Wall Street Journal số ra ngày 27/2/2014

VO L. XXXII NO.20
THURSDAY ,FEBRUA RY 27,2014
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EUROPE EDITION
WSJ.com
ALook at ‘Magical Tu x,’
Mt.Gox’s Geek-in-Chief
TOKYO—Mark Karpelès ar-
rived in Japan in June 2009
with his catand his hard
drives.
Less than five yearslater,
theFrenchman faces accusa-
tions his companyhas lost
hundreds of thousands of dol-
larsfor customersofhis bit-
coin exchange, Mt. Gox,
whereall transactions have
been halted and usersremain
unable to access their money.
Mr.Karpelès describes
himself on his LinkedIn pro-
file as primarily “a technical
geek. ” His profile cites “a long
experienceincompanycre-
ation,” butthe snowballing
popularity of bitcoin and the

resulting growth in Mt. Gox’s
customer base appear to have
raised challenges that were
morethan the company, un-
derthe 28-year-old from a
suburb of Dijon, in eastern
France, could handle.
On Wednesday, aday after
Mt. Goxshut down, dealing
themost severeblowyet to
the bitcoin world, Mr.
Karpelès issued aterse state-
ment on the ex change’sweb-
site. “I am still in Japan, and
working very hardwith the
support of different parties to
find asolution to our recent
issues,” thestatement said.
Those who have followed
Mr.Karpelès’srise and fall
close up describe him as soft-
spoken and mild-mannered—
“geekybut kind,” as one per-
son who knows him put it.
They also sayheisatalented
software developer.
Computershaveindeed
been part of Mr.Karpelès’s
lifesincehewas very young,
according to a2007 French

documentary. His comments
in the film together with a
charting of hisonline pres-
ence—he has bloggedunder
the handle “Magical Tux” and
posted on Facebook,LinkedIn
and Twitter—paint aportrait
of an inquisitivemind.
“I can’t imagine alife
without computers,” he said
in the documentary, which
mentions Mr.Karpelès but fo-
Please turn to page 26
BY ELEANOR WARNOCK
AND TAKASHI MOCHIZUKI
 Currency trader FXCM
agrees to fines, refunds….24
Japanese regulators will
examine bitcoin 26
LinkedIn CEOJeff
Weiner wants to build a
global bazaar for
finding work,recr uiting
talent and sector news
Interview 20
PBOC is steering the
yuan lowertogain
moretrading flexibility
News Analysis 2
Wireless firms near

European consolidation
Heard 32
Inside
$1.75 (C/V) - KES 250 - NAI 375 - £1.70
FRACAS IN CRIMEA: Pro-Russian protesters, right, clash with pro-Ukraine Crimean Tatars in frontofalocal governmentbuilding in
Simferopol, Crimea, on Wednesday. The Kiev uprising has fueled talk of separatism in the region. Relatedarticles on pages 6, 7and 15.
Associated Press
Cr edit Suisse
ConcedesTax
Misconduct
Credit Suisse Group AG
Chief ExecutiveBrady Dougan
told lawmakersthe bank “re-
gretsverydeeply” having
aided American taxevasion,
but said the misconduct was
mostly limited to asmall
group of employees at Sw it-
zerland’ ssecond-largest bank.
In an oftentense hearing,
Mr.Dougan faced repeated
questioning from Sen. Carl
Levin (D., Mich.), chairman of
the U.S. Senate’sPermanent
SubcommitteeonInvestiga-
tions,onthe scope of the
bank’sactivities to recruit U.S.
customersand whythe bank
appearstoberelying on Swiss
secrecylawstoavoid sharing

information about those ac-
countswith U.S. authorities .
Mr.Dougan, anormally re-
served American, mostly
maintained acalm demeanor
during the hearing despiteof-
tenbrusque queries from Mr.
Levin. At one point the CEO
stoppedshort and blinked in
surprise afterbeing cut off by
the subcommitteechairman.
“You’renot co operating
with us,hiding behind a[bank
secrecy] lawwhich applies in
Switzerland, but which
doesn'tapply here, and yet
youwant to do businesshere,”
Mr.Levinsaid.
Mr.Dougan said Credit Su-
isse is limited by those Swiss
laws from providing data—in-
cluding client names—tothe
U.S. JusticeDepartment. The
JusticeDepartment has been
investigating the bank,which
mayagree to asignificant set-
tlement this year,since2011.
TheCEO added the bank’s
past help to U.S. clientsseek-
ing to hide assetswas mostly

provided by acoregroup of
between 10 and 15 bankers
that “went to great lengths to
disguise their bad conduct.”
Thetestimonycame aday
afterthe subcommitteesaid
the Swissbank,second in size
only to UBS AG in terms of as-
sets, aggressively sought to
Please turn to page 24
BY JOHN LETZING
AND ALAN ZIBEL
Russia FlexesasUkraineRegroups
MOSCOW—President Vladi-
mir Putin ordered surprise
militaryexercises for150,000
troops in Russia, including
some basedabout 300 kilo-
metersfromUkraine,where
theouster of the president
has leftapolitical vacuum.
Thetest of combat readi-
nessapplies to ground, air de-
fense and tank unitsaswell
as Russia’sNorthern and Bal-
tic fleets. It is among the larg-
est such exercises the country
has undertaken in recent
years, and comes amid rising
displeasureinMoscow with

developmentsinUkraine.
Also on Wednesday, pro-
test leadersnamed a“govern-
ment of national unity,” to re-
placethe ousted Russia-
backed President Viktor
Yanukovych, whose where-
aboutsremains unknown.
Sincepro-West ern protest -
ersinUkraine overthrew Mr.
Yanukovychlast weekend,
Russiahas recalled itsambas-
Please turn to page 7
BY LUKAS I. ALPERT
Copyright©2013, Oracle and/or itsaffiliates.All rights reserved.
Oracle Cloud
Applications
More Enterprise SaaS Ap pl ications
ThanAny Other Cloud Services Provider
ERP
Financials
Procurement
Projects
SupplyChain
HCM
HumanCapital
Recruiting
Talent
CRM
Sales

Service
Marketing
32 |Thursday, February27, 2014 THE WALL STREETJOURNAL.
HE ARD ON THE STREET
Email: FINA NCIAL ANALYSIS &COMMENTARY WSJ.com/Heard
ChinaCars
FindBalm
InFrench
Partner
Coming to the aid of a
downtroddenFrench car
companytodaywill help
China’sNo. 2automaker pre-
parefor an uncertain tomor-
row.
Investorswatched ner-
vously as Dongfeng Motor
spent $1.1 billion fora14%
stake in PSAPeugeot Cit-
roën,matchinganinvest-
ment by the French state.
Dongfeng’sHong Kong-listed
shares have fallen 6% since
official news of the deal last
week.
But in exchangefor the
cash, Dongfeng has actually
extracted key benefits, espe-
cially cooperation with the
moreexperienced French car

maker on research and devel-
opment. Dongfeng,which
runs ajoint venturewith Peu-
geot in China, nowcan access
technologysuch as an inno-
vativedrivetrain that uses
compressed air to save on
fuel.
That is importantbecause
Dongfeng is playing catch-up
on this front. It has invested
less than the typical global
carmaker in R&D,acting
morelikeacontract manufac-
turer,ass embling cars based
on thetechnologydeveloped
by itsmain joint-venture
partners Peugeot, Nissan,
Honda and, soon, Renault.
This strategyhas worked
because rules restrict foreign
carmakersfromowning
morethan 50% of ventures in
China, giving locals leverage
to shareprofits without in-
vesting big on technologyand
design.
Yetthis regulation may
not last. AChinese commer ce
ministryofficial said last year

that reviewing the 50% rule
should be on policymakers’
agenda,meaning the locals
and their productscould have
to competehead-to-head with
the foreign makersatsome
point. Dongfeng has just
bought itself insurance
against this.
Meanwhile,with $4 billion
in cash on itsbalancesheet
as of last June earningmea-
sly interest, making abet on
Peugeot seems worth the risk
forDongfeng.
Investors, however, aren’t
giving it credit.
At 6.2times forwardearn-
ings, itsstock is the cheapest
of all Hong Kong-listed car
makers. And Dongfeng’sin-
vestment will yield consider-
able returns should Europe’s
carcycle turn positive, as
manyexpect.
Whatatfirst blush seems
likeariskyFrench adventure
mayjust turn out to be a
profitable affair.
—Abheek Bhattacharya

U.K. Ma yLiftRates First
It isn’t arace, and there
arenoprizes forwinning.But
the Bank of England looks like
it will be firstout of the
blocks among itsmajor global
peersinraising interest rates.
On the faceofit, that
might be surprising,The U.K.
has been alaggard in the re-
covery from the global finan-
cial crisis.Evennow ,the level
of grossdomestic product is
1.4% belowits 2008 peak in
real te rms.But the economy
finally appearstohave
bounced back decisively in
2013,and shows few signs of
flagging.
Forthe BOE’speers, the
pictureismorenuanced. The
U.S. Federal Reserveisstill
extricating itself from its
bond-purchase program. Far
from tightening policy, it is
still supplying stimulus,albeit
at lowerlevels. TheBank of
Japan is engaged in aher-
culean effort to boost infla-
tion.And the European Cen-

tral Bank mayyet be forced to
loosen policy, although its
main strategyappearstobe
simply to buy time fordisin-
flationarypressures to abate.
True,the BOE has been ag-
gressiveineffortstopush
back against expectations of
rising rates. Policymakers
have been keen to emphasize
that they don’t want to ta ke
anychances with arecovery
that could falter without solid
foundations.
But the latest crop of U.K.
GDP data, which provide more
information on the sourcesof
demand, should help put
some fearstorest. Both net
tradeand investment made
positivecontributions to
growth of 0.7% in the fourth
quarter. In particular,busi-
nessinvestment—for so long
the missing pieceofthe puz-
zle—rose 2.4% on the quarter
and 8.5% on the year.Revi-
sions to previous figuresshow
that businessinvestment has
been rising forfour consecu-

tivequarters, BNP Paribas
notes,anoutcome that
chimes much betterwith sur-
veys of businessactivity and
confidence.
Thenet trade contribution,
however, waslessimpressive,
due to afall in importsrather
than burgeoning exports. The
U.K. continues to runalarge
trade deficit. Still, if this pic-
turecan be continued, it
pointstoamoresustainable
growth picture.
Survey datasuch as the
purchasing managers’ indexes
have suggested astrong start
to 2014, although poor
weather mayyet hurt first-
quarter growth. And the grad-
ual recovery in Europe may
help boostthe U.K. further
given that the eurozone is
such an important trade part-
ner.
All of that appearstobe
emboldening some members
of the BOE’sMonetaryPolicy
Committee: Martin Weale last
week wasthe firsttoput a

time frameonthe firstrate
increase,suggesting it could
come in spring 2015.Some
economistsevenexpect an in-
crease this year,onthe basis
that slac kinthe economyis
smaller than the BOE as-
sumes.
True,inflation is quiescent
at present. Butthe risk is that
holding rateslow fortoo long
causes capital to be misallo-
catedand stokes further
problems in the housing mar-
ket. An emergencysetting for
monetarypolicyisincreas-
ingly looking at odds with the
stateofthe U.K. economy.
—Richard Barley
Look Out forMobile-Deal Strings
Consolidation amongcell-
phoneoperatorsremains the
plat du jour in Europe.The
Continent’santitrust watch-
dog is expected to rule on
proposed takeoversinGer-
manyand Ireland this spring;
other marketssuch as Italy
look ripe fordeals.But elimi-
nating acompetitor maynot

always have the desired effect
of morestable prices.
Regulatorsfaceatough
balancingact. On the one
hand, taking out acompetitor
so prices canrise should help
operatorsjustifymuch-
needed investment; Europe
badly trails the U.S. and Asia
in itsrollout of fourth-gener a-
tion wirelessnetworks.But
regulat orsalso have aduty to
ensureoperatorsdon’t grow
merely at the expense of
higher prices and lesser-qual-
ity services forconsumers.
ForinvestorsinEuropean
wirelessoperators, that
makes the key uncertainty
what kind of remedies regula-
tors might impose to permit
more deals.
So far,the test case is Aus-
tria. Hutchison 3G Austria
bought OrangeAustria in De-
cember 2012, reducing the
number of mobile operators
in thecountr yfromfour to
three.One remedy wastore-
servespectrum foranew en-

trant. But the priceofwire-
lessservices in Austria is the
lowest in Europe,which
meant the offer didn’t garner
anyinter est. Prices have since
start ed to rise afterincreases
kicked in in October.
Germanycould provedif-
ferent. TheEuropean regula-
torisexpected to approve
TelefónicaDeutschland’s
takeover of E-Plus,bringing
together the two smallest
German operatorsbysub-
scribers. In theory, remedies
could be lighter because Ger-
many already has alow con-
centration of mobile-operator
brands: Mobile operatorsand
other serviceprovidersthat
don’town their ownwireless
networks,so-called virtual
network operators, have a
20% shareofthe German
market, the highest in Europe,
notes Citigroup.
But if Germanyisforcedto
seek anew entrant, there
could be takers.Germanyis
Europe’sbiggest market by

mobile subscriptions and data
prices arehigh. T-Mobile
Austria charges€17 ($23.37)
while T-Mobile Germany
charges€96 forthe same type
of smartphone plan,according
to areport last Mayfromcon-
sultantsRewheel. LikeAus-
tria,Germanyalso might de-
mand that an acquirer offer
betteraccessterms forvirtual
operators. So far,these ha-
ven’t takenoff in Austria. But
in Germany, if access terms
areset lowenough and are
open to all virtual operators,
the potential forpricecutsis
high, says Citigroup.
TheEuropean telecom sec-
torhas seen valuation multi-
ples increase by morethan
25%overthe past year on
hopes that consolidation will
bring gains .The sector nowis
valued at 5.7times forecast
2014earningsbeforeinter est,
taxes, depreciation and amor-
tization.
Acquirers such as
TelefónicaDeutschland will

see the benefit of large cost
savings. But if remedies im-
posed by regulatorswork to
keep prices down, investors
might not reap the same gains
elsewhere. —Renée Schultes
Call Waiting
German mobile-operator
market sharebysubscribers
The Wall Street Journal
Source:Citigroup
*AsofJune 2013
Telefónica Deutschland/E-Plus
T-Mobile
Vodafone
E-Plus
Telefónica Deutschland
38%
33%
29%
21%
17%
(combined)
The taper—and taper
talk—hurt. Forthe firsttime
sincethe financial crisis, the
balancesheets of U.S. banks
ended the year with an ag-
gregate unrealized loss on
so-called available-for-sale

securities, according to the
Federal Deposit Insurance
Corp.’s latest quarterly bank-
ing profile Wednesday.
Banksbegan 2013 show-
ing unrealized gains of more
than $35 billion on these se-
curities. Taper talk from the
Federal Reserve, which
pushed long-term bond
yields higher,eroded those
gains to just$907 million by
the end of the thirdquarter.
The banksended the fourth
quarter showing unrealized
losses of $8.1 billion.
While the reappearance
of this particular ghost of
the financial crisis isn’tex-
actly welcome, it shouldn’t
strikehorror in investors.
This time, the unrealized
losses aredriven by rising
interest ratesrather than
credit impairmentand fears
of default. As the bonds
held in the portfoliosma-
ture, the losses will reverse.
Some losses do run
deeper than others.

OVERHEARD
TheCase Against
Palo Alto’sStock
Theoutcomes of patent-in-
fringement lawsuitsare noto-
riously difficult to predict.
But forinvest orsinPalo Alto
Networks,they could be even
costlier to ignore.
Howmuch they areignor-
ing it is agood question. The
company’ssharepricejumped
nearly 23% over roughly a
two-week period, between
some favorable pretrial deci-
sions in acase brought by ri-
val Juniper Networks and
the start of the trial this Mon-
day. Thestock gotanother
4.3% liftthat dayafter Palo
Alto posted itsfiscal second-
quarter results, which in-
cluded a46% jump in revenue
from the same period last
year and an upbeat outlook.
This particular case has a
twist in that it involves the
co-founder of Palo Alto, who
is listed as an inventor on
several of the patentsatissue

in the ca se.Nir Zuk wasthe
chief technologyofficer at
NetScreen Technologies until
it wasacquired by Juniper in
2004 forabout $4 billion. He
stayed with Juniper forabout
ayear beforeleaving the com-
panytoget Palo Altoupand
running.
Juniper claims Mr.Zuk in-
corporat ed itstechnologyinto
Palo Alto’sproducts, which
Palo Altodenies.Palo Alto
also hit back with itsown pat-
ent-infringement suit against
Juniper last year.Inthe trial
that began Monday, Juniper is
seeking an injunction on the
productsinquestion. Palo
Altosaid in itsquarterly filing
this week that it doesn'tbe-
lievealossis“probable.”
But thereisarangeof
possible outcomes to the case
that areshort of a“loss” that
maynot be fully factored into
Palo Alto’ sgenerous valua-
tion.
Forexample,the company
could end up paying aroyalty

to Juniper foruse of the tech-
nology. Palo Altoisstill arel-
atively smallfirm, with reve-
nue projected to hit about
$573million forthe current
fiscal year,against amarket
capitalization of almost 10
times that.
Walter PritchardofCiti-
group has a$49 pricetarget
on Palo Altobased in part on
aprojected 2% royalty rate
stemming from the case; that
pricetargetismorethan 30%
belowPalo Alto’scurrent
market value.
Trading at about 135 times
forwardearnings, Palo Alto’s
shares already arebaking in
strong businessgrowthwith
fewhazards on the road
ahead. Court cases,though,
have acertain knack forcre-
ating surprise potholes.
—Dan Gallagher
Thereand Back
U.K. quarterly GDP,cumulative
change from 2008 peak
The Wall Street Journal
Source:Officefor National Statistics

0
–8
–6
–4
–2
%
’08 ’09 ’10 ’11 ’12 ’13
The Bank of England
The Bank of England
Bloomberg News
Thekey uncertainty
is what kind of
remedies regulators
might take to permit
moreconsolidation.
2 |Thursday, February27, 2014
AM IM UK SW FR IT SP TK BR PL IS AE GR
THE WA LL STREETJOURNAL.
PAGE TWO
BEIJING—China’scentral bank
engineered the recent decline in
the country’scurrencytoshake
out speculatorsasitprepares to
allowawider trading rangefor
the tightly tethered yuan,
according to people familiar with
the central bank’sthinking.
In the past week,the People’s
Bank of China has been guiding
the yuan loweragainst the dollar.

It has done so by setting aweaker
benchmark against which the
yuan cantrade.Ithas also
intervened in the currencymarket
by directing state-owned Chinese
banks to buy dollars, according to
traders.
Themoves brought the yuan,
also known as the renminbi, to its
weakest level in seven months and
represent areversalofthe
practicefor most of last year,
when the central bank kept
pushing the yuan higher against
the dollar,evenasthe currencies
in other emerging-market
countries tumbled. Money has
been pouring intoChina—
sometimes,analystshavesaid, by
circumventing currencycontrols—
to take advantageofthe
seemingly unstoppable rise.
By guiding the yuan weaker,
the PBOC intends to thwart short-
term speculatorsbetting on a
continued rise and to introduce
greater two-way volatility intoits
trading.“ThePBOC is testing the
market as it prepares to widen the
yuan’strading band,” said one of

the people familiar with the
bank’sthinking.
While it is ashort-term move,
making the yuan behave morelike
amarket-driven currencyfitsinto
abroader plan to restructurethe
economysothat it is less
dependent on investment and
exports.
Though increasingly important
in international trade,the yuan
isn’t freely convertible.The
central bank setsthe value,
permitting the yuan to fluctuate
within acontrolled rangeagainst
the dollar.Currently,the PBOC
allows investorstopush the
yuan’svalue 1% in either direction
from that set rate in daily trading.
Manyanalystsand economists
expect the central bank to expand
that rangethis year by allowing
the currencytomoveupordown
by 2% daily.The last time the
band waswidened wasinApril
2012, when it wasincreased to 1%
from 0.5%.
Surging inflows of capital have
been complicating Beijing’sefforts
to managethe economy,

contributing to soaring property
prices and injecting excess cash
intothe financial system. The
central bank and commercial
banks bought nearly $45 billion
worth of foreign exchangein
December,the fifthconsecutive
month of net purchases.Aweaker
yuan could also help exporters,
whose goods would be cheaper in
the U.S. and other foreign
markets.
ThePBOC decided to tamp
down expectations forone-way
appreciation in the yuan and curb
speculativetrading during atwo-
daycurrency-policymeeting that
ended Feb. 18,the people said.
At the meeting,adeputy
governor,HuXiaolian, called for
greater effortstoprevent risks
from cross-border capital flows
and joined other officials in
expressing concern about “hot
money” inflows,according to a
PBOC statement issued afterthe
meeting.The PBOC also decided
to expand the yuan’strading band
this year in an “orderly” manner,
the statement said, as it moves

toward making the yuan afreer
currency. On Feb. 19,the dayafter
the meeting,the yuan started its
recent slide,falling to the lowest
level in almost two months.
Theyuan ended at 6.1248 per
dollar on Wednesdayinmainland
trading,barely changed from the
closing of 6.1266 Tuesday. The
currencyhas fallen 1.2% against
the dollar sincethe beginning of
this year,adramatic movefor a
currencythat oftenbarely budges
and that gained 2.9% in 2013.
Theslide added to jitters
among investorsalready anxious
about aslowing Chinese economy
and touched off concerns about a
selloff of yuan in offshore
markets. Chinese officials sought
to calm nerves Wednesday.
“The movement in renminbi is
due to an adjustment of trading
strategybymain market
participants,” China’sforeign-
exchangeregulator said in the
government’sfirst comments,
published on the regulator’s
website.
“The yuan fluctuations are

normal compared to volatility in
developed and emerging market
currencies,” the regulator said.
“Don’t read toomuch intothem.”
Following the comments, the yuan
reversed course and strengthened
slightly.
PBOC officials have said in the
past that the yuan is nearing its
fair-market value,or“equilibrium
level,” meaning the chances of any
drastic movementsinthe
currencyare limited.
Widening the trading range
won’t eliminatethe PBOC’sgrip
on the currency, because the
central bank will still maintain the
daily referenceratefor the yuan.
Nonetheless, the potential change
would be an important step
toward establishing amarket-
based exchange-ratesystem, in
which the yuan would moveup
and down just likeany other
major currency. Th eexchange-rate
reform is part of China’splan to
overhaul itsfinancial sector,
elevatethe country’sstatus in the
international monetarysystem
and someday, according to some

Chinese officials,rival the U.S.
dollar as the de factoglobal
currency.
Afreer yuan mayalso help
China deflect foreign complaints
about itscurrencypolicies.The
U.S. and othershavepressed
Beijing foryearstorelax itshold
on the yuan, allowing it to rise in
value and boost Chinese consumer
demand.
China has long resisted calls
forafreefloat, preferring a
gradual approach out of concern
that drastic measures would
destabilizeits capital marketsor
hurt the country’spowerful export
market.
Amovetowiden the yuan’s
trading rangewould come as
China’sjuggernaut economic
machine is slowing down, leading
to questions of whether leaders
might trytostimulategrowthand
help struggling companies.
Theyuan “has appreciated all
these yearsand probably won’t go
toomuch higher from nowon,”
said Du Hanbing,who runs a
businessinthe southern city of

Shenzhen that makes embossing
machines and sells them in the
U.S. and Canada. “I’m more
concerned about foreign demand
and my customers’ ability to pay
me these days.”
—Liyan Qi and Wynne Wang
contributed to this article.
PBOC HasGuided Yuan
Down forBroader Range
BY LINGLING WEI
In the Band
China’scurrency
is tethered to a
trading range
set by the
centralbank.
Source:Thomson
Reuters Eikon
The Wall Street Journal
Note: Inverted scale
to showthe weakness
of the yuan
Howmanyyuan
one dollar buys
6.25
6.00 yuan
6.05
6.10
6.15

6.20
Jan.
’142013
Dec. Feb.
Daily high
Trading
band
Daily high
and low
represent
dollar
strength
Daily low
iii
Business &Finance
n Airbus Group NV,embold-
ened by strong financial results
and an order backlog,isturn-
ing itsback on itslongtime Eu-
ropean backersand will rely
less on government support. 17
n Thepopularity of “The Lego
Movie” maybecoming at just
the right time forthe Danish
toymaker,asthe companyis
expected to report an abrupt
slowdowninits U.S. business
for2013. 17
n Anheuser-Busch InBev is
taking itscost-cutting knifeto

Grupo Modelo SAB, the Mexi-
canbreweritacquired control
of last year. 19
n Westfield Group, one of the
world’sbiggest ownersof
shopping malls,said it maylist
in the U.S. or London aftera
planned breakup of itsglobal
mall empire. 19
n Citigroup Inc., which owes
itssurvival to the U.S. govern-
ment, has spent the yearssince
the 2008 financial crisis qui-
etly building an armyofveter-
ans in topWashingtonjobs. 25
n China and global companies
aretaking newsteps to fulfill
the country’sambitions for
electric cars,asitremains well
behind itstargettoroll out
low-emission vehicles. 23
n Singaporeispulling out all
the stops to build itsown ver-
sion of Silicon Valley as it at-
temptstocreateastartup hub
forSoutheast Asia. 22
iii
World-Wide
n Rome’sstrained finances
areforcing the city to confront

unpalatable choices—such as
cutting public services or rais-
ing taxes—togain time as it
searches forways to close a
yawning budget gap. 4
n Syrian government forces
ambushed and killed dozens of
rebels in aDamascus suburb,
saying the rebels were part of
anew offensivetosqueeze the
capital. 10
n Hezbollah vowed to retaliate
foranIsraeli airstrikethat hit
one of itsbases near Lebanon’s
frontier with Syria. 10
n Germany’sconstitutional
court struck down a3%
threshold forpolitical parties
to be elected to the European
Parliament. 4
n Administration lawyers
have presented the White
House with options forrestruc-
turing the NSA’sphone-surveil-
lanceprogram, from ditching
the controversial collection al-
together to running it through
the telephone companies. 8
n U.S. authorities are investi-
gating the flow of funds from

Gabon to the U.S. to determine
whether anyassetsare trace-
able to public corruption in the
central African country. 9
n Theformer editor in chief
of Ming Pao, aprominent Hong
Kong newspaper,was stabbed
and has been hospitalized, po-
licesaid. 11
What’sNews—
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THE WA LL STREETJOURNAL. Thursday, February27, 2014|31
OFF THE WALL
TryPlowing Through Six-Month Winters
A
irportsinmuch of the
world getoccasional snow,
and North Americahas
takenabeating this season. But in
Nordic countries,wherewinter can
last six months and airplane deic-
ing startsinAugust, skill at oper-
ating through sleet, snowand
frost is vital forbusinessand is a
point of pride.
Stockholm’sArlanda Airport

setsagoal of never succumbing to
winter.“That’ salso the sport of
it, ” says Arlanda operations head
Lena Rökaas.
Her team spends months con-
ducting off-season drills.But when
her squad’sbig daycame in De-
cember,the Swedish manager wor-
ried she and her colleagues
wouldn’t be able to handle what
wascoming at them.
Undaunted, her crew headed
out in tight formation as if “get-
ting ready forbattle,” Ms.Rökaas
says.They plowedrelentlessly
ahead and protected aperfect 50-
year record:Arlanda stayed open
despitegetting
socked by more
than athirdofa
meter of snow.
Swedish crews
waxnostalgic
about a1968 bliz-
zard when Arlanda
wasthe only West-
ern European air-
port operating and
arriving planes parked on one of
itstwo runways.“It’salovely

story,” says Arlanda spokeswoman
Susanne Rundström.
Nordics call it “snowhow,” a
mix of massivemachines,finely
honed plowing patterns and con-
stant practice.
“W econsider ourselves almost
world champions,” says Heini No-
ronen-Juhola, vicepresident for
aviation and safety at Helsinki-
Vantaa Airport. Helsinki has devel-
oped morethan 20 clearing rou-
tines,each linked to specific
weather conditions.Ms. Noronen-
Juhola considersthe playbook “our
big secret.”
As at other Nordic airports,
Helsinki’s120 maintenancepeople
spend summerschoreographing
equipment. They usually cleantar-
macs with diagonal rows of vehi-
cles,sometimes referr ed to as a
congaline.Each machine shoves
snowtothe vehicle behind it and
ultimately off the edgeofthe run-
way.Driversfollowtheir maneu-
vers precisely so air controllers,
who also knowthe routines,can
time arriving and departing flights
down to the minute.

“It’slikedancing,” says Ms.No-
ronen-Juhola.
In winter,her crewswork
round-the-clock shifts,likefire-
fighters, and hustle at the first
sight of snow. Helsinki airport last
closed in 2003,for 30 minutes,be-
cause of snowand air-traffic-con-
trol problems.Likeother Nordic
airports, it frequently cutscapac-
ity and cancels some flights.
Another Nordic secret: pushing
producersfor absurdly powerful
equipment. Oslo Airport runs two
of the world’slargest self-pro-
pelled snowblowers,built by Nor-
wegian airport-equipment maker
Øveraasen AS.Only two other of
the TV2000 unitsoperateatair-
ports; they,too,are in Norway.
The2,000-horsepowerma-
chines canshoot 10,000 tons of
snowanhour morethan 45 meters
from the tarmac.“It’slikethrow-
ing acar everysecond,” says Hen-
ning Bråtebæk, operations director
at Oslo Airport.
Helsinki Airport pushed Finnish
snowspecialist Vammas in the
1990s to develop some of the first

machines able to plow, sweep and
blowsnowsimultaneously.Several
of thesemachines canclear arun-
way in about 10
minutes ,ajob that
ageneration ago
took half an hour.
Back then, run-
way clearing re-
quired manydiffer-
ent machines.
Opening scenes of
the 197 0disaster
film “Airport”
showassort ed tractor-sizevehicles
tackling ablizzard,including some
that spit fire to melt ice.
Today, all-in-one cleanersare
about as long as alocomotive.
Most have two mighty engines,
one formotion and the other to
sweep and blow. They canrun for
hourswithout stopping—and Nor-
dics keep going.
“They don’t go forbreaks—
there’sbig pride in that,” says Ms.
Rökaas in Stockholm of her driv-
ers, who mainly use Swisssnow
equipment from Aebi Schmidt
Holding AG. “Someone goes out

and gives them coffee.”
Themachines canrun forso
long that producershavetoworry
about drivers’ comfort. Vammas
boaststhat itscabs aresocozy,
with their heated seats, frost-resis-
tant windows,stereospeakersand
vibration-free suspension, that op-
eratorsare comfortable in T-shirts.
Over the past decade,combina-
tion machines have caught on at
airportsacrossCanada and the
U.S. Afteracrippling winter storm
in 2011, frequently sweltering Dal-
las-Fort Worth Airport bought 10
Vammas machines forabout $1
million each. Vammas wasac-
quired by Fortbrand Services Inc.
of Plainview, N.Y.,in2010.Itmanu-
factures Vammas machines in Fin-
land and in the U.S.
“They look very cool,” says air-
port spokesman David Magaña.
When snowwas forecast in De-
cember,the airport prepared to
unleash itsyellowmonsters. Un-
fortunately,what arrived wassleet
that landed and froze, creating “a
hockey rink from heretoTennes-
see,” says Mr.Magaña. With snow-

plows offering little help against
ice, nearly 90% of flightswerecan-
celed foraday.
Still, versatile Nordic machines
have been so popular that other
big vehicle makershavejumped in.
American truck maker Oshkosh
Corp., based in wintryWisconsin,
toutsits newmultifunction ma-
chine as “a rolling 81,000-pound
SwissArmyKnife.” Product man-
ager LesCrook boaststhat itsjoy-
stick control, coveredinbuttons
foreach function, “isjust likea
Game Boy.”
Not to be outdone,Øveraasen
last year unveiled anew product
line with the curvylines of a
sportscar and cabs that rise likea
cherry-picker to givedrivers
greater visibility.“Thefuturistic
design is areal eye-catcher,” says
an Øveraasen brochure. Bård Eker,
whose industrial-design firm Øver-
aasen hired forthe newline,says
his companyrefrained from mak-
ing the look toofuturistic forfear
of scaring off customers.
While big equipment helps get
the job done,veter ans sayquality

snowtime is critical. Oslo Airport,
forexample,getshit on averag e
60 days each winter.“We getalot
of practice,” says Mr.Bråtebæk.
But this year,asthe U.S. has ex-
perienced aNordic winter,North-
ern Europe has been unusually
warm. That worries Ms.Rökaas in
Stockholm. “The worstthing for
these people is when thereisno
snow,” she says of drivers, who
she fearsmight getbored and
quit.
As forthe future, officials are
counting on snowand dreaming
up newways to prepare.
“W ewould lovetohavearoof
on the airport,” says Ms.Noronen-
Juhola in Helsinki. “It’sagreat
idea.”
BY DANIEL MICHAELS
Online
>>
Watchavideo on Nordic ‘snowhow’
at WSJ.com/OffTheWall.
Øveraasen plow
Along line of snowplows clears the runwayatStockholm’sArlanda Airport, whereairport crewstakepride in their 50-year record of keeping the airport open despitelong and snowy winters.
AgenceFrance-Presse/Getty Images
THE WALL STREETJOURNAL. Thursday, February27, 2014|3
NEWS

NATO Ministers Wa rn Afghans on Exit
BRUSSELS—Ameeting of allied
defense ministersopened Wednes-
daywith arenewedwarning to Af-
ghanistan that the North Atlantic
TreatyOrganization would with-
draw itsforcesbythe end of the
year without asigned security
agreement, along with apromise to
help Ukraine pursue democratic
overhauls.
NATO Secretary-General Anders
Fogh Rasmussen said the allianceis
ready to establish atraining mission
to advise the Afghan security forces
afterthe end of 2014, but said with-
out alegal framework to protect
troops,international forces would
leave.
Afghan President Hamid Karzai
hassofar declined to sign abilat-
eral security agreement with the
U.S. Such an accord is aprerequisit e
forNATOtoagree on astatus-of-
forces pact with the alliancethat
would offer legal protections to in-
ternational troops serving in Af-
ghanistan.
“Our preferredoption is to stay,
with atraining mission to advise,

assist, train the Afghan forces,” Mr.
Rasmussen said. “Ifwedon’t getthe
legal framework we will have to
withdraw everything.”
Mr.Rasmussen’sremarks,and
his frustration, echoed the message
from President Barack Obama and
otherU.S.officials on Tuesday.
U.S. officials said they would
seek to conclude the security agree-
ment with Mr.Karzai’ssuccessor
and meanwhile step up planning for
apossible withdrawalfromthe
country.
“Time is of the essence,” Mr.
Rasmussen said. “It appearsMr.
Karzai isn’t ready to sign the secu-
rity agreement.”
Mr.Rasmussen said NATO would
continue itsnegotiations with the
next Afghan president. Afghan elec-
tions arescheduled forApril, al-
though arunoff could mean the vot-
ing resultsaren’t settled formonths
more.
NATO ministersare also set to
discussthe situation in Ukraine,
wherestreet protestsdrove the pro-
Russian government from power.
Ukrainian officials aredue to at-

tend the summit and discussthe se-
curity situation.
“Ukraine is aclose and long-
standing partnertoNATO. And
NATO is asincerefriend of Ukraine.
We stand ready to continue assist-
ing Ukraine in itsdemocratic re-
forms,” Mr.Rasmussen said.
He said restarting membership
talks would be up to Ukraine,but
signaled that the alliancewas in no
hurrytoexpand further.“Ithink
thereare moreurgent priorities to
addressright now,” he added.
NA TO hasdiscussed membership
forUkraine,but hasn’t invited it to
become amember,amid reserva-
tions among some allies.Former
President ViktorYanukovychsaid in
2010,soon afterhetook office, that
Ukraine wouldn’t pursue NATO
membership.
Thedefense ministerial meeting
is scheduled to last two days.
BY JULIAN E. BARNES
Sold exclusively in Louis Vuitton stores and on louisvuitton.com.
Downloadthe LouisVuitton pass app to reveal exclusivecontent.
30 |Thursday, February27, 2014 THE WALL STREETJOURNAL.
HEARD ON
THE FIELD

SPORTS
Crick et’s Big Thr ee Hog the Crease
ICCRestructuring Gives Leading Nations Ev en MoreSay Over Running of Game
Therestructuring approved at
the International Cricket Council
boardmeeting in SingaporeonFeb.
8made it abundantly clear who is in
charge of world cricket: the England
and Wales Cricket Board, Cricket
Australia and the BoardofControl
forCricket in India.
Theplan, which is almost certain
to be rubber-stamped at afull board
meeting in June,hands over wide-
reaching powers to two subcommit-
tees,the ExecutiveCommitteeand
theFinancial and Commercial Af-
fairsCommittee, which include rep-
resentatives of the Big Three.
Each one will also feature two
other representatives from the re-
maining seven national associations,
and their decisions still have to be
ratified by the main ICCboard. But
two,ofcourse,isnot enough to vote
down three; while the chances of the
main boardstamping on measures
proposed by the Big Threeare un-
likely—particularly given that BCCI
President NSrinivasan just became

ICCchairman.
ThePakistan Cricket Boardand
SriLanka Cricket, traditionally two
of the BCCI’scloser allies,werethe
only boards to abstain in Singapor e,
while previouslyskeptical boards in-
cluding Cricket South Africaand the
BangladeshCricket Boardwerewon
over with concessions.
As well as the altered committee
structure, the proposed World Test
Championship involving thetop four
teams has been ditched and replaced
with areprieved Champions Trophy.
Theidea of two-tier Test cricket has
also been shelved, with aroutecre-
ated forassociatenationstopoten-
tially become Test-playing nations
on apromotion and relegation basis.
And last to be thrownonthe scrap
heap is the FutureToursProgram—
which wasbound to happen once
boards start ed ignoring it—r eplaced
with legally binding bilateral series
agreements.
Thenew rules also givethe Big
Threealargersliceofthe game’s
global revenues.Onthe faceofit,
that sounds fair enough:they,in
particular India, arethe game’smost

lucrativemarkets, contributing its
big-spending audiences.
Getting the powertodecide al-
most everything about the game
based on anyfinancial metric,how-
ever,isn’t fair enough at all. Of
course money will tend to equal
power, but this implies that ateam
or nation’scontribution to asport is
solely about howmuch revenue it
generates .It’sareductivedefinition
of sport that misses the whole point
of theenterprise,and risks reducing
cricket to just another commodity.
Theintangibles with asport like
cricket arebiggerand moreimpor-
tant than with almost anyother
product, butruthlessand single-
minded pursuit of short-term finan-
cial gain could accidentally strangle
the goose that lays the golden egg.
Top-level international cricket
doesn’t have manyteams,but it has
shrewdly maximizedits resourcesby
forcing those teams to all playeach
other,based on the FTP,keeping the
smaller nations competitivewith a
decent shareofthe financial spoils
and making formorerewarding in-
ternational competition. Now, the

big,rich teams would be free to just
playeach other all the time.
TheBig Threeclaim—and other
boards such as the West Indies
Cricket Boardhavesupported their
view—that the newproposals will
benefit everyone financially,reason-
ing that everyone’ssliceofthe pie
growsifthe pie itself keeps growing
at therateithas thanks to media-
rights deals.
This presupposes that the recent
spikeincricket’ spopularity,fed al-
most entirely by India, will continue.
But while benefiting financially
might be great foracricket board,
it’snot much use to the fans if it
comes,asitcurrently sometimes
does forcertain boards,atthe cost
of itsbest players actually playing
forthe country. Potentially shorn of
players,games and revenue,they
risk withering away,atwhich point
the already small number of teams
playing at the highest level will be
reduced even further.
Only acouple of thingsare cer-
tain in all this.One is that forthe
immediatefuture, the Big Three, and
in particular India, will continue to

getricher.Ingrowing their power,
which is in fact aformalization of
something that’ sbeen happening for
awhile,they have secured their own
short-term financial bounty.What
happens in the longer term, and
what happens to the other boards,
remains to be seen.
Theother is that cricket has put
itself decidedly on the wrong side of
historywheregovernanceiscon-
cerned.
Twoyearsago, areport by for-
mer Lord Chief JusticeofEngland
and Wales Lord Woolf,commis-
sioned by the ICC, proposed moving
in entirely the oppositedirection,
toward best-practicemodern stan-
dards of corporategovernanceand
transparency.With itsnew struc-
ture, described by Woolf as “a really
alarming position forthe futureof
cricket,” the ICChas decided to go
the other way,thereby creating an
uncertain futurefor itself.
BY RICHARD LORD
Bangladesh’sAnamul Haque watches India captain ViratKohli bowl in Wednesday’sAsia Cupmatch in Fatullah. Kohli scored acentury as India wonbysix wickets.
Leading From the Rear:
South Korea’sOther Title
Afterarespectable 14 podium

appearances in Vancouver’s 2010
Winter Olympics, South Korea’s
outlook wasbrightgoing into the
2014 Games. The Koreans weren’t
able to liveuptoexpectations,
earning only eightmedals in Sochi,
but theywerethe bestinthe
world in one unfortunate category:
finishing last.
Forthe thirdconsecutiveOlym-
pics, The Wall Street Journal
awarded lead, tin and zinc medals
to the three worstperformers to
completeagiven event(based on
time or scoreoflast-placefinishers
in every Olympic event; no disquali-
fications or nonfinishers were
counted). South Korean Olympians
finished in the bottom three places
in an astounding 19 different
events, moreoften than anyother
participating country.
Canada came in second with 16
medals, with the U.S. (15) earning
the thirdmostnot-so-precious
medals. Sincethe U.S. and Canada
have large Olympic delegations, it
isn’tentirely surprising to see such
large pools of Olympians finish all
overthe field of competition: These

twocountries earned 28 and 25
real medals, respectively,inSochi.
Poland has no such excuse. De-
spiteits much smaller Olympic del-
egation, Poland finished with 14 of
our dubious medals, while taking
home only six real ones.
—Ryan Wallerson
NewBannisterTrophy
Will Honor Historic Mile
The 60th anniversary of Roger
Bannisterbreaking the four-minute
mile will be marked with racesover
the distanceinLondon.
The 84-year-old Bannisterwill
be patron of the May24event
thatwill see 30 racesfinishing in
frontofBuckingham Palace.
The winner of the senior men’s
race will be awarded the newSir
Roger Bannistertrophy, and there
will be runs forchildren, families,
seniors and wheelchair athletes.
“The mile has awonderful sym-
metry as arace, neither tooshort
nor toolong,” Bannistersaid on
Wednesday. “And I’mlooking for-
ward very much to being involved
with this ev ent.”
In an achievementthatstands

as one of the seminal moments in
track history,Bannistercovered
four laps on acinder track in 3
minutes, 59.4 seconds on May6,
1954, in the English cityofOxford.
At the time, manythoughtthe feat
wasanimpossible one.
—Associated Press
HEARD ON
THE PITCH
Associated Press
Miler Roger Bannisterhits the
tape to beat4minutes in 1954.
BCCI PresidentNSrinivasan
Getty Images; Reuters (above)
4 |Thursday, February27, 2014 THE WALL STREETJOURNAL.
EUROPE NEWS
Rome’sWoesHand Renzi FirstSetback
Snag to Central Government Transfer Leaves Eternal City Teetering on Bankruptcy; CutstoJobs, Services Loom
ROME—TheEternal City,now
teetering on the brink of aDetroit-
style bankruptcy,has served Italy’s
newprime minister his firstmajor
political headache.
On the firstday of his premier-
ship,MatteoRenzi had to withdraw
adecree,promulgat ed by his prede-
cessor,that would have helped the
city of Rome fill an €816 million
($1.17billion) budget gap, afterfili-

bustering by opposition lawmakers
in the Parliament on Wednesday
signaled the bill had little likelihood
of passing.
As aresult, Rome’scity fathers
must nowfaceunpalatable
choices—such as cutting public
services,raising taxesordelaying
paymentstosuppliers—togain time
as they search forways to close a
yawning budget gap. If it fails,the
city could be placed under an ad-
ministratortasked with selling off
city assets, such as itsutilities.
“It’stime to stop the accounting
tricks and declareRome’sdefault,”
said Guido Guidesi, aparliamentar-
ian from the Northern League,
which opposed the measure.
Rome’smayor,Ignazio Marino,a
U.S trained transplant surgeon,
rode to elector al victorylast year on
promises to vanquish nepotism, im-
provebasic services and bolster
tourism in the city center with ini-
tiatives such as keeping the Imperial
Forumilluminated and open all
night. Instead, he has been battling
to hold together the budget. On
Wednesday, he signaled he had no

intention of presiding over deep
cuts, while the head of the city
council warned of the broader im-
pact of Rome’sfinancial troubles.
“A default of Italy’s capital city
would triggerachain reaction that
could sweep acrossthe national
economy,” said MirkoCoratti, head
of Rome’scity council said on
Wednesday.
Theheart of the mayor’splan
has been an appeal fora€485 mil-
lion transfer from the central gov-
ernment to compensateRome for
the extracostsitincursinits ro le
as amajor tourist destination, the
nation’scapital and the seat of the
Vatican.
“Rome is unique compared with
other cities” and deserves stat esup-
port because of hugenumbersof
visitorswho use services but don’t
contributemuch to the economy,
Mr.Marino said in arecent inter-
view.
But even beforethe government
of EnricoLetta fell this month, the
proposed transfer had prompted
complaintsthat the aid wasunfair,
given the direstraitsofother cities.

Romehas long struggled to bal-
anceits books.Because of itsdearth
of industry,the city depends heavily
on trash-collection levies and the
sale of bus and subway tickets. It
struggles much morethan other Eu-
ropean cities to co llect either one.
About one in four passengerson
Rome’spublic transit system doesn’t
buy tickets, costing around €100
million in lost revenue annually,
compared with just 2% of passen-
gers on London’spublic transit net-
work.
Meanwhile,employeeabsentee-
ism at Rome’spublic-transit and
trash-collection agencies runs as
high as 19%, far abovethe national
average.
Just six yearsago, some €12 bil-
lion in city debtswas transferred to
aspecial fund subsidized and guar-
anteed by the national government
in amoveaimed at giving Rome a
fresh start. But Italy’s economyhas
shrunk by almost 10% sincethen,
eroding the taxbase just as national
austerity programs pushed extra
costsontolocal governments.
Even beforethe withdrawalof

the “SaveRome” decree,Mr. Marino
wasfacing unpalatable choices.He
has already ra ised cremation and
cemeteryfees and plans to central-
izecity procurement, which he says
will save €300 million ayear.
Now, without the transfer from
the central government, he maybe
forced to impose income and prop-
erty taxsurcharge—already among
the highest in the country—and to
cut salaries to the city’s 20,000 em-
ployees or trim city services such as
child-carecentersorjob-training
programs.
Thepolitical fallout could be se-
vere.The mayorofTarant o, asouth-
east city that defaulted on millions
in debt in 2006,has suffered some
of the lowest poll ratingsinthe
countryafter cutting back services.
Mr.Renzi, who wasthe mayorof
Florenceuntil becoming prime min-
ister,isexpected to promulgatea
newdecree forRome soon, but the
terms areunclear.The newprime
minister has said he intends to give
local administrations morebudget
leeway.
Draconian measures could also

exacerbateRome’shistoric struggles
to cope with itsgrowthand to bal-
ance the needs of itshistoric city
center—which hostsaround 10 mil-
lion touristsayear—with apoorly
served periphery. Rome’ spopulation
has growntenfold sincethe
mid-19th century. Fewtouristssee
thecity’s sprawling outskirts, but
they arehome to morethan 80% of
Rome’s2.6 million residents.
Nearly 400,000 people livebe-
yond the capital’sbusy ring road,
most of them unserved by public
transit and forced to drivetowork.
Romehas 978carsper every1,000
city residents, morethan twicethe
rate of Paris and almost three times
that of London. Recent heavy rains
caused large-scale damage, exposing
the need formajor maintenanceof
the city’s road network.
If basic services aren’t improved,
“people will just leave…and Rome
ends up likeVenice,” which to day
hasasmall and aging city popula-
tion, says FrancescoRosso,ageolo-
gist who for20yearshas suffered a
three-hour commuteintothe center.
Tourism is an important source

of revenue but no panacea. Rome’s
shareoftourism is only half the
level of Florence’sper capita, ac-
cording to Pierluigi Testa, head of a
civic advocacygroup.And confer-
encetourism—a lucrativeniche—
hasgrown only 12% in Rome since
2000,compared with 52% globally,
Mr.Marino says.
BY CHRISTOPHER EMSDEN
Rome MayorIgnazio Marino,who rides his biketowork, facestough choices in trying to close the city’sbudget gap.
European PressphotoAgency
German CourtEasesParty EntrytoEur ope Parliament
BERLIN—Germany’sconstitutional
court struck down a3%threshold for
political parties to be elect ed to the
European Parliament, aruling that
could pave the way formorefringe,
single-issue and extremist parties to
win seatsinaMay vote.
Thecourt fo und Germany’slaw
requiring that parties win at least 3%
of the vote to the European Union’s
legislativebody violates the consti-
tution,saying it harms voters and
parties. Although Wednesday’srul-
ing applies only in Germany, it could
have atangible impact on the assem-
bly because the co untry, the bloc’s
most populous,fills 13% of the Euro-

pean Parliament’sseats. It adds to
other factorsthat analystssay could
challengethe dominanceoflarge,
mainstream parties in the body.
Pollstersare already predicting
moresuccess in parliamentaryelec-
tions formarginal parties acrossEu-
rope.Inmanycountries that share
the euro, voters have grownangry
at established parties and European
institutions afterfour yearsofpain-
fuleconomic crises.This is lesstrue
in Germany, wherethe economyhas
remained strong.
Yetthe ruling will makeiteasier
forsmall German parties that are
hostile to the EU,such as the Alter-
nativefor Germany, or AfD, and sev-
eral neo-Nazi parties,towin seats.
Theruling comes despitethe EU
urging memberstoset thresholds of
up to 5%, amovemeant to keep
fringeparties from slowing debate.
Afractured European Parliament
could find it difficult to generate
majorities andreach compromises
with other EU institutions.This
could cripple the already slowand
complexEuropean legislativepro-
cess and potentially discredit Eu-

rope’ sonly directly elected assembly.
“This is acat astrophicdecision, ”
said Ma nfredGüllner, head of Ger-
many’sForsa polling gr oup .“Without
athreshold, democracydoes not work.
We sawthat in the Weimar Republic.
And we see that todayatthe [Ger-
man] municipallevel,wher ethresh-
olds have been largely abolished.”
Assemblies elected via purepro-
portional repr esentation, Mr.Güllner
said, “get captured by malcontents
who don’t do anywork and use their
mandates as public platforms.It’sa
dictatorship of minorities.”
Germanyhas been extr emely con-
cerned about checking the powerof
extremistssincethe end of the Nazi
era. Thereisstill a5%hurdle forna-
tional legislativeelections,set up in
the postwarconstitution to prevent
parties such as those on the far-right
from getting ahold on national poli-
tics.But the newruling said this de-
nied some voters equal rights.
“Everyeligible voter’svotemust
have the same value and the same
legitimatechanceofsuccess,” An-
dreas Vosskuhle,president of the
Karlsruhe-based Constitutional

Court, said as he delivered Wednes-
day’sdecision. “It can’t be assumed
by implication that the flexible
building of majorities practiced un-
til nowwould be notably hindered
by the election of newparliamentar-
ians from smaller parties.”
Nineteen small parties,including
the Pirate Party and far-right NPD,
and morethan athousand citizens
filed suit afterthe Bundestag,the
lowerhouse of the German parlia-
ment, introduced the 3% hurdle in
2013.That followedthe Karlsruhe
court’ srejection of an earlier 5% hur-
dle forEuropean elections in 2011.
Wednesday’sruling poses achal-
lengefor conservativeChancellor
Angela Merkel’sgovernment—a so-
called grand coalition of the largest
center-leftand center-right parties.
Although opinion polls suggest the
two parties will getahigher propor-
tion of the votesthan at the last Eu-
ropean elections in 2009 ,they could
end up with fewerseats. Parties
that scored belowthe threshold rep-
resented morethan 10% of the total
vote in the most recent election.
Given the rise of the AfD, the

conservatives are“fishing on the
fringesofthe right [wing],” said
GeroNeugebauer, apolitical scien-
tist at Berlin’sFreeUniversity.“The
large [parties] canonly lose,and
the smaller ones cantry to win.”
TheSocial Democrats’ parlia-
mentaryfloor leader,Thomas Op-
permann, said hiscenter-leftparty
“wantstodoevery thing so that ex-
treme and right-wing German par-
ties have no placeinthe newEuro-
pean Parliament.”
TheEuropean Parliament passed
aresolution in late2012 encourag-
ing member stat es to establish mini-
mum thresholds to “effectively safe-
guardthe functionality of
parliament. ” Fourteen of 28 member
stat es have some kind of threshold.
—Gabriele Steinhauser
contributed to this article.
BY HARRIET TORRY
Open to All
Germany’s2009 European Parliamentelection results
German parties no longer have to poll above athreshold to enterthe
European Parliament, giving fringe parties thatfell short of the 5%
threshold in 2009 the chancetowin seats.
The Wall Street Journal
Source:European Parliament

Christian Democrats
Social Democrats
Greens
Free Democrats
Left
Belowthe 5% vote threshold
(no seats in Parliament)
Free Voters
Republicans
Animal Protection Party
Pirates
The Grey
Others
1.7%
1.3%
1.1%
0.9%
0.2%
5.5%
37.9% of votes (42 seats in Parliament)
20.8% (23)
12.1% (14)
11.0% (12)
7.5% (8)
THE WA LL STREETJOURNAL. Thursday, February27, 2014|29
PERSONAL JOURNAL
Help! I’monaConferenceCall:
HowtoGet Things Done
Rambling, Multitasking or Zoning Out AreAmong Abuses in Ritual of OfficeLife
Theconferencecall is one of

the most familiar rituals of office
life—and one of the most hated.
Abuses arerife. People on the
line interrupt others, zone out or
multitask,forgetting
to hit “mute” while
talking to kids or
slurping drinks.
Sales executiveEricaPearce
has seen teleconferences inter-
rupted by home FedEx deliveries,
crying children and the sound of a
co-worker vacuuming his house.
“Nobody could hear,” she says of
the cleaning.Asleader of the
meeting,she said intothe phone,
“Ifyou’revacuuming,Iappreciate
that, and you’rewelcome to come
to my house afterward. But you
need to be on mute.”
Another conferencecall ended
when aparticipant put his line on
hold, starting astream of elevator
music,says Ms.Pearce of Scotts-
dale,Ariz., aglobal account execu-
tivefor asoftware company. Con-
ference-call complaintsare so
widespread that arecent comedy
video showing howridiculous con-
ference-call behavior such as se-

cretly playing solitairewould look
“inreal life” has drawnmorethan
six million views.
But confer enc ecalls aren’t go-
ing anywher e; they aretoo useful
forbusinesses dealing with far-
flung workplaces,flexible sched-
ules and aclampdown on business-
travel expenses.Time spent in
audio conferences in the U.S. is ex-
pected to grow 9.6% ayear through
2017, ac cording to Wainhouse Re-
search, aBoston market-research
firm; about 65% of all conferencing
is still done by audio calls.
Thereare waystofix the prob-
lems.For instance, meeting lead-
ersmust set firmer ground rules
than they do forface-to-facemeet-
ingsand tighter,moreexplicit
agendas.Leadersalso have to
work harder to getparticipants
talking,both by asking moreques-
tions and by listening more.
Manyconferencecalls aresplit
between people in aconference
room and othersonamuddy-
sounding call-in line.This often
makes remoteparticipants“feel
likesecond-classcitizens,like,

‘The cool kids arehere, ’ ” says
LauraStack,author of “Execution
Is the Strategy.”
She advises leaderstohaveall
participantssay their names when
they speak so remotecallersknow
what’sgoing on. If someone cracks
ajokeand the room burstsinto
laughter,the leader should “let the
othersknowwho said what and
repeat the joke,” says Ms.Stack,a
Denverproductivity consultant
and trainer.
One of the biggest problems
with virtual meetingsisthat it is
hardfor participantstobuild rap-
port with each other,ahurdle
cited by 75%of3,301 businesspeo-
ple surveyed in 2012 by RW3, a
NewYork cultureand leadership
training company. Theabsenceof
nonverbal cues such as facial ex-
pressions makes manypeople hes-
itant to speak up and makes it
harder to payattention. In the
survey,71% of participantscited a
lack of participation by othersasa
problem with virtual meetings.
To build relationships,Ms.
Pearce takestime during the tele-

conferences she leads to have par-
ticipantswho don’t knoweach
other introducethemselves,ex-
plain their roles in the project at
hand, and tell what they want out
of the meeting,she says.
Forteleconferences,agendas
and goals should be clearer and
moreexplicit than forface-to-face
meetings. “You need to script
them moretightly” to keep peo-
ple’sattention from wandering,
says Daniel Mittleman, an associ-
ateprofessor in computing and
digital media at DePaul University,
BY SUE SHELLENBARGER
The Juggler
Fails to hit ‘mute’
while multitasking;
everyone canhear
the sounds of typing,
chewing, barking
dogs or screaming
toddlers.
The Coach
Managesthe flow
of conversation
toward aplanned
goal, noting when the
conversation goes

o-topic.
The
Monopolizer
Thinks through
solutions out loud,
talking endlessly
without regardfor
other participants.
The Host
Explains the face-
to-facejoking or
visual displays in the
meeting room so that
remoteparticipants
understand and don’t
feel le out.
The Lurker
Blindsidesother
participantsbysitting
through entirecalls
without announcing
his presenceuntil the
end, if at all.
The Interrupter
Fails to adapt to
communication delays
and repeatedly breaks
in while othersare
speaking.
Illlustrations by Robert Neubecker

WORK &
FAMILY
Chicago. Teleconferences requiring
interaction should be seven to
nine people,expertssay.
Meeting leadersshould talk
lessthan in face-to-facemeetings
and listen more, says Paul Done-
hue,president of Paul Charles &
Associates,aLondonderry, N.H.,
sales-management consulting firm.
Foraproblem-solving teleconfer-
ence, forexample,aleader might
talk 40% of the time and listen
60%, compared with a55%-to-45%
ratio when meeting face-to-face
forthe same purpose,Mr. Done-
hue says.
Leadersshould spend as much
time on preparing questions to ask
participantsasonwriting the
agenda, Mr.Donehue says.Head-
visesleaderstouse aform with
spaces to notecommentsbyindi-
vidual participantsduring the
meeting.This helps leaderslisten
closely and hold participants’ at-
tention by citing their earlier input.
Managing conflictsisharder in
teleconferences .Not everyone can

sense when asilent participant is
frustrated or angry. “There’s
sometimes alittle passive-aggres-
sivenessinthat silence,” Ms.Stack
says.“Some people just check out,
thinking,‘OK,you dummies,go
ahead and do that. I’m going to sit
hereonmute. ’ ” She suggestspos-
ing aquestion: “‘Jane,you’rekind
of quiet. What areyour thoughts?’
Yousometimes getanexplosion,”
but this canget important issues
out in the open, Ms.Stack says.
Participantscan help meetings
runmoresmoothly by volunteer-
ing to serveasmoderator,keeping
people on-topic and sticking to
time limits. Divvying up moderat-
ing and note-taking duties canfree
meeting leaderstoparticipateand
keep people engaged, Ms.Stack
says.Some managersencourag e
anyparticipant to moderate,
breaking in if aspeaker wanders
off-topic and asking that everyone
stick to the agenda, says Steven M.
Smith, senior consultant in Seattle
forSolutionsIQ,amanagement
consulting and training firm.
Time-zone differences canirri-

tate people who have to rise at
midnight to meet with colleagues
in the U.S.,says Michael Schell,
chief executiveofficer of RW3.
“It’simportant to movethe meet-
ing times around” to be fair,he
says.Also,meetingsshould start
promptly; taking 10 minutes to get
coffee might seem normal at 9
a.m. in NewYork,but it canseem
disrespectfultoacolleague in
Australia who gotout of bed to
join the call, Mr.Schell says.
Videoconferencing cansolve
some of the problems.The tech-
nologyisincreasingly inexpensive
and easy to use,and agrowing
number of applications,such as
Vidyoand Blue Jeans Network,
canconnect usersonavariety of
devices,including webcams,lap-
tops,tabletsorsmartphones,says
David Coleman, founder and man-
aging director of Collaborative
Strategies Inc., SanMateo,Calif.
Thetechnologycan create
other challenges,though. Mr.
Smith says participantswho aren’t
tech-savvyoften consume valuable
meeting time getting used to unfa-

miliar systems.
Videoconferencing also can
makepeople self-conscious.Many
people avoid video,Ms. Stack says,
because they don’t want to put on
makeup or changetheir workout
clothes.“Icannot tell youhow
manytimes I’veheardpeople say,
‘I don’t knowwhat’swrong with
my webcam. Ican’t getittowork,
so I’m just going to be herein
voice,’ ” she says.
Email
THE WA LL STREETJOURNAL. Thursday, February27, 2014|5
3.5 billion
people in the world lack
adequate access to energy
4million
people —one ev ery eight seconds —
die each year from energy poverty
Untold millions
around the world mustchoose
between paying forfood or power
Energy poverty.It’sthe world’snumber one human and environmental
crisis. It holds people and societies down, cripples health and damages
the environment.
Access to energy is an essential gateway to modern living, longer
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Sources: International Energy AgencyWorld Energy Outlook 2012; World Bank 2012; CIA World Factbook 2012; “Fires, Fuel &the Fate of 3Billion: TheState of the Energy
Impoverished,”Gautam N. Ya dama, 2013.
28 |Thursday, February27, 2014 THE WA LL STREETJOURNAL.
Major players&benchmarks
Credit derivatives
Spreads on credit derivatives are one way themarket rates
creditworthiness. Regions that are treading in rough waters
can see spreads swing toward the maximum—and viceversa.
Indexes below are for five-year swaps.
Markit iTraxx Indexes
SPREAD RANGE,in pct. pts.
Mid-spread, since mostrecent roll
Index: series/version in pct.pts. Mid-price Coupon Maximum Minimum Average
Europe: 20/1
0.71 101.33% 0.01% 1.04 0.69 0.81
Eur. High Volatility: 20/1
1.06 99.73 0.01 1.61 1.01 1.23
Europe Crossover: 20/1
2.65 110.16 0.05 4.08 2.65 3.23
Asia ex-Japan IG: 20/1

