Hudson Yards Infrastructure Corporation (A Component Unit of The City of New York) 1

2019 ANNUAL REPORT Corporation Infrastructure Infrastructure Hudson Yards Yards Hudson Hudson Yards Infrastructure Corporation (A Component Unit of The City of New York) 2

Letter from the President from Letter Auditors’ Report Independent Analysis Discussion and Management’s (Unaudited) (Deficit) ofStatements Net Position ofActivities Statements Balance Sheets Governmental Funds ofReconciliations the Governmental to the Statements Balance Sheets Funds (Deficit) of Net Position of Statements Governmental Funds in and Changes Expenditures Revenues, Balances Fund ofReconciliations the Governmental of Statements Revenues, Funds and Changes in Fund Expenditures ofActivities Balances to the Statements Statements Notes to Financial TABLE OF TABLE CONTENTS 1 2 4 Statements: Basic Financial Statements Government-wide Financial 14 15 Statements Financial Governmental Funds 16  18 19 21 22 Hudson Yards Infrastructure Corporation (A Component Unit of The City of New York) 1 The Corporation was created in 2005 to finance certain property acquisition and infrastructure infrastructure and acquisition property certain finance to 2005 in created was Corporation The work (the “Project”), including the extension of the No. 7 subway line from Times Square to 7 subway extension”). (“No. Avenue and Eleventh 34th Street West bounded by Seventh is generally Area” District or the “Project Financing Yards Hudson The Avenues Twelfth and Eleventh on the north, Street 43rd West on the east, Avenues and Eighth Corporation The Area”). on the south (the “Project 29th and 30th Streets West and on the west, Area. within the Project development from primarily derives its revenues corporation development local a is (“HYDC”) Corporation Development Yards Hudson The It has its own distinct audited the Project. by the City to manage and implement created financial statements, which are published separately from the audited financial statements of HYIC. and interest to pay principal applying revenues include collecting revenues, operations HYIC’s is legally HYIC Although costs. Project pay to proceeds disbursing bond and its bonds on is an instrumentality of the City the Corporation HYDC, from the City and both from separate as a blended component unit. financial statements and included in the City’s the and the City, HYDC HYIC, between Agreement and Development Under the Support City has agreed to make payments, subject to annual appropriation, in an amount sufficient, to pay Area the Project development within from HYIC receives together with any revenues payments support Interest outstanding. for as long as those bonds are on its bonds, interest (“ISP”) are required to be made by the City only when the Corporation receives insufficient legal Based on current bonds. on supported the development to pay interest from revenues up to $3.5 billion of the ISP. HYIC bonds may benefit from authorization, at located secondary entrance, A was opened in September 2015. 7 subway extension No. The of portion the The opened in September 2018. East, and Hudson Boulevard 35th Street West 33rd West between located & Boulevard), named Hudson Park (previously Abzug Park Bella West 36th and West between An expansion August 2015. opened in 36th Streets, West and in the design phase. is currently 39th Streets Completed development in the Area Project includes 10 a Hudson 1.8 Yards, million square feet office tower; The Eugene, a residential development with a 88-story condominium a tower; Avenue, 600-unit rental apartment; 15 844Yards, Hudson Tenth apartments; rental 555 30 Hudson Yards, a 2.6 million square feet office space; and mixed use 35 Hudsonresidential Yards,and office a 71-story tower. In March 2019, several& Shops The cultural space; public five-acre a and Gardens, and retail Square Public the amenities including opened, were Marcus Neiman first York’s New featuring mall shopping feet square million one a Restaurants, a public sculpture. Vessel, space and the a performance art Shed, The store; 2017, to Prior HYIC Fiscal Year had issued $3 billion of bonds to finance OnProject. the May of a portion its bonds to refund $2.1 million refunding HYIC issued approximately 2017, 30, Term into a HYIC entered 2019, 1, On February rates. lower interest outstanding bonds at up draw to allowing the Corporation N.A., with Bank ofAmerica, (“Loan”) Agreement Loan to $350 million to finance additional infrastructure projects in Project the the unchanged from Area. $2.72 billion of bonds outstanding, HYIC had approximately 2019, 30, of June As fiscal year. previous truly yours, Very Alan Anders President We are pleased to present the Fiscal Year 2019 Annual Report for for Report Annual 2019 Year the Fiscal to present pleased are We or “Corporation”), (“HYIC” Corporation Infrastructure Yards Hudson York ofCity by the New created corporation a local development (the “City”) under the Corporation Not-For-Profit Law of the State of New York.

LETTER LETTER FROM THE PRESIDENT Hudson Yards Infrastructure Corporation (A Component Unit of The City of New York) 2

tion of these financial statements in statements based on our audits. We relevant to the preparation and fair s basic financial statements as listed in ial position thereof for the years then rally rally accepted in the United States of vernmental vernmental activities of Hudson Yards ty of New York, as of and for the years ent ent fairly, in all material respects, the United States of America; this includes udit to obtain reasonable assurance about it it procedures that are appropriate in the itor’s judgment, including the assessment e about the amounts and disclosures in the includes evaluating the appropriateness of ed in the United States of America. on the effectiveness of the entity’s internal nt and appropriate to provide a basis for our relevant relevant to the entity’s preparation and fair accounting accounting estimates made by management, ts, whether due to fraud or error. In making Hudson Yards Infrastructure Corporation as l misstatement, whether due to fraud or error. or error. l misstatement, whether due to fraud statements. tatements.

ples generally accepted in the he preparation and fair presenta r considers internal control that we plan and perform the a ting principles generally accept ting principles are free from material misstatement. INDEPENDENT AUDITORS’ REPORT

the Board of Directors of To the Members of Corporation Infrastructure Hudson Yards We have audited the accompanying financial statements of the go Infrastructure Corporation (“HYIC”), a component unit of The Ci ended June 30, 2019 and 2018, which collectively comprise HYIC’ related notes to the financial s the table of contents, and the

of June 30, 2019 and 2018, and the ended in accordance with accoun respective changes in financ Opinion Opinion In our opinion, the financial statements respective financial position of referred the governmental activities of to above pres We We believe that the audit evidence we have obtained is sufficie audit opinion. accounting policies used and the reasonableness of significant financial the of presentation overall the as evaluating well as presentation of the financial statements in order circumstances, but to not for the purpose of expressing an opinion design aud control. Accordingly, we express no such opinion. An audit also financial financial statements. The procedures selected depend on the aud of the risks of material misstatement of the financial statemen those risk assessments, the audito America. Those standards require statements financial the whether An audit involves performing cedures pro to obtain audit evidenc Our responsibility is to express conducted our an audits in opinion accordance on with auditing these standards gene financial presentation of financial statements that are free from free from are materiathat statements financial of presentation Auditors’ Responsibility Management is responsible for t accordance with accounting princi the design, implementation, and maintenance of internal control markspaneth.com markspaneth.com Financial Statements Management’s Responsibility for the F 212.370.3759 F 212.370.3759 P 212.503.8800 212.503.8800 P Marks Paneth LLP Paneth Marks Avenue 685 Third 10017 NY New York, Hudson Yards Infrastructure Corporation (A Component Unit of The City of New York) 3 e information for consistency with ation in accordance with auditing upplement the basic financial statements. f America require that the management’s e us with sufficient evidence to express an hich consisted of inquiries of management atements, is required by the Governmental mic, or historical context. We have applied atements, and other knowledge we obtained express express an opinion or provide any assurance

