,-(5'±,QWHUQDWLRQDO-RXUQDORI(QYLURQPHQWDODQG5XUDO'HYHORSPHQW  

5HVHDUFKDUWLFOHᶃᶐᶂ

3RWHQWLDOIRU'HYHORSLQJ7RXULVPLQ%DQWHD\&KKPDU
&DPERGLD
&+$1'$5$987++$1*
5R\DO8QLYHUVLW\RI$JULFXOWXUH3KQRP3HQK&DPERGLD(PDLOFKDQGDUDYXWKBKDQJ#\DKRRFRP

627+81621*
5R\DO8QLYHUVLW\RI$JULFXOWXUH3KQRP3HQK&DPERGLD5HFHLYHG'HFHPEHU

$FFHSWHG-DQXDU\$EVWUDFW7RXULVPLQ%DQWHD\&KKPDUKDYHEHHQJURZLQJJUDGXDOO\VLQFHHDUO\ZLWKWKH DVVLVWDQFH RI WKH %DQWHD\ &KKPDU &RPPXQLW\%DVHG 7RXULVP &%7  D VHUYLFHSURYLGHU WR WKH WRXULVWV ZKR YLVLW DQG VWD\ LQ WKH DQFLHQW KLVWRULFDO UHVRUW ,Q  WKHUH
ZHUHWRXULVWVYLVLWHGWKH%DQWHD\&KKPDUWRXULVWVLWH'XHWRWKHVORZLQFUHDVHWRXULVWVYLVLWLQJ %DQWHD\ &KKPDU D ILHOG VWXG\ ZDV GRQH LQ  WR LQYHVWLJDWH WKH FXUUHQWPDQDJHPHQW RI WRXULVP LQ %DQWHD\ &KKPDU 7KH REMHFWLYHV RI WKH ILHOG VWXG\ DUH WR
GHWHUPLQHWKHLPSDFWRIWRXULVPRQWKHORFDOOLYHOLKRRGDQGHQYLURQPHQWWRHYDOXDWHWKH
SRWHQWLDO RI WRXULVW DWWUDFWLRQ VLWHV DQG WR DQDO\]H WKH FRQVWUDLQWV DQG RSSRUWXQLWLHV IRULQFUHDVLQJ WRXULVP LQ %DQWHD\ &KKPDU ,Q RUGHU WR DFKLHYH WKH REMHFWLYHV  VHPLVWUXFWXUH LQWHUYLHZV  TXHVWLRQQDLUHV  HYDOXDWLRQ GDWD VKHHWV PDSSLQJ VRPHSDUWLFLSDWRU\ UXUDO DSSUDLVDO 35$  WRROV GLUHFW REVHUYDWLRQ DQG D VWUHQJWK ZHDNQHVVRSSRUWXQLW\WKUHDW 6:27 DQDO\VLVZHUHFRQGXFWHG7KHUHVXOWVVKRZHGWKDWWKH%DQWHD\&KKPDU&%7SOD\VLPSRUWDQWUROHVLQWRXULVPPDQDJHPHQW6LQFHWKHWRXULVPEHJDQWKH
VKDUH RI WRXULVP LQ HPSOR\PHQW FRQWULEXWHV   RI WKH WRWDO LQFRPH DQG LPSURYHGSHRSOH¶V OLYLQJ VWDQGDUG 0RUHRYHU DZDUHQHVV RI FXOWXUDO DQG HQYLURQPHQWDO YDOXH KDGDOVR LQFUHDVHG +RZHYHU WKH RYHUXVH RI ZDWHU IURP WKH PRDW YHJHWDEOH JDUGHQLQJ DQGZDVWHGLVSRVDOLQVLGHWKHWHPSOHDIIHFWVQHJDWLYH LPSDFWVLQWKHWRXULVWVLWH&XOWXUDODQG
KLVWRULFDOVLWHVDQGORFDOWUDGLWLRQDOZD\VRIOLIHDUHWKHPDLQWRXULVWDWWUDFWLRQV$VLGHIURPWKH PDLQ DWWUDFWLRQ ZKLFK LV WKH %DQWHD\ &KKPDU WHPSOH RWKHU &%7 VHUYLFHV ZHUH DOVRHQMR\HG E\ PDQ\ WRXULVWV VXFK DV H[SORULQJ WKH VDWHOOLWH WHPSOHV F\FOLQJ R[FDUW ULGLQJDQG YLVLWLQJ WKH YLOODJHV 2SSRUWXQLWLHV IRU WRXULVW GHYHORSPHQW ZHUH LGHQWLILHG VXFK DV
LQFUHDVLQJWRXULVPWKURXJKZLGHVSUHDGWRXULVPLQIRUPDWLRQQHZLQFRPHIURPYLVLWLQJWKH
WHPSOH DQG WKH WHPSOH¶V UHJLVWUDWLRQ DV D :RUOG +HULWDJH 6LWH ,Q FRQWUDVW PDVV WRXULVPYHUVXVRI&%7EHFRQFHUQHGDERXWVH[XDOWUDIILFNLQJLVVXHVDQGGUXJVPXJJOLQJFRXOGEH
FRQVWUDLQWVIRUIXWXUHWRXULVPGHYHORSPHQW,QFRQFOXVLRQWKHUHVHDUFKVXJJHVWHGWKDWDQ\IXWXUH WRXULVP GHYHORSPHQW PXVW EH EDODQFHG LQ DOO HFRQRPLF VRFLDO DQG HQYLURQPHQWDODVSHFWV.H\ZRUGV%DQWHD\&KKPDUFRPPXQLW\EDVHGWRXULVPWRXULVPGHYHORSPHQW6:2735$

