2018

Financial Statements and

Supplemental Information

For the Fiscal Year Ended December 31, 2018





),1$1&,$/6(&7,21

 7$%/(2)&217(176 

 %XVLQHVV3URILOH  
 )LQDQFLDO,QIRUPDWLRQ  
 )UHTXHQWO\8VHG7HUPV  
 4XDUWHUO\,QIRUPDWLRQ  
 0DQDJHPHQW¶V'LVFXVVLRQDQG$QDO\VLVRI)LQDQFLDO&RQGLWLRQ
DQG5HVXOWVRI2SHUDWLRQV 
 )XQFWLRQDO(DUQLQJV  
 )RUZDUG/RRNLQJ6WDWHPHQWV  
 2YHUYLHZ  
 %XVLQHVV(QYLURQPHQWDQG5LVN$VVHVVPHQW  
 5HYLHZRIDQG5HVXOWV 
 /LTXLGLW\DQG&DSLWDO5HVRXUFHV 
 &DSLWDODQG([SORUDWLRQ([SHQGLWXUHV 
 7D[HV 
 (QYLURQPHQWDO0DWWHUV 
 0DUNHW5LVNV,QIODWLRQDQG2WKHU8QFHUWDLQWLHV 
 5HFHQWO\,VVXHG$FFRXQWLQJ6WDQGDUGV 
 &ULWLFDO$FFRXQWLQJ(VWLPDWHV 
 0DQDJHPHQW¶V5HSRUWRQ,QWHUQDO&RQWURO2YHU)LQDQFLDO5HSRUWLQJ 
 5HSRUWRI,QGHSHQGHQW5HJLVWHUHG3XEOLF$FFRXQWLQJ)LUP 
 &RQVROLGDWHG)LQDQFLDO6WDWHPHQWV 
 6WDWHPHQWRI,QFRPH 
 6WDWHPHQWRI&RPSUHKHQVLYH,QFRPH 
 %DODQFH6KHHW 
 6WDWHPHQWRI&DVK)ORZV 
 6WDWHPHQWRI&KDQJHVLQ(TXLW\ 
 1RWHVWR&RQVROLGDWHG)LQDQFLDO6WDWHPHQWV 
 6XPPDU\RI$FFRXQWLQJ3ROLFLHV 
 $FFRXQWLQJ&KDQJHV 
 0LVFHOODQHRXV)LQDQFLDO,QIRUPDWLRQ 
 2WKHU&RPSUHKHQVLYH,QFRPH,QIRUPDWLRQ 
 &DVK)ORZ,QIRUPDWLRQ 
 $GGLWLRQDO:RUNLQJ&DSLWDO,QIRUPDWLRQ 
 (TXLW\&RPSDQ\,QIRUPDWLRQ 
 ,QYHVWPHQWV$GYDQFHVDQG/RQJ7HUP5HFHLYDEOHV 
 3URSHUW\3ODQWDQG(TXLSPHQWDQG$VVHW5HWLUHPHQW2EOLJDWLRQV 
 $FFRXQWLQJIRU6XVSHQGHG([SORUDWRU\:HOO&RVWV 
 /HDVHG)DFLOLWLHV 
 (DUQLQJV3HU6KDUH 
 )LQDQFLDO,QVWUXPHQWVDQG'HULYDWLYHV 
 /RQJ7HUP'HEW 
 ,QFHQWLYH3URJUDP 
 /LWLJDWLRQDQG2WKHU&RQWLQJHQFLHV 
 3HQVLRQDQG2WKHU3RVWUHWLUHPHQW%HQHILWV 
 'LVFORVXUHVDERXW6HJPHQWVDQG5HODWHG,QIRUPDWLRQ 
 ,QFRPHDQG2WKHU7D[HV 
 6XSSOHPHQWDO,QIRUPDWLRQRQ2LODQG*DV([SORUDWLRQDQG3URGXFWLRQ$FWLYLWLHV 
 2SHUDWLQJ,QIRUPDWLRQ 
 6WRFN3HUIRUPDQFH*UDSKV 


%86,1(66352),/(

            5HWXUQRQ   &DSLWDODQG
    (DUQLQJV$IWHU  $YHUDJH&DSLWDO  $YHUDJH&DSLWDO   ([SORUDWLRQ
    ,QFRPH7D[HV  (PSOR\HG  (PSOR\HG   ([SHQGLWXUHV
)LQDQFLDO                 
    PLOOLRQVRIGROODUV  SHUFHQW  PLOOLRQVRIGROODUV
8SVWUHDP                
 8QLWHG6WDWHV         
 1RQ86                
  7RWDO         
'RZQVWUHDP                 
 8QLWHG6WDWHV         
 1RQ86                
  7RWDO         
&KHPLFDO                 
 8QLWHG6WDWHV         
 1RQ86                
  7RWDO         
&RUSRUDWHDQGILQDQFLQJ                
  7RWDO         

6HH)UHTXHQWO\8VHG7HUPVIRUDGHILQLWLRQDQGFDOFXODWLRQRIFDSLWDOHPSOR\HGDQGUHWXUQRQDYHUDJHFDSLWDOHPSOR\HG



2SHUDWLQJ          
  WKRXVDQGVRIEDUUHOVGDLO\   WKRXVDQGVRIEDUUHOVGDLO\
1HWOLTXLGVSURGXFWLRQ     5HILQHU\WKURXJKSXW   
 8QLWHG6WDWHV     8QLWHG6WDWHV  
 1RQ86     1RQ86  
  7RWDO      7RWDO  
            
  PLOOLRQVRIFXELFIHHWGDLO\   WKRXVDQGVRIEDUUHOVGDLO\
1DWXUDOJDVSURGXFWLRQDYDLODEOHIRUVDOH     3HWUROHXPSURGXFWVDOHV   
 8QLWHG6WDWHV     8QLWHG6WDWHV  
 1RQ86     1RQ86  
  7RWDO      7RWDO  
            
  WKRXVDQGVRIRLOHTXLYDOHQWEDUUHOVGDLO\   WKRXVDQGVRIPHWULFWRQV
2LOHTXLYDOHQWSURGXFWLRQ    &KHPLFDOSULPHSURGXFWVDOHV   
        8QLWHG6WDWHV  
        1RQ86  
         7RWDO  

 1DWXUDOJDVLVFRQYHUWHGWRDQRLOHTXLYDOHQWEDVLVDWVL[PLOOLRQFXELFIHHWSHURQHWKRXVDQGEDUUHOV
 3HWUROHXP SURGXFW DQG FKHPLFDO SULPH SURGXFW VDOHV GDWD UHSRUWHG QHW RI SXUFKDVHVVDOHV FRQWUDFWV ZLWK WKH VDPH
FRXQWHUSDUW\
 3ULPHSURGXFWVDOHVDUHWRWDOSURGXFWVDOHVLQFOXGLQJ([[RQ0RELO¶VVKDUHRIHTXLW\FRPSDQ\YROXPHVDQGILQLVKHGSURGXFW
WUDQVIHUVWRWKH'RZQVWUHDP



),1$1&,$/,1)250$7,21

           
  PLOOLRQVRIGROODUVH[FHSWZKHUHVWDWHGRWKHUZLVH
           
6DOHVDQGRWKHURSHUDWLQJUHYHQXH     
(DUQLQJV          
 8SVWUHDP     
 'RZQVWUHDP      
 &KHPLFDO      
 &RUSRUDWHDQGILQDQFLQJ          
 1HWLQFRPHDWWULEXWDEOHWR([[RQ0RELO     
(DUQLQJVSHUFRPPRQVKDUHGROODUV     
(DUQLQJVSHUFRPPRQVKDUH±DVVXPLQJGLOXWLRQGROODUV     
           
(DUQLQJVWRDYHUDJH([[RQ0RELOVKDUHRIHTXLW\SHUFHQW      
           
:RUNLQJFDSLWDO     
5DWLRRIFXUUHQWDVVHWVWRFXUUHQWOLDELOLWLHVWLPHV      
           
$GGLWLRQVWRSURSHUW\SODQWDQGHTXLSPHQW     
3URSHUW\SODQWDQGHTXLSPHQWOHVVDOORZDQFHV     
7RWDODVVHWV     
           
([SORUDWLRQH[SHQVHVLQFOXGLQJGU\KROHV     
5HVHDUFKDQGGHYHORSPHQWFRVWV     
           
/RQJWHUPGHEW     
7RWDOGHEW     
'HEWWRFDSLWDOSHUFHQW      
1HWGHEWWRFDSLWDOSHUFHQW      
           
([[RQ0RELOVKDUHRIHTXLW\DW\HDUHQG     
([[RQ0RELOVKDUHRIHTXLW\SHUFRPPRQVKDUHGROODUV     
:HLJKWHGDYHUDJHQXPEHURIFRPPRQVKDUHV
 RXWVWDQGLQJPLOOLRQV      
           
1XPEHURIUHJXODUHPSOR\HHVDW\HDUHQGWKRXVDQGV      
           

 'HEWQHWRIFDVK
 5HJXODUHPSOR\HHVDUHGHILQHGDVDFWLYHH[HFXWLYHPDQDJHPHQWSURIHVVLRQDOWHFKQLFDODQGZDJHHPSOR\HHVZKRZRUNIXOO
WLPHRUSDUWWLPHIRUWKH&RUSRUDWLRQDQGDUHFRYHUHGE\WKH&RUSRUDWLRQ¶VEHQHILWSODQVDQGSURJUDPV5HJXODUHPSOR\HHV
GRQRWLQFOXGHHPSOR\HHVRIWKHFRPSDQ\RSHUDWHGUHWDLOVLWHV&2567KHQXPEHURI&256HPSOR\HHVLVQRWVLJQLILFDQW



)5(48(17/<86('7(506

/LVWHGEHORZDUHGHILQLWLRQVRIVHYHUDORI([[RQ0RELO¶VNH\EXVLQHVVDQGILQDQFLDOSHUIRUPDQFHPHDVXUHV7KHVHGHILQLWLRQVDUH
SURYLGHGWRIDFLOLWDWHXQGHUVWDQGLQJRIWKHWHUPVDQGWKHLUFDOFXODWLRQ
&DVK)ORZ)URP2SHUDWLRQVDQG$VVHW6DOHV
&DVKIORZIURPRSHUDWLRQVDQGDVVHWVDOHVLVWKHVXPRIWKHQHWFDVKSURYLGHGE\RSHUDWLQJDFWLYLWLHVDQGSURFHHGVDVVRFLDWHGZLWK
VDOHVRIVXEVLGLDULHVSURSHUW\SODQWDQGHTXLSPHQWDQGVDOHVDQGUHWXUQVRILQYHVWPHQWVIURPWKH&RQVROLGDWHG6WDWHPHQWRI&DVK
)ORZV7KLVFDVKIORZUHIOHFWVWKHWRWDOVRXUFHVRIFDVKIURPERWKRSHUDWLQJWKH&RUSRUDWLRQ¶VDVVHWVDQGIURPWKHGLYHVWLQJRI
DVVHWV7KH&RUSRUDWLRQHPSOR\VDORQJVWDQGLQJDQGUHJXODUGLVFLSOLQHGUHYLHZSURFHVVWRHQVXUHWKDWDOODVVHWVDUHFRQWULEXWLQJWR
WKH &RUSRUDWLRQ¶V VWUDWHJLF REMHFWLYHV $VVHWV DUH GLYHVWHG ZKHQ WKH\ DUH QR ORQJHU PHHWLQJ WKHVH REMHFWLYHV RU DUH ZRUWK
FRQVLGHUDEO\PRUHWRRWKHUV%HFDXVHRIWKHUHJXODUQDWXUHRIWKLVDFWLYLW\ZHEHOLHYHLWLVXVHIXOIRULQYHVWRUVWRFRQVLGHUSURFHHGV
DVVRFLDWHGZLWKDVVHWVDOHVWRJHWKHUZLWKFDVKSURYLGHGE\RSHUDWLQJDFWLYLWLHVZKHQHYDOXDWLQJFDVKDYDLODEOHIRULQYHVWPHQWLQWKH
EXVLQHVVDQGILQDQFLQJDFWLYLWLHVLQFOXGLQJVKDUHKROGHUGLVWULEXWLRQV


&DVKIORZIURPRSHUDWLRQVDQGDVVHWVDOHV      
   PLOOLRQVRIGROODUV
       
1HWFDVKSURYLGHGE\RSHUDWLQJDFWLYLWLHV   
3URFHHGVDVVRFLDWHGZLWKVDOHVRIVXEVLGLDULHVSURSHUW\SODQWDQGHTXLSPHQW      
 DQGVDOHVDQGUHWXUQVRILQYHVWPHQWV      
 &DVKIORZIURPRSHUDWLRQVDQGDVVHWVDOHV   

&DSLWDO(PSOR\HG
&DSLWDOHPSOR\HGLVDPHDVXUHRIQHWLQYHVWPHQW:KHQYLHZHGIURPWKHSHUVSHFWLYHRIKRZWKHFDSLWDOLVXVHGE\WKHEXVLQHVVHV
LWLQFOXGHV([[RQ0RELO¶VQHWVKDUHRISURSHUW\SODQWDQGHTXLSPHQWDQGRWKHUDVVHWVOHVVOLDELOLWLHVH[FOXGLQJERWKVKRUWWHUPDQG
ORQJWHUP GHEW :KHQ YLHZHG IURP WKH SHUVSHFWLYH RI WKH VRXUFHV RI FDSLWDO HPSOR\HG LQ WRWDO IRU WKH &RUSRUDWLRQ LW LQFOXGHV
([[RQ0RELO¶VVKDUHRIWRWDOGHEWDQGHTXLW\%RWKRIWKHVHYLHZVLQFOXGH([[RQ0RELO¶VVKDUHRIDPRXQWVDSSOLFDEOHWRHTXLW\
FRPSDQLHVZKLFKWKH&RUSRUDWLRQEHOLHYHVVKRXOGEHLQFOXGHGWRSURYLGHDPRUHFRPSUHKHQVLYHPHDVXUHRIFDSLWDOHPSOR\HG


&DSLWDOHPSOR\HG      
   PLOOLRQVRIGROODUV
%XVLQHVVXVHVDVVHWDQGOLDELOLW\SHUVSHFWLYH      
7RWDODVVHWV   
/HVVOLDELOLWLHVDQGQRQFRQWUROOLQJLQWHUHVWVVKDUHRIDVVHWVDQGOLDELOLWLHV      
 7RWDOFXUUHQWOLDELOLWLHVH[FOXGLQJQRWHVDQGORDQVSD\DEOH    
 7RWDOORQJWHUPOLDELOLWLHVH[FOXGLQJORQJWHUPGHEW    
 1RQFRQWUROOLQJLQWHUHVWVVKDUHRIDVVHWVDQGOLDELOLWLHV    
$GG([[RQ0RELOVKDUHRIGHEWILQDQFHGHTXLW\FRPSDQ\QHWDVVHWV      
 7RWDOFDSLWDOHPSOR\HG   
       
7RWDOFRUSRUDWHVRXUFHVGHEWDQGHTXLW\SHUVSHFWLYH      
1RWHVDQGORDQVSD\DEOH   
/RQJWHUPGHEW    
([[RQ0RELOVKDUHRIHTXLW\    
/HVVQRQFRQWUROOLQJLQWHUHVWVVKDUHRIWRWDOGHEW    
$GG([[RQ0RELOVKDUHRIHTXLW\FRPSDQ\GHEW      
 7RWDOFDSLWDOHPSOR\HG   


)5(48(17/<86('7(506

5HWXUQRQ$YHUDJH&DSLWDO(PSOR\HG
5HWXUQRQDYHUDJHFDSLWDOHPSOR\HG52&(LVDSHUIRUPDQFHPHDVXUHUDWLR)URPWKHSHUVSHFWLYHRIWKHEXVLQHVVVHJPHQWV52&(
LVDQQXDOEXVLQHVVVHJPHQWHDUQLQJVGLYLGHGE\DYHUDJHEXVLQHVVVHJPHQWFDSLWDOHPSOR\HGDYHUDJHRIEHJLQQLQJDQGHQGRI\HDU
DPRXQWV7KHVHVHJPHQWHDUQLQJVLQFOXGH([[RQ0RELO¶VVKDUHRIVHJPHQWHDUQLQJVRIHTXLW\FRPSDQLHVFRQVLVWHQWZLWKRXUFDSLWDO
HPSOR\HGGHILQLWLRQDQGH[FOXGHWKHFRVWRIILQDQFLQJ7KH&RUSRUDWLRQ¶VWRWDO52&(LVQHWLQFRPHDWWULEXWDEOHWR([[RQ0RELO
H[FOXGLQJWKHDIWHUWD[FRVWRIILQDQFLQJGLYLGHGE\WRWDOFRUSRUDWHDYHUDJHFDSLWDOHPSOR\HG7KH&RUSRUDWLRQKDVFRQVLVWHQWO\
DSSOLHGLWV52&(GHILQLWLRQIRUPDQ\\HDUVDQGYLHZVLWDVWKHEHVWPHDVXUHRIKLVWRULFDOFDSLWDOSURGXFWLYLW\LQRXUFDSLWDOLQWHQVLYH
ORQJWHUP LQGXVWU\ ERWK WR HYDOXDWH PDQDJHPHQW¶V SHUIRUPDQFH DQG WR GHPRQVWUDWH WR VKDUHKROGHUV WKDW FDSLWDO KDV EHHQ XVHG
ZLVHO\RYHUWKHORQJWHUP$GGLWLRQDOPHDVXUHVZKLFKDUHPRUHFDVKIORZEDVHGDUHXVHGWRPDNHLQYHVWPHQWGHFLVLRQV


5HWXUQRQDYHUDJHFDSLWDOHPSOR\HG      
     PLOOLRQVRIGROODUV
         
1HWLQFRPHDWWULEXWDEOHWR([[RQ0RELO   
)LQDQFLQJFRVWVDIWHUWD[      
 *URVVWKLUGSDUW\GHEW      
 ([[RQ0RELOVKDUHRIHTXLW\FRPSDQLHV      
 $OORWKHUILQDQFLQJFRVWV±QHW      
  7RWDOILQDQFLQJFRVWV      
   (DUQLQJVH[FOXGLQJILQDQFLQJFRVWV   
$YHUDJHFDSLWDOHPSOR\HG   
5HWXUQRQDYHUDJHFDSLWDOHPSOR\HG±FRUSRUDWHWRWDO      


48$57(5/<,1)250$7,21

    
  )LUVW 6HFRQG 7KLUG )RXUWK   )LUVW 6HFRQG 7KLUG )RXUWK 
  4XDUWHU 4XDUWHU 4XDUWHU 4XDUWHU <HDU  4XDUWHU 4XDUWHU 4XDUWHU 4XDUWHU <HDU
9ROXPHV           
3URGXFWLRQRIFUXGHRLO WKRXVDQGVRIEDUUHOVGDLO\
 QDWXUDOJDVOLTXLGV          
 V\QWKHWLFRLODQGELWXPHQ           
5HILQHU\WKURXJKSXW          
3HWUROHXPSURGXFWVDOHV          

1DWXUDOJDVSURGXFWLRQ PLOOLRQVRIFXELFIHHWGDLO\
 DYDLODEOHIRUVDOH          

 WKRXVDQGVRIRLOHTXLYDOHQWEDUUHOVGDLO\
2LOHTXLYDOHQWSURGXFWLRQ          

 WKRXVDQGVRIPHWULFWRQV
&KHPLFDOSULPHSURGXFWVDOHV          

6XPPDUL]HGILQDQFLDOGDWD           
6DOHVDQGRWKHURSHUDWLQJ PLOOLRQVRIGROODUV
 UHYHQXH          
*URVVSURILW          
1HWLQFRPHDWWULEXWDEOHWR           
 ([[RQ0RELO          

3HUVKDUHGDWD GROODUVSHUVKDUH
(DUQLQJVSHUFRPPRQVKDUH          
(DUQLQJVSHUFRPPRQVKDUH           
 ±DVVXPLQJGLOXWLRQ          

 3HWUROHXPSURGXFWDQGFKHPLFDOSULPHSURGXFWVDOHVGDWDUHSRUWHGQHWRISXUFKDVHVVDOHVFRQWUDFWVZLWKWKHVDPHFRXQWHUSDUW\
 1DWXUDOJDVLVFRQYHUWHGWRDQRLOHTXLYDOHQWEDVLVDWVL[PLOOLRQFXELFIHHWSHURQHWKRXVDQGEDUUHOV
 *URVVSURILWHTXDOVVDOHVDQGRWKHURSHUDWLQJUHYHQXHOHVVHVWLPDWHGFRVWVDVVRFLDWHGZLWKSURGXFWVVROG(IIHFWLYH-DQXDU\WKH
&RUSRUDWLRQDGRSWHGWKH$FFRXQWLQJ6WDQGDUG8SGDWH&RPSHQVDWLRQ±5HWLUHPHQW%HQHILWV7RSLF,PSURYLQJWKH3UHVHQWDWLRQRI1HW
3HULRGLF3HQVLRQ&RVWDQG1HW3HULRGLF3RVWUHWLUHPHQW%HQHILW&RVWZKLFKUHTXLUHVVHSDUDWHSUHVHQWDWLRQRIWKHQRQVHUYLFHFRVWFRPSRQHQWV
RIQHWEHQHILWFRVWVDQGLQFUHDVHGSUHYLRXVO\UHSRUWHGJURVVSURILWE\PLOOLRQIRUILUVWTXDUWHUPLOOLRQIRUVHFRQGTXDUWHU
PLOOLRQIRUWKLUGTXDUWHUDQGPLOOLRQIRUIRXUWKTXDUWHU6HH1RWHWRWKHILQDQFLDOVWDWHPHQWV$FFRXQWLQJ
&KDQJHV
 )RXUWKTXDUWHULQFOXGHGDQLPSDLUPHQWFKDUJHRIPLOOLRQ)RXUWKTXDUWHULQFOXGHGD86WD[UHIRUPLPSDFWRI
PLOOLRQDQGDQLPSDLUPHQWFKDUJHRIPLOOLRQ
 &RPSXWHGXVLQJWKHDYHUDJHQXPEHURIVKDUHVRXWVWDQGLQJGXULQJHDFKSHULRG7KHVXPRIWKHIRXUTXDUWHUVPD\QRWDGGWRWKHIXOO\HDU

7KHSULQFLSDOPDUNHWZKHUH([[RQ0RELOFRPPRQVWRFN;20LVWUDGHGLVWKH1HZ<RUN6WRFN([FKDQJHDOWKRXJKWKHVWRFNLV
WUDGHGRQRWKHUH[FKDQJHVLQDQGRXWVLGHWKH8QLWHG6WDWHV
7KHUH ZHUH  UHJLVWHUHG VKDUHKROGHUV RI ([[RQ0RELO FRPPRQ VWRFN DW 'HFHPEHU  $W -DQXDU\  WKH
UHJLVWHUHGVKDUHKROGHUVRI([[RQ0RELOFRPPRQVWRFNQXPEHUHG
2Q-DQXDU\WKH&RUSRUDWLRQGHFODUHGDGLYLGHQGSHUFRPPRQVKDUHSD\DEOH0DUFK


0$1$*(0(17¶6',6&866,21$1'$1$/<6,62)),1$1&,$/&21',7,21$1'5(68/762)23(5$7,216

)81&7,21$/($51,1*6      
   PLOOLRQVRIGROODUVH[FHSWSHUVKDUHDPRXQWV
(DUQLQJV86*$$3      
8SVWUHDP      
 8QLWHG6WDWHV    
 1RQ86    
'RZQVWUHDP 
 8QLWHG6WDWHV    
 1RQ86    
&KHPLFDO 
 8QLWHG6WDWHV    
 1RQ86    
&RUSRUDWHDQGILQDQFLQJ    
  1HWLQFRPHDWWULEXWDEOHWR([[RQ0RELO86*$$3   
   
(DUQLQJVSHUFRPPRQVKDUH    
(DUQLQJVSHUFRPPRQVKDUH±DVVXPLQJGLOXWLRQ    

5HIHUHQFHV LQ WKLV GLVFXVVLRQ WR WRWDO FRUSRUDWH HDUQLQJV PHDQ QHW LQFRPH DWWULEXWDEOH WR ([[RQ0RELO 86 *$$3 IURP WKH
FRQVROLGDWHG LQFRPH VWDWHPHQW 8QOHVV RWKHUZLVH LQGLFDWHG UHIHUHQFHV WR HDUQLQJV 8SVWUHDP 'RZQVWUHDP &KHPLFDO DQG
&RUSRUDWHDQGILQDQFLQJVHJPHQWHDUQLQJVDQGHDUQLQJVSHUVKDUHDUH([[RQ0RELO¶VVKDUHDIWHUH[FOXGLQJDPRXQWVDWWULEXWDEOH
WRQRQFRQWUROOLQJLQWHUHVWV


)25:$5'/22.,1*67$7(0(176
6WDWHPHQWVLQWKLVGLVFXVVLRQUHJDUGLQJH[SHFWDWLRQVSODQVDQGIXWXUHHYHQWVRUFRQGLWLRQVDUHIRUZDUGORRNLQJVWDWHPHQWV$FWXDO
IXWXUH ILQDQFLDO DQG RSHUDWLQJ UHVXOWV RU FRQGLWLRQV LQFOXGLQJ GHPDQG JURZWK DQG HQHUJ\ VRXUFH VXSSO\ DQG PL[ JRYHUQPHQW
SROLFLHVUHODWLQJWRFOLPDWHFKDQJHIRUHLJQUHODWLRQVDQGWD[DWLRQSURMHFWSODQVFDSDFLWLHVVFKHGXOHVDQGFRVWVSURGXFWLRQJURZWK
DQG PL[ UDWHV RI ILHOG GHFOLQH DVVHW FDUU\LQJ YDOXHV SURYHG UHVHUYHV ILQDQFLQJ VRXUFHV WKH UHVROXWLRQ RI FRQWLQJHQFLHV DQG
XQFHUWDLQWD[SRVLWLRQVDQGHQYLURQPHQWDODQGFDSLWDOH[SHQGLWXUHVFRXOGGLIIHUPDWHULDOO\GHSHQGLQJRQDQXPEHURIIDFWRUVVXFK
DVFKDQJHVLQWKHVXSSO\RIDQGGHPDQGIRUFUXGHRLOQDWXUDOJDVDQGSHWUROHXPDQGSHWURFKHPLFDOSURGXFWVDQGUHVXOWLQJSULFH
LPSDFWVWKHRXWFRPHRIFRPPHUFLDOQHJRWLDWLRQVWKHLPSDFWRIILVFDODQGFRPPHUFLDOWHUPVSROLWLFDORUUHJXODWRU\HYHQWVWKH
RXWFRPHRIH[SORUDWLRQDQGGHYHORSPHQWSURMHFWVWHFKQRORJLFDOGHYHORSPHQWVDQGRWKHUIDFWRUVGLVFXVVHGKHUHLQDQGLQ,WHP$
5LVN)DFWRUVRI([[RQ0RELO¶V)RUP.
7KHWHUP³SURMHFW´DVXVHGLQWKLVUHSRUWFDQUHIHUWRDYDULHW\RIGLIIHUHQWDFWLYLWLHVDQGGRHVQRWQHFHVVDULO\KDYHWKHVDPHPHDQLQJ
DVLQDQ\JRYHUQPHQWSD\PHQWWUDQVSDUHQF\UHSRUWV

29(59,(:
7KHIROORZLQJGLVFXVVLRQDQGDQDO\VLVRI([[RQ0RELO¶VILQDQFLDOUHVXOWVDVZHOODVWKHDFFRPSDQ\LQJILQDQFLDOVWDWHPHQWVDQG
UHODWHGQRWHVWRFRQVROLGDWHGILQDQFLDOVWDWHPHQWVWRZKLFKWKH\UHIHUDUHWKHUHVSRQVLELOLW\RIWKHPDQDJHPHQWRI([[RQ0RELO
&RUSRUDWLRQ7KH&RUSRUDWLRQ¶VDFFRXQWLQJDQGILQDQFLDOUHSRUWLQJIDLUO\UHIOHFWLWVLQWHJUDWHGEXVLQHVVPRGHOLQYROYLQJH[SORUDWLRQ
IRUDQGSURGXFWLRQRIFUXGHRLODQGQDWXUDOJDVDQGPDQXIDFWXUHWUDGHWUDQVSRUWDQGVDOHRIFUXGHRLOQDWXUDOJDVSHWUROHXP
SURGXFWVSHWURFKHPLFDOVDQGDZLGHYDULHW\RIVSHFLDOW\SURGXFWV
([[RQ0RELOZLWKLWVUHVRXUFHEDVHILQDQFLDOVWUHQJWKGLVFLSOLQHGLQYHVWPHQWDSSURDFKDQGWHFKQRORJ\SRUWIROLRLVZHOOSRVLWLRQHG
WRSDUWLFLSDWHLQVXEVWDQWLDOLQYHVWPHQWVWRGHYHORSQHZHQHUJ\VXSSOLHV7KHFRPSDQ\¶VLQWHJUDWHGEXVLQHVVPRGHOZLWKVLJQLILFDQW
LQYHVWPHQWVLQ8SVWUHDP'RZQVWUHDPDQG&KHPLFDOVHJPHQWVUHGXFHVWKH&RUSRUDWLRQ¶VULVNIURPFKDQJHVLQFRPPRGLW\SULFHV
:KLOH FRPPRGLW\ SULFHV GHSHQG RQ VXSSO\ DQG GHPDQG DQG PD\ EH YRODWLOH RQ D VKRUWWHUP EDVLV ([[RQ0RELO¶V LQYHVWPHQW
GHFLVLRQVDUHJURXQGHGRQIXQGDPHQWDOVUHIOHFWHGLQRXUORQJWHUPEXVLQHVVRXWORRNDQGXVHDGLVFLSOLQHGDSSURDFKLQVHOHFWLQJ
DQGSXUVXLQJWKHPRVWDWWUDFWLYHLQYHVWPHQWRSSRUWXQLWLHV7KHFRUSRUDWHSODQLVDIXQGDPHQWDODQQXDOPDQDJHPHQWSURFHVVWKDWLV
WKHEDVLVIRUVHWWLQJQHDUWHUPRSHUDWLQJDQGFDSLWDOREMHFWLYHVLQDGGLWLRQWRSURYLGLQJWKHORQJHUWHUPHFRQRPLFDVVXPSWLRQVXVHG
IRULQYHVWPHQWHYDOXDWLRQSXUSRVHV9ROXPHVDUHEDVHGRQLQGLYLGXDOILHOGSURGXFWLRQSURILOHVZKLFKDUHDOVRXSGDWHGDQQXDOO\
3ULFHUDQJHVIRUFUXGHRLOQDWXUDOJDVUHILQHGSURGXFWVDQGFKHPLFDOSURGXFWVDUHEDVHGRQFRUSRUDWHSODQDVVXPSWLRQVGHYHORSHG
DQQXDOO\E\PDMRUUHJLRQDQGDUHXWLOL]HGIRULQYHVWPHQWHYDOXDWLRQSXUSRVHV0DMRULQYHVWPHQWRSSRUWXQLWLHVDUHHYDOXDWHGRYHUD
UDQJH RI SRWHQWLDO PDUNHW FRQGLWLRQV 2QFH PDMRU LQYHVWPHQWV DUH PDGH D UHDSSUDLVDO SURFHVV LV FRPSOHWHG WR HQVXUH UHOHYDQW
OHVVRQVDUHOHDUQHGDQGLPSURYHPHQWVDUHLQFRUSRUDWHGLQWRIXWXUHSURMHFWV


0$1$*(0(17¶6',6&866,21$1'$1$/<6,62)),1$1&,$/&21',7,21$1'5(68/762)23(5$7,216

%86,1(66(19,5210(17$1'5,6.$66(660(17
/RQJ7HUP%XVLQHVV2XWORRN
7KH/RQJ7HUP%XVLQHVV2XWORRNLVEDVHGRQWKH&RUSRUDWLRQ¶V2XWORRNIRU(QHUJ\ZKLFKLVXVHGWRKHOSLQIRUPRXUORQJ
WHUPEXVLQHVVVWUDWHJLHVDQGLQYHVWPHQWSODQV%\WKHZRUOG¶VSRSXODWLRQLVSURMHFWHGDWDURXQGELOOLRQSHRSOHRUDERXW
ELOOLRQPRUHWKDQLQ&RLQFLGHQWZLWKWKLVSRSXODWLRQLQFUHDVHWKH&RUSRUDWLRQH[SHFWVZRUOGZLGHHFRQRPLFJURZWKWR
DYHUDJHFORVHWRSHUFHQWSHU\HDUZLWKHFRQRPLFRXWSXWQHDUO\GRXEOLQJE\$VHFRQRPLHVDQGSRSXODWLRQVJURZDQGDV
OLYLQJVWDQGDUGVLPSURYHIRUELOOLRQVRISHRSOHWKHQHHGIRUHQHUJ\LVH[SHFWHGWRFRQWLQXHWRULVH(YHQZLWKVLJQLILFDQWHIILFLHQF\
JDLQVJOREDOHQHUJ\GHPDQGLVSURMHFWHGWRULVHE\DERXWSHUFHQWIURPWR7KLVLQFUHDVHLQHQHUJ\GHPDQGLVH[SHFWHG
WREHGULYHQE\GHYHORSLQJFRXQWULHVLHWKRVHWKDWDUHQRWPHPEHUQDWLRQVRIWKH2UJDQLVDWLRQIRU(FRQRPLF&RRSHUDWLRQDQG
'HYHORSPHQW2(&'
$VH[SDQGLQJSURVSHULW\KHOSVGULYHJOREDOHQHUJ\GHPDQGKLJKHULQFUHDVLQJXVHRIHQHUJ\HIILFLHQWWHFKQRORJLHVDQGSUDFWLFHVDV
ZHOODVORZHUHPLVVLRQIXHOVZLOOFRQWLQXHWRKHOSVLJQLILFDQWO\UHGXFHHQHUJ\FRQVXPSWLRQDQGHPLVVLRQVSHUXQLWRIHFRQRPLF
RXWSXWRYHUWLPH6XEVWDQWLDOHIILFLHQF\JDLQVDUHOLNHO\LQDOONH\DVSHFWVRIWKHZRUOG¶VHFRQRP\WKURXJKDIIHFWLQJHQHUJ\
UHTXLUHPHQWVIRUSRZHUJHQHUDWLRQWUDQVSRUWDWLRQLQGXVWULDODSSOLFDWLRQVDQGUHVLGHQWLDODQGFRPPHUFLDOQHHGV
*OREDOHOHFWULFLW\GHPDQGLVH[SHFWHGWRLQFUHDVHDSSUR[LPDWHO\SHUFHQWIURPWRZLWKGHYHORSLQJFRXQWULHVOLNHO\WR
DFFRXQWIRUDERXWSHUFHQWRIWKHLQFUHDVH&RQVLVWHQWZLWKWKLVSURMHFWLRQSRZHUJHQHUDWLRQLVH[SHFWHGWRUHPDLQWKHODUJHVWDQG
IDVWHVWJURZLQJPDMRUVHJPHQWRIJOREDOSULPDU\HQHUJ\GHPDQGVXSSRUWHGE\DZLGHYDULHW\RIHQHUJ\VRXUFHV7KHVKDUHRIFRDO
ILUHGJHQHUDWLRQLVOLNHO\WRGHFOLQHVXEVWDQWLDOO\DQGDSSURDFKSHUFHQWRIWKHZRUOG¶VHOHFWULFLW\LQYHUVXVQHDUO\SHUFHQW
LQLQSDUWDVDUHVXOWRISROLFLHVWRLPSURYHDLUTXDOLW\DVZHOODVUHGXFHJUHHQKRXVHJDVHPLVVLRQVWRDGGUHVVWKHULVNVRI
FOLPDWHFKDQJH)URPWRWKHDPRXQWRIHOHFWULFLW\VXSSOLHGXVLQJQDWXUDOJDVQXFOHDUSRZHUDQGUHQHZDEOHVLVOLNHO\
WRQHDUO\GRXEOHDQGDFFRXQWIRUDERXWSHUFHQWRIWKHJURZWKLQHOHFWULFLW\VXSSOLHV(OHFWULFLW\IURPZLQGDQGVRODULVOLNHO\WR
LQFUHDVHDERXWSHUFHQWKHOSLQJWRWDOUHQHZDEOHVLQFOXGLQJRWKHUVRXUFHVHJK\GURSRZHUWRDFFRXQWIRUDERXWKDOIRIWKH
LQFUHDVHLQHOHFWULFLW\VXSSOLHVZRUOGZLGHWKURXJK7RWDOUHQHZDEOHVZLOOOLNHO\UHDFKQHDUO\SHUFHQWRIJOREDOHOHFWULFLW\
VXSSOLHVE\1DWXUDOJDVDQGQXFOHDUDUHDOVRH[SHFWHGWRLQFUHDVHVKDUHVRYHUWKHSHULRGWRUHDFKLQJDERXWSHUFHQW
DQGSHUFHQWRIJOREDOHOHFWULFLW\VXSSOLHVUHVSHFWLYHO\E\6XSSOLHVRIHOHFWULFLW\E\HQHUJ\W\SHZLOOUHIOHFWVLJQLILFDQW
GLIIHUHQFHVDFURVVUHJLRQVUHIOHFWLQJDZLGHUDQJHRIIDFWRUVLQFOXGLQJWKHFRVWDQGDYDLODELOLW\RIYDULRXVHQHUJ\VXSSOLHV
(QHUJ\IRUWUDQVSRUWDWLRQ±LQFOXGLQJFDUVWUXFNVVKLSVWUDLQVDQGDLUSODQHV±LVH[SHFWHGWRLQFUHDVHDSSUR[LPDWHO\SHUFHQW
IURPWR7UDQVSRUWDWLRQHQHUJ\GHPDQGLVOLNHO\WRDFFRXQWIRUDSSUR[LPDWHO\SHUFHQWRIWKHJURZWKLQOLTXLGIXHOV
GHPDQGZRUOGZLGHRYHUWKLVSHULRG/LTXLGIXHOVGHPDQGIRUOLJKWGXW\YHKLFOHVLVH[SHFWHGWRUHPDLQUHODWLYHO\IODWWRDVWKH
LPSDFWRIEHWWHUIXHOHFRQRP\DQGVLJQLILFDQWJURZWKLQHOHFWULFFDUVOHGE\&KLQD(XURSHDQGWKH8QLWHG6WDWHVZRUNWRRIIVHW
JURZWKLQWKHZRUOGZLGHFDUIOHHWRIDERXWSHUFHQW%\OLJKWGXW\YHKLFOHVDUHH[SHFWHGWRDFFRXQWIRUDERXWSHUFHQWRI
JOREDOOLTXLGIXHOVGHPDQG'XULQJWKHVDPHWLPHSHULRGQHDUO\DOOWKHZRUOG¶VWUDQVSRUWDWLRQIOHHWVDUHOLNHO\WRFRQWLQXHWRUXQRQ
OLTXLGIXHOVZKLFKDUHZLGHO\DYDLODEOHDQGRIIHUSUDFWLFDODGYDQWDJHVLQSURYLGLQJDODUJHTXDQWLW\RIHQHUJ\LQVPDOOYROXPHV
/LTXLG IXHOV SURYLGH WKH ODUJHVW VKDUH RI JOREDO HQHUJ\ VXSSOLHV WRGD\ UHIOHFWLQJ EURDGEDVHG DYDLODELOLW\ DIIRUGDELOLW\ HDVH RI
WUDQVSRUWDWLRQDQGILWQHVVDVDSUDFWLFDOVROXWLRQWRPHHWDZLGHYDULHW\RIQHHGV%\JOREDOGHPDQGIRUOLTXLGIXHOVLVSURMHFWHG
WRJURZWRDSSUR[LPDWHO\PLOOLRQEDUUHOVRIRLOHTXLYDOHQWSHUGD\DQLQFUHDVHRIDERXWSHUFHQWIURP7KHQRQ2(&'
VKDUHRIJOREDOOLTXLGIXHOVGHPDQGLVH[SHFWHGWRLQFUHDVHWRDERXWSHUFHQWE\DVOLTXLGIXHOVGHPDQGLQWKH2(&'LV
OLNHO\WRGHFOLQHE\FORVHWRSHUFHQW0XFKRIWKHJOREDOOLTXLGIXHOVGHPDQGWRGD\LVPHWE\FUXGHSURGXFWLRQIURPWUDGLWLRQDO
FRQYHQWLRQDOVRXUFHVWKHVHVXSSOLHVZLOOUHPDLQLPSRUWDQWDQGVLJQLILFDQWGHYHORSPHQWDFWLYLW\LVH[SHFWHGWRRIIVHWPXFKRIWKH
QDWXUDOGHFOLQHVIURPWKHVHILHOGV$WWKHVDPHWLPHDYDULHW\RIHPHUJLQJVXSSO\VRXUFHV±LQFOXGLQJWLJKWRLOGHHSZDWHURLOVDQGV
QDWXUDOJDVOLTXLGVDQGELRIXHOV±DUHH[SHFWHGWRJURZWRKHOSPHHWULVLQJGHPDQG7KHZRUOG¶VUHVRXUFHEDVHLVVXIILFLHQWWRPHHW
SURMHFWHGGHPDQGWKURXJKDVWHFKQRORJ\DGYDQFHVFRQWLQXHWRH[SDQGWKHDYDLODELOLW\RIHFRQRPLFVXSSO\RSWLRQV+RZHYHU
WLPHO\LQYHVWPHQWVZLOOUHPDLQFULWLFDOWRPHHWLQJJOREDOQHHGVZLWKUHOLDEOHDQGDIIRUGDEOHVXSSOLHV
1DWXUDOJDVLVDYHUVDWLOHDQGSUDFWLFDOIXHOIRUDZLGHYDULHW\RIDSSOLFDWLRQVDQGLWLVH[SHFWHGWRJURZWKHPRVWRIDQ\SULPDU\
HQHUJ\W\SHIURPWRPHHWLQJ PRUHWKDQSHUFHQWRIJOREDOHQHUJ\GHPDQGJURZWK*OREDOQDWXUDOJDVGHPDQGLV
H[SHFWHGWRULVHQHDUO\SHUFHQWIURPWRZLWKDERXWSHUFHQWRIWKDWLQFUHDVHLQWKH$VLD3DFLILFUHJLRQ6LJQLILFDQW
JURZWKLQVXSSOLHVRIXQFRQYHQWLRQDOJDV±WKHQDWXUDOJDVIRXQGLQVKDOHDQGRWKHUWLJKWURFNIRUPDWLRQV±ZLOOKHOSPHHWWKHVH
QHHGV,QWRWDODERXWSHUFHQWRIWKHJURZWKLQQDWXUDOJDVVXSSOLHVLVH[SHFWHGWREHIURPXQFRQYHQWLRQDOVRXUFHV$WWKHVDPH
WLPH FRQYHQWLRQDOO\SURGXFHG QDWXUDO JDV LV OLNHO\ WR UHPDLQ WKH FRUQHUVWRQH RI JOREDO VXSSO\ PHHWLQJ DERXW WZRWKLUGV RI
ZRUOGZLGHGHPDQGLQ/LTXHILHGQDWXUDOJDV/1*WUDGHZLOOH[SDQGVLJQLILFDQWO\PHHWLQJDERXWRQHWKLUGRIWKHLQFUHDVH
LQJOREDOGHPDQGJURZWKZLWKPXFKRIWKLVVXSSO\H[SHFWHGWRKHOSPHHWULVLQJGHPDQGLQ$VLD3DFLILF


0$1$*(0(17¶6',6&866,21$1'$1$/<6,62)),1$1&,$/&21',7,21$1'5(68/762)23(5$7,216

7KHZRUOG¶VHQHUJ\PL[LVKLJKO\GLYHUVHDQGZLOOUHPDLQVRWKURXJK2LOLVH[SHFWHGWRUHPDLQWKHODUJHVWVRXUFHRIHQHUJ\
ZLWKLWVVKDUHUHPDLQLQJFORVHWRRQHWKLUGLQ&RDOLVFXUUHQWO\WKHVHFRQGODUJHVWVRXUFHRIHQHUJ\EXWLWLVOLNHO\WRORVHWKDW
SRVLWLRQWRQDWXUDOJDVLQWKHWLPHIUDPH7KHVKDUHRIQDWXUDOJDVLVH[SHFWHGWRUHDFKSHUFHQWE\ZKLOHWKH
VKDUHRIFRDOIDOOVWRDERXWSHUFHQW1XFOHDUSRZHULVSURMHFWHGWRJURZVLJQLILFDQWO\DVPDQ\QDWLRQVDUHOLNHO\WRH[SDQGQXFOHDU
FDSDFLW\WRDGGUHVVULVLQJHOHFWULFLW\QHHGVDVZHOODVHQHUJ\VHFXULW\DQGHQYLURQPHQWDOLVVXHV7RWDOUHQHZDEOHHQHUJ\LVOLNHO\WR
H[FHHGSHUFHQWRIJOREDOHQHUJ\E\ZLWKELRPDVVK\GURDQGJHRWKHUPDOFRQWULEXWLQJDFRPELQHGVKDUHRIPRUHWKDQ
SHUFHQW7RWDOHQHUJ\VXSSOLHGIURPZLQGVRODUDQGELRIXHOVLVH[SHFWHGWRLQFUHDVHUDSLGO\JURZLQJQHDUO\SHUFHQWIURP
WRZKHQWKH\ZLOOOLNHO\EHDERXWSHUFHQWRIWKHZRUOGHQHUJ\PL[
7KH&RUSRUDWLRQDQWLFLSDWHVWKDWWKHZRUOG¶VDYDLODEOHRLODQGJDVUHVRXUFHEDVHZLOOJURZQRWRQO\IURPQHZGLVFRYHULHVEXWDOVR
IURPLQFUHDVHVLQSUHYLRXVO\GLVFRYHUHGILHOGV7HFKQRORJ\ZLOOXQGHUSLQWKHVHLQFUHDVHV7KHLQYHVWPHQWVWRGHYHORSDQGVXSSO\
UHVRXUFHVWRPHHWJOREDOGHPDQGWKURXJKZLOOEHVLJQLILFDQW±HYHQLIGHPDQGUHPDLQVIODW7KLVUHIOHFWVDIXQGDPHQWDODVSHFW
RIWKHRLODQGQDWXUDOJDVEXVLQHVVLQWKDWDVWKH,QWHUQDWLRQDO(QHUJ\$JHQF\,($QRWHVLQLWV:RUOG(QHUJ\2XWORRND
³NH\XQGHUO\LQJGULYHUIRUQHZLQYHVWPHQWLVGHFOLQLQJRXWSXWIURPH[LVWLQJILHOGV´$FFRUGLQJWRWKH,($¶V1HZ3ROLFLHV6FHQDULR
WKHLQYHVWPHQWUHTXLUHGWRPHHWRLODQGQDWXUDOJDVVXSSO\UHTXLUHPHQWVZRUOGZLGHRYHUWKHSHULRGZLOOEHDERXW
WULOOLRQPHDVXUHGLQGROODUVRUDSSUR[LPDWHO\ELOOLRQSHU\HDURQDYHUDJH
,QWHUQDWLRQDODFFRUGVDQGXQGHUO\LQJUHJLRQDODQGQDWLRQDOUHJXODWLRQVFRYHULQJJUHHQKRXVHJDVHPLVVLRQVFRQWLQXHWRHYROYHZLWK
XQFHUWDLQWLPLQJDQGRXWFRPHPDNLQJLWGLIILFXOWWRSUHGLFWWKHLUEXVLQHVVLPSDFW)RUPDQ\\HDUVWKH&RUSRUDWLRQKDVWDNHQLQWR
DFFRXQWSROLFLHVHVWDEOLVKHGWRUHGXFHHQHUJ\UHODWHGJUHHQKRXVHJDVHPLVVLRQVLQLWVORQJWHUP2XWORRNIRU(QHUJ\7KHFOLPDWH
DFFRUGUHDFKHGDWWKH&RQIHUHQFHRIWKH3DUWLHV&23LQ3DULVVHWPDQ\QHZJRDOVDQGPDQ\UHODWHGSROLFLHVDUHVWLOOHPHUJLQJ
2XU2XWORRNUHIOHFWVDQHQYLURQPHQWZLWKLQFUHDVLQJO\VWULQJHQWFOLPDWHSROLFLHVDQGLVFRQVLVWHQWZLWKWKHDJJUHJDWLRQRI1DWLRQDOO\
'HWHUPLQHG&RQWULEXWLRQVZKLFKZHUHVXEPLWWHGE\VLJQDWRULHVWRWKH8QLWHG1DWLRQV)UDPHZRUN&RQYHQWLRQRQ&OLPDWH&KDQJH
81)&&&3DULV$JUHHPHQW2XU2XWORRNVHHNVWRLGHQWLI\SRWHQWLDOLPSDFWVRIFOLPDWHUHODWHGSROLFLHVZKLFKRIWHQWDUJHW
VSHFLILFVHFWRUV,WHVWLPDWHVSRWHQWLDOLPSDFWVRIWKHVHSROLFLHVRQFRQVXPHUHQHUJ\GHPDQGE\XVLQJYDULRXVDVVXPSWLRQVDQGWRROV
±LQFOXGLQJGHSHQGLQJRQWKHVHFWRUDSSOLFDWLRQRIDSUR[\FRVWRIFDUERQRUDVVHVVPHQWRIWDUJHWHGSROLFLHVHJDXWRPRWLYHIXHO
HFRQRP\VWDQGDUGV)RUSXUSRVHVRIWKH2XWORRNDSUR[\FRVWRQHQHUJ\UHODWHG&2HPLVVLRQVLVDVVXPHGWRUHDFKDERXWSHU
WRQQH RQ DYHUDJH LQ  LQ 2(&' QDWLRQV &KLQD DQG RWKHU OHDGLQJ QRQ2(&' QDWLRQV DUH H[SHFWHG WR WUDLO 2(&' SROLF\
LQLWLDWLYHV1HYHUWKHOHVVDVSHRSOHDQGQDWLRQVORRNIRUZD\VWRUHGXFHULVNVRIJOREDOFOLPDWHFKDQJHWKH\ZLOOFRQWLQXHWRQHHG
SUDFWLFDOVROXWLRQVWKDWGRQRWMHRSDUGL]HWKHDIIRUGDELOLW\RUUHOLDELOLW\RIWKHHQHUJ\WKH\QHHG
3UDFWLFDOVROXWLRQVWRWKHZRUOG¶VHQHUJ\DQGFOLPDWHFKDOOHQJHVZLOOEHQHILWIURPPDUNHWFRPSHWLWLRQDVZHOODVZHOOLQIRUPHG
ZHOOGHVLJQHGDQGWUDQVSDUHQWSROLF\DSSURDFKHVWKDWFDUHIXOO\ZHLJKFRVWVDQGEHQHILWV6XFKSROLFLHVDUHOLNHO\WRKHOSPDQDJH
WKHULVNVRIFOLPDWHFKDQJHZKLOHDOVRHQDEOLQJVRFLHWLHVWRSXUVXHRWKHUKLJKSULRULW\JRDOVDURXQGWKHZRUOG±LQFOXGLQJFOHDQDLU
DQGZDWHUDFFHVVWRUHOLDEOHDIIRUGDEOHHQHUJ\DQGHFRQRPLFSURJUHVVIRUDOOSHRSOH$OOSUDFWLFDODQGHFRQRPLFDOO\YLDEOHHQHUJ\
VRXUFHVERWKFRQYHQWLRQDODQGXQFRQYHQWLRQDOZLOOQHHGWREHSXUVXHGWRFRQWLQXHPHHWLQJJOREDOHQHUJ\GHPDQGUHFRJQL]LQJ
WKHVFDOHDQGYDULHW\RIZRUOGZLGHHQHUJ\QHHGVDVZHOODVWKHLPSRUWDQFHRIH[SDQGLQJDFFHVVWRPRGHUQHQHUJ\WRSURPRWHEHWWHU
VWDQGDUGVRIOLYLQJIRUELOOLRQVRISHRSOH
7KHLQIRUPDWLRQSURYLGHGLQWKH/RQJ7HUP%XVLQHVV2XWORRNLQFOXGHV([[RQ0RELO¶VLQWHUQDOHVWLPDWHVDQGIRUHFDVWVEDVHGXSRQ
LQWHUQDO GDWD DQG DQDO\VHV DV ZHOO DV SXEOLFO\ DYDLODEOH LQIRUPDWLRQ IURP H[WHUQDO VRXUFHV LQFOXGLQJ WKH ,QWHUQDWLRQDO (QHUJ\
$JHQF\

8SVWUHDP
([[RQ0RELO FRQWLQXHV WR VXVWDLQ D GLYHUVH JURZWK SRUWIROLR RI H[SORUDWLRQ DQG GHYHORSPHQW RSSRUWXQLWLHV ZKLFK HQDEOHV WKH
&RUSRUDWLRQWREHVHOHFWLYHPD[LPL]LQJVKDUHKROGHUYDOXHDQGPLWLJDWLQJSROLWLFDODQGWHFKQLFDOULVNV([[RQ0RELO¶VIXQGDPHQWDO
VWUDWHJLHVJXLGHRXUJOREDO8SVWUHDPEXVLQHVVLQFOXGLQJFDSWXULQJPDWHULDODQGDFFUHWLYHRSSRUWXQLWLHVWRFRQWLQXDOO\KLJKJUDGH
WKH UHVRXUFH SRUWIROLR VHOHFWLYHO\ GHYHORSLQJ DWWUDFWLYH RLO DQG QDWXUDO JDV UHVRXUFHV GHYHORSLQJ DQG DSSO\LQJ KLJKLPSDFW
WHFKQRORJLHVDQGSXUVXLQJSURGXFWLYLW\DQGHIILFLHQF\JDLQV7KHVHVWUDWHJLHVDUHXQGHUSLQQHGE\DUHOHQWOHVVIRFXVRQRSHUDWLRQDO
H[FHOOHQFHGHYHORSPHQWRIRXUHPSOR\HHVDQGLQYHVWPHQWLQWKHFRPPXQLWLHVZLWKLQZKLFKZHRSHUDWH
$VIXWXUHGHYHORSPHQWSURMHFWVDQGGULOOLQJDFWLYLWLHVEULQJQHZSURGXFWLRQRQOLQHWKH&RUSRUDWLRQH[SHFWVDVKLIWLQWKHJHRJUDSKLF
PL[DQGLQWKHW\SHRIRSSRUWXQLWLHVIURPZKLFKYROXPHVDUHSURGXFHG%DVHGRQFXUUHQWLQYHVWPHQWSODQVRLOHTXLYDOHQWSURGXFWLRQ
IURPWKH$PHULFDVLVH[SHFWHGWRLQFUHDVHWREHDPDMRULW\RIWRWDOSURGXFWLRQRYHUWKHQH[WVHYHUDO\HDUV)XUWKHUWKHSURSRUWLRQ
RIRXUJOREDOSURGXFWLRQIURPXQFRQYHQWLRQDOGHHSZDWHUDQG/1*UHVRXUFHW\SHVFXUUHQWO\FRQWULEXWHVRYHUDWKLUGRIJOREDO
SURGXFWLRQDQGLVH[SHFWHGWRJURZWREHPRUHWKDQKDOILQWKHQH[WIHZ\HDUV
 


0$1$*(0(17¶6',6&866,21$1'$1$/<6,62)),1$1&,$/&21',7,21$1'5(68/762)23(5$7,216

7KH&RUSRUDWLRQDQWLFLSDWHVVHYHUDOSURMHFWVZLOOFRPHRQOLQHRYHUWKHQH[WIHZ\HDUVSURYLGLQJDGGLWLRQDOSURGXFWLRQFDSDFLW\
+RZHYHUDFWXDOYROXPHVZLOOYDU\IURP\HDUWR\HDUGXHWRWKHWLPLQJRILQGLYLGXDOSURMHFWVWDUWXSVRSHUDWLRQDORXWDJHVUHVHUYRLU
SHUIRUPDQFHSHUIRUPDQFHRIHQKDQFHGRLOUHFRYHU\SURMHFWVUHJXODWRU\FKDQJHVWKHLPSDFWRIILVFDODQGFRPPHUFLDOWHUPVDVVHW
VDOHVZHDWKHUHYHQWVSULFHHIIHFWVRQSURGXFWLRQVKDULQJFRQWUDFWVFKDQJHVLQWKHDPRXQWDQGWLPLQJRIFDSLWDOLQYHVWPHQWVWKDW
PD\YDU\GHSHQGLQJRQWKHRLODQGJDVSULFHHQYLURQPHQWDQGRWKHUIDFWRUVGHVFULEHGLQ,WHP$5LVN)DFWRUVRI([[RQ0RELO¶V
)RUP.
7KHPDUNHWVIRUFUXGHRLODQGQDWXUDOJDVKDYHDKLVWRU\RIVLJQLILFDQWSULFHYRODWLOLW\([[RQ0RELOEHOLHYHVSULFHVRYHUWKHORQJ
WHUPZLOOFRQWLQXHWREHGULYHQE\PDUNHWVXSSO\DQGGHPDQGZLWKWKHGHPDQGVLGHODUJHO\EHLQJDIXQFWLRQRIJHQHUDOHFRQRPLF
DFWLYLWLHVOHYHOVRISURVSHULW\WHFKQRORJ\DGYDQFHVFRQVXPHUSUHIHUHQFHDQGJRYHUQPHQWSROLFLHV2QWKHVXSSO\VLGHSULFHVPD\
EHVLJQLILFDQWO\LPSDFWHGE\SROLWLFDOHYHQWVWKHDFWLRQVRI23(&DQGRWKHUODUJHJRYHUQPHQWUHVRXUFHRZQHUVDQGRWKHUIDFWRUV
7R PDQDJH WKH ULVNV DVVRFLDWHG ZLWK SULFH ([[RQ0RELO HYDOXDWHV DQQXDO SODQV DQG PDMRU LQYHVWPHQWV DFURVV D UDQJH RI SULFH
VFHQDULRV
,QWKH8SVWUHDPEXVLQHVVSURGXFHGPLOOLRQRLOHTXLYDOHQWEDUUHOVSHUGD\'XULQJWKH\HDUWKH&RUSRUDWLRQDGGHG
ELOOLRQRLOHTXLYDOHQWEDUUHOVRISURYHGUHVHUYHV7KH&RUSRUDWLRQFRQWLQXHGWRKDYHH[SORUDWLRQVXFFHVVLQ*X\DQDDQGDOVRPDGH
VWUDWHJLFDFUHDJHDFTXLVLWLRQVLQ0R]DPELTXH%UD]LO3DSXD1HZ*XLQHDDQG86WLJKWRLO

