are affected by the application of a different discount rate applied to each vintage year. The discount rate employed by the Company for this purpose was 4.86% for 2007 originations and 5.07% for 2006 originations. Management intends to revise the discount rate in future years according to the same methodology, in order to reflect specific return results realized by the Company.

17

Reconciliation of Gross Premiums Written to Non-GAAP PV Premiums Originated

Three Months Ended
March 31,

2007
2006

(in millions)

Gross premiums written $ 149.4 $ 126.1

Gross installment premiums received (61.9 ) (55.3 )

Gross upfront premiums originated 87.5 70.8

Gross PV estimated installment premiums originated 83.2 40.7

Gross PV premiums originated $ 170.7 $ 111.5

Financial Guaranty Insurance Originations

        The tables below show the gross par amount insured and PV premiums originated in the Company's major business sectors for the periods indicated.

U.S. Public Finance Originations

Three Months Ended
March 31,

2007
2006

United States:

Gross par insured (in billions) $ 14.3 $ 7.3

Gross PV premiums originated (in millions) 74.0 54.3

International:

Gross par insured (in billions) $ 0.9 $ 1.6

Gross PV premiums originated (in millions) 16.7 28.2

        Total issuance in the U.S. municipal bond market reached approximately $107.0 billion in the first quarter, up 53% over first-quarter volume last year. Refundings nearly doubled and new-money issuance also increased substantially. Insurance penetration was approximately 52%, compared with 53% in the first quarter of 2006 and 49% for all of 2006. FSA insured approximately 25% of the par amount of insured new municipal bond issues sold in the first quarter of 2007 compared with 20% in the first quarter of 2006.

        Including both primary and secondary U.S. municipal obligations with closing dates in the first quarter, the par amount insured by FSA increased 94.1%, and PV premiums originated increased 36.2%. FSA maintained its focus on high-quality issues in core sectors that provide greater relative value, including general obligations, tax-supported bonds and water and sewer utility issues, and also insured an increased volume of education revenue bonds with primarily Double-A shadow ratings.

        In international public finance, first-quarter par insured decreased 42.7% and PV premiums decreased 40.9%. This was a modest quarter, following an exceptionally strong performance in 2006, and FSA has mandates for significant infrastructure transactions scheduled to close during 2007. Business closed in the quarter included utility, health care and municipal issues in the United Kingdom, Canada and Japan.

18

U.S. Asset-Backed Originations

Three Months Ended
March 31,

2007
2006

United States:

Gross par insured (in billions) $ 12.4 $ 4.3

Gross PV premiums originated (in millions) 64.4 25.9

International:

Gross par insured (in billions) $ 2.1 $ 3.6

Gross PV premiums originated (in millions) 15.6 3.1

        FSA's first-quarter U.S. asset-backed originations increased 191.6% in par insured and 149.1% in PV premiums originated. The majority of this business consisted of pooled corporate and residential mortgage-backed securities, where FSA began to see better opportunities due to a more credit-sensitive market. Writings in the mortgage sector included home equity line of credit securitizations, net interest margin (NIM) securitizations and Triple-A tranches of prime and subprime mortgage securitizations.

        Outside the United States, asset-backed PV premiums increased 414.9% despite a 42.2% decline in par volume originated. Although FSA insured a lower par volume of collateralized debt obligations, longer average lives resulted in increased CDO PV premium production. FSA also insured transactions in higher premium sectors, including insurance-linked and aircraft lease securitizations.

Financial Products Originations

        The FP Segment produces net interest margin ("FP NIM") rather than insurance premiums. Like installment premiums, the present value of FP NIM originated in a given period ("PV NIM originated") is expected to be earned and collected in future periods.

        FP Segment debt is issued at or converted into LIBOR-based floating-rate obligations, with proceeds invested in or converted into LIBOR-based floating-rate investments intended to result in profits from a higher investment rate than borrowing rate. The difference between the current period investment revenue and borrowing cost, net of the economic effect of derivatives used to hedge interest rate and currency risk, is the FP NIM.

        PV NIM originated represents the difference between the present value of estimated interest to be received on actual investments and the present value of estimated interest to be paid on liabilities issued by the FP Segment, net of transaction expenses and the expected results of derivatives used to hedge interest rate risk. In the first quarter of 2007, based on experience, management reduced its estimate of the adverse effect of transaction and hedging costs. The Company's future positive interest rate spread estimate generally relates to contracts or security instruments that extend for multiple years.

        Net interest income and net interest expense are reflected in the consolidated statements of operations and comprehensive income but are limited to current period earnings. As the GICs and the assets they fund extend beyond the current period, management considers the non-GAAP measure PV NIM originated to be a useful indicator of future FP NIM to be earned. PV of future NIM is also included in the non-GAAP measure adjusted book value ("ABV") as an element of intrinsic value that is not found in GAAP book value.

        GIC Affiliates issue GICs mainly to municipal issuers and for structured transactions. The majority of municipal GICs issued relate to debt service reserve funds and construction funds in support of municipal bond transactions. The majority of structured GICs serve as collateral for synthetic CDO transactions. The actual timing and amount of repayments may differ from the original estimates, which in turn would affect the realization of the estimate of PV NIM originated in a given accounting period.

19

Financial Products PV NIM Originated

Three Months Ended
March 31,

2007
2006

(in millions)

PV NIM originated $ 26.8 $ 15.0

        First-quarter PV NIM originated in the FP Segment increased 78.3% compared with the result in the first quarter of last year. The increase reflected the growth trend of the GIC portfolio, attractive investment opportunities arising from spread widening in the residential mortgage market and a change in the estimate of transaction and hedging costs reflected in the 2007 PV NIM estimate.

Operating Earnings and Adjusted Book Value

        In addition to evaluating the Company's GAAP financial information, management evaluates the Company's business under certain non-GAAP performance measures that management refers to as operating earnings and ABV. Management uses these two metrics to measure the Company's performance and to calculate long-term incentive compensation and the annual bonus pool. Management refers to this information in its presentations with rating agencies and the Board of Directors. While these metrics are not substitutes for reported results under GAAP, management regards operating earnings and ABV as meaningful indicators of operational performance that supplement the information available from GAAP measures.

        While GAAP provides a uniform comprehensive basis of accounting, management believes that operating earnings is an important additional measure for providing a more complete understanding of the Company's results of operations. The Company defines operating earnings as net income before the effects of fair-value adjustments for two items:

1.
Economic interest rate hedges, defined as interest rate derivatives that are intended to hedge fixed rate assets and liabilities but do not meet the criteria for hedge accounting treatment under SFAS 133, adjusted so that the impact of any residual hedge ineffectiveness remains in operating earnings; and

2.
Insured investment-grade derivatives, which refer to contracts that qualify as derivatives under SFAS 133 or SFAS 155 and therefore require changes in fair value to be recorded in the income statement. These contracts include FSA-insured CDS, insured interest rate swaps in certain public finance obligations and insured net interest margin ("NIM") securitizations.

        Periodic unrealized gains and losses related to economic interest rate hedges arise primarily in the FP Segment, caused primarily by marking derivatives to fair value without also marking the corresponding risks being hedged, as prescribed by SFAS 133 for derivatives that do not qualify for "hedge accounting treatment." Under the Company's definition of operating earnings, the economic effect of these hedges is recognized, which, for interest rate swaps, generally results in any cash paid or received being recognized ratably as an expense or revenue over the hedged item's life. Futures contracts used to hedge interest rate risk include both the embedded current net interest paid or received, as well as the value of the future net interest cash flow. Therefore, to reflect the equivalent of any cash paid or received being recognized ratably as an expense or revenue over the hedged item's life, the current interest accretion amounts embedded in the marks to fair value of open futures positions are added back to operating earnings.