,1752'8&7,21
7RXULVPLVFRQVLGHUHGDVWKHPDMRUVHFWRUWKDWFRQWULEXWHVWRWKHGHYHORSPHQWRIQDWLRQDOHFRQRP\
LQ&DPERGLD,WSURYLGHVDGGLWLRQDOLQFRPHDQGHPSOR\PHQWRSSRUWXQLWLHVWKDWLPSURYHWKHOLYLQJVWDQGDUGRIORFDOSHRSOHDQGFRQWULEXWHRQSRYHUW\DOOHYLDWLRQ 7HN &DPERGLDLVDPRQJWKHFRXQWULHVLQ6RXWKHDVW$VLDDQGDURXQGWKHZRUOGWKDWKDYHSOHQW\RIQDWXUDODQGKLVWRULFDOUHVRUWVZLWKDQFLHQWFXOWXUHDFURVVWKHFRXQWU\WKDWSOD\VDQLPSRUWDQWUROHLQWRXULVP7KH%DQWHD\&KKPDUWHPSOHZKLFKLVORFDWHGLQ%DQWHD\&KKPDU&RPPXQH7KPRU3RXN
'LVWULFW%DQWHD\0HDQFKH\3URYLQFHGHSLFWLQJWKH.KPHU.LQJGRPGXULQJWKH$QJNRULDQ3HULRG
LV RQH RI WKH JUHDWHVW DUFKLWHFWXUDO PDVWHUSLHFHV LQ 6RXWKHDVW $VLD 0RUHRYHU LW LV RQH RI WKH,6(5',-(5'±,QWHUQDWLRQDO-RXUQDORI(QYLURQPHQWDODQG5XUDO'HYHORSPHQW  

&DPERGLD¶V WRSOLVWHG KLVWRULFDO VLWHV EHLQJ QRPLQDWHG IRU 81(6&2¶V :RUOG +HULWDJH *+)
 
