EXHIBIT 26 

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Exhibit CW PR Investor Webcast Page 1 of 74
The Commonwealth of Puerto Rico

Update on Fiscal and Economic Progress 

FY 2014 Q1 Investor Webcast - October 15, 2013

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Forward-Looking Statements

2

The information included in this presentation contains certain ―forward-looking‖ statements. These forward-looking statements

may relate to the fiscal and economic condition, economic performance, plans and objectives of the Commonwealth of Puerto

Rico (the ―Commonwealth‖) and/or its agencies or instrumentalities. All statements contained herein that are not clearly

historical in nature are forward-looking, and the words ―anticipates,‖ ―believes,‖ ―continues,‖ ―expects,‖ ―estimates,‖

―intends,‖ ―aims,‖ ―projects,‖ and similar expressions, and future or conditional verbs such as ―will,‖ ―would,‖ ―should,‖

―could,‖ ―might,‖ ―can,‖ ―may,‖ or similar expressions, are generally intended to identify forward-looking statements.

These statements are not guarantees of future performance and involve certain risks, uncertainties, estimates, and assumptions

by the Commonwealth and/or its agencies or instrumentalities that are difficult to predict. The economic and financial

condition of the Commonwealth and its agencies or instrumentalities is affected by various

financial, social, economic, environmental, and political factors. These factors can be very complex, may vary from one fiscal

year to the next, and are frequently the result of actions taken or not taken, not only by the Commonwealth and/or its agencies

or instrumentalities, but also by entities such as the government of the United States of America or other nations that are not

under the control of the Commonwealth. Because of the uncertainty and unpredictability of these factors, their impact

cannot, as a practical matter, be included in the assumptions underlying the Commonwealth’s or its agencies or

instrumentalities’ projections.

The projections set forth in this presentation were not prepared with a view toward complying with the guidelines established

by the American Institute of Certified Public Accountants with respect to prospective financial information, but, in the view of

the officers of the Commonwealth or its agencies or instrumentalities responsible for the preparation of such information, were

prepared on a reasonable basis, reflect the best currently available estimates and judgments, and present, to the best of such

officers’ knowledge and belief, the expected course of action and the expected future financial performance of the

Commonwealth and/or its agencies or instrumentalities, as applicable. However, this information is not fact and should not be

relied upon as being necessarily indicative of future results, and readers of this presentation are cautioned not to place undue

reliance on the prospective financial information. Neither the Commonwealth’s nor any agency or instrumentality’s

independent auditors, nor any other independent auditors, have compiled, examined, or performed any procedures with

respect to the prospective financial information contained herein, nor have they expressed any opinion or any other form of

assurance on such information or its achievability and disclaim any association with the prospective financial

information. Neither the Commonwealth’s nor any agency or instrumentality’s independent auditors, nor any other

independent auditors, have been consulted in connection with the preparation of the prospective financial information set forth

in this presentation, which is solely the product of the Commonwealth and/or its agencies or instrumentalities, and the

independent auditors assume no responsibility for its content.

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Agenda

1 Principal Credit Accomplishments

2 Revenue and Expense Update

3 Economic Development

4 Financial Highlights

5 Concluding Remarks

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Challenges faced... ...Puerto Rico has taken action:

Size of the General Fund's Deficit • Approved budget for fiscal year 2014 was designed to reduce the budget deficit

from $2.375 billion in FY2012, and a projected $1.290 billion in FY2013, to $820 

million in FY2014, by enhancing and diversifying our revenue base, including 

through an increase in the Act 154 excise tax to 4%, and by reducing our reliance 

on debt service restructuring.

• Q1 preliminary revenues are above estimates and Q1 preliminary expenditures 

are in line with budgeted appropriations.

Funding of the Commonwealth's 

Pension System

• Act 3 delivered on the long-standing promise of enacting meaningful and 

comprehensive pension reform to the ERS that reduces the projected need for 

approximately $900 million in annual pay-as-you-go contributions in the future

and ensures cash flow sufficient to pay pension obligations when due.

Public Corporations Dependent

on General Fund and GDB support

• Significant steps have been taken to turn the Commonwealth’s main public 

corporations, including PRASA, PRHTA, PRPA and PREPA, into entities capable of 

operating without budgetary subsidies or deficit financing from the General Fund 

or GDB.

Need for Meaningful Spending 

Controls

• During the second half of FY2013, the Commonwealth reduced General Fund 

expenses, turning a $140 million over expenditure projection as of January into 

approximately $50 million of under spending. For FY2014, General Fund payroll 

for July and August reflects an 11% decrease over the same period in the prior 

year. As of August 30, 2013, cumulative General Fund headcount was 

approximately 5,000 less than January 1, 2013.

Need to Jumpstart Economic 

Growth

• We are currently executing a short-term, aggressive outreach plan with clear 

and achievable goals and benchmarks that we are confident will result in 

thousands of new jobs and reposition Puerto Rico as a competitive business and 

investment destination. Our focus on job creation has already led to 

commitments expected to generate approximately 25,000 direct and indirect 

jobs.

• This presentation includes a description of the five-year economic plan 

developed by the Commonwealth with the input of Boston Consulting Group. We 

are confident this plan will jumpstart our economic engine and lead us to 

sustainable, long-term economic growth. 4

We have tackled the key challenges faced by Puerto Rico for decades 

in order to strengthen our credit and protect bondholders

1

2

3

4

5

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FY 2009 FY 2010 FY 2011 FY 2012 FY 2013e FY 2014e

Puerto Rico has taken actions to reduce the General Fund 

deficit

Historical and Projected Deficit a(in millions)

$(2,864)

$(2,724)

$(1,801)

$(2,375)

$(1,290)

$(820)

(a) Source: ―Commonwealth of Puerto Rico – Financial Information and Operating Data Report‖, dated October 15, 2013. Deficit for fiscal year 2013 and 2014 is preliminary 

and subject to change. Results presented for FY 2009 and FY 2010 exclude approximately $442 million and $50 million, respectively, of non-recurring expenses accrued 

during prior fiscal years that have been previously accounted as part of total expenditures for such fiscal years.

(b) After implementation of corrective measures by current Administration, deficit for FY 2013 was initially revised from $2.213 billion as of January 31, 2013 to $1.602 billion 

as of April 30, 2013, and again revised to $1.290 billion as of June 30, 2013. The approximately $2.213 billion deficit found in January 31, 2013 was composed of (i) a 

revenue shortfall of $965 million, (ii) $333 million COFINA deficit financing, (iii) $775 million in debt refinancing and (iv) $140 million of overspending (eliminated by OMB by 

June 30, 2013).

E: Estimated, preliminary and subject to change.

b

$(2,213) b

Projected deficit as of 

January 31, 2013 was 

reduced by $923 million

5

1

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We are phasing out the practice of restructuring GO and PBA 

debt service payments for budgetary relief

Source: ―Commonwealth of Puerto Rico – Financial Information and Operating Data Report, dated October 15, 2013.‖ Debt restructuring for fiscal year 2014 is preliminary and 

subject to change without prior notice, including as a result of market and general economic conditions

*Total debt service due for each fiscal year before any restructuring 

Total General Fund Debt Service (in millions)

$472.1

$685.6 $600.0 $575.4

$147.8

$153.8

$174.7

$407.2

$328.2 $391.6

$581.7

FY2011 FY2012 FY2013 FY2014

GO Debt Service Restructuring PBA Debt Service Restructuring GO,PBA, PFC Debt Service Paid by General Fund

• General Fund budgets for FY 2013 and FY 2014 were designed with a debt service restructuring of 

$775 million ($600 million in GO and $175 million in PBA bonds) and $575 million (in 

GOs), respectively.

• For the first time since FY 2009, there will be no PBA debt service restructuring in FY 2014.

• Our plan is to significantly reduce debt service restructuring for FY 2015 and eliminate the practice 

by FY 2016.

6

$1,027.1*

$1,167.6* $1,166.4* $1,157.1*

1

+26% -8%

-35%

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Cash Flow Deficit Projection After Act 3 and Act 32 of 2013 (in millions)

Note: The amounts presented are estimates, the end result could vary. This chart takes into account an investment rate of return of 6.00% and does not take 

into account the retirement of ERS covered employees that may have retired as a result of the reform.

• The Employees Retirement System’s pension reform, which has been labeled a ―credit positive‖ by the rating 

agencies, provides a cash-flow solution to ensure that all the System’s obligations are paid when due.

• Changes enacted by Act 3-2013 include moving participants to a defined contribution plan, annuitizing the defined 

contribution benefits, increasing retirement age, increasing employee contribution, modifying (and eliminating 

for future retirees) ―Special Law‖ benefits, eliminating disability benefits and changing survivor benefits.

• With an additional annual contribution through 2033 ($120 million for FY 2014), it is projected that the system’s 

$900 million average cash flow deficit is eliminated. 

• The Puerto Rico Supreme Court has already upheld the constitutionality of the reform.

• In contrast to other U.S. jurisdictions, Puerto Rico has shown political courage and taken decisive action to tackle 

the long-term risk presented by its largest retirement system.

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 2046

Remaining Shortfall

Reduction in Cash Flow Deficit

Projected Total Assets (After Pension Reform)

FY

2

7

We enacted meaningful, comprehensive pension reform

Average Annual Shortfall:

- Prior to reform: $900 mm

- Post-reform: $0

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Significant steps have been taken to turn public corporations into self-sufficient 

entities capable of operating without budgetary subsidies or GDB deficit financing 3

• In July 2013, PRASA implemented a 60% rate increase (on average) that will provide 

additional revenues to cover operational expenses and improve debt service coverage.

• As a result of this increase, in contrast with prior years, the Commonwealth does not 

anticipate having to appropriate funds to PRASA for its operational expenses.

• Acts 30 and 31 of 2013, signed into law on June 25, 2013, increase HTA’s recurring annual 

revenues by approximately $270 million.

• These new revenue measures allow HTA to (i) begin amortizing its lines of credit 

outstanding with GDB and other financial institutions, (ii) access the capital markets over 

time to repay GDB lines and (iii) fund operational expenses.

• On February 27, 2013, Puerto Rico finalized the P3 transaction involving the Luis Muñoz 

Marín International Airport and received an upfront payment of $615 million.

• This transaction strengthened the Ports Authority’s fiscal position and reduced both the 

Port Authority’s and GDB’s risk position by repaying over $490 million most of which had 

been either owed to or guaranteed by the GDB.

• Conversion to natural gas as a fuel source has been completed at PREPA’s 2nd largest 

generating plant, reducing oil dependency by another 11%; negotiations to permit the 

conversion of PREPA’s largest generating plant (18% of total capacity) are underway.