        Insured derivatives are transactions that are entered into by the Company in the normal course of business and, for accounting purposes, qualify as derivatives under SFAS 133 and SFAS 155. A large majority of these derivatives are CDS, which are generally non-cancelable prior to maturity, and the Company views insured CDS risks as comparable to other insured risks. CDS transactions insured by

20

the Company generally reference either a specific security otherwise qualifying for FSA insurance or a pool of corporate or consumer debt securities or bank loans, structured such that the risk insured is investment grade without the benefit of the credit protection provided by the Company. In a typical CDS transaction, the Company, in exchange for an upfront or periodic premium, indemnifies the insured party for economic losses (in excess, in some cases, of an agreed-upon deductible) related to debt obligations of specified obligors, structured such that the risk insured is investment grade without the benefit of the credit protection provided by the Company. In the event a CDS were to migrate below investment grade, the fair-value impact would be fully reflected in operating earnings. Given the high credit quality of the CDS insured by FSA, management believes it is probable that the financial impact of the fair-value adjustments for the insured CDS will sum to zero over the finite terms of the exposures, which are typically five to ten years at inception. Notwithstanding this eventual outcome, sharp swings in the estimated fair value of the CDS portfolio may occur from quarter to quarter, as the credit spreads that drive the fair-value estimates are volatile.

        Operating earnings are subject to certain general and specific limitations that investors should carefully consider. For example, there is no comprehensive, authoritative guidance for management reporting. The Company's operating earnings is not a defined term within GAAP and may not be comparable to similarly titled measures reported by other companies. Unlike GAAP, the Company's operating earnings presentation does not represent a comprehensive basis of accounting. Investors, therefore, should not compare the Company's performance with that of other financial guaranty companies based upon operating earnings. Operating earnings results are meant only to supplement GAAP results by providing additional information regarding the operational and performance indicators management, the Company's Board of Directors and rating agencies follow to assess performance.

        Other limitations arise from the specific adjustments that management makes to GAAP results to derive operating earnings results. For example, in reversing the unrealized gains and losses that result from application of SFAS 133 to derivatives that do not qualify for hedge accounting, management focuses on the long-term economic effectiveness of those instruments relative to the underlying hedged item and isolates the effects of interest rate volatility and changing credit spreads on the fair value of such instruments during the period. Under GAAP, the effects of these factors on the fair value of the derivative instruments (but not the underlying hedged item) tend to show more volatility in the short term. While the Company believes that its presentation reflects the economic substance of its FP Segment, the presentation understates GAAP earnings volatility.

        Operating earnings also do not reflect earnings volatility related to insured derivative fair-value adjustments. A significant percentage of the Company's insured derivative exposures subject to fair-value adjustments are considered Triple-A or Super Triple-A (defined as credit quality based on loss protection greater than the Triple-A standard), and the Company does not intend to trade these highly rated, highly structured contracts. Accordingly, management believes it is probable that the financial impact of the fair-value adjustments for the insured derivative will sum to zero over the finite terms of the exposures, which are typically five to ten years at inception. For this reason, management believes that the market volatility of credit-spread pricing, the primary driver of the changes in insured derivative fair-value results, should not influence a measure of the Company's operating performance and therefore excludes insured derivative fair-value adjustments from operating earnings.

21

        For the first quarter of 2007, the Company's operating earnings increased 7.1% to $93.8 million. The following table reconciles net income to non-GAAP operating earnings:

Reconciliation of Net Income to Non-GAAP Operating Earnings

Three Months Ended
March 31,

2007
2006

(in millions)

Net income $ 85.2 $ 130.2

Less fair-value adjustments for economic interest rate hedges, net of taxes(1)(2) 0.0 23.6

Less fair value adjustments for investment-grade insured derivatives, net of taxes (8.6 ) 19.0

Operating earnings $ 93.8 $ 87.6

(1)
Hedge ineffectiveness remains in operating earnings. Also, see following table for a more detailed presentation of fair-value adjustments for economic interest rate hedges.

(2)
Balance for the first quarter of 2007 was less than $0.05 million.

Fair-Value Adjustments for Economic Interest Rate Hedges

Three Months Ended
March 31,

2007
2006

(in millions)

Fair-value adjustment for economic interest rate hedges $ 0.0 $ (1.1 )

VIE minority interest — 37.5

Tax effect 0.0 (12.8 )

Total fair-value adjustments for economic interest rate hedges $ 0.0 $ 23.6

Adjusted Book Value

        To calculate ABV, the following adjustments, on an after-tax basis, are made to shareholders' equity (GAAP "book value"):

1.
addition of unearned premium revenues, net of amounts ceded to reinsurers;

2.
addition of the present value of future installment premiums, net of amounts ceded to reinsurers;

3.
addition of the present value of future FP net interest margin ("PV future NIM");

4.
subtraction of the deferred costs of acquiring policies;

5.
elimination of fair-value adjustments for investment grade insured derivatives;

6.
elimination of the fair-value adjustments for economic interest rate hedges;

7.
elimination of unrealized gains or losses on investments; and

8.
International Financial Reporting Standards ("IFRS") adjustments.

        Management considers ABV an operating measure of the Company's intrinsic value. Book value includes an estimate of loss for all insured risks made at the time of contract origination. ABV adds

22

back certain GAAP liabilities and deducts certain GAAP assets (adjustments 1, 4, 5, 6 and 7 in the calculation above), and also captures the estimated value of future contractual cash flows related to transactions in force as of the balance sheet date (adjustments 2 and 3 in the calculation above) because installment payment contracts, whether in the form of future premiums or future NIM, are generally non-cancelable and represent a claim to future cash flows. Beginning in 2006, ABV also reflects certain IFRS adjustments in order to better align the interests of employees with the interests of Dexia S.A., the Company's principal shareholder, whose accounts are maintained under IFRS. An investor attempting to evaluate the Company using GAAP measures alone would not have the benefit of this information. In addition, investors may consider the growth of ABV to be a performance measure indicating the degree to which management has succeeded in building a reliable source of future earnings. Certain of the Company's compensation formulas are based, in part, on the ABV growth rate or ABV growth rate before IFRS adjustments.

        The limitations of the ABV metric are that it reflects the accelerated realization of certain assets and liabilities through equity and relies on an estimate of the amount and timing of the receipt of installment premiums and future net interest margin. Actual installment premium receipts could vary from the amount estimated due to differences between actual and estimated insured debt balances outstanding. Actual net interest margin results could vary from the amount estimated based on sales of investments prior to maturity and variances in the actual timing and amount of repayment associated with flexible-draw GICs that the Company issues. ABV excludes the fair-value adjustments for investment-grade insured derivatives and the effective portion of fair-value adjustments for derivatives that hedge interest rate risk but do not qualify for hedge accounting under SFAS 133.

        Adjustments 1, 2 and 3 above represent the sum of cumulative years' reported PV premiums originated and PV NIM originated, less what has been earned or adjusted due to changes in estimates as described above. PV of future net interest margin is adjusted for management's estimate of transaction and hedging related costs. In the first quarter of 2007, based on recent experience, management reduced its estimate of the adverse effect of such costs. Such change in estimates resulted in an increase to ABV of approximately $25 million at March 31, 2007. Adjustments 1 and 2 in the calculation of ABV represent unearned premiums that have been collected and the Company's best estimate of the present value of its future premium installments (comprising current- and prior-period originations that have not yet been earned). Debt schedules related to installment transactions can change from time to time. Critical assumptions underlying adjustment 2 are discussed above under "New Business Production—Financial Guaranty Insurance Originations."

        As discussed above under "New Business Production—Financial Products Originations," the Company calculates PV NIM originated (adjustment 3) because net interest income and net interest expense reflected in the consolidated statements of operations and comprehensive income are limited to current period earnings. The Company's future positive interest rate spread from outstanding FP Segment business can be estimated and generally relates to contracts or security instruments that extend for multiple years. Management therefore includes it in ABV as another element of intrinsic value not found in GAAP book value.

        Adjustment 4 reflects the realization of costs deferred and associated with premium origination.

