Furukawa Electric Group Sustainability Report 2014: Web version

Management
CSR Management
Group Philosophy
Since our founding in 1884, we have been working to create the technologies and products that society requires
over the past 130 years. We consider it our mission to contribute to the realization of a sustainable society. We
will continue to keep our eyes on the future as we work to live up to the expectations and trust invested in us bysociety.

Furukawa Electric Group Philosophy (Revised August, 2007)
http://www.furukawa.co.jp/english/kaisya/philosophy.htm

Basic Policy and CSR Code of Conduct
Each of the companies in Furukawa Electric Group develops CSR activities in line with the following Group basic
policy.

Furukawa Electric Group Basic Policy on CSR (Revised March, 2011)
Based on the Furukawa Electric Group Corporate Philosophy,
We will operate our businesses in harmony with society and the environment and endeavor to create social
value through technological innovation, complying with laws, social norms, and ethics as a member of theinternational community.
We will strive to maintain and build sound and friendly relationships with all of our stakeholders and contributeto the sustainable development of society.
The CSR Code of Conduct defines fundamental rules of behavior for Furukawa Electric executives andemployees to follow in conducting corporate activities based on the Group philosophy and from the perspectiveof corporate social responsibility.

26

Furukawa Electric Group Sustainability Report 2014: Web version

The Furukawa Electric Group CSR Code of Conduct (Revised March, 2011)
1. Human rights
2. Working conditions and environment
3. Environment
4. Products and services
5. International businesses and transactions
6. Fair competition
7. Relations with customers, partners, and society
8. Management and preservation of Company assets
9. Disclosure of information
10. Duties and obligations of senior management and employees

Basic Approach
In order to contribute to the realization of a truly rich and sustainable society, we need to understand the social
responsibilities of Furukawa Electric Group and implement policies in line with the Basic CSR Policy. We will
promote CSR initiatives alongside our business activities so that each and every Group employee is able to takethe lead in putting CSR initiatives into practice.

CSR Promotion Framework
Furukawa Electric Group has established the CSR and Risk Management Committee, which comprises
members of management, as the structure for supervising and promoting CSR activities throughout the Group,
including risk management, internal control, compliance and social contribution. We have set up the CSR
Department within our Administration & CSR Division. This department promotes CSR by facilitating
communication among various committees and corporate departments.

27

Furukawa Electric Group Sustainability Report 2014: Web version

CSR Promotion Framework

Stakeholder Relations
Furukawa Electric Group properly monitors our business practices and endeavors to establish structures for
improving them even more, so as to steadily meet our responsibilities to our various stakeholders, who view us
from differing perspectives.

Main Stakeholders and Main Responsibilities

28

Furukawa Electric Group Sustainability Report 2014: Web version

Main
Stakeholders

Main Responsibilities

Means of Communication

Reduce emission of gases that contributeto global warming
Promote energy conservation andrecycling
Protect biodiversity
Curtail industrial waste
Manage and reduce harmful chemical
substances

Compliance with laws and regulations
Compliance with the Kyoto Protocol and the Nagoya Protocol
on biodiversity
Response to environmental activities of the Ministry of theEnvironment and other government organs
Research and information exchange on biodiversity
preservation through JBIB(note 1)

Customers

Maintain and improve the quality of
products, operations and services
Offer products and services that are
useful to society
Provide solutions to issues confronting
customers through a broad array oftechnologies and know-how

Dialogue through regular business
Website, Sustainability Reports
Dialogue at technology exhibitions, trade shows

Suppliers

Establish a sound relationship founded onfair trading in compliance with laws andregulations
Realize CSR throughout the supply chain
by implementing CSR Deployment
Guideline for Business Partners

Partner Meetings
Dialogue through regular business
CSR surveys
Feedback interviews on results of partner evaluations

Provide appropriate returns
Ensure timely and appropriate disclosure
Enhance corporate value

Sustainability Reports
General meetings of shareholders, shareholder reports
Management briefings and results presentations
Investor visits
Shareholder plant tours

Respect human rights
Cultivate and appropriately value andreward human resources
Promote health, including occupational
health and safety, as well as mental
healthSupport diverse workstyles and work/lifebalance

Internal newsletter, intranet
Management briefings

Nurture future generation
Promote sporting and cultural activities
Live in harmony with the naturalenvironment and local
communities

Factory tours
Cooperate with and sponsor sports and traditional events
Support the activities of and collaborate with local NPOs
Preserve the Satoyama Environment

Environment

Shareholders

Employees

Local
communities(note 1) JBIB : Japan Business Initiative for Biodiversity. Founded in 2008, the JBIB is a joint effort by Japanese companies toact on behalf of biodiversity preservation.

