linux assembly language programming PHẦN 1 ppt

... $OH[LV+H\GW&RYHUGHVLJQGLUHFWRU-HUU\9RWWD&RYHUGHVLJQHU1LQD6FXGHUL7KLVERRNLVGHGLFDWHGWRDOOLPSULVRQHG3ORZVKDUHVDFWLYLVWVIRUDWWHPSWLQJWRGRZLWKLURQZKDWDOVRQHHGVWREHGRQHZLWKVLOLFRQ/LQX[$VVHPEO\/DQJXDJH3URJUDPPLQJ35()$&( ,17 52'8&7, 21 7KH)HWFK([HFXWH&\FOH7KH/LQX[2SHUDWLQJ6\VWHP7KH*QX&&RPSLOHU7KH(GOLQDV$VVHPEOHU 1$ 602WKHU$VVHPEOHUV3/$&(+2/' ,1* 18 0(5$7, 21 7KH'HFLPDODQG3HQWLPDO6\VWHPV3HQWLPDO$ULWKPHWLF&RQYHUVLRQWR3HQWLPDO7KH%LQDU\6\VWHP0HPRU\DVD5HFWDQJOHRI%LWV7KH+H[DGHFLPDO6\VWHP%DVH'LVWLQJXLVKLQJ1RWDWLRQV)UDFWLRQVLQ2WKHU%DVHV&RQYHUWLQJ)UDFWLRQV/2*,&&,5&8,76 $1& apos;&20387$7, 21 7KH 12 7*DWH%RROHDQ2SHUDWRUV/RJLF*DWHV$GGLWLRQ&LUFXLWV6HTXHQWLDO&LUFXLWV1HJDWLYH1XPEHU5HSUHVHQWDWLRQ6XEWUDFWLRQ8VLQJ1HJDWLRQ3ODFHKROGLQJ7ZRV&RPSOHPHQW0HPRU\&LUFXLWV[*HQHUDO5HJLVWHUVDQGWKHLU$QFHVWU\7KH029&RPPDQG$GGLWLRQDQG6XEWUDFWLRQ&RPPDQGV0XOWLSOLFDWLRQDQG'LYLVLRQ&RPPDQGV$66(0%/</ $1* 8$*(7KH)RXU)LHOG)RUPDW&RPSXWHUVIURPWKH&386WDQGSRLQW6LPSOH$VVHPEO\/DQJXDJH3URJUDPV$VVHPEOHU3URJUDPVZLWK-XPSV$VVHPEOHU3URJUDPVZLWK/RRSV6LJQHG&RPSDULVRQV8QVLJQHG&RPSDULVRQV/LQX[VILOHV0$&+ ,1( / $1* 8$*($VVHPEOLQJ6LPSOH3URJUDPV2SFRGH6SDFH7KH0RG50%\WH6SDFH2)«1DWLYH$GGLWLRQ8VLQJWKHQDWLYHDULWKPHWLFKRZHYHULVHDVLHUWKDQWKLVHVSHFLDOO\ZKHQWKHQXPEHUVJHWODUJHU$ERXWDOOWKDWVQHFHVVDU\WRUHPHPEHULVWKDWILYHRIDQ\RQHXQLWPXVWEHFDUULHGE\FRQYHUWLQJLWWRRQHRIWKHQH[WODUJHUXQLW7KHRQHVRUSHQQLHVFROXPQWRWDOVVHYHQZKLFKLVZKLFKLVFDUU\LVVL[ZKLFKLVZKLFKLVFDUU\$QGLVHLJKWZKLFKLVZKLFKLVFDUU\&OHDUO\WKHQDWLYHDULWKPHWLFLVHDVLHURQFHZHXQGHUVWDQGLW1DWLYH6XEWUDFWLRQ6XEWUDFWLRQUHTXLUHVERUURZLQJIRUH[DPSOHFRQYHUWLQJDTXDUWHUWRILYHQLFNHOVRUDQLFNHOWRILYHSHQQLHV7KHIROORZLQJVXEWUDFWLRQRIWKUHHIURPWHQLOOXVWUDWHVERUURZLQJ%RUURZDQLFNHOIURPWKHQLFNHOVFROXPQDQGFRQYHUWLWLQWRILYHSHQQLHV2QHQLFNHOLVOHIW6RZHJHWRQHQLFNHODQGWZRSHQQLHVOHIW&RQYHUVLRQWR3HQWLPDO6RPHWLPHVFRQYHUVLRQVDUHXQDYRLGDEOH)RUDFRPSXWHUWREHDEOHWRVWRUHDQXPEHULQELQDU\ZKLFKLVLQSXWLQGHFLPDODFRQYHUVLRQLVQHHGHG$OWKRXJKFRQYHUVLRQVFDQEHGRQHE\VHDUFKLQJIRUDUHSUHVHQWDWLRQZKLFKZRUNVWKHUHDUHPRUHHIILFLHQWPHWKRGV&RQVLGHUWKHFRQYHUVLRQRILQWREDVHILYH7RXQGHUVWDQGWKLVFRQYHUVLRQLWPD\KHOSWRORRNDWWKHDQVZHUEHIRUHZHVWDUW:HFDQVHHWKDWFDQEHIDFWRUHGRXWRIWKLVVXPH[FHSWIRUWKHDWWKHHQG%XWWKLVMXVWVD\VZKDWWKHTXRWLHQWDQGUHPDLQGHURIGLYLGHGE\DUH1RWLFHWKDWWKHUHPDLQGHULVRXUXQLWVGLJLW)XUWKHUPRUHZHFDQFDOFXODWHWKLVTXRWLHQWDQGUHPDLQGHUXVLQJEDVHWHQZKLFKLVZKDWZHKDYHDYDLODEOHZKHQZHVWDUWWKLVFRQYHUVLRQ:HKDYHLQEDVHWHQWKDWZKHUHDJDLQSHHNLQJDWWKHDQVZHUVKRZVXVWKDW7KHTXRWLHQWFRQWDLQVWKHLQIRUPDWLRQQHHGHGWRJHWDOOWKHRWKHUGLJLWV7KH\FDQEHREWDLQHGXVLQJPRUHGLYLVLRQV0DQ\SHRSOHZKRXVHFRPSXWHUVVLPSO\UXQSURJUDPV7RWKHPDSURJUDPLVDFDQQHGVRIWZDUHSDFNDJH3HRSOHZKROLNHWRZULWHSURJUDPVOLNHWREHDEOHWRVKDSHWKHEHKDYLRURIWKHPDFKLQHWKHZD\PHWDOVPLWKVVKDSHPHWDOLQWRXVHIXOPHFKDQLFDOWRROV$PRQJVWDOOWKHSURJUDPVRQDFRPSXWHUWKHUHLVRQHSURJUDPZKLFKUXQVWKHPDFKLQHWKHRSHUDWLQJV\VWHP,WFRQWUROVHYHU\WKLQJ,WRIIHUVVHUYLFHVWRWKHRWKHUSURJUDPV0RVWRSHUDWLQJV\VWHPVIRUFHSURJUDPPHUVWROHDYHWKHLUSURJUDPPLQJVNLOOVEHKLQGDVWKH\DSSURDFKWKHRSHUDWLQJV\VWHPDQGWRXVHLWDVWKH\ZRXOGDFDQQHGVRIWZDUHSDFNDJH7KDWLVEHFDXVHLWVVRXUFHFRGHLVDVHFUHW/LQX[SRUWHQGVWKHHQGRIVHFUHWFRGHLQFRPSXWLQJ%HFDXVHWKH/LQX[VRXUFHFRGHDQGDFRPSLOHUIRULWDUHULJKWWKHUHRQWKHFRPSXWHUDORQJZLWKWKHRWKHUVRXUFHFRGHLWDOORZVSURJUDPPHUVWRZRUNZLWKWKHRSHUDWLQJV\VWHPDVWKH\GRZLWKSURJUDPVWKH\KDYHZULWWHQ2SHUDWLQJV\VWHPVZHUHRQFHZULWWHQE\SURJUDPPHUVHPSOR\HGE\FRPSXWHUPDQXIDFWXUHUV5HYROXWLRQVLQKDUGZDUHSURGXFHGFRUUHVSRQGLQJUHYROXWLRQVLQWKHVRIWZDUH:KHQ/LQXV7RUYDOGVUHZURWH/LQX[VRWKDWLWZRXOGUXQRQWKH$OSKDDUFKLWHFWXUHKLVJRDOZDVQRWWRLQFUHDVHLWVKDUGZDUHEDVHIURPRQHSODWIRUPWRWZREXWWRPDNH/LQX[SODWIRUPLQGHSHQGHQW7KHVXEVHTXHQWSRUWVRI/LQX[WRHYHU\WKLQJIURPD6SDUFWRD3RZHU3&GHPRQVWUDWHWKHVXFFHVVRIKLVUHZULWH7KHFKLHIYDOXHRILWLVWKDWLWSURYLGHVXVZLWKFRQILGHQFHWKDW/LQX[LVKHUHWRVWD\:HGRQWKDYHWRIHDUD3RZHU3&UHYROXWLRQFRPLQJDORQJDQGIRUFLQJXVWRGXPSDOORIRXUROGVRIWZDUH$VVHPEO\FRGHRQWKHRWKHUKDQGLVLQWULQVLFDOO\SODWIRUPGHSHQGHQWDQGLVMXVWLILDEO\UHJDUGHGZLWKFDXWLRQIRUMXVWWKLVUHDVRQ,WZLOOKDYHWREHUHGRQHZKHQWKHQH[WKDUGZDUHUHYROXWLRQWDNHVSODFH)XUWKHUPRUHSHRSOHZKRFRPSDUHWKHPDFKLQHODQJXDJHRIWKHZLWKRWKHUPDFKLQHODQJXDJHVERWKUHDODQGLGHDOLQHYLWDEO\HQGXSUHJDUGLQJWKHODQJXDJHDVDKLVWRULFDODFFLGHQW2QWKHRWKHUKDQGWKHJHQHWLFFRGHLVVRPHWLPHVUHIHUUHGWRDVDIUR]HQDFFLGHQW7KHWHUPLVEDVHGRQWKHLGHDWKDWWKHJHQHWLFFRGHFHDVHGLWVHYROXWLRQZKHQWKHQXPEHURISURWHLQVZKRVHFRGHZRXOGEHEURNHQE\DPXWDWLRQLQWKHJHQHWLFFRGHEHFDPHVRODUJHWKDWVXFKPXWDWLRQVEHFDPHOHWKDODQGVRWKHFRGHEHFDPHIL[HG,WUHPDLQVWREHVHHQZKHWKHUPDFKLQHFRGHKDVEHHQIUR]HQLQWRSODFHE\WKHVL]HRILWVVRIWZDUHEDVH7KHWKUHDWRID3RZHU3&UHYROXWLRQKDVSDVVHG2QWKHRWKHUKDQGPDQ\/LQX[HQWKXVLDVWVDQWLFLSDWHDQ$OSKDUHYROXWLRQ%XWWKH$OSKDUHYROXWLRQKDVQRWKDSSHQHGDQGLWPD\QRWKDSSHQ7KHODQJXDJHKDVEHHQDURXQGIRUDORQJWLPH:LWKPDQ\5,6&PDFKLQHVQRZHPXODWLQJWKHDUFKLWHFWXUHLVQWLWWLPHWRFRQVLGHUSURJUDPPLQJLQDVVHPEO\ODQJXDJH"$VVHPEO\ODQJXDJHLVPRUHZRUNEXWLWKDVLWVDGYDQWDJHV$YHU\QLFHIHDWXUHRIDVVHPEO\ODQJXDJHFRGHZKLFKLWVKDUHVZLWK/LQX[LWVHOILQFLGHQWDOO\LVWKDWIURPDFUDVVSHUIRUPDQFHVWDQGSRLQWLWIXQFWLRQVEHDXWLIXOO\5HO\LQJRQFRPSLOHUVWRSURGXFHJRRGFRGHLVXVXDOO\MXVWLILDEOHDVDWLPHVDYLQJPHDVXUH%XWWRJHWWKHEHVWSRVVLEOHFRGHWKHUHLVVWLOOQREHWWHURSWLRQWKDQWRXVHDVVHPEO\ODQJXDJH:KHQKLJKOHYHOODQJXDJHVZHUHVWLOODQRYHOW\DQGUHIHUUHGWRDVDXWRPDWLFSURJUDPPLQJPDQ\SURJUDPPHUVZHUHJUHDWO\RIIHQGHGE\WKHP7KH\ZHUHFRQYLQFHGWKDWQRFRPSLOHUSURJUDPFRXOGZULWHFRGHDVZHOODVWKH\FRXOG7KH\ZHUHULJKWRIFRXUVH&RPSLOHUVSURGXFHFKHDSHUFRGHEXWQRWEHWWHUFRGH7RJHWWKHIXOOPHDVXUHRIVSHHGDQGJUDFHWKDWDPDFKLQHLVFDSDEOHRIWKHUHLVQRVXEVWLWXWHIRUDVVHPEO\ODQJXDJH)XUWKHUPRUHHYHQLIWKH$OSKDUHYROXWLRQDUULYHVRQVFKHGXOHWRPRUURZWKHUHZLOOUHPDLQLQWKHZRUOGPLOOLRQVRISURFHVVRUVUXQQLQJDODQJXDJHZKLFKZRUNEHDXWLIXOO\DQGQHHGWREHSXWWRDVRFLDOO\UHVSRQVLEOHXVH&RPSXWHUVFDQEHSURJUDPPHGWRUHSRUWRQRXUEX\LQJKDELWVRUWRVHQGRIIQXFOHDUPLVVLOHV%XWWKH\FDQDOVREHSURJUDPPHGWRFRPPXQLFDWHZLWKSULYDF\RUWRVXSSRUWPHGLFDOUHVHDUFK$VVLOLFRQVPLWKVRXUMRELVWRVKDSHWKHEHKDYLRURIWKHPDFKLQHWRZDUGVDKXPDQDJHQGD7KLVERRNDVVXPHVWKDWWKHUHDGHUKDVVRPHNQRZOHGJHRI&EXWLWPDNHVQRRWKHUDVVXPSWLRQV6WDUUHGVHFWLRQVRIWKHERRNDUHQRWQHHGHGVXEVHTXHQWO\DQGPD\EHVNLSSHGZKHQWKH\DUHQRWRILQWULQVLFLQWHUHVW,RZHWKDQNVWR'DYH)HOWHUIRUZULWLQJDSDUWLDOVLPXODWRURIWKH7KLVVLPXODWRUJRWPHVWDUWHGZULWLQJ(GOLQDV*LYHQDEDVHILYHDULWKPHWLFSUREOHPZHKDYHDFKRLFHRIPHWKRGV:HFDQFRQYHUWWKHVHQXPEHUVLQWREDVHWHQGRWKHDULWKPHWLFDQGWKHQFRQYHUWEDFNWREDVHILYH2UZHFDQGRWKHSUREOHPZLWKRXWDQ\FRQYHUVLRQVXVLQJWKHQDWLYHDULWKPHWLF7KHILUVWPHWKRGLVHDVLHUDWILUVWVLQFHZHDUHXVHGWREDVHWHQ7KLQNLQJLQWHUPVRIPRQHWDU\XQLWVLVIRXUTXDUWHUVWZRQLFNHOVDQGWKUHHSHQQLHVLHFHQWVLQRUGLQDU\EDVHWHQ6LPLODUO\LVFHQWVLQRUGLQDU\EDVHWHQ6RZHFDQGRWKHDGGLWLRQXVLQJRUGLQDU\EDVHWHQDULWKPHWLF2QHKXQGUHGWKLUWHHQSOXVLVRU7RFRQYHUWEDFNVWDUWE\WDNLQJRXWRQHELJGROODUDGROODUDQGDTXDUWHUDQGZHKDYHFHQWVOHIW7KLVLVWKUHHTXDUWHUVRQHQLFNHODQGWZRSHQQLHV6RWKHDQVZHULV7DEOH3HQWLPDO6\VWHP3ODFH9DOXHVVVV3HQWLPDO'HFLPDO%LQDU\6XEWUDFWLRQ6XSSRVHZHZDQWWRVXEWUDFWILYHIURPWZHOYH,WUHTXLUHVERUURZLQJ'RLQJWKHVXEWUDFWLRQLQWKHILUVWFROXPQ\LHOGV,QWKHWZRVFROXPQZHVXEWUDFW]HURIURPRQH7KHIRXUVFROXPQUHTXLUHVDQRWKHUERUURZLQJ7KLVLVKRZWRVXEWUDFWILYHIURPWZHOYHLQELQDU\%XWLWLVQRWDWDOOKRZFRPSXWHUVGRWKLVDULWKPHWLF&RPSXWHUVGRVXEWUDFWLRQVXVLQJQHJDWLYHVOLNHWKLV6LQFHWKHPHWKRGWKDWZHOHDUQHGLQVFKRROIRUDGGLQJDQHJDWLYHZDVWRFRQYHUWLWWRDVXEWUDFWLRQWKLVPLJKWVHHPWREHDGLVWLQFWLRQZLWKRXWDGLIIHUHQFH+RZHYHUFRPSXWHUVXVHDGLIIHUHQWUHSUHVHQWDWLRQIRUQHJDWLYHVWKDQMXVWVWLFNLQJDPLQXVVLJQLQIURQWRIWKHQXPEHUVRWKHUHUHDOO\LVDGLIIHUHQFH5HSUHVHQWDWLRQRIQHJDWLYHQXPEHUVLVGLVFXVVHGLQFKDSWHUVHFWLRQ/LQX[$VVHPEO\/DQJXDJH3URJUDPPLQJ)URQW0DWWHU7DEOHRI&RQWHQWV$ERXWWKH$XWKRU/LQX[$VVHPEO\/DQJXDJH3URJUDPPLQJ%2% 1( 9( /1 3XEOLVKHU3UHQWLFH+DOO375)LUVW(GLWLRQ-XO\,6 %1 SDJHV0DVWHU[DVVHPEO\ODQJXDJHIURPD/LQX[SHUVSHFWLYH(VVHQWLDOLQIRUPDWLRQIRUFUHDWLQJ/LQX[GHYLFHGULYHUV+RZ/LQX[ZRUNVXQGHUWKHKRRG&'520LQFOXGHVHGOLQDVWKH/LQX[[KDQGVRQDVVHPEOHUGHYHORSPHQWVLPXODWRU/LQX[$VVHPEO\/DQJXDJH3URJUDPPLQJLVWKHILUVW/LQX[FHQWHUHGJXLGHWR[DVVHPEO\ODQJXDJH,Q/LQX[$VVHPEO\/DQJXDJH3URJUDPPLQJ%RE1HYHOQH[SODLQVDOOWKHNH\IHDWXUHVRI[DVVHPEO\ODQJXDJHLQWKHFRQWH[WRIWKH/LQX[RSHUDWLQJV\VWHPDQGWKH&ODQJXDJH7KHERRN¶VVWHSE\VWHSRQHFRQFHSWDWDWLPHFRYHUDJHZLOOKHOSDQ\KDUGZDUHSURJUDPPHUPRYHWR/LQX[DQGPDVWHUHVVHQWLDOVNLOOVIRU/LQX[GHYLFHGULYHUGHYHORSPHQW<RXZRQ¶WMXVWOHDUQQHZ[DVVHPEO\ODQJXDJHVNLOOV\RX¶OODOVRJDLQSRZHUIXOXQGHUWKHKRRGLQVLJKWLQWRKRZ/LQX[ZRUNV%RQXV&'520LQFOXGHVHGOLQDVWKH/LQX[EDVHG[LQWHUDFWLYHDVVHPEOHUGHYHORSPHQWVLPXODWRU7KLVLV/LQX[[DVVHPEO\ODQJXDJHSURJUDPPLQJIURPVWDUWWRILQLVK3ODFHKROGLQJQXPHUDWLRQ/RJLFFLUFXLWV&RPSXWDWLRQ7KHIRXUILHOGIRUPDW0DFKLQHODQJXDJH0HPRU\7KHVWDFN/LQX[XVHUSURJUDPV 1$ 60'26SURJUDPV,QWHUUXSWV%LWPDQLSXODWLRQV'HYLFHGULYHUV$QGPRUH%LWYV%LW&RGH7KH%LW5HJLVWHUV/LQX[)LOHV0(025<%\WH'DWD:LGWK$GGUHVVHVLQ%UDFNHWV2SHUDQG6L]H$PELJXLW\/DEHOV,PPHGLDWH6WRUDJH7+(67$&.3XVKDQG3RS2SHUDWLRQV6XESURJUDPV3DUDPHWHU3DVVLQJ5HFXUVLRQ/ ,18 ;86(5352*5$060XOWLWDVNLQJ3DJLQJ$GGUHVV7UDQVODWLRQ3URJUDP6HJPHQWV2WKHU'DWD6HJPHQWV,23URWHFWLRQ([HFXWDEOH)LOHVLQ(/))RUPDW2EMHFW)LOHVLQ(/))RUPDW ,17 (5583763ROOLQJ([WHUQDO,QWHUUXSWV,6$$UFKLWHFWXUH,QWHUQDODQG6RIWZDUH,QWHUUXSWV6\VWHP&DOOV3ULYLOHJH/HYHOV&RQWURO7UDQVIHU6FKHGXOLQJ%,70 $1, 38/$7, 216 %LWZLVH/RJLF2SHUDWLRQV7KH $1& apos;25 12 7DQG;25&RPPDQGV%LW6HWWLQJDQG7HVWLQJ6KLIW,QVWUXFWLRQV'(9,&('5,9(56'HYLFH,QGHSHQGHQW)LOHV'HYLFHVDV)LOHV0RUVH&RGH6SHDNHU'ULYHU6HULDO3RUW'LJLWL]HU'ULYHU'26352*5$065HDO0RGH6HJPHQWDWLRQ(GOLQDV(QYLURQPHQW9DULDEOHV)L[HG0HPRU\$UHDV5HDO0RGH,QWHUUXSWV&KHFNLQJ'260HPRU\/ ,18 ;%2277,0(352*5$06&KDQJLQJWR3URWHFWHG0RGH3URWHFWHG0RGH6HJPHQWDWLRQ6HWWLQJ8SWKH*OREDO'HVFULSWRU7DEOH&ORVLQJ35()$&($VVHPEO\ODQJXDJHLVODQJXDJHZKLFKJLYHVWKHSURJUDPPHUGLUHFWFRQWURORYHUWKHFRPSXWHU7KDWLVZKDWDSSHDOVWRSHRSOHDERXWDVVHPEO\ODQJXDJH,WLVOLNHXVLQJDVWLFNVKLIW3URJUDPPLQJZLWKRWKHUODQJXDJHVKLJKOHYHOODQJXDJHVLVOLNHXVLQJDQDXWRPDWLFOLQX[ER[XQ]LSD/QDVPV]LSDIWHUFRS\LQJLWWRDVXLWDEOHGLUHFWRU\7REXLOGLW\RXFDQWKHQFRS\WKHDSSURSULDWHPDNHILOHOLQX[ER[FSPDNHILOHXQ[0DNHILOHDQGUXQOLQX[ER[PDNH2WKHU$VVHPEOHUV0$60DQG7XUER$VVHPEOHUDUHDVVHPEOHUVWKDWKDYHEHHQYHU\ZLGHO\XVHGLQFRQQHFWLRQZLWK'267KHIDFWWKDW:LQGRZVLVQRWVRHDV\WRZRUNZLWKXVLQJDVVHPEO\ODQJXDJHKDVOHGWRDGHFUHDVHLQWKHSRSXODULW\RIWKHVHDVVHPEOHUV0DQ\SHRSOHKDYHWKHLPSUHVVLRQWKDW/LQX[LVQRWSDUWLFXODUO\DVVHPEOHUIULHQGO\HLWKHU7KLVLPSUHVVLRQLVSDUWO\EDVHGRQWKHYLHZRIDVVHPEO\ODQJXDJHWKDW\RXJHWZRUNLQJZLWKJFF7KRVHDFFXVWRPHGWR,QWHOV\QWD[PD\XQGHUVWDQGDEO\ILQGWKH$77V\QWD[DZNZDUG:RUVHZKHQDVVHPEO\ODQJXDJHLQVWUXFWLRQVDUHLQVHUWHGLQWR&FRGHWKHTXRWDWLRQPDUNVUHTXLUHGE\JFFDQGWKHOLQHMXPEOLQJWKDWRFFXUVDUHSUHWW\UHSHOOHQW,KRSHWKDWE\FKDSWHUUHDGHUVZLOOEHSHUVXDGHGWKDWLQWHUDFWLQJZLWK/LQX[XVLQJDVVHPEO\ODQJXDJHFDQEHFOHDQDQGQHDW7KHUHDUHDIHZRWKHUDVVHPEOHUVDURXQG$EULHIGLVFXVVLRQRIWKHPFDQEHIRXQGLQDQ$VVHPEO\+2:72DWWKH/LQX['RFXPHQWDWLRQ3URMHFWV:HEVLWHZZZOLQX[GRFRUJ+2:72)XUWKHU5HDGLQJ2SHQ6RXUFHV9RLFHVIURPWKH2SHQ6RXUFH5HYROXWLRQ&KULV'L%RQDHWDO25HLOO\$4XDUWHU&HQWXU\RI8QL[3HWHU6DOXV$GGLVRQ:HVOH\&KDSWHU3/$&(+2/' ,1* 18 0(5$7, 21 7KH (1, $&GLGQRWXVHWKHELQDU\V\VWHP,WVDULWKPHWLFSURFHVVRUXVHGYDFXXPWXEHVZLUHGWRJHWKHULQWRULQJVZKLFKZRUNHGOLNHROGGHVNWRSDGGLQJPDFKLQHZKHHOV7KHVHZHUHEDVHWHQFRQWUDSWLRQV6LQFHWKHQKRZHYHUDOOHOHFWURQLFFRPSXWHUVKDYHGRQHWKHLUDULWKPHWLFXVLQJWKHELQDU\V\VWHPEDVHWZR&RQVHTXHQWO\GHVFULSWLRQVRIFRPSXWHUDULWKPHWLFDUHFXVWRPDULO\H[SUHVVHGXVLQJWKHELQDU\V\VWHPRUUHODWHGV\VWHPVVXFKDVKH[DGHFLPDOEDVHVL[WHHQRURFWDOEDVHHLJKW$QXQGHUVWDQGLQJRIWKHVHQXPEHUV\VWHPVLVHVVHQWLDO5HDGHUVDOUHDG\IDPLOLDUZLWKWKHPPD\SUHIHUWRVNLSWKLVFKDSWHU7KH'HFLPDODQG3HQWLPDO6\VWHPV%HIRUHWKHLQYHQWLRQRISODFHKROGLQJGHFLPDOQRWDWLRQLQWKH(DVWSUREDEO\LQ,QGLDRU&KLQDV\VWHPVRIQRWDWLRQEXLOWDURXQGSRZHUVRIWHQZKLFKZHUHQRWSODFHKROGLQJV\VWHPVZHUHFRPPRQ7KHV\VWHPXVHGE\$UFKLPHGHVIRUH[DPSOHLVVKRZQLQ7DEOH,QWKLVV\VWHP63$UHSUHVHQWVWKHQXPEHU*UHHNOHWWHUVRIFRXUVHQRW/DWLQOHWWHUVZHUHXVHG7KHPRVWDSSDUHQWGLVDGYDQWDJHRIWKLVNLQGRIV\VWHPLVFRPSXWDWLRQDO7KHQRWDWLRQLVQRKHOSDWDOOLQVHHLQJWKDW7DEOH1RQ3ODFHKROGLQJ'HFLPDO6\VWHP$-6%.7&/8'09( 1 :)2*3E\3UHQWLFH+DOO3XEOLVKHGE\3UHQWLFH+DOO3753UHQWLFH+DOO,QF8SSHU6DGGOH5LYHU 1- 3UHQWLFH+DOOERRNVDUHZLGHO\XVHGE\FRUSRUDWLRQVDQGJRYHUQPHQWDJHQFLHVIRUWUDLQLQJPDUNHWLQJDQGUHVDOH7KHSXEOLVKHURIIHUVGLVFRXQWVRQWKLVERRNZKHQRUGHUHGLQEXONTXDQWLWLHV)RUPRUHLQIRUPDWLRQFRQWDFW&RUSRUDWH6DOHV'HSDUWPHQW3KRQH)D[(PDLOFRUSVDOHV#SUHQKDOOFRPRUZULWH3UHQWLFH+DOO375&RUS6DOHV'HSW2QH/DNH6WUHHW8SSHU6DGGOH5LYHU 1- $OOSURGXFWVRUVHUYLFHVPHQWLRQHGLQWKLVERRNDUHWKHWUDGHPDUNVRUVHUYLFHPDUNVRIWKHLUUHVSHFWLYHFRPSDQLHVRURUJDQL]DWLRQV6FUHHQVKRWVUHSULQWHGE\SHUPLVVLRQIURP0LFURVRIW&RUSRUDWLRQ$OOULJKWVUHVHUYHG1RSDUWRIWKLVERRNPD\EHUHSURGXFHGLQDQ\IRUPRUE\DQ\PHDQVZLWKRXWSHUPLVVLRQLQZULWLQJIURPWKHSXEOLVKHU3ULQWHGLQWKH8QLWHG6WDWHVRI$PHULFD3UHQWLFH+DOO,QWHUQDWLRQDO8./LPLWHG/RQGRQ3UHQWLFH+DOORI$XVWUDOLD3W\/LPLWHG6\GQH\3UHQWLFH+DOO&DQDGD,QF7RURQWR3UHQWLFH+DOO+LVSDQRDPHULFDQD6$0H[LFR3UHQWLFH+DOORI,QGLD3ULYDWH/LPLWHG1HZ'HOKL3UHQWLFH+DOORI-DSDQ,QF7RN\R3UHQWLFH+DOO$VLD3WH/WG(GLWRUD3UHQWLFH+DOOGR%UDVLO/WGD5LRGH-DQHLUR&UHGLWV(GLWRULDOSURGXFWLRQVXSHUYLVLRQ9LQFHQW-DQRVNL$FTXLVLWLRQVHGLWRU0LOHV:LOOLDPV0DUNHWLQJPDQDJHU.DWH+DUJHWW0DQXIDFWXULQJPDQDJHU,RZHWKDQNVWR%UXFH*UDQW,W]LFN9DWQLFNDQG.DWH/$UPDQGIRUZRUNLQJZLWKPHRQWKHVFDOH[GHYLFHGULYHU,RZHWKDQNVWRWKHPDQ\VWXGHQWVZKRKDYHIRXQGHUURUVLQHDUOLHUGUDIWVRIWKLVERRN,RZHVSHFLDOWKDQNVWR-RH%LVVHOO6FRWW+DZNLQV-DVRQ.UROO1DQF\<RVKLPXUDDQG-RDQQH<XUFKDNIRUWKHLUFDUHIXOGHWDLOHGDQGWKRXJKWIXOFULWLWLVP0DQ\HUURUVXQGRXEWHGO\UHPDLQ7RWKRVHUHDGHUVZKRQRWLI\PHRIWKHPDWQHYHOQ#FVZLGHQHUHGX,VKDOOEHJUDWHIXO/LQX['ULYHQ6HULDO3RUW,QSXW'HYLFH&KDSWHU ,17 52'8&7, 21 ,QWKLVFKDSWHUVRPHQHFHVVDU\WRROVDQGEDFNJURXQGLGHDVDUHUHYLHZHG7KH)HWFK([HFXWH&\FOH2QHRIWKHHDUOLHVWHOHFWURQLFFRPSXWHUVZDVWKH (1, $&:KHQLWZDVILUVWEXLOWLWFRXOGQRWVWRUHSURJUDPV(DFKQHZFRPSXWDWLRQUHTXLUHGPRYLQJSOXJVDQGMXPSHUFDEOHV1RZKRZHYHUQHDUO\DOOFRPSXWHUVVWRUHSURJUDPV)RUWKHVHFRPSXWHUVGRLQJDFRPSXWDWLRQPHDQVUXQQLQJDSURJUDP7KHSODFHZKHUHWKHSURJUDPLVVWRUHGLVFDOOHGPHPRU\7KHSDUWRIWKHPDFKLQHZKLFKGRHVWKHFRPSXWDWLRQLVFDOOHGWKHSURFHVVRU&RPSXWHUSURJUDPVJHQHUDOO\WDNHWKHIRUPRIDOLVWRILQVWUXFWLRQV&RPSXWDWLRQLVSHUIRUPHGE\WKHSURFHVVRUXVLQJWKHIHWFKH[HFXWHF\FOH7KHIHWFKH[HFXWHF\FOHFRQVLVWVRIDUHSHDWHGSURFHVVWKDWLQFOXGHVWKHVHVWHSV6WHS7KHSURFHVVRUIHWFKHVDQLQVWUXFWLRQIURPPHPRU\6WHS7KHSURFHVVRUH[HFXWHVWKHLQVWUXFWLRQ6WHS$FRPSLOHULVDSURJUDPZKLFKWUDQVODWHVDSURJUDPVXFKDVD&ODQJXDJHSURJUDPLQWRDPDFKLQHFRGHSURJUDPWKDWFDQEHVWRUHGLQDFRPSXWHUVPHPRU\DQGUXQ$SURJUDPWKDWFDQEHVWRUHGLQPHPRU\DQGUXQLVFDOOHGDQH[HFXWDEOHILOHRUVRPHWLPHVMXVWDQH[HFXWDEOH7KHJQX&FRPSLOHUZRUNVLQVWDJHV6HH)LJXUH7RFRPSLOHDSURJUDPVXFKDVSURJFZLWKWKHJQXFRPSLOHURQHFDQHQWHUWKHFRPPDQG)LJXUH6WDJHVRI*QX&&RPSLODWLRQOLQX[ER[JFFSURJF7KLVFRPPDQGWDNHVWKHWUDQVODWLRQWKURXJKDOOWKHVWDJHVDQGSURGXFHVDQH[HFXWDEOHILOHFDOOHGDRXW7RVWRSDWDQHDUOLHUVWDJHRQHFDQDGGDVZLWFKWRWKHJFFFRPPDQGOLQH)RUH[DPSOHWRSURGXFHDQDVVHPEO\FRGHILOHWKH6VZLWFKXSSHUFDVHLVXVHG(QWHULQJWKHFRPPDQGOLQX[ER[JFF6SURJF\LHOGVDQDVVHPEO\ODQJXDJHILOHSURJV7RILQLVKWKHFRPSLODWLRQWKHJFFFRPPDQGPD\EHXVHGRQWKHVILOHOLQX[ER[JFFSURJV7KH(GOLQDV$VVHPEOHU7KHDVVHPEO\ODQJXDJHLQWKHVILOHVSURGXFHGE\WKHJQXFRPSLOHULVGLIIHUHQWIURPWKHZLGHO\XVHG,QWHODVVHPEO\ODQJXDJHIRUWKH[SURFHVVRUV(GOLQDVDVVHPEO\ODQJXDJHLVHVVHQWLDOO\WKH,QWHODVVHPEO\ODQJXDJH,WVREMHFWFRGHILOHVUXQXQGHU[/LQX[(GOLQDVLVDQLQWHUDFWLYHHQYLURQPHQWFRQVLVWLQJRIDQHGLWRUDQDVVHPEOHUDQGDVLPXODWRU(GLWLQJ6RXUFHFRGHHGLWLQJXVHVFRPPDQGVERUURZHGIURP('/ ,1 D'26HGLWRU$PRQJWKHFRPPDQGVDUHLIRULQVHUWGIRUGHOHWHFIRUFKDQJHHIRUH[LWTIRUTXLWDQGKIRUKHOS&RPPDQGVDIIHFWWKHFXUUHQWOLQHZKLFKLVWKHOLQHWKDWKDVWKHDVWHULVN7KHDVWHULVNLVPRYHGXVLQJWKHDUURZNH\V(QWHUHGOLQHVDUHFKHFNHGE\WKHDVVHPEOHUIRUV\QWD[HUURUV$VVHPEOLQJ&RGHLVDVVHPEOHGDVLWLVHQWHUHGRUORDGHG$VVHPEO\FRGHDSSHDUVLQWKHGHIDXOWZLQGRZRQWKHULJKWVLGHRIWKHVFUHHQ$VVHPEOHGFRGHFDQEHVDYHGDWDQ\WLPHXVLQJWKHRFRPPDQG,QWHUSUHWLQJ&RGHFDQEHH[HFXWHGHLWKHUIURPDORDGHGSURJUDPRUIURPDFRPPDQGSURPSWEHORZDQGDOOUHSUHVHQWHVVHQWLDOO\WKHVDPHEDVLFIDFW%XWWKLVLVRQO\DSUREOHPZKHQQRWDWLRQVWKHPVHOYHVDUHXVHGWRGRFDOFXODWLRQVDVZHGRZLWKSHQFLODQGSDSHU:KHQFDOFXODWLRQVDUHGRQHZLWKSK\VLFDOWRNHQVVXFKDVEHDGVRQDQDEDFXVRUZLWKSHEEOHVWKLVLVQRORQJHUDSUREOHP,QIDFWWKLVNLQGRIQRWDWLRQPD\KDYHVHUYHGWRSUHYHQWUHDGLQJHUURUV$Q\RQHZKRKDVUHFHLYHGZKHQFDVKLQJDFKHFNZLOOXQGHUVWDQGWKLVSRLQW%XWZKHQWKHQRWDWLRQVWKHPVHOYHVDUHXVHGWRGRWKHFDOFXODWLRQVLWLVEHWWHUWRKDYHDQRWDWLRQDOV\VWHPZKLFKEULQJVRXWVXFKEDVLFVLPLODULWLHVDVWKHIROORZLQJ3ODFHKROGLQJV\VWHPVGRWKLV3ODFHKROGLQJQXPHUDOVVRPHWLPHVOHVVV\PSDWKHWLFDOO\UHIHUUHGWRDVKHDWKHQF\SKHUVZHUHSRSXODUL]HGLQ(XURSHDURXQGWKH\HDUE\/HRQDUGRRI3LVDDOVRNQRZQDV)LERQDFFL)LERQDFFLZDVSUHVXPDEO\UHO\LQJRQDZRUNZULWWHQLQ$UDELFE\DO.KZkUL]PLZKRVHQDPHZHVHHLQWKHZRUGDOJRULWKPDURXQGWKH\HDULQ%DJKGDG/LNHDOO(XURSHDQVFKRODUVRIWKHGD\)LERQDFFLZDVQHFHVVDULO\YHUVHGLQ$UDELF$OOWKHQXPHUDWLRQV\VWHPVGLVFXVVHGLQWKLVERRNLQFOXGLQJWKHGHFLPDOV\VWHPZHXVHHYHU\GD\DUHSODFHKROGLQJV\VWHPV%HIRUHSURFHHGLQJWRQRQGHFLPDOV\VWHPVOHWXVFRQVLGHUWKHUROHWKDWEDVHWHQSOD\VLQWKH86PRQHWDU\V\VWHP3XUHO\'HFLPDO0RQH\7KHFXUUHQW86PRQHWDU\V\VWHPZDVDGRSWHGIROORZLQJWKHLQWURGXFWLRQRIWKHPHWULFV\VWHPLQ)UDQFHLQWKH5HYROXWLRQRI7KHSXUSRVHRIERWKRIWKHVHH[WHQVLRQVRIWKHGHFLPDOV\VWHPZDVWRVLPSOLI\FDOFXODWLRQVE\EULQJLQJPRQHWDU\DQGPHDVXUHPHQWXQLWVLQWRKDUPRQ\ZLWKWKHGHFLPDOV\VWHPXVHGWRUHSUHVHQWQXPEHUV7REULQJWKHDOLJQPHQWRIWKHPRQHWDU\DQGQXPHUDOV\VWHPVLQWRVKDUSUHOLHIOHWXVLPDJLQHDSDUHGGRZQYHUVLRQRIWKH86PRQHWDU\V\VWHPWKDWLQFOXGHVRQO\SHQQLHVGLPHVELOOVGROODUELOOVGROODUELOOVGROODUELOOVDQGVRRQGLPH ... $OH[LV+H\GW&RYHUGHVLJQGLUHFWRU-HUU\9RWWD&RYHUGHVLJQHU1LQD6FXGHUL7KLVERRNLVGHGLFDWHGWRDOOLPSULVRQHG3ORZVKDUHVDFWLYLVWVIRUDWWHPSWLQJWRGRZLWKLURQZKDWDOVRQHHGVWREHGRQHZLWKVLOLFRQ/LQX[$VVHPEO\/DQJXDJH3URJUDPPLQJ35()$&( ,17 52'8&7, 21 7KH)HWFK([HFXWH&\FOH7KH/LQX[2SHUDWLQJ6\VWHP7KH*QX&&RPSLOHU7KH(GOLQDV$VVHPEOHU 1$ 602WKHU$VVHPEOHUV3/$&(+2/' ,1* 18 0(5$7, 21 7KH'HFLPDODQG3HQWLPDO6\VWHPV3HQWLPDO$ULWKPHWLF&RQYHUVLRQWR3HQWLPDO7KH%LQDU\6\VWHP0HPRU\DVD5HFWDQJOHRI%LWV7KH+H[DGHFLPDO6\VWHP%DVH'LVWLQJXLVKLQJ1RWDWLRQV)UDFWLRQVLQ2WKHU%DVHV&RQYHUWLQJ)UDFWLRQV/2*,&&,5&8,76 $1& apos;&20387$7, 21 7KH 12 7*DWH%RROHDQ2SHUDWRUV/RJLF*DWHV$GGLWLRQ&LUFXLWV6HTXHQWLDO&LUFXLWV1HJDWLYH1XPEHU5HSUHVHQWDWLRQ6XEWUDFWLRQ8VLQJ1HJDWLRQ3ODFHKROGLQJ7ZRV&RPSOHPHQW0HPRU\&LUFXLWV[*HQHUDO5HJLVWHUVDQGWKHLU$QFHVWU\7KH029&RPPDQG$GGLWLRQDQG6XEWUDFWLRQ&RPPDQGV0XOWLSOLFDWLRQDQG'LYLVLRQ&RPPDQGV$66(0%/</ $1* 8$*(7KH)RXU)LHOG)RUPDW&RPSXWHUVIURPWKH&386WDQGSRLQW6LPSOH$VVHPEO\/DQJXDJH3URJUDPV$VVHPEOHU3URJUDPVZLWK-XPSV$VVHPEOHU3URJUDPVZLWK/RRSV6LJQHG&RPSDULVRQV8QVLJQHG&RPSDULVRQV/LQX[VILOHV0$&+ ,1( / $1* 8$*($VVHPEOLQJ6LPSOH3URJUDPV2SFRGH6SDFH7KH0RG50%\WH6SDFH2)«1DWLYH$GGLWLRQ8VLQJWKHQDWLYHDULWKPHWLFKRZHYHULVHDVLHUWKDQWKLVHVSHFLDOO\ZKHQWKHQXPEHUVJHWODUJHU$ERXWDOOWKDWVQHFHVVDU\WRUHPHPEHULVWKDWILYHRIDQ\RQHXQLWPXVWEHFDUULHGE\FRQYHUWLQJLWWRRQHRIWKHQH[WODUJHUXQLW7KHRQHVRUSHQQLHVFROXPQWRWDOVVHYHQZKLFKLVZKLFKLVFDUU\LVVL[ZKLFKLVZKLFKLVFDUU\$QGLVHLJKWZKLFKLVZKLFKLVFDUU\&OHDUO\WKHQDWLYHDULWKPHWLFLVHDVLHURQFHZHXQGHUVWDQGLW1DWLYH6XEWUDFWLRQ6XEWUDFWLRQUHTXLUHVERUURZLQJIRUH[DPSOHFRQYHUWLQJDTXDUWHUWRILYHQLFNHOVRUDQLFNHOWRILYHSHQQLHV7KHIROORZLQJVXEWUDFWLRQRIWKUHHIURPWHQLOOXVWUDWHVERUURZLQJ%RUURZDQLFNHOIURPWKHQLFNHOVFROXPQDQGFRQYHUWLWLQWRILYHSHQQLHV2QHQLFNHOLVOHIW6RZHJHWRQHQLFNHODQGWZRSHQQLHVOHIW&RQYHUVLRQWR3HQWLPDO6RPHWLPHVFRQYHUVLRQVDUHXQDYRLGDEOH)RUDFRPSXWHUWREHDEOHWRVWRUHDQXPEHULQELQDU\ZKLFKLVLQSXWLQGHFLPDODFRQYHUVLRQLVQHHGHG$OWKRXJKFRQYHUVLRQVFDQEHGRQHE\VHDUFKLQJIRUDUHSUHVHQWDWLRQZKLFKZRUNVWKHUHDUHPRUHHIILFLHQWPHWKRGV&RQVLGHUWKHFRQYHUVLRQRILQWREDVHILYH7RXQGHUVWDQGWKLVFRQYHUVLRQLWPD\KHOSWRORRNDWWKHDQVZHUEHIRUHZHVWDUW:HFDQVHHWKDWFDQEHIDFWRUHGRXWRIWKLVVXPH[FHSWIRUWKHDWWKHHQG%XWWKLVMXVWVD\VZKDWWKHTXRWLHQWDQGUHPDLQGHURIGLYLGHGE\DUH1RWLFHWKDWWKHUHPDLQGHULVRXUXQLWVGLJLW)XUWKHUPRUHZHFDQFDOFXODWHWKLVTXRWLHQWDQGUHPDLQGHUXVLQJEDVHWHQZKLFKLVZKDWZHKDYHDYDLODEOHZKHQZHVWDUWWKLVFRQYHUVLRQ:HKDYHLQEDVHWHQWKDWZKHUHDJDLQSHHNLQJDWWKHDQVZHUVKRZVXVWKDW7KHTXRWLHQWFRQWDLQVWKHLQIRUPDWLRQQHHGHGWRJHWDOOWKHRWKHUGLJLWV7KH\FDQEHREWDLQHGXVLQJPRUHGLYLVLRQV0DQ\SHRSOHZKRXVHFRPSXWHUVVLPSO\UXQSURJUDPV7RWKHPDSURJUDPLVDFDQQHGVRIWZDUHSDFNDJH3HRSOHZKROLNHWRZULWHSURJUDPVOLNHWREHDEOHWRVKDSHWKHEHKDYLRURIWKHPDFKLQHWKHZD\PHWDOVPLWKVVKDSHPHWDOLQWRXVHIXOPHFKDQLFDOWRROV$PRQJVWDOOWKHSURJUDPVRQDFRPSXWHUWKHUHLVRQHSURJUDPZKLFKUXQVWKHPDFKLQHWKHRSHUDWLQJV\VWHP,WFRQWUROVHYHU\WKLQJ,WRIIHUVVHUYLFHVWRWKHRWKHUSURJUDPV0RVWRSHUDWLQJV\VWHPVIRUFHSURJUDPPHUVWROHDYHWKHLUSURJUDPPLQJVNLOOVEHKLQGDVWKH\DSSURDFKWKHRSHUDWLQJV\VWHPDQGWRXVHLWDVWKH\ZRXOGDFDQQHGVRIWZDUHSDFNDJH7KDWLVEHFDXVHLWVVRXUFHFRGHLVDVHFUHW/LQX[SRUWHQGVWKHHQGRIVHFUHWFRGHLQFRPSXWLQJ%HFDXVHWKH/LQX[VRXUFHFRGHDQGDFRPSLOHUIRULWDUHULJKWWKHUHRQWKHFRPSXWHUDORQJZLWKWKHRWKHUVRXUFHFRGHLWDOORZVSURJUDPPHUVWRZRUNZLWKWKHRSHUDWLQJV\VWHPDVWKH\GRZLWKSURJUDPVWKH\KDYHZULWWHQ2SHUDWLQJV\VWHPVZHUHRQFHZULWWHQE\SURJUDPPHUVHPSOR\HGE\FRPSXWHUPDQXIDFWXUHUV5HYROXWLRQVLQKDUGZDUHSURGXFHGFRUUHVSRQGLQJUHYROXWLRQVLQWKHVRIWZDUH:KHQ/LQXV7RUYDOGVUHZURWH/LQX[VRWKDWLWZRXOGUXQRQWKH$OSKDDUFKLWHFWXUHKLVJRDOZDVQRWWRLQFUHDVHLWVKDUGZDUHEDVHIURPRQHSODWIRUPWRWZREXWWRPDNH/LQX[SODWIRUPLQGHSHQGHQW7KHVXEVHTXHQWSRUWVRI/LQX[WRHYHU\WKLQJIURPD6SDUFWRD3RZHU3&GHPRQVWUDWHWKHVXFFHVVRIKLVUHZULWH7KHFKLHIYDOXHRILWLVWKDWLWSURYLGHVXVZLWKFRQILGHQFHWKDW/LQX[LVKHUHWRVWD\:HGRQWKDYHWRIHDUD3RZHU3&UHYROXWLRQFRPLQJDORQJDQGIRUFLQJXVWRGXPSDOORIRXUROGVRIWZDUH$VVHPEO\FRGHRQWKHRWKHUKDQGLVLQWULQVLFDOO\SODWIRUPGHSHQGHQWDQGLVMXVWLILDEO\UHJDUGHGZLWKFDXWLRQIRUMXVWWKLVUHDVRQ,WZLOOKDYHWREHUHGRQHZKHQWKHQH[WKDUGZDUHUHYROXWLRQWDNHVSODFH)XUWKHUPRUHSHRSOHZKRFRPSDUHWKHPDFKLQHODQJXDJHRIWKHZLWKRWKHUPDFKLQHODQJXDJHVERWKUHDODQGLGHDOLQHYLWDEO\HQGXSUHJDUGLQJWKHODQJXDJHDVDKLVWRULFDODFFLGHQW2QWKHRWKHUKDQGWKHJHQHWLFFRGHLVVRPHWLPHVUHIHUUHGWRDVDIUR]HQDFFLGHQW7KHWHUPLVEDVHGRQWKHLGHDWKDWWKHJHQHWLFFRGHFHDVHGLWVHYROXWLRQZKHQWKHQXPEHURISURWHLQVZKRVHFRGHZRXOGEHEURNHQE\DPXWDWLRQLQWKHJHQHWLFFRGHEHFDPHVRODUJHWKDWVXFKPXWDWLRQVEHFDPHOHWKDODQGVRWKHFRGHEHFDPHIL[HG,WUHPDLQVWREHVHHQZKHWKHUPDFKLQHFRGHKDVEHHQIUR]HQLQWRSODFHE\WKHVL]HRILWVVRIWZDUHEDVH7KHWKUHDWRID3RZHU3&UHYROXWLRQKDVSDVVHG2QWKHRWKHUKDQGPDQ\/LQX[HQWKXVLDVWVDQWLFLSDWHDQ$OSKDUHYROXWLRQ%XWWKH$OSKDUHYROXWLRQKDVQRWKDSSHQHGDQGLWPD\QRWKDSSHQ7KHODQJXDJHKDVEHHQDURXQGIRUDORQJWLPH:LWKPDQ\5,6&PDFKLQHVQRZHPXODWLQJWKHDUFKLWHFWXUHLVQWLWWLPHWRFRQVLGHUSURJUDPPLQJLQDVVHPEO\ODQJXDJH"$VVHPEO\ODQJXDJHLVPRUHZRUNEXWLWKDVLWVDGYDQWDJHV$YHU\QLFHIHDWXUHRIDVVHPEO\ODQJXDJHFRGHZKLFKLWVKDUHVZLWK/LQX[LWVHOILQFLGHQWDOO\LVWKDWIURPDFUDVVSHUIRUPDQFHVWDQGSRLQWLWIXQFWLRQVEHDXWLIXOO\5HO\LQJRQFRPSLOHUVWRSURGXFHJRRGFRGHLVXVXDOO\MXVWLILDEOHDVDWLPHVDYLQJPHDVXUH%XWWRJHWWKHEHVWSRVVLEOHFRGHWKHUHLVVWLOOQREHWWHURSWLRQWKDQWRXVHDVVHPEO\ODQJXDJH:KHQKLJKOHYHOODQJXDJHVZHUHVWLOODQRYHOW\DQGUHIHUUHGWRDVDXWRPDWLFSURJUDPPLQJPDQ\SURJUDPPHUVZHUHJUHDWO\RIIHQGHGE\WKHP7KH\ZHUHFRQYLQFHGWKDWQRFRPSLOHUSURJUDPFRXOGZULWHFRGHDVZHOODVWKH\FRXOG7KH\ZHUHULJKWRIFRXUVH&RPSLOHUVSURGXFHFKHDSHUFRGHEXWQRWEHWWHUFRGH7RJHWWKHIXOOPHDVXUHRIVSHHGDQGJUDFHWKDWDPDFKLQHLVFDSDEOHRIWKHUHLVQRVXEVWLWXWHIRUDVVHPEO\ODQJXDJH)XUWKHUPRUHHYHQLIWKH$OSKDUHYROXWLRQDUULYHVRQVFKHGXOHWRPRUURZWKHUHZLOOUHPDLQLQWKHZRUOGPLOOLRQVRISURFHVVRUVUXQQLQJDODQJXDJHZKLFKZRUNEHDXWLIXOO\DQGQHHGWREHSXWWRDVRFLDOO\UHVSRQVLEOHXVH&RPSXWHUVFDQEHSURJUDPPHGWRUHSRUWRQRXUEX\LQJKDELWVRUWRVHQGRIIQXFOHDUPLVVLOHV%XWWKH\FDQDOVREHSURJUDPPHGWRFRPPXQLFDWHZLWKSULYDF\RUWRVXSSRUWPHGLFDOUHVHDUFK$VVLOLFRQVPLWKVRXUMRELVWRVKDSHWKHEHKDYLRURIWKHPDFKLQHWRZDUGVDKXPDQDJHQGD7KLVERRNDVVXPHVWKDWWKHUHDGHUKDVVRPHNQRZOHGJHRI&EXWLWPDNHVQRRWKHUDVVXPSWLRQV6WDUUHGVHFWLRQVRIWKHERRNDUHQRWQHHGHGVXEVHTXHQWO\DQGPD\EHVNLSSHGZKHQWKH\DUHQRWRILQWULQVLFLQWHUHVW,RZHWKDQNVWR'DYH)HOWHUIRUZULWLQJDSDUWLDOVLPXODWRURIWKH7KLVVLPXODWRUJRWPHVWDUWHGZULWLQJ(GOLQDV*LYHQDEDVHILYHDULWKPHWLFSUREOHPZHKDYHDFKRLFHRIPHWKRGV:HFDQFRQYHUWWKHVHQXPEHUVLQWREDVHWHQGRWKHDULWKPHWLFDQGWKHQFRQYHUWEDFNWREDVHILYH2UZHFDQGRWKHSUREOHPZLWKRXWDQ\FRQYHUVLRQVXVLQJWKHQDWLYHDULWKPHWLF7KHILUVWPHWKRGLVHDVLHUDWILUVWVLQFHZHDUHXVHGWREDVHWHQ7KLQNLQJLQWHUPVRIPRQHWDU\XQLWVLVIRXUTXDUWHUVWZRQLFNHOVDQGWKUHHSHQQLHVLHFHQWVLQRUGLQDU\EDVHWHQ6LPLODUO\LVFHQWVLQRUGLQDU\EDVHWHQ6RZHFDQGRWKHDGGLWLRQXVLQJRUGLQDU\EDVHWHQDULWKPHWLF2QHKXQGUHGWKLUWHHQSOXVLVRU7RFRQYHUWEDFNVWDUWE\WDNLQJRXWRQHELJGROODUDGROODUDQGDTXDUWHUDQGZHKDYHFHQWVOHIW7KLVLVWKUHHTXDUWHUVRQHQLFNHODQGWZRSHQQLHV6RWKHDQVZHULV7DEOH3HQWLPDO6\VWHP3ODFH9DOXHVVVV3HQWLPDO'HFLPDO%LQDU\6XEWUDFWLRQ6XSSRVHZHZDQWWRVXEWUDFWILYHIURPWZHOYH,WUHTXLUHVERUURZLQJ'RLQJWKHVXEWUDFWLRQLQWKHILUVWFROXPQ\LHOGV,QWKHWZRVFROXPQZHVXEWUDFW]HURIURPRQH7KHIRXUVFROXPQUHTXLUHVDQRWKHUERUURZLQJ7KLVLVKRZWRVXEWUDFWILYHIURPWZHOYHLQELQDU\%XWLWLVQRWDWDOOKRZFRPSXWHUVGRWKLVDULWKPHWLF&RPSXWHUVGRVXEWUDFWLRQVXVLQJQHJDWLYHVOLNHWKLV6LQFHWKHPHWKRGWKDWZHOHDUQHGLQVFKRROIRUDGGLQJDQHJDWLYHZDVWRFRQYHUWLWWRDVXEWUDFWLRQWKLVPLJKWVHHPWREHDGLVWLQFWLRQZLWKRXWDGLIIHUHQFH+RZHYHUFRPSXWHUVXVHDGLIIHUHQWUHSUHVHQWDWLRQIRUQHJDWLYHVWKDQMXVWVWLFNLQJDPLQXVVLJQLQIURQWRIWKHQXPEHUVRWKHUHUHDOO\LVDGLIIHUHQFH5HSUHVHQWDWLRQRIQHJDWLYHQXPEHUVLVGLVFXVVHGLQFKDSWHUVHFWLRQ/LQX[$VVHPEO\/DQJXDJH3URJUDPPLQJ)URQW0DWWHU7DEOHRI&RQWHQWV$ERXWWKH$XWKRU/LQX[$VVHPEO\/DQJXDJH3URJUDPPLQJ%2% 1( 9( /1 3XEOLVKHU3UHQWLFH+DOO375)LUVW(GLWLRQ-XO\,6 %1 SDJHV0DVWHU[DVVHPEO\ODQJXDJHIURPD/LQX[SHUVSHFWLYH(VVHQWLDOLQIRUPDWLRQIRUFUHDWLQJ/LQX[GHYLFHGULYHUV+RZ/LQX[ZRUNVXQGHUWKHKRRG&'520LQFOXGHVHGOLQDVWKH/LQX[[KDQGVRQDVVHPEOHUGHYHORSPHQWVLPXODWRU/LQX[$VVHPEO\/DQJXDJH3URJUDPPLQJLVWKHILUVW/LQX[FHQWHUHGJXLGHWR[DVVHPEO\ODQJXDJH,Q/LQX[$VVHPEO\/DQJXDJH3URJUDPPLQJ%RE1HYHOQH[SODLQVDOOWKHNH\IHDWXUHVRI[DVVHPEO\ODQJXDJHLQWKHFRQWH[WRIWKH/LQX[RSHUDWLQJV\VWHPDQGWKH&ODQJXDJH7KHERRN¶VVWHSE\VWHSRQHFRQFHSWDWDWLPHFRYHUDJHZLOOKHOSDQ\KDUGZDUHSURJUDPPHUPRYHWR/LQX[DQGPDVWHUHVVHQWLDOVNLOOVIRU/LQX[GHYLFHGULYHUGHYHORSPHQW<RXZRQ¶WMXVWOHDUQQHZ[DVVHPEO\ODQJXDJHVNLOOV\RX¶OODOVRJDLQSRZHUIXOXQGHUWKHKRRGLQVLJKWLQWRKRZ/LQX[ZRUNV%RQXV&'520LQFOXGHVHGOLQDVWKH/LQX[EDVHG[LQWHUDFWLYHDVVHPEOHUGHYHORSPHQWVLPXODWRU7KLVLV/LQX[[DVVHPEO\ODQJXDJHSURJUDPPLQJIURPVWDUWWRILQLVK3ODFHKROGLQJQXPHUDWLRQ/RJLFFLUFXLWV&RPSXWDWLRQ7KHIRXUILHOGIRUPDW0DFKLQHODQJXDJH0HPRU\7KHVWDFN/LQX[XVHUSURJUDPV 1$ 60'26SURJUDPV,QWHUUXSWV%LWPDQLSXODWLRQV'HYLFHGULYHUV$QGPRUH%LWYV%LW&RGH7KH%LW5HJLVWHUV/LQX[)LOHV0(025<%\WH'DWD:LGWK$GGUHVVHVLQ%UDFNHWV2SHUDQG6L]H$PELJXLW\/DEHOV,PPHGLDWH6WRUDJH7+(67$&.3XVKDQG3RS2SHUDWLRQV6XESURJUDPV3DUDPHWHU3DVVLQJ5HFXUVLRQ/ ,18 ;86(5352*5$060XOWLWDVNLQJ3DJLQJ$GGUHVV7UDQVODWLRQ3URJUDP6HJPHQWV2WKHU'DWD6HJPHQWV,23URWHFWLRQ([HFXWDEOH)LOHVLQ(/))RUPDW2EMHFW)LOHVLQ(/))RUPDW ,17 (5583763ROOLQJ([WHUQDO,QWHUUXSWV,6$$UFKLWHFWXUH,QWHUQDODQG6RIWZDUH,QWHUUXSWV6\VWHP&DOOV3ULYLOHJH/HYHOV&RQWURO7UDQVIHU6FKHGXOLQJ%,70 $1, 38/$7, 216 %LWZLVH/RJLF2SHUDWLRQV7KH $1& apos;25 12 7DQG;25&RPPDQGV%LW6HWWLQJDQG7HVWLQJ6KLIW,QVWUXFWLRQV'(9,&('5,9(56'HYLFH,QGHSHQGHQW)LOHV'HYLFHVDV)LOHV0RUVH&RGH6SHDNHU'ULYHU6HULDO3RUW'LJLWL]HU'ULYHU'26352*5$065HDO0RGH6HJPHQWDWLRQ(GOLQDV(QYLURQPHQW9DULDEOHV)L[HG0HPRU\$UHDV5HDO0RGH,QWHUUXSWV&KHFNLQJ'260HPRU\/ ,18 ;%2277,0(352*5$06&KDQJLQJWR3URWHFWHG0RGH3URWHFWHG0RGH6HJPHQWDWLRQ6HWWLQJ8SWKH*OREDO'HVFULSWRU7DEOH&ORVLQJ35()$&($VVHPEO\ODQJXDJHLVODQJXDJHZKLFKJLYHVWKHSURJUDPPHUGLUHFWFRQWURORYHUWKHFRPSXWHU7KDWLVZKDWDSSHDOVWRSHRSOHDERXWDVVHPEO\ODQJXDJH,WLVOLNHXVLQJDVWLFNVKLIW3URJUDPPLQJZLWKRWKHUODQJXDJHVKLJKOHYHOODQJXDJHVLVOLNHXVLQJDQDXWRPDWLFOLQX[ER[XQ]LSD/QDVPV]LSDIWHUFRS\LQJLWWRDVXLWDEOHGLUHFWRU\7REXLOGLW\RXFDQWKHQFRS\WKHDSSURSULDWHPDNHILOHOLQX[ER[FSPDNHILOHXQ[0DNHILOHDQGUXQOLQX[ER[PDNH2WKHU$VVHPEOHUV0$60DQG7XUER$VVHPEOHUDUHDVVHPEOHUVWKDWKDYHEHHQYHU\ZLGHO\XVHGLQFRQQHFWLRQZLWK'267KHIDFWWKDW:LQGRZVLVQRWVRHDV\WRZRUNZLWKXVLQJDVVHPEO\ODQJXDJHKDVOHGWRDGHFUHDVHLQWKHSRSXODULW\RIWKHVHDVVHPEOHUV0DQ\SHRSOHKDYHWKHLPSUHVVLRQWKDW/LQX[LVQRWSDUWLFXODUO\DVVHPEOHUIULHQGO\HLWKHU7KLVLPSUHVVLRQLVSDUWO\EDVHGRQWKHYLHZRIDVVHPEO\ODQJXDJHWKDW\RXJHWZRUNLQJZLWKJFF7KRVHDFFXVWRPHGWR,QWHOV\QWD[PD\XQGHUVWDQGDEO\ILQGWKH$77V\QWD[DZNZDUG:RUVHZKHQDVVHPEO\ODQJXDJHLQVWUXFWLRQVDUHLQVHUWHGLQWR&FRGHWKHTXRWDWLRQPDUNVUHTXLUHGE\JFFDQGWKHOLQHMXPEOLQJWKDWRFFXUVDUHSUHWW\UHSHOOHQW,KRSHWKDWE\FKDSWHUUHDGHUVZLOOEHSHUVXDGHGWKDWLQWHUDFWLQJZLWK/LQX[XVLQJDVVHPEO\ODQJXDJHFDQEHFOHDQDQGQHDW7KHUHDUHDIHZRWKHUDVVHPEOHUVDURXQG$EULHIGLVFXVVLRQRIWKHPFDQEHIRXQGLQDQ$VVHPEO\+2:72DWWKH/LQX['RFXPHQWDWLRQ3URMHFWV:HEVLWHZZZOLQX[GRFRUJ+2:72)XUWKHU5HDGLQJ2SHQ6RXUFHV9RLFHVIURPWKH2SHQ6RXUFH5HYROXWLRQ&KULV'L%RQDHWDO25HLOO\$4XDUWHU&HQWXU\RI8QL[3HWHU6DOXV$GGLVRQ:HVOH\&KDSWHU3/$&(+2/' ,1* 18 0(5$7, 21 7KH (1, $&GLGQRWXVHWKHELQDU\V\VWHP,WVDULWKPHWLFSURFHVVRUXVHGYDFXXPWXEHVZLUHGWRJHWKHULQWRULQJVZKLFKZRUNHGOLNHROGGHVNWRSDGGLQJPDFKLQHZKHHOV7KHVHZHUHEDVHWHQFRQWUDSWLRQV6LQFHWKHQKRZHYHUDOOHOHFWURQLFFRPSXWHUVKDYHGRQHWKHLUDULWKPHWLFXVLQJWKHELQDU\V\VWHPEDVHWZR&RQVHTXHQWO\GHVFULSWLRQVRIFRPSXWHUDULWKPHWLFDUHFXVWRPDULO\H[SUHVVHGXVLQJWKHELQDU\V\VWHPRUUHODWHGV\VWHPVVXFKDVKH[DGHFLPDOEDVHVL[WHHQRURFWDOEDVHHLJKW$QXQGHUVWDQGLQJRIWKHVHQXPEHUV\VWHPVLVHVVHQWLDO5HDGHUVDOUHDG\IDPLOLDUZLWKWKHPPD\SUHIHUWRVNLSWKLVFKDSWHU7KH'HFLPDODQG3HQWLPDO6\VWHPV%HIRUHWKHLQYHQWLRQRISODFHKROGLQJGHFLPDOQRWDWLRQLQWKH(DVWSUREDEO\LQ,QGLDRU&KLQDV\VWHPVRIQRWDWLRQEXLOWDURXQGSRZHUVRIWHQZKLFKZHUHQRWSODFHKROGLQJV\VWHPVZHUHFRPPRQ7KHV\VWHPXVHGE\$UFKLPHGHVIRUH[DPSOHLVVKRZQLQ7DEOH,QWKLVV\VWHP63$UHSUHVHQWVWKHQXPEHU*UHHNOHWWHUVRIFRXUVHQRW/DWLQOHWWHUVZHUHXVHG7KHPRVWDSSDUHQWGLVDGYDQWDJHRIWKLVNLQGRIV\VWHPLVFRPSXWDWLRQDO7KHQRWDWLRQLVQRKHOSDWDOOLQVHHLQJWKDW7DEOH1RQ3ODFHKROGLQJ'HFLPDO6\VWHP$-6%.7&/8'09( 1 :)2*3E\3UHQWLFH+DOO3XEOLVKHGE\3UHQWLFH+DOO3753UHQWLFH+DOO,QF8SSHU6DGGOH5LYHU 1- 3UHQWLFH+DOOERRNVDUHZLGHO\XVHGE\FRUSRUDWLRQVDQGJRYHUQPHQWDJHQFLHVIRUWUDLQLQJPDUNHWLQJDQGUHVDOH7KHSXEOLVKHURIIHUVGLVFRXQWVRQWKLVERRNZKHQRUGHUHGLQEXONTXDQWLWLHV)RUPRUHLQIRUPDWLRQFRQWDFW&RUSRUDWH6DOHV'HSDUWPHQW3KRQH)D[(PDLOFRUSVDOHV#SUHQKDOOFRPRUZULWH3UHQWLFH+DOO375&RUS6DOHV'HSW2QH/DNH6WUHHW8SSHU6DGGOH5LYHU 1- $OOSURGXFWVRUVHUYLFHVPHQWLRQHGLQWKLVERRNDUHWKHWUDGHPDUNVRUVHUYLFHPDUNVRIWKHLUUHVSHFWLYHFRPSDQLHVRURUJDQL]DWLRQV6FUHHQVKRWVUHSULQWHGE\SHUPLVVLRQIURP0LFURVRIW&RUSRUDWLRQ$OOULJKWVUHVHUYHG1RSDUWRIWKLVERRNPD\EHUHSURGXFHGLQDQ\IRUPRUE\DQ\PHDQVZLWKRXWSHUPLVVLRQLQZULWLQJIURPWKHSXEOLVKHU3ULQWHGLQWKH8QLWHG6WDWHVRI$PHULFD3UHQWLFH+DOO,QWHUQDWLRQDO8./LPLWHG/RQGRQ3UHQWLFH+DOORI$XVWUDOLD3W\/LPLWHG6\GQH\3UHQWLFH+DOO&DQDGD,QF7RURQWR3UHQWLFH+DOO+LVSDQRDPHULFDQD6$0H[LFR3UHQWLFH+DOORI,QGLD3ULYDWH/LPLWHG1HZ'HOKL3UHQWLFH+DOORI-DSDQ,QF7RN\R3UHQWLFH+DOO$VLD3WH/WG(GLWRUD3UHQWLFH+DOOGR%UDVLO/WGD5LRGH-DQHLUR&UHGLWV(GLWRULDOSURGXFWLRQVXSHUYLVLRQ9LQFHQW-DQRVNL$FTXLVLWLRQVHGLWRU0LOHV:LOOLDPV0DUNHWLQJPDQDJHU.DWH+DUJHWW0DQXIDFWXULQJPDQDJHU,RZHWKDQNVWR%UXFH*UDQW,W]LFN9DWQLFNDQG.DWH/$UPDQGIRUZRUNLQJZLWKPHRQWKHVFDOH[GHYLFHGULYHU,RZHWKDQNVWRWKHPDQ\VWXGHQWVZKRKDYHIRXQGHUURUVLQHDUOLHUGUDIWVRIWKLVERRN,RZHVSHFLDOWKDQNVWR-RH%LVVHOO6FRWW+DZNLQV-DVRQ.UROO1DQF\<RVKLPXUDDQG-RDQQH<XUFKDNIRUWKHLUFDUHIXOGHWDLOHGDQGWKRXJKWIXOFULWLWLVP0DQ\HUURUVXQGRXEWHGO\UHPDLQ7RWKRVHUHDGHUVZKRQRWLI\PHRIWKHPDWQHYHOQ#FVZLGHQHUHGX,VKDOOEHJUDWHIXO/LQX['ULYHQ6HULDO3RUW,QSXW'HYLFH&KDSWHU ,17 52'8&7, 21 ,QWKLVFKDSWHUVRPHQHFHVVDU\WRROVDQGEDFNJURXQGLGHDVDUHUHYLHZHG7KH)HWFK([HFXWH&\FOH2QHRIWKHHDUOLHVWHOHFWURQLFFRPSXWHUVZDVWKH (1, $&:KHQLWZDVILUVWEXLOWLWFRXOGQRWVWRUHSURJUDPV(DFKQHZFRPSXWDWLRQUHTXLUHGPRYLQJSOXJVDQGMXPSHUFDEOHV1RZKRZHYHUQHDUO\DOOFRPSXWHUVVWRUHSURJUDPV)RUWKHVHFRPSXWHUVGRLQJDFRPSXWDWLRQPHDQVUXQQLQJDSURJUDP7KHSODFHZKHUHWKHSURJUDPLVVWRUHGLVFDOOHGPHPRU\7KHSDUWRIWKHPDFKLQHZKLFKGRHVWKHFRPSXWDWLRQLVFDOOHGWKHSURFHVVRU&RPSXWHUSURJUDPVJHQHUDOO\WDNHWKHIRUPRIDOLVWRILQVWUXFWLRQV&RPSXWDWLRQLVSHUIRUPHGE\WKHSURFHVVRUXVLQJWKHIHWFKH[HFXWHF\FOH7KHIHWFKH[HFXWHF\FOHFRQVLVWVRIDUHSHDWHGSURFHVVWKDWLQFOXGHVWKHVHVWHSV6WHS7KHSURFHVVRUIHWFKHVDQLQVWUXFWLRQIURPPHPRU\6WHS7KHSURFHVVRUH[HFXWHVWKHLQVWUXFWLRQ6WHS$FRPSLOHULVDSURJUDPZKLFKWUDQVODWHVDSURJUDPVXFKDVD&ODQJXDJHSURJUDPLQWRDPDFKLQHFRGHSURJUDPWKDWFDQEHVWRUHGLQDFRPSXWHUVPHPRU\DQGUXQ$SURJUDPWKDWFDQEHVWRUHGLQPHPRU\DQGUXQLVFDOOHGDQH[HFXWDEOHILOHRUVRPHWLPHVMXVWDQH[HFXWDEOH7KHJQX&FRPSLOHUZRUNVLQVWDJHV6HH)LJXUH7RFRPSLOHDSURJUDPVXFKDVSURJFZLWKWKHJQXFRPSLOHURQHFDQHQWHUWKHFRPPDQG)LJXUH6WDJHVRI*QX&&RPSLODWLRQOLQX[ER[JFFSURJF7KLVFRPPDQGWDNHVWKHWUDQVODWLRQWKURXJKDOOWKHVWDJHVDQGSURGXFHVDQH[HFXWDEOHILOHFDOOHGDRXW7RVWRSDWDQHDUOLHUVWDJHRQHFDQDGGDVZLWFKWRWKHJFFFRPPDQGOLQH)RUH[DPSOHWRSURGXFHDQDVVHPEO\FRGHILOHWKH6VZLWFKXSSHUFDVHLVXVHG(QWHULQJWKHFRPPDQGOLQX[ER[JFF6SURJF\LHOGVDQDVVHPEO\ODQJXDJHILOHSURJV7RILQLVKWKHFRPSLODWLRQWKHJFFFRPPDQGPD\EHXVHGRQWKHVILOHOLQX[ER[JFFSURJV7KH(GOLQDV$VVHPEOHU7KHDVVHPEO\ODQJXDJHLQWKHVILOHVSURGXFHGE\WKHJQXFRPSLOHULVGLIIHUHQWIURPWKHZLGHO\XVHG,QWHODVVHPEO\ODQJXDJHIRUWKH[SURFHVVRUV(GOLQDVDVVHPEO\ODQJXDJHLVHVVHQWLDOO\WKH,QWHODVVHPEO\ODQJXDJH,WVREMHFWFRGHILOHVUXQXQGHU[/LQX[(GOLQDVLVDQLQWHUDFWLYHHQYLURQPHQWFRQVLVWLQJRIDQHGLWRUDQDVVHPEOHUDQGDVLPXODWRU(GLWLQJ6RXUFHFRGHHGLWLQJXVHVFRPPDQGVERUURZHGIURP('/ ,1 D'26HGLWRU$PRQJWKHFRPPDQGVDUHLIRULQVHUWGIRUGHOHWHFIRUFKDQJHHIRUH[LWTIRUTXLWDQGKIRUKHOS&RPPDQGVDIIHFWWKHFXUUHQWOLQHZKLFKLVWKHOLQHWKDWKDVWKHDVWHULVN7KHDVWHULVNLVPRYHGXVLQJWKHDUURZNH\V(QWHUHGOLQHVDUHFKHFNHGE\WKHDVVHPEOHUIRUV\QWD[HUURUV$VVHPEOLQJ&RGHLVDVVHPEOHGDVLWLVHQWHUHGRUORDGHG$VVHPEO\FRGHDSSHDUVLQWKHGHIDXOWZLQGRZRQWKHULJKWVLGHRIWKHVFUHHQ$VVHPEOHGFRGHFDQEHVDYHGDWDQ\WLPHXVLQJWKHRFRPPDQG,QWHUSUHWLQJ&RGHFDQEHH[HFXWHGHLWKHUIURPDORDGHGSURJUDPRUIURPDFRPPDQGSURPSWEHORZDQGDOOUHSUHVHQWHVVHQWLDOO\WKHVDPHEDVLFIDFW%XWWKLVLVRQO\DSUREOHPZKHQQRWDWLRQVWKHPVHOYHVDUHXVHGWRGRFDOFXODWLRQVDVZHGRZLWKSHQFLODQGSDSHU:KHQFDOFXODWLRQVDUHGRQHZLWKSK\VLFDOWRNHQVVXFKDVEHDGVRQDQDEDFXVRUZLWKSHEEOHVWKLVLVQRORQJHUDSUREOHP,QIDFWWKLVNLQGRIQRWDWLRQPD\KDYHVHUYHGWRSUHYHQWUHDGLQJHUURUV$Q\RQHZKRKDVUHFHLYHGZKHQFDVKLQJDFKHFNZLOOXQGHUVWDQGWKLVSRLQW%XWZKHQWKHQRWDWLRQVWKHPVHOYHVDUHXVHGWRGRWKHFDOFXODWLRQVLWLVEHWWHUWRKDYHDQRWDWLRQDOV\VWHPZKLFKEULQJVRXWVXFKEDVLFVLPLODULWLHVDVWKHIROORZLQJ3ODFHKROGLQJV\VWHPVGRWKLV3ODFHKROGLQJQXPHUDOVVRPHWLPHVOHVVV\PSDWKHWLFDOO\UHIHUUHGWRDVKHDWKHQF\SKHUVZHUHSRSXODUL]HGLQ(XURSHDURXQGWKH\HDUE\/HRQDUGRRI3LVDDOVRNQRZQDV)LERQDFFL)LERQDFFLZDVSUHVXPDEO\UHO\LQJRQDZRUNZULWWHQLQ$UDELFE\DO.KZkUL]PLZKRVHQDPHZHVHHLQWKHZRUGDOJRULWKPDURXQGWKH\HDULQ%DJKGDG/LNHDOO(XURSHDQVFKRODUVRIWKHGD\)LERQDFFLZDVQHFHVVDULO\YHUVHGLQ$UDELF$OOWKHQXPHUDWLRQV\VWHPVGLVFXVVHGLQWKLVERRNLQFOXGLQJWKHGHFLPDOV\VWHPZHXVHHYHU\GD\DUHSODFHKROGLQJV\VWHPV%HIRUHSURFHHGLQJWRQRQGHFLPDOV\VWHPVOHWXVFRQVLGHUWKHUROHWKDWEDVHWHQSOD\VLQWKH86PRQHWDU\V\VWHP3XUHO\'HFLPDO0RQH\7KHFXUUHQW86PRQHWDU\V\VWHPZDVDGRSWHGIROORZLQJWKHLQWURGXFWLRQRIWKHPHWULFV\VWHPLQ)UDQFHLQWKH5HYROXWLRQRI7KHSXUSRVHRIERWKRIWKHVHH[WHQVLRQVRIWKHGHFLPDOV\VWHPZDVWRVLPSOLI\FDOFXODWLRQVE\EULQJLQJPRQHWDU\DQGPHDVXUHPHQWXQLWVLQWRKDUPRQ\ZLWKWKHGHFLPDOV\VWHPXVHGWRUHSUHVHQWQXPEHUV7REULQJWKHDOLJQPHQWRIWKHPRQHWDU\DQGQXPHUDOV\VWHPVLQWRVKDUSUHOLHIOHWXVLPDJLQHDSDUHGGRZQYHUVLRQRIWKH86PRQHWDU\V\VWHPWKDWLQFOXGHVRQO\SHQQLHVGLPHVELOOVGROODUELOOVGROODUELOOVGROODUELOOVDQGVRRQGLPH ... $OH[LV+H\GW&RYHUGHVLJQGLUHFWRU-HUU\9RWWD&RYHUGHVLJQHU1LQD6FXGHUL7KLVERRNLVGHGLFDWHGWRDOOLPSULVRQHG3ORZVKDUHVDFWLYLVWVIRUDWWHPSWLQJWRGRZLWKLURQZKDWDOVRQHHGVWREHGRQHZLWKVLOLFRQ/LQX[$VVHPEO\/DQJXDJH3URJUDPPLQJ35()$&( ,17 52'8&7, 21 7KH)HWFK([HFXWH&\FOH7KH/LQX[2SHUDWLQJ6\VWHP7KH*QX&&RPSLOHU7KH(GOLQDV$VVHPEOHU 1$ 602WKHU$VVHPEOHUV3/$&(+2/' ,1* 18 0(5$7, 21 7KH'HFLPDODQG3HQWLPDO6\VWHPV3HQWLPDO$ULWKPHWLF&RQYHUVLRQWR3HQWLPDO7KH%LQDU\6\VWHP0HPRU\DVD5HFWDQJOHRI%LWV7KH+H[DGHFLPDO6\VWHP%DVH'LVWLQJXLVKLQJ1RWDWLRQV)UDFWLRQVLQ2WKHU%DVHV&RQYHUWLQJ)UDFWLRQV/2*,&&,5&8,76 $1& apos;&20387$7, 21 7KH 12 7*DWH%RROHDQ2SHUDWRUV/RJLF*DWHV$GGLWLRQ&LUFXLWV6HTXHQWLDO&LUFXLWV1HJDWLYH1XPEHU5HSUHVHQWDWLRQ6XEWUDFWLRQ8VLQJ1HJDWLRQ3ODFHKROGLQJ7ZRV&RPSOHPHQW0HPRU\&LUFXLWV[*HQHUDO5HJLVWHUVDQGWKHLU$QFHVWU\7KH029&RPPDQG$GGLWLRQDQG6XEWUDFWLRQ&RPPDQGV0XOWLSOLFDWLRQDQG'LYLVLRQ&RPPDQGV$66(0%/</ $1* 8$*(7KH)RXU)LHOG)RUPDW&RPSXWHUVIURPWKH&386WDQGSRLQW6LPSOH$VVHPEO\/DQJXDJH3URJUDPV$VVHPEOHU3URJUDPVZLWK-XPSV$VVHPEOHU3URJUDPVZLWK/RRSV6LJQHG&RPSDULVRQV8QVLJQHG&RPSDULVRQV/LQX[VILOHV0$&+ ,1( / $1* 8$*($VVHPEOLQJ6LPSOH3URJUDPV2SFRGH6SDFH7KH0RG50%\WH6SDFH2)«1DWLYH$GGLWLRQ8VLQJWKHQDWLYHDULWKPHWLFKRZHYHULVHDVLHUWKDQWKLVHVSHFLDOO\ZKHQWKHQXPEHUVJHWODUJHU$ERXWDOOWKDWVQHFHVVDU\WRUHPHPEHULVWKDWILYHRIDQ\RQHXQLWPXVWEHFDUULHGE\FRQYHUWLQJLWWRRQHRIWKHQH[WODUJHUXQLW7KHRQHVRUSHQQLHVFROXPQWRWDOVVHYHQZKLFKLVZKLFKLVFDUU\LVVL[ZKLFKLVZKLFKLVFDUU\$QGLVHLJKWZKLFKLVZKLFKLVFDUU\&OHDUO\WKHQDWLYHDULWKPHWLFLVHDVLHURQFHZHXQGHUVWDQGLW1DWLYH6XEWUDFWLRQ6XEWUDFWLRQUHTXLUHVERUURZLQJIRUH[DPSOHFRQYHUWLQJDTXDUWHUWRILYHQLFNHOVRUDQLFNHOWRILYHSHQQLHV7KHIROORZLQJVXEWUDFWLRQRIWKUHHIURPWHQLOOXVWUDWHVERUURZLQJ%RUURZDQLFNHOIURPWKHQLFNHOVFROXPQDQGFRQYHUWLWLQWRILYHSHQQLHV2QHQLFNHOLVOHIW6RZHJHWRQHQLFNHODQGWZRSHQQLHVOHIW&RQYHUVLRQWR3HQWLPDO6RPHWLPHVFRQYHUVLRQVDUHXQDYRLGDEOH)RUDFRPSXWHUWREHDEOHWRVWRUHDQXPEHULQELQDU\ZKLFKLVLQSXWLQGHFLPDODFRQYHUVLRQLVQHHGHG$OWKRXJKFRQYHUVLRQVFDQEHGRQHE\VHDUFKLQJIRUDUHSUHVHQWDWLRQZKLFKZRUNVWKHUHDUHPRUHHIILFLHQWPHWKRGV&RQVLGHUWKHFRQYHUVLRQRILQWREDVHILYH7RXQGHUVWDQGWKLVFRQYHUVLRQLWPD\KHOSWRORRNDWWKHDQVZHUEHIRUHZHVWDUW:HFDQVHHWKDWFDQEHIDFWRUHGRXWRIWKLVVXPH[FHSWIRUWKHDWWKHHQG%XWWKLVMXVWVD\VZKDWWKHTXRWLHQWDQGUHPDLQGHURIGLYLGHGE\DUH1RWLFHWKDWWKHUHPDLQGHULVRXUXQLWVGLJLW)XUWKHUPRUHZHFDQFDOFXODWHWKLVTXRWLHQWDQGUHPDLQGHUXVLQJEDVHWHQZKLFKLVZKDWZHKDYHDYDLODEOHZKHQZHVWDUWWKLVFRQYHUVLRQ:HKDYHLQEDVHWHQWKDWZKHUHDJDLQSHHNLQJDWWKHDQVZHUVKRZVXVWKDW7KHTXRWLHQWFRQWDLQVWKHLQIRUPDWLRQQHHGHGWRJHWDOOWKHRWKHUGLJLWV7KH\FDQEHREWDLQHGXVLQJPRUHGLYLVLRQV0DQ\SHRSOHZKRXVHFRPSXWHUVVLPSO\UXQSURJUDPV7RWKHPDSURJUDPLVDFDQQHGVRIWZDUHSDFNDJH3HRSOHZKROLNHWRZULWHSURJUDPVOLNHWREHDEOHWRVKDSHWKHEHKDYLRURIWKHPDFKLQHWKHZD\PHWDOVPLWKVVKDSHPHWDOLQWRXVHIXOPHFKDQLFDOWRROV$PRQJVWDOOWKHSURJUDPVRQDFRPSXWHUWKHUHLVRQHSURJUDPZKLFKUXQVWKHPDFKLQHWKHRSHUDWLQJV\VWHP,WFRQWUROVHYHU\WKLQJ,WRIIHUVVHUYLFHVWRWKHRWKHUSURJUDPV0RVWRSHUDWLQJV\VWHPVIRUFHSURJUDPPHUVWROHDYHWKHLUSURJUDPPLQJVNLOOVEHKLQGDVWKH\DSSURDFKWKHRSHUDWLQJV\VWHPDQGWRXVHLWDVWKH\ZRXOGDFDQQHGVRIWZDUHSDFNDJH7KDWLVEHFDXVHLWVVRXUFHFRGHLVDVHFUHW/LQX[SRUWHQGVWKHHQGRIVHFUHWFRGHLQFRPSXWLQJ%HFDXVHWKH/LQX[VRXUFHFRGHDQGDFRPSLOHUIRULWDUHULJKWWKHUHRQWKHFRPSXWHUDORQJZLWKWKHRWKHUVRXUFHFRGHLWDOORZVSURJUDPPHUVWRZRUNZLWKWKHRSHUDWLQJV\VWHPDVWKH\GRZLWKSURJUDPVWKH\KDYHZULWWHQ2SHUDWLQJV\VWHPVZHUHRQFHZULWWHQE\SURJUDPPHUVHPSOR\HGE\FRPSXWHUPDQXIDFWXUHUV5HYROXWLRQVLQKDUGZDUHSURGXFHGFRUUHVSRQGLQJUHYROXWLRQVLQWKHVRIWZDUH:KHQ/LQXV7RUYDOGVUHZURWH/LQX[VRWKDWLWZRXOGUXQRQWKH$OSKDDUFKLWHFWXUHKLVJRDOZDVQRWWRLQFUHDVHLWVKDUGZDUHEDVHIURPRQHSODWIRUPWRWZREXWWRPDNH/LQX[SODWIRUPLQGHSHQGHQW7KHVXEVHTXHQWSRUWVRI/LQX[WRHYHU\WKLQJIURPD6SDUFWRD3RZHU3&GHPRQVWUDWHWKHVXFFHVVRIKLVUHZULWH7KHFKLHIYDOXHRILWLVWKDWLWSURYLGHVXVZLWKFRQILGHQFHWKDW/LQX[LVKHUHWRVWD\:HGRQWKDYHWRIHDUD3RZHU3&UHYROXWLRQFRPLQJDORQJDQGIRUFLQJXVWRGXPSDOORIRXUROGVRIWZDUH$VVHPEO\FRGHRQWKHRWKHUKDQGLVLQWULQVLFDOO\SODWIRUPGHSHQGHQWDQGLVMXVWLILDEO\UHJDUGHGZLWKFDXWLRQIRUMXVWWKLVUHDVRQ,WZLOOKDYHWREHUHGRQHZKHQWKHQH[WKDUGZDUHUHYROXWLRQWDNHVSODFH)XUWKHUPRUHSHRSOHZKRFRPSDUHWKHPDFKLQHODQJXDJHRIWKHZLWKRWKHUPDFKLQHODQJXDJHVERWKUHDODQGLGHDOLQHYLWDEO\HQGXSUHJDUGLQJWKHODQJXDJHDVDKLVWRULFDODFFLGHQW2QWKHRWKHUKDQGWKHJHQHWLFFRGHLVVRPHWLPHVUHIHUUHGWRDVDIUR]HQDFFLGHQW7KHWHUPLVEDVHGRQWKHLGHDWKDWWKHJHQHWLFFRGHFHDVHGLWVHYROXWLRQZKHQWKHQXPEHURISURWHLQVZKRVHFRGHZRXOGEHEURNHQE\DPXWDWLRQLQWKHJHQHWLFFRGHEHFDPHVRODUJHWKDWVXFKPXWDWLRQVEHFDPHOHWKDODQGVRWKHFRGHEHFDPHIL[HG,WUHPDLQVWREHVHHQZKHWKHUPDFKLQHFRGHKDVEHHQIUR]HQLQWRSODFHE\WKHVL]HRILWVVRIWZDUHEDVH7KHWKUHDWRID3RZHU3&UHYROXWLRQKDVSDVVHG2QWKHRWKHUKDQGPDQ\/LQX[HQWKXVLDVWVDQWLFLSDWHDQ$OSKDUHYROXWLRQ%XWWKH$OSKDUHYROXWLRQKDVQRWKDSSHQHGDQGLWPD\QRWKDSSHQ7KHODQJXDJHKDVEHHQDURXQGIRUDORQJWLPH:LWKPDQ\5,6&PDFKLQHVQRZHPXODWLQJWKHDUFKLWHFWXUHLVQWLWWLPHWRFRQVLGHUSURJUDPPLQJLQDVVHPEO\ODQJXDJH"$VVHPEO\ODQJXDJHLVPRUHZRUNEXWLWKDVLWVDGYDQWDJHV$YHU\QLFHIHDWXUHRIDVVHPEO\ODQJXDJHFRGHZKLFKLWVKDUHVZLWK/LQX[LWVHOILQFLGHQWDOO\LVWKDWIURPDFUDVVSHUIRUPDQFHVWDQGSRLQWLWIXQFWLRQVEHDXWLIXOO\5HO\LQJRQFRPSLOHUVWRSURGXFHJRRGFRGHLVXVXDOO\MXVWLILDEOHDVDWLPHVDYLQJPHDVXUH%XWWRJHWWKHEHVWSRVVLEOHFRGHWKHUHLVVWLOOQREHWWHURSWLRQWKDQWRXVHDVVHPEO\ODQJXDJH:KHQKLJKOHYHOODQJXDJHVZHUHVWLOODQRYHOW\DQGUHIHUUHGWRDVDXWRPDWLFSURJUDPPLQJPDQ\SURJUDPPHUVZHUHJUHDWO\RIIHQGHGE\WKHP7KH\ZHUHFRQYLQFHGWKDWQRFRPSLOHUSURJUDPFRXOGZULWHFRGHDVZHOODVWKH\FRXOG7KH\ZHUHULJKWRIFRXUVH&RPSLOHUVSURGXFHFKHDSHUFRGHEXWQRWEHWWHUFRGH7RJHWWKHIXOOPHDVXUHRIVSHHGDQGJUDFHWKDWDPDFKLQHLVFDSDEOHRIWKHUHLVQRVXEVWLWXWHIRUDVVHPEO\ODQJXDJH)XUWKHUPRUHHYHQLIWKH$OSKDUHYROXWLRQDUULYHVRQVFKHGXOHWRPRUURZWKHUHZLOOUHPDLQLQWKHZRUOGPLOOLRQVRISURFHVVRUVUXQQLQJDODQJXDJHZKLFKZRUNEHDXWLIXOO\DQGQHHGWREHSXWWRDVRFLDOO\UHVSRQVLEOHXVH&RPSXWHUVFDQEHSURJUDPPHGWRUHSRUWRQRXUEX\LQJKDELWVRUWRVHQGRIIQXFOHDUPLVVLOHV%XWWKH\FDQDOVREHSURJUDPPHGWRFRPPXQLFDWHZLWKSULYDF\RUWRVXSSRUWPHGLFDOUHVHDUFK$VVLOLFRQVPLWKVRXUMRELVWRVKDSHWKHEHKDYLRURIWKHPDFKLQHWRZDUGVDKXPDQDJHQGD7KLVERRNDVVXPHVWKDWWKHUHDGHUKDVVRPHNQRZOHGJHRI&EXWLWPDNHVQRRWKHUDVVXPSWLRQV6WDUUHGVHFWLRQVRIWKHERRNDUHQRWQHHGHGVXEVHTXHQWO\DQGPD\EHVNLSSHGZKHQWKH\DUHQRWRILQWULQVLFLQWHUHVW,RZHWKDQNVWR'DYH)HOWHUIRUZULWLQJDSDUWLDOVLPXODWRURIWKH7KLVVLPXODWRUJRWPHVWDUWHGZULWLQJ(GOLQDV*LYHQDEDVHILYHDULWKPHWLFSUREOHPZHKDYHDFKRLFHRIPHWKRGV:HFDQFRQYHUWWKHVHQXPEHUVLQWREDVHWHQGRWKHDULWKPHWLFDQGWKHQFRQYHUWEDFNWREDVHILYH2UZHFDQGRWKHSUREOHPZLWKRXWDQ\FRQYHUVLRQVXVLQJWKHQDWLYHDULWKPHWLF7KHILUVWPHWKRGLVHDVLHUDWILUVWVLQFHZHDUHXVHGWREDVHWHQ7KLQNLQJLQWHUPVRIPRQHWDU\XQLWVLVIRXUTXDUWHUVWZRQLFNHOVDQGWKUHHSHQQLHVLHFHQWVLQRUGLQDU\EDVHWHQ6LPLODUO\LVFHQWVLQRUGLQDU\EDVHWHQ6RZHFDQGRWKHDGGLWLRQXVLQJRUGLQDU\EDVHWHQDULWKPHWLF2QHKXQGUHGWKLUWHHQSOXVLVRU7RFRQYHUWEDFNVWDUWE\WDNLQJRXWRQHELJGROODUDGROODUDQGDTXDUWHUDQGZHKDYHFHQWVOHIW7KLVLVWKUHHTXDUWHUVRQHQLFNHODQGWZRSHQQLHV6RWKHDQVZHULV7DEOH3HQWLPDO6\VWHP3ODFH9DOXHVVVV3HQWLPDO'HFLPDO%LQDU\6XEWUDFWLRQ6XSSRVHZHZDQWWRVXEWUDFWILYHIURPWZHOYH,WUHTXLUHVERUURZLQJ'RLQJWKHVXEWUDFWLRQLQWKHILUVWFROXPQ\LHOGV,QWKHWZRVFROXPQZHVXEWUDFW]HURIURPRQH7KHIRXUVFROXPQUHTXLUHVDQRWKHUERUURZLQJ7KLVLVKRZWRVXEWUDFWILYHIURPWZHOYHLQELQDU\%XWLWLVQRWDWDOOKRZFRPSXWHUVGRWKLVDULWKPHWLF&RPSXWHUVGRVXEWUDFWLRQVXVLQJQHJDWLYHVOLNHWKLV6LQFHWKHPHWKRGWKDWZHOHDUQHGLQVFKRROIRUDGGLQJDQHJDWLYHZDVWRFRQYHUWLWWRDVXEWUDFWLRQWKLVPLJKWVHHPWREHDGLVWLQFWLRQZLWKRXWDGLIIHUHQFH+RZHYHUFRPSXWHUVXVHDGLIIHUHQWUHSUHVHQWDWLRQIRUQHJDWLYHVWKDQMXVWVWLFNLQJDPLQXVVLJQLQIURQWRIWKHQXPEHUVRWKHUHUHDOO\LVDGLIIHUHQFH5HSUHVHQWDWLRQRIQHJDWLYHQXPEHUVLVGLVFXVVHGLQFKDSWHUVHFWLRQ/LQX[$VVHPEO\/DQJXDJH3URJUDPPLQJ)URQW0DWWHU7DEOHRI&RQWHQWV$ERXWWKH$XWKRU/LQX[$VVHPEO\/DQJXDJH3URJUDPPLQJ%2% 1( 9( /1 3XEOLVKHU3UHQWLFH+DOO375)LUVW(GLWLRQ-XO\,6 %1 SDJHV0DVWHU[DVVHPEO\ODQJXDJHIURPD/LQX[SHUVSHFWLYH(VVHQWLDOLQIRUPDWLRQIRUFUHDWLQJ/LQX[GHYLFHGULYHUV+RZ/LQX[ZRUNVXQGHUWKHKRRG&'520LQFOXGHVHGOLQDVWKH/LQX[[KDQGVRQDVVHPEOHUGHYHORSPHQWVLPXODWRU/LQX[$VVHPEO\/DQJXDJH3URJUDPPLQJLVWKHILUVW/LQX[FHQWHUHGJXLGHWR[DVVHPEO\ODQJXDJH,Q/LQX[$VVHPEO\/DQJXDJH3URJUDPPLQJ%RE1HYHOQH[SODLQVDOOWKHNH\IHDWXUHVRI[DVVHPEO\ODQJXDJHLQWKHFRQWH[WRIWKH/LQX[RSHUDWLQJV\VWHPDQGWKH&ODQJXDJH7KHERRN¶VVWHSE\VWHSRQHFRQFHSWDWDWLPHFRYHUDJHZLOOKHOSDQ\KDUGZDUHSURJUDPPHUPRYHWR/LQX[DQGPDVWHUHVVHQWLDOVNLOOVIRU/LQX[GHYLFHGULYHUGHYHORSPHQW<RXZRQ¶WMXVWOHDUQQHZ[DVVHPEO\ODQJXDJHVNLOOV\RX¶OODOVRJDLQSRZHUIXOXQGHUWKHKRRGLQVLJKWLQWRKRZ/LQX[ZRUNV%RQXV&'520LQFOXGHVHGOLQDVWKH/LQX[EDVHG[LQWHUDFWLYHDVVHPEOHUGHYHORSPHQWVLPXODWRU7KLVLV/LQX[[DVVHPEO\ODQJXDJHSURJUDPPLQJIURPVWDUWWRILQLVK3ODFHKROGLQJQXPHUDWLRQ/RJLFFLUFXLWV&RPSXWDWLRQ7KHIRXUILHOGIRUPDW0DFKLQHODQJXDJH0HPRU\7KHVWDFN/LQX[XVHUSURJUDPV 1$ 60'26SURJUDPV,QWHUUXSWV%LWPDQLSXODWLRQV'HYLFHGULYHUV$QGPRUH%LWYV%LW&RGH7KH%LW5HJLVWHUV/LQX[)LOHV0(025<%\WH'DWD:LGWK$GGUHVVHVLQ%UDFNHWV2SHUDQG6L]H$PELJXLW\/DEHOV,PPHGLDWH6WRUDJH7+(67$&.3XVKDQG3RS2SHUDWLRQV6XESURJUDPV3DUDPHWHU3DVVLQJ5HFXUVLRQ/ ,18 ;86(5352*5$060XOWLWDVNLQJ3DJLQJ$GGUHVV7UDQVODWLRQ3URJUDP6HJPHQWV2WKHU'DWD6HJPHQWV,23URWHFWLRQ([HFXWDEOH)LOHVLQ(/))RUPDW2EMHFW)LOHVLQ(/))RUPDW ,17 (5583763ROOLQJ([WHUQDO,QWHUUXSWV,6$$UFKLWHFWXUH,QWHUQDODQG6RIWZDUH,QWHUUXSWV6\VWHP&DOOV3ULYLOHJH/HYHOV&RQWURO7UDQVIHU6FKHGXOLQJ%,70 $1, 38/$7, 216 %LWZLVH/RJLF2SHUDWLRQV7KH $1& apos;25 12 7DQG;25&RPPDQGV%LW6HWWLQJDQG7HVWLQJ6KLIW,QVWUXFWLRQV'(9,&('5,9(56'HYLFH,QGHSHQGHQW)LOHV'HYLFHVDV)LOHV0RUVH&RGH6SHDNHU'ULYHU6HULDO3RUW'LJLWL]HU'ULYHU'26352*5$065HDO0RGH6HJPHQWDWLRQ(GOLQDV(QYLURQPHQW9DULDEOHV)L[HG0HPRU\$UHDV5HDO0RGH,QWHUUXSWV&KHFNLQJ'260HPRU\/ ,18 ;%2277,0(352*5$06&KDQJLQJWR3URWHFWHG0RGH3URWHFWHG0RGH6HJPHQWDWLRQ6HWWLQJ8SWKH*OREDO'HVFULSWRU7DEOH&ORVLQJ35()$&($VVHPEO\ODQJXDJHLVODQJXDJHZKLFKJLYHVWKHSURJUDPPHUGLUHFWFRQWURORYHUWKHFRPSXWHU7KDWLVZKDWDSSHDOVWRSHRSOHDERXWDVVHPEO\ODQJXDJH,WLVOLNHXVLQJDVWLFNVKLIW3URJUDPPLQJZLWKRWKHUODQJXDJHVKLJKOHYHOODQJXDJHVLVOLNHXVLQJDQDXWRPDWLFOLQX[ER[XQ]LSD/QDVPV]LSDIWHUFRS\LQJLWWRDVXLWDEOHGLUHFWRU\7REXLOGLW\RXFDQWKHQFRS\WKHDSSURSULDWHPDNHILOHOLQX[ER[FSPDNHILOHXQ[0DNHILOHDQGUXQOLQX[ER[PDNH2WKHU$VVHPEOHUV0$60DQG7XUER$VVHPEOHUDUHDVVHPEOHUVWKDWKDYHEHHQYHU\ZLGHO\XVHGLQFRQQHFWLRQZLWK'267KHIDFWWKDW:LQGRZVLVQRWVRHDV\WRZRUNZLWKXVLQJDVVHPEO\ODQJXDJHKDVOHGWRDGHFUHDVHLQWKHSRSXODULW\RIWKHVHDVVHPEOHUV0DQ\SHRSOHKDYHWKHLPSUHVVLRQWKDW/LQX[LVQRWSDUWLFXODUO\DVVHPEOHUIULHQGO\HLWKHU7KLVLPSUHVVLRQLVSDUWO\EDVHGRQWKHYLHZRIDVVHPEO\ODQJXDJHWKDW\RXJHWZRUNLQJZLWKJFF7KRVHDFFXVWRPHGWR,QWHOV\QWD[PD\XQGHUVWDQGDEO\ILQGWKH$77V\QWD[DZNZDUG:RUVHZKHQDVVHPEO\ODQJXDJHLQVWUXFWLRQVDUHLQVHUWHGLQWR&FRGHWKHTXRWDWLRQPDUNVUHTXLUHGE\JFFDQGWKHOLQHMXPEOLQJWKDWRFFXUVDUHSUHWW\UHSHOOHQW,KRSHWKDWE\FKDSWHUUHDGHUVZLOOEHSHUVXDGHGWKDWLQWHUDFWLQJZLWK/LQX[XVLQJDVVHPEO\ODQJXDJHFDQEHFOHDQDQGQHDW7KHUHDUHDIHZRWKHUDVVHPEOHUVDURXQG$EULHIGLVFXVVLRQRIWKHPFDQEHIRXQGLQDQ$VVHPEO\+2:72DWWKH/LQX['RFXPHQWDWLRQ3URMHFWV:HEVLWHZZZOLQX[GRFRUJ+2:72)XUWKHU5HDGLQJ2SHQ6RXUFHV9RLFHVIURPWKH2SHQ6RXUFH5HYROXWLRQ&KULV'L%RQDHWDO25HLOO\$4XDUWHU&HQWXU\RI8QL[3HWHU6DOXV$GGLVRQ:HVOH\&KDSWHU3/$&(+2/' ,1* 18 0(5$7, 21 7KH (1, $&GLGQRWXVHWKHELQDU\V\VWHP,WVDULWKPHWLFSURFHVVRUXVHGYDFXXPWXEHVZLUHGWRJHWKHULQWRULQJVZKLFKZRUNHGOLNHROGGHVNWRSDGGLQJPDFKLQHZKHHOV7KHVHZHUHEDVHWHQFRQWUDSWLRQV6LQFHWKHQKRZHYHUDOOHOHFWURQLFFRPSXWHUVKDYHGRQHWKHLUDULWKPHWLFXVLQJWKHELQDU\V\VWHPEDVHWZR&RQVHTXHQWO\GHVFULSWLRQVRIFRPSXWHUDULWKPHWLFDUHFXVWRPDULO\H[SUHVVHGXVLQJWKHELQDU\V\VWHPRUUHODWHGV\VWHPVVXFKDVKH[DGHFLPDOEDVHVL[WHHQRURFWDOEDVHHLJKW$QXQGHUVWDQGLQJRIWKHVHQXPEHUV\VWHPVLVHVVHQWLDO5HDGHUVDOUHDG\IDPLOLDUZLWKWKHPPD\SUHIHUWRVNLSWKLVFKDSWHU7KH'HFLPDODQG3HQWLPDO6\VWHPV%HIRUHWKHLQYHQWLRQRISODFHKROGLQJGHFLPDOQRWDWLRQLQWKH(DVWSUREDEO\LQ,QGLDRU&KLQDV\VWHPVRIQRWDWLRQEXLOWDURXQGSRZHUVRIWHQZKLFKZHUHQRWSODFHKROGLQJV\VWHPVZHUHFRPPRQ7KHV\VWHPXVHGE\$UFKLPHGHVIRUH[DPSOHLVVKRZQLQ7DEOH,QWKLVV\VWHP63$UHSUHVHQWVWKHQXPEHU*UHHNOHWWHUVRIFRXUVHQRW/DWLQOHWWHUVZHUHXVHG7KHPRVWDSSDUHQWGLVDGYDQWDJHRIWKLVNLQGRIV\VWHPLVFRPSXWDWLRQDO7KHQRWDWLRQLVQRKHOSDWDOOLQVHHLQJWKDW7DEOH1RQ3ODFHKROGLQJ'HFLPDO6\VWHP$-6%.7&/8'09( 1 :)2*3E\3UHQWLFH+DOO3XEOLVKHGE\3UHQWLFH+DOO3753UHQWLFH+DOO,QF8SSHU6DGGOH5LYHU 1- 3UHQWLFH+DOOERRNVDUHZLGHO\XVHGE\FRUSRUDWLRQVDQGJRYHUQPHQWDJHQFLHVIRUWUDLQLQJPDUNHWLQJDQGUHVDOH7KHSXEOLVKHURIIHUVGLVFRXQWVRQWKLVERRNZKHQRUGHUHGLQEXONTXDQWLWLHV)RUPRUHLQIRUPDWLRQFRQWDFW&RUSRUDWH6DOHV'HSDUWPHQW3KRQH)D[(PDLOFRUSVDOHV#SUHQKDOOFRPRUZULWH3UHQWLFH+DOO375&RUS6DOHV'HSW2QH/DNH6WUHHW8SSHU6DGGOH5LYHU 1- $OOSURGXFWVRUVHUYLFHVPHQWLRQHGLQWKLVERRNDUHWKHWUDGHPDUNVRUVHUYLFHPDUNVRIWKHLUUHVSHFWLYHFRPSDQLHVRURUJDQL]DWLRQV6FUHHQVKRWVUHSULQWHGE\SHUPLVVLRQIURP0LFURVRIW&RUSRUDWLRQ$OOULJKWVUHVHUYHG1RSDUWRIWKLVERRNPD\EHUHSURGXFHGLQDQ\IRUPRUE\DQ\PHDQVZLWKRXWSHUPLVVLRQLQZULWLQJIURPWKHSXEOLVKHU3ULQWHGLQWKH8QLWHG6WDWHVRI$PHULFD3UHQWLFH+DOO,QWHUQDWLRQDO8./LPLWHG/RQGRQ3UHQWLFH+DOORI$XVWUDOLD3W\/LPLWHG6\GQH\3UHQWLFH+DOO&DQDGD,QF7RURQWR3UHQWLFH+DOO+LVSDQRDPHULFDQD6$0H[LFR3UHQWLFH+DOORI,QGLD3ULYDWH/LPLWHG1HZ'HOKL3UHQWLFH+DOORI-DSDQ,QF7RN\R3UHQWLFH+DOO$VLD3WH/WG(GLWRUD3UHQWLFH+DOOGR%UDVLO/WGD5LRGH-DQHLUR&UHGLWV(GLWRULDOSURGXFWLRQVXSHUYLVLRQ9LQFHQW-DQRVNL$FTXLVLWLRQVHGLWRU0LOHV:LOOLDPV0DUNHWLQJPDQDJHU.DWH+DUJHWW0DQXIDFWXULQJPDQDJHU,RZHWKDQNVWR%UXFH*UDQW,W]LFN9DWQLFNDQG.DWH/$UPDQGIRUZRUNLQJZLWKPHRQWKHVFDOH[GHYLFHGULYHU,RZHWKDQNVWRWKHPDQ\VWXGHQWVZKRKDYHIRXQGHUURUVLQHDUOLHUGUDIWVRIWKLVERRN,RZHVSHFLDOWKDQNVWR-RH%LVVHOO6FRWW+DZNLQV-DVRQ.UROO1DQF\<RVKLPXUDDQG-RDQQH<XUFKDNIRUWKHLUFDUHIXOGHWDLOHGDQGWKRXJKWIXOFULWLWLVP0DQ\HUURUVXQGRXEWHGO\UHPDLQ7RWKRVHUHDGHUVZKRQRWLI\PHRIWKHPDWQHYHOQ#FVZLGHQHUHGX,VKDOOEHJUDWHIXO/LQX['ULYHQ6HULDO3RUW,QSXW'HYLFH&KDSWHU ,17 52'8&7, 21 ,QWKLVFKDSWHUVRPHQHFHVVDU\WRROVDQGEDFNJURXQGLGHDVDUHUHYLHZHG7KH)HWFK([HFXWH&\FOH2QHRIWKHHDUOLHVWHOHFWURQLFFRPSXWHUVZDVWKH (1, $&:KHQLWZDVILUVWEXLOWLWFRXOGQRWVWRUHSURJUDPV(DFKQHZFRPSXWDWLRQUHTXLUHGPRYLQJSOXJVDQGMXPSHUFDEOHV1RZKRZHYHUQHDUO\DOOFRPSXWHUVVWRUHSURJUDPV)RUWKHVHFRPSXWHUVGRLQJDFRPSXWDWLRQPHDQVUXQQLQJDSURJUDP7KHSODFHZKHUHWKHSURJUDPLVVWRUHGLVFDOOHGPHPRU\7KHSDUWRIWKHPDFKLQHZKLFKGRHVWKHFRPSXWDWLRQLVFDOOHGWKHSURFHVVRU&RPSXWHUSURJUDPVJHQHUDOO\WDNHWKHIRUPRIDOLVWRILQVWUXFWLRQV&RPSXWDWLRQLVSHUIRUPHGE\WKHSURFHVVRUXVLQJWKHIHWFKH[HFXWHF\FOH7KHIHWFKH[HFXWHF\FOHFRQVLVWVRIDUHSHDWHGSURFHVVWKDWLQFOXGHVWKHVHVWHSV6WHS7KHSURFHVVRUIHWFKHVDQLQVWUXFWLRQIURPPHPRU\6WHS7KHSURFHVVRUH[HFXWHVWKHLQVWUXFWLRQ6WHS$FRPSLOHULVDSURJUDPZKLFKWUDQVODWHVDSURJUDPVXFKDVD&ODQJXDJHSURJUDPLQWRDPDFKLQHFRGHSURJUDPWKDWFDQEHVWRUHGLQDFRPSXWHUVPHPRU\DQGUXQ$SURJUDPWKDWFDQEHVWRUHGLQPHPRU\DQGUXQLVFDOOHGDQH[HFXWDEOHILOHRUVRPHWLPHVMXVWDQH[HFXWDEOH7KHJQX&FRPSLOHUZRUNVLQVWDJHV6HH)LJXUH7RFRPSLOHDSURJUDPVXFKDVSURJFZLWKWKHJQXFRPSLOHURQHFDQHQWHUWKHFRPPDQG)LJXUH6WDJHVRI*QX&&RPSLODWLRQOLQX[ER[JFFSURJF7KLVFRPPDQGWDNHVWKHWUDQVODWLRQWKURXJKDOOWKHVWDJHVDQGSURGXFHVDQH[HFXWDEOHILOHFDOOHGDRXW7RVWRSDWDQHDUOLHUVWDJHRQHFDQDGGDVZLWFKWRWKHJFFFRPPDQGOLQH)RUH[DPSOHWRSURGXFHDQDVVHPEO\FRGHILOHWKH6VZLWFKXSSHUFDVHLVXVHG(QWHULQJWKHFRPPDQGOLQX[ER[JFF6SURJF\LHOGVDQDVVHPEO\ODQJXDJHILOHSURJV7RILQLVKWKHFRPSLODWLRQWKHJFFFRPPDQGPD\EHXVHGRQWKHVILOHOLQX[ER[JFFSURJV7KH(GOLQDV$VVHPEOHU7KHDVVHPEO\ODQJXDJHLQWKHVILOHVSURGXFHGE\WKHJQXFRPSLOHULVGLIIHUHQWIURPWKHZLGHO\XVHG,QWHODVVHPEO\ODQJXDJHIRUWKH[SURFHVVRUV(GOLQDVDVVHPEO\ODQJXDJHLVHVVHQWLDOO\WKH,QWHODVVHPEO\ODQJXDJH,WVREMHFWFRGHILOHVUXQXQGHU[/LQX[(GOLQDVLVDQLQWHUDFWLYHHQYLURQPHQWFRQVLVWLQJRIDQHGLWRUDQDVVHPEOHUDQGDVLPXODWRU(GLWLQJ6RXUFHFRGHHGLWLQJXVHVFRPPDQGVERUURZHGIURP('/ ,1 D'26HGLWRU$PRQJWKHFRPPDQGVDUHLIRULQVHUWGIRUGHOHWHFIRUFKDQJHHIRUH[LWTIRUTXLWDQGKIRUKHOS&RPPDQGVDIIHFWWKHFXUUHQWOLQHZKLFKLVWKHOLQHWKDWKDVWKHDVWHULVN7KHDVWHULVNLVPRYHGXVLQJWKHDUURZNH\V(QWHUHGOLQHVDUHFKHFNHGE\WKHDVVHPEOHUIRUV\QWD[HUURUV$VVHPEOLQJ&RGHLVDVVHPEOHGDVLWLVHQWHUHGRUORDGHG$VVHPEO\FRGHDSSHDUVLQWKHGHIDXOWZLQGRZRQWKHULJKWVLGHRIWKHVFUHHQ$VVHPEOHGFRGHFDQEHVDYHGDWDQ\WLPHXVLQJWKHRFRPPDQG,QWHUSUHWLQJ&RGHFDQEHH[HFXWHGHLWKHUIURPDORDGHGSURJUDPRUIURPDFRPPDQGSURPSWEHORZDQGDOOUHSUHVHQWHVVHQWLDOO\WKHVDPHEDVLFIDFW%XWWKLVLVRQO\DSUREOHPZKHQQRWDWLRQVWKHPVHOYHVDUHXVHGWRGRFDOFXODWLRQVDVZHGRZLWKSHQFLODQGSDSHU:KHQFDOFXODWLRQVDUHGRQHZLWKSK\VLFDOWRNHQVVXFKDVEHDGVRQDQDEDFXVRUZLWKSHEEOHVWKLVLVQRORQJHUDSUREOHP,QIDFWWKLVNLQGRIQRWDWLRQPD\KDYHVHUYHGWRSUHYHQWUHDGLQJHUURUV$Q\RQHZKRKDVUHFHLYHGZKHQFDVKLQJDFKHFNZLOOXQGHUVWDQGWKLVSRLQW%XWZKHQWKHQRWDWLRQVWKHPVHOYHVDUHXVHGWRGRWKHFDOFXODWLRQVLWLVEHWWHUWRKDYHDQRWDWLRQDOV\VWHPZKLFKEULQJVRXWVXFKEDVLFVLPLODULWLHVDVWKHIROORZLQJ3ODFHKROGLQJV\VWHPVGRWKLV3ODFHKROGLQJQXPHUDOVVRPHWLPHVOHVVV\PSDWKHWLFDOO\UHIHUUHGWRDVKHDWKHQF\SKHUVZHUHSRSXODUL]HGLQ(XURSHDURXQGWKH\HDUE\/HRQDUGRRI3LVDDOVRNQRZQDV)LERQDFFL)LERQDFFLZDVSUHVXPDEO\UHO\LQJRQDZRUNZULWWHQLQ$UDELFE\DO.KZkUL]PLZKRVHQDPHZHVHHLQWKHZRUGDOJRULWKPDURXQGWKH\HDULQ%DJKGDG/LNHDOO(XURSHDQVFKRODUVRIWKHGD\)LERQDFFLZDVQHFHVVDULO\YHUVHGLQ$UDELF$OOWKHQXPHUDWLRQV\VWHPVGLVFXVVHGLQWKLVERRNLQFOXGLQJWKHGHFLPDOV\VWHPZHXVHHYHU\GD\DUHSODFHKROGLQJV\VWHPV%HIRUHSURFHHGLQJWRQRQGHFLPDOV\VWHPVOHWXVFRQVLGHUWKHUROHWKDWEDVHWHQSOD\VLQWKH86PRQHWDU\V\VWHP3XUHO\'HFLPDO0RQH\7KHFXUUHQW86PRQHWDU\V\VWHPZDVDGRSWHGIROORZLQJWKHLQWURGXFWLRQRIWKHPHWULFV\VWHPLQ)UDQFHLQWKH5HYROXWLRQRI7KHSXUSRVHRIERWKRIWKHVHH[WHQVLRQVRIWKHGHFLPDOV\VWHPZDVWRVLPSOLI\FDOFXODWLRQVE\EULQJLQJPRQHWDU\DQGPHDVXUHPHQWXQLWVLQWRKDUPRQ\ZLWKWKHGHFLPDOV\VWHPXVHGWRUHSUHVHQWQXPEHUV7REULQJWKHDOLJQPHQWRIWKHPRQHWDU\DQGQXPHUDOV\VWHPVLQWRVKDUSUHOLHIOHWXVLPDJLQHDSDUHGGRZQYHUVLRQRIWKH86PRQHWDU\V\VWHPWKDWLQFOXGHVRQO\SHQQLHVGLPHVELOOVGROODUELOOVGROODUELOOVGROODUELOOVDQGVRRQGLPH...