1.35 98.44 0.01 1.57 1.24 1.38
Japan: 20/1
0.75 101.20 0.01 0.97 0.68 0.82
Note: Data as of February25
Spreads
Spreads on
five-year swaps
for corporate
debt; based on
Markit iTraxx
indexes.
In percentage points
3.00
2.00
1.00
0
–1
t
Asia ex-Japan IG
t
Australia
2013
Sept. Oct. Nov.
2014
Dec. Jan. Feb.
Index roll
Source: Markit Group
Tracking
credit
markets &

dealmakers
Dow Jones Industrial Average
P/E: 16
LAST: 16198.41
s
18.75, or 0.12%
YEAR TO DATE:
t
378.25, or 2.3%
OVER 52 WEEKS
s
2,123.04, or 15.1%
Note: Price-to-earnings ratios are for trailing 12 months
17000
16500
16000
15500
15000
14500
29 6 13 20 27
Dec.
3 10 17 24 31
Jan.
7 14 21
Feb.
High
Close
Low
50–day
moving average

t
Stoxx Europe 50: Wednesday's best and worst
Previous
close, in
STOCK PERFORMANCE
Company Country Industry Volume local currency Previous session YTD 52-week
Anheuser-Busch InBev Belgium Brewers 2,300,703 76.34
2.79%
-1.2% 9.4%
Telefon L.M. Ericsson B Sweden
Telecommunications Equipment
7,202,453 84.20
1.32
7.3 5.9
ABB Switzerland Industrial Machinery 4,998,722 22.65
1.21
-3.5 8.6
Sanofi SA France Pharmaceuticals 2,429,752 75.36
1.13
-2.3 6.3
GlaxoSmithKline United Kingdom Pharmaceuticals 7,464,453 1,691
0.96
4.9 15.9
Tesco United Kingdom Food Retailers &Wholesalers 36,667,361 326.00
-2.74%
-2.5 -10.7
Credit Suisse Group AG Switzerland Banks 8,473,479 27.50
-2.48
0.8 12.2
Schneider Electric France

Electrical Components &Equipment
1,942,801 64.03
-2.26
1.0 13.7
Deutsche Telekom Germany Mobile Telecommunications 12,006,052 12.38
-2.02
-0.4 51.9
Barclays UnitedKingdom Banks 45,055,452 253.15
-1.84
-6.9 -14.8
And the rest of Europe's blue chips
Latest,
in local
STOCK PERFORMANCE
Company/Country (Industry) Volume currency Latest YTD 52-week
BASF 2,623,682 83.81 0.88%8.2% 16.3%
Germany (Commodity Chemicals)
Telefonica S.A.
16,954,632
11.48 0.61 -3.0 20.7
Spain (Fixed Line Telecommunications)
Roche Holding Part. Cert. 1,416,017 273.00 0.52 9.6 28.8
Switzerland (Pharmaceuticals)
Standard Chartered 4,359,598 1,290 0.39 -5.2 -26.3
United Kingdom (Banks)
Total 4,156,863 46.56 0.32 4.5 25.2
France (Integrated Oil &Gas)
Nestle 4,832,102 66.80 0.30 2.3 3.6
Switzerland (Food Products)
SAP 1,934,925 58.50 0.29 -6.1 -1.7

Germany (Software)
UBS 9,527,738 18.45 0.27 9.0 25.6
Switzerland (Banks)
Daimler 2,322,017 67.35 0.27 7.1 48.4
Germany (Automobiles)
BG Grp 8,130,549 1,100 0.23 -15.2 -4.1
United Kingdom (Integrated Oil &Gas)
Novartis AG 6,516,762 75.00 0.20 5.3 20.4
Switzerland (Pharmaceuticals)
HSBC Hldgs
21,951,541
627.10 0.02 -5.3 -12.0
United Kingdom (Banks)
Allianz SE 1,035,930 131.00 0.5 26.4
Germany (Full Line Insurance)
ENI
12,533,718
17.48 -0.1 0.6
Italy (Integrated Oil &Gas)
Zurich Insurance Group 473,482 268.50 -0.04 3.9 7.6
Switzerland (Full Line Insurance)
British American Tobacco 2,418,275 3,174 -0.08 -2.0 -7.2
United Kingdom (Tobacco)
Siemens 1,739,183 96.69 -0.11 -2.6 22.4
Germany (Diversified Industrials)
Financiere Richemont 948,457 88.65 -0.17 -0.2 20.3
Switzerland (Clothing &Accessories)
BP PLC
21,231,256
506.80 -0.24 3.8 14.1

United Kingdom (Integrated Oil &Gas)
L'Air Liquide 671,404 99.12 -0.24 -3.6 8.9
France (Commodity Chemicals)
Latest,
in local
STOCK PERFORMANCE
Company/Country (Industry) Volume currency Latest YTD 52-week
Unilever CVA 2,949,779 28.81 -0.38%-1.6% -1.9%
Netherlands (Food Products)
Royal Dutch Shell A
2,804,434
2,189 -0.39 1.2 2.4
United Kingdom (Integrated Oil &Gas)
AstraZeneca 1,578,851 4,075 -0.49 14.0 38.3
United Kingdom (Pharmaceuticals)
Lloyds Banking Group PLC
115,459,412
80.83 -0.49 2.5 52.1
United Kingdom (Banks)
Banco Santander S.A.
23,545,457
6.59 -0.53 2.2 22.0
Spain (Banks)
BHP Billiton 5,716,358 1,917 -0.60 2.6 -8.0
United Kingdom (General Mining)
Vodafone Group
95,804,879
245.25 -0.69 0.01 46.4
United Kingdom (Mobile Telecommunications)
BNP Paribas 2,928,662 59.04 -0.77 4.2 41.7

France (Banks)
National Grid 5,337,647 830.00 -0.78 5.3 16.2
United Kingdom (Multiutilities)
Banco Bilbao Vizcaya Argn
13,024,043
9.09 -0.85 1.6 27.7
Spain (Banks)
Reckitt Benckiser Grp 1,120,278 5,005 -0.89 4.4 14.6
United Kingdom (Nondurable Household Products)
Rio Tinto 4,529,912 3,408 -0.92 -0.1 -2.6
United Kingdom (General Mining)
Bayer 1,523,396 100.35 -0.94 -1.6 35.9
Germany (Specialty Chemicals)
Unilever
4,482,585
2,447 -0.97 -1.4 -5.4
United Kingdom (Food Products)
Diageo 4,121,465 1,874 -1.19 -6.3 -4.5
United Kingdom (Distillers &Vintners)
Glencore Xstrata PLC
26,373,971
329.85 -1.24 5.5 -13.9
United Kingdom (General Mining)
ING Groep
8,740,996
10.53 -1.31 4.2 75.2
Netherlands (Life Insurance)
Deutsche Bank
4,844,888
35.06 -1.39 1.1 0.3

Germany (Banks)
AXA 6,894,120 19.08 -1.55 -5.6 45.1
France (Full Line Insurance)
Moet Hennessy Louis Vuitt 961,326 135.15 -1.60 1.9 3.4
France (Clothing &Accessories)
Sources: SIX Financial Information
DJIA component stocks
Volume,
CHANGE
Stock Symbol in millions Latest Points Percentage
AT&T T 31.5 $32.00 –0.17 –0.54%
AmExpress AXP 3.7 89.68 –0.23 –0.26
Boeing BA 4.1 126.68 –0.10 –0.08
Caterpillar CAT 3.7 97.26 0.85 0.88
Chevron CVX 5.0 115.58 0.61 0.53
CiscoSys CSCO 39.0 21.94 0.10 0.46
CocaCola KO 14.7 37.87 0.10 0.26
Disney DIS 5.2 80.10 –0.11 –0.14
DuPont DD 3.4 65.47 0.55 0.85
ExxonMobil XOM 6.7 95.90 –0.41 –0.43
GenElec GE 26.3 25.31 0.04 0.14
GoldmanSachs GS 3.5 162.53 –0.40 –0.25
HomeDpt HD 8.4 81.69 0.71 0.88
Intel INTC 16.9 24.81 0.19 0.77
IBM IBM 3.3 184.19 0.96 0.52
JPMorgChas JPM 20.9 56.69 –0.34 –0.60
JohnsJohns JNJ 4.6 90.98 –0.13 –0.14
McDonalds MCD 3.4 95.91 –0.71 –0.73
Merck MRK 7.3 56.24 0.34 0.60
Microsoft MSFT 34.5 37.45 –0.09 –0.24

Nike B NKE 3.2 78.44 0.33 0.42
Pfizer PFE 20.3 31.97 0.07 0.24
ProctGamb PG 6.8 77.86 –0.26 –0.33
3M MMM 2.4 132.95 0.02 0.02
TravelersCos TRV 1.7 83.42 0.08 0.10
UnitedTech UTX 2.0 115.94 0.05 0.04
UtdHlthGp UNH 4.3 75.96 0.64 0.85
Verizon VZ 93.4 46.30 0.01 0.02
VISA ClA V 1.8 226.12 –0.99 –0.44
WalMart WMT 7.7
74.89
1.54
2.10
Source:WSJ Market Data Group
Credit-default swaps: European companies
Atitsmostbasic,thepricingofcredit-defaultswapsmeasureshowmuchabuyerhastopaytopurchase-and
how much aseller demands to sell-protection from default on an issuer's debt. The snapshot below gives a
sense which way the marketwas moving yesterday.
Showing the biggest improvement
CHANGE, in basispoints
Yesterday
Yesterday
Five-day 28-day
Stora Enso 205 –8 –16 –50
CASINO
GUICHARDPERRACHON
113 –4 –5 –5
SCANIA 44 –2 –13 –16
Bca Pop di Milano SocCoop 263 –9 –13 –25
LADBROKES 313 –10 –8 –12

METRO 114 –4 –2
Holcim 116 –4 –10
Valeo 87 –3 –6 –11
Societe Television
Francaise 1
68 –2 –2 –2
ATLANTIA 92 –3 –7 –12
And the most deterioration
CHANGE, in basispoints
Yesterday
Yesterday
Five-day 28-day
Landbk Baden Wuertbg 77 2 67
PostNL 137 2 14 –5
Bay Landbk Giroz 106 1 11 12
Telefonica 136 1 –1 –18
Publicis Groupe 37 –1 –2
Deutsche Bahn 38
Rio Tinto 90 1 3–10
LVMH Moet Hennessy
Louis Vuitton
53 –3
Centrica 75 24
Grohe Hldg 60
Source: Markit Group
BLUE CHIPS&BONDS
WSJ.com
>>
Followthe markets throughout the day, with updated
stock quotes, news and commentary at WSJ.com.

Also,receiveemails thatsummarizethe day’strading in
Europe and Asia. To sign up, go to WSJ.com/Email.
Below, alook at the DowJones Stoxx
50, the biggestand bestknown
companies in Europe, including the U.K.
Europe:
Bank revenues from equity capital markets
Behind every IPO,
follow-on or
convertible equity
offering is one or
more investment
banks. At right,
investment banks
historical and
year-to-date
revenues from global
equity-capital-market
(ECM) deals
Source: Dealogic
75%6
504
252
00
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
n
Equity capital markets
n
Debt capital markets (both in billions, left axis)
ECM as a percentage of total

(right axis)
t
6 |Thursday, February27, 2014 THE WA LL STREETJOURNAL.
UPHEAVAL IN UKRAINE
Protes ts St okeTension inCr imea
SIMFEROPOL,Ukraine—Thou-
sands of Crimean Tatars descended
WednesdayonCrimea’sparliament
to shout down Russian nationalists,
emerging as abulwark forKiev’s
newpro-Europe powers as separat-
ist sentiment in the region grows.
Crimea—a Black Sea peninsula
that belonged to Russiauntil 1954
and re mains dominated by ethnic
Russians—has sw iftly become the
epicenterofabacklash against the
Kiev protest erswho toppled Presi-
dent ViktorYanukovych. As his op-
ponentsbuild anew government,
some of the moreradical Russian lo-
cals in Crimea aredemanding the
autonomous region secede or once
again become part of Russia.
But Crimean Tatars—indigenous
Muslims who account forabout 12%
of Crimea’spopulation of two mil-
lion people—arethe exception. Their
strained relations with Russia go
back centuries,and manybristle at

the idea of their homeland moving
fartherintoMoscow’s orbit. Many
traveled to Kiev during the demon-
strations to support the pro-Europe
camp.InCrimea, they have become
the most powerful local advocates
forrecognizing the newpowers and
remaining part of Ukraine.
“The Crimean Tatars arethe key
problem forthe Russian national-
ists,” said Ihor Semyvolos, executive
direct or of the Association of Middle
East Studies in Kiev and an expert
on theregion.
On Wednesday, Ukraine’sacting
interior minister,Arsen Avakov, said
his main task wastoprevent the
outbreak of armed conflict in Cri-
mea. He said hisinstructions to all
policeand security personnel in the
region were clear: “Don’t provoke
anysort of conflict or armed stand-
off with civilians at anycost.”
Thetension waspalpable
Wednesdayonthe squareinSimfer-
opol. “Crimea is Ukraine!” thousands
of Tatars shouted while waving Ta-
tarand Ukrainian flagsoutside the
regional legislature, whereofficials
held talks on Crimea’stumult. The

Tatars raised their voices and whis-
tled to drownout an opposing
crowd of Russians wa ving Crimean
and Russian flagsand chanting
“Russia!” and “The fascistswon’t
come!”
“Our biggest demand is to not al-
lowasplit of Ukraine,” said Elmira
Baranov a, a40-year-old Crimean Ta-
tarfromFedosiya, who arrived at
the Simferopol rally wrapped in a
Ukrainian flag.Ms. Baranovasaid
the Tatars wouldn’t “allowRussia to
break up Ukraine and take away Cri-
mea. ”
Refat Chubarov,the Crimean Ta-
tarleader,has called forpeople pro-
moting separatism to be prosecuted
and has said Crimean Tatars won’t
tolerateabreakup of the country.
Still, pro-Russian sentiment in
Crimea runs strong,and the rise of
amorenationalistUkrainian leader-
ship afterthe collapse of Mr.Yanuk -
ovych’sgovernment last weekend
has alienated some local Russians
andfueled talk of separatism.
ViolenceinCrimea has remained
limited to afew street scuffles,but
the atmosphereistense.ARussian

businessman has takencontrol as de
factomayor of Sevastopol, home to
the Russian fleet, and called the new
powers in Kiev illegitimate. The
speaker of the Crimean parliament
float ed the idea of secession lat elast
week,though he has sincetoned
down hisrhetoric and vowedto
fight formoreautonomy. Some eth-
nicRussians have signed up to mili-
tias in recent days,saying they must
protect their cities from what they
describe as banditswho have taken
powerinKiev.
Manylocal Russians expresscon-
cern about the role Ukrainian na-
tionalists from the country’swest
played in toppling Mr.Yanukovych.
They worrythat under the national-
ists’ influence, the newgovernment
will pursue policies that drive
Ukraine away from Russia and cr ack
down on the use of the Russian lan-
guage. Alarge swath gettheir news
from Russian outlets, some of which
have focused on such fears.
“I don’t want to unitewith ban-
ditsand fascistswho will tell me
what languag etospeak or wheremy
placeis,” said Elena Sokolova, a36-

year-old computer progr ammer from
Simferopol, who waschanting “Rus-
sia!” from atop aplanter at the rally
on Wednesday.
She said Crimea is oriented to -
ward Russiaand should be allowed
to decide itsown fate. “They aren’t
letting us have areferendum,” Ms.
Sokolovacomplained. “They haven’t
let us have one for10years.”
Theopposition forces that have
emergedvictorious in Kiev have
triedtoquell the panic among such
RussiansinCrimea. Oleh Tyahnibok,
the leader of Ukraine’sultranational-
ist Svoboda party,playedaleading
role in the Kiev uprising but has said
he won’t take aformal position in
thenew government. He has urged
Crimeans to disregardwhat he
called fear-mongering about aban
on theRussian languag e, as well as
false rumorsabout the supposed ar-
rival of far-right nationalist hood-
lums in Crimea.
Still, some decisions by the new
provisional po wers in Kiev already
have stoked anger in the southern
region, including the disbanding on
Wednesdayofthe Berkut, aspecial

national antiriot unit that Mr.Yanu-
kovych’sgovernment ordered onto
Kiev’s main squar etoquell the pro-
tests. Berkut officers—manyim-
ported to the capital from Mr.Yanu-
kovych’sregional strongholds,
including Crimea—have become tar-
gets of public wrath acr os smuch of
Ukraine aftertheir clashes with pro-
testersleftdozens dead last week.
Thedecision rattled manyinCri-
mea who have greeted the injured
Berkut returning from Kiev as he-
roes.Russian activistsheresay Mr.
Yanukovychsent the forces to Kiev
withoutproper defenses and sub-
jected them to abuse from protest-
ersbeforeabandoning and embar-
rassing them. Thousands turned out
to afuneral last weekend in Simfero-
pol forsome of the local riot police
whodied in the Kiev clashes.The
newSevastopol mayor, AlexeiChaly
vowedWednesdaytoretain the Ber-
kutinthe Crimean city.
Thepresenceofthe Tatars in Cri-
mea, though, suggeststhe region
wouldn’t break off without astrug-
gle.For centuries,Tatarscontrolled
the Black Sea peninsula under the

CrimeanKhanate, aprotectorateof
the Ottoman EmpirebeforeCathe-
rine the Great annexedthe region
forRussia in 1783.The Russian Em-
pirelater fought against the Otto-
mans,Franceand Britain over the
territoryinthe 1850s Crimean War,
aconflict famous in part forthe role
playedbyBritish nurse Florence
Nightingale.
In 1954, Soviet leader Nikita
Khrushchev transferr ed Crimea from
RussiatoUkr aine,then both Soviet
republics.The peninsula stayed part
of independent Ukraine afterthe So-
viet Union’ scollapse in 1991, despite
itsmajority-Russian population.
Today, manyCrimean Tatars still
harbor deep resentment against the
Kremlin, because of they were de-
ported en massetoCentral Asia on
theordersofJoseph Stalin out of
paranoia that they would join with
the Nazis and createafifth column.
Mr.Semyvolos of the Association
of Middle East Studies in Kiev says
long-term peaceinCrimea depends
on negotiations among local leaders
that take intoaccount the welfareof
the Tatars.

BY PAUL SONNE
Ukrainians
Rush to Get
Out of Local
Currency
MOSCOW—Ukrainians aredelug-
ing local banks with inquiries about
switching their funds intosafer dol-
larsand euros amid arecord-break-
ing slide in the country’scurrency.
TheUkrainian arm of the Russian
lender Alfa Bank extended itswork-
ing hoursWednesdaytohelp deal
with demand. Alocal branch of Rus-
sia’sSberbank said ordinaryUkraini-
ans were concerned about the deval-
uation. “People in Ukraine do really
prefer foreign currencydeposits
these days, ” Sberbank said by email.
Thedollar Wednesdayshot above
10 against the hryvnia forthe first
time,inparallel with aslump in the
Russian ruble.AUkrainian central
bank official said it wasdropping its
increasingly ineffectiveeffortsat
supporting the currency.
Thelocal banking association
suggested atemporarylimit of
$1,000 per person fordaily foreign-
currencypurchases.The central

bank said it wasn’t considering lim-
itsoncash withdrawals,though
manybanks already limit withdraw-
als from their ATMs.
Ukraine is facing a“horrifying
economic crisis,” said acting Presi-
dent Oleksandr Turchynov. He
blamed the previous government
and corruption forthe malaise.
Ukraine is reeling from violent
protestsand the political vacuum
leftafter the ouster of President Vik-
torYanukovych. Thecratering cur-
rencypresentsfurther problems.
Terms of abond that Russia
bought from the countryaspart of
an aiddeal in December statethat
Ukraine’sdebt pile should not repre-
sent morethan 60% of itsannual
economic output. As the hryvnia
slides,dollar-denominated debt be-
comes moreexpensivetorepay,
ratcheting that ratio higher.
Tim Ash, an analyst at Standard
BankinLondon, said that while the
dollar traded at around 8.30 against
the hryvnia, the debt ratio stood at
42%. “However, at an exchangerate
of 10,this ratio increases to 46% of
GDP,” he said. “Theremay well be

other claims on the sovereign out
there, so the danger is that the ratio
mayalready be above50%.”
Asked about the threshold, Rus-
sia’sfinanceminister Anton Silu-
anov said that “ifthe covenantsare
violated, then we enter talks about
the execution of our agreement. ” He
didn'telaborate.
Theruble also hit record lows,
accelerating it splungeafter Russian
President Vladimir Putin ordered
militaryexercises in aregion close
to Ukraine.Asamoreeasily tradable
currency, the ruble wasbearing
some strain as aproxyfor the
hryvnia, analystssaid.
“All the messinthe ruble is
linked to Ukraine,” said Pavel
Demeshchik, adealer at ING Bank in
Moscow.
To be sure, thereare signs that
demand fordollarsand euros in
Ukraine could wane—foreign cur-
rencyisgetting stag geringly expen-
siveand it is oftendifficult to match
buyersand sellers.
“People see the rate and walk
away,” said acashier at OTP Bank
close to Maidan, Kiev’s central

squarewherethe antigovernment
proteststarted in lateNovember.
BY ANDREY OSTROUKH
AND ALEXANDER KOLYANDR
Associated Press
ARussian armored personnel carrier on the street this week in Ukraine’sBlack Sea port of Sevastopol, which is home to amajor Russian navalbase.
The presenceofTatars
suggests Crimeawouldn’t
breakawayeasily.
THE WA LL STREETJOURNAL. Thursday, February27, 2014|27
Major stock market indexes Stock indexes from around the world, grouped by region. Shownin local-currency terms.
PREVIOUS SESSION
PERFORMANCE
Region/Country Index Close Net change Percentage change Yr to-date 52-wk.
EUROPE Stoxx Europe 600 337.70 -0.69
-0.20%
2.9% 18.7%
Stoxx Europe 50 2972.32 -1.85
-0.06
1.8 14.4
Euro Zone Euro Stoxx 321.88 -1.14
-0.35
2.4 23.5
Euro Stoxx 50 3148.19 -9.29
-0.29
1.3 22.5
Austria ATX 2676.98 -6.15
-0.23
5.1 11.5
Belgium Bel-20 3055.80 14.09

0.46%
4.5 21.7
Czech Republic PX 1019.77 -9.79
-0.95
3.1 2.7
Denmark OMX Copenhagen 657.12 -5.38
-0.81
16.1 32.6
Finland OMXHelsinki 7522.44 -42.88
-0.57
2.5 22.5
France CAC-40 4396.91 -17.64
-0.40
2.4 21.4
Germany DAX 9661.73 -37.62
-0.39
1.1 27.2
Hungary BUX 17794.88 41.19
0.23
-4.1 -3.7
Ireland ISEQ 5103.62 -47.04
-0.91
12.4 36.7
Italy FTSE MIB 20398.10 -75.07
-0.37
7.5 31.2
Netherlands AEX 398.64 -2.13
-0.53
-0.8 18.9
Norway All-Shares 609.19 0.54

0.09
1.1 17.3
Poland WIG 52983.97 -703.83
-1.31
3.3 15.5
Portugal PSI 20 7254.24 -87.69
-1.19
10.6 20.7
Russia RTSI 1286.07 -20.30
-1.55%
-10.9 -16.0
PREVIOUS SESSION
PERFORMANCE
Region/Country Index Close Net change Percentage change Yr to-date 52-wk.
Spain IBEX 35 10224.30 -18.20
-0.18
3.1 28.1
Sweden OMX Stockholm 442.67 0.39
0.09%
4.5 19.8
Switzerland SMI 8532.99 26.70
0.31
4.0 14.0
Turkey BIST 100 61503.04 -620.8
-1.00
-9.3 -20.7
U.K. FTSE100 6799.15 -31.35
-0.46
0.7 8.4
ASIA-PACIFIC DJ Asia-PacificTSM 1419.35 -3.73

-0.26
-2.0 4.5
Australia SPX/ASX 200 5437.00 3.20
0.06
1.6 7.9
China Shanghai Composite 2041.25 7.04
0.35
-3.5 -11.8
Hong Kong Hang Seng 22437.44 120.24
0.54
-3.7 -0.6
India S&P BSE Sensex 20986.99 134.52
0.65
-0.9 9.6
Japan Nikkei Stock Average 14970.97 -80.63
-0.54
-8.1 33.0
Singapore Straits Times 3088.25 -15.37
-0.50
-2.5 -5.3
South Korea Kospi 1970.77 5.91
0.30
-2.0 -1.7
AMERICAS DJ Americas 464.43 -0.91
-0.20
-0.3 20.0
Brazil Bovespa 46603.31 -112.60
-0.24
-9.5 -18.2
Mexico IPC 38675.12 -348.53

-0.89
-9.5 -11.1
Note: Americasindex dataare asof 3:00p.m. ET. Sources: SIX Financial Information;WSJMarketData Group
Cross rates U.S dollar and euro foreign-exchange rates in global trading
USD GBP CHF SEK RUB NOK JPY ILS EUR DKK CDN AUD
Australia 1.1160 1.8579 1.2510 0.1712 0.0310 0.1839 0.0109 0.3171 1.5255 0.2044 1.0038
Canada 1.1117 1.8507 1.2462 0.1705 0.0309 0.1832 0.0109 0.3159 1.5196 0.2036 0.9962
Denmark 5.4596 9.0887 6.1198 0.8374 0.1516 0.8998 0.0533 1.5514 7.4627 4.9109 4.8920
Euro 0.7316 1.2179 0.8200 0.1122 0.0203 0.1206 0.0071 0.2079 0.1340 0.6581 0.6555
Israel 3.5191 5.8583 3.9446 0.5398 0.0977 0.5800 0.0344 4.8102 0.6446 3.1654 3.1533
Japan 102.3698 170.4179 114.7483 15.7016 2.8422 16.8720 29.0898 139.9288 18.7505 92.0809 91.7279
Norway 6.0674 10.1006 6.8011 0.9306 0.1685 0.0593 1.7241 8.2936 1.1113 5.4576 5.4367
Russia 36.0178 59.9598 40.3730 5.5244 5.9362 0.3518 10.2349 49.2325 6.5972 32.3978 32.2735
Sweden 6.5197 10.8536 7.3081 0.1810 1.0745 0.0637 1.8527 8.9118 1.1942 5.8644 5.8420
Switzerland 0.8921 1.4851 0.1368 0.0248 0.1470 0.0087 0.2535 1.2194 0.1634 0.8025 0.7994
U.K. 0.6007 0.6733 0.0921 0.0167 0.0990 0.0059 0.1707 0.8211 0.1100 0.5403 0.5383
U.S. 1.6647 1.1209 0.1534 0.0278 0.1648 0.0098 0.2842 1.3669 0.1832 0.8995 0.8960
Source: ICAP Plc.
MSCI indexes
Developed and emerging-market regional and country indexes
from MSCI as of February 26, 2014
Price-to-
LOCAL-CURRENCY
Dividend
earnings
PERFORMANCE
yield
ratio
MSCI Index Last Daily YTD 52-wk.
2.50%

16
MSCI ACWI* 408.34 -0.03% -0.1% 15.0%
2.50
17
World (Developed Markets) 1,669.41 -0.07 0.5 18.8
2.40
17
World ex-EMU 203.02 -0.07 0.2 18.4
2.40
17
World ex-UK
1,679.44
-0.09 0.4 19.3
3.10
16
EAFE 1,938.47 -0.36 1.2 14.9
2.70 11 Emerging Markets (EM) 955.54 0.30 -4.7 -10.6
3.30
16
EUROPE 115.34 0.01 2.9 16.6
3.20
18
EMU 202.18 -0.07 2.3 21.5
3.20
18
Europe ex-UK 124.20 0.15 3.2 18.7
4.20
13
Europe Value 117.40 -0.12 3.4 17.5
2.40

21
Europe Growth 109.06 0.15 2.3 15.6
2.30
23
Europe Small Cap 277.19 0.25 6.3 34.8
3.70 6 EM Europe 258.26 -1.48 -6.0 -17.4
3.60
13
UK
2,012.55
-0.53 1.0 8.3
3.30
17
Nordic Countries 212.00 0.52 5.1 16.6
3.70 4 Russia 764.94 -0.87 -3.5 -4.8
3.00
18
South Africa 1,138.55 -0.37 0.1 13.3
3.00
13
AC ASIA PACIFIC EX-JAPAN
459.04 -0.16 -1.9 -4.0
1.80
16
Japan 760.64 1.21 -5.5 31.1
3.40 9 China 58.92 -0.45 -6.6 -10.0
1.50
16
India 802.66 0.23 -1.8 3.1
1.20

10
Korea 571.01 0.81 -3.1 0.9
2.90
16
Taiwan 300.41 0.25 -0.7 6.5
1.90
19
US BROAD MARKET 2,114.30 0.11 0.4 24.8
1.50
30
US Small Cap
3,290.31
0.03 1.9 31.5
3.20 14 EMLATIN AMERICA
2,922.08
1.66 -8.7 -25.8
*Twenty-four developed and 21 emerging markets Source: MSCI
S&P Dow Jones Indices
Price-to-
Dividend
earnings
PERFORMANCE (euros)
PERFORMANCE (U.S.dollars)
yield* ratio* S&P Dow JonesIndex Last Daily 52-wk. Last Daily 52-wk.
2.45%
18.52
Global TSM
3240.01
-0.06% 16.7%
2.99 17.72 Global DOW 1698.81

0.31% 13.7%
2467.64
-0.10 18.6
3.05 13.47 Global Titans 50 224.66
0.34 8.8
229.48 -0.08 13.5
3.17 19.15 Dev Europe TSM
3470.15
-0.60 23.9
2.39 19.37
Developed Markets TSM
3272.90
-0.05 19.6
2.99
13.07
S&P BMI Emg Markets
243.77 -0.08 -8.1
3.33
18.44
S&P Europe 350 1375.62
-0.17 17.6
1689.47
-0.76 22.7
3.24 21.17 S&P Euro 1364.68
-0.35 22.5
1698.54
-0.94 27.8
3.80 17.32 Europe Dow 1434.24
-0.21 18.2
2081.75

-0.69 23.2
3.61 8.55 BRIC 50 362.49
0.50 -14.1
472.67 0.09 -10.4
1.93
19.85
U.S. TSM
19565.83
0.40 23.8
Kuwait Titans 30 -c 203.42 -0.18 3.8
Price-to-
Dividend
earnings
PERFORMANCE (euros)
PERFORMANCE (U.S.dollars)
yield* ratio* S&P Dow Jones Index Last Daily 52-wk. Last Daily 52-wk.
Turkey Titans 20 -c 628.12 -0.98% -21.0%
6.35%
14.98
Global Select Div 251.92 -0.64 13.4
6.71
14.35
Asia/Pacific Select Div 283.18 0.86%
-8.2%
331.21 0.37 -4.3
U.S. Select Dividend -d
1244.21 0.27 21.7
3.29
29.14
S&P Glb Nat Resources

1993.13 0.01
-6.4
2708.51 -0.39 -2.4
2.16
19.16
Islamic Market 2779.26 0.17 17.1
2.50
17.18
Islamic Market 100
3020.66
0.11 18.1
Islamic Turkey -c 3838.60 -0.85 -12.1
3.29
21.22
Sustainability Europe 110.86 -0.29
16.1
166.54 -0.77 21.1
3.97
22.93
S&P Glb Infrastructure
1508.36 -0.15
6.9
2330.27 -0.56 11.5
1.94
13.55
Luxury 2063.76 -0.39 17.2
DJ-UBS Commodity -p 118.13 -0.34
-2.5
133.51 -0.34 -2.3
*Fundamentals are based on data in U.S. dollar.Footnotes:a-inUS dollar. b-dividends reinvested. c-in local currency. Note:All data as of 2p.m.ET. Source: S&P Dow Jones Indices

GLOBAL MARKETS LINEUP
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Commodities Prices of futures contracts with the mostopen interest
EXCHANGE LEGEND: CBOT: Chicago BoardofTrade;CME:Chicago Mercantile Exchange; ICE-US: ICE Futures U.S.MDEX: Bursa Malaysia
Derivatives Berhad; LIFFE: London InternationalFinancialFuturesExchange;COMEX: Commodity Exchange; LME: London Metals Exchange;
NYMEX: New York Mercantile Exchange;ICE-EU:ICEFuturesEurope*Data as of February 25, 2014
ONE-DAY CHANGE
Year Year
Commodity Exchange Lastprice Net Percentage high low
Corn (cents/bu.)
CBOT
459.75 -1.50
-0.33%
465.00 414.50
Soybeans (cents/bu.)
CBOT
1397.50 10.25
0.74%
1,397.75 1,247.50
Wheat (cents/bu.)
CBOT
605.25 -12.75
-2.06
620.00 553.75
Live cattle (cents/lb.)
CME

145.150 2.750
1.93
145.300 135.375
Cocoa ($/ton)
ICE-US
2,931 10
0.34
3,002 2,636
Coffee (cents/lb.)
ICE-US
177.75 1.50
0.85
181.25 112.50
Sugar (cents/lb.)
ICE-US
17.67 -0.01
-0.06
18.08 14.92
Cotton (cents/lb.)
ICE-US
86.26 -1.09
-1.25
90.44 82.60
Rapeseed (euro/ton)
LIFFE
394.75 5.00
1.28
398 349
Cocoa (pounds/ton)
LIFFE

1,827 6
0.33
1,871 1,674
Robusta coffee ($/ton)
LIFFE
1,999 -18
-0.89
2,045 1,575
Copper ($/lb.)
COMEX
3.1945 -0.0325
-1.01
3.4110 3.1775
Gold ($/troy oz.)
COMEX
1328.90 -13.80
-1.03
1,345.60 1,203.70
Silver ($/troy oz.)
COMEX
21.270 -0.731
-3.32
22.215 19.030
Aluminum ($/ton)*
LME
1,755.00 13.00
0.75
1,813.00 1,686.50
Tin ($/ton)*
LME

23,150.00 55.00
0.24
23,175.00 21,410.00
Copper ($/ton)*
LME
7,055.00 -6.50
-0.09
7,422.00 7,051.00
Lead ($/ton)*
LME
2,132.00 11.00
0.52
2,242.00 2,097.50
Zinc ($/ton)*
LME
2,045.00 12.00
0.59
2,110.00 1,964.00
Nickel ($/ton)*
LME
14,245 45
0.32
14,730 13,425
Crude oil ($/bbl.)
NYMEX
102.54 0.71
0.70
103.45 91.48
Heating oil ($/gal.)
NYMEX

3.0390 0.0044
0.14
3.0901 2.8758
RBOB gasoline ($/gal.)
NYMEX
2.9855 0.0139
0.47
3.0394 2.7831
Natural gas ($/mmBtu)
NYMEX
4.546 -0.145
-3.09
5.2090 3.8580
Brent crude ($/bbl.)
ICE-EU
109.50 -0.01
-0.01
110.82 104.75
Gas oil ($/ton)
ICE-EU
923.50 0.25
0.03
940.50 890.00
Sources: SIX Financial Information; WSJ Market Data Group
Currencies London close on Feb. 26
Per In
AMERICAS
Per euro Ineuros U.S. dollar U.S.dollars
Argentina peso-a 10.7740 0.0928 7.8821 0.1269
Brazil real 3.2136 0.3112 2.3510 0.4254

Canada dollar 1.5196 0.6581 1.1117 0.8995
Chile peso 766.90 0.001304 561.06 0.001782
Colombia peso 2812.12 0.0003556 2057.30 0.0004861
Ecuador US dollar-f 1.3669 0.7316 11
Mexico peso-a 18.2060 0.0549 13.3192 0.0751
Peru sol 3.8416 0.2603 2.8105 0.3558
Uruguay peso-e 30.759 0.0325 22.503 0.0444
U.S. dollar 1.3669 0.7316 11
Venezuela bolivar 8.68 0.115210 6.35 0.157480
ASIA-PACIFIC
Australia dollar 1.5255 0.6555 1.1160 0.8960
1-mo. forward 1.5287 0.6542 1.1184 0.8942
3-mos. forward 1.5348 0.6515 1.1229 0.8906
6-mos. forward 1.5442 0.6476 1.1297 0.8852
China yuan 8.3724 0.1194 6.1252 0.1633
Hong Kong dollar 10.6080 0.0943 7.7607 0.1289
India rupee 84.9251 0.0118 62.1300 0.0161
Indonesia rupiah 15910 0.0000629 11640 0.0000859
Japan yen 139.93 0.007146 102.37 0.009769
1-mo. forward 139.91 0.007148 102.35 0.009770
3-mos. forward 139.86 0.007150 102.32 0.009773
6-mos. forward 139.78 0.007154 102.26 0.009779
Malaysia ringgit-c 4.4931 0.2226 3.2871 0.3042
New Zealand dollar 1.6482 0.6067 1.2058 0.8293
Pakistan rupee 143.517 0.0070 104.995 0.0095
Philippines peso 60.970 0.0164 44.605 0.0224
Singapore dollar 1.7309 0.5777 1.2663 0.7897
South Korea won 1456.97 0.0006864 1065.90 0.0009382
Taiwan dollar 41.422 0.02414 30.304 0.03300
Thailand baht 44.538 0.02245 32.583 0.03069

Per In
EUROPE
Per euro Ineuros U.S. dollar U.S.dollars
Euro zone euro 110.7316 1.3669
1-mo. forward 1.0000 1.0000 0.7316 1.3669
3-mos. forward 1.0000 1.0000 0.7316 1.3669
6-mos. forward 0.9999 1.0001 0.7315 1.3670
Czech Rep. koruna-b 27.345 0.0366 20.005 0.0500
Denmark krone 7.4627 0.1340 5.4596 0.1832
Hungary forint 310.51 0.003221 227.16 0.004402
Norway krone 8.2936 0.1206 6.0674 0.1648
Poland zloty 4.1764 0.2394 3.0554 0.3273
Russia ruble-d 49.233 0.02031 36.018 0.02776
Sweden krona 8.9118 0.1122 6.5197 0.1534
Switzerland franc 1.2194 0.8200 0.8921 1.1209
1-mo. forward 1.2192 0.8202 0.8919 1.1212
3-mos. forward 1.2185 0.8207 0.8915 1.1218
6-mos. forward 1.2175 0.8214 0.8907 1.1227
Turkey lira 3.0644 0.3263 2.2419 0.4461
U.K. pound 0.8211 1.2179 0.6007 1.6647
1-mo. forward 0.8213 1.2176 0.6008 1.6643
3-mos. forward 0.8216 1.2171 0.6011 1.6636
6-mos. forward 0.8222 1.2162 0.6015 1.6624
MIDDLE EAST/AFRICA
Bahrain dinar 0.5152 1.9408 0.3769 2.6529
Egypt pound-a 9.5135 0.1051 6.9599 0.1437
Israel shekel 4.8102 0.2079 3.5191 0.2842
Jordan dinar 0.9678 1.0332 0.7081 1.4123
Kuwait dinar 0.3853 2.5953 0.2819 3.5475
Lebanon pound 2055.06 0.0004866 1503.45 0.0006651

Saudi Arabia riyal 5.1265 0.1951 3.7505 0.2666
South Africa rand 14.8304 0.0674 10.8497 0.0922
United Arab dirham 5.0207 0.1992 3.6731 0.2723
a-floating rate b-financial c-governmentrate c-commercial
rate d-Russian Central Bankrate.
Source: ICAP Plc.
THE WALL STREETJOURNAL. Thursday, February27, 2014|7
UPHEAVAL IN UKRAINE
Zuma Press
Fatherland partyhead Arseniy Yatsenyuk wasnominatedtobeprime minister.
Russia TestsIts Troops
sadorfromKiev,suspended a$15
billionbailout package, and threat-
ened to raise natural-g as prices and
impose trade sanctions.Russia’s
PrimeMinister DmitryMedvedev
said Mondaythat the situation
posed athreat to Russian interests
in the former Soviet republic.
Russia’sDefense Minister Sergei
Shoigusaid that the exercise had
been plannedmonths agoand had
nothing to do with the unrest in
Ukraine—in which morethan 80
people were killed in clashes with
policelast week.Another senior de-
fense official told local news agen-
cies that the ministrydidn’t see the
unrest in Ukraine as areason to de-
laythe exercise.

But the timing of the showof
streng th is certain to heighten con-
cerns over the possibility of military
intervention in Russian-speaking re-
gions of Ukraine,particularly Cri-
mea, wherethe Russian Black Sea
Fleet is based.
U.S. SecretaryofState John
Kerrysaid Russia needed to “be
very careful” in itsnextsteps.“We
arenot looking forconfrontation.
Butweare making it clear that ev-
erycountryshould respect the terri-
torial integrity here, the sovereignty
of Ukraine.Russia has said it would
do that and we think it’simportant
that Russia keeps itsword,” he said
on NBC television.
Tense,competing protestsbe-
tween pro-Russian and pro-W estern
residentserupted on Wednesdayin
Simferopol, the regional capital,
wherethe local parliament dis-
cussed Crimea’sfuture.
“What kind of signal does this
Continuedfrom first page send to the most-extreme factions
on the ground? This is likely only to
inflame passions rather than cool
them, ” said Eugene Rumer, direct or
of the Russia program at the Wash-

ington-based Carnegie Endowment
forInternational Peace.
Theannouncement of the mili-
tary exercises sent the ruble to new
lows against the euroand Russian
exchanges tumbling.
Thelast large-scale,military-
readinesstest washeld in Mayand
involved 160,000 soldiers, tanks and
aircraftinSiberia. Russia also
staged atest of 80,000 soldiersin
February2013,aswell as several
smaller drills in the Black Sea and in
central Russia.
Senior Russian officials in recent
days have said that militaryinter-
vention wasn’t on the table; “Such a
scenario is impossible,” Valentina
Matvienko, the head of Russia’sup-
per house,said Wednesday.
But Andrey Klimov, deputy chair-
man of the international affairscom-
mitteeinRussia’sParliament, said
Russiahad aresponsibility to protect
itsmilit aryassetsinUkraine.“The
Russian ar my must be prepared to
use our forces to protect itsown
bases even if thereisjust a1%proba-
bility that something might happen
to our people there,” he said.

Defense ministersfromthe North
Atlantic Treaty Or ganization, meet-
ing in Brussels,offered their support
for“Ukrainian sovereignty and inde-
pendence, territorial integrity,demo-
cratic development and the principle
of inviolability of frontiers.”
At anewsconference, NA TO Sec-
retary -Gener al AndersFogh Rasmus-
sen didn’t explicitly criticizethe mili-
tary drill, nor did he addressthe
prospect of Ukraine joining NA TO—
something Russia opposes.But he re-
iter at ed the allies’ position that Kiev
should be able to makeits ownsecu-
rity arrang ements. “Everynation has
an inherent right to decide foritself
when it comes to alliances and for-
eign and security policies,” he said.
Thenewest militarytestsinvolve
unitsinRussia’sWestern and Cen-
tral militarydistricts.
Russiaisbrokenintofour large
militarydistrictsspanning from the
FarEast to itsEuropean borders.
Thewestern district is based in St.
Petersburgand stret ches from Rus-
sia’swestern arctic to itsborder
with Ukraine and Belarus.The cen-
tral district is basedinYekaterin-

burg and stretches from Siberia to
just west of the Ural Mountains.
Theexercises began Wednesday
and arescheduled to last until Mon-
day. They will be conducted in two
parts, Mr.Shoigusaid. Thefirst will
involvespot checks of combat readi-
ness. Thesecond will involveopera-
tional and tactical exercises with the
6th Army, based in St.Petersburg;
the 20th Army, based in Voronezh,
some 300 kilometersfromthe
Ukrainian border; and the 2nd Army
in Samara, near the Kazakh border.
“The Supreme Commander
[Vladimir Putin] has ordered atest
of the ability of our troops to re-
spond in crisis situations that
threat en the militarysecurity of the
countryincluding terrorist, biologi-
caland man-made threats,” Mr.
Shoigusaid, according to the Inter-
fax news agency.
—Julian E. Barnes
contributed to this article.
Pro-Russia protesters shout slogans Wednesdayduring asmall demonstration in Donetsk in the eastern part of Ukraine.
Associated Press
European Union and the U.S. DeliberateOverMoneyfor Ukraine
The European Union pledged to
move fast to draw up financial as-

sistancefor Ukraine but officials
said privately it could be days—or
even weeks—beforethe bloc an-
nounces an aid package.
EU foreign-policy chief Catherine
Ashton met senior EU colleagues
Wednesdayafternoon to define the
kind of assistanceBrussels could
offer.Onavisit to Kiev earlier this
week, she discussed the issue by
phone with International Monetary
Fund Managing Director Christine
Lagarde, an EU official said.
In Washington, Secretary of State
John Kerry said the U.S. is considering
providing Ukraine $1 billion in loan
guarantees and additional financial
support through anew IMF bailout
package. He also pressed Ukraine’s
newgovernmenttobegin instituting
economic overhauls.
Olivier Bailly, aspokesman forthe
European Commission, said the Euro-
peans were working at full speed to
get “clearer ideas on the differentop-
tions as soon as possible.”
EU enlargementchief StefanFüle
told lawmakers the EU had raised ex-
pectations in Ukraine and mustnow
keep its promises. However, asenior

French official said Western countries
should wait until after Ukraine holds
presidential elections in Maybefore
pledging large-scale assistance.
In Brussels, officials said theycould
work out by next week the maximum
amounts EU institutions could give.
But people familiar with the planning
said no package is imminent.
First, the EU wantstosee what
economic overhauls and anticorruption
measures the newUkrainian govern-
mentcommits to.Second, the bloc
wantsits contribution to come as part
of abroader,internationally agreed
package.
"Weare notshying away from tak-
ing alead role," said one of the offi-
cials, but Europe on its owndoes "not
have the means to do whatisneces-
sary," the person said.
Officials have already spelled out
some of the resourcesthe EU could
give. The EU's executivecurrently has
€610 million ($834 million) set aside
to help Ukraine deal with financial
challenges—an amountthatcould rise
to €1 billion this year if the newgov-
ernmentadopts credible economic poli-
cies. This type of assistanceisusually

tied to an IMF deal, something that
could takeweeksormonths to negoti-
ate. However, asenior EU official said
if the Washington-based lender agreed
to afast-track bridge loan with Kiev,it
could unlock the EU money.
—Laurence Norman
and Stacy Meichtry
Civic Activists Nominated
Fo rGovernment ‘ofUnity’
KIEV,Ukraine—Protest leaders
tapped civic activistsfor a“govern-
ment of national unity,” moving to
staveoff criticism that veteranpoli-
ticians were maneuvering to retake
powerfollowing last week’souster
of Russia-backed PresidentViktor
Yanukovych.
Candidates forUkraine’snew
government—including the owner of
an auto-repair shop and ajournal-
ist—on which Parliament will vote
Thursday, were presented to amix
of cheersand boos among thou-
sands of people at a“national as-
sembly” on Kiev’s main square, the
center of three months of protests
that sawatleast 80 killed.
Arseniy Yatsenyuk, a40-year-old
former economyminister and leader

of the Fatherland party,was pro-
posed as prime minister.
His government, if confirmed,
will faceseverechallenges,under-
lined Wednesdaywhen the national
currency, the hryvnia, fell to multi-
year lows of morethan 10 to the
dollar.Ukraine’sforeign-currency
reserves have dropped to $15 billion,
and the interim government has said
it would put together aprogram of
overhauls to securealoan program
from the International Monetary
Fund as quickly as possible.
Russia, whichbacked Mr.Yanuk -
ovychwith a$15 billion bailout offer
in December,has indicated it is un-
likely to hand over anymorecash.
“Weneed to renewtrust in the
government. Thegovernment needs
to return the trust of creditorsand
investors, ” ParliamentarySpeaker
and Acting President Oleksandr
Turchynov told the crowd.
Thenew government will also
have to facedownanger in pro-Rus-
sian regions of the country, includ-
ing the southern Crimean peninsula,
wherehundreds of supportersof
greater autonomyand closer ties

with Russiaclashed with Crimean
Tatars,who strongly support an in-
dependent Ukraine.
Thenew government maynot
last long.Not only does it facehuge
challenges,but it also will likely be
reformattedafter presidential elec-
tions in May. Thepresident and Par-
liament shareresponsibility for
naming ministers.
“Whoever joins the cabinet, it
will be akamikazegovernment.
They have to deal with such amess,
and take unpopular steps,” said Va-
syl Yariv, abusinesscoach who was
on the square.
Manypostsinthe proposed gov-
ernment went to activistsand civic
leaderswho have led protestssince
latelast year.
Demonstrations began afterthe
government shelved apartnership
deal with the European Union in fa-
vorofcloser ties with Russia, but
swiftly grew intoabroader outcry
against corruption and police
abuses.
In anod to those demands,
muckraking journalist Tetyana Chor-
novol, who has investigated toppol-

iticians,was proposed as head of an
anticorruption bureau, with unclear
powers.
Dmytro Bulatov, the leader of a
group of carownerswho led prot est
convoys,was put forwardasminis-
terfor youth and sport.
Mr.Bulatov appeared on stage
Wednesdaymissing part of his ear,
which he says wassevered when he
wastortured afterbeing kidnapped
in Januarybyagroup of unknown
men.
Olha Bohomolets, adoctor who
helped coordinatethe medical cen-
ter, could become deputy prime
minister forhumanitarian affairs.
“I want to promise youthat if in
this government Isee corrupt
schemes,I’ll come ontothe Maidan
andcoordinatethe medical center
again,” shesaid, referring to the
protest square.
—Alexander Kolyandr
and Lukas I. Alpert
contributed to this article.
BY JAMES MARSON
26 |Thursday, February27, 2014 THE WA LL STREETJOURNAL.
EUR Government Bond
Funds that invest primarily in government or government-backed agency securities

denominated or hedgedinto the relevantcurrency. Ranked on%totalreturn (dividends
reinvested) in Euros for oneyear ending February 26, 2014
Leading 10 Performers
FUND FUND LEGAL %Return in $US**
RATING *
NAME FUND MGM'TCO. CURR. BASE YTD 1-YR 2-YR 5-YR
1 DELOS Income NBG Asset EURGRC 11.61 46.15 71.88 10.68
-Domestic BondFd A
Management M.F.M.C.
1 ALPHA Greek Alpha Asset EURGRC 12.77 45.97 48.91 0.23
Bonds Management A.E.D.A.K.
1 Geniki Alpha Trust Mutual EURGRC 12.91 43.47 82.49 6.72
Domestic BondFund
Fund ManagementS.A.
1 Eurobank EFG EurobankFund EURLUX 11.46 42.01 81.74 NS
(LF) GreekGov BdFd
Mgmnt Company(Lux) S.A.
5 Kathrein Raiffeisen EURAUT 1.73 30.40 24.73 NS
Euro CoreGovernmentBondIT
Kapitalanlage-G.m.b.H.
1 RSouverain Rothschild Cie EURFRA 6.41 17.32 24.14 NS
Eurorecovery C Gestion
3 FonFineco G.I.I.C. Fineco EURESP 3.59 16.92 10.93 NS
InterésIFI
NS Lyxor ETF Lyxor EURFRA 5.84 15.68 NS NS
Bono 10YMTS SpainGov BdCEUR
International AssetManagement
NS iShares iShares EURIRL 3.88 12.44 NS NS
Spain Government Bond
4 Amundi ETF Amundi EURFRA 3.36 10.19 9.79 NS

GvtBd LREuroMTS InvGrd
NOTE:Changes in currency rates will affectperformanceandrankings. Source:Morningstar, Ltd
KEY:**2YR and 5YR performance is annualized 1Oliver’s Yard, 55-71 City Road
NA-not available due to incompletedata; London EC1Y 1HQ United Kingdom
NS-fund not in existence forentireperiod www.morningstar.co.uk;Email:
Phone:+44 (0)203 107 0038; Fax:+44 (0)203 1070001
MARKETS
Fund Scorecard
Ukraine Ills Trump
Solid German Data
Political instability in Eastern
Europe outweighed astrong report
on German consumer confidence
Wednesday, sending European stock
marketslower.
TheStoxxEurope 600 index
slipped 0.2% to 337.70, afterclosing
the previous session at itshighest
level sinceJanuary2008.The U.K.’s
FTSE 100 lost 0.5% to
6799.15 and France’s
CAC40fell 0.4%to
4396.91. Germany’sDAX
slipped 0.4%, to 9661.73,despitea
rise to 8.5pointsinthe forward-
looking GfK consumer-climateindi-
catorfor March. Theresult marked
aseven-yearhigh.
“Investorsmay be reluctant to
chase shareprices higher in the

short-term with indexesapproach-
ing technically overbought territory.
European equities have rallied by
morethan 6% in the past three
weeks,regaining all the ground lost
in January,” said Ian Williams, strat-
egist at Peel Hunt in London.
In the U.S.,stocks ended the day
in the black but the S&P 500 re-
treated from record levels fora
third-straight session.
TheDow Jones Industrial Aver-
agerose 18.75points, or 0.1%, to
16198.41, while the S&P 500 was
barely higher at 1845.16.Atits ses-
sion peak Wednesday, the indexrose
to 1852. 73 ,aboveits all-time closing
high of 1848.38but short of itsall-
time intradayhigh of 1858.71.
TheNasdaq CompositeIndex
rose 4.48 points, or 0.1%, to
4292.06.
Areport on the U.S. housing
market,showing that new-home
sales climbed 9.6% in January, and
better-than-feared reportsfrom
some retailershelped support
stocks early in the session, but trad-
ing wasn’t broadly bullish, traders
and investorssaid.

Volume was“kind of light,” said
Joseph Greco, managing director of
trading with Meridian Equity Part-
ners. And while the housing report
wasencouraging,“it’smuch morea
tactical trading and stock-picking
market.”
Thepolitical tensions in Ukraine
continued to rattle European mar-
kets.The Ukrainian hryvnia plunged
against the dollar,while the coun-
try’sdollar bonds weakened after
effortstoform anew government
were delayeduntil Thursday.
Thehryvnia wasquoted at
around 10.40tothe dollar latein
Europe,aroughly 2% decline on the
dayand almost 10% this week.Typi-
cally the central bank sells dollars
whenever the dollar-hryvnia rate
strays much above8.The develop-
mentsinUkraine weighed on senti-
ment in neighboring Russia, where
the ruble again hit an all-time low
against the euro-dollar basket.
Thedollar strengthened against
major rivals on the back of the
housing report. Late Wednesdayin
NewYork,the eurowas fetching
$1.3683,downfrom$1.3745 late

Tuesday, while the dollar wastrad-
ingat¥102.42 from ¥102.24.
TheBritish pound weakened to
$1.6664 from $1.6681 as the U.K.’s
grossdomestic product increased
0.7% in the last three months of
2013 from the previous quarter,
matching the preliminaryestimate,
according to datafromthe Office
forNational Statistics.
U.S. Treasuryprices were
boosted by a$35 billion sale of five-
year notes that drew the highest de-
mand in morethan ayear.The
benchmark 10-year noterose 8/32 in
pricetoyield 2.675.%
In commodity markets, gold fell
$14.80,or1.1% to $1,328.20 atroy
ounceonthe Comexdivision of the
NewYork Mercantile Exchange,
snapping athree-daywinning
streak.Crude oil climbed 76 cents,
or 0. 7%, to $102.59 abarrel on
Nymex.
Gold prices have been marching
higher sincethe start of the year,as
investorsfocused firstonworries
about slowereconomic growth in
the U.S. and then on signs of trouble
in emerging markets. Gold is consid-

ered by some as ahaven in times of
financial-market stress.
BY CHIARA ALBANESE
MARKET
REPORT
JapanLooksatBitcoin
TOKYO—Japan’schief govern-
ment spokesmanand amember of
the central bank’ spolicyboardsaid
authorities were looking intothe
regulation of bitcoin, aday afterTo-
kyo-based bitcoin exchangeMt. Gox
shut itswebsiteand halted trading.
Compared with regulatorsin
manyother advanced economies,
Japanese regulatorshavebeen rela-
tively silent on bitcoin. But Wednes-
day, afterMt. Gox’sabrupt closure
underscoredthe risks of avirtual
currency, several of them started
speaking.Wednesdaymorning,Ja-
pan’stop go vernment spokesman,
Chief Cabinet SecretaryYoshihide
Suga,said the government waslook-
ing intothe matter, collecting infor-
mation through the Financial Serv-
ices Agency, the MinistryofFinance
and the police. “The government
will take measures if necessaryonce
we have an assessment of the situa-

tion,” he said.
LaterWednesday, BankofJapan
policyboardmember Koji Ishida
also addressed the matter, saying,“I
think the Japanese government will
makeaproper assessment” on the
regulation of bitcoin.
Mt. Goxstopped all transactions
on Tuesday, and itswebsitewent
blank.The sitelater came back,car-
rying only amessagethat said the
halt in operations wasonly “forthe
time being in order to protect the
site and our users. ”
On Wednesday, Mt. Gox’schief
executiveoff icer said in afresh
messageonthe sitethat he remains
in Japan and is working hardtofind
asolution to Mt. Gox’srecent trou-
bles.Healso asked clientswhose
funds have been stuck to refrain
from getting in touch.
“I would liketokindly ask that
people refr ain from asking questions
to our staff: they have been in-
structed not to giveany response or
information. Please visit this page
forfurther announcementsand up-
dates,” Mark Karpèles said in the
statement.

Attemptstoreach Mt. Goxrepre-
sentatives in Tokyowereunsuccess-
fulWednesday.
Earlier in the we ek,anFSA
spokesman told TheWall Street
Journal that bitcoin exchanges
“aren’t subject to our regulatory
oversight.” In similar commentsre-
cently,the Bank of Japan said it
“isn’t in aposition” to regulatebit-
coin exchanges,while the Ministry
of Financesaid such supervision
isn’t itsjob.
Contact ed again Wednesday, offi-
cials at the FSA, FinanceMinistry
andthe Bank of Japan all said they
hadn’t changed their stanceonthe
issue.ATokyo Metropolitan Police
spokeswoman said she didn’t have
enough information to comment.
Some investorswith bitcoins tied
up at Mt. Goxhad sought guidance
from authoritiesabout protection
forcustomersofthe ex changebut
saythey have received no clear an-
swers.
—Toko Sekiguchi and Tatsuo Ito
in Tokyo, Christopher M.
Matthews in Los Angeles and
Neelabh Chaturvedi in London

contributed to this article.
BY TAKASHI MOCHIZUKI
Meet Mt.Gox’s Geek-in-Chief
cuses morebroadly on geeks.He
said he sometimes didn’t movefrom
his room fordays.
“In real life, if Iwant to talk to
someone on the subway,I’m just a
nobody.But when Iamonthe Inter-
net, IamMagical Tux,” he said in
thefilm. Even now, people in the
bitcoin community refertohim by
that name.
On ablog last updated in 2012,
which appeared to have been taken
down by early ThursdayinTokyo,a
person identified as Magical Tux in-
dicated an interest in quantum
physics and writingsonthe exis-
tenceofalternativeworlds.He
wroteinone posting from March
2010 that he had been up till 5a.m.
reading about theories that “are giv-
ing an extrarole to conscious be-
ings, even making them immortal.”
ButMr. Karpelès also showeda
domestic side online,posting cat
photos and bragging about his skills
at baking applepie.In2006,heup-
loaded ahow-tovideo on YouTube,

outlining amore-than-seven-hour
processfor pie baking.
In the documentary, in part pro-
duced by French broadcaster Canal
Plus,hespoketothe cameraina
messy room, surrounded by comic
books and computers. Ablack T-
shirt he wore said, “There’snoplace
like127.0.0.1.”,referring to the num-
ber used to redirect acomputer
connected to the Internet to itself,
or home,inother words.
An anime fan, he went to Japan
foramonthlong visit in 2007.Back
in France, he triumphantly an-
nounced on his blog that he had
wowedone Japanese girl with his
iPhone,aproduct that wasn’t then
on sale in Japan.
By 2009,hesaid he wasplanning
amovetoTokyo and posted ablog
entryinJapanese.“Idocomputer-
related work (a programmer); my
goal is world domination,” it said.
Soon afterhearrived in Japan,
Mr.Karpelès gotinterested in bit-
coin. “One of my customersre-
questedbitcoin as payment in
2009, ” he said in an email interview
with TheWall Street Journal on

Feb. 17.
Less than half ayear afterhis ar-
rival, he founded Tibanne Co.The
name of the company, which would
Continued from first page
come to operateone of the world’s
pre-eminentbitcoin platforms,was
close to that of Mr.Karpelès’s
white-and-orangecat, Tibane.
Mr.Karpelès’sTwitterfeed indi-
catesthat in the early days,Mt. Gox
waslikeany other small tech
startup.The team went out for
burgers together,and McDonald’s
deliveries were common.
People close to the company
called the atmosphereofthe Mt.
Goxoffices “free-spirited” and said
the company’sgrowthwas asur-
prise.
As bitcoin caught on, Mt. Goxex-
panded. At one point, it handled
80%ofbitcoin trades.Atthe Mt.
Goxoffices in Tokyo’sShibuya
neighborhood, sometimes called
“Bit Valley,” astaff of around 30
handled the requestsand questions
of customers, which last year
reached one million in number.
With the growth came newhead-

aches.The firstwhiffs of trouble
came in Maylast year.U.S.regula-
tors said the exchangewasn’t prop-
erly registered in the U.S. In June,
Mt. Goxregistered thereasa
money-services business.
People close to Mt. Goxsay that
throughout the recent turmoil, Mr.
Karpelès wasstressed but tried to
protect employees.Hehasn’t re-
sponded to repeated requestsby
TheWall Street Journal forcom-
ment sincethe Feb. 17 email inter-
view.
On Feb. 7, Mt. Goxhalted with-
drawals ,blaming atechnical glitch.
Twoweeks later,the exchangehad
become synonymous with the risks
associated with avirtual currency.
Some investorshaverecounted
losses of hundreds of thousands of
dollars.
Executives in the wider bitcoin
community took pains to separate
Mt.Gox’s issues from the industry
as awhole.
In aYouTube video posted
Wednesday, Roger Ver, aTokyo-
based bitcoin entrepreneur,said the
issue wascaused in part by “poor

programming skills” on the part of
Mt. Gox.” Aflawinthe software
used by all bitcoin exchanges poten-
tially made possible fraudulent
withdrawals.Other exchanges ap-
pear nottohavebeen harmed by
this,but Mt. Goxhas had to halt op-
erations.
Mr.Ver,who helps connect play-
ersinthe bitcoin community and
hasknown people at Mt. Goxfor
several years, spokebluntly,saying
thebitcoin turmoil “was caused by
asingle mismanaged company, not
by anyproblem with bitcoin itself.”
Theentrepreneur, who handles
business development forBlock-
chain.info,aprovider of so-called
bitcoin “wallets, ” confirmed his re-
marks in the YouTube video to The
Wall Street Journal.
As forMagical Tux,his last Twit-
terpost wasonJan. 12. It wasare-
sponse to acustomer complaint
aboutweb-hosting services pro-
vided by Tibanne,the companythat
operates Mt. Gox.
Mark Karpelès in TokyolastApril. His bitcoin exchange, Mt. Gox, has struggled.
BloombergNews
8 |Thursday, February27, 2014 THE WALL STREETJOURNAL.