'RZQVWUHDP
([[RQ0RELO¶V'RZQVWUHDPLVDODUJHGLYHUVLILHGEXVLQHVVZLWKJOREDOORJLVWLFVWUDGLQJUHILQLQJDQGPDUNHWLQJ7KH&RUSRUDWLRQ
KDVDSUHVHQFHZLWKHVWDEOLVKHGPDUNHWVLQWKH$PHULFDVDQG(XURSHDVZHOODVLQWKHJURZLQJ$VLD3DFLILFUHJLRQ
([[RQ0RELO¶V IXQGDPHQWDO 'RZQVWUHDP EXVLQHVV VWUDWHJLHV FRPSHWLWLYHO\ SRVLWLRQ WKH FRPSDQ\ DFURVV D UDQJH RI PDUNHW
FRQGLWLRQV7KHVHVWUDWHJLHVLQFOXGHWDUJHWLQJEHVWLQFODVVRSHUDWLRQVLQDOODVSHFWVRIWKHEXVLQHVVPD[LPL]LQJYDOXHIURPDGYDQFHG
WHFKQRORJLHV FDSLWDOL]LQJ RQ LQWHJUDWLRQ DFURVV ([[RQ0RELO EXVLQHVVHV VHOHFWLYHO\ LQYHVWLQJ IRU UHVLOLHQW DGYDQWDJHG UHWXUQV
RSHUDWLQJHIILFLHQWO\DQGHIIHFWLYHO\DQGSURYLGLQJTXDOLW\YDOXHGDQGGLIIHUHQWLDWHGSURGXFWVDQGVHUYLFHVWRFXVWRPHUV
([[RQ0RELO¶VRSHUDWLQJUHVXOWVDVQRWHGLQ,WHP3URSHUWLHVRI([[RQ0RELO¶V)RUP.UHIOHFWUHILQHULHVORFDWHGLQ
FRXQWULHVZLWKGLVWLOODWLRQFDSDFLW\RIPLOOLRQEDUUHOVSHUGD\DQGOXEULFDQWEDVHVWRFNPDQXIDFWXULQJFDSDFLW\RIWKRXVDQG
EDUUHOVSHUGD\([[RQ0RELO¶VIXHOVDQGOXEHVYDOXHFKDLQVKDYHVLJQLILFDQWJOREDOUHDFKZLWKPXOWLSOHFKDQQHOVWRPDUNHWVHUYLQJ
DGLYHUVHFXVWRPHUEDVH2XUSRUWIROLRRIZRUOGUHQRZQHGEUDQGVLQFOXGHV([[RQ0RELO(VVR6\QHUJ\DQG0RELO
'HPDQG IRU SURGXFWV FRQWLQXHG WR JURZ LQ  1RUWK $PHULFD¶V PDUJLQV VWUHQJWKHQHG DQG UHILQHULHV ZLWKLQ WKH UHJLRQ DOVR
EHQHILWWHGIURPFUXGHGLIIHUHQWLDOVDVVRFLDWHGZLWKWKH3HUPLDQ%DVLQDQG:HVWHUQ&DQDGD0DUJLQVLQ(XURSHDQG$VLDZHDNHQHG
XQGHUSUHVVXUHIURPORZHUFRVWSURGXFWLRQIURP1RUWK$PHULFDDQGLQFUHDVHGSURGXFWH[SRUWVIURP&KLQD,QWKHQHDUWHUPZHVHH
YDULDELOLW\ LQ UHILQLQJ PDUJLQV DV QHZ FDSDFLW\ DGGLWLRQV DUH H[SHFWHG WR RXWSDFH FDSDFLW\ UDWLRQDOL]DWLRQ DQG JURZWK LQ JOREDO
GHPDQGZKLFKFDQDOVREHDIIHFWHGE\JOREDOHFRQRPLFFRQGLWLRQVDQGUHJXODWRU\FKDQJHV
5HILQLQJPDUJLQVDUHODUJHO\GULYHQE\GLIIHUHQFHVLQFRPPRGLW\SULFHVDQGDUHDIXQFWLRQRIWKHGLIIHUHQFHEHWZHHQZKDWDUHILQHU\
SD\VIRULWVUDZPDWHULDOVSULPDULO\FUXGHRLODQGWKHPDUNHWSULFHVIRUWKHUDQJHRISURGXFWVSURGXFHGSULPDULO\JDVROLQHKHDWLQJ
RLOGLHVHORLOMHWIXHODQGIXHORLO&UXGHRLODQGPDQ\SURGXFWVDUHZLGHO\WUDGHGZLWKSXEOLVKHGSULFHVLQFOXGLQJWKRVHTXRWHG
RQPXOWLSOHH[FKDQJHVDURXQGWKHZRUOGHJ1HZ<RUN0HUFDQWLOH([FKDQJHDQG,QWHUFRQWLQHQWDO([FKDQJH3ULFHVIRUWKHVH
FRPPRGLWLHV DUH GHWHUPLQHG E\ WKH JOREDO PDUNHWSODFH DQG DUH LQIOXHQFHG E\ PDQ\ IDFWRUV LQFOXGLQJ JOREDO DQG UHJLRQDO
VXSSO\GHPDQG EDODQFHV LQYHQWRU\ OHYHOV LQGXVWU\ UHILQHU\ RSHUDWLRQV LPSRUWH[SRUW EDODQFHV FXUUHQF\ IOXFWXDWLRQV VHDVRQDO
GHPDQGZHDWKHUDQGSROLWLFDOFOLPDWH
([[RQ0RELO¶VORQJWHUPRXWORRNLVWKDWLQGXVWU\UHILQLQJPDUJLQVZLOOUHPDLQYRODWLOHVXEMHFWWRWKHSDFHRIQHZFDSDFLW\JURZWK
UHODWLYH WR JOREDO GHPDQG JURZWK ([[RQ0RELO¶V LQWHJUDWLRQ LQFOXGLQJ ORJLVWLFV WUDGLQJ UHILQLQJ DQG PDUNHWLQJ HQKDQFHV RXU
DELOLW\WRJHQHUDWHUHWXUQVDFURVVWKHYDOXHFKDLQLQERWKIXHOVDQGOXEULFDQWVEXVLQHVVHV
$VGHVFULEHGLQPRUHGHWDLOLQ,WHP$5LVN)DFWRUVRI([[RQ0RELO¶V)RUP.SURSRVHGFDUERQSROLF\DQGRWKHUFOLPDWH
UHODWHGUHJXODWLRQVLQPDQ\FRXQWULHVDVZHOODVWKHFRQWLQXHGJURZWKLQELRIXHOVPDQGDWHVFRXOGKDYHQHJDWLYHLPSDFWVRQWKH
'RZQVWUHDPEXVLQHVV


0$1$*(0(17¶6',6&866,21$1'$1$/<6,62)),1$1&,$/&21',7,21$1'5(68/762)23(5$7,216

([[RQ0RELOFRQWLQXHGWRSURJUHVVWKHPXOWL\HDUWUDQVLWLRQRIWKHGLUHFWVHUYHGLHGHDOHUFRPSDQ\RSHUDWHGUHWDLOQHWZRUNLQ
SRUWLRQVRI(XURSHWRDPRUHFDSLWDOHIILFLHQW%UDQGHG:KROHVDOHUPRGHO7KHOXEULFDQWVEXVLQHVVFRQWLQXHVWRJURZOHYHUDJLQJ
ZRUOGFODVVEUDQGVDQGLQWHJUDWLRQZLWKLQGXVWU\OHDGLQJEDVHVWRFNUHILQLQJFDSDELOLW\7KURXJKWKH0RELO%UDQGHGSURSHUWLHVVXFK
DV0RELO0RELOLVWKHZRUOGZLGHOHDGHUDPRQJV\QWKHWLFPRWRUVRLOV
7KH'RZQVWUHDPSRUWIROLRLVFRQWLQXDOO\HYDOXDWHGGXULQJDOOSDUWVRIWKHEXVLQHVVF\FOHDQGQXPHURXVDVVHWGLYHVWPHQWVKDYH
EHHQ PDGH RYHU WKH SDVW GHFDGH :KHQ LQYHVWLQJ LQ WKH 'RZQVWUHDP ([[RQ0RELO UHPDLQV IRFXVHG RQ VHOHFWLYH DQG UHVLOLHQW
SURMHFWV$WWKHHQGRIWKUHHNH\SURMHFWVDUHLQRSHUDWLRQZLWKWKHQHZGHOD\HGFRNHUXQLWDWWKHUHILQHU\LQ$QWZHUS%HOJLXP
WRXSJUDGHORZYDOXHEXQNHUIXHOLQWRKLJKHUYDOXHGLHVHOSURGXFWVDQGWKHSURSULHWDU\K\GURFUDFNHUDWWKHUHILQHU\LQ5RWWHUGDP
1HWKHUODQGVWRSURGXFHKLJKHUYDOXHXOWUDORZVXOIXUGLHVHODQG*URXS,,EDVHVWRFNV)LQDOO\WKHQHZK\GURILQHUDWWKH%HDXPRQW
7H[DVUHILQHU\ZDVFRPSOHWHGZKLFKLQFUHDVHVSURGXFWLRQRIXOWUDORZVXOIXUIXHOVE\DSSUR[LPDWHO\EDUUHOVSHUGD\

&KHPLFDO
([[RQ0RELOLVDPDMRUPDQXIDFWXUHUDQGPDUNHWHURISHWURFKHPLFDOVDQGDZLGHYDULHW\RIVSHFLDOW\SURGXFWV([[RQ0RELOVXVWDLQV
LWV FRPSHWLWLYH DGYDQWDJH WKURXJK FRQWLQXHG RSHUDWLRQDO H[FHOOHQFH LQYHVWPHQW DQG FRVW GLVFLSOLQH D EDODQFHG SRUWIROLR RI
SURGXFWVDQGLQWHJUDWLRQZLWKGRZQVWUHDPDQGXSVWUHDPRSHUDWLRQVDOOXQGHUSLQQHGE\SURSULHWDU\WHFKQRORJ\
'HPDQG IRU SURGXFWV FRQWLQXHG WR JURZ LQ  3RO\ROHILQ DQG VSHFLDOW\ SURGXFW PDUJLQV ZHDNHQHG ZLWK FDSDFLW\ DGGLWLRQV
RXWSDFLQJJOREDOGHPDQGJURZWK
2YHUWKHORQJWHUPGHPDQGIRUFKHPLFDOSURGXFWVLVIRUHFDVWWRRXWSDFHJURZWKLQJOREDO*'3DQGHQHUJ\GHPDQGIRUWKHQH[W
WZRGHFDGHV([[RQ0RELOHVWLPDWHVWKDWJOREDOGHPDQGIRUFKHPLFDOVZLOOULVHE\DSSUR[LPDWHO\SHUFHQWRYHUWKHQH[WGHFDGH
([[RQ0RELO¶VLQWHJUDWLRQZLWKUHILQLQJHQKDQFHVRXUDELOLW\WRJHQHUDWHUHWXUQVDFURVVWKHYDOXHFKDLQLQFKHPLFDOEXVLQHVVHV
,QZHFRPSOHWHGVWDUWXSRIWKHQHZZRUOGVFDOHHWKDQHFUDFNHULQ%D\WRZQ7H[DVWKHVSHFLDOW\HODVWRPHUSODQWH[SDQVLRQ
LQ1HZSRUW:DOHVDQGWKHQHZKDOREXW\OUXEEHUXQLWLQ6LQJDSRUHWRIXUWKHUH[WHQGRXUVSHFLDOW\SURGXFWFDSDFLW\&RQVWUXFWLRQ
FRQWLQXHV RQ WKH H[SDQVLRQ RI WKH SRO\HWK\OHQH SODQW LQ %HDXPRQW 7H[DV ZLWK VWDUWXS DQWLFLSDWHG LQ  WR FDSLWDOL]H RQ
DGYDQWDJHGIHHGVWRFNDQGHQHUJ\VXSSOLHVLQ1RUWK$PHULFDDQGWRPHHWUDSLGO\JURZLQJGHPDQGIRUSHUIRUPDQFHSRO\PHUV:RUN
FRQWLQXHVWRLQWHJUDWHWKH6LQJDSRUH%DQ\DQ$URPDWLFVXQLWDFTXLUHGLQZLWKRXURWKHU6LQJDSRUHIDFLOLWLHVWRPHHWJURZLQJ
GHPDQGIRUFKHPLFDOVSURGXFWVLQ$VLD3DFLILF,QDGGLWLRQ([[RQ0RELODQQRXQFHGSODQVIRUDIOH[LEOHIHHGFUDFNHULQ*XDQJGRQJ
3URYLQFH&KLQDDQGDMRLQWYHQWXUHHWKDQHFUDFNHUDQGDVVRFLDWHGSURGXFWV ZLWK6$%,&WREHORFDWHGLQ6DQ3DWULFLR&RXQW\
7H[DV


0$1$*(0(17¶6',6&866,21$1'$1$/<6,62)),1$1&,$/&21',7,21$1'5(68/762)23(5$7,216

5(9,(:2)$1'5(68/76   
      
  PLOOLRQVRIGROODUV
(DUQLQJV86*$$3      
1HWLQFRPHDWWULEXWDEOHWR([[RQ0RELO86*$$3   


8SVWUHDP      
        
    PLOOLRQVRIGROODUV
8SVWUHDP      
 8QLWHG6WDWHV   
 1RQ86   
  7RWDO   


8SVWUHDPHDUQLQJVZHUHPLOOLRQXSPLOOLRQIURP
x +LJKHUUHDOL]DWLRQVLQFUHDVHGHDUQLQJVE\ELOOLRQ
x 8QIDYRUDEOHYROXPHDQGPL[HIIHFWVGHFUHDVHGHDUQLQJVE\PLOOLRQ
x $OORWKHULWHPVGHFUHDVHGHDUQLQJVE\ELOOLRQSULPDULO\GXHWRORZHUIDYRUDEOHLPSDFWVRIELOOLRQIURP86WD[
UHIRUPSDUWO\RIIVHWE\ORZHUDVVHWLPSDLUPHQWVRIELOOLRQ
x 868SVWUHDPHDUQLQJVZHUHPLOOLRQLQFOXGLQJDVVHWLPSDLUPHQWVRIPLOOLRQ
x 1RQ868SVWUHDPHDUQLQJVZHUHPLOOLRQLQFOXGLQJDIDYRUDEOHLPSDFWRIPLOOLRQIURP86WD[UHIRUP
x 2QDQRLOHTXLYDOHQWEDVLVSURGXFWLRQRIPLOOLRQEDUUHOVSHUGD\ZDVGRZQSHUFHQWFRPSDUHGWR
x /LTXLGVSURGXFWLRQRIPLOOLRQEDUUHOVSHUGD\GHFUHDVHGEDUUHOVSHUGD\DVJURZWKLQ1RUWK$PHULFDZDVPRUH
WKDQRIIVHWE\GHFOLQHORZHUHQWLWOHPHQWVDQGGLYHVWPHQWV
x 1DWXUDOJDVSURGXFWLRQRIELOOLRQFXELFIHHWSHUGD\GHFUHDVHGPLOOLRQFXELFIHHWSHUGD\IURPGXHWRGHFOLQH
ORZHUHQWLWOHPHQWVGLYHVWPHQWVDQGKLJKHUGRZQWLPH


8SVWUHDPHDUQLQJVZHUHPLOOLRQXSPLOOLRQIURP
x +LJKHUUHDOL]DWLRQVLQFUHDVHGHDUQLQJVE\ELOOLRQ
x 8QIDYRUDEOHYROXPHDQGPL[HIIHFWVGHFUHDVHGHDUQLQJVE\PLOOLRQ
x $OORWKHULWHPVLQFUHDVHGHDUQLQJVE\ELOOLRQSULPDULO\GXHWRWKHELOOLRQQRQFDVKLPSDFWIURP86WD[UHIRUP
ORZHUDVVHWLPSDLUPHQWVRIPLOOLRQORZHUH[SHQVHVDQGJDLQVIURPDVVHWPDQDJHPHQWDFWLYLW\
x 86 8SVWUHDP HDUQLQJV ZHUH PLOOLRQ LQ  LQFOXGLQJ ELOOLRQ RI 86 WD[ UHIRUP EHQHILWV DQG DVVHW
LPSDLUPHQWVRIPLOOLRQ
x 1RQ868SVWUHDPHDUQLQJVZHUHPLOOLRQLQFOXGLQJDVVHWLPSDLUPHQWVRIPLOOLRQDQGXQIDYRUDEOHLPSDFWV
RIPLOOLRQIURP86WD[UHIRUP
x 2QDQRLOHTXLYDOHQWEDVLVSURGXFWLRQRIPLOOLRQEDUUHOVSHUGD\ZDVGRZQSHUFHQWFRPSDUHGWR
x /LTXLGVSURGXFWLRQRIPLOOLRQEDUUHOVSHUGD\GHFUHDVHGEDUUHOVSHUGD\DVILHOGGHFOLQHDQGORZHUHQWLWOHPHQWV
ZHUHSDUWO\RIIVHWE\LQFUHDVHGSURMHFWYROXPHVDQGZRUNSURJUDPV
x 1DWXUDOJDVSURGXFWLRQRIELOOLRQFXELFIHHWSHUGD\LQFUHDVHGPLOOLRQFXELFIHHW SHUGD\IURPDVSURMHFW
UDPSXSSULPDULO\LQ$XVWUDOLDZDVSDUWO\RIIVHWE\ILHOGGHFOLQHDQGUHJXODWRU\UHVWULFWLRQVLQWKH1HWKHUODQGV


0$1$*(0(17¶6',6&866,21$1'$1$/<6,62)),1$1&,$/&21',7,21$1'5(68/762)23(5$7,216

8SVWUHDP$GGLWLRQDO,QIRUPDWLRQ      
       
    WKRXVDQGVRIEDUUHOVGDLO\
9ROXPHV5HFRQFLOLDWLRQ2LOHTXLYDOHQWSURGXFWLRQ    
3ULRU<HDU      
 (QWLWOHPHQWV1HW,QWHUHVW     
 (QWLWOHPHQWV3ULFH6SHQG2WKHU     
 4XRWDV      
 'LYHVWPHQWV     
 *URZWK2WKHU     
&XUUHQW<HDU      
       
1DWXUDOJDVLVFRQYHUWHGWRDQRLOHTXLYDOHQWEDVLVDWVL[PLOOLRQFXELFIHHWSHURQHWKRXVDQGEDUUHOV

/LVWHGEHORZDUHGHVFULSWLRQVRI([[RQ0RELO¶VYROXPHVUHFRQFLOLDWLRQIDFWRUVZKLFKDUHSURYLGHGWRIDFLOLWDWHXQGHUVWDQGLQJRIWKH
WHUPV

(QWLWOHPHQWV  1HW ,QWHUHVW DUH FKDQJHV WR ([[RQ0RELO¶V VKDUH RI SURGXFWLRQ YROXPHV FDXVHG E\ QRQRSHUDWLRQDO FKDQJHV WR
YROXPHGHWHUPLQLQJIDFWRUV7KHVHIDFWRUVFRQVLVWRIQHWLQWHUHVWFKDQJHVVSHFLILHGLQ3URGXFWLRQ6KDULQJ&RQWUDFWV36&VZKLFK
W\SLFDOO\RFFXU ZKHQFXPXODWLYHLQYHVWPHQWUHWXUQVRUSURGXFWLRQYROXPHVDFKLHYHGHILQHGWKUHVKROGVFKDQJHVLQHTXLW\ XSRQ
DFKLHYLQJSD\RXWLQSDUWQHULQYHVWPHQWFDUU\VLWXDWLRQVHTXLW\UHGHWHUPLQDWLRQVDVVSHFLILHGLQYHQWXUHDJUHHPHQWVRUDVDUHVXOW
RIWKHWHUPLQDWLRQRUH[SLU\RIDFRQFHVVLRQ2QFHDQHWLQWHUHVWFKDQJHKDVRFFXUUHGLWW\SLFDOO\ZLOOQRWEHUHYHUVHGE\VXEVHTXHQW
HYHQWVVXFKDVORZHUFUXGHRLOSULFHV

(QWLWOHPHQWV3ULFH6SHQGDQG2WKHUDUHFKDQJHVWR([[RQ0RELO¶VVKDUHRISURGXFWLRQYROXPHVUHVXOWLQJIURPWHPSRUDU\FKDQJHV
WRQRQRSHUDWLRQDOYROXPHGHWHUPLQLQJIDFWRUV7KHVHIDFWRUVLQFOXGHFKDQJHVLQRLODQGJDVSULFHVRUVSHQGLQJOHYHOVIURPRQH
SHULRGWRDQRWKHU$FFRUGLQJWRWKHWHUPVRIFRQWUDFWXDODUUDQJHPHQWVRUJRYHUQPHQWUR\DOW\UHJLPHVSULFHRUVSHQGLQJYDULDELOLW\
FDQLQFUHDVHRUGHFUHDVHUR\DOW\EXUGHQVDQGRUYROXPHVDWWULEXWDEOHWR([[RQ0RELO)RUH[DPSOHDWKLJKHUSULFHVIHZHUEDUUHOV
DUHUHTXLUHGIRU([[RQ0RELOWRUHFRYHULWVFRVWV7KHVHHIIHFWVJHQHUDOO\YDU\IURPSHULRGWRSHULRGZLWKILHOGVSHQGLQJSDWWHUQVRU
PDUNHWSULFHVIRURLODQGQDWXUDOJDV6XFKIDFWRUVFDQDOVRLQFOXGHRWKHUWHPSRUDU\FKDQJHVLQQHWLQWHUHVWDVGLFWDWHGE\VSHFLILF
SURYLVLRQVLQSURGXFWLRQDJUHHPHQWV

4XRWDVDUHFKDQJHVLQ([[RQ0RELO¶VDOORZDEOHSURGXFWLRQDULVLQJIURPSURGXFWLRQFRQVWUDLQWVLPSRVHGE\FRXQWULHVZKLFKDUH
PHPEHUVRIWKH2UJDQL]DWLRQRIWKH3HWUROHXP([SRUWLQJ&RXQWULHV23(&9ROXPHVUHSRUWHGLQWKLVFDWHJRU\ZRXOGKDYHEHHQ
UHDGLO\SURGXFLEOHLQWKHDEVHQFHRIWKHTXRWD

'LYHVWPHQWVDUHUHGXFWLRQVLQ([[RQ0RELO¶VSURGXFWLRQDULVLQJIURPFRPPHUFLDODUUDQJHPHQWVWRIXOO\RUSDUWLDOO\UHGXFHHTXLW\
LQDILHOGRUDVVHWLQH[FKDQJHIRUILQDQFLDORURWKHUHFRQRPLFFRQVLGHUDWLRQ

*URZWKDQG2WKHUIDFWRUVFRPSULVHDOORWKHURSHUDWLRQDODQGQRQRSHUDWLRQDOIDFWRUVQRWFRYHUHGE\WKHDERYHGHILQLWLRQVWKDWPD\
DIIHFWYROXPHVDWWULEXWDEOHWR([[RQ0RELO6XFKIDFWRUVLQFOXGHEXWDUHQRWOLPLWHGWRSURGXFWLRQHQKDQFHPHQWVIURPSURMHFWDQG
ZRUNSURJUDPDFWLYLWLHVDFTXLVLWLRQVLQFOXGLQJDGGLWLRQVIURPDVVHWH[FKDQJHVGRZQWLPHPDUNHWGHPDQGQDWXUDOILHOGGHFOLQH
DQGDQ\ILVFDORUFRPPHUFLDOWHUPVWKDWGRQRWDIIHFWHQWLWOHPHQWV


0$1$*(0(17¶6',6&866,21$1'$1$/<6,62)),1$1&,$/&21',7,21$1'5(68/762)23(5$7,216

'RZQVWUHDP  
        
    PLOOLRQVRIGROODUV
'RZQVWUHDP      
 8QLWHG6WDWHV   
 1RQ86   
  7RWDO   


'RZQVWUHDPHDUQLQJVRIPLOOLRQLQFUHDVHGPLOOLRQIURP
x 0DUJLQVLQFUHDVHGHDUQLQJVE\PLOOLRQSULPDULO\GXHWRWKHFDSWXUHRI1RUWK$PHULFDQFUXGHGLIIHUHQWLDOV
x 9ROXPHDQGPL[HIIHFWVLQFUHDVHGHDUQLQJVE\PLOOLRQGXHWRLPSURYHG\LHOGVDOHVPL[
x $OORWKHULWHPVGHFUHDVHGHDUQLQJVE\PLOOLRQPDLQO\GULYHQE\WKHDEVHQFHRIIDYRUDEOH86WD[UHIRUPLPSDFWVRI
PLOOLRQXQIDYRUDEOHIRUHLJQH[FKDQJHLPSDFWVDQGKLJKHUGRZQWLPHPDLQWHQDQFHSDUWO\RIIVHWE\KLJKHUGLYHVWPHQW
JDLQVDQGIDYRUDEOHWD[LPSDFWV
x 86'RZQVWUHDPHDUQLQJVZHUHPLOOLRQFRPSDUHGWRPLOOLRQLQWKHSULRU\HDUZKLFKLQFOXGHGDIDYRUDEOH
LPSDFWRIPLOOLRQIURP86WD[UHIRUP
x 1RQ86'RZQVWUHDPHDUQLQJVZHUHPLOOLRQFRPSDUHGWRPLOOLRQLQWKHSULRU\HDU
x 3HWUROHXPSURGXFWVDOHVRIPLOOLRQEDUUHOVSHUGD\ZHUHEDUUHOVSHUGD\ORZHUWKDQ


'RZQVWUHDPHDUQLQJVRIPLOOLRQLQFUHDVHGPLOOLRQIURP
x 6WURQJHUUHILQLQJDQGPDUNHWLQJPDUJLQVLQFUHDVHGHDUQLQJVE\ELOOLRQ
x 9ROXPHDQGPL[HIIHFWVGHFUHDVHGHDUQLQJVE\PLOOLRQ
x $OORWKHULWHPVGHFUHDVHGHDUQLQJVE\PLOOLRQGULYHQE\WKHDEVHQFHRIDPLOOLRQJDLQIURPWKH&DQDGLDQUHWDLO
DVVHWVVDOHDQG+XUULFDQH+DUYH\UHODWHGH[SHQVHVZKLFKZHUHPRVWO\RIIVHWE\PLOOLRQRI86WD[UHIRUPLPSDFWV
DQGQRQ86DVVHWPDQDJHPHQWJDLQVLQ
x 86'RZQVWUHDPHDUQLQJVZHUHPLOOLRQLQFOXGLQJIDYRUDEOH86WD[UHIRUPLPSDFWVRIPLOOLRQ
x 1RQ86'RZQVWUHDPHDUQLQJVZHUHPLOOLRQFRPSDUHGWRPLOOLRQLQWKHSULRU\HDU
x 3HWUROHXPSURGXFWVDOHVRIPLOOLRQEDUUHOVSHUGD\ZHUHEDUUHOVSHUGD\KLJKHUWKDQ



0$1$*(0(17¶6',6&866,21$1'$1$/<6,62)),1$1&,$/&21',7,21$1'5(68/762)23(5$7,216

&KHPLFDO  
        
    PLOOLRQVRIGROODUV
&KHPLFDO      
 8QLWHG6WDWHV   
 1RQ86   
  7RWDO   


&KHPLFDOHDUQLQJVRIPLOOLRQGHFUHDVHGPLOOLRQIURP
x :HDNHUPDUJLQVGHFUHDVHGHDUQLQJVE\PLOOLRQ
x 9ROXPHDQGPL[HIIHFWVLQFUHDVHGHDUQLQJVE\PLOOLRQSULPDULO\GXHWRVDOHVJURZWK
x $OORWKHULWHPVGHFUHDVHGHDUQLQJVE\PLOOLRQSULPDULO\GXHWRWKHDEVHQFHRIIDYRUDEOHLPSDFWVIURP86WD[UHIRUP
RIPLOOLRQKLJKHUGRZQWLPHPDLQWHQDQFHDQGJURZWKUHODWHGH[SHQVHVSDUWO\RIIVHWE\DIDYRUDEOHWD[LWHPDQG
IDYRUDEOHIRUHLJQH[FKDQJHLPSDFWV
x 86&KHPLFDOHDUQLQJVZHUHPLOOLRQLQFRPSDUHGZLWKPLOOLRQLQWKHSULRU\HDUZKLFKLQFOXGHG
PLOOLRQLQIDYRUDEOHLPSDFWVIURP86WD[UHIRUP
x 1RQ86&KHPLFDOHDUQLQJVZHUHPLOOLRQFRPSDUHGZLWKPLOOLRQLQWKHSULRU\HDU
x 3ULPHSURGXFWVDOHVRIPLOOLRQPHWULFWRQVZHUHXSPLOOLRQPHWULFWRQVIURP


&KHPLFDOHDUQLQJVRIPLOOLRQGHFUHDVHGPLOOLRQIURP
x :HDNHUPDUJLQVGHFUHDVHGHDUQLQJVE\PLOOLRQ
x 9ROXPHDQGPL[HIIHFWVLQFUHDVHGHDUQLQJVE\PLOOLRQ
x $OORWKHULWHPVLQFUHDVHGHDUQLQJVE\PLOOLRQSULPDULO\GXHWR86WD[UHIRUPRIPLOOLRQDQGLPSURYHGLQYHQWRU\
HIIHFWVSDUWLDOO\RIIVHWE\KLJKHUH[SHQVHVIURPLQFUHDVHGWXUQDURXQGDFWLYLW\DQGQHZEXVLQHVVJURZWK
x 86&KHPLFDOHDUQLQJVZHUHPLOOLRQLQLQFOXGLQJIDYRUDEOH86WD[UHIRUPLPSDFWVRIPLOOLRQ
x 1RQ86&KHPLFDOHDUQLQJVRIPLOOLRQZHUHPLOOLRQORZHUWKDQSULRU\HDU
x 3ULPHSURGXFWVDOHVRIPLOOLRQPHWULFWRQVZHUHXSPHWULFWRQVIURP



&RUSRUDWHDQG)LQDQFLQJ  
      
  PLOOLRQVRIGROODUV
      
&RUSRUDWHDQGILQDQFLQJ   


&RUSRUDWHDQGILQDQFLQJH[SHQVHVZHUHPLOOLRQLQFRPSDUHGWRPLOOLRQLQZLWKWKHGHFUHDVHPDLQO\GXH
WRDEVHQFHRISULRU\HDUXQIDYRUDEOHLPSDFWVRIELOOLRQIURP86WD[UHIRUPSDUWO\RIIVHWE\KLJKHUSHQVLRQDQGILQDQFLQJ
UHODWHGFRVWVORZHU86WD[UDWHDQGORZHUQHWIDYRUDEOHWD[LWHPV


&RUSRUDWHDQGILQDQFLQJH[SHQVHVZHUHPLOOLRQLQFRPSDUHGWRPLOOLRQLQZLWKWKHLQFUHDVHPDLQO\GXH
WRXQIDYRUDEOHLPSDFWVRIELOOLRQIURP86WD[UHIRUPDQGWKHDEVHQFHRIIDYRUDEOHQRQ86WD[LWHPV


0$1$*(0(17¶6',6&866,21$1'$1$/<6,62)),1$1&,$/&21',7,21$1'5(68/762)23(5$7,216

/,48,',7<$1'&$3,7$/5(6285&(6   
       
6RXUFHVDQG8VHVRI&DVK  
       
   PLOOLRQVRIGROODUV
1HWFDVKSURYLGHGE\XVHGLQ      
 2SHUDWLQJDFWLYLWLHV   
 ,QYHVWLQJDFWLYLWLHV   
 )LQDQFLQJDFWLYLWLHV   
(IIHFWRIH[FKDQJHUDWHFKDQJHV   
,QFUHDVHGHFUHDVHLQFDVKDQGFDVKHTXLYDOHQWV   
 
  'HFHPEHU
7RWDOFDVKDQGFDVKHTXLYDOHQWV   
 
7RWDOFDVKDQGFDVKHTXLYDOHQWVZHUHELOOLRQDWWKHHQGRIGRZQELOOLRQIURPWKHSULRU\HDU7KHPDMRUVRXUFHVRI
IXQGVLQZHUHQHWLQFRPHLQFOXGLQJ QRQFRQWUROOLQJLQWHUHVWVRIELOOLRQWKHDGMXVWPHQWIRUWKHQRQFDVKSURYLVLRQRI
ELOOLRQ IRU GHSUHFLDWLRQ DQG GHSOHWLRQ DQG SURFHHGV IURP DVVHW VDOHV RI  ELOOLRQ 7KH PDMRU XVHV RI IXQGV LQFOXGHG
VSHQGLQJ IRU DGGLWLRQV WR SURSHUW\ SODQW DQG HTXLSPHQW RI  ELOOLRQ GLYLGHQGV WR VKDUHKROGHUV RI ELOOLRQ QHW GHEW
UHSD\PHQWVRIELOOLRQDQLQFUHDVHLQLQYHQWRULHVRIELOOLRQWKHDGMXVWPHQWIRUQHWJDLQVRQDVVHWVDOHVRIELOOLRQDQG
DGGLWLRQDOLQYHVWPHQWVDQGDGYDQFHVRIELOOLRQ
7RWDOFDVKDQGFDVKHTXLYDOHQWVZHUHELOOLRQDWWKHHQGRIGRZQELOOLRQIURPWKHSULRU\HDU7KHPDMRUVRXUFHVRI
IXQGVLQZHUHQHWLQFRPHLQFOXGLQJ QRQFRQWUROOLQJLQWHUHVWVRIELOOLRQWKHDGMXVWPHQWIRUWKHQRQFDVKSURYLVLRQRI
ELOOLRQ IRU GHSUHFLDWLRQ DQG GHSOHWLRQ SURFHHGV IURP DVVHW VDOHV RI  ELOOLRQ DQG RWKHU LQYHVWLQJ DFWLYLWLHV LQFOXGLQJ
FROOHFWLRQRIDGYDQFHVRIELOOLRQ7KHPDMRUXVHVRIIXQGVLQFOXGHGVSHQGLQJIRUDGGLWLRQVWRSURSHUW\SODQWDQGHTXLSPHQWRI
ELOOLRQGLYLGHQGVWRVKDUHKROGHUVRIELOOLRQWKHDGMXVWPHQWIRUQRQFDVKGHIHUUHGLQFRPHWD[FUHGLWVRIELOOLRQDQG
DGGLWLRQDOLQYHVWPHQWVDQGDGYDQFHVRIELOOLRQ
7KH&RUSRUDWLRQKDVDFFHVVWRVLJQLILFDQWFDSDFLW\RIORQJWHUPDQGVKRUWWHUPOLTXLGLW\,QWHUQDOO\JHQHUDWHGIXQGVDUHJHQHUDOO\
H[SHFWHGWRFRYHUILQDQFLDOUHTXLUHPHQWVVXSSOHPHQWHGE\VKRUWWHUPDQGORQJWHUPGHEWDVUHTXLUHG2Q'HFHPEHUWKH
&RUSRUDWLRQKDGXQXVHGFRPPLWWHGVKRUWWHUPOLQHVRIFUHGLWRIELOOLRQDQGXQXVHGFRPPLWWHGORQJWHUPOLQHVRIFUHGLWRI
ELOOLRQ&DVKWKDWPD\EHWHPSRUDULO\DYDLODEOHDVVXUSOXVWRWKH&RUSRUDWLRQ¶VLPPHGLDWHQHHGVLVFDUHIXOO\PDQDJHGWKURXJK
FRXQWHUSDUW\ TXDOLW\ DQG LQYHVWPHQW JXLGHOLQHV WR HQVXUH LW LV VHFXUH DQG UHDGLO\ DYDLODEOH WR PHHW WKH &RUSRUDWLRQ¶V FDVK
UHTXLUHPHQWVDQGWRRSWLPL]HUHWXUQV
7RVXSSRUWFDVKIORZVLQIXWXUHSHULRGVWKH&RUSRUDWLRQZLOOQHHGWRFRQWLQXDOO\ILQGRUDFTXLUHDQGGHYHORSQHZILHOGVDQGFRQWLQXH
WRGHYHORSDQGDSSO\QHZWHFKQRORJLHVDQGUHFRYHU\SURFHVVHVWRH[LVWLQJILHOGVLQRUGHUWRPDLQWDLQRULQFUHDVHSURGXFWLRQ$IWHU
DSHULRGRISURGXFWLRQDWSODWHDXUDWHVLWLVWKHQDWXUHRIRLODQGJDVILHOGVHYHQWXDOO\WRSURGXFHDWGHFOLQLQJUDWHVIRUWKHUHPDLQGHU
RIWKHLUHFRQRPLFOLIH$YHUDJHGRYHUDOOWKH&RUSRUDWLRQ¶VH[LVWLQJRLODQGJDVILHOGVDQGZLWKRXWQHZSURMHFWVDQGJURZWKLQNH\
WLJKWRLOSOD\V([[RQ0RELO¶VSURGXFWLRQLVH[SHFWHGWRGHFOLQHDWDQDYHUDJHRIDSSUR[LPDWHO\SHUFHQWSHU\HDURYHUWKHQH[WIHZ
\HDUV'HFOLQHUDWHVFDQYDU\ZLGHO\E\LQGLYLGXDOILHOGGXHWRDQXPEHURIIDFWRUVLQFOXGLQJEXWQRWOLPLWHGWRWKHW\SHRIUHVHUYRLU
IOXLGSURSHUWLHVUHFRYHU\PHFKDQLVPVZRUNDFWLYLW\DQGDJHRIWKHILHOG)XUWKHUPRUHWKH&RUSRUDWLRQ¶VQHWLQWHUHVWLQSURGXFWLRQ
IRULQGLYLGXDOILHOGVFDQYDU\ZLWKSULFHDQGWKHLPSDFWRIILVFDODQGFRPPHUFLDOWHUPV
7KH&RUSRUDWLRQKDVORQJEHHQVXFFHVVIXODWRIIVHWWLQJWKHHIIHFWVRIQDWXUDOILHOGGHFOLQHWKURXJKGLVFLSOLQHGLQYHVWPHQWVLQTXDOLW\
RSSRUWXQLWLHVDQGSURMHFWH[HFXWLRQ7KH&RUSRUDWLRQDQWLFLSDWHVVHYHUDOSURMHFWVZLOOFRPHRQOLQHRYHUWKHQH[WIHZ\HDUVSURYLGLQJ
DGGLWLRQDOSURGXFWLRQFDSDFLW\+RZHYHUDFWXDOYROXPHVZLOOYDU\IURP\HDUWR\HDUGXHWRWKHWLPLQJRILQGLYLGXDOSURMHFWVWDUWXSV
RSHUDWLRQDORXWDJHVUHVHUYRLUSHUIRUPDQFHSHUIRUPDQFHRIHQKDQFHGRLOUHFRYHU\SURMHFWVUHJXODWRU\FKDQJHVWKHLPSDFWRIILVFDO
DQGFRPPHUFLDOWHUPVDVVHWVDOHVZHDWKHUHYHQWVSULFHHIIHFWVRQSURGXFWLRQVKDULQJFRQWUDFWVDQGFKDQJHVLQWKHDPRXQWDQG
WLPLQJRILQYHVWPHQWVWKDWPD\YDU\GHSHQGLQJRQWKHRLODQGJDVSULFHHQYLURQPHQW7KH&RUSRUDWLRQ¶VFDVKIORZVDUHDOVRKLJKO\
GHSHQGHQWRQFUXGHRLODQGQDWXUDOJDVSULFHV3OHDVHUHIHUWR,WHP$5LVN)DFWRUVRI([[RQ0RELO¶V)RUP.IRUDPRUH
FRPSOHWHGLVFXVVLRQRIULVNV
7KH&RUSRUDWLRQ¶VILQDQFLDOVWUHQJWKHQDEOHVLWWRPDNHODUJHORQJWHUPFDSLWDOH[SHQGLWXUHV&DSLWDODQGH[SORUDWLRQH[SHQGLWXUHV
LQ  ZHUH  ELOOLRQ UHIOHFWLQJ WKH &RUSRUDWLRQ¶V FRQWLQXHG DFWLYH LQYHVWPHQW SURJUDP 7KH &RUSRUDWLRQ DQWLFLSDWHV DQ
LQYHVWPHQWOHYHORIDSSUR[LPDWHO\ELOOLRQLQ
 


0$1$*(0(17¶6',6&866,21$1'$1$/<6,62)),1$1&,$/&21',7,21$1'5(68/762)23(5$7,216

$FWXDOVSHQGLQJFRXOGYDU\GHSHQGLQJRQWKHSURJUHVVRILQGLYLGXDOSURMHFWVDQGSURSHUW\DFTXLVLWLRQV7KH&RUSRUDWLRQKDVDODUJH
DQGGLYHUVHSRUWIROLRRIGHYHORSPHQWSURMHFWVDQGH[SORUDWLRQRSSRUWXQLWLHVZKLFKKHOSVPLWLJDWHWKHRYHUDOOSROLWLFDODQGWHFKQLFDO
ULVNVRIWKH&RUSRUDWLRQ¶V8SVWUHDPVHJPHQWDQGDVVRFLDWHGFDVKIORZ)XUWKHUGXHWRLWVILQDQFLDOVWUHQJWKGHEWFDSDFLW\DQG
GLYHUVHSRUWIROLRRIRSSRUWXQLWLHVWKHULVNDVVRFLDWHGZLWKIDLOXUHRUGHOD\RIDQ\VLQJOHSURMHFWZRXOGQRWKDYHDVLJQLILFDQWLPSDFW
RQWKH&RUSRUDWLRQ¶VOLTXLGLW\RUDELOLW\WRJHQHUDWHVXIILFLHQWFDVKIORZVIRURSHUDWLRQVDQGLWVIL[HGFRPPLWPHQWV

([[RQ0RELOFORVHO\PRQLWRUVWKHSRWHQWLDOLPSDFWVRI%UH[LWDQG/,%25UHIRUPXQGHUDQXPEHURIVFHQDULRVDQGKDVWDNHQVWHSV
WR PLWLJDWH WKHLU SRWHQWLDO LPSDFW $FFRUGLQJO\ ([[RQ0RELO GRHV QRW EHOLHYH WKHVH HYHQWV UHSUHVHQW D PDWHULDO ULVN WR WKH
&RUSRUDWLRQ¶VFRQVROLGDWHGUHVXOWVRIRSHUDWLRQVRUILQDQFLDOFRQGLWLRQ

&DVK)ORZIURP2SHUDWLQJ$FWLYLWLHV


&DVKSURYLGHGE\RSHUDWLQJDFWLYLWLHVWRWDOHGELOOLRQLQELOOLRQKLJKHUWKDQ7KHPDMRUVRXUFHRIIXQGVZDV
QHWLQFRPHLQFOXGLQJQRQFRQWUROOLQJLQWHUHVWVRIELOOLRQDQLQFUHDVHRIELOOLRQ7KHQRQFDVKSURYLVLRQIRUGHSUHFLDWLRQ
DQGGHSOHWLRQZDVELOOLRQGRZQELOOLRQIURPWKHSULRU\HDU7KHDGMXVWPHQWIRUWKHQHWJDLQRQDVVHWVDOHVZDV
ELOOLRQDQLQFUHDVHRIELOOLRQ7KHDGMXVWPHQWIRUGLYLGHQGVUHFHLYHGOHVVWKDQHTXLW\LQFXUUHQWHDUQLQJVRIHTXLW\FRPSDQLHV
ZDVDUHGXFWLRQRIELOOLRQFRPSDUHGWRDQLQFUHDVHRIELOOLRQLQ7KHDGMXVWPHQWIRUGHIHUUHGLQFRPHWD[FUHGLWVZDV
ELOOLRQFRPSDUHGWRELOOLRQLQ&KDQJHVLQRSHUDWLRQDOZRUNLQJFDSLWDOH[FOXGLQJFDVKDQGGHEWGHFUHDVHGFDVKLQ
E\ELOOLRQ


&DVKSURYLGHGE\RSHUDWLQJDFWLYLWLHVWRWDOHGELOOLRQLQELOOLRQKLJKHUWKDQ7KHPDMRUVRXUFHRIIXQGVZDV
QHWLQFRPHLQFOXGLQJQRQFRQWUROOLQJLQWHUHVWVRIELOOLRQDQLQFUHDVHRIELOOLRQ7KHQRQFDVKSURYLVLRQIRUGHSUHFLDWLRQ
DQGGHSOHWLRQZDVELOOLRQGRZQELOOLRQIURPWKHSULRU\HDU7KHDGMXVWPHQWIRUGHIHUUHGLQFRPHWD[FUHGLWVZDV
ELOOLRQFRPSDUHGWRELOOLRQLQ&KDQJHVLQRSHUDWLRQDOZRUNLQJFDSLWDOH[FOXGLQJFDVKDQGGHEWGHFUHDVHGFDVKLQ
E\ELOOLRQ

&DVK)ORZIURP,QYHVWLQJ$FWLYLWLHV


&DVKXVHGLQLQYHVWLQJDFWLYLWLHVQHWWHGWRELOOLRQLQELOOLRQKLJKHUWKDQ6SHQGLQJIRUSURSHUW\SODQWDQG
HTXLSPHQWRIELOOLRQLQFUHDVHGELOOLRQIURP3URFHHGVDVVRFLDWHGZLWKVDOHVRIVXEVLGLDULHVSURSHUW\SODQWDQG
HTXLSPHQW DQG VDOHV DQG UHWXUQV RI LQYHVWPHQWV RI  ELOOLRQ FRPSDUHG WR  ELOOLRQ LQ  $GGLWLRQDO LQYHVWPHQWV DQG
DGYDQFHVZHUHELOOLRQORZHULQZKLOHSURFHHGVIURPRWKHULQYHVWLQJDFWLYLWLHVLQFOXGLQJFROOHFWLRQRIDGYDQFHVGHFUHDVHG
E\ELOOLRQ


&DVKXVHGLQLQYHVWLQJDFWLYLWLHVQHWWHGWRELOOLRQLQELOOLRQKLJKHUWKDQ6SHQGLQJIRUSURSHUW\SODQWDQG
HTXLSPHQWRIELOOLRQGHFUHDVHGELOOLRQIURP3URFHHGVDVVRFLDWHGZLWKVDOHVRIVXEVLGLDULHVSURSHUW\SODQWDQG
HTXLSPHQW DQG VDOHV DQG UHWXUQV RI LQYHVWPHQWV RI  ELOOLRQ FRPSDUHG WR  ELOOLRQ LQ  $GGLWLRQDO LQYHVWPHQWV DQG
DGYDQFHVZHUHELOOLRQKLJKHULQZKLOHSURFHHGVIURPRWKHULQYHVWLQJDFWLYLWLHVLQFOXGLQJFROOHFWLRQRIDGYDQFHVLQFUHDVHG
E\ELOOLRQ



0$1$*(0(17¶6',6&866,21$1'$1$/<6,62)),1$1&,$/&21',7,21$1'5(68/762)23(5$7,216

&DVK)ORZIURP)LQDQFLQJ$FWLYLWLHV


&DVKXVHGLQILQDQFLQJDFWLYLWLHVZDVELOOLRQLQELOOLRQKLJKHUWKDQ'LYLGHQGSD\PHQWVRQFRPPRQVKDUHV
LQFUHDVHGWRSHUVKDUHIURPSHUVKDUHDQGWRWDOHGELOOLRQ7RWDOGHEWGHFUHDVHGELOOLRQWRELOOLRQDW
\HDUHQG7KHUHGXFWLRQZDVSULQFLSDOO\GULYHQE\QHWVKRUWWHUPGHEWDQGFRPPHUFLDOSDSHUUHSD\PHQWVRIELOOLRQ
([[RQ0RELOVKDUHRIHTXLW\LQFUHDVHGELOOLRQWRELOOLRQ7KHDGGLWLRQWRHTXLW\IRUHDUQLQJVZDVELOOLRQ7KLVZDV
SDUWO\RIIVHWE\UHGXFWLRQV IRUGLVWULEXWLRQVWR([[RQ0RELOVKDUHKROGHUVRIELOOLRQDOOLQWKH IRUPRIGLYLGHQGV)RUHLJQ
H[FKDQJHWUDQVODWLRQHIIHFWVRIELOOLRQIRUWKHVWURQJHU86FXUUHQF\UHGXFHGHTXLW\ZKLOHDELOOLRQFKDQJHLQWKHIXQGHG
VWDWXVRIWKHSRVWUHWLUHPHQWEHQHILWVUHVHUYHVLQFUHDVHGHTXLW\
'XULQJ([[RQ0RELO&RUSRUDWLRQDFTXLUHGPLOOLRQVKDUHVRILWVFRPPRQVWRFNIRUWKHWUHDVXU\3XUFKDVHVZHUHPDGHWR
RIIVHWVKDUHVRUXQLWVVHWWOHGLQVKDUHVLVVXHGLQFRQMXQFWLRQZLWKWKHFRPSDQ\¶VEHQHILWSODQVDQGSURJUDPV6KDUHVRXWVWDQGLQJ
GHFUHDVHGIURPPLOOLRQWRPLOOLRQDWWKHHQGRI


&DVKXVHGLQILQDQFLQJDFWLYLWLHVZDVELOOLRQLQELOOLRQKLJKHUWKDQ'LYLGHQGSD\PHQWVRQFRPPRQVKDUHV
LQFUHDVHGWRSHUVKDUHIURPSHUVKDUHDQGWRWDOHGELOOLRQ7RWDOGHEWGHFUHDVHGELOOLRQWRELOOLRQDW
\HDUHQG7KHUHGXFWLRQZDVSULQFLSDOO\GULYHQE\QHWUHSD\PHQWVRIELOOLRQDQGLQFOXGHGVKRUWWHUPGHEWUHSD\PHQWVRI
ELOOLRQWKDWZHUHSDUWO\RIIVHWE\DGGLWLRQVLQFRPPHUFLDOSDSHUDQGRWKHUGHEWRIELOOLRQ
([[RQ0RELOVKDUHRIHTXLW\LQFUHDVHGELOOLRQWRELOOLRQ7KHDGGLWLRQWRHTXLW\IRUHDUQLQJVZDVELOOLRQ7KLV
ZDVSDUWO\RIIVHWE\UHGXFWLRQVIRUGLVWULEXWLRQVWR([[RQ0RELOVKDUHKROGHUVRIELOOLRQDOOLQWKHIRUPRIGLYLGHQGV)RUHLJQ
H[FKDQJH WUDQVODWLRQ HIIHFWV RI  ELOOLRQ IRU WKH ZHDNHU 86 FXUUHQF\ DQG D  ELOOLRQ FKDQJH LQ WKH IXQGHG VWDWXV RI WKH
SRVWUHWLUHPHQWEHQHILWVUHVHUYHVERWKLQFUHDVHGHTXLW\6KDUHVLVVXHGIRUDFTXLVLWLRQVDGGHGELOOLRQWRHTXLW\
'XULQJ([[RQ0RELO&RUSRUDWLRQDFTXLUHGPLOOLRQVKDUHVRILWVFRPPRQVWRFNIRUWKHWUHDVXU\3XUFKDVHVZHUHPDGHWR
RIIVHWVKDUHVRUXQLWVVHWWOHGLQVKDUHVLVVXHGLQFRQMXQFWLRQZLWKWKHFRPSDQ\¶VEHQHILWSODQVDQGSURJUDPV6KDUHVRXWVWDQGLQJ
LQFUHDVHGIURPPLOOLRQWRPLOOLRQDWWKHHQGRIPDLQO\GXHWRDWRWDORIPLOOLRQVKDUHVLVVXHGIRUWKHDFTXLVLWLRQV
RI,QWHU2LO&RUSRUDWLRQDQGRIFRPSDQLHVWKDWKROGDFUHDJHLQWKH3HUPLDQ%DVLQ



0$1$*(0(17¶6',6&866,21$1'$1$/<6,62)),1$1&,$/&21',7,21$1'5(68/762)23(5$7,216

&RPPLWPHQWV
6HWIRUWKEHORZLVLQIRUPDWLRQDERXWWKHRXWVWDQGLQJFRPPLWPHQWVRIWKH&RUSRUDWLRQ¶VFRQVROLGDWHGVXEVLGLDULHVDW'HFHPEHU
 7KH WDEOH FRPELQHV GDWD IURP WKH &RQVROLGDWHG %DODQFH 6KHHW DQG IURP LQGLYLGXDO QRWHV WR WKH &RQVROLGDWHG )LQDQFLDO
6WDWHPHQWV

  3D\PHQWV'XHE\3HULRG
  1RWH          
  5HIHUHQFH        DQG  
&RPPLWPHQWV 1XPEHU        %H\RQG  7RWDO
  PLOOLRQVRIGROODUV
            
/RQJWHUPGHEW          
 ±'XHLQRQH\HDU        
$VVHWUHWLUHPHQWREOLJDWLRQV        
3HQVLRQDQGRWKHUSRVWUHWLUHPHQWREOLJDWLRQV        
2SHUDWLQJOHDVHV        
7DNHRUSD\DQGXQFRQGLWLRQDOSXUFKDVHREOLJDWLRQV        
)LUPFDSLWDOFRPPLWPHQWV        

7KLVWDEOHH[FOXGHVFRPPRGLW\SXUFKDVHREOLJDWLRQVYROXPHWULFFRPPLWPHQWVEXWQRIL[HGRUPLQLPXPSULFHZKLFKDUHUHVROG
VKRUWO\DIWHUSXUFKDVHHLWKHULQDQDFWLYHKLJKO\OLTXLGPDUNHWRUXQGHUORQJWHUPXQFRQGLWLRQDOVDOHVFRQWUDFWVZLWKVLPLODUSULFLQJ
WHUPV ([DPSOHV LQFOXGH ORQJWHUP QRQFDQFHODEOH /1* DQG QDWXUDO JDV SXUFKDVH FRPPLWPHQWV DQG FRPPLWPHQWV WR SXUFKDVH
UHILQHU\SURGXFWVDWPDUNHWSULFHV,QFOXVLRQRIVXFKFRPPLWPHQWVZRXOGQRWEHPHDQLQJIXOLQDVVHVVLQJOLTXLGLW\DQGFDVKIORZ
EHFDXVH WKHVH SXUFKDVHV ZLOO EH RIIVHW LQ WKH VDPH SHULRGV E\ FDVK UHFHLYHG IURP WKH UHODWHG VDOHV WUDQVDFWLRQV 7KH WDEOH DOVR
H[FOXGHV XQUHFRJQL]HG WD[ EHQHILWV WRWDOLQJ  ELOOLRQ DV RI 'HFHPEHU  EHFDXVH WKH &RUSRUDWLRQ LV XQDEOH WR PDNH
UHDVRQDEO\ UHOLDEOH HVWLPDWHV RI WKH WLPLQJ RI FDVK VHWWOHPHQWV ZLWK WKH UHVSHFWLYH WD[LQJ DXWKRULWLHV )XUWKHU GHWDLOV RQ WKH
XQUHFRJQL]HGWD[EHQHILWVFDQEHIRXQGLQ³1RWH,QFRPHDQG2WKHU7D[HV´
1RWHV
 ,QFOXGHVFDSLWDOL]HGOHDVHREOLJDWLRQVRIPLOOLRQ
 7KHDPRXQWGXHLQRQH\HDULVLQFOXGHGLQ1RWHVDQGORDQVSD\DEOHRIPLOOLRQ
 $VVHWUHWLUHPHQWREOLJDWLRQVDUHSULPDULO\XSVWUHDPDVVHWUHPRYDOFRVWVDWWKHFRPSOHWLRQRIILHOGOLIH
 7KHDPRXQWE\ZKLFKWKHEHQHILWREOLJDWLRQVH[FHHGHGWKHIDLUYDOXHRIIXQGDVVHWVIRUFHUWDLQ86DQGQRQ86SHQVLRQDQG
RWKHUSRVWUHWLUHPHQWSODQVDW\HDUHQG7KHSD\PHQWVE\SHULRGLQFOXGHH[SHFWHGFRQWULEXWLRQVWRIXQGHGSHQVLRQSODQVLQ
DQGHVWLPDWHGEHQHILWSD\PHQWVIRUXQIXQGHGSODQVLQDOO\HDUV
 0LQLPXPFRPPLWPHQWVIRURSHUDWLQJOHDVHVVKRZQRQDQXQGLVFRXQWHGEDVLVFRYHUGULOOLQJHTXLSPHQWWDQNHUVDQGRWKHU
DVVHWV7RWDOLQFOXGHVPLOOLRQUHODWHGWRGULOOLQJULJVDQGUHODWHGHTXLSPHQW
 7DNHRUSD\ REOLJDWLRQV DUH QRQFDQFHODEOH ORQJWHUP FRPPLWPHQWV IRU JRRGV DQG VHUYLFHV 8QFRQGLWLRQDO SXUFKDVH
REOLJDWLRQVDUHWKRVHORQJWHUPFRPPLWPHQWVWKDWDUHQRQFDQFHODEOHRUFDQFHODEOHRQO\XQGHUFHUWDLQFRQGLWLRQVDQGWKDW
WKLUGSDUWLHVKDYHXVHGWRVHFXUHILQDQFLQJIRUWKHIDFLOLWLHVWKDWZLOOSURYLGHWKHFRQWUDFWHGJRRGVRUVHUYLFHV7KHXQGLVFRXQWHG
REOLJDWLRQVRIPLOOLRQPDLQO\SHUWDLQWRSLSHOLQHPDQXIDFWXULQJVXSSO\DQGWHUPLQDODJUHHPHQWV
 )LUP FDSLWDO FRPPLWPHQWV UHSUHVHQW OHJDOO\ ELQGLQJ SD\PHQW REOLJDWLRQV WR WKLUG SDUWLHV ZKHUH DJUHHPHQWV VSHFLI\LQJ DOO
VLJQLILFDQWWHUPVKDYHEHHQH[HFXWHGIRUWKHFRQVWUXFWLRQDQGSXUFKDVHRIIL[HGDVVHWVDQGRWKHUSHUPDQHQWLQYHVWPHQWV,Q
FHUWDLQFDVHVZKHUHWKH&RUSRUDWLRQH[HFXWHVFRQWUDFWVUHTXLULQJFRPPLWPHQWVWRDZRUNVFRSHWKRVHFRPPLWPHQWVKDYHEHHQ
LQFOXGHGWRWKHH[WHQWWKDWWKHDPRXQWVDQGWLPLQJRISD\PHQWVFDQEHUHOLDEO\HVWLPDWHG)LUPFDSLWDOFRPPLWPHQWVVKRZQ
RQDQXQGLVFRXQWHGEDVLVWRWDOHGELOOLRQLQFOXGLQJELOOLRQLQWKH86
)LUPFDSLWDOFRPPLWPHQWVIRUWKHQRQ868SVWUHDPRIELOOLRQZHUHSULPDULO\DVVRFLDWHGZLWKSURMHFWVLQ*X\DQD$IULFD
8QLWHG .LQJGRP 8QLWHG $UDE (PLUDWHV 0DOD\VLD $XVWUDOLD &DQDGD DQG 1RUZD\ 7KH &RUSRUDWLRQ H[SHFWV WR IXQG WKH
PDMRULW\RIWKHVHFRPPLWPHQWVZLWKLQWHUQDOO\JHQHUDWHGIXQGVVXSSOHPHQWHGE\VKRUWWHUPDQGORQJWHUPGHEWDVUHTXLUHG


