Standard & Poors Glossary of Common Business and Financial Terms

Table of Contents

Standard & Poors Ratings Definitions....1

Issue Credit Ratings ..1

Issuer Credit Ratings..4

Corporate Methodology...7

Ratios and Adjustments ..10

Banking..............................................................................................................................12

Insurance.14

Sovereign.18

Non U.S. Local & Regional Government20

Group Methodology ...23

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Standard & Poors Business and Financial Terms July 2014
Standard & Poors Glossary of Common Business and Financial Terms

To See All of Standard & Poors Criteria, please use this link to Ratings Criteria

Standard & Poor's Ratings Definitions (Source: Standard & Poors Ratings Definitions Mar, 21
2014)

Issue Credit Ratings: A Standard & Poor's issue credit rating is a forward-looking opinion about the
creditworthiness of an obligor with respect to a specific financial obligation, a specific class of financial
obligations, or a specific financial program (including ratings on medium-term note programs and
commercial paper programs). It takes into consideration the creditworthiness of guarantors, insurers, or
other forms of credit enhancement on the obligation and takes into account the currency in which the
obligation is denominated. The opinion reflects Standard & Poor's view of the obligor's capacity and
willingness to meet its financial commitments as they come due, and may assess terms, such as
collateral security and subordination, which could affect ultimate payment in the event of default.

Issue credit ratings can be either long-term or short-term. Short-term ratings are generally assigned to
those obligations considered short-term in the relevant market. In the U.S., for example, that means
obligations with an original maturity of no more than 365 daysincluding commercial paper. Short-term
ratings are also used to indicate the creditworthiness of an obligor with respect to put features on long-
term obligations. Medium-term notes are assigned long-term ratings.

Long-Term Issue Credit Ratings: Issue credit ratings are based, in varying degrees, on Standard &
Poor's analysis of the following considerations:

Likelihood of paymentcapacity and willingness of the obligor to meet its financial commitment on an
obligation in accordance with the terms of the obligation;

Nature of and provisions of the obligation; and the promise we impute.

Protection afforded by, and relative position of, the obligation in the event of bankruptcy, reorganization,
or other arrangement under the laws of bankruptcy and other laws affecting creditors' rights.

Issue ratings are an assessment of default risk, but may incorporate an assessment of relative seniority or
ultimate recovery in the event of default. Junior obligations are typically rated lower than senior
obligations, to reflect the lower priority in bankruptcy, as noted above. (Such differentiation may apply
when an entity has both senior and subordinated obligations, secured and unsecured obligations, or
operating company and holding company obligations.)

Long-Term Issue Credit Ratings*

Category Definition

AAA An obligation rated 'AAA' has the highest rating assigned by Standard & Poor's. The obligor's
capacity to meet its financial commitment on the obligation is extremely strong.

AA An obligation rated 'AA' differs from the highest-rated obligations only to a small degree. The obligor's
capacity to meet its financial commitment on the obligation is very strong.

An obligation rated 'A' is somewhat more susceptible to the adverse effects of changes in circumstances
and economic conditions than obligations in higher-rated categories. However, the obligor's capacity to
meet its financial commitment on the obligation is still strong.

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Standard & Poors Business and Financial Terms July 2014
BBB An obligation rated 'BBB' exhibits adequate protection parameters. However, adverse economic
conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to
meet its financial commitment on the obligation.

BB; B; CCC; CC; and C Obligations rated 'BB', 'B', 'CCC', 'CC', and 'C' are regarded as having significant
speculative characteristics. 'BB' indicates the least degree of speculation and 'C' the highest. While such
obligations will likely have some quality and protective characteristics, these may be outweighed by large
uncertainties or major exposures to adverse conditions.

BB An obligation rated 'BB' is less vulnerable to nonpayment than other speculative issues. However, it
faces major ongoing uncertainties or exposure to adverse business, financial, or economic conditions
which could lead to the obligor's inadequate capacity to meet its financial commitment on the obligation.

B An obligation rated 'B' is more vulnerable to nonpayment than obligations rated 'BB', but the obligor
currently has the capacity to meet its financial commitment on the obligation. Adverse business, financial,
or economic conditions will likely impair the obligor's capacity or willingness to meet its financial
commitment on the obligation.

CCC An obligation rated 'CCC' is currently vulnerable to nonpayment, and is dependent upon favorable
business, financial, and economic conditions for the obligor to meet its financial commitment on the
obligation. In the event of adverse business, financial, or economic conditions, the obligor is not likely to
have the capacity to meet its financial commitment on the obligation.

CC An obligation rated 'CC' is currently highly vulnerable to nonpayment. The 'CC' rating is used when a
default has not yet occurred, but Standard & Poor's expects default to be a virtual certainty, regardless of
the anticipated time to default.

C An obligation rated 'C' is currently highly vulnerable to nonpayment, and the obligation is expected to
have lower relative seniority or lower ultimate recovery compared to obligations that are rated higher.

D An obligation rated 'D' is in default or in breach of an imputed promise. For non-hybrid capital
instruments, the 'D' rating category is used when payments on an obligation are not made on the date
due, unless Standard & Poor's believes that such payments will be made within five business days in the
absence of a stated grace period or within the earlier of the stated grace period or 30 calendar days. The
'D' rating also will be used upon the filing of a bankruptcy petition or the taking of similar action and where
default on an obligation is a virtual certainty, for example due to automatic stay provisions. An obligation's
rating is lowered to 'D' if it is subject to a distressed exchange offer.

NR This indicates that no rating has been requested, or that there is insufficient information on which to
base a rating, or that Standard & Poor's does not rate a particular obligation as a matter of policy.

*The ratings from 'AA' to 'CCC' may be modified by the addition of a plus (+) or minus (-) sign to show
relative standing within the major rating categories.

Short-Term Issue Credit Ratings

Category Definition

A-1 A short-term obligation rated 'A-1' is rated in the highest category by Standard & Poor's. The obligor's
capacity to meet its financial commitment on the obligation is strong. Within this category, certain
obligations are designated with a plus sign (+). This indicates that the obligor's capacity to meet its
financial commitment on these obligations is extremely strong.

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Standard & Poors Business and Financial Terms July 2014
A-2 A short-term obligation rated 'A-2' is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than obligations in higher rating categories. However, the
obligor's capacity to meet its financial commitment on the obligation is satisfactory.

A-3 A short-term obligation rated 'A-3' exhibits adequate protection parameters. However, adverse
economic conditions or changing circumstances are more likely to lead to a weakened capacity of the
obligor to meet its financial commitment on the obligation.