... 6XSSRVHZHZDQWDSURJUDPZKLFKH[HFXWHVWKLVDOJRULWKPDQGFRXQWVKRZPDQ\VWHSVDUHUHTXLUHGXQWLOWKHYDOXHRI[EHFRPHV6LQFHLWUHTXLUHVDORRSWRGHWHUPLQHZKHWKHUDQXPEHULVHYHQRURGGRUWRGLYLGHLWE\LIZHDUHXVLQJRQO\DGGVXEWUDFWDQGFRQGLWLRQDOMXPSFRPPDQGVLWPDNHVVHQVHWRGHYLVHDVXESURJUDPWRGRWKLV6SHFLILFDOO\VXSSRVHZHDVVLJQWKHVXESURJUDPWKHWDVNRIH[DPLQLQJWKH($;UHJLVWHUDQGVWRULQJKDOIRI($;LQ(%;LI($;LVHYHQDQG]HURLQ(%;RWKHUZLVH:HPD\FRGHWKLVVXESURJUDPDVIROORZV3URJUDP+$)029(&;($;029(%;$ *1  ,1& amp;(%;&RXQWWKHVXEWUDFWLRQV68%(&;5HSHDWHGO\VXEWUDFW-*$ *1 -=' 81 ,WFRPHVRXWHYHQ029(%;,WVQRWHYHQ' 81 5(7:LWKWKLVVXESURJUDPZHPD\QRZZULWHDPDLQSURJUDPZKLFKH[HFXWHV3URJUDP3DUDPHWHU3DVVLQJ2QHRIWKHPRVWLPSRUWDQWIXQFWLRQVRIWKHVWDFNLVWKDWLWLVXVHGIRUSDUDPHWHUSDVVLQJ)RUH[DPSOHVXSSRVHWKHFKDUDFWHUFRGHFRQYHUWLQJIXQFWLRQWRORZHULVFDOOHGLQD&SURJUDP7KHWRORZHUIXQFWLRQLQWKHVWDQGDUG&OLEUDU\FW\SHKFRQYHUWVWKHFKDUDFWHUFRGHVWRORZHUFDVH)RUH[DPSOHRQDPDFKLQHXVLQJ$6&,,FRGHLWZLOOUHWXUQWKH$6&,,FRGHIRUDLIJLYHQWKH$6&,,:KHQDSDJHIDXOWRFFXUVVRPHSDJHIUDPHLQ5$0KDVWREHFKRVHQVRWKDWWKHQHHGHGSDJHPD\EHORDGHGLQWRLWIURPWKHGLVN,IQRSDJHIUDPHLVIUHHWKHQVRPHSDJHRIPHPRU\KDVWREHFKRVHQIRUWUDQVIHUWRWKHGLVNVRDVWRIUHHXSDSDJHIUDPH7KLVPHPRU\SDJHLVFRSLHGWRWKHGLVNDQGWKHSDJHFRQWDLQLQJWKHPLVVHGDGGUHVVLVFRSLHGLQWR5$07KHUHDUHPDQ\GLIIHUHQWDOJRULWKPVLQXVHZKLFKFKRRVHSDJHVWREHH[SHOOHGIURPPHPRU\6XFKDOJRULWKPVDUHUHIHUUHGWRDVSDJLQJDOJRULWKPV0DQ\SDJLQJDOJRULWKPVFKRRVHSDJHVIRUH[SXOVLRQRQWKHEDVLVRIXVDJH8QXVHGSDJHVJHWH[SHOOHG.HUQHO$GGUHVVHV$OWKRXJK/LQX[PD\DQGRIWHQGRHVDOORFDWHWKHVDPHYLUWXDODGGUHVVHVWRGLIIHUHQWWDVNVLWXVHVDVSHFLDOVHWRIYLUWXDODGGUHVVHVIRUNHUQHOPHPRU\DQGWKHVHDUHQHYHUGXSOLFDWHGz ... ILE[SULQWIG?Q\`&KDSWHU/ ,18 ;86(5352*5$06$WWKHEHJLQQLQJRIFKDSWHULWZDVQRWHGWKDWPHPRU\DGGUHVVHVXVHGLQ/LQX[XVHUSURJUDPVDUHQRWWUXHPHPRU\DGGUHVVHV7KHPDLQUHDVRQIRUWKLVLVWKDW/LQX[QHHGVWRSUHYHQWWKHXVHUIURPKDYLQJGLUHFWDFFHVVWRPHPRU\6HH)LJXUH)LJXUH3URWHFWHG2SHUDWLQJ6\VWHPVXFKDV/LQX[/LQX[LVDPXOWLWDVNLQJV\VWHP$PXOWLWDVNLQJV\VWHPKDVPDQ\XVHUMREVDQGDQRSHUDWLQJV\VWHPZKLFKDUHDOOUXQQLQJDWRQFH2QDPDFKLQHZKHUHDQ\MREFDQRYHUZULWHWKHPHPRU\EHORQJLQJWRDQRWKHUMREDPXOWLWDVNLQJV\VWHPLVLPSRVVLEOH0XOWLWDVNLQJUHTXLUHVPHPRU\SURWHFWLRQ/LQX[XVHVSDJLQJWRLPSOHPHQWDPHPRU\SURWHFWLRQV\VWHP3DJLQJZDVRULJLQDOO\GHVLJQHGDVDV\VWHPIRUHFRQRPL]LQJRQPHPRU\/LQX[XVHVLWIRUWKLVSXUSRVHDVZHOODVIRUPHPRU\SURWHFWLRQ3DJLQJZRUNVE\LQWHUFHSWLQJHDFKPHPRU\DFFHVVHQFRXQWHUHGLQWKHXVHUVPDFKLQHFRGH,QRWKHUZRUGVHYHU\PHPRU\UHIHUHQFHLQDXVHUSURJUDPLVWXUQHGLQWRDUHTXHVWIRUPHPRU\DFFHVVZKLFKLVUHTXLUHGWRJRDFURVVWKHGHVNRIWKHSDJLQJV\VWHPIRUDSSURYDO7KLVPHDQVWKDWSDJLQJJHWVFRQWURORYHUPHPRU\DFFHVV,QRUGHUIRUWKLVWRKDSSHQWKHSURFHVVRUKDVWRKDYHSDJLQJZLUHGLQWRLW1HLWKHUWKHQRUWKHSURFHVVRUVVXSSRUWSDJLQJ7KHILUVW,QWHOSURFHVVRUZLWKSDJLQJVXSSRUWLVWKH7KH*OREDO$VVHPEOHU'LUHFWLYH,QWKHRILOHVSURGXFHGE\WKHJQXFRPSLOHUV\PEROVVXFKDVSULQWIRUWRORZHUZKLFKQHHGH[WHUQDOOLQNDJHDUHFRGHGGLIIHUHQWO\LQWKHV\PEROWDEOHV:LWKRXWWKLVVSHFLDOFRGLQJWKHJQXOLQNHUZLOOSDVVWKHPE\DQGOLQNDJHZLOOIDLO,QRUGHUWRUHFHLYHWKLVVSHFLDOHQFRGLQJWKHDVVHPEO\ODQJXDJHVRXUFHFRGHPXVWVSHFLDOO\LQGLFDWHV\PEROVZKLFKDUHWRUHFHLYHWKLVWUHDWPHQW7KHUHLVDQDVVHPEOHUGLUHFWLYHUHFRJQL]HGE\WKHJQXDVVHPEOHUDQGE\(GOLQDVZKLFKZLOOFDXVHWKHDVVHPEOHUWRHQFRGHDV\PEROLQWKHV\PEROWDEOHDVDYDLODEOHIRUOLQNDJH,WVV\QWD[LVJOREOV\PERO,Q 1$ 60WKHV\QWD[LVJOREDOV\PERO&DOOLQJ$VVHPEOHUIURP&7KH+$)VXESURJUDPZRXOGQRWZRUNLIFDOOHGIURP&EHFDXVHLWGRHVQRWUHWXUQYDOXHVLQWKH($;UHJLVWHU$OVRLWGRHVQRWSXVKWKHUHJLVWHUVLWXVHV,QWKHFRGHEHORZ(&;LVSXVKHGEHFDXVHLWLVXVHGDQGWKHFDOOLQJSURJUDPFRXOGEHXVLQJLWIRUVRPHWKLQJHOVH:HDOVRQHHGWRPDNHWKHIXQFWLRQQDPHYLVLEOHXVLQJWKHJOREDOGLUHFWLYH:HKDYHMXVWZULWWHQDIXQFWLRQLQDVVHPEOHUZKLFKZHFDQFDOOIURPD&SURJUDP7KH&SURJUDPZLOOVWRUHWKHFDOOLQJSDUDPHWHURQWKHVWDFN,WZLOOEHEXULHGXQGHUWKHUHWXUQDGGUHVVSXVKHGE\WKHFDOOLQJSURJUDPDQGWKHFRQWHQWVRI(&;ZKLFKZHUHMXVWSXVKHG7KHVHWZRLWHPVRFFXS\HLJKWE\WHVRQWKHVWDFNVRWKHFDOOLQJSDUDPHWHULVDFFHVVHGDWWKHDGGUHVV(637KHUHVXOWLVVWRUHGLQ($;LQVWHDGRI(%;7RVDYHWKHREMHFWFRGHDVDRILOHZKLOHLQ(GOLQDVXVHWKHRNH\7RSURGXFHDQREMHFWFRGHILOHXVLQJ 1$ 60HQWHU3URJUDPJOREDOKDOIRUJOREOLQ(GOLQDVKDOI386+(&;(&;LVXVHGVRSXVKLW029(&;>(63@6WDFNWRSLQWHJHUV029($;$ *1  ,1& amp;($;&RXQWWKHVXEWUDFWLRQV68%(&;5HSHDWHGO\VXEWUDFW-*$ *1 -=' 81 ,WFRPHVRXWHYHQ029($;,WVQRWHYHQ' 81 323(&;5(7OLQX[ER[QDVPIHOIKDOIDVP7KHIHOIVZLWFKVSHFLILHVWKHIRUPDWRIWKHREMHFWFRGHILOHZKLFKLQFXUUHQW/LQX[LVHOI7KLVIRUPDWLVGLVFXVVHGIXUWKHULQFKDSWHU3URJUDPLVD&SURJUDPZKLFKFDOOVWKHIXQFWLRQKDOIZKRVHDVVHPEO\FRGHLVVKRZQLQ3URJUDP,I3URJUDPLVVDYHGLQDILOHFROODW]FWKHQWRFRPSLOHLWDQGOLQNLWZLWKKDOIXVHJFFRQERWKILOHVOLQX[ER[JFFFROODW]FKDOIR5HFXUVLRQ,QUHFXUVLRQPXFKRIWKHZRUNRIFRPSXWDWLRQLVGRQHE\WKHSDUDPHWHUSDVVLQJPHFKDQLVP%HIRUHYHUVLRQRI/LQX[WKHVHSDUDWLRQRINHUQHODQGXVHUPHPRU\ZDVDFFRPSOLVKHGXVLQJWKHVHJPHQWDWLRQSURFHVV/LQX[FXUUHQWO\PDNHVQRXVHRIVHJPHQWDWLRQ1RZWKHVHSDUDWLRQLVDFFRPSOLVKHGVLPSO\DVDQDOORFDWLRQSROLF\7KLVLQFLGHQWDOO\PDNHV[/LQX[PRUHOLNH$OSKD/LQX[7KH$OSKDDUFKLWHFWXUHKDVQRVHJPHQWDWLRQ6HJPHQWDWLRQLVGLVFXVVHGLQFKDSWHUVDQG.HUQHO3DJHV7KH/LQX[SDJLQJDOJRULWKPQHYHUSDJHVNHUQHOPHPRU\RXWWRGLVN7KH/LQX[NHUQHOLVWKHUHIRUHDOZD\VLQ5$07KLVLVRQHUHDVRQWKDWFRPSLOLQJ/LQX[VSHFLDOO\IRUHDFKPDFKLQHLVZRUWKZKLOH,IWKHNHUQHOLVFRPSLOHGZLWKFRGHZKLFKLVQWQHHGHGVXFKDVGHYLFHGULYHUVIRUGHYLFHVWKHPDFKLQHGRHVQWKDYH5$0ZLOOEHSHUPDQHQWO\RFFXSLHGE\FRGHZKLFKLVQHYHUXVHG,WLVDOVRWKHUHDVRQWKDWPDFKLQHVUHTXLUHDSSUR[LPDWHO\0HJRI5$0GHSHQGLQJRQWKH/LQX[YHUVLRQWRUXQ/LQX[DWDOO.HUQHO0RGXOHV$OWKRXJKNHUQHOPHPRU\LVQHYHUWRXFKHGE\WKHSDJLQJV\VWHPLWKDVEHHQSRVVLEOHVLQFH/LQX[YHUVLRQWRDGGRUGHOHWHFKXQNVRINHUQHOPHPRU\SURYLGHGWKH\KDYHEHHQFRPSLOHGVHSDUDWHO\DVPRGXOHV7KHFRPPDQGVOLQX[ER[LQVPRGPRGXOHIRULQVWDOOPRGXOHDQGOLQX[ER[UPPRGPRGXOHIRUUHPRYHPRGXOHGRFKDQJHWKHDPRXQWRI5$0RFFXSLHGE\WKHNHUQHO7RLQVSHFWPHPRU\WRILQGRXWWKHDPRXQWRIPHPRU\DYDLODEOHWKH/LQX[FRPPDQGOLQX[ER[IUHHLVXVHIXO$GGUHVV7UDQVODWLRQ/LQX[XVHUPHPRU\DGGUHVVHVDUHYLUWXDODGGUHVVHVQRWDFWXDOSK\VLFDODGGUHVVHV/LQX[XVHVSDJLQJWRWUDQVODWHYLUWXDODGGUHVVHVWR5$0DGGUHVVHV[SDJLQJREWDLQVLWVWUDQVODWLRQVIURPSDJHWDEOHVVHWXSE\WKHRSHUDWLQJV\VWHP6LQFHWKHWUDQVODWLRQSURFHVVLVKDUGZLUHGLQWRWKHSURFHVVRU[SDJHWDEOHVPXVWKDYHWKHWZRWLHUHGVWUXFWXUHVKRZQLQ)LJXUH)LJXUH[3DJH7DEOH6WUXFWXUHFRPSXWDWLRQLVILQLVKHGWKH\PD\EHUHVWRUHGDJDLQ7KHIROORZLQJFRGHGRHVWKLV386+($;386+(%;&RPSXWDWLRQ323(%;323($;7KHRUGHURIWKHSRSVLVWKHH[DFWUHYHUVHRIWKHRUGHURIWKHSXVKHV7KLVLVEHFDXVHRIWKHODVWVWRUHGILUVWUHWULHYHGFKDUDFWHURIDVWDFN7KHYDOXHVLQ($;DQG(%;DWWKHHQGVKRXOGEHWKHVDPHDVDWWKHEHJLQQLQJ%XWWKLVZLOORQO\EHWUXHLIWKHLQWHUYHQLQJFRPSXWDWLRQXVHVWKHVWDFNUHVSRQVLEO\7KLVPHDQVWKDWHDFKSXVKVKRXOGEHPDWFKHGZLWKDSRS,ISXVKHVDQGSRSVDUHQRWEDODQFHGWKHQWKHYDOXHVSRSSHGLQWR(%;DQG($;DWWKHHQGRIFRPSXWDWLRQZLOOQRWEHWKHVDPHDVWKHLURULJLQDOYDOXHV:KHQZULWLQJDXVHUSURJUDPWREHUXQLQ8QL[LWLVQRWQHFHVVDU\WRLQLWLDOL]HWKHVWDFNE\VWRULQJDYDOXHLQ(63,QIDFWVLQFHWKHVWDFNLVDOUHDG\VHWXSVWRULQJDQDUELWUDU\YDOXHLQ(63ZRXOGGLVUXSWWKHH[LVWLQJVWDFNDQGFUDVKWKHSURJUDP:KHQZULWLQJDSURJUDPWRUXQLQ(GOLQDVKRZHYHULWLVQHFHVVDU\WRLQLWLDOL]H(636XESURJUDPV+LJKOHYHOSURJUDPPLQJODQJXDJHVXVHVXESURJUDPVLQRUGHUWRUHGXFHFRPSOH[WDVNVWRVLPSOHUFRPSRQHQWV,Q&VXESURJUDPVDUHIXQFWLRQV$IXQFWLRQPD\EHFDOOHGDVWKRXJKLWZHUHDQRWKHU&LQVWUXFWLRQ,IWKHIXQFWLRQVXESUKDVEHHQGHILQHGWKHQLWPD\DSSHDULQDOLQHRIDPDLQSURJUDPDVLQ3URJUDP3URJUDPPDLQ^LQW[\]VXESU7KLVVXESURJUDPLVGHILQHGVHSDUDWHO\`7KH&$//DQG5(7&RPPDQGV&RGLQJDQDVVHPEOHUSURJUDPZKLFKKDVDVXESURJUDPLVGRQHXVLQJWKH&$//DQG5(7LQVWUXFWLRQV5(7VWDQGVIRUUHWXUQ7KHVHFRPPDQGVZRUNOLNHMXPSWRDQGMXPSEDFNFRPPDQGV7KHIRUPDWRIWKH&$//LQVWUXFWLRQLVYHU\VLPLODUWRWKHIRUPDWRIWKH-03LQVWUXFWLRQ3URJUDPVXESU^LQWDEFUHWXUQF`&$//ODEHO$VZLWKWKH-03LQVWUXFWLRQWKHODEHOLVFUHDWHGE\WKHSURJUDPPHUDQGUHIHUVWRWKHOLQHZKRVHODEHOILHOGLWRFFXSLHV:KHQWKHVXESURJUDPLVGRQHFRQWUROQHHGVWREHWUDQVIHUUHGEDFNWRWKHPDLQSURJUDPLQSDUWLFXODUWKHQH[WLQVWUXFWLRQH[HFXWHGLQWKHPDLQSURJUDPQHHGVWREHWKHLQVWUXFWLRQIROORZLQJWKH&$//LQVWUXFWLRQ7RPDNHWKLVSRVVLEOHWKHSURFHVVRUSXVKHVWKHDGGUHVVRIWKHQH[WLQVWUXFWLRQRQWRWKHVWDFNEHIRUHLWOHDYHVWKH7KLVELWLILWLVGRHVQRWEORFNDFFHVV,ILWLVLWLVFKHFNHGDJDLQVWDWZRELWSULYLOHJHYDOXHVWRUHGLQDVSHFLDOUHJLVWHUFDOOHGWKH&3/UHJLVWHU7KLVUHJLVWHUDQGWKHSULYLOHJHOHYHOVVWRUHGLQLWDUHGLVFXVVHGLQFKDSWHUVHFWLRQ$FFHVVLVEORFNHGLIWKHYDOXHLQWKH&3/UHJLVWHULV:KHQXVHUSURJUDPVDUHUXQQLQJWKH&3/UHJLVWHUKROGV7KLVLVWKHEDVLFSURWHFWLRQWKDWNHUQHOPHPRU\KDVDJDLQVWDFFHVVE\XVHUSURJUDPV3DJLQJ3DJH7DEOHV(QWULHVLQWKHSDJHWDEOHWDEOHORRNMXVWOLNHHQWULHVLQWKHSDJHWDEOH7KHSUHVHQWELWLQHDFKPHDQVWKHVDPHWKLQJ,ILWLVFOHDUHGLWPHDQVWKDWWKHVRXJKWDIWHULWHPLVQRWSUHVHQW-XVWDVDSDJHRIVRPHSURFHVVVPHPRU\FDQEHSDJHGRXWWRGLVNVRFDQDSDJHWDEOH-XVWDV.RIDGGUHVVVSDFHLQDSDJHFDQEHPDUNHGDVXQDOORFDWHGVRFDQWKH0HJRIDGGUHVVVSDFHXQGHUDSDJHWDEOHEHPDUNHGDVXQDOORFDWHG$PLVVLQJSDJHWDEOHFDXVHVDSDJHIDXOWRUDVHJPHQWDWLRQIDXOWMXVWOLNHDPLVVLQJSDJHRIXVHUPHPRU\3URJUDP6HJPHQWV&RQVLGHU3URJUDP:KHQWKLVSURJUDPLVUXQWKHOLQHODEHOOHG$%&ZLSHVLWVHOIRXW7KLVSURJUDPLVDQH[DPSOHRIVHOIPRGLI\LQJFRGH2QFHXSRQDWLPHLQWKHEDGROGGD\VVHOIPRGLI\LQJFRGHZDVVRPHWLPHVXVHGWRVDYHDIHZE\WHVRIPHPRU\VSDFH7RGD\VHOIPRGLI\LQJFRGHLVQRWFRQVLGHUHGJRRGSURJUDPPLQJ7RP6KDQOH\SXWLWPRUHEOXQWO\ZKHQKHZURWHWKDWSURJUDPPHUVZKRFUHDWHVHOIPRGLI\LQJFRGHVKRXOGEHFDVWLQWRWKHSLWV2UGLQDULO\WKHRQO\UHDVRQWKDWDUXQQLQJSURJUDPLVPRGLILHGLVWKDWVRPHWKLQJKDVJRQHZURQJ5XQQLQJSURJUDPVVKRXOGQRWJHWPRGLILHG3URJUDP3URJUDPZKLFKVHOIGHVWUXFWV ,1 $/>@$%&029>$%&@$/5(71RQ:ULWHDEOH0HPRU\8QL[UHTXLUHVWKDWUXQQLQJSURJUDPVEHSURWHFWHGIURPDFFLGHQWDOPRGLILFDWLRQE\EHLQJVWRUHGLQPHPRU\ZKLFKLVQRWZULWHDEOH/LQX[XVHVELWRIWKHSDJHWDEOHHQWU\WRLPSOHPHQWWKLVUHTXLUHPHQW7KLVLVWKHELWPDUNHG:B5IRU:ULWH5HDGLQWKHGLDJUDP,IWKLVELWLVFOHDUHGWKHLQGH[HGSDJHLVQRWZULWHDEOH:KHQWKHSURFHVVRUHQFRXQWHUVDZULWHFRPPDQGVXFKDV029>+@$/WKLVELWLVFKHFNHG)LUVWWKHSDJHWDEOHHQWU\IRUWKHDGGUHVV+LVIHWFKHG$VVXPLQJWKHSUHVHQWELWLQWKHHQWU\IRUWKLVSDJHLVVHWWKHQEHFDXVHWKLVLQVWUXFWLRQLVDZULWHFRPPDQGELWWKHZULWHRUUHDGELWLVFKHFNHG,IWKLVELWLVQRWVHWWKHSURFHVVRUZLOOQRWH[HFXWHWKHLQVWUXFWLRQDQG/LQX[LVVXHVD6HJPHQWDWLRQ)DXOWHUURUPHVVDJH)DXOWVDUHGHVFULEHGLQJUHDWHUGHWDLOLQFKDSWHUVHFWLRQ8QL[SURWHFWVFRGHE\PDUNLQJLWDVQRQZULWHDEOH:ULWHDEOH0HPRU\'DWDVSDFHXVHGIRUFRPSXWDWLRQQHHGVWREHLQPHPRU\ZKLFKLVZULWHDEOH&RQVLGHU3URJUDP7KHODEHO;<=MXVWPDUNVVWRUHGGDWD7KHFRGHLVSHUIHFWO\)LJXUH$IWHU386+($;LVYHU\VLPLODUWR68%(63029>(63@($;%HFDXVHWKHVWDFNSRLQWHUSRLQWVWRWKHODVWRFFXSLHGORFDWLRQUDWKHUWKDQWKHILUVWXQRFFXSLHGORFDWLRQRIWKHVWDFND386+PXVWEHFDUULHGRXWE\VXEWUDFWLQJIURPWKHVWDFNSRLQWHUILUVWDQGWKHQWUDQVIHUULQJWKHE\WHVWRWKHVWDFNUDWKHUWKDQWKHRWKHUZD\DURXQG+DYLQJWKHVWDFNSRLQWHUSRLQWWRWKHILUVWDYDLODEOHORFDWLRQZRXOGEHDUHDVRQDEOHSROLF\LIDOOSXVKHVDQGSRSVZHUHWKHVDPHVL]H%XWVLQFHSXVKHVDQGSRSVPD\EHHLWKHUWZRRUIRXUE\WHVWKLVLVQRWDWHQDEOHSROLF\7KH323&RPPDQG7KHRSSRVLWHRSHUDWLRQLVFDOOHGDSRS/LNHWKH386+LQVWUXFWLRQ323WDNHVUHJLVWHUDQGPHPRU\RSHUDQGVZKLFKPD\EHHLWKHUWZRRUIRXUE\WHV8QOLNH386+LWGRHVQRWWDNHLPPHGLDWHRSHUDQGV$VZLWKSXVKHVWKHVL]HRIWKHRSHUDQGGHWHUPLQHVWKHQXPEHURIE\WHVWREHSRSSHG6LQFH%;LVDWZRE\WHUHJLVWHU323%;SRSVWZRE\WHVRIIWKHVWDFN323%;LVYHU\VLPLODUWR029%;>(63@$''(632QHXVHIRUWKHVWDFNLVVLPSO\IRUVWRUDJHZKHQWKHUHDUHQRWHQRXJKUHJLVWHUVDYDLODEOH6XSSRVHWKHUHDUHYDOXHVLQ($;DQG(%;ZKLFKDUHLPSRUWDQWDQGQHHGWREHVDYHGEXWWKDWDOVRDFRPSXWDWLRQKDVWREHGRQHZKLFKXVHVWKHUHJLVWHUV($;DQG(%;7KLVLVDVLWXDWLRQZKLFKFDOOVIRUXVLQJWKHVWDFN%HIRUHWKHFRPSXWDWLRQLVGRQHWKHYDOXHVLQWKHUHJLVWHUV($;DQG(%;PD\EHVDYHGRQWKHVWDFN$IWHUWKH0XOWLWDVNLQJ%HIRUHPXOWLWDVNLQJRSHUDWLQJV\VWHPVH[LVWHGFRPSXWHUSURJUDPVZHUHH[HFXWHGLQVHTXHQFHLHRQHDIWHUWKHRWKHU1RSURJUDPZDVDEOHWREHJLQH[HFXWLQJXQWLOWKHSURJUDPDKHDGRILWZDVILQLVKHG2SHUDWLQJV\VWHPVZKLFKUDQSURJUDPVLQVHULHVOLNHWKLVZHUHFDOOHGEDWFKRSHUDWLQJV\VWHPV$PXOWLWDVNLQJV\VWHPDOORZVSURJUDPVWRWDNHWXUQVXVLQJSURFHVVRUV$QRSHUDWLQJV\VWHPSURJUDPFDOOHGWKHVFKHGXOHUDFWVDVDUHIHUHHDQGIRUFHVXVHUSURJUDPVWR\LHOGWRRQHDQRWKHUHYHQZKHQWKH\DUHQRWILQLVKHG$WDQ\JLYHQPRPHQWWKHUHPD\EHPDQ\XVHUSURJUDPVWDNLQJWXUQVDQGZDLWLQJIRUSURFHVVRUWLPH(DFKRIWKHVHSURJUDPVLVFDOOHGDWDVNRUDSURFHVV$GLVWLQFWLRQKDVWREHPDGHEHWZHHQDSURJUDPDQGDSURFHVVVLQFHRQHSURJUDPFDQEHFDOOHGVHYHUDOWLPHVE\VHYHUDOXVHUVDOODWRQFH(DFKVHSDUDWHLQVWDQFHRIDSURJUDPLVDSURFHVV,Q/LQX[ZHFDQOLVWWKHSURFHVVHVE\XVLQJWKHOLQX[ER[SVDX[FRPPDQG2UWRFRQGXFWDPRUHGHWDLOHGH[DPLQDWLRQZHFDQH[SORUHWKHSURFGLUHFWRU\$PXOWLWDVNLQJV\VWHPVXFKDV/LQX[LVFRQWLQXDOO\MXJJOLQJLWVSURFHVVRUUHVRXUFHVSDVVLQJWKHPIURPSURFHVVWRSURFHVV(DFKWLPHDSURFHVVJHWVEXPSHGIURPDSURFHVVRULWKDVWRVDYHLWVFXUUHQWVWDWH3DUWRIWKHZRUNRIVDYLQJLVGRQHE\DKDUGZLUHGURXWLQHZKLFKLVH[HFXWHGZKHQWKH[GRHVDWDVNVZLWFK,WVDYHVDOOFXUUHQWUHJLVWHUVWRDUHJLRQLQPHPRU\FDOOHGWKHWDVNVWDWHVHJPHQW7KHWDVNVWDWHVHJPHQWKROGVWKHIUR]HQVWDWHRIDWDVNZKLFKLVQRWFXUUHQWO\UXQQLQJ(YHU\WDVNKDVLWVRZQWDVNVWDWHVHJPHQW7KHVHWDVNVWDWHVHJPHQWVPDNHLWSRVVLEOHWRVZLWFKIURPRQHWDVNWRDQRWKHU)LJXUHVKRZVWKHEDVLFOD\RXWRIDWDVNVWDWHVHJPHQWLQFOXGLQJWKHVSDFHIRUDOOWKHJHQHUDOUHJLVWHUVDQGDUHJLVWHUFDOOHGWKH&5UHJLVWHU6RPHVSDFHWKDWLVXQPDUNHGLQWKLVILJXUHLVGLVFXVVHGLQFKDSWHU)LJXUH7DVN6WDWH6HJPHQW029$/>+@$VMXVWH[SODLQHGLQVHFWLRQDWDEOHHQWU\IRUWKLVDGGUHVVLVREWDLQHG7KLVHQWU\LVIRXUE\WHVLQVL]H,WVOHDVWVLJQLILFDQWELWLVFDOOHGWKHSUHVHQWELW,QWKHGLDJUDPVKRZQKHUHLWLVPDUNHG33IRUSDJHSUHVHQW:KHQWKHSUHVHQWELWLVVHWLWPHDQVWKDWWKHVRXJKWDIWHUSDJHLVORFDWHGLQ5$0,QWKLVFDVHWKHFDOOLQJSURJUDPLVOXFN\DQGWKHSDJHWDEOHHQWU\MXVWUHDGSURYLGHVWKHSK\VLFDODGGUHVVRIWKHSDJHFRQWDLQLQJWKHUHTXLUHGE\WH6LQFHDOOSDJHIUDPHVLQSK\VLFDOPHPRU\DUHVWRUHGDWDGGUHVVHVZKRVHERWWRPELWVDUH]HURWKHDGGUHVVFDQEHJLYHQXVLQJLWVXSSHUELWV7KDWLVZKDWWKHWRSELWVRIWKHSDJHWDEOHHQWU\SURYLGH2QFHWKHDGGUHVVRIWKHSDJHLVGHWHUPLQHGWKHPHPRU\UHDGLVFRPSOHWHGDVVKRZQLQVHFWLRQ0HPRU\3URWHFWLRQ:KHQWKHSUHVHQWELWLVQRWVHWWKHUHDUHWZRSRVVLELOLWLHV ... 'DWDVHJPHQWV6RPHSURJUDPVQHHGVSDFHLQWKHH[HFXWDEOHILOHZKHUHGDWDFDQEHZULWWHQ,WLVVWRUHGLQSDJHVZKRVH:ULWH5HDGELWLVVHW,WLVFDOOHGWKHGDWDVHJPHQW7H[WDQG'DWD6HFWLRQV-XVWDVDQH[HFXWDEOHILOHKDVVHJPHQWVDQREMHFWFRGHILOHKDVVHFWLRQV2QHRIWKHOLQNHUVMREVLVWRSXWWRJHWKHUDWH[WVHJPHQWIURPWKHWH[WVHFWLRQVRIDOOWKHREMHFWFRGHILOHVEHLQJOLQNHGDGDWDVHJPHQWIURPDOOWKHGDWDVHFWLRQVHWF/LQNHUVKDYHDORWRIZRUNWRGR:KRFUHDWHVWKHVHFWLRQVLQWKHREMHFWFRGHILOHV"2EMHFWFRGHILOHVDUHFUHDWHGE\DVVHPEOHUV6HFWLRQ'HILQLWLRQ'LUHFWLYHV$VVHPEOHUVGRQRWVHSDUDWHFRGHLQWRWH[WDQGGDWDVHFWLRQVDFWLQJRQWKHLURZQ$WOHDVWPRVWDVVHPEOHUVDUHQRWWKDWVPDUW7KHSURJUDPPHUQHHGVWRKHOSRXWE\XVLQJGLUHFWLYHVWKDWVSHFLI\ZKLFKFRGHJRHVLQWRZKLFKVHFWLRQ7KHIROORZLQJ 1$ 60GLUHFWLYHFDQEHXVHGWRLQLWLDWHVHFWLRQVVHFWLRQWH[WVSHFLILHVDWH[WVHFWLRQ6LPLODUO\VHFWLRQGDWDFRGHIRU$DVDQLQSXWSDUDPHWHU7KHLQSXWSDUDPHWHULVSXVKHGRQWRWKHVWDFN6RWKHDVVHPEOHUFRGHIRUWKHVDPHIXQFWLRQFDOOORRNVOLNHWKLV3URJUDP029(%;386+(%;029('; ,1 ($;>';@$%&&03($;-() ,1 ,I($; WKHQLWVRYHU ,1& amp;(';8VH(';DVWKHFRXQWHU&$//+$)7KLVLVWKHVXEURXWLQHFDOO&03(%;(%;...

... 7KHVHDUHWKHOLQHVIRUZKLFKWKHH[SUHVVLRQVS $1& apos; 12 7TDQG 12 7S $1& apos;TDUHWUXH+HQFHWKHH[SUHVVLRQKDVWKHVDPHWUXWKWDEOHDV;25DQGPD\EHXVHGWRFRQVWUXFWDFLUFXLWIRU;257KH%RROHDQH[SUHVVLRQS25T $1& apos; 12 7S $1& apos;TDOVRKDVWKHVDPHWUXWKWDEOH7KHUHIRUHWKHORJLFFLUFXLWZKLFKFRUUHVSRQGVWRWKLVH[SUHVVLRQDOVRZRUNVDVDQ;25FLUFXLW7KDWFLUFXLWORRNVOLNHWKLV6XSSRVH\RXKDGWRUHDGRQHRIWKHVHWRDKDUGZDUHVXSSRUWSHUVRQRYHUWKHSKRQHRUFRS\LWRQWRDSRVWFDUG,VWKHUHDQ\GRXEWWKDWXVLQJKH[ZRXOGEHHDVLHUDQGOHVVOLDEOHWRHUURU"&RPSXWHUSURJUDPVRULJLQDOO\FRQVLVWHGRIOLQHDIWHUOLQHRIELQDU\FRGH7KHUHLVDELWWHUVZHHWLURQ\KHUH)LOOLQJRXWFRGLQJVKHHWVZLWK]HURVDQGRQHVZDVDMREW\SLFDOO\GRQHE\ZRPHQ$VDUHVXOWPDQ\ZRPHQJRWLQRQWKHYHU\EHJLQQLQJRIWKHFRPSXWHUSURJUDPPLQJILHOG:K\QRW2FWDO"2FWDOQXPEHUVFDQEHFRQYHUWHGEDFNDQGIRUWKIURPELQDU\LQWKHVDPHZD\DVKH[QXPEHUVPHUHO\JURXSLQJE\WKUHHVLQVWHDGRIIRXUV2FWDODOVRKDVWKHDGYDQWDJHRYHUKH[LQWKDWQRDOSKDEHWLFQXPHUDOVDUHQHHGHG+RZHYHUWKHLQFUHDVLQJO\ZLGHVSUHDGXVHRIWKHE\WHDVWKHIXQGDPHQWDOXQLWRIPHPRU\KDVOHGWRDGHFUHDVHLQWKHLPSRUWDQFHRIRFWDO%DVH'LVWLQJXLVKLQJ1RWDWLRQV6LQFHDOOWKHGLJLWVLQGHFLPDODUHYDOLGLQKH[DGHFLPDOLWLVQRWSRVVLEOHWRGHWHUPLQHZLWKRXWDGGLWLRQDOLQIRUPDWLRQZKHWKHUQXPHUDWLRQVXFKDVLVLQWHQGHGDVGHFLPDORUKH[$FRPPRQFRQYHQWLRQIRULQGLFDWLQJKH[DGHFLPDOLVWKHXVHRIDQDSSHQGHG+:KHQWKLVFRQYHQWLRQLVXVHGMXVWPHDQVILIW\EXW+PHDQVILIW\LQKH[LHHLJKW\2FFDVLRQDOO\SDUWLFXODUO\ZLWKDVVHPEOHUV%DQG'DUHDSSHQGHGWRLQGLFDWHELQDU\DQGGHFLPDO$SSHQGLQJ2IRURFWDOZRXOGREYLRXVO\QRWEHDJRRGLGHD,QWKH&ODQJXDJHRFWDOLVLQGLFDWHGE\SUHSHQGLQJDDQGKH[DGHFLPDOLVLQGLFDWHGE\SUHSHQGLQJD[7KLVERRNSODFHVSULPDU\UHOLDQFHRQGHFLPDOKH[DGHFLPDODQGELQDU\QXPHUDWLRQ7RGLVWLQJXLVKWKHVHEDVHVWKHIROORZLQJFRQYHQWLRQVZLOOEHXVHGz ... 7KHHQGUHVXOWRIWKHSURFHVVLVWKDW\LVVHWWRWKHYDOXH1RWLFHWKDWWKH25RSHUDWRUQHYHUVDZWKHYDOXHRI[,WQHHGVRQO\VDQGVWRGRLWVMRE&RQVHTXHQWO\WKHZRUNLQJVRIWKH25RSHUDWRUFDQEHGHVFULEHGLQDWUXWKWDEOHMXVWOLNHWKHWUXWKWDEOHIRUWKH 12 7JDWH7DEOHVKRZVWKHWUXWKWDEOHIRUWKH25RSHUDWRU,QWUXWKWDEOHVIRU%RROHDQRSHUDWRUVWKHOHWWHUVSDQGTDUHRIWHQXVHGDVYDULDEOHVIRUWKHWUXWKYDOXHVDQG9DULDEOHVZKLFKKDYHRQO\WKHVHWZRSRVVLEOHYDOXHVDUHVRPHWLPHVFDOOHG%RROHDQYDULDEOHV1RWLFHWKDWWKHGHFLVLRQPDGHLQWKH&H[DPSOHFRXOGKDYHEHHQLQIHUUHGIURPWKHVHFRQGOLQHRI7DEOH7KH $1& apos;2SHUDWRU7KH $1& apos;RSHUDWRUFDQDOVREHGHVFULEHGZLWKDWUXWKWDEOH6HH7DEOH7KHQH[WH[DPSOHVKRZVWKHXVHRIWKLVWDEOHLQHYDOXDWLQJD&ODQJXDJHVWDWHPHQWFRQWDLQLQJDQ $1& apos;RSHUDWRUz ... $JDWHWHUPLQDOFRQQHFWHGGLUHFWO\RULQGLUHFWO\WRWKHQHJDWLYHEDWWHU\RUSRZHUVXSSO\WHUPLQDOLVGHVFULEHGDVEHLQJDWORJLF%HFDXVHWKHLQSXWWHUPLQDOVDUHJHQHUDOO\FRQQHFWHGGLUHFWO\RULQGLUHFWO\WRWKHEDWWHU\RUSRZHUVXSSO\WHUPLQDOVMXVWOLNHRXWSXWWHUPLQDOVWKH\FDQDOVREHGHVFULEHGDVEHLQJDWORJLFRUDWORJLF7KHIDFWWKDWWKHLQSXWWHUPLQDOVDUHGHVLJQHGWREHDWORJLFRUORJLFKDVDVDIXUWKHUFRQVHTXHQFHWKDWWKHRXWSXWRIRQHORJLFJDWHFDQEHFRQQHFWHGWRWKHLQSXWRIDQRWKHUZLWKSUHGLFWDEOHUHVXOWV%HKDYLRURIWKH 12 7*DWH7KH 12 7JDWHLVDORJLFJDWHZKLFKKDVRQHLQSXWWHUPLQDO7RGHVFULEHWKHEHKDYLRURIWKH 12 7JDWHDOOWKDWLVQHHGHGLVWRGHVFULEHKRZLWVLQSXWGHWHUPLQHVLWVRXWSXW7KHUXOHVDUHz...