29

Furukawa Electric Group Sustainability Report 2014: Web version

Message from the General Managers

Nowadays, companies are required to respond to a rapidly changing world
with a variety of stakeholders in mind. As Furukawa Electric Group sets
about this task, CSR activities are an essential part of our survival as abusiness. Furukawa Electric Group has set out a basic policy and code of
conduct for CSR in accordance with a group philosophy that seeks to meetthe expectations of our founder, in addition to developing a variety of related
systems and mechanisms. The management report contains information ona variety of initiatives, with a focus on the platform of CSR activities,
including corporate governance, risk management and compliance.
In the medium-term, we aim to examine ways of narrowing down priority fields in CSR for Furukawa ElectricGroup and promoting policies that strengthen communication with our stakeholders.

Takashi Fukuda
General Manager, CSR Department, Administration & CSR DivisionCorporate Governance
Basic Philosophy
Based on the Furukawa Electric Group Corporate Philosophy, the Furukawa Electric Group strives to enhance its
performance by promptly responding to changes in the business environment and the market through efficientmanagement based on prompt decision making. At the same time, we ensure sound management by developing
and establishing an internal control system and applying it effectively. We uphold the basic policy of seeking to
expand and develop our operations on a sustainable basis and to raise corporate value through these efforts.
We operate our businesses in harmony with society and the environment in accordance with appropriate
corporate information disclosure, compliance, and risk management, so we strive to maintain and build soundand friendly relationships with all of our stakeholders, including shareholders, business partners, local
communities and employees, and contribute to the sustainable development of society.

30

Furukawa Electric Group Sustainability Report 2014: Web version

Corporate governance organization chart

31

Furukawa Electric Group Sustainability Report 2014: Web version

Risk Management
Overview of the Risk Management Structure
Our CSR and Risk Management Committee conducts regular risk assessments to determine what risks exist,
define important risks that require a companywide response and prioritize measures to counter these risks.
Through specialized committee activities in segment-specific areas—environment, quality, safety, disasterprevention—we are working to manage the risks that relate to our business activities.
Important Companywide Risks
 Compliance Quality control
 Large-scale disasters, such as earthquakes
 Information security
 Affiliated company controls
In the event a large-scale disaster occurs or other such risk materializes, the Group will establish Emergency
Response Headquarters, headed by the president, and Site Response Headquarters that defines eachdepartment's roles and clarifies them ahead of time. We also conduct regular exercises on preparating initialaction manuals, stockpiling necessary supplies, and setting up communication structures and systems to confirm
people's safety.

Business Continuity Management (BCM)
Execution of BCM exercise and its results
In fiscal 2014, we conducted a BCM exercise at our headquarters and business units in Chiba and Hiratsuka
Works. At the headquarters, we extended the scope of the exercise participants, offered a tour that includes aconfirmation of stockpile places and an explanation on various tools in addition to the regular exercise menu, andhad a discussion on the exercise topics prepared by the administrative office. After the exercise, we revised
various manuals based on the exercise results and posted “general instructions for foreign visitors at the time oflarge-scale earthquake” in various different languages at the reception and meeting rooms of the headquarters.

32

Furukawa Electric Group Sustainability Report 2014: Web version

Stockpile confirmation tour

Exercise at the Disaster Countermeasure Office

Poster on general instructions at the timeof large-scale earthquake (in Japanese,
English and Chinese)