B A short-term obligion rated 'B' is regarded as vulnerable and has significant speculative characteristics.
The obligor currently has the capacity to meet its financial commitments; however, it faces major ongoing
uncertainties which could lead to the obligor's inadequate capacity to meet its financial commitments.

C A short-term obligation rated 'C' is currently vulnerable to nonpayment and is dependent upon favorable
business, financial, and economic conditions for the obligor to meet its financial commitment on the
obligation.

D A short-term obligation rated 'D' is in default or in breach of an imputed promise. For non-hybrid capital
instruments, the 'D' rating category is used when payments on an obligation are not made on the date
due, unless Standard & Poor's believes that such payments will be made within any stated grace period.
However, any stated grace period longer than five business days will be treated as five business days.
The 'D' rating also will be used upon the filing of a bankruptcy petition or the taking of a similar action and
where default on an obligation is a virtual certainty, for example due to automatic stay provisions. An
obligation's rating is lowered to 'D' if it is subject to a distressed exchange offer.

Issuer Credit Ratings: A Standard & Poor's issuer credit rating is a forward-looking opinion about an
obligor's overall creditworthiness. This opinion focuses on the obligor's capacity and willingness to meet
its financial commitments as they come due. It does not apply to any specific financial obligation, as it
does not take into account the nature of and provisions of the obligation, its standing in bankruptcy or
liquidation, statutory preferences, or the legality and enforceability of the obligation.

Counterparty credit ratings, corporate credit ratings and sovereign credit ratings are all forms of issuer
credit ratings.

Issuer credit ratings can be either long-term or short-term.

Long-Term Issuer Credit Ratings

Category Definition

AAA An obligor rated 'AAA' has extremely strong capacity to meet its financial commitments. 'AAA' is the
highest issuer credit rating assigned by Standard & Poor's.

AA An obligor rated 'AA' has very strong capacity to meet its financial commitments. It differs from the
highest-rated obligors only to a small degree.

An obligor rated 'A' has strong capacity to meet its financial commitments but is somewhat more
susceptible to the adverse effects of changes in circumstances and economic conditions than obligors in
higher-rated categories.

BBB An obligor rated 'BBB' has adequate capacity to meet its financial commitments. However, adverse
economic conditions or changing circumstances are more likely to lead to a weakened capacity of the
obligor to meet its financial commitments.

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Standard & Poors Business and Financial Terms July 2014
BB; B; CCC; and CC Obligors rated 'BB', 'B', 'CCC', and 'CC' are regarded as having significant
speculative characteristics. 'BB' indicates the least degree of speculation and 'CC' the highest. While such
obligors will likely have some quality and protective characteristics, these may be outweighed by large
uncertainties or major exposures to adverse conditions.

BB An obligor rated 'BB' is less vulnerable in the near term than other lower-rated obligors. However, it
faces major ongoing uncertainties and exposure to adverse business, financial, or economic conditions
which could lead to the obligor's inadequate capacity to meet its financial commitments.

B An obligor rated 'B' is more vulnerable than the obligors rated 'BB', but the obligor currently has the
capacity to meet its financial commitments. Adverse business, financial, or economic conditions will likely
impair the obligor's capacity or willingness to meet its financial commitments.

CCC An obligor rated 'CCC' is currently vulnerable, and is dependent upon favorable business, financial,
and economic conditions to meet its financial commitments.

CC An obligor rated 'CC' is currently highly vulnerable. The 'CC' rating is used when a default has not yet
occurred, but Standard & Poor's expects default to be a virtual certainty, regardless of the anticipated
time to default.

R An obligor rated 'R' is under regulatory supervision owing to its financial condition. During the pendency
of the regulatory supervision the regulators may have the power to favor one class of obligations over
others or pay some obligations and not others.

SD and D An obligor rated 'SD' (selective default) or 'D' is in default on one or more of its financial
obligations including rated and unrated financial obligations but excluding hybrid instruments classified as
regulatory capital or in non-payment according to terms. An obligor is considered in default unless
Standard & Poor's believes that such payments will be made within five business days of the due date in
the absence of a stated grace period, or within the earlier of the stated grace period or 30 calendar days.
A 'D' rating is assigned when Standard & Poor's believes that the default will be a general default and that
the obligor will fail to pay all or substantially all of its obligations as they come due. An 'SD' rating is
assigned when Standard & Poor's believes that the obligor has selectively defaulted on a specific issue or
class of obligations but it will continue to meet its payment obligations on other issues or classes of
obligations in a timely manner. An obligor's rating is lowered to 'D' or 'SD' if it is conducting a distressed
exchange offer.

NR An issuer designated 'NR' is not rated.

*The ratings from 'AA' to 'CCC' may be modified by the addition of a plus (+) or minus (-) sign to show
relative standing within the major rating categories.

Short-Term Issuer Credit Ratings

Category Definition

A-1 An obligor rated 'A-1' has strong capacity to meet its financial commitments. It is rated in the highest
category by Standard & Poor's. Within this category, certain obligors are designated with a plus sign (+).
This indicates that the obligor's capacity to meet its financial commitments is extremely strong.

A-2 An obligor rated 'A-2' has satisfactory capacity to meet its financial commitments. However, it is
somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions
than obligors in the highest rating category.

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Standard & Poors Business and Financial Terms July 2014
A-3 An obligor rated 'A-3' has adequate capacity to meet its financial obligations. However, adverse
economic conditions or changing circumstances are more likely to lead to a weakened capacity of the
obligor to meet its financial commitments.

B An obligor rated 'B' is regarded as vulnerable and has significant speculative characteristics. The
obligor currently has the capacity to meet its financial commitments; however, it faces major ongoing
uncertainties which could lead to the obligor's inadequate capacity to meet its financial commitments.

C An obligor rated 'C' is currently vulnerable to nonpayment that would result in a 'SD' or 'D' issuer rating,
and is dependent upon favorable business, financial, and economic conditions for it to meet its financial
commitments.

R An obligor rated 'R' is under regulatory supervision owing to its financial condition. During the pendency
of the regulatory supervision the regulators may have the power to favor one class of obligations over
others or pay some obligations and not others.