0$1$*(0(17¶6',6&866,21$1'$1$/<6,62)),1$1&,$/&21',7,21$1'5(68/762)23(5$7,216

*XDUDQWHHV
7KH&RUSRUDWLRQDQGFHUWDLQRILWVFRQVROLGDWHGVXEVLGLDULHVZHUHFRQWLQJHQWO\OLDEOHDW'HFHPEHUIRUJXDUDQWHHVUHODWLQJ
WR QRWHV ORDQV DQG SHUIRUPDQFH XQGHU FRQWUDFWV 1RWH  :KHUH JXDUDQWHHV IRU HQYLURQPHQWDO UHPHGLDWLRQ DQG RWKHU VLPLODU
PDWWHUV GR QRW LQFOXGH D VWDWHG FDS WKH DPRXQWV UHIOHFW PDQDJHPHQW¶V HVWLPDWH RI WKH PD[LPXP SRWHQWLDO H[SRVXUH 7KHVH
JXDUDQWHHV DUH QRW UHDVRQDEO\ OLNHO\ WR KDYH D PDWHULDO HIIHFW RQ WKH &RUSRUDWLRQ¶V ILQDQFLDO FRQGLWLRQ FKDQJHV LQ ILQDQFLDO
FRQGLWLRQUHYHQXHVRUH[SHQVHVUHVXOWVRIRSHUDWLRQVOLTXLGLW\FDSLWDOH[SHQGLWXUHVRUFDSLWDOUHVRXUFHV

)LQDQFLDO6WUHQJWK
2Q'HFHPEHUWKH&RUSRUDWLRQ¶VXQXVHGVKRUWWHUPFRPPLWWHGOLQHVRIFUHGLWWRWDOHGELOOLRQ1RWHDQGXQXVHG
ORQJWHUPFRPPLWWHGOLQHVRIFUHGLWWRWDOHGELOOLRQ1RWH7KHWDEOHEHORZVKRZVWKH&RUSRUDWLRQ¶VFRQVROLGDWHGGHEWWR
FDSLWDOUDWLRV7KHGDWDGHPRQVWUDWHVWKH&RUSRUDWLRQ¶VFUHGLWZRUWKLQHVV

     
'HEWWRFDSLWDOSHUFHQW     
1HWGHEWWRFDSLWDOSHUFHQW     

0DQDJHPHQWYLHZVWKH&RUSRUDWLRQ¶VILQDQFLDOVWUHQJWKDVHYLGHQFHGE\WKHDERYHILQDQFLDOUDWLRVDQGRWKHUVLPLODUPHDVXUHVWR
EHDFRPSHWLWLYHDGYDQWDJHRIVWUDWHJLFLPSRUWDQFH7KH&RUSRUDWLRQ¶VVRXQGILQDQFLDOSRVLWLRQJLYHVLWWKHRSSRUWXQLW\WRDFFHVV
WKHZRUOG¶VFDSLWDOPDUNHWVLQWKHIXOOUDQJHRIPDUNHWFRQGLWLRQVDQGHQDEOHVWKH&RUSRUDWLRQWRWDNHRQODUJHORQJWHUPFDSLWDO
FRPPLWPHQWVLQWKHSXUVXLWRIPD[LPL]LQJVKDUHKROGHUYDOXH

/LWLJDWLRQDQG2WKHU&RQWLQJHQFLHV
$VGLVFXVVHGLQ1RWHDYDULHW\RIFODLPVKDYHEHHQPDGHDJDLQVW([[RQ0RELODQGFHUWDLQRILWVFRQVROLGDWHGVXEVLGLDULHVLQD
QXPEHURISHQGLQJODZVXLWV%DVHGRQDFRQVLGHUDWLRQRIDOOUHOHYDQWIDFWVDQGFLUFXPVWDQFHVWKH&RUSRUDWLRQGRHVQRWEHOLHYHWKH
XOWLPDWHRXWFRPHRIDQ\FXUUHQWO\SHQGLQJODZVXLWDJDLQVW([[RQ0RELOZLOOKDYHDPDWHULDODGYHUVHHIIHFWXSRQWKH&RUSRUDWLRQ¶V
RSHUDWLRQVILQDQFLDOFRQGLWLRQRUILQDQFLDOVWDWHPHQWVWDNHQDVDZKROH7KHUHDUHQRHYHQWVRUXQFHUWDLQWLHVEH\RQGWKRVHDOUHDG\
LQFOXGHGLQUHSRUWHGILQDQFLDOLQIRUPDWLRQWKDWZRXOGLQGLFDWHDPDWHULDOFKDQJHLQIXWXUHRSHUDWLQJUHVXOWVRUILQDQFLDOFRQGLWLRQ
5HIHUWR1RWHIRUDGGLWLRQDOLQIRUPDWLRQRQOHJDOSURFHHGLQJVDQGRWKHUFRQWLQJHQFLHV

&$3,7$/$1'(;3/25$7,21(;3(1',785(6          
    
  86 1RQ86 7RWDO  86 1RQ86 7RWDO
  PLOOLRQVRIGROODUV
            
8SVWUHDP       
'RZQVWUHDP       
&KHPLFDO       
2WKHU       
 7RWDO       
            
([SORUDWLRQH[SHQVHVLQFOXGHG        

&DSLWDODQGH[SORUDWLRQH[SHQGLWXUHVLQZHUHELOOLRQDVWKH&RUSRUDWLRQFRQWLQXHGWRSXUVXHRSSRUWXQLWLHVWRILQGDQG
SURGXFHQHZVXSSOLHVRIRLODQGQDWXUDOJDVWRPHHWJOREDOGHPDQGIRUHQHUJ\7KH&RUSRUDWLRQDQWLFLSDWHVDQLQYHVWPHQWOHYHORI
DSSUR[LPDWHO\  ELOOLRQ LQ  $FWXDO VSHQGLQJ FRXOG YDU\ GHSHQGLQJ RQ WKH SURJUHVV RI LQGLYLGXDO SURMHFWV DQG SURSHUW\
DFTXLVLWLRQV
8SVWUHDPVSHQGLQJRIELOOLRQLQZDVXSSHUFHQWIURP,QYHVWPHQWVLQLQFOXGHGJURZWKLQWKH863HUPLDQ
%DVLQDFUHDJHDFTXLVLWLRQVLQ%UD]LODQGJOREDOGHYHORSPHQWSURMHFWV'HYHORSPHQWSURMHFWVW\SLFDOO\WDNHVHYHUDO\HDUVIURPWKH
WLPHRIUHFRUGLQJSURYHGXQGHYHORSHGUHVHUYHVWRWKHVWDUWRISURGXFWLRQDQGFDQH[FHHGILYH\HDUVIRUODUJHDQGFRPSOH[SURMHFWV
7KHSHUFHQWDJHRISURYHGGHYHORSHGUHVHUYHVZDVSHUFHQWRIWRWDOSURYHGUHVHUYHVDW\HDUHQGDQGKDVEHHQRYHUSHUFHQW
IRUWKHODVWWHQ\HDUV
&DSLWDOLQYHVWPHQWVLQWKH'RZQVWUHDPWRWDOHGELOOLRQLQDQLQFUHDVHRIELOOLRQIURPUHIOHFWLQJJOREDOSURMHFW
VSHQGLQJ DQG D OXEULFDQWV DFTXLVLWLRQ LQ ,QGRQHVLD &KHPLFDO FDSLWDO H[SHQGLWXUHV RI  ELOOLRQ GHFUHDVHG  ELOOLRQ
UHSUHVHQWLQJLQYHVWPHQWVLQJURZWKSURMHFWVRIIVHWE\WKHDFTXLVLWLRQRIDODUJHVFDOHDURPDWLFVSODQWLQ6LQJDSRUH


0$1$*(0(17¶6',6&866,21$1'$1$/<6,62)),1$1&,$/&21',7,21$1'5(68/762)23(5$7,216

7$;(6      
       
   PLOOLRQVRIGROODUV
       
,QFRPHWD[HV   
 (IIHFWLYHLQFRPHWD[UDWH   
7RWDORWKHUWD[HVDQGGXWLHV   
 7RWDO    
  

7RWDOWD[HVRQWKH&RUSRUDWLRQ¶VLQFRPHVWDWHPHQWZHUHELOOLRQLQDQLQFUHDVHRIELOOLRQIURP,QFRPHWD[
H[SHQVHERWKFXUUHQWDQGGHIHUUHGZDVELOOLRQFRPSDUHGWRDFUHGLWRIELOOLRQLQ7KHHIIHFWLYHWD[UDWHZKLFKLV
FDOFXODWHGEDVHGRQFRQVROLGDWHGFRPSDQ\LQFRPHWD[HVDQG([[RQ0RELO¶VVKDUHRIHTXLW\FRPSDQ\LQFRPHWD[HVZDVSHUFHQW
FRPSDUHGWRSHUFHQW7KHLQFUHDVHSULQFLSDOO\UHIOHFWVWKHDEVHQFHRIWKHLPSDFWRI86WD[UHIRUPLQWKHSULRU\HDU7RWDORWKHU
WD[HVDQGGXWLHVRIELOOLRQLQLQFUHDVHGELOOLRQ


7RWDOWD[HVRQWKH&RUSRUDWLRQ¶VLQFRPHVWDWHPHQWZHUHELOOLRQLQDQLQFUHDVHRIELOOLRQIURP,QFRPHWD[
H[SHQVHERWKFXUUHQWDQGGHIHUUHGZDVDFUHGLWRIELOOLRQFRPSDUHGWRDFUHGLWRIELOOLRQLQZLWKWKH86WD[UHIRUP
LPSDFWRIELOOLRQSDUWLDOO\RIIVHWE\KLJKHUSUHWD[LQFRPH7KHHIIHFWLYHWD[UDWHZKLFKLVFDOFXODWHGEDVHGRQFRQVROLGDWHG
FRPSDQ\LQFRPHWD[HVDQG([[RQ0RELO¶VVKDUHRIHTXLW\FRPSDQ\LQFRPHWD[HVZDVSHUFHQWFRPSDUHGWRSHUFHQWLQWKHSULRU
\HDUGXHSULPDULO\WRWKHLPSDFWRI86WD[UHIRUP7RWDORWKHUWD[HVDQGGXWLHVRIELOOLRQLQLQFUHDVHGELOOLRQ

867D[5HIRUP
)ROORZLQJ WKH 'HFHPEHU   HQDFWPHQW RI WKH 86 7D[ &XWV DQG -REV $FW LQ DFFRUGDQFH ZLWK $FFRXQWLQJ 6WDQGDUG
&RGLILFDWLRQ7RSLF,QFRPH7D[HVDQGIROORZLQJWKHJXLGDQFHRXWOLQHGLQWKH6(&6WDII$FFRXQWLQJ%XOOHWLQ1RWKH
&RUSRUDWLRQLQFOXGHGDPLOOLRQFUHGLWLQLWVUHVXOWVUHSUHVHQWLQJDUHDVRQDEOHHVWLPDWHRIWKHLQFRPHWD[HIIHFWVRIWKH
FKDQJHV LQ WD[ ODZ DQG WD[ UDWH 7KH &RUSRUDWLRQ¶V UHVXOWV IRU  LQFOXGH D  PLOOLRQ WD[ FUHGLW PDLQO\ LQ WKH 1RQ86
8SVWUHDPUHIOHFWLQJDQXSGDWHGHVWLPDWHRIWKHLPSDFWRI86WD[UHIRUPLQFOXGLQJFODULILFDWLRQVSURYLGHGLQSURSRVHGWUDQVLWLRQ
WD[UHJXODWLRQVLVVXHGE\WKH867UHDVXU\LQ7KH&RUSRUDWLRQKDVFRPSOHWHGLWVDFFRXQWLQJIRUWKHHQDFWPHQWGDWHLQFRPH
WD[HIIHFWVRIWKH867D[&XWVDQG-REV$FWLQDFFRUGDQFHZLWK$FFRXQWLQJ6WDQGDUG&RGLILFDWLRQ7RSLF,QFRPH7D[HV


0$1$*(0(17¶6',6&866,21$1'$1$/<6,62)),1$1&,$/&21',7,21$1'5(68/762)23(5$7,216

(19,5210(17$/0$77(56

(QYLURQPHQWDO([SHQGLWXUHV    
    
   PLOOLRQVRIGROODUV
     
&DSLWDOH[SHQGLWXUHV   
2WKHUH[SHQGLWXUHV   
 7RWDO   

7KURXJKRXW([[RQ0RELO¶VEXVLQHVVHVQHZDQGRQJRLQJPHDVXUHVDUHWDNHQWRSUHYHQWDQGPLQLPL]HWKHLPSDFWRIRXURSHUDWLRQV
RQDLUZDWHUDQGJURXQG7KHVHLQFOXGHDVLJQLILFDQWLQYHVWPHQWLQUHILQLQJLQIUDVWUXFWXUHDQGWHFKQRORJ\WRPDQXIDFWXUHFOHDQ
IXHOVDVZHOODVSURMHFWVWRPRQLWRUDQGUHGXFHQLWURJHQR[LGHVXOIXUR[LGHDQGJUHHQKRXVHJDVHPLVVLRQVDQGH[SHQGLWXUHVIRU
DVVHWUHWLUHPHQWREOLJDWLRQV8VLQJGHILQLWLRQVDQGJXLGHOLQHVHVWDEOLVKHGE\WKH$PHULFDQ3HWUROHXP,QVWLWXWH([[RQ0RELO¶V
ZRUOGZLGHHQYLURQPHQWDOH[SHQGLWXUHVIRUDOOVXFKSUHYHQWDWLYHDQGUHPHGLDWLRQVWHSVLQFOXGLQJ([[RQ0RELO¶VVKDUHRIHTXLW\
FRPSDQ\ H[SHQGLWXUHV ZHUH ELOOLRQ RI ZKLFK ELOOLRQ ZHUH LQFOXGHG LQ H[SHQVHV ZLWK WKH UHPDLQGHU LQ FDSLWDO
H[SHQGLWXUHV 7KH WRWDO FRVW IRU VXFK DFWLYLWLHV LV H[SHFWHG WR LQFUHDVH WR DSSUR[LPDWHO\ ELOOLRQ LQ  DQG  &DSLWDO
H[SHQGLWXUHVDUHH[SHFWHGWRDFFRXQWIRUDSSUR[LPDWHO\SHUFHQWRIWKHWRWDO

(QYLURQPHQWDO/LDELOLWLHV
7KH&RUSRUDWLRQDFFUXHVHQYLURQPHQWDOOLDELOLWLHVZKHQLWLVSUREDEOHWKDWREOLJDWLRQVKDYHEHHQLQFXUUHGDQGWKHDPRXQWVFDQEH
UHDVRQDEO\HVWLPDWHG7KLVSROLF\DSSOLHVWRDVVHWVRUEXVLQHVVHVFXUUHQWO\RZQHGRUSUHYLRXVO\GLVSRVHG([[RQ0RELOKDVDFFUXHG
OLDELOLWLHV IRU SUREDEOH HQYLURQPHQWDO UHPHGLDWLRQ REOLJDWLRQV DW YDULRXV VLWHV LQFOXGLQJ PXOWLSDUW\ VLWHV ZKHUH WKH 86
(QYLURQPHQWDO3URWHFWLRQ$JHQF\KDVLGHQWLILHG([[RQ0RELODVRQHRIWKHSRWHQWLDOO\UHVSRQVLEOHSDUWLHV7KHLQYROYHPHQWRIRWKHU
ILQDQFLDOO\UHVSRQVLEOHFRPSDQLHVDWWKHVHPXOWLSDUW\VLWHVFRXOGPLWLJDWH([[RQ0RELO¶VDFWXDOMRLQWDQGVHYHUDOOLDELOLW\H[SRVXUH
$WSUHVHQWQRLQGLYLGXDOVLWHLVH[SHFWHGWRKDYHORVVHVPDWHULDOWR([[RQ0RELO¶VRSHUDWLRQVRUILQDQFLDOFRQGLWLRQ&RQVROLGDWHG
FRPSDQ\SURYLVLRQVPDGHLQIRUHQYLURQPHQWDOOLDELOLWLHVZHUHPLOOLRQPLOOLRQLQDQGWKHEDODQFHVKHHW
UHIOHFWVOLDELOLWLHVRIPLOOLRQDVRI'HFHPEHUDQGPLOOLRQDVRI'HFHPEHU


0$5.(75,6.6,1)/$7,21$1'27+(581&(57$,17,(6

:RUOGZLGH$YHUDJH5HDOL]DWLRQV     
  
&UXGHRLODQG1*/SHUEDUUHO    
1DWXUDOJDVSHUWKRXVDQGFXELFIHHW    
      
&RQVROLGDWHGVXEVLGLDULHV      

&UXGHRLOQDWXUDOJDVSHWUROHXPSURGXFWDQGFKHPLFDOSULFHVKDYHIOXFWXDWHGLQUHVSRQVHWRFKDQJLQJPDUNHWIRUFHV7KHLPSDFWV
RI WKHVH SULFH IOXFWXDWLRQV RQ HDUQLQJV IURP 8SVWUHDP 'RZQVWUHDP DQG &KHPLFDO RSHUDWLRQV KDYH YDULHG ,Q WKH 8SVWUHDP D
SHUEDUUHOFKDQJHLQWKHZHLJKWHGDYHUDJHUHDOL]HGSULFHRIRLOZRXOGKDYHDSSUR[LPDWHO\DPLOOLRQDQQXDODIWHUWD[HIIHFW
RQ8SVWUHDPFRQVROLGDWHGSOXVHTXLW\FRPSDQ\HDUQLQJVH[FOXGLQJWKHLPSDFWRIGHULYDWLYHV6LPLODUO\DSHUWKRXVDQGFXELF
IHHWFKDQJHLQWKHZRUOGZLGHDYHUDJHJDVUHDOL]DWLRQZRXOGKDYHDSSUR[LPDWHO\DPLOOLRQDQQXDODIWHUWD[HIIHFWRQ8SVWUHDP
FRQVROLGDWHGSOXVHTXLW\FRPSDQ\HDUQLQJVH[FOXGLQJWKHLPSDFWRIGHULYDWLYHV)RUDQ\JLYHQSHULRGWKHH[WHQWRIDFWXDOEHQHILW
RUGHWULPHQWZLOOEHGHSHQGHQWRQWKHSULFHPRYHPHQWVRILQGLYLGXDOW\SHVRIFUXGHRLOUHVXOWVRIWUDGLQJDFWLYLWLHVWD[HVDQGRWKHU
JRYHUQPHQWWDNHLPSDFWVSULFHDGMXVWPHQWODJVLQORQJWHUPJDVFRQWUDFWVDQGFUXGHDQGJDVSURGXFWLRQYROXPHV$FFRUGLQJO\
FKDQJHVLQEHQFKPDUNSULFHVIRUFUXGHRLODQGQDWXUDOJDVRQO\SURYLGHEURDGLQGLFDWRUVRIFKDQJHVLQWKHHDUQLQJVH[SHULHQFHGLQ
DQ\SDUWLFXODUSHULRG
,QWKHYHU\FRPSHWLWLYHGRZQVWUHDPDQGFKHPLFDOHQYLURQPHQWVHDUQLQJVDUHSULPDULO\GHWHUPLQHGE\PDUJLQFDSWXUHUDWKHUWKDQ
DEVROXWHSULFHOHYHOVRISURGXFWVVROG5HILQLQJPDUJLQVDUHDIXQFWLRQRIWKHGLIIHUHQFHEHWZHHQZKDWDUHILQHUSD\VIRULWVUDZ
PDWHULDOVSULPDULO\FUXGHRLODQGWKHPDUNHWSULFHVIRUWKHUDQJHRISURGXFWVSURGXFHG7KHVHSULFHVLQWXUQGHSHQGRQJOREDODQG
UHJLRQDOVXSSO\GHPDQGEDODQFHVLQYHQWRU\OHYHOVUHILQHU\RSHUDWLRQVLPSRUWH[SRUWEDODQFHVDQGZHDWKHU


0$1$*(0(17¶6',6&866,21$1'$1$/<6,62)),1$1&,$/&21',7,21$1'5(68/762)23(5$7,216

7KH JOREDO HQHUJ\ PDUNHWV FDQ JLYH ULVH WR H[WHQGHG SHULRGV LQ ZKLFK PDUNHW FRQGLWLRQV DUH DGYHUVH WR RQH RU PRUH RI WKH
&RUSRUDWLRQ¶V EXVLQHVVHV 6XFK FRQGLWLRQV DORQJ ZLWK WKH FDSLWDOLQWHQVLYH QDWXUH RI WKH LQGXVWU\ DQG YHU\ ORQJ OHDG WLPHV
DVVRFLDWHGZLWKPDQ\RIRXUSURMHFWVXQGHUVFRUHWKHLPSRUWDQFHRIPDLQWDLQLQJDVWURQJILQDQFLDOSRVLWLRQ0DQDJHPHQWYLHZVWKH
&RUSRUDWLRQ¶VILQDQFLDOVWUHQJWKDVDFRPSHWLWLYHDGYDQWDJH
,QJHQHUDOVHJPHQWUHVXOWVDUHQRWGHSHQGHQWRQWKHDELOLW\WRVHOODQGRUSXUFKDVHSURGXFWVWRIURPRWKHUVHJPHQWV,QVWHDGZKHUH
VXFKVDOHVWDNHSODFHWKH\DUHWKHUHVXOWRIHIILFLHQFLHVDQGFRPSHWLWLYHDGYDQWDJHVRILQWHJUDWHGUHILQHU\FKHPLFDOFRPSOH[HV
$GGLWLRQDOO\LQWHUVHJPHQWVDOHVDUHDWPDUNHWEDVHGSULFHV7KHSURGXFWVERXJKWDQGVROGEHWZHHQVHJPHQWVFDQDOVREHDFTXLUHG
LQZRUOGZLGHPDUNHWVWKDWKDYHVXEVWDQWLDOOLTXLGLW\FDSDFLW\DQGWUDQVSRUWDWLRQFDSDELOLWLHV$ERXWSHUFHQWRIWKH&RUSRUDWLRQ¶V
LQWHUVHJPHQW VDOHV UHSUHVHQW 8SVWUHDP SURGXFWLRQ VROG WR WKH 'RZQVWUHDP 2WKHU LQWHUVHJPHQW VDOHV LQFOXGH WKRVH EHWZHHQ
UHILQHULHVDQGFKHPLFDOSODQWVUHODWHGWRUDZPDWHULDOVIHHGVWRFNVDQGILQLVKHGSURGXFWV
$OWKRXJKSULFHOHYHOVRIFUXGHRLODQGQDWXUDOJDVPD\ULVHRUIDOOVLJQLILFDQWO\RYHUWKHVKRUWWRPHGLXPWHUPGXHWRJOREDOHFRQRPLF
FRQGLWLRQVSROLWLFDOHYHQWVGHFLVLRQVE\23(&DQGRWKHUPDMRUJRYHUQPHQWUHVRXUFHRZQHUVDQGRWKHUIDFWRUVLQGXVWU\HFRQRPLFV
RYHUWKHORQJWHUPZLOOFRQWLQXHWREHGULYHQE\PDUNHWVXSSO\DQGGHPDQG$FFRUGLQJO\WKH&RUSRUDWLRQHYDOXDWHVWKHYLDELOLW\
RILWVPDMRULQYHVWPHQWVRYHUDUDQJHRISULFHV
7KH&RUSRUDWLRQKDVDQDFWLYHDVVHWPDQDJHPHQWSURJUDPLQZKLFKXQGHUSHUIRUPLQJDVVHWVDUHHLWKHULPSURYHGWRDFFHSWDEOHOHYHOV
RUFRQVLGHUHGIRUGLYHVWPHQW7KHDVVHWPDQDJHPHQWSURJUDPLQFOXGHVDGLVFLSOLQHGUHJXODUUHYLHZWRHQVXUHWKDWDOODVVHWVDUH
FRQWULEXWLQJWRWKH&RUSRUDWLRQ¶VVWUDWHJLFREMHFWLYHVUHVXOWLQJLQDQHIILFLHQWFDSLWDOEDVH

5LVN0DQDJHPHQW
7KH&RUSRUDWLRQ¶VVL]HVWURQJFDSLWDOVWUXFWXUHJHRJUDSKLFGLYHUVLW\DQGWKHFRPSOHPHQWDU\QDWXUHRIWKH8SVWUHDP'RZQVWUHDP
DQG &KHPLFDO EXVLQHVVHV UHGXFH WKH &RUSRUDWLRQ¶V HQWHUSULVHZLGH ULVN IURP FKDQJHV LQ FRPPRGLW\ SULFHV FXUUHQF\ UDWHV DQG
LQWHUHVWUDWHV,QDGGLWLRQWKH&RUSRUDWLRQXVHVFRPPRGLW\EDVHGFRQWUDFWVLQFOXGLQJGHULYDWLYHVWRPDQDJHFRPPRGLW\SULFHULVN
DQGIRUWUDGLQJSXUSRVHV7KH&RUSRUDWLRQ¶VFRPPRGLW\GHULYDWLYHVDUHQRWDFFRXQWHGIRUXQGHUKHGJHDFFRXQWLQJ$WWLPHVWKH
&RUSRUDWLRQDOVRHQWHUVLQWRIRUZDUGFXUUHQF\DQGLQWHUHVWUDWHGHULYDWLYHVQRQHRIZKLFKDUHPDWHULDOWRWKH&RUSRUDWLRQ¶VILQDQFLDO
SRVLWLRQDVRI'HFHPEHUDQGRUUHVXOWVRIRSHUDWLRQVIRUWKH\HDUVHQGHGDQG&UHGLWULVNDVVRFLDWHG
ZLWKWKH&RUSRUDWLRQ¶VGHULYDWLYHSRVLWLRQLVPLWLJDWHGE\VHYHUDOIDFWRUVLQFOXGLQJWKHXVHRIGHULYDWLYHFOHDULQJH[FKDQJHVDQG
WKH TXDOLW\ RI DQG ILQDQFLDO OLPLWV SODFHG RQ GHULYDWLYH FRXQWHUSDUWLHV 1R PDWHULDO PDUNHW RU FUHGLW ULVNV WR WKH &RUSRUDWLRQ¶V
ILQDQFLDO SRVLWLRQ UHVXOWV RI RSHUDWLRQV RU OLTXLGLW\ H[LVW DV D UHVXOW RI WKH GHULYDWLYHV GHVFULEHG LQ 1RWH  7KH &RUSRUDWLRQ
PDLQWDLQVDV\VWHPRIFRQWUROVWKDWLQFOXGHVWKHDXWKRUL]DWLRQUHSRUWLQJDQGPRQLWRULQJRIGHULYDWLYHDFWLYLW\
7KH&RUSRUDWLRQLVH[SRVHGWRFKDQJHVLQLQWHUHVWUDWHVSULPDULO\RQLWVVKRUWWHUPGHEWDQGWKHSRUWLRQRIORQJWHUPGHEWWKDW
FDUULHVIORDWLQJLQWHUHVWUDWHV7KHLPSDFWRIDEDVLVSRLQWFKDQJHLQLQWHUHVWUDWHVDIIHFWLQJWKH&RUSRUDWLRQ¶VGHEWZRXOGQRW
EHPDWHULDOWRHDUQLQJVFDVKIORZRUIDLUYDOXH7KH&RUSRUDWLRQKDVDFFHVVWRVLJQLILFDQWFDSDFLW\RIORQJWHUPDQGVKRUWWHUP
OLTXLGLW\,QWHUQDOO\JHQHUDWHGIXQGVDUHH[SHFWHGWRFRYHUWKHPDMRULW\RIILQDQFLDOUHTXLUHPHQWVVXSSOHPHQWHGE\ORQJWHUPDQG
VKRUWWHUP GHEW 6RPH MRLQWYHQWXUH SDUWQHUV DUH GHSHQGHQW RQ WKH FUHGLW PDUNHWV DQG WKHLU IXQGLQJ DELOLW\ PD\ LPSDFW WKH
GHYHORSPHQWSDFHRIMRLQWYHQWXUHSURMHFWV
7KH&RUSRUDWLRQFRQGXFWVEXVLQHVVLQPDQ\IRUHLJQFXUUHQFLHVDQGLVVXEMHFWWRH[FKDQJHUDWHULVNRQFDVKIORZVUHODWHGWRVDOHV
H[SHQVHV ILQDQFLQJ DQG LQYHVWPHQW WUDQVDFWLRQV )OXFWXDWLRQV LQ H[FKDQJH UDWHV DUH RIWHQ RIIVHWWLQJ DQG WKH LPSDFWV RQ
([[RQ0RELO¶V JHRJUDSKLFDOO\ DQG IXQFWLRQDOO\ GLYHUVH RSHUDWLRQV DUH YDULHG 7KH &RUSRUDWLRQ PDNHV OLPLWHG XVH RI FXUUHQF\
H[FKDQJHFRQWUDFWVWRPLWLJDWHWKHLPSDFWRIFKDQJHVLQFXUUHQF\YDOXHVDQGH[SRVXUHVUHODWHGWRWKH&RUSRUDWLRQ¶VOLPLWHGXVHRI
WKHFXUUHQF\H[FKDQJHFRQWUDFWVDUHQRWPDWHULDO

,QIODWLRQDQG2WKHU8QFHUWDLQWLHV
7KHJHQHUDOUDWHRILQIODWLRQLQPDQ\PDMRUFRXQWULHVRIRSHUDWLRQKDVUHPDLQHGPRGHUDWHRYHUWKHSDVWIHZ\HDUVDQGWKHDVVRFLDWHG
LPSDFWRQQRQHQHUJ\FRVWVKDVJHQHUDOO\EHHQPLWLJDWHGE\FRVWUHGXFWLRQVIURPHIILFLHQF\DQGSURGXFWLYLW\LPSURYHPHQWV3ULFHV
IRU VHUYLFHV DQG PDWHULDOV FRQWLQXH WR HYROYH LQ UHVSRQVH WR FRQVWDQW FKDQJHV LQ FRPPRGLW\ PDUNHWV DQG LQGXVWU\ DFWLYLWLHV
LPSDFWLQJRSHUDWLQJDQGFDSLWDOFRVWV7KH&RUSRUDWLRQPRQLWRUVPDUNHWWUHQGVDQGZRUNVWRPLQLPL]HFRVWVLQDOOFRPPRGLW\SULFH
HQYLURQPHQWVWKURXJKLWVHFRQRPLHVRIVFDOHLQJOREDOSURFXUHPHQWDQGLWVHIILFLHQWSURMHFWPDQDJHPHQWSUDFWLFHV


0$1$*(0(17¶6',6&866,21$1'$1$/<6,62)),1$1&,$/&21',7,21$1'5(68/762)23(5$7,216

5(&(17/<,668('$&&2817,1*67$1'$5'6

(IIHFWLYH-DQXDU\WKH&RUSRUDWLRQDGRSWHGWKH)LQDQFLDO$FFRXQWLQJ6WDQGDUGV%RDUG¶V6WDQGDUG/HDVHV7RSLFDV
DPHQGHG7KHVWDQGDUGUHTXLUHVDOO OHDVHVWREHUHFRUGHGRQWKHEDODQFHVKHHWDVDULJKWRI XVHDVVHWDQGDOHDVHOLDELOLW\7KH
&RUSRUDWLRQXVHGDWUDQVLWLRQPHWKRGWKDWDSSOLHVWKHQHZOHDVHVWDQGDUGDW-DQXDU\DQGUHFRJQL]HVDQ\FXPXODWLYHHIIHFW
DGMXVWPHQWVWRWKHRSHQLQJEDODQFHRIUHWDLQHGHDUQLQJV7KH&RUSRUDWLRQDSSOLHGDSROLF\HOHFWLRQWRH[FOXGHVKRUWWHUP
OHDVHVIURPEDODQFHVKHHWUHFRJQLWLRQDQGDOVRHOHFWHGFHUWDLQSUDFWLFDOH[SHGLHQWVDWDGRSWLRQ$VSHUPLWWHGXQGHUWKHVHH[SHGLHQWV
WKH&RUSRUDWLRQGLGQRWUHDVVHVVZKHWKHUH[LVWLQJFRQWUDFWVDUHRUFRQWDLQOHDVHVWKHOHDVHFODVVLILFDWLRQIRUDQ\H[LVWLQJOHDVHV
LQLWLDOGLUHFWFRVWVIRUDQ\H[LVWLQJOHDVHDQGZKHWKHUH[LVWLQJODQGHDVHPHQWVDQGULJKWVRIZD\WKDWZHUHQRWSUHYLRXVO\DFFRXQWHG
IRUDVOHDVHVDUHRUFRQWDLQDOHDVH$W-DQXDU\WKHRSHUDWLQJOHDVHOLDELOLW\LVHVWLPDWHGWREHLQWKHUDQJHRIELOOLRQ
DQGWKHRSHUDWLQJOHDVHULJKWRIXVHDVVHWLVHVWLPDWHGWREHLQWKHUDQJHRIELOOLRQLQFOXGLQJDERXWELOOLRQUHODWHGWRSUHSDLG
OHDVHV7KHFXPXODWLYHHIIHFWDGMXVWPHQWLVH[SHFWHGWREHGHPLQLPLV


&5,7,&$/$&&2817,1*(67,0$7(6
7KH&RUSRUDWLRQ¶VDFFRXQWLQJDQGILQDQFLDOUHSRUWLQJIDLUO\UHIOHFWLWVLQWHJUDWHGEXVLQHVV PRGHOLQYROYLQJH[SORUDWLRQIRUDQG
SURGXFWLRQRIFUXGHRLODQGQDWXUDOJDVDQGPDQXIDFWXUHWUDGHWUDQVSRUWDQGVDOHRIFUXGHRLOQDWXUDOJDVSHWUROHXPSURGXFWV
SHWURFKHPLFDOVDQGDZLGHYDULHW\RIVSHFLDOW\SURGXFWV7KHSUHSDUDWLRQRIILQDQFLDOVWDWHPHQWVLQFRQIRUPLW\ZLWK86*HQHUDOO\
$FFHSWHG$FFRXQWLQJ3ULQFLSOHV*$$3UHTXLUHVPDQDJHPHQWWRPDNHHVWLPDWHVDQGMXGJPHQWVWKDWDIIHFWWKHUHSRUWHGDPRXQWV
RIDVVHWVOLDELOLWLHVUHYHQXHVDQGH[SHQVHVDQGWKHGLVFORVXUHRIFRQWLQJHQWDVVHWVDQGOLDELOLWLHV7KH&RUSRUDWLRQ¶VDFFRXQWLQJ
SROLFLHVDUHVXPPDUL]HGLQ1RWH

2LODQG1DWXUDO*DV5HVHUYHV
7KH HVWLPDWLRQ RI SURYHG UHVHUYHV LV DQ RQJRLQJ SURFHVV EDVHG RQ ULJRURXV WHFKQLFDO HYDOXDWLRQV FRPPHUFLDO DQG PDUNHW
DVVHVVPHQWVDQGGHWDLOHGDQDO\VLVRIZHOOLQIRUPDWLRQVXFKDVIORZUDWHVDQGUHVHUYRLUSUHVVXUHGHFOLQHVDPRQJRWKHUIDFWRUV7KH
HVWLPDWLRQRISURYHGUHVHUYHVLVFRQWUROOHGE\WKH&RUSRUDWLRQ WKURXJKORQJVWDQGLQJDSSURYDOJXLGHOLQHV5HVHUYHFKDQJHVDUH
PDGHZLWKLQDZHOOHVWDEOLVKHGGLVFLSOLQHGSURFHVVGULYHQE\VHQLRUOHYHOJHRVFLHQFHDQGHQJLQHHULQJSURIHVVLRQDOVDVVLVWHGE\
WKH *OREDO 5HVHUYHV JURXS ZKLFK KDV VLJQLILFDQW WHFKQLFDO H[SHULHQFH FXOPLQDWLQJ LQ UHYLHZV ZLWK DQG DSSURYDO E\ VHQLRU
PDQDJHPHQW1RWDEO\WKH&RUSRUDWLRQGRHVQRWXVHVSHFLILFTXDQWLWDWLYHUHVHUYHWDUJHWVWRGHWHUPLQHFRPSHQVDWLRQ.H\IHDWXUHV
RIWKHUHVHUYHHVWLPDWLRQSURFHVVDUHFRYHUHGLQ'LVFORVXUHRI5HVHUYHVLQ,WHPRI([[RQ0RELO¶V)RUP.
2LODQGQDWXUDOJDVUHVHUYHVLQFOXGHERWKSURYHGDQGXQSURYHGUHVHUYHV
x 3URYHG RLO DQG QDWXUDO JDV UHVHUYHV DUH GHWHUPLQHG LQ DFFRUGDQFH ZLWK 6HFXULWLHV DQG ([FKDQJH &RPPLVVLRQ 6(&
UHTXLUHPHQWV3URYHGUHVHUYHVDUHWKRVHTXDQWLWLHVRIRLODQGQDWXUDOJDVZKLFKE\DQDO\VLVRIJHRVFLHQFHDQGHQJLQHHULQJ
GDWD FDQ EH HVWLPDWHG ZLWK UHDVRQDEOH FHUWDLQW\ WR EH HFRQRPLFDOO\ SURGXFLEOH XQGHU H[LVWLQJ HFRQRPLF DQG RSHUDWLQJ
FRQGLWLRQVDQGJRYHUQPHQWUHJXODWLRQV3URYHGUHVHUYHVDUHGHWHUPLQHGXVLQJWKHDYHUDJHRIILUVWRIPRQWKRLODQGQDWXUDO
JDVSULFHVGXULQJWKHUHSRUWLQJ\HDU
3URYHGUHVHUYHV FDQ EH IXUWKHU VXEGLYLGHG LQWR GHYHORSHG DQG XQGHYHORSHG UHVHUYHV 3URYHG GHYHORSHG UHVHUYHV LQFOXGH
DPRXQWVZKLFKDUHH[SHFWHGWREHUHFRYHUHGWKURXJKH[LVWLQJZHOOVZLWKH[LVWLQJHTXLSPHQWDQGRSHUDWLQJPHWKRGV3URYHG
XQGHYHORSHGUHVHUYHVLQFOXGHDPRXQWVH[SHFWHGWREHUHFRYHUHGIURPQHZZHOOVRQXQGULOOHGSURYHGDFUHDJHRUIURPH[LVWLQJ
ZHOOVZKHUHDUHODWLYHO\PDMRUH[SHQGLWXUHLVUHTXLUHGIRUFRPSOHWLRQ3URYHGXQGHYHORSHGUHVHUYHVDUHUHFRJQL]HGRQO\LID
GHYHORSPHQWSODQKDVEHHQDGRSWHGLQGLFDWLQJWKDWWKHUHVHUYHVDUHVFKHGXOHGWREHGULOOHGZLWKLQILYH\HDUVXQOHVVVSHFLILF
FLUFXPVWDQFHVVXSSRUWDORQJHUSHULRGRIWLPH
7KH SHUFHQWDJH RI SURYHG GHYHORSHG UHVHUYHV ZDV  SHUFHQW RI WRWDO SURYHG UHVHUYHV DW \HDUHQG  LQFOXGLQJ ERWK
FRQVROLGDWHGDQGHTXLW\FRPSDQ\UHVHUYHVDQLQFUHDVHIURPSHUFHQWLQDQGKDVEHHQRYHUSHUFHQWIRUWKHODVW
WHQ \HDUV $OWKRXJK WKH &RUSRUDWLRQ LV UHDVRQDEO\ FHUWDLQ WKDW SURYHG UHVHUYHV ZLOO EH SURGXFHG WKH WLPLQJ DQG DPRXQW
UHFRYHUHG FDQ EH DIIHFWHG E\ D QXPEHU RI IDFWRUV LQFOXGLQJ FRPSOHWLRQ RI GHYHORSPHQW SURMHFWV UHVHUYRLU SHUIRUPDQFH
UHJXODWRU\ DSSURYDOV JRYHUQPHQW SROLF\ FRQVXPHU SUHIHUHQFHV DQG VLJQLILFDQW FKDQJHV LQ ORQJWHUP RLO DQG QDWXUDO JDV
SULFHV
x 8QSURYHG UHVHUYHV DUH TXDQWLWLHV RI RLO DQG QDWXUDO JDV ZLWK OHVV WKDQ UHDVRQDEOH FHUWDLQW\ RI UHFRYHUDELOLW\ DQG LQFOXGH
SUREDEOHUHVHUYHV3UREDEOHUHVHUYHVDUHUHVHUYHVWKDWWRJHWKHUZLWKSURYHGUHVHUYHVDUHDVOLNHO\DVQRWWREHUHFRYHUHG
5HYLVLRQVLQSUHYLRXVO\HVWLPDWHGYROXPHVRISURYHGUHVHUYHVIRUH[LVWLQJILHOGVFDQRFFXUGXHWRWKHHYDOXDWLRQRUUHHYDOXDWLRQ
RIDOUHDG\DYDLODEOHJHRORJLFUHVHUYRLURUSURGXFWLRQGDWDQHZJHRORJLFUHVHUYRLURUSURGXFWLRQGDWDRUFKDQJHVLQWKH
DYHUDJHRIILUVWRIPRQWKRLODQGQDWXUDOJDVSULFHVDQGRUFRVWVWKDWDUHXVHGLQWKHHVWLPDWLRQRIUHVHUYHV5HYLVLRQVFDQDOVR
UHVXOWIURPVLJQLILFDQWFKDQJHVLQGHYHORSPHQWVWUDWHJ\RUSURGXFWLRQHTXLSPHQWDQGIDFLOLW\FDSDFLW\


0$1$*(0(17¶6',6&866,21$1'$1$/<6,62)),1$1&,$/&21',7,21$1'5(68/762)23(5$7,216

8QLWRI3URGXFWLRQ'HSUHFLDWLRQ
2LODQGQDWXUDOJDVUHVHUYHTXDQWLWLHVDUHXVHGDVWKHEDVLVWRFDOFXODWHXQLWRISURGXFWLRQGHSUHFLDWLRQUDWHVIRUPRVWXSVWUHDP
DVVHWV'HSUHFLDWLRQLVFDOFXODWHGE\WDNLQJWKHUDWLRRIDVVHWFRVWWRWRWDOSURYHGUHVHUYHVRUSURYHGGHYHORSHGUHVHUYHVDSSOLHGWR
DFWXDOSURGXFWLRQ7KHYROXPHVSURGXFHGDQGDVVHWFRVWDUHNQRZQZKLOHSURYHGUHVHUYHVDUHEDVHGRQHVWLPDWHVWKDWDUHVXEMHFW
WRVRPHYDULDELOLW\
,Q WKH HYHQW WKDW WKH XQLWRISURGXFWLRQ PHWKRG GRHV QRW UHVXOW LQ DQ HTXLWDEOH DOORFDWLRQ RI FRVW RYHU WKH HFRQRPLF OLIH RI DQ
XSVWUHDPDVVHWDQDOWHUQDWLYHPHWKRGLVXVHG7KHVWUDLJKWOLQHPHWKRGPD\EHXVHGLQOLPLWHGVLWXDWLRQVZKHUHWKHH[SHFWHGOLIHRI
WKHDVVHWGRHVQRWUHDVRQDEO\FRUUHODWHZLWKWKDWRIWKHXQGHUO\LQJUHVHUYHV)RUH[DPSOHFHUWDLQDVVHWVXVHGLQWKHSURGXFWLRQRI
RLODQGQDWXUDOJDVKDYHDVKRUWHUOLIHWKDQWKHUHVHUYHVDQGDVVXFKWKH&RUSRUDWLRQXVHVVWUDLJKWOLQHGHSUHFLDWLRQWRHQVXUHWKH
DVVHWLVIXOO\GHSUHFLDWHGE\WKHHQGRILWVXVHIXOOLIH
7RWKHH[WHQWWKDWSURYHGUHVHUYHVIRUDSURSHUW\DUHVXEVWDQWLDOO\GHERRNHGDQGWKDWSURSHUW\FRQWLQXHVWRSURGXFHVXFKWKDWWKH
UHVXOWLQJGHSUHFLDWLRQFKDUJHGRHVQRWUHVXOWLQDQHTXLWDEOHDOORFDWLRQRIFRVWRYHUWKHH[SHFWHGOLIHDVVHWVZLOOEHGHSUHFLDWHGXVLQJ
DXQLWRISURGXFWLRQPHWKRGEDVHGRQUHVHUYHVGHWHUPLQHGDWWKHPRVWUHFHQW6(&SULFHZKLFKUHVXOWVLQDPRUHPHDQLQJIXOTXDQWLW\
RISURYHGUHVHUYHVDSSURSULDWHO\DGMXVWHGIRUSURGXFWLRQDQGWHFKQLFDOFKDQJHV7KHHIIHFWRIWKLVDSSURDFKRQWKH&RUSRUDWLRQ¶V
GHSUHFLDWLRQH[SHQVHYHUVXVZDVLPPDWHULDO
,PSDLUPHQW
7KH&RUSRUDWLRQWHVWVDVVHWVRUJURXSVRIDVVHWVIRUUHFRYHUDELOLW\RQDQRQJRLQJEDVLVZKHQHYHUHYHQWVRUFKDQJHVLQFLUFXPVWDQFHV
LQGLFDWHWKDWWKHFDUU\LQJDPRXQWVPD\QRWEHUHFRYHUDEOH$PRQJWKHHYHQWVRUFKDQJHVLQFLUFXPVWDQFHVZKLFKFRXOGLQGLFDWH
WKDWWKHFDUU\LQJYDOXHRIDQDVVHWRUDVVHWJURXSPD\QRWEHUHFRYHUDEOHDUHWKHIROORZLQJ
x DVLJQLILFDQWGHFUHDVHLQWKHPDUNHWSULFHRIDORQJOLYHGDVVHW
x DVLJQLILFDQWDGYHUVHFKDQJHLQWKHH[WHQWRUPDQQHULQZKLFKDQDVVHWLVEHLQJXVHGRULQLWVSK\VLFDOFRQGLWLRQLQFOXGLQJD
VLJQLILFDQWGHFUHDVHLQFXUUHQWDQGSURMHFWHGUHVHUYHYROXPHV
x DVLJQLILFDQWDGYHUVHFKDQJHLQOHJDOIDFWRUVRULQWKHEXVLQHVVFOLPDWHWKDWFRXOGDIIHFWWKHYDOXHLQFOXGLQJDQDGYHUVHDFWLRQ
RUDVVHVVPHQWE\DUHJXODWRU
x DQDFFXPXODWLRQRISURMHFWFRVWVVLJQLILFDQWO\LQH[FHVVRIWKHDPRXQWRULJLQDOO\H[SHFWHG
x DFXUUHQWSHULRGRSHUDWLQJORVVFRPELQHGZLWKDKLVWRU\DQGIRUHFDVWRIRSHUDWLQJRUFDVKIORZORVVHVDQG
x DFXUUHQWH[SHFWDWLRQWKDWPRUHOLNHO\WKDQQRWDORQJOLYHGDVVHWZLOOEHVROGRURWKHUZLVHGLVSRVHGRIVLJQLILFDQWO\EHIRUH
WKHHQGRILWVSUHYLRXVO\HVWLPDWHGXVHIXOOLIH
$VVHWYDOXDWLRQDQDO\VHVSHUIRUPHGDVSDUWRILWVDVVHWPDQDJHPHQWSURJUDPDQGRWKHUSURILWDELOLW\UHYLHZVDVVLVWWKH&RUSRUDWLRQ
LQDVVHVVLQJZKHWKHUHYHQWVRUFKDQJHVLQFLUFXPVWDQFHVLQGLFDWHWKHFDUU\LQJDPRXQWVRIDQ\RILWVDVVHWVPD\QRWEHUHFRYHUDEOH
,QJHQHUDOWKH&RUSRUDWLRQGRHVQRWYLHZWHPSRUDULO\ORZSULFHVRUPDUJLQVDVDQLQGLFDWLRQRILPSDLUPHQW0DQDJHPHQWEHOLHYHV
WKDWSULFHVRYHUWKHORQJWHUPPXVWEHVXIILFLHQWWRJHQHUDWHLQYHVWPHQWVLQHQHUJ\VXSSO\WRPHHWJOREDOGHPDQG$OWKRXJKSULFHV
ZLOORFFDVLRQDOO\GURSVLJQLILFDQWO\LQGXVWU\SULFHVRYHUWKHORQJWHUPZLOOFRQWLQXHWREHGULYHQE\PDUNHWVXSSO\DQGGHPDQG
IXQGDPHQWDOV 2Q WKH VXSSO\ VLGH LQGXVWU\ SURGXFWLRQ IURP PDWXUH ILHOGV LV GHFOLQLQJ 7KLV LV EHLQJ RIIVHW E\ LQYHVWPHQWV WR
JHQHUDWHSURGXFWLRQIURP QHZGLVFRYHULHVILHOGGHYHORSPHQWVDQGWHFKQRORJ\DQGHIILFLHQF\DGYDQFHPHQWV23(&LQYHVWPHQW
DFWLYLWLHV DQG SURGXFWLRQ SROLFLHV DOVR KDYH DQ LPSDFW RQ ZRUOG RLO VXSSOLHV 7KH GHPDQG VLGH LV ODUJHO\ D IXQFWLRQ RI JHQHUDO
HFRQRPLF DFWLYLWLHV DQG OHYHOV RI SURVSHULW\ %HFDXVH WKH OLIHVSDQV RI WKH YDVW PDMRULW\ RI WKH &RUSRUDWLRQ¶V PDMRU DVVHWV DUH
PHDVXUHG LQ GHFDGHV WKH YDOXH RI WKHVH DVVHWV LV SUHGRPLQDQWO\ EDVHG RQ ORQJWHUP YLHZV RI IXWXUH FRPPRGLW\ SULFHV DQG
SURGXFWLRQFRVWV'XULQJWKHOLIHVSDQRIWKHVHPDMRUDVVHWVWKH&RUSRUDWLRQH[SHFWVWKDWRLODQGJDVSULFHVZLOOH[SHULHQFHVLJQLILFDQW
YRODWLOLW\DQGFRQVHTXHQWO\WKHVHDVVHWVZLOOH[SHULHQFHSHULRGVRIKLJKHUHDUQLQJVDQGSHULRGVRIORZHUHDUQLQJVRUHYHQORVVHV
,QDVVHVVLQJZKHWKHUWKHHYHQWVRUFKDQJHVLQFLUFXPVWDQFHVLQGLFDWHWKHFDUU\LQJYDOXHRIDQDVVHWPD\QRWEHUHFRYHUDEOHWKH
&RUSRUDWLRQFRQVLGHUVUHFHQWSHULRGVRIRSHUDWLQJORVVHVLQWKHFRQWH[WRILWVORQJHUWHUPYLHZRISULFHV:KLOHQHDUWHUPSULFHVDUH
VXEMHFWWRZLGHIOXFWXDWLRQVORQJHUWHUPSULFHYLHZVDUHPRUHVWDEOHDQGPHDQLQJIXOIRUSXUSRVHVRIDVVHVVLQJIXWXUHFDVKIORZV
:KHQWKHLQGXVWU\H[SHULHQFHVDSURORQJHGDQGGHHSUHGXFWLRQLQFRPPRGLW\SULFHVWKHPDUNHWVXSSO\DQGGHPDQGFRQGLWLRQV
PD\UHVXOWLQFKDQJHVWRWKH&RUSRUDWLRQ¶VORQJWHUPSULFHRUPDUJLQDVVXPSWLRQVLWXVHVIRULWVFDSLWDOLQYHVWPHQWGHFLVLRQV7R
WKHH[WHQWWKRVHFKDQJHVUHVXOWLQDVLJQLILFDQWUHGXFWLRQWRLWVORQJWHUPRLOSULFHQDWXUDOJDVSULFHRUPDUJLQUDQJHVWKH&RUSRUDWLRQ
PD\FRQVLGHUWKDWVLWXDWLRQLQFRQMXQFWLRQZLWKRWKHUHYHQWVRUFKDQJHVLQFLUFXPVWDQFHVVXFKDVDKLVWRU\RIRSHUDWLQJORVVHVDQ
LQGLFDWRURISRWHQWLDOLPSDLUPHQWIRUFHUWDLQDVVHWV
 