an appropriate operational, econo New York, NY September 27, 2019 on the information because the limited procedures do not provid any assurance. opinion or provide standards generally accepted in the United States of America, w about the methods of preparing the management’s responses to our inquiries, the basic information financial st and comparing th during our audits of the basic financial statements. We do not Accounting Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in certain limited procedures to the required supplementary inform Accounting Accounting principles generally accepted in the United States o discussion and analysis on pages 4 through 13 be presented to s Such information, although not a part of the basic financial st Other Matter – Required Supplementary Information Supplementary Matter Required – Other Hudson Yards Infrastructure Corporation (A Component Unit of The City of New York) 4 HYIC’s HYIC’s purpose is the financing of certain infrastructure improvements in the Yards HudsonYards Hudson the by spearheaded is which development area the finances but ondirectly, development the in engage not does HYIC “Project”). theWest Side of Manhattan (the bounded by Seventh generally is in an area Project The public entities. and carried out by existing (“HYDC”) Development Corporation on the south 30th Streets 29th and West on the west and Avenue Twelfth on the north, Street 43rd West 41st on the east, and Avenues and Eighth Avenue Seventh from Subway 7 No. the of extension an of construction and design (1) of: consists Project The Area”). “Project (the to Street Eleventh Avenue 34th Authority and West (the Street “Subway (2) Extension”), acquisition from the Transportation Metropolitan West and between Avenues and Eleventh Tenth between development rights (“TDRs”) yards of over its rail transferable certain (“MTA”) in the and streets (3) construction of public open spaces, a system of or “ERY”), parks, Yards” (“Eastern Rail Streets 33rd West 30th and and 2015 September in service began extension subway The Project. the for acquisition property (4) and Amenities”) (“Public Area Project August 2015. was completed and opened to the public in and Boulevard the construction of of a portion Hudson Park HYIC fulfills its purpose through borrowing to finance theProject and the collection of revenues to support its operationsits and debt. service HYIC revenues include: (1) Interest Support Payments (“ISP”) made Agreement, Support by Yards The Hudson Additional Borrowing and the Agreement and Development City Support Amended and Restated the of New York (the “City”) under the terms of on up to $3.35 billion of HYIC ISPs subject to annual appropriation, the City to pay to HYIC, obligates that (together the “Agreement”) debt in an amount equal to the between difference the amount of funds available to HYIC to pay interest on such debt and the amount of interest due on such debt; (2) payments in lieu of real estate that taxes have (“PILOT”) been assigned to HYIC under agreements with agreements with accordance in made to be are that and MTA, and the City, the (“IDA”), Agency Development Industrial City York New the between Equivalency developers (“TEP”) Payments and Agreements”); made and (3) IDA Tax by others the (“PILOT City under the terms collected taxes property the amount of real subject to annual appropriation, the City to pay to HYIC, which obligates ofAgreement, the by the City on new development (including substantial rehabilitation of existing buildings) in the Area; (4) Project District Improvement Bonuses (“DIB”) paid by private developers in exchange for the right to create additional density in the Area; Project and (5) payments in lieu of the mortgage recording tax (“PILOMRT”) required to be made by private developers entering into Agreements. PILOT PILOT Agreements that are entered into by developers are done so because payments PILOT during the first 19 years are substantially lower of done in accordance transfers funds and payments are ofApplication revenues, be due. would otherwise that taxes estate than the real the Second Indenture”), as amended (the “First 2006, December 1, between HYIC and US Bank dated Indenture Trust with the terms of the 2019 (the “Third 1, February dated Indenture Trust Supplemental Third and (the “Second Indenture”) 2017, 1, May dated Indenture Trust the (“Indentures”). collectively, Indenture”), ORGANIZATIONAL OVERVIEW ORGANIZATIONAL The The following is a narrative overview and analysis of the financial activities ofYardsCorporation Infrastructure (“HYIC”) the as statements, Hudson of financial government-wide HYIC’s with conjunction in read be should It ended. then years the for and 2018, and 2019 30, June governmental funds financial statements and the notes to the financial statements. management’s discussion and Theanalysis (this section); (2) the financial government-wide financial statements; (3) the statements governmental funds financial consist of four parts: (1) statements. and (4) the notes to the financial statements; The government-wide financial statements, which include the statements of net position (deficit) (“GASB”) Board Accounting Standards with Governmental and accordance in a whole, about HYIC as to display information presented the statements of activities,are prepared are statements financial government-wide The finances. ofHYIC’s overview broad a with reader the provide to is This standards. when earned recognized is revenue Accordingly, ofbasis the accrual and focus accounting. measurement economic resources the using of the timing of regardless cash flows. when a liability is incurred, recorded are and expenses modified the and focus measurement resources financial current the using presented are statements financial funds governmental HYIC’s accrual basis of accounting, in which revenue is recognized when it measurable and becomes available to finance susceptible expenditures in to the current fiscal accrual; period. Expendituresare that recognized when is, the related liability when is it becomes when due. recognized which are payable, both rebate on arbitrage on bonds payable and liabilities and interest for principal except incurred, The reconciliations of the governmental funds balance sheets to of presented balances to the statements and changes in fund activities are expenditures ofgovernmental funds statements revenues, to the statements of net position (deficit) statements. between government-wide and governmental funds financial in understanding the differences andassist the reader reconciliations of the As of and for the Years Ended June 30, 2019 and 2018 (unaudited) (unaudited) 2019 and 2018 June 30, Ended Years As of the and for STATEMENTS FINANCIAL THE OF OVERVIEW Analysis and Discussion Management’s Hudson Yards Infrastructure Corporation (A Component Unit of The City of New York) 5 Proceeds received by HYIC for sales of the TDRs (as discussed in Note 5), including the $200 million purchase price and interest costs and interest price including the $200 million purchase in Note 5), TDRs (as discussed by HYIC for sales of received the Proceeds with the Indentures. used by HYIC in accordance were thereon, Under the First Indenture, the Conversion Date is defined as the date on which HYIC certifies that, for each ofthe ofthan 125% not less twowere Revenues”) Recurring (“Net preceding expenses operating fiscal HYIC’s less revenues TEP plus payments PILOT HYIC’s years, bonds and not less than 105% ofdebt service on all then-outstanding senior the maximum annual maximum annual debt service on all outstanding bonds calculated as of the Conversion Date. After the date on which bonds first became callable 15, 2017) (February and the in interest and expenses operating funding after remaining year fiscal a in HYIC by received revenues all Date, Conversion the to prior and current subsequent fiscal year must be used during redeem to or senior purchase if, bonds inexcept that, advance of their maturity, HYIC was Prior not toDate, Conversion the then HYIC reimburse must the first City the for City such has ISPs. made ISPs, such fiscalyear, obligated to any make payments of principal of its bonds prior to maturity unless and until in HYIC revenues amounts received sufficient installments fund sinking of schedule a establish to required was HYIC 2017, 30, May of Date Conversion the After payments. such make to June 30th of than year. for all outstanding debt no later that As of and for the Years Ended June 30, 2019 and 2018 (unaudited) (continued) (unaudited) 2019 and 2018 June 30, Ended Years As of the and for (continued) OVERVIEW ORGANIZATIONAL Analysis and Discussion Management’s Hudson Yards Infrastructure Corporation (A Component Unit of The City of New York) 6

— (494) (618) 2,213 19,762 94,610 Change (24,600) (14,309) (12,729) 257,446 (162,836) (170,843) (112,793) 2018 vs 2017 $ 86,603 $ 75,342

— — — 173 277 8,345 14,193 (2,213) 34,172 86,603 Change (72,410) (10,430) 106,582 100,000 2019 vs 2018 $ $ 44,602 — — 494 2017 2,078 1,322 50,626 12,729 129,526 136,153 306,996 112,793 (170,843) (2,605,621) $ (2,776,464) $ 133,581 — — — — 704 2018 2,213 86,603 26,026 21,840 115,217 230,763 144,160 (2,776,464) $ (2,689,861) $ 208,923 — — — — 981 2019 14,193 34,371 11,410 115,390 264,935 250,742 100,000 (2,689,861) $ (2,675,668) $ 253,525 Gain on defeasance Other revenue Program revenue Program Project Project Bond interest Payment to NYC TFA Loss on defeasance Payment to The City of New York Cost of bond issuance Other REVENUES: On December 21, 2006, HYIC issued its Fiscal 2007 Series A Senior Revenue Bonds (“FY07 Bonds”) in the amount of $2 billion, to partially to partially the amount ofin Bonds”) Bonds (“FY07 Revenue Senior $2 billion, A 2007 Series Fiscal issued its HYIC 2006, 21, On December finance the Project. The FY07 Bonds were term in the Bonds (“FY12 Bonds”) Senior Revenue A 2012 Series bonds its Fiscal HYIC issued 2011, 26, On October 2047. 15, with semiannual on February maturing interestpayment dates beginningon August 15, 2007 and amount of $1 billion, to finance the second portion ofThe the Project. FY12 Bonds are term bonds with semiannual HYIC was not Date, interest prior to the Conversion As discussed above, payments 2047. 15, on February and maturing 2012, 15, beginning on February – HYIC received that and until – and to the extent unless any payments of to make principal on the bonds prior to maturity, obligated such payments. make to in amounts sufficient revenues Bonds B Subordinate Series million and $33.3 Bonds Subordinate A Series 2017 Year Fiscal $2.1 billion HYIC issued 2017, 30, May On to funds, with other available of applied, the FY17 Bonds were Proceeds Bonds”) under the Second Indenture. (together known as “FY17 Indenture First remaining of the conversion the caused refinancing This Bonds. FY12 ofthe million $391 and Bonds FY07 ofthe all refund 2047 in maturity to basis service debt level substantially a on amortized be to Bonds FY12 of million $609 unrefunded the requiring Bonds, Transitional City York a payment to the New HYIC to make enabled the refunding Additionally, annual sinking fund installments. through of a portion to defease its debt. TFA”) Authority (“NYC Finance On February 1, 2019, HYIC entered into a Term Loan Agreement (“Loan”) allowing it to draw up upon the Loan. HYIC has not drawn 2019, ofAs June 30, to Area. $350 in the Project projects infrastructure million to finance additional 2018 and 2017: 2019, following summarizes the activities ofJune 30, ended The HYIC for the years As of and for the Years Ended June 30, 2019 and 2018 (unaudited) (continued) (unaudited) 2019 and 2018 June 30, Ended Years As of the and for STATEMENTS FINANCIAL ANALYSIS—GOVERNMENT-WIDE AND OVERALL HIGHLIGHTS FINANCIAL as noted) except in thousands, (amounts Analysis and Discussion Management’s CHANGE IN NET POSITION NET POSITION (DEFICIT) — Beginning of year NET POSITION (DEFICIT) — End of year TOTAL REVENUES TOTAL EXPENSES: TOTAL EXPENSES TOTAL Hudson Yards Infrastructure Corporation (A Component Unit of The City of New York) 7

(832) (775) 55,898 86,603 (1,607) 55,898 20,043 Change (29,098) (49,141) (25,943) 112,546 2018 vs 2017 $ $