SD and D An obligor rated 'SD' (selective default) or 'D' has failed to pay one or more of its financial
obligations (rated or unrated), excluding hybrid instruments classified as regulatory capital or in
nonpayment according to terms, when it came due. An obligor is considered in default unless Standard &
Poor's believes that such payments will be made within any stated grace period. However, any stated
grace period longer than five business days will be treated as five business days. A 'D' rating is assigned
when Standard & Poor's believes that the default will be a general default and that the obligor will fail to
pay all or substantially all of its obligations as they come due. An 'SD' rating is assigned when Standard &
Poor's believes that the obligor has selectively defaulted on a specific issue or class of obligations,
excluding hybrid instruments classified as regulatory capital, but it will continue to meet its payment
obligations on other issues or classes of obligations in a timely manner. An obligor's rating is lowered to
'D' or 'SD' if it is conducting a distressed exchange offer.

NR An issuer designated 'NR' is not rated.

CREDITWATCH, RATING OUTLOOK, LOCAL CURRENCY AND FOREIGN CURRENCY RATINGS

CreditWatch: CreditWatch highlights our opinion regarding the potential direction of a short-term or long-
term rating. It focuses on identifiable events and short-term trends that cause ratings to be placed under
special surveillance by Standard & Poor's analytical staff. Ratings may be placed on CreditWatch under
the following circumstances:

When an event has occurred or, in our view, a deviation from an expected trend has occurred or is
expected and when additional information is necessary to evaluate the current rating. Events and short-
term trends may include mergers, recapitalizations, voter referendums, regulatory actions, performance
deterioration of securitized assets, or anticipated operating developments.

When we believe there has been a material change in performance of an issue or issuer, but the
magnitude of the rating impact has not been fully determined, and we believe that a rating change is likely
in the short-term.

A change in criteria has been adopted that necessitates a review of an entire sector or multiple
transactions and we believe that a rating change is likely in the short-term.

A CreditWatch listing, however, does not mean a rating change is inevitable, and when appropriate, a
range of potential alternative ratings will be shown. CreditWatch is not intended to include all ratings

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Standard & Poors Business and Financial Terms July 2014
under review, and rating changes may occur without the ratings having first appeared on CreditWatch.
The "positive" designation means that a rating may be raised; "negative" means a rating may be lowered;
and "developing" means that a rating may be raised, lowered, or affirmed.

Rating Outlooks: A Standard & Poor's rating outlook assesses the potential direction of a long-term
credit rating over the intermediate term (typically six months to two years). In determining a rating outlook,
consideration is given to any changes in the economic and/or fundamental business conditions. An
outlook is not necessarily a precursor of a rating change or future CreditWatch action.

Positive means that a rating may be raised.

Negative means that a rating may be lowered.

Stable means that a rating is not likely to change.

Developing means a rating may be raised or lowered.

N.M. means not meaningful.

Local Currency and Foreign Currency Ratings: Standard & Poor's issuer credit ratings make a
distinction between foreign currency ratings and local currency ratings. An issuer's foreign currency rating
will differ from its local currency rating when the obligor has a different capacity to meet its obligations
denominated in its local currency, vs. obligations denominated in a foreign currency.

Corporate Methodology (Source: Corporate Methodology, 19 November 2013)

Anchor: The combination of an issuer's business risk profile assessment and its financial risk profile
assessment determine the anchor. Additional rating factors can then modify the anchor to determine the
final rating or SACP.

Asset profile: A descriptive way to look at the types and quality of assets that comprise a company
(examples can include tangible versus intangible assets, those assets that require large and continuing
maintenance, upkeep, or reinvestment, etc.).

Business risk profile: This measure comprises the risk and return potential for a company in the market
in which it participates, the country risks within those markets, the competitive climate, and the
competitive advantages and disadvantages the company has. The criteria combine the assessments for
Corporate Industry and Country Risk Assessment (CICRA), and competitive position to determine a
company's business risk profile assessment.

Capital-intensive company: A company exhibiting large ongoing capital spending to sales, or a large
amount of depreciation to sales. Examples of capital-intensive sectors include oil production and refining,
telecommunications, and transportation sectors such as railways and airlines.

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Standard & Poors Business and Financial Terms July 2014
Cash available for debt repayment: Forecast cash available for debt repayment is defined as the net
change in cash for the period before debt borrowings and debt repayments. This includes forecast
discretionary cash flow adjusted for our expectations of: share buybacks, net of any share issuance, and
M&A. Discretionary cash flow is defined as cash flow from operating activities less capital expenditures
and total dividends.

Competitive position: Our assessment of a company's: 1) competitive advantage; 2) operating

efficiency; 3) scale, scope, and diversity; and 4) profitability.

Competitive advantage--The strategic positioning and attractiveness to customers of the

company's products or services, and the fragility or sustainability of its business model.

Operating efficiency--The quality and flexibility of the company's asset base and its cost
management and structure.

Scale, scope, and diversity--The concentration or diversification of business activities.

Profitability--Our assessment of both the company's level of profitability and volatility of

profitability.

Competitive Position Group Profile (CPGP): Used to determine the weights to be assigned to the three
components of competitive position other than profitability. While industries are assigned to one of the six
profiles, individual companies and industry subsectors can be classified into another CPGP because of
unique characteristics. Similarly, national industry risk factors can affect the weighing.

The six CPGPs are: Services and product focus, Product focus/scale driven, Capital or asset focus,
Commodity focus/cost driven, Commodity focus/scale driven, and National industry and utilities.

Conglomerate: Companies that have at least three distinct business segments, each contributing
between 10%-50% of EBITDA or FOCF. Such companies may benefit from the diversification/portfolio
effect.

Controlling shareholders: Equity owners who are able to affect decisions of varying effect on
operations, leverage, and shareholder reward without necessarily being a majority of shareholders.

Corporate Industry and Country Risk Assessment (CICRA): The result of the combination of an
issuer's country risk assessment and industry risk assessment.

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Standard & Poors Business and Financial Terms July 2014
Debt co-insurance: The view that the joining-together of two or more firms whose earnings streams are
less-than-perfectly correlated reduces the risk of default of the merged firms (i.e., the co-insurance effect)
and thereby increases the "debt capacity" or "borrowing ability" of the combined enterprise. These
financing alternatives became more valuable during the global financial crisis of 2007-2009.

Financial headroom: Measure of deviation tolerated in financial metrics without moving outside or above
a pre-designated band or limit typically found in loan covenants (as in a debt to EBITDA multiple that
places a constraint on leverage). Significant headroom would allow for larger deviations.

Financial risk profile: The outcome of decisions that management makes in the context of its business
risk profile and its financial risk tolerances. This includes decisions about the manner in which
management seeks funding for the company and how it constructs its balance sheet. It also reflects the
relationship of the cash flows the organization can achieve, given its business risk profile, to its financial
obligations. The criteria use cash flow/leverage analysis to determine a corporate issuer's financial risk
profile assessment.