0$1$*(0(17¶6',6&866,21$1'$1$/<6,62)),1$1&,$/&21',7,21$1'5(68/762)23(5$7,216

,QWKH8SVWUHDPWKHVWDQGDUGL]HGPHDVXUHRIGLVFRXQWHGFDVKIORZVLQFOXGHGLQWKH6XSSOHPHQWDO,QIRUPDWLRQRQ2LODQG*DV
([SORUDWLRQDQG3URGXFWLRQ$FWLYLWLHVLVUHTXLUHGWRXVHSULFHVEDVHGRQWKHDYHUDJHRIILUVWRIPRQWKSULFHV7KHVHSULFHVUHSUHVHQW
GLVFUHWH SRLQWV LQ WLPH DQG FRXOG EH KLJKHU RU ORZHU WKDQ WKH &RUSRUDWLRQ¶V ORQJWHUP SULFH DVVXPSWLRQV ZKLFK DUH XVHG IRU
LPSDLUPHQWDVVHVVPHQWV7KH&RUSRUDWLRQEHOLHYHVWKHVWDQGDUGL]HGPHDVXUHGRHVQRWSURYLGHDUHOLDEOHHVWLPDWHRIWKHH[SHFWHG
IXWXUHFDVKIORZVWREHREWDLQHGIURPWKHGHYHORSPHQWDQGSURGXFWLRQRILWVRLODQGJDVSURSHUWLHVRURIWKHYDOXHRILWVRLODQGJDV
UHVHUYHVDQGWKHUHIRUHGRHVQRWFRQVLGHULWUHOHYDQWLQGHWHUPLQLQJZKHWKHUHYHQWVRUFKDQJHVLQFLUFXPVWDQFHVLQGLFDWHWKHQHHG
IRUDQLPSDLUPHQWDVVHVVPHQW
,IHYHQWVRUFKDQJHVLQFLUFXPVWDQFHVLQGLFDWHWKDWWKHFDUU\LQJYDOXHRIDQDVVHWPD\QRWEHUHFRYHUDEOHWKH&RUSRUDWLRQHVWLPDWHV
WKHIXWXUHXQGLVFRXQWHGFDVKIORZVRIWKHDIIHFWHGSURSHUWLHVWRMXGJHWKHUHFRYHUDELOLW\RIFDUU\LQJDPRXQWV,QSHUIRUPLQJWKLV
DVVHVVPHQWDVVHWVDUHJURXSHGDWWKHORZHVWOHYHOIRUZKLFKWKHUHDUHLGHQWLILDEOHFDVKIORZVWKDWDUHODUJHO\LQGHSHQGHQWRIWKH
FDVKIORZVRIRWKHUJURXSVRIDVVHWV&DVKIORZVXVHGLQUHFRYHUDELOLW\DVVHVVPHQWVDUHEDVHGRQWKH&RUSRUDWLRQ¶VDVVXPSWLRQV
ZKLFKDUHGHYHORSHGLQWKHDQQXDOSODQQLQJDQGEXGJHWLQJSURFHVVDQGDUHFRQVLVWHQWZLWKWKHFULWHULDPDQDJHPHQWXVHVWRHYDOXDWH
LQYHVWPHQWRSSRUWXQLWLHV7KHVHHYDOXDWLRQVPDNHXVHRIWKH&RUSRUDWLRQ¶VDVVXPSWLRQVRIIXWXUHFDSLWDODOORFDWLRQVFUXGHRLODQG
QDWXUDOJDVFRPPRGLW\SULFHVUHILQLQJDQGFKHPLFDOPDUJLQVYROXPHVFRVWVDQGIRUHLJQFXUUHQF\H[FKDQJHUDWHV9ROXPHVDUH
EDVHGRQSURMHFWHGILHOGDQGIDFLOLW\SURGXFWLRQSURILOHVWKURXJKSXWRUVDOHV:KHUHXQSURYHGUHVHUYHVH[LVWDQDSSURSULDWHO\ULVN
DGMXVWHGDPRXQWRIWKHVHUHVHUYHVPD\EHLQFOXGHGLQWKHHYDOXDWLRQ&DVKIORZHVWLPDWHVIRULPSDLUPHQWWHVWLQJH[FOXGHWKHHIIHFWV
RIGHULYDWLYHLQVWUXPHQWV
$Q DVVHW JURXS LV LPSDLUHG LI LWV HVWLPDWHG XQGLVFRXQWHG FDVK IORZV DUH OHVV WKDQ WKH DVVHW¶V FDUU\LQJ YDOXH ,PSDLUPHQWV DUH
PHDVXUHGE\WKHDPRXQWE\ZKLFKWKHFDUU\LQJYDOXHH[FHHGVIDLUYDOXH)DLUYDOXHLVEDVHGRQPDUNHWSULFHVLIDQDFWLYHPDUNHW
H[LVWV IRU WKH DVVHW JURXS RU GLVFRXQWHG FDVK IORZV XVLQJ D GLVFRXQW UDWH FRPPHQVXUDWH ZLWK WKH ULVN 6LJQLILFDQW XQSURYHG
SURSHUWLHVDUHDVVHVVHGIRULPSDLUPHQWLQGLYLGXDOO\DQGYDOXDWLRQDOORZDQFHVDJDLQVWWKHFDSLWDOL]HGFRVWVDUHUHFRUGHGEDVHGRQ
WKHHVWLPDWHGHFRQRPLFFKDQFHRIVXFFHVVDQGWKHOHQJWKRIWLPHWKDWWKH&RUSRUDWLRQH[SHFWVWRKROGWKHSURSHUWLHV3URSHUWLHVWKDW
DUHQRWLQGLYLGXDOO\VLJQLILFDQWDUHDJJUHJDWHGE\JURXSVDQGDPRUWL]HGEDVHGRQGHYHORSPHQWULVNDQGDYHUDJHKROGLQJSHULRG
7KH&RUSRUDWLRQKDVDUREXVWSURFHVVWRPRQLWRUIRULQGLFDWRUVRISRWHQWLDOLPSDLUPHQWDFURVVLWVDVVHWJURXSVWKURXJKRXWWKH\HDU
7KLVSURFHVVLVDOLJQHGZLWKWKHUHTXLUHPHQWVRI$6&DQGUHOLHVLQSDUWRQWKH&RUSRUDWLRQ¶VSODQQLQJDQGEXGJHWLQJF\FOH,Q
WKH&RUSRUDWLRQLGHQWLILHGDQXPEHURIVLWXDWLRQVZKHUHHYHQWVRUFKDQJHVLQFLUFXPVWDQFHVLQGLFDWHGWKDWWKHFDUU\LQJYDOXH
RI FHUWDLQ ORQJOLYHG DVVHWV PDLQO\ LQ 1RUWK $PHULFD PD\ QRW EH UHFRYHUDEOH $FFRUGLQJO\ LPSDLUPHQW DVVHVVPHQWV ZHUH
SHUIRUPHGZKLFKLQGLFDWHGWKDWFHUWDLQDVVHWJURXSVDVVHVVHGKDYHIXWXUHXQGLVFRXQWHGFDVKIORZHVWLPDWHVWKDWGRQRWUHFRYHUWKHLU
FDUU\LQJYDOXHV7KH&RUSRUDWLRQ¶VUHVXOWVLQFOXGHDIWHUWD[FKDUJHVRIELOOLRQWRUHGXFHWKHFDUU\LQJYDOXHRIWKRVHDVVHWV
WRIDLUYDOXH
7KHDVVHVVPHQWRIIDLUYDOXHVUHTXLUHGWKHXVHRI/HYHOLQSXWVDQGDVVXPSWLRQVWKDWDUHEDVHGXSRQWKHYLHZVRIDOLNHO\PDUNHW
SDUWLFLSDQW7KHSULQFLSDOSDUDPHWHUVXVHGWRHVWDEOLVKIDLUYDOXHVLQFOXGHGHVWLPDWHVRIERWKSURYHGDQGXQSURYHGUHVHUYHVIXWXUH
FRPPRGLW\SULFHVZKLFKZHUHFRQVLVWHQWZLWKWKHDYHUDJHRIWKLUGSDUW\LQGXVWU\H[SHUWVDQGJRYHUQPHQWDJHQFLHVGULOOLQJDQG
GHYHORSPHQWFRVWVGLVFRXQWUDWHVUDQJLQJ IURPSHUFHQWWRSHUFHQWGHSHQGLQJRQWKHFKDUDFWHULVWLFVRI WKHDVVHWJURXSDQG
FRPSDUDEOHPDUNHWWUDQVDFWLRQV)DFWRUVZKLFKFRXOGSXWIXUWKHUDVVHWVDWULVNRILPSDLUPHQWLQWKHIXWXUHLQFOXGHUHGXFWLRQVLQWKH
&RUSRUDWLRQ¶VORQJWHUPSULFHRXWORRNVFKDQJHVLQWKHDOORFDWLRQRIFDSLWDODQGRSHUDWLQJFRVWLQFUHDVHVZKLFKH[FHHGWKHSDFHRI
HIILFLHQFLHVRUWKHSDFHRIRLODQGQDWXUDOJDVSULFHLQFUHDVHV+RZHYHUGXHWRWKHLQKHUHQWGLIILFXOW\LQSUHGLFWLQJIXWXUHFRPPRGLW\
SULFHVDQGWKHUHODWLRQVKLSEHWZHHQLQGXVWU\SULFHVDQGFRVWVLWLVQRWSUDFWLFDEOHWRUHDVRQDEO\HVWLPDWHWKHH[LVWHQFHRUUDQJHRI
DQ\SRWHQWLDOIXWXUHLPSDLUPHQWFKDUJHVUHODWHGWRWKH&RUSRUDWLRQ¶VORQJOLYHGDVVHWV

$VVHW5HWLUHPHQW2EOLJDWLRQV
7KH&RUSRUDWLRQLQFXUVUHWLUHPHQWREOLJDWLRQVIRUFHUWDLQDVVHWV7KHIDLUYDOXHVRIWKHVHREOLJDWLRQVDUHUHFRUGHGDVOLDELOLWLHVRQD
GLVFRXQWHG EDVLV ZKLFK LV W\SLFDOO\ DW WKH WLPH WKH DVVHWV DUH LQVWDOOHG ,Q WKH HVWLPDWLRQ RI IDLU YDOXH WKH &RUSRUDWLRQ XVHV
DVVXPSWLRQVDQGMXGJPHQWVUHJDUGLQJVXFKIDFWRUVDVWKHH[LVWHQFHRIDOHJDOREOLJDWLRQIRUDQDVVHWUHWLUHPHQWREOLJDWLRQWHFKQLFDO
DVVHVVPHQWV RI WKH DVVHWV HVWLPDWHG DPRXQWV DQG WLPLQJ RI VHWWOHPHQWV GLVFRXQW UDWHV DQG LQIODWLRQ UDWHV $VVHW UHWLUHPHQW
REOLJDWLRQVDUHGLVFORVHGLQ1RWHWRWKHILQDQFLDOVWDWHPHQWV

6XVSHQGHG([SORUDWRU\:HOO&RVWV
7KH&RUSRUDWLRQFRQWLQXHVFDSLWDOL]DWLRQRIH[SORUDWRU\ ZHOOFRVWV ZKHQWKH ZHOOKDV IRXQGDVXIILFLHQWTXDQWLW\RIUHVHUYHVWR
MXVWLI\LWVFRPSOHWLRQDVDSURGXFLQJZHOODQGWKH&RUSRUDWLRQLVPDNLQJVXIILFLHQWSURJUHVVDVVHVVLQJWKHUHVHUYHVDQGWKHHFRQRPLF
DQG RSHUDWLQJ YLDELOLW\ RI WKH SURMHFW ([SORUDWRU\ ZHOO FRVWV QRW PHHWLQJ WKHVH FULWHULD DUH FKDUJHG WR H[SHQVH 7KH IDFWV DQG
FLUFXPVWDQFHV WKDW VXSSRUW FRQWLQXHG FDSLWDOL]DWLRQ RI VXVSHQGHG ZHOOV DW \HDUHQG DUH GLVFORVHG LQ 1RWH  WR WKH ILQDQFLDO
VWDWHPHQWV



0$1$*(0(17¶6',6&866,21$1'$1$/<6,62)),1$1&,$/&21',7,21$1'5(68/762)23(5$7,216

&RQVROLGDWLRQV
7KH &RQVROLGDWHG )LQDQFLDO 6WDWHPHQWV LQFOXGH WKH DFFRXQWV RI VXEVLGLDULHV WKH &RUSRUDWLRQ FRQWUROV 7KH\ DOVR LQFOXGH WKH
&RUSRUDWLRQ¶VVKDUHRIWKHXQGLYLGHGLQWHUHVWLQFHUWDLQXSVWUHDPDVVHWVOLDELOLWLHVUHYHQXHVDQGH[SHQVHV$PRXQWVUHSUHVHQWLQJ
WKH&RUSRUDWLRQ¶VLQWHUHVWLQHQWLWLHVWKDWLWGRHVQRWFRQWUROEXWRYHUZKLFKLWH[HUFLVHVVLJQLILFDQWLQIOXHQFHDUHDFFRXQWHGIRU
XVLQJWKHHTXLW\PHWKRGRIDFFRXQWLQJ
,QYHVWPHQWVLQFRPSDQLHVWKDWDUHSDUWLDOO\RZQHGE\WKH&RUSRUDWLRQDUHLQWHJUDOWRWKH&RUSRUDWLRQ¶VRSHUDWLRQV,QVRPHFDVHV
WKH\VHUYHWREDODQFHZRUOGZLGHULVNVDQGLQRWKHUVWKH\SURYLGHWKHRQO\DYDLODEOHPHDQVRIHQWU\LQWRDSDUWLFXODUPDUNHWRUDUHD
RI LQWHUHVW 7KH RWKHU SDUWLHV ZKR DOVR KDYH DQ HTXLW\ LQWHUHVW LQ WKHVH FRPSDQLHV DUH HLWKHU LQGHSHQGHQW WKLUG SDUWLHV RU KRVW
JRYHUQPHQWVWKDWVKDUHLQWKHEXVLQHVVUHVXOWVDFFRUGLQJWRWKHLURZQHUVKLS7KH&RUSRUDWLRQGRHVQRWLQYHVWLQWKHVHFRPSDQLHVLQ
RUGHU WR UHPRYH OLDELOLWLHV IURP LWV EDODQFH VKHHW ,Q IDFW WKH &RUSRUDWLRQ KDV ORQJ EHHQ RQ UHFRUG VXSSRUWLQJ DQ DOWHUQDWLYH
DFFRXQWLQJPHWKRGWKDWZRXOGUHTXLUHHDFKLQYHVWRUWRFRQVROLGDWHLWVVKDUHRIDOODVVHWVDQGOLDELOLWLHVLQWKHVHSDUWLDOO\RZQHG
FRPSDQLHVUDWKHUWKDQRQO\LWVLQWHUHVWLQQHWHTXLW\7KLVPHWKRGRIDFFRXQWLQJIRULQYHVWPHQWVLQSDUWLDOO\RZQHGFRPSDQLHVLV
QRWSHUPLWWHGE\86*$$3H[FHSWZKHUHWKHLQYHVWPHQWVDUHLQWKHGLUHFWRZQHUVKLSRIDVKDUHRIXSVWUHDPDVVHWVDQGOLDELOLWLHV
+RZHYHU IRU SXUSRVHV RI FDOFXODWLQJ UHWXUQ RQ DYHUDJH FDSLWDO HPSOR\HG ZKLFK LV QRW FRYHUHG E\ 86 *$$3 VWDQGDUGV WKH
&RUSRUDWLRQLQFOXGHVLWVVKDUHRIGHEWRIWKHVHSDUWLDOO\RZQHGFRPSDQLHVLQWKHGHWHUPLQDWLRQRIDYHUDJHFDSLWDOHPSOR\HG

3HQVLRQ%HQHILWV
7KH&RUSRUDWLRQDQGLWVDIILOLDWHVVSRQVRUQHDUO\GHILQHGEHQHILWSHQVLRQSODQVLQRYHUFRXQWULHV7KH3HQVLRQDQG2WKHU
3RVWUHWLUHPHQW%HQHILWVIRRWQRWH1RWHSURYLGHVGHWDLOVRQSHQVLRQREOLJDWLRQVIXQGDVVHWVDQGSHQVLRQH[SHQVH
6RPH RI WKHVH SODQV SULPDULO\ QRQ86 SURYLGH SHQVLRQ EHQHILWV WKDW DUH SDLG GLUHFWO\ E\ WKHLU VSRQVRULQJ DIILOLDWHV RXW RI
FRUSRUDWHFDVKIORZUDWKHUWKDQDVHSDUDWHSHQVLRQIXQGEHFDXVHDSSOLFDEOHWD[UXOHVDQGUHJXODWRU\SUDFWLFHVGRQRWHQFRXUDJH
DGYDQFHIXQGLQJ%RRNUHVHUYHVDUHHVWDEOLVKHGIRUWKHVHSODQV7KHSRUWLRQRIWKHSHQVLRQFRVWDWWULEXWDEOHWRHPSOR\HHVHUYLFHLV
H[SHQVHGDV VHUYLFHVDUHUHQGHUHG7KHSRUWLRQDWWULEXWDEOHWRWKHLQFUHDVHLQSHQVLRQREOLJDWLRQVGXHWRWKHSDVVDJHRIWLPHLV
H[SHQVHGRYHUWKHWHUPRIWKHREOLJDWLRQVZKLFKHQGVZKHQDOOEHQHILWVDUHSDLG7KHSULPDU\GLIIHUHQFHLQSHQVLRQH[SHQVHIRU
XQIXQGHGYHUVXVIXQGHGSODQVLVWKDWSHQVLRQH[SHQVHIRUIXQGHGSODQVDOVRLQFOXGHVDFUHGLWIRUWKHH[SHFWHGORQJWHUPUHWXUQRQ
IXQGDVVHWV
)RUIXQGHGSODQVLQFOXGLQJWKRVHLQWKH86SHQVLRQREOLJDWLRQVDUHILQDQFHGLQDGYDQFHWKURXJKVHJUHJDWHGDVVHWVRULQVXUDQFH
DUUDQJHPHQWV 7KHVH SODQV DUH PDQDJHG LQ FRPSOLDQFH ZLWK WKH UHTXLUHPHQWV RI JRYHUQPHQWDO DXWKRULWLHV DQG PHHW RU H[FHHG
UHTXLUHG IXQGLQJ OHYHOV DV PHDVXUHG E\ UHOHYDQW DFWXDULDO DQG JRYHUQPHQW VWDQGDUGV DW WKH PDQGDWHG PHDVXUHPHQW GDWHV ,Q
GHWHUPLQLQJOLDELOLWLHVDQGUHTXLUHGFRQWULEXWLRQVWKHVHVWDQGDUGVRIWHQUHTXLUHDSSURDFKHVDQGDVVXPSWLRQVWKDWGLIIHUIURPWKRVH
XVHGIRUDFFRXQWLQJSXUSRVHV
7KH&RUSRUDWLRQZLOOFRQWLQXHWRPDNHFRQWULEXWLRQVWRWKHVHIXQGHGSODQVDVQHFHVVDU\$OOGHILQHGEHQHILWSHQVLRQREOLJDWLRQV
UHJDUGOHVVRIWKH IXQGLQJ VWDWXVRI WKH XQGHUO\LQJSODQVDUHIXOO\ VXSSRUWHGE\WKH ILQDQFLDOVWUHQJWKRIWKH&RUSRUDWLRQRUWKH
UHVSHFWLYHVSRQVRULQJDIILOLDWH
3HQVLRQDFFRXQWLQJUHTXLUHVH[SOLFLWDVVXPSWLRQVUHJDUGLQJDPRQJRWKHUVWKHORQJWHUPH[SHFWHGHDUQLQJVUDWHRQIXQGDVVHWVWKH
GLVFRXQW UDWH IRU WKH EHQHILW REOLJDWLRQV DQG WKH ORQJWHUP UDWH IRU IXWXUH VDODU\ LQFUHDVHV 3HQVLRQ DVVXPSWLRQV DUH UHYLHZHG
DQQXDOO\E\RXWVLGHDFWXDULHVDQGVHQLRUPDQDJHPHQW7KHVHDVVXPSWLRQVDUHDGMXVWHGDVDSSURSULDWHWRUHIOHFWFKDQJHVLQPDUNHW
UDWHVDQGRXWORRN7KHORQJWHUPH[SHFWHGHDUQLQJVUDWHRQ86SHQVLRQSODQDVVHWVLQZDVSHUFHQW7KH\HDUDQG\HDU
DFWXDOUHWXUQVRQ86SHQVLRQSODQDVVHWVZHUHSHUFHQWDQGSHUFHQWUHVSHFWLYHO\7KH&RUSRUDWLRQHVWDEOLVKHVWKHORQJWHUP
H[SHFWHGUDWHRIUHWXUQE\GHYHORSLQJDIRUZDUGORRNLQJORQJWHUPUHWXUQDVVXPSWLRQIRUHDFKSHQVLRQIXQGDVVHWFODVVWDNLQJLQWR
DFFRXQWIDFWRUVVXFKDVWKHH[SHFWHGUHDOUHWXUQIRUWKHVSHFLILFDVVHWFODVVDQGLQIODWLRQ$VLQJOHORQJWHUPUDWHRIUHWXUQLVWKHQ
FDOFXODWHGDVWKHZHLJKWHGDYHUDJHRIWKHWDUJHWDVVHWDOORFDWLRQSHUFHQWDJHVDQGWKHORQJWHUPUHWXUQDVVXPSWLRQIRUHDFKDVVHW
FODVV$ZRUOGZLGHUHGXFWLRQRISHUFHQWLQWKHORQJWHUPUDWHRIUHWXUQRQDVVHWVZRXOGLQFUHDVHDQQXDOSHQVLRQH[SHQVHE\
DSSUR[LPDWHO\PLOOLRQEHIRUHWD[
'LIIHUHQFHVEHWZHHQDFWXDOUHWXUQVRQIXQGDVVHWVDQGWKHORQJWHUPH[SHFWHGUHWXUQDUHQRWUHFRJQL]HGLQSHQVLRQH[SHQVHLQWKH
\HDUWKDWWKHGLIIHUHQFHRFFXUV6XFKGLIIHUHQFHVDUHGHIHUUHGDORQJZLWKRWKHUDFWXDULDOJDLQVDQGORVVHVDQGDUHDPRUWL]HGLQWR
SHQVLRQH[SHQVHRYHUWKHH[SHFWHGUHPDLQLQJVHUYLFHOLIHRIHPSOR\HHV
 


0$1$*(0(17¶6',6&866,21$1'$1$/<6,62)),1$1&,$/&21',7,21$1'5(68/762)23(5$7,216


/LWLJDWLRQ&RQWLQJHQFLHV
$YDULHW\RIFODLPVKDYHEHHQPDGHDJDLQVWWKH&RUSRUDWLRQDQGFHUWDLQRILWVFRQVROLGDWHGVXEVLGLDULHVLQDQXPEHURISHQGLQJ
ODZVXLWV0DQDJHPHQWKDVUHJXODUOLWLJDWLRQUHYLHZVLQFOXGLQJXSGDWHVIURPFRUSRUDWHDQGRXWVLGHFRXQVHOWRDVVHVVWKHQHHGIRU
DFFRXQWLQJUHFRJQLWLRQRUGLVFORVXUHRIWKHVHFRQWLQJHQFLHV7KHVWDWXVRIVLJQLILFDQWFODLPVLVVXPPDUL]HGLQ1RWH
7KH&RUSRUDWLRQDFFUXHVDQXQGLVFRXQWHGOLDELOLW\IRUWKRVHFRQWLQJHQFLHVZKHUHWKHLQFXUUHQFHRIDORVVLVSUREDEOHDQGWKHDPRXQW
FDQEHUHDVRQDEO\HVWLPDWHG7KHVHDPRXQWVDUHQRWUHGXFHGE\DPRXQWVWKDWPD\EHUHFRYHUHGXQGHULQVXUDQFHRUFODLPVDJDLQVW
WKLUGSDUWLHVEXWXQGLVFRXQWHGUHFHLYDEOHVIURPLQVXUHUVRURWKHUWKLUGSDUWLHVPD\EHDFFUXHGVHSDUDWHO\7KH&RUSRUDWLRQUHYLVHV
VXFKDFFUXDOVLQOLJKWRIQHZLQIRUPDWLRQ)RUFRQWLQJHQFLHVZKHUHDQXQIDYRUDEOHRXWFRPHLVUHDVRQDEO\SRVVLEOHDQGZKLFKDUH
VLJQLILFDQW WKH &RUSRUDWLRQ GLVFORVHV WKH QDWXUH RI WKH FRQWLQJHQF\ DQG ZKHUH IHDVLEOH DQ HVWLPDWH RI WKH SRVVLEOH ORVV )RU
SXUSRVHVRIRXUOLWLJDWLRQFRQWLQJHQF\GLVFORVXUHV³VLJQLILFDQW´LQFOXGHVPDWHULDOPDWWHUVDVZHOODVRWKHULWHPVZKLFKPDQDJHPHQW
EHOLHYHVVKRXOGEHGLVFORVHG
0DQDJHPHQWMXGJPHQWLVUHTXLUHGUHODWHGWRFRQWLQJHQWOLDELOLWLHVDQGWKHRXWFRPHRIOLWLJDWLRQEHFDXVHERWKDUHGLIILFXOWWRSUHGLFW
+RZHYHUWKH&RUSRUDWLRQKDVEHHQVXFFHVVIXOLQGHIHQGLQJOLWLJDWLRQLQWKHSDVW3D\PHQWVKDYHQRWKDGDPDWHULDODGYHUVHHIIHFW
RQRSHUDWLRQVRUILQDQFLDOFRQGLWLRQ,QWKH&RUSRUDWLRQ¶VH[SHULHQFHODUJHFODLPVRIWHQGRQRWUHVXOWLQODUJHDZDUGV/DUJHDZDUGV
DUHRIWHQUHYHUVHGRUVXEVWDQWLDOO\UHGXFHGDVDUHVXOWRIDSSHDORUVHWWOHPHQW

7D[&RQWLQJHQFLHV
7KH&RUSRUDWLRQLVVXEMHFWWRLQFRPHWD[DWLRQLQPDQ\MXULVGLFWLRQVDURXQGWKHZRUOG6LJQLILFDQWPDQDJHPHQWMXGJPHQWLVUHTXLUHG
LQWKHDFFRXQWLQJIRULQFRPHWD[FRQWLQJHQFLHVDQGWD[GLVSXWHVEHFDXVHWKHRXWFRPHVDUHRIWHQGLIILFXOWWRSUHGLFW
7KHEHQHILWVRIXQFHUWDLQWD[SRVLWLRQVWKDWWKH&RUSRUDWLRQKDVWDNHQRUH[SHFWVWRWDNHLQLWVLQFRPHWD[UHWXUQVDUHUHFRJQL]HGLQ
WKHILQDQFLDOVWDWHPHQWVLIPDQDJHPHQWFRQFOXGHVWKDWLWLVPRUHOLNHO\WKDQQRWWKDWWKHSRVLWLRQZLOOEHVXVWDLQHGZLWKWKHWD[
DXWKRULWLHV)RUDSRVLWLRQWKDWLVOLNHO\WREHVXVWDLQHGWKHEHQHILWUHFRJQL]HGLQWKHILQDQFLDOVWDWHPHQWVLVPHDVXUHGDWWKHODUJHVW
DPRXQWWKDWLVJUHDWHUWKDQSHUFHQWOLNHO\RIEHLQJUHDOL]HG$UHVHUYHLVHVWDEOLVKHGIRUWKHGLIIHUHQFHEHWZHHQDSRVLWLRQWDNHQ
RU H[SHFWHG WR EH WDNHQ LQ DQ LQFRPH WD[ UHWXUQ DQG WKH DPRXQW UHFRJQL]HG LQ WKH ILQDQFLDO VWDWHPHQWV 7KH &RUSRUDWLRQ¶V
XQUHFRJQL]HGWD[EHQHILWVDQGDGHVFULSWLRQRIRSHQWD[\HDUVDUHVXPPDUL]HGLQ1RWH

)RUHLJQ&XUUHQF\7UDQVODWLRQ
7KHPHWKRGRIWUDQVODWLQJWKHIRUHLJQFXUUHQF\ILQDQFLDOVWDWHPHQWVRIWKH&RUSRUDWLRQ¶VLQWHUQDWLRQDOVXEVLGLDULHVLQWR86GROODUV
LVSUHVFULEHGE\86*$$38QGHUWKHVHSULQFLSOHVLWLVQHFHVVDU\WRVHOHFWWKHIXQFWLRQDOFXUUHQF\RIWKHVHVXEVLGLDULHV7KH
IXQFWLRQDOFXUUHQF\LVWKHFXUUHQF\RIWKHSULPDU\HFRQRPLFHQYLURQPHQWLQZKLFKWKHVXEVLGLDU\RSHUDWHV0DQDJHPHQWVHOHFWVWKH
IXQFWLRQDOFXUUHQF\DIWHUHYDOXDWLQJWKLVHFRQRPLFHQYLURQPHQW
)DFWRUVFRQVLGHUHGE\PDQDJHPHQWZKHQGHWHUPLQLQJWKHIXQFWLRQDOFXUUHQF\IRUDVXEVLGLDU\LQFOXGHWKHFXUUHQF\XVHGIRUFDVK
IORZVUHODWHGWRLQGLYLGXDODVVHWVDQGOLDELOLWLHVWKHUHVSRQVLYHQHVVRI VDOHVSULFHVWRFKDQJHVLQH[FKDQJHUDWHVWKH KLVWRU\RI
LQIODWLRQLQWKHFRXQWU\ZKHWKHUVDOHVDUHLQWRORFDOPDUNHWVRUH[SRUWHGWKHFXUUHQF\XVHGWRDFTXLUHUDZPDWHULDOVODERUVHUYLFHV
DQGVXSSOLHVVRXUFHVRIILQDQFLQJDQGVLJQLILFDQFHRILQWHUFRPSDQ\WUDQVDFWLRQV


0$1$*(0(17¶65(325721,17(51$/&21752/29(5),1$1&,$/5(3257,1*

0DQDJHPHQWLQFOXGLQJWKH&RUSRUDWLRQ¶V&KLHI([HFXWLYH2IILFHU3ULQFLSDO)LQDQFLDO2IILFHUDQG3ULQFLSDO$FFRXQWLQJ2IILFHU
LVUHVSRQVLEOHIRUHVWDEOLVKLQJDQGPDLQWDLQLQJDGHTXDWHLQWHUQDOFRQWURORYHUWKH&RUSRUDWLRQ¶VILQDQFLDOUHSRUWLQJ0DQDJHPHQW
FRQGXFWHGDQHYDOXDWLRQRIWKHHIIHFWLYHQHVVRILQWHUQDOFRQWURORYHUILQDQFLDOUHSRUWLQJEDVHGRQFULWHULDHVWDEOLVKHGLQ,QWHUQDO
&RQWURO± ,QWHJUDWHG )UDPHZRUN  LVVXHG E\ WKH &RPPLWWHH RI 6SRQVRULQJ 2UJDQL]DWLRQV RI WKH 7UHDGZD\ &RPPLVVLRQ
%DVHGRQWKLVHYDOXDWLRQ PDQDJHPHQWFRQFOXGHGWKDW([[RQ0RELO&RUSRUDWLRQ¶VLQWHUQDOFRQWURORYHUILQDQFLDOUHSRUWLQJ ZDV
HIIHFWLYHDVRI'HFHPEHU
3ULFHZDWHUKRXVH&RRSHUV//3DQLQGHSHQGHQWUHJLVWHUHGSXEOLFDFFRXQWLQJ ILUPDXGLWHGWKHHIIHFWLYHQHVVRIWKH &RUSRUDWLRQ¶V
LQWHUQDOFRQWURORYHUILQDQFLDOUHSRUWLQJDVRI'HFHPEHUDVVWDWHGLQWKHLUUHSRUWLQFOXGHGLQWKH)LQDQFLDO6HFWLRQRIWKLV
UHSRUW

 



 
 
'DUUHQ::RRGV $QGUHZ36ZLJHU 'DYLG65RVHQWKDO
&KLHI([HFXWLYH2IILFHU 6HQLRU9LFH3UHVLGHQW 9LFH3UHVLGHQWDQG&RQWUROOHU
3ULQFLSDO)LQDQFLDO2IILFHU 3ULQFLSDO$FFRXQWLQJ2IILFHU


5(32572),1'(3(1'(175(*,67(5('38%/,&$&&2817,1*),50


7RWKH%RDUGRI'LUHFWRUVDQG6KDUHKROGHUVRI([[RQ0RELO&RUSRUDWLRQ

2SLQLRQVRQWKH)LQDQFLDO6WDWHPHQWVDQG,QWHUQDO&RQWURORYHU)LQDQFLDO5HSRUWLQJ

:H KDYH DXGLWHG WKH DFFRPSDQ\LQJ FRQVROLGDWHG EDODQFH VKHHWV RI ([[RQ 0RELO &RUSRUDWLRQ DQG LWV VXEVLGLDULHV WKH
³&RUSRUDWLRQ´DVRI'HFHPEHUDQGDQGWKHUHODWHGFRQVROLGDWHGVWDWHPHQWVRILQFRPHFRPSUHKHQVLYHLQFRPH
FKDQJHVLQHTXLW\DQGFDVKIORZVIRUHDFKRIWKHWKUHH\HDUVLQWKHSHULRGHQGHG'HFHPEHULQFOXGLQJWKHUHODWHGQRWHV
FROOHFWLYHO\UHIHUUHGWRDVWKH³FRQVROLGDWHGILQDQFLDOVWDWHPHQWV´:HDOVRKDYHDXGLWHGWKH&RUSRUDWLRQ
VLQWHUQDOFRQWURORYHU
ILQDQFLDOUHSRUWLQJDVRI'HFHPEHUEDVHGRQFULWHULDHVWDEOLVKHGLQ,QWHUQDO&RQWURO,QWHJUDWHG)UDPHZRUNLVVXHG
E\WKH&RPPLWWHHRI6SRQVRULQJ2UJDQL]DWLRQVRIWKH7UHDGZD\&RPPLVVLRQ&262

,QRXURSLQLRQWKHFRQVROLGDWHGILQDQFLDOVWDWHPHQWVUHIHUUHGWRDERYHSUHVHQWIDLUO\LQDOOPDWHULDOUHVSHFWVWKHILQDQFLDOSRVLWLRQ
RIWKH&RUSRUDWLRQDVRI'HFHPEHUDQGDQGWKHUHVXOWVRILWVRSHUDWLRQVDQGLWVFDVKIORZVIRUHDFKRIWKHWKUHH\HDUV
LQWKHSHULRGHQGHG'HFHPEHULQFRQIRUPLW\ZLWKDFFRXQWLQJSULQFLSOHVJHQHUDOO\DFFHSWHGLQWKH8QLWHG6WDWHVRI$PHULFD
$OVRLQRXURSLQLRQWKH&RUSRUDWLRQPDLQWDLQHGLQDOOPDWHULDOUHVSHFWVHIIHFWLYHLQWHUQDOFRQWURORYHUILQDQFLDOUHSRUWLQJDVRI
'HFHPEHUEDVHGRQFULWHULDHVWDEOLVKHGLQ,QWHUQDO&RQWURO,QWHJUDWHG)UDPHZRUNLVVXHGE\WKH&262 

%DVLVIRU2SLQLRQV

7KH&RUSRUDWLRQ
VPDQDJHPHQWLVUHVSRQVLEOHIRUWKHVHFRQVROLGDWHGILQDQFLDOVWDWHPHQWVIRUPDLQWDLQLQJHIIHFWLYHLQWHUQDOFRQWURO
RYHUILQDQFLDOUHSRUWLQJDQG IRULWVDVVHVVPHQWRIWKHHIIHFWLYHQHVVRI LQWHUQDOFRQWURORYHUILQDQFLDOUHSRUWLQJLQFOXGHGLQWKH
DFFRPSDQ\LQJ0DQDJHPHQW¶V5HSRUWRQ,QWHUQDO&RQWURORYHU)LQDQFLDO5HSRUWLQJ2XUUHVSRQVLELOLW\LVWRH[SUHVVRSLQLRQVRQWKH
&RUSRUDWLRQ¶V FRQVROLGDWHG ILQDQFLDO VWDWHPHQWV DQG RQ WKH &RUSRUDWLRQ
V LQWHUQDO FRQWURO RYHU ILQDQFLDO UHSRUWLQJ EDVHG RQ RXU
DXGLWV:HDUHDSXEOLFDFFRXQWLQJILUPUHJLVWHUHGZLWKWKH3XEOLF&RPSDQ\$FFRXQWLQJ2YHUVLJKW%RDUG8QLWHG6WDWHV3&$2%
DQGDUHUHTXLUHGWREHLQGHSHQGHQW ZLWKUHVSHFWWRWKH &RUSRUDWLRQLQDFFRUGDQFH ZLWKWKH86 IHGHUDOVHFXULWLHVODZVDQGWKH
DSSOLFDEOHUXOHVDQGUHJXODWLRQVRIWKH6HFXULWLHVDQG([FKDQJH&RPPLVVLRQDQGWKH3&$2%

:HFRQGXFWHGRXUDXGLWVLQDFFRUGDQFHZLWKWKHVWDQGDUGVRIWKH3&$2%7KRVHVWDQGDUGVUHTXLUHWKDWZHSODQDQGSHUIRUPWKH
DXGLWVWRREWDLQUHDVRQDEOHDVVXUDQFHDERXWZKHWKHUWKHFRQVROLGDWHGILQDQFLDOVWDWHPHQWVDUHIUHHRIPDWHULDOPLVVWDWHPHQWZKHWKHU
GXHWRHUURURUIUDXGDQGZKHWKHUHIIHFWLYHLQWHUQDOFRQWURORYHUILQDQFLDOUHSRUWLQJZDVPDLQWDLQHGLQDOOPDWHULDOUHVSHFWV

2XUDXGLWVRIWKHFRQVROLGDWHGILQDQFLDOVWDWHPHQWVLQFOXGHGSHUIRUPLQJSURFHGXUHVWRDVVHVVWKHULVNVRIPDWHULDOPLVVWDWHPHQWRI
WKHFRQVROLGDWHGILQDQFLDOVWDWHPHQWVZKHWKHUGXHWRHUURURUIUDXGDQGSHUIRUPLQJSURFHGXUHVWKDWUHVSRQGWRWKRVHULVNV6XFK
SURFHGXUHV LQFOXGHG H[DPLQLQJ RQ D WHVW EDVLV HYLGHQFH UHJDUGLQJ WKH DPRXQWV DQG GLVFORVXUHV LQ WKH FRQVROLGDWHG ILQDQFLDO
VWDWHPHQWV2XUDXGLWVDOVRLQFOXGHGHYDOXDWLQJWKHDFFRXQWLQJSULQFLSOHVXVHGDQGVLJQLILFDQWHVWLPDWHVPDGHE\PDQDJHPHQWDV
ZHOODVHYDOXDWLQJWKHRYHUDOOSUHVHQWDWLRQRIWKHFRQVROLGDWHGILQDQFLDO VWDWHPHQWV2XUDXGLWRILQWHUQDOFRQWURORYHUILQDQFLDO
UHSRUWLQJLQFOXGHGREWDLQLQJDQXQGHUVWDQGLQJRILQWHUQDOFRQWURORYHUILQDQFLDOUHSRUWLQJDVVHVVLQJWKHULVNWKDWDPDWHULDOZHDNQHVV
H[LVWVDQGWHVWLQJDQGHYDOXDWLQJWKHGHVLJQDQGRSHUDWLQJHIIHFWLYHQHVVRILQWHUQDOFRQWUROEDVHGRQWKHDVVHVVHGULVN2XUDXGLWV
DOVRLQFOXGHGSHUIRUPLQJVXFKRWKHUSURFHGXUHVDVZHFRQVLGHUHGQHFHVVDU\LQWKHFLUFXPVWDQFHV:HEHOLHYHWKDWRXUDXGLWVSURYLGH
DUHDVRQDEOHEDVLVIRURXURSLQLRQV 


5(32572),1'(3(1'(175(*,67(5('38%/,&$&&2817,1*),50

'HILQLWLRQDQG/LPLWDWLRQVRI,QWHUQDO&RQWURORYHU)LQDQFLDO5HSRUWLQJ

$FRPSDQ\¶VLQWHUQDOFRQWURORYHUILQDQFLDOUHSRUWLQJLVDSURFHVVGHVLJQHGWRSURYLGHUHDVRQDEOHDVVXUDQFHUHJDUGLQJWKHUHOLDELOLW\
RI ILQDQFLDO UHSRUWLQJ DQG WKH SUHSDUDWLRQ RI ILQDQFLDO VWDWHPHQWV IRU H[WHUQDO SXUSRVHV LQ DFFRUGDQFH ZLWK JHQHUDOO\ DFFHSWHG
DFFRXQWLQJSULQFLSOHV$FRPSDQ\¶VLQWHUQDOFRQWURORYHUILQDQFLDOUHSRUWLQJLQFOXGHVWKRVHSROLFLHVDQGSURFHGXUHVWKDWLSHUWDLQ
WRWKHPDLQWHQDQFHRIUHFRUGVWKDWLQUHDVRQDEOHGHWDLODFFXUDWHO\DQGIDLUO\UHIOHFWWKHWUDQVDFWLRQVDQGGLVSRVLWLRQVRIWKHDVVHWV
RIWKHFRPSDQ\LLSURYLGHUHDVRQDEOHDVVXUDQFHWKDWWUDQVDFWLRQVDUHUHFRUGHGDVQHFHVVDU\WRSHUPLWSUHSDUDWLRQRIILQDQFLDO
VWDWHPHQWVLQDFFRUGDQFH ZLWKJHQHUDOO\DFFHSWHGDFFRXQWLQJSULQFLSOHVDQGWKDWUHFHLSWVDQGH[SHQGLWXUHVRIWKHFRPSDQ\DUH
EHLQJ PDGH RQO\ LQ DFFRUGDQFH ZLWK DXWKRUL]DWLRQV RI PDQDJHPHQW DQG GLUHFWRUV RI WKH FRPSDQ\ DQG LLLSURYLGH UHDVRQDEOH
DVVXUDQFHUHJDUGLQJSUHYHQWLRQRUWLPHO\GHWHFWLRQRIXQDXWKRUL]HGDFTXLVLWLRQXVHRUGLVSRVLWLRQRIWKHFRPSDQ\¶VDVVHWVWKDW
FRXOGKDYHDPDWHULDOHIIHFWRQWKHILQDQFLDOVWDWHPHQWV

%HFDXVH RI LWV LQKHUHQW OLPLWDWLRQV LQWHUQDO FRQWURO RYHU ILQDQFLDO UHSRUWLQJ PD\ QRW SUHYHQW RU GHWHFW PLVVWDWHPHQWV $OVR
SURMHFWLRQVRIDQ\HYDOXDWLRQRIHIIHFWLYHQHVVWRIXWXUHSHULRGVDUHVXEMHFWWRWKHULVNWKDWFRQWUROVPD\EHFRPHLQDGHTXDWHEHFDXVH
RIFKDQJHVLQFRQGLWLRQVRUWKDWWKHGHJUHHRIFRPSOLDQFHZLWKWKHSROLFLHVRUSURFHGXUHVPD\GHWHULRUDWH






'DOODV7H[DV
)HEUXDU\
:HKDYHVHUYHGDVWKH&RUSRUDWLRQ¶VDXGLWRUVLQFH


&2162/,'$7('67$7(0(172),1&20(
   1RWH      
   5HIHUHQFH      
   1XPEHU     
    PLOOLRQVRIGROODUV
5HYHQXHVDQGRWKHULQFRPH  
 6DOHVDQGRWKHURSHUDWLQJUHYHQXH     
 ,QFRPHIURPHTXLW\DIILOLDWHV     
 2WKHULQFRPH     
  7RWDOUHYHQXHVDQGRWKHULQFRPH     
&RVWVDQGRWKHUGHGXFWLRQV  
 &UXGHRLODQGSURGXFWSXUFKDVHV     
 3URGXFWLRQDQGPDQXIDFWXULQJH[SHQVHV     
 6HOOLQJJHQHUDODQGDGPLQLVWUDWLYHH[SHQVHV     
 'HSUHFLDWLRQDQGGHSOHWLRQ     
 ([SORUDWLRQH[SHQVHVLQFOXGLQJGU\KROHV     
 1RQVHUYLFHSHQVLRQDQGSRVWUHWLUHPHQWEHQHILWH[SHQVH     
 ,QWHUHVWH[SHQVH     
 2WKHUWD[HVDQGGXWLHV     
  7RWDOFRVWVDQGRWKHUGHGXFWLRQV     
,QFRPHEHIRUHLQFRPHWD[HV     
 ,QFRPHWD[HV     
1HWLQFRPHLQFOXGLQJQRQFRQWUROOLQJLQWHUHVWV     
 1HWLQFRPHDWWULEXWDEOHWRQRQFRQWUROOLQJLQWHUHVWV     
1HWLQFRPHDWWULEXWDEOHWR([[RQ0RELO     
    
(DUQLQJVSHUFRPPRQVKDUHGROODUV     
    
(DUQLQJVSHUFRPPRQVKDUHDVVXPLQJGLOXWLRQGROODUV     

7KHLQIRUPDWLRQLQWKH1RWHVWR&RQVROLGDWHG)LQDQFLDO6WDWHPHQWVLVDQLQWHJUDOSDUWRIWKHVHVWDWHPHQWV



&2162/,'$7('67$7(0(172)&2035(+(16,9(,1&20(


        

     PLOOLRQVRIGROODUV
         
1HWLQFRPHLQFOXGLQJQRQFRQWUROOLQJLQWHUHVWV    
2WKHUFRPSUHKHQVLYHLQFRPHQHWRILQFRPHWD[HV 
 )RUHLJQH[FKDQJHWUDQVODWLRQDGMXVWPHQW    
 $GMXVWPHQWIRUIRUHLJQH[FKDQJHWUDQVODWLRQJDLQORVV 
  LQFOXGHGLQQHWLQFRPH    
 3RVWUHWLUHPHQWEHQHILWVUHVHUYHVDGMXVWPHQWH[FOXGLQJDPRUWL]DWLRQ    
 $PRUWL]DWLRQDQGVHWWOHPHQWRISRVWUHWLUHPHQWEHQHILWVUHVHUYHV 
  DGMXVWPHQWLQFOXGHGLQQHWSHULRGLFEHQHILWFRVWV    
  7RWDORWKHUFRPSUHKHQVLYHLQFRPH    
&RPSUHKHQVLYHLQFRPHLQFOXGLQJQRQFRQWUROOLQJLQWHUHVWV    
 &RPSUHKHQVLYHLQFRPHDWWULEXWDEOHWRQRQFRQWUROOLQJLQWHUHVWV    
&RPSUHKHQVLYHLQFRPHDWWULEXWDEOHWR([[RQ0RELO    

7KHLQIRUPDWLRQLQWKH1RWHVWR&RQVROLGDWHG)LQDQFLDO6WDWHPHQWVLVDQLQWHJUDOSDUWRIWKHVHVWDWHPHQWV



&2162/,'$7('%$/$1&(6+((7
    1RWH    
    5HIHUHQFH  'HF  'HF
    1XPEHU    
      PLOOLRQVRIGROODUV
$VVHWV  
 &XUUHQWDVVHWV  
  &DVKDQGFDVKHTXLYDOHQWV    
  1RWHVDQGDFFRXQWVUHFHLYDEOHOHVVHVWLPDWHGGRXEWIXODPRXQWV    
  ,QYHQWRULHV  
   &UXGHRLOSURGXFWVDQGPHUFKDQGLVH    
   0DWHULDOVDQGVXSSOLHV    
  2WKHUFXUUHQWDVVHWV    
   7RWDOFXUUHQWDVVHWV    
 ,QYHVWPHQWVDGYDQFHVDQGORQJWHUPUHFHLYDEOHV    
 3URSHUW\SODQWDQGHTXLSPHQWDWFRVWOHVVDFFXPXODWHGGHSUHFLDWLRQ  
  DQGGHSOHWLRQ    
 2WKHUDVVHWVLQFOXGLQJLQWDQJLEOHVQHW    
   7RWDODVVHWV    
     
/LDELOLWLHV  
 &XUUHQWOLDELOLWLHV  
  1RWHVDQGORDQVSD\DEOH    
  $FFRXQWVSD\DEOHDQGDFFUXHGOLDELOLWLHV    
  ,QFRPHWD[HVSD\DEOH    
   7RWDOFXUUHQWOLDELOLWLHV    
 /RQJWHUPGHEW    
 3RVWUHWLUHPHQWEHQHILWVUHVHUYHV    
 'HIHUUHGLQFRPHWD[OLDELOLWLHV    
 /RQJWHUPREOLJDWLRQVWRHTXLW\FRPSDQLHV    
 2WKHUORQJWHUPREOLJDWLRQV    
   7RWDOOLDELOLWLHV    
     
&RPPLWPHQWVDQGFRQWLQJHQFLHV  
     
(TXLW\  
 &RPPRQVWRFNZLWKRXWSDUYDOXH   
  PLOOLRQVKDUHVDXWKRUL]HGPLOOLRQVKDUHVLVVXHG    
 (DUQLQJVUHLQYHVWHG    
 $FFXPXODWHGRWKHUFRPSUHKHQVLYHLQFRPH    
 &RPPRQVWRFNKHOGLQWUHDVXU\  
  PLOOLRQVKDUHVLQDQGPLOOLRQVKDUHVLQ    
   ([[RQ0RELOVKDUHRIHTXLW\    
 1RQFRQWUROOLQJLQWHUHVWV    
   7RWDOHTXLW\    
   7RWDOOLDELOLWLHVDQGHTXLW\    

7KHLQIRUPDWLRQLQWKH1RWHVWR&RQVROLGDWHG)LQDQFLDO6WDWHPHQWVLVDQLQWHJUDOSDUWRIWKHVHVWDWHPHQWV



&2162/,'$7('67$7(0(172)&$6+)/2:6
     1RWH      
     5HIHUHQFH      
     1XPEHU      
      PLOOLRQVRIGROODUV
&DVKIORZVIURPRSHUDWLQJDFWLYLWLHV      
 1HWLQFRPHLQFOXGLQJQRQFRQWUROOLQJLQWHUHVWV     
 $GMXVWPHQWVIRUQRQFDVKWUDQVDFWLRQV  
  'HSUHFLDWLRQDQGGHSOHWLRQ     
  'HIHUUHGLQFRPHWD[FKDUJHVFUHGLWV     
  3RVWUHWLUHPHQWEHQHILWVH[SHQVH  
   LQH[FHVVRIOHVVWKDQQHWSD\PHQWV     
  2WKHUORQJWHUPREOLJDWLRQSURYLVLRQV  
   LQH[FHVVRIOHVVWKDQSD\PHQWV     
 'LYLGHQGVUHFHLYHGJUHDWHUWKDQOHVVWKDQHTXLW\LQFXUUHQW  
  HDUQLQJVRIHTXLW\FRPSDQLHV     
 &KDQJHVLQRSHUDWLRQDOZRUNLQJFDSLWDOH[FOXGLQJFDVKDQGGHEW 
  5HGXFWLRQLQFUHDVH1RWHVDQGDFFRXQWVUHFHLYDEOH     
    ,QYHQWRULHV     
    2WKHUFXUUHQWDVVHWV     
  ,QFUHDVHUHGXFWLRQ $FFRXQWVDQGRWKHUSD\DEOHV     
 1HWJDLQRQDVVHWVDOHV     
 $OORWKHULWHPVQHW     
  1HWFDVKSURYLGHGE\RSHUDWLQJDFWLYLWLHV     
&DVKIORZVIURPLQYHVWLQJDFWLYLWLHV  
 $GGLWLRQVWRSURSHUW\SODQWDQGHTXLSPHQW     
 3URFHHGVDVVRFLDWHGZLWKVDOHVRIVXEVLGLDULHVSURSHUW\SODQW     
  DQGHTXLSPHQWDQGVDOHVDQGUHWXUQVRILQYHVWPHQWV     
 $GGLWLRQDOLQYHVWPHQWVDQGDGYDQFHV     
 2WKHULQYHVWLQJDFWLYLWLHVLQFOXGLQJFROOHFWLRQRIDGYDQFHV     
  1HWFDVKXVHGLQLQYHVWLQJDFWLYLWLHV     
&DVKIORZVIURPILQDQFLQJDFWLYLWLHV  
 $GGLWLRQVWRORQJWHUPGHEW     
 $GGLWLRQVWRVKRUWWHUPGHEW     
 5HGXFWLRQVLQVKRUWWHUPGHEW     
 $GGLWLRQVUHGXFWLRQVLQFRPPHUFLDOSDSHUDQGGHEWZLWK   
  WKUHHPRQWKVRUOHVVPDWXULW\     
 &DVKGLYLGHQGVWR([[RQ0RELOVKDUHKROGHUV     
 &DVKGLYLGHQGVWRQRQFRQWUROOLQJLQWHUHVWV     
 &KDQJHVLQQRQFRQWUROOLQJLQWHUHVWV     
 &RPPRQVWRFNDFTXLUHG     
 &RPPRQVWRFNVROG     
  1HWFDVKXVHGLQILQDQFLQJDFWLYLWLHV      
(IIHFWVRIH[FKDQJHUDWHFKDQJHVRQFDVK     
,QFUHDVHGHFUHDVHLQFDVKDQGFDVKHTXLYDOHQWV     
&DVKDQGFDVKHTXLYDOHQWVDWEHJLQQLQJRI\HDU     
&DVKDQGFDVKHTXLYDOHQWVDWHQGRI\HDU     

7KHLQIRUPDWLRQLQWKH1RWHVWR&RQVROLGDWHG)LQDQFLDO6WDWHPHQWVLVDQLQWHJUDOSDUWRIWKHVHVWDWHPHQWV



&2162/,'$7('67$7(0(172)&+$1*(6,1(48,7<
                
    ([[RQ0RELO6KDUHRI(TXLW\   
       $FFXPXODWHG &RPPRQ      
        2WKHU  6WRFN ([[RQ0RELO 1RQ  
    &RPPRQ  (DUQLQJV &RPSUHKHQVLYH +HOGLQ  6KDUHRI FRQWUROOLQJ 7RWDO
    6WRFN 5HLQYHVWHG ,QFRPH  7UHDVXU\  (TXLW\  ,QWHUHVWV  (TXLW\
    PLOOLRQVRIGROODUV
                
%DODQFHDVRI'HFHPEHU       
 $PRUWL]DWLRQRIVWRFNEDVHGDZDUGV       
 7D[EHQHILWVUHODWHGWRVWRFNEDVHGDZDUGV       
 2WKHU       
 1HWLQFRPHIRUWKH\HDU       
 'LYLGHQGVFRPPRQVKDUHV       
 2WKHUFRPSUHKHQVLYHLQFRPH       
 $FTXLVLWLRQVDWFRVW       
 'LVSRVLWLRQV       
%DODQFHDVRI'HFHPEHU       
 $PRUWL]DWLRQRIVWRFNEDVHGDZDUGV       
 2WKHU       
 1HWLQFRPHIRUWKH\HDU       
 'LYLGHQGVFRPPRQVKDUHV       
 2WKHUFRPSUHKHQVLYHLQFRPH       
 $FTXLVLWLRQVDWFRVW       
 ,VVXHGIRUDFTXLVLWLRQV       
 'LVSRVLWLRQV       
%DODQFHDVRI'HFHPEHU       
 $PRUWL]DWLRQRIVWRFNEDVHGDZDUGV       
 2WKHU       
 1HWLQFRPHIRUWKH\HDU       
 'LYLGHQGVFRPPRQVKDUHV       
 &XPXODWLYHHIIHFWRIDFFRXQWLQJFKDQJH       
 2WKHUFRPSUHKHQVLYHLQFRPH       
 $FTXLVLWLRQVDWFRVW       
 'LVSRVLWLRQV       
%DODQFHDVRI'HFHPEHU       

     +HOGLQ  
&RPPRQ6WRFN6KDUH$FWLYLW\  ,VVXHG  7UHDVXU\ 2XWVWDQGLQJ
   PLOOLRQVRIVKDUHV
       
%DODQFHDVRI'HFHPEHU    
 $FTXLVLWLRQV    
 'LVSRVLWLRQV    
%DODQFHDVRI'HFHPEHU    
 $FTXLVLWLRQV    
 ,VVXHGIRUDFTXLVLWLRQV    
 'LVSRVLWLRQV    
%DODQFHDVRI'HFHPEHU    
 $FTXLVLWLRQV    
 'LVSRVLWLRQV    
%DODQFHDVRI'HFHPEHU    

7KHLQIRUPDWLRQLQWKH1RWHVWR&RQVROLGDWHG)LQDQFLDO6WDWHPHQWVLVDQLQWHJUDOSDUWRIWKHVHVWDWHPHQWV



127(672&2162/,'$7('),1$1&,$/67$7(0(176

7KHDFFRPSDQ\LQJFRQVROLGDWHGILQDQFLDOVWDWHPHQWVDQGWKHVXSSRUWLQJDQGVXSSOHPHQWDOPDWHULDODUHWKHUHVSRQVLELOLW\RIWKH
PDQDJHPHQWRI([[RQ0RELO&RUSRUDWLRQ
7KH&RUSRUDWLRQ¶VSULQFLSDOEXVLQHVVLQYROYHVH[SORUDWLRQIRUDQGSURGXFWLRQRIFUXGHRLODQGQDWXUDOJDVDQGPDQXIDFWXUHWUDGH
WUDQVSRUWDQGVDOHRIFUXGHRLOQDWXUDOJDVSHWUROHXPSURGXFWVSHWURFKHPLFDOVDQGDZLGHYDULHW\RIVSHFLDOW\SURGXFWV
7KH SUHSDUDWLRQ RI ILQDQFLDO VWDWHPHQWV LQ FRQIRUPLW\ ZLWK 86 *HQHUDOO\ $FFHSWHG $FFRXQWLQJ 3ULQFLSOHV *$$3 UHTXLUHV
PDQDJHPHQWWRPDNHHVWLPDWHVWKDWDIIHFWWKHUHSRUWHGDPRXQWVRIDVVHWVOLDELOLWLHVUHYHQXHVDQGH[SHQVHVDQGWKHGLVFORVXUHRI
FRQWLQJHQWDVVHWVDQGOLDELOLWLHV$FWXDOUHVXOWVFRXOGGLIIHUIURPWKHVHHVWLPDWHV3ULRU\HDUV¶GDWDKDVEHHQUHFODVVLILHGLQFHUWDLQ
FDVHVWRFRQIRUPWRWKHSUHVHQWDWLRQEDVLV