TopicsRecovery and Lessons Learned from the Nikko Snow Damage
Nikko Works suffered serious damage as a result of record snowfall in the Kanto Region in February this year
(2014), including the collapse of roofing on some factory buildings such as wrought copper products buildings,
and we were forced to suspend operations. We have since made good progress with restoration work and are
gradually recovering normal operations. However, major works are scheduled to continue until the end of theyear, including the reconstruction of buildings, as we work towards a full recovery. (note 1)
Our conventional BCP (business continuity plan) was drafted on the assumption of a major earthquake or similardisaster, and it was not sufficient for handling the recent snow damage. We are extremely regretful about thedisruption we have caused in the supply chain, both to our direct customers and to the customers of ourcustomers. In future, we will improve our awareness of the supply chain and make full use of our recent
experiences in order to promote activities that allow us to minimize any impact on our customers. This
experience has reconfirmed for us the importance of Furukawa Electric products for our customers. We will takethe positives from our experiences by gaining an understanding of specific areas where we can improve andusing this as an opportunity to build an enhanced business continuity management. Moreover, we plan to
combine this new knowledge with the knowledge we have accumulated in our optical semiconductor devices
business, for which we gained ISO22301 certification in February last year, and to promote business continuity
management in other business fields.

33

Furukawa Electric Group Sustainability Report 2014: Web version

Collapsed roofing immediately after thesnow damage

Work continues at the factory with the aim ofachieving a full recovery(note 1) The description of recovery status is based on information as of the end of July 2014.

Information Security
Information security is considered one of the highest-priority risks the Group has to handle. Therefore we
promote various countermeasures through intergroup collaboration by exchanging information among the related
divisions, from the perspectives of protecting information systems and intellectual property as well as information
management. We continue our efforts to prevent information leaks by focusing on the management of hardware(mainly mobile devices) taken outside the office and to manage IT assets through such measures as software
license management. We provide Furukawa Electric Group with educational materials and information on therevisions of information security-related laws such as the Act on the Prohibition of Unauthorized Computer
Access, the Unfair Competition Prevention Act (namely trade secrets) and the Act on the Protection of Personal
Information. In our aim for ongoing improvement, we solicit feedback from divisions promoting these activities.

Protection of Intellectual Property
Furukawa Electric Company undertakes strategic and efficient intellectual property activities by connecting its
business and development strategy.
1.

We generate intellectual property rights strategically based on a patent portfolio management that takes
into account other companies' moves.

2.

We promote risk hedging initiatives by such means as preventing the leakage of technology andsecuring prior use rights.

3.

We promote the diffusion of knowledge on intellectual property and develop group-wide intellectual
property initiatives on a global scale. For example, we offer education related to the creation of intellectual
property and information related to the risks of intellectual property at overseas.

34

Furukawa Electric Group Sustainability Report 2014: Web version

Challenges and Future Policy
Following our international business development, risks that Furukawa Electric Group faces are becoming morediversified and complicated each year. We particularly recognize that risks inherent in overseas operations
mainly in emerging countries and risks from the supply chain standpoint are our top priority issues, and we will bestrengthening our countermeasures against them. As a part of the said efforts, the “Group Global Management
Division” established in October 2013 will be assisting group companies and offering information to contribute to
the improvement of the Group’s global risk management.

35

Furukawa Electric Group Sustainability Report 2014: Web version

Compliance
Basic Approach
Furukawa Electric Group regards compliance as “not only observing laws and regulations, but also as acting inaccordance with the values and ethics required of the company and its employees as responsible members ofsociety”. Accordingly, we promote compliance activities such as internal training based on the Group's CSR
Code of Conduct and monitoring of legal violations. Moreover, each and every employee is encouraged toperform day-to-day compliance activities in line with our three musts for compliance activities: to “be aware”,“speak” and “rectify”.

Three Musts for Compliance Activities

1) Be awareIs this in line with the philosophy and CSR Code of Conduct?
Is this an improper practice?
Does this run counter to society's requirements and expectations?

2) Speak

Do not neglect it.
Talk about it openly.
If still not sure, take it to your boss.

3) Rectify

As soon as you become aware of it, fix it.
Always improve.

Thorough Implementation of ComplianceIn December 2013 and January 2014, the Company received a cease and desist order and a surcharge payment
order from the Japan Fair Trade Commission in connection with cartel behavior on overhead power transmission
line construction. Accordingly, in April and May 2014 the Company was subject to dispositions under theConstruction Business Act by the Ministry of Land, Infrastructure, Transport and Tourism with respect to certain
electric business operations. Furthermore, as a result of an investigation into power cable producers in Japan36