(775) 27,378 14,193 (4,770) 27,378 44,365 47,769 45,140 Change (26,410) (31,180) (33,576) 2019 vs 2018 $ $ 2017 22,471 38,417 15,946 85,730 37,701 392,711 3,093,057 3,130,758 (2,862,194) $ 392,711 $ (2,776,464) 2018 21,696 36,810 15,114 59,787 57,744 448,609 3,043,916 3,101,660 (2,749,648) $ 448,609 $ (2,689,861) 2019 20,921 81,175 60,254 26,211 52,974 475,987 3,017,506 3,070,480 (2,701,879) $ (2,675,668) $ 475,987 Non-capital Prepaid PILOT Prepaid costs bond refunding Unamortized deferred Unrestricted Restricted Current liabilities Current Long-term liabilities TOTAL ASSETS TOTAL ASSETS: Program revenue consists of recurring revenues of PILOT and TEP payments and non-recurring revenues of DIB and PILOMRT. These amounts PILOMRT. of DIB and revenues and TEP payments and non-recurring of PILOT revenues consists of recurring revenue Program assessments, and construction property new agreements, mainly based on developers entering the payments are fluctuate each year as 2) into by developers, entered based on IDA agreements primarily composed of: 1) IDA fees that fluctuate is completion. Other revenue refund rebate arbitrage rates, and 3) a one-time holdings and interest fluctuates based on the balance of cash investment income which in fiscal year 2018 of $8.8 million. recorded In addition, a settlement with a condemnation of construction. year based on the timing and progress expenses fluctuate each Project expenses of project reduction attributed to the large of accrued condemnation expenses, which reduction in a $13.9 million claimant resulted in fiscal year 2018. refunding transaction. the bond due to expense in fiscal years 2018 and 2017 were in bond interest The decreases between the the difference represents an accounting loss on defeasance of $2.2 million, which Due to a cash defeasance in fiscal year 2018, as a period expense reported to defease the bonds, was resources) amount paid (using current carrying value of the defeased bonds and the (see Note 6). of year 2017 included gain on defeasance of $494 thousand, payment to NYC TFA transaction, new activities in fiscal Due to the refunding $113 million, and cost of issuance of $12.7 million. 2019, 2018 and 2017: assets, liabilities and net position (deficit) as of June 30, The following summarizes HYIC’s As of and for the Years Ended June 30, 2019 and 2018 (unaudited) (continued) (unaudited) 2019 and 2018 June 30, Ended Years As of the and for STATEMENTS FINANCIAL ANALYSIS—GOVERNMENT-WIDE AND OVERALL HIGHLIGHTS FINANCIAL (continued) as noted) except in thousands, (amounts Analysis and Discussion Management’s DEFERRED INFLOWS OF RESOURCES: TOTAL NET POSITION (DEFICIT) TOTAL TOTAL LIABILITIES TOTAL NET POSITION (DEFICIT): LIABILITIES: TOTAL DEFERRED INFLOWS OF RESOURCES TOTAL Hudson Yards Infrastructure Corporation (A Component Unit of The City of New York) 8 The increase in assets reported in fiscal year 2019 and 2018 reflected the increased revenue collections retained by HYIC. The capital assets The capital HYIC. retained by collections revenue the increased reflected and 2018 year 2019 fiscal in assets reported in The increase statements of HYIC (see Note 2). they do not appear on the financial by HYIC; therefore, not owned financed by HYIC are revised the resulting from payable bond interest accrued year 2018 was mainly due to increased liabilities in fiscal in current The increase discussed. transaction, as previously following the refunding debt service schedule and a in long-term of bond premium due to the amortization of $16.1 million liabilities in fiscal year 2019 was primarily The decrease in long-termdue to the defeasance of liabilities in fiscal year 2018 was primarily liabilities. The decrease of $10.3 of contingent reduction of reduction amortization, and a net $13.9 million long-term bond premium bonds, $16.8 million of reported $26.9 million of previously condemnation liabilities. inflows reported as deferred amounts and as prepaid treated following fiscal years are for assessments owed in the PILOT payments received that under PILOT agreements assessments on properties in fiscal year 2019 was primarily due to increased the increase and of resources the difference transaction and represents the bond refunding from resulted costs bond refunding have completed construction. The deferred the FY17 Bonds, such amount declines Bonds and FY12 Bonds and recording FY07 the carrying amount of the refunded between removing life of the bonds. each year as the amount is amortized over the due to the issuance of bonds primarily at June 30, 2019, 2018 and 2017 were net position (deficit) balances negative unrestricted The large revenues. future from that will be repaid As of and for the Years Ended June 30, 2019 and 2018 (unaudited) (continued) (unaudited) 2019 and 2018 June 30, Ended Years As of the and for STATEMENTS FINANCIAL ANALYSIS—GOVERNMENT-WIDE AND OVERALL HIGHLIGHTS FINANCIAL (continued) as noted) except in thousands, (amounts Analysis and Discussion Management’s Hudson Yards Infrastructure Corporation (A Component Unit of The City of New York) 9

(618) 8,685 11,168 17,173 Change 150,426 159,729 2018 vs 2017 $ 176,902 $ (2,483)

2,582 3,822 Change (86,741) 176,902 100,277 (183,196) 2019 vs 2018 $ (6,294) $ 1,240 66 2017 2,549 1,322 33,773 16,600 15,946 17,173 $ $ 2,483 — 704 2018 33,773 11,234 11,234 166,372 176,902 $ 210,675 $ 2019 (6,294) 13,816 15,056 79,631 210,675 100,981 $ 204,381 $ 1,240 Program revenue Program Other revenue REVENUES: HYIC reports governmental activity using three funds: (1) a general fund (“GF”), (2) a debt service fund (“DSF”), and (3) a capital projects (3) a capital projects (“GF”), (2) a debt service fund (“DSF”), and funds: (1) a general fund governmental activity using three HYIC reports fund (“CPF”). years ended June 30, 2019, 2018, and 2017: the changes in the GF balances for the The following summarizes As of and for the Years Ended June 30, 2019 and 2018 (unaudited) (continued) (unaudited) 2019 and 2018 June 30, Ended Years As of the and for STATEMENTS FUNDS FINANCIAL ANALYSIS—GOVERNMENTAL AND OVERALL HIGHLIGHTS FINANCIAL as noted) except in thousands, (amounts Analysis and Discussion Management’s NET CHANGE IN FUND BALANCES FUND BALANCE—Beginning of year TOTAL REVENUES TOTAL FUND BALANCE—End of year EXPENDITURES OTHER FINANCING SOURCES (USES) Other financing sources greatly increased in fiscal year 2018 due to the transfer of Second Indenture surplus funds from the DSF to the GF. from the DSF to the funds surplus due to the transfer of Second Indenture in fiscal year 2018 increased greatly Other financing sources Operating expenditures in fiscal year 2019 included a payment of surplus revenues to the City of $100 million. revenues to the City in fiscal year 2019 included a payment of surplus Operating expenditures The amount of program revenue deposited in the GF was based on the difference between projected administrative expenditures and cash and expenditures administrative projected between difference on the based GF was in the deposited revenue program The amount of application fees associated with IDA agreements is comprised of non-recurring revenue Other on hand needed to fund those expenditures. into by developers and investment income. entered Hudson Yards Infrastructure Corporation (A Component Unit of The City of New York) 10

254 (377) 9,985 (9,584) 77,448 Change Change (49,876) 106,775 (192,739) (163,412) (195,638) 2018 vs 2017 2018 vs 2017 $ (39,891) $ (88,863) $ 147 $ 77,825

(522) (863) 4,722 3,402 46,027 (4,010) 46,764 87,263 Change Change (39,891) (88,863) 134,890 2019 vs 2018 2019 vs 2018 $ (43,901) $ $ 1,234 $ 43,362 649 2017 2017 (967) 1,363 (2,247) 49,558 (49,876) 177,890 132,461 325,852 402,591 (195,638) $ 128,014 $ 206,953 $ $ 131,098 796 986 2018 2018 (713) 88,123 39,974 (39,891) 128,014 209,909 133,113 206,953 (88,863) (165,659) $ $ 118,090 $ $ 208,923 2019 2019 4,388 44,222 (1,235) 44,696 88,123 46,027 (78,396) (43,901) 256,673 132,250 118,090 $ $ 164,117 $ 2,030 $ 252,285 Program revenue Program Project costs Project Other revenue NET CHANGE IN FUND BALANCES REVENUES The following summarizes the changes in the CPF balances for the years ended June 30, 2019, 2018 and 2017: The following summarizes the changes in the Other financing sources (uses) was greater in fiscal year 2018 due to the transfer of Second Indenture surplus funds from the DSF to the GF, as from the DSF to the surplus funds due to the transfer of Second Indenture in fiscal year 2018 (uses) was greater Other financing sources discussed. previously Total expenditures were greater in fiscal year 2017, when compared to fiscal years 2019 and 2018, mainly because of the one-time payment to fiscal years fiscal year 2017, when compared in greater were expenditures Total to the fiscal year payment of $51.9 million and costs of bond issuance of $12.7 million relating escrow of $113 million, defeasance to NYC TFA transaction. 2017 bond refunding Program revenue was greater in fiscal years 2019 and 2018 due to increased collections, as previously discussed. collections, as previously in fiscal years 2019 and 2018 due to increased was greater revenue Program REVENUES: The following summarizes the changes in the DSF balances for the years ended June 30, 2019, 2018 and 2017: the changes in the DSF balances for the The following summarizes As of and for the Years Ended June 30, 2019 and 2018 (unaudited) (continued) (unaudited) 2019 and 2018 June 30, Ended Years As of the and for STATEMENTS FUNDS FINANCIAL ANALYSIS—GOVERNMENTAL AND OVERALL HIGHLIGHTS FINANCIAL (continued) as noted) except in thousands, (amounts Analysis and Discussion Management’s OTHER FINANCING SOURCES (USES) NET CHANGE IN FUND BALANCES FUND BALANCE—Beginning of year FUND BALANCE—End of year EXPENDITURES TOTAL REVENUES TOTAL FUND BALANCE—End of year OTHER FINANCING SOURCES (USES) FUND BALANCE—Beginning of year EXPENDITURES: Hudson Yards Infrastructure Corporation (A Component Unit of The City of New York) 11

8,825 8,824 Change 176,902 176,902 2018 vs 2017 $ (3) $ 185,723 $ 185,723 $ 176,898

92 (8,824) (6,294) (6,294) (8,825) Change 2019 vs 2018 $ $ (15,026) $ (15,026) $ (6,201) — — 39 2017 33,812 33,812 33,773 33,773 $ $ $ $ 33,812 36 2018 8,824 8,825 210,675 210,675 $ $ 219,535 $ 219,535 $ 210,710 — — 128 2019 204,381 204,381 $ $ 204,509 $ 204,509 $ 204,509 Unrestricted cash equivalents Unrestricted Unassigned Unavailable arbitrage rebate refund Unavailable arbitrage rebate Other receivables The GF assets increased in fiscal years 2019 and 2018 due to the large transfer of Second Indenture surplus funds from the DSF to the GF. the DSF to the GF. funds from surplus transfer of Second Indenture due to the large in fiscal years 2019 and 2018 The GF assets increased refund that was measurable but rebate comprised of an arbitrage in fiscal year 2018 were resources inflows of and deferred Other receivables year 2018. in fiscal not available to finance expenditures ASSETS: The CPF revenues are comprised of interest earnings. interest comprised of are The CPF revenues of construction. year based on the timing and progress fluctuate each expenditures Project bond collected on unspent reflect the transfer of interest mainly during fiscal years 2019, 2018 and 2017 (uses) Other financing sources with the terms of the applicable Indentures. pay debt service, in accordance to be used to the CPF to the DSF, from proceeds as of June 30, 2019, 2018 and 2017: the GF assets, liabilities, and fund balances The following summarizes As of and for the Years Ended June 30, 2019 and 2018 (unaudited) (continued) (unaudited) 2019 and 2018 June 30, Ended Years As of the and for STATEMENTS FUNDS FINANCIAL ANALYSIS—GOVERNMENTAL AND OVERALL HIGHLIGHTS FINANCIAL (continued) as noted) except in thousands, (amounts Analysis and Discussion Management’s TOTAL FUND BALANCES TOTAL BALANCES LIABILITIES AND FUND TOTAL TOTAL ASSETS TOTAL FUND BALANCES: DEFERRED INFLOWS OF RESOURCES: LIABILITIES: Hudson Yards Infrastructure Corporation (A Component Unit of The City of New York) 12