        Through adjustments 5 and 6, the effect of certain items excluded from operating earnings is also excluded from ABV. As explained in the preceding discussion of operating earnings, management expects the financial impact of the insured derivative fair-value adjustments, reflected in adjustment 5, to sum to zero over the finite terms of the related exposures. Derivatives reflected in adjustment 6 reduce, on an economic basis, the interest rate risk of fixed rate assets and liabilities held in the FP Segment, which includes the FSA Global portfolio, although they do not meet SFAS 133 hedge-accounting requirements. The Company uses such derivatives to hedge against interest rate volatility, rather than to speculate on the direction of interest rates. The intent of management is to hold the derivatives to expected maturity along with the related hedged fixed-rate assets or liabilities. In

23

addition, through adjustment 7, ABV excludes the effect of fair-value adjustments made to investments and reflected in other comprehensive income. As the objective is to optimize long-term stable earnings, management generally seeks to minimize turnover and therefore any unrealized investment gain or loss is subtracted from book value to exclude it from the ABV metric. In the event that an investment is liquidated prior to its maturity, any related gain or loss is reflected in both earnings and ABV without further adjustment. Adjustment 8 reflects IFRS accounting treatment of items for which GAAP and IFRS treatments differ. These accounting differences relate primarily to foreign exchange, contingencies and fair-value adjustments.

        Shareholders' equity ("book value") was $2.8 billion and ABV was $4.0 billion at March 31, 2007. During the twelve month period ended March 31, 2007, after taking dividends into account, ABV (IFRS basis) grew 16.0%. The ABV growth rate would have been 15.3% without a change in the estimate of transaction and hedging costs that increased PV future NIM by approximately $25.0 million.

        The following table reconciles book value to non-GAAP ABV:

Reconciliation of Book Value to Non-GAAP Adjusted Book Value

March 31,
2007
December 31,
2006

(in millions)

Shareholders' equity (U.S. GAAP) $ 2,753.5 $ 2,722.3

After-tax adjustments:

Plus net unearned premium revenues 1,072.2 1,071.4

Plus PV future net installment premiums and PV future NIM 675.2 627.2

Less net deferred acquisition costs 224.1 221.4

Less fair-value adjustments for insured derivatives 49.4 58.0

Less fair-value of economic interest rate hedges 66.4 72.6

Less unrealized gains on investments 133.6 154.9

Adjusted book value before IFRS adjustments 4,027.4 3,914.0

IFRS adjustments 2.1 4.8

Adjusted book value (IFRS basis) $ 4,029.5 $ 3,918.8

Net Investment Income and Realized Gains

        Net investment income increased 8.8% to $57.7 million in the first quarter of 2007 over the prior year's first quarter results. The increase primarily reflects higher invested balances in the Company's investment portfolios. The Company's effective income tax rate on investment income (excluding the effects of realized gains and losses, FP Segment and assets acquired in refinancing transactions) for the first quarter was 12.2%, versus 13.2% for the comparable prior-year period.

        The Company has an investment in XL Financial Assurance Ltd ("XLFA") in the form of preferred shares. XLFA is a financial guaranty insurance subsidiary of XL Capital Ltd ("XL"). The Company accounts for its investment in XLFA as available-for-sale securities with changes in fair value reflected in OCI and with dividends declared or paid included in investment income. The fair value of the investment at March 31, 2007 was $39.0 million. In March 2006, the XLFA Board of Directors approved a by-law amendment changing the coupon on XLFA's preferred shares from a participating dividend based on an internal rate of return up to 19% to a fixed dividend of 8.25% per annum, effective January 1, 2006. Quarterly dividends were declared at this new rate commencing with the first quarter of 2006. Dividend income was $1.1 million for the three months ended March 31, 2007 and March 31, 2006. In addition, the Company received a $15.0 million dividend on March 30, 2007, which was recorded as a return of capital and therefore, reduced the carrying amount of the investment.

24

Losses and Loss Adjustment Expenses

        The Company recorded losses and LAE incurred of $4.4 million in the first quarter of 2007, compared with $3.3 million in the first quarter of 2006. The increase is primarily related to an increase in originations, which produce higher reserves, compared to that of the prior year's first quarter. Adjustments to reserves represent management's estimate of the amount required to cover the present value of the net cost of claims, based on statistical provisions in the case of new originations.

Reconciliation of Net Losses and Loss Adjustment Expenses

Non-Specific
Case
Total

(in millions)

December 31, 2006 $ 137.8 $ 53.0 $ 190.8

Incurred 4.4 — 4.4

Transfers (3.1 ) 3.1 —

Payments and other decreases — (0.8 ) (0.8 )

March 31, 2007 balance $ 139.1 $ 55.3 $ 194.4

        The gross and net par amounts outstanding on transactions with case reserves were $456.1 million and $375.6 million, respectively, at March 31, 2007. The net case reserves consisted primarily of five CDO risks and two municipal risks, which collectively accounted for approximately 94.8% of total net case reserves. The remaining eight case reserve exposures were in non-municipal sectors.

        Since case and non-specific reserves are based on estimates, there can be no assurance that the ultimate liabilities will not differ from such estimates. The Company will continue, on an ongoing basis, to monitor these reserves and may periodically adjust such reserves, upward or downward, based on the Company's revised estimated loss, actual loss experience, its mix of business and economic conditions.

        Management is aware that there are differences regarding the method of defining and measuring both case reserves and non-specific reserves among participants in the financial guaranty industry. Other financial guarantors may establish case reserves only after a default and use different techniques to estimate probable loss. Other financial guarantors may establish the equivalent of non-specific reserves, but refer to these reserves by various terms, such as, but not limited to, "unallocated losses," "active credit reserves" and "portfolio reserves," or may use different statistical techniques from those used by the Company to determine loss at a given point in time. In April 2007, the Financial Accounting Standards Board (the "FASB") published an exposure draft proposing new guidance for financial guaranty insurance accounting. This exposure draft proposes, among other things, changes to reserving and premium earnings methodologies. Based on management's current understanding of this exposure draft, the effect of these changes would be material to the financial statements if adopted.

Policy Acquisition Cost and Other Operating Expense

        For the first quarter, policy acquisition and other operating expenses decreased to $46.2 million from $47.5 million for the previous year's first quarter. These expenses include certain compensation expenses related primarily to the Company's deferred compensation plan and supplemental executive retirement plan, which are based on changes in the fair value of related investments and are perfectly offset by amounts in other income arising from marking to fair value the assets held to economically defease such obligations. Excluding such expenses, policy acquisition and other operating expenses were $44.0 million in the first quarter of 2007, compared with $41.6 million in last year's comparable period. The increase related primarily to lower deferral rates.

25

Financial Products Spread Portfolio Net Interest Margin

        FP spread portfolio NIM, a non-GAAP measure, is defined as the FP Segment net interest margin excluding variable interest entities net interest margin ("VIE NIM") and fair-value adjustments for economic interest rate hedges. FP spread portfolio NIM was $23.7 million for the first quarter of 2007 and $18.4 million for the first quarter of 2006. The increases in FP spread portfolio NIM were related primarily to growth in the GIC portfolio. FP spread portfolio NIM is comparable to FP operating NIM, which the Company reported for periods prior to December 31, 2006. Beginning in the fourth quarter of 2006, FP Segment reporting includes the results of VIEs, which formerly were reported in the financial guaranty segment.

        NIM shown in accordance with classifications required under GAAP on the consolidated statements of operations and comprehensive income ("Total NIM") is calculated as net interest income from the FP Segment, plus FP net realized gains (losses), less net interest expense from the FP Segment. Total NIM was $6.5 million for the first quarter of 2007 and $20.7 million for the first quarter of 2006 and primarily represents fixed rate liabilities (which are swapped to floating rate obligations) funding floating rate assets.

        The table below reconciles Total NIM with FP Segment NIM and FP spread portfolio NIM:

Reconciliation of Total NIM to Non-GAAP FP Spread Portfolio NIM

Three Months Ended
March 31,

2007
2006

(in millions)

Total NIM $ 6.5 $ 20.7

Realized interest income from and ineffectiveness on economic interest rate hedges 13.9 (6.6 )

Intersegment income related to refinanced transactions 4.2 5.4

FP Segment NIM 24.6 19.5

Less: VIE NIM(1) 0.9 1.1

FP spread portfolio NIM $ 23.7 $ 18.4

(1)
VIE NIM represents the impact of consolidation of the VIEs on the Total NIM.