Financial sponsor: An entity that follows an aggressive financial strategy in using debt and debt-like
instruments to maximize shareholder returns. Typically, these sponsors dispose of assets within a short to
intermediate time frame. Financial sponsors include private equity firms, but not infrastructure and asset-
management funds, which maintain longer investment horizons.

Profitability ratio: Commonly measured using return on capital and EBITDA margins but can be
measured using sector-specific ratios. Generally calculated based on a five-year average, consisting of
two years of historical data, and our projections for the current year and the next two financial years.

Shareholder remuneration policies: Management's stated shareholder reward plans (such as a

buyback or dividend amount, or targeted payout ratios).

Stand-alone credit profile (SACP): Standard & Poor's opinion of an issue's or issuer's creditworthiness,
in the absence of extraordinary intervention or support from its parent, affiliate, or related government or
from a third-party entity such as an insurer.

Transfer and convertibility assessment: Standard & Poor's view of the likelihood of a sovereign
restricting nonsovereign access to foreign exchange needed to satisfy the nonsovereign's debt service
obligations.

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Standard & Poors Business and Financial Terms July 2014
Unconsolidated equity affiliates: Companies in which an issuer has an investment, but which are not
consolidated in an issuer's financial statements. Therefore, the earnings and cash flows of the investees
are not included in our primary metrics unless dividends are received from the investees.

Upstream/midstream/downstream: Referring to exploration and production, transport and storage, and

refining and distributing, respectively, of natural resources and commodities (such as metals, oil, gas,
etc.).

Volatility of profitability/SER: We base the volatility of profitability on the standard error of the
regression (SER) for a company's historical EBITDA. The SER is a statistical measure that is an estimate
of the deviation around a 'best fit' trend line. We combine it with the profitability ratio to determine the final
profitability assessment. We only calculate SER when companies have at least seven years of historical
annual data, to ensure that the results are meaningful.

Working-capital-intensive companies: Generally a company with large levels of working capital in

relation to its sales in order to meet seasonal swings in working capital. Examples of working-capital-
intensive sectors include retail, auto manufacturing, and capital goods.

Corporate Methodology: Ratios and Adjustments (Source: Corporate Methodology:

Ratios and Adjustments, 19, November 2013)

Capital: Debt plus noncurrent deferred taxes plus equity (plus or minus all applicable adjustments).

Capital expenditures: Funds spent to acquire or develop tangible and certain intangible assets (plus or
minus all applicable adjustments).

Cash interest: For the purposes of calculating the FFO cash-interest-cover ratio, "cash interest"
includes only cash interest payments on gross financial debt (including bank loans, debt capital market
instruments, finance leases, and capitalized interest). Cash interest does not include any Standard &
Poor's-adjusted interest on debt-like obligations, such as postretirement benefit obligations or operating
leases.

CFO (cash flow from operations): CFO is also referred to as operating cash flow. This measure
reflects cash flows from operating activities (as opposed to investing and financing activities), including all
interest received and paid, dividends received, and taxes paid in the period (plus or minus all applicable

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Standard & Poors Business and Financial Terms July 2014
adjustments). For companies that do not use U.S. GAAP, we reclassify as CFO any dividends received,
or interest paid or received, that a company reports as investing or financing cash flows.

Current tax expense: This is the amount of income taxes payable on taxable profit, or income tax
recoverable from tax losses, in an accounting period (plus or minus all applicable adjustments). Current
tax expense is to be distinguished from deferred tax expense.

DCF (discretionary cash flow): FOCF minus cash dividends paid on common stock and preferred
stock (plus or minus all applicable adjustments).

Debt: Gross financial debt (including items such as bank loans, debt capital market instruments, and
finance leases) minus surplus cash (plus or minus all applicable adjustments).

Dividends: Dividends paid to common and preferred shareholders and to minority interest shareholders
of consolidated subsidiaries (plus or minus all applicable adjustments).

EBIT: A traditional view of profit that factors in capital intensity, but also includes interest income, the
company's share of equity earnings of associates and joint ventures, and other recurring, nonoperating
items (plus or minus all applicable adjustments).

EBITDA: A company's revenue minus operating expenses, plus depreciation and amortization
expenses, including impairments on noncurrent assets and impairment reversals (plus or minus all
applicable adjustments). Dividends (cash) received from affiliates, associates, and joint ventures
accounted for under the equity method are added, while the company's share of profits and losses from
these affiliates is excluded.

Equity: Common equity and equity hybrids and minority interests (plus or minus all applicable
adjustments).

FFO (funds from operations): EBITDA, minus net interest expense minus current tax expense (plus or
minus all applicable adjustments).

FOCF (free operating cash flow): CFO minus capital expenditures (plus or minus all applicable
adjustments).

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Standard & Poors Business and Financial Terms July 2014
Interest: This is the reported interest expense figure, including noncash interest on conventional debt
instruments (such as payment-in-kind, zero-coupon, and inflation-linked debt), minus any interest income
derived from assets structurally linked to a debt instrument (plus or minus all applicable adjustments).

Net interest expense: This is the reported interest expense figure, including noncash interest on
conventional debt instruments (such as payment-in-kind, zero-coupon, and inflation-linked debt), minus
the sum of interest income and dividend income (plus or minus all applicable adjustments).

Revenues: Total sales and other revenues we consider to be operating (plus or minus all applicable
adjustments).

Banking (Source Bank: Rating Methodology And Assumptions 9 November 2011)

Earnings: 1. Core earnings Net income (before noncontrolling interest) (-) Nonrecurring/special income
(+) Nonrecurring/special expense (+) Goodwill and M&A-related intangibles impairment or amortization
(+) Allocation to funds for general banking risk (-) Distributions due on all equity hybrid instruments
accounted for as equity (+/-) Other adjustments (+/-) Tax impact of all adjustments above = Core
earnings.

Total revenue(s): All revenues net of interest expense and nonrecurring income.

Fees and commissions: Fees and commission income earned, net of commissions paid where those
commissions are closely related to commissions earned.

Other market-sensitive income: Income from appreciation of financial assets sold, such as gains or
losses on private equity holdings, realized gains or losses on nontrading securities, gains or losses on
loan sales, or securitizations that are from ongoing business lines. Other gains on sale of fixed assets or
business lines are categorized as nonrecurring income.

Cost-income ratio: Salaries and general administrative expenses before any nonrecurring expenses,
divided by total revenue(s).

Net operating income before loan loss provisions/assets: Revenues net of all expenses except
provisions, before any nonrecurring gains/losses, divided by average assets.