6XPPDU\RI$FFRXQWLQJ3ROLFLHV
3ULQFLSOHVRI&RQVROLGDWLRQDQG$FFRXQWLQJIRU,QYHVWPHQWV
7KH &RQVROLGDWHG )LQDQFLDO 6WDWHPHQWV LQFOXGH WKH DFFRXQWV RI VXEVLGLDULHV WKH &RUSRUDWLRQ FRQWUROV 7KH\ DOVR LQFOXGH WKH
&RUSRUDWLRQ¶VVKDUHRIWKHXQGLYLGHGLQWHUHVWLQFHUWDLQXSVWUHDPDVVHWVOLDELOLWLHVUHYHQXHVDQGH[SHQVHV$PRXQWVUHSUHVHQWLQJ
WKH &RUSRUDWLRQ¶V LQWHUHVW LQ HQWLWLHV WKDW LW GRHV QRW FRQWURO EXW RYHU ZKLFK LW H[HUFLVHV VLJQLILFDQW LQIOXHQFH DUH LQFOXGHG LQ
³,QYHVWPHQWVDGYDQFHVDQGORQJWHUPUHFHLYDEOHV´7KH&RUSRUDWLRQ¶VVKDUHRIWKHQHWLQFRPHRIWKHVHFRPSDQLHVLVLQFOXGHGLQ
WKH&RQVROLGDWHG6WDWHPHQWRI,QFRPHFDSWLRQ³,QFRPHIURPHTXLW\DIILOLDWHV´
0DMRULW\RZQHUVKLSLVQRUPDOO\WKHLQGLFDWRURIFRQWUROWKDWLVWKHEDVLVRQZKLFKVXEVLGLDULHVDUHFRQVROLGDWHG+RZHYHUFHUWDLQ
IDFWRUVPD\LQGLFDWHWKDWDPDMRULW\RZQHGLQYHVWPHQWLVQRWFRQWUROOHGDQGWKHUHIRUHVKRXOGEHDFFRXQWHGIRUXVLQJWKHHTXLW\
PHWKRG RI DFFRXQWLQJ 7KHVH IDFWRUV RFFXU ZKHUH WKH PLQRULW\ VKDUHKROGHUV DUH JUDQWHG E\ ODZ RU E\ FRQWUDFW VXEVWDQWLYH
SDUWLFLSDWLQJULJKWV7KHVHLQFOXGHWKHULJKWWRDSSURYHRSHUDWLQJSROLFLHVH[SHQVHEXGJHWVILQDQFLQJDQGLQYHVWPHQWSODQVDQG
PDQDJHPHQWFRPSHQVDWLRQDQGVXFFHVVLRQSODQV
(YLGHQFHRIORVVLQYDOXHWKDWPLJKWLQGLFDWHLPSDLUPHQWRILQYHVWPHQWVLQFRPSDQLHVDFFRXQWHGIRURQWKHHTXLW\PHWKRGLVDVVHVVHG
WRGHWHUPLQHLIVXFKHYLGHQFHUHSUHVHQWVDORVVLQYDOXHRIWKH&RUSRUDWLRQ¶VLQYHVWPHQWWKDWLVRWKHUWKDQWHPSRUDU\([DPSOHVRI
NH\LQGLFDWRUVLQFOXGHDKLVWRU\RIRSHUDWLQJORVVHVQHJDWLYHHDUQLQJVDQGFDVKIORZRXWORRNVLJQLILFDQWGRZQZDUGUHYLVLRQVWRRLO
DQGJDVUHVHUYHVDQGWKHILQDQFLDOFRQGLWLRQDQGSURVSHFWVIRUWKHLQYHVWHH¶VEXVLQHVVVHJPHQWRUJHRJUDSKLFUHJLRQ,IHYLGHQFHRI
DQRWKHUWKDQWHPSRUDU\ORVVLQIDLUYDOXHEHORZFDUU\LQJDPRXQWLVGHWHUPLQHGDQLPSDLUPHQWLVUHFRJQL]HG,QWKHDEVHQFHRI
PDUNHWSULFHVIRUWKHLQYHVWPHQWGLVFRXQWHGFDVKIORZVDUHXVHGWRDVVHVVIDLUYDOXH
,QYHVWPHQWVLQHTXLW\VHFXULWLHVRWKHUWKDQFRQVROLGDWHGVXEVLGLDULHVDQGHTXLW\PHWKRGLQYHVWPHQWVDUHPHDVXUHGDWIDLUYDOXHZLWK
FKDQJHVLQIDLUYDOXHUHFRJQL]HGLQQHWLQFRPH7KH&RUSRUDWLRQXVHVWKHPRGLILHGDSSURDFKIRUHTXLW\VHFXULWLHVWKDWGRQRWKDYH
DUHDGLO\GHWHUPLQDEOHIDLUYDOXH7KLVPRGLILHGDSSURDFKPHDVXUHVLQYHVWPHQWVDWFRVWPLQXVLPSDLUPHQWLIDQ\SOXVRUPLQXV
FKDQJHVUHVXOWLQJIURPREVHUYDEOHSULFHFKDQJHVLQRUGHUO\WUDQVDFWLRQVLQDVLPLODULQYHVWPHQWRIWKHVDPHLVVXHU
7KH&RUSRUDWLRQ¶VVKDUHRIWKHFXPXODWLYHIRUHLJQH[FKDQJHWUDQVODWLRQDGMXVWPHQWIRUHTXLW\PHWKRGLQYHVWPHQWVLVUHSRUWHGLQ
³$FFXPXODWHGRWKHUFRPSUHKHQVLYHLQFRPH´
5HYHQXH5HFRJQLWLRQ
7KH &RUSRUDWLRQ JHQHUDOO\ VHOOV FUXGH RLO QDWXUDO JDV DQG SHWUROHXP DQG FKHPLFDO SURGXFWV XQGHU VKRUWWHUP DJUHHPHQWV DW
SUHYDLOLQJPDUNHWSULFHV,QVRPHFDVHVHJQDWXUDOJDVSURGXFWVPD\EHVROGXQGHUORQJWHUPDJUHHPHQWVZLWKSHULRGLFSULFH
DGMXVWPHQWVWRUHIOHFWPDUNHWFRQGLWLRQV5HYHQXHLVUHFRJQL]HGDWWKHDPRXQWWKH&RUSRUDWLRQH[SHFWVWRUHFHLYHZKHQWKHFXVWRPHU
KDVWDNHQFRQWUROZKLFKLVW\SLFDOO\ZKHQWLWOHWUDQVIHUVDQGWKHFXVWRPHUKDVDVVXPHGWKHULVNVDQGUHZDUGVRIRZQHUVKLS7KH
SULFHVRIFHUWDLQVDOHVDUHEDVHGRQSULFHLQGLFHVWKDWDUHVRPHWLPHVQRWDYDLODEOHXQWLOWKHQH[WSHULRG,QVXFKFDVHVHVWLPDWHG
UHDOL]DWLRQVDUHDFFUXHGZKHQWKHVDOHLVUHFRJQL]HGDQGDUHILQDOL]HGZKHQWKHSULFHLVDYDLODEOH6XFKDGMXVWPHQWVWRUHYHQXH
IURPSHUIRUPDQFHREOLJDWLRQVVDWLVILHGLQSUHYLRXVSHULRGVDUHQRWVLJQLILFDQW3D\PHQWIRUUHYHQXHWUDQVDFWLRQVLVW\SLFDOO\GXH
ZLWKLQGD\V)XWXUHYROXPHGHOLYHU\REOLJDWLRQVWKDWDUHXQVDWLVILHGDWWKHHQGRIWKHSHULRGDUHH[SHFWHGWREHIXOILOOHGWKURXJK
RUGLQDU\SURGXFWLRQRUSXUFKDVHV7KHVHSHUIRUPDQFHREOLJDWLRQVDUHEDVHGRQPDUNHWSULFHVDWWKHWLPHRIWKHWUDQVDFWLRQDQGDUH
IXOO\FRQVWUDLQHGGXHWRPDUNHWSULFHYRODWLOLW\
3XUFKDVHVDQGVDOHVRILQYHQWRU\ZLWKWKHVDPHFRXQWHUSDUW\WKDWDUHHQWHUHGLQWRLQFRQWHPSODWLRQRIRQHDQRWKHUDUHFRPELQHG
DQGUHFRUGHGDVH[FKDQJHVPHDVXUHGDWWKHERRNYDOXHRIWKHLWHPVROG
³6DOHVDQGRWKHURSHUDWLQJUHYHQXH´DQG³1RWHVDQGDFFRXQWVUHFHLYDEOH´SULPDULO\DULVHIURPFRQWUDFWVZLWKFXVWRPHUV/RQJWHUP
UHFHLYDEOHV DUH SULPDULO\ IURP QRQFXVWRPHUV &RQWUDFW DVVHWV DUH PDLQO\ IURP PDUNHWLQJ DVVLVWDQFH SURJUDPV DQG DUH QRW
VLJQLILFDQW&RQWUDFWOLDELOLWLHVDUHPDLQO\FXVWRPHUSUHSD\PHQWVDQGDFFUXDOVRIH[SHFWHGYROXPHGLVFRXQWVDQGDUHQRWVLJQLILFDQW
 


127(672&2162/,'$7('),1$1&,$/67$7(0(176

,QFRPHDQG2WKHU7D[HV
7KH &RUSRUDWLRQ H[FOXGHV IURP WKH &RQVROLGDWHG 6WDWHPHQW RI ,QFRPH FHUWDLQ VDOHV DQG YDOXHDGGHG WD[HV LPSRVHG RQ DQG
FRQFXUUHQWZLWKUHYHQXHSURGXFLQJWUDQVDFWLRQVZLWKFXVWRPHUVDQGFROOHFWHGRQEHKDOIRIJRYHUQPHQWDODXWKRULWLHV6LPLODUWD[HV
IRUZKLFKWKH&RUSRUDWLRQLVQRWFRQVLGHUHGWREHDQDJHQWIRUWKHJRYHUQPHQWDUHUHSRUWHGRQDJURVVEDVLVLQFOXGHGLQERWK³6DOHV
DQGRWKHURSHUDWLQJUHYHQXH´DQG³2WKHUWD[HVDQGGXWLHV´
7KH&RUSRUDWLRQDFFRXQWVIRU86WD[RQJOREDOLQWDQJLEOHORZWD[HGLQFRPHDVDQLQFRPHWD[H[SHQVHLQWKHSHULRGLQZKLFKLWLV
LQFXUUHG:HKDYHHOHFWHGQRWWRDGRSWDQRSWLRQSURYLGHGE\WKH)LQDQFLDO$FFRXQWLQJ6WDQGDUGV%RDUG8SGDWH,QFRPH6WDWHPHQW
±5HSRUWLQJ&RPSUHKHQVLYH,QFRPH5HFODVVLILFDWLRQRI&HUWDLQ7D[(IIHFWVIURP$FFXPXODWHG2WKHU&RPSUHKHQVLYH,QFRPH7KH
RSWLRQDOORZHGWKHUHFODVVLILFDWLRQ IURPDFFXPXODWHGRWKHUFRPSUHKHQVLYHLQFRPH WRUHWDLQHGHDUQLQJV IRUVWUDQGHGWD[HIIHFWV
UHVXOWLQJIURPWKH7D[&XWVDQG-REV$FW
'HULYDWLYH,QVWUXPHQWV
7KH&RUSRUDWLRQPD\XVHGHULYDWLYHLQVWUXPHQWVIRUWUDGLQJSXUSRVHVDQGWRRIIVHWH[SRVXUHVDVVRFLDWHGZLWKFRPPRGLW\SULFHV
IRUHLJQ FXUUHQF\ H[FKDQJH UDWHV DQG LQWHUHVW UDWHV WKDW DULVH IURP H[LVWLQJ DVVHWV OLDELOLWLHV DQG IRUHFDVWHG WUDQVDFWLRQV $OO
GHULYDWLYHLQVWUXPHQWVDUHUHFRUGHGDWIDLUYDOXH'HULYDWLYHDVVHWVDQGOLDELOLWLHVZLWKWKHVDPHFRXQWHUSDUW\DUHQHWWHGLIWKHULJKW
RIRIIVHWH[LVWVDQGFHUWDLQRWKHUFULWHULDDUHPHW&ROODWHUDOSD\DEOHVRUUHFHLYDEOHVDUHQHWWHGDJDLQVWGHULYDWLYHDVVHWVDQGGHULYDWLYH
OLDELOLWLHVUHVSHFWLYHO\
5HFRJQLWLRQDQGFODVVLILFDWLRQRIWKHJDLQRUORVVWKDWUHVXOWVIURPDGMXVWLQJDGHULYDWLYHWRIDLUYDOXHGHSHQGVRQWKHSXUSRVHIRU
WKHGHULYDWLYH$OOJDLQVDQGORVVHVIURPGHULYDWLYHLQVWUXPHQWVIRUZKLFKWKH&RUSRUDWLRQGRHVQRWDSSO\KHGJHDFFRXQWLQJDUH
LPPHGLDWHO\UHFRJQL]HGLQHDUQLQJV:HPD\GHVLJQDWHGHULYDWLYHVDVIDLUYDOXHRUFDVKIORZKHGJHV)RUIDLUYDOXHKHGJHVWKH
JDLQRUORVVIURPGHULYDWLYHLQVWUXPHQWVDQGWKHRIIVHWWLQJJDLQRUORVVIURPWKHKHGJHGLWHPDUHUHFRJQL]HGLQHDUQLQJV)RUFDVK
IORZKHGJHVWKHHIIHFWLYHSRUWLRQRIWKHJDLQRUORVVIURPWKHGHULYDWLYHLQVWUXPHQWLVLQLWLDOO\UHSRUWHGDVDFRPSRQHQWRIRWKHU
FRPSUHKHQVLYHLQFRPHDQGVXEVHTXHQWO\UHFODVVLILHGLQWRHDUQLQJVLQWKHSHULRGWKDWWKHIRUHFDVWHGWUDQVDFWLRQDIIHFWVHDUQLQJVDQG
WKHLQHIIHFWLYHSRUWLRQRIWKHJDLQRUORVVIURPWKHGHULYDWLYHLQVWUXPHQWLVUHFRJQL]HGLPPHGLDWHO\LQHDUQLQJV
)DLU9DOXH
)DLUYDOXHLVWKHSULFHWKDWZRXOGEHUHFHLYHGWRVHOODQDVVHWRUSDLGWRWUDQVIHUDOLDELOLW\LQDQRUGHUO\WUDQVDFWLRQEHWZHHQPDUNHW
SDUWLFLSDQWV+LHUDUFK\/HYHOVDQGDUHWHUPVIRUWKHSULRULW\RILQSXWVWRYDOXDWLRQWHFKQLTXHVXVHGWRPHDVXUHIDLUYDOXH
+LHUDUFK\/HYHOLQSXWVDUHTXRWHGSULFHVLQDFWLYHPDUNHWVIRULGHQWLFDODVVHWVRUOLDELOLWLHV+LHUDUFK\/HYHOLQSXWVDUHLQSXWV
RWKHUWKDQTXRWHGSULFHVLQFOXGHGZLWKLQ/HYHOWKDWDUHGLUHFWO\RULQGLUHFWO\REVHUYDEOHIRUWKHDVVHWRUOLDELOLW\+LHUDUFK\/HYHO
LQSXWVDUHLQSXWVWKDWDUHQRWREVHUYDEOHLQWKHPDUNHW
,QYHQWRULHV
&UXGHRLOSURGXFWVDQGPHUFKDQGLVHLQYHQWRULHVDUHFDUULHGDWWKHORZHURIFXUUHQWPDUNHWYDOXHRUFRVWJHQHUDOO\GHWHUPLQHGXQGHU
WKHODVWLQILUVWRXWPHWKRG±/,)2,QYHQWRU\FRVWVLQFOXGHH[SHQGLWXUHVDQGRWKHUFKDUJHVLQFOXGLQJGHSUHFLDWLRQGLUHFWO\DQG
LQGLUHFWO\LQFXUUHGLQEULQJLQJWKHLQYHQWRU\WRLWVH[LVWLQJFRQGLWLRQDQGORFDWLRQ6HOOLQJH[SHQVHVDQGJHQHUDODQGDGPLQLVWUDWLYH
H[SHQVHVDUHUHSRUWHGDVSHULRGFRVWVDQGH[FOXGHGIURPLQYHQWRU\FRVW,QYHQWRULHVRIPDWHULDOVDQGVXSSOLHVDUHYDOXHGDWFRVWRU
OHVV
3URSHUW\3ODQWDQG(TXLSPHQW
&RVW%DVLV7KH&RUSRUDWLRQXVHVWKH³VXFFHVVIXOHIIRUWV´PHWKRGWRDFFRXQWIRULWVH[SORUDWLRQDQGSURGXFWLRQDFWLYLWLHV8QGHU
WKLV PHWKRGFRVWVDUHDFFXPXODWHGRQD ILHOGE\ILHOGEDVLV&RVWVLQFXUUHGWRSXUFKDVHOHDVHRURWKHUZLVHDFTXLUHDSURSHUW\
ZKHWKHUXQSURYHGRUSURYHGDUHFDSLWDOL]HGZKHQLQFXUUHG([SORUDWRU\ZHOOFRVWVDUHFDUULHGDVDQDVVHWZKHQWKHZHOOKDVIRXQG
DVXIILFLHQWTXDQWLW\RIUHVHUYHVWRMXVWLI\LWVFRPSOHWLRQDVDSURGXFLQJZHOODQGZKHUHWKH&RUSRUDWLRQLVPDNLQJVXIILFLHQWSURJUHVV
DVVHVVLQJWKHUHVHUYHVDQGWKHHFRQRPLFDQGRSHUDWLQJYLDELOLW\RIWKHSURMHFW([SORUDWRU\ZHOOFRVWVQRWPHHWLQJWKHVHFULWHULDDUH
FKDUJHGWRH[SHQVH2WKHUH[SORUDWRU\H[SHQGLWXUHVLQFOXGLQJJHRSK\VLFDOFRVWVDQGDQQXDOOHDVHUHQWDOVDUHH[SHQVHGDVLQFXUUHG
'HYHORSPHQWFRVWVLQFOXGLQJFRVWVRISURGXFWLYHZHOOVDQGGHYHORSPHQWGU\KROHVDUHFDSLWDOL]HG
'HSUHFLDWLRQ'HSOHWLRQDQG$PRUWL]DWLRQ'HSUHFLDWLRQGHSOHWLRQDQGDPRUWL]DWLRQDUHSULPDULO\GHWHUPLQHGXQGHUHLWKHUWKH
XQLWRISURGXFWLRQ PHWKRG RU WKH VWUDLJKWOLQH PHWKRG ZKLFK LV EDVHG RQ HVWLPDWHG DVVHW VHUYLFH OLIH WDNLQJ REVROHVFHQFH LQWR
FRQVLGHUDWLRQ
 


127(672&2162/,'$7('),1$1&,$/67$7(0(176

$FTXLVLWLRQFRVWVRISURYHGSURSHUWLHVDUHDPRUWL]HGXVLQJDXQLWRISURGXFWLRQPHWKRGFRPSXWHGRQWKHEDVLVRIWRWDOSURYHGRLO
DQGJDVUHVHUYHV&DSLWDOL]HGH[SORUDWRU\GULOOLQJDQGGHYHORSPHQWFRVWVDVVRFLDWHGZLWKSURGXFWLYHGHSOHWDEOHH[WUDFWLYHSURSHUWLHV
DUHDPRUWL]HGXVLQJWKHXQLWRISURGXFWLRQUDWHVEDVHGRQWKHDPRXQWRISURYHGGHYHORSHGUHVHUYHVRIRLODQGJDVWKDWDUHHVWLPDWHG
WREHUHFRYHUDEOHIURPH[LVWLQJIDFLOLWLHVXVLQJFXUUHQWRSHUDWLQJPHWKRGV8QGHUWKHXQLWRISURGXFWLRQPHWKRGRLODQGJDVYROXPHV
DUHFRQVLGHUHGSURGXFHGRQFHWKH\KDYHEHHQPHDVXUHGWKURXJKPHWHUVDWFXVWRG\WUDQVIHURUVDOHVWUDQVDFWLRQSRLQWVDWWKHRXWOHW
YDOYHRQWKHOHDVHRUILHOGVWRUDJHWDQN,QWKHHYHQWWKDWWKHXQLWRISURGXFWLRQPHWKRGGRHVQRWUHVXOWLQDQHTXLWDEOHDOORFDWLRQRI
FRVWRYHUWKHHFRQRPLFOLIHRIDQXSVWUHDPDVVHWDQDOWHUQDWLYHPHWKRGLVXVHG7KHVWUDLJKWOLQHPHWKRGLVXVHGLQOLPLWHGVLWXDWLRQV
ZKHUHWKHH[SHFWHGOLIHRIWKHDVVHWGRHVQRWUHDVRQDEO\FRUUHODWHZLWKWKDWRIWKHXQGHUO\LQJUHVHUYHV)RUH[DPSOHFHUWDLQDVVHWV
XVHGLQWKHSURGXFWLRQRIRLODQGQDWXUDOJDVKDYHDVKRUWHUOLIHWKDQWKHUHVHUYHVDQGDVVXFKWKH&RUSRUDWLRQXVHVVWUDLJKWOLQH
GHSUHFLDWLRQWRHQVXUHWKHDVVHWLVIXOO\GHSUHFLDWHGE\WKHHQGRILWVXVHIXOOLIH
7RWKHH[WHQWWKDWSURYHGUHVHUYHVIRUDSURSHUW\DUHVXEVWDQWLDOO\GHERRNHGDQGWKDWSURSHUW\FRQWLQXHVWRSURGXFHVXFKWKDWWKH
UHVXOWLQJGHSUHFLDWLRQFKDUJHGRHVQRWUHVXOWLQDQHTXLWDEOHDOORFDWLRQRIFRVWRYHUWKHH[SHFWHGOLIHDVVHWVZLOOEHGHSUHFLDWHGXVLQJ
DXQLWRISURGXFWLRQPHWKRGEDVHGRQUHVHUYHVGHWHUPLQHGDWWKHPRVWUHFHQW6(&SULFHZKLFKUHVXOWVLQDPRUHPHDQLQJIXOTXDQWLW\
RISURYHGUHVHUYHVDSSURSULDWHO\DGMXVWHGIRUSURGXFWLRQDQGWHFKQLFDOFKDQJHV
,QYHVWPHQWVLQUHILQHU\FKHPLFDOSURFHVVDQGOXEHVEDVHVWRFNPDQXIDFWXULQJHTXLSPHQWDUHJHQHUDOO\GHSUHFLDWHGRQDVWUDLJKWOLQH
EDVLV RYHU D \HDU OLIH 6HUYLFH VWDWLRQ EXLOGLQJV DQG IL[HG LPSURYHPHQWV JHQHUDOO\ DUH GHSUHFLDWHG RYHU D \HDU OLIH
0DLQWHQDQFHDQGUHSDLUVLQFOXGLQJSODQQHGPDMRUPDLQWHQDQFHDUHH[SHQVHGDVLQFXUUHG0DMRUUHQHZDOVDQGLPSURYHPHQWVDUH
FDSLWDOL]HGDQGWKHDVVHWVUHSODFHGDUHUHWLUHG
,PSDLUPHQW$VVHVVPHQW7KH&RUSRUDWLRQWHVWVDVVHWVRUJURXSVRIDVVHWVIRUUHFRYHUDELOLW\RQDQRQJRLQJEDVLVZKHQHYHUHYHQWV
RU FKDQJHV LQ FLUFXPVWDQFHV LQGLFDWH WKDW WKH FDUU\LQJ DPRXQWV PD\ QRW EH UHFRYHUDEOH $PRQJ WKH HYHQWV RU FKDQJHV LQ
FLUFXPVWDQFHVZKLFKFRXOGLQGLFDWHWKDWWKHFDUU\LQJYDOXHRIDQDVVHWRUDVVHWJURXSPD\QRWEHUHFRYHUDEOHDUHWKHIROORZLQJ
x DVLJQLILFDQWGHFUHDVHLQWKHPDUNHWSULFHRIDORQJOLYHGDVVHW
x DVLJQLILFDQWDGYHUVHFKDQJHLQWKHH[WHQWRUPDQQHULQZKLFKDQDVVHWLVEHLQJXVHGRULQLWVSK\VLFDOFRQGLWLRQLQFOXGLQJD
VLJQLILFDQWGHFUHDVHLQFXUUHQWDQGSURMHFWHGUHVHUYHYROXPHV
x DVLJQLILFDQWDGYHUVHFKDQJHLQOHJDOIDFWRUVRULQWKHEXVLQHVVFOLPDWHWKDWFRXOGDIIHFWWKHYDOXHLQFOXGLQJDQDGYHUVHDFWLRQ
RUDVVHVVPHQWE\DUHJXODWRU
x DQDFFXPXODWLRQRISURMHFWFRVWVVLJQLILFDQWO\LQH[FHVVRIWKHDPRXQWRULJLQDOO\H[SHFWHG
x DFXUUHQWSHULRGRSHUDWLQJORVVFRPELQHGZLWKDKLVWRU\DQGIRUHFDVWRIRSHUDWLQJRUFDVKIORZORVVHVDQG
x DFXUUHQWH[SHFWDWLRQWKDWPRUHOLNHO\WKDQQRWDORQJOLYHGDVVHWZLOOEHVROGRURWKHUZLVHGLVSRVHGRIVLJQLILFDQWO\EHIRUH
WKHHQGRILWVSUHYLRXVO\HVWLPDWHGXVHIXOOLIH
$VVHWYDOXDWLRQDQDO\VHVSHUIRUPHGDVSDUWRILWVDVVHWPDQDJHPHQWSURJUDPDQGRWKHUSURILWDELOLW\UHYLHZVDVVLVWWKH&RUSRUDWLRQ
LQDVVHVVLQJZKHWKHUHYHQWVRUFKDQJHVLQFLUFXPVWDQFHVLQGLFDWHWKHFDUU\LQJDPRXQWVRIDQ\RILWVDVVHWVPD\QRWEHUHFRYHUDEOH
,QJHQHUDOWKH&RUSRUDWLRQGRHVQRWYLHZWHPSRUDULO\ORZSULFHVRUPDUJLQVDVDQLQGLFDWLRQRILPSDLUPHQW0DQDJHPHQWEHOLHYHV
WKDWSULFHVRYHUWKHORQJWHUPPXVWEHVXIILFLHQWWRJHQHUDWHLQYHVWPHQWVLQHQHUJ\VXSSO\WRPHHWJOREDOGHPDQG$OWKRXJKSULFHV
ZLOORFFDVLRQDOO\GURSVLJQLILFDQWO\LQGXVWU\SULFHVRYHUWKHORQJWHUPZLOOFRQWLQXHWREHGULYHQE\PDUNHWVXSSO\DQGGHPDQG
IXQGDPHQWDOV 2Q WKH VXSSO\ VLGH LQGXVWU\ SURGXFWLRQ IURP PDWXUH ILHOGV LV GHFOLQLQJ 7KLV LV EHLQJ RIIVHW E\ LQYHVWPHQWV WR
JHQHUDWHSURGXFWLRQIURP QHZGLVFRYHULHVILHOGGHYHORSPHQWVDQGWHFKQRORJ\DQGHIILFLHQF\DGYDQFHPHQWV23(&LQYHVWPHQW
DFWLYLWLHV DQG SURGXFWLRQ SROLFLHV DOVR KDYH DQ LPSDFW RQ ZRUOG RLO VXSSOLHV 7KH GHPDQG VLGH LV ODUJHO\ D IXQFWLRQ RI JHQHUDO
HFRQRPLF DFWLYLWLHV DQG OHYHOV RI SURVSHULW\ %HFDXVH WKH OLIHVSDQV RI WKH YDVW PDMRULW\ RI WKH &RUSRUDWLRQ¶V PDMRU DVVHWV DUH
PHDVXUHG LQ GHFDGHV WKH YDOXH RI WKHVH DVVHWV LV SUHGRPLQDQWO\ EDVHG RQ ORQJWHUP YLHZV RI IXWXUH FRPPRGLW\ SULFHV DQG
SURGXFWLRQFRVWV'XULQJWKHOLIHVSDQRIWKHVHPDMRUDVVHWVWKH&RUSRUDWLRQH[SHFWVWKDWRLODQGJDVSULFHVZLOOH[SHULHQFHVLJQLILFDQW
YRODWLOLW\DQGFRQVHTXHQWO\WKHVHDVVHWVZLOOH[SHULHQFHSHULRGVRIKLJKHUHDUQLQJVDQGSHULRGVRIORZHUHDUQLQJVRUHYHQORVVHV
,QDVVHVVLQJZKHWKHUWKHHYHQWVRUFKDQJHVLQFLUFXPVWDQFHVLQGLFDWHWKHFDUU\LQJYDOXHRIDQDVVHWPD\QRWEHUHFRYHUDEOHWKH
&RUSRUDWLRQFRQVLGHUVUHFHQWSHULRGVRIRSHUDWLQJORVVHVLQWKHFRQWH[WRILWVORQJHUWHUPYLHZRISULFHV:KLOHQHDUWHUPSULFHVDUH
VXEMHFWWRZLGHIOXFWXDWLRQVORQJHUWHUPSULFHYLHZVDUHPRUHVWDEOHDQGPHDQLQJIXOIRUSXUSRVHVRIDVVHVVLQJIXWXUHFDVKIORZV
:KHQWKHLQGXVWU\H[SHULHQFHVDSURORQJHGDQGGHHSUHGXFWLRQLQFRPPRGLW\SULFHVWKHPDUNHWVXSSO\DQGGHPDQGFRQGLWLRQV
PD\UHVXOWLQFKDQJHVWRWKH&RUSRUDWLRQ¶VORQJWHUPSULFHRUPDUJLQDVVXPSWLRQVLWXVHVIRULWVFDSLWDOLQYHVWPHQWGHFLVLRQV7R
WKHH[WHQWWKRVHFKDQJHVUHVXOWLQDVLJQLILFDQWUHGXFWLRQWRLWVORQJWHUPRLOSULFHQDWXUDOJDVSULFHRUPDUJLQUDQJHVWKH&RUSRUDWLRQ
PD\FRQVLGHUWKDWVLWXDWLRQLQFRQMXQFWLRQZLWKRWKHUHYHQWVRUFKDQJHVLQFLUFXPVWDQFHVVXFKDVDKLVWRU\RIRSHUDWLQJORVVHVDQ
LQGLFDWRURISRWHQWLDOLPSDLUPHQWIRUFHUWDLQDVVHWV
 


127(672&2162/,'$7('),1$1&,$/67$7(0(176

,QWKH8SVWUHDPWKHVWDQGDUGL]HGPHDVXUHRIGLVFRXQWHGFDVKIORZVLQFOXGHGLQWKH6XSSOHPHQWDO,QIRUPDWLRQRQ2LODQG*DV
([SORUDWLRQDQG3URGXFWLRQDFWLYLWLHVLVUHTXLUHGWRXVHSULFHVEDVHGRQWKHDYHUDJHRIILUVWRIPRQWKSULFHV7KHVHSULFHVUHSUHVHQW
GLVFUHWH SRLQWV LQ WLPH DQG FRXOG EH KLJKHU RU ORZHU WKDQ WKH &RUSRUDWLRQ¶V ORQJWHUP SULFH DVVXPSWLRQV ZKLFK DUH XVHG IRU
LPSDLUPHQWDVVHVVPHQWV7KH&RUSRUDWLRQEHOLHYHVWKHVWDQGDUGL]HGPHDVXUHGRHVQRWSURYLGHDUHOLDEOHHVWLPDWHRIWKHH[SHFWHG
IXWXUHFDVKIORZVWREHREWDLQHGIURPWKHGHYHORSPHQWDQGSURGXFWLRQRILWVRLODQGJDVSURSHUWLHVRURIWKHYDOXHRILWVRLODQGJDV
UHVHUYHVDQGWKHUHIRUHGRHVQRWFRQVLGHULWUHOHYDQWLQGHWHUPLQLQJZKHWKHUHYHQWVRUFKDQJHVLQFLUFXPVWDQFHVLQGLFDWHWKHQHHG
IRUDQLPSDLUPHQWDVVHVVPHQW
,IHYHQWVRUFKDQJHVLQFLUFXPVWDQFHVLQGLFDWHWKDWWKHFDUU\LQJYDOXHRIDQDVVHWPD\QRWEHUHFRYHUDEOHWKH&RUSRUDWLRQHVWLPDWHV
WKHIXWXUHXQGLVFRXQWHGFDVKIORZVRIWKHDIIHFWHGSURSHUWLHVWRMXGJHWKHUHFRYHUDELOLW\RIFDUU\LQJDPRXQWV,QSHUIRUPLQJWKLV
DVVHVVPHQWDVVHWVDUHJURXSHGDWWKHORZHVWOHYHOIRUZKLFKWKHUHDUHLGHQWLILDEOHFDVKIORZVWKDWDUHODUJHO\LQGHSHQGHQWRIWKH
FDVKIORZVRIRWKHUJURXSVRIDVVHWV&DVKIORZVXVHGLQUHFRYHUDELOLW\DVVHVVPHQWVDUHEDVHGRQWKH&RUSRUDWLRQ¶VDVVXPSWLRQV
ZKLFKDUHGHYHORSHGLQWKHDQQXDOSODQQLQJDQGEXGJHWLQJSURFHVVDQGDUHFRQVLVWHQWZLWKWKHFULWHULDPDQDJHPHQWXVHVWRHYDOXDWH
LQYHVWPHQWRSSRUWXQLWLHV7KHVHHYDOXDWLRQVPDNHXVHRIWKH&RUSRUDWLRQ¶VDVVXPSWLRQVRIIXWXUHFDSLWDODOORFDWLRQVFUXGHRLODQG
QDWXUDOJDVFRPPRGLW\SULFHVUHILQLQJDQGFKHPLFDOPDUJLQVYROXPHVFRVWVDQGIRUHLJQFXUUHQF\H[FKDQJHUDWHV9ROXPHVDUH
EDVHGRQSURMHFWHGILHOGDQGIDFLOLW\SURGXFWLRQSURILOHVWKURXJKSXWRUVDOHV:KHUHXQSURYHGUHVHUYHVH[LVWDQDSSURSULDWHO\ULVN
DGMXVWHGDPRXQWRIWKHVHUHVHUYHVPD\EHLQFOXGHGLQWKHHYDOXDWLRQ&DVKIORZHVWLPDWHVIRULPSDLUPHQWWHVWLQJH[FOXGHWKHHIIHFWV
RIGHULYDWLYHLQVWUXPHQWV
$Q DVVHW JURXS LV LPSDLUHG LI LWV HVWLPDWHG XQGLVFRXQWHG FDVK IORZV DUH OHVV WKDQ WKH DVVHW¶V FDUU\LQJ YDOXH ,PSDLUPHQWV DUH
PHDVXUHGE\WKHDPRXQWE\ZKLFKWKHFDUU\LQJYDOXHH[FHHGVIDLUYDOXH)DLUYDOXHLVEDVHGRQPDUNHWSULFHVLIDQDFWLYHPDUNHW
H[LVWV IRU WKH DVVHW JURXS RU GLVFRXQWHG FDVK IORZV XVLQJ D GLVFRXQW UDWH FRPPHQVXUDWH ZLWK WKH ULVN 6LJQLILFDQW XQSURYHG
SURSHUWLHVDUHDVVHVVHGIRULPSDLUPHQWLQGLYLGXDOO\DQGYDOXDWLRQDOORZDQFHVDJDLQVWWKHFDSLWDOL]HGFRVWVDUHUHFRUGHGEDVHGRQ
WKHHVWLPDWHGHFRQRPLFFKDQFHRIVXFFHVVDQGWKHOHQJWKRIWLPHWKDWWKH&RUSRUDWLRQH[SHFWVWRKROGWKHSURSHUWLHV3URSHUWLHVWKDW
DUHQRWLQGLYLGXDOO\VLJQLILFDQWDUHDJJUHJDWHGE\JURXSVDQGDPRUWL]HGEDVHGRQGHYHORSPHQWULVNDQGDYHUDJHKROGLQJSHULRG


2WKHU*DLQVRQVDOHVRISURYHGDQGXQSURYHGSURSHUWLHVDUHRQO\UHFRJQL]HGZKHQWKHUHLVQHLWKHUXQFHUWDLQW\DERXWWKHUHFRYHU\
RIFRVWVDSSOLFDEOHWRDQ\LQWHUHVWUHWDLQHGQRUDQ\VXEVWDQWLDOREOLJDWLRQIRUIXWXUHSHUIRUPDQFHE\WKH&RUSRUDWLRQ/RVVHVRQ
SURSHUWLHVVROGDUHUHFRJQL]HGZKHQLQFXUUHGRUZKHQWKHSURSHUWLHVDUHKHOGIRUVDOHDQGWKHIDLUYDOXHRIWKHSURSHUWLHVLVOHVVWKDQ
WKHFDUU\LQJYDOXH
,QWHUHVWFRVWVLQFXUUHGWRILQDQFHH[SHQGLWXUHVGXULQJWKHFRQVWUXFWLRQSKDVHRIPXOWL\HDUSURMHFWVDUHFDSLWDOL]HGDVSDUWRIWKH
KLVWRULFDOFRVWRIDFTXLULQJWKHFRQVWUXFWHGDVVHWV7KHSURMHFWFRQVWUXFWLRQSKDVHFRPPHQFHVZLWKWKHGHYHORSPHQWRIWKHGHWDLOHG
HQJLQHHULQJGHVLJQDQGHQGVZKHQWKHFRQVWUXFWHGDVVHWVDUHUHDG\IRUWKHLULQWHQGHGXVH&DSLWDOL]HGLQWHUHVWFRVWVDUHLQFOXGHGLQ
SURSHUW\SODQWDQGHTXLSPHQWDQGDUHGHSUHFLDWHGRYHUWKHVHUYLFHOLIHRIWKHUHODWHGDVVHWV


$VVHW5HWLUHPHQW2EOLJDWLRQVDQG(QYLURQPHQWDO/LDELOLWLHV
7KH&RUSRUDWLRQLQFXUVUHWLUHPHQWREOLJDWLRQVIRUFHUWDLQDVVHWV7KHIDLUYDOXHVRIWKHVHREOLJDWLRQVDUHUHFRUGHGDVOLDELOLWLHVRQD
GLVFRXQWHGEDVLVZKLFKLVW\SLFDOO\DWWKHWLPHWKHDVVHWVDUHLQVWDOOHG7KHFRVWVDVVRFLDWHGZLWKWKHVHOLDELOLWLHVDUHFDSLWDOL]HGDV
SDUWRIWKHUHODWHGDVVHWVDQGGHSUHFLDWHG2YHUWLPHWKHOLDELOLWLHVDUHDFFUHWHGIRUWKHFKDQJHLQWKHLUSUHVHQWYDOXH
/LDELOLWLHVIRUHQYLURQPHQWDOFRVWVDUHUHFRUGHGZKHQLWLVSUREDEOHWKDWREOLJDWLRQVKDYHEHHQLQFXUUHGDQGWKHDPRXQWVFDQEH
UHDVRQDEO\HVWLPDWHG7KHVHOLDELOLWLHVDUHQRWUHGXFHGE\SRVVLEOHUHFRYHULHVIURPWKLUGSDUWLHVDQGSURMHFWHGFDVKH[SHQGLWXUHV
DUHQRWGLVFRXQWHG


)RUHLJQ&XUUHQF\7UDQVODWLRQ
7KH&RUSRUDWLRQVHOHFWVWKHIXQFWLRQDOUHSRUWLQJFXUUHQF\IRULWVLQWHUQDWLRQDOVXEVLGLDULHVEDVHGRQWKHFXUUHQF\RIWKHSULPDU\
HFRQRPLFHQYLURQPHQWLQZKLFKHDFKVXEVLGLDU\RSHUDWHV
'RZQVWUHDPDQG&KHPLFDORSHUDWLRQVSULPDULO\XVHWKHORFDOFXUUHQF\+RZHYHUWKH86GROODULVXVHGLQFRXQWULHVZLWKDKLVWRU\
RI KLJK LQIODWLRQ SULPDULO\ LQ /DWLQ $PHULFD DQG 6LQJDSRUH ZKLFK SUHGRPLQDQWO\ VHOOV LQWR WKH 86 GROODU H[SRUW PDUNHW
8SVWUHDPRSHUDWLRQV ZKLFKDUHUHODWLYHO\ VHOIFRQWDLQHGDQGLQWHJUDWHG ZLWKLQDSDUWLFXODUFRXQWU\VXFKDV&DQDGDWKH8QLWHG
.LQJGRP1RUZD\DQGFRQWLQHQWDO(XURSHXVHWKHORFDOFXUUHQF\6RPH8SVWUHDPRSHUDWLRQVSULPDULO\LQ$VLDDQG$IULFDXVH
WKH86GROODUEHFDXVHWKH\SUHGRPLQDQWO\VHOOFUXGHDQGQDWXUDOJDVSURGXFWLRQLQWR86GROODUGHQRPLQDWHGPDUNHWV
)RU DOO RSHUDWLRQV JDLQV RU ORVVHV IURP UHPHDVXULQJ IRUHLJQ FXUUHQF\ WUDQVDFWLRQV LQWR WKH IXQFWLRQDO FXUUHQF\ DUH LQFOXGHG LQ
LQFRPH


127(672&2162/,'$7('),1$1&,$/67$7(0(176

$FFRXQWLQJ&KDQJHV

(IIHFWLYH-DQXDU\([[RQ0RELODGRSWHGWKH)LQDQFLDO$FFRXQWLQJ6WDQGDUGV%RDUG¶V6WDQGDUG5HYHQXHIURP&RQWUDFWV
ZLWK &XVWRPHUV 7RSLF  DV DPHQGHG 7KH VWDQGDUG HVWDEOLVKHV D VLQJOH UHYHQXH UHFRJQLWLRQ PRGHO IRU DOO FRQWUDFWV ZLWK
FXVWRPHUV HOLPLQDWHV LQGXVWU\ DQG WUDQVDFWLRQ VSHFLILF UHTXLUHPHQWV DQG H[SDQGV GLVFORVXUH UHTXLUHPHQWV 7KH VWDQGDUG ZDV
DGRSWHGXVLQJWKH0RGLILHG5HWURVSHFWLYHPHWKRGXQGHUZKLFKSULRU\HDUUHVXOWVDUHQRWUHVWDWHGEXWVXSSOHPHQWDOLQIRUPDWLRQLV
SURYLGHGIRUDQ\PDWHULDOLPSDFWVRIWKHVWDQGDUGRQUHVXOWV7KHDGRSWLRQRIWKHVWDQGDUGGLGQRWKDYHDPDWHULDOLPSDFWRQ
DQ\RIWKHOLQHVUHSRUWHGLQWKH&RUSRUDWLRQ¶VILQDQFLDOVWDWHPHQWV7KHFXPXODWLYHHIIHFWRIDGRSWLRQRIWKHVWDQGDUGZDVGHPLQLPLV
7KH&RUSRUDWLRQGLGQRWHOHFWDQ\SUDFWLFDOH[SHGLHQWVWKDWUHTXLUHGLVFORVXUH
(IIHFWLYH -DQXDU\   ([[RQ0RELO DGRSWHG WKH )LQDQFLDO $FFRXQWLQJ 6WDQGDUGV %RDUG¶V 8SGDWH )LQDQFLDO ,QVWUXPHQWV±
2YHUDOO 6XEWRSLF  5HFRJQLWLRQ DQG 0HDVXUHPHQWRI )LQDQFLDO $VVHWV DQG )LQDQFLDO /LDELOLWLHV7KH VWDQGDUG UHTXLUHV
LQYHVWPHQWVLQHTXLW\VHFXULWLHVRWKHUWKDQFRQVROLGDWHGVXEVLGLDULHVDQGHTXLW\PHWKRGLQYHVWPHQWVWREHPHDVXUHGDWIDLUYDOXH
ZLWKFKDQJHVLQWKHIDLUYDOXHUHFRJQL]HGWKURXJKQHWLQFRPH7KH&RUSRUDWLRQHOHFWHGDPRGLILHGDSSURDFKIRUHTXLW\VHFXULWLHV
WKDWGRQRWKDYHDUHDGLO\GHWHUPLQDEOHIDLUYDOXH7KLVPRGLILHGDSSURDFKPHDVXUHVLQYHVWPHQWVDWFRVWPLQXVLPSDLUPHQWLIDQ\
SOXVRUPLQXVFKDQJHVUHVXOWLQJIURPREVHUYDEOHSULFHFKDQJHVLQRUGHUO\WUDQVDFWLRQVIRUWKHLGHQWLFDORUDVLPLODULQYHVWPHQWRI
WKHVDPHLVVXHU7KHFXPXODWLYHHIIHFWDGMXVWPHQWUHODWHGWRWKHDGRSWLRQRIWKLVVWDQGDUGLQFUHDVHGRSHQLQJUHWDLQHGHDUQLQJV
PLOOLRQ
(IIHFWLYH-DQXDU\([[RQ0RELODGRSWHGWKH)LQDQFLDO$FFRXQWLQJ6WDQGDUGV%RDUG¶V8SGDWH&RPSHQVDWLRQ±5HWLUHPHQW
%HQHILWV7RSLF,PSURYLQJWKH3UHVHQWDWLRQRI1HW3HULRGLF3HQVLRQ&RVWDQG1HW3HULRGLF3RVWUHWLUHPHQW%HQHILW&RVW7KH
XSGDWH UHTXLUHV VHSDUDWH SUHVHQWDWLRQ RI WKH VHUYLFH FRVW FRPSRQHQW IURP RWKHU FRPSRQHQWV RI QHW EHQHILW FRVWV 7KH RWKHU
FRPSRQHQWVDUHUHSRUWHGLQDQHZOLQHRQWKH&RUSRUDWLRQ¶V6WDWHPHQWRI,QFRPH³1RQVHUYLFHSHQVLRQDQGSRVWUHWLUHPHQWEHQHILW
H[SHQVH´ 7KH &RUSRUDWLRQ HOHFWHG WR XVH WKH SUDFWLFDO H[SHGLHQW ZKLFK XVHV WKH DPRXQWV GLVFORVHG LQ WKH SHQVLRQ DQG RWKHU
SRVWUHWLUHPHQWEHQHILWSODQQRWHIRUWKHSULRUFRPSDUDWLYHSHULRGVDVWKHHVWLPDWLRQEDVLVIRUDSSO\LQJWKHUHWURVSHFWLYHSUHVHQWDWLRQ
UHTXLUHPHQWVDVLWLVLPSUDFWLFDEOHWRGHWHUPLQHWKHDPRXQWVFDSLWDOL]HGLQWKRVHSHULRGV%HJLQQLQJLQWKHRWKHUFRPSRQHQWV
RI QHW EHQHILW FRVWV DUH LQFOXGHG LQ WKH &RUSRUDWH DQG ILQDQFLQJ VHJPHQW 7KH HVWLPDWHG DIWHUWD[ LPSDFW IURP WKH FKDQJH LQ
VHJPHQWDWLRQLVDQLQFUHDVHLQ&RUSRUDWHDQGILQDQFLQJH[SHQVHVRIDERXWPLOOLRQIRU7KHLQFUHDVHLQWKH&RUSRUDWHDQG
ILQDQFLQJH[SHQVHVLVRIIVHWE\ORZHUH[SHQVHVDFURVVWKHRSHUDWLQJVHJPHQWV$GGLWLRQDOO\RQO\WKHVHUYLFHFRVWFRPSRQHQWRIQHW
EHQHILWFRVWVLVHOLJLEOHIRUFDSLWDOL]DWLRQLQVLWXDWLRQVZKHUHLWLVRWKHUZLVHDSSURSULDWHWRFDSLWDOL]HHPSOR\HHFRVWVLQFRQQHFWLRQ
ZLWKWKHFRQVWUXFWLRQRUSURGXFWLRQRIDQDVVHW
7KHLPSDFWRIWKHUHWURVSHFWLYHSUHVHQWDWLRQFKDQJHRQ([[RQ0RELO
V &RQVROLGDWHG6WDWHPHQWRI,QFRPH IRUDQGLV
VKRZQEHORZ
     
     

   $V $V $V $V

5HSRUWHG  &KDQJH  $GMXVWHG  5HSRUWHG  &KDQJH  $GMXVWHG
   PLOOLRQVRIGROODUV
             
3URGXFWLRQDQGPDQXIDFWXULQJH[SHQVHV         
6HOOLQJJHQHUDODQGDGPLQLVWUDWLYHH[SHQVHV         
1RQVHUYLFHSHQVLRQDQGSRVWUHWLUHPHQWEHQHILWH[SHQVH           


127(672&2162/,'$7('),1$1&,$/67$7(0(176

(IIHFWLYH-DQXDU\WKH&RUSRUDWLRQDGRSWHGWKH)LQDQFLDO$FFRXQWLQJ6WDQGDUGV%RDUG¶V6WDQGDUG/HDVHV7RSLFDV
DPHQGHG7KHVWDQGDUGUHTXLUHVDOO OHDVHVWREHUHFRUGHGRQWKHEDODQFHVKHHWDVDULJKWRI XVHDVVHWDQGDOHDVHOLDELOLW\7KH
&RUSRUDWLRQXVHGDWUDQVLWLRQPHWKRGWKDWDSSOLHVWKHQHZOHDVHVWDQGDUGDW-DQXDU\DQGUHFRJQL]HVDQ\FXPXODWLYHHIIHFW
DGMXVWPHQWVWRWKHRSHQLQJEDODQFHRIUHWDLQHGHDUQLQJV7KH&RUSRUDWLRQDSSOLHGDSROLF\HOHFWLRQWRH[FOXGHVKRUWWHUP
OHDVHVIURPEDODQFHVKHHWUHFRJQLWLRQDQGDOVRHOHFWHGFHUWDLQSUDFWLFDOH[SHGLHQWVDWDGRSWLRQ$VSHUPLWWHGXQGHUWKHVHH[SHGLHQWV
WKH&RUSRUDWLRQGLGQRWUHDVVHVVZKHWKHUH[LVWLQJFRQWUDFWVDUHRUFRQWDLQOHDVHVWKHOHDVHFODVVLILFDWLRQIRUDQ\H[LVWLQJOHDVHV
LQLWLDOGLUHFWFRVWVIRUDQ\H[LVWLQJOHDVHDQGZKHWKHUH[LVWLQJODQGHDVHPHQWVDQGULJKWVRIZD\WKDWZHUHQRWSUHYLRXVO\DFFRXQWHG
IRUDVOHDVHVDUHRUFRQWDLQDOHDVH$W-DQXDU\WKHRSHUDWLQJOHDVHOLDELOLW\LVHVWLPDWHGWREHLQWKHUDQJHRIELOOLRQ
DQGWKHRSHUDWLQJOHDVHULJKWRIXVHDVVHWLVHVWLPDWHGWREHLQWKHUDQJHRIELOOLRQLQFOXGLQJDERXWELOOLRQUHODWHGWRSUHSDLG
OHDVHV7KHFXPXODWLYHHIIHFWDGMXVWPHQWLVH[SHFWHGWREHGHPLQLPLV



0LVFHOODQHRXV)LQDQFLDO,QIRUPDWLRQ
5HVHDUFKDQGGHYHORSPHQWH[SHQVHVWRWDOHGPLOOLRQLQPLOOLRQLQDQGPLOOLRQLQ
1HWLQFRPHLQFOXGHGEHIRUHWD[DJJUHJDWHIRUHLJQH[FKDQJHWUDQVDFWLRQORVVHVRIPLOOLRQLQDQGJDLQVRIPLOOLRQDQG
PLOOLRQLQDQGUHVSHFWLYHO\
,QDQGQHWLQFRPHLQFOXGHGDJDLQRIPLOOLRQDQGORVVHVRIPLOOLRQDQGPLOOLRQUHVSHFWLYHO\
DWWULEXWDEOH WR WKH FRPELQHG HIIHFWV RI /,)2 LQYHQWRU\ DFFXPXODWLRQV DQG GUDZGRZQV 7KH DJJUHJDWH UHSODFHPHQW FRVW RI
LQYHQWRULHVZDVHVWLPDWHGWRH[FHHGWKHLU/,)2FDUU\LQJYDOXHVE\ELOOLRQDQGELOOLRQDW'HFHPEHUDQG
UHVSHFWLYHO\
&UXGHRLOSURGXFWVDQGPHUFKDQGLVHDVRI\HDUHQGDQGFRQVLVWRIWKHIROORZLQJ

    
   PLOOLRQVRIGROODUV
     
&UXGHRLO    
3HWUROHXPSURGXFWV   
&KHPLFDOSURGXFWV    
*DVRWKHU    
 7RWDO   


127(672&2162/,'$7('),1$1&,$/67$7(0(176

 2WKHU&RPSUHKHQVLYH,QFRPH,QIRUPDWLRQ

   &XPXODWLYH  3RVW  
   )RUHLJQ  UHWLUHPHQW  
   ([FKDQJH  %HQHILWV  
([[RQ0RELO6KDUHRI$FFXPXODWHG2WKHU 7UDQVODWLRQ  5HVHUYHV  
&RPSUHKHQVLYH,QFRPH $GMXVWPHQW  $GMXVWPHQW  7RWDO
   PLOOLRQVRIGROODUV
         
%DODQFHDVRI'HFHPEHU   
&XUUHQWSHULRGFKDQJHH[FOXGLQJDPRXQWVUHFODVVLILHG
 IURPDFFXPXODWHGRWKHUFRPSUHKHQVLYHLQFRPH   
$PRXQWVUHFODVVLILHGIURPDFFXPXODWHGRWKHU
 FRPSUHKHQVLYHLQFRPH   
7RWDOFKDQJHLQDFFXPXODWHGRWKHUFRPSUHKHQVLYHLQFRPH   
%DODQFHDVRI'HFHPEHU   
  
&XUUHQWSHULRGFKDQJHH[FOXGLQJDPRXQWVUHFODVVLILHG
 IURPDFFXPXODWHGRWKHUFRPSUHKHQVLYHLQFRPH   
$PRXQWVUHFODVVLILHGIURPDFFXPXODWHGRWKHU
 FRPSUHKHQVLYHLQFRPH   
7RWDOFKDQJHLQDFFXPXODWHGRWKHUFRPSUHKHQVLYHLQFRPH   
%DODQFHDVRI'HFHPEHU   
  
&XUUHQWSHULRGFKDQJHH[FOXGLQJDPRXQWVUHFODVVLILHG
 IURPDFFXPXODWHGRWKHUFRPSUHKHQVLYHLQFRPH   
$PRXQWVUHFODVVLILHGIURPDFFXPXODWHGRWKHU
 FRPSUHKHQVLYHLQFRPH   
7RWDOFKDQJHLQDFFXPXODWHGRWKHUFRPSUHKHQVLYHLQFRPH   
%DODQFHDVRI'HFHPEHU   

$PRXQWV5HFODVVLILHG2XWRI$FFXPXODWHG2WKHU 
&RPSUHKHQVLYH,QFRPH%HIRUHWD[,QFRPH([SHQVH    
    PLOOLRQVRIGROODUV
)RUHLJQH[FKDQJHWUDQVODWLRQJDLQORVVLQFOXGHGLQQHWLQFRPH 
 6WDWHPHQWRI,QFRPHOLQH2WKHULQFRPH    
$PRUWL]DWLRQDQGVHWWOHPHQWRISRVWUHWLUHPHQWEHQHILWVUHVHUYHV 
 DGMXVWPHQWLQFOXGHGLQQHWSHULRGLFEHQHILWFRVWV 
 6WDWHPHQWRI,QFRPHOLQH1RQVHUYLFHSHQVLRQDQGSRVWUHWLUHPHQW 
 EHQHILWH[SHQVH    

,QFRPH7D[([SHQVH&UHGLW)RU
&RPSRQHQWVRI2WKHU&RPSUHKHQVLYH,QFRPH   
   PLOOLRQVRIGROODUV
       
)RUHLJQH[FKDQJHWUDQVODWLRQDGMXVWPHQW   
3RVWUHWLUHPHQWEHQHILWVUHVHUYHVDGMXVWPHQWH[FOXGLQJDPRUWL]DWLRQ   
$PRUWL]DWLRQDQGVHWWOHPHQWRISRVWUHWLUHPHQWEHQHILWVUHVHUYHV
 DGMXVWPHQWLQFOXGHGLQQHWSHULRGLFEHQHILWFRVWV   
7RWDO   


127(672&2162/,'$7('),1$1&,$/67$7(0(176

&DVK)ORZ,QIRUPDWLRQ
7KH &RQVROLGDWHG 6WDWHPHQW RI &DVK )ORZV SURYLGHV LQIRUPDWLRQ DERXW FKDQJHV LQ FDVK DQG FDVK HTXLYDOHQWV +LJKO\ OLTXLG
LQYHVWPHQWVZLWKPDWXULWLHVRIWKUHHPRQWKVRUOHVVZKHQDFTXLUHGDUHFODVVLILHGDVFDVKHTXLYDOHQWV
)RUWKH³1HWJDLQRQDVVHWVDOHV´RQWKH&RQVROLGDWHG6WDWHPHQWRI&DVK)ORZVLQFOXGHVEHIRUHWD[DPRXQWVIURPWKHVDOH
RIVHUYLFHVWDWLRQVLQ*HUPDQ\WKHGLYHVWPHQWRIWKH$XJXVWDUHILQHU\LQ,WDO\DQGWKHVDOHRIDQXQGHYHORSHG8SVWUHDPSURSHUW\
LQ$XVWUDOLD)RUWKHQXPEHULQFOXGHVEHIRUHWD[DPRXQWVIURPWKHVDOHRIVHUYLFHVWDWLRQVLQPXOWLSOHFRXQWULHV8SVWUHDP
DVVHWWUDQVDFWLRQVLQWKH86DQGWKHVDOHRI([[RQ0RELO¶VRSHUDWHG8SVWUHDPEXVLQHVVLQ1RUZD\)RUWKHQXPEHULQFOXGHV
EHIRUHWD[DPRXQWVIURPWKHVDOHRIVHUYLFHVWDWLRQVLQ&DQDGDWKHVDOHRI8SVWUHDPSURSHUWLHVLQWKH86DQGWKHVDOHRIDYLDWLRQ
IXHOLQJRSHUDWLRQVDFURVV PXOWLSOHFRXQWULHV7KHVHQHW JDLQVDUHUHSRUWHGLQ³2WKHULQFRPH´RQWKH &RQVROLGDWHG6WDWHPHQWRI
,QFRPH
,Q  WKH ³$GGLWLRQVUHGXFWLRQV LQ FRPPHUFLDO SDSHU DQG GHEW ZLWK WKUHH PRQWKV RU OHVV PDWXULW\´ RQ WKH &RQVROLGDWHG
6WDWHPHQWRI&DVK)ORZVLQFOXGHVDQHWPLOOLRQDGGLWLRQRIFRPPHUFLDOSDSHUZLWKPDWXULW\RYHUWKUHHPRQWKV7KHJURVV
DPRXQWLVVXHGZDVELOOLRQZKLOHWKHJURVVDPRXQWUHSDLGZDVELOOLRQ,QWKHQXPEHULQFOXGHVDQHWPLOOLRQ
UHSD\PHQWRIFRPPHUFLDOSDSHUZLWKPDWXULW\RYHUWKUHHPRQWKV7KHJURVVDPRXQWLVVXHGZDVELOOLRQZKLOHWKHJURVVDPRXQW
UHSDLGZDVELOOLRQ,QWKHQXPEHULQFOXGHVDQHWPLOOLRQDGGLWLRQRIFRPPHUFLDOSDSHUZLWKPDWXULW\RYHUWKUHH
PRQWKV7KHJURVVDPRXQWLVVXHGZDVELOOLRQZKLOHWKHJURVVDPRXQWUHSDLGZDVELOOLRQ
,QWKH&RUSRUDWLRQFRPSOHWHGWKHDFTXLVLWLRQVRI,QWHU2LO&RUSRUDWLRQPRVWO\XQSURYHGSURSHUWLHVLQ3DSXD1HZ*XLQHDIRU
ELOOLRQDQGRIFRPSDQLHVWKDWRZQPRVWO\XQSURYHGRLODQGJDVSURSHUWLHVLQWKH3HUPLDQ%DVLQDQGRWKHUDVVHWVIRUELOOLRQ
7KHVHWUDQVDFWLRQVLQFOXGHGDVLJQLILFDQWQRQFDVKFRPSRQHQWDVVRFLDWHGZLWKWKHLVVXDQFHRIDWRWDORIPLOOLRQVKDUHVRI([[RQ
0RELO&RUSRUDWLRQFRPPRQVWRFNLQDFTXLVLWLRQFRQVLGHUDWLRQKDYLQJDWRWDODFTXLVLWLRQGDWHYDOXHRIELOOLRQ
      
