8FTUNPSFMBOE1BSL .BTUFS1MBO $&.12:/('*(0(176 &LW\RI3RUWODQG 9HUD.DW]0D\RU -LP)UDQFHVFRQL&RPPLVVLRQHU 3RUWODQG3DUNV 5HFUHDWLRQ 3URMHFW6WDII =DUL6DQWQHU3DUNV'LUHFWRU 0DU\$QQH&DVVLQ'HVLJQDQG'HYHORSPHQW0DQDJHU *D\*UHJHU3XEOLF,QYROYHPHQW0DQDJHU 5RG:RMWDQLN3URMHFW0DQDJHU %U\DQ$SWHNDU3XEOLF,QYROYHPHQW&RRUGLQDWRU 9LFWRULD:HVW/DQGVFDSH'HVLJQHU .HHO\(GPRQVRQ3XEOLF,QYROYHPHQW -DQH(LFKHQEHUJHU$GPLQLVWUDWLYH$VVLVWDQW &LWL]HQV$GYLVRU\&RPPLWWHH %UHWW%D\ORU60,/(1HLJKERUKRRG$VVRFLDWLRQ *UHJ%HUU\6(6RFFHU&OXE 5RQ%ROH\3RUWODQG0HWURSROLWDQ6RIWEDOO$VVRFLDWLRQ 3KLO&DSSDORQJD(DVWPRUHODQG5HSUHVHQWDWLYH (LOHHQ)LW]VLPRQV/RFDO+LVWRULDQ 0DWW+DLQOH\6HOOZRRG0RUHODQG<RXWK%DVHEDOO5HSUHVHQWDWLYH (G3HWHUVRQ3RUWODQG&LW\/HDJXH%DVHEDOO .LWW\.QXWVRQ,PPHGLDWH1HLJKERU5HSUHVHQWDWLYH 6XVDQ.URKO:LOFK1HLJKERUKRRG3DUHQW5HSUHVHQWDWLYH :DOW0LQWNHVNL-RKQVRQ&UHHN:DWHUVKHG&RXQFLO5HSUHVHQWDWLYH 1HDO3DGGLVRQ0RGHO%RDWLQJ5HSUHVHQWDWLYH $XVWLQ3ULWFKDUG6HQLRU5HSUHVHQWDWLYH 0DU\$QQH6FKPLGW(QYLURQPHQWDO$ZDUHQHVV5HSUHVHQWDWLYH -LP7XSSHU/DZQ%RZOLQJ5HSUHVHQWDWLYH 0DUN:LOVRQ(FRORJLVW &RQVXOWDQWV -HDQQH/DZVRQ-HDQQH/DZVRQ$VVRFLDWHV)DFLOLWDWRU 0DULDQQH=DUNLQ0DFOHRG5HFNRUG/DQGVFDSH$UFKLWHFWV (G&UDQH&UDQH0HUVHWK(QJLQHHUV 3URMHFW$GYLVRU\&RPPLWWHH 7LP.XKQ8QLWHG6WDWHV$UP\&RUSVRI(QJLQHHUV0HUUL0DUW]7HWUD7HFK,QF 'DU\O+RXWPDQ&LW\RI3RUWODQG(QGDQJHUHG6SHFLHV$FW3URJUDP %UHWW.HVWHUVRQ3RUWODQG'HSDUWPHQWRI7UDQVSRUWDWLRQ 'DQLHOD&DUJLOO%XUHDXRI(QYLURQPHQWDO6HUYLFHV6WDFH\:HQJHU%XUHDXRI 'HYHORSPHQW6HUYLFHV1HLO7DQFUHDQG%HWV\5HGIHDUQ'LVWULFW6XSHULQWHQGHQWV 'DYH.DKOHU8UEDQ)RUHVWHU9LNL9DQQHPDQ5HFUHDWLRQ6XSHUYLVRU L 7$%/(2)&217(176 $&.12:/('*(0(176 , 7$%/(2)&217(176 ,,, $33(1',&(6 Y %,%/,2*5$3+< Y (;(&87,9(6800$5< 9,, ,1752'8&7,21 ;, 6WXG\3XUSRVH [L /RFDWLRQ [L 3DUN&RQWH[W [L 3DUN+LVWRU\ [L (;,67,1*&21',7,216 &XUUHQW/DQG8VH =RQLQJDQG/DQG8VH5HJXODWLRQV ([LVWLQJ)LUH6WDWLRQ 7RSRJUDSK\ 6RLO&RQGLWLRQV 9HJHWDWLRQ 3DUNLQJ 8QLYHUVDOO\$FFHVVLEOH(QWU\/RFDWLRQV &LUFXODWLRQ6\VWHP &DVWLQJ3RQG 6NDYRQH6WDGLXP %DOO)LHOGV 5HVWURRP3LFQLF6WUXFWXUH /DZQ%RZOLQJ 7HQQLV&RXUWV 3LFQLFDUHDV 3OD\DUHD %DVNHWEDOO&RXUW 3XEOLF$UW 0DLQWHQDQFH%XLOGLQJ 8WLOLWLHV 6LJQDJH 6SRUWV8VHU*URXSV &U\VWDO6SULQJV&UHHN&URVVLQJV &U\VWDO6SULQJV:DWHUVKHG &UHHN +\GURORJ\ :DWHU4XDOLW\ )LVK :LOGOLIH+DELWDW &U\VWDO6SULQJV&UHHN)ORRGLQJ,VVXHV &U\VWDO6SULQJV&UHHN%LRORJLFDO6WXGLHV 