Furukawa Electric Group Sustainability Report 2014: Web version

and other countries launched by the European Commission in January 2009, the European Commission decided
to impose fines on the Company and its equity method affiliated VISCAS Corporation in April 2014. Additionally,
after undergoing an investigation by overseas authorities into its previous involvement in an auto parts cartel, inAugust 2014 the Company was fined by the Chinese authorities for violating China's Anti-Monopoly Law.
The Company would like to express its sincere apologies for the huge concern and inconvenience caused to allaffected parties over several years as a result of its past involvement in cartels.
In the wake of events such as the onsite inspections by the Japan Fair Trade Commission in 2008, Furukawa
Electric Group has sought to eradicate violations of antitrust laws and competition laws, with input from outside
experts. In the future, we will continue to pursue activities to prevent any recurrence, including the enforcementof internal rules on contact with other companies in the same industry and pricing. We will also continue
conducting group-wide activities to improve training for officers and employees at Group companies in Japan andoverseas and to strengthen monitoring by the Internal Auditing Division in response to the recent tightening oflaws and regulations worldwide, not only in respect to compliance with antitrust and competition law but also inother areas of law. Through such initiatives, we will work to foster and maintain compliance and restore trust.

Training and Raising Awareness among Employees
We conduct a host of training and awareness activities in the aim of instilling compliance awareness among all
employees.

Compliance Education
Our primary shared educational materials are the Furukawa Electric Group CSR Code of Conduct and its
corresponding Furukawa Electric Group CSR Compliance Handbook. We distribute this handbook to Furukawa
Electric Group employees and take many opportunities to make use of it. We conduct compliance education for
employees at every level of the Company, from new recruits to directors. At the same time, we hold theme-based
group training and e-learning courses, and conduct groupwide compliance education.

Education Results (fiscal 2014)

Hierarchy-based
education(note 1)

Theme-specificeducation

Course Name

TargetParticipants

Training for executives

Newly apointed executives

32

Training for managers

Newly apointed managers

75

Training for managers andassistant managers

Newly apointed managers
and assistant managers

62

Training for new
employees

New employees

32(note 2)Competition laws and anti-bribery regulations

About 440

Subcontractor Law

About 510

Security trade control

About 1000

(note 1) In hierarchy-based education, manager training and new employee training includes education
on human rights.

(note 2) Figures apply to Furukawa Electric only.

37

Furukawa Electric Group Sustainability Report 2014: Web version

Initiatives in Compliance Months
Furukawa Electric Group has designated October and November as Compliance Months, during which we
implement measures aimed at tackling the variety of compliance issues faced by companies across our Group.
Principal Initiatives during Fiscal 2014 Compliance Months
Main Initiatives at Furukawa Electric
1. Conduct workplace self-checks according to section-specific checklist<Section-Specific Checklist>
1) Anti- Monopoly Act
2) Worker Dispatching Act
3) Subcontracting transactions4) Occupational safety
5) Asset protection6) Information security
2. Conduct workplace meetings
3. Courses on competition laws and anti-bribery regulations
4. Submission of Compliance Pledge (for assistant managers, managers and above)

Employee Compliance Awareness Surveys
We have continued to implement compliance awareness surveys at Furukawa Electric and affiliates in Japan.
Designed to gauge employee awareness and understanding of compliance, these surveys aim to encourage
recognition of compliance. Feedback is given on the results of the survey to our Group companies and Furukawa
Electric divisions, and the results are used to make proposals for compliance measures at each organization.

Internal Reporting System
Furukawa Electric Group has introduced an internal reporting system and works toward the early detection andcorrection of incidents of corruption. The Company has in place an internal reporting desk as well as an externalreporting desk that makes use of outside third-party institutions (the Furukawa Electric Group Hotline), both ofwhich allow employees to make reports anonymously. An internal reporting secretariat manages the content ofsuch reports stringently, taking ample care to prevent people making such reports from suffering any negative
impacts, looking into issues swiftly and taking appropriate action.

Security Trade Control
Furukawa Electric Group considers security trade control to be one of its most important responsibilities as acompany with global business operations. In accordance with the laws and regulations that make up theinternational framework on security trade control (the export control regime), we have improved andstrengthened our management systems for cargoes and technologies that can be converted to weapons or
military uses.
In exporting products and providing technology, we conduct transaction screenings based on our Security Trade
Control Regulations to ensure compliance with relevant legislation and are careful to prevent circumvent tocountries of concern.

