The Future of Post-human Transportation: A Preface to a New Theory of Networks and Operations 1443840491, 9781443840491


225 98 4MB

English Pages [615] Year 2012

Report DMCA / Copyright

DOWNLOAD PDF FILE

Table of contents :
BOOKS ALSO BY PETER BAOFU
CONTENTS
TABLES
ACKNOWLEDGMENTS
ABBREVIATIONS
PART ONE
CHAPTER 1
PART TWO
CHAPTER 2
PART THREE
CHAPTER 3
PART FOUR
CHAPTER 4
BIBLIOGRAPHY
INDEX
Recommend Papers

The Future of Post-human Transportation: A Preface to a New Theory of Networks and Operations
 1443840491, 9781443840491

  • 0 0 0
  • Like this paper and download? You can publish your own PDF file online for free in a few minutes! Sign Up
File loading please wait...
Citation preview

7KH)XWXUHRI 3RVW+XPDQ7UDQVSRUWDWLRQ 

7KH)XWXUHRI 3RVW+XPDQ7UDQVSRUWDWLRQ

$3UHIDFHWRD1HZ7KHRU\ RI1HWZRUNVDQG2SHUDWLRQV     %\ 

3HWHU%DRIX  



 &$0%5,'*(6&+2/$56 38%/,6+,1*    

   

   7KH)XWXUHRI3RVW+XPDQ7UDQVSRUWDWLRQ $3UHIDFHWRD1HZ7KHRU\RI1HWZRUNVDQG2SHUDWLRQV E\3HWHU%DRIX  7KLVERRNILUVWSXEOLVKHG  &DPEULGJH6FKRODUV3XEOLVKLQJ  %DFN&KDSPDQ6WUHHW1HZFDVWOHXSRQ7\QH1(;;8.   %ULWLVK/LEUDU\&DWDORJXLQJLQ3XEOLFDWLRQ'DWD $FDWDORJXHUHFRUGIRUWKLVERRNLVDYDLODEOHIURPWKH%ULWLVK/LEUDU\   &RS\ULJKW‹E\3HWHU%DRIX  $OOULJKWVIRUWKLVERRNUHVHUYHG1RSDUWRIWKLVERRNPD\EHUHSURGXFHGVWRUHGLQD UHWULHYDOV\VWHPRUWUDQVPLWWHGLQDQ\IRUPRUE\DQ\PHDQVHOHFWURQLFPHFKDQLFDO SKRWRFRS\LQJUHFRUGLQJRURWKHUZLVHZLWKRXWWKHSULRUSHUPLVVLRQRIWKHFRS\ULJKWRZQHU  ,6%1  ,6%1   

BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 7R7KRVHLQWKH)XWXUH:RUOGEH\RQG1HWZRUNVDQG2SHUDWLRQV                                     

        

 



BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB %22.6$/62%DQG@ VHHN«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´ :.P  +RZHYHUIRUWKHFULWLFVWKHVWXG\RI1HZ3HGHVWULDQLVPDQGWKHDQWL VHGHQWDU\ OLIHVW\OH KDV VRPH PDMRU SUREOHPV &RQVLGHU IRU LOOXVWUDWLRQ D IHZH[DPSOHVEHORZ )LUVWO\ RQH PDLQ FULWLFLVP RI WKH VWXG\ RI 1HZ 3HGHVWULDQLVP DQG WKHDQWLVHGHQWDU\OLIHVW\OHLVWKDWLWVLGHRORJ\LVSHUVXDVLYHUHODWLYHWRLWV VXSSRUWHUV )RU LQVWDQFH WKRVH ZKR DFFHSW 1HZ 3HGHVWULDQLVP WHQGV WR DOVR VXSSRUW DQ DQWLVHGHQWDU\ OLIHVW\OH DVVRFLDWHG ZLWK LW IRU ZDONLQJ DQG F\FOLQJ²EXW13GRHVQRWGUDZDORWRIVXSSRUWIURPWKRVHZKRDUHVWLOOLQ ORYHZLWKWKHFDUFXOWXUHDQGDOOLWVFRQYHQLHQFH $QG VHFRQGO\ DQRWKHU PDLQ FULWLFLVP RI WKH VWXG\ RI 1HZ 3HGHVWULDQLVPDQGWKHDQWLVHGHQWDU\OLIHVW\OHLVWKDWLWFDQJHWWRRUDGLFDO DWWLPHV

&KDSWHU,QWURGXFWLRQ²7KH&RQYHQLHQFHRI7UDQVSRUWDWLRQ 





)RU LQVWDQFH LQ  ³$UWK SURSRVHG WKDW D 3HGHVWULDQ 9LOODJH EH EXLOW IRU WKH DGXOW KRPHOHVV LQ 9ROXVLD &RXQW\ )ORULGD´ EXW ³WKH SURSRVDO«JDUQHU>HG@GHULVLRQIURPVRPHTXDUWHUVE\EHLQJFDOOHGHLWKHUD

UHVRUWIRUWKHKRPHOHVV RUD JXODJUHVHUYDWLRQ ´RUHYHQD³OHSHUFRORQ\´ E\5HEEHFFD0DKRQH\   :.Q 

7KH3DQRUDPLF$UJXPHQW $QGILIWKO\XQOLNHWKHSUHYLRXVIRXUDUJXPHQWV YL]WKHPHQWDOWKH QDWXUDOWKHVRFLHWDODQGWKHFXOWXUDO ²WKHILIWKRQHWREHLQWURGXFHGKHUH FDQ EH FDOOHG LQ WKH DEVHQFH RI EHWWHU ZRUGV DJDLQ WKH SDQRUDPLF DUJXPHQW ZKLFK OHDUQV IURP DOO RWKHU WKHRUHWLFDO DSSURDFKHV ZKLFK LQFOXGH WKH SUHYLRXV IRXU DUJXPHQWV DQG DOVR RWKHU H[DPSOHV DV ZLOO EH LQWURGXFHG LQ WKH UHVW RI WKLV ERRN  ZLWKRXW KRZHYHU IDYRULQJ DQ\ RI WKHPQRUWU\LQJWRLQWHJUDWHWKHP DVWKH\DUHQRWQHFHVVDULO\FRPSDWLEOH ZLWK HDFK RWKHU DV WKH LQWURGXFWLRQ RI WKH WKHRUHWLFDO GHEDWH LQ WKH SUHYLRXVVXEVHFWLRQVKDVVKRZQ 

7KH3DQRUDPLF7KHRU\RI7UDQVSRUWDWLRQ 0\SDQRUDPLFDUJXPHQWFDQEHPRUHSUHFLVHO\FDOOHGWKHSDQRUDPLF WKHRU\ RI WUDQVSRUWDWLRQ VLQFH LW LV WR SURSRVH D QHZ WKHRU\ RI QHWZRUNV DQGRSHUDWLRQVLQWKHVWXG\RIWUDQVSRUWDWLRQ 0\ SDQRUDPLF WKHRU\ RI WUDQVSRUWDWLRQ KDV IRXU PDMRU GLVWLQFW IHDWXUHV )LUVWO\P\WKHRU\PDNHVJRRGXVHRIDOOWKHRUHWLFDODSSURDFKHVWRWKH VWXG\ RI WUDQVSRUWDWLRQ LQ UHODWLRQ WR QHWZRUNV DQG RSHUDWLRQV EH WKH\ DERXWWKHPHQWDODUJXPHQWWKHQDWXUDODUJXPHQWWKHVRFLHWDODUJXPHQWRU WKHFXOWXUDODUJXPHQW²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



7KH)XWXUHRI3RVW+XPDQ7UDQVSRUWDWLRQ 



SULQFLSOH H WKHILIWKWKHVLVWKHH[SOLFDELOLW\LQH[SOLFDELOLW\SULQFLSOH I  WKH VL[WK WKHVLV WKH ILFWLRQUHDOLW\ SULQFLSOH J  WKH VHYHQWK WKHVLV WKH ILQLWHQHVVWUDQVILQLWHQHVV SULQFLSOH K  WKH HLJKWK WKHVLV WKH SUHFLVHQHVV YDJXHQHVV SULQFLSOH L  WKH QLQWK WKHVLV WKH VLPSOHQHVVFRPSOLFDWHGQHVV SULQFLSOH M  WKH WHQWK WKHVLV WKH RSHQQHVVKLGGHQQHVV SULQFLSOH N  WKH HOHYHQWK WKHVLV WKH GHQVHQHVVHPSWLQHVV SULQFLSOH O  WKH WZHOIWK WKHVLV WKH FKDQJHFRQVWDQF\ SULQFLSOH P  WKH WKLUWHHQWK WKHVLV WKH RUGHUFKDRV SULQFLSOH Q  WKH IRXUWHHQWK WKHVLV WKH VORZQHVVTXLFNQHVV SULQFLSOH R  WKH ILIWHHQWK WKHVLV WKH H[SDQVLRQFRQWUDFWLRQ SULQFLSOH S  WKH VL[WHHQWK WKHVLV WKH WKHRU\SUD[LV SULQFLSOH T  WKH VHYHQWHHQWK WKHVLV WKH FRQYHQWLRQQRYHOW\ SULQFLSOH U  WKH HLJKWHHQWK WKHVLV WKH HYROXWLRQ WUDQVIRUPDWLRQ SULQFLSOH V  WKH QLQHWHHQWK WKHVLV WKH V\PPHWU\ DV\PPHWU\ SULQFLSOH W  WKH WZHQWLHWK WKHVLV WKH VRIWQHVVKDUGQHVV SULQFLSOH X WKHWZHQW\ILUVWWKHVLVWKHVHULRXVQHVVSOD\IXOQHVVSULQFLSOH Y WKHWZHQW\VHFRQGWKHVLVWKHDFWLYHQHVVLQDFWLYHQHVVSULQFLSOH Z WKH WZHQW\WKLUG WKHVLV WKH UHJUHVVLRQSURJUHVVLRQ SULQFLSOH [  WKH WZHQW\ IRXUWK WKHVLV WKH VDPHQHVVGLIIHUHQFH SULQFLSOH \  WKH  WZHQW\ILIWK WKHVLVWKHVWDELOLW\UHDFWLRQSULQFLSOHDQG ] WKHWZHQW\VL[WKWKHVLVWKH SRVWKXPDQ SDQRUDPD²WR EH HODERUDWHG LQ WKH UHVW RI WKH ERRN ZLWK D VXPPDU\LQWKHFRQFOXGLQJFKDSWHU %HFDXVH RI WKH ODVW WKHVLV RQ ³WKH SRVWKXPDQ SDQRUDPD´ WKH ZRUG ³SDQRUDPLF´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²WKH VHPLQDO SURMHFW KHUH LI VXFFHVVIXO ZLOO IXQGDPHQWDOO\ FKDQJH WKH ZD\ WKDW ZH WKLQN DERXW QHWZRUNVDQGRSHUDWLRQVLQWKHVWXG\RIWUDQVSRUWDWLRQ WRJHWKHUZLWKRWKHU GHEDWHV DV ZLOO EH GLVFXVVHG LQ WKH UHVW RI WKH ERRN  IURP WKH FRPELQHG SHUVSHFWLYHV RI WKH PLQG QDWXUH VRFLHW\ DQG FXOWXUH ZLWK HQRUPRXV LPSOLFDWLRQV IRU WKH KXPDQ IXWXUH DQG ZKDW , RULJLQDOO\ FDOOHG LWV ³SRVW KXPDQ´IDWH

7KHRU\DQG0HWD7KHRU\ 7KHSDQRUDPLFDUJXPHQWRUWKHSDQRUDPLFWKHRU\RIWUDQVSRUWDWLRQ SUHVXSSRVHVVRPHNLQGRIPHWDWKHRU\LQVSHFLDOUHODWLRQWRPHWKRGRORJ\

&KDSWHU,QWURGXFWLRQ²7KH&RQYHQLHQFHRI7UDQVSRUWDWLRQ 





DQG RQWRORJ\²MXVW DV DOO WKHRULHV HLWKHU H[SOLFLWO\ RU LPSOLFLWO\ UHTXLUH WKHLURZQYHUVLRQVRIPHWDWKHRU\

0HWD7KHRU\ $VVRRIWHQFODULILHGLQP\SUHYLRXVERRNV²WKHRU\DQGPHWDWKHRU\ EURDGO\ VSHDNLQJ FDQ EH IXUWKHU FODVVLILHG LQWR GLIIHUHQW FDWHJRULHV DV VKRZQEHORZ  ‡2Q7KHRU\ ²([LQUHODWLRQWRWKHPLQG ²([LQUHODWLRQWRQDWXUH ²([LQUHODWLRQWRVRFLHW\ ²([LQUHODWLRQWRFXOWXUH ‡2Q0HWD7KHRU\ ²([LQUHODWLRQWRPHWKRGRORJ\ ²([LQUHODWLRQWRRQWRORJ\  (DFK FDWHJRU\ LQ LWV WXUQ FDQ WKHQ EH IXUWKHU VXEGLYLGHG LQWR GLIIHUHQW OHYHOVRIDQDO\VLV²ZKLFKZLOOEHHODERUDWHGLQWKHQH[WWZRVHFWLRQV DQG VXPPDUL]HGLQ7DEOH  :LWK WKLV UHPLQGHU LQ PLQG , DOUHDG\ SURSRVHG LQ P\ SUHYLRXV ERRNV  P\ GLVWLQFWLYH FRQWULEXWLRQ WR PHWDWKHRU\ QDPHO\ PHWKRGRORJ\ OLNH ³WKHRU\ RI PHWKRGRORJLFDO KROLVP´ ³FRPSOH[ WKHRU\ RI GDWD DQDO\VLV´ DQG ³FULWLFDOGLDOHFWLF WKHRU\ RI IRUPDO VFLHQFH´ IRU LQVWDQFH  DQG RQWRORJ\ OLNH ³WKHRU\ RI H[LVWHQWLDO GLDOHFWLFV´ DQG ³FRQWUDVWLYH WKHRU\RIUDWLRQDOLW\´IRULQVWDQFH  7KH QH[W WZR VHFWLRQV DUH WR LQWURGXFH P\ PHWDWKHRU\²HVSHFLDOO\ H[LVWHQWLDO GLDOHFWLFV DQG VRSKLVWLFDWHG PHWKRGRORJLFDO KROLVP UHVSHFWLYHO\²WR EH UHSHDWHG RIWHQ YHUEDWLP ZLWK RQO\ D IHZ XSGDWHG UHYLVLRQV IURPP\SUHYLRXVZRUNVDVWKLVLVVRPHWKLQJWKDW,RIWHQGRLQ HDFK QHZ ERRN RI PLQH DV DQ LQWURGXFWLRQ WR VRPH EDFNJURXQG LQIRUPDWLRQIRUWKHFRQYHQLHQFHRIWKHUHDGHUV ,QWKHSURFHVV,VKDOODOVRLQWURGXFHP\QXPHURXVQHZWKHRULHV RUWR EHH[DFWRIWKHPLQERRNVVRIDUDVRI-DQXDU\ LQUHODWLRQWR WKHIRXUFDWHJRULHVRIWKHPLQGQDWXUHVRFLHW\DQGFXOWXUHLQWKHFRQWH[W RIWKHRU\ DVDOVRVXPPDUL]HGLQ7DEOH 



7KH)XWXUHRI3RVW+XPDQ7UDQVSRUWDWLRQ 



$8QLILHG7KHRU\RI(YHU\WKLQJ ,QWKHHQGP\GLVWLQFWLYHFRQWULEXWLRQWRERWKPHWDWKHRU\DQGWKHRU\ VHUYHVDVDIRXQGDWLRQWRXQLI\DOOGRPDLQVRINQRZOHGJH LHWKHVRFLDO VFLHQFHVWKHIRUPDOVFLHQFHVWKHQDWXUDOVFLHQFHVDQGWKHKXPDQLWLHV IRU DQ RYHUDUFKLQJ XQGHUVWDQGLQJ RI DOO IRUPV RI UHDOLW\ E\ ZD\ RI VRPH RQWRORJLFDOSULQFLSOHVDWWKHPHWDWKHRUHWLFDOOHYHODQGWKHFRPSUHKHQVLYH SHUVSHFWLYHV RI WKH PLQG QDWXUH VRFLHW\ DQG FXOWXUH DW WKH WKHRUHWLFDO OHYHO²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³XQLILHG´GRHVQRWKDYHWRPHDQDQLQWHJUDWLYH DSSURDFKLQDQDUURZVHQVHQRUDV\VWHPVDSSURDFKLQDEURDGRQHERWK RIZKLFK,KDYHFULWLFDOO\UHEXNHG LQP\SUHYLRXVERRNV ZKLOHOHDUQLQJ IURPWKHP 7KLVRYHUDUFKLQJSURMHFW FRQVLVWLQJRIQXPHURXVWKHRULHVRIPLQHDV ZLOOEHVXPPDUL]HGLQWKHQH[WVHFWLRQ WKXVFRQVWLWXWHVP\JUDQGXQLIHG WKHRU\RIHYHU\WKLQJLQWKHZRUOGDQGEH\RQG

7KH/RJLFRI([LVWHQWLDO'LDOHFWLFV 7RVWDUWWKH RQWRORJ\ RI H[LVWHQWLDO GLDOHFWLFV FDQ EH VXPPDUL]HG LQ WKLVVHFWLRQ²RIWHQYHUEDWLP ZLWKRQO\DIHZXSGDWHGUHYLVLRQV IURPP\ SUHYLRXVZRUNVDVWKLVLVVRPHWKLQJWKDW,UHJXODUO\GRLQHDFKQHZERRN RI PLQH DV DQ LQWURGXFWLRQ WR VRPH EDFNJURXQG LQIRUPDWLRQ IRU WKH FRQYHQLHQFHRIWKHUHDGHUV $IWHUDOOWKLVERRNOLNHDOORWKHUVRIPLQHLVLQFRQYHUVDWLRQZLWKDOO SUHYLRXV RQHV RI PLQH IRU WKH ILQDO DLP WR FRQYHUJH DOO RI WKHP LQWR D ODUJHUJUDQGSURMHFWRQWKHIXWXUHRILQWHOOLJHQWOLIHERWKKHUHRQHDUWKDQG WKHUHLQGHHSVSDFHXQWRPXOWLYHUVHV 7KH VXPPDU\ FDQ EH RUJDQL]HG LQ UHODWLRQ WR D  WKH FRQFHSWLRQ RI H[LVWHQWLDOGLDOHFWLFV RULWVRQWLFV  E WKHV\QWD[RIH[LVWHQWLDOGLDOHFWLFV RU LWV RQWRPHWKRGRORJ\ DQG RQWRORJLF  F  WKH VHPDQWLFV RI H[LVWHQWLDO GLDOHFWLFV RU LWV RQWRVHPDQWLFV  DQG G  WKH SUDJPDWLFV RI H[LVWHQWLDO

&KDSWHU,QWURGXFWLRQ²7KH&RQYHQLHQFHRI7UDQVSRUWDWLRQ 





GLDOHFWLFV RU LWV RQWRSUDJPDWLFV  UHVSHFWLYHO\ KHUHDIWHU²DJDLQ RIWHQ YHUEDWLP 7KLVPHDQVWKDWIRUWKRVHUHDGHUVZKRKDGUHDGVRPHRIP\SUHYLRXV ERRNVWKHVXPPDU\EHORZLVUHDOO\QRWPXFKQHZ DOPRVWYHUEDWLPZLWK RQO\VRPHXSGDWHGUHYLVLRQV  %XW IRU WKRVH ZKR KDYH QHYHU UHDG P\ SUHYLRXV ERRNV LW LV D JRRG UHYLHZRIWKHP

7KH&RQFHSWLRQRI([LVWHQWLDO'LDOHFWLFV RU,WV2QWLFV  7KLVRQWRORJ\ ZDVRULJLQDOO\ GHVLJQDWHGDV ³H[LVWHQWLDOGLDOHFWLFV´LQ %H\RQG &DSLWDOLVP WR 3RVW&DSLWDOLVP KHUHLQ DEEUHYLDWHG DV %&3&  DOWKRXJKLWZDVDOUHDG\DQDO\]HGLQRWKHUERRNVRIPLQHOLNHWKHYROXPHV RI7KH)XWXUHRI+XPDQ&LYLOL]DWLRQ )+& 7KH)XWXUHRI&DSLWDOLVPDQG 'HPRFUDF\ )&'  7KH )XWXUH RI 3RVW+XPDQ &RQVFLRXVQHVV )3+&  DQGWKHYROXPHVRI%H\RQG'HPRFUDF\WR3RVW'HPRFUDF\ %'3'  /HVW DQ\ FRQIXVLRQ RFFXUV LW LV LPSRUWDQW WR VWUHVV DW WKH RXWVHW WKDW WKH ZRUG H[LVWHQWLDO  LQ ³H[LVWHQWLDO GLDOHFWLFV´ KDV QRWKLQJ WR GR ZLWK ([LVWHQWLDOLVP ZKLFK , UHEXNHG LQ )+& )&' DQG DOVR )3+& ,QVWHDG WKH ZRUG KHUH PHUHO\ UHIHUV WR WKH H[LVWHQFH RI LQWHOOLJHQW OLIH ERWK SULPLWLYHDQGDGYDQFHG LQDEURDGVHQVH 6RPH%DVLF&RQFHSWV 7KH FRQFHSWLRQ RI H[LVWHQWLDO GLDOHFWLFV RU LWV RQWLFV  PDNHV XVH RI GLIIHUHQW FRQFHSWV OLNH ³VHWV´ ³HOHPHQWV´ ³UHODWLRQV´ ³RSHUDWLRQV´ ³IXQFWLRQV´ ³WUXWK YDOXHV´ ³D[LRPV´ ³SRVWXODWHV´ DQG ³SULQFLSOHV´²DV VKRZQ LQ 7DEOH   ZKLFK DUH LPSRUWDQW IRU WKH XQGHUVWDQGLQJ RI DQ\ ORJLFRIRQWRORJ\ 7KDW FODULILHG²H[LVWHQWLDO GLDOHFWLFV DV D ODQJXDJH RI RQWRORJ\ FDQ EH DQDO\]HG LQ GLIIHUHQW ZD\V WKDW D ODQJXDJH DV DQ DQDORJ\ LV RIWHQ DQDO\]HG QDPHO\ LQ UHODWLRQ WR SKRQRORJ\ ³WKH VWXG\ RI SDWWHUQV RI D ODQJXDJH V VRXQGV´  SKRQHWLFV ³WKH VWXG\ RI WKH SK\VLFDO DVSHFWV RI VRXQGV RI KXPDQ ODQJXDJH´  PRUSKRQRORJ\ ³WKH VWXG\ RI WKH LQWHUQDO VWUXFWXUH RI ZRUGV´  V\QWD[ ³WKH VWXG\ RI KRZ ZRUGV FRPELQH WR IRUP JUDPPDWLFDO VHQWHQFHV´  VHPDQWLFV ³WKH VWXG\ RI WKH PHDQLQJ RI ZRUGV >OH[LFDO VHPDQWLFV@ DQG IL[HG ZRUG FRPELQDWLRQV >SKUDVHRORJ\@´  DQG SUDJPDWLFV ³WKHVWXG\RIKRZXWWHUDQFHVDUHXVHG«OLWHUDOO\ILJXUDWLYHO\ RURWKHUZLVH«LQFRPPXQLFDWLYHDFWV´  :.  %XWVLQFHP\WKHRU\RIH[LVWHQWLDOGLDOHFWLFVPDNHVXVHRIWKH(QJOLVK ODQJXDJHIRUFRPPXQLFDWLRQKHUHLWGRHVQRWSURSRVHDQHZZD\WRPDNH WKH SDWWHUQV RI D ODQJXDJH¶V VRXQGV DV LQ SKRQRORJ\  WR VWXG\ WKH



7KH)XWXUHRI3RVW+XPDQ7UDQVSRUWDWLRQ 



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³WKHGLOHPPDRIRQWRORJ\´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³SOXUDOLW\´ ³G\QDPLVP´ ³GXUDWLRQ´ ³LQWHUDFWLRQ´ ³OLIH´ ³FRQVFLRXVQHVV´ DQG ³YROLWLRQ´   E\ 5HJLQDOG )LUHKDPPHU   RQO\ FRQVWLWXWHV D ODWHVW DGGLWLRQ WR WKLV ROG LPSRYHULVKLQJ WUDGLWLRQ )LUVWO\ WKH FODVVLILFDWLRQ RI HQWLWLHV SURSHUWLHV DQG UHODWLRQVKLSV LV WRR PDWHULDOFHQWULF LQ RIWHQ IRFXVLQJ PRUH RQ WKH H[LVWHQFH RI PDWHULDO HQWLWLHVWKDQRQQRQPDWHULDORQHV 6HFRQGO\WKHFODVVLILFDWLRQLVWRRDQWKURSRFHQWULFLQRIWHQIDYRULQJ WKHIDFWRURIKXPDQDJHQF\LQGHSLFWLQJUHDOLW\ $QG ODVWO\ WKH FODVVLILFDWLRQ LV WRR FRQIXVHG DPRQJ WKH WKUHH FDWHJRULHVUHODWLQJWRHDFKRWKHULQRIWHQ OXPSLQJWKHP WRJHWKHU ZLWKRXW DGHTXDWH FRQVLGHUDWLRQ RI WKHLU LQWULFDWHG LQWHUUHODWLRQVKLSV ERWK LQ UHODWLRQWRHDFKDQGLQUHODWLRQWRDOO  $JRRGDOWHUQDWLYHLVSUHFLVHO\ZKDW,ZDQWWRRIIHULQWKLVGHEDWHWKDW LV D QHZ FODVVLILFDWLRQ RI RQWRORJLFDO HQWLWLHV SURSHUWLHV DQG WKHLU UHODWLRQVKLSVLQWHUPVRIPHWKRGVWUXFWXUHSURFHVVDJHQF\DQGRXWFRPH LQVWHDG/HWPHH[SOLFDWHZKDWWKHVHZRUGVPHDQEHORZ ,QUHODWLRQWR³PHWKRG´²LWFRQFHUQVKRZRQWRORJ\LVWREHVWXGLHG,Q WKLV VHQVH WKH ZRUG PHWKRG  KHUH VKRXOG QRW EH FRQIXVHG ZLWK WKH

&KDSWHU,QWURGXFWLRQ²7KH&RQYHQLHQFHRI7UDQVSRUWDWLRQ 





GLIIHUHQWXVDJHRIWKHVDPHWHUP PHWKRG DVDWHFKQLTXHRILQYHVWLJDWLRQLQ WKHFRQWH[WRIPHWKRGRORJ\ DVDOUHDG\LQWURGXFHGLQ6HFRI)3+.  ,Q UHODWLRQ WR ³VWUXFWXUH´²LW FRQFHUQV ZKDW WKH JHQHUDO SDWWHUQV RI HQWLWLHVSURSHUWLHVDQGUHODWLRQVKLSVDUH ,Q UHODWLRQ WR ³SURFHVV´²LW FRQFHUQV KRZ WKHVH JHQHUDO SDWWHUQV FKDQJHRYHUWLPH ,Q UHODWLRQ WR ³DJHQF\´²LW FRQFHUQV KRZ DJHQF\ DIIHFWV DQ\ FKDQJH RI WKHVH JHQHUDO SDWWHUQV RYHU WLPH ZLWKRXW SXWWLQJ KRZHYHU WRR PXFK HPSKDVLVRQWKHUROHRIKXPDQDJHQF\  $QG LQ UHODWLRQ WR ³RXWFRPH´²LW FRQFHUQV ZKDW WKH RXWSXWV RI WKLV FKDQJHRYHUWLPHDUH

7KH6\QWD[RI([LVWHQWLDO'LDOHFWLFV RU,WV2QWRPHWKRGRORJ\ DQG2QWRORJLF  7KHV\QWD[RIH[LVWHQWLDOGLDOHFWLFVDQDORJRXVO\VSHDNLQJUHIHUVKHUH WRWKHVWUXFWXUHRIDQRQWRORJ\ZKLFKFDQEHVWXGLHGE\ZD\RIFRPELQLQJ LGHDV LQWR FRPSOH[ UHODWLRQVKLSV OLNH RQWRORJLFDO SULQFLSOHV WR GHSLFW UHDOLW\LQWKHZRUOG²DQGFDQEHDQDO\]HGLQVHYHQVXEVHFWLRQVQDPHO\ D  WKH VHOHFWLRQ FULWHULD E  IXUWKHU FODULILFDWLRQV RQ FODVVLILFDWLRQ F  RQWRPHWKRGRORJ\ G  RQWRORJLF H  WKH SULQFLSOHV DV VKRUW FXWV I  WKH SULQFLSOHV DV IDPLO\ UHVHPEODQFHV DQG J  WKH GLDOHFWLF FRQVWUDLQWV LPSRVHGE\WKHSULQFLSOHVUHVSHFWLYHO\KHUHDIWHU 7KH6HOHFWLRQ&ULWHULD 7RVWDUWQRWDQ\SDLURIUHODWLRQVKLSFDQEHFKRVHQDVDQRQWRORJLFDO SULQFLSOH LQ H[LVWHQWLDO GLDOHFWLFV RWKHUZLVH WKHUH FRXOG EH ELOOLRQV RI WKHPXQGHUWKHVN\ 6L[LOOXVWUDWLRQVEHORZVXIILFHWRFODULI\WKLVSRLQW D  )LUVWO\ DQ RQWRORJLFDO SULQFLSOH FDQQRW RYHUODS ZLWK RWKHU SULQFLSOHVLQWKDWLWLVWRRFORVHO\UHODWHGZLWKRWKHURQHV 2I FRXUVH RQH FDQQRW WRWDOO\ UXOH RXW DQ\ UHODWLRQVKLS EHWZHHQ WZR HQWLWLHV HVSHFLDOO\ LQ D FRPSOH[ ZRUOG RI HYHU\WKLQJ EHLQJ OLQNHG WR HYHU\WKLQJHOVH²EXWWKHFRPSDULVRQKHUHLVUHODWLYHQRWDEVROXWH ,QWKLVVHQVHWKHIOH[LELOLW\LQIOH[LELOLW\SDLUFDQQRWEHDQRQWRORJLFDO SULQFLSOHVLQFHLWKDVVRPHWKLQJFORVHO\LQFRPPRQZLWKRWKHURQHV OLNH WKHVLPSOHQHVVFRPSOLFDWHGQHVVSULQFLSOHIRULQVWDQFH  $V DQ LOOXVWUDWLRQ VRPHWKLQJ ZKLFK LV IOH[LEOH LQ LQWHUSUHWDWLRQ LV PRUH OLNHO\ WR DOORZ PXOWLSOH YLHZSRLQWV DQG WKXV PDNHV WKH RYHUDOO SLFWXUHPRUHFRPSOLFDWHGWKDQRWKHUZLVH VLPSOH 