... +WKHFRPPDQGLVWKHVDPHDVWKHFRPPDQG029$;+7KHYDOXHDVVLJQHGWRWKHORFDWLRQPXVWILW7KHFRPPDQG029$/LVQRWYDOLGEHFDXVHZLOOQRWILWLQWRDQHLJKWELWUHJLVWHU 1$ 60DQG(GOLQDVDOORZVLJQHGLQWHJHUV+HQFH029$/±LVYDOLGDQGGRHVWKHVDPHWKLQJDV029$/%XWLVQRWYDOLGLQ(GOLQDVEHFDXVHLVQRWLQWKHHLJKWELWVLJQHGUDQJH 1$ 60GRHVQWEDONXQWLOLWJHWVWR 1$ 60DOORZVFKDUDFWHUVWRUHSUHVHQW$6&,,FRGHV)RUH[DPSOH029$/±029$/$VWRUHVWKH$6&,,FRGHIRUWKHOHWWHU$ZKLFKLVLQ$/&RGHXVLQJELWUHJLVWHUVZLOOQRWUXQRQ[SURFHVVRUVSULRUWRWKH$OWKRXJKLWLVDFKDUDFWHULVWLFRIVRFDOOHGELWFRGHWRXVHELWUHJLVWHUVVRPHELWFRGHGRHVDOVR7KHDFWXDOGLIIHUHQFHEHWZHHQDQGELWFRGHLVGLVFXVVHGLQFKDSWHUVHFWLRQ029UHJUHJ029UHJUHJFRSLHVIURPWKHVHFRQGUHJLVWHULQWRWKHILUVW7KHWZRRSHUDQGFRPPDQGVGHVFULEHGLQWKLVERRNXVHWKHV\QWD[&200 $1& apos;GHVWLQDWLRQVRXUFH+HQFHWKHFRPPDQG7DEOH[*HQHUDO5HJLVWHUVELWELWELW$+$;($;$/%;(%;%+&;(&;%/';(';&+%3(%3&/63(63'+6,(6,'/',(',$FLUFXLWZKLFKDGGVIRXUGLJLWELQDU\QXPEHUVUHTXLUHVIRXUIXOODGGHUVJDQJHGWRJHWKHU7KLVLVZKDWWKHDGGLQJFLUFXLWVLQDIRXUELWSURFHVVRUORRNOLNH6KRZQKHUHLVWKHVDPHFDOFXODWLRQRIWKLUWHHQSOXVVL[LOOXVWUDWHGDWWKHEHJLQQLQJRIWKLVVHFWLRQ,QELQDU\WKDWLVSOXV7KHUHVXOWLQJWRWDOLV7KHUHLVDOVRDQRXWSXWFDUU\YDOXHRI7KHLQSXWFDUU\LVQRWXVHGKHUH6XUSULVLQJO\HQRXJKWKHUHLVDQHHGIRULWKRZHYHU:HZLOOVHHZKDWWKDWLVLQVHFWLRQ,WLVRQHRIWKHFKDUDFWHULVWLFVRIDIRXUELWSURFHVVRUWKDWLWDGGVELQDU\QXPEHUVIRXUELWVDWDWLPH$FRPSXWHUZLWKDIRXUELWSURFHVVRUZRXOGQRWEHOLPLWHGWRVPDOOQXPEHUDULWKPHWLFEXWLWVVRIWZDUHZRXOGQHHGWREUHDNODUJHQXPEHUVGRZQLQWRQXPEHUVQRELJJHUWKDQ6HTXHQWLDO&LUFXLWV,QDOOWKHFLUFXLWVVKRZQVRIDUWKHRXWSXWLVGHWHUPLQHGE\WKHLQSXWV%\XVLQJWKHWUXWKWDEOHVRIWKHFRPSRQHQWJDWHVRQHFDQFRQVWUXFWDWUXWKWDEOHIRUWKHZKROHFLUFXLW,WPLJKWVHHPWKDWWKLVVKRXOGEHWKHFDVHZLWKDOOORJLFFLUFXLWV+RZHYHULIDQRXWSXWLVIHGEDFNDURXQGWRDQLQSXWWKHQDYLFLRXVFLUFOHLVLQWURGXFHGLQWRWKHSURFHVVRIGHWHUPLQLQJWKHWUXWKWDEOH&LUFXLWVZLWKIHHGEDFNORRSVDUHFDOOHGVHTXHQWLDOFLUFXLWV&LUFXLWVZLWKRXWIHHGEDFNORRSVDUHQRWFDSDEOHRIVWRULQJORJLFYDOXHV7KHRXWSXWRID%RROHDQFLUFXLWLVDIXQFWLRQRILWVLQSXWVLWVSUHVHQWLQSXWV7KDWPHDQVIRUH[DPSOHLI\RXWULHGWRXVHD%RROHDQFLUFXLWDVDPHPRU\WKHQQRPDWWHUZKDW\RXGHFLGHGXSRQDVWKHPHPRU\IHWFKFRPPDQGWKLVLQSXWZRXOGDOZD\VSURGXFHWKHVDPHRXWSXWQDPHO\WKHRXWSXWVSHFLILHGE\WKHWUXWKWDEOHVRLWZRXOGQRWEHDWUXHPHPRU\IHWFK7KHRXWSXWIURPDWUXHPHPRU\IHWFKZRXOGGHSHQGXSRQZKDWZDVVWRUHGDWVRPHWLPHLQWKHSDVW6HTXHQWLDOFLUFXLWVDUHLPSRUWDQWEHFDXVHWKH\FDQVWRUHORJLFYDOXHV$)OLSIORS)LJXUHVKRZVDQH[DPSOHRIDFLUFXLWFDOOHGDIOLSIORS7KH6LQWKHILJXUHVWDQGVIRUVHWDQGWKH5VWDQGVIRUUHVHW7KHRXWSXWRIWKLVFLUFXLWPD\EHVHWLI6 ... +WKHFRPPDQGLVWKHVDPHDVWKHFRPPDQG029$;+7KHYDOXHDVVLJQHGWRWKHORFDWLRQPXVWILW7KHFRPPDQG029$/LVQRWYDOLGEHFDXVHZLOOQRWILWLQWRDQHLJKWELWUHJLVWHU 1$ 60DQG(GOLQDVDOORZVLJQHGLQWHJHUV+HQFH029$/±LVYDOLGDQGGRHVWKHVDPHWKLQJDV029$/%XWLVQRWYDOLGLQ(GOLQDVEHFDXVHLVQRWLQWKHHLJKWELWVLJQHGUDQJH 1$ 60GRHVQWEDONXQWLOLWJHWVWR 1$ 60DOORZVFKDUDFWHUVWRUHSUHVHQW$6&,,FRGHV)RUH[DPSOH029$/±029$/$VWRUHVWKH$6&,,FRGHIRUWKHOHWWHU$ZKLFKLVLQ$/&RGHXVLQJELWUHJLVWHUVZLOOQRWUXQRQ[SURFHVVRUVSULRUWRWKH$OWKRXJKLWLVDFKDUDFWHULVWLFRIVRFDOOHGELWFRGHWRXVHELWUHJLVWHUVVRPHELWFRGHGRHVDOVR7KHDFWXDOGLIIHUHQFHEHWZHHQDQGELWFRGHLVGLVFXVVHGLQFKDSWHUVHFWLRQ029UHJUHJ029UHJUHJFRSLHVIURPWKHVHFRQGUHJLVWHULQWRWKHILUVW7KHWZRRSHUDQGFRPPDQGVGHVFULEHGLQWKLVERRNXVHWKHV\QWD[&200 $1& apos;GHVWLQDWLRQVRXUFH+HQFHWKHFRPPDQG7DEOH[*HQHUDO5HJLVWHUVELWELWELW$+$;($;$/%;(%;%+&;(&;%/';(';&+%3(%3&/63(63'+6,(6,'/',(',$FLUFXLWZKLFKDGGVIRXUGLJLWELQDU\QXPEHUVUHTXLUHVIRXUIXOODGGHUVJDQJHGWRJHWKHU7KLVLVZKDWWKHDGGLQJFLUFXLWVLQDIRXUELWSURFHVVRUORRNOLNH6KRZQKHUHLVWKHVDPHFDOFXODWLRQRIWKLUWHHQSOXVVL[LOOXVWUDWHGDWWKHEHJLQQLQJRIWKLVVHFWLRQ,QELQDU\WKDWLVSOXV7KHUHVXOWLQJWRWDOLV7KHUHLVDOVRDQRXWSXWFDUU\YDOXHRI7KHLQSXWFDUU\LVQRWXVHGKHUH6XUSULVLQJO\HQRXJKWKHUHLVDQHHGIRULWKRZHYHU:HZLOOVHHZKDWWKDWLVLQVHFWLRQ,WLVRQHRIWKHFKDUDFWHULVWLFVRIDIRXUELWSURFHVVRUWKDWLWDGGVELQDU\QXPEHUVIRXUELWVDWDWLPH$FRPSXWHUZLWKDIRXUELWSURFHVVRUZRXOGQRWEHOLPLWHGWRVPDOOQXPEHUDULWKPHWLFEXWLWVVRIWZDUHZRXOGQHHGWREUHDNODUJHQXPEHUVGRZQLQWRQXPEHUVQRELJJHUWKDQ6HTXHQWLDO&LUFXLWV,QDOOWKHFLUFXLWVVKRZQVRIDUWKHRXWSXWLVGHWHUPLQHGE\WKHLQSXWV%\XVLQJWKHWUXWKWDEOHVRIWKHFRPSRQHQWJDWHVRQHFDQFRQVWUXFWDWUXWKWDEOHIRUWKHZKROHFLUFXLW,WPLJKWVHHPWKDWWKLVVKRXOGEHWKHFDVHZLWKDOOORJLFFLUFXLWV+RZHYHULIDQRXWSXWLVIHGEDFNDURXQGWRDQLQSXWWKHQDYLFLRXVFLUFOHLVLQWURGXFHGLQWRWKHSURFHVVRIGHWHUPLQLQJWKHWUXWKWDEOH&LUFXLWVZLWKIHHGEDFNORRSVDUHFDOOHGVHTXHQWLDOFLUFXLWV&LUFXLWVZLWKRXWIHHGEDFNORRSVDUHQRWFDSDEOHRIVWRULQJORJLFYDOXHV7KHRXWSXWRID%RROHDQFLUFXLWLVDIXQFWLRQRILWVLQSXWVLWVSUHVHQWLQSXWV7KDWPHDQVIRUH[DPSOHLI\RXWULHGWRXVHD%RROHDQFLUFXLWDVDPHPRU\WKHQQRPDWWHUZKDW\RXGHFLGHGXSRQDVWKHPHPRU\IHWFKFRPPDQGWKLVLQSXWZRXOGDOZD\VSURGXFHWKHVDPHRXWSXWQDPHO\WKHRXWSXWVSHFLILHGE\WKHWUXWKWDEOHVRLWZRXOGQRWEHDWUXHPHPRU\IHWFK7KHRXWSXWIURPDWUXHPHPRU\IHWFKZRXOGGHSHQGXSRQZKDWZDVVWRUHGDWVRPHWLPHLQWKHSDVW6HTXHQWLDOFLUFXLWVDUHLPSRUWDQWEHFDXVHWKH\FDQVWRUHORJLFYDOXHV$)OLSIORS)LJXUHVKRZVDQH[DPSOHRIDFLUFXLWFDOOHGDIOLSIORS7KH6LQWKHILJXUHVWDQGVIRUVHWDQGWKH5VWDQGVIRUUHVHW7KHRXWSXWRIWKLVFLUFXLWPD\EHVHWLI6 DQG5 ,QWKLVFDVHWKH $1& apos;JDWHIHGE\WKH5LQSXWLVIRUFHGWRRXWSXWD+HQFHERWKLQSXWVRQWKHRWKHU $1& apos;JDWHDUH+HQFHLWVRXWSXWLVDQGWKHILQDORXWSXWLV5HJLVWHUV$OWKRXJKWKH$OWDLUZDVDQHDUO\SXUHH[DPSOHRIDQHLJKWELWFRPSXWHUWKHSURFHVVRUGLGKDYHVRPHELWIHDWXUHV,QSDUWLFXODULWZDVGHVLJQHGVRWKDWLWFRXOGEHXVHGZLWKDELWPHPRU\DGGUHVVLQJV\VWHP,WGLGWKLVE\DOORZLQJWZRRIWKHHLJKWELWUHJLVWHUVWKH+DQGWKH/WRSDLUXSDQGIRUPDELWUHJLVWHUZKLFKFRXOGWKHQEHXVHGIRUDGGUHVVHV:KHQWKLVKLJKE\WHORZE\WHSDLUZDVUHIHUHQFHGE\DFRPPDQGDQ;ZDVXVHGLQWKHFRPPDQG)RUH[DPSOHWKHELWLQFUHPHQWFRPPDQGZDV ,1; 7KHHLJKWELWFRPPDQGZDV ,15 7KH;VWRRGIRUH[WHQGHGDQGZDVXVHGZKHQHYHUELWUHJLVWHUSDLUVZHUHEHLQJUHIHUHQFHG:KHQWKHELWSURFHVVRUVKRZQLQ)LJXUHZDVGHVLJQHGWKLV;ZDVUHFUXLWHGIRUXVHLQWKHELWUHJLVWHUGHVLJQDWLRQV$;%;&;DQG';7KHELWUHJLVWHUV$;%;&;DQG';DUHSDLUVRIKLJKDQGORZE\WHUHJLVWHUV$+DQG$/%+DQG%/&+DQG&/'+DQG'/7KHRWKHUELWUHJLVWHUV63%36,DQG',KDYHQR;LQWKHLUQDPHVDQGDUHQRWE\WHSDLUV7KHGDWDEXVKDVZLUHV$OVRVKRZQDUHWKH ... ,QWKLVFDVHWKH $1& apos;JDWHIHGE\WKH5LQSXWLVIRUFHGWRRXWSXWD+HQFHERWKLQSXWVRQWKHRWKHU $1& apos;JDWHDUH+HQFHLWVRXWSXWLVDQGWKHILQDORXWSXWLV5HJLVWHUV$OWKRXJKWKH$OWDLUZDVDQHDUO\SXUHH[DPSOHRIDQHLJKWELWFRPSXWHUWKHSURFHVVRUGLGKDYHVRPHELWIHDWXUHV,QSDUWLFXODULWZDVGHVLJQHGVRWKDWLWFRXOGEHXVHGZLWKDELWPHPRU\DGGUHVVLQJV\VWHP,WGLGWKLVE\DOORZLQJWZRRIWKHHLJKWELWUHJLVWHUVWKH+DQGWKH/WRSDLUXSDQGIRUPDELWUHJLVWHUZKLFKFRXOGWKHQEHXVHGIRUDGGUHVVHV:KHQWKLVKLJKE\WHORZE\WHSDLUZDVUHIHUHQFHGE\DFRPPDQGDQ;ZDVXVHGLQWKHFRPPDQG)RUH[DPSOHWKHELWLQFUHPHQWFRPPDQGZDV ,1; 7KHHLJKWELWFRPPDQGZDV ,15 7KH;VWRRGIRUH[WHQGHGDQGZDVXVHGZKHQHYHUELWUHJLVWHUSDLUVZHUHEHLQJUHIHUHQFHG:KHQWKHELWSURFHVVRUVKRZQLQ)LJXUHZDVGHVLJQHGWKLV;ZDVUHFUXLWHGIRUXVHLQWKHELWUHJLVWHUGHVLJQDWLRQV$;%;&;DQG';7KHELWUHJLVWHUV$;%;&;DQG';DUHSDLUVRIKLJKDQGORZE\WHUHJLVWHUV$+DQG$/%+DQG%/&+DQG&/'+DQG'/7KHRWKHUELWUHJLVWHUV63%36,DQG',KDYHQR;LQWKHLUQDPHVDQGDUHQRWE\WHSDLUV7KHGDWDEXVKDVZLUHV$OVRVKRZQDUHWKH...

... +%XW+UHTXLUHVDWOHDVWWHQELWVRIVWRUDJH7KLVPHDQVWKDWWKHGLYLGHQGUHPDLQGHUTXRWLHQWELWIRUP(';($;(';($;ELWIRUP';$;';$;ELWIRUP$;$+$/7KHFORVHVLPLODULW\RIPHPRU\DQG,2WUDQVIHUVLVQRWIXOO\UHIOHFWHGLQ[DVVHPEO\ODQJXDJHZKLFKKDVPDQ\FRPPDQGVLQYROYLQJPHPRU\DFFHVVEXWRQO\DIHZ ,1 DQG287IRUH[DPSOHFRQWUROOLQJ,2DFFHVV7KHXVHRI029DQGPDQ\RWKHUFRPPDQGVWRDFFHVVPHPRU\LVGLVFXVVHGLQFKDSWHUVHFWLRQ7KH ,1 DQG287FRPPDQGVDUHGLVFXVVHGQH[W7KH ,1 &RPPDQG7KHLQSXWFRPPDQGWUDQVIHUVGDWDIURPDQ,2SRUWLQWRWKHSURFHVVRU7KHUHDUHVL[YDOLGIRUPVRIWKLVFRPPDQG ,1 ($;>';@ ,1 $;>';@ ,1 $/>';@ ,1 ($;>LPP@ ,1 $;>LPP@ ,1 $/>LPP@ZKHUHLPPLVDQ\RQHE\WHQXPEHU1RWLFHWKDWWKHJHQHUDO&200 $1& apos;GHVWLQDWLRQVRXUFHIRUPDWLVDGKHUHGWRLQWKLVLQVWUXFWLRQ7KHYDOLGGHVWLQDWLRQUHJLVWHUVDUH($;$;DQG$/7KH,2GHYLFHZKRVHSRUWQXPEHULVVWRUHGLQ';RUJLYHQE\LPPLVWKHVRXUFH1RWLFHWKDW';LVDELWUHJLVWHU7KLVPDNHVVHQVHEHFDXVHDSRUWQXPEHULVDELWQXPEHU0RVW,QWHODVVHPEOHUVLQFOXGLQJ 1$ 60GRQRWXVHEUDFNHWVDURXQGWKHSRUWQXPEHU,I\RXGRKRZHYHU\RXFDQWKLQNRIWKHFRPPDQG ,1 $/>';@IRUH[DPSOHDVOHW$/ ... +%XW+UHTXLUHVDWOHDVWWHQELWVRIVWRUDJH7KLVPHDQVWKDWWKHGLYLGHQGUHPDLQGHUTXRWLHQWELWIRUP(';($;(';($;ELWIRUP';$;';$;ELWIRUP$;$+$/7KHFORVHVLPLODULW\RIPHPRU\DQG,2WUDQVIHUVLVQRWIXOO\UHIOHFWHGLQ[DVVHPEO\ODQJXDJHZKLFKKDVPDQ\FRPPDQGVLQYROYLQJPHPRU\DFFHVVEXWRQO\DIHZ ,1 DQG287IRUH[DPSOHFRQWUROOLQJ,2DFFHVV7KHXVHRI029DQGPDQ\RWKHUFRPPDQGVWRDFFHVVPHPRU\LVGLVFXVVHGLQFKDSWHUVHFWLRQ7KH ,1 DQG287FRPPDQGVDUHGLVFXVVHGQH[W7KH ,1 &RPPDQG7KHLQSXWFRPPDQGWUDQVIHUVGDWDIURPDQ,2SRUWLQWRWKHSURFHVVRU7KHUHDUHVL[YDOLGIRUPVRIWKLVFRPPDQG ,1 ($;>';@ ,1 $;>';@ ,1 $/>';@ ,1 ($;>LPP@ ,1 $;>LPP@ ,1 $/>LPP@ZKHUHLPPLVDQ\RQHE\WHQXPEHU1RWLFHWKDWWKHJHQHUDO&200 $1& apos;GHVWLQDWLRQVRXUFHIRUPDWLVDGKHUHGWRLQWKLVLQVWUXFWLRQ7KHYDOLGGHVWLQDWLRQUHJLVWHUVDUH($;$;DQG$/7KH,2GHYLFHZKRVHSRUWQXPEHULVVWRUHGLQ';RUJLYHQE\LPPLVWKHVRXUFH1RWLFHWKDW';LVDELWUHJLVWHU7KLVPDNHVVHQVHEHFDXVHDSRUWQXPEHULVDELWQXPEHU0RVW,QWHODVVHPEOHUVLQFOXGLQJ 1$ 60GRQRWXVHEUDFNHWVDURXQGWKHSRUWQXPEHU,I\RXGRKRZHYHU\RXFDQWKLQNRIWKHFRPPDQG ,1 $/>';@IRUH[DPSOHDVOHW$/ ... (%;-$DERYH($;!(%;-$(DERYHRUHTXDO($; (%; -1% QRWEHORZ($;"(%; -1% (QRWEHORZRUHTXDO($;"(%; -1$ QRWDERYH($;"(%; -1$ (QRWDERYHRUHTXDO($;"(%;/LQX[VILOHV2QHRIWKHLQWHUPHGLDWHVWHSVWKDWJFFXVHVLQWKHWUDQVODWLRQRID&VRXUFHSURJUDPLQWRDQDRXWILOHLVDQ029(';%$ ,1 ($;>';@('029(&;($;& ,1 ($;>';@('029(';($;&25'68%($;(&;%&-=*&'')) -16 1; 7)029($;(&;&029(&;(';%' 1; 7029(';($;'&-0325')(())))))*&'029($;(';'029(';%$$287>';@($;%()5(7&&/LWWOH(QGLDQ,PPHGLDWH&RGHV7KHILUVWDQGODVW029FRPPDQGVLQWKLVSURJUDPERWKFRQWDLQLPPHGLDWHYDOXHV%RWKRIWKHVHVWRUHIRXUE\WHYDOXHVLQIRXUE\WHUHJLVWHUV1RWLFHLQWKHODVW029FRPPDQGWKHIRXUE\WHLPPHGLDWHYDOXH+LVVWRUHGDV5HODWLYH-XPSV7KHMXPSHQFRGLQJXVHGE\[SURFHVVRUVXVHVUHODWLYHUDWKHUWKDQDEVROXWHDGGUHVVHVZKHQWKLVLVIHDVLEOH$OOWKHMXPSLQVWUXFWLRQVLQWKLVSURJUDPHQFRGHMXPSVDVUHODWLYHMXPSV$QDEVROXWHMXPSZRXOGVSHFLI\DQDFWXDODGGUHVVDVWKHWDUJHWRIDMXPSZKHUHDVUHODWLYHHQFRGLQJVSHFLILHVWKHQXPEHURIE\WHVWRMXPSVWDUWLQJIURPWKHEHJLQQLQJRIWKHQH[WLQVWUXFWLRQ7KLVYDOXHPD\EHLQWHUSUHWHGDVDVLJQHGQXPEHUDQHJDWLYHYDOXHIRUDEDFNZDUGVMXPS7KHHQFRGHGYDOXHLVDGGHGE\WKHSURFHVVRUWRWKHDGGUHVVRIWKHQH[WLQVWUXFWLRQWRREWDLQWKHDGGUHVVRIWKHLQVWUXFWLRQEHLQJMXPSHGWR)RUH[DPSOHWKH-03 1; 7LQVWUXFWLRQKDVDOLWWOHHQGLDQHQFRGHGFRXQWLQJIRXUE\WHVIURPWKHE\WHWKDWEHJLQVWKH029($;(&;EULQJV\RXWRWKHE\WHWKDWEHJLQV029(';($;7KLVFRPPDQGLVWKHWDUJHWRI-03 1; 77KH-0325'LQVWUXFWLRQFRQWDLQVWKHUHODWLYHMXPSYDOXH))))))(+...

... M&03($;&KHFNIRU]HURV -1( 12 = ,1& amp;(%;&RXQW]HURV 12 =&03($;&KHFNIRURQHV -1( 12 2 ,1& amp;(&;&RXQWRQHV 12 2 ,1& amp;(6,M ... \[029(';+/RRSQHHGVLWHUDWLRQV&/&&OHDUWKHFDUU\IODJ;<=029($;>(6,@6RXUFHE\WHVLQWRWKH3URFHVVRU$'&>(',@($;'RWKHDGGLWLRQ ,1& amp;(6, ,1& amp;(6, ,1& amp;(6,7KLVLVXJO\ ,1& amp;(6, ,1& amp;(',%XWXVLQJ$''KHUHZRXOG ,1& amp;(',FOHDUWKHFDUU\IODJ ,1& amp;(', ,1& amp;(','(&(';'HFUHPHQWWKHORRSFRXQWHU -1= ;<=6HHLIWKHORRSLVILQLVKHGOLQHVZKLFKZRXOGKDYHUHVXOWHGIURPXVLQJWKH>LPP@IRUPDW$WILUVWVLJKWLWZRXOGDSSHDUWKDWZHFRXOGGREHWWHUE\XVLQJ$''LQVWUXFWLRQVLQSODFHRIPXOWLSOH ,1& amp;LQVWUXFWLRQV%XWWKLVZRXOGDFWXDOO\UXLQHYHU\WKLQJ%HFDXVHZHDUHXVLQJDORRSWRSURFHHGIRXUE\WHVDWDWLPHIURPWKHOHDVWVLJQLILFDQWWRWKHPRVWVLJQLILFDQWE\WHVZHHQFRXQWHUDSUREOHPZLWKWKHFDUU\IODJ,ILQEHWZHHQWZRH[HFXWLRQVRIWKH$'&LQVWUXFWLRQZHPRYHIRXUE\WHVGRZQWKHQXPEHUXVLQJDQ$''LQVWUXFWLRQZHKDYHPHVVHGXSWKHFDUU\IODJ,QFKDSWHULWLVQRWHGWKDWWKHFDUU\IODJLVXQDIIHFWHGE\WKH ,1& amp;DQG'(&LQVWUXFWLRQV7KHUHDVRQIRUWKLVDUFDQHOLWWOHH[FHSWLRQVXGGHQO\EHFRPHVFOHDU0XOWLE\WHDULWKPHWLFQHHGVDFDUU\IODJZKLFKFDQVXUYLYHORRSFRXQWHUDGMXVWPHQWV%HFDXVHWKH\GRQWDIIHFWWKHFDUU\IODJWKH ,1& amp;DQG'(&LQVWUXFWLRQVFDQEHXVHGWRFDUU\RXWKDUPOHVVORRSFRXQWHUDGMXVWPHQWV$GGLQJE\XVLQJIRXU ,1& amp;LQVWUXFWLRQVLVQRWEHDXWLIXOEXWLWZRUNV7KLVFRGHLVQRWEDGIURPWKHVWDQGSRLQWRIWDNLQJXSPHPRU\VSDFHVLQFHPHPRU\LVFKHDS%XWLWLVEDGIURPWKHVWDQGSRLQWRIDGGLQJH[HFXWLRQWLPHWRDORRS,IWKHUHLVRQHSODFHZKHUHH[HFXWLRQWLPHLVFRVWO\LWLVLQWKHPLGGOHRIDQHVWHGORRSDQGWKDWLVH[DFWO\ZKHUHWKRVHH[WUD ,1& amp;LQVWUXFWLRQVDUH$QRWKHUPHPRU\IRUPDWLVXVHIXOLQGHDOLQJZLWKWKLVSUREOHP7KH>UHJVFDOHUHJLPP@)RUPDW7KHPRVWJHQHUDOPHPRU\IRUPDWLVWKH>UHJVFDOHUHJLPP@IRUPDWZKHUHVFDOHLVDVFDOHIDFWRUZKLFKPXVWEHHLWKHURU7KHUHJLVWHUZKLFKLVPXOWLSOLHGE\WKHVFDOHIDFWRULVFDOOHGWKHLQGH[UHJLVWHU7KHRWKHUUHJLVWHULVFDOOHGWKHEDVHUHJLVWHU6RPHILHOGVPD\EHRPLWWHG7KLVJLYHVXVWKHHIIHFWRIDYDULHW\RIIRUPDWVLQFOXGLQJLQDGGLWLRQWRWKH>UHJ@DQG>LPP@IRUPDWVDOUHDG\GLVFXVVHG,WLVDOLWWOHKDUGWREHOLHYHWKDWLQVWUXFWLRQVZLWKWKLVGHJUHHRIFRPSOH[LW\DUHKDUGFRGHGLQWRWKHSURFHVVRUV%XWWKHFRVWLQWHUPVRILQVWUXFWLRQOHQJWKIRUDOOWKLVFRPSOH[LW\LVDFWXDOO\MXVWRQHPRUHE\WHRIFRGHIRULQVWUXFWLRQVZKLFKXWLOL]HWKLVJHQHUDOIRUPDW7KHE\WHLVFDOOHGWKH6,%E\WHERWKIRUVFDOHGLQGH[EDVHE\WHDQGVLEOLQJRIWKH0RG50E\WH7DNLQJXSWKHSUREOHPRIWKHUHSHDWHG ,1& amp;LQVWUXFWLRQLQ3URJUDPQRWHWKDWDVFDOHIDFWRURIZRXOGDV7KHLQVWUXFWLRQ029>@$/FRXOGWKHUHIRUHEHXVHGLQSODFHRI029>$%&@$/,IWKLVSURJUDPZHUHWREHUHORFDWHGVRWKDWLWVWDUWHGDWWKHDGGUHVV+WKHQWKHFRGHIRUWKH$%&ODEHOLQWKH029LQVWUXFWLRQZRXOGQHHGWREH+LQVWHDGRI9DULDEOHV,QKLJKOHYHOSURJUDPPLQJODQJXDJHVYDULDEOHVDUHRIWHQLPSOHPHQWHGDVODEHOOHGPHPRU\ORFDWLRQV$OWKRXJKDFRPSLOHUPD\XVHDUHJLVWHUDPRUHW\SLFDOLPSOHPHQWDWLRQRIDYDULDEOHLVDVDODEHOOHGPHPRU\ORFDWLRQ7KLVLVWUXHSDUWLFXODUO\IRUJOREDOYDULDEOHV$UUD\V$VDQH[DPSOHRIKRZWKHVHDGGUHVVLQJPRGHVPLJKWEHXVHGWRKDQGOHDUUD\SURJUDPPLQJFRQVLGHUWKHIROORZLQJ&FRGHZKLFKFRXQWVKRZPDQ\]HURVDQGRQHVWKHUHDUHLQWKHSDUWRIDQDUUD\[>@>@ZKHUHWKHURZVRILQWHUHVWDUHIURPWKURXJKDQGWKHFROXPQVDUHIURPWKURXJK7RFRGHWKLVLQDVVHPEOHUZHFDQXVH(%;IRUQXPB]HURV(&;IRUQXPBRQHVDQGWKHODEHO$%&IRUWKHEHJLQQLQJRIWKHDUUD\[7RUHIHUHQFHWKHDUUD\ORFDWLRQ[>L@>M@ZHQHHGWRXVHWKHIDFWWKDWWKHDGGUHVV[>L@>M@LVLME\WHVSDVW[>@>@ ... :KHQDQQE\WHQXPEHULVVWRUHGLQPHPRU\LWVE\WHVDUHVWRUHGLQRUGHURIVLJQLILFDQFHOHDVWVLJQLILFDQWE\WHVLQWKHORZHVWDGGUHVVHV1XPHULFDOO\LQFUHDVLQJDGGUHVVHVFRUUHVSRQGWRLQFUHDVLQJE\WHVLJQLILFDQFH1RWDOODUFKLWHFWXUHVGRWKLV7KHVHWZRSURWRFROVPDNHLWSRVVLEOHWRLQWHUSUHWWKH029>+@($;FRPPDQG$VVKRZQLQ)LJXUHWKHE\WHVLQ($;DUHVWRUHGLQDGGUHVVHV+$+%+DQG&+7KHOHDVWVLJQLILFDQWE\WHLQ($;LVVWRUHGLQ+WKHQH[WLQ$+DQGVRRQ3URJUDPGHPRQVWUDWHVWKHXVHRIWKLVLQVWUXFWLRQ:KHQ3URJUDPLV)LJXUH029>+@($;3URJUDP7LQ\(GOLQDVSURJUDPZKLFKVWRUHVDQLQSXWQXPEHULQWRPHPRU\ ,1 ($;>@029>+@($;5(7UXQXQGHU(GOLQDVLWLVORDGHGVWDUWLQJDWDGGUHVV6LQFHPHPRU\ORFDWLRQVXSWRWKHDGGUHVV+DUHDOOGLVSOD\HGZKHQWKLVSURJUDPLVORDGHGWKHH[HFXWLRQRIWKH029LQVWUXFWLRQLVGLUHFWO\REVHUYDEOH/LWWOHDQG%LJ(QGLDQ$UFKLWHFWXUH$UFKLWHFWXUHVZKLFKXVHWKHE\WHRUGHULQJJLYHQLQWKHVHFRQGRIWKHVHSURWRFROVDUHFDOOHGOLWWOHHQGLDQ$UFKLWHFWXUHVZKLFKGRWKHRSSRVLWHDUHFDOOHGELJHQGLDQ$OO,QWHOSURFHVVRUVDUHOLWWOHHQGLDQ([DPSOHVRIELJHQGLDQSURFHVVRUVDUH0RWRURODVDQGSURFHVVRUV0,36DQG3RZHU3&SURFHVVRUVFDQZRUNLQHLWKHUPRGH,QRUGHUWRHQFRXUDJHVRIWZDUHGHYHORSHUVWRPLJUDWHDZD\IURPFRPSHWLQJKDUGZDUHDFRPPRQVWUDWHJHPLVWRLQFRUSRUDWHFRPSDWLELOLW\IHDWXUHV$FRPSDWLELOLW\IHDWXUHDGGHGWRWKHSURFHVVRULVWKH%6:$3LQVWUXFWLRQ,WUHYHUVHVWKHE\WHRUGHULQJRIDQ\ELWJHQHUDOUHJLVWHU,WVIRUPDWLVVLPSO\%6:$3UHJ)RUH[DPSOHLIWKH($;UHJLVWHUFRQWDLQHGWKHQXPEHU+WKHQIROORZLQJWKHH[HFXWLRQRIWKH%6:$3($;FRPPDQGLWZRXOGFRQWDLQWKHQXPEHU+$OLJQPHQW7KHGLVFUHSDQF\EHWZHHQWKHIRXUE\WHGDWDWUDQVIHUVL]HDQGWKHRQHE\WHZRUGVL]HZKLFKH[LVWVLQDQGV\VWHPVLVQRWIXOO\UHIOHFWHGLQWKHKDUGZDUH,QIDFWWKHRQHE\WHZRUGVL]HLVDNLQGRIILFWLRQPDLQWDLQHGIRUWKHEHQHILWRIWKHVRIWZDUH$OWKRXJKPHPRU\RQWKHVHV\VWHPVLVIRUFHGWRHPXODWHDRQHE\WHZRUGPHPRU\ZRUGVDUHDFWXDOO\IRXUE\WHVZLGH7KHWZRORZHVWELWVRIWKHELWDGGUHVVEXVDUHLQIDFWQRWWKHUH7KHZLUHVRQWKHDGGUHVVEXVDUH$WKURXJK$$DQG$DUHPLVVLQJ)URPDKDUGZDUHSRLQWRIYLHZDDGGUHVVHVELWZRUGV7KHîELWPHPRU\LVDILFWLRQ%XWEHFDXVHWKHILFWLRQLVFRQVLVWHQWO\PDLQWDLQHGVRIWZDUHZKLFKEHOLHYHVWKLVILFWLRQGRHVZRUN%XWLWGRHVQWZRUNDVZHOODVVRIWZDUHZKLFKWDNHVWKHWUXHVWDWHRIDIIDLUVLQWRDFFRXQW)RUH[DPSOHWKHFRPPDQG029($;>+@DFFHVVHVIRXUE\WHVRIPHPRU\ZKRVHELWDGGUHVVHVDUHSUHIL[+KDVWREHDSSOLHGWRWKHPDFKLQHFRGHWRQRWLI\WKHSURFHVVRUWKDWWKHPHPRU\DGGUHVVELWVLQWKH0RG50E\WHDUHFRGHGXVLQJWKHROGELWFRGLQJV\VWHP7KLVSUHIL[LVFDOOHGWKHDGGUHVVVL]HSUHIL[,WLVVLPLODUWRWKHRSHUDQGVL]HSUHIL[GLVFXVVHGLQFKDSWHUVHFWLRQ&,6&YV5,6&$Q[FRPSXWHULVJHQHUDOO\FRQVLGHUHGWREHDFRPSOH[LQVWUXFWLRQVHWFRPSXWHU&,6&7KLVLVSDUWO\EHFDXVHRIFRPSOLFDWHGDGGUHVVLQJDVLQWKH>(';(6,$%&@PHPRU\RSHUDQG0DFKLQHVVXFKDVWKH6 81 DQG0,36ZRUNVWDWLRQVDUHEDVHGRQWKHLGHDWKDWE\VLPSOLI\LQJWKHLQVWUXFWLRQVDQGKDYLQJIHZHURIWKHPWKH\EHFRPHHDVLHUDQGIDVWHUWRH[HFXWH7KLVFDQPRUHWKDQPDNHXSIRUWKHIDFWWKDWLWWDNHVPRUHRIWKHVHOLWWOHLQVWUXFWLRQVWRZULWHDSURJUDP&RPSXWLQJEDVHGRQWKLVSKLORVRSK\LVFDOOHG5,6&UHGXFHGLQVWUXFWLRQVHWFRPSXWLQJ7KH5,6&YV&,6&LVVXHLVQRWDQHLWKHU±RULVVXHOLNHOLWWOHHQGLDQYVELJHQGLDQ5,6&LVDVHWRIIHDWXUHVZKLFKPD\EHDGRSWHGSDUWLDOO\LQYDU\LQJGHJUHHV2QHUHDVRQWKDWWKHDQG3HQWLXPSURFHVVRUVZHUHDEOHWRFRPSHWHZLWKWKHHDUO\5,6&3RZHU3&SURFHVVRUVLVWKDWWKH\DGRSWHGDSLHFHPHDO5,6&SKLORVRSK\$OWKRXJK&,6&LQVWUXFWLRQVDUHDOORZHGRQD3HQWLXPLWZRUNVIDVWHULISURJUDPPHGXVLQJD5,6&OLNHVXEVHWRIWKHWRWDOLQVWUXFWLRQVHW7KHLUQDPHVQRWZLWKVWDQGLQJWKH3HQWLXP,,DQG3HQWLXP3URKDYHJRQHRYHUWRDWRWDOO\5,6&DUFKLWHFWXUH7KHLQVWUXFWLRQVHWXVHGLQWHUQDOO\LVDSXUH5,6&LQVWUXFWLRQVHW7UDGLWLRQDO[LQVWUXFWLRQVDUHFRQYHUWHGLQWHUQDOO\WR5,6&LQVWUXFWLRQVEHIRUHWKH\DUHH[HFXWHG,QDVHQVHWKHHQGRIWKHOLQHWDJKXQJRQWKH3HQWLXPE\$SSOHPDUNHWHUVZDVFRUUHFW%XWLURQLFDOO\DVVHPEO\ODQJXDJHLVQRZVWURQJHUWKDQHYHU2SHUDQG6L]H$PELJXLW\,QPRVWWZRRSHUDQGLQVWUXFWLRQVERWKRSHUDQGVPXVWKDYHWKHVDPHVL]H6RZKHQDPHPRU\RSHUDQGLVXVHGLQVXFKDFRQWH[WWKHQXPEHURIE\WHVLWUHIHUVWRFDQEHGHWHUPLQHGLIWKHRWKHURSHUDQGLVDUHJLVWHURSHUDQG)RUH[DPSOHLQ$''>(%;@$;WKHPHPRU\RSHUDQG>(%;@PXVWUHIHUWRWZRE\WHVRIPHPRU\VLQFH$;LVDWZRE\WHUHJLVWHU+RZHYHUZKHQDPHPRU\RSHUDQGLVXVHGZLWKDQLPPHGLDWHRSHUDQGWKHUHVXOWLVDPELJXRXV)RUH[DPSOHWKHIROORZLQJFRPPDQGLVDPELJXRXV029>(%;@6LPLODUO\ZKHQDPHPRU\RSHUDQGLVXVHGZLWKDXQDU\RSHUDWLRQVXFKDV 1( *ZKLFKWDNHVWKHWZRVFRPSOHPHQWRIDQXPEHUWKHRSHUDQGVL]HLVLQGHWHUPLQDWH$QLQVWUXFWLRQVXFKDV 1( *>(%;@PLJKWZHOOUHIHUWRRQHWZRRUIRXUE\WHVRIPHPRU\8QGHUWKHVHFLUFXPVWDQFHVDQDVVHPEOHUKDVWRPDNHDFKRLFH 1$ 60FKRRVHVWRSURGXFHDQHUURUPHVVDJH,QELWFRGH(GOLQDVGHIDXOWVWRDIRXUE\WHUHIHUHQFHZKHQWKHUHIHUHQFHLVDPELJXRXV,QELWFRGHWKHGHIDXOWLVWZRE\WH7RLQGLFDWHWKHRQHE\WHFDVHLQ(GOLQDV\RXPD\XVHWKHFXVWRPDU\EXWFOXPV\QRWDWLRQ 1( *%<7(375>(%;@,Q 1$ 60WKHFRGHLV 1( *%<7(>(%;@7RLQGLFDWHDIRXUE\WHUHIHUHQFHLQ 1$ 60WKHFRGHLV 1( *':25'>(%;@$WZRE\WHUHIHUHQFHLVLQGLFDWHGXVLQJ:25'DVDTXDOLILHU7KHVHTXDOLILHUVFOHDUO\GRWKHMRE7KHLPSOLHGFRQFHVVLRQWKDWDZRUGLVELWVLVXQIRUWXQDWH,QOLJKWRIQRWDWLRQVXFKDV%<7(375WKH$77SUDFWLFHRIDGGLQJDOHWWHUWRWKHPQHPRQLFGRHVQWVHHPVREDG,QIDFWWKH,QWHODVVHPEOHUGRHVXVHPQHPRQLFVRIWKLVVRUWLQDIHZFDVHVVXFKDV/2'6%DQG6726%ORDGVWULQJE\WHDQGVWRUHVWULQJE\WH/DEHOVLQFUHDVHWKHDGGUHVVE\ZKHQHYHUWKHLQGH[UHJLVWHUZDVLQFUHPHQWHGE\,QWKHFRGHVKRZQLQ3URJUDPWKH>VFDOHUHJLPP@IRUPDWLVXVHGWRUHIHUWRERWKVRXUFHDQGGHVWLQDWLRQPHPRU\ORFDWLRQV,QWKLVFRGHZHVHHWKDWDVLQJOH ,1& amp;LQVWUXFWLRQWDNHVWKHSODFHRIHLJKW ,1& amp;LQVWUXFWLRQVLQ3URJUDP3URJUDP(GOLQDVSURJUDPZKLFKILQGVE\WHSRZHUVRI6WRUHWKHE\WHVRI[VWDUWLQJDWPHPRU\DGGUHVV+6WRUHWKHE\WHVRI\VWDUWLQJDWPHPRU\DGGUHVV+029(%;,QLWLDOL]HEDVH029(';,QLWLDOL]HH[SRQHQW\...

