candidates it believes are most likely to win the most votes and all votes are distributed immediately to one or the other preferred candidate. This result is indicative only and subsequently the formal count will be performed after all "declaration" (e.g. postal, absent votes) votes are received. In this example, the candidate with the smallest vote, Davies, will be eliminated, and his or her preferences will be distributed: that is, his or her 4,000 votes will be individually re-allocated to the remaining candidates according to which candidate received the number 2 vote on each of those 4000 ballot papers. Suppose Davies's preferences split 50/50 between Smith and Jones. After re-allocation of Davies's votes, Smith would have 47% and Jones 37% of the total votes in the electorate. White would then be eliminated. Suppose all of White's preferences went to Smith. Smith would then have 53% and would be declared elected. Johnson's votes would not need to be distributed. Exhausted preferences The exhausted counts correspond to votes that ought to be informal, if strictly following the rules above, but were deemed to have expressed some valid preferences. The Electoral Act has since been amended to almost eliminate exhausted votes. Section 268(1)(c) of the Commonwealth Electoral Act 1918 now has the effect of making the vote of any elector that does not preference every candidate on the ballot paper an informal vote as opposed to counting the vote until the voter's preference exhausts. Two-party majorities, swings and pendulums Since 1984 the preferences of all candidates in House of Representatives seats have been distributed, even if this is not necessary to determine the winner of the seat. This is done to determine the percentage of the votes obtained by the winning candidate after the distribution of all preferences. This is called the two-party-preferred vote. For example, if (in the example given above), Smith finished with 58% of the vote after the distribution of Johnson's preferences, Smith's two-party vote would be 58% and the seat would be said to have a two-party majority of 8%. It would therefore need a two-party swing of 8 percentage points to be lost to the other side of politics at the next election. Once the two-party majorities in all seats are known, they can then be arranged in a table to show the order in which they would be lost in the event of an adverse swing at