7KH)XWXUHRI3RVW+XPDQ7UDQVSRUWDWLRQ 



E 6HFRQGO\DQRQWRORJLFDOSULQFLSOHFDQQRWEHUHGXQGDQWLQUHODWLRQ WRRWKHUSULQFLSOHVLQWKDWLWVRPHKRZGXSOLFDWHVRWKHUSULQFLSOHV ,QWKLVVHQVHIRULQVWDQFHWKHGLUHFWQHVVLQGLUHFWQHVVSDLUFDQQRWEH DQRQWRORJLFDOSULQFLSOHEHFDXVHLWVRPHKRZGXSOLFDWHVRWKHURQWRORJLFDO SULQFLSOHV OLNHWKHSUHFLVHQHVVYDJXHQHVVSULQFLSOHIRULQVWDQFH  $VDQLOOXVWUDWLRQVRPHWKLQJZKLFKLVGLUHFWPHDQVWREHULJKWWRWKH SRLQWDQGGRHVQRWQHHGWRJRWRDQXQQHFHVVDULO\ORQJORRS²VRLWLVOHVV YDJXHLQEHLQJFOHDUHUDERXWWKHWKLQJLQTXHVWLRQ F  7KLUGO\ DQ RQWRORJLFDO SULQFLSOH FDQQRW EH GHULYHG IURP RWKHU RQHV²DVLILWLVDFKLOGSDUHQWUHODWLRQVKLS ,Q WKLV VHQVH WKH FRQYHQLHQFHLQFRQYHQLHQFH SDLU FDQQRW EH DQ RQWRORJLFDOSULQFLSOHEHFDXVHLWFDQEHGHULYHGIURPRWKHURQHV OLNHWKH VORZQHVVTXLFNQHVVSULQFLSOHIRULQVWDQFH  )RU LQVWDQFH VRPHWKLQJ ZKLFK LV FRQYHQLHQW DOUHDG\ LPSOLHV WKDW LW FDQEHREWDLQHGTXLFNO\ UDWKHUWKDQVORZO\ ²DOOWKLQJVFRQVLGHUHG G  )RXUWKO\ DQ RQWRORJLFDO SULQFLSOH FDQQRW EH WULYLDO RU SDURFKLDO ²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³WUXWK´ H )LIWKO\DQRQWRORJLFDOSULQFLSOHFDQQRWEHRQHVLGHGWKDWLVSDUW RIRQHVLGH FDWHJRU\ RIDGLDOHFWLFSDLU ,Q WKLV VHQVH WKH H[WURYHUVLRQLQWURYHUVLRQ SDLU FDQQRW EH DQ RQWRORJLFDOSULQFLSOHVLQFHLWLVSDUWRIWKHVLGH FDWHJRU\ RI³QRUPDOLW\´ LQ WKH QRUPDOLW\DEQRUPDOWL\ SDLU EHFDXVH ERWK H[WURYHUVLRQ DQG LQWURYHUVLRQDUHWZRGLIIHUHQW³QRUPDO´SHUVRQDOLW\WUDLWVLQSV\FKRORJ\  ,Q DGGLWLRQ  WKH QRUPDOLW\DEQRUPDOLW\ SDLU LV DOUHDG\ UHODWHG WR WKH V\PPHWU\DV\PPHWU\ SULQFLSOH WKH GHQVLW\HPSWLQHVV SULQFLSOH WKH FRQYHQWLRQQRYHOW\SULQFLSOHDQGWKHVDPHGLIIHUHQFHSULQFLSOH DVZLOOEH H[SODLQHGLQWKHVHFWLRQRQ³WKHSULQFLSOHVDVIDPLO\UHVHPEODQFHV´ODWHU  I $QGVL[WKO\DQRQWRORJLFDOSULQFLSOHFDQQRWEHPLVOHDGLQJLQWKDW WKH WZR DSSDUHQW RSSRVLWHV DUH QRW UHDOO\ RSSRVLWHV DW DOO XSRQ FORVHU H[DPLQDWLRQ

&KDSWHU,QWURGXFWLRQ²7KH&RQYHQLHQFHRI7UDQVSRUWDWLRQ 





,Q WKLV VHQVH WKH HDVWZHVW SDLU FDQQRW EH DQ RQWRORJLFDO SULQFLSOH VLQFHHDVWDQGZHVWDUHQRWUHDOO\RSSRVLWHVDVWKHUHDUHDOVRQRUWKVRXWK DQGFHQWHUWRIRUPDVHWRIILYHRSSRVLQJHOHPHQWV %\ WKH VDPH ORJLF WKH OHIWULJKW SDLU FDQQRW EH DQ RQWRORJLFDO SULQFLSOHVLQFHOHIWDQGULJKW ZLGWK DUHQRWUHDOO\RSSRVLWHVDVWKHUHDUH DOVRWRSDQGERWWRP KHLJKW EDFNDQGIURQW GHSWK DQGFHQWHUWRIRUPD VHWRIVHYHQHOHPHQWVLQIRXUFDWHJRULHV,QWKHILHOGRIYLVXDOGHVLJQWKLV VHW RI VHYHQ HOHPHQWV LV NQRZQ DV ³IRUP´ DV RSSRVHG WR ³IXQFWLRQ´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³VWUXFWXUH´ EXW FDQ EH UHFODVVLILHG XQGHU WKH FDWHJRU\ RI ³PHWKRG´DOWKRXJKLQVRGRLQJLWKDVDGLIIHUHQWPHDQLQJLQWKHFRQWH[W RIPHWKRG 7KH VDPH ORJLF DSSOLHV WR WKH VDPHGLIIHUHQFH SULQFLSOH XQGHU WKH FDWHJRU\ RI ³RXWFRPH´ ZKLFK FDQ EH UHFODVVLILHG XQGHU WKH FDWHJRU\ RI ³VWUXFWXUH´DOWKRXJKLQVRGRLQJRQFHPRUHLWKDVDGLIIHUHQWPHDQLQJLQ WKHFRQWH[WRIVWUXFWXUH F 7KLUGO\WKHSULQFLSOHVDUHWREHXQGHUVWRRGWRJHWKHUQRWWKDWHDFK SULQLFSOHLVWREHWUHDWHGLQGHSHQGHQWO\RIRWKHUV$IWHUDOOWKHSULQFLSOHV DUHPXWXDOO\FRQVWUDLQLQJLQWKDWWKH\ZRUNWRJHWKHUDVDZKROH



7KH)XWXUHRI3RVW+XPDQ7UDQVSRUWDWLRQ 



G  )RXUWKO\ WKH SULQFLSOHV DUH UHOHYDQW WR DOO VXEMHFW PDWWHUV EXW VRPH SULQFLSOHV DUH UHODWLYHO\ VSHDNLQJ RI FRXUVH PRUH XVHIXO WR VRPH VXEMHFW PDWWHUV WKDQ RWKHUV XQGHU FHUWDLQ FRQGLWLRQV²DV LPSOLHG LQ WKH V\PPHWU\DV\PPHWU\SULQFLSOH H  $QG ILIWKO\ WKH SULQFLSOHV FRQVWLWXWH RQO\ WZR OHYHOV RI DQDO\VLV WKLVWLPHDWWKHRQWRORJLFDODQGPHWKRGRORJLFDOOHYHOV²ZKLOHRWKHUOHYHOV RIDQDO\VLV IURPWKHSHUVSHFWLYHVRIWKHPLQGQDWXUHVRFLHW\DQGFXOWXUH  DUHDOVRQHHGHGLQRUGHUWRXQGHUVWDQGUHDOLW\LQLWVWRWDOLW\ DVH[SODLQHG LQWKHVHFWLRQRQ³VRSKLVWLFDWHGPHWKRGRORJLFDOKROLVP´VRDVWRDYRLGWKH GXDOGDQJHUVRIUHGXFWLRQLVPDQGUHYHUVHUHGXFWLRQLVP  2QWRPHWKRGRORJ\ :LWKWKHVHVHOHFWLRQFULWHULDDQGFODULILFDWLRQVLQPLQG²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²WKH ILUVW WKUHH SULQFLSOHV LQ H[LVWHQWLDO GLDOHFWLFV ZHUH LQWURGXFHG LQ %&3& $QG PRUHSULQFLSOHVZHUHODWHUDGGHGWRWKHORJLFLQP\VXEVHTXHQWERRNV OLNH )&)$(DQGRWKHUV DVH[SODLQHGEHORZ 0RUH VSHFLILFDOO\ LQ %&3& , SURSRVHG WKUHH SULQFLSOHV EDVHG RQ SUHYLRXV ZRUNV RI PLQH QRW MXVW VRPHWKLQJ RXW RI WKH EOXH  IRU WKH

&KDSWHU,QWURGXFWLRQ²7KH&RQYHQLHQFHRI7UDQVSRUWDWLRQ 





RQWRORJLFDO ORJLF QDPHO\ D  WKH UHJUHVVLRQSURJUHVVLRQ SULQFLSOH RQ WKH GLUHFWLRQ RI KLVWRU\ E  WKH V\PPHWU\DV\PPHWU\ SULQFLSOH RQ WKH UHODWLRQVKLSV DPRQJ H[LVWHQWV DQG F  WKH FKDQJHFRQVWDQF\ SULQFLSOH RQ WKHDOWHUDWLRQRIWKLQJV²RULQDPRUHHOHJDQWWHUPWKHG\QDPLFVRIVSDFH WLPH LQ)&  ,Q7KH)XWXUHRI&RPSOH[LW\ )& ,DGGHGWKUHHPRUHSULQFLSOHVRQ WRSRIWKHWKUHHDIRUHPHQWLRQHGQDPHO\ G WKHSDUWLDOLW\WRWDOLW\SULQFLSOH RQWKHUHODWLRQVKLSVEHWZHHQSDUWVDQGZKROH H WKHRUGHUFKDRVSULQFLSOH RQWKHSDWWHUQRIWKLQJVDQG I WKHSUHGLFWDELOLW\XQSUHGLFWDELOLW\SULQFLSOH RQWKHRFFXUUHQFHRIWKLQJV²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²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



7KH)XWXUHRI3RVW+XPDQ7UDQVSRUWDWLRQ 



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‡ VL[ SULQFLSOHV LQ WKH FDWHJRU\ RI ³PHWKRG´²YL] WKH IRUPDOQHVV LQIRUPDOQHVV SULQFLSOH WKH DEVROXWHQHVVUHODWLYHQHVV SULQFLSOH WKH SDUWLDOLW\WRWDOLW\ SULQFLSOH WKH SUHGLFWDELOLW\XQSUHGLFWDELOLW\ SULQFLSOH WKH H[SOLFDELOLW\LQH[SOLFDELOLW\ SULQFLSOH DQG WKH ILFWLRQ UHDOLW\SULQFLSOH ‡ ILYH  SULQFLSOHV LQ WKH FDWHJRU\ RI ³VWUXFWXUH´²YL] WKH ILQLWHQHVV WUDQVILQLWHQHVV SULQFLSOH WKH VLPSOHQHVVFRPSOLFDWHGQHVV SULQFLSOH WKH SUHFLVHQHVVYDJXHQHVV SULQFLSOH WKH RSHQQHVVKLGGHQQHVV SULQFLSOHDQGWKHGHQVHQHVVHPSWLQHVVSULQFLSOH

&KDSWHU,QWURGXFWLRQ²7KH&RQYHQLHQFHRI7UDQVSRUWDWLRQ 





‡ IRXU  SULQFLSOHV LQ WKH FDWHJRU\ RI ³SURFHVV´²YL] WKH FKDQJH FRQVWDQF\SULQFLSOHWKHVORZQHVVTXLFNQHVVSULQFLSOHWKHRUGHUFKDRV SULQFLSOHDQGWKHH[SDQVLRQFRQWUDFWLRQSULQFLSOH ‡ VHYHQ SULQFLSOHV LQ WKH FDWHJRU\ RI ³DJHQF\´²YL] WKH WKHRU\SUD[LV SULQFLSOHWKHFRQYHQWLRQQRYHOW\SULQFLSOHWKHV\PPHWU\DV\PPHWU\ SULQFLSOH WKH HYROXWLRQWUDQVIRUPDWLRQ SULQFLSOH WKH VRIWQHVV KDUGQHVV SULQFLSOH WKH VHULRXVQHVVSOD\IXOQHVV SULQFLSOH DQG WKH DFWLYHQHVVLQDFWLYHQHVVSULQFLSOH ‡WKUHHSULQFLSOHVLQWKHFDWHJRU\RI³RXWFRPH´²YL]WKHUHJUHVVLRQ SURJUHVVLRQSULQFLSOHWKHVDPHGLIIHUHQFHSULQFLSOHDQGWKHVWDELOLW\ UHDFWLRQSULQFLSOH  7KHUHFDQEHPRUHWKDQWZHQW\ILYHSULQFLSOHVLQH[LVWHQWLDOGLDOHFWLFVEXW WKH\DUHZKDW,KDYHGLVFRYHUHGVRIDU DVVXPPDUL]HGLQ7DEOH  7KH3ULQFLSOHVDV6KRUW&XWV LWDOLF DGGHG@ZLWKWKHPHDVXULQJGHYLFH´ :.J 7KXVIRU(YHUHWW WKH DSSHDUDQFH RI ³ZDYHIXQFWLRQ FROODSVH´ FDQ EH H[SODLQHG E\ ³TXDQWXPGHFRKHUHQFH´IRUTXDQWXPVWDWHVWREUDQFKRXWLQGLIIHUHQW LQGHSHQGHQWZRUOGVDIWHULQWHUDFWLQJZLWKDQH[WHUQDOHQYLURQPHQW BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  FRQWLQXHGRQQH[WSDJH 



7KH)XWXUHRI3RVW+XPDQ7UDQVSRUWDWLRQ 



7DEOH7KH&RQIXVLRQEHWZHHQ³0DQ\:RUOGV´DQG³0XOWLYHUVH´ 3DUW,,  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB

 ‡)LUVW3UREOHP FRQW¶G  ²D@FFRUGLQJ WR UHODWLYLW\ \RX FDQ RQO\ PRYH WKURXJKWLPHLQRQHGLUHFWLRQ´ 12   ‡6HFRQG3UREOHP ²7KH VHFRQG SUREOHP FRQFHUQV ³WLPH GLODWLRQ XQGHU WKH 7KHRU\ RI *HQHUDO 5HODWLYLW\´ ZKLFK XQLILHVVSDFHWLPH ZLWK PDVVHQHUJ\LQD JHQHUDOWKHRU\ WKHVDPHUHVXOWRIWLPHGLODWLRQRFFXUV ²)RU LQVWDQFH ZKHQ ³RQH FORFN LV GHHSHU LQ D JUDYLW\ ZHOO WKDQ WKH RWKHU´DUHVXOWLVWKDW³WKHFORFNGHHSHULQWKHZHOO´ZLOO³WLFN«PRUH VORZO\ WKLV HIIHFW PXVW EH WDNHQ LQWR DFFRXQW ZKHQ FDOLEUDWLQJ WKH FORFNVRQWKHVDWHOOLWHVRIWKH*OREDO3RVLWLRQLQJ6\VWHPDQGLWFRXOG OHDG WR VLJQLILFDQW GLIIHUHQFHV LQ UDWHV RI DJLQJ IRU REVHUYHUV DW GLIIHUHQWGLVWDQFHVIURPDEODFNKROH´ :.L  ²0RUH SUHFLVHO\ E\ ZD\ RI DQRWKHU H[DPSOH ³LW KDV EHHQ FDOFXODWHG WKDWXQGHUJHQHUDOUHODWLYLW\DSHUVRQFRXOGWUDYHOIRUZDUGLQWLPHDW D UDWH IRXU WLPHV WKDW RI GLVWDQW REVHUYHUV E\ UHVLGLQJ LQVLGH D VSKHULFDO VKHOO ZLWK D GLDPHWHU RI  PHWHUV DQG WKH PDVV RI -XSLWHU )RU VXFK D SHUVRQ HYHU\ RQH VHFRQG RI WKHLU SHUVRQDO  WLPH ZRXOG FRUUHVSRQGWRIRXUVHFRQGVIRUGLVWDQWREVHUYHUV2IFRXUVHVTXHH]LQJ WKHPDVVRIDODUJHSODQHWLQWRVXFKDVWUXFWXUHLVQRWH[SHFWHGWREH ZLWKLQRXUWHFKQRORJLFDOFDSDELOLWLHVLQWKHQHDUIXWXUH´ :.L 5*RWW  ²7KH SRLQW KHUH KRZHYHU LV WKDW WLPH WUDYHO LQWR WKH IXWXUH LQ WKLV VHQVH LV DOORZHG WKHRUHWLFDOO\ VSHDNLQJ EXW LQ D YHU\ OLPLWHG ZD\ IURPWKHWKHRU\RIUHODWLYLW\%XWRQHFDQDOVRDVN:KDWLIWKHWKHRU\ RIUHODWLYLW\ZHUHZURQJ":HOOLQWKDWFDVHWKHUHZRXOGEHDQHHGWR ILQGDEHWWHUWKHRU\WRH[SODLQWLPHWUDYHOLQWRWKHIXWXUH BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 6RXUFH)URP6HFRI)3+*

&KDSWHU,QWURGXFWLRQ²7KH&RQYHQLHQFHRI7UDQVSRUWDWLRQ 





7DEOH7KH3UREOHPVRI7LPH7UDYHOLQWRWKH3DVW 3DUW,  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB

 ‡)LUVW3UREOHP ²7KH ILUVW SUREOHP FRQFHUQV WKH IDVWHUWKDQOLJKWVSHHG VLQFH LQ DFFRUGDQFH WR WKH WKHRU\ RI VSHFLDO UHODWLYLW\ ZKHQ DQ REMHFW JRHV IDVWHU WKDQ WKH VSHHG RI OLJKW VRPHWKLQJ ZHLUG FDQ KDSSHQ LQ WKDW LQVWHDG RI KDYLQJ WKH FORFN FOLFNLQJ PRUH VORZO\ LW LV PRYLQJ EDFNZDUGLQUHODWLRQWRVRPHLQHUWLDOIUDPHRIUHIHUHQFH²ZKLFKWKHQ UDLVLHVWKHLVVXHRIZKHWKHUWLPHWUDYHOLQWRWKHSDVWLVSRVVLEOHDWDOO ²%XWWKHSUREOHPKHUHLVDERXWWKHYLRODWLRQRIWKHODZRIFDVXDOLW\,Q HYHU\GD\ ODQJXDJH DQ H[FHOOHQW LOOXVWUDWLRQ RI FDXVDOLW\ YLRODWLRQ LV WKDWVXSSRVH\RXWUDYHOEDFNLQWRWKHSDVWDQGWKHQNLOO\RXUSDUHQWV WKLVWKHQPHDQVWKDW\RXFRXOGQRWKDYHEHHQERUQ%XWWKLVLVQRWWUXH VLQFH\RXDUHDOLYH ²J@HQHUDOUHODWLYLW\GHVFULEHVWKHXQLYHUVHXQGHUD V\VWHPRIILHOGHTXDWLRQV«DQGWKHUHH[LVWVROXWLRQVWRWKHVHHTXDWLRQV WKDW SHUPLW ZKDW DUH FDOOHG FORVHG WLPHOLNH FXUYHV  DQG KHQFH WLPH WUDYHOLQWRWKHSDVW«7KHILUVWRIWKHVHZDVSURSRVHGE\.XUW*|GHOD VROXWLRQ NQRZQ DV WKH *|GHO PHWULF EXW KLV DQG PDQ\ RWKHUV  H[DPSOH UHTXLUHV WKH XQLYHUVH WR KDYH SK\VLFDO FKDUDFWHULVWLFV WKDW LW GRHVQRWDSSHDUWRKDYH´ :.L.7KRUQH  ²%XW WKHQ WKH SUREOHP QRZ EHFRPHV ³:KHWKHU JHQHUDO UHODWLYLW\ IRUELGV FORVHG WLPHOLNH FXUYHV IRU DOO UHDOLVWLF FRQGLWLRQV LV XQNQRZQ´ :.L   ‡7KLUG3UREOHP ²7KH WKLUG SUREOHP FRQFHUQV ZRUPKROHV DQG UHODWHG RQHV DQG ³>Z@RUPKROHV DUH D K\SRWKHWLFDO ZDUSHG VSDFHWLPH ZKLFK DUH DOVR SHUPLWWHG E\ WKH (LQVWHLQ ILHOG HTXDWLRQV RI JHQHUDO UHODWLYLW\ DOWKRXJKLWZRXOGEHLPSRVVLEOHWRWUDYHOWKURXJKDZRUPKROHXQOHVV LW ZDV ZKDW LV NQRZQ DV D WUDYHUVDEOH ZRUPKROH´ :. L 0 9LVVHU   ,Q RWKHU ZRUGV ³D ZRUPKROH LV D K\SRWKHWLFDO WRSRORJLFDO IHDWXUH RI VSDFHWLPH WKDW LV IXQGDPHQWDOO\ D VKRUWFXW  WKURXJK VSDFH DQG WLPH 6SDFHWLPH FDQ EH YLHZHG DV D ' VXUIDFH DQG ZKHQ IROGHG  RYHU D ZRUPKROH EULGJH FDQ EH IRUPHG $ ZRUPKROH KDV DW OHDVW WZR PRXWKV ZKLFK DUH FRQQHFWHG WR D VLQJOH WKURDWRUWXEH,IWKHZRUPKROHLVWUDYHUVDEOHPDWWHUFDQ WUDYHO IURP RQHPRXWKWRWKHRWKHUE\SDVVLQJWKURXJKWKHWKURDW´ :.M  ²%XWWKHSUREOHPKHUHLVWKUHHIROGDVVKRZQLQZKDWIROORZV BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  FRQWLQXHGRQQH[WSDJH      

&KDSWHU,QWURGXFWLRQ²7KH&RQYHQLHQFHRI7UDQVSRUWDWLRQ 





7DEOH7KH3UREOHPVRI7LPH7UDYHOLQWRWKH3DVW 3DUW,,,  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB

 ‡7KLUG3UREOHP FRQW¶G  ²7KHILUVWSDUWRIWKHSUREOHPLVWKDW³WKHUHLVQRREVHUYDWLRQDOHYLGHQFH IRUZRUPKROHV´ :.M  ²7KH VHFRQG SDUW RI WKH SUREOHP LV WKDW LW LV QRW FOHDU KRZ H[DFWO\ ZRUPKROHV DQGEODFNKROHV IRUWKDW PDWWHU FRXOGDOORZ WLPHWUDYHO LQWRWKHSDVWDWDOO ²$QG WKH WKLUG SDUW RI WKH SUREOHP LV WKDW LI XVLQJ ZRUPKROHV DQG EODFNKROHVIRUWKDWPDWWHU WRWUDYHOLQWRWKHSDVWUHTXLUHVVRPHWKLQJ WRJRIDVWHUWKDQOLJKWWRRWKHQWKLVUDLVHVDQRWKHULVVXHFRQFHUQLQJWKH WZRSUREOHPVDVSUHYLRXVO\LQGLFDWHGLQWKHVXEVHFWLRQRQWKHIDVWHU WKDQOLJKWVSHHG  ‡)RXUWK3UREOHP ²7KH IRXUWK SUREOHP LV WKDW VRPH SK\VLFLVWV KDYH DUJXHG WKDW HYHQ VKRXOG WLPH WUDYHO LQWR WKH SDVW EH SRVVLEOH E\ ZD\ RI WKHVH WKUHH PHWKRGVWKHSHUVRQVWLOOZRXOGQRWUHWXUQWRWKHVDPHSDVWKLVWRU\WKDW KHH[DFWO\H[SHULHQFHGEHIRUHEXWLQDGLIIHUHQWRQH :.L  ²,Q RWKHU ZRUGV ³VWULFWO\ VSHDNLQJ´ WLPH WUDYHO LQWR WKH SDVW LV QRW ³UHDOO\´ SRVVLEOH LQ OLJKW RI WKHVH FULWLFLVPV VR WKHUH LV QR QHHG WR ZRUU\ WKDW RQH FRXOG WUDYHO LQWR WKH SDVW DQG NLOO RQH¶V SDUHQW DV D ZD\WRYLRODWHWKHODZRIFDVXDOLW\ BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 6RXUFH)URP6HFRI)3+*              



7KH)XWXUHRI3RVW+XPDQ7UDQVSRUWDWLRQ 



7DEOH7KH&RQFHSWXDO'LPHQVLRQVRI&RQVFLRXVQHVV DQG2WKHU0HQWDO6WDWHV  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  ‡2Q+HUHGLW\DQG7LPH ²+HUHGLW\DQGWKH(QYLURQPHQW ²7KH3DVWDQGWKH3UHVHQW  ‡2Q/D\HUVRI0HQWDO6WDWHVDQG$EQRUPDOLW\ ²&RQVFLRXVQHVV8QFRQVFLRXVQHVVDQG3UHFRQVFLRXVQHVV ²1RUPDOLW\DQG3DUDQRUPDOLW\  ‡2Q2UJDQLFLW\DQG0RWLYDWLRQ ²0HFKDQLFLW\DQG2UJDQLFLW\ ²3ULPDU\0RWLYDWLRQVDQG0XOWLSOH0RWLYDWLRQV  ‡2Q2WKHU 0RVWO\(SLVWHPLF &RQVLGHUDWLRQV ²6\QWKHVLVDQG$QDO\VLV ²6LWXDWLRQDQGWKH6XEMHFW ²3URFHVVDQG2XWFRPH ²5HDVRQLQJDQG2WKHU0RGHVRI7KLQNLQJ ²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´ DQG-HVVH-DFNVRQ ZKREODPHVZKLWHUDFLVPIRUWKHIDLOXUHRI EODFNV WR FORVH WKH DFKLHYHPHQW JDS EHWZHHQ ZKLWHV DQG EODFNV LQ $PHULFD 7KH ZRUNVRQGHSHQGHQF\WKHRU\LQLQWHUQDWLRQDOSROLWLFDO HFRQRP\ ZLWKD0DU[LDQLQIOXHQFH DQGRQWKH3URWHVWDQWZRUNHWKLF E\0D[:HEHU DOVRSRLQWWRWKLVHQYLURQPHQWDOGLUHFWLRQ  ‡7KH*HQHWLF$SSURDFK ²7KHVLV ,W IRFXVHV LQVWHDG UHODWLYHO\  VSHDNLQJ DJDLQ RQ KHUHGLWRU\ IDFWRUV HJJHQHVDQGHYROXWLRQ LQH[SODLQLQJWKHDFKLHYHPHQWJDS DPRQJ LQGLYLGXDOV DQG IRU WKDW PDWWHU FRXQWULHV RU UHJLRQV ZKHQ FRQWUDVWHGZLWKWKHHQYULRQPHQWDOIDFWRUV ²'LVFRXUVH ([DPSOHV DUH +DQV (\VHQFN DQG :LOOLDP 6KHOGRQ LQ FRQVWLWXWLRQDO SV\FKRORJ\  .RQUDG /RUHQ] LQ KLV ZRUN RQ LQQDWH DJJUHVVLYH KXPDQ QDWXUH  *DU\ 0DUFXV RQ WKH FRPSOH[LWLHV RI KXPDQ WKRXJKW E\ D WLQ\ QXPEHU RI JHQHV  DQG 5REHUW 3ORPLQ WRJHWKHUZLWK0LFKDHO2ZHQDQG3HWHU0F*XIILQ RQWKHJHQHWLFEDVLV RIFRPSOH[KXPDQEHKDYLRUV  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  FRQWLQXHGRQQH[WSDJH        