... '\QDPLFDOO\$OORFDWHG0HPRU\,WLVVSDFHWKDWLVDGGHGWRWKHSURJUDPZKHQLWLVH[HFXWLQJ,QLWLDOL]HG'DWD6SDFH,QFKDSWHUVHFWLRQWKHXVHRIWKHGEGLUHFWLYHZDVGLVFXVVHGLQFRQQHFWLRQZLWKWKHLQLWLDOL]DWLRQRIGDWD7KHIDFWWKDWWKLVGDWDQHHGVWREHVWRUHGSHUPDQHQWO\UHTXLUHVWKDWLWEHDSDUWRIWKHH[HFXWDEOHILOH,QRUGHUWRDOORZSURJUDPPHUVWRDYRLGUHO\LQJRQSROOLQJSURFHVVRUVKDYHDWOHDVWRQHLQSXWSLQZKLFKDOORZV,2GHYLFHVWRVLJQDOWKHSURFHVVRUZKHQWKH\QHHGWKHSURFHVVRUWRGRVRPHWKLQJ6XFKDSLQLVFDOOHGDQLQWHUUXSWSLQ$QLQWHUUXSWSLQPDNHVLWSRVVLEOHIRUDQ,2GHYLFHWRLQLWLDWHFRPPXQLFDWLRQZLWKWKH&38$&38ZLWKRXWDQLQWHUUXSWSLQKDVEHHQFRPSDUHGWRDWHOHSKRQHZLWKRXWDEHOO6XSSRVHWKDWDSULQWHULVFRQQHFWHGWRDQLQWHUUXSWSLQRQWKH&38DVVKRZQLQ)LJXUH:LWKWKHSULQWHUKRRNHGXSWRWKH&38LQWKLVZD\WKH&38ZRXOGEHDEOHWRLJQRUHWKHSULQWHUXQWLOLWUHFHLYHGDVLJQDO,WFRXOGWKHQSURFHVVDSULQWHUFKDUDFWHUDQGUHWXUQWRLWVPDLQMRE7KHUHZRXOGEHUHODWLYHO\OLWWOHZDVWHGWLPH7KLVVHWXSZRXOGZRUNILQHLIWKHSULQWHUZHUHWKHRQO\,2GHYLFHZKLFKHYHUQHHGHGDWWHQWLRQ%XWRIFRXUVHWKHUHDUHPDQ\VXFKGHYLFHV)LJXUH$&RPSXWHUZLWK2QO\2QH,QWHUUXSW7RDOORZIRUVHYHUDO,2GHYLFHVRQHPLJKWH[SHFWWKHUHWREHVHYHUDOLQWHUUXSWSLQVRQWKHSURFHVVRU7KH[DUFKLWHFWXUHGRHVQRWGRWKLQJVWKLVZD\,WKDVRQO\RQHJHQHUDOSXUSRVHLQWHUUXSWSLQ,WGHOHJDWHVWKHDUELWUDWLRQRILQWHUUXSWVLJQDOVWRDQH[WHUQDOFLUFXLWFDOOHGWKHLQWHUUXSWFRQWUROOHUFLUFXLWDVVKRZQLQ)LJXUH7KLVILJXUHDOVRVKRZVDQ,54EXVIURPWKH,2V\VWHPWRWKHLQWHUUXSWFRQWUROOHUFLUFXLW$Q,54EXVFRQVLVWVRIZLUHVIURPYDULRXV,2GHYLFHV(DFKGHYLFHWKDWQHHGVLQWHUUXSWVHUYLFHLVJLYHQRQHRIWKHZLUHVRQWKLVEXVDVVXPLQJWKDWWKHUHDUHHQRXJKRIWKHPWRJRDURXQGWKDWLV7KH,54EXVZLUHVDUHQXPEHUHG,54,54HWF,54VWDQGVIRULQWHUUXSWUHTXHVWOLQH7KHQXPEHUVHWFHQFRXQWHUHGLQWKLVFRQWH[WDUHFDOOHG,54QXPEHUV)LJXUH$&RPSXWHUZLWKDQ,QWHUUXSW&RQWUROOHU7KHLQWHUUXSWFRQWUROOHUDOORZVVHYHUDO,2GHYLFHVWRKDYHDVLJQDOSDWKWRWKH&38HYHQWKRXJKWKH[KDVRQO\RQHJHQHUDOSXUSRVHLQWHUUXSWSLQ[,QWHUUXSW+DQGOLQJ:KHQDQ[SURFHVVRUUHFHLYHVDQLQWHUUXSWVLJQDOLWILUVWFRPSOHWHVWKHLQVWUXFWLRQLWLVFXUUHQWO\ZRUNLQJRQ7KHQSURYLGHGDVSHFLDOIODJKDVQRWEHHQFOHDUHGLWKDQGOHVWKHLQWHUUXSWLQWKUHHVWHSV6WHS,WUHDGVWKHQXPEHURIWKHLQWHUUXSWUHVSRQVLEOHIRUWKHLQWHUUXSWVLJQDOIURPWKHLQWHUUXSWFRQWUROOHUVKRXOGHQGZLWKDQ,5(7LQVWUXFWLRQZKLFKLVOLNHD5(7LQVWUXFWLRQH[FHSWWKDWLWSRSVWKHIODJVUHJLVWHU7KHIODJVUHJLVWHULVDELWUHJLVWHUQDPHG()/$*6ZKLFKFRQWDLQVDOOWKHIODJV,WLVDQH[WHQVLRQRIWKHELW)/$*6UHJLVWHU7DEOHVKRZVWKHIODJVLQWKH()/$*6UHJLVWHURQD7KHUHDVRQIRUWKH[VVSHFLDOIODJEHKDYLRUZKHQUHVSRQGLQJWRLQWHUUXSWVKDVWRGRZLWKWKHSUREOHPRILQWHUUXSWDUELWUDWLRQ,QWHUUXSWLQJDQ,QWHUUXSW:KDWKDSSHQVZKHQDQLQWHUUXSWRFFXUVZKLOHDQ,65LVDOUHDG\H[HFXWLQJ"&DQRQHGHYLFHLQWHUUXSWDQRWKHUV,65",PDJLQHWZRGHYLFHVHDFKUHIXVLQJWREHSUHHPSWHGE\WKHRWKHUV,657KHSURFHVVRUZRXOGJHWERXQFHGEDFNDQGIRUWKIURPRQH,65WRWKHRWKHUXQWLOWKHDFFXPXODWLRQRISHQGLQJUHWXUQDGGUHVVHVRQWKHVWDFNRYHUIORZHGDQGFDXVHGWKHV\VWHPWRFUDVK7KH,QWHUUXSW(QDEOH)ODJ7KHGHVLJQRIWKHDOORZVIRUDYHU\VLPSOHZD\WRDYRLGWKLVVLWXDWLRQ7KHLGHDZRXOGEHWRHQIRUFHDVWULFWRQHDWDWLPHLQWHUUXSWSROLF\,WZRXOGZRUNE\DXWRPDWLFDOO\EORFNLQJLQWHUUXSWVLJQDOVZKLOHDQ,65LVUXQQLQJDQGWKHQXQEORFNLQJWKHPZKHQLWLVILQLVKHG2QHRIWKHIODJVRQWKH[SURFHVVRULVFDOOHGWKHLQWHUUXSWHQDEOHIODJ:KHQWKLVIODJLVFOHDUHGDOOVLJQDOVRQWKHJHQHUDOSXUSRVHLQWHUUXSWSLQDUHLJQRUHG:KHQDQHQWHUVDQ,65WKLVIODJLVDXWRPDWLFDOO\FOHDUHG7KDWLVZK\WKHSURFHVVRUSXVKHVWKHIODJVUHJLVWHURQWRWKHVWDFNMXVWEHIRUHHQWHULQJDQ,65,WDOORZVWKHLQWHUUXSWHQDEOHIODJWREHUHVWRUHGWRLWVRULJLQDOVWDWHZKHQWKH,65LVGRQH:KHQWKHLQWHUUXSWHQDEOHIODJLVVHWLQWHUUXSWVDUHKDQGOHGQRUPDOO\7KHRQHDWDWLPHLQWHUUXSWSROLF\ZRXOGPDNHOLIHHDV\IRUWKHLQWHUUXSWFRQWUROOHU7KHFRQWUROOHUFRXOGSURFHVVDQLQFRPLQJLQWHUUXSWE\MXVWSDVVLQJLWDORQJWRWKHSURFHVVRUXQWLOLWZDVDFNQRZOHGJHG$VVRRQDVWKHLQWHUUXSWDFNQRZOHGJHZDVUHFHLYHGWKHFRQWUROOHUFRXOGZDVKLWVKDQGVRIWKDWLQWHUUXSWEHFDXVHWKHSURFHVVRUFRXOGEHFRXQWHGXSRQWRZRUNRQLWQRQVWRSXQWLOLWZDVGRQH$OWKRXJKWKHRQHDWDWLPHSROLF\LVYHU\HDV\WRLPSOHPHQWRQDQ[SURFHVVRUVWDQGDUG3&VGRQRWXVHLW7KHSUREOHPZLWKLWLVWKDWLQWHUUXSWVWKDWQHHGDTXLFNUHVSRQVHFDQEHNHSWZDLWLQJ,IDVHULDOSRUWLVJHWWLQJUHDG\WRVWDUWWUDVKLQJGDWDEHFDXVHLWVEXIIHULVIXOOWKHQLWVKRXOGQRWEHPDGHWRZDLWZKLOHDIORSS\GULYHORRNVIRUDJRRGVHFWRU$SURFHVVRUZLWKDRQHDWDWLPHLQWHUUXSWSROLF\FDQEHOLNHDKRXVHKROGZLWKDVLQJOHRFFXSLHGEDWKURRP8QOLNHWKHVLWXDWLRQZLWKEDWKURRPVKRZHYHULQWHUUXSWLQJDQ,65LVQRWQHFHVVDULO\UXGH,WVRPHWLPHVPDNHVJRRGVHQVHWRLQWHUUXSWDQ,651HVWHG,QWHUUXSWV7DEOH()/$*65HJLVWHU%LWV/DEHO)XOO1DPH$&$OLJQPHQW&KHFN909LUWXDO0RGH5)5HVWDUW)ODJ 17 1HVWHG7DVN,23/,23ULYLOHJH/HYHO2)2YHUIORZ)ODJ')'LUHFWLRQ)ODJ,),QWHUUXSW(QDEOH)ODJ7)7UDS)ODJ6)6LJQ)ODJ=)=HUR)ODJ$)$6&,,2YHUIORZ)ODJ3)3DULW\)ODJ&)&DUU\)ODJ,WLVWKHUHVSRQVLELOLW\RIWKHRSHUDWLQJV\VWHPWRFUHDWHWKLVWDEOH,WLVDOVRUHVSRQVLEOHIRUORDGLQJLQWRPHPRU\WKHLQWHUUXSWVHUYLFHURXWLQHVZKRVHDGGUHVVHVDUHOLVWHGLQWKLVWDEOH7KHVHWZRMREVDUHGRQHDVDSDUWRIWKHV\VWHPERRW,IWKH\KDYHQRWEHHQGRQHWKHV\VWHPZLOOEHXQDEOHWRUHVSRQGWRLQWHUUXSWV:KHQ(GOLQDVGLVSOD\VD3URFHVVRUKDOWHGPHVVDJHLWLVXVXDOO\EHFDXVHLWLVWU\LQJWRUHVSRQGWRDQLQWHUUXSWDQGQRLQWHUUXSWWDEOHKDVEHHQEXLOW7KH,QWHUUXSW'HVFULSWRU7DEOH7KH[KDVDGHGLFDWHGUHJLVWHUZKLFKVWRUHVWKHDGGUHVVRIWKHLQWHUUXSWGHVFULSWRUWDEOHRU,'7,WLVFDOOHGWKH,'7UHJLVWHU7KHUHDUHVSHFLDOFRPPDQGVIRUDFFHVVLQJWKLVUHJLVWHU7KHFRPPDQG/,'7PHPORDGVWKHUHJLVWHU7KHFRPPDQG6,'7PHPVWRUHVWKHFRQWHQWVRIWKLVUHJLVWHU7KH/,'7FRPPDQGLVXVHGLQVHWWLQJXSWKHRSHUDWLQJV\VWHPDWERRWWLPH2QFHDQLQWHUUXSWGHVFULSWRUWDEOHKDVEHHQFUHDWHGWKH/,'7FRPPDQGFDQSRLQWWKHSURFHVVRUWRLW,QUHVSRQGLQJWRDQLQWHUUXSWWKH[XVHVWKHIDFWWKDWHDFKWDEOHHQWU\RFFXSLHVHLJKWE\WHVRIVSDFH&RQVHTXHQWO\LIELVWKHDGGUHVVVWRUHGLQWKH,'7UHJLVWHUWKHQLQUHVSRQVHWRWKHLQWHUUXSWQXPEHUHGQWKH[IHWFKHVWKHHLJKWE\WHVVWDUWLQJDWWKHDGGUHVVEîQ7KHVHHLJKWE\WHHQWULHVDUHFDOOHGJDWHV,65([HFXWLRQ2QFHWKHDGGUHVVRIWKHLQWHUUXSWVHUYLFHURXWLQHLVREWDLQHGLWLVWUHDWHGDOPRVWOLNHD&$//LQVWUXFWLRQWUHDWVDQDGGUHVV%HIRUHMXPSLQJWRDWDUJHWDGGUHVVD&$//LQVWUXFWLRQSXVKHVWKHQH[WDGGUHVVDIWHULWVRZQDGGUHVVRQWRWKHVWDFN7KLVPHDQVWKDWWKHFDOOHGURXWLQHPD\UHWXUQWRWKHLQVWUXFWLRQIROORZLQJWKH&$//E\UHDGLQJLWVDGGUHVVRIIWKHVWDFN6LQFHDQLQWHUUXSWVHUYLFHURXWLQHDOVRQHHGVWRH[HFXWHDUHWXUQWKHDGGUHVVRIWKHLQVWUXFWLRQZKLFKZRXOGRWKHUZLVHKDYHEHHQH[HFXWHGKDGWKHLQWHUUXSWQRWDUULYHGLVSXVKHGRQWRWKHVWDFNEHIRUHWKH,65LVH[HFXWHG%XWLQWKHFDVHRIDQLQWHUUXSWWKHIODJVUHJLVWHULVSXVKHGDOVR7KHLQWHUUXSWVHUYLFHURXWLQHGRHVZKDWHYHUEXVLQHVVLVGHPDQGHGE\WKHLQWHUUXSW$QLQWHUUXSWVHUYLFHURXWLQHVKRXOGHQGZLWKDQ,5(7LQVWUXFWLRQZKLFKLVOLNHD5(7LQVWUXFWLRQH[FHSWWKDWLWSRSVWKHIODJVUHJLVWHULQLWLDWHVDGDWDVHFWLRQ:LWKWKHVHGLUHFWLYHVZHFDQGLUHFW 1$ 60WRSURGXFHDRILOHZLWKERWKWH[WDQGGDWDVHFWLRQV$GGLQJWKHVHGLUHFWLYHVWR3URJUDPJLYHVXV3URJUDPZKLFKZLOOFRPSLOHDQGUXQZLWKRXWFUDVKLQJ3URJUDP7LQ\SURJUDPZKLFKLQFUHPHQWVDE\WHRIVWRUHGGDWDJOREDOPDLQVHFWLRQWH[WPDLQ029$/>;<=@ ,1& amp;$/029>;<=@$/5(7VHFWLRQGDWD;<=GE6HJPHQWVLQ&&RGH3URJUDPFDQEHXVHGWRGHWHUPLQHWKHDGGUHVVHVRISDJHVDOORFDWHGWRLWVHOI&DOOLQJ&IURP$VVHPEOHU&DOOLQJIXQFWLRQVLQYROYHVXVLQJWKHVWDFN:KHQIXQFWLRQVDUHFDOOHGXVLQJDVVHPEOHULWLVSRVVLEOHWRVHHH[DFWO\KRZWKHVWDFNLVXVHGLQDIXQFWLRQFDOO2QFH\RXNQRZKRZWRXVHWKHVWDFNWRFDOODIXQFWLRQ\RXFDQFDOO&OLEUDU\IXQFWLRQVWRJHWDFWXDOLQSXWDQGRXWSXWIRUDVVHPEOHUSURJUDPVZKLFKUXQXQGHU/LQX[,QRUGHUWRFDOOSULQWIDQGVFDQIXVLQJDVVHPEOHULWLVQHFHVVDU\WRSXVKVWULQJVRQWRWKHVWDFN7KLVLVEHFDXVHWKHILUVWDUJXPHQWRIHDFKRIWKHVHIXQFWLRQVLVDOZD\VDVWULQJ7KHGEDVVHPEOHUGLUHFWLYHLQWURGXFHGLQFKDSWHUVHFWLRQFDQEHXVHGWRVWRUHVWULQJVDVZHOODVQXPEHUV)RUH[DPSOHGE+HOORZRUOG?Q?[FDQEHXVHGWRVWRUHDVWULQJ,IWKHORFDWLRQLVODEHOOHGWKHQWKHODEHOPD\EHXVHGWRSXVKWKHDGGUHVVRIWKHVWRUHGVWULQJ,Q(GOLQDVWKHDOORZDEOHVWULQJVDUHH[DFWO\OLNHWKRVHDOORZHGLQWKH&ODQJXDJHH[FHSWWKDWQXOOWHUPLQDWLRQPXVWEHH[SOLFLWO\HQFRGHGLILWLVGHVLUHG7KH&ODQJXDJHKH[HVFDSHVHTXHQFH?[PD\EHXVHGWRLQFOXGHDQXOORUDQ\RWKHUFKDUDFWHULQWRWKHVWULQJ3URJUDPFKDUD ... <SULQWI?Q`,Q 1$ 60QRQ$6&,,FKDUDFWHUVDUHFRGHGRXWVLGHWKHVWULQJXVLQJFRPPDVZKHUHWKHLPPHGLDWHYDOXHLVDQ\RQHE\WHQXPEHU7KLVLQVWUXFWLRQFDQEHXVHGWRH[HFXWHDQ\LQWHUUXSWVHUYLFHURXWLQH,WLVVLPLODUWRD&$//LQVWUXFWLRQ)DXOWVDQG7UDSV:KHQWKHVHUYLFHURXWLQHIRUDQH[WHUQDOLQWHUUXSWRUDVRIWZDUHLQWHUUXSWILQLVKHVFRQWUROLVWUDQVIHUUHGWRWKHQH[WLQVWUXFWLRQIROORZLQJWKHLQWHUUXSWMXVWDVLWZRXOGEHIROORZLQJWKHFRPSOHWLRQRIDVXEURXWLQHFDOO7KLVLVXVXDOO\QRWWKHFDVHZLWKKDUGZDUHH[FHSWLRQV:KHQWKHVHUYLFHURXWLQHVIRUPRVWH[FHSWLRQVDUHFRPSOHWHGWKHLQVWUXFWLRQJLYLQJULVHWRWKHPLVUHWULHG+DUGZDUHH[FHSWLRQVIRUZKLFKWKLVLVWUXHDUHFDOOHGIDXOWV$JRRGH[DPSOHRIDIDXOWLVDSDJHIDXOW$SDJHIDXOWRFFXUVZKHQDIDLOXUHWRDFFHVVPHPRU\KDVRFFXUUHGEHFDXVHLWKDVEHHQSDJHGRXWWRWKHGLVN7KHLQWHUUXSWVHUYLFHURXWLQHSDJHVLWEDFNLQDJDLQDQGWKHQWKHRULJLQDOLQVWUXFWLRQLVUHWULHG$IHZKDUGZDUHH[FHSWLRQVDUHOLNHRUGLQDU\LQWHUUXSWVDQGSDVVFRQWUROWRWKHQH[WLQVWUXFWLRQZKHQWKH\ILQLVK7KHVHDUHFDOOHGWUDSV$QH[DPSOHRIDWUDSLVGLYLVLRQRYHUIORZRQDQ6\VWHP&DOOV2QHRIWKHEDVLFIXQFWLRQVRIDQRSHUDWLQJV\VWHPLVWRSURYLGHDFFHVVWRKDUGZDUHGHYLFHVDVLOOXVWUDWHGLQ)LJXUH,Q8QL[DOODFFHVVWRKDUGZDUHGHYLFHVLVSURYLGHGE\ZD\RIZKDWDUHFDOOHGV\VWHPFDOOV8VHUVRUGLQDULO\JHWDFFHVVE\XVLQJHLWKHUVWDQGDUG8QL[FRPPDQGVVXFKDVFDWRUOVRUE\XVLQJ&OLEUDU\IXQFWLRQVVXFKDVSULQWIRUVFDQI%XWERWK8QL[FRPPDQGVDQG&OLEUDU\IXQFWLRQVUHO\RQV\VWHPFDOOVWRJDLQKDUGZDUHDFFHVV6HH)LJXUHUHDGDQGZULWHDUHH[DPSOHVRIV\VWHPFDOOV7KHZULWHV\VWHPFDOOWDNHVWKUHHSDUDPHWHUVDILOHWREHZULWWHQWRDPHPRU\EXIIHUWREHZULWWHQIURPDQGWKHQXPEHURIE\WHVWREHZULWWHQ,WDSSHDUVWREHDQRUGLQDU\&IXQFWLRQDQGFDQEHXVHGDVWKRXJKLWZHUH3URJUDPLOOXVWUDWHVD+HOORZRUOGSURJUDPXVLQJWKHZULWHV\VWHPFDOO)LJXUH6\VWHP&DOOVDUH-XVW6RIWZDUH,QWHUUXSWV7DEOH%XLOWLQ+DUGZDUH([FHSWLRQV$OORFDWLRQ,QWHUUXSW1XPEHU'LYLVLRQ2YHUIORZ+6LQJOH6WHS+ 10 ,+%UHDNSRLQW+,QWHUUXSWRQ2YHUIORZ+%2 81& apos;RXWRIUDQJH+,QYDOLG0DFKLQH&RGH+1RW$YDLODEOH+'RXEOH)DXOW+6HJPHQW2YHUUXQ+,QYDOLG7DVN6WDWH6HJPHQW$+6HJPHQW1RW3UHVHQW%+6WDFN2YHUIORZ&+*HQHUDO3URWHFWLRQ(UURU'+3DJH)DXOW(+UHVHUYHG)+(UURU+7DEOH$Q,QWHUUXSWLV/LNHD6XEURXWLQH2UGLQDU\6XEURXWLQH,QWHUUXSW6HUYLFH5RXWLQH,QYRNH&$// ,17 7HUPLQDWH5(7,5(7:LWKRXWLQWHUUXSWSLQV,2FRPPXQLFDWLRQZRXOGKDYHWRUHO\RQSURFHVVRULQVWUXFWLRQVVXFKDVWKH ,1 DQG287FRPPDQGV'DWD3RUWV6XSSRVHWKDWDSURFHVVRULVVHQGLQJFKDUDFWHUVIURPDEXIIHUORFDWHGDW$%&WRDSULQWHUORFDWHGDWSRUW+DQGWKDWWRGRWKLVLWLVVXHVRQHE\WH287FRPPDQGVIURPDORRSDVVKRZQLQ3URJUDP7KHQDVVXPLQJRQHLQVWUXFWLRQSHUPDFKLQHF\FOHHDFKH[HFXWLRQRIWKHORRSZRXOGWDNHILYHPDFKLQHF\FOHV$WDFORFNUDWHRI0+]DOOFKDUDFWHUVZRXOGEHVHQWWRWKHSULQWHULQVHFRQGV7KLVLVHQRXJKWLPHIRUWKHSULQWHUWRSULQWRQHRUWZRRIWKHP7KHSULQWHUZRXOGEHVZDPSHGDQGPRVWRIWKHRXWSXWWRWKHSULQWHUZRXOGEHORVW3ULQWHUVDUHVORZLQFRPSDULVRQWRSURFHVVRUV6RDUHPRVWRWKHU,2GHYLFHV6WDWXV3RUWV7RSUHYHQWGDWDORVVDSULQWHUPXVWKDYHDVWDWXVSRUWDVZHOODVDGDWDSRUW7KHSURFHVVRUZLOOWKHQEHUHTXLUHGWRLQTXLUHRIWKHVWDWXVSRUWZKHWKHURUQRWWKHSULQWHULVUHDG\WRUHFHLYHDQRWKHUFKDUDFWHU7KHSURFHVVRUZLOORQO\RXWSXWDQRWKHUFKDUDFWHUZKHQWKHSULQWHULVUHDG\3URJUDP029(';+3ULQWHU'DWD3RUW029(&;8VH(&;DVWKHORRSFRXQWHU;<=029$/>$%&(&;@$%&LVWKHEHJLQQLQJRIWKHPHPRU\DUHDWKDWFKDUDFWHUVDUHEHLQJSULQWHGIURP287>';@$/6HQGDFKDUDFWHUWRWKHSULQWHU ,1& amp;(&;&03(&;3ULQWWKLVPDQ\FKDUDFWHUV-/;<=6XSSRVHWKDWWKHSULQWHUZLWKWKHGDWDSRUWDWSRUW+DOVRKDVDVWDWXVSRUWDWSRUW+DQGUHVSRQGVWRDQLQTXLU\WRWKLVSRUWZLWKDZKHQLWLVUHDG\DQGZLWKDZKHQLWVQRW,QWKLVFDVHWKHRXWSXWORRSPLJKWORRNOLNHWKLV$ORRS3URJUDP029(';+3ULQWHUVWDWXVSRUW029(&;;<= ,1 $/>';@$VNWKHSULQWHULILWVUHDG\&03$/PHDQVLWVUHDG\ -1( ;<=,IQRWWU\DJDLQ029$/>$%&(&;@'(&(';'DWDSRUWLV+287>';@$/6HQGRQHE\WH ,1& amp;(&; ,1& amp;(';3XWEDFNWKHVWDWXVSRUW&03(&;-/;<=OLNHWKLVVROYHVWKHSUREOHPRIORVWGDWDE\UHGXFLQJSURFHVVRUWKURXJKSXWGRZQWRWKHVSHHGRIWKHSULQWHU0RVWRIWKHSURFHVVRUVWLPHLVVSHQWH[HFXWLQJWKHWKUHHLQVWUXFWLRQVIROORZLQJWKH;<=ODEHO6XFFHVVLYHO\TXHU\LQJRQH,2GHYLFHDIWHUDQRWKHUDERXWLWVVWDWXVLVFDOOHGSROOLQJ3ROOLQJPDNHVDPRGHVWLPSURYHPHQWRQWKLVVLWXDWLRQE\SXWWLQJDQLQTXLU\WRDOOSHQGLQJ,2GHYLFHVLQWRRQHVWDWXVLQTXLU\ORRS%XWLWLVVWLOOFOHDUO\DZDVWHRISURFHVVRUWLPH([WHUQDO,QWHUUXSWV,QRUGHUWRDOORZSURJUDPPHUVWRDYRLGUHO\LQJRQSROOLQJSURFHVVRUVKDYHDWOHDVWRQHLQSXWSLQZKLFK)LJXUH,6$,QWHUUXSW&RQWUROOHU&LUFXLW,IWKHLQWHUUXSWQXPEHUVUHSRUWHGE\WKHZHUHEXLOWLQWKHQWKHGLIIHUHQWFRQWUROOHUVLQWKLVFRQILJXUDWLRQVKRZQLQ)LJXUHZRXOGDOOUHSRUWWKHVDPHVHWRIQXPEHUV7KLVZRXOGFOHDUO\QRWEHVDWLVIDFWRU\7KHUHDVRQIRUKDYLQJDFRQWUROOHUFLUFXLWLVVRWKDWGLIIHUHQWZLUHVRQWKH,54EXVFDQJHQHUDWHGLIIHUHQWLQWHUUXSWQXPEHUV&RQVHTXHQWO\GLIIHUHQWVQHHGWRUHSRUWGLIIHUHQWLQWHUUXSWQXPEHUV7KHRQO\UHDVRQDEO\HDV\ZD\WRGRWKLVZDVWRPDNHWKHSURJUDPPDEOH$QFDQEHSURJUDPPHGWRUHSRUWDQ\HLJKWFRQVHFXWLYHQXPEHUVVWDUWLQJDWDQ\PXOWLSOHRIOHVVWKDQ3URJUDPPLQJRIWKHLVGRQHDWERRWWLPHXVLQJ287FRPPDQGV7KH(2,FRPPDQGLQODQJXDJHLV+,QWKH,6$DUFKLWHFWXUHWKHPDVWHULVDVVLJQHGWKHGDWDSRUW+&RXOGWKLVEHJHHNKXPRUDWZRUN"DVZHOODV+7KHVODYHLVDVVLJQHGWKHSRUWV$+DQG$+$Q(2,FRPPDQGLQUHVSRQVHWRDQLQWHUUXSWIURPWKHVODYHFRQWUROOHULVVHQWWRERWK$+DQG+,54V0RVWRIWKHVH,54OLQHVKDYHVSHFLILHGSXUSRVHVLQWKH,6$DUFKLWHFWXUH$OORIWKHPKDYHIL[HGLQWHUUXSWQXPEHUV:KLOHRQHLQWHUUXSWLVEHLQJVHUYLFHGRUZKLOHWKHLQWHUUXSWIODJLVFOHDUHGXQVHUYLFHGLQWHUUXSWVPD\SLOHXS7KHLQWHUUXSWFRQWUROOHUFLUFXLWSULRULWL]HVWKHVHLQWHUUXSWVLQWKHRUGHU,54,54,54«,54,54,54«,54,54KDVWKHKLJKHVWSULRULW\,54KDVWKHORZHVW7KHIDFWWKDWWKHUHDUHRQO\DIHZ,54OLQHVDYDLODEOHKDVOHDGWR,54FRQIOLFWV,54VKDULQJDVZHOODVVZLWFKHVRQFDUGVZKLFK1HVWHG,QWHUUXSWV0RVWFRPSXWHUVSULRULWL]HLQWHUUXSWVDQGWKHQDOORZKLJKHUSULRULW\LQWHUUXSWVWRLQWHUUXSWWKRVHRIORZHUSULRULW\7KLVNLQGRISROLF\LVFDOOHGDQHVWHGLQWHUUXSWSROLF\,PSOHPHQWLQJDQHVWHGLQWHUUXSWSROLF\RQDQ[UHTXLUHVWKDWERWKWKHLQWHUUXSWFRQWUROOHUDQGWKHSURJUDPPHUEHJLYHQPRUHUHVSRQVLELOLW\2QWKH[WKHSURJUDPPHUKDVFRQWURORYHUWKHLQWHUUXSWHQDEOHIODJ7KH67,FRPPDQGVHWVWKHLQWHUUXSWHQDEOHIODJ7KH&/,FRPPDQGFOHDUVLW%\LQFOXGLQJDQ67,FRPPDQGDWWKHEHJLQQLQJRIDQ,65WKHSURJUDPPHUFDQRYHUULGHWKHGHIDXOWRQHDWDWLPHSROLF\DQGPDNHDQ,65LQWHUUXSWLEOH,QWHUUXSWVFDQQRWEHQHVWHGLIWKH\H[HFXWHZLWKWKHLQWHUUXSWHQDEOHIODJFOHDUHG7KHUHLVDOVRPRUHZRUNIRUWKHLQWHUUXSWFRQWUROOHU,IWKH[H[HFXWHV,65VZLWKWKHLQWHUUXSWHQDEOHIODJVHWWKHQWKHLQWHUUXSWFRQWUROOHUKDVWRDVVXPHUHVSRQVLELOLW\IRUHQIRUFLQJWKHSULRULW\V\VWHP6LQFHWKHSURFHVVRUKDVLWVJXDUGGRZQWKHLQWHUUXSWFRQWUROOHUPXVWQRWOHWHYHU\LQFRPLQJLQWHUUXSWSDVVWKURXJK2WKHUZLVHDVQRWHGDERYHWKH,65VFRXOGSOD\SLQJSRQJZLWKWKHSURFHVVRU,QSDUWLFXODUWKHFRQWUROOHULVUHVSRQVLEOHIRUQRWLQWHUUXSWLQJDQLQWHUUXSWXQOHVVWKH,65EHLQJLQWHUUXSWHGKDVDORZHUSULRULW\WKDQWKHRQHLWLVDOORZLQJWKURXJK,IWKH,65H[HFXWLQJKDVHTXDORUKLJKHUSULRULW\WKHQWKHSHQGLQJLQWHUUXSWPXVWZDLWXQWLOWKH,65LVILQLVKHG%XWLQRUGHUIRUWKHFRQWUROOHUWRKROGRIIWKHSHQGLQJLQWHUUXSWXQWLOWKHQLWQHHGVWRNQRZZKHQWKH,65JHWVGRQH,WQHHGVDVLJQDO:LWKRXWDVLJQDOLWKDVQRZD\RINQRZLQJ,ILWGRHVQWNQRZZKHWKHUDKLJKSULRULW\,65LVILQLVKHGH[HFXWLQJWKHQLWFDQQRWGHFLGHZKHWKHULWLVRND\WRLQWHUUXSWWKH&38ZLWKDORZSULRULW\LQWHUUXSWRUQRW6LQFHWKHLQWHUUXSWFRQWUROOHUKDVLWVRZQUHDGF\FOHRQHPLJKWH[SHFWDZULWHF\FOHIRUWKLVSXUSRVH7KH(2,&RPPDQG6LQFHWKH[GRHVQRWKDYHDQ,2FRQWUROOHUZULWHF\FOHLWIDOOVWRWKHORWRIWKHSURJUDPPHUWRLQFOXGHDQ$OO'RQHPHVVDJHWRWKHLQWHUUXSWFRQWUROOHUDWWKHHQGRIHDFK,657KLVPHVVDJHLVFDOOHGDQ(2,RUHQGRILQWHUUXSWFRPPDQG6RWKDWWKHLQWHUUXSWFRQWUROOHUFDQUHFHLYHFRPPXQLFDWLRQVIURPWKHSURFHVVRULWKDVDQ,2DGGUHVV7KHSURJUDPPHUFDQWKHQXVHDQ287FRPPDQGWRLVVXHWKH(2,7KH,2DGGUHVVLVDOVRXVHGZKHQWKHLQWHUUXSWFRQWUROOHUJHWVSURJUDPPHG$VQRWHGDERYHLWQHHGVWREHSURJUDPPHGVRWKDWLWNQRZVZKDWLQWHUUXSWQXPEHUVWRUHSRUW$VDGHYLFHZLWKDQ,2DGGUHVVWKHLQWHUUXSWFRQWUROOHUORRNVOLNHMXVWDQ\RWKHU,2GHYLFH%XWLWLVVSHFLDOLQWKDWLWLVWKHRQO\,2GHYLFHWKDWFDQVLJQDOWKHSURFHVVRUGLUHFWO\$OOWKHRWKHUVPXVWJRWKURXJKWKHLQWHUUXSWFRQWUROOHU7KH 10 ,DQG5(6(7,QWHUUXSWV%HVLGHVWKHJHQHUDOSXUSRVHLQWHUUXSWSLQRQWKH[WKHUHDUHWZRRWKHULQWHUUXSWSLQV7KH\DUHWKH 10 ,DQG5(6(7SLQV$VLJQDORQWKH 10 ,RUQRQPDVNDEOHLQWHUUXSWSLQLVQRWEORFNHGE\FOHDULQJWKHLQWHUUXSWHQDEOHIODJ,WGRHVQRWWULJJHUDQLQWHUUXSWDFNQRZOHGJHEXVF\FOH,WLVVHUYLFHGE\LQWHUUXSWVHUYLFHURXWLQHQXPEHU,WLVXVHGWRVLJQDOSDULW\HUURUVLQPHPRU\RUSRZHUVXSSO\SUREOHPV7KH5(6(7SLQLVLQWHQGHGIRUXVHLQVLWXDWLRQVZKHUHWKHUHPD\EHQRLQWHUUXSWGHVFULSWRUWDEOHLQPHPRU\)RUH[DPSOHZKHQWKHFRPSXWHULVEHLQJWXUQHGRQ&RQVHTXHQWO\WKHUHLVQRSRLQWLQVWRULQJDQDGGUHVVIRULWLQWKHLQWHUUXSWWDEOH,QVWHDGWKHDGGUHVVLVEXLOWLQWRWKHSURFHVVRU7KDWDGGUHVVLV)))))))+RU))))+RQWKH,WLVHDVLO\UHPHPEHUHGDV±LQWZRVFRPSOHPHQW7KHUHDGRQO\PHPRU\DWWKLVDGGUHVVPXVWFRQWDLQDMXPSLQVWUXFWLRQZKRVHWDUJHWLVWKH3267RU3RZHU2Q6HOI7HVWSURJUDP7KLV6HFWLRQ+HDGHU7DEOH7KH6HFWLRQ+HDGHUWDEOHOLVWVDOOWKHVHFWLRQVLQWKHREMHFWILOH7KHWDEOHVKRZQLQ7DEOHZDVSURGXFHGE\UXQQLQJRERQWKHRILOHIRU3URJUDP7KH)ODJVLWHPFRQWDLQVDWWULEXWHELWVZKLFKDUHVRPHZKDWOLNHWKHSHUPLVVLRQELWVLQWKHSURJUDPKHDGHUWDEOHRIWKHH[HFWXDEOHILOH%LWLVLIDVHFWLRQLVH[HFXWDEOH,Q7DEOHWKHRQO\VHFWLRQZLWKELWVHWLVVHFWLRQZKLFKLVLQIDFWWKHWH[WVHFWLRQ%LWLVIRUZULWHDEOHVHFWLRQV2QO\VHFWLRQVDQGDUHZULWHDEOH6HFWLRQWXUQVRXWWREHWKHGDWDVHFWLRQ6HFWLRQV:KHQWKHOLQNHUFUHDWHVDWH[WVHJPHQWLWFRPELQHVWKHWH[WVHFWLRQVIURPWKHREMHFWFRGHILOHV:KHQLWFUHDWHVDGDWDVHJPHQWLWFRPELQHVGDWDVHFWLRQV7KHOLQNLQJSURFHVVLQYROYHVFROODWLQJ:KHQWKHJQXOLQNHUOLQNVRILOHVLWQHHGVWRGHVLJQDWHDQDGGUHVVZKHUHH[FHFXWLRQLVWRFRPPHQFH7KHSURJUDPPHUFDQGHVLJQDWHWKLVE\XVLQJWKHODEHOPDLQDQGPDNLQJVXUHLWLVYLVLEOHWRWKHOLQNHUE\XVLQJWKHJOREDODVVHPEOHUGLUHFWLYH)XUWKHU5HDGLQJ8QGHUVWDQGLQJ(/)2EMHFW)LOHVDQG'HEXJJLQJ7RROV0DU\/RX1RKU3UHQWLFH+DOO&KDSWHU ,17 (5583767KHIHWFKH[HFXWHF\FOHLVDSURJUDPGULYHQPRGHORIFRPSXWDWLRQ%XWFRPSXWHUVDUHQRWWRWDOO\SURJUDPGULYHQ7RVRPHH[WHQWWKH\DUHKDUGZDUHGULYHQ&38VDUHHTXLSSHGZLWKLQSXWVLJQDOSLQVZKLFKDOORZWKHIHWFKH[HFXWHF\FOHWREHLQWHUUXSWHG7KHRULJLQDOSXUSRVHRIWKHVHSLQVZDVWRLQFUHDVHSURFHVVRUHIILFLHQF\E\UHGXFLQJWKHDPRXQWRIWLPHVSHQWLQFRPPXQLFDWLRQZLWK,2GHYLFHV,QFKDSWHUZHVDZKRZDGHYLFHWRLQFUHDVHPHPRU\HIILFLHQF\ZDVDGRSWHGDVDGHYLFHIRUFRQWUROOLQJPHPRU\DFFHVV,QWHUUXSWVKDYHXQGHUJRQHDVLPLODUWUDQVLWLRQ7KLVFKDSWHUEHJLQVE\GHVFULELQJKRZLQWHUUXSWVHFRQRPL]HRQSURFHVVRUWLPH7KHQVWDUWLQJZLWKVHFWLRQZHZLOOVHHKRZLQWHUUXSWVDUHXVHGWRFRQWUROSURFHVVRUDFFHVV3ROOLQJ7DEOH6HFWLRQ+HDGHU7DEOHIRU3URJUDPOEF6HFWLRQ+HDGHU7DEOH1DPH7\SH)OJV9LUWXDO$GGUHVV2IIVHW6L]H/LQN,QIR$OJQ0RG(QWU\6L]HEDEFGGFHFFHGIDDE1DPHLQGH[LQWRWKH6HFWLRQ+HDGHU6WULQJ7DEOHVKVWUDE7\SH ... RQO\DIHZ,54OLQHVDYDLODEOHKDVOHDGWR,54FRQIOLFWV,54VKDULQJDVZHOODVVZLWFKHVRQFDUGVZKLFKDOORZDQ,54OLQHWREHFKDQJHG/LQX[PDLQWDLQVDFRXQWRIWKHLQWHUUXSWUHTXHVWVZKLFKFRPHLQRQWKH,54OLQHV7RVHHWKLVFRXQW\RXPD\XVHWKHFRPPDQGOLQX[ER[FDWSURFLQWHUUXSWV7KHRXWSXWRIWKLVFRPPDQGVKRXOGEHFRPSDUHGZLWK7DEOH,QWHUQDODQG6RIWZDUH,QWHUUXSWV,QWHUUXSWVZKLFKGRQRWDULVHDVWKHUHVXOWRIDQH[WHUQDOVLJQDORQDQLQWHUUXSWSLQDOVRH[LVW([FHSWLRQV6XSSRVHWKDWWKHIHWFKH[HFXWHF\FOHHQFRXQWHUVWKHPDFKLQHFRGH))+7KLVPDFKLQHFRGHLVQRWGHILQHG6XSSRVHD029LQVWUXFWLRQDWWHPSWVWRDFFHVVDPHPRU\DGGUHVVWRZKLFKWKHRSHUDWLQJV\VWHPKDVQRWJLYHQSHUPLVVLRQ6XSSRVHWKDWWKH',9FRPPDQGSURGXFHVDTXRWLHQWZKLFKLVWRRELJIRUWKHGHVWLQDWLRQUHJLVWHU6XSSRVHWKDWWKHVWDFNRYHUIORZV7KHVHDUHVLWXDWLRQVZKHUHWKHGHVLJQHUVRIWKH[SUHIHUUHGWRGHOHJDWHWRWKHRSHUDWLQJV\VWHPWKHGHFLVLRQDVWRZKDWDFWLRQVKRXOGEHWDNHQ,QIDFWWKH\IRUFHGWKHRSHUDWLQJV\VWHPWRWDNHRYHUDWWKHVHSRLQWVE\DVVLJQLQJLQWHUUXSWQXPEHUVWRWKHVHH[FHSWLRQV7KHVHLQWHUUXSWQXPEHUVDUHEXLOWLQWRWKH[SURFHVVRUV([FHSWLRQVGRQRWXVHLQWHUUXSWDFNQRZOHGJHEXVF\FOHV%XWWKH\PXVWEHKDQGOHGE\QXPEHUHG,65VMXVWDVH[WHUQDOLQWHUUXSWVDUH7DEOHOLVWVWKHH[FHSWLRQVZKLFKDUHEXLOWLQWRWKH[SURFHVVRUV1RWHWKDWVRPHRIWKHVHLQWHUUXSWQXPEHUVDUHWKHVDPHDVWKHLQWHUUXSWQXPEHUVUHSRUWHGE\DQ,6$LQWHUUXSWFRQWUROOHU:KHQLQWHUUXSWVDUHVKDUHGOLNHWKLVWKH,65LVVWXFNZLWKWKHUHVSRQVLELOLW\IRUGLVWLQJXLVKLQJZKLFKVLWXDWLRQKDVFDXVHGWKHLQWHUUXSW6RIWZDUH,QWHUUXSWV,QRUGHUWRPDNHWKHLQWHUUXSWVHUYLFHURXWLQHVDFFHVVLEOHWRSURJUDPPHUVWKH ,17 LQVWUXFWLRQZDVDGGHGWRWKHLQVWUXFWLRQVHW7KHV\QWD[LVVLPSO\ ,17 LPP7DEOH,6$,QWHUUXSW5RXWLQJV,54$OORFDWLRQ,QWHUUXSW1XPEHU,546\VWHP7LPHU+,54.H\ERDUG+,546HULDO3RUW%+,546HULDO3RUW&+,543DUDOOHO3RUW'+,54)ORSS\&RQWUROOHU(+,543DUDOOHO3RUW)+,545HDO7LPH&ORFN+,54DYDLODEOH+,54DYDLODEOH+,54DYDLODEOH+,540RXVH+,54(5525OLQH+,54+DUG'ULYH&RQWUROOHU+,54DYDLODEOH+3URJUDPLQWD...