Change (199) (832) (88,863) (88,863) (104,029) 2018 vs 2017 $ (90,070) $ (90,070) $ (375) $ 14,158

— — 15 91,167 91,167 46,027 46,027 45,140 Change 2019 vs 2018 $ $ $ $ 91,152 375 214 2017 15,946 206,953 206,953 104,029 $ 223,274 $ 223,274 $ $ 119,031 — — 15 2018 15,114 118,090 118,090 $ 133,204 $ 133,204 $ $ 133,189 — — 30 2019 60,254 164,117 164,117 $ 224,371 $ $ 224,371 $ 224,341 Restricted Restricted cash equivalents and investments Restricted cash equivalents Prepaid PILOT Prepaid Transferable development rights Transferable fund capital projects Due from TOTAL FUND BALANCES TOTAL OF DEFERRED INFLOWS TOTAL RESOURCES AND FUND BALANCES TOTAL ASSETS TOTAL FUND BALANCES: ASSETS: The following summarizes the DSF assets, liabilities, and fund balances as of June 30, 2019, 2018 and 2017: the DSF assets, liabilities, and fund balances The following summarizes As of and for the Years Ended June 30, 2019 and 2018 (unaudited) (continued) (unaudited) 2019 and 2018 June 30, Ended Years As of the and for STATEMENTS FUNDS FINANCIAL ANALYSIS—GOVERNMENTAL AND OVERALL HIGHLIGHTS FINANCIAL (continued) as noted) except in thousands, (amounts Analysis and Discussion Management’s The change in total assets between fiscal years is generally based on the difference between the collections of revenue and amounts revenue and amounts collections of between the years is generally based on the difference The change in total assets between fiscal fiscal year 2019 when compared in DSF assets in increase The large debt service during the fiscal year. for the following year’s retained assets in fiscal year 2018 in DSF decrease service funds in fiscal year 2019. The large retention of debt to fiscal year 2018 was due to the in transferable development rights. remaining interest selling its to fiscal year 2017 was due to HYIC when compared inflows reported as deferred amount is to the next fiscal year; the prepaid PILOT payments for assessments attributable HYIC received agreements PILOT under on properties assessments increased to primarily due was in fiscal year 2019 the increase and resources of discussed. that have completed construction, as previously LIABILITIES DEFERRED INFLOWS OF RESOURCES: Hudson Yards Infrastructure Corporation (A Component Unit of The City of New York) 13

136 (63) Change (199) (39,891) (39,891) 2018 vs 2017 $ (39,954) $ (39,954) $ (39,954) $

15 (4,847) Change (43,901) (43,901) 2019 vs 2018 $ (48,748) $ (48,748) $ (48,748) $ (4,862)

214 2017 7,825 128,014 128,014 $ 135,839 $ 135,839 $ 135,839 $ 7,611 15 2018 7,762 95,885 95,885 95,885 88,123 88,123 $ $ $ $ 7,747 * * * * * 30 2019 2,915 47,137 47,137 47,137 44,222 44,222 $ $ $ $ 2,885 Restricted Restricted cash equivalents and investments Restricted cash equivalents Project costs payable Project Due to debt service fund CPF assets on hand at June 30, 2019, 2018, and 2017 represented unspent bond proceeds. The decrease in fund balances each year in fund balances each year The decrease unspent bond proceeds. and 2017 represented CPF assets on hand at June 30, 2019, 2018, made during that year. expenditures Project reflected finances. Questions concerning any of the information overview of HYIC’s a general report is designed to provide This financial Infrastructure Yards Hudson Relations, Investor to informationfinancial additional for directed be should requests or report this in NY 10007. New York, Street, Corporation, 255 Greenwich TOTAL FUND BALANCES TOTAL BALANCES LIABILITIES AND FUND TOTAL TOTAL LIABILITIES TOTAL FUND BALANCES: ASSETS: The following summarizes the CPF assets, liabilities, and fund balances as of June 30, 2019, 2018 and 2017: the CPF assets, liabilities, and fund balances The following summarizes As of and for the Years Ended June 30, 2019 and 2018 (unaudited) (continued) (unaudited) 2019 and 2018 June 30, Ended Years As of the and for STATEMENTS FUNDS FINANCIAL ANALYSIS—GOVERNMENTAL AND OVERALL HIGHLIGHTS FINANCIAL (continued) as noted) except in thousands, (amounts Analysis and Discussion Management’s TOTAL ASSETS TOTAL LIABILITIES: Hudson Yards Infrastructure Corporation (A Component Unit of The City of New York) 14 — 36 257 218 2018 7,490 8,825 5,797 15,114 49,961 28,336 21,696 36,810 59,787 19,921 448,609 223,265 3,015,580 3,101,660 (2,749,648) $ (2,689,861) $ 190,583 — 128 125 623 206 2019 2,137 1,079 60,254 49,961 18,011 20,921 81,175 26,211 475,987 157,351 114,002 2,999,495 3,070,480 (2,701,879) $ (2,675,668) $ 203,349 Portion due after one year Total liabilities Total position (deficit) net Total Total deferred inflows of resources of inflows deferred Total Total assets Total Prepaid PILOT Prepaid costs bond refunding Unamortized deferred Accrued expenses Development Corporation Payable to Hudson Yards Project costs payable Project Payable to The City of New York payable Accrued bond interest Contingent liabilities Long-term debt: Restricted for capital projects (deficit) Unrestricted Restricted cash equivalents receivable Interest Unrestricted cash equivalents Unrestricted Unrestricted investments Unrestricted Restricted investments Receivable—other DEFERRED INFLOWS OF RESOURCES: LIABILITIES: NET POSITION (DEFICIT): See notes to financial statements. ASSETS: As of June 30, 2019 and 2018 (amounts in thousands) (amounts in 2019 and 2018 As ofJune 30, (Deficit) ofStatements Net Position Hudson Yards Infrastructure Corporation (A Component Unit of The City of New York) 15 — 704 2018 2,213 2,013 4,005 86,603 (4,589) 28,602 84,332 17,782 31,710 17,835 230,763 144,160 115,217 (2,776,464) $ (2,689,861) $ 75,099 — 10 981 2019 1,186 14,193 12,647 20,538 11,400 70,532 31,008 250,742 264,935 100,000 115,390 113,347 (2,689,861) $ (2,675,668) $ 38,638 Total revenues Total Total expenses Total Project—subway extension Project—subway General and administrative Project—land acquisition and public amenities Project—land Payment to The City of New York Project—transfer to Hudson Yards Development Corporation to Hudson Yards Project—transfer Loss on defeasance Bond interest Bond interest Tax equivalency payment revenue Tax District improvement bonus revenue bonus District improvement PILOMRT revenue PILOT revenue Other revenue Investment income NET POSITION (DEFICIT)—End of year NET POSITION (DEFICIT)—Beginning of year EXPENSES: CHANGE IN NET POSITION (DEFICIT) See notes to financial statements. REVENUES: For the years ended June 30, 2019 and 2018 (amounts in thousands) and 2018 2019 June 30, ended the years For Statements of Activities Statements Hudson Yards Infrastructure Corporation (A Component Unit of The City of New York) 16

30 30 206 623 128 125 Total Total Funds 1,079 3,043 44,222 60,254 60,254 114,002 164,117 157,351 204,381 412,720 Governmental $ 476,017 $ 203,349 $ 476,017 $ 2,137

— — — — — — — — 13 30 623 125 Fund 2,137 4,489 2,915 Capital 42,635 44,222 44,222 Projects Projects $ 47,137 $ $ 47,137 $

— — — — — — — — — — 30 112 Fund Debt Service 71,367 60,254 60,254 164,117 152,862 164,117 $ 224,371 $ $ 224,371 $

— — — — — — — — — — — 81 128 128 Fund 1,079 General 204,381 204,381 $ 204,509 $ 203,349 $ 204,509 $ Capital projects Debt service Total fund balances fund Total Total deferred inflows of resources of inflows deferred Total Total liabilities Total Total assets Total Due from capital projects fund capital projects Due from Interest receivable Interest Payable to Hudson Yards Development Corporation Payable to Hudson Yards Restricted investments Payable to The City of New York Unassigned Unrestricted investments Unrestricted Due to debt service fund Restricted for: Prepaid PILOT Prepaid Restricted cash equivalents costs payable Project Accounts payable Unrestricted cash equivalents Unrestricted Total liabilities, deferred inflows of deferred liabilities, Total and fund balances resources FUND BALANCES: DEFERRED INFLOWS OF RESOURCES: See notes to financial statements. LIABILITIES: ASSETS: As of June 30, 2019 (amounts in thousands) 2019 (amounts As ofJune 30, Governmental Funds Balance Sheet Balance Funds Governmental Hudson Yards Infrastructure Corporation (A Component Unit of The City of New York) 17

15 15 36 218 257 Total Total Funds 8,824 5,797 8,825 7,798 19,921 88,123 15,114 23,938 223,265 118,090 416,888 210,675 Governmental $ 190,583 $ 448,624 $ 448,624 $ 7,490

— — — — — — — — — 12 15 257 Fund 5,154 7,762 Capital 90,719 88,123 88,123 Projects Projects $ — $ 95,885 $ 95,885 $ 7,490

— — — — — — — — — — 15 643 Fund Debt Service 15,114 15,114 132,546 118,090 118,090 $ — $ 133,204 $ 133,204 $ —