7KH)XWXUHRI3RVW+XPDQ7UDQVSRUWDWLRQ 



7DEOH7KH7KHRUHWLFDO'HEDWHRQ1DWXUHYV1XUWXUH 3DUW,,  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB

 ‡7KH&RPSURPLVH$SSURDFK ²7KHVLV ,W VHHNV WKH PLGGOHRIWKHURDG DUJXPHQW LQ UHJDUG WR QDWXUH DQGQXUWXUHDQGUHJDUGVDOOGLIIHUHQFHVDPRQJLQGLYLGXDOVDQGJURXSV DV WKH UHVXOW RI WKH PL[WXUH RI ERWK QDWXUH DQG QXUWXUH PRUH RU OHVV HTXDOO\ ²'LVFRXUVH([DPSOHVLQFOXGH&0XUUD\DQG5+HUUQVWHLQ ³,WVHHPV KLJKO\OLNHO\WRXVWKDWERWKJHQHVDQGHQYLURQPHQWKDYHVRPHWKLQJWR GRZLWKWKLVLVVXH´ DQG'DQ 'HQQHWW ³6XUHO\ HYHU\RQHNQRZV  WKDW WKHQDWXUHQXUWXUHGHEDWHZDVUHVROYHGORQJDJRDQGQHLWKHUVLGHZLQV VLQFHHYHU\WKLQJ±LV±D±PL[WXUH±RI±ERWK±DQGLW¶V±DOO±YHU\ FRPSOLFDWHG«´  ‡7KH7UDQVFHQGHQW$SSURDFK ²7KHVLV ,W JRHV EH\RQG ERWK QDWXUH DQG QXUWXUH ZLWKRXW KRZHYHU FRPPLWWLQJ WKH FRPSURPLVH IDOODF\  LQ VKRZLQJ WKHLU FORVHO\ LQWHUWZLQHG LQWHUDFWLRQV LQ SURGXFLQJ WKH EHKDYLRUDO GLIIHUHQFHV DV RIWHQVHHQLQLQGLYLGXDOKXPDQHQGHDYRUVRQWKHPLFURVFDOHDQGIRU WKDWPDWWHULQFRXQWU\ RUUHJLRQDO HQGHDYRUVRQWKHPDFURRQH²LQ WKHFRQWH[WRIP\ILYHWKHVHVQDPHO\ D WKHFRPSURPLVHIDOODF\ E  QRRSSUHVVLRQZLWKRXWVHOIRSSUHVVLRQ F QRVXFFHVVZLWKRXWIDLOXUH G  WKH IDFWRU RI UDQGRPQHVV DQG H  WKH SRVWKXPDQ YLVLRQ WR EH HODERUDWHGLQ&KDSWHU6L[ ²'LVFRXUVH 3HWHU %DRIX SURSRVHG WKLV DSSURDFK RQ WKH EDVLV RI KLV ³WKHRU\ RI FRQWUDVWLYH DGYDQWDJHV´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

&KDSWHU,QWURGXFWLRQ²7KH&RQYHQLHQFHRI7UDQVSRUWDWLRQ 





7DEOH3K\VLFDO&KDOOHQJHVWR+\SHU6SDWLDO&RQVFLRXVQHVV BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  ‡7KH8QGHUVWDQGLQJRID+LJKHU'LPHQVLRQDO:RUOGRI6SDFH7LPH ²([IRUWUDGLWLRQDODVSHFWVRIVSDFHWLPH HJOHQJWKZLGWKEUHDGWK DQGWLPH SOXVPRUHQHZGLPHQVLRQVLQWKHRU\RIK\SHUVSDFHZLWK SURIRXQG LPSOLFDWLRQV IRU SUDFWLFDO DSSOLFDWLRQV WR QHZ IRUPV RI FRQVFLRXVQHVV  ‡7KH0DVWHULQJRI'DUN0DWWHUDQG'DUN(QHUJ\ ²([³RUGLQDU\PDWWHU´ HJDWRPVPROHFXOHV DVDPHUHRIWKH XQLYHUVH ZLWK  PDGH RI ³FROG GDUN PDWWHU´ DQG WKH UHVW DERXW   RI P\VWHULRXV ³GDUN HQHUJ\´ ZLWK IXQGDPHQWDO VLJQLILFDQFH WR TXHVWLRQV DERXW WKH OLPLW RI WKH VSHHG RI HQHUJ\ RU LQIR  WKH DYDLODELOLW\RIHQHUJ\IRUXVHDQGWKHQDWXUHRIVSDFHWLPHMXVWWRFLWH VRPHH[DPSOHV  ‡7KH([SORUDWLRQRI0XOWLYHUVHV ²([WKHRUHWLFDOVSHFXODWLRQRIRWKHUXQLYHUVHV HJ³EDE\XQLYHUVHV´ ³JDWHZD\V´ LQ EODFN KROHV ³ZDYH IXQFWLRQ RI WKH XQLYHUVH´ ³PDQ\ ZRUOGV´ ³EUDQH ZRUOGV´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



7KH)XWXUHRI3RVW+XPDQ7UDQVSRUWDWLRQ 



7DEOH7KH7KHRU\RI)ORDWLQJ&RQVFLRXVQHVV 3DUW,  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  ‡$WWKH0LFUR3K\VLFDO/HYHO ²([LQWHOOLJHQWOLIHZLWKRXWWKHKXPDQSK\VLFDOFKHPLFDOV\VWHP  ‡$WWKH&KHPLFDO/HYHO ²([VSDFHUDGLDWLRQDQGWR[LQV  ‡$WWKH%LR3V\FKRORJLFDO/HYHO ²([H[RELRORJLFDOHYROXWLRQLQGHHSVSDFH ²([JHQHWLFHQJLQHHULQJRIQHZEHLQJV  ‡$WWKH,QVWLWXWLRQDO/HYHO ²([SRVWFDSLWDOLVP ²([SRVWGHPRFUDF\  ‡$WWKH2UJDQL]DWLRQDO/HYHO ²([OHVVOHJDOIRUPDOLVWLFURXWLQHV  ‡$WWKH6WUXFWXUDO/HYHO ²([DOLHQIRUPVRIYLROHQFH  ‡$WWKH&XOWXUDO/HYHO ²([WUDQVFHQGLQJIUHHGRP ²([WUDQVFHQGLQJHTXDOLW\  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  FRQWLQXHGRQQH[WSDJH            

&KDSWHU,QWURGXFWLRQ²7KH&RQYHQLHQFHRI7UDQVSRUWDWLRQ 





7DEOH7KH7KHRU\RI)ORDWLQJ&RQVFLRXVQHVV 3DUW,,  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  ‡$WWKH&RVPRORJLFDO/HYHO ²([SDUDOOHOXQLYHUVHV ²([SRFNHWXQLYHUVHV  ‡$WWKH6\VWHPLF/HYHO ²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²DQGRULJLQDOO\IURP)&'                   



7KH)XWXUHRI3RVW+XPDQ7UDQVSRUWDWLRQ 



7DEOH7KH3RWHQWLDORI8QIROGLQJ8QFRQVFLRXVQHVV BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  ‡6XSHULRU6HQVHV ²7KURXJKVSDFH ‡([FODLUVHQWLHQFH LQIHHOLQJ  ‡([FODLUYR\DQFH LQVHHLQJ  ‡([FODLUDXGLHQFH LQKHDULQJ  ‡([FODLUDXVWDQFH LQWDVWLQJ  ‡([FODLUDOLHQFH LQVPHOOLQJ  ‡([FODLUFRJQL]DQFH LQNQRZLQJ  ²7KURXJKWLPH ‡([SUHFRJQLWLRQ LQNQRZLQJ SUHVHQWLPHQW LQIHHOLQJ  ‡([UHWURFRJQLWLRQ LQNQRZLQJ UHWURVHQWLPHQW LQIHHOLQJ   ‡6XSHULRU&RQWDFWV ²:LWKOLYLQJPLQGV ‡([WHOHSDWK\ ²:LWKWKHGHDG ‡([PHGLXPVKLS ²:LWKRWKHUOLYLQJHQWLWLHV ‡([WHOHNLQHVLV BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 1RWHV7KHFDWHJRULHVDQGH[DPSOHVDUHVROHO\LOOXVWUDWLYH QRWH[KDXVWLYH  DQG WKH FRPSDULVRQ LV UHODWLYH QRW DEVROXWH  QRU DUH WKH\ QHFHVVDULO\ PXWXDOO\ H[FOXVLYH $QG VRPH FDQ EH HDVLO\ UHFODVVLILHG HOVHZKHUH $V JHQHUDOLWLHVWKH\DOORZH[FHSWLRQV 6RXUFH$VXPPDU\RI&KRI)3+8           

&KDSWHU,QWURGXFWLRQ²7KH&RQYHQLHQFHRI7UDQVSRUWDWLRQ 





7DEOH7KH)XWXUH([SORUDWLRQRI8QIROGLQJ8QFRQVFLRXVQHVV BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  ‡,QWKH&RQWH[WRI1DWXUH ²([WKHKLJKHUGLPHQVLRQDOVSDFHWLPHLQK\SHUVSDFHWKHRU\ ²([WKHSDUWLFOHZDYHLQWHUDFWLRQVLQTXDQWXPPHFKDQLFV ²([WKHVWXG\RIEUDLQZDYHVLQHOHFWURPDJQHWLFWKHRU\  ‡,QWKH&RQWH[WRIWKH0LQG ²([WKHXQFRQVFLRXVIDQWDVLHVLQSV\FKRDQDO\VLV ²([WKHPLQGDOWHULQJGUXJVLQELRFKHPLVWU\ ²([WKHPDQLSXODWLRQRIQHXUDODFWLYLW\LQQHXURELRORJ\  ‡,QWKH&RQWH[WRI&XOWXUH ²([WKHFRUUHODWLRQEHWZHHQDQRPDORXVH[SHULHQFHDQG PRUDOUHOLJLRXVDHVWKHWLFLQWHUHVWVLQFXOWXUHVWXGLHV ²([WKHUROHRIP\WKVDQGODQJXDJHLQHSLVWHPRORJ\  ‡,QWKH&RQWH[WRI6RFLHW\ ²([GLIIHUHQWRUJDQL]DWLRQDODJHQGDVLQDQRPDORXVUHVHDUFK ²([WKHVFKRODUO\GLYLGHRQDQRPDORXVVWXG\ ²([LQWHUHVWVDQGSURSDJDQGDLQLQVWLWXWLRDQOUHVHDUFK ²([WKHWUDQVIRUPDWLYHSRZHURIWHFKQRORJ\LQUHVHDUFKRQ VRFLDOV\VWHPV ²([WKHQDWXUDODQGQRQQDWXUDOVHOHFWLRQRIRWKHUZRUOGVLQ H[RELRORJ\ ²([WKHUROHRIWKHSRVWKXPDQFRQVFLRXVPLQGLQTXDOLWDWLYH GHPRJUDSK\ BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 1RWHV 7KH H[DPSOHV LQ HDFK FDWHJRU\ DUH VROHO\ LOOXVWUDWLYH QRW H[KDXVWLYH  DQG WKH FRPSDULVRQ LV UHODWLYH QRW DEVROXWH  QRU DUH WKH\ QHFHVVDULO\ PXWXDOO\ H[FOXVLYH $QG VRPH FDQ EH HDVLO\ UHFODVVLILHG HOVHZKHUH$VJHQHUDOLWLHVWKH\DOORZH[FHSWLRQV 6RXUFH$VXPPDU\RI&KVRI)3+8LQFRQMXQFWLRQZLWKWKHUHVWRI WKHERRN      



7KH)XWXUHRI3RVW+XPDQ7UDQVSRUWDWLRQ 



7DEOH&UHDWLYH7HFKQLTXHVDQG7UDLWV BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 

‡&UHDWLYH7HFKQLTXHV ²&RPSUHKHQVLYHQHVV  ‡([%URDGQHVVRI6FRSH  ‡([,Q'HSWK$QDO\VLV  ‡([0XOWLIDFHWHG7D[RQRP\  ‡([1XPHURXV7KHRULHV ²$UUDQJHPHQW  ‡([6HSDUDWLRQ RU6XEWUDFWLRQ   ‡([&RPELQDWLRQ RU$GGLWLRQ   ‡([5HSODFHPHQW  ‡([$FFRPPRGDWLRQ  ‡([5HYHUVDO  ‡([6WUHWFKLQJ ²6HUHQGLSLW\  ‡([3OD\  ‡([&KDQFH  ‡&UHDWLYH7UDLWV ²2SHQQHVV5LVN  ‡([$ELOLW\WRZHOFRPHQHZLGHDVRUWRGRQHZWKLQJVZLWKULVN ²'LVFLSOLQH  ‡([$ELOLW\WRVDFULILFHZKDWHYHULWWDNHVWRVXFFHHG ²5HVLOLHQFH&RQILGHQFH  ‡([$ELOLW\WRWDNHIDLOXUHVWRPLQGQRWWRKHDUW ²7UXVW  ‡([$ELOLW\WRFRRSHUDWHZLWKRWKHUVIRUWHDPZRUNLIQHFHVVDU\ BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 1RWHV 7KH H[DPSOHV LQ WKH FDWHJRULHV DUH VROHO\ LOOXVWUDWLYH QRW H[KDXVWLYH  DQG WKH FRPSDULVRQ LV UHODWLYH QRW DEVROXWH  QRU DUH WKH\ QHFHVVDULO\ PXWXDOO\ H[FOXVLYH $QG VRPH FDQ EH HDVLO\ UHFODVVLILHG HOVHZKHUH$VJHQHUDOLWLHVWKH\DOORZH[FHSWLRQV 6RXUFH)URP6HFRI)3+&7)RUPRUHGHWDLOVDOVRUHDGWKHUHVWRIWKH ERRN     

&KDSWHU,QWURGXFWLRQ²7KH&RQYHQLHQFHRI7UDQVSRUWDWLRQ 





7DEOH7KH'HVLUDELOLW\RI&UHDWLYLW\DQG,WV'DUN6LGHV 3DUW,  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB

 ‡,Q5HODWLRQWR,QVWUXPHQWDO5DWLRQDOLW\ ²'HVLUDELOLW\ ‡([)RUWKHVDNHRIHIILFLHQF\DQGHIIHFWLYHQHVVLQWKLVFDSLWDOLVWHUD RIRXUWLPH ²8QGHVLUDELOLW\ ‡([:KDW0D[:HEHU  FDOOHGWKH³LURQFDJH´RIFDSLWDOLVP ZKHUH OLYH WKH ³VHQVXDOLVWV ZLWKRXW KHDUW VSHFLDOLVWV ZLWKRXW VSLULW´²RUVRPHWKLQJZKLFKWKH)UDQNIXUW6FKRROKDVIRUFHIXOO\ DVNHGXVWREHIUHHGIURP  ‡,Q5HODWLRQWR6XEVWDQWLYH5DWLRQDOLW\ ²'HVLUDELOLW\ ‡ ([ )RU WKH VDNH RI *RG WKH .LQJ 0RWKHUODQG RU RWKHU FRPSDUDEOHLGHDOV ²8QGHVLUDELOLW\ ‡(['RPLQDWLRQDQGRSSUHVVLRQRIYDULRXVIRUPV²VRPHWKLQJ ZKLFKWKHPRGHUQVKDGVWUXJJOHGWRIUHHWKHPVHOYHVIURPLQWKH ILUVWSODFHVLQFHWKHGDZQRIPRGHUQLW\  ‡,Q5HODWLRQWR$XWRQRPRXV5DWLRQDOLW\ ²'HVLUDELOLW\ ‡([)RUWKHVDNHRILWVHOIWKHDXWRQRP\RIFUHDWLYHHQGHDYRU ²8QGHVLUDELOLW\ ‡([7KHGHFDGHQFHRILWVRZQGHJHQHUDWLRQ HJWKHGRQZVLGHVRI SRVWPRGHUQLVPLQRXUSRVWPRGHUQWLPHVRUZKDW1LHW]VFKHRQFH FDOOHG WKH XQEHDUDEOH ³XQUHDOLW\´ DQG ³IDOVHQHVV´ RI WKH DXWRQRPRXVDUWLVW¶V³LQQHUPRVWH[LVWHQFH´²DQGLQRWKHUFDVHV WKH SDLQIXO VXIIHULQJ IURP GLIIHUHQW PHQWDO LOOQHVVHV IRU WKRVH KLJKO\FUHDWLYHLQGLYLGXDOV  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  FRQWLQXHGRQQH[WSDJH       



7KH)XWXUHRI3RVW+XPDQ7UDQVSRUWDWLRQ 



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²DQGIRUWKDWPDWWHU)&' 6RXUFH)URP6HFRI)3+&7)RUPRUHGHWDLOVDOVRUHDGWKHUHVWRIWKH ERRN                             

&KDSWHU,QWURGXFWLRQ²7KH&RQYHQLHQFHRI7UDQVSRUWDWLRQ 





7DEOH3RVWKXPDQ,VP3RVW+XPDQLVPDQG7UDQV+XPDQLVP BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 

‡3RVW+XPDQLVP ²7KH QHRORJLVP ³SRVWKXPDQ´ XVHG LQ P\ ERRNV VKRXOG QRW EH FRQIXVHG ZLWK DQRWKHU WHUP ZKLFK ORRNV VLPLODU EXW KDV D WRWDOO\ GLIIHUHQW PHDQLQJ LQ WKH OLWHUDWXUH RI SRVWPRGHUQLVP QDPHO\ ³SRVW KXPDQLVP´²ZKLFK FRQVWLWXWHV D FULWLTXH RI ³KXPDQLVP´ DV WUDGLRQDOO\XQGHUVWRRG HVSHFLDOO\WKRXJKQRWH[FOXVLYHO\LQUHODWLRQ WR WKH LGHD RI SURJUHVV LQ VFLHQFH DQG UHDVRQ LQ WKH (QOLJKWHQPHQW SURMHFW  :.  ²0\ ZRUNV UHMHFW WKH SURMHFW RI ³SRVWPRGHUQLVP´ DQG SURSRVH WKH IXWXUHZRUOGRIZKDW,RULJQDOO\FDOOHG³DIWHUSRVWPRGHUQLW\´LQ)+& DQG)&'IRULQVWDQFH 

‡7UDQV+XPDQLVP ²$OVR WKH QHRORJLVP ³SRVWKXPDQ´ XVHG LQ P\ ERRNV VKRXOG QRW EH FRQIXVHGZLWKDVLPLODUWHUPZKLFKLVXVHGWRFKDPSLRQWKHLGHRORJ\ RI WHFKQRORJ\ IRU WKH IWXUXH FRH[LVWHQFH EHWZHHQ KXPDQV DQG F\ERUJVLQ³WUDQVKXPDQLVP´ :.D  ²,QVWHDG P\ WHUP ³SRVWKXPDQ´ LQ UHODWLRQ WR ³SRVWKXPDQLVP´ DOVR UHMHFWV ³WUDQVKXPDQLVP´ HVSHFLDOO\ WKRXJK QRW H[FOXVLYHO\ LQ UHODWLRQ WR WKH SURPLVHV RI WHFKQRORJ\  DQG UHIHUV WR VRPHWKLQJ HOVH DOWRJHWKHUWKDWLVWKHIXWXUHH[WLQFWLRQRIKXPDQVDQGLWVSRVWKXPDQ VXFFHVVRUVLQGHHSVSDFHDQGEH\RQGXQWRPXOWLYHUVHV ²&KDSWHU 7ZR RI P\ ERRN RQ HWKLFV %(3(  SURYLGHV D PRUH FRPSUHKHQVLYHFULWLTXHRIWUDQVKXPDQLVP 

‡3RVWKXPDQ,VP ²:LWK WKHVH WZR FODULILFDWLRQV LQ PLQG WKH ³SRVWKXPDQV´ DV HQYLVLRQHGLQP\ERRNV FDQWDNHGLIIHUHQWIRUPVDQG,SURSRVHGLQ P\ GLIIHUHQW ERRNV VRPH RI WKHP VXFK DV ³XQIROGLQJ XQFRQVFLRXVQHVV´ ³IORDWLQJ FRQVFLRXVQHVV´ ³K\SHUVSDWLDO FRQVFLRXVQHVV´ ³WKLQNLQJ PDFKLQHV´ ³WKLQNLQJ URERWV´ ³JHQHWLFDOO\ DOWHUHGVXSHULRUEHLQJV´³F\ERUJV´DQGRWKHUV DVDOUHDG\DQDO\]HGLQ P\SUHYLRXVZRUNV  ²7KH\ZLOOHYROYHLQFRQMXQFWLRQZLWKRWKHUYLVLRQVRIPLQHLQUHODWLRQ WRQDWXUHVRFLHW\DQGFXOWXUH BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 6RXUFHV)URP 6HFRI)3+( DQGDOVR%(3( )RUPRUHGHWDLOVDOVR UHDGWKHUHVWRIWKHERRNV DQGRWKHUERRNVRIPLQH  



7KH)XWXUHRI3RVW+XPDQ7UDQVSRUWDWLRQ 



7DEOH7KUHH*UHDW)XWXUH7UDQVIRUPDWLRQVRIWKH0DUWLDO%RG\ 3DUW,  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB

 ‡9LUWXDO%DWWOH ²([YLUWXDOILJKW ²([YLUWXDOPHPRU\  ‡7KH+\SHU0DUWLDO%RG\ ²,QUHODWLRQWRWKHSK\VLFDOGLPHQVLRQ ‡([VWULNLQJ HJSXQFKLQJNLFNLQJWUDSSLQJDFXSUHVVXUHVWULNLQJ DQGVRRQLQDQDPD]LQJZD\  ‡([JUDSSLQJ HJWKURZLQJSLQQLQJMRLQWORFNLQJDQGVRRQLQDQ DPD]LQJZD\  ‡([UXQQLQJDQGZDONLQJ HJRQGLIIHUHQWVXUIDFHV  ‡([MXPSLQJ HJWKURXJKZDOOVWUHHVHWF  ‡([IO\LQJ HJWKURXJKVSDFH  ‡([HQGXULQJSDLQ HJDEVRUELQJSXQFKHVNLFNVDQGVRRQLQDQ DPD]LQJZD\  ‡([XVLQJH[WUHPHO\DGYDQFHGKLWHFKZHDSRQV ‡([KHDOLQJ HJZLWKVSHFLDOHQHUJ\HWF  ‡([HQWHULQJ HJLQWRGLIIHUHQWGLPHQVLRQVRIVSDFH  ‡ ([ VHQVLQJ HJ  LQ  H[WUDRUGLQDU\ ZD\V WKURXJK VSDFH DQG WLPH HWF  ‡([ZHDULQJKLWHFKVXLWVIRUGHIHQVLYHDQGRIIHQVLYHSXUSRVHV HJ OLNHDKLWHFKDUPRU  ²,QUHODWLRQWRWKHPHQWDOGLPHQVLRQ ‡([WKHDELOLW\WRUHOD[WKHPDUWLDOERG\LQDZD\WKDWFXUUHQWKXPDQV FDQQRW ‡([WKHDELOLW\WRFRQFHQWUDWHWKHPDUWLDOPLQGLQDZD\WKDWFXUUHQW KXPDQVDUHQRWDFFXVWRPHGWR ‡([WKHDELOLW\WREUHDWKHDQGEHWLPHO\LQSUHSDULQJWKHPDUWLDOERG\ IRUILJKWLQJLQDZD\WKDWFXUUHQWKXPDQVDUHQRWJRRGDW

 ‡7KH3RVW0DUWLDO)ORDWLQJ0LQG ²([WKHPLQGZLWKRXWWKHKXPDQERG\ ²([WKHTXHVWIRUVSLULWXDOLW\EH\RQGPDUWLDODUWV BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  FRQWLQXHGRQQH[WSDJH   

&KDSWHU,QWURGXFWLRQ²7KH&RQYHQLHQFHRI7UDQVSRUWDWLRQ 





7DEOH7KUHH*UHDW)XWXUH7UDQVIRUPDWLRQVRIWKH0DUWLDO%RG\ 3DUW,,  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 1RWHV 7KH H[DPSOHV LQ WKH FDWHJRULHV DUH VROHO\ LOOXVWUDWLYH QRW H[KDXVWLYH  DQG WKH FRPSDULVRQ LV UHODWLYH QRW DEVROXWH  QRU DUH WKH\ QHFHVVDULO\ PXWXDOO\ H[FOXVLYH $QG VRPH FDQ EH HDVLO\ UHFODVVLILHG HOVHZKHUH$VJHQHUDOLWLHVWKH\DOORZH[FHSWLRQV 6RXUFH)URP6HFRI)3+0$6HHWH[WIRUFLWDWLRQV                                 



7KH)XWXUHRI3RVW+XPDQ7UDQVSRUWDWLRQ 



7DEOH7KUHH*UHDW)XWXUH7UDQVIRUPDWLRQVRIWKH6H[XDO%RG\ BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  ‡9LUWXDO3OHDVXUH ²([YLUWXDO6H[ ²([YLUWXDO5HFDOO

 ‡7KH+\SHU6H[XDO%RG\ ²,QUHODWLRQWRWKHSK\VLFDOGLPHQVLRQ ‡ ([ WKH DELOLW\ WR SHUIRUP GLIIHUHQHW VH[XDO SRVLWLRQV ZLWKRXW WKH YDULRXVSK\VLFDOOLPLWDWLRQVWKDWKXPDQVFXUUHQWO\KDYH ‡([WKHDELOLW\WRSURGXFHXQXVXDODPRXQWRIVH[XDOHQHUJ\WRHQGXUH LQVH[XDODFWVLQDZD\WKDWKXPDQVFXUUHQWO\FDQQRW ‡([WKHDELOLW\WRHQJDJHLQPXOWLSOHVH[XDOH[SHULHQFHVFRPSDUDEOH WR EXW GLIIHUHQW IURP  QRQKXPDQ VH[XDOLW\ HJ KHUPDSKURGLWH PRQRHFLRXV VH[VZLWFKLQJ DQG PDQ\ RWKHU W\SHV  WKDW FXUUHQW KXPDQVFDQQRW ²,QUHODWLRQWRWKHPHQWDOGLPHQVLRQ ‡([WKHDELOLW\WRUHOD[WKHVH[XDOERG\LQDZD\WKDWFXUUHQWKXPDQV DUHQRWDFFXVWRPHGWR ‡([WKHDELOLW\WRFRQFHQWUDWHWKHVH[XDOPLQGLQDZD\WKDWFXUUHQW KXPDQVDUHQRWJRRGDW ‡([WKHDELOLW\WREUHDWKHDQGEHSDWLHQWLQSUHSDULQJWKHVH[XDOERG\ IRUVH[XDOLW\LQDZD\WKDWFXUUHQWKXPDQVDUHQRWDEOHWR

 ‡7KH3RVW6H[XDO)ORDWLQJ0LQG ²([WKHPLQGZLWKRXWWKHKXPDQERG\ ²([WKHTXHVWIRUVSLULWXDOLW\EH\RQGVH[XDOLW\ BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 1RWHV 7KH H[DPSOHV LQ WKH FDWHJRULHV DUH VROHO\ LOOXVWUDWLYH QRW H[KDXVWLYH  DQG WKH FRPSDULVRQ LV UHODWLYH QRW DEVROXWH  QRU DUH WKH\ QHFHVVDULO\ PXWXDOO\ H[FOXVLYH $QG VRPH FDQ EH HDVLO\ UHFODVVLILHG HOVHZKHUH$VJHQHUDOLWLHVWKH\DOORZH[FHSWLRQV 6RXUFH)URP6HFRI)3+66HHWH[WIRUPRUHLQIR      

&KDSWHU,QWURGXFWLRQ²7KH&RQYHQLHQFHRI7UDQVSRUWDWLRQ 





7DEOH7KH7ULQLW\RI3UH0RGHUQLW\ BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB

 ‡3UH)UHH6SLULWHG3UH0RGHUQLW\ 3UH0RGHUQLVP DQG ,WV,QWHUQDO6SOLW ²&RPSHWLQJ ZRUOGYLHZV DQG YDOXHV ERWK ZLWKLQ DQG EHWZHHQ OLQHDU FHQWULF HJ,VODPLF&KULVWLDQ-XGDLF,PSHULDO5RPDQ DQGF\FOLFDO FHQWULF HJ&RQIXFLDQ7DRLVW+LQGXDQG%XGGKLVW RULHQWDWLRQV ²&RPSDUHPRGHUQLVPZLWKSUHPRGHUQLVPKHUHLQUHODWLRQWRWKHVHYHQ GLPHQVLRQV RI KXPDQ H[LVWHQFH OLNH WKH WUXH DQG WKH KRO\ HJ GLIIHUHQW YHUVLRQV RI HSLVWHPLF GRJPDV DQG UHOLJLRXV VXSHUVWLWLRQV  WKH HYHU\GD\ DQG WKH WHFKQRORJLFDO HJGLIIHUHQW YHUVLRQV RI QRQ WHFKQRSKLOLVP DQG QRQFRQVXPHULVP  WKH EHDXWLIXOVXEOLPH HJ GLIIHUHQW YHUVLRQV RI DHVWKHWLF QRQDXWRQRP\  DQG WKH JRRG DQG WKH MXVW HJGLIIHUHQWYHUVLRQVRIPRUDOSDUWLFXODULVP   ‡3UH&DSLWDOLVW3UH0RGHUQLW\ 3UH0RGHUQL]DWLRQ DQG ,WV2ZQ'LVFRQWHQWV ²&RPSHWLQJ YHUVLRQV RI VRFLHWDO DUUDQJHPHQWV HJ IHXGDOLVP PRQDUFKLVPDQGWKHKRO\RUGHU   ‡+HJHPRQLF3UH0RGHUQLW\DQG,WV&RXQWHUYDLOLQJ)RUFHV ²'LIIHUHQWSRZHUFHQWHUVDQGWKHLUHQHPLHV HJWKH5RPDQ(PSLUH DQGWKH³EDUEDULDQKRUGHV´WKH³+RO\&UXVDGHV´DQGWKH0XVOLPVWKH 0LGGOH .LQJGRP DQG WKH LQYDGLQJ WULEHV GLIIHUHQW VRFLDO FDVWHV LQ ,QGLDDQGZDUULQJ*UHHNFLW\VWDWHV  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 1RWHV 7KH H[DPSOHV LQ HDFK FDWHJRU\ DUH VROHO\ LOOXVWUDWLYH QRW H[KDXVWLYH  QRU QHFHVVDULO\ PXWXDOO\ H[FOXVLYH DQG WKH FRPSDULVRQ LV UHODWLYH QRWDEVROXWH $VJHQHUDOLWLHVWKH\DOORZH[FHSWLRQV$OVRLWGRHV QRWPDWWHUZKDWWKH³EDVH´HUDLVLQWKHDQDO\VLVRIDQ\WULQLW\$QGLQWKH SUHVHQW FRQWH[W WKH ³EDVH´ HUD LV PRGHUQLW\ IRU LQVWDQFH ZLWK LWV ³IUHH VSLULWHG PRGHUQLW\´ DQG WKH RWKHU WZR SDUWV  6R IRU SUHPRGHUQLW\ WKH WULQLW\ WDNHV WKH IRUP RI VD\ ³SUHIUHHVSLULWHG SUHPRGHUQLW\´ WRJHWKHU ZLWKWKHRWKHUWZRSDUWV 6RXUFHV)URP&KRI%&,9DQGDOVRWKHYROXPHVRI)+&     