+RZHYHU WKH ODFN RI FRQVHUYDWLRQ DQG PDQDJHPHQW UHVXOWV %DQWHD\ &KKPDU¶V WHPSOHV DQGWRZHUV JUDGXDOO\ FROODSVH GLVLQWHJUDWHG DQG RYHUJURZQ ZLWK WUHHV ,Q DGGLWLRQ ORRWLQJ LV DOVRRFFXUULQJLQ%DQWHD\&KKPDU *+) ZKLFKWKHUHIRUHFRQVHUYDWLRQDQGSURSHUPDQDJHPHQW
DUHQHFHVVDULO\QHHGHG
7KHREMHFWLYHVRIWKLVVWXG\DUHWRLQYHVWLJDWHWKHFXUUHQWPDQDJHPHQWRIWRXULVPLQ%DQWHD\&KKPDU WR GHWHUPLQH WKH LPSDFW RI WRXULVP RQ WKH OLYHOLKRRG DQG HQYLURQPHQW WR HYDOXDWH WKHSRWHQWLDO RI WRXULVW DWWUDFWLRQV DQG WR DQDO\]H WKH FRQVWUDLQWV DQG RSSRUWXQLWLHV IRU LQFUHDVLQJ WKHWRXULVPLQ%DQWHD\&KKPDU0(7+2'2/2*<,Q WKLV VWXG\ VHYHUDO PHWKRGV ZHUH FDUULHG RXW WR DFKLHYH WKH DERYH REMHFWLYHV WKDW LQFOXGH
LQWHUYLHZV TXHVWLRQQDLUH VXUYH\V SDUWLFLSDWRU\ UXUDO DSSUDLVDO PDSSLQJ GLUHFW REVHUYDWLRQ DQGVWUHQJWKZHDNQHVVRSSRUWXQLW\WKUHDWDQDO\VLV7KHLQWHUYLHZVZHUHFRQGXFWHGZLWKKRXVHKROGVLQZKLFKKRXVHKROGVIURP&%7PHPEHUVZKLOHWKHRWKHUKRXVHKROGVZHUHQRQ&%7PHPEHUV0RUHRYHUNH\HOGHUO\SHRSOHLQWHUYLHZVDQGLQIRUPDOLQWHUYLHZVZHUHDOVRGRQHWRJHWEHWWHUXQGHUVWDQGLQJ RQ WKH WRXULVP LQ %DQWHD\ &KKPDU 7R HYDOXDWH RQ WKH WRXULVW DWWUDFWLRQ VLWHV 
WRXULVWVZHUHLQWHUYLHZHGXVLQJWKHTXHVWLRQQDLUHVDQGVDPSOHVRIWRXULVWHYDOXDWLRQGDWDVKHHWVIURP WKH &%7 ZHUH XVHG ,Q DGGLWLRQ 9HQQ GLDJUDP ZDV XWLOL]HG WR LQGLFDWH UHJDUGLQJ ZLWK WKHFXUUHQWPDQDJHPHQWRIWRXULVP3LHGLDJUDPZDVXWLOL]HGWRGLVWLQJXLVKWKHLPSDFWRIWRXULVPRQOLYHOLKRRG DQG HQYLURQPHQW 6HDVRQDO &DOHQGDU 'UHDP PDS DQG 6QDNH DQG /DGGHU RI WKH 35$
ZHUH WR HYDOXDWH WKH FRQVWUDLQWV DQG RSSRUWXQLWLHV GHYHORS WRXULVP LQ %DQWHD\ &KKPDU)XUWKHUPRUH *36 PDSSLQJ ZHUH DOVR GRQH WR SRLQW RXW WKH WRXULVW DWWUDFWLRQ VLWHV GXULQJ WKHREVHUYDWLRQLQWKHVWXGLHGDUHDDVIRU6:27DQDO\VLVZDVGRQHDIWHUFROOHFWLQJWKHGDWD
5(68/76$1'',6&866,21
5ROHVRIVWDNHKROGHUVRQWRXULVPPDQDJHPHQW
7KHUH DUH VRPH VWDNHKROGHUV WKDW DUH VWURQJO\ LQYROYLQJ LQ WRXULVP GHYHORSPHQW WRXULVPPDQDJHPHQWDQGLPSURYLQJWKHWRXULVPVHUYLFHVLQ%DQWHD\&KKPDUVXFKDV&&%(1*+)&%7

