D. Allain Et Al-Fibre Production in South American Camelids

*MFVITVSHYGXMSRMR7SYXL%QIVMGERGEQIPMHW
ERHSXLIVFVIERMQEPW
*MFVITVSHYGXMSR
MR7SYXL%QIVMGERGEQIPMHW
ERHSXLIVFVIERMQEPW
IHMXIHF]
1RKIPIW4qVI^'EFEP
.YER4EFPS+YXMqVVI^
-WEFIP'IVZERXIW
1.IWW%PGEPHI
;EKIRMRKIR%GEHIQMG
4 Y F P M W L I V W
,6%1
H,6%1
'2,
&RYHUSKRWR%ODQFD1LHWRDW
3DFRPDUFDUDQFK
)LUVWSXEOLVKHG
:DJHQLQJHQ$FDGHPLF3XEOLVKHUV
7KH1HWKHUODQGV
7KLVZRUNLVVXEMHFWWRFRS\ULJKW$OOULJKWV
DUHUHVHUYHGZKHWKHUWKHZKROHRUSDUWRI
WKHPDWHULDOLVFRQFHUQHG1RWKLQJIURPWKLV
SXEOLFDWLRQPD\EHWUDQVODWHGUHSURGXFHG
VWRUHGLQDFRPSXWHULVHGV\VWHPRUSXEOLVKHGLQ
DQ\IRUPRULQDQ\PDQQHULQFOXGLQJHOHFWURQLF
PHFKDQLFDOUHSURJUDSKLFRUSKRWRJUDSKLF
ZLWKRXWSULRUZULWWHQSHUPLVVLRQIURPWKH
SXEOLVKHU
:DJHQLQJHQ$FDGHPLF3XEOLVKHUV
32%R[
$(:DJHQLQJHQ
7KH1HWKHUODQGV
ZZZ:DJHQLQJHQ$FDGHPLFFRP
FRS\ULJKW#:DJHQLQJHQ$FDGHPLFFRP
7KHLQGLYLGXDOFRQWULEXWLRQVLQWKLVSXEOLFDWLRQ
DQGDQ\OLDELOLWLHVDULVLQJIURPWKHPUHPDLQWKH
UHVSRQVLELOLW\RIWKHDXWKRUV
7KHSXEOLVKHULVQRWUHVSRQVLEOHIRUSRVVLEOH
GDPDJHVZKLFKFRXOGEHDUHVXOWRIFRQWHQW
GHULYHGIURPWKLVSXEOLFDWLRQ
4VIJEGI
7KHPDLQREMHFWLYHRIWKHVH(XURSHDQPHHWLQJVLVWRSURPRWHWKHH[FKDQJHRIVFLHQWLFLQIRUPDWLRQ
DPRQJLQWHUQDWLRQDOJURXSVGHGLFDWHGWRWKHSURGXFWLRQRIDQLPDOVSURGXFLQJWH[WLOHEUH7KH\
DUHRUJDQLVHGXQGHUWKHXPEUHOODRIWKH(XURSHDQ$VVRFLDWLRQRI$QLPDO3URGXFWLRQ($$3
DQGFODLPVIRUUHODXQFKLQJWKHPHHWLQJDFWLYLWLHVRIWKH$QLPDO)LEUH:RUNLQJ*URXSRUJDQLVHG
ZLWKLQWKH($$37KHSUHYLRXV(XURSHDQ6\PSRVLXPZDVKHOGLQ*|WWLQJHQ*HUPDQ\LQ
DQGRXUPDLQDLPZDVWRVHWD\HDUIUHTXHQF\IRUWKHIROORZLQJPHHWLQJVWRFRQWLQXHZLWKWKH
GHEDWHVDERXW6RXWK$PHULFDQ&DPHOLGVDQG)LEUH$QLPDOV
7KHWK(XURSHDQ6\PSRVLXPRQ6RXWK$PHULFDQ&DPHOLGVDQG)LUVW(XURSHDQ0HHWLQJRQ
)LEUH$QLPDOVZDVMRLQWO\RUJDQLVHGE\WKH&RPSOXWHQVH8QLYHUVLW\RI0DGULG8&0DQGWKH
8QLYHUVLW\RI6HYLOOH86LQ6HYLOOH6SDLQ'U-XDQ3DEOR*XWLpUUH]8&0ZDVWKH&KDLUPDQ
RIWKH2UJDQLVLQJ&RPPLWWHHZKLFKZDVIRUPHGE\0-HV~V$OFDOGH860QJHOHV3pUH]
&DEDO 8&0 (VWHU %DUWRORPp 86 5RFtR OYDUH] 86 0HUFHGHV 9DOHUD 86 H ,VDEHO
&HUYDQWHV8&0:HZLVKWRWKDQNHVSHFLDOO\$QGUpV3pUH]DQG0HULW[HOO-XVWLFLDVWXGHQWV
IURPERWKXQLYHUVLWLHVZKRKHOSHGXVGXULQJWKH6\PSRVLXP
7KH6\PSRVLXPZDVKHOGDWWKH'LSXWDFLyQRI6HYLOOH:HWKDQNWKHDGPLQLVWUDWLRQRIWKH
'LSXWDFLyQIRUSURYLGLQJWKHOHFWXUHDQGSRVWHUVKDOOVDQGDOOWKHVWDIIIRUWKHLUKHOS
:HDUHJUDWHIXOWRWKH0LQLVWHULRGH&LHQFLDH,QQRYDFLyQ6SDQLVK0LQLVWU\RI6FLHQFHDQG
7HFKQRORJ\IRUVXSSRUWLQJWKHDWWHQGDQFHRIWKHLQYLWHGVSHDNHUV(76,$DQG9LFHUUHFWRUDGR
GH5HODFLRQHV,QVWLWXFLRQDOHVRI8QLYHUVLW\RI6HYLOOH%DUFOD\V%DQN'LSXWDFLyQRI6HYLOOH
7XULVPRRI6HYLOOH&RQYHQWLRQ%XUHDX0LQLVWHULRGH0HGLR$PELHQWH\0HGLR5XUDO\0DULQR
DQG&RQVHMHUtDGH$JULFXOWXUD\3HVFDRI-XQWDGH$QGDOXFtDIXQGHGWKHRUJDQLVDWLRQRIWKH
6\PSRVLXP:H ZRXOG DOVR OLNH WR DFNQRZOHGJH WKH ,QVWLWXWR 1DFLRQDO GH ,QYHVWLJDFLyQ \
7HFQRORJtD$JUDULD \$OLPHQWDULD ,1,$ 6SDQLVK ,QVWLWXWH RI$JULFXOWXUDO 7HFKQRORJ\ DQG
5HVHDUFK ZKR IXQGHG WKHVH SURFHHGLQJV $& WKDW ZHUH SULQWHG IURP
WKHPDQXVFULSWVVXSSOLHGE\WKHDXWKRUV:HZRXOGOLNHWRWKDQNWKHHGLWRUVRI:DJHQLQJHQ
$FDGHPLF3XEOLVKHUV+HUHDUHWKHVWXGLHVSUHVHQWHGLQ6HYLOOHWKDWWKHFRQWULEXWRUVZDQWHGWR
EHSXEOLVKHGLQWKHVHSURFHHGLQJV
0QJHOHV3pUH]&DEDO-XDQ3DEOR*XWLpUUH],VDEHO&HUYDQWHVDQG0-HV~V$OFDOGH
7KHHGLWRUV
*MFVITVSHYGXMSRMR7SYXL%QIVMGERGEQIPMHWERHSXLIVFVIERMQEPW
8EFPISJGSRXIRXW
3UHIDFH
7IXXMRKXLIWGIRIERMQEPFVI
*HQHWLFYDULDELOLW\RIHHFHVKHGGLQJLQWKH0DUWLQLNKDLU5RPDQHVKHHSEUHHGVDQG
WKHLUFURVVEUHGV
'$OODLQ%3HQD')RXOTXLp<%RXUGLOORQDQG')UDQoRLV

6XUL+XDFD\DSKHQRW\SHLQKHULWDQFHLQDOSDFD9LFXJQDSDFRV
&5HQLHUL$9DOERQHVL0$QWRQLQL9/D0DQQD7+XDQFD1$SD]D
63UHVFLXWWLQLDQG0$VSDUULQ

3URGXFLQJDOSDFDEUHIRUWKHWH[WLOHLQGXVWU\
50RUDQWH$%XUJRVDQG-3*XWLpUUH]

1IEXERHFVITVSHYGXMSR
([WHUQDOHIIHFWVIRUWKHTXDQWLW\DQGTXDOLW\RIEUHLQ*XDQDFRV
-9RQ7KQJHQ5/KHXUH(6HJXLQHDX'H3UHYDODQG$3HUD]]R

*HQHWLFDQGQRQJHQHWLFIDFWRUVLQXHQFLQJEUHTXDOLW\RI$UNKDUPHULQR*KH]HODQG
$UNKDUPHULQR0RJKDQLFURVVEUHHGVRIVKHHSLQWKLUGJHQHUDWLRQ
+(VIDQG\DUL$$$VODPLQHMDGDQG6$5DIDW

'LIIHUHQFHVLQEUHGLDPHWHUSUROHEHWZHHQVKHDULQJSHULRGVLQZKLWH+XDFD\D
$OSDFDV9LFXJQDSDFRV
30D\KXD(&4XLVSH00RQWHVDQG/$OIRQVR

)LEUHSURGXFWLRQDQGEUHFKDUDFWHULVWLFVRIDOSDFDVIDUPHGLQ8QLWHG6WDWHV
7:XOLML

'LYHUVLW\DQGFRPSDULVRQRIZRROSDUDPHWHUVLQGLIIHUHQW$PHULFDQDQG(XURSHDQ
RYLQHEUHHGV
303DUpV&DVDQRYD53HUH]JURYDV*DU]DDQG--RUGDQD9LGDO

7HVWLQJREMHFWLYHPHWULFVIRUWKHGLIIHUHQWLDWLRQRIFRDWFRORXUVLQD6SDQLVKDOSDFD
SRSXODWLRQ
(%DUWRORPp0-6iQFKH])3HxDDQG$+RUFDGD

&VIIHMRKERHKIRIXMGW
$QDO\VLVRIWKHPLWRFKRQGULDOGLYHUVLW\RIDOSDFDVLQHLJKWIDUPLQJDUHDVRIWKHVRXWKRI
3HUX
&0HOR$0DQXQ]D00HOR/2OLYHUDDQG0$PLOOV
$VLSDQG0&5F'1$SRO\PRUSKLVPLQDOSDFD
&%DWKUDFKDODP9/D0DQQD&5HQLHULDQG$/D7HU]D

*HQHWLFGLYHUVLW\LQ0DODEDULJRDWV
.$%LQGX.&5DJKDYDQDQG6$QWRQ\
*HQHWLFSDUDPHWHUVIRUJURZWKRIEUHGLDPHWHULQDOSDFDV
/9DURQD,&HUYDQWHV0$3pUH]&DEDO50RUDQWH$%XUJRVDQG-3*XWLpUUH]
&RPSDULVRQRIGLIIHUHQWEUHHGLQJVWUDWHJLHVWRLPSURYHDOSDFDEUHSURGXFWLRQLQD
ORZLQSXWSURGXFWLRQV\VWHP
(&4XLVSH53D~FDU$3RPD$)ORUHVDQG/$OIRQVR

0LWRFKRQGULDO'1$PW'1$JHQHWLFGLYHUVLW\RI9LFXJQDYLFXJQDPHQVDOLVLQ%ROLYLD

-%DUUHWD9,xLJXH]5-6DUQR%*XWLpUUH]*LODQG--$UUDQ]
$VVRFLDWLRQRIP\RVWDWLQJHQH0671SRO\PRUSKLVPZLWKHFRQRPLFWUDLWVLQUDEELWV
.$%LQGX$UXQ5DYHHQGUDQ6LE\$QWRQ\DQG.95DJKXQDQGDQDQ

*URZWKKRUPRQHJHQHLQOODPD/DPDJODPDFKDUDFWHULVDWLRQDQG613VLGHQWLFDWLRQ

06'DYHULR)'L5RFFRDQG/9LGDO5LRMD
$OSDFDVSHUPFKURPDWLQHYDOXDWLRQXVLQJ7ROXLGLQH%OXH
0,&DUUHWHUR&&$UUD]WRD&,&DVDUHWWR:+XDQFD'01HLOGDQG
06*LXOLDQR

'HULYDWLRQRIHFRQRPLFYDOXHVIRUEUHGLDPHWHUHHFHZHLJKWLQDOSDFDV
/$OIRQVR-%XULWLFD54XLVSHDQG,4XLFDxR

$PLFURVDWHOOLWHVWXG\RQWKHJHQHWLFGLVWDQFHEHWZHHQ6XULDQG+XDFD\DSKHQRW\SHVLQ
3HUXYLDQDOSDFD9LFXJQDSDFRV
9/D0DQQD$/D7HU]D6'KDUDQHHGKDUDQ6*KH]]L6$UXPXJDP
6DUDYDQDSHUXPDO1$SD]D7+XDQFD5%R]]LDQG&5HQLHUL
*HQHWLFGLIIHUHQWLDWLRQRIVL[3HUXYLDQDOSDFDSRSXODWLRQV
03DUHGHV-0DFKDFD3-$]RU$$ORQVR0RUDJD$0HPEULOORDQG
$0XxR]6HUUDQR

2YXVMXMSRERHVITVSHYGXMSR
/DFWDWLRQLQOODPDV/DPDJODPDHVWLPDWLQJPLONLQWDNHDQGRXWSXWXVLQJVWDEOH
LVRWRSHWHFKQLTXHV
$5LHNDQG0*HUNHQ
)HHGSUHIHUHQFHVDQGUHFLSHDOWHUQDWLYHVIRUDOSDFDVLQD+XQJDULDQ]RR
$3UiJDL$.0ROQiU-3HNOL59HSULN*<+XV]iUDQG%RGQiU

1EREKIQIRX
$FURVVERUGHUZRROSURMHFWVXSSRUWVWKHFRQVHUYDWLRQRIWKH$OSLQHV6WHLQVFKDI
&0HQGHO$)HOGPDQQDQG1.HWWHUOH
,QYHVWLQJLQWKHGHYHORSPHQWRI6RXWK$PHULFDQFDPSHVLQRFDPHOLGHFRQRPLHVWKH
H[SHULHQFHRIWKH,QWHUQDWLRQDO)XQGIRU$JULFXOWXUDO'HYHORSPHQW,)$'
5+DXGU\'H6RXF\

%XLOGLQJDQGVFDOLQJXSNQRZOHGJHRQFDPHOLGV
*9LOD0HORDQG&*XWLpUUH]9iVTXH]

3UHOLPLQDU\VWXG\RIERG\PHDVXUHPHQWVRQDOSDFDVLQQRUWKHUQ,WDO\
$7DPEXULQL$%ULJDQWL$*LRUJLDQG$6DQGUXFFL

,IEPXL
2UWKRSDHGLFSUREOHPVLQOODPDVDQGDOSDFDVFOLQLFDODQGUDGLRORJLFDODVSHFWV
,*XQVVHU
'LDUUKHDJHQLF(VFKHULFKLDFROLVWUDLQVLVRODWHGIURPQHRQDWDO3HUXYLDQDOSDFDV
9LFXJQDSDFRVZLWKGLDUUKHD
'&LG&0DUWtQ(VSDGD/0DWXUUDQR$*DUFtD//XQDDQG55RVDGLR

%FWXVEGXW
&KDQJHVLQVXFNOLQJEHKDYLRXUGXULQJODFWDWLRQLQOODPDV/DPDJODPD
$.OLQNHUWDQG0*HUNHQ

$QDWRPLFDOLPDJLQJRIEORRGYHVVHOVIRUYHQLSXQFWXUHLQ6RXWK$PHULFDQFDPHOLGV
&6FKXO].$PRUW0*DXO\0.UDPHUDQG..RHKOHU

$OSDFDEUHHGLQJDQGSURGXFWLRQSURVSHFWVLQWKH8QLWHG6WDWHV
7:XOLML

6SYRHXEFPIW
&RPPRQPDQDJHPHQWGHQRPLQDWRUVEHWZHHQ6RXWK$PHULFDQFDPHOLGVDQGRWKHU
EUHDQLPDOV

6RXWK$PHULFDQFDPHOLGVKHDOWK

/I][SVHMRHI\

+IRIXMGZEVMEFMPMX]SJIIGIWLIHHMRKMRXLI1EVXMRMOLEMV
6SQERIWLIITFVIIHWERHXLIMVGVSWWFVIHW
'$OODLQ%3HQD')RXOTXLp<%RXUGLOORQDQG')UDQoRLV
,15$ 85 $PpOLRUDWLRQ *pQpWLTXH GHV$QLPDX[ ) &DVWDQHW 7RORVDQ )UDQFH
GDQLHODOODLQ#WRXORXVHLQUDIU
,15$8('RPDLQHGHOD)DJH6DLQW-HDQHW6DLQW3DXO5RTXHIRUW)UDQFH
,15$8('RPDLQHGH%RXUJHVOD6DSLQLqUH2VPR\)UDQFH
%FWXVEGX
)URPWKHDQFHVWUDOSHODJHRIWKHGRPHVWLFVKHHSZKLFKORRNVOLNHWKHSURWHFWLYHGRXEOHFRDWRI
WKHZLOGVKHHSFKDQJHVIROORZLQJGRPHVWLFDWLRQDQGWKHGHYHORSPHQWRIWH[WLOHLQGXVWU\UHVXOWHG
LQWKHGHYHORSPHQWRIWKHPRGHUQZRROOHGVKHHSZLWKDODUJHGHFUHDVHLQWKHWHQGHQF\WRPRXOW
DQGH[WHQVLRQRIZRROEUHDWWKHH[SHQVHRIFRDUVHKDLUOHDGLQJWRDVLQJOHFRDWZKHUHDOOEUHV
DUHVLPLODULQGLPHQVLRQDQGJURZSHUPDQHQWO\:RROSURGXFWLRQLVVWLOOWKHPDLQSXUSRVHRI
VKHHSIDUPLQJLQWKHVRXWKHUQKHPLVSKHUHEXWLQ(XURSHZRROSURGXFWLRQLVRIWHQXQSURWDEOH
DQGWKHUHLVDQLQWHUHVWLQWKHXVHRIEUHHGVWKDWKDYHQRZRRORUVKHGWKHLUZRROGXHWRWKHUHODWLYH
YDOXHRIPHDWDQGZRRODQGLQFUHDVLQJVKHDULQJFRVWV,QWKHSUHVHQWSDSHULQYHVWLJDWLRQVZHUH
PDGHWRHYDOXDWHJHQHWLFYDULDELOLW\RIPRXOWLQJRUHHFHVKHGGLQJLQFOXGLQJ47/GHWHFWLRQLQ
WKH)UHQFK5RPDQHWKH0DUWLQLN+DLUDKDLU\VKHHSZLWKRXWZRROFORVHWR%DUEDGRV%ODFN
%HOO\DQGD0DUWLQLN+DLU5RPDQHEDFNFURVVSRSXODWLRQ,QWKH5RPDQHEUHHGRIDGXOW
HZHVVKHGDWOHDVWSDUWRIWKHLUHHFHRQFHD\HDUGXULQJVSULQJ+HULWDELOLW\HVWLPDWHRIPRXOWLQJ
DSWLWXGHLVKLJKEXWSUHYDOHQFHRIWRWDOHHFHVKHGGLQJLVORZRIHZHVVKHGDOOWKHLU
HHFH,QWKH0DUWLQLN+DLU5RPDQHEDFNFURVVSRSXODWLRQRIDQLPDOVVKHGWKHLUHHFH,W
ZDVSURSRVHGWRLQWURJUHVVJHQHSRROIURPWKH0DUWLQLN+DLULQWKH5RPDQHEUHHGWKURXJKDQ
H[SHULPHQWDOGHVLJQFRPELQLQJ47/GHWHFWLRQDQGLQWURJUHVVLRQRI47/IRUHHFHVKHGGLQJLQ
WKH5RPDQHEUHHG
.H\ZRUGVVKHHSHHFHVKHGGLQJJHQHWLFYDULDELOLW\47/GHWHFWLRQJHQHLQWURJUHVVLRQ
-RXVSHYGXMSR
7KHZLOGDQFHVWRURIVKHHSZDVDKDLUVKHHSZKLFKHYROYHGLQWRPRGHUQZRROOHGEUHHGVWKURXJK
GRPHVWLFDWLRQ PLJUDWLRQ RI SHRSOH IURP WKH 0LGGOH (DVW DQG DUWLFLDO VHOHFWLRQ 7KH UVW
LPSRUWDQWPLJUDWLRQZDVRIKDLUVKHHSWKHSUHVHQWGD\WURSLFDOKDLUVKHHSDQGVRPHRWKHUKDLU
EUHHGV:LOWVKLUH+RUQ6RD\DUHGHVFHQGDQWVRIWKHVHVKHHS/DWHUPLJUDWLRQVRISHRSOH
IURPWKH0LGGOH(DVWRXWZDUGVWRVRXWKHDVW$VLD$IULFDDQG(XURSHZHUHDFFRPSDQLHGE\
GRPHVWLFDQLPDOVLQFOXGLQJWKHPRUHUHFHQWO\GHYHORSHGZRROOHGVKHHS,QWLPHWKHVHVKHHS
GLVSODFHGKDLUVKHHSHYHU\ZKHUHH[FHSWWKHKXPLGWURSLFV=\JR\LDQQLV
7KHQHHGVRIKXPDQVIRUFORWKLQJDQGRIWKHVKHHSIRUSURWHFWLRQIURPFROGZHUHXQGRXEWHGO\
UHVSRQVLEOHIRUWKHHYROXWLRQRIWKHPDQ\ZRROOHGEUHHGVDQGWKHLUGRPLQDQFHLQERWK(XURSH
DQGWKHDULGUHJLRQVRI$VLDDQG$IULFD,QSDUWLFXODUWKH5RPDQVLQWURGXFHGDZKLWHZRROOHG
VKHHSLQWR:HVWHUQ(XURSHDQGWKLVZDVDPDMRUFRQWULEXWRUWRWKH%ULWLVKEUHHGVRIVKHHSDQG
SUREDEO\DOVRQHZRROOHGVKHHS7KHGHYHORSPHQWRIWUXHQHZRROEHJDQLQWKH0LGGOH(DVW
SUREDEO\VRRQDIWHU%&5\GHU%XWWKHHPHUJHQFHRIWKH0HULQRDVDGLVWLQFWEUHHG
RFFXUUHGLQWKHODWH0LGGOH$JHVLQ6SDLQ5\GHU:RROSURGXFWLRQEDVHGRQWKH0HULQR
EUHHGZDVWKHQGHYHORSHGLQWKH1HZ:RUOGDQGVRXWKHUQKHPLVSKHUHIURPWKHWKFHQWXU\
M.A. Prez-Cabal et al. (eds.), Fibre production in South American camelids and other fibre animals,
DOI 10.3920/978-90-8686-727-1_1, Wageningen Academic Publishers 2011

$ORQJZLWKGRPHVWLFDWLRQDQGVHOHFWLRQSURFHVVLQUHVSRQVHWRWKHKXPDQQHHGVIRUFORWKLQJDQG
GHYHORSPHQWRIWKHWH[WLOHLQGXVWU\WKHFRDWRIWKHZLOGVKHHSHYROYHGLQWRWKHPHULQRHHFH7KH
FRDWRIWKHZLOGVKHHSDQGGHULYHGKDLUVKHHSFRPSULVHVDKDLU\RXWHUFRDWFRPSRVHGRINHPS
DQGDZRROO\XQGHUFRDW7KLVFRDWKDVDVLPSOHF\FOHRIDFWLYHJURZWKIURPVSULQJWRDXWXPQ
IROORZHGE\LQDFWLYLW\LQZLQWHUZKLFKLVDQQXDOO\GULYHQE\VHDVRQDOFKDQJHVLQGD\OLJKW7KH
ZKROHFRDWPRXOWVHYHU\VSULQJZLWKUHSODFHPHQWRIRXWHUFRDWRQO\IURPVSULQJWRVXPPHUDQG
WKHQUHSODFHPHQWRIWKHXQGHUFRDWIURPVXPPHUWRDXWXPQ&KDQJHVIROORZLQJGRPHVWLFDWLRQ
DQGVHOHFWLRQKDYHUHVXOWHGLQDQLQFUHDVLQJSHULRGRIKDLUJURZWKOHDGLQJWRDJURZWKSKDVH
ORQJHUWKDQD\HDUDQGVXEVHTXHQWO\DGHFUHDVHLQWKHWHQGHQF\WRPRXOWDQGWKHGHYHORSPHQW
RIWKHZRRODWWKHH[SHQVHRIWKHKDLUDQGNHPS$VDFRQVHTXHQFHIRUWH[WLOHXVHWKHOHQJWKHQLQJ
RIWKHKDLUJURZWKSKDVHSURYLGHVWKHQHFHVVDU\EUHOHQJWKIRUVSLQQLQJZKLOHH[WHQVLRQRIWKH
ZRROXQGHUFRDWOHDGVWRWKHPRGHUQQHZRROOHGVKHHSRZQLQJDVLQJOHFRDWZKHUHDOOEUHVDUH
VLPLODULQGLPHQVLRQVDQGJURZSHUPDQHQWO\5RXJHRW
7RGD\ZRROSURGXFWLRQUHPDLQWKHPDLQSXUSRVHRIVKHHSIDUPLQJLQWKHVRXWKHUQKHPLVSKHUH
PDLQO\$XVWUDOLD 1HZ =HDODQG$UJHQWLQD 8UXJXD\ 6RXWK$IULFD DQG$VLD ,Q FRQWUDVW LQ
(XURSHZRROSURGXFWLRQLVQRZJHQHUDOO\XQSURWDEOHDQGPD\LQGHHGEHXQGHVLUDEOHFRPSDUHG
WRPHDWRUPLONSURGXFWLRQ7KLVLVPDLQO\EHFDXVHWKHLQFRPHIURPZRROLVOHVVWKDQWKHFRVWV
DVVRFLDWHGZLWKVKHDULQJDQGWKHUHPRYDORIVRLOHGZRROGDJJLQJIURPODPEVSULRUWRVODXJKWHU
RUWRSUHYHQW\VWULNH9LSRQG&RQVHTXHQWO\ZLWKLQFUHDVLQJVKHDULQJFRVWVWKHUHLVD
QHZLQWHUHVWLQ(XURSHIRUWKHXVHRIEUHHGVWKDWKDYHQRZRRORUVKHGWKHLUZRRO6RPHIDUPHUV
LQWKH8.RU*HUPDQ\DUHH[SHULPHQWLQJE\FURVVLQJWKHLUVKHHSZLWKRWKHUEUHHGVWKDWHLWKHU
VKHGWKHLUZRRODQQXDOO\RUDUHUHFRJQLVHGKDLUVKHHSEUHHGVVXFKDVWKH:LOWVKLUH+RUQWKH
'RUSHU.KDWDUGLQDQG%DUEDGRV%ODFNEHOO\ZLWKYDU\LQJGHJUHHVRIVXFFHVV&RQLQJWRQ
7RGDWHQRVLPLODUH[SHULPHQWVKDYHEHHQXQGHUWDNHQLQ)UDQFH7KHSUHVHQWSDSHUGHVFULEHV
H[SHULPHQWDOGHVLJQVZLWKUVWUHVXOWVDLPLQJWRLQYHVWLJDWHJHQHWLFYDULDELOLW\LQFOXGLQJ
47/GHWHFWLRQRIHHFHVKHGGLQJDSWLWXGHLQWKH0DUWLQLN+DLUVKHHSEUHHGWKH)UHQFK5RPDQH
EUHHGDQGWKHLUFURVVEUHGDQGWRHYDOXDWHJHQHWLFVWUDWHJLHVIRUJHQHLQWURJUHVVLRQRIHHFH
VKHGGLQJLQWKH5RPDQHEUHHGLQ)UDQFH
*PIIGIWLIHHMRKETXMXYHIMRXLI6SQERIFVIIH
1EXIVMEPERHQIXLSHW
7KH5RPDQHEUHHGLVDFRPSRVLWHOLQHRI5RPDQRYSUROLFEUHHGDQG%HUULFKRQGX
&KHUPHDWEUHHGFRQVLGHUHGDVDQHZEUHHGDWWKHWKLQWHUFURVVJHQHUDWLRQ5LFRUGHDXHWDO
6HOHFWLRQREMHFWLYHVRIWKLVEUHHGDUHPRVWO\PDWHUQDOWUDLWVSUROLFDF\JURZWKRIWKH
ODPEVEHWZHHQDQGGD\VDQGPHDWSURGXFWLRQWUDLWV7KLVEUHHGLVNQRZQWRKDYHDKLJK
SURGXFWLYHSRWHQWLDOEXWVKRZVDODUJHYDULDELOLW\LQLWVHHFHW\SHGXHWRWKHYDULDELOLW\RIFRDW
VWUXFWXUHLQSDUHQWDOOLQHV5RPDQRYEUHHGKDVDFRDUVHHHFHZLWKVRPHEUHVKHGGLQJ%\NRYD
ZKLOH%HUULFKRQGX&KHUGHULYHGIURP0HULQRE\FURVVEUHHGLQJGXULQJWKHWKFHQWXU\
KDVDQHPHGLXPFURVVEUHGHHFH7KH5RPDQHEUHHGVKRZVDODUJHYDULDELOLW\LQLWVHHFHW\SH
ZLWKDKLJKYDULDEOHELUWKFRDWW\SHLQODPEVUHODWHGWRODPEVXUYLYDODQGDNHPSZRROHHFHRI
DSRRUTXDOLW\ZLWKVRPHDSWLWXGHIRUHHFHVKHGGLQJ$OODLQHWDOE
+IRIVEPI\TIVMQIRXEPGSRHMXMSRW
$RFNRIHZHVRIWKH5RPDQHEUHHGKDVEHHQXVHGDVH[SHULPHQWDOVXSSRUWVLQFH
DWWKH,15$IDUPRI/D)DJHRQWKH&DXVVHVGX/DU]DFDFDOFDUHRXVSODWHDXDWDQDOWLWXGHRI
PLQWKHVRXWKRI)UDQFH7KLVRFNZDVPDLQWDLQHGLQSHUPDQHQWRXWGRRUVFRQGLWLRQVRQ
UDQJHODQGV ZLWK DULG FRQGLWLRQV GHVSLWH DQ DEXQGDQW DQQXDO UDLQIDOO RI PP GXH WR DQ

LPSRUWDQWSHUPHDELOLW\RIWKHVRLOZKLFKIHHGVGHHSVXEWHUUDQHDQULYHUV6HDVRQVDUHKLJKO\
FRQWUDVWHGZLWKFROGZLQWHUGXHWRWKHDOWLWXGHKRWVXPPHUGXHWRWKHVRXWKHUQODWLWXGHDQG
LQWHUPHGLDWHVHDVRQVVKRZLQJKLJKYDULDWLRQVLQWHPSHUDWXUHZLQGDQGUDLQIDOO7KHEUHHGLQJ
V\VWHPWKXVGHVFULEHG%RXL[HWDOLVFKDUDFWHULVHGE\DVKRUWODPELQJSHULRGLQRXWGRRUV
FRQGLWLRQVIURPHQG0DUFKWRPLG$SULO&OLPDWHFRQGLWLRQVLQWKDWSHULRGFDQYDU\DEUXSWO\
IURPVHYHUHFRQGLWLRQVRIORZWHPSHUDWXUHZLQGDQGUDLQRUVQRZWRZDUPDQGVXQQ\FRQGLWLRQV
7KHDQQXDOVKHDULQJWLPHIRUHZHVLVWKHEHJLQQLQJRI-XO\MXVWDIWHUZHDQLQJWKHODPEV$WRWDO
RIREVHUYDWLRQVRQHHFHVKHGGLQJDSWLWXGHZHUHPDGHRQFHD\HDUIURPWKHDJHRI
PRQWKVRQHZHVIURPVLUHVMXVWSULRUWRWKHDQQXDOVKHDULQJDWWKHHQGRI-XQH
*PIIGIWLIHHMRKQIEWYVIQIRX
)OHHFHVKHGGLQJRUPRXOWLQJDSWLWXGHZDVGHWHUPLQHGLQDGXOWDQLPDOVRQFHD\HDUDWWKHHQG
RI-XQHMXVWEHIRUHVKHDULQJWLPH,QDUVWVWHSDWIDUPOHYHOWKHSDUWRIWKHDQLPDOERG\DUHD
GHQXGHGRUZLWKRXWZRROZDVGUDZQRQDVWDQGDUGVKHHSSUROH7KHQWKLVJXUHZDVDQDO\VHG
XVLQJLPDJHVRIWZDUHWRHVWLPDWHWKHH[WHQWRIPRXOWLQJRUHHFHVKHGGLQJDVDSHUFHQWDJHRI
WKHWRWDOERG\DUHD
(EXEEREP]WMW
'DWDZHUHDQDO\VHGE\$129$ZLWKWKH*/0SURFHGXUHRIWKH6$6SDFNDJH,QWKHDQDO\VLV
PRGHOWKHFRQVLGHUHG[HGHIIHFWVZHUH\HDURIREVHUYDWLRQIURPWRDJHOHYHOV
IURP\HDUWR\HDUVROGDQGPRUHOLWWHUVL]HOHYHOVIURPQRQHWRDQGQXPEHURIVXFNOLQJ
ODPEV*HQHWLFSDUDPHWHUVRIHHFHVKHGGLQJDSWLWXGHLQWKHDGXOW5RPDQHHZHZHUHHVWLPDWHG
XVLQJD707KUHVKROG0RGHOSURJUDPPHXVLQJD%D\HVLDQDQDO\VLVDQGSHUIRUPLQJQXPHULFDO
LQWHJUDWLRQWKURXJKWKH*LEEVVDPSOHU)OHHFHVKHGGLQJUDWHZDVFRQVLGHUHGDVDFRQWLQXRXVWUDLW
6IWYPXWERHHMWGYWWMSR
*PIIGIWLIHHMRKVEXIERHQSYPXMRKTEXXIVR
$QQXDOHHFHVKHGGLQJDSWLWXGHLQWKHDGXOW5RPDQHHZHVREVHUYHGRQFHD\HDU
UHFRUGVLVUHSRUWHGLQ)LJXUH0HDQHHFHVKHGGLQJUDWHLVZLWKDQGRI
DGXOWHZHVZKLFKVKHGDWOHDVWSDUWRIDQGDOOWKHLUHHFHRQFHD\HDUGXULQJVSULQJUHVSHFWLYHO\
$VDJHQHUDOSDWWHUQRIPRXOWLQJRYHUERG\UHJLRQVZRROVKHGGLQJZDVUVWREVHUYHGIURP
QHFNDQGEHOO\WKHQPRYHGSURJUHVVLYHO\LQDGRUVRSRVWHULRUGLUHFWLRQWRHQGRQWKHUXPS7KH
5RPDQHEUHHGEHLQJDFRPSRVLWHOLQHRI5RPDQRYDQG%HUULFKRQGXFKHUJHQHSRRO
LQYROYHGLQHHFHVKHGGLQJDSWLWXGHLVSUREDEO\RULJLQDWHGIURPWKH5RPDQRYEUHHGZKHUHEUH
VKHGGLQJKDVEHHQUHSRUWHG%\NRYDZKLOHQRHHFHVKHGGLQJKDVHYHUEHHQUHSRUWHGLQ
WKH%HUULFKRQGX&KHUEUHHG
2SRKIRIXMGIJJIGXWERHLIVMXEFMPMX]SJIIGIWLIHHMRKMRXLIEHYPX6SQERII[I
$JHRIWKHHZHUHSURGXFWLYHDFWLYLW\DQG\HDURIREVHUYDWLRQKDYHDKLJKO\VLJQLFDQWHIIHFWRQ
HHFHVKHGGLQJDSWLWXGH<RXQJHZHVRI\HDUROGVKHGVLJQLFDQWO\OHVV3WKHLUHHFH
WKDQROGHUHZHV,QFUHDVHRIZRROVKHGGLQJZLWKDJHKDVDOVREHHQUHSRUWHGLQ:LOWVKLUH0HULQR
FURVVHV5DWKLHHWDO$WRQH\HDURIDJHKRJHZHVVKHGOHVV3WKDQEUHHGLQJHZHV
6XFKDGLIIHUHQFHLQHHFHVKHGGLQJDSWLWXGHLQ\RXQJHZHVFDQEHGXHHLWKHUWRJHVWDWLRQDQG
$YDLODEOHDWKWWSVQSWRXORXVHLQUDIUaOHJDUUDRUXSRQUHTXHVWWRWKHDXWKRUDWDQGUHVOHJDUUD#WRXORXVHLQUDIU
$XWKRUVWKDQN$QGUHV/HJDUUDIRUKHOSLQXVLQJWKH70SURJUDPPH


UHFRUGV

&ODVVHVRIIOHHFHVKHGGLQJUDWH
*MKYVI*PIIGIWLIHHMRKMRXLI6SQERIFVIIHGEXIKSVMWIHF]TIVGIRXEKIGPEWWIWSJFSH]WYVJEGI[LIVIIIGI
MWWLIHMREHYPXI[IWVIGSVHWJVSQI[IW
UHSURGXFWLYHDFWLYLW\RUWRERG\JURZWKGHYHORSPHQWDWWKHDJHRIPRQWKVDVWKHGHFLVLRQIRU
WKHDJHRIUVWPDWLQJRUPRQWKVLVFRQGLWLRQHGE\DPLQLPXPOLYHZHLJKWRINJDW
PRQWKVRIDJH%XWLQEUHHGLQJHZHVZKDWHYHUWKHDJHWKHUHZDVQRHIIHFWRIWKHOLWWHUVL]HRQ
HHFHVKHGGLQJ
+LJKKHULWDELOLW\HVWLPDWHRIHHFHVKHGGLQJDSWLWXGHZDVREVHUYHGLQWKH5RPDQH
EUHHG )LJXUH *HQHWLF YDULDELOLW\ RI HHFH VKHGGLQJ DSWLWXGH KDV QHYHU SUHYLRXVO\ EHHQ
UHSRUWHGLQDZRROOHGVKHHS,WRIIHUVRSSRUWXQLWLHVWRLPSOHPHQWVHOHFWLRQOHDGLQJWRDPRXOWLQJ
VKHHSUHTXLULQJQRVKHDULQJDQGWKXVFUHDWLRQRIJHQHWLFSURJUHVVE\LPSURYLQJDGDSWLYHWUDLWV
LQDEUHHGZLWKDKLJKSURGXFWLRQSRWHQWLDO)UDQFRLVHWDO
,Q DGGLWLRQ WR HHFH VKHGGLQJ WKH 5RPDQH EUHHG VKRZV DQRWKHU HHFH DGDSWLYH WUDLW WR EH
VHOHFWHGLQH[WHQVLYHPDQDJHPHQWXQGHUSHUPDQHQWH[SRVXUHRXWGRRUVDQGKDUVKHQYLURQPHQWV
$WELUWKODPEVH[KLELWDKLJKYDULDELOLW\RIFRDWW\SHIURPDORQJKDLU\FRDWWRDYHU\VKRUWZRROO\
FRDWDQGODPEVXUYLYDOUDWHLVUHODWHGWRELUWKFRDWW\SH$OODLQHWDO/DPEVEHDULQJDORQJ
KDLU\GRXEOHFRDWKDYHDKLJKHUVXUYLYDOUDWHWKDQODPEVZLWKDVKRUWZRROO\FRDW7KLVGLIIHUHQFH
LQODPEVXUYLYDOSRLQWVYVFRXOGEHH[SODLQHGE\DOHVVHUWKHUPDOSURWHFWLRQZLWK
KLJKHUKHDWORVVHVDQGDOHVVHUUHVLVWDQFHWRFROGDQGZHWZHDWKHUFRQGLWLRQVLQODPEVEHDULQJD
VKRUWZRROO\FRDW$OODLQHWDOD+LJKKHULWDELOLW\HVWLPDWHVRIERWKELUWKFRDWW\SH
DQGHHFHVKHGGLQJZHUHREVHUYHGEXWWKHUHZHUHQRJHQHWLFFRUUHODWLRQVEHWZHHQWKHVH
WZRHHFHDGDSWLYHWUDLWV$OODLQHWDOEVXJJHVWLQJWKDWGLIIHUHQWJHQHVDUHFRQWUROOLQJ
GHWHUPLQLVPRIHHFHVKHGGLQJDQGELUWKFRDWKDLULQHVV

*PIIGIWLIHHMRKETXMXYHIMR1EVXMRMOLEMVERH1EVXMRMOLEMV
6SQERIFEGOGVSWW
1EXIVMEPERHQIXLSHW
+IRIVEPI\TIVMQIRXEPGSRHMXMSRW
$ RFN RI 0DUWLQLN +DLU HZHV DQG D RFN RI 5RPDQH HZHV EUHHGV ZHUH XVHG DV
H[SHULPHQWDOVXSSRUWDWWKH,15$IDUPRI/D6DSLQLqUH'RPDLQHH[SHULPHQWDOGH%RXUJHV
$QLPDOVDUHUDLVHGLQDEDUQZLWKRSHQVKHG'HSHQGLQJRQJUD]LQJDYDLODELOLWLHVDQGVHDVRQ
DQLPDOVDUHIHGLQGRRUVDQGJRWRSDVWXUHGXULQJWKHGD\IURPVSULQJWRDXWXPQ$VFRQFHUQVWKH
UHSURGXFWLRQF\FOH5RPDQHHZHVZHUHPDWHGIRUWKHUVWWLPHDWWKHDJHRIPRQWKVLQ-XO\DW
WKHDJHRIPRQWKVLQ$SULOIRUWKHVHFRQGWLPHDQGWKHQRQFHD\HDULQ$SULO0DUWLQLN+DLU
HZHVZHUHPDWHGRQFHD\HDULQ-XO\
1EVXMRMO,EMVWLIIT
7KH0DUWLQLN+DLUVKHHSLVDW\SLFDOGRXEOHFRDWKDLUVKHHSZLWKQRZRRORULJLQDWHGIURPWKH
)UHQFK:HVW,QGLHVEXWUHODWHGRULJLQVDQGKLVWRU\WRWKHRWKHUKDLUVKHHSSRSXODWLRQVSUHVHQWLQ
WKH&DULEEHDQ,VODQGVDQG&HQWUDO$PHULFD%DUEDGRV%ODFNEHOO\3HOLEXH\:HVW$IULFDQ'ZDUI
/HLPEDFKHUHWDO7KH0DUWLQLN+DLUVKHHSKDVDKLJKSURGXFWLRQSRWHQWLDOSUROLFDF\
ORZVXVFHSWLELOLW\WRHQGRSDUDVLWHVDQGZDVLQWURGXFHGLQWKHIRUPRIHPEU\RVLQ)UDQFHGXULQJ
WKHQLQHWLHV$VPDOORFNRIHZHVZDVFUHDWHGDWWKH,15$IDUPRI/D6DSLQLqUH'RPDLQHGH
%RXUJHVIRUH[SHULPHQWDWLRQ$VLQWURSLFDOFRQGLWLRQVWKLVKDLUVKHHSDOVRPRXOWVDQGUHQHZV
LWVZKROHHHFHDQQXDOO\IURPVSULQJWRVXPPHULQWHPSHUDWHFRQGLWLRQV
'VIEXMSRSJEFEGOGVSWW1EVXMRMO,EMV6SQERIWLIITTSTYPEXMSR
,Q 0DUWLQLN +DLU UDPV ZHUH PDWHG ZLWK 5RPDQH HZHV WR SURGXFH ) UDPV
VRQVRIWKHGLIIHUHQW0DUWLQLN+DLUVLUHVZHUHPDWHGZLWK5RPDQHHZHVWRSURGXFH
EDFNFURVVHGDQLPDOVERUQLQ'HFHPEHU$OOWKHVHEDFNFURVVHGDQLPDOVZHUHPHDVXUHGIRU
HHFHVKHGGLQJDSWLWXGHLQODWHVSULQJDWPRQWKV7KHUHDIWHUZLWKLQWKLVSRSXODWLRQDQLPDOV
ZHUHDOVRPHDVXUHGIRUHHFHVKHGGLQJDSWLWXGHRQFHD\HDULQODWHVSULQJIRU\HDUVLHDW
DQGPRQWKVRIDJH
$Q LQWHUEDFNFURVV SRSXODWLRQ ZDV DOVR FUHDWHG LQ EDFNFURVV VLUHV ZHUH PDWHG WR
EDFNFURVVHZHVWRFUHDWHLQGLYLGXDOVRIWKHLQWHUEDFNFURVVSRSXODWLRQZKLFKZHUHDOVR
PHDVXUHGIRUHHFHVKHGGLQJDSWLWXGHDWPRQWKVRIDJHLQODWHVSULQJ)OHHFHVKHGGLQJDSWLWXGH
ZDVPHDVXUHGLQDVLPLODUZD\WRWKDWSUHYLRXVO\IRU5RPDQHHZHV
%RRYEPIIGIWLIHHMRKETXMXYHIMR1EVXMRMOLEMV6SQERIFEGOGVSWWERMQEPW
)LJXUHVKRZVHHFHVKHGGLQJDSWLWXGHDWPRQWKVRIDJHLQWKHEDFNFURVVDQLPDOV
RILQGLYLGXDOVVKHGDWOHDVWRIWKHLUHHFHGXULQJVSULQJDQGDQLPDOVVKHGDOOWKHLUHHFH
ZLWKDPHDQHHFHVKHGGLQJUDWHRI1RQJHQHWLFHIIHFWVVXFKDVVH[DJHRIGDPRUOLWWHU
VL]HZHUHWHVWHGEXWDQ\VLJQLFDQWHIIHFWZDVQRWREVHUYHG,QFRQWUDVWDKLJKO\VLJQLFDQWVLUH
HIIHFWZDVREVHUYHG:LWKLQWKHVLUHIDPLO\WRKDOIVLEVVLUHIDPLO\WKHPHDQSURSRUWLRQ
RIHHFHVKHGGLQJYDULHVIURPWREHWZHHQWKHIDPLO\VLUHVVWXGLHG7KHJHQHUDO
SDWWHUQRIZRROVKHGGLQJRYHUERG\UHJLRQVLVVLPLODUWRWKDWREVHUYHGLQWKHSXUH5RPDQHEUHHG


UHFRUGV

*MKYVI*PIIGIWLIHHMRKGEXIKSVMWIHF]TIVGIRXEKIGPEWWIWSJFSH]WYVJEGI[LIVIIIGIMWWLIHEXQSRXLW
SJEKIMR1EVXMRMO,EMV6SQERIFEGOGVSWWERMQEPW
)OHHFH VKHGGLQJ ZDV WKHQ REVHUYHG LQ DQLPDOV RI ERWK VH[HV RYHU FRQVHFXWLYHV \HDUV
'DWDZHUHDQDO\VHGXVLQJ*/0DQGWKHQ9DUFRPS6$6SURFHGXUHVWRGHWHUPLQHYDULDELOLW\DQG
DQLPDOYDULDQFHFRPSRQHQWVRIHHFHVKHGGLQJLQWKHDQLPDOVREVHUYHGWLPHVDW\HDUO\
LQWHUYDOV$JHDQGVH[DJHLQWHUDFWLRQHIIHFWVZHUHREVHUYHG)OHHFHVKHGGLQJLQFUHDVHVZLWKDJH
IURPDUDWHRIDWERWKDQGPRQWKVRIDJHWRDWPRQWKVRIDJHDVSUHYLRXVO\
REVHUYHGLQWKH5RPDQHEUHHGDQG:LOWVKLUHPHULQRFURVVHV5DWKLHHWDO7KHUHZDVQR
VH[HIIHFWDWPRQWKVRIDJHEXWWKHUHDIWHUKLJKO\VLJQLFDQWGLIIHUHQFHVZHUHREVHUYHGDFFRUGLQJ
WRVH[DWDQGPRQWKVRIDJH&RPSDUHGWRPDOHVDKLJKHUDQGDORZHUHHFHVKHGGLQJ
ZHUHREVHUYHGLQIHPDOHVDWDQGPRQWKVRIDJHUHVSHFWLYHO\$VDSRVVLEOHH[SODQDWLRQ
VH[KRUPRQHVDQGRUJHQHVRQWKHVH[XDOFKURPRVRPHFRXOGEHLQYROYHGLQGHWHUPLQLQJHHFH
VKHGGLQJ5HSHDWDELOLW\HVWLPDWHGXVLQJWKH6$69$5&203SURFHGXUHZDV
*PIIGIWLIHHMRKMRXLIMRXIVFEGOGVSWWTSTYPEXMSRSJ1EVXMRMO,EMV6SQERIERMQEPW
)LJXUHVKRZVWKHHHFHVKHGGLQJUDWHLQWKHDQLPDOVRIWKHLQWHUEDFNFURVVSRSXODWLRQ
RILQGLYLGXDOVVKHGDWOHDVWRIWKHLUHHFHGXULQJVSULQJDQGDQLPDOVVKHGDOOWKHLU
HHFH&RPSDUHGWREDFNFURVVDQLPDOVDVPDOOHUSURSRUWLRQRIDQLPDOVVKHGSDUWRIWKHLUHHFH
EXWDODUJHUSDUWVKHGDOOWKHLUHHFH
,QDJUHHPHQWZLWK6OHHZKRVWXGLHGGLIIHUHQWFURVVHVEHWZHHQWKH:LOWVKLUH+RUQDQGWKH
6FRWWLVK%ODFNIDFHDWOHDVWWZRFRPSRQHQWVRIWKHVKHGGLQJSURFHVVFDQEHGLVWLQJXLVKHG
WKHDELOLW\WRVKHGDQGWKHH[WHQWRIVKHGGLQJRUSURSRUWLRQRIWKHERG\DUHDGHHHFHG,QWKH
SUHVHQWZRUNE\FRPSDULQJEDFNFURVVSRSXODWLRQWRSDUHQWDOSXUHEUHHGOLQHVWKHUHLVHYLGHQFH
WKDWJHQHWLFGHWHUPLQLVPRIWKHHHFHVKHGGLQJH[WHQWLVDSRO\JHQLFHIIHFWEXWWKHH[LVWHQFHRI
PDMRUJHQHVIRUWKHDELOLW\WRVKHGFDQQRWEHH[FOXGHG7KHPHDQHHFHVKHGGLQJUDWHREVHUYHG
LQEDFNFURVVDQLPDOVRZQLQJRIWKH5RPDQHJHQHSRROLVFORVHWRH[SHFWHGYDOXHHVWLPDWHRI
WKHVKHGGLQJUDWHLQSDUHQWDOOLQHVDQGLQ0DUWLQLN+DLU5RPDQHEDFNFURVV
0DUWLQLN +DLU DQG 5RPDQH UHVSHFWLYHO\ EXW WKH SURSRUWLRQ RI DQLPDOV WKDW VKHG DW OHDVW D


UHFRUGV

*MKYVI*PIIGIWLIHHMRKGEXIKSVMWIHF]TIVGIRXEKIGPEWWIWSJFSH]WYVJEGI[LIVIIIGIMWWLIHEXQSRXLW
SJEKIMRMRXIVFEGOGVSWW1EVXMRMO,EMV6SQERIERMQEPW
SDUWRIWKHLUHHFHLQEDFNFURVVDQLPDOVLVLQWHUPHGLDWHEHWZHHQWKHWZRSDUHQWDOOLQHV
DQGLQ0DUWLQLN+DLU5RPDQHDQGEDFNFURVVDQLPDOVUHVSHFWLYHO\VXJJHVWLQJD
GHYLDWLRQIURPDGGLWLYLW\ZLWKPDMRUJHQHDQGRUGRPLQDQWHIIHFWVRIWKHDELOLW\WRVKHG
580HIXIGXMSRJSVIIGIWLIHHMRK
,QSDUDOOHOWRWKHVHLQYHVWLJDWLRQVWZRH[SHULPHQWDOGHVLJQVIRU47/GHWHFWLRQRIHHFHVKHGGLQJ
DSWLWXGHWKURXJKZKROHJHQRPHVFDQVZHUHLQLWLDWHGIURP7KHUVWRQHXVLQJWKH5RPDQH
EUHHGSRSXODWLRQDW,15$/D)DJHH[SHULPHQWDOIDUPFRPSULVHVVLUHIDPLOLHVRIKDOIVLEV
VLUHIRU47/GHWHFWLRQRIELUWKFRDWW\SHHHFHVKHGGLQJDQGPDWHUQDOEHKDYLRXUWUDLWV%RLVV\
HWDO:LWKLQWKLVH[SHULPHQWDOGHVLJQDWRWDORIDGXOWHZHVIURPVLUHIDPLOLHV
ZHUHREVHUYHGRQFHD\HDUIRUHHFHVKHGGLQJDSWLWXGHMXVWSULRUWRWKHDQQXDOVKHDULQJDWWKH
HQGRI-XQH
7KHVHFRQGRQHLVEDVHGRQWKH0DUWLQLN+DLU5RPDQHEDFNFURVVSRSXODWLRQDW/D6DSLQLqUH,QUD
H[SHULPHQWDOIDUPDQGFRPSULVHGVLUHIDPLOLHVRIKDOIVLEVVLUHIRU47/GHWHFWLRQRIUHVLVWDQFH
WRSDUDVLWLVPDQGHHFHVKHGGLQJ0RUHQRHWDO$QLPDOVRIWKHVH47/H[SHULPHQWDO
GHVLJQVKDYHEHHQJHQRW\SHGZLWKWKH2YLQH613EHDGFKLS0RUHQRHWDODQGDQDO\VHV
DUHLQSURJUHVVWRGHWHFW47/DQGWKHQWRQHPDSUHOHYDQWJHQHVFRQWUROOLQJHHFHVKHGGLQJ
DSWLWXGHLQWKHVHSRSXODWLRQUHVRXUFHVDVZHOODVELUWKFRDWW\SHLQWKH5RPDQHEUHHG
+IRIXMGWXVEXIKMIWJSVKIRIMRXVSKVIWWMSRSJIIGIWLIHHMRKKIRIMR
XLI6SQERIFVIIH
8QGHU(XURSHDQFRQGLWLRQVZKHUHWKHYDOXHRIZRROLVRIWHQORZHUWKDQVKHDULQJFRVWVDQGRWKHU
FRVWVDVVRFLDWHGZLWKPDQDJLQJZRROVHOHFWLRQIRUHHFHVKHGGLQJLQRUGHUWRVXSSUHVVVKHDULQJ
UHSUHVHQWVDQDOWHUQDWLYHRSSRUWXQLW\IRULPSURYLQJWKHSURWDELOLW\RIVKHHSIDUPLQJ+RZHYHU

DVIRUDQ\RWKHUDGDSWLYHWUDLWVHOHFWLRQVWUDWHJLHVIRUHHFHVKHGGLQJLQWKH5RPDQHEUHHGFRXOG
EHVHOHFWLQJWRJHWKHUZLWKSURGXFWLRQWUDLWVDFFRUGLQJWRWZRGLIIHUHQWVWUDWHJLHV
7KHUVWVWUDWHJ\FRXOGEHWRVHOHFWZLWKLQWKH5RPDQHEUHHGDVDFFRUGLQJWRRXUUHVXOWVDJHQHWLF
YDULDELOLW\ZLWKDKLJKKHULWDELOLW\HVWLPDWHRIHHFHVKHGGLQJDSWLWXGHZDVREVHUYHGRIIHULQJ
RSSRUWXQLWLHV IRU ZLWKLQEUHHG VHOHFWLRQ OHDGLQJ WR D PRXOWLQJ VKHHS UHTXLULQJ QR VKHDULQJ
+RZHYHULWLVQRWHDV\WRPHDVXUHWKLVWUDLWDQGSUHYDOHQFHRIWRWDOHHFHVKHGGLQJLVORZ$Q
DOWHUQDWLYHPHWKRGFRXOGEHWRLQWURJUHVVJHQHSRROFRQWUROOLQJHHFHVKHGGLQJIURPWKH0DUWLQLN
+DLUDKDLUVKHHS
,QRUGHUWRYDORULVHUHVXOWVREVHUYHGXSWRQRZRQHHFHVKHGGLQJLQERWKWKH5RPDQHEUHHGDQG
WKH0DUWLQLN+DLU5RPDQHEDFNFURVVSRSXODWLRQDQH[SHULPHQWDOGHVLJQDLPHGDWLQWURJUHVVLQJ
JHQHSRROIRUHHFHVKHGGLQJIURPWKH0DUWLQLNKDLUEUHHGLQWRWKH5RPDQHEUHHGWKURXJK
VXFFHVVLYHEDFNFURVVLQJJHQHUDWLRQVZDVLQLWLDWHGLQ7KHH[SHULPHQWDOGHVLJQLVVLPLODU
WRWKRVHFRPELQLQJGHWHFWLRQDQGLQWURJUHVVLRQ47/LQRXWEUHGSRSXODWLRQVUHFHQWO\SURSRVHG
E\<D]GLHWDODVDQHIFLHQWPHWKRGIRUVDYLQJWLPHDQGFRVWLQDQLQWURJUHVVLRQ
SURFHVV)RULQVWDQFH0DUWLQLN+DLU5RPDQHEDFNFURVVUDPVZLWKWRWDORUQHDUWRWDOHHFH
VKHGGLQJ SKHQRW\SH IURP WKH 47/ H[SHULPHQWDO GHVLJQ GHVFULEHG DERYH ZHUH PDWHG ZLWK
KRJ5RPDQHHZHVH[SUHVVLQJSDUWLDOHHFHVKHGGLQJDWPRQWKVRIDJHLQODWHVSULQJ
0HDVXUHPHQWVPDGHZLWKKRJHZHVVKRZHGWKDWDERXWRIKRJ5RPDQHHZHVVKHGSDUW
RIWKHLUHHFHDWPRQWKVRIDJH6LPLODUPDWLQJVFKHPHVZLOODOVREHXVHGIRUSURGXFLQJWKH
ODVWEDFNFURVVLQJJHQHUDWLRQ7KHXVHRIPROHFXODULQIRUPDWLRQZLWK47/LQWURJUHVVLRQZLOO
EHYHU\KHOSIXOLQWKHQHDUIXWXUHDV47/GHWHFWLRQWKURXJKDZKROHJHQRPHVFDQZLWKWKH
2YLQH613EHDGFKLSLVLQSURJUHVVLQERWKWKH5RPDQHEUHHGDQGWKH0DUWLQLN+DLU5RPDQH
EDFNFURVVSRSXODWLRQ
'SRGPYWMSRW
*HQHWLFYDULDELOLW\RIHHFHVKHGGLQJZDVLQYHVWLJDWHGLQWKH5RPDQHEUHHGDQGD5RPDQH
0DUWLQLNKDLUEDFNFURVVSRSXODWLRQ7KHKLJKKHULWDELOLW\HVWLPDWHRIHHFHVKHGGLQJREVHUYHG
LQWKH5RPDQHEUHHGRIIHUVRSSRUWXQLWLHVWRLPSOHPHQWVHOHFWLRQOHDGLQJWRDPRXOWLQJVKHHS
UHTXLULQJQRVKHDULQJDVDQHZDGDSWLYHWUDLWWRJHWKHUZLWKSURGXFWLRQWUDLWVLQWKLVEUHHGNQRZQ
WRKDYHDKLJKSURGXFWLYHSRWHQWLDO
'HVSLWHKLJKJHQHWLFYDULDELOLW\RIHHFHVKHGGLQJLQWKH5RPDQHEUHHGLWZDVSURSRVHGWR
LQFUHDVHHIFLHQF\E\LQWURJUHVVLQJDPRXOWLQJJHQHSRROZLWKWKHXVHRIPROHFXODUPDUNHUVIURP
WKH0DUWLQLN+DLUEUHHGDKDLUVKHHSZLWKQRZRROGXHWRORZSUHYDOHQFHRIWRWDOHHFHVKHGGLQJ
LQWKH5RPDQHEUHHG7KHH[SHULPHQWDOGHVLJQVFKHPHZLOOFRPELQHGHWHFWLRQDQGLQWURJUHVVLRQ
RI47/IRUHHFHVKHGGLQJLQWKH5RPDQHEUHHG

6IJIVIRGIW
$OODLQ'')RXOTXLp')UDQFRLV3$XWUDQ%%LEpDQG-%RXL[7KHELUWKFRDWW\SHDQLPSRUWDQWFRPSRQHQWRI
ODPEVXUYLYDOLQWKH)UHQFK5RPDQHEUHHGUDLVHGXQGHUSHUPDQHQWH[SRVXUHRXWGRRUV,Q3URFHHGLQJV($$3
%DUFHORQD$XJXVW$EVWUDFWQR
$OODLQ'')RXOTXLp')UDQFRLV%3HQD3$XWUDQ%%LEpDQG-%RXL[D%LUWKFRDWW\SHDVDQLPSRUWDQW
FRPSRQHQWRIODPEVXUYLYDOIRUH[WHQVLYHO\PDQDJHGVKHHSLQWKH5RPDQHEUHHGJHQHWLFYDULDELOLW\DQG47/
GHWHFWLRQ H[SHULPHQWDO GHVLJQ ,Q '$OODLQ HG 3URFHHGLQJV WK:RUOG 0HULQR &RQIHUHQFH 5DPERXLOOHW
)UDQFH0D\FRPQRSS
$OODLQ'')RXOTXLp')UDQFRLV%3HQD3$XWUDQ%%LEpDQG-%RXL[E%LUWKFRDWW\SHDQGHHFHVKHGGLQJ
DVDGDSWDWLYHWUDLWVIRUH[WHQVLYHO\PDQDJHGVKHHSJHQHWLFYDULDELOLW\DQG47/GHWHFWLRQH[SHULPHQWDOGHVLJQ,Q
3URFHHGLQJVWK:RUOG&RQJUHVVRQ*HQHWLFV$SSOLHGWR/LYHVWRFN3URGXFWLRQ/HLS]LJ*HUPDQ\$XJXVW
FRPQRSS
%RLVV\$6/LJRXW')RXOTXLp$*DXWLHU&0RUHQR('HOYDO')UDQoRLVDQG-%RXL[$QDO\VHJpQpWLTXH
GHODUpDFWLYLWpFRPSRUWHPHQWDOHFKH]OHVRYLQVSRXUXQHVWUDWpJLHFRPELQDQWELHQrWUHHWSURGXFWLRQ*HQHWLFVRI
EHKDYLRXUDOUHDFWLYLW\LQVKHHSDVWUDWHJ\IRUFRPELQLQJDQLPDOZHOIDUHDQGHIFLHQF\RISURGXFWLRQ5HQFRQWUHV
5HFKHUFKHV5XPLQDQWV
%RXL[-0-DFTXLQ')RXOTXLp3$XWUDQ3*XLOORXHW'+XEHUWDQG%%LEH*HQHWLFHIIHFWVRQVKHHS
SURGXFWLRQ LQ KDUVK HQYLURQPHQW DQG H[WHQVLYH PDQDJHPHQW V\VWHP ,Q 3URFHHGLQJV WK:RUOG &RQJUHVV RQ
*HQHWLFV$SSOLHGWR/LYHVWRFN3URGXFWLRQ0RQWSHOOLHU)UDQFH$XJXVW&RPPXQLFDWLRQ1

%\NRYD*/7KHHIIHFWRIVHDVRQRQWKHHHFHRI5RPDQRYVKHHSRIYDULRXVFODVVHV7UXG\<DURVODYVNRJR
1DXFKQR,VVOHGRYDWHOVNRJR,QVWLWXWD=KLYRWQRYRGVWYDL.RUPRSURL]YRGVWYD&$%,
&RQLQJWRQ-6KHHSEUHHGLQJSURGXFWLRQDQGFRQVHUYDWLRQJUD]LQJLQWKH8.$QH[DPSOHIURP1RUWKHUQ(XURSH
,Q'$OODLQHG3URFHHGLQJVWK:RUOG0HULQR&RQIHUHQFH5DPERXLOOHW)UDQFH0D\&RPQR
)UDQoRLV'$%RLVV\3-DFTXLHW'$OODLQ%%LEH55XSS&0RUHQR/%RGLQ'+D]DUGDQG-%RXL[
*HQHWLFVRIDGDSWDWLRQWUDLWVIRUKDUVKHQYLURQPHQWLQVKHHS,Q3URFHHGLQJVWK:RUOG&RQJUHVVRQ*HQHWLFV
DSSOLHGWR/LYHVWRFN3URGXFWLRQ/HLS]LJ*HUPDQ\$XJXVWFRPQRSS
/HLPEDFKHU ) *$OH[DQGUH 0 0DWKLHX 0 1DYHV DQG 1 0DQGRQQHW 7KH 0DUWLQLN +DLU VKHHS D KLJK
SRWHQWLDOEUHHGWRSURGXFHPXWWRQLQWKHWURSLFV,Q'$OODLQHG3URFHHGLQJVWK:RUOG0HULQR&RQIHUHQFH
5DPERXLOOHW)UDQFH0D\&RPQR
0RUHQR&/*UXQHU$6FDOD/0XUD/6FKLEOHU<$PLJXHV76HFKL3-DFTXLHW')UDQoRLV66HFKL$5RLJ
6&DVX)%DULOOHW&%UXQHO-%RXL[$&DUWDDQG55XSS47/UHVLVWDQFHWRLQWHUQDOSDUDVLWHVLQWZR
GHVLJQVEDVHGRQQDWXUDODQGH[SHULPHQWDOFRQGLWLRQVRULQIHFWLRQV,Q'$OODLQHG3URFHHGLQJVWK:RUOG
FRQJUHVVRQJHQHWLFVDSSOLHGWROLYHVWRFNSURGXFWLRQ%HOR+RUL]RQWH0*%UD]LO&RPQR&'5RP
$UWLFOHBBSGI
0RUHQR&%6HUYLQ7)DUDXW&.ORSS55XSS30XOVDQW&5REHUW*UDQLHU)%DULOOHW&'HOPDV-%RXL['
)UDQFRLV'$OODLQ(0DQIUHGL/%RGLQ-0(OVHQ'5REHOLQ%0DQJLQ05$XUHO)%RXYLHU'&DODYDV
06DQFULVWREDO3-DFTXLHW*)RXFUDV$%RLVV\DQG$/HJDUUD6KHHS61347/8WLOLVDWLRQGXQHSXFH
613SRXUFDUWRJUDSKLHUQHPHQWGHV47/DIIHFWDQWGHVFDUDFWqUHVGHSURGXFWLRQGHUpVLVWDQFHDX[PDODGLHVHW
GHFRPSRUWHPHQWFKH]OHVRYLQV8VHRID.613DUUD\IRU47/GHWHFWLRQDQGQHPDSSLQJSURGXFWLRQUHVLVWDQFH
WRGLVHDVHDQGEHKDYLRXUWUDLWVLQVKHHS5HQFRQWUHV5HFKHUFKHV5XPLQDQWV
5DWKLH.$0/7LHUQH\DQG-&0XOGHU$VVHVVLQJ:LOWVKLUH+RUQ0HULQRFURVVHV:RROVKHGGLQJEORZI\
VWULNHDQGZRROSURGXFWLRQWUDLWV$XVWUDOLDQ-RXUQDORI([SHULPHQWDO$JULFXOWXUH
5LFRUGHDX*/7FKDPLWFKLDQ-&%UXQHO7&1JX\HQDQG')UDQoRLV/DUDFHRYLQH,15$XQH[HPSOH
GHVRXFKHV\QWKpWLTXH7KH,15$VKHHSEUHHGDQH[DPSOHRIDFRPSRVLWHOLQH3URGXFWLRQV$QLPDOHVKRUV
VpULH(OpPHQWVGHJpQpWLTXHTXDQWLWDWLYH
5RXJHRW-(YROXWLRQGHODWRLVRQHQUHODWLRQDYHFOHVFDUDFWpULVWLTXHVWH[WLOHV&KDQJHVLQFRDWVWUXFWXUHDQG
FRPSRVLWLRQLQUHODWLRQWRWH[WLOHFKDUDFWHULVWLFV%XOOHWLQ6FLHQWLTXH,7)

5\GHU0/&KDQJHVLQWKHHHFHRIVKHHSIROORZLQJGRPHVWLFDWLRQZLWKDQRWHRQWKHFRDWRIFDWWOH,Q3-

8FNRDQG*:'LPEOHE\HGV7KHGRPHVWLFDWLRQDQGH[SORLWDWLRQRISODQWVDQGDQLPDOV$OGLQH3XEOLVKLQJ
&KLFDJR,/86$SS
5\GHU0/0HGLHYDOVKHHSDQGZRROW\SHV7KH$JULFXOWXUDO+LVWRU\5HYLHZ
6OHH-)OHHFHVKHGGLQJVWDSOHOHQJWKDQGHHFHZHLJKWLQH[SHULPHQWDO:LOWVKLUH+RUQ6FRWWLVK%ODFNIDFHVKHHS
FURVVHV-RXUQDORI$JULFXOWXUDO6FLHQFH
9LSRQG-(DVLFDUHVKHHSV\VWHPV6$&6HOHFW6HUYLFHV3HQLFXLN6FRWODQG
<D]GL0$6RQHVVRQ-:RROOLDPVDQG70HXZLVVHQ&RPELQHGGHWHFWLRQDQGLQWURJUHVVLRQRI47/TXDQWLWDWLYH
WUDLWORFLXQGHUO\LQJGHVLUDEOHWUDLWV-RXUQDORI$QLPDO6FLHQFH
<D]GL0+$6RQHVVRQ-:RROOLDPVDQG70HXZLVVHQ&RPELQHGGHWHFWLRQDQGLQWURJUHVVLRQRI47/LQ
RXWEUHGSRSXODWLRQV*HQHWLFV6HOHFWLRQ(YROXWLRQ
=\JR\LDQQLV'6KHHSSURGXFWLRQLQWKHZRUOGDQGLQ*UHHFH6PDOO5XPLQDQW5HVHDUFK

7YVM,YEGE]ETLIRSX]TIMRLIVMXERGIMREPTEGE:MGYKRE
TEGSW
&5HQLHUL$9DOERQHVL0$QWRQLQL9/D0DQQD7+XDQFD1$SD]D63UHVFLXWWLQL
DQG0$VSDUULQ
6FKRRORI(QYLURQPHQWDO6FLHQFHV8QLYHUVLW\RI&DPHULQR9LD*HQWLOH,,,GD9DUDQRVQF
&DPHULQR,WDO\FDUORUHQLHUL#XQLFDPLW
,1,$,//3$3XQR5LQFRQDGD6DOFHGR3XQR3HUX
'HSDUWPHQWRI3K\VLRORJLFDO6FLHQFHV8QLYHUVLW\RI3LVD9LD6DQ=HQR3LVD,WDO\
0LFKHOO\&,$6$)XQGR0DOONLQL3HUX
%FWXVEGX
7KH6XUL+XDFD\DSKHQRW\SHLQKHULWDQFHLQDOSDFDZDVWHVWHGRQWZRLQGHSHQGHQW3HUXYLDQ
VRXUFHVRIUHFRUGVWKH5HJLVWU\RI0DOONLQLIDUPRIIVSULQJE\6XULVLUH6XULGDPIURP
SDWHUQDOKDOIVLEIDPLOLHVDQGRIIVSULQJE\+XDFD\DVLUH+XDFD\DGDPIURPSDWHUQDO
KDOIVLEIDPLOLHVDQGWKHUHVXOWVRIWKH4XLPVDFKDWD,1,$,/3$3XQRH[SHULPHQWDOWULDOWZR
UHFLSURFDOH[SHULPHQWDOWHVWFURVVHVLQYROYLQJDWRWDORIXQUHODWHGPDOHVDQGXQUHODWHG
IHPDOHV7KHGDWDVXSSRUWDJHQHWLFPRGHOLQZKLFKWZROLQNHGORFLPXVWVLPXOWDQHRXVO\EH
KRPR]\JRXVIRUUHFHVVLYHDOOHOHVLQRUGHUWRSURGXFHWKH+XDFD\DSKHQRW\SH7KHHVWLPDWHG
UHFRPELQDWLRQUDWHEHWZHHQWKHVHORFLZDV&/ 7KHELUWKRI6XUL
RIIVSULQJIURP+XDFD\D[+XDFD\DPDWLQJLVH[SODLQHGE\DQHZGRPLQDQWPXWDWLRQRQVRPH
JHUPLQDOOLQHVRI+XDFD\DDQLPDOV7KHGLUHFWPXWDWLRQUDWHFDQEHHVWLPDWHGDW
.H\ZRUGVDOSDFD6XUL+XDFD\DVHJUHJDWLRQDQDO\VLVOLQNDJH
-RXVSHYGXMSR
7KLV SDSHU VXPPDULVHV WKH UHVXOWV RI WKH UHVHDUFK RQ 6XUL+XDFD\D SKHQRW\SHV LQKHULWDQFH
FDUULHG RXW DW WKH ,WDOLDQ 8QLYHUVLW\ RI &DPHULQR 6FKRRO RI (QYLURQPHQWDO 6FLHQFHV LQ
FROODERUDWLRQZLWKWKH3HUXYLDQSULYDWH0LFKHO*URXSDQGWKH3HUXYLDQ1DWLRQDO,QVWLWXWHIRU
$JURQRPLF,QQRYDWLRQ,1,$,//3$3XQR7KHUHVXOWVDUHSXEOLVKHGLQ5HQLHULHWDO
DQG3UHVFLXWWLQLHWDO
8LIMRLIVMXERGISJ7YVM,YEGE]ETLIRSX]TIWEVIZMI[
7KHLQKHULWDQFHPRGHRIWKH6XUL+XDFD\DSKHQRW\SHLVXQFOHDU$K\SRWKHVLVRI6XULUHFHVVLYLW\
KDVEHHQDEDQGRQHGLQIDYRXURIDPRUHZLGHO\DFFHSWHGVLPSOH6XULGRPLQDQFH9HODVFR
SURSRVHGDVLQJOHORFXVPRGHOZLWKDGRPLQDQWDOOHOHIRU6XUL6LPLODUO\3RQ]RQLHWDO
VXJJHVWHGDPRGHOZLWKDVLQJOHJHQHZLWKWZRDOOHOHVWKRXJKWKH\DOVRQRWHGWKDWWKHGDWD
ZHUHFRPSDWLEOHZLWKDPRGHOLQZKLFKWKHWUDLWZDVFRQWUROOHGE\DJURXSRIFORVHO\OLQNHG
DOOHOHVKDSORW\SH%D\FKHOLHUWHVWHGWKUHHLQKHULWDQFHK\SRWKHVHVXVLQJWKHUHFRUGVRI
WKH$XVWUDOLDQ$OSDFD$VVRFLDWLRQ+HUG%RRNWKHPRGHORIDVLQJOHJHQHZLWKWKUHHDOOHOHVFDQ
EHUHMHFWHGZKHUHDVWKHWZRJHQHPRGHOLVPRUHVXLWDEOHWKDQWKHRQHORFXVPRGHO)LQDOO\
6SRQHQEHUJ SURSRVHG D VLQJOH DXWRVRPDO GRPLQDQW JHQH ZLWK DQ DGGLWLRQDO JHQHWLF
PHFKDQLVPWKDWFDQVXSSUHVVWKH6XULSKHQRW\SHLQVRPHDQLPDOV,WVKRXOGEHQRWHGWKDW6XUL
RIIVSULQJKDYHEHHQREVHUYHGDPRQJWKHRIIVSULQJRI+XDFD\D+XDFD\DFURVVHV

)\TIVMQIRXEPHIWMKRW
7ZRVHWVRIUHFRUGVZHUHDQDO\VHG7KHUVWVRXUFHLVWKH5HJLVWU\UHFRUGRIWKH0DOONLQLIDUP
WKHSULYDWHIDUPRI0LFKHOO*URXS,QWKLVFDVHIHPDOHVDQGPDOHVRIIVSULQJE\
6XULVLUH6XULGDPIURPSDWHUQDOKDOIVLEIDPLOLHVDQGIHPDOHVDQG
PDOHVRIIVSULQJE\+XDFD\DVLUH+XDFD\DGDPIURPSDWHUQDOKDOIVLEIDPLOLHVERUQRYHU
\HDUVDQGZHUHDQDO\VHG
7KHVHFRQGVHWRIGDWDZDVUHFRUGHGLQWKHFURVVHVFDUULHGRXWDWWKHH[SHULPHQWDOVWDWLRQRI
WKH,1,$ORFDWHGLQ4XLPVDFKDWD3HUX7KHWULDOLQYROYHGDWRWDORIXQUHODWHGPDOHVDQG
XQUHODWHGIHPDOHV7ZRUHFLSURFDOH[SHULPHQWDOWHVWFURVVHVZHUHFDUULHGRXW6XULPDOHV
+XDFD\DIHPDOHVDQG+XDFD\DPDOHV6XULIHPDOHVWRWDO6XULDQLPDOVDQGWRWDO+XDFD\D
DQLPDOV
7MRKPIKIRIL]TSXLIWMW
7KHVLQJOHJHQHK\SRWKHVLVZDVWHVWHGLQERWKGDWDVHWV,QWKH0DOONLQLUHFRUGVDVVXPLQJWKDW
WKHSHUFHQWDJHRIWKHWZRIHPDOHJHQRW\SHVLVWKHVDPHWKHH[SHFWHGVHJUHJDWLRQ6XUL
+XDFD\DLQGLYLGXDOZDVWHVWHG7KHUHVXOWVDUHSUHVHQWHGLQ7DEOH
:LWKWKHH[FHSWLRQRIWKHRIIVSULQJRIPDOHLQDOOWKHUHPDLQLQJVHJUHJDWLRQVWKH
GLIIHUHQFHVEHWZHHQWKHREVHUYHGDQGWKHH[SHFWHGIUHTXHQFLHVDUHQRWVWDWLVWLFDOO\VLJQLFDQW
36LPLODUUHVXOWVZHUHREWDLQHGIURPDJJUHJDWHGGDWDDQDO\VLVWKHKHWHURJHQHLW\
*WHVWLQGLFDWHVWKDWWKHWRWDO**7 3 DVZHOODVLWVFRPSRQHQWV*3
3 *+ 3
&RQVLGHULQJUVWWKH6XULPDOHVLQWKH4XLPVDFKDWDH[SHULPHQWDOWULDO7DEOHIRUWKHHLJKW
VHJUHJDWLQJDQLPDOVLWZDVSRVVLEOHWRHVWLPDWHWKHVHJUHJDWLRQUDWLR5RIWKH+XDFD\DSKHQRW\SH
DPRQJWKHLURIIVSULQJDVVXPLQJDWUXQFDWHGELQRPLDOGLVWULEXWLRQ:LWKWKLVPRGHOWKHPD[LPXP
OLNHOLKRRGHVWLPDWHRI5ZDVZLWK&/ &OHDUO\DYDOXHRI5
ZKLFKLVH[SHFWHGIRUDWHVWFURVVRIDUHFHVVLYHVLQJOHORFXVPRGHOFDQEHUHMHFWHG
:LWKUHJDUGWRWKHUHFLSURFDOFURVVDVLPLODUDQDO\VLVFDQQRWEHFDUULHGRXW:KHQRQHRIIVSULQJ
RQO\FDQEHREWDLQHGIURPD6XULDQLPDOWKHIHPDOHLQWKLVFDVHWKHREVHUYHGVHJUHJDWLRQUDWLR
IRUDQXPEHURIDQLPDOVRIXQNQRZQJHQRW\SHLVDIXQFWLRQRIWZRSDUDPHWHUVWKHSUREDELOLW\
5WKDWDVHJUHJDWLQJDQLPDOJHQHUDWHVD+XDFD\DRIIVSULQJHJWKH0HQGHOLDQWUDQVPLVVLRQ
SUREDELOLW\DQGWKHSUREDELOLW\+WKDWDQDQLPDOLVVHJUHJDWLQJ$SUDFWLFDODSSURDFKFRXOG
EHWRHVWLPDWHWKHYDOXHWKDWHDFKSDUDPHWHUDVVXPHVRQFHWKHRWKHUSDUDPHWHULV[HGRQD
YDOXHUHSUHVHQWLQJDUHDVRQDEOHFKRLFH$VVXPLQJWKHVHJUHJDWLRQUDWLR5 WKHSUREDELOLW\
WKDWD6XULIHPDOHPDWHGWRD+XDFD\DPDOHSURGXFHVD+XDFD\DRIIVSULQJIRUDVLPSOHUHFHVVLYH
JHQHWLFPRGHOWKHPD[LPXPOLNHOLKRRGHVWLPDWHRI+LV&RQYHUVHO\LIZHDVVXPHWKDW
+DPRQJWKH6XULIHPDOHVKDVWKHVDPHYDOXHDVWKDWREVHUYHGDPRQJ6XULPDOHV RU
WKHPD[LPXPOLNHOLKRRGHVWLPDWHRI5LV7KHVLPLODULW\RIWKLVODVWYDOXHZLWKWKDW
HVWLPDWHGIRUWKHFURVVHVRI6XULPDOHVLVFHUWDLQO\LQWHUHVWLQJ7KHUHVXOWVDUHIRUWKHUHMHFWLRQ
RIWKHVLQJOHORFXVUHFHVVLYHPRGHOIRUWKH+XDFD\DSKHQRW\SH

8EFPI3FWIVZIHERHI\TIGXIHJVIUYIRGMIWSJ7YVM7YVMWIKVIKEXMRKJEQMPMIWMREXIWXIHL]TSXLIWMW
1EPIW

4SSPIH
3JJWTVMRK

3FWIVZIHJVIUYIRG]
)\TIGXIHJVIUYIRG]
7YVM
,YEGE]E
7YVM
,YEGE]E

+EHN

%GGSVHMRKXSXLIJSVQYPEWYKKIWXIHF]%RHVIWIR
%HNYWXIH+ZEPYIWEGGSVHMRKXS;MPPMEQWGSVVIGXMSR
(SYFPIKIRIWMRHITIRHIRXWIKVIKEXMSRITMWXEW]
7KUHHLQGHSHQGHQWWZRORFLWZRSKHQRW\SHK\SRWKHVLVZHUHWHVWHGWKURXJKWKH0DOONLQLUHFRUGV
,Q WKH VHJUHJDWLRQ K\SRWKHVLV IRU GXSOLFDWH 6XUL GRPLQDQW JHQH DFWLRQ 7DEOH WZR
SURJHQLHV WKH RIIVSULQJ RI PDOHV DQG ERWK ZLWK DQ H[FHVV RI +XDFD\D DQG D
ORZQXPEHURI6XULVKRZHGVLJQLFDQWO\GLIIHUHQWUHVXOWVWKDQH[SHFWHG3 DQG
UHVSHFWLYHO\ 7KH UHVXOWLQJ KHWHURJHQHLW\ * LV FOHDUO\ QRW VLJQLFDQW *+ 3
LQGLFDWLQJWKDWPRVWRIWKHGHYLDWLRQVIURPH[SHFWDWLRQRIWKHSURJHQLHVDUHLQWKHVDPHGLUHFWLRQ
DQGDUHQRWVLJQLFDQWO\GLIIHUHQWIURPHDFKRWKHU7KHSRROHG*KDVDKLJKO\VLJQLFDQWYDOXH
*3 3DQGWKHWRWDO*VKRZVDERUGHUOLQHYDOXH*7 3
,QWKHVHJUHJDWLRQK\SRWKHVLV7DEOHIRUGRPLQDQWVXSSUHVVLRQHSLVWDVLVWKHGRPLQDQW
JHQHIRU6XULLVVXSSRVHGWRPDVNWKHJHQHVDWWKH+XDFD\DORFXVWKUHHSURJHQLHVWKHRIIVSULQJ
RIPDOHVDQGHDFKZLWKDQH[FHVVRI6XULDQGDORZQXPEHURI+XDFD\D
GLVSOD\HGVLJQLFDQWO\GLIIHUHQWUHVXOWVWKDQH[SHFWHG3 DQGUHVSHFWLYHO\
$OWKRXJKQRQHRIWKHUHPDLQLQJVHJUHJDWLRQVZHUHVLJQLFDQWO\GLIIHUHQWIURPWKHH[SHFWHG
RQHWKHLQGLYLGXDO*WHVWVVKRZDSUREDELOLW\RI3PRVWRIWKHPGHYLDWHLQWKH
VDPHGLUHFWLRQDQGKHQFHWKHUHVXOWLQJKHWHURJHQHLW\*LVFOHDUO\QRWVLJQLFDQW*+
3 7KH SRROHG IUHTXHQFLHV VKRZ WKLV GHYLDWLRQ FOHDUO\ DQG EHLQJ EDVHG RQ D ODUJHU
VDPSOHVL]H\LHOGDKLJKO\VLJQLFDQWYDOXHRI**3 3 :KHQDOOWKHLQGLYLGXDO

8EFPI3FWIVZIHRYQFIVSJ7YVMERH,YEGE]ESJJWTVMRKMRVIGMTVSGEP7YVM,YEGE]EGVSWWMRK
796-7MVIW
,YEGE]E
7YVM
8SXEP
7
7
7
7
7
7
7))-
7))-
773
8SXEP

,9%'%=%7MVIW
,YEGE]E
7YVM
8SXEP
7
7
71
7
7
7
7
7
8SXEP
+VERHXSXEP

*ZHUHDGGHGWRJHWKHUWRREWDLQDWRWDO*KRZHYHUWKHWHVW\LHOGHGDYDOXHVOLJKWO\DERYHWKH
FULWLFDORQH*7 3
$FFRUGLQJWRWKHVHJUHJDWLRQK\SRWKHVLVIRUFRPSOHPHQWDU\JHQHDFWLRQWZRJHQHVDUH
UHTXLUHGIRUWKH+XDFD\DSKHQRW\SHSURJHQLHVRXWRIGLVSOD\HGVLJQLFDQWO\GLIIHUHQW
UHVXOWV WKDQ H[SHFWHG 3 EHFDXVH RI DQ H[FHVV RI 6XUL DQG D ORZ QXPEHU RI
+XDFD\DFRPSDUHGWRWKRVHH[SHFWHG7DEOH$VDOOWKHVHJUHJDWLRQVGHYLDWHLQWKHVDPH
GLUHFWLRQWKHUHVXOWLQJKHWHURJHQHLW\*LVFOHDUO\QRWVLJQLFDQW*+ 3 7KH
SRROHG*LQYLHZRIWKHFRQVLVWHQWWUHQGLQIDYRXURI6XULLVKLJKO\VLJQLFDQW*3
3DQGWKHWRWDO**7 3LVKLJKO\VLJQLFDQWDVZHOO
2Q WKH EDVLV RI WKH WRWDO * YDOXH RQO\ WKH ODWWHU VHJUHJDWLRQ K\SRWKHVLV FDQ EH FRPSOHWHO\
UHMHFWHG WKH ERUGHU OLQH YDOXHV RI WKH WRWDO* UHVXOWLQJ IURP ERWK WKH WZRJHQH WZRDOOHOHV
GXSOLFDWHGRPLQDQWJHQHVDQGGRPLQDQWVXSSUHVVRUJHQHVPRGHOVGRQRWSURYLGHDQ\HYLGHQFH
HLWKHULQIDYRXURUDJDLQVWWKHDQGWKHVHJUHJDWLRQK\SRWKHVHV
8[SPMROIHKIRIW
$FORVHUH[DPLQDWLRQRIWKHUHVXOWVRIWKHFURVV6XULPDOHV+XDFD\DIHPDOHVLQWKH4XLPVDFKDWD
H[SHULPHQWDOWULDO7DEOHUHYHDOVWKDWWKHVHJUHJDWLRQUDWLRVHHPVWREHKHWHURJHQHRXVDPRQJ
GLIIHUHQWPDOHVWKHH[WUHPHVEHLQJWKHWZRPDOHV6DQG662ZLWKRQH+XDFD\DLQ
RIIVSULQJDQG+XDFD\DLQRIIVSULQJUHVSHFWLYHO\DQGRQWKHRSSRVLWHVLGHWKHWZRPDOHV

1EPIW

4SSPIH
3JJWTVMRK

3FWIVZIHJVIUYIRG]
)\TIGXIHJVIUYIRG]
7YVM
,YEGE]E
7YVM

+ EHN

,YEGE]E

6DQG6ZLWKVHYHQ+XDFD\DLQRIIVSULQJDQGIRXU+XDFD\DLQRIIVSULQJ
UHVSHFWLYHO\,QIDFWWKH*VTXDUHVWDWLVWLFVRIWKHFRQWLQJHQF\WDEOHZHUHKLJKO\VLJQLFDQWIRU
KHWHURJHQHLW\*VTXDUH GI37KLVUHVXOWMXVWLHGDQDQDO\VLVLQZKLFKWZR
KLHUDUFKLFDOPRGHOVZHUHFRQWUDVWHGWKHPRGHOLQZKLFKDVLQJOHSDUDPHWHU5ZDVFRPPRQ
WRDOOPDOHVDPRGHOLQZKLFKVRPHPDOHVVHJUHJDWHG+XDFD\DRIIVSULQJDWUDWLR5DQGWKH
RWKHUPDOHVVHJUHJDWHGDWUDWLR57KHPD[LPXPOLNHOLKRRGHVWLPDWHRI5LQWKHUVWFDVHKDV
DOUHDG\EHHQVKRZQ5 ORJOLNHOLKRRG )RUWKHVHFRQGPRGHORQO\WKHHLJKW
VLUHVZLWKDWOHDVWRQH+XDFD\DRIIVSULQJZHUHLQFOXGHGWKHFDOFXODWHGPD[LPXPOLNHOLKRRG
YDOXHVHSDUDWHGWKHUVWIRXUPDOHVZLWKDQHVWLPDWHRI5 IURPWKHRWKHUIRXUPDOHV
ZLWKDQHVWLPDWHRI5 DQGWRWDOORJOLNHOLKRRG 6LQFHPLQXVWZLFHWKHORJ
OLNHOLKRRGGLIIHUHQFHEHWZHHQDPRGHODQGDPRUHJHQHUDOPRGHOLVDSSUR[LPDWHO\GLVWULEXWHGDV
ZLWKGHJUHHVRIIUHHGRPGHWHUPLQHGE\WKHGLIIHUHQFHLQWKHQXPEHURIHVWLPDWHGSDUDPHWHUV
RQHLQWKHSUHVHQWFDVHWKHUVWPRGHOZDVUHMHFWHGLQIDYRXURIWKHVHFRQG3
$ K\SRWKHVLV WKDW FRXOG H[SODLQ WKHVH XQH[SHFWHG UHVXOWV LV WKDW WKH +XDFD\D SKHQRW\SH LV
GHWHUPLQHG E\ WKH MRLQW KRPR]\JRVLW\ IRU UHFHVVLYH DOOHOHV DW WZR OLQNHG ORFL DQG WKH 6XUL
SKHQRW\SH LV GHWHUPLQHG E\ WKH SUHVHQFH RI D GRPLQDQW DOOHOH DW HLWKHU ORFXV 7KH GRXEOH
KHWHUR]\JRXVDQLPDOVFDQEHHLWKHU$%DE&LVRU$ED%7UDQVLIWKHWZRORFLDUHWLJKWO\
OLQNHGRQO\WKHUVWGLSORW\SHFDQVHJUHJDWH+XDFD\DRIIVSULQJLQDWHVWFURVVDWDUDWLR
DQGWKHPRGHOLVLQGLVWLQJXLVKDEOHIURPDVLQJOHORFXVUHFHVVLYHPRGHO,IRQWKHRWKHUKDQG

1EPIW

4SSPIH
3JJWTVMRK

3FWIVZIHJVIUYIRG]
)\TIGXIHJVIUYIRG]
7YVM
,YEGE]E
7YVM
,YEGE]E

+ EHN

WKHWZRORFLDUHVHSDUDWHGE\DUHFRPELQDWLRQIUDFWLRQKERWKGLSORW\SHVFDQRULJLQDWH+XDFD\D
RIIVSULQJWKH$%DEGLSORW\SHDWWKHUDWLR5 K+XDFD\DK6XULDQGWKH$E
D%GLSORW\SHDWWKHUDWLR5 K+XDFD\DK6XUL,QIDFWLIWKHUHDO6XULPDOHVRIRXU
FURVVHVDUHDQDGPL[WXUHRIWKHWZRGRXEOHKHWHUR]\JRXVGLSORW\SHVDQGLIKLVQRWWRRVPDOO
ZHH[SHFWWRREVHUYHSUHFLVHO\WKHUHVXOWVRI7DEOHZLWKDIUDFWLRQRIWKHPDOHVSURGXFLQJ
+XDFD\DRIIVSULQJDWDUDWLRFORVHWRDQGWKHRWKHUIUDFWLRQSURGXFLQJ+XDFD\DRIIVSULQJDW
DUDWLRFORVHWR
7KH DERYH K\SRWKHVLV SURPSWHG XV WR HVWLPDWH WKH UHFRPELQDWLRQ IUDFWLRQ K IURP WKH GDWD
$VVXPLQJWKDWWKHUVWIRXUPDOHVRI7DEOHVHJUHJDWHG+XDFD\DRIIVSULQJDWUDWLRKDQG
6XULRIIVSULQJDWUDWLRKDQGWKHRWKHUIRXUPDOHVVHJUHJDWHGDWUDWLRVKDQGK
UHVSHFWLYHO\WKHPD[LPXPOLNHOLKRRGHVWLPDWHRIKZDVZLWK&/
,QRUGHUWRIXUWKHUWHVWWKLVGRXEOHUHFHVVLYHPRGHORIWZROLQNHGORFLXVLQJDGGLWLRQDOLQGHSHQGHQW
GDWDWKHUHVXOWVRI0DOONLQLUHFRUGVZHUHUHDQDO\VHG
$PRQJWKHPDOHVGLGQRWSURGXFHDQ\+XDFD\DRIIVSULQJEXWPRVWRIWKHPZHUHQRWYHU\
LQIRUPDWLYHGXHWRWKHLUVPDOOSURJHQ\VL]H:HHVWLPDWHGWKHVHJUHJDWLRQUDWLRRIWKH+XDFD\D
SKHQRW\SHLQWKLVVHULHVE\PD[LPXPOLNHOLKRRG7DEOH7KHSUHYLRXVDQDO\VLVLQZKLFKWKH
VLQJOHORFXVUHFHVVLYHPRGHOZDVQRWUHMHFWHGZDVEDVHGRQWKHLPSOLFLWDVVXPSWLRQRID

1EPIW

4SSPIH
3JJWTVMRK

3FWIVZIHJVIUYIRG]
)\TIGXIHJVIUYIRG]
7YVM
,YEGE]E
7YVM
,YEGE]E

+ EHN

8EFPI7IKVIKEXMSRSJXLI,YEGE]ETLIRSX]TIEQSRKLEPJWMFJEQMPMIWJVSQ7YVM7YVMGVSWWIW1EPPOMRM
VIGSVHW
,YEGE]E
2YQFIVSJSJJWTVMRKTIVQEPI
8SXEP

8SXEPQEPIW
8SXEP,YEGE]E
8SXEPSJJWTVMRK


SURSRUWLRQRI$$$DJHQRW\SHVDPRQJWKHIHPDOHVPDWHGZLWKREOLJDWHKHWHUR]\JRXVPDOHV
VHOHFWHGZLWKDWOHDVWD+XDFD\DRIIVSULQJ5HSHDWLQJWKLVDQDO\VLVXVLQJDQ0/(DSSURDFK
WUXQFDWHGDVFHUWDLQPHQWPRGHOWKHIROORZLQJUHVXOWVZHUHREWDLQHGIRU+ 5
&/IRU+ 5 &/7KXVRQFHDJDLQWKH
VLQJOHORFXVUHFHVVLYHPRGHOSURYHVWREHFRPSDWLEOHZLWKWKHGDWDRQO\IRUYDOXHVRI+WKDWDUH
LQFRPSDWLEOHZLWKWKHREVHUYHGSURSRUWLRQRIVHJUHJDWLQJPDOHV
7YVMSJJWTVMRKSR,YEGE]E,YEGE]EWIKVIKEXMSR
,QWKH0DOONLQLUHFRUGVDPRQJWKHRIIVSULQJE\+XDFD\DVLUH+XDFD\DGDP
ZHUH+XDFD\DDQG6XULERUQIURPWKUHHGLIIHUHQWIDPLOLHV7KHIHZUHFRUGHG6XULRXWRIVXFK
PDWLQJFDQQRWEHUHJDUGHGDVUHFRUGLQJHUURUV$OVRWKHK\SRWKHVLVRIDPLVFODVVLFDWLRQRI
KHWHUR]\JRXVLQGLYLGXDOVVKRZLQJDQLQFRPSOHWHSHQHWUDQFHFDQQRWEHDFFHSWHGEHFDXVHWKH
SDUHQWVRIWKHVH6XULEHORQJHGWRSXUH+XDFD\DOLQHV+HQFHRQO\WKHK\SRWKHVLVRIDQHZ
GRPLQDQWPXWDWLRQRQVRPHJHUPLQDOOLQHVRI+XDFD\DDQLPDOVFDQEHWDNHQLQWRFRQVLGHUDWLRQ
7KHPXWDWLRQUDWHRIWKLVVXSSRVHGQHZGRPLQDQWPXWDWLRQFDQEHHVWLPDWHGDV
'SRGPYWMSRERHJYXYVIVIWIEVGL
,QFRQFOXVLRQWKHGDWDSUHVHQWHGLQWKLVZRUNVKRZWKDWWKHVLQJOHORFXVUHFHVVLYHPRGHOIRUWKH
6XUL+XDFD\DSKHQRW\SHLVXQDFFHSWDEOH,QFRQWUDVWWKHGDWDDUHFRPSDWLEOHZLWKWKHK\SRWKHVLV
WKDWWKH+XDFD\DSKHQRW\SHGHULYHVIURPKRPR]\JRVLW\RIUHFHVVLYHDOOHOHVDWWZROLQNHGORFL
7KLVLVWKHVLPSOHVWPRGHOIRUH[SODLQLQJWKHUHVXOWV
)XWXUHUHVHDUFKZLOOLQYHVWLJDWHJHQHVLQYROYHGLQWKHGHWHUPLQLVPRIWKHSKHQRW\SHVEDVHGRQ
QGLQJVIRUVLPLODUSKHQRW\SHVLQRWKHUPDPPDOVWKHPLFURDQDWRP\RIWKHKDLUIROOLFOHDQG
LWVELRORJ\$FDQGLGDWHJHQHDSSURDFKFRXOGUHSUHVHQWDYDOLGDQGFRVWHIIHFWLYHDOWHUQDWLYHWR
*:$6DQG$5)/3JHQRPHVFDQQLQJ
7KH )LEUREODVW JURZWK IDFWRU )*) JHQH ZDV VKRZQ WR EH LQYROYHG WKURXJK GLIIHUHQW
PHFKDQLVPVLQWKHGHWHUPLQLVPRIDORQJKDLUSKHQRW\SHLQGRJFDWPRXVHUDWDQGUDEELW
'URJHPXOOHU+RXVOH\DQG9HQWD.HKHOHU0XOVDQW6X]XNL
PXWDWLRQVZLWKORVVRIIXQFWLRQDOLW\DQGDOWHUQDWLYHVSOLFLQJERWKLQWHUIHUHZLWKWKHWUDQVLWLRQ
EHWZHHQDQDJHQDQGFDWDJHQDOWHULQJWKHGHUPDOSDSLOODVLJQDOOLQJ
7KHKDLUVKDIWJURZWKUDWHVDQGWKHNHUDWLQRF\WHGLIIHUHQWLDWLRQSURFHVVDUHOLNHO\WREHLQXHQFHG
QRWRQO\E\WKHVLJQDOVIURPWKHGHUPDOSDSLOODEXWDOVRE\WKHLQQHUURRWVKHDWK,56WLVVXH9DQ
6WHHQVHO$QRYHO)*))*)KDVEHHQLVRODWHGLQPLFHE\1DNDWDNHHWDODQG
LVSUHIHUHQWLDOO\H[SUHVVHGLQWKH,56,WVUROHDVDNH\PROHFXOHLQFHOOXODUGLIIHUHQWLDWLRQKDV
EHHQKLJKOLJKWHGLQYLWUR.RPL.XUDPRFKL8PHPRUL
7KH ELRORJLFDO EDFNJURXQG RI WKH OXVWUH FRPSRQHQW RI 6XUL EUH LV \HW WR EH FRPSOHWHO\
XQGHUVWRRG6LQFHNHUDWLQVDUHWKHPRVWLPSRUWDQWSURWHLQVGHWHUPLQLQJSK\VLFDOSURSHUWLHVRI
WKH EUH LW LV OLNHO\ WKDW WKHLU GLIIHUHQWLDO H[SUHVVLRQ DQG WKDW RI NHUDWLQDVVRFLDWHG SURWHLQV
.$3V SOD\ DQ LPSRUWDQW UROH WRJHWKHU ZLWK WKH GLIIHUHQW DUUDQJHPHQW RI WKH FXWLFOH FHOOV
9DOERQHVL$UHFHQWSDSHUWKDWLQYHVWLJDWHGPDMRUJHQHVLQYROYHGLQWKHGHWHUPLQLVPRI
KDLUSKHQRW\SHVLQGRJVKDVKLJKOLJKWHGDPXWDWLRQRQ.57&DGLHXDVUHVSRQVLEOH
IRUWKHZDYHDQGFXUO\SKHQRW\SHVLQVHJUHJDWLQJIDPLOLHVRI3RUWXJXHVHZDWHUGRJV.HUDWLQV
DUHREYLRXVFDQGLGDWHVIURPDELRORJLFDOSRLQWRIYLHZDQGWKLVVSHFLFJHQHLVVSHFLFDOO\
H[SUHVVHGLQWKH,56DQGGRPLQDQWPXWDWLRQVDUHNQRZQWRDIIHFWKDLUVWUXFWXUHLQPRXVHDQG
KXPDQ6KLPRPXUD'XQQ5XQNHO

%H\RQGNHUDWLQVDQGJURZWKIDFWRUVWKHUHDUHDQDWRPLFDOIDFWRUVWKDWFRXOGSOD\DPDMRUUROHLQ
WKH6XULSKHQRW\SHDQGKDLUVKDSH$V\PPHWU\RIWKHWUDQVYHUVHVHFWLRQRIWKHKDLUVKDIWFRUWH[
KDVEHHQVKRZQLQRWKHUPDPPDOVWRSOD\DUROHLQFULPSDQGFXUYDWXUH,QSDUWLFXODUVHYHUDO
DXWKRUVKDYHGHPRQVWUDWHGWKHELODWHUDOVWUXFWXUHRUWKRDQGSDUDFRUWH[RIWKHEUHLQVKHHS
ZLWKKLJKFULPSHGEUHPHULQRDVRSSRVHGWRVKHHSZKLFKGRQRWVKRZWKLVSKHQRW\SH%U\VRQ
/L1DJRUFND,QSDUWLFXODUVRPHDXWKRUVKDYHKLJKOLJKWHGUHFHQWO\KRZWKLV
DV\PPHWULF VWUXFWXUH LV UHHFWHG LQ PLWRWLFDO DQG NHUDWLQLVDWLRQ DV\PPHWU\ WKXV LQXHQFLQJ
FULPS+\QG2WKHUDXWKRUVKDYHKLJKOLJKWHGWKHDQDWRPLFDOUROHRIWKHURRWVKHDWKV
7KLEDXW+\QG$OWKRXJKWKHUHDUHVRPHUHSRUWVRIGLIIHUHQFHVEHWZHHQ6XULDQG
+XDFD\DIRUKDLUVKDIWVWUXFWXUHDQGODWHUDOLW\WKHTXDOLW\RILPDJHVDQGUHVXOWVFDQQRWEHFOHDUO\
LQWHUSUHWHG
6IJIVIRGIW
$QGUHVHQ ( 7KH HIIHFW RI DVFHUWDLQPHQW E\ WUXQFDWH VHOHFWLRQ RQ VHJUHJDWLRQ UDWLRV 3URFHHGLQJV VW:RUOG
&RQJUHVV*HQHWLF$SSOLHG/LYHVWRFN3URGXFWLRQ0DGULG6SDLQSS
%D\FKHOLHU36XULDQG+XDFD\D7ZR$OOHOHVRU7ZR*HQHV"3URF$XVWUDOLDQ$OSDFD$VV1DW&RQI&DQEHUUD
$XVWUDOLDSS
%U\VRQ:*'3+DUODQG-3&DOGZHOO-$9HUQRQ5-:DOOV-/:RRGV61DJDVH7,WRXDQG..RLNH
&RUWLFDOFHOOW\SHVDQGLQWHUPHGLDWHODPHQWDUUDQJHPHQWVFRUUHODWHZLWKEHUFXUYDWXUHLQ-DSDQHVHKXPDQKDLU
-RXUQDORI6WUXFWXUDO%LRORJ\
&DGLHX(0:1HII34XLJQRQ.:DOVK.&KDVH+*3DUNHU%09RQ+ROGW$5KXH$%R\NR$%\HUV$
:RQJ'60RVKHU$*(ONDKORXQ7&6SDG\&$QGUH.*/DUN0&DUJLOO&'%XVWDPDQWH5.:D\QH
DQG($2VWUDQGHU&RDWYDULDWLRQLQWKHGRPHVWLFGRJLVJRYHUQHGE\YDULDQWVLQWKUHHJHQHV6FLHQFH

&DUPLFKDHO,DQG*--XGVRQ3KHQRW\SHVUHVXOWLQJIURP+XDFD\DE\+XDFD\D6XULE\+XDFD\DDQG6XULE\
6XU\$OSDFDFURVVLQJV3URFHHGLQJVRIWKH,QWHUQDWLRQDO$OSDFD,QGXVWU\6HPLQDU6\GQH\$XVWUDOLDSS
'URJHPXOOHU&65XIHQDFKW%:LFKHUWDQG7/HHE0XWDWLRQVZLWKLQWKH)*)JHQHDUHDVVRFLDWHGZLWKKDLU
OHQJWKLQFDWV$QLPDO*HQHWLFV
'XQQ/&&DUDFXODGRPLQDQWPXWDWLRQ-RXUQDORI+HUHGLW\
+RXVOH\'-DQG3-9HQWD7KHORQJDQGWKHVKRUWRILWHYLGHQFHWKDW)*)LVDPDMRUGHWHUPLQDQWRIFDQLQH
KDLULWDELOLW\$QLPDO*HQHWLFV
+\QG3,10(GZDUGV0+HEDUW00F'RZDOODQG6&ODUN:RROEUHFULPSLVGHWHUPLQHGE\PLWRWLF
DV\PPHWU\DQGSRVLWLRQRIQDONHUDWLQLVDWLRQDQGQRWRUWKRDQGSDUDFRUWLFDOFHOOVHJPHQWDWLRQ$QLPDO
.HKOHU-69$'DYLG$$6FKDIIHU.%DMHPD((L]LULN'.5\XJR66+DQQDK6-2%ULHQDQG00HQRWWL
5D\PRQG)RXULQGHSHQGHQWPXWDWLRQVLQWKHIHOLQHEUREODVWJURZWKIDFWRUJHQHGHWHUPLQHWKHORQJKDLUHG
SKHQRW\SHLQGRPHVWLFFDWV-RXUQDORI+HUHGLW\
.RPL.XUDPRFKL$0.DZDQR<2GD0$VDGD06X]XNL-2NL7,PDPXUD([SUHVVLRQRIEUREODVW
JURZWKIDFWRUVDQGWKHLUUHFHSWRUVGXULQJIXOOWKLFNQHVVVNLQZRXQGKHDOLQJLQ\RXQJDQGDJHGPLFH-RXUQDORI
(QGRFULQRORJ\
/L6:+62X\DQJ*(5RJHUVDQG&6%DZGHQ&KDUDFWHUL]DWLRQRIWKHVWUXFWXUDODQGPROHFXODUGHIHFWVLQ
EUHVDQGIROOLFOHVRIWKH0HULQRIHOWLQJOXVWUHPXWDQW([SHULPHQWDO'HUPDWRORJ\
0XOVDQW3+5RFKDPEHDXDQG5*7KpEDXOW$QRWHRQWKHOLQNDJHEHWZHHQWKHDQJRUDDQG)*)JHQHVLQ
UDEELWV:RUOG5DEELW6FLHQFH
1DJRUFND%1DQG'/$GHOVRQ7KHUHDFWLRQGLIIXVLRQV\VWHPDVDGHWHUPLQDQWRIZRROEUHGLDPHWHUIROOLFOH
GHQVLW\DQGEUHGLDPHWHUGLVWULEXWLRQ:RROWHFKQRORJ\DQGVKHHSEUHHGLQJ;/
1DNDWDNH<0+RVKLNDZD7$VDNL<.DVVDLDQG1,WRK,GHQWLFDWLRQRIDQRYHOEUREODVWJURZWKIDFWRU
)*)SUHIHUHQWLDOO\H[SUHVVHGLQWKHLQQHUURRWVKHDWKRIWKHKDLUIROOLFOH%LRFKLPLFDHW%LRSK\VLFD$FWD


3RQ]RQL5:'-+XEEDUG59.HQ\RQ&'7XFNZHOO%$0F*UHJRU$+RZVH,&DUPLFKDHODQG*--XGVRQ
3KHQRW\SHVUHVXOWLQJIURP+XDFD\DE\+XDFD\D6XULE\+XDFD\DDQG6XULE\6XULDOSDFDFURVVLQJV7HFK
5HSIRU$XVWUDOLDQ$OSDFD$VVRFSS
3UHVFLXWWLQL6$9DOERQHVL1$SD]D0$QWRQLQL7+XDQFDDQG&5HQLHUL)OHHFHYDULDWLRQLQDOSDFD9LFXJQD
SDFRVDWZRORFXVPRGHOIRUWKH6XUL+XDFD\DSKHQRW\SH%0&*HQHWLFV
5HQLHUL&$9DOERQHVL9/D0DQQD0$QWRQLQLDQG0$VSDUULQ,QKHULWDQFHRI6XULDQG+XDFD\DW\SHRI
HHFHLQDOSDFD,WDOLDQ-$QLPDO6FLHQFH
5XQNHO)0.ODIWHQ..RFK9%RKQHUW+%XVVRZ+)XFKV7)UDQ]DQG0+UDEHGH$QJHOLV0RUSKRORJLF
DQGPROHFXODUFKDUDFWHUL]DWLRQRIWZRQRYHO.UW.UWJPXWDWLRQV.UWUFRDQG.UWUFR0DPPDOLDQ
*HQRPH
6DPEURRN-DQG':5XVVHOO0ROHFXODUFORQLQJDODERUDWRU\PDQXDOUGHG&ROG6SULQJ+DUERU/DERUDWRU\
3UHVV1HZ<RUN1<86$SS
6KLPRPXUD< 0:DMLG / 3HWXNKRYD 0 .XUEDQ DQG$0 &KULVWLDQR $XWRVRPDOGRPLQDQW ZRROO\ KDLU
UHVXOWLQJIURPGLVUXSWLRQRINHUDWLQ.57DSRWHQWLDOGHWHUPLQDQWRIKXPDQKDLUWH[WXUH$PHULFDQ-RXUQDO
RI+XPDQ*HQHWLFV
6SRQHQEHUJ36XULDQGKXDFD\DDOSDFDEUHHGLQJUHVXOWVLQ1RUWK$PHULFD6PDOO5XPLQDQW5HVHDUFK
6X]XNL62WD<.2]DZDDQG7,PDPXUD'XDOPRGHUHJXODWLRQRIKDLUJURZWKF\FOHE\WZR)JIJHQH
SURGXFWV-RXUQDORI,QYHVWLJDWLYH'HUPDWRORJ\
7KLEDXW6DQG%$%HUQDUG7KHELRORJ\RIKDLUVKDSH,QWHUQDWLRQDO-RXUQDORI'HUPDWRORJ\6XSSO
8PHPRUL + 0: /LQKRII '0 2UQLW] DQG -5 6DQHV )*) DQG ,WV &ORVH 5HODWLYHV $UH 3UHV\QDSWLF
2UJDQL]LQJ0ROHFXOHVLQWKH0DPPDOLDQ%UDLQ&HOO
9DQ6WHHQVHO0$0YDQ*HHODQG306WHLOMHQ7KHPROHFXODUEDVLVRIKDLUJURZWK(XURSHDQ-RXUQDORI
'HUPDWRORJ\
9HODVFR-0HMRUDPLHQWR*HQpWLFRGH$OSDFDV$QDOHV,,,5HXQLRQ&LHQWLFD$QLPDO6RF3HUXDQDGH3URG
$QLP/LPD3HUX

4VSHYGMRKEPTEGEFVIJSVXLIXI\XMPIMRHYWXV]
50RUDQWH$%XUJRVDQG-3*XWLpUUH]
3$&20$5&$6$$Y3DUUD$UHTXLSD3HUXUPRUDQWH#SDFRPDUFDFRP
'SWR3URGXFFLyQ$QLPDO)DFXOWDGGH9HWHULQDULD0DGULG6SDLQ
%FWXVEGX
7KHWH[WLOHLQGXVWU\KDVFKDQJHGLWVZD\RIEX\LQJEUHORRNLQJIRUPRUHQHEUHDQGSD\LQJ
EHWWHUSULFHVIRUWKHQHUFDWHJRULHV$FKDQJHLVQHHGHGLQWKHW\SHRIDQLPDOWKDWLVEUHGHJ
DQDOSDFDWKDWSURGXFHVPRUHDQGQHUEUH7UDGLWLRQDOPHWKRGVRIJHQHWLFLPSURYHPHQWKDYH
EHHQDSSOLHGLQ3HUXZLWKQRWDQJLEOHUHVXOWVVRLWLVQHFHVVDU\WRXVHPRGHUQPHWKRGVVXFK
DVTXDQWLWDWLYHJHQHWLFV7KHREMHFWLYHVRIVHOHFWLRQVKRXOGEHIRFXVHGRQWKHFXUUHQWPDUNHW
VHOHFWLQJWKHEHVWDQLPDOVDQGUHSURGXFLQJWKHPZLWKDGYDQFHGWHFKQLTXHVDFKLHYLQJLWVUDSLG
GLVWULEXWLRQZLWKLQWKHDOSDFDKHUGVRI3HUX3DFRPDUFDLVDQH[SHULPHQWDOUDQFKIRXQGHGE\
WKH,1&$JURXSZLWKWKHDLPRIDFWLQJDVDVHOHFWLRQQXFOHXVIURPZKLFKJHQHWLFLPSURYHPHQW
IRUDOSDFDEUHFDQVSUHDGWKURXJKRXWWKHUXUDOFRPPXQLWLHVLQWKH3HUXYLDQ$OWLSODQR6WDWH
RIWKHDUWWHFKQLTXHVLQDQLPDOVFLHQFHVXFKDVSHUIRUPDQFHUHFRUGLQJRUDVVLVWHGUHSURGXFWLRQ
LQFOXGLQJHPEU\RWUDQVIHUDUHDSSOLHGWRGHPRQVWUDWHWKHLUXVHIXOQHVVLQWKH$OWLSODQRFRQGLWLRQV
3DFRPDUFDKDVGHYHORSHGXVHIXOVRIWZDUH3DFR3URWRFDUU\RXWWKHLQWHJUDOSURFHVVLQJRI
SURGXFWLRQDQGUHSURGXFWLRQGDWD0DWLQJLVFDUULHGRXWLQGLYLGXDOO\JHVWDWLRQLVGLDJQRVHGYLD
XOWUDVRXQGEUHHGLQJYDOXHVHVWLPDWHGIURPDPRGHUQJHQHWLFHYDOXDWLRQDUHXVHGIRUVHOHFWLRQ
DQGHPEU\RWUDQVIHULVDSSOLHGWRLQFUHDVHWKHVHOHFWLRQLQWHQVLW\
.H\ZRUGV$OSDFDJHQHWLFLPSURYHPHQW
-RXVSHYGXMSR
5DLVLQJDOSDFDVLQWKHKLJKODQGVRI3HUXLVWKHRQO\VRXUFHRILQFRPHIRUWKRXVDQGVRIIDPLOLHV
7KHVHIDPLOLHVPDNHXSWKHORZHVWVRFLDOHFRQRPLFDQGHGXFDWLRQDOVHFWRU7KHLQFRPHIRU
WKHDOSDFDEUHHGHUVLVYHU\ORZDQGLVGHWHUPLQHGE\WZRNH\LVVXHVWKDWDIIHFWWKHTXDOLW\DQG
TXDQWLW\RIWKHSURGXFWRIIHUHGWRWKHPDUNHWWKHSRRUJHQHWLFVRIWKHLUDQLPDOVDQGWKHODFNRI
NQRZOHGJHHGXFDWLRQDERXWPRGHUQIDUPLQJWHFKQLTXHV
7KHDOSDFDEUHPDUNHWKDVFKDQJHGVXEVWDQWLDOO\RYHUWKHSDVWWHQ\HDUV)LQHUEUHIHWFKHVWKH
EHVWPDUNHWSULFHVWRWKHGHWULPHQWRIFRXUVHUEUH7KHUHLVWKHUHIRUHDJUHDWLQWHUHVWDPRQJ
SURGXFHUVWRLPSURYHWKHEUHTXDOLW\SURGXFHGE\WKHLUDQLPDOV+RZHYHUPRVWEUHHGHUVGR
QRWNQRZKRZWRSURGXFHWKLVNLQGRIEUHRUGRQRWKDYHDFFHVVWRVXSHULRUJHQHWLFVWKDWZLOO
LPSURYHWKHTXDOLW\RIIXWXUHRIIVSULQJ
'XH WR YDULRXV VRFLDO SROLWLFDO DQG HFRQRPLF IDFWRUV WKDW KDYH DIIHFWHG 3HUX LQ WKH ODVW
\HDUVWKHVL]HRIDOSDFDKHUGVKDVIDOOHQDUHKHOGE\VPDOOIDUPHUVSULYDWHLQYHVWPHQW
LQEUHHGLQJKDVEHHQDOPRVWQRQH[LVWHQWDQGWKHJHQHWLFVRIDQLPDOVKDYHGHWHULRUDWHGJUHDWO\
7KLVJHQHWLFSUREOHPLVWKHFDXVHRIWKHWKLFNHQLQJRIWKHEUHDQGWKHYHU\ORZSURGXFWLRQ
UDWHV+RZHYHUUDLVLQJDFRXUVHEUHDOSDFDFRVWVWKHVDPHDVUDLVLQJDQLPSURYHGQHUEUH
DOSDFDZKLOHWKHJHQHWLFDOO\LPSURYHGDQLPDOFDQIHWFKXSWRWLPHVPRUHLQFRPH7KHUHIRUH
WKHJHQHWLFUHVFXHRIQHEUHDOSDFDVDQGJUHDWHUSURGXFWLRQHIFLHQF\LVHVVHQWLDOWRDGGUHVV
WKLVW\SHRIEUHHGLQJLQWKHVWFHQWXU\OHDYLQJDVLGHWKHHPSLULFDOSURGXFWLRQSDWWHUQVEDVHG
RQDQFLHQWWUDGLWLRQV

8LI4EGSQEVGETVSNIGX
,QWKHDEVHQFHRIVHULRXVYHQWXUHVDQGORQJWHUPVWDWHRUSULYDWHEUHHGLQJFHQWUHVIRU$OSDFDV
LQ3HUXLWZDVGHFLGHGWRFUHDWH3DFRPDUFDLQWKH\HDU
7KHSULPDU\JRDORIWKHSURMHFWZDVWRLQVWDOODPRGHOIDUPPRGHUQDQGHIFLHQWZKLFKFDUULHG
RXWDSURJUDPPHRIUDLVLQJDQGEUHHGLQJDOSDFDVXVLQJWKHEHVWWHFKQRORJ\IRUSURGXFLQJQH
DQLPDOVDQGJXDUDQWHHGWKHSURYLVLRQRIWKHEDVLFVIRULPSURYLQJWKHTXDOLW\RIWKHQDWLRQDODOSDFD
KHUGLQWKHKDQGVRIVPDOOSURGXFHUV7KH3DFRPDUFDSURMHFWREMHFWLYHVFDQEHVXPPDULVHGDV
IROORZV
*HQHWLFLPSURYHPHQWIRFXVHGRQWKHDOSDFDEUHUHTXLUHGE\WKHWH[WLOHLQGXVWU\
,PSURYLQJDQLPDOKXVEDQGU\WHFKQLTXHVDOORZLQJEHWWHUSURGXFWLRQLQGLFHV
7UDQVPLWWLQJWKHNQRZOHGJHJDLQHGWR$QGHDQSURGXFHUVVRWKH\FDQLPSURYHDOSDFDEUHHGLQJ
WHFKQLTXHV
%HFRPLQJDJHQHWLFFRUHWKDWSURYLGHVKLJKTXDOLW\DQLPDOJHQHWLFVWR$QGHDQIDUPHUV
5HVHDUFKJHQHWLFVUHSURGXFWLRQQXWULWLRQDQGRWKHUVFLHQFHVUHODWHGWRWKH$OSDFD
+IRIXMGMQTVSZIQIRXTVSKVEQQI
7KHEUHHGLQJSURJUDPPHRIWKH3DFRPDUFDIDUPDLPVWRQGWKHTXDOLW\DQGTXDQWLW\RIWH[WLOH
EUHQHHGHGWRGD\VRWKHVHOHFWLRQREMHFWLYHVKDYHEHHQIRFXVHGRQWKHLQWHQGHGHQGPDUNHW
ZKHUHWKHDOSDFDEUHJRHV7RDFKLHYHWKLVREMHFWLYHTXDQWLWDWLYHJHQHWLFVWHFKQLTXHVZHUHXVHG
WKDWKDYHEHHQVXFFHVVIXOLQRWKHUVSHFLHV7KHVWDJHVRIWKH3DFRPDUFDEUHHGLQJSURJUDPPH
DUHGLVFXVVHGEHORZ
(IRMXMSRSJWIPIGXMSRKSEPW
:HPXVWVHOHFWRQO\WKRVHWUDLWVWKDWDUHHFRQRPLFDOO\UHOHYDQWIRUDOSDFDV,QWKHEHJLQQLQJ
SRVVLEOHVHOHFWLRQREMHFWLYHVJURXSHGZHUHDQDO\VHGLQWR)LEUH3URGXFWLRQJRDOV%LRPHWULF
JRDOV3KHQRW\SHJRDOVDQG<LHOGJRDOV7DNLQJLQWRFRQVLGHUDWLRQWKHJHQHWLFFRUUHODWLRQVDQG
WKHLPSRUWDQFHRIHDFKREMHFWLYHREMHFWLYHVDUHFXUUHQWO\XVHGDQGGLYLGHGLQWRWZRJURXSV
)LJXUH)LEUHREMHFWLYHDQG3KHQRW\SHVXEMHFWLYH
7KHLQIRUPDWLRQIRUREMHFWLYHDQDO\VLVRIEUHLVREWDLQHGWKURXJKDQDO\VLVRIEUHVDPSOH
3DFRPDUFDDQLPDOVDUHDQDO\VHGRQFHD\HDUE\2)'$8QWLOQRZDQDO\VHVKDYH
EHHQFDUULHGRXW)RUWKHSKHQRW\SLFLQIRUPDWLRQDSK\VLFDODVVHVVPHQWLVXVHGDWZHDQLQJZKLFK
)LEUH
REMHFWLYH
3$&20$5&$6$
*5832,1&$
3KHQRW\SH
VXEMHFWLYH
)LEUHGLDPHWHU
6WDQGDUGGHYLDWLRQ
&RHIILFLHQWRIYDULDWLRQ
&RPIRUWIDFWRU
'HQVLW\
+HDG
/HJFRYHUDJH
&ULPS&XUO
%DODQFH
*MKYVI7IPIGXMSRSFNIGXMZIWSJ4EGSQEVGE

KDVEHHQVWDQGDUGLVHGIRUDOOWHDPPHPEHUVSKHQRW\SLFDVVHVVPHQWVKDYHEHHQSHUIRUPHG
,Q3DFRPDUFDRIWKHSRSXODWLRQIRUSKHQRW\SLFDQDO\VLVDQGEUHLVLQFOXGHG
4IVJSVQERGIVIGSVHMRK
,WLVQRWSRVVLEOHWRPDNHJHQHWLFLPSURYHPHQWLIWKHUHLVQRDYDLODEOHKHUGWRLPSURYHKHUGV
PXVWEHV\VWHPDWLVHGDQGDFFHVVLEOHIRUWKHSURMHFWDWDOOWLPHV3DFRPDUFDKDVGHYHORSHGWKH
3$&2352VRIWZDUHDVDPDLQVXSSRUWIRUWKHEUHHGLQJSURJUDPPH)LJXUH3$&2352
PDQDJHPHQWVRIWZDUHFDQVWRUHDQGRUJDQLVHDOOGDWDUHOHYDQWWRUDLVLQJDOSDFDVVDYLQJWLPHDQG
DOORZLQJWKHGHFLVLRQPDNLQJSURFHVVWRPRYHRQ
7KHLQIRUPDWLRQVWRUHGLQ3$&2352FRYHUV
LGHQWLFDWLRQDQGSHGLJUHHLGHQWLFDWLRQRILQGLYLGXDOSDUHQWVGDWHRIELUWKVH[
UHSURGXFWLYHLQIRUPDWLRQEUHHGLQJGLDJQRVWLFVELUWKV
LQIRUPDWLRQRQEUHGLDPHWHUVWDQGDUGGHYLDWLRQFRPIRUWIDFWRUFRHIFLHQWRIYDULDWLRQ
SURGXFWLRQLQIRUPDWLRQW\SHRIHHFHZHLJKWVWDSOHOHQJWK
SKHQRW\SLFLQIRUPDWLRQRQGHQVLW\FULPSFXUOKHDGOHJFRYHUDJHEDODQFH
PHGLFDOLQIRUPDWLRQWUHDWPHQWVGLVHDVHVGHIHFWV
*MKYVI4%'3463WSJX[EVIMRHMZMHYEPMHIRXMGEXMSRSJIEGLERMQEPMRXLI4EGSQEVGEFVIIHMRKTVSKVEQQI