— — — — — — — — 36 36 206 Fund 8,824 8,824 8,825 19,921 General 210,675 210,675 $ 190,583 $ 219,535 $ 219,535 $ — Capital projects Debt service Total fund balances fund Total Total deferred inflows of resources of inflows deferred Total Total assets Total Total liabilities Total Other receivables Due from capital projects fund capital projects Due from Interest receivable Interest Restricted investments Payable to The City of New York Unassigned Prepaid PILOT Prepaid Unrestricted investments Unrestricted Due to debt service fund Restricted for: Unavailable arbitrage rebate fund Unavailable arbitrage rebate Restricted cash equivalents Unrestricted cash equivalents Unrestricted Project costs payable Project Accounts payable Total liabilities, deferred inflows of deferred liabilities, Total and fund balances resources FUND BALANCES: DEFERRED INFLOWS OF RESOURCES: ASSETS: As of June 30, 2018 (amounts in thousands) 2018 (amounts As ofJune 30, Governmental Funds Balance Sheet Balance Funds Governmental See notes to financial statements. LIABILITIES: Hudson Yards Infrastructure Corporation (A Component Unit of The City of New York) 18 2018 8,824 (28,336) (21,696) (49,961) (291,710) (2,723,870) $ (2,689,861) $ 416,888 — 2019 (18,011) (20,921) (49,961) (275,625) (2,723,870) $ (2,675,668) $ 412,720 Bonds payable Contingent liabilities Accrued bond interest payable Accrued bond interest Bond premiums are reported as other financing sources in the governmental funds financial statements in the governmental funds financial statements sources as other financing reported are Bond premiums reported as a are bond premiums in the statements of net position(deficit), However, when received. and amortized over the life of the bonds. component of bonds payable Costs of bond refundings are reported as expenditures in the governmental funds financial statements. the governmental funds financial statements. in as expenditures reported are Costs of bond refundings deferred or loss are related gain net position (deficit), those costs and the in the statements of However, of the old debt or the life of the new debt. life and amortized over the shorter of the remaining Unavailable arbitrage rebate refund earned but not received within two months after year-end is two months after year-end within earned but not received refund Unavailable arbitrage rebate statements because it is in the governmental funds financial resources inflow of as a deferred reported (deficit). in the statements of net position as revenue it is recognized available; however, not currently resources financial available currently from period not due and payable in the current Some liabilities are the in reported are but statements, financial funds governmental the in reported not therefore are and are: statements of net position (deficit). Those liabilities NET POSITION (DEFICIT)—GOVERNMENTAL ACTIVITIES NET POSITION (DEFICIT)—GOVERNMENTAL See notes to financial statements. Amounts reported for governmental activities in the statements for governmental Amounts reported because: different are of net position (deficit) TOTAL FUND BALANCES—GOVERNMENTAL FUNDS FUND BALANCES—GOVERNMENTAL TOTAL As of June 30, 2019 and 2018 (amounts in thousands) (amounts in 2019 and 2018 As ofJune 30, Reconciliations of the Governmental Funds Balance Sheets Balance Sheets ofReconciliations Funds Governmental the (Deficit) ofStatements to the Net Position Hudson Yards Infrastructure Corporation (A Component Unit of The City of New York) 19

— — 981 Total Total Funds 8,834 1,186 31,008 22,972 70,532 20,538 11,400 (4,168) 100,000 132,250 113,347 273,759 277,927 416,888 Governmental $ 38,638 $ 412,720

— — — — — — — Fund 1,186 2,030 2,030 (1,235) (1,235) Capital 22,972 20,538 44,696 88,123 Projects Projects (43,901) $ — $ 44,222

— — — — — — Fund Debt 4,388 Service 30,804 69,496 46,027 (78,396) (78,396) 132,250 113,347 132,250 118,090 256,673 $ 38,638 $ 164,117

— — — — — 204 981 Fund 8,834 1,036 4,982 79,631 79,631 15,056 (6,294) General 100,000 100,981 210,675 $ — $ 204,381 Total revenues Total Total expenditures Total Total other financing sources (uses) financing sources other Total NET CHANGE IN FUND BALANCES General and administrative Payment to The City of New York Investment income Bond interest Other revenue Project—transfers to Hudson Yards Development Corporation Development to Hudson Yards Project—transfers PILOT revenue Project—land acquisition and public amenities Project—land PILOMRT revenue Project—subway extension Project—subway in (out) Transfers District improvement bonus revenue bonus District improvement equivalency payment revenue Tax EXPENDITURES: OTHER FINANCING SOURCES (USES): FUND BALANCES—End of year FUND BALANCES—Beginning of year See notes to financial statements. REVENUES: For the year ended June 30, 2019 (amounts in thousands) (amounts in 2019 30, June ended the year For Governmental Funds Statement of Revenues, Expenditures Expenditures of Statement Revenues, Funds Governmental Balances in Fund and Changes Hudson Yards Infrastructure Corporation (A Component Unit of The City of New York) 20

— — 704 Total Total Funds 9,011 2,013 9,359 4,005 30,276 31,710 17,782 28,602 84,332 48,148 102,837 221,939 173,791 368,740 Governmental $ 75,099 $ 416,888

— — — — — — — 796 796 Fund (713) (713) 2,013 9,359 Capital 28,602 39,974 Projects Projects (39,891) 128,014 $ — $ 88,123

— — — — — 986 Fund Debt Service 30,276 31,710 17,782 84,332 (88,863)