38

Furukawa Electric Group Sustainability Report 2014: Web version

In fiscal 2014, we held joint training sessions for priority groups with the aim of increasing understanding of therelevant laws. Approximately 1,000 employees from across the Group took part.

Anti-Bribery
Furukawa Electric Group formulated the Furukawa Electric Group Anti-Bribery Statement in April 2012. In
December, we published the Furukawa Electric Group Anti-Bribery Guide, and we are promoting activities
toward creating a groupwide bribery risk management system. In addition to anti-bribery training carried out at
each company, we have made it possible for all companies to utilize e-learning video and texts for employees as
a Group-wide training tool. What's more, in fiscal 2014 we carried out monitoring in partnership with the Auditing
Department. We will continue to promote anti-bribery measures at Furukawa Electric Group in partnership withthe relevant divisions.

Challenges and Future Policy
We believe there is a need for Furukawa Electric Group to expand the level of participation at Group companies
in the many initiatives the Company has implemented in relation to legal compliance. What's more, we believe it
is necessary for us to put into practice the “three musts” - “be aware”, “speak” and “rectify” - and increase thesensitivity of each and every employee in respect to compliance so that we can flexibly meet the changing
expectations and demands of society and law.
In terms of future activities, we plan to focus on developing effective training content with the entire Group in
mind, and strengthening the global system for promoting compliance. Furthermore, we intend to raise theawareness of compliance even more by encouraging the autonomous behavior of each and every individual
based on the slogan “Thinking about and practicing compliance together”.

39Furukawa Electric Group Sustainability Report 2014: Web version

Targets and Results
Risk Management / Internal Controls / Compliance[Achievement]

Achieved

FY2014
Targets

Continue complianceeducation

Continue hierarchy-based andtheme-specific group training

Results / Achievement
We held theme-based joint training
sessions at five bases in Japan,
covering competition laws andanti-bribery regulations.
We held compliance training by job
grade, including training for
newly-appointed management
candidates and manager training.

We held risk management seminars inStrengthen emerging market
the Southeast Asia Region and China
risk checks and support for
Region.
overseas subsidiaries

We established the Group Global
Management Division andstrengthened support for subsidiaries.
We continued training related toEnhance global compliance competition law, and anti-bribery
foundations
compliance through e-learning.
Ensure thorough compliance withcompetition laws and createanti-bribery systems

Not achieved

FY2015

We carried out a reappraisal ofStrengthen business
important business after switching tocontinuity management
the business division system, and(BCM)
strengthened BCM activities with anStrengthen relations with businessawareness of the supply chain.
partners in regard to BCM activities
We formulated business continuity
Continue BCM drills, andplans (BCPs) for all business divisions
strengthen review activities
and moved on to BCM activities.

Hold risk management seminars inSoutheast Asia and China

Partially achieved

In partnership with the Auditing
Department, we carried out monitoringof efforts to build systems to prevent
bribery.

40

Targets

Promotion of global compliance
Develop training content targeting thewhole group, etc.
Strengthen business continuity
management (BCM)
Based on the lessons learned from the
Nikko snow damage, switch from existing
BCM activities, which focus on our own
company, to activities that focus on thecustomer's perspective.
Respond to risks in newly-emerging
economies and strengthen support foroverseas subsidiaries
Strengthen training in countries with
newly-emerging economies and provide
management support tools to affiliatedcompanies.
Give direction to priority fields in CSR
activities
Hold stakeholder communication

Furukawa Electric Group Sustainability Report 2014: Web version

Environment[Achievement]

Achieved

FY2014
Targets

Partially achieved

Not achieved

FY2015Results / Achievement

Implement initiatives aimed atpromoting effective utilization ofwater (new)

We identified the volume of water
usage for each water source and have
set reduction targets with the aim ofusing water effectively.

Take part in activities conservationof biodiversity (new)We took part in local activities in areas
around our sites and domestic groupcompanies (river basin cleaning
activities, etc.).

Promote development at groupcompanies in Japan (priority) →Expand to domestic groupcompanies, and activate green
activities

At domestic group companies, we
expanded green procurement activities
for general-purpose products andcarried out LCA for our main products.