)WXMQEXMSRSJKIRIXMGTEVEQIXIVW
<RXFDQRQO\LPSURYHWKRVHSDUDPHWHUVWKDWKDYHDKLJKKHULWDELOLW\3DFRPDUFDKDVEHHQDEOHWR
GHWHUPLQHWKHKHULWDELOLW\IRUWKHPDLQSHUIRUPDQFHSDUDPHWHUVRIDOSDFDV7DEOHDQG7DEOH
3DFRPDUFD KDV D FRRSHUDWLRQ DJUHHPHQW ZLWK WKH 8QLYHVLGDG &RPSOXWHQVH GH 0DGULG IRU
JHQHWLFHYDOXDWLRQVRIDQLPDOVEDVHGRQLQIRUPDWLRQIURPWKHVRIWZDUH3DFRSURXVLQJUHVWULFWHG
PD[LPXPOLNHOLKRRG9&(
+IRIXMGIZEPYEXMSR
7KHJHQHWLFHYDOXDWLRQ7DEOHLVWKHPRVWUHOLDEOHVWDWLVWLFDOHVWLPDWLRQRIJHQHWLFYDOXHRID
SDUWLFXODULQGLYLGXDOIRUDSDUWLFXODUWUDLW3DFRPDUFDXVHV%/83%HVW/LQHDU8QELDVHG3UHGLFWRU
WRGHWHUPLQHWKHJHQHWLFHYDOXDWLRQRIDOODOSDFDVLQWKHSURJUDPPH$JHQHWLFHYDOXDWLRQIRUD
8EFPI )WXMQEXIH LIVMXEFMPMXMIW HMEKSREP ERH KIRIXMG GSVVIPEXMSRW SZIV XLI HMEKSREP JSV XLI FVI ERH
TLIRSX]TIMR,YEGE]E
1-'
7(
'32*
':
()2
6->
'%&
'%0
&%0
1-'
7(
'32*
':
()2
6->
'%&
'%0
&%0

+VI]GIPPWXLIFIWXEPTEGEJSVXLIXVEMX
8EFPI )WXMQEXIH LIVMXEFMPMXMIW HMEKSREP ERH KIRIXMG GSVVIPEXMSRW SZIV XLI HMEKSREP JSV XLI FVI ERH
TLIRSX]TIMR7YVM
1-'
7(
'32*
':
()2
1-'
7(
'32*
':
()2
6->
'%&
'%0
&%0

6->
'%&
'%0
&%0

+VI]GIPPWXLIFIWXEPTEGEJSVXLIXVEMX

(3&
1-'
:+
7(
:+
*'3
:+
':
:+

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

16

1

1

1

1

1

1

1

1

1

&SPHXLIFIWXEPTEGEJSVXLIXVEMX
-XEPMGXLI[SVWXEPTEGEJSVXLIXVEMX
+VI]GIPPWQEPI1MWWSRSJQEPI1WLS[MRKXLIKIRIXMGKEMR
%6)8)

()2
:+

6->
:+

'%&
:+

'%0
:+

&%0
:+
8EFPI)\EQTPISJEKIRIXMGIZEPYEXMSRGLEVXHVE[RYTJSV,YEGE]EQEPIWJVSQ4EGSQEVGE+VIIRWLS[WFIWXERMQEPJSVXLIXVEMXERHVIHXLI[SVWX1EPI1
MWWSRSJQEPI1WLS[MRKXLIKIRIXMGKEMR


JLYHQWUDLWLVWKHH[SHFWHGGLIIHUHQFHEHWZHHQWKHDYHUDJHYDOXHRIWKHRIIVSULQJRIDQLQGLYLGXDO
DQGWKHDYHUDJHYDOXHRIWKHWUDLWLQWKHUHVWRIWKHSRSXODWLRQ7KHYDOXHOHWV\RXGHWHUPLQHKRZ
PXFKEHWWHURUZRUVHDQDQLPDOLVZLWKUHVSHFWWRWKHPHDQIRUHDFKWUDLWDOORZLQJWKHVHOHFWHG
DOSDFDVWKHWUDQVPLVVLRQRIWKHEHVWSURGXFWLRQWUDLWVWRWKHLURIIVSULQJ
*HQHWLFWHVWLQJLVFDUULHGRXWHYHU\\HDUIRUDOODQLPDOVEDVHGRQWKHVHUHVXOWVEUHHGLQJGHFLVLRQV
DUHPDGHZKHUHWKHPDOHFRPSOHPHQWWKHODFNRIIHPDOHV/LNHZLVHZLWKWKHUHVXOWVRIJHQHWLF
HYDOXDWLRQDQLPDOVFDQEHVHOHFWHGIRUHQWHULQJWKHHPEU\RWUDQVIHUSURJUDPPH
7IPIGXMSRGVMXIVME
7KHWZRPDLQWRROVRIJHQHWLFLPSURYHPHQWDUHWKHVHOHFWLRQWRGHWHUPLQHZKLFKLQGLYLGXDOV
DUHJRLQJWROHDYHRIIVSULQJDQGPDWLQJV\VWHPVWRGHWHUPLQHKRZWKHLQGLYLGXDOVVHOHFWHG
ZLOO EH SDLUHG %UHHGLQJ LQYROYHV WKH SURFHVVHV RI JHQHWLF HYDOXDWLRQ DQG GLVVHPLQDWLRQ RI
VHOHFWHG JHQHWLF PDWHULDO LQ ZKLFK \RX FDQ XVH DUWLFLDO UHSURGXFWLYH WHFKQRORJLHV VXFK DV
HPEU\RWUDQVIHU(7
3DFRPDUFDXVHVWKHIROORZLQJEUHHGLQJWHFKQLTXHV
,QGLYLGXDOEUHHGLQJIRUZKLFKUHSOLFDWHGIDFLOLWLHVGHVLJQHGWRIDFLOLWDWHWKLVZRUNDFKLHYHG
IHUWLOLW\
(PEU\RWUDQVIHUDIWHUWKHH[SHULHQFHRIJHQHWLFHYDOXDWLRQV3DFRPDUFDKDVDFTXLUHGWKH
DELOLW\WRLGHQWLI\WKHLUEHVWDQLPDOV+RZHYHUDUDSLGJHQHWLFUHVSRQVHLVOLPLWHGE\WKH
QXPEHURIRIIVSULQJSURGXFHGQDWXUDOO\RQO\RQHRIIVSULQJERUQWRHDFKIHPDOHSHU\HDU
7RDGGUHVVWKLVOLPLWDWLRQ3DFRPDUFDKDVLQLWLDWHGDSURJUDPPHRIDVVLVWHGUHSURGXFWLRQ
WKURXJKHPEU\RWUDQVIHU0DOHVDQGIHPDOHVZLWKWKHEHVWEUHHGLQJYDOXHVZHUHVHOHFWHG8S
WRVL[HPEU\RVZLWKDQDYHUDJHRIIRXUZHUHREWDLQHGIURPHDFKIHPDOHDQGWUDQVIHUUHGWR
IHPDOHVZLWKKLJKPDWHUQDOFDSDELOLWLHV7KXVHDFKIHPDOHFDQSURYLGHIRXURIIVSULQJSHU
\HDURQDYHUDJH7DEOHVKRZVWKHVXPPDU\RIWKHGDWDIRUHPEU\RWUDQVIHULQWKH
VHDVRQVKRZLQJRIVXFFHVVIXOSUHJQDQFLHVDQGRIRIIVSULQJERUQ
8EFPI7YQQEV]SJIQFV]SXVERWJIVWTVSHYGXMSRMR
(SRSVJIQEPIW
6IGMTMIRXJIQEPIW
*PYWLMRKW
'SPPIGXIHIQFV]SW
8VERWJIVVIHIQFV]SW
7YGGIWWJYPTVIKRERG]
3JJWTVMRKFSVR

)\XIVREPIJJIGXWJSVXLIUYERXMX]ERHUYEPMX]SJFVIMR
+YEREGSW
-9RQ7KQJHQ5/KHXUH(6HJXLQHDX'H3UHYDODQG$3HUD]]R
,QVWLWXWR1DFLRQDOGH7HFQRORJtD$JURSHFXDULD(VWDFLyQ([SHULPHQWDO$JURSHFXDULD%DULORFKH
0RGHVWD9LFWRULD6&%DULORFKH5tR1HJUR$UJHQWLQD
MYWKXQJHQ#EDULORFKHLQWDJRYDU
$JUR3DULV7HFK5XH&ODXGH%HUQDUG)3DULV)UDQFH
%FWXVEGX
7KHVWXG\LVSDUWRIDSURMHFWGHYHORSLQJVXVWDLQDEOHXVHIRUWKHJXDQDFR/DPDJXDQLFRH7KH
JXDQDFRLVDZLOGFDPHOLGOLYLQJIUHHRQWKH$UJHQWLQH3DWDJRQLDQIDUPV2QFHD\HDUWKHDQLPDO
LVOLYHFDSWXUHGVKRUQDQGUHOHDVHGDQGLWVEUHVROG7KHREMHFWLYHLVWRGHQHKRZWKHDPRXQW
DQGWKHTXDOLW\RIEUHREWDLQHGSHUDQLPDOFDQYDU\7KHLPSDFWRIVRPHH[WHUQDOIDFWRUVRQWKHVH
YDULDEOHVRIHFRQRPLFLQWHUHVWKDVWREHGHWHUPLQHGZKLFKLVWKHFRQWHQWRIWKLVVWXG\6DPSOHG
JXDQDFRV ZHUH WUDSSHG OLYH VKRUQ DQG SHUPDQHQWO\ WDJJHG EHWZHHQ DQG HHFH
ZHLJKHGDQGHHFHVDPSOHVRIFPZHUHWDNHQIURPWKHVKRXOGHUGXULQJWKHFDSWXUHV7KH
DQDO\VHGYDULDEOHVZHUHPHDQHHFHZHLJKW0):DYHUDJHEUHGLDPHWHU$)'DQGGRZQ
\LHOG'<$)'DQG'<ZHUHREWDLQHGXVLQJ6LURODQ/DVHUVFDQ,:72DQGWKH+HUPDQQ
DQG:RUWPDQQPHWKRGYDOLGDWHGE\6DFFKHURDQG0XHOOHUUHVSHFWLYHO\$OOWKH
GDWDKDYHEHHQFRPSDUHGVWDWLVWLFDOO\ZLWKPHDQWHVWVDQGPHDQWHVWVLQSDLUV36HDVRQ
UDLQIDOODQGSUHYLRXVVKHDULQJZHUHDQDO\VHG6LJQLFDQWGLIIHUHQFHVZHUHGHWHFWHGIRUUDLQIDOO
DQGSUHYLRXVVKHDULQJ1RVLJQLFDQWGLIIHUHQFHVZHUHIRXQGIRUVHDVRQ/LWWOHLQIRUPDWLRQZDV
DYDLODEOHDERXWWKHTXDOLW\RQO\WKHHIIHFWRIUDLQIDOOFRXOGEHDQDO\VHG7KHUHVXOWVWHQGWRVKRZ
DFRQVWDQW\LHOGDQGDVPDOOHUGLDPHWHURIEUHLQGU\FRQGLWLRQVDVKDSSHQVZLWKRWKHUVSHFLHV
+RZHYHULWLVQHFHVVDU\WRFRQWLQXHPRQLWRULQJWKHVHHIIHFWVDVJXDQDFRFRXOGEHDJRRGXVHRI
GU\WHUULWRULHVLQ3DWDJRQLD
.H\ZRUGVJXDQDFRTXDOLW\TXDQWLW\FOLPDWH
-RXVSHYGXMSR
$UJHQWLQDLVFRYHUHGE\RIDULGDQGVHPLDULGODQG3URGXFWLRQLVOLPLWHGE\SDXFLW\DQG
YDULDELOLW\RIUDLQIDOO,Q3DWDJRQLDWKHPDLQSURGXFWLRQV\VWHPKDVEHHQVKHHSIDUPLQJVLQFH
WKHEHJLQQLQJRIWKHWZHQWLHWKFHQWXU\7KHV\VWHPLVEXLOWRQWKHSURGXFWLRQRIZRROZKLFK
LVHVVHQWLDOWRWKHWH[WLOHLQGXVWU\9RQ7KQJHQDQG/DQDUL0XHOOHU,Q
VLJQLFDQW TXDQWLWLHV RI DQLPDO EUHV ZHUH UHJLVWHUHG LQ$UJHQWLQD NJ RI ZRRO
NJRI/ODPDNJRI0RKDLUNJRI&DVKPHUHNJRI9LFXxDDQGQDOO\
NJRI*XDQDFR,17$1DWLRQDO3URJUDPRI$QLPDO)LEUHV
7KHH[SORLWDWLRQRIWKHODQGWRGD\OHDGVWRVHYHUDOSUREOHPV7UDGLWLRQDOVKHHSEUHHGLQJKDV
RIWHQEHHQPDQDJHGZLWKRXWDQ\FRQVLGHUDWLRQIRUWKHHQYLURQPHQWRYHUJUD]LQJE\GRPHVWLF
KHUELYRUHVKDELWDWDOWHUDWLRQE\GHIRUHVWDWLRQDQGXQFRQWUROOHGUHV%DOGLHWDO'HIRVVp
HWDO&RQVHTXHQWO\ODQGGHJUDGDWLRQODUJHUSUREOHPVRIHURVLRQDQGHQGDQJHUHGVSHFLHV
DUHWKHOHJDF\LQ3DWDJRQLD+RZHYHUOLYHVWRFNNHHSHUVODQGXVHUVDQGWKHFRPPXQLW\DWODUJH
DUHH[SORULQJVXVWDLQDEOHRSSRUWXQLWLHVIRUWKHXVHRIWKHVHODQGV%DOGLHWDO
7KHJXDQDFR/DPDJXDQLFRHLVWKHPRVWFRQVSLFXRXVZLOGXQJXODWHRI3DWDJRQLD+RZHYHU
WKHDFWXDOUXQQLQJK\SRWKHVLVLVWKDWSRSXODWLRQVLQ6RXWK$PHULFDLQFOXGLQJ$UJHQWLQDKDYH

GHFOLQHGFRQWLQXRXVO\VLQFH(XURSHDQVHWWOHPHQWXSWRGD\7RUUHV&XQD]]DHWDO
&DXVHVIRUWKLVGHFOLQHDUHUHODWHGWRKDELWDWDOWHUDWLRQFRPSHWLWLRQIRUIRUDJHE\VKHHS%DOGLHW
DOKXQWLQJIRUPDODQGLQIRUPDODQGODFNRIUHDVRQDEOHPDQDJHPHQWSODQVWRGHYHORS
VLPXOWDQHRXVO\DOLYHOLKRRGIRUUDQFKHUVDQGIRUWKHQHHGVRIFRQVHUYDWLRQ%DOGLHWDO
9RQ7KQJHQDQG/DQDUL7RGD\WKHLGHDLVWRDSSO\WKHXVHLWRUORVHLWFRQFHSW)UDQNOLQ
DQG)ULW]E\XVLQJWKHEUH7KHJXDQDFRKDVDYHU\GHQVHKDLUWKDWSURWHFWVLW7KLVEUH
SURYLGHVDSSUHFLDWHGFKDUDFWHULVWLFVLQWKHWH[WLOHLQGXVWU\$VWKHJXDQDFRLVDZLOGDQLPDOLWLV
QHFHVVDU\WRGHYHORSFRUUDOWUDSVWRFDSWXUHLWDOLYHEHIRUHVKHDULQJDQGUHOHDVLQJLW
,QRUGHUWRRSWLPLVHWKHXVHRIWKHJXDQDFRWKHH[WHUQDOIDFWRUVDIIHFWLQJWKHTXDOLW\DQGTXDQWLW\
RIEUHKDYHWREHNQRZQ7KHTXDOLW\FDQEHHYDOXDWHGE\VHYHUDOSDUDPHWHUV\LHOGDYHUDJH
GLDPHWHURIEUHVWDSOHOHQJWKUHVLVWDQFHWRWUDFWLRQ7KHKLJKHUWKH\LHOGDQGWKLQQHUWKHEUH
WKHKLJKHUWKHSULFH7KHTXDQWLW\RIHHFHH[SUHVVHGLQJUDPVLVWKHZHLJKWRIEUHREWDLQHG
DIWHUVKHDULQJ7KUHHIDFWRUVKDYHEHHQFKRVHQWREHVWXGLHGWKHHIIHFWRIWKHVHDVRQWKHEHVW
WLPHRI\HDUWRVKHDUWKHJXDQDFRWKHHIIHFWRIDSUHYLRXVVKHDULQJDQGQDOO\WKHHIIHFWRIWKH
FOLPDWH
7KLVDUWLFOHVWXGLHVWKHVXVWDLQDEOHXVHRIJXDQDFRLQ3DWDJRQLD,QRUGHUWRGHQHWKHHFRQRPLF
DVSHFWWKHLQXHQFHRIH[WHUQDOYDULDEOHVRQSDUDPHWHUVRILQWHUHVWTXDQWLW\DQGTXDOLW\RI
HHFHFROOHFWHGKDVEHHQDQDO\VHG
1EXIVMEPWERHQIXLSHW
'DWDXVHGIRUWKHDQDO\VLVZHUHFROOHFWHGIURPDZLOGJXDQDFRSRSXODWLRQOLYLQJRQDKD
IDUPQHDU3LHGUDGHO$JXLOD/DWLWXGH6DQG/RQJLWXGH:LQWKHSURYLQFHRI1HXTXHQ
7KHFOLPDWHLVVHPLDULGZLWKGU\DVHDVRQLQVXPPHUDQGUDLQIDOORFFXUULQJWKURXJKRXWFROG
ZLQWHUV$QQXDOSUHFLSLWDWLRQYDULHVEHWZHHQPPDQGWKHDYHUDJHDQQXDOWHPSHUDWXUH
LV&%XVWRVDQG5RFFKL/DQGVFDSHLVVKDSHGE\YDVWSODLQVRIVKUXEODQGDQGWXVVRFN
JUDVVHVUDQJLQJDURXQGPDOWLWXGH$\HVDHWDO'HIRVVHHWDO(OLVVDOGHHW
DO
7KHZLOGJXDQDFRSRSXODWLRQLVWUDSSHGOLYHVKRUQDQGUHOHDVHGHYHU\\HDU$ERXWDQLPDOV
D\HDUDUHFDSWXUHGLQYDULRXVFDSWXUHVHVVLRQV$VJXDQDFRVDUHWHUULWRULDOVRPHDQLPDOVDUH
UHFDSWXUHGLQVXFFHVVLYH\HDUV7KHUHDUHWZRSRVVLEOHPRPHQWVWRFDSWXUHJXDQDFRV2FWREHU
1RYHPEHUDQG)HEUXDU\0DUFK6RPH\HDUVWKHFDSWXUHVDUHRQO\GRQHGXULQJRQHVHDVRQ
WKHHHFHVDPSOHVKDYHEHHQFROOHFWHGIURPWRGXULQJWKHVXPPHUVHVVLRQV7KHVH
JXDQDFRVZHUHSHUPDQHQWO\WDJJHGEHWZHHQDQG)RUVRPHRIWKHPWKHHHFHZDV
ZHLJKHGDQGVDPSOHGGXULQJWKHFDSWXUHV)OHHFHVDPSOHVRIFPZHUHDOVRWDNHQIURPWKH
VKRXOGHUDFFRUGLQJWR'HIRVVHHWDO$YHUDJHEUHGLDPHWHU$)'ZDVREWDLQHGXVLQJ
6LURODQ/DVHUVFDQ ,:727KH \LHOG RI GRZQ EUHV ZDV HVWLPDWHG E\ WKH +HUPDQQ DQG
:RUWPDQQPHWKRGYDOLGDWHGE\6DFFKHURDQG0XHOOHU7DEOHOLVWVWKHDYDLODEOH
GDWD
7KHSUREDELOLW\RIFDSWXULQJRQHJXDQDFRLVPDLQO\UHODWHGWRWKHH[SHULHQFHRIWKHSHUVRQQHO
LQYROYHGEXWZHDWKHUFRQGLWLRQVDOVRLQXHQFHWKHDPRXQWRIDQLPDOVFDSWXUHGDWDQ\RQHWLPH
3UREDELOLW\RIUHFDSWXULQJRQHJXDQDFRLVUHODWHGWRLWVH[SHULHQFH(YHU\JXDQDFRLVLGHQWLHG
E\DPDUNWDJ:HFODVVHGWKHDQLPDOVLQJURXSVDFFRUGLQJWRWKHLUKLVWRU\RIFDSWXUHDVVKRZQ
LQ7DEOH
7RDQDO\VHWKHHIIHFWRIWKHVHDVRQFRPSDULVRQWHVWE\SDLUVZDVGRQHIRUDQLPDOVFDXJKWWZR
RUWKUHHWLPHVEHWZHHQDQG'DXGLQHWDO7KHVWXG\RIWKHFOLPDWHHIIHFWZDV

8EFPI2YQFIVSJIIGIWEQTPIHJVSQWYGGIWWMZIGETXYVIIZIRXWVIWYPXMRKMREZEMPEFMPMX]SJVE[HEXE
=IEV
7YQQIVWIWWMSR
7TVMRKWIWWMSR
*PIIGIWEQTPIVIGSPPIGXMSR

8EFPI2YQFIVSJKYEREGSWGETXYVIH[MXLWEQIGETXYVILMWXSV]
7YQQIV
*IF1EV
7YQQIV
*IF1EV
7TVMRK
3GX
8SXEP
RYQFIV

GRQHE\FRPSDULQJZLWKDPHDQWHVWWKHZHLJKWRIHHFHIRUDOOWKHDQLPDOVFDSWXUHGLQ
DQG'DXGLQHWDO$FRUUHODWLRQWHVWZDVUXQZLWKUDLQIDOOGDWDDYDLODEOHLQ
WKHUHJLRQ%XVWRVDQG5RFFKL
7RXQGHUVWDQGWKHHIIHFWRIDSUHYLRXVVKHDULQJZHFRPSDUHG$)'DQG'<IRUDQLPDOVVKRUQIRU
WKHUVWWLPHDQGVHFRQGWLPH7RDYRLGDELDVGXHWRWKH\HDUHIIHFWZHDQDO\VHGDQLPDOVVKRUQ
LQWKHVDPH\HDU6XPPHUZLWKJURXS6XPPHU6XPPHU$OOWKHVWDWLVWLFVKDYH
EHHQFRQVLGHUHGZLWKD[HGHUURURI
)JJIGXWSRXLIUYERXMX]SJFVI
7IEWSRIJJIGX
7KHPHDQWHVWVZHUHGRQHRQWKHIROORZLQJJURXSDVVRFLDWLRQV6X6X6X6S6X6S
ZLWKRXW*6X6S7KH\VKRZWKDWWKHRQO\VLJQLFDQWGLIIHUHQFHLVEHWZHHQWKHODWHVXPPHU
DQGWKHEHJLQQLQJRIVSULQJ6X 6X6X!6S6X!6S*6X 6S7KH
ZHLJKWRIHHFHVHHPVWREHHTXDOZKDWHYHUWKHVHDVRQH[FHSWIRUWKHJXDQDFRVVKRUQIRUWKH
VHFRQGWLPHLQWKHVDPH\HDU7KLVFDQEHH[SODLQHGE\VKRUWHUODSVHVRIWLPHEHWZHHQ
WKHWZRFDSWXUHVLQTXHVWLRQHLJKWPRQWKVLQVWHDGRIRQH\HDU
=IEVIJJIGX
7KH\HDUHIIHFWZDVDQDO\VHGIRUIRXUFRQVHFXWLYH\HDUVEHWZHHQZKLFKPHDQWHVWVKDYHEHHQ
FDUULHGRXWDVVKRZQLQ7DEOH7KHUHLVDVLJQLFDQWGLIIHUHQFHLQHHFHZHLJKWEHWZHHQ
DQGIRUDOOWKHRWKHU\HDUV)RUDOORWKHUFRPSDULVRQVQRVLJQLFDQWGLIIHUHQFHZDVREVHUYHG

7RH[SODLQWKLVSRLQWZHORRNHGDWWKHUDLQGDWDIRUWKHVH\HDUV7KHUHZDVDVKRUWDJHRIUDLQIDOO
LQDQG7KLVFRXOGKDYHSURYRNHGSRRUERG\FRQGLWLRQDWWKHHQGRIFDXVLQJ
DUHGXFWLRQLQWKHJURZWKRIWKHEUHIRUWKLV\HDU)LQDOO\LWFRXOGH[SODLQWKHVPDOOZHLJKWRI
HHFHLQ-DQXDU\LQFRPSDULVRQZLWKWKHRWKHU\HDUV+RZHYHUWKHVHUHVXOWVVHHPWREHLQ
FRQWUDGLFWLRQZLWKWKHSUHYLRXVWHVWVZKHUHQRVLJQLFDQWGLIIHUHQFHZDVIRXQG
7LIEVMRKIJJIGX
7RFRPSOHWHWKLVVWXG\ZHDOVRWHVWHGVKHDULQJHIIHFWWRHYDOXDWHGLIIHUHQFHVLQHHFHZHLJKW
EHWZHHQUVWDQGVHFRQGVKHDULQJ7DEOH7RDYRLGDELDVGXHWRWKH\HDUHIIHFWZHFRPSDUHG
DVHWRIDQLPDOVVKRUQIRUWKHUVWWLPHLQDQGDQRWKHUVHWRIDQLPDOVVKRUQIRUWKHVHFRQG
WLPHLQWKHVDPH\HDU
<HDUHIIHFWWKURXJKPHDQWHVWVKRZVRQO\VLJQLFDQWGLIIHUHQFHVEHWZHHQDQGWKHRWKHU
\HDUV+RZHYHUWKHUHLVDVLJQLFDQWVKHDULQJHIIHFWEHWZHHQUVWDQGVHFRQGVKHDULQJLQHHFH
ZHLJKW7KHUVWVKHDULQJSURGXFHVPRUHEUHWKDQWKHVHFRQGRQH
)JJIGXWSRXLIUYEPMX]SJXLIFVI
$VWKLVLVDZLOGSRSXODWLRQDQGWKHKLVWRU\RIFDSWXULQJLVUHFHQWRQO\WKHFOLPDWHHIIHFWRQWKH
TXDOLW\RIWKHEUHFRXOGEHVWXGLHG)LJXUH
7KH$)'VHHPVWRIROORZWKHVDPHHYROXWLRQDVHHFHZHLJKW0HDQWHVWVRQWKH$)'DUHVKRZQ
LQ7DEOH7KH'<LVQHDUO\FRQVWDQWRYHUWKH\HDUVH[FHSWLQZKHUHLWLVVPDOOHU
8EFPI=IEVIJJIGXSRXLIUYERXMX]SJFVI
+VSYT%
+VSYT%
+VSYT%
+VSYT%
+VSYT%
+VSYT%
+VSYT%

!

!
!

8EFPI%ZIVEKIIIGI[IMKLXW
7IGSRHWLIEVMRK
*MVWXWLIEVMRK

2YQFIVSJ
KYEREGSW
%ZIVEKI
:EVMERGI
TIVGIRXMPI 7XEXMWXMG


5DLQIDOO
0):
$)'
&<
5DLQIDOOPP

RIWKHKLJKHVWYDOXH

<HDU
*MKYVI:EVMEXMSRSJOI]TEVEQIXIVW[MXLVEMRJEPP
1*;QIERIIGI[IMKLX%*(EZIVEKIFVIHMEQIXIV(=HS[R]MIPH
8EFPI(MJJIVIRGIWMREZIVEKIIIGI[IMKLX
%*(

!
'SRGPYWMSRW
7KHJXDQDFRLVDQDQLPDOWKDWSURYLGHVDJRRGTXDOLW\EUHDQGWKHXVHRIWKLVEUHPLJKWRIIHU
DQRSSRUWXQLW\IRULWVFRQVHUYDWLRQ7KLVUVWVWXG\VKRZVWKDWWKHWLPHDWZKLFKWKHHHFHLV
FROOHFWHGGRHVQRWVHHPWRDIIHFWWKHTXDQWLW\RUWKHTXDOLW\RIWKHEUH,WFDQEHFRQFOXGHGWKDW
WKHUHLVQRVHDVRQDOHIIHFW+RZHYHUIXUWKHUGHWDLOHGVWXGLHVLQWKHHYROXWLRQRIPRXOWLQJPD\
LQGLFDWHWKHEHVWPRPHQWWRVKHDU7KHFOLPDWLFFRQGLWLRQVVHHPWRKDYHDQLPSDFWRQHHFH
ZHLJKWDQG$)'LQDGU\FRQWH[W7KHUHVLVWDQFHDWWUDFWLRQLQUHODWLRQWRFOLPDWLFFKDQJHVVKRXOG
EHDQDO\VHGLQWKHIXWXUHWRFRQUPWKHVHLQLWLDOFRQFOXVLRQV
7KHDELOLW\WRSUHGLFWYDULDWLRQVLQTXDOLW\EUHDFFRUGLQJWRFOLPDWLFDQGUDQJHFRQGLWLRQVZRXOG
HQDEOHIDUPHUVWRGHFLGHZKHWKHUDQGDWZKDWPRPHQWWRLQYHVWLQFDSWXULQJJXDQDFRV,IWKH
DQLPDOVDUHLQDEDGFRQGLWLRQIRUH[DPSOHDIWHUDVKRUWDJHRIZDWHUWKH\SURGXFHOHVVEUHEXW
RIDEHWWHUTXDOLW\7KLVLVYHU\LQWHUHVWLQJEHFDXVHLWOHDGVWRWKHFRQFOXVLRQWKDWWKHJXDQDFRLV
DQDQLPDODEOHWRPDNHRSWLPDOXVHRISRRUODQGRQZKLFKRWKHUFDWWOHFRXOGQRWVXUYLYH6WXGLHV
IRURWKHUVSHFLHVKDYHDOUHDG\EHHQFRQGXFWHG

%GORS[PIHKIQIRXW
7KHDXWKRUVZLVKWRWKDQN(VWDQFLD/D(VSHUDQ]D65/DQGDOOLWVSHUVRQQHOIRUHOGDVVLVWDQFH
DQGFROODERUDWLRQLQREWDLQLQJVDPSOHV7KHVWXG\ZDVVXSSRUWHGE\WZR,17$SURMHFWV$(51
DQG31),%
6IJIVIRGIW
$\HVD - ' %UDQ & /RSH] 6 &LQJRODQL 6 &OD\WRQ DQG ' 6EULOOHU (YDOXDFLyQ GHO HVWDGR DFWXDO GH OD
GHVHUWLFDFLyQHQODWUDQVHFWD5tR1HJUR(YDOXDFLyQGHO(VWDGR$FWXDOGHOD'HVHUWLFDFLyQHQUHDV5HSUHVHQWDWLYDV
GHOD3DWDJRQLD,QIRUPH)LQDOGHOD)DVH,3UR\HFWRGH&RRSHUDFLyQ7pFQLFDHQWUHOD5HSXEOLFD$UJHQWLQD\OD
5HSXEOLFD)HGHUDOGH$OHPDQLD5LR*DOOHJRV7UHOHZ3XHUWR0DGU\Q%DULORFKH$UJHQWLQD
%DOGL56'$OERQDQG'$(OVWRQ*XDQDFRVDQGVKHHSHYLGHQFHRIFRQWLQXLQJFRPSHWLWLRQLQDULG3DWDJRQLD
2HFRORJLD
%DOGL5'GHO/DPR0)DLOOD3)HUUDQGR0)XQHV31XJHQW63XLJ65LYHUDDQG-9RQ7KQJHQ3ODQ
1DFLRQDOGH0DQHMRGHOJXDQDFR/DPDJXDQLFRH1DWLRQDO0DQDJHPHQW3ODQIRUJXDQDFR/DPDJXDQLFRH
6HFUHWDULDGH$PELHQWH\'HVDUUROOR6XVWHQWDEOHGHOD1DFLRQ$UJHQWLQD
%XVWRV-&DQG9&5RFFKL&DUDFWHUL]DFLyQWHUPRSXYOLRPHWULFDGHYHLQWHHVWDFLRQHVPHWHRUROyJLFDVGH5R
1HJUR\1HXTXHQ7HPSHUDWXUHUHFRUGLQJVIURPPHWHRURORJLFDOVWDWLRQVRI5LR1HJURDQG1HXTXHQ,17$(($
%DULORFKH$UHDGH5HFXUVRV1DWXUDOHV$JURPHWHRURORJtD3XE7pFQLFD
&DUGHOOLQR5&DQG-30XHOOHU)LEUHSURGXFWLRQDQGVKHHSEUHDGLQJLQ6RXWK$PHULFD3URFHHGLQJV$VVRFLDWLRQ
IRUWKH$GYDQFHPHQWRI$QLPDO%UHHGLQJDQG*HQHWLFV
&XQD]]D&DQG63XLJD6LWXDFLyQGHOJXDQDFR\VXDPELHQWH6LWXDWLRQRIWKHJXDQDFRDQGLWVHQYLURQPHQW,Q
63XLJHG7pFQLFDV3DUDHO0DQHMRGHO*XDQDFR*ODQG,8&166&6RXWK$PHULFDQ&DPHOLG6SHFLDOLVW*URXS
6ZLW]HUODQGSS
&XQD]]D&)9LGHODDQG12SRUWRE0DQHMRSDUDUHFXSHUDFLyQGHSREODFLRQHVHQSHOLJUR,Q3XLJ6HG
0DQDJHPHQWIRUUHFRYHU\RIHQGDQJHUHGVSHFLHV7pFQLFDV3DUDHO0DQHMRGHO*XDQDFR*ODQG,8&166&6RXWK
$PHULFDQ&DPHOLG6SHFLDOLVW*URXS6ZLW]HUODQGSS
'DXGLQ--65RELQDQG&9XLOOHW6WDWLVWLTXHLQIpUHQWLHOOH,GpHVGpPDUFKHVH[HPSOHVLQIHUHQWLDOVWDWLVWLFV
LGHDVDSSURDFKHVH[DPSOHV3UHVVHV8QLYHUVLWDLUHVGH5HQQHV5HQQHV)UDQFH
'HIRVVH$0-/*DUULGR2-/DSRUWHDQG/'XJD&ULDGHJXDQDFRVHQFDXWLYLGDGYDULDFLyQGHVXFUHFLPLHQWR
\FDOLGDGGHVXODQD%UHHGLQJRIJXDQDFRVLQFDSWLYLW\YDULDELOLW\RIWKHLUJURZWKDQGTXDOLW\RIWKHLUEUH(VWXGLR
GHIDXQDVLOYHVWUHGHLQWHUHVHFRQyPLFR3URJUDPDGH(FRORJtD\'HVDUUROOR5HJLRQDOGH=RQDV$ULGDV\6HPLiULGDV
&HQWUR1DFLRQDO3DWDJRQLFR3XHWR0DQGU\Q$UJHQWLQDS
'HIRVVp*(0%%HUWLOOHUDQG&5RVWDJQR5DQJHODQGPDQDJHPHQWLQ3DWDJRQLDQGU\ODQGV,Q*.3HUULHU
DQG&:*D\HGV3URFHHGLQJVRIWKH,QWHUQDWLRQDO5DQJHODQG'HYHORSPHQW6\PSRVLXP6RFLHW\IRU5DQJH
0DQDJHPHQW6SRNDQH:$86$SS
(OLVVDOGH12-(3DSSDODUGRDQG060KOHPDQ(YDOXDFLyQGHOHVWDGRDFWXDOGHODGHVHUWLFDFLyQHQOD
WUDQVHFWD &KXEXW (YDOXDFLyQ GHO HVWDGR DFWXDO GH OD GHVHUWLFDFLyQ HQ iUHDV UHSUHVHQWDWLYDV GH OD 3DWDJRQLD
,QIRUPH)LQDOGHOD)DVH,3UR\HFWRGH&RRSHUDFLyQ7pFQLFDHQWUHOD5HSXEOLFD$UJHQWLQD\OD5HSXEOLFD)HGHUDO
GH$OHPDQLD5LR*DOOHJRV7UHOHZ3XHUR0DGU\Q%DULORFKH$UJHQWLQD
)UDQN(109++LFN+(/DPDV&'*DXQDDQG0*0ROLQD(IIHFWVRIDJHFODVVVKHDULQJLQWHUYDOHHFH
DQGFRORUW\SHVRQEHUTXDOLWLHVDQGSURGXFWLRQLQ$UJHQWLQH/ODPDV6PDOO5XPLQDQW5HVHDUFK
)UDQNOLQ:/DQG0$)ULW]6XVWDLQHGKDUYHVWLQJRIWKH3DWDJRQLDJXDQDFR,VLWSRVVLEOHRUWRRODWH",Q
-*5RELQVRQDQG.+5HGIRUGHGV1HRWURSLFDO:LOGOLIH8VHDQG&RQVHUYDWLRQ8QLYHUVLW\RI&KLFDJR3UHVV
&KLFDJR,/86$SS
0XHOOHU-3,QWURGXFFLyQDODSURGXFFLyQRYLQD$UJHQWLQD,Q-30XHOOHUDQG0,&XHWRHGV$FWXDOL]DFLyQ
HQ3URGXFFLyQ2YLQD0HPRULDV9,,&XUVRGH$FWXDOL]DFLyQHQ3URGXFFLyQ2YLQD6DQ&DUORVGH%DULORFKH
5tR1HJUR$UJHQWLQD
5DELQRYLFK-(0-+HUQiQGH]DQG-/&DMDO$VLPXODWLRQPRGHOIRUWKHPDQDJHPHQWRI9LFXxD3RSXODWLRQV
(FRO0RGHOOLQJ

5DELQRYLFK-(-/&DMDO0-+HUQiQGH]63XLJDQG-$PD\D3XEOLFDFLyQGHOD'LYLVLyQGH5HFXUVRV
1DWXUDOHV5HQRYDEOHV6XEVHFUHWDUtDGH&LHQFLD\7HFQRORJtD%XHQRV$LUHV$UJHQWLQD
6DFFKHUR'0DQG-30XHOOHU'HWHUPLQDFLyQGHTXDOLGDGGHYHOORQHVGHGREOHFREHUWXUDWRPDQGRDOYHOOyQGH
9LFXxD9LFXxDYLFXxDFRPRHMHPSOR'HWHUPLQDWLRQRIWKHTXDOLW\RIHHFHZLWKGRXEOHFRYHUWDNLQJWKHHHFH
RI9LFXQDDVDQH[DPSOH5,$
9RQ7KQJHQ-DQG05/DQDUL3URWDELOLW\RIVKHHSIDUPLQJDQGZLOGOLIHPDQDJHPHQWLQ3DWDJRQLD3DVWRUDOLVP

7RUUUHV+'LVWULEXFLyQ\FRQVHUYDFLyQGHOJXDQDFR'LVWULEXWLRQDQGFRQVHUYDWLRQRIWKHJXDQDFR6SHFLDO
UHSRUW1R,8&16&&
:XU]LQJHU0-'HOJDGR01UQEHUJ$9=DUDWH$6WHPPHU*8JDUWHDQG-6|ONQHU*HQHWLFDQGQRQ
JHQHWLFIDFWRUVLQXHQFLQJEUHTXDOLW\RI%ROLYLDQOODPDV6PDOO5XPLQDQW5HVHDUFK

+IRIXMGERHRSRKIRIXMGJEGXSVWMRYIRGMRKFVIUYEPMX]
SJ%VOLEVQIVMRS+LIÎPERH%VOLEVQIVMRS1SKLERM
GVSWWFVIIHWSJWLIITMRXLMVHKIRIVEXMSR
+(VIDQG\DUL$$$VODPLQHMDGDQG6$5DIDW
'HSDUWPHQW RI $QLPDO 6FLHQFH )DFXOW\ RI $JULFXOWXUH )HUGRZVL 8QLYHUVLW\ RI 0DVKKDG
0DVKKDG32%R[$]DGL6TXDUH0DVKKDG,UDQ(VIDQG\DUL+DGL#JPDLOFRP
'HSDUWPHQWRI$QLPDO6FLHQFH)DFXOW\RI$JULFXOWXUH8QLYHUVLW\RI7DEUL]7DEUL],UDQ
%FWXVEGX
7KLV LQYHVWLJDWLRQ ZDV FDUULHG RXW WR UHYHDO WKH FRPSDUDWLYH SURGXFWLRQ SHUIRUPDQFHV DQG
HIIHFWRIVRPHHQYLURQPHQWDOIDFWRUVRQWKHZRROFKDUDFWHULVWLFVRI$UNKDUPHULQR*KH]HODQG
$UNKDUPHULQR0RJKDQLFURVVEUHGVKHHSLQWKLUGJHQHUDWLRQ7KHUHVHDUFKPDWHULDOFRQVLVWHG
RIHHFHVDPSOHVWDNHQGXULQJDSHULRGRIWZR\HDUVIURPWKHPLGVLGHUHJLRQRIWKH
DQLPDOV(DFKVDPSOHZDVPHDVXUHGIRUDYHUDJHEUHGLDPHWHUEUHGLDPHWHUYDULDELOLW\VWDSOH
OHQJWKSURSRUWLRQRIPHGXOODWHGEUHSURSRUWLRQRINHPSDQGFRPIRUWIDFWRU7KHFRPSDUDWLYH
YDOXHV IRU WKHVH HHFH FKDUDFWHULVWLFV LQ )WK $UNKDUPHULQR *KH]HO ZHUH
FP DQG DQG IRU $UNKDUPHULQR
0RJKDQL ZHUH FP DQG
UHVSHFWLYHO\7KHHIIHFWVRIJHQRW\SHVH[ELUWKW\SHDQG\HDURIELUWKZHUHVWXGLHG
*HQRW\SHKDGDVLJQLFDQW3HIIHFWRQDYHUDJHEUHGLDPHWHUDQGSURSRUWLRQRINHPSDQG
$UNKDUPHULQR*KH]HOFURVVEUHHGVKDGORZHUGLDPHWHUZLWKDVPDOOHUSURSRUWLRQRINHPS7KH
WZRGLIIHUHQFHVLQEUHFKDUDFWHULVWLFVWKDWZHUHDWWULEXWDEOHWRVH[ZHUHEUHGLDPHWHUYDULDELOLW\
DQGSURSRUWLRQRIPHGXOODWHGEUHDQGIHPDOHVKDGKLJKHUDPRXQWVWKDQPDOHVIRUERWKWUDLW$V
DUHVXOWRIWKHVWDWLVWLFDODQDO\VLVLWZDVIRXQGWKDWFURVVLQJZLWK$UNKDUPHULQRJHQHUDOO\KDG
SRVLWLYHHIIHFWVRQWKHHHFHIDYRXULQJLWVXVHLQWKHKDQGZRYHQDXWKHQWLFFDUSHWLQGXVWU\
.H\ZRUGVFDUSHWZRRO$UKDUPHULQR0RJKDQL*KH]HOFURVVEUHHG
-RXVSHYGXMSR
6KHHSEUHHGLQJSOD\VDQLPSRUWDQWUROHLQDQLPDOSURGXFWLRQLQ,UDQ6KHHSKDYHWKHDELOLW\
WRWUDQVIRUPSRRUJUDVVODQGVZKLFKDUHZLGHVSUHDGLQ,UDQLQWRYDOXDEOHSURGXFWVOLNHPHDW
PLONZRRODQGVNLQ,Q,UDQVKHHSPHDWVKHHSPLONDQGSURGXFWVDUHYDOXDEOHDQGJHQHUDOO\
SUHIHUUHGFRPPRGLWLHV7KHYDOXHRILQGLJHQRXVEUHHGVLVLQWKHLUDELOLW\WRFRQWLQXHSURGXFWLRQ
XQGHUSRRUIHHGLQJDQGPDQDJHPHQWFRQGLWLRQVDQGLQWKHSRVVLELOLW\WKDWWKHLUJHQHWLFPDNHXS
PD\WQHZHQYLURQPHQWDOFRQGLWLRQVZKLFKPLJKWRFFXULQWKHIXWXUH<LOPD]HWDO
7KHLQGLJHQRXV*KH]HODQG0RJKDQLVKHHSEUHHGVDUHUDLVHGLQWKHQRUWKHDVWRI,UDQ,QWKLV
UHJLRQWKHVHWZRVKHHSEUHHGVKDYHEHHQDURXQGIRUPRUHWKDQDKXQGUHG\HDUV7KHUHODWLYHO\
PRUHIDYRXUDEOHWRSRJUDSK\DQGGHQVHUSRSXODWLRQKDYHFRQWULEXWHGWRPDNHWKHUHJLRQRQHRI
WKHPRVWLQWHQVLYHO\FXOWLYDWHGLQWKHFRXQWU\7KHUHIRUHVKHHSLQWKLVUHJLRQKDYHWRFRPSHWH
ZLWKHOGFURSV
0RVWRIWKHZRROSURGXFHGE\WKHLQGLJHQRXVVKHHSEUHHGVLQ,UDQLVRIFRDUVHDQGPL[HGW\SH
ZRROXVHGLQWKHKDQGZRYHQDXWKHQWLFFDUSHWLQGXVWU\,WLVUHSRUWHGWKDWWKHUHDUHWKRXVDQG
KDQGZRYHQFDUSHWSURGXFWLRQZRUNEHQFKHVVSUHDGWKURXJKRXW,UDQDQGDERXWPLOOLRQP
KDQGZRYHQFDUSHWLVEHLQJSURGXFHGDQQXDOO\7KLVLVDQLPSRUWDQWRFFXSDWLRQSDUWLFXODUO\IRU
WKHZRPHQOLYLQJLQUXUDODUHDV7KHDXWKHQWLFKDQGZRYHQFDUSHWW\SHRIZRROLVSUHIHUUHGLILWLV
FRDUVHDQGPL[HGW\SHDVWKHWKLFNEUHKHOSVWKHWKUHDGWRVWDQGXSULJKWLQWKHFDUSHW'HPLUDQG

%DVSLQDU(YHQWKRXJKQDWLYHEUHHGVRI*KH]HODQG0RJKDQLSURGXFHZRROWKDWLVXVHIXO
IRUWKHFDUSHWVHFWLRQXQLIRUPLW\RIWKHZRROGLDPHWHUDORQJWKHVWDSOHDQGGLIIHUHQWUHJLRQVRI
ERG\LVKLJKDQGVKRXOGEHUHGXFHG,QDGGLWLRQWKHVHWZREUHHGVKDYHWKHSRWHQWLDOWRSURGXFH
QHUZRROVWRPHHWWKH)XVWLDQV\VWHPTXDOLFDWLRQV6KRGMDHWDO&URVVEUHHGLQJZLWK
WKHH[RWLF$UNKDUPHULQREUHHGWRUHDFKWKHVHJRDOVVWDUWHGLQWKHUHJLRQGXULQJ
0DQ\FURVVEUHHGLQJH[SHULPHQWVKDYHEHHQFRQGXFWHGWRHVWLPDWHWKHJHQHWLFHIIHFWVRIEUHHGV
RIVKHHSDQGW\SLFDOO\EXWQRWDOZD\VLQFUHDVHGODPESURGXFWLRQKDVEHHQWKHSULPDU\REMHFWLYH
RIVXFKH[SHULPHQWV:ROIHWDO.HPSHVWHUHWDO1HYHUWKHOHVVFRPSUHKHQVLYH
HYDOXDWLRQUHTXLUHVWKDWRWKHUIDFWRUVVXFKDVZRROSURGXFWLRQDQGTXDOLW\DOVREHFRQVLGHUHG
:RROLVDQDGGLWLRQDOVRXUFHRILQFRPHLQPRVWVKHHSRSHUDWLRQVDQGFDQUHSUHVHQWWRRI
JURVVLQFRPH&HGLOORHWDO7KHUHIRUHEUHHGHIIHFWVIRUWUDLWVWKDWLQXHQFHHHFHYDOXH
VKRXOGEHFRQVLGHUHGZKHQVHOHFWLQJEUHHGVIRUDFURVVEUHHGLQJV\VWHP,QWKLVREMHFWSUHYLRXV
SDSHUVLQWKLVVHULHVKDYHGHVFULEHGZRROFKDUDFWHULVWLFVRI*KH]HODQG0RJKDQLHZHVZKHQ
PDWHGZLWK$UNKDUPHULQRUDPVDQGWKHLUFURVVHV0RNKEHU7KHREMHFWLYHRIWKHFXUUHQW
VWXG\ZDVWRHYDOXDWHZRROFKDUDFWHULVWLFVRIWKLUGJHQHUDWLRQ$UNKDUPHULQR*KH]HO$U*K
DQG$UNKDUPHULQR0RJKDQL$U0RDQGGHVFULEHWKHJHQHWLFDQGHQYLURQPHQWDOHIIHFWVRQ
EUHTXDOLW\RIFURVVEUHHGV
1EXIVMEPWERHQIXLSHW
7KHSUHVHQWVWXG\LVSDUWRIDJHQHUDOSURMHFWWRLPSURYHVKHHSSURGXFWLRQE\FURVVEUHHGLQJ
ZLWKQHZRROEUHHGVLQWKHQRUWKZHVWRI,UDQDUHJLRQZKLFKERUGHUV7XUNH\LQWKHZHVWDQG
ZLWK$]HUEDLMDQLQWKHQRUWK7KHDUHDKDVPRGHUDWHVXPPHUVZLWKKXPLGDQGFRROZLQWHUV
DQGDPRGHUDWHDPRXQWRIVQRZ7KHDYHUDJHDQQXDOWHPSHUDWXUHLVWR&7KHWKLUG
JHQHUDWLRQRI$U*KDQG$U0R FURVVEUHHGVKHHSZHUHSURGXFHGDQGPDLQWDLQHGDWWKH.KDODW
3RVKDQ5HVHDUFK6WDWLRQDIOLDWHGWRWKH8QLYHUVLW\RI7DEUL]ORFDWHGLQ7DEUL],UDQ7KHZRRO
VDPSOHVRIWKH$U*KDQG$U0RJHQRW\SHVZKLFKZHUHFROOHFWHGLQWKHVWDWLRQZHUHXVHGLQWKH
VWXG\7KHWZRJHQRW\SHVZHUHPDQDJHGLQWKHVDPHRFNLQWKHVWDWLRQ%RWKPDOHDQGIHPDOH
RFN ZHUH NHSW LQGRRUV GXULQJ WKH ZLQWHU PRQWKV DQG WKHQ WDNHQ WR SDVWXUH DV WKH ZHDWKHU
FRQGLWLRQVLPSURYHG,QWKHVWDWLRQVKHDULQJZDVGRQHRQFHD\HDUXVXDOO\DWWKHHQGRI-XQH
%HIRUHVKHDULQJZRROVDPSOHVZHUHWDNHQIURPWKHVLGHIURPWKHULEUHJLRQRI$U*KDQG
$U0RFURVVEUHGVKHHSDVSUHVHQWHGE\VH[DQGJHQRW\SHLQ7DEOH
7KHIROORZLQJREMHFWLYHPHDVXUHPHQWVZHUHFRQGXFWHGRQHDFKVDPSOHXVLQJWKHUHIHUHQFHG
LQWHUQDWLRQDORUQDWLRQDOVWDQGDUGPHWKRGVLQ$QLPDO)LEUH7HFKQRORJ\/WG7DEUL]8QLYHUVLW\
,UDQ(DFKUDZVDPSOHZDVPHDVXUHGVWDSOHOHQJWK6/E\UXOHURQYHOYHWDQGWKHQEOHQGHG
VFRXUHGGULHGDQGFRQGLWLRQHGLQDVWDQGDUGDWPRVSKHUH&DQG5+IRURWKHU
PHDVXUHPHQWV7KHHQWLUHVDPSOHZDVXVHG6QLSSHWVRIPPOHQJWKZHUHFXWZLWKD+HDY\
'XW\ 6HFWLRQLQJ 'HYLFH JXLOORWLQH DQG VSUHDG RQ DQ RSHQ JODVV VOLGH DQG WKHQ WKH VOLGHV
ZHUHDQDO\VHGE\FRPSXWHUDVVLVWHG,PDJH$QDO\VLVPHWKRG7KHSK\VLFDOFRPSRQHQWVRIWKH
LQVWUXPHQWIRUWDNLQJPHDVXUHPHQWVFRQVLVWHGRIDZHEPDNHUDQLPDJHDFTXLVLWLRQV\VWHPDQG
DFRPSXWHUIRULPDJHSURFHVVLQJ3URSULHWDU\VRIWZDUHZDVXVHGWRDQDO\VHEUHLPDJHVVWRUHG
8EFPI2YQFIVSJ*WGVSWWFVIIHWF]KIRSX]TIERHWI\
%V+L
%V1S

1EPI
*IQEPI
1EPI
*IQEPI

LQWKHFRPSXWHUPHPRU\7KHIROORZLQJWUDLWVZHUHDQDO\VHGDYHUDJHEUHGLDPHWHU$)'EUH

GLDPHWHUYDULDELOLW\)'9SURSRUWLRQRIPHGXOODWHGEUHV30)SURSRUWLRQRINHPSEUHV
3.DQGFRPIRUWIDFWRU&)$IWHUGHWHUPLQDWLRQRIWKHDYHUDJHEUHGLDPHWHUSURSRUWLRQ
RIPHGXOODWHGNHPSDQGFRPIRUWIDFWRUZHUHPHDVXUHGLQWKHVDPHVDPSOHSURGXFHGIRUHDFK
VKHHS7KHSURSRUWLRQRIPHGXOODWHGEUHE\QXPEHULVGHQHGE\3URMHFWLRQ0LFURVFRSH
DVWKHSURSRUWLRQRIEUHVZLWKOHVVWKDQFDQQHOLQEUH'DWDIRUPHGXOODWHGEUHVZHUH
RQO\DQDO\VHGLQZKLWHDQGOHVVFRORXUHGVDPSOHVEHFDXVHWKH3URMHFWLRQ0LFURVFRSHVHHPV
WRRYHUHVWLPDWHWKHSURSRUWLRQLQFRORXUHGEUHV'HOJDGRHWDO0HGXOODWHGEUHVDUH
KROORZDQGODUJHLQGLDPHWHUDQGDUHVWLIIDQGKDUVK7KH\DOVRDSSHDUOLJKWHUFRORXUHGZKHQ
G\HG7KHUHIRUHPHGXOODWHGEUHVDUHXQGHVLUDEOH7KHSURSRUWLRQRINHPSVE\QXPEHULV
GHQHGE\WKHSURMHFWLRQPLFURVFRSHDVWKHSURSRUWLRQRIEUHVZLWKPRUHWKDQPHGXOODLQ
EUH.HPSLVDWHFKQLFDOWHUPUHIHUULQJWRDIUDFWLRQRIPHGXOODWHGEUHV7KHVHSDUDWHPHQWLRQ
RINHPSVZDVHVWDEOLVKHGE\WKH$PHULFDQ6RFLHW\IRU7HVWLQJDQG0DWHULDO6WDQGDUGV$67$0V
&RPPLWWHH'ZKLFKUHFRJQLVHGWKDWNHPSVDUHWKHVRXUFHRIPRUHYLVLEOHSUREOHPVLQEUH
SURFHVVLQJWKDQPHGXOODWHGEUH0F*UHJRUDQG%XWOHUDQGWKHSHUFHQWDJHIRUNHPS
PHGXOODDQGFRPIRUWIDFWRULVGHWHUPLQHGZLWKDFRXQWRIEUHVLQHDFKVDPSOH)'9ZDV
PHDVXUHGE\FDOFXODWLQJWKHFRHIFLHQWRIYDULDELOLW\IRUHDFKZRROVDPSOH)DKP\
7UDLWVZHUHWHVWHGIRUQRUPDOGLVWULEXWLRQDQGWUDQVIRUPHGZKHQQHFHVVDU\2QO\WKHFRPIRUW
IDFWRUVKRZHGDQRUPDOGLVWULEXWLRQ$ORJDULWKPLFWUDQVIRUPDWLRQ\ ORJ[ZDVSHUIRUPHG
IRU $)' DQG 6/ 3. DQG 30) ZDV WUDQVIRUPHG ZLWK WKH IXQFWLRQ RI %R[ DQG &R[ \
['HOJDGR7KHIROORZLQJVWDWLVWLFDOPRGHOZDVXVHGIRUHVWLPDWLRQRI
[HGHIIHFWV
<LMNO *3L6M7EN<EOHLMNO
ZKHUH<LMNOUHIHUVWRDQREVHUYDWLRQRQDQLQGLYLGXDODQLPDOLVWKHFRQVWDQWFRPPRQWRDOO
LQGLYLGXDOV*3LWKH[HGHIIHFWRIJHQRW\SHL $U*KDQG$U0R6MWKH[HGHIIHFWRIVH[
M PDOHIHPDOH7ENWKH[HGHIIHFWRIELUWKW\SHN VLQJOHDQGWZLQ<EOWKH[HG
HIIHFWRI\HDURIELUWKO DQGDQGHLMNOLVWKHUHVLGXDOHIIHFW
7KHJHQHUDOOLQHDUPRGHOSURFHGXUH352&*/0RI6$66$6,QVWLWXWH,QF&DU\1&ZDV
XVHGWRFDOFXODWHDQGVHSDUDWHPHDQV'XQFDQVPXOWLSOHUDQJHWHVWDQGOHDVWVTXDUHPHDQVIRU
WKHFKDUDFWHULVWLFVUHFRUGHG
,WLVGLIFXOWWRFRPSDUHWKHUHVXOWVIURPWKHOLWHUDWXUHZLWKWKHUHVXOWVSUHVHQWHGKHUH'LIIHUHQW
PHWKRGVVXFKDVDLURZ3URMHFWLRQ0LFURVFRSHRU2)'$DUHXVHGLQODERUDWRULHVIRUGHWHUPLQLQJ
EUHWUDLWV,WLVQRWDOZD\VFOHDUZKHWKHUSXEOLVKHGJXUHVFRPHIURPFRPSOHWHRUGHKDLUHG
HHFHV,QDGGLWLRQGHQLWLRQVIRUVRPHWUDLWVVXFKDVNHPSRUPHGXOODWHGEUHYDU\([WUHPH
FDUHPXVWEHWDNHQWRVHOHFWFRPSDUDEOHGDWDVHWV/XSWRQHWDO0HDQVWDQGDUGGHYLDWLRQ
PLQLPDDQGPD[LPDIRUPHDVXUHGWUDLWV$)'6/)'93.30)DQG&)KDYHEHHQSUHVHQWHG
E\JHQRW\SH$U*KDQG$U0RLQ7DEOH
7KHDYHUDJHEUHGLDPHWHULQ$U*KDQG$U0RLQWKHWKLUGJHQHUDWLRQZDVPDQG
PUHVSHFWLYHO\7KHEUHGLDPHWHURIWZRJHQRW\SHVLVLQWHUPHGLDWHDQGFRPSDUDEOHWRFDUSHW
ZRROEUHHGVPIRU%DUNLVKHHSPIRU$UDELVKHHSPIRU2VVLPLDQGP
IRU5DKPDQL7DEEDDHWDO6KRGMDHWDOUHSRUWHGDQGPIRU*KH]HO
DQG 0RJKDQL SXUH EUHHGV UHVSHFWLYHO\ )'9 LQ$U*K DQG$U0R ZHUH DQG
UHVSHFWLYHO\7KH)'9LQFDUSHWZRROEUHHGVYDULHVFRQVLGHUDEO\DQGWKHSUHVHQWGDWD

8EFPI1IERWXERHEVHHIZMEXMSR7( QMRMQYQERHQE\MQYQJSVQIEWYVIQIRXWF]KIRSX]TI
+IRSX]TI
1IEWYVIQIRX
2S
1IER
7(
1MR
1E\
%V+L
%*(Q
*(:
70GQ
4/
41*
'*
%*(Q
*(:
70GQ
4/
41*
'*

%V1S
%V+L%VOLEVQIVMRS+LIÎP%V1S%VOLEVQIVMRS1SKLERM
%*(EZIVEKIFVIHMEQIXIV*(:FVIHMEQIXIVZEVMEFMPMX]70WXETPIPIRKXL4/TVSTSVXMSRSJ
OIQT41*TVSTSVXMSRSJQIHYPPEXIHFVI'*GSQJSVXJEGXSV
IDOOVZLWKLQWKLVUDQJH6KRGMDHWDOUHVXOWVIRUWKLVWUDLWLQSXUHEUHHGVZHUHDQG

UHVSHFWLYHO\7KHZLGHUDQJLQJ)'9LQWKLVVWXG\UHHFWVWKHDEVHQFHRIVHOHFWLRQIRU
WKLVWUDLWLQSDVWJHQHUDWLRQV/XSWRQHWDOUHSRUWHG)'9LQ)LQHZRROVKHHSEUHHGRIDERXW
P,WVKRZVWKDW)'9LQVWXGLHGFURVVEUHHGVDUHYHU\KLJKDQGLWPXVWEHUHGXFHGE\VHOHFWLRQ
7DEOHVKRZVWKDWVWDSOHOHQJWKLQ$U*KDQG$U0RZDVFPDQGFPUHVSHFWLYHO\7KH
REVHUYHGGDWDLQWKHSUHVHQWVWXG\LVVPDOOHUWKDQWKHFPUDQJHLQRWKHU0LGGOH(DVWHUQ
FRXQWULHV6KRGMDHWDOUHSRUWHGVWDSOHOHQJWKIRU*KH]HODQG0RJKDQLEUHHGVFP
DQGFPUHVSHFWLYHO\7KHDQGRIPHGXOODWHGEUHV30)LQWKHSUHVHQWVWXG\
ZDVVLPLODUWRWKDWUHSRUWHGIRUWZRJHQRW\SHVLQVHFRQGJHQHUDWLRQ0RNKEHUDQGVPDOOHU
WKDQDQGLQSXUHEUHHGVRI*KH]HODQG0RJKDQLUHVSHFWLYHO\6KRGMDHWDO
7KLVDPRXQWLQQHZRROEUHHGVLVDERXWWR3URSRUWLRQRINHPSEUH3.LQ$U*K
DQG$U0RZDVDQGUHVSHFWLYHO\+RZHYHUWKHODUJHYDULDWLRQLQSURSRUWLRQRINHPS
EUHDQXQGHVLUDEOHWUDLWGHPRQVWUDWHVDQRSSRUWXQLW\IRULPSURYLQJ$U*KDQG$U0RHHFH
TXDOLW\E\VHOHFWLRQ7KHDPRXQWRIPHGXOODWHGEUHVLQWKHFXUUHQWVWXG\IDOOVZLWKLQWKHUDQJH
RIWRUHSRUWHGIRUFDUSHWZRROEUHHGVLQ$VLD0HKWDHWDO
7KH FRPIRUW IDFWRU LV WKH SHUFHQWDJH RI EUHV OHVV WKDQ PLFURQ DQG LV GHWHUPLQHG ZKHQ
PHDVXULQJ WKH EUH GLDPHWHU GLVWULEXWLRQ RI D VDPSOH XVLQJ 3URMHFWLRQ 0LFURVFRSH 2)'$
HWF7KH LPSRUWDQFH RI WKH FRPIRUW IDFWRU UHODWHV WR WKH IHHO RI D IDEULF RQ D ZHDUHUV VNLQ
)DEULFPDGHIURPZRROZLWKDKLJKFRPIRUWIDFWRU!ZLOOKDYHOHVVULJLGEUHVWKDWEHQG
PRUHHDVLO\DQGWKHUHIRUHIHHOOHVVSULFNO\$:7$,QWKHSUHVHQWVWXG\WKHFRPIRUW
IDFWRUIRU$U*KDQG$U0RZDVDQGUHVSHFWLYHO\&RPIRUWIDFWRUKDVQRWEHHQ
UHSRUWHGLQFDUSHWZRROEUHHGVVRZHZHUHXQDEOHWRFRPSDUHWKHVHUHVXOWVZLWKRWKHUOLWHUDWXUH
1RQHWKHOHVVLWVHHPVWKDWWKHFRPIRUWIDFWRULVORZLQFDUSHWZRROVKHHSEUHHGVGXHWRWKHLU
KLJKDYHUDJHEUHGLDPHWHU

7KHYDOXHVSUHVHQWHGLQ7DEOHDUHOHDVWVTXDUHPHDQVRIWKHXQWUDQVIRUPHGGDWDWKHDWWDFKHG
SUREDELOLWLHV DQG WHVWV UHODWH WR WKH WUDQVIRUPHG GDWD7KLV SURFHGXUH ZDV IROORZHG DV EDFN
WUDQVIRUPDWLRQRIOHDVWVTXDUHPHDQVRIWUDQVIRUPHGYDOXHVLVPDWKHPDWLFDOO\LQDSSURSULDWH
7KHLQXHQFHRI[HGHIIHFWVJHQHWLFJURXSVH[ELUWKW\SHDQG\HDURIELUWKRQZRROWUDLWV
ZDVVWXGLHG
%ZIVEKIFVIHMEQIXIV
$ODUJHYDULDQFHLVJLYHQLQOLWHUDWXUHUHJDUGLQJWKH[HGHIIHFWVLQXHQFHRQEUHGLDPHWHU,Q
WKHSUHVHQWVWXG\JHQRW\SHKDGDVLJQLFDQWHIIHFW3RQDYHUDJHEUHGLDPHWHUDQG$U*K
FURVVEUHHGVVKRZHGDVLJQLFDQWO\ORZHUGLDPHWHUWKDQ$U0REXWWKHGLIIHUHQFHZDVRQO\DERXW
P'LIIHUHQFHVEHWZHHQJHQRW\SHVZHUHIRXQGE\%XQJHHWDODQG/XSWRQHWDO
EXWQRWE\<LOPD]HWDODQG0RNKEHU2QHH[SODQDWLRQIRUWKHGLIIHUHQFHV
EHWZHHQWZRJHQRW\SHVVHHPVWREHWKHGLUHFWHIIHFWVRI*KH]HODQG0RJKDQLSXUHEUHHGV<HDU
RIELUWKKDGDVLJQLFDQWHIIHFW3RQ$)'7KLVUHVXOWZDVLQDJUHHPHQWZLWKWKHQGLQJV
RI,QLJXH]HWDODQG0RNKEHU$QLPDOVZKLFKZHUHERUQLQKDGOHVV$)'
WKDQDQLPDOVWKDWZHUHERUQLQ7DEOH7KHUHZDVQRVLJQLFDQWHIIHFWRIVH[RQ$)'
7DEEDDHWDODQG0HKWDHWDOUHSRUWHGVLPLODUUHVXOWVIRUWKHHIIHFWRIVH[%LUWK
W\SHDIIHFWHG3$)'LQWZRJHQRW\SHVDQGVLQJOHERUQDQLPDOVKDGPRUHEUHGLDPHWHU
WKDQWZLQV0RNKEHUUHSRUWHGDVLPLODUUHVXOWIRUWKHHIIHFWRIELUWKW\SHRQ$)'LQVHFRQG
JHQHUDWLRQFURVVEUHHGV
*MFVIHMEQIXIVZEVMEFMPMX]
7KHLQXHQFHRI[HGHIIHFWVRQ)'9LQ)RI$U*KDQG$U0RZDVH[DFWO\WKHVDPHDVWKHUHVXOWV
RI0RNKEHUIRU)RIFURVVEUHHGV*HQRW\SHGLGQRWDIIHFW)'9ZKLFKLVLQDJUHHPHQW
8EFPI0IEWXWUYEVIQIERWWXERHEVHIVVSVWERHIJJIGXSJJEGXSVWEJJIGXMRKIIGIGLEVEGXIVMWXMGWEGGSVHMRKXS
KIRSX]TIWI\]IEVSJFMVXLERHFMVXLX]TI
7YFGPEWW
+IRSX]TI
%V+L
%V1S
7I\
1EPI
*IQEPI
=IEVSJFMVXL

&MVXLX]TI
7MRKPI
8[MRW

%*(
Q
*(:
70GQ
4/
41*

'*

E
F
RW

E
F

RW

E
F
RW

F
E
RW

RW

F
E

E
F

E
F
RW

RW

RW

RW

E
F
RW

RW

RW

RW

RW

RW

%*(EZIVEKIFVIHMEQIXIV*(:FVIHMEQIXIVZEVMEFMPMX]70WXETPIPIRKXL4/OIQTFVIW41*
TVSTSVXMSRSJQIHYPPEXIHFVIW'*GSQJSVXJEGXSV
RWRSRWMKRMGERX4 4 MRIEGLSJXLIWYFKVSYTWQIERWJSPPS[IHF]HMJJIVIRXWYTIVWGVMTXW
HMJJIVWMKRMGERXP]

ZLWKWKHQGLQJVRI<LOPD]HWDO6H[3DQGELUWKW\SH3KDGDVLJQLFDQW

HIIHFWRQ)'90F*UHJRUDQG%XWOHUGLGQRWQGDQ\VLJQLFDQWHIIHFWRIVH[RQ)'9RI
$XVWUDOLDQ$OSDFDV,QFRQWUDVW'DVKDEHWDOUHSRUWHGWKDWVH[KDGDVLJQLFDQWHIIHFWRQ
)'9LQ1DHLQLVKHHS)'9IRUIHPDOHVZDVKLJKHUWKDQIRUPDOHVDQGIRUVLQJOHVZDVKLJKHUWKDQ
IRUWZLQV7KHPDLQUHDVRQIRUVH[GLIIHUHQFHVPD\EHKRUPRQDOGLIIHUHQFHVEHWZHHQWZRVH[HV
DQGWKHJHQHVORFDWHGRQWKHVH[FKURPRVRPHV,WVHHPVWKDWIHPDOHVDUHXQGHUPRUHPHWDEROLF
VWUHVVHVWKDQPDOHVEHFDXVHRISUHJQDQF\DQGPLONSURGXFWLRQDQGWKHUHIRUHWKHDYDLODELOLW\
RIQXWULHQWVWRZRROIROOLFOHVXFWXDWHV7KXV)'9ZRXOGEHKLJKHUIRUIHPDOHV5HVHDUFKKDV
VKRZQWKDW)'9LQFUHDVHVH[SRQHQWLDOO\ZLWKEUHGLDPHWHU5DIDWHWDO6RLWFRXOGEH
FRQFOXGHGWKDWKLJKHU)'9LQVLQJOHERUQDQLPDOVLVWKHRXWFRPHRIWKHLUKLJKEUHGLDPHWHULQ
FRQWUDVWWRWZLQERUQDQLPDOV
7XETPIPIRKXL
*HQRW\SHJURXSGLGQRWKDYHDVLJQLFDQWHIIHFWRQ6/ZKLFKLVLQDJUHHPHQWZLWK%XQJHHW
DODQG6KRGMDHWDO1RGLIIHUHQFHVEHWZHHQVH[HVFRXOGEHIRXQGIRU6/7KHVH
UHVXOWVFRUUHVSRQGZLWKVRPHUHVHDUFKEXWDUHFRQWUDU\WRRWKHUVWXGLHV,QLJXH]HWDO'LFN
DQG6XPQHU'DVKDEHWDO6/ZDVDIIHFWHGE\\HDURIELUWKDQGELUWKW\SH3
WKHVLJQLFDQFHRI\HDURIELUWKLVLQDJUHHPHQWZLWK/XSWRQHWDODQG0RNKEHU
DQGLVFRQWUDU\WR6LGZHOOHWDO$QLPDOVZKLFKZHUHERUQLQKDGVKRUWHU6/WKDQ
WKRVHERUQLQDQGWKLVGLIIHUHQFHZDVVLJQLFDQW37KLVGLIIHUHQFHZDVSUREDEO\
WKHUHVXOWRIWKHEDGQXWULWLRQVLWXDWLRQLQ$VVKRZQLQ7DEOHELUWKW\SHKDGVLJQLFDQW
HIIHFWVRQ6/3DQGVLQJOHVKDGORQJHU6/WKDQWZLQV,WLVSRVVLEOHWKDWSRRUQXWULWLRQ
HVSHFLDOO\IRUGDPVZLWKWZLQODPEVGXULQJHDUO\SRVWQDWDOOLIHLPSRVHVDSHUPDQHQWOLPLWDWLRQ
RQEUHSURGXFWLRQDELOLW\DQGEUHGLDPHWHURIODPE'LFNDQG6XPQHU
4VSTSVXMSRSJOIQTERHQIHYPPEXIHFVIW
,Q WKH SUHVHQW VWXG\ NHPS DQG PHGXOODWHG EUHV DUH GLVWLQJXLVKHG 6RPH DXWKRUV JLYH WKH
SURSRUWLRQRIFRDUVHKDLUFHUGDVDQGWKHGLDPHWHUWKDWJRHVZLWKLW:XU]LQJHU$\DOD
DQG3DUUD,QLJXH]HWDOGHQHGNHPSDVSURSRUWLRQRIIUDJPHQWHGDQG
FRQWLQXRXVPHGXOODWHGEUH7KHUHVXOWVLQ7DEOHVKRZDVLJQLFDQWHIIHFW3RIJHQRW\SH
RQ3.,QWKLVVWXG\$U0RFURVVEUHHGVKDGKLJKHU3.WKDQ$U*K7KLVUHVXOWLVLQDJUHHPHQW
ZLWKWKHUHVXOWVUHSRUWHGE\7HNLQHWDODQGdRODNRJOXDQG2]E\D]6KRGMDHWDO
UHSRUWHGWKDW0RJKDQLEUHHGVKHHSKDVDKLJKHUSURSRUWLRQRINHPSWKDQ*KH]HOVRLW
FRXOGEHFRQFOXGHGWKDWGLUHFWHIIHFWRI0RJKDQLEUHHGKDVFDXVHGWKHGLIIHUHQFHVEHWZHHQWZR
JHQRW\SHJURXSV0RNKEHUUHSRUWHGVLPLODUUHVXOWVIRUWKHHIIHFWRIJHQRW\SHRQ3.LQWKH
VHFRQGJHQHUDWLRQ(IIHFWVRI6H[ELUWKW\SHDQG\HDURIELUWKRQ3.ZHUHQRWVLJQLFDQW7KHVH
UHVXOWVZHUHLQDJUHHPHQWZLWKWKHQGLQJVRI,QLJXH]HWDODQG:XU]LQJHUHWDO
1R GLIIHUHQFHV EHWZHHQ JHQRW\SH JURXSV \HDU RI ELUWK DQG ELUWK W\SH FRXOG EH IRXQG IRU
PHGXOODWHGEUHV7DEOH+RZHYHUWKHSURSRUWLRQRIPHGXOODWHGEUHVZDVKLJKHULQ$U0RDQG
VLQJOHERUQDQLPDOV7KHVHUHVXOWVDUHLQDJUHHPHQWZLWK7DEEDDHWDODQGdRODNRJOXDQG
2]E\D]EXWFRQWUDU\WRRWKHUVWXGLHV/XSWRQHWDOdRUHNFLDQG(YUXP6H[
KDGDKLJKO\VLJQLFDQWHIIHFW3RQ30)ZKLFKLVLQDJUHHPHQWZLWKWKHUHVXOWVUHSRUWHG
E\/XSWRQHWDORQ'RUVHWDQG7H[HOEUHHGDQG0RNKEHURQ$U*KDQG$U0R
FURVVEUHHGV5HJDUGLQJ7DEOHIHPDOHVKDGKLJKHU30)WKDQPDOHVYHUVXV7KLV
UHVXOWFDQEHDWWULEXWHGWRGHOD\LQIROOLFOHPDWXUDWLRQLQIHPDOHVEHFDXVHRIWKHLUSK\VLRORJLFDO
FRQGLWLRQV30)LQVLQJOHVZDVKLJKHUWKDQWZLQVEXWWKLVGLIIHUHQFHZDVQRWVLJQLFDQW3!
5HJDUGLQJKLJKHU$)'LQVLQJOHVWKDQWZLQVWKLVUHVXOWLVORJLFDODQGDFFHSWDEOHEHFDXVHKLJK
SRVLWLYHFRUUHODWLRQKDVEHHQUHSRUWHGEHWZHHQ$)'DQG30)6DIDULHWDO

'SQJSVXJEGXSV
&RPSDULVRQVRIWKHFRPIRUWIDFWRUVKRXOGEHPDGHZLWKFDUH,QWKHSUHVHQWVWXG\WKHGHQLWLRQ
LVYDOLGIRUSURSRUWLRQVRIEUHVZLWKDGLDPHWHUOHVVWKDQP$\DODDQG3DUUD
GHQHLWDVEUDGHVFHUGDGDGHKDLUHGEUHZKHUHDV7HNLQHWDOGHQHLWDVQRQ
PHGXOODWHGEUHDQG0DUWLQH]HWDODVDFRPELQDWLRQRIXQPHGXOODWHGDQGIUDJPHQWHG
PHGXOODWHGEUH1RQHRIWKHVWXGLHGHIIHFWVKDGDVLJQLFDQWLQXHQFHRQFRPIRUWIDFWRU7DEOH
7KLVWUDLWKDVQRWEHHQVWXGLHGLQFDUSHWZRROEUHHGVVRLWLVKDUGWRGLVFXVVWKHYDOLGLW\
RULQYDOLGLW\RIWKHJLYHQUHVXOWV&)LQ$U*KFURVVEUHHGVPDOHVDQGWZLQVZDVKLJKHUWKDQ
$U0RIHPDOHVDQGVLQJOHVUHVSHFWLYHO\DQGWKHVHGLIIHUHQFHVZHUHQRWVLJQLFDQW3!EXW
ORJLFDOEHFDXVHDQLQFUHDVHLQ$)'DQGDVLPXOWDQHRXVGHFUHDVHLQFRPIRUWIDFWRUKDYHEHHQ
UHSRUWHG7KLVUHVXOWLVLQOLQHZLWK3DUUDDQG0DUWLQH]HWDO,QDGGLWLRQDKLJKO\
QHJDWLYHFRUUHODWLRQKDVEHHQUHSRUWHGDPRQJWKHVHWZRWUDLWV,QLJXH]HWDO$FFRUGLQJ
WRWKHUHVXOWVRIWKLVVWXG\FURVVEUHHGLQJZLWK$UNKDUPHULQRKDVVKRZQIDYRXUDEOHHIIHFWVRQ
ZRROFKDUDFWHULVWLFVLPSURYHPHQWRI$]HUEDLMDQQDWLYHEUHHGV&URVVEUHHGVKHHSKDYHVKRZQ
WRSURGXFHQHUZRROWKDQQDWLYHEUHHGVZLWKEHWWHUXQLIRUPLW\%\FRQGXFWLQJZHOOSODQQHG
GHVLJQVFURVVEUHHGVFDQVXSSO\WKHZRROQHHGHGIRUQHFDUSHWLQGXVWULHV,PSURYHPHQWVLQ
PDQDJHPHQWDQGEUHHGLQJVWUDWHJLHVVKRXOGEHFDUULHGRXWDWWKHVDPHWLPH
6IJIVIRGIW
$:7$$XVWUDOLDQ:RRODQG7H[WLOH$VVRFLDWLRQ:RROGLDPHWHUIDFWDQGFWLRQ$XVWUDOLDQ:RRODQG7H[WLOH
$VVRFLDWLRQ$YDLODEOHDWKWWSZZZDZWDFRPDX3XEOLFDWLRQV)DFW6KHHWV)DFW6KHHWKWP
$\DOD&&DUDFWHUVWLFDVIVLFDVGHODEUDGHOODPVMRYHQHV3URJUHVVLQ6RXWK$PHULFDQ&DPHOLGV5HVHDUFK
($$33XEOLFDWLRQ1RSS
%XQJH5'/7KRPDV7*1DVKDQG&-/XSWRQ3HUIRUPDQFHRI+DLU%UHHGVDQG3UROLF:RRO%UHHGVRI
6KHHSLQ6RXWKHUQ,OOLQRLV:RRO3URGXFWLRQDQG)OHHFH4XDOLW\-RXUQDORI$QLPDO6FLHQFH
&HGLOOR50:+RKHQERNHQDQG-'UXPPRQG*HQHWLFDQGHQYLURQPHQWDOHIIHFWVRQDJHDWUVWHVWUXVDQGRQ
ZRRODQGODPESURGXFWLRQRIFURVVEUHGHZHODPEV-RXUQDORI$QLPDO6FLHQFH
dRODNRJOX1DQG&g]HE\D]&RPSDULVRQRIVRPHSURGXFWLRQWUDLWVLQ0DO\DDQG$NNDUDPDQVKHHS7XUNLVK
-RXUQDORI9HWHULQDU\DQG$QLPDO6FLHQFHV
dRUHNFL6*DQG0(YUXP&RPSDUDWLYHVWXGLHVRQWKHSURGXFWLRQSHUIRUPDQFHVRI&KLRVDQG,PUR]EUHHGVNHSW
XQGHUVHPLLQWHQVLYHFRQGLWLRQXV,,0LONSURGXFWLRQHHFH\LHOGVDQGFKDUDFWHULVWLFV7XUNLVK-RXUQDORI9HWHULQDU\
DQG$QLPDO6FLHQFHV
'DVKDE*0$(GULVV$$*KDUH$JKDML+0RYDVDJKDQG0$1LOIRURRVKDQ:RROEHUTXDOLW\RI1DHLQL
VKHHS3DNLVWDQ-RXUQDORI%LRORJLFDO6FLHQFHV
'HOJDGR-$9DOOH=DUDWHDQG&0DPDQL)LEHUTXDOLW\RID%ROLYLDQPHDWRULHQWHGOODPDSRSXODWLRQ3URJUHVV
LQ6RXWK$PHULFDQ&DPHOLGV5HVHDUFK($$33XEOLFDWLRQ
'HOJDGR-3HUVSHFWLYDVGHODSURGXFFLRQGHEUDGHOODPDHQ%ROLYLD'LVVHUWDWLRQ8QLYHUVLWlW+RKHQKHLP
*HUPDQ\
'HPLU + DQG + %DVSLQDU 3URGXFWLRQ SHUIRUPDQFH RI .LYLUFLN VKHHS XQGHU VHPLLQWHQVLYH FRQGLWLRQV
)HUWLOLW\PLONSURGXFWLRQERG\ZHLJKWDQGZRROFKDUDFWHULVWLFVRIHZHV-RXUQDORI)DFXOW\RI9HWHULQDU\0HGLFLQH
8QLYHUVLW\
'LFN-/DQG50:6XPQHU'HYHORSPHQWRIEHUDQGIROOLFOHFKDUDFWHULVWLFVUHODWHGWRZRROEXONLQ3HUHQGDOH
VKHHSRYHUWKHUVW\HDURIOLIH3URFHHGLQJVRIWKH1HZ=HDODQG6RFLHW\RI$QLPDO3URGXFWLRQ
)DKP\0+7KHDFFXPXODWLYHHIIHFWRI)LQQVKHHSEUHHGLQJLQFURVVEUHHGLQJVFKHPHVZRROSURGXFWLRQDQG
HHFHFKDUDFWHULVWLFV&DQDGLDQ-RXUQDORI$QLPDO6FLHQFH
,QLJXH]/&5$OHP$:DXHUDQG-0XHOOHU)OHHFHW\SHVEHUFKDUDFWHULVWLFVDQGSURGXFWLRQV\VWHPRIDQ
RXWVWDQGLQJOODPDSRSXODWLRQIURP6RXWKHUQ%ROLYLD6PDOO5XPLQDQW5HVHDUFK
.HPSHVWHU$-'&URVWRQ'5*X\DQG':-RQHV*URZWKDQGFDUFDVVFKDUDFWHULVWLFVRIFURVVEUHGODPEVE\
WHQVLUHEUHHGFRPSDUHGDWWKHVDPHHVWLPDWHGFDUFDVVVXEFXWDQHRXVIDWSURSRUWLRQ$QLPDO3URGXFWLRQ

/XSWRQ&-%$)UHNLQJDQG.$/H\PDVWHU(YDOXDWLRQRI'RUVHW)LQQVKHHS5RPDQRY7H[HODQG0RQWDGDOH
EUHHGVRIVKHHS,,,:RROFKDUDFWHULVWLFVRI)HZHV-RXUQDORI$QLPDO6FLHQFH
/XSWRQ&-$0F&ROODQG5+6WREDUW)LEHUFKDUDFWHULVWLFVRIWKH+XDFD\D$OSDFD6PDOO5XPLQDQW5HVHDUFK

0DUWLQH]=/&,QLJXH]DQG75RGULJXH],QXHQFHRIHIIHFWVRQTXDOLW\WUDLWVDQGUHODWLRQVKLSVEHWZHHQWUDLWV
RIWKHOODPDHHFH6PDOO5XPLQDQW5HVHDUFK
0F*UHJRU %$ DQG ./ %XWOHU 6RXUFHV RI YDULDWLRQ LQ EHU GLDPHWHU DWWULEXWHV RI$XVWUDOLDQ DOSDFDV DQG
LPSOLFDWLRQIRUHHFHHYDOXDWLRQDQGDQLPDOVHOHFWLRQ$XVWUDOLDQ-RXUQDORI$JULFXOWXUDO5HVHDUFK
0HKWD6&6.&KRSUQ9.6LQJK0$\XEDQG90DKURWUD3URGXFWLRQDQGTXDOLW\RIZRROLQ0DJUDEUHHG
RIVKHHS,QGLDQ-RXUQDORI$QLPDO6FLHQFH
0RNKEHU 0 (YDOXDWLRQ RI ZRRO FKDUDFWHULVWLFV RI $UNKDUPHULQR *KH]HO DQG $UNKDUPHULQR 0RJKDQL
FURVVEUHHGVKHHSLQVHFRQGJHQHUDWLRQ06F7KHVLV8QLYHUVLW\RI7DEUL],UDQ
3DUUD*(YDOXDFLRQGHOSRWHQFLDOSURGXFWLYRGHODOODPDHQODTXLQWDVHFFLRQPXQLFLSDOFKDUDQD7HVLV,QJ$JU
8QLYHUVLGDG0D\RUGH6DQ6LPRQ&RFKDEDPED%ROLYLD
5DIDW6$+GH5RFKDPEHDX0%ULPV5*7KpEDXOW6'HUHW]0%RQQHWDQG'$OODLQ&KDUDFWHULVWLFVRI
$QJRUDUDEELWEHUXVLQJRSWLFDOEHUGLDPHWHUDQDO\]HU-RXUQDORI$QLPDO6FLHQFH
6$6,QVWLWXWH,QF6$667$76RIWZDUH5HOHDVH6$6,QVWLWXWH,QF&DU\1&86$
6DIDUL(10)RJDUW\DQG$5*LOPRXU$UHYLHZRIJHQHWLFSDUDPHWHUHVWLPDWHVIRUZRROJURZWKPHDWDQG
UHSURGXFWLRQWUDLWVLQVKHHS/LYHVWRFN3URGXFWLRQ6FLHQFH
6KRGMD-7)DUDKYDVKDQG6$5DIDW7KHHYDOXDWLRQRIHHFHFKDUDFWHULVWLFVLQ$UNKDUPHULQR0RJKDQL)
FURVVEUHGV3URFHHGLQJVRIWKHWK$$$3$QLPDO6FLHQFH&RQJUHVVWK6HSWHPEHU.XDOD/XPSRXU0DOD\VLD
SS
6LGZHOO*05/:LOVRQDQG0(+RXULKDQ3URGXFWLRQLQVRPHSXUHEUHHGVRIVKHHSDQGWKHLUFURVVHV,9
HIIHFWRIFURVVEUHHGLQJRQZRROSURGXFWLRQ-RXUQDORI$QLPDO6FLHQFH
7DEEDD0-:$$O$]]DZLDQG'&DPSEHOO9DULDWLRQLQHHFHFKDUDFWHULVWLFVRI$ZDVVLVKHHSDWGLIIHUHQW
DJHV6PDOO5XPLQDQW5HVHDUFK
7HNLQ 0( 0 *XUNDQ DQG 5 .DGDN 7KH ZRRO FKDUDFWHULVWLFV RI$NNDUDPDQ$ZDVVL DQG WKHLU ) DQG %
FURVVEUHHGZLWK*HUPDQ%ODFNKHDGHG0XWWRQDQG+DPSVKLUH'RZQEUHHG$QLPDO%UHHGLQJDQG*HQHWLFV

:ROI%7&6PLWKDQG',6DOHV*URZWKDQGFDUFDVVFRPSRVLWLRQLQWKHFURVVEUHGSURJHQ\RIVL[WHUPLQDOVLUH
EUHHGVRIVKHHS$QLPDO3URGXFWLRQ
:XU]LQJHU0-'HOJDGR01XUQEHUJ$9DOOH=DUDWH$6WHPPHU*8JDUWHDQG-6RONQHU*HQHWLFDQGQRQ
JHQHWLFIDFWRUVLQXHQFLQJEHUTXDOLW\RI%ROLYLDQOODPDV6PDOO5XPLQDQW5HVHDUFK
<LOPD]$02]FDQ%(NL]$&H\KDQDQG$$OWLQHO7KHERG\ZHLJKWVDQGZRROFKDUDFWHULVWLFVRIWKH
LQGLJHQRXV,PUR]DQG.LYLUFLNVKHHSEUHHGVRI7XUNH\:RROWHFKQRORJ\DQGVKHHSEUHHGLQJ

(MJJIVIRGIWMRFVIHMEQIXIVTVSPIFIX[IIRWLIEVMRK
TIVMSHWMR[LMXI,YEGE]E%PTEGEW:MGYKRETEGSW
30D\KXD(&4XLVSH00RQWHVDQG/$OIRQVR
3URJUDPDGH0HMRUDGH&DPpOLGRV6XGDPHULFDQRV($3GH=RRWHFQLD)&,8QLYHUVLGDG
1DFLRQDOGH+XDQFDYHOLFD81++XDQFDYHOLFD3HU~HGJDUTXLVSH#\DKRRFRP
UHDGH3URGXFFLyQ$QLPDO8QLYHUVLGDG3~EOLFDGH1DYDUUD6SDLQ
%FWXVEGX
$WRWDORIPLGVLGHEUHVDPSOHVRQHSHUDQLPDODWOHIWVLGHZHUHREWDLQHGLQWZRVKHDULQJ
SHULRGV,3HULRG'HFHPEHUQ ,,3HULRG0DUFKQ IURPZKLWH+XDFD\D
DOSDFDV EHORQJLQJ WR &,3&6 /DFKRFF KHUG RI 1DWLRQDO 8QLYHUVLW\ RI +XDQFDYHOLFD )LEUH
GLDPHWHU SUROHV )'3 ZHUH REWDLQHG XVLQJ WKH 2)'$ LQVWUXPHQW PHDVXULQJ EUH
GLDPHWHUHYHU\PPDORQJWKHHQWLUHOHQJWKRIVWDSOHV%ULPVHWDOLQDVXEVDPSOHRI
EHWZHHQEUHVSHUDQLPDO'LIIHUHQWEUHGLDPHWHUSUROHYDULDEOHVZHUHFDOFXODWHG
DQGFRPSDUHGEHWZHHQVKHDULQJSHULRGVWDNLQJLQWRDFFRXQWGLIIHUHQFHVGXHWRVH[DQGDJH
7KHYDULDEOHVZHUHWKHIROORZLQJDYHUDJHEUHGLDPHWHU$)'PD[LPXPDQGPLQLPXPEUH
GLDPHWHU)'0D[)'0LQLWVUHVSHFWLYHSRVLWLRQV30D[30LQEUHGLDPHWHUFKDQJHDORQJ
WKHVWDSOH7$&$FDOFXODWHGDVWKHDEVROXWHYDOXHRI)'0D[)'0LQDQGQHHQGV)(
FDOFXODWHGDVWKHGLIIHUHQFHEHWZHHQWKHPHDQGLDPHWHURIEUHVLQWKHUVWIDQGODVWO
PPRIWKHVWDSOHDQG)')( >IO@)'5HVXOWVVKRZGLIIHUHQW)'3IRUWKHWZRVKHDULQJ
SHULRGVEHLQJVLJQLFDQWO\GLIIHUHQW30D[30LQDQG)(31RGLIIHUHQFHVIRUVH[ZHUH
REVHUYHGEXWDJHDIIHFWHG$))'0D[)'0LQ30D[30LQ7$&$DQG)(37KHVH
UHVXOWVVKRZHGLQWHUPVRIWKHQHHGVRIWH[WLOHLQGXVWU\LQSURFHVVLQJSHUIRUPDQFHDEHWWHU
TXDOLW\RIEUHREWDLQHGGXULQJWKHVKHDULQJRI'HFHPEHU
.H\ZRUGVDOSDFDEUHGLDPHWHUVKHDULQJ
-RXVSHYGXMSR
7KHJOREDOSRSXODWLRQRIDOSDFDVLVHVWLPDWHGDWPLOOLRQ)$2DQGDSSUR[LPDWHO\
RIWKHPDUHLQWKHKLJK$QGHVLQ3HUXDERYHP$ERXWRIWKHSRSXODWLRQDUH
ZKLWHDOSDFDV%UHQHVHWDO7KH+XDFD\DEUHHGSUHGRPLQDWHVLQWKHFRXQWU\ZLWK
ZKLOHWKH6XULUDFHLVRQO\)$2DOWKRXJKLQVRPHUHJLRQVRI3HUXDVLQWKHFDVHRI
+XDQFDYHOLFDWKH+XDFD\DEUHHGFDQUHDFK2ULDHWDO
,QWKHKLJK$QGHDQUHJLRQVDOSDFDEUHHGLQJLVWKHPDLQDFWLYLW\IRUWKHSHRSOHOLYLQJWKHUHDV
ZHOODVWKHLUPDLQVRXUFHRIGLUHFWLQFRPH)XUWKHUPRUHWKLVDQLPDOSURGXFHVDHHFHZLWKEUHV
WKDWDUHKLJKO\YDOXHGDQGWKHJDUPHQWVPDGHDUHFODVVLHGDVOX[XU\LWHPV:DQJHWDO
EHFDXVHRIWKHLUXQLTXHSK\VLFDOFKDUDFWHULVWLFV7KHNQRZOHGJHRIWKHSURGXFWLRQRIDOSDFDEUH
FRXOGLPSURYHWKHWHFKQRORJLFDOFKDUDFWHULVWLFVRIWKHEUHWH[WLOHVDQGSURPRWHEHWWHUPDUNHWLQJ
RIIDUPHUVLQWKHWH[WLOHLQGXVWU\ZKLFKZRXOGHQVXUHEHWWHUSURFHVVLQJDQGLPSURYHGSURGXFWLRQ
LQSXWV4XLVSH
7KHUHDUHPDQ\FKDUDFWHULVWLFVWKDWGHWHUPLQHWKHTXDOLW\RIWKHEUHEXW$)'DYHUDJHEUH
GLDPHWHUPD\KDYHWKHJUHDWHVWLQXHQFHRQSULFHRIWKHHHFHDQGEHVWXVH0F*UHJRU
7KLVSDUDPHWHUGLIIHUVVLJQLFDQWO\EHWZHHQHHFHVERG\UHJLRQEUHVZLWKLQDVDPSOHDQG
DOVRDORQJWKHEUHZLWKYDU\LQJSHUFHQWDJHVRIDQGUHVSHFWLYHO\ZLWKLQDKHUG
+DQVIRUG9DULDWLRQDORQJWKHEUHZKLFKKHOSVIRUPWKHEUHGLDPHWHUSUROH)'3

IRUDSHULRGRIJURZWKXVXDOO\RQH\HDULVFDXVHGE\JHQHWLFHIIHFWV%URZQHWDO

SK\VLRORJLFDO VWDWHV >VXFK DV QXUVLQJ DQG SUHJQDQF\ +DQVIRUG @ ZHDWKHU VHDVRQ
SKRWRSHULRGWHPSHUDWXUHDQGDYDLODELOLW\RISDVWXUH1D\ORUDQG6WDQWRQ1D\ORUDQG
+DQVIRUGDQG1D\ORUHWDO7KLVODVWIDFWRUKDVDJUHDWHUHIIHFWRQWKH)'3DV
LVQRWHGLQVKHHSE\6PLWKHWDODQGLQDOSDFDVE\0F*UHJRUDQG4XLVSHHWDO
DLWKDVEHHQREVHUYHGWKDWPDOQXWULWLRQGXULQJFHUWDLQWLPHVRIWKH\HDUKDVDPDMRUHIIHFW
RQWKHSURGXFWLRQDQGTXDOLW\RIDOSDFDEUH5XVVHODQG5HGGHQ)UDQFRHWDO
)'3 LV LPSRUWDQW IRU GHWHUPLQLQJ WKH TXDOLW\ GXH WR WKH HIIHFW RQ WKH DSSHDUDQFH FRPIRUW
DQGSURGXFWSHUIRUPDQFHRIEUHIRUWH[WLOHSURFHVVLQJ0D\RHWDO7KHUHIRUHIXUWKHU
UHVHDUFK LV QHFHVVDU\ LI TXDOLW\ LV WR EH LPSURYHG$ )'3 ZLWK EUH WHUPLQDOV QH HQGV
WKLQQHUWKDQWKHPLGGOHFRQYH[VKDSHGZLOOQRWRQO\EHPRUHFRPIRUWDEOH1D\ORUHWDO
EXW DOVR KDYH JUHDWHU WHQVLOH VWUHQJWK ZKLFK ZLOO JLYH EHWWHUSHUIRUPDQFH GXULQJ WKH WH[WLOH
SURFHVV7KRPSVRQDQG+\QG2QWKHRWKHUKDQGWKHUHVXOWVRI+DQVIRUGDQG.HQQHG\
VXSSRUWWKHFRQFHSWWKDWDEUXSWFKDQJHVLQEUHGLDPHWHUDUHDVVRFLDWHGZLWKORZHUWHQVLOH
VWUHQJWK761D\ORUDQG+DQVIRUGUHSRUWGLIIHUHQFHVEHWZHHQPD[LPXPDQGPLQLPXP
GLDPHWHURIEHWZHHQWRPLFURQV
&XUUHQWO\LQWKHFDVHRIVKHHSWKH)'3GDWDKHOSVSURGXFHUVPDQDJHWKHLUDQLPDOVWRSURGXFH
ZRROZLWKOHVVYDULDWLRQWKURXJKRXWWKH\HDUOHDGLQJWRWKHSURGXFWLRQRIQHUDQGVWURQJHUZRRO
WKDWLPSURYHVWKURXJKSXW3HWHUVRQDQG2OGKDP7KLVVDPHVWUDWHJ\FRXOGEHIROORZHG
EDVHGRQLQGHSWKNQRZOHGJHRIWKHFKDUDFWHULVWLFVWKDWGHQH)'3LQDOSDFDV
,Q6RXWK$PHULFDDOSDFDVDUHUDLVHGVWULFWO\XQGHUDQH[WHQVLYHV\VWHPZLWKDGLHWEDVHGRQ
QDWXUDOSDVWXUHVORFDWHGLQDUHDVZLWKUXJJHGJHRJUDSK\DQGKDUVKFOLPDWH%UHQHVHWDO
VRSUHGLFWDEOHFKDQJHVDORQJWKHGLDPHWHUEUHDUHWREHH[SHFWHGDVLQWKHFDVHRIZRRO)'3
UHHFWLQJHQYLURQPHQWDOFKDQJHVRFFXUULQJWKURXJKRXWWKHSHULRGRIJURZWKVLQFHWKHSUHYLRXV
VKHDULQJ%URZQHWDO7KHUHLVOLWWOHNQRZOHGJHDERXWDOSDFD)'3ZLWKRQO\DSUHOLPLQDU\
UHSRUWLQ3HUXE\4XLVSHHWDOE)RUWKLVDQGWKHSUHYLRXVO\GLVFXVVHGUHDVRQVZHKDYH
FRQGXFWHGWKLVUHVHDUFKZLWKWKHDLPRIFKDUDFWHULVLQJWKH)'3DWGLIIHUHQWWLPHVRIVKHDULQJ
FRUUHVSRQGLQJWRWZRGLIIHUHQWSHULRGVRIJURZWK
,QSDUWLFXODUZHSURSRVHWRFKDUDFWHULVHWKH)'3RIWKHZKLWH+XDFD\DDOSDFDLQWZRSHULRGV
RIVKHDULQJDFFRUGLQJWRWKHFKDUDFWHULVWLFVRIWH[WLOHVVXFKDVDYHUDJHEUHGLDPHWHU$)'
PD[LPXPDQGPLQLPXPEUHGLDPHWHU)'0D[)'0LQLWVUHVSHFWLYHSRVLWLRQV30D[30LQ
EUHGLDPHWHUFKDQJHDORQJWKHVWDSOH7$&$DQGQHHQGV)(REWDLQHGLQWZRVKHDULQJ
SHULRGVXQGHUWKHHQYLURQPHQWDOFRQGLWLRQVDQGIDUPLQJV\VWHPSUHYDLOLQJLQ+XDQFDYHOLFD
1EXIVMEPWERHQIXLSHW
0SGEXMSR
7KHHOGZRUNZDVFRQGXFWHGDWWKH&HQWUHIRU5HVHDUFK3URGXFWLRQDQG6HUYLFHV/DFKRFF
&,36/DFKRFF DW WR WKH 1DWLRQDO 8QLYHUVLW\ RI +XDQFDYHOLFD 81+ ORFDWHG NP IURP
+XDQFDYHOLFDDWDQDOWLWXGHRIPZLWKWHPSHUDWXUHVUDQJLQJIURP&WR&DWQLJKW
DQGWR&GXULQJWKHGD\DQQXDOSUHFLSLWDWLRQUHDFKHVPPSHU\HDU
7EQTPIW
0LGVLGHEUHVDPSOHVJRQHSHUDQLPDODWOHIWVLGHZHUHREWDLQHGIURP+XDFD\DZKLWH
DOSDFDVRIGLIIHUHQWDJHVPDOHVDQGIHPDOHVFRQVLGHULQJWZRDQQXDOSHULRGVRIJURZWK

IURPWZRVKHDULQJSHULRGV>3HULRG,JURZWKLQ'HFHPEHUWR'HFHPEHUQ DQG

3HULRG,,JURZWKVLQFH0DUFK0DUFKQ @$QLPDOLGHQWLW\VH[VWDSOHOHQJWKDQG
EUHJURZWKSHULRGZHUHUHFRUGHG
+VE^MRKERMQEPW
7KHDOSDFDVZHUHUHDUHGH[FOXVLYHO\RQSDVWXUHFRQVLVWLQJPDLQO\RIGHVLUDEOHVSHFLHVVXFK
DV$OFKHPLOODSLQQDWD)HVWXFDGROLFKRSK\OODDQG'LVWLFKLDPXVFRLGDQGXQGHVLUDEOHVSHFLHV
VXFKDV$OTXLJOXPD3RD&DODPDJURVWLVRYDWDDQG&DODPDJURVWLVFXUYXODDQGXQGHVLUDEOH
$FLDFKQH SXOYLQDWD 3ODQWDJR ULJLGD DQG 6WLSD REWXVD 5DLVLQJ DQG KHDOWK FRQGLWLRQV ZHUH
VLPLODUIRUDOODQLPDOV
7EQTPIEREP]WMW
6DPSOHVZHUHHYDOXDWHGE\WKHRSWLFDOEUHGLDPHWHUDQDO\VHU2)'$LQWKH81+V
:RRODQG)LEHU/DERUDWRU\IROORZLQJ%ULPVHWDO2)'$SHUIRUPVPHDVXUHPHQWVRI
VWDSOHVIURPWKHWLSWRWKHEDVHHYHU\PPZKLFKDOORZVWKHJHQHUDWLRQRIEUHGLDPHWHUSUROH
)'3RIHDFKVDPSOH%HFDXVHHDFKVDPSOHKDGDGLIIHUHQWQXPEHURISUROHPHDVXUHPHQWV
ZHSURFHHGHGWRWKHVWDQGDUGLVDWLRQUDQJLQJIURPDQGWKHQWRWKHFKDUDFWHULVDWLRQRIWKH
SUROHVEDVHGRQDYHUDJHEUHGLDPHWHU$)'PD[LPXPDQGPLQLPXPEUHGLDPHWHU)'0D[
)'0LQLWVUHVSHFWLYHSRVLWLRQV30D[30LQEUHGLDPHWHUFKDQJHDORQJWKHVWDSOH7$&$
DQGQHHQGV)()(ZDVFDOFXODWHGDVWKHGLIIHUHQFHEHWZHHQWKHPHDQGLDPHWHURIEUHVLQ
WKHUVWIDQGODVWOPPRIWKHVWDSOHDQG)')( >IO@)'
*(4GLEVEGXIVMWXMGWMRX[SWLIEVMRKTIVMSHW
7DEOHVKRZVWKDWRIVHYHQYDULDEOHVWKDWFKDUDFWHULVHWKH)'3RQO\30LQ30D[DQG)(DUH
VWURQJO\LQXHQFHGE\VKHDULQJSHULRGV,WPD\DOVRLQGLFDWHWKDWZKHQWKHVKHDULQJLVGRQHLQ
'HFHPEHU3HULRG,30LQLVFORVHUWRWKHWLSRIWKHEUH30D[LVIDUWKHUIURPWKHWLSRIWKH
EUHDQG)(LVQHJDWLYHUHVXOWVYHU\GLIIHUHQWIURPVKHDULQJ3HULRG,,0DUFK7KHVHUHVXOWV
UHVXOWLQDFRQYH[)'3IRU3HULRG,ZKLFKZRXOGEHGXHWRLQFUHDVHGIRUDJHVXSSO\LPPHGLDWHO\
DIWHUWKHSUHYLRXVVKHDULQJZLWKDGHFUHDVHIURPWKHPLGGOHRIWKHEUHDQHIIHFWFRQWUDU\WR
WKDWZKHQVKHDULQJWDNHVSODFHLQ0DUFKWKHPRQWKWKDWFRLQFLGHVZLWKWKHGHFOLQHRIUDLQIDOOLQ
DVKRUWWLPHSULRUWRVKHDULQJZLWKDFRQVHTXHQWGHFUHDVHLQSDVWXUHSURGXFWLRQ7KHVHUHVXOWV
DUHFRQVLVWHQWZLWKWKRVHIRXQGLQVKHHSE\%URZQHWDO1D\ORUDQG6WDQWRQ
1D\ORUDQG+DQVIRUGDQG6PLWKHWDODQGZRXOGOHDGXVWRLQGXFHWKDWVKHDULQJ
HHFHVREWDLQHGLQ'HFHPEHUZRXOGSURYLGHDEHWWHUTXDOLW\RIEUHFRPSDUHGWRWKRVHREWDLQHG
LQVKHDULQJ0DUFK
)RU$)')'0D[DQG)'0LQQRVLJQLFDQWGLIIHUHQFHVZHUHREVHUYHGEHWZHHQWKHWZRSHULRGV
RIVKHDULQJ2QWKHRWKHUKDQGDVVKRZQLQ7DEOHZKLOHVH[ KDVQRHIIHFW RQDQ\RI WKH
YDULDEOHVXQGHUVWXG\DJHKDVDFOHDUHIIHFWRQDOORIWKHP$)'30LQ30D[)'0LQ)'0D[
7$&$DQG)(
9DOXHVDUHTXLWHVLPLODUWRWKRVHUHSRUWHGE\4XLVSHHWDOEDQG3RPDHWDOZKRVH
UHVXOWVIRU)'0LQDQG)'0D[ZHUHDQGPDQGRIDQGPLFURQVUHVSHFWLYHO\
7KHPRI7$&$DUHVLPLODUWRYDOXHVLQGLFDWHGE\&XUWLVLQTXRWHGE\1D\ORUDQG
+DQVIRUG ZKR HVWLPDWHV WKDW WKHUH LV D WR P H[FKDQJH IRU ZRRO IURP VKHHS LQ
$XVWUDOLD+RZHYHU1D\ORUDQG6WDQWRQLQGLFDWHWKDWWKHVHFKDQJHVDUHGHWULPHQWDODWWKH

8EFPI%ZIVEKI7)ERHGSRHIRGIMRXIVZEPSJEZIVEKIFVIHMEQIXIV%*( QMRMQYQERHQE\MQYQFVI

HMEQIXIVTSWMXMSR41MRERH41E\VIWTIGXMZIP] QMRMQYQERHQE\MQYQFVIHMEQIXIV*(1MRERH*(1E\
VIWTIGXMZIP] FVIHMEQIXIVGLERKIEPSRKXLIWXETPI8%'% ERH*MRIIRHW*) MRX[SWLIEVMRKTIVMSHW
:EVMEFPIW
%*(Q
41uR
41E\
*(1MRQ
*(1E\Q
8%'%Q
*)Q
4IVMSHW
4IVMSH-(IGIQFIV
4IVMSH--1EVGL
%ZIVEKI7)
'SRHIRGI
MRXIVZEP
%ZIVEKI7)
'SRHIRGI
MRXIVZEP

8EFPI0IEWXWUYEVIQIERWJSVEZIVEKIFVIHMEQIXIV%*( QMRMQYQERHQE\MQYQFVIHMEQIXIVTSWMXMSR

41MRERH41E\VIWTIGXMZIP] QMRMQYQERHQE\MQYQFVIHMEQIXIV*(1MRERH*(1E\VIWTIGXMZIP] FVI
HMEQIXIVGLERKIEPSRKXLIWXETPI8%'% ERHRIIRHW*) TIVTIVMSHWI\ERHEKIJEGXSVWERHTIVMSHEKI
MRXIVEGXMSRW7MKRMGERGISJJEGXSVWMWEPWSMRHMGEXIH
*EGXSVW
%*(
Q
41MR 41E\

*(1MR
Q
*(1E\
Q
8%'%
Q
*)
Q
7LIEVMRKTIVMSHW
-(IGIQFIV
--1EVGL
7I\
1EPI
*IQEPI
%KI
]IEVWSPH
E]IEVWSPH
E]IEVWSPH
"]IEVWSPH
4IVMSH%KI
4IVMSH-
]IEVWSPH
E]IEVWSPH
E]IEVWSPH
"]IEVWSPH
4IVMSH--
]IEVWSPH
E]IEVWSPH
E]IEVWSPH
"]IEVWSPH
RW

RW

RW

RW

RW

RW
RW

RW

RW

RW

RW

RW

RW

RW

4 4 RW!RSXWMKRMGERX

WLPHRIPDUNHWLQJ0DMRUFKDQJHVWRPLQVKHHSDUHGXHWRWKHHIIHFWVRISK\VLRORJLFDOVWUHVV
SUHJQDQF\DQGODFWDWLRQDQGJUHDWHUWKDQPDUHGXHWRUHGXFWLRQLQWKHTXDQWLW\DQGTXDOLW\
RIIRRG+DQVIRUGZKLFKZLOOVLJQLFDQWO\UHGXFHWKHWHQVLOHVWUHQJWKGXHWRWKHVPDOOHU
DPRXQWRINHUDWLQLFPDWHULDOWKDWZLOOZLWKVWDQGEUHDNLQJIRUFH7KLVUHVXOWVKRZVWKDWDOSDFDV
VWUHVVRUVDSSDUHQWO\KDYHDQHIIHFWRQWKHGLDPHWHUZKLFKZRXOGVWUHQJWKHQWKHK\SRWKHVLVRI
WKHJUHDWDGDSWDELOLW\WRKDUVKFRQGLWLRQVWKDWWKHVHDQLPDOVKDYHDFTXLUHG4XLVSHHWDOD
*MFVIHMEQIXIVTVSPIMRXLIX[SWLIEVMRKTIVMSHW
)'3IRUERWKSHULRGVDUHVKRZQLQ)LJXUHZKHUHLWFDQEHVHHQWKDWWKHEUHVREWDLQHGLQ
3HULRG,KDYHDQ)'3FRQYH[0HDQZKLOH)'3REWDLQHGIRUWKH3HULRG,,LVFRQFDYHVKRZLQJ
DUDGLFDOGLIIHUHQFHZKLFKPD\EHIRUWZRPDLQUHDVRQVDQLQFUHDVHLQIRUDJHDYDLODELOLW\
GXULQJWKHPRQWKVIURP'HFHPEHUWR$SULOZKLFKFRUUHVSRQGVWRGLVWDQFHVEHWZHHQDQG
RIWKHSHULRG,DQGGLVWDQFHVGLVWULEXWHGEHWZHHQDQGEHWZHHQIRUWKHSHULRG,,
DQGWKHHIIHFWRISK\VLRORJLFDOVWDWXVSUHJQDQF\DQGODFWDWLRQLWVKRXOGEHQRWHGWKDWPRVW
RIWKHDQLPDOVVKHDUHGLQWKHSHULRG,,0DUFKDUHIHPDOHVZKRUHFHQWO\JDYHELUWKDQGEHFDXVH
RIWKLVQXWULHQWVZHUHSUHYLRXVO\GLUHFWHGWRWKHPDLQWHQDQFHRIWKHIRHWXVZKLFKFRXSOHGZLWK
ORZIRUDJHDYDLODELOLW\ZRXOGJLYHWKHSUROHRIWKLVSHULRGDIDOOSRVLWLRQRIWR
'SRGPYWMSRW
,WFDQEHFRQFOXGHGWKDWHHFHVREWDLQHGGXULQJVKHDULQJ3HULRG,'HFHPEHUZRXOGKDYHDEHWWHU
TXDOLW\WKDQWKRVHREWDLQHGLQVKHDULQJ3HULRG,,0DUFK7KHUVWZRXOGKDYHEHWWHUFRPIRUWDQG
UHVLVWDQFHEHFDXVHWKH\KDYHQHJDWLYH)(ZKLFKOHDGVWREHWWHUSHUIRUPDQFHGXULQJWKHWH[WLOH
SURFHVVEHWWHUWUDFWLRQWRUHVLVWWKRVHVXEMHFWHGWRVFRXULQJZDVKLQJDQGFRPELQJ7KHUHIRUH
GLVDGYDQWDJHVRIWKHHHFHVFROOHFWHGLQWKH3HULRG,,0DUFKFRXOGEHRYHUFRPHE\FKDQJLQJ
WKHGDWHRIVKHDULQJEXWDOVRWKURXJKDSSURSULDWHGLHWDU\VXSSOHPHQWDWLRQRISUHJQDQWIHPDOHV

,,3HULRG0DUFK
,3HULRG'HFHPEHU

)'P

'LVWDQFHIURPWLS
*MKYVI*MFVIHMEQIXIVTVSPIWMRX[SWLIEVMRKTIVMSHW-ERH--[LMGLGSVVIWTSRHWXSWLIEVMRKMR(IGIQFIV
ERH1EVGLVIWTIGXMZIP]

6IJIVIRGIW
%UHQHV(5.0DGULJDO)3pUH]DQG.9DOODGDUHV(O&OXVWHUGHORV&DPpOLGRVHQ3HU~'LDJQyVWLFR&RPSHWLWLYR
\5HFRPHQGDFLRQHV(VWUDWpJLFDV,QVWLWXWR&HQWURDPHULFDQRGH$GPLQLVWUDFLyQGH(PSUHVDV$YDLODEOHDWKWWS
ZZZFDIFRPDWWDFKGHIDXOW&DPHOLGRV3HUXSGI$FFHVVHG0DUFK
%ULPV0$$'3HWHUVRQDQG6**KHUDUGL,QWURGXFLQJWKH2)'$)RUUDSLGPHDVXUHPHQWRIGLDPHWHU
SUROHRQJUHDV\ZRROVWDSOHV,:725DZZRROJURXSUHSRUW5:*)ORUHQFH,WDO\
%URZQ'-%-&URRNDQG,:3XUYLV'LIIHUHQFHVLQEUHGLDPHWHUSUROHFKDUDFWHULVWLFVLQZRROVWDSOHVIURP
0HULQRVKHHSDQGWKHLUUHODWLRQVKLSZLWKVWDSOHVWUHQJWKEHWZHHQ\HDUVHQYLURQPHQWVDQGEORRGOLQHV$XVWUDOLDQ
-RXUQDORI$JULFXOWXUDO5HVHDUFK
)$2 )RRG DQG $JULFXOWXUH 2UJDQL]DWLRQ 6LWXDFLyQ $FWXDO GH ORV &DPpOLGRV 6XGDPHULFDQRV HQ HO 3HU~
2UJDQL]DFLyQGHODV1DFLRQHV8QLGDVSDUDOD$JULFXOWXUD\OD$OLPHQWDFLyQ3UR\HFWRGH&RRSHUDFLyQ7pFQLFD
HQDSR\RDODFULDQ]D\DSURYHFKDPLHQWRGHORV&DPpOLGRV6XGDPHULFDQRVHQOD5HJLyQ$QGLQD7&35/$
$YDLODEOHDWKWWSZZZUOFIDRRUJHVJDQDGHULDSGISHUSGI$FFHVVHG6HSWHPEHU
)UDQFR))6DQ0DUWtQ0$UD/2OD]iEDODQG)&DUFHOpQ(IHFWRGHOQLYHODOLPHQWLFLRVREUHHOUHQGLPLHQWR
\FDOLGDGGHEUDHQDOSFDV5HYLVWDGH,QYHVWLJDFLRQHV9HWHULQDULDVGHO3HU~
+DQVIRUG.$)LEUH'LDPHWHU'LVWULEXWLRQ,PSOLFDWLRQVIRU:RRO3URGXFWLRQ:RRO7HFKQRORJ\DQG6KHHS
%UHHGLQJ
+DQVIRUG.$DQG-3.HQQHG\5HODWLRQVKLSEHWZHHQWKHUDWHRIFKDQJHLQEUHGLDPHWHUDQGVWDSOHVWUHQJWK
3URFHHGLQJVRIWKH$XVWUDOLDQ6RFLHW\RI$QLPDO3URGXFWLRQ
2ULD,,4XLFDxR(4XLVSHDQG/$OIRQVR9DULDELOLGDGGHOFRORUGHODEUDGHDOSDFDHQOD]RQDDOWRDQGLQDGH
+XDQFDYHOLFD3HU~$QLPDO*HQHWLF5HVRXUFHV,QIRUPDWLRQ
0D\R2%&URRN-/D[$6ZDQDQG7:+DQFRFN7KHGHWHUPLQDWLRQRI)LEUH'LDPHWHU'LVWULEXWLRQ:RRO
7HFKQRORJ\DQG6KHHS%UHHGLQJ
0F*UHJRU%$7KHLQXHQFHRIHQYLURQPHQWQXWULWLRQDQG0DQDJHPHQWRQWKHTXDOLW\DQGSURGXFWLRQRIDOSDFD
EUH3URFHHGLQJV$OSDFD%RUQWREH:RUQ$XVWUDOLDQ$OSDFD,QGXVWU\&RQIHUHQFH$XVWUDOLDSS
0F*UHJRU%$3URGXFWLRQDWWULEXWHVDQGUHODWLYHYDOXHRIDOSDFDHHFHVLQVRXWKHUQ$XVWUDOLDDQGLPSOLFDWLRQV
IRULQGXVWU\GHYHORSPHQW6PDOO5XPLQDQW5HVHDUFK
1D\ORU*56DQG-6WDQWRQ7LPHRIVKHDULQJDQGWKHGLDPHWHUFKDUDFWHULVWLFVRIEUHHQGVLQWKHSURFHVVHG
WRS$QRSSRUWXQLW\IRULPSURYHGVNLQFRPIRUWLQJDUPHQWV:RRO7HFKQRORJ\DQG6KHHS%UHHGLQJ
1D\ORU*56DQG+DQVIRUG.$)LEUH(QG'LDPHWHU3URSHUWLHVLQ3URFHVVHGWRS5HODWLYHWRWKH6WDSOHIRU
:RRO*URZQLQD0HGLWDUUDQHDQ&OLPDWHDQG6KRUQLQ'LIIHUHQW6HDVRQV:RRO7HFK6KHHS%UHHGLQJ
1D\ORU*56&02OGKDPDQG-6WDQWRQ6KHDULQJWLPHRIPHGLWHUUDQHDQZRROVDQGIDEULFVNLQFRPIRUW7H[WLOH
5HVHDUFK-RXUQDO
3HWHUVRQ$'6**KHUDUGLDQG05(OOLV0DQDJLQJWKHGLDPHWHUSUROHOHDGVWRLQFUHDVHGVWDSOHVWUHQJWKRI\RXQJ
0HULQRVKHHSVKRUQLQVSULQJLQ6RXWK:HVWHUQ$XVWUDOLD7KH$VLDQ$XVWUDOLDQ-RXUQDORI$QLPDO6FLHQFH
3RPD$*&(9HQWXUDDQG(&4XLVSH&DUDFWHUL]DFLyQGHOSHUOGHOGLiPHWURGHEUDHQDOSDFDV+XDFD\DGH
FRORUEODQFR7KHVLV8QLYHUVLGDG1DFLRQDOGH+XDQFDYHOLFD3HUXS
4XLVSH(&-30XHOOHU-5XL]/$OIRQVRDQG**XWLpUUH]D$FWXDOLGDGHVVREUHDGDSWDFLyQSURGXFFLyQ
UHSURGXFFLyQ \ PHMRUD JHQpWLFD HQ FDPpOLGRV 8QLYHUVLGDG 1DFLRQDO GH +XDQFDYHOLFD 3ULPHUD (GLFLyQ
+XDQFDYHOLFD3HU~SS
4XLVSH(&53D~FDU$3RPD'6DFFKHURDQG-30XHOOHUE3HUOGHOGLiPHWURGHEUDVHQDOSDFDV3URFGH
6HPLQDULR,QWHUQDFLRQDOGH%LRWHFQRORJtD$SOLFDGDHQ&DPpOLGRV6XGDPHULFDQRV+XDQFDYHOLFD3HU~
4XLVSH(&(VWLPDFLyQGHOSURJUHVRJHQpWLFRGHVHLVHVTXHPDVGHVHOHFFLyQHQDOSDFDV9LFXJQDSDFRV+XDFD\D
FRQWUHVPRGHORVGHHYDOXDFLyQHQODUHJLyQDOWRDQGLQDGH+XDQFDYHOLFD7KHVLV81$/0S
5XVVHO$-DQG+/5HGGHQ7KHHIIHFWRIQXWULWLRQRQEUHJURZWKLQWKHDOSDFD$QLPDO6FLHQFH
6PLWK-/,:3XUYLVDQG*-/HH)LEUHGLDPHWHUSUROHVSRWHQWLDODSSOLFDWLRQVIRULPSURYLQJQHZRRO
TXDOLW\,QWHUQDWLRQDO-RXUQDORI6KHHSDQG:RRO6FLHQFH
7KRPSVRQ$1DQG3,+\QG:RROJURZWKDQGEUHGLDPHWHUFKDQJHVLQ\RXQJ0HULQRVKHHSJHQHWLFDOO\GLIIHUHQW
LQVWDSOHVWUHQJWKDQGIHGGLIIHUHQWOHYHOVRIQXWULWLRQ$XVWUDOLDQ-RXUQDORI$JULFXOWXUDO5HVHDUFK
:DQJ;:DQJ/DQG;/LX7KH4XDOLW\DQG3URFHVVLQJ3HUIRUPDQFHRI$OSDFD)LEUHV5,5'&SXEOLFDWLRQ
1

*MFVITVSHYGXMSRERHFVIGLEVEGXIVMWXMGWSJEPTEGEW
JEVQIHMR9RMXIH7XEXIW
7:XOLML
'HSDUWPHQWRI$QLPDO%LRWHFKQRORJ\8QLYHUVLW\RI1HYDGD5HQR1986$3UHVHQW
DGGUHVV'HSDUWPHQWRI$JULFXOWXUHDQG(QYLURQPHQWDO6FLHQFHV/LQFROQ8QLYHUVLW\-HIIHUVRQ
&LW\0286$WXPHQZ#\DKRRFRP
%FWXVEGX
7KHDOSDFDLVWKHPRVWLPSRUWDQWEUHSURGXFLQJPHPEHURIWKH6RXWK$PHULFDQFDPHOLGV7KHUH
DUHWZRW\SHVRIDOSDFDVLQWURGXFHGLQWRWKH8QLWHG6WDWHVQDPHO\+XDFD\DDQG6XULKRZHYHUD
PDMRULW\RIDOSDFDVDUHWKDWRIWKH+XDFD\DEUHHG&XUUHQWO\WKHUHDUHDOSDFDVUHJLVWHUHG
LQWKH$OSDFD5HJLVWU\,QF$5,IURPWRLQWKH86$OSDFDVFDQEHIRXQGLQHYHU\
VWDWHRIWKH8QLWHG6WDWHVDQGDUHIDUPHGLQYDULRXVJHRJUDSKLFDOHQYLURQPHQWVUDQJLQJIURPKRW
GHVHUWWRKLJKPRXQWDLQUDQJHV$OSDFDVZHUHVKRUQDWWRPRQWKVRIEUHJURZWKLQWHUYDOV
DQGSURGXFHGNJSHUKHDGHHFHSHU\HDU&RDWFRORXULVYDULHVZLGHO\LQWKHDOSDFDVUDQJLQJ
IURPZKLWHWREODFNDQGYDULRXVVKDGHFRPELQDWLRQVLQGLIIHUHQWQDWXUDOFRORXUFDWHJRULHV$Q
HDUOLHUVXUYH\LQGLIIHUHQW86UHJLRQVIRU+XDFD\DDOSDFDSHUIRUPDQFHUHFRUGLQJVVKRZHGWKDW
ERG\ZHLJKWHHFHZHLJKWDQGEUHTXDOLW\WUDLWVKDYHLPSURYHGIRUDOSDFDVIDUPHGLQ1RUWK
$PHULFD7KLVSDSHUSUHVHQWVWKHUHFHQWDQDO\VLVRIERWK+XDFD\DQ DQG6XULQ
DOSDFDVVDPSOHGDWDOSDFDUDQFKHVORFDWHGZLWKLQWKHZHVWFHQWUDODQGHDVWHUQUHJLRQVRI
WKH86%RG\ZHLJKWDYHUDJHEUHGLDPHWHUEUHGLDPHWHUYDULDWLRQPHDQVWDSOHOHQJWKDQG
FRPIRUWIDFWRUHVWLPDWHVZHUHNJPLFURQPPDQGIRU+XDFD\D
DQGNJPLFURQPPDQGIRU6XULV$OWKRXJKLWDSSHDUHGWKDW6XUL
DOSDFDVZHUHKHDYLHUIRUERG\ZHLJKWDQGDERXWPLFURQFRDUVHUWKDQ+XDFD\DHHFHVWHVWHG
LQWKLVVWXG\WKHUHZDVQRHYLGHQFHIRUDQ\EUHSURGXFWLRQRUEUHFKDUDFWHULVWLFVXSHULRULW\LQ
WKHRQHEUHHGRYHUWKHRWKHUH[FHSWWKHSUHIHUHQFHRIDEUHHGVSHFLDOW\WUDLW
.H\ZRUGVDOSDFDHHFHZHLJKWEUHGLDPHWHUFRDWFRORXU
-RXVSHYGXMSR
&DPHOLGVDUHLQGLJHQRXVWRWKH$QGHDQKLJKODQGVRI6RXWK$PHULFD7KHDOSDFD/DPDSDFRV
LV WKH PRVW QXPHURXV EUHSURGXFLQJ PHPEHU RI WKH IRXU 6RXWK$PHULFDQ FDPHOLG VSHFLHV
RI/ODPDJXDQDFRDOSDFDDQGYLFXQD.DGZHOOHWDO7KHUHDUHWZRW\SHVRIDOSDFDV
LQWURGXFHGLQWRWKH8QLWHG6WDWHVQDPHO\+XDFD\DDQG6XULKRZHYHUWKHPDMRULW\RIDOSDFDV
DUHWKDWRIWKH+XDFD\DEUHHG$OWKRXJKDOPRVWSK\VLFDOO\LGHQWLFDOZKDWGLVWLQJXLVKHV
WKHWZREUHHGRIDOSDFDVLVWKHLUHHFHW\SH+XDFD\DHHFHLVFKDUDFWHULVHGDVVKRUWGHQVH
FULPS\DQGZRROO\FRPSDUHGWRWKH6XULZKLFKLVGHVFULEHGDVVLON\OXVWURXVORQJDQGZLWK
SHQFLOORFNV:XOLMLHWDO:KLOH3HUXRZQVRIDOSDFDSRSXODWLRQDQGSURGXFHVDERXW
RIWKHZRUOGFDPHOLGEUH0RUDQWHHWDOWKHUHLVDVWHDG\LQFUHDVHLQWKHDOSDFD
SRSXODWLRQLQWKHLQWURGXFHGUHJLRQVVXFKDV$XVWUDOLD&DQDGD*UHDW%ULWDLQ1HZ=HDODQG
DQGWKH8QLWHG6WDWHVDQGLWLVEHFRPLQJDQLPSRUWDQWOLYHVWRFNVSHFLHV7KHUHDUH
DOSDFDVUHJLVWHUHGWRWKH$OSDFD5HJLVWU\,QF$5,IURPWRLQWKH86DQGWKH
WRWDO SRSXODWLRQ RI FDPHOLGV KDV EHHQ HVWLPDWHG WR H[FHHG WKH PLOOLRQ KHDG FRXQW 1RZ
DOSDFDVFDQEHIRXQGLQHYHU\VWDWHRIWKH8QLWHG6WDWHVDQGDUHIDUPHGLQYDULRXVJHRJUDSKLFDO
HQYLURQPHQWVUDQJLQJIURPWKHKRWGHVHUWWRKLJKPRXQWDLQUDQJHV$OSDFDVZHUHVKRUQDW
WRPRQWKRIEUHJURZWKLQWHUYDOVDQGSURGXFHGDERXWNJRIHHFHSHUKHDG&RDWFRORXU
YDULHVZLGHO\LQWKHDOSDFDVUDQJLQJIURPZKLWHWREODFNDQGYDULRXVVKDGHVGLIIHULQJLQ