  PLOOLRQVRIGROODUV

&DVKSD\PHQWVIRULQWHUHVW    

&DVKSD\PHQWVIRULQFRPHWD[HV    


$GGLWLRQDO:RUNLQJ&DSLWDO,QIRUPDWLRQ
    'HF  'HF
      
    PLOOLRQVRIGROODUV
1RWHVDQGDFFRXQWVUHFHLYDEOH 
 7UDGHOHVVUHVHUYHVRIPLOOLRQDQGPLOOLRQ  
 2WKHUOHVVUHVHUYHVRIPLOOLRQDQGPLOOLRQ   
  7RWDO  
1RWHVDQGORDQVSD\DEOH 
 %DQNORDQV   
 &RPPHUFLDOSDSHU   
 /RQJWHUPGHEWGXHZLWKLQRQH\HDU   
  7RWDO  
$FFRXQWVSD\DEOHDQGDFFUXHGOLDELOLWLHV 
 7UDGHSD\DEOHV  
 3D\DEOHVWRHTXLW\FRPSDQLHV   
 $FFUXHGWD[HVRWKHUWKDQLQFRPHWD[HV   
 2WKHU   
  7RWDO  

7KH&RUSRUDWLRQKDVVKRUWWHUPFRPPLWWHGOLQHVRIFUHGLWRIELOOLRQZKLFKZHUHXQXVHGDVRI'HFHPEHU7KHVHOLQHV
DUHDYDLODEOHIRUJHQHUDOFRUSRUDWHSXUSRVHV
7KHZHLJKWHGDYHUDJHLQWHUHVWUDWHRQVKRUWWHUPERUURZLQJVRXWVWDQGLQJZDVSHUFHQWDQGSHUFHQWDW'HFHPEHU
DQGUHVSHFWLYHO\


127(672&2162/,'$7('),1$1&,$/67$7(0(176

(TXLW\&RPSDQ\,QIRUPDWLRQ
7KH VXPPDUL]HG ILQDQFLDO LQIRUPDWLRQ EHORZ LQFOXGHV DPRXQWV UHODWHG WR FHUWDLQ OHVVWKDQPDMRULW\RZQHG FRPSDQLHV DQG
PDMRULW\RZQHGVXEVLGLDULHVZKHUHPLQRULW\VKDUHKROGHUVSRVVHVVWKHULJKWWRSDUWLFLSDWHLQVLJQLILFDQWPDQDJHPHQWGHFLVLRQVVHH
1RWH7KHVHFRPSDQLHVDUHSULPDULO\HQJDJHGLQRLODQGJDVH[SORUDWLRQDQGSURGXFWLRQDQGQDWXUDOJDVPDUNHWLQJLQ1RUWK
$PHULFDQDWXUDOJDVH[SORUDWLRQSURGXFWLRQDQGGLVWULEXWLRQLQ(XURSHOLTXHILHGQDWXUDOJDV/1*RSHUDWLRQVDQGWUDQVSRUWDWLRQ
RIFUXGHRLOLQ$IULFDDQGH[SORUDWLRQSURGXFWLRQ/1*RSHUDWLRQVDQGWKHPDQXIDFWXUHDQGVDOHRISHWUROHXPDQGSHWURFKHPLFDO
SURGXFWVLQ$VLDDQGWKH0LGGOH(DVW$OVRLQFOXGHGDUHVHYHUDOUHILQLQJSHWURFKHPLFDOPDQXIDFWXULQJDQGPDUNHWLQJYHQWXUHV
7KHVKDUHRIWRWDOHTXLW\FRPSDQ\UHYHQXHVIURPVDOHVWR([[RQ0RELOFRQVROLGDWHGFRPSDQLHVZDVSHUFHQWSHUFHQWDQG
SHUFHQWLQWKH\HDUVDQGUHVSHFWLYHO\
7KH&RUSRUDWLRQ¶VRZQHUVKLSLQWKHVHYHQWXUHVLVLQWKHIRUPRIVKDUHVLQFRUSRUDWHMRLQWYHQWXUHVDVZHOODVLQWHUHVWVLQSDUWQHUVKLSV
'LIIHUHQFHVEHWZHHQWKHFRPSDQ\¶VFDUU\LQJYDOXHRIDQHTXLW\LQYHVWPHQWDQGLWVXQGHUO\LQJHTXLW\LQWKHQHWDVVHWVRIWKHDIILOLDWH
DUHDVVLJQHGWRWKHH[WHQWSUDFWLFDEOHWRVSHFLILFDVVHWVDQGOLDELOLWLHVEDVHGRQWKHFRPSDQ\¶VDQDO\VLVRIWKHIDFWRUVJLYLQJULVHWR
WKHGLIIHUHQFH7KHDPRUWL]DWLRQRIWKLVGLIIHUHQFHDVDSSURSULDWHLVLQFOXGHGLQ³,QFRPHIURPHTXLW\DIILOLDWHV´RQWKH&RQVROLGDWHG
6WDWHPHQWRI,QFRPH

       
(TXLW\&RPSDQ\   ([[RQ0RELO  ([[RQ0RELO  ([[RQ0RELO
)LQDQFLDO6XPPDU\  7RWDO  6KDUH  7RWDO  6KDUH  7RWDO  6KDUH
   PLOOLRQVRIGROODUV
             
7RWDOUHYHQXHV      
,QFRPHEHIRUHLQFRPHWD[HV      
,QFRPHWD[HV            
 ,QFRPHIURPHTXLW\DIILOLDWHV      
       
&XUUHQWDVVHWV      
/RQJWHUPDVVHWV            
 7RWDODVVHWV      
&XUUHQWOLDELOLWLHV      
/RQJWHUPOLDELOLWLHV            
 1HWDVVHWV      
 


127(672&2162/,'$7('),1$1&,$/67$7(0(176

$OLVWRIVLJQLILFDQWHTXLW\FRPSDQLHVDVRI'HFHPEHUWRJHWKHUZLWKWKH&RUSRUDWLRQ¶VSHUFHQWDJHRZQHUVKLSLQWHUHVWLV
GHWDLOHGEHORZ
  3HUFHQWDJH  
  2ZQHUVKLS  
  ,QWHUHVW  
 8SVWUHDP 
 $HUD(QHUJ\//&   
 %DU]DQ*DV&RPSDQ\/LPLWHG   
 %(%(UGJDVXQG(UGRHO*PE+ &R.*   
 &DPHURRQ2LO7UDQVSRUWDWLRQ&RPSDQ\6$   
 &DVSLDQ3LSHOLQH&RQVRUWLXP.D]DNKVWDQ   
 &URVV7LPEHUV(QHUJ\//&   
 *ROGHQ3DVV/1*7HUPLQDO//&   
 0DULQH:HOO&RQWDLQPHQW&RPSDQ\//&   
 0R]DPELTXH5RYXPD9HQWXUH6S$   
 1HGHUODQGVH$DUGROLH0DDWVFKDSSLM%9   
 4DWDU/LTXHILHG*DV&RPSDQ\/LPLWHG   
 4DWDU/LTXHILHG*DV&RPSDQ\/LPLWHG   
 5DV/DIIDQ/LTXHILHG1DWXUDO*DV&RPSDQ\/LPLWHG   
 5DV/DIIDQ/LTXHILHG1DWXUDO*DV&RPSDQ\/LPLWHG,, 
 5DV/DIIDQ/LTXHILHG1DWXUDO*DV&RPSDQ\/LPLWHG 
 6RXWK+RRN/1*7HUPLQDO&RPSDQ\/LPLWHG 
 7HQJL]FKHYURLO//3 
 7HUPLQDOH*1/$GULDWLFR6UO 
  
 'RZQVWUHDP
 )XMLDQ5HILQLQJ 3HWURFKHPLFDO&R/WG 
 3HUPLDQ([SUHVV3DUWQHUV//& 
 6DXGL$UDPFR0RELO5HILQHU\&RPSDQ\/WG 
  
 &KHPLFDO 
 $O-XEDLO3HWURFKHPLFDO&RPSDQ\ 
 *XOI&RDVW*URZWK9HQWXUHV//& 
 ,QILQHXP,WDOLDVUO 
 ,QILQHXP6LQJDSRUH3WH/WG 
 ,QILQHXP86$/3 
 6DXGL<DQEX3HWURFKHPLFDO&R 


127(672&2162/,'$7('),1$1&,$/67$7(0(176

,QYHVWPHQWV$GYDQFHVDQG/RQJ7HUP5HFHLYDEOHV

    'HF  'HF
      
    PLOOLRQVRIGROODUV
(TXLW\PHWKRGFRPSDQ\LQYHVWPHQWVDQGDGYDQFHV 
 ,QYHVWPHQWV   
 $GYDQFHV   
  7RWDOHTXLW\PHWKRGFRPSDQ\LQYHVWPHQWVDQGDGYDQFHV  
(TXLW\VHFXULWLHVFDUULHGDWIDLUYDOXHDQGRWKHULQYHVWPHQWVDWDGMXVWHGFRVWEDVLV   
/RQJWHUPUHFHLYDEOHVDQGPLVFHOODQHRXVQHWRIUHVHUYHVRIPLOOLRQDQGPLOOLRQ   
  7RWDO   
   

(IIHFWLYH-DQXDU\([[RQ0RELODGRSWHGWKH)LQDQFLDO$FFRXQWLQJ6WDQGDUGV%RDUG¶V8SGDWH)LQDQFLDO,QVWUXPHQWV
2YHUDOO6XEWRSLF5HFRJQLWLRQDQG0HDVXUHPHQWRI)LQDQFLDO$VVHWVDQG)LQDQFLDO/LDELOLWLHV7KHSRUWLRQRIXQUHDOL]HG
JDLQVDQGORVVHVUHFRJQL]HGGXULQJWKHUHSRUWLQJSHULRGRQHTXLW\VHFXULWLHVVWLOOKHOGDW'HFHPEHUDQGWKHFDUU\LQJ
YDOXHRIHTXLW\VHFXULWLHVZLWKRXWUHDGLO\GHWHUPLQDEOHIDLUYDOXHVDW'HFHPEHUZHUHQRWVLJQLILFDQWWRWKH&RUSRUDWLRQ



3URSHUW\3ODQWDQG(TXLSPHQWDQG$VVHW5HWLUHPHQW2EOLJDWLRQV

   'HFHPEHU  'HFHPEHU
3URSHUW\3ODQWDQG(TXLSPHQW  &RVW  1HW  &RVW  1HW
   PLOOLRQVRIGROODUV
         
8SVWUHDP      
'RZQVWUHDP        
&KHPLFDO        
2WKHU        
 7RWDO      

7KH&RUSRUDWLRQKDVDUREXVWSURFHVVWRPRQLWRUIRULQGLFDWRUVRISRWHQWLDOLPSDLUPHQWDFURVVLWVDVVHWJURXSVWKURXJKRXWWKH\HDU
7KLVSURFHVVLVDOLJQHGZLWKWKHUHTXLUHPHQWVRI$6&DQGUHOLHVLQSDUWRQWKH&RUSRUDWLRQ¶VSODQQLQJDQGEXGJHWLQJF\FOH,Q
WKH&RUSRUDWLRQLGHQWLILHGDQXPEHURIVLWXDWLRQVZKHUHHYHQWVRUFKDQJHVLQFLUFXPVWDQFHVLQGLFDWHGWKDWWKHFDUU\LQJYDOXH
RI FHUWDLQ ORQJOLYHG DVVHWV PDLQO\ LQ 1RUWK $PHULFD PD\ QRW EH UHFRYHUDEOH $FFRUGLQJO\ LPSDLUPHQW DVVHVVPHQWV ZHUH
SHUIRUPHGZKLFKLQGLFDWHGWKDWFHUWDLQDVVHWJURXSVDVVHVVHGKDYHIXWXUHXQGLVFRXQWHGFDVKIORZHVWLPDWHVWKDWGRQRWUHFRYHUWKHLU
FDUU\LQJYDOXHV7KH&RUSRUDWLRQ¶VUHVXOWVLQFOXGHEHIRUHWD[FKDUJHVRIELOOLRQWRUHGXFHWKHFDUU\LQJYDOXHRIWKRVH
DVVHWVWRIDLUYDOXH,QDQGWKH&RUSRUDWLRQUHFRJQL]HGEHIRUHWD[LPSDLUPHQWFKDUJHVRIELOOLRQDQGELOOLRQ
UHVSHFWLYHO\


127(672&2162/,'$7('),1$1&,$/67$7(0(176

7KHDVVHVVPHQWRIIDLUYDOXHVUHTXLUHGWKHXVHRI/HYHOLQSXWVDQGDVVXPSWLRQVWKDWDUHEDVHGXSRQWKHYLHZVRIDOLNHO\PDUNHW
SDUWLFLSDQW7KHSULQFLSDOSDUDPHWHUVXVHGWRHVWDEOLVKIDLUYDOXHVLQFOXGHGHVWLPDWHVRIERWKSURYHGDQGXQSURYHGUHVHUYHVIXWXUH
FRPPRGLW\SULFHVZKLFKZHUHFRQVLVWHQWZLWKWKHDYHUDJHRIWKLUGSDUW\LQGXVWU\H[SHUWVDQGJRYHUQPHQWDJHQFLHVGULOOLQJDQG
GHYHORSPHQW FRVWV D UDQJH RI GLVFRXQW UDWHV GHSHQGLQJ RQ WKH FKDUDFWHULVWLFV RI WKH DVVHW JURXS DQG FRPSDUDEOH PDUNHW
WUDQVDFWLRQV)DFWRUVZKLFKFRXOGSXWIXUWKHUDVVHWVDWULVNRILPSDLUPHQWLQWKHIXWXUHLQFOXGHUHGXFWLRQVLQWKH&RUSRUDWLRQ¶VORQJ
WHUPSULFHRXWORRNVFKDQJHVLQWKHDOORFDWLRQRIFDSLWDODQGRSHUDWLQJFRVWLQFUHDVHVZKLFKH[FHHGWKHSDFHRIHIILFLHQFLHVRUWKH
SDFHRIRLODQGQDWXUDOJDVSULFHLQFUHDVHV+RZHYHUGXHWRWKHLQKHUHQWGLIILFXOW\LQSUHGLFWLQJIXWXUHFRPPRGLW\SULFHVDQGWKH
UHODWLRQVKLSEHWZHHQLQGXVWU\SULFHVDQGFRVWVLWLVQRWSUDFWLFDEOHWRUHDVRQDEO\HVWLPDWHWKHH[LVWHQFHRUUDQJHRIDQ\SRWHQWLDO
IXWXUHLPSDLUPHQWFKDUJHVUHODWHGWRWKH&RUSRUDWLRQ¶VORQJOLYHGDVVHWV
$FFXPXODWHGGHSUHFLDWLRQDQGGHSOHWLRQWRWDOHGPLOOLRQDWWKHHQGRIDQGPLOOLRQDWWKHHQGRI
,QWHUHVWFDSLWDOL]HGLQDQGZDVPLOOLRQPLOOLRQDQGPLOOLRQUHVSHFWLYHO\


$VVHW5HWLUHPHQW2EOLJDWLRQV
7KH&RUSRUDWLRQLQFXUVUHWLUHPHQWREOLJDWLRQVIRUFHUWDLQDVVHWV7KHIDLUYDOXHVRIWKHVHREOLJDWLRQVDUHUHFRUGHGDVOLDELOLWLHVRQD
GLVFRXQWHG EDVLV ZKLFK LV W\SLFDOO\ DW WKH WLPH WKH DVVHWV DUH LQVWDOOHG ,Q WKH HVWLPDWLRQ RI IDLU YDOXH WKH &RUSRUDWLRQ XVHV
DVVXPSWLRQVDQGMXGJPHQWVUHJDUGLQJVXFKIDFWRUVDVWKHH[LVWHQFHRIDOHJDOREOLJDWLRQIRUDQDVVHWUHWLUHPHQWREOLJDWLRQWHFKQLFDO
DVVHVVPHQWV RI WKH DVVHWV HVWLPDWHG DPRXQWV DQG WLPLQJ RI VHWWOHPHQWV GLVFRXQW UDWHV DQG LQIODWLRQ UDWHV $VVHW UHWLUHPHQW
REOLJDWLRQV LQFXUUHGLQWKHFXUUHQWSHULRG ZHUH/HYHO IDLUYDOXH PHDVXUHPHQWV7KHFRVWVDVVRFLDWHG ZLWKWKHVHOLDELOLWLHVDUH
FDSLWDOL]HGDVSDUWRIWKHUHODWHGDVVHWVDQGGHSUHFLDWHGDVWKHUHVHUYHVDUHSURGXFHG2YHUWLPHWKHOLDELOLWLHVDUHDFFUHWHGIRUWKH
FKDQJHLQWKHLUSUHVHQWYDOXH
$VVHWUHWLUHPHQWREOLJDWLRQVIRUGRZQVWUHDPDQGFKHPLFDOIDFLOLWLHVJHQHUDOO\EHFRPHILUPDWWKHWLPHWKHIDFLOLWLHVDUHSHUPDQHQWO\
VKXWGRZQDQGGLVPDQWOHG7KHVHREOLJDWLRQVPD\LQFOXGHWKHFRVWVRIDVVHWGLVSRVDODQGDGGLWLRQDOVRLOUHPHGLDWLRQ+RZHYHU
WKHVHVLWHVKDYHLQGHWHUPLQDWHOLYHVEDVHGRQSODQVIRUFRQWLQXHGRSHUDWLRQVDQGDVVXFKWKHIDLUYDOXHRIWKHFRQGLWLRQDOOHJDO
REOLJDWLRQVFDQQRWEHPHDVXUHGVLQFHLWLVLPSRVVLEOHWRHVWLPDWHWKHIXWXUHVHWWOHPHQWGDWHVRIVXFKREOLJDWLRQV
7KHIROORZLQJWDEOHVXPPDUL]HVWKHDFWLYLW\LQWKHOLDELOLW\IRUDVVHWUHWLUHPHQWREOLJDWLRQV

    
   PLOOLRQVRIGROODUV
     
%HJLQQLQJEDODQFH  
 $FFUHWLRQH[SHQVHDQGRWKHUSURYLVLRQV    
 5HGXFWLRQGXHWRSURSHUW\VDOHV    
 3D\PHQWVPDGH    
 /LDELOLWLHVLQFXUUHG    
 )RUHLJQFXUUHQF\WUDQVODWLRQ    
 5HYLVLRQV    
(QGLQJEDODQFH  

7KH ORQJWHUP $VVHW 5HWLUHPHQW 2EOLJDWLRQV ZHUH  PLOOLRQ DQG  PLOOLRQ DW 'HFHPEHU   DQG 
UHVSHFWLYHO\DQGDUHLQFOXGHGLQ2WKHUORQJWHUPREOLJDWLRQV


127(672&2162/,'$7('),1$1&,$/67$7(0(176

$FFRXQWLQJIRU6XVSHQGHG([SORUDWRU\:HOO&RVWV
7KH&RUSRUDWLRQFRQWLQXHVFDSLWDOL]DWLRQRIH[SORUDWRU\ ZHOOFRVWV ZKHQWKH ZHOO KDVIRXQGD VXIILFLHQWTXDQWLW\RIUHVHUYHV WR
MXVWLI\LWVFRPSOHWLRQDVDSURGXFLQJZHOODQGWKH&RUSRUDWLRQLVPDNLQJVXIILFLHQWSURJUHVVDVVHVVLQJWKHUHVHUYHVDQGWKHHFRQRPLF
DQGRSHUDWLQJYLDELOLW\RIWKHSURMHFW7KHWHUP³SURMHFW´DVXVHGLQWKLVUHSRUWFDQUHIHUWRDYDULHW\RIGLIIHUHQWDFWLYLWLHVDQGGRHV
QRWQHFHVVDULO\KDYHWKHVDPHPHDQLQJDVLQDQ\JRYHUQPHQWSD\PHQWWUDQVSDUHQF\UHSRUWV
7KHIROORZLQJWZRWDEOHVSURYLGHGHWDLOVRIWKHFKDQJHVLQWKHEDODQFHRIVXVSHQGHGH[SORUDWRU\ZHOOFRVWVDVZHOODVDQDJLQJ
VXPPDU\RIWKRVHFRVWV
&KDQJHLQFDSLWDOL]HGVXVSHQGHGH[SORUDWRU\ZHOOFRVWV
       
    PLOOLRQVRIGROODUV
        
%DODQFHEHJLQQLQJDW-DQXDU\    
 $GGLWLRQVSHQGLQJWKHGHWHUPLQDWLRQRISURYHGUHVHUYHV    
 &KDUJHGWRH[SHQVH    
 5HFODVVLILFDWLRQVWRZHOOVIDFLOLWLHVDQGHTXLSPHQWEDVHGRQWKH 
  GHWHUPLQDWLRQRISURYHGUHVHUYHV    
 'LYHVWPHQWV2WKHU    
(QGLQJEDODQFHDW'HFHPEHU    
(QGLQJEDODQFHDWWULEXWHGWRHTXLW\FRPSDQLHVLQFOXGHGDERYH    

3HULRGHQGFDSLWDOL]HGVXVSHQGHGH[SORUDWRU\ZHOOFRVWV
       
    PLOOLRQVRIGROODUV
        
&DSLWDOL]HGIRUDSHULRGRIRQH\HDURUOHVV     
 &DSLWDOL]HGIRUDSHULRGRIEHWZHHQRQHDQGILYH\HDUV     
 &DSLWDOL]HGIRUDSHULRGRIEHWZHHQILYHDQGWHQ\HDUV     
 &DSLWDOL]HGIRUDSHULRGRIJUHDWHUWKDQWHQ\HDUV     
&DSLWDOL]HGIRUDSHULRGJUHDWHUWKDQRQH\HDUVXEWRWDO     
  7RWDO     

([SORUDWLRQDFWLYLW\RIWHQLQYROYHVGULOOLQJPXOWLSOHZHOOVRYHUDQXPEHURI\HDUVWRIXOO\HYDOXDWHDSURMHFW7KHWDEOHEHORZ
SURYLGHVDEUHDNGRZQRIWKHQXPEHURISURMHFWVZLWKRQO\H[SORUDWRU\ZHOOFRVWVFDSLWDOL]HGIRUDSHULRGRIRQH\HDURUOHVVDQG
WKRVHWKDWKDYHKDGH[SORUDWRU\ZHOOFRVWVFDSLWDOL]HGIRUDSHULRGRIJUHDWHUWKDQRQH\HDU

       

1XPEHURISURMHFWVWKDWRQO\KDYHH[SORUDWRU\ZHOOFRVWVFDSLWDOL]HGIRUDSHULRG 
 RIRQH\HDURUOHVV     
1XPEHURISURMHFWVWKDWKDYHH[SORUDWRU\ZHOOFRVWVFDSLWDOL]HGIRUDSHULRG 
 RIJUHDWHUWKDQRQH\HDU     
  7RWDO     

2I WKH  SURMHFWV WKDW KDYH H[SORUDWRU\ ZHOO FRVWV FDSLWDOL]HG IRU D SHULRG JUHDWHU WKDQ RQH \HDU DV RI 'HFHPEHU 
SURMHFWVKDYHGULOOLQJLQWKHSUHFHGLQJ\HDURUH[SORUDWRU\DFWLYLW\SODQQHGLQWKHQH[WWZR\HDUVZKLOHWKHUHPDLQLQJSURMHFWV
DUHWKRVHZLWKFRPSOHWHGH[SORUDWRU\DFWLYLW\SURJUHVVLQJWRZDUGGHYHORSPHQW


127(672&2162/,'$7('),1$1&,$/67$7(0(176

7KHWDEOHEHORZSURYLGHVDGGLWLRQDOGHWDLOIRUWKRVHSURMHFWVZKLFKWRWDOPLOOLRQ

   <HDUV:HOOV 
  'HF 'ULOOHG 
&RXQWU\3URMHFW  $FTXLUHG &RPPHQW
 PLOOLRQVRIGROODUV 
$QJROD    
$%&HQWUDO1(+XE   (YDOXDWLQJGHYHORSPHQWSODQIRUWLHEDFNWRH[LVWLQJSURGXFWLRQIDFLOLWLHV
.DRPER6SOLW+XE   (YDOXDWLQJGHYHORSPHQWSODQWRWLHLQWRSODQQHGSURGXFWLRQIDFLOLWLHV
3KDVH   
$UJHQWLQD   
/D,QYHUQDGD    (YDOXDWLQJGHYHORSPHQWSODQWRWLHLQWRSODQQHGLQIUDVWUXFWXUH
$XVWUDOLD   
(DVW3LOFKDUG    *DVILHOGQHDU.LSSHU7XQDGHYHORSPHQWDZDLWLQJFDSDFLW\LQH[LVWLQJ
   SODQQHGLQIUDVWUXFWXUH
*RUJRQ$UHD8OODJH   (YDOXDWLQJGHYHORSPHQWSODQVWRWLHLQWRH[LVWLQJ/1*IDFLOLWLHV
6(/RQJWRP    *DVILHOGQHDU7XQDGHYHORSPHQWDZDLWLQJFDSDFLW\LQH[LVWLQJSODQQHG
   LQIUDVWUXFWXUH
6(5HPRUD    *DVILHOGQHDU0DUOLQGHYHORSPHQWDZDLWLQJFDSDFLW\LQH[LVWLQJSODQQHG
   LQIUDVWUXFWXUH
*X\DQD   
/L]D3KDVH    &RQWLQXLQJGHYHORSPHQWSODQGLVFXVVLRQVZLWKWKHJRYHUQPHQW
,UDT   
.XUGLVWDQ3LUPDP    (YDOXDWLQJFRPPHUFLDOL]DWLRQDOWHUQDWLYHVZKLOHZDLWLQJIRUJRYHUQPHQW
   DSSURYDOWRHQWHU*DV+ROGLQJ3HULRG
.D]DNKVWDQ   
.DLUDQ   (YDOXDWLQJFRPPHUFLDOL]DWLRQDQGILHOGGHYHORSPHQWDOWHUQDWLYHVZKLOH
   FRQWLQXLQJGLVFXVVLRQVZLWKWKHJRYHUQPHQWUHJDUGLQJWKHGHYHORSPHQWSODQ
.DODPNDV   (YDOXDWLQJSURJUHVVLQJGHYHORSPHQWDOWHUQDWLYHVZKLOHFRQWLQXLQJ
   GLVFXVVLRQVZLWKWKHJRYHUQPHQWUHJDUGLQJGHYHORSPHQWSODQ
0R]DPELTXH   
5RYXPD/1*)XWXUH    (YDOXDWLQJSURJUHVVLQJGHYHORSPHQWSODQWRWLHLQWRSODQQHG/1*IDFLOLWLHV
1RQ6WUDGGOLQJ7UDLQ   
5RYXPD/1*3KDVH    3URJUHVVLQJGHYHORSPHQWSODQWRWLHLQWRSODQQHG/1*IDFLOLWLHV
5RYXPD/1*8QLWL]HG    (YDOXDWLQJSURJUHVVLQJGHYHORSPHQWSODQWRWLHLQWRSODQQHG/1*IDFLOLWLHV
7UDLQV   
1LJHULD   
%ROLD   (YDOXDWLQJGHYHORSPHQWSODQZKLOHFRQWLQXLQJGLVFXVVLRQVZLWKWKH
   JRYHUQPHQWUHJDUGLQJUHJLRQDOKXEVWUDWHJ\
%RQJD1RUWK   (YDOXDWLQJSURJUHVVLQJGHYHORSPHQWSODQIRUWLHEDFNWRH[LVWLQJSODQQHG
   LQIUDVWUXFWXUH
%RVL   'HYHORSPHQWDFWLYLW\XQGHUZD\ZKLOHFRQWLQXLQJGLVFXVVLRQVZLWKWKH
   JRYHUQPHQWUHJDUGLQJGHYHORSPHQWSODQ
%RVL&HQWUDO    'HYHORSPHQWDFWLYLW\XQGHUZD\ZKLOHFRQWLQXLQJGLVFXVVLRQVZLWKWKH
   JRYHUQPHQWUHJDUGLQJGHYHORSPHQWSODQ
(UKD1RUWKHDVW    (YDOXDWLQJGHYHORSPHQWSODQIRUWLHEDFNWRH[LVWLQJSURGXFWLRQIDFLOLWLHV
20/8NRW66    (YDOXDWLQJGHYHORSPHQWSODQIRUWLHEDFNWRH[LVWLQJSURGXFWLRQIDFLOLWLHV
20/8NRW6:    (YDOXDWLQJGHYHORSPHQWSODQIRUWLHEDFNWRH[LVWLQJSURGXFWLRQIDFLOLWLHV
3HJL    $ZDLWLQJFDSDFLW\LQH[LVWLQJSODQQHGLQIUDVWUXFWXUH
6DWHOOLWH)LHOG    (YDOXDWLQJGHYHORSPHQWSODQWRWLHLQWRSODQQHGSURGXFWLRQIDFLOLWLHV
'HYHORSPHQW3KDVH   
2WKHUSURMHFWV   (YDOXDWLQJDQGSXUVXLQJGHYHORSPHQWRIVHYHUDODGGLWLRQDOGLVFRYHULHV


127(672&2162/,'$7('),1$1&,$/67$7(0(176

   <HDUV:HOOV 
  'HF 'ULOOHG 
&RXQWU\3URMHFW  $FTXLUHG &RPPHQW
 PLOOLRQVRIGROODUV 
1RUZD\   
*DPPD   (YDOXDWLQJGHYHORSPHQWSODQIRUWLHEDFNWRH[LVWLQJSURGXFWLRQIDFLOLWLHV
/DYUDQV   (YDOXDWLQJGHYHORSPHQWSODQDZDLWLQJFDSDFLW\LQH[LVWLQJ.ULVWLQ
   SURGXFWLRQIDFLOLW\
2WKHUSURMHFWV   (YDOXDWLQJGHYHORSPHQWSODQVLQFOXGLQJSRWHQWLDOIRUWLHEDFNWRH[LVWLQJ
   SURGXFWLRQIDFLOLWLHV
3DSXD1HZ*XLQHD   
-XKD    3URJUHVVLQJGHYHORSPHQWSODQVWRWLHLQWRH[LVWLQJ/1*IDFLOLWLHV
3DSXD/1*    (YDOXDWLQJSURJUHVVLQJGHYHORSPHQWSODQV
5HSXEOLFRI&RQJR   
0HU7UHV3URIRQGH6XG   (YDOXDWLQJGHYHORSPHQWDOWHUQDWLYHVZKLOHFRQWLQXLQJGLVFXVVLRQVZLWKWKH
   JRYHUQPHQWUHJDUGLQJGHYHORSPHQWSODQ
5RPDQLD   
1HSWXQ'HHS   &RQWLQXLQJGLVFXVVLRQVZLWKWKHJRYHUQPHQWUHJDUGLQJGHYHORSPHQWSODQ
9LHWQDP   
%OXH:KDOH   (YDOXDWLQJSURJUHVVLQJGHYHORSPHQWSODQV
7RWDOSURMHFWV    


/HDVHG)DFLOLWLHV
$W'HFHPEHUWKH&RUSRUDWLRQDQGLWVFRQVROLGDWHGVXEVLGLDULHVKHOGQRQFDQFHODEOHRSHUDWLQJOHDVHVDQGFKDUWHUVFRYHULQJ
GULOOLQJHTXLSPHQWWDQNHUVDQGRWKHUDVVHWVZLWKPLQLPXPXQGLVFRXQWHGOHDVHFRPPLWPHQWVWRWDOLQJPLOOLRQDVLQGLFDWHG
LQWKHWDEOH(VWLPDWHGUHODWHGVXEOHDVHUHQWDOLQFRPHIURPQRQFDQFHODEOHVXEOHDVHVWRWDOVPLOOLRQ

  /HDVH3D\PHQWV
  8QGHU0LQLPXP&RPPLWPHQWV
   'ULOOLQJ5LJV  
   DQG5HODWHG  
   (TXLSPHQW 2WKHU 7RWDO
   PLOOLRQVRIGROODUV
      
     
     
     
     
     
DQGEH\RQG     
7RWDO     

1HWUHQWDOFRVWXQGHUERWKFDQFHODEOHDQGQRQFDQFHODEOHRSHUDWLQJOHDVHVLQFXUUHGGXULQJDQGZHUHDVIROORZV

       
    PLOOLRQVRIGROODUV
        
5HQWDOFRVW      
 'ULOOLQJULJVDQGUHODWHGHTXLSPHQW     
 2WKHUQHWRIVXEOHDVHUHQWDOLQFRPH     
  7RWDO     


127(672&2162/,'$7('),1$1&,$/67$7(0(176

(DUQLQJV3HU6KDUH

(DUQLQJVSHUFRPPRQVKDUH     
      
1HWLQFRPHDWWULEXWDEOHWR([[RQ0RELOPLOOLRQVRIGROODUV     
  
:HLJKWHGDYHUDJHQXPEHURIFRPPRQVKDUHVRXWVWDQGLQJPLOOLRQVRIVKDUHV     
  
(DUQLQJVSHUFRPPRQVKDUHGROODUV     
  
'LYLGHQGVSDLGSHUFRPPRQVKDUHGROODUV     

 7KHHDUQLQJVSHUFRPPRQVKDUHDQGHDUQLQJVSHUFRPPRQVKDUHDVVXPLQJGLOXWLRQDUHWKHVDPHLQHDFKSHULRGVKRZQ

)LQDQFLDO,QVWUXPHQWVDQG'HULYDWLYHV

)LQDQFLDO,QVWUXPHQWV7KHHVWLPDWHGIDLUYDOXHRIILQDQFLDOLQVWUXPHQWVDW'HFHPEHUDQGWKHUHODWHGKLHUDUFK\OHYHOIRU
WKHIDLUYDOXHPHDVXUHPHQWLVDVIROORZV
     $W'HFHPEHU
     PLOOLRQVRIGROODUV

     )DLU9DOXH        

1HW
&DUU\LQJ
9DOXH
     
7RWDO*URVV 'LIIHUHQFH 3UHVHQWHG
$VVHWV (IIHFWRI (IIHFWRI LQ&DUU\LQJ RQWKH
 &RXQWHUSDUW\ &ROODWHUDO 9DOXHDQG %DODQFH
/HYHO  /HYHO  /HYHO  /LDELOLWLHV 1HWWLQJ  1HWWLQJ  )DLU9DOXH  6KHHW
$VVHWV                
 'HULYDWLYHDVVHWV         
 $GYDQFHVWRUHFHLYDEOHV 
  IURPHTXLW\FRPSDQLHV         
 2WKHUORQJWHUP     
  ILQDQFLDODVVHWV         
   
/LDELOLWLHV 
 'HULYDWLYHOLDELOLWLHV         
 /RQJWHUPGHEW         
 /RQJWHUPREOLJDWLRQV  
  WRHTXLW\FRPSDQLHV         
 2WKHUORQJWHUP 
  ILQDQFLDOOLDELOLWLHV         
    
,QFOXGHGLQWKH%DODQFH6KHHWOLQH1RWHVDQGDFFRXQWVUHFHLYDEOHOHVVHVWLPDWHGGRXEWIXODPRXQWV
,QFOXGHGLQWKH%DODQFH6KHHWOLQH,QYHVWPHQWVDGYDQFHVDQGORQJWHUPUHFHLYDEOHV
,QFOXGHGLQWKH%DODQFH6KHHWOLQHV,QYHVWPHQWVDGYDQFHVDQGORQJWHUPUHFHLYDEOHVDQG2WKHUDVVHWVLQFOXGLQJLQWDQJLEOHVQHW
,QFOXGHGLQWKH%DODQFH6KHHWOLQH$FFRXQWVSD\DEOHDQGDFFUXHGOLDELOLWLHV
([FOXGLQJFDSLWDOL]HGOHDVHREOLJDWLRQV
,QFOXGHGLQWKH%DODQFH6KHHWOLQH2WKHUORQJWHUPREOLJDWLRQV
$GYDQFHVWRUHFHLYDEOHVIURPHTXLW\FRPSDQLHVDQGORQJWHUPREOLJDWLRQVWRHTXLW\FRPSDQLHVDUHPDLQO\GHVLJQDWHGDVKLHUDUFK\OHYHOLQSXWV7KHIDLU
YDOXHLVFDOFXODWHGE\GLVFRXQWLQJWKHUHPDLQLQJREOLJDWLRQVE\DUDWHFRQVLVWHQWZLWKWKHFUHGLWTXDOLW\DQGLQGXVWU\RIWKHHTXLW\FRPSDQ\

7KHHVWLPDWHGIDLUYDOXHRIWRWDOORQJWHUPGHEWH[FOXGLQJFDSLWDOL]HGOHDVHREOLJDWLRQVZDVELOOLRQDW'HFHPEHU
DVFRPSDUHGWRUHFRUGHGERRNYDOXHVRIELOOLRQDW'HFHPEHU


127(672&2162/,'$7('),1$1&,$/67$7(0(176

'HULYDWLYH,QVWUXPHQWV7KH&RUSRUDWLRQ¶VVL]HVWURQJFDSLWDOVWUXFWXUHJHRJUDSKLFGLYHUVLW\DQGWKHFRPSOHPHQWDU\QDWXUHRI
WKH8SVWUHDP'RZQVWUHDPDQG&KHPLFDOEXVLQHVVHVUHGXFHWKH&RUSRUDWLRQ¶VHQWHUSULVHZLGHULVNIURPFKDQJHVLQFRPPRGLW\
SULFHVFXUUHQF\UDWHVDQGLQWHUHVWUDWHV,QDGGLWLRQWKH &RUSRUDWLRQXVHVFRPPRGLW\EDVHGFRQWUDFWVLQFOXGLQJGHULYDWLYHVWR
PDQDJH FRPPRGLW\ SULFH ULVN DQG IRU WUDGLQJ SXUSRVHV7KH &RUSRUDWLRQ¶V FRPPRGLW\ GHULYDWLYHV DUH QRW DFFRXQWHG IRU XQGHU
KHGJH DFFRXQWLQJ $W WLPHV WKH &RUSRUDWLRQ DOVR HQWHUV LQWR IRUZDUG FXUUHQF\ DQG LQWHUHVW UDWH GHULYDWLYHV QRQH RI ZKLFK DUH
PDWHULDOWRWKH&RUSRUDWLRQ¶VILQDQFLDOSRVLWLRQDVRI'HFHPEHUDQGRUUHVXOWVRIRSHUDWLRQVIRUWKH\HDUVHQGHG
DQG

&UHGLWULVNDVVRFLDWHG ZLWKWKH&RUSRUDWLRQ¶VGHULYDWLYHSRVLWLRQLV PLWLJDWHGE\VHYHUDO IDFWRUVLQFOXGLQJWKH XVHRI GHULYDWLYH

FOHDULQJH[FKDQJHVDQGWKHTXDOLW\RIDQGILQDQFLDOOLPLWVSODFHGRQGHULYDWLYHFRXQWHUSDUWLHV7KH&RUSRUDWLRQPDLQWDLQVDV\VWHP
RIFRQWUROVWKDWLQFOXGHVWKHDXWKRUL]DWLRQUHSRUWLQJDQGPRQLWRULQJRIGHULYDWLYHDFWLYLW\

7KHFDUU\LQJYDOXHVRIGHULYDWLYHLQVWUXPHQWVRQWKHFRQVROLGDWHGEDODQFHVKHHWDW'HFHPEHUZHUHJURVVDVVHWVRI
PLOOLRQJURVVOLDELOLWLHVRIPLOOLRQDQGFROODWHUDOUHFHLYDEOHRIPLOOLRQ

$W'HFHPEHUWKHQHWQRWLRQDOORQJVKRUWSRVLWLRQRIGHULYDWLYHLQVWUXPHQWVZDVPLOOLRQEDUUHOVIRUFUXGHRLODQG
ZDVPLOOLRQEDUUHOVIRUSURGXFWV

5HDOL]HGDQGXQUHDOL]HGJDLQVORVVHVRQGHULYDWLYHLQVWUXPHQWVWKDWZHUHUHFRJQL]HGLQWKH&RQVROLGDWHG6WDWHPHQWRI,QFRPHDUH
LQFOXGHGLQWKHIROORZLQJOLQHVRQDEHIRUHWD[EDVLV

          
      PLOOLRQVRIGROODUV
          
6DOHVDQGRWKHURSHUDWLQJUHYHQXH       
&UXGHRLODQGSURGXFWSXUFKDVHV     
  7RWDO      
          
          
          


127(672&2162/,'$7('),1$1&,$/67$7(0(176

/RQJ7HUP'HEW
$W'HFHPEHUORQJWHUPGHEWFRQVLVWHGRIPLOOLRQGXHLQ86GROODUVDQGPLOOLRQUHSUHVHQWLQJWKH86
GROODUHTXLYDOHQWDW\HDUHQGH[FKDQJHUDWHVRIDPRXQWVSD\DEOHLQIRUHLJQFXUUHQFLHV7KHVHDPRXQWVH[FOXGHWKDWSRUWLRQRIORQJ
WHUPGHEWWRWDOLQJPLOOLRQZKLFKPDWXUHVZLWKLQRQH\HDUDQGLVLQFOXGHGLQFXUUHQWOLDELOLWLHV7KHDPRXQWVRIORQJWHUP
GHEWLQFOXGLQJFDSLWDOL]HGOHDVHREOLJDWLRQVPDWXULQJLQHDFKRIWKHIRXU\HDUVDIWHU'HFHPEHULQPLOOLRQVRIGROODUVDUH
 ±  ± ± DQG± $W 'HFHPEHU   WKH &RUSRUDWLRQ¶V XQXVHG ORQJWHUP
FUHGLWOLQHVZHUHELOOLRQ
6XPPDUL]HGORQJWHUPGHEWDW\HDUHQGDQGDUHVKRZQLQWKHWDEOHEHORZ
    $YHUDJH    
    5DWH   
  PLOOLRQVRIGROODUV 
 ([[RQ0RELO&RUSRUDWLRQ      
  QRWHVGXH     
  QRWHVGXH     
  )ORDWLQJUDWHQRWHVGXH,VVXHG     
  )ORDWLQJUDWHQRWHVGXH,VVXHG     
  QRWHVGXH     
  QRWHVGXH     
  QRWHVGXH     
  )ORDWLQJUDWHQRWHVGXH     
  QRWHVGXH     
  QRWHVGXH     
  QRWHVGXH     
  QRWHVGXH     
  QRWHVGXH     
  QRWHVGXH     
 ;72(QHUJ\,QF
  VHQLRUQRWHVGXH  
  VHQLRUQRWHVGXH  
  VHQLRUQRWHVGXH  
 0RELO&RUSRUDWLRQ
  GHEHQWXUHVGXH  
 ,QGXVWULDOUHYHQXHERQGVGXH   
 2WKHU86GROODUREOLJDWLRQV  
 2WKHUIRUHLJQFXUUHQF\REOLJDWLRQV  
 &DSLWDOL]HGOHDVHREOLJDWLRQV   
 'HEWLVVXDQFHFRVWV  
   7RWDOORQJWHUPGHEW   

 $YHUDJHHIIHFWLYHLQWHUHVWUDWHIRUGHEWDQGDYHUDJHLPSXWHGLQWHUHVWUDWHIRUFDSLWDOL]HGOHDVHVDW'HFHPEHU
 ,QFOXGHVSUHPLXPVRIPLOOLRQLQDQGPLOOLRQLQ


127(672&2162/,'$7('),1$1&,$/67$7(0(176

,QFHQWLYH3URJUDP
7KH,QFHQWLYH3URJUDPSURYLGHVIRUJUDQWVRIVWRFNRSWLRQVVWRFNDSSUHFLDWLRQULJKWV6$5VUHVWULFWHGVWRFNDQGRWKHUIRUPV
RI DZDUGV $ZDUGV PD\ EH JUDQWHG WR HOLJLEOH HPSOR\HHV RI WKH &RUSRUDWLRQ DQG WKRVH DIILOLDWHV DW OHDVW  SHUFHQW RZQHG
2XWVWDQGLQJDZDUGVDUHVXEMHFWWRFHUWDLQIRUIHLWXUHSURYLVLRQVFRQWDLQHGLQWKHSURJUDPRUDZDUGLQVWUXPHQW2SWLRQVDQG6$5V
PD\EHJUDQWHGDWSULFHVQRWOHVVWKDQSHUFHQWRIPDUNHWYDOXHRQWKHGDWHRIJUDQWDQGKDYHDPD[LPXPOLIHRI\HDUV7KH
PD[LPXPQXPEHURIVKDUHVRIVWRFNWKDWPD\EHLVVXHGXQGHUWKH,QFHQWLYH3URJUDPLVPLOOLRQ$ZDUGVWKDWDUHIRUIHLWHG
H[SLUHRUDUHVHWWOHGLQFDVKGRQRWFRXQWDJDLQVWWKLVPD[LPXPOLPLW7KH,QFHQWLYH3URJUDPGRHVQRWKDYHDVSHFLILHGWHUP
1HZDZDUGVPD\EHPDGHXQWLOWKHDYDLODEOHVKDUHVDUHGHSOHWHGXQOHVVWKH%RDUGWHUPLQDWHVWKHSODQHDUO\$WWKHHQGRI
UHPDLQLQJVKDUHVDYDLODEOHIRUDZDUGXQGHUWKH,QFHQWLYH3URJUDPZHUH PLOOLRQ
5HVWULFWHG6WRFNDQG5HVWULFWHG6WRFN8QLWV$ZDUGVWRWDOLQJWKRXVDQGWKRXVDQGDQGWKRXVDQGRIUHVWULFWHG
QRQYHVWHGFRPPRQVWRFNXQLWVZHUHJUDQWHGLQDQGUHVSHFWLYHO\&RPSHQVDWLRQH[SHQVHIRUWKHVHDZDUGVLV
EDVHGRQWKHSULFHRIWKHVWRFNDWWKHGDWHRIJUDQWDQGLVUHFRJQL]HGLQLQFRPHRYHUWKHUHTXLVLWHVHUYLFHSHULRG6KDUHVIRUWKHVH
DZDUGVDUHLVVXHGWRHPSOR\HHVIURPWUHDVXU\VWRFN7KHXQLWVWKDWDUHVHWWOHGLQFDVKDUHUHFRUGHGDVOLDELOLWLHVDQGWKHLUFKDQJHV
LQIDLUYDOXHDUHUHFRJQL]HGRYHUWKHYHVWLQJSHULRG'XULQJWKHDSSOLFDEOHUHVWULFWHGSHULRGVWKHVKDUHVDQGXQLWVPD\QRWEHVROG
RUWUDQVIHUUHGDQGDUHVXEMHFWWRIRUIHLWXUH7KHPDMRULW\RIWKHDZDUGVKDYHJUDGHGYHVWLQJSHULRGVZLWKSHUFHQWRIWKHVKDUHV
DQGXQLWVLQHDFKDZDUGYHVWLQJDIWHUWKUHH\HDUVDQGWKHUHPDLQLQJSHUFHQWYHVWLQJDIWHUVHYHQ\HDUV$ZDUGVJUDQWHGWRDVPDOO
QXPEHURIVHQLRUH[HFXWLYHVKDYHYHVWLQJSHULRGVRIILYH\HDUVIRUSHUFHQWRIWKHDZDUGDQGRI\HDUVRUUHWLUHPHQWZKLFKHYHU
RFFXUVODWHUIRUWKHUHPDLQLQJSHUFHQWRIWKHDZDUG
7KH&RUSRUDWLRQKDVSXUFKDVHGVKDUHVLQWKHRSHQPDUNHWDQGWKURXJKQHJRWLDWHGWUDQVDFWLRQVWRRIIVHWVKDUHVRUXQLWVVHWWOHGLQ
VKDUHVLVVXHGLQFRQMXQFWLRQZLWKEHQHILWSODQVDQGSURJUDPV3XUFKDVHVPD\EHGLVFRQWLQXHGDWDQ\WLPHZLWKRXWSULRUQRWLFH
7KHIROORZLQJWDEOHVVXPPDUL]HLQIRUPDWLRQDERXWUHVWULFWHGVWRFNDQGUHVWULFWHGVWRFNXQLWVIRUWKH\HDUHQGHG'HFHPEHU

 
    :HLJKWHG$YHUDJH
    *UDQW'DWH
5HVWULFWHGVWRFNDQGXQLWVRXWVWDQGLQJ 6KDUHV   )DLU9DOXHSHU6KDUH
 WKRXVDQGV   GROODUV
     
,VVXHGDQGRXWVWDQGLQJDW-DQXDU\  
DZDUGLVVXHGLQ  
9HVWHG  
)RUIHLWHG  
,VVXHGDQGRXWVWDQGLQJDW'HFHPEHU  
      
9DOXHRIUHVWULFWHGVWRFNXQLWV     
*UDQWSULFHGROODUV     
      
9DOXHDWGDWHRIJUDQW  PLOOLRQVRIGROODUV
8QLWVVHWWOHGLQVWRFN     
8QLWVVHWWOHGLQFDVK     
7RWDOYDOXH     

$VRI'HFHPEHUWKHUHZDVPLOOLRQRIXQUHFRJQL]HGFRPSHQVDWLRQFRVWUHODWHGWRWKHQRQYHVWHGUHVWULFWHGDZDUGV
7KLVFRVWLVH[SHFWHGWREHUHFRJQL]HGRYHUDZHLJKWHGDYHUDJHSHULRGRI\HDUV7KHFRPSHQVDWLRQFRVWFKDUJHGDJDLQVWLQFRPH
IRU WKH UHVWULFWHG VWRFN DQG UHVWULFWHG VWRFN XQLWV ZDV PLOOLRQ PLOOLRQ DQG PLOOLRQ IRU   DQG 
UHVSHFWLYHO\7KHLQFRPHWD[EHQHILWUHFRJQL]HGLQLQFRPHUHODWHGWRWKLVFRPSHQVDWLRQH[SHQVHZDVPLOOLRQPLOOLRQDQG
PLOOLRQIRUWKHVDPHSHULRGVUHVSHFWLYHO\7KHIDLUYDOXHRIVKDUHVDQGXQLWVYHVWHGLQDQGZDVPLOOLRQ
PLOOLRQDQGPLOOLRQUHVSHFWLYHO\&DVKSD\PHQWVRIPLOOLRQPLOOLRQDQGPLOOLRQIRUYHVWHGUHVWULFWHGVWRFN
XQLWVVHWWOHGLQFDVKZHUHPDGHLQDQGUHVSHFWLYHO\


127(672&2162/,'$7('),1$1&,$/67$7(0(176

/LWLJDWLRQDQG2WKHU&RQWLQJHQFLHV
/LWLJDWLRQ$YDULHW\RIFODLPVKDYHEHHQPDGHDJDLQVW([[RQ0RELODQGFHUWDLQRILWVFRQVROLGDWHGVXEVLGLDULHVLQDQXPEHURI
SHQGLQJODZVXLWV0DQDJHPHQWKDVUHJXODUOLWLJDWLRQUHYLHZVLQFOXGLQJXSGDWHVIURPFRUSRUDWHDQGRXWVLGHFRXQVHOWRDVVHVVWKH
QHHGIRUDFFRXQWLQJUHFRJQLWLRQRUGLVFORVXUHRIWKHVHFRQWLQJHQFLHV7KH&RUSRUDWLRQDFFUXHVDQXQGLVFRXQWHGOLDELOLW\IRUWKRVH
FRQWLQJHQFLHVZKHUHWKHLQFXUUHQFHRIDORVVLVSUREDEOHDQGWKHDPRXQWFDQEHUHDVRQDEO\HVWLPDWHG,IDUDQJHRIDPRXQWVFDQEH
UHDVRQDEO\HVWLPDWHGDQGQRDPRXQWZLWKLQWKHUDQJHLVDEHWWHUHVWLPDWHWKDQDQ\RWKHUDPRXQWWKHQWKHPLQLPXPRIWKHUDQJHLV
DFFUXHG7KH&RUSRUDWLRQGRHVQRWUHFRUGOLDELOLWLHV ZKHQWKHOLNHOLKRRGWKDWWKHOLDELOLW\KDVEHHQLQFXUUHGLVSUREDEOHEXWWKH
DPRXQWFDQQRWEHUHDVRQDEO\HVWLPDWHGRUZKHQWKHOLDELOLW\LVEHOLHYHGWREHRQO\UHDVRQDEO\SRVVLEOHRUUHPRWH)RUFRQWLQJHQFLHV
ZKHUH DQ XQIDYRUDEOH RXWFRPH LV UHDVRQDEO\ SRVVLEOH DQG ZKLFK DUH VLJQLILFDQW WKH &RUSRUDWLRQ GLVFORVHV WKH QDWXUH RI WKH
FRQWLQJHQF\DQGZKHUHIHDVLEOHDQHVWLPDWHRIWKHSRVVLEOHORVV)RUSXUSRVHVRIRXUFRQWLQJHQF\GLVFORVXUHV³VLJQLILFDQW´LQFOXGHV
PDWHULDOPDWWHUVDVZHOODVRWKHUPDWWHUVZKLFKPDQDJHPHQWEHOLHYHVVKRXOGEHGLVFORVHG([[RQ0RELOZLOOFRQWLQXHWRGHIHQG
LWVHOIYLJRURXVO\LQWKHVHPDWWHUV%DVHGRQDFRQVLGHUDWLRQRIDOOUHOHYDQWIDFWVDQGFLUFXPVWDQFHVWKH&RUSRUDWLRQGRHVQRWEHOLHYH
WKH XOWLPDWH RXWFRPH RI DQ\ FXUUHQWO\ SHQGLQJ ODZVXLW DJDLQVW ([[RQ0RELO ZLOO KDYH D PDWHULDO DGYHUVH HIIHFW XSRQ WKH
&RUSRUDWLRQ¶VRSHUDWLRQVILQDQFLDOFRQGLWLRQRUILQDQFLDOVWDWHPHQWVWDNHQDVDZKROH
2WKHU&RQWLQJHQFLHV7KH&RUSRUDWLRQDQGFHUWDLQRILWVFRQVROLGDWHGVXEVLGLDULHVZHUHFRQWLQJHQWO\OLDEOHDW'HFHPEHU
IRUJXDUDQWHHVUHODWLQJWRQRWHVORDQVDQGSHUIRUPDQFHXQGHUFRQWUDFWV:KHUHJXDUDQWHHVIRUHQYLURQPHQWDOUHPHGLDWLRQDQGRWKHU
VLPLODUPDWWHUVGRQRWLQFOXGHDVWDWHGFDSWKHDPRXQWVUHIOHFWPDQDJHPHQW¶VHVWLPDWHRIWKHPD[LPXPSRWHQWLDOH[SRVXUH

      'HFHPEHU  
   (TXLW\&RPSDQ\ 2WKHU7KLUG3DUW\  
   2EOLJDWLRQV 2EOLJDWLRQV  7RWDO
      PLOOLRQVRIGROODUV  
*XDUDQWHHV 
 'HEWUHODWHG   
 2WKHU   
  7RWDO   
([[RQ0RELOVKDUH        