102,837 133,113 206,953 209,909 (165,659) (165,659) $ 75,099 $ 118,090

— — — — — — — — 704 704 Fund 9,011 2,223 33,773 11,234 General 166,372 166,372 176,902 $ — $ 210,675 Total revenues Total Total expenditures Total Total other financing sources (uses) financing sources other Total NET CHANGE IN FUND BALANCES General and administrative Defeasance escrow Investment income Bond interest Other revenue Project—transfers to Hudson Yards Development Corporation Development to Hudson Yards Project—transfers PILOT revenue Project—land acquisition and public amenities Project—land PILOMRT revenue Project—subway extension Project—subway in (out) Transfers District improvement bonus revenue bonus District improvement equivalency payment revenue Tax FUND BALANCES—Beginning of year EXPENDITURES: OTHER FINANCING SOURCES (USES): FUND BALANCES—End of year REVENUES: For the year ended June 30, 2018 (amounts in thousands) (amounts in 2018 30, June ended the year For Governmental Funds Statement of Revenues, Expenditures Expenditures of Statement Revenues, Funds Governmental Balances in Fund and Changes See notes to financial statements. Hudson Yards Infrastructure Corporation (A Component Unit of The City of New York) 21 775 2018 8,824 16,085 28,063 13,948 (29,240) $ 86,603 $ 48,148 — — 775 2019 16,085 (8,824) 10,325 $ 14,193 $ (4,168) Governmental funds financial statements report bond premiums as other financing source upon source as other financing report bond premiums financial statements Governmental funds of interest as an offset recognized are premiums of activities, on the statements However, issuance. the bonds. expense over the life of funds in the governmental as expenditures reported bonds prior to maturity are Payments to defease between of net position (deficit), only the difference in the statements However, financial statements. as reported defease the bonds are defeased bonds and the amount paid to the carrying value of the and expenses. period revenues However, expenditures. as refundings bond of costs report statements financial funds governmental The amortized over the shorter of the life of are refundings in the statements of activities, the costs of bond the bonds. refund or the life of the bonds issued to the bonds refunded Other revenue not available in the current period is deferred in the governmental funds financial period is deferred not available in the current Other revenue in the statements of activities. statements and included in revenue activities on the accrual basis. However, on the statements of reported Contingent liabilities are financial statements when they are in the governmental funds reported are contingent expenditures or paid. incurred Interest expense is reported in the statements of activities on the accrual basis. However, interest is interest the accrual basis. However, in the statements of activities on expense is reported Interest in governmental funds financial statements when the payment is due. as an expenditure reported Amount reported in the statements of activities are different because: different of activities are in the statements Amount reported CHANGE IN NET POSITION (DEFICIT)—GOVERNMENTAL ACTIVITIES CHANGE IN NET POSITION (DEFICIT)—GOVERNMENTAL See notes to financial statements. NET CHANGE IN FUND BALANCES—TOTAL GOVERNMENTAL FUNDS GOVERNMENTAL BALANCES—TOTAL NET CHANGE IN FUND For the years ended June 30, 2019 and 2018 (amounts in thousands) and 2018 2019 June 30, ended the years For Reconciliations of the Governmental Funds Statements of Revenues, of Statements Revenues, ofReconciliations Funds Governmental the of Activities Statements to the Balances Fund Changes in and Expenditures Hudson Yards Infrastructure Corporation (A Component Unit of The City of New York) 22 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ACCOUNTING OF SIGNIFICANT SUMMARY 2. Focus and Basis of Accounting Measurement are The government-wide of activities, of HYIC, which include the statements of net position (deficit) and the statements financial statements position net of statements The standards. GASB with accordance in whole, a as entity informationdisplay to reporting the about presented focus and the accrual basis of accounting. measurement resources using the economic prepared (deficit) and the statements of activities are of the timing of cash flows. regardless when incurred, recorded when earned and expenses are recorded Revenues are focus and the modified measurement resources financial using the current governmental presented funds financial statements are HYIC’s and both measurable it becomes is when accrual, which to susceptible becomes when it is recognized accounting. Revenue basis of accrual within received be to expected if available considered generally is Revenue period. fiscal current the in expenditures finance to available on bonds except for principal and interest liability is incurred, when the related recognized are sixty-days after period end. Expenditures when due. recognized which are liability, payable and estimated arbitrage rebate its activities: a General Fund (“GF”), a Debt Service Fund (“DSF”) and a Capital Projects governmental funds for reporting HYIC uses three on and principal of long- used to pay interest and disbursement of resources Fund (“CPF”). The DSF is used to account for the receipt The GF is used to account for expenditures. term and for project debt. The CPF is used to account for the bond issuances and proceeds and generally those used or held for use for administrative expenditures not accounted for in the DSF or the CPF, resources all financial between HYIC and US Bank dated Indenture with the Trust HYIC accounts for its activities in accordance expenditures. arbitrage rebate and Third May 1, 2017 (the “Second Indenture”) dated Indenture Second Trust December 1, 2006, as amended (the “First Indenture”), the (“Indentures”). collectively, Indenture”), dated February 1, 2019 (the “Third Indenture Supplemental Trust 1. ORGANIZATION 1. “City”) (the York New of City The by established corporation development local a is (“HYIC”) Corporation Infrastructure Yards Hudson infrastructure certain of financing the is purpose HYIC’s York. New of State the of Law Corporation Not-for-Profit the of 14 Article under but does not engage in development directly, HYIC Side of Manhattan (the “Project”). on the West area in the Hudson Yards improvements The entities. public existing by out carried and (“HYDC”) Corporation Development Yards Hudson by spearheaded development finances on the Avenue Twelfth the north, on Street 43rd east, West the on Avenues and Eighth by Seventh bounded generally an area is in Project and construction of an extension consists of: (1) design The Project Area”). the south (the “Project on 29th and 30th Streets west and West (2) acquisition (the “Subway Extension”), 34th Street and West to Eleventh Avenue and 41st Street Avenue Seventh of the No. 7 Subway from and between Tenth rights over its rail yards of certain transferable development Authority (“MTA”) Transportation the Metropolitan from of a system of parks, public (3) construction or “ERY”), (“Eastern Rail Yards” Streets 33rd and West 30th West and between Eleventh Avenues began The subway extension acquisition for the Project. (“Public Amenities”) and (4) property Area in the Project open spaces, and streets was completed and opened to the public in of a portion of Hudson Park and Boulevard service in September 2015 and the construction August 2015. and in lieu of taxes including payments revenues, of Project and the collection finance the to borrowing HYIC fulfills its purpose through and pay principal and the City to support its operations from appropriations private developers and bonuses from district improvement of the City. officials elected by its five members, all of whom are of Directors on its outstanding debt. HYIC is governed by the Board interest independent the actions; certain taking to condition a as director independent an of vote the requires Incorporation of Certificate HYIC’s by administered are affairs its employees; any have not does HYIC actions. such any to prior Mayor the by appointed be would director for which HYIC pays a management fee and overhead based on its unit of the City, employees of the City and of another component of personnel and overhead costs. allocated share financial statements is included in the City’s HYIC is an instrumentality of the City and, accordingly, the City, Although legally separate from (“GASB”) standards. Board the Governmental with Standards Accounting as a blended component unit, in accordance As of and for the years ended June 30, 2019 and 2018 2019 As ofJune 30, ended the years and for as noted) except in thousands, (amounts Statements to Financial Notes Hudson Yards Infrastructure Corporation (A Component Unit of The City of New York) 23 Interest Support Payments (“ISP”) are made by the City under the terms Restated Support and Development Support Payments (“ISP”) are of the Amended and Interest the City to pay to that obligates (together the “Agreement”) Support Agreement Hudson Yards and the Additional Borrowing Agreement debt is outstanding, in an amount equal ISP on up to $3.35 billion of HYIC debt, for so long as such HYIC, subject to annual appropriation, due on such debt; of interest on debt and the amount between the amount of funds available to HYIC to pay interest to the difference City Industrial the New York with estate taxes (“PILOT”) which have been assigned to HYIC under agreements Payments in lieu of real between developers and with agreements to be made in accordance and that are and the MTA, Development Agency (“IDA”), the City, IDA and others (“PILOT Agreements”); made by the City under the terms that obligates the City to pay to HYIC, subject Equivalency Payments (“TEP”) are of the Agreement Tax rehabilitation taxes collected by the City on new development (including substantial property the amount of real to annual appropriation, Area; of existing buildings) in the Project (2) (3) Area; in the Project additional density create in exchange for the right to paid by private developers Bonuses (“DIB”) Improvement (4) District 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) POLICIES ACCOUNTING OF SIGNIFICANT SUMMARY 2. Fund Balance GASB with 4) assigned, or 5) unassigned in accordance restricted, 3) committed, either: 1) nonspendable, 2) classified as Fund balances are standards. constrained for debt service or be spent because it is not in spendable formFund balance that cannot is defined as nonspendable. Resources governmental and the (deficit) of net position restricted on the statements classified as are Indentures with HYIC’s in accordance redemption funds balance sheets. adopted are resolutions when and If authority. decision-making of level highest HYIC’s constitutes (“Board”) HYIC of Directors of Board The and as committed for such purpose unless, reported and accounted for balances for a specific purpose are that constrain fund by the Board altering the commitment is adopted by the Board. until, a subsequent resolution of HYIC duly authorized under of any officer use for a specific purpose based on the direction Fund balances, if and when constrained for as assigned for such purpose. This assignment for and reported accounted the movement of such funds, are to direct its bond Indentures is taken which or by the Board, action by the same or another duly authorized officer, unless and until a subsequent authorized will remain, or changes the assignment. removes resources restricted policy to use purpose, it is HYIC’s available for use for a specific are resources and unrestricted When both restricted a specific for use for available are resources or unassigned needed. When committed, assigned, as they are resources first then unrestricted needed. as they are resources and then unassigned resources, then assigned first, policy to use committed resources purpose, it is HYIC’s restricted on the statements of classified as are Indentures with HYIC’s in accordance constrained for debt service or redemption Resources net position (deficit) and the governmental funds balance sheets. Cash Equivalents date. the purchase and investments maturing within 90 days from Cash equivalents consist of money market funds Capital Assets the parks to Assets related of its borrowing. with the proceeds constructed or acquired assets that are HYIC is not the owner of the Project City Transit owned by the City and leased to the New York extension are to the subway Assets related of the City. property are and boulevard financial statements. Therefore, Authority on its City Transit as assets of the New York treated Authority pursuant to a long-term and are lease, in progress. assets or construction work no infrastructure HYIC reports a minimum useful life of five years of assets having policy is to capitalize the purchase HYIC’s For fixed assets used in the operations of HYIC, than $35 thousand. No such assets have been acquired. and having a cost of more Revenues include: HYIC revenues (1) As of and for the years ended June 30, 2019 and 2018 (continued) and 2018 (continued) 2019 As ofJune 30, ended the years and for as noted) except in thousands, (amounts Statements to Financial Notes Hudson Yards Infrastructure Corporation (A Component Unit of The City of New York) 24 , (“GASB 84”). The objective of GASB 84 is to improve guidance guidance In January 2017, GASB issued Statement No. 84, Fiduciary Activities, (“GASB 84”). The objective of GASB 84 is to improve be should activities those how and purposes reporting financial and accounting for activities fiduciary of identification the regarding for fiscal years beginning after December 15, 2018. HYIC has not completed effective of GASB 84 are The requirements reported. financial statements, as it does not enter into of evaluating GASB 84, but does not expect it to have an impact on HYIC’s the process fiduciary activities. Payments in lieu of the mortgage recording tax (“PILOMRT”) required to be made by private developers entering into PILOT Agreements; entering into PILOT Agreements; to be made by private developers tax (“PILOMRT”) required mortgage recording Payments in lieu of the and • As of and for the years ended June 30, 2019 and 2018 (continued) and 2018 (continued) 2019 As ofJune 30, ended the years and for as noted) except in thousands, (amounts Statements to Financial Notes (5) service. is generally used for debt earned unspent bond proceeds on (6) Interest Arbitrage Rebate to to be rebated HYIC will fund amounts required on HYIC tax exempt debt, income tax of interest Federal maintain the exemption from To the Government Federal the Internalthe of 148 Section to pursuant requires Code The “Code”). (the amended as 1986, of Code Revenue earned of the excess of the amount the amount that would have been earned on all obligations over if States Treasury payment to the United with any earnings a rate equal to the yield on the issue, together invested at such excess. attributable to of the issue were proceeds the gross of such bonds, including earnings,pledged other funds or accounts funded with proceeds or Construction funds, debt service funds or any the end of the fifth Payment is to be made after subject to this requirement. on such bonds are to or expected to be used to pay interest initial an made HYIC 2012, February In bonds. the of retirement after days 60 within or thereafter, year bond fifth every after and year bond 2007A bonds as of the final computation date of its series 2007A bonds. However, to its series installment payment of $8.8 million relating back to HYIC in fiscal year 2019. liability was negative and the $8.8 million payment was refunded the arbitrage rebate and Issuance Costs Bond Premium method in the government- debt using the interest over the life of the related capitalized and amortized and discounts are Bond premiums and discounts, as well as bond issuance premiums the recognize wide financial statements. The governmental funds financial statements bonds the of amount face the to reductions or additions as presented are discounts and premiums Bond period. current the during costs, in the incurred in the period as an expense/expenditure recognized insurance, are bond payable. Bond issuance costs, except for prepaid government-widerespectively. and governmental funds financial statements, Bond Refunding Costs Deferred as reported of outstanding bonds and are on a refunding the accounting gain or loss incurred costs represent bond refunding Deferred refunding bond in the government-wide financial statements. The deferred resources inflows of or deferred resources outflows of deferred the old debt or the life of the new debt. In the debt service fund, costs of the life of amortized over the shorter of the remaining costs are when incurred. as expenditures reported are bond issuance/refunding Use of Estimates requires principles generally accepted in the United States of America with accounting of financial statements in accordance The preparation of assets and liabilities as of the date of the to make estimates and assumptions in determining amounts management the reported HYIC’s from differ results could reporting period. Actual during the revenues and expenditures reported amounts of financial statements and the those estimates. Recent Accounting Pronouncements The City. implemented by the in the same fiscal year as they are HYIC implements new GASB standards As a component unit of the City, years. future in HYIC impact may which standards and year current in the implementation requiring the standards of discussions are following 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) POLICIES ACCOUNTING OF SIGNIFICANT SUMMARY 2. (A Component Unit of The City of New York)