7KH)XWXUHRI3RVW+XPDQ7UDQVSRUWDWLRQ 



7DEOH7KH7ULQLW\RI0RGHUQLW\ 3DUW,  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB

 ‡)UHH6SLULWHG0RGHUQLW\ 0RGHUQLVP DQG,WV,QWHUQDO6SOLW ²2QWKH7UXHDQGWKH+RO\ ‡ 7KH  IUHHGRP IURP WKH GRJPDV RI WKH SDVW WR WKH EHWWHU XQGHUVWDQGLQJRIDQGXQLRQZLWKWKHZRUOGDQGVHOI &KRI)+&  ‡$OWHUQDWLYHGLVFRXUVHVDERXWWKHWUXH HJDQWLVFLHQFHGLVFRXUVHV  DQGWKHKRO\ QRQPDLQVWUHDPWKHRORJLHV  &KRI)+&  ²2QWKH7HFKQRORJLFDODQGWKH(YHU\GD\ ‡ 7KH IUHHGRP IURP OLIH KDUVKQHVV WR WKH KLJKHU WHFKQRSKLOLF FRQVXPHULVWLFOLIHIRUP &KRI)+&  ‡ $OWHUQDWLYH GLVFRXUVHV DERXW WKH HYHU\GD\  HJ WUDQVFHQGHQWDO PLQGVHWV DQGWKHWHFKQRORJLFDO HJ$UFDGLDQLVP  &KRI)+&  ²2QWKH*RRGDQGWKH-XVW ‡ 7KH IUHHGRP IURP WKH WKHRDULVWRFUDWLF W\UDQQ\ WR WKH PRUDO XQLYHUVDOLW\IRUDMXVWVRFLHW\ &KRI)+&  ‡ $OWHUQDWLYH GLVFRXUVHV DERXW WKH MXVW HJ &RPPXQLVP $QDUFKLVP  DQG WKH JRRG HJ 1D]LVP)DVFLVP DQG =DUDWKXVWULDQLVP  &KVRI)+&  ²2QWKH%HDXWLIXODQGWKH6XEOLPH ‡7KHIUHHGRPIURPWKHH[WHUQDOGLVWRUWLRQRIDHVWKHWLFSOHDVXUHWRWKH ERXQGOHVVLQILQLW\RIWRWDOLW\LQDUWLVWLFDXWRQRP\ &KRI)+&  ‡$OWHUQDWLYHGLVFRXUVHVDERXWWKHEHDXWLIXOVXEOLPH HJNLWVFKDQG KLVWRULFDODYDQWJDUGLVP  &KRI)+&    ‡&DSLWDOLVW0RGHUQLW\ 0RGHUQL]DWLRQ DQG,WV2ZQ'LVFRQWHQWV ²'XULQJWKH,QGXVWULDO5HYROXWLRQ ‡([0DU[RQWKHLQVWLWXWLRQRILQHTXDOLW\ &KRI)+&  ²'XULQJWKH0RGHUQ5DWLRQDO,QVWUXPHQWDO(SRFK ‡([:HEHURQWKHSROLWLFVRIVRIWOLEHUDOLQVWLWXWLRQV &KRI)+&  ²'XULQJWKH*UHDW'HSUHVVLRQ ‡([.H\QHVRQWKHP\WKRIWKHIUHHPDUNHW &KVRI)+&  ²'XULQJWKH&ROG:DU ‡([/DVFKRQWKHQDUFLVVLVWLFFXOWXUHLQGXVWU\ &KVRI)+&  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  FRQWLQXHGRQQH[WSDJH   



&KDSWHU,QWURGXFWLRQ²7KH&RQYHQLHQFHRI7UDQVSRUWDWLRQ 





7DEOH7KH7ULQLW\RI0RGHUQLW\ 3DUW,,  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  ‡+HJHPRQLF0RGHUQLW\DQG,WV&RXQWHUYDLOLQJ)RUFHV ²7KH/HJDFLHVRI&RORQLDOLVPDQG,PSHULDOLVP ‡([(XURSHDQFRORQL]DWLRQRIPRVWRIWKHPRGHUQZRUOG &KRI )+&  ²7KH6WUXJJOHIRU'HFRORQLDOL]DWLRQ ‡([7KHFRXQWHUYDLOLQJIRUFHVRIUHVHQWPHQWUHFKDQWPHQW DQGUHJLRQDOLVP &KV RI)+&  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 1RWHV 7KH H[DPSOHV LQ HDFK FDWHJRU\ DUH VROHO\ LOOXVWUDWLYH QRW H[KDXVWLYH  QRU QHFHVVDULO\ PXWXDOO\ H[FOXVLYH DQG WKH FRPSDULVRQ LV UHODWLYH QRWDEVROXWH $VJHQHUDOLWLHVWKH\DOORZH[FHSWLRQV 6RXUFHV)URPWKHYROXPHVRI)+&²DQGDOVRIURP)&'                         



7KH)XWXUHRI3RVW+XPDQ7UDQVSRUWDWLRQ 



7DEOH7KH7ULQLW\RI3RVW0RGHUQLW\ BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  ‡)UHH6SLULWHG3RVWPRGHUQLW\ 3RVWPRGHUQLVP DQG,WV,QWHUQDO6SOLW ²2QWKH7UXHDQGWKH+RO\ ‡3RVWPRGHUQSHUIRUPDWLYHWXUQIRUNQRZLQJDQGLWVHQHPLHV &KRI )+&  ‡3RVWPRGHUQFRPSDUDWLYHWKHRORJ\DQGLWVRSSRQHQWV &KRI)+&  ²2QWKH7HFKQRORJLFDODQGWKH(YHU\GD\ ‡ 3RVWPRGHUQ FRUSRUDWH WHFKQRORJLFDO PLQGVHW DQG LWV DGYHUVDULHV &KRI)+&  ‡3RVWPRGHUQSRVWPDWHULDOLVPDQGLWVFULWLFV &KRI)+&  ²2QWKH*RRGDQGWKH-XVW ‡3RVWPRGHUQSROLWLFVRIGLIIHUHQFHDQGLWVIRHV &KRI)+&  ²2QWKH%HDXWLIXODQGWKH6XEOLPH ‡3RVWPRGHUQGHFRQVWUXFWLRQDQGLWVGLVVHQWHUV &KRI)+&   ‡&DSLWDOLVW3RVWPRGHUQLW\ 3RVWPRGHUQL]DWLRQ DQG,WV2ZQ 'LVFRQWHQWV ²'XULQJWKH3RVW&ROG:DUDQG%H\RQG ‡ ([ SRVW)RUGLVP DQG LWV VKRUWFRPLQJV  &K RI )+& &KV RI )&'   ‡+HJHPRQLF3RVWPRGHUQLW\DQG,WV&RXQWHUYDLOLQJ)RUFHV ²7KH'HEDWHRQWKH*OREDO9LOODJH ‡([XQLFLYLOL]DWLRQDOLVPYVPXOWLFLYLOL]DWLRQDOLVP &KRI)+&  ²7KH5HVLVWDQFH0RYHPHQW ‡ ([ UHFKDQWPHQW DQG WKH SROLWLFV RI FLYLOL]DWLRQDO FODLPV HJ ,VODPLF &RQIXFLDQ DQG RWKHU HWKRV LQ UHODWLRQ WR WKH 6DPH  &K RI)+&&KRI)&'  ‡ ([ UHVHQWPHQW DQG WKH SROLWLFV RI UHVXUJHQFH HJ WKH ULVLQJ &KLQHVHVXSHUSRZHUWKHJURZLQJ(8DQGRWKHUSOD\HUVLQUHODWLRQ WRWKH86DQGKHUDOOLHV  &KRI)+&&KRI)&'  ‡ ([ UHJLRQDOLVP DQG WKH SROLWLFV RI LQHTXDOLW\ HJ WUDQV RU LQWHU QDWLRQDO EORFV WKH 1RUWK6RXWK GLYLGH 1*2¶V  &K RI )+& &KRI)&'  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 1RWHV 7KH H[DPSOHV LQ HDFK FDWHJRU\ DUH VROHO\ LOOXVWUDWLYH QRW H[KDXVWLYH  QRU QHFHVVDULO\ PXWXDOO\ H[FOXVLYH DQG WKH FRPSDULVRQ LV UHODWLYH QRWDEVROXWH $VJHQHUDOLWLHVWKH\DOORZH[FHSWLRQV 6RXUFHV)URP)&'DQGWKHYROXPHVRI)+&

&KDSWHU,QWURGXFWLRQ²7KH&RQYHQLHQFHRI7UDQVSRUWDWLRQ 





7DEOH7KH7ULQLW\RI$IWHU3RVWPRGHUQLW\ BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  ‡)UHH6SLULWHG$IWHU3RVWPRGHUQLW\ $IWHU3RVWPRGHUQLVP DQG ,WV,QWHUQDO6SOLW ²7KHGLVFRXUVHRIQDNHGFRQWLQJHQF\ &KRI)&'&KRI)3+&   ‡3RVW&DSLWDOLVW$IWHU3RVWPRGHUQLW\ $IWHU3RVWPRGHUQL]DWLRQ  DQG,WV2ZQ'LVFRQWHQWV ²'LIIHUHQWYHUVLRQVRISRVWFDSLWDOLVPDQGSRVWGHPRFUDF\DQG WKHLUHQHPLHV &KRI)&'&KVRI)3+&   ‡+HJHPRQLF$IWHU3RVWPRGHUQLW\DQG,WV&RXQWHUYDLOLQJ)RUFHV ²7KH&\FOLFDO3URJUHVVLRQRI+HJHPRQ\LQ0XOWLYHUVHV &KVRI )&'&KRI)3+&  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 1RWHV 7KH H[DPSOHV LQ HDFK FDWHJRU\ DUH VROHO\ LOOXVWUDWLYH QRW H[KDXVWLYH  QRU QHFHVVDULO\ PXWXDOO\ H[FOXVLYH DQG WKH FRPSDULVRQ LV UHODWLYH QRWDEVROXWH $VJHQHUDOLWLHVWKH\DOORZH[FHSWLRQV 6RXUFHV)URP)&'DQGDOVR)+&             

‡3$577:2‡ BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  1HWZRUNV                                

  





 &+$37(5 1(7:25.6$1'7+(,5,175,&$&,(6 BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  $V ORQJ DV YHKLFOHV URDGV SDUNLQJ ORWV JDUDJHV DQG DXWRPRELOHUHODWHG EXVLQHVVHV FRYHU D VLJQLILFDQW SRUWLRQ RI WKH ODQGVFDSH DQG GHWHUPLQH WKH GHVLJQRIQHDUO\HYHU\WKLQJHOVHPRVW $PHULFDQ FLWLHV ZLOO FRQWLQXH WR EH G\VIXQFWLRQDO DQG GHJUDGHG VOXPVFDSHVFKRNHGZLWKWUDIILF´>@ ²0LFKDHO($UWK  



7KH)HDVLELOLW\RI1HWZRUNV 7KHVWXG\RIWUDQVSRUWDWLRQLQYROYHVERWKQHWZRUNVDQGRSHUDWLRQV² DVDOUHDG\H[SODLQHGLQ6HF 7KHUHODWLRQVKLSEHWZHHQQHWZRUNVDQGRSHUDWLRQVLVQRWLQGHSHQGHQW VLQFH QHWZRUNV ZLWKRXW RSHUDWLRQV DUH EOLQG MXVW DV RSHUDWLRQV ZLWKRXW QHWZRUNVDUHHPSW\ )2'@ ORJRV DIIL[HG ZKLFK FDQ EH JLYHQ DZD\ DV SUL]HV  IRU JRRG )2'SUHYHQWLRQSHUIRUPDQFH´ ‡³)2':DONVLQZKLFKSHUVRQQHOZDONGRZQDIOLJKWOLQHVKRXOGHUWR VKRXOGHUZRUNLQJWRJHWKHUWRSLFNXS)2'´ ‡ ³ )2' $ZDUHQHVV :HHN  D ZHHNORQJ VFKHGXOH RI HYHQWV²VXFK DV WUDLQLQJ VHVVLRQV DQG )2' FRQWURO HTXLSPHQW GLVSOD\V²WDUJHWHG WR JHWWKHZRUNIRUFHLQYROYHGDQGLQFUHDVHWKHLUNQRZOHGJHRIWKH)2' 3URJUDP´  (OVHZKHUHIRULQVWDQFH³WKH8QLWHG6WDWHV$LU)RUFH«LVDOZD\VORRNLQJ IRU FUHDWLYH ZD\V WR HQFRXUDJH )2' DZDUHQHVV 7KH WK $LU ([SHGLWLRQDU\ *URXS DW $OL $LU %DVH LQ ,UDT EULQJV WKH IXQ RI WUHDVXUH KXQWLQJLQWRLWV)2':DONVE\KLGLQJDSUL]HG *ROGHQ%ROW VRPHZKHUH DORQJWKHIOLJKWOLQH7KH$LUFUDIW0DLQWHQDQFH*URXSDW7LQNHU$LU)RUFH %DVHSRVWVVLJQVWKDWVD\ JHW\RXUILYHWRGD\ RU ZKDWZHUH\RXUILYH WR HQFRXUDJH SHUVRQQHO WR SLFN XS DW OHDVW ILYH SLHFHV RI )2' HYHU\ GD\´ :.JJ3+DQVRQ'0LOOHU  E 7UDLQLQJ $QG LQ UHJDUG WR WUDLQLQJ²LW LV D GLIIHUHQW IRUP RI DZDUHQHVV E\ SUDFWLFHLQIDFWWUDLQLQJFDQEH³DQRSSRUWXQLW\WRKLJKOLJKWDUHDVQHHGLQJ LPSURYHPHQW UHLQIRUFH VRPH RI WKH UXOHV WKDW DUH QRW DOZD\V EHLQJ DGKHUHG WR LQWURGXFH QHZ LQLWLDWLYHV DQG DSSODXG DFFRPSOLVKPHQWV )RU LQVWDQFH HOHPHQWV RI QHZ HPSOR\HH WUDLQLQJ VKRXOG LQFOXGH´ WKH IROORZLRQJ :.JJ   ‡ ³'RQ¶W DVVXPH HYHU\RQH NQRZV ZKDW )RUHLJQ 2EMHFW 'DPDJH LV 6KRZSKRWRVRI)2'DQGSDVVDURXQGVDPSOHVRIGHEULVIRXQGDW\RXU IDFLOLW\´ ‡³,GHQWLI\WKH)2'623 6WDQGDUG2SHUDWLQJ3URFHGXUH DQGSURYLGHD FRS\RIWKH)2'SURFHGXUHWRHDFKQHZHPSOR\HH´ ‡³(PSKDVL]HWKHLPSRUWDQFHRI &OHDQ$VLQFKDRVWKHRU\@ VXFKDVDQ DEUXSWVWHHULQJPDQHXYHUE\DVLQJOHPRWRULVW7UDIILFVFLHQWLVWVOLNHQVXFK DVLWXDWLRQWRWKHVXGGHQIUHH]LQJRIVXSHUFRROHGIOXLG+RZHYHUXQOLNHD IOXLGWUDIILFIORZLVRIWHQDIIHFWHGE\VLJQDOVRURWKHUHYHQWVDWMXQFWLRQV WKDW SHULRGLFDOO\ DIIHFW WKH VPRRWK IORZ RI WUDIILF $OWHUQDWLYH PDWKHPDWLFDO WKHRULHV H[LVW VXFK DV %RULV .HUQHU V WKUHHSKDVH WUDIILF WKHRU\´ :.TT  -@DQG >6@ IRU UHVSHFWLYHO\ WKH ZLGH PRYLQJ MDP DQG V\QFKURQL]HG IORZ WUDIILF SKDVHV IRXQGLQ.HUQHU¶WKUHHSKDVHWUDIILFWKHRU\7KHFRPPRQIHDWXUHV RIWUDIILFFRQJHVWLRQFDQEHUHFRQVWUXFWHGLQVSDFHDQGWLPHZLWKWKHXVHRI WKH$6'$DQG)272PRGHOV´ :.TT  7KLUGO\DQDGGLWLRQDOPDLQFULWLFLVPRIWKHVWXG\RQWUDIILFFRQJHVWLRQ DQGXUEDQVSUDZOLVWKDWWKHGHEDWHLVGHILQLWLRQDOLQQDWXUH )RU LQVWDQFH ³GLVFXVVLRQV DQG GHEDWHV DERXW VSUDZO DUH RIWHQ REIXVFDWHG E\ WKH DPELJXLW\ DVVRFLDWHG ZLWK WKH SKUDVH )RU H[DPSOH

&KDSWHU2SHUDWLRQVDQGWKHLU&RPSOLFDWLRQV 





VRPH FRPPHQWDWRUV PHDVXUH VSUDZO RQO\ ZLWK WKH DYHUDJH QXPEHU RI UHVLGHQWLDO XQLWV SHU DFUH LQ D JLYHQ DUHD %XW RWKHUV DVVRFLDWH LW ZLWK GHFHQWUDOL]DWLRQ VSUHDG RI SRSXODWLRQ ZLWKRXW D ZHOOGHILQHG FHQWUH  GLVFRQWLQXLW\ OHDSIURJ GHYHORSPHQW DV GHILQHG EHORZ  VHJUHJDWLRQ RI XVHVDQGVRIRUWK´ :.UU  )RXUWKO\ DQRWKHU DGGLWLRQDO PDLQ FULWLFLVP RI WKH VWXG\ RQ WUDIILF FRQJHVWLRQ DQG XUEDQ VSUDZO LV WKDW ³UXVK KRXU WUDIILF FRQJHVWLRQ LV LQHYLWDEOH´ :.TT  )RU LQVWDQFH IRU WKH FULWLFV ³D  VWXG\ LQ WKH 7KH $PHULFDQ (FRQRPLF5HYLHZLQGLFDWHVWKDWWKHUHPD\EHD IXQGDPHQWDOODZRIURDG FRQJHVWLRQ  7KH UHVHDUFKHUV IURP WKH 8QLYHUVLW\ RI 7RURQWR DQG WKH /RQGRQ 6FKRRO RI (FRQRPLFV DQDO\]HG GDWD IURP WKH 86 +LJKZD\ 3HUIRUPDQFHDQG0RQLWRULQJ6\VWHPIRUDQGDVZHOODV LQIRUPDWLRQ RQ SRSXODWLRQ HPSOR\PHQW JHRJUDSK\ WUDQVLW DQG SROLWLFDO IDFWRUV 7KH\ GHWHUPLQHG WKDW WKH QXPEHU RI YHKLFOHNLORPHWHUV WUDYHOHG 9.7  LQFUHDVHV LQ GLUHFW SURSRUWLRQ WR WKH DYDLODEOH ODQHNLORPHWHUV RI URDGZD\V 7KH LPSOLFDWLRQ LV WKDW EXLOGLQJ QHZ URDGV DQG ZLGHQLQJ H[LVWLQJ RQHV RQO\ UHVXOWV LQ DGGLWLRQDO WUDIILF WKDW FRQWLQXHV WR ULVH XQWLO SHDN FRQJHVWLRQ UHWXUQV WR WKH SUHYLRXV OHYHO´ :. TT / .OHLQ *'XUDQWRQ  $QG ILIWKO\ VWLOO DQRWKHU DGGLWLRQDO PDLQ FULWLFLVP RI WKH VWXG\ RQ WUDIILF FRQJHVWLRQ DQG XUEDQ VSUDZO LV WKDW WKH GHEDWH KDV D VXEMHFWLYH GLPHQVLRQ )RU LQVWDQFH IRU WKH FULWLFV VRPH LQGLYLGXDOV FRQVLGHU WKH GHEDWH RI WUDIILF FRQJHVWLRQ DV RQH EDVHG RQ ³VXEMHFWLYH OLIHVW\OH FKRLFHV GLIIHUHQWLDWLQJ EHWZHHQ FDURZQLQJ DQG FDUIUHH KRXVHKROGV´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



7KH)XWXUHRI3RVW+XPDQ7UDQVSRUWDWLRQ 



WKH H[SOLFDELOLW\LQH[SOLFDELOLW\ SULQFLSOH WKH ILFWLRQUHDOLW\ SULQFLSOH WKH ILQLWHQHVVWUDQVILQLWHQHVV SULQFLSOH WKH SUHFLVHQHVVYDJXHQHVV SULQFLSOH WKH VLPSOHQHVVFRPSOLFDWHGQHVV SULQFLSOH WKH RSHQQHVVKLGGHQQHVV SULQFLSOH WKH GHQVHQHVVHPSWLQHVV SULQFLSOH WKH FKDQJHFRQVWDQF\ SULQFLSOHWKHRUGHUFKDRVSULQFLSOHWKHVORZQHVVTXLFNQHVVSULQFLSOHWKH H[SDQVLRQFRQWUDFWLRQ SULQFLSOH WKH WKHRU\SUD[LV SULQFLSOH WKH FRQYHQWLRQQRYHOW\ SULQFLSOH WKH HYROXWLRQWUDQVIRUPDWLRQ SULQFLSOH WKH V\PPHWU\DV\PPHWU\ SULQFLSOH WKH VRIWQHVVKDUGQHVV SULQFLSOH WKH VHULRXVQHVVSOD\IXOQHVV SULQFLSOH WKH DFWLYHQHVVLQDFWLYHVV SULQFLSOH WKH UHJUHVVLRQSURJUHVVLRQ SULQFLSOH WKH VDPHGLIIHUHQFH SULQFLSOH DQG WKH VWDELOLW\UHDFWLRQSULQFLSOH )RU LQVWDQFH LQ UHODWLRQ WR WKH IRUPDOQHVVLQIRUPDOQHVV SULQFLSOH LI WKHUH LV IRUPDOQHVV HJ WKH IRUPDO ORJLFDO UHTXLUHPHQW RI VRXQGQHVV FRQVLVWHQF\ DQG FRPSOHWHQHVV LQ D V\VWHP RI LGHDV DV LQ WKH VWXG\ RQ WUDIILFFRQJHVWLRQDQGXUEDQVSUDZO WKHUHLVLQIRUPDOQHVV HJWKH QRQ IRUPDO H[LVWHQFH RI XQVRXQGQHVV LQFRQVLVWHQF\ DQG LQFRPSOHWHQHVV LQ WKH VWXG\ RQ WUDIILF FRQJHVWLRQ DQG XUEDQ VSUDZO DV VKRZQ LQ WKH FULWLFLVPV WKDW WKHUH DUH GLVDJUHHPHQWV RQ WUDIILF FODVVLILFDWLRQ WKDW WKH GHEDWHLVGHILQLWLRQDOLQQDWXUHWKDWWKHGHEDWHKDVDVXEMHFWLYHGLPHQVLRQ HWF $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,Q UHODWLRQ WR WKH DEVROXWHQHVVUHODWLYHQHVV SULQFLSOH LI WKHUH LV DEVROXWHQHVV HJWKHDEVROXWHYLHZRIWKRVHZKRGHIHQGXUEDQVSUDZODV ³RQHVXEXUEDQ'HWURLWSROLWLFLDQGHIHQGVORZGHQVLW\GHYHORSPHQWDV WKH SUHIHUUHG OLIHVW\OH FKRLFH RI KLV FRQVWLWXHQWV FDOOLQJ LW WKH $PHULFDQ 'UHDP XQIROGLQJ EHIRUH \RXU H\HV ´  WKHUH LV UHODWLYHQHVV HJ ZKDW LV ULJKWIRUWKHGHIHQGHUVRIXUEDQVSUDZOLVQRWQHFHVVDULO\VRIRUWKHFULWLFV ZKR UHMHFW LW RQ GLIIHUHQW JURXQGV OLNH WUDIILF FRQJHVWLRQ QHJDWLYH HQYLURQPHQWDODQGSXEOLFKHDOWKRXWFRPHVHWF  :.UU/3DWWHUVRQ  $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,QUHODWLRQWRWKHSDUWLDOLW\WRWDOLW\SULQFLSOHLIWKHUHLVSDUWLDOLW\ HJ WKH SDUWLDO YLHZ RI ³D VLQJOH PRWRULVW´ HQJDJLQJ LQ ³DQ DEUXSW VWHHULQJ PDQHXYHU´ LQ D KHDY\ EXW IUHH IORZLQJ WUDIILF  WKHUH LV WRWDOLW\ HJ WKH PRUHKROLVWLFYLHZRIWUDIILFFRQJHVWLRQVXFKWKDWWKHZKROHLVQRWWKHVXP RILWVSDUWVWKDWLVLWFDQQRWEHUHGXFHGWRWKHVXPRIRSSRVLQJYLHZVRU PDQHXYHUV RI GLIIHUHQW VLQJOH PRWRULVWV HWF VLQFH ³LQ KHDY\ EXW IUHH IORZLQJ WUDIILF MDPV FDQ DULVH VSRQWDQHRXVO\ WULJJHUHG E\ PLQRU HYHQWV > EXWWHUIO\HIIHFWV LQFKDRVWKHRU\@VXFKDVDQDEUXSWVWHHULQJPDQHXYHUE\ DVLQJOHPRWRULVW´VRWKDW³WUDIILFUHVHDUFKVWLOOFDQQRWIXOO\SUHGLFWXQGHU ZKLFK FRQGLWLRQV D WUDIILF MDP PD\ VXGGHQO\ RFFXU´  $QG WKH UHYHUVH GLUHFWLRQDOVRKROGVWUXH

&KDSWHU2SHUDWLRQVDQGWKHLU&RPSOLFDWLRQV 





,Q UHODWLRQ WR WKH SUHGLFWDELOLW\XQSUHGLFWDELOLW\ SULQFLSOH LI WKHUH LV SUHGLFWDELOLW\ HJ WKH SUHGLFWDEOH WHQGHQF\ RI WUDIILF MDPV WR RFFXU LQ KLJKZD\V WKHUHLVXQSUHGLFWDELOLW\ HJWKHPRUHGLIILFXOWWDVNWRSUHGLFW H[DFWO\³XQGHUZKLFKFRQGLWLRQVD WUDIILFMDP >DVRSSRVHGWRDKHDY\EXW VPRRWKO\ IORZLQJWUDIILF@ PD\ VXGGHQO\RFFXU´RQDSDUWLFXODURFFDVLRQ  $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,Q UHODWLRQ WR WKH H[SOLFDELOLW\LQH[SOLFDELOLW\ SULQFLSOH LI WKHUH LV H[SOLFDELOLW\ HJ WKH H[SODQDWLRQ E\ WKRVH ZKR GHIHQG XUEDQ VSUDZO RQ WKH EDVLV RI D ³SUHIHUUHG OLIHVW\OH FKRLFH´ OLNH ³WKH $PHULFDQ 'UHDP XQIROGLQJ EHIRUH \RXU H\HV ´  WKHUH LV LQH[SOLFDELOLW\ HJ WKH ODFN RI VXIILFLHQW H[SODQDWLRQ E\ WKRVH ZKR GHIHQG XUEDQ VSUDZO RI ZK\ LW LV QHFHVVVULO\ GHVLUDEOH VLQFH IRU WKH FULWLFV WKHUH DUH DOWHUQDWLYH OLIHVW\OHV OLNHD³FDUIUHH´KRXVHKROG $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,Q UHODWLRQ WR WKH ILFWLRQUHDOLW\ SULQFLSOH LI WKHUH LV ILFWLRQ HJ WKH ILFWLRQDO DVSHFW RI WKH DUJXPHQW E\ WKRVH LQ IDYRU RI WKH UHVROXWLRQ RI WUDIILFFRQJHVWLRQDVWKHFULWLFVSRLQWHGRXWWKDWWUDIILFMDPLVVWLOOQRWIXOO\ SUHGLFWDEOHWKDW³UXVKKRXUWUDIILFFRQJHVWLRQLVLQHYLWDEOH´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



7KH)XWXUHRI3RVW+XPDQ7UDQVSRUWDWLRQ 



,QUHODWLRQWRWKHRSHQQHVVKLGGHQQHVVSULQFLSOHLIWKHUH LVRSHQQHVV HJ WKH RSHQ H[SORUDWLRQ RI WKH UHODWLRQVKLS EHWZHHQ KHDY\ WUDIILF DQG WUDIILF FRQJHVWLRQ  WKHUH LV KLGGHQQHVV HJ WKH KLGGHQ QDWXUH RI WUDIILF MDPV EHFDXVH ³WUDIILF UHVHDUFK VWLOO FDQQRW IXOO\ SUHGLFW XQGHU ZKLFK FRQGLWLRQV D WUDIILF MDP  >DV RSSRVHG WR KHDY\ EXW VPRRWKO\ IORZLQJ WUDIILF@PD\VXGGHQO\RFFXU´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³ORZGHQVLW\ DQG DXWRGHSHQGHQW GHYHORSPHQWV´ QRZDGD\V  WKHUH LV FRQWUDFWLRQ HJ WKH UHODWLYHGHFOLQHRI³ELF\FOLQJRULHQWHG´DQG³SHGHVWULDQRULHQWHG´DUHDVLQ PRGHUQ FLWLHV ZKHQ FRQWUDVWHG ZLWK WKRVH LQ WKH ROGHU GD\V  $QG WKH UHYHUVHGLUHFWLRQDOVRKROGVWUXH ,Q UHODWLRQ WR WKH WKHRU\SUD[LV SULQFLSOH LI WKHUH LV WKHRU\ HJ WKH WKHRUHWLFDO FRQVWUXFWLRQ RI  ³EXWWHUIO\ HIIHFWV´ LQ FKDRV WKHRU\  WKHUH LV SUD[LV HJWKHSUDFWLFDODSSOLFDWLRQRI³EXWWHUIO\HIIHFWV´LQFKDRVWKHRU\ WR WKH ILHOG RI WUDQVSRUWDWLRQ WR XQGHUVWDQG WUDIILF FRQJHVWLRQ  $QG WKH UHYHUVHGLUHFWLRQDOVRKROGVWUXH ,QUHODWLRQWRWKHFRQYHQWLRQQRYHOW\SULQFLSOHLIWKHUHLVFRQYHQWLRQ HJWKHFRQYHQWLRQDOZLVGRPRIXUEDQVSUDZOE\LWVGHIHQGHUV WKHUHLV QRYHOW\ HJ WKH DOWHUQDWLYH QRYHO FKDOOHQJH WR WKH FRQYHQWLRQDO ZLVGRP DERXW XUEDQ VSUDZO E\ LWV GHIHQGHUV E\ WKH QHZ LGHD RI ³ELF\FOLQJ