... 7KHUHVRXUFHVRIWKHSURFHVVRUZKLFKDUHDFFHVVLEOHIURPWKLVOHYHORISULYLOHJHLQFOXGHDOOWKHGDWDVWUXFWXUHVYLWDOWRWKHIXQFWLRQLQJRIWKHRSHUDWLQJV\VWHPDVZHOODVWKHKDUGZDUHDQGWKHPHPRU\:KHQWKH,65LVFRQFOXGHGWKHQZLWKRQHH[FHSWLRQFRQWUROLVUHWXUQHGWRWKHXVHUFRGH%RWKWKHROGVWDFNDQGWKH&3/DUHUHVWRUHG7KHH[FHSWLRQLVLQWKHFDVHRIWKHWLPHULQWHUUXSW6FKHGXOLQJ,Q7DEOHZHVHHWKDWWKHPDVNDEOHLQWHUUXSWZLWKWKHKLJKHVWSULRULW\LVWKHWLPHULQWHUUXSW7KH,65IRUWKLVLQWHUUXSWNHHSVWUDFNRIWLPHXVHGE\DOOSURFHVVHV,QSDUWLFXODULWVHWVDIODJFDOOHGQHHGBUHVFKHGZKHQDSURFHVVLVRXWRIWLPH:KHQ/LQX[GRHVDUHWXUQIURPDQ\LQWHUUXSWWKHWLPHULQWHUUXSWLQFOXGHGLWFKHFNVWKLVIODJDQGFDOOVWKHVFKHGXOHLIQHHGBUHVFKHGLVVHW7KHVFKHGXOHV\VWHPFDOOLVWKHVFKHGXOHU,WLVWKHFHQWUDOSURJUDPLQWKHRSHUDWLQJV\VWHP,WGHWHUPLQHVZKLFKSURFHVVJHWVWRUXQQH[W:KHQQHFHVVDU\LWLQLWLDWHVDWDVNVZLWFK6RWKHXOWLPDWHFRPSXWLQJUHVRXUFHSURFHVVRUWLPHDOVRIDOOVXQGHUWKHFRQWURORIWKH&3/EDVHGSURWHFWLRQV\VWHP)XUWKHU5HDGLQJ,6$6\VWHP$UFKLWHFWXUH7RP6KDQOH\DQG'RQ$QGHUVRQ$GGLVRQ:HVOH\,QWHUUXSW'ULYHQ3&6\VWHP'HVLJQ-RVHSK0F*LYHUQ$QQDERRNV&KDSWHU%,70 $1, 38/$7, 216 %LWZLVH/RJLF2SHUDWLRQV7KH $1& apos;25 12 7DQG;25&RPPDQGV%LW6HWWLQJDQG7HVWLQJ6KLIW,QVWUXFWLRQV%LWZLVH/RJLF2SHUDWLRQV,QFKDSWHUVHFWLRQFLUFXLWVDQGWUXWKWDEOHVIRUWKH%RROHDQRSHUDWLRQV $1& apos;25 12 7DQG;25ZHUHGLVFXVVHG7KHWUXWKWDEOHIRU $1& apos;LVDQGLVLPSOHPHQWHGXVLQJWKH%RROHDQFLUFXLW,IHLJKWRIWKHVH%RROHDQFLUFXLWVDUHXVHGLQSDUDOOHOWKHQWZRHLJKWELWQXPEHUVZKHQIHGLQWRWKHHLJKW $1& apos;JDWHVUHVXOWLQRQHHLJKWELWRXWSXW7KHRSHUDWLRQLVFDUULHGRXWDVVKRZQLQ)LJXUH,QKH[QRWDWLRQWKHE\WHV)+DQG&+XVHGDVLQSXWVWRDRQHE\WH $1& apos;RSHUDWLRQKDYHSURGXFHGWKHRXWSXW&+7KLVRSHUDWLRQFDQEHDSSOLHGWRDQ\QXPEHURIELWV7KH%RROHDQRSHUDWLRQV25;25DQG 12 7FDQDOVREHDSSOLHGLQELWZLVHSDUDOOHOIDVKLRQ)LJXUH%LWZLVH $1& apos;2SHUDWLRQ7KH $1& apos;25 12 7DQG;25&RPPDQGV+LJKOHYHOSURJUDPPLQJODQJXDJHVLQFOXGHVXSSRUWIRU%RROHDQRSHUDWLRQVVXFKDV $1& apos;25DQG 12 77KH\UHO\RQDVVHPEOHUDQGPDFKLQHOHYHOLPSOHPHQWDWLRQRIWKHVHRSHUDWLRQV7KH $1& apos;LQVWUXFWLRQDSSOLHVWKH $1& apos;RSHUDWLRQWRWZRRSHUDQGVLQPXFKWKHVDPHZD\WKDWWKH$''LQVWUXFWLRQDGGVWZRRSHUDQGV7KHIROORZLQJIRUPVDUHDOOYDOLGIRUWKH $1& apos;FRPPDQG $1& apos;UHJLPP $1& apos;UHJUHJSTS $1& apos;TE\DXVHUWKHXVHUFRXOGWDNHFRQWURORISK\VLFDOPHPRU\029XVHGZLWKFRQWUROUHJLVWHUVLVDQRWKHUJRRGH[DPSOHRIDSULYLOHJHGLQVWUXFWLRQ6WDFN3UREOHPV6LQFHWKH,65FRGHWKDWWKHLQWHUUXSWLVMXPSLQJWRPD\ZHOOXVHWKHVWDFNLWLVLPSRUWDQWWKDWWKHVWDFNQRWEHVXEMHFWWRZULWHDFFHVVE\WKHXVHU(YHQWKRXJKXVHUFRGHZLOOQRWIXQFWLRQDJDLQXQWLOWKH,65H[LWVWKHUHFDQVWLOOEHWURXEOH)RUH[DPSOHVXSSRVHWKDWWKHV\VWHPFDOOUHDGLVEHLQJH[HFXWHGUHDGWUDQVIHUVGDWDIURPDILOHWRXVHUPHPRU\2QHRIWKHSDUDPHWHUVWRWKLVFDOOLVWKHDGGUHVVRIVRPHPHPRU\WKDWWKHXVHUKDVSHUPLVVLRQWRZULWHRQ,QH[HFXWLQJWKHFDOOWKHV\VWHPZLOOVWRUHILOHGDWDDWWKDWDGGUHVV,IWKHVWDFNEHLQJXVHGE\WKHV\VWHPLVWKHXVHUVVWDFNWKHQWKHXVHUKDVSHUPLVVLRQWRZULWHRQLW7KHXVHUPD\WKHQVXSSO\WKHVWDFNDGGUHVVDVSDUDPHWHUWRUHDGDQGWKHV\VWHPZLOOWKHQPHVVXSWKHVWDFNLWLVXVLQJDWWKHYHU\WLPHLWLVXVLQJLW7KLVZRXOGFDXVHDFUDVK8VHUFRGHZULWHVZKHUHLWVKRXOGQWXVXDOO\E\PLVWDNHDQGQRWRXWRIPDOLFH%XWLWKDSSHQVDORW7KDWVZK\WKH6HJPHQWDWLRQ)DXOWHUURUPHVVDJHLVVRJDOOLQJO\IDPLOLDU&RGHIRUV\VWHPFDOOVOLNHUHDGQHHGVWRXVHLWVRZQVWDFN7KHUHLVDGLIIHUHQWVWDFNIRUHDFKYDOXHRIWKH&3/&KDQJLQJVWDFNVLVWDNHQFDUHRIE\WKHKDUGZDUH(DFKVWDFNKDVLWVRZQVWDFNSRLQWHU7KHVHIRXUVWDFNSRLQWHUVDUHVWRUHGLQDPHPRU\DUHDFDOOHGWKH7DVN6WDWH6HJPHQW7KHOD\RXWRIDJDWHLVEXLOWLQWRWKH[SURFHVVRU)LJXUHVKRZVWKHPRVWLPSRUWDQWILHOGVLQDJDWH7KHVHILHOGVFRQWDLQWZRLWHPVWKDWSHUWDLQWRWKLV)LJXUH*DWH/D\RXWGLVFXVVLRQ7KH\DUHz ... 7KHUHVRXUFHVRIWKHSURFHVVRUZKLFKDUHDFFHVVLEOHIURPWKLVOHYHORISULYLOHJHLQFOXGHDOOWKHGDWDVWUXFWXUHVYLWDOWRWKHIXQFWLRQLQJRIWKHRSHUDWLQJV\VWHPDVZHOODVWKHKDUGZDUHDQGWKHPHPRU\:KHQWKH,65LVFRQFOXGHGWKHQZLWKRQHH[FHSWLRQFRQWUROLVUHWXUQHGWRWKHXVHUFRGH%RWKWKHROGVWDFNDQGWKH&3/DUHUHVWRUHG7KHH[FHSWLRQLVLQWKHFDVHRIWKHWLPHULQWHUUXSW6FKHGXOLQJ,Q7DEOHZHVHHWKDWWKHPDVNDEOHLQWHUUXSWZLWKWKHKLJKHVWSULRULW\LVWKHWLPHULQWHUUXSW7KH,65IRUWKLVLQWHUUXSWNHHSVWUDFNRIWLPHXVHGE\DOOSURFHVVHV,QSDUWLFXODULWVHWVDIODJFDOOHGQHHGBUHVFKHGZKHQDSURFHVVLVRXWRIWLPH:KHQ/LQX[GRHVDUHWXUQIURPDQ\LQWHUUXSWWKHWLPHULQWHUUXSWLQFOXGHGLWFKHFNVWKLVIODJDQGFDOOVWKHVFKHGXOHLIQHHGBUHVFKHGLVVHW7KHVFKHGXOHV\VWHPFDOOLVWKHVFKHGXOHU,WLVWKHFHQWUDOSURJUDPLQWKHRSHUDWLQJV\VWHP,WGHWHUPLQHVZKLFKSURFHVVJHWVWRUXQQH[W:KHQQHFHVVDU\LWLQLWLDWHVDWDVNVZLWFK6RWKHXOWLPDWHFRPSXWLQJUHVRXUFHSURFHVVRUWLPHDOVRIDOOVXQGHUWKHFRQWURORIWKH&3/EDVHGSURWHFWLRQV\VWHP)XUWKHU5HDGLQJ,6$6\VWHP$UFKLWHFWXUH7RP6KDQOH\DQG'RQ$QGHUVRQ$GGLVRQ:HVOH\,QWHUUXSW'ULYHQ3&6\VWHP'HVLJQ-RVHSK0F*LYHUQ$QQDERRNV&KDSWHU%,70 $1, 38/$7, 216 %LWZLVH/RJLF2SHUDWLRQV7KH $1& apos;25 12 7DQG;25&RPPDQGV%LW6HWWLQJDQG7HVWLQJ6KLIW,QVWUXFWLRQV%LWZLVH/RJLF2SHUDWLRQV,QFKDSWHUVHFWLRQFLUFXLWVDQGWUXWKWDEOHVIRUWKH%RROHDQRSHUDWLRQV $1& apos;25 12 7DQG;25ZHUHGLVFXVVHG7KHWUXWKWDEOHIRU $1& apos;LVDQGLVLPSOHPHQWHGXVLQJWKH%RROHDQFLUFXLW,IHLJKWRIWKHVH%RROHDQFLUFXLWVDUHXVHGLQSDUDOOHOWKHQWZRHLJKWELWQXPEHUVZKHQIHGLQWRWKHHLJKW $1& apos;JDWHVUHVXOWLQRQHHLJKWELWRXWSXW7KHRSHUDWLRQLVFDUULHGRXWDVVKRZQLQ)LJXUH,QKH[QRWDWLRQWKHE\WHV)+DQG&+XVHGDVLQSXWVWRDRQHE\WH $1& apos;RSHUDWLRQKDYHSURGXFHGWKHRXWSXW&+7KLVRSHUDWLRQFDQEHDSSOLHGWRDQ\QXPEHURIELWV7KH%RROHDQRSHUDWLRQV25;25DQG 12 7FDQDOVREHDSSOLHGLQELWZLVHSDUDOOHOIDVKLRQ)LJXUH%LWZLVH $1& apos;2SHUDWLRQ7KH $1& apos;25 12 7DQG;25&RPPDQGV+LJKOHYHOSURJUDPPLQJODQJXDJHVLQFOXGHVXSSRUWIRU%RROHDQRSHUDWLRQVVXFKDV $1& apos;25DQG 12 77KH\UHO\RQDVVHPEOHUDQGPDFKLQHOHYHOLPSOHPHQWDWLRQRIWKHVHRSHUDWLRQV7KH $1& apos;LQVWUXFWLRQDSSOLHVWKH $1& apos;RSHUDWLRQWRWZRRSHUDQGVLQPXFKWKHVDPHZD\WKDWWKH$''LQVWUXFWLRQDGGVWZRRSHUDQGV7KHIROORZLQJIRUPVDUHDOOYDOLGIRUWKH $1& apos;FRPPDQG $1& apos;UHJLPP $1& apos;UHJUHJSTS $1& apos;TE\DXVHUWKHXVHUFRXOGWDNHFRQWURORISK\VLFDOPHPRU\029XVHGZLWKFRQWUROUHJLVWHUVLVDQRWKHUJRRGH[DPSOHRIDSULYLOHJHGLQVWUXFWLRQ6WDFN3UREOHPV6LQFHWKH,65FRGHWKDWWKHLQWHUUXSWLVMXPSLQJWRPD\ZHOOXVHWKHVWDFNLWLVLPSRUWDQWWKDWWKHVWDFNQRWEHVXEMHFWWRZULWHDFFHVVE\WKHXVHU(YHQWKRXJKXVHUFRGHZLOOQRWIXQFWLRQDJDLQXQWLOWKH,65H[LWVWKHUHFDQVWLOOEHWURXEOH)RUH[DPSOHVXSSRVHWKDWWKHV\VWHPFDOOUHDGLVEHLQJH[HFXWHGUHDGWUDQVIHUVGDWDIURPDILOHWRXVHUPHPRU\2QHRIWKHSDUDPHWHUVWRWKLVFDOOLVWKHDGGUHVVRIVRPHPHPRU\WKDWWKHXVHUKDVSHUPLVVLRQWRZULWHRQ,QH[HFXWLQJWKHFDOOWKHV\VWHPZLOOVWRUHILOHGDWDDWWKDWDGGUHVV,IWKHVWDFNEHLQJXVHGE\WKHV\VWHPLVWKHXVHUVVWDFNWKHQWKHXVHUKDVSHUPLVVLRQWRZULWHRQLW7KHXVHUPD\WKHQVXSSO\WKHVWDFNDGGUHVVDVSDUDPHWHUWRUHDGDQGWKHV\VWHPZLOOWKHQPHVVXSWKHVWDFNLWLVXVLQJDWWKHYHU\WLPHLWLVXVLQJLW7KLVZRXOGFDXVHDFUDVK8VHUFRGHZULWHVZKHUHLWVKRXOGQWXVXDOO\E\PLVWDNHDQGQRWRXWRIPDOLFH%XWLWKDSSHQVDORW7KDWVZK\WKH6HJPHQWDWLRQ)DXOWHUURUPHVVDJHLVVRJDOOLQJO\IDPLOLDU&RGHIRUV\VWHPFDOOVOLNHUHDGQHHGVWRXVHLWVRZQVWDFN7KHUHLVDGLIIHUHQWVWDFNIRUHDFKYDOXHRIWKH&3/&KDQJLQJVWDFNVLVWDNHQFDUHRIE\WKHKDUGZDUH(DFKVWDFNKDVLWVRZQVWDFNSRLQWHU7KHVHIRXUVWDFNSRLQWHUVDUHVWRUHGLQDPHPRU\DUHDFDOOHGWKH7DVN6WDWH6HJPHQW7KHOD\RXWRIDJDWHLVEXLOWLQWRWKH[SURFHVVRU)LJXUHVKRZVWKHPRVWLPSRUWDQWILHOGVLQDJDWH7KHVHILHOGVFRQWDLQWZRLWHPVWKDWSHUWDLQWRWKLV)LJXUH*DWH/D\RXWGLVFXVVLRQ7KH\DUHz ... 7KHUHVRXUFHVRIWKHSURFHVVRUZKLFKDUHDFFHVVLEOHIURPWKLVOHYHORISULYLOHJHLQFOXGHDOOWKHGDWDVWUXFWXUHVYLWDOWRWKHIXQFWLRQLQJRIWKHRSHUDWLQJV\VWHPDVZHOODVWKHKDUGZDUHDQGWKHPHPRU\:KHQWKH,65LVFRQFOXGHGWKHQZLWKRQHH[FHSWLRQFRQWUROLVUHWXUQHGWRWKHXVHUFRGH%RWKWKHROGVWDFNDQGWKH&3/DUHUHVWRUHG7KHH[FHSWLRQLVLQWKHFDVHRIWKHWLPHULQWHUUXSW6FKHGXOLQJ,Q7DEOHZHVHHWKDWWKHPDVNDEOHLQWHUUXSWZLWKWKHKLJKHVWSULRULW\LVWKHWLPHULQWHUUXSW7KH,65IRUWKLVLQWHUUXSWNHHSVWUDFNRIWLPHXVHGE\DOOSURFHVVHV,QSDUWLFXODULWVHWVDIODJFDOOHGQHHGBUHVFKHGZKHQDSURFHVVLVRXWRIWLPH:KHQ/LQX[GRHVDUHWXUQIURPDQ\LQWHUUXSWWKHWLPHULQWHUUXSWLQFOXGHGLWFKHFNVWKLVIODJDQGFDOOVWKHVFKHGXOHLIQHHGBUHVFKHGLVVHW7KHVFKHGXOHV\VWHPFDOOLVWKHVFKHGXOHU,WLVWKHFHQWUDOSURJUDPLQWKHRSHUDWLQJV\VWHP,WGHWHUPLQHVZKLFKSURFHVVJHWVWRUXQQH[W:KHQQHFHVVDU\LWLQLWLDWHVDWDVNVZLWFK6RWKHXOWLPDWHFRPSXWLQJUHVRXUFHSURFHVVRUWLPHDOVRIDOOVXQGHUWKHFRQWURORIWKH&3/EDVHGSURWHFWLRQV\VWHP)XUWKHU5HDGLQJ,6$6\VWHP$UFKLWHFWXUH7RP6KDQOH\DQG'RQ$QGHUVRQ$GGLVRQ:HVOH\,QWHUUXSW'ULYHQ3&6\VWHP'HVLJQ-RVHSK0F*LYHUQ$QQDERRNV&KDSWHU%,70 $1, 38/$7, 216 %LWZLVH/RJLF2SHUDWLRQV7KH $1& apos;25 12 7DQG;25&RPPDQGV%LW6HWWLQJDQG7HVWLQJ6KLIW,QVWUXFWLRQV%LWZLVH/RJLF2SHUDWLRQV,QFKDSWHUVHFWLRQFLUFXLWVDQGWUXWKWDEOHVIRUWKH%RROHDQRSHUDWLRQV $1& apos;25 12 7DQG;25ZHUHGLVFXVVHG7KHWUXWKWDEOHIRU $1& apos;LVDQGLVLPSOHPHQWHGXVLQJWKH%RROHDQFLUFXLW,IHLJKWRIWKHVH%RROHDQFLUFXLWVDUHXVHGLQSDUDOOHOWKHQWZRHLJKWELWQXPEHUVZKHQIHGLQWRWKHHLJKW $1& apos;JDWHVUHVXOWLQRQHHLJKWELWRXWSXW7KHRSHUDWLRQLVFDUULHGRXWDVVKRZQLQ)LJXUH,QKH[QRWDWLRQWKHE\WHV)+DQG&+XVHGDVLQSXWVWRDRQHE\WH $1& apos;RSHUDWLRQKDYHSURGXFHGWKHRXWSXW&+7KLVRSHUDWLRQFDQEHDSSOLHGWRDQ\QXPEHURIELWV7KH%RROHDQRSHUDWLRQV25;25DQG 12 7FDQDOVREHDSSOLHGLQELWZLVHSDUDOOHOIDVKLRQ)LJXUH%LWZLVH $1& apos;2SHUDWLRQ7KH $1& apos;25 12 7DQG;25&RPPDQGV+LJKOHYHOSURJUDPPLQJODQJXDJHVLQFOXGHVXSSRUWIRU%RROHDQRSHUDWLRQVVXFKDV $1& apos;25DQG 12 77KH\UHO\RQDVVHPEOHUDQGPDFKLQHOHYHOLPSOHPHQWDWLRQRIWKHVHRSHUDWLRQV7KH $1& apos;LQVWUXFWLRQDSSOLHVWKH $1& apos;RSHUDWLRQWRWZRRSHUDQGVLQPXFKWKHVDPHZD\WKDWWKH$''LQVWUXFWLRQDGGVWZRRSHUDQGV7KHIROORZLQJIRUPVDUHDOOYDOLGIRUWKH $1& apos;FRPPDQG $1& apos;UHJLPP $1& apos;UHJUHJSTS $1& apos;TE\DXVHUWKHXVHUFRXOGWDNHFRQWURORISK\VLFDOPHPRU\029XVHGZLWKFRQWUROUHJLVWHUVLVDQRWKHUJRRGH[DPSOHRIDSULYLOHJHGLQVWUXFWLRQ6WDFN3UREOHPV6LQFHWKH,65FRGHWKDWWKHLQWHUUXSWLVMXPSLQJWRPD\ZHOOXVHWKHVWDFNLWLVLPSRUWDQWWKDWWKHVWDFNQRWEHVXEMHFWWRZULWHDFFHVVE\WKHXVHU(YHQWKRXJKXVHUFRGHZLOOQRWIXQFWLRQDJDLQXQWLOWKH,65H[LWVWKHUHFDQVWLOOEHWURXEOH)RUH[DPSOHVXSSRVHWKDWWKHV\VWHPFDOOUHDGLVEHLQJH[HFXWHGUHDGWUDQVIHUVGDWDIURPDILOHWRXVHUPHPRU\2QHRIWKHSDUDPHWHUVWRWKLVFDOOLVWKHDGGUHVVRIVRPHPHPRU\WKDWWKHXVHUKDVSHUPLVVLRQWRZULWHRQ,QH[HFXWLQJWKHFDOOWKHV\VWHPZLOOVWRUHILOHGDWDDWWKDWDGGUHVV,IWKHVWDFNEHLQJXVHGE\WKHV\VWHPLVWKHXVHUVVWDFNWKHQWKHXVHUKDVSHUPLVVLRQWRZULWHRQLW7KHXVHUPD\WKHQVXSSO\WKHVWDFNDGGUHVVDVSDUDPHWHUWRUHDGDQGWKHV\VWHPZLOOWKHQPHVVXSWKHVWDFNLWLVXVLQJDWWKHYHU\WLPHLWLVXVLQJLW7KLVZRXOGFDXVHDFUDVK8VHUFRGHZULWHVZKHUHLWVKRXOGQWXVXDOO\E\PLVWDNHDQGQRWRXWRIPDOLFH%XWLWKDSSHQVDORW7KDWVZK\WKH6HJPHQWDWLRQ)DXOWHUURUPHVVDJHLVVRJDOOLQJO\IDPLOLDU&RGHIRUV\VWHPFDOOVOLNHUHDGQHHGVWRXVHLWVRZQVWDFN7KHUHLVDGLIIHUHQWVWDFNIRUHDFKYDOXHRIWKH&3/&KDQJLQJVWDFNVLVWDNHQFDUHRIE\WKHKDUGZDUH(DFKVWDFNKDVLWVRZQVWDFNSRLQWHU7KHVHIRXUVWDFNSRLQWHUVDUHVWRUHGLQDPHPRU\DUHDFDOOHGWKH7DVN6WDWH6HJPHQW7KHOD\RXWRIDJDWHLVEXLOWLQWRWKH[SURFHVVRU)LJXUHVKRZVWKHPRVWLPSRUWDQWILHOGVLQDJDWH7KHVHILHOGVFRQWDLQWZRLWHPVWKDWSHUWDLQWRWKLV)LJXUH*DWH/D\RXWGLVFXVVLRQ7KH\DUHz...