Hudson Yards Infrastructure Corporation 25 , (“GASB 87”). The objective of GASB 87 is to improve accounting and financial accounting and financial of GASB 87 is to improve Statement No. 87, Leases, (“GASB 87”). The objective In June 2017, GASB issued requiring of governments’ the usefulness for leases by governments. statements by financial This statement increases reporting recognized as as operating leases and classified were assets and liabilities for leases that previously of certain lease recognition model for establishes a single contract. It provisions of the based on the payment resources outflows of or resources inflows of asset. Under this of the right to use an underlying financings are on the foundational principle that leases lease accounting based to lease asset, and a lessor is required lease liability and an intangible right-to-use a to recognize required statement, a lessee is relevance and consistency of information enhancing the thereby resources, inflow of and a deferred a lease receivable recognize years beginning after December 15, 2019. for fiscal effective are of GASB 87 about governments’ leasing activities. The requirements statements, financial expect it to have an impact on HYIC’s of evaluating GASB 87, but does not the process HYIC has not completed as it does not enter into lease agreements. and financial , (“GASB 90”). GASB 90 clarifies the accounting 90, Majority Equity Interests In August 2018, GASB issued Statement No. legally separate that remains in an organization majority equity interest for a state and local government’s requirements reporting beginning after December 15, 2018. HYIC has not for fiscal years effective of GASB 90 are after acquisition. The requirements statements, as it has not financial does not expect it to have an impact on HYIC’s of evaluating GASB 90, but completed the process made such acquisitions. , Placements Direct and Borrowings Related to Debt, including Direct 2018, GASB issued Statement No. 88, Certain Disclosures In March consistency in the information that is disclosed in notes to government improve (“GASB 88”). The objective of GASB 88 is to financial requirements and establishes additional note disclosure purpose of note disclosure to debt by defining debt for the statements related of GASB 88 are placements. The requirements and direct of governments, borrowing to debt obligations including direct related HYIC to disclose in Note 6 its assets pledged required The adoption of GASB 88 for fiscal years beginning after June 15, 2018. effective as collateral for debt. the End of a Construction Period, (“GASB before Cost Incurred Accounting for Interest In June 2018, GASB issued Statement No. 89, and comparability of information about capital assets and cost of relevance to enhance the 89”). The objectives of GASB 89 are the end before costs incurred interest costs by requiring for certain interest period and to simplify accounting for a reporting borrowing in governmental fund and government-wide as an expense/expenditure financial statements. of a construction period to be recognized HYIC adopted GASB 89 in the 15, 2019. However, for fiscal years beginning after December effective of GASB 89 are The requirements financial statements as it has no capital assets. The adoption of GASB 89 did not have an impact on HYIC’s fiscal year. current state and local government’s Conduit Debt Obligations, (“GASB 91”). GASB 91 provides In May 2019, GASB issued Statement No. 91, for fiscal effective of GASB 91 are requirements debt obligations by issuers. The reporting method for conduit with a single financial adoption of GASB 91 did not The fiscal year. HYIC adopted GASB 91 in the current years beginning after December 15, 2020. However, financial statements, as it does not issue conduit debt. have an impact on HYIC’s • • • • • 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) POLICIES ACCOUNTING OF SIGNIFICANT SUMMARY 2. As of and for the years ended June 30, 2019 and 2018 (continued) and 2018 (continued) 2019 As ofJune 30, ended the years and for as noted) except in thousands, (amounts Statements to Financial Notes (A Component Unit of The City of New York)

Hudson Yards Infrastructure Corporation 26 — — 643 2018 2018 5,154 5,797 5,797 19,921 90,719 95,873 190,583 210,504 132,546 133,189 439,566 (196,380) $ 243,186 $ 190,583 $ 196,380 $ 190,583 2019 2019 7,121 4,489 1,079 42,635 11,248 18,274 47,124 194,707 203,349 204,428 224,229 203,349 157,351 157,351 196,228 475,781 (360,700) $ 115,081 $ $ 360,700 $ Total restricted Total Total Investments Total Total Restricted for Debt Service Total Total Unrestricted Total Restricted for Capital Projects Total Total unrestricted Total Total Investments including cash equivalents Total as cash equivalents (see Note 3) Less amounts reported U.S. Treasury Bill (maturing within one year) Bill (maturing within one U.S. Treasury Money Market Funds Cash Equivalents U.S. Treasury Note (maturing within one year) Note (maturing within one U.S. Treasury Cash Equivalents Money Market Funds Bill (maturing within one year) U.S. Treasury Note (maturing within one year) U.S. Treasury Money Market Funds Notes (maturing within one year) U.S. Treasury As of and for the years ended June 30, 2019 and 2018 (continued) and 2018 (continued) 2019 As ofJune 30, ended the years and for as noted) except in thousands, (amounts Statements to Financial Notes UNRESTRICTED: HYIC’s investments consisted of the following at June 30, 2019 and 2018: investments HYIC’s 4. INVESTMENTS 4. UNRESTRICTED: 3. CASH AND CASH EQUIVALENTS AND CASH CASH 3. Market Funds and comprised of Money on hand. Cash equivalents were 2018, HYIC did not have any cash deposits As of June 30, 2019 and maturing within 90 days. Obligations US Treasury and 2018: consisted of the following at June 30, 2019 cash and cash equivalents HYIC’s RESTRICTED: Total Cash Equivalents Cash Total RESTRICTED FOR DEBT SERVICE: PROJECTS: RESTRICTED FOR CAPITAL Hudson Yards Infrastructure Corporation (A Component Unit of The City of New York) 27 Money Market Funds are valued based on various market and industry inputs (Level 2 inputs). Money Market Funds are based on various market and industry inputs (Level 2 valued are and $243 million, respectively, securities of $453 million U.S. Treasury inputs). • •  Custodial Credit Risk Custodial Credit the value of its investments of the custodian, HYIC may not be able to recover failure risk is the risk that, in the event of the Custodial credit agent in HYIC’s held by HYIC’s and are registered All investments are an outside party. in the possession of or collateral securities that are name. Risk Credit rated which are the United States of America, obligations of, or guaranteed by, and 2018 are All investments held by HYIC at June 30, 2019 S&P rated by Aaa, and Fitch AAA; and money market funds invested in eligible government obligations, which are by S&P AA+, Moody’s Aaa-mf. AAAm and Moody’s Rate Risk Interest rates because such risk of fair value declines due to changes in market interest subject to minimal short-term investments are HYIC’s limiting the exposure to be held until maturity thereby expected with longer termsinvestments have very short maturities. Investments are rates. rising interest from Risk Concentration of Credit HYIC’s investments in a single issuer (5% or more). to the magnitude of HYIC’s risk is the risk of loss attributed Concentration of credit As Indentures. the in defined as investments eligible of issuer one any in invest may HYIC amount the on limits no places policy investment in eligible government investments are obligations or in money market funds invested in eligible of June 30, 2019 and 2018, 100% of HYIC’s government obligations. 4. INVESTMENTS (continued) INVESTMENTS 4. expenses. Each account or capital project for operations, debt service not immediately required which are management invests funds HYIC’s enumerated specifically or categories of investments that are and may be invested in securities to the Indentures of HYIC is held pursuant prices in an active at fair value using market reported Investments are as permitted the Indentures. investments for such account pursuant to statement date. market as of the financial Hierarchy Fair Value The principles. accepted accounting generally established by value hierarchy the fair within value measurements its fair categorizes HYIC for quoted prices in an active market Level 1 inputs are fair value of the assets. inputs used to measure is based on the valuation hierarchy inputs. significant unobservable and Level 3 inputs are significant other observable inputs; 2 inputs are identical assets; Level as of June 30, 2019 and 2018: fair value measurements HYIC has the following recurring As of and for the years ended June 30, 2019 and 2018 (continued) and 2018 (continued) 2019 As ofJune 30, ended the years and for as noted) except in thousands, (amounts Statements to Financial Notes Hudson Yards Infrastructure Corporation (A Component Unit of The City of New York) 28 As of and for the years ended June 30, 2019 and 2018 (continued) and 2018 (continued) 2019 As ofJune 30, ended the years and for as noted) except in thousands, (amounts Statements to Financial Notes Changes in Long-term Liabilities The series 2007A 2007A Bonds in the amount of $2 billion to partially finance the Project. On December 21, 2006, HYIC issued the Series 2007 and maturing on February 15, 2047. On payment dates beginning on August 15, termbonds were bonds with semiannual interest Series A Senior Revenue Bonds in the amount of $1 billion. HYIC has pledged all revenues October 26, 2011, HYIC issued its Fiscal 2012 term The Series 2012A Bonds are portion of the Project. remaining the the bonds to finance sales of TDRs to secure from and its proceeds on February 15, 2012, and maturing on February 15, 2047. Debt service payments the payments beginning bonds with semiannual interest in of development as a result received and TDRs sale proceeds revenues made from were Series 2007A Bonds and the Series 2012A Bonds Financing District. the Hudson Yards PILOT payments plus TEP fiscal years, HYIC’s certifies that, for each of the two preceding The Conversion Date is the date on which HYIC annual debt service on not less than 125% of the maximum operating expenses, (“Net Recurring Revenues”) were less HYIC’s revenues, of the than 105% of maximum annual debt service on all outstanding bonds calculated as all then-outstanding senior bonds and not less bonds first became callable (February 15, 2017) and prior to the Conversion Date, all revenues Conversion Date. After the date on which redeem senior bonds in advance or must be used to purchase and interest remaining after funding expenses by HYIC in a fiscal year received the City has made ISPs, then year, except that, if, during such fiscal for the subsequent fiscal year, after funding interest of their maturity, on principal of payments any make to obligated not is HYIC Date, Conversion the to Prior ISPs. such for City the reimburse first must HYIC to make such payments. After the Conversion Date, in amounts sufficient revenues received its bonds prior to maturity unless and until HYIC The refinancing later than June 30th of that year. HYIC must establish a schedule of sinking fund installments for all outstanding debt no bonds outstanding under the First Indenture. caused the conversion of the remaining issuance in May 2017, discussed below, on the bonds prior to maturity unless and until – and Prior to the Conversion Date, HYIC was not obligated to make any payments of principal call date make such payments. After the first to in amounts sufficient and TDRs sale proceeds revenues – HYIC receives to the extent that must be used after funding expenses and interest remaining (February 15, 2017) for the bonds and prior to the Conversion Date, all revenues for the subsequent fiscal year (except that, if the City has made ISPs during such Series bonds after funding interest or redeem to purchase installments specifies that a schedule of sinking fund reimburse the City for such ISPs). The First Indenture then HYIC must first fiscal year, Date. must be established for the bonds no later than the June 30th following the Conversion Bonds Bonds and $33.3 million Series B Subordinate 2017 Series A Subordinate On May 30, 2017, HYIC issued $2.1 billion Fiscal Year on February 15 and August 15. on FY17 Bonds is paid semi-annually Interest (together known as “FY17 Bonds”) under the Second Indenture. million of the FY12 Bonds. all of the FY07 Bonds and $391 applied, with other available funds, to refund of the FY17 Bonds were Proceeds to be $609 million of FY12 Bonds requiring the unrefunded bonds, remaining First Indenture caused the conversion of the The refinancing the refunding installments. Additionally, annual sinking fund amortized on a substantially level debt service basis to maturity in 2047 through to defease a portion of its debt. Finance Authority (“NYC TFA”) City Transitional enabled HYIC to make a payment to the New York 6. LONG-TERM LIABILITIES LONG-TERM 6. 5. TRANSFERABLE DEVELOPMENT RIGHTS DEVELOPMENT TRANSFERABLE 5. under an agreement the purpose of resale, Development Rights (“TDRs”) for Transferable in Eastern Rail Yards a 50% interest HYIC acquired The Island Rail Road Company (“TDR Agreement”). Authority and the Long Bridge and Tunnel the Triborough the MTA, among the City, size than would otherwise be permissible permits by developers of TDRs as-of-right under of larger the construction of buildings purchase costs price and interest the $200 million total purchase by HYIC for sales of the TDRs including received Proceeds applicable zoning law. made the initial HYIC the terms its operations and service its debt. Under used by HYIC to support of the TDR Agreement, were thereon payments of $33 million in September of annual more in fiscal year 2007, and made three $100 million to the MTA installment payment of price and interest. for this purchase 2007, 2008 and 2009 as an asset in the governmental funds funds, was reflected cost of price and HYIC’s including, the full purchase The full value of the TDRs, expense/ to interest an offset cost of funds was adjusted annually as the statements of net position (deficit). The balance sheets and in in TDRs. interest remaining In September 2017, HYIC sold all of its expenditures. (A Component Unit of The City of New York)