&KDSWHU2SHUDWLRQVDQGWKHLU&RPSOLFDWLRQV 





RULHQWHG GHYHORSPHQW´ DQG ³SHGHVWULDQRULHQWHG GHYHORSPHQW´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³LQ KHDY\ EXW IUHH IORZLQJ WUDIILF MDPV FDQ DULVH VSRQWDQHRXVO\ WULJJHUHG E\ PLQRU HYHQWV > EXWWHUIO\ HIIHFWV @ VXFK DV DQ DEUXSWVWHHULQJPDQHXYHUE\DVLQJOHPRWRULVW´VRWKDWDQRUPDOPRWRULVW ZKRIROORZVWKHWUDIILFUXOHVDQGGRHVQRWPDNHDQ\DEUXSWPRYHVFDQQRW FDXVHRQDYHUDJHVXFKDWUDIILFMDPEXWDQRWKHUPRWRULVWZKRPDNHV³DQ DEUXSWVWHHULQJPDQHXYHU´FDQ $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,QUHODWLRQWRWKHVRIWQHVVKDUGQHVVSULQFLSOHLIWKHUHLVVRIWQHVV HJ WKH DSSUHFLDWLRQ RI XUEDQ VSUDZO DV VKRZQ E\ ³RQH VXEXUEDQ 'HWURLW SROLWLFLDQ´ ZKR ³GHIHQGV ORZGHQVLW\ GHYHORSPHQW DV WKH SUHIHUUHG OLIHVW\OH FKRLFH RI KLV FRQVWLWXHQWV FDOOLQJ LW WKH $PHULFDQ 'UHDP XQIROGLQJEHIRUH\RXUH\HV ´ WKHUHLVKDUGQHVV HJWKHFULWLTXHRIXUEDQ VSUDZODVVKRZQLQWKHSUREOHPVSRLQWHGRXWE\WKHFULWLFVDVFLWHGZKR UHMHFW LW RQ GLIIHUHQW JURXQGV OLNH WUDIILF FRQJHVWLRQ QHJDWLYH HQYLURQPHQWDODQGSXEOLFKHDOWKRXWFRPHVHWF $QGWKHUHYHUVHGLUHFWLRQ DOVRKROGVWUXH ,Q UHODWLRQ WR WKH VHULRXVQHVVSOD\IXOQHVV SULQFLSOH LI WKHUH LV VHULRXVQHVV HJ WKH VHULRXV EXVLQHVV RI WKRVH ZKR ZDQW WR SURYLGH FRXQWHUPHDVXUHV WR WUDIILF FRQJHVWLRQ  WKHUH LV SOD\IXOQHVV HJ WKH SOD\IXO SDUW RI WKRVH ZKR ZDQW WR SURYLGH  FRXQWHUPHDVXUHV WR WUDIILF FRQJHVWLRQ ZKHQ WKH\ SOD\ DURXQG ZLWK GLIIHUHQW RSWLRQV OLNH ³SDUNLQJ UHVWULFWLRQV´ ³SDUN DQG ULGH IDFLOLWLHV´ ³URDG SULFLQJ´ ³FDS DQG WUDGH´ ³FRQJHVWLRQSULFLQJ´ ³URDGVSDFHUDWLRQLQJ´ ³QXPEHUSODWHUHVWULFWLRQV´ ³SHUPLWV´³F\FOLQJSURPRWLRQ´³VSHHGOLPLWUHGXFWLRQV´HWFVRDVWRWHVW DQG VHH ZKLFK RQHV DUH PRUH HIIHFWLYH  $QG WKH UHYHUVH GLUHFWLRQ DOVR KROGVWUXH ,QUHODWLRQWRWKHDFWLYHQHVVLQDFWLYHVVSULQFLSOHLIWKHUHLVDFWLYHQHVV HJ WKH DOHUWQHVV RI D VLQJOH PRWRULVW ZKR DFWLYHO\ WULHV WR PDNH ³DQ DEUXSW VWHHULQJ PDQHXYHU´ WR JHW DKHDG LQ WUDIILF  WKHUH LV LQDFWLYHQHVV HJWKHUHODWLYHLQDFWLYHQHVVRIDQRWKHUPRWRULVWZKRVLPSO\IROORZVWKH



7KH)XWXUHRI3RVW+XPDQ7UDQVSRUWDWLRQ 



UXOHVXQFRQVFLRXVO\DQGGRHVQRWPDNH³DQDEUXSWVWHHULQJPDQHXYHU´WR JHWDKHDGLQWUDIILF  ,Q UHODWLRQ WR WKH UHJUHVVLRQSURJUHVVLRQ SULQFLSOH LI WKHUH LV UHJUHVVLRQ HJ WKH UHJUHVVLRQ PDGH E\ XUEDQ VSUDZO DV VKRZQ LQ LWV FRQWULEXWLRQWRWUDIILFFRQJHVWLRQDQGRWKHU SUREOHPVSRLQWHGRXWE\WKH FULWLFV WKHUHLVSURJUHVVLRQ HJWKHSURJUHVV PDGHE\ XUEDQVSUDZODV VKRZQ LQ LWV FRQWULEXWLRQ WR ³WKH SUHIHUUHG OLIHVW\OH FKRLFH´ OLNH ³WKH $PHULFDQ'UHDPXQIROGLQJEHIRUH\RXUH\HV´ $QGWKHUHYHUVHGLUHFWLRQ DOVRKROGVWUXH ,Q UHODWLRQ WR WKH VDPHGLIIHUHQFH SULQFLSOH LI WKHUH LV VLPLODULW\ LQ RXWFRPH HJ WKH FRQWULEXWLRQ WR WKH PROGLQJ DQG FRQWURO RI EHOLHIV YDOXHVDQGEHKDYLRUVUHJDUGOHVVRI ZKHWKHUWKLVEHGRQHE\ ZD\RIFDU RZQLQJ OLIHVW\OH RU E\ ZD\ RI FDUIUHH OLIHVW\OH  WKHUH LV GLIIHUHQFH LQ RXWFRPH HJ WKH FRQWULEXWLRQ WR WKH PROGLQJ DQG FRQWURO RI EHOLHIV YDOXHVDQGEHKDYLRUVE\ZD\RIFDURZQLQJOLIHVW\OHIRUDUHODWLYHO\PRUH VHGHQWDU\ OLIHZRUOG²EXW WKH FRQWULEXWLRQ WR WKH PROGLQJ DQG FRQWURO RI EHOLHIVYDOXHVDQGEHKDYLRUVE\ ZD\RIFDUIUHHOLIHVW\OH IRUDUHODWLYHO\ PRUHSK\VLFDOOLIHZRUOG $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH $QG LQ UHODWLRQ WR WKH VWDELOLW\UHDFWLRQ SULQFLSOH LI WKHUH LV VWDELOLW\ HJWKHUHODWLYHO\PRUHVWDEOHFRQGLWLRQRIFLWLHVLQWKHROGHUGD\VZKHQ WKH\HYROYHGRXWRIUXUDODUHDV WKHUHLVUHDFWLRQ HJFLWLHVLQWKHROGHU GD\V WKHQ OHG WR IXUWKHU FKDQJHV ODWHU RQ ZKHQ FLWLHV JUHZ RXWZDUGV WR VXEXUEVDQGWKHQWRWKHRXWVNLUWVLQWRZKDWLVQRZNQRZQDVXUEDQVSUDZO  $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH

2SHUDWLRQVDQG&XOWXUH 2SHUDWLRQVZKHQH[DPLQHGIURPWKHSHUVSHFWLYHRIFXOWXUHFDQFDVW DQLOOXPLQDWLQJOLJKWRQWKHLUSRVVLELOLW\ RULPSRVVLELOLW\ DQGGHVLUDELOLW\ RU XQGHVLUDELOLW\  DQG WKLV FDQ EH VKRZQ E\ ZD\ RI WZR FDVH VWXGLHV QDPHO\  RSHUDWLRQVUDLOWUDQVSRUWDQGSRSXODUFXOWXUHDQG   RSHUDWLRQV VKLS WUDQVSRUW DQG WKH DUW RI VDLOLQJ²WR EH DGGUHVVHG KHUHDIWHULQWKDWRUGHU

2SHUDWLRQV5DLO7UDQVSRUWDQG3RSXODU&XOWXUH $Q H[FHOOHQW FDVH VWXG\ KHUH WR XQGHUVWDQG RSHUDWLRQV IURP WKH SHUVSHFWLYHRIFXOWXUHKDVWRGRZLWKRSHUDWLRQVUDLOWUDQVSRUWDQGSRSXODU FXOWXUH 7KH WHUP ³UDLO WUDQVSRUW´ UHIHUV WR ³D PHDQV RI FRQYH\DQFH RI SDVVHQJHUVDQGJRRGVE\ZD\RIZKHHOHGYHKLFOHVUXQQLQJRQUDLOWUDFNV

&KDSWHU2SHUDWLRQVDQGWKHLU&RPSOLFDWLRQV 





,Q FRQWUDVW WR URDG WUDQVSRUW ZKHUH YHKLFOHV PHUHO\ UXQ RQ D SUHSDUHG VXUIDFHUDLOYHKLFOHVDUHDOVRGLUHFWLRQDOO\JXLGHGE\WKHWUDFNVRQZKLFK WKH\UXQ7UDFNXVXDOO\FRQVLVWVRIVWHHOUDLOVLQVWDOOHGRQVOHHSHUVWLHVDQG EDOODVW RQ ZKLFK WKH UROOLQJ VWRFN XVXDOO\ ILWWHG ZLWK PHWDO ZKHHOV PRYHV +RZHYHU RWKHU YDULDWLRQV DUH DOVR SRVVLEOH VXFK DV VODE WUDFN ZKHUHWKHUDLOVDUHIDVWHQHGWRDFRQFUHWHIRXQGDWLRQUHVWLQJRQDSUHSDUHG VXEVXUIDFH´ :.VV  +LVWRU\RI5DLO7UDQVSRUW 7KH KLVWRU\ RI UDLO WUDQVSRUW KDV JRQH WKURXJK GLIIHUHQW FKDQJHV &RQVLGHU IRU LOOXVWUDWLRQ D IHZ PDLQ RQHV LQ LWV KLVWRU\  EHORZ DV VXPPDUL]HGLQ7DEOH  D 3UH6WHDP5DLO7UDQVSRUW ,Q(XURSH³WKHHDUOLHVWNQRZQUHFRUGRIDUDLOZD\«LVDVWDLQHGJODVV ZLQGRZLQWKH0LQVWHURI)UHLEXUJLP%UHLVJDXLQ*HUPDQ\GDWLQJIURP DURXQG,Q&DUGLQDO0DWWKlXV/DQJZURWHDGHVFULSWLRQRIWKH 5HLVV]XJDIXQLFXODUUDLOZD\DWWKH+RKHQVDO]EXUJ&DVWOHLQ$XVWULD7KH OLQH RULJLQDOO\ XVHG ZRRGHQ UDLOV DQG D KHPS KDXODJH URSH DQG ZDV RSHUDWHGE\KXPDQRUDQLPDOSRZHU7KHOLQHVWLOOH[LVWVDOEHLWLQXSGDWHG IRUP DQG LV RQH RI WKH ROGHVW UDLOZD\V VWLOO WR RSHUDWH´ :. VV 6 +\OWRQ  /DWHU ³E\  QDUURZ JDXJH UDLOZD\V ZLWK ZRRGHQ UDLOV ZHUH FRPPRQ LQ PLQHV LQ (XURSH %\ WKH WK FHQWXU\ ZRRGHQ ZDJRQZD\V ZHUHFRPPRQLQWKH8QLWHG.LQJGRPIRUWUDQVSRUWLQJFRDOIURPPLQHVWR FDQDO ZKDUIV IRU WUDQVVKLSPHQW WR ERDWV 7KH ZRUOG V ROGHVW ZRUNLQJ UDLOZD\ EXLOW LQ  LV WKH 0LGGOHWRQ 5DLOZD\ LQ /HHGV ,Q  WKH ILUVWJUDYLW\UDLOURDGLQWKH8QLWHG6WDWHVZDVEXLOWLQ/HZLVWRQ1HZ0@\ PHWKRGRORJLFDO KROLVP KHUH LV QRW RSSRVHG WR PHWKRGRORJLFDO LQGLYLGXDOLVP EXW LQFOXGHV LW DQG IRU WKDW PDWWHU RWKHU  PHWKRGRORJLHV WRR «´ )3+&  )RU WKLV UHDVRQ DQG RWKHUV WRR DV VXPPDUL]HG KHUHDIWHU  P\ YHUVLRQ RI PHWKRGRORJLFDO KROLVP LV VRSKLVWLFDWHG²QRW YXOJDUDVVRPHWLPHVXVHGE\LQDSWVFKRODUVXVLQJWKHVDPHWHUP )&   ‡³>0@\PHWKRGRORJLFDOKROLVPGRHVQRWGHPRFUDWLFDOO\SUHVXPHWKDWDOO OHYHOVDUHHTXDOO\YDOLGDVDOOOHYHOVDUHQRWFUHDWHGHTXDO,QRWKHUZRUGV LQUHODWLRQ WRLVVXH;OHYHO $ PD\EH PRUHUHOHYDQWWKDQOHYHO%EXWLQ UHODWLRQWR0@\PHWKRGRORJLFDOKROLVPGRHVQRWPDNHDQ\DSULRULSRVWXODWLRQWKDW WKHUHPXVWEHDGHILQLWH DQGIRUWKDWPDWWHULQGHILQLWH QXPEHURIOHYHOV´ LQDQ\DQDO\VLV )3+& 1RUGRHVLWGRJPDWLFDOO\UHTXLUHWKDWWKHUHPXVW EHDFHUWDLQFRPELQDWLRQRIOHYHOVRIDQDO\VLVLQDJLYHQLQTXLU\ )&   ‡ ³>0@HWKRGRORJLFDO KROLVP LQ P\ XVDJH GRHV QRW DVVXPH WKDW DOO OHYHOV«FDQ QHFHVVDULO\EHLQWHJUDWHGVLQFH PHWKRGRORJLFDOKROLVPLVQRW DLPHGWRVHDUFKIRUWKHKRO\JUDLORI DQLQWHJUDOWKHRU\«  DVLVWKHFDVH IRU :LOEHU  ,Q RWKHU ZRUGV LW DOORZV WKDW VRPHWLPHV VRPH OHYHOV PD\ H[SHULHQFH LUUHGXFLEOH JDSV EHWZHHQ WKHP WR EH XQGHUVWRRG DW EHVW DV HPSLULFDOFRUUHODWLRQVQRWDVFDXVDOUHODWLRQV«´ )3+&   ‡ ³>'@LIIHUHQW OHYHOV PD\ RYHUODS DQG HYHQ LQWHUDFW ZLWK HDFK RWKHU LQ D JLYHQFRQWH[W EXWVRPHWLPHVPD\QRW DQGWKHIDFWWKDW,HYHQSURSRVHG GLIIHUHQW ZD\V RI UHFODVVLI\LQJ WKH OHYHOV ZKHQHYHU QHHGHG  LQ )'& UHLQIRUFHV WKLV SRLQW«7KH GXDO GDQJHU KHUH LV HLWKHU IRUFHIXOO\ PDNLQJ GLIIHUHQW OHYHOV LQWHUDFW ZKHQ WKH\ DUH MXVW GLIIHUHQW RU PHWDSKRULFDOO\ VSHDNLQJ DSSOHV DQG RUDQJHV  RU  LQDSSURSULDWHO\ LJQRULQJ WKHLU LQWHUDFWLRQVZKHQVRPHVLWXDWLRQVLQVWHDGUHTXLUHWKHP´ )3+&   ‡ ³>7@R XQGHUVWDQG GLIIHUHQW OHYHOV IURP WKHLU RZQ XQLTXH  SHUVSHFWLYHV DV UHTXLUHG E\ P\ PHWKRGRORJLFDO KROLVP  LV QRW WKH VDPH DV WU\LQJ  WR UHGXFH WKHP WR D SUHIHUUHG OHYHO LQ WKH SURFHVV RI OHDUQLQJ IURP RWKHU OHYHOV7KLVVHFRQGNLQGRIPXOWLGLVFLSOLQDU\ZRUNLVQRWJHQXLQHDQGGRHV QR MXVWLFH WR WKH XQLTXH FRPSOH[LWLHV DQG PHULWV LQKHUHQW DW HDFK OHYHO´ )3+&  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  FRQWLQXHGRQQH[WSDJH          



7KH)XWXUHRI3RVW+XPDQ7UDQVSRUWDWLRQ 



7DEOH6RSKLVWLFDWHG0HWKRGRORJLFDO+ROLVP 3DUW,,,  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  ‡ ³>0\@ PHWKRGRORJLFDO KROLVP ZDONV D ILQH OLQH EHWZHHQ WKH DUWLILFLDO FODVVLILFDWLRQ VHSDUDWLRQ RIOHYHOVDQGWKHVLPXOWDQHRXVLQFRUSRUDWLRQRI WKHP LI RQO\ IRU WKH VDNH RI KXPDQ VFKRODUO\ HQGHDYRU ,W VKRXOG EH UHPLQGHG WKDW QDWXUH GRHV QRW LPSRVH XSRQ  LWVHOI WKH DFDGHPLF FODVVLILFDWLRQ RI WKH OHYHOV RI DQDO\VLV DV KXPDQV KDYH 7KH HQWHUSULVH RI FODVVLILFDWLRQLVWKHUHIRUHDQWKURSRFHQWULF´ )3+&   ‡ ³>0@\ PHWKRGRORJLFDO KROLVP DGYRFDWHV QHLWKHU HSLVWHPLF VXEMHFWLYLVP QRU HSLVWHPLF QRQVXEMHFWLYLVP HJ UHDOLVP LGHDOLVP DQG KLVWRULFLVP  QHLWKHUHSLVWHPLFUHODWLYLVP HJVXEMHFWLYLVPKLVWRULFLVP QRUHSLVWHPLF DEVROXWLVP HJ UHDOLVP SRVLWLYLVP  QHLWKHU HSLVWHPLF UHGXFWLRQLVP QRU HSLVWHPLF HPHUJHQFLVP DQG QHLWKHU HSLVWHPLF REMHFWLYLVP HJ UHDOLVP LGHDOLVP  QRU HSLVWHPLF KLVWRULFLVP«1HLWKHU GRHV PHWKRGRORJLFDO KROLVPLQP\XVDJHDFFHSWWKHIDOVHPHWDFRQFHSWXDOGLFKRWRP\EHWZHHQ QRPLQDOLVP DQG UHDOLVP«7KHVH IDOVH GLFKRWRPLHV«DUH WR EH WUDQVFHQGHG,QRWKHUZRUGVPHWKRGRORJLFDOKROLVPGRHVQRWIXOO\DFFHSW HSLVWHPLFUHDOLVPSRVLWLYLVP DIRUPRIHSLVWHPLFLGHDOLVP KLVWRULFLVP VXEMHFWLYLVPDQGUHGXFWLRQLVPLQHSLVWHPRORJ\DQGSKLORVRSK\RIVFLHQFH EXW OHDUQV IURP WKH VWUHQJWKV DQG ZHDNQHVVHV RI DOO RI WKH RSSRVLQJ DSSURDFKHVZLWKRXWVLGLQJZLWKDQ\RIWKHP«´ )3+&   ‡ ³6RSKLVWLFDWHG PHWKRGRORJLFDO KROLVP LV VXEMHFW WR WKH FRQVWUDLQWV DV LPSRVHGE\WKHV\QWD[RIH[LVWHQWLDOGLDOHFWLFV HJWKHSDUWLDOLW\WRWDOLW\ SULQFLSOH DQG WKH SUHGLFWDELOLW\XQSUHGLFWDELOLW\ SULQFLSOH  (YHQ LQ SUHGLFWDELOLW\ RXWFRPHV DUH VXEMHFW WR XQFHUWDLQW\ WKH GHJUHH RI ZKLFK YDULHVIURPFDVHWRFDVH´ )&  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  FRQWLQXHGRQQH[WSDJH          

&KDSWHU&RQFOXVLRQ²7KH)XWXUHRI7UDQVSRUWDWLRQ 





7DEOH6RSKLVWLFDWHG0HWKRGRORJLFDO+ROLVP 3DUW,9  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  ‡³6RSKLVWLFDWHGPHWKRGRORJLFDOKROLVP²ZKHQDSSOLHGHVSHFLDOO\WKRXJK QRW H[FOXVLYHO\ DV LOOXVWUDWHG LQ P\ QXPHURXV ZRUNV²FDQ HQULFK WKH XQGHUVWDQGLQJRIUHDOLW\LQVRPHGLVWLQFWLYHZD\V+HUHDUHWKUHHH[DPSOHV DVUHYHDOHGLQHDFKRIP\ERRNV ´ )3+&7)3+/  ²³)LUVWO\ LW SURYLGHV D FRPSUHKHQVLYH DQDO\VLV RI D VXEMHFW PDWWHU IURP ZKLFK PXFK FDQ EH OHDUQHG DERXW UHDOLW\´ ³ERWK LQ UHODWLRQ WR WKHSHUVSHFWLYHVRIWKH PLQG QDWXUH VRFLHW\DQGFXOWXUHDQG DOVRLQ UHODWLRQWRDQHZFODVVLILFDWLRQRIWKHVXEMHFWPDWWHU´ ²³6HFRQGO\ LW VXJJHVWV VRPH YLVLRQV RI WKH IXWXUH LQ UHODWLRQ WR WKH VXEMHFWPDWWHULQTXHVWLRQ´ ²³$QG WKLUGO\ LW SURSRVHV VRPH LQVLJKWV RQ PHWDWKHRU\ HJ PHWKRGRORJ\DQGRQWRORJ\ LQJHQHUDO²ZLWKWKHFOHDUXQGHUVWDQGLQJ KRZHYHURIWKHGLOHPPDRIVSHFLILFYVJHQHUDORQWRORJ\ DVVKRZQLQ WKH WDEOH RQ WKH V\QWD[ RI H[LVWHQWLDO GLDOHFWLFV LQ WKH FRQWH[W RI WKH GLOHPPD RI RQWRORJ\  )RU WKLV YHU\ UHDVRQ DOO RI WKHVH ZD\V DUH LPSRUWDQWZLWKRXWUHGXFLQJRQHLQWRWKHDQDO\VLVRIDQRWKHU´  ‡ ³,QWKHHQG P\ PHWDWKHRU\ ERWKVRSKLVWLFDWHG PHWKRGRORJLFDOKROLVP DQG H[LVWHQWLDO GLDOHFWLFV  VHUYHV DV D IRXQGDWLRQ WR XQLI\ DOO GRPDLQV RI NQRZOHGJH LQWR DQ XQLILHG WKHRU\ RI HYHU\WKLQJ E\ ZD\ RI VRPH RQWRORJLFDO SULQFLSOHV DQG WKH FRPSUHKHQVLYH SHUVSHFWLYHV RI WKH PLQG QDWXUH VRFLHW\ DQG FXOWXUH  7KLV LV VR ZLWKRXW FRPPLWLQJ WKH VLQV RI UHGXFWLRQLVP DQG UHYHUVHUHGXFWLRQLVP DV RIWHQ VHHQ LQ PDQ\ KROLVWLF DSSURDFKHVZLWKWKHIDGRIV\VHPVDSSURDFK²EHLWDERXWV\VWHPVWKHRU\ FKDRV WKHRU\ FRPSOH[LW\ WKHRU\ RU HOVH²DV D PRVW UHFHQW QRWRULRXV H[DPSOH ZKLFK,GHEXQNHGLQ7KH)XWXUHRI&RPSOH[LW\DQGDOVRLQ7KH )XWXUH RI 3RVW+XPDQ )RUPDO 6FLHQFH  0\ GLVWLQFWLYH DSSURDFK PDNHV JRRGXVHRIGLIIHUHQWVFKRROVRIWKRXJKWZLWKRXWIDYRULQJDQ\RIWKHPQRU WU\LQJWRLQWHJUDWHWKHP DVWKH\DUHQRWQHFHVVDULO\FRPSDWLEOHZLWKHDFK RWKHU VRDVWRDGMXVWIRUVXEMHFWLYLW\GLYHUVLW\FRQIOLFWDQGFRPSOH[LW\ IRU H[DPSOH ,Q WKLV VHQVH WKH ZRUG ³XQLILHG´ GRHV QRW KDYH WR PHDQ LQWHJUDWLYHDSSURDFKLQDQDUURZVHQVHQRUV\VWHPVDSSURDFKLQDEURDG RQHERWKRIZKLFK,UHMHFWZKLOHOHDUQLQJIURPWKHP´ )3+)6)3+6  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 6RXUFHV $ VXPPDU\ RI 6HF LQ )3+&²DQG DOVR IURP %11 )3+67 $/')&)3+&7DQGWKHUHVWRIDOORWKHUERRNVRIPLQH6HHWKHERRNV IRUPRUHGHWDLO



7KH)XWXUHRI3RVW+XPDQ7UDQVSRUWDWLRQ 



7DEOH2Q5HGXFWLRQLVPDQG5HYHUVH5HGXFWLRQLVP 3DUW,  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  ‡7KH3DUWLDOLW\7RWDOLW\3ULQFLSOH ²7KHSDUWLDOLW\WRWDOLW\SULQFLSOHLQWKHRQWRORJ\RIH[LVWHQWLDOGLDOHFWLFV WDUJHWVDJDLQVWWKHYDULHWLHVRIUHGXFWLRQLVPDQGUHYHUVHUHGXFWLRQLVP DVDOUHDG\ZRUNHGRXWLQP\SUHYLRXVERRNV 

 ‡$JDLQVWWKH9DULHWLHVRI5HGXFWLRQLVP ²&RQFHSWXDO5HGXFWLRQLVP ‡ 6RPH LOOXVWUDWLYH LQVWDQFHV LQYROYH P\ULDG GXDOLWLHV OLNH PLQG YV ERG\ VHOI YV ZRUOG GHPRFUDF\ YV QRQGHPRFUDF\ DQG WKH OLNH DVDOUHDG\DGGUHVVHGLQ)+&)3+&DQG%'3'IRULQVWDQFH  ²7KHRUHWLFDO5HGXFWLRQLVP ‡ $ IDVFLQDWLQJ FDVH VWXG\ FRQFHUQV ZKDW , RULJLQDOO\ FDOOHG ³WKH IRXQGDWLRQ IDOODF\´ LQ )3+67 LQ DQ\ DWWHPSW WR QDLYHO\ XQGHUVWDQG VSDFHWLPH IURP WKH SK\VLFDO SHUVSHFWLYH DV WKH IRXQGDWLRQ DQG FRQVHTXHQWO\ WR GDQJHURXVO\ GLVPLVV RWKHU SHUVSHFWLYHV ‡ ,Q )$( , HODERUDWHG IXUWKHU WKHVH YHUVLRQV RI UHGXFWLRQLVP LQ WKH OLWHUDWXUH RQ DHVWKHWLFV HJ IRUP YV FRQWHQW UHSUHVHQWDWLRQ YV H[SUHVVLRQFULWLFVYVDUWLVWVDQGH[WHUQDOLVPYVLQWHUQDOLVP  ‡ ,Q ),$ , UHYHDOHG RWKHU IRUPV RI UHGXFWLRQLVP LQ WKH OLWHUDWXUH RQ LQIRUPDWLRQDUFKLWHFWXUH HJWKHFRQVWUXFWLYLVWDUJXPHQW  ‡,Q)3+8,VKRZHGWKHSHUVLVWHQWOHJDF\RIUHGXFWLRQLVPWKLVWLPH LQWKHOLWHUDWXUHRQDQRPDORXVH[SHULHQFH HJWKHREVHVVLRQZLWK SK\VLFV FKHPLVWU\ DQG ELRORJ\ IRU H[SODLQLQJ DQRPDORXV H[SHULHQFH  ‡,Q)3+(,H[DPLQHGDQRWKHUFDVHRIUHGXFWLRQLVPLQDFWLRQLQWKH FRQWH[W RI HQJLQHHULQJ HJ WHFKQLFDO FRQVWUDLQWV YV QRUPDWLYH FRQVWUDLQWV  ‡ ,Q )3+00 , HODERUDWHG RQH PRUH YHUVLRQ RI UHGXFWLRQLVP LQ UHODWLRQ WR WKH WKUHH GRPDLQV RI FRPPXQLFDWLRQ HJ WKH FRPSHWLQJYLHZVRQVHQGLQJFRQQHFWLQJDQGUHFHLYLQJ  ‡,Q)3+&7,H[SORUHGDQRWKHUYHUVLRQRIUHGXFWLRQLVPLQUHODWLRQWR LQYHQWLRQDQGLQQRYDWLRQ HJWKHELRSV\FKRORJLFDODUJXPHQWYV WKHVRFLRFXOWXUDODUJXPHQWV  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  FRQWLQXHGRQQH[WSDJH  