• In August 2013, with over $1.6 billion of orders from investors, PREPA successfully 

completed a $673 million bond issuance to fund its capital improvement program, including 

the conversion to natural gas of existing oil-fired generation units, which is expected to 

enable PREPA to improve its operating efficiency.

8

These public corporations are key drivers of Puerto Rico’s economic growth with a combined CIP of 

approximately $1,206 million in FY 2014. At this point, GDB does not expect any of these public corporations 

to need budgetary subsidies or operational loans from GDB for FY 2014.

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Next Steps of Fiscal Plan

 Before the end of the calendar year, we will present legislation to reform our 

teacher’s pension system to ensure that the system does not run out of assets 

and pension benefits can be paid when due.

 Similar to the reform of the ERS, the reform of the TRS will be a cash flow 

solution that will alleviate future pay-as-you go pressure on the General Fund.

Reform the Teachers Retirement System

 For FY2015, the Commonwealth will reduce its budget deficit by at least an 

additional 50% versus FY2014’s budgeted deficit ($820 million).

 We expect to have a balanced budget by no later than FY2016. 

 We are committed to cutting expenses this fiscal year if revenue targets are not 

substantially met.

Finish the Job of Eliminating the Budget Deficit

The Commonwealth is committed to continue demonstrating its willingness and ability 

to further strengthen its fiscal health.

9

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Agenda

1 Principal Credit Accomplishments

2 Revenue and Expense Update

3 Economic Development

4 Financial Highlights

5 Concluding Remarks

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FY2013 and FY2014 Revenue 

Update

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$8,750 

$7,785 

$8,503 

$8,750 

$965 $718 

$247 

$5,000 

$5,500 

$6,000 

$6,500 

$7,000 

$7,500 

$8,000 

$8,500 

$9,000 

Budgeted 

Revenues 

FY2013

Revenue 

Shortfall

Revised 

Preliminary 

Revenues 

FY2013

Corrective 

Measures

Actual 

Revenue 

FY2013

Revenue 

Shortfall as 

of June 

2013

After significant corrective measures, the $965 million FY2013 revenue shortfall was 

reduced to $247 million. Funds to reduce the remaining shortfall have been identified.

* Shortfall is expected to be reduced or eliminated through (i) sale of old ($128 million) and new payment plans ($199

million) from Tax Amnesty and (ii) the closing of pending transactions with two pharmaceutical companies ($98

million), expected later this month.

Measures Amount 

(in millions)

- Cash Receipt Tax Amnesty $90

- Redemption Fund $241

- Royalty Prepayments $235

- Closing Agreements over 

Budgeted Amount $80

- Reimbursement of US 

Treasury Dept. for American 

Opp. Tax Credit $49

- COFINA Surplus $16

- Others $7

Subtotal $718

Preliminary Shortfall as of 

June 2013 * $247

Total $965

Effect of Corrective Measures

The following measures were undertaken to reduce the $965 million revenue shortfall:

12

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Base 

Ending FY2013

Base Increment* Base for FY2014 New Tax 

Measures

Expansion SUT 

Base

Gap / 

Stabilization 

Fund

Revenue Estimate 

FY2014

FY 2014 Budget - General Fund Revenue Projection

Preliminary Revenue Projection for Fiscal Year 2014 (in millions)

Results primarily from the increase of the Act 154 excise tax, minus a reduction due to royalty pre-payments 

received in FY 2012-13 as part of deferral of amendments to Act 154, minus $62 million of vehicle license fees 

transferred to PR Highways.

$9,770

$8,145

B

Approved FY 2014 Budget includes new tax measures expected to raise $1.071 billion of additional 

revenues, excluding the expansion to the ―SUT‖ base.

Expansion of Sales and Use Tax (―SUT‖) base of approximately $309 million principally relies on the extension of the 

SUT to certain business-to-business services and the elimination of exemptions for certain institutions and resellers. C

$7,785 $360

A

$245

$309

$1,071

13

C

D

*Economic growth projections reflect the most up-to-date PR Planning Board projections for FY 2014 (+0.2%).

A

D

B

Budget contemplates a Stabilization Fund of $245 million.

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Adopted budget for FY 2014 includes new tax measures expected to result 

in $1.071 billion of additional revenues, excluding the SUT expansion 

New Tax Measures = $1.071 billion*

(in millions)

$808 

$78 

$66 

$47 

$40 

$17 

$15 

Corporate Taxes

Tax Credit Limit

Self-Employed Tax 

Surcharge

Insurance 

premiums

Lottery Revenue 

Initiatives

"Sin" Taxes

Casino Revenues

Commentary

* Numbers are preliminary estimates and subject to change.

• 2% top-line tax on sole proprietorships and self

employed professionals earning over $200,000

• Limit on mortgage interest deductions

• Lottery revenue from certain initiatives (changes in

modality)

• Effect of already repealed UPR scholarship extraction

Measures include among others:

• Gross Receipts Tax, AMT adjustment and 2010 tax rate

code.

• Modified corporate AMT – Adjustment Net Operational

Loss and Book-Tax Adjustment

• Tax credits with questionable impact on economic

growth legislated over time reduced by 50%

• Increase excise tax on cigarettes

• Effect calculated net of demand elasticity

• 1% tax on underwriting premiums

• More casino (slot) machines allowed in hotels

14

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FY 2014 General Fund budget deficit represents a 

reduction of 65% vs. audited FY 2012 results*

FY 2014 Budget (in millions)

Estimated Expenses 

FY 2014

Projected Deficit 

FY 2014

Estimated Revenues 

FY 2014

$9,770

$575

$10,345

Debt Service 

Refinancing

$245

$9,525

$9,770

Built-in deficit 

financing

$820

* The FY2014 GF deficit represents a reduction of 65% when compared to audited June 30, 2012 deficit results, 63% when compared to preliminary FY2013 

deficit projection as of January 31, 2013, and a reduction of 37% when compared to most recent estimates of the FY2013 deficit. 15

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FY 2014 Q1 revenues are above estimates...

General Fund July-September (Q1) preliminary revenues are higher by (i) $88 million above FY 2013 

Q1 results and (ii) $10.4 million over budgeted estimates for FY 2014 Q1.

16

$0 $200 $400 $600 

Individual

Corporations

Non-Resident Witholdings

Sales and Use Tax1

Property Taxes

Foreign (Act 154)

Alcoholic Beverages

Tobacco Products

Motor Vehicles

Off-Shore Shipment Rum Excise

Others FY 2013 Results

FY 2014 Results

$0 $200 $400 $600 

Individual

Corporations

Non-Resident Witholdings

Sales and Use Tax

Property Taxes

Foreign (Act 154)

Alcoholic Beverages

Tobacco Products

Motor Vehicles

Off-Shore Shipment Rum Excise

Others FY 2014 Budget

FY 2014 Results 

Q1 FY 2013 vs. Q1 FY 2014 FY 2014 Q1 Budget vs. FY 2014 Q1 Results

* Detailed revenue numbers are available in the Appendix A. 

FY 2013 YTD Results: $1,611 million

FY 2014 YTD Results: $1,699 million

FY 2014 YTD Budget: $1,688 million

FY 2014 YTD Results: $1,699 million

1 Sales and Use tax revenues flow to COFINA until receiving the Pledged Sales Tax Base Amount.

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...and Sales Tax Fiscal YTD revenue is also above projections

SUT Revenues for FY 2014 Q1 were $16 million higher than for the same period in 

FY2013, even without the full effect of SUT base expansion.

17

July-September (Q1) preliminary SUT collections of $305.3 million are 

(i) 5.5% above the same period of FY 2013 and (ii) 1.3% above budgeted estimates.

$301 $305 

$200 

$220 

$240 

$260 

$280 

$300 

$320 

$340 

FY 2014 Budget FY 2014 Actual

FY 2013 Results vs. FY 2014 Results FY 2014 Budget vs. FY 2014 Results

$289 

$305 

$200 

$220 

$240 

$260 

$280 

$300 

$320 

$340 

FY 2013 Results FY 2014 Results

+5.5% +1.3%

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FY2013 and FY2014 Expense 

Update

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Corrections to the overspending forecast during the 2nd Semester (January – June) of FY 2013: 

Excess Spending Estimate at Jan 2013 $140M

(-) Freezing of account balances per spending control Executive Order (transferred in June to the Dep. Ed.) $29M

(-) Department of Education year-end spending versus initial projections at January 2013 $32M

(-) Payment of excess sick leave for the Police Department covered with one-time transfer of non-General Fund balance $30M

(-) Payment of excess sick leave for certain agencies paid with non-General Fund, internal sources (fee income, federal) $28M

(-) Additional factors (slowdown of spending due to transition effect; austerity measures; conservative forecast) $76M

• Appropriations for specific purposes. 

Three year life. Obligated as 

expenses at FY-end regardless of 

uncommitted balance.

• Debt service, public health 

insurance, public corporation 

subsidies, retirement special 

laws, and pre-legislated formula 

based contributions to the 

UPR, Judicial Branch and 

Municipalities, among others

• Operating cost of the agencies of the 

Commonwealth of Puerto Rico. 

Unobligated balance released as 

surplus at FY-end, except for carryforward of the Dep. Ed.

• Includes: Payroll (including employer 

contributions); operating expenses 

such as 

facilities, transportation, services 

and materials; and ―non-distributed‖ 

lump sum appropriations.

3,981 3,981 

-

FY 2013 Budget FY 2013 Actual Balance

5,101 

56

5,045 

FY 2013 Budget FY 2013 Actual Balance

Budget vs. Actual - Special Appropriations 

(1)

Budget vs. Actual - Joint Resolution (1)

$3,981

$5,101

FY 2013 General Fund Budget

Joint 

Resolution Special 

Appropriations1

(In $ millions)

(1) All results per PRIFAS Central Accounting System balances, as adjusted by OMB, in its best judgment, to reflect pending obligations or disbursements, unsynchronized independent

platforms at different agencies, and other adjustments. As with all estimates, final results will vary. At this date, with the Department of Education final balance certified, we

expect no substantial changes to the outlook.