Hudson Yards Infrastructure Corporation 29

33,295 33,295 Balance Balance 291,710 275,625 3,015,580 2,999,495 2,723,870 2,723,870 2,108,465 2,108,465 June 30, 2019 June 30, 2018 $ — $ — $ 582,110 $ 582,110 — — — — — (16,798) (26,890) (16,085) Deletions Deletions $ (16,085) $ (26,890) $ (43,688) $ — — — — — — — — — — Additions Additions $ — $ — $ —

33,295 33,295 Balance Balance 291,710 308,508 2,750,760 2,723,870 2,108,465 2,108,465 $ 3,015,580 $ 609,000 $ 3,059,268 $ 582,110 June 30, 2017 June 30, 2018 Due Within One Year Due Within One Year Total Bonds Payable and Premium Total Total Bonds Payable and Premium Bonds Total Premium Total before premium before Total Premium Total before premium before Total Fiscal 2017 Series B Fiscal 2012 Series A Fiscal 2017 Series A Fiscal 2012 Series A Fiscal 2017 Series A Fiscal 2017 Series B SERIES HYIC’s Indentures contain provisions that in the event of a payment default, the outstanding debt shall be subject to mandatory redemption to mandatory redemption that in the event of a payment default, the outstanding debt shall be subject contain provisions Indentures HYIC’s with the Indentures. and payment in accordance and other long termA summary of changes in outstanding bonds debt during the year ended June 30, 2018 follows: SERIES 6. LONG-TERM LIABILITIES (continued) LIABILITIES LONG-TERM 6. resources existing of its $30.3 million depositing bonds by Series A 2012 Year of Fiscal $26.9 million HYIC defeased 8, 2017, On December The 2018 payments. a total of $5.1 million in semi-annual interest to be invested and applied to pay account into a defeasance escrow on February 15, 2021. Fiscal 2012 Series A bonds will be redeemed remaining on 2020 sinking fund requirements through additional it to draw up to $350 million to finance (“Loan”) allowing Loan Agreement into a Term HYIC entered On February 1, 2019, Loan. June 30, 2019, HYIC has not drawn upon the As of Area. in the Project projects infrastructure money and with pledged collateral consisting of all and (as defined in the Indentures) by the revenues 1) secured Outstanding debt is : at fixed interest and 2) bear to the applicable Indentures, pursuant funds, accounts, and subaccounts as provided securities deposited in 3% to 5.75%. rates ranging from and other long-termA summary of changes in outstanding bonds debt during the year ended June 30, 2019 follows: As of and for the years ended June 30, 2019 and 2018 (continued) and 2018 (continued) 2019 As ofJune 30, ended the years and for as noted) except in thousands, (amounts Statements to Financial Notes Hudson Yards Infrastructure Corporation (A Component Unit of The City of New York) 30 184,898 184,896 184,891 924,466 924,483 142,205 554,470 924,484 924,471 Debt Service $ 5,081,514 $ 132,250 45,870 Total Interest Interest 131,708 129,151 126,396 584,841 489,408 132,250 368,759 217,011 $ 2,357,644 $ 132,250 — 9,955

53,190 55,745 58,495 339,625 435,075 508,600 555,725 707,460 Principal $ 2,723,870 $ 98,585 96,433 33,414 Interest Interest 445,270 370,649 100,571 277,127 160,738 100,571 $ 1,783,929 $ 100,571 — — 42,690

44,675 46,825 * * * * * 271,030 345,655 439,175 396,150 555,560 Principal Second Indenture Bonds Second Indenture $ $ 2,141,760 31,679 30,566 29,963 91,632 31,137 12,456 56,273 31,679 Interest Interest 139,571 118,759 $ $ 573,715 — 9,955 11,070 11,670 68,595 89,420 10,500 116,550 112,450 151,900 First Indenture Bonds First Indenture Principal $ $ 582,110 2023 2024 2025 to 2029 2030 to 2034 2035 to 2039 2022 As of and for the years ended June 30, 2019 and 2018 (continued) and 2018 (continued) 2019 As ofJune 30, ended the years and for as noted) except in thousands, (amounts Statements to Financial Notes Totals 2040 to 2044 2020 Years Ended June 30, Years 6. LONG-TERM LIABILITIES (continued) LIABILITIES LONG-TERM 6. as follows: 2019, are at June 30, including principal and interest, on bonds, Debt service requirements Claims and Litigation claimants with pending claims for additional compensation for the City’s from receiving appraisals During fiscal year 2010, the City began the Corporation the Project, for interest is the condemnor of property Although the City Area. the Project within of their interests acquisitions for funding any payments ultimately determined such claims. to be payable on is responsible a determination Court (the “Court”) issued that the Claimants’ appraisals York State Supreme In September 2011 (fiscal year 2012), the New determination to the Appellate Division, First appealed the Court’s zoning assumption. The Claimants upon an erroneous had relied did Claimants the 2012, and 2013 30, June ended years fiscal the of As decision. court’s lower the affirmed 2013, May in which, Department, the Claimants’ appraisals, the Corporation’s determination rejecting by the Courts aforesaid not submit amended appraisals. In view of the any accrued estimated was not estimable and therefore to these claims with respect if any, potential liability as of June 30, 2013 and 2012, financial statements for those years. HYIC’s from removed liabilities were zoning assumptions for the majority of appraisals to the City based on the appropriate In June 2014, the Claimants submitted amended would be submitted in fiscal properties and the City was informed remaining the properties that the balance of amended appraisals for the to City condemnation cases, it may be reasonable year 2015. In view of these events and based on a range of typical outcomes of prior appraised values. of the City’s or less than 150 percent greater in awards condemnation claims may result assume that certain of the Project appraised value, plus 6 of the City’s the contingent liability was estimated at the lesser of the new appraised value or 50 percent Therefore, $73.9 was approximately the date of the condemnation. As of June 30, 2014, the estimated contingent liability from simple interest percent related to valuations as filed suit not a party to the above proceedings, million. In addition, as of June 30, 2014, other claimants, who were part of condemnation proceedings. recalculated the contingent liability was was submitted. Therefore, In fiscal year 2015, the balance of amended appraisals for the properties condemned plus was the date the property from calculated at 6% simple interest the interest and Appraised Value based on 50% of the City’s Appraisal Vesting Claimant’s and City the between difference the cases, some in However, §701. EDPL NY under fees legal potential for 18% as the contingent liability. was used appraised value so the difference amount of the City’s Amount was less than the 50% of the aggregate $47.1 million. as of June 30, 2015, the estimated contingent liability was approximately Therefore, been adjusted for settled cases and accrued of the contingent liability in fiscal year 2015, the contingent liability has Since the recalculation as The estimate may be revised in an amount of $18 million and $28.3 million as of June 30, 2019 and 2018, respectively. resulting interest litigated or settled. further information is obtained and as pending cases are 2045 to 2047 2021 Hudson Yards Infrastructure Corporation (A Component Unit of The City of New York) 31 INVESTOR CONTACT INVESTOR Jason Goh (212) 788-5864 or [email protected] OFFICERS Executive Director Alan L. Anders Secretary D. Ulrey Prescott Treasurer Jay Olson F. Comptroller Robert Balducci Deputy Comptroller Kemraj Narine Assistant Secretary M. Werner Jeffrey Assistant Treasurer Laura A. Tarbox Accounting Manager Nameca Sharma

Laura Anglin Deputy Mayor for Operations Vicki Been Deputy Mayor for Housing and Economic Development Johnson Corey Speaker of City Council Jacques Jiha Commissioner of the Department of Finance Scott M. Stringer City Comptroller New York DIRECTORS Melanie Hartzog City Office of the New York Director Budget of Management and DIRECTORS AND AND MANAGEMENT DIRECTORS 255 Greenwich Street, 6th Floor New York, NY 10007 Hudson Yards Infrastructure Corporation www.nyc.gov/hyic