        Net realized interest income and expense associated with derivatives in hedging relationships that do not qualify for hedge accounting are recorded in realized and unrealized gains and losses on derivative instruments and are added back to calculate FP spread portfolio NIM. Ineffectiveness related to derivatives that do not qualify for hedge accounting is added back to calculate FP spread portfolio NIM. Ineffectiveness is the difference between the unrealized gains and losses on derivatives and the unrealized gains and losses on hedged items. Unrealized gains and losses on derivatives that do not qualify for hedge accounting are shown under the caption net realized and unrealized gains (losses) on derivative instruments. Unrealized gains and losses on risks hedged with derivatives that do not qualify for hedge accounting are not recorded in income.

        Derivatives that qualify for hedge accounting are classified in the consolidated statements of operations and comprehensive income with the underlying item being hedged.

        Intersegment income relates primarily to intercompany notes held in the FP Segment investment portfolio, which are the assets supporting the GIC and VIE debt. In connection with the Company's refinancing transactions, FSA obtains funds from FP operations to fund claim payments, creating an interest bearing intercompany note. This intercompany note is included in the assets of the

26

FP Segment, with the related net interest income added to FP Segment NIM, but is eliminated from the consolidated Total NIM.

        VIE and FP net interest income are combined on the consolidated statements of operations and comprehensive income, as are VIE and FP net interest expense. VIE NIM pertains to the net interest margin derived from transactions executed by FSA Global and Premier. The VIE NIM relates to a passively managed portfolio, while the growing GIC portfolio is actively managed. Accordingly, the VIE NIM is shown separately from the FP spread portfolio NIM.

Net Realized and Unrealized Gains (Losses) on Derivative Instruments

        The components of net realized and unrealized gains (losses) on derivative instruments are shown in the table below:

Three Months Ended
March 31,

2007
2006

(in millions)

Net realized and unrealized gains (losses) on:

FP Segment derivatives $ 31.3 $ 28.3

Insured derivatives (13.2 ) 29.2

Other 0.3 0.3

Net realized and unrealized gains (losses) on derivative instruments $ 18.4 $ 57.8

Insured Derivatives

        Included in the Company's insured portfolio are certain contracts for which fair-value adjustments are recorded through the statement of operations and comprehensive income because they qualify as derivatives under SFAS 133 or SFAS 155. These contracts include FSA-insured CDS, insured interest rate swaps entered into in connection with the issuance of certain public finance obligations and NIM securitizations issued in connection with certain MBS financings. The Company considers all such agreements to be a normal extension of its financial guaranty insurance business, although they are considered derivatives for accounting purposes and therefore recorded at fair value.

        With respect to insured derivatives, FSA expects that these transactions will not be subject to a market value termination for which the Company would be liable. The Company recorded net earned premium under these agreements of $22.2 million for the three months ended March 31, 2007 and $22.5 million for the three months ended March 31, 2006.

        The Company's net par outstanding of $74.3 billion and $72.8 billion relating to CDS transactions at March 31, 2007 and December 31, 2006, respectively, are included in the asset-backed balances in Note 5 to the Consolidated Financial Statements in Item 1. The Company believes that the most meaningful presentation of the financial statement impact of these derivatives is to record earned premiums over the installment period and to record changes in fair value as incurred. Changes in fair value are recorded in net realized and unrealized gains (losses) on derivative instruments and in either other assets or other liabilities, as appropriate. The Company uses quoted market prices, when available, to determine fair value. If quoted market prices are not available, as is generally the case, the Company uses internally developed estimates of fair value. Management applies judgment when developing these estimates and considers factors such as current prices charged for similar agreements, performance of underlying assets, changes in internal shadow ratings, the level at which the deductible has been set and the Company's ability to obtain reinsurance for its insured obligations. Due to the

27

lack of a quoted market for the CDS obligations written by the Company, estimates generated from the Company's valuation process may differ materially from values that may be realized in market transactions. The Company does not believe that the fair value adjustments are an indication of potential claims under FSA's guarantees or an indication of potential gains or losses to be realized from the derivative transactions. The average remaining life of these contracts as of March 31, 2007 was 3.4 years. The inception-to-date gain on the balance sheet was $76.8 million at March 31, 2007 and $88.5 million at December 31, 2006 and is recorded in other assets.

        As of January 1, 2007, the Company implemented SFAS 155, which resulted in a mark-to-market loss of $1.2 million related to insured NIM securitizations. The change in fair value was a function of the market's adverse perception of mortgage-backed products. The Company does not believe that the fair value adjustments are an indication of potential claims under FSA's guarantees or an indication of potential gains or losses to be realized from the derivative transactions.

        The table below shows the changes in fair value of insured derivatives that are recorded in net realized and unrealized gains (losses) on derivative instruments in the consolidated statements of operations and comprehensive income:

Three Months Ended
March 31,

2007
2006

(in millions)

Insured derivatives:

CDS $ (11.7 ) $ 29.0

Interest rate swaps (0.3 ) 0.2

NIM securitizations (1.2 ) —

Total $ (13.2 ) $ 29.2

Income from Assets Acquired in Refinancing Transactions

        Income from assets acquired in refinancing transactions, excluding realized gains and losses, was $5.9 million for the three month period ended March 31, 2007 and $7.0 million for the three month period ended March 31, 2006. The decrease relates primarily to lower investment balances. The Company recorded $0.3 million in realized gains for the three month period ended March 31, 2007 and $0.7 million in realized gains for the three month period ended March 31, 2006. Realized gains and losses are generally a by-product of the investment management process for these refinancing transactions and may vary substantially from period to period. Any other-than-temporary impairments are also included in realized gains (losses) from assets acquired in refinancing transactions.

Taxes

        For the first three months of 2007 and 2006, the Company's effective tax rates were 24.9% and 29.2%, respectively. The prior year effective tax rate was higher that the current year due to higher fair value adjustments in income which were taxed at 35.0%. The 2007 and 2006 rates differ from the statutory rate of 35% primarily due to tax-exempt interest income. The Company adopted FIN 48 as of January 1, 2007. FIN 48 clarifies the accounting for uncertainty in income taxes in an entity's financial statements pursuant to FASB Statement No. 109, "Accounting for Income Taxes" and provides thresholds for recognizing and measuring benefits of a tax position taken or expected to be taken in a tax return. Consequently, the Company recognizes tax benefits only on tax positions where it is "more likely than not" to prevail. There was no impact on the Company's financial statements from adopting FIN 48. See Note 6 to the Consolidated Financial Statements in Item 1.

28

Liquidity and Capital Resources

        The Company's consolidated invested assets and cash at March 31, 2007, net of unsettled security transactions, were $21,851.7 million, compared with the December 31, 2006 balance of $21,261.4 million. These balances include the change in the fair value of the Company's various investment portfolios, which had an aggregate unrealized gain position of $202.3 million at March 31, 2007 and $333.1 million at December 31, 2006. These balances exclude assets in the VIE Investment Portfolio and assets acquired under refinancing transactions that management believes are beyond the reach of the Company and its creditors.

        Cash flow from operations was a cash outflow of $44.5 million for the three months ended March 31, 2007, compared to an outflow of $5.4 million for the three months ended March 31, 2006. The decrease in cash flows from operations was primarily attributable to purchases of trading portfolio assets, partially offset by higher premiums and net interest income from the FP Segment.

        At March 31, 2007, Financial Security Assurance Holdings Ltd. (as a separate holding company, "FSA Holdings") had cash and investments of $38.5 million available to fund the liquidity needs of its non-insurance operations. Because the majority of the Company's operations are conducted through FSA, the long-term ability of FSA Holdings to service its debt will largely depend on its receipt of dividends from, payment on surplus notes by, or repurchase of shares by, FSA.