A

B

(In $ millions, at June 30) TOTAL - $9,082M

Includes

$47M

Dep. Ed.

surplus as

carryforward

reserve

-$56M

+

Year End Excess (+) or Under (-) Spending Estimate at Sep 2013

(In $ millions, at June 30)

FY 2013 Preliminary Expense Results show a $56 million 

under spending vs. budget overview

19

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FY 2014 Approved Budget –

Non Discretionary Pre-Legislated Expenses

UPR Formula

Judicial Branch Formula

Municipalities Formula & Legislature (Fixed)

General Obligations & 3rd Party Debt

Retirement Systems – Special Laws

Debt to GDB

Public Health Insurance Special Appropriations - Agencies/Programs

Special Appropriations – OMB Custody

Contributions to Legislature

Contributions to Municipalities

Special Appropriations – To Public Corp’s

Department of Education – Operating Cost

Department of Education - Payroll

All Other Agencies - Payroll

Non Discretionary Semi Discretionary Discretionary

All Other Agencies – Operating Cost

Total Discretionary

$5,435M

56%

Total Semi 

Discretionary

$1,168M

12%

Non Discretionary Expenses - $3,167M

UPR Formula

Municipalities & Legislature Formulas

Retirement System – Special Laws

Judicial Branch Formula

$834M

$480M

$691M

$349M

General Obligations and 3rd Party Debt $521M Formulas

In $ millions

Debt

Retirement 

Systems

Total Non 

Discretionary 

$3,167M

32%

Debt to GDB $291M 20

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FY 2014 Approved Budget –

Semi-Discretionary Expenses (Primarily Entitlements and Contributions)

Total Non 

Discretionary 

$3,167M

32%

Non Discretionary Semi Discretionary Discretionary

Public Health 

Insurance

OMB Custody

Semi Discretionary Expenses - $1,168M

Public Health Insurance – ASES (Public Corporation)

Contributions to Municipalities

Special Appropriations - OMB Custody

Operational Subsidies – Public Corporations

Contributions to Legislature

$895M

$39M

$104M

$96M

$34M

In $ millions

Total Discretionary

$5,435M

56%

Total Semi 

Discretionary

$1,168M

12%

Operational 

Subsidies

Municipalities

Legislature

21

UPR Formula

Judicial Branch Formula

Municipalities Formula & Legislature (Fixed)

General Obligations & 3rd Party Debt

Retirement Systems – Special Laws

Debt to GDB

Public Health Insurance Special Appropriations - Agencies/Programs

Special Appropriations – OMB Custody

Contributions to Legislature

Contributions to Municipalities

Special Appropriations – To Public Corp’s

Department of Education – Operating Cost

Department of Education - Payroll

All Other Agencies - Payroll

All Other Agencies – Operating Cost

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Total Non 

Discretionary 

$3,167M

Total Semi 

Discretionary

$1,168M

32% 12%

Non Discretionary Semi Discretionary Discretionary

Payroll

Non Payroll

Non Payroll Expenses - $1,782M

Subsidies and Incentives

Non Distributed Appropriations

Purchased Services

Transportation

Others

Equipment

Federal Funds Matching

Professional Services

Materials

$151M

$398M

$257M

$146M

$106M

$90M

$55M

$32M

$15M

In $ millions

Total Discretionary

$5,435M

56%

PBA Rent (Excluding Debt)

PREPA & PRASA

$214M

$149M

Rent and Utilities $532M

*Reconciliation with Joint Resolution for Operating Expenses: Discretionary Expenses of $5,435M plus (i) add-back $171M in PBA Rent that were reclassified as Non Discretionary - Debt 

Service; (ii) add-back of Legislature budget of $119M that were reclassified as Non-Discretionary – Legislature; and (iii) subtract Special Appropriations ($351M) which are substantially 

Discretionary in nature but not included in the Joint Resolution for Operating Expenses. This reconciles with the $5,375M in Joint Resolution total appropriations.

22

UPR Formula

Judicial Branch Formula

Municipalities Formula & Legislature (Fixed)

General Obligations & 3rd Party Debt

Retirement Systems – Special Laws

Debt to GDB

Public Health Insurance Special Appropriations - Agencies/Programs

Special Appropriations – OMB Custody

Contributions to Legislature

Contributions to Municipalities

Special Appropriations – To Public Corp’s

Department of Education – Operating Cost

Department of Education - Payroll

All Other Agencies - Payroll

All Other Agencies – Operating Cost

FY 2014 Approved Budget –

Discretionary Expenses (Commonwealth Agencies)

Case:17-03283-LTS Doc#:3126-26 Filed:05/23/18 Entered:05/23/18 11:45:37 Desc:

Exhibit CW PR Investor Webcast Page 23 of 74
Year-over-Year Change in Adopted General Fund Budget (in millions) 

$292 

$202 $122 $616 $121 -$49 $72 

FY 2013 Debt Payment Retirement

Contributions

Others Change in Dep

Education Budget

Change in Other

Operating

Expenses

FY 2014

+$171M

PBA Debt

+$14M

TRANS

+$73M Other 

Debt

+$46M 

Additional 1% 

Payroll

+$140M ERS 

Additional 

Contribution

+$77M 

UPR Formula 

+$13M

Public Health 

Insurance Plan

+$5M

Other NonOperating.

Budget Changes in Non – Discretionary and SemiDiscretionary Funds

-$16M Payroll

-$3M 

Operating 

Expenses

-$30M 

Appropriations

+$32M Payroll

+$89M 

Operating 

Expenses

Budget Changes in 

Discretionary Funds

+$37M Act 70-

11 New 

Annuities

-$21M Other 

Special Laws

+6M

Judicial 

Formula

Increase 

partially 

compensates 

for $185M in 

Non General 

Fund Sources 

used during 

FY13 Dep. 

Education 

Operations

$9,770

$9,082

+$34M GO’s

+$21M

Under OMB 

Custody 23

FY 2014 Approved Budget –

Detail on Appropriation Increments

Case:17-03283-LTS Doc#:3126-26 Filed:05/23/18 Entered:05/23/18 11:45:37 Desc:

Exhibit CW PR Investor Webcast Page 24 of 74
• Not all of the year over year reduction flows into

budget vs actual savings since

- reserves of ~$140 million for one-time

liquidation payments were budgeted or have

since been transferred to OMB custody and are

excluded from the budget figures

- some payroll savings were already built into the

budget, particularly to cover previously agreedupon collective bargaining increases

- Budget includes other adjustments upward or

downward, including higher annuity payments

for those retirees under Act 70 incentive

program

• OMB has issued re-hiring guidelines with respect

to employees that retired on June 30 due to the

effect of Act 3 Employee Retirement System

Reform. A limited number will be rehired.

587.5

583.9

FY 2014 Budget FY 2014 Actual

• Reduction primarily due to employee attrition

from Act 70 (early retirement); unusual

retirement pattern due to the enactment of Act 3

ERS Reform; and austerity in hiring and rehiring

measures, including political appointees.

• Figures exclude payroll at 22 smaller agencies

with autonomous platforms that have a separate

payroll from Treasury (for example, the State

Elections Commission; Office of the Comptroller;

et cet).

616.8 

583.9 

FY 2013 FY 2014

Year over Year Payroll (Jul to Sept)

Budget vs Actual Payroll (Jul to Sept)

1

2

-5.3%

(In $ millions)

(In $ millions)

-0.6%

-32.9

-3.6

Department of Education

• These numbers do not include the

Schoolwide Program mixed federal

and state funds pool, which covers

much of the payroll at the individual

schools. Not charged as a payroll

account but rather a non-distributed

appropriation. The process of

allocating expenses to state or

federal has a lag.

• Dep. Of Education as of August 31st

reported projected expenses over

budget, mostly related to summer

hiring for the new school year.

However, this is preliminary and

corrective measures are expected to

be effective so that an over-spending

forecast is not currently warranted.

Corrective measures include

carryforward reserve; applicable of

eligible federal resources, actions to

reduce security & transportation;

application of surpluses at other

agencies and overall OMB

contingencies.

• Going forward, teachers retirement

system reform will also probably

result in attrition, representing an

opportunity for school consolidation

and payroll adjustments.

FY 2014 Approved Budget –

YTD Expenses (Q1 – July to September 2013)

Payroll accounts (excluding Schoolwide 

appropriation) represent ~$2.6 billion or 

27% of the General Fund Budget

24

Case:17-03283-LTS Doc#:3126-26 Filed:05/23/18 Entered:05/23/18 11:45:37 Desc:

Exhibit CW PR Investor Webcast Page 25 of 74
Cumulative Headcount Reduction – January to August 2013 (By Information Source)

• Relies on payroll surveys of actual salaried employees.

• Relies on polls from a statistical sample. Depends on selfreported employer classification.

• Figures are self reported by agencies. May include statistical

input for blank data. Includes all sources, state and federal.

• Includes only employees covered by General Fund sources and by 

Schoolwide mixed state and federal funding pool. 

PR Department of Labor – Payroll Register

PR Department of Labor – Workforce Poll

Office of the Comptroller 

Dep. Treasury – Payroll Database (1)

Source Scope Comments

• Includes all government employees, including

Municipal, Federal, and Public Corporations

• Monthly official statistics from the Statistics Bureau of

the Dep. of Labor.

• Includes government agencies whose operating expenses

are funded by the Budget Joint Resolution. Excludes, for

example, UPR, Judicial Branch and Municipalities.

• Excludes 22 smaller agencies funded by General Fund

remittances whose payroll is independent from the

central Treasury System, except for the Police, which

was included as self-reported.

7,071 Attrition

5,743 Hires

1,328 Net

DEPARTMENT OF 

EDUCATION

5,841 Attrition

1,859 Hires

OTHER CENTRAL 

GOVERNMENT

3,982 Net

(1) Data from RHUM Dep. Treasury payroll database extracted by manual queries, subject to data quality issues. Should be used directionally only and not as a valid statistical source.

Calendar YTD Cumulative Headcount Reduction –

January 2013 – August 2013

25

5,310 

8,485 

18,000 

19,600 

8,362 

January February March April May June July August

Case:17-03283-LTS Doc#:3126-26 Filed:05/23/18 Entered:05/23/18 11:45:37 Desc:

Exhibit CW PR Investor Webcast Page 26 of 74
Agenda

1 Principal Credit Accomplishments

2 Revenue and Expense Update

3 Economic Development

4 Financial Highlights

5 Concluding Remarks

Case:17-03283-LTS Doc#:3126-26 Filed:05/23/18 Entered:05/23/18 11:45:37 Desc:

Exhibit CW PR Investor Webcast Page 27 of 74
Near-term goal

Shore up and diversify the economy by 

leveraging Puerto Rico's competitive advantages 

and consolidating its productive base

Long-term goal

Build sustainable competitive advantage with a 

diversified, adaptive economy and workforce 

driven by technology and innovation

• Defend anchor industries while diversifying job sources on the Island

• Stimulate local entrepreneurship – drive growth of small and medium enterprises (SMEs)

• Support Puerto Rico’s status as a stable, business-friendly jurisdiction

• Take full advantage of opportunities tied to Puerto Rico's relative fiscal autonomy

By beginning of 2016

Over 90,000 jobs created

$6 to $7 billion in incremental GDP

By beginning of 2018

Over 130,000 jobs created

$10 to $12 billion in incremental GDP

Goals

Policy 

Priorities

Impact

1

2

3

4

Puerto Rico Economic Roadmap: Overview

Build upon Puerto Rico's historic strengths to achieve a more diversified, 

knowledge-driven economy that addresses the challenges of globalization and 

seizes upon emerging opportunities

Vision

27

Case:17-03283-LTS Doc#:3126-26 Filed:05/23/18 Entered:05/23/18 11:45:37 Desc:

Exhibit CW PR Investor Webcast Page 28 of 74
• Seize our capabilities to provide high-quality products and services at competitive costs

• Leverage our unique geographic positioning between the US, Latin America, and the Caribbean

• Identify and win emerging opportunities – sectors and niche markets

• Bring technology and innovation to build upon historic strengths and "move up value chain"

Four themes drive the focus on and strategies behind the priority sectors

Five priority sectors identified

• Infrastructure investment required to support growth in sectors and boost long-term competitiveness (e.g. 

airports, seaports, roads etc.)