U.S. NEWS
SurveillanceRev amp Weighed
WASHINGTON—Administration
lawyershavepresented the White
House with four options forrestruc-
turing the National Security
Agency’sphone-surveillancepro-
gram, from ditching the controver-
sial collection altog ether to running
it through the telephone companies,
according to officials familiar with
the discussions.
President Barack Obama in Janu-
aryasked U.S. intelligenceagencies
and the attorney general to report by
March 28 on alternatives forrevamp-
ing the program in away that would
take it out of the NSA’shands.
TheOfficeofDirector of National
Intellig enc eand the JusticeDepart-
ment have pr ovided the options
ahead of schedule,these people said.
None of the three options forre-
locating the datahavegained uni-
versal favor. But failuretoagree on
one of them would leave only the
option of abolishing the program,
which would be asetback forintelli-
genceagencies and other backersof
the surveillanceeffort. Of the three

options forrelocating the data, two
of them—with phone companies or
another government agency—ap-
pear most technically possible.
Under the current program, the
NSAcollectsmillions of U.S. phone
recordsfromthree phone compa-
nies,which former officials have
identified as AT&T Inc., Verizon
Communications Inc.and Sprint
Corp.
Sincethe start of revelations
about NSAsurveillancelast year by
former NSAcontr actor Edward
Snowden, the phone-records pro-
gram has sparked the most contro-
versy. Some lawmakersand govern-
ment officials have defended it as
critical to fighting terrorism, while
othersargue it amountstoamassive
violation of constitutional rights.
Obama administration officials
have sought to preservethe collec-
tion of phone recordsinaway that
raises fewerconcerns about privacy.
One way of doing that would
have the phone companies retain
the data, officials said. TheNSA
would then tell the companies when
it needs searches of call records

concerning specific phone numbers
the agencybelieves areconnected to
terrorism. Thecompanies would
provide the resultstothe NSA.
Under this model, the NSAwould
only collect the datathat comes in
response to the search, rather than
millions of unrelated American
phone records.
Several lawmakershavepro-
posed legislation on Capitol Hill that
would take this approach. But tele-
communications companies oppose
this option.Phone companies likely
would demand liability protection
andpossibly other conditions to
avoid outside demands fordata—for
instance, forrun-of-the-mill legal
cases such as divorce proceedings.
Already,some criminal defen-
dantshavesought access to the NSA
records, claiming the datacould
help showtheir innocence.
Thephone-companyoption is
also opposed by the chairman of the
House intelligencecommittee, Rep.
MikeRogers(R.,Mich.), who told
TheWall Street Journal this week
that the proposal doesn’t have
enough supportfor committeeap-

proval and aHouse floor vote.
Phone companies ha ve not yet
been consulted on options,atelecom-
munications-industryofficial said.
Asecond option present ed to the
WhiteHouse would have agovern-
ment agencyother than the NSA
hold the data, according to aU.S.of-
ficial. Candidates forthis option
could include the Federal Bureau of
Investigation, which some current
andformer intelligenceofficials
have recommended.
Another possibility floated in
policycircles wasturning the pro-
gram over to the custody of the For-
eign IntelligenceSurveillanceCourt,
which oversees the phone-dataand
other NSAsurveillanceprograms,
butjudges have balked at an ex-
panded role forthe court.
Athirdoption would be foranen-
tity outside the phone companies or
the government to hold the data, offi-
cials said. Th is approach has been
criticized by privacygroups who say
such athirdparty would just become
an extension of the NSAand would
provide no additional privacybenefit.
Afinal alternativewould be to

scrap the phone-dataprogram and
instead bolster investigativeefforts
under current authorities to obtain
the information about possible ter-
rorist connections some other way,
an official said. Mr.Obama acknowl-
edged this approach in his January
speech, but said “morework needs
to be done to determine exactly how
this system might work.”
Caitlin Hayden, aspokeswoman
forthe WhiteHouse National Secu-
rity Council, declined to speak about
specific proposals.
She said that sincethe president’s
Jan. 17 speech unveiling surveillance-
overhaul measures,the JusticeDe-
partment and intelligenceagencies
have worked on developing options.
“They have kept us abreast of
their progress, and we look forward
to reviewing those options,” she
said. “Beyond that, I’m not in apo-
sition to discussthe details of an
ongoing process. ”
Mr.Obama will consult with
Congressand will seek legislation,
as needed, she added.
Twoofthe options echo recom-
mendationsofthe president’sre-

viewpanel, which issued areport in
December that proposed the NSA
phoneprogram be overhauled so
the databeheld by either the phone
companies or athirdparty.
In his Januaryspeech, Mr.Obama
said both of those approaches “pose
difficult problems. ” Retaining the
dataatthe phone companies,he
said, “could requirecompanies to al-
tertheir procedures in waysthat
raise newprivacyconcerns. ”
Establishing athirdparty to hold
the data, he said, could be even
moredifficult. “Any thirdparty
maintaining asingle consolidated
database would be carrying out
what’sessentially agovernment
function, but with moreexpense,
more legal ambiguity,potentially
lessaccountability,all of which
would have adoubtfulimpact on in-
creasing public confidencethat their
privacyisbeing protected,” he said.
Separately on Tuesday, the Jus-
ticeDepartment notified aconvicted
terror suspect that NSAbulk-data
surveillance had been used against
himbeforehepleaded guilty to a
charge of attempted material sup-

port forterrorism.
Thedefendant, an Albanian im-
migrant named AgronHasbajrami,
pleaded gu ilty in federal court in
Brooklyn in 2012,after he wasac-
cused of sending morethan $1,000
to someone in Pakistan to finance
terrorism.
Sincethe revelations about NSA
spying,the government has notified
two criminal defendantsthat they
intended to offer evidencederived
from NSAinterception of electronic
communications.The Hasbajrami
notification marks the firsttime
such anoticehas been given to a
defendant who has already pleaded
guilty,officials said.
Theletternotifying Mr.Hasba-
jrami noted that he wasstill seeking
to have his conviction vacated. Mr.
Hasbajrami’sattorney,Steve Zissou,
said he would seek moreinforma-
tion about the surveillanceofhis
client.
Patrick Toomey,alawyer at the
American Civil Liberties Union, said
the newfiling shows “warrantless
surveillance has playedarole in
more criminal cases than the gov-

ernment has ever beforeadmitted,
andthe government has been im-
properly withholding that fact from
defendantsfor years.”
BY SIOBHAN GORMAN
AND DEVLIN BARRETT
President
Proposing
Upgradesto
Roads, Rails
President Barack Obama on
Wednesdaywas expected to propose
spending $302 billion to repair the
U.S.’s roads and transit systems,one
of the few areas whereboth Demo-
cratsand Republicans agree the
government needs to spend more
money.
Though revamping America’sin-
frastructur ehas garnered bipartisan
support, Congressfor yearshas
grappled with howtopay forit. On
Wednesday, House Ways and Means
CommitteeChairman Dave Camp
(R., Mich.) released aplan to over-
haul the taxcode that included
$126.5 billion in spending forhigh-
waysand other infrastructure.
Mr.Obama wantstopay forhis
four-year plan by,among other

things, closing taxloopholes and
changing howbusinesses aretaxed,
the WhiteHouse said. It is unclear,
however, ex actly which loopholes
Mr.Obama wantstoclose and
whether they would gain lawmakers’
support.
House Speaker John Boehner (R.,
Ohio) said he and Mr.Obama dis-
cussed the country’sinfrastructure
problems when they metTuesday,
their firstone-on-one meeting in
over ayear,but didn’t come to an
agreement.
“We’ve gottofind the funding
mechanismtofund our infrastruc-
tureneeds and so the hunt has been
under way forthe last year and a
half to find that funding source.I
wish Icould report to youthat
we’vefound it, but we haven’t, ” Mr.
Boehner said at anewsconference
Wednesday.
One idea that has been floated is
paying forthe upgrades by raising
fuel taxes. TheU.S.’ s18.4-cent-a-g al-
lon gastax and 24.4-cent-a-gallon
diesel-fuel taxhaven’t been raised in
20 years. They areamajor source of
funding forhighway repairs.

Highway upgrades sometimes
arepaid forbytransferring money
from the TreasuryDepartment’s
general fund. Mr.Boehner said he
doesn’t think Republicans could
support that.
Another proposal that has been
discussed, which is supported by
Sen. Rand Paul (R., Ky.), would pay
forinfrastructureupgrades by mak-
ing changes to the taxcode to en-
courageU.S.companies operating
internationallytobring money kept
overseas back home.
Thepresident also is expected to
announcethe start of a$600 million
competition forgrantsaimed at
roads,portsand transit systems.
Mr.Obama’splans areaimed at
putting Americans back to work.He
will tell Congressthat if it doesn’t
find money to support the Highway
Trust Fund, 700,000 jobs will be put
at risk.The Highway Trust Fund is
supported by the gastax and other
revenue and could have difficulty
meetingall of itsobligation in the
second half of this fiscal ye ar,the
nonpartisanCongressional Budget
Officesaid Wednesday.

Infrastructur eprojectshavelong
been on Mr.Obama’slist of priori-
ties.Recently,VicePresident JoeBi-
den traveled to portsinIllinois,
Texas and the Panama Canal to
highlight their importance.
—Kristina Peterson
contributed to this article.
BY JARED A. FAVOLE
European PressphotoAgency
One recommendation forphone surveillanceatthe National SecurityAgency,whose Maryland headquarters areshown above,would be to end the program.
None of the three options
for relocating datahave
gaineduniversalfavor.
THE WALL STREETJOURNAL. Thursday, February27, 2014|25
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Citi Alumni AreaForce in Wa shington
WASHINGTON— While manyother
banks have faded from viewinWash-
ington’ spowercircles, Citigr oup Inc.
is becoming moreprominent.
Several alumni of the bank,which
wasbailed out by U.S. taxpayers dur-
ing the financial crisis,hold topjobs
in government and at the Federal Re-
serve—a sign that Citigroup’ sreputa-
tion is on the mend afterthe lows
touched during the 2008 turmoil. But
some lawmaker sand advocacy
groups areraising concerns that

Citi’snewfound favorwith govern-
ment gives it inordinatesway within
the Obama administration. The
WhiteHouse declined to comment.
At least five former Citigroup of-
ficials nowhold topjobs in Wash-
ington, including TreasurySecret ary
JacobLew,U.S.Trade Representa-
tiveMichael Froman and the Trea-
sury’sNathan Sheets,who is await-
ing confirmation as undersecretary
forinternational affairs.
Stanley Fi scher, who wa sprevi-
ously avic echairman at Citigroup,
wasnominated in Februarytobethe
Feder al Reserve’ snextvicechairman,
while Marisa Lago is nowTreasury’s
assistant secretaryfor international
marketsand development.
Some,likePeter Orszag, former
director of the OfficeofManage-
ment andBudget, have gone from
government poststoCitigroup.
Theascension of Citigroup offi-
cials to topgovernment jobs marks
asignificant turnabout forthe bank,
which sawits reputation tarnished
in the wake of a$45 billion govern-
ment rescue during the financial cri-
sis in 2008.The bank has spent the

yearssincethe crisis trying to re-
build itsimagebyinstalling anew
chief executive, fully repaying its
government funds and hiring dozens
of Washingtonlobbyists.
Forsome,Citigroup is replacing
Goldman Sachs Group Inc.asWall
Street’sfarm team forWashington’s
big leagues.
“Goldman’s tried to keep alow
profile.They’vebeen vilif ied forso
long,sothey’renot agood choice.
J.P. Morganisn’t agood pool either,
they’vebeen tarnished. Citi is dif-
ferent,” said Stavros Gadinis, assis-
tant professor of lawwho focuses
on financial re gulation at the Uni-
versity of California at Berkeley.
Therec ent round of appointees
were originally recruited to Citigroup
from topgovernment and economic
posts, part of apush by former exec-
utives,including ex-Chairman Robert
Rubin,himself aformer Treasury
secret ary, and former Chief Executive
Vikram Pandit to hiregovernment of-
ficials who could raise the bank’sin-
ternational profile,said people in-
volved in theeffort.
Citigroup sought out economic,

regulat oryand businessleaderswho
could work easily with overseas
CEOs,the people said.
“A lot of the people that noware
serving or used to serveinsenior po-
sitions were part of averyconscious
effort, ” said one of the people.“The
objectiveand the hope wasthat peo-
ple likethis reinforcedthe institu-
tion’s reputation as the strongest in
the world in thought leadership. ”
However, another person said it
was“absurd” to suggest that the
bank knew that those high-profile
hireswould later go back intogov-
ernment and help boost Citigroup’s
image.
But the bank did offer paypack-
ages to some officials that rewarded
areturn to high-profile government
jobs,insome cases giving big pay-
outsupon leaving.
Mr.Froman gota$2million
payment from Citigroup in recogni-
tion of his serviceand forwaiving
rightstoinvestment fund holdings
when he leftthe bank to join the
Obama administration last year.
Mr.Froman told the Senatehe
would donatethose funds to charity.

Mr.Froman no longer holds Citi
stock or interestsinany Citigroup
funds,accor ding to the Officeofthe
U.S. Trade Representative.
“Ifacompanyoffersfinancial in-
centives to go intogovernment ser-
vice,does that compromise the real
or perceived independenceofthe in-
dividuals while in public service?”
Sen. Charles Grassley (R., Iowa)said
in an emailed statement. “It doesn’t
appear that the Obama Administra-
tion adequately considerswhether
hiring so manypeople from the
same firm, including those who have
received financial incentives to join
the Ad ministration, keeps enough
distancebetween the government
and the privatesector that has an
inter est in government regulations.”
Theaddition of Obama adminis-
tration officials with Citigroup on
theirrésumé is troublesome be-
cause it cangiveapublic perception
of undue influence, said Michael
Smallberg, an investigator with the
Project on Government Oversight.
Aspokeswoman said Citigroup is
“proud that manyofits current and
former people have been dedicated

public servantstotheir home coun-
tries.”
Thereislittle evidencethe con-
nections have helped so far,inpart
because Wall Street remains under
stiff scrutinyand toughened rules in
the wake of the 2010 Dodd-Frank
law. Citigroup,along with all big
banks, is subject to higher capital
requirementsand the Volcker rule
ban on proprietarytrading.
Citigroup has made it easier for
those heading to the public sector to
continue compensation arrangements
that canbeworth millions of dollars.
As part of along-standing policy, em-
ployees who voluntarily leave fora
full-time paid career in government,
charity or education post arestill on
schedule to receiveafull award of
theirdeferred stock and deferred
cash annual inc entiveawards, ac-
cording to a2013 Citigroup quarterly
report filed with the Securities and
Exchange Commission. Those who
leavefor other jobs forfeit the por-
tions that aren’t yetready to be
cashed in.
Andthe bank says it accelerat es
the vesting of outstanding compen-

sation in cases wheretheremay be
conflictsofinterest.
BY STEPHANIE ARMOUR
AND SHAYNDI RAICE
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Pictet-Japan Index-PJPY JP EQ LUX 02/26 JPY 12634.66 -6.2 28.6 23.5
Pictet-Japanese EqOpp-P JPY
JP EQ LUX 02/26 JPY 6978.00 -6.9 27.9 25.1
Pictet-Japanese EqSel-P JPY
JP EQ LUX 02/26 JPY 10628.71 -7.9 25.7 21.8
Pictet-Latam Index-PUSD GL EQ LUX 02/25 USD 71.88 -8.5 -21.4 -15.4
Pictet-Latin AmLoc Curr Dbt-PUSD
OT OT LUX 02/25 USD 136.63 1.3 -15.0 -5.3
Pictet-Pac (ExJpn)Idx-P USD
AS EQ LUX 02/26 USD 363.03 1.1 0.6 7.8
Pictet-Piclife-P CHF OT OT LUX 02/25 CHF 906.54 0.8 5.3 6.9
Pictet-Premium Brands-PEUR
OT EQ LUX 02/25 EUR 124.98 -1.8 14.5 12.8
Pictet-Quality GlEq-P USD GL EQ LUX 02/25 USD 124.07 0.2 16.0 NS
Pictet-Russia Index-PUSD EE EQ LUX 02/25 USD 74.47 -9.8 -11.9 -10.0
Pictet-Russian Equities-PUSD
EE EQ LUX 02/25 USD 60.75 -10.9 -9.8 -8.6
Pictet-Security-P USD GL EQ LUX 02/25 USD 168.26 2.0 22.0 14.5
Pictet-Short-T MoneyMkt CHF-P
CH MM LUX 02/25 CHF 124.24 0.0 0.0 0.0
Pictet-Short-T MoneyMkt EUR-P
OT OT LUX 02/25 EUR 137.73 0.0 0.0 0.0
Pictet-Short-T MoneyMkt JPY-P

OT OT LUX 02/25 JPY 10127.72 0.0 0.0 0.0
Pictet-Short-T MoneyMkt USD-P
OT OT LUX 02/25 USD 132.31 0.0 0.2 0.2
Pictet-Small CapEurope-P EUR
EU EQ LUX 02/25 EUR 865.61 5.4 30.8 23.9
Pictet-Sov. STMoney Mkt-P EUR
OT OT LUX 02/25 EUR 102.68 0.0 -0.1 -0.1
Pictet-Sov. STMoney Mkt-P USD
OT OT LUX 02/25 USD 102.02 0.0 0.1 0.1
Pictet-Timber-P USD GL EQ LUX 02/25 USD 150.76 0.1 8.7 14.8
Pictet-US EqGrwth Sel-P USD
US EQ LUX 02/25 USD 174.10 2.7 35.3 18.7
Pictet-US EqValue Sel-P USD
US EQ LUX 02/25 USD 185.84 -0.5 22.7 15.2
Pictet-US HighYield-P USD US BD LUX 02/25 USD 145.68 1.9 6.2 8.3
Pictet-USA Index-PUSD US EQ LUX 02/25 USD 157.53 0.0 25.7 17.7
Pictet-USD GovernmentBonds-P
US BD LUX 02/25 USD 581.09 1.7 -1.7 0.2
Pictet-USD ShortMid-Term Bds-P
US BD LUX 02/25 USD 125.84 0.2 0.2 0.3
Pictet-Water-P EUR OT OT LUX 02/25 EUR 198.96 1.6 12.3 11.8
Pictet-World GvtBonds-P EUR
OT OT LUX 02/25 EUR 132.59 2.8 -3.5 -1.8
PTR-Banyan-P USD OT OT LUX 02/20 USD 95.94 -6.5 -9.2 -4.5
PTR-Corto Europe-PEUR OT OT LUX 02/25 EUR 131.26 4.6 16.1 16.0
PTR-Kosmos-P EUR OT OT LUX 02/25 EUR 107.01 0.5 1.2 1.6
PTR-Mandarin-P USD OT OT LUX 02/26 USD 103.29 -2.7 7.1 3.7
n POLAR CAPITAL PARTNERS LIMITED
International Fund Managers (Ireland) Limited PH -353 1670 660 Fax -353 1670 1185
Global Technology OT EQ IRL 02/25 USD 23.73 3.9 32.8 15.1

Japan FundUSD JP EQ IRL 02/26 USD 21.18 -6.2 11.6 5.9
Polar HealthcareClass IUSD
OT EQ IRL 02/25 USD 33.77 19.1 72.3 46.6
Polar HealthcareClass RUSD
OT EQ IRL 02/25 USD 33.12 19.0 71.7 46.0
n Hemisphere Management (Ireland) Limited
Discovery USDAGLOTCYM 12/31 USD 101.35 NS NS NS
Elbrus USDAOTOTCYM 01/31 USD 10.10 NS NS NS
Europn ConvictionUSD BEUEQCYM 01/31 USD 161.54 0.3 1.1 5.3
Europn ForagerUSD BEUEQCYM 01/31 USD 324.09 2.6 11.7 11.9
Latin AmericaUSD AGLEQCYM 06/30 USD NS.00 NS NS NS
n HERMITAGE CAPITAL MANAGEMENT LTD.
Tel: +7501 258 3160 www.hermitagefund.com
The HermitageFund GL EQ JEY 03/12 USD 963.12 4.5 105.6 -23.2
n HORSEMAN CAPITAL MANAGEMENT LTD.
T: +44(0)20 7838 7580, F: +44(0) 20 7838 7590, www.horsemancapital.com
Horseman EurSelLtdEUR EU EQ GBR 01/31 EUR 349.13 4.3 31.3 29.1
Horseman EurSelLtdUSD EU EQ
GBR
01/31 USD 349.13 NS NS NS
Horseman GlblLtd EUR GL EQ
CYM
01/31 USD 577.71 NS NS NS
Horseman GlblLtd USD GL EQ CYM 01/31 USD 577.71 NS NS NS
n HSBC ALTERNATIVE INVESTMENTS LIMITED
T+44 20 7860 3074 F+44207860 3174 www.hail.hsbc.com
HSBC ALTERNATIVE STRATEGY FUND
Special OppEUR OT OT GGY 12/31 EUR 122.21 14.2 14.2 17.0
Special OppInst EUR OT OT
GGY

03/31 EUR 88.51 0.7 -0.3 13.3
Special OppInst USD OT OT
GGY
03/28 USD 123.18 4.2 18.5 10.6
Special OppUSD OT OT GGY 12/31 USD 129.13 14.0 14.0 17.3
n HSBC Portfolio Selection Fund
GH FundCHF Hdg OT OT GGY 01/31 CHF 125.95 0.5 6.7 6.1
GH FundEUR Hdg (Non-V) OT OT
GGY
01/31 EUR 140.23 0.5 6.3 6.0
GH FundGBP Hdg OT OT
GGY
01/31 GBP 154.96 0.5 6.9 6.7
GH FundInst USD OT OT
GGY
01/31 USD 133.63 0.6 7.3 7.0
GH FUNDSEUR OT OT
CYM
01/31 EUR 156.05 0.6 7.7 7.2
n HSBC Trinkaus Investment ManagersSA
E-Mail:
Telephone: 352 -4718471
HSBC TrinkausGolden Opportunities
OT OT LUX 02/25 USD 85.86 22.7 -25.9 -22.7
Prosperity ReturnFund AJPBDLUX 12/06 JPY 8577.68 -9.3 -8.4 0.3
Prosperity ReturnFund BEUBALUX 12/06 JPY 9032.12 4.6 11.0 13.2
Prosperity ReturnFund CEUBALUX 12/06 USD 79.01 -12.2 -11.1 -1.0
Prosperity ReturnFund DEUBALUX 12/06 EUR 121.37 -9.0 -8.8 8.1
Renaissance HghGrade Bd A
EU BA LUX 12/06 JPY 10807.34 3.5 5.1 11.3

Renaissance HghGrade Bd B
EU BA LUX 12/06 JPY 11130.39 17.9 25.6 23.9
Renaissance HghGrade Bd C
EU BA LUX 12/06 USD 96.94 -0.9 0.7 8.4
Renaissance HghGrade Bd D
EU BA LUX 12/06 EUR 102.83 -4.6 -4.1 6.9
n MP ASSET MANAGEMENT INC.
Tel: +386 1587 47 77
MP-BALKAN.SI EE EQ SVN 08/12 EUR 19.29 -1.9 -8.4 -10.9
MP-TURKEY.SI OT OT SVN 02/24 EUR 33.54 -7.4 -29.9 -4.7
Paragon LimitedUSD AEUEQCYM 12/31 USD NS.00 12.7 12.7 14.2
UK FundUSD AOTOTCYM 04/13 USD 157.94 1.8 NS NS
n PT CIPTADANA ASSET MANAGEMENT
Tel: +6221 25574 883 Fax: +6221 25574 893 Website:www.ciptadana-asset.com
Indonesian GrthFund GL EQ BMU 02/19 USD 154.09 13.0 -16.5 -10.2
n THE NATIONAL INVESTOR
PO Box 47435, Abu Dhabi, UAE Web:www.tni.ae
MENA SpecialSits Fund OT OT BMU 01/31 USD 1127.97 1.1 5.8 6.7
MENA UCITSFund OT OT IRL 02/20 USD 1393.41 7.5 30.0 19.1
UAE BlueChip Fund OT OT ARE 02/20 AED 10.81 15.9 81.3 52.9
n YUKI MANAGEMENT &RESEARCH
n YMR-N Series
YMR-N GrowthFund JP EQ IRL 02/26 JPY 13497.00 -6.1 37.6 26.4
n Yuki Asia Umbrella Series
Yuki ReboundingGro Fd JP EQ IRL 02/26 JPY 16540.00 -4.0 50.9 34.9
n Yuki Mizuho Series
Yuki MizuhoJpn Dyn Gro JP EQ IRL 02/26 JPY 5757.00 -6.4 35.9 25.6
Yuki MizuhoJpn Inc JP EQ IRL 02/26 JPY 10062.00 -3.5 27.6 21.4
Yuki MizuhoJpn Lg Cap JP EQ IRL 02/26 JPY 6178.00 -8.2 25.3 18.1
Yuki MizuhoJpn LowP JP EQ IRL 02/26 JPY 18651.00 -5.4 49.4 33.8

Yuki MizuhoJpn Val Sel AS EQ IRL 02/26 JPY 9171.00 -4.1 50.2 38.2
GH FUNDSGBP OT OT
CYM
01/31 GBP 163.37 0.6 7.8 7.6
GH FundSUSD OT OT
CYM
01/31 USD 183.43 0.6 7.8 7.6
GH FundUSD OT OT
GGY
01/31 USD 318.33 0.5 6.5 6.4
Hedge Investments OT OT
GGY
08/16 USD 158.48 NS NS 3.6
Leverage GHUSD OT OT
GGY
01/31 USD 148.62 0.9 11.1 10.7
MultiAdv ArbCHF Hdg OT OT
JEY
01/31 CHF 100.74 0.8 3.6 3.9
MultiAdv ArbEUR Hdg OT OT
JEY
01/31 EUR 112.34 0.8 4.0 4.2
MultiAdv ArbGBP Hdg OT OT
JEY
01/31 GBP 122.34 0.8 4.4 4.7
MultiAdv ArbSEUR OT OT
JEY
01/31 EUR 126.73 1.0 5.3 5.6
MultiAdv ArbSGBP OT OT
JEY

01/31 GBP 133.92 0.9 5.6 6.0
MultiAdv ArbSUSD OT OT
JEY
01/31 USD 144.88 0.8 5.2 5.7
MultiAdv ArbUSD OT OT JEY 01/31 USD 212.29 0.8 4.1 4.5
n HSBC Uni-folio
Asian AdbantEdgeEUR OT EQ JEY 01/31 EUR 97.06 -0.4 4.9 4.0
Asian AdvantEdge OT EQ
JEY
01/31 USD 181.80 -0.4 5.0 4.7
Emerg AdvantEdge OT EQ
JEY
09/28 USD 151.22 3.4 -2.4 -5.5
Emerg AdvantEdgeEUR OT EQ
JEY
09/28 EUR 82.99 2.8 -3.0 -5.9
Europ AdvantEdgeEUR OT EQ
JEY
06/30 EUR 127.84 -3.4 -1.3 2.2
Europ AdvantEdgeUSD OT EQ
JEY
06/30 USD 135.07 2.0 4.3 5.1
Real AdvantEdgeEUR OT OT
JEY
04/30 EUR 104.69 1.3 -9.5 -1.9
Real AdvantEdgeUSD OT OT
JEY
04/30 USD 105.31 1.5 -8.8 -1.7
Trading AdvantEdge OT OT
GGY

01/31 USD 126.86 -2.6 -12.0 -8.6
Trading AdvantEdgeEUR OT OT
GGY
01/31 EUR 114.61 -2.2 -12.0 -8.6
Trading AdvantEdgeGBP OT OT GGY 01/31 GBP 122.37 -2.6 -12.0 -8.5
n MERIDEN GROUP
Tel: +376 741 175 Fax: +376 741 183 Email:
Antanta CombinedFund EE EQ AND 02/21 USD 208.41 -0.7 -22.8 -19.2
Antanta MidCapFund EE EQ
AND
02/21 USD 353.52 -2.1 -15.4 -17.2
Meriden OppsFund GL OT
AND
02/05 EUR 22.68 0.0 -11.2 -11.0
Meriden ProtectiveDiv GL EQ AND 11/24 EUR NS.00 -2.8 NS NS
n Pictet Funds (Europe) SA,ROUTEDESACACIAS60, CH-1211 GENEVA 73
Tel: +41(58) 323 3000 Web: www.pictetfunds.com
Pictet-Abs RetGl Div-P EUR GL OT LUX 02/25 EUR 114.17 0.3 -3.3 -0.9
Pictet-Agriculture-P EUR OT OT LUX 02/25 EUR 150.01 -1.9 -1.0 3.8
Pictet-Asian EqExJpn-P USD
OT OT LUX 02/26 USD 180.11 -2.1 1.3 1.7
Pictet-Asian LocCur Dbt-P USD
AS BD LUX 02/26 USD 143.84 0.9 -7.2 -1.9
Pictet-Biotech-P USD OT EQ LUX 02/25 USD 669.57 20.9 76.1 45.7
Some areraising
concerns that Citigroup
has inordinatesway
within the Obama
administration.
THE WALL STREETJOURNAL. Thursday, February27, 2014|9

WORLD NEWS
U.S. ProbesFund Flows From Gabon
U.S. authorities areinvestigating
theflowoffunds from Gabon to the
U.S. to determine whether anyas-
setsare traceable to public corrup-
tion in thecentral African country,
according to alaw-enforcement doc-
ument and people familiar with the
matter.
As part of abroader effort to ad-
dresspossible foreign graft, Home-
land Security agentsand JusticeDe-
partment prosecutorshavesearched
forassetsinthe U.S. linked to Gabo-
nese President Ali Bongoand his
family,aswell as his chief of staff,
MaixentAccrombessi, these people
said. Prosecutorscould seek to seize
assetsthey believeare ill-gotten.
Thecase putsGabon in the cross
hairsofU.S.policyinAfrica. Presi-
dent Barack Obama is looking to in-
crease trade and militaryties with
stable African partnerslikeGabon,
an economygrowing at about 7%
this year.But the JusticeDepart-
ment is taking aharder tack against
corruption on the continent.
TwoU.S.Senateprobes intothe

movement of foreign assetsintothe
countrysince1999 concluded that
Mr.Bongo’slatefather,Omar,who
ruled the countryfor 41 years, used
his position to amassapersonal for-
tune during Gabon’soil boom.
Thecurrent U.S. probe came to
light last ye ar aftercustoms offi-
cials at LosAngeles International
Airportsaid they found morethan
$150,000 in the luggage of aone-
time hairdresserand aide to Mr.
Bongo. Agentsseized the money
from the man, Derek Ashby, because
he hadn’t disclosed the full amount
on currencyforms,according to
documentsfiled in federal court in
California in July.
In September,federal agents
raided the Pennsylvania home of
lobbyist Joseph Szlavik, weeks after
he allegedly transported cash from
Gabon to the U.S.,said people famil-
iar with the matter. Prosecutorsare
investigating whether Messrs. Szla-
vik and Ashby violated anycriminal
laws,according to the law-enforce-
ment document.
Bringing bulk cash intothe U.S.
is legal, as long as the person carry-

ing it declares the proper amount
andstateswhether they arecarry-
ing it on someone else’sbehalf.
Money-laundering laws prohibit any
person from knowingly engaging in
afinancial transaction that involves
the proceeds of corruption.
Mr.Ashby told agentshehadn’t
bothered to count all of the cash he
wascarrying because he wastrans-
porting it from Gabon to Mr.
Bongo’sestranged wifeinLos Ange-
les,IngeCollins, according to court
documents. “He wasjust unaware of
the totalamount he wasprovided,”
said Michael R. Kilts, alawyer for
Mr.Ashby.Mr. Szlavik declined to
comment through his lawyer,Aitan
Goelman. Neither man has been
chargedwith acrime.
Since2000,Ms. Collins has re-
ceived millions of dollarsincash
payments and wiretransfersfrom
Mr.Bongoand through Messrs.
Ashby and Szlavik,said aperson fa-
miliar with the matter.
Mr.Bongo’sofficesaid this
monththat it wasaware of the
probe of his associates but received
word from the U.S. State Depart-

ment this monththat neither the
president nor his government is un-
der investigation by U.S. authorities.
It added that the policies of the el-
der Bongo’spresidencyoutlined in
the prior Senateinvestig ations “are
not the policies of the current presi-
dency” or the re st of the govern-
ment. AState Department spokes-
man declined to comment, as did a
JusticeDepartment spokesman.
U.S. Attorney General Eric
Holder announced anew asset-for-
feitureprogram in 2010 aimed at
“combating large-scale foreign offi-
cial corruption.”
From 2011 to 2012, Gabon held a
United Nations Security Council seat
and helped push through two of Mr.
Obama’smost difficult U.N. votes:
sanctions against Iran’snuclear pro-
gram and support forthe removal of
Libyan leader Moammar Gadhafi.
In 2011, Mr.Bongoasked the U.S.
Treasuryfor help training Gabonese
auditorstoinvestigatecorruption
there, said Eric Benjaminson, then
U.S. ambassador.That same year,
Mr.Bongohad a50-minuteconver-
sation with Mr.Obama in the White

House in which the U.S. leader ex-
pressedhis desirefor the Gabonese
to increase anticorruption efforts,
said Mr.Benjaminson, who wasin
the room. Mr.Bongoagreed, but
said he faced challenges in uproot-
ing along tradition of corruption in
the country, said Mr.Benjaminson.
AWhiteHouse spokesman de-
clined to comment.
Ms.Collins, who has also been
contacted as part of the investiga-
tion, said she wascooperating and
denied anywrongdoing.
By Joe Palazzolo,
Christopher M. Matthews
and Drew Hinshaw
Gabonese PresidentAli Bongo,seen
in Tunisia earlier this month.
AgenceFrance-Presse/Getty Images
24 |Thursday, February27, 2014 THE WA LL STREETJOURNAL.
Fo rexTrader FXCM
SettlesU.K. Allegations
LONDON—Foreign-exchange
trading firm FXCM Inc.agreed to
payfines and refunds totaling al-
most £10million ($16.7 million) to
settle allegations by aU.K.financial
regulator that the companywith-
held profitsfromclientsand failed

to inform British authorities that it
wasunder investigation in the U.S.
The Financial Conduct Author-
ity said that U.K. unitsofFXCM
withheld £6million from customers
on foreign-exchangetransactions
between August 2006 and December
2010.The regulator said the broker
pocketed profitswhen exchange
ratesmoved in itscustomers’ favor
while atrade wasinprocess,but it
passed on losses that occurred on
othertrades.
FXCM, which is based in New
York and is publicly listed on the
NewYork Stock Exchange, is adom-
inant broker in online foreign-ex-
change trading forretail clientsand
serves banks,hedgefunds and other
asset managers. Thecompanyin
2012 sought to boost itsinstitu-
tional-trading businessbyinvesting
in, and trading with, an electronic-
trading platform called FastMatch,
in partnership with Credit Suisse
Group AG. In trades with retail cus-
tomers, FXCM matches orderselec-
tronically with quotes from more
than adozenbanks and other so-
called market-making firms.

As part of itssettlement, FXCM
agreed to pay £4million in fines
plus almost £6million to refund
money to U.K. clients.
In astatement, FXCM played
down the impact on customersas
“typically very limited,” with indi-
vidual traderssuffering an average
hitof$3. 70 apiecebecause of the
practicesoverthe four-year period
addressed in the settlement.
“It’snot likethis wasamajor
source of profit,” FXCM Chief Exec-
utiveDrewNiv said in an interview
Wednesday, adding that FXCM oper-
ated similarly to competitorswhen
it pocketed priceimprovementsin-
stead of crediting customers. FXCM
changed itspractices in 2010 to
passalong those priceimprove-
mentstocustomers, Mr.Niv said.
“Thisishow the system wasset
up.Asfar as we were concerned at
the time,the customer traded with
us,and we hedged,” Mr.Niv said.
“The only thingweheld back on
wasthe priceimprovement. We still
gavethe customer the best priceout
of multiple market makers.”
FXCM said it had provisioned $15

million in the thirdquarter of 2013
forthis matter.
TheFCA became aware of the
practicein2011. But it wasunaware
that U.S. authorities had begun their
ownprobe intothe matterayear
earlier.In2011, FXCM agreed to pay
morethan $14million to settle alle-
gations from U.S. market regulator s
that the companyhad failed to su-
pervise customer accounts. As are-
sult, regulatorssaid, FXCM custom-
erssuffered detrimental pricing on
trades.
FXCM’sfailuretoalert the FCA
breached requirementsthat busi-
nesses be open and cooperativewith
the U.K. regulator.“I’m not contest-
ing that,” Mr.Niv said, adding that
an FXCM ex ecutiveatthe time re-
sponsible forinforming the British
regulator mistakenly “thought he
had.”
BY JENNY STRASBURG
AND MAX COLCHESTER
CompaniesPay Up
Fo rCybersecurity
Fewknowthe costsofhacking
better than Robert Carr.
Sincecybercriminals gained ac-

cess to morethan 100 million
credit- and debit-cardnumbers
from Heartland Payment Systems
Inc.in2007,Mr. Carr,its chief exec-
utive, has quadrupled his security
budget. Heartland also paid $150
million in fines and legal costsfrom
the breach and suffered damageto
itsreputation as apayment proces-
sor.
“W e’vedone alot of thingssince
the breach that we didn’t do before
the breach,” Mr.Carr said in are-
cent interview, pointing to reducing
the number of computer systems
that processvaluable card data,
while adding moreencryption and
system-monitoring tools.
Heartland’sexperienceunder-
scores long-standing questions over
thecostsand benefitsofcybersecu-
rity.The Obama administration
stoked the debateearlier this month
by issuing newguidelines urging
companies in important industries
such as energy,banking and tele-
communications to do moretopro-
tect and monitor their networks,
and to train employees.
Some businessgroups criticized

the proposal, saying it would push
them to spend money foruncertain
benefits. Increased spending might
not makesense foranindividual
firm, they say, even if it mightmake
the nation safer.
TheWhiteHouse proposal is
“propublic and not procommercial,”
said LarryClinton, president of the
Internet Security Alliance, abusi-
nessgroup whose membersinclude
General Electric Co., Wells Fargo &
Co.and Verizon Communications
Inc.Cybersecurity measures must
be cost-effectivefor an individual
company, or be “supported by some
sort of economic incentive,” he said.
Mr.Clinton said the intercon-
nected global economycreates
“massiveeconomic incentives to be
insecure.” Forinstance, lengthyin-
ternational supply chains canoffer
savingsfor manufacturers, but can
open doorsfor hackers. Thesame
goes forsprawling,interconnected
internal networks that allow
companies to manageassetsfrom
afar.
Thevulnerability has been on
displayrecently,asretailersdis-

closed thefts of customer data. In
themost prominent example, Tar-
get Corp.said hackersstole 40 mil-
lion credit- and debit-cardnumbers,
along with passcodes,fromits
stor es .The thieves gained access to
Target’scash-register systems
through arefrigeration contractor
in Pennsylvania.
Obamaadministration officials
saythey understand companies’
concern. “The amount of cash you
have doesn’t change,” said Phyllis
Schneck, the Department of Home-
land Security ’s deputy undersecre-
tary forcybersecurity.Ms. Schneck
said Washington’sguidelines will
prompt “some really harddiscus-
sions” in boardrooms about the
risks of cyberattacks.
Thedebatewill be joined this
week at the annual RSAConference,
the equivalent of the Detroit auto
show forthe anti-hacker industry.
Morethan 400 cybersecurity com-
panies will displaytheir waresat
the SanFranciscoevent.
Companies wrestle daily with
the question of howmuch security
is enough. Global cybersecurity

spending by critical infrastructure
industries wasexpected to hit $46
billion in 2013,up10% from ayear
earlier,according to Allied Business
IntelligenceInc.
“Large and small companies per-
form cost-benefit analyses forevery
dollar spent,” lobbyistsfor the wire-
lessand cable industries wroteina
December lettertothe government
on the issue.
Forinstance, af terIran-linked
hackersbegan attacking U.S. bank
websites in 2012, the industrybe-
gantoinvest moreheavily in com-
puter security,aformer U.S. official
said. And afterRSA,the security di-
vision of EMC Corp., suffered a
breach in 2011, higher up executives
became moreinvolved in cybersecu-
rity risk calculations,RSA’s Execu-
tiveChairman Art Coviello said in a
recent interviewwith TheWall
Street Journal.
Here’spart of the problem: It is
alot cheaper to hack than defend a
hack.For $1 million, RichardBe-
jtlich,chief security strategist at
FireEye Inc.and aformer cyber in-
vestigator forthe U.S. Air Force,

said he could assemble ateam that
could hack intonearly anytarget.
But $1 million wouldn’t be nearly
enough foracompanytodefend it-
self.
Completesecurity is “not some-
thing most people canafford, let
aloneanyone canafford,” Mr.Be-
jtlich said. He agrees with other ex-
ecutives who saythat if the govern-
ment wantsbusinesses to improve
cyberdefenses,itshould subsidize
the cost, with taxbreaks ,for exam-
ple.
In a2005 notetoclients, Gart-
ner Inc.analyst Avivah Litan esti-
mated forevery $5.6 2businesses
spendafter abreach, they could
spend $1 beforehand on encryption
and network protection to prevent
intrusions andminimizedamage.
Today, she says,the ratio is about
the same.
ButMs. Litan says she is often
rebuffed when she pitches corporate
boards on bolstering cyberdefenses.
“They sayitcostsmoretosecure
the system than to suffer the
breach,” said Ms.Litan, who de-
clined to name clientsbut works

with retailers.
Target, forexample,spent heav-
ily on cybersecurity,according to
former employees and people famil-
iar with retailer networks.Last
summer,itbrought in consultants
from the Chertoff Group,aWash-
ingtonfirm with close ties to na-
tional-securityagencies,toreview
itssecurity and interviewthe com-
pany’sintelligenceanalysts, former
employees said.
Chertoff’s findings, delivered to
the companylast fall, couldn’t be
learned. Target security staff
warned about possible weak spots
in itspayment-cardsystembefore
the breach, people familiar with the
mattersaid, but the warningswere
wavedoff as the holiday-shopping
season approached. Target declined
to comment.
So didahalf-dozencompanies
contacted to discusstheir approach
to cybersecurity aftersuffering a
high-profile breach, highlighting the
sensitivity of the issue.
Mr.Carr,the Heartland execu-
tive,says businesses faceacareful
balancing act.

“You canspend an inf inite
amount on security,” Mr.Carr said.
“Wheredoyou draw the line?”
BY DANNY YADRON
BUSINESS &FINANCE
CEOConcedes Bank Misconduct
help Americans hide funds in unde-
clared Swissaccounts. In areport
released Tuesday, the subcommittee
described the bank as awilling par-
ticipant in itsclients’ attemptsto
evadetaxes,saying it set up a
branch at Zurich’sairport so cus-
tomerscould attend to banking en
routetoski vacations.
On Wednesday, Mr.Levinopened
the hearing by noting that despite
an ongoing crackdown, “the sad
truth is that the eraofbank secrecy
is not over.” Mr.Levinsaid that as
U.S. authorities began scrutinizing
the bank in 2008,Credit Suisse ini-
tially promised it would “clean up”
itsbusinesswith Americans.But,
Mr.Levinsaid the bank moved
slowly to addressthe issue and “was
holding back about howbad the
problem was.”
Mr.Levinand other lawmakers
also expressed frustration with the

DOJfor failing to act moreaggres-
sively to makeCredit Suisse ac-
countable.
In writtenremarks prepared for
Wednesday’shearing,however, two
topDOJ officials defended their
strategyfor pursuing U.S. taxeva-
sion, saying the agencyhas pressed
chargesagainst 73 holdersofoff-
shoreaccountsand 35 bankerssince
2009.
Credit Suisse is one of about a
dozenSwissbanks under DOJinves-
tigation forallegedly helping Ameri-
canclientshide assetsusing Swiss
accounts. Since2008 the bank said
it has wound down manyU.S.ac-
counts, with the ex ception of are-
maining 3,500,and has stopped tak-
ing newAmerican clientsfor its
Swissprivate-banking business.
Mr.Levinrepeatedly asked why
Credit Suisse won’t provide infor-
mation about customersthe bank
recruited within the U.S.
Mr.Dougan and three other ex-
ecutives,including the bank’sgen-
eral counsel, said the bank can’t
provide extensiveinformation about
U.S. clientsuntil the Senateratifies

Continued from first page
an amended2009 double-taxation
treaty between the U.S. and Switzer-
land. Thebank has noted the proto-
colalready has been approved by
theSwissParliament.
TheSenatehas yettoratify the
agreement amid opposition from
onelawmaker,Sen. Rand Paul (R.,
Ky .). Aspokeswoman forMr. Paul
didn’t immediately respond to are-
quest forcomment.
Credit Suisse executives also
were quizzedatlength about evi-
denceinthe Senatereport that bank
management mayhavesought to ar-
tificially bolster the performanceof
itsSwissprivate-banking business
in financial reporting for2012 by
augmenting itsso-called net newas-
setsfigure. Likeother Swissbanks,
Credit Suisse has seen money gener-
ally flow out of itsSwissprivate
bank from clientsinmanyregions
as thoseinternational customers
seek to comply with laws at home.
Credit Suisse executives ac-
knowledged at the hearing that it is
conducting an internal reviewofthe
matter. Thereissofar no indication

figureswereinaccurately reported
to the public,they said.
“I’m not trying to minimizeit,”
Mr.Dougan said, “but it’sadetail.”
Mr.Levinquickly responded:
“You maycall it adetail, I’dcall it
something investorswould presum-
ably look at.”
TheSenatereport estimates
Credit Suisse had at one time some
22,000 American clients, storing 12
billion Swissfrancs ($13.5 billion at
current exchangerates)atthe bank.
Thereport notes that clientsassoci-
ated with about1%ofthe American
accountshavebeen identified to
U.S. authorities.
Mr.Dougan and his colleagues
testifying Wednesdaysaid asignifi-
cant portion of the U.S linked as-
setscited in the report have been
deemed taxcompliant. Theexecu-
tivesalso said morethan athirdof
the accountscited in the report held
lessthan $10,000.
In early 2009,Credit Suisse rival
UBS reached adeferred prosecution
agreement with the DOJ, admitted
to helping American clientsevade
taxesand agreed to pay$780mil-

lion. UBS ultimately handed thou-
sands of names of clientstoU.S.au-
thorities.
Credit Suisse is expected to
eventually reach asettlement with
theDOJ that exceeds the amount
paid by UBS.
CEOBrady Dougan is sworn in beforeaSenate panel on Wednesday.
AgenceFrance-Presse/Getty Images
10 |Thursday, February27, 2014 THE WALL STREETJOURNAL.
WORLD NEWS
Syrian Regime Sa ys
It Killed 175Rebels
BEIRUT—The Syrian government
said itsforcesambushed and killed
dozens of rebels near Damascus,al-
leging they were part of anew of-
fensivetosqueeze the capital and
pressurethe regime to accept apo-
litical solution to the war.
Therewereconflicting reports
over who waskilled Wednesdayina
desert area on the fringes of the
rebel-held suburb of Eastern Gh-
outa, which has been under siegeby
Syrian fo rces formorethan seven
months.
Syrian statenewsagencies said
allthe 175dead were rebels from
thealQaeda-linked NusraFront.

They reported the fighterscame
through southern Syrian from
neighboring Jordan, whererebels
saythey arereceiving sophisticated
weapons from Gulf Arab states,in-
cluding shoulder-fired missiles ca-
pable of taking down jets.
Theopposition said the dead in-
cluded some rebel fight ers, but were
mostly civilians trying to escape the
siegeofEastern Ghouta, whereac-
tivistshavereported starvation and
medical care is scarce forthe
500,000 residents.
State TV showedimages of bod-
ies piled up and foreign passports
from Saudi Arabia, Iraq and other
countries.
Rebelssaid recently that they
have begun to receivemoresophis-
ticated weapons forthe firsttime,
includingantitank gu ided missiles
and Manpad antiaircraftmissiles.
They said theaid wasinprepar ation
forthe newoffensivetopush into
Damascus from southern Syria in
hopes of forcing President Bashar
al-Assad’sregime to accept apoliti-
calsettlement. Theplan arose out of
frustration with the regime’ srefusal

to discussapolitical compromise at
the recent Genevapeaceconference.
An activist from Eastern Ghouta
contradicted the government’sac-
count, saying those killed were actu-
ally heading out of Eastern Ghouta,
not intoit, and going in the oppo-
site direction to Quneitrainsouth-
western Syria near Israel. Apivotal
battle forfighterstrying to reach
Damascus has been raging around
Quneitra forabout aweek.
“Morethan 40 Syrian fighters
were killed and 15 escaped from the
Syrian armyambush while they
were tr ying to getout of Eastern
Ghouta,” the activist said. “They
were heading to Quneitratofight
there.”
TheArmyofIslam, an Islamist
rebel group which is powerful in the
area near the ambush, said the gov-
ernment killed 45 people,mostly ci-
vilians,who were trying to getout
of Eastern Ghouta. TheArmyofIs-
lam is part of an allianceofreli-
gious rebel groups knows as the Is-
lamic Front.
Susan Ahmad, an activist in
Eastern Ghouta, said dozens of Syr-

ian civilians and fighterswanted to
leave because they didn’t want to
die of hunger.
“They tried to runaway from the
government siege.…They were
shelled and later Assad’sforcesshot
the wounded.”
Several opposition groups in-
cluding the U.K based Syrian Obser-
vatory forHuman Rightssaid the
ambush wascarried out mainly by
membersofthe Iranian-backed Leb-
anese militia Hezbollah. Thegroup
has been actively fighting alongside
the Syrian regime forclose to a
year,particularly around Damascus
and other partsofcentral Syria.
—Mohammed Nour Alakraa
contributed to this article.
BY MARIA ABI-HABIB
AND SAM DAGHER
Hezbollah Vows It Will
Retaliatefor Israeli Strike
BEIRUT—Hezbollah vowedit
would retaliatefor an Israeli air-
strikethat damaged one of itsbases
near Lebanon’sfrontier with Syria,
raising the specter of awider con-
flict along the country’salready-vol-
atile southern andeastern borders.

TheShiitemilitant and political
groupsaid Wednesdaythat Israeli
warplanes struck one of itsposi-
tions lateMondaynear the eastern
town of Jantainthe Bekaa Valley,
whichbordersSyria. Hezbollah de-
nied re portsthat the raid on the
base result ed in casualties and dam-
agetoartilleryand rocket batteries.
Thestatement by Hezbollah,
broadcast over itsAlManar televi-
sion station, wasthe firstpublic ac-
knowledgment in Lebanon that the
Israeli raid had targeted Lebanese
territory. It raised fears, politically
explosivehere, that this small na-
tion mightbedragged further into
the conflict in Sy ria and intore-
newedconflict with Israel, itspow-
erfulneighbor and enemytothe
south.
Hezbollah, which fought the Is-
raeli armed forces to adrawin2006
in southern Lebanon, showedfew
worries.
“This aggression won’t stand
without aresponse, ” the group said.
Thethreat, about 36 hoursafter
the attack,came afterlocal media
reported that some Hezbollah fight-

ershad been killed in the airstrike
andthat trailerscarrying missiles
hadbeen the target.
Israel refused to confirm or deny
that it carried out Monday’sraid.
Butthe deputy commander of its
Northern Commandreserves said
Hezbollah had little choicebut to
confirm the attack on one of its
bases.
“I assume that Hezbollahreal-
ized it could no longer denythe
eventafter the entireworld around
it had reported it,” Eyal Ben Reuven,
areservemajor general in the Is-
raeli army, told Israel Radio.
Thegeneral said Hezbollah was
unlikely to attack Israel because it
wasalready preoccupied in Lebanon
and Syria, where, along with Iran, it
has joined sides with President
Basharal-Assad to put down the re-
bellion there.
—Joshua Mitnick in Tel Aviv
contributed to this article.
BY NOUR MALAS
India NavalChief Quits
AfterLatestMishap
NEW DELHI—India’snaval chief
resigned Wednesday, taking “moral

responsibility” foraseries of acci-
dentsthat struck the navy in the
past year,including asubmarine
mishap Wednesdaythat has lefttwo
crew membersmissing.
Theresignation and the acci-
dentscome as India—the world’s
biggest importer of weapons—is
working to upgrade itsdefense ca-
pabilities to faceamoreassertive
China, as well as itslongtime rival,
Pakistan.
Admiral D.K. Joshi’sresignation
came hoursafter afirebroke out
aboardasubmarine during atrain-
ing exercise.Two submarinerswent
missing and seven otherswerehos-
pitalized forthe effectsofsmokein-
halation. INS Sindhuratna, aSoviet-
builtdiesel-poweredsub,was about
75 kilometersoff the coast of Mum-
bai.
Thewhereaboutsofthe two sub-
marinerswasn’t known as three sec-
tions of the sub haven’t yetbeen in-
spected due to fearsthat fire could
restart, Commander Rahul Sinha, a
navalspokesman, said. “The subma-
rine is disabled and at sea. We ex -
pect it to be brought to Mumbai

dockyard early tomorrow morning,”
he said.
Theresignation wasaccepted
with immediateeffect, the defense
ministrysaid. Thevicechief of naval
staff Vice Admiral R. K. Dho wanwill
officiat easthe newnaval chief until
asuccessor is announced, it said.
In January, another submarine,
INSSindhugosh, ranaground off
Mumbai in lowtide, and afew other
warships ranaground. India has
about 15 submarines.The air force
flies mostly Soviet-eraMiG planes,
several of which ha ve cr ashed in re-
cent years, killing their pilots. The
armyistrying to buy advanced
tanks and guns.
Themost damaging of the naval
incidentstook placeinAugust when
18 sailorsdied afterexplosions and
afirerocked aRussia-built subma-
rine,INS Sindhurakshak,inaMum-
bainaval dockyard.The Indian gov-
ernment asked the navy to conduct
comprehensivechecks of weapons
and safety on boardall itssubma-
rinessincelast year’s incident.
Despitethe heightened focus on
safety,ships belonging to the Indian

Navy have runaground or were
damaged afterhitting underwater
objectsinrecent months.Amine-
sweeper reportedly caught fire while
undergoing repairsinadockyard.
In November,the navy commis-
sioned itssecond aircraftcarrier to
bolster itsblue-water presence. The
INS Vikramadityacan carrymore
than 30 planes,including Russian-
made MiG-29K and U.K built Sea
Harrierfighter jets, as we ll as Ka-
mov,Sea King,Dhruv and Chetak he-
licopters.
“It is achallenging situation for
the navy,” said C. Uday Bhaskar, a
retired Indian Navy commodoreand
former director of the National Mar-
itime Foundation. “It is time forus
to take adeeper look intothe higher
edificeofdelays in defense modern-
ization and induction of newequip-
ment in India.”
China, whichfought awar with
India in 1962, has begun arapid
modernization driveofits navy.It
has also been venturing away from
itshome waters,with warships sent
on antipiracypatrolsoff Somalia
and on voyages between the islands

of Japan intothe Pacific Ocean.
Tensions between China and In-
dia, the world’stwo most-populous
nations,haveintensified, particu-
larly along their disputed Himalayan
border.India has grownincreasingly
concerned about China’ spresencein
the Indian Ocean region, with Bei-
jing funding the construction of
portsinPakistan and SriLanka.
India is spending about $30 bil-
lion ayear to buy newaircraft, mis-
siles,planes and other defense
equipment to modernizethe Soviet-
vintageequipment of itsarmed
forces.One key defense project is
thepotential acquisition of 126 Ra-
fale fight er jet sfromDassault Avia-
tion S.A. of Francefor an estimated
value of morethan $10 billion.
BY SANTANU CHOUDHURY
India’snaval chief,Admiral D.K. Joshi, who resigned Wednesdayhours after afireonanuclear-poweredsubmarine.
Associated Press
Drug UseEyedinDeath of Navy SEALs
Drug use is suspected in the
deaths of two former U.S. Navy
SEALswho worked as security
guards on acontainer ship moored
in the Seychelles,policesaid late
Tuesday.

Thetwo men, identified as Jef-
frey Reynolds and Mark Ke nnedy,
both 44 yearsold, were found dead
last week in their cabin on the
Maersk Alabama, operated by Dan-
ish container-shipping giant Maersk
Line,aunit of A.P. Moller-Maersk
A/S.
TheSeychellespolicestatement
said an autopsy on the bodies of the
two men concluded that they died of
“respiratoryfailurewith suspicion
of aheart attack.”
“The policepreliminaryinvesti-
gation report includes suspicion of
drug use ,asindicated by the pres-
enceofasyringeand traces of her-
oin which were found in the cabin,”
and fluid samples from the men’s
bodies arebeing sent to Mauritius
forforensic analysis,the statement
said.
Mr.Reynolds andMr. Kennedy
worked forVirginia-based maritime
security firm Trident Group,formed
in 2000 by former SEALstoprovide
protection against pirateattacks.
“Trident Group co ntinues to
monitor the situation with our fallen
operators. Assumptions arebeing

reported about this situation with-
out the benefit of anyfact-based in-
formation,” Trident Group Chief Ex-
ecutiveThomas Rothrauff said in a
stat ement on the company’swebsite.
TheU.S flaggedMaersk Alabama
operat es off the east coast of Africa,
one of the highest-risk areas forpi-
rate attacks.
Theship wasseized by Somali
piratesinthe same waters in 2009.
Her then-captain, RichardPhillips,
wastaken hostageonalifeboat and
wasrescued three days later,when
U.S. Navy snipersshot dead the
three pirates holding him.
The2013 film “Captain Phillips,”
starring TomHanks as the captain,
is based on the incident.
BY COSTAS PARIS
The opposition said some
of the dead were civilians
trying to escape asiege.
THE WALL STREETJOURNAL. Thursday, February27, 2014|23
China Lights Electric-Car Spar k
China and global companies are
taking newsteps to fulfill the coun-
try’sambitions forelectric cars,
which so far have exceeded Bei-
jing’sgrasp.

Chinese automakers BYD Co.
and BAIC Motor Co.onWednesday
wonapproval from Beijing’ smunici-
pal government to sell electric cars
in the city.Shares of BYD, which is
partially backed by Warren Buffett,
jumped 9.6% in Hong Kong.BYD’s
all-electric e6 crossover has been
sold mainly in the southern Chinese
city of Shenzhen, wherethe com-
panyisbased. Most of the vehicles
operateastaxicabs and buses.
Meanwhile, Switzerland’s ABB
Ltd. said it would makeand market
home,wall-mounted, electric-car
chargers in China, part of an effort
to addressalack of charging sta-
tions and other infrastructurenec-
essaryifelectric cars aretohit
China’sroads in serious numbers.
Chunyuan Gu, ABB’sChina chair-
man and president, said he believed
demand forcarsand charging
equipment will take off afteraslow
start. “Either youbelieveoryou
don’t believe,” he said. “What’sdif-
ficult to predict is howfast the vol-
ume will come.”
China’sgovernment wants
500,000 hybrid and electric vehi-

cles on itsroads by next year and
five million by 2020.But only
around 17,600 such vehicles were
purchased in China last year,in-
cluding hybrid and pure-electric
cars and buses.Itislikely that no
morethan 50 ,000 such vehicles are
in use in China.
China long has said it wanted to
lead the world in developing and
sellingelectric cars,inpart to re-
duceits relianceonoil and improve
air quality.Big sections of China
againwerecovered by thick,pol-
luted air this week,inlarge part be-
cause of automotiveemissions.
Global automotivecompanies
have been drawntoChina’ svast po-
tential; the countryrecorded about
22 million autosales last year.Elec-
tric-car maker Tesla Motors Inc.
last monthsaid it would sell its
Model Ssedan in China starting
around $120,000.
Tesla is aiming itscar at the lux-
urysegment. But Mr.Gusaid gov-
ernment incentives were needed if
Beijingwanted to reach the mass
market.China in September rolled
out an incentiveprogram under

whichbuyersofelectric cars can
receiveupto60,000 yuan, or about
$9,800,insubsidies.Buyersofcer-
tain gasoline-electric hybrids can
getupto35,000 yuan. Some local
governmentsalso offer incentives.
Building asuitable charging in-
frastructurealso is amust if elec-
trical vehicles aretotakeoff,Mr.
Gu said. ABB this month announced
asix-year agreement to supply
home,wall-mounted fast chargers
forDenzacars. Manufactured by a
joint ventureofBYD and Germany’s
Daimler AG, the Denzawill go on
sale this year.
Denzadidn’t respond to re-
questsfor comment.
“I am ve ry confident that once
China overcomes all these hurdles,
the volumes will increase faster
than we canproject,” Mr.Gusaid.
ABB reported a“solid perform-
ance” in China forlast year,despite
“a mixed businessclimateand mar-
ketenvironment.” China revenue
rose 7.7% to $5.6 billion as the com-
panybenefited from the co untr y’s
greater emphasis on stable eco-
nomic growth and low-carbon, sus-

tainable development. ABB invested
$136 million in China last year.
BYDthis week also received ap-
proval to sell itsplug-in hybrid, the
Qin, in Shanghai as part of atrial.
Thecompanydeclined to provide
details about plans forrolling out
itsvehicles in Beijing and Shanghai.
BAIC couldn’t be reached for
comment.
BYDwas apioneer in developing
electric cars in China, but has
struggled to win international rec-
ognition forits green-vehicle tech-
nology.
ABeijing government official
said the city would provide asub-
sidy forthe sale of BYD’se6cars
even though they arebuilt in Shen-
zhen. Theoff icial said Beijing
aimed to ha ve in placearound 1, 000
charging unitsinsome 100 stations
throughout the city by year-end, up
from 20 stations today.
“It waspreviously mission im-
possible forordinaryconsumersto
use BYD’selectric cars in Beijing
because of the manyapprovals that
needed to be got,” said Leping
Huang, an analyst at Nomura.