        In its financial guaranty business, premiums and investment income are the Company's primary sources of funds to pay its operating expenses, insured losses and taxes. In its FP Segment, the Company relies on net interest income to fund its net interest expense and operating expenses. Management believes that the Company's operations provide sufficient liquidity to pay its obligations. If additional liquidity is needed or cash flow from operations significantly decreases, the Company can liquidate or utilize its investment portfolio as a source of funds in addition to its alternative liquidity arrangements, as discussed further below. The Company's cash flows from operations are heavily dependent on market conditions, the competitive environment and the mix of business originated. In addition, payments made in settlement of the Company's obligations in its insured portfolio may, and often do, vary significantly from year to year depending primarily on the frequency and severity of payment defaults and its decisions regarding whether to exercise its right to accelerate troubled insured transactions in order to mitigate future losses. In each of the two years reported, the Company has not drawn on alternative sources of liquidity to meet its obligations, except that the Company has refinanced certain transactions using funds raised through its GIC Affiliates and VIEs.

        FSA Holdings paid dividends of $30.5 million in the three month period ended March 31, 2007 and $32.5 million during the comparable period of 2006.

        FSA's ability to pay dividends depends, among other things, upon FSA's financial condition, results of operations, cash requirements and compliance with rating agency requirements for maintaining its Triple-A ratings, and is also subject to restrictions contained in the insurance laws and related regulations of New York and other states. Under the insurance laws of the State of New York (the "New York Insurance Law"), FSA may pay dividends out of earned surplus, provided that, together with all dividends declared or distributed by FSA during the preceding 12 months, the dividends do not exceed the lesser of (a) 10% of policyholders' surplus as of its last statement filed with the Superintendent of Insurance of the State of New York ("The New York Superintendent") or (b) adjusted net investment income during this period. FSA did not pay any dividends in the first three months of 2007 and paid $40.0 million of dividends in the first three months of 2006. Based on FSA's statutory statements for March 31, 2007, and considering dividends that can be paid by its subsidiary, the maximum amount normally available for payment of dividends by FSA without regulatory approval over the 12 months following March 31, 2007 is approximately $154.0 million.

29

        FSA may repurchase shares of its common stock from FSA Holdings subject to the New York Superintendent's approval. The New York Superintendent has approved the repurchase by FSA of up to $500.0 million of its shares from FSA Holdings through December 31, 2008. In 2006, FSA repurchased $100 million of shares of its common stock from FSA Holdings and in the first quarter of 2007, FSA repurchased $35 million of shares of its common stock and, in each case, it retired such shares.

        At March 31, 2007, FSA Holdings held $108.9 million of FSA surplus notes. Payments of principal and interest on such notes may be made only with the approval of the New York Superintendent. FSA paid $1.4 million in both the three months ended March 31, 2007 and March 31, 2006 in surplus note interest, and did not pay any principal. As of March 31, 2007 FSA has not sought or received permission to pay any further principal or interest on its surplus notes.

        FSA's primary uses of funds are to pay operating expenses and to pay dividends to, or pay interest or principal on surplus notes held by, or repurchase shares held by, its parent. FSA's funds are also required to satisfy claims under insurance policies in the event of default by an issuer of an insured obligation and the unavailability or exhaustion of other payment sources in the transaction, such as the cash flow or collateral underlying the obligations. FSA seeks to structure asset-backed transactions to address liquidity risks by matching insured payments with available cash flow or other payment sources. Insurance policies issued by FSA guaranteeing payments under bonds and other securities provide, in general, that payments of principal, interest and other amounts insured by FSA may not be accelerated by the holder of the obligation but are paid by FSA in accordance with the obligation's original payment schedule or, at FSA's option, on an accelerated basis. Insurance policies issued by FSA guaranteeing payments under CDS may provide for acceleration of amounts due upon the occurrence of certain credit events subject to single-risk limits specified in the New York insurance law. These policy provisions prohibiting or limiting acceleration of certain claims are mandatory under Article 69 of the New York Insurance Law and serve to reduce FSA's liquidity requirements.

        FSA has a credit arrangement aggregating $150.0 million, provided by commercial banks and intended for general application to transactions insured by FSA. If FSA is downgraded below Aa3 and AA-, the lenders may terminate the commitment and the commitment commission becomes due and payable. If FSA is downgraded below Baa3 and BBB-, any outstanding loans become due and payable. At March 31, 2007, there were no borrowings under this arrangement, which expires on April 21, 2011, if not extended.

        FSA has a standby line of credit in the amount of $350.0 million with a group of international banks to provide loans to FSA after it has incurred, during the term of the facility, cumulative municipal losses (net of any recoveries) in excess of the greater of $350.0 million or the average annual debt service of the covered portfolio multiplied by 5.00%, which amounted to $1,367.1 million at March 31, 2007. The obligation to repay loans under this agreement is a limited recourse obligation payable solely from, and collateralized by, a pledge of recoveries realized on defaulted insured obligations in the covered portfolio, including certain installment premiums and other collateral. This commitment has a ten-year term expiring on April 30, 2015 and contains an annual renewal provision, commencing April 30, 2008, subject to approval by the banks. A ratings downgrade of FSA would result in an increase in the commitment fee. No amounts have been utilized under this commitment as of March 31, 2007.

        In June 2003, $200.0 million of money market committed preferred trust securities (the "CPS Securities") were issued by trusts created for the primary purpose of issuing the CPS Securities, investing the proceeds in high-quality commercial paper and providing FSA with put options for issuing to the trusts non-cumulative redeemable perpetual preferred stock (the "Preferred Stock") of FSA. If FSA were to exercise a put option, the applicable trust would transfer the portion of the proceeds attributable to principal received upon maturity of its assets, net of expenses, to FSA in exchange for

30

Preferred Stock of FSA. FSA pays a floating put premium to the trusts. The cost of the puts were $0.2 million in the three months ended March 31, 2007 and 2006, and was recorded as other operating expense in the Company's Consolidated Financial Statements. The trusts are vehicles that provide FSA access to new capital at its sole discretion through the exercise of the put options. The Company does not consider itself to be the primary beneficiary of the trusts under Financial Accounting Standards Board Interpretation No. 46, "Consolidation of Variable Interest Entities, an interpretation of ARB No. 51" (revised December 2003) ("FIN 46-R") because it does not retain the majority of the residual benefits or expected losses.

        FSA-insured GICs subject the Company to risk associated with unexpected withdrawals of principal allowed by the terms of the GICs. The majority of municipal GICs insured by FSA relate to debt service reserve funds and construction funds in support of municipal bond transactions. Debt service reserve fund GICs may be drawn unexpectedly upon a payment default by the municipal issuer. Construction fund GICs may be drawn unexpectedly when construction of the underlying municipal project does not proceed as expected. In addition, most FSA-insured GICs allow for withdrawal of GIC funds in the event of a downgrade of FSA, typically below Aa3 by Moody's or AA- by S&P, unless the GIC provider posts collateral or otherwise enhances its credit. Some FSA-insured GICs also allow for withdrawal of GIC funds in the event of a downgrade of FSA, typically below A3 by Moody's Investors Service, Inc. ("Moody's") or A- by Standard & Poor's Ratings Services ("S&P"), with no right of the GIC provider to avoid such withdrawal by posting collateral or otherwise enhancing its credit. The Company manages this risk through the maintenance of liquid collateral and bank liquidity facilities.

        FSA Asset Management LLC ("FSAM") has a $100.0 million line of credit with UBS Loan Finance LLC, which expires December 7, 2007, unless extended. This line of credit provides an additional source of liquidity should there be unexpected draws on GICs issued by the GIC Affiliates. There were no borrowings under this arrangement at March 31, 2007. Borrowings under this agreement are conditioned on FSA having a Triple-A rating by either Moody's or S&P, and on neither Moody's nor S&P having issued a rating to FSA below Aa1 or AA+, respectively.

        Certain FSA Global debt issuances contain provisions that could extend the stated maturities of those notes. To ensure FSA Global will have sufficient cash flow to repay its funding requirements, it entered into four liquidity facilities with Dexia for amounts totaling $419.4 million.

Capital Adequacy

        S&P, Moody's and Fitch Ratings periodically make an assessment of FSA, which may include an assessment of the credits insured by FSA and of the reinsurers and other providers of capital support to FSA, to confirm that FSA continues to satisfy the rating agencies' capital adequacy criteria necessary to maintain FSA's Triple-A ratings. Capital adequacy assessments by the rating agencies are generally based on FSA's qualified statutory capital, which is the aggregate of policyholders' surplus and contingency reserves determined in accordance with statutory accounting principles.