1RWH 
$'%$VLDQ'HYHORSPHQW%DQN

81(6&28QLWHG1DWLRQV(GXFDWLRQDO6FLHQWLILFDQG&XOWXUDO2UJDQL]DWLRQ&&%(1&DPERGLDQ&RPPXQLW\%DVHG(FRWRXULVP
1HWZRUN
&$7$&DPERGLD$VVRFLDWLRQ7UDYHO$JHQF\
(&26251(FRQRPLFDQG6RFLDOGHYHORSPHQWRI1RUWKZHVW&DPERGLD*+)*OREDO+HULWDJH)XQG&2$:)&DPERGLDQ2UJDQL]DWLRQIRU$VVLVWDQFHWR:LGRZVDQG)DPLOLHV
&2'$&&RRSHUDWH'HYHORSPHQW$JULFXOWXUH2UJDQL]DWLRQRI&DPERGLD'LUHFW,QYROYHPHQW,QGLUHFW,QYROYHPHQW)LJ'LDJUDPRIVWDNHKROGHUV¶UHODWLRQVKLSLQWRXULVPGHYHORSPHQWLQ%DQWHD\&KKPDU
,6(5',-(5'±,QWHUQDWLRQDO-RXUQDORI(QYLURQPHQWDODQG5XUDO'HYHORSPHQW  

,PSDFWRIWRXULVPRQOLYHOLKRRGDQGHQYLURQPHQW
7KHLPSDFWRIWRXULVPRQOLYHOLKRRGLVWKHFKDQJHRILQFRPHVRXUFHVRI&%7PHPEHUVLQGLFDWLQJDVKDUHRILQWKHWRWDOLQFRPHDIWHULQYROYLQJLQWRXULVP )LJ 7KHLQFRPHIURPWRXULVPKDV
SOD\HG LPSRUWDQW UROH RI &%7 PHPEHU¶V H[SHQVHV QRW RQO\ UHLQYHVWPHQW LQ WRXULVP EXW DOVRLQYHVWPHQWLQWKHH[LVWLQJDFWLYLWLHV )LJ 0RUHRYHU&%7LQFRPHIURPWRXULVPDOVRFRQWULEXWHV SHUFHQW LQ /RFDO 'HYHORSPHQW )XQG )LJ  7RXULVP LQ %DQWHD\ &KKPDU LV LQFUHDVLQJ WKHSHRSOH¶VDZDUHQHVVRQWKHHQYLURQPHQW1RZWKHHQYLURQPHQWLVQRW\HWSROOXWHGEHFDXVHLW¶VXQGHUFRQWURO RI &%7 KRZHYHU WKH PDLQ SUREOHP LV WKH RYHUXVH RI ZDWHU IURP WKH PRDW YHJHWDEOH
JDUGHQLQJ DQG ZDVWH PDQDJLQJ DURXQG WKH PDLQ WHPSOH 7R SUHYHQW DQ\ SUREOHPV WKH ]RQLQJV\VWHPKDVEHHQSURSRVHGWRPDQDJHIXWXUHGHYHORSPHQWHIIHFWLYHO\DQGHIILFLHQWO\











D
E
)LJ&KDQJHVRQGDLO\DFWLYLWLHVRI&%7PHPEHUVD EHIRUHDQGE DIWHULQYROYLQJ
LQWRXULVPLQGXVWU\













)LJ7KHGLYHUVLILHGH[SHQGLWXUHRQWKHLQFRPHIURPWRXULVP









)LJ7KHEHQHILWVKDULQJIURPWRXULVPLQFRPHLQ%DQWHD\&KKPDU&%7
7RXULVWDWWUDFWLRQVFKHPH
7RXULVW DWWUDFWLRQ VFKHPH ZDV DQDO\]HG WKURXJK WKH GDWD VKHHW IURP &%7 *HQHUDO WRXULVWDWWUDFWLRQV ZHUH UDQNHG IURP  ORZHVW VDWLVI\  WR  KLJKHVW VDWLVI\  $PRQJ WKRVH DWWUDFWLRQV DV
VKRZQLQ)LJF\FOLQJYLVLWLQJWKHWHPSOHVDQGR[FDUGULGLQJDUHWKHPRVWDWWUDFWLYHDFWLYLWLHVIRUWRXULVWV,6(5',-(5'±,QWHUQDWLRQDO-RXUQDORI(QYLURQPHQWDODQG5XUDO'HYHORSPHQW  












