*
(1(5$7,21ꢃꢃ2)ꢃꢃ&ꢓ&/23523$1(',$=21,80ꢃꢃ
ꢀꢍꢅꢍꢃ
JUDSKLFꢃVHSDUDWLRQꢋꢈꢃ7KHꢃPDLQꢃUHDFWLRQꢃSDWKZD\ꢃLVꢃ QLWURVRXUHDꢃDDꢃDQGꢃꢀꢈꢀꢆꢃJꢃꢊꢀꢁꢈꢍꢃPPROꢋꢃRIꢃSKHQROꢃLQꢃꢃ
GLD]RꢃFRXSOLQJꢃZLWKꢃIRUPDWLRQꢃRIꢃꢉꢇꢊF\FORSURS\OGLꢇ ꢍꢅꢃPOꢃRIꢃPHWK\OHQHꢃFKORULGHꢃZDVꢃFRROHGꢃWRꢃꢆ±ꢑ&ꢄꢃDQGꢃ
D]HQ\OꢋSKHQROꢃꢊDDDꢋꢈꢃ+RZHYHUꢄꢃSKHQROꢃLVꢃDꢃFRQVLGHUDEO\ꢃ ꢆꢈꢑꢏꢃJꢃꢊꢀꢑꢃPPROꢋꢃRIꢃFHVLXPꢃFDUERQDWHꢃZDVꢃDGGHGꢃ
OHVVꢃUHDFWLYHꢃD]RꢃFRPSRQHQWꢃWKDQꢃQDSKWKDOHQꢇꢀꢇꢃDQGꢃꢃ XQGHUꢃVWLUULQJꢈꢃ9LJRURXVꢃJDVꢃHYROXWLRQꢃZDVꢃREVHUYHGꢃ
ꢇꢁꢇROVꢄꢃVRꢃWKDWꢃWKHꢃFRQWULEXWLRQꢃRIꢃHOLPLQDWLRQꢃRIꢃ RYHUꢃDꢃSHULRGꢃRIꢃꢀꢅꢃPLQꢈꢃ7KHꢃPL[WXUHꢃZDVꢃVWLUUHGꢃIRUꢃDQꢃ
QLWURJHQꢃPROHFXOHꢃIURPꢃGLD]RQLXPꢃLRQꢃDꢃWRꢃJLYHꢃDOO\Oꢃ DGGLWLRQDOꢃꢉꢅꢃPLQꢄꢃPDLQWDLQLQJꢃWKHꢃWHPSHUDWXUHꢃDWꢃꢆ±ꢃ
DQGꢃF\FORSURS\OꢃFDWLRQVꢃEHFRPHVꢃDSSUHFLDEOHꢈꢃ7KHVHꢃ ꢑ&ꢈꢃ7KHꢃSUHFLSLWDWHꢃZDVꢃILOWHUHGꢃRIIꢃDQGꢃZDVKHGꢃZLWKꢃ
FDWLRQVꢃJLYHꢃULVHꢃWRꢃDꢃEURDGꢃVSHFWUXPꢃRIꢃ&ꢇꢃDQGꢃ2ꢇDOꢇ PHWK\OHQHꢃFKORULGHꢃꢊꢁîꢀꢅꢃPOꢋꢄꢃDQGꢃWKHꢃVROYHQWꢃZDVꢃ
N\ODWLRQꢃSURGXFWVꢃIURPꢃFRPSRXQGVꢃSUHVHQWꢃLQꢃWKHꢃUHDFꢇ
WLRQꢃPL[WXUHꢈꢃ:HꢃFDQQRWꢃUXOHꢃRXWꢃWKDWꢃWKHꢃPDMRUꢃSURGꢇ
GLVWLOOHGꢃRIIꢃXQGHUꢃUHGXFHGꢃSUHVVXUHꢃꢊꢀꢅꢅꢃPPꢋꢃWRꢃREWDLQꢃ
ꢀꢈꢐꢍꢃJꢃRIꢃDQꢃRUDQJH±EURZQꢃVHPLFU\VWDOOLQHꢃPDWHULDOꢃ