—Rose Yu in Shanghai
contributed to this article.
By Colum Murphy
in Shanghai and
Joanne Chiu in Hong Kong
JapanPostOutlinesPlanonWay to IPO
TOKYO—Japan’spostal system,
which runs one of the world’sbig-
gest banks as well as Japan’ slargest
insurer,announced anearly $13 bil-
lion investment plan Wednesday
that it said would pave the way for
apublic stock offering next year.
Ashareoffering of Ja pan Post
Group,which government officials
have said could raise some $40 bil-
lion, would be one of the largest ever.
But much remains uncertain, includ-
ing whether the publicly traded com-
panycould engageinbread-and-but-
terfinancial businesses such as
corporat eand mortgagelending.
To enticeglobal investors, Japan
Post needs to demonstratehow it
would pivot away from itsmorethan
centurylong historyasarule-bound
government entity,said Ed Rogers,
chief executiveofficer of the Tokyo-
based RogersInvestment Advisors.
“The prospect of aJapan Post

[initial public offering] immediately
poses the question of what kind of
mandateormission such apriva-
tizedcompanywith trillions in as-
setswould have,” Mr.Rogerssaid.
“Certainly,asanentity responsible
to shareholders, it cannot simply af-
ford to let the cash sit idle.”
Japan Post Chief ExecutiveTaizo
Nishimurosaid Wednesdaythat he
wanted to be ready foralisting by
March 2015 ,and suggested that the
government could set the frame-
work as soon as this summer.Offi-
cials have said they envisioned list-
ing two-thirds of the group.
“W ehaven’t agreed on anything,
including whether only Japan Post
Holdingswill be listing or itstwo fi-
nancialunitswill also be listing,”
Mr.Nishimurosaid as Japan Post
announced itsfirst medium-term
business plan.
Thebusinessplan included only
modest steps intonew areas .Japan
Post said it would look at expanding
itse-commerce activities and devel-
oping morecommercial real estate
to take advantag eofits vast nation-
wide landholdings.

Much of the nearly $13 billion in
investment over the next three
yearsisaimed at polishing up Japan
Post’sbasic operations and facili-
ties,which oftenlag behind those of
privatecompetitors. Nearly $5 bil-
lion is earmarked forupgrading the
group’scomputer systems.
Thehugeinvestment will likely
giveJapan’seconomyaboost, but it
is also feeding worries among pri-
vate-sector banks and insurers. They
citethe potential forunfair compe-
tition from an institution with
24,000 outletsinall cornersofJa-
pan. Last year,the American Cham-
ber of Commerce in Japan ex-
pressed concern about Japan Post’s
bank and insuranceunitsexpanding
their presence.
Some companies stand to gain
from amorebusiness-oriented Ja-
pan Post. In July,American Family
LifeAssuranceCo.,the company
known forthe Aflac duck, formed an
alliance with the Japanese group to
sell cancer insuranceatpost offices.
To put Japan Post’ssizeinper-
spective, on the list of Fortune Global
500 companies,itisNo. 13 in revenue

behind nine oil or resource compa-
nies,two automakersand Wal-Mart
Stores Inc.InJapan, only Toyota Mo-
torCorp.islargerbyrevenue.
Japan Post has improved itsbal-
ancesheet with the help of cost
cuts, recording anet profit of nearly
$4 billion in the nine-month period
ended in December.However, that
profit came overwhelmingly from its
banking business, while itspostal-
serviceand insurancebusinesswere
only slightly in the black.
Japan has privatized several for-
mer state-owned monopolies in re-
cent decades,including the state
railway and, telephone company.
Thepublicly listed descendantsof
those monopolies generally have
held their own, giving the govern-
ment confidencetomoveahead
with alisting of Japan Post to raise
funds forreconstruction of areas hit
by the 2011 earthquakeand tsunami.
Government officials offered the
$40 billion estimatefor the Japan
Post IPO sizelast year.Ifitisthat
size, the listing would be largerthan
thecurrent record holder foranIPO,
the 2010 offering of Agricultural

Bank of China Ltd. at $22.1 billion.
Anyoffering of that sizeis
bound to getglobal investors’ atten-
tion, but getting their money is an-
other matter. Manyinthe market
sayJapan Post’sallurewill depend
on itsability to free itself from re-
strictions long imposed by itsstate-
owned status.
Thepostal bank is barred from
making major loans and can’t accept
depositsofmorethan ¥10 million, a
little lessthan $100,000.Japan Post
has plowedmost of it sdepositors’
funds— 70%ofits nearly $3 trillion
in assets—intoJapanese government
bonds,making it the largest credit or
of the Japanese government.
“UnlessJapan Post announces a
more-specific businessplan before
the IPO,itmay be difficult to attract
investorsnextyear,” said Mitsushige
Akino, chief fund manager at Ichi-
yoshi Asset Management.
In an interviewlast October,Mr.
Nishimuro, the Japan Post chief ex-
ecutive, said the group would have
morefreedom to enter newbusi-
nesses if the government reduced
itssharebelow50%. “I have to say

that’sour main purpose foralist-
ing,” he said.
But the 78-year-old CEO ,who ear-
lier led Toshiba Corp.and the Tokyo
Stock Exchange, acknowledged that
the companystill had apublic role to
playand said he wouldn’t close un-
profitable po st offices. He said the
companyhad aduty to maintain
services that people need.
Fund managerssay that if inter-
est in Ja pan Post from individual
andinstitutional investorsflagged,
government organizations,including
public pension funds,would likely
absorb abig chunk of shares.
BY ATSUKO FUKASE
BUSINESS &FINANCE
Underpowered
China’selectric-vehicle market is
still in its infancy
SALES IN NUMBER OF VEHICLES
2011
2012
2013
5,579
11,375
14,604
Notavailable
14.5

million
15.5
million
17.9
million
Total
passenger-
car sales
1,416
3,038
Electric-only vehicles
Plug-in hybrids
Source:China Association of Automobile
Manufacturers
The Wall Street Journal
Japan’spostal systemcovers the country by motorcycle and truck—notto
mention 24,000 outlets. Officials have estimatedanIPO could raise $40 billion.
BloombergNews
St eelmaking
Expansion
Undermines
Beijing’sAim
BEIJING—China’slargest steel-
making provincehas been adding
twiceasmuch newproduction ca-
pacity as it has shut down, under-
scoring achallengefor Beijing’s
campaign to reduceovercapacity
and air pollution.
Official effortstoeliminateout-

moded steel capacity in Hebei prov-
incehaven’t been effectivesofar,a
senior official with aunit of Hebei
Iron and Steel Group Ltd., China’s
largest mill, said Wednesday.
Up to the end of last year,steel
millsinHebei were adding newca-
pacity at apaceofaround 30 million
tons ayear ,twicethe average15mil-
lion tons of outdated capacity that
the government wantstoshut each
year until 2017, said Wang Jiguang,
marketing direct or at Hebei Iron and
Steel’ssales unit.
Thecentral government has
identified eliminating industrial
overcapacity as apriority forthis
year,seeing the problem as awaste-
fuldragongrowth.
Hebei is aproving ground forthe
campaign. An industrial provincethe
sizeofOklahoma that surrounds the
nation’scapital, Hebei accountsfor
aquarter of China’ssteel and has
been in the government’scross hairs
forcontributing to an unruly steel
market andfilthyair.Steel-making
capacity in Hebei wasgrowing even
as Beijing wasurging steelmakers
nationwide to restrain “the blind ex-

pansion of capacity.”
“This target of eliminating 15
million tons of outdated capacity a
year,compared to our addition of
newcapacity of 30 million tons a
year,indicates that the speed of
elimination is not quitefast enough
to digest the outdated capacity,” Mr.
Wang said.
Mr.Wang’sremarks,made pub-
licly in an apparently unscripted ad-
dresstoaconferenceattended by
industryexecutives fr om ar ound the
world, reflect an unusual degree of
candor from an off icial about the
government campaign. Pr esident Xi
Jinping made an example of Hebei
officials last fall during atelevised
Mao-style“self-criticism” session,
getting them to admit they had pur-
sued growth at the expense of the
environment and other concerns.
China’ssteel industryisdeeply
entrenched in itseconomy. In Hebei
alone,job losses could runashigh as
200 ,000 if all state-requir ed cutsare
carried out, according to some ana-
lysts’ estimates.Sofar,the local
government has used showy displays
of demolishing old steel factories,

taking down 6.8million tons in No-
vember and 8.2million tons in Feb-
ruary. However, these facilities had
already st ood empty formorethan a
year,Mr. Wang said.
“It’sjust the smaller,moreout-
dated st eel facilities that have been
shut,” Mr.Wang said. Thestate-
backed China Iron and Steel Associa-
tion corr oborated Mr.Wang’sview
in an earlier interview.
Steel factories have increasingly
become atargetfor official ireamid
intense pollution.Hebei suspended
steel production this week as it
sought to help Beijing roll back
heavy smog.Mr. Wang said the cen-
tral and local governments’ efforts
to cut steel capacity would likely
succeed only “inafew years.”
BY CHUIN-WEI YAP
THE WALL STREETJOURNAL. Thursday, February27, 2014|11
WORLD NEWS
Argentina Meltdowns Stick to Schedule
In Buenos Aires these days,aso-
bering theoryismaking the rounds
at coffee houses and backyard asado
grill-outs: Argentina is destined to
experienceaneconomic meltdown
aboutonceper decade,and there

isn’t much anyone herecan do about
it.
“W ehavealways had instability,”
said David Gambarin, an affable 90-
year-old real-estat ebrokerwho still
putsonasuit and goes to his office
in downtown Buenos Aires.“This is
howweArgentines are.”
Barely adecade afterits 2001
crash, Argentina is on the vergeof
turmoil ag ain. Thepeso plunged in
January, and economistssay that a
mix of inflation and recession is likely
to follow. Alr eady,butchersand store
ownersare jacking up prices.Tohold
inflation back,President Cristina
Kirchner is restricting access to dol-
larsand threatening shopkeepers
with closure, but economistsnote
that such tactics failed in the past.
Like many here, Mr.Gambarin is
greeting the tumult with resigna-
tion.ARussian immigrant who ar-
rivedinBuenos Aires as aboy,he
has lived through five coups.His
two children have weathered adic-
tatorship,bank collapses and infla-
tion ratesthat surgedsoquickly in
the 1980s that shoppersran to the
checkout lines to buy items before

they were marked up again. The
current downturn will be the second
crisis in the adult lives of Mr.Gam-
barin’sfour grandchildren.
“W eseem to do everything pos-
sible to fulfill the prophecyof
never-ending crisis,” said Mr.Gam-
barin’s64-year-old son-in-law, Rod-
olfoCohan, over coffee at his apart-
ment in the middle-classBelgrano
neighborhood.
In the 1940s,President Juan
Perónclosed the Argentine economy
to trade with the rest of the world.
In the1960s,the countryendured
stagnation, inflation and military
coups.In1975, 1981 and 1989,failed
economic plans led the currencyto
plunge. Thelast crisis hit in 2001,
when Argentina defaulted on about
$100 billion in sovereign bonds.The
default—the largest ever at the
time—brought down Argentina’s
banks,currencyand government.
EconomistsclassifyArg entina as
an “emerging market, ” but itsecon-
omy, which depends on commodities
such as beef and soy, has been in de-
cline foracentury. In 1910 ,Argentina
wasamong the world’s10wealthiest

countries; today, itsper capitaincome
is lessthan half that of the U.S.
Thereislittle debateabout the
cause of Argentina’sserial financial
woes.“Bad government,” says the
economist Marina Dal Poggetto,a
partner at the Estudio Bein consul-
tancyinBuenos Aires.
Fordecades,Argentine leaders
have overspent during good ye ars
andfailed to save forlean ones.To
prolong the good times,they have
borrowedheavily or simply printed
money.What followedwereboutsof
inflation, currencycrashes,bank
collapses…and worse.
Thewall behind Ms.Dal Pog-
getto’ sdesk is coveredwith picture
frames containing rowafter rowof
Argentine currencies discarded in
various failed economic plans.Ar-
gentina has chopped 13 zerosfrom
itsbank notes since1969.In1991,
forexample,the 10 ,000 austral note
wasreplaced by the one peso note,
worth $1. Today, that same one peso
noteisworth 9cents.
Well-to-do and middle-classAr-
gentines have along historyofsav-
ing in dollarsincase their owncur-

rencycrashes.The government
estimates that Argentines have $160
billion stashed offshoreorinhome
safes.Illegal dollar sellers, called ar-
bolitos, areeverywhereinBuenos
Airestoday.
Forthe poorest Argentines,cri-
sescan mean calamity.With little
access to dollars, the poor watch
helplessly as inflation wipesout the
value of their wages, leaving them
unable to buy food. Mobs looted su-
permarketsacrossArgentina in the
crises of 1989 and 2001.
Mr.Gambarin says that he used
his witstobuild areal-estatebusi-
nessduring alifetime of turbulence,
starting his career around the time
of Mr.Perón’srise.Mr. Gambarin’s
daughter,Nilta, and his son-in-law,
Rodolfo Cohan, began their married
lives at the start of one of Argen-
tina’sdarkest eras,the “Dirty War”
from 1976to1983,when some
10,000 to 30 ,000 people were killed,
mainly by statesecurity services.
TheCohans’ firstchild wasborn
in 1975, the year of the “Rodrigazo”—
ajarring currencydevaluationnamed
afterEconomyMinister Celestino Ro-

drigo. Thepolicywiped out savings
and wagesand pr oduced 35% infla-
tion amonth. Their second child
came the next year,asmilitaryoffic-
ersousted the “Rodrig az o ” govern-
ment and imposed amurder ous dic-
tatorship .Their thir dchild came
along in 1982, the year the military
went to wa rwith the U.K. over the
Falkland Islands—lar gely seen as a
bid to distract Argentines from their
collapsing economy.
Nowanew generation is coming
of ageinturmoil. “Crisis is in the
Argentine DNA,” says Mr.Cohan’s
thirdchild, Luciano Cohan.
It is also in the lesson plans.
When Luciano studied economics at
the University of Buenos Aires ,one
of the school’stop professorswas
Axel Kicillof, an economist with
lamb-chop sideburns whose disser-
tation wasaMarxist take on John
MaynardKeynes.Today, Mr.Kicillof
is Argentina’seconomyminister—
the mind behind itsnationalizations
and itsprice, import and currency
controls.
Luciano said that he no longer
believes Mr.Kicillof’s theories—or

thegov ernment’sstatistics.Arg en-
tina’ sgovernment says that the infla-
tion rate was10.9% in 2013.Anecon-
omist himself now, he captured
thousands of prices from online re-
tailerstocome up with his ownesti-
mate: around 29%.
In the best case,inf lation will
rise to 35% to 40% this year,and the
economywill stagnate, Luciano
says.“Theworst-case scenario is
difficult to put intowords,” he said.
Mr.Gambarin, the family’s 90-
year-old patriar ch, says that he al-
ready knows what will happen.
“Nothing.Nothing will happen. We
areused to this.Every few years,
thingsget wiped out. Eventually
someone else will come in promising
to fixArgentina. But everything will
remain the same.”
BY JOHN LYONS
Awoman windowshops in BuenosAires on Jan. 27. Retailers have been raising prices in recent months.
Associated Press
Australia Pledges Relief
Fo rDrought-Hit Fa rmers
TheAustralian government has
pledged to givefinancial support to
drought-stricken farmers, manyof
whom arestill reeling from the ef-

fectsofaneight-year-long dryspell
that ended in 2009.
Prime Minister Tony Abbottan-
nounceda320 million Australian
dollars(US$288.6 million) drought-
relief packageonWednesday, the
majority of whichwill be allocated
as loanstofarms.The rest of the
money will go toward emergency
waterinfrastructureprograms,pest
management and social and mental-
health services to help farmerscope
with the effectsofthe drought.
TheNational Farmers’ Federa-
tion estimates that the country’sag-
ricultural sector contributes to
about 12% of Australia’sGDP.
An area larger than Franceand
Germanycombined has been classi-
fied as drought-stricken by the gov-
ernment. TheAustralian Bureau of
Agricultural and Resource Econom-
ics and Sciences warned this month
that the country’ssummer crop
could fall by 25% to 4million tons in
2013-14, with Queensland and north-
ern NewSouth Wales hit particu-
larlyhard. Meanwhile,cattlefarm-
ershavebeen destroying livestock
as prices have collapsed from

around A$500 foracalf to A$200.
Thedecision on the packageby
the government to givefinancial as-
sistancetofarmersunderscores the
divisions in the Liberal-National co-
alition on farms policy. Agriculture
Minister Barnaby Joyceisdeputy
leader of thejunior National Party,
whichisseen as favorable toward
providing support forfarmers, but
the ruling pro-businessLiberal Party
has been wary of promising more
subsidiesand handouts.
During adrought between 2001
and 2009,the Australian govern-
ment gaveabout A$4.5billion in aid
to the agricultural industry. Drought
wasdeclared again in partsofin-
land Queensland in Aprillast year.
However, Treasurer JoeHockey
said at the beginning of this month
that farmersshould not expect a
multibillion-dollar re scue package,
as speculation started to mount
over whether the government was
considering aA$7 billion rescue
packagetorelievefarmers’ debts.
Wednesday’sannouncement
comes as support forMr. Abbott’s
government has slipped with polls

showing support forthe opposition
Labor Party is increasing.
BY ISABELLA STEGER
Hong Kong Ex -Editor Stabbed
Theformer editor in chief of
Ming Pao, aprominent Hong Kong
newspaper,was stabbed Wednesday
and has been hospitalized in critical
condition, policesaid.
Theouster of Kevin LauinJanu-
aryhad sparked protestsbymanyof
the paper’s staffers. Theassault
prompt ed an outcryfromlocal jour-
nalist groups,with one lumping it in
with other threatsagainst journal-
istsinthe city in recent months.
Hong Kong’schief executive, Le-
ungChun-ying, said he wasgravely
concerned about the assault.
Current Ming Paochief editor
Cheung Kin-bor said that Mr.Lau
wasattacked by aknife-wielding as-
sailant on TaiHong Street in the
city’s SaiWan Ho neighborhood.
“W estill knownothing about the
details,” said Mr.Cheung.“We are
awaiting reportsfromthe doctor
and the police.”
Policesaid that they received a
call around 10:20 a.m. from the vic-

tim. Mr.Lau, 49 yearsold, told them
his assailant waswearing ahelmet
andhad attacked him with aknife
beforejumping ontoamotorcycle
driven by another person and speed-
ing away.
Themotivebehind the attack re-
mained unclear.Att emptstoreach
Mr.Lau weren’t successful.
Some staff membershad de-
manded an explanation forMing
Pao’ sdecision to re placeMr. Lau.
Ming Paohas said his removal won’t
changethe paper’s editorial direc-
tion.
Nearly 300 former Ming Pao
staffershavealso signed apetition
expressing their concern about po-
tential threatstoHong Kong’spress
freedom.
Mr.Lau’ sremoval wasone factor
behind aweekend rally to support
pressfreedom in the former British
colony, which organizerssaid at-
tract ed 6, 000 people and policesaid
drew some 2,200.This month, the
CommitteetoProtect Journalists
also warned that journalistsfacein-
creased self-censorship threatsas
China’seconomic sway grows.

Though Hong Ko ng returned to
Chinese control in 1997,itretains its
ownindependent political, economic
and judicial systems under the “one
country, two systems” principle gov-
erning itsrelationship with Beijing.
BY TE-PING CHEN
Former editor Kevin Lau outside the Ming Paonewspaper offices in January.
Associated Press
22 |Thursday, February27, 2014 THE WALL STREETJOURNAL.
Gum Makers
EnjoyBoom
In China Sales
As China’ sslowing economydents
sales growth of everything from per-
sonal computerstoOreocookies,
some companies arefinding growth
in asurprising plac e: chewing gum.
Gum is growing at double-digit
ratesinChina, igniting aturfbattle
forChina’schewers.Snack food
maker MondelezInternational Inc.
entered the fray in 2012 with a
sugar-free brand and ahigh-profile
campaign with aTaiwanese ce leb-
rity.Meanwhile,market leadersWil-
liam Wrigley Jr., adivision of Mars
Inc., and Korea’ s Orion Group have
expanded distribution and offered
flavorssuch as grapefruit, cucumber

and teatoencourageChina’sswell-
ing middle classtochewmore.
Risingdisposable incomes in
China areincreasingly making gum
amainstay in the pocketsofyoung
adults,the key gum-chewing seg-
ment.But companies’ aggressive
marketingofgum as away to im-
proveoralhealth, increase concen-
tration and lowerstresslevelsis
also winning over consumers. In the
last two years, ad spending on
chewing gumhas morethan dou-
bled to 7. 55 billion yuan ($1.24bil-
lion), beforefactoring in discounts
given on advertising rates, accord-
ing to Nielsen-CCData.
Qu Zhu, 30 yearsold, aBeijing
investment banker,typically buysa
40-piececontainer of chewing gum
each month. “Chinese food has so
much garlic,” he said. “I need to
freshen my breath aftereating.”
In aTVcommercial in China for
Extragum, aman eating crispy fried
noodles at arestaurant complains to
the female chef that it could break
his teeth. She tells him his teeth
aren’t good, and offershim apack
of Extra, which Wrigley promot es as

“caring about teeth, caring even
moreabout you.”
While nearly all sales of pack-
aged food have been affected by
China’sweakening economy, gumis
still seeing “dynamic growth” due to
manufacturer promotions and rising
consumer demand, according to Eu-
romonitor analyst Vera Wang Wei.
Gum sales grew nearly 14 %in
China last year to $2.8billion,
nearly double thelevel of 2009.
Still, annual growth has moderated
sincearecent 2011 peak of 20%.
Even as China’seconomyslows,
“myexpectation is that gumwill be
quiteresilient,” said Torsten
Stocker, apartner at A.T. Kearney,a
consulting firm.
Gum isn’t popular with everyone.
Zhang Lu,a22-year-old student in
Beijing,said she’safraid that chew-
ing gumwill build up her jawmus-
cles and makeher facelook fat.
“You knowChinese girls care about
their shapes,” she said.
Michael Yeung, president of
Wrigley Asia Pacific,said “there’s
no science” behind this concern.
Arapidly expanding market for

chewing guminChina comes even
as the treat’ssales have weakened
or even declined in matureWestern
markets, despitethe introduction of
newfangled productssuch as caf-
feinated gum.
Thedouble-digit growth in China
“isone of the reasons we launched
there, ” MondelezChief Executive
Irene Rosenfeld told analystsinNo-
vember.
Mondelez, afterlaunching its
Stride brand in China in the third
quarter of 2012, hired Taiwanese ce-
lebrity Ke Zhen Dong as itsspokes-
man and sponsored the popular Chi-
nese talent show“Super Boy.”
Mondelezalso installed over
100,000 checkout counter displays
forthe gumin10months.
Forthe maker of Oreos,gum has
been a“phenomenal success,” gen-
erating about $100 million in annual
sales,said Ms.Rosenfeld.
ConfectionerycompanyOrion
said it posted sales of morethan 1
trillion won($932 million) forthe
firsttime in China in 2012—and
continued itsstrong growth last
year—on the back of itstop-selling

product there: Xylitol chewing gum.
Orion, which also sells potato-fla-
voredtreat Yegamand ChocoPie
snacks in China, firstentered the
market in 2003 and has been grow-
ing at a30% annual rate in the coun-
try, it said in its2012 annual report.
Because gumconsumption is still
lowinChina compared with other
countries,companies see “large po-
tential” forgrowth, said CherryDai,
aproject manager at SmithStreet, a
consulting firm. “Girls want to eat
gumtostayslim,” said Ms.Dai.
Last year,the averageChinese
consumer chewed$1.80 worth of
gum. By comparison, Britons chewed
morethan four times this amount,
Americans morethan six times and
Japanese 6.5times,according to Eu-
romonitor.
Thebiggest challenge, gummak-
erssay,istoconvert moreconsum-
ers, especially those in lower-tier
cities,intohabitual gumchewers.
“Gum is an impulse-purchase
item, and if youdon’t see it, you
don’t buy it,” said Mr.Yeung of
Wrigley,which nowsells gumin
morethan 2.1 million stores in China,

up from 1.8million in 2008.“By
making it moreavailable in cities,it
will help us grow in economic ally
challenging times.”
BY KATHY CHU
AND LAURIE BURKITT
Wrigleyexpanded distribution to
encourage the Chinese to chewmore.
Wrigley’s
SingaporeAims to Become theNextSilicon Va lley
SINGAPORE—Singaporeispull-
ing out all the stops to build itsown
version of Silicon Valley as it at-
temptstocreateastartup hub for
Southeast Asia.
Excited by deals such as Face-
book Inc.’ s$19 billion agreement
last week to buy messaging company
WhatsApp Inc., Singapore’spolicy
makersand technologyentrepre-
neursare betting that one dayatech
giant could swoop down to grab one
of itsown homegrownstartups .Ven-
ture-capit al tech investmentsinSin-
gaporelast year outstripped those in
Japan, South Koreaand Hong Kong.
Thecity stat e, with itspopulation
of just 5.4million, isn’t quiteSilicon
Valley.Singaporehas yettoproduce
anything likeaGoogle Inc.orFace-

book,much lessaservicelikeChina’ s
messaging app WeChat, with 272
million monthly activeusers. It has
hadmixed success in trying to kick
start innovation in various industries
including biot echnology, media and
entert ainment.
Still, investorssay the technol-
ogyecosystem hereisbecoming
moreactive. One concern is that in-
sufficient entrepreneurial spirit
among young Singaporeans and the
government’sfinancial largesse
could inadvertently enable some
startups to limp along on state
funds,some analystssay.
In recent years, the Singapore
government has been trying to fund
local technological innovation by in-
vesting some 100 million Singapore
dollars, or roughly US$79million,
forearly-stagestartups as part of
theS$16 billion it has pledged for
scientific research and development.
Well-known U.S. venture-capital
firms such as Andr eessen Hor owitz
have funded local startups ,including
video site Viki,which Japanese on-
line retailer Rakuten Inc.bought for
$200 million in September.Rakuten

also agreed earlier this month to ac-
quireCyprus-based messaging app
Viber Media Inc.
Another Sing aporean tech co m-
panyattracting invest orsisRedMart,
an online gr oc ery-deliveryservice
founded in 2011 that has raised more
than $10 million from investorsin-
cluding Facebook co-founder and Sin-
gaporeresident Eduardo Saverin.
One hotspot in Singapor e’sfledg-
ling startup scene is aseven-story,
renovated factorybuilding known as
Block 71, west of downtown. On are-
cent Fridayevening,afew dozen
technologyentrepreneursgathered
to drink beer,nibble on cheese and
almonds,and discusstheir startups.
Hugh Mason, a47-year-old Brit-
ish entrepreneur,says thereare
about 100 startups and morethan $1
billion of investment under manage-
ment in the building.
In 2010,Mr. Mason and his
friend, 38-year-old Singapor enative
and anti-spam pioneer Meng Weng
Wong, co-founded Singapore’s Joy-
fulFrogDigital Incubator,which
hostsfrequent gatheringsatits
headquartersinBlock 71.

Mr.Wong,decked out in athree-
piecesuit and carrying the com-
pany’sgreen stuffed frog mascot
Smoochyonhis shoulder,moved
about the room, introducing out-of-
town visitorstoregular attendees.A
sign read, “Silicon Valley isn’t a
place. It’sanidea.”
Venturecapital invest ed in Singa-
porean tech companies by funds last
year totaled $1.71 billion. While that
is behind China’s$3.46 billion, it is
ahead of Japan, South Koreaand
Hong Kong,according to datafrom
Asian VentureCapital Journal of
Hong Kong.PricewaterhouseCoopers
LLP and the National VentureCapi-
talAssociation put venturefunding
forsoftware companies alone in the
U.S. at $11billion last year.Still,
funding devoted to Singapor e’stech
companies,including from the gov-
ernment, skyrocketed last year to
account for19% of funding for
Asia—up from just $27.3 million, or
0.3%, in 2011.
Brad Templeton, aSilicon Val-
ley-based Internet pioneer who
consultswith Google on self-driving
cars,said while Singapore’stech

scene seems moreactivenow than
it wasinprevious years, he added
that “too much government can
hurt astartup community rather
than help it.”
In itspolicies,Singapore’sgov-
ernment has attempted to mimic Is-
rael, which has developed arobust
technologyindustryoverthe years.
One government program designed
to assist early-stagestartups is the
“TechnologyIncubation Scheme,”
which began in 2010.Under that
program, the government co-in-
vestsasmuch as 85% of capital in
select startups,capped at the
equivalent of S$500,000.Technol-
ogyincubators—organizations that
provide mentoring and physical
space—pitch in the remaining 15%
and areallowedtobuy out the gov-
ernment’sstake afterthree years.
Thereare now15incubatorsand
morethan 100 startups participat-
ing in the program.
“In the past, Imight have funded
two or three startups ayear.Now
I’vebeen doing one amonth,” said
Leslie Loh, who heads Singaporean
venture-capital firm RedDot Ven-

tures,which waslaunched in 2011.
Douglas Abrams, who has worked
in Singapore’stechnologyventure-
capital industrysince2000,said
therehas been amarked increase in
the value of Singaporean “exits”—
when startups areacquired or sell
stock to the public.Mr. Abrams,now
chief ex ecutiveoftechnologyven-
ture-capital firm Expara, said that
last year some 20 companies had ex-
itstotaling morethan S$400 mil-
lion, compared with about S$50 mil-
lion in previous years.
BY NEWLEY PURNELL
BUSINESS &FINANCE
Choosing to Chew
Retail gum sales,
change from previous year
Sources: Nielsen-CCData (marketing); Euromonitor International
20
–10
0
10
%
’102009 ’11 ’12 ’13
WORLD
CHINA
U.S.
The Wall Street Journal

1billion yuan =$164 million
Spending on gum marketing in China,
in billions of yuan*
*Adspending for TV,newspaper,magazine and radio; Figures exclude discounts given on advertising rates
8
0
2
4
6
’092008 ’10 ’11 ’12 ’13
7.5
billion
The government has been
trying to fund local
technological innovation.
12 |Thursday, February27, 2014 THE WA LL STREETJOURNAL.
Information Harvesting
Sows the Seeds of Mistrust
Some Farmers Worry
Data MightBeSold
To Traders, Wind Up
In the Hands of Rivals
Or AidAgricultur al Firms
B
ig agricultural companies saythe next
revolution on the farm will come from
feeding datagathered by tractors and
other machineryintocomputersthat tell
farmershow to increase their output of
crops likecorn and soybeans.

Monsanto Co., DuPont Co.and other
companies areracing to roll out “prescrip-
tiveplanting” technologytofarmersacross
the U.S. who knowfromyearsofexperience
that tinyadjustmentsinplanting depth or
the distancebetween crop rows canmakea
big differenceinrevenue at harvesttime.
Some farmersare leeryabout the new
technology. They worrytheir datamight be
sold to commodities traders, wind up in the
hands of rival farmersorgivemoreleverag e
to giant seed companies that areamong the
most enthusiastic sellersofdata-driven
planting advice. Thecompanies vow not to
misuse the information.
“There’salot of value to that informa-
tion, ” says Brooks Hurst, 46 yearsold, who
works 2,400 hectares with his father and
brothersnear Tarkio ,Mo. “I’m afraid, as
farmers, we arenot going to be the ones
reaping the benefit.”
Manytractorsand combines already are
guided by Global Positioning System satel-
lites that plant ever-str aight er rows while
farmers, freed from steering,monitor prog-
ress on iPads and other tablet computers
nowcommon in tractor cabs.
Thesame machinerycollectsdataon
crops and soil. But manyfarmershavehap-
hazardly managed the information, scattered

in piles of paperwork in their offices or
stor ed on thumb drives clattering in pickup-
truck ashtrays.The dataoften were turned
over by hand forpiecemeal analysis.
Sellersofprescriptive-planting technol-
ogywant to accelerat e, streamline and com-
bine all those datawith their highly detailed
recordsonhistoric weather patterns,topog-
raphyand crop performance.
Algorithms and human expertscrunch all
the dataand canzap advicedirectly to farm-
ersand their machines.Supporterssay the
push could be as important as the develop-
ment of mechanized tract or sinthe firsthalf
of the 20th centuryand the rise of geneti-
cally modified seeds in the 1990s.
Theworld’sbiggest seed company, Mon-
santo, estimates that data-driven planting
advicetofarmerscould increase world-wide
crop production by about $20 billion ayear,
or about one-thirdthe value of last year’s
U.S. corn crop .
Thetechnologycould help improvethe
averag ecorn harvest to morethan 200 bush-
els an acrefromthe current 160 bushels,
companies say. Such again would generat e
an extra$182 an acreinrevenue forfarmers,
based on recent prices.Iowa corn farmers
gotabout $759 an acrelast year.One bushel
equals morethan 35 liters.

So far,farmerswho use prescriptive
planting have seen yields climb by amore
modest five to 10 bushels an acre, the com-
panies say.
Thegains arelikely to accelerateascom-
panies gather information from morefarm-
ers. Monsantohas been testing atechnology-
poweredplanting servicecalled FieldScripts
with farmerssince2010 and is starting to
pitch it this year in Illinois,Iowa,Minnesota
and Indiana, four of the biggest corn-produc-
ing states .Farmerspay the company$10 an
acre.
No one knows howmuch is being spent to
develop and market high-tech planting serv-
ices,but 20% of Monsanto’sprojected
growth in per-shareearningsby2018 could
come from FieldScriptsand other technol-
ogy-fueled improvements, estimates Michael
Cox, co-director of investment resear ch at
securities firm Piper Jaffr ay Cos.
“I see it as another potential transforma-
tion of the company,” says RobertFraley,
chief technologyofficer forMonsanto, based
in St.Louis.Hehelped develop Monsanto’ s
firstgenetically modified seeds in the early
1980s.
In November,Monsantopaid $930 million
to acquireClimateCorp., aweather-data-
mining companyinSan Franciscolaunched

by former Google Inc.executives.Agricul-
tural cooperativeLand O’Lakes Inc.bought
satellit e-imaging specialist GeosysinDecem-
ber foranundisclosed amount.
DuPont announced this month acollabo-
ration with aweather-and-market analysis
firm, DTN/TheProgressiveFarmer,topro-
vide real-time climateand market informa-
tion to DuPont’sdata-services users.
Late last year, Deer e &Co. agreed to
beam datafromthe Moline,Ill., company’s
green tract or s, combines and other machin-
erytocomputer serverswhereDuPont and
DowChemical Co.can formulatespecialized
seed-planting recommendations.
“When afarmer buysacombine or buys
atractor,they’vegot all these waystocol-
lect information,” says DuPont marketing
manager JoeForesman. TheWilmington,
Del., company’sPioneer unit has been sift-
ing through farm-level datafor about ade-
cade,but now“this spaceisstarting to ma-
ture. ”
DuPont and Monsantoare excited about
their data-driven services,partly because
they canberolled out to farmersmuch
faster than newseeds,which oftenmust en-
dureadecade of development and regulatory
review.
Manyfarmerswho have tried prescriptive

planting areenthusiastic about the results.
BY JACOB BUNGE
Ryan Donnell for The Wall Street Journal
*Doesn’tadd up to 100% due to rounding †Companywas later acquired Sources: ContextNetwork (marketshare); Monsanto(field analysis)The Wall Street Journal
The twobiggestcorn-seedcompanies got
even bigger in the past decade…
Bumper Crop
…and nowMonsanto, DuPont and othersare pitching
‘prescriptive planting’services to increase crops.
Corn-seed
market share*
Acornfield analysis in Iowa:
Howdata-driven planting
services work:
1. The farmer provides field
boundaries, historic crop yields,
soil conditions and other data to
acompany.
2. The companyanalyzes the
data and its owninformation
about seed performancein
differentareas and soil types.
3. The companysends a
computer file with
recommendations back to the
farmer,who uploads it into a
planter.
4. The farmer's equipmentthen
plants based upon the
recommendations. The company

monitors weather and other
factors, advising farmers on how
to manage crops as theygrow.
Circled areas: Lowernumber of seeds
per acrerecommended
Shaded areas (uncircled): Portions of
the field thatcan grow morecorn and
can takemoreseeds per acre
2004
DuPont: 33%
Monsanto: 14%
Garst: 6%†
Syngenta: 5%
Golden
Harvest: 4%†
Dow: 4%
AgReliant: 3%
Croplan: 2%
Fielders Choice: 2%†
NC+: 2%†
Wyffel: 1%
Beck’s: 1%
Crow’s: 1%†
2013
DuPont: 35%
Monsanto: 35%
AgReliant: 6%
Syngenta: 6%
Dow: 4%
Others: 23%

Others: 14%
David Nelson, afarmer
near Fort Dodge, Iow a,
whobegan testing a
technology-powered
planting servicecalled
FieldScripts about three
yearsago,saysit
recognizednutrients in
soil on apatch of land
previously used as a
cattle feedlot.
Mr.Nelson steps down from the cab
of his tractorcarrying the iPad thathe
uses to plan and implementhis corn and
soybean plantings on his farm
IN DEPTH
THE WALL STREETJOURNAL. Thursday, February27, 2014|21
Rolls-R oyce Holdings
PrepsNew JetEngines
LONDON—Rolls-Royce Holdings
PLC on Tuesda yunveiled details of
itsnextgeneration of engine designs,
which it hopes will be used to power
long-rangecommercial aircr aftfor
Airbus Group NV and Boeing Co.
TheLondon-based engine maker
is turning to geared-turbofan tech-
nologyfor the newengines.They are
designed to be moreefficient than

Rolls-Royce’ smost recent turbine en-
gine,the Trent XWB. Riv al Prat t&
Whitney,aunit of U.S based United
Technologies Corp ., pioneered the
technology.
Thefirst newengine,called the
Advance, is expected to be ready by
the end of the decade; the other,the
UltraF an, is to be ready by 2025.The
UltraF an is meant to build on the Ad-
vanceand offer about 10% betterfuel
consumption and emissions than the
Trent XWB.
Rolls-Royceisthe world’ ssecond-
largest maker of commercial and mil-
itaryjet engines afterGeneral Elec-
tric Co., theexclusivesupplier for
Boeing’scoming twin-engine 777X.
That jetisdue to enter servicein
2020.Rolls-Roycealso compet es
with Pratt&Whitney.
Rolls-Royce’sTrent XWBisthe
only engine used forthe long-range
Airbus A350,which is scheduled to
enter commercial servic ethis year.
Airbus Gr oup NV’schief executive,
TomEnders, said it wasinteresting
that Rolls-Royce had announced
plans forthe newengines.
“The pacemaker so far has al-

waysbeen the airframe manufac-
turer,” Mr.Enderssaid during an in-
terviewafter presenting Airbus’s
full-year earningsinToulouse,
France. “Wehaven’t made adecision
on re-engining anylong-rangeair-
craftyet.”
Rolls-Royceshiftedaway from the
market forsmaller engines that
powernarrow-body jetstofocus on
long-rangeengines forwide-bodied
aircr aftsuch as Boeing’ s787 Dream-
linerand Airbus’ sA380 superjumbo,
along with the A350.
Themovefollowedthe ending of
ajoint venturewith Pr att&Whitney
and adecision not to participatein
the Airbus A320neo (for “newengine
option”)modernization project.
Industryinsidersand analysts
have sug gested that Rolls-Royce’s
moveaway from the narrow-body jet
market wasshortsighted as demand
forthe short-to-medium-haul planes
likethe Airbus A320 family and the
Boeing 737series has triggeredin-
creasedrates in production from
both manufacturers.
Mr.Enderssaid that John Rose,
the predecessor of Rolls-Royce CEO

John Rishton, “effectively managed
them out of the single-aisle business
because he didn’t assessthe situa-
tion and our appetitefor the
A320neo corr ectly.”
Rolls-Roycesaid Tuesdayithad
moved away from but “not out” of
themarket and if an opportunity
came along to develop anew smaller
engine,itwould seriously consider it.
“But we don’t see that happening
until well intothe next decade,” a
spokesmanfor Rolls-Royce said.
Theengine companyhas long
been separat efromRolls-RoyceMo-
torCarsLtd., nowaunit of BMW AG.
—David Pearson
contributed to this article.
BY MARIETTA CAUCHI
Airbus is moving to speed production of its A320 single-aisle aircraft. Above,anA320 from AirMalta in 2012.
Reuters
RusalPlans to Build
Indonesian Refinery
JAKART A, Indonesia— Aluminum
producer United Co.Rusal PLC ac-
cepted Indonesia’scontroversial
movetorestrict the export of min-
eral ores and said it would build a
refinerytocomply with the coun-
try’snew laws.

Thelawshaveraised concerns
amongglobal mineral competitors.
But Rusal Chief ExecutiveOleg Deri-
paska said Indonesia’sstable econ-
omywould enable the countryto
makethe transition from mining to
higher-value processing.Rusal is the
world’slargest aluminum producer.
“I understand the government is
nowfacing pressures ,but Itruly be-
lievethis lawisawin-win and bene-
ficial in the long runfor the coun-
try,” Mr.Deripaska said.
In addition to the broad ore-ex-
port ban, Indonesiaisimposing a
progressiveexport taxfor mineral
concentrat es—rising each year until
hitting 60% by late2016—toforce
mining companies to refine the con-
centrat es .Coal is excluded from the
restriction list.
Copper companies Freeport-Mc-
MoRan Copper &Gold Inc., the big-
gest taxpayerinIndonesia, and
Newmont Mining Corp.havesaid
theobligation to processcopper
with higher purity levels waseco-
nomically unfeasible and viewthe
export taxoncopper concentrates
as abreach of their contractswith

the government.
Small domestic mining compa-
nies have pressured the government
to relax the rules,citing their lack of
financial resourcesand the potential
of thousands of lost jobs.
Though the export lawwas is-
sued in 2009,slowimplementation
led to abelief that the government
wouldn’t followthrough and compa-
nies held off on investing in pro-
cessing facilities.Ittook effect in
Januaryand companies arenow re-
alizing that the government is seri-
ous,Mr. Deripaska said.
“Ifyou introducethe ban and
then revoke it, the second time you
do it, people won’t believeyou,”
said Maxim Sokov, the firstdeputy
CEOofEn+ Group,Rusal’ssingle-
biggest shareholder.
Indonesia is amajor producer of
mining commodities such as nickel
ore, bauxite, tin, copper and thermal
coal. Thecommodity boom in the
2000sboosted mining,but small
margins—particularly forsmall local
mining companies—contributed to
land degradation that cost the gov-
ernment, Mr.Deripaska said.

Theban will help pareenviron-
mental costsassmall mining com-
panies curb production and sup-
port weak aluminum prices in the
medium term by lowering global
supply of ores,Mr. Deripaska said.
He warned that tight supply in
the physical market could push
deliverypremiums,the extracost
paid by buyerstohavethe
aluminum delivered, to morethan
$500 aton by the end of the second
quarter from $400-$450 aton
currently.
Thepriceofaluminum, used in
itemsasdiverse as beveragecans,
automobiles and aircraft, hovers
around $1,700 aton. That is down
from about $2,100 aton ayear ago
and well belowits mid-2008 peak of
nearly $3,500.
Mr.Deripaska forecast prices for
aluminum would rise to $2,500 a
tonand foralumina to between
$425 and $450 aton in the next 2.5
years, estimating that global de-
mand would rise 6% annually in the
next three to four years.
That growth rate represents3.5
million tons of additional demand

foraluminum, Mr.Deripaska said,
part of the reason that Rusal signed
amemorandum of understanding
Tuesdaytocreateajoint venture
with Indonesian company Arbaya
Energi to develop aprocessing fa-
cility that will turn bauxiteintoalu-
mina, an intermediaryproduct used
to producealuminum.
Rusal,based in Russia, didn’t
provide avalue forthe project.
Indonesia’scoordinating minister
foreconomic affairs, Hatta Rajasa,
said the project might represent an
investment of about $3 billion, with
about half of it forthe alumina
plant and another half forsupport-
ing infrastructure, such as roads,
portsand powerplantsinWest Kal-
imantan province.
“W e’ll conduct feasibility studies
by the end of this year and after
that, we canstart the project. The
construction phase usually takes
around 2.5years,” Mr.Deripaska
said. Theannual output might reach
1.5million tons of alumina.
Indonesiaisacountryofsome
17,000 islands and home to more
than 240million people,but much

of the countryisminimally
developed. “It’ sclear that Indonesia
needs industrialization,” Mr.
Deripaska said. “Domestic aluminum
consumption is about 700,000 tons
ayear.In10years, it cangoto2.5
million tons.Welikethis market.”
Indonesia’svast reserveof
thermal coal—used to generate
steam to help turn bauxiteinto
alumina—will makethe plant
efficient, he said.
Rusal in 2007 signed amemo-
randum of understanding with
diversified miner Aneka Tambang
to develop a1.2-million-ton alumina
plant but didn’t followthrough
because of the global financial
crisis.
BY ANDREAS ISMAR
BUSINESS &FINANCE
Airbus Turns BacktoSupporters
aircraftsales.But it has welcomed
this funding in the past.
Also irking the company, Ger-
manyrecently decided to scale back
itsordersfor Eurofighter combat
jets—which aremade by Airbus,
BAESystems and Italy’s Finmeccan-
icaSpA—because of domestic bud-

getpressures.Mr. Enderssaid this
contract is being renegotiated with
German authorities.
Airbus,meanwhile,ismoving to
speed production of itsA320 single-
aisle jet, afterposting astrong im-
provementin2013 earningsthanks
to asharp increase in aircr aftdeliv-
eries.
Themovetoaproduction rate of
46 A320s amonth from 42 starting
in 20 16 wasdictated by aswelling
Continued from page 17 order backlog forthe short-to-me-
dium-haulplanes that means that
airlines ordering noware unlikely to
getthem befor ethe end of the de-
cade.
Boeing is also ramping up pro-
duction of itscompeting narrow-
body 737family to 47 amonth by
2017from42inthe firsthalf of 2014.
Thecompanyhas been cautious
about raising A320 production be-
cause it didn’t want to strain its
supply chain when the companyis
preparing to launch are-engined
version of the plane in 2016 that has
already captured 2,610 orders.
Airbus reported a21% surge in
operating income beforenonrecur-

ring items—akey indicatorofthe
company’sunderlying perform-
ance—to€3.6billion on margin im-
provementsatthe company’scom-
mercial-aircraftdivision. Itsgroup
operating profit margin increased to
6%, still shyofthe 7% to 8% target
set for2015.
Revenue wasup5%at€59.3 bil-
lion, and net profit rose 22%to
€1.47 billion despite€913 million in
chargesthat included €434 million
againstnewly identified costsfor
theA350,which is due to go into
servicebythe end of this year.
Airbus wascautious on the out-
look for2014, saying it expectsa
“moderate” growth in operating
margin. It also said that the A350
programremained “challenging”
andthat anydelays could lead to
extraprovisions.The A350 is at its
most critical stageasthe manufac-
turing processgetsunder way.
The geared-turbofan
technologyisdesigned
to be moreefficient than
the company’smost
recent turbine engine.
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THE WALL STREETJOURNAL. Thursday, February27, 2014|13
David Nelson, afarmer near Fort Dodge,
Iowa,who began testing FieldScriptsabout
three yearsago, says it recognized nutrients
in soil on apatch of land previously used as
acattlefeedlot.
Theconclusion wasbased on fertilizer
maps and soil samples gathered by Mr.Nel-
son, 39.Monsanto’ ssystemsaid the land
could support denser rows of corn, and
FieldScriptshelped Mr.Nelson increase his

corn harvest last year by 8to12bushels an
acreabovethe 10-year averageof190 bush-
els.The increase brought Mr.Nelson an addi-
tional $34 to $51 an acre. “W e’r epushing ev-
eryacretoits maximum potential,” Mr.
Nelson adds.
Other farmersare reluct ant. TheAmeri-
canFarm Bureau Feder ation, atrade group
forfarmers, has warned membersthat seed
companies touting higher crop yields from
prescriptiveplanting have avested interest
in persuading farmerstoplant more. The
trade group also says the services might
steer farmerstobuy certain seeds,sprays
and equipment fortheir land.
JerryDemmer, a61-year-old corn and
soybean farmer near Albert Lea, Minn., is
thinking about trying adata-analysisservice
but has “tossed and turned” over who will
control the information. “It’sour data,” Mr.
Demmer says,but “I’m not surehow we’re
going to prot ect that.”
One reason that suspicions rundeep
among some farmers: asurge in seed prices
as the biggest companies piled up moremar-
ketshareduring the past 15 years, largely
through takeovers. Monsantoand DuPont
sell about 70%ofall corn seed in the U.S.
Last year,farmerspaid about $118 an acre
forcorn seed, up 166% from the inflation-ad-

justed cost of $45 an acrein2005,according
to estimates from Purdue University.
Companies saythe higher prices reflect
the benefitsofusing their genetically modi-
fied seeds,including biggercrops and resis-
tancetoinsectsand weed-killing sprays that
have helped reducethe usageofharsh pesti-
cides.
Mr.Fraley,the technologychief at Mon-
santo, says it also decides annual seed prices
based on seed supplies and commodities
prices.Datagathered by FieldScriptsaren’t
likely to be “a particularly big” factor in pric-
ing decisions,hesays.“We’ll priceour seed
the way we’vealways priced our seed.”
Mr.Foresman of DuPont says the com-
panydoesn’t use dataitcollectsfromfarm-
erstohelp set seed prices.
Battles with seed makersoverwho con-
trols the seeds produced by genetically mod-
ified crops makesome farmersevenmore
wary about sharing information with the
companies.
In 2012, DuPont hired Agro Protection
USAInc., an intellectual-property-pr otection
firm staffed largely by retired law-enforce-
ment officers, to watchfor signs of farmers
who aresaving second-generation seeds.
Saving the seeds violates licensing agree-
mentsfarmerssign when they buy seeds.

Monsantohas filed lawsuitsagainst
nearly 150 U.S. farmerssince1997 forre-
planting seeds that contain the company’s
propriet arycharacteristics.Last year,the
companywon aU.S.Supreme Court victory
in acase against an Indiana farmer who was
75 yearsold at the time.
Themost-worried farmersfear that
somehowrivals could use the datatotheir
ownadvantage.For example,ifnearby farm-
erssaw crop-yield information, it might spur
unwanted competition to rent farmland,
pushing land costshigher.
Other farmersfretthat Wall Street trad-
erscould use the datatomakebetsonfu-
tures contracts. If such betspush futures-
contract prices lowerearly in the growing
season, it might squeeze the profitsfarmers
otherwise could lock in fortheir crops by
selling futures.
So far,thereare no publicly known exam-
ples whereafarmer’s prescriptive-planting
information wasmisused. Monsantoand Du-
Pont officials saythe companies have no
plans to sell datagathered from farmers.
Deeresays it gets consent from customers
beforesharing anyoftheir data.
Kip Tom, 58,has been testing Monsanto’s
system on his 8,100-hectar efarm near Lees-
burg, Ind., forabout three yearsand says he

“would not plant 1acrewithout it.” He will
start paying forthe servicethis year.But he
keeps aclose eyeonhow dataflowfromand
to his farm machinery.
Last year,Mr. Tomunpluggedacable in-
side one of his combines ,which he worried
wascapturing details of his planting algo-
rithm as he harvested corn. Mr.Tom says the
combine’smanufacturer “didn’t have anyin-
volvementindevelopingthat intellectual
property or that information, so we didn’t
believethey should have access to that.”
Some farmershavediscussed aggregating
dataontheir ownsothey could decide what
information to sell and at what price. Other
farmersare joining forces with smaller tech-
nologycompanies that aretrying to keep ag-
ricultural giantsfromdominating the pre-
scriptive-planting business.
Theowner of one small company, Steve
CubbageofPrime Meridian LLC,says his
Nevada, Mo., company’sindependencefrom
the seed, machineryand chemical industry
“adds credibility,” giving farmersanalterna-
tivewith “their overall best interest sin
mind. ”
About 100 farmersuse Prime Meridian’s
precision-seeding service, and Mr.Cubbage
expectsthe number to “increase dr amatically
over the next few years.” Thecompanyisde-

veloping asystemtostore farm-by-farm in-
formation on acloud-computing servicethat
could giveaccesstoseed dealers, financial
advisersand other outsidersapproved by
farmers.
TheFarm Bureau has held internal talks
about whether the trade group should set up
itsown computer serversasadatastore-
house,says MaceThornton, aspokesman for
the trade group.Nodecision has been
reached.
Big companies “can help me in the short
term,” says Brian Dunn, 43,who grows
wheat, corn and sorghum on 1,000 hectares
near St.John, Kan. “But arethey going to be
my friend in the long term?” He uses Prime
Meridian’sservice.
Mr.Hurst, the Missouri farmer concerned
that seed companies will keep most of the
benefitsofprescriptiveplanting forthem-
selves,istesting DuPont’stechnologyon
some of his land to see what happens.
In amovetoease farmers’ worries,Mon-
santosaid last month that it supportsindus-
trywide standards formanaging information
collected from fields.The companyaims to
build afreeonline datastorehouse where
farmerscould upload information ranging
from crop yields to planting dates.Monsanto
says it wouldn’t access the datawithout per-

mission from farmers.
Mr.Fraley says Monsanto’sfarmer sur-
veys showthat the companyis“enjoying
the highest level of trust among our custom-
ersthat we’veeverseen.” Some farmers
“will be early adopters,” he says,while
“some of the folks aren’t going to open up
right yet.”
Mr.Nelson uses tractor-mountedcomputers to help makedecisions about his plantings. High-tech planting advicecould boost crop output by about $20 billion ayear,Monsanto estimates.
Ryan Donnell for The Wall Street Journal
IN DEPTH
20 |Thursday, February27, 2014 THE WALL STREETJOURNAL.
LinkedIn Updat es Profile,LookstoChina
LinkedIn Corp.wantstobethe
placewhereworkersofthe world
unite, but Wall Street isn’t con-
vinced it’sachieving itsgoals fast
enough.
In thepast week,the company
has unveiled two initiatives that
showChief ExecutiveJeff Weiner’s
ambition to turn the professional
networking siteintoaglobal bazaar
forfinding work,
recruiting ta lent
and keeping current
with industrynews.
LinkedIn said
last week that its
277million userscan nowpublish

theirown articles on the website, a
movethat potentially transforms a
person’srésumé intoaportfolio
with essays ,work samples,video
clips and employment history—and
fills LinkedIn’spages with free con-
tent.
And on Mondaythe companyun-
veiled aChinese-languageversion of
itssite. With the newsite, LinkedIn
aims to bring major Chinese employ-
ersand the country’s140 million
professionalsontoits networking
platform.
LinkedIn’slatestquarterly results
showedsteady,ifslowing,growth.
Thenew initiatives could help the
companystretch the amount of time
usersspent on the site, ameasure
whereithas laggedbehind competi-
tors likeTwitterand Facebook.Ac-
cording to comScore, visitorsspent
an averageof23minutes on
LinkedIn during the month of Janu-
ary, afigurethat has been largely
flat over thelast year.
In an interview, the 44-year-old
CEO discussed the company’slatest
moves,and his vision forapost-ré-
sumé world. Edited excerpts:

WSJ: Whoare LinkedIn’spotential
usersinChina?
Mr.Weiner: There’satleast three
waystothink about economic op-
portunity in China. One is Chinese
citizens—people living in China
looking foreconomic opportunity.
Asecond aremultinational [cor-
porations] looking to expand their
presenceand hirethe right talent to
do that successfully.
Andthen you’vegot companies
that have had significant success in
China that areexpanding and are
looking to identifyand hirethe right
talent to makethat expansion suc-
cessful…It’snot just about multina-
tionals doing businessinChina but
about successfulChinese companies
expanding their presenceonaglobal
basis.
WSJ: Hiring and recruiting in China
is very different from the U.S.;for
example,inChina, recruitersand
professionals aremoreopen about
salaries.How will LinkedIn adapt?
Mr.Weiner: That’sone of the rea-
sons we’resoexcited about Derek
Shen, who is our newly announced
president of LinkedIn China…that’s

what he’sbeen asked to do here.
He’sverymuch takenastartup
mentality and we’renot just going
to be localizing in terms of lan-
guage…but also thinking about how
we canbest meet the needs of our
membersinChina.
WSJ: Is thereconcern on the part of
the statethat Chinese nationals
could use LinkedIn as an organizing
tool?
Mr.Weiner: We’vebeen able to oper-
atenow in China foryears. Our vision
is well aligned with what the Chinese
government is trying to accomplish
right now: cr eating ec onomic oppor-
tunity in athriving middle class.
WSJ: Arethereany restrictions for
howpeople on mainland China can
access the site?
Mr.Weiner: Theremay be.We’re
expecting requeststofilter con-
tent. We arestrongly in support of
freedom of expression and we are
opposed to censorship but recog-
nize that in order to obtain ali-
cense [in China], therewill be re-
queststofilter content and that’s
going to be necessaryfor us to
achievethe kind of scale that we’d

like.
WSJ: Tell me howthat works.Will
someonefromthe Chinese govern-
ment be in regular contact with you
about what canand can’t go on the
site?
Mr.Weiner: This is the firsttime
we’reavailable in alocal languagein
China, and we just recently applied
forour license,sowe’regoing to
have amuch betterunderstanding in
the weeks and months ahead.
WSJ: Is the sitehosted in China?
Mr.Weiner: To date, it has not been.
ForLinkedIn membersoutside of
China, we will not be serving their
datafromwithin China. ForChinese
memberswho livewithin China,
we’ll be serving that data[from
China].
WSJ: Will aperson’ sessay or portfo-
lio eclipse the importanceoftheir
résumé?
Mr.Weiner: From my ownanecdotal
experience, when I’m meeting some-
one forthe firsttime,they’ll say:
‘Hey Iread yo ur latest influencer
post andthank yousomuch for
sharing,’ or ‘Here’swhat Ithought.’
In addition to reflecting who you

areasaprofessional, [an article] is
areally compelling way to engage
with other people and potentially
people that you’regoing to do busi-
nesswith. It’snot just about atitle
andadescription of yo ur job.It’s
aboutrich media, it’sabout avideo
of that keynote[speech] you
did…it’sabout the general contrac-
toruploading not adescription of
the dream house they just com-
pleted, but the pictures .It’ sabout all
the expertise and the experience
that you’vegained in that job that
you’rewilling to share.
WSJ: Updating your LinkedIn profile
is oftenread as asign that you’re
lookingfor work.Now you’vegot a
reason to updateitalot more. Will
that raise some eyebrowsamong
employers?
Mr .Weiner: People areupdating their
profiles when they’renot just look-
ing forjobs.Because of the way the
world works today, people seeking
to do businesswith youare going to
be doing asearch on your name.
Your LinkedIn profile is going to
showupatornear the topofthe
search results. That meansyou geta

chancetoput your best profes sional
foot forward, completely indepen-
dently of whetheryou’reseeking a
job.
WSJ: Is all of this newcontent going
to increase the amount of time indi-
viduals spend on the site?
Mr.Weiner: We actually generated
morepostsinthe firsttwo hoursof
the extension of this platform than
the team had forecast forthat entire
day…We’vecontinued to see asteady
stream of the volume of poststhat
has exceeded our expectations and
the engag ement on those postsare
doing very well.
WSJ: Advertising accountsfor about
aquarter of LinkedIn’srevenue.
With moreand morecontent, do you
expect ad revenue to increase as a
percentageofthe total?
Mr.Weiner: It’scertainly possible…I
think that will be in part driven
through engag ement and thr ough ef-
fortslikethe expansion of our pub-
lishing platform. We’vebeen having
some success with sponsored con-
tent and specifically sponsored up-
dates.
WSJ: Giveusaglimpse into

LinkedIn’slong-term future.
Mr.Weiner: With regard to net-
works,the goal thereistoconnect
allprofessionals and we’reabout
277million right now…Webelieve
the immediately addressable oppor-
tunity is 600 million professionals.
Longer term, the vision is to create
economic opportunity forthe three
billion people in the global work-
force.
We’remapping the global econ-
omy…aprofile forevery member of
theglobal workforce;aprofile for
everycompanyinthe world; every
job offered by those companies,
whether that’sfull time or tempo-
rary or for-profit or volunteer; every
skill required to obtain those jobs; a
presencefor everyuniversity or
higher education organization that
canhelp our membership acquire
theskills necessarytoobtain those
jobs.
BY REED ALBERGOTTI
LinkedIn CEOJeff Weiner, shown in September,saysthe company’slong-term vision is to create economic opportunity
forthe three billion people in the global workforce.The company’slatestresults showedsteady,ifslowing, growth.
Reuters
Huawei Tu rns Sights to U.S. Smartphone Mark et
BARCELONA—Locked out of the

lucrativeU.S.telecoms network mar-
ket, Hua weiTechnologies Co.now
has itseyestrained on America’s
smartphone sector.
HuaweiChief ExecutiveEric Xu
told reporter satthe Mobile World
CongresshereWednesda ythat the
Chinese company’sfocus will shiftto
the U.S. this year—afternot releasing
newdevicestherelast year—comple-
menting itspush in Europe and Asia.
“W e’regoing to makeachang e
this year,and we’regoing to con-
tinue to launch smartphones forthe
U.S. market,” said Mr.Xu, one of
three senior executiv es who rotate
through the CEO job.Mr. Xu is set to
hand the baton to Guo Ping by the
end of next month, under the com-
pany’s six-month rotating CEO sys-
tem.
Mr.Xusaid the companywon’t
trytochallengethe positions of Ap-
ple Inc.and Samsung Electronics Co.
in the U.S. Rather,the companysees
itself competing with the large num-
ber of manufacturersfighting for
market shareunder those two giants,
he said.
This week,Huaweitook the

wraps off several new, high-end
smartphones and tablets. One was
the seven-inch MediaPad X1—a ra-
zor-thin €300 ($412) tablet, powered
by Google Inc.’sAndroid operating
system, that itsexecutives repeat-
edly compared with Apple’shigh-end
iPad Mini.
Huawei’spush intothe largely
high-end U.S. market comes as sev-
eral devicemakerslikeNokia Corp.
and BlackBerryInc.are turning their
eyes to faster-growing,entry-level
smartphone marketsinplaces such
as Indiaand Af ric a. Wh ile Huawei
will continue to sell ultracheap An-
droid smartphones in these markets,
Mr.Xusaid the cheap phones aren’t
itsmain focus.
“W e’renot interested in the low
end of the market. Only by pursuing
high end canwepursue our growth,”
he said.
Consumer devices account foran
increasing part of the Chinese com-
pany’s revenue .Last year,they ac-
counted for23%, or about $9.1 bil-
lion, of itsoverall revenue,the
companysaid. This year,itaims to
increase smartphone sales to be-

tween 80 million and 100 million de-
vices,from50million last year.
Itsrangeoftabletsand smart-
phones largely runAndroid’ soperat-
ing system. Thecompanyhas also
joined with MicrosoftCorp.tomake
Windows Phone-powereddevices.
Sales of these haven’t been satisfac-
tory,Mr. Xu said.
Currently,Huawei’ssmartphone
sales largely stem from countries in
Asia. China alone accountsfor 40%
of the company’ssmartphone sales,
whileother major marketsinclude
theMiddle East and Africa, Latin
Americaand Europe.
In abid to improveits brand
awarenessinthe U.S.,Huaweilast
year signed several sponsorship
deals with the likes of U.S. pop stars
the Jonas Brothers. Thecompanyhas
also recruited several foreign execu-
tives to help it transition from alow-
cost maker of telecom equipment to
aglobal maker of itsown-brand
products. Those include Colin Giles,
aformer Nokia veteran, who now
runs the company’sconsumer group.
“F or sureweneed to build the
brand, we accept that, ” Mr.Giles said

in an interview. “Also we need to im-
provedistribution and getgood at
retail.”
That is allthe morechallenging
in the U.S.,wherelawmakershaveef-
fectively shut Huaweiout of the
wireless-equipment market. Acon-
gressional report in 2012 concluded
that Huaweiposed risks to national
security,alleging that the companies’
equipment could become avehicle
forChinese spying.The companyhas
called the report misleading.
—Sam Schechner
contributed to this article.
BY SVEN GRUNDBERG
BUSINESS &FINANCE
Huawei’ssmartphone
sales largely stem from
countries in Asia.China
alone accounts for 40%
of its smartphone sales.
14 |Thursday, February27, 2014 THE WALL STREETJOURNAL.
OPINION:REVIEW&OUTLOOK
T
he fight over democracyinHong
Kong took abrutalturn Wednes-
daywith the stabbing of journal-
ist Kevin Lau, aprominent critic of gov-
ernmentpolicy. Mr.Lau waschief editor

of the Ming Paonewspaper until his fir-
ing last month, which touched off pro-
testsoverthe decline of pressfreedom
and other civil liberties in the semi-au-
tonomous Chinese territory. He is now
hospitalized with life-threatening inju-
ries.
Theattack occurred in broad daylight
on asidewalk near Mr.Lau’sapartment.
Aman in ahelmet stabbed the journalist
six times beforeescaping on amotor cy-
cle driven by an accomplice. Policeare
reviewing security cameras forleads on
suspects. Hong Kong is an exceptionally
safecity,and random crime—especially
of this magnitude—is almost unheardof.
So suspicion that the attack waspoliti-
cally motivated is widespread and war-
ranted.
Such fearsare fueled by the victim’s
high profile as critic of the governments
in both Beijing and Hong Kong.Asedit or
of Ming Pao, Mr.Lau investigated the
suspicious 2012 death of former political
prisoner Li Wangyang, which Chinese
authorities called asuicide though it ap-
peared to be amurder.Healso recently
joined with the Int ernational Consortium
of InvestigativeJournal-
ists in exposing the off-

shorebank accounts
whereChina’stop leaders
stash their enormous fam-
ily wealth.
Mr.Lau wasaparticu-
larly strong opponent of the Hong Kong
government’ s2012 attempt—at Beijing’s
urging—toimpose aprogram of “na-
tional education” on public schools.
When Hong Kongerslearned that teach-
ing materials promoted the Chinese
Communist Party as a“pr ogr essiv e, self-
less, and united ruling group,” they
massed in protest and eventually forced
local officials to scrap the scheme.
AfterMr. Lauwas firedlast month
and replaced with aMalaysian journalist
who had supported “national education, ”
morethan 90% of Ming Pao’sstaff filed
apetition demanding an explanation.
Four columnistsprotested by leaving
their spaces blank—among them Demo-
cratic Party founding chairman Martin
Lee—while some 110 staffersdressed in
black and held asilent
protest outside the news-
paper’s office.
Theattack on Mr.Lau
is especially alarming
because it’spart of a

pattern. Recent years
have seen aspateofphysical attacks on
Hong Kong media critical of China’s
ruling Communist Party and itslocal
allies.These include the baton beating
of iSun Affairspublisher Chen Ping, the
theftand burning of some 20,000 cop-
ies of Apple Daily newspaper,and the
failed attack on the home of Apple
Daily ow ner JimmyLai. Manysuch
cases go unsolved. Police“can’t chase
people into mainland China,” Mr.Lai
hassaid, “and that is wherethese at-
tacks come from.”
This pattern of violence—along with
the recent firing of Mr.Lau and others—
brought an estimated 6,000 Hong
Kongersintothe street fora“Free
Speech, Free Hong Kong” rally on Sun-
day. In the wake of Wednesday’sstab-
bing,tens of thousands could mar ch this
weekend.
Hong Kong’schief executive, Leung
Chun-ying, denouncedWednesday’sat-
tack as a“savage act” and visited Mr.
Lauinthe hospital. “Hong Kong is alaw-
fulsociety and we will not toleratevio-
lence,” he said.
Perhaps Mr.Leung re alizes that any
appearanceofpolitical violencethreat-

ens Hong Kong’ sreputation forcivic and
commercial freedom, along with Bei-
jing’sreputation both among the terri-
tory ’s citizens and global investors.
Bringing swiftand transparent justiceto
the attacker and anyone who mayhave
participated in Wednesday’sstabbing is
the only way to start restoring that rep-
utation.
J
ohn Dingell announced on Monday
that he plans to retirefromthe
U.S. House of Representatives at
the end of this Congress, and his initial
parting shot came with unusual ill-
grace. “I find serving in the House to
be obnoxious,” the 87-year-old told the
Detroit News.“It’sbecome very hard
because of the acrimonyand bitte r-
ness, both in Congressand in the
streets.”
TheDemocrat from southeastern
Michigan wasfirst elected in 1955 and
never served in the minority until after
the GOP sweep of 1994. He wasamong
those who,Congressafter Congress,
steadily built the modern administra-
tivestate with itsvast powers to re-
distributeincome and regulatetopun-
ish or reward companies.