QDWXUDOFRORXUFDWHJRULHV$OSDFDEUHSURGXFWLRQWUDLWVKDYHEHHQUHSRUWHGLQVHYHUDOVWXGLHV
LQWKHLUQDWLYHODQGV3XPD\DOODDQG/H\YD)UDQNHWDO0RUDQWHHWDO
&HUYDQWHVHWDODVZHOODVLQWKHLQWURGXFHGHQYLURQPHQWV:XOLMLHWDO0F*UHJRU
DQG%XWOHU0F&ROOHWDO7KHSUROLQJRIEUHFKDUDFWHULVWLFVLQ+XDFD\DEUHHG
LQWKH86IDUPHGDOSDFDVZDVUHSRUWHG/XSWRQHWDO7KHFXUUHQWVWXG\ZDVFRQGXFWHG
WRFRPSDUHSURGXFWLRQSHUIRUPDQFHPHDVXUHGIRUERG\ZHLJKWHHFHZHLJKWHHFHEODQNHW
ZHLJKWDQGVRPHPDMRUEUHFKDUDFWHULVWLFVLQWZREUHHGVRIDOSDFDV+XDFD\DDQG6XULLQWKH
86UHJLVWHUHGKHUGV
1EXIVMEPWERHQIXLSHW
%PTEGEWERHHEXEGSPPIGXMSR
7KLVLQYHVWLJDWLRQZDVLQLWLDWHGDWWKHUHTXHVWRIWKHPHPEHUVRIWKHDOSDFDEUHHGHUVDVVRFLDWLRQV
LQWKHZHVWHUQ86UHJLRQZKRH[SUHVVHGDVWURQJLQWHUHVWLQDFFHVVLQJFRPSDUDEOHDOSDFD
EUHSURGXFWLRQSHUIRUPDQFHDQGEUHTXDOLW\FKDUDFWHULVWLFLQIRUPDWLRQRQ+XDFD\DDQG6XUL
DOSDFDVZKLFKFDQEHUHIHUHQFHGIRUWKHLUEUHHGLQJSURJUDPPHV)RUW\DOSDFDSURGXFHUPHPEHUV
RIWKH$OSDFD2ZQHUVDQG%UHHGHUV$VVRFLDWLRQ,QFGLVWULEXWHGDFURVVLQWKHZHVWHUQFHQWUDO
DQGHDVWHUQJHRJUDSKLFDOUHJLRQVRIWKH86ZHUHUDQGRPO\VHOHFWHGDQGLQYLWHGWRSDUWLFLSDWH
RQDYROXQWDU\EDVLVLQWKHVWXG\3DUWLFLSDQWVDUHUHTXHVWHGWRSURYLGHWKHLUDOSDFDKHUGGDWD
LQFOXGLQJDOSDFDUHJLVWUDWLRQLGHQWLFDWLRQQDPHVDQLPDOSHUIRUPDQFHUHFRUGVDJHFRDWFRORXU
DQGVLGHHHFHVDPSOHV1RFRPSDULVRQZDVPDGHDYDLODEOHEHWZHHQRUDPRQJUDQFKHV$Q
LQYLWDWLRQ ZDV PDLOHG WR DOO VHOHFWHG PHPEHUV LQ 0D\ +RZHYHU VRPH SURGXFHUV KDG
DOUHDG\HLWKHUFRPSOHWHGWKHLUVKHDULQJRSHUDWLRQRUKDGQRSHUIRUPDQFHUHFRUGVRUKDGQR
HHFHVDPSOLQJVRZHUHXQDEOHWRFRQWULEXWHDQDO\WLFDOGDWDVHWV7KHUHVXOWDQLPDOSHUIRUPDQFH
UHFRUGLQJVIURPDOSDFDV+XDFD\D DQG6XUL ZHUHSURYLGHGE\SDUWLFLSDQW
UDQFKHUV7KHVHRQIDUPUHFRUGHGSURGXFWLRQGDWDDQGLQODEEUHPHDVXUHPHQWVZHUHLQFOXGHG
IRUWKHVWDWLVWLFDODQDO\VLV$OSDFDQXPEHUVSURGXFWLRQGDWDEUHHGDQGKHUGVL]HIRUHHFH
VDPSOLQJYDULHGIURPUDQFKWRUDQFKUDQJLQJIURPDVPDOOHUJURXSRIWRWKHODUJHUJURXSRI
DOSDFDV7KHPDMRULW\RISDUWLFLSDQWVKDYHSURYLGHGHLWKHU6XULRU+XDFD\DDOSDFDGDWDRU
EUHVDPSOHVZKLOHDIHZSURGXFHUVLQFOXGHGERWKEUHHGVRIDOSDFDV2QUDQFKUHFRUGVDQGHHFH
FKDUDFWHULVWLFGHQLWLRQVZHUHDFFHSWHGDQGXVHGDVRZQHUVSURYLVLRQVXFKDV$OSDFD5HJLVWU\
,'DQLPDOQDPHVERG\ZHLJKWVRPHUHFRUGHGDVSRVWVKHDULQJERG\ZHLJKWHHFHZHLJKWRU
HHFHEODQNHWZHLJKWVH[DJHDQGFRDWFRORXUV+RZHYHUVRPHUHJURXSLQJVZHUHXVHGIRUWKH
SXUSRVHRIWKLVDQDO\VLVIRUH[DPSOHGDUNEURZQEURZQDQGOLJKWEURZQZHUHSRROHGDVEURZQ
URVHJUD\VLOYHUJUD\DQGJUD\ZHUHJURXSHGDVJUD\DQGJHOGHGPDOHEUHHGLQJPDOHDQG
QRQEUHHGLQJPDOHZHUHSRROHGLQWRPDOHJURXSZKLOHDQLPDOVRYHU\HDUVROGZHUHSRROHG
LQWRDJHJURXSZKLFKLQFOXGHGDOSDFDVIURPWR\HDUVROG
*PIIGIERHFVIQIEWYVIQIRXW
$VLGHHHFHVDPSOHZDVREWDLQHGIURPDOSDFDVDWVKHDULQJZLWKHHFHZHLJKWRUHHFHEODQNHW
ZHLJKW UHFRUGHG 7KH VDPSOH VL]H RI JUDPV SHU HHFH RU HHFH EODQNHW ZDV SDFNHG
LQGLYLGXDOO\LQWKHODEHOOHGSODVWLFEDJV5DQFKHVZHUHUHTXHVWHGWRPDLOWKHHHFHVDPSOHV
ZLWKDHOGGDWDUHFRUGLQJVKHHWLQDSRVWDOSDUFHODGGUHVVHGWR:RRO7HVWLQJ/DE8QLYHUVLW\
RI1HYDGD5HQR+RZHYHUVRPHHHFHVDPSOHVZHUHSURYLGHGZLWKRXWERG\ZHLJKWHHFH
ZHLJKWRUHHFHEODQNHWZHLJKWLQIRUPDWLRQ8SRQUHFHSWLRQDOSDFDEUHVDPSOHVZHUHVRUWHG
IRUHDFKUDQFKRZQHUDQGSUHSDUHGIRUDVHWRIEUHFKDUDFWHULVWLFPHDVXUHPHQWVXVLQJ2)'$
HTXLSPHQW,:*$XVWUDOLD7KH2)'$HTXLSPHQWZDVSURJUDPPHGWRPHDVXUHD

VHWRIFKDUDFWHULVWLFPHDVXUHPHQWVLQFOXGLQJDYHUDJHEUHGLDPHWHU$)'EUHGLDPHWHU

VWDQGDUGGHYLDWLRQ)6'GLDPHWHUFRHIFLHQWRIYDULDWLRQ)&9VSLQQLQJQHQHVVEUH
GLDPHWHU6)EUHGLDPHWHUYDULDWLRQDORQJWKHOHQJWK)6'/VSLQQLQJQHQHVV6)VWDSOH
OHQJWK 6/ +DXWHXU OHQJWK +/ FRPIRUW IDFWRU HVWLPDWH &) EUH FXUYDWXUH &59
FXUYDWXUHYDULDWLRQ&59'PLQLPXPEUHGLDPHWHU0)'PD[LPXPEUHGLDPHWHU;)'
DQGEUHEXON1=%XONWUDLW)LEUHPHDVXUHPHQWVDPSOHVZHUHSUHSDUHGLQDFFRUGDQFHZLWK
WKH2)'$RSHUDWLQJSURFHGXUHVH[FHSWWKDWWKHJUHDVHFRUUHFWLRQIDFWRUZDV
VHWVSHFLFDOO\IRUDOSDFDEUHE\PHDVXULQJVFRXUHGDQGQRQVFRXUHGDOSDFDHHFHVDPSOHV
IRUHDFKUDQFK7KH6/ZDVHVWLPDWHGIURPWKHEUHOHQJWKPHDVXUHGRQ2)'$HTXLSPHQW
VRWKDWWKHZHDWKHUHGVWDSOHWLSVDQGWKHVWDSOHEDVHSRUWLRQORQJHUWKDQWKHVOLGHOHQJWKZHUH
H[FOXGHG 8SRQ FRPSOHWLRQ RI EUH WHVWV EUH PHDVXUHPHQW GDWD UDQFK VXPPDU\ VWDWLVWLFV
DQG LQGLYLGXDO EUH GLDPHWHU KLVWRJUDPV ZHUH SURYLGHG WR HDFK UDQFK RZQHU IRU UHYLHZ RU
YHULFDWLRQUHVSHFWLYHO\
(EXEEREP]WMW
7KH VWDWLVWLFDO SURFHGXUHV RI 6$6 */0$129$ &255 DQG77(67 ZHUH XVHG IRU GDWD
DQDO\VLVDQGLQWHUSUHWDWLRQIRUERG\ZHLJKWHHFHZHLJKWDJHFRDWFRORXUDQGEUHFKDUDFWHULVWLF
PHDVXUHPHQWV7KHPDLQHIIHFWVDUHSULPDULO\FRPSDUHGIRUEUHHGVH[DJHDQGFRDWFRORXUV
%:7):7DQGEUHFKDUDFWHULVWLFVDUHSUHVHQWHGE\EUHHGLQ7DEOH7KH%:7$)')6'
6)DQG&9ZHUHVLJQLFDQWO\KLJKHULQ6XULVWKDQ+XDFD\DVDOWKRXJKWKHQXPHULFDOVFDOHRI
GLIIHUHQFHZDVVPDOO+XDFD\DDOSDFDVKDGKLJKHU):7%):&)0)';)'1=%XON&59
DQG&59'WKDQ6XULEUHHGZKHUHDVWKHUHZDVQRGLIIHUHQFHLQ)6'/6/DQGDJHVWUXFWXUHRI
WKHWZREUHHGV7KHJHRJUDSKLFDOUHJLRQGLIIHUHQFHZDVQRWHYDOXDWHGLQWKLVVWXG\GXHWRWKH
VPDOOHUQXPEHURIUDQFKHVUHSUHVHQWLQJWKHUHJLRQV+RZHYHUDQLPDOVIURPWKHZHVWFRDVWDQG
FHQWUDOUHJLRQZHUHIRXQGWREHOLJKWHULQZHLJKWDQGQHULQHHFHIRUWKH+XDFD\DEUHHGLQWKH
HDUOLHUVXUYH\0F&ROOHWDO
7KH$)' PHDVXUHG LQ WKLV VWXG\ DSSHDUHG WR EH VLPLODU WR RU VOLJKWO\ FRDUVHU WKDQ DOSDFDV
UHSRUWHGLQWKH3HUXYLDQVWXGLHV0RUDQWHHWDO&HUYDQWHDHWDOEXWZDVQHUWKDQ
WKHLQWURGXFHGDOSDFDVUHSRUWHGHOVHZKHUH:XOLMLHWDO0F*UHJRUDQG%XWOHU
$OWKRXJKWKHUHZDVQRGLIIHUHQFHLQ6/EHWZHHQ+XDFD\DDQG6XULWKHYLVXDODSSHDUDQFHRI
6XULHHFHVVKRZHGWKH\ZHUHORQJHUWKDQWKRVHRI+XDFD\DV$FULPSOHVVORQJVWDSOHZLWK
SHQFLOORFNVDUHRIWKLVEUHHGVVLJQDWXUHEUHW\SH$UHFHQWLQYHVWLJDWLRQRI86ERUQDOSDFDV
LQGLFDWHGDVLQJOHDXWRVRPDOGRPLQDQWJHQHFRQWUROV6XULHHFHW\SHZKLFKZKHQVXEMHFWHGWR
VXSSUHVVLRQE\PRGLHUZDVVHJUHJDWLQJZLWKLQ+XDFD\D6XULSURJHQ\6SRQHQEXUJ
7KHHHFHZHLJKWDQGPDMRUEUHFKDUDFWHULVWLFVKHULWDELOLW\ZHUHHVWLPDWHGWREHPRGHUDWHWR
KLJK:XOLMLHWDO)UDQNHWDO&HUYDQWHVHWDO:DVKLQJ\LHOGPHGXOODWLRQ
DQGVWDSOHVWUHQJWKZHUHQRWGHWHUPLQHGLQWKLVVWXG\EXWWKHVHSURYHGWREHH[FHSWLRQDOO\KLJK
LQEUHVRI+XDFD\DDOSDFDV\LHOG VWDSOHVWUHQJWK !1NWH[LQWKH8QLWHG6WDWHV
0F&ROOHWDO
6LJQLFDQWGLIIHUHQFHEHWZHHQVH[HVZDVIRXQGLQ%:7):7)%7&9DQGDJHVWUXFWXUHV
7DEOH/XSWRQHWDOIRXQGDVLJQLFDQWHIIHFWRIVH[DJHDQGUHJLRQDQGFRDWFRORXU
RQWKHPHDVXUHGWUDLWV6LPLODUO\WKHDJHEUHHGDQGVH[KDGH[HUWHGDVLJQLFDQWHIIHFWRQERG\
ZHLJKWHHFHZHLJKWDQGVRPHEUHFKDUDFWHULVWLFVLQWKLVVWXG\0DOHVZHUHIRXQGWRSURGXFH

8EFPI &SH] [IMKLX IIGI [IMKLX IIGI FPEROIX [IMKLX ERH FVI GLEVEGXIVMWXMGW QIEWYVIH MR ,YEGE]E
R! ERH7YVMR! EPTEGEW
&VIIH
,YEGE]E
7YVM
8VEMXW
1IER
7(
1IER
7(
&;8OK
*;8OK
*&;OK
%*(Q
*(7(Q
':
7*Q
70QQ
'*
1*(Q
<*(Q
*7(0Q
&YPOGQK
,0QQ
'6:QQ
'6:(QQ
%+)]V

4 4

&;8FSH][IMKLX*;8IIGI[IMKLX%*(EZIVEKIFVIHMEQIXIV*&8IIGIFPEROIX[IMKLX*7(
FVIHMEQIXIVWXERHEVHHIZMEXMSR':GSIJGMIRXSJZEVMEXMSR'*GSQJSVXJEGXSV7*WTMRRMRKRIRIWW
70WXETPIPIRKXL1*(QMRMQYQFVIHMEQIXIV<*(QE\MQYQFVIHMEQIXIV*7(0FVIHMEQIXIV
ZEVMEXMSR EPSRK XLI PIRKXL &YPO 2I[ >IEPERH FYPO QIEWYVIQIRX ,0 ,EYXIYV PIRKXL '6: FVI
GYVZEXYVI'6:(GYVZEXYVIZEVMEXMSR
VOLJKWO\KHDYLHUHHFHZHLJKWZLWKOLJKWHU%:7WKDQIHPDOHV+RZHYHUWKHUHZDVQRGLIIHUHQFH
LQ$)'DQGRWKHUEUHPHDVXUHPHQWV%RG\ZHLJKWHHFHZHLJKWVDQG$)'LQFUHDVHGZLWK
LQFUHDVLQJDJHJURXSV7DEOH%:7LQFUHDVHGVLJQLFDQWO\IURPDJHWRDQGWKHQJUDGXDOO\
GHFUHDVHGLQDQGJURXSVKRZHYHU$)'ZDVFRQWLQXRXVO\FRDUVHUDWDERXWPLFURQ\HDUO\
IURPRQH\HDURIDJHWR\HDUROGV%RG\ZHLJKWHHFHZHLJKWDQGEUHFKDUDFWHULVWLFVYDULHG
DPRQJFRDWFRORXUJURXSV7DEOHZKHUHEODFNEHLJHDQGOLJKWIDZQJURXSVVKRZHGDKHDYLHU
):7WKDQRWKHUJURXSVZLWKVOLJKWO\FRDUVHUHHFHV7KHJUH\JURXSVKRZHGWKHORZHVWERG\
ZHLJKWDQGHHFHZHLJKWUHFRUGLQJVEXWDFRDUVHU$)'LQWKLVDQDO\VLV2WKHUFKDUDFWHULVWLF
GLIIHUHQFHVE\FRDWFRORXUZHUHVPDOODQGQHJOLJLEOH2YHUDOOGLIIHUHQFHVDWWULEXWDEOHWRFRDW
FRORXUZHUHIRXQGWREHVPDOOLQDOSDFDV/XSWRQHWDO
3HDUVRQVFRUUHODWLRQFRHIFLHQWVLQWKHVHOHFWHGQXPEHURIWUDLWVDUHJLYHQLQ7DEOH7KHUH
ZHUHDIHZQXPHULFDOO\KLJKDQGVLJQLFDQWFRUUHODWLRQVVXFKDVEHWZHHQ%:7DQG$)'
&59DQG%XONSRVLWLYHO\DQG$)'DQG&)$)'DQG&59QHJDWLYHO\7KH&59PHDVXUHLV
SRVLWLYHO\DVVRFLDWHGZLWKFULPSIUHTXHQF\EXWQHJDWLYHO\DVVRFLDWHGZLWKEUHGLDPHWHULQZRRO
)LVKHWDO7KHLQWULQVLFUHVLVWDQFHWRFRPSUHVVLRQRIDOSDFDEUHZDVORZ/XSWRQHW

8EFPI&SH][IMKLXIIGI[IMKLXERHFVIGLEVEGXIVMWXMGWF]WI\JIQEPI!ERHQEPI!
&VIIH
*IQEPI
1EPI
8VEMXW
1IER
7(
1IER
7(
&;8OK
*;8OK
*&;OK
%*(Q
*(7(Q
':
7*Q
70QQ
'*
*7(0Q
1*(Q
<*(Q
&YPOGQK
,0QQ
'6:QQ
'6:(QQ
%+)]V

4

&;8FSH][IMKLX*;8IIGI[IMKLX%*(EZIVEKIFVIHMEQIXIV*&8IIGIFPEROIX[IMKLX*(7(
ZEVMEXMSREPSRKXLIPIRKXL&YPO2I[>IEPERHFYPOQIEWYVIQIRX,0,EYXIYVPIRKXL'6:GYVZEXYVI
'6:(GYVZEXYVIZEVMEXMSRRWRSXWMKRMGERX
DOZKLFKLVLQDJUHHPHQWZLWKWKHFXUUHQWVWXG\PHDVXUHGFRUUHVSRQGLQJO\DVEXON$VD
FRPSDULVRQ+XDFD\DDOSDFDVKDYHIHZHUVWDSOHFULPSVWKDQWKHVLPLODUPLFURQJURXSRIVKHHS
ZRROZKHUHDV6XULDOSDFDEUHVDUHVWUDLJKWDQGQHDUO\IUHHRIFULPSV7KHUHIRUH6XULDOSDFDV
WHVWHGVLJQLFDQWO\ORZHULQEXONPHDVXUHPHQWWKDQ+XDFD\DV$OORWKHUFRUUHODWLRQFRHIFLHQWV
ZHUHIRXQGWREHORZLQYDOXHRUQHJOLJLEOHUHJDUGOHVVRIGLUHFWLRQ

8EFPI&SH][IMKLXIIGI[IMKLXERHFVIGLEVEGXIVMWXMGWF]EKIKVSYTW
8VEMXW
%KIKVSYT
&;8OK
*;8OK
%*(Q
*&;OK
*(7(Q
':
'*
7*Q
70QQ
1*(Q
<*(Q
7(0Q
&YPOGQK
,0QQ
'6:QQ
'6:(QQ
MM
MMM
MZ
ZM
ZMM
ZMMM
E

F

G

H

I

I

I

HI

EFGHI1IERW[MXLEHMJJIVIRXWYTIVWGVMTXHMJJIVWEX4!PIZIP
'6:(GYVZEXYVIZEVMEXMSRRWRSXWMKRMGERX
'SRGPYWMSRW
7KHERG\ZHLJKWHHFHZHLJKWDQGEUHFKDUDFWHULVWLFVLQWZREUHHGVRIDOSDFDVIDUPHGLQWKH
8QLWHG6WDWHVZHUHSUHVHQWHG)LEUHFKDUDFWHULVWLFVRI+XDFD\DDQG6XULZHUHIRXQGWREHVLPLODU
RUVOLJKWO\KLJKHUWKDQWKHLUQDWLYHFRXQWHUSDUWVLQ6RXWK$PHULFDDQG6XULDOSDFDEUHZDV
IRXQGWREHFRDUVHUWKDQ+XDFD\DLQWKH86IDUPHGDOSDFDV)OHHFHDQGEUHFKDUDFWHULVWLFVRI
ERWKEUHHGV+XDFD\DRU6XULDUHZLWKLQWKHGHVLUDEOHFKDUDFWHULVWLFVUHTXLUHGIRUWH[WLOHEUHV
DQGKRPHVSXQLQGXVWULHV

8EFPI&SH][IMKLXIIGI[IMKLXERHFVIGLEVEGXIVMWXMGGSQTEVMWSRF]GSEXGSPSYVKVSYTW
'SEXGSPSYV
&;8OK
*;8OK
%*(Q
*&;OK
*7(Q
':
'*
7*Q
70QQ
1*(Q
<*(Q
*7(0Q
&YPOGQK
,0QQ
'6:QQ
'6:(QQ
&PEGO
&IMKI
&VS[R
*E[R
+VI]
0*E[R
;LMXI

'6:(GYVZEXYVIZEVMEXMSR
8EFPI'SVVIPEXMSRGSIJGMIRXWEQSRKFSH][IMKLXIIGI[IMKLXERHWIPIGXIHFVIGLEVEGXIVMWXMGW
&;8
*;8
%*(
':
'*
70
'6:
*;8
%*(
':
'*
70
'6:
&YPO

4
&;8FSH][IMKLX*;8IIGI[IMKLX%*(EZIVEKIFVIHMEQIXIV':GSIJGMIRXSJZEVMEXMSR'*
GSQJSVXJEGXSV70WXETPIPIRKXL'6:GYVZEXYVI&YPO2I[>IEPERHFYPOQIEWYVIQIRX
4

%GORS[PIHKIQIRXW
7KHDXWKRUZRXOGOLNHWRWKDQNWKHDOSDFDEUHHGHUVDQGRZQHUVZKRSDUWLFLSDWHGLQWKLVVWXG\DQG
SURYLGHGWKHLUKHUGGDWDDQGHHFHVDPSOHVIRUWKHDQDO\VLV+XDFD\DDQG6XULDOSDFDSURGXFWLRQ
GDWDDQGHHFHVDPSOHVZHUHFROOHFWHGDQGSURYLGHGE\WKHIROORZLQJSDUWLFLSDQWVLQDOSKDEHWLF
RUGHU3DWWL $ODQ$QGHUVRQ:LOG5RVH6XUL5DQFK0'5LFN &RQQLH%RGHNHU%%)
$OSDFDV,1&01'HQHVH :LFN&DODKDQ3UDLULH:LQGV$OSDFD5DQFK//&&21LNNL
*ULIWK&ROOLQV6DQGROODU$OSDFDV:$5,&URZH,,%DU&5DQFK1(/DXULH'XII
5REHUWVRQ0RXQWDLQ6LON$OSDFDV:$(GGLH .DULO*UD\*UD]LQJ+LOOV$OSDFDV,'-DQ
.DUO+HLQULFK/RQJ+ROORZ6XUL$OSDFDV71&DUULH 7HYLV+XOO7LPEHU%DVLQ5DQFK
$OSDFDV,''LDQQH 'DYLG.HOOH\.HOOH\9DOOH\$OSDFDV//&,'-HDQQHWWH 'DYLG
0LOOHU6LHUUD1HYDGD$OSDFDV190DU\ 6WDQ0LOOHU$VSHQ$OSDFD&RPSDQ\,'0DUJLH
5D\5D\)DUPV//&2.%HWK5R\6XUL3HDN$OSDFDV&2.LP 0DUWLQ6KHOPDQ8WRSLD
$OSDFDV:$&DURO 5LFN7KD\HU%ORQGH9HOYHW 0H:$DQG%UHQGD -HIIHU\7UDPPHOO
(QFKDQWHG$FUHV5DQFK:$
,ZRXOGOLNHWRDFNQRZOHGJH0LVV/HL6KLDQG0LVV6KDQQRQ0F&DQDKH\P\JUDGXDWHVWXGHQWV
DW WKH 8QLYHUVLW\ RI 1HYDGD IRU WKHLU DVVLVWDQFH ZLWK DOSDFD EUH PHDVXUHPHQWV /LQFROQ
8QLYHUVLW\&RQWULEXWLRQ1R
6IJIVIRGIW
&HUYDQWHV,0$3pUH]&DEDO50RUDQWH$%XUJRV&6DOJDGR%1LHWR)*R\DFKHDQG-3*XWLHUUH]
*HQHWLF SDUDPHWHUV DQG UHODWLRQVKLSV EHWZHHQ EHU DQG W\SH WUDLWV LQ WZR EUHHGV RI 3HUXYLDQ DOSDFDV 6PDOO
5XPLQDQW5HVHDUFK
)LVK((7-0DKDUDQG%-&URRN)LEHUFXUYDWXUHPRUSKDPHWU\DQGPHDVXUHPHQWV:RRO7HFKQRORJ\ 6KHHS
%UHHGLQJ
)UDQN(109++LFN&'*DXQD+(/DPDV&5HQLHULDQG0$QWRQLQL3KHQRW\SLFDQGJHQHWLFGHVFULSWLRQ
RIEHUWUDLWVLQ6RXWK$PHULFDQGRPHVWLFFDPHOLGVOODPDVDQGDOSDFDV6PDOO5XPLQDQW5HVHDUFK
.DGZHOO00)HUQDQGH]+)6WDQOH\5%DOG-&:KHHOHU55RDGLRDQG0:%UXIRUG*HQHWLFDQDO\VLV
UHYHDOVWKHZLOGDQFHVWUHVVRIWKHOODPDDQGWKHDOSDFDV3URFHHGLQJVRIWKH5R\DO6RFLHW\RI/RQGRQ%SS

/XSWRQ&-$0F&ROODQG5+6WREDUW)LEHUFKDUDFWHULVWLFVRIWKHKXDFD\DDOSDFD6PDOO5XPLQDQW5HVHDUFK

0F&ROO$&/XSWRQDQG56WREDUW)LEHUFKDUDFWHULVWLFVRI86KXDFD\DDOSDFDV$OSDFDPDJD]LQHVXPPHU

0F*UHJRU %$ DQG ./ %XWOHU 6RXUFHV RI YDULDWLRQ LQ EHU GLDPHWHU DWWULEXWHV RI$XVWUDOLDQ$OSDFDV DQG
LPSOLFDWLRQVIRUHHFHHYDOXDWLRQDQGDQLPDOVHOHFWLRQ$XVWUDOLDQ-RXUQDORI$JULFXOWXUH5HVHDUFK
0RUDQWH5)*R\DFKH$%XUJRV,&HUYDQWHV0$3pUH]&DEDODQG-3*XWLHUUH]*HQHWLFLPSURYHPHQWIRU
DOSDFDEHUSURGXFWLRQLQWKH3HULYLDQ$OWLSODQR7KH3DFRPDUFDH[SHULHQFH$QLPDO*HQHWLF5HVRXUFHV,QIRUPDWLRQ
)$2RIWKH8QLWHG1DWLRQV
3XPD\DOOD$DQG&/H\YD3URGXFWLRQDQGWHFKQRORJ\RIWKHDOSDFDDQGYLFXJQDHHFH3URFHHGLQJVRIWKHUVW
LQWHUQDWLRQDOV\PSRVLXPRQVSHFLDOW\EHUV':,$DFKHQ*HUPDQ\SS
6SRQHQEHUJ'36XULDQGKXDFD\DDOSDFDEUHHGLQJUHVXOWVLQ1RUWK$PHULFD6PDOO5XPLQDQW5HVHDUFK

:XOLML 7 *+ 'DYLV .* 'RGGV 35 7XUQHU 51 $QGUHZV DQG *' %UXFH 3URGXFWLRQ SHUIRUPDQFH
UHSHDWDELOLW\DQGKHULWDELOLW\HVWLPDWHVIRUOLYHZHLJKWHHFHZHLJKWDQGEHUFKDUDFWHULVWLFVRIDOSDFDVLQ1HZ
=HDODQG6PDOO5XPLQDQW5HVHDUFK

(MZIVWMX]ERHGSQTEVMWSRSJ[SSPTEVEQIXIVWMR
HMJJIVIRX%QIVMGERERH)YVSTIERSZMRIFVIIHW
303DUpV&DVDQRYD53HUH]JURYDV*DU]DDQG--RUGDQD9LGDO
'HSWGH3URGXFFLy$QLPDO&LqQFLDL6DOXW$QLPDO8QLYHUVLWDWGH/OHLGD$Y$OFDOGH5RYLUD
5RXUH/OHLGD&DWDOXQ\D6SDLQSHUHPLTXHOS#SURGDQXGOFDW
,QVWLWXWR GH (VWXGLRV ,QGtJHQDV 8QLYHUVLGDG $XWyQRPD GH &KLDSDV ,(,81$&+ &HQWUR
8QLYHUVLWDULR&DPSXV,,,6DQ&ULVWyEDOGH/DV&DVDV&KLDSDV0p[LFR
'HSGH&LqQFLD$QLPDOLGHOV$OLPHQWV)DFXOWDWGH9HWHULQjULD8QLYHUVLWDW$XWzQRPDGH
%DUFHORQD(GLFL9%HOODWHUUD&DWDOXQ\D6SDLQ
%FWXVEGX
$VWXG\ZDVGHVLJQHGZLWKWKHDLPRIHVWDEOLVKLQJSKHQRW\SLFUHODWLRQVKLSVEHWZHHQFHUWDLQ
$PHULFDQ DQG (XURSHDQ DXWRFKWKRQRXV VKHHS EUHHGV EDVHG RQ ZRRO SDUDPHWHUV 'DWD ZHUH
FROOHFWHG IURP DQLPDOV IURP VKHHS EUHHGV RU YDULHWLHV 1LQH TXDQWLWDWLYH ZRRO
FKDUDFWHULVWLFVOHQJWKDQGDPRXQWRIORQJVKRUWDQGNHPSEUHVPHDQEUHGLDPHWHUDQG
EUHVZLWKGLDPHWHU!DQGSHUFHQWDJHDIWHUGHJUHDVLQJZLWKDOFRKROZHUHLQYHVWLJDWHG
$SULQFLSDOFRPSRQHQWDQDO\VLV3&$ZDVFDUULHGRXWZLWKWKHDLPRIREWDLQLQJWKHYDULDEOHV
H[KLELWLQJDSDWWHUQRIMRLQWO\FRQWULEXWLQJWRWKHWRWDOYDULDWLRQ7RSUHVHQWGDWDVWUXFWXUHDQG
UHODWLRQVKLSDPRQJSRSXODWLRQDFFHVVLRQVDFOXVWHUDQDO\VLVDQGDSULQFLSDOFRRUGLQDWHVDQDO\VLV
RIDOOWKHGDWDZHUHFRQGXFWHG)RUDOODQDO\VHVWKHFRUUHODWLRQPDWUL[ZDVXWLOLVHG3HUFHQWDJHRI
EUHVDQGQHQHVVDSSHDUDVWKHPRVWXVHIXOJURXSLQJFULWHULD7KHUHVXOWLQJGHQGURJUDPVKRZHG
DVKRUWFRDUVHZRROVKHHSDPHGLXPQHZRROVKHHSZLWKGLIIHUHQWSHUFHQWDJHVRIVKRUW
EUHVWKDWDOORZWKHPWREHGLYLGHGLQWRWKUHHVXEJURXSVDQGDORQJPHGLXPZRROVKHHS1R
VKRUWQHZRROVKHHSDSSHDUHG$OWKRXJKQRSK\ORJHQHWLFLQIRUPDWLRQLVJHQHUDWHGWKHUHVXOWV
VHHPWRHVWDEOLVKGLIIHUHQWEXWPRUHFRQFLVHJURXSVWKDQWKRVHWUDGLWLRQDOO\FRQVLGHUHG0HULQR
(QWUHQR&KXUURDQG,EHULDQVWRFN
.H\ZRUGVEUHGLDPHWHUFOXVWHULQJDQDO\VLVSK\ORJHQ\SRSXODWLRQDVVLJQPHQWVKHHSEUHHGV
-RXVSHYGXMSR
7KHUHLVOLWWOHSXEOLVKHGLQIRUPDWLRQDERXWFRPSDUDWLYHZRROFKDUDFWHULVWLFVIRUVRPHRIWKH
EUHHGVLQYHVWLJDWHG0RUHRYHUWKHUHKDYHEHHQFRQLFWLQJUHSRUWVLQWKHOLWHUDWXUHUHJDUGLQJWKH
UHODWLRQVKLSVEHWZHHQVRPH$PHULFDQDQG(XURSHDQEUHHGV,QWKLVSDSHUZHSUHVHQWDQDQDO\VLV
EDVHGRQEUHHGZRROFKDUDFWHULVWLFVZLWKDYLHZWRREWDLQLQJDGHHSHULQVLJKWLQWRUHODWLRQVKLSV
ZLWKLQDQGEHWZHHQEUHHGV
1EXIVMEPWERHQIXLSHW
7EQTPIGSPPIGXMSR
'DWDZDVFROOHFWHGIURPDQLPDOVEHORQJLQJWRWKLUW\RQHDXWRFKWKRQRXVEUHHGVRUYDULHWLHV
IURP$PHULFDDQG(XURSH)RUDGHVFULSWLRQRIWKHEUHHGVVHH(VWHEDQ0DQDJHPHQW
IRUHDFKEUHHGZDVGLIIHUHQWEXWHDFKSURYLGHGDJRRGUHSUHVHQWDWLRQRIWKHVWDQGDUGEUHHG
6DPSOHVZHUHWDNHQIURPWKHPLGODWHUDOSDUWRIHDFKHZHEHIRUHVKHDULQJ6DPSOHGDQLPDOV
ZHUHUDQGRPO\FKRVHQIURPKHUGV(DFKVDPSOHGDQLPDOZDVPRUHWKDQPRQWKVROG

(EXEGSPPIGXMSR
(DFKZRROVFKDUDFWHULVWLFVZHUHGHWHUPLQHGXVLQJVWDQGDUGPHWKRGVVHH5RMDVHWDODW
WKH:RRO4XDOLW\/DERUDWRU\DWWKH,QVWLWXWHIRU,QGLJHQRXV6WXGLHV8QLYHUVLGDG$XWyQRPDGH
&KLDSDV81$&+LQ6DQ&ULVWyEDOGH/DV&DVDV&KLDSDV0H[LFR1LQHZRROFKDUDFWHULVWLFV
ZHUHLQYHVWLJDWHGIRUHDFKVDPSOH3DUpVEUHOHQJWKFPSHUFHQWDJHRIHDFKW\SH
RIEUHORQJFRDUVHEUHVRXWHUFRDWVKRUWQHEUHVLQQHUFRDWDQGNHPSPHDQEUH
GLDPHWHUPSHUFHQWDJHRIEUHV!P)DQG\LHOGDIWHUVFRXULQJZLWKDOFRKRO1R
FRORXURUFULPSSDUDPHWHUVZHUHREWDLQHG'DWDIRUHDFKZRROVFKDUDFWHULVWLFVZHUHDQDO\VHG
IRUWKHLUHIIHFWVRQEUHHG
(EXEEREP]WMW
7RSUHVHQWGDWDVWUXFWXUHDQGUHODWLRQVKLSDPRQJSRSXODWLRQDFFHVVLRQVDSULQFLSDOFRPSRQHQW
DQDO\VLV3&$DQGFOXVWHUDQDO\VLVZHUHFRQGXFWHG$3&$ZDVFDUULHGRXWRIDOOWKHTXDQWLWDWLYH
GDWDZLWKWKHDLPRIREWDLQLQJDQDJJUHJDWHRIYDULDEOHVH[KLELWLQJDSDWWHUQRIMRLQWO\FRQWULEXWLQJ
WRWKHWRWDOYDULDWLRQ7KHUVWWKUHHHLJHQYHFWRUVZHUHH[WUDFWHGIURPWKHFRUUHODWLRQPDWUL[
GHULYHGIURPWKHQLQHPHDVXUHPHQWVFROOHFWHG&RUUHODWLRQUDWKHUWKDQDFRUUHODWLRQPDWUL[ZDV
XVHGEHFDXVHWKHIRUPHUPHDVXUHVVWDQGDUGLVHGYDULDWLRQDQGLVQRWDIIHFWHGE\XQHTXDOYDULDQFHV
WKDWRFFXULQGDWDPDWULFHVZLWKYDULDEOHVRIGLIIHUHQWDEVROXWHVL]H/ySH]0DUWtQHWDO
&KDUDFWHU ORDGLQJ LH FRPSRQHQW FRUUHODWLRQV ZDV XVHG WR GHWHUPLQH WKH FRQWULEXWLRQ RI
HDFKYDULDEOHWRWKHUVWFRPSRQHQWYHFWRU,QRUGHUWRRUJDQLVHEUHHGVLQWRIHDVLEOHJURXSV
D FRQVWUDLQHG PHWKRG XVLQJ :DUGV PHWKRG ZDV XWLOLVHG ZLWK GDWD IRU PRVW GLVFULPLQDWLYH
SDUDPHWHUV$SULQFLSDOFRRUGLQDWHDQDO\VLV3&R$ZDVQDOO\JHQHUDWHGIURPWKHFRUUHODWLRQ
PDWUL[7KHVFRUHVRIEUHHGVIRUWKHUVWWZRFRPSRQHQWVZHUHSURMHFWHG'LIIHUHQW3$67
3DOHRQWRORJLFDO6WDWLVWLFV6RIWZDUH3DFNDJHIRU(GXFDWLRQDQG'DWD$QDO\VLV+DPPHUHWDO
SURJUDPPHVZHUHXWLOLVHGWRSHUIRUPDOOWKHDQDO\VHV
'HVFULSWLYHVWDWLVWLFVIRUHDFKEUHHGDUHVKRZQLQ7DEOH,QWHUEUHHGFRUUHODWLRQVIRUWKHHQWLUH
SRSXODWLRQ VKRZHG FRQVLGHUDEOH YDULDWLRQ WR 7KHUH LV VLJQLFDQW YDULDELOLW\
DPRQJGLIIHUHQWEUHHGVZKLFKLQGLFDWHVDKLJKUHVSRQVHWRVHOHFWLRQ
7KHSORWRIVDPSOHPHDQVRQWKHUVWWZRSULQFLSDOFRPSRQHQWVD[HVLVVKRZQLQ)LJXUH
&RPSRQHQWZKLFKH[SODLQVRIWKHWRWDOVDPSOHYDULDQFHLVWKHVKRUWEUHSHUFHQWDJH
ZKHUHDV&RPSRQHQWZKLFKH[SODLQVRIWKHWRWDOVDPSOHYDULDQFHLVWKHORQJEUH
SHUFHQWDJHDQGQHQHVV7DEOHVKRZVWKHYDULDEOHFRQWULEXWLRQVLQWHUPVRISHUFHQWDJHRIWRWDO
YDULDQFHH[SODLQHGWRWKHIRUPDWLRQRID[HVREWDLQHGE\3&$$FFRUGLQJWRWKH3&$WKH
SULPDU\VRXUFH3&RIYDULDWLRQIRUWKHVDPSOHVWXGLHGZDVWKHSHUFHQWDJHRIVKRUWEUHV)LEUH
GLDPHWHUDQGSHUFHQWDJHRIORQJEUHVDUHVLJQLFDQWYDULDEOHVRI3&3HUFHQWDJHRINHPSEUHV
LVWKHVLJQLFDQWYDULDEOHIRU3&7KHVHDUHWKHQXVHIXODVJURXSLQJFULWHULDDVLQGLFDWHGE\
VRPHDXWKRUV%ULJJV0DGGHYHUDQG&RWWOH6FRXULQJVHHPVQRWWREHDQLPSRUWDQW
GLVFULPLQDWLYHSDUDPHWHU
8VLQJWKHFRUUHODWLRQPDWUL[RIWKHIRXUPRVWGLVFULPLQDWLYHSDUDPHWHUVSHUFHQWDJHRIHDFKNLQG
RIEUHEUHGLDPHWHUDQG)DGHQGURJUDPZDVREWDLQHGXWLOLVLQJ:DUGVPHWKRG)LJXUH
$VWKHJXUHVKRZVPRVWRIWKHEUHHGVDUHJURXSHGLQWRWKUHHODUJHFOXVWHUVZLWKRQHLVRODWHG
EUHHGDSSHDULQJ&+%7KHFOXVWHUVFRHIFLHQWFRUUHODWLRQZDV

/IQTFVIW
PIRKXLGQ
0SRKFVIW

7LSVXFVIW

/IQTFVIW

%6%
&)6
&'3
'%2
'%7
',&
','
',2
',9
'&%
'85
'&3
'&6
+90%'
0-2
1%2
+6%
1-6
1-<
132
136
2%:
3%<
6-4
61%
73'
8%,
8%6
<-7
>32

*

7LSVXFVIW
PIRKXLGQ
%VERIWE
&IVFIVMRE
&PERGE'SPSQFME
'EWXIPPERE2IKVE
'EWXMPPSRIWE
'LMETEWFPERGE
'LMETEWGEJq
'LMETEWRIKVE
'LYVVE
'LYVVEFEHERE
'LYVVEXIVVEUYIRXI
'VMSPPEHI&SPMZME
'VMSYPE&VEWMP
+YMVVE
0EX\E'LMPIRE
0MRGE
1ERGLIKE2IKVE
1IV+VEÊPIQE
1MVERHIWE
1M\XIGE
1SRHIKYIMVE
1SVE'SPSQFMERE
2EZENS'LYVVS
3E\EGE
6MTSPPIWE
6SNE1EPPSVUYMRE
7SGSVVS
8EVELYQEVE
8EVEWGSRIWE
<MWUYIXE
>SRKSPMGE
1IERHMEQIXIV
FVI
%FFV R
%PGSLSPMG]MIPH

&VIIHW
0SRKFVIW
PIRKXLGQ
8EFPI7SQIHIWGVMTXMZI[SSPXVEMXWJSVXLIWLIITFVIIHWWXYHMIH

7KH UHVXOWV RI WKH 3&R$ DUH VKRZQ LQ )LJXUH 7KH UHVXOWV REVHUYHG LQ WKH 3&R$ DQDO\VLV
UHLQIRUFHWKHUHVXOWVREVHUYHGLQWKHGHQGURJUDP$FOXVWHUIRUPHGE\*5$/$&021&%$
DQG&$6SUHVHQWVDODUJHEUHGLDPHWHUJUHDWHUWKDQPLFURQVDQGDPHGLXPSHUFHQWDJHRI
ORQJEUHV; DOORZLQJLWWREHODEHOOHGVKRUWFRDUVHZRROVKHHS7KHSUHVHQFHRI
*5$LQWKLVJURXSLVQRWVXUSULVLQJDVLWLVVDLGWKDWWKHEUHHGRULJLQDWHGDVDFURVVEHWZHHQWKH
0HULQRDQG&KXUUDWKHODWWHUEHLQJWKHFDXVHRIWKHFRDUVHZRRO(VWHEDQ
,WVKRXOGEHQRWHGWKDW&+%GLIIHUHGVRPHZKDWIURPRWKHUEUHHGVZLWKPRUHDEXQGDQWORQJ
EUHV; ZKLFKDUHDOVRQHU; PHGLDQ KLJKO\VNHZHGWRWKHULJKWZH

/RQJ

&RPSRQHQW
.HPSO
/RQJO

6KRUWO

.HPS
6KRUW

<LHOG

'LDP
)
&RPSRQHQW
*MKYVI4PSXSJXLIWEQTPIQIERWJSVRMRI[SSPTEVEQIXIVWSRXLIVWXX[STVMRGMTEPGSQTSRIRXE\IW
8EFPI:EVMEFPIGSRXVMFYXMSRWMRXIVQWSJTIVGIRXEKISJXSXEPZEVMERGII\TPEMRIHXSXLIJSVQEXMSRSJE\IW
SFXEMRIHF]4'%
0SRKFVIWPIRKXL
7LSVXFVIWPIRKXL
/IQTFVIWPIRKXL
0SRKFVIW
7LSVXFVIW
/IQTFVIW
%PGSLSPMG]MIPHMRK
(MEQIXIV
*
%\MW
%\MW
%\MW

E

E

E
E

E

E,MKLIWXGSRXVMFYXMSRSJZEVMEFPIWSYXSJ XSE\IWERH
FRXOGFODVVLI\LWDVDORQJQHZRROVKHHSZLWKDFOHDUGRXEOHFRDWORQJEUHVYV
VKRUWEUHV7KHVKRUWFRDUVHZRROVKHHSDQG&+%RFFXS\RSSRVLWHVLGHVRIWKHGHQGURJUDP
REWDLQHG7KHPLGGOHJURXSVFRXOGEHFODVVLHGDVPHGLXPQHZRROVKHHSZLWKDFOXVWHU
IRUPHGE\7$55,3;,60$10,550$$5$DQG%(5DQGDQRWKHUIRUPHGE\&+&
&%5%&2&74&%2DQG&+17KH\DUHFKDUDFWHULVHGE\KLJKO\XQLIRUPPHGLXPQHEUHV
; PHGLDQ EXWZLWKGLIIHUHQWSHUFHQWDJHVRIEUHVPRUHDEXQGDQWORQJEUHV
LQWKHODWWHUJURXS; ORQJPHGLXPQHJURXSWKDQLQWKHIRUPHU; VKRUW
PHGLXPQHJURXS$FFRUGLQJWR5RMDVHWDO0,5%&2&741$9&+8DQG&+,
KDYHVLPLODURULJLQV,QWKHODVWJURXS2$;=217$+1$9/,10,;025&+8*8,
&$1DQG62&WKHUHDUHEUHHGVZLWKYDOXHVWKDWFRXOGDOORZWKHPWREHFODVVLHGDVPLGGOH
PHGLXPQHZRROVKHHS; PHGLDQ DQGRIORQJEUHV,QWHUHVWLQJO\WKH

&$6
021
&%$
/$&
*5$
2$;
=21
7$+
1$9
/,1
0,;
025
&+8
*8,
&$1
62&
&+&
&%5
%&2
&74
&%2
&+1
7$5
5,3
0$1
50$
%(5
;,6
0,5
$5$
&+%

'LVWDQFH

*MKYVI'SRWXVEMRIHGPYWXIVMRK;EVHWQIXLSH GSIJGMIRXGSVVIPEXMSR!

&+%

&RRUGLQDWH

&$1

2$;
62&
025
0,;
1$9
/,1
&+8
*8,
7$+
=21
%(5
50$
5,3
0$1
7$5
&+1

*5$
&%2
&%5 $5$
&+&
%&2;,6
0,5
&74

/$&

021 &$6
&%$

&RRUGLQDWH

*MKYVI8[SHMQIRWMSREPTPSXSJXLITVMRGMTEPGSSVHMREXIWJVSQXLIGSVVIPEXMSRQEXVM\

&KXUUD&+8DQG/DW[DEUHHGV/$&ZKLFKEHORQJWRZKDWLVUHIHUUHGWRDV/DW[DVZHUH

JURXSHGLQWRGLIIHUHQWFOXVWHUV$VZHKDYHVHHQ/$&VKRZVDYHU\GLIIHUHQWSDWWHUQRIEUHV
ORZQHQHVVDQGDPHGLXPSHUFHQWDJHRIORQJEUHV$OOWKHVHPHGLXPVKHHSSUHVHQWDORZ
GHJUHHRIGLIIHUHQWLDWLRQLQWKHHHFH$OWKRXJKVRPHRIWKHPDUHVWLOOXVHGIRUWUDGLWLRQDOWH[WLOH
SXUSRVHVLQ,QGLDQYLOODJHVXVLQJWUDGLWLRQDOWH[WLOHSURFHVVHVWKH\GRQRWSRVVHVVDGRXEOHFRDW
DVRFFXUVLQ&+%DFFRUGLQJWRWKHELEOLRJUDSK\FRQVXOWHGIRULQVWDQFHVHH&RU]RHWDO
IRU=RQJROLFD1RVKRUWQHZRROVKHHSZLWKDYHU\VPDOOEUHGLDPHWHUPLFURQVRUOHVV
DSSHDUHG
'SRGPYWMSR
7KHGDWDUHSRUWHGKHUHSURYLGHYDOXDEOHLQVLJKWLQWRSRSXODWLRQDQGKHOSLQDVVHVVLQJLQWHUEUHHG
FRPSDULVRQVXSSRUWLQJWKHLGHDWKDWWKHDQDO\VLVRIUDFLDOUHODWLRQVKLSVLVQRWQHFHVVDULO\OLQNHG
WRKLVWRULFDOUHODWLRQVKLSV+RZHYHURXUUHVXOWVVHHPWRGHWHUPLQHGLIIHUHQWEXWPRUHFRQFLVH
JURXSVWKDQWKRVHWUDGLWLRQDOO\FRQVLGHUHG0HULQR(QWUHQR&KXUURDQG,EHULDQVWRFN
%GORS[PIHKIQIRXW
9HU\VSHFLDOWKDQNVDUHDOVRH[WHQGHGWRWKHPDQ\IDUPHUVDQGRZQHUVZKRPDGHLWSRVVLEOHWR
FROOHFWVDPSOHVIURPWKHLUKHUGV
6IJIVIRGIW
%ULJJV3((YDOXDWLQJZRRORQWKHOLYHDQLPDO7KH0DUNHU'HFHPEHU
&RU]R-(&LWODKXD'*DOGiPH]53HUH]JURYDV69DUJDV$*LODQG:3LWWURII&DUDFWHUL]DFLyQGHODODQD
HQRYHMDVDXWyFWRQDVFULDGDVSRULQGtJHQDV1DKXDVGHOD6LHUUDGH=RQJROLFD9HUDFUX]0p[LFR,Q3URFHHGLQJV
RI9,6LPSRVLXP,EHURDPHULFDQR6REUHOD&RQVHUYDFLyQ\8WLOL]DFLyQGH5HFXUVRV=RRJHQpWLFRV6DQ&ULVWyEDO
GHODV&DVDV&KLDSDV0p[LFRSS
(VWHEDQ&5D]DVJDQDGHUDVHVSDxRODV,,2YLQDV)($*$60DGULG6SDLQ
+DPPHU'$7+DUSHUDQG3'5\DQ3DVWSDOHRQWRORJLFDOVWDWLVWLFVVRIWZDUHSDFNDJHIRUHGXFDWLRQDQGGDWD
DQDO\VLV3DODHRQWRORJLD(OHFWURQLFDDYDLODEOHRQOLQHKWWSSDODHRHOHFWURQLFDRUJBSDVWLVVXHBKWPO
/ySH]0DUWtQ -0 - 5XL]2OPR DQG , 3DGUy &RPSDULVRQ RI VNXOO PHDVXUHPHQWV DQG VH[XDO GLPRUSKLVP
EHWZHHQWKH0LQRUFDQSLQHPDUWHQ0DUWHVPDUWHVPLQRULFHQFLVDQGWKH,EHULDQSLQHPDUWHQ0PPDUWHVD
FDVHRQLQVXODULW\0DPPDOLDQ%LRORJ\
0DGGHYHU'DQG'&RWWOH3URGXFWSURFHVV*URXSVDQGZRROSULFH:RRO7HFKQRORJ\DQG6KHHS%UHHGLQJ

3DUpV 30 &DUDFWHULW]DFLy HVWUXFWXUDO L UDFLDO GH OD UDoD RYLQD $UDQHVD 7KHVLV 8QLYHUVLWDW $XWzQRPD GH
%DUFHORQD%DUFHORQD6SDLQ
5RMDV$/53HUH]JURYDV*5RGUtJXH]35XVVR$OPHLGDDQG+$Q]ROD&DUDFWHUL]DFLyQPDFUR\PLFURVFySLFD
GHODODQDHQRYLQRVDXWyFWRQRVLEHURDPHULFDQRVGHYHOOyQEODQFR$UFKLYRVGH=RRWHFQLD

8IWXMRKSFNIGXMZIQIXVMGWJSVXLIHMJJIVIRXMEXMSRSJGSEX
GSPSYVWMRE7TERMWLEPTEGETSTYPEXMSR
(%DUWRORPp0-6iQFKH])3HxDDQG$+RUFDGD
'SWR&LHQFLDV$JURIRUHVWDOHVUHDGH3URGXFFLyQ$QLPDO(8,7$8QLYHUVLGDGGH6HYLOOD
&WUD8WUHUDNP6HYLOOD6SDLQHEDUWRORPH#XVHV
'SWR 3URGXFFLyQ $QLPDO )DFXOWDG GH 9HWHULQDULD 8QLYHUVLGDG GH &yUGRED &DPSXV GH
5DEDQDOHV&WUD0DGULG&yUGREDNP&yUGRED6SDLQ
%FWXVEGX
2EMHFWLYHPHDVXUHPHQWRIDOSDFDFRDWFRORXULVQRZDQLQWHJUDOSDUWRIWKHSURFHVVRIVKRZLQJ
EUHHGLQJ PDUNHWLQJ DQG FODVVLQJ RI DOSDFDV7KH DLP RI WKLV VWXG\ ZDV WR WHVW WKH FDSDFLW\
RIWKH&,(/DE&RORXULPHWULF6\VWHPWRGLIIHUHQWLDWHEHWZHHQFRDWFRORXUFODVVHVGHQHGE\
RIFLDOSDWWHUQVLQDOSDFDV7KHVHFODVVHVZHUHGHQHGUHJDUGLQJWRGLIIHUHQWSUHHVWDEOLVKHG
VXEMHFWLYHSDWWHUQV%ULWLVKDQG$XVWUDOLDQRIFLDOSDWWHUQVWKH,&$5SDWWHUQSURSRVDODQGWKH
FRORXUHVWLPDWHGE\WKHUHVHDUFKHULQWKHHOGDQGFRPSDUHGZLWKTXDQWLWDWLYHFRORXULPHWULF
PHDVXUHPHQWV DFFRUGLQJ WR D VWDQGDUGLVHG LQWHUQDWLRQDO SURFHGXUH $ WRWDO RI DOSDFDV
IURP6XULDQG+XDFD\DEUHHGVZHUHPHDVXUHGDWVKRXOGHUULEVDQGFURXSIRU
FRORXULPHWULFSDUDPHWHUVDQGFODVVLHGDFFRUGLQJWRWKHVHIRXUFRORXUSDWWHUQV7KHGLVFULPLQDQW
DQDO\VLVVKRZHGWKDWZKLOHEODFNDQGZKLWHFRORXUVZHUHWKHEHVWDVVLJQHGFRDWVE\REVHUYDWLRQ
DWDQGUHVSHFWLYHO\WKHFRORXULPHWHUDVVLJQHGPRUHFRDWVWRWKHVHSDWWHUQVWKDQ
WKRVHLGHQWLHGE\REVHUYDWLRQDQGDVVLJQHGE\FRORXULPHWHURYHUDQGLGHQWLHG
IRUEODFNDQGZKLWHFRDWFRORXUVUHVSHFWLYHO\
.H\ZRUGV&,(/DE&RORXULPHWULF6\VWHP/DPDSDFRVFRORXUFKDUWHHFHFODVVLFDWLRQ
-RXVSHYGXMSR
$OSDFDV/DPDSDFRV/DUHGRPHVWLF6RXWK$PHULFDQFDPHOLGVORFDWHGPDLQO\LQWKH$QGHDQ
UHJLRQVRI%ROLYLDDQGEUHGIRUEUHDQGPHDWSURGXFWLRQ%RQDYLD$OWKRXJKFDPHOLGV
ZHUHUHJDUGHGDVEHLQJH[FOXVLYHO\DGDSWHGWRWKLVHQYLURQPHQWLQWURGXFWLRQWRYDULRXVRWKHU
FRXQWULHVKDVEHHQKLJKO\VXFFHVVIXO:XOLMLHWDOHQKDQFLQJWKLVPDUNHWDOORYHUWKHZRUOG
+RZHYHUWKHPDLQLQWHUHVWRIWKHVHFRXQWULHVLQWKHVHDQLPDOVLVDVEUHSURGXFHUVDQGSHWV
$OSDFDEUHLVHVSHFLDOO\DSSUHFLDWHGIRUWKHODUJHQXPEHURIQDWXUDOFRORXUVUDQJLQJIURP
ZKLWH WR EODFN ZLWK VHYHUDO LQWHUPHGLDWH OHYHOV )$2 )UDQN HW DO 6HYHUDO
SDWWHUQVKDYHEHHQGHYHORSHGWRFODVVLI\DOSDFDHHFHLQWHUPVRIEUHFRORXUIROORZLQJHLWKHU
VXEMHFWLYH UHJDUGLQJ WR YLVXDO SDUDPHWHUV RI D WUDLQHG MXGJH WKDW DVFULEHV WKH EUH FRORXU
IROORZLQJDQRIFLDOFRORXUSDWWHUQSDQHO%XVWLQ]D6FKPLGRUREMHFWLYHPHWKRGV
RIFODVVLFDWLRQDFFRUGLQJWR0XQVHOO&RORXU6\VWHP5XL]GH&DVWLOODDQG0DPDQL
5HQLHULHWDOXVLQJQHDULQIUDUHGUHHFWDQFHVSHFWURPHWHURU6$0%$PHWKRGV/XSWRQ
DQG0F&ROORUDFFRUGLQJWRSLJPHQWFRQFHQWUDWLRQPHDVXUHPHQW7RWKHWDO
7KHUHIRUHDQREMHFWLYHPHDVXUHPHQWPHWKRGWKDWFRXOGDFFXUDWHO\DVFULEHHHFHFRDWFRORXU
DFFRUGLQJWRRIFLDOFRORXUSDQHOVZLWKRXWWKHDVVHVVPHQWRIDWUDLQHGMXGJHZRXOGLPSURYHWKH
UHOLDELOLW\RIWKHPHDVXUHV
7KH&RPPLVVLRQ,QWHUQDWLRQDOHGHO(FODLUDJH/ D E V\VWHPLVDFRORXULPHWULFPHDVXUHPHQW
PHWKRGWKDWZDVVSHFLHGIRUWKHUHSUHVHQWDWLRQRIDXQLIRUPFRORXUVSDFHWKDWFRXOGDSSUR[LPDWH
KXPDQ YLVLRQ ,W ZDV EDVHG RQ WKH 0XQVHOO &RORXU 6\VWHP DFFRXQWLQJ IRU D ZLGHU FRORXU

VSHFWUXP)XUWKHUPRUHWKH&,(FRORXUPHWKRGKDVSUHYLRXVO\EHHQXVHGWRWHVWEUHFRORXULQ
DOSDFDVSURYLQJWREHTXLWHDFFXUDWHLQGLIIHUHQWLDWLQJPDLQFRORXUJURXSV%DUWRORPpHWDO
,QWKLVUHJDUGWKHDLPRIWKLVVWXG\ZDVWRWHVWWKHGLVFULPLQDWLRQFDSDFLW\RIWKH&,(
/ D E &RORXULPHWULF6\VWHPWRGLIIHUHQWLDWHEHWZHHQFRDWFRORXUFODVVHVGHQHGE\RIFLDO
SDWWHUQVLQDOSDFDV
1EXIVMEPWERHQIXLSHW
$WRWDORIDOSDFDVIURPGLIIHUHQWIDUPVRIWKH6SDQLVKSRSXODWLRQZHUHPHDVXUHGIURP
WKH6XULEUHHGDQGIURPWKH+XDFD\D&RDWFRORXURIHYHU\DQLPDOZDVFDWHJRULVHGDFFRUGLQJ
WRYHGLIIHUHQWSUHHVWDEOLVKHGVXEMHFWLYHSDWWHUQV%ULWLVKFODVVHV$XVWUDOLDQFODVVHV
DQG3HUXYLDQFODVVHVWKHRIFLDO,&$5SDWWHUQSURSRVDO$QWRQLQLWKDWGHVFULEHG
FODVVHVDQGWKHFRORXUHVWLPDWHGE\WKHUHVHDUFKHULQWKHHOGZLWKFODVVHV7DEOH
&RDWFRORXUZDVDOVRPHDVXUHGTXDQWLWDWLYHO\DFFRUGLQJWRDVWDQGDUGLVHGLQWHUQDWLRQDOPHWKRG
WKH&RPPLVVLRQ,QWHUQDWLRQDOHGHO(FODLUDJH/ D E &,(/DEZKHUH/ GHVFULEHVOLJKWQHVV
ZLWKYDOXHVIURPEODFNWRZKLWHD GHVFULEHVFRORXUVDWXUDWLRQIURPUHGWRJUHHQRQD
VFDOHRIWRZKHUHSRVLWLYHYDOXHVLQGLFDWHYDU\LQJLQWHQVLWLHVRIUHGDQGE GHVFULEHV
FRORXUVDWXUDWLRQIURP\HOORZWREOXHRQDVFDOHRIWRZKHUHSRVLWLYHYDOXHVLQGLFDWH
YDU\LQJLQWHQVLWLHVRI\HOORZ)RUWKHFRORXULPHWULFSDUDPHWHUVHDFKDQLPDOZDVPHDVXUHGDOLYH
RQWKUHHGLIIHUHQWERG\UHJLRQVVKRXOGHUULEVDQGFURXSWDNLQJWKHFRORXULPHWHUPHDVXUHPHQW
IURPWKHEDVHRIWKHEUH)RUWKHFRORXULPHWULFPHDVXUHPHQWVD0LQROWD&KURPD0HWHUPRGHO
&5ZDVXVHG
$XQLYDULDWH$129$DQGDPXOWLYDULDWH0$129$YDULDQFHDQDO\VLVZHUHSHUIRUPHGWR
DWWHPSWWRQGVLJQLFDQWGLIIHUHQFHVEHWZHHQFRDWFRORXUVDFFRUGLQJWRFRORXULPHWULFSDUDPHWHUV
8EFPI(IWGVMTXMSRSJXLIHMJJIVIRXGSPSYVGLEVXWYWIHXSHIRIXLIGSEXGSPSYVSJXLI7TERMWLEPTEGETSTYPEXMSR
&VMXMWLTEXXIVR
%YWXVEPMERTEXXIVR
4IVYZMERTEXXIVR
-'%6TEXXIVR
6IWIEVGLIV
[LMXI
PMKLXJE[R
QIHMYQJE[R
HEVOJE[R
PMKLXFVS[R
QIHMYQFVS[R
HEVOFVS[R
FPEGO
PMKLXKVI]
QIHMYQKVI]
HEVOKVI]
VSWIKVI]VSER
[LMXI
PMKLXJE[R
QIHMYQJE[R
HEVOJE[R
PMKLXFVS[R
QIHMYQFVS[R
HEVOFVS[R
FPEGO
PMKLXKVI]
QIHMYQKVI]
HEVOKVI]
VSWIKVI]VSER
[LMXI
PMKLXGVIEQ
QIHMYQGVIEQ
HEVOGVIEQ
FVS[R
PMKLXGSJJII
QIHMYQGSJJII
HEVOGSJJII
FPEGO
PMKLXKVI]
YRHIRIHKVI]
HEVOKVI]
VSER
[LMXI
PMKLXJE[R
PMKLXFVS[R
WIPJFVS[R
HEVOFVS[R
FPEGO
PMKLXKVI]
WIPJKVI]
HEVOKVI]
PMKLXVSER
WIPJVSER
HEVOVSER
PMKLXTMRO
WIPJTMRO
HEVOTMRO
[LMXI
JE[R
FVS[R
FPEGO
QM\IH
KVI]
'SPSYVPIZIPWRSXMRGPYHIHMRXLIEREP]WMWHYIXSRSXFIMRKTVIWIRXMRXLITSTYPEXMSR

$FFXUDF\RIFRORXUDVVLJQDWLRQDFFRUGLQJWRWKHSDWWHUQFKDUWXVHGDQGWRWKH&,(/DEFRORXU
V\VWHPZDVDVVHVVHGE\DFODVVLFDWLRQPDWUL[IURPDGLVFULPLQDQWDQDO\VLV$OOWKHVWDWLVWLFDO
DQDO\VHVZHUHSHUIRUPHGXVLQJWKH6WDWLVWLFDYVRIWZDUH
$OWKRXJKGLUHFWYLVXDODSSUDLVDORIFRDWFRORXUSDWWHUQFDUULHGRXWZLWKRWKHUREMHFWLYHGHVFULSWLRQ
PHWKRGVVXFKDVWKH0XQVHOO&RORXU6\VWHPDUHQRWYHU\DFFXUDWHDQGVKRXOGEHVXSSRUWHG
E\RWKHUREMHFWLYHPHWKRGV&HFFKLHWDO/DXYHUJQHHWDOWKH0$129$DQG
$129$DQDO\VHVVKRZHGVLJQLFDQWVWDWLVWLFDOGLIIHUHQFHVIRUDOOWKHFRORXUOHYHOVGHVFULEHGLQ
HYHU\FRORXUFKDUWDVVHVVHGDFFRUGLQJWRWKHFRORXULPHWULFSDUDPHWHUV/ D DQGE UHFRUGHG
SHUDQLPDO7KLVFRXOGEHGXHWRDPRUHFRPSOHWHFRORXUVSDFHVSHFLHGE\WKLVPHWKRGWKDQWKH
0XQVHOO&RORXUV\VWHP
5HJDUGLQJ WKH GLVFULPLQDQW DELOLW\ RI WKH &,(/DE &RORXU 6\VWHP WR FODVVLI\ EUH FRORXUV
DFFRUGLQJWRGLIIHUHQWSUHHVWDEOLVKHGFRORXUFKDUWVWKHDFFXUDF\KLJKOLJKWHGZDVORZHUWKDQ
ZRXOGEHH[SHFWHGIURPWKHSUHYLRXVUHVXOWV7DEOHZLWKWKH5HVHDUFKHUSDWWHUQWKHFKDUWWKDW
VKRZHGWKHKLJKHVWSHUFHQWDJHRIFRUUHFWDVVLJQDWLRQVZLWKDVFRUHIROORZHGE\,&$5
SDWWHUQZLWKWKH%ULWLVKDQG3HUXYLDQSDWWHUQZLWKHDFKDQGQDOO\WKH$XVWUDOLDQ
SDWWHUQ ZLWK 'HVSLWH WKDW WKH SHUFHQWDJH RI FRUUHFW DVVLJQDWLRQV VKRZHG PHGLXP WR
PRGHUDWHKLJKYDOXHVWKHUHOLDELOLW\RIWKHV\VWHPDSSHDUHGWREHTXLWHORZEHFDXVHIRUHYHU\
SRRORIFRDWVDVVLJQHGQHLWKHURIWKHSDWWHUQVVWXGLHGFRXOGDVVXUHOHVVWKDQIDOVHSRVLWLYHV
FRQVLGHUDEO\GHFUHDVLQJWKHDFFXUDF\RIWKHWHVW)DOFRQHUDQG0DFND\+RZHYHUWKHVH
UHVXOWVKLJKOLJKWHGWKHIDFWWKDW5HVHDUFKHUDQG,&$5SDWWHUQVZHUHWKHFRORXUFODVVLFDWLRQV
8EFPI 'PEWWMGEXMSR QEXVM\ HMWGVMQMRERX EREP]WMW JSV ZI GSEX GSPSYV TEXXIVRW EREP]WIH EGGSVHMRK XS
GSPSYVMQIXIVTEVEQIXIVW0EERHF
'SPSYVW
6IWIEVGLIVTEXXIVR
;LMXI
*E[R
&VS[R
&PEGO
+VI]
1M\IH
8SXEP
&VMXMWLTEXXIVR
;LMXI
0MKLXJE[R
1IHMYQ*E[R
(EVOJE[R
0MKLXFVS[R
1IHMYQ&VS[R
(EVOFVS[R
&PEGO
6SWIKVI]
8SXEP
4IVGIRXEKISJGSVVIGX
EWWMKREXMSRW
%WWMKRIHF]XLIGSPSYV
TEXXIVR
%WWMKRIHF]XLI
GSPSYVMQIXIV


8EFPI'SRXMRYIH
'SPSYVW
%YWXVEPMERTEXXIVR
;LMXI
0MKLXJE[R
1IHMYQ*E[R
(EVO*E[R
0MKLX&VS[R
1IHMYQ&VS[R
(EVOFVS[R
&PEGO
6SWIKVI]
8SXEP
4IVYZMERTEXXIVR
;LMXI
0MKLXGVIEQ
1IHMYQ'VIEQ
(EVOGVIEQ
0MKLXGSJJII
1IHMYQGSJJII
(EVOGSJJII
&PEGO
9RHIRIHKVI]
8SXEP
-'%6TEXXIVR
;LMXI
0MKLXJE[R
0MKLXFVS[R
7IPJFVS[R
(EVOFVS[R
&PEGO
7IPJTMRO
8SXEP
4IVGIRXEKISJGSVVIGX
EWWMKREXMSRW
%WWMKRIHF]XLIGSPSYV
TEXXIVR
%WWMKRIHF]XLI
GSPSYVMQIXIV

WKDWFRXOGEHEHVWGHVFULEHGE\FRORXULPHWHUSDUDPHWHUV7KLVFRXOGEHGXHWRWKHIDFWWKDWWKHVH
FKDUWVVKRZHGWKHOHDVWQXPEHURIFRORXUFODVVHVDQGWKXVZRXOGEHHDV\WRWZLWKLQWHUYDOV
IURPWKHFRQWLQXRXVGLVWULEXWLRQUHSUHVHQWHGE\WKH&,(/DE
5HJDUGLQJWKH5HVHDUFKHUSDWWHUQEHVLGHWKHIDFWWKDWEODFNDQGZKLWHFRORXUVZHUHWKHEHVW
DVVLJQHGFRDWVE\REVHUYDWLRQLQDDQGUHVSHFWLYHO\WKHFRORXULPHWHUDVVLJQHG
PRUH FRDWV WR WKHVH SDWWHUQV WKDQ WKRVH LGHQWLHG E\ REVHUYDWLRQ DQG DVVLJQHG E\
FRORXULPHWHURYHUDQGLGHQWLHGIRUEODFNDQGZKLWHFRDWFRORXUVUHVSHFWLYHO\2QWKH
RWKHUFRORXUFKDUWVEURZQFRORXUVDSSHDUHGWREHWKHEHVWDVVLJQHGFRDWVE\REVHUYDWLRQZLWK
WKHFRORXULPHWHUDVWKHPHWKRGWKDWDVVLJQHGPRUHFRDWVWRWKHVHSDWWHUQV7KXVIRUWKH%ULWLVK
SDWWHUQPHGLXPEURZQDQGGDUNEURZQFRORXUVVKRZHGDQGRIFRUUHFWDVVLJQDWLRQV
UHVSHFWLYHO\DQGPRUHFRDWVDVVLJQHGE\FRORXULPHWHUWKDQE\YLVXDOREVHUYDWLRQLQERWK
FDVHVIRUWKH$XVWUDOLDQSDWWHUQGDUNEURZQFRORXUVKRZHGRIFRUUHFWDVVLJQDWLRQVDQG

DOVRPRUHFRDWVDVVLJQHGE\FRORXULPHWHUIRUWKH3HUXYLDQSDWWHUQPHGLXPDQGGDUNFRIIHH
FRORXUVVKRZHGWKHKLJKHVWSHUFHQWDJHVDQGUHVSHFWLYHO\ZLWKDQGPRUHFRDWV
DVVLJQHGE\FRORXULPHWHUUHVSHFWLYHO\DQGQDOO\GDUNEURZQZDVWKHFRDWWKDWVKRZHGWKH
KLJKHVWSHUFHQWDJHRIFRUUHFWDVVLJQDWLRQVIURPWKH,&$53DWWHUQZLWKPRUHFRDWV
DVVLJQHGE\FRORXULPHWHU7KLVODVWSDWWHUQDOVRVKRZHGWKHVDPHQXPEHURIFRDWVDVVLJQHGHLWKHU
E\WKHFRORXUSDWWHUQDQGWKHFRORXULPHWHUIRUOLJKWIDZQDQGOLJKWEURZQFRORXUV
'HVSLWHWKHIDFWWKDW5HVHDUFKHUSDWWHUQVHHPVWREHWKHPHWKRGWKDWFRXOGEHEHWWHUGHVFULEHG
E\FRORXULPHWHUSDUDPHWHUVDPRUHDFFXUDWHPHWKRGZRXOGEHPRUHGHVLUDEOHEHFDXVHPRVWRI
WKHSDWWHUQFKDUWVXVHGDWWKHSUHVHQWWLPHIRUEUHFRORXUFODVVLFDWLRQDWWHPSWVIRUPRUHFRORXU
FODVVHV:XOLMLHWDO)$2,QWKLVUHJDUGWKH,&$5SDWWHUQWKDWDVFULEHPRUH
FRORXUFODVVHVDSSHDUHGDOVRWREHZHOOGHVFULEHGE\WKH&,(/DEFRORXULPHWULFV\VWHP,Q
WKH,QWHUQDWLRQDO&RPPLWWHHIRU$QLPDO5HFRUGLQJ,&$5VHWXSD:RUNLQJ*URXSRQ$QLPDOV
IRU)LEUHZLWKWKHPDLQREMHFWLYHRISURYLGLQJDFRPPRQDSSURDFKWR$OSDFDEUHHGPDQDJHPHQW
SD\LQJSDUWLFXODUDWWHQWLRQWREUHSURGXFWLRQ$QWRQLQL7KXVWKHUHVXOWVRIWKLVVWXG\
KLJKOLJKWHGWKHFRORXUSDWWHUQSURSRVHGE\WKLVRUJDQLVDWLRQDVDGHVLUDEOHFODVVLFDWLRQWREH
XVHGE\WKH&,(/DEFRORXUV\VWHPQRWIRUJHWWLQJWKHOLPLWVDVVHVVHGKHUHDVRQO\RIWKH
FRDWFRORXUVZRXOGEHFRUUHFWO\DVVLJQHG
'SRGPYWMSR
7KH UHVXOWV KLJKOLJKWHG WKDW WKH &,(/DE FRORXU V\VWHP VHHPV WR EH D XVHIXO PHWKRG IRU
GLIIHUHQWLDWLQJFRDWFRORXUVLQDOSDFDEUH2WKHUZLVHWKHUHOLDELOLW\RIWKHUHVXOWVDSSHDUHG
QRWWREHYHU\KLJKDVWKHSHUFHQWDJHRIIDOVHSRVLWLYHVFRDWVZURQJO\DVVLJQHGWRRQHFRORXU
ZRXOGEHKLJK5HJDUGLQJWKHRIFLDOSDWWHUQVVWXGLHGWKH5HVHDUFKHUSDWWHUQVHHPVWREH
PRVWDFFXUDWHGHVSLWHWKHIDFWWKDWLWVKRZHGIHZFRORXUFODVVHV2QWKHRWKHUKDQGWKLVVWXG\
KDVKLJKOLJKWHGWKH,&$5SDWWHUQSURSRVDODVDPRGHUDWHO\XVHIXOSDWWHUQWRFODVVLI\DOSDFDEUH
FRORXUVZLWKWKH&,(/DEFRORXUV\VWHP
)XUWKHUVWXGLHVVKRXOGEHFDUULHGRXWLQRUGHUWRQGDQREMHFWLYHPHDVXUHPHQWPHWKRGWKDWFRXOG
DFFRXQWIRUDOOWKHFRDWFRORXUFODVVHVFXUUHQWO\GHVFULEHGE\WKHPDUNHWHHFHFRORXUSDWWHUQV
MXVWDVGLIIHUHQFHVLQFRDWFRORXUVDFFRUGLQJWRWKHDOSDFDEUHHG6XULRU+XDFD\D
%GORS[PIHKIQIRXW
7KHDXWKRUVZLVKWRWKDQNWKH6SDQLVK$OSDFDEUHHGHUVIRUWKHLUFROODERUDWLRQLQSURYLGLQJWKH
LQIRUPDWLRQIRUWKLVVWXG\
6IJIVIRGIW
$QWRQLQL0,&$5JXLGHOLQHVIRUDOSDFDVKHDULQJPDQDJHPHQWEUHKDUYHVWLQJDQGJUDGLQJ,QSURFHHGLQJVRI
WK,&$56HVVLRQ1LDJDUD)DOOV2QWDULR&DQDGD-XQH
%DUWRORPp()3HxD0-6iQFKH]-'D]D$0ROLQDDQG-3*XWLpUUH]*HQHWLFDQDO\VLVRIFRORULPHWULF
SDUDPHWHUVIRUWKHGLIIHUHQWLDWLRQRIFRDWFRORXUVLQWKH6SDQLVK$OSDFDVSRSXODWLRQWK$QQXDO0HHWLQJRIWKH
(XURSHDQ$VVRFLDWLRQIRU$QLPDO3URGXFWLRQ$XJXVWUGWK%DUFHORQD6SDLQ
%RQDYLD'/RV&DPHOLGRV6XGDPHULFDQRV6RXWK$PHULFDQ&DPHOLGV,)($83&+&RQVHUYDWLRQ,QWHUQDWLRQDO
/LPD3HUXSS
%XVWLQ]D9 /D DOSDFD FRQRFLPLHQWR GHO JUDQ SRWHQFLDO DQGLQR 7KH DOSDFD NQRZOHGJH RI WKH JUHDW DQGLQH
SRWHQWLDO/LEUR2FLQDGH5HFXUVRVGH$SUHQGL]DMH8QLYHUVLGDG1DFLRQDOGHO$OWLSODQR3XQR3HUXSS

&HFFKL733DVVDPRQWL(1)UDQN0*RQ]DOHV)3XFFLDUHOOLDQG&5HQLHUL3LJPHQWDWLRQLQ6RXWK$PHULFDQ
FDPHOLGV3DUW,4XDQWLFDWLRQDQGYDULDWLRQRIFRPELQHGHXPHODQLQVDQGSKHRPHODQLQVLQYDULRXVFRDWFRORXUV,Q
0*HUNHQDQG&5HQLHULHGV3URJUHVVLQ6$&DPHOLGV5HV($$33XE1RSS
)DOFRQHU'6DQG)&0DFND\,QWURGXFWLRQWR4XDQWLWDWLYH*HQHWLFV/RQJPDQ*URXS/WG(VVH[8.SS
)$2 )RRG DQG $JULFXOWXUH 2UJDQL]DWLRQ 6LWXDFLyQ $FWXDO GH ORV &DPpOLGRV 6XGDPHULFDQRV HQ HO 3HU~
3UHVHQWVLWXDWLRQRI6RXWK$PHULFDQFDPHOLGVLQ3HUX3UR\HFWRGH&RRSHUDFLyQ7pFQLFDHQDSR\RDODFULDQ]D\
DSURYHFKDPLHQWRGHORV&DPpOLGRV6XGDPHULFDQRVHQOD5HJLyQ$QGLQD7&35/$$YDLODEOHDWZZZUOF
IDRRUJHVJDQDGHULDSGISHUSGI
)UDQN(0+LFN&*DXQD+/DPDV&5HQLHULDQG0$QWRQLQL3KHQRW\SLFDQGJHQHWLFGHVFULSWLRQRIEUH
WUDLWVLQ6RXWK$PHULFDQGRPHVWLFFDOPHOLGVOODPDVDQGDOSDFDV6PDOO5XPLQDQW5HVHDUFK
/DXYHUJQH--&5HQLHULDQG(1)UDQN,GHQWLFDWLRQRIVRPHDOOHOLFVHULHVLQ'RPHVWLF&DPHOLGVRI$UJHQWLQD
,Q0*HUNHQDQG&5HQLHULHGVQG(XURSHDQ6\PSRVLXPRQ6RXWK$PHULFDQ&DPHOLGVSS
/XSWRQ & DQG $ 0F&ROO (YDOXDWLRQ RI WZR REMHFWLYH PHWKRGV IRU PHDVXULQJ OXVWHU LQ 6XUL DOSDFD EUH
FRPSDULVRQZLWKVXEMHFWLYHOXVWHUDVVHVVPHQWVDQGFRUUHODWLRQZLWKRWKHUSK\VLFDOSURSHUWLHV6XUL1HWZRUN1HZV
$SULOSS
5HQLHUL&07UDEDO]D0DULQXFFL*0DUWLQRDQG**LRUGDQR3UHOLPLQDU\UHSRUWRQTXDOLWjRIKDLUDQGFRDW
FRORXULQSLJPHQWHGDOSDFD3URFHHGLQJV,;,WDOLDQ$63$SS
5XL]GH&DVWLOOD0DQG10DPDQL(VWXGLRSUHOLPLQDUGHOFRORUGHODEUDGH/ODPDHQORVGLVWULWRVGH&DOODOOL\
7LVFRSURYLQFLDGH&D\OORPDB$UHTXLSD3UHOLPLQDU\VWXGLHVRI/DPDEUHFRORXULQ&DOODOOLDQG7LVFRGLVWULFWV
,Q,QIRUPHGHWUDEDMRVGHLQYHVWLJDFLyQHQ$OSDFDV\/ODPDVGHFRORU9ROXPH,EUDVSS
6FKPLG67KHYDOXHFKDLQRIDOSDFDEUHLQ3HUXDQHFRQRPLFDQDO\VLV0DVWHU7KHVLV,QVWLWXWIU$JUDUZLUWVFKDIW
(7+=ULFK6ZLW]HUODQG
7RWK=0.DSV-6|ONQHU,%RGRDQG,&XULN4XDQWLWDWLYHJHQHWLFDVSHFWVRIFRDWFRORXULQKRUVHV-RXUQDO
RI$QLPDO6FLHQFH
:XOLML 7 *+ 'DYLV .* 'RGGV 35 7XUQHU 51 $QGUHZV DQG *' %UXFH 3URGXFWLRQ SHUIRUPDQFH
UHSHDWDELOLW\DQGKHULWDELOLW\HVWLPDWHVIRUOLYHZHLJKWHHFHZHLJKWDQGEUHFKDUDFWHULVWLFVRIDOSDFDVLQ1HZ
=HDODQG6PDOO5XPLQDQW5HVHDUFK

&VIIHMRKERHKIRIXMGW
&VIIHMRKERHKIRIXMGW
%REP]WMWSJXLIQMXSGLSRHVMEPHMZIVWMX]SJEPTEGEWMRIMKLX
JEVQMRKEVIEWSJXLIWSYXLSJ4IVY
&0HOR$0DQXQ]D00HOR/2OLYHUDDQG0$PLOOV
'HSDUWDPHQWGH&LqQFLD$QLPDOLGHOV$OLPHQWV8QLYHUVLWDW$XWzQRPDGH%DUFHORQD
%HOODWHUUD6SDLQ&DUROD0HOR#XDEFDW
)DFXOWDGGH0HGLFLQD9HWHULQDULD\=RRWHFQLD8QLYHUVLGDG1DFLRQDOGHO$OWLSODQR3XQR
3HUX
%FWXVEGX
$OSDFD/DPDSDFRVLVDGRPHVWLFDWHG6RXWK$PHULFDQFDPHOLGPDLQO\GLVWULEXWHGLQ3HUX
DOWKRXJKDOVRSUHVHQWLQ%ROLYLD&KLOHDQG(FXDGRU7KLVVSHFLHVKLJKO\DSSUHFLDWHGEHFDXVHRI
LWVOXVWURXVDQGVLON\QDWXUDOEUHKDVEHHQSRRUO\VWXGLHGDWWKHJHQHWLFOHYHO&KDUDFWHULVDWLRQ
RI WKH JHQHWLF GLYHUVLW\ RI DOSDFD ZRXOG EH IXQGDPHQWDO IRU JDLQLQJ QHZ LQVLJKWV LQWR SDVW
GRPHVWLFDWLRQHYHQWVDVZHOODVIRUXQGHUVWDQGLQJWKHGHPRJUDSKLFKLVWRU\RIWKLVVSHFLHV,Q
WKHSUHVHQWZRUNZHUHSRUWWKHPLWRFKRQGULDOJHQHWLFYDULDELOLW\RIDOSDFDVQ GLVWULEXWHG
LQHLJKWIDUPLQJDUHDVRIWKHVRXWKUHJLRQRI3HUX6HTXHQFLQJRIWKH'ORRSUHJLRQUHYHDOHG
WKHH[LVWHQFHRIKDSORW\SHV+DSORW\SH+GDQGQXFOHRWLGHGLYHUVLWLHVUHDFKHGYDOXHV
RI DQG UHVSHFWLYHO\ 0RUHRYHU DQDO\VLV RI WKH F\WRFKURPH E UHJLRQ HYLGHQFHG
WKHVHJUHJDWLRQRIKDSORW\SHV+G :HFDQFRQFOXGHWKDWGHVSLWHWKH
GUDVWLFUHGXFWLRQLQWKHFHQVXVRIDOSDFDVWKHUHLVVWLOODFRQVLGHUDEOHOHYHORIJHQHWLFYDULDWLRQ
0HGLDQMRLQLQJQHWZRUNDQGQHLJKERXUMRLQLQJSK\ORJHQHWLFDQDO\VHVVKRZHGWKHH[LVWHQFHRI
WZRJXDQDFROLNHDQGYLFXxDOLNHPLWRFKRQGULDOKDSORJURXSV7KHVHUHVXOWVPLJKWEHH[SODLQHG
E\WKHRFFXUUHQFHRIDQFLHQWK\EULGLVDWLRQHYHQWVEHWZHHQOODPDVDQGDOSDFDVZLWKWKHJRDORI
UHFRYHULQJWKHDOSDFDSRSXODWLRQWKDWZDVGHFLPDWHGE\WKH6SDQLVKFRORQLVHUVWZRFHQWXULHVDJR
.H\ZRUGVDOSDFD'ORRSF\WRFKURPHEGLYHUVLW\
-RXVSHYGXMSR
$OSDFDLVRQHRIWKHPRVWLPSRUWDQWGRPHVWLFDQLPDOVLQWKH$QGHDQUDQJH3HUX&KLOHDQG
%ROLYLDRFFXS\LQJPRXQWDLQRXVDUHDVDWDQDOWLWXGHRIPHWHUVDQGIHHGLQJRQQDWXUDO
JUDVV,WLVHVWLPDWHGWKDWWKHZRUOGZLGHFHQVXVRIDOSDFDVLVPLOOLRQEHLQJPRVWO\GLVWULEXWHG
LQ3HUXRIWKLVFHQVXVDQGZLWKLQWKLVFRXQWU\DW3XQRZZZLQLDJRESH$OSDFDVZHUH
GRPHVWLFDWHGDSSUR[LPDWHO\<%3E\WKH,QFDV7KHQHTXDOLW\RILWVHHFHLWVVRFLDEOH
FKDUDFWHUDQGLQWHOOLJHQFHDQGLWVHDV\KDQGOLQJPDNHVWKHDOSDFDQRWRQO\DYDOXDEOHGRPHVWLF
DQLPDOEXWDOVRDSRSXODUSHW$VRI6SDQLVKFRORQLVDWLRQDQGZLWKWKHLQWURGXFWLRQRI
,EHULDQGRPHVWLFDQLPDOVWKHQDWLYHRFNVRIDOSDFDZHUHGHFLPDWHG,QWKLVZD\DWOHDVW
RIDOSDFDVDQGOODPDVGLVDSSHDUHGRQHKXQGUHG\HDUVDIWHUWKHDUULYDORIWKH6SDQLVKFRORQLVHUV
)ORUHV2FKRDEHLQJGLVSODFHGWRJUHDWDOWLWXGHVZKHUHIRUHLJQGRPHVWLFDQLPDOVFRXOG
QRWEHUDLVHG1RYRDDQG:KHHOHU6XPDUDQG*DUFtD$QRWKHUFRQVHTXHQFHRIWKH
6SDQLVKFRORQLVDWLRQZDVWKDWWKHDGPL[WXUHRIZLOGDQGGRPHVWLFFDPHOLGVEHFDPHPRUHDQG
PRUHIUHTXHQWDQGJHQHWLFSDWWHUQVRIHDFKVSHFLHVZHUHSURJUHVVLYHO\GLOXWHG,QWKHFDVHRI
DOSDFDWKLVLQYROYHGDGHFUHDVHLQEUHTXDOLW\.DGZHOOHWDO,QWKHODVW\HDUVHIIRUWV
KDYHEHHQPDGHWRSUHVHUYHWKHJHQHWLFUHVHUYRLURIDOSDFDV2QHRIWKHPDLQOLQHVRIDFWLRQRI
FRQVHUYDWLRQSURJUDPPHVLVWRFKDUDFWHULVHWKHJHQHWLFGLYHUVLW\RIWKLVVSHFLHVZLWKPROHFXODU
PDUNHUV+HUHZLWKZHKDYHDQDO\VHGWKHYDULDELOLW\RIWKHPLWRFKRQGULDO'1$RI+XDFD\DDQG
6XULDOSDFDVGLVWULEXWHGLQHLJKWIDUPLQJDUHDVRI6RXWKHUQ3HUX

&VIIHMRKERHKIRIXMGW
1EXIVMEPWERHQIXLSHW
*HQRPLF '1$ ZDV H[WUDFWHG IURP VDPSOHV RI KDLU WDNHQ IURP DOSDFDV UHSUHVHQWDWLYH RI
WKH+XDFD\DDQG6XULW\SHV6DPSOHGUHJLRQVZHUHFKRVHQDFFRUGLQJWRWKHLUFHQVXV
SKHQRW\SLFDQGSURGXFWLRQVSHFLFLWLHVDQGRWKHUFULWHULD)LJXUH7DEOH
*MKYVI4IVYZMERPSGEPMXMIWWEQTPIHMRSYVWXYH]
8EFPI+ISKVETLMGEPHMWXVMFYXMSRSJXLIEPTEGEWWEQTPIHMRXLIGYVVIRXWXYH]
7EQTPIHVIKMSRW
7EQTPIWMÎ']X&
7EQTPIWMÎ(PSST
2YySE4YRS
%^jRKEVS4YRS
0EQTE4YRS
7ERXE0YGuE4YRS
3GYZMVM4YRS
1EGYWERM4YRS
'E]PPSQE%VIUYMTE
0E]S'YWGS
8SXEP

&VIIHMRKERHKIRIXMGW
)UDJPHQWVFRUUHVSRQGLQJWRWKHWRWDOLW\RIWKHFRQWURO'ORRSESDQG&\WRFKURPHE

&\W%ESPLWRFKRQGULDOUHJLRQVZHUHDPSOLHGE\3&53ULPHUVZHUHGHVLJQHGEDVHG
RQ *HQ%DQN VHTXHQFH 1&B 3&5 SURGXFWV ZHUH SXULHG ZLWK WKH NLW ([R6$3,7
NLW*(+HDOWKFDUHDQGVHTXHQFHGZLWKWKH%LJ'\H7HUPLQDWRUY&\FOH6HTXHQFLQJNLW
$SSOLHG %LRV\VWHPV 6HTXHQFLQJ UHDFWLRQV ZHUH GHQDWXUHG DQG HOHFWURSKRUHVHG LQ DQ$%,
35,60GHYLFH$SSOLHG%LRV\VWHPV0LWRFKRQGULDOVHTXHQFHVZHUHDQDO\VHGZLWKWKH
6HTXHQFLQJ$QDO\VLVY$SSOLHG%LRV\VWHPVVRIWZDUHDQGWKHDOLJQPHQWRIQXFOHRWLGH
VHTXHQFHVIRUWKHWZRJHQHVZDVFDUULHGRXWXVLQJ0XVFOHLPSOHPHQWHGLQ%RVTXHY
5DPtUH])ODQGHVDQG8OORD7KH'QD63YSURJUDPPH5R]DVHWDOZDVXVHG
WR FDOFXODWH QXFOHRWLGH DQG KDSORW\SH +G GLYHUVLWLHV 7KH 1HWZRUN Y VRIWZDUH
)OX[XV7HFKQRORJ\/WGZDVHPSOR\HGWRFRQVWUXFWDPHGLDQMRLQLQJQHWZRUNLQFOXGLQJDOO
PLWRFKRQGULDOVHTXHQFHV%RVTXHYZDVXVHGWRQGRXWWKHEHVWPRGHOIRURXUGDWDVHW
ZKLFKLV+.<*DVGHQHGZLWKWKH-0RGHOWHVWDSSOLFDWLRQ'DWDZHUHFOXVWHUHGXVLQJWKH
0D[LPXP/LNHOLKRRGVWDWLVWLFDOPHWKRGDQGWKHQERRWVWUDSSHGDVDPHDVXUHRIUREXVWQHVV,Q
DGGLWLRQWKHUHVXOWLQJWUHHZDVHGLWHGXVLQJ0(*$7DPXUDHWDO
6HTXHQFLQJRIWKHDOSDFD'ORRSUHJLRQ'ORRSVKRZHGWKHH[LVWHQFHRIKDSORW\SHVZLWK
KLJK KDSORW\SLF +G DQG QXFOHRWLGH GLYHUVLWLHV 6LPLODUO\ F\WRFKURPH
%DQDO\VHVHYLGHQFHGWKHH[LVWHQFHRIKDSORW\SHVZLWKKLJKKDSORW\SLF+G DQG
QXFOHRWLGH 7KHVHUHVXOWVDUHVLPLODUWRSUHYLRXVGDWDREWDLQHGLQRWKHUFDPHOLG
VSHFLHVZLWKPLFURVDWHOOLWHPDUNHUV3HQHGRHWDO6DVVHHWDO6DUQRHWDO
:KHHOHUHWDO0DWpHWDODQG0DUtQHWDO:HFDQFRQFOXGHWKDWLQVSLWH
RIWKHERWWOHQHFNVDQGIRXQGHUHIIHFWVWKDWWKLVVSHFLHVKDVXQGHUJRQHLQWKHODVWFHQWXULHVWKHUH
LVVWLOODFRQVLGHUDEOHOHYHORIJHQHWLFGLYHUVLW\$VVKRZQLQ)LJXUHPD[LPXPOLNHOLKRRG
SK\ORJHQHWLFDQDO\VLVRI&\W%VHTXHQFHVKDVDOORZHGXVWRLGHQWLI\WZRPDLQPLWRFKRQGULDO
OLQHDJHVFRUUHVSRQGLQJWRYLFXxDDQGJXDQDFR6LPLODUUHVXOWVZHUHREWDLQHGZKHQSHUIRUPLQJ
PHGLDQMRLQLQJQHWZRUNDQDO\VHV)LJXUH3K\ORJHQHWLFDQDO\VHVRI'ORRSVHTXHQFHVZHUH
DOVRIXOO\FRQVLVWHQWZLWK&\W%GDWDUHVXOWVQRWVKRZQ
7KHH[LVWHQFHRIWKHVHWZRPDLQOLQHDJHVZDVUVWO\UHSRUWHGE\.DGZHOOHWDODQG
:KHHOHUHWDO7KH\H[SODLQHGWKLVQGLQJRQWKHEDVLVRIDQLQWURJUHVVLRQRIOODPDVWKDW
KDUERXUJXDQDFRW\SHPLWRFKRQGULDOKDSORW\SHVZLWKLQWKHDOSDFDJHQHSRROWKDWLWLVH[SHFWHG
WRGHVFHQGIURPGRPHVWLFDWHGYLFXxDV,IVRWKHPDWHUQDOLQWURJUHVVLRQRIDOSDFDVZLWKOODPDV
ZRXOGKDYHEHHQYHU\H[WHQVLYHLQRXUVWXG\RIWKH&\W%VHTXHQFHVDUHJURXSHGLQWKH
JXDQDFRFOXVWHU:HFDQDOVRFRQFOXGHWKDWWKHUHLVDVXEVWDQWLDOJHQHRZEHWZHHQWKHVHYHQ
IDUPLQJDUHDVDQDO\VHGLQRXUVWXG\PLWRFKRQGULDOVHTXHQFHVGRQRWFOXVWHUDFFRUGLQJWRWKHLU
JHRJUDSKLFDOORFDWLRQ
,QWKHODVWWZRGHFDGHVPDOHDOSDFDVKDYHEHHQV\VWHPDWLFDOO\FURVVHGZLWKIHPDOHOODPDVDVD
ZD\RIPD[LPLVLQJWRWDOSURGXFWLRQRIWKHKLJKO\SULFHGDOSDFDHHFH6LQFHSULFHVKDYHEHHQ
PRVWO\GLFWDWHGE\HHFHZHLJKWZLWKRXWWDNLQJLQWRDFFRXQWQHQHVVWKHTXDOLW\RIDOSDFD
EUHKDVGHFUHDVHGVWHDGLO\7KLVIDUPLQJSUDFWLFHPLJKWEHWKHPDLQUHDVRQIRUWKHKLJKOODPD
LQWURJUHVVLRQRIDOSDFDV.DGZHOOHWDO

&VIIHMRKERHKIRIXMGW
*MKYVI1E\MQYQPMOIPMLSSHTL]PSKIRIXMGXVIIHITMGXMRKKIRIXMGVIPEXMSRWLMTWFIX[IIREPTEGEKYEREGSERH
ZMGYyEWIUYIRGIW&VERGLPIRKXLWEVITVSTSVXMSREPXSTL]PSKIRIXMGHMWXERGIWEQSRKWXMRHMZMHYEPW
'SRGPYWMSRW
7KHUHVXOWVRIWKLVZRUNVKRZWKDWWKHFXUUHQWSRSXODWLRQRIVRXWK3HUXYLDQDOSDFDVGLVSOD\VD
KLJKJHQHWLFYDULDELOLW\DQGWKDWDOSDFDVKDYHEHHQVWURQJO\LQWURJUHVVHGE\OODPDVDWOHDVWDWWKH
PDWHUQDOOHYHO$OWKRXJKWKLVK\EULGLVDWLRQSURFHVVPLJKWKDYHVXEVWDQWLDOO\LQFUHDVHGDOSDFD
JHQHWLFGLYHUVLW\IUHTXHQFLHVRIDOOHOHVIDYRXULQJDKLJKHUHHFHTXDOLW\PLJKWKDYHH[SHULHQFHG
DGUDVWLFUHGXFWLRQDVDUHVXOWRIDGPL[WXUH7KHLGHQWLFDWLRQRIDOSDFDVKDUERXULQJYLFXxDOLNH
DOOHOHVPLJKWEHIXQGDPHQWDOWRLPSOHPHQWLQJVWUDWHJLHVDLPHGDWUHFRYHULQJSDUWRIWKHSULPLWLYH
DOSDFDJHQHSRRO
%GORS[PIHKIQIRXW
0DQ\WKDQNVWRDOOWKH3HUXYLDQDOSDFDIDUPHUVZKRFRQWULEXWHGVDPSOHVWRRXUVWXG\

&VIIHMRKERHKIRIXMGW
*MKYVI1IHMERNSMRMRKRIX[SVOSJ']X&WIUYIRGIWJVSQEPTEGEWHMWXVMFYXIHMRWIZIRJEVQMRKEVIEW)EGLGMVGPI
VITVIWIRXWEKMZIRLETPSX]TIERHMXWWMÎMWTVSTSVXMSREPXSLETPSX]TIJVIUYIRG]
6IJIVIRGIW
)ORUHV2FKRD-$&DXVDVTXH2ULJLQDURQOD$FWXDO'LVWULEXFLyQ(VSDFLDOGHODV$OSDFDV\/ODPDV,Q/0LOOLRQHV
DQG+7RPRHGDHGV(O+RPEUH\VX$PELHQWHHQORV$QGHV&HQWUDOHV2VDND1DWLRQDO0XVHXPRI(WKQRORJ\
2VDND6HQUL(WKQRORJLFDO6WXGLHVSS
.DGZHOO00)HUQiQGH]+6WDQOH\5%DOGL-:KHHOHU55RVDGLRDQG0%UXIRUG*HQHWLFDQDO\VLVUHYHDOV
WKHZLOGDQFHVWRUVRIWKHOODPDDQGWKHDOSDFD3URFHHGLQJVRI5R\DO6RFLHW\RI/RQGRQ
3HQHGR0$&DHWDQRDQG.&RUGRYD0LFURVDWHOOLWHPDUNHUVIRU6RXWK$PHULFDQFDPHOLGV$QLPDO*HQHWLFV

0DWp0)'L5RFFR$=DPEHOOLDQG/9LGDO5LRMD0LWRFKRQGULDO'1$6WUXFWXUHDQG2UJDQL]DWLRQRIWKH
&RQWURO5HJLRQRI6RXWK$PHULFDQ&DPHOLGV0ROHFXODU(FRORJ\1RWHV
0DUtQ-&&DVH\0.DGZHOO.<D\D'+RFHV-2OD]DEDO55RVDGLR-5RGULJXH]$6SRWRUQR0%UXIRUG
DQG-:KHHOHU0LWRFKRQGULDOSK\ORJHRJUDSK\DQGGHPRJUDSKLFKLVWRU\RIWKH9LFXxDLPSOLFDWLRQVIRU
FRQVHUYDWLRQ+HUHGLW\
1RYRD&DQG-:KHHOHU/ODPD\DOSDFD,Q,/0DVRQHG(YROXWLRQRIGRPHVWLFDWHGDQLPDOV/RQJPDQ
/RQGRQ8QLWHG.LQJGRPSS
5DPtUH])ODQGHV6DQG28OORD%RVTXH,QWHJUDWHGSK\ORJHQHWLFDQDO\VLVVRIWZDUH%LRLQIRUPDWLFV

5R]DV--6iQFKH]'HOEDUULR;0HVVHJXHUDQG55R]DV%LRLQIRUPDWLFV
6DVVH-00DULDVHJDUDQ5%DEX-.LQQHDQG8:HUQHU\6RXWK$PHULFDQFDPHOLGPLFURVDWHOOLWHDPSOLFDWLRQ
LQ&DPHOXVGURPHGDULHV$QLPDO*HQHWLFV
7DPXUD . - 'XGOH\ 0 1HL DQG 6 .XPDU 0(*$ 0ROHFXODU (YROXWLRQDU\ *HQHWLFV$QDO\VLV 0(*$
VRIWZDUHYHUVLRQ0ROHFXODU%LRORJ\DQG(YROXWLRQ
6DUQR5:)UDQNOLQ-2%ULHQDQG:-RKQVRQ3DWWHUQVRIPW'1$DQGPLFURVDWHOOLWHYDULDWLRQLQDQLVODQG
DQGPDLQODQGSRSXODWLRQRIJXDQDFRVLQVRXWKHUQ&KLOH$QLPDO&RQVHUYDWLRQ
6XPDU-DQG0*DUFLD3ULQFLSLRVGHOD5HSURGXFFLyQGHODDOSDFD,9,7$81060/LPD3HU~
:KHHOHU-0)HUQiQGH]55RVDGLR'+RFHV0.DGZHODQG0%UXIRUG'LYHUVLGDGJHQpWLFD\PDQHMRGH
SREODFLRQHVGHYLFXxDVHQHO3HU~5HYLVWD9LUWXDO9LVLyQ9HWHULQDULD3HU~
:KHHOHU-,QIRUPHQDO,1&$*523UR\HFWR,GHQWLFDFLyQ\UHVFDWHGHDOSDFDVJHQpWLFDPHQWHSXUDVGHOD
DPHQD]DGHH[WLQFLyQ/LPD3HUX

&VIIHMRKERHKIRIXMGW
%WMTERH1'6G(2%TSP]QSVTLMWQMREPTEGE
&%DWKUDFKDODP9/D0DQQD&5HQLHULDQG$/D7HU]D
6FKRRO RI (QYLURQPHQWDO DQG 1DWXUDO 6FLHQFHV 8QLYHUVLW\ RI &DPHULQR 9LD *HQWLOH ,,, GD
9DUDQR&DPHULQR0&,WDO\FKDQGUDPRKDQEDWKUFKDODP#XQLFDPLW
%FWXVEGX
$JRXWLVLJQDOOLQJSURWHLQ$VLSDQG0HODQRFRUWLQ5HFHSWRU0&5UHSUHVHQWNH\SOD\HUV
LQFRDWFRORXUGHWHUPLQDWLRQLQPDPPDOV7RLQYHVWLJDWHWKHUROHRIWKHVHJHQHVLQFRDWFRORXU
YDULDWLRQ LQ DOSDFD P51$ SXULHG IURP VNLQ ELRSVLHV RI GLIIHUHQW FRORXUHG DQLPDOV ZHUH
UHYHUVHWUDQVFULEHGLQWRVLQJOHVWUDQGHGF'1$VDQGWKHFRGLQJVHTXHQFHV&'6DPSOLHGE\
3&5FORQHGDQGVHTXHQFHG0RUHRYHUDQGLQDGGLWLRQWR&'6WKHDQGXQWUDQVODWHGUHJLRQV
875VRIERWKJHQHVZHUHDOVRFKDUDFWHULVHGE\5$&(H[SHULPHQWV,QIDFWWKHVHUHJXODWRU\
UHJLRQV FDQ SRWHQWLDOO\ KRVW SRO\PRUSKLVPV DEOH WR VLJQLFDQWO\ DOWHU$VLS DQG 0&5 JHQH
H[SUHVVLRQOHYHOV,QWKLVVWXG\ZHGHVFULEHGIRUWKHUVWWLPHVHYHQVLQJOHSRLQWPXWDWLRQVLQWKH
&'6RI$VLSRIZKLFKWKUHHZHUHIRXQGWREHVLOHQWPXWDWLRQVDQGIRXUZHUHPLVVHQVHDPLQR
DFLGFKDQJLQJPXWDWLRQV0&5DQDO\VLVXQYHLOHGDWRWDORIWHQPXWDWLRQVLQWKH&'6DQG
DPRQJWKRVHRQHZDVESIUDPHVKLIWPXWDWLRQIRXUZHUHVLOHQWPXWDWLRQVDQGYHZHUHPLVVHQVH
PXWDWLRQV)XUWKHUDQDO\VLVRIWKH$VLS875QWVKRZHGWKUHHPXWDWLRQVLQFOXGLQJRQH
WUDQVYHUVLRQ DQG WZR WUDQVLWLRQ PXWDWLRQV ORFDWHG DW DQG QW GRZQVWUHDP IURP WKH
VWRSFRGRQUHVSHFWLYHO\6LPLODUO\WKUHHWUDQVLWLRQPXWDWLRQZHUHDOVRLGHQWLHGLQWKH875
QWRI0&5ORFDWHGDQGQWGRZQVWUHDPIURPWKHVWRSFRGRQ,QFRQWUDVWWZR
GLIIHUHQW875VZHUHFKDUDFWHULVHGIRU0&5DQGQW*HQRW\SLQJDVVD\VDQGVHPL
TXDQWLWDWLYH573&5DQDO\VLVRI$VLSDQG0&5WUDQVFULSWVWRHYDOXDWHH[SUHVVLRQGHSHQGHQW
FRDWFRORXUYDULDWLRQDUHFXUUHQWO\LQSURJUHVV
.H\ZRUGV$VLS0&5F'1$SRO\PRUSKLVPDOSDFD
-RXVSHYGXMSR
3LJPHQWDWLRQLQPDPPDOVLVNQRZQWREHLQXHQFHGE\PRUHWKDQJHQHV0RQWROLXHWDO
$PRQJWKHVHZHQGWZRPDMRUJHQHVQDPHO\$VLSDQG0&5ZKLFKDFWE\UHJXODWLQJ
WKHW\SHDPRXQWDQGGLVWULEXWLRQSDWWHUQRIWKHSLJPHQWVHXPHODQLQDQGSKHRPHODQLQ0ROHFXODU
JHQHWLFVDQGSKDUPDFRORJLFDOVWXGLHVKDYHVKRZQWKDWPXWXDOO\H[FOXVLYHELQGLQJ2OOPDQQHW
DORI0&5E\WKHDJRXWLSURWHLQRUE\PHODQRF\WHVWLPXODWLQJKRUPRQH06+
VLJQDOVKDLUEXOEPHODQRF\WHVWRV\QWKHVLVHHLWKHUSKHRPHODQLQRUHXPHODQLQUHVSHFWLYHO\,Q
DOSDFDDZLGHYDULHW\RIFRORXUVH[LVWV3KHQRW\SHVJHQHWLFVRIEUHWUDLWV)UDQNHWDO
DQGTXDQWLWDWLYHYDULDWLRQRIPHODQLQLQDOSDFDDQGOODPDVKDYHEHHQVWXGLHGLQWKHFRQWH[W
RI FKHPLFDO SURSHUWLHV RI PHODQLQV DQG PRUSKRORJ\ RI PHODQRVRPHV &HFFKL HW DO
2QO\YHU\OLPLWHGLQIRUPDWLRQLVDYDLODEOHDERXWWKHPROHFXODUEDVLVRIFRDWFRORXULQDOSDFD
7KHUHIRUHIXUWKHUNQRZOHGJHRIWKHPROHFXODUPHFKDQLVPEHKLQGFRDWFRORXUYDULDWLRQLVQHHGHG
WRDVVLVWWKHEUHHGHULQEUHSURGXFWLRQ,QWKLVSDSHUZHLQYHVWLJDWHGDQGUHSRUWHGIRUWKHUVW
WLPH$VLSDQG0&5F'1$SRO\PRUSKLVPLQ3HUXYLDQDOSDFDSRSXODWLRQ

&VIIHMRKERHKIRIXMGW
1EXIVMEPERHQIXLSHW
'SPPIGXMSRERHWXSVEKISJWOMRFMSTWMIW
6NLQ ELRSVLHV IURP FRORXUHG EODFN ZKLWH DQG EURZQ DOSDFDV ZHUH FROOHFWHG LQ 51$ODWHU
6,*0$*HUPDQ\IURP4XLPVDFKDWD([SHULPHQWDO6WDWLRQ3HUX7KHELRSVLHVZHUHVWRUHGDW
&IRUIXUWKHUDQDO\VLV
4VMQIVHIWMKRMRK
8VLQJ1&%,*HQ%DQNRUWKRORJRXVVHTXHQFHVRI$VLSDQG0&5IURPRWKHUPDPPDOVZHUH
FROOHFWHGDOLJQHGZLWK(0%/&OXVWDO:WRLGHQWLI\WKHFRQVHUYHGUHJLRQZKLFKZHUHXVHGWR
GHVLJQGHJHQHUDWHSULPHUVWRDPSOLI\WKHHQWLUH$VLSDQG0&5FRGLQJUHJLRQ
62%MWSPEXMSRG(2%W]RXLIWMWGPSRMRKERHWIUYIRGMRK
7KH VNLQ ELRSVLHV ZHUH FKRSSHG LQWR VPDOO SLHFHV DQG WKHQ VXEMHFWHG WR 51$ H[WUDFWLRQ
XVLQJWKH51$HDV\EURXVWLVVXHPLQLNLW4LDJHQ6$&RXUWDERHXI)UDQFHDFFRUGLQJWR
WKH PDQXIDFWXUHUV LQVWUXFWLRQV F'1$ ZDV V\QWKHVLVHG ZLWK 5HYHUVH WUDQVFULSWDVH HQ]\PH
7$.$5$%,2,1&-DSDQIROORZHGE\573&5 5$&(H[SHULPHQWVZHUHFDUULHG
RXWDFFRUGLQJWRWKHPHWKRGUHSRUWHGLQ;LDQ]RQJDQG'RQDOGXVLQJ([SDQGORQJUDQJH
G173DFN5RFKH*HUPDQ\7KHQWKHGHVLUHGDPSOLFRQVZHUHJHOSXULHGXVLQJ1XFOHR6SLQ
([WUDFW ,, 0DFKHUH\1DJHO *HUPDQ\ FORQHG LQWR S*(07 YHFWRU 3URPHJD 86$ DQG
VHTXHQFHG%05JHQRPLFV3DGRYD,WDO\DQG6WDU6HT*HUPDQ\
$WSUHVHQWZHKDYHFKDUDFWHULVHGWKHZKROHFRGLQJUHJLRQ&'6RI$VLSDQG0&5F'1$
LQPXOWLFRORXUHG3HUXYLDQDOSDFDV7KHFRPSOHWH&'6RI$VLSFRPSULVHVESZKLFKLV
DQGLGHQWLFDOWRFRZVKHHSDQGKRUVHUHVSHFWLYHO\,WHQFRGHVDSXWDWLYHSURWHLQ
RIDPLQRDFLGDD7KHFRPSOHWH&'6RI0&5FRPSULVHVESZKLFKLVDQG
LGHQWLFDOWRFDPHOGROSKLQDQGSLJUHVSHFWLYHO\,WHQFRGHVDSXWDWLYHSURWHLQRIDD
+HUHZHGHVFULEHGIRUWKHUVWWLPHVHYHQVLQJOHSRLQWPXWDWLRQVLQWKH&'6RIDOSDFD$VLS
F'1$RIZKLFKWKUHHZHUHIRXQGWREHVLOHQWPXWDWLRQVDQGIRXUZHUHPLVVHQVHPXWDWLRQV
7DEOH0&5DQDO\VLVXQYHLOHGDWRWDORIWHQPXWDWLRQVLQWKH&'6DPRQJZKLFKRQHZDV
ESIUDPHVKLIWPXWDWLRQIRXUZHUHVLOHQWPXWDWLRQVDQGYHZHUHPLVVHQVHPXWDWLRQV7DEOH
:LWKLQWKHREVHUYHG0&5PXWDWLRQHLJKWRIWKHPZHUHDOUHDG\GHVFULEHGE\3RZHOOHWDO
DQG)HHO\DQG0XQ\DUGLQ$PHULFDQDQG$XVWUDOLDQDOSDFDSRSXODWLRQVZKHUHDV
WKHUHPDLQLQJWZRPXWDWLRQVUHSUHVHQWQRYHOSRO\PRUSKLVPVREVHUYHGIRUWKHUVWWLPHZLWKLQ
WKH 3HUXYLDQ SRSXODWLRQ7KH DQDO\VLV RI WKH $VLS 875 QW VKRZHG WKUHH PXWDWLRQV
$PRQJWKHVHRQHZDVDWUDQVYHUVLRQDQGWZRZHUHWUDQVLWLRQPXWDWLRQV7DEOHORFDWHGDW
DQGQWGRZQVWUHDPIURPWKHVWRSFRGRQUHVSHFWLYHO\6LPLODUO\WKUHHWUDQVLWLRQPXWDWLRQV
7DEOHZHUHDOVRLGHQWLHGLQWKH875QWRI0&5DQGZHUHORFDWHGDWDQG
QWGRZQVWUHDPIURPWKHVWRSFRGRQ)XUWKHUPRUHWZRGLIIHUHQW875VZHUHFKDUDFWHULVHG
IRU0&5DQGQW(DFKRQHRIWKHLGHQWLHGPLVVHQVHPXWDWLRQVPD\EHLQYROYHGLQ
FRDWFRORXUGHWHUPLQDWLRQ

&VIIHMRKERHKIRIXMGW
8EFPI724WPSGEXIHMR%WMTG(2%'(7ERH986
&EWITSWMXMSR
724W
%QMRSEGMHGLERKI
)JJIGXSRTVSXIMR

RSHS[RWXVIEQXSXLIWXSTGSHSR
RXHS[RWXVIEQXSXLIWXSTGSHSR
'+
%'
+%
'%
'%
8'
+%
'%
%+
8'
87

=7

'8
,6

4SPEV
27
27
4SPEV
27
7PMKLXP]TSPEVXSTSPEV
4SPEV

27!RSRWMKRMGERX
8EFPI724WPSGEXIHMR1'6G(2%'(7ERH986
&EWITSWMXMSR
724W
%QMRSEGMHGLERKI
)JJIGXSRTVSXIMR

E

E

%+
'8
'8
%'88
%+
8'
%+
+%
'8
+%
8'
'8
+%
8%
81

*VEQIWLMJX
1:

7+

6'

4SPEVXSRSRTSPEV
4SPEVXSRSRTSPEV
27
*VEQIWLMJX
2SRTSPEVXSTSPEV
27
4SPEVXSRSRTSPEV
27
4SPEVXSWPMKLXP]TSPEV
27

27!RSRWMKRMGERX
E2SZIP724SFWIVZIHMRXLI4IVYZMERTSTYPEXMSR
'SRGPYWMSR
7KHVHQGLQJVZLOOEHKHOSIXOLQXQGHUVWDQGLQJWKHUHJXODWRU\PHFKDQLVPRI$VLSDQG0&5
JHQHLQDOSDFDFRDWFRORXUYDULDWLRQ*HQRW\SLQJDVVD\VDQGVHPLTXDQWLWDWLYH573&5DQDO\VLV
RI$VLSDQG0&5WUDQVFULSWVWRHYDOXDWHWKHDVVRFLDWLRQEHWZHHQDOOHOHVDQGFRDWFRORXUDQG
H[SUHVVLRQGHSHQGHQWFRDWFRORXUYDULDWLRQDUHFXUUHQWO\LQSURJUHVV
%GORS[PIHKIQIRXW
:HZRXOGOLNHWRWKDQNWKH$OSDFD5HVHDUFK)RXQGDWLRQ$5)IRUWKHLUQDQFLDOVXSSRUWRI
WKLVUHVHDUFK

&VIIHMRKERHKIRIXMGW
6IJIVIRGIW
&HFFKL7$9DOERQHVL33DVVDPRQWL()UDQNDQG&5HQLHUL4XDQWLWDWLYHYDULDWLRQRIPHODQLQVLQOODPD/DPD
JODPD/6PDOO5XPLQDQW5HVHDUFK
RIEUHWUDLWVLQ6RXWK$PHULFDQGRPHVWLFFDPHOLGVOODPDVDQGDOSDFDV6PDOO5XPLQDQW5HVHDUFK
)HHO\1/DQG.$0XQ\DUG&KDUDFWHULVDWLRQRIWKHPHODQRFRUWLQUHFHSWRUJHQHLQDOSDFDDQGLGHQWLFDWLRQ
RISRVVLEOHPDUNHUVDVVRFLDWHGZLWKSKHQRW\SLFYDULDWLRQVLQFRORXU$QLPDO3URGXFWLRQ6FLHQFH
0RQWROLX/:62HWWLQJDQG'&%HQQHWW,Q(XURSHDQ6RFLHW\IRU3LJPHQW&HOO5HVHDUFK$YDLODEOHDWKWWS
ZZZHVSFURUJPLFHPXW
2OOPDQQ000//DPRUHX[%':LOVRQDQG*6%DUVK,QWHUDFWLRQRI$JRXWLSURWHLQZLWKWKHPHODQRFRUWLQ
UHFHSWRULQYLWURDQGLQYLYR*HQHV'HYHORSPHQW
3RZHOO$-0-0RVV/77UHH%/5RHGHU&/&DUOHWRQ(&DPSEHOODQG'/.RR\PDQ&KDUDFWHUL]DWLRQ
RIWKHHIIHFWRI0HODQRFRUWLQ5HFHSWRUDPHPEHURIWKHKDLUFRORUJHQHWLFORFXVLQDOSDFD/DPDSDFRVHHFH
FRORUGLIIHUHQWLDWLRQ6PDOO5XPLQDQW5HVHDUFK
;LDQ]RQJ6DQG/-'RQDOG$QHZ5$&(PHWKRGIRUH[WUHPHO\*&ULFKJHQHV$QDO\WLFDO%LRFKHPLVWU\

&VIIHMRKERHKIRIXMGW
+IRIXMGHMZIVWMX]MR1EPEFEVMKSEXW
.$%LQGX.&5DJKDYDQDQG6$QWRQ\
'HSDUWPHQWRI$QLPDO%UHHGLQJDQG*HQHWLFV&29$6.$80DQQXWK\7KULVVXU.HUDOD
,QGLDELQVLE#UHGLIIPDLOFRP
5HVLGHQW9HWHULQDULDQ,)&':$JDGLU0RURFFR
%FWXVEGX
7KUHHKXQGUHGJRDWVEHORQJLQJWR7DQXU7KDODVVHU\DQG%DGDJDUDUHJLRQVRIWKHVWDWHRI.HUDOD
LQ,QGLDZHUHVWXGLHGIRUELRFKHPLFDODQGPLFURVDWHOOLWHPDUNHUSRO\PRUSKLVPDQGELRPHWULFDO
WUDLWV $ WRWDO RI HLJKW SDUDPHWHUV YL] KDHPRJORELQ WUDQVIHUULQ FHUUXORSODVPLQ DP\ODVH
DOEXPLQ FDUERQLF DQK\GUDVH VHUXP SRWDVVLXP DQG EORRG JOXWDWKLRQH ZHUH LQYHVWLJDWHG LQ
ELRFKHPLFDOSRO\PRUSKLVPVWXGLHV2IWKHWHQPLFURVDWHOOLWHSULPHUVWHVWHG7*/$,15$
,15$,/676,/676,/676+8-(7+,1+$DQG%0
RQO\WKUHHSULPHUVZHUHFKRVHQIRUWKHVWXG\QDPHO\,15$,/676DQG+8-
ZKLFKH[KLELWHGUHODWLYHO\KLJKHUGHJUHHRISRO\PRUSKLVP7KHOLWWHUVL]HDQGERG\ZHLJKWRI
JRDWVZHUHUHFRUGHGDWELUWKDWRQHWKUHHVL[DQGWZHOYHPRQWKVRIDJHDQGWKHGDWDDQDO\VHG
7KHVWXG\UHYHDOHGWKDWWKRXJKDOOSRSXODWLRQVXQGHULQYHVWLJDWLRQKDGSUHGRPLQDQWSK\VLFDO
FKDUDFWHULVWLFVRIWKH0DODEDULEUHHGWKH7DQXUSRSXODWLRQVWRRGDSDUWDVUHJDUGVWKHELRPHWULFDO
WUDLWVOLNHOLWWHUVL]HDQGERG\ZHLJKWLQWKDWWKH\ZHUHVPDOOHULQVL]HDQGPRUHSUROLF7KH
KLJKJHQHWLFGLYHUVLW\RIWKH7DQXUSRSXODWLRQZDVUHLWHUDWHGE\PLFURVDWHOOLWHPDUNHUVWXGLHV
.H\ZRUGVELRFKHPLFDOSRO\PRUSKLVPPLFURVDWHOOLWHELRPHWULFDOWUDLWV
-RXVSHYGXMSR
7KHGRPHVWLFJRDWLVDOWHUQDWLYHO\DJRRGVRXUFHRIPLONPHDWEUHDQGVNLQ7KHSURPLVLQJ
SURVSHFWVRIJRDWUHDULQJDVUHJDUGVHPSOR\PHQWJHQHUDWLRQQDQFLDODXWRQRP\DQGLQFUHDVHG
OLYLQJVWDQGDUGVRIWKHUXUDOSRRUFDQGLUHFWO\WUDQVODWHLQWRSRYHUW\DOOHYLDWLRQ
7KH JHRJUDSKLFDOO\ HYROYHG JRDW EUHHGV GLVSOD\ JHQHWLF GLYHUJHQFH LQ WKHLU SURGXFWLRQ
UHSURGXFWLRQDGDSWDELOLW\KHDWWROHUDQFHDQGSRWHQWLDOIRUGLVHDVHUHVLVWDQFH/LPLWHGLQIRUPDWLRQ
RQWKHH[LVWLQJGLYHUVLW\LQLQGLJHQRXVJRDWEUHHGVKDVOHGWRWKHLUXQGHUXWLOLVDWLRQUHSODFHPHQW
DQGGLOXWLRQWKURXJKFURVVEUHHGLQJ7KLVQHFHVVLWDWHVHVWLPDWLRQDQGFRQVHUYDWLRQRIWKHJHQHWLF
YDULDWLRQZLWKLQEUHHGV
*RDWSURGXFWLRQLQ.HUDOD,QGLDLVFHQWUHGPDLQO\RQLWVQDWLYHEUHHG0DODEDULDGXDOSXUSRVH
JRDWIURP1RUWK.HUDOD7KHDQLPDOVKDYHSUHGRPLQDQWEUHHGFKDUDFWHULVWLFVRIZKLWHDQGD
FRPELQDWLRQRIZKLWHZLWKEODFNDQGEURZQ7KH\DUHPRVWO\ORQJHDUHGDQGKRUQHGZLWKD
FRQYH[IRUHKHDGDQGKDYHURXQGHGXGGHUVZLWKIXQQHOVKDSHGSRLQWHGWHDWV7KHUHDUHVLJQLFDQW
GLIIHUHQFHVEHWZHHQSRSXODWLRQVRIWKLVEUHHGZLWKUHJDUGWRWUDLWVRIHFRQRPLFLPSRUWDQFHVR
WKHGDWDREWDLQHGIURPDQ\SDUWLFXODUSRSXODWLRQFDQQRWEHH[WUDSRODWHGWRWKHEUHHGDVDZKROH
7KLVJHQHWLFGLYHUVLW\WKHUHIRUHKDVWREHVWXGLHGLQGHWDLOLQGLIIHUHQWSRSXODWLRQV
$ SRVVLEOH ZD\ WR VWXG\ WKLV JHQHWLF GLYHUVLW\ LV E\ GHWHUPLQLQJ JHQHWLF YDULDELOLW\ WKURXJK
SRO\PRUSKLFVWXGLHV3RO\PRUSKLVPLQGLFDWHVJHQHWLFYDULDELOLW\ZLWKRXWZKLFKWKHUHZRXOG
EH QR SURJUHVV PDGH WKURXJK VHOHFWLRQ DQG EUHHGLQJ 7KLV DFFHQWXDWHV WKH QHHG WR VWXG\
SRO\PRUSKLVPEHWZHHQEUHHGVDVZHOODVZLWKLQEUHHGV7KLVVWXG\LVIRFXVHGRQH[DPLQLQJWKH
YDULDWLRQVLQ0DODEDULJRDWVXVLQJELRPHWULFDOELRFKHPLFDODQGPROHFXODUPHDQV

