Partitioning of precipitation into runoff and evaporation is the central problem of continental water balance. A series of papers (Milly, 1993, abstract; Milly, 1994a, abstract; Milly, 1994b, abstract, paper) developed a simple picture of water-balance partitioning as the result of a storage-mediated balance of asynchronous water supply (precipitation) and demand (potential evaporation). The analysis explained, in physical terms, the shape of M. I. Budyko's heretofore empirically determined average water-balance relation and the departures of individual basins from the behavior of an ‘average’ basin.