In hispolitical heydayasChairman
of the Energy and Commerce Commit-
teeinthe 1980s,Mr.
Dingell liked to boast
that his writ extended to
everycorner of the
American economy. He
wasn’t far off.Yet when
all economic and cultural
questions become political, is it any
wonder that politics becomes moreac-
rimonious?
Mr.Dingell mayhaveintended his
“obnoxious” barb at the teaparty and
Americans angrywith Washington, but
most of those people don’t knowhow
to maneuver through the corridorsof
power. They can’t affordtohiresome-
one from “the Dingell bar,” the name
adoptedwith an almost civic pride by
the Washingtonlawyerswho were well
paid forrepresenting
businesses caught in the
Dingell investigative
cross-hairs. Manywere
hisformer staffers.
The“Dingell method,”
another phrase from the
era, wastoconduct an investigation,
selectively leak what his staff found to

anewspaper and TV network (double
the media points), then haul the poor
business targetsfor apublic grilling
before the cameras.The journalists
would win prizes forthe appearanceof
enterprise.The CEOs would be advised
by the Dingell bar to be obsequious
and remorseful whether guilty or not.
Theacrimonywas one-sided.
Theiro ny of Mr.Dingell’slater
yearsisthat he waspushed aside by
younger liberals from the Watergate
generation likeHenryWaxman and Ed
Markey. Mr.Dingell represented car
makersand the United AutoWorkers,
which oftenmade him lessideological
on environmental regu lation and cul-
tural issues.
Forthose sins,Democratsdeposed
him as committeechairman in 2008 in
favorofMr. Waxman, who recently an-
nounced that he will also retireatthe
end of this Congress. If he and Mr.
Dingell areunhappy with our current
politicaldistemper,they might con-
sider that this is the House they built.
B
ipartisan achievementshavebeen
rare sinceRepublicans took the
House in 2010 ,but one of them was

the 2012 reform of federal flood insur-
ance.Ameretwo yearslater,House Re-
publicans want to abandon their work and
expand the middle-class
subsidy on thebacks of
taxpayers.Where’sthe tea
partywhen youreally need
them?
Thegoal of the Biggert-
Waters reform of 2012 was
to requirethat property
ownersgradually adjust to
paying actuarially sound ratesfor tax-
payer-backed flood insurance. Millions of
Americans have long paid below-market
ratestocover their shoreline homes,leav-
ing the National Flood InsuranceProgram
under waterbysome $24billion after
Hurricanes Katrina and Sandy.The federal
program has $1.3trillion in outstanding
insurance, though privateinsurersprovide
flood coverage forlosses abovethe federal
$350,000 limit and areeager to do more.
Under the reform, already-subsidized
vacation homes,businesses and “severe
repetitiveloss” properties would see pre-
miums rise 25% per year until they paid
actuarial rates. Ownersofprimar yresi-
dences with federal flood insur ancewould
see no changeunlessthey

sold their home,inwhich
case the newhomeowner
would paythe actuarial
rate.
Biggert-Watersalso in-
structed the Federal Emer-
gencyManagement Ag ency
to collect morerefined
datawhen it conductsits periodic remap-
ping surveys. This newinformation, such
as current elevation levels,would help the
federal flood insur anceprogram moreac-
curat ely pricepremiums.Property owners
would paynew rateswhen the maps were
done,aprocess which could take three to
five years.
Even these modest priceincreases
were toomuch forbeach-side mansion
ownersand the Realtorswho want to sell
those homes,and so they descended on
Congresstodemand repeal. Michael
Grimm of NewYork City’s StatenIsland
has led the charge forrepeal, and the
House will vote on his bill as early as
Wednesday.
He proposes to limit the breadth of
FEMA’sremapping (which hasn’t even be-
gun), repeal the home-sale triggersonew
ownersdon’t payhigher rates, and retr o-
actively refund premiums forproperties

sold sinceJuly 6, 2012. Some 700,000 of
1.1 million coveredproperties would enjoy
taxpayersubsidies in perpetuity.
To (ostensibly) payfor this,the
Grimm bill would impose asurcharge of
$250 on allbusinesses and non-primary
residences with federal flood insurance
and $25 forprimaryresidences.So, say,
the Michigander who lives on alakebut
haslittle risk of flooding would foot the
bill foraPalm Beach mansion. FEMA
would have lessinformation by which to
charge sound premiums.Wewould be
back to the futureofencouraging more
people to liveinflood zones with tax-
payers socializing the hurricane risk.
SenateDemocrats, who passed abill to
delayBiggert-WatersinJanuaryinthe
face of similar political pressure, would
jump at the chancetoexpand this middle-
classentitlement. They also don’twant to
facethe fact that the federal progr am’sfi-
nances can’t be fixedwithout charging
market rates.
Political discredit herealso goes to
House GOP leaders, who chose to dodg e
the regular legislativeorder that Speaker
John Boehner promised in 2011. He is let-
ting Mr.Grimm’sbill avoid vetting in
committeeand is bringing it directly for

aquick and dirty floor vo te.IfSenator
TedCruzand HeritageAction arelooking
forsomething of substancetorebel
against, this is it.
Who Stabbed Kevin Lau?
TheHouse That John Built
Flooding Capitol Hill
ThedeanofCongress
sa ys he’ll retirefrom
the bodyhemade.
Hong Kong’sbattle
fordemocracy
takesabrutal turn.
Republicans cave to
the Realtorson
taxpayer flood
insurance.
Comments? TheJournal welcomes
readers’ responses to
all articles and editorials.Itisimportant to
include your full name,addressand
telephone number.Please send letters to
the editor to:
THE WALL STREETJOURNAL. Thursday, February27, 2014|19
BUSINESS &FINANCE
ABInBev NetGet sBoost
FromGrupoModeloCuts
LEUVEN,Belgium—Anheuser-
BuschInBev NV is taking itscost-
cutting knifetoGrupo Modelo SAB,

the Mexican breweritacquired con-
trol of last year.
AB InBev,the world’slargest
brewer, said Wednesdaythat it has
already managed to shave hundreds
of millions off the brewer’sannual
costssinceitcompleted the $20 bil-
lion purchase of the half of Grupo
Modelo it didn’t already ownin
June last year.
ThebrewerofBudweiser,Stella
Artois and Bud Light also posted a
45% increase in fourth-quarter
profit, driven in part by cost cutting
at GrupoModelo.
Thegain came despiteweak beer
sales throughout much of AB In-
Bev’s brewing empire, reflecting the
still-shakystate of the global econ-
omy. Volume sold by the co mpany
fell 2% in the most recent quarter,
compared with ayear earlier.
AB InBev’s fourth-quarter net
profit totaled $2.52 billion, up from
$1.74 billion ayear earlier.Several
one-time items helped the latest re-
sult, including the return of excess
funds that the companyhad contrib-
uted to itsemployee-retirement
plan in Brazil. A15% decline in fi-

nancing costsalso contributed to
the improved profit.
Shares in AB InBev rose 2.8% to
€76.34 ($104.93) in Br ussels.
“In extreme marketswith hic-
cups,they managed to perform
well,” said Kris Kippers, an analyst
at Petercam in Brussels.“It is strik-
ing howdifferent they arefrom
their colleagues.”
Heineken NV and Carlsberg A/S
have struggled to increase profitsin
the faceofflagging beer sales.
AB InBev’s revenue rose slightly
to $11.71 billion, from $11.62 billion.
Thelatestresult wasmainly attrib-
utable to revenue growth in Brazil,
wherepriceincreases and strong
salesofpremium beershelped off-
set bad weather andhigh food-price
inflation that sapped the public’s
disposable income.
In Mexico, earningsbeforeinter-
est, taxes, depreciation and amorti-
zation rose 44% to $575million.
Thebrewersaid it achieved $360
million in annual synergies from
Grupo Modelo in the final seven
months of last year.
Afurther $75million came from

applying AB InBev’s cost-cutting
techniques beforethe deal had been
officially completed. Those tech-
niques involvescrutinyofeach bud-
getitem. Theprocess requir es man-
agerstojustifyevery cost anew. The
companyalso uses itssignificant
sizetonegotiatefavorable deals
with suppliers.
AB InBev management is hoping
to achieve$1billion in annual cost
cutsbythe end of 2016 at Grupo
Modelo.Analystssay the company
might managetoachieveall those
savingsbythe end of 2015.
TheU.S., AB InBev’s big gest mar-
ket, wasaweak spot. Volume in the
brewer’sNorth American division,
which is mainly the U.S.,fell 1.8% in
the fourth quarter and 2.4% over all
of 2013.“We expect an improvement
in the industryvolume trend in
2014,driven by astronger econ-
omy,” Chief Financial Officer Felipe
Dutrasaid.
Theyear is off to arough start,
because of heavy snowfall in the
U.S.,Mr. Dutrasaid.
ThesoccerWorld Cup in Brazil,
AB InBev’s second-largest market, is

likely to help sales. Thecompanyes-
timates the event could boost vol-
umes by one to two percentage
pointsinBrazil forthe year.
AB InBev al so planstosell Co-
rona, Grupo Modelo’s main beer,in
moremarketsoutside Mexico. “It is
averyexciting brand,” Chief Execu-
tiveCarlos Britosaid.
BY MATTHEW DALTON
AB InBev,led by CEOCarlosBrito, above,posteda45% gain in quarterly profit.
Reuters
Sales Go Flat
Anheuser-Busch InBev's sales volume by region, in millions of hectoliters
The Wall Street JournalSource:the company
0 12525 50 75 100
North America
Latin America North
Asia Pacific
Latin America South
Western Europe
Mexico
Centraland Eastern Europe
Global export and holding companies
2013
2012
Westfield We ighs
St ock-Listing Spot
SYDNEY—Westfield Group,one
of the world’slargest ownersof

shopping malls,said it maylist in
theU.S.orLondon afteraplanned
breakup of itsglobal mall empire.
Theseparation plan is expected
to tie the company’sfortunes more
closely to glitzy newprojectssuch
as aretail wing of NewYork’sWorld
Trade Center.The 95-year-old com-
panymay firstneed to overcome
some investors’ concerns,though,
aboutthe terms of adeal that will
have it jettisoning manyolder prop-
erties to focus on tonier develop-
mentsinLos Angeles and NewYork.
“We’regoing to look at listing
thecompanyinNew York,London
or hereinAustralia—all of them are
under consideration,” Westfield
Group Chief ExecutivePeter Lowy
said in an interviewWednesday.
Thebreakup plan, disclosed in
December,calls forWestfield to sell
itsremaining 50% interest in Austra-
lian and NewZealand malls to West-
field Retail Trust,which wasformed
in 2010 to house itsmore-maturelo-
calassets. Thelisted trust, to be re-
named ScentreGroup ,will own47
malls in Australia and NewZealand,
leaving Westfield Group with 39 cen-

ters in the U.S. and five in the U.K.
and Europe valued at $18 billion.
Thedeal aims to unlock the
value of itsU.S.and European as-
sets, which have ahigher proportion
of newdevelopmentsand thus more
upside potential. Theproperties in
Australia, wherethe Lowy family
startedthe companyin1959,are
seen as moreofastable yield play.
Shareholdersare due to vote on
the plan in May. Westfield Group
shareholderswill get1,000 shares in
the newWestfield Corp.and 1,246
shares in Scentr eGroup forevery
1, 000 shares in Westfield Group that
they own. Shareholdersinthe retail
trust will getacombination of cash
and shares,terms some investors
have suggested mayneed to be
sweetened to win their endorsement.
“A number of large investorshave
expressed their opposition to the cur-
rent terms,” said Winston Sammut,
managing director of Sydney-based
fund manager Maxim Asset Manage-
ment,which owns shares in both
Westfield and Westfield Retail Trust.
“I’m aware anumber of medium-
sized institutional investorsare also

of thesame mind. It’snot over yet.”
Mr.Lowy playeddownthe pros-
pect of an amended deal. He said re-
cent talks among management and
investorshad been positive.
Westfield on Wednesdayre-
ported anet profit forthe year
through December of 1.60 billion
Australian dollars(US$1.44 billion),
down 6.7% from the previous year.
Hurt by the slowergrowthpro-
file of itsolder malls and the end of
along mining boom in Australia,
which has shaken consumers’ confi-
dence, Westfield returned atotal of
just 31% over five years, compared
with over 250% forSimon Property
Group Inc.and Taubman Centers
Inc., according to SNL Financial.
ThecompanyWednesdaysaid it
would sell another batch of U.S.
malls valued at about US$1 billion.
BY ROSS KELLY
Rubenstein Doubtful Over
Bu yout-Shop TaxChange
BERLIN—Carlyle Group LP co-
founder David Rubenstein said U.S.
lawmakersare “unlikely” to take up
legislation this year that could po-
tentially increase taxesondeal prof-

itsreaped by private-equity
managers.
Mr.Rubenstein’scommentscame
afterthe chairman of the U.S. House
Ways and Means Committee, Repub-
lican Dave Camp of Michigan, said
Congressshould “clean up” the
treatment of private-equity firms’
shareofdeal profits, called “carried
interest.” These profitsare cur-
rently treated as capital gains and
taxedatalowerratethan ordinary
income.
“W ecan clean up provisions like
carried interest that allowcertain
private-equity firms to getthe in-
vestment-income taxrateonwhat
anyone else would call normal wage
income,” Mr.Camp said in an opin-
ion piecepublished Wednesdayin
TheWall Street Journal outlining a
series of tax-reform proposals.
But Mr.Rubenstein, whose firm
is based in Washingtonand who is
oftenviewedbyprivate-equity
watchersasanauthority on national
politics,said various factorswould
likely preventany measures from
taking hold anytime soon.
Montana Democrat Max Baucus,

previouslythe chairman of the Sen-
ateFinanceCommittee, wasjust
confirmed as the U.S. ambassador to
China, lowering the chances that
chamberwill ta ke up such legisla-
tion, Mr.Rubenstein said. In addi-
tion, aterm limit will force
Mr.Camp to relinquish his commit-
teechairmanship in the House next
year,hesaid.
“It’sunlikely that will ge tinto
law,” Mr.Rubenstein said of
Mr.Camp’ sproposal beforeanaudi-
enceatthe SuperReturn Interna-
tional private-equity conferencein
Germany’scapital. “I don’t think
thereislikely to be anytax-reform
legislation passed by this Congress
at all.”
Private-equity -firm managers, in-
cluding Mr.Rubenstein and found-
ersofother large buyout firms,have
argued that carried interest they re-
ceiveafter investing in acompany
and later selling it should be treated
as acapital gain. Proponentsoftax-
ing these profitsatahigher rate
contend the money is compensation
forservices private-equity managers
render when working on companies

they take private.
Thecarried-interest debatebub-
bled up in the wake of the recession
and financial-overhaul lawlater
takenuponCapitol Hill. But the is-
sue so far hasn’t been addressed in
anylegislation passed by Congress.
Still, manyprivate-equity manag ers
expect at some point to receivethe
more stringent taxtreatment.
Meanwhile, Mr.Rubenstein said
sovereign-wealth funds will soon
become the largest contributorsof
investment capital to private-equity
firms,surpassing giant pension
funds.Sovereign-wealth funds cur-
rently manageabout $5 .4 trillion, a
number that will exceed $8 trillion
by 2020,hesaid.
BY MIKE SPECTOR
Veolia CEOWins Backing From Board
PARIS—Veolia Environnement
SA’s boardWednesdayendorsed
Chairman andChief ExecutiveAn-
toine Frérot, marking the second
time in two yearsthe head of the
waterand wasteutility has success-
fully resist ed pressur etostepdown.
Subject to shareholder approval
in May, the boardsaid it would ap-

point Mr.Frérotfor four more
years.
Thedecision representsavictory
forthe executive, who had come un-
der pressurefromone of the group’s
biggest shareholders, the Dassault
family,which owns a6.3%stake.
Veolia has been hardhit by the
economic crisis in Europe,which
has eaten intoits long-term financ-
ing while calling intoquestion some
of itsmost profitable wasteand wa-
tercontractsinEurope.The utility
hasmoved to restructureits busi-
nesses and geographical exposure,
while selling some assetsinthe U.K.
and the U.S.
Veolia shares aretrading at a
fifthoftheir value six yearsago.
Against this backdrop,Dassault
shareholderspushed forachangeof
leadership,according to aboard
member andpeople familiar with
the matter. “The Dassault family has
been frustrated with the returns,”
theboardmember said.
Thedissent against Mr.Frérot
wasfirst reported earlier this
month by French magazine Le Point,
which said Dassault shareholders

were seeking to replaceMr. Frérot
with David Azéma, asenior official
currently managing the French
agencythat oversees government
stakes in privatecompanies.
But on Tuesday, Mr.Azéma told
Reuters he was“not acandidatefor
the position.” Mr.Azéma didn’t re-
spond to several requestsfor com-
ment.
TheFrench government, Veolia’s
largest shareholder with a9.3%
stake, wasset to support Mr.Frérot
at Wednesday’sboardmeeting,the
boardmember said.
Mr.Frérotalready faced an at-
tempt to unseat him two yearsago
with pressurefromsome members
of the board. In the end, the board
endorsed Mr.Frérotand his strate-
gic plan.
BY GÉRALDINE AMIEL
AND INTI LANDAURO
THE WALL STREETJOURNAL. Thursday, February27, 2014|15
OPINION
Afew hoursafter acolorful
closing ceremonyofthe Sochi
Olympics,which were intended as
ashowcase foramodern and self-
confident Russia, acourt in Mos-

cow sentenced agroup of opposi-
tion activiststoprison terms
ranging from two to four years.
Their “crimes” all involved protest-
ingPresident Vladimir Putin’sin-
auguration at arally in Bolotnaya
SquareinMay 2012.
Monday’sverdict prompt ed a
street demonstration, which was
violently broken up by Russia’sspe-
cial riot policeknown as the OMON.
Hundreds of prot est ers—ac cording
to official figures—weredetained
and hauled away to policestations.
They included opposition leaders
Alexei Navalnyand Boris Nemtsov,
who were sentenced, respectively,
to seven and 10 days in jail on the
charge of “disobeying the authori-
ties.” Thearrest of Mr.Nemtsov,an
elected regional assemblyman, ap-
pearstobeindirect violation of a
Russian lawthat limitsprosecution
of elected legislators.
Moscow’s renewedcrackdown
heralds the end of ashort-lived
Olympic reprieve, which brought
the release of anumber of political
prisoners. It’snow areturn to
businessasusual forthe Kremlin.

Theintentionally harsh sentences
forthe Bolotnaya Squareprison-
ers, and the arrestsofthose who
raised their voices on their behalf,
aremeant to serveasawarning
and to prevent the reemergenceof
street prot estsagainst Mr.Putin’s
corrupt and undemocratic rule.
It is no coincidencethat this
crackdown came days afterthe vic-
tory of apopular uprising against
Mr.Putin’sclient regime in
Ukraine—a regime that tried to
emulatethe Kremlin’ssystemof
cronycapitalism and authoritarian
control. Vladimir Putin, it seems,
has drawnprecisely the wrong les-
sons from the success of Ukraine’s
Maidan movement. TheKremlin
faultsViktorYanukovychnot for
killing his ownpeople,but fornot
killing enough of them.
Forweeks Russian television
stations have carried hate-filled
appeals to crush the protestersin
Kiev.Russian Prime Minister
DmitryMedvedev’spublic advice
to Mr.Yanukovychwas to not be a
“doormat people wipe their feet
on. ” All this has leftlittle doubt as

to the Kremlin’sthinking: In Mos-
cow'sview, the eventsinUkr aine
amount to aWestern-inspired coup
d’état—similar to the one that, by
the Kremlin’sparanoid reasoning,
almost succeeded in Russia during
the massprotestsof2011 and
2012. Hencethe harsh sentences
forthe Bolotnaya prisoners—a
messagethat Mr.Putin, unlikeMr.
Yanukovych, will not be a“door-
mat. ”
ForVladimir Putin, maintaining
the status quo in Ukraine wasnot
primarily about preserving apost-
Soviet sphereofinfluenceorrecre-
ating aMoscow-led empire—al-
though such outcomes would have
been added benefits. His principal
fear is that ademocratic,pro-Eu-
ropean Ukraine—a countrywith
similar cultural, linguistic and reli-
gious traditions—will set a“dan-
gerous” precedent forRussia, and
that it will be only amatteroftime
beforeRussian citizens begin to
demand asimilar level of political
and economic freedom.
Theuncomfortable truth forthe
Kremlin is that the underlying rea-

sons forUkraine’suprising arealso
present in Russia. Arecent survey
by the independent pollster Levada
Center showedthat only 22%of
Russianswant Vladimir Putin to
remain president beyond his cur-
rent term—a rather unimpressive
figure forsomeone who controls
the messageonevery single na-
tional television network.Evenac-
cording to official numbersfrom
the flawed2012 presidential elec-
tion, Mr.Putin has lost majority
support in Moscow,Kaliningrad,
Vladimir,Omsk,Vladivostok and
other major population centers
acrossthe country.
In the 2013 mayoralelection in
Moscow—the firstimportant poll
in yearsthat had asemblanceof
competition—Mr.Navalny, one of
the opposition leadersarrested on
Monday, came from nowhereto
win 30% of the vote.While Russia’s
traditionalist and lesseconomi-
cally and technologically developed
regions still provide Mr.Putin’s
party with votes, educated, mod-
ernized, urban middle-classRus-
sians increasingly reject an archaic

political system based on nepo-
tism, repr es sion and international
confrontation. Russia’sdynamic is,
in this way,not unlikeUkraine’s
East-W est political divide.
Awise statesman would pre-
parefor inevitable changebygrad-
ually expanding his country’spolit-
ical spaceand allowing for
increased competition, both in the
media and at the ballot box. In
opting forincreased repression,
Vladimir Putin—while denouncing
the uprising in Ukraine—is doing
everything to produceone in Rus-
sia.
Mr. Kara-Murza is aleader of the
People’s Freedom Party, ademo-
cratic opposition party in Russia.
Apoliceofficer detains aprotesteroutside the Moscow court on Feb. 24.
Associated Press
TheEnd of Russia’sOlympic TruceonDissent
BY VLADIMIR V. KARA-MURZA
As Ukrainians mourn their dead
and vow to prosecut etheir re-
cently deposed leader,the valor of
those who died must nowinspire
otherstobuild anew Ukraine wor-
thyoftheir struggle and sacrifice.
Democracyand abetterfuture

must be secured in pragmatic
terms.Economic benefitsmust be-
gin to flow in tandem with
Ukraine’snascent commitment to
genuine self-government and re-
sponsibility.
Europe and the U.S. arerushing
to put together billions of dollars
in financial aid forUkraine,keenly
aware that they have been granted
asecond chance. Last November’s
potential trade deal with the Euro-
pean Union wasscuttled when
Ukraine turned to Russiaatthe
last moment foreconomic suste-
nance.
But if effortstoforge anewly
generous packageget boggeddown
in trans-Atlantic negotiations and
the institutional requirementsof
the International MonetaryFund,
the moment to help Ukraine gain a
solid economic footing maybe
lost. And should itscurrency, the
hryvnia, meanwhile succumb to
panic and meltdown, the opening
forfreedom maybesquandered.
Themost expedient way to es-
tablish asound-money founda-
tion—in keeping with Ukrainian as-

pirations foranindependent
nation capable of succeeding in the
global economy—would be to initi-
ateacurrencyboard.
Currencyboards helped launch
the free-market reforms and bud-
getary discipline that liftedformer
Soviet republics Estonia and Lithu-
ania out of the wreckageofcentral
planning in the early 1990s.
Slumped production gaveway to
economic growth and financial sta-
bility afterEstonia replaced the
hyperinflating Soviet ruble with its
owncurrency, the kroon, anchored
by the German mark in June 1992.
Lithuania opted to fixits currency,
the litas,tothe U.S. dollar when it
adopted acurrencyboardinMarch
1994; capital inflows amounting to
almost 7% of GDP poured intothe
countrythat same year.
Acurrencyboardfor Ukraine
could obtain similar results. It
would provide asolid platform for
effectively utilizing financial assis-
tanceand thereby shoreupfragile
hopes forimproved economic
prospects.
Howwould it work? Acurrency

boardisanexchange-ratearrange-
ment whereby the monetaryau-
thority is required to exchangelo-
calcurrencyfor the foreign anchor
currencyatafixed exchangerate.
Absolute, unlimited convertibility
must be maintained to ensurethat
all holdersofthe nation’snotes
and coins canconvert them into
the anchor currencyondemand;
this is best achieved by holding re-
serves equal to 100% of the na-
tion’smonetarybase or slightly
more.
Under acurrencyboard, there
is no central bank to intervene in
foreign-exchangemarketsorma-
nipulateinterest rates. “By design,
acurrencyboardhas no discre-
tionarymonetarypowers and can-
not engageinthe fiduciaryissue of
money,” according to SteveHanke,
professor of economics at John
Hopkins University.“Itsoperations
arepassiveand automatic.”
This turns out to be agreat vir-
tuefor an emerging-market coun-
tryseeking to gain the confidence
of citizens and establish credibility
with outside investors. If Ukraine

were to willingly embracethe dis-
cipline and accountability inherent
in acurrencyboard, it would send
asignal of economic self-assurance
and underlying faith in the produc-
tivepotential of itspeople.
Thechoiceofanchor currency
is totally voluntary. Ukraine’scen-
tral bank has long targeted the dol-
lar in trying to managethe ex-
changeratevalue of the hryvnia,
so it might wish to formalizethe
dollar anchor in itscurrency
board. People arefamiliar with the
dollar as areferencepoint of value
forthe hryvnia.
Thecurrent problem is that
Ukraine’scentral bank has used a
crawling-peg approach, which can
no longer be sustained. Nothing
prevent sthe hryvnia nowfrom
sliding intooblivion. TheKiev Post
reportsthat individuals and com-
panies seeking to convert bank de-
positsintohardcurrencymust
wait six working days to do so.
While the EU,the U.S.,and the
IMF acknowledgethat Ukraine’sfi-
nancial situation is dire, they have
not put forwardaplan to quickly

addressthe deterior ating currency
situation. Thejoint statement is-
sued on MondaybyU.S.Treasury
Secret aryJack Lewand IMF Man-
aging Director Christine Lagarde
offered the vaguepromise that “if
afully established government in
Ukraine makes arequest, then the
IMF would provide the best foun-
dation foreconomic adviceand fi-
nancing.”
Catherine Ashton, the EU’sfor-
eign-affairschief ,islikewise turn-
ing to the IMF as the arbiter of aid
forUkraine.She is keenly aware,
no doubt, of the difficulties of get-
ting a28-nation bloc to move
quickly to help itsneighbor.
But canUkraine wait? And what
happens to the hryvnia in the next
10 days?IfanIMF progr am for
comprehensiveeconomic reform is
present ed to adestabilized Ukraine
weeks down the road, disillusion-
ment will have already start ed to
take hold.
And then thereisthe danger
the IMF will do moreharm than
good. If it imposes itsusual for-
mula of budgetaryausterity and

currencydevaluationasacondi-
tion forWestern loans—plus in-
sistsonraising the priceofnatural
gastoUkrainian homes and indus-
tries—it will spur further tension
within an already divided popula-
tion.
Amuch betterstrategyfor
Ukraine would begin with the im-
mediatecreation of acurrency
boardanchored by the dollar.For-
eign investment would start to
contributedirectly to the solid
growth of amonetarybase on
which to build afunctioning econ-
omy.
If Ukraine chooses to switch to
the euroatsome point in the fu-
ture, as Estonia did in January
2011 and Lithuania plans to do in
2015,itwill be afurther boon to
full European integration. Indeed,
it will testifytothe dedication and
resolveofUkrainians to embrace
the responsibilities—along with
the benefits—of free marketsand
democratic values.
But firstUkraine must get
through this perilous period. Fix-
ing the hryvnia to the dollar is the

fastest way to restoreUkrainians’
faith in their money.
Ms. Shelton, author of “The Com-
ing Soviet Crash” (Free Press,
1989) and “Money Meltdown”
(Free Press, 1994), is asenior fel-
low at the Atlas Economic Re-
search Foundation.
If the hryvnia succumbs to panic and meltdown, the opening forfreedom may
be squandered.
Getty Images/AWLImages RM
ACurrencyBoard forUkraine
BY JUDY SHELTON
Ukraine’suprising fans
Putin’s fears of losing
control overRussia.
18 |Thursday, February27, 2014 THE WALL STREETJOURNAL.
by howpoorly Western markets are
doing,” said Mr.Goings. “It’sdriven by
wherethe people are.”
In the fourth quarter of 2013,
Tupperware’snet sales rose 1% to
$717 million, while earnings rose 20%
to $89.7 million, as strength in
emerging markets offset weaknessin
developed countries such as the U.S.
Emerging markets made up 63% of
Tupperware’ssales in the latest
quarter.
Indonesia is Tupperware’slargest

market. In the fourth quarter,
Tupperware’ssales thereclimbed 33%.
Sales in China were up morethan 20%
and sales in Brazil up 19%.
Kathy Chu
 CONSUMER GOODS
Tupperware Expects ItsSales
To RiseinEmerging Markets
TupperwareBrands Corp. Chief
ExecutiveRick Goings said Wednesday
he expects at least80% of the
company’srevenue to come from
emerging markets by 2019, up from
about 60% in the fourth quarter,
driven by aswelling middle classin
countries such as Indonesia, China and
Brazil.
In an interviewwith The Wall
Street Journal, Mr.Goings said the
Orlando,Fla., companyisgrowing
fastest in markets wherewomen are
looking foropportunities to earn a
living. Tupperwarerelies on alargely
female sales forceof2.9 million to sell
its brightly colored food-storage
containers to friends and family
through house parties.
The expected growth “is notdriven
Switzerland’sPPLI providers were
the subject of a Wall Street Journal

report this week thatsaid the U.S.
JusticeDepartmentand Internal
Revenue Serviceare scrutinizing the
use of the product, which blends
banking and insurancebylinking the
value of aclient’spolicy to assets held
in aSwissbank account.
The U.S. authorities areexamining
whether Americans used Swiss
insuranceproducts to hide assets, the
WSJreported, citing people with
knowledge of the matter.
Mr.Pfister’scomments came as
SwissLifesaid full-year net profit
surged to 781 million Swissfrancs
($880 million) in 2013, up almost
700% from 98 million Swissfrancs a
year earlier.The performancewas
driven by a5.4% increase in premiums
and policy fees and a1%reduction in
group costs.
Neil MacLucas
 INSURANCE
Swiss Life Chief Executive:
Products AreTax Compliant
The chief executiveofSwissLife
Holding AG said on Wednesdaythat
the insurer’s privateplacementlife
insuranceproducts were tax compliant
and notdesigned to attract untaxed

assets owned by U.S. clients.
Bruno Pfistersaid that, from the
end of 2008, Zurich-based SwissLife
had only accepted U.S. customer
assets forthe product, which is often
referred to as PPLI, if theyweretax
compliant. The companystopped
taking newbusinessfromU.S. clients
in 2012, he said.
SwissLifehasn’tbeen contacted by
U.S. authorities with regardtothe
PPLI business, he added. “Weconsider
our PPLI portfolio to be tax compliant,”
Mr.Pfistersaid. “It has neverbeen our
goal to attract untaxed assets.”
INDEX TO BU SINESSES
ABB 23
Agricultural Bank of
China 23
Airbus Group N.V 17,21
Andreessen Horowitz 22
AnekaTambang 21
Anheuser-Busch InBev.19
Apple 17,20
Arbaya Energi 21
AT&T 8
BAIC Motor 23
BlackBerry 20
Boeing 21
BYD 23

Carlsberg 19
Carlyle Group 19
Citigroup 25
Comcast 18
Credit Suisse Group 24
Daimler 23
Deere 12
Dongfeng Motor Group 32
DowChemical 12
DuPont 12
Facebook 22
Financial Conduct
Authority 24
FireEye 24
Freeport-McMoRan
Copper &Gold 21
FXCM 24
General Electric 24
Goldman Sachs Group 25
Google 20,22
Grupo Modelo 19
Heartland Payment
Systems 24
Hebei Iron and Steel
Group 23
Heineken 19
Honda Motor 32
ITV 18
Japan Post Group 23
Joyful Frog Digital

Incubator 22
Juniper Networks 32
Lego 17
LinkedIn 20
Mars 22
Maxim Asset
Management 19
Microsoft 20
Mondelez International22
Monsanto 12
Mt. Gox 1
Newmont Mining 21
News Corp 18
Nissan Motor 32
Nokia 20
Orion Group 22
Oshkosh 31
Palo Alto Networks 32
Prime Meridian 13
PSAPeugeot Citroën 32
Rakuten 22
RedDot Ventures 22
Renault S.A 32
Rolls-Royce Holdings 21
Samsung Electronics 20
Sprint 8
Target 24
Telefonica Deutschland 32
T-Mobile Austria 32
T-Mobile Germany 32

United Rusal 21
United Technologies 21
Veolia Environnement 19
Verizon
Communications 8
Viber Media 22
Viki 22
Wells Fargo&Co 24
Westfield Group 19
Westfield Retail Trust.19
WhatsApp 22
Businesses
This index of businesses
mentioned in today’s
issue of The Wall Street
Journal is intended to
include all significant
referencetocompanies.
Firstref er enc etothe
companies appears in
bold face type in all
articles except those
on page one and the
editorial pages.
Corrections Amplifications
TheStraitsExchange Foundation, Tai-
wan’ssemioff icial organization that
handlesaffairswith China, wasincor-
rectly referred to as Strait Exchange
Foundation in aWorld News article Feb.

12 about talks between China and Tai-
wan.
Readers canalert the London newsroom of The
Wall Street Journal to anyerrorsinnewsarticles
by emailing or by calling
+44(0)20 7842 9901.
BUSINESS &FINANCE
ITV BulksUpProduction Arm
LONDON—ITV PLCWednesday
hailed the performanceofits U.S.
businessand said itsfast-growing
production arm is seeking more
deals,asthe U.K. media company
reported a27% jump in itsyearly
profit.
One of ITV’smost popular
shows,“Downton Abbey,” is co-pro-
duced by Carnival Films,part of
Comcast Corp.’ sNBCUniversal, and
PBS’ sMasterpieceseries,both based
in the U.S. But to insulateitself from
advertising marketsITV Studios is
spending to createits owntelevision
shows,such as the British drama
“Mr.Selfridge, ” forits ownchannels
andtosell to overseas broadcaster s.
ITV Studios also is expanding by
pursuing acquisitions in the U.K.,as
well as the U.S.,whereitisnow a
top-fiveindependent content pro-

ducer. “If[the right opportunities]
come up,then we will go forthem,”
said Chief ExecutiveAdam Crozier.
In thepast year and ahalf,ITV
hasbought U.S. production compa-
nies ThinkfactoryMedia, Gurney
Production andHigh Noon Enter-
tainment. Last week,itacquired
NewYork-based DiGa Vision.
“Ifyou look at our American
business, our revenue doubled last
year and tripled since2010,” said
Mr.Crozier.
TheU.K.’sbiggest over-the-air
commercial broadcast er,which also
shows music competition “The X
Factor,” said 2013 net profit rose to
£326 million ($544 million) from
£256 millionin2012. Revenue in-
creased9%to£2.39 billion.
Nonadvertising re venue gained
17%to£1.21 billion, and revenue
from ITV Studios rose 20% to £875
million. Thecompanysaid it expects
advertising revenue from itschan-
nels,which rose 2% last year,to
climb 2% in the firstthree months
of this year.Its advertising revenue
also is set foraboost this summer
from the FIFAsoccerWorld Cup.

“The television-advertising mar-
ketcontinues to showsigns of im-
provement,” Mr.Crozier said.
ITV proposed afull-year divi-
dend of 3.5pence, up 35% from a
year earlier and aspecial dividend
of 4pence—valued at £161 million—
in line with last year.
“Our financial position has been
transformed,” Mr.Crozier said.
Jane Anscombe, analyst at Edi-
son Investment Research, said ITV’s
strategic approach is paying off.
ITV,which is four yearsintoa
five-year plan to generatehalf its
revenue from sourcesother than
traditionaltelevision-advertising
spots, is also pushing itsdigital-me-
dia presencetocapturetablet and
smartphone users, as well as spon-
sorship deals.
Thecompanyexpectsonline,pay
and interactivetopost double-digit
revenue growth this year,helped by
the launch of the paydrama channel
ITV Encore.
Mr.Crozier ruled out ITV bid-
ding for U.K. over-the-air peer Chan-
nel 5, which is up forsale.“We are
not looking at Channel 5,” he said.

BY SIMON ZEKARIA
Prosecutors
In theU.K.
Charge Fo ur
Journalists
LONDON—British prosecutors
said four journalists—three of them
from News Corp’s Sunnewspaper—
have been chargedwith misconduct
in public office, amovethat putsa
fresh spotlight on journalistic prac-
tices at anewspaper that is part of
Rupert Murdoch’smedia giant.
Reporters from News Corp’s
daily the Sun—TomWells,Neil Mil-
lardand Brandon Malinsky—have all
been chargedwith misconduct in
public office, the CrownProsecution
Servicesaid Tuesday. Graham
Brough, ajournalist who used to
writefor the Trinity Mirror Group
title the Daily Mirror,was also
charged.
News U.K.,NewsCorp’sU.K.
newspaper unit, declined to com-
ment. Aspokesman forTrinity Mir-
rorsaid the companywasn’t pre-
pared to comment immediately.
News Corp also owns DowJones &
Co., the publisher of TheWall Street

Journal.
All four men were arrested as
part of Operation Elveden, apolice
probe intoalleged corrupt payments
by journaliststopoliceofficers, in
exchangefor tips and stories.
Former policeofficer Sam
Azouelos and former corrections of-
ficerReggie Nunkoo were also
chargedwith the same offense,said
prosecutors. Prosecutorsand the
policedidn’t disclose anyother de-
tails of the alleged offenses.
Attemptstoreach the six indi-
viduals chargedweren’t successful.
Themen have yettoenter pleas,
which could happen at subsequent
hearings.
Operation Elveden waslaunched
to runinparallel with investigations
intophone hacking,orthe illegal in-
terception of voice-mail messages,
and computer hacking.Separately,
former News Corp employees in-
cludingRebekah Brooks and Andy
Coulson, both of whom onceedited
News Corp newspapers, arefacing
chargesrelated to alleged phone
hacking,briberyand obstruction in
acontinuing trial at London’sCen-

tral Criminal Court. They andfive
otherdefendantshavepleaded not
guilty to the charges.
Thechargesare cent er ed around
allegations of phone hacking at
News Corp’ snow-closed News of the
World tabloid. Ms.Brooks and Mr.
Coulson both served as topeditor at
that paper.Ms. Brooks also edited
theSun.
Themen chargedinthe Elveden
inquiryare to appear March 10 be-
fore Westminst er Magistrates Court.
BY ALEXIS FLYNN
‘DowntonAbbey,’above,isone of ITV’smostpopular series, but the broadcasteraims to create moreofits ownshows.
Associated Press
BUSINESS BRIEFS
Online
>>
Formorebreaking news,goto
WSJ.com/Business and follow
@wsjbusinessonTwitter.
16 |Thursday, February27, 2014 THE WALL STREETJOURNAL.
OPINION
Hardly aday goes by without
news of another cyberattack.Sup-
posedly well-guarded corporate,
government or consumer data
land in the wrong hands thanks to
crafty hackerswho attack alleg-

edly impenetrable networks in
search of valuable data. On Jan.
30,Yahoo surfaced as one of the
latest victims when the company
disclosed that itsusers’ email ac-
countshad been compromised. In
2013,Target, Neiman Marcus, the
U.S. Na vy and even Internet com-
panies likeTwitterand Living So-
cial, were victims of major
cyberattacks.
So it should come as no sur-
prise that U.S. intelligenceoffi-
cials ranked cybersecurity as the
number one threat to U.S. inter-
estsduring arecent congressional
hearing.Despiteyearsofwidely
reported and costly break-ins,we
arestill woefully deficient when it
comes to protecting our digital as-
sets.
Theproblem is that the sys-
tems and safeguards currently in
use have not kept pacewith the
rapid technological changes.Tra-
ditional security mechanisms,
such as firewalls and antivirus
systems,are static,difficult to
configure, and even tougher to
updateasnew threatsemerge.

Most successfulattacks today
arebased on so-called zero-day
exploits, meaning that the attacks
have never been seen or used be-
fore.They arealso able to adapt
quickly,soifone approach is
blocked by afirewall or antivirus
system, the exploit repackages it-
self so as to be undetectable.
What’smore, breaches todayare
persistent, meaning that onceat-
tackersget intoasystem, they are
able to hide software carefully
that waitsfor instructions on how
to proceed. In the recent Target
case,the malwarewas installed
through apreviously unknown
hole in an HVAC provider’s sys-
tem, and it remained inside the
point-of-sale system formonths,
quietly collecting the personal and
credit-carddataofmillions of cus-
tomers. Investigations intohow
this breach occurred arestill on-
going.
Thereissome good news: En-
trepreneurshavepaid close atten-
tion to these scaryscenarios,and
thanks to them, bettercybersecu-
rity measures areonthe horizon.

From June 2012 to June 2013,
venturecapitalists, angel inves-
tors and private-equity funds in
the U.S. alone pumped an esti-
mated $1.4billion intothe sec-
tor—a 29% jump from the previ-
ous year,according to research
firm CB Insights. Awell-funded
newgeneration of young private
companies is taking cutting-edge
technologies pioneered at places
likeFacebook, LinkedIn and
Google, as well as topuniversities,
and turning them against hackers.
By relying on machinelearn-
ing,virtualization and big-data-
analytics techniques,these start-
ups areable to watchinreal time
forpatterns or anomalies that
shouldn’t be thereand, forthe
firsttime,protect against novel
attacks beforethey happen. Many
next-generation approaches to
thwarting computer break-ins are
already in advanced trials.
One companybased in Silicon
Valley,ShadowNetworks, creates
ashadownetwork full of fakema-
chines that act likehoney pots, at-
tracting anddetecting malicious

intrusions.Another,Bromium, has
developed atechnique to virtual-
izeevery processrunning on en-
terprise computerstoisolate
them and prevent asingle infec-
tion from taking over an entire
machine or network.
Still othersare working on
bringing massivedata-process-
ingcapabilities to bear on de-
tecting malicious players based
on patterns in their behavior.
Lastline,backed by our firm, re-
lies on next-generation cloud-
based emulation technologyto
detect previouslyunseen mal-
ware when it attemptstoenter
an enterprise’snetwork.
Theresultsofthese advances
arepromising.For example,over
arecent 30-dayperiod, one of
Lastline’scustomers, alarge
school system in the U.S. with
morethan 70,000 desktopcom-
puters, experienced nearly 10,000
attempted attacks that passed
through the existing firewall and
antivirus systems undetected.
Lastline wasable to use itstech-
nologytoidentifyand block every

one of them.
Thecontinued evolution of cy-
bersecurity innovation is essential
if we ever hope to gain the upper
hand in this virtual war. We know
that because it has worked before:
In the 1990s,for example,the
most common attacks were buffer
overflow attacks,wherean
attacker takesadvantage of the
fact that aprogram expectsanin-
put to be no longer than acertain
length. By moving to higher-level
programming languages with
built-in protections against these
attacks,such as Java and C#,
these attacks were rendered moot.
In the 2000s,intrusions called
SQLinjections became hackers’
most common tool. Thetwo larg-
est public hacks of the 2000s,
wheremorethan 100 million
credit-cardnumberswerestolen
from retailer T.J. Maxx and pay-
ment processor Heartland, were
direct resultsofthese types of
intrusions.Security researchers
quickly responded, founding com-
panies likeImpervatodefend
against these SQLinjection at-

tacks.
With all the recent high-profile
infiltrations,wemight be tempted
to lose faith that anything can
stop the incessant and sophisti-
catedschemes being aimed at our
networks.That would be amis-
take.Yes,plenty of the strategies
in the works todaywill fail, and
newmethods of attack will surely
emerge.But if we maintain our in-
vestments, we have areal shot at
ensuring that our digital
information is secureand cyber
criminals areshut out.
Mr. Walecka is afounding part-
ner at Redpoint Ventures, aven-
ture-capital firm in Silicon Valley.
All futurehisto-
ries of the Obama
presidencywill an-
alyze the phrase,
“leading from be-
hind,” the idea
that the U.S. superpowershould
behave as no morethan aco-equal
partner in managing the affairsof
the world. Chapterswill be de-
votedtolaying this revisionist
templateoverLibya, Syria and

Iran. Thereisone area, though, in
which the returns arealready in
on this newnotion of American
leadership: Forfiveyears, the U.S.
has been leading the world econ-
omyfrombehind. It’snot pretty.
Acrossthe post-war period, the
U.S. has been the “engine” that
pulls the world economy. That en-
gine hassputteredthe past five
years, with annual U.S. growth ro-
tating around 2% rather than the
historic averageofmorethan 3%.
Economies elsewhereare faltering
or choking.EvenChina is deceler-
ating.The European Union this
week predicted weak growth
through 2015.
Afterthe great recession ended
in early 2009,the normal post-re-
cession growth spikeinthe U.S.
never happened, meaning the
world’speople missed out on alot
of productiveeconomic activity.
And don’t hold your breath. Ac-
cording to the Congressional Bud-
getOffice’soutlook report this
Feb. 4, “The growth of potential
GDP over the next 10 yearsis
much slowerthan the average

since1950.”
Hang around theWashington
political and pundit classthese
days,and youget the impression
this doesn’t mattermuch. We’ll
muddle through till the magic sun
comes out again. Raise the mini-
mum wage,createmoretax cred-
itsorspend $300 billion pouring
federal concrete, and the clouds
will part.
Youthink so? Let’stry to de-
scribe the futureofaslowerU.S.
economyasprovocatively as pos-
sible,and we’renot talking about
Medicarebombs.Ifthe American
economic engine slows perma-
nently to about 2%, you’regoing
to see morefires around the world
likeUkraine and Venezuela. At the
margin, the world’sweakest, most
misgoverned countries will pop,
and violently.
No one in our politics should
be so naïve as to think that in a
dangerously low-growth world,
the U.S. won’t have to get“in-
volved.” Weakening economies
breed anger and political volatil-
ity,asinthe 1930s,and if the

flames gethigh enough, there will
be U.S. bootsonthe ground some-
where.
TheArabSpring erupted just
three yearsago. As in Ukraine or
Venezuela, the scenes from Middle
Eastern capitals were the same:
thousands of young demonstrators
(a million in Cairo’sTahrir
Square), bonfires and bloodshed.
Yes, it’sabout political freedom
and corruption, but leftunseen
because it can’t be photographed
in these revolutionarycontexts is
the reality of economic hopeless-
ness.
Mainly that means massivejob-
lessness, notably among young
people.It’s39% in Egypt and 38%
foruniversity graduates in Tuni-
sia. These aregrowthrevolutions.
Whyare Ukrainians fighting and
dying to join the low-growth Euro-
pean Union? TheEUhas asystem
that makes real economic growth
theoretically possible,unlikeer-
ratic Russia. Aligned with the EU,
afreePoland has grown, even if
Italy and Francehavefrittered
away what they had. Francere-

ported record unemployedthis
week.
TheU.S.and Western Europe
have lived through these recent
yearswith the illusion that eco-
nomic mediocrity can’t be so bad
because they’vehad no Orange
Revolutions on their lovely
streets. In fact, these vain and de-
celerating advanced economies are
living off the accumulated inheri-
tanceofacenturyand ahalf of
good growth.
Angus Maddison, the lateand
eminent economist forthe OECD,
produced afamous chart in 1995,
depicted nearby.For the longest
time—basically from afterthe Gar-
den of Eden until the 19th cen-
tury—economic benefit forthe av-
erageperson in the West or Japan
wasflat as toast. TheMona Lisa
aside,therewas areason someone
back then said lifewas nasty,
brutish and short.
Maddison describes 1820 til
1950 as the “capitalist epoch.” He
means that admiringly.The tools
of capitalism unlocked the knowl-
edgecreated untilthen. What

came to be called “economic
growth” gavemorepeople jobs
that finally liftedthem and their
families from the muck of jobless-
nessand poverty.Maddison noted
that much of the world never re-
ally participated in the capitalist
epoch. No wonder they revolt now.
This historyisworth restating
because the importanceofstrong
economic growth, and the un-
avoidable necessity of aU.S.that
leads that growth, maybedisap-
pearing down the memoryhole of
public policy, on the leftand even
among some on the right. Both
sharethe grim viewthat the U.S.
economyisflat-lining,and the
fight is over howtodivide what’s
left.
Thereisnoalternativeto
strong economic growth. None.
They know this in Beijing,Seoul,
Kuala Lumpur,Jakarta, Warsaw,
Bratislava,Taipei, even Hanoi. The
missing pieceisaglobal growth
agenda led by aU.S.president and
treasurysecretarywho aren’t fun-
damentally at odds with capital-
ism. Therevivaloftax reform an-

nounced this week by House Ways
and Means Chairman Dave Camp
is astart.
In apuckish moment, Angus
Maddison noted that global in-
come inequality wasrather mini-
malinthe 11th century. Now those
were the days.
Write to
[Wonder Land ]
BY DANIEL HENNINGER
Next-Generation CybersecurityRatchets Up
The Growth Revolutions Erupt
BY JOHN WALECKA
The CapitalistEpoch.ToBeContinued?
GDP per capita in 1990 international dollars, years 1000-1995
Source:Angus Maddison
$20,000
Japan
West Europe
China
0
1000 1500 1820 1995
2,500
5,000
7,500
10,000
12,500
15,000
17,500

Thorold Barker, Editor,
Europe, Middle East &Africa
BruceOrwall, Senior Editor, Europe
Gren Manuel, Executive Editor, Europe
TerenceRoth, Managing Editor, Europe
Lauren Berkemeyer, Marketing
Kate Dobbin, Communications
FlorenceLeFevre, Institutional Sales Europe
Michael Lloyd, Institutional Sales U.K.
Jonathan Wright, Circulation Sales
KellyLeach, Publisher
Published since 1889 by
DowJones&Company
©2014 DowJones &Company. AllRights Reserved
Silicon Valleyisjumping
intothe effort to find more
sophisticated ways of
stopping attackslike
the one on Ta rget.
Ukrainians want what we’ve
got: Thebenefitsofreal
economic growth.
Thursday, February27, 2014
Pound/Euro 0.8211 g 0.30% Yen/$ ¥102.37 À 0.17% Global Dow 2466.64 g 0.14% Gold 1328.20 g 1.10% Oil 102.59 À 0.75% 3-month Libor 0.23330 10-year Treasury À 8/32 yield 2.675%
THE WALL STREETJOURNAL.
europe.WSJ.com
China Sparks Electric Cars
With Sales Coming in Beijing
BUSINESS&FINANCE 23
U.K. Looks to Be

First to RaiseRates
HEARD ON THE STREET 32
Airbus Vows to FlyWithIts Own Wings
TOULOUSE, France—Airbus
Group NV,emboldened by strong fi-
nancial resultsand an order backlog
extending well intothe next decade,
is turning itsback on itslongtime
European supporters.
Driving the shiftinattitude to-
ward the governmentsofFrance,
Germany, Spain and the U.K. is the
overhaul of Airbus’sgovernancelast
year.But ashiftinthe commercial
aircraftmarket is also at play, said
Chief ExecutiveTom Enders.
“Ten yearsago, almost 50% of
our order intakewas coming from
Europe; last ye ar it waslessthan
10%,” said Mr.Endersinaninter-
view. “It shows that forusEurope is
lessand lessimportant in relative
terms.”
Mr.Enderssaid Airbus has
“walked away” from €623 million
($856 million) in loans from Ger-
manyfor the newAirbus A350
widebody jet. Other governments
have already ponied up their share,
but the German government had de-

layedits contribution to put pres-
sureonAirbus to allocatework in
Germany, whereAirbus assembles
aircraft and manufactures defense
equipment.
Airbus will take asimilar ta ck
when it needs to fund the develop-
ment of futureaircraftprograms in
Germanyand other countries,said
Mr.Enders, relying much le ss on
government support.
“Money is important, but what is
equally important is not to be hand-
cuffed to acertain workshare,” he
said. With interest ratesnow very
low, the alternative—borrowing in
capital markets—is amuch moreat-
tractiveoption, he added.
Mr.Enders’sremarks arethe lat-
est evidenceofAirbus’ sgovernance
shiftatplay. Theaircraftmaker
sealed an agreement last year to
limit the involvementofthe French
and German governmentsand in-
crease the percentageofshares
traded on stock markets.
Streamlining the company’s
oversight wasone of the priorities
of Mr.Enders, who served as co-
CEO of what wasthen known as Eu-

ropean Aeronautic Defence&Space
Co.from2005 to 2007 beforere-
turning to the CEO post in June
2012. One of his firstmoves wasto
trymerging with British defense gi-
ant BAESystems PLC,but German
Chancellor Angela Merkel blocked
thedeal, fearing Germanywould
lose influence.
Airbus and itstrans-Atlantic ri-
valBoeing Co.havebeen at logger-
heads foryearsinside the WTOdis-
putesettlement system over mutual
accusations that they benefit from
unfair stateassistance, although
Airbus has argued all along that the
aid it receives is in the form of re-
payable loans,while Boeing gets tax
breaks that don’t have to be repaid.
Airbus has received billions of
eurosinloans from European gov-
ernmentstosupport the develop-
ment of newjetliner models over
the past four decades.This includes
a€500 million loan from Germany
forthe A350 four yearsago.
AGerman economics ministry
spokeswoman said earlier this
month that the latest offer to Airbus
“remains on the table.”

Airbus doesn’t need the cash. It
has some €9 billion to €10 billion on
itsbooks thanks to booming Airbus
Please turn to page 21
BY DAVID PEARSON
‘Europe is lessand lessimportant,’Airbus CEOTom Enders said Wednesday.
European PressphotoAgency
 Rolls-Roy ce introduces newjet-
engine designs 21
Hit Movie Brightens
TheScene forLego
Thepopularity of “The Lego
Movie” maybecoming at just the
right time forDanish toymaker
Lego A/S, which is expected to re-
port an abrupt slowdowninits U.S.
businessin2013 year afterseveral
yearsofheady gains.
Closely held Lego is slated to
publish its2013 financial results
Thursday.
Soren Torp Laursen, who runs
Lego’s North American business,
said in arecent news release that
U.S. sales growth last year “was
moremoderat ethan the supernatu-
ralincreases we recorded over the
last eight years.”
Lego’s interlocking plastic bricks
have remained wildly popular,even

as demand forother tr aditional toys
has weakened amid competition
from digital games,including mobile
apps that canbeplayedonApple
Inc.’siPad. Lego has said that U.S.
and European toymarketsare being
pressured by the flood of newcom-
petition.
TheU.S.slowdowncame ahead
of thelaunch of “The Lego Movie, ”
which has been No.1atU.S.box of-
ficesfor three successiveweeks.
Lego, which gets ashareofthe film’s
take,has said it expectsthe movie to
boost sales in 2014, both in North
Americaand in other markets, such
as Europe.
Citing datasupplied by NPD
Group,Legosaid itsU.S.consumer
sales grew 1% to $1.35 billion in
2013,giving the companya7.8%
shareofthe U.S. toymarket and po-
sitioningitas“America’sthird-larg-
est toymanufacturer.”
U.S. sales makeupasubstantial
portion of Lego’s revenue,which to-
taled about $4 billion in 2012. Two
yearsago, Lego’s U.S. sales soared
26%, helped by astrong reception
forabarrageofnew products.