&VIIHMRKERHKIRIXMGW
1EXIVMEPWERHQIXLSHW
7KUHHKXQGUHGJRDWVRIGLIIHUHQWORFDOLWLHVQDPHO\7DQXU7KDODVVHU\DQG%DGDJDUDRI.HUDOD
VWDWH LQ ,QGLD ZHUH VWXGLHG IRU ELRFKHPLFDO DQG PLFURVDWHOOLWH PDUNHU SRO\PRUSKLVP DQG
ELRPHWULFDOWUDLWV
8QGHU ELRFKHPLFDO SRO\PRUSKLVP D WRWDO RI HLJKW SDUDPHWHUV YL] KDHPRJORELQ WUDQVIHUULQ
FHUUXORSODVPLQDP\ODVHDOEXPLQFDUERQLFDQK\GUDVHVHUXPSRWDVVLXPDQGEORRGJOXWDWKLRQH
ZHUHVWXGLHG
+DHPRJORELQZDVHVWLPDWHGE\QRQGHQDWXULQJSRO\DFU\ODPLGHJHOHOHFWURSKRUHVLV3$*(7KH
ZKROHEORRGZDVFHQWULIXJHGFHOOSHOOHWVFROOHFWHGDQGZDVKHGZLWKQRUPDOVDOLQH*HOVODEV
ZHUHPDGHXVLQJHLJKWSHUFHQWDFU\ODPLGHJHOPL[7ULVERUDWH('7$EXIIHUZDVXVHGLQWKHWRS
DQGERWWRPUHVHUYRLUV7KHFHOOSHOOHWZDVGLOXWHGZLWKGLVWLOOHGZDWHU)LIWHHQPLFUROLWUHV
RIWKHGLOXWHGFHOOSHOOHWZDVORDGHGLQWKHZHOOVDQGHOHFWURSKRUHVHGDW9IRUWKUHHKRXUV
7KHJHOZDVVWDLQHGZLWK&RRPDVVLH%ULOOLDQW%OXH
6RGLXP'RGHF\O6XOSKDWH6'63$*(ZDVXVHGIRUYLVXDOLVLQJDOEXPLQDQGWUDQVIHUULQEDQGV
(LJKWSHUFHQWUHVROYLQJJHODQGYHSHUFHQWVWDFNLQJJHOZHUHXVHG7ULVJO\FLQHHOHFWURSKRUHVLV
EXIIHUZDVXVHGLQWKHWRSDQGERWWRPUHVHUYRLUV)LIWHHQPLFUROLWUHVHDFKRIWKHVHUXPVDPSOHV
ZHUHORDGHGLQWKHZHOOVDQGHOHFWURSKRUHVHGDW9ROWVIRUIRXUKRXUV7KHJHOZDVVWDLQHGZLWK
&RRPDVVLH%ULOOLDQW%OXH
1DWLYH3$*(ZDVHPSOR\HGIRUW\SLQJFHUUXORSODVPLQDP\ODVHDQGFDUERQLFDQK\GUDVH
6HUXP SRWDVVLXP ZDV HVWLPDWHG E\ DPH SKRWRPHWU\ 2VHU 0DODEDUL JRDWV ZLWK D
SRWDVVLXPFRQFHQWUDWLRQDERYHPHTOLWUHZHUHFODVVLHGDVKLJKSRWDVVLXPW\SHDQGWKRVH
IDOOLQJEHORZPHTOLWUHZHUHFDWHJRULVHGDVORZSRWDVVLXPW\SHVLQFHQRELPRGDOLW\FRXOGEH
REVHUYHGLQWKHIUHTXHQF\GLVWULEXWLRQFXUYH
*OXWDWKLRQH*6+OHYHOLQWKHZKROHEORRGZDVHVWLPDWHGE\WKHPHWKRGRI%HXWOHUHWDO
XVLQJDVSHFWURSKRWRPHWHUDWDZDYHOHQJWKRIQP*RDWVZLWK*6+YDOXHVEHORZPJ
PO5%&ZHUHFODVVLHGDV*6+ORZW\SHDQGWKRVHZLWKYDOXHVRIPJPO5%&DQGDERYH
DV*6+KLJKW\SH
0LFURVDWHOOLWHPDUNHUVWXG\ZDVFRQGXFWHGZLWKWKH'1$H[WUDFWHGIURPYHPLOOLOLWUHVRIEORRG
XVLQJVWDQGDUGSKHQROFKORURIRUPH[WUDFWLRQSURFHGXUH7HQPLFURVDWHOOLWHSULPHUV7*/$
,15$,15$,/676,/676,/676+8-(7+,1+$DQG%0
ZHUHFXVWRPV\QWKHVLVHGDQGWHVWHGLQWKHSUHVHQWVWXG\2IWKHVHWKUHHSULPHUV,15$
,/676DQG+8-ZKLFKH[KLELWHGDFRPSDUDWLYHO\KLJKHUGHJUHHRISRO\PRUSKLVP
ZHUHFKRVHQIRUWKHVWXG\
)RUYLVXDOLVLQJWKH3&5SURGXFWVE\DXWRUDGLRJUDSK\RQHRIWKHSULPHUVZDVUDGLRODEHOOHG7KH
IRUZDUGSULPHUIRUHDFKPDUNHUZDVUDGLRODEHOOHGDWWKHHQGZLWK3$737KHUHDFWLRQ
ZDVFDUULHGRXWZLWKWKH'1$(QGODEHOLQJ.LW7KHUDGLRDFWLYHO\ODEHOHG3&5SURGXFWVZHUH
VXEMHFWHGWRHOHFWURSKRUHVLVRQVL[SHUFHQWGHQDWXULQJSRO\DFU\ODPLGHJHOVIRUEHWWHUUHVROXWLRQ
'HQDWXULQJ3$*(ZDVSHUIRUPHGRQWKH9HUWLFDO6HTXHQFHU8VKD
7KH3&5SURGXFWVZHUHPL[HGZLWKOIRUPDPLGHORDGLQJEXIIHUGHQDWXUHGDW&IRU
PLQDQGFRROHGLPPHGLDWHO\LQLFH$ERXWORIWKLVPL[WXUHZDVORDGHGLQWRHDFKZHOO
'HWHUPLQDWLRQRIWKHH[DFWVL]HRIDOOHOHVQHFHVVLWDWHGFRPSDULVRQZLWKDVHTXHQFLQJODGGHU

&VIIHMRKERHKIRIXMGW
IURP0SKDJH6HTXHQFHGSURGXFWVRI0'1$ZKLFKZHUHDOVRGHQDWXUHGDW&IRUYH
PLQXWHVZHUHVLPXOWDQHRXVO\ORDGHGLQWRWKHPLGGOHRUVLGHZHOOV7KHJHOVZHUHHOHFWURSKRUHVHG
DW:IRUWKUHHKRXUVDWDFRQVWDQWWHPSHUDWXUHRIDURXQG&7KHJHOVZHUHGULHGLQDJHO
GULHUDW&IRURQHDQGDKDOIKRXUV$IWHUGU\LQJWKHJHOZDVVHWIRUDXWRUDGLRJUDSK\ZLWK
;UD\OPLQDFDVVHWWHWWHGZLWKDQLQWHQVLI\LQJVFUHHQ7KH;UD\OPZDVGHYHORSHGDIWHU
WRKRXUVGHSHQGLQJRQWKHLQWHQVLW\RIWKHUDGLRDFWLYHVLJQDO7KHJHQRW\SHVRIDQLPDOV
ZHUHGHWHUPLQHGIRUHDFKPLFURVDWHOOLWHORFLE\FRPSDULQJWKHVL]HVRIDOOHOHVZLWKDQ0
VHTXHQFLQJODGGHU
7KHJHQHWLFGLVWDQFHEHWZHHQWKHWKUHHSRSXODWLRQVEDVHGRQDOOHOLFIUHTXHQFLHVRISRO\PRUSKLF
ORFL RI ELRFKHPLFDO DQG PLFURVDWHOOLWH PDUNHUV ZDV FRPSXWHG VHSDUDWHO\ XVLQJ WKH VRIWZDUH
323*(1(
%LRPHWULFDOWUDLWVWKHOLWWHUVL]HDQGERG\ZHLJKWRIJRDWVZHUHUHFRUGHGDWELUWKDQGDWRQH
WKUHHVL[DQGWZHOYHPRQWKVRIDJHDQGWKHGDWDZDVDQDO\VHG
,EIQSKPSFMR
$OOWKHDQLPDOVEHORQJLQJWR7DQXUDQG%DGDJDUDZHUHRI+E$$W\SH%XWWKHJRDWSRSXODWLRQ
RI7KDODVVHU\SRVVHVVHG+E$%DQG+E%% SKHQRW\SHVLQDGGLWLRQWR+E$$2XWRIDQLPDOV
W\SHGVL[DQLPDOVZHUHRI+E$%DQGRQO\RQHZDVRI+E%%SKHQRW\SH7KHJHQHIUHTXHQF\RI
+E$DQG+E %ZDVDQGIRU7DQXUDQG%DGDJDUDSRSXODWLRQVZKLOHWKHUHVSHFWLYHJXUHV
ZHUHDQGIRU7KDODVVHU\SRSXODWLRQ7KHIUHTXHQFLHVRI+E$DQG+E%YDULDQWVLQ
WKHSRROHGSRSXODWLRQZHUHDQGUHVSHFWLYHO\LQGLFDWLQJDSUHGRPLQDQFHRI+E$LQ
WKHSRSXODWLRQ6LPLODUQGLQJVKDYHEHHQUHSRUWHGE\%KDWLQ-DPXQDSDULJRDWV
,QH[RWLFEUHHGVDFOHDUSUHGRPLQDQFHRI+E$YDULDQWRYHU+E%KDVEHHQHVWDEOLVKHGE\)HVXV
HWDOLQ+XQJDULDQQDWLYHJRDWVE\%DUEDQFKRHWDOLQ6SDQLVKJRDWEUHHGVDQG
E\&DQDWDQDQG%R]WHSHDQG(OPDFLLQ7XUNLVKJRDWV
7KHDEVHQFHRUQHJOLJLEOHSUHVHQFHRI+E%DOOHOHLQJRDWVLQGLJHQRXVDVZHOODVH[RWLFPD\EH
LQGLFDWLYHRIHLWKHUDGDSWLYHSUHIHUHQFHRI+E$DOOHOHWR+E%DOOHOHRUVSHFLHVFKDUDFWHULVWLF
8VERWJIVVMR
,Q WKH JRDW SRSXODWLRQV RI 7DQXU 7KDODVVHU\ %DGDJDUD DQG SRROHG SRSXODWLRQ WKH JHQH
IUHTXHQFLHVRI7I$REVHUYHGZHUHDQGUHVSHFWLYHO\LQGLFDWLQJWKH
SUHGRPLQDQFHRI7I$DOOHOHLQWKHSRSXODWLRQ,Q7KDODVVHU\DOOWKHDQLPDOVW\SHGZHUHRI7I$$
W\SHZKLOH7DQXUDQG%DGDJDUDDQLPDOVKDG7I$$DQG7I$%7KHJHQHIUHTXHQFLHVRI7I% LQ
7DQXUDQG%DGDJDUDJRDWSRSXODWLRQVZHUHDQGUHVSHFWLYHO\
7KHDERYHQGLQJLVLQDJUHHPHQWZLWKWKHREVHUYDWLRQVRI)HVXVHWDOZKRUHSRUWHGWKDW
WKHPDMRULW\RIWKHJRDWEUHHGVLQWKHZRUOGKDYHDJHQHIUHTXHQF\RI7I$ JUHDWHUWKDQWKDWRI
7I%0DQ\RWKHUZRUNHUVZKRDOVRJDYHWKHJHQHIUHTXHQFLHVRI7I$KDGUHSRUWHGDORQJVLPLODU
OLQHVZKLOHZRUNLQJRQYDULRXVEUHHGVRIJRDWVLQ,QGLDYL]%DUXDKDQG%KDWLQ%ODFN
%HQJDOJRDWVDQG%KDWLQ&KHJXDQG&KDQJWKDQJLJRDWV
6LPLODUUHVXOWVLQH[RWLFEUHHGVZHUHJLYHQE\0HQUDGHWDOLQ%RHUDQGLPSURYHG)DZQ
JRDWVDQG&DQDWDQDQG%R]WHSHDQG(OPDFLLQKDLUJRDWVRI7XUNH\

&VIIHMRKERHKIRIXMGW
%PFYQMRGIVVYPSTPEWQMREQ]PEWIERHGEVFSRMGERL]HVEWI
1RSRO\PRUSKLVPZDVREVHUYHGIRUDOEXPLQFHUUXORSODVPLQDP\ODVHDQGFDUERQLFDQK\GUDVH
7ZR EDQGV HDFK ZHUH REVHUYHG IRU DOEXPLQ LQ DOO WKH DQLPDOV VWXGLHG D IDVWPRYLQJ EDQG
GHVLJQDWHGDV$O)DQGDVORZPRYLQJEDQG$O6UHYHDOLQJDEVHQFHRISRO\PRUSKLVPDWDOEXPLQ
ORFXV
7ZRDOEXPLQYDULDQWVLQJRDWVKDGDOUHDG\EHHQUHSRUWHGE\%DUEDQFKRHWDODQG7XQRQ
HWDOLQ6SDQLVKJRDWEUHHGVDQGE\9DQNDQDQG%HOOLQ&DVKPHUHJRDWVEXWZLWK
KLJKHUGHJUHHRISRO\PRUSKLVPDWWKHORFXV,Q,QGLDQEUHHGVVLPLODUQGLQJVZHUHUHSRUWHGE\
)HVXVHWDOLQ%HHWDO%DUEDULWKHLUFURVVHVDQGQRQGHVFULSWQDWLYHVE\%KDWLQ
-DPXQDSDULDQG6LURKLEUHHGVDQGE\%KDWLQ&KDQJWKDQJLDQG&KHJXEUHHGV
7KHQGLQJVRIWKHSUHVHQWZRUNVXJJHVWVWKDWFHUUXORSODVPLQORFXVLVPRQRPRUSKLFLQGLFDWLQJ
DEVHQFH RI SRO\PRUSKLVP DV KDV EHHQ UHSRUWHG LQ RWKHU ,QGLDQ EUHHGV OLNH %HHWDO %DUEDUL
-DPXQDSDUL6LURKL&KDQJWKDQJLDQG&KHJXEUHHGV
,QFRQWUDVWWRWKHDERYHQGLQJVSRO\PRUSKLVPDWFHUUXORSODVPLQORFXVZDVUHSRUWHGE\(OPDFL
LQKDLUJRDWVRI7XUNH\%XWWKHIUHTXHQF\RIWKHYDULDQWDOOHOHZDVYHU\ORZ
,Q7DQXU7KDODVVHU\DQG%DGDJDUDJRDWVDVLQJOHEDQGFRXOGEHREVHUYHGIRUDP\ODVHORFXV
LQGLFDWLQJWKHDEVHQFHRISRO\PRUSKLVP7KLVQGLQJLVLQDJUHHPHQWZLWKWKHUHSRUWVLQ,QGLDQ
JRDWEUHHGVE\%KDWLQ&KDQJWKDQJLDQG&KHJXJRDWV
7KHSUHVHQWZRUNLVDOVRLQDJUHHPHQWZLWKWKHVWXGLHVFRQGXFWHGLQH[RWLFEUHHGVE\0RUHUDHW
DOLQ6SDQLVK0HULQRVKHHSE\6KDPVXGGLQHWDOLQ6DDQHQDQG$OSLQHKDOIEUHHGV
ZLWK0DODEDULE\7XQRQHWDOLQ6SDQLVKJRDWVDQGE\0HQUDGHWDOLQ*HUPDQ
LPSURYHG)DZQDQG%RHUJRDWV
,QFRQWUDVWWRWKHDERYHQGLQJVSRO\PRUSKLVPIRUDP\ODVHORFXVZDVREVHUYHGLQ7XUNLVKKDLU
JRDWV(OPDFL7ZRYDULDQWVIRUDP\ODVHORFXVZHUHREVHUYHGEXWWKHIUHTXHQF\RIWKH
YDULDQWDOOHOHZDVYHU\ORZ
7IVYQTSXEWWMYQ
,QWKHSUHVHQWVWXG\WKHSRWDVVLXPFRQFHQWUDWLRQUDQJHGEHWZHHQDQGPHTODOOLQGLFDWLYH
RIORZSRWDVVLXPW\SHV0D[LPXPFRQFHQWUDWLRQRIVHUXPSRWDVVLXPZDVGHWHFWHGLQ%DGDJDUD
SRSXODWLRQZKLOH7DQXUDQLPDOVSRVVHVVHGWKHORZHVW7KHFRQFHQWUDWLRQVRIVHUXPSRWDVVLXPLQ
7DQXU7KDODVVHU\DQG%DGDJDUDZHUHDQGPHTOUHVSHFWLYHO\
/HDVWVTXDUHDQDO\VLVRIYDULDQFHRISRWDVVLXPFRQFHQWUDWLRQLQGLIIHUHQWSRSXODWLRQVVKRZHG
WKDWWKHUHLVDVLJQLFDQWGLIIHUHQFHEHWZHHQJRDWSRSXODWLRQV7KHORZSRWDVVLXPW\SHVPLJKW
KDYHJRW[HGLQWKHSRSXODWLRQDQGPD\EHGXHWRVRPHOLQNDJHWRVRPHWUDLWVRIHFRQRPLF
LPSRUWDQFHRUVRPHDGDSWLYHLPSRUWDQFH
$EVHQFH RI SRO\PRUSKLVP KDV DOVR EHHQ UHSRUWHG E\ %KDW HW DO LQ -DPXQDSDUL DQG
%DUEDULKHUGVZKRRSLQHGWKDWXQOLNHLQVKHHSQRWDOOJRDWEUHHGVPD\H[KLELWSRO\PRUSKLVPDW
SRWDVVLXPORFXV6RDOVR%KDWUHSRUWHGWKDWLQWKH-DPXQDSDULEUHHGRQO\+.W\SHFRXOG
EHGHWHFWHGZKLFKJRW[HGGXULQJWKHFRXUVHRIHYROXWLRQRIWKLVEUHHG)XUWKHUPRUHVWXGLHV
LQ3DVKPLQDJRDWVE\%KDWDQG6LQJKDJUHHGZLWKWKHDERYHQGLQJZKHUHRQO\LQ+.
W\SHWKHUHZDVDQDEVHQFHRISRO\PRUSKLVPDWSRWDVVLXPORFXVZLWKDPHDQVHUXPSRWDVVLXP
FRQFHQWUDWLRQRIPHTO

&VIIHMRKERHKIRIXMGW
+PYXEXLMSRI+7,
7KHSUHVHQWVWXG\SRLQWHGWRDSUHGRPLQDQFHRIWKHORZ*6+W\SHRQWKHZKROH7KHORZ*6+
W\SH DQLPDOV H[LVWHG LQ DOPRVW HTXDO SURSRUWLRQV WR WKH KLJK *6+ W\SH LQ %DGDJDUD
ZKLOHLQ7DQXUWKHORZ*6+W\SHDQLPDOVZHUHLQOHVVHUSURSRUWLRQV7KH7KDODVVHU\
SRSXODWLRQKRZHYHUKDGDPDUNHGSUHGRPLQDQFHRIWKHORZ*6+W\SHHVWDEOLVKLQJD
SUHGRPLQDQFHRIORZ*6+W\SHLQWKHSRROHGSRSXODWLRQLQWKHQDODQDO\VLV7KH
JHQHIUHTXHQFLHVRI*6++ ZHUHDQGLQ7DQXU7KDODVVHU\DQG%DGDJDUDJRDW
SRSXODWLRQVUHVSHFWLYHO\ZKHUHDVWKHUHVSHFWLYHJHQHIUHTXHQFLHVRI*6+KZHUH
DQG/HDVWVTXDUHDQDO\VLVRIYDULDQFHRI*6+YDOXHVVKRZHGWKDWWKHUHZDVDVLJQLFDQW
GLIIHUHQFHEHWZHHQWKHGLIIHUHQWVXESRSXODWLRQV0RUHHWDOUHSRUWHGWKDW-DPXQDSDUL
DQLPDOVKDGUHODWLYHO\PRUHQXPEHUVRIORZ*6+DQLPDOV
,Q JRDWV RI %DGDJDUD D SODFH RI JHRJUDSKLFDO SUR[LPLW\ WR 7KDODVVHU\ PRUH RU OHVV HTXDO
SURSRUWLRQVRI*6+KLJKWR*6+ORZW\SHVZHUHGHWHFWHGZLWKWKH*6+KLJK
W\SHJDLQLQJRQO\DVOLJKWHGJH7KHUHDVRQIRUWKLVPD\EHDWWULEXWHGWRWKHUHODWLYHO\FORVH
FRQQHPHQWRIWKHVHWZRSRSXODWLRQV0RUHRYHUDSURFHVVRIQDWXUDOVHOHFWLRQRQWKHJURXQGV
RIHFRQRPLFWUDLWVSRVVLEO\KDYLQJVRPHOLQNDJHWRWKHJHQHIRUORZJOXWDWKLRQHW\SHPLJKW
EHJRLQJRQLQWKLVEUHHGLQJWUDFWUHVXOWLQJLQDSUHGRPLQDQFHRIORZJOXWDWKLRQHW\SHLQWKH
SRSXODWLRQVDVDZKROH)XUWKHUPRUHLWVKRXOGEHQRWHGLQWKLVFRQWH[WWKDW0DOEDULJRDWVDOVR
KDYH-DPXQDSDULEORRGLQZKLFKWKH*6+ORZW\SHVSUHGRPLQDWHVDVHVWDEOLVKHGDOUHDG\7XQRQ
HWDOKDGKRZHYHUUHSRUWHGWKHDEVHQFHRISRO\PRUSKLVPZLWKUHJDUGWR*6+ORFLLQ
6SDQLVKJRDWV
+IRIXMGHMWXERGI
,Q WKH SUHVHQW VWXG\ JHQHWLF GLVWDQFHV EHWZHHQ GLIIHUHQW SRSXODWLRQV ZHUH FRPSXWHG XVLQJ
1HLVPHWKRGEDVHGRQSRO\PRUSKLFORFLYL]KDHPRJORELQWUDQVIHUULQDQGJOXWDWKLRQH
*HQHWLFGLVWDQFHEHWZHHQ7DQXUDQG7KDODVVHU\ZDVDQGEHWZHHQ7DQXUDQG%DGDJDUD
ZKHUHDVEHWZHHQ%DGDJDUDDQG7KDODVVHU\LWZDV,QWKLVVWXG\WKHPD[LPXP
JHQHWLFGLVWDQFHIRXQGEHWZHHQ7DQXUDQG7KDODVVHU\SRSXODWLRQZDVLQDJUHHPHQWZLWKWKH
JHRJUDSKLFDOGLVWDQFHEHWZHHQWKHSRSXODWLRQV
7KHGDWDREWDLQHGIURPVWXGLHVRIEORRGJHQHWLFV\VWHPVVKRXOGEHFRPELQHGZLWKRWKHUGDWDIRU
PRUHDFFXUDWHLQWHUSUHWDWLRQVDVUHJDUGVSK\ORJHQHWLFUHODWLRQVKLSV
3HSLQDQG1JX\HQFDOFXODWHGJHQHWLFGLVWDQFHVEDVHGRQWKHYDULDWLRQLQDOOHOLFIUHTXHQFLHV
EHWZHHQ EUHHGV DQG FRQFOXGHG WKDW WKH UHVXOWV ZHUH LQ FORVH DJUHHPHQW ZLWK KLVWRULFDO DQG
JHRJUDSKLFDOGDWDRIWKHEUHHGVH[DPLQHG1JX\HQHWDORSLQHGWKDWWKHREVHUYHGJHQHWLF
GLIIHUHQFHVEHWZHHQ5DPERXLOOHWDQG6SDQLVK0HULQRFRXOGEHDWWULEXWHGWRWKHHYROXWLRQDU\
FKDQJHGXHWRUDQGRPGULIWLQWKHVPDOODQGFORVHGRFNRI5DPERXLOOHW
7XQRQHWDOFDOFXODWHGWKHJHQHWLFGLVWDQFHVEHWZHHQ6SDQLVKJRDWEUHHGVLQDVLPLODU
ZD\XVLQJ1HLVGLVWDQFHDQGRSLQHGWKDWWKHGLVWDQFHYDOXHVUDQJHGIURPWR
1HLHPSKDVLVHGWKDWWKHGHQGURJUDPRQO\UHSUHVHQWVWKHJHQHWLFUHODWLRQVKLSEHWZHHQ
EUHHGVEXWPD\RUPD\QRWVKRZWKHWUXHHYROXWLRQDU\KLVWRU\RISRSXODWLRQVHVSHFLDOO\ZKHQ
WKH\DUHQRWFRPSOHWHO\LVRODWHG
3URWHLQSRO\PRUSKLFPDUNHUVEHLQJEDVHGRQDOLPLWHGQXPEHURIH[SUHVVHGJHQHVWKHJHQHWLF
GLVWDQFHFDOFXODWHGE\WKLVPHWKRGIDLOVWRJLYHDFRQFOXVLYHSLFWXUH7KHRQO\SRVVLEOHFRQFOXVLRQ

&VIIHMRKERHKIRIXMGW
WKDWFRXOGEHDUULYHGDWIURPWKHDERYHVWXGLHVLVWKHH[LVWHQFHRIDUHODWLRQVKLSEHWZHHQWKHVH
SRSXODWLRQV,WIXUWKHUVXJJHVWVWKDWWKH7DQXUSRSXODWLRQLVGLVWLQFWO\GLIIHUHQWIURPWKHRWKHU
WZRSRSXODWLRQV+HQFHDQDWWHPSWZDVPDGHWRVWXG\WKHGLIIHUHQWSRSXODWLRQVDWWKHPROHFXODU
OHYHOXVLQJPLFURVDWHOOLWHPDUNHUV
7KHWZRFOHDUDGYDQWDJHVRIPLFURVDWHOOLWHVRYHURWKHU'1$PDUNHUVLVWKDWWKH\KDYHPXOWLSOH
DOOHOHVDVZHOODVKLJKKHWHUR]\JRVLW\IUHTXHQFLHVZKLFKPDNHWKHPKLJKO\LQIRUPDWLYHIRU
JHQHWLFDQDO\VLV*LOOHWDO7KHYDOXHVRIJHQHWLFGLVWDQFHREWDLQHGIURPPLFURVDWHOOLWH
GDWDPLJKWEHPRUHSUHFLVHZKHQFRPSDUHGWRWKDWREWDLQHGIURPSURWHLQPDUNHUV$UUDQ]HW
DO
1MGVSWEXIPPMXIQEVOIVW
0LFURVDWHOOLWHV KDYH SURYHG WR EH XVHIXO SRO\PRUSKLF PDUNHUV IRU WKH DQDO\VLV RI JHQHWLF
UHODWLRQVKLSV7KHXVHIXOQHVVRIPLFURVDWHOOLWHPDUNHUVIRUWKHHVWLPDWLRQRIJHQHWLFGLVWDQFHV
DPRQJFORVHO\UHODWHGSRSXODWLRQVKDVEHHQGRFXPHQWHGLQQXPHURXVVWXGLHV&LDPSROLQLHWDO
DQG$UUDQ]HWDO
7HQPLFURVDWHOOLWHSULPHUV7*/$,15$,15$,/676,/676,/676
+8-(7+,1+$DQG%0ZHUHWHVWHGLQWKHSUHVHQWVWXG\2XWRIWKHWHQ
PLFURVDWHOOLWHPDUNHUVWHVWHGVHYHQZHUHPRQRPRUSKLFLQJRDWV7KUHHSULPHUV,15$,/676
DQG+8-ZHUHIRXQGWREHSRO\PRUSKLF)LJXUHVDQG$WRWDORIJHQRW\SHV
ZHUHREVHUYHGIRU,15$LQ7DQXUDQGHDFKLQ7KDODVVHU\DQG%DGDJDUDSRSXODWLRQV
UHVSHFWLYHO\7KHPD[LPXPQXPEHURIDOOHOHVZDVREVHUYHGLQ7DQXUSRSXODWLRQZKLOH
WKHPLQLPXPLQ7KDODVVHU\%DGDJDUDUHFRUGHGHLJKWDOOHOHV6L[DOOHOHV
*MKYVI%YXSVEHMSKVETLWLS[MRKTSP]QSVTLMWQEX-26%PSGYW
*MKYVI%YXSVEHMSKVETLWLS[MRK4SP]QSVTLMWQEX,9.PSGYW

&VIIHMRKERHKIRIXMGW
*MKYVI%YXSVEHMSKVETLWLS[MRKTSP]QSVTLMWQEX-0787
DQGZHUHVSHFLFWR7DQXUSRSXODWLRQZKLOHWKUHHDOOHOHV
HDFKZHUHVSHFLFWRWKHRWKHUWZRSRSXODWLRQVDQGLQ7KDODVVHU\
DQGDQGLQ%DGDJDUD7KHPD[LPXPYDOXHVIRUKHWHUR]\JRVLW\
DQG3,&ZHUHREVHUYHGLQ7DQXUZKLOHWKHORZHVWZHUHUHFRUGHGLQ7KDODVVHU\
DQGUHVSHFWLYHO\,Q%DGDJDUDYDOXHVIRUKHWHUR]\JRVLW\DQG3RO\PRUSKLF,QIRUPDWLRQ
&RQWHQW3,&ZHUHDQGUHVSHFWLYHO\&KHQ\DPEXJDHWDOUHSRUWHGWHQDOOHOHV
ZLWKDVL]HUDQJHRIWRESLQJRDWVRI6XEVDKDUDQ$VLD
7KHPD[LPXPQXPEHURIDOOHOHVDQGJHQRW\SHVIRU+8-ZDVIRXQGLQWKH7DQXUSRSXODWLRQ
7KHQXPEHURIDOOHOHVREVHUYHGLQ7DQXU7KDODVVHU\DQG%DGDJDUDSRSXODWLRQVZHUHDQG
UHVSHFWLYHO\7ZHQW\VHYHQJHQRW\SHVZHUHUHFRUGHGLQJRDWSRSXODWLRQVRI7DQXUZKLOH
HDFKZHUHUHFRUGHGLQ7KDODVVHU\DQG%DGDJDUDSRSXODWLRQV%RWKYDOXHVIRUKHWHUR]\JRVLW\
DQG 3,& LQ7DQXU DQG %DGDJDUD ZHUH UHFRUGHG DV DQG ZKLOH DW7KDODVVHU\ WKH
KHWHUR]\JRVLW\DQG3,&YDOXHVVWRRGDWDQGUHVSHFWLYHO\
7KHPD[LPXPQXPEHURIDOOHOHVDW,/676ORFXVZDVREVHUYHGLQ7DQXUZKHUHDVWKH
PLQLPXPZDVUHFRUGHGLQ7KDODVVHU\ZKLOH%DGDJDUDUHFRUGHGQLQH7KHKLJKHVWYDOXHVIRU
KHWHUR]\JRVLW\DQG3,&ZHUHGHWHFWHGLQWKH7DQXUSRSXODWLRQZKLOHWKHORZHVW
DQGZHUHUHFRUGHGLQ7KDODVVHU\7KHKHWHUR]\JRVLW\DQG3,&YDOXHVZHUH
DQGUHVSHFWLYHO\LQ%DGDJDUD$OOHOHVL]HUDQJHDWWKLVORFXVLQ0DUZDULJRDWEUHHGZDV
UHSRUWHGWREHWRES.XPDUHWDO
7KHKLJKHVWPHDQQXPEHURIDOOHOHVSHUORFXVDVZHOODVKLJKDOOHOLFVL]HUDQJHZDVQRWLFHGLQWKH
7DQXUJRDWSRSXODWLRQ+HQFH7DQXUJRDWSRSXODWLRQFDQEHFRQVLGHUHGWREHPRUHJHQHWLFDOO\
GLYHUVHWKDQWKHRWKHUJURXSVEDVHGRQWKHQXPEHURIDOOHOHVDQGVL]HUDQJH
*HQHWLFGLVWDQFHFRPSXWDWLRQEDVHGRQWKHDOOHOLFIUHTXHQFLHVRIPLFURVDWHOOLWHPDUNHUVUHYHDOHG
WKDW7DQXUDQG%DGDJDUDSRSXODWLRQVZHUHWKHPRVWVHSDUDWHGZKLOHDFORVHUHODWLRQVKLSZDV
VXJJHVWHG EHWZHHQ WKH7KDODVVHU\ DQG %DGDJDUD SRSXODWLRQV7KH JHQHWLF GLVWDQFH EHWZHHQ
7KDODVVHU\DQG%DGDJDUDZDVIRXQGWREHEHWZHHQ7KDODVVHU\DQG7DQXUDQG
EHWZHHQ%DGDJDUDDQG7DQXU
*HQHWLFGLVWDQFHVFDOFXODWHG1HLVIRUPXODIURPPLFURVDWHOOLWHPDUNHUVDUHIROG
JUHDWHUWKDQIURPSURWHLQPDUNHUV7KHODWWHUJDYHYDOXHVUDQJLQJIURPWRZKHUHDV
GLVWDQFHVEDVHGRQPLFURVDWHOOLWHGDWDYDULHGIURPWR
$UUDQ]HWDOREVHUYHGWKDWJHQHWLFGLVWDQFHFDOFXODWHGXVLQJWKHPLFURVDWHOOLWHPDUNHU
V\VWHPLVXVXDOO\KLJKHUZKHQFRPSDUHGWRWKHRWKHUPDUNHUV\VWHPVEHFDXVHRIJUHDWHUYDULDWLRQ
DWWKHVHORFL7KHSUHVHQWQGLQJVDOVRVXSSRUWWKHREVHUYDWLRQVRI$UUDQ]HWDO

&VIIHMRKERHKIRIXMGW
7KH GHQGURJUDP RI UHODWLRQVKLS EHWZHHQ WKH WKUHH GLIIHUHQW JRDW SRSXODWLRQV VKRZHG RQH
FOXVWHUJURXSLQJ7KDODVVHU\DQG%DGDJDUDSRSXODWLRQV)LJXUH)URPWKHJHQHWLFGLVWDQFH
YDOXHVFDOFXODWHGLWLVHYLGHQWWKDWJHQHWLFGLVWDQFHEHWZHHQ7DQXUDQG7KDODVVHU\DQG7DQXU
DQG%DGDJDUDLVJUHDWHUWKDQEHWZHHQ7KDODVVHU\DQG%DGDJDUDZKLFKLVLQDFFRUGDQFHZLWK
WKHJHRJUDSKLFDOGLVWULEXWLRQRIWKHEUHHGDEOHDUHD7KLVFDQEHVXEVWDQWLDWHGE\WKHIDFWWKDW
EHFDXVHRIWKHJHRJUDSKLFDOSUR[LPLW\FORVHEUHHGLQJPD\EHRFFXUULQJEHWZHHQ7KDODVVHU\
DQG%DGDJDUDSRSXODWLRQVDQGWKH\DUHIRXQGWREHFORVHO\UHODWHG7DQXUSRSXODWLRQLVGLIIHUHQW
IURPWKHRWKHUWZRJRDWSRSXODWLRQV
&MSQIXVMGEPXVEMXW
7KH7DQXUDQLPDOVKDGDKLJKHUOLWWHUVL]HZLWKPRUHLQFLGHQFHVRIWZLQVWULSOHWVDQGTXDGUXSOHWV
LQFRPSDULVRQWRWKHRWKHUSRSXODWLRQVVWXGLHG7KHERG\ZHLJKWZDVPLQLPXPLQWKH7DQXU
SRSXODWLRQZKLOH7KDODVVHU\DQLPDOVUHFRUGHGWKHPD[LPXP7KHPHDQELUWKZHLJKWVUHFRUGHG
LQ NLORJUDP LQ 7DQXU 7KDODVVHU\ DQG %DGDJDUD ZHUH DQG
NJUHVSHFWLYHO\7KHERG\ZHLJKWVLQWKHUVW\HDURIOLIHZHUHDQG
NJUHVSHFWLYHO\7DEOH
7KDODVVHU\
%DGDJDUD
7DQXU
*MKYVI(IRHVSKVEQFEWIHSRKIRIXMGHMWXERGI
8EFPI&SH][IMKLXOK SJ1EPEFEVMKSEXW
4STYPEXMSRW
&MVXL
[IMKLX
3RIQSRXL
[IMKLX
8LVIIQSRXLW
[IMKLX
7M\QSRXLW
[IMKLX
3RI]IEV
[IMKLX
8ERYV
8LEPEWWIV]
&EHEKEVE

&VIIHMRKERHKIRIXMGW
'SRGPYWMSR
7KHWHFKQLTXHVHPSOR\HGKHUHFRXOGEHXVHGHIIHFWLYHO\WRGLIIHUHQWLDWHEUHHGVDQGGLIIHUHQW
SRSXODWLRQVRIWKHVDPHEUHHG2IWKHVHPLFURVDWHOOLWHPDUNHUVSURYHGWREHWKHPRVWHIIHFWLYH
RQH *HQHWLF GLVWDQFH FRPSXWDWLRQ EDVHG RQ ELRFKHPLFDO DQG PLFURVDWHOOLWH PDUNHU VWXGLHV
UHYHDOHGWKDWWKH7DQXUDQLPDOVUHPDLQHGPRVWVHSDUDWHGIURPWKHRWKHUWZRSRSXODWLRQV7KH
REVHUYDWLRQVRQELRPHWULFDOWUDLWVUHLWHUDWHGWKHQGLQJWKDW7DQXUDQLPDOVZHUHGLIIHUHQWWKRXJK
DOOWKUHHSRSXODWLRQVSRVVHVVWKHFKDUDFWHULVWLFVRIWKH0DODEDULEUHHG7KHH[LVWHQFHRIKLJK
JHQHWLFYDULDELOLW\RIGLIIHUHQWSRSXODWLRQVRIWKHVDPHEUHHGLVDFWXDOO\DJLIWWKHSRVVLELOLWLHVRI
ZKLFKKDYHEHHQKLWKHUWRXQGHUXWLOLVHGLQEUHHGLQJ7KHLGHQWLFDWLRQRIXQLTXHQHVVLQWKH7DQXU
SRSXODWLRQLQPDQ\UHVSHFWVKLJKOLJKWVWKHQHHGIRUIXUWKHUVLPLODULQYHVWLJDWLRQVLQFDVHRIRWKHU
JRDWSRSXODWLRQVDQGKHOSVWRIRUPXODWHDQHIIHFWLYHVHOHFWLRQSURJUDPPH:KLOHFRQVHUYLQJ
DQLPDOVJHQHWLFYDULDELOLW\QHHGVWREHVWXGLHGVRWKDWWKHGHVLUDEOHWUDLWVFRXOGEHJLYHQGXH
LPSRUWDQFHLQIXUWKHUSURSDJDWLRQ8OWLPDWHEHQHIDFWRUVZRXOGEHWKHUXUDOSRRUZKRKDYHWKH
PRVWWRJDLQZKHQSURYLGHGZLWKEHWWHUDQLPDOV7KHORZHUERG\ZHLJKWRI7DQXUDQLPDOVLV
ZHOFRPHLQWKDWHYHQZRPHQFDQPDQDJHWKHPZKLOHWKHLUKLJKSUROLFDF\JLYHVDGGHGYDOXH
DVUHJDUGVHFRQRP\WKHPRVWLPSRUWDQWFRQFHUQRIWKHDYHUDJH.HUDOLWHPDUJLQDOIDUPHU,QD
QXWVKHOOWKHVWXG\DVVHUWVWKHQHHGIRUHIIHFWLYHXWLOLVDWLRQRI7DQXUDQLPDOVLQHYROYLQJVPDOOHU
JRDWVZLWKKLJKHUSUROLFDF\WRDWWDLQDEHQHFLDOHQGUHVXOWIRUWKHHFRQRPLFDOO\EDFNZDUGDQG
XQGHUSULYLOHJHGIDUPHUV
6IJIVIRGIW
$UUDQ]--<%D\RQDQG)6DQ3ULPLWLYR&RPSDULVRQRISURWHLQPDUNHUVDQGPLFURVDWHOOLWHVLQGLIIHUHQWLDWLRQ
RIFDWWOHSRSXODWLRQV$QLPDO*HQHWLFV
%DUEDQFKR0'/ODQHV/0RUHUD5*DU]RQDQG$5RGHUR*HQHWLFPDUNHUVLQWKHEORRGRI6SDQLVKJRDW
EUHHGV$QLPDO%ORRG*URXSV%LRFKHPLFDO*HQHWLFV
%DUXDK3DQG33%KDW1RWHRQWKHJHQHWLFVRIKDHPRJORELQDQGWUDQVIHUULQSRO\PRUSKLVPVLQWKUHHEUHHGVRI
,QGLDQJRDWV,QGLDQ-RXUQDORI$QLPDO6FLHQFH
%HXWOHU(2'XURQDQG%1.HOO\,PSURYHGPHWKRGIRUWKHGHWHUPLQDWLRQRIEORRGJOXWDWKLRQH-RXUQDORI
/DERUDWRU\&OLQLFDO0HGLFLQH
%KDW33*HQHWLFPDUNHUVLQ-DPXQDSDULDQG6LURKLJRDWEUHHGV,QGLDQ-RXUQDORI$QLPDO6FLHQFH
%KDW33*HQHWLFPDUNHUVLQ-DPXQDSDULDQG6LURKLJRDWEUHHGV,QGLDQ-RXUQDORI$QLPDO6FLHQFH
%KDW33*HQHWLFVWXGLHVRQELRFKHPLFDOSRO\PRUSKLVPVRIEORRGVHUXPSURWHLQVDQGHQ]\PHVLQ3DVKPLQDJRDWV
,QGLDQ-RXUQDORI$QLPDO6FLHQFH
%KDW33DQG936LQJK$ONDOLQHSKRVSKDWDVHZKROHEORRGSRWDVVLXPVRGLXPDQGSHUFHQWSDFNHGFHOOYROXPH
LQ3DVKPLQDJRDWV,QGLDQ-RXUQDORI$QLPDO6FLHQFH
%KDW337&6DQWLDJRDQG1.6LQKD%ORRGSRWDVVLXPVRGLXPKDHPRJORELQDQGWUDQVIHUULQSRO\PRUSKLVP
LQ-DPXQDSDULDQG%DUEDULJRDWV,QGLDQ-RXUQDORI$QLPDO6FLHQFH
&DQDWDQ7 DQG 6 %R]WHSH 7KH SRO\PRUSKLVPV RI KDHPRJORELQ DQG WUDQVIHUULQ LQ7XUNLVK KDLU JRDW ,QGLDQ
9HWHULQDU\-RXUQDO
&KHQ\DPEXJD6:2+DQRWWH3&:DWWV6-.HPS*&.LIDUR36*ZDNLVD3+3HWHUVHQDQG-(25HJH
*HQHWLFFKDUDFWHUL]DWLRQRILQGLJHQRXVJRDWVRIVRXWK6DKDUDQ$IULFDXVLQJPLFURVDWHOOLWH'1$PDUNHUV$VLDQ
$XVWUDOLDQ-RXUQDORI$QLPDO6FLHQFH
&LDPSROLQL 5 . *RXGDU] ' 9DLPDQ -/ )RXOOH\ DQG ' &LDQFL ,QGLYLGXDO PXOWLORFXV JHQRW\SHV XVLQJ
PLFURVDWWHOOLWHSRO\PRUSKLVPVWRSHUPLWWKHDQDO\VLVRIJHQHWLFYDULDELOLW\ZLWKLQDQGEHWZHHQ,WDOLDQEHHIFDWWOH
EUHHGV-RXUQDORI$QLPDO6FLHQFH
(OPDFL&6RPHJHQHWLFPDUNHUVLQWKHQDWLYHKDLUJRDWVRI7XUNH\,QGLDQ9HWHULQDU\-RXUQDO
)HVXV/69DUNRQ\LDQG$$WV%LRFKHPLFDOSRO\PRUSKLVPVLQJRDWVZLWKVSHFLDOUHIHUHQFHWRWKH+XQJDULDQ
1DWLYHEUHHG$QLPDO%ORRG*URXSV%LRFKHPLFDO*HQHWLFV

&VIIHMRKERHKIRIXMGW
*LOO33/,YDQRY&.LPSWRQ53LHUF\1%HQVRQ*7DOO\,(YHWW(+DJHOEHUJDQG.6XOOLYDQ,GHQWLFDWLRQ
RIWKHUHPDLQVRI5RPDQRYIDPLO\E\'1$DQDO\VLV1DWXUH*HQHWLFV
.XPDU ' 63 'L[LW 5 6KDUPD . 3DQGH\ * 6LURKL$. 3DWHO 5$.$JDUZDO 1.9HUPD '6 *RXU DQG
636$KODZDW3RSXODWLRQVWUXFWXUHJHQHWLFYDULDWLRQDQGPDQDJHPHQWRI0DUZDULJRDWV6PDOO5XPLQDQW
5HVHDUFK
0HQUDG 0 ( 0XOOHU &+ 6WLHU DQG & *HOGHUPDQQ *DOO 3URWLHQ SRO\PRUSKLVPV LQ WKH EORRG RI *HUPDQ
,PSURYHG)DZQDQG%RHUJRDWV6PDOO5XPLQDQW5HVHDUFK
0RUH7$.5DLDQG06LQJK5HGFHOOJOXWDWKLRQHSRO\PRUSKLVPLQJRDWV,QGLDQ-RXUQDORI$QLPDO6FLHQFH

0RUHUD/'/ODQHV0%DUEDQFKRDQG$5RGHUR*HQHWLFSRO\PRUSKLVPLQ6SDQLVK0HULQRVKHHS$QLPDO
%ORRG*URXSV%LRFKHPLFDO*HQHWLFV
1HL0(VWLPDWLRQRIDYHUDJHKHWHUR]\JRVLW\DQGJHQHWLFGLVWDQFHIURPDVPDOOQXPEHURILQGLYLGXDOV*HQHWLFV

1JX\HQ7&/0RUHUD'/ODQHVDQG3/HJHU6KHHSEORRGSRO\PRUSKLVPDQGJHQHWLFGLYHUJHQFHEHWZHHQ
)UHQFK5DPERXLOOHWDQG6SDQLVK0HULQRUROHRIJHQHWLFGULIW$QLPDO*HQHWLFV
2VHU%/+DZNV3K\VLRORJLFDO&KHPLVWU\)RXUWHHQWKHGLWLRQ0F*UDZ+LOO%RRN&RPSDQ\1HZ<RUN1<
86$S
3HSLQ/DQG7&1JX\HQ%ORRGJURXSVDQGSURWHLQSRO\PRUSKLVPVLQYHJRDWEUHHGV&DSUDKLUFXV$QLPDO
*HQHWLFV
6KDPVXGGLQ$.%1DQGDNXPDUDQDQG*0XNXQGDQ*HQHWLFVWXGLHVRQKDHPRJORELQDOEXPLQDQGDP\ODVH
SRO\PRUSKLVPLQ0DODEDULJRDWVDQGLWVH[RWLFFURVVEUHGV.HUDOD-RXUQDORI9HWHULQDU\6FLHQFH
7XQRQ0-3*RQ]DOH]DQG09DOOHMR*HQHWLFUHODWLRQVKLSVEHWZHHQQDWLYH6SDQLVKEUHHGVRIJRDW$QLPDO
*HQHWLFV
8VKD$30LFURVDWHOOLWHPDUNHUVLQJHQHWLFLPSURYHPHQWRIOLYHVWRFN3K'WKHVLV8QLYHUVLW\RI(GLQEXUJK
(GLQEXUJK8.S
9DQNDQ'0DQG.%HOO*HQHWLFSRO\PRUSKLVPRISODVPDYLWDPLQ'ELQGLQJSURWHLQ*&LQ$XVWUDOLDQJRDWV
$QLPDO*HQHWLFV

&VIIHMRKERHKIRIXMGW
+IRIXMGTEVEQIXIVWJSVKVS[XLSJFVIHMEQIXIVMR
EPTEGEW
/9DURQD,&HUYDQWHV0$3pUH]&DEDO50RUDQWH$%XUJRVDQG-3*XWLpUUH]
8QLGDGGH*HQpWLFD&XDQWLWDWLYD\0HMRUD$QLPDO8QLYHUVLGDGGH=DUDJR]D6SDLQ
'HSDUWDPHQWRGH3URGXFFLyQ$QLPDO8QLYHUVLGDG&RPSOXWHQVHGH0DGULG$YGD3XHUWDGH
+LHUURVQ(0DGULG6SDLQJXWJDU#YHWXFPHV
3DFRPDUFD6$32%2;$Y3DUUD$UHTXLSD3HUX
%FWXVEGX
$OSDFDLVWKHPRVWLPSRUWDQWEUHSURGXFHURI6RXWK$PHULFDQFDPHOLGVSHFLHVDQGDQLPSRUWDQW
LQFRPH IRU WKH$QGHDQ FRPPXQLWLHV 1RZDGD\V WKH EUH GLDPHWHU LV FRQVLGHUHG WKH PDLQ
VHOHFWLRQFULWHULRQLQDOSDFDSRSXODWLRQVDOORYHUWKHZRUOG+RZHYHUEUHGLDPHWHULQFUHDVHV
ZLWKWKHDJHRIWKHDQLPDOVDQGLWZRXOGEHSUHIHUDEOHWRVHOHFWWKRVHDQLPDOVWKDWPDLQWDLQ
DWKLQEUHWKURXJKRXWWKHLUOLIH7KHDLPRIWKLVVWXG\LVWRGHVFULEHWKHJHQHWLFUHODWLRQVKLS
EHWZHHQEUHGLDPHWHUDWELUWKDQGLWVHYROXWLRQRYHUDOLIHWLPH7KHDQDO\VLVRIWKHHYROXWLRQRI
EUHGLDPHWHUZDVVWXGLHGDVDORQJLWXGLQDOWUDLWXVLQJWKH%D\HVLDQSURFHGXUHIRUWKHDQDO\VLV
RISURGXFWLRQIXQFWLRQV7KHUHVXOWVVXJJHVWHGWKDWWKHUHLVVXEVWDQWLDOJHQHWLFYDULDWLRQLQEUH
GLDPHWHUDWELUWKDQGDOVRRQWKHOLQHDUJURZWKRIEUHGLDPHWHU7KLVFRQUPVWKHQHHGIRUD
JHQHWLFSURJUDPPHWRPRGLI\WKHHYROXWLRQRIWKHEUHGLDPHWHURYHUWLPH+RZHYHUVHOHFWLRQ
WRLQFUHDVHWKHJURZWKRIWKHEUHZLWKRXWDVXEVWDQWLDOUHGXFWLRQLQWKHEUHGLDPHWHUDWELUWK
VHHPVLPSODXVLEOH
.H\ZRUGVDOSDFDHYROXWLRQEUHGLDPHWHU
-RXVSHYGXMSR
$OSDFD LV WKH PRVW LPSRUWDQW EUH SURGXFHU RI 6RXWK $PHULFDQ FDPHOLG VSHFLHV DQG DQ
LPSRUWDQWLQFRPHIRUWKH$QGHDQFRPPXQLWLHV7KHUHDUHWZRDOSDFDEUHHGVZLWKGLIIHUHQWHHFH
FKDUDFWHULVWLFV+XDFD\D+8ZKLFKUHSUHVHQWVRIWKHDOSDFDSRSXODWLRQLQ3HUX4XLVSH
HWDODQG6XUL68
*HQHWLFSURJUDPPHVIRUEUHFKDUDFWHULVWLFVKDYHEHHQLPSOHPHQWHGE\3$&20$5&$6$E\
XVLQJDWH[WLOHYDOXHLQGH[DVVHOHFWLRQFULWHULRQ,QDGGLWLRQHVWLPDWHVRIKHULWDELOLWLHVIRUEUH
WUDLWVVXJJHVWPRGHUDWHJHQHWLFGHWHUPLQLVP&HUYDQWHVHWDO
)LEUHGLDPHWHULVQRZDGD\VFRQVLGHUHGWKHPDLQVHOHFWLRQFULWHULRQLQDOSDFDSRSXODWLRQVDOORYHU
WKHZRUOG*XWLpUUH]HWDO+RZHYHUEUHGLDPHWHULQFUHDVHVZLWKWKHDJHRIWKHDQLPDOV
DQGLWZRXOGEHSUHIHUDEOHWRVHOHFWWKRVHDQLPDOVWKDWPDLQWDLQDWKLQEUHWKURXJKRXWWKHLUOLIH
7KHDQDO\VLVRIWKHHYROXWLRQRIEUHGLDPHWHUFDQEHVWXGLHGDVDORQJLWXGLQDOWUDLWXVLQJWKH
%D\HVLDQSURFHGXUHIRUWKHDQDO\VLVRISURGXFWLRQIXQFWLRQVGHVFULEHGE\9DURQDHWDO
7KXVWKHDLPRIWKLVVWXG\LVWRGHVFULEHWKHJHQHWLFUHODWLRQVKLSEHWZHHQEUHGLDPHWHUDWELUWK
DQGLWVHYROXWLRQRYHUDOLIHWLPH
1EXIVMEPERHQIXLSHW
7KHGDWDVHWFRQVLVWVRIDSHGLJUHHRILQGLYLGXDOVRIWKH+XDFD\DEUHHGDQGUHFRUGV
RI EUH GLDPHWHU FRUUHVSRQGLQJ WR LQGLYLGXDOV7KH DYHUDJH EUH GLDPHWHU ZDV

&VIIHMRKERHKIRIXMGW
PDQGVWDQGDUGGHYLDWLRQZDVP7KHUHODWLRQVKLSEHWZHHQDJHDQGEUHGLDPHWHULV
SUHVHQWHGLQ)LJXUH
7XEXMWXMGEPQSHIP
7KHVWDWLVWLFDOPRGHODVVXPHGWKDWWKHMWKPHDVXUHRIWKHEUHGLDPHWHUIRUWKHLWKLQGLYLGXDO\LM
LVGHWHUPLQHGE\WKHHIIHFWRIWKHPRQWK\HDURIUHFRUGLQJILZLWKOHYHOVWKHEUHGLDPHWHU
DWELUWKDLDQGWKHVORSHRIOLQHDUJURZWKIRUEUHGLDPHWHUJLWLPHWKHDJHDWWKHMWKPHDVXUH
[LMSOXVDUHVLGXDOULMN
\LMN ILDMJM[MNULMN
7KHUHVLGXDOVUDUHDVVXPHGWREH*DXVVLDQDQGLGHQWLFDOO\GLVWULEXWHG
Ua1,U
ZKHUHULVWKHUHVLGXDOYDULDQFH
)LEUHGLDPHWHUDWELUWKDQGWKHVORSHRIWKHLQFUHDVHLQEUHGLDPHWHUDUHDVVXPHGWREHGHWHUPLQHG
E\V\VWHPDWLFVH[OHYHOVDQGFRORXUOHYHOVJHQHWLFDQGHQYLURQPHQWDOHIIHFWV
D

X

D
J
;E
ED
=
XD
H
;
=
HJ
J
J
7KHDGGLWLYHJHQHWLFHIIHFWVDQGWKHHQYLURQPHQWDOHIIHFWVZHUHDVVXPHGWREHGLVWULEXWHGZLWK
WKHIROORZLQJPXOWLYDULDWH*DXVVLDQGLVWULEXWLRQV
D
X
XJ 1$*

H
HD 1$*
J
)LEHUGLDPHWHU
:KHUH*DQG5DUHWKHPDWULFHVRIDGGLWLYHJHQHWLFDQGHQYLURQPHQWDOFRYDULDQFHVFRPSRQHQWV
3ULRUGLVWULEXWLRQVIRUEDEJ*5DQGUZHUHDVVXPHGWREHDWEHWZHHQERXQGHGOLPLWV

<HDUV

*MKYVI6IPEXMSRWLMTFIX[IIREKIERHFVIHMEQIXIV

&VIIHMRKERHKIRIXMGW
7KH%D\HVLDQDQDO\VLVZDVLPSOHPHQWHGZLWKD*LEEVVDPSOHUDOJRULWKPZLWKDVLQJOHORQJFKDLQ
RILWHUDWLRQVDIWHUGLVFDUGLQJWKHUVW
7KHUHVXOWVRIWKHSRVWHULRUGLVWULEXWLRQVRIWKHYDULDQFHFRPSRQHQWVDUHSUHVHQWHGLQ7DEOH
0RUHRYHU WKH SRVWHULRU PHDQ HVWLPDWH RI WKH UHVLGXDO YDULDQFH ZDV ZLWK D SRVWHULRU
VWDQGDUGGHYLDWLRQRI7KHVHUHVXOWVVXJJHVWWKDWWKHUHLVVXEVWDQWLDOJHQHWLFYDULDWLRQLQ
EUHGLDPHWHUDWELUWKDQGDOVRLQWKHOLQHDUJURZWKRIEUHGLDPHWHU7KHODVWUHVXOWVLPSO\WKDW
DJHQHWLFSURJUDPPHLVSODXVLEOHIRUPRGLI\LQJWKHHYROXWLRQRIWKHEUHGLDPHWHURYHUWLPH
+RZHYHUWKHSRVWHULRUPHDQHVWLPDWHRIWKHDGGLWLYHJHQHWLFFRUUHODWLRQEHWZHHQGLDPHWHUDW
ELUWKDQGOLQHDUJURZWKZDVZLWKDSRVWHULRUVWDQGDUGGHYLDWLRQRI7KLVUHVXOWLV
FRQUPHGE\WKHSORWRIWKHSRVWHULRUPHDQHVWLPDWHVRIWKHEUHHGLQJYDOXHVIRUERWKWUDLWV
)LJXUH
8EFPI4SWXIVMSVQIERERHWXERHEVHHIZMEXMSR7( SJKIRIXMGTEVEQIXIVWSJXLIFVIHMEQIXIVEXFMVXLE
ERHMXWTSWXIVMSVPMRIEVKVS[XLG
mY
mI
(MEQIXIVEXFMVXLE
0MRIEVKVS[XLG
QIER
7(
QIER
7(

)LEUHGLDPHWHULQFUHDVHSHU\HDU

)LEUHGLDPHWHUDWELUWK
*MKYVI4SWXIVMSVQIERIWXMQEXIJSVFVIIHMRKZEPYIWJSVFVIHMEQIXIVEXFMVXLERHPMRIEVKVS[XL

&VIIHMRKERHKIRIXMGW
7KHUHIRUHVHOHFWLRQWRLQFUHDVHWKHJURZWKRIWKHEUHZLWKRXWDVXEVWDQWLDOUHGXFWLRQLQWKHEUH
GLDPHWHUDWELUWKVHHPVLPSODXVLEOH)XUWKHUUHVHDUFKLVQHHGHG
6IJIVIRGIW
&HUYDQWHV,0$3pUH]&DEDO50RUDQWH$%XUJRV&6DOJDGR%1LHWR)*R\DFKHDQG-3*XWLpUUH]
*HQHWLF SDUDPHWHUV DQG UHODWLRQVKLSV EHWZHHQ EUH DQG W\SH WUDLWV LQ WZR EUHHGV RI 3HUXYLDQ DOSDFDV 6PDOO
5XPLQDQW5HVHDUFK
*XWLpUUH]-3)*R\DFKH$%XUJRVDQG,&HUYDQWHV*HQHWLFDQDO\VLVRIVL[SURGXFWLRQWUDLWVLQ3HUXYLDQDOSDFDV
/LYHVWRFN6FLHQFH
9DURQD/&0RUHQR/$*DUFtD&RUWpVDQG-$OWDUULED0XOWLSOHWUDLWJHQHWLFDQDO\VLVRIXQGHUO\LQJELRORJLFDO
YDULDEOHVRISURGXFWLRQIXQFWLRQV/LYHVWRFN3URGXFWLRQ6FLHQFH
4XLVSH(&7&5RGUtJXH]/5,xLJXH]DQG-30XHOOHU3URGXFFLyQGHEUDGHDOSDFDOODPDYLFXxD\JXDQDFR
HQ6XGDPpULFD$QLPDO*HQHWLF5HVRXUFHV,QIRUPDWLRQ

&VIIHMRKERHKIRIXMGW
'SQTEVMWSRSJHMJJIVIRXFVIIHMRKWXVEXIKMIWXSMQTVSZI
EPTEGEFVITVSHYGXMSRMREPS[MRTYXTVSHYGXMSRW]WXIQ
(&4XLVSH53D~FDU$3RPD$)ORUHVDQG/$OIRQVR
,PSURYHPHQW3URJUDPPHIRU6RXWK$PHULFDQ&DPHOLGV1DWLRQDO8QLYHUVLW\RI+XDQFDYHOLFD
81++XDQFDYHOLFD3HUXHGJDUTXLVSH#\DKRRFRP
*UDGXDWH6FKRRO1DWLRQDO$JUDULDQ8QLYHUVLW\WKH0ROLQD81$/0/LPD3HUX
$QLPDO3URGXFWLRQ$UHD3XEOLF8QLYHUVLW\RI1DYDUUD6SDLQ
%FWXVEGX
$OSDFDSURGXFWLRQLQ+XDQFDYHOLFD3HUXLVDORZLQSXWSURGXFWLRQV\VWHPFKDUDFWHULVHGE\
DKLJKQXPEHURIVPDOOKHUGVZLWKIHHGLQJEDVHGRQWKHXVHRIQDWXUDOUHVRXUFHV3URGXFHUV
LQFRPH GHSHQGV EDVLFDOO\ RQ WKH TXDQWLW\ XQZDVKHG HHFH ZHLJKW 8): DQG WKH TXDOLW\
EUHGLDPHWHU)'0RIWKHEUHFRPPHUFLDOLVHG3URGXFWLYHDQGJHQHDORJLFDOLQIRUPDWLRQ
LVGLIFXOWDQGH[SHQVLYHWRUHFRUGEHFDXVHRIWKHJHRJUDSKLFDOFKDUDFWHULVWLFVDOWLWXGH!
P DQG WKH ODFN RI HIIHFWLYH FRPPXQLFDWLRQ EHWZHHQ FRPPXQLWLHV RI DOSDFDV RZQHUV7KH
DLPRIWKLVVWXG\ZDVWRDQDO\VHGLIIHUHQWEUHHGLQJVFKHPHVLQWHUPVRIJHQHWLFUHVSRQVHDQG
LQEUHHGLQJOHYHOEXWDOVRFRQVLGHULQJFRVWDQGSDUWLFLSDWLRQRIIDUPHUV$JHQRW\SLFDJJUHJDWH
YDOXH GHQHG DV D OLQHDU IXQFWLRQ RI 8): DQG )'0 ZDV FRQVLGHUHG DV EUHHGLQJ JRDO 6L[
GLIIHUHQWVWUDWHJLHVZHUHFRQVLGHUHGLQYROYLQJGLIIHUHQWQXPEHUVRIVHOHFWHGPDOHVLQDVLPLODU
ZD\WR:XU]LQJHUHWDOLQ%ROLYLDQOODPDVWKUHHFRQVLGHULQJRQHFHQWUDOQXFOHXVZLWK
DUWLFLDOLQVHPLQDWLRQPDOHV1$,RUQDWXUDOPDWLQJPDOHV10PDOHV10
WZRFRQVLGHULQJDFRPPXQDOQXFOHXVLQYROYLQJKHUGVPDOHV&PDOHV&
DQGDFRPELQDWLRQRIERWKRQWKHEDVLVRIQDWXUDOPDWLQJRQHFHQWUDOQXFOHXVDQGDFRPPXQDO
QXFOHXVLQYROYLQJKHUGVPDOHV1&6HO$FWLRQVRIWZDUH5XWWHQHWDOZDVXVHG
WRGHULYHJHQHWLFUHVSRQVHDQGLQEUHHGLQJOHYHODVVXPLQJGLIIHUHQWYDOXHVIRUSKHQRW\SLFDQG
JHQHWLFSDUDPHWHUVRI8):DQG)'0DQGGLIIHUHQWDPRXQWVRISKHQRW\SLFLQIRUPDWLRQ:LWK
UHVSHFWWRWKH&VFKHPH1$,LQFUHDVHVWKHJHQHWLFUHVSRQVHLQD10LQD
10LQDDQG&DQG1&LQD,QDYHUDJHWKHLQFUHDVHRILQEUHHGLQJZDV
SHUJHQHUDWLRQIRU1$,IRU10IRU10IRU&DQG1&DQG
IRU&&RPPXQDOQXFOHXVVFKHPHVDORQHRUFRPELQHGZLWKDFHQWUDOQXFOHXVVKRZHGDORZ
UDWHRIJHQHWLFUHVSRQVHEXWWKH\FRXOGEHXVHIXOWRVWDUWDEUHHGLQJSURJUDPPHLQ+XDQFDYHOLFD
7KDWLVEHFDXVHRIWKHORZHULQEUHHGLQJOHYHOWKHORZHUHFRQRPLFFRVWVDQGWKHKLJKHUOHYHORI
SDUWLFLSDWLRQRIIDUPHUVDVRSSRVHGWRFHQWUDOQXFOHXVVFKHPHVRQO\HVSHFLDOO\ZKHQWKH\PDNH
XVHRIDUWLFLDOLQVHPLQDWLRQ
.H\ZRUGV$OSDFDEUHHGLQJVFKHPHUHVSRQVHLQEUHHGLQJ
-RXVSHYGXMSR
$JHQHWLFLPSURYHPHQWSODQLVVXEMHFWWRFRPSOHWLRQRIDIRXUVWHSVHTXHQFHGHWHUPLQLQJWKH
W\SHRIDQLPDOWREUHHGRUWKHGHVLUHGLPSURYHPHQWFKRRVLQJWKHLQIRUPDWLRQRUWKHVHOHFWLRQ
FULWHULDWREHXVHGRUDSSOLHGVHOHFWLQJWKHDQLPDOVEDVHGRQWKHLUSKHQRW\SLFSDUDPHWHUVRU
WKHJHQHWLFPHULWRIWKHUHOHYDQWFKDUDFWHUVDQGGHVLJQLQJWKHPDWLQJSURFHVVIRUWKHDQLPDOV
VHOHFWHGWRHQVXUHDVXLWDEOHGLIIXVLRQRIJHQHWLFPDWHULDO.RVJH\HWDO
7KHFKRLFHRIDOSDFDVDVUHIHUUHGWRE\0DVRQDQG%XYDQHPEUDZLWKUHJDUGVWRORFDO
FDWWOH EUHHGV KDV VRPH DUJXPHQWV LQ LWV IDYRXU VLQFH WKH\ FDQ DGDSW WR OLYLQJ ZLWKLQ
WKHLU HQYLURQPHQW VKRZLQJ D UHVLOLHQFH WR LOOQHVV WKH\ DUH DEOH WR VXUYLYH DQG EUHHG XQGHU

&VIIHMRKERHKIRIXMGW
KDUVKJHRJUDSKLFDODQGFOLPDWHFRQGLWLRQVDQGWKH\PDNHWKHPRVWRXWRIORZTXDOLW\IRRGDQG
UHVWULFWHGZDWHUVXSSO\WKHLQFUHDVHLQWKHLUJHQHWLFPHULWHQDEOHVWKHPWRQRWRQO\PLQLPLVH
FRPSHWLWLRQIURPRWKHUH[RWLFVSHFLHVEXWDOVRFRQVWLWXWHVWKHPDLQDQGPRVWHIIHFWLYHPHDQVWR
JKWSRYHUW\DQGIRRGLQVHFXULW\LQWKHIDUPLQJFRPPXQLWLHVRIWKH6RXWK$PHULFDQFRXQWULHV
WKH\LQKDELW4XLVSHHWDOE
,QODUJHVFDOHSURGXFWLRQRIVPDOOUXPLQDQWVWKHLQFOXVLRQRIWKHPDOOLQWRWKHDFWLYHSDUWRI
WKHVHOHFWLRQSURJUDPPHLVQHLWKHUYDOLGQRUSUDFWLFDOVLQFHLWSRVHVGLIFXOWLHVLQHQVXULQJ
DGHTXDWHFRQWURODQGEULQJVKLJKFRVWVRIPHDVXUHPHQWDQGUHJLVWUDWLRQ.RVJH\DQG2NH\R
,QDGGLWLRQLQWKHFDVHRIRFNVDQGKHUGVRIDQLPDOVSUHVHQWLQGHYHORSLQJFRXQWULHV
ZKHUHUHVRXUFHVDUHVFDUFHLWLVDSSURSULDWHWRRSWLPLVHKRZHYHUOLWWOHLVDYDLODEOHZKLFKLV
SRVVLEOHZKHQJHQHWLFLPSURYHPHQWLVJHQHUDWHGLQDVPDOOSRUWLRQRIWKHSRSXODWLRQUHIHUUHG
WRDVQXFOHXVZKLOHDOVRLPSURYLQJFRQWUROV3HUIRUPDQFHUHFRUGLQJDQGJHQHWLFHYDOXDWLRQDUH
FDUULHGRXWRQWKHQXFOHXVDQGJHQHWLFSURJUHVVLVVSUHDGWRWKHFRPPHUFLDOSRSXODWLRQE\XVLQJD
EUHHGLQJPDOHDQGRUVHPHQZKHQHYHUDUWLFLDOLQVHPLQDWLRQLVIHDVLEOH.RVJH\HWDO
$JRRGVWDUWLQJSRLQWLQGHVLJQLQJVHOHFWLRQVFKHPHVZLWKLQDJHQHWLFLPSURYHPHQWSURJUDPPH
LVWRHYDOXDWHVLPLODULPSURYHPHQWSURJUDPPHVWKDWKDYHRUDUHEHLQJFRQGXFWHGDQGLQWKLV
ZD\JHQHWLFLPSURYHPHQWRSSRUWXQLWLHVDQGRSWLRQVFDQEHSURSHUO\XQGHUVWRRG,QGHYHORSLQJ
FRXQWULHVZKHUHEUHHGHUVKDYHUHODWLYHO\VPDOOKHUGVDVLVWKHFDVHRIDOSDFDSURGXFWLRQLQ3HUX
DQG%ROLYLDGHVSLWHWKHJUHDWHIIRUWPDGHRQO\VOLJKWJHQHWLFSURJUHVVKDVEHHQDWWDLQHGPDLQO\
GXHWRLQVWLWXWLRQDOWHFKQLFDODQGLQIUDVWUXFWXUHLVVXHV.RVJH\HWDO7KHVHQRWRQO\
GHWHUPLQHWKHPRVWDSSURSULDWHVHOHFWLRQVFKHPHWREHLPSOHPHQWHGEXWWKH\DOVRKDYHWRGR
ZLWKVXVWDLQDELOLW\ZKLFKLVLQGLVSHQVDEOHLQWKHJHQHWLFLPSURYHPHQWSURFHVVVLQFHLWLQYROYHV
PXFKWLPHDQGUHVXOWVDUHXVXDOO\VHHQZLWKLQRUDIWHUVRPH\HDUV
,WKDVEHHQJHQHUDOO\VXJJHVWHGWKDWWKHEHVWVHOHFWLRQVFKHPHIRUGHYHORSLQJFRXQWULHVVHHPV
WREHDFHQWUDOLVHGQXFOHXVKHUGSURJUDPPHZKHUHWKHQXFOHXVLVORFDWHGDWWKHKHDUWRIDVWDWH
PDQDJHGSURGXFWLRQFHQWUH*L]DZHWDO7KHDGYDQWDJHRIPDLQWDLQLQJDFHQWUDOLVHG
UHSURGXFWLRQQXFOHXVLVWKDWLWHQVXUHVDFFXUDF\LQGDWDUHFRUGLQJDQGSURFHVVLQJZKLFKUHTXLUHV
WKHLQYROYHPHQWRIH[SHUWVWRFRQGXFWYDULRXVDFWLYLWLHVRQWKHQXFOHXVZKLFKZRXOGOHDGWR
WKHEUHHGHUEHLQJH[FOXGHG7KHUHIRUHVHOHFWLRQFDQEHFDUULHGRXWHIFLHQWO\WRDFKLHYHKLJK
JHQHWLFJDLQV+RZHYHUWKLVFDQRQO\ZRUNIRUDVORQJDVWKHUHLVQDQFLDODQGWHFKQLFDOVXSSRUW
ZKHWKHULWEHIURPWKHJRYHUQPHQWRU1*2VDQGDVORQJDVWKHUHLVZLOOLQJQHVVHPSRZHUPHQW
DQG FRPPLWPHQW IURP WKH LQGLYLGXDO EUHHGHUV ZKLFK PHDQV WKDW ORQJWHUP XVH ZRXOG QRW
EHVXVWDLQDEOH$QRWKHUDOWHUQDWLYHZRXOGEHWKHGLVSHUVHGQXFOHXVVFKHPHLQZKLFKVHYHUDO
EUHHGHUVIRUPDQXFOHXV)RUWKLVWRKDSSHQLWLVQHFHVVDU\IRUIDUPHUVWREHZHOOWUDLQHGDQG
ZLOOLQJWRNHHSSURGXFWLRQDQGSHGLJUHHUHFRUGV+HQFHWKHJHQHWLFDOO\LPSURYHGDQLPDOVPD\
VXEVHTXHQWO\EHGLVWULEXWHGWRRWKHUEUHHGHUVDQGDVDPDQQHURIFRPSHQVDWLRQWKHEHQHFLDULHV
PXVWJLYHWKHUVWRIIVSULQJERUQIURPWKHUHSURGXFWLRQDQLPDOVSURYLGHGEDFNWRWKHGLVSHUVHG
QXFOHXV:XU]LQJHUHWDO,QWKLVFDVHLWLVVWLOOQHFHVVDU\WRKDYHDGDWDSURFHVVLQJ
FHQWUHDOWKRXJKWKHUHLVJUHDWHULQYROYHPHQWE\WKHEUHHGHUV+RZHYHUWKHODFNRIWHFKQLFLDQV
LQIUDVWUXFWXUHDQGSURSHURUJDQLVDWLRQWKHUHRIZRXOGPHDQWKLVV\VWHPZRXOGEHRYHUO\DPELWLRXV
DQGDOWKRXJKVRPHUHVHDUFKKDVEHHQGRQHRQWURSLFDOVKHHS*L]DZHWDODQGOODPDV
:XU]LQJHUHWDOQRVXFKLQIRUPDWLRQKDVEHHQREWDLQHGRQDOSDFDV
*L]DZHWDOSURSRVHGDQGHYDOXDWHGDFHQWUDOLVHGFRPPXQDOVFKHPHIRURYLQHVSHFLHV
EDVHG RQ WKH DFWLYH SDUWLFLSDWLRQ RI WKH IDUPHUV ZLWKLQ WKH FRPPXQLW\ ZKLFK HQWDLOV WKH
IRUPDWLRQRIDQXFOHXVLQWKHFRPPXQLW\WKURXJKWKHVHOHFWLRQRIEHWWHUTXDOLW\VKHHSRZQHG
E\WKHIDUPHUVWDNLQJSDUW7KLVFRXOGEHPRUHDFFHSWDEOHZLWKLQWKHFRPPXQLW\WKRXJKLWPXVW
EHKLJKOLJKWHGWKDWLQWKLVFDVHWKHPDVVVHOHFWLRQEDVHGRQLQGLYLGXDOHYDOXDWLRQVRISKHQRW\SHV

&VIIHMRKERHKIRIXMGW
ZLWKDODFNRISHGLJUHHUHFRUGVZRXOGEHQHFHVVDU\,QWKLVV\VWHPEUHHGHUVDQGH[SHUWVZRUN
WRJHWKHU RQ FROOHFWLQJ GDWD HYDOXDWLQJ WKH SRWHQWLDO UHSURGXFWLRQ FDQGLGDWHV DQG VHOHFWLQJ
WKHDQLPDOV+RZHYHUWKHRSHUDWLRQDODVSHFWVDUHDOVRLQGLFDWHGDVEHLQJPRUHFRPSOH[DQG
WKHUHIRUHVDLGVFKHPHLVSURQHWRFDXVLQJLVVXHVZLWKWKHLPSOHPHQWDWLRQRIUHFRUGNHHSLQJ
DQGVHOHFWLRQPHWKRGV
,QDVLPXODWLRQVWXG\RQDOSDFDKHUGV/HyQ9HODUGHDQG*XHUUHURIRXQGWKDWWKHXVHRI
DVHOHFWLRQLQGH[JHQHUDWHVJDLQVRIJFPDQGZKLFKUHSUHVHQWVJFPDQG
\HDUIRUXQZDVKHGHHFHZHLJKWVWDSOHOHQJWKDQGEUHGLDPHWHURQD\HDUVHOHFWLRQ
,QDGGLWLRQ3RQ]RQLFRQVLGHUHGLQDVLPXODWLRQVWXG\IRU$XVWUDOLDQKHUGVWKDWXVLQJD
FRPSRXQGVHOHFWLRQLQGH[ZRXOGHQDEOHDJHQHWLFJDLQRIWRNJWRPDQG
WRNJIRUZDVKHGHHFHEUHGLDPHWHUDQGOLYHZHLJKWJDLQUHVSHFWLYHO\RYHUD
\HDUSHULRGZKLFKUHSUHVHQWVDQDQQXDOJHQHWLFSURJUHVVRIJUPDQGJIRUWKH
DERYHPHQWLRQHGIHDWXUHV4XLVSHHWDOSUHGLFWLQJDJHQHWLFJDLQSHUVHOHFWLRQXQGHU
KLJK$QGHDQSURGXFWLRQV\VWHPVFKDUDFWHULVHGE\ORZUHVRXUFHVEHDULQJLQPLQGWKHZHLJKW
RIXQZDVKHGHHFHDQGEUHGLDPHWHUUHSRUWHGDQDQQXDOSURJUHVVRIJDQGP
UHVSHFWLYHO\ +RZHYHU 4XLVSHHW DO D UHSRUWHG JDLQV SHU \HDU UDQJLQJ IURP WR
JUDQGWRPUHVSHFWLYHO\IRUWKHDERYHPHQWLRQHGFKDUDFWHUVZKLOHXQGHU
WKHVDPHFRQGLWLRQV
%DVHGRQWKHVHFRQVLGHUDWLRQVWKHVWXG\KHUHLQZDVFDUULHGRXWZLWKWKHDLPRIDQDO\VLQJYDULRXV
VHOHFWLRQVFKHPHVLQWHUPVRIJHQHWLFSURJUHVVWDNLQJLQWRDFFRXQWWKHFRVWDQGLQYROYHPHQW
RIWKHDOSDFDEUHHGHUVWKHUHIRUHWKHDJJUHJDWHJHQRW\SHYDOXHZDVFRQVLGHUHGLQWKHEUHHGLQJ
REMHFWLYHLQFOXGLQJXQZDVKHGHHFHZHLJKWDQGEUHGLDPHWHUEDVHGRQDOLQHDUIXQFWLRQ7KH
LQFUHDVHLQLQEUHHGLQJDVDUHVXOWRIWKHVHOHFWLRQSURFHVVLVDOVRFRQVLGHUHG
1EXIVMEPWERHQIXLSHW
7KHVWXG\ZDVFRQGXFWHGRQWKH+XDQFDYHOLFDUHJLRQZKLFKFRPSULVHVDUHDVWKDWDUHEHWZHHQ
DQGPHWUHVDERYHVHDOHYHOZLWKWHPSHUDWXUHVUDQJLQJIURP&WR&DWQLJKW
DQGEHWZHHQ&DQG&GXULQJWKHGD\ZLWKUDLQIDOOUHDFKLQJPP\HDU
3ULRUWRSURSRVLQJWKHLPSURYHPHQWVFKHPHVIRUZKLWH+XDFD\DDOSDFDVDGLYLVLRQZDVPDGH
RIWKHDOSDFDVWKDWKDYHEHHQEUHGLQ+XDQFDYHOLFD4XLVSHEDVHGRQHHFH
FRORXUDJHUDQJHDQGLPSURYHPHQWOHYHOLQDFFRUGDQFHZLWKWKHPHWKRGVSURSRVHGE\4XLVSH
HWDODLQRUGHUWRDUUDQJHWKHDQLPDOGDWDLQWRVWUDWLHGOHYHOVVHOHFWLRQQXFOHXV
PXOWLSOLHUKHUGVDQGSHQQHGKHUGVIRUZKLFKSURGXFWLRQDQGUHSURGXFWLYHLQGH[HVZHUH
XVHG7DEOHEDVHGRQELEOLRJUDSKLFDOUHYLHZV1LHWRDQG$OHMRV%UHQHVHWDO
:XU]LQJHUHWDO4XLVSHHWDOD4XLVSHHWDOE
$ VHOHFWLRQ QXFOHXV ZDV SURSRVHG PDGH XS RI IHPDOHV DQG WR PDOHV ZKLFK
HQDEOHVXVWRSURGXFHDVXIFLHQWQXPEHURIEUHHGLQJVSHFLPHQVWRUHSODFHPDOHVIURPWZR
SRSXODWLRQVWUDWDVHOHFWLRQQXFOHXVDQGPXOWLSOLHUKHUGV7KHSURSRVHGQXPEHURIIHPDOHV
FRUUHVSRQGVWRKHUGVIRXQGLQ+XDQFDYHOLFDE\WKH352&$68'6RXWK$PHULFDQ&DPHOLG
,PSURYHPHQW3URJUDPPHZLWKZKLFKLWKDVEHHQZRUNLQJHDFKKHUGFRQWDLQLQJDQDYHUDJHRI
IHPDOHVIRUEUHHGLQJ
%\ DQDO\VLQJ WKH SURGXFWLRQ V\VWHP DQG WDNLQJ LQWR DFFRXQW WKH ORJLVWLFV DQG LQIUDVWUXFWXUH
WKDWDUHPRVWLPSRUWDQWIRUWKHHIIHFWLYHQHVVDQGVXVWDLQDELOLW\RIDQ\JHQHWLFLPSURYHPHQW
SURJUDPPH .RVJH\ DQG 2NH\R WKUHH W\SHV RI EUHHGLQJ VFKHPHV DUH SURSRVHG
$VFKHPHZLWKLQDQGDFURVVSURGXFWLRQXQLWVZKHUHHYDOXDWLRQDQGVHOHFWLRQRIDQLPDOVIRU

&VIIHMRKERHKIRIXMGW
8EFPI4VSHYGXMSRERHVITVSHYGXMZIMRHI\IWJSVXLIWXVEXMGEXMSRSJXLIEPTEGETSTYPEXMSRMRXLI,YERGEZIPMGE
VIKMSR
-RHI\IW
%QSYRX
%PTEGETSTYPEXMSRMR,YERGEZIPMGE
2SSJJIQEPIWTIVFVIIHMRKQEPI
&VIIHMRKQEPIWVITVSHYGXMZIPMJIWTERMR]IEVW
SJFVIIHMRKQEPIWJSVERRYEPWXYHVITPEGIQIRX
SJGSPSYVIHEPTEGEW
&MVXLVEXI
1SVXEPMX]VEXISJJWTVMRK
1SVXEPMX]VEXIEHYPXW
SJQEPIWSYXSJSJJWTVMRKFSVR
SJEHYPXERMQEPW[MXLKIRIXMGFSH]ERHIIGIHIJIGXW
SJERMQEPWMR[LMXIEPTEGETIRTSTYPEXMSR
%ZIVEKIRYQFIVSJ[LMXIEPTEGEWTIVLIVH
1MWGIPPERISYWI\TIRWIWTIVOKTVSGIWWIHFVIMRRYIZSWWSPIW
1EOIYTSJXLI[LMXIEPTEGETSTYPEXMSRFEWIHSRVIGSVHW
3JJWTVMRKQEPIERHJIQEPI
=SYRKEPTEGEW ]IEVW
&VIIHMRKQEPIW
&VIIHMRKJIQEPIW

UHSODFHPHQWSXUSRVHVDUHFDUULHGRXWZLWKLQWKHSURGXFWLRQXQLWVZLWKDQGZLWKRXWUHGXFWLRQ
RIXSWRRIEUHHGLQJPDOHV$VFKHPHEDVHGRQDSDUWLDOUHSURGXFWLYHQXFOHXVZKHUH
UHSURGXFWLYHVSHFLPHQVSURYLGHGRQORDQE\WKHSURGXFWLRQXQLWVDUHPDLQWDLQHGDWDQG
WKHRWKHULVJHQHUDWHGIURPVHOHFWLRQZLWKLQHDFKSURGXFWLRQXQLWDQG$VFKHPHZLWK
D UHSURGXFWLYH VSHFLPHQ QXFOHXV DW D SURSRUWLRQ RI WKUHH IHPDOHV SHU PDOH > DQG
7DEOH@,QERWKVFKHPHVWKHVFHQDULRVZKHUHSURGXFWLYHUHFRUGNHHSLQJZDVFRQGXFWHG
RQPDOHVDQGIHPDOHVZHUHWDNHQLQWRDFFRXQWDVZHOODVWKHVFHQDULRZKHUHSURGXFWLYHDQG
SHGLJUHHUHFRUGNHHSLQJZDVXVHG
7KHQXPEHURIPDOHVIRUSRWHQWLDOVHOHFWLRQSURGXFHGE\WKHEUHHGLQJIHPDOHVIURPWKHVHOHFWLRQ
QXFOHXV ZDV GHWHUPLQHG DFFRUGLQJ WR WKH PHWKRGV GHVFULEHG E\:XU]LQJHU HW DO DV
VKRZQLQ)LJXUH
7KHHYDOXDWLRQRIWKHSURSRVHGVHOHFWLRQVFKHPHVFRQVLGHULQJIRUHDFKRIWKHPWKHIRUPV
RILGHQWLI\LQJWKHEHVWDQLPDOVDFFRUGLQJWRWKHW\SHRILQIRUPDWLRQDQGHYDOXDWLRQDSSOLHG
,3 VHOHFWLRQXVLQJWKHVSHFLPHQVLQGLYLGXDOSHUIRUPDQFH,3%/83 VHOHFWLRQXVLQJWKH
%/83PHWKRGZLWKLQIRUPDWLRQRQWKHVSHFLPHQVSHUIRUPDQFHDQG,3%/836 VHOHFWLRQ
XVLQJWKH%/83PHWKRGZLWKLQIRUPDWLRQRQWKHVSHFLPHQDQGUHODWHGVSHFLPHQVHYDOXDWHGDQG
XQGHUOHYHOVRIJHQHWLFFRUUHODWLRQEHWZHHQ8):DQG)'0ORZ PHGLXP DQG
KLJK ZDVSHUIRUPHGLQWHUPVRIJHQHWLFSURJUHVVDQGWKHLQEUHHGLQJFRHIFLHQWWKRVH
HVWLPDWHGXVLQJWKH6HO$FWLRQSURJUDPPH5XWWHQDQG%LMPDIRUZKLFKHVWLPDWHGJHQHWLF
SDUDPHWHUVZHUHXVHGLQWKLVVWXG\HFRQRPLFZHLJKWLQJSKHQRW\SLFYDULDQFHDQGSKHQRW\SLF
FRUUHODWLRQDQGJHQHWLFKHULWDELOLW\DQGFRUUHODWLRQDVREWDLQHGE\*XWLpUUH]HWDOZKLFK
DUHVKRZQLQ7DEOH

&VIIHMRKERHKIRIXMGW
8EFPI7IPIGXMSRWGLIQIWERHWGIREVMSWGSRWMHIVIHMRXIVQWSJLIVHWQEPIWWIPIGXIHERHQEPIWSRPSER
7GLIQIW
2SSJ 2SSJWXYHW
LIVHW RIIHIHJSV
QEXMRK
&VIIHMRKWTIGMQIRRYGPIYW
7GIREVMS

6IKYPEVLERHPMRKSJFVIIHMRKWTIGMQIRW
7GIREVMS

+SSHLERHPMRKSJFVIIHMRKWTIGMQIRW
7GIREVMS

%VXMGMEPMRWIQMREXMSR
&VIIHMRKWTIGMQIRRYGPIYWERHJEVQIVWLIVHW
7GIREVMS

&VIIHMRKWTIGMQIRWRYGPIYW
*EVQIVWLIVHW

*EVQIVWLIVHWSRP]
7GIREVMS

;MXLSYXVIHYGXMSRSJFVIIHMRKQEPIW
7GIREVMS

;MXLE VIHYGXMSRSJFVIIHMRKQEPIW
2SSJWXYHW 4IVGIRXEKISJ
WXYHWWIPIGXIH
RIIHIHEW
VITPEGIQIRXW
TIV]IEV

IHPDOHVIRUPDWLQJ
ELUWKV
RIIVSULQJV
RIIVSULQJGHDWKV
\RXQJDOSDFDV
\RXQJDOSDFDGHDWKV
DGXOWV
OHIWRXWGXHWRFRQJHQLWDOSUREOHPVDQGIOHHFHFRORXU
DGXOWVDSWIRUEUHHGLQJ
PDOHVDQGIHPDOHV
PDOHVLQJRRGEUHHGLQJVWDWHWREHVHOHFWHG
*MKYVI7GEPMRKXSRHQEPIWJSVWIPIGXMSR

&VIIHMRKERHKIRIXMGW
8EFPI4EVEQIXIVWETTPMIHXSHIXIVQMRIKIRIXMGTVSKVIWW
4EVEQIXIVW
*(1
QMG
9*;
K
4LIRSX]TMGZEVMERGI
)GSRSQMGZEPYIE
6ITIEXEFMPMX]
,IVMXEFMPMX]TLIRSX]TMG
KIRIXMGLIVMXEFMPMX]
6GSQQSRIRZMVSRQIRX

+IRIXMGTEVEQIXIVWXEOIRJVSQ+YXMqVVIÎXEP
4LIRSX]TMGTEVEQIXIVWSFXEMRIHMRXLMWWXYH]
4EVEQIXIVWXEOIRJVSQ5YMWTIIXEPE
4VSTSWIHWIPIGXMSRWGLIQIW
6L[VHOHFWLRQVWUDWHJLHVZHUHSURSRVHGEDVHGRQWKHIDUPHUVSDUWLFLSDWLRQDQGWKHQXPEHURI
EUHHGLQJPDOHVQHHGHGIRUPDWLQJEHDULQJLQPLQGWKHOHYHOVRIJHQHWLFFRUUHODWLRQEHWZHHQ
8):DQG)'0ZLWKLQDV\VWHPZKHUHPRVWDOSDFDIDUPHUVHPSOR\VXEMHFWLYHUHSODFHPHQW
VHOHFWLRQFULWHULDZLWKLQWKHLUKHUGVZLWKDOLPLWHGH[FKDQJHDFURVVKHUGVRZQHGE\GLIIHUHQW
IDUPHUV7KLVODFNRIFRQWURORIJHQHWLFRZDFURVVKHUGVDQGWKHVPDOOVL]HRIWKHKHUGVZLWKDQ
DYHUDJHDQLPDOVFRXOGKLQGHUHIIHFWLYHVHOHFWLRQZLWKLQWKHIDUPHUVKHUG7KHVHVHOHFWLRQ
VFKHPHVRUVWUDWHJLHVFDQEHLPSOHPHQWHGXQGHUDQSURSRVHG,PSURYHPHQW3ODQZKLFKDLPVWR
PHHWWKHVHOHFWLRQREMHFWLYHVRITXDOLW\DQGTXDQWLW\LPSURYHPHQWDQGZLWKWKHDJJUHJDWHJHQHWLF
YDOXHVHOHFWLRQFULWHULD
$OWKRXJKLWKDVRIWHQEHHQVXJJHVWHGWKDWGHYHORSLQJFRXQWULHVZRXOGEHQHWIURPWKHFHQWUDOLVHG
QXFOHXV VHOHFWLRQ VFKHPH *L]DZ HW DO WKLV KDV QRW ZRUNHG JLYHQ WKH FRQGLWLRQV LQ
+XDQFDYHOLFDVLQFHPDQ\SURJUDPPHVGLGZRUNZKLOHWKHUHZDVQDQFLDODQGWHFKQLFDOVXSSRUW
EXW XQIRUWXQDWHO\ WKH\ VXFFXPEHG ZLWKRXW WKH LQYROYHPHQW DQG FRPPLWPHQW RI WKH DOSDFD
IDUPHUVFDXVLQJEUHHGHUVWREHH[FOXGHG*L]DZHWDO$QRWKHUDOWHUQDWLYHLVWKHVFKHPH
EDVHGRQGLVSHUVHGQXFOHLZKLFKZDVFDUULHGRXWE\WKH352&$68'6RXWK$PHULFDQ&DPHOLG
,PSURYHPHQW3URJUDPPHIURPWKH1DWLRQDO8QLYHUVLW\RI+XDQFDYHOLFD81+LQ6SDQLVK
KDYLQJVHOHFWHGIDUPHUVZLWKWKHLUUHVSHFWLYHKHUGV+RZHYHUWKLVSURJUDPPHKDVQRWDFKLHYHG
JRRGUHVXOWVPDLQO\GXHWRWKHODFNRISURSHUWUDLQLQJRIWKHIDUPHUVDQGWKHLUODFNRIZLOOLQJQHVV
WRNHHSSURGXFWLYHDQGSHGLJUHHUHFRUGVDVZHOODVGHFLHQWLQIUDVWUXFWXUHDQGORJLVWLFV
$OWKRXJKWKLVGLVSHUVHGQXFOHLV\VWHPIRVWHUVJUHDWHULQYROYHPHQWLQVRPHEUHHGHUFRPPXQLWLHV
ZKLFK LV SURSRVHG IRU RYLQH VSHFLHV E\ *L]DZ HW DO DQG LQ OODPDV E\:XU]LQJHU HW
DOLWVHHPVWKDWLQRXUFDVHLWPLJKWEHDOLWWOHWRRDPELWLRXVGXHWRWKHVKRUWDJHRI
WHFKQLFDOH[SHUWVLQIUDVWUXFWXUHDQGDJUHDWHUZLOOLQJQHVVWRH[FKDQJHPDOHVDFURVVKHUGVRZQHG
E\GLIIHUHQWIDUPHUV
%DVHGRQVXFKFRQVLGHUDWLRQVSHUKDSVDPL[HGV\VWHPPD\EHDJRRGDOWHUQDWLYHVLQFHLWFRXOG
KDYH WKH DGYDQWDJHV RI WKH FHQWUDOLVHG QXFOHXV DQG GLVSHUVHG QXFOHXV VFKHPHV ,Q WKLV ZD\
WKHLVVXHRIFKRRVLQJIDUPHUVZKRPD\EHPRUHLQYROYHGLQNHHSLQJSURGXFWLYHDQGSHGLJUHH

&VIIHMRKERHKIRIXMGW
UHFRUGVFRXOGEHUHVROYHGVLQFHLQVWHDGRIQHHGLQJIDUPHUVWKHVFKHPHZRXOGQHHGRQO\
RUZKLFKLVSODXVLEOHLQWKHSRSXODWLRQXQGHUVWXG\,QDGGLWLRQWKHWHFKQLFDODQGSURGXFWLYH
SHUIRUPDQFHFRXOGEHSHUIHFWO\FRPSOHPHQWHGE\WKHLQYROYHPHQWRIWKH81+ZKHUHWKHUHDUH
UHVHDUFKJURXSVDEOHWRFRQGXFWJHQHWLFHYDOXDWLRQV
,QDQ\FDVHLQRUGHUIRUDJHQHWLFLPSURYHPHQWSURJUDPPHWREHJXLGHGLQWKHULJKWGLUHFWLRQ
DVVWDWHGE\:XU]LQJHUHWDOWKHIDUPHUVPXVWEHDZDUHRIWKHDGYDQWDJHVDQGEHQHWV
RIEHLQJDPHPEHURIDJHQHWLFLPSURYHPHQWRUJDQLVDWLRQVLQFHRWKHUZLVHWKH\ZRXOGQRWEH
LQWHUHVWHGLQEHFRPLQJDFWLYHO\LQYROYHG
0RUHRYHU DOO WKH VHOHFWLRQ VFKHPHV SURSRVHG PXVW EH LPSOHPHQWHG IROORZLQJ DQ DSSURDFK
WKDWLQFRUSRUDWHVDVSHFWVVXFKDVKHDOWKFDUHVKHDULQJSUDFWLFHVDQGEUHVDOHV7KHVHVPDOO
LQFHQWLYHVZLOOHQFRXUDJHDOSDFDIDUPHUVWRPDLQWDLQWKHLULQWHUHVWLQWKHLPSURYHPHQWSODQ
DOORZLQJIRUPRUHWLPHDQGPRQH\WREHLQYHVWHG:XU]LQJHUHWDO+RZHYHUWKHPRVW
LPSRUWDQWDQGFULWLFDODVSHFWRIDOOWKHVFHQDULRVSURSRVHGZKHUHWKHQHHGWRFRPELQHKHUGV
LVLQFOXGHGPDLQO\WKURXJKWKHPDOHVIRUWKHSXUSRVHRIKHUGFRPSDULVRQ0XHOOHULV
WKHSRVVLELOLW\RIWUDQVPLWWLQJLOOQHVVHVDQGSDUDVLWHVZKLFKYDULHVDFURVVVWUDWHJLHV7KHUHIRUH
WKHLQYROYHPHQWRIIDUPHUVLQSHUIRUPLQJUHJXODUKHDOWKWUHDWPHQWVZLOOEHHVVHQWLDOZKLFKZLOO
PHDQDQDGGLWLRQDOFRVWVRPHWKLQJWKDWPD\EHUHJDUGHGDVQHJDWLYH\HWPDQGDWRU\:XU]LQJHU
HWDO
)ZEPYEXMSRSJXLIWIPIGXMSRWGLIQIW
7DEOHVKRZVWKHH[SHFWHGJHQHWLFJDLQVREWDLQHGIRU8):LQJDQG)'0LQPZKHQXVLQJ
DQDJJUHJDWHJHQHWLFLQGH[DVVHOHFWLRQFULWHULDRQWKHGLIIHUHQWVHOHFWLRQVFKHPHVSURSRVHGDQG
RQWKUHHGLIIHUHQWOHYHOVRIK\SRWKHWLFDOJHQHWLFFRUUHODWLRQEHWZHHQ8):DQG)'0
DQG:KHQWKHVHOHFWLRQLVEDVHGRQLQGLYLGXDOSHUIRUPDQFHRQO\WKHJHQHWLFJDLQIRU8):
ZDVQHJDWLYHZKLOHWKHJHQHWLFFRUUHODWLRQEHWZHHQWUDLWVZDVDVVXPHGWREHKLJKWKLVLV
LPSURYHGZKHQWKHSHUIRUPDQFHIURPUHODWLYHVLVDOVRLQFOXGHG)RUWKHRWKHUDVVXPHGJHQHWLF
FRUUHODWLRQJHQHWLFJDLQUDQJHGIURPWR+RZHYHUZKHQHYDOXDWLQJWKHJHQHWLF
SURJUHVVRI)'0LWGHFUHDVHVLQDOOVFHQDULRVZLWKYDULRXVW\SHVRILQIRUPDWLRQDQGHYDOXDWLRQ
DVZHOODVGLIIHUHQWOHYHOVRIU8):)'0EHWZHHQDUDQJHRIDQGPZKLFKLVFRQYHQLHQW
IRUWKHIDUPHUVWKHVHFWRUDQGFRQVXPHUV
2YHUDOOFRPPRQQXFOHXVVFKHPHV6FHQDULRVDQGDQGWKHPL[HGVFKHPHFHQWUDOLVHG
DQGFRPPRQQXFOHLVKRZWKHORZHVWJHQHWLFDQGHFRQRPLFJDLQVZKHQFRPSDUHGZLWKWKH
FHQWUDOLVHG QXFOHXV VFKHPH 6FHQDULR DQG ZKLFK LV FRQFXUUHQW ZLWK ZKDW ZDV
GLVFXVVHGIRURYLQHVSHFLPHQVDQGOODPDVE\/HZLVDQG6LPP.RVJH\HWDO
.RVJH\DQG2NH\R:XU]LQJHUHWDODQG*L]DZHWDO:LWKUHJDUGWR
6FHQDULR6FHQDULRLQFUHDVHVWKHJHQHWLFJDLQVIRU8):DQG)'0DVZHOODVRYHUDOO
HFRQRPLFJDLQVE\DSSUR[LPDWHO\FRPSDUHGWR6FHQDULRRYHU6FHQDULR
RYHU6FHQDULRDQGRYHU6FHQDULR7KLVSDWWHUQVOLJKWO\GLIIHUVZKHQJHQHWLF
FRUUHODWLRQEHWZHHQWUDLWVLVDVVXPHGWREHKLJK
6HOHFWLRQEDVHGRQWKHLQGLYLGXDOSHUIRUPDQFH,3RU,3SOXV%/83HYDOXDWLRQ,3%/83RU
,3%/83SOXVLQIRUPDWLRQRIUHODWLYHV,3%/836DVVXPLQJDORZJHQHWLFFRUUHODWLRQ
EHWZHHQWUDLWVWKHWRWDOUHVSRQVHZDVUHVSHFWLYHO\DQGKLJKHUWKDQZKHQDKLJK
JHQHWLFFRUUHODWLRQZDVH[SHFWHGEHWZHHQWKHP:KHQFRPSDUHGWKHUHVXOWVEHWZHHQ
WKHPHGLXPDQGWKHKLJKDVVXPHGJHQHWLFFRUUHODWLRQFDXVHGWKHWRWDOUHVSRQVHWR
LQFUHDVHE\DQGLQWKHODVWRQH

&VIIHMRKERHKIRIXMGW
8EFPI)WXMQEXIHKIRIXMGKEMRWTIVWIPIGXMSRWGLIQIWGIREVMSERHPIZIPWSJKIRIXMGGSVVIPEXMSRFIX[IIR
YR[EWLIHIIGI[IMKLX9*; ERHFVIHMEQIXIV*(1
:EVMEFPI
-RJSVQEXMSR +IRIXMGGSVVIPEXMSR!
7GIREVMS 7GIREVMS 7GIREVMS 7GIREVMS 7GIREVMS 7GIREVMS

9*;KV
-4
-4&
-4&7
*(1Q
-4
-4&
-4&7
8SXEPVIWTSRWI7 -4
-4&
-4&7

+IRIXMGGSVVIPEXMSR!
9*;KV
-4
-4&
-4&7
*(1Q
-4
-4&
-4&7
8SXEPVIWTSRWI7 -4
-4&
-4&7

+IRIXMGGSVVIPEXMSR!
9*;KV
-4
-4&
-4&7
*(1Q
-4
-4&
-4&7
8SXEPVIWTSRWI7 -4
-4&
-4&7

8]TISJMRJSVQEXMSR-4!SRP][MXLMRJSVQEXMSRSRXLIWTIGMQIRWMRHMZMHYEPTIVJSVQERGI-4&!
[MXL-4ERHERIZEPYEXMSRMWGEVVMIHSYXXLVSYKL&094-4&7![MXL-4&TPYWVIPEXIHWTIGMQIRW
MRJSVQEXMSR
7GIREVMSW TVSTSWIH FVIIHMRK WTIGMQIRW WIPIGXMSR RYGPIYW WGLIQI QEPI JIQEPIW
FVIIHMRKWTIGMQIRWWIPIGXMSRRYGPIYWWGLIQIQEPIJIQEPIW FVIIHMRKWTIGMQIRWWIPIGXMSR
RYGPIYWWGLIQIQEPIJIQEPIW QM\IHGSQQSRWIPIGXMSRWGLIQIMRXIVERHMRXVELIVH ERH
[MXLVITVSHYGXMZIWTIGMQIRWRYGPIYWHMWTIVWIGSQQSRWIPIGXMSRWGLIQI QEPIWTIVLIVH
GSQQSRWIPIGXMSRWGLIQI QEPIW

&VIIHMRKERHKIRIXMGW
2XUJHQHWLFSURJUHVVHVWLPDWHVIRU8):XQGHUGLIIHUHQWVHOHFWLRQVWUDWHJ\VFHQDULRVW\SHRI
LQIRUPDWLRQDQGJHQHWLFFRUUHODWLRQIDOOZLWKLQWKHUDQJHUHSRUWHGRQDOSDFDVE\/HyQ9HODUGH
DQG*XHUUHUR7DLSHHWDODQG4XLVSHHWDODZKREDVHGRQVLPXODWLRQ
VWXGLHVHVWLPDWHSURJUHVVRIDQGJU\HDUUHVSHFWLYHO\FRQFHUQLQJOODPDV:XU]LQJHUHW
DOUHSRUWVSURJUHVVEHWZHHQDQGJU\HDU+RZHYHURXUUHVXOWVDUHKLJKHUWKDQWKRVH
UHSRUWHGRQDOSDFDVE\3RQ]RQL4XLVSHHWDODQG4XLVSHHWDO7KHHYDOXDWLRQ
RI WKH SURSRVHG VHOHFWLRQ VFKHPHV ZDV FRQGXFWHG E\ FRQVLGHULQJ WKUHH GLIIHUHQW VRXUFHV RI
LQIRUPDWLRQ,3VHOHFWLRQXVLQJWKHLQGLYLGXDOSHUIRUPDQFH,3%/83XVLQJWKH%/83PHWKRG
ZLWK,3DQG,3%/836XVLQJWKH,3%/83PHWKRGLQFOXGLQJLQIRUPDWLRQIURPUHODWLYHV
7KUHHGLIIHUHQWOHYHOVRIJHQHWLFFRUUHODWLRQEHWZHHQ8):DQG)'0ORZPHGLXP
DQGKLJKZHUHUHFRUGHG3HUIRUPDQFHRIVHOHFWLRQZDVVWXGLHGLQWHUPVRIJHQHWLFSURJUHVV
DQGLQEUHHGLQJHYROXWLRQDQGZDVFRPSXWHGXVLQJWKH6HO$FWLRQSURJUDPPH5XWWHQDQG%LMPD
2WKHUJHQHWLFSDUDPHWHUVXVHGGXULQJWKLVVWXG\VXFKDVHFRQRPLFZHLJKWVSKHQRW\SLF
YDULDQFHVSKHQRW\SLFFRUUHODWLRQVKHULWDELOLW\DQGJHQHWLFFRUUHODWLRQVZHUHWKRVHREWDLQHGE\
4XLVSHHWDORUE\*XWLpUUH]HWDODVVKRZQLQ7DEOH7KHHVWLPDWHGJHQHWLF
SURJUHVVZDVDOVRORZHUWKDQWKDWUHSRUWHGE\0XHOOHULQRYLQHVSHFLPHQVZKRHVWLPDWHV
JDLQVRIJUDOWKRXJKLWVKRXOGEHQRWHGWKDWWKLVVWXG\ZDVFDUULHGRXWRQ0HULQRVKHHS7KH
JHQHWLFJDLQVDFKLHYHGIRU)'0LQPDQGWRWDOJDLQVLQ6DSSHDUWREHFRQFXUUHQWZLWKZKDW
ZDVUHSRUWHGRQDOSDFDVE\3RQ]RQL/HyQ9HODUGHDQG*XHUUHUR4XLVSHHWDO
D7DLSHHWDODQG4XLVSHHWDOD,WLVDOVRVLPLODUWRWKHQGLQJVSUHVHQWHG
E\:XU]LQJHUHWDORQOODPDVDQG0XHOOHURQRYLQHZRRO
,IZHFRPSDUHWKHGLIIHUHQWVRXUFHVRILQIRUPDWLRQXVHGIRUJHQHWLFHYDOXDWLRQZHPD\REVHUYH
WKDWZLWKUHJDUGWRVHOHFWLRQEDVHGRQ,3WRWDOJDLQVLQFUHDVHE\ZLWK,3%6ZKHUHDV
ZLWK,3%WKHLQFUHDVHLVDSSUR[LPDWHO\6XFKLQFUHDVHVEHFRPHJUHDWHUZKHQWKHJHQHWLF
FRUUHODWLRQVLQFUHDVHEHFRPLQJDVKLJKDVDQGUHVSHFWLYHO\LPSURYLQJ,3%6DQG
,3%ZKHQDFRUUHODWLRQLVVLPXODWHG7KHVHUHVXOWVVKRZWKHLPSRUWDQFHRISHGLJUHHDQG
SURGXFWLRQ LQIRUPDWLRQ .RVJH\ HW DO *L]DZ HW DO *L]DZ HW DO HYHQ
PRUHVRZKHQKHULWDELOLW\LQVXFKFKDUDFWHUVUDQJHVIURPORZWRPHGLXPZKHUHWKHVSHFLPHQV
SKHQRW\SHLVDSRRUUHHFWLRQRIWKHVSHFLPHQVJHQRW\SH7KHDFWXDOORJLVWLFVDQGLQIUDVWUXFWXUH
XVHGIRUWKLVSURGXFWLRQV\VWHPHVSHFLDOO\LQUHODWLRQWRSHGLJUHHUHJLVWUDWLRQLQYROYHVKLJK
FRVWVDQGWKHUHIRUHWKHV\VWHPUHPDLQVXQGHUUHYLVLRQ*LYHQWKHQGLQJVSUHVHQWHGLQWKLVVWXG\
WKHHIIRUWRILPSURYLQJLWZRXOGEHDGYDQWDQJHRXV
7KHHVWLPDWHGJHQHWLFSURJUHVVVKRZVWKDWDOSDFDVIURPWKHSRSXODWLRQLQ+XDQFDYHOLFDKDYH
WKHSRWHQWLDOWRSURGXFHEUHZKLFKFDQEHLPSURYHGE\XVLQJGLVSHUVHGFRPPRQPL[HGRU
VLQJOHQXFOHXVVFKHPHV+RZHYHUWKHUHLVWKHQHHGWRGHWHUPLQHWKHJHQHWLFSDUDPHWHUVRIWKLV
SRSXODWLRQVLQFHWKLVZLOODOORZIRUEHWWHUVLPXODWLRQVSURSRVHEHWWHUVFKHPHVDQGDOVRYLHZ
ZKLFKLQIRUPDWLRQZLOOEHQHFHVVDU\LQRUGHUWRPD[LPLVHDSSOLFDWLRQV
-RGVIEWIMRXLIMRFVIIHMRKVEXIYRHIVZEVMSYWWIPIGXMSRWGLIQIW
7KHLQEUHHGLQJLQFUHDVHLQWKHVFHQDULRVSURSRVHGLVGLVSOD\HGLQ)LJXUH,WZDVORZHUWKDQLQ
6FHQDULRZKLFKVKRZHGDOWKRXJKLWZDVDOVRORZIRUVFHQDULRVDQGUDQJLQJ
IURPDQG7KHKLJKHVWUDWHZDVVHHQLQVFHQDULRZKLOHUHJXODULQFUHDVHVZHUH
REWDLQHGIRUVFHQDULRVDQG,WZDVDOVRIRXQGWKDWWKHGLIIHUHQWOHYHOVRIJHQHWLFU8):)'0
ORZ PHGLXP DQGKLJK DUHQRWUHODWHGWRWKHLQEUHHGLQJLQFUHDVHVLQFH
RQWKHWKUHHOHYHOVHPSOR\HGORZPHGLXPDQGKLJKWKHLQEUHHGLQJLQWKHGLIIHUHQWVFHQDULRV
DOPRVWGLGQRWYDU\DWDOO

&VIIHMRKERHKIRIXMGW
&RUUHODWLRQ

)[LQFUHDVH

,3
,3%

,3%6

6FHQDULR 6FHQDULR 6FHQDULR 6FHQDULR 6FHQDULR 6FHQDULR

*MKYVI-RFVIIHMRKTIVGIRXEKIMRGVIEWI[MXLMRWIPIGXMSRWGLIQIWERHKIRIXMGGSVVIPEXMSRPIZIPWFIX[IIR
9*;ERH*(1YWMRKZEVMSYWWSYVGIWSJMRJSVQEXMSRERHKIRIXMGIZEPYEXMSR
:LWKUHJDUGWR6FHQDULRLQ6FHQDULRLQEUHHGLQJVKRZHGDIROGLQFUHDVHLQ6FHQDULR
DQIROGLQFUHDVHLQ6FHQDULRDIROGLQFUHDVHDQGLQ6FHQDULRDQGDIROG
LQFUHDVHZKHUHWKHODVWWZRKDYHWKHVDPHLQEUHHGLQJLQFUHDVHUDWH7KHKLJKHVWLQEUHHGLQJ
UDWHV FDQ EH VHHQ LQ VFHQDULRV ZKHUH WKH KLJKHVW QXPEHU RI IHPDOHV SHU EUHHGLQJ PDOH LV
SUHVHQWHGUHVXOWLQJLQWKHODUJHVWUDWHQHDULQJLQWKHVFKHPH6FHQDULRZKHUHDUWLFLDO
LQVHPLQDWLRQLVXVHGLQVXFKDZD\WKDWIRUIHPDOHVRQO\PDOHZRXOGEHQHHGHG+RZHYHU
WKHDGYDQWDJHLVWKDWWKLVZD\IXUWKHUJHQHWLFSURJUHVVFDQEHDFKLHYHGZKLFKFDQEHVXVWDLQHG
E\UHQHZLQJPDOHVFRPLQJIURPRWKHUDOSDFDSRSXODWLRQVDYDLODEOHLQ3HUX3XQR&X]FRDQG
$UHTXLSDDPRQJRWKHUV
7KHLQEUHHGLQJLQFUHDVHVIRXQGDUHUDWKHUVLPLODUWRWKRVHUHSRUWHGRQOODPDVE\:XU]LQJHUHW
DODQGRQVKHHSE\/HZLVDQG6LPPDQG*L]DZHWDO,QDQ\FDVHWKH
LQEUHHGLQJUDWHLQFUHDVHVDUHORZOHVVWKDQZKLFKLVDGYLVDEOHLQRUGHUWRDYRLGHQGRJDPLF
GHSUHVVLRQ/HZLVDQG6LPP
'SRGPYWMSR
,QWHUPVRIWKHEUHHGLQJV\VWHPWREHXVHGLQWKH+XDQFDYHOLFD5HJLRQWKHPL[HGVFKHPHFRXOGEH
DJRRGDOWHUQDWLYHWKXVHQFRXUDJLQJWKHIDUPHUVLQYROYHPHQWDQGWKHFRPSOHPHQWDU\LQWHUDFWLRQ
EHWZHHQWHFKQLFDODQGJRYHUQPHQWH[SHUWV5HJDUGLQJJHQHWLFSURJUHVVIRU8):DQG)'0WKH
XVHRILQIRUPDWLRQIURPSHUIRUPDQFHRIUHODWLYHVVHHPVWRFRQVLGHUDEO\LPSURYHWKHORZUHVSRQVH
REWDLQHGZKHQRQO\WKHJHQHWLFYDOXHRIWKHDQLPDOLVXVHGWRFDUU\RXWWKHVHOHFWLRQSURFHVV
,QEUHHGLQJLQFUHDVHVDUHORZOHVVWKDQZKLFKFRXOGSUHYHQWHQGRJDPLFGHSUHVVLRQ
%ORS[PIHKIQIRXW
:HVLQFHUHO\YDOXHWKHQDQFLDOVXSSRUWRIWKH*RYHUQPHQWRI1DYDUUHDQGWKH3XEOLF8QLYHUVLW\
RI1DYDUUH6SDLQWKURXJKWKH3URMHFW,PSURYHPHQWRIWKHHFRQRPLFLQFRPHDQGFRQGLWLRQVRI
OLIHRISRRUIDPLOLHVE\PHDQVRIIRUWLFDWLRQRIFDSDFLWLHVDQGLPSURYHPHQWRI+XDFD\DDOSDFDV
LQWKHKLJK$QGHDQ]RQHRI+XDQFDYHOLFD3HUX

&VIIHMRKERHKIRIXMGW
6IJIVIRGIW
%UHQHV(5.0DGULJDO)3pUH]DQG.9DOODGDUHV(O&OXVWHUGHORV&DPpOLGRVHQ3HU~'LDJQyVWLFR&RPSHWLWLYR
\5HFRPHQGDFLRQHV(VWUDWpJLFDV,QVWLWXWR&HQWURDPHULFDQRGH$YDLODEOHDWKWWSZZZFDIFRPDWWDFKGHIDXOW
&DPHOLGRV3HUXSGI$FFHVVHG0DUFK
*L]DZ6+.RPHQDQG-$0YDQ$UHQNRQN2SWLPDOYLOODJHEUHHGLQJVFKHPHVXQGHUVPDOOKROGHUVKHHSIDUPLQJ
V\VWHPV/LYHVWRFN6FLHQFH
*L]DZ6+.RPHQDQG-$0YDQ$UHQGRQN3DUWLFLSDWRU\GHQLWLRQRIEUHHGLQJREMHFWLYHVDQGVHOHFWLRQ
LQGH[HVIRUVKHHSEUHHGLQJLQWUDGLFLRQDOV\VWHPV/LYHVWRFN6FLHQFH
*XWLpUUH]-3)*R\DFKH$%XUJRVDQG,&HUYDQWHV*HQHWLFDQDO\VLVRIVL[SURGXFWLRQWUDLWVLQ3HUXYLDQ
DOSDFDV/LYHVWRFN6FLHQFH
.RVJH\,65/%DNHU+0-8GRDQG-$0YDQ$UHQGRQN6XFFHVHVDQGIDLOXUHVRIVPDOOUXPLQDQWEUHHGLQJ
SURJUDPPHVLQWKHWURSLFVDUHYLHZ6PDOO5XPLQDQW5HVHDUFK
.RVJH\,6DQG2NH\R*HQHWLFLPSURYHPHQWRIVPDOOUXPLQDQWVLQORZLQSXWVPDOOKROGHUSURGXFWLRQV\VWHPV
7HFKQLFDODQGLQIUDVWUXFWXUDOLVVXHV6PDOO5XPLQDQW5HVHDUFK
/HZLV50DQG*6LPP6HOHFWLRQVWUDWHJLHVLQVLUHUHIHUHQFLQJVFKHPHVLQVKHHS/LYHVWRFN3URGXFWLRQ6FLHQFH

/HyQ9HODUGH&8DQG-*XHUUHUR,PSURYLQJTXDQWLW\DQGTXDOLW\RI$OSDFDEHUXVLQJVLPXODWLRQPRGHOIRU
EUHHGLQJVWUDWHJLHV$YDLODEOHDWKWWSLQUPFLSFJLDURUJKRPHSXEOLFDWFSESGI$FFHVVHG$SULO
0DVRQ,/DQG9%XYDQHPEUD%UHHGLQJSODQVIRUUXPLQDQWOLYHVWRFNLQWKHWURSLFV)$2$QLPDO3URGXFWLRQDQG
+HDOWK3DSHU)$2QR5RPH,WDO\S
0XHOOHU-35HVSXHVWDVDODVHOHFFLyQHQ0HULQRFRQGLIHUHQWHVSURFHGLPLHQWRV3URF;;;,9&RQJUHVR$UJHQWLQR
GH*HQpWLFD&RPXQLFDFLyQ7pFQLFD%DULORFKH1UR3$
0XHOOHU-3(VWUDWHJLDVSDUDHOPHMRUDPLHQWRGHFDPpOLGRVVXGDPHULFDQR(Q$FWXDOLGDGHVVREUHDGDSWDFLyQ
SURGXFFLyQUHSURGXFFLyQ\PHMRUDJHQpWLFDHQFDPpOLGRV8QLYHUVLGDG1DFLRQDOGH+XDQFDYHOLFD)LUVWHGLWLRQ
+XDQFDYHOLFD3HU~SS
1LHWR/DQG,$OHMRV(VWDGRHFRQyPLFR\SURGXFWLYRGHO&HQWURGH3URGXFFLyQH,QYHVWLJDFLyQGH&DPpOLGRV
6XGDPHULFDQRV/DFKRFF;;,5HXQLyQ&LHQWtFD$QXDO$33$3XQR3HUX
3RQ]RQL5:*HQHWLFLPSURYHPHQWRI$XVWUDOLDQ$OSDFDVSUHVHQWVWDWHDQGSRWHQWLDOGHYHORSPHQWV3URFHHGLQJV
$XVWUDOLDQ$OSDFD$VVRFLDWLRQ
4XLVSH(&0HMRUDPLHQWR*HQpWLFR\0HGLRDPELHQWDOGH$OSDFDVHQOD5HJLyQGH+XDQFDYHOLFD3UR\HFWRGH
,QYHUVLyQ3~EOLFDDQLYHOGH3HUO8QLYHUVLGDG1DFLRQDOGH+XDQFDYHOLFD+XDQFDYHOLFD3HUX
4XLVSH(&/$OIRQVR53DXUFDUDQG+*XLOOpQ3UHGLFFLyQGHUHVSXHVWDDODVHOHFFLyQGHDOSDFDV+XDFD\D
HQ OD 5HJLyQ$OWRDQGLQD GH +XDQFDYHOLFDSURJUHVR JHQHWLFR 3URF GH , &RQJUHVR 1DFLRQDO GH UHSURGXFFLyQ \
0HMRUDPLHQWR*HQpWLFRGH&DPpOLGRV6XGDPHULFDQRV+XDQFDYHOLFD3HUX
4XLVSH(&/$OIRQVR$)ORUHV+*XLOOpQDQG<5DPRVD%DVHVWRDQLPSURYHPHQWSURJUDPRIWKHDOSDFDV
LQKLJKODQGUHJLRQDW+XDQFDYHOLFD3HU~$UFKLYRVGH=RRWHFQLD
4XLVSH(&7&5RGUtJXH]/5,xLJXH]DQG-30XHOOHUE3URGXFFLyQGHEUDGHDOSDFDOODPDYLFXxD\
JXDQDFRHQ6XGDPpULFD$QLPDO*HQHWLF5HVRXUFHV,QIRUPDWLRQ
5XWWHQ0-0DQG3%LMPD6HO$FWLRQPDQXDO:DJHQLQJHQ8QLYHUVLW\:DJHQLQJHQWKH1HWKHUODQGVS
7DLSH+%&iUGHQDVDQG(&4XLVSH3UHGLFFLyQGHSURJUHVRJHQpWLFRSDUDSHVRGHYHOORQVXFLR\PHGLDGH
GLiPHWURGHEUDHQDOSDFDVGHODUD]D+XDFD\DGHFRORUEODQFRHQODUHJLyQGH+XDQFDYHOLFD7KHVLV8QLYHUVLGDG
1DFLRQDOGH+XDQFDYHOLFD+XDQFDYHOLFD3HUXS
:XU]LQJHU0$:LOODP-'HOJDGR01UQEHUJ$9DOOH=iUDWH$$6WHPPHU*8JDUWHDQG-6|ONQHU
'HVLJQRIDYLOODJHEUHHGLQJSURJUDPPHIRUDOODPDSRSXODWLRQLQWKH+LJK$QGHVRI%ROLYLD-RXUQDORI$QLPDO
%UHGLQJDQG*HQHWLFV