86$&()HDVLELOLW\6WXG\ 86$&(3UHIHUUHG$OWHUQDWLYH 0$67(53/$1352&(66 0DVWHU3ODQ%DFNJURXQG (DUOLHU3ODQQLQJ3URFHVV 0 $67(53/$1 LLL 7$%/(2)&217(176 ,QYROYHPHQW2I7KH8QLWHG6WDWHV$UP\&RUSVRI(QJLQHHUV 86$&( 3UHVHQWDWLRQRI$OWHUQDWLYH&RQFHSWV &RQFHSW &RQFHSW )LQDO5HFRPPHQGDWLRQV ),1$/0$67(53/$1 ),1$/0$67(53/$1 0DVWHU3ODQ'HYHORSPHQW)HDWXUHV 3DUN(QWU\/RFDWLRQV 6NDYRQH6WDGLXP 7HQQLV&RXUWV 0XOWL3XUSRVH)LHOGV 6RIWEDOO %DVHEDOO)LHOGV 6RFFHU)LHOG 5HVWURRP0DLQWHQDQFH)DFLOLW\ &U\VWDO6SULQJV&UHHN5HVWRUDWLRQ 3HUPLWVDQG&RRUGLQDWLRQIRU6WUHDP5HVWRUDWLRQ:RUN &DVWLQJ3RQG ,QGLYLGXDO*URXS3LFQLF2SSRUWXQLWLHV &KLOGUHQ·V3OD\$UHD %DVNHWEDOO&RXUW /DZQ%RZOLQJ 6NDWHSDUN)DFLOLW\ 3DWK7UDLO6\VWHP %HQFKHV 5HVWURRPV,QWHUSUHWLYH$UHD 3DUNLQJ 0F/RXJKOLQ%RXOHYDUG2Q 2II5DPS 8WLOLWLHV $UWLQWKH3DUN $'$&RPSOLDQFH 'URSRIIDUHD 7UHHVDQG%XIIHUV 2II/HDVK$UHD 6LJQDJH ,03/(0(17$7,21 0DVWHU3ODQ'HYHORSPHQW ,PSOHPHQWDWLRQ6WUDWHJ\ &RVW(VWLPDWHV ,PPHGLDWH3ULRULWLHV\HDUV 0LG7HUP3ULRULWLHV²\HDUV /RQJ7HUP3ULRULWLHV²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·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·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·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¶·VLWZDVUHSRUWHG :HVWPRUHODQG3DUN&D·V WKDWWKHSDUNVHUYHGDVWKHORFDODLUSRUWNQRZQDV%URRP)LHOG,QWKH &LW\3ODQQLQJ&RPPLVVLRQUHFRPPHQGHGWKDWDSODQSUHSDUHGE\DUFKLWHFW )UDQFLV % -DFREEHUJHUIRU WKLV UHFHQWO\ DFTXLUHG DFUH SDUN IRUPHUO\ 7KH6HOOZRRG%HHLVDIUHHPRQWKO\QHZVSDSHUHVWDEOLVKHGLQ(ULF1RUEHUJWKHFXUUHQWHGLWRUDWWHQGHG PDQ\RIWKH:HVWPRUHODQG0DVWHU3ODQQLQJ0HHWLQJV 7KH%HH$UWLFOH´%URRP)LHOGKHURLFVVHWPDUNIRU-RKQ%LDQFRµ-DQXDU\ 0 $67(53/$1 [L ,1752'8&7,21 3ODQVXEPLWWHGIRU:3$3URMHFW NQRZQDV)DLUZD\V$GGLWLRQ EHDGRSWHGDQGWKDW´WKHSDUN VHUYH WZR EURDGIXQFWLRQV /RFDO6HUYLFHWRWKHDGMDFHQWUHVLGHQWLDOGLVWULFWVDQG 7RUHQGHUFLW\ZLGHEHQHILWVVXFKDVSURWHFWLRQRIWKHWUDIILFVDIHW\DQG DSSHDUDQFHRI0F/RXJKOLQ%RXOHYDUGDVDPDMRUWUDIILF´IUHHZD\µHQWUDQFHWR WKHFLW\µ,QWKHODWH·VWKH&LW\RI3RUWODQGDQGWKH)HGHUDOJRYHUQPHQW EHJDQWRGHYHORSWKHYLVLRQRI-DFREEHUJHU·VSODQDVD¶PDNHZRUN·SURSRVDO XQGHUWKH:RUNV3URJUHVV$GPLQLVWUDWLRQ :3$ 8QGHU:3$3URMHFW1R %WKHIO\FDVWHU·VSRRO FDVWLQJSRQG DQGWKHPRGHO\DFKWODJRRQ GXFN SRQG ZHUHFRQVWUXFWHG7KHPRGHO\DFKWODJRRQZDVQRWRULJLQDOO\LQFOXGHG LQWKHRULJLQDODSSOLFDWLRQEXWWKH´UHDVRQIRUZRUNLQJRQWKHODJRRQXQGHU