Recently, Lego has been signaling
aslowdown. It said in September
that salesinNorth Americaand
Latin Americarose 4% in the first
half of 2013.Taken with the NPD
data, that means Lego’s momentum
in the Americas essentially came to
ahalt in the second half of 2013,
likely boosting the company’sreli-
ance on better-performing markets
in Asia and Europe.
ButEuropean demand also ap-
pearstobeslowing.InJanuary,
Lego said sales in Germany—another
key market—grew 4% in 2013,down
from 13% in 2012. Germanymade up
slightly morethan 10% of Lego’s
2012 sales.
Lego’s U.S. struggles reflect a
wider downturn in the world’sbig-
gest toymarket, which generates
about $22billion in annual revenue
forthe industry, NPD says.
Lego had already been relying on
Hollywood to help offset the indus-
trymalaise.The companyhas prof-
ited formanyyearsthrough itstie-
inswith popular movie franchises
such as StarWars, HarryPotterand
the Avenger s. But “The Lego Movie”

is taking the company’saffiliation
with the big screen to anew level.
Thus far,the movie has pulled in
some $183 million at the U.S. boxof-
fice and over $90 million abroad.
—Jens Hansegard
contributed to this article.
BY CLEMENS BOMSDORF
GOOD BY E
COMPLICATED.
HELLO
AUTOMATED.
THENETWORK MUST TRANSFORM.
Brocade fabric tech nologysimplifiesnetwork operationsthroughautomation,
enabling near “zero-touch” configurationand provisioning.Using fabrics, busi nesses
ca ndeploy networkcapacityatleast 5
X
faster compared to status quo netwo rks.
Get thefacts: brocade .com/ networkfacts
#networkfacts©2014Brocade CommunicationsSystems,Inc.All Rights Reserved .
16 |Thursday, February27, 2014 THE WALL STREETJOURNAL.
OPINION
Hardly aday goes by without
news of another cyberattack.Sup-
posedly well-guarded corporate,
government or consumer data
land in the wrong hands thanks to
crafty hackerswho attack alleg-
edly impenetrable networks in
search of valuable data. On Jan.

30,Yahoo surfaced as one of the
latest victims when the company
disclosed that itsusers’ email ac-
countshad been compromised. In
2013,Target, Neiman Marcus, the
U.S. Na vy and even Internet com-
panies likeTwitterand Living So-
cial, were victims of major
cyberattacks.
So it should come as no sur-
prise that U.S. intelligenceoffi-
cials ranked cybersecurity as the
number one threat to U.S. inter-
estsduring arecent congressional
hearing.Despiteyearsofwidely
reported and costly break-ins,we
arestill woefully deficient when it
comes to protecting our digital as-
sets.
Theproblem is that the sys-
tems and safeguards currently in
use have not kept pacewith the
rapid technological changes.Tra-
ditional security mechanisms,
such as firewalls and antivirus
systems,are static,difficult to
configure, and even tougher to
updateasnew threatsemerge.
Most successfulattacks today
arebased on so-called zero-day

exploits, meaning that the attacks
have never been seen or used be-
fore.They arealso able to adapt
quickly,soifone approach is
blocked by afirewall or antivirus
system, the exploit repackages it-
self so as to be undetectable.
What’smore, breaches todayare
persistent, meaning that onceat-
tackersget intoasystem, they are
able to hide software carefully
that waitsfor instructions on how
to proceed. In the recent Target
case,the malwarewas installed
through apreviously unknown
hole in an HVAC provider’s sys-
tem, and it remained inside the
point-of-sale system formonths,
quietly collecting the personal and
credit-carddataofmillions of cus-
tomers. Investigations intohow
this breach occurred arestill on-
going.
Thereissome good news: En-
trepreneurshavepaid close atten-
tion to these scaryscenarios,and
thanks to them, bettercybersecu-
rity measures areonthe horizon.
From June 2012 to June 2013,
venturecapitalists, angel inves-

tors and private-equity funds in
the U.S. alone pumped an esti-
mated $1.4billion intothe sec-
tor—a 29% jump from the previ-
ous year,according to research
firm CB Insights. Awell-funded
newgeneration of young private
companies is taking cutting-edge
technologies pioneered at places
likeFacebook, LinkedIn and
Google, as well as topuniversities,
and turning them against hackers.
By relying on machinelearn-
ing,virtualization and big-data-
analytics techniques,these start-
ups areable to watchinreal time
forpatterns or anomalies that
shouldn’t be thereand, forthe
firsttime,protect against novel
attacks beforethey happen. Many
next-generation approaches to
thwarting computer break-ins are
already in advanced trials.
One companybased in Silicon
Valley,ShadowNetworks, creates
ashadownetwork full of fakema-
chines that act likehoney pots, at-
tracting anddetecting malicious
intrusions.Another,Bromium, has
developed atechnique to virtual-

izeevery processrunning on en-
terprise computerstoisolate
them and prevent asingle infec-
tion from taking over an entire
machine or network.
Still othersare working on
bringing massivedata-process-
ingcapabilities to bear on de-
tecting malicious players based
on patterns in their behavior.
Lastline,backed by our firm, re-
lies on next-generation cloud-
based emulation technologyto
detect previouslyunseen mal-
ware when it attemptstoenter
an enterprise’snetwork.
Theresultsofthese advances
arepromising.For example,over
arecent 30-dayperiod, one of
Lastline’scustomers, alarge
school system in the U.S. with
morethan 70,000 desktopcom-
puters, experienced nearly 10,000
attempted attacks that passed
through the existing firewall and
antivirus systems undetected.
Lastline wasable to use itstech-
nologytoidentifyand block every
one of them.
Thecontinued evolution of cy-

bersecurity innovation is essential
if we ever hope to gain the upper
hand in this virtual war. We know
that because it has worked before:
In the 1990s,for example,the
most common attacks were buffer
overflow attacks,wherean
attacker takesadvantage of the
fact that aprogram expectsanin-
put to be no longer than acertain
length. By moving to higher-level
programming languages with
built-in protections against these
attacks,such as Java and C#,
these attacks were rendered moot.
In the 2000s,intrusions called
SQLinjections became hackers’
most common tool. Thetwo larg-
est public hacks of the 2000s,
wheremorethan 100 million
credit-cardnumberswerestolen
from retailer T.J. Maxx and pay-
ment processor Heartland, were
direct resultsofthese types of
intrusions.Security researchers
quickly responded, founding com-
panies likeImpervatodefend
against these SQLinjection at-
tacks.
With all the recent high-profile

infiltrations,wemight be tempted
to lose faith that anything can
stop the incessant and sophisti-
catedschemes being aimed at our
networks.That would be amis-
take.Yes,plenty of the strategies
in the works todaywill fail, and
newmethods of attack will surely
emerge.But if we maintain our in-
vestments, we have areal shot at
ensuring that our digital
information is secureand cyber
criminals areshut out.
Mr. Walecka is afounding part-
ner at Redpoint Ventures, aven-
ture-capital firm in Silicon Valley.
All futurehisto-
ries of the Obama
presidencywill an-
alyze the phrase,
“leading from be-
hind,” the idea
that the U.S. superpowershould
behave as no morethan aco-equal
partner in managing the affairsof
the world. Chapterswill be de-
votedtolaying this revisionist
templateoverLibya, Syria and
Iran. Thereisone area, though, in
which the returns arealready in

on this newnotion of American
leadership: Forfiveyears, the U.S.
has been leading the world econ-
omyfrombehind. It’snot pretty.
Acrossthe post-war period, the
U.S. has been the “engine” that
pulls the world economy. That en-
gine hassputteredthe past five
years, with annual U.S. growth ro-
tating around 2% rather than the
historic averageofmorethan 3%.
Economies elsewhereare faltering
or choking.EvenChina is deceler-
ating.The European Union this
week predicted weak growth
through 2015.
Afterthe great recession ended
in early 2009,the normal post-re-
cession growth spikeinthe U.S.
never happened, meaning the
world’speople missed out on alot
of productiveeconomic activity.
And don’t hold your breath. Ac-
cording to the Congressional Bud-
getOffice’soutlook report this
Feb. 4, “The growth of potential
GDP over the next 10 yearsis
much slowerthan the average
since1950.”
Hang around theWashington

political and pundit classthese
days,and youget the impression
this doesn’t mattermuch. We’ll
muddle through till the magic sun
comes out again. Raise the mini-
mum wage,createmoretax cred-
itsorspend $300 billion pouring
federal concrete, and the clouds
will part.
Youthink so? Let’stry to de-
scribe the futureofaslowerU.S.
economyasprovocatively as pos-
sible,and we’renot talking about
Medicarebombs.Ifthe American
economic engine slows perma-
nently to about 2%, you’regoing
to see morefires around the world
likeUkraine and Venezuela. At the
margin, the world’sweakest, most
misgoverned countries will pop,
and violently.
No one in our politics should
be so naïve as to think that in a
dangerously low-growth world,
the U.S. won’t have to get“in-
volved.” Weakening economies
breed anger and political volatil-
ity,asinthe 1930s,and if the
flames gethigh enough, there will
be U.S. bootsonthe ground some-

where.
TheArabSpring erupted just
three yearsago. As in Ukraine or
Venezuela, the scenes from Middle
Eastern capitals were the same:
thousands of young demonstrators
(a million in Cairo’sTahrir
Square), bonfires and bloodshed.
Yes, it’sabout political freedom
and corruption, but leftunseen
because it can’t be photographed
in these revolutionarycontexts is
the reality of economic hopeless-
ness.
Mainly that means massivejob-
lessness, notably among young
people.It’s39% in Egypt and 38%
foruniversity graduates in Tuni-
sia. These aregrowthrevolutions.
Whyare Ukrainians fighting and
dying to join the low-growth Euro-
pean Union? TheEUhas asystem
that makes real economic growth
theoretically possible,unlikeer-
ratic Russia. Aligned with the EU,
afreePoland has grown, even if
Italy and Francehavefrittered
away what they had. Francere-
ported record unemployedthis
week.

TheU.S.and Western Europe
have lived through these recent
yearswith the illusion that eco-
nomic mediocrity can’t be so bad
because they’vehad no Orange
Revolutions on their lovely
streets. In fact, these vain and de-
celerating advanced economies are
living off the accumulated inheri-
tanceofacenturyand ahalf of
good growth.
Angus Maddison, the lateand
eminent economist forthe OECD,
produced afamous chart in 1995,
depicted nearby.For the longest
time—basically from afterthe Gar-
den of Eden until the 19th cen-
tury—economic benefit forthe av-
erageperson in the West or Japan
wasflat as toast. TheMona Lisa
aside,therewas areason someone
back then said lifewas nasty,
brutish and short.
Maddison describes 1820 til
1950 as the “capitalist epoch.” He
means that admiringly.The tools
of capitalism unlocked the knowl-
edgecreated untilthen. What
came to be called “economic
growth” gavemorepeople jobs

that finally liftedthem and their
families from the muck of jobless-
nessand poverty.Maddison noted
that much of the world never re-
ally participated in the capitalist
epoch. No wonder they revolt now.
This historyisworth restating
because the importanceofstrong
economic growth, and the un-
avoidable necessity of aU.S.that
leads that growth, maybedisap-
pearing down the memoryhole of
public policy, on the leftand even
among some on the right. Both
sharethe grim viewthat the U.S.
economyisflat-lining,and the
fight is over howtodivide what’s
left.
Thereisnoalternativeto
strong economic growth. None.
They know this in Beijing,Seoul,
Kuala Lumpur,Jakarta, Warsaw,
Bratislava,Taipei, even Hanoi. The
missing pieceisaglobal growth
agenda led by aU.S.president and
treasurysecretarywho aren’t fun-
damentally at odds with capital-
ism. Therevivaloftax reform an-
nounced this week by House Ways
and Means Chairman Dave Camp

is astart.
In apuckish moment, Angus
Maddison noted that global in-
come inequality wasrather mini-
malinthe 11th century. Now those
were the days.
Write to
[Wonder Land ]
BY DANIEL HENNINGER
Next-Generation CybersecurityRatchets Up
The Growth Revolutions Erupt
BY JOHN WALECKA
The CapitalistEpoch.ToBeContinued?
GDP per capita in 1990 international dollars, years 1000-1995
Source:Angus Maddison
$20,000
Japan
West Europe
China
0
1000 1500 1820 1995
2,500
5,000
7,500
10,000
12,500
15,000
17,500
Thorold Barker, Editor,
Europe, Middle East &Africa

BruceOrwall, Senior Editor, Europe
Gren Manuel, Executive Editor, Europe
TerenceRoth, Managing Editor, Europe
Lauren Berkemeyer, Marketing
Kate Dobbin, Communications
FlorenceLeFevre, Institutional Sales Europe
Michael Lloyd, Institutional Sales U.K.
Jonathan Wright, Circulation Sales
KellyLeach, Publisher
Published since 1889 by
DowJones&Company
©2014 DowJones &Company. AllRights Reserved
Silicon Valleyisjumping
intothe effort to find more
sophisticated ways of
stopping attackslike
the one on Ta rget.
Ukrainians want what we’ve
got: Thebenefitsofreal
economic growth.
Thursday, February27, 2014
Pound/Euro 0.8211 g 0.30% Yen/$ ¥102.37 À 0.17% Global Dow 2466.64 g 0.14% Gold 1328.20 g 1.10% Oil 102.59 À 0.75% 3-month Libor 0.23330 10-year Treasury À 8/32 yield 2.675%
THE WALL STREETJOURNAL.
europe.WSJ.com
China Sparks Electric Cars
With Sales Coming in Beijing
BUSINESS&FINANCE 23
U.K. Looks to Be
First to RaiseRates
HEARD ON THE STREET 32

Airbus Vows to FlyWithIts Own Wings
TOULOUSE, France—Airbus
Group NV,emboldened by strong fi-
nancial resultsand an order backlog
extending well intothe next decade,
is turning itsback on itslongtime
European supporters.
Driving the shiftinattitude to-
ward the governmentsofFrance,
Germany, Spain and the U.K. is the
overhaul of Airbus’sgovernancelast
year.But ashiftinthe commercial
aircraftmarket is also at play, said
Chief ExecutiveTom Enders.
“Ten yearsago, almost 50% of
our order intakewas coming from
Europe; last ye ar it waslessthan
10%,” said Mr.Endersinaninter-
view. “It shows that forusEurope is
lessand lessimportant in relative
terms.”
Mr.Enderssaid Airbus has
“walked away” from €623 million
($856 million) in loans from Ger-
manyfor the newAirbus A350
widebody jet. Other governments
have already ponied up their share,
but the German government had de-
layedits contribution to put pres-
sureonAirbus to allocatework in

Germany, whereAirbus assembles
aircraft and manufactures defense
equipment.
Airbus will take asimilar ta ck
when it needs to fund the develop-
ment of futureaircraftprograms in
Germanyand other countries,said
Mr.Enders, relying much le ss on
government support.
“Money is important, but what is
equally important is not to be hand-
cuffed to acertain workshare,” he
said. With interest ratesnow very
low, the alternative—borrowing in
capital markets—is amuch moreat-
tractiveoption, he added.
Mr.Enders’sremarks arethe lat-
est evidenceofAirbus’ sgovernance
shiftatplay. Theaircraftmaker
sealed an agreement last year to
limit the involvementofthe French
and German governmentsand in-
crease the percentageofshares
traded on stock markets.
Streamlining the company’s
oversight wasone of the priorities
of Mr.Enders, who served as co-
CEO of what wasthen known as Eu-
ropean Aeronautic Defence&Space
Co.from2005 to 2007 beforere-

turning to the CEO post in June
2012. One of his firstmoves wasto
trymerging with British defense gi-
ant BAESystems PLC,but German
Chancellor Angela Merkel blocked
thedeal, fearing Germanywould
lose influence.
Airbus and itstrans-Atlantic ri-
valBoeing Co.havebeen at logger-
heads foryearsinside the WTOdis-
putesettlement system over mutual
accusations that they benefit from
unfair stateassistance, although
Airbus has argued all along that the
aid it receives is in the form of re-
payable loans,while Boeing gets tax
breaks that don’t have to be repaid.
Airbus has received billions of
eurosinloans from European gov-
ernmentstosupport the develop-
ment of newjetliner models over
the past four decades.This includes
a€500 million loan from Germany
forthe A350 four yearsago.
AGerman economics ministry
spokeswoman said earlier this
month that the latest offer to Airbus
“remains on the table.”
Airbus doesn’t need the cash. It
has some €9 billion to €10 billion on

itsbooks thanks to booming Airbus
Please turn to page 21
BY DAVID PEARSON
‘Europe is lessand lessimportant,’Airbus CEOTom Enders said Wednesday.
European PressphotoAgency
 Rolls-Roy ce introduces newjet-
engine designs 21
Hit Movie Brightens
TheScene forLego
Thepopularity of “The Lego
Movie” maybecoming at just the
right time forDanish toymaker
Lego A/S, which is expected to re-
port an abrupt slowdowninits U.S.
businessin2013 year afterseveral
yearsofheady gains.
Closely held Lego is slated to
publish its2013 financial results
Thursday.
Soren Torp Laursen, who runs
Lego’s North American business,
said in arecent news release that
U.S. sales growth last year “was
moremoderat ethan the supernatu-
ralincreases we recorded over the
last eight years.”
Lego’s interlocking plastic bricks
have remained wildly popular,even
as demand forother tr aditional toys
has weakened amid competition

from digital games,including mobile
apps that canbeplayedonApple
Inc.’siPad. Lego has said that U.S.
and European toymarketsare being
pressured by the flood of newcom-
petition.
TheU.S.slowdowncame ahead
of thelaunch of “The Lego Movie, ”
which has been No.1atU.S.box of-
ficesfor three successiveweeks.
Lego, which gets ashareofthe film’s
take,has said it expectsthe movie to
boost sales in 2014, both in North
Americaand in other markets, such
as Europe.
Citing datasupplied by NPD
Group,Legosaid itsU.S.consumer
sales grew 1% to $1.35 billion in
2013,giving the companya7.8%
shareofthe U.S. toymarket and po-
sitioningitas“America’sthird-larg-
est toymanufacturer.”
U.S. sales makeupasubstantial
portion of Lego’s revenue,which to-
taled about $4 billion in 2012. Two
yearsago, Lego’s U.S. sales soared
26%, helped by astrong reception
forabarrageofnew products.
Recently, Lego has been signaling
aslowdown. It said in September

that salesinNorth Americaand
Latin Americarose 4% in the first
half of 2013.Taken with the NPD
data, that means Lego’s momentum
in the Americas essentially came to
ahalt in the second half of 2013,
likely boosting the company’sreli-
ance on better-performing markets
in Asia and Europe.
ButEuropean demand also ap-
pearstobeslowing.InJanuary,
Lego said sales in Germany—another
key market—grew 4% in 2013,down
from 13% in 2012. Germanymade up
slightly morethan 10% of Lego’s
2012 sales.
Lego’s U.S. struggles reflect a
wider downturn in the world’sbig-
gest toymarket, which generates
about $22billion in annual revenue
forthe industry, NPD says.
Lego had already been relying on
Hollywood to help offset the indus-
trymalaise.The companyhas prof-
ited formanyyearsthrough itstie-
inswith popular movie franchises
such as StarWars, HarryPotterand
the Avenger s. But “The Lego Movie”
is taking the company’saffiliation
with the big screen to anew level.

Thus far,the movie has pulled in
some $183 million at the U.S. boxof-
fice and over $90 million abroad.
—Jens Hansegard
contributed to this article.
BY CLEMENS BOMSDORF
GOOD BY E
COMPLICATED.
HELLO
AUTOMATED.
THENETWORK MUST TRANSFORM.
Brocade fabric tech nologysimplifiesnetwork operationsthroughautomation,
enabling near “zero-touch” configurationand provisioning.Using fabrics, busi nesses
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faster compared to status quo netwo rks.
Get thefacts: brocade .com/ networkfacts
#networkfacts©2014Brocade CommunicationsSystems,Inc.All Rights Reserved .
THE WALL STREETJOURNAL. Thursday, February27, 2014|15
OPINION
Afew hoursafter acolorful
closing ceremonyofthe Sochi
Olympics,which were intended as
ashowcase foramodern and self-
confident Russia, acourt in Mos-
cow sentenced agroup of opposi-
tion activiststoprison terms
ranging from two to four years.
Their “crimes” all involved protest-
ingPresident Vladimir Putin’sin-

auguration at arally in Bolotnaya
SquareinMay 2012.
Monday’sverdict prompt ed a
street demonstration, which was
violently broken up by Russia’sspe-
cial riot policeknown as the OMON.
Hundreds of prot est ers—ac cording
to official figures—weredetained
and hauled away to policestations.
They included opposition leaders
Alexei Navalnyand Boris Nemtsov,
who were sentenced, respectively,
to seven and 10 days in jail on the
charge of “disobeying the authori-
ties.” Thearrest of Mr.Nemtsov,an
elected regional assemblyman, ap-
pearstobeindirect violation of a
Russian lawthat limitsprosecution
of elected legislators.
Moscow’s renewedcrackdown
heralds the end of ashort-lived
Olympic reprieve, which brought
the release of anumber of political
prisoners. It’snow areturn to
businessasusual forthe Kremlin.
Theintentionally harsh sentences
forthe Bolotnaya Squareprison-
ers, and the arrestsofthose who
raised their voices on their behalf,
aremeant to serveasawarning

and to prevent the reemergenceof
street prot estsagainst Mr.Putin’s
corrupt and undemocratic rule.
It is no coincidencethat this
crackdown came days afterthe vic-
tory of apopular uprising against
Mr.Putin’sclient regime in
Ukraine—a regime that tried to
emulatethe Kremlin’ssystemof
cronycapitalism and authoritarian
control. Vladimir Putin, it seems,
has drawnprecisely the wrong les-
sons from the success of Ukraine’s
Maidan movement. TheKremlin
faultsViktorYanukovychnot for
killing his ownpeople,but fornot
killing enough of them.
Forweeks Russian television
stations have carried hate-filled
appeals to crush the protestersin
Kiev.Russian Prime Minister
DmitryMedvedev’spublic advice
to Mr.Yanukovychwas to not be a
“doormat people wipe their feet
on. ” All this has leftlittle doubt as
to the Kremlin’sthinking: In Mos-
cow'sview, the eventsinUkr aine
amount to aWestern-inspired coup
d’état—similar to the one that, by
the Kremlin’sparanoid reasoning,

almost succeeded in Russia during
the massprotestsof2011 and
2012. Hencethe harsh sentences
forthe Bolotnaya prisoners—a
messagethat Mr.Putin, unlikeMr.
Yanukovych, will not be a“door-
mat. ”
ForVladimir Putin, maintaining
the status quo in Ukraine wasnot
primarily about preserving apost-
Soviet sphereofinfluenceorrecre-
ating aMoscow-led empire—al-
though such outcomes would have
been added benefits. His principal
fear is that ademocratic,pro-Eu-
ropean Ukraine—a countrywith
similar cultural, linguistic and reli-
gious traditions—will set a“dan-
gerous” precedent forRussia, and
that it will be only amatteroftime
beforeRussian citizens begin to
demand asimilar level of political
and economic freedom.
Theuncomfortable truth forthe
Kremlin is that the underlying rea-
sons forUkraine’suprising arealso
present in Russia. Arecent survey
by the independent pollster Levada
Center showedthat only 22%of
Russianswant Vladimir Putin to

remain president beyond his cur-
rent term—a rather unimpressive
figure forsomeone who controls
the messageonevery single na-
tional television network.Evenac-
cording to official numbersfrom
the flawed2012 presidential elec-
tion, Mr.Putin has lost majority
support in Moscow,Kaliningrad,
Vladimir,Omsk,Vladivostok and
other major population centers
acrossthe country.
In the 2013 mayoralelection in
Moscow—the firstimportant poll
in yearsthat had asemblanceof
competition—Mr.Navalny, one of
the opposition leadersarrested on
Monday, came from nowhereto
win 30% of the vote.While Russia’s
traditionalist and lesseconomi-
cally and technologically developed
regions still provide Mr.Putin’s
party with votes, educated, mod-
ernized, urban middle-classRus-
sians increasingly reject an archaic
political system based on nepo-
tism, repr es sion and international
confrontation. Russia’sdynamic is,
in this way,not unlikeUkraine’s
East-W est political divide.

Awise statesman would pre-
parefor inevitable changebygrad-
ually expanding his country’spolit-
ical spaceand allowing for
increased competition, both in the
media and at the ballot box. In
opting forincreased repression,
Vladimir Putin—while denouncing
the uprising in Ukraine—is doing
everything to produceone in Rus-
sia.
Mr. Kara-Murza is aleader of the
People’s Freedom Party, ademo-
cratic opposition party in Russia.
Apoliceofficer detains aprotesteroutside the Moscow court on Feb. 24.
Associated Press
TheEnd of Russia’sOlympic TruceonDissent
BY VLADIMIR V. KARA-MURZA
As Ukrainians mourn their dead
and vow to prosecut etheir re-
cently deposed leader,the valor of
those who died must nowinspire
otherstobuild anew Ukraine wor-
thyoftheir struggle and sacrifice.
Democracyand abetterfuture
must be secured in pragmatic
terms.Economic benefitsmust be-
gin to flow in tandem with
Ukraine’snascent commitment to
genuine self-government and re-

sponsibility.
Europe and the U.S. arerushing
to put together billions of dollars
in financial aid forUkraine,keenly
aware that they have been granted
asecond chance. Last November’s
potential trade deal with the Euro-
pean Union wasscuttled when
Ukraine turned to Russiaatthe
last moment foreconomic suste-
nance.
But if effortstoforge anewly
generous packageget boggeddown
in trans-Atlantic negotiations and
the institutional requirementsof
the International MonetaryFund,
the moment to help Ukraine gain a
solid economic footing maybe
lost. And should itscurrency, the
hryvnia, meanwhile succumb to
panic and meltdown, the opening
forfreedom maybesquandered.
Themost expedient way to es-
tablish asound-money founda-
tion—in keeping with Ukrainian as-
pirations foranindependent
nation capable of succeeding in the
global economy—would be to initi-
ateacurrencyboard.
Currencyboards helped launch

the free-market reforms and bud-
getary discipline that liftedformer
Soviet republics Estonia and Lithu-
ania out of the wreckageofcentral
planning in the early 1990s.
Slumped production gaveway to
economic growth and financial sta-
bility afterEstonia replaced the
hyperinflating Soviet ruble with its
owncurrency, the kroon, anchored
by the German mark in June 1992.
Lithuania opted to fixits currency,
the litas,tothe U.S. dollar when it
adopted acurrencyboardinMarch
1994; capital inflows amounting to
almost 7% of GDP poured intothe
countrythat same year.
Acurrencyboardfor Ukraine
could obtain similar results. It
would provide asolid platform for
effectively utilizing financial assis-
tanceand thereby shoreupfragile
hopes forimproved economic
prospects.
Howwould it work? Acurrency
boardisanexchange-ratearrange-
ment whereby the monetaryau-
thority is required to exchangelo-
calcurrencyfor the foreign anchor
currencyatafixed exchangerate.

Absolute, unlimited convertibility
must be maintained to ensurethat
all holdersofthe nation’snotes
and coins canconvert them into
the anchor currencyondemand;
this is best achieved by holding re-
serves equal to 100% of the na-
tion’smonetarybase or slightly
more.
Under acurrencyboard, there
is no central bank to intervene in
foreign-exchangemarketsorma-
nipulateinterest rates. “By design,
acurrencyboardhas no discre-
tionarymonetarypowers and can-
not engageinthe fiduciaryissue of
money,” according to SteveHanke,
professor of economics at John
Hopkins University.“Itsoperations
arepassiveand automatic.”
This turns out to be agreat vir-
tuefor an emerging-market coun-
tryseeking to gain the confidence
of citizens and establish credibility
with outside investors. If Ukraine
were to willingly embracethe dis-
cipline and accountability inherent
in acurrencyboard, it would send
asignal of economic self-assurance
and underlying faith in the produc-

tivepotential of itspeople.
Thechoiceofanchor currency
is totally voluntary. Ukraine’scen-
tral bank has long targeted the dol-
lar in trying to managethe ex-
changeratevalue of the hryvnia,
so it might wish to formalizethe
dollar anchor in itscurrency
board. People arefamiliar with the
dollar as areferencepoint of value
forthe hryvnia.
Thecurrent problem is that
Ukraine’scentral bank has used a
crawling-peg approach, which can
no longer be sustained. Nothing
prevent sthe hryvnia nowfrom
sliding intooblivion. TheKiev Post
reportsthat individuals and com-
panies seeking to convert bank de-
positsintohardcurrencymust
wait six working days to do so.
While the EU,the U.S.,and the
IMF acknowledgethat Ukraine’sfi-
nancial situation is dire, they have
not put forwardaplan to quickly
addressthe deterior ating currency
situation. Thejoint statement is-
sued on MondaybyU.S.Treasury
Secret aryJack Lewand IMF Man-
aging Director Christine Lagarde

offered the vaguepromise that “if
afully established government in
Ukraine makes arequest, then the
IMF would provide the best foun-
dation foreconomic adviceand fi-
nancing.”
Catherine Ashton, the EU’sfor-
eign-affairschief ,islikewise turn-
ing to the IMF as the arbiter of aid
forUkraine.She is keenly aware,
no doubt, of the difficulties of get-
ting a28-nation bloc to move
quickly to help itsneighbor.
But canUkraine wait? And what
happens to the hryvnia in the next
10 days?IfanIMF progr am for
comprehensiveeconomic reform is
present ed to adestabilized Ukraine
weeks down the road, disillusion-
ment will have already start ed to
take hold.
And then thereisthe danger
the IMF will do moreharm than
good. If it imposes itsusual for-
mula of budgetaryausterity and
currencydevaluationasacondi-
tion forWestern loans—plus in-
sistsonraising the priceofnatural
gastoUkrainian homes and indus-
tries—it will spur further tension

within an already divided popula-
tion.
Amuch betterstrategyfor
Ukraine would begin with the im-
mediatecreation of acurrency
boardanchored by the dollar.For-
eign investment would start to
contributedirectly to the solid
growth of amonetarybase on
which to build afunctioning econ-
omy.
If Ukraine chooses to switch to
the euroatsome point in the fu-
ture, as Estonia did in January
2011 and Lithuania plans to do in
2015,itwill be afurther boon to
full European integration. Indeed,
it will testifytothe dedication and
resolveofUkrainians to embrace
the responsibilities—along with
the benefits—of free marketsand
democratic values.
But firstUkraine must get
through this perilous period. Fix-
ing the hryvnia to the dollar is the
fastest way to restoreUkrainians’
faith in their money.
Ms. Shelton, author of “The Com-
ing Soviet Crash” (Free Press,
1989) and “Money Meltdown”

(Free Press, 1994), is asenior fel-
low at the Atlas Economic Re-
search Foundation.
If the hryvnia succumbs to panic and meltdown, the opening forfreedom may
be squandered.
Getty Images/AWLImages RM
ACurrencyBoard forUkraine
BY JUDY SHELTON
Ukraine’suprising fans
Putin’s fears of losing
control overRussia.
18 |Thursday, February27, 2014 THE WALL STREETJOURNAL.
by howpoorly Western markets are
doing,” said Mr.Goings. “It’sdriven by
wherethe people are.”
In the fourth quarter of 2013,
Tupperware’snet sales rose 1% to
$717 million, while earnings rose 20%
to $89.7 million, as strength in
emerging markets offset weaknessin
developed countries such as the U.S.
Emerging markets made up 63% of
Tupperware’ssales in the latest
quarter.
Indonesia is Tupperware’slargest
market. In the fourth quarter,
Tupperware’ssales thereclimbed 33%.
Sales in China were up morethan 20%
and sales in Brazil up 19%.
Kathy Chu

 CONSUMER GOODS
Tupperware Expects ItsSales
To RiseinEmerging Markets
TupperwareBrands Corp. Chief
ExecutiveRick Goings said Wednesday
he expects at least80% of the
company’srevenue to come from
emerging markets by 2019, up from
about 60% in the fourth quarter,
driven by aswelling middle classin
countries such as Indonesia, China and
Brazil.
In an interviewwith The Wall
Street Journal, Mr.Goings said the
Orlando,Fla., companyisgrowing
fastest in markets wherewomen are
looking foropportunities to earn a
living. Tupperwarerelies on alargely
female sales forceof2.9 million to sell
its brightly colored food-storage
containers to friends and family
through house parties.
The expected growth “is notdriven
Switzerland’sPPLI providers were
the subject of a Wall Street Journal
report this week thatsaid the U.S.
JusticeDepartmentand Internal
Revenue Serviceare scrutinizing the
use of the product, which blends
banking and insurancebylinking the

value of aclient’spolicy to assets held
in aSwissbank account.
The U.S. authorities areexamining
whether Americans used Swiss
insuranceproducts to hide assets, the
WSJreported, citing people with
knowledge of the matter.
Mr.Pfister’scomments came as
SwissLifesaid full-year net profit
surged to 781 million Swissfrancs
($880 million) in 2013, up almost
700% from 98 million Swissfrancs a
year earlier.The performancewas
driven by a5.4% increase in premiums
and policy fees and a1%reduction in
group costs.
Neil MacLucas
 INSURANCE
Swiss Life Chief Executive:
Products AreTax Compliant
The chief executiveofSwissLife
Holding AG said on Wednesdaythat
the insurer’s privateplacementlife
insuranceproducts were tax compliant
and notdesigned to attract untaxed
assets owned by U.S. clients.
Bruno Pfistersaid that, from the
end of 2008, Zurich-based SwissLife
had only accepted U.S. customer
assets forthe product, which is often

referred to as PPLI, if theyweretax
compliant. The companystopped
taking newbusinessfromU.S. clients
in 2012, he said.
SwissLifehasn’tbeen contacted by
U.S. authorities with regardtothe
PPLI business, he added. “Weconsider
our PPLI portfolio to be tax compliant,”
Mr.Pfistersaid. “It has neverbeen our
goal to attract untaxed assets.”
INDEX TO BU SINESSES
ABB 23
Agricultural Bank of
China 23
Airbus Group N.V 17,21
Andreessen Horowitz 22
AnekaTambang 21
Anheuser-Busch InBev.19
Apple 17,20
Arbaya Energi 21
AT&T 8
BAIC Motor 23
BlackBerry 20
Boeing 21
BYD 23
Carlsberg 19
Carlyle Group 19
Citigroup 25
Comcast 18
Credit Suisse Group 24

Daimler 23
Deere 12
Dongfeng Motor Group 32
DowChemical 12
DuPont 12
Facebook 22
Financial Conduct
Authority 24
FireEye 24
Freeport-McMoRan
Copper &Gold 21
FXCM 24
General Electric 24
Goldman Sachs Group 25
Google 20,22
Grupo Modelo 19
Heartland Payment
Systems 24
Hebei Iron and Steel
Group 23
Heineken 19
Honda Motor 32
ITV 18
Japan Post Group 23
Joyful Frog Digital
Incubator 22
Juniper Networks 32
Lego 17
LinkedIn 20
Mars 22

Maxim Asset
Management 19
Microsoft 20
Mondelez International22
Monsanto 12
Mt. Gox 1
Newmont Mining 21
News Corp 18
Nissan Motor 32
Nokia 20
Orion Group 22
Oshkosh 31
Palo Alto Networks 32
Prime Meridian 13
PSAPeugeot Citroën 32
Rakuten 22
RedDot Ventures 22
Renault S.A 32
Rolls-Royce Holdings 21
Samsung Electronics 20
Sprint 8
Target 24
Telefonica Deutschland 32
T-Mobile Austria 32
T-Mobile Germany 32
United Rusal 21
United Technologies 21
Veolia Environnement 19
Verizon
Communications 8

Viber Media 22
Viki 22
Wells Fargo&Co 24
Westfield Group 19
Westfield Retail Trust.19
WhatsApp 22
Businesses
This index of businesses
mentioned in today’s
issue of The Wall Street
Journal is intended to
include all significant
referencetocompanies.
Firstref er enc etothe
companies appears in
bold face type in all
articles except those
on page one and the
editorial pages.
Corrections Amplifications
TheStraitsExchange Foundation, Tai-
wan’ssemioff icial organization that
handlesaffairswith China, wasincor-
rectly referred to as Strait Exchange
Foundation in aWorld News article Feb.
12 about talks between China and Tai-
wan.
Readers canalert the London newsroom of The
Wall Street Journal to anyerrorsinnewsarticles
by emailing or by calling

+44(0)20 7842 9901.
BUSINESS &FINANCE
ITV BulksUpProduction Arm
LONDON—ITV PLCWednesday
hailed the performanceofits U.S.
businessand said itsfast-growing
production arm is seeking more
deals,asthe U.K. media company
reported a27% jump in itsyearly
profit.
One of ITV’smost popular
shows,“Downton Abbey,” is co-pro-
duced by Carnival Films,part of
Comcast Corp.’ sNBCUniversal, and
PBS’ sMasterpieceseries,both based
in the U.S. But to insulateitself from
advertising marketsITV Studios is
spending to createits owntelevision
shows,such as the British drama
“Mr.Selfridge, ” forits ownchannels
andtosell to overseas broadcaster s.
ITV Studios also is expanding by
pursuing acquisitions in the U.K.,as
well as the U.S.,whereitisnow a
top-fiveindependent content pro-
ducer. “If[the right opportunities]
come up,then we will go forthem,”
said Chief ExecutiveAdam Crozier.
In thepast year and ahalf,ITV
hasbought U.S. production compa-

nies ThinkfactoryMedia, Gurney
Production andHigh Noon Enter-
tainment. Last week,itacquired
NewYork-based DiGa Vision.
“Ifyou look at our American
business, our revenue doubled last
year and tripled since2010,” said
Mr.Crozier.
TheU.K.’sbiggest over-the-air
commercial broadcast er,which also
shows music competition “The X
Factor,” said 2013 net profit rose to
£326 million ($544 million) from
£256 millionin2012. Revenue in-
creased9%to£2.39 billion.
Nonadvertising re venue gained
17%to£1.21 billion, and revenue
from ITV Studios rose 20% to £875
million. Thecompanysaid it expects
advertising revenue from itschan-
nels,which rose 2% last year,to
climb 2% in the firstthree months
of this year.Its advertising revenue
also is set foraboost this summer
from the FIFAsoccerWorld Cup.
“The television-advertising mar-
ketcontinues to showsigns of im-
provement,” Mr.Crozier said.
ITV proposed afull-year divi-
dend of 3.5pence, up 35% from a

year earlier and aspecial dividend
of 4pence—valued at £161 million—
in line with last year.
“Our financial position has been
transformed,” Mr.Crozier said.
Jane Anscombe, analyst at Edi-
son Investment Research, said ITV’s
strategic approach is paying off.
ITV,which is four yearsintoa
five-year plan to generatehalf its
revenue from sourcesother than
traditionaltelevision-advertising
spots, is also pushing itsdigital-me-
dia presencetocapturetablet and
smartphone users, as well as spon-
sorship deals.
Thecompanyexpectsonline,pay
and interactivetopost double-digit
revenue growth this year,helped by
the launch of the paydrama channel
ITV Encore.
Mr.Crozier ruled out ITV bid-
ding for U.K. over-the-air peer Chan-
nel 5, which is up forsale.“We are
not looking at Channel 5,” he said.
BY SIMON ZEKARIA
Prosecutors
In theU.K.
Charge Fo ur
Journalists

LONDON—British prosecutors
said four journalists—three of them
from News Corp’s Sunnewspaper—
have been chargedwith misconduct
in public office, amovethat putsa
fresh spotlight on journalistic prac-
tices at anewspaper that is part of
Rupert Murdoch’smedia giant.
Reporters from News Corp’s
daily the Sun—TomWells,Neil Mil-
lardand Brandon Malinsky—have all
been chargedwith misconduct in
public office, the CrownProsecution
Servicesaid Tuesday. Graham
Brough, ajournalist who used to
writefor the Trinity Mirror Group
title the Daily Mirror,was also
charged.
News U.K.,NewsCorp’sU.K.
newspaper unit, declined to com-
ment. Aspokesman forTrinity Mir-
rorsaid the companywasn’t pre-
pared to comment immediately.
News Corp also owns DowJones &
Co., the publisher of TheWall Street
Journal.
All four men were arrested as
part of Operation Elveden, apolice
probe intoalleged corrupt payments
by journaliststopoliceofficers, in

exchangefor tips and stories.
Former policeofficer Sam
Azouelos and former corrections of-
ficerReggie Nunkoo were also
chargedwith the same offense,said
prosecutors. Prosecutorsand the
policedidn’t disclose anyother de-
tails of the alleged offenses.
Attemptstoreach the six indi-
viduals chargedweren’t successful.
Themen have yettoenter pleas,
which could happen at subsequent
hearings.
Operation Elveden waslaunched
to runinparallel with investigations
intophone hacking,orthe illegal in-
terception of voice-mail messages,
and computer hacking.Separately,
former News Corp employees in-
cludingRebekah Brooks and Andy
Coulson, both of whom onceedited
News Corp newspapers, arefacing
chargesrelated to alleged phone
hacking,briberyand obstruction in
acontinuing trial at London’sCen-
tral Criminal Court. They andfive
otherdefendantshavepleaded not
guilty to the charges.
Thechargesare cent er ed around
allegations of phone hacking at

News Corp’ snow-closed News of the
World tabloid. Ms.Brooks and Mr.
Coulson both served as topeditor at
that paper.Ms. Brooks also edited
theSun.
Themen chargedinthe Elveden
inquiryare to appear March 10 be-
fore Westminst er Magistrates Court.
BY ALEXIS FLYNN
‘DowntonAbbey,’above,isone of ITV’smostpopular series, but the broadcasteraims to create moreofits ownshows.
Associated Press
BUSINESS BRIEFS
Online
>>
Formorebreaking news,goto
WSJ.com/Business and follow
@wsjbusinessonTwitter.
14 |Thursday, February27, 2014 THE WALL STREETJOURNAL.
OPINION:REVIEW&OUTLOOK
T
he fight over democracyinHong
Kong took abrutalturn Wednes-
daywith the stabbing of journal-
ist Kevin Lau, aprominent critic of gov-
ernmentpolicy. Mr.Lau waschief editor
of the Ming Paonewspaper until his fir-
ing last month, which touched off pro-
testsoverthe decline of pressfreedom
and other civil liberties in the semi-au-
tonomous Chinese territory. He is now

hospitalized with life-threatening inju-
ries.
Theattack occurred in broad daylight
on asidewalk near Mr.Lau’sapartment.
Aman in ahelmet stabbed the journalist
six times beforeescaping on amotor cy-
cle driven by an accomplice. Policeare
reviewing security cameras forleads on
suspects. Hong Kong is an exceptionally
safecity,and random crime—especially
of this magnitude—is almost unheardof.
So suspicion that the attack waspoliti-
cally motivated is widespread and war-
ranted.
Such fearsare fueled by the victim’s
high profile as critic of the governments
in both Beijing and Hong Kong.Asedit or
of Ming Pao, Mr.Lau investigated the
suspicious 2012 death of former political
prisoner Li Wangyang, which Chinese
authorities called asuicide though it ap-
peared to be amurder.Healso recently
joined with the Int ernational Consortium
of InvestigativeJournal-
ists in exposing the off-
shorebank accounts
whereChina’stop leaders
stash their enormous fam-
ily wealth.
Mr.Lau wasaparticu-

larly strong opponent of the Hong Kong
government’ s2012 attempt—at Beijing’s
urging—toimpose aprogram of “na-
tional education” on public schools.
When Hong Kongerslearned that teach-
ing materials promoted the Chinese
Communist Party as a“pr ogr essiv e, self-
less, and united ruling group,” they
massed in protest and eventually forced
local officials to scrap the scheme.
AfterMr. Lauwas firedlast month
and replaced with aMalaysian journalist
who had supported “national education, ”
morethan 90% of Ming Pao’sstaff filed
apetition demanding an explanation.
Four columnistsprotested by leaving
their spaces blank—among them Demo-
cratic Party founding chairman Martin
Lee—while some 110 staffersdressed in
black and held asilent
protest outside the news-
paper’s office.
Theattack on Mr.Lau
is especially alarming
because it’spart of a
pattern. Recent years
have seen aspateofphysical attacks on
Hong Kong media critical of China’s
ruling Communist Party and itslocal
allies.These include the baton beating

of iSun Affairspublisher Chen Ping, the
theftand burning of some 20,000 cop-
ies of Apple Daily newspaper,and the
failed attack on the home of Apple
Daily ow ner JimmyLai. Manysuch
cases go unsolved. Police“can’t chase
people into mainland China,” Mr.Lai
hassaid, “and that is wherethese at-
tacks come from.”
This pattern of violence—along with
the recent firing of Mr.Lau and others—
brought an estimated 6,000 Hong
Kongersintothe street fora“Free
Speech, Free Hong Kong” rally on Sun-
day. In the wake of Wednesday’sstab-
bing,tens of thousands could mar ch this
weekend.
Hong Kong’schief executive, Leung
Chun-ying, denouncedWednesday’sat-
tack as a“savage act” and visited Mr.
Lauinthe hospital. “Hong Kong is alaw-
fulsociety and we will not toleratevio-
lence,” he said.
Perhaps Mr.Leung re alizes that any
appearanceofpolitical violencethreat-
ens Hong Kong’ sreputation forcivic and
commercial freedom, along with Bei-
jing’sreputation both among the terri-
tory ’s citizens and global investors.
Bringing swiftand transparent justiceto

the attacker and anyone who mayhave
participated in Wednesday’sstabbing is
the only way to start restoring that rep-
utation.
J
ohn Dingell announced on Monday
that he plans to retirefromthe
U.S. House of Representatives at
the end of this Congress, and his initial
parting shot came with unusual ill-
grace. “I find serving in the House to
be obnoxious,” the 87-year-old told the
Detroit News.“It’sbecome very hard
because of the acrimonyand bitte r-
ness, both in Congressand in the
streets.”
TheDemocrat from southeastern
Michigan wasfirst elected in 1955 and
never served in the minority until after
the GOP sweep of 1994. He wasamong
those who,Congressafter Congress,
steadily built the modern administra-
tivestate with itsvast powers to re-
distributeincome and regulatetopun-
ish or reward companies.
In hispolitical heydayasChairman
of the Energy and Commerce Commit-
teeinthe 1980s,Mr.
Dingell liked to boast
that his writ extended to

everycorner of the
American economy. He
wasn’t far off.Yet when
all economic and cultural
questions become political, is it any
wonder that politics becomes moreac-
rimonious?
Mr.Dingell mayhaveintended his
“obnoxious” barb at the teaparty and
Americans angrywith Washington, but
most of those people don’t knowhow
to maneuver through the corridorsof
power. They can’t affordtohiresome-
one from “the Dingell bar,” the name
adoptedwith an almost civic pride by
the Washingtonlawyerswho were well
paid forrepresenting
businesses caught in the
Dingell investigative
cross-hairs. Manywere
hisformer staffers.
The“Dingell method,”
another phrase from the
era, wastoconduct an investigation,
selectively leak what his staff found to
anewspaper and TV network (double
the media points), then haul the poor
business targetsfor apublic grilling
before the cameras.The journalists
would win prizes forthe appearanceof

enterprise.The CEOs would be advised
by the Dingell bar to be obsequious
and remorseful whether guilty or not.
Theacrimonywas one-sided.
Theiro ny of Mr.Dingell’slater
yearsisthat he waspushed aside by
younger liberals from the Watergate
generation likeHenryWaxman and Ed
Markey. Mr.Dingell represented car
makersand the United AutoWorkers,
which oftenmade him lessideological
on environmental regu lation and cul-
tural issues.
Forthose sins,Democratsdeposed
him as committeechairman in 2008 in
favorofMr. Waxman, who recently an-
nounced that he will also retireatthe
end of this Congress. If he and Mr.
Dingell areunhappy with our current
politicaldistemper,they might con-
sider that this is the House they built.
B
ipartisan achievementshavebeen
rare sinceRepublicans took the
House in 2010 ,but one of them was
the 2012 reform of federal flood insur-
ance.Ameretwo yearslater,House Re-
publicans want to abandon their work and
expand the middle-class
subsidy on thebacks of

taxpayers.Where’sthe tea
partywhen youreally need
them?
Thegoal of the Biggert-
Waters reform of 2012 was
to requirethat property
ownersgradually adjust to
paying actuarially sound ratesfor tax-
payer-backed flood insurance. Millions of
Americans have long paid below-market
ratestocover their shoreline homes,leav-
ing the National Flood InsuranceProgram
under waterbysome $24billion after
Hurricanes Katrina and Sandy.The federal
program has $1.3trillion in outstanding
insurance, though privateinsurersprovide
flood coverage forlosses abovethe federal
$350,000 limit and areeager to do more.
Under the reform, already-subsidized
vacation homes,businesses and “severe
repetitiveloss” properties would see pre-
miums rise 25% per year until they paid
actuarial rates. Ownersofprimar yresi-
dences with federal flood insur ancewould
see no changeunlessthey
sold their home,inwhich
case the newhomeowner
would paythe actuarial
rate.
Biggert-Watersalso in-

structed the Federal Emer-
gencyManagement Ag ency
to collect morerefined
datawhen it conductsits periodic remap-
ping surveys. This newinformation, such
as current elevation levels,would help the
federal flood insur anceprogram moreac-
curat ely pricepremiums.Property owners
would paynew rateswhen the maps were
done,aprocess which could take three to
five years.
Even these modest priceincreases
were toomuch forbeach-side mansion
ownersand the Realtorswho want to sell
those homes,and so they descended on
Congresstodemand repeal. Michael
Grimm of NewYork City’s StatenIsland
has led the charge forrepeal, and the
House will vote on his bill as early as
Wednesday.
He proposes to limit the breadth of
FEMA’sremapping (which hasn’t even be-
gun), repeal the home-sale triggersonew
ownersdon’t payhigher rates, and retr o-
actively refund premiums forproperties
sold sinceJuly 6, 2012. Some 700,000 of
1.1 million coveredproperties would enjoy
taxpayersubsidies in perpetuity.
To (ostensibly) payfor this,the
Grimm bill would impose asurcharge of

$250 on allbusinesses and non-primary
residences with federal flood insurance
and $25 forprimaryresidences.So, say,
the Michigander who lives on alakebut
haslittle risk of flooding would foot the
bill foraPalm Beach mansion. FEMA
would have lessinformation by which to
charge sound premiums.Wewould be
back to the futureofencouraging more
people to liveinflood zones with tax-
payers socializing the hurricane risk.
SenateDemocrats, who passed abill to
delayBiggert-WatersinJanuaryinthe
face of similar political pressure, would
jump at the chancetoexpand this middle-
classentitlement. They also don’twant to
facethe fact that the federal progr am’sfi-
nances can’t be fixedwithout charging
market rates.
Political discredit herealso goes to
House GOP leaders, who chose to dodg e
the regular legislativeorder that Speaker
John Boehner promised in 2011. He is let-
ting Mr.Grimm’sbill avoid vetting in
committeeand is bringing it directly for
aquick and dirty floor vo te.IfSenator
TedCruzand HeritageAction arelooking
forsomething of substancetorebel
against, this is it.
Who Stabbed Kevin Lau?

TheHouse That John Built
Flooding Capitol Hill
ThedeanofCongress
sa ys he’ll retirefrom
the bodyhemade.
Hong Kong’sbattle
fordemocracy
takesabrutal turn.
Republicans cave to
the Realtorson
taxpayer flood
insurance.
Comments? TheJournal welcomes
readers’ responses to
all articles and editorials.Itisimportant to
include your full name,addressand
telephone number.Please send letters to
the editor to:
THE WALL STREETJOURNAL. Thursday, February27, 2014|19
BUSINESS &FINANCE
ABInBev NetGet sBoost
FromGrupoModeloCuts
LEUVEN,Belgium—Anheuser-
BuschInBev NV is taking itscost-
cutting knifetoGrupo Modelo SAB,
the Mexican breweritacquired con-
trol of last year.
AB InBev,the world’slargest
brewer, said Wednesdaythat it has
already managed to shave hundreds

of millions off the brewer’sannual
costssinceitcompleted the $20 bil-
lion purchase of the half of Grupo
Modelo it didn’t already ownin
June last year.
ThebrewerofBudweiser,Stella
Artois and Bud Light also posted a
45% increase in fourth-quarter
profit, driven in part by cost cutting
at GrupoModelo.
Thegain came despiteweak beer
sales throughout much of AB In-
Bev’s brewing empire, reflecting the
still-shakystate of the global econ-
omy. Volume sold by the co mpany
fell 2% in the most recent quarter,
compared with ayear earlier.
AB InBev’s fourth-quarter net
profit totaled $2.52 billion, up from
$1.74 billion ayear earlier.Several
one-time items helped the latest re-
sult, including the return of excess
funds that the companyhad contrib-
uted to itsemployee-retirement
plan in Brazil. A15% decline in fi-
nancing costsalso contributed to
the improved profit.
Shares in AB InBev rose 2.8% to
€76.34 ($104.93) in Br ussels.
“In extreme marketswith hic-

cups,they managed to perform
well,” said Kris Kippers, an analyst
at Petercam in Brussels.“It is strik-
ing howdifferent they arefrom
their colleagues.”
Heineken NV and Carlsberg A/S
have struggled to increase profitsin
the faceofflagging beer sales.
AB InBev’s revenue rose slightly
to $11.71 billion, from $11.62 billion.
Thelatestresult wasmainly attrib-
utable to revenue growth in Brazil,
wherepriceincreases and strong
salesofpremium beershelped off-
set bad weather andhigh food-price
inflation that sapped the public’s
disposable income.
In Mexico, earningsbeforeinter-
est, taxes, depreciation and amorti-
zation rose 44% to $575million.
Thebrewersaid it achieved $360
million in annual synergies from
Grupo Modelo in the final seven
months of last year.
Afurther $75million came from
applying AB InBev’s cost-cutting
techniques beforethe deal had been
officially completed. Those tech-
niques involvescrutinyofeach bud-
getitem. Theprocess requir es man-

agerstojustifyevery cost anew. The
companyalso uses itssignificant
sizetonegotiatefavorable deals
with suppliers.
AB InBev management is hoping
to achieve$1billion in annual cost
cutsbythe end of 2016 at Grupo
Modelo.Analystssay the company
might managetoachieveall those
savingsbythe end of 2015.
TheU.S., AB InBev’s big gest mar-
ket, wasaweak spot. Volume in the
brewer’sNorth American division,
which is mainly the U.S.,fell 1.8% in
the fourth quarter and 2.4% over all
of 2013.“We expect an improvement
in the industryvolume trend in
2014,driven by astronger econ-
omy,” Chief Financial Officer Felipe
Dutrasaid.
Theyear is off to arough start,
because of heavy snowfall in the
U.S.,Mr. Dutrasaid.
ThesoccerWorld Cup in Brazil,
AB InBev’s second-largest market, is
likely to help sales. Thecompanyes-
timates the event could boost vol-
umes by one to two percentage
pointsinBrazil forthe year.
AB InBev al so planstosell Co-

rona, Grupo Modelo’s main beer,in
moremarketsoutside Mexico. “It is
averyexciting brand,” Chief Execu-
tiveCarlos Britosaid.
BY MATTHEW DALTON
AB InBev,led by CEOCarlosBrito, above,posteda45% gain in quarterly profit.
Reuters
Sales Go Flat
Anheuser-Busch InBev's sales volume by region, in millions of hectoliters
The Wall Street JournalSource:the company
0 12525 50 75 100
North America
Latin America North
Asia Pacific
Latin America South
Western Europe
Mexico
Centraland Eastern Europe
Global export and holding companies
2013
2012
Westfield We ighs
St ock-Listing Spot
SYDNEY—Westfield Group,one
of the world’slargest ownersof
shopping malls,said it maylist in
theU.S.orLondon afteraplanned
breakup of itsglobal mall empire.
Theseparation plan is expected
to tie the company’sfortunes more

closely to glitzy newprojectssuch
as aretail wing of NewYork’sWorld
Trade Center.The 95-year-old com-
panymay firstneed to overcome
some investors’ concerns,though,
aboutthe terms of adeal that will
have it jettisoning manyolder prop-
erties to focus on tonier develop-
mentsinLos Angeles and NewYork.
“We’regoing to look at listing
thecompanyinNew York,London
or hereinAustralia—all of them are
under consideration,” Westfield
Group Chief ExecutivePeter Lowy
said in an interviewWednesday.
Thebreakup plan, disclosed in
December,calls forWestfield to sell
itsremaining 50% interest in Austra-
lian and NewZealand malls to West-
field Retail Trust,which wasformed
in 2010 to house itsmore-maturelo-
calassets. Thelisted trust, to be re-
named ScentreGroup ,will own47
malls in Australia and NewZealand,
leaving Westfield Group with 39 cen-
ters in the U.S. and five in the U.K.
and Europe valued at $18 billion.
Thedeal aims to unlock the
value of itsU.S.and European as-
sets, which have ahigher proportion

of newdevelopmentsand thus more
upside potential. Theproperties in
Australia, wherethe Lowy family
startedthe companyin1959,are
seen as moreofastable yield play.
Shareholdersare due to vote on
the plan in May. Westfield Group
shareholderswill get1,000 shares in
the newWestfield Corp.and 1,246
shares in Scentr eGroup forevery
1, 000 shares in Westfield Group that
they own. Shareholdersinthe retail
trust will getacombination of cash
and shares,terms some investors
have suggested mayneed to be
sweetened to win their endorsement.
“A number of large investorshave
expressed their opposition to the cur-
rent terms,” said Winston Sammut,
managing director of Sydney-based
fund manager Maxim Asset Manage-
ment,which owns shares in both
Westfield and Westfield Retail Trust.
“I’m aware anumber of medium-
sized institutional investorsare also
of thesame mind. It’snot over yet.”
Mr.Lowy playeddownthe pros-
pect of an amended deal. He said re-
cent talks among management and
investorshad been positive.

Westfield on Wednesdayre-
ported anet profit forthe year
through December of 1.60 billion
Australian dollars(US$1.44 billion),
down 6.7% from the previous year.
Hurt by the slowergrowthpro-
file of itsolder malls and the end of
along mining boom in Australia,
which has shaken consumers’ confi-
dence, Westfield returned atotal of
just 31% over five years, compared
with over 250% forSimon Property
Group Inc.and Taubman Centers
Inc., according to SNL Financial.
ThecompanyWednesdaysaid it
would sell another batch of U.S.
malls valued at about US$1 billion.
BY ROSS KELLY
Rubenstein Doubtful Over
Bu yout-Shop TaxChange
BERLIN—Carlyle Group LP co-
founder David Rubenstein said U.S.
lawmakersare “unlikely” to take up
legislation this year that could po-
tentially increase taxesondeal prof-
itsreaped by private-equity
managers.
Mr.Rubenstein’scommentscame
afterthe chairman of the U.S. House
Ways and Means Committee, Repub-

lican Dave Camp of Michigan, said
Congressshould “clean up” the
treatment of private-equity firms’
shareofdeal profits, called “carried
interest.” These profitsare cur-
rently treated as capital gains and
taxedatalowerratethan ordinary
income.
“W ecan clean up provisions like
carried interest that allowcertain
private-equity firms to getthe in-
vestment-income taxrateonwhat
anyone else would call normal wage
income,” Mr.Camp said in an opin-
ion piecepublished Wednesdayin
TheWall Street Journal outlining a
series of tax-reform proposals.
But Mr.Rubenstein, whose firm
is based in Washingtonand who is
oftenviewedbyprivate-equity
watchersasanauthority on national
politics,said various factorswould
likely preventany measures from
taking hold anytime soon.
Montana Democrat Max Baucus,
previouslythe chairman of the Sen-
ateFinanceCommittee, wasjust
confirmed as the U.S. ambassador to
China, lowering the chances that
chamberwill ta ke up such legisla-

tion, Mr.Rubenstein said. In addi-
tion, aterm limit will force
Mr.Camp to relinquish his commit-
teechairmanship in the House next
year,hesaid.
“It’sunlikely that will ge tinto
law,” Mr.Rubenstein said of
Mr.Camp’ sproposal beforeanaudi-
enceatthe SuperReturn Interna-
tional private-equity conferencein
Germany’scapital. “I don’t think
thereislikely to be anytax-reform
legislation passed by this Congress
at all.”
Private-equity -firm managers, in-
cluding Mr.Rubenstein and found-
ersofother large buyout firms,have
argued that carried interest they re-
ceiveafter investing in acompany
and later selling it should be treated
as acapital gain. Proponentsoftax-
ing these profitsatahigher rate
contend the money is compensation
forservices private-equity managers
render when working on companies
they take private.
Thecarried-interest debatebub-
bled up in the wake of the recession
and financial-overhaul lawlater
takenuponCapitol Hill. But the is-

sue so far hasn’t been addressed in
anylegislation passed by Congress.
Still, manyprivate-equity manag ers
expect at some point to receivethe
more stringent taxtreatment.
Meanwhile, Mr.Rubenstein said
sovereign-wealth funds will soon
become the largest contributorsof
investment capital to private-equity
firms,surpassing giant pension
funds.Sovereign-wealth funds cur-
rently manageabout $5 .4 trillion, a
number that will exceed $8 trillion
by 2020,hesaid.
BY MIKE SPECTOR
Veolia CEOWins Backing From Board
PARIS—Veolia Environnement
SA’s boardWednesdayendorsed
Chairman andChief ExecutiveAn-
toine Frérot, marking the second
time in two yearsthe head of the
waterand wasteutility has success-
fully resist ed pressur etostepdown.
Subject to shareholder approval
in May, the boardsaid it would ap-
point Mr.Frérotfor four more
years.
Thedecision representsavictory
forthe executive, who had come un-
der pressurefromone of the group’s

biggest shareholders, the Dassault
family,which owns a6.3%stake.
Veolia has been hardhit by the
economic crisis in Europe,which
has eaten intoits long-term financ-
ing while calling intoquestion some
of itsmost profitable wasteand wa-
tercontractsinEurope.The utility
hasmoved to restructureits busi-
nesses and geographical exposure,
while selling some assetsinthe U.K.
and the U.S.
Veolia shares aretrading at a
fifthoftheir value six yearsago.
Against this backdrop,Dassault
shareholderspushed forachangeof
leadership,according to aboard
member andpeople familiar with
the matter. “The Dassault family has
been frustrated with the returns,”
theboardmember said.
Thedissent against Mr.Frérot
wasfirst reported earlier this
month by French magazine Le Point,
which said Dassault shareholders
were seeking to replaceMr. Frérot
with David Azéma, asenior official
currently managing the French
agencythat oversees government
stakes in privatecompanies.