&VIIHMRKERHKIRIXMGW
1MXSGLSRHVMEP(2%QX(2% KIRIXMGHMZIVWMX]SJ:MGYKRE

ZMGYKREQIRWEPMWMR&SPMZME
-%DUUHWD9,xLJXH]5-6DUQR%*XWLpUUH]*LODQG--$UUDQ]
'SWR3URGXFFLRQ$QLPDO8QLYHUVLGDGGH/HRQ6SDLQMEDUUHWDSLQWR#\DKRRFRP
,QVWLWXWRGH%LRORJLD0ROHFXODU\%LRWHFQRORJLD806$/D3D]%ROLYLD
'HSDUWPHQWRI%LRORJ\+RIVWUD8QLYHUVLW\+HPSVWHDG1<86$
%FWXVEGX
7KH YLFXxD 9LFXJQD YLFXJQD LV RQH RI WZR ZLOG 6RXWK$PHULFDQ FDPHOLGV 1RZDGD\V LQ
%ROLYLDWKHUHDUHRYHUDQLPDOVUHSUHVHQWLQJRIWKHZRUOGVSRSXODWLRQEUHHGLQJLQ
WKHZLOGDVWKHRQO\PDQDJHPHQWV\VWHP7ZRVXEVSHFLHVRIYLFXxDDUHFXUUHQWO\DFFHSWHGEDVHG
ODUJHO\RQJHQHWLFDQGVL]HGLIIHUHQFHV9LFXJQDYLFXJQDYLFXJQDGLVWULEXWHGLQ$UJHQWLQD&KLOH
DQG6RXWKRI%ROLYLDDQG9LFXJQDYLFXJQDPHQVDOLVGLVVHPLQDWHGLQ3HUXDQG1RUWKRI%ROLYLD
7KHUHDUHIHZVWXGLHVDQDO\VLQJWKHPROHFXODUGLYHUVLW\LQ%ROLYLDQYLFXxDVDQGWKHDLPRIWKLV
ZRUNLVWREHWWHUXQGHUVWDQGWKHJHQHWLFYDULDELOLW\RI9YPHQVDOLVGLVWULEXWHGLQWKLVFRXQWU\
)RUWKLVSXUSRVHDQGEDVHGRQWKH9LFXJQDYPHQVDOLVSXEOLVKHGVHTXHQFHZHDQDO\VHGWKH
FRPSOHWHF\WRFKURPHE&\WEESDQGSDUWLDO'ORRSESUHJLRQVRIPLWRFKRQGULDO
'1$DFURVVDQLPDOVIURPIRXUGLIIHUHQWORFDWLRQVZLWKLQDSURWHFWHGDUHDLQWKHQRUWKRI
%ROLYLD$SROREDPED$WRWDORISRO\PRUSKLFVLWHVZHUHIRXQGLQWKH&\WEJHQH\LHOGLQJ
QLQHGLIIHUHQWKDSORW\SHV,QWKHFDVHRIWKH'ORRSUHJLRQQLQHWHHQSRO\PRUSKLFVLWHVZHUH
GHWHFWHGDQGJURXSHGLQWRWKUHHKDSORW\SHVGLIIHUHQW+DSORW\SHGLYHUVLW\KUHDFKHGLQ
WKH&\WEJHQHDQGLQWKH'ORRSUHJLRQ1XFOHRWLGHGLYHUVLW\UDQJHGIURPLQ
WKH&\WEWRLQWKH'ORRS7KHVHUHVXOWVVKRZWKHQHHGIRUPRQLWRULQJSURJUDPPHVLQ
ZLOGSRSXODWLRQVUHFRYHUHGE\PDVVLYHH[SDQVLRQRIWKHVSHFLHVDQGWKHFRQVWDQWHYDOXDWLRQRI
JHQHWLFYDULDWLRQWRVXSSRUWFRQVHUYDWLRQDQGPDQDJHPHQWSURJUDPPHV
.H\ZRUGVFDPHOLGVYLFXxDPLWRFKRQGULDO'1$JHQHWLFGLYHUVLW\
-RXVSHYGXMSR
7KHYLFXxD9LFXJQDYLFXJQDLVWKHZLOG6RXWK$PHULFDQFDPHOLGZKLFKLVEHVWDGDSWHGWRKLJK
DOWLWXGHHFRV\VWHPV%RQDFLFHWDO,WKDVWKHQHVWZRROLQWKHZRUOGDSSUR[LPDWHO\
PLQGLDPHWHUDQGWKHUHLVJUHDWLQWHUHVWDQGGHPDQGIRULWVXVHDQGH[SORLWDWLRQ.DGZHOOHW
DO
,Q WKH VL[WHHQWK FHQWXU\ WKH WRWDO HVWLPDWHG SRSXODWLRQ RI YLFXxD UHDFKHG WR PLOOLRQ
LQGLYLGXDOV +RZHYHU LQ WKH V DQG DIWHU RYHUH[SORLWDWLRQ WKH YLFXxD ZDV GHFODUHG DQ
HQGDQJHUHGVSHFLHVZLWKWKHQXPEHURILQGLYLGXDOVEHWZHHQDQGDFURVVLWVHQWLUH
UDQJH RI GLVWULEXWLRQ$IWHU WKLV SHULRG WKH VSHFLHV ZDV SURWHFWHG LQ FRXQWULHV ZLWK QDWXUDO
SRSXODWLRQV&RQYHQWLRQIRUWKH&RQVHUYDWLRQDQG0DQDJHPHQWRI9LFXxDRULJLQDOO\VLJQHG
EHWZHHQ3HUXDQG%ROLYLDLQODWHUMRLQHGE\$UJHQWLQD&KLOHDQG(FXDGRU%RQDFLFHW
DO
7KHFXUUHQWJHRJUDSKLFDOGLVWULEXWLRQUDQJHVIURPODWLWXGHV6RXWKWRDQGLWLVIRXQG
RQO\DERYHPHWUHVLQDOWLWXGHRQWKH3HUXYLDQ%ROLYLDQ&KLOHDQDQG$UJHQWLQHDQWUHHOHVV
JUDVVODQGVWHSSHVFDOOHG3XQDDQG$OWLSODQR5HQDXGHDX

&VIIHMRKERHKIRIXMGW
7KHUVWSURWHFWHGDUHDVZHUHWKH3DPSD*DOHUDV5HVHUYHLQ3HUXDQGWKH$QGHDQ)DXQD5HVHUYH
8OOD 8OOD LQ %ROLYLD ZKLFK ZHUH ODWHU MRLQHG E\ RWKHU UHVHUYHV DQG QDWLRQDO SDUNV 7RGD\
YLFXxDPDQDJHPHQWLVFDUULHGRXWLQYDULRXVIRUPV$WRQHH[WUHPHWKHUHLVWKHPDQDJHPHQWLQ
FDSWLYLW\LQ$UJHQWLQD$WWKHRWKHUH[WUHPHOLHVWKHFRPPXQLW\EDVHGPDQDJHPHQWRIYLFXxDV
LQWKHZLOGVXFKDVLQ%ROLYLDZKLFKLVWKHVROHFRXQWU\WRGHFODUHWKDWDOOLWVYLFXxDVUHPDLQ
DVZLOGSRSXODWLRQV3HUXDQG&KLOHVSROLFLHVDUHVLWXDWHGLQWKHPLGGOHZLWKDVWURQJWUHQG
WRZDUGVVKLIWLQJIURPFRPPXQLW\EDVHGPDQDJHPHQWRIYLFXxDVLQWKHZLOGWRVHPLFDSWLYLW\
5HQDXGHDX
2YHUDSHULRGRI\HDUVWKHYLFXxDZDVUHFRYHUHGLQJUHDWQXPEHUVQRZHVWLPDWHGWREH
DSSUR[LPDWHO\ DFURVV WKH KLJKODQGV DQG FHQWUDO KLJKODQGV 1RZDGD\V WKH YLFXxD
SRSXODWLRQKDVDSSUR[LPDWHO\LQGLYLGXDOVLQ(FXDGRULQ&KLOHDQGDURXQG
DQLPDOVLQ$UJHQWLQD7KHOLVWLVIROORZHGE\%ROLYLDZLWKDSRSXODWLRQRIDQGQDOO\3HUX
ZLWKLQGLYLGXDOV&,7(6
7KHUHFRYHU\RIWKHVHSRSXODWLRQVOHGWRWKH&RQYHQWLRQRQ,QWHUQDWLRQDO7UDGHLQ(QGDQJHUHG
6SHFLHVRI)DXQDDQG)ORUD&,7(6ZKLFKDSSURYHGWKHWUDQVIHURIVRPHSRSXODWLRQVZLWKLQ
3HUXDQG&KLOHDOORZLQJLQWHUQDWLRQDOWUDGHLQZRROVKHDUHGIURPOLYHYLFXxDV,QWKHIROORZLQJ
\HDUVWKLVUHJXODWLRQZDVH[WHQGHGWRVRPHRWKHUSRSXODWLRQVRIYLFXxDLQ$UJHQWLQDDQG%ROLYLD
.DGZHOOHWDO
7ZRJHRJUDSKLFVXEVSHFLHVRIWKHYLFXxDDUHUHFRJQLVHGWKHQRUWKHUQ9LFXJQDYLFXJQDPHQVDOLV
DQGWKHVRXWKHUQ9LFXJQDYLFXJQDYLFXJQD7RUUHV7KHDSSUR[LPDWHGLYLGLQJOLQHEHWZHHQ
WKHVHWZRUDFHVLV6RXWKODWLWXGH9YYLFXJQD0ROLQDLVIRXQGLQ%ROLYLD$UJHQWLQD
DQGVRPHUHJLRQVRI&KLOH7KLVVRXWKHUQVXEVSHFLHVLVERWKODUJHUDQGOLJKWHULQFRORXUWKDQWKH
QRUWKHUQW\SH9YPHQVDOLV7KRPDVRFFXUVLQ%ROLYLD3HUXDQG&KLOH7KLVVXEVSHFLHV
LVGDUNHULQFRORXUZKHQFRPSDUHGZLWKWKHVRXWKHUQYLFXxDDQGSRVVHVVHVDZKLWHSHFWRUDOWXIW
WKDWLVDEVHQWLQ9LFXJQDYYLFXJQDLQGLYLGXDOV<DFREDFFLR
%DVHGRQWKHVWXG\RIQXFOHDUJHQHWLFPDUNHUV:KHHOHUHWDOUHSRUWHGORZOHYHOVRI
JHQHWLFGLYHUVLW\ZLWKLQSRSXODWLRQVDQGKLJKOHYHOVEHWZHHQSRSXODWLRQVLQZLOGSRSXODWLRQVRI
ZLOG3HUXYLDQYLFXxD9YPHQVDOLV7KLVLVDW\SLFDOVLWXDWLRQIRUVSHFLHVWKDWKDYHVXIIHUHGD
ERWWOHQHFNLQSRSXODWLRQVL]HDQGDFRQVHTXHQWULVNRIH[WLQFWLRQLQWKHSDVW9LOi6DUQR
HWDOGHVFULEHGORZWRPRGHUDWHJHQHWLFGLYHUVLW\LQ%ROLYLDQDQG&KLOHDQYLFXxDVZLWK
WKHQRUWKHUQ%ROLYLDQSRSXODWLRQEHLQJWKHOHDVWYDULDEOHFRPSDUHGZLWKWKHFHQWUDODQGVRXWKHUQ
%ROLYLDQSRSXODWLRQVLQWHUPHGLDWHOHYHOVDQGWKH&KLOHDQSRSXODWLRQWKHPRVWYDULDEOH$PRUH
H[WHQVLYHVWXG\LQFOXGLQJSRSXODWLRQVIURP3HUX&KLOHDQG$UJHQWLQDUHSRUWHGDKLJKGHJUHH
RIPLWRFKRQGULDOGLYHUVLW\DWWKHKDSORW\SHOHYHODQGORZQXFOHRWLGHGLYHUVLW\LQWKHVSHFLHVDV
DZKROHDQGZLWKLQJURXSV:KHQFRPSDULQJWKHWZRVXEVSHFLHVWKHVRXWKHUQSRSXODWLRQVZHUH
IRXQGWREHPRUHGLYHUVHWKDQWKRVHLQWKHQRUWK0DUtQHWDODVXSSRUWLQJWKHUHVXOWV
GHVFULEHGE\6DUQRHWDO
7RGD\RXUNQRZOHGJHRQWKHJHQHWLFYDULDELOLW\RI%ROLYLDQYLFXxDVLVOLPLWHGWRWKHZRUNRI
6DUQRHWDOZKHUHDOLPLWHGQXPEHURIDQLPDOVIURPVRXWKQRUWKDQGFHQWUDO%ROLYLD
ZHUHDQDO\VHG$OWKRXJKWKHJHRJUDSKLFDOERXQGDULHVIRUWKHWZRYLFXxDVXEVSHFLHVLQ%ROLYLD
DUH XQFOHDU WKHVH DXWKRUV VXJJHVW WKDW 9 Y PHQVDOLV ZRXOG EH IRXQG GLVWULEXWHG PDLQO\ LQ
$10,1$SROREDPEDDQG9YYLFXJQDLQ6RXWK/tSH]7DNLQJLQWRDFFRXQWWKHORZHUOHYHO
RI JHQHWLF GLYHUVLW\ UHSRUWHG IRU WKH QRUWKHUQ YLFXxDV 9 Y PHQVDOLV FRPSDUHG ZLWK WKH
VRXWKHUQSRSXODWLRQV9YYLFXJQD6DUQRHWDO0DUtQHWDODDQGWKHUDSLG
GHPRJUDSKLFH[SDQVLRQVXJJHVWHGIRU9YPHQVDOLV0DUtQHWDOEZHKDYHVWXGLHGWKH
JHQHWLFGLYHUVLW\RIPLWRFKRQGULDO'1$F\WRFKURPHE&\WEDQG'ORRSUHJLRQVLQDYLFXxD

&VIIHMRKERHKIRIXMGW
SRSXODWLRQORFDOLVHGLQ$10,1$SROREDPEDLQQRUWKHUQ%ROLYLD+HQFHWKHDLPRIWKLVVWXG\
ZDVWRGHWHUPLQHZKHWKHUWKHGHJUHHRIJHQHWLFGLYHUVLW\IRUWKLVVWRFNZKLFKLVOLNHO\WREHORQJ
WRWKH9YPHQVDOLVJURXSKDVDFKLHYHGDVLJQLFDQWUHFRYHU\DVZRXOGEHH[SHFWHGEDVHG
RQWKHFRQVHUYDWLRQPHDVXUHVLPSOHPHQWHGVLQFH&RQYHQWLRQIRUWKH&RQVHUYDWLRQDQG
0DQDJHPHQWRI9LFXxD
1EXIVMEPWERHQIXLSHW
7EQTPIGSPPIGXMSRERH(2%I\XVEGXMSR
7KHVWXG\LQFOXGHGDWRWDORI9LFXJQDYPHQVDOLVLQGLYLGXDOVIURP$10,1$SROREDPED
QRUWKHUQUHJLRQRI%ROLYLD6:7KLVUHVHUYHKDVDQHVWLPDWHGSRSXODWLRQRI
YLFXxDVLQDQDUHDRI+D'1&%LGHQWLI\LQJIRXUDUHDVRIKHUGLQJWUDSSLQJ
DQGVKHDULQJ&DxXKXPD+LFKXFROOR+XDFXFKDQLDQG8FKD8FKD$GXOWDQLPDOVZHUHVDPSOHG
DWUDQGRPIURPWKHVHIRXUORFDWLRQV&DxXKXPDQ +LFKXFROORQ +XDFXFKDQLQ DQG
8FKD8FKDQ (DUWLVVXHVDPSOHVZHUHFROOHFWHGIURPWKHDQLPDOVZKHQWKH\ZHUHVKHDUHGDQG
NHSWLQ(DV\%ORRGEXIIHU0XQVRQ*HQRPLF'1$LVRODWLRQZDVSHUIRUPHGIURPWKH
HDUWLVVXHVDPSOHVPPZLWKWKHFRPPHUFLDO'1HDV\7LVVXHNLW4,$*(1IROORZLQJWKH
PDQXIDFWXUHUVLQVWUXFWLRQV$JXDQDFR/DPDJXDQLFRHZDVXVHGDVUHIHUHQFHIRUWKHDQDO\VLV
RIWKH&\WEJHQHZKHUHDVDOODPD/DPDJODPDZDVWKHUHIHUHQFHVDPSOHLQWKHDQDO\VLVRI
WKH'ORRSUHJLRQ
4SP]QIVEWIGLEMRVIEGXMSREQTPMGEXMSR
7KHPLWRFKRQGULDO&\WEESDQGWKH'ORRSUHJLRQESZHUHDPSOLHGE\3&5
XVLQJWKHSULPHUSDLUVGHWDLOHGLQ7DEOHIROORZLQJ0DUtQHWDOE
7KHDPSOLFDWLRQUHDFWLRQZDVSHUIRUPHGLQDWRWDOYROXPHRIOFRQWDLQLQJQJRI'1$;
PDJQHVLXPIUHH3&5EXIIHU$SSOLHG%LRV\VWHPV$%)RVWHU&LW\&$P00J&O
P0G173VP0RIHDFKSULPHUDQG8RI$PSOL7DT*ROG$%7KH3&5SURJUDPPH
8EFPI3PMKSRYGPISXMHIWIUYIRGIWYWIHJSVXLIEQTPMGEXMSRERHWIUYIRGMRKXLIQX(2%VIKMSRWWXYHMIHMR
XLMW[SVOG]XSGLVSQIFKIRIERH(PSSTVIKMSR
2EQISJTVMQIV
7IUYIRGIRYGPISXMHI
QX(2%VIKMSR
0+PY%68-3
,XLV%68-3
0XLV%68-3
,0334+
0
0&)
']X&
0PSST+
,
,
(PSST*
8'8%%''%'+%'8%%8+%'%8
8''88888'++'88%'%%+%''
++8'88+8%%+''+%%%%%++%
%8++%'8+%%8%+'%''88%8+
+++'8%8+8%'8'''%8+%++
'8''+8%+%8%%%+''%'''
88'%%+888'8%++%%+++'+
+8%'8%%%%+%%%%8%8'%8+8'
++888'%'+'++'%8++8+%88
''%+'88'%%88+%888+%'8+'+
8%%%%8'+'''%'%'%'888''
']XF
']XF
(PSST
(PSST
']XF
']XF
']XF
(PSST
(PSST
(PSST
(PSST
4VMQIVWYWIHMRXLI4'6JVEKQIRXEQTPMGEXMSRERHPEXIVJSVWIUYIRGMRK
-RXIVREPTVMQIVWYWIHJSVWIUYIRGMRK

&VIIHMRKERHKIRIXMGW
FRQVLVWHGRIDQLQLWLDOPLQGHQDWXUDWLRQVWHSDW&IROORZHGE\F\FOHVRIVDW&
VDW&DQGVDW&IROORZHGE\DQDOHORQJDWLRQF\FOHRIPLQDW&
7IUYIRGIEREP]WMW
7KH DPSOLHG IUDJPHQWV ZHUH SXULHG ZLWK 8 RI ([R6$3,7 $PHUVKDP %LRVFLHQFHV *(
+HDOWKFDUH E\ LQFXEDWLQJ DW & IRU PLQ IROORZHG E\ DQ HQ]\PH GHDFWLYDWLRQ SKDVH
IRUPLQDW&'LGHR[\VHTXHQFLQJLQERWKGLUHFWLRQVZDVSHUIRUPHGZLWKWKH%LJ'\H
7HUPLQDWRUY&\FOH6HTXHQFLQJ.LW$SSOLHG%LRV\VWHPV)RVWHU&LW\&$XVLQJWKHVDPH
SULPHUV XVHG IRU IUDJPHQW DPSOLFDWLRQ$GGLWLRQDO LQWHUQDO SULPHUV ZKLFK DUH DOVR JLYHQ
LQ7DEOHZHUHGHVLJQHGEDVHGRQWKHUHIHUHQFHVHTXHQFHVIRU9YPHQVDOLVREWDLQHGIURP
*HQ%DQN*HQ%DQN$FF1$<IRU&\WEDQG*HQ%DQN$FF1$<IRU'ORRS
UHJLRQ7KHVHTXHQFLQJUHDFWLRQVLQFOXGHGDQLQLWLDOGHQDWXUDWLRQVWHSRI&IRUPLQDQG
F\FOHVRI&IRUV&IRUVDQG&IRUPLQ7KHSURGXFWVRIWKHVHTXHQFLQJ
UHDFWLRQZHUHSXULHGXVLQJ&OHDQ6(4UHDJHQWVHW$JHQFRXUW%LRVFLHQFH%HFNPDQ&RXOWHU
DQGDQDO\VHGXVLQJDQ$%,'1$6HTXHQFHU$SSOLHG%LRV\VWHPV)RVWHU&LW\&$
(EXEEREP]WIW
8VLQJ6HT6FDSHYVRIWZDUH$SSOLHG%LRV\VWHPV)RVWHU&LW\&$WKHVHTXHQFHVREWDLQHG
IRUWKHDQLPDOVDQDO\VHGZHUHDOLJQHGDQGFRPSDUHGZLWKWKHSXEOLVKHGVHTXHQFHV*HQ%DQN
$FF 1 $< DQG $< IRU &\WE DQG 'ORRS UHJLRQV UHVSHFWLYHO\ WR VHDUFK
IRU DQ\ SRO\PRUSKLVPV LQ WKH VWXGLHG IUDJPHQWV 6HTXHQFHV ZHUH DOLJQHG XVLQJ WKH '1$
DOLJQPHQWVRIWZDUH)OX[XVWHFKQRORJ\DQGZHUHYLVXDOO\FRQUPHG7KHQXPEHU
RISRO\PRUSKLFVLWHV6WKHDYHUDJHQXPEHURIGLIIHUHQFHVEHWZHHQSDLUVRIVHTXHQFHV3
KDSORW\SHGLYHUVLW\KDQGQXFOHRWLGHGLYHUVLW\ZHUHHVWLPDWHGZLWK'QD635R]DV
:HJHQHUDWHGDPHGLDQMRLQLQJQHWZRUNIRUHDFKRIWKHWZRVWXGLHGUHJLRQVXVLQJ1(7:25.
VRIWZDUH%DQGHOWHWDOLQRUGHUWRGLVSOD\WKHUHODWLRQVKLSVDPRQJWKHLGHQWLHG
KDSORW\SHV
6IWYPXW
:H REWDLQHG GDWD IRU WKH FRPSOHWH PLWRFKRQGULDO &\WE JHQH ES DQG SDUWLDO 'ORRS
UHJLRQESIURPDQGLQGLYLGXDOVUHVSHFWLYHO\ZKLFKEHORQJHGWRWKHIRXUORFDOLWLHV
IURPWKH$10,1$SROREDPEDUHVHUYHFRQVLGHUHGLQWKHSUHVHQWVWXG\7KHGLYHUVLW\SDUDPHWHUV
HVWLPDWHGIRUWKHWZRUHJLRQVDUHJLYHQLQ7DEOH%ULH\DOLJQPHQWRIWKHVHTXHQFHVVKRZHG
SRO\PRUSKLFVLWHVDWWKH&\WEJHQHDQGSRO\PRUSKLFVLWHVDWWKH
'ORRSUHJLRQ7KHVHSRO\PRUSKLFVLWHVZHUHJURXSHGLQWRDQGGLIIHUHQWKDSORW\SHVLQWKH
&\WEDQG'ORRSUHJLRQVUHVSHFWLYHO\+DSORW\SHGLYHUVLW\KZDVPXFKORZHUDWWKH'ORRS
UHJLRQWKDQLQWKH&\WEJHQHDVZDVWKHQXFOHRWLGHGLYHUVLW\
IRUWKH'ORRSUHJLRQDQGIRUWKH&\WEJHQH
8EFPI,ETPSX]TIKIRI HMZIVWMX]L ERHRYGPISXMHIHMZIVWMX]/ IWXMQEXIHJSVXLIQX(2%VIKMSRWWXYHMIH
MRXLMW[SVO
']XF
(PSST

*VEKQIRXWMÎFT
,ETPSX]TIW
LWXHHIZ
/WXHHIZ

&VIIHMRKERHKIRIXMGW
7KH DOLJQPHQW RI SRO\PRUSKLF VLWHV LGHQWLHG LQ WKH &\WE DQG 'ORRS UHJLRQV LV VKRZQ LQ
)LJXUHZKHUHWKHIUHTXHQF\REVHUYHGIRUHDFKKDSORW\SHDQGWKHORFDOLWLHVFRUUHVSRQGLQJWR
HDFKLGHQWLHGKDSORW\SHDUHDOVRLQGLFDWHG,QWKH&\WEJHQH)LJXUHDWKHVHJUHJDWLQJVLWHV
ZHUHGLVWULEXWHGLQQLQHGLIIHUHQWKDSORW\SHV7KHPRVWIUHTXHQWKDSORW\SHZDV+
ZKLFKZDVIRXQGLQ&DxXKXPDIROORZHGE\+ LGHQWLHGLQWKHVDPHORFDOLW\)RUWKH
'ORRSUHJLRQ)LJXUHEWKHUHZDVDGRPLQDQWKDSORW\SH+ ZKLFKZDVREVHUYHG
LQDOOORFDOLWLHVZKHUHDVWZRRWKHUKDSORW\SHV+DQG+ZHUHRQO\IRXQGLQRQHRIWKHIRXU
ORFDOLWLHVVWXGLHGDWYHU\ORZIUHTXHQF\ DQG UHVSHFWLYHO\
)RUWKH&\WEJHQHWKHPHGLDQMRLQLQJQHWZRUNFRQVWUXFWHGVKRZVWKHJHQHDORJLFDOUHODWLRQVKLSV
DPRQJWKHKDSORW\SHVFRQQHFWHGWKURXJKDPD[LPXPRIPXWDWLRQDOVWHSV)LJXUHD7KH
PHGLDQMRLQLQJQHWZRUNREWDLQHGIRUWKH'ORRSVHTXHQFHVHVWDEOLVKHVWKHUHODWLRQVKLSDPRQJ
KDSORW\SHVFRQQHFWHGWKURXJKDPD[LPXPRIPXWDWLRQDOVWHSV)LJXUH
(MWGYWWMSR
$QGHDQDQLPDOSRSXODWLRQVOLYHLQRQHRIWKHPRVWH[WUHPHDQGYDULDEOHWRSRJUDSKLFHQYLURQPHQWV
LQWKHZRUOG+HQFHHFRORJLFDOIDFWRUVWRJHWKHUZLWKKLVWRULFIDFWRUVPD\KDYHLQXHQFHGWKH
SDWWHUQVRIYDULDWLRQRIPW'1$VKDSLQJWKHJHQHWLFUHODWLRQVKLSVEHWZHHQWKHFXUUHQWSRSXODWLRQV
:HKDYHDQDO\VHGKHUHPW'1$VHTXHQFHVIURPDYLFXxDSRSXODWLRQORFDOLVHGLQWKH$10,1
$SROREDPED UHVHUYH %HFDXVH RI WKHLU JHRJUDSKLFDO ORFDWLRQ WKHVH DQLPDOV DUH H[SHFWHG WR
EHORQJWRWKH9YPHQVDOLVJURXSRIYLFXxDVZKLFKVKRZVORZHUJHQHWLFGLYHUVLW\OHYHOVWKDQ
WKH9YYLFXJQDJURXSDFFRUGLQJWRSUHYLRXVVWXGLHV6DUQRHWDO0DUtQHWDOD
2YHUDOO RXU DQDO\VHV EDVHG RQ PW'1$ VHTXHQFHV VKRZHG DSSUHFLDEOH JHQHWLF YDULDELOLW\
VHJUHJDWLQJLQWKHYLFXxDSRSXODWLRQDQDO\VHG7KLVYDULDWLRQZDVPXFKKLJKHUIRUWKH&\WE
JHQHK WKDQIRUWKH'ORRSUHJLRQK ZKLFKLV
VXUSULVLQJWDNLQJLQWRDFFRXQWWKDWLQPRVWRIWKHZRUNVVWXG\LQJPW'1$YDULDELOLW\OHYHOVDFURVV
GLIIHUHQWPDPPDOLDQJHQHUDWKH'ORRSUHJLRQLVFRQVLGHUHGDK\SHUYDULDEOHUHJLRQ3HGURVD
*MKYVI%PMKRQIRXSJTSP]QSVTLMGWMXIWMHIRXMIHEGVSWWXLI']XFE ERH(PSSTF VIKMSRWEREP]WIHMRXLMW

WXYH]2YGPISXMHIYQFIVMRKMWFEWIHSR+IR&EROVIJIVIRGIWIUYIRGIW+IR&ERO%GG2%=JSV']XF
KIRIERH+IR&ERO%GG2%=JSV(PSSTVIKMSR 0SGEPMXMIWGSHI'!'EyYLYQE,!,YEGYGLERM-!
,YGLMGSPPSERH9!9GLE9GLE

&VIIHMRKERHKIRIXMGW
+
+

/JXDQLFRH
9YLFXJQD

+

+

+

+

+

+

+

/JODPD

+

+
+
9LFXJQDYLFXJQD
*MKYVI1IHMERNSMRMRKRIX[SVOJSVXLIEREP]WIHZMGYyETSTYPEXMSRFEWIHSRXLI']XFE ERH(PSSTF
LETPSX]TIWMHIRXMIHMRXLITVIWIRXWXYH]8LIWMÎSJRSHIWMWETTVS\MQEXIP]TVSTSVXMSREPXSXLIMVJVIUYIRG]
HWDO$OWHUDQG3DOXPEL*DOWLHUHWDO,QWHUHVWLQJO\0DUtQHWDO

IRXQGDVOLJKWO\KLJKHUK YDULDELOLW\IRUWKH&\WEJHQHWKDQIRUWKH'ORRSUHJLRQ
K LQJXDQDFR/DPDJXDQLFRHWKHRWKHUVSHFLHVRIZLOG6RXWK$PHULFDQFDPHOLGV
)XUWKHUVWXGLHVVKRXOGFODULI\ZKHWKHUWKLVREVHUYDWLRQRFFXUVLQRWKHU6RXWK$PHULFDQFDPHOLGV
RUDOWHUQDWLYHO\LILWLVGXHWRVRPHELDVQRWFRQVLGHUHGLQRXUDQDO\VHV
7KHKDSORW\SHDOLJQPHQWRI&\WEVHTXHQFHVVKRZHGWZRGRPLQDQWKDSORW\SHV+DQG+
ZLWKRQO\RQHPXWDWLRQDOVWHSEHWZHHQWKHPIURPDWRWDORIQLQH,QWKH'ORRSVHTXHQFHZH
IRXQGDVLQJOHGRPLQDQWKDSORW\SH+IURPDWRWDORIWKUHH7KHUHZDVDOVRDVLQJOHPXWDWLRQDO
VWHSRFFXUULQJEHWZHHQWKHGRPLQDQW'ORRSKDSORW\SHDQGWKHWZRRWKHUKDSORW\SHVLGHQWLHG
LQRXUUHVRXUFHSRSXODWLRQ7KHVHREVHUYDWLRQVSUREDEO\LQGLFDWHWKDWWKHYLFXxDSRSXODWLRQV
IRXQGLQ$10,1$SROREDPEDDUHEHLQJVXEMHFWHGWRDUDSLGGHPRJUDSKLFH[SDQVLRQ,QDGGLWLRQ
WKHSUHVHQFHRIDODUJHGRPLQDQWKDSORW\SHSRVVLEO\UHSUHVHQWVDQDQFHVWUDOOLQHDJHVLQFHROGHU
KDSORW\SHVDUHH[SHFWHGWRKDYHDZLGHUJHRJUDSKLFUDQJHDQGIUHTXHQF\7HPSOHWRQHWDO
6DUQRHWDOIRXQGYDULDEOHOHYHOVRIJHQHWLFGLYHUVLW\IRUYLFXxDVVDPSOHGDFURVVQRUWKHUQ
FHQWUDODQGVRXWKHUQ%ROLYLDFRQVLGHULQJDWWKHVDPHWLPHWKUHHFRPELQHGPW'1$VHJPHQWV
LQYROYLQJ &\WE JHQH 'ORRS UHJLRQ DQG 6V7KH QRUWKHUQ YLFXxDV DQDO\VHG LQ WKLV VWXG\
ZKLFKDUHDOVRIURPWKH$10,1$SROREDPEDUHVHUYHVKRZHGQXOOKDSORW\SHDQGQXFOHRWLGH
GLYHUVLW\ZKHUHDVFHQWUDODQGVRXWKHUQYLFXxDVVKRZHGLQFUHDVLQJOHYHOVRIJHQHWLFGLYHUVLW\,Q
JHQHUDOZHKDYHIRXQGKLJKHUOHYHOVRIJHQHWLFGLYHUVLW\DFURVVWKHYLFXxDVORFDOLVHGLQ$10,1
$SROREDPEDDOWKRXJKDGLUHFWFRPSDULVRQRIUHVXOWVLVQRWHDV\7KHREVHUYHGGLIIHUHQFHVDUH
OLNHO\GXHWRWKHODUJHUVDPSOHSRSXODWLRQDQDO\VHGLQWKHFXUUHQWVWXG\,QDGGLWLRQWKHLQKHUHQW
GLIIHUHQFHVLQJHQHWLFYDULDELOLW\DFURVVWKHVWXGLHGUHJLRQVPD\LQXHQFHWKHUHVXOWV,QWKLV
UHJDUGZHREVHUYHGDODUJHYDULDWLRQRIWKHJHQHWLFYDULDELOLW\DFURVVWKHFRPSOHWHVHTXHQFHRIWKH
&\W%JHQHSEZLWKORZYDULDELOLW\LQWKHUVWWKLUGRIWKHJHQH FRQVLGHULQJ
SEZKHQFRPSDUHGZLWKWKHVHFRQGKDOIRIWKHJHQH FRQVLGHULQJSE
ZKHUHDV6DUQRHWDOGRQRWGHWDLOWKHSRVLWLRQRIWKHSEWKDWWKH\VHTXHQFHG
2QWKHRWKHUKDQGZKHQ6DUQRHWDOSUHVHQWWKHMRLQWDQDO\VLVRIQRUWKHUQDQGFHQWUDO
YLFXxDVZLWKLQWKH9YPHQVDOLVJURXSWKHJHQHGLYHUVLW\SDUDPHWHUVREVHUYHGK
VKRZFHUWDLQOHYHOVRIJHQHWLFGLYHUVLW\DQGVLPLODUWRWKRVHREVHUYHGIRU'ORRSLQ

&VIIHMRKERHKIRIXMGW
WKLVSDSHUK ZKHUHDVWKH9YYLFXJQDJURXSVKRZHGDVOLJKWO\KLJKHU

YDULDELOLW\K DOWKRXJKVWLOOORZHUWKDQWKDWREVHUYHGLQWKHUHVRXUFHSRSXODWLRQ
DQDO\VHGKHUHK 7KHMRLQWDQDO\VLVRIWKH&\WE'ORRSDQGVUHJLRQV
SUHVHQWHGE\6DUQRHWDOFDQDOVRPDNHLWGLIFXOWWRFRPSDUHWKHVHWZRVWXGLHV
7KH JHQHWLF YDULDELOLW\ RI WKH 'ORRS UHJLRQ UHSRUWHG LQ 9Y PHQVDOLV YLFXxDV K
IURP3HU~DQG&KLOH0DULQHWDOLVKLJKHUWKDQWKDWUHSRUWHGKHUHIRUWKHVDPH
JHQRPLFUHJLRQK ,QWKLVFDVHLWVHHPVWKDWWKHODUJHUQXPEHURILQGLYLGXDOV
Q DQDO\VHGPD\XQGHUOLHWKHKLJKHUJHQHWLFGLYHUVLW\REVHUYHGE\0DUtQHWDOD
+HQFHWRLQFUHDVHRXUNQRZOHGJHRIWKHJHQHWLFGLYHUVLW\RI%ROLYLDQYLFXxDVDQGFRPSDUHWKHP
ZLWKRWKHUSRSXODWLRQVIXUWKHUUHVHDUFKVWXGLHVVKRXOGEHIRFXVHGRQODUJHUSRSXODWLRQVL]HV
LQYROYLQJLISRVVLEOHERWKJHRJUDSKLFDOYLFXxDVJURXSV9YPHQVDOLVDQG9YYLFXJQD7KLV
FRXOGKHOSWRFRQUPDFOHDUJHQHWLFGLIIHUHQWLDWLRQEHWZHHQWKHWZRVXEVSHFLHVDQGWKHORZHU
YDULDELOLW\OHYHOVUHSRUWHGIRU9YPHQVDOLVLQDOOUHJLRQVFRXQWULHVDQGPDQDJHPHQWXQLWVVWXGLHG
6DUQRHWDO0DUtQHWDOD0RUHRYHUDQDO\VLVRIQXFOHDUPLFURVDWHOOLWHORFLFRXOG
LQFUHDVHWKHUHVROXWLRQRIWKHJHQHWLFGLIIHUHQWLDWLRQWKDWH[LVWVEHWZHHQWKHVHWZRVXEVSHFLHV
'SRGPYWMSR
7KH OHYHOV RI JHQHWLF GLYHUVLW\ DFKLHYHG LQ WKH YLFXxD SRSXODWLRQV OLYLQJ LQ WKH $10,1
$SROREDPEDUHVHUYHDUHVLJQLFDQWFRQVLGHULQJWKHUHPDUNDEOHLQFUHDVHLQWKHSRSXODWLRQRIWKLV
VSHFLHVLQWKLVUHJLRQGXULQJWKHODVW\HDUVIURPLQGLYLGXDOVLQWRDWSUHVHQW$VD
FRQFOXGLQJUHPDUNDQGEDVHGRQWKHSUHOLPLQDU\UHVXOWVSUHVHQWHGKHUHLWVHHPVWKDWWKHDQDO\VLV
RIWKH&\WEJHQHHVSHFLDOO\WKHODVWUHJLRQRILWVVHTXHQFHFRXOGEHDPRUHXVHIXOWRROWRDVVHVV
WKHJHQHWLFYDULDELOLW\RIQHLJKERXULQJYLFXxDSRSXODWLRQVWKDQWKHDQDO\VLVRIWKH'ORRSUHJLRQ
%GORS[PIHKIQIRXW
:H JUDWHIXOO\ DFNQRZOHGJH WKH QDQFLDO VXSSRUW UHFHLYHG IURP WKH $(&,' E\ SURMHFWV
$DQG$-XOLD%DUUHWDVVFKRODUVLSLVSURYLGHGE\0$(&$(&,'
6IJIVIRGIW
$OWHU6(DQG653DOXPEL&RPSDULQJHYROXWLRQDU\SDWWHUQVDQGYDULDELOLW\LQWKHPLWRFKRQGULDO&RQWURO5HJLRQ
DQG&\WKRFURPHELQWKUHHVSHFLHVRI%DOHHQ:KDOHV-RXUQDORI0ROHFXODU(YROXWLRQ
%DQGHOW+-3)RUVWHUDQG$5|KO0HGLDQMRLQLQJQHWZRUNVIRULQIHUULQJLQWUDVSHFLFSK\ORJHQLHV0ROHFXODU
%LRORJ\DQG(YROXWLRQ
%RQDFLF & ' 0DFGRQDOG - *DOD] DQG 5 6LEO\ 'HQVLW\ GHSHQGHQFH LQ WKH FDPHOLG9LFXJQD YLFXJQD WKH
UHFRYHU\RIDSURWHFWHGSRSXODWLRQLQ&KLOH2U\[
)OX[XVWHFKQRORJ\'1$$OLJQPHQW6RIWZDUH$YDLODEOHDWKWWSZZZX[XVHQJLQHHULQJFRP
*DOWLHU1%1DEKRO]6*OpPLQDQG*''+XUVW0LWRFKRQGULDO'1$DVDPDUNHURIPROHFXODUGLYHUVLW\D
UHDSSUDLVDO0ROHFXODU(FRORJ\
&,7(6&RQYHQWLRQRQ,QWHUQDWLRQDO7UDGHLQ(QGDJHUHG6SHFLHV3URSRVDOVIRUDPHQGPHQWRI$SSHQGLFHV,DQG
,,RI&,7(6FRQYHQWLRQ$YDLODEOHDWKWWSZZZFLWHVRUJHQJFRSSURS(3SGI
.DGZHOO00)HUQiQGH]+)6WDQOH\5%DOGL-&:KHHOHU55RVDGLRDQG0:%UXIRUG*HQHWLFDQDO\VLV
UHYHDOVWKHZLOGDQFHVWRUVRIWKHOODPDDQGDOSDFD3URFHHGLQJVRIWKH5R\DO6RFLHW\RI/RQGRQ%
0DULQ-&&6&DVH\0.DGZHOO.<D\D'+RFHV-2OD]DEDO55RVDULR-5RGULJXH]$6SRWRUQR0:%UXIRUG
DQG-&:KHHOHUD0LWRFKRQGULDOSK\ORJHRJUDSK\DQGGHPRJUDSKLFKLVWRU\RIWKHYLFXxDLPSOLFDWLRQVIRU
FRQVHUYDWLRQ+HUHGLW\

&VIIHMRKERHKIRIXMGW
0DUtQ-&%=DSDWD%$*RQ]iOH]&%RQDFLF-&:KHHOHU&&DVH\0:%UXIRUG5(3DOPD(3RXOLQ0$
$OOLHQGHDQG(6SRWRUQRE6LVWHPiWLFDWD[RQRPtD\GRPHVWLFDFLyQGHDOSDFDV\OODPDVQXHYDHYLGHQFLD
FURPRVyPLFD\PROHFXODU5HYLVWD&KLOHQDGH+LVWRULD1DWXUDO
0DUtQ -&$( 6SRWRUQR %$ *RQ]iOH] & %RQDFLF -&:KHHOHU &6 &DVH\ 0: %UXIRUG 5( 3DOPD DQG
( 3RXOLQ 0LWRFKRQGULDO '1$ YDULDWLRQ DQG V\VWHPDWLFV RI WKH JXDQDFR /DPD JXDQLFRH$UWLRGDFW\OD
&DPHOLGDH-RXUQDORI0DPPDORJ\
0ROLQD*,6DJJLR6XOOD6WRULD1DWXUDOHGHO&KLOL7RPPDVRG$TXLQR%RORJQD,WDO\
0XQVRQ/1HFURSV\SURFHGXUHVIRUZLOGDQLPDOV:LWKLQSXWIURP:%.DUHVK0)0F(QWHH/-/RZHQVWLQH
0(5RHONH3DUNHU(:LOOLDPVDQG0+:RRGIRUG,OOXVWUDWLRQVE\'+DLQHV,Q/:KLWHDQG$(GZDUGV
HGV&RQVHUYDWLRQ5HVHDUFKLQWKH$IULFDQUDLQIRUHVWVDWHFKQLFDOKDQGERRN:LOGOLIH&RQVHUYDWLRQ6RFLHW\1HZ
<RUN1<86$SS
3HGURVD6--$UUDQ]1%ULWR$0ROLQD)6DQ3ULPLWLYRDQG<%D\yQ0LWRFKRQGULDOGLYHUVLW\DQGWKHRULJLQ
RI,EHULDQVKHHS*HQHWLFV6HOHFWLRQ(YROXWLRQ
5HQDXGHDXG$UF1&RPPXQLW\0DQDJHPHQWRI9LFXxDLQWKH%ROLYLDQ$OWLSODQR3URFHGXUDO3DSHUSUHVHQWHGLQ
0DUFKDVUHTXLUHPHQWIURP03KLOWR3K'6FKRRORI'HYHORSPHQW6WXGLHV8QLYHUVLW\RI(DVW$QJOLD1RUZLFK8.
5R]DV-'1$6HTXHQFH3RO\PRUSKLVP$QDO\VLVXVLQJ'QD63,Q'3RVDGDHG%LRLQIRUPDWLFVIRU'1$
6HTXHQFH$QDO\VLV0HWKRGV0ROHFXODU%LRORJ\6HULHV9RO+XPDQD3UHVV7RWRZD1-86$SS
6DUQR5-/9LOODOED&%RQDFLF%*RQ]DOH]%=DSDWD':0DF'RQDOG6-2%ULHQDQG:(-RKQVRQ
3K\ORJHRJUDSK\DQGVXEVSHFLHVDVVHVVPHQWRIYLFXxDVLQ&KLOHDQG%ROLYLDXWLOL]LQJPW'1$DQGPLFURVDWHOOLWH
PDUNHUVLPSOLFDWLRQVIRUYLFXxDFRQVHUYDWLRQDQGPDQDJHPHQW&RQVHUYDWLRQ*HQHWLFV
7HPSOHWRQ$5(5RXWPDQDQG&$3KLOOLSV6HSDUDWLQJSRSXODWLRQVWUXFWXUHIURPSRSXODWLRQKLVWRU\DFODGLVWLF
$QDO\VLVRIWKHJHRJUDSKLFDOGLVWULEXWLRQRIPLWRFKRQGULDO'1$KDSORW\SHVLQWKHWLJHUVDODPDQGHU$PE\VWRPD
WLJULQXP*HQHWLFV
7KRPDV23UHOLPLQDU\GLDJQRVLVRIQHZPDPPDOVREWDLQHGE\WKH<DOH1DWLRQDO6RFLHW\3HUXYLDQ([SHGLWLRQ
6PLWKVRQLDQ0LVF&
7RUUHV+&DPpOLGRV6LOYHVWUHV6XGDPHULFDQRV8QSODQGH$FFLRQSDUDVX&RQVHUYDFLRQ,8&1&6(6RXWK
$PHULFDQ&DPHOLG6SHFLDOLVW*URXSS
9LOi%//DVLOYHVWUtDGHODVYLFXxDV8QDFDUDFWHUtVWLFDHVHQFLDOSDUDVXFRQVHUYDFLyQ\PDQHMR(FRORJtD$XVWUDO

'1&%'LUHFFLyQ1DFLRQDOGH&RQVHUYDFLyQGHOD%LRGLYHUVLGDG&HQVR1DFLRQDOGHODYLFXxDHQ%ROLYLD
,QIRUPHSXEOLFDGRSRUHO0LQLVWHULRGH'HVDUUROOR6RVWHQLEOH\0HGLR$PELHQWH/D3D]S
<DFREDFFLR+/9DULDEOHVPRUIRPpWULFDVGHYLFXxDV9LFXJQDYLFXJQDYLFXJQDHQ&LHQHJXLOODV-XMX\,Q%
9LOiHG,QYHVWLJDFLyQFRQVHUYDFLyQ\PDQHMRGHYLFXxDV3UR\HFWR0$&6%XHQRV$LUHV$UJHQWLQDSS
:KHHOHU -& 0 )HUQiQGH] 5 5RVDGLR ' +RFHV 0 .DGZHOO DQG 0: %UXIRUG 'LYHUVLGDG *HQpWLFD \
PDQHMRGHSREODFLRQHVGHYLFXxDVHQHO3HU~5,9(35HYLVWDGH,QYHVWLJDFLRQHV9HWHULQDULDVGHO3HU~6XSOHPHQWR

&VIIHMRKERHKIRIXMGW
%WWSGMEXMSRSJQ]SWXEXMRKIRI1782 TSP]QSVTLMWQ

[MXLIGSRSQMGXVEMXWMRVEFFMXW
.$%LQGX$UXQ5DYHHQGUDQ6LE\$QWRQ\DQG.95DJKXQDQGDQDQ
'HSDUWPHQWRI$QLPDO%UHHGLQJDQG*HQHWLFV&ROOHJHRI9HWHULQDU\DQG$QLPDO6FLHQFHV
0DQQXWK\7ULFKXU.HUDOD,QGLDELQVLE#UHGLIIPDLOFRP
5HVLGHQW9HWHULQDULDQ,)&':$JDGLU0RURFFR
%FWXVEGX
0\RVWDWLQ0671DOVRNQRZQDV*')LVDQHJDWLYHUHJXODWLRQIDFWRUZKLFKGHWHUPLQHVWKH
PD[LPDODPRXQWRIERG\PDVVW\SLFDOIRUHYHU\VSHFLHV0671LVFRQVLGHUHGDVDQLPSRUWDQW
FDQGLGDWH JHQH IRU PHDW SURGXFWLRQ )RQWDQHVL HW DO GHWHFWHG D VLQJOH QXFOHRWLGH
SRO\PRUSKLVP&7WUDQVLWLRQDWSRVLWLRQRILQWURQRIP\RVWDWLQJHQH,IWKHUHLVDPXWDWLRQ
LQ0671JHQHLWVQHJDWLYHUHJXODWLRQIXQFWLRQLVGLVUXSWHGOHDGLQJWRGRXEOHPXVFOHSKHQRW\SH
7KHUDEELW0671JHQHVHTXHQFHFRPSULVHVWKUHHH[RQVDQGWZRLQWURQVDVREVHUYHGLQRWKHU
VSHFLHV$WRWDORI'1$VDPSOHVRI1HZ=HDODQG:KLWH6RYLHW&KLQFKLOODDQGFURVVEUHG
UDEELWVZHUHVXEMHFWHGWR3&5EDVHG5)/3$QESIUDJPHQWRI0671JHQHZDVDPSOLHG
XVLQJ3&5DQGGLJHVWHGZLWK$OXHQ]\PHDQGSRO\PRUSKLVPZDVGHWHFWHGLQWKHSRSXODWLRQ
VWXGLHGUHYHDOLQJWKUHHJHQRW\SHVYL]&&&7DQG77,QWKHSUHVHQWVWXG\&7JHQRW\SHVZHUH
DVVRFLDWHGZLWKKLJKHUERG\ZHLJKWEXWWKHGLIIHUHQFHLQERG\ZHLJKWDPRQJGLIIHUHQWJHQHWLF
JURXSVZDVQRWVWDWLVWLFDOO\VLJQLFDQW
.H\ZRUGVP\RVWDWLQSRO\PRUSKLVP0671
-RXVSHYGXMSR
7KHUHKDVEHHQDULVHLQJOREDODZDUHQHVVDERXWWKHYLUWXHVRIUDEELWPHDWDQGEUH5DEELWVKDYH
WUDLWVRIHFRQRPLFLPSRUWDQFHOLNHKLJKUDWHRIUHSURGXFWLRQHDUO\PDWXULW\UDSLGJURZWKUDWHDQG
HIFLHQWIHHGXWLOLVDWLRQ0RUHRYHUWKH\SRVHOLPLWHGFRPSHWLWLRQIRUKXPDQIRRGDQGSURGXFH
KLJKTXDOLW\QXWULWLRXVPHDW7KLVSRWHQWLDORIUDEELWVFDQEHZHOOXWLOLVHGDWDFRPPHUFLDORU
HYHQVPDOOVFDOHOHYHOWRDGGUHVVWKHSUREOHPVRIIRRGVFDUFLW\2QO\OLPLWHGVWXGLHVKDYHEHHQ
FRQGXFWHGLQUDEELWVRIWURSLFDOFRXQWULHVZKHUHFOLPDWHGLHWPDQDJHPHQWDQGVWRFNUHVRXUFHV
FDQGLIIHUPDUNHGO\IURPWKRVHLQWHPSHUDWHFRXQWULHV$FDQGLGDWHDSSURDFKKDVDOUHDG\EHHQ
VXFFHVVIXOO\ DSSOLHG WR LGHQWLI\ VHYHUDO '1$ PDUNHUV DVVRFLDWHG ZLWK SURGXFWLRQ WUDLWV LQ
OLYHVWRFN5RWKVFKLOGDQG6ROOHU
0\RVWDWLQJHQHFDQEHFRQVLGHUHGDVRQHRIWKHFDQGLGDWHJHQHVIRUPHDWSURGXFWLRQWUDLWVLQ
UDEELWV7KHSULQFLSOHLVEDVHGRQWKHIDFWWKDWWKHYDULDELOLW\ZLWKLQJHQHVFRGLQJIRUSURWHLQ
SURGXFWVLQYROYHGLQNH\SK\VLRORJLFDOPHFKDQLVPVDQGPHWDEROLFSDWKZD\VGLUHFWO\RULQGLUHFWO\
LQYROYHGLQGHWHUPLQLQJDQHFRQRPLFWUDLWPLJKWH[SODLQDIUDFWLRQRIJHQHWLFYDULDELOLW\IRUWKH
SURGXFWLRQLWVHOI)RQWDQHVLHWDO
7KHP\RVWDWLQJHQHFRGHVIRUDJURZWKIDFWRULQYROYHGLQPXVFOHGHYHORSPHQW3RO\PRUSKLVP
LQWKLVJHQHKDVHFRQRPLFFRQVHTXHQFHV7KHJHQHHQFRGLQJP\RVWDWLQZDVGLVFRYHUHGLQ
E\WKHJHQHWLFLVWV$OH[DQGUD0F3KHUURQDQG6H-LQ/HHZKRDOVRSURGXFHGDVWUDLQRIPXWDQW
PLFHWKDWODFNWKLVJHQH7KHVHP\RVWDWLQNQRFNRXWPLFHDSSDUHQWO\KDGWZLFHDVPXFKPXVFOH
DVQRUPDOPLFHSULPDULO\GXHWRDQLQFUHDVHGQXPEHURIPXVFOHEUHVIROORZHGE\PXVFOHFHOO
K\SHUWURSK\DQGVXSSUHVVLRQRIERG\IDWDFFXPXODWLRQ0F3KHUURQHWDO0F3KHUURQDQG
/HH)RQWDQHVLHWDOGHWHFWHGDVLQJOHQXFOHRWLGHSRO\PRUSKLVP&7WUDQVLWLRQ

&VIIHMRKERHKIRIXMGW
DWSRVLWLRQRILQWURQRIP\RVWDWLQJHQH,QFDWWOHPXWDWLRQLGHQWLHGLQWKHFRGLQJUHJLRQ
RIWKHP\RVWDWLQJHQHRI%HOJLDQ%OXHDQG3LHGPRQWHVHZHUHIRXQGWREHKLJKO\DVVRFLDWHGZLWK
GRXEOHPXVFOLQJWUDLW.DPEDGXUHWDO0F3KHUURQHWDO,QFKLFNHQDOVRPXWDWLRQ
RIP\RVWDWLQJHQHKDVEHHQUHSRUWHGWREHDVVRFLDWHGZLWKSURGXFWLRQWUDLWV*XHWDO
,QGRJVHQKDQFHGPXVFOHGHYHORSPHQWDQGUDFLQJSHUIRUPDQFHZDVREVHUYHGZLWKPXWDWHG
P\RVWDWLQJHQH0RVKHUHWDO7KHVHREVHUYDWLRQVSRLQWWRWKHIDFWWKDWP\RVWDWLQJHQH
LVDQLPSRUWDQWFDQGLGDWHJHQHIRUPXVFOHPDVVGHYHORSPHQWLQDQLPDOV
7KHSUHVHQWVWXG\IRFXVHGRQQGLQJRXWWKHSRO\PRUSKLVPRIP\RVWDWLQJHQHLQ1HZ=HDODQG
:KLWH6RYLHW&KLQFKLOODDQGFURVVEUHGUDEELWVDGDSWHGWRWKHWURSLFDOFOLPDWHRI.HUDOD
1EXIVMEPWERHQIXLSHW
8VLQJSKHQROFKORURIRUPH[WUDFWLRQSURFHGXUH6DPEURRNDQG5XVVHO'1$ZDVLVRODWHG
IURPEORRGVDPSOHVFROOHFWHGIURPUDEELWVEHORQJLQJWR1HZ=HDODQG:KLWH6RYLHW&KLQFKLOOD
DQGFURVVEUHGUDEELWVPDLQWDLQHGLQWKH8QLYHUVLW\UDEELWIDUPRI.HUDOD$JULFXOWXUDO8QLYHUVLW\
7KHSULPHUGHVLJQHGE\)RQWDQHVLHWDOZDVXVHGIRUWKHSUHVHQWVWXG\
7KH ES IUDJPHQW RI WKH P\RVWDWLQ JHQH ZDV DPSOLHG LQ D WKHUPDO F\FOHU ZLWK D QDO
FRQFHQWUDWLRQRIQJRIWHPSODWH'1$SPRORIHDFKSULPHUP0HDFKRIG1738RI
7DT'1$SRO\PHUDVH;3&5EXIIHUDQGP0RIPDJQHVLXPFKORULGHLQOUHDFWLRQZLWK
LQLWLDOGHQDWXUDWLRQDW&IRUPLQDPSOLFDWLRQF\FOHVRIGHQDWXUDWLRQDW&IRUPLQ
SULPHUDQQHDOLQJDW&IRUPLQSULPHUH[WHQVLRQDW&IRUPLQDQGQDOH[WHQVLRQDW
&IRUPLQ)RXUPLFUROLWUHVRIWKHDPSOLHGSURGXFWZDVGLJHVWHGRYHUQLJKWDW&ZLWK
8RIUHVWULFWLRQHQGRQXFOHDVH$OXDQGVHSDUDWHGE\SRO\DFU\ODPLGHJHOHOHFWURSKRUHVLV
'1$SURGXFWVZHUHYLVXDOLVHGZLWKHWKLGLXPEURPLGHDQGWKHUHVWULFWLRQSDWWHUQZDVDQDO\VHG
XQGHU89WUDQVLOOXPLQDWRUDQGGRFXPHQWHGLQDJHOGRFXPHQWDWLRQV\VWHP%LR5DG*HO'RF

+HWHUR]\JRVLW\ZDVFDOFXODWHGE\WKHPHWKRGRI2WW
N

+H
SL

L
ZKHUHSLLVWKHIUHTXHQF\RILWKDOOHOH
7KH3RO\PRUSKLF,QIRUPDWLRQ&RQWHQW3,&YDOXHZDVFDOFXODWHGXVLQJWKHIRUPXOD
N S
NN
S
3,& S
L
L M

L
L M L
ZKHUHSLDQGSMDUHWKHIUHTXHQFLHVRILWKDQGMWKDOOHOHVUHVSHFWLYHO\%RWVWHLQHWDO
3RO\PHUDVH&KDLQ5HDFWLRQ5HVWULFWLRQ)UDJPHQW/HQJWK3RO\PRUSKLVP3&55)/3UHYHDOHG
WKUHH UHVWULFWLRQ GLJHVWLRQ SDWWHUQV LQ UDEELWV YL] && &7 DQG 77 7KH JHQRW\SH && ZDV
UHSUHVHQWHGE\DESIUDJPHQWJHQRW\SH&7E\WKUHHIUDJPHQWVRIOHQJWKESESDQG
ESZKLOH77ZDVIRXQGUHSUHVHQWHGE\IUDJPHQWVRIOHQJWKESDQGES6LPLODUQGLQJV
ZHUHUHSRUWHGLQRWKHUVWXGLHV
7KHIUHTXHQF\RI&DOOHOHLQWKHSRROHGSRSXODWLRQZDVUHFRUGHGDV7KHIUHTXHQFLHVRI&
DOOHOHLQ1HZ=HDODQG:KLWH6RYLHW&KLQFKLOODDQGFURVVEUHGUDEELWVZHUHIRXQGWREH

&VIIHMRKERHKIRIXMGW
DQGUHVSHFWLYHO\7KHVHQGLQJVDUHLQDJUHHPHQWZLWKWKRVHRI)RQWDQHVLHWDO
ZKRUHSRUWHGVLPLODUIUHTXHQFLHVRI&DOOHOHLQWKHUDEELWVVWXGLHGQDPHO\&KHFNHUHG*LDQW
%XUJXQG\DQG*LDQWJUH\&RQWUDU\WRWKHQGLQJVRIWKHSUHVHQWVWXG\SULRU
UHVHDUFKUHSRUWHGDKLJKHUIUHTXHQF\IRU7DOOHOH$VUHJDUGVWKHKHWHUR]\JRVLW\YDOXH
DQGZHUHREVHUYHGIRU1HZ=HDODQG:KLWH6RYLHW&KLQFKLOOD&URVVEUHHGV
DQGSRROHGSRSXODWLRQRIUDEELWV7KHFRUUHVSRQGLQJSRO\PRUSKLFLQIRUPDWLRQFRQWHQW3,&
YDOXHVREWDLQHGZHUHDQGUHVSHFWLYHO\6LPLODUQGLQJVKDYH
EHHQJLYHQE\)RQWDQHVLHWDOKRZHYHUORZHUYDOXHVKDYHEHHQUHSRUWHGE\RWKHUV,Q
WKHSUHVHQWVWXG\&7JHQRW\SHVZHUHDVVRFLDWHGZLWKKLJKHUERG\ZHLJKWEXWWKHGLIIHUHQFHLQ
ERG\ZHLJKWDPRQJGLIIHUHQWJHQHWLFJURXSVZDVQRWVWDWLVWLFDOO\VLJQLFDQW7KLVPD\EHGXH
WRVPDOOVDPSOHVL]H7KHVWXG\UHLWHUDWHVWKHUHOHYDQFHRIPRUHUHVHDUFKDFWLYLWLHVRQWKLVIURQW
ZLWKODUJHVDPSOHVL]HDQGPRUH'1$PDUNHUVWRDLGDVVRFLDWLRQVWXGLHV
'SRGPYWMSR
7KHSUHVHQW3&55)/3VWXG\RIESIUDJPHQWRIP\RVWDWLQJHQHLQUDEELWVGHWHFWHGRQHVLQJOH
QXFOHRWLGHSRO\PRUSKLVP7KHDOOHOHGLVWULEXWLRQRIWKHLGHQWLHGSRO\PRUSKLVPHYHQLILWGRHV
QRWGLVUXSWRUDIIHFWWKHFRGLQJVHTXHQFHEHFDXVHRILWVORFDOLVDWLRQLQDQLQWURQLFUHJLRQZLWKRXW
DQ\SXWDWLYHIXQFWLRQDOUROHVHHPVDXVHIXOJHQHPDUNHUIRUDVVRFLDWLRQVWXGLHV)RQWDQHVLHW
DO5HVHTXHQFLQJDFWLYLWLHVWKDWDUHXQGHUZD\IRUDODUJHQXPEHURIDQLPDOVDQGIRUWKH
DGGLWLRQDOUHJLRQVRIWKHVDPHJHQHPLJKWSURYLGHPRUH'1$PDUNHUVLQWKHLPPHGLDWHIXWXUH
%GORS[PIHKIQIRXW
7KHDXWKRUVZLVKWRWKDQNWKH$QLPDO+XVEDQGU\'HSDUWPHQWRI.HUDODVWDWH,QGLDIRUIXQGLQJ
WKLVSURMHFW
6IJIVIRGIW
%RWVWHLQ ' 5/:KLWH 0 6NROQLFN DQG 5: 'DYLV &RQVWUXFWLRQ RI D JHQHWLF OLQNDJH PDS LQ PDQ XVLQJ
UHVWULFWLRQIUDJPHQWOHQJWKSRO\PRUSKLVP$PHULFDQ-RXUQDORI+XPDQ*HQHWLFV
)RQWDQHVL/07D]]ROL(6FRWWLDQG95XVVR$QDO\VLVRIFDQGLGDWHJHQHVIRUPHDWSURGXFWLRQWUDLWVLQGRPHVWLF
UDEELWEUHHGVWKZRUOG5DEELW&RQJUHVV9HURQD,WDO\
*X=/+)=KDQJ'+=KXDQG+/L6LQJOHQXFOHRWLGHSRO\PRUSKLVPDQDO\VLVRIWKHFKLFNHQ0\RVWDWLQJHQH
LQGLIIHUHQWFKLFNHQOLQHV<L&KDQ;XH%DR
.DPEDGXU506KDUPD73/6PLWKDQG--%DVV0XWDWLRQVLQP\RVWDWLQ*')LQGRXEOHPXVFOHG%HOJLDQ
%OXHDQG3LHGPRQWHVHFDWWOH*HQRPH5HVHDUFK
0F3KHUURQ$&$0/DZOHUDQG6-/HH5HJXODWLRQRIVNHOHWDOPXVFOHPDVVLQPLFHE\DQHZ7*)VXSHU
IDPLO\PHPEHU1DWXUH
0F3KHUURQ$&DQG6-/HH6XSUHVVLRQRIERG\IDWDFFXPXODWLRQLQP\RVWDWLQGHFLHQWPLFH-RXUQDORIFOLQLFDO
,QYHVWLJDWLRQ
0RVKHU '6 3 4XLJQRQ &' %XVWDPDQWH 1% 6XWWHU &6 0HOOHUVK +* 3DUNHU DQG ($ 2VWUDQGHU $
PXWDWLRQLQWKHP\RVWDWLQJHQHLQFUHDVHVPXVFOHPDVVDQGHQKDQFHVUDFLQJSHUIRUPDQFHLQKHWHUR]\JRWHGRJV
3/R6*HQHWLFVH
2WW6WUDWHJLHVIRUFKDUDFWHUL]LQJKLJKO\SRO\PRUSKLFPDUNHUVLQKXPDQJHQHPDSSLQJ$PHULFDQ-RXUQDORI
+XPDQ*HQHWLFV
5RWKVFKLOG0)DQG06ROOHU&DQGLGDWHJHQHDQDO\VLVWRGHWHFWWUDLWVRIHFRQRPLFLPSRUWDQFHLQOLYHVWRFN
3UREH
6DPEURRN-DQG':5XVVHO0ROHFXODU&ORQLQJ$/DERUDWRU\0DQXHOUGHG&ROG6SULQJ+DUERXU/DERUDWRU\
3UHVV1HZ<RUN1<86$S

&VIIHMRKERHKIRIXMGW
+VS[XLLSVQSRIKIRIMRPPEQE0EQEKPEQE
GLEVEGXIVMWEXMSRERH724WMHIRXMGEXMSR
06'DYHULR)'L5RFFRDQG/9LGDO5LRMD
/DERUDWRULRGH*HQpWLFD0ROHFXODU,QVWLWXWR0XOWLGLVFLSOLQDULRGH%LRORJtD&HOXODU,0%,&(
&,&3%$&&7&21,&(7&DOOHH\&3/D3ODWD%XHQRV$LUHV$UJHQWLQD
PVLOGDYHULR#KRWPDLOFRP
%FWXVEGX
7KH6RXWK$PHULFDQFDPHOLGVDUHDVRXUFHRIPHDWEUHOHDWKHUWUDQVSRUWDQGRWKHUSURGXFWV
XVHIXOIRUWKHHFRQRP\RISRSXODWLRQVLQWKHQRUWKZHVWRI$UJHQWLQD%UHHGLQJDQGH[SORLWDWLRQ
RIWKHOODPDDQGDOSDFDKDVH[SHULHQFHGDQRWDEOHLQFUHDVHDQGZLWKLWDQLQWHUHVWLQLPSURYLQJ
WKHSHUIRUPDQFHRIWKHVHWD[D7KHJURZWKKRUPRQH*+DSHSWLGHKRUPRQHV\QWKHVLVHGDQG
VHFUHWHGE\WKHSLWXLWDU\JODQGDIIHFWVDYDULHW\RIHFRQRPLFDOO\LPSRUWDQWWUDLWVLQOLYHVWRFNVXFK
DVJURZWKSHUIRUPDQFHPLONSURGXFWLRQDQGFDUFDVVFRPSRVLWLRQ,QWKLVVWXG\ZHFKDUDFWHULVHG
WKH*+JHQHRIOODPDVIURP$UJHQWLQDDQGLGHQWLHGVHYHUDOVLQJOHQXFOHRWLGHSRO\PRUSKLVPV
613V$VLQRWKHUPDPPDOVOODPD*+JHQHFRPSULVHVYHH[RQVDQGIRXULQWURQV&RPSDULVRQ
ZLWKWKHFRGLQJVHTXHQFHVRIWKHFDPHOZKDOHGROSKLQSLJFRZDQGVKHHSVKRZHG
DQGVLPLODULW\UHVSHFWLYHO\,QWURQVZHUHOHVVFRQVHUYHG
SDUWLFXODUO\LQWURQ&ZKLFKLQOODPDZDVFRQVLGHUDEO\VKRUWHUWKDQLQWKHRWKHUFRPSDUHGVSHFLHV
6HTXHQFLQJRI*+JHQHLQDVDPSOHRIOODPDVDOORZHGWKHLGHQWLFDWLRQRI613PDLQO\
ORFDWHGLQLQWURQV1HYHUWKHOHVVRQHRIWKHPZDVIRXQGLQWKHUHJLRQ:HFRQFOXGHWKDWWKH
SRO\PRUSKLVPVVXFKDVWKHRQHVSUHVHQWHGKHUHFRXOGEHXVHGIRUGHYHORSLQJJHQHWLFPDUNHUVWR
DVVD\WKHHIIHFWRIGLIIHUHQWJHQRW\SHVRQHFRQRPLFDOO\LPSRUWDQWWUDLWV
.H\ZRUGV/DPDJODPDJURZWKKRUPRQHQXFOHRWLGHVHTXHQFHSRO\PRUSKLVPV
-RXVSHYGXMSR
7KH6RXWK$PHULFDQFDPHOLGVDUHUHSUHVHQWHGE\WKHZLOGVSHFLHV/DPDJXDQLFRHJXDQDFR
DQG9LFXJQDYLFXJQDYLFXxDDQGWKHGRPHVWLFIRUPV/DPDSDFRVDOSDFDDQG/DPDJODPD
OODPD
7KHOODPDLVWKHODUJHVWGRPHVWLFFDPHOLGZLGHO\UHSUHVHQWHGLQQRUWKZHVWHUQ$QGHDQHOHYDWLRQV
RI$UJHQWLQDEXWDOVRYHU\ZHOODGDSWHGWRWKHFHQWUDODQGHDVWHUQSODLQVRIWKHFRXQWU\,QWKHODVW
IHZGHFDGHVEUHHGLQJDQGH[SORLWDWLRQRIFDPHOLGVKDYHH[SHULHQFHGUDSLGH[SDQVLRQWKDWKDV
JRQHEH\RQGWKHERUGHUVRI6RXWK$PHULFDQFRXQWULHVZLWKDFRQVHTXHQWLQFUHDVHLQGHPDQGIRU
\LHOGDQGTXDOLW\RIWKHLUSURGXFWVZLWKEUHDQGPHDWEHLQJWKHPRVWYDOXDEOHRQHV+HUGVRI
OODPDDUHUDLVHGLQWKHVHDUHDVZLWKHFRQRPLFUHWXUQVIRUWKHKHUGHUVZKRDFWXDOO\ORRNIRUZD\V
WRLPSURYHWKHHIFLHQF\RISURGXFWLRQE\LQFUHDVLQJWKHUHSURGXFWLYHDQGJURZWKVXFFHVVWKH
EUHTXDOLW\DQGRYHUFRPLQJVHYHUDODGYHUVHVDQLWDU\FRQGLWLRQV
7KHVWXG\RIFDQGLGDWHJHQHVEDVHGRQSK\VLRORJLFDOHIIHFWVLVDQLPSRUWDQWWRROIRULGHQWLI\LQJ
JHQHVWREHXVHGLQPDUNHUDVVLVWHGVHOHFWLRQSURJUDPPHV*+LVDSHSWLGHKRUPRQHSURGXFHG
DQGVHFUHWHGE\WKHVRPDWRWURSKVRIWKHDQWHULRUSLWXLWDU\DQGLVNQRZQIRULWVJURZWKSURPRWLQJ
DFWLYLWLHV9DQFH,QPRVWPDPPDOVLWLVHQFRGHGE\DVLQJOHJHQH)RUV\WKDQG:DOOLV
7KHUHIRUH*+LVDJRRGFDQGLGDWHZRUWKVWXG\LQJLQOLYHVWRFNVLQFHLWDIIHFWVDZLGH
YDULHW\RIHFRQRPLFDOO\LPSRUWDQWWUDLWVVXFKDVJURZWKSHUIRUPDQFHFDUFDVVFRPSRVLWLRQDQG
PLONSURGXFWLRQ

&VIIHMRKERHKIRIXMGW
5HFHQWO\ D VWXG\ LQ %UDQJXV EXOOV SRSXODWLRQ UHYHDOHG WKDW SRO\PRUSKLVPV LQ *+ DQG LWV
WUDQVFULSWLRQDOUHJXODWRUVDSSHDUWREHSUHGLFWRUVRIJURZWKDQGFDUFDVVWUDLWVLQWKHVHVSHFLHV
7KRPDVHWDO$VVRFLDWLRQRIFDUFDVVWUDLWVZLWK*+JHQHSRO\PRUSKLVPVZHUHDOVR
UHSRUWHGLQSLJVE\*HOGHUPDQQHWDO,QFRQWUDVWNQRZOHGJHRIWKHVHTXHQFHVWUXFWXUH
DQGYDULDWLRQRIJHQHVUHODWHGWRJURZWKDQGUHSURGXFWLRQLQ6RXWK$PHULFDQFDPHOLGVLVVWLOODQ
XQH[SORUHGHOG+HQFHWKHDLPRIWKHSUHVHQWZRUNZDVWRGHWHUPLQHWKHVHTXHQFHDQGVWUXFWXUH
RIWKHJURZWKKRUPRQHJHQHDQGWRLGHQWLI\VLQJOHQXFOHRWLGHSRO\PRUSKLVPV
1EXIVMEPWERHQIXLSHW
7EQTPIW
%ORRGVDPSOHVZHUHREWDLQHGIURPUDQGRPO\VHOHFWHGOODPDVEHORQJLQJWRWZRGLIIHUHQWRFNV
RI-XMX\DQG/D3DPSDSURYLQFHV$UJHQWLQD7RWDOJHQRPLF'1$ZDVH[WUDFWHGIURPZKROH
EORRGXVLQJVWDQGDUGSKHQROFKORURIRUPSURFHGXUH6DPEURRNDQG5XVVHO
%QTPMGEXMSRSJ0PEQE+,KIRI
*+ JHQH VHTXHQFH ZDV REWDLQHG E\ SRO\PHUDVH FKDLQ UHDFWLRQ 3&5 $PSOLFDWLRQ ZDV
SHUIRUPHGLQIRXURYHUODSSLQJIUDJPHQWVRIESZLWKSULPHUV7DEOHGHVLJQHGRQ
WKHDOSDFD*+P51$*HQ%DQN'43ULPHUVIRUWKHDPSOLFDWLRQRIDQGHQGV
ZHUH GHVLJQHG LQ FRQVHUYHG VHTXHQFHV IURP *+ JHQH RI RWKHU FHWDUWLRGDFW\O VSHFLHV 3&5
UHDFWLRQVZHUHFDUULHGRXWLQDSURJUDPPDEOHWKHUPRF\FOHU37&0-5HVHDUFKZLWKDQ
LQLWLDOGHQDWXUDWLRQVWHSDW&IRUPLQIROORZHGE\F\FOHVRIPLQGHQDWXUDWLRQDW
&PLQDQQHDOLQJDW&PLQFKDLQHORQJDWLRQDW&DQGPLQQDOH[WHQVLRQDW
&$PSOLFRQVZHUHYLVXDOLVHGLQDJDURVHJHOVHOHFWURSKRUHVLVDQGVWDLQHGZLWK*HO5HG
%LRWLXP+D\ZDUG&DOLIRUQLD86$3&5SURGXFWVZHUHSXULHG DQGVHTXHQFHGXVLQJDQ
DXWRPDWLF*HQHWLF$QDO\VHU[O$SSOLHG%LRV\VWHPV)RVWHU&LW\86$
7IUYIRGIEREP]WMW
)UDJPHQWVREWDLQHGZHUHDVVHPEOHGXVLQJVRIWZDUH*HQHLRXVY'UXPPRQGHWDO
LQRUGHUWRGHWHUPLQHWKHFRPSOHWHQXFOHRWLGHVHTXHQFHRIOODPD*+JHQH,QWURQVH[RQVDQG
WUDQVODWLRQLQLWLDWLRQVLWHZHUHLGHQWLHGE\FRPSDULVRQZLWKWKHDOSDFD*+F'1$VHTXHQFH
IURP WKH *HQHEDQN '4 6HTXHQFH REWDLQHG LQFOXGLQJ WKH DQG UHJLRQV ZHUH
DOLJQHGZLWKUHODWHG&HWDUWLRGDFW\OVSHFLHVGURPHGDU\&DPHOXVGURPHGDULXV$-Q
ZKDOH%DODHQRSWHUDSK\VDOXV$-GROSKLQ'HOSKLQXVGHOSKLV$-SLJ6XV
VFURID$<FRZ%RVWDXUXV0DQGVKHHS2YLVDULHV;XVLQJ&OXVWDO:
SURJUDPPH+LJJLQVHWDOIROORZHGE\PDQXDODGMXVWPHQW7KHVHDUFKIRUWDQGHPUHSHDW
PRWLIVZDVSHUIRUPHGE\PHDQVRI7DQGHP5HSHDW)LQGHUVRIWZDUH%HQVRQ
8EFPI4VMQIVWIUYIRGIWYWIHJSVEQTPMJ]MRK0PEQE+,KIRI
*VEKQIRX
4VMQIV*SV[EVH
4VMQIV6IZIVWI
8ERRIEPMRK
+,986
+,)
+,-)
+,986
+%%%%8%%+8+++++'%+%+
'8++'8+'8+%'%''8%'%%
%8''8+++8%+''88'8'8'
8''8'%++'%%%''8%'+%'
%+888''8'''%88%8+'%+
%''%++'8+88++8+%%+%'
+'%'8++%+8++'%'888
8+%8+'%%''8'%8888%88%++%
'
'
'
'

&VIIHMRKERHKIRIXMGW
7IUYIRGIERHSVKERMWEXMSRSJPPEQE+,KIRI
7KH REWDLQHG VHTXHQFH FRQVLVWHG RI ES WKDW FRQWDLQ D VKRUW IUDJPHQW RI WKH 875
XQWUDQVODWHG UHJLRQ WKH FRPSOHWH OODPD *+ JHQH DQG ES RI WKH 875 UHJLRQ7KH
ZKROHVHTXHQFHZDVGHSRVLWHGDW*HQ%DQNGDWDEDVHXQGHUWKHDFFHVVLRQQXPEHU+0
7KHSRVLWLRQRIWKHVHTXHQFHZDVDVVLJQHGFRLQFLGLQJZLWKWKHUVWQXFOHRWLGHRIWKHVWDUW
FRGRQ$7*
$VLQRWKHUPDPPDOV%DUWDHWDO:DOOLV0WKHH[RQLQWURQRUJDQLVDWLRQFRQVLVWV
RIYHH[RQVGLVUXSWHGE\IRXULQWURQV$WR')LJXUH7KHSRWHQWLDOSRO\DGHQ\ODWLRQ
VLWH$$7$$$ LV ORFDWHG ES IURP VWRS FRGRQ 7$*$OO RI WKH LQWURQH[RQ MXQFWLRQV
FRQIRUPWRWKHFRQVHQVXVVSOLFHVHTXHQFHFRQVLVWLQJRIWKHGLQXFOHRWLGHV*7DQG$*DWWKH
DQGERXQGDULHVUHVSHFWLYHO\%UHDWKQDFKDQG&KDPERQDOORZLQJWKHSUHGLFWLRQRID
DPLQRDFLGSRO\SHSWLGH
([RQVRIWKH*+JHQHDUHKLJKO\FRQVHUYHGEHWZHHQFHWDUWLRGDFW\OVERWKLQOHQJWKDQGVHTXHQFH
([RQZKRVHUHJLRQIURPWRLVWUDQVFULEHGEXWQRWWUDQVODWHGZDVWKHPRVWYDULDEOH
&RPSDULVRQRIWKHFRGLQJUHJLRQZLWKWKRVHRIGURPHGDU\ZKDOHGROSKLQSLJFRZDQGVKHHS
VKRZHGDQGVLPLODULW\
$VH[SHFWHGLQWURQVDUHOHVVFRQVHUYHGHVSHFLDOO\LQWURQ&ZKLFKLQOODPDLVVKRUWHUWKDQWKRVH
RIDOOVSHFLHVFRPSDUHG,WFRQWDLQVWZRLPSHUIHFWUHSHDWVRIESHDFKVSDQQLQJWKHIROORZLQJ
VHTXHQFHV**&**&**&***7*$7***$7DQG**&**&**$**$7**7***77
7KHGHGXFHGDPLQRDFLGVHTXHQFHRIOODPD*+LVLGHQWLFDOWRWKHDOSDFDSURWHLQDQGGLIIHUV
IURPWKHGURPHGDU\E\D90UHSODFHPHQWZLWKLQWKHVLJQDOSHSWLGH)LJXUH,QFRQFRUGDQFH
ZLWKWKHREVHUYDWLRQVIRU*+QXFOHRWLGHVHTXHQFHWKHOODPDSURWHLQVKRZHGDKLJKHUKRPRORJ\
ZLWKGROSKLQZKDOHDQGSLJWKDQZLWKVKHHSDQGFRZ7KHVHUHVXOWVFDQ
EHH[SODLQHGE\WKHEXUVWRIUDSLGHYROXWLRQRI*+WKDWRFFXUUHGDIWHUWKHVHSDUDWLRQRIWKHOLQH
OHDGLQJWRUXPLQDQWVIURPRWKHUFHWDUWLRGDFW\OV0DQLRXHWDO
,QWHUHVWLQJWRQRWHLVD7&VXEVWLWXWLRQLQWKHUHJLRQDWWKHUVWEDVHRIWKH7$7$ER[WKDW
OODPDVKDUHZLWKWKHGURPHGDU\EXWZKLFKGLIIHUVIURPWKHFRQVHUYHG7$7$$$VHTXHQFHVHHQLQ
RWKHUFHWDUWLRGDFW\OVSHFLHV0DQLRXHWDO+RZHYHUWKLVFKDQJHGRHVQRWVHHPVWRDIIHFW
*+H[SUHVVLRQVLQFH0DUWLQDWHWDOKDYHLVRODWHGWKHGURPHGDU\SURWHLQIURPSLWXLWDU\
TATA box
5UTR
E1
E2
IA
E3
IB
E4
IC
ID
E5
3UTR
A1602G
C611T
G597T
G554C
T517C
G209A
T109A
T37A
*MKYVI(MEKVEQSJXLIWXVYGXYVEPSVKERMWEXMSRSJPPEQE+,KIRIERH724WHMWXVMFYXMSR)\SRW)) EVI

WLS[REWFS\IWERHMRXVSRWERHEROMRKVIKMSRWEVIWLS[REWFEVW&PEGOEVIEYRXVERWPEXIHKIRIWIUYIRGIW

&VIIHMRKERHKIRIXMGW
*MKYVI7IUYIRGISJXLIPPEQE+,TVSXIMR8LIFEVVITVIWIRXWXLIWMKREPTITXMHIEQMRSEGMHVITVIWIRXW
WXEVXWMXISJXLIQEXYVITVSXIMR
(YLGHQFHRIOODPD*+JHQHYDULDELOLW\LVVXVWDLQHGE\WKHGLVFRYHU\RI613VLQWKHFRPSOHWH
VHTXHQFHRIWKHDQDO\VHGVDPSOHV0RVWRIWKHLGHQWLHG613VZHUHORFDWHGLQQRQFRGLQJ
UHJLRQVDQGPDLQO\FRQFHQWUDWHGLQ,QWURQV$DQG%)LJXUH,QWURQ&DQG'DVZHOODVH[RQV
ZHUHLQYDULDEOH7KLVVWXG\DOVRLQFOXGHGDESVHJPHQWRIWKH875UHJLRQRIWKH*+JHQH
ZKHUHRQHDGGLWLRQDO613ZDVGHWHFWHG
$OWKRXJKQRQFRGLQJ613VDUHFRQVLGHUHGOHVVLPSRUWDQWWKDQWKHFRGLQJRQHVUHFHQWVWXGLHVLQ
RWKHUVSHFLHVGHPRQVWUDWHGWKHDVVRFLDWLRQRILQWURQLF613VZLWKJURZWKDQGFDUFDVVWUDLWV1LH
HWDO7KRPDVHWDO
'SRGPYWMSR
7KLVZRUNSUHVHQWVWKHUVWFRPSOHWHVHTXHQFLQJDQGRUJDQLVDWLRQRIWKHOODPD*+JHQHLQ
DGGLWLRQWRWKHLGHQWLFDWLRQRIVHYHUDODOOHOLFYDULDQWV7KHSRO\PRUSKLVPVVXFKDVWKHRQHV
LGHQWLHGKHUHZLOOEHXVHIXOIRUIXWXUHJHQRW\SHSKHQRW\SHDVVRFLDWLRQVWXGLHV
%GORS[PIHKIQIRXW
:HJUDWHIXOO\DFNQRZOHGJH0LULDP%6LOEHVWURIRUKHUWHFKQLFDODVVLVWDQFH
6IJIVIRGIW
%DUWD$5,5LFKDUGV-'%D[WHUDQG-6KLQH3ULPDU\VWUXFWXUHDQGHYROXWLRQRIUDWJURZWKKRUPRQHJHQH
3URFHHGLQJVRIWKH1DWLRQDO$FDGHP\RI6FLHQFHV
%HQVRQ*7DQGHPUHSHDWVQGHUDSURJUDPWRDQDO\]H'1$VHTXHQFHV1XFOHLF$FLGV5HVHDUFK
%UHDWKQDFK5DQG3&KDPERQ2UJDQL]DWLRQDQGH[SUHVVLRQRIHXNDU\RWLFVSOLWJHQHVFRGLQJIRUSURWHLQV$QQXDO
5HYLHZ%LRFKHPLVWU\
'UXPPRQG$-%$VKWRQ0&KHXQJ-+HOHG0.HDUVH50RLU66WRQHV+DYDV77KLHUHUDQG$:LOVRQ
*HQHLRXVY$YDLODEOHDWKWWSZZZJHQHLRXVFRP
)RUV\WK ,$ DQG 0 :DOOLV *URZWK KRUPRQH DQG SURODFWLQPROHFXODU DQG IXQFWLRQDO HYROXWLRQ -RXUQDO RI
0DPPDU\*ODQG%LRORJ\DQG1HRSODVLD
*HOGHUPDQQ+(0XOOHU3%HHFNPDQQ&.QRUU*<XHDQG*0RVHU0DSSLQJRITXDQWLWDWLYH3RO\PRUSKLVP
RI3,7*+DQG*+5+JHQHVDQGHFRQRPLFWUDLWVRISLJVWUDLWORFLE\PHDQVRIPDUNHUJHQHVLQ)JHQHUDWLRQV
RIZLOGERDU3LHWUDLQDQG0HLVKDQSLJV-RXUQDORI$QLPDO%UHHGLQJDQG*HQHWLFV
+LJJLQV'-7KRPSVRQ7*LEVRQ-'7KRPSVRQ'*+LJJLQVDQG7-*LEVRQ&/867$/:LPSURYLQJWKH
VHQVLWLYLW\RISURJUHVVLYHPXOWLSOHVHTXHQFHDOLJQPHQWWKURXJKVHTXHQFHZHLJKWLQJSRVLWLRQVSHFLFJDSSHQDOWLHV
DQGZHLJKWPDWUL[FKRLFH1XFOHLF$FLGV5HVHDUFK
0DQLRX=2&:DOOLVDQG0:DOOLV(SLVRGLFPROHFXODUHYROXWLRQRISLWXLWDU\JURZWKKRWPRQHLQ&HWDUWLRGDFW\OD
-RXUQDORI0ROHFXODU(YROXWLRQ

&VIIHMRKERHKIRIXMGW
0DUWLQDW 1$$QRXDVVL -& +XHW -& 3HUQROOHW 9 6HJDUG DQG < &RPEDUQRXV 3XULFDWLRQ DQG SDUWLDO
FKDUDFWHUL]DWLRQRIJURZWKKRUPRQHIURPWKHGURPHGDU\&DPHOXVGURPHGDULXV'RPHVWLF$QLPDO(QGRFULQRORJ\

1LH4%6XQ'=KDQJ&/XR1$,VKDJ0/HL*<DQJDQG;=KDQJ+LJKGLYHUVLW\RIWKHFKLFNHQJURZWK
KRUPRQHJHQHDQGHIIHFWVRQJURZWKDQGFDUFDVVWUDLWV-RXUQDORI+HUHGLW\
6DPEURRN-DQG':5XVVHO3UHSDUDWLRQDQGDQDO\VLVRIHXNDU\RWLFJHQRPLF'1$0ROHFXODU&ORQLQJ$
ODERUDWRU\PDQXDOUGHG&ROG6SULQJ+DUERU/DERUDWRU\3UHVV1HZ<RUN1<86$
7KRPDV0*50(QQV./6KLUOH\0'*DUFLDDQG$-*DUUHW$VVRFLDWLRQVRI'1$SRO\PRUSKLVPVLQ
JURZWKKRUPRQHDQGLWVWUDQVFULSWLRQDOUHJXODWRUVZLWKJURZWKDQGFDUFDVVWUDLWVLQWZRSRSXODWLRQVRI%UDQJXVEXOOV
*HQHWLFVDQG0ROHFXODU5HVHDUFK
9DQFH0/*URZWKKRUPRQHPHWDEROLFHIIHFW)ULVFK+DQG7KRUQHU02+RUPRQDO5HJXODWLRQRI*URZWK
6HURQR6\PSRVLD3XEOLFDWLRQV5DYHQ3UHVV1HZ<RUN
:DOOLV 0 0DPPDOLDQ JHQRPH SURMHFWV UHYHDO QHZ JURZWK KRUPRQH *+ VHTXHQFHV &KDUDFWHUL]DWLRQ RI
WKH *+HQFRGLQJ JHQHV RI DUPDGLOOR 'DV\SXV QRYHPFLQFWXV KHGJHKRJ (ULQDFHXV HXURSDHXV EDW 0\RWLV
OXFLIXJXVK\UD[3URFDYLDFDSHQVLVVKUHZ6RUH[DUDQHXVJURXQGVTXLUUHO6SHUPRSKLOXVWULGHFHPOLQHDWXV
HOHSKDQW/R[RGRQWDDIULFDQDFDW)HOLVFDWXVDQGRSRVVXP0RQRGHOSKLVGRPHVWLFD*HQHUDODQG&RPSDUDWLYH
(QGRFULQRORJ\

&VIIHMRKERHKIRIXMGW
%PTEGEWTIVQGLVSQEXMRIZEPYEXMSRYWMRK8SPYMHMRI&PYI
0,&DUUHWHUR&&$UUD]WRD&,&DVDUHWWR:+XDQFD'01HLOGDQG06*LXOLDQR
,QVWLWXWRGH,QYHVWLJDFLyQ\7HFQRORJtDHQ5HSURGXFFLyQ$QLPDO,1,75$)DFXOWDGGH&LHQFLDV
9HWHULQDULDV8QLYHUVLGDGGH%XHQRV$LUHV$UJHQWLQDLJQDFLDFDUUHWHUR#IYHWXEDDU
/DERUDWRULRGH5HSURGXFFLyQ$QLPDO)DFXOWDGGH0HGLFLQD9HWHULQDULD8QLYHUVLGDG0D\RU
GH6DQ0DUFRV3HU~
%FWXVEGX
$OSDFDVDUHDGRPHVWLFVSHFLHVRI6RXWK$PHULFDQFDPHOLGV6$&ZKLFKDUHLQWHUQDWLRQDOO\
DSSUHFLDWHG EHFDXVH WKH\ KDYH D KLJKTXDOLW\ EUH 7ROXLGLQH %OXH 7% LV D FDWLRQLF VWDLQ
WKDWELQGVWR'1$SHUPLWWLQJGLIIHUHQWLDWLRQEHWZHHQVSHUPKHDGVDFFRUGLQJWRWKHGHJUHHRI
FKURPDWLQGHFRQGHQVDWLRQ7KLVWHFKQLTXHZDVXVHGWRHYDOXDWHVSHUPFKURPDWLQLQDOSDFDV
GHWHUPLQH FKURPDWLQ FRQGHQVDWLRQ SDWWHUQV LQ DOSDFDV DQG GHWHUPLQH LI LW LV SRVVLEOH WR XVH
GLWKLRWKUHLWRO'77DVDSRVLWLYHFRQWUROIRUWKHVWDLQ$WRWDORIHMDFXODWHVZHUHFROOHFWHG
IURP DOSDFDV XVLQJ HOHFWURHMDFXODWLRQ7% VWDLQ ZDV FDUULHG RXW DFFRUGLQJ WR &DUUHWHUR HW
DORQVPHDUVRIUDZVHPHQ6SHUPDWR]RDZHUHFODVVLHGDFFRUGLQJWRWKHGHJUHHRI
FKURPDWLQGHFRQGHQVDWLRQ'HVFULSWLYHVWDWLVWLFVDQGDQDO\VLVRIYDULDQFHIRUHYDOXDWLQJPDOH
GLIIHUHQFHVZHUHSHUIRUPHG7KUHHSDWWHUQVRIVWDLQLQJZLWK7%ZHUHREVHUYHGLQDOSDFDVSHUP
OLJKWEOXHQHJDWLYHZLWKRXWDOWHUDWLRQRIFKURPDWLQFRQGHQVDWLRQOLJKWYLROHWLQWHUPHGLDWH
VRPHGHJUHHRIGHFRQGHQVDWLRQGDUNEOXHYLROHWSRVLWLYHKLJKGHJUHHRIGHFRQGHQVDWLRQ7KH
SHUFHQWDJHVREVHUYHGZHUHPHDQ6'7%SRVLWLYH7%LQWHUPHGLDWH
DQG7%QHJDWLYH,QWKHVSHUPDWR]RDLQFXEDWHGZLWK'77PDLQFDWHJRULHV
ZHUHREVHUYHGUHDFWHGSRVLWLYHZLWK7%DQGQRQUHDFWHGQHJDWLYHZLWK7%,QUHDFWHGVSHUP
VXEFDWHJRULHVZHUHREVHUYHGDFFRUGLQJWRVSHUPKHDGPRUSKRORJ\DQGSUHVHQFHRIYDFXROHV
9DULDELOLW\ EHWZHHQ PDOHV ZDV REVHUYHG IRU SRVLWLYH 3 EXW QRW IRU LQWHUPHGLDWH 7%
VWDLQHGVSHUP,WLVSRVVLEOHWRXVH7%WRHYDOXDWHWKHGHJUHHRIFKURPDWLQGHFRQGHQVDWLRQLQ
DOSDFDVSHUPDWR]RDVKRZLQJWKHVDPH7%SDWWHUQVDVLQRWKHU6$&DOVR'77FDQEHXVHG
DVDSRVLWLYHFRQWUROIRUWKLVWHFKQLTXH
.H\ZRUGVVSHUP'1$7ROXLGLQH%OXHDOSDFDV
-RXVSHYGXMSR
$OSDFDVDUHDGRPHVWLFVSHFLHVRI6RXWK$PHULFDQFDPHOLGV6$&ZKLFKDUHLQWHUQDWLRQDOO\
DSSUHFLDWHG EHFDXVH WKH\ KDYH D KLJKTXDOLW\ EUH DQG PHDW ZLWK ORZ FKROHVWHURO FRQWHQW
7KHUHIRUHDOOUHSURGXFWLYHWHFKQLTXHVWKDWFRQWULEXWHWRJHQHWLFVHOHFWLRQDUHYHU\LPSRUWDQW
LQWKHVHVSHFLHV6WDQGDUGVHPHQHYDOXDWLRQLQFOXGHVFKDUDFWHULVWLFVVXFKDVHMDFXODWHYROXPH
VSHUP FRQFHQWUDWLRQ SODVPD PHPEUDQH IXQFWLRQ DQG LQWHJULW\ VSHUP PRWLOLW\ DQG VSHUP
PRUSKRORJ\+RZHYHUWKHUHLVQRZHYLGHQFHWRVXSSRUWWKHLGHDWKDWWKHLQWHJULW\RIVSHUP
FKURPDWLQLVLPSRUWDQWQRWRQO\IRUIHUWLOLVDWLRQEXWDOVRIRUQRUPDOHPEU\RQLFGHYHORSPHQW
:DUGHWDO0RUULVHWDO7ROXLGLQH%OXH7%LVDQXFOHDUG\HXVHGWRHYDOXDWH
WKHGHJUHHRIVSHUPFKURPDWLQFRQGHQVDWLRQE\GHWHFWLQJWKHDEVHQFHRUUXSWXUHRIGLVXOGH
ERQGVWKXVVWDLQHGQXFOHLPHWDFKURPDWLFEOXHYLROHWFRORXULQJLQGLFDWHDOWHUHGFKURPDWLQ
FRQGHQVDWLRQ8VLQJZHOOGHQHGJURXSVRIIHUWLOHDQGLQIHUWLOHPDOHWKLVVWDLQZDVXVHGWR
HYDOXDWHPDOHIHUWLOLW\SRWHQWLDO7VDUHYHWDO,QDGGLWLRQ7%LVVLPSOHDQGLQH[SHQVLYH
DOOWKDWLVQHHGHGLVDOLJKWPLFURVFRSHDQGWKHG\HV,QRXUODEWKLVVWDLQKDVEHHQXVHGWR
HYDOXDWHWKHGHJUHHRI'1$GHFRQGHQVDWLRQDQGWRGHWHUPLQHWKHVWDLQSDWWHUQVLQUDZVHPHQ
RI OODPDV &DUUHWHUR HW DO DQG JXDQDFRV &DUUHWHUR HW DO $OVR LQ OODPD DQG
JXDQDFRGLWKLRWKUHLWRO'77ZDVHIIHFWLYHZKHQXVHGDVDSRVLWLYHFRQWURORIWKH7%VWDLQ

&VIIHMRKERHKIRIXMGW
EHFDXVHWKLVLVDQDJHQWZKLFKUHGXFHVGLVXOGHERQGV7KHREMHFWLYHVRIWKLVVWXG\ZHUHWRVHH
LIWKLVWHFKQLTXHFDQEHXVHGIRUHYDOXDWLQJDOSDFDVSHUPFKURPDWLQGHWHUPLQLQJWKHFKURPDWLQ
FRQGHQVDWLRQSDWWHUQVLQWKLVVSHFLHVXVLQJ7%DQGGHWHUPLQLQJLILWLVSRVVLEOHWRXVH'77
DVDSRVLWLYHFRQWUROIRUWKHVWDLQ
1EXIVMEPWERHQIXLSHW
%RMQEPWERHPSGEXMSR
7KH VWXG\ ZDV FDUULHG RXW DW WKH )DFXOW\ RI 9HWHULQDU\ 0HGLFLQH RI WKH 8QLYHUVLW\ RI 6DQ
0DUFRV/LPD3HUXDQGDWWKH)DFXOW\RI9HWHULQDU\6FLHQFHVRIWKH8QLYHUVLW\RI%XHQRV$LUHV
$UJHQWLQD$WRWDORIPDOH/DPDSDFRVZHUHXVHG$OODQLPDOVKDGDJRRGQXWULWLRQDOVWDWXV
ERG\FRQGLWLRQDQGZHUHKHDOWK\DWWKHWLPHRIWKHWULDO)HEUXDU\
7IQIRGSPPIGXMSR
$WRWDORIHMDFXODWHVZHUHFROOHFWHGIURPDOSDFDVXVLQJHOHFWURHMDFXODWLRQDFFRUGLQJWRWKH
WHFKQLTXHGHVFULEHGE\'LUHFWRUHWDO
(2%IZEPYEXMSR
7%VWDLQZDVFDUULHGRXWDFFRUGLQJWR&DUUHWHURHWDORQVPHDUVRIUDZVHPHQ%ULH\
VDPSOHVZHUHVPHDUHGRQFOHDQQRQJUHDV\VOLGHVDQGRQFHGU\[HGZLWKHWKDQROIRU
PLQXWHV6PHDUVZHUHVWDLQHGIRUPLQXWHVZLWKDZRUNLQJVROXWLRQRI7%DQGWKHQULQVHGZLWK
GLVWLOOHGZDWHUDQGDLUGULHGSURWHFWHGIURPWKHOLJKW7KH7%ZRUNLQJVROXWLRQZDVSUHSDUHGE\
GLOXWLQJDVWRFNVROXWLRQJUDPVLQPOGLVWLOOHG+2SDUWVWRFNVROXWLRQLQSDUWV
EXIIHUS+3UHSDUDWLRQVZHUHREVHUYHGGLUHFWO\XQGHULPPHUVLRQRLOXVLQJDSKDVHFRQWUDVW
PLFURVFRSH;HYDOXDWLQJDPLQLPXPRIVSHUPDWR]RDSHUVPHDU6SHUPDWR]RDZHUH
FODVVLHGDFFRUGLQJWRWKHGHJUHHRIFKURPDWLQGHFRQGHQVDWLRQ'LWKLRWKUHLWRO'77D
VXEVWDQFHWKDWUHGXFHVFKURPDWLQGLVXOSKLGHERQGVZDVXVHGDVDSRVLWLYHFRQWUROIRUWKHVWDLQ
(TXDOTXDQWLWLHVRIVDPSOHDQG'77ZHUHSODFHGLQ(SSHQGRUIVDQGWKHUHDFWLRQZDVDOORZHG
WRSURJUHVVDWURRPWHPSHUDWXUHIRUPLQXWHVDIWHUWKLVWKHVPHDUVZHUHPDGHDQGEORZGULHG
WRSUHYHQWWKHUHDFWLRQFRQWLQXLQJRQWKHVOLGHV7KHQWKHVPHDUVZHUH[HGDQGVWDLQHGZLWK
7%DFFRUGLQJWRWKHSUHYLRXVO\GHVFULEHGSURWRFRO6SHUPZHUHHYDOXDWHGZLWKDSKDVHFRQWUDVW
PLFURVFRSHPLQLPXPVSHUPDWR]RDDW;DQGZHUHFODVVLHGLQPDLQFDWHJRULHV
DFFRUGLQJWRFKURPDWLQFRORXULQJDQGLQVXEFDWHJRULHVDFFRUGLQJWRVSHUPKHDGPRUSKRORJ\
DQGSUHVHQFHRIYDFXROHV
7XEXMWXMGEPEREP]WMW
'HVFULSWLYHVWDWLVWLFVDQGDQDO\VLVRIYDULDQFHIRUHYDOXDWLQJPDOHGLIIHUHQFHVZHUHSHUIRUPHG
6IWYPXW
$FFRUGLQJWRWKHGHJUHHRIFKURPDWLQGHFRQGHQVDWLRQWKUHHSDWWHUQVRIVWDLQLQJZLWK7%ZHUH
REVHUYHGLQDOSDFDVSHUPOLJKWEOXHQHJDWLYHZLWKRXWDOWHUDWLRQRIFKURPDWLQFRQGHQVDWLRQ
OLJKWYLROHWLQWHUPHGLDWHVRPHGHJUHHRIGHFRQGHQVDWLRQGDUNEOXHYLROHWSRVLWLYHKLJKGHJUHH
RIGHFRQGHQVDWLRQ7KHSHUFHQWDJHVREVHUYHGZHUHPHDQ6'7%SRVLWLYH7%
LQWHUPHGLDWHDQG7%QHJDWLYH,QWKHVSHUPDWR]RDLQFXEDWHGZLWK
'77PDLQFDWHJRULHVZHUHREVHUYHGUHDFWHGSRVLWLYHZLWK7%DQGQRQUHDFWHGQHJDWLYHZLWK
7%,QUHDFWHGVSHUPVXEFDWHJRULHVZHUHREVHUYHGYHU\GHFRQGHQVHGKHDGVH[WUHPHO\

&VIIHMRKERHKIRIXMGW
ODUJH KHDGV ZLWK ORWV RI YDFXROHV LQVLGH GHIRUPHG KHDGV ODUJH KHDGV ZLWK D PRGHUDWH
QXPEHURIYDFXROHVLQVLGHDQGKHDGVZLWKQRUPDOVKDSHDQGVL]H,QDGGLWLRQYDULDELOLW\
EHWZHHQPDOHVZDVREVHUYHGIRUSRVLWLYH3 EXWQRWIRULQWHUPHGLDWH7%VWDLQHGVSHUP
(MWGYWWMSR
7KH 7% VWDLQ KDV EHHQ XVHG LQ YDULRXV VSHFLHV WR HYDOXDWH VSHUP FKURPDWLQ FRQGHQVDWLRQ
(UHQSUHLVDHWDO%HOHWWLDQG0HOOR%HOHWWLHWDO6DUGR\HWDODQG
DOVRLQOODPDDQGJXDQDFR&DUUHWHURHWDOEXWKDVQRWEHHQUHSRUWHGLQDOSDFD
VSHUP
,QWKLVVWXG\ZHREVHUYHGWKHVDPHSDWWHUQVRI7%VWDLQLQJDVWKRVHREVHUYHGLQOODPDJXDQDFR
DQGHTXLQHVSHUP6DUGR\HWDO&DUUHWHURHWDO&DUUHWHURHWDO(UHQSUHLVD
HWDOUHSRUWHGSDWWHUQVRI7%VWDLQLQJLQKXPDQVSHUPDQGDOWKRXJKZHZHUHDEOH
WR GLVWLQJXLVK WKH IRXUWK SDWWHUQ WKHVH DXWKRUV GHVFULEH WKH HYDOXDWLRQ EHFRPHV PXFK PRUH
VXEMHFWLYH:LWKUHJDUGWRWKHYDULDELOLW\REVHUYHGEHWZHHQDOSDFDPDOHVLQWKH7%SRVLWLYH
VSHUPWKLVREVHUYDWLRQFRLQFLGHVZLWKWKDWIRXQGLQRWKHUVSHFLHVVXFKDVOODPDKXPDQDQGEXOO
%HGIRUGHWDO3DVWHXUHWDO9LH\WHVHWDO&DUUHWHURHWDO
7KHPHDQSHUFHQWDJHRI7%SRVLWLYHLQWHUPHGLDWHVSHUPLQDOSDFDZDVVLPLODUWR
7%SRVLWLYHLQWHUPHGLDWHOODPDVSHUPREVHUYHGLQHMDFXODWHVFROOHFWHGLQVXPPHU
DQGZDVKLJKHUWKDQWKDWREVHUYHGLQOODPDVSHUPFROOHFWHGGXULQJWKHZLQWHUVHDVRQ7%SRVLWLYH
LQWHUPHGLDWH/ODPDVSHUPVKRZHGVLJQLFDQWGLIIHUHQFHVLQ'1$FRQGHQVDWLRQ
EHWZHHQWKHZLQWHUDQGVXPPHUVHDVRQV&DUUHWHURHWDODQGWKHVHSUHOLPLQDU\GDWDZRXOG
VHHPWRLQGLFDWHWKDWWKHDOSDFDSHUKDSVHYLGHQFHWKHVDPHGLIIHUHQFHV7KLVZRXOGQHHGWREH
FRUURERUDWHGZLWKIXUWKHUVWXGLHV,QJXDQDFRHMDFXODWHVFROOHFWHGGXULQJ$SULOEHJLQQLQJRI
DXWXPQWKHPHDQSHUFHQWDJHRI7%SRVLWLYHLQWHUPHGLDWHVSHUPZDVKLJKHUWKDQ
WKDWREVHUYHGLQDOSDFDDQGOODPDVSHUP7KLVGLIIHUHQFHPLJKWEHEHFDXVHWKHJXDQDFRVKRZHG
VXERSWLPDOERG\FRQGLWLRQVDWWKHWLPHRIWKHVWXG\GXHWRORZQXWULWLRQDOFRQGLWLRQV
7KH SDWWHUQV ZH REVHUYHG LQ DOSDFD VSHUPDWR]RD LQFXEDWHG ZLWK '77 ZHUH H[DFWO\ WKH
VDPHDVWKRVHREVHUYHGLQOODPDJXDQDFRDQGHTXLQHVSHUPZKHQLQFXEDWLQJVDPSOHVZLWKWKH
UHGXFLQJDJHQWIRUPLQXWHV6LPLODUSDWWHUQVEXWLQGLIIHUHQWSURSRUWLRQVKDYHEHHQREVHUYHG
LQRWKHUVSHFLHVUDEELW%HLODQG*UDYHVUDP5RGULJXH]HWDOKXPDQ%DUUHUDHW
DODQGEXOO%HLODQG*UDYHV9LH\WHVHWDO,QWKRVHVWXGLHVDXWKRUVXVHG
KLJKHULQFXEDWLRQWLPHVDQGGLIIHUHQW'77FRQFHQWUDWLRQV7KHUHIRUHWKHXVHRIDUHGXFLQJDJHQW
DVDSRVLWLYHFRQWUROVKRXOGEHDGDSWHGWRHDFKVSHFLHV
'SRGPYWMSRW
,WLVSRVVLEOHWRXVH7%WRHYDOXDWHWKHGHJUHHRIFKURPDWLQGHFRQGHQVDWLRQLQDOSDFDVSHUPDWR]RD
VKRZLQJWKHVDPH7%SDWWHUQVDVLQRWKHU6$&DOVR'77FDQEHXVHGDVDSRVLWLYHFRQWURO
IRUWKLVWHFKQLTXH7ROXLGLQH%OXHVWDLQLQJZLOOEHXVHIXOIRUHYDOXDWLQJWKHHIIHFWVWKDWGLIIHUHQW
UHSURGXFWLYHELRWHFKQRORJLHVKDYHRQDOSDFDVSHUP'1$FRQGHQVDWLRQ
%GORS[PIHKIQIRXW
7KHSURMHFWZDVVXSSRUWHGE\WKH*UDQW1),1&\73,%$3810607KHDXWKRUV
ZLVKWRWKDQN0DUtD&KLOHQR(OYLUD&DQR'LDQD7ROHQWLQR/HQLQ%HQDYLGHVIRUWKHLUDVVLVWDQFH
LQWKHSURMHFW

&VIIHMRKERHKIRIXMGW
6IJIVIRGIW
%DUUHUD&$%0D]ROOL&3HOOLQJDQG&6WRFNHUW0HWDFKURPDWLFVWDLQLQJRIKXPDQVSHUPQXFOHLDIWHUUHGXFWLRQ
RIGLVXOSKLGHERQGV$FWD+LVWRFKHPLFD-HQD
%HGIRUG-0+,&DOYLQDQG*:&RRSHU7KHPDWXUDWLRQRIVSHUPDWR]RDLQWKHKXPDQHSLGLG\PLV-RXUQDORI
5HSURGXFWLRQDQG)HUWLOLW\6XSSO
%HLO5(DQG&1*UDYHV1XFOHDUGHFRQGHQVDWLRQRIPDPPDOLDQVSHUPDWR]RDFKDQJHVGXULQJPDWXUDWLRQDQG
LQYLWURVWRUDJH-RXUQDORI([SHULPHQWDO=RRORJ\
%HOHWWL0(DQG0/60HOOR&RPSDULVRQEHWZHHQWKHWROXLGLQHEOXHVWDLQDQGWKHIHXOJHQUHDFWLRQIRUHYDOXDWLRQ
RIUDEELWVSHUPFKURPDWLQFRQGHQVDWLRQDQGWKHLUUHODWLRQVKLSZLWKVSHUPPRUSKRORJ\7KHULRJHQRORJ\
%HOHWWL0(/GD)RQWRXUD&RVWDDQG00HQGHV*XDUGLHLUR0RUSKRPHWULFIHDWXUHVDQGFKURPDWLQFRQGHQVDWLRQ
DEQRUPDOLWLHVHYDOXDWHGE\WROXLGLQHEOXHVWDLQLQJLQEXOOVSHUPDWR]RD%UD]LOLDQ-RXUQDORI9HWHULQDU\5HVHDUFK
DQG$QLPDO6FLHQFH
&DUUHWHUR0,6*LXOLDQR&&DVDUHWWR0*DPEDURWWDDQG'1HLOG,QXHQFLDGHODHVWDFLyQGHODxRVREUHHO
$'1GHHVSHUPDWR]RLGHVGHOODPD,QYHW
&DUUHWHUR0,60*LXOLDQR&,&DVDUHWWR0&*DPEDURWWDDQG'01HLOG(YDOXDFLyQGHO$'1HVSHUPiWLFR
GHOODPDVXWLOL]DQGRD]XOGHWROXLGLQD,QYHW
&DUUHWHUR0,6*LXOLDQR$$JHUR03LQWR00LUDJD\D97UDVRUUDV-(JH\-YRQ7KXQJHQDQG'1HLOG
*XDQDFRVSHUPFKURPDWLQHYDOXDWLRQXVLQJ7ROXLGLQH%OXH5HSURGXFWLRQ)HUWLOLW\DQG'HYHORSPHQW
'LUHFWRU$6*LXOLDQR97UDVRUUDV0,&DUUHWHUR03LQWRDQG00LUDJD\D(OHFWURHMDFXODWLRQLQOODPD
/DPDJODPD-RXUQDORI&DPHO3UDFWLFHDQG5HVHDUFK
(UHQSUHLVD--(UHQSUHLVV7)UHLYDOGV06ODLGLQD5.UDPSH-%XWLNRYD$,YDQRYDQG'3MDQRYD7ROXLGLQH
EOXHWHVWIRUVSHUP'1$LQWHJULW\DQGHODERUDWLRQRILPDJHF\WRPHWU\DOJRULWKP&\WRPHWU\3DUW$$
0RUULV,'6+ROW/'L[RQDQG'5%ULVRQ7KHVSHFWUXPRI'1$GDPDJHLQKXPDQVSHUPDVVHVVHGE\
VLQJOHFHOOJHOHOHFWURSKRUHVLV&RPHWDVVD\DQGLWVUHODWLRQVKLSWRIHUWLOLVDWLRQDQGHPEU\RGHYHORSPHQW+XPDQ
5HSURGXFWLRQ
3DVWHXU;-//DXUHQW-$]pPD0-RXUOLQ3'HDJHDQG'*UDQJH'HFRQGHQVDWLRQLQYLWURGXQR\DXGX
VSHUPDWR]RLGHKXPDLQHWDQDO\VHGLPDJH&RPSWHV5HQGXVGHV6HDQFHVGHOD6RFLHWHGH%LRORJLHHWGHVHVOLDOHV

5RGULJXH]+&2KDQLDQDQG(%XVWRV2EUHJRQ1XFOHDUFKURPDWLQGHFRQGHQVDWLRQRIVSHUPDWR]RDLQYLWURD
PHWKRGIRUHYDOXDWLQJWKHIHUWLOL]LQJDELOLW\RIRYLQHVHPHQ,QWHUQDWLRQDO-RXUQDORI$QGURORJ\
6DUGR\0&0,&DUUHWHURDQG'1HLOG(YDOXDWLRQRIVWDOOLRQVSHUP'1$DOWHUDWLRQVGXULQJFU\RSUHVHUYDWLRQ
XVLQJWROXLGLQHEOXH$QLPDO5HSURGXFWLRQ6FLHQFH
7VDUHY,0%XQJXP$*LZHUFPDQ-(UHQSUHLVD7(EHVVHQ((UQVWDQG-(UHQSUHLVV(YDOXDWLRQRIPDOH
IHUWLOLW\SRUWHQWLDOE\WROXLGLQHEOXHWHVWIRUVSHUPFKURPDWLQVWUXFWXUHDVVHVVPHQW+XPDQ5HSURGXFWLRQ

9LH\WHV$/+2&LVDOHDQG05)HUUDUL5HODWLRQVKLSEHWZHHQWKHQXFOHDUPRUSKRORJ\RIWKHVSHUPRIEXOOV
DQGWKHLUIHUWLOLW\9HWHULQDU\5HFRUG
:DUG:6+.LVKLNDZD+$NXWVXDQG5<DQDJLPDFKL)XUWKHUHYLGHQFHWKDWVSHUPQXFOHDUSURWHLQVDUH
QHFHVVDU\IRUHPEU\RJHQHVLV=\JRWH

&VIIHMRKERHKIRIXMGW
(IVMZEXMSRSJIGSRSQMGZEPYIWJSVFVIHMEQIXIVIIGI
[IMKLXMREPTEGEW
/$OIRQVR-%XULWLFD54XLVSHDQG,4XLFDxR
8QLYHUVLGDG3~EOLFDGH1DYDUUD3DPSORQD6SDLQOHRDOIRQVR#XQDYDUUDHV
'HVFR+XDQFDYHOLFD+XDQFDYHOLFD3HUX
%FWXVEGX
(FRQRPLF YDOXHV IRU EUH GLDPHWHU DQG HHFH ZHLJKW LQ DOSDFDV ZHUH GHULYHG XVLQJ SURW
HTXDWLRQV 3DUDPHWHUV LQ WKH SURW HTXDWLRQ ZHUH FKRVHQ WR UHHFW WKH SURGXFWLRQ DQG
FRPPHUFLDOLVDWLRQ RI DOSDFD EUH LQ +XDQFDYHOLFD 3HUX ,QFRPH GHSHQGV RQ WKH ZHLJKW
DQG FRORXU RI HHFHV FRPPHUFLDOLVHG IURP HDFK RI WKH IRXU GLIIHUHQW FDWHJRULHV GHQHG E\
WKHWHFKQLFDO3HUXYLDQQRUPDWLYH([WUDQH())LQH)6HPL)LQH6)DQG&RDUVH&
%DVLFDOO\WKHIRXUFDWHJRULHVDUHGHWHUPLQHGE\WKHDPRXQWRIEUHLQWKHZKROHHHFHQHU
WKDQP!UHVSHFWLYHO\7KHVHOHFWLRQFULWHULDWRLPSURYH
WKHTXDOLW\DQGTXDQWLW\RIEUHSURGXFHGDUHUHVSHFWLYHO\WKHEUHGLDPHWHULQWKHPLGVLGHVLWH
')RIDOSDFDVDQGWKHJUHDV\HHFHZHLJKW39')ZDVDVVXPHGDVDQXQGHUO\LQJFRQWLQXRXV
YDULDEOHDQGWKUHVKROGYDOXHVIRUWKHIRXUTXDOLW\FDWHJRULHV())6)DQG&ZHUHDSSUR[LPDWHG
XVLQJWKHUHODWLRQVKLSEHWZHHQ')DQGWKHEUHGLDPHWHULQWKHZKROHHHFH(FRQRPLFZHLJKWV
ZHUHGHULYHGE\UVWGHULYDWLYHVRISURWHTXDWLRQZLWKUHVSHFW')DQG39FRQVLGHULQJFRVWV
XQFRUUHODWHGZLWKERWKSDUDPHWHUV7KHSULFHVSDLGLQWKHUHJLRQRI+XDQFDYHOLFDIRUWKHGLIIHUHQW
FDWHJRULHVDQGFRORXUVZKLWHFUHDPRWKHUFRORXUVLQWKHSHULRGZHUHFRQVLGHUHG
WRREWDLQHFRQRPLFYDOXHVDQGWRDQDO\VHWKHHIIHFWRIFKDQJHVLQEUHSULFH(FRQRPLFYDOXHV
ZHUHJUHDWHUIRU39WKDQIRU')DQGJUHDWHUIRUZKLWHDQGFUHDPDOSDFDVWKDQIRUDOSDFDVZLWK
RWKHUFRORXUV6HQVLWLYLW\DQDO\VLVRIHFRQRPLFYDOXHVWRFKDQJHVLQSULFHVKRZHGWKDWWKH\YDU\
FRQVLGHUDEO\DQGDOVRWKHUDWLRRIHFRQRPLFYDOXHVYDULHVIRU')DQG397KH')VHHPVWREH
HFRQRPLFDOO\PRUHLPSRUWDQWZKHQSULFHVSDLGWRSURGXFHUVDUHORZHU1HYHUWKHOHVVUHVXOWV
VKRXOGQRWEHDSSOLHGLQEUHHGLQJSURJUDPPHVZLWKRXWRWKHUDQDO\VHVEHLQJSHUIRUPHGXVLQJ
RWKHUSDUWLFLSDWRU\DSSURDFKHV
.H\ZRUGV9LFXJQDSDFRVTXDOLW\VHOHFWLRQ$QGHDQ
-RXVSHYGXMSR
,Q +XDQFDYHOLFD VLWXDWHG LQ WKH 3HUXYLDQ $QGHDQ 3ODWHDX WKH VPDOO KHUGHUV RI DOSDFDV
FRPPHUFLDOLVH WKHLU EUH WKURXJK PLGGOHPHQ IURP ELJ WH[WLOH HQWHUSULVHV RU SDUWLFLSDWLQJ
DVVRFLDWLRQV,QWKHODWWHUVLWXDWLRQWKHHQWLUHHHFHVDUHFDUULHGWRDVWRUHFHQWUHDIWHUVKHDULQJDQG
FDWHJRULVHGIROORZLQJWKH3HUXYLDQ7HFKQLFDO6WDQGDUGV1737KHVHVWDQGDUGV
LQGLFDWHIRXUGLIIHUHQWFDWHJRULHVGHWHUPLQHGE\LWVSHUFHQWDJHRIKLJKHVWTXDOLW\EUHV
P([WUD)LQHPLQLPXPRIKLJKHVWTXDOLW\EUHV)LQHEHWZHHQDQG6HPL
)LQHEHWZHHQDQGDQG&RDUVHOHVVWKDQ
$IWHU FDWHJRULVDWLRQ WKH HHFHV DUH ERXJKW IURP SURGXFHUV DFFRUGLQJ WR WKHLU FDWHJRU\ DQG
WKH\PRYHWRWKHIROORZLQJVWHSRIWKHEUHFKDLQFRPPHUFLDOLVDWLRQDQGWUDQVIRUPDWLRQWKH
FODVVLFDWLRQDFFRUGLQJWRWKH3HUXYLDQ7HFKQLFDO6WDQGDUGV1737KHEUHRI
HHFHVLVVHSDUDWHGDFFRUGLQJWRLWVGLDPHWHULQYHFODVVHV%DE\P)OHHFHEHWZHHQ
DQG0HGLXP)OHHFHEHWZHHQDQGP+XDUL]REHWZHHQDQG
DQG&RDUVH!7KHFDWHJRULVDWLRQDQGFODVVLFDWLRQDUHPDGHLQVLWXE\WUDLQHGZRPHQ

&VIIHMRKERHKIRIXMGW
7KLVFRPPHUFLDOLVDWLRQPRGHOLPSOLHVWKDWSURGXFHUVLQFRPHV,ZKHQVHOOLQJWKHEUHDUHQRW
GHWHUPLQHGE\WKHDPRXQWRIEUHRIHDFKRIWKHYHFODVVHVSURGXFHG%DE\)OHHFH0HGLXP
)OHHFH+XDUL]R&RDUVHEXWE\WKHDPRXQWRIHHFHVVROGIURPHDFKRIWKHIRXUFDWHJRULHV
([WUD)LQH)LQH6HPL)LQH&RDUVH6RSULFHVSDLGIRUHHFHVGHSHQGRQZHLJKWFDWHJRU\
DOSDFDW\SH+XDFD\DRU6XULDQGFRORXUZKLWHFUHDPRURWKHUFRORXUV7KHFRVWV&FDQ
EHFRQVLGHUHGLQGHSHQGHQWO\IURPWKHTXDQWLW\DQGTXDOLW\RIEUHSURGXFHGEHFDXVHRIWKH
SURGXFWLRQV\VWHPLQZKLFKDOSDFDSURGXFWLRQLVEDVHGLQWKLVUHJLRQ0RQWHVHWDO
'LIIHUHQWLQLWLDWLYHVKDYHEHHQFDUULHGRXWLQWKH+XDQFDYHOLFDUHJLRQWRJHQHWLFDOO\LPSURYH
DOSDFDEUHSURGXFWLRQ7DNLQJLQWRDFFRXQWWKHSD\PHQWV\VWHPWKHPDLQEUHHGLQJREMHFWLYHV
DUHWKHTXDQWLW\DQGWKHTXDOLW\RIEUH$VLQRWKHUDQLPDOVSHFLHVSURGXFLQJKLJKTXDOLW\EUH
WKHWRWDOZHLJKWDQGWKHGLDPHWHUDUHWKHWZRWUDLWVZLWKPRVWHFRQRPLFUHOHYDQFH7RHYDOXDWH
ERWKREMHFWLYHVWKHJUHDV\HHFHZHLJKWDQGWKHPHDQEUHGLDPHWHUPHDVXUHGLQDVDPSOHIURP
WKHPLGVL]HVLWHRIDOSDFDVDUHFRQVLGHUHGDVVHOHFWLRQFULWHULD4XLVSHHWDO
7KHVHOHFWLRQIRUWZRRUPRUHWUDLWVFDQEHGRQHLQEUHHGLQJSURJUDPPHVXVLQJDOLQHDUIXQFWLRQ
E\ZHLJKWLQJWKHJHQHWLFYDOXHRIHDFKWUDLWE\LWVHFRQRPLFYDOXH7KHUHVXOWLQJYDOXHRQH
IRUHDFKDQLPDOLVWKHYDOXHWREHFRQVLGHUHGIRUVHOHFWLQJIXWXUHUHSURGXFHUV7LOOQRZLQWKH
+XDQFDYHOLFDUHJLRQHFRQRPLFZHLJKWVWREHDSSOLHGWRJUHDV\HHFHZHLJKWDQGPHDQEUH
GLDPHWHUKDYHQRWEHHQDQDO\VHGLQGHWDLO
7KHDLPRIWKLVZRUNZDVUVWWRDQDO\VHSULFHVSDLGIRUWKHEUHRI+XDFD\DDOSDFDWRSURGXFHUV
LQWKH+XDQFDYHOLFDUHJLRQGXULQJWKHODVWYH\HDUVDQGDFFRUGLQJWRWKHTXDOLW\DQGFRORXUDQG
VHFRQGWRDSSUR[LPDWHWKHHFRQRPLFYDOXHVIRUJUHDV\HHFHZHLJKWDQGPHDQEUHGLDPHWHU
WDNLQJLQWRDFFRXQWWKHSULFHVSDLGGXULQJWKDWSHULRG
1EXIVMEPERHQIXLSHW
,QIRUPDWLRQDERXWSULFHVSDLGIRU+XDFD\DEUHWRDOSDTXHURVLQWKH+XDQFDYHOLFDUHJLRQZHUH
FROOHFWHGIURP$352$/$VRFLDFLyQGH3URPRWRUHV$OSDTXHURVGH+XDQFDYHOLFD'DWDZHUH
FRPSXWHGIRUGLIIHUHQWTXDOLW\FDWHJRULHVEUHFRORXUDQGFRPPHUFLDOFDPSDLJQV3ULFHVZHUH
QRWDOZD\V[HGIRUWKHGLIIHUHQWFDPSDLJQVWKURXJKRXWWKH\HDUVRPHWLPHVYDU\LQJFRQVLGHUDEO\
VHH7DEOH
3URW HTXDWLRQV ZHUH XVHG WR FDOFXODWH HFRQRPLF YDOXHV E\ SDUWLDO GLIIHUHQWLDWLRQ WR EUH
GLDPHWHUDQGHHFHZHLJKW%HFDXVHRIDSD\PHQWV\VWHPIRUEUHTXDOLW\WKDWFRUUHVSRQGVWRD
FDWHJRULFDOWUDLWWKH173FDWHJRULHVDQXQGHUO\LQJFRQWLQXRXVYDULDEOHZDVDVVXPHGWR
FRPSXWHSDUWLDOGHULYDWLYHVDVLQ%HNPDQDQG9DQ$UHQGRQN
$VVXPLQJDQRUPDOGLVWULEXWLRQIRUPHDQEUHGLDPHWHUDVIRXQGLQSUHYLRXVZRUNV0RQWHV
HWDODQGFRQVLGHULQJWKHYDULDELOLW\HVWLPDWHGLQWKHZKROHHHFHE\$\ODQ3DUNHUDQG
0F*UHJRUWKUHVKROGYDOXHVZHUHFRPSXWHGIRUWKHPHDQEUHGLDPHWHURIHDFKFDWHJRU\
()([WUD)LQH))LQH6)6HPL)LQH&&RDUVHLQWKHZKROHHHFH)LUVWWKHWKUHHWKUHVKROG
YDOXHVWKDWGHWHUPLQHWKHIRXUFDWHJRULHVZHUHFDOFXODWHGLQWKHVWDQGDUGQRUPDOGLVWULEXWLRQ
DQG6HFRQGWDNLQJLQWRDFFRXQWWKDWWKH\VKRXOGFRUUHVSRQGWRDQDYHUDJH
YDOXHRIPDQGDVVXPLQJDQHVWLPDWHGVWDQGDUGGHYLDWLRQRIP$\ODQ3DUNHUDQG
0F*UHJRUWKH\ZHUHWUDQVODWHGWRPHDQEUHGLDPHWHUYDOXHLQWKHZKROHHHFH
DQG P )LQDOO\ XVLQJ WKH UHJUHVVLRQ HTXDWLRQ HVWLPDWHG E\$\ODQ3DUNHU DQG
0F*UHJRUUHODWLQJPHDQEUHGLDPHWHULQWKHZKROHHHFH')9DQGLQWKHPLGVL]HVLWH
VDPSOLQJSRLQWXVHGDVVHOHFWLRQFULWHULRQ')>')9 ')@WKUHVKROGYDOXHVZHUH
HVWDEOLVKHGDVDQGP

&VIIHMRKERHKIRIXMGW
8EFPI 4VMGIW MR WSPIWPF TEMH F] %463%0 MR HMJJIVIRX GEQTEMKRW JSV XLI GEXIKSVMWIH FVI XS TVSHYGIVW
EGGSVHMRKXSUYEPMX]ERHGSPSYV
'EQTEMKR ;LMXI

WX
RH
WX
WX
RH
WX

WX
RH
1IER
WH
'VIEQ
3XLIVGSPSYVW
)*
7*
'
)*
7*
'
)*
7*
'