XFWꢄꢃꢉꢇꢊF\FORSURS\OGLD]HQ\OꢋSKHQROꢃꢊDDDꢋꢄꢃUHDFWVꢃZLWKꢃ ZKLFKꢃZDVꢃGLVVROYHGꢃLQꢃDꢃPLQLPDOꢃDPRXQWꢃRIꢃWROXHQHꢃ
DOO\OꢃDQGꢃF\FORSURS\OꢃFDWLRQVꢃPRUHꢃDFWLYHO\ꢃWKDQꢃGRHVꢃ DQGꢃVXEMHFWHGꢃWRꢃFROXPQꢃFKURPDWRJUDSK\ꢃRQꢃVLOLFDꢃJHOꢈꢃ
LQLWLDOꢃSKHQROꢈꢃ
7KHꢃFROXPQꢃZDVꢃHOXWHGꢃILUVWꢃZLWKꢃWROXHQHꢃDQGꢃWKHQꢃZLWKꢃ
WROXHQH±HWK\OꢃDFHWDWHꢃPL[WXUHVꢃZLWKꢃLQFUHDVLQJꢃFRQFHQꢇ
WUDWLRQꢃRIꢃWKHꢃODWWHUꢃXSꢃWRꢃDꢃ3K0H±(W2$FꢃUDWLRꢃRIꢃꢀꢅꢔꢀꢈꢃ
(;3(5,0(17$/ꢃ
,
QGLYLGXDOꢃFRPSRXQGVꢃZHUHꢃLVRODWHGꢃIURPꢃIUDFWLRQVꢃ
7
KHꢃ +ꢃ105ꢃVSHFWUDꢃZHUHꢃPHDVXUHGꢃRQꢃDꢃ%UXNHUꢃ FRQWDLQLQJꢃVHYHUDOꢃSURGXFWVꢃE\ꢃDGGLWLRQDOꢃFKURPDWRJꢇ
$
&
0ꢇꢍꢅꢅꢃVSHFWURPHWHUꢃꢊꢍꢅꢅꢃ0+]ꢋꢃIURPꢃVROXWLRQVꢃLQꢃ UDSK\ꢃDQGꢃFU\VWDOOL]DWLRQꢃꢊVHHꢃEHORZꢋꢈꢃ
'&O ꢃFRQWDLQLQJꢃꢅꢈꢅꢆ<ꢃRIꢃWHWUDPHWK\OVLODQHꢃDVꢃLQꢇ
#
ꢅꢆ8pyꢀyqvhryꢇuryꢁꢆDDDꢇꢃZDVꢃLVRODWHGꢃ
WHUQDOꢃUHIHUHQFHꢈꢃ7KHꢃ &ꢃ105ꢃVSHFWUDꢃZHUHꢃUHFRUGHGꢃ
RQꢃDꢃ%UXNHUꢃ:0ꢇꢁꢆꢅꢃVSHFWURPHWHUꢃꢊꢏꢁꢈꢂꢃ0+]ꢋꢃIURPꢃ
VROXWLRQVꢃLQꢃ&'&Oꢃꢊ ꢃꢐꢐꢈꢀꢃSSPꢋꢎꢃWZRꢇGLPHQVLRQDOꢃ
E\ꢃUHFU\VWDOOL]DWLRQꢃIURPꢃSHQWDQH±EHQ]HQHꢃꢊꢍꢔꢀꢋꢈꢃꢓLHOGꢃ
ꢁ
ꢉꢀꢃPJꢃꢊꢀꢐ<ꢋꢄꢃ\HOORZꢃSULVPVꢄꢃPSꢃꢂꢍ±ꢂꢉ&ꢈꢃ89ꢃVSHFꢇ
WUXPꢃꢊ(W2ꢋꢔꢃ ꢃꢍꢐꢂꢃQPꢃꢊ ꢃ ꢃꢐꢆꢅꢋꢈꢃ +ꢃ105ꢃVSHFꢇ
&
26ꢓꢄꢃ12(6ꢓꢄꢃDQGꢃ+64&ꢃH[SHULPHQWVꢃZHUHꢃSHUꢇ
IRUPHGꢃRQꢃDꢃ%UXNHUꢃ'5;ꢇꢆꢅꢅꢃLQVWUXPHQWꢃꢊꢆꢅꢅꢃ0+]ꢋꢈꢃ