        In the case of S&P, assessments of the credits insured by FSA are reflected in defined "capital charges," which are reduced by reinsurance and collateral to the extent "credit" is allowed for such reinsurance and collateral. Credit provided for reinsurance under the S&P capital adequacy model is generally a function of the S&P rating of the reinsurer and the qualification of the reinsurer as a "monoline" or "multi-line" company, as well as any collateral provided by the reinsurer. Capital charges on outstanding insured transactions and reinsurer ratings are subject to change by S&P at any time. The downgrade of a reinsurer by S&P from the Triple-A to the Double-A category results in a decline in the credit allowed for reinsurance by S&P from 100% or 95% to 70% or 65%, while a downgrade to the Single-A category results in 50% or 45% credit under present criteria. A downgrade by S&P of FSA's reinsurers would reduce the "margin of safety" by which FSA would survive a theoretical catastrophic depression modeled by S&P. A reduction by S&P in credit for reinsurance used

31

by FSA would also be expected ultimately to reduce the Company's return on equity to the extent that ceding commissions paid to FSA by such reinsurers were not increased to compensate for such reduction. FSA employs considerable reinsurance in its business to manage its single-risk exposures on insured credits. Any material increase in capital charges by S&P on FSA's insured portfolio would likewise be expected to have an adverse effect on FSA's margin of safety under the S&P capital adequacy model and, ultimately, the Company's return on equity. The Company may seek to raise additional capital to replenish capital eliminated by any of the rating agencies in their assessment of FSA's capital adequacy.

        Capital adequacy is one of the financial strength measures under Moody's financial guarantor model. The model uses a Monte Carlo distribution methodology and includes a penalty for risk concentration and recognizes a benefit for diversification. Moody's assesses capital adequacy by comparing FSA's claims-paying resources to a Moody's-derived probability of potential credit losses. Moody's loss distribution reflects FSA's current distribution of risk by sector, the credit quality of insured exposures, correlations that exist between transactions, the credit quality of FSA's reinsurers and the term to maturity of FSA's insured portfolio. The published results compare levels of theoretical loss in the tail of this distribution to various measures of FSA's claims-paying resources. Like S&P, Moody's allows FSA "credit" for reinsurance based upon Moody's rating of the reinsurer. Generally, 100% credit is allowed for Triple-A reinsurance, 80% to 90% credit is allowed for Double-A reinsurance and 40% to 60% credit is allowed for Single-A reinsurance.

        Fitch's Matrix model also uses a Monte Carlo distribution methodology, employing correlation factors and concentration factors. Its primary measure is the "Core Capital Adequacy Ratio," which is the ratio of claims paying resources adjusted by Fitch to reflect its view of their availability to the amount that it calculates (to a AAA level of confidence) would be required to pay claims. Fitch's Matrix model applies reinsurance credit on a transaction level based on Fitch's ratings of the provider, Fitch's correlation factor and the probability of a dispute over the claims, which probability varies depending on whether or not the reinsurer is a monoline.

Forward-Looking Statements

        The Company relies on the safe harbor for forward-looking statements provided by the Private Securities Litigation Reform Act of 1995. This safe harbor requires that the Company specify important factors that could cause actual results to differ materially from those contained in forward-looking statements made by or on behalf of the Company. Accordingly, forward-looking statements by the Company and its affiliates are qualified by reference to the following cautionary statements.

        In its filings with the Securities and Exchange Commission ("SEC"), reports to shareholders, press releases and other written and oral communications, the Company from time to time makes forward-looking statements. Such forward-looking statements include, but are not limited to:

•
projections of revenues, income (or loss), earnings (or loss) per share, dividends, market share or other financial forecasts;

•
statements of plans, objectives or goals of the Company or its management, including those related to growth in adjusted book value or return on equity; and

•
expected losses on, and adequacy of loss reserves for, insured transactions.

        Words such as "believes," "anticipates," "expects," "intends" and "plans" and similar expressions are intended to identify forward looking statements but are not the exclusive means of identifying such statements.

32

        The Company cautions that a number of important factors could cause actual results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in forward-looking statements made by the Company. These factors include:

•
changes in capital requirements or other criteria of securities rating agencies applicable to FSA;

•
competitive forces, including the conduct of other financial guaranty insurers;

•
changes in domestic or foreign laws or regulations applicable to the Company, its competitors or its clients;

•
changes in accounting principles or practices that may result in a decline in securitization transactions or effect the Company's reported financial results;

•
an economic downturn or other economic conditions (such as a rising interest rate environment) adversely affecting transactions insured by FSA or its General Investment Portfolio;

•
inadequacy of reserves established by the Company for losses and loss adjustment expenses;

•
disruptions in cash flow on FSA-insured structured transactions attributable to legal challenges to such structures;

•
downgrade or default of one or more of FSA's reinsurers;

•
market conditions, including the credit quality and market pricing of securities issued;

•
capacity limitations that may impair investor appetite for FSA-insured obligations;

•
market spreads and pricing on insured CDS exposures, which may result in gain or loss due to mark-to-market accounting requirements;

•
prepayment speeds on FSA-insured asset-backed securities and other factors that may influence the amount of installment premiums paid to FSA;

•
the risks discussed in "Item 1A. Risk Factors" of the Company's annual report on Form 10-K for the year ended December 31, 2006; and

•
other factors, most of which are beyond the Company's control.

        The Company cautions that the foregoing list of important factors is not exhaustive. In any event, such forward-looking statements made by the Company speak only as of the date on which they are made, and the Company does not undertake any obligation to update or revise such statements as a result of new information, future events or otherwise.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

        There has been no material change in the Company's market risk since December 31, 2006.

33

Item 4T. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

        The Company's management, with the participation of the Company's Chief Executive Officer and Chief Financial Officer, completed an evaluation of the effectiveness of the design and operation of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act of 1934, as amended) as of March 31, 2007. Based on that evaluation, the Company's management, including the Chief Executive Officer and the Chief Financial Officer, have concluded that as of such date the Company's disclosure controls and procedures were effective to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the rules and forms of the SEC and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, in a manner that allows timely decisions regarding required disclosure.

34

PART II—OTHER INFORMATION

Item 6. Exhibits.

(a)
Exhibits

Exhibit
No.
Exhibit

31.1 Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2

Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1

Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2

Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

99.1

Consolidated Financial Statements of Financial Security Assurance Inc. for the periods ended March 31, 2007 and 2006.

35

SIGNATURE

        Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.

Date: May 14, 2007

By:
/s/  LAURA A. BIELING

Name: Laura A. Bieling

Title: Managing Director & Controller
(Chief Accounting Officer)

36

Exhibit Index

Exhibit
No.
Exhibit

31.1

Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2

Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1

Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2

Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

99.1

Consolidated Financial Statements of Financial Security Assurance Inc. for the period ended March 31, 2007 and 2006.

37

QuickLinks
INDEX
PART I—FINANCIAL INFORMATION
FINANCIAL SECURITY ASSURANCE HOLDINGS LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (unaudited) (in thousands, except share data)
FINANCIAL SECURITY ASSURANCE HOLDINGS LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (unaudited) (in thousands)
FINANCIAL SECURITY ASSURANCE HOLDINGS LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (unaudited) (in thousands)
FINANCIAL SECURITY ASSURANCE HOLDINGS LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (in thousands)
FINANCIAL SECURITY ASSURANCE HOLDINGS LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
Reconciliation of Net Losses and Loss Adjustment Expenses
PART II—OTHER INFORMATION
SIGNATURE
Exhibit Index
-----END PRIVACY-ENHANCED MESSAGE-----



Mortgage Pass-Through Certificates
Mortgage Pass-Through Certificates
July 25, 2007 Distribution

Certificate Payment Report
Current Period Distribution -
			Prior						Current
			Prior