'EXIKSVMIW)*)\XVE*MRI**MRI7*7IQM*MRI''SEVWI
2QFHWKHFDWHJRULFDOYDULDEOHZDVWUDQVIRUPHGWKHHFRQRPLFZHLJKWLQJVIRUPHDQEUHGLDPHWHU
LQWKHVDPSOLQJSRLQW')DQGIRUJUHDV\HHFHZHLJKW39ZHUHFRPSXWHG$VVXPLQJWKDW
WKHEUHSURGXFWLRQFRVWLVLQGHSHQGHQWRIERWKVHOHFWLRQFULWHULDWKHFDOFXODWLRQZDVVLPSOLHG
WRSDUWLDOGHULYDWLRQRILQFRPHIXQFWLRQ6RIRUHDFKFRORXUDQGVWRULQJFDPSDLJQWKHLQFRPH
ZLOOEHGHWHUPLQHGE\
, WSV>WW@SV>WW@SV>W@SV
ZKHUH
WLVWKHDFFXPXODWHGVWDQGDUGQRUPDOGLVWULEXWLRQ
WLLVWKHGLVWDQFHEHWZHHQWKHPHDQEUHGLDPHWHULQWKHVDPSOLQJSRLQWDQGWKHWWKUHVKROG
YDOXHRILFDWHJRU\LQXQLWVRIWKHXQGHUO\LQJVWDQGDUGQRUPDOVFDOH
SLLVWKHZHLJKWLQSRXQGVRIDHHFHIURPLFDWHJRU\
VLLVWKHDPRXQWRIVROHVSDLGE\SRXQGRIDHHFHIURPLFDWHJRU\
&RQVLGHULQJ')DQG39DVLQGHSHQGHQW39 S S S SDOWKRXJKUHODWHGUHODWLRQVKLSLVORZ
4XLVSHHWDODQGJLYHQWKDWWKHGHULYDWLYHRI[LVWKHGHQVLW\IXQFWLRQ>[ [@
WKHH[SUHVVLRQWKDWGHWHUPLQHVWKHHFRQRPLFYDOXHIRU')ZDV
,,,')
WSVWSVWSVWSVWSVWSV
WSVSVWSVSVWSVSV
SY>WVVWVVWVV@

6LPLODUO\WKHH[SUHVVLRQWKDWGHWHUPLQHVWKHHFRQRPLFYDOXHIRU39ZDV
,,,39
WV>WW@V>WW@V>W@V

&VIIHMRKERHKIRIXMGW
WVVWVVWVVV
9DOXHVIRUWLWL\WLIRUWKH173FDWHJRULHVLQHDFKEUHFRORXUFODVVZKLWH

FUHDP DQG RWKHU FRORXUV ZHUH REWDLQHG FRQVLGHULQJ PHDQ DQG VWDQGDUG GHYLDWLRQ YDOXHV
HVWLPDWHGE\2ULDHWDO7KHDYHUDJHHHFHZHLJKWZDVFRQVLGHUHGRIOEIROORZLQJWKH
HVWLPDWLRQVRI4XLVSHHWDOLQZKLWH+XDFD\DV)RUFUHDPDQGRWKHUFRORXUVDQLPDOVWKH
VDPHZHLJKWZDVDVVXPHGEHFDXVHRIWKHODFNRIHVWLPDWHVLQWKHUHJLRQ
7DEOHVKRZVWKHSULFHVRI+XDFD\DDOSDFDEUHSDLGE\$352$/LQWKHSHULRG
)LUVW WKH LPSRUWDQW YDULDWLRQV EHWZHHQ FRORXUV DQG TXDOLW\ FDWHJRULHV VKRXOG EH QRWHG7KH
ZKLWHEUHDQG([WUD)LQHDQG)LQHFDWHJRULHVDUHWKHPRVWYDOXHG,QVRPHFDPSDLJQVWKHSULFH
SDLGIRUWKHFRDUVHZKLWHEUHLVVLPLODUWRWKDWSDLGIRUWKH([WUD)LQHFRORXUHGEUH
7DEOH6HFRQGWKHYDULDWLRQVEHWZHHQ\HDUVDQGHYHQFDPSDLJQVRIWKHVDPH\HDUDUHDOVR
YHU\LPSRUWDQW$VDQH[DPSOHWKHPD[LPXPGLIIHUHQFHREVHUYHGIRUWKHPRUHYDOXDEOHEUH
([WUD)LQH:KLWHZDVVROHVOEDYDULDWLRQRIZLWKUHVSHFWWRWKHORZHVWSULFH,QWKLV
VFHQDULRLWLVQHFHVVDU\WRDQDO\VHFDUHIXOO\WKHHFRQRPLFZHLJKWLQJVRITXDOLW\DQGTXDQWLW\RI
EUHSURGXFHG
7KHGHULYHGHFRQRPLFZHLJKWLQJVDUHVKRZQLQ7DEOH7KH\UHSUHVHQWWKHGLIIHUHQFHLQSURWSHU
DQLPDOEHWZHHQWKHSUHYLRXVDQGSRVWHULRUVLWXDWLRQVRIWKHJHQHWLFLPSURYHPHQWRI')DQG39
LHWKHPDUJLQDOSURWIRUWKHGLPLQXWLRQRI')LQDPDQGWKHDXJPHQWDWLRQRI39LQDSRXQG
6RZKHQ')LVGHFUHDVHGDPWKHSURWLVLQFUHDVHGEHWZHHQDQGVROHVSHUZKLWHDOSDFD
EHWZHHQDQGSHUFUHDPDOSDFDDQGEHWZHHQDQGSHUDOSDFDZLWKDQRWKHUFRORXU
6LPLODUO\LQFUHDVLQJWKHHHFHZHLJKWE\DSRXQGLPSOLHVLQFUHDVLQJWKHSURWEHWZHHQDQG
VROHVSHUZKLWHDOSDFDEHWZHHQDQGSHUFUHDPDOSDFDDQGEHWZHHQDQGSHU
DOSDFDZLWKRWKHUFRORXU7KHVHYDOXHVVKRZWKHGLIIHUHQFHVLQWKHSURWDELOLW\RIVHOHFWLQJZKLWH
DOSDFDVUDWKHUWKDQFRORXUHGDOSDFDVHVSHFLDOO\ZLWKFRORXUVGLIIHUHQWIURPFUHDP
8VLQJWKHUDWLREHWZHHQWKHHFRQRPLFYDOXHVRIGLDPHWHUDQGZHLJKWLWFDQEHREVHUYHGWKDW
WKHLQFUHDVHE\DSRXQGRIZHLJKWHHFHLVPRUHSURWDEOHWKDQWKHLPSURYHPHQWRIPHDQEUH
GLDPHWHUE\LWVUHGXFWLRQLQDP7KLVLVHVSHFLDOO\WUXHLQFRORXUHGDOSDFDVEXWQRWVRFOHDULQ
ZKLWHDQGFUHDPDOSDFDV1HYHUWKHOHVVWKHUHVXOWVFRQUPWKHHFRQRPLFLQWHUHVWLQGHFUHDVLQJ
WKHEUHGLDPHWHUDVVKRZHGLQRWKHUZRUNVFDUULHGRXWLQDOSDFDV0F*UHJRU
+RZHYHU WR LQWHUSUHW WKHVH UHVXOWV SURSHUO\ LQ WHUPV RI WKH VHOHFWLRQ LQWHUHVW RI TXDOLW\ YV
TXDQWLW\RWKHUSDUDPHWHUVVKRXOGEHFRQVLGHUHG4XLVSHHWDOHVWLPDWHGWKHH[SHFWHG
JHQHWLFSURJUHVVXQGHUGLIIHUHQWVFHQDULRVDQGIRXQGJXUHVUDQJLQJIURPDQGP
IRU')DQGDQGOEIRU39)ROORZLQJWKHVHUHVXOWVWKHSURWLQFUHDVHFRXOGEHEHWZHHQ
DQGVROHVSHUDQLPDO\HDUIRUEUHTXDOLW\VHOHFWLRQDQGEHWZHHQDQGVROHVIRU
EUHTXDQWLW\VHOHFWLRQ
2QHODVWUHPDUNFRQFHUQVWKHUHODWLRQVKLSEHWZHHQWKHUHOHYDQFHRIVHOHFWLRQIRUEUHTXDOLW\
ZLWKDQHFRQRPLFFRQWH[W:KHQWKHEUHSULFHLQFUHDVHVLQWKHUHJLRQDOPDUNHWRI+XDQFDYHOLFD
WKHLQWHUHVWLQSURGXFLQJEUHRIJRRGTXDOLW\LVUHGXFHGHVSHFLDOO\IRUWKHPRUHYDOXDEOHFRORXUV
)LJXUH6HOHFWLRQIRUQHVWEUHVHHPVWREHOHVVSURWDEOHLQDJRRGHFRQRPLFFRQWH[WEXW
OHVVULVN\EHFDXVHRIWKHKXJHYDULDWLRQVREVHUYHGLQSULFHVSDLGWRDOSDFDSURGXFHUV

&VIIHMRKERHKIRIXMGW
8EFPI)GSRSQMGZEPYIWJSVQIERFVIHMEQIXIVQ ERHKVIEW]IIGI[IMKLXPF EGGSVHMRKXSGSPSYVERH

GEQTEMKRMRWSPIW
;LMXI
'VIEQ
3XLIVGSPSYVW
'EQTEMKR (MEQIXIV ;IMKLX 6EXMS
(MEQIXIV ;IMKLX 6EXMS
(MEQIXIV ;IMKLX 6EXMS

WX
RH
WX
WX
RH
WX

WX
RH
%ZIVEKI

(MEQIXIVIGSRSQMGZEPYI;IMKLXIGSRSQMGZEPYI
'SQTYXIH[MXLXLIEZIVEKITVMGIWTEMHJSVXLIIRXMVITIVMSH
(FRQRPLFYDOXHVUDWLR
ILEUHGLDPHWHUIOHHFHZHLJKW

:KLWH
&UHDP

2WKHUFRORXUV

3ULFHRIILEUH6HPL)LQHFDWHJRU\LQVROHVOE
*MKYVI6IPEXMSRWLMTFIX[IIRXLITVMGISJFVIXEOMRKEWVIJIVIRGIXLIGEXIKSV]7IQM*MRI ERHXLIVIPIZERGI
SJWIPIGXMSRJSVQIERFVIHMEQIXIV[MXLVIWTIGXXLIKVIEW]IIGI[IMKLXVEXMSFIX[IIRMXWIGSRSQMGZEPYIW
'SRGPYWMSR
7KH UHVXOWV LQGLFDWH D KLJK YDULDELOLW\ LQ WKH SULFH RI DOSDFD EUH LQ WKH UHJLRQDO PDUNHW RI
+XDQFDYHOLFD7KHUHIRUHWKHGHULYDWLRQRIUREXVWHFRQRPLFYDOXHVIRUWKHTXDOLW\DQGTXDQWLW\
RIEUHLVULVN\LQWKHPHGLXPWRORQJWHUPQHHGHGE\DEUHHGLQJSURJUDPPH+RZHYHUIURPD

&VIIHMRKERHKIRIXMGW
FRQVHUYDWLYHSRLQWRIYLHZDQGFRQVLGHULQJDORZSULFHVFHQDULRWKHVHOHFWLRQIRUEUHTXDOLW\LV
FOHDUO\MXVWLHG7KHSURWLQFUHDVHH[SHFWHGIRUVHOHFWLRQLQZKLWH+XDFD\DDOSDFDVZRXOGPRUH
HDVLO\MXVWLI\WKHEUHHGLQJSURJUDPPHFRVWWKDWLQFUHDPRURWKHUFRORXUHG+XDFD\DDOSDFDV7KH
HFRQRPLFYDOXHVGHULYHGLQWKHSUHVHQWZRUNVKRXOGEHLQWHUSUHWHGZLWKFDXWLRQDQGWKH\FDQQRW
EHGLUHFWO\HPSOR\HGLQDEUHHGLQJSURJUDPPHLQWKHUHJLRQEHFDXVHLWZRXOGEHGHVLUDEOHWR
UVWXVHRWKHUPHWKRGRORJLHVOLNHWKDWHPSOR\HGE\*L]DZHWDOEDVHGRQDSDUWLFLSDWLYH
GHQLWLRQRIEUHHGLQJJRDOV
%GORS[PIHKIQIRXW
7KDQNVWR$352$/IRUSURYLGLQJWKHGDWDRQSULFHVDQGDPRXQWVRIEUHWKH\FRPPHUFLDOLVHG
LQWKH+XDQFDYHOLFDUHJLRQ
6IJIVIRGIW
$\ODQ3DUNHU-DQG00F*UHJRU2SWLPLVLQJVDPSOLQJWHFKQLTXHVDQGHVWLPDWLQJVDPSOLQJYDULDQFHRIHHFH
TXDOLW\DWWULEXWHVLQDOSDFDV6PDOO5XPLQDQW5HVHDUFK
%HNPDQ+DQG-$0YDQ$UHQGRQN'HULYDWLRQRIHFRQRPLFYDOXHVIRUYHDOEHHIDQGPLONSURGXFWLRQWUDLWV
XVLQJSURWHTXDWLRQV/LYHVWRFN3URGXFWLRQ6FLHQFH
*L]DZ 6 +.RPHQ DQG -$0 YDQ$UHQGRQN 3DUWLFLSDWRU\ GHQLWLRQ RI EUHHGLQJ REMHFWLYHV DQG VHOHFWLRQ
LQGH[HVIRUVKHHSEUHHGLQJLQWUDGLWLRQDOV\VWHPV/LYHVWRFN6FLHQFH
0RQWHV0,4XLFDxR54XLVSH(4XLVSHDQG/$OIRQVR4XDOLW\FKDUDFWHULVWLFVRI+XDFD\DDOSDFDEUH
SURGXFHGLQWKH3HUXYLDQ$QGHDQ3ODWHDXUHJLRQRI+XDQFDYHOLFD6SDQLVK-RXUQDORI$JULFXOWXUDO5HVHDUFK

1731RUPDVWpFQLFDVSHUXDQDV3HUXYLDQWHFKQLFDOVWDQGDUGV,1'(&23,
2ULD,,4XLFDxR(4XLVSHDQG/$OIRQVR9DULDELOLGDGGHOFRORUGHODEUDGHDOSDFDHQOD]RQDDOWRDQGLQDGH
+XDQFDYHOLFD3HU~9DULDELOLW\RIDOSDFDEUHFRORXULQWKHKLJKODQGUHJLRQRI+XDQFDYHOLFD3HUX$QLPDO*HQHWLF
5HVRXUFHV,QIRUPDWLRQ
4XLVSH(&/$OIRQVR$)ORUHV+*XLOOpQDQG<5DPRV%DVHVSDUDHVWDEOHFHUXQSURJUDPDGHPHMRUDGH
DOSDFDVHQODUHJLRQDOWRDQGLQDGH+XDQFDYHOLFD3HU~%DVHVWRDQLPSURYHPHQWSURJUDPRIWKHDOSDFDVLQKLJKODQG
UHJLRQDW+XDQFDYHOLFD3HUX$UFKLYRVGH=RRWHFQLD

&VIIHMRKERHKIRIXMGW
%QMGVSWEXIPPMXIWXYH]SRXLIKIRIXMGHMWXERGIFIX[IIR
7YVMERH,YEGE]ETLIRSX]TIWMR4IVYZMEREPTEGE:MGYKRE
TEGSW
9/D0DQQD$/D7HU]D6'KDUDQHHGKDUDQ6*KH]]L6$UXPXJDP6DUDYDQDSHUXPDO
1$SD]D7+XDQFD5%R]]LDQG&5HQLHUL
'HSDUWPHQWRI(QYLURQPHQWDO6FLHQFHV8QLYHUVLW\RI&DPHULQR,WDO\
YLQFHQ]RODPDQQD#XQLFDPLW
,1,$,//3$3XQR5LQFRQDGD6DOFHGR3XQR3HUX
'HSDUWPHQWRI$JULFXOWXUDO%LRWHFKQRORJLHV8QLYHUVLW\RI)ORUHQFH,WDO\
%FWXVEGX
7ZRFRDWSKHQRW\SHVH[LVWLQDOSDFDWKH+XDFD\DDQGWKH6XUL7KHWZRFRDWVKDYHGLIIHUHQW
WH[WLOHFKDUDFWHULVWLFVDQGGLIIHUHQWSULFHVRQWKHPDUNHW$OWKRXJKSUHVHQWVFLHQWLFNQRZOHGJH
VXJJHVWVDVLPSOHJHQHWLFPRGHORILQKHULWDQFHWKHUHLVDWHQGHQF\WRPDQDJHDQGFRQVLGHU
WKHWZRSKHQRW\SHVDVWZRGLIIHUHQWEUHHGV$PLFURVDWHOOLWHSDQHOZDVXVHGLQWKLVVWXG\WR
DVVHVVJHQHWLFGLVWDQFHEHWZHHQ6XULDQG+XDFD\DDOSDFDVLQDVDPSOHRIQRQUHODWHGDQLPDOV
IURPWZRSKHQRW\SLFDOO\SXUHRFNVDWWKH,OOSD3XQRH[SHULPHQWDOVWDWLRQLQ4XLPVDFKDWD
3HUX7KHDQLPDOVDUHSDUWRIDJHUPSODVPHVWDEOLVKHGDSSUR[LPDWHO\\HDUVDJRDQGKDYH
EHHQ EUHG VHSDUDWHO\ DFFRUGLQJ WR WKHLU FRDW W\SH VLQFH WKHQ *HQHWLF YDULDELOLW\ SDUDPHWHUV
ZHUHDOVRFDOFXODWHG7KHFRGRPLQDQWGDWDZDVVWDWLVWLFDOO\DQDO\VHGXVLQJWKHVRIWZDUH*HQDOH[
3K\OLS DQG )VWDW 7KH VDPSOH ZDV WHVWHG IRU +DUG\:HLQEHUJ HTXLOLEULXP
+:(DQGDIWHUVWULFW%RQIHUURQLFRUUHFWLRQRQO\RQHORFXV/&$VKRZHGGHYLDWLRQIURP
HTXLOLEULXP 3 /LQNDJH GLVHTXLOLEULXP /' ZDV DOVR WHVWHG DQG ORFL DVVRFLDWLRQV
VKRZHGVLJQLFDQWGLVHTXLOLEULXP2EVHUYHGKHWHUR]\JRVLV+R 6( H[SHFWHG
KHWHUR]\JRVLV+H 6( QXPEHURIDOOHOHV1D 6( DQG)L[DWLRQ
LQGH[) 6( DUHFRPSDUDEOHWRGDWDIURPSUHYLRXVVWXGLHV0HDVXUHVRIJHQHWLF
GLVWDQFHZHUHIRU1HLVDQGIRU&DYDOOL6IRU]DV7KHDQDO\VLVRIPROHFXODUYDULDQFH
UHSRUWHGQRH[LVWLQJYDULDQFHEHWZHHQSRSXODWLRQV&RQVLGHULQJWKHRULJLQRIWKHDQLPDOVWKHLU
SRVWGRPHVWLFDWLRQHYROXWLRQDQGWKHUHSURGXFWLYHSUDFWLFHVLQSODFHWKHUHVXOWVVXJJHVWWKDW
WKHUHLVQRJHQHWLFGLIIHUHQWLDWLRQEHWZHHQWKHWZRSRSXODWLRQVIRUWKHVWXGLHGORFL
.H\ZRUGVDOSDFD9LFXJQDSDFRVPLFURVDWHOOLWHJHQHWLFGLVWDQFHJHQHWLFGLYHUVLW\
-RXVSHYGXMSR
7ZRFRDWSKHQRW\SHVH[LVWLQDOSDFDQDPHO\WKH+XDFD\DDQGWKH6XUL7KH\GLIIHUSKHQRW\SLFDOO\
LQWHUPVRIHHFHVWUXFWXUHWKHUVWRQHEHLQJDFODVVLFDOO\EXLOWHHFHFRPSDFWEXON\DQGZLWK
KLJKEUHFULPSVLPLODUWRDPHULQRHHFHDQGWKHVHFRQGRQHDHHFHZLWKORQJHUDQGOXVWURXV
EUHRUJDQLVHGLQGHQHGKDQJLQJORFNVPRUHVLPLODUWRD/LQFROQRUWRDQ$QJRUDW\SH
RIHHFH7KHVHWZRSKHQRW\SHVDOVRGLIIHUZLWKUHJDUGWREUHVWUXFWXUHDQGFKDUDFWHULVWLFV
$QWRQLQLHWDO0F*UHJRUDQG%XWOHU)UDQNHWDO
,QWHUPVRIGHPRJUDSK\WKHUHLVDSUHGRPLQDQFHRIWKH+XDFD\DW\SHZKLFKUHSUHVHQWV
RIWKHDOSDFDHHFHSURFHVVHGLQ3HUX7KLVRFFXUVGHVSLWHWKHIDFWWKDWWKH6XULWUDLWVHHPV
WRVHJUHJDWHLQDYHU\VLPLODUZD\WRDVLQJOHGRPLQDQWJHQHRUDKDSORW\SH3RQ]RQLHWDO
$GLIIHUHQWGLVWULEXWLRQRISKHQRW\SHVFDQEHREVHUYHGLQ1RUWK$PHULFD(XURSHDQG
$XVWUDOLD ZKHUH JURZLQJ LQWHUHVW IURP ERWK WKH WH[WLOH LQGXVWU\ DQG EUHHGHU DVVRFLDWLRQV LQ
WKH6XULEUHKDVOHGWRLQFUHDVLQJ6XUL+XDFD\DUDWLRVDQGRIWHQWRDSDLGSUHPLXPIRU6XUL

&VIIHMRKERHKIRIXMGW
EUHLQWKHVDPHQHQHVVUDQJHDV+XDFD\D0F*UHJRU2YHUWKH\HDUVWKLVWUHQGKDV

JHQHUDWHGWZRGLIIHUHQWVFKRROVRIWKRXJKWDERXWWKHZD\WKHWZRSKHQRW\SHVVKRXOGEHEUHG
FODVVLHGDQGJHQHWLFDOO\PDQDJHG7KLVLVPDLQO\WUXHDWDIDUPLQJDQGEUHHGHUDVVRFLDWLRQ
OHYHOLQ1RUWK$PHULFDDQGLQ$XVWUDOLDZKHUHLWLVRIWHQUHFRPPHQGHGWRFRQVLGHUDQGPDQDJH
WKHWZRSKHQRW\SHVDVWZRVHSDUDWHEUHHGVLQRUGHUWRNHHSWKH6XULOLQHSXUH%D\FKHOLHU
7KLVLVFRQWUDU\WRSUHVHQWVFLHQWLFWKHRULHVZKLFKVXJJHVWWKDWWKHWZRSKHQRW\SHVDUH
TXDOLWDWLYHWUDLWVGHWHUPLQHGE\RUORFL3UHVFLXWWLQLHWDO
4STYPEXMSRKIRIXMGWF]QIERWSJQMGVSWEXIPPMXIEREP]WMW
$PLFURVDWHOOLWHPDUNHUVSDQHOKDVEHHQXVHGE\WKH$5,$OSDFD5HJLVWU\,QFVLQFH
PDLQO\ IRU SDUHQWDJH YHULFDWLRQ DQG KDV IRXQG RWKHU DSSOLFDWLRQV WKURXJKRXW WKH \HDUV LQ
RWKHUHOGVVXFKDVJHQRPHPDSSLQJSRSXODWLRQVWUXFWXUHDQGFRPSDUDEOHJHQRPHDQDO\VLV
$VKLJKOLJKWHGE\VHYHUDODXWKRUV0XQ\DUGHWDO4LXHWDOWKHFRQWLQXRXVDQG
RQJRLQJHIIRUWLQVHTXHQFLQJWKHDOSDFDJHQRPHZLOOUDSLGO\OHDGWRDPXFKODUJHUVHWRIPDUNHUV
DVGHPRQVWUDWHGE\DQXPEHURIVWXGLHVSXEOLVKHGLQWKHSDVWGHFDGH5HHGDQG&KDYHV
6DUQRHWDO3HQHGRHWDODE$PRQJWKHDXWKRUVPHQWLRQHGDERYH5HHGDQG
&KDYHVUHSRUWDQDGGLWLRQDOSRWHQWLDOORFLE\EODVWLQJERVWDXUXV665VDQG0XQ\DUG
HWDOKDYHUHFHQWO\IRXQGDVHWRIWHWUDQXFOHRWLGHPDUNHUV6RPHRIWKHVHPDUNHUVKDYH
DOUHDG\EHHQXVHGWRFDOFXODWHJHQHWLFGLVWDQFHVDPRQJGLIIHUHQWVSHFLHVRI6RXWK$PHULFDQ
&DPHOLGV%XVWDPDQWHHWDO:KHHOHUHWDO
*LYHQWKHSHFXOLDUSRVWGRPHVWLFDWLRQHYROXWLRQDU\KLVWRU\RIWKHVSHFLHVDQGWKHLQFUHDVLQJ
LQWHUHVWLQ6XULEUHWKHDLPRIWKLVVWXG\LVWKHUHIRUHWRXVHDPLFURVDWHOOLWHSDQHOWRVWXG\
WKHJHQHWLFGLVWDQFHEHWZHHQ6XULDQG+XDFD\DDOSDFDVDQGWRDVVHVVWKHDPSOLWXGHRIJHQHWLF
YDULDELOLW\LQWKH3HUXYLDQDOSDFDSRSXODWLRQ7KHVWXGLHGSRSXODWLRQEHORQJVWRDJHUPSODVP
IRXQGHGDERXW\HDUVDJRLQ4XLPVDFKDWD3XQRSURYLQFH3HUX
1EXIVMEPWERHQIXLSHW
$OSDFDEORRGVDPSOHVZHUHFROOHFWHGLQVSULQJ$QLPDOVZHUHNHSWDQGPDQDJHGLQWKH,OOSD
3XQR([SHULPHQWDO6WDWLRQLQ4XLPVDFKDWD3XQRSURYLQFH3HUXDWDQDOWLWXGHRIDSSUR[
PDERYHVHDOHYHO7KHDQLPDOVEHORQJHGWRWZRJHRJUDSKLFDOO\VHSDUDWHDQGSKHQRW\SLFDOO\
SXUHRFNVRQH6XULDQGRQH+XDFD\DWKDWKDYHEHHQPDQDJHGDQGEUHGVHSDUDWHO\VLQFHWKH
DOSDFDJHUPSODVPZDVFUHDWHG\HDUVDJR%ORRGVDPSOHVZHUHWDNHQIURPQRQUHODWHG
DQLPDOVZKLFKLQFOXGHGDOOWKHDYDLODEOHPDOHVQ DQGDVXEVHWRIIHPDOHVQ LQWRWDO
+XDFD\DPDOHVDQGIHPDOHVDQG6XULPDOHVDQGIHPDOHV'XHWRWKHODFNRIEDVLF
IDFLOLWLHVEORRGZDVFROOHFWHGE\VSRWWLQJDWRWDORIORIEORRGRQ:KDWPDQ)7$1XFOHLF
$FLG&ROOHFWLRQFDUGV:%3RVVLEO\GXHWRWKHQRQVWHULOHDQGGLIFXOWFRQGLWLRQVLQ
IDFLOLWLHVRQWKH3HUXYLDQSODWHDXQRWDOOVDPSOHVDOORZHGIRUDVXIFLHQWTXDQWLW\RI'1$DQGLQ
RUGHUWRPLQLPLVHWKHQXPEHURIPLVVLQJGDWDWKHGDWDVHWZDVUHDUUDQJHGWRREWDLQDQDOQXPEHU
RILQGLYLGXDOVPDOHV+XDFD\DDQG6XULDQGIHPDOHV+XDFD\DDQG6XUL
DQGPLFURVDWHOOLWHV/&$ZDVQRWLQFOXGHGLQWKHDQDO\VLV$OOVDPSOHVZHUHSURFHVVHGLQ
,WDO\DQGJHQRPLFDPSOLFDWLRQZDVFDUULHGRXWE\/*6JHQHWLFODERUDWRULHV&UHPRQD,WDO\
7KHPDUNHUVG\HVXWLOLVHGSULPHUVHTXHQFHVDQGDOOHOHVL]HVIRUWKHPLFURVDWHOOLWHVDUHVKRZQ
LQ7DEOH7KHSDQHOKDVEHHQRSWLPLVHGWREHDPSOLHGLQWZRPXOWLSOH[UHDFWLRQVRISULPHU
SDLUVHDFK


0'%

0'%
=;00

0'%
0'%

=;00

=;00
=;00

=;00

=;00

0'%
0'%

0'%
0'%
*VEKQIRX
PIRKXL
1EVOIV

%PPIPIW
*EQ
:MG
2IH
2IH
*EQ
4IX
:MG
*EQ
*EQ
4IX
:MG
2IH
4IX
:MG
(]I
%%+'%+%+8+%888%%''+8+
'%++8%8'%++%+%'+++'8
'%'%8+%''%8+8''''88%8
+8+'%+'+8''%%%8%+8'%
88888''''8+8++88+%%8
+'8+%%''%'%%8+'%%%+%
+8++88888+'''%%+'8'
%%%''8%%88%''8'''''%
+%%++'%++%+%%%%++8%+
%8%''8'8'88+'8'8'8'8'
%+8'88++8+8++8++8%+%%
'8'%%'%%8+'8%+%''88++
+8''%88'%8''%+'%'%++
8%%+8''%+''''%'%'8'%
*[4VMQIVWIUYIRGI
++%8+%'8%%+%'8+'8'8+%
%+'%888%8'%%++%%'%''%+'
''%+8+%'%+8+8+%'8%%+%
''%+'%8'+8''%+8%88'%
%%'8'%+'8+88+8'%++++
%%8+'%+%8+8+''8'%+88
%''8''%+8'8++++%888'
''%8+8%+88+'%++%'%'+
'%+%++'88%%8%%'88+'%+
''8'8%'%%''%8+88%+''%
8+''%++%8%'8+%'%+8+%8
+%+%%'%'%++'8++8+%%8%
%'%888++'%%8'8'8++%+%%
++8+%%++++'88+%8'88'
6IZ4VMQIVWIUYIRGI
8EFPI1EVOIVWERHQYPXMTPI\VIEGXMSRHEXE0MWXSJQEVOIVWVIWTIGXMZITVMQIVTEMVWEPPIPIWJVEKQIRXPIRKXLWERHH]IWYWIHMRXLIQYPXMTPI\VIEGXMSRW

&VIIHMRKERHKIRIXMGW

&VIIHMRKERHKIRIXMGW
7SJX[EVIERHWXEXMWXMGEPEREP]WMW
7KHVWDWLVWLFDODQDO\VLVRIWKHPLFURVDWHOOLWHGDWDIRUWKHJHQHWLFYDULDELOLW\PHDVXUHVLQFOXGLQJ
WKHDQDO\VLVRIPROHFXODUYDULDQFH$029$ZDVSHUIRUPHGXVLQJWKHODWHVWYHUVLRQRIWKH
VRIWZDUH*HQDOH[3HDNDOODQG6PRXVHZKLOHWKHH[FHOPLFURVDWHOOLWHWRRONLW3DUN
ZDVXVHGIRUFDOFXODWLQJWKHSRO\PRUSKLVPLQIRUPDWLRQFRQWHQW3,&IRUHDFKDOOHOH
7KHVWDWLVWLFDOSRSXODWLRQJHQHWLFVSDFNDJH)VWDW*RXGHWZDVXVHGWRFDOFXODWH
GHYLDWLRQIURP+DUG\:HLQEHUJHTXLOLEULXP+:(DQGJHQRW\SLFGLVHTXLOLEULXPDPRQJORFL
DSSO\LQJDVWULFW%RQIHUURQLFRUUHFWLRQIRUPXOWLSOHFRPSDULVRQV7KHWHVWIRU+:(DQGWKH
WHVWIRUOLQNDJHGLVHTXLOLEULXPZHUHFDUULHGRXWXVLQJUDQGRPLVDWLRQVWDEOHZLGHOHYHO
RIVLJQLFDQFHDW)LQDOO\&DYDOOL6IRU]DVFKRUGGLVWDQFHDQG5H\QROGV:HLU&RFNHUKDP
GLVWDQFHZHUHFDOFXODWHGXVLQJ*HQGLVWDQDSSOLFDWLRQRIWKHVRIWZDUHSDFNDJH3K\OLSYHUVLRQ
)HOVHQVWHLQ
6IWYPXW
+DUG\:HLQEHUJHTXLOLEULXPDQGOLQNDJHGLVHTXLOLEULXPDQXPEHURILQGLFHVKDYHEHHQFDOFXODWHG
RQO\RQPLFURVDWHOOLWHVH[FOXGLQJ<://ZKLFKLVOLQNHGWRWKH;VH[FKURPRVRPH2QO\
RQHORFXV/&$ZDVIRXQGQRWWREHLQ+DUG\:HLQEHUJHTXLOLEULXPDIWHUVWULFW%RQIHUURQL
FRUUHFWLRQ VKRZLQJ H[FHVV RI KRPR]\JRVLV 3 :KHQ WKH VDPSOH ZDV VSOLW LQWR WZR
GLIIHUHQWSRSXODWLRQVWKHUHVXOWGLGQRWGLIIHU7KHWHVWIRUJHQRW\SLFGLVHTXLOLEULXPEHWZHHQSDLUV
RIORFLVKRZHGORFLDVVRFLDWLRQVRXWRIWREHLQVRPHGHJUHHRIOLQNDJHGLVHTXLOLEULXP7KH
ORFL/&$/&$DQG/&$DSSHDULQRIWKHDVVRFLDWLRQVVKRZLQJOLQNDJHGLVHTXLOLEULXP
+HWHUR]\JRVLV SRO\PRUSKLVP LQIRUPDWLRQ LQGH[ DQG )L[DWLRQ LQGH[ ZKHQ WKH GDWDVHW ZDV
FRQVLGHUHG DV D VLQJOH SRSXODWLRQ WKH DYHUDJH +R IRU WKH PDUNHUV ZDV KLJK +R
6( H[WUHPHO\FORVHWRWKHDYHUDJH+H+H 6( DQGWKHXQELDVHGH[SHFWHG
KHWHUR]\JRVLV8+H 6( ZLWKDQRYHUDOODYHUDJH[DWLRQLQGH[RI6(
7KH KLJK PHDQ QXPEHU RI DOOHOHV 1D 6( HIIHFWLYH DOOHOHV 1H
6( DQGWKHORZ[DWLRQLQGLFHV)FRQUPVXFKKLJKYDOXHVRIKHWHUR]\JRVLVDQGJHQHWLF
YDULDELOLW\
7KHSRO\PRUSKLVPLQIRUPDWLRQFRQWHQW3,&IRUHDFKORFXVLVLQOLQHZLWKSUHYLRXVQGLQJVDQG
UDQJHVIURPIRUORFXV<://WRIRUORFXV<://+R+H8+H3,&DQG)DUH
VKRZQLQ7DEOHIRUHDFKORFXVDQGDVDPHDQIRUDOOORFLZLWKWKHUHODWLYHVWDQGDUGHUURUV:KHQ
WKHVDPSOHZDVDQDO\VHGDVWZRVHSDUDWHSRSXODWLRQVUHVXOWVGLGQRWGLIIHUVLJQLFDQWO\7KHQXOO
K\SRWKHVLVZDVWHVWHGIRU+R3 +H3 )3 1H3 3,&3
DQG1D3 *HQHWLFYDULDELOLW\SDUDPHWHUVIRUWKHWZRSRSXODWLRQVDUHOLVWHGLQ7DEOH
+IRIXMGHMWXERGIERH%13:%
*HQHWLF GLVWDQFH FDOFXODWHG E\ 3DLUZLVH 3RSXODWLRQ 0DWUL[ RI 1HLV *HQHWLF 'LVWDQFH DQG
8QELDVHG1HLV*HQHWLF'LVWDQFHZHUHDQGUHVSHFWLYHO\:KHQFDOFXODWHGDV
WKH&DYDOOL6IRU]DVFKRUGGLVWDQFHWKHUHVXOWZDV5H\QROGV:HLU&RFNHUKDPGLVWDQFH
VXJJHVWHGWREHPRUHSUHFLVHLQWKHFDOFXODWLRQRIJHQHWLFGLVWDQFHVEHWZHHQFORVHO\UHODWHG
VSHFLHVDQGEUHHGV/DYDOHWDOUHVXOWHGLQDYDOXHRI7KHSULQFLSDOFRRUGLQDWHV
DQDO\VLV3&$FDOFXODWHGRQWKHGLVWDQFHPDWUL[DPRQJWKHLQGLYLGXDOVLQ)LJXUHJUDSKLFDOO\
VKRZVKRZVDPSOHVIURPWKH6XULDQG+XDFD\DGDWDVHWVRYHUODSDQGGRQRWVHJUHJDWHLQWR
GLIIHUHQWJURXSV7KHUVWGLPHQVLRQVRIWKH3&$H[SODLQRIWKHWRWDOYDULDQFH

&VIIHMRKERHKIRIXMGW
8EFPI4STYPEXMSRKIRIXMGWTEVEQIXIVWJSVEWMRKPITSTYPEXMSR
0SGYW
2E
2I
,S
,I
9,I
4-'
=;00
0'%
=;00
0'%
0'%
0'%
0'%
=;00
0'%
0'%
=;00
=;00
=;00
1IER
7)

2RYQFIVSJMRHMZMHYEPW2ERYQFIVSJHMJJIVIRXEPPIPIWMRFVEGOIXWZEPYIWJVSQTVIZMSYWWXYHMIW 2I

RYQFIVSJ)JJIGXMZIEPPIPIW,S3FWIVZIH,IXIVS^]KSWMX],I)\TIGXIH,IXIVS^]KSWMX]9,I9RFMEWIH
)\TIGXIH,IXIVS^]KSWMX]!22 ,I**M\EXMSR-RHI\4-'4SP]QSVTLMWQMRJSVQEXMSRGSRXIRX
,S,I9,IERH*RSXWLS[RJSV<PMROIH=;00PSGYW
$OOWKHYDULDQFHREVHUYHGLQWKHWZRSRSXODWLRQVZLWKWKH$029$WHVWZDVGXHWRYDULDWLRQZLWKLQ
SRSXODWLRQVDQGQRWWRYDULDWLRQEHWZHHQSRSXODWLRQV*HQHWLFGLIIHUHQWLDWLRQE\
$029$WHVWZDVFDOFXODWHGERWKE\)VWDQG5VW
(MWGYWWMSR
,QWHUPVRIJHQHWLFYDULDELOLW\ZLWKLQWKH3HUXYLDQDOSDFDVDPSOHDQDO\VHGDOOSDUDPHWHUVDQG
QGLQJVVXFKDVQXPEHURIDOOHOHV1D 6( QXPEHURIHIIHFWLYHDOOHOHV1H
6( REVHUYHGDQGH[SHFWHGKHWHUR]\JRVLV+R 6( +H 6(
VKRZWKDWWKH3HUXYLDQSRSXODWLRQLVVWLOOFRQVHUYLQJKLJKJHQHWLFYDULDELOLW\DQGGRHVQRWVKRZ
DQ\VLJQRIDUWLFLDOVHOHFWLRQSUHVVXUHIRUWKHVWXGLHGORFLWKHVHVKRXOGEHQHXWUDOWRVHOHFWLYH
SUHVVXUHEXWKDYHQRWEHHQPDSSHGDWSUHVHQW7KHORZ[DWLRQLQGLFHVIRUWKHVHORFLFRQUP
WKLVLQWHUSUHWDWLRQRIWKHGDWD) 6( DQGVXJJHVWWKDWWKHPLFURVDWHOOLWHSDQHOLV
VXLWDEOHIRUJHQHWLFGLYHUVLW\VWXGLHV)XUWKHUPRUHWKHVDPSOHVL]HDOWKRXJKVPDOOLVOLNHO\WREH
UHSUHVHQWDWLYHRIWKHJHQHWLFGLYHUVLW\ZLWKLQWKLVSRSXODWLRQ,QIDFWLQFRPSDULVRQZLWKWKHGDWD
FROOHFWHGDQGDQDO\VHGE\WKH$5,VLQFHDQGE\VHYHUDORWKHUDXWKRUV5HHGDQG&KDYHV
6DUQR HW DO 3HQHGR HW DO DE 0F3DUWODQ HW DO WKH VDPSOH
LQWKLVVWXG\KDVVKRZQWKHSUHVHQFHRIDKLJKQXPEHURIDOOHOHVPDWFKLQJWKHZKROHDOOHOLF
UDQJHIRUPRVWRIWKHORFLDQGLQWZRFDVHV<://DQG<://VKRZLQJRQHH[WUDDOOHOH
ZKHQFRPSDUHGZLWKSUHYLRXVSXEOLFDWLRQV9DOXHVIRUWKHSRO\PRUSKLVPLQIRUPDWLRQFRQWHQW
3,& 6( ZHUHDOVRLQOLQHZLWKSUHYLRXVQGLQJV2QO\RQHORFXV<://
VKRZHGD3,&YDOXH3,& ZKLFKUHHFWVWKHORZHUWKDQDYHUDJH1DDQG1HIRXQGIRU
WKLVVSHFLFORFXV1D 1H 1HYHUWKHOHVVWKLVYDOXHLVODUJHUWKDQWKDWIURPSUHYLRXV
ELEOLRJUDSKLFGDWD/DQJHWDO:KHQWKHVHSDUDPHWHUVZHUHHYDOXDWHGVHSDUDWHO\LQWKH
WZRSKHQRW\SLFJURXSVWKH\GLGQRWGLIIHUVLJQLFDQWO\

&VIIHMRKERHKIRIXMGW
8EFPI4STYPEXMSRKIRIXMGWTEVEQIXIVWJSVXLIX[STSTYPEXMSRW
4ST
0SGYW
2E
2I
,S
,I
9,I
4-'
,YEG
=;00
0'%
=;00
0'%
0'%
0'%
0'%
=;00
0'%
0'%
=;00
=;00
=;00
1IER
7)
=;00
0'%
=;00
0'%
0'%
0'%
0'%
=;00
0'%
0'%
=;00
=;00
=;00
1IER
7)

7YVM
2RYQFIVSJMRHMZMHYEPW2ERYQFIVSJHMJJIVIRXEPPIPIW2IRYQFIVSJ)JJIGXMZIEPPIPIW,S3FWIVZIH
,IXIVS^]KSWMX],I)\TIGXIH,IXIVS^]KSWMX]9,I9RFMEWIH)\TIGXIH,IXIVS^]KSWMX]!22
,I**M\EXMSR-RHI\4-'4SP]QSVTLMWQMRJSVQEXMSRGSRXIRX
,S,I9,IERH*RSXWLS[RJSV<PMROIH=;00PSGYW
,Q WHUPV RI JHQHWLF GLVWDQFH DQG GLIIHUHQWLDWLRQ EHWZHHQ WKH WZR SKHQRW\SHV ERWK WKH 3&$
DQDO\VLVDQGWKHKLHUDUFKLFDOFOXVWHULQJDQDO\VLVVKRZQRVHSDUDWHVHJUHJDWLRQRUJURXSLQJRI
6XULDQG+XDFD\DLQGLYLGXDOV
:KHQWKHDQDO\VLVRIPROHFXODUYDULDQFHZDVFDUULHGRXWFRQVLGHULQJWKHWZRSKHQRW\SHVDVWZR
VHSDUDWHSRSXODWLRQVLWFOHDUO\LGHQWLHGWKHVRXUFHRIDOOYDULDQFHLQWKHFRPSRQHQWZLWKLQ
SRSXODWLRQVH[FOXGLQJDQ\VRXUFHRIYDULDQFHWREHIRXQGEHWZHHQSRSXODWLRQV7KLVUHVXOWLV
VXSSRUWHGE\WKH1HLVLQGH[RIJHQHWLFGLVWDQFH&DYDOOL6IRU]DVFKRUGGLVWDQFHDQG5H\QROGV
:HLU&RFNHUKDPGLVWDQFHZKLFKDOVRVKRZQRGLIIHUHQWLDWLRQEHWZHHQWKHWZRSRSXODWLRQV7KH
UVWPHDVXUHDVVXPHVDVWHSZLVHPXWDWLRQPRGHOLQDQLQQLWHDOOHOHPRGHOZLWKHTXLOLEULXP

&VIIHMRKERHKIRIXMGW
3ULQFLSDOFRRUGLQDWHV
+XDF
6XUL
VP
KI
&RRUG
VP
KP
KI
VI KI
VI KI KI
KP
VI
VI VI
VIVI
KI KI
VI
KI VI
KI
VI
KI VP
KI
VI
VI
KP
VI
VI
VI
VI
KP
VI KI
KI
KI KI
KI
KI
KI
VI
KP
VI
VP
KI
VI
VP
&RRUG
*MKYVI4VMRGMTEP'SSVHMREXIW%REP]WMWSJ7YVMERH,YEGE]EFEWIHSRXLIHMWXERGIQEXVM\JVSQQSPIGYPEVHEXE
EHWZHHQPXWDWLRQDQGJHQHWLFGULIWZKHUHDVWKHVHFRQGDQGWKHWKLUGPHDVXUHVDUHGLPHQVLRQDO
PRGHOVDVVXPLQJRQO\JHQHWLFGULIW
7KHUHDUHWZRLPSRUWDQWIDFWRUVWREHWDNHQLQWRFRQVLGHUDWLRQZKLOHLQWHUSUHWLQJWKHVHUHVXOWV7KH
UVWLVWKDWWKHJHUPSODVPHVWDEOLVKHG\HDUVDJRDWWKHH[SHULPHQWDOVWDWLRQRI4XLPVDFKDWD
LV QRW XQGHUJRLQJ JHQHWLF VHOHFWLRQ DQG ZDV FUHDWHG IRU WKH VROH SXUSRVH RI FRQVHUYLQJ WKH
JHQHWLFGLYHUVLW\RIWKHVSHFLHV7KHVHFRQGIDFWRULVWKDWDOWKRXJK6XULDQG+XDFD\DDOSDFDV
DWWKHH[SHULPHQWDOVWDWLRQKDYHEHHQEUHGDQGPDQDJHGVHSDUDWHO\VLQFHWKHFUHDWLRQRIWKH
JHUPSODVPWKHWLPHLQWHUYDORI\HDUVLVXQOLNHO\WRJHQHUDWHJHQHWLFGLIIHUHQWLDWLRQEHWZHHQ
WKHWZRSKHQRW\SHVHVSHFLDOO\FRQVLGHULQJWKHDEVHQFHRIVHOHFWLRQWKHUHSURGXFWLYHSK\VLRORJ\
RIWKHVSHFLHVDQGLWVJHQHUDWLRQWLPH0DVRQ
'SRGPYWMSRW
,QOLJKWRIWKHVHFRQVLGHUDWLRQVLIDVHFRQGDU\EUHHGVWUXFWXUHKDGEHHQSUHVHQWZLWKLQWKHVSHFLHV
DWWKHWLPHRIWKHFUHDWLRQRIWKHJHUPSODVPLWZRXOGKDYHEHHQSUHVHUYHGE\WKHEUHHGLQJ
SUDFWLFHVLQSODFHDWWKHH[SHULPHQWDOVWDWLRQ1HYHUWKHOHVVWKHGDWDREWDLQHGIURPWKHORFL
VXJJHVWQRJHQHWLFGLYHUJHQFHEHWZHHQWKHWZRSKHQRW\SHVDQGGRQRWVXSSRUWWKHLGHDRIWZR
GLVWLQFWSRSXODWLRQVRI3HUXYLDQ6XULDQG+XDFD\DDOSDFDV)XUWKHUPRUHWKHWZRSKHQRW\SHV
KDYHVLPLODUJHQHWLFSDUDPHWHUVLQWHUPVRIDOOHOLFIUHTXHQFLHVDQGJHQHWLFYDULDELOLW\VKRZLQJ
KLJKYDOXHVERWKLQWHUPVRIDOOHOLFULFKQHVVDQGKHWHUR]\JRVLV
%GORS[PIHKIQIRXW
7KHDXWKRUVZRXOGOLNHWRWKDQNWKH/*6ODERUDWRULHVIRUFDUU\LQJRXWWKHPXOWLSOH[DPSOLFDWLRQV
DQGEDQGVFRULQJ

&VIIHMRKERHKIRIXMGW
6IJIVIRGIW
$QWRQLQL0)3HUGRPLFL6&DWDODQR(1)UDQN0*RQ]DOHV09++LFNDQG)&DVWULJQDQz&XWLFXODUFHOO
PHDQVFDOHIUHTXHQF\LQGLIIHUHQWW\SHVRIHHFHRIGRPHVWLF6RXWK$PHULFDQFDPHOLGV6$&,Q0*HUNHQDQG
&5HQLHULHGV3URJUHVVLQ6RXWK$PHULFDQ&DPHOLGV5HVHDUFK3URFHHGLQJVRIWKHUG(XURSHDQ6\PSRVLXP
DQG6835(0((XURSHDQ6HPLQDU0D\($$3
%D\FKHOLHU3:KDWLVDSXUH6XUL"$OSDFDV$XVWUDOLD
%XVWDPDQWH$9$=DPEHOOL'$'H/DPR-YRQ7KXQJHQDQG/9LGDO5LRMD*HQHWLFYDULDELOLW\RIJXDQDFR
DQGOODPDSRSXODWLRQVLQ$UJHQWLQD6PDOO5XPLQDQW5HVHDUFK
)HOVHQVWHLQ-1RWLFHV3+</,33K\ORJHQ\,QIHUHQFH3DFNDJH9HUVLRQ&ODGLVWLFV
RIEUHWUDLWVLQ6RXWK$PHULFDQGRPHVWLFFDPHOLGVOODPDVDQGDOSDFDV6PDOO5XPLQDQW5HVHDUFK
*RXGHW-)67$79HUVLRQ$&RPSXWHU3URJUDPWR&DOFXODWH)6WDWLVWLFV-RXUQDORI+HUHGLW\
/DQJ.'0<:DQJDQG<3ODQWH)LIWHHQSRO\PRUSKLFGLQXFOHRWLGHPLFURVDWHOOLWHVLQOODPDVDQGDOSDFDV
$QLPDO*HQHWLFV
/DYDO*06DQ&ULVWREDODQG&&KHYDOHW0HDVXULQJJHQHWLFGLVWDQFHVEHWZHHQEUHHGVXVHRIVRPHGLVWDQFHV
LQYDULRXVVKRUWWHUPHYROXWLRQPRGHOV*HQHWLFVVHOHFWLRQHYROXWLRQ
0DVRQ,/7KHUROHRIQDWXUDODQGDUWLFLDOVHOHFWLRQLQWKHRULJLQRIEUHHGVRIIDUPDQLPDOV=HLWVFKULIWIU
7LHU]FKWXQJXQG=FKWXQJVELRORJLH
0F*UHJRU %$ DQG ./ %XWOHU 6RXUFHV RI YDULDWLRQ LQ EUH GLDPHWHU DWWULEXWHV RI$XVWUDOLDQ DOSDFDV DQG
LPSOLFDWLRQVIRUHHFHHYDOXDWLRQDQGDQLPDOVHOHFWLRQ$XVWUDOLDQ-RXUQDORI$JULFXOWXUDO5HVHDUFK
0F3DUWODQ+&0(0DWWKHZVDQG1$5RELQVRQ$OSDFDPLFURVDWHOOLWHVDWWKH9,$6$DQG9,$6$ORFL
$QLPDO*HQHWLFV
0XQ\DUG.$-0/HGJHU&</HH&%DEUDDQG'0*URWK&KDUDFWHUL]DWLRQDQGPXOWLSOH[JHQRW\SLQJRI
DOSDFDWHWUDQXFOHRWLGHPLFURVDWHOOLWHPDUNHUV6PDOO5XPLQDQW5HVHDUFK
3DUN6'(7U\SDQRWROHUDQFHLQ:HVW$IULFDQ&DWWOHDQGWKH3RSXODWLRQ*HQHWLF(IIHFWVRI6HOHFWLRQ7KHVLV
8QLYHUVLW\RI'XEOLQ'XEOLQ,UHODQG
3HDNDOO5DQG3(6PRXVH*HQDOH[JHQHWLFDQDO\VLVLQ([FHO3RSXODWLRQJHQHWLFVRIWZDUHIRUWHDFKLQJDQG
UHVHDUFK0ROHFXODU(FRORJ\1RWHV
3HQHGR0&7$5&DHWDQRDQG.,&RUGRYD0LFURVDWHOOLWHPDUNHUVIRU6RXWK$PHULFDQFDPHOLGV$QLPDO
*HQHWLFV
3HQHGR0&$5&DHWDQRDQG.&RUGRYDD(LJKWPLFURVDWHOOLWHPDUNHUVIRU6RXWK$PHULFDQFDPHOLGV$QLPDO
*HQHWLFV
3HQHGR0&$5&DHWDQRDQG.,&RUGRYDE6L[PLFURVDWHOOLWHPDUNHUVIRU6RXWK$PHULFDQFDPHOLGV$QLPDO
*HQHWLFV
3RQ]RQL5:'-+XEEDUG59.HQ\RQ&'7XFNZHOO%$0F*UHJRU$+RZVH,&DUPLFKDHODQG*--XGVRQ
3KHQRW\SHVUHVXOWLQJIURP+XDFD\DE\+XDFD\D6XULE\+XDFD\DDQG6XULE\6XULFURVVLQJV,Q3URFHHGLQJV
RIWKHWZHOIWK&RQIHUHQFHRIWKH$VVRFLDWLRQIRUWKH$GYDQFHPHQWRI$QLPDO%UHHGLQJDQG*HQHWLFV$SULO
$$$%*
3UHVFLXWWLQL6$9DOERQHVL1$SD]D0$QWRQLQL7+XDQFDDQG&5HQLHUL)OHHFHYDULDWLRQLQDOSDFD9LFXJQD
SDFRVDWZRORFXVPRGHOIRUWKH6XUL+XDFD\DSKHQRW\SH%0&JHQHWLFV
4LX-7(0LWFKHOO$31LFNHO65%UXPPHWDQG:(-RKQVRQ,GHQWLFDWLRQDQG&KDUDFWHUL]DWLRQRI6LPSOH
6HTXHQFH5HSHDW0DUNHUVLQ$OSDFD/DPDSDFRV,Q3ODQWDQG$QLPDO*HQRPH;,9&RQIHUHQFH$EVWUDFWV
-DQXDU\1DWLRQDO&HQWHURI3ODQW*HQH5HVHDUFK1&3*53
5HHG.0DQG/'&KDYHV6LPSOHVHTXHQFHUHSHDWVIRUJHQHWLFVWXGLHVRIDOSDFD$QLPDO%LRWHFKQRORJ\

6DUQR5-9$'DYLG:/)UDQNOLQ6-2%ULHQDQG:(-RKQVRQ'HYHORSPHQWRIPLFURVDWHOOLWHPDUNHUVLQ
WKHJXDQDFR/DPDJXDQLFRHXWLOLW\IRU6RXWK$PHULFDQFDPHOLGV0ROHFXODUHFRORJ\

&VIIHMRKERHKIRIXMGW
:KHHOHU-&/&KLNKLDQG0:%UXIRUG*HQHWLF$QDO\VLVRIWKH2ULJLQVRI'RPHVWLF6RXWK$PHULFDQ&DPHOLGV
,Q0$=HGHU'*%UDGOH\((PVKZLOOHUDQG%'6PLWKHGV'RFXPHQWLQJGRPHVWLFDWLRQQHZJHQHWLFDQG
DUFKDHRORJLFDOSDUDGLJPV8QLYHUVLW\RI&DOLIRUQLD3UHVV%HUNHO\&$86$SS
:KHHOHU -& 0 )HUQDQGH] 5 5RVDGLR ' +RFHV 0 .DGZHOO DQG 0: %XIRUG *HQHWLF GLYHUVLW\ DQG
PDQDJHPHQWLPSOLFDWLRQVIRUYLFXxDSRSXODWLRQVLQ3HUX,Q-/HPRQV59LFWRUDQG'6FKDIIHUHGV&RQVHUYLQJ
ELRGLYHUVLW\LQDULGUHJLRQV%HVWSUDFWLFHVLQGHYHORSLQJQDWLRQV.OXZHU$FDGDGHPLF3XEOLVKHUV%RVWRQ0$
86$SS

&VIIHMRKERHKIRIXMGW
+IRIXMGHMJJIVIRXMEXMSRSJWM\4IVYZMEREPTEGETSTYPEXMSRW
03DUHGHV-0DFKDFD3-$]RU$$ORQVR0RUDJD$0HPEULOORDQG$0XxR]6HUUDQR
'SWR'H*HQpWLFD8QLYHUVLGDGGH&yUGRED&DPSXVGH5DEDQDOHV &&yUGRED
6SDLQPSDUHGHV#XIURFO
&HQWURGH(VWXGLRV\3URPRFLyQGHO'HVDUUROOR'(6&26850iODJD*UpQHW18PDFROOR
$UHTXLSD3HUX
%FWXVEGX
:H DQDO\VHG LQGLYLGXDOV EHORQJLQJ WR VL[ SRSXODWLRQV RI DOSDFD IURP WKH KLJK$QGHDQ
]RQHVLQ3HUXZKHUHOLYHVWRFNSURGXFWLRQLVEDVHGRQWKHEUHHGLQJRIGRPHVWLF6RXWK$PHULFDQ
FDPHOLGVDOSDFDVDQGOODPDVEDVLFDOO\DOSDFDVIURPWKH+XDFD\DEUHHG7ZHQW\PLFURVDWHOOLWH
PDUNHUV ZHUH DQDO\VHG DQG JHQHWLF YDULDELOLW\ DQG JHQHWLF GLIIHUHQWLDWLRQ SDUDPHWHUV ZHUH
HVWLPDWHG([SHFWHGKHWHUR]\JRVLW\+HUDQJHGIURPLQSRSXODWLRQWRLQSRSXODWLRQ
2EVHUYHGKHWHUR]\JRVLW\+RRVFLOODWHGIURPLQSRSXODWLRQWRLQSRSXODWLRQ
$YHUDJHQXPEHURIDOOHOHVSHUORFXVLQHDFKSRSXODWLRQUDQJHGIURPLQSRSXODWLRQWR
LQSRSXODWLRQ,QRUGHUWRDQDO\VHWKHJHQHWLFVWUXFWXUHDQGJHQHWLFGLIIHUHQWLDWLRQZHHVWLPDWHG
WKH:ULJKWV)VWDWLVWLFV)67YDOXHVEHWZHHQSRSXODWLRQVUDQJHGIURPEHWZHHQDQG
SRSXODWLRQVSDLUDQGEHWZHHQDQGSRSXODWLRQVSDLUV$YHUDJH)67YDOXHEHWZHHQ
SRSXODWLRQVZDV$YHUDJH),7DQG),6YDOXHVZHUH
DQGUHVSHFWLYHO\(VWLPDWHGQXPEHURIPLJUDQWVSHUJHQHUDWLRQ
EHWZHHQSRSXODWLRQVZDVYHU\KLJKDVZHGHWHFWHGDVFDUFHJHQHWLFGLIIHUHQWLDWLRQEHWZHHQWKHP
7KHKLJKOHYHORIREVHUYHGKRPR]\JRVLW\PD\EHGXHWRLQEUHHGLQJ
.H\ZRUGVDQLPDOJHQHWLFUHVRXUFHVELRGLYHUVLW\FRQVHUYDWLRQJHQHWLFYDULDELOLW\VXVWDLQDEOH
GHYHORSPHQW
-RXVSHYGXMSR
$QLPDOSURGXFWLRQSOD\VDQLPSRUWDQWUROHLQWKHTXDOLW\RISURGXFWVSURGXFWLRQXQGHUOHVV
LQWHQVLYHFRQGLWLRQVPRUHUHVSHFWIRUWKHHQYLURQPHQWJXDUDQWHHVIRUWKHVXVWDLQDELOLW\RIWKH
V\VWHPDQGHIIRUWVWRPDLQWDLQWKHSRSXODWLRQLQWKHUXUDODUHDV:LWKLQWKHVHVWUDWHJLHVLWLV
GHVLUDEOHRQWKHRQHKDQGWRPDLQWDLQELRGLYHUVLW\SUHYHQWLQJWKHORVVRIJHQHWLFSDWULPRQ\DQG
RQWKHRWKHUKDQGWRSUHVHUYHORFDOEUHHGVWRKHOSWKHVXEVLVWHQFHRIUXUDOSRSXODWLRQV
3HUXLVWKHZRUOGVQXPEHURQHSURGXFHURIFDPHOLGEUHRIJOREDOSURGXFWLRQDFFRXQWLQJ
IRUPRUHWKDQWKUHHPLOOLRQDOSDFDV/LYHVWRFNSURGXFWLRQLQWKHKLJK$QGHDQ]RQHVLQ3HUXLV
EDVHGRQWKHEUHHGLQJRIGRPHVWLF6RXWK$PHULFDQFDPHOLGVDOSDFDVDQGOODPDVEDVLFDOO\
DOSDFDVIURPWKH+XDFD\DEUHHG
7KLVDQLPDOSURGXFWLRQLVWKHPDLQHFRQRPLFDFWLYLW\RIWKHUHVLGHQWVIRFXVHGRQEUHSURGXFWLRQ
6RWKHJHQHWLFLPSURYHPHQWRIWKLVEUHHGLQWKHKLJK$QGHDQ]RQHVLVYHU\LPSRUWDQWLQRUGHU
WRLPSURYHWKHEUHTXDOLW\WUDLWVDQGFRQVHTXHQWO\WKHTXDOLW\RIOLIHRIDXWRFKWKRQDOEUHHGHUV
0ROHFXODU PDUNHUV RIIHU DQ XQELDVHG V\VWHP WKDW DOORZV IRU WKH JHQHWLF FKDUDFWHULVDWLRQ
RI SRSXODWLRQV RI WKLV VSHFLHV .DGZHOO HW DO DQG WKH SRSXODWLRQ VWUXFWXUH DQDO\VLV
0LFURVDWHOOLWH PDUNHUV DUH FRQVLGHUHG WKH EHVW WRROV IRU JHQHWLF LGHQWLFDWLRQ PROHFXODU
SK\ORJHQ\DQGSDUHQWDJHWHVWLQJLQEUHHGV$UDQJXUHQ0HQGH]DQG-RUGDQD6FKO|WWHUHU
DQG+DUU

&VIIHMRKERHKIRIXMGW
2QHRIWKHPDLQSUREOHPVLQWKHSRSXODWLRQVLVWKHLQFUHDVHLQWKHLQEUHHGLQJOHYHODQGFRQVHTXHQWO\
LQEUHHGLQJGHSUHVVLRQDUHGXFWLRQRIDYHUDJHSKHQRW\SLFYDOXHVRIWKHWUDLWV)DOFRQHUDQG0DFND\
:KHQJHQHDORJLFDOLQIRUPDWLRQLVQRWUHOLDEOHPROHFXODUWRROVKDYHWREHLPSOHPHQWHGLQ
RUGHUWRHVWLPDWHWKHOHYHORIJHQHWLFYDULDELOLW\$]RUDQG*R\DFKH
1EXIVMEPERHQIXLSHW
:HKDYHDQDO\VHGLQGLYLGXDOVPDOHVDQGIHPDOHVEHORQJLQJWRVL[SRSXODWLRQVRIDOSDFD
IURPWKHKLJK$QGHDQ]RQHVLQ3HUX7DEOH6DPSOHVZHUHWDNHQIURPHDUDQG'1$ZDV
LVRODWHGXVLQJWKHLJHQRPLF&7%FRPPHUFLDONLW
7ZHQW\PLFURVDWHOOLWHPDUNHUVZHUHDPSOLHGXVLQJPXOWLSOH[3&5PHWKRGVDQGDQDO\VHGLQDOO
LQGLYLGXDOVVDPSOHG7DEOH
$OOHOHVL]HVZHUHDQDO\VHGLQDQ$%,FDSLOODU\DXWRPDWLFVHTXHQFHUDSSOLHGELRV\VWHPV
*HQRW\SLQJ ZDV SHUIRUPHG XVLQJ *HQH0DSSHU VRIWZDUH ([SHFWHG +H DQG REVHUYHG
KHWHUR]\JRVLW\+RZHUHHVWLPDWHG)6WDWLVWLF:ULJKW),6),7\)67ZHUHHVWLPDWHG
XVLQJ WKH :HLU DQG &RFNHUKDP PHWKRGRORJ\ 7KH ERRWVWUDSSHG FRQGHQFH LQWHUYDO
ZDVEDVHGRQUHSOLFDWLRQV(IIHFWLYHQXPEHURIPLJUDQWVSHUJHQHUDWLRQ1PZDVDOVR
HVWLPDWHG6ODWNLQ
$OO JHQHWLF PDUNHUV XVHG ZHUH SRO\PRUSKLF$YHUDJH QXPEHU RI DOOHOH SHU ORFXV RVFLOODWHG
EHWZHHQLQSRSXODWLRQQXPEHUDQGLQSRSXODWLRQQXPEHU7DEOH7KHVHYDOXHV
DUHVLPLODUWRRWKHUVIRXQGLQRWKHUDUWLRGDFW\OV6DVWUHHWDOIRXQGLQWKH&UHROH&DVDQDUH
FDWWOHEUHHGDQDYHUDJHQXPEHURIDOOHOHVSHUORFXVDQGLQ]HEX$]RUHWDO
IRXQGVLPLODUYDOXHVLQ0HULQREUHHGDQGKLJKHULQ)OHLVFKVFKDI,OHGH)UDQFHRU
RWKHUHQGDQJHUHGSRSXODWLRQVVXFKDV0HULQR1HJURDQG&KXUUD/HEULMDQD$]RU
HWDODQGDOVRLQ0XUFLDQR*UDQDGLQDJRDWEUHHG0DODJXHxDRU&UHROHEUHHGV
$]RUHWDO,Q,EHULDQSLJ'XURFDQG$OHQWHMDQREUHHGV0HPEULOORHWDOYDOXHV
ZHUHORZHUWKDQLQDOSDFDV
2EVHUYHGKHWHUR]\JRVLW\+RSHUSRSXODWLRQRVFLOODWHGEHWZHHQLQSRSXODWLRQQXPEHU
DQGLQSRSXODWLRQQXPEHU7DEOH$]RUHWDOIRXQGDKLJKHU+RYDOXH
LQ3DMXQDFDWWOHEUHHGDQG6DVWUHHWDOVKRZHGDOVRKLJKHUYDOXHVLQ]HEX
DQG LQ &UHROH &DVDQDUH FDWWOH EUHHG ,Q 0HULQD DQG 0RQWHVLQD VKHHS EUHHGV$]RU HW
DODQG9DOOHHWDOVKRZHGKLJKHUYDOXHVDQGUHVSHFWLYHO\:H
8EFPI2YQFIVSJMRHMZMHYEPWWEQTPIHTIVTSTYPEXMSR
4STYPEXMSR
>SRI
%VIE
6IKMSR
7EQTPIWMÎ

7ER.YERHI8EVYGERM
)WXEGMzR4MPPSRIW
'SPGE
'LEPLYERGE
0EQTE
4EPGE
7ER.YERHI8EVYGERM
7ER%RXSRMSHI'LYGE
7ER%RXSRMSHI'LYGE
=ERUYI
0EQTE
4EPGE
%VIUYMTE
%VIUYMTE
%VIUYMTE
%VIUYMTE
4YRS
4YRS

&VIIHMRKERHKIRIXMGW
8EFPI1MGVSWEXIPPMXIQEVOIVWEREP]WIHMREPTEGE
1EVOIV
4VMQIVWJSV[EVHERHVIZIVWI
7MÎ
:304
(88+88'8'%%'%+++%'8+'
68'8++'''%'''%'8%%
(8888%%%%%88'8+%''%++%+8'8+
6'%8%%8%+''%%%%'%8++%%%'%%'
('''%88++'+%88%888%++
6%%'%++++8%%'%%%'%++%'
(8'%'++'%%%+%'+8+%%8%
6''%++%%%'%'%'%'''%'
(88888''''8+8++88+%%8
6%%'8'%+'8+88+8'%++++
(%%8%'''8%+88+%%+'8'8+8''8
6+%+8+''888%8%%%8%8+++8'8+
(+'%888'8''+8%%8'%88+
68+%'%''8888+888''%88
(''88++%''8''88+'8'8+
6+''%'8++8'''8+8'%88
(+%%+%++88++++'%'8%'
6'%++'%+%8%8''%88+%%
(%%88''8+8+%8888%8%'%'%
6'%8+8'%8+%%%+'8%'%+8%
(88+'8+8%''++%+%8+88+
688+%++'%%+%%8+'%+%8+
('%8'8%'%8+''''8+8+8+
68+'%+++%++%'8%%'%++8
(8%888++8++8+%'%88
6'%8'%'8+8%'%8%8+%%++
('8+'8+8+'88+8'%'''8%
6%+'%''%'%8+''8'8%%+8
(8'8%++8''%8'''8+88+'
6+8+'8++%%8%+8+'''%+8
('%+%'%8%8%''8+8%8''+8%8'8%
688'%+8+888''8'+'%%8+
(%+%++%8'%%8'''8'8+%+%8
6%88%+%++''%+8%8%%'%%8'
(''88''8'88+'%%%8'8++
6+'%''8+%8+8'%888%8+%++
(%8'%%+888+%++8+'888''
6''%8++'%88+8+88+%%+%'
(8%%++8%++%+'+%+''%%%
6%''8+'8'+'8%%8'8'8+'
4)8
':60
:304
0'%
0'%
':60
:304
':60
':60
':60
0+9
0+9
:304
0+9
0+9
0'%
0%&
0+9
=;00
0+9
*PYSVS
GLVSQI
4)8
4)8
*%1
*%1
4)8
*%1
:-'
:-'
2)(
*%1
*%1
:-'
:-'
:-'
2)(
2)(
2)(
4)8
4)8
6IJIVIRGI
3FVIUYIIXEP
E
1EVMEWIKEVIQIX
EP
3FVIUYIIXEP
F
4IRIHSIXEP
E
4IRIHSIXEP
F
1EVMEWIKEVIQIX
EP
3FVIUYIIXEP
F
1EVMEWIKEVIQIX
EP
1EVMEWIKEVIQIX
EP
1EVMEWIKEVIQIX
EP
7EVRSIXEP

7EVRSIXEP

3FVIUYIIXEP
F
7EVRSIXEP

7EVRSIXEP

4IRIHSIXEP
F
&YWXEQERXIIX
EP
7EVRSIXEP

0ERKIXEP
7EVRSIXEP

KDYHREWDLQHGDORZHU+RYDOXHLQDOSDFDWKDQWKDWREWDLQHGLQ0XUFLDQR*UDQDGLQD
0DODJXHxDDQG&UHROH3HUXYLDQJRDWEUHHGVDQGVLPLODUWRIRXQGLQ
&UHROH0H[LFDQDQGKLJKHUWKDQLQ&UHROH&KLOHDQ$]RUHWDO

&VIIHMRKERHKIRIXMGW
8EFPI)\TIGXIHERHSFWIVZIHLIXIVS^]KSWMX],IERH,S ZEPYIWERHEZIVEKIRYQFIVSJEPPIPIWTIVPSGYW

4STYPEXMSR
,I
,S
%ZIVEKIRYQFIVSJEPPIPIWTIVPSGYW

([SHFWHGKHWHUR]\JRVLW\+HYDOXHVRVFLOODWHGEHWZHHQLQSRSXODWLRQVDQGDQG
VKRZHGLQSRSXODWLRQ7DEOH+HYDOXHVKDYHEHHQORZHUWKDQIRXQGLQ0HULQDVKHHS
EUHHGDQGKLJKHUWKDQIRXQGLQ)OHLVFKVFKDIVKHHSEUHHGLQ,OHGH)UDQFH
LQ0HULQR1HJURLQ0HULQR3UHWRSRUWXJXpVDQGLQ&KXUUD/HEULMDQD$]RUHWDO
$]RUHWDOIRXQGORZHU+HYDOXHVLQ6SDQLVKDQG&UHROHJRDWEUHHGV
)67YDOXHVEHWZHHQDOSDFDSRSXODWLRQSDLUV7DEOHZHUHYHU\VLPLODU7KH\RVFLOODWHGEHWZHHQ
SRSXODWLRQDQGSRSXODWLRQ,QJHQHUDOWKHKLJKHVWYDOXHVZHUHIRXQG
EHWZHHQSRSXODWLRQDQGWKHRWKHUVSRSXODWLRQV7KH1PYDOXHVWKDWSURYLGHLQIRUPDWLRQDERXW
WKHJHQHRZEHWZHHQSRSXODWLRQVZHUHYHU\KLJKHVSHFLDOO\EHWZHHQSRSXODWLRQSDLUV
DQG1RUHODWLRQVKLSZDVIRXQGEHWZHHQWKHJHRJUDSKLFDOYLFLQLW\DQGWKHOHYHORI
JHQHRZ
3RSXODWLRQV)VWDWLVWLFVYDOXHVDUHVKRZQLQ7DEOH),6YDOXHVKRZVWKDWWKHUHLVDUHGXFWLRQLQ
KHWHUR]\JRVLW\GXHWRLQEUHHGLQJLQSRSXODWLRQVDQG),7YDOXHVKRZVWKDWWKHUHLVDUHGXFWLRQLQ
KHWHUR]\JRVLW\GXHWRLQEUHHGLQJLQWKHWRWDOSRSXODWLRQ)L[DWLRQLQGH[RUJHQHWLFGLIIHUHQWLDWLRQ
FRHIFLHQW)67FRQUPVWKDWSRSXODWLRQVDUHYHU\VLPLODUDQGWKHUHLVDYHU\KLJKJHQHRZ
8EFPI*78ZEPYIWFIX[IIREPTEGETSTYPEXMSRTEMVWEFSZIHMEKSREP ERH2QZEPYIWFIPS[HMEKSREP
4STYPEXMSR

8EFPI*WXEXMWXMGWZEPYIWMRWM\EPTEGETSTYPEXMSRW
&IX[IIRTSTYPEXMSRW
'SRHIRGIMRXIVZEP

*-7
*-8
*78

&VIIHMRKERHKIRIXMGW
'SRGPYWMSRW
:HKDYHGHWHFWHGDYHU\KLJKJHQHRZEHWZHHQSRSXODWLRQVDQGDVFDUFHJHQHWLFGLIIHUHQWLDWLRQ
EHWZHHQWKHP7KHUHIRUHWKHKLJKQXPEHURIDOOHOHVGHWHFWHGDQGWKHKLJKYDOXHVRI+HDQG+R
ZLOOSHUPLWXVWRGHVLJQDSURPLVLQJEUHHGLQJSURJUDPPHLQWKLVEUHHGLQRUGHUWRLPSURYHWKH
EUHTXDOLW\WUDLWVDQGLQFUHDVHWKHIDUPVSURWDELOLW\
%GORS[PIHKIQIRXW
7KLVVWXG\ZDVSDUWLDOO\IXQGHGE\DSURMHFWIURPWKH9LFHUUHFWRUDGRGH,QWHUQDFLRQDOL]DFLyQ
\&RRSHUDFLyQ,QWHUQDFLRQDORI8QLYHUVLW\RI&yUGRED6SDLQHQWLWOHG0HMRUDGHODFDSDFLGDG
SURGXFWLYDGHEUDGHDOSDFD9LFXJQDSDFRVHQODVFRPXQLGDGHVDOWRDQGLQDVGHODUHJLyQ
$UHTXLSD3HUX
6IJIVIRGIW
$UDQJXUHQ0HQGH] - DQG - -RUGDQD 8WLOL]DFLyQ GH PDUFDGRUHV GH$'1 PLFURVDWpOLWHV HQ SREODFLRQHV GH
DQLPDOHVGRPpVWLFRVHQSHOLJURGHH[WLQFLyQ0HPRULDV$VRFLDFLyQ9HQH]RODQDGH3URGXFFLyQ$QLPDO$93$
9HQH]XHOD
$]RU3-$0ROLQD09DOHUDDQG$/XTXH'LYHUVLGDGJHQpWLFDGHODVVXESREODFLRQHVGHJDQDGRERYLQR3DMXQR
9,,,-RUQDGDV&LHQWtFDVGH9HWHULQDULD0LOLWDU0DGULG6SDLQ
$]RU3-$0ROLQD)%DUDMDV--$UUDQ]09DOHUD$5RGHURDQG-0LJXpOH](VWLPDFLyQGHOQLYHOGH
GLIHUHQFLDFLyQJHQpWLFDGHODUD]DPHULQDPHGLDQWH$'10LFURVDWpOLWH)($*$6
$]RU3-DQG)*R\DFKH0HWRGRORJtDGHFDUDFWHUL]DFLyQJHQpWLFD,Q3DWULPRQLR*DQDGHUR$QGDOX]9ROXPH,
/DJDQDGHUtDDQGDOX]DHQHO6LJOR;;,-XQWDGH$QGDOXFtDHG6HYLOOD6SDLQSS
$]RU3-09DOHUD-6DUULD-3$YLOH]-1DKHG0'HOJDGRDQG-0&DVWHO(VWLPDWLRQRIJHQHWLFUHODWLRQVKLSV
EHWZHHQ6SDQLVKDQG&UHROHJRDWEUHHGVXVLQJPLFURVDWHOOLWHPDUNHUV(VWLPDFLyQGHUHODFLRQHVJHQpWLFDVHQWUHODV
UD]DVFDSULQDV(VSDxROD\&UHROHXVDQGRPDUFDGRUHVPLFURVDWpOLWHV,7($
%XVWDPDQWH$90/0DWp=DPEHOOLDQG/9LGDO5LRMD,VRODWLRQDQGFKDUDFWHUL]DWLRQRISRO\PRUSKLF
GLQXFOHRWLGH PLFURVDWHOOLWH PDUNHUV IRU OODPD DQG JXDQDFR $LVODPLHQWR \ FDUDFWHUL]DFLyQ GH PDUFDGRUHV
PLFURVDWpOLWHVGLQXFOHRWtGLFRVSROLPyUFRVSDUDODOODPD\HOJXDQDFR0ROHFXODU(FRORJ\1RWHV
)DOFRQHU'6DQG70DFND\,QWURGXFWLRQWRTXDQWLWDWLYHJHQHWLFV$:/RQJPDQ/LPLWHG(VVH[8.
.DGZHOO00)HUQDQGH]+)6WDQOH\5%DOGL-&:KHHOHU55RVDGLRDQG0:%UXGIRUG*HQHWLFDQDO\VLV
UHYHDOVWKHZLOGDQFHVWRUVRIWKHOODPDDQGWKHDOSDFD3URFHHGLQJVRIWKH5R\DO6RFLHW\RI/RQGRQ6HULHV%
%LRORJLFDO6FLHQFHV
/DQJ.<<DQJDQG<3ODQWH)LIWHHQSRO\PRUSKLFGLQXFOHRWLGHPLFURVDWHOOLWHVLQOODPDVDQGDOSDFDV$QLPDO
*HQHWLFV
0DULDVHJDUDP063XOOHQD\HJXP0-DKDEDU$OL566KDK0&73HQHGR8:HUQHU\DQG-6DVVH,VRODWLRQ
DQGFKDUDFHUL]DWLRQRIHLJKWPLFURVDWHOOLWHPDUNHUVLQ&DPHOXVGURPHGDULXVDQGFURVVVSHFLHVDPSOLFDWLRQLQ&
EDFWULDQXVDQG/DPDSDFRV$QLPDO*HQHWLFV
0HPEULOOR$3-$]RU,&OHPHQWH*'RUDGR('LpJXH]$-LPpQH](6DQWRVDQG$0ROLQD(VWXGLRGHODV
UHODFLRQHVJHQpWLFDVGHODVHVWLUSHVGHOFHUGRLEpULFRPHGLDQWHPDUFDGRUHVPLFURVDWpOLWHV,9-RUQDGDV,EpULFDVGH
UD]DVDXWyFWRQDV\VXVSURGXFWRVWUDGLFLRQDOHV,QQRYDFLyQVHJXULGDG\FXOWXUDDOLPHQWDULD6HYLOOD6SDLQ
2EUHTXH9/&RRJOH3-+HQQH\(%DLOH\50DQFLOOD-*DUFtD+LXGREUR3+LQULFKVHQDQG(*&RWKUDQD
&KDUDFWHUL]DWLRQRISRO\PRUSKLFDOSDFDGLQXFOHRWLGHPLFURVDWHOOLWHV$QLPDO*HQHWLFV
2EUHTXH 9 5 0DQFLOOD - *DUFtD+LXGREUR (* &RWKUDQ DQG 3 +LQULFKVHQ E 7KLUWHHQ QHZ GLQXFOHRWLGH
PLFURVDWHOOLWHVLQ$OSDFD$QLPDO*HQHWLFV
3HQHGR0&7$5&DHWDQR.,&RUGRYDD0LFURVDWHOOLWHPDUNHUVIRU6RXWK$PHULFDQFDPHOLGV0DUFDGRUHV
PLFURVDWHOOLWHSDUD&DPpOLGRV6XGDPHULFDQRV$QLPDO*HQHWLFV
3HQHGR 0&7$5 &DHWDQR DQG . &RUGRYD E (LJKW PLFURVDWHOOLWH PDUNHUV IRU 6RXWK$PHULFDQ FDPHOLGV
$QLPDO*HQHWLFV

&VIIHMRKERHKIRIXMGW
6DUQR 59 'DYLG: )UDQNOLQ 6 2%ULHQ DQG: -RKQVRQ 'HYHORSPHQW RI PLFURVDWHOOLWH PDUNHUV LQ WKH
JXDQDFR/DPDJXDQLFRHXWLOLW\IRU6RXWK$PHULFDQFDPHOLGV0ROHFXODU(FRORO\
6DVWUH + ( 5RGHUR$ 5RGHUR 3-$]RU 1 6HS~OYHGD 0 +HUUHUD DQG$ 0ROLQD *HQHWLF 6WXG\ RI WKH
&RORPELDQ&ULROOR&DVDQDUH%UHHGDQGWKH5HODWLRQVKLS:LWK2WKHUVFDWWOH%UHHGV(VWXGLRJHQpWLFRGHODUD]D
&DVDQDUHFULROODFRORPELDQD\VXUHODFLyQFRQRWUDVUD]DVYDFXQDV5HYLVWD&LHQWtFD)&9/8=9RO;9,,1
SS
6FKO|WWHUHU&%+DUU0LFURVDWHOOLWH,QVWDELOLW$QF\FORSHGLDRIOLIHVFLHQFHV,QHVWDELOLGDGGHPLFURVDWHOLWHV
(QFLFORSHGLDGHODVFLHQFLDVGHODYLGD1DWXUH3XEOLVKLQJ*URXS
6ODWNLQ0*HQHRZLQQDWXUDOSRSXODWLRQV$QQXDO5HYLHZRI(FRORJ\6\VWHPDWLFV
9DOOH-3-$]RU09DOHUD--$UUDQ]DQG$0ROLQD$QiOLVLVGHODYDULDELOLGDGJHQpWLFDGHODUD]D0RQWHVLQD
PHGLDQWHPDUFDGRUHVGH$'1)($*$6
:HLU%6DQG&&&RFNHUKDP(VWLPDWLQJ)VWDWLVWLFVIRUWKHDQDO\VLVRISRSXODWLRQVWUXFWXUH(YROXWLRQ

:ULJKW67KHLQWHUSUHWDWLRQRISRSXODWLRQVWUXFWXUHE$VWDWLVWLFVZLWKVSHFLDOUHJDUGWRV\VWHPVRIPDWLQJ
(YROXWLRQ

0EGXEXMSRMRPPEQEW0EQEKPEQE IWXMQEXMRKQMPOMRXEOI

ERHSYXTYXYWMRKWXEFPIMWSXSTIXIGLRMUYIW
$5LHNDQG0*HUNHQ
'HSDUWPHQW RI $QLPDO 6FLHQFHV 8QLYHUVLW\ RI *|WWLQJHQ $OEUHFKW7KDHU:HJ
*|WWLQJHQ*HUPDQ\PJHUNHQ#JZGJGH
3UHVHQWDGGUHVV&HQWUHIRU%HKDYLRXUDODQG3K\VLRORJLFDO(FRORJ\=RRORJ\8QLYHUVLW\RI
1HZ(QJODQG$UPLGDOH16:$XVWUDOLD
%FWXVEGX
&RPSDUHGWRPDQ\RWKHUGRPHVWLFDWHGUXPLQDQWVYHU\OLWWOHLVNQRZQDERXWODFWDWLRQLQ6RXWK
$PHULFDQFDPHOLGV+RZHYHUNQRZOHGJHDERXWPLONDQGPLONQXWULHQWLQWDNHVLQVXFNOLQJ\RXQJ
LVHVVHQWLDOIRUJLYLQJUHFRPPHQGDWLRQVRQDQDGHTXDWHQXWULHQWVXSSO\'LUHFWPHDVXUHPHQW
RIPLONSURGXFWLRQLQ6RXWK$PHULFDQFDPHOLGVLVKDUGO\DSSOLFDEOHGXHWRWKHLUVKRUWWHDWVRI
DERXWFPDQGWKHORZVWRUDJHFDSDFLW\RIWKHXGGHU7KHUHIRUHZHHVWLPDWHGPLONSURGXFWLRQ
LQOODPDVE\PHDVXULQJWKHPLONLQWDNHLQVXFNOLQJ\RXQJDVDQLQGLUHFWWUDLW7KHVWXG\ZDV
FRQGXFWHGLQ*HUPDQ\XQGHUWHPSHUDWHFOLPDWLFFRQGLWLRQVLQYROYLQJODFWDWLQJGDPVDWWZR
FRQVHFXWLYHODFWDWLRQSHULRGVDYHUDJHERG\PDVVPHDQ6'0LONLQWDNHZDV
HVWLPDWHGIURPZDWHUNLQHWLFVRIVXFNOLQJ\RXQJXVLQJWZRGLIIHUHQWVWDEOHLVRWRSHWHFKQLTXHV
QDPHO\WKHLVRWRSHGLOXWLRQWHFKQLTXHLQYROYLQJWKHDSSOLFDWLRQRIGHXWHULXPR[LGH'2WR
WKHVXFNOLQJ\RXQJDQGWKHGRVHWRWKHPRWKHUWHFKQLTXHLQYROYLQJWKHDSSOLFDWLRQRI'2WR
WKHODFWDWLQJGDP7KHODWWHUPHWKRGDGGLWLRQDOO\DOORZVIRUWKHHVWLPDWLRQRIQRQPLONZDWHU
LQWDNHVRIVXFNOLQJ\RXQJ'DLO\PLONLQWDNHVDYHUDJHGDQGNJDW
DQGZHHNVSRVWSDUWXP0LONLQWDNHLQVXFNOLQJ\RXQJGHFUHDVHGZLWKDJHZKHQ
H[SUHVVHGDVGDLO\DPRXQWSHUFHQWDJHRIERG\PDVVRUSHUNJPHWDEROLFVL]H3EXWWKH
LQXHQFHRIDJHZDVHOLPLQDWHGZKHQH[SUHVVHGSHUJGDLO\JDLQ,QVXFNOLQJOODPDVWRWDOZDWHU
WXUQRYHULQFUHDVHGZLWKDJH3ZKHUHDVWKHPLONZDWHUIUDFWLRQGHFUHDVHG3:LWK
LQFUHDVLQJDJHOHVVZDWHUIURPPLONDQGPRUHZDWHUIURPRWKHUVRXUFHVZDVLQJHVWHG,QFRQWUDVW
WKHIUDFWLRQRIWKHPLONZDWHUH[FUHWHGE\WKHGDPGLGQRWFKDQJHLQGLFDWLQJDIDLUO\FRQVWDQW
UHODWLRQVKLSEHWZHHQPLONZDWHUH[FUHWHGYLDPLONDQGWRWDOZDWHULQJHVWHGGXULQJODFWDWLRQ2XU
UHVXOWVVKRZWKDWWKHVWDEOHLVRWRSHWHFKQLTXHVXVHGLQWKHSUHVHQWVWXG\JLYHUHDVRQDEOHHVWLPDWHV
RIWKHPLONSURGXFWLRQLQOODPDV)XUWKHUPRUHFRPELQHGZLWKPLONFRPSRVLWLRQGDWDWKHSUHVHQW
PLONLQWDNHHVWLPDWLRQVDWGLIIHUHQWVWDJHVRIODFWDWLRQFDQEHXVHGWRHVWDEOLVKUHFRPPHQGDWLRQV
IRUQXWULHQWDQGHQHUJ\UHTXLUHPHQWVRIVXFNOLQJOODPDVDQGODFWDWLQJGDPV
.H\ZRUGVOODPDPLONODFWDWLRQGHXWHULXPVWDEOHLVRWRSHV
-RXVSHYGXMSR
'HVSLWHWKHJURZLQJLQWHUHVWLQOODPDVLQ(XURSH1RUWK$PHULFDDQG$XVWUDOLDDVIDUPDQGSHW
DQLPDOVYHU\OLWWOHLQIRUPDWLRQLVDYDLODEOHRQWKHPLONRXWSXWDQGWKHUHDULQJRIVXFNOLQJOODPDV
+DQGPLONLQJLVKDUGO\DSSOLFDEOHWROODPDVGXHWRWKHVKRUWWHDWVRIDERXWFP)RZOHU
,QDGGLWLRQWKHVWRUDJHFDSDFLW\RIWKHXGGHULVYHU\OLPLWHGDQGPLONLQJZRXOGQHHGWRWDNHSODFH
HYHU\KRXUVDFFRUGLQJWRWKHQDWXUDOVXFNOLQJLQWHUYDORIQXUVLQJOODPDV3RXLOORQ
6WDEOHLVRWRSHGLOXWLRQWHFKQLTXHVRIIHUDYLDEOHDQGUHODWLYHO\SUHFLVHPHWKRGIRUPHDVXULQJPLON
LQWDNHDQGRXWSXW2QHRIWKHVHPHWKRGVLVWKHLVRWRSHGLOXWLRQ,'WHFKQLTXHZKLFKPHDVXUHV
WKHGHFOLQHRIDNQRZQDGPLQLVWHUHGDPRXQWRIK\GURJHQLVRWRSHLQERG\XLGVIURPWKHGLOXWLRQ
E\LQJHVWHGZDWHULQWKHVXFNOLQJ\RXQJ$QRWKHUPHWKRGLVWKHLVRWRSHWUDQVIHU,7PHWKRG

EDVHGRQWKHWUDQVIHURIRQHZDWHULVRWRSHIURPWKHODFWDWLQJPRWKHUWRWKHVXFNOLQJ\RXQJYLD
PLONDQGWKHFRQFXUUHQWGHWHUPLQDWLRQRIWKHZDWHUWXUQRYHURIWKH\RXQJE\DQRWKHUK\GURJHQ
LVRWRSH$GHWDLOHGGHVFULSWLRQRIERWKWHFKQLTXHVLVJLYHQHOVHZKHUH+ROOHPDQHWDO
2IWHGDO'RYH7KH,7WHFKQLTXHKDVWKHDGYDQWDJHWKDWQRRWKHUVRXUFHVRI
ZDWHULQWDNHVXFKDVGULQNLQJZDWHUZDWHUIURPIHHGVWXIIHWFLQJHVWHGE\WKHVXFNOLQJ\RXQJ
QHHGWREHDFFRXQWHGIRUWRHVWLPDWHWKHPLONLQWDNH)XUWKHUPRUHWKHZDWHUGHULYHGIURPPLON
DQGIURPRWKHUVRXUFHVFDQEHGLVWLQJXLVKHGWKXVDOORZLQJWKHHVWLPDWLRQRIWRWDOPLONLQWDNH
DQGZDWHULQWDNHUDWH+RZHYHUDVUHJXODWLRQVIRUWKHXVHRIUDGLRDFWLYHVXEVWDQFHVDQGWKHLU
GLVSRVDOEHFRPHVWULFWHUWKHH[SHULPHQWDODSSOLFDWLRQRI+LVLQFUHDVLQJO\GLIFXOWHVSHFLDOO\
LQODUJHUDQLPDOV
$QDOWHUQDWLYHDSSURDFKLVWKHVRFDOOHGGRVHWRWKHPRWKHU'770WHFKQLTXH&RZDUGHWDO
ZKLFKLQYROYHVWKHDSSOLFDWLRQRI'2WRDODFWDWLQJIHPDOH%\PHDVXULQJWKHWUDQVIHURI
'2IURPWKHPRWKHUWRWKHVXFNOLQJ\RXQJYLDPLONWRWDOGDLO\PLONLQWDNHFDQEHFDOFXODWHG
7KLVWHFKQLTXHKDVVRIDUEHHQDSSOLHGPDLQO\WRKXPDQV&RZDUGHWDO%XWWHHWDO
+DLVPDHWDO7KHDGYDQWDJHRIWKLVWHFKQLTXHRYHUWKH,'WHFKQLTXHLVWKDWE\DSSO\LQJ
VRPHDVVXPSWLRQVLWDOORZVWKHHVWLPDWLRQRIRWKHUVRXUFHVRIZDWHULQWDNHLQWKH\RXQJWKDQ
ZDWHULQWDNHYLDPLON
7KHUHIRUHWKHSUHVHQWLQYHVWLJDWLRQVXPPDULVHVSXEOLVKHGPLONLQWDNHDQGRXWSXWGDWDLQOODPDV
PHDVXUHGE\WKH,'DQG'770PHWKRG3RVVLEOHUHFRPPHQGDWLRQVIRUWKHHQHUJ\VXSSO\LQ
VXFNOLQJOODPDVZHUHGHGXFHG)XUWKHUPRUHFDOFXODWHGGDWDRQWKHWRWDOZDWHUWXUQRYHU7:7
DQG ZDWHU LQWDNH LQ WKH ODFWDWLQJ GDP DOORZHG WKH HVWLPDWLRQ RI ZDWHU FRQVXPSWLRQ GXULQJ
ODFWDWLRQLQWKHGDP
1EXIVMEPWERHQIXLSHW
%RMQEPWERHQEREKIQIRX
,QWKUHHWULDOVDWRWDORIIHPDOHOODPDVDQGQXUVLQJ\RXQJFULDVZHUHLQYROYHGRULJLQDWLQJ
IURPDKHUGRIWKH([SHULPHQWDO6WDWLRQ5HOOLHKDXVHQRI*|WWLQJHQ8QLYHUVLW\DQGDSULYDWH
*HUPDQ EUHHGHU$QLPDOV ZHUH WUDQVIHUUHG PRQWKV SULRU WR SDUWXULWLRQ IRU DFFOLPDWLVDWLRQ
DQGZHUHNHSWDWWKH'HSDUWPHQWRI$QLPDO6FLHQFHV8QLYHUVLW\RI*|WWLQJHQ*HUPDQ\IRU
DODFWDWLRQSHULRGRIZHHNVXQGHUFRQWUROOHGVWDEOHFRQGLWLRQV(DFKURRPPHDVXUHGE\
PDQGDQLPDOVKDGSHUPDQHQWDFFHVVWRDQRXWGRRUSHQ,QWKHVWDEOHOLJKWVFKHGXOHZDV
NHSWFRQVWDQWKOLJKWWRKGDUN/ODPDGDPVZHUHIHGWZLFHGDLO\NJRIDFRPPHUFLDO
PL[HGJUDLQDQGPRODVVHVIHHGFRQWDLQLQJ&3FUXGHEUHFUXGHIDW
FDOFLXPSKRVSKRUXVVRGLXPDVKDQG0-NJRI0(+*65DLIIHLVHQ
$*5$9,6$*5RVGRUI*HUPDQ\+D\IURPU\HJUDVVGRPLQDWHGJUDVVODQG'0JNJ
IUHVKPDWWHUFUXGHDVKJNJ'0&3JNJ'0HWKHUH[WUDFWJNJ'0FUXGHEUH
JNJ'0QLWURJHQIUHHH[WUDFWLYHVJNJ'0ZDWHUDQGPLQHUDOIHHG+*0,1
5DLIIHLVHQ$*5$9,6$*0LQGHQ:HVWI*HUPDQ\ZHUHDYDLODEOHDGOLELWXP
&ULDVKDGDFFHVVWRKD\DVKD\ZDVFRQVLGHUHGDQHJOLJLEOHVRXUFHRIH[WUDQHRXVZDWHUIRUWKH
PHDVXUHPHQWSHULRGV:DWHULQWDNHE\WKHFULDVZDVUHVWULFWHGWRGDPVPLONXQWLOZHHNSRVW
SDUWXP33VLQFHLQDSUHWULDOFULDVGLGQRWVWDUWWRFRQVXPHGULQNLQJZDWHUXQWLOZHHN33
$IWHUWKDWFULDVKDGDFFHVVWRZDWHUDGOLELWXPH[FHSWIRUWKHPHDVXUHPHQWSHULRGVZKHQZDWHU
LQWDNHZDVUHVWULFWHGWRPLONZDWHU

1MPOMRXEOIWXYHMIW
0LONLQWDNHZDVHVWLPDWHGIURPZDWHUNLQHWLFVRIVXFNOLQJ\RXQJDQGGDPVXVLQJWZR
GLIIHUHQWVWDEOHLVRWRSHWHFKQLTXHVQDPHO\WKHLVRWRSHGLOXWLRQ,'WHFKQLTXHDQGWKHGRVHWR
WKHPRWKHU'770WHFKQLTXH&RZDUGHWDO+DLVPDHWDO)RUERWKWHFKQLTXHV
WKHPHDVXUHPHQWSHULRGVZHUHDWWRWRDQGWRZHHNV33ODVWLQJGHDFK
$YHUDJHVZHUHFDOFXODWHGIRUWKHPLGSRLQWRIHDFKVWXG\SHULRG,QFULDVPLONLQWDNHZDV
GHWHUPLQHGIURPZDWHUNLQHWLFVE\FDOFXODWLQJWKHZDVKRXWUDWHVRIDGPLQLVWHUHGGHXWHULXP
'2,QDQRWKHUFULDVPLONLQWDNHZDVGHWHUPLQHGE\WKH'770WHFKQLTXH7KHPHWKRG
GHSHQGVRQPHDVXULQJWKHWUDQVIHURI+ODEHOOHGZDWHUIURPWKHPRWKHUWRWKH\RXQJYLDPLON$
GHWDLOHGGHVFULSWLRQRIERWKPHWKRGVLVJLYHQLQ5LHNHWDODQG5LHNDQG*HUNHQ
7XEXMWXMGEPEREP]WIW
6WDWLVWLFDO DQDO\VHV ZHUH SHUIRUPHG ZLWK WKH VRIWZDUH SDFNDJH 6WDWLVWLFDO$QDO\VLV 6\VWHPV
YHUVLRQ 6$6 6H[ RI FULD H[HUWHG QR VLJQLFDQW LQXHQFH LQ DQ\ RI WKH WULDOV
$FFRUGLQJO\DWZRZD\$129$ZDVSHUIRUPHGLQFOXGLQJRQO\WKHHIIHFWVRIDJHDQGDQLPDO
RQYDULRXVSDUDPHWHUVXVLQJWKH*HQHUDO/LQHDU0RGHOSURFHGXUH352&*/0ZLWKDQLPDO
DVUDQGRPDQGDJHDV[HGHIIHFW$QLQWHJUDWHGPXOWLSOHUDQJHWHVW6WXGHQW1HZPDQ.HXOV
ZDVXVHGWRGHWHFWGLIIHUHQFHVEHWZHHQPHDQVZLWKDVLJQLFDQFHOHYHO
6IWYPXW
'VMEW
,Q 7DEOH PHDVXUHG DQG FDOFXODWHG GDWD RQ ERG\ PDVV GDLO\ PDVV JDLQ ERG\ ZDWHU PLON
LQWDNHQRQPLONZDWHULQWDNHDQGPLONQXWULHQWVLQWDNHDUHSUHVHQWHG%RG\PDVVLQFUHDVHG
VLJQLFDQWO\ZLWKDJH3ZKLOHGDLO\PDVVJDLQUHYHDOHGRQO\DGHFUHDVLQJWHQGHQF\7KH
ZDWHUIUDFWLRQZKLFKLVWKHUHODWLRQEHWZHHQERG\ZDWHUDQGERG\PDVVGHFUHDVHG3
%\FRQWUDVWWRWDOZDWHUWXUQRYHU7:7LQFUHDVHGVLJQLFDQWO\ZLWKDJHZKHWKHUH[SUHVVHG
DVNJGRUSHUNJ%:30LONLQWDNHFDOFXODWHGDVGDLO\DPRXQWSHUFHQWDJHRIERG\
PDVVRUSHUNJPHWDEROLFPDVVGHFUHDVHGVLJQLFDQWO\ZLWKDJH3+RZHYHUZKHQ
H[SUHVVHGDVSHUJJURZWKWKHDJHHIIHFWZDVHOLPLQDWHG3 &RPELQLQJGDWDRQPLON
ZDWHULQWDNHDQG7:7UHYHDOHGDVWHDG\GHFOLQHLQWKHPLONZDWHUIUDFWLRQ3LQGLFDWLQJ
WKDWZLWKLQFUHDVLQJDJHOHVVZDWHUIURPPLONDQGPRUHZDWHUIURPRWKHUVRXUFHVZDVLQJHVWHG
$FFRUGLQJO\ QRQPLON ZDWHU LQWDNH LQFUHDVHG ZLWK DJH 3 0LON QXWULHQW LQWDNHV
FDOFXODWHGE\FRPELQLQJPLONLQWDNHZLWKWKHUHVSHFWLYHPLONFRPSRVLWLRQGDWDIURP7DEOH
GHFUHDVHGVLJQLFDQWO\ZLWKDJHIRUDOOQXWULHQWV
(EQW
%RG\PDVVRIWKHGDPVFKDQJHGVLJQLFDQWO\3EHWZHHQEXWQRWGXULQJPHDVXUHPHQW
SHULRGV7DEOH%RG\ZDWHUDQGERG\ZDWHUIUDFWLRQ3 DQG3 UHVSHFWLYHO\
ZHUH QRW DIIHFWHG E\ WKH ODFWDWLRQ VWDJH 7KH IUDFWLRQDO ZDWHU WXUQRYHU UDWH LQVWHDG VWHDGLO\
GHFUHDVHGZLWKSURORQJHGODFWDWLRQ3$FFRUGLQJO\7:7GHFOLQHGZKHWKHUH[SUHVVHG
DVGDLO\DPRXQWSHUFHQWDJHRIERG\PDVVRUSHUNJPHWDEROLFPDVV+RZHYHUWKHPLONZDWHU
IUDFWLRQGLGQRWFKDQJHVLJQLFDQWO\3 LQGLFDWLQJDIDLUO\FRQVWDQWUHODWLRQVKLSEHWZHHQ
PLONZDWHUVHFUHWLRQDQGWRWDOZDWHULQJHVWHGGXULQJODFWDWLRQ)DW'0DQGHQHUJ\FRQFHQWUDWLRQ
RIWKHPLONLQFUHDVHGVLJQLFDQWO\DVODFWDWLRQSURFHHGHGZKLOHSURWHLQDQGODFWRVHUHPDLQHG
IDLUO\FRQVWDQW

8EFPI1MPOQMPORYXVMIRXERHRSRQMPO[EXIVMRXEOIWSJWYGOPMRKPPEQEWQIEWYVIHF]XLIMWSXSTIHMPYXMSR
ERHXLIHSWIXSXLIQSXLIVXIGLRMUYIWIIXI\XJSVHIXEMPWZEPYIWEVIQIERW7) QSHMIHEJXIV6MIOIXEP
6MIOERH+IVOIR
4EVEQIXIV
&SH]QEWWOK
1EWWKEMRKH
&SH][EXIVJVEGXMSR
1MPO[EXIVMRXEOIOKH
1MPOMRXEOIOKH
TIVGIRXSJFSH]QEWW
TIVOKFSH]QEWW K
TIVKKVS[XLK
8SXEP[EXIVXYVRSZIVOKH
TIVOKFSH]QEWW
TIVOKFSH][EXIVQP
2SRQMPO[EXIVMRXEOIOKH
1MPO[EXIVJVEGXMSR
1MPORYXVMIRXMRXEOIW
*EXKH
4VSXIMRKH
0EGXSWIKH
(V]QEXXIVKH
+VSWWIRIVK]1.H

8MQITSWXTEVXYQH
4ZEPYIW

%KIIJJIGX %RMQEP
IJJIGX
E

E
E
E
E
E

E
E
E
E
E
F

F
F
F
F
F

E
F
F
E
F
G

F
G
F
G
G

F
F
F
F
G

E
E
E
E
E
EF
EF
F
F
F
F
F
F
F
G

EFG 1IERZEPYIW[MXLMREVS[[MXLHMJJIVIRXWYTIVWGVMTXPIXXIVW[IVIWMKRMGERXP]HMJJIVIRX4

FEWIHSR7XYHIRX2I[QER/IYPWQYPXMTPIVERKIXIWXJSVQYPXMTPIGSQTEVMWSRW
6IPEXMSRWLMTFIX[IIRFSH][EXIVERHFSH]QEWW
6IPEXMSRWLMTFIX[IIRQMPO[EXIVERHXSXEP[EXIVXYVRSZIV
(MWGYWWMSR
'VMEW
/ODPDFULDVFRQVXPHGN-0(SHUNJ%:RUN-*(SHUNJ%:DWSHDNODFWDWLRQ
ZKLFKLVFORVHWRWKHYDOXHRIN-*(SHUNJ%:GHULYHGE\2IWHGDOIURPPLON
LQWDNHGDWDRIVHYHUDOVSHFLHVDWSHDNODFWDWLRQLQFOXGLQJGRPHVWLFDQGZLOGUXPLQDQWV2QO\
WZRVWXGLHVGHWHUPLQHGWKHPDLQWHQDQFHUHTXLUHPHQWVIRUOODPDVLQDGXOWDQLPDOV6FKQHLGHUHW
DO&DUPHDQHWDO%DVHGRQWKHVHUHVXOWV9DQ6DXQVXJJHVWVDQDYHUDJH
YDOXHIRUPDLQWHQDQFHRIN-0(NJ%:SHUGD\IRUOODPDV+RZHYHUWKHVHYDOXHVDUH
QRWDSSOLFDEOHIRUFULDVZKRVHRQO\QXWULHQWVRXUFHLVPLONEHFDXVHWKHUHVSHFWLYHYDULDEOHVQHHG
WREHVFDOHGWRPHWDEROLFVL]HUDLVHGWRWKHSRZHURI5LHN$VVKRZQLQ)LJXUH
SUHGLFWHGPDLQWHQDQFHDW]HURJURZWKIRUVXFNOLQJOODPDVDWSHDNODFWDWLRQLVN-NJ%:SHU
GD\FRUUHVSRQGLQJWR0-0(7KHUHPDLQLQJ0(IURPWKHHQHUJ\FRQVXPHG0-0(G
LVWKHQDVVXPHGWREHXVHGIRUJURZWKDQGFRUUHVSRQGVWRN-0(JPDVVJDLQ7KLVHVWLPDWHLV
WKHVDPHDVUHSRUWHGE\-RKQVRQIRUVXFNOLQJOODPDVEXWQRPHWKRGRORJ\ZDVGHVFULEHG

8EFPI&SH][EXIVXYVRSZIVERHQMPOGSQTSWMXMSRMRPPEQEHEQWRYQFIVWEVIQIERW7)R! EJXIV6MIO

ERH+IVOIR
4EVEQIXIV
8MQITSWXTEVXYQH
&SH]QEWWOK
*VEGXMSREPXYVRSZIVH
&SH][EXIVOK
&SH][EXIVJVEGXMSR
8SXEP[EXIVXYVRSZIVOKH
TIVOKFSH]QEWW K
TIVGIRXSJFSH]QEWW
1MPO[EXIVJVEGXMSR
1MPOSYXTYXKOK&;
1MPOGSQTSWMXMSR
*EX
4VSXIMR
0EGXSWI
(V]QEXXIV
)RIVK]1.OK
4ZEPYIW

%KIIJJIGX %RMQEP
IJJIGX
E
E

E
E
E

E
F
E

F
E
E

F
F
F

G
F
F

F

E

E
E
EF

F
F
F

G
G

EFG 1IERZEPYIW[MXLMREVS[[MXLHMJJIVIRXWYTIVWGVMTXPIXXIVW[IVIWMKRMGERXP]HMJJIVIRX4

FEWIHSR7XYHIRX2I[QER/IYPWQYPXMTPIVERKIXIWXJSVQYPXMTPIGSQTEVMWSRW
6IPEXMSRWLMTFIX[IIRFSH][EXIVERHFSH]QEWW
6IPEXMSRWLMTFIX[IIRQMPO[EXIVI\GVIXIHZMEQMPOERHXSXEP[EXIVXYVRSZIV
'DLO\PDVVJDLQJNJ

'DLO\HQHUJ\LQWDNHN-0(NJ
*MKYVI8LIVIPEXMSRWLMTFIX[IIRHEMP]QEWWKEMRERHQIXEFSPMWEFPIIRIVK]MRXEOIMRWYGOPMRKPPEQEGVMEW
R! EXTIEOPEGXEXMSRHE]WTSWXTEVXYQ 4VIHMGXIHQEMRXIRERGIEXÎVSKVS[XL MWO.OK H
=!<6 !4

)XUWKHUPRUHWKHSHUFHQWDJHRIZDWHUFRPLQJIURPPLONGHFUHDVHGDVODFWDWLRQSURFHHGHGZKLOH
WKH7:7LQFUHDVHG7DEOHXQGHUOLQLQJWKDWDQLQFUHDVLQJDPRXQWRIZDWHUFDPHIURPRWKHU
VRXUFHVDVH[SHFWHG6LPLODUQGLQJVZHUHUHSRUWHGIRUWKHWDPPDUZDOODE\'RYHDQG&RUN
DQGVKHHS'RYHEDVHGRQWKHLVRWRSHWUDQVIHUPHWKRG+ROOHPDQHWDO
:KHQ7:7ZDVH[SUHVVHGDVSHUFHQWDJHRIERG\PDVVRURQWKHEDVLVRIPOSHUOLWUHERG\
ZDWHU7DEOHWRGLVFRXQWIRUGLIIHUHQFHVLQERG\IDWFRQWHQW.LQJWKHVDPHWUHQG
DVLQ7:7FRXOGEHREVHUYHG
(EQW
$VPLONSURGXFWLRQLQOODPDGDPVGHFUHDVHGZLWKSURORQJHGODFWDWLRQZDWHULQWDNHDQGIUDFWLRQDO
WXUQRYHUUDWHDOVRGHFUHDVHG7DEOHDVOHVVZDWHUZDVQHHGHGIRUPLONSURGXFWLRQ
%RG\ ZDWHU H[SUHVVHG DV SHUFHQWDJH RI ERG\ PDVV ERG\ ZDWHU IUDFWLRQ ZDV IRU DOO WKUHH
ODFWDWLRQVWDJHVLQWKHUDQJHRIUHSRUWHGGDWDRQDGXOWOODPDV0DUFLOHVHHWDO)RZOHU
LQGLFDWLQJWKDWWKHERG\ZDWHUIUDFWLRQRIODFWDWLQJOODPDVUDQJHVEHWZHHQWR
7DEOH,WLVLQWHUHVWLQJWRQRWHWKDWWKHPLONZDWHUIUDFWLRQZKLFKGHVFULEHVWKHUHODWLRQVKLS
EHWZHHQPLONZDWHUVHFUHWHGDQG7:7LVIDLUO\VWDEOHEHWZHHQPHDVXUHPHQWSHULRGV7DEOH
VXJJHVWLQJWKDWGXULQJODFWDWLRQWRWDO7:7LVGLUHFWO\UHODWHGWRPLONSURGXFWLRQ
'SRGPYWMSR
7KHSUHVHQWVXPPDU\RISXEOLVKHGGDWDRQPLONLQWDNHDQGRXWSXWLQOODPDVXVLQJGLIIHUHQW
PHDVXUHPHQW WHFKQLTXHV VXFK DV WKH '770 DQG WKH ,' PHWKRG JLYHV UHDVRQDEOH HVWLPDWHV
IRUWKHHQHUJ\VXSSO\IRUVXFNOLQJOODPDV+RZHYHUDELJJHUGDWDEDVHLVQHHGHGIRUREWDLQLQJ
PRUHUHOLDEOHHVWLPDWHVRQQXWULHQWUHTXLUHPHQWVIRUODFWDWLQJDQGVXFNOLQJOODPDV8QWLOWKHQ
WKHSUHVHQWGDWDRQPLONDQGQXWULHQWLQWDNHVFDQVHUYHDVDEDVLVIRUIXUWKHUUHFRPPHQGDWLRQV
6IJIVIRGIW
%XWWH1):::RQJ%:3DWWHUVRQ&*DU]DDQG3'.OHLQ+XPDQPLONLQWDNHPHDVXUHGE\DGPLQLVWUDWLRQ
RIGHXWHULXPR[LGHWRWKHPRWKHUDFRPSDULVRQZLWKWKHWHVWZHLJKLQJWHFKQLTXH$PHULFDQ-RXUQDORI&OLQLFDO
1XWULWLRQ
&DUPHDQ %5 .$ -RKQVRQ '( -RKQVRQ DQG /: -RKQVRQ 0DLQWHQDQFH HQHUJ\ UHTXLUHPHQW RI OODPDV
$PHULFDQ-RXUQDORI9HWHULQDU\5HVHDUFK
&RZDUG:$0%6DZ\HU5*:KLWHKHDG$03UHQWLFHDQG-(YDQV1HZPHWKRGIRUPHDVXULQJPLONLQWDNHV
LQEUHDVWIHGEDELHV/DQFHW
'RYH+(VWLPDWLRQRIWKHLQWDNHRIPLONE\ODPEVIURPWKHWXUQRYHURIGHXWHULXPRUWULWLXPODEHOOHGZDWHU
%ULWLVK-RXUQDORI1XWULWLRQ
'RYH + DQG 6- &RUN /DFWDWLRQ LQ WKH WDPPDU ZDOODE\ 0DFURSXV HXJHQLL , 0LON FRQVXPSWLRQ DQG WKH
DOJHEUDLFGHVFULSWLRQRIWKHODFWDWLRQFXUYH-RXUQDORI=RRORJ\
)RZOHU0(0HGLFLQHDQGVXUJHU\RI6RXWK$PHULFDQFDPHOLGV/ODPD$OSDFD9LFXQD*XDQDFR,RZD6WDWH
8QLYHUVLW\3UHVV$PHV,$86$
+DLVPD+:$&RZDUG($OEHUQD]*+9LVVHU-&.:HOOV$:ULJKWDQG&*9LFWRULD%UHDVWPLONDQG
HQHUJ\LQWDNHLQH[FOXVLYHO\SUHGRPLQDQWO\DQGSDUWLDOO\EUHDVWIHGLQIDQWV(XURSHDQ-RXUQDORI&OLQLFDO1XWULWLRQ

+ROOHPDQ')5*:KLWHDQG-5/XLFN1HZLVRWRSHPHWKRGVIRUHVWLPDWLQJPLONLQWDNHDQG\LHOG-RXUQDO
RI'DLU\6FLHQFH
+ROOHPDQ')5*:KLWHDQG-5/XLFN$SSOLFDWLRQRIWKHLVRWRSLFZDWHUPHWKRGIRUPHDVXULQJWRWDOERG\
ZDWHUERG\FRPSRVLWLRQDQGERG\ZDWHUWXUQRYHU,Q,$($JHQF\HG8VHRIWULWLDWHGZDWHULQVWXGLHVRI
SURGXFWLRQDQGDGDSWDWLRQLQUXPLQDQWV,QWHUQDWLRQDO$WRPLF(QHUJ\$JHQF\1DLUREL.HQ\DSS

-RKQVRQ/:/DPDQXWULWLRQ,Q/:-RKQVRQHG7KH9HWHULQDU\&OLQLFVRI1RUWK$PHULFD)RRG$QLPDO
3UDFWLFH9RO:%6DXQGHUV&R3KLODGHOSKLD3$86$SS
.LQJ-0*DPHGRPHVWLFDWLRQIRUDQLPDOSURGXFWLRQLQ.HQ\D)LHOGVWXGLHVRIWKHERG\ZDWHUWXUQRYHURIJDPH
DQGOLYHVWRFN-RXUQDORI$JULFXOWXUDO6FLHQFH
0DUFLOHVH1$0'*KH]]L0$$ED5$$O]ROD+6RODQDDQG509DOVHFFKL3K\VLRORJLFDOVWXGLHVLQ
WKH6RXWK$PHULFDQFDPHOLGOODPD/DPDJXDQLFRHIGJODPD,%RG\ZDWHUVSDFHVDQGZDWHUWXUQRYHU$FWD
3K\VLRORJLFD3KDUPDFRORJLFDHW7KHUDSHXWLFD/DWLQRDPHULFDQD
2IWHGDO 27 0LON SURWHLQ DQG HQHUJ\ LQWDNHV RI VXFNOLQJ PDPPDOLDQ \RXQJ D FRPSDUDWLYH VWXG\ &RUQHOO
8QLYHUVLW\,WKDFD1<86$
3RXLOORQ & 8QWHUVXFKXQJHQ ]XP 0XWWHU.LQG9HUKDOWHQ YRQ /DPDV /DPD JODPD XQWHUEHVRQGHUHU
%HUFNVLFKWLJXQJGHV6DXJXQG6lXJHYHUKDOWHQV-XVWXV/LHELJ8QLYHUVLWlW*LHHQ*LHHQ*HUPDQ\
5LHN$5HODWLRQVKLSEHWZHHQPLONHQHUJ\LQWDNHDQGJURZWKUDWHLQVXFNOLQJPDPPDOLDQ\RXQJDWSHDNODFWDWLRQ
DQXSGDWHGPHWDDQDO\VLV-RXUQDORI=RRORJ\
5LHN$DQG0*HUNHQ0LONLQWDNHVWXGLHVLQOODPDV/DPDJODPDXVLQJWKHGRVHWRWKHPRWKHUWHFKQLTXH
6PDOO5XPLQDQW5HVHDUFK
5LHN$0*HUNHQDQG(0RRUV0HDVXUHPHQWRIPLONLQWDNHLQVXFNOLQJOODPDV/DPDJODPDXVLQJGHXWHULXP
R[LGHGLOXWLRQ-RXUQDORI'DLU\6FLHQFH
6$68VHUV*XLGH6WDWLVWLFV5HOHDVH6$6,QVW,QF&DU\1&86$
6FKQHLGHU:5+DXIIHDQG:YDQ(QJHOKDUGW(QHUJLHXQG6WLFNVWRIIXPVDW]EHLP/DPD,Q<YDQGHU+RQLQJ
HG(QHUJ\0HWDEROLVPRI)DUP$QLPDOV($$3SXEOLFDWLRQV6WXWWJDUW*HUPDQ\SS
9DQ 6DXQ 5- 1XWULHQW UHTXLUHPHQWV RI 6RXWK $PHULFDQ FDPHOLGV $ IDFWRULDO DSSURDFK 6PDOO 5XPLQDQW
5HVHDUFK

*IIHTVIJIVIRGIWERHVIGMTIEPXIVREXMZIWJSVEPTEGEWMRE
,YRKEVMER^SS
$3UiJDL$.0ROQiU-3HNOL59HSULN*<+XV]iUDQG%RGQiU
,QWHUQDWLRQDO 'HYHORSPHQW DQG 7URSLFDO 'HSDUWPHQW 6]HQW ,VWYiQ 8QLYHUVLW\ )DFXOW\ RI
$JULFXOWXUDODQG(QYLURQPHQWDO6FLHQFHV3iWHU.iURO\X*|G|OO+XQJDU\
ERGQDUDNRV#PNNV]LHKX
5HVHDUFK,QVWLWXWHIRU$QLPDO%UHHGLQJDQG1XWULWLRQ*|G|OO5HVHDUFK,QVWLWXWH,VDV]HJLX
*|G|OO+XQJDU\
6]HJHG=RR&VHUHSHVVRU6]HJHG+XQJDU\
%FWXVEGX
$ IHHG SUHIHUHQFH WULDO ZDV GRQH ZLWK IRXU DOSDFDV PDOH DQG IHPDOH LQ 6]HJHG =RR
+XQJDU\$OSDFDVLQ+XQJDULDQ]RRVKDYHDGDSWHGZHOOWRWKHORFDOFOLPDWHDQGDOVRVKRZYHU\
JRRGUHVXOWVLQUHSURGXFWLRQ)HHGLQJRIWKHVHDQLPDOVLVEDVHGRQORFDOIRUDJHVEXWXQH[SHFWHG
IHHGLQJSUREOHPVDSSHDULQPDQ\FDVHVDFFRUGLQJWRWKHHQHUJ\DQGSURWHLQQHHGV$OSDFDVDUH
XVXDOO\IHGE\ZHWIHHGVDQGIRUDJHVDSSOHDQGRWKHUIUXLWVFDUURWFDEEDJHDYDLODEOHIUHVK
IHHGVDQGDGGLWLRQDOO\KRUVHIRGGHULQWKHORFDO]RRV%XWLWGRHVQRWFRPSOHWHO\VDWLVI\WKH
QXWULHQWDQGSURWHLQQHHGVRIWKHVHDQLPDOV5HVXOWVVKRZWKDWWKHIHHGLQJRIDOSDFDVFDQEH
EDVHGRQORFDOIRUDJHV$OSDFDVDUHWKRXJKWWRSDUWLFXODUO\OLNHWKHIUHVKRUZLOWHGIHHGDQGWKH
GLIIHUHQWNLQGVRIKD\VZHUHDOVRDSSUHFLDWHGE\WKHDQLPDOV%DVHGRQWKHUHVXOWVRISUHIHUHQFHV
WULDOVDQGQXWULWLRQDOSDUDPHWHUVDOIDOIDKD\DQGJUDVVKD\DUHWKHEDVLFIRUDJHWKURXJKRXWWKH
\HDU$GGLWLRQDOO\LQHDFKVHDVRQWKHUHDUHGLIIHUHQWDGGLWLRQDOIHHGVHJ6XGDQJUDVVDQGRWKHU
IUHVKIRUDJHVLQVSULQJDSSOHDQGFDEEDJHLQVXPPHUVXJDUEHHWDQGUHGEHHWLQDXWXPQDSSOH
FDUURWDQGFDEEDJHLQZLQWHUHWF%\KDUPRQLVLQJWKHQXWULWLRQDOSDUDPHWHUVRIWKHGLIIHUHQW
IRUDJHVDQGWKHQXWULWLRQDOQHHGVRIDOSDFDVDVSHFLFDOSDFDUHFLSHIRU]RRVFDQEHPDGH
.H\ZRUGVDOSDFD]RRIHHGLQJIHHGSUHIHUHQFHV
-RXVSHYGXMSR
$OSDFDVDUHNHSWRQO\LQ]RRVDQGZLOGDQLPDOSDUNVDVH[RWLFDQLPDOVLQ+XQJDU\+RZHYHU
GXHWRWKHSURGXFWLRQRIZRROIRUKLJKTXDOLW\WH[WLOHVDOSDFDVFDQDOVREHNHSWDVOLYHVWRFN
DQLPDOV7KHIHHGLQJV\VWHPRIDOSDFDVNHSWLQ+XQJDULDQ]RRVLVDFWXDOO\DGKRFDQGEDVHG
RQWKHHVVHQWLDODQGUHODWLYHO\ORZFRVWIHHGVWXIIVZKLFKDUHDYDLODEOHLQWKHDFWXDOVHDVRQ7KDW
LVWKHPDLQUHDVRQZK\WKHIHHGLQJRIDOSDFDVQHHGVWREHFRQVLGHUHGDFFRUGLQJWRWKHDFWXDO
HFRQRPLFDOFLUFXPVWDQFHVVHDVRQDQGWKHSK\VLRORJLFDOVWDWXVRIWKHDQLPDOV
7KHDLPRIWKLVSURMHFWZDVWRLQYHVWLJDWHWKHIHHGSUHIHUHQFHVRIDOSDFDVDQGWRQGGLIIHUHQW
NLQGVRIIHHGVWXIIVWRFRPSOHPHQWWKHLUSUHVHQWIRGGHU:HDUHSODQQLQJWRZRUNRXWDQRSWLPDO
UHFLSHIRUDOSDFDVLQ6]HJHG=RR,WLVHVVHQWLDOWRHQVXUHQXWULWLRXVDQGVXIFLHQWIHHGIRUWKH
DOSDFDVWRPDLQWDLQWKHLUKHDOWKZHOIDUHUHSURGXFWLRQUDWHDQGZRROSURGXFWLRQ2QHRIWKHNH\
QDQFLDOFKDOOHQJHVIRUDEUHHGLQJIDUPRUD]RRLVWRREWDLQIRGGHUIRUWKHDQLPDOVWKDWPHHWV
WKHTXDOLWDWLYHDQGTXDQWLWDWLYHUHTXLUHPHQWV%DVHGRQWKHUHVXOWVRIWKLVUHVHDUFKDQDGHTXDWH
UHFLSHKDVEHHQZRUNHGRXWIRUDOSDFDVFRQVLGHULQJWKHQXWULWLRQDOQHHGVIHHGSUHIHUHQFHVDV
ZHOODVWKHHFRQRPLFDVSHFWV