5DQN
/RZHVWVDWLVI\/RZHUVDWLVI\0RGHUDWHVDWLVI\+LJKHUVDWLVI\+LJKHVWVDWLVI\

)LJ5DQNUDWLQJRQGLIIHUHQWWRXULVWDWWUDFWLRQVLQ%DQWHD\&KKPDU
7RXULVWDWWUDFWLRQPDSSLQJ
7KH WRXULVW DWWUDFWLRQ PDSSLQJ KHOSV WR LGHQWLI\ WKH VSHFLILF DUHDV IRU WKH WRXULVWV WR HQMR\ LQ WKH
WRXURIIHUHGE\WKH%DQWHD\&KKPDU&%7:LWKWKLVPDSWRXULVWVZLOOEHDEOHWRGLVFRYHUWKHSODFHZKHUHWKH\SUHIHUWRYLVLWILUVWO\RUZKHUHWKHORFDOJXLGHFRXOGDFFRPSDQ\ZLWKWKHP7KHWRXULVWDWWUDFWLRQ PDSSLQJ FRQVLVWV RI WKH FXOWXUDO DWWUDFWLRQV WKH PDLQ WHPSOH DQG VDWHOOLWH WHPSOHV KLVWRULFDODWWUDFWLRQV &KRHXQJ.UXRV:DWHU5HVHUYRLU DQGWUDGLWLRQDODWWUDFWLRQ EHHNHHSLQJDQG
VLONKDQGLFUDIW 7KHPDLQWHPSOHLV%DQWHD\&KKPDUZKLFKZDVEXLOWRQWKHDUHDRIDSSUR[LPDWHO\KDLQRYHU\HDUVDJR+DYLQJWKH%D\RQSURWRW\SHDQGVXUURXQGHGE\IRUHVWWKHVHDUHWKH
PDLQ DWWUDFWLRQ IRU WKH WRXULVWV 0RUHRYHU RWKHU  VDWHOOLWH WHPSOHV VXFK DV &KHQK &KRHP 7UH\<HD\ .RUP :HVW 6DPQDQJ 7D 6RN (DVW 6DPQDQJ 7D 6RN 7D 3UXP %DODQJ 0H %XQ <HD\&KRXUDQG7D(PDUHDOVRUHJDUGHGDVWKHWRXULVWDWWUDFWLRQLQDUHD0RVWRIWKHVDWHOOLWHWHPSOHV
DUHFRYHUHGE\IRUHVWDQGWKHPRVWDWWUDFWLYHWHPSOHVDUH7D3UXPDQG0H%XQWHPSOHV




















)LJ7RXULVWDWWUDFWLRQWHPSOHDQGODQGVFDSHLQ%DQWHD\&KKPDU&DPERGLD&KRHXQJ.UXRV:DWHU5HVHUYRLUOLHVLQODUJHRSHQJUHHQDUHDV,WZDVEXLOWGXULQJWKH3RO3RW
.KPHU5RXJH UHJLPHLQWKHSXUSRVHRIDJULFXOWXUDOXVH7KHUHLVDJUHDWYLHZRIJUDVVODQGDQGWKH
'DQJUHN5DQJH0RXQWDLQWKDWFDQEHVHHQLQWKHVRXWKZHVWWRQRUWKZHVWRIWKHDUHDV,6(5',-(5'±,QWHUQDWLRQDO-RXUQDORI(QYLURQPHQWDODQG5XUDO'HYHORSPHQW  

7KH&RQVWUDLQWVDQGRSSRUWXQLWLHV$IWHU DOO GDWD DQG LQIRUPDWLRQ LQ WKH ILHOG ZHUH FROOHFWHG DQG DQDO\]HG SURSHUO\ WKH 6:27
DQDO\VLV ZDV GRQH WR GLVFRYHU VRPH VXLWDEOH VWUDWHJLHV WR GHDOW ZLWK WKH FRQVWUDLQWV DQGRSSRUWXQLWLHVIRUGHYHORSLQJWRXULVPLQ%DQWHD\&KKPDUDVVKRZHGLQ7DEOH
7DEOH6:27DQDO\VLVIRUGHYHORSLQJWRXULVPLQ%DQWHD\&KKPDU
6WUHQJWK 6 