KHꢃPDVVꢃVSHFWUDꢃꢊHOHFWURQꢃLPSDFWꢄꢃꢐꢅꢃH9ꢋꢃZHUHꢃREꢇ
WDLQHGꢃRQꢃDꢃ)LQQLJDQꢃ0$7ꢃ,1&26ꢇꢆꢅꢃVSHFWURPHWHUꢃ
ZLWKꢃGLUHFWꢃVDPSOHꢃDGPLVVLRQꢃLQWRꢃWKHꢃLRQꢃVRXUFHꢈꢃ7KHꢃ ꢐꢈꢀꢃ+]ꢋꢈꢃ &ꢃ105ꢃVSHFWUXPꢄꢃ ꢄꢃSSPꢔꢃꢀꢆꢑꢈꢁꢁꢃꢊ& ꢋꢄꢃ
9ꢃVSHFWUDꢃZHUHꢃPHDVXUHGꢃRQꢃDꢃ6SHFRUGꢃ0ꢇꢉꢅꢃVSHFꢇ
ꢀꢉꢆꢈꢀꢑꢃꢊ& ꢋꢄꢃꢀꢁꢍꢈꢐꢀꢃꢊ& ꢄꢃ& ꢋꢄꢃꢀꢀꢆꢈꢂꢆꢃꢊ& ꢄꢃ& ꢋꢄꢃꢆꢅꢈꢁꢍꢃ
WURPHWHUꢈꢃ7KHꢃHOHPHQWDOꢃFRPSRVLWLRQVꢃZHUHꢃGHWHUPLQHGꢃ ꢊ&ꢋꢄꢃꢂꢈꢑꢂꢃꢊ&ꢄꢃ& ꢋꢈꢃ0DVVꢃVSHFWUXPꢄꢃPꢒ]ꢃꢊ, ꢄꢃ<ꢋꢔꢃꢀꢏꢁꢃ
WUXPꢄꢃ ꢄꢃSSPꢔꢃꢐꢈꢆꢏꢃPꢃꢊꢁ+ꢄꢃꢍꢇ+ꢄꢃꢆꢇ+ꢋꢄꢃꢏꢈꢑꢉꢃPꢃꢊꢁ+ꢄꢃꢁꢇ+ꢄꢃ
ꢏꢇ+ꢋꢄꢃꢆꢈꢏꢉꢃEUꢈVꢃꢊꢀ+ꢄꢃ2+ꢋꢄꢃꢍꢈꢏꢐꢃWꢈWꢃꢊꢀ+ꢄꢃꢐꢇ+ꢄꢃ- ꢃ ꢃꢍꢈꢉꢄꢃ
- ꢃ ꢃꢐꢈꢀꢃ+]ꢋꢄꢃꢀꢈꢉꢏꢃPꢃꢊꢁ+ꢄꢃWUDQVꢇꢑꢇ+ꢄꢃWUDQVꢇꢂꢇ+ꢄꢃꢃ
7
-
ꢃ ꢃꢍꢈꢉꢃ+]ꢋꢄꢃꢀꢈꢁꢁꢃPꢃꢊꢁ+ꢄꢃFLVꢇꢑꢇ+ꢄꢃFLVꢇꢂꢇ+ꢄꢃ- ꢃ ꢃꢃ
8
RQꢃDꢃ3HUNLQ±(OPHUꢃ6HULHVꢃ,,ꢃꢁꢉꢅꢅꢃ&+1ꢃDQDO\]HUꢈꢃꢃ
ꢊꢀꢉꢋꢃ>0@ ꢄꢃꢀꢍꢉꢃꢊꢍꢋꢃ>0ꢃ±ꢃ1@ ꢄꢃꢀꢁꢁꢃꢊꢂꢋꢃ>0ꢃ±ꢃ&+@ ꢄꢃꢀꢅꢐꢃ
ꢊꢁꢂꢋꢃ>0ꢃ±ꢃ&+1@ ꢄꢃꢂꢍꢃꢊꢍꢑꢋꢃ>0ꢃ±ꢃ&+1@ ꢄꢃꢍꢂꢃꢊꢀꢅꢅꢋꢈꢃ
1
ꢇ&\FORSURS\Oꢇ1ꢇQLWURVRXUHDꢃꢊDDꢋꢃZDVꢃSUHSDUHGꢃDFꢇ
)
RXQGꢄꢃ<ꢔꢃ&ꢃꢏꢏꢈꢐꢆꢎꢃ+ꢃꢏꢈꢉꢅꢎꢃ1ꢃꢀꢐꢈꢍꢑꢈꢃ&+ 12ꢈꢃ&DOꢇ
FXODWHGꢄꢃ<ꢔꢃ&ꢃꢏꢏꢈꢏꢆꢎꢃ+ꢃꢏꢈꢁꢀꢎꢃ1ꢃꢀꢐꢈꢁꢐꢈꢃ
ꢅ6yyyꢅ#ꢅꢆppyꢀyqvhryꢇuryꢁꢆDWꢇꢃZDVꢃ
FRUGLQJꢃWRꢃWKHꢃSURFHGXUHꢃGHVFULEHGꢃLQꢃ>ꢀꢐ@ꢈꢃ3RWDVVLXPꢃ
FDUERQDWHꢃRIꢃFKHPLFDOO\ꢃSXUHꢃJUDGHꢃFRQWDLQHGꢃaꢁꢅ<ꢃRIꢃ
ZDWHUꢎꢃSKHQROꢃRIꢃDQDO\WLFDOꢃJUDGHꢃDQGꢃDQLVROHꢃDQGꢃ
!