$GGLWLRQDOO\WKH&RUSRUDWLRQDQGLWVDIILOLDWHVKDYHQXPHURXVORQJWHUPVDOHVDQGSXUFKDVHFRPPLWPHQWVLQWKHLUYDULRXVEXVLQHVV
DFWLYLWLHVDOORIZKLFKDUHH[SHFWHGWREHIXOILOOHGZLWKQRDGYHUVHFRQVHTXHQFHVPDWHULDOWRWKH&RUSRUDWLRQ¶VRSHUDWLRQVRUILQDQFLDO
FRQGLWLRQ
,Q DFFRUGDQFH ZLWK D 9HQH]XHODQ QDWLRQDOL]DWLRQ GHFUHH LVVXHG LQ )HEUXDU\  D VXEVLGLDU\ RI WKH 9HQH]XHODQ 1DWLRQDO 2LO
&RPSDQ\3G96$DVVXPHGWKHRSHUDWRUVKLSRIWKH&HUUR1HJUR+HDY\2LO3URMHFW7KHGHFUHHDOVRUHTXLUHGFRQYHUVLRQRIWKH
&HUUR1HJUR3URMHFWLQWRD³PL[HGHQWHUSULVH´DQGDQLQFUHDVHLQ3G96$¶VRURQHRILWVDIILOLDWH¶VRZQHUVKLSLQWHUHVWLQWKH3URMHFW
([[RQ0RELO UHIXVHG WR DFFHGH WR WKH WHUPV SURIIHUHG E\ WKH JRYHUQPHQW DQG RQ -XQH   WKH JRYHUQPHQW H[SURSULDWHG
([[RQ0RELO¶VSHUFHQWLQWHUHVWLQWKH&HUUR1HJUR3URMHFW
([[RQ0RELOFROOHFWHGDZDUGVRIPLOOLRQLQDQDUELWUDWLRQDJDLQVW3G96$XQGHUWKHUXOHVRIWKH,QWHUQDWLRQDO&KDPEHURI
&RPPHUFHLQUHVSHFWRIDQLQGHPQLW\UHODWHGWRWKH&HUUR1HJUR3URMHFWDQGPLOOLRQLQDQDUELWUDWLRQIRUFRPSHQVDWLRQGXH
IRUWKH/D&HLED3URMHFWDQGIRUH[SRUWFXUWDLOPHQWVDWWKH&HUUR1HJUR3URMHFWXQGHUUXOHVRI,QWHUQDWLRQDO&HQWUHIRU6HWWOHPHQW
RI,QYHVWPHQW'LVSXWHV,&6,'$Q,&6,'DUELWUDWLRQDZDUGUHODWLQJWRWKH&HUUR1HJUR3URMHFW¶VH[SURSULDWLRQELOOLRQZDV
DQQXOOHGEDVHGRQDGHWHUPLQDWLRQWKDWDSULRU7ULEXQDOIDLOHGWRDGHTXDWHO\H[SODLQZK\WKHFDSRQGDPDJHVLQWKHLQGHPQLW\RZHG
E\3G96$GLGQRWDIIHFWRUOLPLWWKHDPRXQWRZHGIRUWKHH[SURSULDWLRQRIWKH&HUUR1HJUR3URMHFW([[RQ0RELOILOHGDQHZFODLP
VHHNLQJWRUHVWRUHWKHRULJLQDODZDUGRIGDPDJHVIRUWKH&HUUR1HJUR3URMHFWZLWK,&6,'RQ6HSWHPEHU
7KHQHWLPSDFWRIWKLVPDWWHURQWKH&RUSRUDWLRQ¶VFRQVROLGDWHGILQDQFLDOUHVXOWVFDQQRWEHUHDVRQDEO\HVWLPDWHG5HJDUGOHVVWKH
&RUSRUDWLRQGRHVQRWH[SHFWWKHUHVROXWLRQWRKDYHDPDWHULDOHIIHFWXSRQWKH&RUSRUDWLRQ¶VRSHUDWLRQVRUILQDQFLDOFRQGLWLRQ
 


127(672&2162/,'$7('),1$1&,$/67$7(0(176

$Q DIILOLDWH RI ([[RQ0RELO LV RQH RI WKH &RQWUDFWRUV XQGHU D 3URGXFWLRQ 6KDULQJ &RQWUDFW 36& ZLWK WKH 1LJHULDQ 1DWLRQDO
3HWUROHXP&RUSRUDWLRQ113&FRYHULQJWKH(UKDEORFNORFDWHGLQWKHRIIVKRUHZDWHUVRI1LJHULD([[RQ0RELO
VDIILOLDWHLVWKH
RSHUDWRURIWKHEORFNDQGRZQVDSHUFHQWLQWHUHVWXQGHUWKH36&7KH&RQWUDFWRUVDUHLQGLVSXWHZLWK113&UHJDUGLQJ113&
V
OLIWLQJRIFUXGHRLOLQH[FHVVRILWVHQWLWOHPHQWXQGHUWKHWHUPVRIWKH36&,QDFFRUGDQFHZLWKWKHWHUPVRIWKH36&WKH&RQWUDFWRUV
LQLWLDWHGDUELWUDWLRQLQ$EXMD1LJHULDXQGHUWKH1LJHULDQ$UELWUDWLRQDQG&RQFLOLDWLRQ$FW2Q2FWREHUDWKUHHPHPEHU
DUELWUDO 7ULEXQDO LVVXHG DQ DZDUG XSKROGLQJ WKH &RQWUDFWRUV
 SRVLWLRQ LQ DOO PDWHULDO UHVSHFWV DQG DZDUGLQJ GDPDJHV WR WKH
&RQWUDFWRUVMRLQWO\LQDQDPRXQWRIDSSUR[LPDWHO\ELOOLRQSOXVPLOOLRQLQDFFUXHGLQWHUHVW7KH&RQWUDFWRUVSHWLWLRQHGD
1LJHULDQIHGHUDOFRXUWIRUHQIRUFHPHQWRIWKHDZDUGDQG113&SHWLWLRQHGWKHVDPHFRXUWWRKDYHWKHDZDUGVHWDVLGH2Q0D\
WKHFRXUWVHWDVLGHWKHDZDUG7KH&RQWUDFWRUVDSSHDOHGWKDWMXGJPHQWWRWKH&RXUWRI$SSHDO$EXMD-XGLFLDO'LYLVLRQ2Q
-XO\   WKH &RXUW RI $SSHDO XSKHOG WKH GHFLVLRQ RI WKH ORZHU FRXUW VHWWLQJ DVLGH WKH DZDUG 2Q 2FWREHU   WKH
&RQWUDFWRUVDSSHDOHGWKHGHFLVLRQWRWKH6XSUHPH&RXUWRI1LJHULD,Q-XQHWKH&RQWUDFWRUVILOHGDODZVXLWDJDLQVW113&LQ
WKH1LJHULDQIHGHUDOKLJKFRXUWLQRUGHUWRSUHVHUYHWKHLUDELOLW\WRVHHNHQIRUFHPHQWRIWKH36&LQWKHFRXUWVLIQHFHVVDU\)ROORZLQJ
GLVPLVVDOE\WKLVFRXUWWKH&RQWUDFWRUVDSSHDOHGWRWKH1LJHULDQ&RXUWRI$SSHDOLQ-XQH,Q2FWREHUWKH&RQWUDFWRUV
ILOHGVXLWLQWKH8QLWHG6WDWHV'LVWULFW&RXUWIRUWKH6RXWKHUQ'LVWULFWRI1HZ<RUNWRHQIRUFHLIQHFHVVDU\WKHDUELWUDWLRQDZDUG
DJDLQVW113&DVVHWVUHVLGLQJZLWKLQWKDWMXULVGLFWLRQ113&KDVPRYHGWRGLVPLVVWKHODZVXLW$WWKLVWLPHWKHQHWLPSDFWRIWKLV
PDWWHURQWKH&RUSRUDWLRQ
VFRQVROLGDWHGILQDQFLDOUHVXOWVFDQQRWEHUHDVRQDEO\HVWLPDWHG+RZHYHUUHJDUGOHVVRIWKHRXWFRPHRI
HQIRUFHPHQW SURFHHGLQJV WKH &RUSRUDWLRQ GRHV QRW H[SHFW WKH SURFHHGLQJV WR KDYH D PDWHULDO HIIHFW XSRQ WKH &RUSRUDWLRQ
V
RSHUDWLRQVRUILQDQFLDOFRQGLWLRQ


127(672&2162/,'$7('),1$1&,$/67$7(0(176

3HQVLRQDQG2WKHU3RVWUHWLUHPHQW%HQHILWV
7KHEHQHILWREOLJDWLRQVDQGSODQDVVHWVDVVRFLDWHGZLWKWKH&RUSRUDWLRQ¶VSULQFLSDOEHQHILWSODQVDUHPHDVXUHGRQ'HFHPEHU

   3HQVLRQ%HQHILWV 2WKHU3RVWUHWLUHPHQW
   86  1RQ86  %HQHILWV
             
   SHUFHQW
:HLJKWHGDYHUDJHDVVXPSWLRQVXVHGWRGHWHUPLQH
 EHQHILWREOLJDWLRQVDW'HFHPEHU 
 'LVFRXQWUDWH       
 /RQJWHUPUDWHRIFRPSHQVDWLRQLQFUHDVH       
  
   PLOOLRQVRIGROODUV
&KDQJHLQEHQHILWREOLJDWLRQ 
 %HQHILWREOLJDWLRQDW-DQXDU\      
 6HUYLFHFRVW       
 ,QWHUHVWFRVW       
 $FWXDULDOORVVJDLQ       
 %HQHILWVSDLG       
 )RUHLJQH[FKDQJHUDWHFKDQJHV       
 $PHQGPHQWVGLYHVWPHQWVDQGRWKHU       
%HQHILWREOLJDWLRQDW'HFHPEHU      
$FFXPXODWHGEHQHILWREOLJDWLRQDW'HFHPEHU      

 %HQHILWSD\PHQWVIRUIXQGHGDQGXQIXQGHGSODQV
 )RUDQGRWKHUSRVWUHWLUHPHQWEHQHILWVSDLGDUHQHWRIPLOOLRQDQGPLOOLRQRI0HGLFDUHVXEVLG\UHFHLSWV
UHVSHFWLYHO\

)RU VHOHFWLRQ RI WKH GLVFRXQW UDWH IRU 86 SODQV VHYHUDO VRXUFHV RI LQIRUPDWLRQ DUH FRQVLGHUHG LQFOXGLQJ LQWHUHVW UDWH PDUNHW
LQGLFDWRUVDQGWKHHIIHFWLYHGLVFRXQWUDWHGHWHUPLQHGE\XVHRID\LHOGFXUYHEDVHGRQKLJKTXDOLW\QRQFDOODEOHERQGVDSSOLHGWR
WKHHVWLPDWHGFDVKRXWIORZVIRUEHQHILWSD\PHQWV)RUPDMRUQRQ86SODQVWKHGLVFRXQWUDWHLVGHWHUPLQHGE\XVLQJDVSRW\LHOG
FXUYHRIKLJKTXDOLW\ORFDOFXUUHQF\GHQRPLQDWHGERQGVDWDQDYHUDJHPDWXULW\DSSUR[LPDWLQJWKDWRIWKHOLDELOLWLHV
7KHPHDVXUHPHQWRIWKHDFFXPXODWHGSRVWUHWLUHPHQWEHQHILWREOLJDWLRQDVVXPHVDKHDOWKFDUHFRVWWUHQGUDWHRISHUFHQWLQ
DQGVXEVHTXHQW\HDUV$RQHSHUFHQWDJHSRLQWLQFUHDVHLQWKHKHDOWKFDUHFRVWWUHQGUDWHZRXOGLQFUHDVHVHUYLFHDQGLQWHUHVWFRVWE\
PLOOLRQDQGWKHSRVWUHWLUHPHQWEHQHILWREOLJDWLRQE\PLOOLRQ$RQHSHUFHQWDJHSRLQWGHFUHDVHLQWKHKHDOWKFDUHFRVWWUHQG
UDWHZRXOGGHFUHDVHVHUYLFHDQGLQWHUHVWFRVWE\PLOOLRQDQGWKHSRVWUHWLUHPHQWEHQHILWREOLJDWLRQE\PLOOLRQ

   3HQVLRQ%HQHILWV  2WKHU3RVWUHWLUHPHQW
   86  1RQ86  %HQHILWV
             
   PLOOLRQVRIGROODUV
&KDQJHLQSODQDVVHWV 
 )DLUYDOXHDW-DQXDU\      
 $FWXDOUHWXUQRQSODQDVVHWV       
 )RUHLJQH[FKDQJHUDWHFKDQJHV       
 &RPSDQ\FRQWULEXWLRQ       
 %HQHILWVSDLG       
 2WKHU       
)DLUYDOXHDW'HFHPEHU      

 %HQHILWSD\PHQWVIRUIXQGHGSODQV


127(672&2162/,'$7('),1$1&,$/67$7(0(176

7KHIXQGLQJOHYHOVRIDOOTXDOLILHGSHQVLRQSODQVDUHLQFRPSOLDQFHZLWKVWDQGDUGVVHWE\DSSOLFDEOHODZRUUHJXODWLRQ$VVKRZQLQ
WKHWDEOHEHORZFHUWDLQVPDOOHU86SHQVLRQSODQVDQGDQXPEHURIQRQ86SHQVLRQSODQVDUHQRWIXQGHGEHFDXVHORFDODSSOLFDEOH
WD[UXOHVDQGUHJXODWRU\SUDFWLFHVGRQRWHQFRXUDJHIXQGLQJRIWKHVHSODQV$OOGHILQHGEHQHILWSHQVLRQREOLJDWLRQVUHJDUGOHVVRI
WKH IXQGLQJ VWDWXV RIWKH XQGHUO\LQJ SODQV DUH IXOO\ VXSSRUWHG E\ WKH ILQDQFLDO VWUHQJWK RIWKH &RUSRUDWLRQ RU WKH UHVSHFWLYH
VSRQVRULQJDIILOLDWH

   3HQVLRQ%HQHILWV
   86 1RQ86
      
   PLOOLRQVRIGROODUV
$VVHWVLQH[FHVVRIOHVVWKDQEHQHILWREOLJDWLRQ 
 %DODQFHDW'HFHPEHU 
 )XQGHGSODQV     
 8QIXQGHGSODQV     
7RWDO     

7KH DXWKRULWDWLYH JXLGDQFH IRU GHILQHG EHQHILW SHQVLRQ DQG RWKHU SRVWUHWLUHPHQW SODQV UHTXLUHV DQ HPSOR\HU WR UHFRJQL]H WKH
RYHUIXQGHGRUXQGHUIXQGHGVWDWXVRIDGHILQHGEHQHILWSRVWUHWLUHPHQWSODQDVDQDVVHWRUOLDELOLW\LQLWVVWDWHPHQWRIILQDQFLDOSRVLWLRQ
DQGWRUHFRJQL]HFKDQJHVLQWKDWIXQGHGVWDWXVLQWKH\HDULQZKLFKWKHFKDQJHVRFFXUWKURXJKRWKHUFRPSUHKHQVLYHLQFRPH

   3HQVLRQ%HQHILWV 2WKHU3RVWUHWLUHPHQW
   86 1RQ86 %HQHILWV
             
   PLOOLRQVRIGROODUV
$VVHWVLQH[FHVVRIOHVVWKDQEHQHILWREOLJDWLRQ 
 %DODQFHDW'HFHPEHU      
 
$PRXQWVUHFRUGHGLQWKHFRQVROLGDWHGEDODQFH 
 VKHHWFRQVLVWRI 
 2WKHUDVVHWV      
 &XUUHQWOLDELOLWLHV       
 3RVWUHWLUHPHQWEHQHILWVUHVHUYHV       
7RWDOUHFRUGHG      
 
$PRXQWVUHFRUGHGLQDFFXPXODWHGRWKHU 
 FRPSUHKHQVLYHLQFRPHFRQVLVWRI 
 1HWDFWXDULDOORVVJDLQ      
 3ULRUVHUYLFHFRVW       
7RWDOUHFRUGHGLQDFFXPXODWHGRWKHU 
 FRPSUHKHQVLYHLQFRPH      

 )DLUYDOXHRIDVVHWVOHVVEHQHILWREOLJDWLRQVKRZQRQWKHSUHFHGLQJSDJH


127(672&2162/,'$7('),1$1&,$/67$7(0(176

7KH ORQJWHUP H[SHFWHG UDWH RI UHWXUQ RQ IXQGHG DVVHWV VKRZQ EHORZ LV HVWDEOLVKHG IRU HDFK EHQHILW SODQ E\ GHYHORSLQJ D
IRUZDUGORRNLQJORQJWHUPUHWXUQDVVXPSWLRQIRUHDFKDVVHWFODVVWDNLQJLQWRDFFRXQWIDFWRUVVXFKDVWKHH[SHFWHGUHDOUHWXUQIRU
WKHVSHFLILFDVVHWFODVVDQGLQIODWLRQ$VLQJOHORQJWHUPUDWHRIUHWXUQLVWKHQFDOFXODWHGDVWKHZHLJKWHGDYHUDJHRIWKHWDUJHWDVVHW
DOORFDWLRQSHUFHQWDJHVDQGWKHORQJWHUPUHWXUQDVVXPSWLRQIRUHDFKDVVHWFODVV

          2WKHU
    3HQVLRQ%HQHILWV 3RVWUHWLUHPHQW
    86 1RQ86 %HQHILWV
            
:HLJKWHGDYHUDJHDVVXPSWLRQVXVHGWR                 
 GHWHUPLQHQHWSHULRGLFEHQHILWFRVWIRU                  
 \HDUVHQGHG'HFHPEHU SHUFHQW
 'LVFRXQWUDWH          
 /RQJWHUPUDWHRIUHWXUQRQIXQGHGDVVHWV          
 /RQJWHUPUDWHRIFRPSHQVDWLRQLQFUHDVH          
   
&RPSRQHQWVRIQHWSHULRGLFEHQHILWFRVW  PLOOLRQVRIGROODUV
 6HUYLFHFRVW         
 ,QWHUHVWFRVW          
 ([SHFWHGUHWXUQRQSODQDVVHWV          
 $PRUWL]DWLRQRIDFWXDULDOORVVJDLQ          
 $PRUWL]DWLRQRISULRUVHUYLFHFRVW          
 1HWSHQVLRQHQKDQFHPHQWDQG 
 FXUWDLOPHQWVHWWOHPHQWFRVW          
1HWSHULRGLFEHQHILWFRVW         
  
  
  
&KDQJHVLQDPRXQWVUHFRUGHGLQDFFXPXODWHG  
 RWKHUFRPSUHKHQVLYHLQFRPH 
 1HWDFWXDULDOORVVJDLQ         
 $PRUWL]DWLRQRIDFWXDULDOORVVJDLQ          
 3ULRUVHUYLFHFRVWFUHGLW          
 $PRUWL]DWLRQRISULRUVHUYLFHFRVWFUHGLW          
 )RUHLJQH[FKDQJHUDWHFKDQJHV          
7RWDOUHFRUGHGLQRWKHUFRPSUHKHQVLYHLQFRPH          
7RWDOUHFRUGHGLQQHWSHULRGLFEHQHILWFRVWDQG 
 RWKHUFRPSUHKHQVLYHLQFRPHEHIRUHWD[         

&RVWVIRUGHILQHGFRQWULEXWLRQSODQVZHUHPLOOLRQPLOOLRQDQGPLOOLRQLQDQGUHVSHFWLYHO\


127(672&2162/,'$7('),1$1&,$/67$7(0(176

$VXPPDU\RIWKHFKDQJHLQDFFXPXODWHGRWKHUFRPSUHKHQVLYHLQFRPHLVVKRZQLQWKHWDEOHEHORZ

    7RWDO3HQVLRQDQG
    2WKHU3RVWUHWLUHPHQW%HQHILWV
       
   PLOOLRQVRIGROODUV
&KDUJHFUHGLWWRRWKHUFRPSUHKHQVLYHLQFRPHEHIRUHWD[       
 86SHQVLRQ     
 1RQ86SHQVLRQ      
 2WKHUSRVWUHWLUHPHQWEHQHILWV      
7RWDOFKDUJHFUHGLWWRRWKHUFRPSUHKHQVLYHLQFRPHEHIRUHWD[      
&KDUJHFUHGLWWRLQFRPHWD[VHH1RWH      
&KDUJHFUHGLWWRLQYHVWPHQWLQHTXLW\FRPSDQLHV      
&KDUJHFUHGLWWRRWKHUFRPSUHKHQVLYHLQFRPHLQFOXGLQJQRQFRQWUROOLQJ  
 LQWHUHVWVDIWHUWD[     
&KDUJHFUHGLWWRHTXLW\RIQRQFRQWUROOLQJLQWHUHVWV      
&KDUJHFUHGLWWRRWKHUFRPSUHKHQVLYHLQFRPHDWWULEXWDEOHWR([[RQ0RELO     

7KH&RUSRUDWLRQ¶VLQYHVWPHQWVWUDWHJ\IRUEHQHILWSODQDVVHWVUHIOHFWVDORQJWHUPYLHZDFDUHIXODVVHVVPHQWRIWKHULVNVLQKHUHQW
LQ SODQ DVVHWV DQG OLDELOLWLHV DQG EURDG GLYHUVLILFDWLRQ WR UHGXFH WKH ULVN RI WKH SRUWIROLR 7KH EHQHILW SODQ DVVHWV DUH SULPDULO\
LQYHVWHGLQSDVVLYHJOREDOHTXLW\DQGORFDOFXUUHQF\IL[HGLQFRPHLQGH[IXQGVWRGLYHUVLI\ULVNZKLOHPLQLPL]LQJFRVWV7KHHTXLW\
IXQGVKROG([[RQ0RELOVWRFNRQO\WRWKHH[WHQWQHFHVVDU\WRUHSOLFDWHWKHUHOHYDQWHTXLW\LQGH[7KHIL[HGLQFRPHIXQGVDUHODUJHO\
LQYHVWHGLQLQYHVWPHQWJUDGHFRUSRUDWHDQGJRYHUQPHQWGHEWVHFXULWLHV
6WXGLHVDUHSHULRGLFDOO\FRQGXFWHGWRHVWDEOLVKWKHSUHIHUUHGWDUJHWDVVHWDOORFDWLRQSHUFHQWDJHV7KHWDUJHWDVVHWDOORFDWLRQIRUWKH
86EHQHILWSODQVDQGWKHPDMRUQRQ86SODQVLVSHUFHQWHTXLW\VHFXULWLHVDQGSHUFHQWGHEWVHFXULWLHV7KHHTXLW\WDUJHWVIRU
WKH86DQGFHUWDLQQRQ86SODQVLQFOXGHDVPDOODOORFDWLRQWRSULYDWHHTXLW\SDUWQHUVKLSVWKDWSULPDULO\IRFXVRQHDUO\VWDJH
YHQWXUHFDSLWDORISHUFHQWDQGSHUFHQWUHVSHFWLYHO\
7KHIDLUYDOXHPHDVXUHPHQWOHYHOVDUHDFFRXQWLQJWHUPVWKDWUHIHUWRGLIIHUHQWPHWKRGVRIYDOXLQJDVVHWV7KHWHUPVGRQRWUHSUHVHQW
WKHUHODWLYHULVNRUFUHGLWTXDOLW\RIDQLQYHVWPHQW


127(672&2162/,'$7('),1$1&,$/67$7(0(176

7KHIDLUYDOXHRIWKHEHQHILWSODQDVVHWVLQFOXGLQJWKHOHYHOZLWKLQWKHIDLUYDOXHKLHUDUFK\LVVKRZQLQWKHWDEOHVEHORZ

   863HQVLRQ  1RQ863HQVLRQ
   )DLU9DOXH0HDVXUHPHQW   )DLU9DOXH0HDVXUHPHQW 
   DW'HFHPEHU8VLQJ   DW'HFHPEHU8VLQJ 
           1HW           1HW 
           $VVHW           $VVHW 
   /HYHO   /HYHO   /HYHO  9DOXH 7RWDO  /HYHO   /HYHO   /HYHO  9DOXH 7RWDO
   PLOOLRQVRIGROODUV
$VVHWFDWHJRU\     
 (TXLW\VHFXULWLHV     
  
  86             
 
  1RQ86              
  
 3ULYDWHHTXLW\             
  
 'HEWVHFXULWLHV    

  &RUSRUDWH               

  *RYHUQPHQW      
        

  $VVHWEDFNHG      
   
    
 &DVK      
   
   
 
7RWDODWIDLUYDOXH            

 ,QVXUDQFHFRQWUDFWV    

  DWFRQWUDFWYDOXH      

7RWDOSODQDVVHWV      

 3HU$68FHUWDLQLQVWUXPHQWVWKDWDUHPHDVXUHGDWIDLUYDOXHXVLQJWKH1HW$VVHW9DOXH1$9SHUVKDUHSUDFWLFDO
H[SHGLHQWKDYHQRWEHHQFDWHJRUL]HGLQWKHIDLUYDOXHKLHUDUFK\7KHIDLUYDOXHDPRXQWVSUHVHQWHGLQWKLVWDEOHDUHLQWHQGHGWR
SHUPLWUHFRQFLOLDWLRQRIWKHIDLUYDOXHKLHUDUFK\WRWKHWRWDOYDOXHRISODQDVVHWV
 )RUQRQ86HTXLW\VHFXULWLHVKHOGLQVHSDUDWHDFFRXQWVIDLUYDOXHLVEDVHGRQREVHUYDEOHTXRWHGSULFHVRQDFWLYHH[FKDQJHV
 )RUFRUSRUDWHJRYHUQPHQWDQGDVVHWEDFNHGGHEWVHFXULWLHVIDLUYDOXHLVEDVHGRQREVHUYDEOHLQSXWVRIFRPSDUDEOHPDUNHW
WUDQVDFWLRQV
 )RUJRYHUQPHQWGHEWVHFXULWLHVWKDWDUHWUDGHGRQDFWLYHH[FKDQJHVIDLUYDOXHLVEDVHGRQREVHUYDEOHTXRWHGSULFHV
 )RUFDVKEDODQFHVWKDWDUHVXEMHFWWRZLWKGUDZDOSHQDOWLHVRURWKHUDGMXVWPHQWVWKHIDLUYDOXHLVWUHDWHGDVD/HYHOLQSXW



127(672&2162/,'$7('),1$1&,$/67$7(0(176

   2WKHU3RVWUHWLUHPHQW
   )DLU9DOXH0HDVXUHPHQW  
   DW'HFHPEHU8VLQJ  
             1HW  
             $VVHW  
    /HYHO  /HYHO  /HYHO  9DOXH  7RWDO
    PLOOLRQVRIGROODUV
$VVHWFDWHJRU\   
 (TXLW\VHFXULWLHV   
  
  86         
  
  1RQ86         
     
 'HEWVHFXULWLHV  
  &RUSRUDWH        
   
  *RYHUQPHQW        
   
  $VVHWEDFNHG        
   
 &DVK            

7RWDODWIDLUYDOXH            

3HU$68FHUWDLQLQVWUXPHQWVWKDWDUHPHDVXUHGDWIDLUYDOXHXVLQJWKH1HW$VVHW9DOXH1$9SHUVKDUHSUDFWLFDO
H[SHGLHQWKDYHQRWEHHQFDWHJRUL]HGLQWKHIDLUYDOXHKLHUDUFK\7KHIDLUYDOXHDPRXQWVSUHVHQWHGLQWKLVWDEOHDUHLQWHQGHGWR
SHUPLWUHFRQFLOLDWLRQRIWKHIDLUYDOXHKLHUDUFK\WRWKHWRWDOYDOXHRISODQDVVHWV
)RUFRUSRUDWHJRYHUQPHQWDQGDVVHWEDFNHGGHEWVHFXULWLHVIDLUYDOXHLVEDVHGRQREVHUYDEOHLQSXWVRIFRPSDUDEOHPDUNHW
WUDQVDFWLRQV


127(672&2162/,'$7('),1$1&,$/67$7(0(176

7KHIDLUYDOXHRIWKHEHQHILWSODQDVVHWVLQFOXGLQJWKHOHYHOZLWKLQWKHIDLUYDOXHKLHUDUFK\LVVKRZQLQWKHWDEOHVEHORZ

   863HQVLRQ  1RQ863HQVLRQ
   )DLU9DOXH0HDVXUHPHQW   )DLU9DOXH0HDVXUHPHQW 
   DW'HFHPEHU8VLQJ   DW'HFHPEHU8VLQJ 
         1HW           1HW 
         $VVHW           $VVHW 
   /HYHO   /HYHO   /HYHO  9DOXH 7RWDO  /HYHO   /HYHO   /HYHO  9DOXH 7RWDO
   PLOOLRQVRIGROODUV
$VVHWFDWHJRU\     
 (TXLW\VHFXULWLHV     

  86            
  1RQ86              
  
 3ULYDWHHTXLW\          
   
   
 'HEWVHFXULWLHV   
  &RUSRUDWH              
  *RYHUQPHQW              

  $VVHWEDFNHG             
 &DVK              
7RWDODWIDLUYDOXH               
  
 ,QVXUDQFHFRQWUDFWV    
  DWFRQWUDFWYDOXH               
7RWDOSODQDVVHWV              


 3HU$68FHUWDLQLQVWUXPHQWVWKDWDUHPHDVXUHGDWIDLUYDOXHXVLQJWKH1HW$VVHW9DOXH1$9SHUVKDUHSUDFWLFDO
H[SHGLHQWKDYHQRWEHHQFDWHJRUL]HGLQWKHIDLUYDOXHKLHUDUFK\7KHIDLUYDOXHDPRXQWVSUHVHQWHGLQWKLVWDEOHDUHLQWHQGHGWR
SHUPLWUHFRQFLOLDWLRQRIWKHIDLUYDOXHKLHUDUFK\WRWKHWRWDOYDOXHRISODQDVVHWV
 )RUQRQ86HTXLW\VHFXULWLHVKHOGLQVHSDUDWHDFFRXQWVIDLUYDOXHLVEDVHGRQREVHUYDEOHTXRWHGSULFHVRQDFWLYHH[FKDQJHV
 )RUFRUSRUDWHJRYHUQPHQWDQGDVVHWEDFNHGGHEWVHFXULWLHVIDLUYDOXHLVEDVHGRQREVHUYDEOHLQSXWVRIFRPSDUDEOHPDUNHW
WUDQVDFWLRQV
 )RUJRYHUQPHQWGHEWVHFXULWLHVWKDWDUHWUDGHGRQDFWLYHH[FKDQJHVIDLUYDOXHLVEDVHGRQREVHUYDEOHTXRWHGSULFHV
 )RUFDVKEDODQFHVWKDWDUHVXEMHFWWRZLWKGUDZDOSHQDOWLHVRURWKHUDGMXVWPHQWVWKHIDLUYDOXHLVWUHDWHGDVD/HYHOLQSXW





127(672&2162/,'$7('),1$1&,$/67$7(0(176

   2WKHU3RVWUHWLUHPHQW
   )DLU9DOXH0HDVXUHPHQW  
   DW'HFHPEHU8VLQJ  
             1HW  
             $VVHW  
    /HYHO  /HYHO  /HYHO  9DOXH  7RWDO
   PLOOLRQVRIGROODUV
$VVHWFDWHJRU\   
 (TXLW\VHFXULWLHV   
  
  86      
  
  1RQ86       
  
 'HEWVHFXULWLHV 
  
  &RUSRUDWH       
  
  *RYHUQPHQW       
  
  $VVHWEDFNHG       
  
 &DVK      
7RWDODWIDLUYDOXH       

 3HU$68FHUWDLQLQVWUXPHQWVWKDWDUHPHDVXUHGDWIDLUYDOXHXVLQJWKH1HW$VVHW9DOXH1$9SHUVKDUHSUDFWLFDO
H[SHGLHQWKDYHQRWEHHQFDWHJRUL]HGLQWKHIDLUYDOXHKLHUDUFK\7KHIDLUYDOXHDPRXQWVSUHVHQWHGLQWKLVWDEOHDUHLQWHQGHGWR
SHUPLWUHFRQFLOLDWLRQRIWKHIDLUYDOXHKLHUDUFK\WRWKHWRWDOYDOXHRISODQDVVHWV
 )RUFRUSRUDWHJRYHUQPHQWDQGDVVHWEDFNHGGHEWVHFXULWLHVIDLUYDOXHLVEDVHGRQREVHUYDEOHLQSXWVRIFRPSDUDEOHPDUNHW
WUDQVDFWLRQV


127(672&2162/,'$7('),1$1&,$/67$7(0(176

$VXPPDU\RISHQVLRQSODQVZLWKDQDFFXPXODWHGEHQHILWREOLJDWLRQLQH[FHVVRISODQDVVHWVLVVKRZQLQWKHWDEOHEHORZ

  3HQVLRQ%HQHILWV
  86 1RQ86
          
  PLOOLRQVRIGROODUV
)RUIXQGHGSHQVLRQSODQVZLWKDQDFFXPXODWHGEHQHILWREOLJDWLRQ 
 LQH[FHVVRISODQDVVHWV 
 3URMHFWHGEHQHILWREOLJDWLRQ     
 $FFXPXODWHGEHQHILWREOLJDWLRQ         
 )DLUYDOXHRISODQDVVHWV         
      
)RUXQIXQGHGSHQVLRQSODQV     
 3URMHFWHGEHQHILWREOLJDWLRQ     
 $FFXPXODWHGEHQHILWREOLJDWLRQ         
     2WKHU
   3HQVLRQ%HQHILWV 3RVWUHWLUHPHQW
   86  1RQ86 %HQHILWV
  PLOOLRQVRIGROODUV
(VWLPDWHGDPRUWL]DWLRQIURPDFFXPXODWHGRWKHUFRPSUHKHQVLYHLQFRPH 
 1HWDFWXDULDOORVVJDLQ   
 3ULRUVHUYLFHFRVW     

 7KH&RUSRUDWLRQDPRUWL]HVWKHQHWEDODQFHRIDFWXDULDOORVVHVJDLQVDVDFRPSRQHQWRIQHWSHULRGLFEHQHILWFRVWRYHUWKH
DYHUDJHUHPDLQLQJVHUYLFHSHULRGRIDFWLYHSODQSDUWLFLSDQWV
 7KH&RUSRUDWLRQDPRUWL]HVSULRUVHUYLFHFRVWRQDVWUDLJKWOLQHEDVLVDVSHUPLWWHGXQGHUDXWKRULWDWLYHJXLGDQFHIRUGHILQHG
EHQHILWSHQVLRQDQGRWKHUSRVWUHWLUHPHQWEHQHILWSODQV

   3HQVLRQ%HQHILWV  2WKHU3RVWUHWLUHPHQW%HQHILWV
         0HGLFDUH
   86  1RQ86  *URVV  6XEVLG\5HFHLSW
   PLOOLRQVRIGROODUV 
           
&RQWULEXWLRQVH[SHFWHGLQ      
%HQHILWSD\PHQWVH[SHFWHGLQ   
        
        
        
        
        
        
           

'LVFORVXUHVDERXW6HJPHQWVDQG5HODWHG,QIRUPDWLRQ
7KH8SVWUHDP'RZQVWUHDPDQG&KHPLFDOIXQFWLRQVEHVWGHILQHWKHRSHUDWLQJVHJPHQWVRIWKHEXVLQHVVWKDWDUHUHSRUWHGVHSDUDWHO\
7KHIDFWRUVXVHGWRLGHQWLI\WKHVHUHSRUWDEOHVHJPHQWVDUHEDVHGRQWKHQDWXUHRIWKHRSHUDWLRQVWKDWDUHXQGHUWDNHQE\HDFKVHJPHQW
7KH8SVWUHDPVHJPHQWLVRUJDQL]HGDQGRSHUDWHVWRH[SORUHIRUDQGSURGXFHFUXGHRLODQGQDWXUDOJDV7KH'RZQVWUHDPVHJPHQW
LV RUJDQL]HG DQG RSHUDWHV WR PDQXIDFWXUH DQG VHOO SHWUROHXP SURGXFWV 7KH &KHPLFDO VHJPHQW LV RUJDQL]HG DQG RSHUDWHV WR
PDQXIDFWXUHDQGVHOOSHWURFKHPLFDOV7KHVHVHJPHQWVDUHEURDGO\XQGHUVWRRGDFURVVWKHSHWUROHXPDQGSHWURFKHPLFDOLQGXVWULHV
7KHVHIXQFWLRQVKDYHEHHQGHILQHGDVWKHRSHUDWLQJVHJPHQWVRIWKH&RUSRUDWLRQEHFDXVHWKH\DUHWKHVHJPHQWVWKDWHQJDJHLQ
EXVLQHVV DFWLYLWLHV IURP ZKLFK UHYHQXHV DUH UHFRJQL]HG DQG H[SHQVHV DUH LQFXUUHG ZKRVH RSHUDWLQJ UHVXOWV DUH UHJXODUO\
UHYLHZHGE\WKH&RUSRUDWLRQ¶VFKLHIRSHUDWLQJGHFLVLRQPDNHUWRPDNHGHFLVLRQVDERXWUHVRXUFHVWREHDOORFDWHGWRWKHVHJPHQWDQG
WRDVVHVVLWVSHUIRUPDQFHDQGIRUZKLFKGLVFUHWHILQDQFLDOLQIRUPDWLRQLVDYDLODEOH
(DUQLQJVDIWHULQFRPHWD[LQFOXGHWUDQVIHUVDWHVWLPDWHGPDUNHWSULFHV 


127(672&2162/,'$7('),1$1&,$/67$7(0(176

,Q FRUSRUDWH DQG ILQDQFLQJ DFWLYLWLHV LQWHUHVW UHYHQXH UHODWHV WR LQWHUHVW HDUQHG RQ FDVK GHSRVLWV DQG PDUNHWDEOHVHFXULWLHV
,QWHUHVWH[SHQVHLQFOXGHVQRQGHEWUHODWHGLQWHUHVWH[SHQVHRIPLOOLRQLQPLOOLRQLQDQGPLOOLRQLQ
              &RUSRUDWH 
 8SVWUHDP  'RZQVWUHDP &KHPLFDO  DQG &RUSRUDWH
 86 1RQ86  86 1RQ86  86 1RQ86  )LQDQFLQJ 7RWDO
  PLOOLRQVRIGROODUV
$VRI'HFHPEHU    
(DUQLQJVDIWHULQFRPHWD[              
(DUQLQJVRIHTXLW\FRPSDQLHVLQFOXGHGDERYH                   
6DOHVDQGRWKHURSHUDWLQJUHYHQXH                   
,QWHUVHJPHQWUHYHQXH                   
'HSUHFLDWLRQDQGGHSOHWLRQH[SHQVH                   
,QWHUHVWUHYHQXH                   
,QWHUHVWH[SHQVH                   
,QFRPHWD[H[SHQVHEHQHILW                   
$GGLWLRQVWRSURSHUW\SODQWDQGHTXLSPHQW                   
,QYHVWPHQWVLQHTXLW\FRPSDQLHV                   
7RWDODVVHWV                   
           
$VRI'HFHPEHU           
(DUQLQJVDIWHULQFRPHWD[              
(DUQLQJVRIHTXLW\FRPSDQLHVLQFOXGHGDERYH                   
6DOHVDQGRWKHURSHUDWLQJUHYHQXH                   
,QWHUVHJPHQWUHYHQXH                   
'HSUHFLDWLRQDQGGHSOHWLRQH[SHQVH                   
,QWHUHVWUHYHQXH                   
,QWHUHVWH[SHQVH                   
,QFRPHWD[H[SHQVHEHQHILW                   
(IIHFWRI86WD[UHIRUPQRQFDVK                   
$GGLWLRQVWRSURSHUW\SODQWDQGHTXLSPHQW                   
,QYHVWPHQWVLQHTXLW\FRPSDQLHV                   
7RWDODVVHWV                   
           
$VRI'HFHPEHU           
(DUQLQJVDIWHULQFRPHWD[             
(DUQLQJVRIHTXLW\FRPSDQLHVLQFOXGHGDERYH                   
6DOHVDQGRWKHURSHUDWLQJUHYHQXH                   
,QWHUVHJPHQWUHYHQXH                   
'HSUHFLDWLRQDQGGHSOHWLRQH[SHQVH                   
,QWHUHVWUHYHQXH                   
,QWHUHVWH[SHQVH                   
,QFRPHWD[H[SHQVHEHQHILW                   
$GGLWLRQVWRSURSHUW\SODQWDQGHTXLSPHQW                   
,QYHVWPHQWVLQHTXLW\FRPSDQLHV                   
7RWDODVVHWV                   

6HH1RWHIRUDGGLWLRQDOGHWDLOVUHJDUGLQJWKHFKDQJHLQ VHJPHQWDWLRQRI1RQVHUYLFHSHQVLRQDQGSRVWUHWLUHPHQWEHQHILW
H[SHQVH



127(672&2162/,'$7('),1$1&,$/67$7(0(176

*HRJUDSKLF      
       
6DOHVDQGRWKHURSHUDWLQJUHYHQXH      
   PLOOLRQVRIGROODUV
       
8QLWHG6WDWHV   
1RQ86    
 7RWDO    
  
6LJQLILFDQWQRQ86UHYHQXHVRXUFHVLQFOXGH 
 &DQDGD    
 8QLWHG.LQJGRP   
 %HOJLXP    
 6LQJDSRUH    
 )UDQFH    
 ,WDO\    
 *HUPDQ\    

5HYHQXHLVGHWHUPLQHGE\SULPDU\FRXQWU\RIRSHUDWLRQV([FOXGHVFHUWDLQVDOHVDQGRWKHURSHUDWLQJUHYHQXHVLQ1RQ86
RSHUDWLRQVZKHUHDWWULEXWLRQWRDVSHFLILFFRXQWU\LVQRWSUDFWLFDEOH

/RQJOLYHGDVVHWV      
   PLOOLRQVRIGROODUV
       
8QLWHG6WDWHV   
1RQ86   
 7RWDO   
 
6LJQLILFDQWQRQ86ORQJOLYHGDVVHWVLQFOXGH 
 &DQDGD     
 $XVWUDOLD      
 6LQJDSRUH      
 .D]DNKVWDQ      
 1LJHULD      
 3DSXD1HZ*XLQHD      
 $QJROD      
 5XVVLD      


127(672&2162/,'$7('),1$1&,$/67$7(0(176

,QFRPHDQG2WKHU7D[HV

                     
     86 1RQ86 7RWDO  86 1RQ86 7RWDO  86 1RQ86 7RWDO
          
PLOOLRQVRIGROODUV    
,QFRPHWD[H[SHQVH 
 )HGHUDODQGQRQ86 
  &XUUHQW          
  'HIHUUHGQHW                  
 86WD[RQQRQ86RSHUDWLRQV                  
   7RWDOIHGHUDODQGQRQ86                  
 6WDWH                  
   7RWDOLQFRPHWD[H[SHQVH                  
$OORWKHUWD[HVDQGGXWLHV         
 2WKHUWD[HVDQGGXWLHV                  
 ,QFOXGHGLQSURGXFWLRQDQG         
  PDQXIDFWXULQJH[SHQVHV               
 ,QFOXGHGLQ6* $H[SHQVHV               
  7RWDORWKHUWD[HVDQGGXWLHV          
   7RWDO          
  

7KHDERYHSURYLVLRQVIRUGHIHUUHGLQFRPHWD[HVLQFOXGHDQHWFUHGLWRIPLOOLRQLQUHODWHGWRFKDQJHVLQWD[ODZVDQGUDWHV
PDLQO\IURPDPLOOLRQFUHGLWUHODWHGWR86WD[UHIRUP)RUGHIHUUHGLQFRPHWD[H[SHQVHLQFOXGHVDQHWFUHGLWRI
PLOOLRQUHIOHFWLQJDPLOOLRQFUHGLWUHODWHGWR86WD[UHIRUPDQGPLOOLRQRIRWKHUFKDQJHVLQWD[ODZVDQGUDWHVRXWVLGH
RIWKH8QLWHG6WDWHV'HIHUUHGLQFRPHWD[H[SHQVHIRULQFOXGHVQHWFKDUJHVRIPLOOLRQIRUWKHHIIHFWRIFKDQJHVLQWD[
ODZVDQGUDWHV
)ROORZLQJ WKH 'HFHPEHU   HQDFWPHQW RI WKH 86 7D[ &XWV DQG -REV $FW LQ DFFRUGDQFH ZLWK $FFRXQWLQJ 6WDQGDUG
&RGLILFDWLRQ7RSLF,QFRPH7D[HVDQGIROORZLQJWKHJXLGDQFHRXWOLQHGLQWKH6(&6WDII$FFRXQWLQJ%XOOHWLQ1RWKH
&RUSRUDWLRQLQFOXGHGDPLOOLRQFUHGLWLQLWVUHVXOWVUHSUHVHQWLQJDUHDVRQDEOHHVWLPDWHRIWKHLQFRPHWD[HIIHFWVRIWKH
FKDQJHV LQ WD[ ODZ DQG WD[ UDWH 7KH &RUSRUDWLRQ¶V UHVXOWV IRU  LQFOXGH D  PLOOLRQ WD[ FUHGLW PDLQO\ LQ WKH 1RQ86
8SVWUHDPUHIOHFWLQJDQXSGDWHGHVWLPDWHRIWKHLPSDFWRI86WD[UHIRUPLQFOXGLQJFODULILFDWLRQVSURYLGHGLQSURSRVHGWUDQVLWLRQ
WD[UHJXODWLRQVLVVXHGE\WKH867UHDVXU\LQ7KH&RUSRUDWLRQKDVFRPSOHWHGLWVDFFRXQWLQJIRUWKHHQDFWPHQWGDWHLQFRPH
WD[HIIHFWVRIWKH867D[&XWVDQG-REV$FWLQDFFRUGDQFHZLWK$FFRXQWLQJ6WDQGDUG&RGLILFDWLRQ7RSLF,QFRPH7D[HV


127(672&2162/,'$7('),1$1&,$/67$7(0(176

7KHUHFRQFLOLDWLRQEHWZHHQLQFRPHWD[H[SHQVHDQGDWKHRUHWLFDO86WD[FRPSXWHGE\DSSO\LQJDUDWHRISHUFHQWIRUDQG
SHUFHQWIRUDQGLVDVIROORZV

        
    PLOOLRQVRIGROODUV
,QFRPHEHIRUHLQFRPHWD[HV  
 8QLWHG6WDWHV     
 1RQ86      
  7RWDO     
7KHRUHWLFDOWD[     
(IIHFWRIHTXLW\PHWKRGRIDFFRXQWLQJ      
1RQ86WD[HVLQH[FHVVRIOHVVWKDQWKHRUHWLFDO86WD[      
(QDFWPHQWGDWHHIIHFWVRI86WD[UHIRUP      
2WKHU      
  7RWDOLQFRPHWD[H[SHQVH     
     
(IIHFWLYHWD[UDWHFDOFXODWLRQ   
,QFRPHWD[HV     
([[RQ0RELOVKDUHRIHTXLW\FRPSDQ\LQFRPHWD[HV      
  7RWDOLQFRPHWD[HV      
1HWLQFRPHLQFOXGLQJQRQFRQWUROOLQJLQWHUHVWV      
  7RWDOLQFRPHEHIRUHWD[HV     
    
(IIHFWLYHLQFRPHWD[UDWH      

LQFOXGHVDPLOOLRQH[SHQVHIURPDQDGMXVWPHQWWRGHIHUUHGWD[HVDQGDPLOOLRQEHQHILWIURPDQDGMXVWPHQWWR
DWD[SRVLWLRQLQSULRU\HDUV
LQFOXGHVDQH[SORUDWLRQWD[EHQHILWRIPLOOLRQLQFOXGHVDQH[SORUDWLRQWD[EHQHILWRIPLOOLRQDQG
EHQHILWVIURPDQDGMXVWPHQWWRDSULRU\HDUWD[SRVLWLRQRIPLOOLRQ



127(672&2162/,'$7('),1$1&,$/67$7(0(176

'HIHUUHG LQFRPH WD[HV UHIOHFW WKH LPSDFW RI WHPSRUDU\ GLIIHUHQFHV EHWZHHQ WKH DPRXQW RI DVVHWV DQG OLDELOLWLHV UHFRJQL]HG IRU
ILQDQFLDOUHSRUWLQJSXUSRVHVDQGVXFKDPRXQWVUHFRJQL]HGIRUWD[SXUSRVHV
'HIHUUHGWD[OLDELOLWLHVDVVHWVDUHFRPSULVHGRIWKHIROORZLQJDW'HFHPEHU

7D[HIIHFWVRIWHPSRUDU\GLIIHUHQFHVIRU    
   PLOOLRQVRIGROODUV
     
3URSHUW\SODQWDQGHTXLSPHQW   
2WKHUOLDELOLWLHV    
 7RWDOGHIHUUHGWD[OLDELOLWLHV   
  
3HQVLRQDQGRWKHUSRVWUHWLUHPHQWEHQHILWV   
$VVHWUHWLUHPHQWREOLJDWLRQV   
7D[ORVVFDUU\IRUZDUGV   
2WKHUDVVHWV    
 7RWDOGHIHUUHGWD[DVVHWV   
  
$VVHWYDOXDWLRQDOORZDQFHV    
 1HWGHIHUUHGWD[OLDELOLWLHV   

,QDVVHWYDOXDWLRQDOORZDQFHVRIPLOOLRQGHFUHDVHGE\PLOOLRQLQFOXGLQJPLOOLRQUHODWHGWR86WD[UHIRUP
DQGPLOOLRQUHODWHGWRDUHGXFWLRQLQGHIHUUHGWD[DVVHWV

%DODQFHVKHHWFODVVLILFDWLRQ    
   PLOOLRQVRIGROODUV
     
2WKHUDVVHWVLQFOXGLQJLQWDQJLEOHVQHW    
'HIHUUHGLQFRPHWD[OLDELOLWLHV    
 1HWGHIHUUHGWD[OLDELOLWLHV   

7KH&RUSRUDWLRQ¶VXQGLVWULEXWHGHDUQLQJVIURPVXEVLGLDU\FRPSDQLHVRXWVLGHWKH8QLWHG6WDWHVLQFOXGHDPRXQWVWKDW KDYHEHHQ
UHWDLQHGWRIXQGSULRUDQGIXWXUHFDSLWDOSURMHFWH[SHQGLWXUHV'HIHUUHGLQFRPHWD[HVKDYHQRWEHHQUHFRUGHGIRUSRWHQWLDOIXWXUHWD[
REOLJDWLRQVVXFKDVIRUHLJQZLWKKROGLQJWD[DQGVWDWHWD[DVWKHVHXQGLVWULEXWHGHDUQLQJVDUHH[SHFWHGWREHLQGHILQLWHO\UHLQYHVWHG
IRU WKH IRUHVHHDEOH IXWXUH $V RI 'HFHPEHU   LW LV QRW SUDFWLFDEOH WR HVWLPDWH WKH XQUHFRJQL]HG GHIHUUHG WD[ OLDELOLW\
+RZHYHUXQUHFRJQL]HGGHIHUUHGWD[HVRQUHPLWWDQFHRIWKHVHIXQGVDUHQRWH[SHFWHGWREHPDWHULDO



127(672&2162/,'$7('),1$1&,$/67$7(0(176

8QUHFRJQL]HG7D[%HQHILWV7KH&RUSRUDWLRQLVVXEMHFWWRLQFRPHWD[DWLRQLQPDQ\MXULVGLFWLRQVDURXQGWKHZRUOG8QUHFRJQL]HG
WD[EHQHILWVUHIOHFWWKHGLIIHUHQFHEHWZHHQSRVLWLRQVWDNHQRUH[SHFWHGWREHWDNHQRQLQFRPHWD[UHWXUQVDQGWKHDPRXQWVUHFRJQL]HG
LQWKHILQDQFLDOVWDWHPHQWV7KHIROORZLQJWDEOHVXPPDUL]HVWKHPRYHPHQWLQXQUHFRJQL]HGWD[EHQHILWV

*URVVXQUHFRJQL]HGWD[EHQHILWV     
  PLOOLRQVRIGROODUV
      
%DODQFHDW-DQXDU\    
 $GGLWLRQVEDVHGRQFXUUHQW\HDU
VWD[SRVLWLRQV     
 $GGLWLRQVIRUSULRU\HDUV
WD[SRVLWLRQV     
 5HGXFWLRQVIRUSULRU\HDUV
WD[SRVLWLRQV     
 5HGXFWLRQVGXHWRODSVHRIWKHVWDWXWHRIOLPLWDWLRQV     
 6HWWOHPHQWVZLWKWD[DXWKRULWLHV     
 )RUHLJQH[FKDQJHHIIHFWVRWKHU     
%DODQFHDW'HFHPEHU    

7KH JURVV XQUHFRJQL]HG WD[ EHQHILW EDODQFHV VKRZQ DERYH DUH SUHGRPLQDQWO\ UHODWHG WR WD[ SRVLWLRQV WKDW ZRXOG UHGXFH WKH
&RUSRUDWLRQ¶V HIIHFWLYH WD[ UDWH LI WKH SRVLWLRQV DUH IDYRUDEO\ UHVROYHG 8QIDYRUDEOH UHVROXWLRQ RI WKHVH WD[ SRVLWLRQV JHQHUDOO\
ZRXOGQRWLQFUHDVHWKHHIIHFWLYHWD[UDWH7KHDQGFKDQJHVLQXQUHFRJQL]HGWD[EHQHILWVGLGQRWKDYHDPDWHULDO
HIIHFWRQWKH&RUSRUDWLRQ¶VQHWLQFRPH
5HVROXWLRQRIWKHVHWD[SRVLWLRQVWKURXJKQHJRWLDWLRQVZLWKWKHUHOHYDQWWD[DXWKRULWLHVRUWKURXJKOLWLJDWLRQZLOOWDNHPDQ\\HDUVWR
FRPSOHWH,WLVGLIILFXOWWRSUHGLFWWKHWLPLQJRIUHVROXWLRQIRUWD[SRVLWLRQVVLQFHVXFKWLPLQJLVQRWHQWLUHO\ZLWKLQWKHFRQWURORIWKH
&RUSRUDWLRQ,QWKH8QLWHG6WDWHVWKH&RUSRUDWLRQKDVYDULRXVRQJRLQJ86IHGHUDOLQFRPHWD[SRVLWLRQVDWLVVXHZLWKWKH,QWHUQDO
5HYHQXH6HUYLFH,56IRUWD[\HDUVEHJLQQLQJLQ7KH,56KDVDVVHUWHGSHQDOWLHVDVVRFLDWHGZLWKVHYHUDORIWKRVHSRVLWLRQV
7KH&RUSRUDWLRQKDVQRWUHFRJQL]HGWKHSHQDOWLHVDVDQH[SHQVHEHFDXVHWKH&RUSRUDWLRQGRHVQRWH[SHFWWKHSHQDOWLHVWREHVXVWDLQHG
XQGHUDSSOLFDEOHODZ7KH&RUSRUDWLRQKDVILOHGDUHIXQGVXLWIRUWD[\HDUVLQD86IHGHUDOGLVWULFWFRXUWZLWKUHVSHFWWR
WKHSRVLWLRQVDWLVVXHIRUWKRVH\HDUV8QIDYRUDEOHUHVROXWLRQRIDOOSRVLWLRQVDWLVVXHZLWKWKH,56 ZRXOGQRWKDYHDPDWHULDOO\
DGYHUVHHIIHFWRQWKH&RUSRUDWLRQ¶VQHWLQFRPHRUOLTXLGLW\
,WLVUHDVRQDEO\SRVVLEOHWKDWWKHWRWDODPRXQWRIXQUHFRJQL]HGWD[EHQHILWVFRXOGLQFUHDVHRUGHFUHDVHE\SHUFHQWLQWKHQH[W
PRQWKVZLWKQRPDWHULDOLPSDFWRQWKH&RUSRUDWLRQ
VQHWLQFRPH
7KHIROORZLQJWDEOHVXPPDUL]HVWKHWD[\HDUVWKDWUHPDLQVXEMHFWWRH[DPLQDWLRQE\PDMRUWD[MXULVGLFWLRQ

 &RXQWU\RI2SHUDWLRQ 2SHQ7D[<HDUV
 $EX'KDEL «
 $QJROD 
 $XVWUDOLD 
 %HOJLXP 
 &DQDGD 
 (TXDWRULDO*XLQHD 
 ,QGRQHVLD 
 ,UDT 
 0DOD\VLD 
 1LJHULD 
 1RUZD\ 
 3DSXD1HZ*XLQHD 
 5XVVLD 
 8QLWHG.LQJGRP 
 8QLWHG6WDWHV 

7KH&RUSRUDWLRQFODVVLILHVLQWHUHVWRQLQFRPHWD[UHODWHGEDODQFHVDVLQWHUHVWH[SHQVHRULQWHUHVWLQFRPHDQGFODVVLILHVWD[UHODWHG
SHQDOWLHVDVRSHUDWLQJH[SHQVH
7KH&RUSRUDWLRQLQFXUUHGPLOOLRQPLOOLRQDQGPLOOLRQLQLQWHUHVWH[SHQVHRQLQFRPHWD[UHVHUYHVLQDQG
UHVSHFWLYHO\ 7KH UHODWHG LQWHUHVW SD\DEOH EDODQFHV ZHUH  PLOOLRQ DQG  PLOOLRQ DW 'HFHPEHU  DQG 
UHVSHFWLYHO\



6833/(0(17$/,1)250$7,21212,/$1'*$6(;3/25$7,21$1'352'8&7,21$&7,9,7,(6XQDXGLWHG

7KH UHVXOWV RI RSHUDWLRQV IRU SURGXFLQJ DFWLYLWLHV VKRZQ EHORZ GR QRW LQFOXGH HDUQLQJV IURP RWKHU DFWLYLWLHV WKDW ([[RQ0RELO
LQFOXGHVLQWKH8SVWUHDPIXQFWLRQVXFKDVRLODQGJDVWUDQVSRUWDWLRQRSHUDWLRQV/1*OLTXHIDFWLRQDQGWUDQVSRUWDWLRQRSHUDWLRQV
FRDODQGSRZHURSHUDWLRQVWHFKQLFDOVHUYLFHDJUHHPHQWVRWKHUQRQRSHUDWLQJDFWLYLWLHVDQGDGMXVWPHQWVIRUQRQFRQWUROOLQJLQWHUHVWV
7KHVHH[FOXGHGDPRXQWVIRUERWKFRQVROLGDWHGDQGHTXLW\FRPSDQLHVWRWDOHGPLOOLRQLQPLOOLRQLQDQG
 PLOOLRQ LQ  2LO VDQGV PLQLQJ RSHUDWLRQV DUH LQFOXGHG LQ WKH UHVXOWV RI RSHUDWLRQV LQ DFFRUGDQFH ZLWK 6HFXULWLHV DQG
([FKDQJH&RPPLVVLRQDQG)LQDQFLDO$FFRXQWLQJ6WDQGDUGV%RDUGUXOHV