	Class	Original	Principal			Total	Realized	Deferred	Principal

Class	Type	Face Value	Balance	Interest	Principal	Distribution	Loss	Interest	Balance
			(1)	(2)	(3)	(4)=(2)+(3)	(5)	(6)	(7)=(1)-(3)-(5)+(6)
A-1-1	SR	168,288,000.00	168,288,000.00	668,477.33	643,782.89	1,312,260.22	0.00	0.00	167,644,217.11
A-1-1	SR	168,288,000.00	168,288,000.00	668,477.33	643,782.89	1,312,260.22	0.00	0.00	167,644,217.11
A-1-2	SR	70,119,000.00	70,119,000.00	278,528.25	268,239.05	546,767.30	0.00	0.00	69,850,760.95
A-2-1	SR	36,083,000.00	36,083,000.00	140,984.30	390,864.90	531,849.20	0.00	0.00	35,692,135.10
A-2-2	SR	32,955,000.00	32,955,000.00	130,904.58	0.00	130,904.58	0.00	0.00	32,955,000.00
A-2-3	SR	22,671,000.00	22,671,000.00	91,691.60	0.00	91,691.60	0.00	0.00	22,671,000.00
A-2-4	SR	10,465,000.00	10,465,000.00	42,551.85	0.00	42,551.85	0.00	0.00	10,465,000.00
A-3	SR	60,102,000.00	60,102,000.00	238,738.50	229,919.18	468,657.68	0.00	0.00	59,872,080.82
A-XPP	SR/CMB	0.00	0.00	827,846.28	0.00	827,846.28	0.00	0.00	0.00
B-1	SUB	7,601,000.00	7,601,000.00	31,675.06	11.18	31,686.24	0.00	0.00	7,600,988.82
B-2	SUB	6,081,000.00	6,081,000.00	25,780.06	8.95	25,789.01	0.00	0.00	6,080,991.05
B-3	SUB	1,737,000.00	1,737,000.00	7,740.27	2.56	7,742.83	0.00	0.00	1,736,997.44
B-4	SUB	2,606,000.00	2,606,000.00	11,894.94	3.83	11,898.77	0.00	0.00	2,605,996.17
B-5	SUB	1,738,000.00	1,738,000.00	8,246.81	2.56	8,249.37	0.00	0.00	1,737,997.44
B-6	SUB	1,303,000.00	1,303,000.00	6,418.00	1.92	6,419.92	0.00	0.00	1,302,998.08
B-7	SUB	1,303,000.00	1,303,000.00	6,888.53	1.92	6,890.45	0.00	0.00	1,302,998.08
B-8	SUB	1,303,000.00	1,303,000.00	6,888.53	1.92	6,890.45	0.00	0.00	1,302,998.08
B-9	SUB	1,303,000.00	1,303,000.00	6,888.53	1.92	6,890.45	0.00	0.00	1,302,998.08
B-10	SUB	2,823,000.00	2,823,000.00	15,452.54	4.15	15,456.69	0.00	0.00	2,822,995.85
B-11	SUB	3,475,000.00	3,475,000.00	19,021.45	5.11	19,026.56	0.00	0.00	3,474,994.89
B-12	SUB	2,388,676.46	2,388,676.46	13,075.14	3.51	13,078.65	0.00	0.00	2,388,672.95
L	EXE	0.00	0.00	47.56	0.00	47.56	0.00	0.00	0.00
C-X	EXE	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00
A-R	SR	100.00	100.00	0.55	100.00	100.55	0.00	0.00	0.00


Total		434,344,776.46	434,344,776.46	2,579,740.66	1,532,955.55	4,112,696.21	0.00	0.00	432,811,820.91
Total





Page 2 of 31

(Mark One)
ý	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2007
OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to

New York (State or other jurisdiction of incorporation or organization)		13-3261323 (I.R.S. Employer Identification No.)
31 West 52^nd Street New York, New York 10019 (Address of principal executive offices)
(212) 826-0100 (Registrant's telephone number, including area code)

		Page
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Financial Statements (unaudited)
	Financial Security Assurance Holdings Ltd. and Subsidiaries
	Consolidated Balance Sheets (unaudited)	1
	Consolidated Statements of Operations and Comprehensive Income (unaudited)	2
	Consolidated Statement of Changes in Shareholders' Equity (unaudited)	3
	Consolidated Statements of Cash Flows (unaudited)	4
	Notes to Consolidated Financial Statements (unaudited)	5
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	33
Item 4T.	Controls and Procedures	34
PART II. OTHER INFORMATION
Item 6.	Exhibits	35
SIGNATURES		36

			March 31, 2007			December 31, 2006
ASSETS
General investment portfolio:
	Bonds at fair value (amortized cost of $4,537,183 and $4,546,147)		$	4,699,463		$	4,721,512
	Equity securities at fair value (cost of $39,275 and $54,291)			39,321			54,325
	Short-term investments (cost of $89,414 and $96,055)			90,537			96,578
Financial products segment investment portfolio:
	Bonds at fair value (amortized cost of $17,341,154 and $16,692,183)			17,382,956			16,757,979
	Short-term investments			702,496			659,704
	Trading portfolio at fair value			214,028			119,424
Assets acquired in refinancing transactions:
	Bonds at fair value (amortized cost of $40,533 and $40,133)			41,699			41,051
	Securitized loans			229,661			241,785
	Other			53,608			55,036

		Total investment portfolio		23,453,769			22,747,394

Cash				37,529			32,471
Deferred acquisition costs				344,793			340,673
Prepaid reinsurance premiums				1,006,277			1,004,987
Reinsurance recoverable on unpaid losses				39,126			37,342
Other assets				1,485,714			1,610,759

	TOTAL ASSETS		$	26,367,208		$	25,773,626

LIABILITIES, MINORITY INTEREST AND SHAREHOLDERS' EQUITY
Deferred premium revenue			$	2,655,801		$	2,653,321
Losses and loss adjustment expenses				233,500			228,122
Financial products segment debt				18,814,436			18,349,665
Deferred federal income taxes				297,255			298,542
Notes payable				730,000			730,000
Accrued expenses, other liabilities and minority interest				882,733			791,664

	TOTAL LIABILITIES AND MINORITY INTEREST			23,613,725			23,051,314

COMMITMENTS AND CONTINGENCIES
Common stock (200,000,000 shares authorized; 33,517,995 issued; par value of $.01 per share)				335			335
Additional paid-in capital—common				906,687			906,687
Accumulated other comprehensive income (net of deferred income taxes of $73,452 and $86,119)				136,514			160,038
Accumulated earnings				1,709,947			1,655,252
Deferred equity compensation				19,225			19,225
Less treasury stock at cost (241,978 shares held)				(19,225	)		(19,225	)

	TOTAL SHAREHOLDERS' EQUITY			2,753,483			2,722,312

	TOTAL LIABILITIES, MINORITY INTEREST AND SHAREHOLDERS' EQUITY		$	26,367,208		$	25,773,626

			Three Months Ended March 31,
			2007			2006
REVENUES
	Net premiums written		$	100,200		$	88,732

	Net premiums earned		$	99,012		$	94,496
	Net investment income			57,709			53,046
	Net realized gains (losses)			(155	)		(918	)
	Net interest income from financial products segment			247,678			176,289
	Net realized gains (losses) from financial products segment			534			77
	Net realized and unrealized gains (losses) on derivative instruments			18,371			57,825
	Income from assets acquired in refinancing transactions			5,852			6,981
	Net realized gains (losses) from assets acquired in refinancing transactions			269			712
	Other income			5,559			7,348

TOTAL REVENUES				434,829			395,856

EXPENSES
	Losses and loss adjustment expenses			4,390			3,285
	Interest expense			11,584			6,748
	Policy acquisition costs			15,951			16,210
	Foreign exchange (gains) losses from financial products segment			17,504			36,185
	Net interest expense from financial products segment			241,683			155,660
	Other operating expenses			30,262			31,304

TOTAL EXPENSES				321,374			249,392

INCOME BEFORE INCOME TAXES AND MINORITY INTEREST				113,455			146,464
Provision (benefit) for income taxes:
		Current		16,879			11,779
		Deferred		11,380			42,005

		Total provision		28,259			53,784

NET INCOME BEFORE MINORITY INTEREST				85,196			92,680
	Less: Minority interest			—			(37,525	)