But on Tuesday, Mr.Azéma told
Reuters he was“not acandidatefor
the position.” Mr.Azéma didn’t re-
spond to several requestsfor com-
ment.
TheFrench government, Veolia’s
largest shareholder with a9.3%
stake, wasset to support Mr.Frérot
at Wednesday’sboardmeeting,the
boardmember said.
Mr.Frérotalready faced an at-
tempt to unseat him two yearsago
with pressurefromsome members
of the board. In the end, the board
endorsed Mr.Frérotand his strate-
gic plan.
BY GÉRALDINE AMIEL
AND INTI LANDAURO
THE WALL STREETJOURNAL. Thursday, February27, 2014|13
David Nelson, afarmer near Fort Dodge,
Iowa,who began testing FieldScriptsabout
three yearsago, says it recognized nutrients
in soil on apatch of land previously used as
acattlefeedlot.
Theconclusion wasbased on fertilizer
maps and soil samples gathered by Mr.Nel-
son, 39.Monsanto’ ssystemsaid the land
could support denser rows of corn, and
FieldScriptshelped Mr.Nelson increase his
corn harvest last year by 8to12bushels an

acreabovethe 10-year averageof190 bush-
els.The increase brought Mr.Nelson an addi-
tional $34 to $51 an acre. “W e’r epushing ev-
eryacretoits maximum potential,” Mr.
Nelson adds.
Other farmersare reluct ant. TheAmeri-
canFarm Bureau Feder ation, atrade group
forfarmers, has warned membersthat seed
companies touting higher crop yields from
prescriptiveplanting have avested interest
in persuading farmerstoplant more. The
trade group also says the services might
steer farmerstobuy certain seeds,sprays
and equipment fortheir land.
JerryDemmer, a61-year-old corn and
soybean farmer near Albert Lea, Minn., is
thinking about trying adata-analysisservice
but has “tossed and turned” over who will
control the information. “It’sour data,” Mr.
Demmer says,but “I’m not surehow we’re
going to prot ect that.”
One reason that suspicions rundeep
among some farmers: asurge in seed prices
as the biggest companies piled up moremar-
ketshareduring the past 15 years, largely
through takeovers. Monsantoand DuPont
sell about 70%ofall corn seed in the U.S.
Last year,farmerspaid about $118 an acre
forcorn seed, up 166% from the inflation-ad-
justed cost of $45 an acrein2005,according

to estimates from Purdue University.
Companies saythe higher prices reflect
the benefitsofusing their genetically modi-
fied seeds,including biggercrops and resis-
tancetoinsectsand weed-killing sprays that
have helped reducethe usageofharsh pesti-
cides.
Mr.Fraley,the technologychief at Mon-
santo, says it also decides annual seed prices
based on seed supplies and commodities
prices.Datagathered by FieldScriptsaren’t
likely to be “a particularly big” factor in pric-
ing decisions,hesays.“We’ll priceour seed
the way we’vealways priced our seed.”
Mr.Foresman of DuPont says the com-
panydoesn’t use dataitcollectsfromfarm-
erstohelp set seed prices.
Battles with seed makersoverwho con-
trols the seeds produced by genetically mod-
ified crops makesome farmersevenmore
wary about sharing information with the
companies.
In 2012, DuPont hired Agro Protection
USAInc., an intellectual-property-pr otection
firm staffed largely by retired law-enforce-
ment officers, to watchfor signs of farmers
who aresaving second-generation seeds.
Saving the seeds violates licensing agree-
mentsfarmerssign when they buy seeds.
Monsantohas filed lawsuitsagainst

nearly 150 U.S. farmerssince1997 forre-
planting seeds that contain the company’s
propriet arycharacteristics.Last year,the
companywon aU.S.Supreme Court victory
in acase against an Indiana farmer who was
75 yearsold at the time.
Themost-worried farmersfear that
somehowrivals could use the datatotheir
ownadvantage.For example,ifnearby farm-
erssaw crop-yield information, it might spur
unwanted competition to rent farmland,
pushing land costshigher.
Other farmersfretthat Wall Street trad-
erscould use the datatomakebetsonfu-
tures contracts. If such betspush futures-
contract prices lowerearly in the growing
season, it might squeeze the profitsfarmers
otherwise could lock in fortheir crops by
selling futures.
So far,thereare no publicly known exam-
ples whereafarmer’s prescriptive-planting
information wasmisused. Monsantoand Du-
Pont officials saythe companies have no
plans to sell datagathered from farmers.
Deeresays it gets consent from customers
beforesharing anyoftheir data.
Kip Tom, 58,has been testing Monsanto’s
system on his 8,100-hectar efarm near Lees-
burg, Ind., forabout three yearsand says he
“would not plant 1acrewithout it.” He will

start paying forthe servicethis year.But he
keeps aclose eyeonhow dataflowfromand
to his farm machinery.
Last year,Mr. Tomunpluggedacable in-
side one of his combines ,which he worried
wascapturing details of his planting algo-
rithm as he harvested corn. Mr.Tom says the
combine’smanufacturer “didn’t have anyin-
volvementindevelopingthat intellectual
property or that information, so we didn’t
believethey should have access to that.”
Some farmershavediscussed aggregating
dataontheir ownsothey could decide what
information to sell and at what price. Other
farmersare joining forces with smaller tech-
nologycompanies that aretrying to keep ag-
ricultural giantsfromdominating the pre-
scriptive-planting business.
Theowner of one small company, Steve
CubbageofPrime Meridian LLC,says his
Nevada, Mo., company’sindependencefrom
the seed, machineryand chemical industry
“adds credibility,” giving farmersanalterna-
tivewith “their overall best interest sin
mind. ”
About 100 farmersuse Prime Meridian’s
precision-seeding service, and Mr.Cubbage
expectsthe number to “increase dr amatically
over the next few years.” Thecompanyisde-
veloping asystemtostore farm-by-farm in-

formation on acloud-computing servicethat
could giveaccesstoseed dealers, financial
advisersand other outsidersapproved by
farmers.
TheFarm Bureau has held internal talks
about whether the trade group should set up
itsown computer serversasadatastore-
house,says MaceThornton, aspokesman for
the trade group.Nodecision has been
reached.
Big companies “can help me in the short
term,” says Brian Dunn, 43,who grows
wheat, corn and sorghum on 1,000 hectares
near St.John, Kan. “But arethey going to be
my friend in the long term?” He uses Prime
Meridian’sservice.
Mr.Hurst, the Missouri farmer concerned
that seed companies will keep most of the
benefitsofprescriptiveplanting forthem-
selves,istesting DuPont’stechnologyon
some of his land to see what happens.
In amovetoease farmers’ worries,Mon-
santosaid last month that it supportsindus-
trywide standards formanaging information
collected from fields.The companyaims to
build afreeonline datastorehouse where
farmerscould upload information ranging
from crop yields to planting dates.Monsanto
says it wouldn’t access the datawithout per-
mission from farmers.

Mr.Fraley says Monsanto’sfarmer sur-
veys showthat the companyis“enjoying
the highest level of trust among our custom-
ersthat we’veeverseen.” Some farmers
“will be early adopters,” he says,while
“some of the folks aren’t going to open up
right yet.”
Mr.Nelson uses tractor-mountedcomputers to help makedecisions about his plantings. High-tech planting advicecould boost crop output by about $20 billion ayear,Monsanto estimates.
Ryan Donnell for The Wall Street Journal
IN DEPTH
20 |Thursday, February27, 2014 THE WALL STREETJOURNAL.
LinkedIn Updat es Profile,LookstoChina
LinkedIn Corp.wantstobethe
placewhereworkersofthe world
unite, but Wall Street isn’t con-
vinced it’sachieving itsgoals fast
enough.
In thepast week,the company
has unveiled two initiatives that
showChief ExecutiveJeff Weiner’s
ambition to turn the professional
networking siteintoaglobal bazaar
forfinding work,
recruiting ta lent
and keeping current
with industrynews.
LinkedIn said
last week that its
277million userscan nowpublish
theirown articles on the website, a

movethat potentially transforms a
person’srésumé intoaportfolio
with essays ,work samples,video
clips and employment history—and
fills LinkedIn’spages with free con-
tent.
And on Mondaythe companyun-
veiled aChinese-languageversion of
itssite. With the newsite, LinkedIn
aims to bring major Chinese employ-
ersand the country’s140 million
professionalsontoits networking
platform.
LinkedIn’slatestquarterly results
showedsteady,ifslowing,growth.
Thenew initiatives could help the
companystretch the amount of time
usersspent on the site, ameasure
whereithas laggedbehind competi-
tors likeTwitterand Facebook.Ac-
cording to comScore, visitorsspent
an averageof23minutes on
LinkedIn during the month of Janu-
ary, afigurethat has been largely
flat over thelast year.
In an interview, the 44-year-old
CEO discussed the company’slatest
moves,and his vision forapost-ré-
sumé world. Edited excerpts:
WSJ: Whoare LinkedIn’spotential

usersinChina?
Mr.Weiner: There’satleast three
waystothink about economic op-
portunity in China. One is Chinese
citizens—people living in China
looking foreconomic opportunity.
Asecond aremultinational [cor-
porations] looking to expand their
presenceand hirethe right talent to
do that successfully.
Andthen you’vegot companies
that have had significant success in
China that areexpanding and are
looking to identifyand hirethe right
talent to makethat expansion suc-
cessful…It’snot just about multina-
tionals doing businessinChina but
about successfulChinese companies
expanding their presenceonaglobal
basis.
WSJ: Hiring and recruiting in China
is very different from the U.S.;for
example,inChina, recruitersand
professionals aremoreopen about
salaries.How will LinkedIn adapt?
Mr.Weiner: That’sone of the rea-
sons we’resoexcited about Derek
Shen, who is our newly announced
president of LinkedIn China…that’s
what he’sbeen asked to do here.

He’sverymuch takenastartup
mentality and we’renot just going
to be localizing in terms of lan-
guage…but also thinking about how
we canbest meet the needs of our
membersinChina.
WSJ: Is thereconcern on the part of
the statethat Chinese nationals
could use LinkedIn as an organizing
tool?
Mr.Weiner: We’vebeen able to oper-
atenow in China foryears. Our vision
is well aligned with what the Chinese
government is trying to accomplish
right now: cr eating ec onomic oppor-
tunity in athriving middle class.
WSJ: Arethereany restrictions for
howpeople on mainland China can
access the site?
Mr.Weiner: Theremay be.We’re
expecting requeststofilter con-
tent. We arestrongly in support of
freedom of expression and we are
opposed to censorship but recog-
nize that in order to obtain ali-
cense [in China], therewill be re-
queststofilter content and that’s
going to be necessaryfor us to
achievethe kind of scale that we’d
like.

WSJ: Tell me howthat works.Will
someonefromthe Chinese govern-
ment be in regular contact with you
about what canand can’t go on the
site?
Mr.Weiner: This is the firsttime
we’reavailable in alocal languagein
China, and we just recently applied
forour license,sowe’regoing to
have amuch betterunderstanding in
the weeks and months ahead.
WSJ: Is the sitehosted in China?
Mr.Weiner: To date, it has not been.
ForLinkedIn membersoutside of
China, we will not be serving their
datafromwithin China. ForChinese
memberswho livewithin China,
we’ll be serving that data[from
China].
WSJ: Will aperson’ sessay or portfo-
lio eclipse the importanceoftheir
résumé?
Mr.Weiner: From my ownanecdotal
experience, when I’m meeting some-
one forthe firsttime,they’ll say:
‘Hey Iread yo ur latest influencer
post andthank yousomuch for
sharing,’ or ‘Here’swhat Ithought.’
In addition to reflecting who you
areasaprofessional, [an article] is

areally compelling way to engage
with other people and potentially
people that you’regoing to do busi-
nesswith. It’snot just about atitle
andadescription of yo ur job.It’s
aboutrich media, it’sabout avideo
of that keynote[speech] you
did…it’sabout the general contrac-
toruploading not adescription of
the dream house they just com-
pleted, but the pictures .It’ sabout all
the expertise and the experience
that you’vegained in that job that
you’rewilling to share.
WSJ: Updating your LinkedIn profile
is oftenread as asign that you’re
lookingfor work.Now you’vegot a
reason to updateitalot more. Will
that raise some eyebrowsamong
employers?
Mr .Weiner: People areupdating their
profiles when they’renot just look-
ing forjobs.Because of the way the
world works today, people seeking
to do businesswith youare going to
be doing asearch on your name.
Your LinkedIn profile is going to
showupatornear the topofthe
search results. That meansyou geta
chancetoput your best profes sional

foot forward, completely indepen-
dently of whetheryou’reseeking a
job.
WSJ: Is all of this newcontent going
to increase the amount of time indi-
viduals spend on the site?
Mr.Weiner: We actually generated
morepostsinthe firsttwo hoursof
the extension of this platform than
the team had forecast forthat entire
day…We’vecontinued to see asteady
stream of the volume of poststhat
has exceeded our expectations and
the engag ement on those postsare
doing very well.
WSJ: Advertising accountsfor about
aquarter of LinkedIn’srevenue.
With moreand morecontent, do you
expect ad revenue to increase as a
percentageofthe total?
Mr.Weiner: It’scertainly possible…I
think that will be in part driven
through engag ement and thr ough ef-
fortslikethe expansion of our pub-
lishing platform. We’vebeen having
some success with sponsored con-
tent and specifically sponsored up-
dates.
WSJ: Giveusaglimpse into
LinkedIn’slong-term future.

Mr.Weiner: With regard to net-
works,the goal thereistoconnect
allprofessionals and we’reabout
277million right now…Webelieve
the immediately addressable oppor-
tunity is 600 million professionals.
Longer term, the vision is to create
economic opportunity forthe three
billion people in the global work-
force.
We’remapping the global econ-
omy…aprofile forevery member of
theglobal workforce;aprofile for
everycompanyinthe world; every
job offered by those companies,
whether that’sfull time or tempo-
rary or for-profit or volunteer; every
skill required to obtain those jobs; a
presencefor everyuniversity or
higher education organization that
canhelp our membership acquire
theskills necessarytoobtain those
jobs.
BY REED ALBERGOTTI
LinkedIn CEOJeff Weiner, shown in September,saysthe company’slong-term vision is to create economic opportunity
forthe three billion people in the global workforce.The company’slatestresults showedsteady,ifslowing, growth.
Reuters
Huawei Tu rns Sights to U.S. Smartphone Mark et
BARCELONA—Locked out of the
lucrativeU.S.telecoms network mar-

ket, Hua weiTechnologies Co.now
has itseyestrained on America’s
smartphone sector.
HuaweiChief ExecutiveEric Xu
told reporter satthe Mobile World
CongresshereWednesda ythat the
Chinese company’sfocus will shiftto
the U.S. this year—afternot releasing
newdevicestherelast year—comple-
menting itspush in Europe and Asia.
“W e’regoing to makeachang e
this year,and we’regoing to con-
tinue to launch smartphones forthe
U.S. market,” said Mr.Xu, one of
three senior executiv es who rotate
through the CEO job.Mr. Xu is set to
hand the baton to Guo Ping by the
end of next month, under the com-
pany’s six-month rotating CEO sys-
tem.
Mr.Xusaid the companywon’t
trytochallengethe positions of Ap-
ple Inc.and Samsung Electronics Co.
in the U.S. Rather,the companysees
itself competing with the large num-
ber of manufacturersfighting for
market shareunder those two giants,
he said.
This week,Huaweitook the
wraps off several new, high-end

smartphones and tablets. One was
the seven-inch MediaPad X1—a ra-
zor-thin €300 ($412) tablet, powered
by Google Inc.’sAndroid operating
system, that itsexecutives repeat-
edly compared with Apple’shigh-end
iPad Mini.
Huawei’spush intothe largely
high-end U.S. market comes as sev-
eral devicemakerslikeNokia Corp.
and BlackBerryInc.are turning their
eyes to faster-growing,entry-level
smartphone marketsinplaces such
as Indiaand Af ric a. Wh ile Huawei
will continue to sell ultracheap An-
droid smartphones in these markets,
Mr.Xusaid the cheap phones aren’t
itsmain focus.
“W e’renot interested in the low
end of the market. Only by pursuing
high end canwepursue our growth,”
he said.
Consumer devices account foran
increasing part of the Chinese com-
pany’s revenue .Last year,they ac-
counted for23%, or about $9.1 bil-
lion, of itsoverall revenue,the
companysaid. This year,itaims to
increase smartphone sales to be-
tween 80 million and 100 million de-

vices,from50million last year.
Itsrangeoftabletsand smart-
phones largely runAndroid’ soperat-
ing system. Thecompanyhas also
joined with MicrosoftCorp.tomake
Windows Phone-powereddevices.
Sales of these haven’t been satisfac-
tory,Mr. Xu said.
Currently,Huawei’ssmartphone
sales largely stem from countries in
Asia. China alone accountsfor 40%
of the company’ssmartphone sales,
whileother major marketsinclude
theMiddle East and Africa, Latin
Americaand Europe.
In abid to improveits brand
awarenessinthe U.S.,Huaweilast
year signed several sponsorship
deals with the likes of U.S. pop stars
the Jonas Brothers. Thecompanyhas
also recruited several foreign execu-
tives to help it transition from alow-
cost maker of telecom equipment to
aglobal maker of itsown-brand
products. Those include Colin Giles,
aformer Nokia veteran, who now
runs the company’sconsumer group.
“F or sureweneed to build the
brand, we accept that, ” Mr.Giles said
in an interview. “Also we need to im-

provedistribution and getgood at
retail.”
That is allthe morechallenging
in the U.S.,wherelawmakershaveef-
fectively shut Huaweiout of the
wireless-equipment market. Acon-
gressional report in 2012 concluded
that Huaweiposed risks to national
security,alleging that the companies’
equipment could become avehicle
forChinese spying.The companyhas
called the report misleading.
—Sam Schechner
contributed to this article.
BY SVEN GRUNDBERG
BUSINESS &FINANCE
Huawei’ssmartphone
sales largely stem from
countries in Asia.China
alone accounts for 40%
of its smartphone sales.
12 |Thursday, February27, 2014 THE WA LL STREETJOURNAL.
Information Harvesting
Sows the Seeds of Mistrust
Some Farmers Worry
Data MightBeSold
To Traders, Wind Up
In the Hands of Rivals
Or AidAgricultur al Firms
B

ig agricultural companies saythe next
revolution on the farm will come from
feeding datagathered by tractors and
other machineryintocomputersthat tell
farmershow to increase their output of
crops likecorn and soybeans.
Monsanto Co., DuPont Co.and other
companies areracing to roll out “prescrip-
tiveplanting” technologytofarmersacross
the U.S. who knowfromyearsofexperience
that tinyadjustmentsinplanting depth or
the distancebetween crop rows canmakea
big differenceinrevenue at harvesttime.
Some farmersare leeryabout the new
technology. They worrytheir datamight be
sold to commodities traders, wind up in the
hands of rival farmersorgivemoreleverag e
to giant seed companies that areamong the
most enthusiastic sellersofdata-driven
planting advice. Thecompanies vow not to
misuse the information.
“There’salot of value to that informa-
tion, ” says Brooks Hurst, 46 yearsold, who
works 2,400 hectares with his father and
brothersnear Tarkio ,Mo. “I’m afraid, as
farmers, we arenot going to be the ones
reaping the benefit.”
Manytractorsand combines already are
guided by Global Positioning System satel-
lites that plant ever-str aight er rows while

farmers, freed from steering,monitor prog-
ress on iPads and other tablet computers
nowcommon in tractor cabs.
Thesame machinerycollectsdataon
crops and soil. But manyfarmershavehap-
hazardly managed the information, scattered
in piles of paperwork in their offices or
stor ed on thumb drives clattering in pickup-
truck ashtrays.The dataoften were turned
over by hand forpiecemeal analysis.
Sellersofprescriptive-planting technol-
ogywant to accelerat e, streamline and com-
bine all those datawith their highly detailed
recordsonhistoric weather patterns,topog-
raphyand crop performance.
Algorithms and human expertscrunch all
the dataand canzap advicedirectly to farm-
ersand their machines.Supporterssay the
push could be as important as the develop-
ment of mechanized tract or sinthe firsthalf
of the 20th centuryand the rise of geneti-
cally modified seeds in the 1990s.
Theworld’sbiggest seed company, Mon-
santo, estimates that data-driven planting
advicetofarmerscould increase world-wide
crop production by about $20 billion ayear,
or about one-thirdthe value of last year’s
U.S. corn crop .
Thetechnologycould help improvethe
averag ecorn harvest to morethan 200 bush-

els an acrefromthe current 160 bushels,
companies say. Such again would generat e
an extra$182 an acreinrevenue forfarmers,
based on recent prices.Iowa corn farmers
gotabout $759 an acrelast year.One bushel
equals morethan 35 liters.
So far,farmerswho use prescriptive
planting have seen yields climb by amore
modest five to 10 bushels an acre, the com-
panies say.
Thegains arelikely to accelerateascom-
panies gather information from morefarm-
ers. Monsantohas been testing atechnology-
poweredplanting servicecalled FieldScripts
with farmerssince2010 and is starting to
pitch it this year in Illinois,Iowa,Minnesota
and Indiana, four of the biggest corn-produc-
ing states .Farmerspay the company$10 an
acre.
No one knows howmuch is being spent to
develop and market high-tech planting serv-
ices,but 20% of Monsanto’sprojected
growth in per-shareearningsby2018 could
come from FieldScriptsand other technol-
ogy-fueled improvements, estimates Michael
Cox, co-director of investment resear ch at
securities firm Piper Jaffr ay Cos.
“I see it as another potential transforma-
tion of the company,” says RobertFraley,
chief technologyofficer forMonsanto, based

in St.Louis.Hehelped develop Monsanto’ s
firstgenetically modified seeds in the early
1980s.
In November,Monsantopaid $930 million
to acquireClimateCorp., aweather-data-
mining companyinSan Franciscolaunched
by former Google Inc.executives.Agricul-
tural cooperativeLand O’Lakes Inc.bought
satellit e-imaging specialist GeosysinDecem-
ber foranundisclosed amount.
DuPont announced this month acollabo-
ration with aweather-and-market analysis
firm, DTN/TheProgressiveFarmer,topro-
vide real-time climateand market informa-
tion to DuPont’sdata-services users.
Late last year, Deer e &Co. agreed to
beam datafromthe Moline,Ill., company’s
green tract or s, combines and other machin-
erytocomputer serverswhereDuPont and
DowChemical Co.can formulatespecialized
seed-planting recommendations.
“When afarmer buysacombine or buys
atractor,they’vegot all these waystocol-
lect information,” says DuPont marketing
manager JoeForesman. TheWilmington,
Del., company’sPioneer unit has been sift-
ing through farm-level datafor about ade-
cade,but now“this spaceisstarting to ma-
ture. ”
DuPont and Monsantoare excited about

their data-driven services,partly because
they canberolled out to farmersmuch
faster than newseeds,which oftenmust en-
dureadecade of development and regulatory
review.
Manyfarmerswho have tried prescriptive
planting areenthusiastic about the results.
BY JACOB BUNGE
Ryan Donnell for The Wall Street Journal
*Doesn’tadd up to 100% due to rounding †Companywas later acquired Sources: ContextNetwork (marketshare); Monsanto(field analysis)The Wall Street Journal
The twobiggestcorn-seedcompanies got
even bigger in the past decade…
Bumper Crop
…and nowMonsanto, DuPont and othersare pitching
‘prescriptive planting’services to increase crops.
Corn-seed
market share*
Acornfield analysis in Iowa:
Howdata-driven planting
services work:
1. The farmer provides field
boundaries, historic crop yields,
soil conditions and other data to
acompany.
2. The companyanalyzes the
data and its owninformation
about seed performancein
differentareas and soil types.
3. The companysends a
computer file with

recommendations back to the
farmer,who uploads it into a
planter.
4. The farmer's equipmentthen
plants based upon the
recommendations. The company
monitors weather and other
factors, advising farmers on how
to manage crops as theygrow.
Circled areas: Lowernumber of seeds
per acrerecommended
Shaded areas (uncircled): Portions of
the field thatcan grow morecorn and
can takemoreseeds per acre
2004
DuPont: 33%
Monsanto: 14%
Garst: 6%†
Syngenta: 5%
Golden
Harvest: 4%†
Dow: 4%
AgReliant: 3%
Croplan: 2%
Fielders Choice: 2%†
NC+: 2%†
Wyffel: 1%
Beck’s: 1%
Crow’s: 1%†
2013

DuPont: 35%
Monsanto: 35%
AgReliant: 6%
Syngenta: 6%
Dow: 4%
Others: 23%
Others: 14%
David Nelson, afarmer
near Fort Dodge, Iow a,
whobegan testing a
technology-powered
planting servicecalled
FieldScripts about three
yearsago,saysit
recognizednutrients in
soil on apatch of land
previously used as a
cattle feedlot.
Mr.Nelson steps down from the cab
of his tractorcarrying the iPad thathe
uses to plan and implementhis corn and
soybean plantings on his farm
IN DEPTH
THE WALL STREETJOURNAL. Thursday, February27, 2014|21
Rolls-R oyce Holdings
PrepsNew JetEngines
LONDON—Rolls-Royce Holdings
PLC on Tuesda yunveiled details of
itsnextgeneration of engine designs,
which it hopes will be used to power

long-rangecommercial aircr aftfor
Airbus Group NV and Boeing Co.
TheLondon-based engine maker
is turning to geared-turbofan tech-
nologyfor the newengines.They are
designed to be moreefficient than
Rolls-Royce’ smost recent turbine en-
gine,the Trent XWB. Riv al Prat t&
Whitney,aunit of U.S based United
Technologies Corp ., pioneered the
technology.
Thefirst newengine,called the
Advance, is expected to be ready by
the end of the decade; the other,the
UltraF an, is to be ready by 2025.The
UltraF an is meant to build on the Ad-
vanceand offer about 10% betterfuel
consumption and emissions than the
Trent XWB.
Rolls-Royceisthe world’ ssecond-
largest maker of commercial and mil-
itaryjet engines afterGeneral Elec-
tric Co., theexclusivesupplier for
Boeing’scoming twin-engine 777X.
That jetisdue to enter servicein
2020.Rolls-Roycealso compet es
with Pratt&Whitney.
Rolls-Royce’sTrent XWBisthe
only engine used forthe long-range
Airbus A350,which is scheduled to

enter commercial servic ethis year.
Airbus Gr oup NV’schief executive,
TomEnders, said it wasinteresting
that Rolls-Royce had announced
plans forthe newengines.
“The pacemaker so far has al-
waysbeen the airframe manufac-
turer,” Mr.Enderssaid during an in-
terviewafter presenting Airbus’s
full-year earningsinToulouse,
France. “Wehaven’t made adecision
on re-engining anylong-rangeair-
craftyet.”
Rolls-Royceshiftedaway from the
market forsmaller engines that
powernarrow-body jetstofocus on
long-rangeengines forwide-bodied
aircr aftsuch as Boeing’ s787 Dream-
linerand Airbus’ sA380 superjumbo,
along with the A350.
Themovefollowedthe ending of
ajoint venturewith Pr att&Whitney
and adecision not to participatein
the Airbus A320neo (for “newengine
option”)modernization project.
Industryinsidersand analysts
have sug gested that Rolls-Royce’s
moveaway from the narrow-body jet
market wasshortsighted as demand
forthe short-to-medium-haul planes

likethe Airbus A320 family and the
Boeing 737series has triggeredin-
creasedrates in production from
both manufacturers.
Mr.Enderssaid that John Rose,
the predecessor of Rolls-Royce CEO
John Rishton, “effectively managed
them out of the single-aisle business
because he didn’t assessthe situa-
tion and our appetitefor the
A320neo corr ectly.”
Rolls-Roycesaid Tuesdayithad
moved away from but “not out” of
themarket and if an opportunity
came along to develop anew smaller
engine,itwould seriously consider it.
“But we don’t see that happening
until well intothe next decade,” a
spokesmanfor Rolls-Royce said.
Theengine companyhas long
been separat efromRolls-RoyceMo-
torCarsLtd., nowaunit of BMW AG.
—David Pearson
contributed to this article.
BY MARIETTA CAUCHI
Airbus is moving to speed production of its A320 single-aisle aircraft. Above,anA320 from AirMalta in 2012.
Reuters
RusalPlans to Build
Indonesian Refinery
JAKART A, Indonesia— Aluminum

producer United Co.Rusal PLC ac-
cepted Indonesia’scontroversial
movetorestrict the export of min-
eral ores and said it would build a
refinerytocomply with the coun-
try’snew laws.
Thelawshaveraised concerns
amongglobal mineral competitors.
But Rusal Chief ExecutiveOleg Deri-
paska said Indonesia’sstable econ-
omywould enable the countryto
makethe transition from mining to
higher-value processing.Rusal is the
world’slargest aluminum producer.
“I understand the government is
nowfacing pressures ,but Itruly be-
lievethis lawisawin-win and bene-
ficial in the long runfor the coun-
try,” Mr.Deripaska said.
In addition to the broad ore-ex-
port ban, Indonesiaisimposing a
progressiveexport taxfor mineral
concentrat es—rising each year until
hitting 60% by late2016—toforce
mining companies to refine the con-
centrat es .Coal is excluded from the
restriction list.
Copper companies Freeport-Mc-
MoRan Copper &Gold Inc., the big-
gest taxpayerinIndonesia, and

Newmont Mining Corp.havesaid
theobligation to processcopper
with higher purity levels waseco-
nomically unfeasible and viewthe
export taxoncopper concentrates
as abreach of their contractswith
the government.
Small domestic mining compa-
nies have pressured the government
to relax the rules,citing their lack of
financial resourcesand the potential
of thousands of lost jobs.
Though the export lawwas is-
sued in 2009,slowimplementation
led to abelief that the government
wouldn’t followthrough and compa-
nies held off on investing in pro-
cessing facilities.Ittook effect in
Januaryand companies arenow re-
alizing that the government is seri-
ous,Mr. Deripaska said.
“Ifyou introducethe ban and
then revoke it, the second time you
do it, people won’t believeyou,”
said Maxim Sokov, the firstdeputy
CEOofEn+ Group,Rusal’ssingle-
biggest shareholder.
Indonesia is amajor producer of
mining commodities such as nickel
ore, bauxite, tin, copper and thermal

coal. Thecommodity boom in the
2000sboosted mining,but small
margins—particularly forsmall local
mining companies—contributed to
land degradation that cost the gov-
ernment, Mr.Deripaska said.
Theban will help pareenviron-
mental costsassmall mining com-
panies curb production and sup-
port weak aluminum prices in the
medium term by lowering global
supply of ores,Mr. Deripaska said.
He warned that tight supply in
the physical market could push
deliverypremiums,the extracost
paid by buyerstohavethe
aluminum delivered, to morethan
$500 aton by the end of the second
quarter from $400-$450 aton
currently.
Thepriceofaluminum, used in
itemsasdiverse as beveragecans,
automobiles and aircraft, hovers
around $1,700 aton. That is down
from about $2,100 aton ayear ago
and well belowits mid-2008 peak of
nearly $3,500.
Mr.Deripaska forecast prices for
aluminum would rise to $2,500 a
tonand foralumina to between

$425 and $450 aton in the next 2.5
years, estimating that global de-
mand would rise 6% annually in the
next three to four years.
That growth rate represents3.5
million tons of additional demand
foraluminum, Mr.Deripaska said,
part of the reason that Rusal signed
amemorandum of understanding
Tuesdaytocreateajoint venture
with Indonesian company Arbaya
Energi to develop aprocessing fa-
cility that will turn bauxiteintoalu-
mina, an intermediaryproduct used
to producealuminum.
Rusal,based in Russia, didn’t
provide avalue forthe project.
Indonesia’scoordinating minister
foreconomic affairs, Hatta Rajasa,
said the project might represent an
investment of about $3 billion, with
about half of it forthe alumina
plant and another half forsupport-
ing infrastructure, such as roads,
portsand powerplantsinWest Kal-
imantan province.
“W e’ll conduct feasibility studies
by the end of this year and after
that, we canstart the project. The
construction phase usually takes

around 2.5years,” Mr.Deripaska
said. Theannual output might reach
1.5million tons of alumina.
Indonesiaisacountryofsome
17,000 islands and home to more
than 240million people,but much
of the countryisminimally
developed. “It’ sclear that Indonesia
needs industrialization,” Mr.
Deripaska said. “Domestic aluminum
consumption is about 700,000 tons
ayear.In10years, it cangoto2.5
million tons.Welikethis market.”
Indonesia’svast reserveof
thermal coal—used to generate
steam to help turn bauxiteinto
alumina—will makethe plant
efficient, he said.
Rusal in 2007 signed amemo-
randum of understanding with
diversified miner Aneka Tambang
to develop a1.2-million-ton alumina
plant but didn’t followthrough
because of the global financial
crisis.
BY ANDREAS ISMAR
BUSINESS &FINANCE
Airbus Turns BacktoSupporters
aircraftsales.But it has welcomed
this funding in the past.

Also irking the company, Ger-
manyrecently decided to scale back
itsordersfor Eurofighter combat
jets—which aremade by Airbus,
BAESystems and Italy’s Finmeccan-
icaSpA—because of domestic bud-
getpressures.Mr. Enderssaid this
contract is being renegotiated with
German authorities.
Airbus,meanwhile,ismoving to
speed production of itsA320 single-
aisle jet, afterposting astrong im-
provementin2013 earningsthanks
to asharp increase in aircr aftdeliv-
eries.
Themovetoaproduction rate of
46 A320s amonth from 42 starting
in 20 16 wasdictated by aswelling
Continued from page 17 order backlog forthe short-to-me-
dium-haulplanes that means that
airlines ordering noware unlikely to
getthem befor ethe end of the de-
cade.
Boeing is also ramping up pro-
duction of itscompeting narrow-
body 737family to 47 amonth by
2017from42inthe firsthalf of 2014.
Thecompanyhas been cautious
about raising A320 production be-
cause it didn’t want to strain its

supply chain when the companyis
preparing to launch are-engined
version of the plane in 2016 that has
already captured 2,610 orders.
Airbus reported a21% surge in
operating income beforenonrecur-
ring items—akey indicatorofthe
company’sunderlying perform-
ance—to€3.6billion on margin im-
provementsatthe company’scom-
mercial-aircraftdivision. Itsgroup
operating profit margin increased to
6%, still shyofthe 7% to 8% target
set for2015.
Revenue wasup5%at€59.3 bil-
lion, and net profit rose 22%to
€1.47 billion despite€913 million in
chargesthat included €434 million
againstnewly identified costsfor
theA350,which is due to go into
servicebythe end of this year.
Airbus wascautious on the out-
look for2014, saying it expectsa
“moderate” growth in operating
margin. It also said that the A350
programremained “challenging”
andthat anydelays could lead to
extraprovisions.The A350 is at its
most critical stageasthe manufac-
turing processgetsunder way.

The geared-turbofan
technologyisdesigned
to be moreefficient than
the company’smost
recent turbine engine.
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THE WALL STREETJOURNAL. Thursday, February27, 2014|11
WORLD NEWS
Argentina Meltdowns Stick to Schedule
In Buenos Aires these days,aso-
bering theoryismaking the rounds

at coffee houses and backyard asado
grill-outs: Argentina is destined to
experienceaneconomic meltdown
aboutonceper decade,and there
isn’t much anyone herecan do about
it.
“W ehavealways had instability,”
said David Gambarin, an affable 90-
year-old real-estat ebrokerwho still
putsonasuit and goes to his office
in downtown Buenos Aires.“This is
howweArgentines are.”
Barely adecade afterits 2001
crash, Argentina is on the vergeof
turmoil ag ain. Thepeso plunged in
January, and economistssay that a
mix of inflation and recession is likely
to follow. Alr eady,butchersand store
ownersare jacking up prices.Tohold
inflation back,President Cristina
Kirchner is restricting access to dol-
larsand threatening shopkeepers
with closure, but economistsnote
that such tactics failed in the past.
Like many here, Mr.Gambarin is
greeting the tumult with resigna-
tion.ARussian immigrant who ar-
rivedinBuenos Aires as aboy,he
has lived through five coups.His
two children have weathered adic-

tatorship,bank collapses and infla-
tion ratesthat surgedsoquickly in
the 1980s that shoppersran to the
checkout lines to buy items before
they were marked up again. The
current downturn will be the second
crisis in the adult lives of Mr.Gam-
barin’sfour grandchildren.
“W eseem to do everything pos-
sible to fulfill the prophecyof
never-ending crisis,” said Mr.Gam-
barin’s64-year-old son-in-law, Rod-
olfoCohan, over coffee at his apart-
ment in the middle-classBelgrano
neighborhood.
In the 1940s,President Juan
Perónclosed the Argentine economy
to trade with the rest of the world.
In the1960s,the countryendured
stagnation, inflation and military
coups.In1975, 1981 and 1989,failed
economic plans led the currencyto
plunge. Thelast crisis hit in 2001,
when Argentina defaulted on about
$100 billion in sovereign bonds.The
default—the largest ever at the
time—brought down Argentina’s
banks,currencyand government.
EconomistsclassifyArg entina as
an “emerging market, ” but itsecon-

omy, which depends on commodities
such as beef and soy, has been in de-
cline foracentury. In 1910 ,Argentina
wasamong the world’s10wealthiest
countries; today, itsper capitaincome
is lessthan half that of the U.S.
Thereislittle debateabout the
cause of Argentina’sserial financial
woes.“Bad government,” says the
economist Marina Dal Poggetto,a
partner at the Estudio Bein consul-
tancyinBuenos Aires.
Fordecades,Argentine leaders
have overspent during good ye ars
andfailed to save forlean ones.To
prolong the good times,they have
borrowedheavily or simply printed
money.What followedwereboutsof
inflation, currencycrashes,bank
collapses…and worse.
Thewall behind Ms.Dal Pog-
getto’ sdesk is coveredwith picture
frames containing rowafter rowof
Argentine currencies discarded in
various failed economic plans.Ar-
gentina has chopped 13 zerosfrom
itsbank notes since1969.In1991,
forexample,the 10 ,000 austral note
wasreplaced by the one peso note,
worth $1. Today, that same one peso

noteisworth 9cents.
Well-to-do and middle-classAr-
gentines have along historyofsav-
ing in dollarsincase their owncur-
rencycrashes.The government
estimates that Argentines have $160
billion stashed offshoreorinhome
safes.Illegal dollar sellers, called ar-
bolitos, areeverywhereinBuenos
Airestoday.
Forthe poorest Argentines,cri-
sescan mean calamity.With little
access to dollars, the poor watch
helplessly as inflation wipesout the
value of their wages, leaving them
unable to buy food. Mobs looted su-
permarketsacrossArgentina in the
crises of 1989 and 2001.
Mr.Gambarin says that he used
his witstobuild areal-estatebusi-
nessduring alifetime of turbulence,
starting his career around the time
of Mr.Perón’srise.Mr. Gambarin’s
daughter,Nilta, and his son-in-law,
Rodolfo Cohan, began their married
lives at the start of one of Argen-
tina’sdarkest eras,the “Dirty War”
from 1976to1983,when some
10,000 to 30 ,000 people were killed,
mainly by statesecurity services.

TheCohans’ firstchild wasborn
in 1975, the year of the “Rodrigazo”—
ajarring currencydevaluationnamed
afterEconomyMinister Celestino Ro-
drigo. Thepolicywiped out savings
and wagesand pr oduced 35% infla-
tion amonth. Their second child
came the next year,asmilitaryoffic-
ersousted the “Rodrig az o ” govern-
ment and imposed amurder ous dic-
tatorship .Their thir dchild came
along in 1982, the year the military
went to wa rwith the U.K. over the
Falkland Islands—lar gely seen as a
bid to distract Argentines from their
collapsing economy.
Nowanew generation is coming
of ageinturmoil. “Crisis is in the
Argentine DNA,” says Mr.Cohan’s
thirdchild, Luciano Cohan.
It is also in the lesson plans.
When Luciano studied economics at
the University of Buenos Aires ,one
of the school’stop professorswas
Axel Kicillof, an economist with
lamb-chop sideburns whose disser-
tation wasaMarxist take on John
MaynardKeynes.Today, Mr.Kicillof
is Argentina’seconomyminister—
the mind behind itsnationalizations

and itsprice, import and currency
controls.
Luciano said that he no longer
believes Mr.Kicillof’s theories—or
thegov ernment’sstatistics.Arg en-
tina’ sgovernment says that the infla-
tion rate was10.9% in 2013.Anecon-
omist himself now, he captured
thousands of prices from online re-
tailerstocome up with his ownesti-
mate: around 29%.
In the best case,inf lation will
rise to 35% to 40% this year,and the
economywill stagnate, Luciano
says.“Theworst-case scenario is
difficult to put intowords,” he said.
Mr.Gambarin, the family’s 90-
year-old patriar ch, says that he al-
ready knows what will happen.
“Nothing.Nothing will happen. We
areused to this.Every few years,
thingsget wiped out. Eventually
someone else will come in promising
to fixArgentina. But everything will
remain the same.”
BY JOHN LYONS
Awoman windowshops in BuenosAires on Jan. 27. Retailers have been raising prices in recent months.
Associated Press
Australia Pledges Relief
Fo rDrought-Hit Fa rmers

TheAustralian government has
pledged to givefinancial support to
drought-stricken farmers, manyof
whom arestill reeling from the ef-
fectsofaneight-year-long dryspell
that ended in 2009.
Prime Minister Tony Abbottan-
nounceda320 million Australian
dollars(US$288.6 million) drought-
relief packageonWednesday, the
majority of whichwill be allocated
as loanstofarms.The rest of the
money will go toward emergency
waterinfrastructureprograms,pest
management and social and mental-
health services to help farmerscope
with the effectsofthe drought.
TheNational Farmers’ Federa-
tion estimates that the country’sag-
ricultural sector contributes to
about 12% of Australia’sGDP.
An area larger than Franceand
Germanycombined has been classi-
fied as drought-stricken by the gov-
ernment. TheAustralian Bureau of
Agricultural and Resource Econom-
ics and Sciences warned this month
that the country’ssummer crop
could fall by 25% to 4million tons in
2013-14, with Queensland and north-

ern NewSouth Wales hit particu-
larlyhard. Meanwhile,cattlefarm-
ershavebeen destroying livestock
as prices have collapsed from
around A$500 foracalf to A$200.
Thedecision on the packageby
the government to givefinancial as-
sistancetofarmersunderscores the
divisions in the Liberal-National co-
alition on farms policy. Agriculture
Minister Barnaby Joyceisdeputy
leader of thejunior National Party,
whichisseen as favorable toward
providing support forfarmers, but
the ruling pro-businessLiberal Party
has been wary of promising more
subsidiesand handouts.
During adrought between 2001
and 2009,the Australian govern-
ment gaveabout A$4.5billion in aid
to the agricultural industry. Drought
wasdeclared again in partsofin-
land Queensland in Aprillast year.
However, Treasurer JoeHockey
said at the beginning of this month
that farmersshould not expect a
multibillion-dollar re scue package,
as speculation started to mount
over whether the government was
considering aA$7 billion rescue

packagetorelievefarmers’ debts.
Wednesday’sannouncement
comes as support forMr. Abbott’s
government has slipped with polls
showing support forthe opposition
Labor Party is increasing.
BY ISABELLA STEGER
Hong Kong Ex -Editor Stabbed
Theformer editor in chief of
Ming Pao, aprominent Hong Kong
newspaper,was stabbed Wednesday
and has been hospitalized in critical
condition, policesaid.
Theouster of Kevin LauinJanu-
aryhad sparked protestsbymanyof
the paper’s staffers. Theassault
prompt ed an outcryfromlocal jour-
nalist groups,with one lumping it in
with other threatsagainst journal-
istsinthe city in recent months.
Hong Kong’schief executive, Le-
ungChun-ying, said he wasgravely
concerned about the assault.
Current Ming Paochief editor
Cheung Kin-bor said that Mr.Lau
wasattacked by aknife-wielding as-
sailant on TaiHong Street in the
city’s SaiWan Ho neighborhood.
“W estill knownothing about the
details,” said Mr.Cheung.“We are

awaiting reportsfromthe doctor
and the police.”
Policesaid that they received a
call around 10:20 a.m. from the vic-
tim. Mr.Lau, 49 yearsold, told them
his assailant waswearing ahelmet
andhad attacked him with aknife
beforejumping ontoamotorcycle
driven by another person and speed-
ing away.
Themotivebehind the attack re-
mained unclear.Att emptstoreach
Mr.Lau weren’t successful.
Some staff membershad de-
manded an explanation forMing
Pao’ sdecision to re placeMr. Lau.
Ming Paohas said his removal won’t
changethe paper’s editorial direc-
tion.
Nearly 300 former Ming Pao
staffershavealso signed apetition
expressing their concern about po-
tential threatstoHong Kong’spress
freedom.
Mr.Lau’ sremoval wasone factor
behind aweekend rally to support
pressfreedom in the former British
colony, which organizerssaid at-
tract ed 6, 000 people and policesaid
drew some 2,200.This month, the

CommitteetoProtect Journalists
also warned that journalistsfacein-
creased self-censorship threatsas
China’seconomic sway grows.
Though Hong Ko ng returned to
Chinese control in 1997,itretains its
ownindependent political, economic
and judicial systems under the “one
country, two systems” principle gov-
erning itsrelationship with Beijing.
BY TE-PING CHEN
Former editor Kevin Lau outside the Ming Paonewspaper offices in January.
Associated Press
22 |Thursday, February27, 2014 THE WALL STREETJOURNAL.
Gum Makers
EnjoyBoom
In China Sales
As China’ sslowing economydents
sales growth of everything from per-
sonal computerstoOreocookies,
some companies arefinding growth
in asurprising plac e: chewing gum.
Gum is growing at double-digit
ratesinChina, igniting aturfbattle
forChina’schewers.Snack food
maker MondelezInternational Inc.
entered the fray in 2012 with a
sugar-free brand and ahigh-profile
campaign with aTaiwanese ce leb-
rity.Meanwhile,market leadersWil-

liam Wrigley Jr., adivision of Mars
Inc., and Korea’ s Orion Group have
expanded distribution and offered
flavorssuch as grapefruit, cucumber
and teatoencourageChina’sswell-
ing middle classtochewmore.
Risingdisposable incomes in
China areincreasingly making gum
amainstay in the pocketsofyoung
adults,the key gum-chewing seg-
ment.But companies’ aggressive
marketingofgum as away to im-
proveoralhealth, increase concen-
tration and lowerstresslevelsis
also winning over consumers. In the
last two years, ad spending on
chewing gumhas morethan dou-
bled to 7. 55 billion yuan ($1.24bil-
lion), beforefactoring in discounts
given on advertising rates, accord-
ing to Nielsen-CCData.
Qu Zhu, 30 yearsold, aBeijing
investment banker,typically buysa
40-piececontainer of chewing gum
each month. “Chinese food has so
much garlic,” he said. “I need to
freshen my breath aftereating.”
In aTVcommercial in China for
Extragum, aman eating crispy fried
noodles at arestaurant complains to

the female chef that it could break
his teeth. She tells him his teeth
aren’t good, and offershim apack
of Extra, which Wrigley promot es as
“caring about teeth, caring even
moreabout you.”
While nearly all sales of pack-
aged food have been affected by
China’sweakening economy, gumis
still seeing “dynamic growth” due to
manufacturer promotions and rising
consumer demand, according to Eu-
romonitor analyst Vera Wang Wei.
Gum sales grew nearly 14 %in
China last year to $2.8billion,
nearly double thelevel of 2009.
Still, annual growth has moderated
sincearecent 2011 peak of 20%.
Even as China’seconomyslows,
“myexpectation is that gumwill be
quiteresilient,” said Torsten
Stocker, apartner at A.T. Kearney,a
consulting firm.
Gum isn’t popular with everyone.
Zhang Lu,a22-year-old student in
Beijing,said she’safraid that chew-
ing gumwill build up her jawmus-
cles and makeher facelook fat.
“You knowChinese girls care about
their shapes,” she said.

Michael Yeung, president of
Wrigley Asia Pacific,said “there’s
no science” behind this concern.
Arapidly expanding market for
chewing guminChina comes even
as the treat’ssales have weakened
or even declined in matureWestern
markets, despitethe introduction of
newfangled productssuch as caf-
feinated gum.
Thedouble-digit growth in China
“isone of the reasons we launched
there, ” MondelezChief Executive
Irene Rosenfeld told analystsinNo-
vember.
Mondelez, afterlaunching its
Stride brand in China in the third
quarter of 2012, hired Taiwanese ce-
lebrity Ke Zhen Dong as itsspokes-
man and sponsored the popular Chi-
nese talent show“Super Boy.”
Mondelezalso installed over
100,000 checkout counter displays
forthe gumin10months.
Forthe maker of Oreos,gum has
been a“phenomenal success,” gen-
erating about $100 million in annual
sales,said Ms.Rosenfeld.
ConfectionerycompanyOrion
said it posted sales of morethan 1

trillion won($932 million) forthe
firsttime in China in 2012—and
continued itsstrong growth last
year—on the back of itstop-selling
product there: Xylitol chewing gum.
Orion, which also sells potato-fla-
voredtreat Yegamand ChocoPie
snacks in China, firstentered the
market in 2003 and has been grow-
ing at a30% annual rate in the coun-
try, it said in its2012 annual report.
Because gumconsumption is still
lowinChina compared with other
countries,companies see “large po-
tential” forgrowth, said CherryDai,
aproject manager at SmithStreet, a
consulting firm. “Girls want to eat
gumtostayslim,” said Ms.Dai.
Last year,the averageChinese
consumer chewed$1.80 worth of
gum. By comparison, Britons chewed
morethan four times this amount,
Americans morethan six times and
Japanese 6.5times,according to Eu-
romonitor.
Thebiggest challenge, gummak-
erssay,istoconvert moreconsum-
ers, especially those in lower-tier
cities,intohabitual gumchewers.
“Gum is an impulse-purchase

item, and if youdon’t see it, you
don’t buy it,” said Mr.Yeung of
Wrigley,which nowsells gumin
morethan 2.1 million stores in China,
up from 1.8million in 2008.“By
making it moreavailable in cities,it
will help us grow in economic ally
challenging times.”
BY KATHY CHU
AND LAURIE BURKITT
Wrigleyexpanded distribution to
encourage the Chinese to chewmore.
Wrigley’s
SingaporeAims to Become theNextSilicon Va lley
SINGAPORE—Singaporeispull-
ing out all the stops to build itsown
version of Silicon Valley as it at-
temptstocreateastartup hub for
Southeast Asia.
Excited by deals such as Face-
book Inc.’ s$19 billion agreement
last week to buy messaging company
WhatsApp Inc., Singapore’spolicy
makersand technologyentrepre-
neursare betting that one dayatech
giant could swoop down to grab one
of itsown homegrownstartups .Ven-
ture-capit al tech investmentsinSin-
gaporelast year outstripped those in
Japan, South Koreaand Hong Kong.

Thecity stat e, with itspopulation
of just 5.4million, isn’t quiteSilicon
Valley.Singaporehas yettoproduce
anything likeaGoogle Inc.orFace-
book,much lessaservicelikeChina’ s
messaging app WeChat, with 272
million monthly activeusers. It has
hadmixed success in trying to kick
start innovation in various industries
including biot echnology, media and
entert ainment.
Still, investorssay the technol-
ogyecosystem hereisbecoming
moreactive. One concern is that in-
sufficient entrepreneurial spirit
among young Singaporeans and the
government’sfinancial largesse
could inadvertently enable some
startups to limp along on state
funds,some analystssay.
In recent years, the Singapore
government has been trying to fund
local technological innovation by in-
vesting some 100 million Singapore
dollars, or roughly US$79million,
forearly-stagestartups as part of
theS$16 billion it has pledged for
scientific research and development.
Well-known U.S. venture-capital
firms such as Andr eessen Hor owitz

have funded local startups ,including
video site Viki,which Japanese on-
line retailer Rakuten Inc.bought for
$200 million in September.Rakuten
also agreed earlier this month to ac-
quireCyprus-based messaging app
Viber Media Inc.
Another Sing aporean tech co m-
panyattracting invest orsisRedMart,
an online gr oc ery-deliveryservice
founded in 2011 that has raised more
than $10 million from investorsin-
cluding Facebook co-founder and Sin-
gaporeresident Eduardo Saverin.
One hotspot in Singapor e’sfledg-
ling startup scene is aseven-story,
renovated factorybuilding known as
Block 71, west of downtown. On are-
cent Fridayevening,afew dozen
technologyentrepreneursgathered
to drink beer,nibble on cheese and
almonds,and discusstheir startups.
Hugh Mason, a47-year-old Brit-
ish entrepreneur,says thereare
about 100 startups and morethan $1
billion of investment under manage-
ment in the building.
In 2010,Mr. Mason and his
friend, 38-year-old Singapor enative
and anti-spam pioneer Meng Weng

Wong, co-founded Singapore’s Joy-
fulFrogDigital Incubator,which
hostsfrequent gatheringsatits
headquartersinBlock 71.
Mr.Wong,decked out in athree-
piecesuit and carrying the com-
pany’sgreen stuffed frog mascot
Smoochyonhis shoulder,moved
about the room, introducing out-of-
town visitorstoregular attendees.A
sign read, “Silicon Valley isn’t a
place. It’sanidea.”
Venturecapital invest ed in Singa-
porean tech companies by funds last
year totaled $1.71 billion. While that
is behind China’s$3.46 billion, it is
ahead of Japan, South Koreaand
Hong Kong,according to datafrom
Asian VentureCapital Journal of
Hong Kong.PricewaterhouseCoopers
LLP and the National VentureCapi-
talAssociation put venturefunding
forsoftware companies alone in the
U.S. at $11billion last year.Still,
funding devoted to Singapor e’stech
companies,including from the gov-
ernment, skyrocketed last year to
account for19% of funding for
Asia—up from just $27.3 million, or
0.3%, in 2011.

Brad Templeton, aSilicon Val-
ley-based Internet pioneer who
consultswith Google on self-driving
cars,said while Singapore’stech
scene seems moreactivenow than
it wasinprevious years, he added
that “too much government can
hurt astartup community rather
than help it.”
In itspolicies,Singapore’sgov-
ernment has attempted to mimic Is-
rael, which has developed arobust
technologyindustryoverthe years.
One government program designed
to assist early-stagestartups is the
“TechnologyIncubation Scheme,”
which began in 2010.Under that
program, the government co-in-
vestsasmuch as 85% of capital in
select startups,capped at the
equivalent of S$500,000.Technol-
ogyincubators—organizations that
provide mentoring and physical
space—pitch in the remaining 15%
and areallowedtobuy out the gov-
ernment’sstake afterthree years.
Thereare now15incubatorsand
morethan 100 startups participat-
ing in the program.
“In the past, Imight have funded

two or three startups ayear.Now
I’vebeen doing one amonth,” said
Leslie Loh, who heads Singaporean
venture-capital firm RedDot Ven-
tures,which waslaunched in 2011.
Douglas Abrams, who has worked
in Singapore’stechnologyventure-
capital industrysince2000,said
therehas been amarked increase in
the value of Singaporean “exits”—
when startups areacquired or sell
stock to the public.Mr. Abrams,now
chief ex ecutiveoftechnologyven-
ture-capital firm Expara, said that
last year some 20 companies had ex-
itstotaling morethan S$400 mil-
lion, compared with about S$50 mil-
lion in previous years.
BY NEWLEY PURNELL
BUSINESS &FINANCE
Choosing to Chew
Retail gum sales,
change from previous year
Sources: Nielsen-CCData (marketing); Euromonitor International
20
–10
0
10
%
’102009 ’11 ’12 ’13

WORLD
CHINA
U.S.
The Wall Street Journal
1billion yuan =$164 million
Spending on gum marketing in China,
in billions of yuan*
*Adspending for TV,newspaper,magazine and radio; Figures exclude discounts given on advertising rates
8
0
2
4
6
’092008 ’10 ’11 ’12 ’13
7.5
billion
The government has been
trying to fund local
technological innovation.
10 |Thursday, February27, 2014 THE WALL STREETJOURNAL.
WORLD NEWS
Syrian Regime Sa ys
It Killed 175Rebels
BEIRUT—The Syrian government
said itsforcesambushed and killed
dozens of rebels near Damascus,al-
leging they were part of anew of-
fensivetosqueeze the capital and
pressurethe regime to accept apo-
litical solution to the war.

Therewereconflicting reports
over who waskilled Wednesdayina
desert area on the fringes of the
rebel-held suburb of Eastern Gh-
outa, which has been under siegeby
Syrian fo rces formorethan seven
months.
Syrian statenewsagencies said
allthe 175dead were rebels from
thealQaeda-linked NusraFront.
They reported the fighterscame
through southern Syrian from
neighboring Jordan, whererebels
saythey arereceiving sophisticated
weapons from Gulf Arab states,in-
cluding shoulder-fired missiles ca-
pable of taking down jets.
Theopposition said the dead in-
cluded some rebel fight ers, but were
mostly civilians trying to escape the
siegeofEastern Ghouta, whereac-
tivistshavereported starvation and
medical care is scarce forthe
500,000 residents.
State TV showedimages of bod-
ies piled up and foreign passports
from Saudi Arabia, Iraq and other
countries.
Rebelssaid recently that they
have begun to receivemoresophis-

ticated weapons forthe firsttime,
includingantitank gu ided missiles
and Manpad antiaircraftmissiles.
They said theaid wasinprepar ation
forthe newoffensivetopush into
Damascus from southern Syria in
hopes of forcing President Bashar
al-Assad’sregime to accept apoliti-
calsettlement. Theplan arose out of
frustration with the regime’ srefusal
to discussapolitical compromise at
the recent Genevapeaceconference.
An activist from Eastern Ghouta
contradicted the government’sac-
count, saying those killed were actu-
ally heading out of Eastern Ghouta,
not intoit, and going in the oppo-
site direction to Quneitrainsouth-
western Syria near Israel. Apivotal
battle forfighterstrying to reach
Damascus has been raging around
Quneitra forabout aweek.
“Morethan 40 Syrian fighters
were killed and 15 escaped from the
Syrian armyambush while they
were tr ying to getout of Eastern
Ghouta,” the activist said. “They
were heading to Quneitratofight
there.”
TheArmyofIslam, an Islamist

rebel group which is powerful in the
area near the ambush, said the gov-
ernment killed 45 people,mostly ci-
vilians,who were trying to getout
of Eastern Ghouta. TheArmyofIs-
lam is part of an allianceofreli-
gious rebel groups knows as the Is-
lamic Front.
Susan Ahmad, an activist in
Eastern Ghouta, said dozens of Syr-
ian civilians and fighterswanted to
leave because they didn’t want to
die of hunger.
“They tried to runaway from the
government siege.…They were
shelled and later Assad’sforcesshot
the wounded.”
Several opposition groups in-
cluding the U.K based Syrian Obser-
vatory forHuman Rightssaid the
ambush wascarried out mainly by
membersofthe Iranian-backed Leb-
anese militia Hezbollah. Thegroup
has been actively fighting alongside
the Syrian regime forclose to a
year,particularly around Damascus
and other partsofcentral Syria.
—Mohammed Nour Alakraa
contributed to this article.
BY MARIA ABI-HABIB

AND SAM DAGHER
Hezbollah Vows It Will
Retaliatefor Israeli Strike
BEIRUT—Hezbollah vowedit
would retaliatefor an Israeli air-
strikethat damaged one of itsbases
near Lebanon’sfrontier with Syria,
raising the specter of awider con-
flict along the country’salready-vol-
atile southern andeastern borders.
TheShiitemilitant and political
groupsaid Wednesdaythat Israeli
warplanes struck one of itsposi-
tions lateMondaynear the eastern
town of Jantainthe Bekaa Valley,
whichbordersSyria. Hezbollah de-
nied re portsthat the raid on the
base result ed in casualties and dam-
agetoartilleryand rocket batteries.
Thestatement by Hezbollah,
broadcast over itsAlManar televi-
sion station, wasthe firstpublic ac-
knowledgment in Lebanon that the
Israeli raid had targeted Lebanese
territory. It raised fears, politically
explosivehere, that this small na-
tion mightbedragged further into
the conflict in Sy ria and intore-
newedconflict with Israel, itspow-
erfulneighbor and enemytothe

south.
Hezbollah, which fought the Is-
raeli armed forces to adrawin2006
in southern Lebanon, showedfew
worries.
“This aggression won’t stand
without aresponse, ” the group said.
Thethreat, about 36 hoursafter
the attack,came afterlocal media
reported that some Hezbollah fight-
ershad been killed in the airstrike
andthat trailerscarrying missiles
hadbeen the target.
Israel refused to confirm or deny
that it carried out Monday’sraid.
Butthe deputy commander of its
Northern Commandreserves said
Hezbollah had little choicebut to
confirm the attack on one of its
bases.
“I assume that Hezbollahreal-
ized it could no longer denythe
eventafter the entireworld around
it had reported it,” Eyal Ben Reuven,
areservemajor general in the Is-
raeli army, told Israel Radio.
Thegeneral said Hezbollah was
unlikely to attack Israel because it
wasalready preoccupied in Lebanon
and Syria, where, along with Iran, it

has joined sides with President
Basharal-Assad to put down the re-
bellion there.
—Joshua Mitnick in Tel Aviv
contributed to this article.
BY NOUR MALAS
India NavalChief Quits
AfterLatestMishap
NEW DELHI—India’snaval chief
resigned Wednesday, taking “moral
responsibility” foraseries of acci-
dentsthat struck the navy in the
past year,including asubmarine
mishap Wednesdaythat has lefttwo
crew membersmissing.
Theresignation and the acci-
dentscome as India—the world’s
biggest importer of weapons—is
working to upgrade itsdefense ca-
pabilities to faceamoreassertive
China, as well as itslongtime rival,
Pakistan.
Admiral D.K. Joshi’sresignation
came hoursafter afirebroke out
aboardasubmarine during atrain-
ing exercise.Two submarinerswent
missing and seven otherswerehos-
pitalized forthe effectsofsmokein-
halation. INS Sindhuratna, aSoviet-
builtdiesel-poweredsub,was about

75 kilometersoff the coast of Mum-
bai.
Thewhereaboutsofthe two sub-
marinerswasn’t known as three sec-
tions of the sub haven’t yetbeen in-
spected due to fearsthat fire could
restart, Commander Rahul Sinha, a
navalspokesman, said. “The subma-
rine is disabled and at sea. We ex -
pect it to be brought to Mumbai
dockyard early tomorrow morning,”
he said.
Theresignation wasaccepted
with immediateeffect, the defense
ministrysaid. Thevicechief of naval
staff Vice Admiral R. K. Dho wanwill
officiat easthe newnaval chief until
asuccessor is announced, it said.
In January, another submarine,
INSSindhugosh, ranaground off
Mumbai in lowtide, and afew other
warships ranaground. India has
about 15 submarines.The air force
flies mostly Soviet-eraMiG planes,
several of which ha ve cr ashed in re-
cent years, killing their pilots. The
armyistrying to buy advanced
tanks and guns.
Themost damaging of the naval
incidentstook placeinAugust when

18 sailorsdied afterexplosions and
afirerocked aRussia-built subma-
rine,INS Sindhurakshak,inaMum-
bainaval dockyard.The Indian gov-
ernment asked the navy to conduct
comprehensivechecks of weapons
and safety on boardall itssubma-
rinessincelast year’s incident.
Despitethe heightened focus on
safety,ships belonging to the Indian
Navy have runaground or were
damaged afterhitting underwater
objectsinrecent months.Amine-
sweeper reportedly caught fire while
undergoing repairsinadockyard.
In November,the navy commis-
sioned itssecond aircraftcarrier to
bolster itsblue-water presence. The
INS Vikramadityacan carrymore
than 30 planes,including Russian-
made MiG-29K and U.K built Sea
Harrierfighter jets, as we ll as Ka-
mov,Sea King,Dhruv and Chetak he-
licopters.
“It is achallenging situation for
the navy,” said C. Uday Bhaskar, a
retired Indian Navy commodoreand
former director of the National Mar-
itime Foundation. “It is time forus
to take adeeper look intothe higher

edificeofdelays in defense modern-
ization and induction of newequip-
ment in India.”
China, whichfought awar with
India in 1962, has begun arapid
modernization driveofits navy.It
has also been venturing away from
itshome waters,with warships sent
on antipiracypatrolsoff Somalia
and on voyages between the islands
of Japan intothe Pacific Ocean.
Tensions between China and In-
dia, the world’stwo most-populous
nations,haveintensified, particu-
larly along their disputed Himalayan
border.India has grownincreasingly
concerned about China’ spresencein
the Indian Ocean region, with Bei-
jing funding the construction of
portsinPakistan and SriLanka.
India is spending about $30 bil-
lion ayear to buy newaircraft, mis-
siles,planes and other defense
equipment to modernizethe Soviet-
vintageequipment of itsarmed
forces.One key defense project is
thepotential acquisition of 126 Ra-
fale fight er jet sfromDassault Avia-
tion S.A. of Francefor an estimated
value of morethan $10 billion.