... 7KHVHJPHQWRIIVHWDGGUHVVRIWKHVWULQJLVVWRUHGLQ'6';7KHVWULQJPXVWEHWHUPLQDWHGE\DGROODUVLJQFKDUDFWHU$6&,,+0DQ\RIWKHVH'26IXQFWLRQVFDOOSURJUDPVVWRUHGLQ5207KH\DUHRIWHQFDOOHG%,26SURJUDPV0DQ\%,26LQWHUUXSWVDUHDFFHVVHGXVLQJ ,17 +RU ,17 +%,26,QWHUUXSWV7RFDOOWKH%,26IXQFWLRQWRRXWSXWDFKDUDFWHUWRWKHFXUVRUORFDWLRQRQWKHVFUHHQWKHIXQFWLRQQXPEHU$+LVVWRUHGLQWKH$+UHJLVWHUDQGWKH$6&,,FRGHRIWKHFKDUDFWHUWREHSULQWHGLVVWRUHGLQ'/7KHQXPEHURIWLPHVWKHFKDUDFWHULVWREHZULWWHQLVVWRUHGLQ&;029$+029'/$6&,,FRGHIRU+029&;1XPEHURIWLPHV+LVSULQWHG029%+&XUUHQWSDJH ,17 +7KH%+UHJLVWHUQHHGVDLQRUGHUWRVHQGWKHRXWSXWWRWKHYLGHREXIIHUGHVFULEHGLQVHFWLRQ7KHUHLVXVXDOO\DQRWKHU.YLGHREXIIHUVWDUWLQJDW%+7RDFFHVVWKLVEXIIHUDVKRXOGEHVWRUHGLQ%+(DFKRIWKHVHEXIIHUVLVFDOOHGDSDJH7KHVHSDJHVPDNHLWSRVVLEOHWRIOLSIURPRQHVFUHHQWRDQRWKHUZLWKRXWFRS\LQJ.RIPHPRU\7KH'26IXQFWLRQFDOOWDNHVUHVSRQVLELOLW\IRUDFFHVVLQJWKHFXUUHQWSDJHWKH%,26FDOOGRHVQRW)LJXUHLOOXVWUDWHVWKHW\SLFDOVHTXHQFHRIIXQFWLRQFDOOV7KHIDFWWKDW'26SURJUDPVFDOO%,26SURJUDPVDQGQRWGLUHFWO\WRWKHKDUGZDUHOHDYHVKDUGZDUHGHVLJQHUVIUHHWRPDNHDWOHDVWPLQRUFKDQJHVLQWKHLUKDUGZDUHZLWKRXWWKHQHFHVVLW\IRUFKDQJHVLQ'26%\UHYLVLQJWKH%,26SURJUDPVVRDVWRPDLQWDLQWKHVDPHIXQFWLRQDOLW\RI%,26LQWHUUXSWVFKDQJHVLQ'26EHFRPHXQQHFHVVDU\6LPLODUO\FKDQJHVLQ'26FDQEHDFFRPSOLVKHGZLWKRXWGLVUXSWLQJDSSOLFDWLRQVSURJUDPVSURYLGHGWKDWWKH'26LQWHUUXSWLVUHZULWWHQVRWKDWLWDIIRUGVWKHVDPHIXQFWLRQDOLW\WRWKHDSSOLFDWLRQVSURJUDP7KHVHOD\HUVDIIRUGDSSOLFDWLRQVSURJUDPPHUVV\VWHPVSURJUDPPHUVDQGKDUGZDUHGHVLJQHUVDPRGHVWGHJUHHRILQGHSHQGHQFHIURPRQHDQRWKHU)LJXUH'260HPRU\DQG3HULSKHUDO$FFHVV)XUWKHU5HDGLQJ$GYDQFHG$VVHPEO\/DQJXDJH3URJUDPPLQJ$OLHQ:\DWW6U4XH&KDSWHU/ ,18 ;%2277,0(352*5$06,QFKDSWHUZHGLVFXVVHGWKHPDLQGLIIHUHQFHVEHWZHHQWKHHQYLURQPHQWSURYLGHGWRXVHUSURJUDPVZKLFKUXQXQGHU/LQX[DQGWKHHQYLURQPHQWXQGHUZKLFK'26SURJUDPVUXQ:HVDZKRZYHU\GLIIHUHQWWKHVHWZRHQYLURQPHQWVDUH0XFKRIWKHGLIIHUHQFHEHWZHHQWKHVHWZRHQYLURQPHQWVLVGXHWRWKHIDFWWKDWDGLIIHUHQWRSHUDWLQJV\VWHPLVUXQQLQJLQHDFK%XWWKHUHLVDOVRDGLIIHUHQFHDWWKHKDUGZDUHOHYHO'26ZDVZULWWHQIRUWKHSURFHVVRU,QRUGHUIRU'26WRUXQRQDPDFKLQHWKDWPDFKLQHPXVWDFWOLNHDQ/LQX[LVDPXOWLWDVNLQJV\VWHP,QRUGHUIRULWWRUXQRQDPDFKLQHWKDWPDFKLQHPXVWKDYHKDUGZDUHVXSSRUWIRUWKHSURWHFWLRQRIRQHWDVNIURPDQRWKHU7KH[SURFHVVRUVIURPWKHRQVXSSRUWERWKRIWKHVHRSHUDWLQJV\VWHPVE\UXQQLQJLQWZRGLVWLQFWRSHUDWLQJPRGHVUHDOPRGHZKLFKHPXODWHVDQDQGSURWHFWHGPRGHZKLFKKDVPXOWLWDVNLQJVXSSRUW&KDQJLQJWR3URWHFWHG0RGH:KHWKHUDQ[SURFHVVRUUXQVLQUHDORUSURWHFWHGPRGHLVGHWHUPLQHGE\WKHERWWRPELWRIWKH&5UHJLVWHU7KLVUHJLVWHULVDELWH[WHQVLRQRIWKHELW0DFKLQH6WDWXV:RUGUHJLVWHURQWKH7KHOHDVWVLJQLILFDQWELWLQWKLVUHJLVWHULVDFWXDOO\WKHPRVWVLJQLILFDQWELWRQWKHHQWLUHSURFHVVRU,ILWLVFOHDUHGWKHSURFHVVRURSHUDWHVLQUHDOPRGH,ILWLVVHWWKHSURFHVVRURSHUDWHVLQSURWHFWHGPRGH7DEOHVKRZVWKHELWDOORFDWLRQVRIWKH&5UHJLVWHULQWKH7RFKDQJHWRSURWHFWHGPRGHIURP'26LVHDV\3URJUDP029($;&525($;0DNHWKHOHDVWVLJQLILFDQWELW029&5($;+HUHJRHV%XWFKDQJLQJWRSURWHFWHGPRGHVKRXOGQRWEHDWWHPSWHGZLWKRXWSUHSDUDWLRQ7KHPDFKLQHZLOOSURPSWO\FUDVKLI3URJUDPLVUXQEHIRUHWKHIROORZLQJVWHSVDUHWDNHQ6WHS,QSURWHFWHGPRGHDOOPHPRU\UHIHUHQFHVGHSHQGRQPHPRU\VHJPHQWGHVFULSWRUWDEOHVSDUWLFXODUO\RQWKHJOREDOGHVFULSWRUWDEOH0HPRU\UHIHUHQFHVLQFOXGLQJWKRVHXVHGLQFRGHIHWFKLQJZLOOQRWZRUNXQWLOWKHVHWDEOHVDUHVHWXS7KHVHWDEOHVDUHGLVFXVVHGLQVHFWLRQ7DEOH&55HJLVWHU%LWV/DEHO)XOO1DPH3*3DJLQJ(QDEOH&'&DFKH'LVDEOH 1: 1R:ULWH7KURXJK$0$OLJQPHQW0DVN:3:ULWH3URWHFW 1( 1XPHULF(UURU(QDEOH(7([WHQVLRQ7\SHYV767DVN6ZLWFKHG(0(PXODWH0DWK&KLS030DWK&KLS3UHVHQW3(3URWHFWHG0RGH(QDEOHDFFHVVDQ\WKLQJOLVWHGLQWKHUH$''$;0D\EHQRW*RWRWKHQH[WGHVFULSWRU-03+$.7KHORFDOWDEOHVDUHLQKHUH:HOOILQGWKHP0HPRU\SURWHFWLRQE\LWVHOIGRHVQWZRUN8VHUSURFHVVHVPXVWQRWEHDOORZHGWRH[HFXWHFRGHOLNHWKHDERYHFRGH6HWWLQJ8SWKH*OREDO'HVFULSWRU7DEOH:KHQDQ[SURFHVVRULVWXUQHGRQRUUHVWDUWHGLWGRHVQRWFUHDWHDJOREDOGHVFULSWRUWDEOHDXWRPDWLFDOO\+HQFHXQOHVVDPDQXIDFWXUHUSXWVRQHLQ520QRQHH[LVWVDWERRWWLPH6LQFHWKHSURFHVVRUFDQWXVHPHPRU\LQSURWHFWHGPRGHZLWKRXWDJOREDOWDEOHWKHSURFHVVRUPXVWERRWXSLQUHDOPRGH7KHSURFHVVRUFDQVXEVHTXHQWO\EHVZLWFKHGLQWRSURWHFWHGPRGHEXWRQO\DIWHUWKHJOREDOWDEOHKDVEHHQVHWXS7KHSURFHVVRUKDVEDVHDGGUHVVDQGOLPLWUHJLVWHUVIRUWKHJOREDOGHVFULSWRUWDEOH*'77KHVHUHJLVWHUVDUHORDGHGXVLQJWKHFRPPDQG/*'7PHPZKHUHPHPSRLQWVWRVL[E\WHVRIPHPRU\FRQWDLQLQJDWZRE\WHOLPLWDQGDIRXUE\WHEDVHDGGUHVVIRUWKHJOREDOWDEOH$OWKRXJKDUHJLVWHU029FRPPDQGPLJKWKDYHEHHQDPRUHFRQYHQLHQWZD\RIGRLQJWKLVWKHUHDUHQRVL[E\WHUHJLVWHUVDYDLODEOH$VDQH[DPSOHRIKRZZHPLJKWXVHWKH/*'7FRPPDQGVXSSRVHWKDWWHQGHVFULSWRUVWKDWZHZDQWWRXVHDVRXUJOREDOWDEOHKDYHEHHQVWRUHGVWDUWLQJDWDGGUHVV+2XUJOREDOWDEOHZLOOWKHUHIRUHEHHLJKW\E\WHVORQJDQGVWDUWDW+7KHOLPLWLVRQHOHVVWKDQHLJKW\RU)+,QRUGHUWRXVHWKH/*'7FRPPDQGZHQHHGWRVWRUHWKHVHYDOXHVLQPHPRU\VRPHZKHUH6XSSRVHZHVHWXSDVFUDWFKPHPRU\DUHDDW+DQGSXWRXU*'7YDOXHVWKHUH$IWHUWKLVFRGH3URJUDP029$;+6HWXSDVHJPHQWIRUWKHVFUDWFKDUHD029'6$;029$;)+*'7VOLPLWLVDE\WHYDOXH029>'6@$;6WRUHLQWRWKHILUVWE\WHVRIVFUDWFK029($;+*'7VEDVHDGGUHVVLVDE\WHYDOXH029>'6@($;6WRUHWKLVE\WHDGGUHVVE\WHVLQWRWKHVFUDWFK'RQWRYHUZULWHWKHILUVWWZRE\WHV/*'7>'6@7KLVORDGVWKHERWKWKH*'7EDVHDGGUHVVUHJLVWHUDQGWKH*'7OLPLWUHJLVWHULHORDGDOOE\WHVKDVH[HFXWHGWKH*'7EDVHVDGGUHVVDQGOLPLWUHJLVWHUVZLOOEHORDGHG7KHJOREDOWDEOHKDVQRWEHHQXVHGIRUDQ\WKLQJ\HW,QIDFWZHFRXOGHYHQUXQWKLVFRGHILUVWDQGWKHQVWRUHWKRVHHLJKW\E\WHVQH[W7KHJOREDOWDEOHZLOOQRWJRLQWRRSHUDWLRQXQWLOWKHSURFHVVRULVVZLWFKHGLQWRSURWHFWHGPRGH&ORVLQJ7KHVXUIDFHKDVEDUHO\EHHQVFUDWFKHG%XWWKHZD\IRUZDUGLVRSHQYDOXHDQGWKHQH[WWZRDUHDOLWWOHHQGLDQVHJPHQWYDOXHGHVLJQDWLRQ,QUHDOPRGHWKHWDEOHLVFXVWRPDULO\ORFDWHGVWDUWLQJDWDGGUHVV]HURLQPHPRU\6RWKHDGGUHVVRIWKHLQWHUUXSWVHUYLFHURXWLQHIRULQWHUUXSWLVVWRUHGLQE\WHVWKURXJK7KHDGGUHVVRIWKHURXWLQHIRULQWHUUXSWLVVWRUHGLQE\WHVWKURXJK,QJHQHUDOLIQLVWKHQXPEHURIDQLQWHUUXSWWKHQWKHDGGUHVVRIWKHHQWU\QXPEHUQLQWKHLQWHUUXSWWDEOHLVîQ)RUH[DPSOHLIWKHLQWHUUXSWQXPEHULV+WKHQWKHDGGUHVVRIWKH,65LVWREHIRXQGLQE\WHV&&+WR&)+7KHODUJHVWYDOLGLQWHUUXSWQXPEHULV7KHDGGUHVVIRUWKDWURXWLQHLVVWRUHGLQE\WHVWKURXJKRU)&+WKURXJK))+î ... 520520&03%+%/&RPSDUHROGZLWKQHZYDOXH-*352&KDQJHGIURP5$0WR520VRSULQW520-/35$&KDQJHGIURP520WR5$0VRSULQW5$0 ,1& amp;6,,QFUHPHQWPDLQORRSFRXQWHU%27 -1= 723' 81 5(7$OOGRQH352029'/553ULQWVWDUWRI520 ,17 +029'/2 ,17 +-0305*35$029'/553ULQWVWDUWRI5$0 ,17 +029'/$$ ,17 +05*029'/00 ,17 +029'/VSDFH! ,17 +029&/3UHSDUHWRSULQWIRXUGLJLWV35/029';',6+5';&/ $1& apos;';0DVNHYHU\WKLQJH[FHSWKH[RQHVGLJLW&03'/'RHVWKLVSULQWDVDQXPHUDORUDVDOHWWHU"-/ 10 /$'''//HWWHUVQHHGDQH[WUDVHYHQ 10 /$'''/+ ,17 +3ULQWKH[GLJLW68%&/-*(35/029'/)LIWKGLJLWLV ,17 +029'/&DUULDJHUHWXUQ ,17 +029'/1HHGDQ(2/WRR ,17 +5(73URWHFWHG0RGH0HPRU\6HJPHQWV7KHPRVWLPSRUWDQWFKDUDFWHULVWLFVRIDSURWHFWHGPRGHPHPRU\VHJPHQWDUHLWVEDVHDGGUHVVDQGLWVOLPLW6HH)LJXUHIRUDQH[DPSOHRID0HJVHJPHQWVLWXDWHGDWWKHKDOIZD\SRLQWRID0HJPHPRU\6XSSRVHWKDWWKH'6UHJLVWHUFRQWDLQVDVHOHFWRUVHOHFWLQJDGHVFULSWRUIRUWKLVPHPRU\VHJPHQW7KHQWKHFRPPDQG)LJXUH$3URWHFWHG0RGH0HPRU\6HJPHQW029($;>'6+@ZRXOGDFFHVVWKHIRXUE\WHVORFDWHGDWWKHDGGUHVVHV+WKURXJK+2QWKHRWKHUKDQGWKHFRPPDQG029($;>'6+@ZRXOGFDXVHDJHQHUDOSURWHFWLRQIDXOWDKDUGZDUHH[FHSWLRQZKLFKJHQHUDWHVLQWHUUXSWQXPEHU6HHFKDSWHUVHFWLRQ7KLVLVEHFDXVHWKHDOOIRXURIIVHWDGGUHVVHVUHIHUHQFHGE\WKHFRPPDQGH[FHHGWKHOLPLW)RUH[DPSOH+!)))))+7KHFRPPDQGLVWU\LQJWRUHDGIURPDORFDWLRQ0HJIURPWKHEHJLQQLQJRIDVHJPHQWZKLFKLVRQO\0HJLQOHQJWK%HFDXVHWKHKDUGZDUHHQIRUFHVWKHVHVHJPHQWERXQGDULHVWKHVHJPHQWDWLRQV\VWHPFDQEHXVHGWRSURWHFWRQHWDVNVPHPRU\IURPDQRWKHUV,WZDVXVHGWRSURWHFWNHUQHOPHPRU\IURPXVHUSURFHVVHVLQYHUVLRQVRI/LQX[EHIRUHYHUVLRQEXWLVQRORQJHUXVHGIRUPHPRU\SURWHFWLRQLQ/LQX[6HJPHQWVLQ/LQX[QRZXVHDEDVHDGGUHVVRIDQGDOLPLWRI))))))))+LHDOO*LJ$PRUHFRPSOHWHOLVWRIWKHFKDUDFWHULVWLFVRIDSURWHFWHGPRGHPHPRU\VHJPHQWLVDVIROORZV ... 520520&03%+%/&RPSDUHROGZLWKQHZYDOXH-*352&KDQJHGIURP5$0WR520VRSULQW520-/35$&KDQJHGIURP520WR5$0VRSULQW5$0 ,1& amp;6,,QFUHPHQWPDLQORRSFRXQWHU%27 -1= 723' 81 5(7$OOGRQH352029'/553ULQWVWDUWRI520 ,17 +029'/2 ,17 +-0305*35$029'/553ULQWVWDUWRI5$0 ,17 +029'/$$ ,17 +05*029'/00 ,17 +029'/VSDFH! ,17 +029&/3UHSDUHWRSULQWIRXUGLJLWV35/029';',6+5';&/ $1& apos;';0DVNHYHU\WKLQJH[FHSWKH[RQHVGLJLW&03'/'RHVWKLVSULQWDVDQXPHUDORUDVDOHWWHU"-/ 10 /$'''//HWWHUVQHHGDQH[WUDVHYHQ 10 /$'''/+ ,17 +3ULQWKH[GLJLW68%&/-*(35/029'/)LIWKGLJLWLV ,17 +029'/&DUULDJHUHWXUQ ,17 +029'/1HHGDQ(2/WRR ,17 +5(73URWHFWHG0RGH0HPRU\6HJPHQWV7KHPRVWLPSRUWDQWFKDUDFWHULVWLFVRIDSURWHFWHGPRGHPHPRU\VHJPHQWDUHLWVEDVHDGGUHVVDQGLWVOLPLW6HH)LJXUHIRUDQH[DPSOHRID0HJVHJPHQWVLWXDWHGDWWKHKDOIZD\SRLQWRID0HJPHPRU\6XSSRVHWKDWWKH'6UHJLVWHUFRQWDLQVDVHOHFWRUVHOHFWLQJDGHVFULSWRUIRUWKLVPHPRU\VHJPHQW7KHQWKHFRPPDQG)LJXUH$3URWHFWHG0RGH0HPRU\6HJPHQW029($;>'6+@ZRXOGDFFHVVWKHIRXUE\WHVORFDWHGDWWKHDGGUHVVHV+WKURXJK+2QWKHRWKHUKDQGWKHFRPPDQG029($;>'6+@ZRXOGFDXVHDJHQHUDOSURWHFWLRQIDXOWDKDUGZDUHH[FHSWLRQZKLFKJHQHUDWHVLQWHUUXSWQXPEHU6HHFKDSWHUVHFWLRQ7KLVLVEHFDXVHWKHDOOIRXURIIVHWDGGUHVVHVUHIHUHQFHGE\WKHFRPPDQGH[FHHGWKHOLPLW)RUH[DPSOH+!)))))+7KHFRPPDQGLVWU\LQJWRUHDGIURPDORFDWLRQ0HJIURPWKHEHJLQQLQJRIDVHJPHQWZKLFKLVRQO\0HJLQOHQJWK%HFDXVHWKHKDUGZDUHHQIRUFHVWKHVHVHJPHQWERXQGDULHVWKHVHJPHQWDWLRQV\VWHPFDQEHXVHGWRSURWHFWRQHWDVNVPHPRU\IURPDQRWKHUV,WZDVXVHGWRSURWHFWNHUQHOPHPRU\IURPXVHUSURFHVVHVLQYHUVLRQVRI/LQX[EHIRUHYHUVLRQEXWLVQRORQJHUXVHGIRUPHPRU\SURWHFWLRQLQ/LQX[6HJPHQWVLQ/LQX[QRZXVHDEDVHDGGUHVVRIDQGDOLPLWRI))))))))+LHDOO*LJ$PRUHFRPSOHWHOLVWRIWKHFKDUDFWHULVWLFVRIDSURWHFWHGPRGHPHPRU\VHJPHQWLVDVIROORZV...

... 7KHVHDUHWKHOLQHVIRUZKLFKWKHH[SUHVVLRQVS $1& apos; 12 7TDQG 12 7S $1& apos;TDUHWUXH+HQFHWKHH[SUHVVLRQKDVWKHVDPHWUXWKWDEOHDV;25DQGPD\EHXVHGWRFRQVWUXFWDFLUFXLWIRU;257KH%RROHDQH[SUHVVLRQS25T $1& apos; 12 7S $1& apos;TDOVRKDVWKHVDPHWUXWKWDEOH7KHUHIRUHWKHORJLFFLUFXLWZKLFKFRUUHVSRQGVWRWKLVH[SUHVVLRQDOVRZRUNVDVDQ;25FLUFXLW7KDWFLUFXLWORRNVOLNHWKLV)LJXUH)OLSIORS,I6 ... HWF6RWKHSHQWLPDOHTXLYDOHQWLV«)XUWKHU5HDGLQJ1XPEHU:RUGVDQG1XPEHU6\PEROV$&XOWXUDO+LVWRU\RI1XPEHUV.DUO0HQQLQJHU'RYHU%RRNV&KDSWHU/2*,&&,5&8,76 $1& apos;&20387$7, 21 (OHFWURQLFFRPSXWHUVDUHPDGHRIORJLFFLUFXLWV7KHDLPRIWKLVFKDSWHULVWRH[SODLQKRZWKHEDVLFFRPSXWHUIXQFWLRQVRIDULWKPHWLFDQGVWRUDJHFDQEHGRQHXVLQJWKHVHFLUFXLWV,WFXOPLQDWHVLQDEULHIGLVFXVVLRQRIWKH$''DQG029FRPPDQGV7KHPRVWEDVLFORJLFFLUFXLWVDUHFDOOHGJDWHV*DWHVDUHFRQWUROOHUFLUFXLWV7KHVLPSOHVWORJLFJDWHLVWKH 12 7JDWH,QWKHQH[WVHFWLRQLWLVVKRZQKRZD 12 7JDWHFDQFRQWURODIODVKOLJKW7KH 12 7*DWH7KHUHLVYDOXHLQEHLQJDEOHWRDGGDQGVXEWUDFWLQKH['HEXJJHUVJHQHUDOO\GLVSOD\UHJLVWHUVLQKH[DQGLWLVKDQG\WREHDEOHWRFKHFNWKHDULWKPHWLFEHLQJGLVSOD\HGZLWKRXWKDYLQJWRFRQYHUWEDFNWREDVHWHQ$GGLWLRQDQGVXEWUDFWLRQDUHHDV\WRGRLQKH[LIZHUHPHPEHUWKDWFDUU\LQJDQGERUURZLQJDUHGRQHZLWK$GGLWLRQLQ+H[7RDGGZHVWDUWZLWKWZHOYHSOXVHLJKWZKLFKLVWZHQW\ZKLFKLV+ZKLFKLVFDUU\SOXVHOHYHQSOXVVHYHQLVQLQHWHHQZKLFKLV+ZKLFKLVFDUU\$ ... :KHQWKH)UHH]H&RS\OLQHEHFRPHVERWK25JDWHVDUHIRUFHGWRDQGWKLVIUHH]HVWKHRXWSXW:KHQWKHRXWSXWLVIUR]HQVXEVHTXHQWFKDQJHVLQWKHLQSXWKDYHQRHIIHFWRQWKHFLUFXLW7KHRXWSXWYDOXHUHPDLQVMXVWZKDWLWZDVWKHODVWWLPHWKH)UHH]H&RS\OLQHWXUQHGIURPWRLHWKHODVWWLPHLWIUR]H7KDWRXWSXWYDOXHLVLQVWRUDJH5HJLVWHUV)RXUODWFKHVXVHGWRJHWKHULQSDUDOOHOFDQVWRUHIRXUELWV7KLVLVDQH[DPSOHRIDUHJLVWHU$IRXUELWUHJLVWHULVDFROOHFWLRQRIFLUFXLWVWKDWFDQVWRUHIRXUELWV'LIIHUHQWUHJLVWHUVLQDSURFHVVRUGRQRWKDYHWRVWRUHWKHVDPHQXPEHURIELWVEXWLWLVHDVLHUWRPDNHWKLQJVZRUNZKHQWKH\GR7KHQXPEHURIELWVLQDW\SLFDOUHJLVWHULVRQHRIWKHDWWULEXWHVRIDSURFHVVRUZKLFKGHWHUPLQHVZKHWKHULWLVFDOOHGDIRXUELWSURFHVVRUDQ$OH[LV+H\GW&RYHUGHVLJQGLUHFWRU-HUU\9RWWD&RYHUGHVLJQHU1LQD6FXGHUL7KLVERRNLVGHGLFDWHGWRDOOLPSULVRQHG3ORZVKDUHVDFWLYLVWVIRUDWWHPSWLQJWRGRZLWKLURQZKDWDOVRQHHGVWREHGRQHZLWKVLOLFRQ/LQX[$VVHPEO\/DQJXDJH3URJUDPPLQJ35()$&( ,17 52'8&7, 21 7KH)HWFK([HFXWH&\FOH7KH/LQX[2SHUDWLQJ6\VWHP7KH*QX&&RPSLOHU7KH(GOLQDV$VVHPEOHU 1$ 602WKHU$VVHPEOHUV3/$&(+2/' ,1* 18 0(5$7, 21 7KH'HFLPDODQG3HQWLPDO6\VWHPV3HQWLPDO$ULWKPHWLF&RQYHUVLRQWR3HQWLPDO7KH%LQDU\6\VWHP0HPRU\DVD5HFWDQJOHRI%LWV7KH+H[DGHFLPDO6\VWHP%DVH'LVWLQJXLVKLQJ1RWDWLRQV)UDFWLRQVLQ2WKHU%DVHV&RQYHUWLQJ)UDFWLRQV/2*,&&,5&8,76 $1& apos;&20387$7, 21 7KH 12 7*DWH%RROHDQ2SHUDWRUV/RJLF*DWHV$GGLWLRQ&LUFXLWV6HTXHQWLDO&LUFXLWV1HJDWLYH1XPEHU5HSUHVHQWDWLRQ6XEWUDFWLRQ8VLQJ1HJDWLRQ3ODFHKROGLQJ7ZRV&RPSOHPHQW0HPRU\&LUFXLWV[*HQHUDO5HJLVWHUVDQGWKHLU$QFHVWU\7KH029&RPPDQG$GGLWLRQDQG6XEWUDFWLRQ&RPPDQGV0XOWLSOLFDWLRQDQG'LYLVLRQ&RPPDQGV$66(0%/</ $1* 8$*(7KH)RXU)LHOG)RUPDW&RPSXWHUVIURPWKH&386WDQGSRLQW6LPSOH$VVHPEO\/DQJXDJH3URJUDPV$VVHPEOHU3URJUDPVZLWK-XPSV$VVHPEOHU3URJUDPVZLWK/RRSV6LJQHG&RPSDULVRQV8QVLJQHG&RPSDULVRQV/LQX[VILOHV0$&+ ,1( / $1* 8$*($VVHPEOLQJ6LPSOH3URJUDPV2SFRGH6SDFH7KH0RG50%\WH6SDFH2)«,IZHLPDJLQHWKLVDVWKHPHPRU\RIDWLQ\OLWWOHFRPSXWHUWKHQWKLVFRPSXWHUZRXOGKDYHDIRXUELWGDWDEXVDWZRELWDGGUHVVEXVDQGDRQHELWFRQWUROEXV7RIHWFKDQLWHPIURPPHPRU\WKHSURFHVVRUIRUWKLVOLWWOHFRPSXWHUZRXOGSXWLWV:5SLQDWORJLFDQGDWZRELWDGGUHVVRQWKHDGGUHVVEXV7KLVZRXOGDFWLYDWHWKH6HOVLJQDOIRUH[DFWO\RQHZRUGRIPHPRU\,IZHLPDJLQHDIHWFKH[HFXWHF\FOHLQSURJUHVVWKHSURFHVVRUZRXOGQHHGDWZRELWUHJLVWHUWRNHHSWUDFNRIWKHDGGUHVVRIWKHLQVWUXFWLRQLWZDVH[HFXWLQJ$OOSURFHVVRUVSHUIRUPLQJWKHIHWFKH[HFXWHF\FOHQHHGVXFKDUHJLVWHU,WLVRIWHQFDOOHGWKH3URJUDP&RXQWHU,Q,QWHOPDFKLQHVLWLVFDOOHGWKH,QVWUXFWLRQ3RLQWHU'HILQLWLRQRI0HPRU\&DSDFLW\$Q\SK\VLFDOPHPRU\LVDQREMHFWRUGHYLFHZKLFKLVVWDEOHLQPRUHWKDQRQHVWDWH,WVFDSDFLW\LVWKHQXPEHURILWVVWDEOHVWDWHV6LQFHDFRPSXWHUPHPRU\LVODLGRXWDVDUHFWDQJOHRIREMHFWVZLWKWZRVWDEOHVWDWHVHDFKWKHQXPEHURIVWDEOHVWDWHVLQWKHPHPRU\LVOîZZKHUHODQGZDUHWKHOHQJWKDQGZLGWKRIWKHUHFWDQJOHOLVDOVRFDOOHGWKHQXPEHURIZRUGVDQGZLVWKHZLGWKRIHDFKZRUGLQELWV)RUFRQYHQLHQFHWKHFDSDFLW\LVRIWHQJLYHQLQELWVDVMXVWOîZLHWKHEDVHWZRORJDULWKPRIWKHQXPEHURIVWDEOHVWDWHV7KHFDSDFLW\LQE\WHVRIFRXUVHLVRQHHLJKWKRIWKHFDSDFLW\LQELWV65$0YV'5$0:KHQPHPRU\FLUFXLWVDUHEXLOWRXWRIORJLFFLUFXLWVLWLVFDOOHGVWDWLFPHPRU\RU65$00HPRU\FLUFXLWVFDQDOVREHPDGHRXWRIFDSDFLWRUV$FKDUJHGFDSDFLWRUUHSUHVHQWVDVWRUHGDGLVFKDUJHGFDSDFLWRUUHSUHVHQWVDVWRUHG6LQFHIHZHUWUDQVLVWRUVDUHUHTXLUHGWKHVHFLUFXLWVFDQEHSDFNHGZLWKJUHDWHUGHQVLW\RQDFKLS6PDOOFORVHO\SDFNHGFDSDFLWRUVKDYHWKHGLVDGYDQWDJHWKDWWKH\GLVFKDUJHUDSLGO\7KH\UHTXLUHFRQVWDQWUHFKHFNLQJ(YHU\FDSDFLWRUZKLFKLVQRWFRPSOHWHO\GLVFKDUJHGPXVWEHSXPSHGEDFNXSDJDLQ%HFDXVHWKHPHPRU\LVEHLQJFRQVWDQWO\UHIUHVKHGLWLVFDOOHGG\QDPLFPHPRU\RU'5$0'\QDPLFPHPRU\LVOLNHDERRNVKHOIZLWKRXWWKHVKHOIH[FHSWWKDWLQWKHFDVHRIDERRNIDOOLQJIRXUIHHWVD\WRWKHIORRU\RXZRXOGKDYHVHFRQGVWRFDWFKLWEHIRUHLWKLWWKHIORRU7KHVHOLWWOHFDSDFLWRUVGLVFKDUJHLQVHFRQGV7KHPHPRU\UHIUHVKPXVWEHGRQHDSSUR[LPDWHO\HYHU\V8QOLNHPDQ\GHYHORSPHQWVZKLFKKDYHQXPHURXVFRQWULEXWRUVG\QDPLFPHPRU\ZDVLQYHQWHGE\DVLQJOHSHUVRQ7HG+RIIDURXQG'\QDPLFPHPRU\LVFKHDSHUDQGVORZHUWKDQVWDWLFPHPRU\6WDWLFPHPRU\LVXVXDOO\XVHGIRUFDFKHPHPRU\ZKLOHG\QDPLFPHPRU\LVXVHGIRU5$02QHGUDZEDFNRI'5$0LVWKDWLWPDNHVKDUGZDUHGHEXJJLQJPXFKPRUHGLIILFXOW7KHVLPSOHVWZD\WRGRKDUGZDUHGHEXJJLQJZRXOGEHWRVORZWKHFRPSXWHUVFORFNZD\GRZQ$EHUUDQWEHKDYLRUFRXOGWKHQEHREVHUYHGDVLWKDSSHQHG%XWEHFDXVHRI'5$0VUDSLGUHIUHVKUHTXLUHPHQWVWKHUHLVQRHDV\ZD\WRGRWKLV[*HQHUDO5HJLVWHUVDQGWKHLU$QFHVWU\2QHRIWKHUHDVRQVEHKLQGWKHPDUNHWVXFFHVVRIWKH,QWHO[OLQHRISURFHVVRUVKDVEHHQWKDWHDFKQHZSURFHVVRULQWKHOLQHZDVGHVLJQHGVXEMHFWWRWKHUHTXLUHPHQWWKDWLWEHFRPSDWLEOHZLWKSUHYLRXVSURFHVVRUV,QWHOQHYHUZLSHGWKHVODWHFOHDQDQGVWDUWHGIURPVFUDWFKDV0RWRURODDQG,%0GLGZLWKWKH3RZHU3&FKLSDQG'(&GLGZLWKWKH$OSKDSURFHVVRU7KLVPLQLPL]HGWKHDPRXQWRIKDUGZDUHDQGVRIWZDUHUHWRROLQJQHFHVVLWDWHGE\DQXSJUDGH&RQVHTXHQWO\DGHVFULSWLRQRIWKH[DQGLQSDUWLFXODULWVUHJLVWHUVOHQGVLWVHOIWRDKLVWRULFDODSSURDFK:HEHJLQZLWKWKHSURFHVVRU5HJLVWHUVHLJKWELWSURFHVVRURUZKDWHYHU7KHFRQWHQWVRIDIRXUELWUHJLVWHUDUHYHU\QDWXUDOO\VSHFLILHGXVLQJDIRXUGLJLWELQDU\QXPEHU7KHIRXUGLJLWELQDU\QXPEHUVDUHWKHLQWHJHUVIURPWKURXJK$QHLJKWELWUHJLVWHUKROGVDQLQWHJHUIURPWKURXJK:HVHHWKDWWKHPRVWQDWXUDOZD\RIVSHFLI\LQJWKHFRQWHQWVRIDUHJLVWHUOHDYHVQRURRPIRUQHJDWLYHQXPEHUV7KHUHSUHVHQWDWLRQRIQHJDWLYHQXPEHUVZLOOEHGLVFXVVHGLQWKHQH[WVHFWLRQ%LW6LJQLILFDQFH%HFDXVHELQDU\QXPEHUVDUHXVHGWRGHVFULEHWKHFRQWHQWVRIUHJLVWHUVDQGPHPRU\ORFDWLRQVWKHQXPHULFDOFRQFHSWRIDVLJQLILFDQWGLJLWLVXVHIXOLQVLQJOLQJRXWLQGLYLGXDOELWVRIDVSHFLILFVWRUDJHORFDWLRQ)RUH[DPSOHLIDIRXUELWUHJLVWHUKROGVWKHELQDU\QXPEHUWKHQWKHIRXUGLJLWVLQRUGHURIVLJQLILFDQFHDUHDQG6RWKHPRVWVLJQLILFDQWGLJLWLVDQGWKHOHDVWVLJQLILFDQWGLJLWLV7KHWKUHHPRVWVLJQLILFDQWGLJLWVDUH7KHWKUHHOHDVWVLJQLILFDQWGLJLWVDUH6RPHWLPHVLQWKLVWH[WWKHPRVWVLJQLILFDQWELWVZLOOEHUHIHUUHGWRDVWKHWRSRUXSSHUELWVDQGWKHOHDVWVLJQLILFDQWDVWKHERWWRPRUORZHUELWV1HJDWLYH1XPEHU5HSUHVHQWDWLRQ7KHFXVWRPDU\ZD\WRUHSUHVHQWDQHJDWLYHQXPEHULVWRSUHSHQGDPLQXVVLJQ3XWWLQJDLQIURQWRIDPDNHVD7KLVPHWKRGRIUHSUHVHQWLQJQHJDWLYHVLVFDOOHGVLJQHGPDJQLWXGHUHSUHVHQWDWLRQ,WFDQEHLPSOHPHQWHGRQWKHFRPSXWHUE\DOORFDWLQJRQHELWRIVWRUDJHIRUDVLJQELW7RFKDQJHWKHVLJQRIDQXPEHUWKDWLVVWRUHGXVLQJVLJQHGPDJQLWXGHUHSUHVHQWDWLRQRQHFDQVLPSO\IOLSWKHVLJQELW6LJQHGPDJQLWXGHUHSUHVHQWDWLRQLVQRWJHQHUDOO\XVHGIRULQWHJHUVRQWKHFRPSXWHU7KHUHDVRQLVWKDWLQRUGHUWRGRDGGLWLRQZLWKVLJQHGPDJQLWXGHUHSUHVHQWDWLRQ\RXQHHGWRGRLWWKHZD\LWLVWDXJKWWR\RXQJVWHUV6LJQHG0DJQLWXGH$GGLWLRQ7RDGG[DQG\&DVH,,I[DQG\DUHERWKSRVLWLYHMXVWDGGDQGPDNH\RXUDQVZHUSRVLWLYH&DVH,,,I[DQG\DUHERWKQHJDWLYHUHPRYHWKHQHJDWLYHVLJQVDGGWKHQXPEHUVDQGWDFNDPLQXVVLJQRQWRWKHUHVXOW&DVH,,,,I[DQG\KDYHGLIIHUHQWVLJQVVXEWUDFWWKHVPDOOHUPDJQLWXGHIURPWKHODUJHUPDJQLWXGHDQGLIWKHODUJHUPDJQLWXGHKDGDPLQXVVLJQWKHQWDFNWKLVRQWRWKHUHVXOW,PSOHPHQWLQJVLJQHGPDJQLWXGHDGGLWLRQZLWKORJLFFLUFXLWVRQDFKLSZRXOGEHDWHUULEOHZDVWHRIWUDQVLVWRUV(DV\$GGLWLRQ7KHPHWKRGZKLFKLVDFWXDOO\XVHGZLWKORJLFFLUFXLWVWRDGG[DQG\ZRUNVOLNHWKLV3D\QRDWWHQWLRQWRZKHWKHU[DQG\DUHSRVLWLYHRUQHJDWLYHMXVWDGGWKHP6XFKDPHWKRGZRXOGVHHPWREHQRPHWKRGDWDOO%XWLWZRUNV,WZRUNVEHFDXVHDVSHFLDOV\VWHPIRUUHSUHVHQWLQJQHJDWLYHVLVXVHGDQGEHFDXVHDUHJLVWHUKDVDILQLWHVL]HOLNHDQRGRPHWHU2GRPHWHU$ULWKPHWLF$QRGRPHWHULVDQDGGLQJPDFKLQH,WDGGVXSWKHPLOHVWKDW\RXGULYH0LOHDJHLVDOZD\VFRQVLGHUHGWRKDYHDSRVLWLYHYDOXH:RXOGDQHJDWLYHYDOXHLPSO\GULYLQJEDFNZDUGVRUZKDW"+RZHYHUFRQVLGHUWKHIROORZLQJHTXDWLRQZKLFKZHZRXOGRUGLQDULO\WKLQNRIDVPDNLQJVHQVHRQO\IRUQHJDWLYHQXPEHUVDQGDOOUHSUHVHQWHVVHQWLDOO\WKHVDPHEDVLFIDFW%XWWKLVLVRQO\DSUREOHPZKHQQRWDWLRQVWKHPVHOYHVDUHXVHGWRGRFDOFXODWLRQVDVZHGRZLWKSHQFLODQGSDSHU:KHQFDOFXODWLRQVDUHGRQHZLWKSK\VLFDOWRNHQVVXFKDVEHDGVRQDQDEDFXVRUZLWKSHEEOHVWKLVLVQRORQJHUDSUREOHP,QIDFWWKLVNLQGRIQRWDWLRQPD\KDYHVHUYHGWRSUHYHQWUHDGLQJHUURUV$Q\RQHZKRKDVUHFHLYHGZKHQFDVKLQJDFKHFNZLOOXQGHUVWDQGWKLVSRLQW%XWZKHQWKHQRWDWLRQVWKHPVHOYHVDUHXVHGWRGRWKHFDOFXODWLRQVLWLVEHWWHUWRKDYHDQRWDWLRQDOV\VWHPZKLFKEULQJVRXWVXFKEDVLFVLPLODULWLHVDVWKHIROORZLQJ3ODFHKROGLQJV\VWHPVGRWKLV3ODFHKROGLQJQXPHUDOVVRPHWLPHVOHVVV\PSDWKHWLFDOO\UHIHUUHGWRDVKHDWKHQF\SKHUVZHUHSRSXODUL]HGLQ(XURSHDURXQGWKH\HDUE\/HRQDUGRRI3LVDDOVRNQRZQDV)LERQDFFL)LERQDFFLZDVSUHVXPDEO\UHO\LQJRQDZRUNZULWWHQLQ$UDELFE\DO.KZkUL]PLZKRVHQDPHZHVHHLQWKHZRUGDOJRULWKPDURXQGWKH\HDULQ%DJKGDG/LNHDOO(XURSHDQVFKRODUVRIWKHGD\)LERQDFFLZDVQHFHVVDULO\YHUVHGLQ$UDELF$OOWKHQXPHUDWLRQV\VWHPVGLVFXVVHGLQWKLVERRNLQFOXGLQJWKHGHFLPDOV\VWHPZHXVHHYHU\GD\DUHSODFHKROGLQJV\VWHPV%HIRUHSURFHHGLQJWRQRQGHFLPDOV\VWHPVOHWXVFRQVLGHUWKHUROHWKDWEDVHWHQSOD\VLQWKH86PRQHWDU\V\VWHP3XUHO\'HFLPDO0RQH\7KHFXUUHQW86PRQHWDU\V\VWHPZDVDGRSWHGIROORZLQJWKHLQWURGXFWLRQRIWKHPHWULFV\VWHPLQ)UDQFHLQWKH5HYROXWLRQRI7KHSXUSRVHRIERWKRIWKHVHH[WHQVLRQVRIWKHGHFLPDOV\VWHPZDVWRVLPSOLI\FDOFXODWLRQVE\EULQJLQJPRQHWDU\DQGPHDVXUHPHQWXQLWVLQWRKDUPRQ\ZLWKWKHGHFLPDOV\VWHPXVHGWRUHSUHVHQWQXPEHUV7REULQJWKHDOLJQPHQWRIWKHPRQHWDU\DQGQXPHUDOV\VWHPVLQWRVKDUSUHOLHIOHWXVLPDJLQHDSDUHGGRZQYHUVLRQRIWKH86PRQHWDU\V\VWHPWKDWLQFOXGHVRQO\SHQQLHVGLPHVELOOVGROODUELOOVGROODUELOOVGROODUELOOVDQGVRRQGLPH...