NET INCOME				85,196			130,205
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX
Unrealized gains (losses) arising during the period, net of deferred income tax provision (benefit) of $(12,339) and $(34,286)				(22,914	)		(64,179	)
Less: reclassification adjustment for gains (losses) included in net income, net of deferred income tax provision (benefit) of $328 and $(312)				610			(579	)

Other comprehensive income (loss)				(23,524	)		(63,600	)

COMPREHENSIVE INCOME			$	61,672		$	66,605

	Common Stock		Additional Paid-In Capital- Common		Accumulated Other Comprehensive Income			Accumulated Earnings			Deferred Equity Compensation		Treasury Stock			Total
BALANCE, December 31, 2006	$	335	$	906,687	$	160,038		$	1,655,252		$	19,225	$	(19,225	)	$	2,722,312
Net income for the year									85,196								85,196
Net change in accumulated other comprehensive income (net of deferred income tax provision (benefit) of ($12,667)						(23,524	)										(23,524	)
Dividends paid on common stock									(30,501	)							(30,501	)

BALANCE, March 31, 2007	$	335	$	906,687	$	136,514		$	1,709,947		$	19,225	$	(19,225	)	$	2,753,483

			Three Months Ended March 31,
			2007			2006
Cash flows from operating activities:
	Premiums received, net		$	77,982		$	36,073
	Policy acquisition and other operating expenses paid, net			(158,287	)		(132,000	)
	Salvage and subrogation			5			267
	Losses and loss adjustment expenses paid, net			(850	)		(1,464	)
	Net investment income received			58,324			51,900
	Federal income taxes paid			(6,914	)		(1,624	)
	Interest paid on notes payable			(6,758	)		(6,658	)
	Interest paid on financial products segment			(162,000	)		(130,176	)
	Interest received on financial products segment			227,438			153,235
	Financial products segment net derivative payments			14,096			14,220
	Income received from refinanced assets			4,132			5,829
	Purchases of trading portfolio securities			(98,772	)		—
	Other			7,126			4,990

		Net cash provided by (used for) operating activities		(44,478	)		(5,408	)

Cash flows from investing activities:
	Proceeds from sales of bonds in general investment portfolio			738,856			420,218
	Proceeds from maturities of bonds			60,132			36,706
	Purchases of bonds			(783,307	)		(451,712	)
	Net (increase) decrease in short-term investments			6,959			49,630
	Proceeds from sales of bonds in financial products segment			1,766,598			1,374,077
	Proceeds from maturities of bonds in financial products segment			830,183			218,592
	Purchases of bonds in financial products segment			(3,087,109	)		(1,582,351	)
	Securities purchased under agreements to resell			150,000			330,000
	Net (increase) decrease in financial products segment short-term investments			(42,792	)		(115,300	)
	Purchases of property, plant and equipment			(212	)		(1,018	)
	Paydowns of assets acquired in refinancing transactions			15,374			51,875
	Proceeds from sales of assets acquired in refinancing transactions			286			4,995
	Other investments			14,732			529

		Net cash provided by (used for) investing activities		(330,300	)		336,241

Cash flows from financing activities:
	Dividends paid			(30,501	)		(32,466	)
	Proceeds from issuance of financial products segment debt			1,236,509			713,362
	Repayment of financial products segment debt			(826,192	)		(1,028,242	)
	Capital issuance costs			(220	)		(233	)

		Net cash provided by (used for) financing activities		379,596			(347,579	)

Effect of changes in foreign exchange rates on cash balances				240			772

Net (decrease) increase in cash				5,058			(15,974	)
Cash at beginning of period				32,471			43,629

Cash at end of period			$	37,529		$	27,655

	Non- Specific			Case			Total
	(in millions)
December 31, 2006	$	137.8		$	53.0		$	190.8
Incurred		4.4			—			4.4
Transfers		(3.1	)		3.1			—
Payments and other decreases		—			(0.8	)		(0.8	)

March 31, 2007 balance	$	139.1		$	55.3		$	194.4

		Principal Amount
		(in millions)
2007		$	3,341.1
2008			1,699.1
2009			2,420.1
2010			2,571.6
2011			1,274.9
Thereafter			9,427.1

	Total	$	20,733.9

			Net Par Outstanding				Ceded Par Outstanding
			March 31, 2007		December 31, 2006		March 31, 2007		December 31, 2006
			(in millions)
Domestic obligations
	General obligation		$	106,685	$	103,112	$	28,668	$	28,143
	Tax-supported			47,159		46,479		18,730		18,733
	Municipal utility revenue			41,561		40,495		13,656		13,367
	Health care revenue			13,303		13,155		10,462		10,144
	Housing revenue			7,441		7,576		1,954		2,039
	Transportation revenue			16,253		16,164		10,322		10,337
	Education			4,754		4,378		1,606		1,027
	Other domestic public finance			1,615		1,628		506		509
International obligations				18,576		18,306		15,034		14,554

		Total public finance obligations	$	257,347	$	251,293	$	100,938	$	98,853

		March 31, 2007		December 31, 2006
		(in thousands)
Other assets:
	Fair value of VIE swaps	$	513,675	$	516,762
	Fair-value adjustment of insured derivatives		75,989		89,195
	VIE other invested assets		161,740		157,810
	Securities purchased under agreements to resell		—		150,000
	Deferred compensation trust		121,388		114,181
	Tax and loss bonds		128,917		127,150
	Accrued interest on VIE swaps		156,533		136,975
	Accrued interest income		95,721		92,951
	Other assets		231,751		225,735

Total other assets		$	1,485,714	$	1,610,759

		March 31, 2007		December 31, 2006
		(in thousands)
Accrued expenses, other liabilities and minority interest:
	Payable for securities purchased	$	178,254	$	33,046
	Deferred compensation trust		121,388		114,181
	Equity participation plan		62,398		112,688
	Accrued interest on FP GICs		122,919		124,856
	Fair-value adjustment of derivatives		49,031		33,230
	Other liabilities		348,493		373,413
	Minority interest in VIE's		250		250

Total accrued expenses, other liabilities and minority interest		$	882,733	$	791,664

		Three Months Ended March 31, 2007
		Financial Guaranty			Financial Products			Intersegment Eliminations			Total
		(in thousands)
Revenues:
	External	$	155,595		$	279,234			—		$	434,829
	Intersegment		909			4,239		$	(5,148	)		—
Expenses:
	External		(56,677	)		(264,697	)		—			(321,374	)
	Intersegment		(4,239	)		(909	)		5,148			—
Less:
	SFAS 133 fair-value adjustments for insured derivatives and economic interest rate hedges		(13,206	)		12			—			(13,194	)

Pre-tax segment operating earnings			108,794			17,855			—			126,649

Segment assets		$	7,109,500		$	19,564,959		$	(307,251	)	$	26,367,208

	Three Months Ended March 31,
	2007		2006
United States:
Gross par insured (in billions)	$	14.3	$	7.3
Gross PV premiums originated (in millions)		74.0		54.3
International:
Gross par insured (in billions)	$	0.9	$	1.6
Gross PV premiums originated (in millions)		16.7		28.2

			March 31, 2007		December 31, 2006
			(in millions)
Shareholders' equity (U.S. GAAP)			$	2,753.5	$	2,722.3
After-tax adjustments:
	Plus net unearned premium revenues			1,072.2		1,071.4
	Plus PV future net installment premiums and PV future NIM			675.2		627.2
	Less net deferred acquisition costs			224.1		221.4
	Less fair-value adjustments for insured derivatives			49.4		58.0
	Less fair-value of economic interest rate hedges			66.4		72.6
	Less unrealized gains on investments			133.6		154.9

Adjusted book value before IFRS adjustments				4,027.4		3,914.0
	IFRS adjustments			2.1		4.8

		Adjusted book value (IFRS basis)	$	4,029.5	$	3,918.8

Exhibit No.		Exhibit
31.1		Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
99.1		Consolidated Financial Statements of Financial Security Assurance Inc. for the periods ended March 31, 2007 and 2006.

	FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.
Date: May 14, 2007	By:	/s/ LAURA A. BIELING
	Name:	Laura A. Bieling
	Title:	Managing Director & Controller (Chief Accounting Officer)