• Strategic initiatives such as developing Roosevelt Roads and the Science City that can add significant long-term lift to 

Puerto Rico's economy 

Investments in infrastructure will support longer-term competitiveness 

Strategic Priorities Global

Life 

Sciences

• Defend traditional Pharmaceutical base and pursue innovative opportunities (generics, biologics, 

contract manufacturing)

• Consolidate Puerto Rico's position as a global manufacturing hub for medical devices

• Bolster Puerto Rico as the Center for Scientific R&D in the Americas (Agricultural Biotechnology)

Knowledge 

Services

• Become the Knowledge Services Center of the Americas 

• Pursue niche plays to grow Insurance and Financial Services

Tourism

• Re-capture historic strengths in tourism to become a premier U.S. and global travel destination

• Additionally, target emerging niche markets including ecotourism, medical, cultural and sports 

tourism

Internal

SMEs • Build world-class SME support through a full-suite of coordinated programs targeting SMEs at all 

levels of development

Agriculture • Reduce reliance on food imports by investing in high-productivity agricultural production

28

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Exhibit CW PR Investor Webcast Page 29 of 74
Recent successes underline Puerto Rico's potential (I/II)

Area Recent wins

Life 

sciences

Biopharma manufacturing

• Expansion of Johnson & Johnson with 308 new jobs and $226 million in 

investment

• Expansion of Bristol Myers Squibb with the creation of 100 new jobs and an 

investment of $200 million in expansion and renovation of the physical plant and 

factor equipment

Medical devices manufacturing

• Expansion of CooperVision’s manufacturing facilities attracting $250 million 

investment and 350 new jobs

• Expansion of Covidien's manufacturing facilities attracting 200 new jobs

• Expansion of Saint Jude Medical with the creation of 150 new jobs over a period 

of 5 years, with estimated payroll expansion worth $6.2 million

Knowledge 

services

• Expansion of IBM / True North with the creation of 400 new jobs

• Expansion of AON Hewitt with the creation of 200 new jobs

Tourism

• Increased air access (Southwest to Orlando, Avianca to Bogota, expanded 

Caribbean services via Seabourne); with focus on LatAm. expansion ongoing 

(e.g. Brazil)

• Cruise ships visits increased 84% in August 2013 vs. year before and targeted 

incentives in place to drive traffic in years to come, supported by Pier 3 

infrastructure improvement

• Over 900 hotel rooms under construction and hundreds more in the pipeline

29

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Exhibit CW PR Investor Webcast Page 30 of 74
Recent successes underline Puerto Rico's potential (II/II)

Area Recent wins

Other key 

wins

Jobs and investments

• Commitments for 5,860 new jobs in small and medium-size enterprises under 

the incentives of the Jobs Now Act

• Commitments for over 7,500 new jobs under incentives offered by PRIDCO

• Federal contract win: $137 million 3-year military apparel mfg contract worth 

2,200 jobs

• Putnam Bridge Company to invest $450 million in renovating Marina Puerto 

Del Rey, creating up to 400 construction jobs and up to 500 permanent jobs

• Paulson & Co. acquired an 80% interest in the Bahía Beach Resort & Golf 

Club, including the St. Regis Resort, and plans to invest $500 million in further 

development

Recognition around the world

• Ranked #30 in 2013 World Economic Forum ranking, higher than last year and 

top Latin American country

• Included in FutureBrand Top LatAm countries for first time (ranked in top ten)

Promising 

leads

• Outreach negotiations at advanced stages with multiple new KS players

• Life sciences: Promising opps. in emerging areas (e.g. Generics, Med. Devices)

Supporting 

reforms

• Energy transition to natural gas has begun, first plant converted June 2013; 

Major Aguirre plant scheduled for early 2015

• Plan to increase share of energy produced with natural gas from 24% to 72% by 

2017

• Permitting IT systems improvement plan in place and contracted

30

Case:17-03283-LTS Doc#:3126-26 Filed:05/23/18 Entered:05/23/18 11:45:37 Desc:

Exhibit CW PR Investor Webcast Page 31 of 74
1. Jobs added in non-focus sectors based on La Fortaleza's job tracker, but excludes jobs which overlap w/ strategic initiatives in Economic Roadmap (eg. Jobs Now). Assumes all committed jobs will be created 

within 18 months, given current run-rate of 22k jobs created in 7 months. 2. Includes strategic bets (RR, Port of the Americas); 3. Total number of jobs will depend on degree of overlap between indirect jobs 

created from strategic initiatives and jobs projected outside of strategic initiatives; Note: Initiative job impacts estimated by PR initiative leads w/ BCG validation; Sources: BCG economic model, PR Economic 

Planning Board, Bureau of Labor Statistics, Bureau of Economic analysis, Initiative leads, La Fortaleza jobs tracker

16 31

49

11

9

17

48

71

0

50

100

150

Jan, 2018

(5 years)

130 – 150

9

Jan, 2016

(3 years)

90 – 100

6

July, 2014

(18 months)

35 – 45

3

3

Strategic initiatives

Infrastructure projects 2

Seasonal jobs

Indirect jobs

employees (k)

Jobs created by strategic initiatives in 

Economic Roadmap

The economy is expected to benefit from imported capital which will 

create jobs and generate tax revenues

Estimated jobs creation and resulting tax revenues

0

100

200

300

400

500

$M (fixed 2012)

FY2017

$350- $500M1

FY2016

$250 - $350M

FY2015

$150 - 250M

FY2014

$50 - 100M

Potential gross tax revenue from 

Roadmap's strategic initiatives

1. Upper range assumes historical average effective tax rates from 2008 to 2012 multiplied by incremental GDP over baseline. Note that recent tax changes and revenue collection efforts may 

push average effective tax rates upwards in the future. 2. Includes impact from both direct and indirect jobs created. Source: Puerto Rico Planning Board, Puerto Rico Treasury Department, BCG 

analysis 31

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Exhibit CW PR Investor Webcast Page 32 of 74
Proposed Implementation Taskforce structure

Project Delivery Team

Steering Committee Tax reform 

advisory group

Executive branch 

efficiency group

• Coordinate / track overall effort

• Ensure momentum

• Liaise across groups / with outside stakeholders

• Escalate issues as needed

• Support spread and use of best practices

• Give overall direction

• Make executive decisions

• Provide high-level sponsorship / clear obstacles

• Leverage connections / liaise at high level

• Own, manage, and execute against workplans

• Produce materials and conduct outreach

• Coordinate and implement supporting activities (e.g., real estate)

• Implement initiatives to streamline operations, improve 

performance, and launch projects

• Coordinate efforts with other relevant agencies

• Push for legislative / policy reforms as necessary

Special Committees

Priority sectors – will need to organize to 

execute

Other strategic initiatives – will need to build 

capabilities

Working teams

1

2

Knowledge 

services

(PRIDCO)

SME

(CCE)

(EDB)

Pharma.

(PRIDCO)

Tourism 

(PRTC)

Med devices

(PRIDCO)

Enablers

(PREPA, 

OGPe, Edu, etc)

Strategic 

projects

(Science 

Trust, Rvlt. 

Roads)

3

Reporting 

outreach

(GDB, PRTC, 

DDEC)

32

Case:17-03283-LTS Doc#:3126-26 Filed:05/23/18 Entered:05/23/18 11:45:37 Desc:

Exhibit CW PR Investor Webcast Page 33 of 74
Cumulative direct jobs estimates by initiative (I/II)

$9,525

Group Initiative 2013 2014 2015 2016 2017 Description

Life 

sciences

Biopharma. mfg.

- 400 1,100 1,800 2,600 

1. Defend pharma: Goal to defend projected jobs 

loss. 2. Generics, co-mfg, supply chain: Goal of 5 

plants / packing operations each

Medical devices mfg

400 800 2,700 4,500 5,800

Target of 40 new projects in 5 yrs. Attract global 

giants, cardiac, high growth segments.

Ag-bio (scientists)

100 200 300 400 500

Jobs growth driven by creation and expansion of seed 

research laboratories.

Ag-bio (contract farmers)

400 800 1,300 1,900 2,600 

Assumes 5x contract farmer jobs created per 

scientist job created. Contract farmer works 8-12 

months/yr

Services

Knowledge services 

750 1,600 3,200 5,600 8,700 

Target of 28 new co's in 5 yrs. Attract ITO, BPO, KPO, 

Integrated outsourcers, Aerospace & defense.

Insurance & financial 

services 40 60 150 200 300

Target attract 90 insurers incl. 15 class 4 co's in 5 

yrs.

Tourism 

Traditional tourism

400 2,900 5,500 6,500 7,500

90% jobs growth is in new hotel, diversifying 

offerings

Medical tourism & related 

health services

- 300 500 900 2,700 

Based on PRHA projections for US and LatAm market

penetration

SMEs SMEs

3,900 7,500 7,700 8,100 8,300

Jobs mostly driven by Jobs Now. Others include 

incubator, Urban Center programs.

Agriculture 

Traditional agriculture

2,500 5,000 7,500 10,000 10,000 

Jobs driven by 5.5k jobs in coffee, 4k in sugarcane 

and 500 jobs in greenhouses

Agriculture - seasonal 

workers 1,600 3,300 4,900 6,500 6,500 Seasonal workers for coffee picking

Other

Film & media production

- 100 100 200 200 Jobs driven by Film Co's incentive promotions

MRO

- - 400 400 400

Potential MRO facility – currently in discussion w/ 

co's

Military apparel mfg

- 2,200 2,200 2,200 2,200 Jobs growth from one large Federal contract.