1EXIVMEPERHQIXLSHW
%RMQEPWERHLSYWMRKGMVGYQWXERGIW
)RXUDOSDFDVPDUHVDQGVWDOOLRQZHUHXVHGIRUWKLVWULDODW6]HJHG=RR+XQJDU\-RKQQ\
LVIRXU\HDUVROGDQGKLVERG\ZHLJKWLVNJZKLOH-XDQLWDLV\HDUVROGDQG
NJ/LOODLV\HDUVROGDQGNJDQG6]|V]NHLVD\HDUROGPDUHZLWKNJ7KH
VWDEOHRIWKHDOSDFDVLVDQPVWUDZEHGGHGZRRGHQKRXVHZLWKGLUHFWFRQQHFWLRQWRWKHRSHQ
\DUG7KH\DUGLVDSSUR[PFRYHUHGE\QDWXUDOSDVWXUHDQGWUHHVZLWKDVPDOOODNHLQ
WKHPLGGOH7KHERWDQLFDOFRPSRVLWLRQRIWKH\DUGLVWKHIROORZLQJ/RWXVWHQXLVGRPLQDQW
6WHQDFKWLVDQQXD5XPH[DFHWRVHOOD$FKLOOHDGLVWDQV7ULIROLXPSUDWHQVH3DSDYHU
UKRHDV3ODQWDJRODQFHRODWD&DO\VWHJLDVHSLXPDQG8UWLFDGLRLFD7KHGRPLQDQWJUDVVVSHFLHV
LV &\QRGRQ GDFW\ORQ EXW /ROLXP SHUHQQH $UUKHQDWKHUXP HODWLXV %URPXV LQHUPLV 3KOHXP
SUDWHQVHDQG3KUDJPLWHVDXVWUDOLVFDQDOVREHIRXQGLQKLJKSHUFHQWDJHV7KHQXWULHQWFRQWHQW
RIWKHKHUEDFHRXVSODQWVLQWKH\DUGFKDQJHGGXULQJWKHYHJHWDWLRQSHULRGDVVKRZQLQ7DEOH
,Q DGGLWLRQ WKHUH ZHUH WZR SODQWV RI 2OHD HXURSHD DQG VHYHUDO SODQWV RI 7LOLD FRUGDWD DQG
&\QRVEDWLSVHXGRIUXFWXVLQWKH\DUG$OSDFDVUHDGLO\FRQVXPHGWKHOHDYHVRIWKHVHDUERUHDO
SODQWVWRVXSSOHPHQWWKHLUGDLO\IRGGHU
4VSGIHYVISJXLIXVMEP
3RUWLRQVRIWKHGLIIHUHQWIHHGVWXIIVVLPLODUNLQGRIIHHGVNJIURPDOODWWKHVDPHWLPHZHUH
ODLGDWWKHHQWUDQFHRIWKH\DUGQH[WWRWKHJDWHZKHUHWKHDQLPDOVOHIWWKHLUVWDEOH)UHHGRPRI
FKRLFHIRUWKHDOSDFDVZDVHQVXUHGE\FUHDWLQJDPGLVWDQFHEHWZHHQWKHGLIIHUHQWSRUWLRQV
$FFRUGLQJWR$ORQVR'tD]WKHWRWDOGXUDWLRQRIWKHLQYHVWLJDWLRQZDVKRXUVSHUGD\
$VWKHOLWHUDWXUHVKRZVIHHGSUHIHUHQFHLQYHVWLJDWLRQVZHUHUHSHDWHGRQWKUHHGD\VIROORZLQJ
HDFKIHHGVWXII6FRWW7\SLFDODQGDYDLODEOHIHHGVLQWKHGLIIHUHQWVHDVRQVLQ+XQJDU\
ZHUHFKRVHQIRUWKLVWULDO)HHGSUHIHUHQFHWULDOVZHUHGRQHDFFRUGLQJWRWKHVHOHFWHGIHHGVWXIIV
OLVWHGLQ7DEOH'U\PDWWHUSURWHLQIDWEUHDQGDVKFRQWHQWRIWKHOLVWHGIRGGHUVKDYHEHHQ
GHQHG7KHDPRXQWRIWLPHWKHDOSDFDVVSHQWRQFRQVXPLQJWKHGLIIHUHQWIRGGHUVZDVH[DPLQHG
HDFKGD\RIWKHH[SHULPHQW)XUWKHUPRUHWKHQXPEHURIRFFDVLRQVRQZKLFKDQLPDOVIHGRQWKH
VLQJOHIRGGHUVZDVDOVRREVHUYHG7ZRREVHUYHUVZHUHUHVSRQVLEOHIRUUHFRUGLQJWKHGDWDGXULQJ
HDFKLQYHVWLJDWLRQGD\
8EFPI'LERKMRKSJXLIKVEWWJSVEKIMRKVIHMIRXWSJXLI]EVHHYVMRKXLIZIKIXEXMSRTIVMSH
(V]QEXXIVKOK
'VYHITVSXIMRKOKHV]QEXXIV
)XLIVI\XVEGXKOKHV]QEXXIV
'VYHIFVIKOKHV]QEXXIV
%WLKOKHV]QEXXIV
2MXVSKIRJVIII\XVEGXKOKHV]QEXXIV

&IKMRRMRKSJXLIZIKIXEXMSR
TIVMSH1E]
)RHSJXLIZIKIXEXMSR
TIVMSH7ITXIQFIV

8EFPI(MJJIVIRXJIIHWXYJJWYWIHJSVJIIHTVIJIVIRGIXVMEPW
7IEWSR
*IIHW
(EXI
;MRXIV
%PJEPJETIPPIXKVEWWLE]EPJEPJELE]GSVRWMPEKI
%TTPIGEVVSXGEFFEKIJSHHIVFIIX
;LIEXFEVPI]GSVRSEX
%PJEPJEKVEWWTIEWXIQPIXXYGI
&EVPI]WYRS[IVQIEP WS]FIERQIEPKVSYRHVETIFEVPI]
WYRS[IVTIPPIX
:IXGLERHSEXWYRS[IVGSVRWSVKLYQEPPSJXLIQEVITEVGLIH
'SYVKIXXIQIPSRQEVVS[WSVVIP
0IEJSJ6SFMRMETWIYHSEGEGME'IPXMWEYWXVEPMW8MPMEGSVHEXEERH
)PEIEKRYWGSQQYXEXI
4YQTOMRWYKEVFIIXFIIXVSSXTSXEXSEPPSJXLIQEVIGLMTTIH
'EPJRYXVMQIRXQMPOMRKRYXVMQIRXEOIGSVRWLIITRYXVMQIRX

7TVMRK
7YQQIV
%YXYQR

*IIHTVIJIVIRGIMRZIWXMKEXMSRW
8VMEPWMR[MRXIV
7KHDOIDOIDSHOOHWVHHPHGWREHPRVWDSSUHFLDWHGE\WKHWKUHHPDUHVDQGWKH\DWHDOORIWKLVLQ
DYHU\VKRUWWLPH7KHFRUQVLODJHZDVQRWHDWHQE\WKHDQLPDOVYHU\PXFK7KHPDUHVVPHOOHG
LWPDQ\WLPHVEXWRQO\WKHVWDOOLRQFRQVXPHGLW$OIDOIDKD\ZDVOLNHGE\WKHPDOHZKLOHWKH
PDUHVSUHIHUUHGWKHJUDVVKD\7KHWKUHHPDUHVGLGQRWVHHPWREHFKRRVH\UHJDUGLQJWKHDSSOH
DQGYHJHWDEOHV7KH\WRRNIURPDOORIWKHYHJHWDEOHVIURPWKHYHU\UVWGD\RIWKHWULDO:KLOH
WKHVWDOOLRQRQO\FRQVXPHGWKHIRGGHUEHHW7KHDQLPDOVGLGQRWHDWIRGGHUGXULQJWKHGD\V
RIWKHH[DPLQDWLRQZKHDWEDUOH\FRUQDQGRDW7KHGXUDWLRQRIFRQVXPSWLRQIURPGLIIHUHQW
IHHGVWXIIVLVVKRZQLQ)LJXUH
8VMEPWMRWTVMRK
)HHGSUHIHUHQFHUHVXOWVIURPVSULQJDUHSUHVHQWHGLQ)LJXUH$VWKHJXUHVKRZVWKHPDUHV
OLNHGWKHGULHGIRGGHUVPRUHWKDQWKHVWDOOLRQ7KHUHZHUHPDMRUGLIIHUHQFHVLQWKHFKRLFHRI
URXJKDJH/LOODFRQVXPHGDOIDOIDDQGSHDVWHPZLWKKLJKHUSURWHLQFRQWHQWPXFKPRUHWKDQ
WKHRWKHUVZKLOH-XDQLWDSUHIHUUHGWKHPRUHVXFFXOHQWIHHGVZLWKVPDOOHUSURWHLQFRQWHQWJUDVV
OHWWXFH0HDOVZHUHRQO\VPHOOHGE\WKHDQLPDOVEXWWKHDOSDFDVGLGQRWFRQVXPHWKHVHIRGGHUV
DWDOO
8VMEPWMRWYQQIV
)HHGSUHIHUHQFHUHVXOWVIURPVXPPHUDUHSUHVHQWHGLQ)LJXUH7KHDOSDFDVOLNHGWKHOHDI\
EUDQFKHVFXWRIIIURPWKHWUHHVYHU\PXFK2DWYHWFKFRUQVRUJKXPDQGVRUUHOZHUHQH[WLQ
WKHSUHIHUHQFHOLVW7KH\OLNHGVXQRZHUPL[HGSLFNOHVOHVVEHFDXVHRIWKHLUKDLU\VXUIDFHZKLOH
WKHFRXUJHWWHDQGSXPSNLQZDVQRWUHDOO\IDYRXUHGE\WKHDOSDFDVGXHWRWKHLUXQIDPLOLDUDYRXU

2DW
&RUQ
%DUOH\
:KHDW
)RGGHUEHHW
&DEEDJH
&DUURW
$SSOH
$OIDOIDKD\
$OIDOIDSHOOHW
*UDVVKD\
-RKQQ\
/LOOD
-XDQLWD
6]|V]NH
&RUQVLODJH
&RQVXPSWLRQPLQ

%DUOH\VXQIORZHU
SHOOHW
*URXQGUDSH
6R\EHDQPHDO
%DUOH\VXQIORZHU
/HWWXFH
3HDVWHP
*UDVV
-RKQQ\
/LOOD
-XDQLWD
6]|V]NH
$OIDOID
&RQVXPSWLRQPLQ
*MKYVI'SRWYQTXMSRXMQISJHMJJIVIRXJIIHWXYJJWMR[MRXIV
*MKYVI'SRWYQTXMSRXMQISJHMJJIVIRXJIIHWXYJJWMRWTVMRK
8VMEPWMREYXYQR
)HHGSUHIHUHQFHUHVXOWVIURPDXWXPQDUHSUHVHQWHGLQ)LJXUH$VWKHJXUHVKRZVDOSDFDVZHUH
QRWFXULRXVDERXWWKHUHDG\IRGGHUVFDOIPLONLQJVKHHSQXWULPHQWDQGWKHDNHFRUQ7KLVLV
DSRWHQWLDOO\LQWHUHVWLQJREVHUYDWLRQEHFDXVHWKHDOIDOIDSHOOHWZLWKDVLPLODUDSSHDUDQFHZDVD
PXFKSUHIHUUHGIRGGHULQZLQWHU,WZDVIRXQGWKDWDOSDFDVJUHDWO\OLNHGWKHURRWWXEHUFOHIRGGHUV


&RQVXPSWLRQPLQ

-RKQQ\
/LOOD
-XDQLWD
6]|V]NH

(ODHDJQXVF
7LOLDF
&HOWLVD
5RELQLDS
0DUURZ
0HORQ
6RUUHO
&RXUJHWW
6RUJKXP
&RUQ
6XQIORZHU
9HWFKDQGRDW
*MKYVI'SRWYQTXMSRXMQISJHMJJIVIRXJIIHWXYJJWMRWYQQIV

&RQVXPSWLRQPLQ

-RKQQ\
/LOOD
-XDQLWD
6]|V]NH

6KHHS
QXWULPHQW
)ODNHFRUQ
0LONLQJ
QXWULPHQW
&DOI
QXWULPHQW
3RWDWR
%HHWURRW
6XJDUEHHW
3XPSNLQ
*MKYVI'SRWYQTXMSRXMQISJHMJJIVIRXJIIHWXYJJWMREYXYQR
*IIHMRKTVSKVEQQI
)ROORZLQJWKHIHHGSUHIHUHQFHH[DPLQDWLRQZHGUHZXSWKHIHHGLQJSURSRVDOZLWKWKHSUHIHUUHG
IHHGVWXIIVIRUDYHUDJHZHLJKWRINJDOSDFDV,WZDVGRQHE\FRQVLGHULQJWKHIROORZLQJ
9DQ6DXQSURSRVHGWKHGDLO\QXWULHQWUHTXLUHPHQWVRIWKHIXOOJURZQDOSDFDZLWKD
ZHLJKWRINJGU\PDWWHUNJRIWKHERG\ZHLJKWSURWHLQJ
JNJRIGU\PDWWHUDQGEUH

7KHUHLVQRSDVWXUHLQZLQWHUWLPHWKHUHIRUHKD\DQGVXFFXOHQWIRGGHUVURRWWXEHUFOHVIUXLWV

FRXOGEHJLYHQLQWKLVVHDVRQ
'U\PDWWHUFRQWHQWRIWKHSDVWXUHJUDVVLVORZLQVSULQJ,WLVQHFHVVDU\WRVXSSOHPHQWZLWK
KD\DWWKLVWLPH
%HFDXVHRIWKHGURXJKWDQGWKHDJHLQJRIWKHSDVWXUHJUDVVVXSSOHPHQWDWLRQZLWKDOIDOIDKD\
OHDI\EUDQFKHVSURWHLQVRXUFHDQGVXFFXOHQWIRGGHUVLVSURSRVHGDWWKHHQGRIVXPPHU
,WLVUHFRPPHQGHGWRIHHGIUXLWVDQGURRWWXEHUFOHVFDUURWEHHWURRWWRHQVXUHJRRGYLWDPLQ
OHYHOVLQWKHDQLPDOVLQDXWXPQ
7KH EDVLF IRGGHU KDV WR EH DYDLODEOH WKH ZKROH \HDU URXQG DW D IDYRXUDEOH SULFH DQG LQ
ODUJH YROXPHV7R SURYLGH HQRXJK JUHHQ IRUDJH JUD]LQJ RU FXOWLYDWHG JUHHQ SODQWV DUH
UHFRPPHQGHGZKLFKFDQEHREWDLQHGLQODUJHTXDQWLWLHVVRUJKXPRDWDQGYHWFKFRUQPL[HG
SLFNOHV:KHQWKHUHLVQRJUHHQIRUDJHLWLVUHFRPPHQGHGWRIHHGWKHDQLPDOVZLWKJUDVV
DQGDOIDOIDKD\DSSOHFDUURWSRWDWREHHWURRWFDEEDJH
,WLVVWURQJO\UHFRPPHQGHGWRFRQVLGHUWKHFKHPLFDOFRPSRVLWLRQRIWKHSUHIHUUHGIRGGHUV
,WLVQHFHVVDU\WRSURYLGHIUHVKFOHDUGULQNLQJZDWHUVXSSO\DWDVXLWDEOHWHPSHUDWXUHDOO\HDU
URXQG
7KHDOSDFDIHHGLQJSURJUDPPHVZKLFKFDQEHDSSOLHGDWDUHDVRQDEOHFRVWLQ+XQJDU\LQZLQWHU
VXPPHUDQGLQWKHWUDQVLWLRQDOSHULRGVEHWZHHQWKHPDUHVXPPDULVHGLQWKHIROORZLQJWDEOHV
7DEOHV
8EFPI1MRMQYQJIIHRIIHWJSVEOKEPTEGEMR[MRXIV
+VEWWLE]
%PJEPJELE]
%TTPIGEVVSXGEFFEKIFIIXVSSX
4SXEXS
7YQ
5YERXMX]SJ
JIIHWXYJJ
OK
(V]QEXXIV
MRXEOI
OK
4VSXIMRMRXEOI
K
*MFVIMRXEOI
K

E

E8LMWUYERXMX]GSRXEMRWEPPSJXLIUYERXMXMIWSJXLIEZEMPEFPIJIIHWXYJJW
8EFPI1MRMQYQJIIHRIIHWJSVEOKEPTEGEMRWYQQIV
+VEWWKVIIRJSVEKI
+VEWWLE]
7YQ
5YERXMX]SJ
JIIHWXYJJ
OK
(V]QEXXIVMRXEOI
OK
4VSXIMRMRXEOI
K
*MFVIMRXEOI
K

*VSQ8EFPI
+VEWWKVIIRJSVEKIQM\XYVIWTVMRKZIXGLERHSEXKVEWWERHTYPWIWEYXYQRZIXGLERH[LIEXIXG
ERHWSVKLYQLMKLUYERXMX]MREWLSVXXMQITEPEXEFPILMKLRYXVMIRXWGSRXIRX

8EFPI1MRMQYQJIIHRIIHWJSVEOKEPTEGEMRXLIXVERWMXMSREPTIVMSHW[IIOW
*IIHWXYJJ
OK
;MRXIV
8VERWMXMSRTIVMSHW
7YQQIV
;IIO ;IIO ;IIO ;IIO ;IIO ;IIO

+VEWWLE]
%PJEPJELE]
*VYMXW
4SXEXS
+VEWWKVIIRJSVEKI

E
E4IVGIRXEKISJXLIHEMP]HV]QEXXIVMRXEOI
'SRGPYWMSRW
%DVHGRQWKHUHVXOWVLWLVREYLRXVWKDWWKHWXEHUFOHVIUXLWVDQGYHJHWDEOHVFDQEHJLYHQWRWKH
DOSDFDVDWDQ\WLPHEHFDXVHWKHDQLPDOVFDQXWLOLVHWKHLUYLWDPLQDQGFDUERK\GUDWHFRQWHQWYHU\
ZHOO,WLVQHFHVVDU\WRSD\DWWHQWLRQWRWKHORZGU\PDWWHUDQGEUHFRQWHQWRIWKHVHNLQGVRI
IRGGHUVZKHQFRQVXPHG,WLVDGYLVHGWRIHHGWKHVHIRGGHUVWRJHWKHUZLWKIRGGHUZLWKDKLJKGU\
PDWWHUDQGEUHFRQWHQWKD\VFKRSSHGGU\FRUQVWDONHWFRQO\
,WZDVREVHUYHGWKDWWKHDOSDFDVSUHIHUUHGWKHGLIIHUHQWKD\VDQGWKHDOIDOIDSHOOHWEXWWKHSHOOHW
LVDYHU\H[SHQVLYHIRGGHU7KHUHIRUHWKHJUDVVRUDOIDOIDKD\VKRXOGEHWKHEDVLFIRGGHUEHFDXVH
WKHVHFDQSURYLGHWKHDQLPDOVZLWKWKHULJKWDPRXQWRIGU\PDWWHUEUHFRQWHQWDQGFUXGHSURWHLQ
7KHVXFFXOHQWIRGGHUVDQGWKHIUHVKJUHHQOHDI\EUDQFKHVFDQEHDJRRGVXSSOHPHQWWRWKHEDVLF
IRGGHUPDLQO\LQWKHSHULRGZKHQWKHTXDOLW\RISDVWXUHLVYHU\ORZ7KLVLVYHU\LPSRUWDQW
EHFDXVHWKHPDUHVDUHSUHJQDQWRUDOUHDG\LQWKHODFWDWLRQSHULRGDWWKDWPRPHQW7KLVIRUDJH
SURSRVDOLVFDOFXODWHGIRUDGXOWXQSURGXFWLYHDOSDFDV7KHUHIRUHLQDGGLWLRQWRWKHEDVLFIRGGHU
DQLQFUHDVHGDPRXQWRIIRGGHULVQHHGHGIRUSURGXFWLYHDQLPDOVHJJURZLQJIRDOVPDUHVLQWKH
ODVWWKLUGRIWKHSUHJQDQF\ODFWDWLQJDQLPDOV9DQ6DXQ
6IJIVIRGIW
$ORQVR'tD]0$-)-7RUUHV$FRVWD&$6DQGRYDO&DVWURD++RVWH$-$JXLODU&DEDOOHURDQG&0&DSHWLOOR
/HDO,VJRDWVSUHIHUHQFHRIIRUDJHWUHHVDIIHFWHGE\WKHLUWDQQLQRUEUHFRQWHQWZKHQRIIHUHGLQFDIHWHULD
H[SHULPHQWV"$QLPDO)HHG6FLHQFHDQG7HFKQRORJ\
6FRWW %& 'LHWDU\ KDELWV DQG VRFLDO LQWHUDFWLRQV DIIHFW FKRLFH RI IHHGLQJ ORFDWLRQ E\ VKHHS 'HSDUWPHQW RI
5DQJHODQG5HVRXUFHV$SSOLHG$QLPDO%HKDYLRXU6FLHQFH
9DQ 6DXQ 5- 1XWULHQW UHTXLUHPHQWV RI 6RXWK $PHULFDQ FDPHOLGV $ IDFWRULDO DSSURDFK 6PDOO 5XPLQDQW
5HVHDUFK

1EREKIQIRX
1EREKIQIRX
%GVSWWFSVHIV[SSPTVSNIGXWYTTSVXWXLIGSRWIVZEXMSR
SJXLI%PTMRIW7XIMRWGLEJ
&0HQGHO$)HOGPDQQDQG1.HWWHUOH
%DYDULDQ 6WDWH 5HVHDUFK &HQWHU IRU $JULFXOWXUH ,QVWLWXWH RI $QLPDO %UHHGLQJ 3URI
'UUZlFKWHU3ODW]3RLQJ*UXE*HUPDQ\
6RFLHW\ IRU WKH &RQVHUYDWLRQ RI ROG DQ (QGDQJHUHG /LYHVWRFN %UHHGV LQ *HUPDQ\ *(+
3RVWER[:LW]HQKDXVHQ*HUPDQ\IHOGPDQQ#JHKGH
$UN)DUP.HWWHUOH%RVVOHU6WU=HOOX$*HUPDQ\
%FWXVEGX
7KH$OSLQHV6WHLQVFKDILVDQROGDQGWUDGLWLRQDOVKHHSEUHHGWKDWKDVOLYHGLQWKH$OSVIRUVHYHUDO
KXQGUHG\HDUV,QRQO\DIHZVPDOORFNVRIWKLVEUHHGFRXOGEHLGHQWLHGLQVSHFLDODOSLQH
UHJLRQVLQ*HUPDQ\$EUHHGLQJSURJUDPPHZDVHVWDEOLVKHGE\VRPHLQWHUHVWHGEUHHGHUVDQGWKH
RIFLDOEUHHGLQJRUJDQLVDWLRQV7RPDLQWDLQUDUHEUHHGVIRUWKHIXWXUHLWLVQHFHVVDU\WRGHYHORS
VSHFLDOSURJUDPPHVIRUWKHLUXVHDQGPDUNHWLQJ,QWKHEUHHGHUVLQ*HUPDQ\DQG$XVWULD
FUHDWHGDSURJUDPPHWRPDUNHWKLJKTXDOLW\SURGXFWVPDGHIURPWKHZRRORIWKLVVKHHSEUHHG
7KHSURMHFWKDVEHHQUXQQLQJYHU\VXFFHVVIXOO\DQGVLQFHLWVLQFHSWLRQWKHSRSXODWLRQRIWKH
$OSLQH6WHLQVFKDIVKHHSKDVEHHQLQFUHDVLQJDQQXDOO\
.H\ZRUGVFRQVHUYDWLRQVKHHSWUDGLWLRQDOEUHHGV
'YVVIRXWMXYEXMSR
7KH$OSLQHV6WHLQVFKDILVDGLUHFWGHVFHQGDQWRIWKHVRFDOOHG7RUIVFKDIDQGWKXVLWEHORQJVWR
RQHRIWKHRULJLQDOEUHHGVRIWKH(XURSHDQ$OSV,QDERXWDQLPDOVH[LVWHG0DVRQ
,QVRPHUHJLRQVWKH$OSLQHV6WHLQVFKDIZDVWKHPRVWSRSXODUEUHHG$QLPDOVFRXOGEH
IRXQGLQWKHDUHDRI%DYDULDLQWKHUHJLRQRI%HUFKWHVJDGHQ7UDXQVWHLQDQG5RVHQKHLP.DVSDU
,Q$XVWULDWKLVEUHHGZDVNHSWPDLQO\LQWKHDUHDRI6DO]EXUJDQG7LURO)KUHU
([DFWO\\HDUVODWHULQWKHSRSXODWLRQKDGIDOOHQWRDPHDJUHDQLPDOV0DVRQ
,QVRPHLQWHUHVWHGEUHHGHUVIURP*HUPDQ\DQG$XVWULDVWDUWHGWRFROOHFWWKHODVW
LQGLYLGXDOVRIWKHEUHHGLQWKH%HUFKWHVJDUGHQDUHD0HQGHODQG%XUNO:LWKWKHKHOSRI
WKH6KHHSEUHHGHUV$VVRFLDWLRQVLQ%DYDULDDQG7\URODQHZZRUNJURXSZDVHVWDEOLVKHGIRUWKH
FRQVHUYDWLRQRIWKLVVSHFLFEUHHG%HWZHHQDQGWKHSRSXODWLRQLQFUHDVHGIURP
EUHHGLQJDQLPDOVXSWRDQLPDOV)HOGPDQQHWDO,QWKHVWXG\RQJHQHWLFGLVWDQFHV
RIDOSLQHVKHHSEUHHGVRIWKHHDVWHUQDOSVLWZDVFOHDUWKDWWKH$OSLQHV6WHLQVFKDILVJHQHWLFDOO\
VHSDUDWHGIURPWKHRWKHUW\SHVRI6WHLQVFKDIOLNH0RQWDIRQHU.UDLQHUDQG7\URO6WHLQVFKDI
%DXPXQJDQG6|ONQHU
8LISVKERMWEXMSRWMR+IVQER]ERH%YWXVME
,QWKHDUHDRILQVLWXFRQVHUYDWLRQRIUDUHEUHHGVLWLVPDLQO\QRQJRYHUQPHQWDORUJDQLVDWLRQV
1*2VWKDWDUHDFWLYH,Q*HUPDQ\DQG$XVWULDWKHVH1*2VKDYHEHHQDURXQGIRUQHDUO\
\HDUV7KHPDLQREMHFWLYHLQWKHZRUNZLWKWKHUDUHEUHHGVLVWRFRRUGLQDWHWKHEUHHGHUVDQGWR
LQIRUPWKHSXEOLFDERXWWKHORVVRIJHQHWLFGLYHUVLW\LQPRGHUQDJULFXOWXUDOV\VWHPV
:LWKRXWQDQFLDOVXSSRUWIURPWKHVWDWHIRUWKHEUHHGHUVRIROGDQGWUDGLWLRQDOOLYHVWRFNEUHHGV
PRUHEUHHGVZLOOGLVDSSHDULQWKHQH[WIHZ\HDUV7KH)$2PDLQWDLQVLWVSRVLWLRQWKDWQHDUO\
HYHU\WZRZHHNVRQHRIWKHEUHHGVZKLFKDUHUHJLVWHUHGWRGD\ZLOOEHORVW7KHUHLVQR

1EREKIQIRX
GRXEWDPRQJVWOLYHVWRFNNHHSHUVDQGUHVHDUFKHUVWKDWIRUWKHIXWXUHDGDSWDWLRQDGLYHUVHJHQH
SRRORIDJULFXOWXUDOOLYHVWRFNZLOOEHWKHPDLQIRXQGDWLRQRIVXVWDLQDELOLW\DQGWKHJKWDJDLQVW
KXQJHUZRUOGZLGH
,Q*HUPDQ\WKH6RFLHW\IRUWKH&RQVHUYDWLRQRI2OGDQG(QGDQJHUHG/LYHVWRFN%UHHGV*(+
ZDV IRXQGHG LQ E\ D VPDOO JURXS RI SHRSOH ZKR UHFRJQLVHG WKDW VRPH EUHHGV KDG
GLVDSSHDUHGIURPDQLPDOIDLUVIURPEUHHGFRPSHWLWLRQVDQGIDUPHUVVWDEOHV$ORWRIZRUN
ZDVGRQHWRVWRSWKHH[WLQFWLRQRIEUHHGV6LQFHWKHH[LVWHQFHRIWKH*(+QRWDVLQJOHEUHHG
KDVYDQLVKHG7KHVRFDOOHG5HG/LVWRIHQGDQJHUHG/LYHVWRFN%UHHGVLQ*HUPDQ\FRQVLVWRI
DERXWEUHHGVIURPVSHFLHV:LWKWKHKHOSRIWKLVOLVWLWLVSRVVLEOHWRIROORZWKHWUHQG
DQGVLWXDWLRQRIHDFKHQGDQJHUHGEUHHGDQGWRVWDUWXVHIXODFWLYLWLHVWRPDLQWDLQWKHSRSXODWLRQ
7RGD\WKH*(+KDVPRUHWKDQPHPEHUV6LQFHDQ(QGDQJHUHG/LYHVWRFN%UHHGRI
WKH<HDUKDVEHHQDZDUGHGDQQXDOO\,QWKH$OSLQHV6WHLQVFKDIZDVJLYHQWKHWLWOHEHLQJ
RQHRIWKHPRVWHQGDQJHUHGEUHHGVLQ*HUPDQ\,QWKH0HLQHU:LGGHU5DEELWZDVWKH
IRFXVRIWKHDFWLYLWLHV
7KHVLWXDWLRQLQ$XVWULDLVTXLWHVLPLODUWR*HUPDQ\7KH$UFKH$XVWULD6RFLHW\KDVH[LVWHGVLQFH
DQGZRUNVPDLQO\ZLWKWKHEUHHGHUVWRLQVWDOOIXUWKHURFNVRIWKHUDUHEUHHGVIRULQVLWX
FRQVHUYDWLRQ7KHUHLVDFORVHFROODERUDWLRQZLWKEUHHGLQJRUJDQLVDWLRQVDQGUHVHDUFKLQVWLWXWHV
7KH$UFKH$XVWULDDOVRQDPHGWKH$OSLQHV6WHLQVFKDI%UHHGRIWKH<HDU$UFKH$XVWULD

&VIIHHIWGVMTXMSRSJ%PTMRIW7XIMRWGLEJ
&VIIHMRKLMWXSV]
/LNH DOO RWKHU 6WHLQVFKDI EUHHGV WKH$OSLQHV 6WHLQVFKDI FDQ EH WUDFHG EDFN WR =DXSHO DQG
1HROLWKLF7RUI,QIRUPHUWLPHVWKHEUHHGZDVZLGHVSUHDGLQWKH$OSLQHUHJLRQ+RZHYHUVLQFH
LWKDVWRDODUJHSDUWEHHQUHSODFHGE\RWKHUEUHHGVDQGLVH[WUHPHO\HQGDQJHUHGWRGD\
(IWGVMTXMSRSJXLIFVIIH
7KH$OSLQHV6WHLQVFKDILVDVPDOOWRPHGLXPVL]HGQHO\ERQHGPRXQWDLQEUHHG7KHERG\LV
EURDGDQGFRPSDFW$QLPDOVKDYHDQREOHKHDGZLWKVWUDLJKWSUROHDQGDVOLJKWO\URPDQQRVH
7KHHDUVDUHORSDQGEHQWVOLJKWO\IRUZDUG%RWKVH[HVDUHJHQHUDOO\KRUQHG7KHUDPVXVXDOO\
KDYHVSLUDOO\FXUYHGKRUQVWKHHZHVVRPHWLPHVVPDOODQGVOLJKWO\FXUYHGKRUQV)LJXUH7KH
OHJVDUHWKLQEXWVWURQJZLWKKDUGKRRYHV7KHLUORQJZRROOHQWDLOVUHDFKGRZQDVIDUDVWKHDQNOH
MRLQWDQGWKHHQGVDUHRIWHQEHQW7KHIDFHVWRPDFKDQGIHHWDUHXVXDOO\ZRROIUHH7KHIRUHKHDG
LVFRYHUHGZLWKVKRUWZRRO$OOFRORXUVDQGPDUNLQJVRFFXULQWKHURXJKPL[HGZRRO)LJXUH
7KH\PDWXUHHDUO\DQGDUH\HDUURXQGEUHHGHUV0DVRQGHVFULEHVWKHEUHHGDVEHLQJYHU\
IHUWLOHZLWKDURXQGRIELUWKVLQYROYLQJWZLQV
7TIGMEPTIVJSVQERGIW
7KLVEUHHGLVUREXVWORQJOLYLQJDQGIUXJDODQGVWLOODEOHWRWKULYHXQGHUH[WUHPHOLYLQJFRQGLWLRQV
7DEOH,WKDVDGDSWHGWRPDUJLQDOVLWHVDQGKLJKSUHFLSLWDWLRQKDVJRRGPDWHUQDOLQVWLQFWVDQG
DUHGXFHGVXVFHSWLELOLW\WRGLVHDVHVIRRWURW7KHTXDOLW\RIWKHPHDWLVJRRG

1EREKIQIRX
*MKYVI%VEQSJXLIFVIIH%PTMRIW7XIMRWGLEJ4LSXS*IPHQERR+),
*MKYVI%KVSYTSJQSXLIVW[MXLXLIMV%PTMRIW7XIMRWGLEJPEQFWMRHMJJIVIRXGSPSYVW4LSXS1MPIVWOM+),
8EFPI4IVJSVQERGISJ%PTMRIW7XIMRWGLEJ*IPHQERRIXEP
6EQW
]IEVSPHVEQW
)[IW
]IEVSPHI[IW
&SH][IMKLX
OK
*PIIGI[IMKLX
OK

0EQFMRKTIVGIRXEKI ;MXLIVWLIMKLX

GQ


1EREKIQIRX
4STYPEXMSRWMÎ
,Q*HUPDQ\HZHVDQGUDPVDUHUHJLVWHUHGLQWKHKHUGERRN,Q$XVWULDHZHVDQG
UDPVDUHUHJLVWHUHGLQWKHSURJUDPPHRIWKH$XVWULDQ$VVRFLDWLRQIRU5DUH(QGDQJHUHG%UHHGV
g1*(1(
%UHHGLQJIRFXVLVSXWRQWKHEUHHGVJHQHWLFFRQVHUYDWLRQ
'LEVEGXIVMWXMGW
%HVLGHV PHDW DQG ZRRO SURGXFWLRQ WKH EUHHG LV PDLQO\ XVHG IRU ODQGVFDSH PDQDJHPHQW
HVSHFLDOO\PDUJLQDOVLWHV,Q%DYDULDDSURJUDPPHKDVEHHQVHWXSWRIRFXVRQWKHDGDSWDWLRQRI
WKH$OSLQHV6WHLQVFKDIWRWKHKDUVKFRQGLWLRQVLQWKHKLJKPRXQWDLQV)RUWKLVSXUSRVHDJURXS
RIVKHHSKDVEHHQSXWRXWWRDOSLQHSDVWXUHDQGGLIIHUHQWUHVHDUFKLVEHLQJFRQGXFWHGWRDFTXLUH
PRUHGHWDLOVDERXWWKHKHDOWKDQGUHVLVWDQFHRIWKLVEUHHG
6SHFLDOFKDUDFWHULVWLFVRIWKH$OSLQHV6WHLQVFKDIDUH
DGDSWDELOLW\WRWKHKDUVKPRXQWDLQSDVWXUHVDWKHLJKWVZKLFKDUHLQDFFHVVLEOHWRFDWWOH
YHU\IHUWLOHZLWKDELOLW\WREUHHGRXWRIVHDVRQ
H[FHOOHQWSRWHQWLDOIRUPLONSURGXFWLRQDQGGHGLFDWHGPRWKHUVDVZHOODVORQJHYLW\
KDUG\UXJJHGUHVLVWDQWDQGHDVLO\VDWLVHG
H[FHSWLRQDOO\WDPH
PXOWLIXQFWLRQDOXVDELOLW\FRORXUHGGXDOFRDWHGHHFH

6IPEXIHFVIIHW
7KH$OSLQHV6WHLQVFKDILVUHODWHGWRRWKHUEUHHGVLQWKHDOSVOLNH.UDLQHU6WHLQVFKDILQ*HUPDQ\
DQG$XVWULD%RYVFD2YFDLQ6ORYHQLD3OH]]DQDLQ,WDO\DQG0RQWDIRQHUDQG7\URO6WHLQVFKDI
LQ$XVWULD
+SZIVRQIRXWYTTSVXJSV%PTMRIW7XIMRWGLEJ
7KHDLPRIJRYHUQPHQWVXSSRUWIRUUDUHEUHHGVLVWRHVWDEOLVKDEUHHGLQJSURJUDPPHZKLFKKHOSV
WRLQFUHDVHWKHQXPEHURIDQLPDOVWRSUHYHQWLQEUHHGLQJDQGWRJLYHWKHEUHHGHUVHFRQRPLF
VXSSRUW
7KHVXSSRUWRIUDUHEUHHGVLVQRWRQO\JLYHQRQDQDWLRQDOOHYHOEXWDOVRRQD(XURSHDQOHYHO
7KH(XURSHDQ8QLRQVXSSRUWVDQLPDOJHQHWLFUHVRXUFHVEDVHGRQ(&UHJXODWLRQIRUWKH
SURWHFWLRQRIUXUDOGHYHORSPHQW8QGHUWKLVUHJXODWLRQ(8FRXQWULHVVXSSRUWUDUHEUHHGVLQWKH
IUDPHZRUNRIWKHLUSODQVIRUWKHGHYHORSPHQWRIUXUDODUHDV
,Q*HUPDQ\IXQGVIRUWUDGLWLRQDOEUHHGVDUHSURYLGHGE\WKHPLQLVWULHVIRUDJULFXOWXUHRIWKH
IHGHUDOVWDWHV)RUEUHHGHUVRIWKH$OSLQHV6WHLQVFKDIIXQGVDUHJLYHQRQO\LQ%DYDULDWKHVWDWH
RIWKHRULJLQRIWKHEUHHG7KLVDOORFDWLRQLVEDVHGRQWKHGLUHFWLYHRIWKH%DYDULDQ0LQLVWU\
$OO0%O 1U IRU DQLPDO JHQHWLF UHVRXUFHV 7KH EUHHGHU FDQ JHW IRU HDFK
UHJLVWHUHGDQLPDOZLWKDPLQLPXPSHUIDUPDQGDPD[LPXPSHUIDUP)LYH
\HDUVRIFRQWULEXWLRQWRWKHSURJUDPPHLVUHTXLUHG
,Q$XVWULDWKH$VVRFLDWLRQIRU5DUH(QGDQJHUHG%UHHGVg1*(1(FDOFXODWHVWKHVXSSRUWIRU
UDUHEUHHGV7KHVXSSRUWLVFRQDQFHGE\WKH(XURSHDQ8QLRQDQGLVSDUWRIWKHGHYHORSPHQW
RI UXUDO DUHDV 7KHUH LV WKH SRVVLELOLW\ WR VXSSRUW DOO IDUPHUV ZKR WDNH SDUW LQ WKH$XVWULDQ

1EREKIQIRX
SURJUDPPHIRUHQYLURQPHQWDOO\IULHQGO\DJULFXOWXUHDQGZKRNHHSOLVWHGHQGDQJHUHGEUHHGV
7KHVHVXEVLGLHVGRQRWLQFUHDVHSURGXFWLRQEXWWKH\UHSUHVHQWDSSURYDOIRUWKHGLIFXOWEUHHGLQJ
ZRUN$WWKHPRPHQWWKHUHDUHEDVLFVXEVLGLHVDQGVXSSOHPHQWVIRUKLJKO\HQGDQJHUHGEUHHGV
ZKLFKDUHLQFOXGHGLQWKH237,0$7(SURJUDPPH)RUWKH$OSLQHV6WHLQVFKDIIRUHZHV
DQGIRUUDPVDUHJLYHQSHU\HDUWREUHHGHUVZKRUHJLVWHUWKHLUVKHHSLQWKHg1(*(1
EUHHGLQJSURJUDPPH
8LI%PTMRIW7XIMRWGLEJ[SSPTVSNIGX
;SSPEWERMGLITVSHYGX
7KHORQJWHUPVHFXULW\RIRFNVGHSHQGVRQWKHHFRQRPLFYDOXHRIDEUHHG$FRPELQDWLRQRI
JRYHUQPHQWDOVXSSRUWIRUEUHHGLQJDQLPDOVDQGIRUHQYLURQPHQWDOVHUYLFHVKHOSVWRPDLQWDLQ
UDUHEUHHGVLQDJULFXOWXUH,QDGGLWLRQWRWKLVWKHIDUPHUVWKHPVHOYHVKDYHWRWKLQNDERXWQLFKH
SURGXFWLRQZLWKWKHDQLPDOVDQGWKHLUSURGXFWV7KLVPHDQVWKDWTXDOLW\SURGXFWVKDYHWREH
SURGXFHGWRSODFHWKHPRQWKHPDUNHWLQWKHKLJKHUSULFHVHJPHQWV,WLVQRWRQO\WKH\LHOGRI
PHDWRUWKH\LHOGRIZRROWKDWJHQHUDWHVSURWIRUWKHEUHHGHUV3URGXFWVZLWKDVSHFLDOTXDOLW\
RIWHQIHWFKEHWWHUSULFHV
7KHZRRORIWKH$OSLQHV6WHLQVFKDILVDSURGXFWWKDWLVVSHFLFWRWKLVEUHHGDQGWKHUHIRUHFDQ
EHXVHGWRGHYHORSDVSHFLDOW\SHRIPDUNHWLQJ)RU\HDUVWKHSULFHIRUWKHZRRORIODQGUDFHV
OLNH$OSLQHV6WHLQVFKDIKDVEHHQYHU\ORZRQWKHPDUNHWQRWPRUHWKDQNJ7KHFRVWRI
VKHDULQJRQHVKHHSLVDURXQG7KLVPHDQVWKDWWKHEUHHGHUKDVWRSD\PXFKPRUHIRUWKH
VKHDULQJWKDQKHJHWVIRUWKHZRRO7KHDLPRIWKHZRROSURMHFWLVWRJLYHWKHEUHHGHUVD[HG
SULFHRINJIRUZRRORIKLJKTXDOLW\
5YEPMX]SJXLI[SSP
7KHEHDXWLIXODQGXQLTXHZRRORIWKH6WHLQVFKDILVDGLVWLQJXLVKLQJIHDWXUHRIWKLVDQFLHQWDQG
UDUHEUHHG,WKDVDGXDOFRDWHGHHFHZLWKSLWK\ORQJFRDUVHKDLUQHZDY\DQGVKRUWERWWRP
KDLUDQGHYHU\ZRROFRORXUIURPZKLWHEODFNWKURXJKWREURZQVDQGEULQGOHGFDQEHIRXQG
(ZHVSURGXFHDERXWWRNJDQGUDPVNJ)HOGPDQQHWDO
8LI[SSPTVSNIGX
7KHEUHHGHUVWKHPVHOYHVZDQWHGWREHDFWLYH,QWKH*HUPDQDQG$XVWULDQEUHHGHUVMRLQHG
IRUFHVDQGRUJDQLVHGDZRUNJURXSWRPDNHKLJKTXDOLW\SURGXFWVRXWRIWKHZRRO$VDUHVXOWRI
WKHVWLOOVPDOOZHLJKWRIZRROEHLQJFROOHFWHGE\WKHEUHHGHUVWKHELJHQWHUSULVHVLQYROYHGLQ
SURFHVVHVOLNHZDVKLQJRUFRPELQJWKHZRROUHIXVHGWRDFFHSWWKHVPDOODPRXQWRIZRRO
7KHUVWDWWHPSWVLQWRVHOOWKHSURGXFWVGLUHFWO\WRVPDOOUHJLRQDOPDUNHWVRUVPDOOPDUNHWV
RQWKHIDUPVRIWKHEUHHGHUVZHUHVXFFHVVIXO7KHSUHVHQWDWLRQRIGLIIHUHQWSURGXFWVOLNHVRFNV
VZHDWHUVDQGNQLWWLQJZRROZRQRYHUDORWRIFXVWRPHUV$VDUHVXOWRIWKLVH[SHULHQFHDWWKHLU
DQQXDOPHHWLQJWKHEUHHGHUVGLVFXVVHGWKHQH[WVWHSDQGWKHFRPPHUFLDOLVDWLRQRIWKHSURGXFWV
EHJDQ
'SPPIGXMRKXLI[SSP
0RUHDQGPRUHEUHHGHUVZHUHFRQYLQFHGDQGVWDUWHGWRFROOHFWZRROIURPWKHLUVKHHS$WWKH
DQQXDOPHHWLQJLQ0D\HDFK\HDUZRROLVJDWKHUHGDQGVRUWHG$VDFRQVHTXHQFHQHDUO\WZR
WRQQHVRIZRROIURPWKH$OSLQHV6WHLQVFKDIKDYHEHHQFROOHFWHGVLQFHLWVEHJLQQLQJLQ

1EREKIQIRX
)URPWRWKHQXPEHURIEUHHGHUVLQFUHDVHGIURPWR7KHDPRXQWRIZRROFROOHFWHG
DOVRJUHZIURPNJLQWKH\HDUWRNJLQ)LJXUH$OWRJHWKHUDERXWWRQQHV
RIZRRORIWKH$OSLQHV6WHLQVFKDIZDVDYDLODEOHIRUWKHPDQXIDFWXUHRISURGXFWVZLWKKLJKTXDOLW\
FKDUDFWHULVWLFV7KHFRRSHUDWLRQRIWKHEUHHGHUVWKHUHIRUHDIIHFWVWKHULVHLQZRROSURGXFWLRQ
%UHHGHUVUHFHLYHDZRROYRXFKHURIIRUHDFKNLORJUDPRISUHSDUHGZRRO7KHDLPLVWR
UDLVHWKHSULFHVIXUWKHULQRUGHUWRPDNHLWPRUHSURWDEOHIRUWKHEUHHGHUV7KHZRROTXDOLW\
EHFRPHVDYHU\LPSRUWDQWEUHHGLQJDVSHFWHVSHFLDOO\WKHQDWXUDOFRORXULQJ,QDGGLWLRQWRWKLV
OHQJWKDQGGHQVLW\VWDELOLW\UHQHPHQWDQGFULPSVRIWKHZRRODUHLQFOXGHGLQWKHEUHHGLQJDLPV
7KHHFRQRPLFYDOXHRIWKHZRROSURWHFWVWKHFRQWLQXLW\RIWKHEUHHG&ROOHFWLQJUDZZRRODWWKH
DQQXDOPHHWLQJVPHDQVWKDWWUDQVSRUWFRVWVFDQEHNHSWYHU\ORZ)LJXUH9LDWKHZRROSURMHFW
WKHZRROLVZDVKHGDQGUHQHGFRPEHGVSXQNQLWWHGZRYHQVHZQHWFNJRIUDZZRRO
\LHOGVDSSUR[LPDWHO\NJRIZDVKHGSXUHZRRO'HSHQGLQJRQWKHZRROW\SHRI
WKHZHLJKWLVZRROJUHDVHDQGGLUW(56$
4VSGIWWMRKSJXLI[SSPEXVIKMSREPQERYJEGXSVMIW
2QH YHU\ LPSRUWDQW DLP RI WKH EUHHGHUV ZDV WR ZRUN WRJHWKHU ZLWK WUDGLWLRQDO DQG ORFDO
FUDIWVSHRSOHIRUWKLVSURMHFW7KLVSURFHVVLQJLVQRZFDUULHGRXWH[FOXVLYHO\LQ*HUPDQ\DQG
$XVWULDDQGRQO\DWVPDOOUPVRUPDQXIDFWXUHUV7UDQVSDUHQF\LQWKHSURGXFWLRQSURFHVVDQG
WKHIDFWWKDWWKHSURGXFWVDUHXQUHQHGLVRIJUHDWLPSRUWDQFHIRUWKHEUHHGHUV
)LQGLQJFRPSDQLHVWKDWDUHSUHSDUHGWRWDNHRQVPDOODPRXQWVRIZRRODQGDUHDEOHWRSURGXFH
KLJKTXDOLW\SURGXFWVLVQRWHDV\,QWKHWH[WLOHVHFWRUDVZHOODVLQWKHDJULFXOWXUDOVHFWRUDQG
RWKHUUHODWHGEUDQFKHVWKHUHKDVEHHQDVWURQJIRFXVRQVSHFLDOLVHGUPVSURGXFLQJWKHLUSURGXFWV
LQRWKHUFRXQWULHV
$ORWRIQHWZRUNLQJZDVUHTXLUHGWRQGVPDOOUHJLRQDOHQWHUSULVHVWKDWFRXOGZDVKDQGFOHDQWKH
ZRRO7KHQH[WVWHSZDVWRQGDIDFWRU\WKDWZRXOGSURGXFHWKHSURGXFWVZKLOHWKHQXPEHURI
VRFNVDQGVZHDWHUVZHUHVWLOOLQVPDOOQXPEHUV7ZRHQWHUSULVHVZHUHIRXQGLQ$XVWULDWRSURGXFH
WKHTXDOLW\WKHEUHHGHUVZHUHORRNLQJIRU
7KH$OSLQHV6WHLQVFKDIFXUUHQWSURGXFWLRQUDQJHLVPDGHXSRIFRPEHGZRRONQLWWLQJZRRO
ZRROOHQVRFNVJORYHVDQGPLWWHQVMXPSHUVVZHDWHUV)HOWSURGXFWVLQFOXGHEDJVIHOWLQVROHV
IHOWVOLSSHUVFXVKLRQVHWF$URXQGGLIIHUHQWSURGXFWVLQGLIIHUHQWFRORXUVDUHGHVLJQHG7KH
800
700
600
500
400
300
200
100
0
Breeders
Wool (kg)
2004
2005
2006
2007
2008
2009
*MKYVI)ZSPYXMSRSJFVIIHIVWERH[SSPOK JVSQXLIWXEVXSJXLITVSNIGXMRYTXSTIVWSREP

GSQQYRMGEXMSR

1EREKIQIRX
*MKYVI8LI[SSPLEWXSFIWSVXIHERHTYXMRXSFMKFEKWJSVXVERWTSVXEXMSR4LSXS/IXXIVPI+),
EUHHGHUVWKHPVHOYHVVHOOWKHQLVKHGSURGXFWVWRWKHLURZQFXVWRPHUV7KHUDQJHRIKLJKTXDOLW\
SURGXFWVLVLQFUHDVLQJDQQXDOO\ZLWKFRQVXPHUGHPDQGIRUFRQWHPSRUDU\ZRROFORWKLQJ
&UXFLDOIRUWKH$OSLQH6WHLQVFKDIEUHHGHUKRZHYHULVWKHUHJLRQDOSURGXFWLRQRIKLJKTXDOLW\
SURGXFWVZLWKRXWFKHDSPDVVSURGXFWLRQ7KHSURGXFWVIURPWKH$OSLQH6WHLQVFKDIUDQJHHQULFK
WKHSURGXFHUDQJHRIIDUPVKRSVPDUNHWVWDOOVDVZHOODVIDLUVDQGH[KLELWLRQVPDNLQJWKHVHOOLQJ
RIWKHVHSURGXFWVLQWHUHVWLQJIRUGHDOHUV)LJXUH)RUWXQDWHO\PRUHDQGPRUHFRQVXPHUVDUH
DZDUHRIKLJKTXDOLW\QDWXUDOSURGXFWVDQGDUHSUHSDUHGWRSD\WKHSULFH
*MKYVI7IPPMRKTVSHYGXWEXXLI-RXIVREXMSREP+VIIR;IIOMR&IVPMR4LSXS/IXXIVPI+),

1EREKIQIRX
8LI[SSPTVSNIGXLIPTWXSQEMRXEMRXLI%PTMRIW7XIMRWGLEJ
&RQYHUVHO\WKHSURGXFWVSURPRWHWKH$OSLQHV6WHLQVFKDI7KLVLVHVSHFLDOO\LPSRUWDQWDVRQO\
ZLWKLQFUHDVHGDZDUHQHVVSRSXODULW\DQGEHWWHUPDUNHWLQJRIWKHDQLPDOVDQGLWVSURGXFWVLV
LWSRVVLEOHWREULQJWKLVEUHHGEDFNIURPWKHEULQNRIH[WLQFWLRQDQGWKXVSUHVHUYHDQREMHFWRI
FXOWXUDOYDOXH
$YHU\DWWUDFWLYH,QWHUQHWSODWIRUPDWKWWSZZZDOSLQHVVWHLQVFKDIGHVKRZVWKHDFWLYLWLHVDQG
SURGXFWVRIWKH$OSLQHV6WHLQVFKDI7KHEUHHGHUVWRJHWKHUGHFLGHGWRFUHDWHDODEHOOHGSURGXFW
)LJXUH
*MKYVI0SKSSR[SSPTVSHYGXWJVSQXLI%PTMRIW7XIMRWGLEJ
'SRGPYWMSR
7KH$OSLQHV6WHLQVFKDILVRQHRIWKHPRVWHQGDQJHUHGVKHHSEUHHGVRI*HUPDQ\DQG$XVWULD
6LQFHYDULRXVDFWLYLWLHVKDYHEHHQLQLWLDWHGWRSUHVHUYHWKLVDOSLQHEUHHG,QVRPH
EUHHGHUVEHJDQWRFROOHFWWKHW\SLFDOZRRORIWKHEUHHGWRSURGXFHKLJKTXDOLW\SURGXFWVIURPWKH
ZRRODQGWRJXDUDQWHH[HGSULFHVIRUWKHEUHHGHUV7KH\VWDUWHGWRJRWRUHJLRQDOPDUNHWVDQG
VHOOWKHSURGXFWVDWJRRGSULFHV7KHDFWLYLWLHVZHUHFRQGXFWHGDURXQGWKHIROORZLQJREMHFWLYHV
EX\LQJRISUHVRUWHGZRRODWDIDLUSULFH
RUJDQLFSURFHVVLQJDQGSURGXFWLRQRIKLJKTXDOLW\ZRROSURGXFWV
UHJLRQDOSURGXFWLRQZKLFKVXSSRUWVORFDOWUDGH
SURFHVVLQJXQGHUVRFLDOO\DFFHSWDEOHZRUNLQJFRQGLWLRQV
VXSSRUWLQJDJULFXOWXUHDQGODQGVFDSHFRQVHUYDWLRQWKURXJKVKHHSKROGLQJV
SURPRWLRQRIDQROGDQGHQGDQJHUHGVKHHSEUHHG
FRQVHUYDWLRQRIJHQHWLFGLYHUVLW\DQGDQREMHFWRIFXOWXUDOYDOXH
6IJIVIRGIW
$5&+($XVWULD5RWH/LVWHGHUJHIlKUGHWHQ+DXVWLHUUDVVHQLQgVWHUUHLFK$YDLODEOHDWKWWSZZZDUFKHDXVWULDDW
%DXPXQJ5DQG-6|ONQHU*HQHWLVFKH'LIIHUHQ]LHUXQJYRQ6FKDIUDVVHQLP2VWDOSHQUDXP)LQDOUHSRUW'LYLVLRQ
RI/LYHVWRFN6FLHQFHV8QLYHUVLW\RI1DWXUDO5HVRXUFHV9LHQQD$XVWULD6
(56$$OSLQHW*KHHS$OSLQH1HWZRUNIRUVKHHSDQGJRDWSURPRWLRQIRUDVXVWDLQDEOHWHUULWRU\GHYHORSPHQW
$JHQ]LD5HJLRQDOHSHUOR6YLOXSSR5XUDOH)ULXOL9HQH]LD*LXOLD(56$SS
)HOGPDQQ $ 8 %LHW]NHU DQG & 0HQGHO 6FKDIUDVVHQ LQ GHQ $OSHQ *HVHOOVFKDIW ]XU (UKDOWXQJ DOWHU XQG
JHIlKUGHWHU+DXVWLHUUDVVHQH9*(+%D\HULVFKH/DQGHVDQVWDOWIU/DQGZLUWVFKDIW/I/SS
)KUHU/6WXGLHQ]XU0RQRJUDSKLHGHU6WHLQVFKDIH8QLYHUVLW\RI1DWXUDO5HVRXUFHV9LHQQD$XVWULD
*(+5RWH/LVWHGHUJHIlKUGHWHQ1XW]WLHUUDVVHQLQ'HXWVFKODQG$YDLODEOHDWKWWSZZZJHKGH
.DVSDU.6WXGLHQEHUGDV6WHLQVFKDILP&KLHPJDX7KHVLV7HFKQLFDO8QLYHUVLW\0XQFKHQ0XQFKHQ*HUPDQ\
0DVRQ,/7KH6KHHS%UHHGVRIWKH0HGLWHUUDQHDQ&RPPRQZHDOWK$JULFXOWXUH%XUHDX[(GLQJEXUJK6FRWODQG8.
0HQGHO&DQG*%XUNO*HIlKUGHWH1XW]WLHUUDVVHQ6FKZHUSXQNW6FKDIH=LHJHQ*HEUDXFKVKXQGH*HVHOOVFKDIW
]XU(UKDOWXQJDOWHUXQGJHIlKUGHWHU+DXVWLHUUDVVHQH9*(+SS

1EREKIQIRX
-RZIWXMRKMRXLIHIZIPSTQIRXSJ7SYXL%QIVMGER
GEQTIWMRSGEQIPMHIGSRSQMIWXLII\TIVMIRGISJXLI
-RXIVREXMSREP*YRHJSV%KVMGYPXYVEP(IZIPSTQIRX-*%(
5+DXGU\'H6RXF\
,QWHUQDWLRQDO)XQGIRU$JULFXOWXUDO'HYHORSPHQW,)$'9LDSDRORGL'RQR5RPH
,WDO\UKDXGU\#LIDGRUJ
%FWXVEGX
7KH$QGHDQUHJLRQKDVWKUHHPLOOLRQGRPHVWLFDWHG6RXWK$PHULFDQFDPHOLGVDQGRQHPLOOLRQLQ
WKHZLOGDYDOXDEOHDVVHWZLWKXQGHUXVHGSRWHQWLDOIRUFRQWULEXWLQJWRFOLPDWHFKDQJHDGDSWDWLRQ
KLJKTXDOLW\QHEUHWH[WLOHVDQGWKHPHDWOHDWKHUDQGRWKHULQGXVWULHV&DPHOLGUDLVLQJLV
XQLTXHLQWZRUHVSHFWVLWLVSUDFWLVHGPDLQO\DWDOWLWXGHVRIPHWHUVDQGDERYHLQWKHIUDJLOH
HFRV\VWHPVZKHUHLWHYROYHGDQGWRZKLFKLWLVSHUIHFWO\DGDSWHGDQGLWLVDQDVVHWRIWKHSRRUHVW
SHRSOHOLYLQJLQWKLVUHJLRQ,QVKRUWWKLVLVHVVHQWLDOO\DQDFWLYLW\RIFDPSHVLQRVLQWKH$QGHDQ
KLJKODQGV,QWKHSDVW\HDUVWKH,QWHUQDWLRQDO)XQGIRU$JULFXOWXUDO'HYHORSPHQW,)$'
KDVLQYHVWHGLQEULQJLQJWRJHWKHUNQRZHUVDQGNQRZOHGJH%UHHGHUVEUHVRUWHUVDUWLVDQVDQG
PLFURHQWUHSUHQHXUVOLQNHGWRWKHFDPHOLGHFRQRP\KDYHH[FKDQJHGDQGVFDOHGXSNQRZOHGJH
ZLWKWDQJLEOHUHVXOWV,)$'KDVDOVRFRQDQFHGWKHLUHQWHUSULVHVDQGLQLWLDWLYHVZLWKVXSSRUW
IURPQDWLRQDODQGORFDOJRYHUQPHQWVEXVLQHVVHVDQGRWKHUVRXUFHVRIFRRSHUDWLRQ$QHVWLPDWHG
86PLOOLRQKDVEHHQLQYHVWHGLQWKHVHFWRULQWKHSDVW\HDUVJHQHUDWLQJDQLPSDFWRU
LQFUHPHQWDOYDOXHRI86PLOOLRQLQWKHSRFNHWVRISURGXFHUV7KHVHDUHRQO\WKHUVWVWHSVLQ
WKHSURFHVVRIGHYHORSLQJWKHFDPHOLGHFRQRP\DQGLWVFRQWULEXWLRQWRPLWLJDWLQJFOLPDWHFKDQJH
DQGFRPEDWLQJUXUDOSRYHUW\,QWKHIRXUFRXQWULHVFRQFHUQHGWKHVHFWRUFRXOGJHQHUDWHWKUHH
WLPHVWKHFXUUHQWDQQXDOVDOHV86PLOOLRQLQWKHFDPSHVLQRVHFWRUDQG86PLOOLRQLI
RQHLQFOXGHVWKHWH[WLOHDQGJDUPHQWLQGXVWULHVDQGOLYHVWRFNVDOHV6XFKDQLQFUHDVHZLOOKLQJH
RQH[SDQGLQJLQFLSLHQWPDUNHWVIRUPHDWGULHGDQGIUHVKOHDWKHUPDQXIDFWXUHVDQGOLYHVWRFN
E\SURGXFWVDVZHOODVWKHWH[WLOHPDUNHWIRUYLFXxDEUHJXDQDFREUHLVVWLOOYLUWXDOO\XQXVHG
.QRZOHGJH H[FKDQJHV QHHG WR EH PXOWLSOLHG DPRQJ ORFDO DQG LQWHUQDWLRQDO WDOHQWV EHFDXVH
WKHWKUHVKROGVIRUOHDUQLQJVLPSOHWHFKQRORJLHVDQGSUHUHTXLVLWHVWRDFFHVVVROYHQWPDUNHWVDUH
EH\RQGUHDFKIRUPDQ\FDPSHVLQRVDQGDUWLVDQV7KLVFDOOVIRUFRQDQFLQJNQRZOHGJHH[FKDQJHV
EHWZHHQVXEUHJLRQVDQGFRXQWULHVVFDOLQJXSVXFKNQRZOHGJHWRWKHPDMRULW\DQGVHOHFWLYHO\
FRQDQFLQJWKHPRVWSURPLVLQJDQGHQYLURQPHQWDOO\UHOHYDQWLQLWLDWLYHVWRFRQWULEXWHSRVLWLYHO\
WRFOLPDWHFKDQJHIRULQVWDQFHE\VXEVWLWXWLQJFDPHOLGVIRUH[RWLFOLYHVWRFNVXFKDVFDWWOHDQG
VKHHSLQPRLVWSDUDPRVRUKLJKVWHSSHDUHDV
.H\ZRUGVGHYHORSPHQWFDPHOLGHFRQRP\FDPSHVLQR
-RXVSHYGXMSR
:LWKVL[PLOOLRQ6RXWK$PHULFDQGRPHVWLFFDPHOLGVDQGRQHPLOOLRQZLOGRQHVWKH$QGHDQUHJLRQ
SRVVHVVHVDVXEVWDQWLDOTXDQWLW\RIOLYHVWRFNWKDWLVXQGHUXWLOLVHGLQWHUPVRILWVFRQWULEXWLRQWR
FOLPDWHFKDQJHPLWLJDWLRQWKHVXSSO\RIKLJKSURWHLQIRRGVWXIIVIRRGVHFXULW\DQGWKHSURGXFWLRQ
RILQSXWVLQGLVSHQVDEOHWRWKHZRUOGWUDGHLQQHWH[WLOHEUHVPHDWOHDWKHUHWF7KHVHDQLPDOV
DOVRKDYHWZRXQLTXHIHDWXUHV
7KH\ DUH PDLQO\ UHDUHG DW DOWLWXGHV RI RYHU PHWUHV LQ IUDJLOH HFRV\VWHPV ZLWKRXW
GDPDJLQJWKHVHLQDVPXFKDVWKH\KDYHHYROYHGWKHUHDQGDUHWKXVSHUIHFWO\DGDSWHGWRWKH
HQYLURQPHQW

1EREKIQIRX
7KH\DUHDVVHWVEHORQJLQJDOPRVWH[FOXVLYHO\WRWKHFRPPXQLWLHVZLWKVFDQWUHVRXUFHVZKR
LQKDELWWKLVUHJLRQLQRWKHUZRUGVFDPHOLGVFRQVWLWXWHDW\SHRIOLYHVWRFNDQGDNH\HFRQRPLF
VHFWRUIRUWKHVXVWDLQDEOHXVHRIKLJK$QGHDQFDPSHVLQRVUHVRXUFHV
1EMRJIEXYVIWERHVEXMSREPISJXLIGEQIPMHIGSRSQ]GEQTIWMRSW
VERGLIVWGVEJX[SVOIVWERHWQEPPVYVEPIRXVITVIRIYVW
,WLVHVWLPDWHGWKDWVRPHKLJK$QGHDQIDPLOLHVREWDLQSDUWRIWKHLUKRPHFRQVXPSWLRQ
DQGPRQHWDU\LQFRPHIURPWKHVDOHRIZRROPHDWDQGRWKHUE\SURGXFWVIURPWKLVOLYHVWRFN
0RUHWKDQKDOIRIWKHVHIDPLOLHVDUHFODVVLHGDVH[WUHPHO\SRRUDQGWKHUHPDLQGHUKDYHLQFRPHV
RIOHVVWKDQ86SHUGD\ZKLOHDIXUWKHUIDPLOLHVPRVWRIWKHPDOVRSRRUOLYHIURPWKH
SULPDU\SURFHVVLQJRIPHDWZRRODQGVNLQVDQGDOOLHGDFWLYLWLHV
,QWKHLUVXEVLVWHQFHVWUDWHJLHVDWRWDORIDSSUR[LPDWHO\SHRSOHGHSHQGRQWKLVHFRQRPLF
VHFWRUZKLFKLVPDUNHGE\YHU\ORZTXDQWLWLHVRISXEOLFDQGSULYDWHLQYHVWPHQW
7KH\KDYHYDU\LQJQXPEHUVRIDQLPDOVDQGYDU\LQJHFRQRPLFDQGVRFLRFXOWXUDOFRQGLWLRQV0RVW
RIWKHSURGXFHUIDPLOLHVVRPHKDYHIHZHUWKDQFDPHOLGVFRPSOHPHQWLQJ
WKHVHZLWKVKHHSJRDWVDQGRFFDVLRQDOO\FDWWOHDQGZLWKKLJKODQGIDUPLQJEDVLFDOO\TXLQRD
DQGELWWHU\DP&DPHOLGVDUHWKHLUVRXUFHRIPHDWIRUKRPHFRQVXPSWLRQZRROIRUVDOHLQDQ
XQSURFHVVHGVWDWHDQG\DUQWRPDNHWKHLURZQFORWKHVZKLOHWKH\DOVRXVHGXQJDVIHUWLOLVHUIRU
TXLQRDDQGDVFRRNLQJIXHO,QVRPH]RQHVOODPDVDUHVWLOORFFDVLRQDOO\XVHGWRWUDQVSRUWVPDOO
ORDGV7KHVHDQLPDOVFDQUHSUHVHQWXSWRRIWKHFRPPXQLWLHVLQFRPHFRPELQLQJKRPH
FRQVXPSWLRQDQGVDOHV0RVWRIWKHLUPRQHWDU\LQFRPHKRZHYHUFRPHVIURPWKHVDOHRIWKHLU
ODERXURXWVLGHWKHIDPLO\KROGLQJVRPHWLPHVWKRXVDQGVRINLORPHWUHVDZD\
$IXUWKHUIDPLOLHVRZQPRUHDQLPDOVDVLPSOHDYHUDJHRIDQGDUHWKRVHZKRFDQ
EHWHUPHGOLYHVWRFNEUHHGHUVRUUDQFKHUVLQDVPXFKDVWKH\LQYHVWLQWKHFDUHRIWKHLUOLYHVWRFN
HVSHFLDOO\DOSDFDVZKRVHPDLQHFRQRPLFSXUSRVHLVEHLQJVKHDUHGIRUZRRO6RPHRIWKHVH
IDPLOLHVPD\KDYHDVPDQ\DVKHDGRIOLYHVWRFNEXWWKH\DUHWKHH[FHSWLRQ0DQ\RI
WKHPDUHRUJDQLVHGLQWRFRPPXQLWLHVDVVRFLDWLRQVFRRSHUDWLYHVDQGHQWHUSULVHV0RVWRIWKHVH
SURGXFHUVDOVRSXUVXHRWKHUHFRQRPLFDFWLYLWLHVIRFXVLQJRQDJULFXOWXUHOLYHVWRFNUHDULQJSHWW\
WUDGHDQGFUDIWZRUNZKLOHDIHZKDYHODXQFKHGLQWRWRXULVPOLQNHGDFWLYLWLHV7KHLUDYHUDJH
DQQXDOLQFRPHIURPWKHVDOHRIZRROPD\EHXSWRSHUFHQWRIWKHLUPRQHWDU\LQFRPH0RVW
RIWKHPDUHFRQVLGHUHGVWDWLVWLFDOO\DVSRRU
7KHUHPDLQLQJIDPLOLHVWKDWGRQRWGLUHFWO\RZQOLYHVWRFNRUWKDWWHQGLWIRUWKLUGSDUWLHV
SXUVXHSURFHVVLQJDFWLYLWLHVEDVHGRQFDPHOLGE\SURGXFWVHVSHFLDOO\WKHSURGXFWLRQRIIDEULF
IURPKRPHVSXQRUPDFKLQHVSXQ\DUQDQGWKHWUDGHLQPHDWOHDWKHUDQGRWKHUE\SURGXFWV+DOI
RIWKHPOLYHEHORZWKHSRYHUW\OLQH+RZHYHUWKHVHFUDIWZRUNHUVDQGVPDOOHQWUHSUHQHXUVDUHLQ
WKHIRUHIURQWRIYDOXHDGGLWLRQSURFHVVHVUHJDUGLQJWKHVHFWRUVSURGXFWVDQGDUHDOVRWKRVHZKR
EXLOGXSUHODWLRQVKLSVZLWKWKHWH[WLOHLQGXVWU\DQGUHVWDXUDQWVDFWDVWKHGULYLQJIRUFHEHKLQG
QHZ PDUNHW VHJPHQWV VXFK DV DVVRFLDWLYH HQWHUSULVHV GHDOLQJ LQ GULHG PHDW VPDOO IDFWRULHV
SURGXFLQJVDODPLW\SHSURGXFWVPDQXIDFWXUHUVRIXSPDUNHWOHDWKHUJRRGVDQGVHOHFWLYHPHDW
PDUNHWVIRUH[DPSOHKRVSLWDOVEHFDXVHRIWKHLQWULQVLFTXDOLWLHVRIWKLVPHDWVXFKDVLWVORZ
$QDYHUDJHSURGXFHUZLWKVRPHKHDGRIDOSDFDVUHFHLYHVDSSUR[LPDWHO\86SHU\HDUIRUZRRORU86SHU
GD\SHUIDPLO\
2YHUWKHSDVW\HDUVDJURZLQJQXPEHURIDVVRFLDWHGZRROSURGXFHUVKDYHEHHQVHQGLQJWKHUDZPDWHULDOWRVSLQQLQJ
PLOOVWRLQFUHDVHLWVDGGHGYDOXHWKHQVHOOLQJWKHVSXQ\DUQRUPDNLQJFORWKHVLQIDPLO\HQWHUSULVHV

1EREKIQIRX
FKROHVWHUROFRQWHQWDQGVHHNWRLPSURYHWKHK\JLHQLFTXDOLW\RIWKHLUSURGXFWVLQRUGHUWRSODFH
WKHPLQPDUNHWVZLWKJUHDWHUDGGHGYDOXH
7KHGLVWULEXWLRQRIWKHVHSHRSOHDPRQJWKHYDULRXVFRXQWULHVLVVLPLODUWRWKDWRIWKHOLYHVWRFN
LWVHOIVRWKDWWKHYDVWPDMRULW\RIOODPDRZQHUVDUHIRXQGLQ%ROLYLDDQGWKHODUJHVWQXPEHUVRI
DOSDFDRZQHUVLQ3HUX,QHFRQRPLFWHUPVWKHGLVWULEXWLRQRIWKHSULPDU\SURGXFWLRQYDOXHRI
WKHFDPHOLGHFRQRPLFVHFWRULVHVWLPDWHGDWLQ3HUXLQ%ROLYLDDQGWKHUHPDLQGHULQ
$UJHQWLQD&KLOHDQGWRDYHU\VPDOOH[WHQW(FXDGRUOHVVWKDQZKLOHWKHLQYRLFLQJRIWKH
KLJKHQGWH[WLOHLQGXVWU\LVFRQFHQWUDWHGLQ3HUX
$PRQJWKHPRVWSURPLVLQJPDUNHWVHJPHQWVWKHPDQDJHPHQWFRQWUROOHGVKHDULQJDQGVDOHRI
YLFXxDZRROVKRXOGEHSDUWLFXODUO\QRWHG7KLVUHODWLYHO\QHZDFWLYLW\UHSUHVHQWVDQHVWLPDWHG
DQQXDOLQFRPHRI86PLOOLRQIRUSRRUFDPSHVLQRVDQGPHPEHUVRIYLOODJHFRPPXQLWLHV
DURXQGWKRXVDQGIDPLOLHVDQGLVVWHDGLO\H[SDQGLQJWKDQNVWRLQWHUQDWLRQDOUHJXODWLRQVDQG
DJUHHPHQWVZKLFKKDYHOHGWRJRRGPDQDJHPHQWDQGDVLJQLFDQWLQFUHDVHLQQXPEHUVRIWKLV
ZLOGVSHFLHV:KLOHWKLVGHYHORSPHQWKDVSRVLWLYHHQYLURQPHQWDOHIIHFWVLWDOVROHDGVWRFRQLFW
ZLWKWUDGLWLRQDOOLYHVWRFNIDUPHUVDQGSRDFKHUV
,Q WKH SDVW WZHQW\ \HDUV WKH ,QWHUQDWLRQDO )XQG IRU$JULFXOWXUDO 'HYHORSPHQW ,)$' KDV
LQYHVWHGUHVRXUFHVLQFROOHFWLQJWKHNQRZOHGJHRIWKHPRVWVXFFHVVIXOIDPLOLHVDQGHQWUHSUHQHXUV
LQRUGHUWRVKDUHDQGVFDOHXSNQRZOHGJHDPRQJH[SHUWVSURIHVVLRQDOVEUHHGHUVSURGXFHUVFUDIW
ZRUNHUVDQGPLFURHQWUHSUHQHXUVLQYROYHGLQWKHFDPHOLGVHFWRU7KLVKDVEHHQPDGHSRVVLEOH
WKURXJKLQWHUQVKLSVDQGH[FKDQJHVDQGDOVRWKURXJKVFKHPHVWRFRQDQFHYDULRXVHQGHDYRXUV
DQGLQLWLDWLYHVZLWKWKHVXSSRUWRIQDWLRQDODQGORFDOJRYHUQPHQWVHQWHUSULVHVDQGRWKHUVRXUFHV
RIFRRSHUDWLRQ
7KHUHVXOWVKDYHEHHQWDQJLEOH)RUH[DPSOHWKRXVDQGVRIIDPLOLHVDUHQRZVHOOLQJJUDGHGUDWKHU
WKDQXQJUDGHGZRROVKHDULQJLVEHLQJPHFKDQLVHGDQLPDOVDUHEHLQJVODXJKWHUHGLQDEDWWRLUV
WKHSULFHVRIIUHVKPHDWDQGWKHK\JLHQLFFRQGLWLRQVRILWVSODFHRIVDOHDUHLPSURYLQJGULHG
DQGVDOWHGPHDWLVEHLQJSURFHVVHGLQVPDOOIDFWRULHVUXQPDLQO\E\ZRPHQDQGLVEHLQJVROGLQ
VXSHUPDUNHWVLQVXFKFLWLHVDV/D3D]GLVKHVEDVHGRQFDPHOLGPHDWDUHEHLQJRIIHUHGLQPRVW
UVWFODVVUHVWDXUDQWVOODPDPHDWLQ%ROLYLDDQGDOSDFDPHDWLQ3HUXPDQ\OLYHVWRFNIDUPHUV
RUJDQLVDWLRQVDUHQRZVHOOLQJSDUWRIWKHLUZRROLQVSRROVRILQGXVWULDO\DUQLQDQDGHTXDWHUDQJH
RIFRORXUVDQGDUHWKXVREWDLQLQJVXEVWDQWLDOLQFUHDVHVLQLQFRPHDQGFDPSHVLQRVDUHREWDLQLQJ
FDVKIURPWKHVDOHRIZRRODQGYLFXxDDQGDUHVHHNLQJWRSURFHVVLWLQRUGHUWRREWDLQDGGHGYDOXH
7KHVHFKDQJHVVHHPHGLPSRVVLEOHRQO\DIHZGHFDGHVDJREXWDUHVWHDGLO\H[SDQGLQJWRGD\
OHDGLQJWRFRQVWDQWLQQRYDWLRQVWKDWUHTXLUHHYHULQFUHDVLQJLQYHVWPHQWV
$VRQHRIWKHVRXUFHVWKDWKDVFRQWULEXWHGWRWKHVHFKDQJHV,)$'HVWLPDWHVWKDWLWKDVGLUHFWO\
LQYHVWHGVRPH86PLOOLRQLQWKHVHFWRUZLWKDQLPSDFWRULQFUHPHQWDOYDOXHRIVRPH86
PLOOLRQDVFDVKLQSURGXFHUVSRFNHWVLQUHFHQW\HDUVWKHDJJUHJDWHLQFUHPHQWDOLQFRPHIURP
WKHVHLQYHVWPHQWVIRUWKH$QGHDQUHJLRQLVHVWLPDWHGDWVRPH86PLOOLRQSHU\HDU
,QWHUPVRIWKHGHYHORSPHQWRIWKLVHFRQRPLFVHFWRUDQGEHDULQJLQPLQGLWVFRQWULEXWLRQWR
FOLPDWHFKDQJHPLWLJDWLRQDQGUXUDOSRYHUW\HUDGLFDWLRQWKHVHDUHLQIDFWRQO\WKHUVWVWHSVLQWKH
SURFHVV,QWKHYHFRXQWULHVFRQFHUQHGWKHVHFWRUFRXOGDQQXDOO\LQYRLFHWKUHHWLPHVPRUHWKDQ
'HSHQGLQJRQWKH\HDUDQGRQZRROSULFHVLQ3HUXWKLVUDQJHVIURP86PLOOLRQWR86PLOOLRQSHU\HDU7KH
PDLQLPSRUWHUVRIZRROLQWRSVDQGVSXQ\DUQDUH&KLQDDQG,WDO\
,)$'LVDQDQFLDOLQVWLWXWLRQRIWKH8QLWHG1DWLRQVVSHFLDOLVLQJLQWKHHUDGLFDWLRQRIUXUDOSRYHUW\VHHWKHZHEVLWH
ZZZLIDGRUJ

1EREKIQIRX
LVDWSUHVHQWWKHFDVHVRPH86PLOOLRQLQWKHFDPSHVLQRVHFWRUDQGVRPH86PLOOLRQ
LIWKHDPRXQWLQYRLFHGE\WKHWH[WLOHDQGIDVKLRQLQGXVWU\UHVWDXUDQWVDQGOLYHVWRFNGHDOHUVLV
LQFOXGHG7DEOH
;LEXMRGIRXMZIWERHGSRHMXMSRWHSIWXLIGEQIPMHWIGXSVIGSRSQ]
VIUYMVIMRSVHIVXSSTXMQMWIXLIZEPYISJMXWEGXMZMXMIW#
:LWK D YLHZ WR ERRVWLQJ WKH VHFWRU WKH HPEU\RQLF PDUNHWV IRU PHDW ERWK IUHVK DQG GULHG
OODPDZRROVWLOOOLWWOHXVHGLQFRPSDULVRQZLWKDOSDFDZRROOHDWKHUJRRGVDQGOLYHVWRFNE\
SURGXFWVQHHGWREHH[SDQGHGDVGRHVWKHPDUNHWIRUVXFKQHZWH[WLOHSURGXFWVDVYLFXxDDQG
JXDQDFRZRROWKHVHFRQGRIZKLFKLVVWLOOEDUHO\EHLQJRSWLPLVHG7KHH[FKDQJHRINQRZOHGJH
DPRQJORFDODQGLQWHUQDWLRQDOORFDOWDOHQWVPXVWEHVWHSSHGXSLQDVPXFKDVIHZFDPSHVLQRV
DQGFUDIWZRUNHUVKDYH\HWUHDFKHGWKHLUOHDUQLQJFHLOLQJVUHJDUGLQJVLPSOHWHFKQRORJLHVDQG
WKHPLQLPXPTXDOLWLHVQHHGHGWRHQWHUSURWDEOHPDUNHWV
7KLVUHTXLUHVWKDWWKHH[FKDQJHRINQRZOHGJHDPRQJVXEUHJLRQVDQGFRXQWULHVEHFRQDQFHG
WKLVNQRZOHGJHEHVFDOHGXSVRWKDWLWEHFRPHVJHQHUDOLVHGDQGWKHPRVWSURPLVLQJDQG
HQYLURQPHQWDOO\UHOHYDQWLQLWLDWLYHVEHVHOHFWLYHO\FRQDQFHGLQRUGHUWRKHOSFRXQWHUDFWFOLPDWH
FKDQJHIRUH[DPSOHE\UHSODFLQJH[RWLFOLYHVWRFNFDWWOHDQGVKHHSZLWKFDPHOLGVLQPRLVW
KLJKODQG]RQHV
7KHPRVWVXFFHVVIXOH[SHULHQFHLVVFDOHGXSRQWKHEDVLVRIDPDSSLQJRIJRRGSUDFWLFHVDQGORFDO
WDOHQWVLQWHUQVKLSVUHVLGHQWLDOFRXUVHVDQGIDFHWRIDFHH[FKDQJHVIRUWKUHHRUIRXUGD\VDPRQJ
SURGXFHUVDQGLQPDUNHWVOHDUQLQJURXWHVIDLUVDQGPHHWLQJV7KHFUHDWLRQRIDIDYRXUDEOH
HQYLURQPHQWUHTXLUHVWKHDSSOLFDWLRQDQGHQIRUFHPHQWRIFXUUHQWUHJXODWLRQVJRYHUQLQJVXFK
8EFPI'EQIPMHWERHIWXMQEXIWSJXLIMVIGSRSQMGZEPYIWMRXLI%RHIWJSVGEQTIWMRSWERHQMGVSIRXVITVIRIYVW
QMPPMSRWSJ97HSPPEVWTIV]IEV
7TIGMIW
,IEHSJ
PMZIWXSGO
(MVIGX
GEQTIWMRS
MRGSQI
8I\XMPIEHHIH
ZEPYI
WQEPP
IRXIVTVMWIW
3XLIVEHHIH
ZEPYIWOMRW
PIEXLIVIXG
8SXEPIGSRSQMG
ZEPYIVIGIMZIH
F]JEQMPMIWMR
XLIWIGXSV
0PEQEW
%PTEGEW
:MGYyEW
+YEREGSW
8SXEP

,SQIWTYR]EVRWIPIGXMSRERHKVEHMRKSJ[SSPERHWQEPPTVSGIWWMRKIRXIVTVMWIWS[RIHF]
GEQTIWMRSWSVGVEJX[SVOIVWMRXLIWIGXSV(SIWRSXMRGPYHIXLIXI\XMPIMRHYWXV]
8LIVI[IVISRP]ZMGYyEWMR
7KHJDSEHWZHHQWKHDYHUDJHSURGXFHUVWHFKQRORJLFDODQGFRPPHUFLDOOHYHODQGWKDWRIEHVWSUDFWLFHVLVKXJHDQG
FRXOGEHQDUURZHGWKURXJKDVXVWDLQHGH[FKDQJHRINQRZOHGJHDQGDFFHVVWRLQIRUPDWLRQDQGPDUNHWVFRPELQHGZLWK
YHU\VPDOOFDVKLQYHVWPHQWVOHVVWKDQ86SHUIDPLO\RQDYHUDJH
6HHWKH352&$685ZHEVLWHZZZSURFDVXURUJ

1EREKIQIRX
VXEMHFWVDVSRDFKLQJWKHVODXJKWHURIDQLPDOVFXWVRIPHDWDQGSXEOLFLQYHVWPHQWLQOLYHVWRFN
KHDOWKDQGLQWKHHOLPLQDWLRQRIREVWDFOHVWRGRPHVWLFDQGLQWHUQDWLRQDOWUDGH
6LPLODUO\H[WHQVLYHFDPSDLJQVDUHQHHGHGUHJDUGLQJWKHEHQHWVRIFDPHOLGVIRUQDWXUDOJUD]LQJ
ODQGVDQGWKHHQYLURQPHQWDQGDOVRWKHEHQHWVRIWKHLUE\SURGXFWVSDUWLFXODUO\PHDW,QWKLV
FRQQHFWLRQVWDWHVHQWHUSULVHVDQGORFDOJRYHUQPHQWVVKRXOGDOORFDWHJUHDWHUUHVRXUFHVZLWKWKH
WZRIROGDLPRIJHQHUDWLQJLQFRPHDQGHQKDQFLQJUHVRXUFHVLQWKHVWUXFWXUDOO\SRRUHVW]RQHVRIWKH
$QGHDQUHJLRQZKLOHLQFUHDVLQJWKHVXSSO\RIQHZSURGXFWVDQGVHUYLFHVWRVRFLHW\DVDZKROH
7KURXJK LWV SURJUDPPHV ,)$' KDV LGHQWLHG ORFDO WDOHQWV ZKR TXLFNO\ SDVV RQ WKHLU
NQRZOHGJHDQGKDVDOVRFRQDQFHGKXQGUHGVRIVPDOOVFDOHLQLWLDWLYHVXVLQJDFRPSHWLWLRQ
EDVHGPHWKRGRORJ\IRUWKHDOORFDWLRQRIIXQGV7KLVKDVEHHQVHHQSDUWLFXODUO\LQ%ROLYLDDQG
3HUXZKHUHWKHUHDUHDQXPEHURILQYHVWPHQWSURMHFWVXQGHUZD\LQVXSSRUWRIWKHLQLWLDWLYHVRI
FDPSHVLQRVPLFURHQWUHSUHQHXUVDQGWKHLUJRYHUQPHQWV
$SDUWLFXODUO\VHULRXVFDVHRIEDGWUDGHSUDFWLFHVVHYHUHO\LPSHGHVWKHDFWLYLWLHVRIZRROSURGXFHUVLQ%ROLYLDZKRVHHN
WRXVHWKHIDFLOLWLHVRIWKH3HUXYLDQWH[WLOHLQGXVWU\DQGKDYHWRPHHWFRPSOH[EXUHDXFUDWLFUHTXLUHPHQWVWRVHQGWKHLU
ZRROWR3HUXDQGWKHQUHFHLYHLWEDFNLQWKHIRUPRI\DUQSD\LQJGXWLHVDQGEULELQJERUGHUDXWKRULWLHVLQRUGHUWRFDUU\
RXWWKHVHYDOXHDGGLQJSURFHVVHV

1EREKIQIRX
&YMPHMRKERHWGEPMRKYTORS[PIHKISRGEQIPMHW
*9LOD0HORDQG&*XWLpUUH]9iVTXH]
)XQGDFLyQ%LRGLYHUVLGDG%XHQRV$LUHV$UJHQWLQD
&RPPXQLFDWLRQDGYLVRU$UHTXLSD3HU~FDUORVBJXWLHUUH]BY#KRWPDLOFRP
%FWXVEGX
$WSUHVHQWOODPDVDQGDOSDFDVSOD\DQLPSRUWDQWUROHLQWKHIRRGVHFXULW\RISRSXODWLRQVOLYLQJ
LQKLJK$QGHDQDUHDVDQGWKH\DOVRSURYLGHEUHOHDWKHUDQGPHDW7KLVDOWHUQDWLYHOLYHVWRFN
LVH[WUHPHO\LPSRUWDQWQRWRQO\LQDULGUHJLRQVRI$UJHQWLQD%ROLYLD&KLOH(FXDGRUDQG3HUX
EXWDOVRLQRWKHUFRXQWULHVWKDWKDYHGLVFRYHUHGWKHLUHFRQRPLFSRWHQWLDOVXFKDV$XVWUDOLD1HZ
=HDODQG1RUWK$PHULFDDQG&DQDGD,Q6RXWK$PHULFDSURGXFWLRQPDQDJHPHQWLVQRWHIFLHQW
DQGGRHVQRWJHQHUDWHLQFRPHWKH\DUHVXEVLVWHQFHHFRQRPLHV,QWKHQHZJOREDOLVHGZRUOGLWLV
UHOHYDQWWRDFKLHYHKLJKO\HIFLHQWOLYHVWRFNSURGXFWLRQWRKHOSWHUULWRULDOGHYHORSPHQWZLWKRXW
ORVVRILGHQWLW\7RVXFKDQHQGZHPXVWWDNHLQWRDFFRXQWWKHYDVWH[SHULHQFHDQGWKHJUHDWGHDO
RILQIRUPDWLRQDYDLODEOHIRUWKHODVW\HDUVDVZHOODVWKHSRRUDFFHVVWRVXFKLQIRUPDWLRQE\
WKH$QGHDQFRPPXQLWLHV7REHJLQWRDGGUHVVWKHVHOLPLWDWLRQVWKH,QWHUQDWLRQDO$JULFXOWXUDO
'HYHORSPHQW)XQGWKH%LRGLYHUVLW\)RXQGDWLRQDQGRWKHULQVWLWXWLRQVKDYHRUJDQLVHGVLQFH
WKUHHHGLWLRQVRIWKH:RUOG&RQJUHVVRQ&DPHOLGVZLWKWKHQH[WRQHWREHKHOGLQ&KLOH
1RYHPEHU,WVDLPLVWRDFKLHYHFRH[LVWHQFHDQGFRPPXQLFDWLRQEHWZHHQWKHGLIIHUHQW
VHFWRUVVRWKDWWKHUHLVFRQVLVWHQF\EHWZHHQHFRQRPLFVRFLDOKXPDQDQGFXOWXUDOLVVXHV
7KHQH[WVWDJHZLOOEHWREXLOGDZHEVLWHZKHUHDOODFWRUVFDQDFWLYHO\LQWHUDFWWKURXJKFKDW
EORJVVRFLDOQHWZRUNVDQGIRUXPVDPRQJRWKHUWKLQJV,WZLOODOVRSURYLGHDOLEUDU\LQFOXGLQJ
GLJLWLVHGPDWHULDO:LNLDQGDOORZIRURQOLQHWUDLQLQJDQGWKHIRVWHULQJRIVXFFHVVIXOUXUDO
LQQRYDWLRQV7KHSURMHFWJRDOLVWREXLOGV\VWHPDWLVHDQGPDQDJHWKHGD\WRGD\H[SHULHQFH
DQGWHFKQLFDONQRZOHGJHLQRUGHUWRGLVWULEXWHVXFKFROOHFWLYHLQIRUPDWLRQVFDOLQJXSWU\LQJWR
GHYHORSDQDOWHUQDWLYHOLYHVWRFNSURGXFWLRQVRDVWRDFKLHYHDSURGXFWLYHDQGVXVWDLQDEOHZRUOG
LQZKLFKFDPHOLGEUHHGHUVDUHLQFOXGHG
.H\ZRUGVVXVWDLQDEOHHFRQRP\WHFKQLFDONQRZOHGJHZHEVLWH
&EGOKVSYRH
,QWKHSDVWWKH6RXWK$PHULFDQFDPHOLGOLYHVWRFNUHSUHVHQWHGWKHZHDOWKRIWKH$QGHDQUHJLRQ
SURYLGLQJSURGXFWVHVVHQWLDOWRWKHOLYHOLKRRGVRIWKHLUFRPPXQLWLHV/ODPDVDOSDFDVYLFXxDV
DQGJXDQDFRVDUHRULJLQDOO\IURP$UJHQWLQD%ROLYLD&KLOH(FXDGRUDQG3HUX$WSUHVHQWOODPDV
DQGDOSDFDVSOD\DQLPSRUWDQWUROHLQWKHIRRGVHFXULW\RIWKHKLJK$QGHDQSRSXODWLRQVVLQFH
WKHLUPHDWLVDULFKVRXUFHRISURWHLQ/ODPDVLQSDUWLFXODUDUHDPHDQVIRUORDGLQJDQGWUDQVSRUW
DQGERWKDQLPDOVSURYLGHEUHDQGOHDWKHUIRUFORWKLQJDQGVKHOWHUDQGWKHLUGXQJLVXWLOLVHGDV
IXHODQGIHUWLOLVHULQVRPHFDVHV7KHLULPSRUWDQFHDVDOLYHVWRFNDOWHUQDWLYHLQDULGDQGVHPLDULG
UHJLRQVLVLQFUHDVLQJ7KLVWUHQGDOVRH[LVWVLQFRXQWULHVLQZKLFKWKHVHVSHFLHVZHUHQRWSUHVHQW
VRPH\HDUVDJRDQGZKRQRZEHQHWIURPWKHLUSRWHQWLDOHFRQRPLFSURGXFWLYLW\7KHVHFRXQWULHV
DUH$XVWUDOLD1HZ=HDODQG8QLWHG6WDWHVRI$PHULFD&DQDGDDQGRQDVPDOOHUVFDOH)UDQFH
8.*HUPDQ\,WDO\6SDLQDQG,VUDHODPRQJRWKHUV
,Q6RXWK$PHULFDRIWKHDOSDFDVDQGRIWKHOODPDVDUHLQWKHKDQGVRIUXUDOFRPPXQLWLHV
RIWKH$QGHDQUHJLRQ%RWKDUHKLJKO\HIFLHQWLQWKHXVHRIIUDJLOHQDWXUDOJUDVVODQGVJURZLQJ
LQ YHU\ ODELOH VRLO DQG DUH ZHOO DGDSWHG WR UXJJHG WHUUDLQ DQG DGYHUVH ZHDWKHU FRQGLWLRQV
FKDUDFWHULVWLFVZKLFKPDNHWKLVUHJLRQLQKRVSLWDEOH%RWKVSHFLHVSOD\DUHOHYDQWUROHLQKDELWDW

1EREKIQIRX
FRQVHUYDWLRQDQGSUHVHUYDWLRQRIZDWHUVRXUFHVDQGWKHLUVXVWDLQDEOHXVHLVDVRXUFHRILQFRPH
DQGVXSSOLHVIRUUXUDOFRPPXQLWLHV
,W LV LPSRUWDQW WR PHQWLRQ WKDW WKHVH UHJLRQV DUH QRW KLJKO\ HIFLHQW LQ WHUPV RI SURGXFWLYH
PDQDJHPHQW7KHUHIRUHSURGXFWLRQDFWLYLWLHVGRQRWSURYLGHLQFRPHIRUWKHVHFRPPXQLWLHV
ZKLFKSUHVHQWO\IXQFWLRQRQWKHOHYHORIDVXEVLVWHQFHHFRQRP\,IWKLVVFHQDULRLVFRQWUDVWHG
ZLWKWKHVLJQLFDQWSURJUHVVLQRWKHUFRXQWULHVWKDWKDYHDGRSWHGWKLVSURGXFWLRQDOWHUQDWLYHWKH
ODWWHURXWSHUIRUPVWKHZRUNRIFHQWXULHVRIWKHVHWUDGLWLRQDOFRPPXQLWLHVQHJOHFWLQJDQGSRRUO\
SRVLWLRQLQJWKHLUSURGXFWLYLW\LQWKHPDUNHW,WLVRIYLWDOLPSRUWDQFHWRDFKLHYHWKHVXVWDLQDEOH
XVH RI WKH KLJKO\ HIFLHQW FDPHOLG UHVRXUFH DOORZLQJ WHUULWRULDO GHYHORSPHQW ZLWK FXOWXUDO
LGHQWLW\SURYLGLQJDKROLVWLFYDOXHWRWKHQDQFLDOFXOWXUDOVRFLDOKXPDQSK\VLFDODQGQDWXUDO
DVVHWVRIWKLVUHJLRQ
7KHFKDOOHQJHLVWRHQFRXUDJHWKHHIIHFWLYHDQGHIFLHQWGHYHORSPHQWRIDOLYHVWRFNFRPSOH[
E\PRWLYDWLQJWKH$QGHDQFRPPXQLWLHVWRFRQYHUWWKHSURGXFWLYLW\RIOODPDDQGDOSDFDOLYHVWRFN
LQWRDYDOLGDOWHUQDWLYHZLWKEHQHWVLQOLQHZLWKWKHVFDOHRISURGXFWLRQ&RPPXQLWLHVDUHDEOH
WROHDUQXQGHUVWDQGDQGGHYHORSEHWWHUSURGXFWLRQ7RDFKLHYHWKLVWKH\PXVWFRPELQHWKHLU
DELOLW\WKHLUGDLO\OHDUQLQJDFWLYLW\ZLWKNQRZOHGJHWKHDFTXLUHGDQGV\VWHPDWLVHGH[SHULHQFHV
JHQHUDWLQJDQGHQKDQFLQJSRVLWLYHH[SHULHQFHVWKDWDOORZWKHGHYHORSPHQWRIWKHFRPPXQLWLHV
IRVWHULQJWKHH[FKDQJHRILGHDVIRUWKHGHFLVLRQPDNLQJSURFHVV
,Q EURDG WHUPV ZH PXVW DVSLUH WR GHYHORS D QDWLYH VXVWDLQDEOH DQG RULJLQDO OLYHVWRFN
DOWHUQDWLYH DEOH WR LQFRUSRUDWH QHZ DUHDV DW SUHVHQW PDUJLQDOO\ SURGXFWLYH LQWR WKH FXUUHQW
OLYHVWRFN SURGXFWLRQ UHJLRQV DQG RIIHU WR WKH PDUNHW SURGXFWV DQG VHUYLFHV ZLWK WKH
HPSKDVLVRQWKHLULQWULQVLFYDOXHVDULVLQJIURPWKHVXVWDLQDEOHXVHRIDUHQHZDEOHUHVRXUFH
7KXVWKHVXVWDLQDEOHXVHRIFDPHOLGVUHSUHVHQWVRQWKHRQHKDQGDQXQGHQLDEOHRSSRUWXQLW\IRU
WKHHFRQRPLFGHYHORSPHQWRIWKHKLJK$QGHDQFRPPXQLWLHVE\HQVXULQJIRRGVHFXULW\SRYHUW\
DOOHYLDWLRQDQGFOLPDWHFKDQJHPLWLJDWLRQDQGRQWKHRWKHUDSURGXFWLRQDOWHUQDWLYHWKDWZRXOG
VHWLQPRWLRQH[WHQVLYHSURGXFWLYHUHJLRQVZKLFKVRIDUGRQRWKDYHDQHIFLHQWSURGXFWLRQWDUJHW
6RPHWZHQW\\HDUVDJRWKH,QWHUQDWLRQDO)XQGIRU$JULFXOWXUDO'HYHORSPHQW,)$'VXSSRUWHG
WKHGHYHORSPHQWRIQXPHURXVLQLWLDWLYHVLQYROYLQJFDPHOLGSURGXFWLRQDQGFRQVHUYDWLRQIRUUXUDO
GHYHORSPHQWLQ%ROLYLDDQG3HUX6RPHRIWKHVHLQLWLDWLYHVZHUHXQGHUSURMHFWVDQGSURJUDPPHV
ZLWKDVSHFLFWKHPDWLFDSSURDFKVXFKDV81(3&$33&DQG3525(&$LQ%ROLYLDRWKHUV
XQGHUUHJLRQDOSURMHFWVWKDWVXSSRUWFDPHOLGFRQVHUYDWLRQVXFKDV)($60$5(1$66DQG
&255('25&86&23812LQ3HUXDQG3520$5(1$LQ%ROLYLD
,Q,)$'DQGODWHURQ)XQGDFLyQ%LRGLYHUVLGDGDVZHOODVRWKHULQVWLWXWLRQVRUJDQLVHG
LQ%ROLYLD(FXDGRUDQG$UJHQWLQDWKUHHHGLWLRQVRIWKH:RUOG&RQJUHVVRQ&DPHOLGVZKRVH
WKPHHWLQJZLOOWDNHSODFHLQ1RYHPEHULQ&KLOH7KHVHHYHQWVZHUHVSHFLDOLQWKDWWKH\
JDWKHUHGWRJHWKHUDOODFWRUVLQWKHSURGXFWLYHFRPSOH[OLYHVWRFNSURGXFWLRQSURFHVVLQJDQG
PDUNHWLQJRIUDZPDWHULDOVDQGSURGXFWVDQGVFLHQWLFUHVHDUFKDQGDFKLHYHGFRH[LVWHQFHDQG
FRPPXQLFDWLRQDPRQJGLIIHUHQWVHFWRUVRQVLJQLFDQWHFRQRPLFVRFLDOKXPDQDQGFXOWXUDO
LQWHUHVWV
:KDWVKRXOGZHGRZLWKWKHLQIRUPDWLRQDQGH[SHUWLVHDFTXLUHGGXULQJWKHVHODVW\HDUV"
&ROOHFWLYH NQRZOHGJH RQ UHVRXUFH PDQDJHPHQW DQG FDPHOLG SURGXFWLRQ VKRXOG DW OHDVW EH
FDUHIXOO\ SUHVHUYHG DQG DFFHVV WR WKLV LQIRUPDWLRQ IRU$QGHDQ FRPPXQLWLHV VKRXOG DOVR EH
SURPRWHGDQGEHHDVLO\DYDLODEOH,QRUGHUWRSURYLGHFRQWLQXLW\WRWKLVSURFHVVWKHQH[WVWDJH
VKRXOGEHWREXLOGD:HEVLWHZKHUHZKDWPDWWHUVLVWKHLQWHUDFWLRQEHWZHHQWKHDFWRUVDQGQRW
WKHWHFKQRORJ\LWVHOIRULWVORFDWLRQ7KHSULPDU\REMHFWLYHLVWRHVWDEOLVKDPHHWLQJSRLQWFKDWEORJ

1EREKIQIRX
IRUXPDUWLFOHVGRFXPHQWVXVHIXOOLQNVQHZVSKRWRVYLGHRVSURPRWLRQDQGGLVVHPLQDWLRQRI
H[KLELWLRQVDQGHYHQWVJHRSRVLWLRQLQJSURMHFWVDQGKHUGVDQGSODWIRUPIRUHOHDUQLQJWXWRULDOV
FRQWDFWVVXSSO\DQGGHPDQGRIJRRGVDQGVHUYLFHVEHWZHHQIDUPHUVVFLHQWLVWVPDQXIDFWXUHUV
DQGWUDGHUVWRHQDEOHFRQWLQXLW\DQGH[SDQVLRQVFDOLQJXSRIFRPPHUFLDODQGKXPDQUHODWLRQV
VRFLDOQHWZRUNRIWKHFDPHOLGFRPSOH[7KHVHFRQGDU\REMHFWLYHLVWRLPSOHPHQWDOLEUDU\WKDW
LQFOXGHVGLJLWDOGRFXPHQWVDQGSXEOLFDWLRQVFRQWDLQLQJNQRZOHGJHDQGH[SHULHQFHVGHPDQGHG
E\WKHYDULRXVVWDNHKROGHUV8VHUVZRXOGWKHUHIRUHFUHDWHPRGLI\RUGHOHWHVKDUHGWH[WV7KH
DLPLVWRSURPRWHWKHFUHDWLRQRIFROODERUDWLYHHQF\FORSDHGLDVVLPLODUWR:LNLSHGLDRURWKHU
DSSOLFDWLRQVVXLWDEOHWRWKHFRRUGLQDWLRQRILQIRUPDWLRQDQGDFWLRQVRUWKHVKDULQJRINQRZOHGJH
DQGWH[WVZLWKLQJURXSV,WLVLPSRUWDQWWRSRLQWRXWWKDWLWLVQRWDERXWVHDUFKLQJQHZVWUXFWXUHV
EXWUHDFKLQJV\QHUJLHVZLWKH[LVWLQJVRFLDOQHWZRUNVDQGLQIRUPDWLRQVWRUHVDQGHVWDEOLVKLQJ
XQLYHUVDODFFHVVVXVWDLQDELOLW\DQGUHVRXUFHVDYLQJV
7RDFKLHYHIXOOSDUWLFLSDWLRQDQGJHQHUDWHDQLQFOXVLYHFRPPXQLFDWLRQDQGLQIRUPDWLRQV\VWHP
LWLVQHFHVVDU\WREHDULQPLQGWKHSRLQWVGHVFULEHGLQWKHIROORZLQJVHFWLRQV
/RS[PIHKIKETERHHMKMXEPKET
6FKHPDWLFDOO\WKHNQRZOHGJHJDSUHIHUVWRWKHGLIIHUHQFHVLQDFFHVVWRNQRZOHGJHEHWZHHQ
LQGLYLGXDOVVRFLDOJURXSVUHJLRQVRUFRXQWULHVGXHWRGLIIHUHQFHVLQDJHHFRQRPLFRUFXOWXUDO
UHDVRQV7KHGLJLWDOJDSUHIHUVWRGLIIHUHQFHVLQWHUPVRINQRZOHGJHRUDFFHVVRSSRUWXQLWLHVWR
WKHLQIRWHFKQRORJ\DYDLODEOHWRHQGXVHUVRUUHJXODUQRQSURIHVVLRQDOFRPSXWHUXVHUV
0RGHUQVRFLHW\LVFKDUDFWHULVHGE\EHQHWLQJIURPWKHHUDRINQRZOHGJHEXWWKLVNQRZOHGJH
ZKLFK FRQVWLWXWHV DQ LQWDQJLEOH DVVHW LV DOVR D PHDQV RI H[FOXVLRQ DQG GLVFULPLQDWLRQ DV
QDQFLDOO\VWURQJVRFLHWLHVKDYHHDVLHUDFFHVVWRHGXFDWLRQDQGLQIRUPDWLRQ,QWKLVFRQWH[W
SRRUVRFLDOJURXSVLQGHYHORSLQJFRXQWULHVDUHHYHQPRUHH[FOXGHG7KLVGLIIHUHQFHLQWKHOHYHO
RIDFFHVVWRNQRZOHGJHHQODUJHVWKHJDSEHWZHHQUVWZRUOGDQGWKLUGZRUOGFRXQWULHV
(DFKWLPHDQHZFRPPXQLFDWLRQWHFKQRORJ\DSSHDUVLWLVH[FOXVLYH,QWKHORQJUXQHQGXVHUV
KDYHHDVLHUDFFHVVWRWKHPSULQWLQJUDGLRWHOHYLVLRQFHOOSKRQH,QWHUQHW2QFHLWZDVDVVXPHG
WKDW WKH ,QWHUQHW GHSHQGHG RQ HQJLQHHUV PDFKLQHV DQG ZDV RQO\ IRU ELJ FLWLHV DQG WKHQ DQ
HYROXWLRQWRRNSODFH1RZLWLVQRWLPSRUWDQWZKHUHLQIRUPDWLRQLVVWRUHGQRUZKHWKHUWKHVHUYHUV
DUHDEOHWRDFFXPXODWHVXFKDQDPRXQWRILQIRUPDWLRQ:LWK:HEWHFKQRORJ\LH:LNLSHGLD
DQG<RX7XEHDQGYLUWXDOVSDFHVDQGWKHSURJUDPPLQJVNLOOVRI\RXQJSHRSOHDURXQGWKHZRUOG
WKHSRLQWQRZLVZKDWVKRXOGZHGRZLWKWKHVRFLDODVVHWVRILQIRUPDWLRQDQGFRPPXQLFDWLRQ"
,YQERQEGLMRIFMRSQMEP
7KHUHLVLQIDFWDSRUWLRQRIWKHPRVWDGYDQFHGLQIRWHFKQRORJ\WKDWLVZUDSSHGLQDSSURSULDWHXVHU
IRUPDWVERWKDVLQVWUXPHQWVDQGDSSOLFDWLRQVDVZHOODVVHUYLFHV7KLVFRPHVDOPRVWLPPHGLDWHO\
DQGLQZDYHVWRWKHSXEOLF:KHQZHUHIHUWRLQIRWHFKQRORJ\ZHPHDQ,QIRUPDWLRQ7HFKQRORJ\
DQG&RPPXQLFDWLRQ,&7ZKLFKLVLQWHJUDWHGLQWRWKHOLYHVRIWHQVRUKXQGUHGVRIPLOOLRQV
RIHQGXVHUVQRWWHFKQLFDOO\VNLOOHGEXWOD\SHRSOHPXOWLIXQFWLRQDOPRELOHWHUPLQDOVSHUVRQDO
FRPSXWHUV3'$VZHESDJHVZHEVLWHVRUZHEVHUYHUVEORJVGLJLWDOFDPHUDVJDPHFRQVROHV
03 DQG 03 SOD\HUV '9' SOD\HUVUHFRUGHUV %OXH UD\ *36 QDYLJDWLRQ HPDLO YDULRXV
,QWHUQHWVHUYLFHVLQVWDQWPHVVDJLQJFHOOSKRQHSURYLVLRQFHOOSKRQHVZLWK*36DQG,QWHUQHW
DQGRWKHUVHUYLFHVOLQNHGWRVRFLDOQHWZRUNVPXOWLPHGLDDQGPDQ\RWKHUGLIIHUHQWLQVWUXPHQWV
7KHVH GDLO\ PDVVLYH WHFKQRORJLFDO GHYHORSPHQWV PDNH WKH KXPDQPDFKLQH ELQRPLDO RQH
RYHUZKHOPLQJUHDOLW\UDWKHUIRUFHGFKRVHQRUUHMHFWHGGHSHQGLQJRQWKHFRQWH[W,WVEHKDYLRXU

1EREKIQIRX
DQGVRFLDOFRQVHTXHQFHVDUHLIDQDO\VHGIURPGLIIHUHQWDQJOHVDPXOWLGLVFLSOLQDU\HOGHQRXJK
WRMXVWLI\WKHQHHGIRUH[WHQGLQJRUVFDOLQJXSLWVXVHWRVHUYLFHVWKDWLQFOXGHLQIRSRRUHQG
XVHUVLQWKHPRVWUHPRWHSODFHVRIRXUVRFLHW\
,Q/DWLQ$PHULFDWKHUHLVVLJQLFDQWNQRZOHGJHFDSLWDOUHJDUGLQJ6RXWK$PHULFDQFDPHOLGV
SURGXFHUVDQGEUHHGHUVVFLHQWLFLQVWLWXWLRQVDFDGHPLFLQVWLWXWLRQVVWDWHRUJDQLVDWLRQVEXVLQHVV
DVVRFLDWLRQV FRRSHUDWLYHV DPRQJ PDQ\ RWKHUV7KHVH DUH WKH OLYLQJ PHPRU\ RU ZDUHKRXVH
OLEUDU\ RI NQRZOHGJH7KLV DOVR DSSHDUV WR EH WKH FDVH LQ PRUH WHFKQRORJLFDOO\ GHYHORSHG
FRXQWULHVZLWKQHZEUHHGHUVDQGLQVWLWXWLRQVVXFKDV$XVWUDOLD1HZ=HDODQG8QLWHG6WDWHVRI
$PHULFD&DQDGDHWF
(MKMXEPEPTLEFIXMWEXMSR
'LJLWDODOSKDEHWLVDWLRQLVWKHGHYHORSPHQWRIWKHFDSDFLW\RIKXPDQPDFKLQHFRXSOLQJZKHUHWKH
KXPDQLVWKHRQHWKDWXVHVWKHFDSDELOLWLHVRIWKHPDFKLQHVKDVWKHFULWHULDWRGRVRDQGH[SDQGV
LWVFDSDELOLWLHVDQGDFWLRQV+DYLQJVDLGWKLVWKHDLPLVWRPDQDJHWKHLQWHOOLJHQWFDSDFLWLHVRI
WKHPDFKLQHUDWKHUWKDQPDQDJLQJWKHPDFKLQHLWVHOI+XPDQORJLFDOUHODWLRQVVKRXOGXQGHUVWDQG
WKHUHODWLRQVRIWKHGLJLWDOXQLYHUVH,WLVDIDFWWKDWWKLVGRHVQRWRFFXULQUXUDODUHDVPXFKOHVVLQ
WKH$QGHDQUHJLRQ7KHUHIRUHLIZHLQWHQGWRJHQHUDWHDQH[FKDQJHRINQRZOHGJHDQGNQRZKRZ
DPRQJIDUPHUVZKRDUHDWWKHVDPHWLPHGHSRVLWDULHVRIWUDGLWLRQDONQRZOHGJHDQGSHWLWLRQHUV
RIQHZWHFKQRORJLHVIRUWKHLUSURGXFWLRQV\VWHPWKH\PXVWKDYHWKHDELOLW\DQGRSSRUWXQLW\WR
UHFHLYHGLJLWDODOSKDEHWLVDWLRQ
7KHFXUUHQWLQFOXVLYHH[SHULHQFHVUHO\RQLPSURYLQJGLJLWDOOLWHUDF\DQGLQYHVWPHQWLQFDSDFLW\
EXLOGLQJDQGWUDLQLQJDFWLYLWLHVIURPSHUVRQQHOLQFKDUJHRI,QWHUQHWERRWKVLQUXUDODUHDVWR
WKRVHLQWHUHVWHGLQXVLQJ,&7VIRUWKHLURZQSURJUHVV1HZWHFKQRORJLHVQRORQJHUGHSHQGRQD
UHIHUHQFHSRLQWLQZKLFKLQIRUPDWLRQLVVWRUHGQRURQDFHUWDLQQXPEHURIRSHUDWRUVWRJHWWKH
ZRUNGRQHEXWRQNHHSLQJLQIRUPDWLRQRQOLQHWKURXJKPHDQVOLNH\RXWXEHRU:LNLSHGLD7KXV
LPSURYLQJGLJLWDOOLWHUDF\WKURXJKF\EHUWHFKQRORJ\VKRXOGEHIXQGDPHQWDOWRDQ\SURSRVDOIRU
LQFOXGLQJUXUDOLQGLYLGXDOVLQWKHPDUNHW
7KHVRFLDORUJDQLVDWLRQRI$QGHDQFRPPXQLWLHVUHOLHVRQPXWXDOEHQHWWUXVWFLYLFHQJDJHPHQW
DQGUHFLSURFLW\VWDQGDUGV,IZHZDQWWKHVHFRPPXQLWLHVWRJHQHUDWHDQLQIRUPDWLRQDOFDSLWDO
WKDWDOORZVWKHPWRLPSURYHWKHLUTXDOLW\RIOLIHWKHLUSDUWLFLSDWLRQWKURXJK,&7PHDQVZLOO
FRQVLWLWXWH D VWUDWHJLF FKDOOHQJH WKDW UHTXLUHV VRFLDO RUJDQLVDWLRQV WR DUWLFXODWH DOWHUQDWLYH
FRRSHUDWLRQQHWZRUNVDQGFROOHFWLYHDFWLRQ
$SURFHVVRIHPSRZHUPHQWRI,&7VE\VRFLDODFWRUVVKRXOGWDNHSODFHGLUHFWLQJWKHHGXFDWLRQDO
XVHRIFKDWVIRUXPVDQGEORJV7KLVVKRXOGOHDGWRDOLQNEHWZHHQWHFKQRORJLFDOHPSRZHUPHQW
DQG LPSURYHPHQW LQ WKHLU TXDOLW\ RI OLYH ,&7 SOD\V DQ LQFUHDVLQJO\ LPSRUWDQW UROH LQ ORFDO
GHYHORSPHQWGXHWRLWVDELOLW\WRPRELOLVHPDWHULDOUHVRXUFHVLQIRUPDWLRQDQGNQRZOHGJH7KH
DLPLVWRXVHWKH,QWHUQHWIRUWKLQNLQJDQGHQFRXUDJLQJDGLDORJXHWKDWVKRXOGUHVXOWLQFROOHFWLYH
NQRZOHGJHLQWKLVFDVHUHJDUGLQJFDPHOLGVDQGQRWRQO\DVDPHDQVIRUWUDQVPLWWLQJLQIRUPDWLRQ
,QWLPHVZKHQFXOWXUHLWVHOIKDVEHFRPHDUHVRXUFHIRUHFRQRPLFGHYHORSPHQWLWLVQHFHVVDU\
WRPRYHWRDVRFLDODSSURSULDWLRQRI,&7VLQRUGHUWRGHSOR\EHKDYLRXUDOVWUHQJWKDQGFUHDWLYH
FDSDFLW\UHO\LQJRQWKHH[SHUWLVHRILQGLYLGXDOVDQGVRFLDODFWRUV,QRUGHUWRUHGXFHLQIRUPDWLRQ
DQGOLWHUDF\JDSVDQGWRDWWDLQRXUPDLQREMHFWLYHLWZLOOEHQHFHVVDU\WRZRUNWRJHWKHUZLWK
H[LVWLQJSURMHFWVLQWKHYHFRXQWULHVRILQWHUHVW

1EREKIQIRX
8LI;IFEWSGMEPERHGVIEXMZIVIZSPYXMSR
7KHPRVWVLJQLFDQWLQQRYDWLRQRI:HELVLWVFDSDFLW\WRFRQYHUWDVLWHLQWRDSODWIRUPIRU
SXEOLFDWLRQDQGSURGXFWLRQRIFRQWHQWVDQGDSSOLFDWLRQVE\DQ\XVHU:HELVDQDWWLWXGHQRW
MXVWDWHFKQRORJ\,WLVWKHDELOLW\WRDVVLPLODWHDGHPRFUDWLFDQGFRPPXQLFDWLYHXVHRIWKHZHE
E\H[SORLWLQJWKHFDSDFLW\IRUGLDORJXH,WLQFOXGHVDSSOLFDWLRQVWKDWJHQHUDWHFROODERUDWLRQDQG
VHUYLFHVWKDWUHSODFHGHVNWRSDSSOLFDWLRQV0DQ\VD\WKDWWKH,QWHUQHWKDVEHHQUHLQYHQWHG
7HFKQRORJLHVVXFKDVEORJVZHEORJVIRUVRPH6SDQLVKVSHDNLQJXVHUVDUHMXVWDYHU\VLPSOH
PHFKDQLVPIRUFUHDWLQJDUWLFOHVRUSRVWVLQFKURQRORJLFDORUGHUXVXDOO\VKRUWWKDWDQLQGLYLGXDO
SHUIRUPV RQ WKH ,QWHUQHW IRU DQ\RQH ZLOOLQJ WR UHDG LW DQG HQDEOH UHDGHUV WR HQJDJH LQ D
FRQYHUVDWLRQZLWKWKHEORJJHUWKHSHUVRQZKRFUHDWHGWKHEORJYLDDIHHGEDFNV\VWHPWKURXJK
WKHGHVLJQHGSRVWV
2WKHUPHDQVLQFOXGHZLNLVWKHEDVLVRIWKHIDPRXVRQOLQHHQF\FORSHGLD:LNLSHGLDSRGFDVWV
DNLQGRIDXGLREORJ566WHFKQRORJ\5HDO6LPSOH6\QGLFDWLRQWKDWDOORZVFRQWHQWVWREH
SXEOLVKHGRQWKH,QWHUQHWIURPRQHWRPDQ\NQRZQDVV\QGLFDWLRQLQWKHSXEOLVKLQJZRUOG
LQ DQ H[WUHPHO\ VLPSOH ZD\ XVLQJ D V\VWHP RI VXEVFULSWLRQ FKDQQHOV RU VRFLDO WDJJLQJ DQG
ERRNPDUNLQJ
$VPHQWLRQHGDERYHWKHPRVWLPSRUWDQWWHFKQRORJLFDOLQQRYDWLRQRI:HELVWRWXUQDZHEVLWH
LQWRDSODWIRUPIRUSURGXFLQJDQGSXEOLVKLQJFRQWHQWVDQGDSSOLFDWLRQVWKDWFRXOGEHGRQHE\DQ\
XVHULQDQH[WUHPHO\VLPSOHZD\DQGZLWKOLWWOHWHFKQLFDONQRZOHGJH7KLVFRQFHSWKDVDOORZHG
WKHH[SORVLRQRIVRFLDODSSOLFDWLRQVFUHDWLYLW\DQGLQQRYDWLRQZLWQHVVHGLQUHFHQW\HDUV
%HIRUHWKHVXFFHVVRIWKH:HEWKHFLUFOHRISHRSOHWKDWDQLQGLYLGXDOFRXOGDWWUDFWWRVKDUHYLHZV
DQGRSLQLRQVZDVOLPLWHGWRSK\VLFDODQGWHPSRUDOVSDFHOLPLWLQJVLJQLFDQWO\VRFLDOLQWHUDFWLRQ
LQIDFWWKHVRFLRORJLFDOFRQFHSWRIQHWZRUNHQYLURQPHQWLVOLPLWHGWRWZRKXQGUHGFRQWDFWV
:LWKWKHHPSRZHUPHQWEURXJKWE\WKH,QWHUQHWHVSHFLDOO\:HEWKURXJKVRFDOOHGVRFLDO
QHWZRUNVWKHOLPLWDWLRQVRISK\VLFDOVSDFHIRUVRFLDOLQWHUDFWLRQVGLVDSSHDUVDQGWKHWHPSRUDO
VSDFHLVPXFKPRUHPDQDJHDEOHGXHWRWKHSRVVLELOLW\RIDV\QFKURQRXVFRPPXQLFDWLRQ7RGD\
VL[RXWRIWHQPRVWYLVLWHGVLWHVRQWKHZHEDUHVRFLDOQHWZRUNVLWHV)DFHERRN7ZLWWHUKLDQG
RWKHUV
7RXQGHUVWDQGWKHLPSOLFDWLRQVRI:HEKHUHDUHVRPHH[DPSOHVRIWKHODWHVW,QWHUQHWHYHQWV
DQGHYROXWLRQV
6RFLDOQHWZRUNLQJ
6RFLDOQHWZRUNLQJLVSDUWRIWKHJOREDONQRZOHGJHLQIUDVWUXFWXUH3KRWRJUDSKVYLGHRVWH[WV
DUWLFOHV RU ZULWWHQ FRPPHQWV SDUWLFLSDWH LQ WKH FUHDWLRQ RI D IUHH PHGLD ZKHUH ZH HQWHU
SHUVRQDOH[SHULHQFHVWKDWPD\VHUYHDVDUHIHUHQFHIRURWKHUVRFLDOQHWZRUNPHPEHUVZLWK
ZKRPZHPD\VKDUHDIQLWLHVDQGLQWHUHVWV2QO\FROOHFWLYHDFWLRQQHWZRUNVFDQGHSOR\WKH
QHFHVVDU\FDSDFLW\IRUPRELOLVDWLRQDQGH[WHQVLRQRIVRFLDOUHODWLRQVUHTXLUHGIRUFUHDWLYH
GHYHORSPHQWLQQHZGLJLWDOWHFKQRORJLHV7KHVHQHWZRUNVHQKDQFHWKHFRPPXQLFDWLRQVNLOOV
RILWVPHPEHUVLQVSDFHDVZHOODVLQWLPHDQGPXOWLSO\LWVHIIHFWZKHQVKDUHGVLPXOWDQHRXVO\
ZLWKRWKHUQHWZRUNV(DFKPHPEHULVDQDFWLYHVLPXOWDQHRXVDQGSHUPDQHQWDFWRULQDV
PDQ\SURSRVDOVDVGHVLUHGPRYLQJIURPSULYDWHWRSXEOLFVSDFHDQGYLFHYHUVDZLWKRXW
LQWHUUXSWLRQ,QWKLVELGLUHFWLRQDOFRPPXQLFDWLRQVFHQDULRDQ\DFWLRQWDNHQE\DPHPEHURI
DVRFLDOQHWZRUNFRXOGJHQHUDWHWKHFUHDWLRQRIDQHZWKRXJKW

1EREKIQIRX
:LNLSHGLD

:LNLSHGLDVHOIGHQHGDVDFROODERUDWLYHHIIRUWRIYROXQWHHUVWRFUHDWHDIUHHHQF\FORSHGLD
LQPDQ\ODQJXDJHVIUHHDQGDFFHVVLEOHWRDOO%DVHGRQZLNLWHFKQRORJ\LWHQDEOHVLWHPVWR
EHZULWWHQUHYLHZHGDQGUHTXHVWHGDQGDOORZVPRGLFDWLRQRIDYDVWPDMRULW\RILWHPVE\
DQ\RQHZLWKDFFHVVWKURXJKDZHEEURZVHU3UHVHQWO\LWGHSHQGVRQWKHQRQSURW:LNLPHGLD
)RXQGDWLRQ6LQFHLWVFRQFHSWLRQLWKDVEHFRPHRQHRIWKHWHQPRVWYLVLWHGZHEVLWHVLQWKH
ZRUOG
<RX7XEH
<RX7XEHLVDZHEVLWHWKDWDOORZVXVHUVWRVKDUHGLJLWDOYLGHRVRYHUWKH,QWHUQHW,WLVYHU\
SRSXODUGXHWRWKHSRVVLELOLW\RIKRVWLQJSHUVRQDOYLGHRVHDVLO\<RX7XEHKRVWVDYDULHW\RI
FOLSVIURPPRYLHV79VKRZVPXVLFYLGHRVDQGKRPHYLGHRVDOWKRXJKXSORDGLQJYLGHRV
ZLWKFRS\ULJKWLVEDQQHGWKLVPDWHULDOH[LVWVLQDEXQGDQFH/LQNVWR<RX7XEHYLGHRVFDQ
DOVREHSODFHGRQEORJVDQGSHUVRQDOZHEVLWHVXVLQJ$3,VRUHPEHGGLQJVRPH+70/FRGH
&RS\OHIW
&RS\OHIWRUSHUPLWWHGFRSLHVLQFOXGHVDJURXSRILQWHOOHFWXDOSURSHUW\ULJKWVFKDUDFWHULVHG
E\UHPRYLQJUHVWULFWLRQVRQGLVWULEXWLRQRUPRGLFDWLRQSURYLGHGWKDWWKHGHULYDWLYHZRUN
UHPDLQVZLWKWKHVDPH,3VFKHPHDVWKHRULJLQDO
7KHXVHRI,&7VWROLQNUHVHDUFKHUVHGXFDWRUVH[WHQVLRQLVWVDQGSURGXFHUJURXSVWRHDFKRWKHUDQG
WRVRXUFHVRIJOREDOLQIRUPDWLRQRUDQ\RWKHUVRXUFHDQGWKHLUUHODWLRQVKLSWRFRPPXQLFDWLRQIRU
GHYHORSPHQWSURYLGHVURRPIRUPDQ\GLIIHUHQWPHDQVDQGDSSURDFKHVSRSXODUPHGLDWUDGLWLRQDO
VRFLDO JURXSV GLUHFW LQWHUSHUVRQDO FRPPXQLFDWLRQ UXUDO UDGLR IRU FRPPXQLW\ GHYHORSPHQW
YLGHRDQGPXOWLPHGLDPRGXOHVIRUIDUPHUWUDLQLQJ
7KURXJKWKHVHFRPPXQLFDWLRQUHVRXUFHVRUHYHQWKURXJKRWKHUEDVLFPHDQVLWLVLPSHUDWLYH
WKDW FRPPXQLFDWLRQ RFFXUV WR SURYLGH WKH QHFHVVDU\ VNLOOV WR LQWHUHVWHG XVHUV LQ RUGHU WR
SURJUHVVFKDQJLQJEDGRUDVVHVVLQJEHVWSUDFWLFHVDQGEHKDYLRUVDQGWRDFKLHYHWKHVXVWDLQDEOH
GHYHORSPHQWRIHDFKRIWKHYDULRXVDFWLYLWLHV
)LQDOO\WKLVSURSRVDOLQFOXGHVDWKLUGVWDJHWKDWFRQVLGHUVHQFRXUDJLQJYDULRXVVXFFHVVIXOUXUDO
LQQRYDWLRQVUHSOLFDEOHLQRWKHUUHJLRQVRUFRPPXQLWLHV7KLVZLOOEHLPSOHPHQWHGWKURXJKFRQWHVWV
RUFRPSHWLWLRQVEHWZHHQLQQRYDWRUVSURYLGLQJLQFHQWLYHVWRRWKHUIDUPHUVDQGGLVVHPLQDWLQJ
LQQRYDWLYHSUDFWLFHVRUH[SHULHQFHV7KHDLPLVWRSURPRWHWKHEHVWOLYHVWRFNDQLPDOKDQGOLQJ
DQGLPSURYHSURFHVVLQJRIUDZPDWHULDOVLQWREHVWTXDOLW\SURGXFWVIURPUXUDODQGXUEDQIDPLOLHV
,QDGGLWLRQWKHVHOHFWHGEHVWDOWHUQDWLYHVZLOOEHUHZDUGHGZLWKFDVKLQFHQWLYHV7KHVWHSVIRU
DFKLHYLQJWKLVVWDJHDUHDVIROORZVH[SORUDWLRQRIHIIHFWLYHDQGHIFLHQWDOWHUQDWLYHVDQG
DZDUHQHVVRILWVDFWRUVWRSDUWLFLSDWHFDOOWRFRPSHWHMXGJHGE\DSDQHOFRPSRVHGE\WKH
VDPHSDUWLFLSDQWVRIWKHVDPHFDOOLQFHQWLYHVIRUWKHEHVWSURSRVDOVGLVVHPLQDWLRQRI
WHFKQRORJLHVDQGHPXODWLRQZLQQLQJDOWHUQDWLYHV7KHZLQQLQJDOWHUQDWLYHVZLOOEHVHFRQGHG
IRUDFRQVLGHUDEOHWLPHLQRUGHUWRVWUHQJWKHQWKHLUZHDNHVWSRLQWVDQGWROHDUQPRUHDERXWWKH
IDFWRUVRIWKHLUVXFFHVV
'SRGPYWMSRW
7KHDLPLVWREXLOGDQHDV\DQGIDVWDFFHVVLQWHUDFWLYHZHEWKDWFDQEHDFFHVVHGE\SHRSOH
OLYLQJLQDUHDVQRWVHUYHGZLWKEURDGEDQG,QIRUPDWLRQPXVWRZTXLFNO\WRDQGIURPDOO
DFWRUVFURVVLQJOLQNLQJDIUPLQJUHMHFWLQJFULWLFLVLQJVKRZLQJFRQWHQWV7KLVUHODWLRQVKLS
RILQWHUFRQQHFWHGVRFLDOFDSLWDOZLOOKHOSWRJHQHUDWHDQGVFDOLQJXSNQRZOHGJH
7KLVWRROLVLQWHQGHGWREHDFRPPXQLFDWLRQEULGJHFRPSLOLQJDYDLODEOHLQIRUPDWLRQIRU
IDUPHUVDUWLVDQVWUDGHUVPDQXIDFWXUHUVVFLHQWLVWVVWXGHQWVDQGVWDNHKROGHUVDOORZLQJWKHP


1EREKIQIRX
WRGHWHUPLQHEXLOGNQRZOHGJHDQGSURWIURPHYHQWXDOUHODWLRQVKLSVDURXQGWKHZRUOGRI
FDPHOLGV
3ULRULW\ZLOOEHJLYHQWRLQIRUPDWLRQDFFHVVWRHQGXVHUVEXLOGLQJD:HEVHUYLQJDVD
SODWIRUPIRULPSURYLQJGLJLWDOOLWHUDF\LQWKRVHSODFHVZKHUHWKHGLJLWDOJDSVWLOOH[LVWV
:LWK WKH FXUUHQW WHFKQRORJ\ WKH ORFDWLRQ RI WKH VLWH RSHUDWRU LV QRW LPSRUWDQW DOWKRXJK
WKLVSHUVRQPXVWKDYHDKLJKOHYHORILQIRUPDWLRQXQGHUVWDQGLQJWROHUDQFHQRQJOREDOLVHG
XQLYHUVDOLW\ HWF 7KH RSHUDWRU VKRXOG EH DEOH WR PDNH D VHOHFWLRQ RI FRS\ULJKW DQG
FRS\OHIWGRFXPHQWVWRDOORZLWVSXEOLFDWLRQDQGFRS\IURPWKH,QWHUQHWRURQO\IRUUHDGLQJ
ORRN IRU OLQNV WUHDWLQJ LVVXHV UHODWHG RU DVVRFLDWHG ZLWK FDPHOLGV JXLGH XVHUV WR
VSHFLDOLVHG EORJV DQG EORJJHUV FRQYHQH IRUXPV DQG GLDORJXHV EXLOG VSHFLDOLVHG
FRPPXQLFDWLRQZLWKLQVRFLDOQHWZRUNV7ZLWWHU)DFHERRFN+LDPRQJRWKHUVUHVSRQG
ORFDWHRUGHUDQGGLVSOD\LQIRUPDWLRQRQFDPHOLGVDQGWRKDYHVNLOOVWRDVVHVVTXDOLWDWLYH
DQGTXDQWLWDWLYHWRSLFVRISURMHFWVLQYROYLQJFDPHOLGVDQGLQSDUWLFXODUWRPDLQWDLQDFORVH
UHODWLRQVKLSEHWZHHQKXPDQVDQGFDPHOLGV(VVHQWLDOO\WRVXVWDLQWKHH[LVWLQJLQWHUDFWLRQ
EHWZHHQFDPHOLGVDQGEUHHGHUVIDUPHUVWUDGHUVEX\HUVPDQXIDFWXUHUVDQGUHVHDUFKHUVZLWK
DVHQVHRIKXPRXUDQGSRVLWLYHQHVV
(QFRXUDJHVXFFHVVIXOYHQWXUHVVXSSRUWDQGVWUHQJWKHQWKHPDVZHOOWROHDUQIURPWKHPDQG
V\VWHPDWLVHWKHPHDQVRIWKHLUVXFFHVVWRSURPRWHUHSOLFDWLRQDQGVFDOLQJXS
6XPPDULVLQJWKHIXQGDPHQWDODLPLVWREXLOGV\VWHPLVHDQGPDQDJHNQRZOHGJHFROOHFWLYHO\
LQRUGHUWRGLVWULEXWHDQGVRFLDOLVHLWLQVFDOHVFDOLQJXSZLWKWKHQDODLPRIGHYHORSLQJD
VXVWDLQDEOHSURGXFWLYHDQGLQFOXVLYHDOWHUQDWLYHVXFKDVFDPHOLGFRQVHUYDWLRQ
,)$'VFRQWLQXHGLQYROYHPHQWZLWKVLPSOHWRROVLPSURYLQJWKHTXDOLW\RIOLIHRIWKHYDULRXV
DFWRUVLQSDUWLFXODUUXUDOFRPPXQLWLHVDQGWKHLPSOHPHQWDWLRQRIWKHDERYHGHVFULEHGDFWLYLWLHV
ZLOONHHSDOLYHLQIRUPDWLRQDQGFRPPXQLFDWLRQEHWZHHQWKHYDULRXVHGLWLRQVRIWKH:RUOG
&RQJUHVVRQ&DPHOLGVDQGVHUYHWRFRQVHUYH6RXWK$PHULFDQFDPHOLGVDQGWKHLUXQLYHUVH

1EREKIQIRX
4VIPMQMREV]WXYH]SJFSH]QIEWYVIQIRXWSREPTEGEWMR
RSVXLIVR-XEP]
$7DPEXULQL$%ULJDQWL$*LRUJLDQG$6DQGUXFFL
'HSDUWPHQWRI$QLPDO6FLHQFH8QLYHUVLW\RI0LODQYLD&HORULD0LODQ,WDO\
DOEHUWRWDPEXULQL#XQLPLLW
,7$/3$&$$VVRFLDWLRQYLD9HFFKLDGL6DQ*HUYDVLR0RQWHFDVWHOOR3,,WDO\
*H6'L0RQW8QLYHUVLW\RI0LODQYLD&HORULD0LODQ,WDO\
%FWXVEGX
7KHVWXG\LQYROYHGIDUPVLQQRUWKHUQ,WDO\DQGDOSDFDVRIWKH+XDFD\DW\SH(LJKWHHQ
PDOHVDQGIHPDOHVZHUHPHDVXUHGIRUKHLJKWDWWKHZLWKHUVKHDUWJLUWKDQGKLSZLGWK,QHDFK
IDUPDTXHVWLRQQDLUHZDVOOHGRXWWRJDWKHULQIRUPDWLRQRQIDUPFKDUDFWHULVWLFVDQGIHHGLQJ
VWUDWHJLHV7KHIDUPVKDGRQDYHUDJHKDRISDVWXUHODQGDQGUHDUHGDOSDFDV
2QDYHUDJHHDFKIDUPKDGPDOHV'XULQJZLQWHURURQUDLQ\GD\VDOSDFDVUHFHLYHGRQ
DYHUDJHNJGRIFRPPHUFLDOKD\DQGNJGFRQFHQWUDWH7KHVL]HRIWKHIDUPV
ZDVYHU\VPDOODQGWKHDOSDFDEXVLQHVVZDVQRWWKHSULPDU\VRXUFHRILQFRPH7KHDOSDFDVZHUH
\HDUVROGIHPDOHPDOH2QDYHUDJHWKHKHLJKWDWWKHZLWKHUVZDV
FPWKHKHDUWJLUWKZDVFPDQGKLSZLGWKZDVFP6RPHUHJUHVVLRQ
DQDO\VHV ZHUH SHUIRUPHG KHDUW JLUWK FP ZLWKHU KHLJKW FP U
KLSZLGWKFP ZLWKHUKHLJKWFPU KHDUWJLUWKFP KLS
ZLGWKFPU ,QFRQFOXVLRQWKHUHDUHJRRGRSSRUWXQLWLHVWRLPSURYHDOSDFD
IDUPLQJPDQDJHPHQWLQQRUWKHUQ,WDO\SDUWLFXODUO\LQWHUPVRIIHHGLQJDQGHQYLURQPHQWDOIDFWRUV
DIIHFWLQJDOSDFDJURZWK
.H\ZRUGVDOSDFDKXDFD\DERG\PHDVXUHPHQWVIDUPPDQDJHPHQW
-RXVSHYGXMSR
0RUHWKDQRIWKH3HUXYLDQFDPHOLGSRSXODWLRQLVORFDWHGLQWKH$QGHV&HUYDQWHVHWDO
,Q,WDO\WKHUHDUHIHZHUWKDQDOSDFDIDUPVDIOLDWHGWRWKH,WDOLDQ2IFLDO%UHHGHU
$VVRFLDWLRQ,WDOSDFDWKH\DUHYHU\VPDOOVL]HIDUPVJHQHUDOO\GLVWULEXWHGLQPDUJLQDO
DUHDV1RGDWDDUHDYDLODEOHRQIDUPPDQDJHPHQWRURQERG\PHDVXUHPHQWVRI,WDOLDQ$OSDFDV
7KHDLPRIWKHVWXG\ZDVWRREWDLQLQIRUPDWLRQDERXWDOSDFDIDUPPDQDJHPHQWLQQRUWKHUQ,WDO\
DQGWRFROOHFWERG\PHDVXUHPHQWVRIDQLPDOV
1EXIVMEPWERHQIXLSHW
$WRWDORIIDUPVZHUHFKRVHQLQQRUWKHUQ,WDO\IURPWKH,WDOSDFDIDUPHUOLVW(DFKIDUPZDV
YLVLWHGRQFHLQWKHPRUQLQJEHWZHHQ-XQHDQG6HSWHPEHU'XULQJIDUPYLVLWVDTXHVWLRQQDLUH
ZDVOOHGRXWWRFROOHFWLQIRUPDWLRQDERXWQXPEHUDQGVH[RIDQLPDOVKRXVLQJEDUQDQGSDGGRFN
GHVLJQIHHGLQJV\VWHPFRQFHQWUDWHXVHSDVWXUHDUHDVGLVHDVHVDQGIDUPODERXU
%RG\PHDVXUHPHQWVZHUHSHUIRUPHGRQWKHZKROHKHUGDQGLQFOXGHGZLWKHUKHLJKW:+KHDUW
JLUWK+*DQGKLSZLGWK+:3UHJQDQF\HIIHFWZDVQRWFRQVLGHUHG5HJUHVVLRQDQDO\VHVZHUH
SHUIRUPHGEHWZHHQERG\PHDVXUHPHQWSDUDPHWHUV&RDWFRORXURIDOODQLPDOVZDVUHFRUGHGE\
GLJLWDOSLFWXUHVDQGFOXVWHUHGDVVXJJHVWHGE\,WDOSDFD

1EREKIQIRX
)DUPVL]HZDVDOZD\VYHU\VPDOODQGDOSDFDIDUPEXVLQHVVZDVQRWDSULPDU\VRXUFHRILQFRPH
$OOWKHIDUPHUVUHIHUUHGWRGLIFXOWLHVLQEUHPDUNHWLQJ
7KHPDLQUHVXOWVIRUWKHQXPEHURIDQLPDOVLQIDUPVDUHVXPPDULVHGLQ7DEOH2QDYHUDJHHDFK
IDUPUHDUHGDOSDFDVPDOHVSULPLSDURXVIHPDOHVVHFRQGLSDURXVIHPDOHV
PXOWLSDURXVIHPDOHVDQG\RXQJIHPDOHV)LIW\SHUFHQWRIWKHIDUPVUHDUHGRWKHUDQLPDOV
LQSDUWLFXODUOODPDVDQJRUDDQGPRKDLUJRDWVWKLVUHVXOWVXJJHVWVWKDWPDQ\VPDOOIDUPVPDLQWDLQ
WKHVHDQLPDOVIRUDJULWRXULVPUHDVRQV
)DUPVKDGRQDYHUDJHKDRISDVWXUHODQG'XULQJWKHJUD]LQJVHDVRQDOOWKHDQLPDOVZHUH
PDLQWDLQHGRQQDWXUDOSDVWXUHVRULQROLYHHOGV'XULQJZLQWHURURQUDLQ\GD\VLQDOOWKHIDUPV
DOSDFDVUHFHLYHGRQDYHUDJHNJGRIFRPPHUFLDOKD\DQGNJGRIFRPPHUFLDO
FRQFHQWUDWH7ZRIDUPVXVHGFXVWRPLVHGFRQFHQWUDWHVDQGWKHRWKHUIDUPVXVHGDFRPPHUFLDO
FRQFHQWUDWHIRUVKHHS
1RIDUPVKDGDQ\NLQGRIDJULFXOWXUDOPDFKLQH7KUHHIDUPVKDGEDUQVIRUWKHZLQWHUVHDVRQEXW
DQLPDOVZHUHDOZD\VDOORZHGWRJUD]H1RDQLPDOGLVHDVHVZHUHUHFRUGHG
%RG\PHDVXUHPHQWVZHUHSHUIRUPHGRQIHPDOHVDQGPDOHVIHPDOHVVKRZHGRQDYHUDJH
7DEOHODUJHUVL]HWKDQPDOHVEXWDQDJHHIIHFWFRXOGQRWEHH[FOXGHG,QIDFWPDOHVZHUH
8EFPI(MWXVMFYXMSRSJERMQEPWMRXLIJEVQWR!
4VMQMTEVSYW
7IGSRHMTEVSYW 1YPXMTEVSYW
=SYRKJIQEPIW
1EPIW
8SXEP
3XLIVW
1IER
7(

3XLIVWQEPPVYQMRERXWMRJEVQPPEQEERKSVEQSLEMV
8EFPI&SH]QIEWYVIQIRXWSJEPTEGEWSRXLIQSRMXSVIHJEVQW
%PPERMQEPW
R!
*IQEPIW
R!
1EPIW
R!