Core earnings/assets: Core earnings divided by average assets.

Other revenues/total revenues: Revenues other than net interest income, fees and commissions,
trading gains and other market-sensitive income, divided by total revenue(s).

Funding

Loan-to-deposit ratio (%): Customer loans (net), divided by customer deposits.

Customer loans (net): Customer loans (gross) net of loan loss reserves and net of reverse repurchase
agreements and net of securities borrowing.

Customer deposits: Customer deposits net of repurchase agreements and net of securities lending.

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Standard & Poors Business and Financial Terms July 2014
Long-term funding ratio (%): Available stable funding divided by the sum of the funding base and total
equity net of intangibles.

Available stable funding: The sum of total equity net of intangibles, customer deposits, and long-term
interbank and debt market funding including hybrid instruments with minimal equity content maturing after
one year.

Funding base: The sum of customer deposits, interbank and debt market funding including hybrid
instruments with minimal equity content, repurchase agreements and securities lending, nonderivative
trading liabilities and acceptances.

Total equity: The sum of common shareholders' equity, minority interest-equity, and hybrid instruments
with high or intermediate equity content.

Short-term wholesale funding/funding base (%): Short-term wholesale funding divided by funding
base.

Short-term wholesale funding: The sum of short-term interbank and debt market funding maturing
within one year, repurchase agreements and securities lending, acceptances, and nonderivative trading
liabilities.

Stable funding ratio (%): Available stable funding (as defined above) divided by stable funding needs.

Stable funding needs: The sum of customer loans (net), short-term reverse repurchase agreements and
securities borrowing with nonbanks maturing within one year net of haircut*, long-term interbank loans
and reverse repurchase agreements and securities borrowing maturing after one year, securities holdings
net of haircut*, restricted cash (see table 2), all other assets net of haircut*, and off-balance sheet credit
equivalents net of haircut*

Liquidity

Broad liquid assets to short-term wholesale funding (%): Broad liquid assets divided by short-term
wholesale funding (as defined in Short Term wholesale funding/funding base).

Broad liquid assets: The sum of: cash, short-term interbank loans and reverse repurchase agreements
and securities borrowing with banks maturing within one year, short-term reverse repurchase agreements
and securities borrowing with nonbanks net of haircut* maturing within one year, and securities holdings
net of haircut* less restricted cash (%of customer deposits depending on geographic region (1%-5%)).

Net broad liquid assets/short-term customer deposits (%): Broad liquid assets less short-term
wholesale funding, divided by short-term customer deposits net of repurchase agreements and net of
securities lending maturing within one year.

Short-term wholesale funding/total wholesale funding (%): Short-term wholesale funding (as defined
above) divided by the difference between the funding base and customer deposits.

Liquid assets to wholesale funding (%): Broad liquid assets divided by total wholesale funding.

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Standard & Poors Business and Financial Terms July 2014
Insurance (Source: Insurers Rating Methodology 7 May 2013)

Business risk profile or BRP.

Capital model and capital model criteria: The capital model is a quantitative tool that is integral to
Standard & Poor's analysis of the capital adequacy of life, P/C, health insurance, and reinsurance
companies worldwide.

Coinsurance: Insurance (or reinsurance) business where insurers share the same terms and conditions
as other insurers underwriting the same risk, other than the proportion of that risk. For example, insurer A
may insure 40% of the risk, and insurers B and C may each insure 30% of the risk. In this example, the
insurers would normally share premiums, commissions, and claims in the same proportions.

Combined ratio: The ratio of the sum of loss expense, loss adjustment expense, and operating
expenses divided by premiums earned. All elements are net of ceded reinsurance. We may use net
premiums written (NPW) in the denominator where net premiums earned is not available or where
expenses are not deferred in the accounting system the insurer uses (e.g., U.S. statutory accounting).

Counterparty credit rating (CCR): This is the same as an issuer credit rating (ICR).

EBIT: The sum of profit before tax and interest expense.

EBITDA: The sum of EBIT and depreciation on tangible fixed assets plus amortization of intangible
assets except for deferred acquisition costs and value of business acquired.

Enterprise risk management (ERM): The evaluation of insurance companies' ERM is a component of
our rating analysis. ERM examines whether insurers execute risk management practices in a systematic,
consistent, and strategic manner across the enterprise that effectively limits future losses within an
optimal risk/reward framework. ERM analysis also provides a prospective view of the insurer's risk profile
and capital needs.

Expense ratios: Net expense ratio: The ratio of net operating expenses over net premiums earned (or
over NPW if net premiums earned is not available, or where expenses are not deferred in the accounting
system the insurer uses, such as U.S. statutory accounting). Gross expense ratio: the ratio of gross
operating expenses over gross premiums earned.

Financial enhancement rating or FER: A FER addresses an insurer's ability and willingness to meet
credit enhancement insurance claims on a full and timely basis.

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Standard & Poors Business and Financial Terms July 2014
Financial leverage ratio: Total financial obligations over the sum of ECA (Economic Capital Available, as
defined in our capital model criteria), debt, and hybrids. ECA is as defined in the capital model criteria.

Financial risk profile or FRP.

Financial strength rating or FSR: A Standard & Poor's insurer financial strength rating is a forward-
looking opinion about the financial security characteristics of an insurer with respect to its ability to pay
under its insurance policies and contracts in accordance with their terms.

General account assets include invested assets as reported (cash, cash equivalents, and investments)
that are part of an insurer's general account. It does not include assets pertaining to unit-linked or
separate accounts as these assets are not under the control of the insurer.

Group credit profile or GCP: The GCP is Standard & Poor's opinion of a group's creditworthiness as if
the group were a single legal entity, and is conceptually equivalent to an ICR. A GCP does not address
any specific obligation.

Hybrid instruments: These securities, which include preferred shares, combine features of debt and
equity, but are not equivalent to common equity or senior debt.

Issuer credit rating or ICR: Also called "counterparty credit rating." A Standard & Poor's issuer credit
rating is a forward-looking opinion about an obligor's overall creditworthiness, focusing on its capacity and
willingness to meet its financial obligations in full and as they come due.

Insurance or insurers: Entities that carry insurance risk, excluding for example, insurance brokers and
companies servicing an insurance sector. In these criteria, unless otherwise stated, these terms include
reinsurance and reinsurers.

Insurance group: A group of companies that have insurance as their predominant activity.

Local currency issuer credit rating: A nonsovereign entity's local currency ICR reflects Standard &
Poor's opinion of that entity's willingness and ability to service its financial obligations, regardless of
currency and in the absence of restrictions on its access to foreign exchange needed to service debt.