INITIATIVES TOTAL 10,100 24,900 37,300 49,200 58,400

33

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Exhibit CW PR Investor Webcast Page 34 of 74
$9,525

Group Initiative 2013 2014 2015 2016 2017 Description

Strategic

bets

Roosevelt Roads

- 100 1,600 1,700 1,700 

Construction of Industrial Zone, Academic 

project, Eco-tourism, Marina

Science Trust

- - 100 200 300 

Estimates for Oso Blanco, Cancer Center, 

Biomolecular bldg, & Bioprocess Dev't 

Complex – to be refined

Port of the Americas

- - 400 400 400 350 operating jobs once begins operations.

Strategic bets total

- 100 2,000 2,200 2,300 

Infrastructure

Airport P3

- 600 600 600 600 

PPP w/ $195M investment in 3yrs, $1,400M 

in 40 yrs

Highways (PR-22)

- - 4,000 4,000 4,000 $1B investment across 2015-2017.

Caguas Commuter Rail

- - 1,200 1,200 1,200 

$400M investment. Currently in feasibility 

/ desirability phase.

PRASA (water)

- 1,300 1,300 1,300 -

$354M construction for Valencia water 

treatment plant and reservoir

Correctional facilities

- - 900 900 900 

$220M investment. Feasibility / 

desirability phase set to finish Oct. 2013

Natural Gas Infrastructure 

- 1,300 1,300 - -

$180M-$300M investment . Feasibility / 

desirability phase set to finish Dec. 2013

Infrastructure total

- 3,200 9,300 8,000 6,700 

TOTAL DIRECT JOBS 10,100 28,200 48,700 59,400 67,500 

Cumulative direct jobs estimates by initiative (II/II)

34

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Exhibit CW PR Investor Webcast Page 35 of 74
Agriculture, Tourism and SMEs 

Case:17-03283-LTS Doc#:3126-26 Filed:05/23/18 Entered:05/23/18 11:45:37 Desc:

Exhibit CW PR Investor Webcast Page 36 of 74
Why this sector?

Once a major component of the 

Puerto Rican economy, still 

significant room for growth

• Puerto Rico currently produces 

only 15-20% of total food needs

• Opportunity to reduce roughly 

$3.5B in agricultural imports per 

year, keeping money in local 

economy

New opportunities for 

innovative, high-productivity 

agricultural production

• Room to expand both cultivated 

land and modern production 

technology

Why PR can win Key initiatives

Focus sector Vision

Agriculture

Reduce reliance on food imports by building on Puerto Rico's traditional 

strengths and increasing capacity for high-productivity industrial agricultural 

production

Favorable climatic conditions 

• Allow PR to have several harvests 

per year, including year-round 

mango production

Strong internal infrastructure

• Allows quick and efficient 

transportation of high-value 

crops

Close proximity to the U.S.

• Ability to access one of the 

largest agricultural importers in 

the world

Highly skilled and technically 

proficient workforce

Expand dairy production – Support 

partnerships with local dairy 

producers and processing facility 

workers

Invest in sugarcane processing –

Partner with the Puerto Rican Rum 

Association to invest in the expansion 

of sugarcane production and 

processing

Build high technology greenhouses -

Develop five high technology 

greenhouses to pilot the production 

of high-value vegetables for export 

markets

Expand coffee cultivation – Increase 

the acreage available for coffee 

production by 16,000 acres

Target Growth Sector: Agriculture

36

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Exhibit CW PR Investor Webcast Page 37 of 74
Target Growth Sector: Tourism

Why this sector?

Tourism is a fundamental driver of 

the local economy and job creation 

• Represents 6% of total GDP

Puerto Rico's tourism sector has 

significant room for growth

• Global average of 9% GDP

• Opportunity to meet global 

average

U.S. economic recovery provides 

base to drive tourism sector 

recovery

• Puerto Rico highly dependent on 

U.S. tourism, which declined 

significantly in 2008-2009, but 

has been steadily improving since 

Why PR can win Key initiatives

Focus sector Vision

Tourism Capitalize on Puerto Rico's diverse tourism offerings to develop new niche 

markets and become premier U.S. and global travel destination

Most developed air access within all 

the Caribbean

• Makes travel to/from PR faster and 

more convenient than any other 

Caribbean destination

Relationship with the U.S.: 

• Tourists do not need passports to 

come to the Island (making PR easy 

for short-term vacation segment)

• Tourists have the advantage of being 

in U.S. territory where medical and 

legal services are similar to their 

home states, making PR a safer 

destination.

Highest skilled labor force in the 

Caribbean, largely bilingual

Modern infrastructure 

(roads, convention and meeting 

facilities, etc)

Promote and market Puerto Rico – Roll 

out "Five Star Reviews" and "Puerto Rico: 

All-Star Island" campaigns

Improve air and maritime access –

Expand into Lat Am., recover position as 

hub of Caribbean, grow cruise 

access, rebuild European connections

Tourism product development - Expand 

range of accommodations, from ultra 

luxury to urban bed and breakfasts. 

Grow niche markets – Particular 

emphasis on 

luxury, nature, adventure, gastronomy, a

nd sports tourism

Strengthen quality and service – Ally 

with key academic institutions to 

develop tourism and quality and service 

educational programs

37

Case:17-03283-LTS Doc#:3126-26 Filed:05/23/18 Entered:05/23/18 11:45:37 Desc:

Exhibit CW PR Investor Webcast Page 38 of 74
Tourism: 408 jobs created and 1,025 committed (Jan – Sep 2013)

408

277

790

225

1,025

0

500

1,000

1,500

Created / Committed Jobs

Hotels opened All Tourism

this year

Hotels under 

construction

Tourism 

products

57 10

Airlines 

and cruises

74

Casino and 

gaming

1,433

67

74

Created

Committed

Source: TOURISM Company, Puerto Rico

Jobs committed and created by category, as of Sept 24th

38

Case:17-03283-LTS Doc#:3126-26 Filed:05/23/18 Entered:05/23/18 11:45:37 Desc:

Exhibit CW PR Investor Webcast Page 39 of 74
Key Tourism metrics are up in 2013 compared to 2012

Occupancy (%) as 

of April 2013

Average Room Rate 

($) as of April 2013

Cruise Passenger 

Movement

Airport Turnover 

(Total Passengers)

70% 67%

0%

50%

100%

+3%

%

FY 2012 FY 2013

$0

$50

$100

$150

$200

FY 2013 

(YTD)

$124.86

+5.4%

FY 2012 

(YTD)

$131.63

$/room

0

500

+77k

Apr-Aug 2013

Passengers (k)

270k

Apr-Aug 2012

347k

10

0

5

8.4M

FY 2012

8.1M

FY 2013

Passengers (M)

+2.7%

Source: PRTC - Registration and Occupancy %/ Average Room Rate (ARR$) Report Surveys, April 2013; Puerto Rico Ports Authority

39

Case:17-03283-LTS Doc#:3126-26 Filed:05/23/18 Entered:05/23/18 11:45:37 Desc:

Exhibit CW PR Investor Webcast Page 40 of 74
Target Growth Sector: Small & Medium Size Enterprises

Why is this sector important?

Small and medium-sized 

enterprises (SMEs) are the largest 

sector in Puerto Rico's economy –

representing ~65% of employment1

and up to 90% of companies2

SMEs have struggled to recover 

from the economic downturn –

small business bankruptcies in PR 

increased by over 8% from 2009-

2011, compared to a decrease in 

7.5% for the U.S. overall3

Where is Puerto Rico today? Key initiatives

Focus sector Vision

Small and 

Medium- Sized 

Enterprises

Build world-class SME support through a full suite of coordinated programs 

targeting SMEs at all levels of development

Today, there is no overarching 

strategy to support and grow SMEs

• ~ 11 government agencies and 

nongovernmental organizations 

(NGOs) are involved in supporting 

SMEs

• Many have overlapping missions –

offering redundant services or 

leaving open gaps

• No central coordination mechanism 

to ensure that SMEs receive needed 

support (e.g., Puerto Rico Trade 

and Export Company cannot 

expedite loans from the Economic 

Development Bank)

Because services are spread through 

many agencies, additional burden on 

small businesses seeking support

• No "one-stop shop" where SMEs can 

seek help in a central location

• Improve coordination of SME 

support services around the Island

• Support entrepreneurial culture 

and development of innovative 

companies through educational 

programs, mentoring, and the 

establishment of incubators

• Help SMEs start, expand, and 

succeed through targeted 

incentives/credit, business advisory 

programs, and coordinated financing

• Take mature SMEs to the next level 

through trade and export 

programs, taking advantage of 

increased air and sea connectivity to 

Latin America and other key trade 

partners

1. "Puerto Rico: Small and medium-sized business sector initiatives for job creation." Presentation by the Economic Development Bank, May 2012. SME defined here as is a 

company with up to 250 employees and less than $5M in sales. 2. U.S. Census Bureau, 2011 County Business Patterns. SMEs defined here as a company with up to 20 

employees; Nearly 99% of all establishments counted had fewer than 250 employees. 3. Small Business Administration and the US Territories Small Business Profile 2012. 40

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Exhibit CW PR Investor Webcast Page 41 of 74
1. Total approved cases by LEA committee

Source: Consejo de Empleos a Corto Plazo, La Fortaleza (Week of Sep 24, 2013)

933 5,860

2,002

2,925

0

2,000

4,000

6,000

Developing Total

Businesses

Expansion 

of Existing 

Businesses

# Jobs

New 

Businesses

# companies 186 55 102 343

Jobs Now Act Overview

Jobs Now Act objective is to foster immediate job 

creation across the Island

• Eases the permitting process to enable the 

establishment and expansion of businesses

• Reduces costs of doing business by offering 

several tax and energy related credit incentives

Eligible businesses will then receive, the following 

incentives, among others:

• Discounts on worker compensation premiums to 

developing businesses (15 employees or less)

• Salary subsidies for hiring certain former public 

sector employees, women who are 40 or 

older, and indigent persons who are 25 or younger 

• Salary subsidies for certain new co-op businesses

• Property and municipal tax exemptions for new 

businesses 

• Special rental rates for certain PRIDCO and CCE 

properties

• Expedited application process for loans with the 

Economic Development Bank

• Credits for the payment of electricity

Jobs committed by type

of eligible business, as of October 2

Jobs Now Act Commitments: 5,860 jobs (Mar – Oct 2013)

41

Case:17-03283-LTS Doc#:3126-26 Filed:05/23/18 Entered:05/23/18 11:45:37 Desc:

Exhibit CW PR Investor Webcast Page 42 of 74
Life Sciences and Services

Case:17-03283-LTS Doc#:3126-26 Filed:05/23/18 Entered:05/23/18 11:45:37 Desc:

Exhibit CW PR Investor Webcast Page 43 of 74
Our goal is to position PUERTO RICO as a GLOBAL 

LEADER in the KNOWLEDGE ECONOMY, based upon 

our competitive advantages to generate:

 SUSTAINABLE ECONOMIC GROWTH 

 JOB CREATION

43

Case:17-03283-LTS Doc#:3126-26 Filed:05/23/18 Entered:05/23/18 11:45:37 Desc:

Exhibit CW PR Investor Webcast Page 44 of 74
 Protect existing industrial base

 Enable the expansion of existing 

companies through cluster strategies

 Attract new global (and local) 

companies to invest in Puerto Rico 

 Identify emergent segments that 

match Puerto Rico’s capabilities

Strategic Priorities

44

Case:17-03283-LTS Doc#:3126-26 Filed:05/23/18 Entered:05/23/18 11:45:37 Desc:

Exhibit CW PR Investor Webcast Page 45 of 74
Puerto Rico Strategic Clusters

Based on three major pillars:

Ag-Bio

Biotechnology Medical 

Devices

IT

Aerospace

Knowledge 

Services

Outsourcing

Textile / Military 

Apparel

Engineering 

and

Construction

Electronics

Pharmaceuticals

Regulatory, Financial and 

Institutional Environment Human Capital Infrastructure

45

Case:17-03283-LTS Doc#:3126-26 Filed:05/23/18 Entered:05/23/18 11:45:37 Desc:

Exhibit CW PR Investor Webcast Page 46 of 74
Puerto Rico is already a global powerhouse in Pharma, Biotech 

Medical Devices, Hi-Tech Manufacturing and Ag-Bio 

*Innovative driven country-highly specialized (WEF)/(Battelle Report 2012

46

Pharma Industries

Medical Devices Industries

Ag Bio Industries

Case:17-03283-LTS Doc#:3126-26 Filed:05/23/18 Entered:05/23/18 11:45:37 Desc:

Exhibit CW PR Investor Webcast Page 47 of 74
Target Growth Sector: BioPharma Manufacturing

Why this sector?

BioPharma manufacturing 

represents ~25% of PR's GDP

To date, ~17K people work in the 

sector

Special attention needed to 

preserve jobs in this sector

Focus to be placed in generics and 

biologics / biosimilars

• Generics sub-sector expected to 

continue fast growth

• Most new products in innovation 

pipeline are biologics 

• Biologic technologies require 

higher quality manufacturing 

sites

Why PR can win

• Defend existing Pharma 

operations 

• Opportunistically pursue 

generics and biologics / 

biosimilars

– I.e. support repurpose of 

assets

• Make innovative bets

– Establish contract 

manufacturing operation 

– Enable direct to retail 

distribution 

– Invest in education for 

advanced technologies

Key initiatives

PR is a proven, high-quality 

manufacturing location

Opportunity to acquire high quality 

plants at low prices

PR well suited for large batch 

production

• Benefit for biologics and niche 

drugs as they grow in scale

Low manufacturing cost compared 

to US and western countries

PR uniquely advantaged of 

potential contract manufacturing 

opportunity 

• High industry concentration 

• No IP concerns with generics

Focus sector Vision

BioPharma

manufacturing

Preserve Puerto Rico's status as key BioPharma manufacturing location and 

increase share of growing sub-segments (generics) & advanced technologies 

(biologics)

47

Case:17-03283-LTS Doc#:3126-26 Filed:05/23/18 Entered:05/23/18 11:45:37 Desc:

Exhibit CW PR Investor Webcast Page 48 of 74
Target Growth Sector: Medical Device Manufacturing

Focus sector Vision

Medical device 

manufacturing

Consolidate Puerto Rico's position as a global manufacturing hub for the medical 

technology sector

Why this sector?

The medical technology sector has 

seen significant growth over the 

past decade ($300B in sales with 7-

8% growth projected through 2020)

The U.S. med tech market is the 

world's largest (~$120 billion in 

sales in 2012)

U.S. manufacturers shifting to low 

cost and tax-advantaged locations 

abroad (e.g., Ireland, Latin 

America), in order to re-import to 

the U.S.

At $4.5B in exports, Puerto Rico 

supplies ~2% of global med tech 

export market, on par with 

Singapore

Med tech sector supports over 

19,000 jobs in Puerto Rico today

Why PR can win

Grow share from global giants 

already present in Puerto Rico –

Support process innovation and 

production of higher value products

Create the Cardiac Cluster of the 

Americas – Establish PR as a global 

destination for cardiovascular device 

manufacturing

Attract companies from highgrowth segments aligned with PR's 

strengths –

Orthopedics/trauma, minimally 

invasive surgery, and 

vision/ophthalmic devices

Attract med tech suppliers to 

establish an advanced supply chain 

ecosystem – Opportunity to create 

significant competitive advantage for 

Puerto Rico

Key initiatives

PR has a 50-year history of life 

sciences manufacturing experience

Puerto Rico has a competitive 

advantage given tax 

incentives, skilled workforce, and 

U.S. jurisdiction (FDA, IP 

protection)

Industry trends favor Puerto Rico's 

positioning

• Industry consolidation leading to 

larger facilities, manufacturing 

network optimization

• Affordable Care Act’s med device 

excise tax makes PR tax 

advantage more important

Opportunity to target companies 

seeking low-cost nearshore 

manufacturing for U.S. market

48

Case:17-03283-LTS Doc#:3126-26 Filed:05/23/18 Entered:05/23/18 11:45:37 Desc:

Exhibit CW PR Investor Webcast Page 49 of 74
Target Growth Sector: Agriculture Biotechnology

Why this sector?

Agricultural Biotechnology (R&D)

employment expected to increase 

by 5.5% annually

• Result of rapid adoption of 

biotech crop technology in 

developing countries

Why PR can win Key initiatives

Focus sector Vision

Agriculture 

Biotechnology Bolster Puerto Rico as the center for scientific crop R&D in the Americas

Major Ag Biotech companies are 

already operating in Puerto Rico: 

• Monsanto, IIIinois 

Crop, Pioneer, Ag Reliant 

Genetics, Dow Agro, Rice 

Tec, Syngenta Seeds, etc.

Puerto Rico offers major 

advantages to Ag Biotech 

companies:

• Positive weather and 

environmental conditions ideal 

for agriculture

• Quality labor force and employee 

availability

• Excellent soil quality

• Government incentives

• Easy transport to mainland U.S.

• Same regulatory environment as 

U.S.

Vertical integration of research 

activities within established 

companies – Explore possibility of 

integrating trait identification and 

selection laboratories and genetic 

modification of seeds with companies 

already on Island

Diversify and add research 

capabilities to existing companies 

in PR – Expand research on improved 

seed varieties to include greenhouse 

vegetables (tomato, bell pepper, etc) 

and sugarcane varieties

Grow the availability of contract 

research in Agriculture 

Biotechnology – Expand and diversify 

contract research opportunities to 

smaller companies operating 

throughout the world

49

Case:17-03283-LTS Doc#:3126-26 Filed:05/23/18 Entered:05/23/18 11:45:37 Desc:

Exhibit CW PR Investor Webcast Page 50 of 74
Target Growth Sector: Knowledge Services

Focus sector Vision

Knowledge 

Services

Establish Puerto Rico as a global center for the Knowledge Services industry, 

especially focused on near-shoring

Why this sector?

Companies are seeking to specialize in 

core business and outsource other 

activities

• Solid growth for KS in past 10 years

Outsourcing shifting from pure cost 

arbitrage (low-cost focus) to higher 

productivity, better workforce profile

• Trend favors Puerto Rico, given 

highly-trained and bilingual labor 

pool

Ease of operations becoming 

increasingly important

• Clients want more control over 

outsourcing operations

– Near-shoring, same time 

zone, ease of communications

• PR offers compelling proposition 

given proximity to mainland U.S.

• Talent pools in some areas becoming 

saturated (e.g., Chile, Costa Rica)

Why PR can win

Establish PR as a worldwide KPO 

hub: Provide knowledge services to 

clients worldwide, with focus on the 

Americas and mainland U.S.

Selectively go after integrated 

outsourcers: Large integrated 

outsourcers with presence across the 

sector, with high potential for job 

creation

Expand ITO and BPO sectors: Focus 

on clients with presence in the 

Americas, seeking to expand to 

U.S./Caribbean – promote software 

development

Build on initial progress to expand 

in Aerospace & Defense: Focus on 

U.S. industry across all KS 

sectors, with concentration in ER&D 

and support functions

Key initiatives

PR has convincing value proposition 

for America-focused near-shoring

• Low cost structure and solid tax 

incentives (Act 20, 22 and 73)

• Highly-skilled workforce, better 

trained than region's competitors

As U.S. jurisdiction, PR has access 

to industries with U.S. soil 

requirement

• PR ideal destination for US A& 

D, financial services

Recognized through high ranking 

from World Economic Forum 

(#30), higher than Chile, other 

competitors

50

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Exhibit CW PR Investor Webcast Page 51 of 74
Sample deals achieved YTD 2013 

Company Job Commitment / 

Date Segment

AON Hewitt 200 / February 2013 Knowledge Services

Covidien 200 / April 2013 Medical Devices

CooperVision 350 / April 2013 Medical Devices

IBM / True North 400 / May 2013 Knowledge Services

Proper International 2,200 / September 

2013 Military Apparel

Source: PRIDCO 51

Case:17-03283-LTS Doc#:3126-26 Filed:05/23/18 Entered:05/23/18 11:45:37 Desc:

Exhibit CW PR Investor Webcast Page 52 of 74
2,607

1,124

1,717

529

333 144 65

981 7,500

Job Commitments (January – September 2013): 7,500 

Job Commitments by Sector

Source: PRIDCO

4,000

6,000

8,000

2,000

0

# Jobs

Construction Other Total

and 

Engineering

Knowledge BioPharma Electronics IT

Services and 

Aerospace

Medical 

Devices

Textiles 

and Military 

Apparel

52

Case:17-03283-LTS Doc#:3126-26 Filed:05/23/18 Entered:05/23/18 11:45:37 Desc:

Exhibit CW PR Investor Webcast Page 53 of 74
Expected new jobs based upon ongoing negotiation:

9,280 in the next 12 months

1,152

780 800

2,732

417

770

1,530

2,717

521 410

2,900

3,831

0

1,000

2,000

3,000

4,000

Jobs in Pipeline

General Industries Life Sciences Knowledge Services Total

3 - 6 months

6 - 12 months

1 - 3 months

Life Sciences Sector includes: Pharmaceuticals, Bio Technology, Ag-Bio & Medical Devices

Knowledge Services Sector includes: Aerospace & Defense, Information Technology, telecommunications

General Industries Sector includes: Electronics, Engineering & Construction, Textile / Military Apparel, and Others

Jobs in Pipeline by Sector

53

Case:17-03283-LTS Doc#:3126-26 Filed:05/23/18 Entered:05/23/18 11:45:37 Desc:

Exhibit CW PR Investor Webcast Page 54 of 74
Agenda

1 Credit Accomplishments

2 Revenue and Expense Update

3 Economic Development

4 Financing Highlights

5 Concluding Remarks

Case:17-03283-LTS Doc#:3126-26 Filed:05/23/18 Entered:05/23/18 11:45:37 Desc:

Exhibit CW PR Investor Webcast Page 55 of 74
Manages all financings and capital market activities for 

the Commonwealth, its municipalities, agencies and 

public corporations

Fiscal Agent

Oversees the credit and financial management of the 

Commonwealth, its municipalities, agencies and public 

corporations

Lending 

Institution

Structures and approves all permanent financing and 

provides interim and permanent lending, together with 

private financial institutions, to government entities

1

3

2

Economic 

Development

Promotes investment in strategic projects to fuel 

economic development and growth

4

Financial 

Advisor

GDB promotes fiscal stability and economic development through 

four primary roles

55

Case:17-03283-LTS Doc#:3126-26 Filed:05/23/18 Entered:05/23/18 11:45:37 Desc:

Exhibit CW PR Investor Webcast Page 56 of 74
$3,882 

$4,043 

$5,086 

$5,634 

$10,599 

$15,224 

$25,575 

Municipalities

Appropriations Debt

Limited Obligations/Non 

Recourse/POBs

Commonwealth Guaranteed 

Debt

General Obligation Debt

Sales Tax / COFINA Debt

Public Corporations and 

Agencies

56

GDB, as fiscal agent, oversees the Commonwealth’s credit and 

approves the terms of any debt issuance

Puerto Rico outstanding debt by category as of June 30, 2013 (in millions)

The consolidated budget of the Commonwealth, its agencies, and instrumentalities, including federal 

funds, but excluding municipalities, is approximately $29 billion per year. 

Payable and secured solely from internal 

revenues of such corporations from rates 

charged for services or products or from 

specific external revenue sources

Payable and secured solely from Sales and Use Tax Revenues

Full faith and credit debt payable from and 

secured by General Fund revenues

Debt guaranteed by the Commonwealth’s full faith and credit 

(principally PBA guaranteed debt, which amounts to $4.3 billion)

Payable and secured solely from certain streams of revenue (e.g. payments under 

tobacco litigation settlements, federal housing assistance payments, annual 

allocation of HUD funds, and in the case of POBs, employer contributions to ERS)

Payable from budget appropriations or taxes, but not guaranteed 

by full faith and credit of the Commonwealth

Payable and secured solely by real and personal property taxes and municipal 

license taxes

Note: For a comprehensive description of the outstanding debt of the Commonwealth, its agencies and instrumentalities, see ―Commonwealth 

of Puerto Rico—Financial Information and Operating Data Report—DEBT—Public Sector Debt‖, dated October 15, 2013.

Case:17-03283-LTS Doc#:3126-26 Filed:05/23/18 Entered:05/23/18 11:45:37 Desc:

Exhibit CW PR Investor Webcast Page 57 of 74
US Avg: $7,355 per capita

PR: $15,956 per capita

Rank: #1 of 51

US Avg: $57,024 per capita

PR: $15,956 per capita

Rank: #51 of 51

US Avg: $2,390 per capita

PR: $2,805 per capita

Rank: #12 of 51

State Level Debt(1) State & Local Level Debt(2) State, Local, Federal Level Debt(3)

$5,376

$5,087

$4,976

$3,825

$3,787

$3,668

$3,122

$2,874

$2,847

$2,805

HI

CT

NY

AK

RI

DE

CA

IL

NH

PR

Rank

(of 51)

3

4

5

6

9

8

7

10

11

12

Puerto Rico Debt Per Capita vs the USA Comparison Analysis as of June 30, 2011

(in millions)

State

$15,956

$13,552

$9,971

$9,739

$9,500

$9,379

$9,340

$9,258

$8,991

$8,927

PR

NY

CA

NJ

NV

WA

HI

MA

IL

AK

Rank

(of 51)

1

2

3

4

7

6

5

8

9

10

State

$53,766

$53,690

$53,676

$53,042

$52,887

$52,819

$51,895

$51,698

$51,334

$15,956

MS

OH

NC

SD

WV

AR

MT

ID

WY

PR

Rank

(of 51)

42

43

44

45

48

47

46

49

50

51

*Source: US Bureau of the Census and the Government Development Bank for Puerto Rico

(1) For Puerto Rico State Debt includes GO debt.

(2) For Puerto Rico local debt includes debt of Municipalities and Public Corporations.

(3) US Federal Debt per capita is $49,669 

If one factors in the federal debt load, PR would rank last in outstanding debt per capita 

amongst all US jurisdictions*

State

57

GDB believes that any comparison of the public debt levels of Puerto 

Rico with the states should include state, local and federal debt

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Key Financial Highlights – GDB Bank Only* 

(preliminary and unaudited as of September 30, 2013)

* GDB serves a multi-purpose economic development mandate through the direct oversight of 5 subsidiaries. ―GDB Bank Only‖ 

information refers only to the bank’s operating activities, excluding subsidiaries and other component units. 

Loans, net: $9.08 billion

Capital Ratio: 18.2%

Assets 

$12.44 

Liabilities 

$10.17 

Net Assets 

/Capital 

$2.27 

$ In billions

The strength of GDB’s balance sheet enables it to continue providing 

liquidity support to the Commonwealth 

58

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Exhibit CW PR Investor Webcast Page 59 of 74
Investment Portfolio Composition 

($ in millions, mark-to-market)

59

September 30, 2013*

Money 

Market 

13%

US 

Agencies 

and 

Treasuries

56%

MBS

30%

Other

1%

• High-grade investment portfolio (98.6% > A-)

• Portfolio average life is 3.48 years

Market Value: $2.77 B

GDB’s investment portfolio consists primarily of high quality, liquid 

securities*

* Preliminary financial information is unaudited and subject to change as of September 30, 2013.

Case:17-03283-LTS Doc#:3126-26 Filed:05/23/18 Entered:05/23/18 11:45:37 Desc:

Exhibit CW PR Investor Webcast Page 60 of 74
Deposits**

$4,581 

(45%) Bonds & 

Notes

$4,995

(50%)

Repo

$437 

(4%)

Other

$75

(1%)

Diversified Funding Sources

 Approximately $5 billion in GDB notes 

provide locked-in rates and multiyear, staggered maturity structure.

 The primary source of short-term funding 

are public sector deposits ($4.1 billion).

 The Office of the Commissioner of 

Financial Institutions informed that there 

are currently approx. $2.8 billion in 

governmental deposits at private 

institutions, a significant portion which 

could be brought to the GDB in short 

order.

 GDB has nine Master Repurchase 

Agreements (MRAs) with primary dealers 

which provided aggregate REPO 

commitments in excess of $2 billion 

dollars as of September 30, 2013.

* Unaudited and preliminary financial information as of September 30, 2013.

** Includes demand deposits, CDs and private deposits.

Cost and Average Life of Funding Sources*

Average Cost Average Life

Liabilities 2.72% 2.70 Y

GDB has a diversified and stable source of funding

60

in $ millions

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Exhibit CW PR Investor Webcast Page 61 of 74
$389 

$481 

$876 

$269 $237 

$818 

$392 

$434 

$143 

$47 

$541 

$248 

$127 

$-

$250 

$500 

$750 

$1,000 

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2026 2027

Notes Outstanding – Total of $5 billion

61

* As of September 30, 2013. Outstanding amount distributed as of fiscal year.

FY

Staggered maturities of our Senior Notes' program reduce roll-over 

risk

in $ millions

Case:17-03283-LTS Doc#:3126-26 Filed:05/23/18 Entered:05/23/18 11:45:37 Desc:

Exhibit CW PR Investor Webcast Page 62 of 74
Projected Transaction Calendar*

Sales Tax Financing Corp. (COFINA)

Restructuring FYs 2013-2014 (103)

Highways and Trans. Auth. (HTA)

GDB L/C’s (Take-out)(103)

Calendar Year 2014

Sales Tax Financing Corp. (COFINA)

Restructuring FYs 2013-2014 - $TBD (103)

Current Calendar Year

Sales Tax Financing Corp. (COFINA)

Restructuring FYs 2013-2014 (103)

• GDB’s capital markets plan for the remainder of the calendar year is limited to between 

$500 million and $1.2 billion of debt, depending on market conditions. 

• The GDB is only contemplating a bond issuance through COFINA for the rest of the calendar 

year.

• Measures taken to provide HTA with approximately $270 million in new revenues have 

significantly diminished HTA’s needs to access the capital markets in the short-term. 

*Preliminary and subject to change without notice, including as a result of changing market conditions. 62

The Commonwealth and the GDB have the financial flexibility to adjust its financing 

plan and transaction calendar as necessary

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Exhibit CW PR Investor Webcast Page 63 of 74
COFINA is the best rated credit among Puerto Rico issuers and has historically been the most 

attractive source of financing for the Commonwealth.

New COFINA Legislation

63

 With the enactment of Act 116-2013, the Sales and Use Tax percentage allocated to COFINA is increased from 2.75 

percent to 3.50 percent, increasing Puerto Rico’s financing capacity.

COFINA’s credit is bolstered by strong legal protections for bondholders

• Law 91-2006, which created COFINA, transferred 

ownership of a portion of the Sales Tax to COFINA and 

provided that any transferred portion was not 

―available resources‖ under the Constitutional 

provisions relating to full faith and credit bonds.

• COFINA will close, by resolution, its Senior and First 

Subordinate liens (except for refundings that generate 

savings).

• Law provides that no amendments to the law shall 

impair any obligation to COFINA bondholders.

• For a future legislature to exercise its constitutional 

power to limited or restrict the SUT, COFINA’s bond 

documents require written confirmation of all 

outstanding ratings, taking the substitution into 

account, and opinions confirming that new revenue 

would not constitute ―available resources‖.

• US-based Bond Counsel, PR-based Underwriter’s 

Counsel and the PR Secretary of Justice have 

provided, for each COFINA transaction (13 in 

total), strong legal opinions that the SUT is not subject 

to ―claw-back‖ by GO bondholders under the PR 

Constitution.

• ―Claw-back‖ opinion enjoys broad bipartisan support: 

four different Secretaries of Justice, serving three 

different administrations (of alternating political 

parties), have issued official opinions that the SUT 

allocated to COFINA is not subject to ―claw-back‖.

• Any new COFINA transaction would again receive 

―claw-back‖ opinions from Bond 

Counsel, Underwriter’s Counsel and the PR Secretary 

of Justice.