LVRODWHGꢃE\ꢃGRXEOHꢃFROXPQꢃFKURPDWRJUDSK\ꢃꢊWROXHQHꢃWRꢃ
WROXHQH±HWK\OꢃDFHWDWHꢄꢃꢁꢅꢔꢀꢋꢄꢃIROORZHGꢃE\ꢃUHFU\VWDOOL]Dꢇ
WLRQꢃIURPꢃSHQWDQH±EHQ]HQHꢃꢊꢆꢔꢀꢋꢈꢃꢓLHOGꢃꢀꢅꢏꢃPJꢃ
ꢊꢀꢁ<ꢋꢄꢃWKLQꢃ\HOORZꢃQHHGOHVꢄꢃPSꢃꢑꢂ±ꢂꢅ&ꢈꢃ +ꢃ105ꢃ
VSHFWUXPꢄꢃ ꢄꢃSSPꢔꢃꢐꢈꢉꢆꢃPꢃꢊꢁ+ꢄꢃꢍꢇ+ꢄꢃꢆꢇ+ꢋꢄꢃꢏꢈꢑꢉꢃPꢃꢊꢀ+ꢄꢃ
&
V &2 ꢃZLWKꢃDꢃSXULW\ꢃRIꢃꢂꢂ<ꢃZHUHꢃXVHGꢈꢃ$QDO\WLFDOꢃ
DQGꢃSUHSDUDWLYHꢃWKLQꢇOD\HUꢃFKURPDWRJUDSK\ꢃZDVꢃSHUꢇ
IRUPHGꢃRQꢃVLOLFDꢃJHOꢃSODWHVꢃꢊ6LOXIROꢄꢃ0HUFNꢋꢈꢃ6LOLFDꢃJHOꢃ
ꢏꢅꢃꢊꢅꢈꢅꢉꢅ±ꢅꢈꢅꢏꢍꢃPPꢄꢃ0HUFNꢋꢃZDVꢃXVHGꢃIRUꢃFROXPQꢃ
FKURPDWRJUDSK\ꢈꢃꢃ
ꢏꢇ+ꢋꢄꢃꢏꢈꢅꢍꢃPꢃꢊꢀ+ꢄꢃꢀꢀꢇ+ꢄꢃ- ꢃ ꢃꢏꢈꢉꢄꢃ-
ꢃ ꢃꢀꢐꢈꢏꢃ+]ꢋꢄꢃꢆꢈꢍꢑꢃEUꢈVꢃꢊꢀ+ꢄꢃ2+ꢋꢄꢃꢆꢈꢁꢁ±ꢆꢈꢀꢉꢃPꢃ
ꢊꢁ+ꢄꢃFLVꢇꢀꢁꢇ+ꢄꢃWUDQVꢇꢀꢁꢇ+ꢋꢄꢃꢍꢈꢏꢐꢃWꢈWꢃꢊꢀ+ꢄꢃꢐꢇ+ꢄꢃ- ꢃ ꢃ
ꢃ ꢃꢂꢈꢆꢄꢃ
Brrꢀhyꢁꢀprqꢀrꢁsꢀꢁphꢀꢀvtꢁꢁꢀrhpvꢁvꢁ
-
IHSꢁhyrꢃꢃ$ꢃVROXWLRQꢃRIꢃꢏꢈꢆꢃPJꢃꢊꢅꢈꢅꢆꢃPPROꢋꢃRIꢃ
1
ꢇF\FORSURS\Oꢇ1ꢇQLWURVRXUHDꢃꢊDDꢋꢃDQGꢃꢏꢈꢏꢃPJꢃꢃ
ꢍꢈꢍꢄꢃ- ꢃ ꢃꢐꢈꢅꢃ+]ꢋꢄꢃꢍꢈꢉꢆꢃGꢈWꢃꢊꢁ+ꢄꢃꢀꢅꢇ+ꢄꢃ-
ꢃ§ꢃꢃ
ꢊꢅꢈꢅꢐꢃPPROꢋꢃRIꢃSKHQROꢃLQꢃꢅꢈꢉꢃPOꢃRIꢃ&'&OꢃRUꢃ&'2'ꢃ
-
ꢃ ꢃꢀꢈꢏꢄꢃ- ꢃ ꢃꢏꢈꢉꢃ+]ꢋꢄꢃꢀꢈꢉꢐꢃPꢃꢊꢁ+ꢄꢃWUDQVꢇꢑꢇ+ꢄꢃ
ZDVꢃFRROHGꢃWRꢃꢆ±ꢐ&ꢄꢃDQGꢃꢀꢐꢈꢍꢃPJꢃꢊꢅꢈꢀꢃPPROꢋꢃRIꢃ
WUDQVꢇꢂꢇ+ꢄꢃ- ꢃ ꢃꢍꢈꢍꢃ+]ꢋꢄꢃꢀꢈꢁꢁꢃPꢃꢊꢁ+ꢄꢃFLVꢇꢑꢇ+ꢄꢃFLVꢇꢃ
ꢂꢇ+ꢄꢃ- ꢃ ꢃꢐꢈꢅꢃ+]ꢋꢈꢃ &ꢃ105ꢃVSHFWUXPꢄꢃ ꢄꢃSSPꢔꢃ
.