Minority interests: Also referred to as noncontrolling interests.

Operating return on embedded value: Post-tax operating profit divided by the average of embedded
value at period-end and a year before.

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Standard & Poors Business and Financial Terms July 2014
Prebonus pretax earnings: The sum of EBITDA and policyholder dividends.

Public information ('pi') FSRs: Ratings with a 'pi' suffix are based on an analysis of an issuer's
published financial information, as well as additional information in the public domain. Therefore, for FSRs
with a 'pi' suffix, specific criteria apply. The less comprehensive information typically available for 'pi'
ratings affects the assessment of many rating factors, and is frequently less forward-looking and more
reliant on historic information--notably due to the absence of interaction with the insurer's management.

Property/casualty or P/C.

Premiums: For insurers reporting under U.S. generally accepted accounting principles, given that under
Financial Accounting Standards Board Statement No. 97 most annuities and universal life receipts are
accounted for as deposits and not as revenues or premiums, for the purpose of these criteria premiums
are represented by sales. Gross premiums written (GPW) comprise all sources of premium receivables
from policyholders for the financial period except premiums on contracts accounted for as deposits (these
include universal life and deferred annuities). GPW includes all installment, adjustment, reinstatement,
incremental, and accrued premium receivable, and includes all return and refund premium payable under
insurance policies. GPW excludes premiums on contracts accounted for as deposits including universal
life and deferred annuities. Even if contracts legally result in a premium, we only recognize a transaction
as premiums in our ratios if it represents payment for risk-bearing activities retained by the insurer. Risk-
bearing activities include underwriting, investment, and expense management. Accordingly, we may
exclude amounts receivable for guaranteed investment contracts, funding agreements, and other forms of
operational leverage from our premium metrics where the commercial substance of the contract is a
financial instrument rather than insurance. NPW comprises GPW minus premiums ceded to reinsurers.
Reinsurance premiums include installment, adjustment, reinstatement, incremental, and accrued
reinsurance premium payable.

Risk-based capital or RBC.

ROE or return on equity: reported net income divided by the year-end average of reported stockholders'
equity for the past two years.

Return on assets: EBIT divided by the average of total assets adjusted at period-end and a year before.
Total assets adjusted is total assets minus reinsurance assets.

Return on revenue: Total revenue is used to capture net premiums from underwriting activities as well as
investment income and fees generated as a result of those underwriting activities. Where total revenue is

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Standard & Poors Business and Financial Terms July 2014
not reported, it is the sum of the net premiums earned, net investment income, and other income. We
include net investment income as reported (but removing the effects of realized and unrealized gains or
losses from investments and derivatives) to provide a more complete picture of an insurer's revenue-
generating abilities.

Reinsurance utilization ratio: For life, the ratio is defined as ceded reserves over gross reserves,
excluding captives and other forms of nonrisk transfer reinsurance (e.g., financial, block divestitures, and
acquisitions executed as reinsurance). For P/C insurers, the ratio is ceded premiums written over GPW.

Sigma: This refers to a study of the world insurance market, the most recent of which at the time of
publication was Sigma Study: No. 3/2012, "World insurance in 2011: non-life ready for take-off."

Solvency margin: This is the amount by which an insurance company's assets exceed its projected
liabilities, effectively a measure of its financial health.

Total adjusted capital or TAC: TAC is Standard & Poor's measure of a company's capital available to
meet capital requirements, as derived from our capital adequacy model.

Transfer and convertibility or T&C: A T&C assessment is the rating associated with the likelihood of
the sovereign restricting access to foreign exchange needed for debt service.

Tied (otherwise known as exclusive) agents and non-tied agents: Tied agents are those that are
contractually bound to distribute the products of only one insurer. They may not be controlled by the
insurer, but they are significantly influenced by the insurer because of the exclusivity of the relationship.
For the purpose of these criteria, the agent may be tied to different insurers for different products but
these products must not be substitutes for each other. For example, if the agent's customer requires
home insurance or term life insurance, it may only offer the product of one insurer in each case. Non-tied
agents are all other agents.

Sovereign (Source Sovereign Government Rating Methodology and Assumptions 24

June 2014)

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Standard & Poors Business and Financial Terms July 2014
GDP: total U.S. dollar market value of goods and services produced by resident factors of production
divided by population.

Real GDP per capita (% change): Percent change in constant price per capita GDP.

Consumer price index (% change): Average percent change in index of prices of a representative set of
consumer goods bought by a typical household on a regular basis.

Depository Corporation claims (% change) Percent change in year-end resident depository corporation
claims (excluding claims of the central bank) on the resident nongovernment sector. May include claims
by resident nondepository financial corporations, where these institutions are of systemic importance.

Monetary base: Local currency in circulation plus the monetary authority's local currency liabilities to
other depository corporations. The latter normally consists of these depository institutions' deposits at the
central bank plus central bank securities that can be used in satisfying reserve requirements, though
there are national differences in definitions.

Current account receipts (CAR): Proceeds from exports of goods and services plus factor income
earned by residents from nonresidents plus official and private transfers to residents from nonresidents
.In which: Factor Income = compensation of employees + investment income earned by residents from
nonresidents.

Official Reserves: Monetary authority liquid claims in foreign currency (including gold) on nonresidents.

Usable reserves: Official reserves minus items not readily available for foreign exchange operations and
repayment of external debt.

In which: Items not readily available for foreign exchange operations and repayment of external
debt=reserves pledged as security for any loan, including gold repos (unless the loan is due
within a year)

+ Mark-to-Market losses on reserves sold forward

+ Reserves deposited in domestic financial institutions, including offshore branched

+ Required reserves on resident foreign currency deposits (Required reserves on nonresident

deposits are included in reserves because the nonresident deposits are included in the short term
external debt measure in the calculation.)

+ Monetary base for sovereigns that have adopted a currency board or have a long standing fixed
peg with another currency (because the reserve coverage of the base is critical to maintaining
confidence in the exchange-rate link.

Gross External Financing Needs (%) of CAR plus usable reserves: Current account payments plus
short-term external debt at the end of the prior year plus nonresident deposits at the end of the prior year
plus long-term external debt maturing within the year, as a percent of CAR plus usable reserves.

Narrow net external debt/CAR (%): Stock of foreign-and local-currency- and private sector borrowings
from nonresidents minus official reserves minus public-sector liquid assets held by nonresidents minus
financial sector loans to, deposits with, or investments in nonresident entities, as a percent of CAR.