6:27$QDO\VLVIRU
GHYHORSLQJWRXULVPLQ
%DQWHD\&KKPDU

2SSRUWXQLW\ 2 
%DQWHD\&KKPDUWHPSOHZLOO
EHLQFOXGHGLQZRUOGKHULWDJH
7RXULVWZLOOEHLQFUHDVHG
,QFUHDVLQJRIHQYLURQPHQW
DQGFXOWXUDODZDUHQHVV1HZWRXULVWDWWUDFWLRQV,QFUHDVLQJLQ&%7PHPEHUV
DQGMRERSSRUWXQLWLHV,QFUHDVLQJWKHDGYHUWLVHPHQWRIWRXULVPLQ%DQWHD\&KKPDU1HZLQFRPHIURPYLVLWLQJWKH
WHPSOH
7KUHDW 7 
/LPLWHGIXQGVIRU&%7UXQQLQJ
SURFHVV
3ROOXWLRQRQVRFLDOFXOWXUHHQYLURQPHQWWKURXJKPLJUDQWV=RQLQJFDQDIIHFWWRSHRSOHOLYHOLKRRG3RVVLEOHFRQIOLFWEHWZHHQ&%7
PHPEHUDQG
1RQ&%7PHPEHU
7HPSOHHURVLRQ0DVVWRXULVPZLOODIIHFWRQ&%7
/RVLQJDJULFXOWXUDOODERU
6H[XDODQGGUXJVPXJJOLQJ
7LPHDQGPRQH\FRQVXPLQJLQUHSDLULQJWKHWHPSOHV

,6(5'&%7SURYLGHVVHUYLFHVWRWRXULVWV+DYLQJVXSSRUWIURP*+)
&&%(1(&26251
0RUHWRXULVWDWWUDFWLRQV
7RXULVPVLWHLVFORVHWRWKH
&DPERGLDQ7KDLERUGHU+DYLQJPDVWHUSODQIRU%DQWHD\&KKPDUFRPPXQH
=RQHGLYLVLRQ&RPPXQHGHYHORSPHQWIXQGIURP&%7
+DYLQJVRPHZDWHUUHVRXUFHV:HDNQHVV : &%7KDVQ¶WEHHQUHFRJQL]HGE\WKHJRYHUQPHQW,QIUDVWUXFWXUHGHYHORSPHQW
KDVQ¶WGRQHZLGHO\\HW
7RXULVPVHUYLFHVDUHQRW\HW
GLYHUVLILHGDQGDGHTXDWH/DFNRIFRQWUROOLQJRQWRXULVWZKRHQWHUWKHWHPSOH
/LPLWHGDGYHUWLVHPHQWRIWRXULVPLQ%DQWHD\&KKPDU/RZLQFRPHIURPWRXULVPLQ
UDLQ\VHDVRQ+LJKUHTXLUHPHQWRIEHLQJ
PHPEHURI&%7
,QDGHTXDWHIUHVKZDWHUDQG
HOHFWULFLW\VXSSO\6WUDWHJLHVIRU: 2
6XJJHVWWKHJRYHUQPHQWWRUHFRJQL]HWKH&%7RIILFLDOO\,QFUHDVLQJO\DGYHUWLVHQHZ
WRXULVWDWWUDFWLRQVLQWKHDUHD
/HVVHQWKHUHTXLUHPHQWRI
EHLQJPHPEHURI&%7
(QFRXUDJHWRKDYHPRUH
LQYHVWPHQWRQIUHVKZDWHUDQG
HOHFWULFLW\VHUYLFHV6WUDWHJLHVIRU6 2
(IIHFWLYHO\LPSOHPHQW]RQLQJV\VWHPWRHQVXUHWKHHQYLURQPHQW
SUHVHUYDWLRQ7UDLQLQJPRUHRQWKHH[LVWLQJ
&%7PHPEHUVLQWRXULVWJXLGH'LYHUVLI\IRRGDQGKRPHVWD\VHUYLFHV%HWWHULQIUDVWUXFWXUHGHYHORSPHQWWRPHHWWKH
LQFUHDVLQJRIWRXULVWVDQG
LPSURYLQJWRXULVWDWWUDFWLRQV0RUHFRQWURORQWKHWRXULVWVLQFUHDVHLQFRPH
6WUDWHJLHVIRU6 7
6WUDWHJLHVIRU: 7)DFLOLWDWHWKHWRXULVP7UDQVSDUHQWO\DVVLPLODWHWKH
GHYHORSPHQWZLWK&%7
]RQLQJGLYLVLRQWR
&%7VKRXOGSUHSDUHLWVRZQORFDOSHRSOHVWUDWHJ\LQGHYHORSLQJWRXULVP8UJHQWO\UHFRJQL]HWKH
DJUHHLQJZLWKWKHOHJDOLW\RI&%7
FRPPXQHGHYHORSPHQWSODQ,QFUHDVHPRUHMRERSSRUWXQLW\/RFDODXWKRULW\KDYHWRFRQWURO
DQGDYDLODELOLW\FDUHIXOO\WKH
,QFUHDVHVHDVRQDOFURSSLQJWRXULVWVDQGSULYDWHVHUYLFHVLQ
WKHDUHD)LQGDQGHQDEOHIXQGVIRU
GHYHORSLQJWKHDUHD
7UDQVSDUHQF\LQLQFRPHGLVWULEXWLRQWRFRPPXQHGHYHORSPHQW,-(5'±,QWHUQDWLRQDO-RXUQDORI(QYLURQPHQWDODQG5XUDO'HYHORSPHQW  