&KDSWHU&RQFOXVLRQ²7KH)XWXUHRI7UDQVSRUWDWLRQ 





7DEOH2Q5HGXFWLRQLVPDQG5HYHUVH5HGXFWLRQLVP 3DUW,,  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  ‡$JDLQVWWKH9DULHWLHVRI5HGXFWLRQLVP FRQW G  ²7KHRUHWLFDO5HGXFWLRQLVP FRQW¶G  ‡,Q)3+*,LGHQWLI\DQRWKHUYHUVLRQRIUHGXFWLRQLVPLQ UHODWLRQWR LQILQLW\ V\PPHWU\ DQG GLPHQVLRQDOLW\ HJ WKH (XFOLGHDQ DUJXPHQWYVWKHQRQ(XFOLGHDQDUJXPHQWV  ‡,Q)3+83,DQDO\]HGDQRWKHUYHUVLRQRIUHGXFWLRQLVPLQUHODWLRQWR GHQVLW\ DQG YRLG HJ WKH HQJLQHHULQJ DUJXPHQW DQG WKH HFRORJ\ DUJXPHQW  ‡,Q)3+/,H[DPLQHGDQRWKHUYHUVLRQRIUHGXFWLRQLVPLQUHODWLRQWR VWUXFWXUH DQG FRQWH[W HJ WKH VWUXFWXUDOLVW DUJXPHQW DQG WKH FRQWH[WXDOLVWDUJXPHQW  ‡,Q3)+2,H[SORUHGDQRWKHUYHUVLRQRIUHGXFWLRQLVPLQUHODWLRQWR FRPPXQFDWLRQGHFLVLRQPDNLQJDQGOHDGHUVKLS HJWKHUDWLRQDO V\VWHPDUJXPHQWYVWKHQDWXUDOV\VWHPDUJXPHQW  ‡,Q3)+0$,UHYHDOHGDQRWKHUYHUVLRQRIUHGXFWLRQLVPLQUHODWLRQWR WKH PDUWLDO ERG\ DQG VSLULW HJ WKH VSLULWXDO DUJXPHQW YV WKH PDWHULDOLVWDUJXPHQWYVWKHGHIHQVLYHDUJXPHQW  ‡,Q3)+6,DQDO\]HGDQRWKHUYHUVLRQRIUHGXFWLRQLVPLQUHODWLRQWR WKH VH[XDO ERG\ DQG VSLULW HJ WKH QDWXUDOLVW DUJXPHQW YV WKH FRQVWUXFWLYLVWDUJXPHQW  ‡,Q3)+/$:,H[DPLQHGDQRWKHUYHUVLRQRIUHGXFWLRQLVPLQUHODWLRQ WRODZ HJWKHQHFHVVLW\DUJXPHQWYVWKHFRQWHQJHQF\DUJXPHQW  ‡,Q)3+:3,VKRZHGDQRWKHUYHUVLRQRIUHGXFWLRQLVPLQUHODWLRQWR ZDU DQG SHDFH HJ WKH DJJUHVVLYLVW DUJXPHQW YV WKH SDFLILVW DUJXPHQW  ‡,Q%(3(,DQDO\]HGDQRWKHUYHUVLRQRIUHGXFWLRQLVPLQUHODWLRQWR PRUDOLW\DQGLPPRUDOLW\ HJWKHREMHFWLYLVWDUJXPHQWYVWKHQRQ REMHFWLYLVWDUJXPHQWYVWKHVNHSWLFDODUJXPHQW  ‡,Q%&26,H[DPLQHGDQRWKHUYHUVLRQRIUHGXFWLRQLVPLQUHODWLRQWR WKHFRQWHVWHGEHJLQQLQJVDQGVSHFXODWLYHHQGVRIWKHXQLYHUVH HJ WKH VFLHQWLILFDUJXPHQW YVWKHUHOLJLRXVDUJXPHQWYVWKH HVRWHULF DUJXPHQWYVWKHPHWDSK\VLFDODUJXPHQW  ‡ ,Q )3+3 , VKRZ DQRWKHU YHUVLRQ RI UHGXFWLRQLVP LQ UHODWLRQ WR QRUPDOLW\DQGDEQRUPDOLW\ HJWKHQDWXUDODUJXPHQWYVWKHVRFLDO DUJXPHQWYVWKHFXOWXUDODUJXPHQWYVWKHPHQWDODUJXPHQW  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  FRQWLQXHGRQQH[WSDJH 



7KH)XWXUHRI3RVW+XPDQ7UDQVSRUWDWLRQ 



7DEOH2Q5HGXFWLRQLVPDQG5HYHUVH5HGXFWLRQLVP 3DUW,,,  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  ‡$JDLQVWWKH9DULHWLHVRI5HGXFWLRQLVP FRQW G  ²7KHRUHWLFDO5HGXFWLRQLVP FRQW¶G  ‡ ,Q )3+*(2/ , VFUXWLQL]HG DQRWKHU YHUVLRQ RI UHGXFWLRQLVP LQ UHODWLRQWRVWDWLFVDQGG\QDPLFV HJWKHFDWDVWURSKHDUJXPHQWYV WKHXQLIRUPLW\DUJXPHQWYVWKHUHYLVLRQDUJXPHQW  ‡ ,Q )3+&+(66 , VKRZHG DQRWKHU YHUVLRQ RI UHGXFWLRQLVP LQ UHODWLRQ WR WDFWLFV DQG VWUDWHJ\ HJ WKH QDWXUDO DUJXPHQW YV WKH VRFLDO DUJXPHQW YV WKH FXOWXUDO DUJXPHQW YV WKH PHQWDO DUJXPHQW  ‡,Q)3+5,UHYHDOHGDQRWKHUYHUVLRQRIUHGXFWLRQLVPLQUHODWLRQWR VHFXODUQHVV DQG VDFUHGQHVV HJ WKH FULWLFDO DUJXPHQW YV WKH VNHSWLFDODUJXPHQWYVWKHWKHLVWDUJXPHQW  ‡,Q)3+('8,H[DPLQHGDQRWKHUYHUVLRQRIUHGXFWLRQLVPLQUHODWLRQ WR WHDFKLQJ DQG OHDUQLQJ HJ WKH WHDFKHUFHQWHUHG DUJXPHQW YV WKHVWXGHQWFHQWHUHGDUJXPHQWYVWKHEDODQFHGDUJXPHQW  ‡,Q)3++,H[SORUHGDQRWKHUYHUVLRQRIUHGXFWLRQLVPLQUHODWLRQWR MRNLQJ DQG ODXJKLQJ HJ WKH QDWXUDO DUJXPHQW YV WKH VRFLDO DUJXPHQWYVWKHFXOWXUDODUJXPHQWYVWKHPHQWDODUJXPHQW  ‡,Q)3+$,SURSRVHGDQRWKHUYHUVLRQRIUHGXFWLRQLVPLQUHODWLRQWR VRXQG DQG VLOHQFH HJ WKH QDWXUDO DUJXPHQW YV WKH VRFLDO DUJXPHQWYVWKHFXOWXUDODUJXPHQWYVWKHPHQWDODUJXPHQW  ‡,Q)3+*$0,SURSRVHGDQRWKHUYHUVLRQRIUHGXFWLRQLVPLQUHODWLRQ WR ULVN DQG FDXWLRQ HJ WKH QDWXUDO DUJXPHQW YV WKH VRFLDO DUJXPHQWYVWKHFXOWXUDODUJXPHQWYVWKHPHQWDODUJXPHQW  ‡ ,Q )3+&20 , ZRUNHG RXW DQRWKHU YHUVLRQ RI UHGXFWLRQLVP LQ UHODWLRQ WR KDUGZDUH DQG VRIWZDUH HJ WKH QDWXUDO DUJXPHQW YV WKH VRFLDO DUJXPHQW YV WKH FXOWXUDO DUJXPHQW YV WKH PHQWDO DUJXPHQW  ‡,Q)3+/,7,SURSRVHGDQRWKHUYHUVLRQRIUHGXFWLRQLVPLQUHODWLRQ WRILFWLRQDQGQRQILFWLRQ HJWKHQDWXUDODUJXPHQWYVWKHVRFLDO DUJXPHQWYVWKHFXOWXUDODUJXPHQWYVWKHPHQWDODUJXPHQW  ‡ ,Q )3+&+(0 , SURSRVHG DQRWKHU YHUVLRQ RI UHGXFWLRQLVP LQ UHODWLRQWRVXEVWDQFHVDQGWKHLUFKDQJHV HJWKHQDWXUDODUJXPHQW YV WKH VRFLDO DUJXPHQW YV WKH FXOWXUDO DUJXPHQW YV WKH PHQWDO DUJXPHQW  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  FRQWLQXHGRQQH[WSDJH 

&KDSWHU&RQFOXVLRQ²7KH)XWXUHRI7UDQVSRUWDWLRQ 





7DEOH2Q5HGXFWLRQLVPDQG5HYHUVH5HGXFWLRQLVP 3DUW,9  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  ‡$JDLQVWWKH9DULHWLHVRI5HGXFWLRQLVP FRQW G  ²7KHRUHWLFDO5HGXFWLRQLVP FRQW¶G  ‡,Q)3+'$,SURSRVHGDQRWKHUYHUVLRQRIUHGXFWLRQLVPLQUHODWLRQ WRTXDQWLWDWLYHDQGTXDOLWDWLYHUHVHDUFK HJWKHQDWXUDODUJXPHQW YV WKH VRFLDO DUJXPHQW YV WKH FXOWXUDO DUJXPHQW YV WKH PHQWDO DUJXPHQW  ‡ ,Q )3+*(2* , SURSRVHG DQRWKHU YHUVLRQ RI UHGXFWLRQLVP LQ UHODWLRQ WR HQYLURQPHQWV DQG WKHLU LQWHUDFWLRQV HJ WKH QDWXUDO DUJXPHQWYVWKHVRFLDODUJXPHQWYVWKHFXOWXUDODUJXPHQWYVWKH PHQWDODUJXPHQW  ‡,Q)3+3$,SURSRVHGDQRWKHUYHUVLRQRIUHGXFWLRQLVPLQUHODWLRQWR WKHERG\DQGLWVSUHVHQFH HJWKHQDWXUDODUJXPHQWYVWKHVRFLDO DUJXPHQWYVWKHFXOWXUDODUJXPHQWYVWKHPHQWDODUJXPHQW  ‡,Q)3+6(0,SURSRVHGDQRWKHUYHUVLRQRIUHGXFWLRQLVPLQUHODWLRQ WR LQWHUQDOLW\ DQG H[WHUQDOLW\ HJ WKH QDWXUDO DUJXPHQW YV WKH VRFLDO DUJXPHQW YV WKH FXOWXUDO DUJXPHQW YV WKH PHQWDO DUJXPHQW  ‡ ,Q )3+$5&+ , SURSRVHG DQRWKHU YHUVLRQ RI UHGXFWLRQLVP LQ UHODWLRQ WR IRUP DQG IXQFWLRQ HJ WKH QDWXUDO DUJXPHQW YV WKH VRFLDO DUJXPHQW YV WKH FXOWXUDO DUJXPHQW YV WKH PHQWDO DUJXPHQW  ‡ ,Q )3+&5,0 , SURSRVHG DQRWKHU YHUVLRQ RI UHGXFWLRQLVP LQ UHODWLRQ WR KHURHV DQG YLOODLQV HJ WKH QDWXUDO DUJXPHQW YV WKH VRFLDO DUJXPHQW YV WKH FXOWXUDO DUJXPHQW YV WKH PHQWDO DUJXPHQW  ‡,Q)3++,67,SURSRVHGDQRWKHUYHUVLRQRIUHGXFWLRQLVPLQUHODWLRQ WR XQLYHUVDOLW\ DQG UHODWLYLW\ HJ WKH QDWXUDO DUJXPHQW YV WKH VRFLDO DUJXPHQW YV WKH FXOWXUDO DUJXPHQW YV WKH PHQWDO DUJXPHQW  ‡,Q)3+0,*,SURSRVHGDQRWKHUYHUVLRQRIUHGXFWLRQLVPLQUHODWLRQ WR6DPHQHVV2WKHUQHVVDQGLGHQWLW\ HJWKHQDWXUDODUJXPHQWYV WKH VRFLDO DUJXPHQW YV WKH FXOWXUDO DUJXPHQW YV WKH PHQWDO DUJXPHQW  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  FRQWLQXHGRQQH[WSDJH  



7KH)XWXUHRI3RVW+XPDQ7UDQVSRUWDWLRQ 



7DEOH2Q5HGXFWLRQLVPDQG5HYHUVH5HGXFWLRQLVP 3DUW9  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  ‡$JDLQVWWKH9DULHWLHVRI5HGXFWLRQLVP FRQW G  ²7KHRUHWLFDO5HGXFWLRQLVP FRQW¶G  ‡ $QG LQ )3+75$1 , SURSRVH DQRWKHU YHUVLRQ RI UHGXFWLRQLVP LQ UHODWLRQWRQHWZRUNVDQGRSHUDWLRQV HJWKHQDWXUDODUJXPHQWYV WKH VRFLDO DUJXPHQW YV WKH FXOWXUDO DUJXPHQW YV WKH PHQWDO DUJXPHQW  ²0HWKRGRORJLFDO5HGXFWLRQLVP ‡ $ JRRG LQVWDQFH FRQFHUQV WKH GHEDWH EHWZHHQ GLIIHUHQW YHUVLRQV RI TXDOLWDWLYH DQG TXDQWLWDWLYH PHWKRGV DV DOUHDG\ DQDO\]HG LQ )& DQGDOVR)+& ,Q)3+0/,H[DPLQHGVLPLODUUHGXFWLRQLVPWKLV WLPH LQ WKH OLWHUDWXUH RQ PDWKHPDWLFDO ORJLF HJ WKH REVHVVLRQ ZLWKFRQVLVWHQF\VRXQGQHVVDQGFRPSOHWHQHVV $QGLQ)3+)6, DOVR H[SORUHG WKH SUREOHPV RI UHGXFWLRQLVP LQ WKH FRQWH[W RI IRUPDOVFLHQFH HJWKHDQDO\WLFDODUJXPHQW  ²2QWRORJLFDO5HGXFWLRQLVP ‡ $Q H[FHOOHQW H[DPSOH LV WKH GHEDWH EHWZHHQ HPHUJHQWLVP DQG UHGXFWLRQLVP LQ FRPSOH[LW\ WKHRU\ DQG DOVR LQ SV\FKRORJ\ DV HODERUDWHGLQ)3+&LQWKHFRQWH[WRI%HLQJDQG%HFRPLQJ   ‡$JDLQVWWKH9DULHWLHVRI5HYHUVH5HGXFWLRQLVP ²&RQFHSWXDO5HYHUVH5HGXFWLRQLVP ‡$Q\FRQFHSWRI³DUW´ HJILQHDUWFDYHDUWRXWVLGHUDUWMXQNDUW LV GHHPHG DFFHSWDEOH LQ SRVWPRGHUQLVP DV DOUHDG\ DGGUHVVHG LQ &KRI)+&  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  FRQWLQXHGRQQH[WSDJH           

&KDSWHU&RQFOXVLRQ²7KH)XWXUHRI7UDQVSRUWDWLRQ 





7DEOH2Q5HGXFWLRQLVPDQG5HYHUVH5HGXFWLRQLVP 3DUW9,  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  ‡$JDLQVWWKH9DULHWLHVRI5HYHUVH5HGXFWLRQLVP FRQW G  ²7KHRUHWLFDO5HYHUVH5HGXFWLRQLVP ‡7KHUHDUHQXPHURXVDUWDQGOLWHUDU\WKHRULHVFRH[LVW7DNHWKHFDVH RIOLWHUDU\VWXGLHVDVWKHUHDUHQRZ/LWHUDU\6WUXFWXUDOLVP0DU[LVW /LWHUDU\&ULWLFLVP1HZ&ULWLFLVP3KHQRPHQRORJ\+HUPHQHXWLFV /DQJXDJH*DPH /LWHUDU\ &ULWLFLVP )HPLQLVW /LWHUDU\ &ULWLFLVP 5HFHSWLRQ 7KHRU\ 5HDGHU 5HVSRQVH &ULWLFLVP 3RVWVWUXFWXUDOLVP 6HPLRWLFV 3\VFKRDQDO\WLF /LWHUDU\ &ULWLFLVP MXVW WR FLWH VRPH ZHOONQRZQ RQHV ZLWK QR RQH EHLQJ VDLG WR EH EHWWHU WKDQ DQ\ RWKHUV DVGHWDLOHGO\DQDO\]HGLQ &KRI)+&  6 5DPDQ  ,Q %11 , HYHQ LQWURGXFHG ³WKH FRPSURPLVH IDOODF\´ DV DQRWKHU JRRG LOOXVWUDWLRQ RI WKHRUHWLFDO UHYHUVHUHGXFWLRQLVP LQ PLVOHDGLQJO\ WUHDWLQJ ERWK JHQHWLF DQG HQYLURQPHQWDO DSSURDFKHV DVHTXDOO\YDOLG ²0HWKRGRORJLFDO5HYHUVH5HGXFWLRQLVP ‡ 7KHUH LV WKH ³DQ\WKLQJJRHV´ PHQWDOLW\ LQ SRVWPRGHUQLVP HJ GRLQJ DUW ZLWKRXW SUD[LV GRLQJ DUW ZLWK SUD[LV DQG GRLQJ DUW E\ VXEODWLRQ  DV DQDO\]HG LQ &K RI )+& $QG LQ )3+)6 , DOVR H[SRVHG WKH SUREOHPV RI UHYHUVHUHGXFWLRQLVP LQ WKH FRQWH[W RI IRUPDOVFLHQFHLQUHODWLRQWRV\VWHPVWKHRU\ ²2QWRORJLFDO5HYHUVH5HGXFWLRQLVP ‡7KHUHDUHOLNHZLVHQRSULYLOHJHGRQWRORJ\DQGWKHGRRULVRSHQIRU DQ\WKLQJLQSRVWPRGHUQLVP HJWKHHTXDOVWDWXVRIWKHRQWRORJ\ RI %HLQJ YV WKDW RI %HFRPLQJ DV DOUHDG\ DGGUHVVHG LQ &K RI )+&²DQG  DOVR LQ )3+&  ,Q )$( , DOVR LQWURGXFHG DQRWKHU YHUVLRQ RI UHYHUVHUHGXFWLRQLVP WKDW LV ³WKH SOXUDOLVW IDOODF\´ LQ WKH FRQWH[W RI XQGHUVWDQGLQJ DHVWKHWLF H[SHULHQFH IRU LQVWDQFH² DOWKRXJK WKLV IDOODF\ KDV EHHQ FRPPLWWHG QRW H[FOXVLYHO\ LQ UHODWLRQ WR WKH RQWRORJLFDO OHYHO EXW DOVR DW WKH FRQFHSWXDO WKHRUHWLFDODQGPHWKRGRORJLFDORQHV  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 6RXUFHV)URPP\SUHYLRXVERRNV     



7KH)XWXUHRI3RVW+XPDQ7UDQVSRUWDWLRQ 



7DEOH7KH&RQFHSWRQRI([LVWHQWLDO'LDOHFWLFV 3DUW,  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  ‡6HWVDQG(OHPHQWV ²6HWV ‡([WKH6DPH ‡([WKH2WKHUV ²(OHPHQWV ‡([ZKLWHVLQWKFHQWXU\$PHULFD LQWKHVHWRI³WKH6DPH´  ‡([,UDTGXULQJWKH86LQYDVLRQLQ LQWKHVHWRI³WKH 2WKHUV´   ‡5HODWLRQV2SHUDWLRQV)XQFWLRQV ²5HODWLRQV HJ³EHORQJV´³HTXDOVWR´³LVJUHDWHUWKDQ´  ‡([V\PPHWULFLQWHUDFWLRQVZLWKLQWKH6DPH RUWKH2WKHUV  ‡([DV\PPHWULFLQWHUDFWLRQVEHWZHHQWKH6DPHDQGWKH2WKHUV ²2SHUDWLRQV HJ³DQG´³RU´³QRW´³LI«WKHQ´  ‡([LIWKH6DPHRSSUHVVHVWKH2WKHUVLWZLOODOVRRSSUHVVLWVHOI ‡([WKH6DPHLVQRWWKH2WKHUV ²)XQFWLRQV HJJRDOV  ‡([WKH6DPHLVKHJHPRQLFLQUHODWLRQWRWKH2WKHUV  ‡7UXWK9DOXHV ²³´LI7UXH LQ6\PEROLF/RJLF  ‡([WKHSURSRVLWLRQWKDWLPSHULDO-DSDQZDVKHJHPRQLFWR&KLQD GXULQJ::,, ²³´LI)DOVH LQ6\PEROLF/RJLF  ‡([WKHSURSRVLWLRQWKDW*UHQDGDLQYDGHG)UDQFHLQ ²³´ ³´LI%RWK7UXHDQG)DOVH LQ'LDOHFWLF/RJLF  ‡([WKHSURSRVLWLRQWKDWWKHUDEELWGXFNSLFWXUHUHIHUVWRDGXFN ²³a´ ³a´LI1HLWKHU7UXH1RU)DOVH RU1$LQ'LDOHFWLF/RJLF  ‡([WKHSURSRVLWLRQWKDW*RGUHDOO\H[LVWV BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  FRQWLQXHGRQQH[WSDJH       

&KDSWHU&RQFOXVLRQ²7KH)XWXUHRI7UDQVSRUWDWLRQ 





7DEOH7KH&RQFHSWLRQRI([LVWHQWLDO'LDOHFWLFV 3DUW,,  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  ‡$[LRPVDQG3RVWXODWHV ²$[LRPV ‡([WKHUHIOH[LYHD[LRP²³DQ\TXDQWLW\LVHTXDOWRLWVHOI´ ²3RVWXODWHV ‡ ([ WKH 666 SRVWXODWH²³LI WKH WKUHH VLGHV RI D WULDQJOH DUH FRQJUXHQWWRWKHLUFRUUHVSRQGLQJSDUWVWKHQWKHWULDQJOHVDUH FRQJUXHQW´  ‡7KHRUHPVDQG3ULQFLSOHV ²7KHRUHPV DQG3ULQFLSOHV LQ([LVWHQWLDO'LDOHFWLFV ‡,Q5HODWLRQWR0HWKRG ±7KHIRUPDOQHVVLQIRUPDOQHVVSULQFLSOH ±7KHDEVROXWHQHVVUHODWLYHQHVVSULQFLSOH ±7KHSDUWLDOLW\WRWDOLW\SULQFLSOH ±7KHSUHGLFWDELOLW\XQSUHGLFWDELOLW\SULQFLSOH ±7KHH[SOLFDELOLW\LQH[SOLFDELOLW\SULQFLSOH ±7KHILFWLRQUHDOLW\SULQFLSOH ‡,Q5HODWLRQWR6WUXFWXUH ±7KHILQLWHQHVVWUDQVILQLWHQHVVSULQFLSOH ±7KHSUHFLVHQHVVYDJXHQHVVSULQFLSOH ±7KHVLPSOHQHVVFRPSOLFDWHGQHVVSULQFLSOH ±7KHRSHQQHVVKLGGHQQHVVSULQFLSOH ±7KHGHQVHQHVVHPSWLQHVVSULQFLSOH ‡,Q5HODWLRQWR3URFHVV ±7KHFKDQJHFRQVWDQF\SULQFLSOH ±7KHRUGHUFKDRVSULQFLSOH ±7KHVORZQHVVTXLFNQHVVSULQFLSOH ±7KHH[SDQVLRQFRQWUDFWLRQSULQFLSOH BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  FRQWLQXHGRQQH[WSDJH        



7KH)XWXUHRI3RVW+XPDQ7UDQVSRUWDWLRQ 



7DEOH7KH&RQFHSWLRQRI([LVWHQWLDO'LDOHFWLFV 3DUW,,,  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  ‡7KHRUHPVDQG3ULQFLSOHV FRQW¶G  ²7KHRUHPV DQG3ULQFLSOHV LQ([LVWHQWLDO'LDOHFWLFV ‡,Q5HODWLRQWR$JHQF\ ±7KHWKHRU\SUD[LVSULQFLSOH ±7KHFRQYHQWLRQQRYHOW\SULQFLSOH ±7KHHYROXWLRQWUDQVIRUPDWLRQSULQFLSOH ±7KHV\PPHWU\DV\PPHWU\SULQFLSOH ±7KHVRIWQHVVKDUGQHVVSULQFLSOH ±7KHVHULRXVQHVVSOD\IXOQHVVSULQFLSOH ±7KHDFWLYHQHVVLQDFWLYHQHVVSULQFLSOH ‡,Q5HODWLRQWR2XWFRPH ±7KHUHJUHVVLRQSURJUHVVLRQSULQFLSOH ±7KHVDPHGLIIHUHQFHSULQFLSOH ±7KHVWDELOLW\UHDFWLRQSULQFLSOH BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 1RWHV 7KH FDWHJRULHV DQG H[DPSOHV LQ HDFK DUH VROHO\ LOOXVWUDWLYH QRW H[KDXVWLYH  7KH FRPSDULVRQ LV DOVR UHODWLYH QRW DEVROXWH  QRU DUH WKH\ PXWXDOO\H[FOXVLYH$VJHQHUDOLWLHVWKH\DOORZH[FHSWLRQV 6RXUFHV6WDUWLQJIURP&KRI%&3&DQGDOVRIURPRWKHUERRNVRIPLQH                  

&KDSWHU&RQFOXVLRQ²7KH)XWXUHRI7UDQVSRUWDWLRQ 





7DEOH7KH6\QWD[RI([LVWHQWLDO'LDOHFWLFV, 7KH3ULQFLSOHV 3DUW,  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  ‡,Q5HODWLRQWR0HWKRG ²7KH)RUPDOQHVV,QIRUPDOQHVV3ULQFLSOH  2QWKH)RUPDO5HTXLUHPHQWVRI/RJLFDO6\VWHPV  ‡7KHIRUPDOUHTXLUHPHQWVRIDORJLFDOV\VWHP HJFRQVLVWHQF\ VRXQGQHVV DQG FRPSOHWHQHVV  KDYH ERWK XVHIXOQHVV DQG QRQ XVHIXOQHVV WR WKH H[WHQW WKDW LI WKHUH DUH IRUPDO V\VWHPV UHTXLULQJ WKHP WKHUH DUH DOWHUQDWLYH RQHV ZKLFK GR QRW 7KXV LW GRHV QRW H[FOXGHFODVVLFDOORJLFVEXWVLPSO\JRHVEH\RQGERWKFODVVLFDODQG QRQFODVVLFDO ORJLFV ZKLOH OHDUQLQJ VRPHWKLQJ IURP HDFK 7KHUH LV QRIRUPDOQHVVZLWKRXWLQIRUPDOQHVV²DQGYLFHYHUVD ‡ )RU  LQVWDQFH H[LVWHQWLDO GLDOHFWLFV FDQ PDNH XVH RI ERWK FODVVLFDO ORJLFV XQGHU FHUWDLQ FRQGLWLRQV HJ HVSHFLDOO\ WKRXJK QRW H[FOXVLYHO\ ZKHQ WKH\ DUH FOHDUFXW HWF  DQG QRQFODVVLFDO ORJLFV XQGHU DOWHUQDWLYH FRQGLWLRQV HVSHFLDOO\ WKRXJK QRW H[FOXVLYHO\ ZKHQ WKH\ DUH ³XQNQRZQ´ ³LUUHOHYDQW´ ³DPELJXRXV´ ³SRVVLEOH´ ZLWK ³GLIIHUHQW GHJUHHV RI WUXWK´ HPSLULFDOO\ LQFRQVLVWHQW LQ D GHVLUDEOHZD\HWF  :.X  ‡ )DPLO\ UHVHPEODQFH HJ ORJLFDOQHVVQRQORJLFDOQHVV UDWLRQDOLW\ QRQUDWLRQDOLW\HWF ‡6RXUFHV)URP)3+0/)3++)3+*$0)3+6(0DQGP\ODWHU ERRNV BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  FRQWLQXHGRQQH[WSDJH              



7KH)XWXUHRI3RVW+XPDQ7UDQVSRUWDWLRQ 



7DEOH7KH6\QWD[RI([LVWHQWLDO'LDOHFWLFV, 7KH3ULQFLSOHV 3DUW,,  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  ‡,Q5HODWLRQWR0HWKRG FRQW¶G  ²7KH$EVROXWHQHVV5HODWLYHQHVV3ULQFLSOH  2QWKH0XOWLSOLFLW\RI7KLQJV  ‡ 7KHUH LV WKH PXOWLSOLFLW\ RI WKLQJV LQ UHDOLW\ EH WKH\ DERXW HQWLWLHV TXDOLWLHV RU SURSHUWLHV  DQG UHODWLRQVKLSV VXFK WKDW ZKDW LV DFFHSWDEOH IURP RQH VWDQGSRLQW PD\ QRW EH VR IURP DQRWKHU )RU LQVWDQFHLIWKHUHLVVRPHWKLQJDEVROXWHWKHUHLVOLNHZLVHVRPHWKLQJ UHODWLYH 7KHUH LV QR DEVROXWHQHVV ZLWKRXW UHODWLYHQHVV²DQG YLFH YHUVD ‡%RWKDEVROXWHQHVVDQGUHODWLYHQHVVKHUHDUHDOVRUHOHYDQWWRGLIIHUHQW PRGDOLWLHV RIWHQ FLWHG LQ WKH OLWHUDWXUH RQ RQWRORJ\ VXFK DV SRVVLELOLW\ HJ VRPHWKLQJ ³FDQ´ KDSSHQ  DQG LWV RSSRVLWH HJ LPSRVVLELOLW\  SUREDELOLW\ HJ VRPHWKLQJ ³ZLOO´ KDSSHQ  DQG LWV RSSRVLWH HJ LPSUREDELOLW\  DQG QHFHVVLW\ HJ VRPHWKLQJ ³VKRXOG´KDSSHQ DQGLWVRSSRVLWH HJFRQWLQJHQF\  ‡ )DPLO\ UHVHPEODQFH HJ XQLIRUPLW\GLYHUVLW\ LQWHUQDOQHVV H[WHUQDOQHVVLPPDQHQFHWUDQVFHQGHQFHLQGHSHQGHQFHGHSHQGHQFH LVRODWHGQHVVLQWHUFRQQHFWLYHQHVV DXWRQRP\LQWHUGHSHQGHQF\ XQLYHUVDOQHVVUHODWLYHQHVVHWF ‡6RXUFHV)URP)3+.6HHDOVRP\ODWHUERRNV BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  FRQWLQXHGRQQH[WSDJH   