Targets
Take initiatives aimed at reducing theoverall volume of waste (new)Expand to overseas group companies,
and promote environmental activities(new)
Strengthen activities aimed at promoting
environmental management (priority)
Establish targets under the basic policyon environmental activities and carry out
environmental activities continuously: I.
Social contributions; II. Pollution
prevention; III. Saving energy andresources

Quality[Achievement]

Achieved

FY2014
Targets

Strengthening fundamental“quality power”
Zero complaint from customers of
3H products(note) 3H products:
Hajimete (first manufactured
products)
Henkou (modification of producing
method, process or design, etc.)
Hisashiburi (products not
manufactured for an extended periodof time)Partially achieved

Not achieved

FY2015Results / Achievement

We carried out audit of Strategic
Business Units and promoted thehorizontal penetration of good
examples as part of our activities in our
first year of aiming to achieve zerocomplaints from customers of 3H
products.
Based on the above results, wereleased guidelines for the
management of 3H products.

41

Targets

Strengthening fundamental“quality power”

Decreasing 10% “Failure cost” comparewith FY2014

Furukawa Electric Group Sustainability Report 2014: Web version

Procurement

Targets[Achievement]
Achieved
FY2014
Results / Achievement

Strengthen strategic
relationships with business
We carried out partner
partners
assessments and gave feedback
Continue to conduct
meetings to approximately 300 ofpartner assessments andour suppliers.
feedback consultations

We carried out
Notify businessquestionnaire surveys ofpartners of CSR Deployment approximately 300 of our largest
Guidelines for Businesssuppliers in relation to CSR
Partners with updated version Deployment Guidelines and BCP
describing response to conflict status.
mineralsPartially achieved
Not achieved
FY2015
Targets
Strengthen strategic
relationships with partners(suppliers)
Continue to conduct
partner assessments
Promote awareness of
CSR Deployment Guidelines
among suppliers
Examine specific measures
aimed at strengthening the supply
chain based on the results of BCP
surveys carried out at suppliers
Carry out conflict minerals
survey (survey for the purposes of
updating data)

Personnel Development and Working Environment[Achievement]

Achieved

FY2014
Targets

Results / Achievement

designed training programs inaccordance with the plan.

CWe completed formulation of a plan tostrengthen Genba-ryoku capabilities forStrengthening Monozukuri
all business divisions.
capabilities
The attendance rate for Genbaryoku
Visualization of plans to strengthen
training at Furukawa Electric Co., Ltd.
Genba-ryoku capabilities
was 56.5%, which met our target.
Roll out genba-ryoku reinforcement
Staff training was completed astraining to manufacturing staff
planned for junior and middle-ranking
Increase training participation rate
staff.
at Group companies
Genba-ryoku training for affiliatedcompanies started at FEIC Kyushu(note 2)

Supporting diverse ways ofworking and work-lifebalance
Formally introduce system offlextime without core hours

Not achieved

FY2015

Fostering and strengthening
global human resources
We carried out GDP training and newly
Implementation of Global
Development Program (GDP)
Conduct newly designed training

Partially achieved

We completed introduction of thecoreless flextime system.

(note 2) FEIC: Furukawa Electric Industrial Cable Co., Ltd.

42

Targets
Fostering and strengthening global
human resources
Implementation of GDP
Execution of Global Challenge Program(GCP) for dispatching junior employees
overseas
Strengthening Monozukuri capabilities
Visualization of plans to strengthen
Genba-ryoku capabilities
Development of training for Monozukuri
staff
Development of Genba-ryoku training ataffiliated companies
Supporting diverse ways of working andwork-life balance
Introduction of system to allow nursing
leave to be taken in half-day units.
Introduction of system to allow
accumulated leave to be taken in
half-day units for the purposes of nursing
childrenFurukawa Electric Group Sustainability Report 2014: Web version

Occupational Health and Safety[Achievement]

Achieved

FY2014
Targets
Reduce number of accidents
requiring leave to one or fewer

Partially achieved

Not achieved

FY2015Results / Achievement

Three accidents requiring leave

Targets
Reduce accidents requiring leave to one
or fewer

Social Contribution[Achievement]

Achieved

FY2014
Targets

Invigorate social
contribution activities

Introduce activity case studies andcontinue to provide information

Partially achieved

Not achieved

FY2015Results / Achievement

We introduced case studies andprovided information via the intranet
and website.
We recognized Furukawa Electricgroup companies' social contribution
activities by presenting the CSRAwards.

43

Targets

Implement new programs that can beutilized on a continuous basis.