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Standard & Poors Business and Financial Terms July 2014
The calculation of the narrow net external debt may exclude the external debt of foreign banks that do not
have domestic financial assets, when material.

Current account balance/CAR (%): Exports of goods and services minus imports of the same plus net
factor income plus official and private net transfers, as a percentage of CAR.

Net foreign direct investment (FDI)/GDP (%): Direct investment by nonresidents minus residents
direct investment abroad, as a percent of GDP.

Net external liabilities/CAR (%): Total public and private-sector liabilities to nonresidents minus total
external assets, as a percent of CAR. In which:

Total external assets = official reserves + public sector assets held by nonresidents = resident financial
institutions assets held by nonresidents + resident nonfinancial sector assets held by nonresidents + the
stock of direct and portfolio equity investment placed abroad.

Terms of trade: Price of goods exports relative to price of goods imports.

General government: Aggregate of the national, regional, and local government sectors, including social
security and other defined benefit public-sector pension systems, and excluding intergovernmental
transactions.

Change in general government debt as a percentage of GDP: General government debt at year-end
minus general government debt at prior year-end, as a percent of GDP.

This measure is compared with the headline deficit, which typically ignores the impact of exchange rate
movements and off-budget factors on the debt burden. Among the one-off items for which we would
adjust in our analysis are changes in debt related to shifts in prefunding practices, proceeds from the
privatization of government assets, shifts in exchange rates that are not expected to persist, and bank
and other bailouts that are not expected to be repeated.

Net general government debt/GDP (%): General government debt minus general government liquid
financial assets, as a percent of GDP. Gross general government debt includes the debt of government's
asset management companies used for the resolution of banks or other private sector bailouts

General government liquid financial assets: General government deposits in financial institutions
(unless the deposits are a source of support to the recipient institution) plus minority arms-length holdings
of incorporated enterprises that are widely traded plus balances in defined benefit government-run
pension plans or social security funds (or stabilization or other freely available funds) that are held in bank
deposits, widely traded securities, or other liquid forms.

Defined-benefit government-run pension fund balances invested in government debt are usually excluded
from gross debt if the government controls the fund, and thus are not included in assets.

Gross general government debt/GDP (%): Debt incurred by national, regional, and local governments
and central bank debt (if applicable) as a percent of GDP.

Internal holdings, including social security and defined benefit public-sector pension fund investments in
government debt, are netted out.

General government interest/general government revenues (%): Interest payments on general

government debt, as a percent of general government of revenues.

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Standard & Poors Business and Financial Terms July 2014
Non-US Local and Regional Governments (Source: Methodology for Rating Non- U.S.
Local and Regional Governments 30 June 2014)

.Government-related entity (GRE): Enterprises potentially affected by extraordinary government

intervention during periods of stress. GREs are often partially or totally controlled by a government (or
governments), and they contribute to implementing policies or delivering key services to the population.
However, we have observed that some entities with little or no government ownership might also benefit
from extraordinary government support because of their systemic importance or their critical role as
providers of crucial goods and services.

Stand-alone credit profile (SACP): Reflects Standard & Poor's opinion of the entity's creditworthiness,
before taking into account the potential for direct entity-specific extraordinary intervention from the entity's
parent company or, in the case of a GRE, the government that controls or owns it.

Operating revenues: Recurring revenues that an LRG receives. Operating revenues comprise taxes
and nontax revenues, such as grants, operating subsidies, fines, fees for services, tariffs, rents, and other
sources from which the LRG derives revenues. They exclude capital revenues, such as capital subsidies
and proceeds from asset sales, and any revenues from borrowed funds.

Adjusted operating revenues: Operating revenues adjusted for material noncash or pass-through
items.

Consolidated operating revenues: An LRG's operating revenues and the commercial revenues
(comprising fees and sales, among others) generated by GREs that the LRG owns or controls, for which
we include debt in the LRG's tax-supported debt ratio. We generally deduct from the GREs' revenues
material sums that come from the LRG itself, such as a subsidy or service contract.

Operating expenditures: Correspond to the costs of an LRG's operations, its administration, and its
provision of services to the population, directly or through other public bodies.

Adjusted operating expenditures: Operating expenditures adjusted for material noncash (provisions,
depreciation) or pass-through items.

.Operating balance: Equals adjusted operating revenues minus adjusted operating expenditures
(including interest expense).

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Standard & Poors Business and Financial Terms July 2014
Capital expenditures: Typically cover the repair and replacement of existing infrastructure and the
development of new infrastructure.

.Capital revenues: Chiefly comprise proceeds from asset sales and capital grants.

Balance after capital accounts: Results from the adding of capital revenues to and the subtracting of
capital expenditures from the operating balance.

Free cash and liquid assets: Liquid assets that are unrestricted, not needed to meet daily operating
needs or planned capital costs in a forward-looking perspective, available to cover debt service over the
next 12 months, and adjusted for market risk on noncash investments.

Interest payments: Correspond to the amount of interest paid within a given budgetary period, including
the interest component of financial leases.

.Debt service: Equals interest payments plus the amount of principal repaid during a given budgetary
timeframe, including the capital component of financial leases and short-term debt repaid during the
period. We believe that debt service on a revolving credit line tends to be exaggerated if the full amount of
turnover on the revolving line is recorded as repayment. Therefore, in our calculations, repayment under
the revolving line would include only the maximum amount drawn under the line during the year, minus
debt outstanding under the revolving line at year-end.

.Direct debt: Comprises long- and short-term financial debt assumed directly by the borrower--loans,
bonds, credits, and capitalized lease obligations--that an LRG is obliged to pay to another entity in
accordance with an express agreement or for other legally binding reasons. It excludes guaranteed debt
and the debt of GREs, unless serviced by the LRG on an ongoing basis. It includes debt serviced via
subsidies from other levels of government, unless the legal obligation to service this debt is transferred to
the other government.

.Guaranteed debt: Financial debt on which the principal and interest payments are the responsibility of
the LRG (as the guarantor), if the borrower that is primarily liable fails to repay the debt. If an LRG has to
service the debt it has guaranteed, then we would include the guaranteed amount in the LRG's direct
debt.

Tax-supported debt: The sum of the following items:

o Direct debt of the LRG;

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Standard & Poors Business and Financial Terms July 2014
 o Guaranteed debt of GREs or other entities that are not self-supporting;
o Nonguaranteed debt of GREs that are not self-supporting;
o Debt of nonbank GREs, when the long-term rating on the GRE is the same as the long-term
rating on the LRG, based on our opinion of an "almost certain" likelihood that the LRG will
provide support for the GRE (generally excluding those GREs that are self-supporting) if
needed, or when the GRE's debt is issued by the LRG's central treasury (as is the case in
Australia); and
o Debt of PPPs and securitizations, when the risk transfer to the private sector is not material
enough to treat the public sector entity's financial commitment as a contingent liability.