BY SANTANU CHOUDHURY
India’snaval chief,Admiral D.K. Joshi, who resigned Wednesdayhours after afireonanuclear-poweredsubmarine.
Associated Press
Drug UseEyedinDeath of Navy SEALs
Drug use is suspected in the
deaths of two former U.S. Navy
SEALswho worked as security
guards on acontainer ship moored
in the Seychelles,policesaid late
Tuesday.
Thetwo men, identified as Jef-
frey Reynolds and Mark Ke nnedy,
both 44 yearsold, were found dead
last week in their cabin on the
Maersk Alabama, operated by Dan-
ish container-shipping giant Maersk
Line,aunit of A.P. Moller-Maersk
A/S.
TheSeychellespolicestatement
said an autopsy on the bodies of the
two men concluded that they died of
“respiratoryfailurewith suspicion
of aheart attack.”
“The policepreliminaryinvesti-
gation report includes suspicion of
drug use ,asindicated by the pres-
enceofasyringeand traces of her-
oin which were found in the cabin,”
and fluid samples from the men’s
bodies arebeing sent to Mauritius

forforensic analysis,the statement
said.
Mr.Reynolds andMr. Kennedy
worked forVirginia-based maritime
security firm Trident Group,formed
in 2000 by former SEALstoprovide
protection against pirateattacks.
“Trident Group co ntinues to
monitor the situation with our fallen
operators. Assumptions arebeing
reported about this situation with-
out the benefit of anyfact-based in-
formation,” Trident Group Chief Ex-
ecutiveThomas Rothrauff said in a
stat ement on the company’swebsite.
TheU.S flaggedMaersk Alabama
operat es off the east coast of Africa,
one of the highest-risk areas forpi-
rate attacks.
Theship wasseized by Somali
piratesinthe same waters in 2009.
Her then-captain, RichardPhillips,
wastaken hostageonalifeboat and
wasrescued three days later,when
U.S. Navy snipersshot dead the
three pirates holding him.
The2013 film “Captain Phillips,”
starring TomHanks as the captain,
is based on the incident.
BY COSTAS PARIS

The opposition said some
of the dead were civilians
trying to escape asiege.
THE WALL STREETJOURNAL. Thursday, February27, 2014|23
China Lights Electric-Car Spar k
China and global companies are
taking newsteps to fulfill the coun-
try’sambitions forelectric cars,
which so far have exceeded Bei-
jing’sgrasp.
Chinese automakers BYD Co.
and BAIC Motor Co.onWednesday
wonapproval from Beijing’ smunici-
pal government to sell electric cars
in the city.Shares of BYD, which is
partially backed by Warren Buffett,
jumped 9.6% in Hong Kong.BYD’s
all-electric e6 crossover has been
sold mainly in the southern Chinese
city of Shenzhen, wherethe com-
panyisbased. Most of the vehicles
operateastaxicabs and buses.
Meanwhile, Switzerland’s ABB
Ltd. said it would makeand market
home,wall-mounted, electric-car
chargers in China, part of an effort
to addressalack of charging sta-
tions and other infrastructurenec-
essaryifelectric cars aretohit
China’sroads in serious numbers.

Chunyuan Gu, ABB’sChina chair-
man and president, said he believed
demand forcarsand charging
equipment will take off afteraslow
start. “Either youbelieveoryou
don’t believe,” he said. “What’sdif-
ficult to predict is howfast the vol-
ume will come.”
China’sgovernment wants
500,000 hybrid and electric vehi-
cles on itsroads by next year and
five million by 2020.But only
around 17,600 such vehicles were
purchased in China last year,in-
cluding hybrid and pure-electric
cars and buses.Itislikely that no
morethan 50 ,000 such vehicles are
in use in China.
China long has said it wanted to
lead the world in developing and
sellingelectric cars,inpart to re-
duceits relianceonoil and improve
air quality.Big sections of China
againwerecovered by thick,pol-
luted air this week,inlarge part be-
cause of automotiveemissions.
Global automotivecompanies
have been drawntoChina’ svast po-
tential; the countryrecorded about
22 million autosales last year.Elec-

tric-car maker Tesla Motors Inc.
last monthsaid it would sell its
Model Ssedan in China starting
around $120,000.
Tesla is aiming itscar at the lux-
urysegment. But Mr.Gusaid gov-
ernment incentives were needed if
Beijingwanted to reach the mass
market.China in September rolled
out an incentiveprogram under
whichbuyersofelectric cars can
receiveupto60,000 yuan, or about
$9,800,insubsidies.Buyersofcer-
tain gasoline-electric hybrids can
getupto35,000 yuan. Some local
governmentsalso offer incentives.
Building asuitable charging in-
frastructurealso is amust if elec-
trical vehicles aretotakeoff,Mr.
Gu said. ABB this month announced
asix-year agreement to supply
home,wall-mounted fast chargers
forDenzacars. Manufactured by a
joint ventureofBYD and Germany’s
Daimler AG, the Denzawill go on
sale this year.
Denzadidn’t respond to re-
questsfor comment.
“I am ve ry confident that once
China overcomes all these hurdles,

the volumes will increase faster
than we canproject,” Mr.Gusaid.
ABB reported a“solid perform-
ance” in China forlast year,despite
“a mixed businessclimateand mar-
ketenvironment.” China revenue
rose 7.7% to $5.6 billion as the com-
panybenefited from the co untr y’s
greater emphasis on stable eco-
nomic growth and low-carbon, sus-
tainable development. ABB invested
$136 million in China last year.
BYDthis week also received ap-
proval to sell itsplug-in hybrid, the
Qin, in Shanghai as part of atrial.
Thecompanydeclined to provide
details about plans forrolling out
itsvehicles in Beijing and Shanghai.
BAIC couldn’t be reached for
comment.
BYDwas apioneer in developing
electric cars in China, but has
struggled to win international rec-
ognition forits green-vehicle tech-
nology.
ABeijing government official
said the city would provide asub-
sidy forthe sale of BYD’se6cars
even though they arebuilt in Shen-
zhen. Theoff icial said Beijing

aimed to ha ve in placearound 1, 000
charging unitsinsome 100 stations
throughout the city by year-end, up
from 20 stations today.
“It waspreviously mission im-
possible forordinaryconsumersto
use BYD’selectric cars in Beijing
because of the manyapprovals that
needed to be got,” said Leping
Huang, an analyst at Nomura.
—Rose Yu in Shanghai
contributed to this article.
By Colum Murphy
in Shanghai and
Joanne Chiu in Hong Kong
JapanPostOutlinesPlanonWay to IPO
TOKYO—Japan’spostal system,
which runs one of the world’sbig-
gest banks as well as Japan’ slargest
insurer,announced anearly $13 bil-
lion investment plan Wednesday
that it said would pave the way for
apublic stock offering next year.
Ashareoffering of Ja pan Post
Group,which government officials
have said could raise some $40 bil-
lion, would be one of the largest ever.
But much remains uncertain, includ-
ing whether the publicly traded com-
panycould engageinbread-and-but-

terfinancial businesses such as
corporat eand mortgagelending.
To enticeglobal investors, Japan
Post needs to demonstratehow it
would pivot away from itsmorethan
centurylong historyasarule-bound
government entity,said Ed Rogers,
chief executiveofficer of the Tokyo-
based RogersInvestment Advisors.
“The prospect of aJapan Post
[initial public offering] immediately
poses the question of what kind of
mandateormission such apriva-
tizedcompanywith trillions in as-
setswould have,” Mr.Rogerssaid.
“Certainly,asanentity responsible
to shareholders, it cannot simply af-
ford to let the cash sit idle.”
Japan Post Chief ExecutiveTaizo
Nishimurosaid Wednesdaythat he
wanted to be ready foralisting by
March 2015 ,and suggested that the
government could set the frame-
work as soon as this summer.Offi-
cials have said they envisioned list-
ing two-thirds of the group.
“W ehaven’t agreed on anything,
including whether only Japan Post
Holdingswill be listing or itstwo fi-
nancialunitswill also be listing,”

Mr.Nishimurosaid as Japan Post
announced itsfirst medium-term
business plan.
Thebusinessplan included only
modest steps intonew areas .Japan
Post said it would look at expanding
itse-commerce activities and devel-
oping morecommercial real estate
to take advantag eofits vast nation-
wide landholdings.
Much of the nearly $13 billion in
investment over the next three
yearsisaimed at polishing up Japan
Post’sbasic operations and facili-
ties,which oftenlag behind those of
privatecompetitors. Nearly $5 bil-
lion is earmarked forupgrading the
group’scomputer systems.
Thehugeinvestment will likely
giveJapan’seconomyaboost, but it
is also feeding worries among pri-
vate-sector banks and insurers. They
citethe potential forunfair compe-
tition from an institution with
24,000 outletsinall cornersofJa-
pan. Last year,the American Cham-
ber of Commerce in Japan ex-
pressed concern about Japan Post’s
bank and insuranceunitsexpanding
their presence.

Some companies stand to gain
from amorebusiness-oriented Ja-
pan Post. In July,American Family
LifeAssuranceCo.,the company
known forthe Aflac duck, formed an
alliance with the Japanese group to
sell cancer insuranceatpost offices.
To put Japan Post’ssizeinper-
spective, on the list of Fortune Global
500 companies,itisNo. 13 in revenue
behind nine oil or resource compa-
nies,two automakersand Wal-Mart
Stores Inc.InJapan, only Toyota Mo-
torCorp.islargerbyrevenue.
Japan Post has improved itsbal-
ancesheet with the help of cost
cuts, recording anet profit of nearly
$4 billion in the nine-month period
ended in December.However, that
profit came overwhelmingly from its
banking business, while itspostal-
serviceand insurancebusinesswere
only slightly in the black.
Japan has privatized several for-
mer state-owned monopolies in re-
cent decades,including the state
railway and, telephone company.
Thepublicly listed descendantsof
those monopolies generally have
held their own, giving the govern-

ment confidencetomoveahead
with alisting of Japan Post to raise
funds forreconstruction of areas hit
by the 2011 earthquakeand tsunami.
Government officials offered the
$40 billion estimatefor the Japan
Post IPO sizelast year.Ifitisthat
size, the listing would be largerthan
thecurrent record holder foranIPO,
the 2010 offering of Agricultural
Bank of China Ltd. at $22.1 billion.
Anyoffering of that sizeis
bound to getglobal investors’ atten-
tion, but getting their money is an-
other matter. Manyinthe market
sayJapan Post’sallurewill depend
on itsability to free itself from re-
strictions long imposed by itsstate-
owned status.
Thepostal bank is barred from
making major loans and can’t accept
depositsofmorethan ¥10 million, a
little lessthan $100,000.Japan Post
has plowedmost of it sdepositors’
funds— 70%ofits nearly $3 trillion
in assets—intoJapanese government
bonds,making it the largest credit or
of the Japanese government.
“UnlessJapan Post announces a
more-specific businessplan before

the IPO,itmay be difficult to attract
investorsnextyear,” said Mitsushige
Akino, chief fund manager at Ichi-
yoshi Asset Management.
In an interviewlast October,Mr.
Nishimuro, the Japan Post chief ex-
ecutive, said the group would have
morefreedom to enter newbusi-
nesses if the government reduced
itssharebelow50%. “I have to say
that’sour main purpose foralist-
ing,” he said.
But the 78-year-old CEO ,who ear-
lier led Toshiba Corp.and the Tokyo
Stock Exchange, acknowledged that
the companystill had apublic role to
playand said he wouldn’t close un-
profitable po st offices. He said the
companyhad aduty to maintain
services that people need.
Fund managerssay that if inter-
est in Ja pan Post from individual
andinstitutional investorsflagged,
government organizations,including
public pension funds,would likely
absorb abig chunk of shares.
BY ATSUKO FUKASE
BUSINESS &FINANCE
Underpowered
China’selectric-vehicle market is

still in its infancy
SALES IN NUMBER OF VEHICLES
2011
2012
2013
5,579
11,375
14,604
Notavailable
14.5
million
15.5
million
17.9
million
Total
passenger-
car sales
1,416
3,038
Electric-only vehicles
Plug-in hybrids
Source:China Association of Automobile
Manufacturers
The Wall Street Journal
Japan’spostal systemcovers the country by motorcycle and truck—notto
mention 24,000 outlets. Officials have estimatedanIPO could raise $40 billion.
BloombergNews
St eelmaking
Expansion

Undermines
Beijing’sAim
BEIJING—China’slargest steel-
making provincehas been adding
twiceasmuch newproduction ca-
pacity as it has shut down, under-
scoring achallengefor Beijing’s
campaign to reduceovercapacity
and air pollution.
Official effortstoeliminateout-
moded steel capacity in Hebei prov-
incehaven’t been effectivesofar,a
senior official with aunit of Hebei
Iron and Steel Group Ltd., China’s
largest mill, said Wednesday.
Up to the end of last year,steel
millsinHebei were adding newca-
pacity at apaceofaround 30 million
tons ayear ,twicethe average15mil-
lion tons of outdated capacity that
the government wantstoshut each
year until 2017, said Wang Jiguang,
marketing direct or at Hebei Iron and
Steel’ssales unit.
Thecentral government has
identified eliminating industrial
overcapacity as apriority forthis
year,seeing the problem as awaste-
fuldragongrowth.
Hebei is aproving ground forthe

campaign. An industrial provincethe
sizeofOklahoma that surrounds the
nation’scapital, Hebei accountsfor
aquarter of China’ssteel and has
been in the government’scross hairs
forcontributing to an unruly steel
market andfilthyair.Steel-making
capacity in Hebei wasgrowing even
as Beijing wasurging steelmakers
nationwide to restrain “the blind ex-
pansion of capacity.”
“This target of eliminating 15
million tons of outdated capacity a
year,compared to our addition of
newcapacity of 30 million tons a
year,indicates that the speed of
elimination is not quitefast enough
to digest the outdated capacity,” Mr.
Wang said.
Mr.Wang’sremarks,made pub-
licly in an apparently unscripted ad-
dresstoaconferenceattended by
industryexecutives fr om ar ound the
world, reflect an unusual degree of
candor from an off icial about the
government campaign. Pr esident Xi
Jinping made an example of Hebei
officials last fall during atelevised
Mao-style“self-criticism” session,
getting them to admit they had pur-

sued growth at the expense of the
environment and other concerns.
China’ssteel industryisdeeply
entrenched in itseconomy. In Hebei
alone,job losses could runashigh as
200 ,000 if all state-requir ed cutsare
carried out, according to some ana-
lysts’ estimates.Sofar,the local
government has used showy displays
of demolishing old steel factories,
taking down 6.8million tons in No-
vember and 8.2million tons in Feb-
ruary. However, these facilities had
already st ood empty formorethan a
year,Mr. Wang said.
“It’sjust the smaller,moreout-
dated st eel facilities that have been
shut,” Mr.Wang said. Thestate-
backed China Iron and Steel Associa-
tion corr oborated Mr.Wang’sview
in an earlier interview.
Steel factories have increasingly
become atargetfor official ireamid
intense pollution.Hebei suspended
steel production this week as it
sought to help Beijing roll back
heavy smog.Mr. Wang said the cen-
tral and local governments’ efforts
to cut steel capacity would likely
succeed only “inafew years.”

BY CHUIN-WEI YAP
THE WALL STREETJOURNAL. Thursday, February27, 2014|9
WORLD NEWS
U.S. ProbesFund Flows From Gabon
U.S. authorities areinvestigating
theflowoffunds from Gabon to the
U.S. to determine whether anyas-
setsare traceable to public corrup-
tion in thecentral African country,
according to alaw-enforcement doc-
ument and people familiar with the
matter.
As part of abroader effort to ad-
dresspossible foreign graft, Home-
land Security agentsand JusticeDe-
partment prosecutorshavesearched
forassetsinthe U.S. linked to Gabo-
nese President Ali Bongoand his
family,aswell as his chief of staff,
MaixentAccrombessi, these people
said. Prosecutorscould seek to seize
assetsthey believeare ill-gotten.
Thecase putsGabon in the cross
hairsofU.S.policyinAfrica. Presi-
dent Barack Obama is looking to in-
crease trade and militaryties with
stable African partnerslikeGabon,
an economygrowing at about 7%
this year.But the JusticeDepart-
ment is taking aharder tack against

corruption on the continent.
TwoU.S.Senateprobes intothe
movement of foreign assetsintothe
countrysince1999 concluded that
Mr.Bongo’slatefather,Omar,who
ruled the countryfor 41 years, used
his position to amassapersonal for-
tune during Gabon’soil boom.
Thecurrent U.S. probe came to
light last ye ar aftercustoms offi-
cials at LosAngeles International
Airportsaid they found morethan
$150,000 in the luggage of aone-
time hairdresserand aide to Mr.
Bongo. Agentsseized the money
from the man, Derek Ashby, because
he hadn’t disclosed the full amount
on currencyforms,according to
documentsfiled in federal court in
California in July.
In September,federal agents
raided the Pennsylvania home of
lobbyist Joseph Szlavik, weeks after
he allegedly transported cash from
Gabon to the U.S.,said people famil-
iar with the matter. Prosecutorsare
investigating whether Messrs. Szla-
vik and Ashby violated anycriminal
laws,according to the law-enforce-
ment document.

Bringing bulk cash intothe U.S.
is legal, as long as the person carry-
ing it declares the proper amount
andstateswhether they arecarry-
ing it on someone else’sbehalf.
Money-laundering laws prohibit any
person from knowingly engaging in
afinancial transaction that involves
the proceeds of corruption.
Mr.Ashby told agentshehadn’t
bothered to count all of the cash he
wascarrying because he wastrans-
porting it from Gabon to Mr.
Bongo’sestranged wifeinLos Ange-
les,IngeCollins, according to court
documents. “He wasjust unaware of
the totalamount he wasprovided,”
said Michael R. Kilts, alawyer for
Mr.Ashby.Mr. Szlavik declined to
comment through his lawyer,Aitan
Goelman. Neither man has been
chargedwith acrime.
Since2000,Ms. Collins has re-
ceived millions of dollarsincash
payments and wiretransfersfrom
Mr.Bongoand through Messrs.
Ashby and Szlavik,said aperson fa-
miliar with the matter.
Mr.Bongo’sofficesaid this
monththat it wasaware of the

probe of his associates but received
word from the U.S. State Depart-
ment this monththat neither the
president nor his government is un-
der investigation by U.S. authorities.
It added that the policies of the el-
der Bongo’spresidencyoutlined in
the prior Senateinvestig ations “are
not the policies of the current presi-
dency” or the re st of the govern-
ment. AState Department spokes-
man declined to comment, as did a
JusticeDepartment spokesman.
U.S. Attorney General Eric
Holder announced anew asset-for-
feitureprogram in 2010 aimed at
“combating large-scale foreign offi-
cial corruption.”
From 2011 to 2012, Gabon held a
United Nations Security Council seat
and helped push through two of Mr.
Obama’smost difficult U.N. votes:
sanctions against Iran’snuclear pro-
gram and support forthe removal of
Libyan leader Moammar Gadhafi.
In 2011, Mr.Bongoasked the U.S.
Treasuryfor help training Gabonese
auditorstoinvestigatecorruption
there, said Eric Benjaminson, then
U.S. ambassador.That same year,

Mr.Bongohad a50-minuteconver-
sation with Mr.Obama in the White
House in which the U.S. leader ex-
pressedhis desirefor the Gabonese
to increase anticorruption efforts,
said Mr.Benjaminson, who wasin
the room. Mr.Bongoagreed, but
said he faced challenges in uproot-
ing along tradition of corruption in
the country, said Mr.Benjaminson.
AWhiteHouse spokesman de-
clined to comment.
Ms.Collins, who has also been
contacted as part of the investiga-
tion, said she wascooperating and
denied anywrongdoing.
By Joe Palazzolo,
Christopher M. Matthews
and Drew Hinshaw
Gabonese PresidentAli Bongo,seen
in Tunisia earlier this month.
AgenceFrance-Presse/Getty Images
24 |Thursday, February27, 2014 THE WA LL STREETJOURNAL.
Fo rexTrader FXCM
SettlesU.K. Allegations
LONDON—Foreign-exchange
trading firm FXCM Inc.agreed to
payfines and refunds totaling al-
most £10million ($16.7 million) to
settle allegations by aU.K.financial

regulator that the companywith-
held profitsfromclientsand failed
to inform British authorities that it
wasunder investigation in the U.S.
The Financial Conduct Author-
ity said that U.K. unitsofFXCM
withheld £6million from customers
on foreign-exchangetransactions
between August 2006 and December
2010.The regulator said the broker
pocketed profitswhen exchange
ratesmoved in itscustomers’ favor
while atrade wasinprocess,but it
passed on losses that occurred on
othertrades.
FXCM, which is based in New
York and is publicly listed on the
NewYork Stock Exchange, is adom-
inant broker in online foreign-ex-
change trading forretail clientsand
serves banks,hedgefunds and other
asset managers. Thecompanyin
2012 sought to boost itsinstitu-
tional-trading businessbyinvesting
in, and trading with, an electronic-
trading platform called FastMatch,
in partnership with Credit Suisse
Group AG. In trades with retail cus-
tomers, FXCM matches orderselec-
tronically with quotes from more

than adozenbanks and other so-
called market-making firms.
As part of itssettlement, FXCM
agreed to pay £4million in fines
plus almost £6million to refund
money to U.K. clients.
In astatement, FXCM played
down the impact on customersas
“typically very limited,” with indi-
vidual traderssuffering an average
hitof$3. 70 apiecebecause of the
practicesoverthe four-year period
addressed in the settlement.
“It’snot likethis wasamajor
source of profit,” FXCM Chief Exec-
utiveDrewNiv said in an interview
Wednesday, adding that FXCM oper-
ated similarly to competitorswhen
it pocketed priceimprovementsin-
stead of crediting customers. FXCM
changed itspractices in 2010 to
passalong those priceimprove-
mentstocustomers, Mr.Niv said.
“Thisishow the system wasset
up.Asfar as we were concerned at
the time,the customer traded with
us,and we hedged,” Mr.Niv said.
“The only thingweheld back on
wasthe priceimprovement. We still
gavethe customer the best priceout

of multiple market makers.”
FXCM said it had provisioned $15
million in the thirdquarter of 2013
forthis matter.
TheFCA became aware of the
practicein2011. But it wasunaware
that U.S. authorities had begun their
ownprobe intothe matterayear
earlier.In2011, FXCM agreed to pay
morethan $14million to settle alle-
gations from U.S. market regulator s
that the companyhad failed to su-
pervise customer accounts. As are-
sult, regulatorssaid, FXCM custom-
erssuffered detrimental pricing on
trades.
FXCM’sfailuretoalert the FCA
breached requirementsthat busi-
nesses be open and cooperativewith
the U.K. regulator.“I’m not contest-
ing that,” Mr.Niv said, adding that
an FXCM ex ecutiveatthe time re-
sponsible forinforming the British
regulator mistakenly “thought he
had.”
BY JENNY STRASBURG
AND MAX COLCHESTER
CompaniesPay Up
Fo rCybersecurity
Fewknowthe costsofhacking

better than Robert Carr.
Sincecybercriminals gained ac-
cess to morethan 100 million
credit- and debit-cardnumbers
from Heartland Payment Systems
Inc.in2007,Mr. Carr,its chief exec-
utive, has quadrupled his security
budget. Heartland also paid $150
million in fines and legal costsfrom
the breach and suffered damageto
itsreputation as apayment proces-
sor.
“W e’vedone alot of thingssince
the breach that we didn’t do before
the breach,” Mr.Carr said in are-
cent interview, pointing to reducing
the number of computer systems
that processvaluable card data,
while adding moreencryption and
system-monitoring tools.
Heartland’sexperienceunder-
scores long-standing questions over
thecostsand benefitsofcybersecu-
rity.The Obama administration
stoked the debateearlier this month
by issuing newguidelines urging
companies in important industries
such as energy,banking and tele-
communications to do moretopro-
tect and monitor their networks,

and to train employees.
Some businessgroups criticized
the proposal, saying it would push
them to spend money foruncertain
benefits. Increased spending might
not makesense foranindividual
firm, they say, even if it mightmake
the nation safer.
TheWhiteHouse proposal is
“propublic and not procommercial,”
said LarryClinton, president of the
Internet Security Alliance, abusi-
nessgroup whose membersinclude
General Electric Co., Wells Fargo &
Co.and Verizon Communications
Inc.Cybersecurity measures must
be cost-effectivefor an individual
company, or be “supported by some
sort of economic incentive,” he said.
Mr.Clinton said the intercon-
nected global economycreates
“massiveeconomic incentives to be
insecure.” Forinstance, lengthyin-
ternational supply chains canoffer
savingsfor manufacturers, but can
open doorsfor hackers. Thesame
goes forsprawling,interconnected
internal networks that allow
companies to manageassetsfrom
afar.

Thevulnerability has been on
displayrecently,asretailersdis-
closed thefts of customer data. In
themost prominent example, Tar-
get Corp.said hackersstole 40 mil-
lion credit- and debit-cardnumbers,
along with passcodes,fromits
stor es .The thieves gained access to
Target’scash-register systems
through arefrigeration contractor
in Pennsylvania.
Obamaadministration officials
saythey understand companies’
concern. “The amount of cash you
have doesn’t change,” said Phyllis
Schneck, the Department of Home-
land Security ’s deputy undersecre-
tary forcybersecurity.Ms. Schneck
said Washington’sguidelines will
prompt “some really harddiscus-
sions” in boardrooms about the
risks of cyberattacks.
Thedebatewill be joined this
week at the annual RSAConference,
the equivalent of the Detroit auto
show forthe anti-hacker industry.
Morethan 400 cybersecurity com-
panies will displaytheir waresat
the SanFranciscoevent.
Companies wrestle daily with

the question of howmuch security
is enough. Global cybersecurity
spending by critical infrastructure
industries wasexpected to hit $46
billion in 2013,up10% from ayear
earlier,according to Allied Business
IntelligenceInc.
“Large and small companies per-
form cost-benefit analyses forevery
dollar spent,” lobbyistsfor the wire-
lessand cable industries wroteina
December lettertothe government
on the issue.
Forinstance, af terIran-linked
hackersbegan attacking U.S. bank
websites in 2012, the industrybe-
gantoinvest moreheavily in com-
puter security,aformer U.S. official
said. And afterRSA,the security di-
vision of EMC Corp., suffered a
breach in 2011, higher up executives
became moreinvolved in cybersecu-
rity risk calculations,RSA’s Execu-
tiveChairman Art Coviello said in a
recent interviewwith TheWall
Street Journal.
Here’spart of the problem: It is
alot cheaper to hack than defend a
hack.For $1 million, RichardBe-
jtlich,chief security strategist at

FireEye Inc.and aformer cyber in-
vestigator forthe U.S. Air Force,
said he could assemble ateam that
could hack intonearly anytarget.
But $1 million wouldn’t be nearly
enough foracompanytodefend it-
self.
Completesecurity is “not some-
thing most people canafford, let
aloneanyone canafford,” Mr.Be-
jtlich said. He agrees with other ex-
ecutives who saythat if the govern-
ment wantsbusinesses to improve
cyberdefenses,itshould subsidize
the cost, with taxbreaks ,for exam-
ple.
In a2005 notetoclients, Gart-
ner Inc.analyst Avivah Litan esti-
mated forevery $5.6 2businesses
spendafter abreach, they could
spend $1 beforehand on encryption
and network protection to prevent
intrusions andminimizedamage.
Today, she says,the ratio is about
the same.
ButMs. Litan says she is often
rebuffed when she pitches corporate
boards on bolstering cyberdefenses.
“They sayitcostsmoretosecure
the system than to suffer the

breach,” said Ms.Litan, who de-
clined to name clientsbut works
with retailers.
Target, forexample,spent heav-
ily on cybersecurity,according to
former employees and people famil-
iar with retailer networks.Last
summer,itbrought in consultants
from the Chertoff Group,aWash-
ingtonfirm with close ties to na-
tional-securityagencies,toreview
itssecurity and interviewthe com-
pany’sintelligenceanalysts, former
employees said.
Chertoff’s findings, delivered to
the companylast fall, couldn’t be
learned. Target security staff
warned about possible weak spots
in itspayment-cardsystembefore
the breach, people familiar with the
mattersaid, but the warningswere
wavedoff as the holiday-shopping
season approached. Target declined
to comment.
So didahalf-dozencompanies
contacted to discusstheir approach
to cybersecurity aftersuffering a
high-profile breach, highlighting the
sensitivity of the issue.
Mr.Carr,the Heartland execu-

tive,says businesses faceacareful
balancing act.
“You canspend an inf inite
amount on security,” Mr.Carr said.
“Wheredoyou draw the line?”
BY DANNY YADRON
BUSINESS &FINANCE
CEOConcedes Bank Misconduct
help Americans hide funds in unde-
clared Swissaccounts. In areport
released Tuesday, the subcommittee
described the bank as awilling par-
ticipant in itsclients’ attemptsto
evadetaxes,saying it set up a
branch at Zurich’sairport so cus-
tomerscould attend to banking en
routetoski vacations.
On Wednesday, Mr.Levinopened
the hearing by noting that despite
an ongoing crackdown, “the sad
truth is that the eraofbank secrecy
is not over.” Mr.Levinsaid that as
U.S. authorities began scrutinizing
the bank in 2008,Credit Suisse ini-
tially promised it would “clean up”
itsbusinesswith Americans.But,
Mr.Levinsaid the bank moved
slowly to addressthe issue and “was
holding back about howbad the
problem was.”

Mr.Levinand other lawmakers
also expressed frustration with the
DOJfor failing to act moreaggres-
sively to makeCredit Suisse ac-
countable.
In writtenremarks prepared for
Wednesday’shearing,however, two
topDOJ officials defended their
strategyfor pursuing U.S. taxeva-
sion, saying the agencyhas pressed
chargesagainst 73 holdersofoff-
shoreaccountsand 35 bankerssince
2009.
Credit Suisse is one of about a
dozenSwissbanks under DOJinves-
tigation forallegedly helping Ameri-
canclientshide assetsusing Swiss
accounts. Since2008 the bank said
it has wound down manyU.S.ac-
counts, with the ex ception of are-
maining 3,500,and has stopped tak-
ing newAmerican clientsfor its
Swissprivate-banking business.
Mr.Levinrepeatedly asked why
Credit Suisse won’t provide infor-
mation about customersthe bank
recruited within the U.S.
Mr.Dougan and three other ex-
ecutives,including the bank’sgen-
eral counsel, said the bank can’t

provide extensiveinformation about
U.S. clientsuntil the Senateratifies
Continued from first page
an amended2009 double-taxation
treaty between the U.S. and Switzer-
land. Thebank has noted the proto-
colalready has been approved by
theSwissParliament.
TheSenatehas yettoratify the
agreement amid opposition from
onelawmaker,Sen. Rand Paul (R.,
Ky .). Aspokeswoman forMr. Paul
didn’t immediately respond to are-
quest forcomment.
Credit Suisse executives also
were quizzedatlength about evi-
denceinthe Senatereport that bank
management mayhavesought to ar-
tificially bolster the performanceof
itsSwissprivate-banking business
in financial reporting for2012 by
augmenting itsso-called net newas-
setsfigure. Likeother Swissbanks,
Credit Suisse has seen money gener-
ally flow out of itsSwissprivate
bank from clientsinmanyregions
as thoseinternational customers
seek to comply with laws at home.
Credit Suisse executives ac-
knowledged at the hearing that it is

conducting an internal reviewofthe
matter. Thereissofar no indication
figureswereinaccurately reported
to the public,they said.
“I’m not trying to minimizeit,”
Mr.Dougan said, “but it’sadetail.”
Mr.Levinquickly responded:
“You maycall it adetail, I’dcall it
something investorswould presum-
ably look at.”
TheSenatereport estimates
Credit Suisse had at one time some
22,000 American clients, storing 12
billion Swissfrancs ($13.5 billion at
current exchangerates)atthe bank.
Thereport notes that clientsassoci-
ated with about1%ofthe American
accountshavebeen identified to
U.S. authorities.
Mr.Dougan and his colleagues
testifying Wednesdaysaid asignifi-
cant portion of the U.S linked as-
setscited in the report have been
deemed taxcompliant. Theexecu-
tivesalso said morethan athirdof
the accountscited in the report held
lessthan $10,000.
In early 2009,Credit Suisse rival
UBS reached adeferred prosecution
agreement with the DOJ, admitted

to helping American clientsevade
taxesand agreed to pay$780mil-
lion. UBS ultimately handed thou-
sands of names of clientstoU.S.au-
thorities.
Credit Suisse is expected to
eventually reach asettlement with
theDOJ that exceeds the amount
paid by UBS.
CEOBrady Dougan is sworn in beforeaSenate panel on Wednesday.
AgenceFrance-Presse/Getty Images
8 |Thursday, February27, 2014 THE WALL STREETJOURNAL.
U.S. NEWS
SurveillanceRev amp Weighed
WASHINGTON—Administration
lawyershavepresented the White
House with four options forrestruc-
turing the National Security
Agency’sphone-surveillancepro-
gram, from ditching the controver-
sial collection altog ether to running
it through the telephone companies,
according to officials familiar with
the discussions.
President Barack Obama in Janu-
aryasked U.S. intelligenceagencies
and the attorney general to report by
March 28 on alternatives forrevamp-
ing the program in away that would
take it out of the NSA’shands.

TheOfficeofDirector of National
Intellig enc eand the JusticeDepart-
ment have pr ovided the options
ahead of schedule,these people said.
None of the three options forre-
locating the datahavegained uni-
versal favor. But failuretoagree on
one of them would leave only the
option of abolishing the program,
which would be asetback forintelli-
genceagencies and other backersof
the surveillanceeffort. Of the three
options forrelocating the data, two
of them—with phone companies or
another government agency—ap-
pear most technically possible.
Under the current program, the
NSAcollectsmillions of U.S. phone
recordsfromthree phone compa-
nies,which former officials have
identified as AT&T Inc., Verizon
Communications Inc.and Sprint
Corp.
Sincethe start of revelations
about NSAsurveillancelast year by
former NSAcontr actor Edward
Snowden, the phone-records pro-
gram has sparked the most contro-
versy. Some lawmakersand govern-
ment officials have defended it as

critical to fighting terrorism, while
othersargue it amountstoamassive
violation of constitutional rights.
Obama administration officials
have sought to preservethe collec-
tion of phone recordsinaway that
raises fewerconcerns about privacy.
One way of doing that would
have the phone companies retain
the data, officials said. TheNSA
would then tell the companies when
it needs searches of call records
concerning specific phone numbers
the agencybelieves areconnected to
terrorism. Thecompanies would
provide the resultstothe NSA.
Under this model, the NSAwould
only collect the datathat comes in
response to the search, rather than
millions of unrelated American
phone records.
Several lawmakershavepro-
posed legislation on Capitol Hill that
would take this approach. But tele-
communications companies oppose
this option.Phone companies likely
would demand liability protection
andpossibly other conditions to
avoid outside demands fordata—for
instance, forrun-of-the-mill legal

cases such as divorce proceedings.
Already,some criminal defen-
dantshavesought access to the NSA
records, claiming the datacould
help showtheir innocence.
Thephone-companyoption is
also opposed by the chairman of the
House intelligencecommittee, Rep.
MikeRogers(R.,Mich.), who told
TheWall Street Journal this week
that the proposal doesn’t have
enough supportfor committeeap-
proval and aHouse floor vote.
Phone companies ha ve not yet
been consulted on options,atelecom-
munications-industryofficial said.
Asecond option present ed to the
WhiteHouse would have agovern-
ment agencyother than the NSA
hold the data, according to aU.S.of-
ficial. Candidates forthis option
could include the Federal Bureau of
Investigation, which some current
andformer intelligenceofficials
have recommended.
Another possibility floated in
policycircles wasturning the pro-
gram over to the custody of the For-
eign IntelligenceSurveillanceCourt,
which oversees the phone-dataand

other NSAsurveillanceprograms,
butjudges have balked at an ex-
panded role forthe court.
Athirdoption would be foranen-
tity outside the phone companies or
the government to hold the data, offi-
cials said. Th is approach has been
criticized by privacygroups who say
such athirdparty would just become
an extension of the NSAand would
provide no additional privacybenefit.
Afinal alternativewould be to
scrap the phone-dataprogram and
instead bolster investigativeefforts
under current authorities to obtain
the information about possible ter-
rorist connections some other way,
an official said. Mr.Obama acknowl-
edged this approach in his January
speech, but said “morework needs
to be done to determine exactly how
this system might work.”
Caitlin Hayden, aspokeswoman
forthe WhiteHouse National Secu-
rity Council, declined to speak about
specific proposals.
She said that sincethe president’s
Jan. 17 speech unveiling surveillance-
overhaul measures,the JusticeDe-
partment and intelligenceagencies

have worked on developing options.
“They have kept us abreast of
their progress, and we look forward
to reviewing those options,” she
said. “Beyond that, I’m not in apo-
sition to discussthe details of an
ongoing process. ”
Mr.Obama will consult with
Congressand will seek legislation,
as needed, she added.
Twoofthe options echo recom-
mendationsofthe president’sre-
viewpanel, which issued areport in
December that proposed the NSA
phoneprogram be overhauled so
the databeheld by either the phone
companies or athirdparty.
In his Januaryspeech, Mr.Obama
said both of those approaches “pose
difficult problems. ” Retaining the
dataatthe phone companies,he
said, “could requirecompanies to al-
tertheir procedures in waysthat
raise newprivacyconcerns. ”
Establishing athirdparty to hold
the data, he said, could be even
moredifficult. “Any thirdparty
maintaining asingle consolidated
database would be carrying out
what’sessentially agovernment

function, but with moreexpense,
more legal ambiguity,potentially
lessaccountability,all of which
would have adoubtfulimpact on in-
creasing public confidencethat their
privacyisbeing protected,” he said.
Separately on Tuesday, the Jus-
ticeDepartment notified aconvicted
terror suspect that NSAbulk-data
surveillance had been used against
himbeforehepleaded guilty to a
charge of attempted material sup-
port forterrorism.
Thedefendant, an Albanian im-
migrant named AgronHasbajrami,
pleaded gu ilty in federal court in
Brooklyn in 2012,after he wasac-
cused of sending morethan $1,000
to someone in Pakistan to finance
terrorism.
Sincethe revelations about NSA
spying,the government has notified
two criminal defendantsthat they
intended to offer evidencederived
from NSAinterception of electronic
communications.The Hasbajrami
notification marks the firsttime
such anoticehas been given to a
defendant who has already pleaded
guilty,officials said.

Theletternotifying Mr.Hasba-
jrami noted that he wasstill seeking
to have his conviction vacated. Mr.
Hasbajrami’sattorney,Steve Zissou,
said he would seek moreinforma-
tion about the surveillanceofhis
client.
Patrick Toomey,alawyer at the
American Civil Liberties Union, said
the newfiling shows “warrantless
surveillance has playedarole in
more criminal cases than the gov-
ernment has ever beforeadmitted,
andthe government has been im-
properly withholding that fact from
defendantsfor years.”
BY SIOBHAN GORMAN
AND DEVLIN BARRETT
President
Proposing
Upgradesto
Roads, Rails
President Barack Obama on
Wednesdaywas expected to propose
spending $302 billion to repair the
U.S.’s roads and transit systems,one
of the few areas whereboth Demo-
cratsand Republicans agree the
government needs to spend more
money.

Though revamping America’sin-
frastructur ehas garnered bipartisan
support, Congressfor yearshas
grappled with howtopay forit. On
Wednesday, House Ways and Means
CommitteeChairman Dave Camp
(R., Mich.) released aplan to over-
haul the taxcode that included
$126.5 billion in spending forhigh-
waysand other infrastructure.
Mr.Obama wantstopay forhis
four-year plan by,among other
things, closing taxloopholes and
changing howbusinesses aretaxed,
the WhiteHouse said. It is unclear,
however, ex actly which loopholes
Mr.Obama wantstoclose and
whether they would gain lawmakers’
support.
House Speaker John Boehner (R.,
Ohio) said he and Mr.Obama dis-
cussed the country’sinfrastructure
problems when they metTuesday,
their firstone-on-one meeting in
over ayear,but didn’t come to an
agreement.
“We’ve gottofind the funding
mechanismtofund our infrastruc-
tureneeds and so the hunt has been
under way forthe last year and a

half to find that funding source.I
wish Icould report to youthat
we’vefound it, but we haven’t, ” Mr.
Boehner said at anewsconference
Wednesday.
One idea that has been floated is
paying forthe upgrades by raising
fuel taxes. TheU.S.’ s18.4-cent-a-g al-
lon gastax and 24.4-cent-a-gallon
diesel-fuel taxhaven’t been raised in
20 years. They areamajor source of
funding forhighway repairs.
Highway upgrades sometimes
arepaid forbytransferring money
from the TreasuryDepartment’s
general fund. Mr.Boehner said he
doesn’t think Republicans could
support that.
Another proposal that has been
discussed, which is supported by
Sen. Rand Paul (R., Ky.), would pay
forinfrastructureupgrades by mak-
ing changes to the taxcode to en-
courageU.S.companies operating
internationallytobring money kept
overseas back home.
Thepresident also is expected to
announcethe start of a$600 million
competition forgrantsaimed at
roads,portsand transit systems.

Mr.Obama’splans areaimed at
putting Americans back to work.He
will tell Congressthat if it doesn’t
find money to support the Highway
Trust Fund, 700,000 jobs will be put
at risk.The Highway Trust Fund is
supported by the gastax and other
revenue and could have difficulty
meetingall of itsobligation in the
second half of this fiscal ye ar,the
nonpartisanCongressional Budget
Officesaid Wednesday.
Infrastructur eprojectshavelong
been on Mr.Obama’slist of priori-
ties.Recently,VicePresident JoeBi-
den traveled to portsinIllinois,
Texas and the Panama Canal to
highlight their importance.
—Kristina Peterson
contributed to this article.
BY JARED A. FAVOLE
European PressphotoAgency
One recommendation forphone surveillanceatthe National SecurityAgency,whose Maryland headquarters areshown above,would be to end the program.
None of the three options
for relocating datahave
gaineduniversalfavor.
THE WALL STREETJOURNAL. Thursday, February27, 2014|25
Forinformation about listing your funds, please contact: Lauren Berkemeyer tel: +44 20 7572 2102; email:
Data as shown is forinformation purposes only.Nooffer is being made by Morningstar,Ltd.orthis publication. Funds shown aren’tregisteredwith the U.S. Securities and Exchange Commission and aren’tava ilable forsale to United States citizens and/or residents
except as noted. Prices areinlocal currencies. Allperformancefigures arecalculatedusing the most recent prices available. 12-month and 2-year returns maybecalculatedover11- and 23-month periods pending receipt and publication of the lastmonth end price.

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n ARIX ABSOLUTE RETURN INVESTABLEINDEX
Feri Institutional Advisors, www.feri.de
ARIX CompositeGross USD
OT
OT
GBR
01/31.00 USD1603.72 0.1 5.8 6.1
n CG Portfolio Fund Ltd
NAV
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CYM
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25839.68
5.3 10.9 9.8
Citi Alumni AreaForce in Wa shington
WASHINGTON— While manyother

banks have faded from viewinWash-
ington’ spowercircles, Citigr oup Inc.
is becoming moreprominent.
Several alumni of the bank,which
wasbailed out by U.S. taxpayers dur-
ing the financial crisis,hold topjobs
in government and at the Federal Re-
serve—a sign that Citigroup’ sreputa-
tion is on the mend afterthe lows
touched during the 2008 turmoil. But
some lawmaker sand advocacy
groups areraising concerns that
Citi’snewfound favorwith govern-
ment gives it inordinatesway within
the Obama administration. The
WhiteHouse declined to comment.
At least five former Citigroup of-
ficials nowhold topjobs in Wash-
ington, including TreasurySecret ary
JacobLew,U.S.Trade Representa-
tiveMichael Froman and the Trea-
sury’sNathan Sheets,who is await-
ing confirmation as undersecretary
forinternational affairs.
Stanley Fi scher, who wa sprevi-
ously avic echairman at Citigroup,
wasnominated in Februarytobethe
Feder al Reserve’ snextvicechairman,
while Marisa Lago is nowTreasury’s
assistant secretaryfor international

marketsand development.
Some,likePeter Orszag, former
director of the OfficeofManage-
ment andBudget, have gone from
government poststoCitigroup.
Theascension of Citigroup offi-
cials to topgovernment jobs marks
asignificant turnabout forthe bank,
which sawits reputation tarnished
in the wake of a$45 billion govern-
ment rescue during the financial cri-
sis in 2008.The bank has spent the
yearssincethe crisis trying to re-
build itsimagebyinstalling anew
chief executive, fully repaying its
government funds and hiring dozens
of Washingtonlobbyists.
Forsome,Citigroup is replacing
Goldman Sachs Group Inc.asWall
Street’sfarm team forWashington’s
big leagues.
“Goldman’s tried to keep alow
profile.They’vebeen vilif ied forso
long,sothey’renot agood choice.
J.P. Morganisn’t agood pool either,
they’vebeen tarnished. Citi is dif-
ferent,” said Stavros Gadinis, assis-
tant professor of lawwho focuses
on financial re gulation at the Uni-
versity of California at Berkeley.

Therec ent round of appointees
were originally recruited to Citigroup
from topgovernment and economic
posts, part of apush by former exec-
utives,including ex-Chairman Robert
Rubin,himself aformer Treasury
secret ary, and former Chief Executive
Vikram Pandit to hiregovernment of-
ficials who could raise the bank’sin-
ternational profile,said people in-
volved in theeffort.
Citigroup sought out economic,
regulat oryand businessleaderswho
could work easily with overseas
CEOs,the people said.
“A lot of the people that noware
serving or used to serveinsenior po-
sitions were part of averyconscious
effort, ” said one of the people.“The
objectiveand the hope wasthat peo-
ple likethis reinforcedthe institu-
tion’s reputation as the strongest in
the world in thought leadership. ”
However, another person said it
was“absurd” to suggest that the
bank knew that those high-profile
hireswould later go back intogov-
ernment and help boost Citigroup’s
image.
But the bank did offer paypack-

ages to some officials that rewarded
areturn to high-profile government
jobs,insome cases giving big pay-
outsupon leaving.
Mr.Froman gota$2million
payment from Citigroup in recogni-
tion of his serviceand forwaiving
rightstoinvestment fund holdings
when he leftthe bank to join the
Obama administration last year.
Mr.Froman told the Senatehe
would donatethose funds to charity.
Mr.Froman no longer holds Citi
stock or interestsinany Citigroup
funds,accor ding to the Officeofthe
U.S. Trade Representative.
“Ifacompanyoffersfinancial in-
centives to go intogovernment ser-
vice,does that compromise the real
or perceived independenceofthe in-
dividuals while in public service?”
Sen. Charles Grassley (R., Iowa)said
in an emailed statement. “It doesn’t
appear that the Obama Administra-
tion adequately considerswhether
hiring so manypeople from the
same firm, including those who have
received financial incentives to join
the Ad ministration, keeps enough
distancebetween the government

and the privatesector that has an
inter est in government regulations.”
Theaddition of Obama adminis-
tration officials with Citigroup on
theirrésumé is troublesome be-
cause it cangiveapublic perception
of undue influence, said Michael
Smallberg, an investigator with the
Project on Government Oversight.
Aspokeswoman said Citigroup is
“proud that manyofits current and
former people have been dedicated
public servantstotheir home coun-
tries.”
Thereislittle evidencethe con-
nections have helped so far,inpart
because Wall Street remains under
stiff scrutinyand toughened rules in
the wake of the 2010 Dodd-Frank
law. Citigroup,along with all big
banks, is subject to higher capital
requirementsand the Volcker rule
ban on proprietarytrading.
Citigroup has made it easier for
those heading to the public sector to
continue compensation arrangements
that canbeworth millions of dollars.
As part of along-standing policy, em-
ployees who voluntarily leave fora
full-time paid career in government,

charity or education post arestill on
schedule to receiveafull award of
theirdeferred stock and deferred
cash annual inc entiveawards, ac-
cording to a2013 Citigroup quarterly
report filed with the Securities and
Exchange Commission. Those who
leavefor other jobs forfeit the por-
tions that aren’t yetready to be
cashed in.
Andthe bank says it accelerat es
the vesting of outstanding compen-
sation in cases wheretheremay be
conflictsofinterest.
BY STEPHANIE ARMOUR
AND SHAYNDI RAICE
Data providedby:
MARKETS
n ALEXANDRAINVESTMENTMANAGEMENT
Alexandra ConvertibleBond Fund I,Ltd. (Class A)
OT OT VGB 08/31 USD 2155.22 NS NS NS
n BANC INTERNACIONAL D'ANDORRA. BANCAMORA.
Avgd. Meritxell 96, Andorra la Vella. Andorra. Ph. +376.884884 www.bibm.ad
Andfs. Anglaterra UK EQ AND 11/16 GBP 8.47 2.8 3.6 14.9
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Andorfons AlternativePremium
GL EQ AND 12/31 EUR 109.45 16.9 16.9 8.3
Andorfons Mix30 EU BA AND 02/25 EUR 10.43 1.1 5.9 3.8
Andorfons Mix60 EU BA AND 12/19 EUR 8.96 4.4 7.1 -2.5
n CG Portfolio Fund Ltd
NAV OT OT CYM 06/07 GBP 25839.68 5.3 10.9 9.8
n CHARTERED ASSET MANAGEMENT PTELTD-TELNO:65-6835-8866
Fax No: 65-6835 8865, Website: www.cam.com.sg, Email:
CAM-GTF Limited OT OT MUS 02/14 USD 337077.84 1.5 -20.1 -2.3
n Citadele
Republikas square 2a, Riga, LV-1522, Latvia
Citadele EasternEurop Bal EU BD LVA 02/25 EUR 16.61 0.2 1.4 5.8
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Citadele RussianEq EE EQ LVA 02/25 USD 19.87 -11.6 -14.0 -7.7
n DJE INVESTMENT S.A.
internet: www.dje.lu email: phone:+00 352 269 2522 0fax:+00 352 269 25252
DJE RealEstate POTOTLUX 02/26 EUR 4.31 -0.7 -8.0 -6.9
DJE-Absolut POTOTLUX 02/26 EUR 255.08 1.3 8.0 7.9
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DJE-Div& SubstanzPOTOTLUX 02/26 EUR 280.70 -0.8 7.1 9.3
DJE-Gold&Resourc POTEQLUX 02/26 EUR 130.89 7.9 -15.4 -18.9
DJE-Renten GlblPEUBDLUX 02/26 EUR 150.73 1.3 2.8 4.5
LuxPro-Dragon IASEQLUX 07/20 EUR 144.57 -8.5 5.0 7.6
LuxPro-Dragon PASEQLUX 07/20 EUR 140.29 -8.8 4.4 7.0
LuxTopic-Aktien Europa EU EQ LUX 02/26 EUR 20.37 0.0 7.4 5.6

LuxTopic-Pacific OT OT LUX 02/26 EUR 19.62 -1.6 -8.6 -0.7
n OTHER FUNDS
For information about these funds, please contact us on Tel:+44(0)2078429694/9633
Medinvest PlcDublin OT EQ IRL 09/30 USD NS.00 NS 1.3 -4.4
n WINTON CAPITAL MANAGEMENT LTD
Tel: +44 (0)20 7610 5350 Fax: +44 (0)20 7610 5301
Winton EvolutionEUR Cls HGLOTCYM 01/31 EUR NS.00 -3.1 7.2 1.5
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Tel: +7501 258 3160 www.hermitagefund.com
The HermitageFund GL EQ JEY 03/12 USD 963.12 4.5 105.6 -23.2
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T: +44(0)20 7838 7580, F: +44(0) 20 7838 7590, www.horsemancapital.com
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GH FUNDSEUR OT OT
CYM

01/31 EUR 156.05 0.6 7.7 7.2
n HSBC Trinkaus Investment ManagersSA
E-Mail:
Telephone: 352 -4718471
HSBC TrinkausGolden Opportunities
OT OT LUX 02/25 USD 85.86 22.7 -25.9 -22.7
Prosperity ReturnFund AJPBDLUX 12/06 JPY 8577.68 -9.3 -8.4 0.3
Prosperity ReturnFund BEUBALUX 12/06 JPY 9032.12 4.6 11.0 13.2
Prosperity ReturnFund CEUBALUX 12/06 USD 79.01 -12.2 -11.1 -1.0
Prosperity ReturnFund DEUBALUX 12/06 EUR 121.37 -9.0 -8.8 8.1
Renaissance HghGrade Bd A
EU BA LUX 12/06 JPY 10807.34 3.5 5.1 11.3
Renaissance HghGrade Bd B
EU BA LUX 12/06 JPY 11130.39 17.9 25.6 23.9
Renaissance HghGrade Bd C
EU BA LUX 12/06 USD 96.94 -0.9 0.7 8.4
Renaissance HghGrade Bd D
EU BA LUX 12/06 EUR 102.83 -4.6 -4.1 6.9
n MP ASSET MANAGEMENT INC.
Tel: +386 1587 47 77
MP-BALKAN.SI EE EQ SVN 08/12 EUR 19.29 -1.9 -8.4 -10.9
MP-TURKEY.SI OT OT SVN 02/24 EUR 33.54 -7.4 -29.9 -4.7
Paragon LimitedUSD AEUEQCYM 12/31 USD NS.00 12.7 12.7 14.2
UK FundUSD AOTOTCYM 04/13 USD 157.94 1.8 NS NS
n PT CIPTADANA ASSET MANAGEMENT
Tel: +6221 25574 883 Fax: +6221 25574 893 Website:www.ciptadana-asset.com
Indonesian GrthFund GL EQ BMU 02/19 USD 154.09 13.0 -16.5 -10.2
n THE NATIONAL INVESTOR
PO Box 47435, Abu Dhabi, UAE Web:www.tni.ae
MENA SpecialSits Fund OT OT BMU 01/31 USD 1127.97 1.1 5.8 6.7

MENA UCITSFund OT OT IRL 02/20 USD 1393.41 7.5 30.0 19.1
UAE BlueChip Fund OT OT ARE 02/20 AED 10.81 15.9 81.3 52.9
n YUKI MANAGEMENT &RESEARCH
n YMR-N Series
YMR-N GrowthFund JP EQ IRL 02/26 JPY 13497.00 -6.1 37.6 26.4
n Yuki Asia Umbrella Series
Yuki ReboundingGro Fd JP EQ IRL 02/26 JPY 16540.00 -4.0 50.9 34.9
n Yuki Mizuho Series
Yuki MizuhoJpn Dyn Gro JP EQ IRL 02/26 JPY 5757.00 -6.4 35.9 25.6
Yuki MizuhoJpn Inc JP EQ IRL 02/26 JPY 10062.00 -3.5 27.6 21.4
Yuki MizuhoJpn Lg Cap JP EQ IRL 02/26 JPY 6178.00 -8.2 25.3 18.1
Yuki MizuhoJpn LowP JP EQ IRL 02/26 JPY 18651.00 -5.4 49.4 33.8
Yuki MizuhoJpn Val Sel AS EQ IRL 02/26 JPY 9171.00 -4.1 50.2 38.2
GH FUNDSGBP OT OT
CYM
01/31 GBP 163.37 0.6 7.8 7.6
GH FundSUSD OT OT
CYM
01/31 USD 183.43 0.6 7.8 7.6
GH FundUSD OT OT
GGY
01/31 USD 318.33 0.5 6.5 6.4
Hedge Investments OT OT
GGY
08/16 USD 158.48 NS NS 3.6
Leverage GHUSD OT OT
GGY
01/31 USD 148.62 0.9 11.1 10.7
MultiAdv ArbCHF Hdg OT OT
JEY

01/31 CHF 100.74 0.8 3.6 3.9
MultiAdv ArbEUR Hdg OT OT
JEY
01/31 EUR 112.34 0.8 4.0 4.2
MultiAdv ArbGBP Hdg OT OT
JEY
01/31 GBP 122.34 0.8 4.4 4.7
MultiAdv ArbSEUR OT OT
JEY
01/31 EUR 126.73 1.0 5.3 5.6
MultiAdv ArbSGBP OT OT
JEY
01/31 GBP 133.92 0.9 5.6 6.0
MultiAdv ArbSUSD OT OT
JEY
01/31 USD 144.88 0.8 5.2 5.7
MultiAdv ArbUSD OT OT JEY 01/31 USD 212.29 0.8 4.1 4.5
n HSBC Uni-folio
Asian AdbantEdgeEUR OT EQ JEY 01/31 EUR 97.06 -0.4 4.9 4.0
Asian AdvantEdge OT EQ
JEY
01/31 USD 181.80 -0.4 5.0 4.7
Emerg AdvantEdge OT EQ
JEY
09/28 USD 151.22 3.4 -2.4 -5.5
Emerg AdvantEdgeEUR OT EQ
JEY
09/28 EUR 82.99 2.8 -3.0 -5.9
Europ AdvantEdgeEUR OT EQ
JEY

06/30 EUR 127.84 -3.4 -1.3 2.2
Europ AdvantEdgeUSD OT EQ
JEY
06/30 USD 135.07 2.0 4.3 5.1
Real AdvantEdgeEUR OT OT
JEY
04/30 EUR 104.69 1.3 -9.5 -1.9
Real AdvantEdgeUSD OT OT
JEY
04/30 USD 105.31 1.5 -8.8 -1.7
Trading AdvantEdge OT OT
GGY
01/31 USD 126.86 -2.6 -12.0 -8.6
Trading AdvantEdgeEUR OT OT
GGY
01/31 EUR 114.61 -2.2 -12.0 -8.6
Trading AdvantEdgeGBP OT OT GGY 01/31 GBP 122.37 -2.6 -12.0 -8.5
n MERIDEN GROUP
Tel: +376 741 175 Fax: +376 741 183 Email:
Antanta CombinedFund EE EQ AND 02/21 USD 208.41 -0.7 -22.8 -19.2
Antanta MidCapFund EE EQ
AND
02/21 USD 353.52 -2.1 -15.4 -17.2
Meriden OppsFund GL OT
AND
02/05 EUR 22.68 0.0 -11.2 -11.0
Meriden ProtectiveDiv GL EQ AND 11/24 EUR NS.00 -2.8 NS NS
n Pictet Funds (Europe) SA,ROUTEDESACACIAS60, CH-1211 GENEVA 73
Tel: +41(58) 323 3000 Web: www.pictetfunds.com
Pictet-Abs RetGl Div-P EUR GL OT LUX 02/25 EUR 114.17 0.3 -3.3 -0.9

Pictet-Agriculture-P EUR OT OT LUX 02/25 EUR 150.01 -1.9 -1.0 3.8
Pictet-Asian EqExJpn-P USD
OT OT LUX 02/26 USD 180.11 -2.1 1.3 1.7
Pictet-Asian LocCur Dbt-P USD
AS BD LUX 02/26 USD 143.84 0.9 -7.2 -1.9
Pictet-Biotech-P USD OT EQ LUX 02/25 USD 669.57 20.9 76.1 45.7
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