           

&KDSWHU&RQFOXVLRQ²7KH)XWXUHRI7UDQVSRUWDWLRQ 





7DEOH7KH6\QWD[RI([LVWHQWLDO'LDOHFWLFV, 7KH3ULQFLSOHV 3DUW,,,  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  ‡,Q5HODWLRQWR0HWKRG FRQW¶G  ²7KH3DUWLDOLW\7RWDOLW\3ULQFLSOH  2QWKH5HODWLRQVKLSVEHWZHHQ:KROHDQG3DUWV  ‡7KHZKROHLVQRWWKHVXPRIWKHSDUWV7KHUHLVQRSDUWLDOLW\ZLWKRXW WRWDOLW\²DQGYLFHYHUVD ‡$Q\LQTXLU\DERXWDSKHQRPHQRQLQWKHZRUNLVWRJXDUGDJDLQVWWKH YDULHWLHVRI D UHGXFWLRQLVPDQG E UHYHUVHUHGXFWLRQLVP ‡5HGXFWLRQLVPDQGUHYHUVHUHGXFWLRQLVPFDQEH L FRQFHSWXDO LL  WKHRUHWLFDO LLL PHWKRGRORJLFDODQG LY RQWRORJLFDO ‡ :RUNV RQ HPHUJHQFH DV LQ )&  JHVWDOW SV\FKRORJ\ DV LQ )3+*(2/  WKH KHUPHQHXWLF FLUFOH DV LQ )3+'$  DQG PHQWDO ODQJXDJH DV LQ )3+6(0  WR QDPH MXVW D IHZ RI WKHP KDYH FRQWULEXWHGWRWKHXQGHUVWDQGLQJRIZKROHDQGSDUWV ‡ )DPLO\ UHVHPEODQFH HJ LQGLYLGXDOLVWLFQHVVKROLVWLFQHVV SDUWQHVV ZKROHQHVVDQDO\VLVV\QWKHVLVHWF ‡6RXUFHV(VSHFLDOO\IURP)& )3+*(2/6HHDOVRP\ODWHUERRNV BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  FRQWLQXHGRQQH[WSDJH                   



7KH)XWXUHRI3RVW+XPDQ7UDQVSRUWDWLRQ 



7DEOH7KH6\QWD[RI([LVWHQWLDO'LDOHFWLFV, 7KH3ULQFLSOHV 3DUW,9  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  ‡,Q5HODWLRQWR0HWKRG FRQW¶G  ²7KH3UHGLFWDELOLW\8QSUHGLFWDELOLW\3ULQFLSOH  2QWKH2FFXUUHQFHRI(YHQWV  ‡%RWKSUHGLFWDELOLW\DQGXQSUHGLFWDELOLW\KDYHDPDMRUUROHWRSOD\LQ WKH RFFXUUHQFH RI WKLQJV VR WKDW QHLWKHU GHWHUPLQLVP QRU LQGHWHUPLQLVP ZLQV WKH FHQWXULHVROG ILJKW 7KHUH LV QR SUHGLFWDELOLW\ZLWKRXWXQSUHGLFWDELOLW\²DQGYLFHYHUVD ‡7KHUHDUHHYHQWVZKLFKDUHSUHGLFWDEOHMXVWDVWKHUHDUHWKRVHZKLFK DUH QRW 2U ZKDW LV UHJDUGHG DV XQSUHGLFWDEOH DW RQH SRLQW LQ WLPH PD\ WXUQ RXW WR EH SUHGLFWDEOH ODWHU DQG FRQYHUVHO\ ZKDW LV GHHPHGDVSUHGLFWDEOHPD\WXUQRXWWRQRWEHVRSUHGLFWDEOH(YHQLQ SUHGLFWDELOLW\ RXWFRPHV DUH VXEMHFW WR XQFHUWDLQW\ WKH GHJUHH RI ZKLFKYDULHVIURPFDVHWRFDVH ‡ :RUNV RQ FRPSOH[LW\ WKHRU\ DV LQ )&  TXDQWXP PHFKDQLFV DV LQ )3+67DQG)3+* IUHTXHQF\SUREDELOLW\VXEMHFWLYH RU%D\HVLDQ  SUREDELOLW\ DQG ³VSHFLDO FDXVHV´ DV LQ )3+*$0  MXVW WR QDPH D IHZRIWKHPKDYHFRQWULEXWHGWRWKHXQGHUVWDQGLQJRIXQFHUWDLQLW\ ‡ )DPLO\ UHVHPEODQFH HJ VXUHQHVVDUELWUDULQHVV FHUWDLQW\ XQFHUWDLQW\ GHWHUPLQLVWLFQHVVLQGHWHUPLQLVWLFQHVV VXUHQHVV GRXEWIXOQHVV OLNHOLQHVVULVNLQHVV GHWHUPLQLVWLFQHVVUDQGRPQHVV HWF ‡6RXUFHV(VSHFLDOO\IURP)& )3+*$06HHDOVRP\ODWHUERRNV BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  FRQWLQXHGRQQH[WSDJH             

&KDSWHU&RQFOXVLRQ²7KH)XWXUHRI7UDQVSRUWDWLRQ 





7DEOH7KH6\QWD[RI([LVWHQWLDO'LDOHFWLFV, 7KH3ULQFLSOHV 3DUW9  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  ‡,Q5HODWLRQWR0HWKRG FRQW¶G  ²7KH([SOLFDELOLW\,QH[SOLFDELOLW\3ULQFLSOH  2QWKH8QGHUO\LQJ0HFKDQLVPVRI7KLQJV  ‡%RWKH[SOLFDELOLW\DQGLQH[SOLFDELOLW\DUHSDUWRIWKHXQGHUVWDQGLQJRI WKLQJV 7KHUH LV QR H[SOLFDELOLW\ ZLWKRXW LQH[SOLFDELOLW\²DQG YLFH YHUVD ‡7KLVSULQFLSOHWHOOVXVWKHGXDOLW\RIWKHUHVHDUFKGLOHPPDLQWKDWLI UHDOLW\ FDQ EH H[SODLQHG LQ VRPH ZD\V LW DOVR KDV LWV RWKHU ZD\V ZKLFKDUHQRWTXLWHH[SODLQDEOHDWDJLYHQSRLQWLQWLPH ‡ )DPLO\ UHVHPEODQFH HJ XQGHUO\LQJQHVVUHJXODUQHVV FDXVDWLRQ UHJXODUQHVV H[SODQDWLRQLQWHUSUHWDWLRQ H[SODQDWLRQGHVFULSWLRQ FDXVDWLRQFRUUHODWLRQH[SODQDWLRQQDUUDWLRQHWF ‡6RXUFHV(VSHFLDOO\IURP)3+8²DQGDOVR)3+&6HHDOVRP\ODWHU ERRNV  ²7KH)LFWLRQ5HDOLW\3ULQFLSOH  2QWKHGLIIHUHQWIDFHVRI5HDOLW\  ‡,IWKHUHLVUHDOLW\WKHUHLVDOVRILFWLRQHVSHFLDOO\IRUDQ\DJHQWZLWK VRPH NLQG RI LQWHOOLJHQFH OLIH EH LW DERXW KXPDQV DQLPDOV RU ODWHU SRVWKXPDQV 7KHUH LV QR UHDOLW\ ZLWKRXW ILFWLRQ²DQG YLFH YHUVD ‡ 7KH GLVWLQFWLRQ EHWZHHQ UHDOLW\ DQG ILFWLRQ LV QRW DEVROXWH VLQFH WKHUH FDQ EH D PL[WXUH RI ERWK )LFWLRQ FDQ KDYH QRQILFWLRQDO HOHPHQWV MXVW DV QRQILFWLRQ FDQ KDYH ILFWLRQDO RQHV  6R WKH GLVWLQFWLRQLVLQGHJUHHQRWLQNLQG ‡ )DPLO\ UHVHPEODQFH HJ ILFWLRQQRQILFWLRQ ILFWLRQIDFW LPDJLQDWLRQIDFW VXEMHFWLYLW\REMHFWLYLW\ LPDJLQDWLRQQRQILFWLRQ HWF ‡6RXUFHV)LUVWIURP)3+/,7 BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  FRQWLQXHGRQQH[WSDJH       



7KH)XWXUHRI3RVW+XPDQ7UDQVSRUWDWLRQ 



7DEOH7KH6\QWD[RI([LVWHQWLDO'LDOHFWLFV, 7KH3ULQFLSOHV 3DUW9,  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  ‡,Q5HODWLRQWR6WUXFWXUH ²7KH)LQLWHQHVV7UDQVILQLWHQHVV3ULQFLSOH  2QWKH1DWXUHRI1XPEHUV  ‡,IWKHUHDUHILQLWHWKLQJVWKHUHDUHOLNHZLVHWUDQVILQLWHRQHV7KHUHLV QRILQLWHQHVVZLWKRXWWUDQVILQLWHQHVV²DQGYLFHYHUVD ‡7RDYRLGFRQIXVLRQ P\ XVDJHRIWKH ZRUG ³WUDQVILQLWH´KHUHGLIIHUV UDGLFDOO\ IURP WKH RQH XVHG E\ &DQWRU DQG RWKHU PDWKHPDWLFLDQV  IRU³UHODWLYH´LQILQLW\²DQGLVPRUHOLPLWHGLQOLJKWRIWKHSUREOHPV FRQIURQWLQJDQ\DWWHPSWWRXQGHUVWDQGWKHLGHDRILQILQLW\ EHLWE\ LQWXLWLRQ LPDJLQDWLRQ DQG FRQFHSWLRQ DV GHWDLOHGO\ DQDO\]HG LQ 6HFRI)3+*  ‡,QVWHDGE\³WUDQVILQLW\´,DOORZQXPEHUVZKLFKFDQEHPDQ\WLPHV ODUJHU²RU VPDOOHU IRU WKDW PDWWHU²WKDQ WKH ILQLWH WKLQJV WKDW ZH HQFRXQWHULQGDLO\OLIHEXWWKH\GRQRWKDYHWREHUHODWHGWRWKHLGHD RILQILQLW\DWDOO ZKLFKPD\QRWH[LVW  ‡ 2I FRXUVH WKHUH PD\ EH VRPH ERUGHUOLQH FDVHV LQ ZKLFK LW LV QRW FOHDUZKHWKHUWKHQXPEHULQTXHVWLRQLVWUDQVILQLWH LQP\XVDJH RU VLPSO\ D PDWKHPDWLFDO FRQYHQLHQFH $ JRRG H[DPSOH RI D ERUGHUOLQHFDVHLVWKH3ODQFN XQLWRIOHQJWK IRU ³WKHVPDOOHVWVSDFH SRVVLEO\ PHDVXUHG LQ QDWXUH´ ZKLFK LV ³OHVV WKDQ ELOOLRQWKV RI WULOOLRQWKV RI WULOOLRQWKV RI DQ LQFK´ RU VRPHWKLQJ OLNH  î í PHWHUV  ‡ 7KDW  VDLG²P\  XVDJH RI ³WUDQVILQLW\´ FDQ DOVR UHVROYH RU EHWWHU GLVVROYH  DQ DJHROG SUREOHP LQ SKLORVRSK\ NQRZQ DV ³=HQR V SDUDGR[HV´ DVDOUHDG\H[SODLQHGLQ6HFRI)3+*  ‡ )DPLO\  UHVHPEODQFH HJ ERXQGHGQHVVTXDVLXQERXQGHGQHVV VPDOOQHVVODUJHQHVVERXQGHGQHVVXQERXQGHGQHVVHWF ‡6RXUFH)URP)3+*6HHDOVRP\ODWHUERRNV BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  FRQWLQXHGRQQH[WSDJH       

&KDSWHU&RQFOXVLRQ²7KH)XWXUHRI7UDQVSRUWDWLRQ 





7DEOH7KH6\QWD[RI([LVWHQWLDO'LDOHFWLFV, 7KH3ULQFLSOHV 3DUW9,,  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  ‡,Q5HODWLRQWR6WUXFWXUH FRQW¶G  ²7KH3UHFLVHQHVV9DJXHQHVV3ULQFLSOH  2QWKH5HILQHPHQWRI7KLQJV  ‡%RWKSUHFLVHQHVVDQGYDJXHQHVVDUHLPSRUWDQWQRWWKDWRQHLVEHWWHU WKDQ WKH RWKHU EXW WKDW ERWK DUH XVHG LQ GLIIHUHQW GHJUHHV RI SUHIHUHQFH LQ DFFRUGDQFH WR WKH FRQWH[WXDO DSSOLFDWLRQ IURP WKH SHUVSHFWLYHV RI QDWXUH WKH PLQG FXOWXUH DQG VRFLHW\ (YHQ ZKHQ ERWKDUHXVHGLQDFRPELQDWLRQWKHGLOHPPDLVVKLIWHGLQVWHDGWRRQH RI FRPELQDWLRQDO FRQFHUQ 7KHUH LV QR SUHFLVHQHVV ZLWKRXW YDJXHQHVV²DQGYLFHYHUVD ‡,QUHODWLRQWRWD[RQRP\SUHFLVHQHVVKDVLWVWD[RQRPLFFODULW\MXVWDV YDJXHQHVV KDV LWV FODVVLILFDWRU\ IOH[LELOLW\ IRU LQVWDQFH $QG LQ UHODWLRQ WR QHWZRUN YDJXHQHVV KDV LWV H[SORUDWLYH OLEHUW\ MXVW DV SUHFLVHQHVVKDVLWVFRQFHSWXDOGHILQLWLYHQHVVIRULQVWDQFH ‡ )DPLO\ UHVHPEODQFH HJ FODULW\DPELJXLW\ GLUHFWQHVVLQGLUHFWQHVV TXDQWLWDWLYHQHVVTXDOLWDWLYHQHVV GHVFULEDELOLW\QRQGHVFULEDELOLW\ VSHFLILFLW\REVFXULW\ VSHFLILFLW\JHQHUDOLW\ WKLFNQHVVWKLQQHVV WUDQVODWDELOLW\XQWUDQVODWDELOLW\ FOHDUFXWQHVVWUDQVLWLRQDOQHVV FRQFUHWHQHVVDEVWUDFWQHVVHWF ‡6RXUFHV(VSHFLDOO\IURP),$6HHDOVRP\ODWHUERRNV BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  FRQWLQXHGRQQH[WSDJH                 



7KH)XWXUHRI3RVW+XPDQ7UDQVSRUWDWLRQ 



7DEOH7KH6\QWD[RI([LVWHQWLDO'LDOHFWLFV, 7KH3ULQFLSOHV 3DUW9,,,  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  ‡,Q5HODWLRQWR6WUXFWXUH FRQW¶G  ²7KH6LPSOHQHVV&RPSOLFDWHGQHVV3ULQFLSOH  2QWKH,QWHUFRQQHFWLRQDPRQJ7KLQJV  ‡%RWKVLPSOHQHVVDQGFRPSOLFDWHGQHVVDUHYLWDOZLWKRXWIDYRULQJRQH RYHUWKHRWKHULQWKDWHDFKLVXWLOL]HGGHSHQGLQJRQWKHEDVLVRIWKH SHUVSHFWLYHV RI QDWXUH WKH PLQG FXOWXUH DQG VRFLHW\ $QG HYHQ ZKHQ D FRPELQDWLRQ RI WKHP LV SUHIHUUHG WKH GLOHPPD LV RQO\ VKLIWHGWRDFRPELQDWLRQDOGHJUHHRIFRQFHUQ7KHUHLVQRVLPSOHQHVV ZLWKRXWFRPSOLFDWHGQHVV²DQGYLFHYHUVD ‡,QUHODWLRQWRWD[RQRP\VLPSOHQHVVKDVLWVKHXULVWLFXVHIXOQHVVMXVW DVFRPSOLFDWHGQHVVKDVLWVUHDOLVWLFUHSUHVHQWDWLRQIRULQVWDQFH$QG LQUHODWLRQWRQHWZRUNVLPSOHQHVVKDVLWVHFRQRPLFDODWWUDFWLYHQHVV MXVWDVFRPSOLFDWHGQHVVKDVLWVSUDFWLFDOUHOLDELOLW\IRULQVWDQFH ‡ )DPLO\  UHVHPEODQFH HJ  LQIOH[LELOLW\IOH[LELOLW\ VWDQGDUGL]DWLRQ VSHFLDOL]DWLRQ LPSHUIHFWQHVVSHUIHFWQHVV VXSHUILFLDOLW\GHSWK VKDOORZQHVVGHHSQHVV HFRQRPLFDOQHVVHODERUDWHGQHVV SODLQQHVV FLUFXPVSHFWLRQ RQHVLGHGQHVVPXOWLVLGHGQHVV VXFFLQFWQHVV GXSOLFDWHGQHVVHWF ‡6RXUFHV(VSHFLDOO\IURP),$6HHDOVRP\ODWHUERRNV BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  FRQWLQXHGRQQH[WSDJH                

&KDSWHU&RQFOXVLRQ²7KH)XWXUHRI7UDQVSRUWDWLRQ 





7DEOH7KH6\QWD[RI([LVWHQWLDO'LDOHFWLFV, 7KH3ULQFLSOHV 3DUW,;  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  ‡,Q5HODWLRQWR6WUXFWXUH FRQW¶G  ²7KH2SHQQHVV+LGGHQQHVV3ULQFLSOH  2QWKH'HWHFWLRQRI7KLQJV  ‡5HDOLW\KDVLWVKLGGHQIDFHMXVWDVLWLVRSHQWRRXWVLGHYLHZLQVRPH RWKHU ZD\V 7KHUH LV QR RSHQQHVV ZLWKRXW KLGGHQQHVV²DQG YLFH YHUVD ‡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‡ )DPLO\  UHVHPEODQFH  HJ  RYHUWQHVVFRYHUWQHVV  SXEOLFQHVV SULYDWHQHVV RSHQQHVVFORVHGQHVV WUDQVSDUHQF\VHFUHF\ RSHQQHVV ELDVHGQHVV SDUWLFLSDWLRQREVWUXFWLRQ H[SRVLWLRQLOOXVLRQ VXUIDFH GHSWKHWF ‡6RXUFHV(VSHFLDOO\IURP)3+86HHDOVRP\ODWHUERRNV BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  FRQWLQXHGRQQH[WSDJH               



7KH)XWXUHRI3RVW+XPDQ7UDQVSRUWDWLRQ 



7DEOH7KH6\QWD[RI([LVWHQWLDO'LDOHFWLFV, 7KH3ULQFLSOHV 3DUW;  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  ‡,Q5HODWLRQWR6WUXFWXUH FRQW¶G  ²7KH'HQVHQHVV(PSWLQHVV3ULQFLSOH  2QWKH'LVWULEXWLRQRI(QWLWLHVLQ6SDFH  ‡ %RWK GHQVLW\ DQG YRLG DUH QHHGHG LQ UHODWLRQ WR WKH PLQG QDWXUH FXOWXUHDQGVRFLHW\DOEHLWLQGLIIHUHQWZD\V7KHUHLVQRGHQVHQHVV ZLWKRXWHPSWLQHVV²DQGYLFHYHUVD ‡)RUFODULW\WKHWHUP³YRLG´LVXVHGKHUHRQO\DVDQDSSUR[LPDWLRQRI HPSWLQHVV GHSHQGLQJRQWKHGHJUHHRIWKHODFNRIGHQVLW\ VLQFHLQ SK\VLFVLWLVZHOONQRZQWKDW³HPSW\´VSDFHLVQRWUHDOO\HPSW\DOO WKH ZD\ EHFDXVH LW FDQ EH IXOO RI HQHUJ\ HJ UDQGRP TXDQWXP IOXFWXDWLRQVDWWKHVXEDWRPLFOHYHODQGIRUWKDWPDWWHUGDUNHQHUJ\ LQ WKH XQLYHUVH  DQG PDWWHU HJ GLIIHUHQW YHUVLRQV RI VXEDWRPLF SDUWLFOHVDQGIRUWKDWPDWWHUGDUNPDWWHULQWKHXQLYHUVH  ‡ )DPLO\ UHVHPEODQFH HJ IXOOQHVVYRLGQHVV QHDUQHVVIDUQHVV FRQFHQWUDWLRQGLVSHUVLRQ GHQVHQHVVQRWKLQJQHVV SUHVHQFHDEVHQFH IRFXVXQIRFXV VROLGQHVVYRLG VRPHWKLQJQRWKLQJ KHDYLQHVV OLJKWQHVVFRPSRVLWLRQHPSWLQHVVHPSKDVLVGLVHPSKDVLVHWF ‡6RXUFHV)LUVWZRUNHGRXWLQ)3+836HHDOVRP\ODWHUERRNV  ‡,Q5HODWLRQWR3URFHVV ²7KH&KDQJH&RQVWDQF\3ULQFLSOH  2QWKH$OWHUDWLRQRI7KLQJV  ‡&KDQJHRFFXUVRYHUWLPHDOWKRXJKFRQVWDQF\LVDOVRDOORZHG7KHUH LVQRFKDQJHZLWKRXWFRQVWDQF\²DQGYLFHYHUVD ‡$V\PPHWU\XQGHUJRHVFKDQJHVRYHUWLPHVRGRHVV\PPHWU\ ‡2OGSOD\HUVIDGHDZD\DQGQHZRQHVHPHUJHVZLWKHYHUQHZFDXVHV DQGHYHUQHZIRUPV ‡ )DPLO\ UHVHPEODQFH HJ G\QDPLFQHVVVWDWLFQHVV LQVWDELOLW\ VWDELOLW\HWF ‡6RXUFHV)LUVWQDPHGLQ%&3&(VSHFLDOO\IURP)+&)&'DQG )3+&6HHDOVRRWKHUERRNVRIPLQH IURPWKDWSRLQWRQ  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  FRQWLQXHGRQQH[WSDJH   

&KDSWHU&RQFOXVLRQ²7KH)XWXUHRI7UDQVSRUWDWLRQ 





7DEOH7KH6\QWD[RI([LVWHQWLDO'LDOHFWLFV, 7KH3ULQFLSOHV 3DUW;,  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  ‡,Q5HODWLRQWR3URFHVV FRQW¶G  ²7KH2UGHU&KDRV3ULQFLSOH  2QWKH3DWWHUQRI7KLQJV  ‡%RWKRUGHUDQGFKDRVDUHYLWDOLQWKHSURFHVVRIFKDQJHLQWKHZRUOG 7KHSUHIHUHQFHIRURUGHULVELDVHGVLQFHLWGRHVQRWJLYHVXIILFLHQW DWWHQWLRQWRWKHYLWDOUROHRIFKDRVLQWKHWUDQVIRUPDWLRQRIWKHZRUOG ZLWKRXWVRPHKRZUHGXFLQJLWIRUWKHXQGHUVWDQGLQJRIRUGHU 7KHUH LVQRRUGHUZLWKRXWFKDRV²DQGYLFHYHUVD ‡7KHVFLHQWLILFVHDUFKIRURUGHULQWKHZRUOGLVRIWHQDKLGGHQELDVLQ LWVRQWRORJLFDOREVHVVLRQZLWKRUGHUVLQFHFKDRVLVRIWHQWUHDWHGDV WKH ³EDG´ JX\ ZLWK RUGHU DV WKH ³JRRG´ JX\ IRU WKH HQG JRDO RI VFLHQFH  ‡1HLWKHURUGHUQRUFKDRVLVWKHILQDOHQGRIWKHZRUOGDQGRQHLVQRWWR EHWUHDWHGDVWKHPHDQVIRUWKHRWKHULQWKHWUDQVIRUPDWLRQRIWKLQJV %RWKDUHIXQGDPHQWDOLQWKHLUUHFXUUHQWGLDOHFWLFDOLQWHUDFWLRQVZLWK HDFKRWKHURYHUWLPHZLWKRXWUHGXFLQJRQHIRUWKHRWKHU ‡ )DPLO\ UHVHPEODQFH HJ ODZIXOQHVVGLVRUGHU RUGHUGLVRUGHU OLQHDULW\QRQOLQHDULW\ OLQHDULW\LUUHYHUVDOQHVV SDWWHUQFKDRV XQLW\ GLVXQLW\HWF ‡6RXUFHV(VSHFLDOO\IURP)&6HHDOVRP\ODWHUERRNV BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  FRQWLQXHGRQQH[WSDJH               



7KH)XWXUHRI3RVW+XPDQ7UDQVSRUWDWLRQ 



7DEOH7KH6\QWD[RI([LVWHQWLDO'LDOHFWLFV, 7KH3ULQFLSOHV 3DUW;,,  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  ‡,Q5HODWLRQWR3URFHVV FRQW¶G  ²7KH6ORZQHVV4XLFNQHVV3ULQFLSOH  2QWKH6SHHGRI&KDQJH  ‡ %RWK VORZQHVV DQG TXLFNQHVV FRH[LVW ZLWK WKHLU RZQ LQWHUQDO WHQVLRQWRWKHH[WHQWWKDWHDFKILJKWVIRULWVRZQUHOHYDQFHZLWKWKH RWKHULQDFFRUGDQFHWRWKHSHUVSHFWLYHVRIQDWXUHWKHPLQGFXOWXUH DQG VRFLHW\ ZLWKRXW RQH EHLQJ WKH YLFWRU DQG WKH RWKHU EHLQJ WKH YDQTXLVKHG LQ WKH ORQJ KDXO (YHQ ZKHQ ERWK DUH FKRVHQ LQ RWKHU FDVHV WKLV GLOHPPD LV RQO\ WUDQVIHUUHG LQWR VRPHWKLQJ HOVH ZLWK D FRPELQDWLRQDOFKDUDFWHU7KHUHLVQRVORZQHVVZLWKRXWTXLFNQHVV² DQGYLFHYHUVD ‡,QUHODWLRQWRWD[RQRP\TXLFNQHVV KDVLWVHIILFLHQW XVDELOLW\MXVWDV VORZQHVV KDV LWV DHVWKHWLF DSSHDO IRU LQVWDQFH $QG LQ UHODWLRQ WR QHWZRUN TXLFNQHVV KDV LWV DGYHQWXURXV UHDGLQHVV MXVW DV VORZQHVV KDVLWVULVNDGYHUVHFRQYHQLHQFHIRULQVWDQFH ‡ )DPLO\ UHVHPEODQFH HJ LQFRQYHQLHQFHFRQYHQLHQFH SDVVLYHQHVV DFWLYHQHVVQHVV JUDGXDOQHVVDEUXSWQHVV GHFHOHUDWLRQDFFHOHUDWLRQ GLIILFXOW\HDVHHWF ‡6RXUFHV(VSHFLDOO\IURP),$6HHDOVRP\ODWHUERRNV  ²7KH([SDQVLRQ&RQWUDFWLRQ3ULQFLSOH  2QWKH*URZWKRI7KLQJV  ‡(QWLWLHVLQWKH ZRUOGFDQERWKH[SDQGLQVRPH ZD\VDQGFRQWUDFWLQ RWKHU RQHV DV SDUW RI WKHLU QDWXUH 7KHUH LV QR H[SDQVLRQ ZLWKRXW FRQWUDFWLRQ²DQGYLFHYHUVD ‡)RULQVWDQFHLQWKHFRQWH[WRIDQRPDORXVH[SHULHQFHRQHRILWVPRVW IDVFLQDWLQJ H[SUHVVLRQV LV QRQH RWKHU WKDQ WKH DQDO\VLV RI GLIIHUHQW FDXVHVRIWKHVORZEXWVWHDG\H[SDQVLRQ DQGIXUWKHUPRUHLISXWLQ DGLIIHUHQWZD\XQIROGLQJ RIXQFRQVFLRXVQHVV ‡ )DPLO\ UHVHPEODQFH HJ FRQTXHVWDXWDUN\ ULVHIDOO RU XSGRZQ  VSUHDGVKULQN H[WHQGLQJQHVVVKRUWHQLQJQHVV ZLGHQLQJQDUURZLQJ HWF ‡6RXUFHV(VSHFLDOO\IURP)3+86HHDOVRP\ODWHUERRNV BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  FRQWLQXHGRQQH[WSDJH  

&KDSWHU&RQFOXVLRQ²7KH)XWXUHRI7UDQVSRUWDWLRQ 





7DEOH7KH6\QWD[RI([LVWHQWLDO'LDOHFWLFV, 7KH3ULQFLSOHV 3DUW;,,,  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  ‡,Q5HODWLRQWR$JHQF\ ²7KH7KHRU\3UD[LV3ULQFLSOH  2QWKH'XDOLW\RI.QRZOHGJH  ‡ 7KLV  KDV WR  GR  ZLWK  WKH  GXDOLW\ RI NQRZOHGJH LQ H[LVWHQWLDO GLDOHFWLFV LQ WKDW LI WKHUH LV WKHRUHWLFDO FRQVWUXFWLRQ WKHUH LV OLNHZLVH LWV SUDFWLFDO DSSOLFDWLRQ ERWK WHFKQLFDO DQG QRUPDWLYH 7KHUHLVQRWKHRU\ZLWKRXWSUD[LV²DQGYLFHYHUVD ‡ )DPLO\ UHVHPEODQFH HJ GLVFRYHU\DSSOLFDWLRQ  NQRZOHGJHDFWLRQ LQYHQWLRQLQQRYDWLRQ NQRZOHGJHPRWLYDWLRQ WKHRU\LQWHQWLRQDOLW\ XQLYHUVDOLW\SDUWLFXODULW\GLVFRXUVHDFWLRQNQRZOHGJHLQWHUHVWHWF ‡6RXUFH(VSHFLDOO\IURP)3+(6HHDOVRP\ODWHUERRNV BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  FRQWLQXHGRQQH[WSDJH  