     &DQDGD         
    8QLWHG  2WKHU        $XVWUDOLD  
5HVXOWVRI2SHUDWLRQV  6WDWHV  $PHULFDV  (XURSH  $IULFD  $VLD  2FHDQLD  7RWDO
    PLOOLRQVRIGROODUV
&RQVROLGDWHG6XEVLGLDULHV  
5HYHQXH  
  6DOHVWRWKLUGSDUWLHV        
  7UDQVIHUV              
          
 3URGXFWLRQFRVWVH[FOXGLQJWD[HV              
 ([SORUDWLRQH[SHQVHV              
 'HSUHFLDWLRQDQGGHSOHWLRQ              
 7D[HVRWKHUWKDQLQFRPH              
 5HODWHGLQFRPHWD[              
 5HVXOWVRISURGXFLQJDFWLYLWLHVIRUFRQVROLGDWHG       
  VXEVLGLDULHV        
         
(TXLW\&RPSDQLHV       
5HYHQXH       
  6DOHVWRWKLUGSDUWLHV        
  7UDQVIHUV              
          
 3URGXFWLRQFRVWVH[FOXGLQJWD[HV              
 ([SORUDWLRQH[SHQVHV              
 'HSUHFLDWLRQDQGGHSOHWLRQ              
 7D[HVRWKHUWKDQLQFRPH              
 5HODWHGLQFRPHWD[              
 5HVXOWVRISURGXFLQJDFWLYLWLHVIRUHTXLW\FRPSDQLHV        
         
7RWDOUHVXOWVRIRSHUDWLRQV        
   




     &DQDGD      
    8QLWHG  2WKHU       $XVWUDOLD 
5HVXOWVRI2SHUDWLRQV  6WDWHV  $PHULFDV  (XURSH  $IULFD  $VLD  2FHDQLD  7RWDO
    PLOOLRQVRIGROODUV
&RQVROLGDWHG6XEVLGLDULHV       
5HYHQXH       
  6DOHVWRWKLUGSDUWLHV              
  7UDQVIHUV              
            
 3URGXFWLRQFRVWVH[FOXGLQJWD[HV              
 ([SORUDWLRQH[SHQVHV              
 'HSUHFLDWLRQDQGGHSOHWLRQ              
 7D[HVRWKHUWKDQLQFRPH              
 5HODWHGLQFRPHWD[              
 5HVXOWVRISURGXFLQJDFWLYLWLHVIRUFRQVROLGDWHG       
  VXEVLGLDULHV         

(TXLW\&RPSDQLHV       
5HYHQXH       
  6DOHVWRWKLUGSDUWLHV              
  7UDQVIHUV              
            
 3URGXFWLRQFRVWVH[FOXGLQJWD[HV              
 ([SORUDWLRQH[SHQVHV              
 'HSUHFLDWLRQDQGGHSOHWLRQ              
 7D[HVRWKHUWKDQLQFRPH              
 5HODWHGLQFRPHWD[              
 5HVXOWVRISURGXFLQJDFWLYLWLHVIRUHTXLW\FRPSDQLHV         

7RWDOUHVXOWVRIRSHUDWLRQV              

&RQVROLGDWHG6XEVLGLDULHV       
5HYHQXH       
  6DOHVWRWKLUGSDUWLHV              
  7UDQVIHUV              
            
 3URGXFWLRQFRVWVH[FOXGLQJWD[HV              
 ([SORUDWLRQH[SHQVHV              
 'HSUHFLDWLRQDQGGHSOHWLRQ              
 7D[HVRWKHUWKDQLQFRPH              
 5HODWHGLQFRPHWD[              
 5HVXOWVRISURGXFLQJDFWLYLWLHVIRUFRQVROLGDWHG       
  VXEVLGLDULHV         

(TXLW\&RPSDQLHV       
5HYHQXH       
  6DOHVWRWKLUGSDUWLHV              
  7UDQVIHUV              
            
 3URGXFWLRQFRVWVH[FOXGLQJWD[HV              
 ([SORUDWLRQH[SHQVHV              
 'HSUHFLDWLRQDQGGHSOHWLRQ              
 7D[HVRWKHUWKDQLQFRPH              
 5HODWHGLQFRPHWD[              
 5HVXOWVRISURGXFLQJDFWLYLWLHVIRUHTXLW\FRPSDQLHV         

7RWDOUHVXOWVRIRSHUDWLRQV              




2LODQG*DV([SORUDWLRQDQG3URGXFWLRQ&RVWV
7KHDPRXQWVVKRZQIRUQHWFDSLWDOL]HGFRVWVRIFRQVROLGDWHGVXEVLGLDULHVDUHPLOOLRQOHVVDW\HDUHQGDQG
PLOOLRQOHVVDW\HDUHQGWKDQWKHDPRXQWVUHSRUWHGDVLQYHVWPHQWVLQSURSHUW\SODQWDQGHTXLSPHQWIRUWKH8SVWUHDPLQ1RWH
7KLVLVGXHWRWKHH[FOXVLRQIURPFDSLWDOL]HGFRVWVRIFHUWDLQWUDQVSRUWDWLRQDQGUHVHDUFKDVVHWVDQGDVVHWVUHODWLQJWR/1*RSHUDWLRQV
$VVHWV UHODWHG WRRLO VDQGV DQG RLO VKDOH PLQLQJ RSHUDWLRQV DUH LQFOXGHG LQ WKH FDSLWDOL]HG FRVWV LQ DFFRUGDQFH ZLWK )LQDQFLDO
$FFRXQWLQJ6WDQGDUGV%RDUGUXOHV


       &DQDGD          
     8QLWHG  2WKHU       $XVWUDOLD 
&DSLWDOL]HG&RVWV   6WDWHV  $PHULFDV  (XURSH  $IULFD  $VLD  2FHDQLD  7RWDO
     PLOOLRQVRIGROODUV
&RQVROLGDWHG6XEVLGLDULHV  
$VRI'HFHPEHU   
 3URSHUW\DFUHDJHFRVWV 3URYHG        
  8QSURYHG              
  7RWDOSURSHUW\FRVWV         
 3URGXFLQJDVVHWV               
 ,QFRPSOHWHFRQVWUXFWLRQ               
  7RWDOFDSLWDOL]HGFRVWV         
 $FFXPXODWHGGHSUHFLDWLRQDQGGHSOHWLRQ              
 1HWFDSLWDOL]HGFRVWVIRUFRQVROLGDWHGVXEVLGLDULHV        
          
(TXLW\&RPSDQLHV        
$VRI'HFHPEHU        
 3URSHUW\DFUHDJHFRVWV 3URYHG        
  8QSURYHG              
  7RWDOSURSHUW\FRVWV         
 3URGXFLQJDVVHWV               
 ,QFRPSOHWHFRQVWUXFWLRQ               
  7RWDOFDSLWDOL]HGFRVWV         
 $FFXPXODWHGGHSUHFLDWLRQDQGGHSOHWLRQ              
 1HWFDSLWDOL]HGFRVWVIRUHTXLW\FRPSDQLHV        
          
&RQVROLGDWHG6XEVLGLDULHV       
$VRI'HFHPEHU        
 3URSHUW\DFUHDJHFRVWV 3URYHG        
  8QSURYHG              
  7RWDOSURSHUW\FRVWV         
 3URGXFLQJDVVHWV               
 ,QFRPSOHWHFRQVWUXFWLRQ               
  7RWDOFDSLWDOL]HGFRVWV         
 $FFXPXODWHGGHSUHFLDWLRQDQGGHSOHWLRQ              
 1HWFDSLWDOL]HGFRVWVIRUFRQVROLGDWHGVXEVLGLDULHV        
          
(TXLW\&RPSDQLHV        
$VRI'HFHPEHU        
 3URSHUW\DFUHDJHFRVWV 3URYHG        
  8QSURYHG        
  7RWDOSURSHUW\FRVWV         
 3URGXFLQJDVVHWV         
 ,QFRPSOHWHFRQVWUXFWLRQ         
  7RWDOFDSLWDOL]HGFRVWV         
 $FFXPXODWHGGHSUHFLDWLRQDQGGHSOHWLRQ        
 1HWFDSLWDOL]HGFRVWVIRUHTXLW\FRPSDQLHV        
    




2LODQG*DV([SORUDWLRQDQG3URGXFWLRQ&RVWVFRQWLQXHG
7KHDPRXQWVUHSRUWHGDVFRVWVLQFXUUHGLQFOXGHERWKFDSLWDOL]HGFRVWVDQGFRVWVFKDUJHGWRH[SHQVHGXULQJWKH\HDU&RVWVLQFXUUHG
DOVRLQFOXGHQHZDVVHWUHWLUHPHQWREOLJDWLRQVHVWDEOLVKHGLQWKHFXUUHQW\HDUDVZHOODVLQFUHDVHVRUGHFUHDVHVWRWKHDVVHWUHWLUHPHQW
REOLJDWLRQ UHVXOWLQJ IURP FKDQJHV LQ FRVW HVWLPDWHV RU DEDQGRQPHQW GDWH 7RWDO FRQVROLGDWHG FRVWV LQFXUUHG LQ  ZHUH
PLOOLRQGRZQPLOOLRQIURPGXHSULPDULO\WRORZHUDFTXLVLWLRQFRVWVRIXQSURYHGSURSHUWLHVSDUWLDOO\RIIVHW
E\KLJKHUGHYHORSPHQWFRVWV,QFRVWVZHUHPLOOLRQXSPLOOLRQIURPGXHSULPDULO\WRDFTXLVLWLRQVRI
XQSURYHGSURSHUWLHVSDUWLDOO\RIIVHWE\ORZHUGHYHORSPHQWFRVWVLQFOXGLQJORZHUDVVHWUHWLUHPHQWREOLJDWLRQFRVWHVWLPDWHVPDLQO\
LQWKH1RUWK6HD7RWDOHTXLW\FRPSDQ\FRVWVLQFXUUHGLQZHUHPLOOLRQGRZQPLOOLRQIURPGXHSULPDULO\
WRORZHUDFTXLVLWLRQFRVWVRIXQSURYHGSURSHUWLHV


       &DQDGD          
&RVWV,QFXUUHGLQ3URSHUW\$FTXLVLWLRQV  8QLWHG  2WKHU       $XVWUDOLD 
([SORUDWLRQDQG'HYHORSPHQW$FWLYLWLHV  6WDWHV  $PHULFDV  (XURSH  $IULFD  $VLD  2FHDQLD  7RWDO
    PLOOLRQVRIGROODUV
'XULQJ   
 &RQVROLGDWHG6XEVLGLDULHV  
  3URSHUW\DFTXLVLWLRQFRVWV 3URYHG        
   8QSURYHG           
  ([SORUDWLRQFRVWV         
  'HYHORSPHQWFRVWV               
  7RWDOFRVWVLQFXUUHGIRUFRQVROLGDWHGVXEVLGLDULHV              
          
 (TXLW\&RPSDQLHV  
  3URSHUW\DFTXLVLWLRQFRVWV 3URYHG         
   8QSURYHG        
  ([SORUDWLRQFRVWV               
  'HYHORSPHQWFRVWV               
  7RWDOFRVWVLQFXUUHGIRUHTXLW\FRPSDQLHV              
          
'XULQJ  
 &RQVROLGDWHG6XEVLGLDULHV       
  3URSHUW\DFTXLVLWLRQFRVWV 3URYHG            
   8QSURYHG            
  ([SORUDWLRQFRVWV               
  'HYHORSPHQWFRVWV         
  7RWDOFRVWVLQFXUUHGIRUFRQVROLGDWHGVXEVLGLDULHV              
          
 (TXLW\&RPSDQLHV  
  3URSHUW\DFTXLVLWLRQFRVWV 3URYHG            
   8QSURYHG            
  ([SORUDWLRQFRVWV               
  'HYHORSPHQWFRVWV         
  7RWDOFRVWVLQFXUUHGIRUHTXLW\FRPSDQLHV           
          
'XULQJ  
 &RQVROLGDWHG6XEVLGLDULHV       
  3URSHUW\DFTXLVLWLRQFRVWV 3URYHG            
   8QSURYHG           
  ([SORUDWLRQFRVWV               
  'HYHORSPHQWFRVWV         
  7RWDOFRVWVLQFXUUHGIRUFRQVROLGDWHGVXEVLGLDULHV          
          
 (TXLW\&RPSDQLHV        
  3URSHUW\DFTXLVLWLRQFRVWV 3URYHG            
   8QSURYHG           
  ([SORUDWLRQFRVWV               
  'HYHORSPHQWFRVWV         
  7RWDOFRVWVLQFXUUHGIRUHTXLW\FRPSDQLHV           




2LODQG*DV5HVHUYHV
7KHIROORZLQJLQIRUPDWLRQGHVFULEHVFKDQJHVGXULQJWKH\HDUVDQGEDODQFHVRISURYHGRLODQGJDVUHVHUYHVDW\HDUHQG
DQG
7KHGHILQLWLRQVXVHGDUHLQDFFRUGDQFHZLWKWKH6HFXULWLHVDQG([FKDQJH&RPPLVVLRQ¶V5XOHDRI5HJXODWLRQ6;
3URYHGRLODQGQDWXUDOJDVUHVHUYHVDUHWKRVHTXDQWLWLHVRIRLODQGQDWXUDOJDVZKLFKE\DQDO\VLVRIJHRVFLHQFHDQGHQJLQHHULQJ
GDWDFDQEHHVWLPDWHGZLWKUHDVRQDEOHFHUWDLQW\WREHHFRQRPLFDOO\SURGXFLEOH±IURPDJLYHQGDWHIRUZDUGIURPNQRZQUHVHUYRLUV
DQG XQGHU H[LVWLQJ HFRQRPLF FRQGLWLRQV RSHUDWLQJ PHWKRGV DQG JRYHUQPHQW UHJXODWLRQV ± SULRU WR WKH WLPH DW ZKLFK FRQWUDFWV
SURYLGLQJWKHULJKWWRRSHUDWHH[SLUHXQOHVVHYLGHQFHLQGLFDWHVWKDWUHQHZDOLVUHDVRQDEO\FHUWDLQ,QVRPHFDVHVVXEVWDQWLDOQHZ
LQYHVWPHQWVLQDGGLWLRQDOZHOOVDQGUHODWHGIDFLOLWLHVZLOOEHUHTXLUHGWRUHFRYHUWKHVHSURYHGUHVHUYHV
,QDFFRUGDQFHZLWKWKH6HFXULWLHVDQG([FKDQJH&RPPLVVLRQ¶V6(&UXOHVWKH&RUSRUDWLRQ¶V\HDUHQGUHVHUYHVYROXPHVDVZHOO
DVWKHUHVHUYHVFKDQJHFDWHJRULHVVKRZQLQWKHIROORZLQJWDEOHVDUHUHTXLUHGWREHFDOFXODWHGRQWKHEDVLVRIDYHUDJHSULFHVGXULQJ
WKHPRQWKSHULRGSULRUWRWKHHQGLQJGDWHRIWKHSHULRGFRYHUHGE\WKHUHSRUWGHWHUPLQHGDVDQXQZHLJKWHGDULWKPHWLFDYHUDJH
RIWKHILUVWGD\RIWKHPRQWKSULFHIRUHDFKPRQWKZLWKLQVXFKSHULRG7KHVHUHVHUYHVTXDQWLWLHVDUHDOVRXVHGLQFDOFXODWLQJXQLWRI
SURGXFWLRQGHSUHFLDWLRQUDWHVDQGLQFDOFXODWLQJWKHVWDQGDUGL]HGPHDVXUHRIGLVFRXQWHGQHWFDVKIORZV
5HYLVLRQVFDQLQFOXGHXSZDUGRUGRZQZDUGFKDQJHVLQSUHYLRXVO\HVWLPDWHGYROXPHVRISURYHGUHVHUYHVIRUH[LVWLQJILHOGVGXHWR
WKH HYDOXDWLRQ RU UHHYDOXDWLRQ RI DOUHDG\ DYDLODEOH JHRORJLF UHVHUYRLU RU SURGXFWLRQ GDWD QHZ JHRORJLF UHVHUYRLU RU
SURGXFWLRQGDWDRUFKDQJHVLQWKHDYHUDJHRIILUVWRIPRQWKRLODQGQDWXUDOJDVSULFHVDQGRUFRVWVWKDWDUHXVHGLQWKHHVWLPDWLRQ
RI UHVHUYHV 5HYLVLRQV FDQ DOVR UHVXOW IURP VLJQLILFDQW FKDQJHV LQ HLWKHU GHYHORSPHQW VWUDWHJ\ RU SURGXFWLRQ HTXLSPHQWIDFLOLW\
FDSDFLW\5HVHUYHYROXPHVWKDWZHUHVXEMHFWWRDGRZQZDUGUHYLVLRQFDQEHUHYLVHGXSZDUGDWVRPHSRLQWLQWKHIXWXUHZKHQSULFH
OHYHOVLQFUHDVHFRVWVGHFOLQHDQGRURSHUDWLQJHIILFLHQFLHVRFFXU
3URYHG UHVHUYHV LQFOXGH  SHUFHQW RI HDFK PDMRULW\RZQHG DIILOLDWH¶V SDUWLFLSDWLRQ LQ SURYHG UHVHUYHV DQG ([[RQ0RELO¶V
RZQHUVKLS SHUFHQWDJH RI WKH SURYHG UHVHUYHV RI HTXLW\ FRPSDQLHV EXW H[FOXGH UR\DOWLHV DQG TXDQWLWLHV GXH RWKHUV 1DWXUDO JDV
UHVHUYHVH[FOXGHWKHJDVHRXVHTXLYDOHQWRIOLTXLGVH[SHFWHGWREHUHPRYHGIURPWKHQDWXUDOJDVRQOHDVHVDWILHOGIDFLOLWLHVDQGDW
JDVSURFHVVLQJSODQWV7KHVHOLTXLGVDUHLQFOXGHGLQQHWSURYHGUHVHUYHVRIFUXGHRLODQGQDWXUDOJDVOLTXLGV
,QWKHSURYHGUHVHUYHVWDEOHVFRQVROLGDWHGUHVHUYHVDQGHTXLW\FRPSDQ\UHVHUYHVDUHUHSRUWHGVHSDUDWHO\+RZHYHUWKH&RUSRUDWLRQ
GRHVQRWYLHZHTXLW\FRPSDQ\UHVHUYHVDQ\GLIIHUHQWO\WKDQWKRVHIURPFRQVROLGDWHGFRPSDQLHV
5HVHUYHVUHSRUWHGXQGHUSURGXFWLRQVKDULQJDQGRWKHUQRQFRQFHVVLRQDU\DJUHHPHQWVDUHEDVHGRQWKHHFRQRPLFLQWHUHVWDVGHILQHG
E\WKHVSHFLILFILVFDOWHUPVLQWKHDJUHHPHQW7KHSURGXFWLRQDQGUHVHUYHVUHSRUWHGIRUWKHVHW\SHVRIDUUDQJHPHQWVW\SLFDOO\YDU\
LQYHUVHO\ZLWKRLODQGQDWXUDOJDVSULFHFKDQJHV$VRLODQGQDWXUDOJDVSULFHVLQFUHDVHWKHFDVKIORZDQGYDOXHUHFHLYHGE\WKH
FRPSDQ\LQFUHDVHKRZHYHUWKHSURGXFWLRQYROXPHVDQGUHVHUYHVUHTXLUHGWRDFKLHYHWKLVYDOXHZLOOW\SLFDOO\EHORZHUEHFDXVHRI
WKHKLJKHUSULFHV:KHQSULFHVGHFUHDVHWKHRSSRVLWHHIIHFWJHQHUDOO\RFFXUV7KHSHUFHQWDJHRIWRWDOOLTXLGVDQGQDWXUDOJDVSURYHG
UHVHUYHVFRQVROLGDWHGVXEVLGLDULHVSOXVHTXLW\FRPSDQLHVDW\HDUHQGWKDWZHUHDVVRFLDWHGZLWKSURGXFWLRQVKDULQJFRQWUDFW
DUUDQJHPHQWVZDVSHUFHQWRIOLTXLGVSHUFHQWRIQDWXUDOJDVDQGSHUFHQWRQDQRLOHTXLYDOHQWEDVLVQDWXUDOJDVLVFRQYHUWHG
WRDQRLOHTXLYDOHQWEDVLVDWVL[ELOOLRQFXELFIHHWSHURQHPLOOLRQEDUUHOV
1HWSURYHGGHYHORSHGUHVHUYHVDUHWKRVHYROXPHVWKDWDUHH[SHFWHGWREHUHFRYHUHGWKURXJKH[LVWLQJZHOOVZLWKH[LVWLQJHTXLSPHQW
DQGRSHUDWLQJPHWKRGVRULQZKLFKWKHFRVWRIWKHUHTXLUHGHTXLSPHQWLVUHODWLYHO\PLQRUFRPSDUHGWRWKHFRVWRIDQHZZHOO1HW
SURYHGXQGHYHORSHGUHVHUYHVDUHWKRVHYROXPHVWKDWDUHH[SHFWHGWREHUHFRYHUHGIURPQHZZHOOVRQXQGULOOHGDFUHDJHRUIURP
H[LVWLQJZHOOVZKHUHDUHODWLYHO\PDMRUH[SHQGLWXUHLVUHTXLUHGIRUUHFRPSOHWLRQ
&UXGHRLOQDWXUDOJDVOLTXLGVDQGQDWXUDOJDVSURGXFWLRQTXDQWLWLHVVKRZQDUHWKHQHWYROXPHVZLWKGUDZQIURP([[RQ0RELO¶VRLO
DQGQDWXUDOJDVUHVHUYHV7KHQDWXUDOJDVTXDQWLWLHVGLIIHUIURPWKHTXDQWLWLHVRIQDWXUDOJDVGHOLYHUHGIRUVDOHE\WKHSURGXFLQJ
IXQFWLRQDVUHSRUWHGLQWKH2SHUDWLQJ,QIRUPDWLRQGXHWRYROXPHVFRQVXPHGRUIODUHGDQGLQYHQWRU\FKDQJHV
7KHFKDQJHVEHWZHHQ\HDUHQGSURYHGUHVHUYHVDQG\HDUHQGSURYHGUHVHUYHVLQFOXGHXSZDUGUHYLVLRQVRIELOOLRQ
EDUUHOVRIELWXPHQDW.HDUODVDUHVXOWRILPSURYHGSULFHVGRZQZDUGQDWXUDOJDVUHYLVLRQVIRUWKH*URQLQJHQILHOGLQWKH1HWKHUODQGV
DQGH[WHQVLRQVGLVFRYHULHVSULPDULO\LQWKH8QLWHG6WDWHV,QWKH'XWFK&DELQHWQRWLILHG3DUOLDPHQWRILWVLQWHQWLRQWRIXUWKHU
UHGXFHSUHYLRXVO\OHJLVODWHG*URQLQJHQJDVH[WUDFWLRQLQUHVSRQVHWRVHLVPLFHYHQWVRYHUWKHODVWVHYHUDO\HDUV,QDQWLFLSDWLRQRID
ORZHU SURGXFWLRQ RXWORRN WKH &RUSRUDWLRQ UHGXFHG LWV HVWLPDWH RI SURYHG UHVHUYHV E\  ELOOLRQ RLOHTXLYDOHQW EDUUHOV IRU WKH
*URQLQJHQJDVILHOG
7KHFKDQJHVEHWZHHQ\HDUHQGSURYHGUHVHUYHVDQG\HDUHQGSURYHGUHVHUYHVSULPDULO\UHIOHFWH[WHQVLRQVGLVFRYHULHVLQ
WKH 8QLWHG 6WDWHV *X\DQD DQG WKH 8QLWHG $UDE (PLUDWHV DV ZHOO DV SXUFKDVHV LQ WKH 3HUPLDQ %DVLQ DQG RIIVKRUH $UHD  LQ
0R]DPELTXHDORQJZLWKXSZDUGUHYLVLRQVWR1RUWK$PHULFDQDWXUDOJDVOLTXLGVLQWKH8QLWHG$UDE(PLUDWHVDQGELWXPHQDW.HDUO
DQG&ROG/DNH'RZQZDUGUHYLVLRQVDUHUHIOHFWHGLQ(XURSHIRUWKH*URQLQJHQJDVILHOG
7KHGRZQZDUGUHYLVLRQVLQDVWKHUHVXOWRIYHU\ORZSULFHVGXULQJLQFOXGHGWKHHQWLUHELOOLRQEDUUHOVRIELWXPHQDW
.HDUO,QDGGLWLRQELOOLRQEDUUHOVRIRLOHTXLYDOHQWDFURVVWKHUHPDLQGHURI1RUWK$PHULFDQRORQJHUTXDOLILHGDVSURYHGUHVHUYHV
DW\HDUHQGPDLQO\GXHWRWKHDFFHOHUDWLRQRIWKHSURMHFWHGHQGRIILHOGOLIH



&UXGH2LO1DWXUDO*DV/LTXLGV%LWXPHQDQG6\QWKHWLF2LO3URYHG5HVHUYHV
    1DWXUDO*DV
  &UXGH2LO /LTXLGV %LWXPHQ  6\QWKHWLF2LO
   &DQDGD       &DQDGD   &DQDGD  
  8QLWHG 2WKHU   $XVWUDOLD    2WKHU   2WKHU  
  6WDWHV $PHULFDV (XURSH $IULFD $VLD 2FHDQLD 7RWDO :RUOGZLGH $PHULFDV   $PHULFDV  7RWDO
  PLOOLRQVRIEDUUHOV
1HWSURYHGGHYHORSHGDQG  
 XQGHYHORSHGUHVHUYHVRI  
 FRQVROLGDWHGVXEVLGLDULHV  
-DQXDU\           
 5HYLVLRQV           
 ,PSURYHGUHFRYHU\           
 3XUFKDVHV           
 6DOHV           
 ([WHQVLRQVGLVFRYHULHV           
 3URGXFWLRQ           
'HFHPEHU           
$WWULEXWDEOHWRQRQFRQWUROOLQJLQWHUHVWV     
   
3URSRUWLRQDOLQWHUHVWLQSURYHG  
 UHVHUYHVRIHTXLW\FRPSDQLHV  
-DQXDU\           
 5HYLVLRQV           
 ,PSURYHGUHFRYHU\           
 3XUFKDVHV           
 6DOHV           
 ([WHQVLRQVGLVFRYHULHV           
 3URGXFWLRQ           
'HFHPEHU           
7RWDOOLTXLGVSURYHGUHVHUYHV  
 DW'HFHPEHU           
   
1HWSURYHGGHYHORSHGDQG  
 XQGHYHORSHGUHVHUYHVRI  
 FRQVROLGDWHGVXEVLGLDULHV  
-DQXDU\           
 5HYLVLRQV           
 ,PSURYHGUHFRYHU\           
 3XUFKDVHV           
 6DOHV           
 ([WHQVLRQVGLVFRYHULHV           
 3URGXFWLRQ           
'HFHPEHU           
$WWULEXWDEOHWRQRQFRQWUROOLQJLQWHUHVWV     

3URSRUWLRQDOLQWHUHVWLQSURYHG  
 UHVHUYHVRIHTXLW\FRPSDQLHV  
-DQXDU\           
 5HYLVLRQV           
 ,PSURYHGUHFRYHU\           
 3XUFKDVHV           
 6DOHV           
 ([WHQVLRQVGLVFRYHULHV           
 3URGXFWLRQ           
'HFHPEHU           
7RWDOOLTXLGVSURYHGUHVHUYHV  
 DW'HFHPEHU           




&UXGH2LO1DWXUDO*DV/LTXLGV%LWXPHQDQG6\QWKHWLF2LO3URYHG5HVHUYHVFRQWLQXHG
    1DWXUDO*DV
  &UXGH2LO /LTXLGV %LWXPHQ  6\QWKHWLF2LO
   &DQDGD       &DQDGD   &DQDGD  
  8QLWHG 2WKHU   $XVWUDOLD    2WKHU   2WKHU  
  6WDWHV $PHULFDV (XURSH $IULFD $VLD 2FHDQLD 7RWDO :RUOGZLGH $PHULFDV   $PHULFDV  7RWDO
  PLOOLRQVRIEDUUHOV
1HWSURYHGGHYHORSHGDQG  
 XQGHYHORSHGUHVHUYHVRI  
 FRQVROLGDWHGVXEVLGLDULHV  
-DQXDU\           
 5HYLVLRQV           
 ,PSURYHGUHFRYHU\           
 3XUFKDVHV           
 6DOHV           
 ([WHQVLRQVGLVFRYHULHV           
 3URGXFWLRQ           
'HFHPEHU           
$WWULEXWDEOHWRQRQFRQWUROOLQJLQWHUHVWV     
   
3URSRUWLRQDOLQWHUHVWLQSURYHG  
 UHVHUYHVRIHTXLW\FRPSDQLHV  
-DQXDU\           
 5HYLVLRQV           
 ,PSURYHGUHFRYHU\           
 3XUFKDVHV           
 6DOHV           
 ([WHQVLRQVGLVFRYHULHV           
 3URGXFWLRQ           
'HFHPEHU           
7RWDOOLTXLGVSURYHGUHVHUYHV  
 DW'HFHPEHU           




&UXGH2LO1DWXUDO*DV/LTXLGV%LWXPHQDQG6\QWKHWLF2LO3URYHG5HVHUYHVFRQWLQXHG 
          6\QWKHWLF
   &UXGH2LODQG1DWXUDO*DV/LTXLGV %LWXPHQ  2LO 
    &DQDGD        &DQDGD  &DQDGD  
   8QLWHG 2WKHU     $XVWUDOLD   2WKHU  2WKHU  
   6WDWHV $PHULFDV (XURSH $IULFD $VLD 2FHDQLD 7RWDO $PHULFDV $PHULFDV  7RWDO
   PLOOLRQVRIEDUUHOV
3URYHGGHYHORSHGUHVHUYHVDVRI  
 'HFHPEHU  
  &RQVROLGDWHGVXEVLGLDULHV           
  (TXLW\FRPSDQLHV           
    
3URYHGXQGHYHORSHGUHVHUYHVDVRI  
 'HFHPEHU  
  &RQVROLGDWHGVXEVLGLDULHV           
  (TXLW\FRPSDQLHV           
7RWDOOLTXLGVSURYHGUHVHUYHVDW  
 'HFHPEHU           
    
3URYHGGHYHORSHGUHVHUYHVDVRI  
 'HFHPEHU  
  &RQVROLGDWHGVXEVLGLDULHV           
  (TXLW\FRPSDQLHV           
    
3URYHGXQGHYHORSHGUHVHUYHVDVRI  
 'HFHPEHU  
  &RQVROLGDWHGVXEVLGLDULHV           
  (TXLW\FRPSDQLHV           
7RWDOOLTXLGVSURYHGUHVHUYHVDW  
 'HFHPEHU            
    
3URYHGGHYHORSHGUHVHUYHVDVRI  
 'HFHPEHU  
  &RQVROLGDWHGVXEVLGLDULHV           
  (TXLW\FRPSDQLHV           
    
3URYHGXQGHYHORSHGUHVHUYHVDVRI  
 'HFHPEHU  
  &RQVROLGDWHGVXEVLGLDULHV           
  (TXLW\FRPSDQLHV           
7RWDOOLTXLGVSURYHGUHVHUYHVDW  
 'HFHPEHU            

 6HHSUHYLRXVSDJHVIRUQDWXUDOJDVOLTXLGVSURYHGUHVHUYHVDWWULEXWDEOHWRFRQVROLGDWHGVXEVLGLDULHVDQGHTXLW\FRPSDQLHV)RU
DGGLWLRQDOLQIRUPDWLRQRQQDWXUDOJDVOLTXLGVSURYHGUHVHUYHVVHH,WHP3URSHUWLHVLQ([[RQ0RELO¶V)RUP.




1DWXUDO*DVDQG2LO(TXLYDOHQW3URYHG5HVHUYHV        
  1DWXUDO*DV  
   &DQDGD      2LO(TXLYDOHQW
  8QLWHG 2WKHU    $XVWUDOLD  7RWDO
  6WDWHV $PHULFDV (XURSH $IULFD $VLD 2FHDQLD 7RWDO $OO3URGXFWV
  ELOOLRQVRIFXELFIHHW PLOOLRQVRIRLO
    HTXLYDOHQWEDUUHOV
1HWSURYHGGHYHORSHGDQGXQGHYHORSHG
 UHVHUYHVRIFRQVROLGDWHGVXEVLGLDULHV          
-DQXDU\        
 5HYLVLRQV        
 ,PSURYHGUHFRYHU\        
 3XUFKDVHV        
 6DOHV        
 ([WHQVLRQVGLVFRYHULHV        
 3URGXFWLRQ        
'HFHPEHU        
$WWULEXWDEOHWRQRQFRQWUROOLQJLQWHUHVWV 
 
3URSRUWLRQDOLQWHUHVWLQSURYHGUHVHUYHV
 RIHTXLW\FRPSDQLHV
-DQXDU\        
 5HYLVLRQV        
 ,PSURYHGUHFRYHU\        
 3XUFKDVHV        
 6DOHV        
 ([WHQVLRQVGLVFRYHULHV        
 3URGXFWLRQ        
'HFHPEHU        
7RWDOSURYHGUHVHUYHVDW'HFHPEHU        
 
1HWSURYHGGHYHORSHGDQGXQGHYHORSHG
 UHVHUYHVRIFRQVROLGDWHGVXEVLGLDULHV
-DQXDU\        
 5HYLVLRQV        
 ,PSURYHGUHFRYHU\        
 3XUFKDVHV        
 6DOHV        
 ([WHQVLRQVGLVFRYHULHV        
 3URGXFWLRQ        
'HFHPEHU        
$WWULEXWDEOHWRQRQFRQWUROOLQJLQWHUHVWV 
 
3URSRUWLRQDOLQWHUHVWLQSURYHGUHVHUYHV
 RIHTXLW\FRPSDQLHV
-DQXDU\        
 5HYLVLRQV        
 ,PSURYHGUHFRYHU\        
 3XUFKDVHV        
 6DOHV        
 ([WHQVLRQVGLVFRYHULHV        
 3URGXFWLRQ        
'HFHPEHU        
7RWDOSURYHGUHVHUYHVDW'HFHPEHU        

 1DWXUDOJDVLVFRQYHUWHGWRDQRLOHTXLYDOHQWEDVLVDWVL[ELOOLRQFXELFIHHWSHURQHPLOOLRQEDUUHOV




1DWXUDO*DVDQG2LO(TXLYDOHQW3URYHG5HVHUYHVFRQWLQXHG       
  1DWXUDO*DV  
   &DQDGD      2LO(TXLYDOHQW
  8QLWHG 2WKHU    $XVWUDOLD  7RWDO
  6WDWHV $PHULFDV (XURSH $IULFD $VLD 2FHDQLD 7RWDO $OO3URGXFWV
  ELOOLRQVRIFXELFIHHW PLOOLRQVRIRLO
    HTXLYDOHQWEDUUHOV
1HWSURYHGGHYHORSHGDQGXQGHYHORSHG
 UHVHUYHVRIFRQVROLGDWHGVXEVLGLDULHV          
-DQXDU\        
 5HYLVLRQV        
 ,PSURYHGUHFRYHU\        
 3XUFKDVHV        
 6DOHV        
 ([WHQVLRQVGLVFRYHULHV        
 3URGXFWLRQ        
'HFHPEHU        
$WWULEXWDEOHWRQRQFRQWUROOLQJLQWHUHVWV 
 
3URSRUWLRQDOLQWHUHVWLQSURYHGUHVHUYHV
 RIHTXLW\FRPSDQLHV
-DQXDU\        
 5HYLVLRQV        
 ,PSURYHGUHFRYHU\        
 3XUFKDVHV        
 6DOHV        
 ([WHQVLRQVGLVFRYHULHV        
 3URGXFWLRQ        
'HFHPEHU        
7RWDOSURYHGUHVHUYHVDW'HFHPEHU        

 1DWXUDOJDVLVFRQYHUWHGWRDQRLOHTXLYDOHQWEDVLVDWVL[ELOOLRQFXELFIHHWSHURQHPLOOLRQEDUUHOV




1DWXUDO*DVDQG2LO(TXLYDOHQW3URYHG5HVHUYHVFRQWLQXHG       
   1DWXUDO*DV  
    &DQDGD      2LO(TXLYDOHQW
   8QLWHG 2WKHU    $XVWUDOLD  7RWDO
   6WDWHV $PHULFDV (XURSH $IULFD $VLD 2FHDQLD 7RWDO $OO3URGXFWV
   ELOOLRQVRIFXELFIHHW PLOOLRQVRIRLO
     HTXLYDOHQWEDUUHOV
3URYHGGHYHORSHGUHVHUYHVDVRI
 'HFHPEHU
  &RQVROLGDWHGVXEVLGLDULHV        
  (TXLW\FRPSDQLHV        
  
3URYHGXQGHYHORSHGUHVHUYHVDVRI
 'HFHPEHU
  &RQVROLGDWHGVXEVLGLDULHV        
  (TXLW\FRPSDQLHV        
  
7RWDOSURYHGUHVHUYHVDW'HFHPEHU        
  
3URYHGGHYHORSHGUHVHUYHVDVRI
 'HFHPEHU
  &RQVROLGDWHGVXEVLGLDULHV        
  (TXLW\FRPSDQLHV        
  
3URYHGXQGHYHORSHGUHVHUYHVDVRI
 'HFHPEHU
  &RQVROLGDWHGVXEVLGLDULHV        
  (TXLW\FRPSDQLHV        
  
7RWDOSURYHGUHVHUYHVDW'HFHPEHU        
  
3URYHGGHYHORSHGUHVHUYHVDVRI
 'HFHPEHU
  &RQVROLGDWHGVXEVLGLDULHV        
  (TXLW\FRPSDQLHV        
  
3URYHGXQGHYHORSHGUHVHUYHVDVRI
 'HFHPEHU
  &RQVROLGDWHGVXEVLGLDULHV        
  (TXLW\FRPSDQLHV        
  
7RWDOSURYHGUHVHUYHVDW'HFHPEHU        

 1DWXUDOJDVLVFRQYHUWHGWRDQRLOHTXLYDOHQWEDVLVDWVL[ELOOLRQFXELFIHHWSHURQHPLOOLRQEDUUHOV




6WDQGDUGL]HG0HDVXUHRI'LVFRXQWHG)XWXUH&DVK)ORZV
$VUHTXLUHGE\WKH)LQDQFLDO$FFRXQWLQJ6WDQGDUGV%RDUGWKHVWDQGDUGL]HGPHDVXUHRIGLVFRXQWHGIXWXUHQHWFDVKIORZVLVFRPSXWHG
E\DSSO\LQJILUVWGD\RIWKHPRQWKDYHUDJHSULFHV\HDUHQGFRVWVDQGOHJLVODWHGWD[UDWHVDQGDGLVFRXQWIDFWRURISHUFHQWWRQHW
SURYHGUHVHUYHV7KHVWDQGDUGL]HGPHDVXUHLQFOXGHVFRVWVIRUIXWXUHGLVPDQWOHPHQWDEDQGRQPHQWDQGUHKDELOLWDWLRQREOLJDWLRQV
7KH&RUSRUDWLRQEHOLHYHVWKHVWDQGDUGL]HGPHDVXUHGRHVQRWSURYLGHDUHOLDEOHHVWLPDWHRIWKH&RUSRUDWLRQ¶VH[SHFWHGIXWXUHFDVK
IORZVWREHREWDLQHGIURPWKHGHYHORSPHQWDQGSURGXFWLRQRILWVRLODQGJDVSURSHUWLHVRURIWKHYDOXHRILWVSURYHGRLODQGJDV
UHVHUYHV7KHVWDQGDUGL]HG PHDVXUHLVSUHSDUHGRQWKHEDVLVRI FHUWDLQSUHVFULEHGDVVXPSWLRQVLQFOXGLQJ ILUVWGD\RIWKHPRQWK
DYHUDJHSULFHVZKLFKUHSUHVHQWGLVFUHWHSRLQWVLQWLPHDQGWKHUHIRUHPD\FDXVHVLJQLILFDQWYDULDELOLW\LQFDVKIORZVIURP\HDUWR
\HDUDVSULFHVFKDQJH


     &DQDGD          
6WDQGDUGL]HG0HDVXUHRI'LVFRXQWHG  8QLWHG  2WKHU        $XVWUDOLD  
)XWXUH&DVK)ORZV  6WDWHV $PHULFDV (XURSH  $IULFD  $VLD  2FHDQLD  7RWDO
   PLOOLRQVRIGROODUV
&RQVROLGDWHG6XEVLGLDULHV             
 $VRI'HFHPEHU  
  )XWXUHFDVKLQIORZVIURPVDOHVRIRLODQGJDV       
  )XWXUHSURGXFWLRQFRVWV        
  )XWXUHGHYHORSPHQWFRVWV        
  )XWXUHLQFRPHWD[H[SHQVHV        
  )XWXUHQHWFDVKIORZV       
  (IIHFWRIGLVFRXQWLQJQHWFDVKIORZVDW        
  'LVFRXQWHGIXWXUHQHWFDVKIORZV       
  
(TXLW\&RPSDQLHV             
 $VRI'HFHPEHU  
  )XWXUHFDVKLQIORZVIURPVDOHVRIRLODQGJDV       
  )XWXUHSURGXFWLRQFRVWV        
  )XWXUHGHYHORSPHQWFRVWV        
  )XWXUHLQFRPHWD[H[SHQVHV        
  )XWXUHQHWFDVKIORZV       
  (IIHFWRIGLVFRXQWLQJQHWFDVKIORZVDW        
  'LVFRXQWHGIXWXUHQHWFDVKIORZV       
  
7RWDOFRQVROLGDWHGDQGHTXLW\LQWHUHVWVLQ 
 VWDQGDUGL]HGPHDVXUHRIGLVFRXQWHG 
 IXWXUHQHWFDVKIORZV       

 ,QFOXGHVGLVFRXQWHGIXWXUHQHWFDVKIORZVDWWULEXWDEOHWRQRQFRQWUROOLQJLQWHUHVWVLQ([[RQ0RELOFRQVROLGDWHGVXEVLGLDULHVRI
PLOOLRQLQ




     &DQDGD          
6WDQGDUGL]HG0HDVXUHRI'LVFRXQWHG  8QLWHG  2WKHU        $XVWUDOLD  
)XWXUH&DVK)ORZVFRQWLQXHG  6WDWHV $PHULFDV (XURSH  $IULFD  $VLD  2FHDQLD  7RWDO
   PLOOLRQVRIGROODUV
&RQVROLGDWHG6XEVLGLDULHV             
 $VRI'HFHPEHU  
  )XWXUHFDVKLQIORZVIURPVDOHVRIRLODQGJDV       
  )XWXUHSURGXFWLRQFRVWV        
  )XWXUHGHYHORSPHQWFRVWV        
  )XWXUHLQFRPHWD[H[SHQVHV        
  )XWXUHQHWFDVKIORZV       
  (IIHFWRIGLVFRXQWLQJQHWFDVKIORZVDW        
  'LVFRXQWHGIXWXUHQHWFDVKIORZV       
  
(TXLW\&RPSDQLHV             
 $VRI'HFHPEHU  
  )XWXUHFDVKLQIORZVIURPVDOHVRIRLODQGJDV       
  )XWXUHSURGXFWLRQFRVWV        
  )XWXUHGHYHORSPHQWFRVWV        
  )XWXUHLQFRPHWD[H[SHQVHV        
  )XWXUHQHWFDVKIORZV       
  (IIHFWRIGLVFRXQWLQJQHWFDVKIORZVDW        
  'LVFRXQWHGIXWXUHQHWFDVKIORZV       
  
7RWDOFRQVROLGDWHGDQGHTXLW\LQWHUHVWVLQ 
 VWDQGDUGL]HGPHDVXUHRIGLVFRXQWHG 
 IXWXUHQHWFDVKIORZV       
 
&RQVROLGDWHG6XEVLGLDULHV             
 $VRI'HFHPEHU  
  )XWXUHFDVKLQIORZVIURPVDOHVRIRLODQGJDV       
  )XWXUHSURGXFWLRQFRVWV        
  )XWXUHGHYHORSPHQWFRVWV        
  )XWXUHLQFRPHWD[H[SHQVHV        
  )XWXUHQHWFDVKIORZV       
  (IIHFWRIGLVFRXQWLQJQHWFDVKIORZVDW        
  'LVFRXQWHGIXWXUHQHWFDVKIORZV       
  
(TXLW\&RPSDQLHV             
 $VRI'HFHPEHU  
  )XWXUHFDVKLQIORZVIURPVDOHVRIRLODQGJDV       
  )XWXUHSURGXFWLRQFRVWV        
  )XWXUHGHYHORSPHQWFRVWV        
  )XWXUHLQFRPHWD[H[SHQVHV        
  )XWXUHQHWFDVKIORZV       
  (IIHFWRIGLVFRXQWLQJQHWFDVKIORZVDW        
  'LVFRXQWHGIXWXUHQHWFDVKIORZV       
  
7RWDOFRQVROLGDWHGDQGHTXLW\LQWHUHVWVLQ 
 VWDQGDUGL]HGPHDVXUHRIGLVFRXQWHG 
 IXWXUHQHWFDVKIORZV       

 ,QFOXGHVGLVFRXQWHGIXWXUHQHWFDVKIORZVDWWULEXWDEOHWRQRQFRQWUROOLQJLQWHUHVWVLQ([[RQ0RELOFRQVROLGDWHGVXEVLGLDULHVRI
PLOOLRQLQDQGPLOOLRQLQ




&KDQJHLQ6WDQGDUGL]HG0HDVXUHRI'LVFRXQWHG)XWXUH1HW&DVK)ORZV5HODWLQJWR3URYHG2LODQG*DV5HVHUYHV


&RQVROLGDWHGDQG(TXLW\,QWHUHVWV        
     7RWDO
     6KDUHRI  &RQVROLGDWHG
    &RQVROLGDWHG  (TXLW\0HWKRG  DQG(TXLW\
    6XEVLGLDULHV  ,QYHVWHHV  ,QWHUHVWV
    PLOOLRQVRIGROODUV
           
'LVFRXQWHGIXWXUHQHWFDVKIORZVDVRI'HFHPEHU   
   
9DOXHRIUHVHUYHVDGGHGGXULQJWKH\HDUGXHWRH[WHQVLRQVGLVFRYHULHV 
 LPSURYHGUHFRYHU\DQGQHWSXUFKDVHVOHVVUHODWHGFRVWV    
&KDQJHVLQYDOXHRISUHYLRXV\HDUUHVHUYHVGXHWR 
 6DOHVDQGWUDQVIHUVRIRLODQGJDVSURGXFHGGXULQJWKH\HDUQHWRI 
  SURGXFWLRQOLIWLQJFRVWV    
 'HYHORSPHQWFRVWVLQFXUUHGGXULQJWKH\HDU    
 1HWFKDQJHLQSULFHVOLIWLQJDQGGHYHORSPHQWFRVWV    
 5HYLVLRQVRISUHYLRXVUHVHUYHVHVWLPDWHV    
 $FFUHWLRQRIGLVFRXQW    
1HWFKDQJHLQLQFRPHWD[HV    
  7RWDOFKDQJHLQWKHVWDQGDUGL]HGPHDVXUHGXULQJWKH\HDU   
   
'LVFRXQWHGIXWXUHQHWFDVKIORZVDVRI'HFHPEHU   
  

 6HFXULWLHVDQG([FKDQJH&RPPLVVLRQ6(&UXOHVUHTXLUHWKH&RUSRUDWLRQ¶VUHVHUYHVWREHFDOFXODWHGRQWKHEDVLVRIDYHUDJH
ILUVWRIPRQWKRLODQGQDWXUDOJDVSULFHVGXULQJWKHUHSRUWLQJ\HDU$VDUHVXOWRIYHU\ORZSULFHVGXULQJXQGHUWKH6(&
GHILQLWLRQRISURYHGUHVHUYHVFHUWDLQTXDQWLWLHVRIRLODQGQDWXUDOJDVWKDWTXDOLILHGDVSURYHGUHVHUYHVLQSULRU\HDUVGLGQRW
TXDOLI\DVSURYHGUHVHUYHVDW\HDUHQG)XWXUHQHWFDVKIORZVIRUWKHVHTXDQWLWLHVDUHH[FOXGHGIURPWKH6WDQGDUGL]HG
0HDVXUH RI 'LVFRXQWHG )XWXUH &DVK )ORZV 6XEVWDQWLDOO\ DOO RI WKLV UHGXFWLRQ LQ GLVFRXQWHG IXWXUH QHW FDVK IORZV VLQFH
'HFHPEHULVUHIOHFWHGLQWKHOLQH³1HWFKDQJHLQSULFHVOLIWLQJDQGGHYHORSPHQWFRVWV´LQWKHWDEOHDERYH


&RQVROLGDWHGDQG(TXLW\,QWHUHVWV        
     7RWDO
     6KDUHRI  &RQVROLGDWHG
    &RQVROLGDWHG  (TXLW\0HWKRG  DQG(TXLW\
    6XEVLGLDULHV  ,QYHVWHHV  ,QWHUHVWV
    PLOOLRQVRIGROODUV
           
'LVFRXQWHGIXWXUHQHWFDVKIORZVDVRI'HFHPEHU   
  
9DOXHRIUHVHUYHVDGGHGGXULQJWKH\HDUGXHWRH[WHQVLRQVGLVFRYHULHV
 LPSURYHGUHFRYHU\DQGQHWSXUFKDVHVOHVVUHODWHGFRVWV   
&KDQJHVLQYDOXHRISUHYLRXV\HDUUHVHUYHVGXHWR
 6DOHVDQGWUDQVIHUVRIRLODQGJDVSURGXFHGGXULQJWKH\HDUQHWRI
  SURGXFWLRQOLIWLQJFRVWV   
 'HYHORSPHQWFRVWVLQFXUUHGGXULQJWKH\HDU   
 1HWFKDQJHLQSULFHVOLIWLQJDQGGHYHORSPHQWFRVWV   
 5HYLVLRQVRISUHYLRXVUHVHUYHVHVWLPDWHV   
 $FFUHWLRQRIGLVFRXQW   
1HWFKDQJHLQLQFRPHWD[HV   
  7RWDOFKDQJHLQWKHVWDQGDUGL]HGPHDVXUHGXULQJWKH\HDU   
  
'LVFRXQWHGIXWXUHQHWFDVKIORZVDVRI'HFHPEHU   




&KDQJHLQ6WDQGDUGL]HG0HDVXUHRI'LVFRXQWHG)XWXUH1HW&DVK)ORZV5HODWLQJWR3URYHG2LODQG*DV5HVHUYHV


&RQVROLGDWHGDQG(TXLW\,QWHUHVWVFRQWLQXHG        
       7RWDO
       6KDUHRI  &RQVROLGDWHG
    &RQVROLGDWHG  (TXLW\0HWKRG  DQG(TXLW\
    6XEVLGLDULHV  ,QYHVWHHV  ,QWHUHVWV
    PLOOLRQVRIGROODUV
           
'LVFRXQWHGIXWXUHQHWFDVKIORZVDVRI'HFHPEHU   
  
9DOXHRIUHVHUYHVDGGHGGXULQJWKH\HDUGXHWRH[WHQVLRQVGLVFRYHULHV
 LPSURYHGUHFRYHU\DQGQHWSXUFKDVHVOHVVUHODWHGFRVWV   
&KDQJHVLQYDOXHRISUHYLRXV\HDUUHVHUYHVGXHWR
 6DOHVDQGWUDQVIHUVRIRLODQGJDVSURGXFHGGXULQJWKH\HDUQHWRI
  SURGXFWLRQOLIWLQJFRVWV   
 'HYHORSPHQWFRVWVLQFXUUHGGXULQJWKH\HDU   
 1HWFKDQJHLQSULFHVOLIWLQJDQGGHYHORSPHQWFRVWV   
 5HYLVLRQVRISUHYLRXVUHVHUYHVHVWLPDWHV   
 $FFUHWLRQRIGLVFRXQW   
1HWFKDQJHLQLQFRPHWD[HV   
  7RWDOFKDQJHLQWKHVWDQGDUGL]HGPHDVXUHGXULQJWKH\HDU   
  
'LVFRXQWHGIXWXUHQHWFDVKIORZVDVRI'HFHPEHU   


23(5$7,1*,1)250$7,21XQDXGLWHG
         
3URGXFWLRQRIFUXGHRLOQDWXUDOJDVOLTXLGVELWXPHQDQGV\QWKHWLFRLO         
 1HWSURGXFWLRQ WKRXVDQGVRIEDUUHOVGDLO\
  8QLWHG6WDWHV       
  &DQDGD2WKHU$PHULFDV       
  (XURSH       
  $IULFD       
  $VLD       
  $XVWUDOLD2FHDQLD       
 :RUOGZLGH       
1DWXUDOJDVSURGXFWLRQDYDLODEOHIRUVDOH         
 1HWSURGXFWLRQ PLOOLRQVRIFXELFIHHWGDLO\
  8QLWHG6WDWHV       
  &DQDGD2WKHU$PHULFDV       
  (XURSH       
  $IULFD       
  $VLD       
  $XVWUDOLD2FHDQLD       
 :RUOGZLGH     
   WKRXVDQGVRIRLOHTXLYDOHQWEDUUHOVGDLO\
2LOHTXLYDOHQWSURGXFWLRQ       
           
5HILQHU\WKURXJKSXW WKRXVDQGVRIEDUUHOVGDLO\
  8QLWHG6WDWHV       
  &DQDGD       
  (XURSH       
  $VLD3DFLILF       
  2WKHU1RQ86       
 :RUOGZLGH       
3HWUROHXPSURGXFWVDOHV  
  8QLWHG6WDWHV       
  &DQDGD       
  (XURSH       
  $VLD3DFLILFDQGRWKHU(DVWHUQ+HPLVSKHUH       
  /DWLQ$PHULFD       
 :RUOGZLGH       
  *DVROLQHQDSKWKDV       
  +HDWLQJRLOVNHURVHQHGLHVHORLOV       
  $YLDWLRQIXHOV       
  +HDY\IXHOV       
  6SHFLDOW\SHWUROHXPSURGXFWV       
 :RUOGZLGH       
&KHPLFDOSULPHSURGXFWVDOHV WKRXVDQGVRIPHWULFWRQV
  8QLWHG6WDWHV       
  1RQ86     
 :RUOGZLGH     

2SHUDWLQJVWDWLVWLFVLQFOXGHSHUFHQWRIRSHUDWLRQVRIPDMRULW\RZQHGVXEVLGLDULHVIRURWKHUFRPSDQLHVFUXGHSURGXFWLRQJDV
SHWUROHXPSURGXFWDQGFKHPLFDOSULPHSURGXFWVDOHVLQFOXGH([[RQ0RELO¶VRZQHUVKLSSHUFHQWDJHDQGUHILQLQJWKURXJKSXWLQFOXGHV
TXDQWLWLHVSURFHVVHGIRU([[RQ0RELO1HWSURGXFWLRQH[FOXGHVUR\DOWLHVDQGTXDQWLWLHVGXHRWKHUVZKHQSURGXFHGZKHWKHUSD\PHQW
LVPDGHLQNLQGRUFDVK
 1DWXUDOJDVLVFRQYHUWHGWRDQRLOHTXLYDOHQWEDVLVDWVL[PLOOLRQFXELFIHHWSHURQHWKRXVDQGEDUUHOV
 3HWUROHXP SURGXFW DQG FKHPLFDO SULPH SURGXFW VDOHV GDWD UHSRUWHG QHW RI SXUFKDVHVVDOHV FRQWUDFWV ZLWK WKH VDPH
FRXQWHUSDUW\




672&.3(5)250$1&(*5$3+6XQDXGLWHG

$QQXDOWRWDOUHWXUQWR([[RQ0RELOVKDUHKROGHUVZDVSHUFHQWLQWKH\HDUUHWXUQWKURXJKZDVSHUFHQWDQGWKH
\HDUUHWXUQZDVSHUFHQW7RWDOUHWXUQVPHDQVKDUHSULFHLQFUHDVHSOXVGLYLGHQGVSDLGZLWKGLYLGHQGVUHLQYHVWHG7KHJUDSKV
EHORZVKRZWKHUHODWLYHLQYHVWPHQWSHUIRUPDQFHRI([[RQ0RELOFRPPRQVWRFNWKH6 3DQGDQLQGXVWU\FRPSHWLWRUJURXSRYHU
WKHODVWILYHDQGWHQ\HDUV7KHLQGXVWU\FRPSHWLWRUJURXSFRQVLVWVRIIRXURWKHULQWHUQDWLRQDOLQWHJUDWHGRLOFRPSDQLHV%3&KHYURQ
5R\DO'XWFK6KHOODQG7RWDO


),9(<($5&808/$7,9(727$/5(78516
9DOXHRI,QYHVWHGDW<HDU(QG


 
 6 3
([[RQ0RELO

'ROODUV

 

 
  ,QGXVWU\*URXS

 
      

)LVFDO<HDUV(QGHG'HFHPEHU


([[RQ0RELO      

6 3      
,QGXVWU\*URXS      




7(1<($5&808/$7,9(727$/5(78516
9DOXHRI,QYHVWHGDW<HDU(QG


 

6 3

'ROODUV

,QGXVWU\*URXS
 



 
([[RQ0RELO 

 
          

)LVFDO<HDUV(QGHG'HFHPEHU


([[RQ0RELO           
6 3           
,QGXVWU\*URXS           




002CSN9B57