QIER
7(
QMRMQYQ
QE\MQYQ
QIER
7(
QMRMQYQ
QE\MQYQ
QIER
7(
QMRMQYQ
QE\MQYQ
;MXLIVLIMKLX
GQ
,IEVXKMVXL
GQ
,MT[MHXL
GQ
%KI
]IEVW

1EREKIQIRX
\RXQJHUWKDQIHPDOHVYVUHVSHFWLYHO\:LWKHUKHLJKWZDVFPIRU

IHPDOHVDQGIRUPDOHV
6RPHUHJUHVVLRQHTXDWLRQVZHUHSHUIRUPHGWRVWXG\JHQGHUHIIHFW
5HJUHVVLRQEHWZHHQ+*DQG:+GLGQRWVKRZDQ\JHQGHUHIIHFW)LJXUH
0DOHV
KHDUWJLUWKFP ZLWKHUKHLJKWFP
)HPDOHV
KHDUWJLUWKFP ZLWKHUKHLJKWFP
$OODQLPDOV KHDUWJLUWKFP ZLWKHUKHLJKWFP
Q U
Q U
Q U

5HJUHVVLRQEHWZHHQ+3DQG:+VKRZHGGLIIHUHQWFRHIFLHQWVLQPDOHVDQGIHPDOHV)LJXUH
LQSDUWLFXODUIHPDOHVVKRZHGDORZHUDELOLW\WKDQPDOHVWRLQFUHDVHKLSZLGWKDVZLWKHUKHLJKW
JURZV
5HJUHVVLRQHTXDWLRQVZHUH
0DOHV
KLSZLGWKFP ZLWKHUKHLJKWFP
)HPDOHV
KLSZLGWKFP ZLWKHUKHLJKWFP
$OODQLPDOV KLSZLGWKFP ZLWKHUKHLJKWFP
Q U
Q U
Q U

5HJUHVVLRQEHWZHHQ+*DQG+3)LJXUHGLGQRWVKRZGLIIHUHQWFRHIFLHQWVLQPDOHVDQG

IHPDOHV5HJUHVVLRQHTXDWLRQVZHUH
0DOHV
KHDUWJLUWKFP KLSZLGWKFP
)HPDOHV
KHDUWJLUWKFP KLSZLGWKFP
$OODQLPDOV KHDUWJLUWKFP KLSZLGWKFP

+HDUWJLUWKFP

)HPDOHV
0DOHV
/LQHDLUIHPDOHV
/LQHDLUPDOHV
Q U
Q U
Q U

)HPDOHV\ [
5

0DOHV\ [
5

:LWKHUKHLJKWFP
*MKYVI6IKVIWWMSRFIX[IIRLIEVXKMVXLERH[MXLIVLIMKLXJSVJIQEPIWERHQEPIW

1EREKIQIRX

)HPDOHV
0DOHV
/LQHDLUIHPDOHV
/LQHDLUPDOHV
+LSZLGWKFP

)HPDOHV\ [
5

0DOHV\ [
5

:LWKHUKHLJKWFP
*MKYVI6IKVIWWMSRFIX[IIRLMT[MHXLERH[MXLIVLIMKLXJSVJIQEPIWERHQEPIW
)RUFRDWFRORXUVDOSDFDVZHUHFOXVWHUHGLQJURXSVZKLWHUHGEODFN7KHPRVWIUHTXHQWFRDW

FRORXUZDVUHGRIWRWDOSDUWLFXODUO\IRUIHPDOHV%RG\PHDVXUHPHQWVVKRZHGRQO\VPDOO
GLIIHUHQFHVDPRQJWKHFRORXUJURXSV7DEOH

+HDUWJLUWKFP

)HPDOHV
0DOHV
/LQHDLUIHPDOHV
/LQHDLUPDOHV

)HPDOHV\ [
U

0DOHV\ [
U

+LSZLGWKFP
*MKYVI6IKVIWWMSRFIX[IIRLIEVXKMVXLERHLMT[MHXLJSVJIQEPIWERHQEPIW

1EREKIQIRX
8EFPI&SH]QIEWYVIQIRXWSJEPTEGEWGPYWXIVIHJSVGSEXGSPSYVW
R
*IQEPIW
1EPIW
[LMXI
FPEGO
VIH
[LMXI
FPEGO
VIH

;MXLIVLIMKLXGQ
,IEVXKMVXLGQ
,MT[MHXLGQ
QIER
7(
QIER
7(
QIER
7(

'SRGPYWMSRW
%RG\PHDVXUHPHQWVFRXOGEHDXVHIXOWRROIRUDOSDFDIDUPHUVWRPRQLWRUJURZWKUDWHHVSHFLDOO\
LQ\RXQJDQLPDOV3UHOLPLQDU\UHVXOWVRIWKLVVWXG\VKRZVRPHVLJQLFDQWFRUUHODWLRQVEHWZHHQ
ZLWKHUKHLJKWKHDUWJLUWKDQGKLSZLGWKLQDOSDFD2QWKHRWKHUKDQGWKHUHDUHJRRGRSSRUWXQLWLHVWR
LPSURYHDOSDFDPDQDJHPHQWLQQRUWKHUQ,WDO\SDUWLFXODUO\LQWHUPVRIIHHGLQJDQGHQYLURQPHQWDO
IDFWRUVWKDWFDQDIIHFWDOSDFDJURZWK
%GORS[PIHKIQIRXW
7KH DXWKRUV DUH JUDWHIXO WR 'U 6WHIDQR )HQRWWL IRU FROOHFWLQJ GDWD DQG WR DOO IDUPHUV IRU
FROODERUDWLRQ
6IJIVIRGIW
&HUYDQWHV,0$3pUH]&DEDO50RUDQWH$%XUJRV&6DOJDGR%1LHWR)*R\DFKHDQG-3*XWLpUUH]
*HQHWLF SDUDPHWHUV DQG UHODWLRQVKLSV EHWZHHQ EUH DQG W\SH WUDLWV LQ WZR EUHHGV RI 3HUXYLDQ DOSDFDV 6PDOO
5XPLQDQW5HVHDUFK
,WDOSDFD$VVRFLD]LRQH,WDOLDQD$OOHYDWRUL$OSDFD$YDLODEOHDWKWWSZZZLWDOSDFDFRP$FFHVVHG6HSWHPEHU


,IEPXL
,IEPXL
3VXLSTEIHMGTVSFPIQWMRPPEQEWERHEPTEGEWGPMRMGEPERH
VEHMSPSKMGEPEWTIGXW
,*XQVVHU
/$5(80XQLFK*HUPDQ\,ORQD*XQVVHU#WRQOLQHGH
%FWXVEGX
/ODPDVDQGDOSDFDVVKRZRQO\UHGXFHGVLJQVRISDLQLQFDVHVRIRUWKRSDHGLFSUREOHPV)RUWKDW
UHDVRQHDUO\LQGLFDWLRQVRIRUWKRSDHGLFSUREOHPVPLJKWEHRYHUORRNHG,QVRPHFDVHVRUWKRSDHGLF
SUREOHPVFRXOGEHLQKHULWHG;UD\VRIOODPDVDQGDOSDFDVZHUHDQDO\VHGIRUSUREOHPVLQ
WKHUHJLRQRIWKHVSLQHDQGWKHOHJV7KHUDGLRJUDSKVZHUHWDNHQDVDGLDJQRVWLFDLGLQSDWLHQWV
RUZHUHPDGHIRUVFLHQWLFSXUSRVHVIURPFDUFDVVHVRUSDUWVRILW7KHUHVXOWVUHYHDOHGSUREOHPV
ZKLFK DUH VLPLODU LQ RWKHU GRPHVWLF VSHFLHV VXFK DV IUDFWXUHV MRLQW LQIHFWLRQ RVWHRSRURVLV
ULFNHWVSDWHOODOX[DWLRQVSRQG\ORVLVFDUSXVDQJXODUGHIRUPLW\DQGPDOIRUPDWLRQRIWKHHOERZ
0RUHVSHFLFWRWKHDQDWRP\RIFDPHOLGVDUHWKHVXEOX[DWLRQRIWKHYHUWHEUDRIWKHFHUYLFDOVSLQH
DQGSUREOHPVZLWKWKHSDVWHUQ([DPSOHVRIWKHVHQGLQJVZLOOEHSUHVHQWHGDQGGLVFXVVHG
.H\ZRUGVOHJVVSLQHUDGLRJUDSKZHOIDUH
-RXVSHYGXMSR
0RUHDQGPRUHDOSDFDVDQGOODPDVDUHNHSWDVFRPSDQLRQDQLPDOVRULQWKHFDVHRIDOSDFDV
PDLQO\IRUEUHSURGXFWLRQ6LQFHRZQHUVDUHTXLWHIUHTXHQWO\XQDZDUHRIWKHIDFWWKDW6RXWK
$PHULFDQFDPHOLGVVKRZRQO\UHGXFHGVLJQVRISDLQHDUO\LQGLFDWLRQVRIRUWKRSDHGLFSUREOHPV
RURWKHULQMXULHVPLJKWEHRYHUORRNHG,WVKRXOGEHQRWHGKRZHYHUWKDWVRPHRIWKHVHRUWKRSDHGLF
SUREOHPVPLJKWEHLQKHULWHG7KHNQRZOHGJHRISRVVLEOHRUWKRSDHGLFSUREOHPVDQGWKHLUFOLQLFDO
DVSHFWVLVWKHUHIRUHTXLWHLPSRUWDQWIRUDQLPDOZHOIDUHUHDVRQV
1EXIVMEPWERHQIXLSHW
;UD\VRIDOSDFDVDQGOODPDVZHUHWDNHQDQGDQDO\VHGIRUSUREOHPVLQWKHUHJLRQRIWKHVSLQH
DQGWKHOHJV0DQ\RIWKHVHUDGLRJUDSKVKDGEHHQWDNHQDVDGLDJQRVWLFDLGLQSDWLHQWVVKRZLQJ
DEQRUPDOSRVLWLRQLQWKHVHDQDWRPLFDOUHJLRQVRURWKHUSUREOHPVOLNHVZHOOLQJVRUODPHQHVV7KH
PDMRULW\KRZHYHUKDGEHHQPDGHIRUVFLHQWLFSXUSRVHVIURPFDUFDVVHVRUSDUWVWKHUHRI7KH
LQIRUPDWLRQDERXWFOLQLFDOVLJQVOLNHVZHOOLQJRUODPHQHVVKDGEHHQFROOHFWHGE\WKHDXWKRURU
KDGEHHQUHSRUWHGE\WKHRZQHU
7KHUDGLRJUDSKVUHYHDOHGSUREOHPVZKLFKDUHVLPLODULQRWKHUGRPHVWLFVSHFLHVVXFKDVOHJ
IUDFWXUHV LQ WKH UHJLRQ RI WKH ORQJ ERQHV 6RPH DQLPDO KDG MRLQW LQIHFWLRQV DQG VRPH KDG
DUWKURVLV2WKHUQGLQJVZHUHVLJQVRIRVWHRSRURVLVRUULFNHWV)XUWKHUSUREOHPVZHUHFDXVHG
E\PDOIRUPDWLRQRIWKHHOERZRUWKHLQFRUUHFWSRVLWLRQRIWKHSDWHOOD.QRFNNQHHVZHUHIRXQG
UDWKHU IUHTXHQWO\ DV D UHVXOW RI WKH LQFRQJUXHQW FORVXUH RI WKH JURZWK SODWH RI WKH IRUHDUP
2FFDVLRQDOO\VLJQVRIVSRQG\ORVLVRIWKHVSLQHZHUHVHHQ*XQVVHUHWDO6HHDOVR)RZOHU
0RUH VSHFLF WR WKH DQDWRP\ RI FDPHOLGV DUH WKH VXEOX[DWLRQ RI WKH YHUWHEUD RI WKH
FHUYLFDOVSLQHDQGSUREOHPVZLWKWKHSDVWHUQ*XQVVHU

,IEPXL
7YFPY\EXMSRSJXLIZIVXIFVESJXLIGIVZMGEPWTMRI
6RXWK$PHULFDQFDPHOLGV6$&VKDYHDUDWKHUORQJQHFN7KHOHQJWKRIWKHQHFNFRUUHVSRQGV
WRWKHOHQJWKRIWKHEDFNH[FOXGLQJWKHSHOYLV7KHFHUYLFDOVSLQHKDVUDWKHUORQJYHUWHEUDV
ZKLFKDUWLFXODWHZLWKWKHLUYHUWHEUDOSURFHVVHVDWERWKVLGHVZLWKWKHYHUWHEUDVIROORZLQJEHKLQG
,QDGGLWLRQVWURQJOLJDPHQWVZKLFKLQVHUWDWWKHGRUVDOSDUWRIWKHYHUWHEUDVFRQQHFWWKHFHUYLFDO
VSLQHWRWKHWKRUDFLFVSLQH$PXVFXODUV\VWHPDORQJWKHQHFNSURYLGHVEDODQFHZKLOHZDONLQJ
DQGDOORZVYHU\H[LEOHPRYHPHQWVWRHDFKVLGHRIWKHERG\,QFDVHRIDFFLGHQWVWKHVHERQ\
DUWLFXODWLRQVRIWKHYHUWHEUDPD\IUDFWXUH,IWKHDUWLFXODWLRQRIRQHVLGHKDVIUDFWXUHGWKHUHVXOW
LVDKRUL]RQWDOVXEOX[DWLRQ
,QVRPH6$&VZHKDYHVHHQDPDOIRUPDWLRQRIWKHYHUWHEUDODUWLFXODWLRQVHH)LJXUH7KH
OHQJWK RI WKH DUWLFXODWLRQ ZDV QRW V\PPHWULF DQG RQO\ RQH VLGH KDG JRRG FRQWDFW ZLWK WKH
YHUWHEUDOSURFHVV,QWKHVHFDVHVWKHKRUL]RQWDOVXEOX[DWLRQFDQHDVLO\RFFXU,QERWKRIWKHVH
FDVHVWKHFOLQLFDOVLJQVDUHDH[XUHWRRQHVLGHPRVWO\LQWKHPLGUHJLRQRIWKHQHFN)LJXUH
1HXURORJLFDOVLJQVDUHQRWREYLRXVRUKDUGO\QRWLFHDEOH,IERWKDUWLFXODWLRQVKDGIUDFWXUHGWKH
UHVXOWZRXOGEHDVXEOX[DWLRQRUOX[DWLRQLQDOOGLUHFWLRQVZLWKJUHDWHUQHXURORJLFDOGDPDJH
3UHVXPDEO\WKHPDOIRUPDWLRQRIWKHYHUWHEUDLVDKHULWDEOHGHIHFW
4VSFPIQW[MXLXLITEWXIVRNSMRX
6LQFH6$&EHORQJWRWKHW\ORSRGDWKHVWUXFWXUHRIWKHIRRWGLIIHUVIURPWKDWRIRWKHUGRPHVWLF
DQLPDOVOLNHUXPLQDQWV7KHIRRWRIDUXPLQDQWWRXFKHVWKHJURXQGZLWKWKHWKLUGSKDODQ[RI
HDFKRIWKHWZRWRHV(DFKWRHLVFRYHUHGZLWKDFODZ7KHIRRWRIWKHFDPHOLGRQWKHRWKHU
KDQGWRXFKHVWKHJURXQGZLWKWKHVHFRQGDQGWKLUGSKDODQ[RIWKHWRHV7KHWRHVDUHHTXLSSHG
ZLWKDGLJLWDOFXVKLRQ:DONLQJRQWZRWRHVUHTXLUHVZHOOEDODQFHGV\PPHWULFDOWRHV7KHWRHV
DUWLFXODWHLQWKHSDVWHUQMRLQWZLWKWKHPHWDFDUSDOPHWDWDUVDOERQH,QFDVHRIDQLQFRQJUXHQFH
LQRQHRIWKHVHERQHVWKHOHQJWKDQGGLUHFWLRQRIWKHWRHVZLOOEHGLIIHUHQWVHH)LJXUH7KH
UHVXOWLVDVWUDLQRQWKHDUWLFXODWLRQDQGWHQGRQVOHDGLQJWRFKURQLFLUULWDWLRQDQGDUWKURVLV,Q
IDFWWKHVHPDOIRUPDWLRQVDUHUDUHO\GLDJQRVHGLQQHZERUQDOSDFDVDQGOODPDV7KHUHDVRQIRU
*MKYVI4VITEVEXMSRSJXLIXLERHXLGIVZMGEPZIVXIFVE%QEPJSVQEXMSRSJXLIZIVXIFVEEW]QQIXVMGEVXMGYPEXMSR
TVSGIWW EPTEGE]IEV

,IEPXL
*MKYVI%PTEGEWYFPY\EXMSRSJEZIVXIFVESJXLIRIGO
*MKYVI%FRSVQEPJSVQSJXLIXSIPPEQE

,IEPXL
WKLVLVWKHUHODWLYHO\VPDOOIRRWRIWKHVHDQLPDOV'XULQJWKHJURZWKSHULRGWKHLQFRQJUXHQFHRI
WKHWRHVEHFRPHVPRUHSURQRXQFHG:KHQWKLVLVQDOO\QRWLFHGWKHRZQHUPLJKWPLVLQWHUSUHW
WKHLQFRQJUXHQFHDVUHVXOWLQJIURPDQDFFLGHQWZLWKIUDFWXUH
$QRWKHU QGLQJ LQ WKH SDVWHUQ MRLQW LV DQ LQVWDELOLW\ RI WKH SDVWHUQ MRLQW ,Q VXFK FDVHV WKH
DQJXODWLRQRIWKHSKDODQ[RIRQHRIWKHWRHVLVOHVVWKDQDERXWGHJUHHVWRWKHJURXQG:LWKLQ
UHODWLYHO\OLWWOHWLPHVRPHPRQWKVWKHSDVWHUQMRLQWPD\JHWZHDNHUXQWLOLWWRXFKHVWKHJURXQG
K\SHUH[WHQVLRQRIWKHIHWORFNVHH)LJXUH7KLVOHDGVWRDQRYHUVWUDLQRIWKHWHQGRQVDQG
DUWLFXODWLRQ UHVXOWLQJ LQ SDLQ FDXVHG E\ DUWKURVLV DQG FKURQLF LUULWDWLRQ RI WKH WHQGRQV VHH
)LJXUH0RVWDIIHFWHG6$&VVKRZWKHVHSUREOHPVELODWHUDOO\VWDUWLQJDWDERXW\HDUV$
K\SHUH[WHQVLRQPD\DOVRDULVHIURPXQLODWHUDORYHUVWUHVVLQJRIWKHIHWORFNIRUH[DPSOHDIWHU
DPSXWDWLRQRIRQHOHJ7KHUHDVRQIRUDELODWHUDOK\SHUH[WHQVLRQLVXQFOHDU6LQFHVXFKSUREOHPV
KDYHEHHQIRXQGZLWKLQQHDUUHODWLYHVDQLQKHULWHGFRPSRQHQWPD\EHOLNHO\,WKDVEHHQDUJXHGLQ
WKHSDVWWKDWHDUO\FDVWUDWLRQRIPDOHVPD\DOVRUHVXOWLQK\SHUH[WHQVLRQRIWKHIHWORFN+RZHYHU
WKLVRSLQLRQFDQQRWEHPDLQWDLQHGVLQFHVXFKSUREOHPVDOVRH[LVWLQIHPDOHV
*MKYVI,]TIVI\XIRHIHJSSXPPEQE

,IEPXL
*MKYVI6EHMSKVETLEVXLVSWMWL]TIVI\XIRHIHJIXPSGOPPEQE
'SRGPYWMSR
2UWKRSDHGLFSUREOHPVLQOODPDVDQGDOSDFDVGRQRWGLIIHUPXFKIURPWKHSUREOHPVNQRZQLQ
RWKHUGRPHVWLFDQLPDOV+RZHYHUWKHVSHFLFDQDWRP\LQWKHUHJLRQRIWKHQHFNDQGIRRWFDQ
OHDGWRFKDUDFWHULVWLFSUREOHPVLQ6$&V)RUWKHSXUSRVHVRIDQLPDOZHOIDUHLWLVLPSRUWDQWWR
LQIRUPRZQHUVDERXWSRVVLEOHSDLQLQGXFLQJRUWKRSDHGLFSUREOHPVLQWKHLUDQLPDOV8SWRQRZLW
LVQRWFHUWDLQZKLFKRIWKHRUWKRSDHGLFSUREOHPVDUHLQKHULWDEOH1HYHUWKHOHVVLWLVLPSRUWDQWWR
FKHFNEUHHGLQJPDOHVIRURUWKRSDHGLFDEQRUPDOLWLHVXVLQJFOLQLFDODQGUDGLRORJLFDOWHFKQLTXHV
6IJIVIRGIW
)RZOHU0XUUD\(0HGLFLQHDQGVXUJHU\RI6RXWK$PHULFDQ&DPHOLGV$X,RZD6WDWH8QLYHUVLW\3UHVV
$PHV,$86$
*XQVVHU,+:LHVQHUDQG7+lQLFKHQ.UDQNKHLWHQ'LVHDVHV,Q0*DXO\HG1HXZHOWNDPHOLGHQ3DUH\
9HUODJ%HUOLQ*HPDQ\SS
*XQVVHU,3UREOHPVLQNHHSLQJOODPDVDQGDOSDFDVLQ*HUPDQ\QG&RQIHUHQFHRI,62&$5''MHUED7XQLVLD
0DUFK

,IEPXL
(MEVVLIEKIRMG)WGLIVMGLMEGSPMWXVEMRWMWSPEXIHJVSQ
RISREXEP4IVYZMEREPTEGEW:MGYKRETEGSW [MXLHMEVVLIE
'&LG&0DUWtQ(VSDGD/0DWXUUDQR$*DUFtD//XQDDQG55RVDGLR
'HSDUWDPHQWR GH 6DQLGDG $QLPDO )DFXOWDG GH 9HWHULQDULD 8QLYHUVLGDG &RPSOXWHQVH GH
0DGULG$YGD3XHUWDGH+LHUURVQ0DGULG6SDLQOFLG#YHWXFPHV
8QLGDG GH %LRORJLD \ *HQHWLFD 0ROHFXODU 'HSDUWDPHQWR GH 6DOXG $QLPDO )DFXOWDG GH
0HGLFLQD9HWHULQDULD8QLYHUVLGDG1DFLRQDO0D\RUGH6DQ0DUFRV$Y&LUFXQYDODFLRQ
6DQ%RUMD/LPD3HUX
%FWXVEGX
1HRQDWDO GLDUUKHD LV D FRPSOH[ LQIHFWLRXV GLVHDVH FDXVHG E\ WKH LQWHUDFWLRQ RI DGYHUVH
HQYLURQPHQWDOFRQGLWLRQVGHFLHQWLPPXQHVWDWXVRIQHRQDWHVDQGLQIHFWLRQRIHQWHURSDWKRJHQV
$YDULHW\RIPLFURRUJDQLVPVFDQFDXVHGLDUUKHDLQDOSDFDQHRQDWHVLQFOXGLQJEDFWHULDYLUXVHV
DQG SDUDVLWHV ,Q WKH V LVRODWLRQ RI (VFKHULFKLD FROL VWUDLQV FDSDEOH RI LQGXFLQJ XLG
DFFXPXODWLRQLQWKHLQWHVWLQDOORRSDVVD\LQDOSDFDDQGOODPDQHRQDWHVZDVGHVFULEHG+RZHYHU
YLUXOHQFHIDFWRUVRI(FROLDVVRFLDWHGZLWKQHRQDWDOGLDUUKHDLQ6RXWK$PHULFDQFDPHOLGV6$&
KDYHEHHQSRRUO\FKDUDFWHULVHG,QWKLVVWXG\(FROLLVRODWHVIURPFULDVRIDOSDFDSHU
DQLPDOZLWKGLDUUKHDZHUHDQDO\VHGIRUWKHSUHVHQFHRIYLUXOHQFHIDFWRUJHQHVRIGLDUUKHDJHQLF
(FROLE\3&57KHLQYHVWLJDWHGJHQHVZHUHYHURWR[LQYWDQGYWLQWLPLQHDHDQGEXQGOH
IRUPLQJSLOLEISJHQHV7KHDQLPDOVEHORQJHGWRVL[GLIIHUHQWKHUGVRIWKH$QGHDQUHJLRQRI
&X]FR3HUXDQGZHUHEHWZHHQWZRDQGQLQHZHHNVROG7ZRFDWHJRULHVRIGLDUUKHDJHQLF(
FROLVWUDLQVZHUHGHWHFWHG(QWHURSDWKRJHQLF(FROL(3(&DQG9HURWR[LQSURGXFLQJ(FROL
97(&VWUDLQV2XWRIWKHDQDO\VHGVWUDLQVZHUH(3(&HDHDQGEIS
ZHUHDW\SLFDO(3(&HDHEXWEISQHJDWLYHDQGZHUH97(&2QO\RI
WKH97(&VWUDLQVZHUHHDHSRVLWLYHRQHHDHYWDQGWZRHDHYW$OORIWKHRWKHU97(&
VWUDLQVZHUHRQO\YW,QIHFWLRQZLWKGLDUUKHDJHQLF(FROLVWUDLQVZDVGHWHFWHGLQDOOWKH
KHUGV7KHUHVXOWVLQGLFDWHWKDWWKHVHSDWKRJHQLFVWUDLQVDUHFLUFXODWLQJDPRQJGRPHVWLF6$&
SUREDEO\DWKLJKUDWHVLQWKH$QGHDQUHJLRQRI3HUX7KHUHIRUH(3(&DQG97(&VWUDLQVPD\EH
DOHDGLQJFDXVHRIGLDUUKHDLQWKHVHDQLPDOV,QDGGLWLRQWKHVHSDWKRJHQVDUHDPDWWHUIRUSXEOLF
KHDOWK3UHYHQWLYHPHDVXUHVEDVHGRQYDFFLQDWLRQDQGLPSURYHPHQWRIK\JLHQHFRQGLWLRQVDUH
HVVHQWLDOWRUHGXFHWKHLPSDFWRIQHRQDWDOGLDUUKHDLQ6$&KHDOWKDQGPRUWDOLW\LQWKH$QGHDQ
UHJLRQRI3HUX
.H\ZRUGVHQWHURSDWKRJHQLFYHURWR[LJHQLF(VFKHULFKLDFROLGLDUUKHDDOSDFD
-RXVSHYGXMSR
6RXWK$PHULFDQFDPHOLGV6$&SURGXFWLRQLVWKHPRVWLPSRUWDQWPHDQVRIVXEVLVWHQFHIRUWKH
$QGHDQFRPPXQLWLHVRI3HUXOLYLQJDWKLJKDOWLWXGHPRVWRIWKHPLQFRQGLWLRQVRISRYHUW\RU
H[WUHPHSRYHUW\$OSDFD9LFXJQDSDFRVLVRQHRIWKHWZRGRPHVWLFVSHFLHVRI6RXWK$PHULFDQ
FDPHOLGV6$&ZKLFKVXSSOLHVKLJKTXDOLW\SURGXFWVVXFKDVEUHDQGPHDW1HRQDWDOPRUWDOLW\
LVRQHRIWKHPRVWOLPLWLQJIDFWRUVRIDOSDFDSURGXFWLRQLQWKHVHUXUDOFRPPXQLWLHV+LJKUDWHV
RIQHRQDWDOPRUWDOLW\UDLVLQJRURIWKHERUQFULDKDYHEHHQUHSRUWHG%XVWLQ]DHWDO
)HUQiQGH]%DFD7KHPDMRUFDXVHVRIQHRQDWDOPRUWDOLW\LQWKHVHFRQGLWLRQVDUH
LQIHFWLRXVGLVHDVHVVWDUYDWLRQSRRUK\JLHQHFRQGLWLRQVDQGLQDGHTXDWHKDQGOLQJ
$PRQJLQIHFWLRXVGLVHDVHVQHRQDWDOGLDUUKHDLVRQHRIWKHOHDGLQJFDXVHVRIQHRQDWDOPRUWDOLW\
RIDOSDFD1HRQDWDOGLDUUKHDLVDFRPSOH[LQIHFWLRXVGLVHDVHFDXVHGE\WKHLQWHUDFWLRQRIDGYHUVH

,IEPXL
HQYLURQPHQWDOFRQGLWLRQVGHFLHQWLPPXQHVWDWXVRIQHRQDWHVDQGLQIHFWLRQE\HQWHURSDWKRJHQV
$ YDULHW\ RI PLFURRUJDQLVPV FDQ FDXVH GLDUUKHD LQ QHRQDWHV LQFOXGLQJ EDFWHULD YLUXVHV DQG
SDUDVLWHVUHYLHZHGLQ:KLWHKHDGDQG$QGHUVRQ0DUWLQ(VSDGDHWDO
(VFKHULFKLDFROLDUHQRUPDOKDELWDQWVRIWKHLQWHVWLQHVRIPDPPDOVKRZHYHUVRPHSDWKRJHQLF
VWUDLQVDUHFDSDEOHRILQGXFLQJGLDUUKHDLQKXPDQVDQGLQGRPHVWLFDQLPDOV$WOHDVWVL[GLIIHUHQW
GLDUUKHDJHQLFFDWHJRULHVDUHUHFRJQLVHGLQKXPDQVDFFRUGLQJWRYLUXOHQFHIDFWRUVVHURW\SHDQG
PHFKDQLVPVWRLQGXFHGLDUUKHD1DWDURDQG.DSHU.DSHUHWDO(QWHURSDWKRJHQLF
(FROL(3(&DQG9HURWR[LQSURGXFLQJ(FROL97(&DUHWKHFDWHJRULHVPRUHIUHTXHQWO\
DVVRFLDWHGZLWKQHRQDWDOGLDUUKHDLQDQLPDOV
(3(&DUHGHQHGDV(FROLSRVVHVVLQJLQWLPLQJHQHHDHEXWODFNLQJYHURWR[LQRU6KLJDOLNH
WR[LQJHQHV1DWDURDQG.DSHU(3(&VWUDLQVFDXVHDFKDUDFWHULVWLFKLVWRORJLFDOOHVLRQLQ
HQWHURF\WHVWHUPHGDWWDFKLQJDQGHIIDFLQJOHVLRQZKLFKFRQVLVWVRILQWLPDWHDGKHVLRQRIEDFWHULD
WRHQWHURF\WHPHPEUDQHGHVWUXFWLRQRIEUXVKERUGHUDQGQDOO\GHWDFKPHQWRIHQWHURF\WHV
7\SLFDO(3(&SRVVHVVDPEULDODGKHVLQFDOOHGEXQGOHIRUPLQJSLOLEISHQFRGHGLQDQ($)
SODVPLG(3(&DGKHUHQFHIDFWRUE\EISJHQH(3(&KDUERXULQJHDHJHQHVEXWODFNLQJEISJHQHV
DUHWHUPHGDW\SLFDO(3(&1DWDURDQG.DSHU
)RUPDQ\\HDUVW\SLFDO(3(&KDYHEHHQUHFRJQLVHGDVDOHDGLQJFDXVHRILQIDQWLOHGLDUUKHDLQ
GHYHORSLQJFRXQWULHVDQGZHUHFRQVLGHUHGUDUHLQLQGXVWULDOLVHGFRXQWULHV1DWDURDQG.DSHU
+RZHYHUUHFHQWGDWDVXJJHVWWKDWDW\SLFDO(3(&DUHPRUHSUHYDOHQWWKDQW\SLFDO(3(&
LQERWKGHYHORSLQJDQGGHYHORSHGFRXQWULHVDQGVRPHVWUDLQVRIDW\SLFDO(3(&KDYHFDXVHG
GLDUUKHD RXWEUHDNV LQ WKH 8QLWHG .LQJGRP WKH 8QLWHG 6WDWHV RI$PHULFD 86$ DQG -DSDQ
2FKRDHWDO
97(&VWUDLQVDOVRFDOOHG6KLJDWR[LQSURGXFLQJVWUDLQV67(&DUHGHQHGDV(FROLVWUDLQV
SURGXFLQJYHURWR[LQVRU6KLJDOLNHWR[LQV1DWDURDQG.DSHU7KHIDPLO\RI97VFRQWDLQV
WZRVXEJURXSV976W[DQG976W[HQFRGHGE\YWDQGYWJHQHVUHVSHFWLYHO\97(&
VWUDLQVPD\SURGXFHYWRUYWDORQHRUERWKW\SHV,QDGGLWLRQWR97VVRPH97(&VWUDLQVDOVR
SURGXFHLQWLPLQSURWHLQVKRPRORJRXVWRWKRVHWKDWDUHSURGXFHGE\(3(&VWUDLQVDQGDUHDEOH
WRLQGXFHDWWDFKLQJDQGHIIDFLQJOHVLRQV
(QWHURKHPRUUKDJLF(FROLVWUDLQV(+(&DUHDVXEVHWRI97(&VWUDLQVZKLFKFDXVHWZRVHYHUH
GLVHDVHVLQKXPDQVKDHPRUUKDJLFFROLWLV+&DQGKDHPRO\WLFXUHPLFV\QGURPH+860RVW
(+(&VWUDLQVSURGXFH97VDQGDWWDFKLQJDQGHIIDFLQJOHVLRQVDQGEHORQJWRDOLPLWHGQXPEHURI
VHURW\SHVPDLQO\2+EXW(+(&VWUDLQVWKDWDUHQHJDWLYHIRUHDHJHQHDUHDOVRDVVRFLDWHG
ZLWKKXPDQGLVHDVH.DSHUHWDO(+(&LVWKHPRVWLPSRUWDQWUHFHQWO\HPHUJHGIRRG
ERUQHSDWKRJHQ$QLPDOVPDLQO\FDWWOHDUHWKHUHVHUYRLURI(+(&SDWKRJHQLFIRUKXPDQV)RRG
RIDQLPDORULJLQVXFKDVXQGHUFRRNHGPHDWDQGXQSDVWHXULVHGPLONDQGIHFDOFRQWDPLQDWHG
YHJHWDEOHVDUHPDMRUYHKLFOHVIRUWKHWUDQVPLVVLRQRI(+(&IURPDQLPDOVWRKXPDQV.DUPDOL

,QDQLPDOV(3(&DQG97(&VWUDLQVDUHIUHTXHQWO\LVRODWHGIURPGLDUUKHLFDQGKHDOWK\DQLPDOV
DQGKDYHDOVREHHQDVVRFLDWHGZLWKGLDUUKHDLQ\RXQJDQLPDOVUHYLHZHGLQ0DLQLODQG'DXEH
:DOHV HW DO *\OHV 1DWXUDO LQIHFWLRQ ZLWK (3(& DQG97(& SURGXFLQJ
DWWDFKLQJDQGHIIDFLQJOHVLRQVKDYHEHHQUHSRUWHGLQPRVWRIWKHGRPHVWLFDQLPDOVSHFLHVDQG
H[SHULPHQWDOLQIHFWLRQVKDYHGHPRQVWUDWHGWKDWVRPHRIWKHVHVWUDLQVDUHDEOHWRLQGXFHGLDUUKHD
LQFDOYHV+RZHYHURQO\VRPHSDWKRW\SHVGHWHUPLQHGRQWKHEDVLVRILQWLPLQDQGYHURWR[LQ
W\SHVDQGVHURW\SHVHHPWREHUHODWHGWRGLDUUKHDLQGRPHVWLFDQLPDOV:LHOHUHWDO&LG
HWDO%ODQFRHWDO

,IEPXL
/LWWOHLVNQRZQDERXWWKHHSLGHPLRORJ\RIQHRQDWDOGLDUUKHDLQDOSDFDVLQWKH$QGHDQUHJLRQ,Q
WKHVLVRODWLRQRI(FROLVWUDLQVFDSDEOHRILQGXFLQJXLGDFFXPXODWLRQLQWKHLQWHVWLQDOORRS
DVVD\LQDOSDFDDQGOODPDQHRQDWHVZDVGHVFULEHG5DPtUH]HWDO+RZHYHUYLUXOHQFH
IDFWRUVRI(FROLDVVRFLDWHGZLWKQHRQDWDOGLDUUKHDLQ6RXWK$PHULFDQ&DPHOLGV6$&KDYHEHHQ
SRRUO\FKDUDFWHULVHG,QWKLVVWXG\ZHLQYHVWLJDWHGWKHSRVVLEOHUROHRIGLIIHUHQWGLDUUKHDJHQLF
FDWHJRULHVRI(VFKHULFKLDFROLLQDOSDFDQHRQDWDOGLDUUKHD
1EXIVMEPERHQIXLSHW
%RMQEPW
)HFDOVDPSOHVZHUHREWDLQHGE\UHFWDOVZDEIURPFULDRIDOSDFDZLWKGLDUUKHDLQWKH$QGHDQ
UHJLRQRI&X]FR3HUX$QLPDOVEHORQJHGWRVL[GLIIHUHQWKHUGVDQGZHUHEHWZHHQWZRDQGQLQH
ZHHNVROG
&EGXIVMEPWXVEMRW
)RUWKH(FROLLVRODWLRQIHFDOVDPSOHVZHUHSODWHGRQWR0F&RQNH\DJDUDQGWKHSODWHVZHUH
LQFXEDWHGDW&IRUK(FROLLVRODWHVZHUHSUHVHUYHGDWURRPWHPSHUDWXUHRQWRVHPLVROLG
QXWULHQWEURWK$WRWDORI(FROLLVRODWHVRQHSHUDQLPDOZHUHDQDO\VHGIRUWKHSUHVHQFHRI
YLUXOHQFHIDFWRUJHQHVRIGLDUUKHDJHQLF(FROL
(IXIGXMSRSJZMVYPIRGIJEGXSVKIRIWF]4'6
7KHLQYHVWLJDWHGJHQHVZHUHYHURWR[LQYWDQGYWLQWLPLQHDHDQGEXQGOHIRUPLQJSLOL
EISJHQHV7KHGHWHFWLRQZDVFDUULHGRXWE\DPXOWLSOH[3&57KHXVHGSULPHUVKDYHEHHQ
SUHYLRXVO\GHVFULEHG%ODQFRHWDO&RUGHLURHWDO3&5UHDFWLRQVZHUHSHUIRUPHG
LQOUHDFWLRQPL[WXUHZLWK0XOWLSOH[3&5NLW4LDJHQ$PSOLFDWLRQRI3&5SURGXFWVZDV
SHUIRUPHGE\DGHQDWXUDWLRQVWHSDW&IRUPLQDQGF\FOHVRI&IRUV&
IRUVDQG&IRUVIROORZHGE\DQDOH[WHQVLRQDW&IRUPLQLQDWKHUPDOF\FOHU
%LR5DG3&5SURGXFWVZHUHGHWHFWHGRQDJDURVHJHOV
6IWYPXW
(FROLLVRODWHVZHUHGLVWULEXWHGLQWRGLIIHUHQWFDWHJRULHVRIGLDUUKHDJHQLF(FROLDFFRUGLQJWRWKH
JHQHGHWHFWHG7DEOH,VRODWHVSRVLWLYHWRHDHDQGESIJHQHVEXWQHJDWLYHWRYWRUYWJHQHV
ZHUHFODVVLHGDV(3(&LVRODWHVSRVLWLYHRQO\WRHDHJHQHZHUHFODVVLHGDVDW\SLFDO(3(&
DQGLVRODWHVSRVLWLYHWRYWDQGRUYWZHUHFODVVLHGDV97(&VWUDLQV
7ZRFDWHJRULHVRIGLDUUKHDJHQLF(FROLVWUDLQVZHUHGHWHFWHG(QWHURSDWKRJHQLF(FROL(3(&
DQG9HURWR[LQSURGXFLQJ(FROL97(&VWUDLQV7DEOH2XWRIWKHDQDO\VHGVWUDLQV
ZHUH(3(&HDHDQGEISZHUHDW\SLFDO(3(&HDHEXWEISQHJDWLYH
DQGZHUH97(&2QO\RIWKH97(&VWUDLQVZHUHHDHSRVLWLYHRQHHDH
YWDQGWZRHDHYW7DEOH$OORIWKHRWKHU97(&VWUDLQVZHUHRQO\YW
,QIHFWLRQZLWKGLDUUKHDJHQLF(FROLVWUDLQVZDVGHWHFWHGLQDOOWKHKHUGV7DEOH$OOWKHKHUGV
ZHUHLQIHFWHGZLWKDWOHDVWRQHFDWHJRU\RIGLDUUKHDJHQLF(FROLVWUDLQV,QIHFWLRQZLWK97(&
VHHPVWREHZLGHVSUHDGDPRQJKHUGVVLQFH97(&VWUDLQVZHUHGHWHFWHGLQDOOWKHKHUGV97(&
LQIHFWLRQZDVGHWHFWHGLQGLDUUKHLFDQLPDOVEHWZHHQWZRDQGQLQHZHHNVROG

,IEPXL
8EFPI*VIUYIRGMIWSJHMEVVLIEKIRMGGEXIKSVMIWSJ)GSPMHIXIGXIHMRHMEVVLIMGGVMESJEPTEGE
'EXIKSVMIW
+IRIWHIXIGXIH
*VIUYIRG]
'YQYPEXMZI
)4)'
%X]TMGEP)4)'
:8)'
2IKEXMZI
8SXEP
IEIFJT
IEI
ZXERHSVZX
2SRISJXLIEREP]WIH

8EFPI'LEVEGXIVMWXMGWSJ:8)'WXVEMRWMWSPEXIHJVSQGVMESJEPTEGE[MXLHMEVVLIEZIVSXS\MRX]TIERH
TVIWIRGISJIEIKIRI
:8)'
*VIUYIRG]
IEIZX
IEIZX
IEIZXZX
ZX
ZX
8SXEP

8EFPI(MWXVMFYXMSRSJHMEVVLIEKIRMGGEXIKSVMIWSJ)GSPMMWSPEXIWEQSRKLIVHWSJEPTEGE
,IVH
)4)'
%X]TMGEP)4)'
:8)'
2IKEXMZI
8SXEP
-4'
.YPMER
/SVTEGERGLE
4PERXIP
6E]ETEXE
7ERXE0YGME

(MWGYWWMSR
$WWDFKLQJDQGHIIDFLQJLQWHVWLQDOOHVLRQVDQGQDWXUDOLQIHFWLRQZLWK(3(&LQFULDRIDOSDFDKDYH
EHHQSUHYLRXVO\GHVFULEHGLQWKH8QLWHG.LQJGRP)RVWHUHWDO7ZRPH\HWDO
)RVWHUHWDOGHWHFWHGWKHDWWDFKLQJDQGHIIDFLQJOHVLRQFKDUDFWHULVWLFVRI(3(&LQWKUHH
FULDVRIDOSDFDWZRG\LQJIURPGLDUUKHDDQGRQHIURPVHSWLFDHPLDEXWEDFWHULDZHUHQRWLVRODWHG
7ZRPH\HWDOGHVFULEHGPXOWLIRFDOEDFWHULDOFRORQLVDWLRQZLWKDWWDFKLQJDQGHIIDFLQJ
RUJDQLVPVVLPLODUPRUSKRORJLFDOO\WR(FROLLQRQHFULDRIDOSDFDZLWK&U\SWRVSRULGLRVLV,QWKLV
VWXG\ZHGHVFULEHWKHGHWHFWLRQRI(3(&LQIHFWLRQLQFULDRIDOSDFDZLWKGLDUUKHDLQWKH$QGHDQ
UHJLRQRI3HUX0RVWRIWKH(3(&VWUDLQVGHWHFWHGZHUHDW\SLFDO(3(&VLQFHWKH\ODFNHGWKH
EISJHQH7\SLFDO(3(&KDYHEHHQLVRODWHGIURPDQLPDOVEXWPRVWRI(3(&RIDQLPDORULJLQ
ODFNWKHEISJHQHVRWKH\DUHFODVVLHGDVDW\SLFDO(3(&&LGHWDO%ODQFRHWDO
6RPH(3(&VWUDLQVKDYHEHHQDVVRFLDWHGZLWKGLDUUKHDLQGRPHVWLFDQLPDOVDQG(3(&LVRQH
RIWKHPRVWSUHYDOHQWGLDUUKHDJHQLFFDWHJRULHVRI(FROLLQGLDUUKHLFUXPLQDQWV7KXVLQIHFWLRQ

,IEPXL
ZLWKWKH(3(&VWUDLQVLVRODWHGIURPGLDUUKHLFFULDRIDOSDFDLQWKLVVWXG\FRXOGEHDVVRFLDWHG
ZLWKWKHGLVHDVH
0HUFDGRHWDOGHVFULEHGWKHDVVRFLDWLRQRIRQH2+97(&VWUDLQZLWKGLDUUKHDLQD
JXDQDFRLQ$UJHQWLQD7KHDXWKRUVFRQVLGHUHGWKDWWKHVRXUFHRIFRQWDPLQDWLRQZLWKWKLVVWUDLQ
ZDVXQFOHDUVLQFHSUHYLRXVFRQWDPLQDWLRQRIWKHHQYLURQPHQWZLWKERYLQHIHFDOEDFWHULDFRXOG
EHWKHVRXUFHRILQIHFWLRQIRUGLDUUKHLFJXDQDFRLQWKLVFDVH+RZHYHUWKH\GLGQRWGLVFRXQWWKH
SRVVLELOLW\RIWKHH[LVWHQFHRIDUHVLGHQW97(&SRSXODWLRQLQJXDQDFRV97(&VWUDLQVKDYHDOVR
EHHQGHWHFWHGLQGLDUUKHLFFULDRIDOSDFDLQ3HUX/XQD
,QWKLVVWXG\97(&VWUDLQVZHUHGHWHFWHGLQDUHODWLYHKLJKIUHTXHQF\LQGLDUUKHLFFULDRIDOSDFD
LQWKH$OWR$QGLQRUHJLRQRI3HUX7KHPRVWIUHTXHQWO\GHWHFWHGYHURWR[LQW\SHLQWKHVH97(&
VWUDLQV ZDV977KHVH UHVXOWV DUH LQ DJUHHPHQW ZLWK WKH UHVXOWV LQ RWKHU GRPHVWLF VSHFLHV
0RVW97(&VWUDLQVLVRODWHGIURPGLDUUKHLFDQLPDODUHPDLQO\YWVWUDLQVZKHUHDV97(&VWUDLQV
SURGXFLQJYWRUERWKYWDQGYWDUHPRVWIUHTXHQWO\LVRODWHGIURPKHDOWK\DQLPDOV%ODQFRHW
DO7KH97(&VWUDLQVLVRODWHGIURPGLDUUKHLFDOSDFDLQWKLVVWXG\FRXOGSOD\DUROHLQWKH
HWLRORJ\RIQHRQDWDOGLDUUKHDLQWKHVHDQLPDOVSHFLHVLQWKH$QGHDQUHJLRQRI3HUX
97(& VWUDLQV KDYH EHHQ DOVR LVRODWHG IURP KHDOWK\ DOSDFDV LQ (XURSH DQG 6RXWK$PHULFD
3ULWFKDUGHWDO/HRWWDHWDO&RUGHURHWDO97(&VWUDLQVZHUHGHWHFWHG
LQWZRDOSDFDVLQWKH=RRRI/D3ODWD$UJHQWLQD/HRWWDHWDO3ULWFKDUGHWDO
GHWHFWHG297(&VWUDLQVLQ&6$IRXUDOSDFDVDQGQLQHOODPDVIURPSXEOLFDPHQLW\SUHPLVHV
LQ(QJODQGDQG:DOHVEHWZHHQDQG5HFHQWO\WKHLVRODWLRQRI97(&VWUDLQVDWKLJK
IUHTXHQF\IURPKHDOWK\DOSDFDLQWKH$OWR$QGLQRUHJLRQRI3HUXKDVEHHQGHVFULEHG
&RUGHURHWDO7KXVLQIHFWLRQZLWK97(&VWUDLQVLQDOSDFDVPD\UHSUHVHQWDULVNIDFWRU
IRUKXPDQKHDOWKLQWKLVDUHD
7KHUHVXOWVLQGLFDWHWKDW(3(&DQG97(&VWUDLQVDUHFLUFXODWLQJDPRQJGRPHVWLF6$&SUREDEO\
DWKLJKUDWHVLQWKH$QGHDQUHJLRQRI3HUX7KHUHIRUH(3(&DQG97(&VWUDLQVPD\EHDOHDGLQJ
FDXVHRIGLDUUKHDLQWKHVHDQLPDOV,QDGGLWLRQWKHVHSDWKRJHQVDUHFRQFHUQHGZLWKSXEOLFKHDOWK
3UHYHQWLYHPHDVXUHVEDVHGRQYDFFLQDWLRQDQGLPSURYLQJRIK\JLHQLFFRQGLWLRQVDUHHVVHQWLDOWR
UHGXFHWKHLPSDFWRIQHRQDWDOGLDUUKHDLQ6$&KHDOWKDQGPRUWDOLW\LQWKH$QGHDQUHJLRQRI3HUX
'SRGPYWMSR
(3(&DQG97(&VWUDLQVPD\EHDOHDGLQJFDXVHRIGLDUUKHDLQDOSDFDVLQWKH$QGHDQUHJLRQRI
3HUX,QDGGLWLRQWKHVHSDWKRJHQVDUHDPDWWHUIRUSXEOLFKHDOWK
%GORS[PIHKIQIRXW
7KLV ZRUN KDV EHHQ VXSSRUWHG E\ WKH 8QLYHUVLGDG &RPSOXWHQVH GH 0DGULG 3UR\HFWR GH
&RRSHUDFLyQ,QWHUQDFLRQDOSDUDHO'HVDUUROOR9FRQYRFDWRULDDQGE\WKH$JHQFLD(VSDxRODGH
&RRSHUDFLyQ,QWHUQDFLRQDOSDUDHO'HVDUUROOR$(&,'3UR\HFWR$
6IJIVIRGIW
%ODQFR-0%ODQFR-(%ODQFR$0RUD03$ORQVR($*RQ]iOH]DQG0,%HUQiUGH](SLGHPLRORJ\
RI YHURF\WRWR[LJHQLF (VFKHULFKLD FROL 97(& LQ UXPLQDQWV ,Q * 'XII\ 3 *DUYH\ DQG$ 0F'RZHOO HGV
9HURF\WRWR[LJHQLF(FROL)RRGDQG1XWULWLRQ3UHVV7UXPEXOO&786$SS

,IEPXL
%ODQFR0-(%ODQFR$0RUD*'DKEL03$ORQVR($*RQ]iOH]0,%HUQiUGH]DQG-%ODQFR6HURW\SHV
YLUXOHQFHJHQHVDQGLQWLPLQW\SHVRI6KLJDWR[LQYHURWR[LQSURGXFLQJ(VFKHULFKLDFROLLVRODWHVIURPFDWWOHLQ
6SDLQDQGLGHQWLFDWLRQRIDQHZLQWLPLQYDULDQWJHQHHDH[L-RXUQDORI&OLQLFDO0LFURELRORJ\
%XVWLQ]D$93-%XUIHQLQJDQG5/%ODFNZHOO)DFWRUVDIIHFWLQJVXUYLYDOLQ\RXQJDOSDFDV/DPDSDFRV-RXUQDO
RI$QLPDO6FLHQFH
&LG'-$5XL]6DQWD4XLWHULD,0DUtQ56DQ]-$2UGHQ5$PLOVDQG5GHOD)XHQWH$VVRFLDWLRQEHWZHHQ
LQWLPLQHDHDQG(VS%JHQHVXEW\SHVLQDWWDFKLQJDQGHIIDFLQJ(VFKHULFKLDFROLVWUDLQVLVRODWHGIURPGLDUUKRHLF
ODPEVDQGJRDWNLGV0LFURELRORJ\
&RUGHLUR$0%ODQFR:+XDQFD$0RUD$+HUUHUD%3XHQWHV(4XLQD&/RSH]50DPDQL-(%ODQFRDQG
-%ODQFR'HWHUPLQDFLyQGHVHURWLSRV\JHQHVGHYLUXOHQFLDGH(VFKHULFKLDFROLYHURWR[LJpQLFRV(&97HQ
FRSURFXOWLYRVGHDOSDFDV9LFXJQDSDFRVFOtQLFDPHQWHVDQDVSURFHGHQWHVGHSXQDK~PHGDGHO3HU~;;,0HHWLQJ
RIWKH/DWLQ$PHULFDQ$VVRFLDWLRQRI$QLPDO3URGXFWLRQ$/3$2FWREHU
)HUQiQGH]%DFD66LWXDFLyQDFWXDOGHORVFDPpOLGRVVXGDPHULFDQRVHQ3HU~3UR\HFWRGH&RRSHUDFLyQ7pFQLFD
HQDSR\RGHODFULDQ]D\DSURYHFKDPLHQWRGHORV&DPpOLGRV6XGDPHULFDQRVHQOD5HJLyQ$QGLQD7&35/$
)RRGDQG$JULFXOWXUH2UJDQLVDWLRQ)$2
)RVWHU$3$2WWHU$0%DUORZ*53HDUVRQ0-:RRGZDUGDQG5-+LJJLQV1DWXUDOO\RFFXUULQJLQWHVWLQDO
OHVLRQVLQWKUHHDOSDFDV9LFXJQDSDFRVFDXVHGE\DWWDFKLQJDQGHIIDFLQJ(VFKHULFKLDFROL9HWHULQDU\5HFRUG

*\OHV&/6KLJDWR[LQSURGXFLQJ(VFKHULFKLDFROL$QRYHUYLHZ-RXUQDORI$QLPDO6FLHQFH((
.DSHU-%-31DWDURDQG+/0REOH\3DWKRJHQLF(VFKHULFKLDFROL1DWXUHUHYLHZV0LFURELRORJ\
.DUPDOL0$6KLJDWR[LQSURGXFLQJ(VFKHULFKLDFROL0ROHFXODU%LRWHFKQRORJ\
/HRWWD*$1'H]D-2ULJOLD&7RPD,&KLQHQ(0LOLZHEVN\6,\RGD66RVD(VWDQLDQG05LYDV6KRUW
FRPPXQLFDWLRQ9HWHULQDU\0LFURELRORJ\
/XQD/*HQRWLSLFDFLyQGHFHSDVGH(VFKHULFKLDFROLDLVODGRVGHFUtDVGHDOSDFDVFRQGLDUUHDV7KHVLV)DFXOW\
RI9HWHULQDU\0HGLFLQH8QLYHVLW\RI6DQ0DUFRV/LPD3HUXS
0DLQLO-*DQG*'DXEH9HURWR[LJHQLF(VFKHULFKLDFROLIURPDQLPDOVKXPDQVDQGIRRGVZKRVZKR"-RXUQDO
RI$SSOLHG0LFURELRORJ\
0DUWtQ(VSDGD&&(3LQWR-LPpQH]DQG'&LG9i]TXH]6RXWKDPHULFDQFDPHOLGVKHDOWKVWDWXVRIWKHLUFULD
5HYLVWD&RPSOXWHQVHGH&LHQFLDV9HWHULQDULDV
0HUFDGR(&605RGUtJXH]$0(OL]RQGR*0DUFRSSLGRDQG93DUUHxR,VRODWLRQRIVKLJDWR[LQSURGXFLQJ
(VFKHULFKLDFROLIURPD6RXWK$PHULFDQFDPHOLG/DPDJXDQLFRHZLWKGLDUUKHD-RXUQDORI&OLQLFDO0LFURELRORJ\

1DWDUR3-DQG-%.DSHU'LDUUKHDJHQLF(VFKHULFKLDFROL&OLQLFDO0LFURELRORJ\5HYLHZV
2FKRD7-)%DUOHWWD&&RQWUHUDVDQG(0HUFDGR1HZLQVLJKWVLQWRWKHHSLGHPLRORJ\RIHQWHURSDWKRJHQLF
(VFKHULFKLDFROLLQIHFWLRQ7UDQVDFWLRQVRIWKH5R\DO6RFLHW\RI7URSLFDO0HGLFLQHDQG+\JLHQH
3ULWFKDUG*&56PLWK-(OOLV,YHUVHQ7&KHDVW\DQG*$:LOOVKDZ9HURF\WRWR[LJHQLF(VFKHULFKLDFROL
2LQDQLPDOVRQSXEOLFDPHQLW\SUHPLVHVLQ(QJODQGDQG:DOHVWR9HWHULQDU\5HFRUG
5DPtUH]$5(OOLV-6XPDUDQG9/H\YD(FROLHQWHURSDWyJHQDHQDOSDFDVQHRQDWDOHVDLVODPLHQWRGHLQWHVWLQR
GHOJDGR\VXLQRFXODFLyQRUDO,Q3URFHHGLQJVRIWKH9,QWHUQDWLRQDO&RQIHUHQFHRQ6RXWK$PHULFDQ&DPHOLGV
&XVFR3HUXS
7ZRPH\')$0%DUORZ6%HOO50&KDOPHUV.(OZLQ0*LOHV5-+LJJLQV*5RELQVRQDQG506WULQJHU
&U\SWRVSRULGLRVLVLQWZRDOSDFD/DPDSDFRVKROGLQJVLQWKH6RXWK:HVWRI(QJODQG9HWHULQDU\-RXUQDO

:DOHV$'0-:RRGZDUGDQG*53HDUVRQ$WWDFKLQJHIIDFLQJEDFWHULDLQDQLPDOV-RXUQDORI&RPSDUDWLYH
3DWKRORJ\
:KLWHKHDG&(DQG'($QGHUVRQ1HRQDWDOGLDUUKHDLQOODPDVDQGDOSDFDV6PDOO5XPLQDQW5HVHDUFK

:LHOHU/+$6FKZDQLW](9LHOHU%%XVVH+6WHLQUFN-%.DSHUDQG*%DOMHU9LUXOHQFHSURSHUWLHVRI
6KLJDWR[LQSURGXFLQJ(VFKHULFKLDFROL67(&VWUDLQVRIVHURJURXS2DPDMRUJURXSRI67(&SDWKRJHQVLQ
FDOYHV-RXUQDORI&OLQLFDO0LFURELRO\

%FWXVEGXW
%FWXVEGXW
'LERKIWMRWYGOPMRKFILEZMSYVHYVMRKPEGXEXMSRMRPPEQEW
0EQEKPEQE
$.OLQNHUWDQG0*HUNHQ
'HSDUWPHQW RI $QLPDO 6FLHQFHV 8QLYHUVLW\ RI *|WWLQJHQ $OEUHFKW7KDHU:HJ
*|WWLQJHQ*HUPDQDUXEHO#JZGJ
%FWXVEGX
6XFNOLQJEHKDYLRXUSOD\VDQLPSRUWDQWUROHLQWKHQRUPDOJURZWKRISURJHQ\LQPDPPDOV7KHUHDUH
RQO\DIHZGDWDRQVXFNOLQJEHKDYLRXULQ6RXWK$PHULFDQFDPHOLGV6$&DQGORQJWHUPVXFNOLQJ
EHKDYLRXULVQRWZHOOGRFXPHQWHG7KHREMHFWLYHRIRXUVWXG\ZDVWRREVHUYHWKHGHYHORSPHQWRI
VXFNOLQJEHKDYLRXUGXULQJODFWDWLRQDQGGHWHUPLQHGLXUQDOUK\WKPV)LYHIHPDOHOODPDVDQGWKHLU
FUtDVZHUHKHOGXQGHUVWDEOHFRQGLWLRQVOLJKWVFKHGXOHIURPWRKDQGYLGHRWDSHGZLWK
WKHLURIIVSULQJRYHUWZRKSHULRGVLQWHVWLQJZHHNVZHHNDQGSRVWSDUWXPSS
9LGHRVZHUHDQDO\VHGIRUWRWDOVXFNOLQJWLPHGXUDWLRQRIVLQJOHVXFNOLQJERXWVDQGVXFNOLQJ
IUHTXHQF\GHQLQJVXFNOLQJHYHQWVDVDFRQWDFWEHWZHHQWKHIRDOVPRXWKDQGWKHXGGHUIRUPRUH
WKDQVHF)XUWKHUPRUHWKHGLXUQDOGLVWULEXWLRQRIVXFNOLQJHYHQWVZDVH[DPLQHG5HVXOWVVKRZ
DGHFUHDVLQJIUHTXHQF\RIVXFNOLQJHYHQWVGXULQJODFWDWLRQUHDFKLQJPHDQ6'
DQGHYHQWVSHUKDWZHHNDQGSSUHVSHFWLYHO\
7KHDYHUDJHGDLO\VXFNOLQJWLPHVKRZHGDVLPLODUGHYHORSPHQWGHFUHDVLQJIURPPLQ
LQZHHNSSWRPLQLQZHHNSSDQGVXEVHTXHQWO\IDOOLQJWRPLQLQ
ZHHNSSDQGPLQLQZHHNSS7KHVXFNOLQJWLPHDQGVXFNOLQJIUHTXHQF\YDULHG
VWURQJO\EHWZHHQLQGLYLGXDOVUDQJLQJIURPWRPLQGD\DQGWRVXFNOLQJHYHQWV
GD\DFURVVDOOPHDVXUHPHQWGDWHV0HDQVXFNOLQJGXUDWLRQKDYHUDJHGPLQGXULQJWKH
GD\DQGPLQGXULQJWKHQLJKW7KXVRIDOOVXFNOLQJZDVSHUIRUPHGGXULQJWKH
QLJKWKRXUVDQGGXULQJWKHOLJKWSHULRG7KHKLJKHVWVXFNOLQJDFWLYLW\ZDVREVHUYHGGXULQJ
WKHODVWOLJKWKRXUUHDFKLQJPLQK5HJDUGLQJWKHFLUFDGLDQUK\WKPLFRI
VXFNOLQJEHKDYLRXUQRGLIIHUHQFHVFRXOGEHREVHUYHGGXULQJWKHODFWDWLRQSHULRG

%FWXVEGXW
%REXSQMGEPMQEKMRKSJFPSSHZIWWIPWJSVZIRMTYRGXYVIMR
7SYXL%QIVMGERGEQIPMHW
&6FKXO].$PRUW0*DXO\0.UDPHUDQG..RHKOHU
,QVWLWXWHRI3DUDVLWRORJ\-XVWXV/LHELJ8QLYHUVLW\*LHVVHQ5XGROI%XFKKHLP6WU
*LHVVHQ*HUPDQ\FODXGLDVFKXO]#YHWPHGXQLJLHVVHQGH
'HSDUWPHQWRI9HWHULQDU\&OLQLFDO6FLHQFHV&OLQLFIRU6PDOO$QLPDOV-XVWXV/LHELJ8QLYHUVLW\
*LHVVHQ)UDQNIXUWHU6WU*LHVVHQ*HUPDQ\
'HSDUWPHQW RI $QLPDO 6FLHQFH /LYHVWRFN 3URGXFWLRQ *URXS *HRUJ $XJXVW 8QLYHUVLW\
*|WWLQJHQ$OEUHFKW7KDHU:HJ*|WWLQJHQ*HUPDQ\
,QVWLWXWH RI 9HWHULQDU\ 3DWKRORJ\ -XVWXV /LHELJ 8QLYHUVLW\ *LHVVHQ )UDQNIXUWHU 6WU
'*LHVVHQ*HUPDQ\
%FWXVEGX
$QDWRPLFDONQRZOHGJHLVIXQGDPHQWDOIRUJRRGYHWHULQDU\SUDFWLFHWRHQVXUHWKHKHDOWKDQG
ZHOIDUHRIDQLPDOVXQGHUYHWHULQDU\FDUH&RUUHFWYHQLSXQFWXUHLVDQLQHYLWDEOHPHGLFDOVNLOO
IRUIXUWKHUGLDJQRVWLFH[DPLQDWLRQLQWUDYHQRXVLQMHFWLRQRULQIXVLRQHVSHFLDOO\LQVLFNDQLPDOV
,Q*HUPDQ\6RXWK$PHULFDQFDPHOLGV6$&DUHEHFRPLQJLQFUHDVLQJO\SRSXODUEXWDUHVWLOO
UDWKHUXQFRPPRQSDWLHQWVDQGDQHJOHFWHGLVVXHLQYHWHULQDU\PHGLFDOHGXFDWLRQ%ORRGVDPSOLQJ
RI6$&LVSRVVLEOHDWGLIIHUHQWORFDWLRQVEXWSUHIHUDEO\FRQGXFWHGRQWKHMXJXODUYHLQWRREWDLQ
ODUJHUTXDQWLWLHV'XHWRDQDWRPLFDOSHFXOLDULWLHVVXFKDVWKHDEVHQFHRIDMXJXODUIXUURZWKH
EORRGVDPSOLQJIURPWKHYHQDMXJXODULVLVPRUHGLIFXOWLQ6$&WKDQLQUXPLQDQWVRUKRUVHV
3UHVHQWO\KDUGO\DQ\DQDWRPLFDOVWXGLHVDUHDYDLODEOH7KHDLPRIWKHSUHVHQWDQDWRPLFDOVWXG\
ZDVWRLOOXVWUDWHFRUUHFWORFDWLRQVRIYHQLSXQFWXUHE\FRORXUDWLRQRIWKHYHQDMXJXODULVDUWHULD
FDURWLV WUXQFXV YDJRV\PSDWLFXV WUXQNV DQG WKH RHVRSKDJXV 6XUURXQGLQJ VWUXFWXUHV ZHUH
SUHSDUHGWRLPSURYHWKHDQDWRPLFDOFRPSUHKHQVLRQ)XUWKHUSUHSDUDWLRQVZHUHFDUULHGRXWRI
WKHYHQDEUDFKLDOLVRQWKHFUDQLDOIRUHDUPWKHYHQDDQGDUWHULDVDSKHQDDVZHOODVWKHQHUYXV
IHPRUDOLVRQWKHPHGLDOVLGHRIWKHVWLHDQGWKHVXSHUFLDOYHQDFRFF\JHDOLVRIWKHWDLO(DU
YHLQVZHUHDOVRFRQVLGHUHGLQSUHSDUDWLRQDVWKH\FDQEHHDVLO\DFFHVVHGWRFROOHFWVPDOODPRXQWV
RIEORRGHJIRUWKHGLDJQRVLVRISUHJQDQF\RU'1$DQDO\VHV$QDWRPLFDOSLFWXUHVZLOOEH
LOOXVWUDWHGLQFRPSDULVRQZLWKSLFWXUHVRIEORRGFROOHFWLRQLQOLYLQJ6$&WROLQNWKHRU\ZLWK
SUDFWLFHRQWKHSRVWHU,QDGGLWLRQWRFODULI\DQDWRPLFDOXQSUHSDUHGORFDWLRQVRIVXSHUFLDO
DQG VXEMDFHQW VWUXFWXUHV RI WKH 6$& QHFN LPDJHV RI WKH FHUYLFDO UHJLRQ ZHUH SURGXFHG E\
FRPSXWHGWRPRJUDSK\DVZHOODVPDJQHWLFUHVRQDQFHWRPRJUDSK\DQGFRPSDUHGZLWKWUDQVYHUVH
VHFWLRQV RI WKH DIWHUZDUGV IUR]HQ QHFN7KH SUHVHQWHG SLFWXUHV JLYH GHWDLOHG LQIRUPDWLRQ RQ
SRVVLEOHORFDWLRQVIRUYHQLSXQFWXUHLQ6$&IDFLOLWDWLQJEORRGFROOHFWLRQIRUYHWHULQDULDQVDQG
6$&RZQHUV

%FWXVEGXW
%PTEGEFVIIHMRKERHTVSHYGXMSRTVSWTIGXWMRXLI9RMXIH
7XEXIW
7:XOLML
8QLYHUVLW\RI1HYDGD5HQR19WXPHQZ#\DKRRFRP
%FWXVEGX
7KH DOSDFD LV WKH PRVW LPSRUWDQW EUHSURGXFLQJ PHPEHU RI WKH 6RXWK$PHULFDQ FDPHOLGV
$OWKRXJKFDPHOLGVDUHDGDSWHGWRWKHKLJKODQGHQYLURQPHQWRIWKH$OWLSODQRWKHLULQWURGXFWLRQ
LQVRPHRWKHUUHJLRQVRIWKHZRUOGKDYHEHHQVXFFHVVIXO$OSDFDVZHUHEURXJKWLQWKH8QLWHG
6WDWHV SULRU WR EXW ZHUH FRQQHG PRVWO\ WR ]RR DQG ]RRORJLFDO SDUNV 6LQFH WKH UVW
LPSRUWDWLRQIURP&KLOHLQSXUFKDVHDQGEUHHGLQJDOSDFDVLQWKH86KDYHRXULVKHGDQG
VLQFHWKHQKDYHEHHQGLVWULEXWHGLQHYHU\VWDWHRIWKH86IURP$ODVNDWR$UL]RQDDQG&DOLIRUQLD
WRWKH&DUROLQDVFUHDWLQJDVL]DEOHVSHFLDOW\OLYHVWRFNDQGEUHSURGXFWLRQLQGXVWU\7KHUHDUH
DQHVWLPDWHGFDPHOLGVLQ1RUWK$PHULFD7KHDOSDFDRZQHUV EUHHGHUVDVVRFLDWLRQ
$2%$ZDVRUJDQLVHGLQWRVHUYHDQGFRRUGLQDWHWKHDOSDFDLQGXVWU\GHYHORSPHQWV7KH
$2%$SURYLGHDQXPEHURIVHUYLFHVWRPHPEHUVDQGSURGXFHUVLQFOXGLQJDQDOSDFDPDJD]LQH
ZHEVLWHQHZVOHWWHUVLQYHVWPHQWLQIRUPDWLRQVFLHQWLFOLWHUDWXUHVEUHHGXFDWLRQDOSDFDVKRZV
DQGVDOHV&XUUHQWO\$2%$KDVPRUHWKDQPHPEHUVDQGUHJLVWHUHGDOSDFDVDWWKH
$OSDFD5HJLVWU\,QF$5,IURPWR7KH$OSDFD)LEHU&RRSHUDWLYHRI1RUWK$PHULFD
$)&1$LVDVRFLHW\RIPRUHWKDQDOSDFDSURGXFHUVZKRFROOHFWSURFHVVDQGPDUNHWDOSDFD
EUHSURGXFWVIRUWKHPHPEHUV,QWKH$2%$HVWDEOLVKHGWKH$OSDFD5HVHDUFK)RXQGDWLRQ
$5)WRVXSSRUWFDPHOLGUHVHDUFKZKLFKEHQHWVWKH1RUWK$PHULFDQDOSDFDLQGXVWU\SULPDULO\
LQWKHDUHDVRIDOSDFDKHDOWKKXVEDQGU\JHQHWLFVDQGEUH

6SYRHXEFPIW
6SYRHXEFPIW
'SQQSRQEREKIQIRXHIRSQMREXSVWFIX[IIR7SYXL
%QIVMGERGEQIPMHWERHSXLIVFVIERMQEPW
&KDLU0DUWLQD*HUNHQ*HUPDQ\
&KDLUSHUVRQV'DQLHO$OODLQ)UDQFH5HQ]R0RUDQWH3HUX6XVDQ7HOOH]86$DQG-XOLHWD
YRQ7KQJHQ$UJHQWLQD
5HSRUWHU$QQHJUHW.OLQNHUW*HUPDQ\DQG0DUWLQD*HUNHQ*HUPDQ\
'LIIHUHQWVFLHQWLFJURXSVDUHZRUNLQJZLWKHLWKHU6RXWK$PHULFDQFDPHOLGVRURWKHUEUHDQLPDO
VSHFLHV7KLVURXQGWDEOHRIIHUHGDSODWIRUPWRLGHQWLI\FRPPRQPDQDJHPHQWGHQRPLQDWRUV
EHWZHHQWKHVHVSHFLHV
'$OODLQ)UDQFHLQWURGXFHGWKHWRSLFE\JLYLQJDQRYHUYLHZRIEUHELRORJ\RIWKHPDLQ
EUHSURGXFLQJDQLPDOVXFKDVVKHHSDQJRUDDQGFDVKPHUHJRDWV6RXWK$PHULFDQFDPHOLGV
6$&DQGDQJRUDUDEELWV$OWKRXJKWKHUHDUHVSHFLHVVSHFLFGLIIHUHQFHVLQHHFHFRPSRVLWLRQ
DQGEUHVWUXFWXUHWKHUHDUHVLPLODUVHOHFWLRQFULWHULDIRUJHQHWLFLPSURYHPHQWEUHTXDQWLW\
FOHDQHHFHZHLJKWDQGHHFHTXDOLW\7KHODWWHULQFOXGHVEUHGLDPHWHUEUHOHQJWKEUH
GLVWULEXWLRQVWDQGDUGGHYLDWLRQDQG&9FRHIFLHQWRIYDULDWLRQUDWLREHWZHHQVHFRQGDU\DQG
SULPDU\IROOLFOHVDQGSHUFHQWDJHRIXQGHVLUDEOHEUHVQRNHPSRUFRDUVHEUHQRPHGXOODWLRQ
LQZRROPRKDLUDQGFDVKPHUHRUEULVWOHVDQJRUDUDEELW)LEUHOHQJWKPDLQO\GHSHQGVRQ
WKHVKHDULQJLQWHUYDOV)LEUHFRORXULVDQLPSRUWDQWTXDOLW\WUDLWEXWKDVQRLQXHQFHRQEUH
GLDPHWHU,QVKHHSJRDWVDQG6$&PDLQO\DGGLWLYHSRO\JHQLFHIIHFWDQGRUPDMRUJHQHVDUH
DFWLQJZKLOHLQDQJRUDUDEELWVDXWRVRPDOUHFHVVLYHJHQHVDUHDOVRLPSRUWDQW,QGH[VHOHFWLRQ
UHSUHVHQWVWKHPRVWHIFLHQWWRROIRUJHQHWLFLPSURYHPHQWRIEUHTXDQWLW\DQGTXDOLW\KRZHYHU
JHQHWLFFRUUHODWLRQVKDYHWREHFRQVLGHUHGDVWKHVHPD\GLIIHUEHWZHHQQHEUHDQLPDOVSHFLHV
8LIWMXYEXMSRSJFVITVSHYGMRKERMQEPWJSVHMJJIVIRXVIKMSRWSJXLI
[SVPH
-9RQ7KQJHQ$UJHQWLQD$UJHQWLQDKDVTXLWHGLYHUVHHFRUHJLRQV,QWKHORZODQGVVR\EHDQ
SURGXFWLRQUHSUHVHQWVWKHPDLQDJULFXOWXUDODFWLYLW\$ERXWRIWKHVXUIDFHFRQVLVWVRIPDLQO\
QDWXUDOJUDVVODQG7KHSDVWXUHVRI3DWDJRQLDDUHFKDUDFWHULVHGE\DFRH[LVWHQFHRIZKLWH0HULQR
VKHHSJRDWVOODPDVDQGZLOGJXDQDFRV$SDUWIURP$QJRUDJRDWVFULROORJRDWVDUHIRXQGZLWK
DGRXEOHFRDWFRPSDUDEOHWRFDVKPHUH,QWKH0DSXFKHFRPPXQLW\DVSHFLDOFULROORVKHHSZLWK
GLIIHUHQW FRORXUV DOVR VSRWWHG QDPHG /LQFD LV XVHG IRU ORFDO KRPHVSXQ SURGXFWV VROG WR
WRXULVWV
50RUDQWH3HUX7KHXVHRIIDUPDQLPDOVYDULHVZLWKDOWLWXGH,QWKHFRDVWDODUHDDJULFXOWXUH
DQGGDLU\IDUPVGRPLQDWHXSWRP$WKLJKHUDOWLWXGHVVKHHSDUHNHSWZKLOHDOSDFDV
DQGOODPDVDUHWKHPDLQEUHSURGXFLQJDQLPDOVDERYHP3UREOHPVDULVHZKHQDOSDFDVDQG
OODPDVDUHNHSWWRJHWKHUDQGDOORZHGWRLQWHUEUHHG$OSDFDVDUHVKRUQWZLFHSHU\HDU6PDOOKROGHUV
IUHTXHQWO\NHHSDOSDFDVDQGVKHHSWRJHWKHUWREDODQFHHFRQRPLFULVNV6KHHSDUHWKHQXVHGDV
FDSLWDOZKLFKFDQEHVROGDVRFFDVLRQGHPDQGV,Q6$&WKHPDLQLQFRPHFRPHVIURPEUHEXW
DOVRIURPPHDW7KHFDPSHVLQRVFRQVXPHPDLQO\DOSDFDDQGOODPDPHDWZKLOHDOSDFDDQGVKHHS
PHDWLVVROGWRWKHWRZQV,QWKH3HUXYLDQWH[WLOHLQGXVWU\VKHHSZRROLVLPSRUWDQWWRUXQWKH
EUHLQGXVWU\PRQWKVD\HDU,QDGGLWLRQDOSDFDDQGOODPDEUHLVSURFHVVHGDQGDOVRJXDQDFR
EUHH[SRUWHGIURP$UJHQWLQD7RREWDLQPRUHZHDUUHVLVWDQWWH[WLOHVDOSDFDEUHDQGZRRODUH
IUHTXHQWO\PL[HGZLWKVKHHSZRROXVHGIRUWKHZDUSDQGDOSDFDEUHLQWKHZRRIEHFDXVHVKHHS
ZRROKDVKLJKHUWHQVLOHVWUHQJWKWKDQDOSDFDEUH6LQFH3HUXKDVDOORZHGWKHFRQWUROOHG
H[SRUWRI6$&WR86$$XVWUDOLD6ZLW]HUODQGDQG&DQDGDDPRQJRWKHUV

6SYRHXEFPIW
67HOOH]86$&RPSDUHGWRWKH3HUXYLDQVLWXDWLRQWKH86$LQGXVWU\LVYHU\GLIIHUHQW7KH

SRSXODWLRQRI6$&GRQRWFRPHXQGHUDQDWLRQDOEUHHGLQJSURJUDPPH$QLPDOVZHUH
PDLQO\LPSRUWHGIURP&KLOHDQLPDOV3HUXDQLPDOVDQG%ROLYLDDQLPDOV0RVW
DOSDFDVEHORQJWRWKH+XDFD\DW\SH7KHUHDUHDERXW6XULDOSDFDVFRQVLVWLQJRIRQO\
OLQHVZLWKQRWPXFKJHQHWLFGLYHUVLW\7KH6$&LQGXVWU\LVVLPLODUWR(XURSHDQLPDOVDUHNHSWLQ
VPDOOJURXSVPDLQO\E\]RRVDQGVPDOOEUHHGHUVDVDKREE\RUVHFRQGEXVLQHVV7KHDFFHSWDQFH
RI6$&PHDWDQGOHDWKHULVORZDQGWKHIRFXVLVRQHHFHSURGXFWV7KHUHDUHWZREUHHGHUV
DVVRFLDWLRQVIRUOODPDVDQGDOSDFDVZKHUHPRVWSURJHQ\DUHUHJLVWHUHGDQGLGHQWLHGYLD'1$
DQDO\VLV6RPHNHHSHUVDOVRRZQDQJRUDJRDWVRU\DNVEXWWKHUHDUHIHZEUHHGHUVHQJDJHGLQ
ERWK6$&DQGVKHHSEUHHGLQJ
'SQQSRQEREKIQIRXHIRSQMREXSVWFIX[IIR7%'ERHSXLIVFVI
ERMQEPW
9RQ7KQJHQ$UJHQWLQH6$&DQGPRVWEUHSURGXFLQJDQLPDOVKDYHLQFRPPRQWKDWWKH\DUH
NHSWRQQDWXUDOJUDVVODQGV,QWKH86$KRZHYHUEHWWHUTXDOLW\JUDVVODQGWKDQLQ6RXWK$PHULFD
LVSURYLGHG
50RUDQWH3HUX,Q6RXWK$PHULFDDOSDFDVUHDFKWRNJRIERG\ZHLJKWZKHQ\HDUVROG
$VLPLODUZHLJKWLVDOUHDG\UHDFKHGE\PRQWKROGDOSDFDVLQWKH86$$EHWWHUVXSSO\RISURWHLQ
DQG HQHUJ\ ZRXOG LPSURYH WKH UHSURGXFWLRQ UDWH$ IRDOLQJ UDWH RI FRXOG EH DFKLHYHG
:KHQFULDVDUHWKHQZHDQHGDWPRQWKVNJERG\ZHLJKWWKHUHZRXOGEHOHVVPRUWDOLW\LQ
IHPDOHVEHFDXVHWKH\DUHQRWSUHJQDQWDQGODFWDWLQJDWWKHVDPHWLPH7KHVXSSOHPHQWDWLRQZLWK
O\VLQHLVFUXFLDOIRUEUHGLDPHWHU$QLQFUHDVHGO\VLQHVXSSO\DSSDUHQWO\FDXVHVDQLQFUHDVHLQ
EUHGLDPHWHU:KLOH3HUXYLDQDOSDFDVKDYHEUHGLDPHWHUVRIPLQWKHUVW\HDUWKH\PD\
UHDFKPLQWKH86$+RZHYHUGHFLHQFLHVLQDPLQRDFLGVPD\DOVRFDXVHEUHTXDOLW\
WRGHWHULRUDWH7KHVRFDOOHGKXQJHUEUHLVYHU\QHPEXWEUHDNVHDVLO\GXULQJ
SURFHVVLQJ8QGHU6RXWK$PHULFDQFRQGLWLRQVQRVXSSOHPHQWDWLRQLVSRVVLEOHEXWWKHH[LVWLQJ
JUDVVODQGFRXOGEHEHWWHUXVHGZKHQHJVLODJHLVRIIHUHGGXULQJSHULRGVRIIHHGVFDUFLW\LQ
SDUWLFXODUGXULQJ$XJXVW,Q-DQXDU\RU)HEUXDU\KD\DQGVLODJHFRXOGEHKDUYHVWHGDWDOWLWXGHV
RIP
' $OODLQ )UDQFH 8QGHU (XURSHDQ FRQGLWLRQV WKHUH LV D ODUJH GLYHUVLW\ RI DQLPDO EUH
SURGXFWLRQV\VWHPV7KH\DUHPDLQO\EDVHGRQH[WHQVLYHJUDVVODQGVZLWKWKHH[FHSWLRQRIDQJRUD
UDEELWVZKLFKDUHNHSWLQVWDEOHV7KHXVHRIPDUJLQDOJUDVVODQGPD\QRWEHSURWDEOHDQGWKH
DGGHGYDOXHLVREWDLQHGE\GLUHFWPDUNHWLQJ7KHVLWXDWLRQLQ(XURSHLVVLPLODUWRWKH86$DQG
&DQDGDZKHUHWKHUDZHHFHKDVRQO\DORZPDUNHWYDOXHFRPSDUHGWRSURFHVVHGSURGXFWV
*9LOD0HOR$UJHQWLQD7KHJOREDOPDUNHWLVDQDOWHUQDWLYHIRUWKHFRPPRGLW\PDUNHW%HWWHU
SULFHVFDQEHREWDLQHGZKHQWKHEUHLVFODVVLHGDFFRUGLQJWREUHGLDPHWHU,Q$UJHQWLQHIRU
H[DPSOHWKHOODPDEUHLVQRWFODVVLHG
67HOOH]86$,QWKH86$SULFHVZHUHYHU\KLJKIRUOLYHDQLPDOVZKHQRQO\DIHZDQLPDOV
ZHUHDYDLODEOH1RZSULFHVKDYHUHWXUQHGWRPRUHQRUPDOOHYHOV7KHEUHKDUYHVWHGLVVROGYLD
WZRPDLQFKDQQHOV$ERXWLVXVHGLQVPDOOLQGXVWULHVIRUKDQGLFUDIWVEXWWKHUHDUHRQO\
VPDOOSURFHVVLQJPLOOV7KHEUHSURFHVVLQJLQGXVWU\LVYHU\XQGHUGHYHORSHGLQFRQWUDVWWR
6$&UHODWHGUHVHDUFK,WLVHVWLPDWHGWKDWDERXWRIWKHEUHLVVWRUHGRUHYHQUHJDUGHGDV
ZDVWHDVSULFHVIRUUDZEUHDUHYHU\ORZDQGVKHDULQJFRVWVPD\H[FHHGEUHQHWSURWV7KH
RWKHURSWLRQLVWKHH[SRUWDWLRQWR3HUXZKHUHDZHOOGHYHORSHGEUHSURFHVVLQJDQGPDUNHWLQJ
LQGXVWU\KDVEHHQHVWDEOLVKHG

6SYRHXEFPIW
50RUDQWH3HUX7KHDOSDFDEUHPDUNHWVKDUHVWKHVDPHSUREOHPVDVRWKHUQDWXUDOEUHV

&RQVXPHUVZDQWVLPSOHDQGFKHDSFORWKHVWKLVLVSDUWLFXODUO\WUXHIRUODUJHPDUNHWVVXFKDV
&KLQDDQG,QGLD$OSDFDJDUPHQWVKRZHYHUUHTXLUHVRPHVSHFLDOFDUHHJGXULQJFOHDQLQJ
$ERXWRIFRQVXPHUVDUHSUHSDUHGWREX\IDLUWUDGHSURGXFWVRUWRSD\IRUQDWXUDOFRORXUVDQG
VXVWDLQDELOLW\RISURGXFWLRQ2QHPDMRUSUREOHPIRU6RXWK$PHULFDQSURGXFHUVLVWKHGHSHQGHQF\
RQXFWXDWLRQVRIWKH86GROODU)DUPHUVPD\UHFHLYHIRXUIROGKLJKHUSULFHVIRUH[WUDQHEUH
DQGDOVRIRUEHWWHUEUHHGLQJDQLPDOV7KHPDUNHWIRUYLFXxDEUHLVPRUHGLIFXOWDVWKHGHKDLULQJ
RIWKHFRDUVHUEUHLVODERXULQWHQVLYH7KHJRDOPXVWEHWRWUDLQORFDOVWRSURGXFHEHWWHUTXDOLW\
EUH)URPWKHZRUOGPDUNHWPRVWRIWKH6$&EUHLVWDNHQWR,WDO\
&5HQLHUL,WDO\&DVKPHUHEUHLVDQH[DPSOHRIDEUHRQWKHJOREDOPDUNHWZLWKFRQWLQXRXVO\
KLJKSULFHV7ZHQW\\HDUVDJR6XULEUHZDVPRUHLPSRUWDQWLQ,WDO\EXWWKHEUHTXDOLW\KDV
GHWHULRUDWHGVLJQLFDQWO\7KLVSUREOHPLVGXHWRDODFNRIFRQVLVWHQWVHOHFWLRQDQGWKHEUH
GLDPHWHULQSDUWLFXODUKDVWREHLPSURYHGWRUHVWRUHWKHIRUPHULPSRUWDQFHRI6$&EUH
50RUDQWH3HUX7KHGHWHULRUDWLRQRIWKHDOSDFDEUHTXDOLW\FDQEHDWWULEXWHGWRWKHSROLWLFDO
VLWXDWLRQLQ3HUXSDUWLFXODUO\LQWKHVDQGV:KHQWKHUVWDQLPDOVZHUHH[SRUWHGWR
WKH86$LQQDWLRQDOLQWHUHVWLQ6$&ZDVVWLPXODWHG)RUWKHODVW\HDUVWKHQHJDWLYHWUHQG
LQDOSDFDEUHTXDOLW\KDVVWRSSHG
67HOOH]86$,WLVRISDUWLFXODULQWHUHVWWRQRWHWKDWVLQFHWKHLULPSRUWDWLRQWRWKH86$DOSDFD
EUHTXDOLW\KDVQRWLPSURYHGDQGWKHQHQHVVRILPSRUWHGDQLPDOVKDVQRWEHHQPDLQWDLQHG
'SRGPYWMSRW
6$&DQGRWKHUEUHSURGXFLQJDQLPDOVVKDUHPRVWPDQDJHPHQWGHQRPLQDWRUV
7KH\ DUH PDLQO\ NHSW XQGHU H[WHQVLYH V\VWHPV ZLWK UHJDUG WR QXWULWLRQ DQG SURYLVLRQ RI

VWDEOHVZLWKWKHH[FHSWLRQRIWKH$QJRUDUDEELW0DOQXWULWLRQXQGHUWKHVHV\VWHPVPD\

UHGXFHWKHTXDOLW\RIEUH
$QLPDOEUHVDUHVXEMHFWHGWRWKHJOREDOPDUNHWDQGUHFHLYHQRVXEVLGLHV
7KH PDLQ WUDLWV FRQVLGHUHG LQ JHQHWLF VHOHFWLRQ IRU EUH TXDQWLW\ DQG TXDOLW\ DUH VLPLODU
DPRQJWKHGLIIHUHQWEUHSURGXFLQJVSHFLHV+RZHYHUWKHEUHHGLQJLQGLFHVKDYHWRFRQVLGHU
VSHFLHVVSHFLFJHQHWLFFRUUHODWLRQVEHWZHHQWUDLWV
,Q6$&DQGRWKHUEUHDQLPDOVWKHUHLVDODFNRIZHOORUJDQLVHGEUHHGLQJSURJUDPPHVDQG
FRRSHUDWLRQEHWZHHQEUHHGHUV
6IGSQQIRHEXMSRWJSVMQTVSZIQIRX
3URPRWLRQRIDOWHUQDWLYHSURGXFWVDQGQLFKHPDUNHWVIRUDQLPDOEUH7KHSUHVHQWLPDJHRI
DQLPDOEUHFRXOGEHPRGLHGWRZDUGVDQLPDOEUHDVDUHQHZDEOHUDZPDWHULDOEDVHGRQ
VXVWDLQDEOHSURGXFWLRQIRUWH[WLOHEXWDOVRIRUDOWHUQDWLYHSXUSRVHVHJLQVXODWLQJPDWHULDO
,QFUHDVHDQGH[FKDQJHRINQRZOHGJHDPRQJVFLHQWLVWVDQGEUHHGHUVRI6$&DQGRWKHUDQLPDO
EUHSURGXFLQJ VSHFLHV WR EHWWHU ZLWKVWDQG WKH JOREDO PDUNHW DQG WR VXSSRUW VXVWDLQDEOH
SURGXFWLRQV\VWHPV

6SYRHXEFPIW
7SYXL%QIVMGERGEQIPMHWLIEPXL
&KDLU(GJDU4XLVSH3HUX
&KDLUSHUVRQV 0 'RORUHV &LG 9i]TXH] 6SDLQ &DORJHUR 6WHOOHWWD ,WDO\ ,ORQD *XQVVHU
*HUPDQ\:LOIUHGR+XDQFD3HUX
5HSRUWHU(GJDU4XLVSH3HUXDQG$QQHJUHW.OLQNHUW*HUPDQ\
1HRQDWDOPRUWDOLW\LVRQHRIWKHPRVWOLPLWLQJIDFWRUVRIDOSDFDDQGOODPDSURGXFWLRQ1HRQDWDO
PRUWDOLW\LPSOLHVWKHORVVRIXQLWVRISURGXFWLRQDQGDOVRWKHORVVRIJHQHWLFLPSURYHPHQWRI
WKHKHUG,QGHYHORSHGFRXQWULHVQHRQDWDOPRUWDOLW\LQDOSDFDSURGXFWLRQLVVLPLODUWRRWKHU
GRPHVWLFVSHFLHV+RZHYHULQ3HUXPRUWDOLWLHVKLJKHUWKDQRURIWKHERUQFULDRI
DOSDFDKDYHEHHQUHSRUWHGLQVRPH\HDUVRUKHUGV7KHPRVWLPSRUWDQWULVNIDFWRUVIRUQHRQDWDO
PRUWDOLW\DUHGHFLHQWK\JLHQHFRQGLWLRQVRYHUFURZGLQJGHFLHQWKHDOWKVWDWXVRIPRWKHUV
SRRUFRORVWUXPLQWDNHVWUHVVIDFWRUVDQGFKDQJHVLQGLHW&RQWUROPXVWEHEDVHGRQSUHYHQWLYH
PHDVXUHVZKLFKJXDUDQWHHDJRRGOHYHORIQHRQDWDOLPPXQLW\DQGDORZOHYHORIHQYLURQPHQWDO
FRQWDPLQDWLRQZLWKLQIHFWLRXVDJHQWV%HFDXVHWKHUHLVQRVSHFLFYDFFLQDWLRQWKHEHVWVWUDWHJ\
LV JRRG PDQDJHPHQW DW ELUWK RI WKH QHZERUQ DQG JRRG PDQDJHPHQW RI WKH IHPDOHV GXULQJ
SUHJQDQF\LQFOXGLQJYDFFLQHV
$QDGHTXDWHGLHWIRU6$&VLVJUDVVJRRGTXDOLW\KD\PLQHUDOVDQGZDWHU+RZHYHUEHFDXVHRI
WKHRZQHUVGHVLUHDQGFOHYHUDGYHUWLVLQJE\WKHDQLPDOIRRGLQGXVWU\PDQ\OODPDVDQGDOSDFDV
UHFHLYHDGGLWLRQDOIHHGLQJVWXII7KLVIUHTXHQWO\FDXVHVDGLSRVLVDQGK\SHUDFLGLW\RIWKHVWRPDFK
DQGFDQOHDGWRVHYHUHPHWDEROLFSUREOHPV7KHUHVXOWLVTXLWHRIWHQIDWW\OLYHUGLVHDVHVRPHWLPHV
HYHQZLWKIDWDOFRQVHTXHQFHV
$QRWKHUSUREOHPLVWKHUHVXOWRIDEVHQWRULQVXIFLHQWPRQLWRULQJDQGWUHDWPHQWRISDUDVLWHV7KH
PDLQSUREOHPVPD\DULVHIURPSDUDVLWHVZKLFKQHHGLQWHUPHGLDWHKRVWVOLYLQJRQWKHSDVWXUH
IRUH[DPSOHWKHVPDOOOLYHUXNH'LFURFRHOLXPGHQWULWLFXP,QIHFWLRQE\WKHVHSDUDVLWHVFDQ
GDPDJHWKHOLYHUUHVXOWLQJLQFLUUKRVLV
6LQFHLQPRVWFDVHVWKHDIIHFWHGUHJLRQVDUHORFDWHGRQWKHLQQHUSDUWVRIWKHOHJVRUFORVHWRWKH
DEGRPLQDOUHJLRQWKHUVWVLJQVRIPDQJHZLOOIUHTXHQWO\EHRYHUORRNHGE\WKHRZQHU
3UREOHPVZLWKWHHWKURRWLQIHFWLRQVFDQEHVHHQLQDQLPDOVRIDOODJHVWKHUHDVRQVDUHXQFOHDU
EXWLWFRXOGKDYHDJHQHWLFFRPSRQHQW8VXDOO\HDFKPRODUWRRWKVKRXOGKDYHFRQWDFWZLWKWKH
DGMDFHQWPRODURUSUHPRODUWRRWKVRQRKD\FDQVWLFNEHWZHHQWKHWHHWKDQGLUULWDWHWKHJLQJLYD
,QVRPHDQLPDOVZLWKWRRWKSUREOHPVWKHUHDVRQPD\EHWKHGLVWDQFHEHWZHHQWKHVHWHHWK
)LQDOO\FDPHOLGVDUHFDPHOLGVQRWRWKHUDQLPDOV)RUWKLVUHDVRQLWLVQHFHVVDU\WRFRQVLGHU
VSHFLFV\VWHPVDGDSWDWLRQUHJLRQVVHDVRQVIRRGSDVWXUHDQGIDUPHUVEHFDXVHLIDQ\RIWKHVH
DUHDEVHQWWKHUHFDQEHSUREOHPVZLWK6$&KHDOWK

/I][SVHMRHI\
-RHI\
%
DOSDFD
$QGHDQ
DQLPDOJHQHWLFUHVRXUFHV
$UKDUPHULQR
$VLS

&
ELRFKHPLFDOSRO\PRUSKLVP
ELRGLYHUVLW\
ELRPHWULFDOWUDLWV
ERG\PHDVXUHPHQWV
EUHHGLQJ

'
FDPHOLG
HFRQRP\
FDPSHVLQR
FDUSHWZRRO
F'1$SRO\PRUSKLVP
&,(/DE&RORXULPHWULF6\VWHP
FOLPDWH
FOXVWHULQJDQDO\VLV
FRDWFRORXU
FRORXUFKDUW
FRQVHUYDWLRQ
FURVVEUHHG
F\WRFKURPHE

(
GHXWHULXP
GHYHORSPHQW
GLDUUKHD
GLYHUVLW\
'ORRS

)
HQWHURSDWKRJHQLF
(VFKHULFKLDFROL
HYROXWLRQ

*
IDUPPDQDJHPHQW
IHHGLQJ
IHHGSUHIHUHQFHV
EUHGLDPHWHU
HHFH
FODVVLFDWLRQ
VKHGGLQJ
ZHLJKW

DOI 10.3920/978-90-8686-727-1, Wageningen Academic Publishers 2011

-RHI\
+
JHQHLQWURJUHVVLRQ
JHQHWLF
GLVWDQFH
GLYHUVLW\
LPSURYHPHQW
YDULDELOLW\
*KH]HO
JURZWKKRUPRQH
JXDQDFR

,
KXDFD\D

LQEUHHGLQJ

0
ODFWDWLRQ
/DPDJODPD
/DPDSDFRV
OHJV
OLQNDJH
OODPD

1
0&5
PLFURVDWHOOLWH
PLON
PLWRFKRQGULDO'1$
0RJKDQL
0671
P\RVWDWLQ

2
QXFOHRWLGHVHTXHQFH

4
SK\ORJHQ\
SRO\PRUSKLVP
SRSXODWLRQDVVLJQPHQW

5
47/GHWHFWLRQ
TXDOLW\
TXDQWLW\

6
UDGLRJUDSK
UHVSRQVH

7
VFKHPH
VHJUHJDWLRQDQDO\VLV
VHOHFWLRQ
VKHDULQJ
VKHHS
EUHHGV
VSHUP'1$
VSLQH
VWDEOHLVRWRSHV
6XUL
VXVWDLQDEOH
GHYHORSPHQW
HFRQRP\
-RHI\

8
WHFKQLFDONQRZOHGJH
7ROXLGLQH%OXH
WUDGLWLRQDOEUHHGV

:
YHURWR[LJHQLF
9LFXJQDSDFRV
YLFXxD

;
ZHEVLWH
ZHOIDUH

>
]RR


D. Allain Et Al-Fibre Production in South American Camelids

Загружено:

Сведения о документе

Авторское право

Доступные форматы

Поделиться этим документом

Поделиться или встроить документ

Параметры публикации

Этот документ был вам полезен?

Это неприемлемый материал?

Авторское право:

Доступные форматы

D. Allain Et Al-Fibre Production in South American Camelids

Загружено:

Авторское право:

Доступные форматы

*MFVITVSHYGXMSRMR7SYXL%QIVMGERGEQIPMHW

0LWRFKRQGULDO'1$ PW'1$ JHQHWLFGLYHUVLW\RI9LFXJQDYLFXJQDPHQVDOLVLQ%ROLYLD 

*URZWKKRUPRQHJHQHLQOODPD /DPDJODPD FKDUDFWHULVDWLRQDQG613VLGHQWLFDWLRQ 

      

      

5\GHU0/&KDQJHVLQWKHHHFHRIVKHHSIROORZLQJGRPHVWLFDWLRQ ZLWKDQRWHRQWKHFRDWRIFDWWOH ,Q3-

   

LQWKHFRPSXWHUPHPRU\7KHIROORZLQJWUDLWVZHUHDQDO\VHGDYHUDJHEUHGLDPHWHU $)' EUH

IDOOVZLWKLQWKLVUDQJH6KRGMDHWDO  UHVXOWVIRUWKLVWUDLWLQSXUHEUHHGVZHUHDQG

ZLWKWKHQGLQJVRI<LOPD]HWDO  6H[ 3 DQGELUWKW\SH 3 KDGDVLJQLFDQW

IRUDSHULRGRIJURZWK XVXDOO\RQH\HDU LVFDXVHGE\JHQHWLFHIIHFWV %URZQHWDO 

IURPWZRVKHDULQJSHULRGV>3HULRG,JURZWKLQ'HFHPEHUWR'HFHPEHU Q  DQG

8EFPI%ZIVEKI7)ERHGSRHIRGIMRXIVZEPSJEZIVEKIFVIHMEQIXIV %*( QMRMQYQERHQE\MQYQFVI

8EFPI0IEWXWUYEVIQIERWJSVEZIVEKIFVIHMEQIXIV %*( QMRMQYQERHQE\MQYQFVIHMEQIXIVTSWMXMSR

4 4 RW!RSXWMKRMGERX

VHWRIFKDUDFWHULVWLFPHDVXUHPHQWVLQFOXGLQJDYHUDJHEUHGLDPHWHU $)' EUHGLDPHWHU

4 4 

E,MKLIWXGSRXVMFYXMSRSJZEVMEFPIW SYXSJ XSE\IWERH

*MKYVI'SRWXVEMRIHGPYWXIVMRK ;EVHWQIXLSH GSIJGMIRXGSVVIPEXMSR! 

&KXUUD &+8 DQG/DW[DEUHHGV /$& ZKLFKEHORQJWRZKDWLVUHIHUUHGWRDV/DW[DVZHUH

)UDJPHQWVFRUUHVSRQGLQJWRWKHWRWDOLW\RIWKHFRQWURO 'ORRSES DQG&\WRFKURPHE

6FHQDULR 6FHQDULR 6FHQDULR 6FHQDULR 6FHQDULR 6FHQDULR

1MXSGLSRHVMEP(2% QX(2% KIRIXMGHMZIVWMX]SJ:MGYKRE

*MKYVI%PMKRQIRXSJTSP]QSVTLMGWMXIWMHIRXMIHEGVSWWXLI']XF E ERH(PSST F VIKMSRWEREP]WIHMRXLMW

HWDO$OWHUDQG3DOXPEL*DOWLHUHWDO ,QWHUHVWLQJO\0DUtQHWDO 

WKLVSDSHU K   ZKHUHDVWKH9YYLFXJQDJURXSVKRZHGDVOLJKWO\KLJKHU

%WWSGMEXMSRSJQ]SWXEXMRKIRI 1782 TSP]QSVTLMWQ

*MKYVI(MEKVEQSJXLIWXVYGXYVEPSVKERMWEXMSRSJPPEQE+,KIRIERH724WHMWXVMFYXMSR)\SRW )) EVI

W VV  W VV  W VV V

9DOXHVIRUWL WL \ WL IRUWKH173  FDWHJRULHVLQHDFKEUHFRORXUFODVV ZKLWH

8EFPI)GSRSQMGZEPYIWJSVQIERFVIHMEQIXIV Q ERHKVIEW]IIGI[IMKLX PF EGGSVHMRKXSGSPSYVERH

'EQTEMKR (MEQIXIV ;IMKLX 6EXMS

(MEQIXIV ;IMKLX 6EXMS

(MEQIXIV ;IMKLX 6EXMS

EUHLQWKHVDPHQHQHVVUDQJHDV+XDFD\D 0F*UHJRU 2YHUWKH\HDUVWKLVWUHQGKDV

2RYQFIVSJMRHMZMHYEPW2ERYQFIVSJHMJJIVIRXEPPIPIW MRFVEGOIXWZEPYIWJVSQTVIZMSYWWXYHMIW 2I

8EFPI)\TIGXIHERHSFWIVZIHLIXIVS^]KSWMX] ,IERH,S ZEPYIWERHEZIVEKIRYQFIVSJEPPIPIWTIVPSGYW

0EGXEXMSRMRPPEQEW 0EQEKPEQE IWXMQEXMRKQMPOMRXEOI

EFG 1IERZEPYIW[MXLMREVS[[MXLHMJJIVIRXWYTIVWGVMTXPIXXIVW[IVIWMKRMGERXP]HMJJIVIRX 4 

8EFPI&SH][EXIVXYVRSZIVERHQMPOGSQTSWMXMSRMRPPEQEHEQW RYQFIVWEVIQIERW7)R! EJXIV6MIO

EFG 1IERZEPYIW[MXLMREVS[[MXLHMJJIVIRXWYTIVWGVMTXPIXXIVW[IVIWMKRMGERXP]HMJJIVIRX 4 

 7KHUHLVQRSDVWXUHLQZLQWHUWLPHWKHUHIRUHKD\DQGVXFFXOHQWIRGGHUV URRWWXEHUFOHVIUXLWV

;IIO ;IIO ;IIO ;IIO ;IIO ;IIO

*MKYVI)ZSPYXMSRSJFVIIHIVWERH[SSP OK JVSQXLIWXEVXSJXLITVSNIGXMRYTXS TIVWSREP

\RXQJHUWKDQIHPDOHV YVUHVSHFWLYHO\ :LWKHUKHLJKWZDVFPIRU

5HJUHVVLRQEHWZHHQ+*DQG+3 )LJXUH GLGQRWVKRZGLIIHUHQWFRHIFLHQWVLQPDOHVDQG

)RUFRDWFRORXUVDOSDFDVZHUHFOXVWHUHGLQJURXSV ZKLWHUHGEODFN 7KHPRVWIUHTXHQWFRDW

67HOOH] 86$ &RPSDUHGWRWKH3HUXYLDQVLWXDWLRQWKH86$LQGXVWU\LVYHU\GLIIHUHQW7KH

50RUDQWH 3HUX 7KHDOSDFDEUHPDUNHWVKDUHVWKHVDPHSUREOHPVDVRWKHUQDWXUDOEUHV

VWDEOHV ZLWKWKHH[FHSWLRQRIWKH$QJRUDUDEELW 0DOQXWULWLRQXQGHUWKHVHV\VWHPVPD\

Вам также может понравиться

0LWRFKRQGULDO'1$PW'1$JHQHWLFGLYHUVLW\RI9LFXJQDYLFXJQDPHQVDOLVLQ%ROLYLD

*URZWKKRUPRQHJHQHLQOODPD/DPDJODPDFKDUDFWHULVDWLRQDQG613VLGHQWLFDWLRQ

5\GHU0/&KDQJHVLQWKHHHFHRIVKHHSIROORZLQJGRPHVWLFDWLRQZLWKDQRWHRQWKHFRDWRIFDWWOH,Q3-

LQWKHFRPSXWHUPHPRU\7KHIROORZLQJWUDLWVZHUHDQDO\VHGDYHUDJHEUHGLDPHWHU$)'EUH

IDOOVZLWKLQWKLVUDQJH6KRGMDHWDOUHVXOWVIRUWKLVWUDLWLQSXUHEUHHGVZHUHDQG

ZLWKWKHQGLQJVRI<LOPD]HWDO6H[3DQGELUWKW\SH3KDGDVLJQLFDQW

IRUDSHULRGRIJURZWKXVXDOO\RQH\HDULVFDXVHGE\JHQHWLFHIIHFWV%URZQHWDO

IURPWZRVKHDULQJSHULRGV>3HULRG,JURZWKLQ'HFHPEHUWR'HFHPEHUQ DQG

8EFPI%ZIVEKI7)ERHGSRHIRGIMRXIVZEPSJEZIVEKIFVIHMEQIXIV%*( QMRMQYQERHQE\MQYQFVI

8EFPI0IEWXWUYEVIQIERWJSVEZIVEKIFVIHMEQIXIV%*( QMRMQYQERHQE\MQYQFVIHMEQIXIVTSWMXMSR

4 4 RW!RSXWMKRMGERX

VHWRIFKDUDFWHULVWLFPHDVXUHPHQWVLQFOXGLQJDYHUDJHEUHGLDPHWHU$)'EUHGLDPHWHU

4 4

E,MKLIWXGSRXVMFYXMSRSJZEVMEFPIWSYXSJ XSE\IWERH

*MKYVI'SRWXVEMRIHGPYWXIVMRK;EVHWQIXLSH GSIJGMIRXGSVVIPEXMSR!

&KXUUD&+8DQG/DW[DEUHHGV/$&ZKLFKEHORQJWRZKDWLVUHIHUUHGWRDV/DW[DVZHUH

)UDJPHQWVFRUUHVSRQGLQJWRWKHWRWDOLW\RIWKHFRQWURO'ORRSESDQG&\WRFKURPHE

1MXSGLSRHVMEP(2%QX(2% KIRIXMGHMZIVWMX]SJ:MGYKRE

*MKYVI%PMKRQIRXSJTSP]QSVTLMGWMXIWMHIRXMIHEGVSWWXLI']XFE ERH(PSSTF VIKMSRWEREP]WIHMRXLMW

HWDO$OWHUDQG3DOXPEL*DOWLHUHWDO,QWHUHVWLQJO\0DUtQHWDO

WKLVSDSHUK ZKHUHDVWKH9YYLFXJQDJURXSVKRZHGDVOLJKWO\KLJKHU

%WWSGMEXMSRSJQ]SWXEXMRKIRI1782 TSP]QSVTLMWQ

*MKYVI(MEKVEQSJXLIWXVYGXYVEPSVKERMWEXMSRSJPPEQE+,KIRIERH724WHMWXVMFYXMSR)\SRW)) EVI

WVVWVVWVVV

9DOXHVIRUWLWL\WLIRUWKH173FDWHJRULHVLQHDFKEUHFRORXUFODVVZKLWH

8EFPI)GSRSQMGZEPYIWJSVQIERFVIHMEQIXIVQ ERHKVIEW]IIGI[IMKLXPF EGGSVHMRKXSGSPSYVERH

'EQTEMKR (MEQIXIV ;IMKLX 6EXMS

EUHLQWKHVDPHQHQHVVUDQJHDV+XDFD\D0F*UHJRU2YHUWKH\HDUVWKLVWUHQGKDV

2RYQFIVSJMRHMZMHYEPW2ERYQFIVSJHMJJIVIRXEPPIPIWMRFVEGOIXWZEPYIWJVSQTVIZMSYWWXYHMIW 2I

8EFPI)\TIGXIHERHSFWIVZIHLIXIVS^]KSWMX],IERH,S ZEPYIWERHEZIVEKIRYQFIVSJEPPIPIWTIVPSGYW

0EGXEXMSRMRPPEQEW0EQEKPEQE IWXMQEXMRKQMPOMRXEOI

EFG 1IERZEPYIW[MXLMREVS[[MXLHMJJIVIRXWYTIVWGVMTXPIXXIVW[IVIWMKRMGERXP]HMJJIVIRX4

8EFPI&SH][EXIVXYVRSZIVERHQMPOGSQTSWMXMSRMRPPEQEHEQWRYQFIVWEVIQIERW7)R! EJXIV6MIO

EFG 1IERZEPYIW[MXLMREVS[[MXLHMJJIVIRXWYTIVWGVMTXPIXXIVW[IVIWMKRMGERXP]HMJJIVIRX4

7KHUHLVQRSDVWXUHLQZLQWHUWLPHWKHUHIRUHKD\DQGVXFFXOHQWIRGGHUVURRWWXEHUFOHVIUXLWV

;IIO ;IIO ;IIO ;IIO ;IIO ;IIO

*MKYVI)ZSPYXMSRSJFVIIHIVWERH[SSPOK JVSQXLIWXEVXSJXLITVSNIGXMRYTXSTIVWSREP

\RXQJHUWKDQIHPDOHVYVUHVSHFWLYHO\:LWKHUKHLJKWZDVFPIRU

5HJUHVVLRQEHWZHHQ+*DQG+3)LJXUHGLGQRWVKRZGLIIHUHQWFRHIFLHQWVLQPDOHVDQG

)RUFRDWFRORXUVDOSDFDVZHUHFOXVWHUHGLQJURXSVZKLWHUHGEODFN7KHPRVWIUHTXHQWFRDW

67HOOH]86$&RPSDUHGWRWKH3HUXYLDQVLWXDWLRQWKH86$LQGXVWU\LVYHU\GLIIHUHQW7KH

50RUDQWH3HUX7KHDOSDFDEUHPDUNHWVKDUHVWKHVDPHSUREOHPVDVRWKHUQDWXUDOEUHV

VWDEOHVZLWKWKHH[FHSWLRQRIWKH$QJRUDUDEELW0DOQXWULWLRQXQGHUWKHVHV\VWHPVPD\