                 



7KH)XWXUHRI3RVW+XPDQ7UDQVSRUWDWLRQ 



7DEOH7KH6\QWD[RI([LVWHQWLDO'LDOHFWLFV, 7KH3ULQFLSOHV 3DUW;,9  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB

 ‡,Q5HODWLRQWR$JHQF\ FRQW¶G  ²7KH&RQYHQWLRQ1RYHOW\3ULQFLSOH  2QWKH1DWXUHRI&UHDWLYH7KLQNLQJ  ‡,IWKHUHLVFRQYHQWLRQDOZLVGRPWKHUHLVOLNHZLVHQRYHOFKDOOHQJHWR WKHH[WHQWWKDWERWKFRQYHUJHQWDQGGLYHUJHQWWKLQNLQJDUHSDUWRI OLIH7KHUHLVQRFRQYHQWLRQZLWKRXWQRYHOW\²DQGYLFHYHUVD ‡,QDGGLWLRQLQWKLVFRQWH[WRIWKHFRQYHQWLRQQRYHOW\SULQFLSOHWKHUH DUHLQWKHDEVHQFHRIEHWWHUZRUGVZKDW,ZDQWWRFDOO D FUHDWLYH WHFKQLTXHV DQG E  FUHDWLYH WUDLWV ZKLFK ZKHQ VDWLVILHG²LQ UHODWLRQ WR WKH ODUJHU FRQWH[W RI WKH PLQG QDWXUH VRFLHW\ DQG FXOWXUH²FDQ EH XVHG WR HQKDQFH FUHDWLYH ZRUNV 7KH OLVW RI FUHDWLYH WHFKQLTXHV DQG WUDLWV DV VXPPDUL]HG LQ 7DEOH  RI )3+&7  DUH QRW H[KDXVWLYH RI FRXUVH EXW WKH H[DPSOHV KHUH FRQVWLWXWH D JUHDW EHJLQQLQJ RI XQGHUVWDQGLQJ WKH VWUXFWXUH RI FUHDWLYHWKLQNLQJ ‡FRPSHWLWLYH@HFRQRP\´ .H\QHV     LI IUHHU IURP  DQDUFK\ LQ  WKH VWDWH  RI QDWXUH V\VWHP IUDJPHQWDWLRQ  WKHQ OHVV IUHH IURP JRYHUQPHQW UHJXODWLRQV DQG FRQWUROVLQV\VWHPLQWHJUDWLRQ BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  FRQWLQXHGRQQH[WSDJH            

&KDSWHU&RQFOXVLRQ²7KH)XWXUHRI7UDQVSRUWDWLRQ 





7DEOH7KH)UHHGRP8QIUHHGRP'LDOHFWLFV 3DUW,,  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB

 ‡2Q%HORQJLQJ ²,Q5HODWLRQWRWKH*RRGDQGWKH-XVW    LI IUHHU IURP GLVFLSOLQDU\ VRFLHW\ WKHQ OHVV IUHH IURP VRFLHW\ RI FRQWURO )RXFDXOW    LIIUHHUIURPWKHW\UDQQ\RIRQHRUDIHZWKHQOHVVIUHH IURPWKHW\UDQQ\RIWKHPDMRULW\ RUVRPHWLPHVPLQRULW\YHWR    LIIUHHUIURPHOLWLVWGHFLVLRQPDNLQJWKHQOHVVIUHHIURP SROLWLFDOJULGORFNFOHDYDJH    LI   IUHHU  IURP  DUELWUDU\  GLVFUHWLRQDU\    DGPLQLVWUDWLRQ WKHQ OHVV  IUHH IURP EXUHDXFUDWLF LUUDWLRQDOLW\ :HEHU  DQG   OHJDO WULFNHU\ ORRSKROHV   ‡2Q%HLQJ ²,Q5HODWLRQWRWKH7UXH    LI IUHHU IURP XQVFLHQWLILF GRJPDV WKHQ OHVV IUHH IURP LQVWUXPHQWDO DE\VV QLKLOLVP  2U FRQYHUVHO\ LI IUHHU IURP PHDQLQJOHVVQHVVWKHQOHVVIUHHIURPGRJPDV    LI IUHHU IURP WKH ERQGDJH RI SDUWLDOLW\SDUWLVDQVKLS HJ SUHMXGLFH GLVFULPLQDWLRQ  WKHQ OHVV IUHH IURP WKH GDQJHU RI LPSDUWLDOLW\  DQG QHXWUDOLW\ HJ RSSRUWXQLVP XQUHDOLVWLFQHVV ODFNRIFRPSDVVLRQLQDFWLRQ     LI IUHHU IURP PDNLQJ JHQHUDOL]DWLRQV WKHQ OHVV IUHH IURP EHLQJ XQDEOHWRXQGHUVWDQGPXFKRIDQ\WKLQJ ²,Q5HODWLRQWRWKH+RO\   LIIUHHUIURPFROOHFWLYHFRQVFLHQFHWKHQOHVVIUHHIURPVRFLDO ORQHOLQHVV    LI IUHHU IURP UHOLJLRXV DEVROXWHQHVV WKHQ OHVV IUHH IURP VSLULWXDO HPSWLQHVV ²,Q5HODWLRQWRWKH%HDXWLIXO6XEOLPH  LIIUHHUIURPDUWLVWLFQRQDXWRQRP\WKHQOHVVIUHHIURPDHVWKHWLF GLVLOOXVLRQ GHFRQVWUXFWLRQ  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  FRQWLQXHGRQQH[WSDJH     



7KH)XWXUHRI3RVW+XPDQ7UDQVSRUWDWLRQ 



7DEOH7KH)UHHGRP8QIUHHGRP'LDOHFWLFV 3DUW,,,  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 1RWHV 7KH H[DPSOHV LQ HDFK FDWHJRU\ DUH VROHO\ LOOXVWUDWLYH QRW H[KDXVWLYH  DQG WKH FRPSDULVRQ LV UHODWLYH QRW DEVROXWH  QRU DUH WKH\ QHFHVVDULO\ PXWXDOO\ H[FOXVLYH $QG VRPH FDQ EH HDVLO\ UHFODVVLILHG HOVHZKHUH$VJHQHUDOLWLHVWKH\DOORZH[FHSWLRQV 6RXUFHV$UHFRQVWUXFWLRQIURP&KRI)&'EDVHGRQ)+&                                 

&KDSWHU&RQFOXVLRQ²7KH)XWXUHRI7UDQVSRUWDWLRQ 





7DEOH7KH(TXDOLW\,QHTXDOLW\'LDOHFWLFV 3DUW,  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB

 ‡2Q+DYLQJ ²,Q5HODWLRQWRWKH7HFKQRORJLFDO    LI PRUH HTXDO LQ WUHDWLQJ 1DWXUH ZLWK VSLULWXDO XQLW\  WKHQ OHVV HTXDO LQ VXSSUHVVLQJ  WKH  GRPLQDQW  GULYH  WR  WUDQVFHQG LW DOWRJHWKHU ²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‡2Q%HORQJLQJ ²,Q5HODWLRQWRWKH*RRGDQGWKH-XVW   LIPRUHHTXDOLQEDQQLQJPRQDUFKLFROLJDUFKLFH[FOXVLRQWKHQ OHVV HTXDO LQ SURGXFLQJ ³WKH W\UDQQ\ RI WKH PDMRULW\´ RU RI ³PLQRULW\YHWR´   LIPRUHHTXDOLQHQFRXUDJLQJSDUWLFLSDWRU\GHFLVLRQPDNLQJWKHQ OHVVHTXDOLQLQGXFLQJSROLWLFDOGLYLVLYHQHVV JULGORFNFOHDYDJHLQ SRZHUEORFV DQGRUJDQL]DWLRQDOROLJDUFK\    LI PRUH HTXDO LQ LQVWLWXWLRQDOL]LQJ D GHFHQWUDOL]HG EXUHDXFUDF\ WKHQ OHVV HTXDO  LQ IDOOLQJ LQWR PRUH WHUULWRULDOWXUI SROLWLFV LQWULJXHV  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  FRQWLQXHGRQQH[WSDJH        



7KH)XWXUHRI3RVW+XPDQ7UDQVSRUWDWLRQ 



7DEOH7KH(TXDOLW\,QHTXDOLW\'LDOHFWLFV 3DUW,,  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB

 ‡2Q%HLQJ ²,Q5HODWLRQWRWKH%HDXWLIXO6XEOLPH   LI PRUH HTXDO LQ  DFFHSWLQJ GLYHUVH  VW\OHV  ³DQ\WKLQJ  JRHV´ PHQWDOLW\ WKHQOHVVHTXDOLQDUWLVWLFJRRGTXDOLW\ LQOHYHOLQJ RIIHIIHFWVDJDLQVWWKHEHVW  ²,Q5HODWLRQWRWKH7UXH   LI PRUH  HTXDO LQ WROHUDWLQJ PXOWLSOH YLHZSRLQWV QR PDWWHU KRZ H[WUHPH WKHQOHVVHTXDOLQHSLVWHPLFVWDQGDUGV ²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

&KDSWHU&RQFOXVLRQ²7KH)XWXUHRI7UDQVSRUWDWLRQ 





7DEOH7KH'XDOLW\RI2SSUHVVLRQLQ([LVWHQWLDO'LDOHFWLFV 2SSUHVVLRQDQG6HOI2SSUHVVLRQ 3DUW,  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB

 ‡)URPWKH6DPHWRWKH2WKHUVDQG,WVHOI ²7KH2SSUHVVLRQE\WKH6DPHDJDLQVWWKH2WKHUV ‡%\ZD\RIGRZQJUDGLQJGLIIHUHQFHV ±([RQMXGLFLDU\FDSULFHIRUFRUSRUDWHFULPHV 6HF  ±([RQWKHGHFHSWLYHSROLWLFVRIOLEHUDWLRQ 6HF  ±([RQWKHKXPDQLWDULDQP\VWLTXH 6HF  ±([RQWKHIDGRIHPRWLRQDOLQWHOOLJHQFH 6HF  ‡%\ZD\RIDFFHQWXDWLQJGLIIHUHQFHV ±([RQWKHOHJDOVRSKLVWU\RIVHOIGHIHQVH 6HF  ±([RQWKHOHJDOVHPDQWLFVRISURSRUWLRQDOLW\ 6HF  ±([RQWKHWULFN\SROLWLFVRIH[WHUQDOWKUHDW 6HF  ±([RQWKHDSSHDORIWKH)DU5LJKWIRUGHPRFUDF\ 6HF  ±([RQWKHGHPRFUDWLFD[LVRIHYLO 6HF  ±([RQWKHGHPRFUDWLFZD\RIEUXWDOLW\DQGUHYHQJH 6HF  ±([RQGHPRFUDWLFDXWRFUDF\ 6HF  ²7KH2SSUHVVLRQE\WKH6DPHDJDLQVW,WVHOI ‡%\ZD\RIGRZQJUDGLQJGLIIHUHQFHV ±([RQWKHSROLWLFVRIIHDU 6HF  ±([RQWKHWULFNHU\RIFRPSDVVLRQDWHFRQVHUYDWLVP 6HF  ±([RQWKHGHFHSWLYHSROLWLFVRISDWULRWLVP 6HF  ‡%\ZD\RIDFFHQWXDWLQJGLIIHUHQFHV ±([RQWKHFDSULFHRIGXHSURFHVVRQGRPHVWLFVXVSHFWV  6HF  ±([RQWKHIDOVHVHFXULW\IUHHGRPGLOHPPD 6HF  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  FRQWLQXHGRQQH[WSDJH           



7KH)XWXUHRI3RVW+XPDQ7UDQVSRUWDWLRQ 



7DEOH7KH'XDOLW\RI2SSUHVVLRQLQ([LVWHQWLDO'LDOHFWLFV 2SSUHVVLRQDQG6HOI2SSUHVVLRQ 3DUW,,  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB

 ‡)URPWKH2WKHUVWRWKH6DPHDQG7KHPVHOYHV ²7KH2SSUHVVLRQE\WKH2WKHUVDJDLQVWWKH6DPH ‡%\ZD\RIGRZQJUDGLQJGLIIHUHQFHV ±([RQMXGLFLDU\FDSULFHLQWKHUHYHUVHGLUHFWLRQ 6HF  ±([RQHTXDOSD\ 6HF  ±([RQHTXDOUHSUHVHQWDWLRQ 6HF  ±([RQDIILUPDWLYHDFWLRQSURJUDP 6HF  ±([RQVDPHVH[PDUULDJH 6HF  ‡%\ZD\RIDFFHQWXDWLQJGLIIHUHQFHV ±([RQVH[XDOKDUDVVPHQW 6HF  ±([RQSK\VLFDOYLROHQFH 6HF  ±([RQVH[XDOH[SORLWDWLRQ 6HF  ²7KH2SSUHVVLRQE\WKH2WKHUVDJDLQVW7KHPVHOYHV ‡%\ZD\RIGRZQJUDGLQJGLIIHUHQFHV ±([RQWKHUHYHUVHFODVVP\VWLTXH 6HF  ±([RQWKHUHYHUVHEODFNP\VWLTXH 6HF  ±([RQVHOIGLVFULPLQDWLRQE\GRZQJUDGLQJ 6HF  ‡%\ZD\RIDFFHQWXDWLQJGLIIHUHQFHV ±([RQVHOIGLVFULPLQDWLRQE\DFFHQWXDWLQJ 6HF  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 1RWHV7KHH[DPSOHVDUHVROHO\LOOXVWUDWLYH QRWH[KDXVWLYH QRUDUHWKH\ PXWXDOO\ H[FOXVLYH $V JHQHUDOLWLHV WKH\ DOORZ H[FHSWLRQV $OVR ERWK IRUPVRIRSSUHVVLRQFRH[LVWLQDOORIWKHH[DPSOHVVRWKHOLVWLQJRIWKHP DUHRQO\PHDQWLQDUHODWLYHQRWDEVROXWHVHQVH 6RXUFH $ VXPPDU\ RI WKH VHFWLRQV DV FLWHG  LQ &KV RI %'3' 6HH WH[WIRUPRUHLQIRDQGUHIHUHQFHV          

&KDSWHU&RQFOXVLRQ²7KH)XWXUHRI7UDQVSRUWDWLRQ 





7DEOH7KH6WUXFWXUHRI([LVWHQWLDO'LDOHFWLFV, 7KH)UHHGRP8QIUHHGRPDQG(TXDOLW\,QHTXDOLW\'LDOHFWLFV BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  ‡(DFKIUHHGRPDQGHTXDOLW\SURGXFHVLWVRZQXQIUHHGRPDQGLQHTXDOLW\ UHJDUGOHVVRIZKHWKHUWKHSDLURFFXUVLQSROLWLFDOVRFLHW\ ZLWKWKHQDWLRQ VWDWH LQFLYLOVRFLHW\ ZLWKVRPHDXWRQRP\IURPWKHVWDWH RUHOVHZKHUH HJ LQ WKH SULYDWH VSKHUH RI LQGLYLGXDO KRPHV ²DQG UHJDUGOHVV RI ZKHWKHUIUHHGRPDQGHTXDOLW\DUHXQGHUVWRRGDV³QHJDWLYH´RU³SRVLWLYH´  ‡ 2SSUHVVLRQ LV GXDOLVWLF DV PXFK E\ WKH 6DPH DJDLQVW WKH 2WKHUV DQG LWVHOIDVE\WKH2WKHUVDJDLQVWWKH6DPHDQGWKHPVHOYHV  ‡%RWKIRUPVRIRSSUHVVLRQDQGVHOIRSSUHVVLRQFDQEHDFKLHYHGE\ZD\RI GRZQJUDGLQJ GLIIHUHQFHV EHWZHHQ WKH 6DPH DQG WKH 2WKHUV  DQG RI DFFHQWXDWLQJWKHP  ‡ 7KH UHODWLRQVKLSV DUH UHODWLYHO\ DV\PPHWULF EHWZHHQ WKH 6DPH DQG WKH 2WKHUVDQGUHODWLYHO\V\PPHWULFZLWKLQWKHP7KLVLVWUXHHYHQZKHQWKH 6DPH FDQ EH UHODWLYHO\ DV\PPHWULF WRZDUGV LWVHOI LQ VHOIRSSUHVVLRQ MXVW DVWKH2WKHUVFDQEHOLNHZLVHWRZDUGVWKHPVHOYHV  ‡6\PPHWU\DQGDV\PPHWU\FKDQJHRYHUWLPHZLWKHYHUQHZSOD\HUVQHZ FDXVHVDQGQHZIRUPV BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 1RWHV 7KH H[DPSOHV LQ HDFK FDWHJRU\ DUH VROHO\ LOOXVWUDWLYH QRW H[KDXVWLYH  QRU QHFHVVDULO\ PXWXDOO\ H[FOXVLYH DQG WKH FRPSDULVRQ LV UHODWLYH QRWDEVROXWH $VJHQHUDOLWLHVWKH\DOORZH[FHSWLRQV³1HJDWLYH´ IUHHGRP LV IUHHGRP ³IURP´ HJ IUHHGRP IURP SRYHUW\  ZKHUHDV ³SRVLWLYH´ IUHHGRP LV IUHHGRP ³WR´ HJ IUHHGRP WR WKH VWDWH RI HQOLJKWHQPHQW  ³1HJDWLYH´ HTXDOLW\ LV ³SURFHGXUDO´ HTXDOLW\ HJ HTXDOLW\ RI RSSRUWXQLW\  ZKLOH ³SRVLWLYH´ HTXDOLW\ LV ³VXEVWDQWLYH´ HTXDOLW\ HJ HTXDOLW\ RI RXWFRPH  ([LVWHQWLDO GLDOHFWLFV LPSRVH FRQVWUDLQWV RQ IUHHGRP DQG HTXDOLW\ LQ GHPRFUDF\ QRQGHPRFUDF\ DQG SRVWGHPRFUDF\7KHUHLVQRXWRSLDLQWKHHQGHYHQVKRXOGWKHUHEHRQH G\VWRSLDZRXOGH[LVWZLWKLQLW 6RXUFHV  )URP 7DEOH  RI %'3'²DQG DOVR IURP )+& )&' DQG )3+&   



7KH)XWXUHRI3RVW+XPDQ7UDQVSRUWDWLRQ 



7DEOH7KH6WUXFWXUHRI([LVWHQWLDO'LDOHFWLFV,, 7KH:HDOWK3RYHUW\'LDOHFWLFV BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  ‡ 7KHUH LV QR ZHDOWK ZLWKRXW SRYHUW\ MXVW DV WKHUH LV QR SRYHUW\ ZLWKRXW ZHDOWK  ‡7KHZHDOWKSRYHUW\GLDOHFWLFVRFFXUVLQWKHUHDOPVRIKDYLQJEHORQJLQJ DQGEHLQJLQUHODWLRQWRWKHPDWHULDOUHODWLRQDODQGVSLULWXDO  ‡7KHZHDOWKSRYHUW\GLDOHFWLFVDOVRH[SUHVVHVLWVHOIDWWKHPXOWLSOHOHYHOV RI DQDO\VLV LQ DFFRUGDQFH WR PHWKRGRORJLFDO KROLVP EH WKH\ DERXW WKH PLFURSK\VLFDO WKH FKHPLFDO WKH ELRORJLFDO WKH SV\FKRORJLFDO WKH RUJDQL]DWLRQDOWKHLQVWLWXWLRQDOWKHVWUXFWXUDOWKHV\VWHPLFWKHFXOWXUDO DQGWKHFRVPRORJLFDO  ‡ 7KH ZHDOWKSRYHUW\ GLDOHFWLFV LV D GLIIHUHQW PDQLIHVWDWLRQ RI H[LVWHQWLDO GLDOHFWLFVLQJHQHUDOVXEMHFWWRWKHSULQFLSOHVLQLWVORJLFRIRQWRORJ\²MXVW DVWKHIUHHGRPXQIUHHGRPDQGHTXDOLW\LQHTXDOLW\GLDOHFWLFVDUHOLNHZLVH  ‡ 7KHUH LV QR HFRQRPLF XWRSLD LQ WKH HQG HYHQ VKRXOG WKHUH EH RQH G\VWRSLDZRXOGH[LVWZLWKLQLW BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 1RWHV 7KH PDLQ SRLQWV KHUH DUH VROHO\ LOOXVWUDWLYH QRW H[KDXVWLYH  QRU QHFHVVDULO\ PXWXDOO\ H[FOXVLYH DQG WKH FRPSDULVRQ LV UHODWLYH QRW DEVROXWH $VJHQHUDOLWLHVWKH\DOORZH[FHSWLRQV 6RXUFHV)URP%&3&6HHDOVR)&'DQG)+&              

&KDSWHU&RQFOXVLRQ²7KH)XWXUHRI7UDQVSRUWDWLRQ 





7DEOH7KH6WUXFWXUHRI([LVWHQWLDO'LDOHFWLFV,,, 7KH&LYLOL]DWLRQ%DUEDULW\'LDOHFWLFV BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  ‡7KHUHLVQRFLYLOL]DWLRQZLWKRXWEDUEDULW\  ‡ 7KH FLYLOL]DWLRQEDUEDULW\ GLDOHFWLFV DSSOLHV LQ WKH IRXU FLYLOL]LQJ SURFHVVHV HJ WKH UDWLRQDOL]LQJ SURFHVV WKH SDFLI\LQJ SURFHVV WKH VWHZDUGL]LQJSURFHVVDQGWKHVXEOLPLQJSURFHVV   ‡ 7KH FLYLOL]DWLRQEDUEDULW\ GLDOHFWLFV LV DQRWKHU GLIIHUHQW  PDQLIHVWDWLRQ RIH[LVWHQWLDOGLDOHFWLFVLQJHQHUDOVXEMHFWWRWKHSULQFLSOHVLQLWVORJLFRI RQWRORJ\²MXVW DV WKH IUHHGRPXQIUHHGRP DQG HTXDOLW\LQHTXDOLW\ GLDOHFWLFVDQGWKHZHDOWKSRYHUW\GLDOHFWLFVDUHOLNHZLVH  ‡7KHUHLVQRXWRSLDLQWKHHQGHYHQVKRXOGWKHUHEHRQHG\VWRSLDZRXOG H[LVWZLWKLQLW BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 1RWHV 7KH PDLQ SRLQWV KHUH DUH VROHO\ LOOXVWUDWLYH QRW H[KDXVWLYH  QRU QHFHVVDULO\ PXWXDOO\ H[FOXVLYH DQG WKH FRPSDULVRQ LV UHODWLYH QRW DEVROXWH $VJHQHUDOLWLHVWKH\DOORZH[FHSWLRQV 6RXUFHV)URP%&,96HHDOVR)&')+&DQG%'3'                   



7KH)XWXUHRI3RVW+XPDQ7UDQVSRUWDWLRQ 



7DEOH7KH'RXEOH6LGHVRI9LUWXDO2UJDQL]DWLRQV 3DUW,  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  ‡3V\FKRORJLFDO ²([YLUWXDOSV\FKRVLV ²([LPSHUVRQDOLW\DQGORQHOLQHVVLQTXDWHUQDU\VRFLDOUHODWLRQV  ‡2UJDQL]DWLRQDO ²([WKHUDFHIRUSRZHUDQGLQWHUHVWV ²([WKHZRUOGRIXQHTXDOVXFFHVVHV ²([WKHEXUHDXFUDWLFOLIHRILWVRZQ ²([OHVVHUDFFRXQWDELOLW\DQGWUDQVSDUHQF\  ‡(FRQRPLF ²([WKHHFRQRPLFGLYLGHV ²([WKHHURVLYHLPSDFWRIFRPPHUFLDOL]DWLRQ  ‡3ROLWLFDO ²([WKHDQWLDXWKRULWDULDQP\WK ²([GLIIHUHQWSRZHUVWUXJJOHVDPRQJJURXSV HJ&RQVHUYDWLYH 5HIRUPLVW5DGLFDO   ‡6WUXFWXUDO ²([GLIIHUHQWORFDOLWLHV HJFOLPDWHVVFHQHU\  ²([GLYLGHGGRPDLQV HJFRUHSHULSKHUDOVXESHULSKHUDO  ²([VXEVWLWXWLRQHIIHFWRIVRFLDOFDSLWDO  ‡6\VWHPLF ²([XQHYHQDGYDQFHVLQWUDQVSRUWDWLRQDQGFRPPXQLFDWLRQVDQG JHRJUDSKLFDOPLJUDWLRQ  ‡&XOWXUDO ²([FRQIOLFWLQJFLYLOL]DWLRQDOIDEULFV HJ&RQIXFLDQ,VODPLF :HVWHUQ  ²([WKHELDVRIWKH/LEHUDO'HPRFUDWLFDJHQGD ²([WKHDGGLFWLRQWRPRUDOIDQDWLFLVP BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  FRQWLQXHGRQQH[WSDJH   

&KDSWHU&RQFOXVLRQ²7KH)XWXUHRI7UDQVSRUWDWLRQ 





7DEOH7KH'RXEOH6LGHVRI9LUWXDO2UJDQL]DWLRQV 3DUW,,  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 1RWHV 7KHVH FDWHJRULHV DQG H[DPSOHV DUH VROHO\ LOOXVWUDWLYH QRW H[KDXVWLYH  DQG VRPH RI WKH LWHPV FDQ EH UHFODVVLILHG VRPHZKHUH HOVH 1RU DUH WKH\ PXWXDOO\ H[FOXVLYH 6LQFH WKH\ DUH JHQHUDOLWLHV H[FHSWLRQV DUHH[SHFWHG 6RXUFH)URP&KRI)&'                                 



7KH)XWXUHRI3RVW+XPDQ7UDQVSRUWDWLRQ 



7DEOH%H\RQGWKH:RUOGRI7LWDQV DQGWKH5HPDNLQJRIWKH:RUOG2UGHU BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB

 ‡+\SHU(PSLUHV ²([7KH&KLQHVH8QLRQ ²([7KH,QGLDQ8QLRQ  ‡0HVR(PSLUHV ²([7KH(XURSHDQ8QLRQ ²([7KH1RUWK$PHULFDQ8QLRQ  ‡0LFUR(PSLUHV ²([7KH/DWLQ$PHULFDQ8QLRQ ²([7KH0LGGOH(DVWHUQ8QLRQ  ‡7KH5HVWRIWKH:RUOG ²2GG3RZHUV  ‡([-DSDQ  ‡([5XVVLD ²7KH3RRU&OXE  ‡([7KH$IULFDQ8QLRQ ²$PELYDOHQW5HJLRQV  ‡([6RXWKHDVW$VLD  ‡([2FHDQLD  ‡([6RXWK$VLD  ‡([&HQWUDO$VLD  ‡([6RXWKHUQ(DVWHUQ(XURSH  ‡([1RUWK$IULFD  ‡([&HQWUDO$PHULFD  ‡([2WKHUV HJWKH.RUHDQSHQLQVXOD  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 6RXUFH$VXPPDU\RI&KV RI%:7         

&KDSWHU&RQFOXVLRQ²7KH)XWXUHRI7UDQVSRUWDWLRQ 





7DEOH7KH2ULJLQV RI$XWKRULWDULDQ/LEHUDO'HPRFUDF\ BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  ‡7KH*HRSRZHURI1DWXUH &KRI$/'  ²([3RZHU&KDUDFWHUDQG*HRJUDSKLFDO6WUDWHJ\ ²([/LYLQJ6SDFHDQG7HUULWRULDO([SDQVLRQ ²([6WUDWHJLF+HDUWODQGDQG&RQWDLQPHQW  ‡7KH%LRSV\FKRORJ\RIWKH0LQG &KRI$/'  ²([7KH%HOO&XUYHDQG0DVV,QWHOOLJHQFH ²([*URXS$QDO\VLVDQG0DVV.QRZOHGJH ²([*URXSWKLQNDQG(OLWH 0LV FDOFXODWLRQ  ‡7KH'LVFLSOLQDU\&RQWURORI6RFLHW\ &KRI$/'  ²([6RFLDO2UJDQL]DWLRQVRI5XWKOHVVQHVV ²([6RFLDO,QVWLWXWLRQVRI*UHHG ²([6RFLDO6WUXFWXUHRI([FOXVLRQ ²([6RFLDO6\VWHPVRI9LROHQFH  ‡7KH0ROGLQJ)RUFHRI&XOWXUH &KRI$/'  ²([7KH7UDGLWLRQRI&RQTXHVW ²([7KH5DWLRQDOL]DWLRQRI8QUHDVRQ BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 1RWHV 7KH H[DPSOHV LQ HDFK FDWHJRU\ DUH VROHO\ LOOXVWUDWLYH QRW H[KDXVWLYH DQGWKH\DUHDOVRUHODWLYH QRWDEVROXWH QRUDUHWKH\PXWXDOO\ H[FOXVLYH$VJHQHUDOLWLHVWKH\DOORZH[FHSWLRQV 6RXUFH$VXPPDU\RI&KVRI$/'           



7KH)XWXUHRI3RVW+XPDQ7UDQVSRUWDWLRQ 



7DEOH7KH7KHRU\RI3RVW'HPRFUDF\, 7KH3ULRULW\RI)UHHGRPRYHU(TXDOLW\ 3DUW,  BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB  ‡'LIIHUHQFHV ²)RUWKHDJJUHVVLYH/LRQV WKHVWURQJ(OLWLVWV  ‡6HWWLQJXSUDQNGLVWLQFWLRQVDPRQJXQHTXDOV HJEHWZHHQLQIHULRU KXPDQV DQG VXSHULRU SRVWKXPDQV RU ODWHU DPRQJ LQIHULRU SRVW KXPDQVDQGVXSHULRURQHVUHODWLYHO\VSHDNLQJ  ‡