&21&/86,21
7RXULVP PDQDJHPHQW LQ %DQWHD\ &KKPDU LV LQFUHDVLQJO\ LPSURYHG IURP \HDU WR \HDU WKURXJKLQFUHDVLQJLQWKHWRXULVWVQXPEHUV%DQWHD\&KKPDU&%7LVWKHPDLQLQVWLWXWLRQZKLFKUHVSRQVLEOH
IRUPDQDJLQJDQGSURYLGLQJWKHVHUYLFHVWRWKHWRXULVWV+RZHYHULWVWLOOQHHGVPRUHVXSSRUWVIRULWVXVWDLQDEOHUXQQLQJSURFHVV
7KHPDLQVWDNHKROGHUWKDWFDQLPSURYHVXVWDLQDEOHWRXULVPLV5R\DO*RYHUQPHQWRI&DPERGLD%HVLGHV VRPH UHOHYDQW LQVWLWXWLRQV DQG 1*2V VXFK DV *+) &&%(1 &$7$ DQG RWKHU WRXULVPDJHQFLHVDUHDOVRRQHFDWDO\VWLQFRRSHUDWLQJDQGDGYHUWLVLQJWKHWRXULVPLQ%DQWHD\&KKPDU
7KH TXDOLW\ RI &%7 VHUYLFHV LV UHFRJQL]HG DQG JLYHQ WKH KLJK YDOXH E\ WKH WRXULVWV ZKRZHOFRPHGE\&%7KRZHYHU&%7DOVRJRWVRPHFRPPHQWVIURPWRXULVWWRLPSURYHWKHVHUYLFHV
7RXULVPLQ%DQWHD\&KKPDUKDVUHDOO\EHQHILWHGWRORFDOOLYHOLKRRGDQGHQYLURQPHQWVLQFHLW¶V
FRQWULEXWHG WR JHQHUDWH LQFRPH  ,QFRPH IURP WRXULVP KDV FRQWULEXWHG  SHUFHQW RI WKH WRWDOLQFRPHDQGE\WKHLQFRPHSHRSOHKDYHHQKDQFHGWKHLUOLYLQJVWDQGDUGWKURXJKPRGHUQL]DWLRQRI
WKH VHUYLFHV DQG GDLO\ H[SHQVH 0RUHRYHU HQYLURQPHQW FRQVLGHUDWLRQ LV JUDGXDOO\ SRSXODULQFUHDVLQJ WKH DZDUHQHVV RI WKH HQYLURQPHQWDO PDLQWDQFH KRZHYHU ZDWHU XVLQJ DQG ZDVWHPDQDJLQJDUHWKHPDLQSUREOHPLQWKHSUHVHQW
7KHUH DUH PDQ\ RSSRUWXQLWLHV IRU GHYHORSLQJ WRXULVP LQ %DQWHD\ &KKPDU EDVH RQ LWV WRXULVWDWWUDFWLRQV DQG ZHOOPDQDJHG E\ &%7 KDYLQJ EHWWHU FRRUGLQDWLRQ ZLWK PDQ\ VWDNHKROGHUV 0RUH
DGYHUWLVHPHQWRIWKHWRXULVWVLWHXSGDWLQJVRPHVHUYLFHVLQFUHDVHWKH&%7PHPEHUVDQGDZDUHQHVVRIHQYLURQPHQWVWUHQJWKHQWKHH[LVWLQJWUDGLWLRQDQGGHYHORSPHQWRIWKHWRXULVWDWWUDFWLRQVLWHVDUH