&2ꢃRUꢃꢍꢁꢈꢏꢃPJꢃꢊꢅꢈꢀꢃPPROꢋꢃRIꢃ&V&2ꢃZDVꢃDGGHGꢈꢃ
KHꢃSURJUHVVꢃRIꢃWKHꢃUHDFWLRQꢃZDVꢃPRQLWRUHGꢃE\ꢃ +ꢃ105ꢃ
DWꢃꢆ&ꢎꢃWKHꢃUHVXOWVꢃZHUHꢃGLVFXVVHGꢃDERYHꢈꢃ
7
ꢀ
ꢀ
ꢆꢏꢈꢁꢆꢃꢊ&ꢋꢄꢃꢀꢉꢆꢈꢍꢉꢃꢊ&ꢋꢄꢃꢀꢍꢆꢈꢂꢏꢃꢊ& ꢋꢄꢃꢀꢁꢐꢈꢅꢏꢃꢊ&ꢋꢄꢃ
ꢁꢍꢈꢆꢉꢃꢊ&ꢋꢄꢃꢀꢁꢁꢈꢅꢏꢃꢊ&ꢋꢄꢃꢀꢀꢏꢈꢁꢂꢃꢊ& ꢋꢄꢃꢀꢀꢆꢈꢆꢆꢃꢊ&ꢋꢄꢃ
9
rpvvꢁsꢁ1ꢅppyꢀyꢅ1ꢅvꢀꢀrhꢁ ꢆꢅꢈꢀꢂꢃꢊ&ꢋꢄꢃꢍꢉꢈꢉꢐꢃꢊ& ꢋꢄꢃꢂꢈꢏꢐꢃꢊ&ꢄꢃ&ꢋꢈꢃ0DVVꢃVSHFWUXPꢄꢃ
ꢆDDꢇꢁiꢁurꢁhpvꢁsꢁprvꢁphꢀihrꢁvꢁurꢁꢀrꢅ
Pꢒ]ꢃꢊ, ꢄꢃ<ꢋꢔꢃꢁꢅꢁꢃꢊꢐꢉꢋꢃ>0@ ꢄꢃꢀꢐꢉꢃꢊꢀꢅꢋꢃ>0ꢃ±ꢃ1@ ꢄꢃꢀꢏꢁꢃ
rprꢁsꢁuryꢃꢃ$ꢃVROXWLRQꢃRIꢃꢀꢈꢀꢉꢃJꢃꢊꢑꢈꢑꢃPPROꢋꢃRIꢃ ꢊꢁꢑꢋꢃ>0ꢃ±ꢃ&+@ ꢄꢃꢀꢉꢐꢃꢊꢍꢀꢋꢃ>0ꢃ±ꢃ&+1@ ꢄꢃꢀꢍꢍꢃꢊꢍꢅꢋꢃꢃ
5
866,$1ꢃꢃ-2851$/ꢃꢃ2)ꢃꢃ25*$1,&ꢃꢃ&+(0,675ꢓꢃꢃꢃ9ROꢈꢃꢃꢉꢁꢃꢃꢃ1Rꢈꢃꢃꢂꢃꢃꢃꢁꢅꢅꢏꢃ