• Legal opinions can be made available for review by 

existing and prospective bondholders

COFINA is secured by a stable stream of revenues that is not subject to “claw-back”

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Exhibit CW PR Investor Webcast Page 64 of 74
• The GO has $786 million in short-term financings maturing during FY 2014 that the 

Commonwealth expects to manage through refinancings, or repayments in full.

• GDB has addressed the short-term financing needs of our main public corporations.

– PRASA does not need funding from the Commonwealth or GDB to cover its operational expenses or finance 

its capital improvement plan as a result of its recent rate increase.

– HTA’s $270 million in additional recurring revenues allows HTA to begin amortizing its outstanding financing 

with GDB and other financial institutions and fund its operational expenses.

– PREPA issued approximately $673 million in bonds in August 2013, funding PREPA’s capital improvement plan 

for the next two years.

– The Commonwealth’s cash flow needs for FY2014 have been met through the issuance of $1.2 billion in Tax 

and Revenue Anticipations Notes.

• Additional financing alternatives available to the Commonwealth and GDB include:

– Accessing, within a short timeframe, a significant amount of the approximately $2.8 billion in unrestricted 

government deposits in private financial institutions.

– Entering into secured or unsecured credit lines with private financial institutions.

– Securing medium-term or long-term private placements with institutional investors.

64

Even without extraordinary measures, Puerto Rico can choose not to access the 

capital markets during FY 2014.

GDB expects to have the liquidity necessary to fund the 

Commonwealth’s needs through at least fiscal year 2014

Case:17-03283-LTS Doc#:3126-26 Filed:05/23/18 Entered:05/23/18 11:45:37 Desc:

Exhibit CW PR Investor Webcast Page 65 of 74
Agenda

1 Principal Credit Accomplishments

2 Revenue and Expense Update

3 Economic Development

5 Concluding Remarks

4 Financial Highlights

Case:17-03283-LTS Doc#:3126-26 Filed:05/23/18 Entered:05/23/18 11:45:37 Desc:

Exhibit CW PR Investor Webcast Page 66 of 74
We have delivered on our investors’ expressed concerns

66

 Our track record proves that we have the political will and ability to address each of our investors’ 

concerns in a swift, decisive and unprecedented manner.

 The tough decisions made by this Administration stand in stark contrast with the failure of many 

other U.S. jurisdictions, and previous Commonwealth administrations, to take similar steps to 

address their fiscal and economic challenges. 

 We know that there is yet work to be done. Our plans include: 

• Filing, before the end of the calendar year, a comprehensive reform of our teacher’s pension 

system in order to ensure that the system never runs out of assets, alleviating future 

pressure on the General Fund.

• Cutting our deficit by submitting a budget for fiscal year 2015 that contains no new deficit 

financing and reduces to approximately $400 million or less our need for debt service 

restructurings. 

• Taking necessary action to eliminate the budget deficit completely by no later than fiscal 

year 2016.

• Ensuring that tax revenues remain on track with estimates and acting decisively to address 

any projected revenue shortfall or overspending.

• Executing the economic growth plan that will result in immediate and long-term results.

The people of Puerto Rico are confident that investors will recognize what we have 

accomplished responsibly through hard work and shared sacrifice. 

Case:17-03283-LTS Doc#:3126-26 Filed:05/23/18 Entered:05/23/18 11:45:37 Desc:

Exhibit CW PR Investor Webcast Page 67 of 74
GDB will begin holding regular investor webcasts at least once per quarter

GDB will publish the Commonwealth Report on a regular quarterly basis

Treasury and OMB will continue providing revenue and expense updates at least once 

per month

Consistent with PREPA’s disclosure practices, PRASA and HTA will begin posting their 

quarterly and, when ready, their monthly results on their webpage

GDB will continue to hold its annual Credit Conference in Puerto Rico

GDB will require disclosure counsel for all bond issuances

67

Puerto Rico will take action to improve its disclosure practices and 

increase information available to investors

The Commonwealth and GDB are committed to observe best disclosure practices and 

improve our relationship with our investor base

Actions to improve disclosure practices

Case:17-03283-LTS Doc#:3126-26 Filed:05/23/18 Entered:05/23/18 11:45:37 Desc:

Exhibit CW PR Investor Webcast Page 68 of 74
Appendix A – YTD Revenue Detail

Case:17-03283-LTS Doc#:3126-26 Filed:05/23/18 Entered:05/23/18 11:45:37 Desc:

Exhibit CW PR Investor Webcast Page 69 of 74
Fiscal 2014 YTD General Fund Revenues

69

YTD General Fund Revenues (July – September) 

Estimated

Jul-Sep

FY2014 

Revenues vs 

Estimated ($)

Revenues vs 

Estimated (%) 

(in millions)

YTD Results

Tax Type FY13 FY14 Variance % Change

Individual $438.90 $415.40 ($23.50) -5.35% $448.10 ($32.70) -7.30%

Corporations $233.90 $357.70 $123.80 52.93% $344.50 $13.20 3.83%

Non-Resident

Witholdings $142.50 $119.70 ($22.80) -16.00% $129.70 ($10.00) -7.71%

Sales and Use Tax $0.00 $0.00 $0.00 0.00% $0.00 $0.00 0.00%

Property Taxes $3.30 $7.00 $3.70 112.12% $0.00 $7.00 0.00%

Foreign (Act 154) $446.20 $435.00 ($11.20) -2.51% $416.40 $18.60 4.47%

Alcoholic Beverages $62.30 $63.70 $1.40 2.25% $63.80 ($0.10) -0.16%

Tobacco Products $43.70 $37.70 ($6.00) -13.73% $37.90 ($0.20) -0.53%

Motor Vehicles $78.90 $80.70 $1.80 2.28% $72.50 $8.20 11.31%

Off-Shore Shipment

Rum Excise $72.50 $88.20 $15.70 21.66% $84.40 $3.80 4.50%

Others $88.60 $93.70 $5.10 5.76% $91.10 $2.60 2.85%

Total YTD Results $1,610.80 $1,698.80 $88.00 5.46% $1,688.40 $10.40 0.62%

Case:17-03283-LTS Doc#:3126-26 Filed:05/23/18 Entered:05/23/18 11:45:37 Desc:

Exhibit CW PR Investor Webcast Page 70 of 74
Sales Tax Fiscal 2014 YTD Revenue

70

SUT Revenues (in millions) 

FY13 FY14 

FY13 to

FY14 

Variance

FY13 to

FY14 % 

FY2014 

Budget

FY2014 

Actual Vs 

Budget ($) 

FY2014 

Actual Vs 

Budget (%) 

July $102.90 $111.50 $8.60 8.36% $105.20 $6.30 5.99%

August $93.90 $96.30 $2.40 2.56% $96.10 $0.20 0.21%

September $92.60 $97.50 $4.90 5.29% $99.30 ($1.80) -1.81%

YTD Results $289.40 $305.30 $15.90 5.49% $300.60 $4.70 1.56%

Case:17-03283-LTS Doc#:3126-26 Filed:05/23/18 Entered:05/23/18 11:45:37 Desc:

Exhibit CW PR Investor Webcast Page 71 of 74
Appendix B – GDB-EAI

Case:17-03283-LTS Doc#:3126-26 Filed:05/23/18 Entered:05/23/18 11:45:37 Desc:

Exhibit CW PR Investor Webcast Page 72 of 74
Understanding the GDB Economic Activity Index

GDB Economic Activity Index

72

-4.3%

-5.1%

-5.9%

-6.1%

-6.2%

-6.2%

-5.8%

-6.0%

-5.7%

-6.0%

-5.5%

-5.8%

-6.1%

-5.3%

-4.1%

-3.1%

-2.8%

-3.8%

-4.6%

-4.2%

-3.5%

-2.4%

-2.6%

-3.1%

-2.4%

-2.2%

-2.2%

-2.8%

-2.7%

-1.9%

-1.7%

-2.3%

-1.9%

-1.4%

0.1%

1.0%

1.6%

1.6%

1.0%

1.2%

1.1%

1.6%

1.9%

2.5%

2.2%

1.9%

1.1%

-0.4%

-1.8%

-2.9%

-3.1%

-3.4%

-3.4%

-4.6%

-5.0%

-5.4%

-0.6%

-1.1%

-1.3%

-0.5%

-0.6%

0.0%

-0.1%

-0.5%

-0.1%

-0.7%

-0.1%

-0.4%

-1.0%

-0.2%

0.0%

0.4%

-0.3%

-1.0%

-1.0%

0.0%

0.6%

0.6%

-0.4%

-0.9%

-0.3%

0.0%

0.0%

-0.1%

-0.2%

-0.2%

-0.8%

-0.6%

1.0%

1.1%

1.2%

0.0%

0.3%

0.1%

-0.7%

0.1%

-0.4%

0.4%

-0.6%

0.0%

0.8%

0.8%

0.4%

-1.5%

-1.1%

-1.1%

-0.8%

-0.3%

-0.4%

-0.8%

-1.0%

-0.4%

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

100

105

110

115

120

125

130

135

140

145

Jan-09

Mar-09

May-09

Jul-09

Sep-09

Nov-09

Jan-10

Mar-10

May-10

Jul-10

Sep-10

Nov-10

Jan-11

Mar-11

May-11

Jul-11

Sep-11

Nov-11

Jan-12

Mar-12

May-12

Jul-12

Sep-12

Nov-12

Jan-13

Mar-13

May-13

Jul-13

Percent

Index (January 1980 = 100)

Month GDB-EAI Y-O-Y % change M-O-M % change

• When it is annualized, the level of the EAI is highly correlated with the level of the real GNP. 

Nevertheless, the annual growth rate of the EAI IS NOT the same as the annual growth rate of the real GNP. 

Being highly correlated does not mean being equal.

• The negative indicators of the GDB-EAI for 2013 may have been accentuated by the consequences of the 

election cycle in 2012, which activated particularly the construction and the services sectors, and the 

revision of the payroll employment benchmark, which increased the employment base for 2012. Finally, the 

employment reductions during the past three months have been more noticeable due to the significant 

reduction in state and local public employment, both related to Act 3 of 2013.

The GDB-EAI is an indicator of the general economic activity, not a direct measurement of the real 

GNP. The GDB-EAI annual growth rates are not the same as the real GNP growth rates, because 

the former are more volatile than the latter.

Case:17-03283-LTS Doc#:3126-26 Filed:05/23/18 Entered:05/23/18 11:45:37 Desc:

Exhibit CW PR Investor Webcast Page 73 of 74
The Commonwealth of Puerto Rico

Update on Fiscal and Economic Progress 

Q & A Session

Case:17-03283-LTS Doc#:3126-26 Filed:05/23/18 Entered:05/23/18 11:45:37 Desc:

Exhibit CW PR Investor Webcast Page 74 of 74