DOVR WKH RSSRUWXQLWLHV 2QO\ SHUPDQHQW WUDGLWLRQDO DFWLYLWLHV WKDW FDQ EH WKH DWWUDFWLRQV WR WKHWRXULVWVDQGWKHVHFDQDOVRSUHVHUYHWKHWUDGLWLRQDQGZD\RIOLIHRIWKHSHRSOHLQ%DQWHD\&KKPDU+RZHYHUWKHFRQVWUDLQWIRUGHYHORSLQJWRXULVPLQ%DQWHD\&KKPDULVWKHPDVVWRXULVPZKLFKFRXOG KDYH QHJDWLYH LPSDFW RQ HQYLURQPHQWDO VRFLDO DQG HFRQRPLFDO DVSHFWV 0RUHRYHU VRPHWKUHDWVKDYHWREHFRQVLGHUHGVXFKDVLVRODWHGPDQDJHPHQWRIWRXULVPRIWKHVWDNHKROGHUVGHVWUR\
WKH HQYLURQPHQW ZKHQ GHYHORSLQJ FRPH SROOXWLRQ WR VRFLDO DQG FXOWXUH DQG VH[XDO DQG GUXJVPXJJOLQJ
,QEULHIWKHPDLQSUREOHPWKDWFDQDIIHFWWRVXVWDLQDEOHGHYHORSPHQWRI%DQWHD\&KKPDU&%7
LV PDVV WRXULVP ZKLFK ZLOO QHJDWLYHO\ LPSDFW RQ WKH ZDWHU UHVRXUFHV ZDVWH FRQWURO DQG &%7¶V
EHQHILWVKDULQJWRWKHPHPEHUV7KHUHIRUHDYRLGLQJWKLVSRVVLEOHSUREOHPDOOGHYHORSPHQWDVSHFWV
KDYHWRWKLQNRIHQYLURQPHQWDOVRFLDODQGHFRQRPLFDOVXVWDLQDELOLW\$&.12:/('*(0(176)XQGLQJ IURP )UHQFK $VVLVWDQW 3URMHFW RI )UDQFH (PEDVV\ LV KLJKO\ DFNQRZOHGJHG 7KH DXWKRUV DUHJUDWHIXOWR'U&KDQ1DUHWK'U6HQJ0RPDQGDOOOHFWXUHUVRI*UDGXDWHVFKRROIRUWKHLUFRQWULEXWLRQ
6SHFLDOWKDQNVWR%DQWHD\&KKPDU&%7DQGDOOSHRSOHZKRDUHZHOOFRRSHUDWHGZLWKRXUUHVHDUFKWHDP

5()(5(1&(6
7HN 6   3RWHQWLDO RI GHYHORSLQJ HFRWRXULVP RQ 0HNRQJ 5LYHU 1RUWKHUQ 3DUW RI &DPERGLD LQ 7DOD
%RULYDWKGLVWULFW6WHXQJ7UHQJSURYLQFH06F7KHVLV5R\DO8QLYHUVLW\RI$JULFXOWXUH&DPERGLD.XPDU 6   0HWKRGV IRU FRPPXQLW\ SDUWLFLSDWLRQ $ FRPSOHWH JXLGH IRU SUDFWLWLRQHUV ,QWHUPHGLDWH
7HFKQRORJ\3XEOLFDWLRQ/WG*+)  *OREDO+HULWDJH)XQGKWWSJOREDOKHULWDJHIXQGRUJZKHUHEDQWHD\KWPO,6(5'