In instances where we believe that a GRE is not self-supporting, we consolidate in the tax-supported
debt ratio all the GRE's debt and own commercial revenues, regardless of the LRG's percentage of
ownership of the GRE.

.Self-supporting entities: The debt of a GRE that does not need financial support from its LRG and is
unlikely to require support in the future is self-supporting debt. Financial support includes any direct or
indirect contribution aiming at balancing operating accounts, financing investments, or repaying debt.
When a GRE receives sizable revenues from its LRG for a service, we evaluate the exchange as if it were
a remuneration at market rates for a service that could be provided in comparable terms by a private
contractor. Self-supporting entities generally have investment-grade stand-alone credit profile (or
estimated creditworthiness, if SACP is not formally established). For speculative-grade LRGs, GREs
whose SACPs (or estimated creditworthiness) are at the same level or higher than that of the LRG's
(hence unlikely to require government support) can also be classified as self-supporting.

Projected benefit obligation: An estimate of the present value of an employee's pension that assumes
that the employee will continue to work and that his or her pension contributions would increase as their
salary increases.

Accumulated benefit obligation: A method that assumes that the employee ceases to work for the
company at the time the actuarial estimate is made.

Total adjusted revenues: The sum of adjusted operating revenues and capital revenues for a given
budgetary period.

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Standard & Poors Business and Financial Terms July 2014
Group Rating Methodology (Source: Group Rating Methodology 19 November 2013)

Captive insurer: A subsidiary that mainly provides insurance services for group members. Captive
insurers typically show a very high degree of integration with group financial and risk management
strategy. Captive insurers include captive reinsurance subsidiaries of insurance groups and captive
insurance and reinsurance subsidiaries of corporate or FI groups. The captives of corporate or FI groups
insure risks of non-insurance subsidiaries either directly as insurers or indirectly as reinsurers. In turn,
they may reinsure some of the aggregated risk with third-party reinsurers, thereby playing a central role in
the group's risk retention strategy.

Financial institution: The term "financial institution" includes retail banks, commercial banks, corporate
and investment banks, large broker-dealers, mortgage lenders, trust banks, credit unions, building
societies, custody banks, finance companies, asset managers, exchanges, clearinghouses, regional
securities brokers, and similar financial institutions.

Financial services sector: Consists of banks, nonbank financial institutions, and insurers.

Financial sponsor: This is an entity that does not have a long-term, strategic investment in a company.
Rather, the financial sponsor is a financial investment firm, trying to increase the value of its investment
by improving management, capital, or both, typically with the ultimate goal of liquidating the investment.
Financial sponsors include private-equity firms, hedge funds, venture capital, public and private
investment companies, and mutual funds.

Financial strength rating (FSR): A Standard & Poor's insurer financial strength rating is a forward-
looking opinion about the financial security characteristics of an insurer with respect to its ability to pay
under its insurance policies and contracts in accordance with their terms.

Fully integrated: This refers to a subsidiary that depends on the rest of the group for its administrative
and operational activities, and infrastructure. These ties render it highly improbable to sever the
subsidiary from the group. Examples of such subsidiaries can include booking or cost centers, or captive
insurers, captive financing operations, and entities that exist solely to issue debt or carry on treasury
operations on behalf of a group.

Group credit profile (GCP): The GCP is Standard & Poor's opinion of a group's creditworthiness as if the
group were a single legal entity, and is conceptually equivalent to an ICR. A GCP does not address any
specific obligation.

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Standard & Poors Business and Financial Terms July 2014
Insurance company or insurers: Entities that carry insurance risk, excluding for example, insurance
brokers and companies servicing an insurance sector. In these criteria, unless otherwise stated, these
terms include reinsurance companies and reinsurers.

Insurance group: A group of companies that has insurance as its predominant activity.

Intermediate holding company of a financial services group: A legal entity that is a subsidiary within
a group that does not carry out its own prudentially regulated business activities, but is the legal owner of
at least one subsidiary that conducts prudentially regulated business activities.

Investment holding company: A corporate entity that invests in, but does not intend to support, other
companies (which are usually operating entities).

Issuer credit rating (ICR): Also called "counterparty credit rating," a Standard & Poor's issuer credit
rating is a forward-looking opinion about an obligor's overall creditworthiness, focusing on its capacity and
willingness to meet its financial obligations in full and as they come due.

Local currency issuer credit rating: A nonsovereign entity's local currency ICR reflects Standard &
Poor's opinion of that entity's willingness and ability to service its financial obligations, regardless of
currency and in the absence of restrictions on its access to foreign exchange needed to service debt.

Nonoperating holding company (NOHC) of a financial services group: A legal entity that does not
carry out its own prudentially regulated business activities, but is the legal owner of at least one
subsidiary that conducts prudentially regulated business activities. An NOHC may also provide services to
subsidiaries such as investment and treasury management.

Operating holding company (OHC) of a financial services group: A legal entity that conducts
prudentially regulated business activities and also is the legal owner of at least one subsidiary that
conducts prudentially regulated business activities. If a holding company has a banking license, it is an
OHC.

Parent: An entity with controlling or joint-control interest in another incorporated entity (a subsidiary) or a
joint venture.

Prudentially regulated: This refers to the regulation of a financial services entity by one or more
regulatory authority by setting standards for capitalization and potential restrictions on distributions.

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Standard & Poors Business and Financial Terms July 2014
Start-up: An entity operating for five years or less.

Subgroup: A group of legal entities within a wider group that are either controlled by a single legal entity,
or collectively by several entities.

Transfer and convertibility (T&C): A country T&C assessment reflects Standard & Poor's view of the
likelihood of a sovereign restricting nonsovereign access to foreign exchange needed to satisfy the
nonsovereign's debt service obligations.

Ultimate parent: The legal entity at the top of a group structure, in which the control chain may include
several successive layers and exclusive controlling or joint-control interest in another incorporated entity
("subsidiary") or joint venture. Under the criteria, a natural person, family firm, foundation, investment
holding company, managed fund, or private equity firm would not generally be treated as an ultimate
parent. In general, "family firm" refers to one that is family-controlled, and "private equity firm" to a natural
person or fund-controlled entity primarily investing in a private capacity in operating entities.

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Standard & Poors Business and Financial Terms July 2014